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5:41
So, uh, Tim Sweeney was taking a victory lap. I I sort of missed this. This was last Thursday.
5:48
Um, basically the Ninth Circuit struck down, you know, Apple trying to do something else in the Apple tax battle with Epic Games.
5:56
So, uh, a quick quick refresher on this.
6:00
Uh Tim Sweeney says the Apple tax is dead in the United States.
6:05
Uh this particular nail in the coffin comes from the Ninth Circuit.
6:10
Uh these things are never fully over.
6:12
I've learned like it's just it just there's there's a class action lawsuit, then there's another lawsuit, then there's this one, then there's appeals, then they go to the Supreme Court, then they go back to the Supreme Court. It's always up and down.
6:20
Like like that's just the nature of these things because the stakes are so so high.
6:25
Exposure seems a little hot on that. What's going on there?
6:27
Uh but basically um the court had had said uh that Apple could not charge 30% if a developer routed an app customer to their own payment page.
6:40
And so Apple was like, "Yeah, totally. We're cool with that.
6:45
How about 27% plus 3% for payments and 27% for like IP licensing?"
6:52
And so like the end result was exactly the same. It was literally 30%.
6:56
It was just like structured slightly differently.
7:00
They just changed the language and so uh they were they they were uh you know this was contempt like like you know it's like we we told you not to do this and you're still doing it Apple.
7:07
Uh and so now they they're not supposed to.
7:09
Uh of course like the weird takeaway here is like these big momentous things happen.
7:15
Um and then the stock moves like not at all.
7:18
Um because of course uh you know my conclusion from digging into this was that the fundamentally like consumer behavior has built up over almost two decades now.
7:29
I mean the app store launched I believe in 2007.
7:30
Uh this 30% fee this initial this whole saga starts in 2011.
7:36
This guy Robert Pepper he sues Apple along with three other plaintiffs. >> Mr. Pepper >> Mr.
7:43
Pepper um alleging that he was overcharged for iOS apps.
7:46
Imagine, I mean, that's not exactly what happened because it's like a class action lawsuit.
7:52
It's much bigger stakes, but it's funny to imagine a guy just saying, >> "I'm coming for you, Apple."
7:59
>> You know what, Flappy Bird, I was charged $2 for it. Should have been a $1.
8:04
70 or something like that. A$120.
8:04
Uh and and taking it all the way to the Supreme Court.
8:10
I mean, if he's a flower whale and he spent millions, tens of millions of dollars on the app. >> Yeah. >> But yeah. Yeah.
8:18
That the economics are a bit uh you know, >> you wouldn't normally see it somebody like that suing Apple because they're like, >> I you overcharge me by $2,000 across the lifetime and I'm suing you for damages.
8:32
And it's like a lawsuit that you know >> with a class action lawsuit obviously you get a couple plaintiffs who are exemplary of the problem and then when the settlement happens it's like billions of dollars paid to everyone who ever purchased an app right and and you see these things before like have did
8:48
you use Facebook between 2016 2017 you may be entitled to like 5 cents right class action settlements happen all the time obviously massive economic incentives for the uh for the lawyers who fight them anyway before I continue let me tell you about linear meet the software, meet the system for modern software development. Linear streamlines
9:04
Linear streamlines work across the entire development cycle from roadmap to release.
9:08
Um so um basically the uh you know Apple's going to work to so now the the court ruled that Apple can't do that anymore.
9:19
They can only collect fees that are in line with actual costs of facilitating links links to out to other other payment processes. cost for one link. >> I know. I know. It's crazy.
9:33
And the associated >> actually we need to use AI for this and we need to >> Yeah. No, no, no.
9:41
That's actually what's going to happen.
9:43
So, basically right now it's like the like if if I I'm I'm the uh I'm the app store. I'm Apple. I have the app store.
9:51
Um you have your own app and you have your own, you know, Stripe account and you want to pay you want to accept payments your way.
9:57
Um, Apple says, "Well, you know, even though we're, yes, you are checking out on your payment rails and it's your app, like I created the link and the technology that creates links within iOS and that is helping you.
10:12
So, you got to pay me an IP licensing fee and you know, typically it was like 27% of whatever you make, which doesn't make any sense because obviously my as Apple my my costs don't scale proportionally to your revenue.
10:25
It's it's linear with regard to my cost.
10:27
So like yes, if if Apple probably >> these are pricey links, John, these are pricey links.
10:34
>> Like you're laughing, but like like realistically like the the iOS team that has been working on just just links like there's there's code there.
10:41
There's code there like and they get paid a lot.
10:43
It's probably in the millions.
10:45
It might be, you know, across all of the different advertising. >> I know.
10:49
But if you're if you're there is a lot.
10:51
If you're a successful mobile developer, you've been paying millions of dollars to Apple forever and you're talking about millions like relatively fixed opex for Apple that again doesn't >> and they make 30 billion a year or something like that.
11:03
So so so it's like it like they have paid for the R&D by you know fully.
11:07
Um but basically you know there the the idea is like justifiable costs should be like 10 bucks maybe like a hundred bucks for reviewing an app and just saying okay we ran our software we understand the you know is this is this violating any rules.
11:24
We maybe had a human stop pop by and look at it for you know a couple minutes make sure that this is compliant with the app store.
11:30
Um and and then there are obviously be other costs but you know should it be millions of dollars?
11:36
Should it be proportional to revenue?
11:37
should be 30% of revenue.
11:37
Uh a lot of people have been arguing no.
11:40
Um but of course this will go back and forth and Apple will probably try and make the the the fee as high as possible of course because they have every incentive to um but uh what else is interesting about this?
11:53
So um so oh the the other interesting thing is in in pepper versus apple um there was this question of you know like where in the chain is the monopoly pricing having an effect like where is it increasing the the price of the good and so this all goes back this is uh Ben Thompson's like the best chronicler of this whole saga of course um and he he goes back to this Illinois brick company versus Illinois the state of Illinois.
12:23
And so this was in 1977 and the the Supreme Court held that only direct purchases of direct purchasers of illegally priced goods had standing to sue.
12:34
So uh the the Illinois brick case, this is pretty interesting.
12:38
He says uh the value chain was very straightforward.
12:41
Concrete block makers, including the aonomous Illinois brick company, great name for a company that makes concrete blocks. um Illinois.
12:51
>> They were accused of colluding colluding to fix prices of concrete blocks which were bought by masonry contractors.
12:58
Masonry contractors in turn submitted bids to general contractors for construction projects which were ultimately paid for by the state of Illinois.
13:06
And so the state of Illinois sued for damages alleging that the higher prices resulting from the price fixing had been passed through to the state of Illinois.
13:14
So even though the masonry contractors were like, "Okay, yeah, like uh the Illinois brick company is is is with all the other brick companies, they're jacking up prices, it doesn't really matter because they just passed that through."
13:24
And so there's a question about like, well, you didn't actually pay the higher price directly. Yeah.
13:31
>> State of Illinois, but it was passed through.
13:33
And so that that harm gets passed through.
13:34
And so, you know, he says in this value chain, it is obvious who the direct purchasers were.
13:38
Masonry contractors to the extent the state of Illinois suffered harm.
13:42
it was indirect pass through harm.
13:44
Thus, the Supreme Court ruled that the state of Illinois did not have standing.
13:48
So, the so the state of Illinois could not sue.
13:50
Then, uh if every party in the value chain were to sue, the infringing party could be the subject of duplicative recovery for damages and parsing out the share of damages would be extremely difficult.
14:01
So, it's the masonry contractors that have to sue.
14:03
Now, um in Apple versus Pepper, there's this question of who is harmed by Apple's alleged monopolistic practices.
14:11
According to the plaintiffs, the value chain looks the same as the concrete block manufacturers.
14:13
Basically, there's developers who sell their apps to Apple who sell those apps to consumers.
14:20
But Apple said, "Whoa, whoa, no.
14:24
We're not a retail store, even though it's called the App Store. It's not a real store.
14:28
We don't buy inventory and sell them." Yeah. Exactly.
14:31
We're more we're we're we're an agent.
14:35
>> And so, the company argued Apple does not buy and resell apps.
14:37
Instead, Apple acts as an agent for developers and says, as respondents notes, this is from the actual court case, the developer agreement confirms that Apple acts as an agent for app providers in providing the app store and is not a party to the sales contract or user agreement between the user and the app provider.
14:55
Thus, respondents concede that the direct sale is actually between developers and consumers, facilitated by Apple as an agent and conduit.
15:02
And that sort of makes sense.
15:04
You know, you go to a grocery store, they buy the apples from the farmer, they sell them to the customer, they take possession.
15:08
A real estate agent facilitates a transaction. >> Fee takes a fee. Takes a fee.
15:16
>> If Apple if Apple was actually going and like buying licenses and then reselling them, you know, they'd be negotiating like crazy, too, and be like, "We'll give you a dollar and then we're going to sell it for $10."
15:25
You could argue it'd be even worse for >> developers in that situation. >> Yeah.
15:30
And so um the the the interesting thing about um about this uh this whole case is uh just just how much the reality of the shape of the app store and and the business of the services services narrative changed the uh the entire financial story of Apple over the last I guess uh decade and a half. Yeah.
15:56
Um the if you want to look at Apple's stock, you should head over to public. com.
15:59
Investing for those who take it seriously.
16:01
Big on multiasset investing.
16:03
They're trusted by millions.
16:05
Um but what you should do if you go and you look at Apple is look at the price toearnings ratio because back in 2011 it was 9. 7.
16:12
Let's call it 10x price to earnings. Today it's 37x.
16:19
So obviously the business has grown but the the value of the earnings is so much higher. Why is that?
16:24
It's because it's so much stickier and it's because they've developed this this services monopoly essentially where they have aggregated, you know, it's the Ben Thompson aggregation, >> the toll road for your life. >> It's not a toll road.
16:39
>> That's a good that's a great that's a great thing.
16:40
It's a there is a difference between a toll and a tax and a toll is something that you pay that is directly linked to the to the service that you're getting. >> Okay.
16:50
So your road would be more like a toll road now.
16:53
Now, yes, now it will be a toll road and we should celebrate that or developers should celebrate that.
16:57
Tim Schweeny should be celebrating that because a toll road is something where it's like it's like I'm paying $5 to drive down this road.
17:06
That money goes directly towards this road. >> Yeah.
17:09
The tax structure applied to a toll road is like what economic value are you creating by driving my road? >> Exactly.
17:15
>> We're going to charge 30% of that. >> Exactly.
17:17
Oh, you're Oh, you're you're transporting a shipment of televisions on this road.
17:21
on this road. those are high margin or oh you're you know oh you're you're a rich person driving >> you have some GPUs I have GPUs on your truck are you not >> yeah yeah oh oh you can certainly break us off more as opposed to saying you
17:35
know every time someone drives on this road it takes a dollar of depreciation we need a million dollars to repave it every year and so we need to link the link the cost of using the service with the actual underlying cost of operating that service. My question with these
17:48
My question with these changes is what is the what is the consumer experience going to be when trying to cancel subscriptions?
17:56
Because the one aspect of the app store that I've always appreciated is the ability to oneclick cancel from within the app store and not having to go to individual apps or services and cancel. Yeah.
18:09
And so I do wonder as soon as you let payments live outside of the app store, everyone has experienced any type of software or retailer making it hard to figure out how to cancel a subscription.
18:22
And so will Apple keep that kind of oneclick cancellation ability within the app or will they actually have to >> no?
18:29
I mean this already exists because like you can go put your credit card down in Fortnite.
18:33
The thing is that I think the subscription revenue is not as much as you think.
18:39
it's not as much of a driver like the inapp payments, the the the oneoff clicks, like those are much that's a much bigger driver of overall um economic activity, but I don't know.
18:50
Uh on on the subscription side, it would be interesting if there's like so some sort of reaggregation at like the Stripe level or something like that. Um I don't really know.
18:57
But in general, uh the interesting thing is that like um so Apple's price to earnings goes from 10 to 40 basically like massive runup.
19:04
And this is all on the back of like the services narrative that uh that uh Luca Maestry the CFO um sort of outlined in I think 2016.
19:17
He said each quarter we report uh for our services category which in includes revenue from iTunes, the App Store, Apple Care, iCloud, Apple Pay, licensing and some other items.
19:28
Today we would like to highlight the major drivers of growth in this category which we have summarized on page three of our supplemental materials.
19:34
the vast majority of the services that we provide to our customers, for instance, apps, movies, TV shows are tied to our install base of devices rather than to current quarter sales.
19:43
And so he's saying like you you you need to stop thinking about our our financial performance as driven by how many phones do we sell this quarter?
19:52
quarter? you need to think about just how many users we have broadly and start valuing us more like Facebook like you know if you're an iPhone user doesn't really matter if you bought a new one this quarter obviously that's sort of continuing but the big
20:10
the big game is better monetization on top of the user base >> we should try to get Justin Khan on to talk about his company Stash because Stash is effectively payments built for game developers >> interesting circumn very cool uh the app store. Yeah. And so that they're very Yeah.
20:25
And so that they're very well positioned here. >> Yeah.
20:28
Uh so Luca Masonry went on to say for some of these services such as content, we recognize revenue based on transaction value.
20:35
For some of these services such as app store, we share a portion of the value of each transaction with the app developer and we only recognize revenue on the portion that we keep.
20:44
to fully comprehend the scale of the services that we are delivering to our installed base and how fast this business is growing.
20:50
We look at purchases in addition to revenue.
20:52
When we aggregate the purchase value of all the services tied to our install base during fiscal 2015, it adds up to more than 31 billion.
21:00
That's an increase of 23% over 2014.
21:02
So he's like uh and so Ben Thompson has some funny quotes here.
21:07
He says like, "First off, it's striking that when Apple was facing one of the most challenging years in the stock market, its first response was basically to make the plaintiff's point in Apple versus Pepper, suddenly the company wanted to recognize all of the app revenue, a portion of which is shared with developers.
21:20
Sounds like a company in the middle. Sounds like a tax."
21:22
Um, and then secondly, >> wait, repeat that original line you said they've grown 34%. >> Uh, 31 billion.
21:31
they they increased uh 12 uh 23% over fiscal 2012 uh uh 2014 was the historical growth.
21:40
So basically what basically what's going on is Luca Maestry is the CFO of Apple and he's he's having trouble in the market because it's 2015 and what's happening?
21:50
Well, you're eight years into the iPhone.
21:52
2007 the iPhone comes out. It's expensive. It doesn't have 3G.
21:55
It's got a lot of rough edges, >> doesn't have copy and paste, >> but it's cool and it's in interesting and there's lines out the door for them and and it's and people at the higher end like a cell phone back then was like a hundred bucks or you'd get it for free.
22:11
You you'd get it you'd get it as part of a uh you know bundle. >> Yeah. Yeah. Yeah.
22:15
Every two years you'd get um you get a new you'd get a new phone and uh and it was free basically.
22:23
Uh then the iPhone comes in. It's uh it's $600.
22:26
very expensive, very up market.
22:29
Then a year or two in, they start figuring out how to bring down the price.
22:33
It comes down to like 300, 400.
22:35
There's these incentives for signing up for a year-long plan.
22:37
There's a whole variety of things that make it, you know, the app store comes out.
22:40
There's like there's just more functionality.
22:44
You don't you you no longer are uh like, well, my BlackBerry still does this, but Apple doesn't.
22:49
It's like, no, they do the enterprise stuff.
22:50
They they've checked all the boxes.
22:51
And so it's growing, growing, growing, but eight years in, everyone who has one like they won the game.
22:57
And so device like actual the device install base, device sales are starting to flatline. Yeah.
23:02
And so >> then they need sort of the new a new narrative for the stock because it's get sort of getting beat up because Apple's basically winning the sold everyone an iPhone, >> but it's over that like the trade's over, right?
23:14
It's like, yeah, we get it.
23:16
Everyone has smartphones now.
23:16
So the the the uh uh uh iPhone revenue is basically or or unit sales are slowing significantly.
23:26
Of course, they're able to raise prices still because people are locked in.
23:30
Like it's a good business, but it's not this like incredibly high growth thing anymore.
23:33
So Luca Masonry needs to come in with a new narrative and that's the services narrative.
23:36
And so the services narrative is is saying, "Hey, for a long time you've been looking at this bucket of basically like other revenue.
23:44
We have device sales, which you've been obsessed with as the investor, as the Wall Street, you've been obsessed with, you know, how many iPhones we're selling, how much we're selling them for, our margins on those iPhones, how how many we can make, all of that.
23:56
Uh, and then we've had this other bucket, which is like iTunes, App Store, Apple Care, iCloud, Apple Pay, License, a bunch of >> funny treating it like the storage feature on the iPhone where it's like, hey, you have like photos and these other things that are taking and apps and then like, don't worry about other. >> Yeah. Don't worry about other. Don't worry about other.
24:15
>> We're just going to throw everything in there.
24:16
>> Don't worry about other because we don't really know how it's growing. Is it that high margin? We don't know.
24:19
Then all of a sudden it became like don't just not worry about other.
24:24
Like in fact focus entirely on it.
24:27
>> Focus on it exclusively because it is the best revenue that's super high margin and it's growing really fast.
24:31
And oh by the way if you zoom out and you look at the economic activity that is driving on top of the app store that's you know yes our take rates 30%.
24:40
But on top of it, just in 2015, it's $ 31 billion of economic activity in that ecosystem.
24:47
And so, uh, this is this is like an admission of like the economic power that they have, but um, uh, Ben Thompson was not a fan of it at the time.
24:59
I mean, I mean, he was he was a fan from the stock price perspective, but he he had some really really harsh words.
25:03
Um he he said at the time uh it seems incredibly worrisome to me anytime a company uh predic that predicates its growth story on rent seeking.
25:10
It's not that the growth isn't real but rather the pursuit is corrosive on whatever it was that made the company great in the first place. It's like whoa.
25:19
It's sort of like okay they're they're going like private equity mode.
25:24
Like the beautiful art the creativity is is gone at this point.
25:29
Uh and that's a large >> Tim Tim Cook has effectively done exactly that. >> Yeah.
25:34
And he says that is a particular again this is from 2018 uh that is a particularly large concern for Apple.
25:40
The company has always succeeded by being the best.
25:42
How does the company maintain it that edge when its executives are more concerned with harvesting the profits from other companies innovations.
25:51
So going forward the growth story of Apple has been someone else innovates someone else creates an app and we'll take 30% and we don't need to do the innovation that doesn't need to happen here.
26:01
Y >> and that's a big shift in the narrative whereas before all through 70s ' 80s 90s 2000s it was like the innovation comes from Apple that >> they're like we're going to make the iPhone 1700 it's going to be newer, lighter, better, faster, stronger and they're going to buy it and then we're going to then we're going to take take our cut from everything on top of it. >> Exactly. Exactly.
26:23
>> Uh anyways, should we continue? >> Yeah, we can move on.
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Let me tell you about Apple's newest partner, Gemini.
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State-of-the-art reasoning, next level vibe coding, and deep multimodal understanding.
26:38
>> Uh Megan >> Megan in the Wall Street Journal has a scoop.
26:42
OpenAI ended a policy earlier this week that required employees to work at the company for six months before they're equity vested.
26:48
>> We they only have a six-month cliff.
26:50
Yeah, it was already already short.
26:50
Um, a few months ago, XAI shortened their waiting period known as a vesting cliff from 12 months to six.
26:56
Uh, and then there's been, I don't know if you want to start reading through it at all, but the >> change to the vesting cliff announced by applications chief Fiji Simo came on our show last week, uh, is designed to encourage new employees to take risks without fear of being let go before access accessing the first chunk of equity. Interesting.
27:18
So, so they had a problem where people would come in and say, "Okay, I gotta just do politics for the first six months because I don't want to get fired before that's like that's a crazy culture."
27:29
I feel like >> I think this has to be more reactionary to meta. >> Yeah. >> And >> I don't know.
27:37
Yeah, let's let's >> and obviously some of the other >> OpenAI short has shortened its vesting period for new employees to six months from the industry standard to 12 months in April.
27:48
Um, we have to we have to ask Evan Spiegel about how he thinks about um vesting periods and and running a public company where your your employees can uh you know sell the stock that they get.
27:59
He's the perfect person to ask about this uh this exact article. Let's see.
28:03
Elon Musk's XAI and OpenAI competitor made a similar change in late summer.
28:08
People familiar with the matter with the matter said XAI didn't respond to a request for comment.
28:13
Of course, uh the decision to loosen or do away with restrictions meant uh meant to ensure new hires stick around reflects the frenzied competition for top tier technical talent within AI within the AI industry.
28:26
Tech companies typically have a one-year vesting cliff.
28:28
That's what I'm certainly familiar with um for new employees, preventing them from having to give away stock to hires who leave quickly or don't work out.
28:36
But with AI, companies including Meta Platforms, Google, Anthropic, wooing top researchers with pay packages that can be worth $100 million or more, researchers and engineers have been able to hold out for the most attractive terms and in many cases have been quick to leave jobs they have found not to their liking.
28:58
Yeah, I think that this is just like a sort of a red queen's race, just a uh if you give a mouse a cookie sort of situation where >> competitive market employees end up benefiting.
29:08
I also could see it them trying to kind of rehab their employer brand.
29:12
You remember there was a bunch of uh this was probably six, eight months ago at this point.
29:18
OpenAI had a bunch there were there were some articles surrounding >> uh they they had some like really restrictive exit agreements. >> That's right.
29:27
And a lot of people were pretty frustrated.
29:31
>> I feel like that was over a year ago.
29:32
That was >> uh maybe like a year and a half ago.
29:36
About a year and a half ago, uh yeah, that story broke that if you left and did maybe didn't sign a non-disparagement agreement or NDA or something.
29:43
>> If you didn't sign it, they could claw back your equity.
29:45
And then they were saying >> that was important during the whole like Ilia ousting thing. Yes.
29:48
Because a lot of the employees left after that, but then they couldn't talk about it.
29:52
>> Yeah, that's interesting.
29:52
I always thought that uh that like the bull case for that was well if you're going to be whistleblowing on something that's like a true AI doom scenario.
30:01
Well then money doesn't matter.
30:04
So you shouldn't matter about them clawing back your equity.
30:05
But of course there are more like mundane uh reasons why you know you might want to talk about your previous competitor previous previous.
30:15
>> There was another line that some people zoomed in on here.
30:17
Connor Sen over at Bloomberg Opinion says the company expects to spend six billion this year on uh stockbased comp, almost half of its projected revenue.
30:29
>> Um and and and I saw this post going viral in a few different areas, but >> a company that creates however many hundreds of billions of dollars in value in a year and then has six billion of a non-cash expense.
30:44
It doesn't seem that crazy. >> Yeah. No, not at all.
30:47
It seems like like fairly low for I mean it's a $500 billion company, so it's 1% of the market cap that's going out uh to employees.
30:57
And also they they have to be in like an incredible talent war. They're growing.
31:01
There's just so much to do there. Yeah.
31:04
>> Um the the number that that was that was shocking to me was that uh you remember last week how uh there's the the rumored SpaceX IPO that is apparently continuing.
31:13
So SpaceX schedules bank pitches for IPO is in the Wall Street Journal.
31:17
Um but um the the SpaceX IPO if they raise 30 billion will be lower than the 40 billion that OpenAI um offered. >> Yeah.
31:29
>> In this private market >> in the private markets.
31:30
And so there's been this big question about like like are the private markets tapped?
31:32
It appears it's the David Gogggins thesis market.
31:37
It's just there's always >> David Gogins thesis for life.
31:39
I mean, if you if you went back, you know, like I don't know, five years and you were like, "Yeah, like do you think you could raise $40 billion in the private markets or would you have to go public for that?"
31:49
They're like, you know, the Saudi Aramco level of funding like yes, you'd have to be public.
31:52
But turns out you don't have to be public because in fact, um, 40 billion is available in the private markets if you're open AI.
31:59
Uh, let me tell you about numeral compliance handled.
32:02
Numero worries about sales tax and VAT compliance so you can focus on growth.
32:08
Um, let me continue with this.
32:10
Tech investors have privately complained. They're complaining.
32:11
What do they have to complain about? We're in a bull market.
32:15
They privately complained about the ballooning stock-based compensation associated with fast growing AI startups, arguing that it eats into shareholder returns.
32:25
Companies that are needing to be more competitive are dropping the traditional firstear vesting cliff.
32:32
Uh, co-founder of Levels.
32:33
fyi FYI says um in August after Meta chief executive Mark Zuckerberg launched a full-scale raid on OpenAI staff and offered giant pay packages, OpenAI gave some of its top researchers and engineers a one-time bonus with some employees receiving millions of dollars, the journal previously reported.
32:50
Yeah, I was thinking about that with the uh Mark Chen went on Ashley Vance was like I was like I don't I I don't compete with Meta dollar to dollar like I won't match their offers. >> He won't go banan.
33:01
>> He won't go banan for banan.
33:01
But but it doesn't mean that he won't fight back for cliff.
33:04
>> He'll go cliff or cliff for sure.
33:04
Uh and also he'll go like one time bonus during a crazy raid like if it if the if the time calls for it.
33:12
Um so it's not like he's not participating in the war at all.
33:16
Uh he is a little bit but I I I think it's the right I think it's the right move.
33:20
Um yeah I I do think that there's been this uh I don't know is it hydonic treadmill?
33:25
What is the correct metaphor for for what's going on with these offers?
33:28
But it's very clear that like um like you know whoever like the the details of the of the packages are leaking at least through internal like back channels.
33:39
And so the next person that gets hired wants something a little sweeter like something a little bit extra little cherry on top.
33:45
And so you go from, you know, four-year vest, one year cliff to three year, six months to no cliff to, you know, add more zeros on the pay package, more guaranteed, more upfront.
33:59
But at the same time there is something to I mean the reason I would argue in favor of novesting cliffs here is that it does feel like the value that you can get from a new engineer joining from a from a competitor at least is on day one. >> Yeah. >> Like day one. Okay.
34:21
>> You were you just left Anthrop.
34:22
>> We're going to plug your brain.
34:22
We're going to >> you just left OpenAI. You just left Meta. What's going on there? Just take us through it. right?
34:28
Like that's going to be the day one orientation.
34:30
Uh and so are they adding value on day one? Like basically, right? I would imagine.
34:36
So, uh to be capturing a little bit of that value, that seems like a win for the AI researcher.
34:42
At the same time, it is just another sign of the of the froth in the in the AI market.
34:47
>> Finn Bar says, "Okay, but seriously, why is everyone leaving Meta?
34:49
People are speculating in the comments." Jane says, "Vest."
34:54
Finn says, "But if you stay longer, you vest more." True.
34:56
Uh, someone else says no direction for the company.
35:01
Several major unannounced RL project canled.
35:03
The 100 million boys reportedly do zero work because they know that if Zuck fires them, he'll look foolish. I don't know.
35:12
I think I think some of these hundred million dollar uh men and and women just that do they are about that life.
35:21
They do want to pursue greatness.
35:22
They do want to be do the biggest run. Uh, so who who knows?
35:28
I'm sure there's some instances of that.
35:29
Um, Andrew says behind state-of-the-art on their models.
35:32
Of course, that's why Zuck uh, you know, overpaid for talent is to try to catch up.
35:41
>> Uh, no PMF on their consumer AI products, even though they force everyone on Instagram to see it.
35:45
Uh, I think we got to wait a little bit for the Christmas season to come and go and see how see how these things are selling.
35:55
um they don't even use llama models internally to code.
35:57
I mean that makes that makes sense.
36:02
>> It is a tough position to be in because they don't have uh like a like a public cloud they don't have a cloud service even though they are a hyperscaler.
36:08
So like with with with uh with uh with Google like even if they even if Google gets completely smoked by open AI and chatbt and chatbt winds up being like truly like the the you know the the Facebook of of chat apps and it's like 99% people use 90 it captures 99% of like the consumer AI value.
36:30
It's like well like having a Gemini API is still extremely valuable because like you have cloud services.
36:38
cloud services. It it would it would be odd for Meta to wind up like trying to build a CL a public cloud service like around the llama models like I mean even they went even if they went closed closed door >> say at one point though that they would be open to reselling capacity but
36:53
>> yeah but then you're going up against anthropic directly it feels feels very very tricky I don't know um anyway let me tell you about cognition the team behind the AI software engineer Devon crush your backlog with your personal AI engineering team Uh what else is going on? Uh VCs funded
37:08
Uh VCs funded OpenAI and in return OpenAI automated them. This is uh GPT 5.
37:14
2 thinking is able to construct a cap table accurately in spreadsheets.
37:22
This is what Fiji Simo was talking to us about about uh emerging capabilities.
37:26
Seems like they might have RL on some spreadsheets. That's pretty cool.
37:29
Um truly everyone is going after spreadsheets at this point.
37:34
There there's a uh everyone from our sponsor RAMP to Microsoft uh to the to a number of startups that have been on this show talking about Excel agents, Excel plugins, Google Docs plugins.
37:46
>> I'm so interested to see how that market actually shapes out.
37:49
>> Who is >> there's so many AI for Excel Yeah.
37:53
>> plays some full stack, some some plugins. >> Yeah.
37:57
And and it's like it's not that Harvey was pitched as like a Word plugin like even though lawyers do a lot of work in Word.
38:03
That was not the that was not the the instantiation of that product.
38:07
Uh it was it was much more just like you know full full service um product. >> It was interesting.
38:13
Anyway um there's a clip of Sergey making a joke about automating away VC.
38:17
Should we play this video?
38:20
We have the ability to pull this up. Let's do it.
38:23
>> What does he What does he say?
38:28
No audio on our side yet, folks. >> Any luck?
38:36
>> Well, in the meantime, let me tell you about >> Oh, here we go. >> can do that human.
38:39
Majority of jobs in that we know today like more than 50% might be replaced by machines that can do that human judgment piece better.
38:52
Well, we've been working on the venture investment machine learning. No, I'm just kidding.
38:59
>> It's kind of true, actually.
39:00
>> As long as I can buy one, I'm good.
39:03
>> You think you'll do it?
39:06
>> That is kind of what Google Ventures does.
39:07
No, >> they they did they started that way.
39:08
I don't know if they're actually doing that. Like, I don't know.
39:11
They keep hiring partners for whatever reason.
39:12
So, >> this is actually hilarious. >> Where was this? >> Extremely candid. >> This is very funny. Love it.
39:19
Anyway, let me tell you about Adio, the AI native CRM.
39:22
Adio builds, scales, and grows your company to the next level.
39:25
Um, what what is up with this uh this the CIA lost a nuclear device in the Himalayas?
39:34
Did you read this article?
39:34
Apparently, this is not new.
39:37
>> It's not a new story, but there's some new reporting in here. >> Okay. What happened?
39:40
How do you How do you lose a nuclear device in the Himalayas?
39:44
>> I want to go through this.
39:44
My only concern is that it's going to potentially take like an hour to read through.
39:50
>> Let's do it another day then. >> Yeah, we can do it.
39:51
Let's do Let's do it tomorrow.
39:53
>> Let's Let's summarize it and put it Let's put a link to it in our newsletter where you can get tech analysis and news.
39:59
Get our daily op-ed, top headlines, and more. Sign up at tbp. com. Um >> uh Oh, yeah.
40:05
You want to go somewhere else?
40:09
>> Uh >> take us wherever.
40:10
>> I was going to take us to uh Brad Adcock. >> Okay.
40:15
a party over the weekend with Dead Mouse. >> Okay.
40:18
>> Uh and let's play this video.
40:18
So >> I uh he posted earlier today that that figure is looking quite cheap now in comparison to SpaceX, right?
40:27
Because there's a there's a new biggest line on the private markets chart.
40:34
>> Is he drinking on here? What is he drinking?
40:37
>> I think he's having a I think he cracking open some cold ones.
40:39
This is my >> So my theory is that they have done billions of dollars in sales, >> okay?
40:47
>> And this is kind of their way of signaling if you know, you know, because of course it would be absolutely insane to have a party like this if you still hadn't shipped a product if you still were >> kind of a a sort of a >> uh I don't know if they're pre-revenue, but but certainly uh being valued on on Vibe.
41:02
So yeah, there's no way they would throw a party like this.
41:06
>> So SpaceX has 30 30 billion in revenue, right? Yeah.
41:10
>> So, and and it's going out at one uh 1. 5 trillion.
41:13
So, it's at like 50x revenue.
41:16
>> So, to be cheap, >> he probably trading at like what 20x revenue, something like that.
41:23
>> That was my that was my theory at least.
41:26
So, they're at around 40.
41:26
That's they're 40 billion.
41:28
>> They're at around 40 billion.
41:30
>> So, yeah, they could be doing like two or two to four billion in revenue potentially if if it's cheap on a on a dollar per revenue.
41:36
>> I think this is this is very much a >> on a price to sales ratio.
41:37
wink wink moment because seriously um you know no no I don't think any CEO would throw this crazy of a party if you weren't >> uh if you weren't really really printing.
41:49
So expect an announcement soon.
41:52
>> I would I would >> expect an announcement soon >> on uh on the revenue side over at figure. >> Anyway, that's wild.
41:58
Astro compute Prennav, are we getting him on the show?
42:03
Have we t >> Yeah, I think he's coming on tomorrow. >> Okay, fantastic.
42:05
So Prennov uh has has done the math.
42:09
He sat down and did the math on the data centers in space.
42:12
He said he said everyone in their mother has something to say about space compute but no one has comprehensively broken down the physics, energy, cooling, economics and the real work involved.
42:24
So I built a first principles model to show you guys myself.
42:29
Uh Tyler, what was his conclusion?
42:34
>> Um yeah, so I mean you can go through it, you can like change all the different parameters and stuff and then you can run the simulation and then kind of see where it lands.
42:40
Um >> I think the the conclusion was that like there are a lot of scenarios where it does make sense like we we like today uh right now if we use current technology probably not but if you kind of um you know use the trend line where things are going I think it's like pretty reasonable to say that like there's a scenario where it does work. >> Okay. Yeah.
43:00
Um what are you laughing at?
43:04
Fiber Fiberglass is clearly an OG.
43:04
He says that was some OG dry humor rage baiting like from day one TVPN. >> It's true.
43:13
>> We certainly a year ago a year ago that was certainly like 50% of the show's content. >> For sure. For sure.
43:20
Uh >> Fiverr, it's it's great.
43:22
It's great to have you here.
43:24
Thank you for for being a day one.
43:27
>> Uh Andrew Malliff who's building spacecraft over at Varta Space.
43:30
He's going to put data centers on a boat potentially.
43:35
He has a boat project that's very fun.
43:36
Uh he is says data centers in space.
43:40
It might not be economically rational, but it might be physically possible.
43:43
Oh, is he breaking breaking rank from his from the co-founder of his company Varta Delian?
43:50
Uh he says, "I'm trying to bring some quantitative structure to a conversation that's been mostly big number vibes."
43:57
So, we have sort of dueling dueling math equations at this point. Um what is he?
44:02
Uh this is vibe coded from public from so maybe we need to have a debate.
44:05
Maybe we need to have them both on but he says TLDDR the analysis is actually far more favorable than I thought. It's a close thing.
44:13
I desperately want a Carter Chev level civilization but we've got a lot of work ahead of us. Interesting.
44:17
So So he So I mean Delian's been saying like it's impossible.
44:25
It's not gonna happen anytime soon.
44:27
It's not gonna it's not gonna not gonna be a thing.
44:28
Uh but uh Andrew McCall says there just might be a chance.
44:33
Who else is talking about this? >> This post from Goth.
44:34
Goth says, "My dealer, I got some straight gas.
44:36
This train called space data centers.
44:39
You are going to effing fry. Lol. Me." Yeah, whatever. 20 minutes later, dude. WTF.
44:46
We just need to radiate the heat and then we can totally bypass terrestrial regulations, my friend. Pacing.
44:50
I should buy magnet stocks to get ahead of all the rail guns.
44:56
>> What is >> They're smoking space data centers, John. just kidding. This is Yeah. All over the place.
45:02
Uh Theo was happy about the uh the Epic uh thing.
45:04
Props to Epic for seeing it through to the end.
45:08
This is an incredible win for developers. Uh quoting Kim Sweeney.
45:13
>> The Easy in the chat says, "Data centers in a volcano."
45:15
That >> that might speak of that.
45:20
>> Nobody's talking about that.
45:21
>> That does seem like free energy.
45:23
>> Isn't that just like geothermal?
45:23
I feel like that's like I know but that that doesn't seems like that doesn't spack.
45:29
Yeah, that's terrible vibes.
45:30
>> Data center in a volcano spacks immediately >> for sure.
45:33
Well, let me tell you about privy.
45:35
Privy makes it easy to build on crypto rails securely spin up white label wallets, sign transactions, and integrate onchain infrastructure all through one simple API.
45:42
Uh, Enthropic has ordered $21 billion worth of TPUs to train uh to train large claw.
45:49
Is that really what they're calling it?
45:52
Texas from yesterday's Broadcom's earnings call.
45:55
The scale at which we see this happening could be significant.
45:57
As you are aware, last quarter Q3, we received a10 billion order to sell the latest TPU Ironwood racks to Anthropic.
46:04
This was our fourth custom that we mentioned.
46:07
In this quarter, we received an additional 11 billion order from the same customer for delivery in late 2026.
46:13
But that does not mean our other two.
46:16
Uh, Kaiju fights are the best kind of fights from from October.
46:20
This is from Andrew Curran.
46:20
He says is in discussions with Alphabets, Google um about a deal that would provide the artificial intelligence company with additional computing power valued in the high tens of billions of dollars according to people familiar with the matter.
46:33
Uh the plan which has not been finalized involves Google providing cloud computing services to Anthropic.
46:39
According to people familiar with the matter who asked not to be named Google is a previous investor and cloud provider for Anthropic.
46:46
>> Uh large claude was just me having fun with words and is not anything official.
46:51
I also considered fat claude.
46:51
I'm saving colossal claude and gargantuan claude for 202 fast claude.
46:57
>> Uh in other news, just need to large claw thing.
47:01
>> Furmy, which is the uh energy company that went public at a 20 billion valuation, uh they >> they talked about uh getting uh getting their kind of facilities online, I think in the 2030s, and people were a little bit bearish about that.
47:17
they've they've traded down uh almost 75% uh since their IPO.
47:23
Um so it seems like yeah we we've basically seen this kind of rolling correction across every single AI pure play.
47:34
>> You could even say that >> but nobody's done volcano data centers.
47:37
>> No one has done those.
47:38
>> Where are you going to where the chat's asking where do you put the heat?
47:39
Just shoot it up into the air. That's what >> Yeah.
47:44
The volcano data centers is funny because immediately they're like, "But don't you want the chips to be cold?
47:47
You want the you need cooling, not heated." >> Yeah.
47:52
The heat dissipates with the lava.
47:54
>> It would be great to just hard light, but the heat's free. He's heat's free. Data centers are hot.
47:57
And in this one, we're getting the heat for free. No.
47:58
Um, what happens after a correction? >> You're corrected.
48:04
I I I think we're corrected.
48:06
I think it's possible that the market is correct. It's perfectly valued.
48:10
>> I saw somebody saying that uh the the BG2 interview with Sam may they they were claiming like it's very possibly helped us avoid a 200201 style scenario.
48:23
>> It could Yeah, things could have gotten a lot crazier.
48:26
>> So maybe that was Brad's play the whole time.
48:27
He was like, "Hey, we just need a little reset. >> He's a hero. He's a hero.
48:31
>> I'm going to look like I'm going to look like I might, you know, I'm going to look like a maybe a bad guy for two weeks, but now he looks like a hero."
48:38
>> I mean I even even in the moment he didn't look like a bad guy. No, no. He asked the question.
48:42
If he didn't ask that question, >> Yeah.
48:45
>> he would have been it would have it would have there would have been I think some rightful criticism. It was important.
48:50
>> Everyone was wondering.
48:51
>> It was an important question to ask. >> Yeah.
48:52
Um what uh I really I really like Young Macro.
48:58
This guy's a great poster.
49:00
Uh Nick Lan proclaims, "May coldness be my god."
49:02
What normies think he means.
49:06
You know, technoacelerationism, techno capitalism.
49:08
Uh, I like that the circular AI deals made it in here as well. Just the stock charts.
49:15
>> He really means he means Christmas. He means Coca-Cola.
49:18
He means a nice wintry retreat. Yes, exactly. Play some music.
49:24
This is this is what may coldness be my god means.
49:26
It means cozy up by the fire and get festive. I love it.
49:32
>> Did you see this reporting on Jim Carrey and Grinch? No.
49:35
Jim Perry offered to return his $20 million Grinch salary and was going to quit the movie amid panic attacks over the makeup.
49:43
>> Then a guy who trained the military on enduring torture was hired to help him.
49:49
>> Richard Marino was a gentleman that trained CIA officers and special ops people how to endure torture. Carrie told the vulture.
49:55
He gave me a litany of things that I could go that I could do when I began to spiral, like punch myself in the leg as hard as I can.
50:00
Have a friend that I trust and punch him in the arm. Eat everything in sight.
50:07
>> Changing patterns in the room.
50:09
>> If there's a TV on when you start to spiral, turn it off and turn the radio on.
50:12
Smoke cigarettes as much as possible.
50:14
There are pictures of me as the Grinch sitting in a director's chair with a long cigarette holder.
50:18
I had to have the holder because the yak hair would catch on fire if I got too close.
50:24
Later on, I found out that gentleman had trained me to endure the Grinch. Also found it team.
50:30
>> So the only my only kind of question here is I feel like all these things if you were being tortured, they wouldn't exactly be like, "Well, let him turn the TV off and on again.
50:37
Let him turn the radio on." >> Interesting.
50:42
>> So I think I think these are probably great things to do if you're not getting tortured and you're just developing an anxiety attack.
50:48
Yeah, >> I did I did resonate with this because when we had the the Halloween makeup >> Well, I mean to be fair, it could be it could be like like metaphorically being tortured like in a foxhole as a member of Seal Team Six.
50:59
Like if you have like, you know, oh, you're you're you're staking out some place and you're in a pit and it's a hole and you're not actually being directly tortured by like an enemy, but you have to deal with a really hard situation.
51:12
And so you sit there chain smoking and I don't know why you have a TV in this scenario.
51:16
Again, I didn't land I didn't land on that one, but >> yeah, this just resonated because when we had when we were three hours into our Halloween episode and I started to realize for me, >> I was like, I am fully it felt like very suffocating having, you know, >> I was fine with it >> two centimeters surrounding everywhere and >> yeah, >> it was it was a very weird feeling.
51:39
>> I think I mean he was doing like nine hours a day of makeup.
51:42
>> Can we get the Can we get the Can we get the giga chat filter on Tyler?
51:43
That makes us look like, you know, wimps compared to him.
51:47
We were only doing three hours of makeup.
51:49
Uh, nine hours is really, really heroic. Wow. Well, totally worth it.
51:54
If you aren't watching The Grinch this Christmas, go watch something that's being rereamed. Reream.
52:01
One live stream, 30 plus destinations.
52:03
If you want to multiream, go to reream. com. >> Merry Christmas.
52:07
>> Will Brown says, "Chacht is the only consumer app with regular popups asking if I want to downgrade my subscription."
52:13
This was hilarious to 3,000 likes.
52:13
Um I mean it's it's a testament to the >> they're running this as a test.
52:20
They're like we tell people they can pay less and they don't.
52:24
They enjoy giving us money.
52:26
>> Hey, maybe maybe maybe the pro plan results in more permanent churn.
52:29
And so this is actually LTV.
52:31
A downgrade is actually LTV positive.
52:37
No way to prove that that's true, but it would be very funny if that was the case.
52:40
Um, no, the the the polish around the product is potentially like the way you win consumer.
52:47
I I really think we're in the era of like of productization more than the latest model.
52:56
>> The product the product managers are the heroes now.
52:57
I want to see a product manager getting a four-year $1 billion package.
53:02
>> It's not it's not completely over for the AI researchers.
53:04
Like the models are important.
53:06
important. they do get better and and there's functionality under the hood that's that's researchdriven that's valuable but uh you know if you if you believe in the Ilia we're in the age of research then what is the AI researcher doing like they are doing experiments
53:23
that for that you have no idea the timeline like you're not just doing engineering you can't just put one foot in front of the other and get easy wins it's actually going and doing science and discovering new new ideas, new ways to create new capabilities. And so um in
53:37
And so um in the age of research, the researchers should be off doing research and the user experience designers are the heroes basically.
53:47
I mean the product managers are are going to be more important as the uh as the apps fight for market share. What do you think Tyler? You agree with that?
53:57
>> Yeah, that makes sense.
53:57
It's fun to think about like uh Elon and Ilia are like perfectly counterpositioned, right?
54:02
Like Elon is like we don't have any researchers. They're all engineers.
54:05
they're going to make small improvements.
54:06
And then you see like what is Grock like Grock is like >> it's largely undifferiated from all the other LMS.
54:12
They don't have like a like uh Anthropic has code. >> Yep.
54:16
>> OpenAI has like the actual consumer.
54:18
Grock is like still kind of undetermined.
54:20
>> I would Yeah, I wouldn't say that they're counterposition.
54:21
They're actually they actually agree like they're they're they're consistent.
54:24
I think they are opposites but they they both embrace the fundamental uh a fundamental reality about the world which is that uh like you should either be doing pure research or pure pure engineering and it's and it's sort of hard to mix the two or or just that like research won't immediately have trans won't translate to faster times on the racetrack which is like what's happening right now in the in the race. >> Yeah.
54:48
I mean Elon is like very AGI pled, right?
54:50
But he still doesn't think about like doing >> pursuing AGI as like a research thing. >> Oh, interesting. Okay. Okay. Yeah.
54:56
Maybe they are a little bit more different than I than I considered. Um I don't know.
55:01
I mean, how do how do you interpret the fact that the the ARGI scores are going through the roof and yet qualitatively like people are not shocked by the interaction of talking to 5.
55:14
2 too or the latest Claude 45 or >> I think it's just like it's just about like the spikiness thing where like uh >> they just created a new spike.
55:24
>> It I mean the spike just got longer, right?
55:26
It's like the clo the the coding ability of the model I'm sure is much better. Yeah.
55:30
>> But the actual like ability to write pros is not that much better because it's just like not what they're pursuing. Sure. >> But it is bullish.
55:35
Like I this has been my take for a while where like if they can even if it's just benchmaxing on >> if you can create a spike in any direction you can solve sort of any economic problem. >> Yeah.
55:46
Then the real problem >> just create every possible spike and eventually it no longer looks like spiky intelligence. It looks like smooth. >> Yeah.
55:54
Like the engineering task is is to find the RL environment that makes the model better at writing which is like what they're doing.
55:58
Like you see all these RL environment startups that basically just make these things that models that that labs train on.
56:02
that specifically do things.
56:05
Uh, >> suspended cap says, "OpenAI could probably send save 25% on their compute if they just taught the model to give me the answer and then shut the f up a bit." >> Wild.
56:16
Uh, >> this one resonated.
56:18
Think bigger, build faster.
56:20
Figma helps design and development teams build great products together. >> Get started. Figma. com, of course.
56:27
>> Uh, Jason Freed has a note here.
56:27
He says, "One of the best upgrades to chatbt is simply changing the base style and tone to efficient and giving it a simple get right to the point.
56:35
Be practical above all instruction.
56:36
No more praise, no more flourishes, just the answers."
56:42
>> Everyone appreciates Tyler Jolly Maxing.
56:45
He really is in the Christmas spirit. It's fantastic.
56:47
Um, hey, are you a minor?
56:51
No, I'm here to sell shovels.
56:53
Everyone's sho Everyone's selling shovels.
56:54
20,000 likes on this just for different shovels.
57:01
>> Some people are mining, some people are mining, some people are in the trenches, but uh yeah, this is it is it is just a few people that are that are not selling.
57:10
>> Big change from a year ago when everyone was just talking about how rappers were were cooked and people were talking somewhat negatively about rappers.
57:19
>> Yeah, it's interesting.
57:19
are are rappers selling shovels during No, >> no, they're they're mining.
57:25
>> It's actually mining in like a very small side mine.
57:27
Not the main mine, but like a smaller side mine, I guess. What do you think?
57:32
>> I would think of of mining as being like um if you are are actually like using the models to do like a rollup or something.
57:40
>> Um I think that's more much more than using the models.
57:42
In the AI shovels mining analogy, the mining I feel like it's like it's Elon and it's Sam and Demis that are doing the mining, right?
57:53
They're doing the core thing and then everyone else is like is like I'm I'm drafting off of them.
57:57
I'm supporting them with shovels that like there there's a gold mine that's being mined and and if I'm just like riding the coattails of that then I'm coming along.
58:07
I think the of of the gold as being the output um that you can get with the models when you use the models.
58:12
The models are the shovels.
58:15
>> The models are the shovels. >> Yeah.
58:17
>> Yeah. So then so then >> that is that is actually funny >> like if you're if you're doing a rollup of of um some you know yeah whatever companies and you're using AI to just you're not like it's not an AI company but you're using AI a lot to
58:28
>> typically typically the way typically the way the whole shovels analogy is levied at startups is oh you don't have it in you to create a great mobile app so you're going to build a developer tool that helps people ship mobile apps. That was the original like the shovels
58:46
That was the original like the shovels critique.
58:48
Uh and it's the same thing with AI is the idea of like like why don't you solve a cool problem with AI actually create some sort of like you know system that solves a particular problem versus saying like we're a platform for running AI agents on top of it like we don't know what the agents will do but we know that they need you know a database or something like that.
59:10
uh that that critique has never been it's never hit that hard with me because like they're they're both valuable. We need all of that. >> Yeah.
59:17
That being said though, YC I think it was a spring YC batch.
59:19
There was a lot of people selling shovels.
59:22
Not a lot of like very specific I am I'm creating a full stack solution for end customers.
59:29
It was I'm creating >> AI agents to help you manage your AI agent infrastructure company.
59:34
And it was like, well, what about I think we need more actual endstate agent companies that are selling to everyday consumers.
59:43
>> Everyone talks about selling shovels during a gold rush.
59:44
No one talks about selling just the wood shaft that goes into the shovel.
59:49
I don't even sell the shovel.
59:51
I'm a particular slice of the supply chain in the sho in the shovel supply chain.
59:56
I'm so deep in the shovel supply chain, I sell the screwdriver that makes the screws that go that assemble the shovel. That's my business.
1:00:06
I'm seven layers of abstraction away from the gold.
1:00:08
>> I sell the shovel making machine.
1:00:10
>> Yes, the shovel making machine.
1:00:10
That's where you want to be. >> Rappers.
1:00:13
I wonder I wonder uh I wonder if anybody's building uh a rapper company to help people wrap presents.
1:00:21
I'm assuming that all the different LLMs can do this pretty well.
1:00:23
You take a picture of an item.
1:00:24
They they can, you know, >> but they do that.
1:00:27
That's sort of like your your Rubik's cube benchmark because it it requires shape rotation which the models have been notoriously bad at.
1:00:34
I wonder can they actually give you instructions on an arbitrary size present the best way to wrap the present?
1:00:42
You should be an >> Well, speaking of holiday gifts, we did a snap we did a snap demo today. I was wearing the specs.
1:00:46
We're proud to have Evan on and I asked my specs.
1:00:48
I said, "Can you count the presents under the Christmas tree?" And nailed it. >> Yes. Fantastic.
1:00:55
>> These are the important problems.
1:00:55
Uh, I think it's about time.
1:00:58
>> Yes, let's bring in Evan uh from Snapchat.
1:01:00
Uh, welcome to the stream.
1:01:02
We're going to walk him in.
1:01:02
Let me tell you about Fall, a general media platform for developers.
1:01:06
Develop and fine-tune models of serless GPUs and on demand clusters.
1:01:10
Great to >> go for the treat. >> Thank you.
1:01:18
>> Great to have you in this.
1:01:20
>> Uh, please have a seat. >> Scoot it up. Look at this. >> You look fantastic.
1:01:23
It's uh my wife told me to to wear a suit.
1:01:26
Like it's part of the >> It is. It is.
1:01:28
Uh you know, we put on these suits uh sort of as a joke.
1:01:30
It was it was sort of a I mean, you're you're you're one of the you're one of the many tech people who maybe popularized the t-shirt.
1:01:39
And I wore the t-shirt for my entire career in technology.
1:01:41
And we were like, we want to stand out.
1:01:43
Everyone else in tech podcasting wears the t-shirt.
1:01:46
Everyone wears the t-shirt.
1:01:48
Whether you're CEO of a public company or a podcaster, you wear a t-shirt.
1:01:52
We're like, how do we stand out? Let's do the opposite. Let's wear the suit.
1:01:55
>> It's like instant credibility, too.
1:01:57
>> Well, the funny So, the funny thing when when some of our uh videos end up going viral in parts of the internet that that aren't kind of familiar with what we're doing, there'll be comments of people like, "Look at these guys in suits. They don't know why.
1:02:07
How are they talking about software?
1:02:08
They don't know anything about tech.
1:02:10
It's like not getting the bit."
1:02:14
>> Uh, anyway, super super excited to have you on today.
1:02:16
There's a so much so much to talk about.
1:02:18
Um, and I don't even necessarily know where we should start.
1:02:22
I mean, I'd love to start with a demo that we got just an hour or two ago. Spaxs.
1:02:27
Um, how are you thinking about hardware these days?
1:02:29
What's the state of the organization?
1:02:30
How much of your time are you spending on it?
1:02:33
Because you have a monster business to manage. You have earnings calls.
1:02:38
There's so much going on.
1:02:39
How do you how are you splitting your time?
1:02:41
What does that team look like?
1:02:43
What are your ambitions for hardware these days?
1:02:46
>> Yeah, I mean, it's a really exciting moment for Snap because in 2026, we're releasing the first consumer version. That's right. uh of our glasses.
1:02:52
Obviously back, you know, maybe now more than 10 years ago, we released camera glasses, you know, and we kind of stepped our way into building out.
1:02:58
>> What was the actual first release of that public release?
1:03:02
>> Was it probably 2016 broadly to the public >> spectacles?
1:03:05
Weren't they weren't they yellow?
1:03:08
>> Uh the original they had a little yellow accent flag the camera back in the day people were, you know, and I think this is still a concern.
1:03:13
People were very, you know, worried about privacy.
1:03:15
So big, you know, yellow ring around the camera and a light to let people know a bunch of really cool uh like little touches.
1:03:23
Like I I remember the ability to to film.
1:03:26
It was basically a square sensor so you could film horizontal or vertical.
1:03:30
Um and and just those little touches.
1:03:32
I'm wondering like do you think those like small little wins are what help us break through to, you know, a world where everyone's daily driving some sort of augmented reality device?
1:03:46
Is it a game of of inches on the product feature side or is it just like more deeper in the supply chain?
1:03:51
Once they're 50 bucks, everyone's going to be doing it.
1:03:55
What do you what do what's critical path to getting to phone level prevalence in face wearables?
1:04:04
>> Yeah, I I think they're going to have to be major breakthroughs in terms of the utility people get out of the the product.
1:04:09
I I think the biggest challenge, and we learned this very early on with camera glasses, it's just not that much better than taking a photo with your phone, right?
1:04:14
Maybe you're rock climbing, you're on a jet ski, okay, you want to, you know, make a video handsree.
1:04:18
I I think that's a totally reasonable use case, but that's not an everyday all the time use case.
1:04:24
And so a lot of what we did, taking those early learnings, we sort of proved out people were willing to wear a camera.
1:04:30
They were willing to wear, you know, glasses that had a computer inside, but then we just shifted our focus entirely to the platform and to driving more utility.
1:04:35
So I think you know the the latest version we put out in 2024 that you got to try uh for developers which is very focused on all those platform components uh so that developers could build all sorts of amazing now developers built hundreds of these lenses.
1:04:48
You probably got to try a couple of them.
1:04:50
Um and so I think it's really about driving utility. >> Yeah.
1:04:53
Yeah, that makes a lot of sense.
1:04:54
Uh uh it's it's it's always frustrating when you're in a you know technology you're in like a technological platform shift and I've seen this with with uh with virtual reality where it's like so amazing and then the demo is like well it's really good on a plane and you're like but I'm just not on the plane that much.
1:05:13
It's sort of the same thing where like if the demo is >> it's really good if you're watching a movie alone. >> Ex Yeah. Exactly.
1:05:17
And it's like well actually I I I want to watch a movie with people and so the theater does work or the TV works.
1:05:21
or the TV works. Um, I'm wondering about um how much AI is an accelerant in delivering value in the wearables context because I imagine it's useful for developers to you know write software faster now but also are you are do you think that that's going to be like a a relevant precursor to you know mass adoption is the AI >> like I'll give you an example so like the live translation functionality and and what's very cool about specs is like
1:05:53
having having the the basically the the heads up display like centered so I can be talking to you and and be getting like live translation which to me is like the kind of thing that feels very sci-fi and to be able to get it in a
1:06:07
demo today that feels like the kind of thing that uh AI is is a is a real accelerant for and you can imagine being in a situation where >> you actually have multiple effectively like subtitling happening all the time. M um but maybe on that note I guess uh
1:06:19
M um but maybe on that note I guess uh from from my understanding you guys are not saying we're going to build the hardware platform and we're going to build a foundation model lab and maybe if you could talk more about that because I think that's obviously quite a bit different than some other hardware players.
1:06:38
Yeah, so far we just haven't seen a need to to build foundational models outside of the sort of image and video and 3D areas where we think we can really differentiate um and where there aren't as you know as compelling open- source solutions.
1:06:51
So uh and we also are very focused on being able to offer our experiences to our entire community.
1:06:56
So nearly a billion people around the world.
1:06:59
If you do that >> with back-end inference, it's just too expensive to be able to offer it.
1:07:02
A lot of our innovation starting several years ago was to be able to run models on device or with a hybrid solution where we can do some on the back end, some on the device.
1:07:10
Uh, and so that's really where our foundational work has happened.
1:07:14
I think, you know, as you look at the glasses near-term, I wouldn't expect AI to be a major accelerant because again, I don't think it's meaningfully better than your phone, right?
1:07:22
And I think that's really the the bar that we have to clear.
1:07:24
These experiences have to be 10 times better than what's possible on your phone.
1:07:26
And and I do think over the long term though, AI will be very very meaningful.
1:07:32
and >> less because of the you know sort of chatbot style use cases today but more in terms of the way that like we change how we use computers.
1:07:38
So if you think about today we're spending what on average seven hours a day in front of screens >> we're spending a huge amount of time operating computers to get work done.
1:07:45
So like physically getting the work done ourselves and I think >> what AI enables is a change in the way we relate to computers where we're going to spend less time operating computers and more time supervising AI.
1:07:56
And in that transition, the glasses form factor I think is going to be really compelling because it it essentially gets you away from this operational paradigm into the supervisory. >> Yeah.
1:08:07
>> Yeah. or another I I mean potentially more near-term example is like you're working on your car and you have this like AI assistant running permanently and so you have full ability to use your hands and make changes and it's kind of reasoning on the fly with you in a way
1:08:22
that you know everyone's experienced like you know watching a YouTube video and like pausing it and trying to do something and then you know playing it again and and I feel like I feel like there are some very near-term >> how is that shift uh like manifesting itself in your daily life as CEO. Like
1:08:35
Like I've found that since the dawn of chatt there's been this like urge for folks to like send chatt written stuff to me and I've always said like just send me the prompt and I can kind of rework it in my brain.
1:08:50
Like just send me the bullet points.
1:08:52
I don't need to turn it into a paragraph.
1:08:53
But I'm wondering if uh if you can give me some uh color on how you're seeing like AI change your your workflow or the folks that you work with on a daily basis.
1:09:04
>> I think it's a really great thought partner.
1:09:05
Like I love to test ideas or try ideas or like I love to run simulated focus groups with AI which is really fun like what do you think different types of people will say or respond to you know in terms of like a product or idea that we're working on.
1:09:17
So I I love it as a as a you know of course for all the visual and you know the visual stuff video generation I can test out ideas really really quickly.
1:09:24
I >> I haven't actually found it yet to be particularly creative but as a creative thought partner it's it's fantastic. >> Yeah. Yeah.
1:09:32
How do you think about the the instantiation of AI features within the core Snap product?
1:09:37
It feels like there's an immense amount of energy all over AI with like super intelligent.
1:09:45
It's going to do everything.
1:09:45
It's going to make the full video.
1:09:46
It's going to make the video and the audio.
1:09:48
And then when I see it's like, yeah, you get like one or two viral videos out of one of those generators.
1:09:53
But, uh, the much cooler thing is, uh, I think when there's, uh, AI riding alongside the rest of the creative suite.
1:10:00
Um, how are you thinking about um, setting up creators for unique experiences that are like AI enabled, but there's still a lot of that creativity that's coming from them?
1:10:11
>> Yeah, I mean, I think AI has been a core of the Snapchat experience for such a long time, but we've never described it as that, right?
1:10:16
>> Like the original like actual like location mapping, the AR stuff >> and even all the transformations that are happening in our camera, right?
1:10:21
A lot of the real time ondevice uh, you know, generative transformations and these sorts of things, people just laugh and have fun with their friends doing it.
1:10:29
They're not thinking like, "Oh, this is some, you know, AI." >> Yeah. Yeah. AI.
1:10:33
>> I mean, when face tracking has been in there for so long, and that's always been AI, I'm sure. >> Yeah.
1:10:38
And I think there there is a lot of opportunity to, you know, rethink uh the way that people build lenses.
1:10:42
So, that's been really really powerful.
1:10:44
You know, in the past, uh, you know, developer, it would take a really, really long time.
1:10:49
You had to build the 3D assets yourself.
1:10:50
I think there's a huge democratization that's happening right now because anyone, you know, we have a tool called easy lens.
1:10:55
You can with a prompt build all sorts of amazing experiences in AR. >> Yeah.
1:11:01
What what is the like the economic flywheel there?
1:11:03
How do how do you think about allowing folks to monetize that, build businesses like come uh like what is your current uh mental model for the for the economy that's occurring on the platform?
1:11:15
>> Well, one of the things we've thought a lot about is that there are a ton of models that are being created, but very few people actually have customers.
1:11:23
>> We have a ton of customers.
1:11:23
And so what we've done is created a service called Lens Plus.
1:11:27
So if you're a developer, you can publish your lens to Lens Plus.
1:11:29
That means it's behind our payw wall.
1:11:31
People get free generations.
1:11:33
They can use some lenses for free for a certain amount of time and then they convert to paying customers and we revenue share with those developers.
1:11:39
So I think interestingly Snapchat's become a bit of a a front door, right, for folks who want to deploy their models or deploy a specific lens or, you know, sometimes people are even building more advanced game experiences inside of Snapchat.
1:11:49
And with Lens Plus, they get all that monetization for free essentially.
1:11:53
We do that that one for them. >> Yeah.
1:11:56
How do how do you uh process like the whole the like the metaverse boom and you know bust and maybe it's going to boom again.
1:12:02
Um just this idea of like uh just adding more and more functionality until you're effectively in like a game world unlimited uh content.
1:12:11
Um do do you think that uh like is that is the primary driver of giving people the ability to make games just better AI tools?
1:12:22
Are there other things that you are are are actually thinking about integrating there or um or do you think that uh like like the just partnering with all the models will eventually give people the ability to build whole game experiences?
1:12:37
>> Well, it's the reason why we love games actually the same reasons why we hate VR, right?
1:12:41
Which is games actually bring people together in really interesting ways and we see that on Snapchat all the time, right?
1:12:46
It can be a conversation starter or a way for, you know, a way for two friends.
1:12:49
You know, I play putt putt with my wife on Snapchat, right?
1:12:52
and we just send them back and forth. It's fun, right? It's a way to connect.
1:12:55
And so I I think for us, games on Snapchat are really about, you know, that that like spark of connection between people.
1:12:59
Uh we we've invested zero dollars into VR, right?
1:13:02
Because we essentially take think that it takes people out of the real world and away from the the places, the people, you know, everything that they they love.
1:13:11
And so our view is that VR has a very very limited uh and low future because people love the real world.
1:13:17
And so our bet, you know, for the last 11 years has been exclusively on augmented reality on, you know, and trying to enhance the human experience rather than replace it with VR. >> Yeah.
1:13:27
Is there any is there anywhere where where you think VR does make sense?
1:13:32
Like are are there specific like B2B use cases or like some sort of like I don't know like maybe enterprise is where all the stuff like goes to die.
1:13:40
Um, but I I'm wondering if there's any if there's any place >> I guess the question is like that I think people assume that VR eventually will >> be good enough that a huge swath of the planet will be engaging in it a lot like at least that at least like that that my my personal theory and and maybe you believe differently.
1:13:57
It sounds like you're even okay with a scenario where even if it does work you're like other people can kind of play in that and we're happy to kind of exist in this hybrid world.
1:14:08
Yeah, just philosophically like that's not a world that we want to support in any way uh shape or form.
1:14:12
You know, I think what's really important is actually trying to create products that foster that human connection, right?
1:14:18
And in doing so in person, I think we're in a moment where people are really valuing that, right?
1:14:23
And they want more of that and they're thinking about how to get get more of that.
1:14:26
And I think AR is coming about at at a really important time when people are saying, "Actually, I'm spending a lot of time in front of a screen.
1:14:32
I'd like to spend more time together with my friends.
1:14:33
I'd love to do that in a way that's more fun or entertaining."
1:14:36
our kids even, you know, our kids are >> at least uh three of them are still pretty little, but like when I see them playing around with those specs, even though they're clunky and heavy or whatever, they're outside running around playing together and you're like, that's a different vision for computing. >> Yeah.
1:14:50
You mean you should you should have seen us see us doing the demo this morning.
1:14:53
I was running last drawing.
1:14:53
I was playing this this drawing game that you guys have where I was drawing uh and and the ability to have this like shared space and have uh like permanence in the kind of uh in the in the different like visuals that you're creating on on a scene was uh is just really cool.
1:15:11
>> Do do you think uh AR specifically means pass through or can or if I'm doing reprojection, I have cameras on the outside of a VR headset and I'm reproing that and it's indistinguishable for the user.
1:15:23
Uh does that count in your mind?
1:15:26
Is it a meaningful distinction?
1:15:27
>> Uh it in our mind it doesn't count.
1:15:27
So you're describing pass through on on VR where you know you you the cameras in very high fidelity.
1:15:34
>> There was this quote from Palmer Lucky where he was saying like why would you ever you know try and like recycle photons just create new photons take a video of the outside world repro it inside.
1:15:43
And the benefit of that is that if you're in a very bright world or you're in a bright space, you can dim that and and put something brighter on top of it.
1:15:54
And there's certain uh like the additive nature of physics around light make it so that there it does seem like there's limitations to pass through augmented reality even though the latency is zero and it's the real world and there is something that's better.
1:16:07
I just know that you might be grappling with it.
1:16:11
>> Yeah, we we've definitely seen some real challenges there.
1:16:13
So the the big difference obviously is between pass through and then see through see-through glasses that that we're working on.
1:16:17
You know I think Snapchat's actually a really good example of pass through. So it's a screen, right?
1:16:21
And we we do have I think the best pass through AR technology in the world, right?
1:16:25
So we are able to realtime render out those experiences through the phone.
1:16:28
I think the question is do people really want to wear a screen on their face in front of their eyes?
1:16:33
And then you know if you think about the compute that's necessary to repro the world, right?
1:16:37
and the power required to uh you know power all of those pixels, right?
1:16:44
>> And it has to be like real time.
1:16:44
It's got to be real time.
1:16:47
>> You can't have like a half second of lag otherwise you're just stumbling around. >> Exactly.
1:16:51
So So when you put that all together, you're just stuck in headset lane.
1:16:53
And I think it's just very clear that like people don't want to wear giant headsets all day long.
1:16:56
I think that's that's >> Yeah.
1:16:59
in terms of uh stuff that they do want to wear.
1:17:01
Obviously, like everyone wants something light, but uh in a world where field of view is somewhat restricted in the short term, I'm sure it'll get better, wider and wider.
1:17:10
Uh what's the trade-off between center of field center view versus like Call of Duty mini map like locked in the corner?
1:17:21
>> Well, I think what's really important is that you're actually able to control where objects are showing up in the world around you.
1:17:26
So, the big problem with the sort of heads-up display style products, I mean, I I don't love that if you're looking at the screen, you're looking at somebody's crotch, too. Doesn't make any sense.
1:17:34
Um, you know, but but the exciting thing about specs and as it sounds like you saw earlier today, is you can decide where where to place things in the world, where you want to draw.
1:17:42
And I think that that's a a very big difference from these heads-up display products. >> That makes sense.
1:17:47
How do you think about um uh like when the iPhone came out, there was there's sort of I mean, it was a little bit expensive.
1:17:54
We were talking about this 700 bucks.
1:17:55
Uh you could compare it to the price of a phone.
1:17:58
You could compare it to the price of an iPod.
1:18:01
You could they Steve Jobs called it internet communicator, right?
1:18:03
So you kind of bundle these few different products together.
1:18:07
You're like, well, I'm getting $700 worth of value or later $400 worth of value.
1:18:11
Uh do you think that there's a there's an important sort of anchoring point for for augmented reality glasses where c consumers need to underwrite it against an external monitor for their computer or or a TV at home?
1:18:27
Is there some sort of like economic tradeoff point where, hey, I'm going to college and instead of getting a 42-in TV and a and an external uh, you know, Mac uh, you know, Apple display for my MacBook that I'm going to plug in, I'm just going to go with augmented reality glasses because it just makes more sense economically.
1:18:46
Is that an important point?
1:18:50
>> I think that's one way to think about it. Um, for sure.
1:18:52
And you know, the iPhone when you add in the the carrier subscription was way more than that.
1:18:55
So I think, you know, they were able to sort of have a $700 sticker price, but then at you know, I think some of the initial plans were like $50 a month and that kind of thing.
1:19:04
Two or three years, I'm not sure.
1:19:05
Uh you know, that's that's a that was a really meaningful outlay for that for that product.
1:19:09
I I to me I think, you know, the iPhone is maybe not the best uh reference point here.
1:19:14
I I think this feels to me a lot more like the Macintosh or like early computers with the smartphone.
1:19:20
you know, Steve essentially said, "Hey, everyone else is doing the phone wrong, right?
1:19:24
You had a Blackberry already or you had a flip phone or this kind of thing."
1:19:27
And Steve was like, "Hey, y'all are doing it wrong.
1:19:30
This is like what a phone should look like."
1:19:31
And >> I think glasses are a little bit different.
1:19:35
Um because, you know, we we have some similarities in the sense that like on one hand you have these VR headsets, right, that are very capable but that are essentially unwarable.
1:19:42
And then you have the, you know, really lightweight glasses that are very wearable but do nothing.
1:19:47
And you know, our vision with specs is to have a very lightweight uh pair of glasses that's incredibly capable, right?
1:19:52
So VR sort of, you know, level of immersion and and capability, but but in a see-through lightweight pair of glasses.
1:19:59
So I I think this is a little bit more of a Macintosh style moment where it's it's a new way to look at computing rather than, you know, a a better version of something people are already familiar with.
1:20:10
And that's a bigger challenge. Totally.
1:20:12
Um, so I do think to to your point, you know, anchoring to, you know, hey, a a giant flat screen display costs 2500 cost $2,500 or a laptop costs, you know, 1,500 bucks or whatever it is is an interesting way to think about it, but I think actually describing the utility of the product will be the biggest challenge. >> Interesting.
1:20:29
Uh >> yeah, there's some there's something to be said for if you just create a product that is incredibly fun and entertaining.
1:20:36
Like people consumers will find like they're not saying like, "Oh, I'm not going to get the the laptop anymore because I can type on this thing."
1:20:43
It's like I'm going to I have a device that is >> creating value in my life purely through fun and function and it's doesn't need to like replace anything.
1:20:55
>> Who do you think the the earliest adopters will be?
1:20:57
Do you think young people will drive the ultimate breakthrough adoption of augmented reality?
1:21:04
>> I think the earliest adopters will be our developer community.
1:21:06
So we already have hundreds of thou hundreds of thousands of developers who are building you know lenses for uh for our platform.
1:21:13
There are already tons of developers using specs today building all these sorts of building all these sorts of experiences.
1:21:18
And so our strategy is actually to start with that core of folks who are super passionate about this product.
1:21:22
And I think, you know, they'll be able to tell stories about all the amazing things that they're building, which can then help us, you know, transition to more like mass market style adoption.
1:21:31
So, when a developer is building a lens, you can, you know, pop these on and stargaze or hey, you can pop these on and, you know, play lawn games with your kids, uh, you know, or hey, pop them on and and watch, you know, streaming streaming video on a giant screen while you're playing or whatever you want to do without having to shut out the world.
1:21:47
I think those sorts of stories are really important.
1:21:49
Yeah, I feel like Snap has been able to be remarkably resilient with young people in a way that a lot of other platforms, they just kind of like they get their initial bucket of users, then they grow at them forever, and then they're monetizing when they get older.
1:22:03
Uh, is that do you think that there's some sort of benefit of having a a young cohort that potentially could drive just the product being seen as cool?
1:22:13
Like, >> you know, I joke around with my my wife all the time.
1:22:20
You know, it's cool to be uncool.
1:22:21
Like, we're not aiming for cool.
1:22:23
We're really aiming for value, right?
1:22:25
And I think ultimately like that value cuts across all sorts of demographics.
1:22:29
So, I actually think >> Yeah.
1:22:31
Look at AirPods, I think, are a perfect example of this.
1:22:32
They were mocked early on.
1:22:33
It was like, "Oh, look at look at this guy with his little earbuds in. What a what a bozo."
1:22:37
And then all of a sudden, it was like $20 billion a year, you know, revenue line.
1:22:44
And it just becomes totally normalized and it was just because the the function was there. >> Yeah. >> Yeah.
1:22:49
And I think being unapologetic about the value is what's so important.
1:22:52
And so that's why again starting with our community that loves it, believes in it, you know, and has wanted a product like this now for decades.
1:22:58
I mean some of the folks on our team have been working on glasses based augmented reality for 25 years.
1:23:02
We've only been working on it for 11 years.
1:23:04
So the community of people who have wanted this product for a super long time are going to be the most excited about it.
1:23:10
And that's really how do you and the team think about timing timing out these bets because obviously you've been at you've been at it for 11 years >> and to me it seems from the outside that it's it's like trying to pull the future into the present but at the same time being like patient and not betting the company on like hey we need to make you know 10x the progress in the next 12 months otherwise we're killing this product.
1:23:35
like it feels like more quite a bit more like steady and being being open to uh again like not being being impatient but patient at the same time. Is that accurate?
1:23:48
>> I really love that question because I think that is exactly what has killed a lot of Glass's efforts to date, right?
1:23:53
>> Like we're going to raise $200 million, spend it all in two years, and then you're sitting there and being like, okay, we made progress, but it's not commercial.
1:24:00
Okay, it feels like we're in an age of research for vision broadly, VR, AR, the entire category.
1:24:06
There's just a lot of there's a lot of experiments that need to be run and there's no guarantee that it's going to be, oh, next year's the year or five years. We don't know.
1:24:17
>> This is one of the reasons why we thought it was so interesting to play in this space because we have this huge advantage of being able to invest consistently over the long term, right?
1:24:25
And and that's that is a unique advantage, especially when we're talking about this amount of capital, right?
1:24:29
We've invested more than $3 billion in glasses over 11 years and we've been able to do that very very consistently.
1:24:35
And so at the same time we've seen companies both large and small, you know, start a glass initiative, shut it down, start a new one, fire the team, hire a new team and just the whole time we have built a team of incredibly talented folks with a very very singular and focused vision.
1:24:48
And we've done that over the >> Is that part of the pitch?
1:24:50
I mean over the summer we saw insane talent wars.
1:24:55
SNAP is in a unique position like somewhat isolated down here in Southern California which which I think helps but uh is part of your pitch to talent like hey this is not a program that we're we just started up and we're going to you know work on for three years and then the budget might get cut by XYZ is is
1:25:14
like durability and longevity a part of a part of your pitch >> I think that's definitely a part of it but the most talented folks like they want to create the future not copy the the future right and I You know we have a reputation now for leading in terms of innovation in the space and you know the
1:25:29
folks who are really deeply in this space and who are experts in this space know that what we're doing is leading right I mean what you experience with specs today there's no other product that you can that a developer can just sign up for today and have that type of experience doesn't exist so I think folks who are really deep in this space
1:25:45
understand our our leadership here and that's really helped >> yeah the pure the pure depth of of different experiences in the product too I mean we we didn't we only had you 20 minutes or so, but there were like so many different pages that we didn't even get to and experiences, which was very cool. >> We we got to talk about copying because
1:26:01
>> We we got to talk about copying because um uh I mean we've we didn't invent this in we but but we've had a lot of success with it this year.
1:26:10
>> You clearly been part of this. Thank you. Yeah, exactly.
1:26:11
There's like a little bit of innovation here.
1:26:13
Uh and then there's been a lot of copying and it's driven us various levels of uh insane.
1:26:20
It drives me more insane.
1:26:20
it drives him more insane than it drives me.
1:26:24
Uh but uh at the same time like there's no law that someone's breaking if they want to just like you know do exactly what we do.
1:26:30
Uh that's the way it works.
1:26:32
So how how do you stay sane when people are copying what you're doing? >> Yeah.
1:26:37
Well, you know in the early days we had no choice but to just innovate as quickly as humanly possible because we were late to the social space, right?
1:26:46
And Snapchat is not social media.
1:26:46
We literally built the business as a response to social media.
1:26:51
Facebook came first and Instagram came first and Twitter came first and we were using all these products and we were like these are not very fun, right?
1:26:56
Like this is not actually a great way to communicate with your friends.
1:26:59
It's awesome if you're into like status and building your profile and collecting followers.
1:27:03
It's not a great way to just have fun with your friends.
1:27:05
And so we started building uh Snapchat and and I think you know there was just really a gravitation towards a service that is actually fun to to use with your with your real uh with your real friends.
1:27:14
But as part of that, you know, because we're competing with such giant companies, we just had to innovate as fast as we possibly could in a category that is essentially owned by other players, right?
1:27:26
Essentially owned by by Meta.
1:27:26
Um, and and I think, you know, part of that is is understanding that, you know, one of the most important things you can do in that position is go and build a new category that's outside of the one that you're currently in.
1:27:39
And that's what we identified with glasses 11 years ago that like we wanted to help power this this massive transformation in the way that people use computing.
1:27:46
And then that if we invested over a very long period of time in very very difficult things and things that are incredibly challenging technically and then built a platform as you as you saw with lenses all those different lens experiences that those sorts of things are incredibly difficult to replicate.
1:28:00
And so while I think you know app features uh are easy to replicate, the work that we've been doing over the last 11 years and where we're going with glasses is incredible. >> The example Yeah.
1:28:10
The example for us is like people see the overlay.
1:28:12
So they'll copy the overlay and not realize that like it's not that's not what you know overlays have existed for decades, right?
1:28:21
So like you I find often times when people copy, they don't actually fully understand what they're copying.
1:28:27
So they take an element out of it >> not realizing that it's not necessarily that element that makes the other platform >> uh successful.
1:28:34
How how have you uh thought about partnering uh with different AI companies and labs?
1:28:39
You recently announced the Perplexity uh uh partnership which is uh which I thought people were excited about.
1:28:48
Uh and then I feel like all this year people have been as as some of the labs have have added uh hundreds of billions of dollars of value.
1:28:56
There's been speculation on uh saw people speculating on you know you could imagine Sam Alman trying to buy Snapchat because he sees your user base.
1:29:04
Um and I can see a lot of reasons why uh why why there's no price uh that would that would make that appealing.
1:29:12
But how have you thought about uh partnerships with different AI providers broadly? >> Yeah. Yeah.
1:29:17
Well, I think one of the things that's been really interesting, obviously, Snapchat is so focused on messaging.
1:29:21
And right now, the primary way people are interacting with AI is is messaging.
1:29:25
And so, we saw a huge opportunity to help bring, you know, more of these AI uh services into Snapchat, into our messaging platform because, you know, as I mentioned, whether it's the foundation companies or tons of businesses have built agents now have built chat bots, but they don't have any distribution for them.
1:29:41
>> And earlier this year, we launched sponsored snaps, which is a a killer ad product for us.
1:29:45
it shows up in the in the chat inbox, highly effective.
1:29:47
But the vision is to transition the sponsored snap from being something that you know you just view to now something you you can interact with and chat with.
1:29:57
And so part of that was opening up uh the platform starting with you know Perplexity with an exclusive deal with them but you know then over time adding more businesses who are bringing their chop chat bots and their services to to Snapchat. >> Yeah.
1:30:09
C can you give me a little bit more of an example of that?
1:30:11
Like if I'm Diet Coke and I uh and I want to advertise there's a sponsor snap but then you can chat with it.
1:30:16
And so is it more like Q&A on an FAQ, you could ask questions about the product or is there something more gamified than that?
1:30:22
Like what does that >> Yeah, if you think about someone like, you know, Walmart, they've spent a lot of time building out uh a service called Sparky, right?
1:30:29
Uh that you can use to learn about products or or buy products.
1:30:33
So, what they could do is send you an offer directly to your inbox, ideally highly relevant to something you've already been looking for at Walmart or based on how you've been engaging with Walmart, and then you can follow up, have a conversation, uh, you know, potentially even convert in the chat.
1:30:46
And >> oh, and that's like uniquely good in a chat app like because you're in you're used to that functionality, I suppose, as opposed to just kicking out to some web page where the UI is a little bit uh more foreign or like abstract to you. >> Yeah, exactly.
1:30:57
I mean Snapchat's one of the largest me after iMessage probably the largest messenger certainly bigger than WhatsApp for example in the United States.
1:31:04
So I I think you know in terms of people who are familiar with uh you know our messaging interface that's where they go to have their conversations being able to have those conversations not just with your best friend but also with uh you know agents like Sparky I think is an interesting opportunity. >> That's very cool.
1:31:16
Um there's a whole bunch of news uh OpenAI today shortened their vesting period.
1:31:21
Um, how do you think about aligning talent, aligning incentives for talent?
1:31:26
Um, you've, you know, this transition now you're a public company.
1:31:30
Uh, how do you think about whether or not a vesting cliff makes sense?
1:31:34
We were going back and forth on it.
1:31:35
I was saying that I'm so used to a one-year cliff growing up >> coming from the private markets.
1:31:40
>> The private markets uh at the same time there's a lot of people that show up and on day one they're creating a lot of value.
1:31:45
So, how have you thought about uh incentivizing employees with stock?
1:31:47
Our perspective on this has like really evolved over the years and we learned a ton.
1:31:53
Actually in the early days we did something really different.
1:31:55
We had a 10 20 30 40 vesting schedule.
1:31:56
So you would only vest 10% of your grant the first year, 20% the second, 30% 40%.
1:32:01
And the idea and and we were in LA at the time.
1:32:05
The idea was to really make sure if you were joining SNAP that you were joining it because you loved it.
1:32:08
You wanted to be there for the long term.
1:32:09
It was very popular at the time.
1:32:11
I think it's still very popular in in the valley to kind of hop, you know, spend one year at a >> Yeah.
1:32:15
Why do four years when you can build a basket of >> Exactly. Yeah.
1:32:18
And and I think um you know I think that can be really that that can put a lot of pressure on the culture especially in a startup where you really you know I think it's so important that the team is all in on on what you're what you're building.
1:32:27
Um but you know I think over the time our our view has just been like to take as much friction out of the compensation conversation you know as as possible.
1:32:34
I think like a lot of this stuff is really frankly frankly like irrelevant, right?
1:32:41
Like what really matters obviously if you look at retention and building a team, it's your your leader, right?
1:32:44
The people that you're working with, obviously >> what you're working on, the culture, you know, and and that long-term orientation.
1:32:51
So, I think a lot of this compensation stuff is sort of like details and the less complicated it is and the less time you spend talking about or thinking about it, the better. >> Yeah.
1:32:59
What about other just lessons from becoming a public company?
1:33:01
Uh we we like to joke with Eric Glimman at Ramp one of our buddies that you know he's maybe about to go out.
1:33:08
What is he preparing to do?
1:33:09
What re uh what what are your recommendations for uh CEOs that you counsel about the process and the transition that the company goes through in the IPO process just culturally?
1:33:20
>> I mean the most substantive change is that people's compensation changes on like a minute-by-minute basis, right?
1:33:27
And like that can be very distracting for people especially in the early days and when companies are newly public there tends to be a lot of volatility right and so I think it's just really important again to create a company culture that's not focused on that um especially if you want to build something meaningful over the long >> I remember hearing a story about Enron putting the stock price in the elevator.
1:33:48
>> So like the exact opposite of what you said like literally orient the entire company culture around the stock price.
1:33:52
So, you come in, stock price is up, everyone's having a good day. Stock price is down.
1:33:56
>> How did that How did that work out for them?
1:33:58
>> I I don't think it worked out well.
1:33:58
I don't think >> What about What about setting What about setting uh You seem like, you know, through this conversation, you seem like very clear on your values, willing to say like, "Yeah, we don't want to do VR specifically.
1:34:11
There might be money to be made there, but we don't we wouldn't even do it on a on a principles basis."
1:34:17
How do you think about kind of setting vision internally with the team and externally with shareholders?
1:34:21
externally with shareholders? There's been so many companies this year that uh specifically in AI that kind of like to talk about a vision around let's say like curing cancer but then you look at what they're actually doing in practice and there's not always incredible
1:34:36
there's can there can be like kind of a disconnect between those two things and I feel like that that uh you know it's confusing for people that are just users spectators shareholders and then team as well um so how do you find that kind of alignment in in um vision What a great question. I so I think for
1:34:54
What a great question. I so I think for us like one of the things we always you know remind our team is that as we look at leadership at Snap you know a lot of people think about leadership in this like traditional hierarchy right where you have like leaders and then the team and so we have at snap inverted that right so if you're a leader at Snap
1:35:10
you're at the bottom of the pyramid in an upside down pyramid right and then you have the team that you're responsible for and then you have our community more broadly right and that includes our partners and so that's also how we think a lot about communication so when we're communicating to the world when we're communicating to investors we
1:35:26
always try to remind our team that like our investors are a subset of our community right and so it's really really important that we speak in you know language that people actually understand right and instead of talking about you know we can talk all day in fancy AI terms right but that doesn't really matter when it comes to communicating to your customer and the
1:35:42
customer experience that they're having and in fact sometimes it can be more uh confusing so I think as long as we put everything through that lens of comm you know putting our community first and foremost and then communicating you know making sure that we're always talking to our community first, even if it's some investor update or, you know, uh something like that. >> Yeah. >> Yeah. >> Yeah.
1:35:59
Um Yeah, it's interesting.
1:35:59
Um do you have any book recommendations?
1:36:04
Did you read any good books this year? >> Oh my gosh.
1:36:06
Uh >> Christmas gifts for people.
1:36:08
>> What's there like >> I know it's a really wild question throw at you.
1:36:11
>> Well, what's highly relevant I think for for this form.
1:36:13
There's like a there's a great book that I read on I'll have to find the name for you, but it's something about like, >> you know, it's it's very academic, but it's sort of like the economic impacts of techn technological disruption.
1:36:26
>> And it really and but textbooks, yeah, like textbook style.
1:36:29
Um, but what's great is that it just shows like, you know, from the railroads to semiconductors, etc.
1:36:35
, like the patterns that emerged through these sorts of large technological changes.
1:36:39
And I think it's so important because I think we just need to be reminding folks that like these sorts of changes have happened before. Yeah.
1:36:46
It there's actually quite a consistent rhyme and reason to what happens and that means that all of us should be able to kind of think ahead and manage ahead you know through some of the consequences of I think what's going to happen through uh you know what will be quite a disruptive period of time.
1:37:00
Do you think do you think it's underrated that AI can potentially really help with moderation on big platforms like scale platforms where uh for the first time you might be able to effectively like review every message that's going everywhere or is that is that a negative thing?
1:37:16
Is that a positive thing?
1:37:17
We were just talking to uh Dave Bazooki at Roblox and obviously uh the the potential of like screening every message seems like a really great opportunity for him and I'm just wondering if like there's so many like opportunities but also like risks with this stuff like how have you processed this idea of like AI as a moderation tool sort of under the hood?
1:37:40
So, so first of all, I I do think AI moderation is already like very widespread.
1:37:45
Like I think that's already best practice.
1:37:47
I think virtually everyone's already doing that.
1:37:50
Um, uh, at least obviously we're we've embraced that, uh, at Snap.
1:37:53
I think it's very important and I also think it's a really powerful tool again for customers if they want to fact check something even if their friend told them, right?
1:38:01
The ability to fact check using AI uh, today is is pretty compelling compared to what it was in the past.
1:38:06
So when people are talking about concerns about misinformation and this sort of thing, I think AI is a pretty powerful like counterbalance to that.
1:38:12
What I'm more interested in though is the use of sequence models to find bad actors and to stop them before something bad happens.
1:38:20
So that to me is what I think the frontier of like internet safety is, you know, currently it's certainly an area of research for us um and something that we're really excited about because >> we have a lot of information about what, you know, bad actors try to do on our platform.
1:38:34
We catch a lot of them, right?
1:38:36
But with almost a billion people, it's hard to catch all of them, but we're trying.
1:38:38
But what's really interesting is, you know, we can train sequence models based on those patterns.
1:38:42
What sequence of events are bad actors engaging in?
1:38:46
How are they using the platform so that we can predict, you know, when someone is about to do something that is against our our terms?
1:38:53
And so to me, I think that's a lot of like the the paradigm that we're going to see in in internet safety over the next couple years.
1:38:58
I think right now there's a big focus on, you know, features and trying to tease apart what sort of different features different platforms have.
1:39:04
I think there's just going to be a massive shift to being able to identify bad actors even before bad things happen using tools like sequence models. >> Yeah. Yeah.
1:39:12
Are are you seeing like the level of like bot activity or at least people trying stuff increasing?
1:39:18
We've been talking to a lot of like cyber security folks and it feels like they, you know, the all the all the the bad guys on the internet, all the black hat hackers have more tools, but then also the white hat hackers have more tools and so it's sort of like a cold war.
1:39:31
But I'm wondering if like uh do you feel like you're spending more time f just just more headaches focused on, you know, defending against like endless bot armies or has that just been like a drone throughout the entire process, the entire career?
1:39:48
I I think for us like if if you look at cyber security right some of the like most significant threats are actually you know are human vulnerabilities and I think that's where AI actually is is almost the most >> dangerous because today right our team members can get phone calls from Evan Yep
1:40:08
>> hey I really need your help I got to investigate this thing wire me 200 bucks or buy some gift cards really quickly for this creator event we're doing right That's like and and I think like the ability for for bad actors to use AI to exploit our human vulnerabilities is something that we really worry about and think a lot. >> Yeah. I mean there were so many times >> Yeah.
1:40:25
I mean there were so many times when like the fishing email was clockable just by bad grammar or you know spelling mistakes and it was like that was enough of a tell and like one pass through any LLM and you get rid of all of those.
1:40:38
all of those. I I I think another thing that's going to become increasingly important um you know as we look at cyber security is the interconnectedness of all these services right like a lot of companies today especially young companies who aren't investing a ton in cyber security are using a huge number
1:40:54
of vendors and what's really interesting is you know today compromising a vendor and then using that vendor to compromise the the you know core business that that's the sort of stuff that's really concerning especially with fishing right so we saw an interesting one recently where one of our vendors was compromised. I received an email that
1:41:10
I received an email that looked like it was from the vendor, right?
1:41:13
But it was actually a fishing email.
1:41:15
And you know, it's again very hard to tease apart.
1:41:17
So I think the interconnectedness in terms of cyber security is something that folks just don't talk about as much as maybe we we need to.
1:41:24
>> We we joked about uh uh some news organization acquiring paperless post and then just understanding where all the different people going to events powerful people.
1:41:34
Um, I do have uh one uh kind of uh more uh broad question uh and then I know you you got to jump, but uh Snapchat I think of as like country scale or it's it's the size of a nation state.
1:41:48
You're basically the governor of a basically the governor of a state or or or a country and and California specifically has gone through >> a really wild year.
1:41:57
You grew up in the in the Palisades.
1:42:00
I'm wondering if you were uh if you were uh like what would you do like how do you kind of like how do you feel California is today as a state even Southern California more specifically?
1:42:14
Uh I think you know we I live in Malibu and John lives in Pasadena.
1:42:19
We weren't affected by the fires but there was this like extreme frustration uh during that moment because it felt like uh in many ways the government had had kind of failed the citizens.
1:42:28
So, I'm curious if there's anything that uh like how you're thinking about the future of the state and and how we can make positive change. >> Okay.
1:42:37
Well, we could spend another another hour on this.
1:42:38
I So, I I love California so much.
1:42:40
Obviously, I was born born and raised here.
1:42:42
I think it's an incredible state and it's so important to the future of US competitiveness, right?
1:42:46
So, I think people talk a lot about the competition between US and China.
1:42:49
I don't think people talk enough about the competition between China and California, right?
1:42:54
which is a really really interesting relationship because both China and California are deeply interconnected at the same time that that we're competing a ton.
1:42:59
So I think California is just unbelievably important to the future trajectory of the United States.
1:43:05
>> I I think if you look at California today, I mean, you know, you you obviously know all the stats, but like highest unemployment rate, highest poverty rate, most homelessness, >> housing housing crisis, massive housing, >> people moving saying, "I'm moving to Austin for quality of life. I love Texas. Texas is amazing."
1:43:20
But it can be like well it can be like I mean it's very cold in the winter.
1:43:24
It's very hot in the summer if you're moving somewhere like that for quality of life.
1:43:29
It just means that housing is I mean housing affordability is like top of mind for a huge percentage of people.
1:43:37
And uh of course here that's uh you know most elevated. >> Yeah.
1:43:42
I think the affordability crisis here is is incredibly concerning.
1:43:45
here is is incredibly concerning. Uh I think one of the things if we look historically at you know the way that our government has operated we kind of we we tend to fall in this pattern it seems like of you know very heavily regulating our industries which you know by the way to some degree is important
1:44:03
one of the reasons why we love California it's beautiful right it's clean all these sorts of things we really love about California but at the same time we also then layer a ton of subsidy on top of that so you dramatically restrict supply with very very heavy regulation and then you know we we've got a a very large economy. We've got the highest one of the highest
1:44:18
We've got the highest one of the highest tax rates here in California.
1:44:20
We put a ton of subsidy into that economy after dramatically restricting supply.
1:44:24
And as a result in all these areas, you know, especially things uh like housing, I think you have massive increases uh in in pricing.
1:44:33
And and I I am optimistic in the sense that I think the legislature this year is really starting to pay attention to it, right?
1:44:39
There's some progress on SQL reform, for example.
1:44:42
there's more attention being paid to, you know, how expensive it is to building affordable housing here.
1:44:45
When the government pays for affordable housing, it's about 30 or 40% more expensive than just market rate affordable housing.
1:44:52
And so, >> I think, you know, people are starting to pay attention to it.
1:44:55
But the another thing that's fascinating is I'm just not sure Californians are aware of how problematic things are right now, especially because our politics are so partisan that I think if you look at the California voter base, they're saying, "Oh, well, at least it it doesn't look like the federal government, so we're doing better here uh than, you know, than they're doing in DC, so I'm okay with that." Right?
1:45:15
But so so I think to me part of the you know the journey over the next couple years are is is California is really Californians really waking up to the fact that we can do a lot better here in our state and in fact we we've got to do a lot better you know the US wants to continue to compete.
1:45:30
>> No and I I went growing up in in uh the Bay Area and living in Southern California my adult life I went through a brief moment during 2020 where I started looking on Zillow outside of the state because it was like they shut down the beach.
1:45:42
I was like, "Yeah, I'm living like half a mile from the beach and I can't I can't go there."
1:45:47
And uh I made the very uh specific decision.
1:45:52
>> I was like, "No, I'm not going to I'm not going to leave this.
1:45:53
This place is too beautiful.
1:45:54
I've had family roots here going back to the early 1900s.
1:45:57
We need to stay and people need to focus on making it better.
1:46:02
It's the greatest place on earth that I've been to and and it's worth uh it's worth continuing to invest in and and steward."
1:46:09
And uh I I felt like the fires were so symbolic too at the Palisades of like the you know everything burning to the ground except Rick Caruso, the guy we couldn't elect as mayor.
1:46:20
Uh even though I believe you know again I believe he genuinely loves this city and and wants to see it shine.
1:46:27
So >> anyways we should >> because we could talk about politics for the rest of the show. Uh what is in here?
1:46:35
We don't talk about We don't talk about uh >> Oh, is this an ornament for the tree? >> No way. >> This is incredible.
1:46:41
Ooh, I think this is going to be a new new tradition. I like this.
1:46:46
>> Yeah, we we Oh, this is amazing. There we go. Close up. Well, how perfect. >> Thank you.
1:46:54
>> Uh this is remarkable.
1:46:57
>> Would you mind signing this?
1:46:57
We love We love collecting autographs.
1:46:59
We love We're building a uh a museum of business.
1:47:03
And then uh I think you got a chance to hang out.
1:47:08
>> We're putting we got to put that up at the very top >> for sure. So uh for sure. >> So thank you so much. My pleasure. Fantastic.
1:47:13
We'll let that look fantastic. Um congratulations.
1:47:15
Thanks so much for having one one almost one billion global Snapchatters.
1:47:19
Can we have you hit the gong to hit the gong?
1:47:23
>> You got to hit the gong.
1:47:23
If you come to the If you come to the ultra dome, please uh pick up this mallet here.
1:47:29
>> Hit it as hard as you want. >> As hard as you want.
1:47:31
I'm >> glad you labeled it too.
1:47:34
Just in case you fantastic love to have you back on any >> I I I really love the ornaments.
1:47:51
I didn't even realize that that would be something that could happen given that we have a tree.
1:47:58
Like this is going to be a thing now.
1:48:00
We're going to grow an ornament collection merch. It's amazing. >> Uh I I love it.
1:48:05
Well, that was a fantastic thank uh conversation.
1:48:07
Thank you for everyone uh for listening.
1:48:08
And let me tell you about Vanta automate compliance and security AI that powers everything from evidence collection and continuous monitoring to security reviews and vendor risk.
1:48:19
Um there is some Oracle news. What else is going on?
1:48:27
I've just pulled up this hilarious video of of uh Oracle pivoting to AI.
1:48:29
I don't know if we should flip back to this.
1:48:32
Um we have RJ from Rivian coming.
1:48:36
>> Play this video while we wait for R. J. to join.
1:48:40
>> This is this is perfectly on brand.
1:48:42
>> I put this in there for you, John.
1:48:44
>> So, the news here is that Oracle uh Oracle bond holders now sit on 9% of unrealized losses on 18 billion of debt. >> Okay.
1:48:51
Well, don't don't focus on that, John. Focus on this video.
1:48:53
Matt Turk says, "Oracle after pivoted after pivoting to AI." >> 80 years young.
1:48:59
>> This guy look this makes me want this makes me want to own the stock because this really does feel this really does feel like uh the the current state of Oracle.
1:49:07
>> I mean, Larry Ellison looks fantastic.
1:49:09
Uh he has he's been on a he's been on a tear and you know >> this is this is this is this is your future, John.
1:49:15
After we're going to we'll probably retire somewhere around 70.
1:49:20
>> So, we got we got a good we got a good run ahead of us still.
1:49:22
But then you're going to go and and go back and and hire an elite team and and really make a run at the at the Arnold Classic >> in the uh in the in the vintage division. >> Yeah.
1:49:33
Well, uh let's head over to Keller Clifton and Andrew Cotay.
1:49:36
Keller says nextgen Infra.
1:49:40
And the the drone tower is really remarkable. Like what is that?
1:49:49
uh four, eight, 12 drones in one tower, all charging.
1:49:52
These are, of course, the zipline drones that deliver everything from Chipotle burritos to uh I think blood transfusions and all sorts of stuff. Uh saving lives.
1:50:01
Uh and Andrew Cotay says, "We are not mentally prepared for just how cheap everything is about to become as robotics of all kinds explode into the market."
1:50:11
Um and Elon Elon chimed in.
1:50:15
says, "Harning even a millionth of the sun's energy would make every human a billionaire in purchasing power." Wow.
1:50:23
>> I don't I'm not sure dead mouse concerts are going to get uh any cheaper uh given that some of these robotics companies are hiring uh hiring in order for their holiday. >> Keller is locked in.
1:50:33
Keller is locked in is not hiring dead mouse.
1:50:37
>> Uh yeah, maybe maybe we we should see.
1:50:39
We I mean we don't know that he didn't. It's possible he did. >> It's possible.
1:50:42
>> I I have a feeling it's possible. >> Anyway, Finn.
1:50:44
ai AI, the number one AI agent for customer service.
1:50:46
Automate the most complex customer service queries for every channel.
1:50:52
Um, Joe says, "Older friend I admire.
1:50:54
I'm having a real I'm having real liquidity trouble."
1:51:00
Me, "You own over 45 million of shares in a private company."
1:51:02
X, I started you backed us early. Take 10 million off. Not sure.
1:51:07
I don't like to sell stuff. Me. Okay. FYI, it's QPS. I'll think about it. >> Yeah.
1:51:14
Uh yes uh in the chat >> Ryan asks are we going to cover Roomba?
1:51:20
I'm uh do you did you hear the did you hear the news about Roomba >> finally total bankruptcy >> very upsetting because of course they were going to sell >> Chinese companies are buying up the assets at auction >> I'm sure um it does seem like they are I don't know is GoPro in the same in the same um in the same bucket I don't know how's how's GoPro doing these days um but yeah Roomba so GoPro is down to 150
1:51:49
million in market cap um up of course it was in the billions at one point um and Roomba you know you just get really heavy competition from international players uh it it compounds and compounds and eventually um there's nothing to do but ideally hang out with uh the good folks over at Amazon but that was of course blocked and so they had to go their own way and their own way led to doom unfortunately Ely. Um, but
1:52:17
Um, but fortunately, we have an American company that's bringing it back.
1:52:24
This is not an intro to our This is an intro to Madic, the Roomba competitor or new company that that came uh came on the show.
1:52:32
And you have one at home.
1:52:35
You have you have the the Phoenix rising from the ashes. >> Okay.
1:52:40
You You want to know why?
1:52:41
>> You have the reincarnation of >> You want to know why I believe Maddic is really going to go all the way? >> Why?
1:52:46
is because my children, Yes.
1:52:49
specifically my one-year-old, yes, is constantly messing with it and it still works. >> Really? That's impressive.
1:52:56
>> My one-year-old is just constantly sitting on it, moving it, taking it apart, >> putting it back together.
1:53:03
>> Uh, and and not in a not in a very any type of more specific way.
1:53:05
She's just kind of messing with it.
1:53:09
>> Uh, and it still works. It still runs every day.
1:53:11
Uh I don't you know some some of these things >> a device like that you you uh the concern is always >> okay it works but do I have to spend a bunch of time thinking about it and and kind of like managing this new robot? >> Yep.
1:53:27
>> And is it and then at that point should I just have a vacuum and and just use that? >> Yep.
1:53:32
>> Uh this thing has just been running perpetually on a schedule reliably.
1:53:34
I've had it uh running for at least six months now and and uh it's really fantastic. >> I have an idea.
1:53:42
Okay, so you turn your kids loose on Julius. ai.
1:53:49
We see if that still works once your kids have gone crazy all over the AI data analyst that works for you.
1:53:53
Join millions who use Julius to connect their data.
1:53:58
Ask questions and get insight in seconds.
1:53:59
Uh if it holds up, you know, I think it's a good sign.
1:54:02
I think it's I think it's built for uh >> Gold Rock.
1:54:06
I won Radio Shacks innovation of the month in like 2009 for making an Arduino Roomba. That is cool. >> Early.
1:54:14
>> Speaking of kids, I was hanging out with uh some some mutual friends of my kids last night, some parents.
1:54:19
And you know what they had in the driveway?
1:54:23
>> Did you just call the parents of your kids mutual friends? >> Sorry.
1:54:26
The So, friends, parents, >> what do you say? Playd date. I went on a playd date. Okay, shoot me.
1:54:32
I went on a playd date and and the parents of my kids' friends. Yeah.
1:54:38
The parents of my kids' friends, right?
1:54:40
They had a Rivian R1S in the driveway and they're very happy with it.
1:54:45
And I'm very happy that we get to talk to R. J.
1:54:46
from Riven here in the studio. >> Welcome to the show. How are you doing?
1:54:55
>> Thanks so much for taking the time to come chat with us today.
1:54:58
>> It's great to have you. >> Yeah. Nice to be on. >> Yeah.
1:55:02
Um I would love to I mean first set the table on you know like how the year went where the business is and then of course I want to go into the new chip and uh and just self-driving broadly but um but how how are you describing the scale of Rivian at at this point in time?
1:55:23
>> Well I mean we're we've launched as you as you just referenced we launched a set of flagship products.
1:55:27
We have an R1S which is the bestselling premium SUV in the US and then um electric SUV in the US and then we have a truck R1T. >> Yep.
1:55:35
>> And make commercial vehicles >> but we haven't launched our mass market product yet which um which is coming in the form of what we call R2 >> R2.
1:55:44
>> And so that will dramatically expand the scale of the business and I think a lot of the uh a lot of the in some ways um challenge we've had is we're investing to be a very large business.
1:55:55
to be a very large business. So investing in vertically integrated technology to enable us to be a you know multi-million vehicle a year business and the technology investment has to happen before the products come and so we have you know huge fixed costs to develop all this tech whether it's you
1:56:12
referenced it already whether it's a in-house silicon or >> all of our compute platforms our operating system you know of course all the high voltage work >> but that all comes together really nicely with the launch of R2 which is what really gives us this scale uh to support all this R&D. >> Let's start with uh R1T
1:56:29
>> Let's start with uh R1T uh electric truck felt very contrarian.
1:56:36
It feels still a little contrarian truck buyers, you know, not to generalize, but it's a very much like I like my truck reliable with gas.
1:56:44
I don't like this new thing.
1:56:46
Uh did it seem like a risk to you at the time when you put when you said, "Okay, we're going to do the truck first.
1:56:53
We're going to do that so early."
1:56:55
uh like what what gave you confidence that it would deliver and you could actually win that market over?
1:57:04
>> You mean the truck the truck market specifically is such a it's such a large market and it's um >> and I think we often think of it as like one singular type of buyer which is like the person who's loading up, you know, 2,000 pounds of concrete in the back. >> Yep.
1:57:18
>> Vast majority of trucks used in the United States are actually used more like cars.
1:57:21
So they're, you know, they're used as a daily driver.
1:57:25
>> The the the bed is used more for lifestyle activities.
1:57:27
So, you know, put a dirt bike in the back or >> got it, >> you know, kids toys in the back, that kind of thing.
1:57:33
And so we said, we're not as a company trying to address the contractor use case.
1:57:37
So if you're if you want to load concrete and cement blocks in the back of the truck, this is probably not the vehicle you want to do it in. It could do that.
1:57:43
It's capable of, >> but that's not the brand aspiration.
1:57:46
And it was one of the reasons we also made it really clear that we are had both the truck and then this sibling vehicle, the SUV.
1:57:54
And there's so much shared content between the two.
1:57:56
But the other thing we wanted to do is just eliminate any questions of whether or not it was capable.
1:58:01
Um, you know, you'll laugh, but in 20 I guess 2019, I would get questions like, well, what if it gets wet?
1:58:08
Can it drive through deep puddles?
1:58:10
and like so there's just like a very um very low level of understanding I'd say generally around electric electrification what that can do in terms of off-road and capabilities and so with R1 we made it really capable uh so it's you know it can go extreme rock crawling it can go drive through 3 ft of
1:58:29
water it can um you know it can accelerate faster than you know most hypercars so our our current quad the 0 to 60 in like three and a half seconds It's sort of >> unnecessarily silly in terms of its capabilities, but it's a it's a flagship product, so it's there to make a statement. It's there for for building
1:58:46
It's there for for building the brand. >> Yeah.
1:58:48
On on the SUV side, have you been surprised by how how much runway you've had in that market for full-size SUVs?
1:59:00
um because it feels like a lot of people went after trucks very quickly, but the the fast followers haven't really come after the R1S.
1:59:08
And from I mean, I grew up in a family with a Ford Explorer, and I've always been full size.
1:59:15
Feels it feels like one of those things that in in 20 years people will look back at this window of time that Rivian had to just dominate that full size SUV category and and feel like this was the biggest possible blessing that you guys couldn't necessarily plan for, but it kind of worked out nicely.
1:59:36
>> Yeah, I mean it's uh to your point, I mean in the space of electric vehicles priced over $70,000, these are all depending on how you draw the boundary diagram.
1:59:44
The way we look at it, we have about 35% market share.
1:59:46
And so it's the bestselling electric uh premium SUV in the United States by a significant degree.
1:59:55
You know, significantly outs selling something like a Model X, which is >> uh also in that same category.
2:00:01
>> But it but interestingly, in the state of California, it's the best selling premium SUV, electric or non-electric.
2:00:06
So really, if you for those that are spending time in California, if you're driving around the Bay Area, driving around SoCal, yeah, they're just everywhere.
2:00:13
So, um, you know, our hope is that with R2, it's a price point that starts at 45, it captures a lot of the magic and the essence that's in R1. >> Yeah.
2:00:22
>> But at a much lower price point.
2:00:22
So, if we can have even a fraction of the market share that we have with R1 with R2. >> Yeah.
2:00:29
>> We'll be we'll be very very very happy.
2:00:32
>> Where did the headlight design come from?
2:00:34
When I first saw it, I was like, it looks like cartoon eyes. It was not for me.
2:00:39
And now it's completely grown on me and it's just completely been like, "Oh, that's just the" It's it's become not only like I I I think of it as cool.
2:00:48
I don't think of it as like cartoony or childish, but also it's simultaneously become iconic because I see it from a mile away and I'm like, "Oh, that Rivian."
2:00:56
And I feel like that's exactly what you how you wanted it to play out.
2:01:00
But what was the thinking with that?
2:01:02
Because it does feel bold and different. >> Yeah, definitely.
2:01:04
And you know getting to something that starts to feel iconic.
2:01:08
It's always hard cuz >> you can't design something and it immediately becomes iconic.
2:01:12
So >> I think it has to start with a really strong point of view and a strong conviction around a a certain direction.
2:01:19
So in the case of the front end I mean no in 2018 2019 no one knew what a riv looked like.
2:01:26
We didn't know what a looked like.
2:01:27
Uh so we were figuring out so there's lots of different faces of the vehicle and one of the things we arrived at was the realization we wanted it to look technically capable but also friendly.
2:01:39
And so often if you go friendly it starts to look like nice but not tough.
2:01:44
And so we wanted like nice but still tough.
2:01:46
So it was a really hard balance.
2:01:49
>> The original Whimos from Google were like a little bit too nice and they were like these goofy things and then they finally Yeah. >> But yeah continue.
2:01:55
So, it was like it was a lot of iteration.
2:01:57
And >> one of the I grew up a car enthusiast and so I' I've always been drawn to cars that now we would consider be iconic, but if you look at the history of those cars, often in the beginning, >> they're made fun of.
2:02:08
And so, you know, if you look at the Volkswagen Beetle, uh, as an example, uh, that was thought of as heck, even Volkswagen called it ugly. Uh, they leaned into it.
2:02:19
>> Well, even on the on the other end of the spectrum, the F40 was controversial. >> Yeah.
2:02:24
And now it's obviously, you know, a car that a lot of >> Yeah.
2:02:28
I mean, a lot of super cars start out like kind of mock and then we're not being daring enough or something. Yeah. >> Yeah.
2:02:33
So, we wanted to push push some boundaries, but we also wanted to use really clean forms. >> Mhm.
2:02:38
>> And the benefit of a clean form like >> uh you know like primitive shapes in this case like half circles with you know like a like a um like a stadium. It doesn't age.
2:02:50
It doesn't, you know, it's a form that has been around for ages and so it feels very timeless and it the way we integrated it very seamlessly.
2:02:58
The hope was is that it would become something that's very recognizable.
2:03:01
You see on the road, you said it's a Rivian and then that it could scale to different sized vehicles, different vehicle segments.
2:03:05
So yeah, there's still people that that don't love it, but I'd say the vast majority of people who have been around it start have either liked it from the beginning or as you as you just described have grown to really like it.
2:03:16
I want to talk about R2, but first I want to ask you about R0. Are we going bigger?
2:03:21
I mean, if the numbers go when the numbers go up, the vehicles get smaller.
2:03:25
What do I have to do to get something that competes with like a Cadillac Escalade ESV out of you?
2:03:31
Because I I have a big family.
2:03:35
I have two huge dogs and I want the absolute monster land yacht.
2:03:37
And I'm just my my my serious question is uh like is there something about the physics of electric vehicles where it gets harder to make something that's really really long or huge or big or is it more just like that's more of a niche thing and maybe you'll get to it or the market will will get to it eventually but it's not the highest priority right now? >> Yeah. Yeah.
2:04:00
Well, I I love this question because we have um >> we as a company have so many different ideas and so you can imagine there's like 50 different concepts or ideas we might have for a vehicle, we have to pick a few things to do.
2:04:12
And so when you then look at the electrified space and you say what's what's going to sell at volume for a flagship product we started with something that was larger but as we move into mass market the the the size of the market that exists for these very very large vehicles things that are bigger than R1 is very very small.
2:04:30
So there's not a lot of customers you know it's like maybe 10,000 units a year if that.
2:04:37
Um, and then you look at just the the biggest segment by far is a two row, five passenger SUV, and I'd say there's probably like one highly compelling choice today under $50,000.
2:04:47
That's the Tesla Model Y. >> Yeah.
2:04:51
>> And so it's like wildly underserved.
2:04:51
>> And so it's like wildly underserved. You >> imagine there's 300 different choices in the in the combustion world and you've got like maybe one >> there's many choices but there's one that's highly compelling which >> how uh molded like how how
2:05:07
people wake up every day and they they tell themselves they're buying the car that that they want but in reality there's like a regulatory environment that that forces manufacturers to make certain decisions and trade-offs and and push different vehicles >> uh with the new Don't want seat belts in your car, right? >> No. Inside joke. Um the uh but but with >> No. Inside joke.
2:05:26
Um the uh but but with the new with uh cafe regulations going away, people are talking about uh America being flooded with these mini trucks, >> trucks.
2:05:39
>> I'm not con I'm not convinced that that uh there's actually that many buyers of of those vehicles in the US.
2:05:43
Uh may maybe there is, maybe there isn't.
2:05:48
How how much do you feel like the the popularity of different vehicles is really just downstream of um choices that manufacturers have had to make because of for various regulatory reasons.
2:06:02
>> Boy, uh we have this discussion all the time.
2:06:05
I mean the the causality of demand is interesting because it's uh you don't have an infinite set of choices.
2:06:10
So therefore demand starts to look like what supply looks like.
2:06:13
And we we see this we we believe this is going to happen with R2 where there's very few choices in I'll take let's talk about it in detail.
2:06:25
So Tesla launch Model Y very very successful.
2:06:29
>> It's a it's a non-traditional form factor in terms of a midsize SUV.
2:06:31
You know it's more it's very carlike.
2:06:33
Yeah, >> that has its advantages, but you've found a lot of people that are coming out of more traditional SUV form factors into that, but they don't have another choice.
2:06:44
And so what we saw happen is a bunch of other manufacturers create their own version of a Tesla Model Y.
2:06:48
So the form factor is very similar to a Model Y.
2:06:52
You know, if you look at the side view of it and draw a line over the profile of it, it looks, you know, it's a Model Y.
2:06:58
like >> different OEM's versions of that, >> which was actually the wrong conclusion to draw because you didn't provide customers with better diversity of choice, but rather you gave them a less good version of a Tesla Model Y.
2:07:09
If you want a Model Y, buy the Model Y, not some other company's version of it.
2:07:13
And so we were very clear on the need to have a a very different point of view and not uh fall into that trap of thinking everyone is going to want that exact vehicle form factor and profile package. Mhm.
2:07:29
>> And so I think that that happens all the time in automotive and and it's sort of shocking, but if you were to think about take like the sedan space, you have the BMW 3 series, the Mercedes C-Class, the Audi A4, they're all like dimensionally very very similar.
2:07:45
And then you have, you know, the BMW 5 series and the Mercedes E-Class and the Audi A6.
2:07:49
So you have like these interesting segments that are like very much uh because of this like hard to trace causality, you just have a lot of people building very similar things with different fronts, different rears, maybe slightly different surfacing, >> but the the specs of the vehicle are highly aligned.
2:08:10
And so I think there is an opportunity with electrification to reset some of those uh expectations and to reset segments, sizes, performance characteristics, some of the attributes.
2:08:23
One of the things we worked on really hard in R2 was the rear seat like comfort or space is completely unlike anything else in the segment. So it's a lot of space. >> Yeah.
2:08:32
>> Um but and then you look at all the cars in space and they're all like within 15 to 25 millimeters of each other for rear seat leg room and you're like Why is why are there 30 cars that have almost identical rear seat configurations? And it's >> Well, yeah.
2:08:46
When the when the team sees something like that, are they like, are we missing some sort of like regulation that that like requires like you ever and then and then you kind of trying to figure out, wait, do we actually have flexibil I always you end up wondering like are are we missing something and then you realize >> well the the mechanical nature of a car is means that everybody can buy everybody's products.
2:09:08
So every company like Rivians are owned by every car company and they take them apart and they own all the other, you know, all the other things they're competing against.
2:09:16
And so as a result, a lot of like the mechanical innovations, let's say welding techniques or >> casting techniques, they sort of very quickly become state-of-the-art.
2:09:25
But the the downside of that ability to buy each other's products and so easily observe them is you do have this funneling towards like uh consensus around different segments.
2:09:36
And so we we we sort of lose some of the uniqueness between the different vehicles.
2:09:44
And see you like for for car enthusiasts you find a lot of times car enthusiasts will say a car they all look the same. They all feel the same. >> Yeah.
2:09:51
Uh, and so we we try hard to change that, but there are certain expectations.
2:09:55
I'll give you a really good example.
2:09:57
Um, on our R1T, we did a ton of research and we looked at what people put into the bed of the vehicle.
2:10:05
And if you're using it for lifestyle, you want to be able to fit it in your garage.
2:10:10
And if you're putting anything uh anything other than a motorcycle, which in which case you or dirt bike where you'd have the tailgate down, the bed length doesn't need to be longer than 4 and 1/2 ft. >> Just doesn't.
2:10:23
There's nothing that goes in that requires unless you're doing like construction and you need to put something.
2:10:27
And so we made the bed shorter with this articulating tailgate that goosesenecks out.
2:10:31
So it gives you it's actually longer with the tailgate down.
2:10:35
So it fits a really long motorcycle.
2:10:36
But when it's up, it it everything fits in the you know, it fits in the garage more easily.
2:10:41
And so we we look at most if you drive through a neighborhood, you know how you know who has a truck in the neighborhood?
2:10:46
It's because it's parked in the driveway.
2:10:48
Most trucks don't in the garage. >> Yeah.
2:10:51
>> Uh and so we wanted to fit in 95% of the garage in the United States.
2:10:53
We went through all this thought process.
2:10:54
We built it and the standard size is 5 foot.
2:10:58
And the amount of times I've been asked, why didn't you make the bed 5t long?
2:11:02
I said, well, of course we could have. It was just a decision. We made the decision.
2:11:04
They wanted the truck to more easily fit in a garage.
2:11:06
So those are like you sort of sometimes if you break the mold of like what's expected for dimensions because customers media car journalists are so trained on a certain size. >> Sure.
2:11:18
>> The battle may not be worth it. >> Yeah.
2:11:20
And also there's like there's the decision to purchase a car and you might just be looking at specs and you're like five is better than four and a half but then you're live you live with a car for four years and you're like oh well this is actually way better.
2:11:30
I never needed that extra half foot. Um yeah fascinating.
2:11:34
What uh where do you think uh Chinese EVs are overhyped uh or underhyped?
2:11:40
>> Give us No, give us a white pill. Overhyped.
2:11:41
I want the so recently there's been a lot of excitement around them and fortunately we're not letting them flood our country >> uh with them.
2:11:49
Uh but we had a guest on the show recently that had said he was in China a few weeks ago and and he there was one of the I I forget which manufacturer, but one of them were just like caught like side of the road burning on on fire.
2:12:02
he felt like they were potentially overhyped because they do have some features that are kind of >> scroll stopping.
2:12:08
I'm thinking of the one that can jump uh >> the Yong Wang U9. >> Yeah.
2:12:13
But uh but you know given that given that uh every manufacturer is free to assemble I mean disassemble any other vehicle and and learn from it.
2:12:20
Uh what do you think American manufacturers can uh learn from what they're doing?
2:12:25
H >> yeah, I do think it's important to sort of uh pull the pull the curtain back on what sometimes I think gets presented as if it's magic, particularly on cost.
2:12:38
>> So I think there's two things to take away from uh the Chinese electric vehicle space.
2:12:42
First, there's over a hundred different brands and manufacturers in China and there's only a small fraction of those that I would consider to be in the category what I'm going to talk about leading in technology and having really robust architectures.
2:12:57
Um, but the two things with that said, so if if you say there's more than five less than 10 manufacturers that fall into the categories I'm about to describe, you have an interesting phenomena where a lot of these newer companies in China for the same reasons that Rivian or Tesla have very different software architectures, electronics architectures, and incumbent OEMs is they started with a clean sheet. Mhm.
2:13:21
>> And when you start with a clean sheet, you would very quickly arrive at a completely different technology topology than what evolved into cars over the last 50 or 60 years. >> Yeah.
2:13:32
>> And what I mean by that is um prior to like 19 early 1960s, cars were 100% analog.
2:13:39
So there are no computers in a car.
2:13:40
And the first computer to make its way into a car was ironically was for the fuel injection system.
2:13:46
And so for any of the car enthusiasts out there, this is like those original like Bosch Kronic fuel injection systems that we started to see emerge 1960s and early 70s.
2:13:57
>> And car companies at the time said, "Boy, we build engines, we design vehicle bodies, we assemble the cars.
2:14:00
We don't need to make these little electronic modules."
2:14:04
And so they pushed that work to suppliers.
2:14:06
Companies like Bosch or Continental uh would make these little computers that run the fuel injection system.
2:14:14
Then subsequent to that over the currents of the last 50 years a bunch of other things started to have a need for computers and your seats suddenly became smart and there was a computer that went with the seat.
2:14:27
Your a your air conditioning became intelligent.
2:14:30
There was a computer that went with that.
2:14:32
your sunroof had a computer and before you knew it, the vehicle architecture was this proliferation of, you know, in some cars 100 to 150 little mini what we call electronic control units or computers that run these specific domains like the domain of an engine or the domain of a door or the domain of a seat.
2:14:49
And it's precisely the opposite of what you'd architect if you were thinking about it as a clean sheet.
2:14:56
We would never say I'm going to build a network architecture and software platform that has 150 different software code bases running 150 different little mini computers which communicate through this sort of klutzy can architecture >> that might all be need to be independently updated at various points in the car's life cycle.
2:15:15
It's just like it's a total disaster.
2:15:18
So what you'd say is I'd have as few computers as possible doing as much as they can. >> Yeah.
2:15:23
And so what you know the the fancy way we describe that now is it's a zonal architecture.
2:15:27
It's a computer that controls a whole zone.
2:15:28
And so Tesla of course developed their architecture like that.
2:15:33
We of course developed our architecture like that.
2:15:34
And a couple of the Chinese did as well.
2:15:35
And this the the real benefit of this besides just taking a lot of cost and complexity out is that you can make updates really easily.
2:15:44
And so if I want to change let's say the sequence of events that occur when you unlock the car, I don't have to coordinate amongst 15 different suppliers.
2:15:52
the supplier for the horn ECU, the supplier for the door lock ECU, the supplier for the, you know, the interior lighting ECU.
2:15:57
I can do all of that in like a matter of minutes internally because it's running on our own software platform and it's all of our own code.
2:16:06
And so just the the the emergence of regular updates, improved features, features that respond to dynamic customer needs, I think is a really big shift.
2:16:17
And in the west, there's two companies that have that, Rivian and Tesla.
2:16:21
Um and then in China there's as I said more than five less than 10 companies that have that. >> Mhm.
2:16:27
>> And if you don't do a software defined architecture well the ability to do like AI integrated into the vehicle or an AI defined vehicle is enormously hard.
2:16:35
Uh so you have to have all these ingredients to be able to do like the broader architecture well.
2:16:42
>> Anyway, so that's one big difference and that actually underpins we did a $5.
2:16:45
that actually underpins we did a $5.8 8 billion software licensing deal with Volkswagen that that technology I just described for network architecture software OS u is what we license uh as part of a big partnership with Volkswagen group but the other is that the Chinese companies have just
2:17:01
fundamentally lower cost structure they have much lower labor costs their cost of capitals often free or more than free meaning they get paid to build a plant or they get enormous government subsidies and so you can just build a spreadsheet to look at this it's not it's not magic they're building the cars. You they're not using
2:17:16
You they're not using some new type of material from outer space.
2:17:20
It's it's using very, you know, consistent material.
2:17:23
It's what we use in the United States.
2:17:24
Consistent joining and forming techniques and putting the cars together are very similar.
2:17:28
They just have labor costs and capital costs are much much lower than the United States.
2:17:35
>> If you had to pick a gimmick that you do like, what's your favorite gimmick?
2:17:39
Because the jumping the jumping car is a pretty good one.
2:17:42
I showed that to my four-year-old and he was like, I need to I need >> I don't think I don't think it's good unless unless they're jumping a human like a demo where they jump a human other otherwise it's just a cheap trick.
2:17:52
I don't need to jump I don't need to jump a paperclipip. >> Okay. Yeah. Or a pothole.
2:17:57
Hey, you do need to jump a pothole.
2:17:59
You got a you got a flat tire.
2:18:01
>> I did blow out a tire.
2:18:02
>> You blew out a tire this weekend.
2:18:03
Anyway, favorite gimmick.
2:18:03
If like if you had to pick one, what what do you like?
2:18:08
You know, there's like a there's the tank turn.
2:18:09
There's, you know, a whole bunch of these different gimmicks.
2:18:11
Is there are there any gimmicks that you think are fun >> or maybe retro gimmick? >> Uh, yeah. I don't know.
2:18:17
Um, >> I mean, they're just fun to watch.
2:18:21
I don't know if I I we haven't Again, we haven't decided to put any of them in there.
2:18:25
They're But in vehicles, we we do have something called kick steer in our vehicles, which when you're off-roading, because we have a quad motor, you can turn the vehicle on its axis. >> That's good. Yeah. >> Sort of cool. Yeah.
2:18:35
Um >> I mean even even the Gear Tunnel to some to some degree like stood out.
2:18:39
It was like like the Gear Tunnel when that launched that was definitely like a like a oh well like this is different than normal.
2:18:46
This is not something I normally and I feel like there there's a balance like you don't want to be all all gimmick all the time but uh you need a little bit of style and a little bit of substance.
2:18:54
You need some >> we got to talk about uh we we needed clearly needed an hour 90 minutes.
2:18:59
I know I don't know if you're we got to talk about uh some of your guys' new releases.
2:19:04
the chip uh and some of the new technical decisions that you guys are making around self-driving. >> Sure. Yeah. Sure. Yeah.
2:19:11
So, last week we actually finally announced it.
2:19:14
Amazingly, it didn't leak.
2:19:14
We've been working on this since 2020, early 2022, >> but we um we've rearchitected our whole self-driving platform around what we call an end toend train model.
2:19:24
So the model is using the millions and millions of miles that are being accumulated uh through our deployed fleet of our Gen 2 vehicles which launched a little more than a year ago to build effectively a neural net or a foundation model for how to drive. >> Mhm.
2:19:39
>> And on our Gen 2 hardware stack, it's it's um it's using an Nvidia platform.
2:19:44
It's got around 200 tops of compute.
2:19:47
We've got 55 megapixels of cameras.
2:19:47
uh nice array of radars, but it's a great platform for for building a data flywheel and for delivering ultimately this will be able to deliver pointto-oint uh you know autonomy.
2:19:59
So you can put the address in the vehicle drive there.
2:20:01
But to get to higher levels of autonomy, we've developed an in-house processor.
2:20:08
>> Boy, look at that timing.
2:20:08
You guys did that perfectly in that video.
2:20:09
Um but the in-house processor is a it's a significant step up. So it's a 800 tops. Mhm.
2:20:17
>> It's got 35 billion transistors uh on the silicon.
2:20:20
Uh the neural net's capable of processing 5 billion pixels per second.
2:20:26
>> Uh so this is like an incredibly powerful platform and we brought it in house just to given the importance of vision.
2:20:33
This is a vision based robot. >> Yeah.
2:20:35
>> The the vehicle, but we have other things we're doing in the vision- based robotic space as well.
2:20:39
And so >> we came to the view that having our own inference was going to be really valuable. >> Yeah.
2:20:44
But it, you know, it took it took, you know, the better part of almost four years to build the team, develop it.
2:20:48
You these are things that take a tremendous amount of capital.
2:20:54
>> Uh we're working with TSMC on making it, >> but um yes, we're excited about that.
2:20:58
And then we also include upgraded cameras and we have a new light arm >> which is a another sensing modality that sits at the top of the windshield which will help us raise the the capability of the vehicle ultimately to what we call level four which is think of it as the vehicle can operate empty uh or without anybody in the driver's seat.
2:21:15
So it could like pick your kids up from school or >> you know drop you at the airport u these kinds of things. >> Is LAR dangerous?
2:21:22
I was telling Jordy that there was a lidar system that uh if you pointed your phone at it, it would damage the phone.
2:21:30
And of course, you know, he said, "Well, if it's damaging the phone, can't be good for your eyes."
2:21:36
How do you tell customers that uh okay, our LAR safe?
2:21:39
Like what what are the what are the parameters to optimize around?
2:21:45
>> Yeah, I mean that that was just uh that was a poorly designed LAR system that was doing that. This lighter is Yeah.
2:21:52
They don't burn out your phones.
2:21:52
I certainly don't burn out your eyes. >> Yeah. Okay.
2:21:56
>> As you're Boy, this is great.
2:21:56
You showing the image here.
2:21:57
So, I mean, the beauty of something LAR is we can use the LAR and the radar array to help train our cameras because again, this is a this is think of this as we're building a brain.
2:22:07
We're building a neural net on driving the vehicle.
2:22:08
And it has the ability to see very very far distances much further than the human eye or a camera could see but also um uh see in perfectly dark conditions or perfectly bright conditions.
2:22:21
So >> and and it imagine it helps with weather like extreme weather as well. >> Yeah.
2:22:28
Well, the the radar does particularly well where you have uh optical occlusion. Yeah.
2:22:33
Like heavy fog or heavy rain or snow. >> Sure.
2:22:37
Um and then the LAR does need line of sight because it is a laser.
2:22:39
So the LAR is very helpful for training the cameras and and training them the radar system. >> Yeah.
2:22:46
>> But it's uh but it's also very helpful for long range >> is uh uh is so I mean it seems like you've solved the inference problem like you're like the vehicle is ready to rock.
2:22:58
Um are you worried about or is it is it a challenge to like accumulate enough data?
2:23:04
Are you getting enough data off the current fleet uh that you feel like you're competitive there?
2:23:09
Uh are you GPU rich or GPU poor in the in the training phase?
2:23:15
Are there are is it is it about the algorithms like do you need more AI researchers like what is the most uh what is the rate limiting factor to actually delivering like something really top-notch? >> Yeah.
2:23:28
So so I mean the first is building this when you say data flywheel. >> Yeah.
2:23:33
every vehicle that we every gen two so we launched in end of 2021 and that was what we called our gen one vehicle. >> Yeah.
2:23:40
>> In the summer of 2024 we updated it with a complete new set of hardware under the skin but really most importantly changed the self-driving platform >> and that that's the beginning of this data accumulation platform.
2:23:51
And what this is being used for is there's a whole host of trigger events that we identify interesting or or important information from the vehicles that are driving. >> Yep.
2:24:03
>> That get sent back up through the cloud and then we process them as you said on a large um you know a large pool of of GPUs. >> Yeah.
2:24:12
And you know this is you we're talking like many thousands of GPUs um you know enormous amount of investment in GPU spend here but um but ultimately that's being used to train the model and so then we create this very large model that runs offline and then we distill it into something that's a little bit tighter >> and smaller that runs real time in the vehicle on inference.
2:24:35
And the beauty of expanding the inference capability with our Gen 3 platform is it allows us to run bigger models.
2:24:42
>> And so as the the model becomes larger and larger to understand all the nuances and sort of in intricacies of driving uh the need to compress that to run real time you know I should say the ceiling of what it can run and therefore the need to compress it is reduced.
2:24:57
We don't have to compress it as much. >> Sure. Sure. Yeah. That makes sense.
2:25:01
>> So but this is this is by far biggest investment category.
2:25:04
Uh it's been interesting because we've when we first launched a lot of the investment was going into like the fundamentals of the business of ECUs base software high voltage architectures things like DCDC converters all this stuff to make the car real >> now those platforms are pretty stable and we're now shifting a lot of those R&D dollars are going really almost you know entirely towards uh AI and our self-driving platform. >> Yeah.
2:25:32
Uh you saw Luminar went bankrupt today.
2:25:37
>> Uh what what do you think happens with that asset with their technology uh from here?
2:25:43
Do do you think there's uh do you think there's I I imagine uh there's a number I can imagine a number of different types of businesses that would uh be interested in in the technology and what they built, but uh what's what's your read? Uh, get it.
2:26:00
It's hard for me to comment.
2:26:02
I It's It's not something we're looking at, but you know, I can't I can't comment on others.
2:26:07
It Yeah, >> there may be folks out there looking to buy it out of bankruptcy. I don't know. >> Yeah, we'll see. >> Convertibles.
2:26:16
>> Are we You're selling my dad.
2:26:16
My dad really wants a convertible, maybe.
2:26:20
>> Are we doing No, I mean, uh, it correct me if I'm wrong.
2:26:22
The number one bestselling convertible in the United States, Jeep Wrangler.
2:26:30
Yeah, Jeep Wrangler is very popular. >> Is it possible?
2:26:33
>> So, why don't we do it? >> Why don't you do it?
2:26:36
>> So, it's so funny you ask this because we I I don't think I've ever said this before. Why not say it here?
2:26:41
We um on R1, we had a version of the roof that was removable early on >> and we actually toled it and we decided not to launch it because it was just a lot of complexity. >> Yeah.
2:26:52
Um, but in the fullness of time, at some point in Rivian's life, I'd love to have a version that has a top come off.
2:26:59
If nothing else, just so that my dad will be satisfied. >> Amazing.
2:27:05
>> I'll I'll buy I'll buy I'll buy one, too. I'll buy one, too. >> Confirmed.
2:27:09
Within the long arc of history, we are we are launching a convertible.
2:27:12
Uh, no, thank you so much for coming on the show.
2:27:15
I'm excited to see like how you guys would approach uh the removable top to do it in a very uh >> I I I don't like a lot of convertible design specifically, but I if you guys were thinking about it and saying like, well, what's the actual technology we have today?
2:27:32
What's the best way to make it?
2:27:33
So, anyways, this was a super fun conversation.
2:27:35
Uh and please come on again soon.
2:27:39
>> Uh we'll definitely reach out and and uh have your team reach out as well if if whenever you have news. >> Yeah.
2:27:44
Thanks so much for hopping on. This is a lot of fun. We'll talk to you soon. Cheers everyone. >> Goodbye.
2:27:51
>> Let me tell you about profound get your brand mentioned in chat GBT.
2:27:53
Reach millions of consumers who use pro who use AI to discover new products and brands.
2:28:00
Um let me also tell you about this post from Nihilism Disrespector who says, "So is the US economic plan really just build the machine God?"
2:28:08
Tyler, what do you think?
2:28:10
Is the US's current economic plan >> really just build the machine god?
2:28:18
>> Yes, >> I I would agree. I think it is.
2:28:19
I think that that is basically the plan.
2:28:21
Um >> we need to nationalize the labs. >> National or not?
2:28:26
>> Why why are we nationalizing the labs?
2:28:29
>> That's the only way we can get we can marshall the the capital soon enough. It seems easy right now.
2:28:33
Everyone's like, "Oh, it's so you know, you can raise so easily.
2:28:36
Give me three years when you need 10 trillion >> or even what is it?
2:28:40
>> The10 trillion dollar training run is$10 trillion cluster.
2:28:42
There's only a couple ways you can get that. >> Yeah, I don't know.
2:28:45
I feel like there's a way that the government can can foot the bill.
2:28:49
Well, well, not fully nationalizing, right? There's got to be a way.
2:28:53
>> Yeah, but I mean certainly, you know, maybe not nationalized, but there's a lot of ways where it's like it probably does make sense in some sense to to to uh subsidize Intel, stuff like that. >> Well, react to this.
2:29:02
The fact that Sergey Karayv Karv says it's the annual reminder the years left to escape the permanent underclass. It was infinity in 2020.
2:29:12
It was infinity years to escape the permanent underclass in 2021.
2:29:15
And for the last four years, it's been exactly two years to escape the permanent underclass.
2:29:20
Feels like uh this AI thing isn't isn't actually creating a permanent underclass like it was supposed to.
2:29:28
>> Just two more years, bro.
2:29:28
Then something different. Yeah. >> Just two more years.
2:29:31
Uh anyway, let me tell you about turbo puffer serverless vector and full text search built from first principles on object storage fast 10x cheaper and extremely scalable.
2:29:43
>> Okay, so John actually I had a question.
2:29:44
Um so so >> I'm always curious like it seems like in self-driving there's like Tesla and then there's KA >> and I think of those as kind of the leaders, right? Yes.
2:29:54
>> But uh you know Kama there's like the open source, there's open pilot. >> Yes.
2:29:57
So why it seems like there just aren't that many manufacturers that are that are using open pilot.
2:30:01
Is there like a reason are they is it like George hot just like hates big manufacturers and he wants to keep it >> well so so I mean I'm not exactly sure the open source license I imagine that the open source license says you can't resell this.
2:30:15
Now the question is if you bake it into a car I would imagine most most companies like Tesla sells self-driving as an upsell.
2:30:22
So, you buy a Tesla, it doesn't just give you the Tesla full self-driving system for free.
2:30:30
You have to pay an upgrade.
2:30:30
I would imagine that Rivian matches that pricing model eventually.
2:30:33
Uh, and so if you build on open source software that says you can reuse it, you can you can use this open source software, but you cannot sell it.
2:30:42
Uh, I believe that isn't that the Apache license?
2:30:44
Um, yeah, >> there's a few different licenses.
2:30:47
One, uh, there's I think MIT license you can do whatever you want with.
2:30:51
Um, but there's one license that says you you you can use it, but you can't resell it and >> not for commercial use. >> Exactly. Exactly. Uh, yeah.
2:30:59
Like the license transfers down the chain and so if you're giving it away, you have to get uh if they give it to you, you you have to give it to your customer.
2:31:07
So you can't monetize that way. So there there's that.
2:31:11
There's also the possibility, again, this is just off the top of my head, but uh I I would imagine that the is it the NHTSA, the National uh Highway Transport Authority, uh I believe that if it's coming from an OEM, from a vehicle manufacturer, and it's making claims about this is a level two system, the level three system, you can take your eyes off the road, you can take your hands off the wheel.
2:31:36
that probably has to go through a certification that comma doesn't necessarily have to go through the certification for.
2:31:41
So you're in this scenario where if you're effectively white labeling comma maybe you don't like you're you would be subject to more a higher level of regulation because you're not a third-party product.
2:31:51
So I would imagine that you still like take a peek at the open at the open pilot repo and see how they're doing it.
2:32:00
Uh but then ultimately you go and build your own sort of proprietary stack. >> Yeah.
2:32:05
I guess also for I mean Rivian they're they're using lidar so it's like just not compatible. >> Yeah. Yeah.
2:32:10
Riv uh lidar also just like way more cameras too like the the open pilot system is built on two cameras on the on the front of the device and then one on the on the back that looks at the the driver's face.
2:32:23
And so you have a you have a wide angle and then sort of a telephoto that will show you the road far away and then the full surroundings.
2:32:32
But, uh, most cars, Tesla, I'm sure the Rivian, uh, will typically have cameras on both, uh, both side mirrors.
2:32:39
They'll also have cameras on the back, cameras, you know, the multiple on the front.
2:32:45
So, you just get way more data.
2:32:47
And that's why I think he was pushing this concept of like we're like the the autonomy compute module 3, ACM3, is capable of processing five billion pixels per second.
2:32:59
It's like why do you need so many pixels?
2:33:00
because you have multiple cameras that are feeding you 30 frames a second, 60 frames a second.
2:33:04
Um, and so you need to be processing all of that.
2:33:08
Whereas Open Pilot's not designed for a camera that's mounted on the bumper because it doesn't have a wire that goes to the bumper.
2:33:14
It's just a phone that's stuck to the windshield effectively. >> Uh, one more note.
2:33:19
Uh, I believe Riven uses Luminar as a supplier. >> Oh, interesting.
2:33:24
And so hence why he couldn't >> he couldn't comment but he said he wasn't looking at buying which is crazy >> which is but I mean they supply they might be using a different one >> going forward >> who knows but they just made that announcement so potentially but I'm but I'm sure they have a variety of vendors that they're speaking with but >> interesting.
2:33:43
Oh well well let me tell you about graphite.
2:33:45
dev code review for the age of AI.
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2:33:51
Um, how did you sleep last night?
2:33:54
Did you Are Are you back in the game fully?
2:33:56
Holiday season's upon us. >> I slept.
2:34:00
>> Holiday parties are here. >> Brutal. >> I got a 93 though. Caught up. Saturday was rough.
2:34:04
The The holiday party came came through. I made it out with a 69. Not good. >> Avoid them.
2:34:10
Avoid the VC holiday party entirely.
2:34:12
If you care about your sleep, go to aidsleep. com.
2:34:14
Exceptional sleep without exception. >> I got a 54.
2:34:18
>> 54 on the night of the VC holiday party. Rough.
2:34:23
Uh, fall asleep faster, sleep deeper, wake up energized at8 asleep. com.
2:34:25
Um, well, we have our next guest in the reream waiting room, Scott Kapor. Ho ho ho. Merry Christmas, Scott. How are you doing? Great to see you again.
2:34:37
Thanks so much for hopping back on the show.
2:34:39
>> I I did not wear my elf outfit for today, but uh >> No.
2:34:43
Uh we we were we were this just to do a little inside baseball.
2:34:47
We were this close to putting on full Santa suits and then the team said, you know, we're we're we're talking to a you know, US government official.
2:34:57
>> You guys say I thought I thought I was being aggressive.
2:34:59
I went sand's jacket today.
2:35:00
I'm like I took my >> Very very casual. Very casual.
2:35:02
But you're a serious guy. You're a serious guy. So >> yeah. Yeah. Yeah.
2:35:07
So So So you're bridging the gap.
2:35:09
Uh anyway, give us uh give us an update on what's new in your world. >> Yeah.
2:35:14
So, we just announced a really exciting new program today that I'd love to tell you and your listeners about course.
2:35:19
Uh it's called US Tech Force. Yes.
2:35:21
Uh so, this is >> All right.
2:35:24
This is a two two-year program where we are recruiting a thousand engineers, product managers, data scientists, AI specialists into government.
2:35:33
You'll work in government for two years.
2:35:34
Uh literally every agency in the government basically is participating in this.
2:35:38
So if you want to work at department of war or health and human services or state department or IRS whatever you want to do like we've got opportunities and the whole idea is how do we modernize the entire you know federal government infrastructure.
2:35:49
So we've got a real challenge in government number one is just obviously we need more smart people who've got like modern software development modern AI expertise and then we're also really have not done a good job of recruiting early career people.
2:36:01
So uh if you look at kind of people earlier in their career only about 7% of the federal workforce is early career >> and at all the companies all the companies that you guys you know talk to on a daily basis I bet you that number is like 25 or 30%.
2:36:12
So we are by at least a factor of 3 to one in a real world of hurt in terms of being able to recruit and retain uh early career people.
2:36:21
>> So this is a two-year program.
2:36:21
We're doing this in partnership with about 25 of the tech companies that you all know and love.
2:36:27
So, you know, Coinbase, Robin Hood, uh, Data Brick, Snowflake, uh, Nvidia, XAI, Open AAI, and what those companies are doing is they're going to help us kind of create a program around this.
2:36:38
So, in addition to working in your day job in government, we will have a speaker series uh, with, you know, we'll get Sam Alman to come, you know, talk to you and tell you about what it's like to work at OpenAI.
2:36:46
We're going to do career development, and then at the end of the two years, uh, these private companies have all agreed to kind of participate in a job fair where we're going to showcase all the work that these guys are done. And you know what?
2:36:56
If you want to go in the private sector, God bless you. Go do that.
2:36:59
If you want to stay in government, we'll find a job for you.
2:37:02
But we're not asking you to make a 40-year commitment.
2:37:03
We're asking people to do, you know, do good for their country for two years, solve some of the world's biggest and toughest problems, and then uh we will gladly help you in terms of your private sector career opportunities.
2:37:14
>> Uh a thousand people, how uh assuming this goes well, it feels, you know, extremely critical in this moment.
2:37:20
Is this something you want to like 10x, you know, for the next uh two-year period?
2:37:27
Where where does this go? >> Yeah.
2:37:29
No, you're absolutely right.
2:37:29
So, I think there's two big opportunities here.
2:37:31
One is just look, there's way more demand than uh for a thousand engineers and government.
2:37:35
So, yes, if this is 5,000 10,000, I think we'll still be barely scratching the surface of what the needs are.
2:37:40
And then more importantly, what we're trying to do is we're trying to do a more efficient way of hiring by centralizing a lot of the hiring.
2:37:47
So, at at my department, OPM, we're going to do all the outbound recruitment.
2:37:50
We're going to do all the initial screening.
2:37:52
We're going to do all the initial assessments for people.
2:37:53
And then we're going to hand the agencies a list of, you know, here's a thousand people who have passed like the technical qualifications you told us were necessary for the job.
2:38:01
Now, you all quite frankly compete against one another and convince these people why they should work at HHS versus Department of War or others.
2:38:07
And if this works, I think this is going to be a model for how we do kind of centralized hiring going forward in the government.
2:38:14
So, we hire a ton of program managers, HR people, financial analysts.
2:38:16
Like there's no reason why an applicant should have to know that 40 different agencies are hiring for a program manager.
2:38:23
All that person should need to know is like my skills are in demand by the US government.
2:38:27
I'm going to centrally apply to this uh to OPM and then my resume is going to basically get circulated to all the interested agencies and then you know I basically kind of have my pick of the litter of figuring out which one is best aligned with my career objectives. >> Okay.
2:38:41
um walk me through how um how someone in one of these roles in part of the tech force could actually have an impact.
2:38:50
I >> uh I worked at the Census Bureau maybe 15 years ago. >> Uh yeah.
2:38:56
And and I would I I would have been like a tech force person like I came in and they gave me a like a stack of papers and a pencil and they were like we do stuff on pen and paper here.
2:39:06
And I was clear, John worked his way to managing a team of like a hundred people very quickly as a college student.
2:39:11
So it was very it was a very funny story. He made the most of it.
2:39:15
>> But but but we but our job was to go around on a map and and and interview people in different houses.
2:39:19
I was like, we should use Google Maps.
2:39:20
Google just put all of the put all the addresses that you need to go to into Google Maps and then you know exactly where you need to go that day.
2:39:27
Uh and of course they were like, no, no, no. We don't have a deal. >> That's her child. >> Exactly. Exactly.
2:39:33
So like I didn't necessarily have the authority to just tell the entire you know organization to say hey we're using Google now also there's probably some sort of privacy thing there's a whole bunch of reasons why you know you can't just fire it up but how how do you how do you empower like the tech force folks to actually have like a positive impact that like reverberates throughout the organization. >> Yeah.
2:39:55
>> Yeah. So you are 100% right and this is why a lot of these programs traditionally have not accomplished what we'd hope they'd accomplish because what happens is >> someone like you a smart guy let's assume that for a second right a smart guy a smart guy gets dropped into the blob that is the US government basically right and so you're right like you will
2:40:10
just you basically have no authority you have no ability to get things done so what we're doing here is there's two critical differences we're doing here number one is >> if you are one of these thousand folks you are going to go over as a team to an agency so I can just I'll give you an example uh you know for example at IRS, you know, they probably could hire several hundred of these people. I don't
2:40:27
I don't know, you know, uh, so there going to be several hundred people who will be part of this team.
2:40:31
So, number one, you're going to be part of that group.
2:40:33
Number two, as I mentioned, we're going to create a programmatic piece around this.
2:40:38
So, your buddies who are at HHS or your buddies who are at State Department, you're going to see them, you know, once a month, twice a month at a speaker series, at dinners and stuff like that.
2:40:46
So, you're going to get real good networking across colonization.
2:40:48
And then thirdly, to avoid the problem you're talking about is we're not going to drop you into the blob.
2:40:53
We're basically going to have you as a full unit at uh basically reporting into kind of you know senior political leadership in those organizations and they're going to decide what you do.
2:41:02
So you're not going to come in here and like manage a contractor which is unfortunately you know a lot of what does happen inside these organizations but we're going to create basically a separate team that can do a lot of the bespoke development that has cover from the most senior political people in the organization.
2:41:16
So you're totally right and your experience is not unusual by the way.
2:41:19
That's that's a lot of what I've heard from people as we try to figure out what to do.
2:41:22
And so our hope is that by combination of those things we can avoid that problem cuz look for this to work like what I'm trying to test is two things.
2:41:30
One is like you know can we actually solve the modernization problem in government which I'm quite convinced with smart people we can.
2:41:35
And then two is we demonstrate that the work you do here is valuable not just to the government but valuable to the private sector such that if you want to go get a private sector job the private sector looks at what you did and says wow like those skills are generalizable uh to whatever Google Facebook you know Coinbase you name your favorite company uh and so we've got to make sure that the people here are successful.
2:41:55
What do what do you think are the most uh overlooked agencies, interesting kind of corners of the government that are uh going to be hiring through tech force?
2:42:04
I think we've I I think uh uh uh the guy from Gumroad, I saw him, he's at the IRS.
2:42:12
>> Uh we've seen Doge people over at the Treasury.
2:42:16
>> Uh but but what are some kind of overlooked opportunities? Yeah.
2:42:20
So there's real I mean so like there are really good people quite frankly across the board but yes look the obvious ones of course are department of war.
2:42:27
You know it's really cool to do drone stuff and that's awesome and some people want to do that but you know like Interior is doing a bunch of actually very cool stuff. Um >> uh energy.
2:42:36
So if you're interested in energy u you know they're doing a bunch of like supercomputer like stuff to basically you know make sure that uh they can have you know like quantum computing work and stuff like that.
2:42:46
They've got to solve like the broad energy grid problems. That's pretty cool. um you know CMS so Dr.
2:42:49
Oz over at CMS is trying to redesign kind of how consumers interact with CMS.
2:42:55
So uh you know something like for example an integrated position directory which I know sounds like very common place these days but like that doesn't exist.
2:43:02
days but like that doesn't exist. So there's kind of a combination of what I would call like backend infrastructure stuff and then the other part of this that's going to be really cool is you know uh my friend and yours I think you
2:43:11
guys know Joe Jebia who's one of the co-founders of Airbnb >> who's been sitting literally just behind me in the office here at OPM helping us redesign our retirement services application he's now starting this whole thing called uh design for America right
2:43:24
which is basically this very broad uh like uh you know designoriented relook at all the applications that are customerf facing in government so you can think of this also as an opport opportunity to take the work he's doing on the front end coupled with a lot of
2:43:36
the modernization stuff that has to happen on the back end uh and uh you know collectively I think we can really transform kind of the way government services are delivered and you know quite frankly provide a much better service to the American people. >> Fantastic. >> Fantastic. >> Very very cool.
2:43:48
>> Where can people go to get started?
2:43:48
Is there just a a web form to apply? >> Yes, there is. Yes.
2:43:52
It turns out we have a web form.
2:43:54
So >> you you can go designed by Joe himself. >> By Gabia. >> Exactly.
2:44:00
Actually, that's exactly >> There we go.
2:44:04
>> By the way, it's I've just learned it's Jebia, not Jebia.
2:44:06
So, unless he's pulling unless he's pulling a fast one on me, we >> we have to correct our pronunciation.
2:44:14
>> Joe, where So, you go to uh Techforce uh you can go to either US Techforce, which is our exhandle, or you can go to techforce. gov. Cool.
2:44:25
>> Or you can go to my Twitter, skupo.
2:44:25
All those places will point you to the right one.
2:44:29
Uh apply Tell your friends, tell your family.
2:44:32
This will be a great like uh dinner conversation over the Christmas table to say that, you know, you're now coming out of the closet uh in terms of working in the basement and you're ready to ready to kind of uh get a real job. >> I love it.
2:44:44
>> Uh I'm very I'm very excited about this.
2:44:46
I mean, I I can see I'm I'm excited for people like all over the career kind of spectrum, people that have done 20 years in in industry and see an opportunity to come back and serve the country in this way.
2:45:00
>> And in the future, young people coming out of college that are highly motivated, have a skill set and and can apply it in a and you know, across uh all these different touch points. So, very exciting.
2:45:12
>> Well, thank you so much.
2:45:14
>> Thank you guys so much. Yeah.
2:45:14
Have a great holiday season.
2:45:16
>> Yeah, great to get merry Christmas. We'll talk to you soon. Goodbye.
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>> Get your Put a billboard under the Christmas tree or at least a credit for a billboard. >> Yes, absolutely.
2:45:54
Well, uh we have our next guests uh Colin and Samir from of course the Colin and Samir show.
2:46:00
Uh living legends to the show.
2:46:03
They're going to come and sit down here. Good to see you guys. Welcome. Welcome live. >> How are you?
2:46:11
Good to see you in the Ultra Dome. Good to see you. How you doing?
2:46:16
>> Um, >> great to have you guys in person. >> Yeah, man. >> Finally.
2:46:20
>> Can I raise this cuz everyone just became very aware of my height when you shook my hand. >> How do I person here?
2:46:28
>> I have the worst brain. I sit high.
2:46:29
>> This is I look like I'm under the desk right now. How do I raise you guys? Do you lean back? >> Stay off the line. >> Stay on the tight. >> Stay on the tight. Stay on the tight. >> You read my rider. >> Yeah. I know. I know. But look, we're working.
2:46:42
For a while, that wide was a 15 mm or something, and it looked insane.
2:46:45
I looked way bigger than the ghost.
2:46:48
Now, it's like evening out.
2:46:50
>> What an incredible holiday vibe here, guys. >> Look at this. Look at this signed.
2:46:55
>> We got We got a signed uh holiday event. >> Wow.
2:46:58
That's going straight to the top. Straight to the top.
2:47:01
>> We were very very close to being uh in full Santa suits. I had >> Christmas week. He fell for me.
2:47:06
He's of course >> with the belts.
2:47:10
>> I think we will be >> with the bells on the sho.
2:47:12
>> I do think we will be doing uh the the same outfits uh tomorrow.
2:47:16
>> This is maybe the last time we wear suits this year. >> Maybe. Maybe. Maybe. >> Rest is anyway.
2:47:20
It's been it's been a wild year for us.
2:47:22
Been a wild year for you.
2:47:23
Uh what what have been the standout moments uh for you this year as you look back on it as uh as two creators?
2:47:28
I actually think we're in a standout moment right now in everything that's happening with Netflix and and Warner and like the conversation around that >> I actually think has a lot to do with with YouTube creators and what has happened with YouTube and I think between that and then what we just saw with Disney and and Sora I think these are two topics that we it's worth getting into and giving our perspective as creators of what's >> happening.
2:47:53
I feel like the notable thing is in all the antitrust debate and conversation, everyone's like, "Look, look at YouTube.
2:47:59
Look at all that watch time.
2:48:01
Look at all that watch time." >> Do you buy that?
2:48:03
Do you buy the YouTube like like because there is a narrative in Hollywood that Warner Brothers and Netflix are too powerful together. It's too crazy.
2:48:12
And then a lot of people are saying, "Hey, YouTube's like running away with the whole game. This is a sideshow."
2:48:17
Um, where do you stand on it? >> Yeah.
2:48:20
I mean, look, Greg, Greg Peter said that as a quote just, right, that like even if you put these two together, it's still smaller than YouTube, which is such an interesting justification >> of why the deal should go through.
2:48:29
But I think the reality is like Neil Moan was just named Time CEO of the year.
2:48:33
And I think >> his positioning and what YouTube has done really well, two guys who've been on the platform for 15 years, his positioning is they build the best stage.
2:48:44
You essentially evaluate it like an open mic night for the internet.
2:48:47
It's just anyone can go on there and see.
2:48:49
You literally don't know.
2:48:52
We don't know if like the greatest piece of content could be uploaded today. YouTube has no idea.
2:49:00
>> And I don't think you can compete with that.
2:49:02
The fact that they don't pay for content. >> Yeah.
2:49:05
>> The fact that people will upload with the chance of getting distribution >> and not even looking for the economics. The economics are there.
2:49:12
Like if you can create content obviously that gets millions of views like there are many ways to monetize but >> that's pretty dangerous in a good way for YouTube to sit in that place where like someone can just there's a guy who spent two years making a documentary about bird watching. >> Yeah.
2:49:28
>> And was like I'll just put it on YouTube for free and it's incredible. >> Wait, who is this?
2:49:31
>> His name's Owen Riser.
2:49:31
It's an amazing documentary. It's called Listers.
2:49:33
It's It has like almost three million views now.
2:49:37
And >> he didn't know how he wanted to monetize it.
2:49:40
He had offers from streamers but just didn't want to do it.
2:49:42
Yeah, >> put it on YouTube and put his link in the description.
2:49:48
>> And he in the time we talked to him, which was like 2 3 weeks after he put out the dock, he had been Venmoed $75,000. Incredible. >> That's amazing.
2:49:56
>> Which is unbelievable.
2:49:56
But like that that this model of just kind of like I I don't think we talk enough about the fact that you can just upload a video or what we're doing right now is just being is just live. Yeah. >> Right.
2:50:08
And like to do that 20 years ago was impossible. >> Yeah.
2:50:11
And so I I think it's going to be really challenging when you're Netflix and you're, you know, spending money on something like Stranger Things and like you're you're placing a bet you're placing a bet that you think the audience will like it based on historical data or based on packaging actors and like old school Hollywood, you know, technique.
2:50:28
Whereas YouTube's like, yeah, like I think you'll like this and if you don't, I'll just get data to figure out what you'll like next.
2:50:36
Well, and I think that's why that's why Netflix and Paramount value this IP at to such an extreme degree because that's the one thing I feel like YouTube hasn't done because like creating really valuable IP I think takes decades.
2:50:50
Like you have to build it up.
2:50:52
>> It seems like no amount of money can just create a new Superman or a new Spider-Man.
2:50:57
Spider-Man. And it feels like we would have gotten that out of YouTube just the broad economic forces or we certainly would have gotten it out of Netflix and we have it a little bit with Squid Game and Stranger Things to your point, but >> it just with all the tech money, all the money, there's so much of incentive, but
2:51:12
there's just no shortcut for okay, this has been my my dad watched this and I watched it with my dad and then I watched it with my kids and like I'm going when I think about YouTube IP, I think of like Miss Rachel, which is like I I think at some point she could trade herself out and and have an actor like >> I think about Dude Perfect and Good Mythical Morning. Yeah. Yeah.
2:51:36
>> So Rhett and Link with Good Mythical Morning.
2:51:38
They're on 3,000 episodes right now of a morning show that people have grown up on.
2:51:42
It's been around for you near two decades now. Like it's daily.
2:51:44
I think there's there's a lot of value to what they've built.
2:51:49
They've built like a big company with writers and like they could e either someone else could take over that show or they can sell this catalog of relatively evergreen content.
2:51:59
Dude Perfect is expanding right now.
2:52:01
They've been around also for almost two decades.
2:52:02
They just launched Dude Perfect Outdoors.
2:52:04
They launched a new podcast.
2:52:06
Like >> they can expand that universe uh pretty well.
2:52:09
So I do think like really good IP is building on YouTube.
2:52:12
It's all going to take time.
2:52:13
But again, the amazing thing about the platform that is YouTube is that, you know, >> I guess the question is like like you you pointed this out to me the first time you were on the show was that uh there are there are I forget exactly the stat, but it was something like like there's a ton of uh young kids where their favorite person is someone no one else knows.
2:52:34
And it's sort of a referendum on like the Nimell phenomenon that you can be niche huge in that niche like you are getting stopped for a signature by that fan or >> never heard of them >> like like you know just a bunch of people that are like never >> I mean the four of us could walk down the street here. >> Exactly.
2:52:51
>> And there could be people who are like holy it's John Jordan >> and then have to explain who everything about what you do to the next person.
2:52:57
>> The opposite can happen.
2:52:58
>> Whereas that's not true for Spider-Man.
2:52:59
That's not true for Star Wars.
2:52:59
There's certain things that have broken through too.
2:53:01
It's it's household name level. And I think Mr.
2:53:04
Beast has done that for sure.
2:53:06
Um, Dude Perfect, yes, to some degree, but it just feels like it's a function.
2:53:12
It's not saying that it can't happen.
2:53:14
It's just a function of time more than money or anything else.
2:53:16
And I think if Dude Perfect 20 years, super impressive, incredible, >> but it takes 50 to be a 50 year old property.
2:53:25
Like there's just no uh we had the acquired guys on the show and and we were talking about like why should we ring the gong for you? What is it?
2:53:30
And and the metric that I was the most like envious of was uh they've been doing it for 10 years. Yeah.
2:53:36
And it's like it's like >> Yeah.
2:53:37
I wonder I wonder if it's actually a function of you need like three generations to grow up on the content in order for it to be durable IP. >> That is true.
2:53:47
We're just getting to the point where there are creators like Retin Link or Dude Perfect that are are going towards 20 years. >> Yeah. Right.
2:53:54
So, we're seeing these creators do this for the first time. >> Totally.
2:53:57
>> Well, I think on this like on the point of Netflix, YouTube, Warner, like we'll see what happens.
2:54:01
But I do think it's interesting that Netflix in order to compete >> is it needs to acquire a bigger catalog and maybe maybe with what they're doing and they're starting to also offer deals to podcasters. >> Yeah.
2:54:13
At what point at what point do they just open up the platform and say here's an upload button6? >> Yeah.
2:54:19
I whoa >> I think there's going to be a creator program of some sort because even if you >> that's more curated but but >> I've heard you can do that on Amazon Prime.
2:54:27
Prime. I I'm pretty sure if you have a document you can just upload and say goodart I think if you look what Netflix did with Mark Robber massive YouTube creator >> they took his top 10 basically greatest hits from YouTube repackaged them they're on Netflix right now and it was a top 10 show on Netflix number one kids show >> wow
2:54:46
>> they also signed a deal with him to make a new series a reality show >> he also did a Christmas special with Elmo directed by another creator Daniel Thrasher so very cool >> but that shows me that they have an openness to content that I don't think they would have been open to a couple of years ago that maybe they wouldn't have deemed premium enough. >> Sure. Sure. Sure. But I mean, as a >> Sure. Sure. Sure.
2:55:03
But I mean, as a certain point, like just even just the AdSense is if you just took the AdSense from a Mr.
2:55:10
Beast video, like that's enough to go shoot a Hollywood that that is the budget of a Hollywood 20-minute production.
2:55:16
>> The other Yeah, maybe.
2:55:16
I think um it just feels like Jimmy's ad is very different than other people's ads.
2:55:20
different than other people's ads. I think what you guys have probably experienced is sponsorship dollars are >> are going to drive you know the the the majority of productions but uh my my concern with a Netflix and and as they move into podcasting is like their appetite for niche communities >> because they tried this with fitness at
2:55:38
one point they did a partnership with Nike where they were trying to compete essentially with Pelaton they're like maybe people come here to work out the audience was too small and like they don't do well with niche and our world like we just talked about is like >> it's choose your own adventure from a media perspective and YouTube is great at that. Here's here's what points like
2:55:54
Here's here's what points like like taking K-pop Demon Hunters and making it a national conversation, making Squid Game a national conversation.
2:56:02
That's the game thing that uh that Netflix is missing and maybe their opportunity to grow watch time is there's nothing real time on Netflix at all.
2:56:11
So much of the time that I want to watch content, it's like I'll watch some geopolitical like creator on YouTube or I'll watch like what happened F1 commentary reaction, right?
2:56:20
And >> Netflix does has nothing for me if I want to kind of understand what happened in the last 24 or 48 hours, right?
2:56:26
And I just feel like a lot of watch time on the internet is that kind of more real time.
2:56:34
There's like evergreen entertainment content that Netflix is dominant in and YouTube but YouTube has both and so I think that can explain some of the differential.
2:56:44
>> I think this actually it it it the conversation moves nicely into the Disney Sora thing and and largely because >> some >> What was your immediate reaction to the news >> to Disney Sora? Yeah.
2:56:55
>> It's like it was going to happen.
2:56:55
I'm surprised they're the ones who did it.
2:56:59
But I think what what Col and I have been kicking around is like the video gamification of everything where even if you look at prediction markets, right?
2:57:07
So like you guys obviously have a partnership with Poly Market and you look at KI Poly Market like everything is a video game, right?
2:57:12
And if we look at the early origins of YouTube, it was video games.
2:57:16
You look at the early origins of Twitch, it was video games.
2:57:19
And I think our expectation as audience members is that all of our media is interactive. We can play with it.
2:57:23
We can touch and feel it.
2:57:24
And it's only getting increasingly more interactive.
2:57:26
So the Disney Sora conversation especially like as generative AI has come into the picture.
2:57:34
It's like generative AI itself is entertainment.
2:57:36
So me generating images and videos is time I'm spending entertaining myself. Yeah, >> right.
2:57:43
It's not just utility, it's entertainment. >> Yeah.
2:57:45
>> And I think obviously if you have this IP you guys just talked about like takes 50 years to build IP.
2:57:48
Look at Disney's IP, it's hundreds of years.
2:57:52
>> You have this IP, how do you how do you monetize it?
2:57:53
Well, what's really interesting, my assumption, I haven't read into this if this is what's happening, but with Sora, is that if you use one of the 200 characters that's licensed to Sora over the next 3 years, there's likely some fraction, you know, micro payment going back to Disney.
2:58:06
And if it's not, I think that will be the model where essentially, yeah, I'll give you Mickey Mouse.
2:58:12
Just give me like a fraction of a penny every time someone uses Mickey Mouse.
2:58:17
>> Now, like from an audience perspective, it's interactive media.
2:58:19
it's more fun for me to to prompt and generate Mickey Mouse in the context that I want him.
2:58:26
And then for Disney, like they have these this IP that can be generating like very small amounts of money, but you scale that out to like 30 million people using it or 20 million people using it.
2:58:35
It's like >> that gets pretty significant.
2:58:37
>> It's kind of move towards UGC in the same way that Netflix needs to open up a creator model.
2:58:41
Let's open up our IP for a lot of creators.
2:58:44
And like they said, some of it's going to come to Disney Plus. >> Yeah.
2:58:47
I just I I think it's uh I I thought it was smart for a lot of reasons.
2:58:51
I think I I think OpenAI specifically needed some competitive edge around uh I think people were >> Nano Banana has like really broken through.
2:59:01
I have two account I have account I have an account that that I just have free models for the different labs.
2:59:06
So I did the same prompt yesterday with Gemini and Chat GBT for an image generation and Gemini was like 10 seconds.
2:59:13
seconds. chatbt on the free plan takes like I didn't even come back I didn't actually go back and see it but it took like multiple minutes and so having something that uh gives them a reason to drive a bunch of new paid subscriptions I think >> uh and like specifically get the next generation
2:59:31
>> uh Disney products are like a drug for children they're addicted right um and uh and I think it's like adding a personalization layer that didn't really exist for Disney like you go to parks and you could like do a have a meal with a character or whatever and that was personalized or take a picture or something like that. But I
2:59:50
But I think if you're Disney and you're trying to drive more signups to Disney Plus, more retention, more park visits, I think it's actually smart because if you put uh the only thing my three-year-old knows about AI, and he doesn't even call it AI, but he's like make a dino picture.
3:00:06
He just that's like stuck in his head.
3:00:08
uh because it's such a fun experience of like we take a picture, we take a selfie and then we just make it make us look like dinosaurs or whatever. He loves it, right?
3:00:15
So Disney doing that and getting uh you know, I'm sure a lot of people will say this is like terrible and shouldn't happen, but getting a bunch of young people to have that experience of like making a Disney part of their like everyday experience in life, I think is going to be have like powerful downstream effects.
3:00:32
>> I feel like um Sora was a bit of a Napster moment for visuals.
3:00:35
like Sora came out and sort of broke the mold of what we would expect and a lot of people started using the IP anyway and we were like wait like you're supposed to pay for this stuff. >> Yeah. >> Right.
3:00:44
And then like a new model of streaming has emerged and I don't think artists are particularly >> super excited about that model but they've adjusted >> right and I think this is another moment >> where it's like okay the way that we monetize this art has shifted because of technology and it has just happened and Disney in a way is now I think just coming over me like this is already happening.
3:01:04
People are already using our IP in ways we didn't want them to >> on Sora.
3:01:07
So, let's just get involved, >> some control >> and create the new model.
3:01:11
Let's come up with the new model for how we monetize.
3:01:15
>> I actually think even if you look at what you guys are doing with this show, like I I always think about a live show like yours as like your open source.
3:01:21
You're giving open source material to the internet in a way, right?
3:01:23
People can clip this and and play with it and and interact with it and talk about it and retweet it and it's like >> it's it's a playable medium.
3:01:30
And I would assume that there's some some clips of this show that have extremely high viewership that no one in this building made. >> For sure. >> For sure. >> Right.
3:01:41
And so that >> some of the some of the clips with Yeah.
3:01:43
>> the best performing >> if you probably took like individual assets that got the most views, >> probably at least five out of the top 10 were posted by other people that were just >> The most viewed clips of the Colin and Samir show are not made by our team. >> Wow. >> For sure.
3:01:58
If you go on Tik Tok, search Colin Smeir show, you search some other interviews, like they are all clipped by other people in ways that we wouldn't have.
3:02:05
>> Or it's even reframed reframed around your show. It's reframed.
3:02:08
We can't even compete with our own clips, you know?
3:02:11
We tried to be like, "Oh man, that person already put it out.
3:02:15
>> We we tried to compete with the internet for our own clips of our own show and we couldn't compete."
3:02:20
And that's where I think the perspective of like Disney and Sora is like, yeah, >> just like here's material >> content ID type system will come for clips and from AI.
3:02:31
>> I think I think it has to.
3:02:31
I mean, I think I think YouTube has precedent with content ID.
3:02:34
I think um I think we'll all as creators live in the world where we're like, yeah, you can use my the same way that Sora kind of showed it.
3:02:43
It's like, yeah, you can use my face.
3:02:45
But I think there will be there'll have to be a a revenue share model.
3:02:46
to be a a revenue share model. Like I think for this to work properly and maybe nobody cares about this but >> well it's not just revenue so it it's it's like multi-share because it can't just be what it is uh I don't know exactly if it is this way currently but there's the there's the thing about like
3:03:02
I could be using some clips from your show and clips from this show and this but as soon as I put Mariah Care's like you know Christmas song in there like she's getting 100% of the revenue she owns it right uh and there's like only one claimant right now um but there'll need to be like slices where it's your face was on screen for this. >> I don't want to say it, but I'll say it.
3:03:19
>> I don't want to say it, but I'll say it.
3:03:21
It feels like web 3 was starting to get onto this with fractional ownership, right?
3:03:24
Where you can tokenize yourself in a way of like, >> yeah, if this token is used, I receive x%.
3:03:30
>> You may or may not actually need the blockchain underlying, but there's this idea of fractional idea of that where like Grimes gave her voice out, right?
3:03:38
and like it was like a 50/50 rev share if you used her voice.
3:03:41
And like I think that maybe will happen, but I I also think just the internet and like YouTube specifically I think will look pretty different in that not only will we say you can use my IP and my face, but I think you'll take like the full length episode of your guys show or let's say our show and I think you'll just type in, >> you know, I got seven minutes.
3:03:59
Can you just give this to me in seven minutes?
3:04:02
Like you can use their voice and like their style of animation, but just like give me the give me the seven minute version of this.
3:04:07
Yeah, >> I think if you've ever played with Notebook LM, you start to see like how like manufacturing your own entertainment where I could go give me TBN, give me Colin and Samir and give me acquired last episode, but like summarize it all for my 21minute drive. >> Yeah. >> Right.
3:04:25
Connected to Google Maps. It's like >> Yeah.
3:04:27
I'm always I'm always interested in where that lives.
3:04:28
Like does that live in the consumer side or on the platform side or on the creator side?
3:04:33
Because like we literally do that.
3:04:35
We have a 20 20 to 30 minute cut down of the 3-hour show, right?
3:04:41
>> That we cut down, we edit >> diet TV. >> Diet TV.
3:04:43
It's very Yeah, we it's been >> It's so funny because I've seen people create seen other people create like diet versions of their show now.
3:04:52
>> And when when we were first like conceptualizing the show based on people's feedback of like I want the show in 20 30 minutes, >> I was like, "Oh, we'll just call it Diet TVN."
3:05:03
It's like all of all the flavor like like way you know way less calories and John was like diet like does that make does that make any sense?
3:05:10
But >> it is a good >> it's like not an industry term.
3:05:13
It's not an industry term, but no, but it makes it makes more universal sense.
3:05:16
But anyway, I think you'll be able to make your own version of diet, right?
3:05:19
And like >> but you'll have to say yes to that.
3:05:22
And and again, there will have to be some new way of like yes, so long as I'm compensated when that happens.
3:05:29
But if it is >> you, us, you know, Ben and David and you guys in one episode, like >> also the question is who's weighted heavier, >> right? Is it acquired?
3:05:40
They're like the luxury brand of of they're the Rolex of the space. >> Yeah. I don't know. Yeah, it's funny.
3:05:47
>> You may not even have to ask the platform to do it from an audience perspective.
3:05:50
You think the platform just does it?
3:05:51
>> I think at some point, yeah, they're like, "No, we know better than you based off of what you've already told us in your behavior >> potentially."
3:05:57
But what what what what's odd is that the AI models, they're really good at a lot of things, but they they they have not yet been good at clipping.
3:06:04
like like you don't want to go up against the internet, but I would say, you know, if there's five mega viral Colin Samir clips that that you guys didn't clip, they was those were clipped by humans, though. >> Those are humans.
3:06:14
>> Those were not because as soon as someone could do it, they would definitely run, oh yeah, run the prompt over all their content. Let me put it out.
3:06:22
I'll I'll try and monetize.
3:06:23
>> Decent platforms that can get you like 65% of the way there. But yeah, you're right.
3:06:27
The framing >> they're good as tools.
3:06:28
They're good as tools alongside the human, but the editorial it's an editorial thing.
3:06:32
there could be this show generated by AI, right?
3:06:36
Like I'm just saying if you just look at the technology like we could ingest >> news >> and >> figure out how to give it in like an audio >> Yeah.
3:06:46
form contextualized, >> but it's not it's not as fun.
3:06:48
It's like that has no I'm not >> It's also nowhere near as special.
3:06:50
Like there is something very special about what happens here dayto day and like changing and like feeling like you're here in the moment. Yeah.
3:06:58
here in the moment. Yeah. I think to clarify like I if anyone's listening to this being like oh my god there like this is the dystopian world of content like there is no world where I see >> like this your guys show as an example >> is like there is more room for
3:07:14
interesting creative now than ever >> uh if you are thinking about what is this is maybe a bizarre way to put it but what is like a uniquely human format >> uh is it's why we've invested more in live events like we did our first big live event in New York in September and um >> that was with Google, right? >> They were a sponsor. Yeah. And it was >> They were a sponsor. Yeah.
3:07:30
And it was super fun and it was great and there's 500 people in a room and and and I think >> you feel like that is there's going to be a rise in live events for sure.
3:07:39
Obviously, I imagine you guys are going to do some version.
3:07:42
>> You haven't cracked it, but >> you'll do something where people can show up and people will die to show it. Yeah.
3:07:46
Acquired obviously had 6,000 people in the Chase Center.
3:07:48
Like >> I think uh good creative will always win.
3:07:52
But I do think back to the Netflix conversation, the the question is like who is the arbiter of taste in all of this?
3:08:00
>> And I think the old Hollywood uh world is like Hollywood is the arbiter of taste.
3:08:04
We're going to show you what good is.
3:08:06
And Netflix is that, right?
3:08:06
They're going to curate stuff editorially.
3:08:08
I think that still matters.
3:08:10
I don't want to suggest it doesn't matter. I enjoy that.
3:08:13
The other side is that the audience is the the arbiter of taste and the curators of what's good.
3:08:16
And that's the >> I would be I would as a Netflix subscriber, I would be excited for them to have a corner of Netflix that's just history content from independent creators just like effectively like providing >> Johnny Harris. >> Yeah. Stuff like that.
3:08:32
Because I I've been on YouTube uh to fall asleep at night, I can't watch anything tech or business related because it just kind of you prompts a bunch of ideas.
3:08:40
So I have to just like it's got to be like 30 years old.
3:08:44
Like it's got to be like history.
3:08:46
And something I've noticed recently is like there's a bunch of channels getting a lot of views that are getting served in the algorithm uh that are clear and I only clock that it's AI because they'll use images and then there'll be like a talk track >> and there's a bunch of creators that have just nailed this format over the years.
3:09:02
But I'm starting to hear like this battle wasn't just a a fight.
3:09:05
It was it was a turning point in history and like very like clockable as AI.
3:09:10
And so now, like in the same way on Amazon, as a consumer, you're like, >> I just want to buy stuff on Amazon that's from brands that are over 50 years old because then I know that it's I know that it's not like somebody just, >> you know, that's how I feel about Tik Tok shop.
3:09:27
I'm I sometimes will get caught with a product that I'm like, >> hm, maybe I want that, but if it's on Tik Tok shop, I'm like, I don't >> blanket disendorsement of >> Wait, is that not But like, do you guys Tik Tok a sponsor of this or something? No, no, we don't.
3:09:42
We don't even have I don't even have Tik Tok installed.
3:09:47
>> These guys are in deep negotiation with Tik Tok right now.
3:09:51
>> I've never been met with the opposite for that. >> It's the opposite.
3:09:53
I actually hardest dig in this year.
3:09:56
>> No, we're we're bad creators.
3:09:56
We don't have Tik Tok on our phones.
3:09:58
We get some We have one friend that sends us Tik Tok links and I've never watched any of them. >> Not a single one. That's right.
3:10:05
>> Uh I got to we got when Larry comes out and says like I fully control Tik Tok now. It's mine.
3:10:11
I've got it here on my phone. >> I trust it. You can trust it.
3:10:14
Then I'll I'll give it a spin.
3:10:17
>> You know what is you guys don't have Tik Tok so we'll tell you about this.
3:10:18
There is like AI creators now.
3:10:20
And that is very bizarre and dystopian to me because they even me and maybe I'm getting to that age where I'm part of the cohort that can't tell but I can't tell. >> Okay.
3:10:33
And >> oh, so you're not talking about like there is a creator that creates various animals being pulled over at DUI checkpoints and like that's their stick.
3:10:41
>> I'm talking about like an AI generated human >> okay >> creator who looks human.
3:10:44
Okay, >> there's this >> are people in on the joke or >> it's just the pace.
3:10:48
They're not >> they're not the pace and and the the tools really have opened up a world where it is easy to create.
3:10:53
I mean, I've like I've seen these and I've been like, "Let's kill."
3:10:58
>> Is that sort of the biggest is that sort of the biggest trend of of 25, you think?
3:11:02
Or I I I'm super interested like at a more tactical level, what's changing on YouTube?
3:11:06
Like um because obviously we've been through like the 8 minute shift and then the 20 minute shift and and then uh you know like clickbait to like the counter switching to ABD and all the all these different little moments have happened.
3:11:18
Like were there any is is it fair to say that AI is like the biggest the biggest change in 25 or was there another kind of meta shift that you sort of noticed?
3:11:29
>> One that we talk a lot about is the the shift from you know podcast being the meta when you think about the last presidential election to you know obviously like podcast played a major part uh if you look at the amount of podcast appearances and viewership that Trump got versus Kla Harris like it's just >> the graph is unbelievable. >> Yeah.
3:11:47
>> Yeah. I and I had this whole take during the election that it was about watch time too because the crazy thing is is that she not only would she would would come and go on uh like a smaller show with a smaller audience but she would only do a 45minut hit and Trump would be there for 3 hours and I'm like we know
3:12:02
AVD like watch time is important we actually uh clocked and we wrote down how much time and I think for Trump it was like 16 hours available or maybe more and for it was like under two >> and and it's just like as a voter if you want to just sit and be I want five hours of content from this person to make my decision. I'm going to listen to
3:12:20
I'm going to listen to five hours of both and there's not five hours of one. That's a tough cell.
3:12:26
Anyway, that looks extremely real.
3:12:26
That I I would never >> I don't know if I can show a camera.
3:12:31
I don't even know what camera is looking at me right now, but Oh, there you go. >> There you go.
3:12:35
I don't know if you can tell, but like the the Well, so here's the thing that's going to happen is people are people are going to start to realize if this person has didn't post at all before 2025, they're not real because I feel like the this year the models got >> enough in 2019, >> check the early Instagram.
3:12:55
>> My understanding of how things have changed on YouTube >> um is that like if I if I was to zoom back to when I first got on the internet, I think the amazing thing was like it was all information.
3:13:06
We could access information in a crazy way.
3:13:09
Like at least when I was a kid, we would go to like the library and go to the librarian and try and find like a a book about something.
3:13:18
>> And that changed when we could search Ask Jeieves or Google or AOL or Yahoo and like we could just find out things and that was crazy.
3:13:25
>> And I think the information era was capped with the rise of social media and like Facebook specifically.
3:13:30
When Facebook came about, it wasn't just information about the world or fun facts.
3:13:35
It was information about people >> and information about people was like really interesting and and had gossip connected to it and had like voyerism connected to it.
3:13:44
It was just like this fascinating world that mirrored celebrity culture.
3:13:47
And that then ushered in the next era which was the attention era.
3:13:51
And the attention era was kind of brought all the way forward by you know someone like Mr.
3:13:55
someone like Mr. beast Jimmy who was like here's human psychology and here's how these algorithms what they favor what what are the incentives of the internet and let's push that forward and that's like we got to that point with the meta of YouTube being all about information and attention and I think
3:14:11
this next era that we're in and the biggest shift that's happened in YouTube over the past year has been a shift towards perspective information and attention void of perspective is just completely uninteresting >> and I think that that actually wasn't the case you talk about like history YouTubers. We were talking to this car
3:14:25
We were talking to this car creator, James Pumphrey.
3:14:26
He used to work at Donut Media and he was telling us like he could he at Donut they could get a million views of like the entire history of Volkswagen. >> Yeah.
3:14:34
>> But that he can't do that anymore.
3:14:34
He has to add perspective to it.
3:14:36
The title has to be like why or how Volkswagen >> how Volkswagen is cooked. >> Yeah.
3:14:41
Or how Volkswagen turned their back on us, >> right?
3:14:45
And that has perspective suggested.
3:14:46
And I think we can access information now very easily through LLMs, through search, through anything.
3:14:52
We can actually also access like attention driving things.
3:14:55
Meaning like scrolling Tik Tok captures my attention.
3:15:00
I don't think I'll like remember any of it or it just won't matter, but it can fill my need for something to capture my attention with.
3:15:06
But but perspective, I think, is the thing that makes it stick in your brain of like >> I'm coming to these guys to Jordi and John for their perspective.
3:15:15
I can get this information other places.
3:15:17
And so I think we actually saw that quite a bit on YouTube where >> the Mr.
3:15:23
Beastification, the kind of like big idea that drives a ton of attention is like still kind of interesting, but it's not as interesting as it used to be and and someone growth.
3:15:33
>> Someone like Marquez Brownley who does the smartphone awards, you're like dying for his perspective on what was the best phone of the year.
3:15:40
>> And I think he has a lot of longevity because his content is rooted in perspective. >> Yeah.
3:15:45
>> Emily Sunberg's another great example. Like that's perspective.
3:15:47
And so I think perspective has always mattered, but it feels like that era has really been pushed.
3:15:53
>> Using Marquez as an example, do do you think that which which offers more perspective or like waveform podcast, his podcast where he can kind of brief it's unscripted versus a review where he has the requirements to tell you the price, the value, the specs.
3:16:08
uh does he have more a longer leash to give more perspective in the unscripted format or is there an equal amount of perspective because he is who he is and he brings his perspective everywhere.
3:16:23
>> I think Marquez in the face to camera is the is the best perspective of Marquez and people had problems with that like last year with um Humane. >> Oh yeah.
3:16:32
>> People felt like his perspective carried so much weight that it could >> bankrupt a company. >> Same with Fiser. >> Same with Fis. >> Yeah.
3:16:39
the car and it's like >> but I think that also goes to show like how much his perspective matters and how much someone like that.
3:16:46
So >> he's I remember he said he said a bad he told us a bad review doesn't tank a company a bad product tanks a company of course but >> yeah I mean all that to say again like I think if you're >> I would be wearing a humane pin if it were not for the review.
3:17:00
I mean, it it can accelerate a democracy.
3:17:03
>> Even if you look at like even if you look at like Ryan Tran and like his videos, they they lead with like something like a really fun idea of like I stayed in one-star hotels or something, but then his perspective gets layered within 30 seconds on top where he's like his >> his job is to leave a fivestar review at this one place because like he wants to find the good in the world.
3:17:22
And that even that is like perspective. Yeah. >> Right.
3:17:25
And so I think um >> I think POV is like that's the era we're in on the internet.
3:17:29
Like if you're just >> delivering me information and POV can be style. It can be tone.
3:17:34
Like I think you guys are a great example.
3:17:36
There are a lot of people talking about what you're talking about.
3:17:39
They're not talking about it in the style that you're talking about it with the same tone. >> Yeah.
3:17:43
When I think about the Mr.
3:17:43
Beast copycats, I think like there's distinctly a lack of perspective, a lack of view.
3:17:49
It is just like, okay, yes, like if Mr.
3:17:52
piece does this and you clone it and rotate that piece.
3:17:54
Like you have a slight iteration that's enough to get the views, but it wasn't actually something that was like inspired or trying to push.
3:18:02
>> I think you can navigate how to get views right now.
3:18:04
Like you can navigate how to get attention on the internet.
3:18:07
>> If if you study if you study it enough, you know, you can navigate it, but it doesn't mean people will remember you.
3:18:13
>> What's the state of the thumbnail industry, the thumbnail subindustry?
3:18:17
Well, well, on on that note, I feel like there's this emergence of the creator with short form video being so powerful for discovery, >> there's an emergence of a content creator that might have 200,000 followers and no viable business or even path to a viable business because they
3:18:35
have like a bit that they run that's really funny and so they can get attention in a certain audience, but then like the pathway to monetizing it, you see this with like certain kind of accounts on Instagram where it's like your pathway to monetizing is like online casino advertising. Exactly. Uh Exactly.
3:18:50
Uh and so that's kind of like that's kind of like UBI for people that are funny online.
3:18:56
It's just like you can >> that is a hilarious that's unbelievable.
3:19:00
Uh and I I totally agree with you.
3:19:02
But that that's >> and I actually somewhat appreciate it cuz there's this guy that >> there's a guy who actually is sponsored by stake and he's hilarious.
3:19:09
>> There's a guy who is so funny.
3:19:09
I just want him to >> uh it's like agent something.
3:19:13
Uh, well, I don't care what sponsor he has really.
3:19:19
I'm not I'm not I don't I don't buy products based on like some guy that I see for 10 seconds. Uh, but I do Yeah.
3:19:27
This like sort of UBI for people that are funny online right now is like gambling.
3:19:32
>> And >> it's dark, but at the same time, there's a dark side to it, but >> it is.
3:19:38
>> What's the light side to it?
3:19:38
Just that people are making money.
3:19:40
>> Well, the light side is that is that on a personal level, I get enjoyment out of it.
3:19:44
and like he's providing it. It's >> effective.
3:19:46
I mean, the same thing happened with sports sports podcasting.
3:19:49
There's like a massive bubble in sports.
3:19:51
The the the white pill is that like >> there's a lot of people that have jobs podcasting and that's a pretty job.
3:19:57
>> The Chinese micro dramas, right?
3:19:57
Like Chinese micro drama is like real short.
3:20:00
Actually, on the drive over here, I saw ads for real short like big billboards for for real short.
3:20:04
If you're unfamiliar, it's like >> it's if soap operas were on TikTok um you know, it's a swipeable feed. Well, yeah.
3:20:11
The crazy thing is those have been so successful and it's to me very much the same idea as Katzenberg's like short short form play.
3:20:20
>> No, it's not the same idea.
3:20:20
That was when we went into I I'll never forget walking into the Quibby pitch meeting uh where they they invited a bunch of creators to come pitch shows >> when when we walked into their office like the the the play there was like spend a ton of money on content.
3:20:32
Like they were like, "We have a Spielberg movie and an Aaron Sorcin movie and >> it's like $100,000 a minute for some shows." >> Yeah.
3:20:39
But they were not real short.
3:20:39
It's it's higher than >> Yeah.
3:20:43
I don't want to totally discount what you said. You're right, Jordy.
3:20:44
That like what they said in the meeting.
3:20:45
I remember I'll never forget it.
3:20:47
They were like I was like, "When does someone watch this?"
3:20:52
>> And they said, "When someone is waiting for the bathroom, like in line for the bathroom, they'll they'll they'll flip it on and watch like seven a seven minute increment of a show."
3:21:00
And I remember being like, >> but people watch people look at Instagram during that time.
3:21:05
Like how are you going to pull me into >> Yeah.
3:21:08
I guess I guess I guess it's hyper it's hyper it's hyper competitive uh for that time.
3:21:14
But >> I think there's something to be said for uh slow content that's made in a slow format, which is like with production.
3:21:24
I've been thinking about like fast and slow content.
3:21:25
We make fast content from a production standpoint.
3:21:28
>> We show from a from a production standpoint.
3:21:30
Like there's people that make content.
3:21:31
John's content on tech historically was slow content.
3:21:33
You would spend >> two 3 weeks making a video.
3:21:36
You'd put it out, you get a bunch of views. We're the opposite. Very fast.
3:21:41
We're making >> uh 3 hours of content a day with like 3 hours of prep a day.
3:21:46
Um, and I think like taking the taking a a form factor like short form video and then putting a different type of content through it, which is this more cinematic, highly produced content, it works in the form of like real >> real short.
3:22:04
>> Yeah, but they're fundamentally >> they're spending a lot less.
3:22:06
They're spending way less, >> but also they're formulating it in a way where they're earning your attention every 60 to 90 seconds.
3:22:10
There is a hook every 60 to 90 seconds to get you to keep watching.
3:22:15
>> You guys know how the economics work? No. >> Okay.
3:22:16
>> Okay. So how it works is like if you download real shorter drama box basically they're spending like typically $200,000 for a 90minute show right and it's that's cut into like a hundred slices and how what's happening is you when you download real short
3:22:32
you're getting like tokens so it's kind of like roblox money like Robux right so you're getting these tokens and you have to buy more and the first 11 swipes are free you go past the 11th you got to make a payment you got to spend tokens to keep every swipe you're spending tokens. >> And you know there's we interviewed a
3:22:49
>> And you know there's we interviewed a director on our show who's directed 20 of these and he is acutely aware of the fact that like some of his content has been viewed by 30 million people >> and when you're making micro payments again at that scale >> making 30 to 40 bucks if someone finishes >> and it can be upwards of 30 to $40 if someone finishes the movie. >> Huge.
3:23:09
>> So these and and the max budget is 200,000 to make these.
3:23:11
Now, the content itself is like, you know, it's not it's it's soap opera content.
3:23:16
It's not, you know, it's all speaks to like the most aggressive, >> you know, just >> versions of what people want on the internet.
3:23:25
But, um, >> the silver lining, the reason I brought this up, the silver lining is that people in Hollywood are working.
3:23:31
>> People who were directors, writers, >> cinematographers, this is where they're working.
3:23:36
So >> I mean it's by no means a perfect model in terms of like compensating actors and people working but they are working.
3:23:43
>> Yeah, >> there are opportunities.
3:23:44
>> So I can unlock coins right now on real if you want to read if you want to read some of the titles. >> I'll read a bunch.
3:23:49
American Sniper the last round. Okay.
3:23:51
I was actually going to ask like uh you know is it all romanty or romance?
3:23:55
>> I think it's mostly romance. >> American Sniper.
3:23:56
That's that the last round.
3:23:58
That does seem like something I would watch. Okay. I'm I'm down for that. >> Uh step aside. I'm the king of capital.
3:24:04
That also seems directly targeted.
3:24:04
John gets that one shot for me.
3:24:07
>> It might have a geo tag on it. Seems like it does.
3:24:10
>> Maybe John, you get into acting in these.
3:24:12
>> Uh yeah, some of these are are a little uh a little scantily clad into maybe this Christmas.
3:24:18
The billionaire married a homeless girl.
3:24:20
That's kind of interesting. >> Pulls you in.
3:24:22
Didn't China just >> They just banned that for the bann There's a very popular type like format for a show.
3:24:33
basically the Hallmark movie. >> Yeah.
3:24:36
Like very successful guy marries or falls in love with like a very normal a normal woman.
3:24:43
Um >> and apparently China is like has a top- down mandate to like not do this kind of content because it's creating >> unrealistic expectations.
3:24:54
Oh, I'll be I will definitely just be randomly plucked from obscurity by a billionaire. >> Interesting.
3:25:01
And and it's like, well, like statistically that's not going to happen.
3:25:05
So maybe like marry your high school crush and have kids and build a family uh instead of just waiting around for a billionaire to come pluck you out of obscurity because you've seen so many of those stories which is like a fascinating problem to have. >> Yeah.
3:25:17
Amazing stories are that popular that it's gotten to that point. >> Oh, totally. Totally. Yeah.
3:25:20
I I I do wonder like I mean we've had so many discussions about the like the downstream effects of Tik Tokification or YouTubeification or whatever Mr. Beastification.
3:25:29
Uh I I wonder if we're going to be having that discussion in a year or two because it feels like people are just learning what real short even is. >> Yeah, for sure.
3:25:37
It's early the business is working now.
3:25:40
>> Um what what happens to a generation raised on it? Is it good? Is it bad? I don't know.
3:25:45
>> The the last thing I'll say just to close the loop on like what I think big metas that have changed on YouTube.
3:25:50
Another one is uh length of of content and serialization.
3:25:54
Meaning like creators are approaching YouTube as if they're making a show, like a series that you can binge.
3:26:00
Cleo Abrams is a great example.
3:26:02
Like Huge of True is a show. It has a format to it.
3:26:04
Has an intro card that could similar to Mark Robber be pulled onto Netflix as an explainer show >> that explains cool science formats.
3:26:11
And >> I I from the era even when I was watching you as a YouTuber, like we all weren't looking we knew we were making >> content that fit a format that was, you know, should have been repeatable if we were at our best.
3:26:24
We weren't making a show. No.
3:26:26
>> And now people are making a show.
3:26:26
And a YouTube channel is a TV show largely because it's watched on connected TVs, right?
3:26:33
Even our show over 50% of our watch time comes from a connected TV.
3:26:37
And our average view duration is 48 minutes on on TVs.
3:26:39
But you look at like Mark Robert. Thank you guys. >> Hit the gong. Hit the gong.
3:26:44
>> You hit the gong for that.
3:26:44
For the for the obscure YouTube metric that only the real ones recognize. Hit the gong. >> Whoa. See that?
3:26:52
That's how you hit the gong. >> That's a great hit.
3:26:55
>> That was the hit of the day. Hit of the day. >> Yeah.
3:26:58
But like Michelle Car, Challenge Accepted, if you guys are unfamiliar with that, it's a show about taking on big challenges.
3:27:03
She hung out outside of a uh a military airplane, recreated Tom Cruz's stunt, but that's one of many episodes that follow the same format that are 30 plus minutes in length. Yeah.
3:27:14
So, help me help me square that with what I regard as YouTube's uh sort of organ rejection to overly serialized content.
3:27:24
And I'll give you an example.
3:27:25
Uh Johnny Harris, we're all fans here.
3:27:28
Um bunch of really great, it is a show, there's a bunch of great content, but then when he goes and does, you know, I'm doing a three-part series, it seems like YouTube's like, we don't want your three-part series.
3:27:37
We don't want your four-part series.
3:27:38
And it feels like part two is the deathnell of a YouTube title and you should never put part three, part four.
3:27:47
>> And they say, "Hey, we we have playlist for you."
3:27:48
I don't >> My suggestion is not doing, you know, part one, part two, part three.
3:27:52
Although a creator named Preston goes did an amazing series about building a mini truck for abandoned railroad that's three parts and it worked. It's great.
3:28:01
>> But but you agree with me that >> you agree with me that you should not part two in the in the title.
3:28:04
part two in the in the title. That speaks to a a packaging problem obviously that like you know on Netflix the show has title art >> right and that's what gets me into it that's where I get the recommendation from and then once you get in I don't really care what the artwork is for
3:28:19
every individual episode >> it's like it's almost it would almost be better if you're if you're doing like a four-part series four four-minute episodes or something just drop a 4hour YouTube video I I saw somebody watch a 10-hour video just on Star Wars episode one you seen that one right >> I think you'll see the UI changes come Okay. YouTube UI thing
3:28:35
YouTube UI thing super chapters almost where it's like but it needs to live in one place cuz it feels like just if if the algorithm even has a bad day and it serves you part three before it serves you part two and you're on you're on part two, you're going to be like, "What am I doing? I'm not clicking."
3:28:54
>> I know this can seem minor, but uh they're either testing it or it's rolled out where you can now upload 4K thumbnails to YouTube and I think just higher resolution thumbnails.
3:29:03
I think a lot of that is because now people are sitting and they're watching on their TVs and like if it looks like crap when you click on it like they are they are ushering this move across the platform for people to be ready for consumers to be sitting on their sofas and choosing what to watch.
3:29:18
>> I'd imagine someone listening would be like but but didn't you just say that like anyone could upload to YouTube and anything could happen.
3:29:22
This feels like a high lift to make like a show, right?
3:29:26
And it is but these creators have all been on the platform for a decade.
3:29:28
So the suggestion for me is that like this is happening.
3:29:32
If you watch like Hot Ones is a TV show, right?
3:29:33
Um, >> so I think you've seen it.
3:29:35
It's it's happened over a decade, but it is like if you're exploring what is the now of YouTube, that is the now like it is people are making premium shows that are watched on TV.
3:29:48
>> Um, >> and then the question is does Netflix come in and repackage and license those episodes? >> Yeah.
3:29:52
Or open the doors to a creator program, which I do think is a very very realistic path.
3:29:57
It's not going to be anyone can upload, >> but it it it's probably going to happen.
3:30:02
>> So, what's the state of the thumbnail artist today? Is it all AI?
3:30:04
Are there people that have graduated from YouTube thumbnail artists and now they're doing uh Netflix thumbnails?
3:30:11
Because I imagine thumbnails on Netflix, too, right?
3:30:14
>> Oh, they're insanely important.
3:30:14
I mean, every time you lo if all of us logged into Netflix now, we might have >> different versions of the same of same thumbnail.
3:30:23
>> Um, no, I mean, thumb I said it last time I was on the show.
3:30:25
It's like they're the gatekeepers to to viewership.
3:30:28
But I think >> um >> thumbnail artists are more like strategists now than than pure like designers, right?
3:30:36
Because >> it's more of thinking through the strategy of >> what what will peique someone's curiosity enough to click.
3:30:44
I I don't think we need to be like hyper hyperdesigned all the time, but there's there's some really great artists out there.
3:30:52
There's actually I mean when I think about this, there's a thumbnail that comes to mind.
3:30:54
U which is >> stuck in your brain.
3:30:58
>> Yeah, it's stuck in my brain.
3:30:58
It's a really good thumbnail from a basketball YouTuber named Jesser. >> Oh, I know Jesser.
3:31:03
>> Uh and he went to go tour the new LeBron Nike facility and it's like kind of a similar thumbnail to Mr.
3:31:08
Beast where he's like hanging out of a helicopter and you can see this like gold LeBron statue. >> It's iconic.
3:31:15
>> Yeah, it's like two pixels >> and it has 6. 3 million views.
3:31:17
But I mean I don't I watch some of Jester's videos.
3:31:21
I like his like guess the NBA player videos. Those are awesome.
3:31:24
But I looked at that and caught my eye and I clicked it.
3:31:27
But was amazing is that it pays off in the first second.
3:31:29
You watch it and you're like, "Oh yeah, there's a gold LeBron statue and this is a brand new Nike facility I'm in."
3:31:33
And so >> AI could create that thumbnail for someone else.
3:31:37
But unless you actually did it, you got to do >> but unless you're a Jesser and you pay it off upon hover because it's also like things autoplay on YouTube.
3:31:44
It's not the hover is a very big deal that it's why that now from a you can't clickbait someone because a thumbnail is proven over a hover before you even click.
3:31:55
It's like did this really happen?
3:31:57
What does the video look like? >> Yeah.
3:32:00
>> And the fact that he's standing there, that's a strategic move of being like, if I'm going to make this thumbnail and design it like this, it can't be so hyperbolic.
3:32:08
It has to be pretty real that like >> you got to set the expectation with the thumbnail and then match it, right?
3:32:12
the bird watching doc listers.
3:32:14
The thumbnail looks like a movie.
3:32:16
It's like very lowfi, but there's text on it that reads very much like a movie that was shown at Sundance or something >> and then you click on it and you're like, I had no idea this was going to be so incredible.
3:32:26
>> This is a very distinct smell in here. >> It's not a bad smell.
3:32:28
It's a good smell, but it's a very distinct smell.
3:32:32
>> People say that it smells like rubber >> rubber.
3:32:34
I would say if anybody in this room has ever been to India, it smells like when you get off the plane at India, this is kind of what it smells like. Let's go.
3:32:44
>> So, >> you know, there's someone in the technology world that just got fired for saying that exact thing. >> No, really.
3:32:50
>> This is a whole drama. >> Who? >> Uh, yeah.
3:32:52
The CTO of Klein was uh was talking about a hackathon and it was a it was a lot of men in the room and it all went all back and forth and it turned into >> Oh, that's a different thing.
3:33:01
I'm I'm talking about like a childhood nostalgia for me of landing.
3:33:06
>> Yeah, that should I go ahead.
3:33:09
As much as I would love to continue this conversation, the good news is we are podcast.
3:33:16
>> Uh I'm not sure when it's going to release, but we should wrap up. >> Slow content. >> Slow content. >> Slow content.
3:33:21
>> Slow content and slow.
3:33:22
>> Uh but uh thank you so much for coming on. We can close it out.
3:33:24
Uh and we'll be back tomorrow.
3:33:28
>> We'll be back tomorrow.
3:33:28
Thank you for tuning in today.
3:33:30
>> And we'll be in properly dressed for the for the season. >> We will. We will. Finally. Finally. >> Finally.
3:33:35
So, thank you for tuning in with us today. Goodbye. >> We love you. See you tomorrow. Goodbye. >> See you guys. Cheers. >> See you.