0:13
[music] >> Boardroom hushed AND THE FEAR [music] TAKES HOLD.
Search this video
0:21
A sign white page turns to guns and gold.
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Briefcase snaps like a battle drum.
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EVERY [music] OATH GETS CRUSHED WHEN JOHN QUINN COMES.
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GLASS WALLS SHAKE WHEN THE RUMORS FLY.
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ONE HARD NAME AND THE SUITS [music] GO QUIET.
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HEAR THAT MURMUR ROAR THROUGH the smoking floor.
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They hired [music] John Quinn, then nobody TALKS ANYMORE. MOST FEARED LAWYER.
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MOST [music] FEARED LAWYER.
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THE LAWYER, THE LAWYER'S OF FEAR.
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>> [music] >> Justice may be blind, but she sees that his way.
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>> [music] >> Most feared lawyer.
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Most feared Most feared lawyer.
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The lawyer, [music] the lawyer's of fear.
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When John Quinn stands, >> [music] >> the whole room kneels.
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And billion DOLLAR SCARS APPEAR.
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>> [music] >> COURTROOM [music] FLAMES UP THE MARBLE WALL.
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GAVEL STRIKES and the giants fall.
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Contracts [music] burn LIKE A PAPER FIRE.
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HIS WORDS HIT HARD LIKE A holy fire.
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Skyscrapers quake when the motions land.
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ONE SHARP GLANCE [music] AND THE JURY STANDS.
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NO RETREAT, no mercy call.
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He turns the case into A LEGEND WAR.
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HEAR THAT >> [music] >> MURMUR ROAR THROUGH THE SMOKING FLOOR.
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THEY HIRED [music] JOHN QUINN, THEN THE ceiling He wants to Most feared [music] lawyer, MOST FEARED LAWYER, MOST FEARED LAWYER.
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THE LAWYER, >> [music] >> THE LAWYERS OF FEAR.
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JUSTICE MAY BE BLIND, but she [music] sees it his way.
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Most feared lawyer, >> [music] >> MOST FEARED LAWYER, MOST FEARED LAWYER.
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THE LAWYER, >> [music] >> THE LAWYERS OF FEAR.
2:25
When John Quinn stands, >> [music] >> the whole room kneels.
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AND BILLION DOLLAR CARS APPEAR.
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>> [music] [music] [music] >> When the skyline cracks and the silence [music] bites, he walks through the wreck like a blade in light.
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No crown, no throne, just a name [music] that wins.
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One more STRIKE AND >> [music] >> THE THUNDER BEGINS. MOST FEARED LAWYER. MOST FEARED LAWYER.
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THE LAWYER, THE LAWYERS OF FEAR.
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JUSTICE MAY BE BLIND, >> [music] >> but she sees it his way.
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Most feared lawyer, MOST FEARED LAWYER, MOST FEARED >> [music] >> LAWYER.
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THE LAWYER, >> [music] >> THE LAWYERS OF FEAR.
3:47
When John Quinn stands, the whole room kneels.
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AND BILLION DOLLAR >> [screaming] [music] [music] [music] >> NOTHING, NOTHING. >> LET ME TELL YOU.
4:26
>> [laughter] >> You're watching TVP&R.
4:28
>> watching >> You're watching TVP&R.
4:31
It's Tuesday, August 4th, 2026.
4:31
We are live from the TVP&R Ultra Dome, the temple of technology, the fortress of finance, the capital of capital. It's August 4th.
4:43
>> [laughter] >> Let me tell you about Ramp.
4:44
Time is money, save both.
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Easiest corporate cards, bill pay, accounting, and a whole lot more, all in one place.
4:49
We got to work on that intro.
4:52
>> [laughter] >> But, we've been having fun making intro songs, mixing it up.
4:54
We got John Quinn, the most feared lawyer.
5:00
The lawyer the lawyers all fear coming on the show live in person in the TVP&R Ultra Dome.
5:05
You know him from Quinn Emanuel, he's the founder, a legend, a legal legend.
5:11
When John Quinn stands everyone kneels.
5:13
That's what they say about him. That's right.
5:16
Uh no, uh we're very excited for the show today.
5:19
Lots of guests coming on, lots of news.
5:23
Uh big deal, the big one that's tearing up the timeline right now is that Airtable, founded in 2012 and once valued at 11.
5:31
7 billion dollars, is getting acquired by Bending Spoons, founded in 2013 at 2. 7 times ARR.
5:40
Uh once hot startup, now an unfortunate victim of the SaaS bust, says DD Das. Uh it raised $1.
5:48
4 billion, but only to be sold for $1.
5:51
285 billion enterprise value, because they had almost a billion dollars in cash on the balance sheet.
6:00
Uh and so the total equity value was $2. 25 billion equity value.
6:05
Uh just clearing the preference stack.
6:07
So, uh early employees, founders probably got something.
6:11
Uh later investors probably got one X their money back, but probably had it tied up for a few years.
6:18
So, not a good outcome, but there's some interesting silver linings here.
6:22
Obviously, it's good for could be good for Bending Spoons if they got a good deal and they turn it into uh a a mammoth cash machine.
6:28
Also, there's some nuance to where different pieces of the are where different pieces of the business are going, because they're sort of dividing it up.
6:38
But, of course, Bending Spoons is a public company now.
6:40
And if you want to back Bending Spoons, head over to public. com >> or short it. Investing for you. >> Get financial advice. >> Yeah. >> Do whatever you want.
6:49
>> Stocks, options, bonds, crypto, treasuries, and more with great customer service. Go long, go short.
6:52
Whatever you do, just don't use too much leverage. That can be risky.
6:56
Matt Levine has a great piece today.
6:59
Uh and I think >> Yeah, really uh sort of exemplifies the current moment where a company can sell for over a billion dollars and everyone's like, "Wow, that's unfortunate." >> Yeah, yeah, yeah.
7:13
>> Um but uh and in a wake-up call to the to the many maybe younger companies that are at a lower revenue run rates that are raising at much higher valuations and basically signaling to them like you've you've got some uh many, many years of compounding to do.
7:34
>> Yeah, it's interesting.
7:36
There's a SASpocalypse narrative, which is like these companies are going away.
7:39
They're software won't exist. You'll just prompt it.
7:42
And I think there's a lot more nuance to it than that.
7:44
But one thing that it does feel like the the underwriting, the financial trajectory of these single point solution SaaS products, single player, somewhat sticky, maybe not that sticky, maybe replaceable.
8:03
It's not that they're going to zero.
8:03
Ben wouldn't be buying it if everyone was churning and it was going to be a zero.
8:09
But at the same time >> Yeah, it's still growing. It's growing 20%. >> Yeah.
8:12
Yeah, but you can't underwrite it at 40x revenue, 100x revenue anymore.
8:18
And it feels a little bit like what happened with D2C e-commerce, honestly.
8:22
There was a moment where e-commerce brands were venture backable.
8:28
And you could and you could underwrite them or they were being underwritten similarly to venture startups that had true moats, true compounding advantages.
8:39
They would get the same multiple as a SpaceX or or an AI company or a or a social media company.
8:44
And that never really made sense.
8:46
It was sort of a you know, just a weird quirk in the system for a couple of years.
8:52
And then go forward a few years when there were some pullbacks, some of the IPOs went out, they didn't do that well. They traded down.
9:01
And all of a sudden it was like, okay, well, if we're doing if we're doing you know, in my case like food on the internet and we're going to VC back a food company like has Nestle been disrupted? Like no.
9:10
And that would or Unilever.
9:13
Is Unilever trading down like crazy because they're facing so much pressure?
9:16
And that's usually what happens when there truly is disruptive innovation.
9:20
Like you see this with I saw some crazy post about how people were bearish on Starlink for a while and the company that they were competing with just went bankrupt.
9:28
Um And and you see this with you know, social media came out and yes, like the newspaper and the internet actually the newspaper stocks did actually trade down.
9:37
That never happened in in e-commerce, D2C e-commerce, any of that.
9:43
And and we're now in this new regime.
9:45
So, I think that there's actually a pretty safe path if you just build the business if you're saying, "Look, I am in this SAS industry.
9:53
It is going to be more competitive going forward, but I'm setting myself up to have a reasonable multiple so that at every point if I'm trading at three times ARR, I'm happy."
10:04
Because the cap table's set up for that, right?
10:06
>> Yeah, one thing I will say is I started using Airtable shortly after it It was 2015, right?
10:14
So, I probably started using it a few years in, but the product the way that I use the product back then for my for my first business, I would 100% just just five code a solution today.
10:25
Because I was using like very basic dashboard functionality.
10:28
I wanted dashboards that we could use internally, share externally.
10:32
Now it'd be very quite easy to just do all of that in Coda or your favorite agent. >> Sure.
10:38
I do think the business is very much under under threat over the long run, but could still has sort of compounding that it can do just given how how deep it is into the Fortune 500 and and a long tail of small businesses.
10:53
>> I'd be very interested to know what is, you know, new user new logo growth like versus just expansion within an organization.
11:01
Because if you have some company that's already sort of running on Airtable, they're growing.
11:05
So, they're adding seats, they're adding functionality because they're sort of bought in and they're not going to rip it out.
11:10
What does that growth rate look like versus um you know, new companies actually going and signing up and saying like, "Yes, this is the best tool for the job."
11:22
Because you do get a lot built for free up and like it's not like they don't have access to AI agents that can improve their systems.
11:27
Like you might be doing a lot of maintenance on your five coded solution, but at the same time, a lot of people, especially in smaller organizations, were using this as like just one small dashboarding tool, one small database that is sort of replicable.
11:41
So, interesting to see where it goes.
11:44
Um Uh and uh yeah, just like a an an interesting data point in the SAS apocalypse late stage growth like is it a zombie corn?
11:54
What are you What What term are you using for it?
11:56
Jared Sleeper has some more thoughts.
11:59
Uh 480 million ARR growing 20%. It's a unicorn exit.
12:03
Many very satisfied customers, including Jared Sleeper for years. Fantastic run.
12:08
Never underestimate how much VCs love products that make, quote, everyone a builder.
12:14
The rink The wrinkle is that one player products are high churn.
12:19
Was there a table I mean, I feel like the whole pitch for Airtable was that it was multiplayer, but maybe that wasn't the way that people were actually using it that often.
12:26
A lot of people would just be like, "Oh, yeah, that That guy on the team is using Airtable for that thing."
12:32
But, I mean, certainly from very early on the pitch was like >> player he means that you can it's more um like product led.
12:41
Like one person at a company.
12:41
I've only used it in a team capacity, right?
12:44
But, one player can sign up, start using it, invite other people to the team. >> Yeah.
12:50
>> But, it's >> advantage cuz you're bottom up.
12:51
You can just ramp into the different company so quickly.
12:55
But, at the same time, if you're not like going through the CFO and being like there's a mandate that we're using this ERP system. >> seats at once. >> Exactly.
13:02
Yeah, it is a little different. Uh three is third point.
13:04
Uh gross retention remains the single greatest predictive variable of terminal value for any business that doesn't have a scale effect or network effect.
13:13
It dictates somewhat mathematically what folks like bending spoons will pay.
13:19
Great to see employees get liquid, but perhaps sad that some are learning about liq- liquidation preferences, SAS multiples to their disappointment.
13:26
So, of course, if you had mentally marked your stock at 11 billion, but then this deal happens, uh the investors that put in that money at 11 billion, they're going to get their money back first, and then you're going to have to fight for whatever's left over, the scraps.
13:43
Uh Silicon Valley can do a better job talking to employees about what stock is worth in various scenarios.
13:46
Uh but no one is incentivized to do it.
13:49
Well, I mean, you can also just look it up.
13:53
There's a whole bunch of blog posts about it.
13:54
You can ask ChatGPT and and get a whole deep dive on run this whole scenario and play out every possible uh option. Um but yes, I I I agree.
14:00
No no one likes to, you know, "Oh, we're closing the big candidate.
14:05
Let's tell them about what's going to happen if Bending Spoons comes in."
14:08
And you just >> Let's tell them what happens if we get our spoon bent.
14:12
>> [laughter] >> Uh Bending Spoons is emerging as the Constellation Software of the prosumer high churn higher churn SaaS is a fascinating turn of events and a good thing for pref stacks everywhere.
14:23
Just because there's more liquidity for systems.
14:28
>> Well, it's a buyer of last resort.
14:30
>> Yeah, whereas >> Like no founder no founder setting out, "Hey, I want to be I want to I want to, you know, go on this generational run." >> Yeah.
14:39
>> And then get my spoon bent.
14:41
Um but uh it's still it's still great because it allows, again, it is real liquidity. Uh this is a win.
14:48
I think Bending Spoons Bending Spoons will obviously uh end up I would I would say like right-sizing the company.
14:56
They're not going to continue to run it the same way that it's been run.
15:00
Uh but at least it allows everyone to um get out and uh go on to do new things. >> Yeah.
15:07
In an interesting twist, speaking of getting out, uh Shiel Mo not shares this about the Airtable acquisition.
15:13
They spun out their AI business Hyper Agent prior to the acquisition.
15:15
So, the company lives on and likely some cash with it.
15:19
Probably can be recapitalized.
15:23
Uh seems like seems like a fantastic outcome.
15:25
Shed the old business and focus on AI.
15:26
So, I would be very interested to see who is going to be working at Hyper Agent.
15:31
Is this something where the founders didn't want to uh exit the business entirely and then just start from scratch?
15:37
They wanted to take a whole bunch of the team with them and they wanted a bunch of the resources and learnings and so they were able to package everything up and this will be something that's very founder led or was this just, okay, that is a more expensive piece of the business Bending Spoons it it it it it's it's earlier in its ramp.
15:51
Maybe it's working, maybe it's not, but that's not the business that Bending Spoons in and so this is more like a Bending Spoons driven >> Look, we've had we've had both founders on the show.
16:02
Bending Spoons is like, hey, let's take a great product and just basically uh right-size the team, run it efficiently, and we're not trying to get we're not they're not ever in the business of trying to get growth back to 200 300% a year.
16:20
Howie's been on the show.
16:20
He talked a bit about Hyper Agent.
16:21
That's a product that if they execute well can grow 10x year over year, right?
16:26
And so I could imagine again leaving some of the team to just continue running AirTable indefinitely and then again like you said taking some of the talent out and saying like, let's take another big swing. >> Yeah.
16:39
Yeah, yeah, it's a fun it's a fun twist on like post acquisition.
16:43
What do you do in this scenario?
16:45
Like the the the team doesn't necessarily need to stay on.
16:47
That's not the Bending Spoons thesis.
16:48
There's not some crazy earnout probably for most of the team members and so you have the opportunity to go do something new and if you're already all set up, it's like, yeah, just just put everyone together before the deal happens.
17:01
Um >> Yeah, the other the other thing that's notable is Notion I think just did a tender.
17:05
>> They just did a tender or they did a tender a while ago?
17:07
I thought it I thought that was >> point at some point within the last year. >> Really? >> At 11ish billion. They're at 600 million.
17:15
>> No, no, no, you're right. There's January of 2026. >> Yeah.
17:18
>> I saw this quoted as like oh no >> have any idea how quickly they're growing relative to Airtable?
17:22
I imagine they're growing significantly faster.
17:27
>> So, the news was that in on January 26th of 2026, Notion, which very much feels like, you know, easily comp to Airtable.
17:35
Airtable was like modern Google Sheets, Notion was modern Google Docs.
17:40
Of course, there's a ton of overlap in the capabilities and there's a lot more to it, but Notion sort of feels like a similar shaped business.
17:48
But GIC, Sequoia, and Index purchased Notion shares in a private tender offer January 26th of this year.
17:56
The total tender was $270 million at $11 billion valuation, which was the the last valuation, I believe.
18:04
They say we waived a one-year vesting cliff on options for current employees, so I think everyone got to participate.
18:11
There's a whole bunch of returning investors.
18:12
At Notion in 2025 Notion's growth rate accelerated on the back of AI adoption within our platform.
18:17
As of last last year, more than 50% of the ARR came from AI-enabled customers.
18:22
The growth over the last 12 months is happening globally.
18:26
They don't share an actual growth rate, but I don't know.
18:31
They must Everyone must have been optimistic at the time because they did the deal at the full $11 billion, so.
18:39
Anyway, Bryce Roberts is laughing at the VCs, I guess.
18:43
uh who were able to play the markup game and were able to raise one, maybe two funds on the Airtable markups alone.
18:53
I'm sure there are some, but I mean most of the funds that were in Airtable were in a bunch of stuff, so I don't know how true that is.
18:58
Maybe the really early stage people, I don't know.
19:02
>> Yeah, Airtable did enough rounds back-to-back-to-back that pretty much every fund Yeah. >> is in it.
19:10
>> And they also have a bunch of other investments that are high performing during that that era.
19:13
I don't think he's making making fun, he's just pointing out Yeah. The >> Server line. I [snorts] don't know.
19:21
Uh Liquidity is is uh laughing about the fact that Bending Spoons has a very soft friendly brand.
19:26
Bending Spoons branding, very uh very simple.
19:30
And it just sounds like such a simple name.
19:32
It's not like Cerberus Capital, you know?
19:34
Uh but and yet when they negotiate they're presumably difficult to negotiate with. I I don't I don't know.
19:41
I mean in in a certain situation you can be very friendly and amicable and just sort of say like, "Yeah, we're we're we're buyer at 2. 7 ARR, you know?
19:47
We're not going to like screw you over here.
19:49
We're just going to give you This is a fair price. Take it or leave it." And you can take it.
19:54
You don't necessarily need to be this like crazy werewolf of like a shark, you know?
19:58
>> Yeah, there's just not there's just not that many There's not that many buyers for a company like Airtable.
20:01
And it's a a just sort of in in this in this economy a slow growing enterprise software business, right?
20:12
There are not that many buyers.
20:14
If Airtable had wanted to sell >> Yeah.
20:16
>> in 2020 I'm sure they would have gotten meaningfully more.
20:20
They probably did have offers at different points.
20:22
You could imagine Airtable you know, ending up at a at a you know, a Salesforce as an example, right?
20:31
Um but now uh Luca is uh saying the buyer of last resort is is like um maybe maybe unfair.
20:41
Um >> Yeah, just like a value-based buyer. >> Yeah. >> I don't know. He's fine. Yeah.
20:48
Uh I mean it is I I guess it's like Yeah, the first resort would be like the hyperscalers, but uh it's >> Yeah, ideally you you you never sell. >> Yeah. >> You go public. >> Yeah.
21:00
>> And just keep compounding compounding.
21:02
Second best would be a strategic, right?
21:04
>> And it just feels like the the enterprise tooling market is pretty mature amongst the hyperscalers.
21:08
Like Microsoft's not going to replace Excel with this.
21:12
Google's not going to replace Google Sheets.
21:14
Meta Amazon they don't really want to get into this particular thing.
21:19
A whole email suite like the office productivity suite.
21:22
Uh and so you get to this price and it's like IPO or sell. And so they chose sell.
21:29
Uh anyway, let me tell you about Shopify.
21:30
Shopify is the commerce platform that grows with your business.
21:32
It lets you sell in seconds online, in store, on mobile, on social, on marketplaces and now with AI agents.
21:35
Um Snap earnings happened and uh Evan Spiegel was on CNBC's talking to Sorkin.
21:46
Uh and it's a very interesting storyline because um people are wait people are obsessed with the specs.
21:53
I mean it the job job completed in terms of like getting more attention for the company.
21:58
But it's been sort of a weight around the company because the question is like okay is is everyone going to be buying $2,200 smart glasses from you anytime soon?
22:08
Uh when that's not really the story.
22:10
The story is actually like the revenue growth, the profit, the operating leverage, the coming back into the business.
22:16
So I mean overall it was a good quarter for Snap. Clear beat.
22:20
Uh revenue was up 19% year over year uh with profitability and cash generation rising even faster.
22:26
So that's that operating leverage.
22:28
They're growing revenue faster than they're growing costs and so they're increasing their margins.
22:34
Um advertising revenue grew 9% to 1.
22:38
roughly 3 billion in the quarter.
22:40
But the really interesting number that uh was surprising to me was they're making $316 million a quarter in subscriptions and paid services. Up 85%.
22:50
So just subscribing and being a paid power user it's only 3% of the user base something like that.
23:00
That's that's now a billion dollar line of business.
23:02
Obviously, very high margin, working really plays to the strengths of what Snap offers.
23:09
Um and usage is up globally, but they're losing a step in Western markets.
23:12
So, the North America, I think fell 7% and Europe fell 2%.
23:18
And so, that's not great for long-term ad monetization cuz you want to be in the the richer countries generally, but still revenue is accelerating.
23:27
They are monetizing better.
23:28
And that's probably an AI story.
23:30
It's just like a boring AI story because it's like the ad recommendation system got a little bit better. Nobody really cares.
23:36
People want to focus on Specs, but they're $2,200 and they're bulkier than competing smart glasses.
23:43
>> Well, it felt like in that interview Spiegel was talking about Specs, but he wasn't wearing them.
23:48
And so >> Yeah, does he need to wear them all the >> he kind of needs to wear them all the time.
23:54
>> I mean, you're going to hold Apple to that?
23:56
Tim Cook's got to wear a Vision Pro everywhere he goes? That'd be funny.
24:00
>> No, but but the Vision Pro is not meant to be worn >> Augmented reality. It's augmented reality.
24:04
It's meant to be worn 24/7 if you're a serious person.
24:06
Let's actually pull up the >> do a full show if you love >> I could.
24:12
>> Apple Vision Pro so much. >> be a problem. Not a problem. >> full show. >> Okay. >> Do the full show. >> Okay. >> This Friday.
24:18
>> Well, well, well, we'll test Friday with Tyler.
24:21
Um >> [laughter] >> So, here here here's an interesting tidbit.
24:26
Uh Specs, it feels like, "Oh my god, they're spending so much money. It's like so crazy."
24:31
I think the rough estimate is like 300 million a year, which is a lot, but it's only 5% of their cost.
24:37
It's like 20% of their overall R&D budget, maybe, something like that.
24:43
These are very rough numbers, but it's not like It's not like if they just spun out Specs or cut cut Specs and they were just like, "We're not doing anything there."
24:53
All of a sudden the the is like wildly profitable.
24:55
It's not that big of a stone around the neck.
24:57
It's more just like a distraction and a question.
25:02
Um And and it's also not great that on the earnings call they asked how many pre-orders have you sold and they sort of danced around and didn't really give a straight answer on that because if it was good, you'd probably be like, "Yeah, we sold a lot of >> lead with those things. Yeah, yeah, yeah, yeah.
25:17
It's >> Yeah, and even even Meta selling what I think now is millions of devices is not exactly >> Yeah.
25:25
>> like shout They don't want people to necessarily focus on that. >> Totally. Totally.
25:29
>> Even though it is a proof point that there is a market here >> Totally. Totally.
25:32
>> for camera glasses basically.
25:32
The crazier thing with Snap is that this is a business even after it's traded up 13% today.
25:40
The the business is at a $6 billion a year run rate and it's trading at under 10 billion, right? >> Yeah.
25:47
>> So which um just goes to show how even even with uh some momentum across the business, people just do not uh have have faith uh in the company.
25:59
>> Okay, let's play a little bit of Evan Spiegel on CNBC.
26:00
Uh I want to hear him talk.
26:04
>> Snap reporting Q2 results after the bell on Monday.
26:06
They scored an earnings beat with $1.
26:09
6 billion in revenues, 19% higher than just 1 year ago.
26:11
And joining us right now uh for more Snap CEO Evan Spiegel.
26:15
He did not bring his glasses on the set, but we're going to talk about those glasses in just a minute because I think that's been a big part of the story.
26:21
But um you beat uh across the board.
26:24
Not just by the way on the revenue piece, but on the margin piece, which is what I think the market was actually looking for.
26:30
>> Yeah, well, first of all, thanks so much for having me on, Andrew.
26:31
It's such a beautiful morning here uh in Aspen.
26:32
It was a great quarter uh for Snap.
26:34
And I think what folks are seeing is that the free cash flow in the business is really starting to inflect, which is allowing us to offset dilution, to strengthen our balance sheet, and of course to continue investing in the future, which is so important to us.
26:45
>> Okay, click forward like 2:30. >> of that story.
26:48
I mentioned glasses, we'll get there in a second.
26:49
I think glasses >> Cuz I want to hear him talk about glasses.
26:52
>> They're about 2,200 bucks right now, 2,100 bucks is what they're going to come in >> Okay, so the question I keep thinking about is >> how quickly those can come to market in a way at a in a way and at a price point
27:04
that people buy them uh you know, on mass and how you think about the competition coming from whatever you think Apple is ultimately going to create, whatever you think Google is working on and whatever you think Meta is going to do next. >> Well, we've been working for more than
27:16
>> Well, we've been working for more than 12 years to reinvent the computer and make it feel more natural.
27:19
I think that people are spending more than 7 hours on average staring at screens.
27:23
Specs represent the opportunity to bring computing into the world to make it a shared experience and ultimately uh to help, you know, bring all the productivity gains we saw in desktop computing and laptop computing to the real world and to real world jobs, which is the vast majority of jobs, about 60% uh of jobs.
27:39
So, I think this computing transformation is incredibly exciting.
27:43
We're certainly the the leader in the space.
27:44
I think Specs represent a a totally new category, right?
27:46
If you look at the landscape today, you have very bulky uh but capable headsets and then you have very limited uh but lightweight AI glasses.
27:54
And Specs represent uh you know, the capability of some of these VR headsets in in terms of the immersiveness and the ability uh to really have a full workstation experience, but with the wearability of some of these lighter weight glasses probably.
28:06
>> But do you say to yourself Apple's going to come and do the same thing and Meta's going to go I mean, so how do you think about that given the cost of of putting this all out there and the amount of money that some of these big companies can actually throw at this?
28:17
>> Yeah, well, I think it you know, as we look at the history of of innovation, I I actually think one of the things that helps power innovation are constraints, right?
28:23
And and one of the things that makes Snap so unique is that we've been so laser-focused on Specs for such a long uh period of time.
28:28
So, I think this focus, I our history uh of innovation, you know, and our first-mover advantage in the space >> it should be a different company.
28:35
If if you want to be laser-focused, it feels like the benefit would be like do the Elon thing, start a separate company that is laser-focused on it.
28:43
The investors in that company are laser focused on that.
28:47
The employees >> Yeah, have a distribution deal with Snap. >> Yeah.
28:51
You know, like like just just have this like, you know, gets where where we're good on this video.
28:56
Um just get Snap to a really polished oiled machine. You own all the equity.
29:01
You you you have the founder control.
29:04
It's your, you know, your your your financial backstop.
29:08
Your your your credibility uh for to actually go and truly laser focus because like it's weird to be laser focused on a thing that's not your core business and then everyone's just constantly asking you like, "We'd love for you to laser focus on the main business that's making billions of dollars every year."
29:26
Like >> It seems pretty solid.
29:28
>> Yeah, it's [laughter] like making $6 billion.
29:29
Well, what do you think, Tyler?
29:31
>> Yeah, I mean, earlier this year they did spin off the AI video company.
29:32
That seems like much more related to the main, like, you know, Snapchat app than the glasses, right?
29:40
>> What is the AI video company?
29:41
>> I think it's called Dot Mo.
29:41
It was like their internal generative video >> Huh. >> uh team. >> Interesting.
29:46
Uh yeah, I I feel like having in-house >> Yeah, it also He was talking about enterprise use cases for the glasses.
29:55
>> I mean >> Like workplace use cases. It's so hard to imagine.
29:57
It's It's It's as an independent company, you make a really great device.
30:01
I can imagine that company having its own go-to-market motion saying, "Hey, Amazon, we want you to use, you know, our devices across your workforce."
30:09
And maybe they do a pilot. >> Yeah.
30:12
>> But trying to sell in like Snapchat glasses into the enterprise >> Yeah.
30:16
>> feels like just going to be a tough sell.
30:19
>> I also wonder, I mean, I I don't know if this would actually be a good strategy for such a big company, but I would be interested to see if there's a an opportunity just for another another physical product that could actually get to scale that's way cheaper.
30:32
I'm thinking like some sort of like disposable camera that that that doesn't have a screen on it.
30:38
You take the photos and then they upload to Snap in the app and it's like this special way of like disconnecting more on theme but way cheaper cuz it's just like a basic camera in a in a shell or something um or going into like, you know, a ring or a wristband.
30:52
Like there's been so many companies that have figured out how to get a wearable or a hardware device actually in the hands of millions of consumers.
31:01
Like maybe do that first and then grow from there as opposed to taking like the straight shot.
31:06
I mean it's a straight shot to to full immersive augmented reality the most challenging thing um which is which is just it's it's just a really really tall order. Um >> Yeah.
31:18
>> Anyway, let me tell you about MongoDB.
31:20
What's the only thing faster than the AI market?
31:21
Your business on MongoDB.
31:21
Don't just build AI, own the data platform that powers it.
31:26
Uh well, OpenAI is firing back at Apple.
31:29
Uh little little glazy that they say Apple is one of the greatest companies of all time.
31:34
What a funny way to kick off a a blog post firing back at a lawsuit.
31:39
Um Apple just cooked OpenAI just cooked >> Apple built a reputation for obsessing over the smallest details. >> True.
31:48
>> And then they go on to say maybe there were some details that were missed. >> Yes.
31:53
So what did Well, what were what were the key things that they said?
31:55
They accused Apple accused OpenAI of ignoring them.
31:59
Turns out the lawyers emailed the wrong Asian guy because two Asian last names look similar.
32:03
They claimed you discussed the allegations with OpenAI's general counsel and they admitted that that conversation never happened.
32:11
Accused ex ex an ex employee of improperly accessing files.
32:14
They forgot to mention Apple employees were allegedly asking him to access those same files after he'd left.
32:20
So there seemed to be some scenario where like the guy had left but he had so much internal knowledge that someone at Apple was just like, "Hey, like can you remind me where this thing is or something?" >> Yeah.
32:32
When reading through the initial complaint, Apple made it seem like uh the employee or the former employee was just running wild through his old laptop.
32:44
He had sent a message to someone at Apple saying something to the effect um I'm paraphrasing, but I still have access to my computer lol.
32:55
But the reason that >> Yeah.
32:58
>> in the text messages that they shared you can imagine the reason that he was there and sending that message.
33:03
Why would he send the message if he was doing something that he was that he that that uh that that was wrong and he would feel guilty of, right?
33:11
He was helping his former teammates and they say there's 10 other people I could ask you, but you're the smartest or something like that.
33:21
Um and and so when you have all of this context, the story looks quite a lot different.
33:29
>> Yeah, they're sharing a lot of text messages.
33:30
You can go read the blog post, but there's like full back and forth iMessages between uh Cheng Lu and Apple employees where Cheng, whose last day at Apple was January 22nd, 2026, is being asked by his former colleagues to help them locate files and information to assist them with their Apple work.
33:45
Uh note other individual names and Apple confidential confidential information has been redacted.
33:50
So, uh certainly another another wild uh >> Yeah, I'm still I'm still just very surprised that that Apple during the middle of a you know, a a year-long talent raid uh would know that someone significant had quit and that would not go through the process of actually taking back their their their laptop and making sure that um you know, the the separation was um you know, really finalized.
34:24
People people have been saying stories how historically, you know, maybe call it 15 years ago, if you quit Apple, someone would show up to your house immediately and take back any prototypes that you may have had or anything anything of the sort. >> Yeah.
34:40
>> Um >> I'm excited for prediction markets to get on this, honestly.
34:42
It was very helpful during the the Elon Musk OpenAI case.
34:46
Uh currently Cult of the She has a few here.
34:50
Uh will the OpenAI Jony Ive device have a screen? No, it's at 82%.
34:58
Um when will OpenAI release Astra? There's some dates here. What else are they?
35:04
Will OpenAI increase the cost of ChatGPT? No, at 87%.
35:05
Uh no market on the Apple lawsuit because it's it's still very early.
35:12
There's not even like a court date yet.
35:13
Um but we'll keep tracking it because it's an interesting story.
35:17
Uh let's move on to the next story.
35:19
But first, let me tell you about Railway.
35:21
Railway is the all-in-one intelligent cloud provider.
35:23
Use your favorite agents to deploy web app servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security.
35:29
Um So, uh is BMW forcing owners to watch a Spider-Man Brand New Day promo when they start their cars up? That's the question.
35:43
A lot of people were upset about this.
35:45
Jordy this morning is like, "This is awful."
35:47
Uh there's some nuance here.
35:50
So, BMW BMW owners are debating the company's latest in-car promotion after videos spread across X showing a Spider-Man Brand New Day animation appearing on their vehicle's infotainment screen at startup.
36:04
>> And the reason why this uh fake news triggered me was back in the day in college, I was getting a Kindle. >> Yeah.
36:12
>> And on the checkout page, it was like, "Do you want to save $10 and get the ad-supported Kindle?" >> Mhm.
36:18
>> And as a college student, I was like, "Hmm.
36:20
Saving $10 sounds pretty nice."
36:23
And then I had to live with a Kindle that would sit on my bedside table just blaring ads in my face constantly.
36:29
And it wasn't like I would have actually appreciated [laughter] ads.
36:32
>> Can you just flip it upside down? >> True. True.
36:34
One >> One simple >> simple trick.
36:37
>> Jordy hates this one >> One simple trick.
36:38
Um and but it wouldn't be ads for like Spider-Man.
36:41
It would be ads for random >> books. >> Right? Yeah, books.
36:46
That uh and the targeting wasn't good.
36:48
So, again, people don't like ads that >> If the target was good, you'd >> Um anyways, what happened here, John?
36:55
>> Okay, so venture capitalist Shiel Monot wrote, "When you start a BMW, it shows you an ad for Spider-Man.
37:00
Really cheapens the BMW in my opinion."
37:02
A16Z partner Josh Elman added, "Of all the brands I thought I might I thought might bombard you with in-car ads on screen right when you start the engine.
37:13
I had BMW pretty dang low on that list."
37:15
Uh this seems the opposite of luxury and performance. Is BMW a luxury brand?
37:24
I thought they were premium.
37:25
>> I Yeah, I think it's a premium brand. >> Premium brand.
37:27
Uh even Paul Graham weighed in though, uh reposting Monot's video and saying, "I'm never buying a BMW."
37:35
>> He's never buying a BMW. What about an old BMW?
37:37
They can't show you ads in a E39 M3.
37:40
>> what what actually happened?
37:40
You have to opt into this.
37:43
>> Community notes added important context.
37:46
According to one note, the Spider-Man promotion is an optional startup banner available on compatible BMWs from July 27th through August 10th, 2026.
37:53
The banner does not automatically play a full-screen ad.
37:58
Instead, owners must tap it to launch a themed animation featuring music and synchronized vehicle lighting.
38:05
BMW has offered similar limited-time startup experiences in the past, including holiday-themed animations.
38:12
Jordy >> Very very very different.
38:12
Uh you can just see the pop-up there. Surprise!
38:17
Spider-Man just dropped into your BMW. And then it's an ad. >> press the button.
38:21
You have to actually turn it on.
38:23
It it's not >> Yes, yes, but I'm saying there's a banner ad.
38:27
>> Oh, there is a banner ad? >> It's just a banner. Look at the video. Start it over. Start it over. >> Uh let's see.
38:32
Let's let's be the judge of this. >> Look at this banner. It's a banner. >> Oh, okay.
38:37
>> If you click the banner, then it plays an ad.
38:39
So it's a pop-up that you click. >> Okay.
38:43
>> And it's like, wait, what is this pop-up?
38:44
Why does my car have a pop-up? And then it plays an ad. >> a setting somewhere.
38:48
There should be a an icon that's like promotions or themes.
38:52
>> That didn't look tucked in anywhere.
38:53
That was the main That was the main >> Cuz I'm fine if you if there's a if there's a theme and you're like, I want red lighting in my car. I want blue lighting. I want Spider-Man theme. I want Christmas theme.
39:04
Go >> Yeah, they're literally saying, "Surprise, a Spider-Man ad."
39:06
And they're not even [laughter] like they should just say, "Hey, we have an ad for Spider-Man here." "If you'd like one."
39:16
>> Okay, this is right on the line.
39:17
>> But this this is this is This crosses my line.
39:20
>> This crosses your line?
39:21
>> Because you're like, what does Spider-Man have to do?
39:22
What does What does Spider-Man have to do with my car?
39:26
And then you click it and you get an ad for Spider-Man.
39:29
>> But I I just think of the consumer surplus.
39:30
This is making BMWs cheaper.
39:33
This is making This is bringing bringing BMW >> Let's look at the price of inflation.
39:39
>> Yeah, also not not necessarily the best deal out >> Yeah, let's look at BMW inflation.
39:41
Um anyways, yeah, really really bad move.
39:44
I wonder how much they actually made here.
39:48
>> you're just judging it because it's it's I think you would feel completely different if completely differently if you if you saw a banner and it was Nitro Circus.
39:58
And it would just take over your car.
39:58
Or if it was just a a full takeover of Sam Sulek at the at the Arnold Classic, something like that.
40:06
That would be much better received.
40:09
It's not It's not a opinion.
40:10
>> Surprise, Spider-Man trademark just dropped into your BMW. >> Okay.
40:15
The ultimate driving machine.
40:15
Yeah, um not not super well executed, but uh BMW's been going back and forth with stuff like this pretty consistently.
40:25
Like, did aren't they the ones that have the subscription to the heated seats? Isn't that BMW?
40:31
You know what I'm talking about?
40:32
So, they they put the wires to heat the seats in every car, and then if you want to use it, they charge you monthly.
40:43
And uh this is just like a it's basically just a nerd sniper like a like a I don't know, like a treasure hunt for for hackers because if you're a DIY hacker and you can get into that and and and unlock it, jailbreak it, uh you just get well, not free cuz you already paid for it, but you don't have to pay the subscription.
41:02
Uh >> Yeah, Technochef says, "Wait, I thought we loved ads here." I do love ads. >> That's true.
41:09
>> But I think buying unless unless BMW I think I think if they gave the option at purchase saying do you want to buy the ad-supported >> Oh.
41:20
>> manual transmission BMW M2, or do you want the the ad-free premium version and there was a bit of a price difference? >> Yeah.
41:28
>> Then it just feels it feels wrong. They didn't do that.
41:31
>> Sort of like a Ferrari tailor-made program.
41:32
Oh, like what stitching did you get?
41:34
Oh, did you go ad-free or ad-supported?
41:37
Like, oh, you went you went manual? Cool.
41:39
That >> Yeah, I went manual, but ad-supported.
41:43
>> Yeah, manual ad-supported.
41:44
>> [laughter] >> Yeah, I got a manual SP3 ad-supported.
41:50
>> [laughter] >> I mean, the ads in an SP3 SP3 driver probably very hard to reach, so pretty valuable.
41:56
I would love >> [laughter] >> I would love ads there.
41:59
But it's got to be ads for the the most elite products.
42:04
It's got to be your you're getting your you're getting your SP3 and it shows you an ad for a money geary or something.
42:08
Um Spider-Man's doing well, though. So, the ads are working.
42:12
So, >> [laughter] >> you know, maybe the BMW show owner showed up in droves because the new Spider-Man movie scores Hollywood's second-biggest debut ever. That's actually huge.
42:22
The Sony film grossed $932 million through Sunday, topped only by 2019's Avengers: Endgame. That is massive.
42:36
Did you realize that this movie was making that much money?
42:39
>> I mean, if you would ask me an hour ago, "Is there a new Spider-Man movie coming out?"
42:45
I would say, "Haven't heard of anything." >> Yeah.
42:50
Yeah, I I haven't seen that much energy about it.
42:53
I've been aware of it, but I have not I've not seen like a massive takeover.
42:57
Um, but also, I'm not driving an ad-supported BMW, so maybe that's the problem.
43:02
Uh, Spider-Man spun a massive weekend for movie theaters flaunting superhero fatigue and giving a major boost to Hollywood's summer block uh, box office.
43:11
Sony Pictures' Spider-Man: Brand New Day opened to an estimated 90 >> some good ideas here in the chat. >> what what we got?
43:18
>> So, ad-supported cars that get you free self-driving, where they the the the the ads take over the whole entertainment system in the car.
43:29
So, you're sitting there relaxing, you know, the car is driving itself, but then it's just blaring high volume every >> I'll take it a step further.
43:37
>> every 5 minutes 1:30 second ad.
43:40
>> there was a whole What if there was a whole company dedicated to building self-driving cars that was funded by an advertising company?
43:48
Like a company that just prints billions, hundreds of billions of dollars in advertising.
43:51
Like their DNA is advertising, and then they go into the self-driving car >> no one done this before?
43:58
>> They would have a huge advantage in terms of targeting >> no one done this before? >> Yeah.
44:01
Uh, they could even have a video platform where they're making a lot of money running video ads, and then you could take that video platform like a YouTube. Yeah, exactly.
44:09
So, you could have like you know a huge ad network YouTube ads, and then you could have a self-driving car company, put them all together.
44:17
That's energy right there.
44:19
>> And maybe you could spin the company out at some point and raise some venture capital, too. >> Spin the company out. Wait.
44:25
>> [laughter] >> They're secretly still advertising.
44:26
No, I don't think Waymo will do crazy ads.
44:29
I think I don't know, maybe.
44:33
>> A major streaming executive just texted a major streaming executive just texted me and says, "Okay, going to get Tube Beta build a car right now."
44:42
>> [laughter] >> You got to build a car. You got to do it.
44:49
What [laughter] else is going on here?
44:51
Okay, let me tell you about CrowdStrike real quick.
44:53
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44:55
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45:00
The owners of MySpace say they're planning to relaunch the once-dominant social media platform.
45:07
And I feel like this has happened multiple times.
45:09
I'm having déjà vu here, but we'll dig into it.
45:10
In a recent documentary called MySpace about the company >> We got another app loving cars. Axel [laughter] AI. >> Axon. Axel AI.
45:22
>> No, it's a it's it's a self-driving car, but you have to play mobile games >> Ooh. That's a feature.
45:28
I mean, you going to tell you can play Polytopia >> wheel >> Yeah. Why not Clash of Clans?
45:34
>> with an iPad, and you're just playing mobile games, but if you stop If you stop leveling up, the car just pulls over.
45:41
>> You got to see You got to keep playing.
45:43
Okay, we're getting somewhere. This is good.
45:45
So, in the recent documentary MySpace, Chris and Tim Vanderhook, the brothers who acquired MySpace in 2011 after its decline, said they intend to relaunch the platform with a new vision.
45:56
There's no launch date that's been announced, but they say they want to build a social network that feels different from today's algorithm-driven apps.
46:04
They don't believe in preference falsification.
46:09
They think when people say they don't like algorithmic feeds, they actually don't like them.
46:13
We'll see how it pans out.
46:15
So, MySpace launched in 2003 and quickly became one of the world's largest social networking sites.
46:20
It became famous for customizable profiles, music discovery, and its iconic top friends feature before Facebook eventually overtook it uh in in users and became the dominant social platform.
46:33
At its peak though, MySpace attracted roughly 150 million monthly visitors worldwide.
46:38
That's not necessarily people that had profiles, but just visitors you'd land on a MySpace site.
46:44
Uh so, huge for the day, but not huge by modern standards.
46:47
So, the platform's ownership history mirrors its dramatic rise and fall.
46:52
In 2005, Rupert Murdoch's News Corp acquired MySpace's parent company for $580 million.
47:00
It was like a I'm pretty sure it was a fantastic outcome at the time.
47:03
Now, by social media standards, it's like what are you doing?
47:06
Um just 6 years later in 2011, News Corp sold MySpace for roughly $35 million though.
47:12
So, completely, you know, got wrecked uh to Specific Media.
47:15
Led by brothers Chris and Tim Vanderhook, Justin Timberlake invested in the company and became a prominent creative advisor during the acquisition. In 2016, Time Time Inc.
47:25
acquired Specific Media's parent company in a deal valued at about $87 million 3 years later, Meredith Corporation acquired Time Inc.
47:32
briefly inheriting MySpace before selling its stake back to the Vanderhook brothers that same year.
47:38
All told, MySpace went from a $580 million trophy acquisition at the height of the social media boom to a roughly $35 million distress sale just 6 years later. Today, myspace.
47:49
com is still online primarily serving as a music and entertainment website while its parent while its owners prepare what they hope will become a second act. Are you bullish?
48:00
What do you think they should do?
48:04
What's the advice for the owners of myspace. com? Nostalgia.
48:08
You got to call Bending Spoons, right? Is it making any money?
48:12
>> That's the issue for Bending Spoons.
48:13
>> You're going to get one Italian teenager to run this whole thing.
48:17
>> They're like, "If you were making $500 million, we would love to buy you for $1.
48:21
2 billion, but since you're making less than >> I don't I don't know if they're making any money.
48:27
They They must be making some money just as uh you know, a website with some ads on it or something. Who knows?
48:33
Anyway, uh let me tell you about Cisco, critical infrastructure for the AI era, unlock seamless real-time experiences and new value with Cisco.
48:42
Our next guest is here already, I believe.
48:46
Uh we have Grace Lee from Intelligence, the co-founder, raising a seed round from Index Ventures.
48:52
Brought you in a little bit early. How you doing, Grace? Good to see you. >> Great to meet you.
48:57
>> Thank you so much for taking the time to come chat with us.
48:58
Uh please introduce yourself and the company. >> Well, I'm Grace.
49:02
I'm the CEO of Intelligence.
49:04
We just launched yesterday.
49:05
We've been the team behind Design Arena.
49:06
Actually, the company started uh because we were making games.
49:11
We're trying to make a game engine.
49:11
We noticed that the models could make playable games, but the games were not fun at all.
49:16
Like nobody wanted to play them and we thought, you know, building the product probably doesn't seem like the right move.
49:21
What if we could turn it both into a product for people to build games, but also a product for the models to figure out what it is that humans like to play.
49:29
Like what are playable games that are fun? Then we started that.
49:33
We We just one of our friends linked it on Reddit.
49:34
He didn't even tell us about it and it got like 3,000 users overnight.
49:37
We're like, "Well, that's more than the game engine has ever gotten."
49:40
Um and since scaled that to Oh man, 5.
49:43
6 million people across 192 countries.
49:46
So, every country in the world except for North Korea.
49:49
We've been told that there are sanctions there, are so so we can't go in there yet.
49:54
Um and then on the Frontier Lab side, we pretty much work with all the major players to help improve their models in hard-to-verify domains. >> Amazing.
50:00
Can you walk me through how Design Arena works, the various incentives that happen to actually get people to review designs for models, and uh just the whole it feels like a uh uh a product that would have sort of like a cold start problem. How did you solve that? How did you scale it?
50:17
How does it function like in equilibrium?
50:22
>> A really good question.
50:22
So, we we took a look at the optimal form factor for these cases where users are trying to do something, but you don't really know what the optimal uh end end state is. So, designers, right?
50:33
What do they show their clients?
50:35
They actually they get the client prompt, and then they show the client multiple versions of maybe what they might want to see.
50:40
That's exactly what the user interface looks like for our users.
50:43
So, they don't actually need an incentive because it's a design tool for them that does what they want because they show them multiple versions just like in the real world.
50:52
Like how does a singer figure out if a song resonates?
50:54
It's not that they cook in a room really I like study the they just release multiple songs, right? They see what hits work.
51:00
How does a a game developer figure out what games are are playable?
51:04
They release multiple games, and they see what works.
51:05
So, for the user, they actually don't need an incentive to be on the platform.
51:09
They want to design something or make a game or make a website, and the form factor perfectly fits that.
51:14
The the models, the intelligence doesn't exactly know what the user wants, but then they'll get multiple versions, and through feedback you can get closer to the end state.
51:21
And that just happens to be in the perfect shape that the intelligence layer needs to improve more to what it is that humans want in the first place, the preference signal, the the user behavior, etc.
51:34
>> Little bit of like uh I don't know, philosophical question, but um how do you think about optimizing design for the user and what the user thinks looks good versus what is good for the business because I've been like I've just been bombarded with products and websites that feel like they're horribly designed, but I understand that they are economically valuable.
52:02
John Gruber was on the show yesterday.
52:04
He wrote a blog post recently about the Temu app being a mess.
52:08
And you have you go to Temu, it's like so many pop-ups and spinning wheels.
52:12
It is the epitome of terrible design >> Yeah.
52:16
>> in the, you know, aesthetic sense, but I'm sure every design decision that they've made has been economically justified and I don't think that they like never thought to make it clean, right?
52:30
And so how are you thinking about those two tensions like actually instantiating themselves in the work that people do when they go to an AI model and ask for a design?
52:43
>> Yes, very good question.
52:43
So it is our job to figure out what better means for this person.
52:47
If you are on the platform to make a beautiful portfolio, then you are going to give us feedback that hints us in that direction.
52:54
Through a couple of interactions, we can figure out, okay, this person is actually just in it for the visual preference.
52:59
Right, but if you're on the platform to build a highly performing website like a Temu website for example, you're probably optimizing for dollars converted at the last screen. >> Yeah.
53:09
>> And so the end signal that you're tracking is different.
53:10
The way that we like to think about it is we're almost doing the work of a PM.
53:13
Right, what a PM does is they sit in the product and they took a look at the analytics of what people are doing and they have an end goal in mind.
53:20
The PM's job is to figure out what is the right KPI to be optimizing for and then to bring that to the table of engineers and into the resource allocation and should try to get it in that direction.
53:28
So it is our job to figure out for this particular user, what does better mean for them and then measure those right signals to then label correctly and then provide that as feedback to improve the models.
53:41
>> How do you uh Jordi, please.
53:43
>> Can you do a follow-up?
53:43
I have a I have a more follow-up questions.
53:46
>> Just following up on on Design Arena.
53:46
Um how are you balancing the various downstream business opportunities that come from having a product a platform like Design Arena?
53:59
Because I could imagine you can sort of become a model router in many ways.
54:03
You can do forward deployed work and be an expert and partner to companies that are picking tools.
54:11
Uh like there's services as a software.
54:14
There's going down the financial side.
54:16
Like there's so many opportunities.
54:18
It must be hard to like you're sort of stuck in the idea maze longer than usual even after you have traction and fundraising and revenue.
54:27
There's more opportunity. What have you looked at? What's not interesting?
54:28
What has stuck out as the obvious path? >> Oh my okay.
54:34
That is the best question by the way to be asking in this space.
54:36
Like there are so many downstream opportunities that come from figuring out what it is that that people want.
54:42
What we found to be the most interesting actually is an intelligence marketplace. Right?
54:48
Um there is some This is a little bit kooky, but I do believe that there will one day be as many suppliers of intelligence as there are currently suppliers of information.
54:57
This feels like the early days of the internet. Right?
55:00
Like where anybody can can make their own intelligence.
55:02
I I don't care if that's a foundation map lab with a with a main API or something that's post trained or something that's totally off the shelf the skill, but there's like a million different suppliers of information.
55:12
And if you can be the person that best matches the supplier of information with somebody a supplier of intelligence I should say somebody who's asking for intelligence the same way that PageRank for Google Search was the critical bottleneck to get the internet um into everybody's hands.
55:28
That is the position that we actually want to be in.
55:31
So whatever the work it is that we do, we want it to feed into this flywheel that we have, and we want to make sure that we're not just good at value creation, like not just good at improving the models, but also good at value cap- value capture.
55:42
Like once the models get better at design, it's not like our work becomes less useful, it actually means our product can reach more people because they're better at design.
55:52
Um so, we care about doing things in like the the opportunities that are coming our way, which we're lucky to have a ton of inbound from from yesterday, that it feeds into this overall flywheel, that if the models get better, we also get better. >> Yeah.
56:06
>> Uh almost $60 million of revenue, I think.
56:11
I think a lot of people were um quite surprised.
56:13
Um not because the company isn't like significant and at the center of this, you know, explosion of creative intelligence, just because it it's uh uh you guys had kind of flown under the radar.
56:24
So, first I want to hit the gong uh for 60 million-ish of revenue. There you go. Great hit.
56:35
And a very and a very and a very like uh I like the ratio of the fund raise to the revenue, you know?
56:40
Normally when somebody comes on with this much revenue, they're like, you know, raising uh a billion.
56:46
I'm sure that's up next for you.
56:48
Um but I wanted to ask like what what do you think creative super intelligence looks like?
56:53
Because with like images, I think I think images are going to be solved, right?
56:58
At least like photoreal images are pretty much here.
57:03
You can imagine with a couple more turns, like at least making images with AI will be solved, and it's getting a lot easier to prompt, and um harnesses will get better at at editing and modifying and getting better outputs and all these things, but like photoreal images will be solved.
57:18
Um what does like what is what is creative intelligence look like in 1 year or 2 years down the road?
57:29
>> Creative super intelligence to us is whatever you can think will exist.
57:31
In fact, things that you can't even have the scope to think of can exist.
57:38
So, um one one thing that we like the distance between an idea in your head and it being in the real world right now is like very far.
57:46
Let's say you have an idea for a a new pen or what what a new pen might look like.
57:51
There's a very long distance that you have to travel.
57:53
You have to know how to design the pen.
57:54
You have to know how to process time.
57:56
You have to find a manufacturer to like build like it there's a very long there's a very long and because of that we have to localize on a couple of pen form factors that everybody uses.
58:07
Like it just it becomes standardized.
58:09
Um but what if um creative super intelligence makes it such that you can sustain infinite varieties.
58:17
Kind of like how you can have infinite versions of the same information being represented in in different formats.
58:24
That's the way that we view creative super intelligence which is any idea you have the instant that you have it, it is visible in the real world.
58:33
And there's no latency and friction between your ideas and and them being born in the world.
58:39
>> That sounds different than the models coming up with the ideas which is interesting. I I I I don't disagree.
58:46
I think you're I think you're right.
58:48
We were debating this yesterday about will a model be >> Yeah, yeah.
58:53
>> I think I think the question is before you even think of it.
58:54
How what is the timeline for that? That's the next thing.
58:59
>> Yeah, we we were talking about this because uh it feels like you know, mathematicians have been having somewhat of an existential crisis for >> [laughter] >> uh for a while now but especially over the weekend. >> Yeah.
59:12
>> And and I was just thinking I was joking to John yesterday just saying like you know, they're coming to us, right?
59:19
They're coming [laughter] for us not um like we're like like I'm I'm I'm you know, I I myself a creative person and right now when I look at AI-generated outputs, the ones that really resonate are ones where there was like a fundamental creative idea >> Yeah.
59:37
>> that then the model did a good job of instantiating it, but it's not like the original idea was that complicated.
59:42
The example we always use is like Harry Potter Balenciaga, right?
59:45
Like not a complicated idea, but to me to me what will be interesting, and I'm surprised no one has like really built some type of like effectively like loop around this, which is like combining two random ideas and then creating the visual sort of output. >> Yeah.
1:00:04
>> And just doing that over and over and over because it will end up mimicking like the full pipeline of human creativity, which is like original idea, which is combining two things, Harry Potter Balenciaga, combining these two things, and then just creating the output.
1:00:19
And then once you get that, then you're just running on this loop where already it feels like there's no there's no real new ideas in the world.
1:00:25
no real new ideas in the world. Like for like 100 years we've just been as humans like recombining different things that already exist, and it's sort of sad that we can't come up with very many new ideas, but then eventually the machines
1:00:38
will have just created every possible variation of every idea that there could ever be, and then a human will have an idea and and and then they'll be like, "Oh, well, actually the machine, you know, figured this out like 2 years ago, and here it is on a website." >> I mean, I think something that's pretty
1:00:53
>> I mean, I think something that's pretty incredible and and you know, is people don't know what they want until they see it, right?
1:00:58
And often times it's not even the new idea that is like the the it's showing it to a dozen people and then two dozen people and then a hundred and then a thousand and seeing what sticks.
1:01:09
Like again, this is kind of the creative process, right?
1:01:10
Like you you will draft up a a hundred version versions of of the same script and then see what are the gem moments that actually resonate with people.
1:01:18
And the resonating with people, like that's the verifier part.
1:01:21
Like that's where humanity comes in, right?
1:01:23
Like, if you're trying to get give something to people, you need a way to measure whether or not it actually it actually resonates with them.
1:01:29
>> That said, company Simile, who just raised a big round, might make uh humans unnecessary to even judge what >> I think I think we're safe.
1:01:40
Every AI lab I talk about is working on this thing called superintelligence.
1:01:43
I haven't met a single AI researcher working on room temp intelligence.
1:01:46
And so, >> [laughter] >> like, they're not even trying to displace me.
1:01:52
>> Actually, there's probably an a new lab called normal intelligence. >> Probably, probably. Uh last question. Gaming arena. We got design arena. You have gaming DNA.
1:02:00
Uh what about models building games?
1:02:04
The games go up against each other.
1:02:06
Which one did you play longer?
1:02:07
Which one did you have more fun?
1:02:08
This feels like the next thing. Is this you? Is this another company?
1:02:10
What's going to happen there? That's you. >> is us.
1:02:13
So, we've actually been working on this for a while. >> There we go.
1:02:18
>> Game dev is incredibly hard to verify.
1:02:20
And that's why it's so much fun, right?
1:02:22
Because you don't just need a really good storyline.
1:02:23
You need a way to verify if something is fun.
1:02:25
Like, that's impossible to do, you know, without people on the other side. Exactly.
1:02:28
Um so, for a while now, we've been we've been helping companies try to get better at at this domain.
1:02:33
And it doesn't just involve like the strategy and then being able to save game state.
1:02:37
You've also got to have beautiful graphics.
1:02:39
You have good multiplayer processing.
1:02:40
It's a very hard frontier. >> Yeah, yeah. That'll be a lot of fun.
1:02:45
Uh Yeah, very, very interested to [laughter] think about like, oh, I'm going to go and review models on gaming arena.
1:02:54
See you in 400 hours because I need to decide which which game is better.
1:03:00
This 100-hour game or that 100-hour game?
1:03:02
Like, that's kind of what's going to happen, yeah.
1:03:05
>> Yeah, you literally just need to put it like the way to think about it is you need to put it on the equivalent of the internet and you need to see if it gets picked up by people. >> Yeah, yeah.
1:03:11
Like, the algorithms, like the Steam store, the Instagram algorithm.
1:03:15
Like, these are the final bosses of the arenas perhaps in many ways.
1:03:20
Very interesting thing about Well, congratulations on the round.
1:03:23
Congratulations on all the progress. Thank you.
1:03:24
>> Yeah, amazing progress and thank you for Thank you I think you're doing a a public service, right?
1:03:27
If you can [laughter] get If you can get all these AI companies to make better outputs, the world will become a more beautiful place.
1:03:34
And I think it's important. So.
1:03:36
>> Well, have a great rest of your day. >> Great to meet you.
1:03:38
>> We'll talk to you later. Goodbye.
1:03:38
Let me tell you about Console.
1:03:39
Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets.
1:03:48
Our next guest is Samir Kaji from Allocate.
1:03:51
He's the co-founder and CEO.
1:03:54
Samir, how are you doing? >> What's going on? Good good guys. How are you guys doing?
1:03:58
[music] >> We're doing fantastically. Fun day. Do you drive a BMW?
1:04:02
Have you Have you been getting bombarded with Spider-Man ads? >> I I wish. No, I don't drive a BMW. >> Oh, you're lucky. You're you're lucky. You're lucky. >> You're lucky.
1:04:12
>> That's the story of the town. >> All ad supported now.
1:04:16
>> Yeah, apparently apparently it's it's not even opted out.
1:04:19
>> Does Allocate take a couple weeks off in August as a company?
1:04:24
>> There's no taking any times off.
1:04:24
Like unfortunately, like a lot of our clients were taking time off.
1:04:29
>> That's what I'm saying.
1:04:29
[laughter] That's what I'm saying.
1:04:29
If you wanted to plan like a like I think it can be good to for it at least for smaller companies to say like hey, we're all going to take vacation in this general window. >> Sort of collusion. >> Yeah, yeah.
1:04:42
>> Well, I will tell you though.
1:04:42
I did go to Cafe Venetia the other day.
1:04:44
So, I don't know if that counts as a vacation, but it was it was nice to kind of get away, but yeah, no, it's it's crazy busy right now as you guys know.
1:04:52
So much is happening in the market.
1:04:54
So many funds are raising.
1:04:56
So many companies are raising.
1:04:57
And having been in this market for 27 years, this is like the craziest I've seen it. >> Yeah.
1:05:03
So, talk to >> Does that scare you?
1:05:05
>> [laughter] >> It's obviously it's good It's obviously a great for your for your business, which we should let you introduce.
1:05:09
But uh maybe maybe introduce Allocate first and then I want then I want to get into the >> Yeah, yeah.
1:05:15
What What I give I'll give you the the quick sort of 30 30-seconds sort of, you know, pitch on Allocate.
1:05:20
So, you know, having been in, you know, the venture market working with private funds, kind of realized a few things.
1:05:25
Private funds are now more numerous.
1:05:27
Like, we went from 3,000 asset managers to 30,000 within 15 years. >> Wow.
1:05:32
>> The amount of capital that's being raised by these funds >> It's amazing.
1:05:36
>> is enormous, too, right?
1:05:36
Like, you had Andreessen raise $15 billion.
1:05:38
You had Thrive raise $10 billion.
1:05:40
So, these companies are staying private so much longer.
1:05:44
So, the private markets grew from a trillion to 17 trillion.
1:05:49
And when you look at that, where is that money going to come from?
1:05:51
Well, historically, the funds were capitalized by pension funds, endowments, foundations, and then it became clear that they needed to find new ways to capitalize themselves.
1:06:00
And one way was family offices and high-net-worth individuals.
1:06:05
The problem is it's kind of a headache to operationalize those small checks.
1:06:09
And for the people investing, they can't write $10 million, you know, tickets into a you know, name your top fund.
1:06:13
And so, they go through the wealth advisor.
1:06:17
So, we create basically the bridge between the wealth advisory world and private funds.
1:06:21
And for the wealth advisors, they have one place where they can discover, access, execute, and report on private assets.
1:06:28
So, there's $10 trillion of capital being right now managed by these independent wealth advisors.
1:06:38
If you guess what percentage is in alternatives? >> Less than five? >> 3%. Yeah, that's great. 3%. >> Okay.
1:06:46
>> Well, endowments, foundations, pensions, 20 to 50%. >> 50%. Yeah. >> Yeah, exactly. >> Yale model. >> Yeah.
1:06:54
>> We got to get everyone on the Yale model.
1:06:57
>> Yeah, [laughter] well, you know, you got to get you got to be a little bit careful on that, for sure.
1:06:59
But, you know, look, I mean, the reality is like you can't ignore the private markets.
1:07:05
You had Anthropic, Open AI worth almost a trillion.
1:07:07
SpaceX goes public for 1. 77 trillion. Like that's crazy. >> Yeah, yeah, yeah.
1:07:12
>> Yeah, and and it would be it just feels like from just like not even the just financial numbers, but just the idea of just being in the American economy and being bought into the next iteration.
1:07:23
Like there's been this discussion of going going public earlier, it's very onerous, etc. , etc.
1:07:29
But there is another world which is just broader exposure through funds and and that's a lot of what's happening here. >> 100% agree. >> Yeah. Okay.
1:07:39
Once a week, maybe twice a week, sometimes three times a week or four times a week or or even five.
1:07:44
There's a company that I've never heard of that comes on and raises half a billion dollars and you know, they may be maybe like one or two years old.
1:07:52
That I get a little bit wary because I sort of like my career came online, let's say in 2018.
1:07:59
I've been paying attention to startups prior to that, but like really was paying attention in 2018.
1:08:03
And we went through this sort of crazy period and then we saw a pretty massive correction and I got to sort of be on that roller coaster.
1:08:15
And so now, while we're back in boom times, I'm just like much more wary than I was before because I was young and uh maybe overly optimistic, right?
1:08:27
And so today uh I'm just when you when you look at the public markets, there's a lot of a lot of valuations seem relatively reasonable.
1:08:37
In the private markets today, there's you know, we saw Airtable.
1:08:42
Um if Airtable was a was a was just like I know a I know a SaaS company that has a tiny, tiny, tiny fraction of Airtable's current revenue that uh that is doing a new round well beyond Airtable's valuation and it's just because they're squarely in serving other AI companies when ultimately they're they're just as much of a software company as Airtable was.
1:09:10
And so you see this like massive kind of disconnect between exits and private valuations and so my I have like I have a lot of alarm bells going off, but I'm curious how you see it and and LPs on the platform are seeing it.
1:09:26
>> Yeah, one of the most dangerous things to say in the investing world is this time's different because rarely is it completely different.
1:09:32
So, you know, similar to you, I've had some scar tissues built up.
1:09:37
I actually, you know, started my career in '99.
1:09:39
I was at Silicon Valley Bank.
1:09:40
I was at SVB and I was lending into the dot-com.
1:09:42
And back then, you know, companies were going public based on one metric, which is eyeballs, right?
1:09:49
Like how many eyeballs, how many people are visiting your site?
1:09:52
Well, today it's AR, which, you know, as we know, can be a little creative in terms of how people are actually saying AR.
1:10:00
What's actually true right now?
1:10:00
So, I think we have to disassociate, you know, AI as like this technology innovation, which I think is going to be bigger than anything we've ever seen, bigger than the internet, bigger than mobile and cloud, and maybe the biggest innovation since the railroads.
1:10:12
The challenge though is when you have a new technology of this size and scale, especially moving this fast, the supply and demand for those companies changes.
1:10:20
So, you have so much capital being raised, people are incentivized.
1:10:24
Like if you're a VC, you're incentivized to invest in the next hot AI company which has grown from, let's say, 1 to 10 million to 100 million in revenues, knowing that full well that if you catch the tiger by the tail and you get the Anthropic's or you get the OpenAI, your career's minted.
1:10:41
And so a lot of capital goes into these companies and every single time that I've been through one of these, the companies that do win are bigger than ever by a massive degree of magnitude.
1:10:53
The issue is so many expensive mistakes. You mentioned Airtable. That was like 2021.
1:10:57
I think their peak valuation was $11. 7 billion.
1:11:02
They raised almost 1 and 1/2 billion and they sold for to Bending Spoons for $1. 25 billion, right?
1:11:06
That means common shareholders get nothing.
1:11:09
And the people that came in at the end, they may get a return on capital, but that's a horrible outcome, I think.
1:11:16
>> shareholders were getting something cuz the actual the >> The total price equity value was 2. something billion. >> Yeah, 2.
1:11:22
2 >> There's roughly 800 million, but probably half >> It's like a billion in the bank.
1:11:25
Tiny fraction of what what they would have probably marked it themselves.
1:11:30
>> that's if that's the case, that's great.
1:11:32
But that's not the case for a lot of those 2021 companies that raised at something I was saying 50 to 100x multiples for these companies.
1:11:39
Now, the multiples aren't that crazy this time around and these companies have grown.
1:11:44
The bigger challenge is like which one of these companies is actually durable?
1:11:48
Like I mean, is a big frontier model going to subsume me?
1:11:50
What happens with open weight and open source models? Still too early to tell.
1:11:54
So, I think you're right in that you should be somewhat nervous.
1:11:59
Um but at the same time, venture has always been a parallel industry, right?
1:12:04
6% of total companies actually return over 60%. That's historical.
1:12:08
I think it's even more amplified right now.
1:12:12
Um but I'm, you know, in the mindset right now that I've been through these periods and people always have short memories. Like 2021 was what? 5 years ago?
1:12:21
And you know, it's almost like we forgot 2022 and 2023.
1:12:25
Things do not go right when you just plug so much capital with such speed.
1:12:31
And so, I expect the same thing to happen.
1:12:32
I don't know when this changes and when gravity comes back in the private markets.
1:12:36
6 months, 12 months, 2 years, maybe it's even 5 years. Maybe we're all wrong.
1:12:39
But I would I would actually be willing to bet that within the next 2 years we're going to see some kind of pullback.
1:12:46
And then we'll kind of see, you know, what they say when the tide goes out, you see you see who's wearing the swim trunks.
1:12:51
And I think we'll see that next year or the year after. >> you see Oh, okay.
1:12:56
Yeah, that's a better way to put it.
1:12:57
See who's wearing the swim trunks.
1:12:59
>> [laughter] >> See who's swimming swimming. >> Well said. Well said.
1:13:03
Um >> I want to know how how are how are new venture firms changing in their construction?
1:13:09
What what you mentioned the the the the boom from 3,000 managers to 30,000, but what are you noticing over the last few years that might look different in the way a new fund gets built?
1:13:23
Maybe it's more interns or more or less banker crossover types or more operator, more founders.
1:13:33
Are there any trends that you've noticed uh that you're seeing okay, that's clearly working at certain funds, more people are are following this even in the way they're structuring or the or the pacing or anything uh anything trend-wise around new fund formation?
1:13:48
>> Yeah, and and new fund formation slowed down, you know, you know, for sure over the last few years, right?
1:13:52
It was at a fever pitch in 2019, '20, and '21.
1:13:54
In fact, everyone felt like it was cool to be a VC without understanding that it takes forever to know if you're any good, to get paid, all those things.
1:14:04
Fundraising's really tough. >> Yeah.
1:14:06
>> And you know, a lot of it what came down to when you have so many funds in the market, everyone's searching for a differentiation.
1:14:10
And so they create these things, which is like, I'm going to create a talent team.
1:14:14
I'm going to going to create, you know, um a AI sort of way to vet things.
1:14:19
And I think these are all around the edges, but any venture firm at the end of the day, all that matters is, you know, sourcing, picking, and winning.
1:14:26
And you got to do two of those three things really well.
1:14:30
If you're a really small firm, it's sourcing and winning, candidly.
1:14:32
Like, I have no clue if you're a good picker, and there's so many false positives, right?
1:14:37
So I think people sometimes lose the plot a little bit and say, let me create something really unique that I can tell my LPs versus focusing on, am I going to see the greatest companies or the right entrepreneurs in the thesis and once I see him and my going to win given sort of the competitive arena and I think that it's really tough to be an emerging fund. I mean raising capital.
1:14:56
I think it's a great time to start if you have like a a reason to win and a reason to exist.
1:15:03
Now big funds are different like let's they're playing a different game.
1:15:09
You know somebody raising a 10 billion dollar fund is just trying to get into the very best companies and plug a billion dollars into that company.
1:15:16
>> Has have how often do you see someone coming across and pitching sort of a a new firm that feels like an old firm in the sense of we're going to go and compete and win 20 million dollar series A's and B's or something around there as opposed to the early fund manager 50 million solo GP
1:15:39
they're going to do a 100k check into this and like little add-on that feels more winnable to your point about the importance of winning the the Mount Everest of winning and picking is probably you're going to go you know lead that major that major round without the signal from a tier one. >> Yeah, I mean look if you're going to do
1:15:58
>> Yeah, I mean look if you're going to do a 20 million dollar you know series A which is not going to be like a big frontier laptop a company or one of the big mega rounds.
1:16:08
You have to I mean to raise them in a in a fund you probably want to raise 350 to 500 million dollars, right?
1:16:15
And who is going to give you the money?
1:16:17
It's people whereby you have a track record somewhere else.
1:16:20
So we have seen a few and you know this is all public now but chemistry is an example of one where you had three people one from Index one from Andreessen and one from Bessemer, right?
1:16:31
They they come together they are clear series A will lead and they kind of sit in the middle between the seed funds and the big mega shops who are doing different types of series A's or different types of series B's, I I see very few of those though.
1:16:44
I because the bar for those is pretty high. >> Yeah.
1:16:48
>> And if we look at 10 funds, maybe one falls into that bucket. >> Yeah.
1:16:52
Yeah, it does seem like it's maybe an underrated white space because there's so many funds that can they're so big at this point even though they might be able to win, they're also not that upset if they lose that round cuz they're like, "Yeah, okay, we'll just come in with a 100 million later and get our position."
1:17:10
Like it seems fine anyway.
1:17:12
>> What how have you how did you looking back like what's the takeaway from the solo GP I'll call it meme because it's interesting because it was something that became like very desirable and was and it was something that I think LPs were were interested in.
1:17:28
It's something that certainly people that aspired to be venture investors.
1:17:34
I think a lot of people have this idea of like, "Oh, it'd be amazing to be like a solo founder or solo GP, right?
1:17:40
You get all the glory, all the economics or whatever."
1:17:42
But it's interesting because it just feels like a solo GP when it works, it's amazing, right?
1:17:53
I think of a lot, you know, Gills of the world as you know, the the top of the mountain there.
1:17:58
But there's so many cases where for LPs, it's like, "Well, it'd be great if you had like a solo GP would be cool, but what if you had three or four partners that were all fantastic?"
1:18:06
And it just increases your lock surface area.
1:18:09
And then for a founder, it's like, "Yeah, you want to basically pick one partner out of firm to partner with, but it's awesome if there's a few other partners at the firm that can maybe make an introduction or open up their network or whatever.
1:18:23
So, it feels like something that in practice like is it was like a cool idea and there was this moment around it, but now if you want to win, why would you why would you even like brand yourself in that way?
1:18:36
>> I I I look, I think it's can still work and I'd rather back a solo GP than somebody that, you know, decides they want to start a venture firm and decides that to raise capital, I just need to bring on a partner and they never worked with that partner.
1:18:48
Because, you know, the problem with partnerships, too, is like there's a lot of politics, right?
1:18:52
Like, you know, do we really, you know, are we aligned?
1:18:55
Or, you know, how does decision-making work?
1:18:56
If a deal is not consensus within the partnership, does it get done?
1:19:00
And those can actually create, you know, Bessemer, for example, has this great you know, anti-portfolio.
1:19:05
If you go to their website, all the stuff they missed.
1:19:06
And I guarantee some of those misses were, you know, one person had a ton of conviction, but they couldn't get it through the partnership, right?
1:19:13
And so, you know, solo GPs at least can move really quickly.
1:19:15
They don't have to go through a committee.
1:19:18
Even a lot of people like you mentioned, he has a team, actually, right?
1:19:19
So, he's solo GP from an investing standpoint, but he's got >> valor. >> Yeah. >> Stolen valor.
1:19:27
>> Oh, he has a he has an he has an amazing team, but like you can't I can't name any I can't name any >> also the solo GP branding was very much like foisted upon him.
1:19:34
He was not like, I will never hire anyone.
1:19:36
It was more just like something that was fun to talk about.
1:19:40
>> is a guy like Oren Zeev, right?
1:19:40
So, Oren I don't know if you've Oren has been doing it and he will say I'm a solo GP, I've no admin, I've no other partners, I've no one on it's just me.
1:19:48
And that's what you're going to get and like he's done, you know, generally very well for himself.
1:19:53
You know, you've seen how everything's public on him.
1:19:56
And so, I look at it and say the bar is higher and a lot of solo GPs realize it's pretty damn lonely, right?
1:20:00
So, you're you're basically doing the raising, you're you're working with companies, you're trying to do everything, you're running the firm.
1:20:05
And then you're like 4 years into it and you're like, wait a second, um you know, my fund is trading at a 1.
1:20:10
1x because I went crazy in 2021.
1:20:13
No one's giving me money.
1:20:15
I'm I'm pulling a salary of the $20 fund that I could probably get in a in a quarter working somewhere else and you're like, why bother?
1:20:23
What's the purpose of doing this? >> Yeah.
1:20:27
>> Have you seen anyone uh try and tap the traditional venture capital backers, the LP base for something that looks like more competitive with a Thrive Eternal.
1:20:39
Like, I'm going to go buy a baseball team.
1:20:43
And I want to tap Yale for that, or something like that.
1:20:47
You know, you as an example, as an example. >> not not that much.
1:20:50
I mean, Thrive is pretty unique in everything they do.
1:20:52
I think they're really progressive and Josh and Seema have done a like fantastic job.
1:20:57
But Hamilton Lane Partners is also a catalyst.
1:20:58
They've done some pretty interesting things.
1:21:00
I mean, they've gone into hospital systems, right?
1:21:03
So, they've done things where like a PE and credit. >> Yeah.
1:21:06
>> And, you know, that that is more like private technology finance and going into these adjacent areas to create competitive advantages.
1:21:12
Because when you're raising $10 billion, guess what?
1:21:16
There's about 15 firms that you're going to compete with.
1:21:17
So, what is the differentiation outside of your partners? >> Yeah.
1:21:22
Uh, do you think the situational awareness story changes RIA consideration? >> I don't think so.
1:21:29
I mean, look, I mean, you know, that was a very unique thing.
1:21:32
I mean, the guy had I mean, the guy is incredibly smart and, you know, he's he still is up, you know, overall from, you know, the day of.
1:21:39
Um, but when you drop that much and use that much leverage, like, it's going to be a big blowup.
1:21:44
RIAs in themselves, like, you know, are we talking about RIAs from the asset manager side or RIAs from the wealth manager side?
1:21:50
>> just a there was just a conversation a while ago about, oh, VCs, like, they often have really great deep understanding, sometimes board seats in these public companies, they take the company public, then the stock trades down, but they know that there's a really great thesis.
1:22:03
Maybe they should be holding on behalf of their LPs instead of distributing.
1:22:06
The RIA sort of sets you up for that.
1:22:08
I'm less talking about RIAs as like going long crypto or going long secondaries.
1:22:12
I'm talking about playing in the public markets.
1:22:17
Someone in the tech community just got their hands a little burned.
1:22:18
Uh, does that change like the uh, appetite from LPs to allow venture capitalists to play in the public markets at all?
1:22:26
>> Yeah, I don't most LPs want them their VCs to play in the public market.
1:22:30
Obviously, Sequoia, everyone knows, you know, has a long hold only.
1:22:31
Then there's crossover funds that do it.
1:22:35
But it's just a different skill set, honestly.
1:22:37
And like you know, if we're an LP, right?
1:22:38
Or somebody else is an LP, you're at the end of the day paying the GP to, you know, invest in private companies and then exit those private companies at at some portion where we can make the decision on what to do with the public stock. >> Yeah.
1:22:53
>> Uh you were at SVB in 1999.
1:22:56
Any good stories of venture capitalists using leverage?
1:23:02
>> No, but what people >> surprised I I like we heard John Murray talking about this yesterday because like, you know, the venture capitalists, or at least there was some that were kind of doing a little grave dancing on Leopold last week and and we were talking yesterday after the show being like, "Yeah, it's funny that VC funds can't blow up, you know, it's just like a slow death." >> If if they die, yeah. >> If if they die.
1:23:27
But I'm wondering if there was ever a period in Silicon Valley history that Silicon Valley was like, "You know, we should be using leverage."
1:23:33
And then and then some some sort of set of events that led to that not being very common.
1:23:41
>> Now now fortunately not too much, right?
1:23:44
So not in terms of true leverage.
1:23:44
Now, there are people that have used NAV lines, but you haven't been an RA.
1:23:47
Most VC firms are exempt reporting advisors, so they're not able to do those things.
1:23:53
What we did see, and this is less in '99 but 2008, right before kind of the GFC started, there were some funds that did warehousing.
1:23:59
And what they would do is they would go to a bank like SVB and say, "We're raising a $200 million fund.
1:24:07
We are going to start making investments before our first close.
1:24:08
Can you lend us the money to make those first few investments?" And guess what?
1:24:13
There was a couple that did that, more on the fund of funds side than, you know, the you know, direct side. And guess what?
1:24:18
The market changed, they couldn't raise capital, and they had this huge warehouse sort of facility that they they had to pay off with no capital. >> Interesting.
1:24:27
That is a crazy scenario.
1:24:29
Yeah, so it has happened technically.
1:24:31
Thank you for the history lesson.
1:24:31
This is exactly what we were looking for.
1:24:35
Perfect guest for our earlier debate. >> Very cool.
1:24:37
Well, it's super fun >> Really really fun hanging.
1:24:40
>> Great to finally meet, and let's we're we're trying to get a pulse on what's happening.
1:24:45
We think what what's happening in your world ends up sort of >> echoing >> echoing later on and with with a lot of the coverage that we do.
1:24:55
So >> Yeah, so we'd love to do it again.
1:24:58
>> You guys do a You guys do a great job. Big fan of the show. Great guest.
1:25:01
Actually, my board member was on your show recently, Carter Ream. >> Oh, yeah.
1:25:06
>> Yeah, Carter from M13, great guy.
1:25:06
And whenever you want me to back on, I'm happy to do it. >> That'd be awesome. >> Thank you so much. >> Thanks, man.
1:25:13
>> We'll talk to you soon.
1:25:13
Let me tell you about the New York Stock Exchange.
1:25:15
Want to change the world?
1:25:16
Raise capital at the New York Stock Exchange.
1:25:21
Up next, we have John Quinn, the most feared lawyer.
1:25:25
Welcome back to the show. Great to see you.
1:25:28
>> So, we we have a video that we'd like to play for you.
1:25:33
I >> I want to play I want to play it for John.
1:25:34
I want to play it for John.
1:25:36
>> We made a heavy metal song about you, the most feared lawyer. >> About time. So many >> About time.
1:25:40
[laughter] >> About time.
1:25:41
Can we get it up on the big screen?
1:25:43
>> Play Play the Play the last 45 seconds, man.
1:25:46
>> This is what John was spending like probably an hour last night working on.
1:25:50
>> Burning the midnight oil.
1:25:51
>> Burning the midnight oil for this.
1:25:51
You can You can turn around and >> We got the full the full AI rendering version of you.
1:25:57
>> Let's get it louder, please. >> Here we go.
1:26:06
>> [music] >> Fear in THE AIR. NAMES CALLED. THE ROOM GOES STILL.
1:26:14
THEN THE BODY TURNS >> [music] >> IN TRUE HEAVY METAL FASHION, it's uh uh extremely loud.
1:26:27
But I think this really captures [music] the spirit of what you bring to the courtroom, what you bring to the legal profession.
1:26:32
Just uh total fear and chaos.
1:26:37
Yeah, the first, of course. Of course.
1:26:40
>> [music] >> Thank you very much. We'll send it.
1:26:42
You can You can circulate it with the team.
1:26:45
>> [laughter] >> So, we're going to talk about agentic AI >> Let's do it.
1:26:50
>> Yeah, I want to talk about that.
1:26:50
>> But I have some news this morning. >> Give us the news.
1:26:53
>> Do you mind if I do if I reveal something? >> Please.
1:26:56
>> The general press doesn't have yet? >> Absolutely.
1:26:58
>> So, it's a case that our firm has and that I personally worked on. >> Okay.
1:27:02
>> Within the last 2 hours, I got the opinion from the Ninth Circuit Court of Appeals. >> Okay.
1:27:06
>> The case is Amazon versus Perplexity. >> Woah.
1:27:10
>> And it's a very interesting case right at the intersection of agentic AI and e-commerce. >> Yeah.
1:27:16
>> So, we represent Perplexity. >> Yeah.
1:27:19
>> Amazon sued Perplexity because Perplexity has an agent, the Comet, that and that users can deploy to go shopping and doing whatever.
1:27:29
Amazon didn't like Agent's Comet going to its website and buying stuff. >> Yeah.
1:27:35
>> I think because it doesn't have eyeballs, >> Yeah.
1:27:37
>> can't see ads, can't be you know, can't be upsold.
1:27:42
>> So, Amazon sued Perplexity under the Federal Computer Fraud and Abuse Act, which there's a you can bring a civil claim under that for damages.
1:27:48
It's also a criminal statute.
1:27:51
What it requires, the elements are that you access a computer without permission, that, you know, you take information you get information, and you cause damage. >> Mhm.
1:28:04
>> Amazon sued Perplexity saying, "Your agent is being deployed.
1:28:05
We don't want that to happen.
1:28:07
We've told you we don't want your agent on our website shopping and whatnot."
1:28:12
Very unfortunately, and they moved for a preliminary injunction to shut it down immediately. >> Yeah.
1:28:17
>> Very unfortunately, the district court up in San Francisco entered a preliminary injunction a few months ago.
1:28:22
I mean, we lost at the trial court level. >> Mhm.
1:28:26
>> But there's nothing a trial court can do wrong that a court of appeals can't fix. >> Okay.
1:28:31
>> And just 2 hours ago, we got the opinion from the ninth circuit.
1:28:33
And the ninth circuit understood that Perplexity is not accessing the Amazon's computer. >> user, the user? >> The user, yes.
1:28:43
The user downloads the comment, >> Yep. >> deploys it, >> Yep.
1:28:47
>> and sends it to go shopping. >> Yep.
1:28:49
>> So, justice prevailed.
1:28:52
But that's I mean, it's an interesting question at the intersection of agentic AI. >> There you go. >> Very interesting. >> All right, yeah. Very, very interesting.
1:29:02
>> How foundational is this?
1:29:04
>> Because it because Perplexity is just one company that is trying to do this type of thing.
1:29:08
I think there's a lot of consumers that want the ability to deploy AI, whether it's self-hosted open source.
1:29:15
There's not even a company behind it.
1:29:16
They want to be able to do these types of things.
1:29:19
At the same time, there's going to be corporate interests that don't want this. >> of course.
1:29:23
I mean, and we're very early stages in to understand how traditional legal principles >> Sure.
1:29:29
>> you know, apply to agents and agentic AI.
1:29:31
I mean, take the subject of something very basic, contracts. >> Yeah.
1:29:35
>> I mean, it's well-known, established that, you know, in in you can establish a contract between electronic interaction of agents.
1:29:41
Doesn't have to be human being.
1:29:43
You know, you can have a binding contract. >> Okay.
1:29:47
>> But things can go wrong. >> Yeah, of course.
1:29:50
>> I mean, the agent may not follow instructions or optimize for the wrong thing.
1:29:54
For example, you tell the agent, go out I need some cloud computing time.
1:29:58
You know, go out and buy some compute for me at the cheapest possible price. >> Yeah.
1:30:03
>> And the agent does that and goes and enters into a long-term contract with huge cancellation penalty. >> Yeah, sure, sure.
1:30:10
>> I mean that's that's a problem. >> yeah.
1:30:12
>> So, and just the sheer number of contracts entered into by agents.
1:30:15
Agents can enter into thousands of contracts.
1:30:20
>> But before somebody's realized there's been a mistake.
1:30:21
[laughter] >> You know, something's gone wrong. >> That is so true.
1:30:25
>> So, I mean what do you do?
1:30:25
You know, if you find out your agent has gone out and entered into a contract that's not not what you're interested in, not what you intended.
1:30:35
I mean one thing we know is you can't say it's the AI's fault. >> Okay. >> It's not my fault.
1:30:38
I mean there's even a law in California, I I think it was enacted this year. >> Mhm.
1:30:43
>> Civil Code Section 1714 that says you can't blame the agent.
1:30:46
You know, it's it's your agent, you're responsible.
1:30:49
>> What's the human precedent?
1:30:49
Cuz big companies, I'm sure for a long time have had issues with an employee entering into a contract, you know, signing, maybe they have >> I mean it's it's very interesting and it's kind of the same concepts I think they're going to apply in the agent context.
1:31:04
That is, did the employee have authority? >> Yeah.
1:31:08
>> And even if they didn't have authority, did they have apparent authority? >> Yeah.
1:31:11
>> If you deployed the employee, they had a job title, they had the card, seemed like they had the ability the authority to enter into that contract, you're probably going to be bound by that. >> Mhm.
1:31:19
>> Similarly, with an agent, I mean the presumption is the agent's out there in the marketplace buying things. >> Yeah.
1:31:25
>> The presumption's going to be that the contract they entered into is binding and you're stuck with it. >> Yeah.
1:31:29
>> But there is a concept of mistake that can come to the rescue.
1:31:32
If the agent goes out there and buys, you know, because of a parsing error or something in the software, buys 10,000 of something which historically you've only been buying 100 of. >> Yeah.
1:31:44
>> That may put the counterparty on notice that wait, something's gone wrong here.
1:31:48
If the counterparty is on notice that this is a mistake, the counterparty, you know, you may be able to get out of the contract. >> Yeah.
1:31:56
>> I mean so that's that's just kind of a kind of an example.
1:31:58
So, you what you these traditional legal concepts about authority, apparent authority, >> Mhm.
1:32:04
I think are going to come in in play in agentic AI as well. >> Yeah.
1:32:08
Are there any what what precedents are are people drawing on to understand where electronic contracts go?
1:32:15
Is there are there any learnings from like smart contracts and what the whole discussion around cryptocurrency or is it more like what what's been built up over terms of service because yeah, this is like an almost an entirely new paradigm and I I don't know exactly if this is >> I call it the the problem of new wine in old bottles.
1:32:35
And this whenever there's a new technology, we see this.
1:32:38
We have traditional concepts about contract, how you form a contract, what is agency, and then we have to adapt it to this new era where you have electronic agents that are interacting with each other. >> Yeah.
1:32:53
What do you think the equilibrium is?
1:32:53
What do you think the equilibrium is? Do you think that there's going to be a flurry of lawsuits and settlements and then sort of a new new establishment of like standards, norms, default contracts because Silicon Valley's been through a whole turn of contracts where there used to be equity financings, then there were a lot of convertible notes, then there was
1:33:13
eventually the safe contract which is a much lighter version of a financing that moves a little bit faster but can still hold some of the weight and so like is is there a Do you think there's a there's going to be demand for some sort of standard contract that agents can sort of execute that that builds on the shoulders of all the contract law but still allows for flexibility of >> think we are going to see contracts like that for sure. >> Yeah. >> Yeah.
1:33:41
>> I mean, but still we're always going to have the potential, you know, for the rogue agent that does something that does it exceeds the permissions.
1:33:47
But it's all the problem is what's built into the software. >> Yeah.
1:33:52
>> So, it's important to build in safeguards like caps, spending limits and the like.
1:33:56
And for important and novel transactions, getting a human in the loop.
1:34:00
But the transaction can't actually close, money can't change hands until some human being has actually looked at it.
1:34:07
>> So, I I think that's very important.
1:34:07
And then also people need to audit, you know, the history of transactions.
1:34:11
As I said, you can have thousands of these contracts being entered into and performed before somebody realizes anything's been going wrong.
1:34:18
You need a system where you're actually auditing them and catching >> Yeah.
1:34:23
>> catching those errors.
1:34:24
>> Uh do you do you know where DocuSign came from?
1:34:28
Was that a legal innovation?
1:34:30
Because we think of it as this software company that it says a lot of employees, they've built this program for >> A lot. >> e-signatures.
1:34:39
They have a lot of employees, but >> What would we do without it these days?
1:34:43
>> But but was there a moment where e-signature was illegal, was not binding, and then it flipped, or did they sort of adapt to the conventions of what counts as a binding legal signature, and sort of slot in, and then establish themselves?
1:34:59
>> Yeah, I I don't know the specific history on that.
1:35:01
I mean, the guy who founded that company I'm blanking on it right now. >> Yeah.
1:35:05
>> He's actually a client of ours. >> Oh, no. >> Yeah.
1:35:07
>> [laughter] >> Um so, I'm blanking on that.
1:35:08
So, I don't know what the history of that is, actually. >> Yeah.
1:35:11
I'm just wondering if there's like learnings from like other times when we've had to take something that happens in the real world and adapt it to the internet.
1:35:18
Um and and thinking through like the other foundational cases, maybe net neutrality, these different debates, because you have to imagine that consumers will want AI to go shopping for them.
1:35:30
And like and that's going to happen, but they're going to want it to be safe, and and then companies are going to want >> want surprises.
1:35:37
They don't want to realize they got 10,000 toothbrushes instead of the 10 that they wanted.
1:35:43
>> that that happens just on, you know, Instacart.
1:35:44
You order one banana, and you get one truckload of bananas. It happens.
1:35:49
>> I I I there's also going to be issues in tort law.
1:35:52
You know, if you deploy an agent >> that causes harm or causes damage, >> Yeah.
1:35:57
>> how does tort law apply to that?
1:35:59
Concepts of negligence, products liability. >> Yeah.
1:36:03
>> I mean, it it's an unsettled question in the law whether software is a product. >> Yeah.
1:36:07
>> You know, like we talk about products liability for defective >> Sure.
1:36:10
>> features in cars and the like.
1:36:12
>> So, there's a whole body of law surrounding that. >> Yeah.
1:36:14
>> Should that apply to, you know, agents that go out and do something that causes damage?
1:36:20
I mean, we're seeing cases being filed where, uh, you know, the allegation is that the the, uh, agent persuaded somebody to engage in self-harm or the model did, you know.
1:36:32
>> And so, >> a defective product? That's the question.
1:36:35
>> so concepts of negligence, products liability and the like will apply. >> Yeah.
1:36:39
>> And then people, you know, like in this case, Amazon tried to keep the Perplexity out from, uh, you know, its site saying, you know, "We don't You don't have permission.
1:36:48
You know, we're not we're not permitting that."
1:36:50
But, I mean, we've all read about instances now where agents have gotten loose, >> Yep. >> entered into sites. >> Yeah.
1:36:56
>> So, what are the legal ramifications of that?
1:36:58
There's a concept called trespass to chattel.
1:37:01
Like, you know of trespass on land, a chattel is a thing. >> Okay.
1:37:05
>> So, there's also something that called and this is traditional traditional concept in the law of trespass on a chattel chattel, whether it's trespass on a server, computer and the like. >> Yeah.
1:37:15
>> It hasn't gotten very far, but there's some cases where those types of claims are being raised as well. >> Okay.
1:37:20
Yeah, how how have you been processing all these cybersecurity incidents?
1:37:23
It feels like these they haven't I haven't seen lawsuits filed.
1:37:28
It feels like these will be discussed as settlements.
1:37:30
Already the CEO of Hugging Face was sort of, uh, outlining what a non-legal recourse could look like.
1:37:38
Um, where do you think this all goes?
1:37:40
Do you think there needs to be, um, some precedent-setting legal case to create the template for how these things get worked out if they have them more and more.
1:37:51
>> I mean, the way the way this, you know, we live in a common law country, of course.
1:37:54
So, we have legislation, and maybe there'll be a need for legislation at some point.
1:37:59
But, until the legislators act, and it's hard to get legislators act act in this country, the courts will be deciding these on a one-off basis, establishing precedents.
1:38:10
So, courts still will look to what other courts have done. >> Sure.
1:38:13
>> I mean, the issue that's been teed up in dozens of cases and that everybody's familiar with is it copyright infringement >> Yeah.
1:38:19
>> train a model on copyrighted material. >> Yeah.
1:38:22
>> I mean, there are dozens of cases that are teeing that up.
1:38:24
We have some indications from a couple of cases so far suggesting that that's not infringement, but it's what's called fair use.
1:38:33
>> I mean, ultimately, all these new issue issues that are being teed up, we're going to have answers to them. >> Mhm. >> But, it'll take time. >> It'll just take time.
1:38:39
>> depends on the persuasiveness of the judges' opinions and the precedents.
1:38:43
And, some things will end up in court of appeals and maybe even the US Supreme Court to make new law.
1:38:48
>> How is the legal industry grappling with questions of liability around AI?
1:38:52
If I have a law firm, my lawyer uses AI, are there is there any nuance there or has legal industry had to grapple with um what liability, what uh what the the services delivered might look like in a world where there's AI agents that are going off and doing discovery or all sorts of different things?
1:39:14
>> Well, lawyers are going to be responsible for what they what the AI does.
1:39:17
I think there's no question about that.
1:39:18
You've you've heard about these cases where lawyers have filed briefs in court that have hallucinations, cite to cases that don't exist, laws that don't exist, or cite to cases that exist, but don't stand for that proposition. >> Yep.
1:39:33
>> Courts don't have >> What do judges think about that? >> very happy with it.
1:39:36
>> It's like when I'm when I start reading something and I realize that it's just been just a prompt effectively.
1:39:43
>> No, I mean they uh lawyers have been sanctioned for doing that.
1:39:47
Uh it's something that I think every law firm has to be vigilant about because I mean you can't get the models.
1:39:51
I mean you can try to tell Claude, you know, don't make anything up.
1:39:54
I only want double check.
1:39:56
Make sure the case really exists.
1:39:58
And it'll kind of be apologetic and say, you know, I'm just an LLM. I can't guarantee that.
1:40:02
[laughter] >> Uh how are how are the lawyers that you talked to at your firms and and just other friends in the industry processing just the progress of AI.
1:40:16
We had uh the breakthroughs from one of OpenAI's new models on Saturday that kind of rocked the math world, but I'm curious how lawyers are just processing the models, you know, sort of broad set of abilities today.
1:40:35
>> Look, lawyers are among other things wordsmiths. >> Yeah.
1:40:39
>> I mean so we have targets on our back.
1:40:42
Um it's amazing how much you know, how much quicker we can get to a finished product that we'd actually want to use, serve on the other side, or file with a court.
1:40:52
And you know, I personally think most of our profession is whistling in the the dark that they don't realize what's going to come.
1:41:00
There's a bit of an innovator's dilemma here because big law firms are doing really well. >> Yeah.
1:41:05
From all these AI >> Why change?
1:41:06
What what's what's the issue?
1:41:08
So >> Well, also I'm assuming a lot of the most high profile cases are AI related.
1:41:16
So at least in the moment it's creating this sort of surge in demand.
1:41:20
>> Yes, there's a lot of cases relating to AI, these novel legal issues like this perplexity case we never would have had 18 months ago.
1:41:29
The dispute between Sam Altman and Elon.
1:41:34
Just on many different levels it's generating new work in addition to new types of issues.
1:41:38
Uh but I think it's fundamentally going to change the legal profession and the way law is practiced. >> Mhm.
1:41:44
>> I mean, most law firms bill by the hour.
1:41:47
And if I can press a button and get a work product that's 80% or 90% there, think of all the time the hours that have been saved. >> Mhm.
1:41:56
>> And that really needs to be passed on. The client expects that.
1:41:57
They're expecting to see that that savings.
1:42:01
>> You said big law is doing well right now financially? >> I assume so.
1:42:05
>> Yeah, I mean, the the law firms, you know, the biggest law firms are doing very, very >> Doing very, very well.
1:42:09
What was the hardest year financially for big law or Quinn specifically?
1:42:16
>> So, we only do disputes work. >> Yeah.
1:42:18
So, I imagine it's not that cyclical, right?
1:42:21
>> There's not It's not A lot of people think that litigation is a is cyclical.
1:42:25
There's more litigation when there's a downturn in the economy >> Yes, cuz I'm not sure things are going well.
1:42:30
>> I don't think that's true. >> Okay.
1:42:31
>> I mean, you'll have more of a certain kind of litigation when there's a downturn. >> Yeah.
1:42:35
>> Distress-related, reorganizations, bankruptcy-related litigation.
1:42:37
But when the and when there's a downturn, you know, people can't perform their contracts.
1:42:43
You know, so you have those kinds of issues.
1:42:46
But when things are going well and there are profits, companies will bring claims that they might pass on.
1:42:51
You know, they'll pick up the nickel, you know, on the floor and say, "Okay, we're going to we're going to pursue that."
1:42:57
So, I mean the disputes world in in America is is generally pretty good.
1:43:02
I mean, we we live in the most litigious country in the world.
1:43:05
Our our legal culture is uh leads the league in that respect. >> Is that good?
1:43:14
>> [sighs] >> I mean, it depends on who you ask.
1:43:14
I think that it's a feature of uh our individualism. >> Mhm.
1:43:21
>> It's a feature of uh people's feeling of entitlement that I have a rights. >> Mhm.
1:43:27
>> You know, I can get my day in court. >> Yep. >> I can get a hearing. >> Yeah.
1:43:31
>> Um so, those are good things about it. >> Mhm.
1:43:33
But on the other hand, there's a point of view that it's really a lot of litigation is a tax on on doing business.
1:43:39
And and we know that there's a lot of frivolous claims that are brought as well.
1:43:42
So, you ask different people, you'll get different responses to that. >> Mhm.
1:43:46
Uh right now, you have these, um, you know, gigawatts of compute being brought online and in a lot [snorts] of instances, there will be like a hyperscaler that is signing up for a long-term contract and when you look at some of these neo cloud businesses, a lot of people like to look at them and say, "Well, look, you know, this is a contract with a major, you know, trillion-dollar company.
1:44:11
That trillion-dollar company is definitely good for it."
1:44:13
Um >> And Nvidia's back there somewhere guaranteeing performance >> [laughter] >> as well and supply.
1:44:19
>> Yeah, Nvidia's usually usually involved, but, um in actually playing some of these things out, let's say in the future, there's a a compute guat.
1:44:31
Um, and there's, I think you should debate when that will happen.
1:44:33
Maybe it happens in 10 years, maybe it happens in 1 year, maybe it happens in 2 years. No one No one knows.
1:44:40
There's a lot of indicators that, you know, you're just going to see demand outstripping supply for a long time.
1:44:45
But what do big companies do when they're in a contract that they really don't like and they want to get out of it even though they signed on the dotted line and it's a bulletproof contract?
1:45:01
Because Because it's not like you know, the biggest company in the world that people are, you know, has amazing credit right now that signed the contract.
1:45:07
People are like, "Oh, it's guaran- you know, it's fully guaranteed."
1:45:09
But there's a lot of things that companies of that scale can do if they're in a situation that they don't like.
1:45:16
>> Well, I mean, it's tough.
1:45:17
Um they can Look, if you're if there are big obligations on both sides, big commitments on both sides, and one side doesn't want to perform.
1:45:26
A lot of times that precipitates a negotiation cuz they need each other, right?
1:45:30
They've each made commitments to each other. >> Yeah.
1:45:33
>> So, if you and I have one of these contracts and I have a problem, then you have a problem, too. >> Yeah.
1:45:38
>> So, we got to try to find some way to work that out.
1:45:40
And oftentimes, that's what happens.
1:45:43
But I think uh a lot of these structures, financial structures, especially for data centers, are incredibly complex.
1:45:49
You have a SPV at the middle of it, has to deal with a tenant.
1:45:54
You have all kinds of financing, bond financing, securitizations, private credit, uh with cross-default provisions.
1:46:02
So, if somebody defaults, you know, the whole thing potentially goes down.
1:46:07
I think on some of these data centers, we're probably going to see some reorganizations. >> Mhm.
1:46:13
>> You know, everything Everything Look at all the money that's going into this and all the data centers that are being built. >> Yeah.
1:46:20
>> Are all of them 100% going to come online when they're supposed to come online and everybody's going to do exactly what they contracted to do? >> Yep.
1:46:27
>> You know, I don't I don't think that's going to happen.
1:46:28
So, there'll be some work out. >> Mhm.
1:46:31
>> And the the challenge is that those data centers face from you know, I've been told by uh one neo cloud that the biggest problem they face is electricians. >> Yeah.
1:46:41
>> Just getting the electricians to do the work.
1:46:44
Uh so, it's it's there's a shortage of everything from electricians to power to chips, you know, to compute.
1:46:49
So, I mean, it's it's not going to end perfectly for everybody. >> Yeah.
1:46:56
But you would predict uh billions of dollars worth of billable hours dealing with uh all that.
1:47:05
You know, is that a safe prediction?
1:47:07
Like if you have a trillion dollars of of this kind of like complicated capex investment, then you're probably going to get at least a billion, couple billion of of billables.
1:47:18
>> Those those are a lot Billions are a lot of hours.
1:47:20
I don't know if I >> but it seems like, you know, you have >> [snorts] >> thousands and thousands, you know, of these projects.
1:47:28
>> Look, if some of them go into reorganization and the equity gets wiped out, there will be negotiations, there will be what are called liability management exercises, there may be bankruptcies as well, and yes, lawyers will be very involved in those workouts.
1:47:44
>> Uh there was some reporting recently that uh one group that is pushing back against the rollout of autonomous vehicles are trial lawyers.
1:47:54
Or or sorry, not trial lawyers, they're personal injury lawyers who uh seem to be worried that in a world with, you know, full autonomous driving across the United States, there'll be less accidents.
1:48:08
Um uh does that surprise you at all if that were to be true?
1:48:13
>> I hadn't heard that, uh but I guess it nothing would surprise me about what the plaintiffs tort bar might do. >> Yeah.
1:48:20
>> You know, so >> How would you reform Would you consider the law if if you had if you if >> you support anti-monopoly, so no corporations can sue each other?
1:48:28
>> [laughter] >> Um how would you what kind of reforms would you push for if you were uh king of the United States for the day?
1:48:38
Around specifically around personal injury law.
1:48:40
Cuz when you drive around LA, it's honestly very depressing.
1:48:43
It's like if you look up, you'll see a billboard that's basically saying, "Hey, do you want to sue someone?" You know.
1:48:51
Um and that signal to me is that there's just, you know, billions of dollars of revenue.
1:48:58
>> Look, there there there's no doubt.
1:48:58
I mean, there are personal injury mills.
1:49:02
Uh lawyers that process high volumes of claims.
1:49:06
Um I've never worked in one of those factories, but I sometimes wonder whether lawyers there's ever lawyers eyeballs on what's filed in the discovery and the like.
1:49:17
I think a lot of those are those cases are are are brought to settle. >> Yeah.
1:49:25
>> As quickly as possible.
1:49:25
So, sometimes you wonder whether the client's interests are are really number one.
1:49:31
But, you know, this is I don't work in that field. So, I speculate.
1:49:35
>> it does feel like it would be a very different situation if every automobile accident involved going up against Waymo with perfect camera footage from every angle for every There's no testimony of this person said this person this person did this this person said that.
1:49:52
You have the perfect footage, the GPS, everything that happened in that moment.
1:49:58
>> Well, I I think um I think AI I mean, you know, there are early-stage companies early-stage maybe some are beyond early-stage that hoover up all the data available. >> Yeah.
1:50:11
>> Like permits, ingredients. >> Sure. Sure.
1:50:14
>> Uh you know, compliance certificates, whatever. Hoover all that up. >> Yeah.
1:50:18
>> And they also ingest all the regulations and rules.
1:50:23
And they will identify claims and class actions. >> Yeah.
1:50:27
>> And you can subscribe to this. And they'll serve it up. >> Yep.
1:50:30
>> So, I mean, AI is in itself generating more of that kind of work as well.
1:50:35
But, I also have the hope that it'll mean that cases are resolved sooner. >> Mhm.
1:50:40
>> Because there's more transparency sooner.
1:50:42
As you were saying like the Waymo situation where you have the record. >> Yeah.
1:50:46
>> So, people I hopefully will be able to identify the merits of their claims.
1:50:51
Everything's more transparent.
1:50:51
Identify the merits of their claims.
1:50:53
You can underwrite the risk.
1:50:54
And people may be able to get together with settlements sooner. >> Mhm.
1:51:00
On the next generation of lawyers, do you think aggression can be taught?
1:51:09
I don't know not sure can be taught.
1:51:09
I don't know if it should be taught.
1:51:11
You know, um aggression in the law and litigation isn't an end in itself.
1:51:20
You know, I I generally think it's good to be the first mover.
1:51:23
I mean, we have a saying at our firm that the side that figures out first what will ultimately matter wins.
1:51:30
So, as a default position, I believe you should try to get ahead and stay ahead.
1:51:35
Now, that doesn't necessarily mean you're aggressive.
1:51:38
But in some cases, you don't want to be aggressive.
1:51:40
I mean, you might want to adopt a little you know, a rope-a-dope strategy.
1:51:45
You know, come get me, you know, and let the other side play their cards first.
1:51:50
>> How can you tell if someone's bluffing?
1:51:55
>> You know, there if you have a sense of what their case is and what it's worth and what the strengths and weaknesses are, you sometimes get a demand that you think either they're bluffing or they don't understand their case.
1:52:07
So, you know, it really very much depends on the I think on the situation.
1:52:13
>> How did you uh how good at how good were you at reading people early in in your career? >> Not good.
1:52:20
>> And how much how much how much did you improve?
1:52:23
Like, did you have some sort of like baseline above average ability, you think, and then you got, you know, significantly better?
1:52:29
>> I I think with experience I got I got better.
1:52:31
I think as a younger lawyer, uh I was probably too aggressive too often and didn't sort of modulate my approach.
1:52:41
Uh over time, I think I I got better of understanding not just understand the other side and reading them, but myself as well.
1:52:47
Where I was coming from and what my strengths and weaknesses were.
1:52:52
>> Well, thank you so much for coming on the show. >> Thanks.
1:52:54
Thanks for having me back.
1:52:55
>> Wish we had more time. >> Great to see you.
1:52:57
>> you off with the final outro to most feared lawyer.
1:53:03
>> [music] >> When you try [music] >> [screaming] [music] [music] [music] [music] >> I think every one of our guests needs an intro like that. >> Metal song.
1:53:46
>> we're going to I think that might be a new bit for us.
1:53:47
First, let me tell you about Figma. Agents need the canvas.
1:53:52
Your AI agents can now create and modify your Figma files with design system context.
1:53:55
We've been keeping our next guest too long.
1:53:57
We got Nikil ready from Kaizen coming on the show. Let's bring him in. How you doing? >> What's going on? >> What's up? >> guys >> What's up?
1:54:06
>> Legendary intro for John Quinn. >> Yes.
1:54:07
[laughter] Uh hopefully you never have to hire him, but if you do >> Honestly, I was going to say hopefully you get a chance >> Yes, the opportunity to work with him.
1:54:16
It is a It is a bad situation. Yeah.
1:54:19
>> have him sending you emails after that.
1:54:21
>> [laughter] >> That That's for sure. That's for sure.
1:54:24
>> Except maybe a client intake form. >> Yeah.
1:54:26
Uh well, thank you so much for taking the time to come chat with us.
1:54:27
Kick us off with an introduction on yourself and the company. >> Yeah, man.
1:54:32
Thank you guys so much for having me, Jordan and John. Big fans.
1:54:33
Um quick background on me. Started Kaizen in 2022.
1:54:38
Before that was an early engineer at Anduril. Joined from the Bay.
1:54:42
Joined Anduril right out of school in 2019.
1:54:43
Um spent 2 and 1/2 years there as a FDE.
1:54:46
So, worked on the web interfaces for a lot of the early hardware products that are now flying and doing wonderful things.
1:54:52
Um and before needed a UI and UX to sort of power some of those assets.
1:54:56
And it was an amazing opportunity to just go to a bunch of military bases and build really quickly for the warfighter.
1:55:01
Um and then started Kaizen uh at the end of 2022 specifically with the the fire to modernize all constituent services.
1:55:09
I think that experience showed me how broken and disconnected government application layer systems were.
1:55:15
But when you think about it beyond the context of just defense, I know we're here announcing a DIOW project, but globally across all governments, all public institutions, I think the worst part of everyone's day is that 8:30 a. m.
1:55:28
when you go to the DMV and you have to use the text act to renew your driver's license or pay for a permit really quickly or do the basic fundamental task.
1:55:36
And if you can make that experience 10 times better, an order of magnitude better, then I think everyone sort of leaves those buildings feeling like their taxpayer dollars are being spent appropriately and that they're being taken care of.
1:55:47
And that was the vision was to go to every single public institution and modernize their application layer that citizens and individuals interact with, I think more in a volume perspective more than any other government service, and make them connect to quality.
1:56:01
And that's sort of what we've been up to the last four years selling to city, county, state, and now federal government and announcing a big project with the Department of War. >> Yeah, congrats. >> Okay, very cool.
1:56:11
A lot of lot I want to understand on on [laughter] that side of the business.
1:56:14
But but yeah, talk about the the contract and and yeah, parlay this into what you're announcing today.
1:56:22
>> Yeah, so we're announcing the launch of the counter drone marketplace that is run by JIDA 401, the counter drone task force within the Pentagon.
1:56:28
The problem that we're trying to solve is that counter drone assets are being manufactured by American OEMs, many of whom that you've spoken to and have have had on the show.
1:56:37
And the threat profile is changing so quickly, the hardware is being manufactured at lights out pace.
1:56:44
But then actually think about the process.
1:56:46
Now that there's an amazing OEM product that needs to be fielded out into a forward deployed region of the world.
1:56:52
Think about the paperwork, the process, the structure, the 50 different software platforms that someone within the building needs to use to authorize budget for it, get contract vehicles established, then go back and forth with the KO, negotiate that contract, then find the right logistics and management partner to get it on a pallet and get it delivered.
1:57:10
You're talking about potentially weeks to months of delay when the warfighter needs that capability and that asset delivered on the pallet tomorrow so they can actually use it in the fight.
1:57:19
use it in the fight. And that was sort of what for us was the most exciting problem to solve and 401 put us on contract in in 9 weeks from a blank slate we designed, developed, and deployed a true two-way e-commerce marketplace that looks stunning, rivals whatever you'll see in the private sector where American OEMs can sign on, establish their vendor profiles, upload
1:57:39
their products, sell them directly to three different buying groups, Department of War Capability Offices, people with budget within the Department of War that want to buy now, state local law enforcement because think about the intra-government or intra-United States case where you're a state local law enforcement leader and you're protecting MetLife Stadium for FIFA World Cup, you also need to buy counter UAS. So it's a
1:57:58
So it's a centralized platform for those buyers to log in and purchase those assets.
1:58:02
And then partner nations.
1:58:04
Allied nations want the best technology, American OEMs make the best technology, and they want to be buyers on this platform as well.
1:58:11
So it's a two-way marketplace where buyers can come in, register and validate their profiles, vendors can do the exact same thing with their product stack, and then being able to have the Pentagon have one core centralized
1:58:22
source of truth, we built the entire front-end architecture vendors to post and publish their products, buyers to come in, purchase their transactions, a ton of agentic tooling where even if you're not the expert, you open up our
1:58:34
capability planner, you specify in free text that you're protecting a stadium for FIFA World Cup, here's my threat profile, here's how much money I'm willing to spend, and it immediately suggests a bunch of assets that you can purchase, add it to your cart in one
1:58:45
click, and then on the back end we're working to simplify all the tough, difficult, very frustrating procurement processes to actually get hardware on a pallet sent to the warfighter and to end up and running in 9 weeks. >> Uber for drones. >> Uber for drones.
1:58:59
>> As as a taxpayer >> Sorry.
1:59:01
[laughter] >> Sorry, I had to say I had to say that.
1:59:04
Every once in a once a year still I'll see a pitch that's just like we're building Uber for X. >> Wait, really?
1:59:10
You've seen an Uber for X? >> Still see that. Still see that. Every now and then. Every now and then.
1:59:17
Uh >> Dutch East India Company for drones. >> How about that?
1:59:20
>> Um >> [laughter] >> Uh as a taxpayer, do I want you to win or do I want a monopoly in software delivery for the government?
1:59:30
Because everyone's run the business and they've had a bunch of different point solutions and there's a different world here where I'm like like this is cool that you're doing this it's good that I'm happy for you, but also like couldn't this just be like one extra module in a Palantir system that's already deployed?
1:59:47
Like why do we need obviously besides the competitive dynamic just from a technology perspective, is it okay that we're going to have proliferating systems?
1:59:57
Is systems integration here not a particular problem?
2:00:01
Are you addressing some problem that is too low for other contractors and primes to go after?
2:00:08
So it would get neglected and so that's why you're doing this project.
2:00:13
Like help me understand how you fit into the landscape of other other uh uh prime contractors.
2:00:22
>> Yeah, if that's the question.
2:00:22
I mean like the answer is actually a little bit of all the above actually.
2:00:27
From the data layer perspective, our goal is to build application software that is capable of integrating into a seamless unified coherent data fabric.
2:00:33
I want to write data to a Palantir or a Databricks or an AWS because that fabric is well built, thoughtfully constructed, secure, compliant.
2:00:44
But then you actually look at the market landscape, you're right.
2:00:46
Most of the market I think it's actually dominated by two extremes.
2:00:49
When you're thinking about the city, county, state level, largely what we see is super old, janky, private equity owned point solution for blah that hasn't received an update in 15 years.
2:01:00
The engineering team is a bunch of Java developers that found out two years ago what an API >> of those businesses are real cash flow machines, okay? So, >> Yeah.
2:01:11
They're they're good businesses.
2:01:13
>> [laughter] >> No, no, no.
2:01:14
But as a user, as a user and not a shareholder, uh I I I I share the frustration with the DMV system every once in a while.
2:01:23
>> As a taxpayer, you're you're you're asking yourself like what are we doing here?
2:01:26
And then on the federal side, most of those platforms are run by a bunch of low margin services companies that are selling hundreds and hundreds of heads and overcharging the government hundreds of millions of dollars and then we'll spend 18, 24 months trying to build a thing, deploy it as a pilot, largely accomplish nothing.
2:01:43
And I think the model that we're trying to apply is yes, we should own as many application layer solutions as we can.
2:01:49
solutions as we can. That's obviously sort of why Kaizen exists, but our goal is to charge based on the outcome and quality and I would actually argue if we can make those application layer systems an order of magnitude better for the taxpayer from a user-friendliness perspective, easier to use, more simple
2:02:06
to log in, adjudicate your information, have it approved by an administrator on the back end and then for the administrators that are spending eight hours a day logging into these platforms trying to triage and do all the paperwork, for them if you can make their lives an order of magnitude better, I think we're actually solving the real problem. This is why taxpayer
2:02:21
This is why taxpayer money is appropriated to these kinds of services so that we can actually provide a quality of service for our citizens that they deserve.
2:02:29
And so for us, the number one goal is make every application layer product across these institutions as good as possible and move away from the point solution for X model and rather go to our customers and say, "What is your need?
2:02:42
Are you actually trying to make the DMV licensing process better?"
2:02:45
Or in Gita 41's case, they need a Shopify style system for counter drone procurement, and then we should have the technology stack and the set of modules that we can use to rapidly configure against those capabilities and deploy in 90 days or less.
2:02:59
And still, I think you can move very quickly and build very quickly as we're seeing in the world today, but also hold a high standard for compliance, security, good guardrails, testing, um I think you we live in a world where I think you can have both things and and I think that's sort of what's been super exciting about our federal progress. >> Love it.
2:03:16
Well, congratulations and thank you so much for coming on the show. >> service.
2:03:19
>> We'll talk to you soon. >> Thanks so much, guys. Yeah, appreciate it. Goodbye.
2:03:23
>> Up next, we have Art Levy, the new Vice President of Global Partnerships at Cognition.
2:03:28
We got Russell Kaplan, the President of Cognition.
2:03:33
Um they're coming in to the TVP in Ultra Dome.
2:03:36
>> [music] >> Very excited to have some folks joining. Congratulations. >> There they are.
2:03:42
>> Betrayed by the >> corner office. In the corner office.
2:03:46
Fit for a new Vice President. >> office.
2:03:48
Yeah, where Are you guys in SF or uh Bay Area?
2:03:52
>> We're calling from Austin.
2:03:53
>> Yeah, calling from Austin, Texas office. >> Austin, Texas.
2:03:56
>> We've got a We've got a great team out here.
2:03:57
And yeah, super excited to be having Art on the team.
2:04:00
>> Okay, what is a global partnership?
2:04:00
Does it have to be global? Is it just a sales deal?
2:04:05
Or is there a deeper partnership that happens with these companies like AWS, Apple, Slack, Navan, Oracle, Capital One? But break it down. >> John, you nailed it.
2:04:13
Global partnership means it's not just a sell-to deal.
2:04:15
It's something where we're both selling to the business.
2:04:19
Potentially, there's an investment.
2:04:20
Potentially, we're co-selling to their customers. We're selling to them.
2:04:23
We're selling to their customers.
2:04:25
We're doing co-marketing.
2:04:26
We're doing a a press release.
2:04:28
Potentially, there's a product integration.
2:04:29
It's about deeply connecting two businesses who share a common goal around, you know, acquiring the same customers, or we build inside of them a product that is just better for their customers, and then both parties win.
2:04:43
You know, classic partnerships, 1 + 1 is 3.
2:04:47
>> I think of Cognition as an AI lab, maybe a neo lab, a harness developer, a consulting firm in some world.
2:04:56
>> of it as a source of geopolitical power. >> [laughter] >> Yes.
2:05:01
>> That's just me personally.
2:05:03
>> Yes, it's it's birthing a new god as well.
2:05:06
But, uh but what what is the conversation that you're having with Fortune 100, these huge companies?
2:05:10
How are you positioning your role in the AI ecosystem, in the business ecosystem?
2:05:18
How what what what is this full scope of the value that you can deliver to customers?
2:05:22
>> as as we've as we've grown up and evolved, you know, we've I think we've really realized our our role is to be the independent agent lab. >> Yeah.
2:05:30
>> And so, you know, we're an applied AI lab.
2:05:31
We're focused on building agents, and we want to give every every company the best possible agents to to go solve all of their software engineering problems.
2:05:39
And so, you know, whether it's a Fortune 500, or it's a you know, it's a small fast-growing startup, you know, people have a lot of needs for for software, and Devin from the beginning has always been designed to work with all the other tools you already use, right?
2:05:54
It shouldn't be, you know, it's the Devin way or the highway.
2:05:57
Like, Devin should join you like a teammate.
2:06:00
And I think that's one of the reasons I'm super excited that Art is joining us.
2:06:03
Art built an amazing alliance and partner ecosystem at Brex over his like very long career there from employee 30 to chief business officer.
2:06:11
And we see an opportunity at Cognition to bring not only, you know, it's it's not just a hey, here's a tool, go figure out.
2:06:20
It's like, how does this work super well with every piece of technology you have inside your organization?
2:06:27
>> Are large corporations that are maybe they don't have an AI lab.
2:06:32
Are they generally of the view AGI is real, AGI is soon, but we're going to go through a sort of slow takeoff, diffusion, adoption will be a big problem, and Cognition can help sort of realize that thesis?
2:06:51
>> I think the pace of progress in artificial intelligence is dramatically over over the pace of progress of internal organizational redesign, for sure.
2:07:00
And so, you know, and by the way, this is true not just at the big Fortune 500s.
2:07:05
Even the sort of startups or tech companies we would consider as fast movers, everyone is asking, you know, do I really need to rethink everything now because of AI?
2:07:14
And I would say it's actually one of the one of the things that's been lucky for us at Cognition is we only incorporated in January of 2024.
2:07:22
So, our internal, you know, team setup and structure is it's it's very AI native, but every company is trying to figure this out for themselves, and I think if you if you froze capabilities today, you have at least a decade of crazy progress in the in the full enterprise world just to get this stuff really rolled out and operationalized.
2:07:41
>> So, what are like when you're talking to an enterprise, is is is is it better to position as the the, you know, you're going to help with this diffusion, this value creation, or are we still in that sort of I maybe it was like May, June, July, like, "Whoa, we went a little bit too far with the token maxing.
2:08:03
Maybe Cognition can help me rein in this budget, actually make sure that we're getting ROI."
2:08:09
What's resonating there on the on the on the cost of benefit position?
2:08:14
>> I think it's I think it's both.
2:08:14
I think there's a third too.
2:08:15
So, first, you know, all the models have been getting better, right?
2:08:18
And so, as models get better, the capabilities keep improving.
2:08:23
Yeah, people are starting to ask the question, "Hang on, like, do I need to drive the Ferrari to the grocery store?
2:08:28
Uh, you know, can I can I use an open-source model for parts of these workloads?
2:08:31
Can I use a cheaper model, faster inference?
2:08:32
And so, that's definitely one of the things >> driving a Ferrari to the grocery store.
2:08:37
>> [laughter] >> But, continue.
2:08:42
>> If only we could all be Jordy.
2:08:42
If only we all [laughter] had Jordy.
2:08:45
But, but, you know, I I I I I guess that's part of it.
2:08:48
I also think there's a separate thing that's emerging, which is if you actually want to have true frontier capabilities, you know, different models have different strengths, right?
2:08:56
Like, we've seen, for example, we've seen the the OpenAI models, for example, are are the best in the world right now for for recall of security vulnerabilities.
2:09:06
Like, if you want to catch if you want to catch as many as possible, the OpenAI models are just best.
2:09:10
There might be others where actually, you know, the Anthropic ones are a little bit better on precision, you know, getting it really, really tight in.
2:09:15
And so, so I think there's in addition to the price-performance angle for enterprises, there's this element of well, for how do I use the best tool for the job, you know, for each job to be done?
2:09:27
And then, there's the people the people change side, which we we try to help with, too.
2:09:31
I'll give you one one story on this.
2:09:33
You know, we had a customer, global, you know, Global 2000 customer, tens of thousands of engineers, and they deployed Devin across the entire organization, and they were seeing, you know, crazy crazy productivity gains.
2:09:45
But, one organization they deployed to was the product management organization.
2:09:49
And so, every product manager now had Devin.
2:09:50
And what they were doing was this organization's job is basically taking in customer requests and turning them into engineering tickets, roughly.
2:09:56
It's like, scope out what the customers want, turn them into engineering tickets.
2:10:00
So, they were using Devin to they took those requests, and then they had Devin actually go prototype the fix.
2:10:05
And then, once Devin prototyped the fix, they had Devin say they said, "Devin, can you summarize this fix in a Jira ticket?"
2:10:13
And then, they deleted all the code.
2:10:15
And we asked them, "Guys, like, what are you doing? You already had a fix."
2:10:16
And the product manager we talked to you "That's not my job.
2:10:20
Like, I'm part of the product management organization.
2:10:22
I'm not part of the engineering organization.
2:10:25
And so, I think like for really large companies who've been doing things the same way for a long time, there is like a total rethink that needs to happen in just literally how do you design, you know, how do you design your structure. >> Yeah.
2:10:37
Uh how are you guys thinking about M&A?
2:10:41
You bought Poke recently.
2:10:41
I think I think I think it was surprising, but uh made a lot of sense.
2:10:49
Um it was surprising to me because I figured someone like an Apple or something would would see Poke's, you know, talent and their kind of consumer insights and all that kind of thing, try to pick them up.
2:10:59
Um but how are you guys thinking about M&A from like where the value really comes from?
2:11:06
You guys are very good at building software.
2:11:07
That's your whole pitch, right?
2:11:09
Is we help you build software.
2:11:11
So, I can imagine a world where product acquisitions are like less interesting because you're looking at your own road map and you're looking at what someone's built and thinking like, "Well, how quickly can we build this ourselves?
2:11:24
Is it is Are we Should we expect like more sort of like talent style acquisitions?
2:11:29
What where where What's your general framework and and maybe what's uh share as much of your mandate as you can or >> Yeah.
2:11:37
I mean, I would say all of the above.
2:11:38
I mean, we have today cognition 97 former founders who work in the company, two and a half year old startup.
2:11:43
And we are we are like acquiring We're actively hiring.
2:11:48
Why do one team a week probably right now?
2:11:50
Uh So, if you're a strong founding team and you want to be part of a of a rocket ship, you know, get in touch.
2:11:54
Uh we we love bringing on founders.
2:11:56
Um but we also think there's, you know, there's bigger companies out there with with products with distribution, uh with with learned insights that are really useful for us that we'd want to bring in as well.
2:12:05
And I think how you do that successfully, a lot of companies screw up M&A.
2:12:08
Um we kind of learned learned it uh trial by fire acquiring Windsurf, you know, in the course of a weekend as a company that was four times our size, Uh and you know, from like first call to to to, you know, executing a reading from Friday night to Monday morning.
2:12:23
So, it's something that I think we're only going to get better at, and one reason I'm really excited Artist here is is to help us kind of level up that that process, and be the best destination in the world to be acquired by.
2:12:35
>> Yeah, I think one of the things I've seen work well in my career is a lot of times partnerships can be pre-empt in M&A.
2:12:41
So, a bit of a try before you buy, you make sure that the cultures really make sense.
2:12:44
The two companies build an integration, or a partnership, and then suddenly in those conversations, or after you delight a few customers, you both decide, "Hey, actually maybe it'd be better if we work together."
2:12:56
And I think given the scale of Cognition, our rate of growth, the impact that founders can have when they come here is really going to be generational.
2:13:05
So, I'm really excited to, you know, talk to a bunch of founders, and hopefully bring a bunch more of them onto the Cognition team. >> Awesome.
2:13:13
What country, internationally, outside of the United States, is punching way above its weight in terms of AI adoption, AI diffusion?
2:13:22
You always hear that story about Estonia rolling out high-speed bandwidth to the entire country, and they just went way way forward in terms of GDP per capita.
2:13:31
Uh what country are you having like surprising success in? >> Japan. >> Japan, yeah.
2:13:37
>> I would say Japan number one. We love Japan.
2:13:39
Look, we're a global we're a global company.
2:13:40
That's why we have people all around the world.
2:13:41
We have customers all around the world.
2:13:42
But I got to I got to shout out to Japan in particular.
2:13:45
Um you know, even from from the beginning of when Devin first became available self-serve, when when cloud agents were like just at the edge of possible, we had an enormous uptake of users in the Japanese market.
2:13:56
And I think there's a few I think there's a few reasons.
2:14:00
I think one of them is, uh you know, our Japanese customer base, everyone is incredibly conscientious and detail-oriented.
2:14:06
And whenever we get a support ticket from Japan, it's a very thoughtful essay of every single issue that has been tried, every piece of debugging information you would need, uh and like they just found a bug.
2:14:18
They they just found a bug.
2:14:20
They If they could have solved it on their own, they would have.
2:14:22
And so, I think the user base in Japan is super sophisticated, um really early adopters, and uh and it's been exciting to see all the growth there.
2:14:31
>> I prefer the American style of just fix it. Fix it. >> [laughter] >> No.
2:14:36
Uh it seems it seems like really beneficial.
2:14:37
Uh sorry, are you were going to say something?
2:14:40
>> No, I was going to say as I'm digging in, also ironically on the channel sales side, we've actually had the most success with sell-through with partners in Japan who seem to just deeply understand the product and the value prop and be able to sell it to to their customer bases. >> Interesting.
2:14:55
>> Do do the Japanese love otters by any chance? Could that be a factor?
2:15:01
>> That's a good That's a good question.
2:15:01
We We definitely have a lot of otters in Japan. >> I like the otter. >> Yeah.
2:15:06
>> Yeah, we got a lot of we got a lot of otters in Japan.
2:15:07
There was a big debate in Japan of the right honorific for Devin.
2:15:13
Uh you know, is it is it a Devin-san, Devin-kun, Devin And then uh we we learned that the community in Japan has settled on Devin-kun as the right honorific, you know, your your friend, your buddy, your your sidekick who's who's helping you out.
2:15:25
And I think it's a it's a fitting name for for Devin.
2:15:28
>> came from the community. This was not internal?
2:15:31
>> Came from the community. Yeah, we were informed. We were informed. We were informed. >> Ground up. We were told. >> Ground up. >> Amazing. Okay.
2:15:36
Well, thanks for bringing it down. That's very >> Love it.
2:15:39
>> Well, I'm excited to see everything that you guys do together. >> Yep. Deals, deals, deals. Very excited to see it.
2:15:46
>> Great to see you guys. >> to you soon. >> Great hanging, guys. >> Congrats. >> Goodbye.
2:15:50
>> Let me tell you about Codox.
2:15:50
Codox is a powerful workspace for getting work done with AI agents, whether you're writing code, analyzing data, creating content, or automating business workflows.
2:15:57
Codox helps you move projects forward from start to finish.
2:16:00
We have Brendan Carr from the S at the from the FCC joining the show shortly.
2:16:05
This is first appearance, but we met years ago.
2:16:08
I've always been fascinated by his perspective on everything that the FCC does.
2:16:16
Eric's obviously expanding 5G.
2:16:16
We talk about satellites and space internet, what it takes to launch a rocket.
2:16:23
I know you've been thinking about the TBPN satellite cluster. He's the guy to talk to. >> Perfect.
2:16:28
TBJ over on the X chat says literal art of the deal right here.
2:16:34
>> [laughter] >> Wow, insane nominative determinism. >> the deal.
2:16:40
Um while we are waiting for Chairman Brendan Carr to join.
2:16:46
Um we got to go through this crazy historic analysis from Ed Zitron.
2:16:51
He >> Ed Zitron, July 29th, 2024 gave Sam Altman a perfect roadmap.
2:17:00
He said, "I am hypothesizing that for OpenAI to survive for longer than 2 years, it will have to and then he laid out pretty much >> Exactly what happened.
2:17:09
>> Exactly what went down.
2:17:11
>> But looking back on them, they did seem like crazy, crazy things that had to come true.
2:17:15
>> I think Ed should join an AI lab and help.
2:17:20
>> Maybe as like a chief strategy officer cuz he's imagining everything that could go wrong.
2:17:24
But through that, he's imagining everything that could go right. >> Well said.
2:17:29
>> And so, if he put his optimism cap on, he might make a great chief strategy officer. >> Yeah.
2:17:36
>> Maybe maybe at a DeepMind, something like that.
2:17:38
Maybe they could pick him up. >> That'd be great.
2:17:39
Well, Chairman Brendan Carr is in the waiting room.
2:17:43
Let's bring him into the TBPN Ultra Dome. How you doing, Brendan? >> I'm doing great. It's uh >> Long overdue.
2:17:48
Thank you so much for joining. How are you doing?
2:17:51
>> I know, I'm so glad to be with you guys. I love the show. Love what you're doing.
2:17:54
I dressed down a little, no tie.
2:17:54
I kept one extra button compared to you.
2:17:56
I didn't go the full >> There you go.
2:18:00
>> you know, preview, but I did take >> preview. The Coogan preview.
2:18:02
[laughter] That's a that's an amazing line.
2:18:07
>> As a bureaucrat, you know, as someone that regulates broadcast airwaves, not you guys, but broadcast airwaves, you know, decency still matters where I come from.
2:18:14
So >> Well, we wanted we wanted to have you on cuz we wanted to push for podcast safety.
2:18:19
We think that we think that it might be a little bit irresponsible for the US government to allow just anyone to grab a microphone and get on the [laughter] airwaves.
2:18:30
>> I want I want a, you know, multi-year approval process for new RSS feeds ideally.
2:18:35
>> Maybe like annual, you should maybe need a million-dollar fee annually to sort of maintain your license.
2:18:41
>> TBP is so doing so well, we need to build a moat around you guys, you know, make it harder for others to to do this.
2:18:46
Yeah, I think they call it regulatory capture.
2:18:47
That's what I want to know.
2:18:47
Let me let >> We're not here to talk about podcast regulatory capture.
2:18:53
>> No, we're here to talk about robots first or where do we want to start?
2:18:58
China, different supply chain pieces, what what's newest in your world?
2:19:05
>> Well, probably some of the newest stuff we've done, when we started, we stood up a new Council on National Security, we've been doing top-to-bottom review of all bad actors, foreign adversaries.
2:19:13
The most recent thing we did just a couple days ago was we added to our covered list.
2:19:19
So, the FCC, there's no piece of electronics that you can use without going through FCC processes.
2:19:26
Putting on the covered list means new models of that thing can't be imported or sold in the US.
2:19:31
So, we've added a couple things to that.
2:19:33
We did advanced robotics, so think humanoid robots, think those quadroped robot dogs.
2:19:37
And the idea is if you look to the future, those advanced robotics are going to be key to our economic security, to our national security, and President Trump is looking around the corner and saying, you know what?
2:19:49
Probably a good thing if we don't become dependent from a supply chain perspective on a foreign adversary nation or a bad actor for that stuff.
2:19:57
So, we're trying to onshore that.
2:19:59
We've done similar stuff before with drones for instance at the end of last year.
2:20:04
We added all foreign produced drones, but it's a balanced approach meaning it's new model.
2:20:08
So, we're not going to take anything out of your hands right now.
2:20:11
You can still buy quote unquote new versions of existing models, but it's a way of signaling to the market like it's time to adjust guys.
2:20:17
We need, you know, a safe uh domestic supply chain.
2:20:19
So, it's good from a natsec perspective, but it's also great for investment and jobs in terms of domestically as well. >> Yes.
2:20:27
So, you said uh it it it it's good for the market or the market will adjust.
2:20:31
I'm interested to know what is your process for assessing the capability of the American supply chain to actually step up to the call when there's, you know, basically there's going to be a gap in the market around drones, humanoids.
2:20:46
Fortunately, it feels like we're not in a situation where I'm talking to entrepreneurs who say, "Look, I set up this business years ago.
2:20:55
I am dependent on buying this particular thing from China or internationally on an ongoing basis and this ban is going to throw me way, way off like what might happen with other pieces of the supply chain."
2:21:08
So, there are there isn't a whole industry that's dependent yet.
2:21:12
Um but what are you doing to actually understand how quickly and how capable the American industry is to fill the gap at that that will be created by this.
2:21:26
>> Well, there's a couple ways we take that into account and I'll walk through them, but just as as context for instance, when we added drones to the covered list, we saw something like $5 flow newly yeah into US domestic drone manufacturers.
2:21:40
They're now making drone motors at scale in the US uh which we've never really done before.
2:21:45
But the balanced approach is this.
2:21:47
So, again, if you're buying a a or battery from overseas today, you can still continue to buy that because the prohibition is only on new models.
2:21:55
And the the companies overseas can continue to produce the old ones.
2:22:01
Uh and then again, there's also an exemption process.
2:22:02
So, for instance, on drones, we went through the the relevant agencies went through and exempted toy drones, for instance, from the ban.
2:22:09
And so, it's balanced that's forward-looking.
2:22:12
Let's not develop too much dependency.
2:22:14
Okay, maybe there's a couple thousand of these, not a huge deal, but we don't want a couple million.
2:22:18
So, the entire regulatory structure allows for exemptions plus transition.
2:22:23
And then look, we can come back afterwards and remove the quote grandfathering for existing models.
2:22:27
And in fact, we're doing that now for things that were added to the covered list before 2024.
2:22:33
So, things like Huawei, ZTE, that type of equipment.
2:22:36
Again, one, it's not consumer-facing as much, but two, you had multiple years to adjust to to where we think the market's going.
2:22:44
>> Do you have any optimism around uh these, you know, frontier AI models have incredible cybersecurity capabilities?
2:22:50
I could imagine a world where before there was a lot of fear, uncertainty, and doubt about certain pieces of uh electronics that are made internationally potentially having backdoors or spyware.
2:23:04
And if you can hammer one of these, you know, uh one of these systems with every possible test, are we going to wind up in a world where we can more confidently say yes or no, does something have a backdoor?
2:23:17
Or is this just uh you know, uh uh everyone will just be stuck in a never-ending race and we'll be back to where we were?
2:23:27
>> Yeah, I do think it's helpful from that perspective.
2:23:29
And obviously, there's Telco companies that are on the early release lists for a lot of these models to help identify any patches that might be necessary.
2:23:37
But we're doing a couple things that are new as well.
2:23:39
So, it used to be if you wanted to sell electronics in the US, you had to go through a lab, and the lab would test it for power levels and interference, very basic technical stuff.
2:23:49
We're now inserting national security checks in that lab process.
2:23:53
In fact, we stood up something called a bad labs proceeding, cuz it turns out that something like 70% of all electronics that ultimately arrive in the US are tested at labs located inside China, and some of those labs themselves were, you know, linked or controlled by or tied to the PLA.
2:24:11
So, not necessarily the most trustworthy.
2:24:12
So, we're kicking many bad labs out of the testing process.
2:24:15
And again, that's helping to onshore some of that testing process.
2:24:19
So, we do want to make sure throughout all of this that there's much more trustworthiness checks along the way.
2:24:26
>> That's very interesting.
2:24:26
Jordy, do you have anything else on this?
2:24:29
>> No, I I was I was very excited to see the news from last week, or or maybe it was the week before, just because I even processing the drone industry and even the consumer drones, personally, personally I think drones are are great.
2:24:44
I've seen drones that that have captured some cool footage of snowboarding or surfing and all these things, but the idea of having, you know, millions of uh you know, if you could ask any foreign adversary government, "Hey, would you like to have millions of, you know, flying cameras in uh in one of your geopolitical adversaries uh within within their borders?"
2:25:08
They would say like, "Absolutely.
2:25:09
That's that sounds that sounds great. Let's do that."
2:25:11
And so, the idea that let that we were going to let the same thing happen that we that that the thing that we let happen in drones, that we would let that happen with humanoids, which are much more of a risk to me.
2:25:22
They can actually have the you know, they're they're not they're not they they're not very significant today, but they can have a real effect on the world.
2:25:31
And the idea that we would allow, you know, millions or eventually even billions of these into our borders just was very concerning.
2:25:38
So, personally, I'm I'm glad that you guys took action.
2:25:45
>> I'd love for you to explain the E-Rate program.
2:25:48
What's going on there with school internet?
2:25:50
I think it's an under-discussed story.
2:25:52
Uh what what it sounds very good on the face of it.
2:25:55
You want uh students in America to have internet. How are things changing?
2:26:02
What's the history of the program?
2:26:03
What's the story going forward?
2:26:06
>> This one's interesting.
2:26:06
So, this country the last couple years I think we really experimented with going all in on screen time for kids and the results of that are starting to show themselves and the results aren't great.
2:26:17
I mean, we have actually gone through one of the most significant losses of sort of human capital from a learning perspective that we basically ever seen.
2:26:25
I mean, going back to almost the the dark ages when you look at some of the the decline in test scores and and to some extent, I don't know if it's, you know, correlation or or otherwise, but it it it coincides with this big uptick in screen time.
2:26:39
And the FCC has a role to play.
2:26:41
We fund internet connections and to some extent internal connections at schools all across the country, multiple billions of dollars a year.
2:26:49
And so, we've done a top-to-bottom review of our program to make sure it reflects the current research on screen time for kids. And it's not just us.
2:26:57
Obviously, you're looking at a big movement around the country.
2:26:59
Different states, different school districts are all starting to say, you know, maybe put the smartphones away, maybe put the screens away.
2:27:04
When you got young kids, kindergarten, first grade, they're just swiping all day.
2:27:08
Uh the idea of this program was >> school nearby me, a elementary school, in PE, they spend more than half the time on iPads looking at physical exercise like diagrams.
2:27:26
I'm like, these are children.
2:27:26
Maybe just let them run around outside.
2:27:30
>> Studying to be >> exercise. >> Yeah, odd.
2:27:33
>> Um >> Uh >> I think we've gone too far.
2:27:35
>> Get us up to speed on what's happening with uh Starlink and other space-based internet connectivity programs.
2:27:41
It feels like to much to the benefit of the American internet consumer, the the race is heating up.
2:27:49
There are more companies launching constellations. What are your KPIs? What do you want to see?
2:27:56
Is it faster approval times for new constellations, clarity around who owns what spectrum, smoother auctions?
2:28:02
Like, what is on your to-do list for the next couple years?
2:28:09
>> Yeah, there's a little bit there that we're doing on every of the points you hit.
2:28:13
So, for one, President Trump came in and gave a very clear direction.
2:28:15
He said he wanted the the United States to lead the world again in technology and in space in particular. We're now seeing that.
2:28:23
So, there's this new technology called direct-to-device, where you can go straight from your smartphone right to a low Earth orbit satellite.
2:28:29
You don't even need that little Starlink mini or other satellite provider dish near you anymore.
2:28:34
It's just starting to emerge, but we're putting the regulatory framework in place at the FCC for that to succeed.
2:28:39
One, that means more spectrum.
2:28:41
You need new airways for that technology to work.
2:28:43
We've been facilitating many transactions to do that.
2:28:46
Starlink, that was a big chunk of spectrum.
2:28:48
Amazon is buying another company called Globalstar to basically take their spectrum and use that for their own version direct-to-cell.
2:28:54
And then inside the FCC, we're taking our space bureau, which historically processed applications for a lot of this stuff, and they would review individual applications and long narratives. It'd be very subjective.
2:29:06
We scrapped that entirely, and we've replaced it internally with an assembly line, where we give you clear rules of the road.
2:29:12
If you hit these targets, your application's going on the fast track, and you're going to go.
2:29:17
Because again, look at the the launch cadence, look at the amount of mass going into orbit.
2:29:20
We got to keep up with that.
2:29:22
And this is some place that I'm just super excited for the country.
2:29:27
This hard tech area, these, you know, the kids from the Gundo that are now everywhere outside the Gundo as well.
2:29:30
I mean, what they are doing right now is a I think a huge part of the future of this country and we want to make sure the FCC is not sand in the gear uh when they continue to innovate the way they are.
2:29:44
>> Does what does the FCC have any other roles to play in that?
2:29:46
I mean, we've seen like everyday there's a there's a company a startup that's coming on to announce an LOI or some sort of deal with a different piece of the government.
2:29:57
Are there are there any other ways for the startup ecosystem or the tech community to interface with the FCC beyond uh okay, I got approval for this thing.
2:30:09
>> Yeah, we're working across the board to make sure that, you know, whether you're big or you're small, medium-sized company, that you can get a yes or no answer from the FCC.
2:30:16
And part of that is just getting rid of dead wood.
2:30:17
So, we started this proceeding at the agency called delete delete delete, which is about going through every single page of our rule books and getting rid of anything we don't need.
2:30:26
Uh we've obviously sort of resulted in, you know, thousands of words being taken out.
2:30:31
I think 400 pages have been removed from our code of federal regulations already just so that, you know, whether you're small or unsophisticated, it should be much easier to engage with the government.
2:30:42
We've cleared the application backlog in space, you know, by about 50%.
2:30:44
So, we're seeing some good results there for everyone to engage with the agency. >> That's very exciting. Jordy, anything else?
2:30:52
>> Not for now, but let's do it again soon.
2:30:54
>> for coming on the show. Have a great day.
2:30:56
Have a great week and we'll talk to you later. >> Good to see you guys. Thanks. >> Good to see you. Goodbye.
2:31:03
>> Um >> SpaceX had earnings.
2:31:07
>> Oh yeah, how'd they do? >> Let's see.
2:31:08
First ever earnings as a public company.
2:31:13
Uh I >> Up 10% right now? >> Nope, down.
2:31:17
Well, up it was up 9% today, but down 4 and 1/2% after hours. >> Okay.
2:31:25
>> Uh first up, SpaceX announces a new partnership with Nvidia to design its Star mind AI 1 payload, bringing data center class compute into orbit.
2:31:36
Uh, that makes a lot of sense.
2:31:36
Let's find some actual numbers.
2:31:41
>> So, uh, revenue was 7. 81 billion versus 6. 93 billion expected.
2:31:45
Loss per share was 9 cents.
2:31:49
Um, average analyst estimated a loss of 26 cents.
2:31:55
Uh, revenue jumped 92% from 4.
2:31:55
1 billion a year earlier.
2:32:00
So, huge, you know, you're even at this scale still doubling the revenue.
2:32:06
Um, and it's the first time Elon Musk's reusable rocket maker will face Wall Street in this capacity.
2:32:12
And investors are jittery.
2:32:14
SpaceX stock has dropped 12% 16% since opening at $150 a share on June 12th.
2:32:21
Um, and uh, SpaceX lost 4.
2:32:23
9 billion last year largely due to heavy investments in artificial intelligence, which we've discussed.
2:32:30
Uh, the company merged with Musk's xAI in February.
2:32:32
CNBC reports saying that ask at the time the vision was to build data centers in space, but the launch business which counts uh, on large contracts from NASA is losing money.
2:32:45
Most of SpaceX revenue for the year and its only source of profit came from its connectivity segment, uh, which consists of its Starlink internet service.
2:32:52
Starlink is a sold directly to consumers.
2:32:54
Um, so here's how SpaceX performed in the three key segments.
2:32:56
Uh, for space, they brought in 962 million dollars versus 835 million which was expected. So, they beat in space.
2:33:07
On connectivity, they brought in 4. 29 billion.
2:33:13
So, the Starlink business is four more than four times the size of the actual launch business. They brought in 4. 29 billion versus 3.
2:33:19
83 billion that was expected. So, they beat there.
2:33:23
And on AI, they brought in 2. 56 billion versus 2. 18 billion expected.
2:33:29
So, um beats across the board and very interesting to see that the thing that they started doing, space of course, launching rockets, uh is now their third largest line of business.
2:33:42
Connectivity is of course bigger and also AI is bigger.
2:33:47
>> Everything is computer driven.
2:33:50
>> Everything is computer.
2:33:50
That is a good summation of it.
2:33:54
>> And that's a good place to end our show.
2:33:55
>> Let's play you out with the most feared lawyer John Quinn.
2:33:58
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2:34:00
Sign up for our newsletter at tvbn.
2:34:03
com and we will see you tomorrow at 11:00 a. m. Pacific. Goodbye. >> Total flashback. >> Fear in the air. NAMES ALL PALE.
2:34:17
>> [screaming] >> THE ROOM GOES STILL.
2:34:19
THEN THE VERDICT TO READ. >> [music]