0:01
[Music] Hey, hey, hey. [Music] Heat. Hey, heat. Hey, heat.
Search this video
0:55
[Music] [Music] [Music] [Music] [Music] [Music] [Music] Heat. Heat. [Music] [Music] Heat. [Music] Heat. Heat. Heat.
2:42
[Music] [Music] We came to this world to reach the stars.
3:16
We came to this world to shape our future.
3:25
[Music] You came to this world.
3:35
[Music] [Music] You came to this [Music] world to reach the stars.
4:09
We came to this world to shape our [Music] future. We came to this world.
4:25
[Music] to reach the [Music] stars to shape our [Music] future.
4:35
We dream to feel the new Let me see.
5:00
[Music] [Music] [Applause] Let [Music] me feel you.
5:34
[Music] You're watching TVPN.
5:44
Today is Friday, April 18th, 2025.
5:46
We are live from the temple of technology, the fortress of finance, the capital of capital. This show starts now.
5:54
Uh we're going to take you through some of the headlines.
5:56
We want to give you the top 10 news stories that we're following.
5:59
Uh and then we'll break it down.
6:01
We'll go some deep dives. We'll get some guests.
6:02
And then we'll give you some timeline.
6:04
Uh so number one, AI startups soaked up a record 58% of global venture capital money in Q1 2025.
6:12
John, uh 73 billion flowed into AI companies, more than double their share a year ago as investors chase generative AI growth.
6:20
Every founder, every uh every founder has found a way to uh wrap their narrative in AI and every VC has decided artificial AI on it, little little cherry on top.
6:32
Uh and the good thing here is that there's a lot of revenue growth across that sector, right?
6:38
sector, right? I don't know uh you know the the investment is certainly outpacing uh revenue by a long shot but that is the function of companies are making money and we have a deep dive uh story a little bit later about how some big companies like Johnson and Johnson tried a bunch of stuff with AI generative Johnson and Generative
6:58
Johnson and then they and then they're starting to pull back and that's causing churn and so that should give us some more in uh kind of just insight into how the uh AI market and how sticky these deals are how easy it is to get a Fortune 500 company uh to buy your product, but then it's harder to get them to stick stick around for a long time. So, uh the second stop story is
7:16
So, uh the second stop story is Nvidia Jensen Nvidia's Jensen Wong made a surprise trip to Beijing right after the US chip curbs, the new uh the new restrictions on the H20s. Strange timing.
7:29
Uh but I'm sure he had to Well, it it makes sense, but uh it is strange to me in the sense that it's an interesting signal that Yes.
7:37
The the headline from the age 20 news was basically like look, it's over. It's completely over.
7:42
It's never been more over. Yeah.
7:43
Uh stop selling anything to China at all.
7:46
But he's probably over there basically.
7:48
But that's not actually the rule.
7:51
Like the rule is uh you know, and Nvidia, we've heard this again and again.
7:56
Uh, if the speed limit's uh 55, we're going to go 54.
7:59
If the speed limit's 45, we're going to go 44 miles an hour.
8:02
But we are going to go as fast as you let us.
8:04
We will never break the rules, break the law, but we're going to walking walking speed.
8:09
We're going to get our steps in.
8:11
We're going to get our steps in. Yeah.
8:12
And so, uh, you know, this this, uh, this discussion could be, hey, uh, gaming GPUs aren't banned.
8:18
Can you do AI stuff on gaming?
8:21
Well, can you do AI stuff on gaming? Absolutely.
8:23
I trained a uh a custom version of stable diffusion on uh a PC that I built with two 1080 I think 1080 Ti like pretty old but they had like eight gigs of RAM. It was pretty fine.
8:38
Uh there were a bunch of there were a bunch of models that you could fine-tune and run locally on uh on gaming graphics cards.
8:45
And so, um, if if the name of the game is just is just get some sort of AI system inferencing, uh, you can distill these down pretty pretty small.
8:57
And I think that that might be a a bit of a narrative going forward.
9:00
I mean, um, Apple Intelligence, you know, not a great product, but it's been able to run inference of LLMs on phone hardware.
9:07
And so um if if Nvidia can still ship something to China, it still is an important part of the business and they will continue to maintain that relationship I'm sure.
9:18
And they have employees and manufacturing and all sorts of stuff on the ground, I'm sure.
9:23
And uh despite the visit, Nvidia is down another uh is down according to public another threeish% today. Great. So not great.
9:31
Uh, I also want you to check the the how Google is doing in the markets because the US judge rules Google illegal monopoli illegally monopolized key digital ad markets.
9:39
We talked about this on yesterday's show. Um, but uh down 1. 3%. Okay.
9:46
What's the market doing overall?
9:49
Probably something similar. Okay.
9:51
Doesn't feel super significant. Yeah.
9:53
Um, and Google will appeal this.
9:53
That was something that we talked about on the show yesterday.
9:56
Uh it does open the door to possible breakup remedies and briefly knocked Alphabet shares before a partial rebound.
10:02
Um OpenAI and SoftBank Stargate project eyes the UK for part of its $500 billion data center buildout.
10:11
This is kind of an interesting twist because the whole pitch for Stargate was like we're going to spend a half a trillion dollars in America. It was announced.
10:19
They even got the president Yep.
10:22
of America to, you know, come out and basically do a keynote for them.
10:24
Um, so anyways, fascinating. I mean, it makes sense.
10:31
Um, the UK, uh, is an ally, so they should have great data centers as well, I guess.
10:38
Uh, I I I don't really understand exactly where this is going.
10:43
We'll have to dig into that more, but it could be a it could easily be a capital play, right?
10:50
if they're trying to raise500 billion dollars. Yep. That's a huge number. Yep.
10:54
If they went to variety of sort of institutions in the UK and say, "Hey, we'll make the UK part of Stargate."
11:02
So, you can have you guys can have some type of AI narrative. Yeah.
11:06
But you need to put out the billion dollar. Yeah.
11:08
The one the one thing that we've seen time and time again is like these deals are extremely flexible, right?
11:12
And so it can be it can be we're buying from you, you're buying from us, you're getting equity, you're getting tokens, you're getting all sorts of different stuff.
11:20
Um, and so could you see a world where uh Europe is trying to develop AI supremacy and so they pay for a huge portion of this AI data center, but there's kind of like a roofer where they can buy it out and use it for their own model in the future.
11:36
And that justifies and that meets their their goal of like uh you know nationalist uh power around AI um just having the pro the mega project built in their country even if that's you know serving American company right now maybe it grows into something bigger over over time. I don't know.
11:55
Um, but on the other side, yeah.
11:59
Did you did you were you diving into this too?
12:01
Just that it it could be like an EUwide thing where everybody's kind of pitching to get get a part of the project. Yeah. Yeah. No, no. Uh, it makes sense.
12:11
Um, uh, OpenAI also, uh, debuted flex processing to have API costs for non-urgent jobs.
12:17
We saw this with the with the 03 and 04 mini models.
12:21
uh this trade slower responses and occasional occasional downtime for a price cut.
12:25
Uh we saw u Mike Nuke over at Zapier and Arc Prize talk about this a little bit with the when they beat when when OpenAI beat ARC AGI1 the precursor um eval it cost something like I forget it was like it was like thousands of dollars per task.
12:46
they had to really really throw a ton of reasoning tokens at it to get it done.
12:50
at it to get it done. And so a lot of these models there's always this they're always trying to be better and people really only care about the better models but they're also trying to cut and there's a lot of work there's a lot of knowledge work that gets done that doesn't need to be done in real time
13:04
like it's amazing that these models can do like a deep research report y in you know a minute but it's great it's it's equally valuable to uh basically you know send a request and just say like yeah sometime you know tomorrow morning would be great just have have it to me by tomorrow morning but like you know deliver it in the most efficient way. So
13:23
So I can easily see that becoming a huge amount of of their kind of like API calls over time. Totally.
13:30
Um data bricks bought uh incremental computing engine Fennel to turbocharge real time feature engineering.
13:37
Um we've talked about data bricks a little bit.
13:39
Um they the the goal here is to promise faster model iteration and lower compute bills for streaming ML pipelines.
13:45
somewhat related to um the flex processing going on in OpenAI.
13:50
Um I love to dig into more more into data bricks as they uh prepare to potentially go out because yeah, Fennel is only a three-year-old company.
13:58
Uh have been around for a long time.
14:00
Um but u we're going to see a lot more of this happening, right? It just makes sense.
14:06
Windsurf is a you know the most prominent recent example but uh I can see a lot more of these deals happening where you know great uh great early teams realize that they can do a lot more as part of a much bigger platform. Yep.
14:19
Two uh two uh Apple headlines today.
14:22
Uh the iPhone 16E was successfully made in Brazil.
14:25
And so this is kind of a leak, but there were some retail boxes that were spotted by Mac magazine showed assembled in Brazil uh signaling that Foxcon's Sao Paulo plant is producing the latest entry-level model to hedge tariff risk.
14:39
And so Apple and Foxcon have been on the case for a long time.
14:45
It is interesting because yeah, this is a Taiwanese company going international, right?
14:48
I think people have this idea that they they always associate Foxcon with China. Yep.
14:52
Foxcon is um out of Taiwan and still headquartered in Taiwan and has, you know, global ambitions which I think is good, right?
15:01
It's easier for Foxcon to set up production somewhere new than, you know, a new kind of like subcontractor. Yeah. It's also interesting.
15:10
Brazil specifically has not been in the conversation that much.
15:14
people talking about Vietnam, India.
15:14
Uh but if you go back to like the original BRICS report that was put out by Goldman Sachs, that was Brazil, Russia, India, China.
15:22
These were the emerging markets that Goldman said would be like major major contenders in the in kind of the coming two decades, right?
15:30
And then you I think that that report was probably published around 2005 or something.
15:34
Um and it looked like they kind of got it wrong because it was just China China. Yeah.
15:42
Like Brazil didn't really do too much.
15:44
Uh Russia obviously kind of turned inward and India did okay but no was nowhere near on the same scale as as China in terms of like dominance. Big gong. Exactly. Um bigong.
15:54
We have a we have a giant gong in the studio now but we are not we're not debuting it today.
16:03
Um can I debut maybe the uh the sound? No, just the Oh, yeah. Yeah. Show show the mallet. You have to show.
16:08
So, this is the this is the old mallet. This is the old mallet.
16:13
And that's the new mallet.
16:16
It gives you an idea of of where we're going with the gong. The scale of the gong. Look at the uh Yeah.
16:21
I mean, this thing is We were up at at 6:30 in the morning and Jordy was just I was waking up all of Los Angeles with this gong. It was so loud. It's great.
16:34
Anyway, um very excited to roll that into the show as we as we keep improving things.
16:38
Um anyway, the other Apple uh leak, a lighter Apple Vision Air headset will use titanium and launch in midnight black. Not a huge leak.
16:46
We kind of knew this was coming.
16:48
Obviously, they need to make it cheaper and lighter. Carmarmac has said this. Everyone knows this.
16:51
Um but it but they are working on it and every time you see these leaks, it's just a reminder.
16:56
Hey, lighter and cleaner.
16:58
They're dropping the Pro branding. Yep.
17:00
And they should definitely Yeah.
17:02
I I wonder if titanium is really the lightest thing.
17:04
Like I I with this I think it's just like light at all costs.
17:08
Like if titanium doesn't sound super light, but I don't know.
17:10
I would probably go aluminum or something, but they know more about it than than I do for sure.
17:16
Uh and we'll have to have big screen back on when when it drops to give his uh uh the founder of big screen to give his take as he dukes it out in the VR market.
17:24
Uh anyway, uh new Dwaresh Patel uh show dropped. Very interesting.
17:30
uh taking the exact opposite approach as the AGI 20 uh 2027 AI 2027.
17:33
So the AI 2027 guys came on and they're like this is happening in in 18 months I guess.
17:39
I mean 2027 is is is 18 months away. It's it's so close.
17:46
Um and they forecast it all out and it's very uh you know kind of doom and gloom.
17:51
Uh but then he he he dropped this three-hour episode which you should go listen to um uh talking about how AGI is really more like 2050 more than 30 years away and whatnot.
18:02
And it was very interesting to hear about and the big argument I haven't been able to listen to the whole thing yet is that reasoning is not intelligence.
18:09
So yeah, I was thinking about that because um the we love to reduce these things down into like very pathy statements like attention is all you need.
18:20
Uh I was thinking about that like the attention mechanism of the transformer it allows the it allows the neural network to focus on specific subp parts of the input.
18:32
So you give it a picture.
18:35
Typically most image generation algorithms like all the compute is spread across the image equally.
18:38
But that doesn't make sense because as soon as you get an idea that it's like oh I'm trying to actually identify if there's a cat in the corner.
18:46
So I know that there's a blurry animal in the corner. Let me zoom in on that.
18:50
Essentially it's essentially zooming in is like kind of what attention is.
18:53
Somebody's going to crack me but it's like close.
18:55
crack me but it's like close. It's this idea of like like attention uh allows the allows the the learn the the neural network to focus on the most important aspect of the computational problem and um and it's very clear that attention is
19:12
not all you need when you're talking in the context of like AGI like like just the transformer we scaled up the transformer that's the raw LLM that's just next token prediction we had to drop tool use on top of that we had to drop uh reasoning. On top of that, we
19:26
On top of that, we have to drop memory, databases, uh internet queries, search engines, like we have to we have to use all of these tools together.
19:34
Uh so attention is not all you need.
19:36
And same thing with scale.
19:38
Scale probably isn't all you need.
19:38
You probably also need some algorithms in there, some some like novel design of these things.
19:44
And so um it seems like there there are definitely like breakthroughs that need to be, you know, worked on until we fully get to AGI.
19:53
It's fun to to track and and I and I I can see it's it's more a definition.
19:58
It's more like a debate about definition than anything else.
20:00
Like they can be correct and Tyler Cowan can also be correct.
20:04
Uh which is why it's fun to debate this stuff. Yeah.
20:06
And the last uh rumor that was going around, uh Elon Musk actually said this is not true, but uh Reuters did report that uh that SpaceX, Palunteer, and Anderoll uh are talking to the US government about a Golden Dome project, which I think Trump mentioned a while back.
20:24
He likes the idea of we know that.
20:26
I mean, it's a great brand.
20:29
What's interesting, I mean, I I want to dig into this um because um we So, so the the the claim is that they're they're pitching between 400 and a thousand tracking satellites plus 200 armed satellites.
20:43
So, you put a bunch of satellites up in low Earth orbit.
20:45
They track missiles uh that are potentially coming into the United States.
20:50
If if somebody's sending a missile to, you know, TBPN HQ to take us out that one of the armed satellites would go into action and blow up that missile before it can blow us up, right? Pretty basic.
21:07
This is one of those things that comes out and I'm like, wait, you guys aren't already doing this?
21:10
Like, I would really appreciate if this already existed.
21:12
Uh I mean some forms of it already exist but but so so uh we can actually go through um the whole history of um the like domes generally I guess um because I think it's really interesting if we have some and we have some time uh the first guest is uh coming on at 12:30 and so I think we should run through uh history of Golden Dome Iron Dome. What do you think? Let's do it. Uh, okay.
21:36
So, uh, the US Department of Defense formally launched the Golden Dome Plan in April of 2025.
21:43
Do you want me to share this with you? Yeah, that'd be great.
21:46
Let me let me send this over to you.
21:47
Um, in 2025, um, how do I copy this link? There we go. Um, to Jordy. Boom. There we go.
22:01
Uh and the and and basically the plan is to ring the planet with hundreds of sensor satellites and roughly 200 space-based interceptors capable of shooting down ballistic and hypersonic missiles in their boost phase.
22:11
SpaceX, Palanteer, and Anderil are currently the leading industry team, which is I mean it's just like a wild combo of companies, right?
22:21
because it's like all FF.
22:25
Um, which is why I should pro I I I actually don't know anything about this and uh and you know uh I think all of these companies would would decline to comment on speculation and I have no inside information here.
22:35
Um but uh I'm excited about this.
22:38
So we're going to talk about it anyway.
22:40
Um so of course there are other subcontractors on stuff like this.
22:44
There's more than 180 firms ranging from Loheed Martin, RTX to newer startups uh vying for pieces of the project that may be may cost well over 300 billion.
22:53
So, Golden Dome revives the I now JY's about to make the loudest gong hit in history if he can't control himself.
23:02
Um so, uh do do you remember Star Wars?
23:05
This was Ronald Reagan's 1983 strategic defense initiative.
23:08
And he was like made fun of for this because everyone was like, "Oh, stupid president thought saw Star Wars and wants to build laser weapons in space."
23:16
But like it was actually like a good idea. Exactly.
23:18
And so uh this uh and so so so so Golden Dome is kind of like re revising that plus what the uh the United States already has which is called the layered homeland shield.
23:33
I guess the the Patriot, the THAAD, the Aegis BMD, groundbased midcourse defense.
23:37
Uh, and so uh let's go into the IND to Israel's Iron Dome and how that works and then we will contrast that with the American uh current situation and then where we might go. Yeah.
23:50
So, I'll give some backstory over here.
23:51
After the 2006 Lebanon war showered northern Israel with roughly 4,000 rockets, the Israeli Ministry of Defense rushed development of Iron Dome, jointly built by Rafael Advancel Raphael Advanced Defense Systems and Israel Aerospace Industries with Rathon providing US co-production.
24:11
The system entered service in March 2011 and scored its first combat intercept two weeks later. Quick turn around.
24:15
Uh, since then, Iron Dome has logged over 5,000 successful kills with a claimed 90% success rate.
24:23
So, those kills are uh missile uh kills.
24:27
So, this is a missile defense system to be clear.
24:29
So, um US uh financing has been uh decisive, divisive.
24:36
Um uh yeah, a lot of people don't like that America's paying for Israel's Golden Dome.
24:42
Um, but of course there's like all the strategic decision making about well they're an ally in a very complicated area, complicated region. You you back them.
24:51
Also, there's a lot of Israeli citizens that come to America.
24:53
We want to support them and stuff.
24:55
So, we're not going to go into all the geopolitics of it, but so Congress has spent about 1.
24:58
6 billion between 2011 and 2021, plus another 1 billion emergency trunch in 2022.
25:06
But I think what should be non-controversial and nonpartisan is that hey, if we've invested a ton of money in this technology, we should get a claim on some of this IP and we should be able to bring that back and it should be able to protect Americans.
25:18
Y uh and and I think that that's probably something that most people would be in favor of.
25:24
So in exchange, the US Army gained two Iron Dome batteries for limited homeland and expeditionary use and early experiment in importing Allied systems. Exactly.
25:33
So they build it there, they test it there to us.
25:34
Um and anyway, so the key takeaways uh for you know I think you know basically the takeaways that that the Golden Dome uh will will you look to implement is software first design enables um basically like rapid updates to the system. Yep.
25:54
Uhworked launchers, radars and battle management lets operator operators uh mass interceptors at the most dangerous threats.
26:02
um basically like conserving am effectively ammunition.
26:06
Um and just this constant pressure uh oh this is yeah this is interesting is forcing uh iterative improvement in a way that a US system just never would right because America's famous for like the exquisite system like the F-35 took two trillion in like 30 years because like it's not like it's not like oh F-35s are blowing up and getting shot down constantly so we got to make them better.
26:28
But it's also like we don't have Canada and Mexico constantly launching rockets into the US.
26:33
If we did, we'd be able to iterate really quick.
26:35
We're in the we're in what what the fat on the couch era and we're going to get back in.
26:40
And so this is this is us getting back in shape.
26:44
Um and so um uh giving a little bit of history on how America thinks about this.
26:50
Um, I mean, obviously there's a there's a few different layered shield systems that have that have built up over time, but it all goes back to that Reagan strategic defense initiative, aka Star Wars, announced on March 23rd, 1983.
27:04
Uh, the idea was space-based lasers, which sound crazy, but kinetic interceptors, which actually makes a lot of sense, and exotic sensor webs to render nuclear missiles obsolete. C.
27:13
Uh, Congress ultimately spent roughly $30 billion in current dollars on prototypes such as brilliant Pebbles miniature interceptors and alpha chemical lasers.
27:25
But the collapse of the Soviet Union and severe technical hurdles led to program curtailment by 1993.
27:29
So, of course, like can you imagine how difficult it would be to put how expensive it is to put uh technology, lasers, interceptors, drones, anything like that into space when you don't have SpaceX launching a new rocket every single day.
27:46
Like, you have to use NASA for that.
27:48
It's extremely expensive.
27:50
Uh you just don't have the cost the cost to LEO.
27:53
So, you can't iterate or anything like that.
27:56
And then also a lot of these a lot of these like you know dronebased systems were not really developed yet.
28:02
And so uh all of it was a little bit um too early but it did seed today's hit tokill technology infrared sensors and the political idea that the US could defend rather than simply deter against nuclear attack.
28:18
Uh yeah, and so uh the Golden Dome has this like kind of potent, this is all kind of rumor at this point, but um you can think about two different layers to the Golden Dome dome like core.
28:29
So two ring satellite constellations uh wide field tracking layer that's 400 to like a thousand satellites.
28:35
Cubat class which is like star think like Starlink uh in 500 kilometer orbits provide a global persistent infrared coverage PIR coverage queuing interceptors within seconds of a hostile launch.
28:48
So basically you put up all the different sensors and then you're seeing is are there any missiles that are launching and then the shooter level is a larger platform to carry kinetic kill vehicles KKVS solid state lasers.
29:01
actually doing the laser thing allegedly. This is all alleged.
29:06
Um but yeah, it can destroy can destroy missiles 50 to 150 seconds after boost. Yeah.
29:13
And a lot of what uh the the real role of deep tech is to turn science fiction into reality, right?
29:19
And so this this is sort of crazy uh conceptually but if it's you know if uh if effective it will be extremely costefficient way to um mitigate uh the threat of you know ICBMs and and uh also there's this rumor that it will be offered on a subscription model. Did you see this?
29:43
So, so, so Elon's like, "Hey, Starlink's actually a pretty good model.
29:46
People on really churn, but it also makes sense that as opposed to building this exquisite system, like it, it really is, it sounds funny, but it is it is a reasonable way to to finance this type of development uh and the ongoing upkeep and the and the iterative improvement of it.
30:03
Uh, so the Missile Defense Agency issued its first industry suh sources sought notice on April 4th, 2025.
30:07
I think that's probably what's driving the news today.
30:11
Calling for concepts that can that can demonstrate initial boost phase intercept by 2026 and expanded capabilities through 2030.
30:18
The space force will own command and control.
30:19
And so like the companies that build this stuff, whoever they are might be SpaceX, Ballanter and might be completely different companies, but um they're not going have their finger on the trigger. Yeah.
30:33
Command and control operates with the SP. Yes. Yeah.
30:35
because we are a democracy and and this was something that was it became a point of debate with uh with Starshield and Starlink.
30:44
And so there was a moment where Starlink was so dominant and there was no real path for the US government to buy Starlink in a meaningful way like buy it as a capability not buy the company.
30:55
And so people were saying like, well, if Elon turns on Starlink in the Ukraine, that's helping Ukraine.
31:04
If he chooses to turn it off, that's hurting Ukraine or Israel or Taiwan or any of these countries that are in geopolitical conflict.
31:15
And so all of a sudden, the decision about our geopolitics actually rests with his business decision.
31:20
And so that is something that should I think be decided democratically through America's normal process for how we engage with uh with allies and adversaries.
31:34
Uh it should not be a purely economic consideration for the company that just wants to maximize shareholder value because you could imagine, you know, if you're just trying to maximize shareholder value, they're like, "Yeah, okay.
31:45
We're going to turn Starlink on for both sides of this conflict because we just want to make as much money as possible."
31:50
Um, but so Elon got all this intense like criticism.
31:54
Oh, Elon's just playing like, you know, God and like, you know, uh, he's deciding what's going on with this war.
32:01
Uh, he shouldn't have that much power.
32:03
But I always said like that's not going to be an issue because the the US government will just be able to buy it as a capability.
32:08
And they wound up doing that. That's Star Shield.
32:11
And then uh and then it's actually like a more more secure version of it.
32:13
And it's something that the US government then decides.
32:17
And this is going to be the same thing where it's leveraging technology from private citizens that have been developed, but ultimately the decision of how it's used, the command and control rests with the with the the government and ultimately the American people, which is great.
32:31
So the government will pay an annual service fee rather than buying hardware outright, which sounds funny because now it's like SAS, but uh it's way better that way because of course then you can upgrade and you can iterate and you can improve. Um, yeah.
32:45
And these annual service fee uh proposals seen by Reuters so far, which again Elon uh denied denied it. Yeah.
32:53
Suggests a 30-year life cycle that could reach $600 billion, roughly equivalent to three years of the entire US defense budget.
33:00
So really uh eye watering uh numbers. Yep.
33:04
But um makes sense in the context of you know preventing uh fullcale uh you know nuclear totally war uh and having you know hundreds of ICBMs flying through the sky is effectively in the interests of all of humanity. I agree.
33:22
So I agree take out all of them.
33:24
Um of course it gets more complicated because like everything that's like the line between like defensive technology and offensive technology is pretty loose, right?
33:33
So, it's like if you can build this like KKV vehicle or secrecy vehicle that can or space laser that can shoot down a missile, it can also shoot down like a 747 with like the president on it or it can shoot down uh you know an adversary or can conduct an assassination.
33:51
And so like you still have to like even if you even if you create the best Golden Dome possible and make make nuclear war a thing of the past like you will still have the risk of conflict, right?
34:03
And so um you always need to come back to just like how we actually resolve these conflicts.
34:09
Um interesting to hear um a little bit about who how all these companies could fit together hypothetically.
34:16
Uh obviously SpaceX has launched the cheapest mega constellation with Starlink.
34:20
Uh and they also have the Starlink bus which is we like the platform that Starlink has built on.
34:26
So they could easily swap out internet for I guess it's uh infrared. Um, yeah.
34:31
And then just start spamming those up there on the subscription, which is exactly how I would describe their their approach to to putting up Starlink satellites.
34:42
It is just spamming them up there. But it's great. It works really well.
34:46
Um, and I'm sure there's a lot of work that goes into positioning them perfectly and whatnot, but um, so they'd be like potentially the prime integrator.
34:52
The Falcon 9 R and Starship launches would be putting up these, uh, satellite buses. Yeah.
34:57
But there's this is going to be a huge collective effort, right?
35:02
There's so many different primes that are, you know, wanting to participate in this.
35:05
You have the new primes, the Palanteers, the Anderles, and then you have uh Loheed Martin, Martin, Northre, Grumman, RTX, which is Rathon, Boeing.
35:14
Uh Boeing has a bunch of heavy satellite experience.
35:17
Um Rathon has a bunch of relevant experience.
35:20
Uh North is like, you know, very oriented around these.
35:26
uh I think designed yeah has built uh missile interceptor products in the past and and a lot of rocket motors too.
35:34
So if you want to deploy some sort of missile from the from like a satellite platform uh actually building that rocket motor they have they do have a heritage there.
35:46
There's good things you can say about them.
35:47
There's things where they're falling behind and Northrep actually had a huge explosion on April 16th.
35:50
Um, uh, Duva had a post yesterday.
35:54
Uh, I'll just pull it up on on my computer, but he said, "A real setback for America.
35:59
This rocket motor plant was such a pillar of national security capacity that Northrope had agreed to be a supplier to Boeing in a comp competition to build the LGM35A Sentinel, a key part of the US nuclear triad."
36:12
Um, so anyways, unclear if this explosion was just an accident uh or if there was uh something else going on.
36:20
um these types of facilities are are super dangerous.
36:23
But again, uh this is Northrep and Boeing already being a uh that they were basically leveraging this facility to um to uh contribute to the US nuclear sort of defense apparatus. Yeah.
36:38
Uh it's uh it can be dangerous stuff.
36:41
Uh so more than 180 firms responded to the April industry day including laser specialist general atomics L3 Harris for space radars. Everyone shows up.
36:50
Even AWS and M and Azure Microsoft showed up said hey we got the data back end covered. Uh and it makes sense.
36:59
This should be bipartisan.
37:00
It's like protecting us from nuclear war. This is amazing.
37:02
Uh and and I'm very excited that to to learn more about this and I it it's always tough because like they are probably not going to tell everyone everything, right?
37:12
because it's going to be classified and like because as soon as you say this is exactly how it works, well, it's easy to start shooting them down and taking them out and defend and figuring out what the what the anti-missile anti- anti-missile is, right?
37:23
Um so uh anyway uh you know it'll be interesting in terms of uh just the history of missile defense in the 1960s.
37:33
Uh we have the Nike Zeus and Sentinel.
37:35
These are silo based sites and uh so you like you know we got to fire it off from the ground.
37:44
Uh uh 1983 we see SDI Star Wars the tech was premature but they did create the idea of like this IR sensor and KKV field which is kind of the modern strategy.
37:55
I think I I I think that we're not we're not reinventing the wheel on that.
37:58
We're just using the latest technology and actually being able to get it to scale.
38:01
Um, and then, uh, of course the the the Iron Dome is kind of like the gold standard here until the Golden Dome becomes the gold standard hopefully uh, because it's been combat validated with 90% greater success. And so, I don't know.
38:15
I think we should keep following this story.
38:16
It'll be interesting to see where uh, where it lands um, and how much we learn.
38:20
I mean at the very least it will be I think it might be more of a business story than a technology story because I think a lot of the technology will be classified effectively but we will be start like as I mean Palunteer is a public company so if there is a big award it will show up in their earnings uh and that's cool and that will drive the market and that that's interesting to follow.
38:41
Yeah and it's coming at a very interesting time.
38:44
Obviously, Reagan's uh Star Wars program uh and campaign was was uh made fun of in many ways, partly because of the name.
38:52
Golden Dome will be made fun of too because it's a kind of a funny name, right?
38:57
It's almost uh but at the same time, it's coming at a time when the commercial space economy is flourishing.
39:04
We're putting stuff into orbit every sing.
39:08
So uh the timing feels right and uh over time this could replace a bunch of systems on the ground that are very very very costly and uh to you know create and maintain.
39:18
So well if you think the legacy primes are going to do well if you think Palunteer is going to do well or vice versa you can go express your opinion your indiv your independently formed opinion on public.
39:30
com investing for those who take it seriously multiasset investing industry leading trusted by millions.
39:37
Um, they got pretty pretty much every asset on there.
39:39
Pretty much every asset on there.
39:41
Um, and we got to do another ad ramp. Time is money. Save both.
39:47
Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place. Back to back, baby.
39:53
But we got to move on to Johnson.
39:55
Card reader here to just swipe. We have a card reader.
39:57
We We ordered one um for a shoot that we did and I and I got some very nice cinematic shots with Ben for uh the card reader. There we go.
40:05
Um well let's talk about Generative Johnson. Generative Johnson.
40:09
Uh so Johnson and Johnson is making a shift to focus only on the highest value generative AI use cases and shut down pilots that were redundant or underdelivering.
40:20
And this is big news because a lot of companies have probably sold huge generative AI transformation projects into all sorts of companies and we'll see how many stick around. Um yep.
40:32
And so uh they used to uh previously Johnson and Johnson was experimenting with generative AI pretty broadly across the healthcare conglomerate and now they're taking a more focused approach and they want everyone to know the journal about it.
40:48
Let's try a bunch of stuff. Makes sense.
40:50
And then see what's what's working well today, what would future and then churn. Churn. We hate to see churn.
40:58
Anyways, so uh chief information officer Jim Swanson said the move ensures the company allocates resources only to the highest value generative AI use cases while it cuts projects that are redundant or simply not working.
41:08
Um that was a pivot we made after about a year of learning.
41:13
Swanson said now we've moved from a thousand flowers to a really prioriti prioritized focus on Genai.
41:19
Genai. The thousand what a funny what a funny analogy golden dome thousand flowers the thousand flower approach involved a number of use case ideas germinating from across the company which made their way through a centralized governance board at one point employees were pursuing nearly
41:36
9,000 individual use cases many that were redundant or simply didn't work he said and as the company tracked the broad value of AI including generative AI data science and intelligent automation it found that only 10 to 15% of use use cases were driving about 80% of the value, he added. Interesting. And Interesting.
41:52
And I imagine, yeah, I mean, I'd love to know exactly what they're uh what they're what they're using, but you can imagine like, you know, when all you have is a hammer, everything looks like a nail.
42:04
Let's throw general at everything.
42:06
But there's going to be places that are like, "Oh, wait.
42:07
We we still have a division that's just transcribing paper receipts or something.
42:14
Should just get on ramp."
42:14
But yeah, so here's where it's working.
42:16
Uh J&J is drilling down into high-value Genai use cases around drug discovery and supply chains.
42:22
Uh Zack Weinberg might put the drug discovery one in the true zone as well as an internal chatbot to answer questions on company policy.
42:32
So hard to hard to hard to know uh if this it's like okay chat with your company handbook basically which that's fine but I don't think people care at all.
42:44
Drag the handbook into enterprise enterprise version of chat GPT in your Azure cloud and ask it questions. Yeah.
42:52
Not probably something they're paying for a standalone product for or maybe will long term. It's hard to say. Sure.
42:58
Uh I know there's companies like Glean that have you know gotten to uh you know multi-billion dollar valuations doing something like this. Yeah.
43:07
Um anyways, so um it's also just funny because you know that like with a company like J&J like McKenzie was like all over this being like with like millions of decks of like let's put it in this, let's slot it in here, let's do all this.
43:19
Um and and and then there's also there's just all the forces aligned to do 900 projects because yeah, anyone who's at J&J and wants a promotion is like, well, yeah, I'm not just a marketer.
43:33
I'm a technology enabled marketer and I my team is using AI, so we're going to be more efficient.
43:38
We're going to drive more shareholder value.
43:41
Then then you have the CEO who's like, "Oh, I got to tell Wall Street a an AI transformation story." Oh, yeah. We're firing everyone. It's all AI. So very interesting.
43:48
No, we're not doing it this quarter.
43:50
We're not firing everyone this quarter, but like AI is coming and you can you can price this in the stock to day.
43:54
It's interesting that they use a centralized governance board to lead the thousand flowers AI transformation.
43:58
Like it's like the one thing you shouldn't do is just like instead just just diffuse the the research.
44:06
I mean I think the way you actually transform an organization is just say like hey everyone like AI exist.
44:14
It's the Toby lookkey approach. It's Shopify. Like AI exists.
44:15
Like whatever your job is, like use chat GPT.
44:20
If you need to expense Chat GPT, it's the same thing as like Google exists.
44:23
If you hired an employee and they didn't use Google, you'd be like, whoa, whoa, whoa, what what's going on with this person?
44:29
Like they need to be googling stuff. Yeah.
44:31
One example that is working is a rep co-pilot, which helps coach sales representatives on how to engage with health care professionals about new treatments.
44:39
We actually use this to coach our sales reps on how to p pitch the show to other to people that are listening to other podcasts. Yeah.
44:46
And I think we have, you know, our sales team isn't as big as J&J, but it's close, right?
44:52
As you you know, dozens of thousands, I think.
44:55
Um but uh anyways um the company is piloting this in its innovative medicine business uh segment which develops new treatments for oncology and other areas and is now working to expand that pilot to its medtec segment which sells robotics and hardware like hip replacement and lenses.
45:12
So the rep co-pilot that sounds like AI SDR but not going all in on the agentic motion.
45:21
It's more like an AI sales manager. Uh, maybe.
45:24
But I I I I would imagine that what works well in in sales rep copilot is okay, I just got an email from someone we're trying to sell to.
45:37
They asked these questions instead of needing to go back to the team and say, that's saying go going back to the sales manager.
45:43
How would you answer the right question? Exactly. Exactly.
45:45
And so that's just that that's just uh information retrieval.
45:48
It's LLM as a knowledge engine and help with copywriting, right?
45:53
which is like what we know these things are so great at.
45:58
Um and then it has a little bit more on the internal chatbot.
46:01
Uh it says it the internal chatbot ingests information about company policies and benefits to help reduce the sum 10 million interactions employees have every year with the services team.
46:11
Y and so this is just like hey uh am I allowed to take this day off? Yeah.
46:15
Uh I already used uh 14 of my vacation days.
46:19
we should actually develop something like this because I'm getting sick of everyone on our team asking like how much creatine should I be taking?
46:27
Like is it chest day or is it back day or is it leg day?
46:29
Like yeah, you know, if we could just have a chatbot that they could ask all that stuff, it would really am I am I allowed to work on Saturday?
46:36
I've worked, you know, uh 10 weekends in a row and I know it's required that I take one Saturday off every 10 weeks.
46:43
Um can I uh do I have to take it off?
46:47
Do I have to take it off?
46:49
I want I want I want to keep grinding.
46:50
Yeah, this is uh potentially more interesting.
46:53
Um in drug discovery, the company is looking at whether Genai can help researchers find the optimal moment to add a solvent to turn a liquid molecule into a solid.
47:01
Um and they're also doing stuff on the supply chain side, specifically around supply chain risk, um which is relevant now given uh some of the shortages and and um you know, trade war stuff that's going on.
47:17
So anyways, uh the good news is if you were working with J&J and you didn't and they didn't churn, probably on the right track at least.
47:25
And so um I think this will be a good signal.
47:29
Uh we need more companies to like overspend and then scale back to figure out like what what's actually valuable. Yeah.
47:35
It's also unclear to me like we we we maybe we should try and find like some sort of like consultant or someone who has worked inside these Fortune 500 companies and kind of seen what is actually working or not.
47:46
We might need to have them call in like anonymously honestly.
47:49
But uh but I'd love I'd love to know like uh of of these like for a representative organization that's done like a thousand AI projects, how many of those are just hey we had our team sign up for chat GPT pro versus hey we had our team buy a trial with a enterprise like an AI SAS company versus we built something internally.
48:11
we had our teams implement something because obviously a company like J&J has a massive IT team.
48:18
They have a CIO who's commenting to the Wall Street Journal.
48:20
So clearly they have um you know the ability to roll out software and automation across that's entirely custom to their business.
48:26
Um and and I would be interested to see like what tools are they using because they probably haven't built their own AI co-pilot for coding but are they using Windsor? Are they using cursor? Are they using Devon?
48:38
Like what's sticking around? Yeah. Yeah.
48:40
Uh it's interesting but um well if you're looking uh for AGI for watches many people have said that bezel is super intelligent for uh buying uh your next watch.
48:55
Your bezel concier is available to source any watch on the planet. Seriously any watch. Head over to getbzel. com. Download the app.
49:01
Build a wish list and pick a great watch.
49:07
Can't recommend them enough. We can't.
49:09
Uh we got another headline here.
49:09
The EU delayed punishing Apple Meta just before trade talks started.
49:14
Uh they postponed an announcement that was initially planned for this week uh earlier this week.
49:21
So the European Union recently delayed penalizing Apple and Meta Platforms temp they're just always always coming after our uh big tech.
49:28
I said earlier I will defend big technology.
49:36
You didn't just say that. What did you say?
49:38
I say you didn't say you would defend them.
49:41
You said you would die for them.
49:43
No, I said I would take a bullet. Okay. Take a bullet. Yeah.
49:45
I would probably hold out my arm. Yeah. Yeah. Yeah.
49:48
And just flex as hard as I could to try to, you know. Yeah. Block it, but not Yeah. Yeah.
49:53
I mean I mean that is the goal of like this the the Secret Service.
49:57
Like if Sundur Pachai was over there and I was wearing a bulletproof vest, I would dive in front of it for sure. That's right. That's right.
50:02
Diving in front with a bulletproof vest. Exactly.
50:05
That that's the level of dedication.
50:07
And still a lot of dedication. Totally.
50:08
But you know, it's not you're going to get badly bruised by by that.
50:12
Um but you're going to look like a hero. Totally. For big tech.
50:13
Um uh anyways, uh what's new?
50:17
EU coming after big technology.
50:21
But um they had initially planned to announce cease and desist orders targeting the tech giants on Tuesday and had informed at least one of the companies of that timing.
50:29
people familiar with the matter said they're like, "Hey, by the way, we're going to send a cease and desist um and slap you with some fines."
50:37
The decision to postpone the announcement was made shortly before EU trade commissioner uh Maros uh Seph Kovic met with US officials in Washington on Monday for his first in-person talks since President Trump announced a 90-day pause on some tariffs.
50:51
I think this is a good call by the EU.
50:53
Uh there's kind of bigger fish to fry right now.
50:55
Um, and it says, "In addition, this week, Italian Prime Minister George Maloney met with Trump, who said he would have very little problem making a trade deal with the EU." Yep. Okay.
51:06
So, the the actual cases here, what's going on? Meta and Apple.
51:12
They're both uh under pressure from the EU for alleged breaches of the Digital Markets Act.
51:17
This is a law that seeks to make it easier for small companies to compete with their big tech rivals.
51:23
Uh the commission opened investigations in March of 2024 and issued preliminary findings in both cases last summer.
51:28
The cases carry a potential fine of up to 10% of the company's global annual revenue though people familiar with the matter said that they expect fines would be much lower.
51:40
But c can you imagine that you you you you're you're vending you know uh the iPhone you're selling iPhones in Italy or something and because you're not in compliance with the digital markets act that says oh you got to have like open app store competition or you got to let this API work in this particular way so someone can build on top of Apple in like a more competitive way.
52:02
um you violate that, they catch you and the fine is 10% of your global revenue, which is like hundreds of millions of dollars across these companies.
52:14
Like it is it is an insane amount of money.
52:16
Um but of course this would all be negotiated and there's a lot of leverage because consumers like these products.
52:23
Regulators are basically negotiating.
52:25
We saw the FTC coming after Meta. Yep. Saying we want 30 BS. 30 BS. 30 BS.
52:30
We see you spending on AI capex.
52:34
We know you're good for it, Mark.
52:34
We want We saw that cubidis on your wrist. Yeah, we we saw that. We saw that FPjorn. Yeah.
52:39
Give us some of that when flexing goes wrong. Yeah. Everyone just goes Yeah.
52:44
Anyways, they say uh European officials say they won't water down their tech regulations in response to US pressure.
52:51
But some lawmakers in the European Parliament have questioned whether the cases have become political.
52:58
Wonder if they've become political as the EU seeks to negotiate a deal with the US on trade.
53:01
Uh the Meta and Apple cases both relate uh and you covered this already.
53:06
So so so with Meta specifically uh the EU is upset that Meta has a policy of you either have to buy a subscription and pay for Facebook or Instagram or you have to allow Meta to use data for targeted advertising.
53:24
And and the EU is arguing this does not comply with the digital markets act.
53:27
uh Meta, they said, "Hey, here's an olive branch.
53:31
Let's introduce an alternative that allows you to see less personalized ads without buying a subscription.
53:36
Third option, but they say that's still not good enough.
53:41
We want you to just show random ads all the time."
53:42
I guess it's so wild because that's so harmful to businesses, small businesses, incredibly harmful businesses.
53:50
It's it's it's actually okay.
53:53
like Apple, Nike, yes, you know, a big insurance company, a big bank, they have billions of dollars to spend on advertising.
54:00
They can just basically spend money in a completely non-targeted way.
54:03
And so policy like this over time will just hurt small businesses that you think you're trying to protect.
54:10
Even even companies that would go on to compete with uh with these big tech giants are going to struggle when they're like, "Hey, we have a million dollars to spend on advertising this year and all we can advertise to on Google is just this random audience."
54:24
And so the ads are going to be terribly inefficient.
54:26
Um you know, c just will will go through the roof and we saw this with with um uh the sort of iOS tracking changes.
54:35
Um and so anyways, these types of app tracking transparency.
54:44
Yeah, all of this is just absolutely insane to me.
54:46
And um well, some people hate small businesses and they just want to hurt them.
54:50
It's possible that the EU regulators small businesses.
54:53
Yeah, they want to support.
54:56
I mean, that was the most ironic thing about the whole AT thing was like it just made Facebook stronger because they were the only company that could actually do machine learning based ads and uh and nondeterministic ads.
55:07
So, they didn't need to track you anymore because they had enough data that they could infer that this person wants a Ridge wallet just from what they're watching on the actual Facebook.
55:16
It also doesn't even on the consumer side. Yeah.
55:19
I want ads perfectly targeted.
55:22
completely agree with this.
55:24
Like, do not show me ads for dementia medication or like, you know, I don't know.
55:29
There's a million things that I'm not in the market for and I just it's a complete waste of time to show me like even just products that are sold to women.
55:36
Like, I don't need to see any of those.
55:38
Um, and and all of that's just like a waste of time.
55:41
And I actually enjoy and get value out of having ads.
55:45
If I'm going to see an ad, it should be targeted at something.
55:48
It should educate me about something that I'm already in the market for or considering buying.
55:52
And every every every once in a while an American VC will go to Europe and make a joke about cookies. Yeah.
55:58
I I in the past I've made jokes about cookies.
56:01
Um but it's still just like funny how their like highlevel tech policy really works.
56:07
You go over there and you will spend if you're just using the internet. Yeah.
56:11
I hope you enjoy cookies because you'll be accepting a lot of them.
56:15
Um, so anyways, well, if you're traveling, you should find your happy place. Find your happy place.
56:23
Book a wander with inspiring views, hotel, success, dreamy beds, top tier cleaning, and 24/7 concier service.
56:31
It's a vacation home, but better, folks.
56:33
And Wanderers's just been on an absolute tear. They have.
56:34
Um, many people are calling it an overnight success.
56:36
Both in the speed at which they're crushing it. Yes.
56:41
Uh, but every time you stay at a Wander, it's effectively an overnight success. Right.
56:44
So close overnight success.
56:49
Uh so uh we have we have new data on Apple in China.
56:53
They're losing ground in the smartphone market as local rivals gain.
56:57
The US tech giant dropped to fifth place with a 13. 7 market share.
56:59
They lost its top spot in the China smartphone market dethroned by Xiaomi as Beijing's consumption boosting subsidies help buoy demand for cheaper products.
57:11
The US tech giant's share of China, China's highly lucrative phone market shrank to 13.
57:17
7% during the first quarter from 15. 6 a year earlier.
57:20
That is a pretty big drop.
57:22
Um, Apple's been facing increasing competition in China in recent years despite claiming the top spot in the final quarter of 2024 with a marginal lead.
57:31
The iPhone maker lost out to local rivals Vivo and Huawei on annual shipments that year.
57:35
Um, and it is interesting.
57:37
Have you seen any of these Chinese phones? some of them.
57:38
I mean, it feels like there's like a Cambrian explosion.
57:42
Like I saw I show speed was over there and looking at this.
57:45
It's a trifold phone that basically turns into like an entire tablet, but it's almost the same size as an iPhone.
57:53
Like they're doing cool stuff over there. Like the tech is cool.
57:57
I want a phone that's structured like a newspaper, John.
57:58
I want I want it to, you know, basically fold up like this and then I want to be able to unfold it like this and just, you know, you're sitting in the back of a Whimo. They're getting close.
58:08
So, that's where we're headed.
58:10
Uh I just I I I would not be surprised to see Apple drop out of the top five. Um yeah, I agree.
58:16
In uh you know, even in the next year, it just does not seem like they are welcome there despite having their supply chain oriented around it.
58:23
And the competitors are just iterating quickly.
58:28
They have a cost advantage. Yep.
58:28
and and and and there's also a major cultural shift in China about like nationalism like let's buy let's buy Chinese-made products from Chinese brand and it's no longer government subsidies.
58:39
Xiaomi's return to the top spot after nearly a decade was largely due to government subsidies.
58:45
So they're just directly subsidizing um and that is resonating with uh just the the Chinese citizens profit. Yeah.
58:53
I mean, it's it's so it's funny to compare Apple's experience in Europe where it's basically like an anti-subsidity.
59:01
It's like, get out of here.
59:02
Pay us 10% of your global revenue.
59:05
Accept our cookies and leave.
59:07
And oh, by the way, like what has Nokia done in I mean, it's the only broadly European phone company.
59:12
Uh, and Nokia is completely out of the game.
59:17
They're not really producing new phones that are competitive whatsoever.
59:19
Um, when you go to Nokia.
59:21
com, by the way, one, what do you got?
59:24
They just the name of the site is just Nokia Corporation, which is not super optimized.
59:29
Um, Apple just says Apple, but Nokia Corporation, and they there's not a single mobile device on the homepage.
59:40
Yeah, I think they're out of the game.
59:41
So it's it's very odd where where you know China has upstart companies that are competing with Apple and they're subsidizing them and being very aggressive to push and win and then Europe is taking the opposite approach where they're like Apple still is China hasn't banned iPhones in China like you can still sell them.
1:00:03
They are subsidizing their national champions, but at least the end result of that will be more technology, better homegrown competitors, right? Yeah.
1:00:13
Versus Europe is just give us 10% of your global revenue and uh yeah, we're not going to even try and compete.
1:00:21
We're just going to try and tax you. Yeah.
1:00:23
It's like Yeah, it's a very very weird strategy.
1:00:28
Well, hopefully Harry Stevings to that.
1:00:31
Maybe maybe someone in maybe someone in Europe will try and build a phone uh and and take some market share, but it doesn't seem like it's happening.
1:00:37
Um yeah, so very very the subsidies are basically oriented towards 75% of the country's entire smartphone user base.
1:00:47
So um no matter what kind of product Apple releases to try to hit that lower end of the market, they're going to have trouble competing.
1:00:55
So basically, if you buy a phone in China that's under 6,000 yuan, the equivalent of $821. 92, $821.
1:01:07
92, uh consumers uh like the subsidy applies.
1:01:10
So consumers can't use the benefit to buy products with bigger price tags like high-end iPhones.
1:01:14
And so the whole the whole push will push Chinese consumers to replace their phones with products that cost less than 3,000 yuan, a segment that makes up 75% of the country's smartphone user base.
1:01:26
This is also a great uh industrial policy or or economic policy because um if you can get your entire c your entire country on phones on smartphones um you're going to increase you know finding jobs doing remote work like communication economic activity paying
1:01:44
each other like every like the the smartphone is the backbone of the economy and so getting everyone in in the entire even at the lower end of the lower and middle class on smartphones is uh is it's just good economic policy domestically. It's like it's I mean it's
1:01:58
It's like it's I mean it's kind of like what we talked about in in uh the US where uh there's this push to get high-speed internet into rural communities.
1:02:08
It was an absolute disaster.
1:02:09
Uh instead the focus should have just been hey let's try and subsidize potentially like smartphones that connect to Starlink satellites.
1:02:17
Something like that would have been a much much more like free market approach.
1:02:20
We're getting out out capitalism in China recently. We got to step it up. And uh they're good. Yeah.
1:02:29
And and Europe needs to Europe needs to step it up, too.
1:02:31
Anyway, Apple is under threat in China.
1:02:34
If they don't want to just give up on the market entirely, what should they do?
1:02:37
I'm thinking what you're thinking.
1:02:39
They should buy some billboards. They should get on adqu. com.
1:02:42
They should buy every billboard.
1:02:42
They should buy every billboard in China.
1:02:44
Uh out ofome advertising made easy and measurable.
1:02:47
Say goodbye to the headaches of out ofome advertising.
1:02:48
Only AdQuick combines technology out of home expertise and data to enable efficient seamless ad buying across the globe. Um, thank you Adqu.
1:02:57
Well, we're staying with big tech.
1:02:59
Big tech is under attack left and right.
1:03:02
We've uh big uh Google uh Meta and Apple are under attack in Europe.
1:03:08
Apple's under attack in China.
1:03:11
And then Meta and Google are under attack in the US for antitrust.
1:03:13
And we talked about this yesterday with Adam with Adam, which was great. Great segment.
1:03:19
Go listen to it if you haven't already.
1:03:21
Um, but uh they are the two titans of digital advertising are facing unprecedented legal threats over tactics they use to reach dominance.
1:03:28
And it's wild because I'm sure this will get into it, but basically the FTC and the Justice Department were basically like, let's just divide everything up and you attack and we'll attack and you know, they'll be facing an attack from, you know, both sides.
1:03:43
Um, so the key points, Google and Meta are facing antitrust pressure, focused on tactics they used to grow into tech giants.
1:03:50
Google lost its second antitrust case in eight months.
1:03:55
Moment of silence affecting its core ad business.
1:03:57
Meta faces a trial with the FTC, which is seeking to force the company to part ways with Instagram and WhatsApp. So, two things here.
1:04:03
one um the uh the case uh yesterday that Google lost or was it Wednesday losing track of time uh is not really its core ad business, right?
1:04:15
This is like the sort of display network business that was impacted and then Meta uh very clearly feels like they have a super strong case here because um they are fighting over something that happened roughly 13 years ago. Yeah.
1:04:30
And it all comes down to market definition.
1:04:32
And they're trying to define the market as what it's like meta versus Snapchat and like we me or something. Miwi.
1:04:41
We got to have the Miwi founder on Miwi. Miwi.
1:04:44
Any if if you've used Miwi, should we be on Miwee?
1:04:48
Should we be distributing the show on Miwi?
1:04:49
It's called the NextGen Social Network.
1:04:51
Oh, we got to get on there. We got to be socially.
1:04:54
They've got 20 million people. That's pretty good. Yeah. Congrats. Yeah.
1:04:58
Um um but yeah, I mean the FTC is is is trying to force Meta to sell Instagram and WhatsApp and I mean those are so intertwined.
1:05:07
I feel like Zuck had a pretty good faith offer half a billion dollars to say like hey let's just make this let's make this all go away, right?
1:05:17
And uh they denied it and they're pushing the FTC is pushing forward.
1:05:19
And again they're trying to ignore Tik Tok entirely. Yeah.
1:05:26
And you know, Tik Tok is not necessarily an example of completely organic adoption, right?
1:05:32
They spent billions of dollars on user acquisition. Yep.
1:05:36
And uh who knows if if you could start a completely independent Tik Tok and compete.
1:05:42
Um but uh how do you think that would play out if the FTC forces Meta to part ways with Instagram and WhatsApp?
1:05:51
Like does Adam Miseri become the CEO of Instagram?
1:05:53
Do they try and bring back Kevin Cyester?
1:05:55
Are they just like bringing in some McKenzie guy or some HBS search funfer? No.
1:06:00
I mean, the thing here that's interesting is is Zuck made a very concerted effort years ago.
1:06:08
Remember the Meta rebrand?
1:06:08
Remember when they started rolling out messaging like you know sort of universal messaging across different products?
1:06:14
And all of that was ant in anticipation of uh this type of you know kind of conflict.
1:06:21
And so, um, smart move to like get ahead of it and show that like, yeah, these products are deeply interconnected.
1:06:29
They have a lot of overlapping users. Yeah.
1:06:35
And I would just be very bearish if they spun out Instagram and it went to some like manager mode person, some manager mode. Yeah.
1:06:46
Like maybe it could win if they bring back a founder, but I would be very very skeptical of it running well as a business independently without Zuck at the helm.
1:06:57
Like that's the bull case for Meta is that he keeps taking all these risks and building all these different tools and integrating them all in very aggressive ways. Um it' be very very odd.
1:07:06
Maybe just sell it to private equity and just like try and squeeze as much cash out of it while they wind it down, do it for like an asset fire sale, like fire everyone.
1:07:14
like fire everyone. like that would be the outcome like a lot of digital you would really want seems like there's a common thread of of uh social network type platforms just internet platforms in general getting a manager mode operator and just being run into the ground yeah I don't know AOL Yahoo etc
1:07:33
um there's there's actually interesting uh so Zuck inferred that Snapchat which he tried to buy twice the second time for six billion isn't as successful as it could have been if Meta had bought the disapp disappearing photos app and there's a uh Rajir dropped a little history lesson on the Snapchat Facebook tragedy of 2013 that kind of backs this idea up. So Evan Spiegel turned down a
1:07:55
So Evan Spiegel turned down a $4 billion acquisition offer. Zuck asks for a counter.
1:08:01
Evan doesn't respond and moves to close a fund raise at a $3 billion valuation.
1:08:05
Zuck loses hope but makes one last ditch call.
1:08:08
Um, Evan hints at wanting1 billion dollars liquid post tax.
1:08:13
Mark Andre just pause for a second because it's it's uh makes total sense and uh it's also very funny. It's great.
1:08:25
It's like yeah could be interested but like would need to be a liquid billionaire to even consider. Yeah.
1:08:31
I mean we'll go through the numbers but achievable achievable with what he built.
1:08:35
Like he he deserved it in my opinion.
1:08:38
Uh Mark Andre tells Zuck to buy it at any price.
1:08:40
Zuck tells his suits to come up with the cash and presents final offer of six billion.
1:08:44
So Zuck starts at four billion raises it to six billion.
1:08:49
Evans says offer is good but later turns it down.
1:08:51
Wants to stay independent. Zuck is upset.
1:08:53
Facebook since then up 900%.
1:08:57
Snapchat since then up 123%.
1:08:57
Both sides would have been richer if the deal happens.
1:09:04
But at this point, if if if they owned Instagram, Snapchat, and WhatsApp, and Facebook, like the FTC would be even more upset, for sure.
1:09:13
But uh here's here's the actual email that that eventually leaked in in a uh in a legal proceeding.
1:09:19
Uh from Mark Zuckerberg, uh subject re Sasquatch update privileged and confidential. Well, not anymore.
1:09:25
It's been leaked onto the internet because of the lawsuit.
1:09:27
Uh I delivered the offer to Evan and he seemed to take it well.
1:09:31
He told me that he could get it done and that he'd call me back quickly.
1:09:34
5 hours later, he called me and told me he was turning down the offer.
1:09:38
He says the offer is um the offer is what he wants, but he just wants to build the company on his own.
1:09:45
I'm disappointed and frustrated by this.
1:09:47
I don't know what else to say to him at this point.
1:09:49
We should probably prepare for it to leak that we offered six billion for them and all the negative that will come from that. Interesting.
1:09:58
cool to see the actual email. Yeah.
1:10:04
And um yeah, I mean the big question is like where would Snapchat have gone if if if Zuck had been behind it?
1:10:08
I think the the easy answer is just uh Meta has been the one company that's really really been dominant in the postAT era in terms of driving higher revenue from advertising based on the AI driven uh ad matching essentially. Yeah.
1:10:30
And so, uh, even if first off, Snapchat probably would have grown into its own thing and not been as competitive with Instagram over time.
1:10:41
So, like if he buys Snapchat, does he clone stories into Instagram or does he let stories live in Snapchat as its own thing?
1:10:49
Like that might be that might have been some of the some of the strategy.
1:10:53
Eventually, stories got cloned into everything.
1:10:55
Like even LinkedIn, I think, got stories for a while.
1:10:57
Remember remember Twitter had stories for a little bit. Yeah. What were they called? Fleets. Fleets. Fleets. Yeah.
1:11:02
Um, it really didn't take off.
1:11:06
There was like there was like a three-month period where like every social app needed like stories and people were joking like now Excel has stories.
1:11:12
And it's interesting to put these numbers into context.
1:11:14
So, uh, Mark was telling Zuck to buy it at any price and, uh, you know, with with $6 billion eventually being turned down, u clubhouse got a basically four billion.
1:11:28
believe they got a $4 billion acquisition offer uh despite not having anywhere near the traction or scale that Snapchat had at that point which they turned down from from Twitter uh as everyone knows at this point and um you know ultimately got cloned and u I don't know the uh the latest over there.
1:11:46
What is what is uh Snapchat's market cap right now?
1:11:50
They are still a$1 13 billion company.
1:11:53
So, I mean, arguably he should have taken Mark Andre's advice and gone back and said seven, eight, Evan, come on.
1:12:02
I know you want to be independent, but you must have a buy it now price. Yeah.
1:12:06
And they've just really really struggled year-to date down 30%.
1:12:10
They did have a crazy spike, right, at some point.
1:12:14
Uh, a lot of people were longing it hard in 2021.
1:12:17
Um they were at $74 a share at their $83 a share at their peak.
1:12:22
They're down at seven bucks a share now $7. 88 now.
1:12:27
So I mean I still think Evan Spiegel is like a fantastic entrepreneur and has a really fascinating story and to even compete in that it's a network effects driven business.
1:12:37
Like it's so monopolistic at its core.
1:12:39
It's the classic example of like a compounding monopoly advantage.
1:12:43
And as soon as that snowball gets rolling, it's really really hard to play in that space at all.
1:12:51
Well, it's also a company that doesn't get nearly the use that many of these other platforms do among our networks, right?
1:12:58
Snapchat in probably five years. Yes.
1:13:02
But that was because of Zuck.
1:13:04
Like if Zuck had not had not gone after Snapchat so aggressively, uh Snapchat would have kept growing and had been the like most most Millennials most anecdotally I was aging out of Snapchat before You think so?
1:13:19
It was before it was cloned.
1:13:19
I think that a lot of it was like you were aging out because Instagram was effectively on the defensive and and it was working.
1:13:27
It was like yeah like like you have a stronger network over at Instagram and they have all the same features so why would you open that other app? But but I agree.
1:13:37
I went through the exact same I went through the exact same experience where I was on Snapchat for a little bit and then eventually Instagram was good enough for everything and so I went back and then I never really open Snapchat again.
1:13:47
Um but well I don't know we we'll figure it out.
1:13:50
It is it is fascinating that that you know Snapchat was was able to hold on to the users that they did.
1:13:56
It wasn't it wasn't declining in user base.
1:13:58
It was just kind of flatlining and that's the same thing that happened with Tik Tok once uh Zuck really moved aggressively on reels.
1:14:03
Um but they are stuck in this interesting place which again it's a$1 13 billion company. Yes.
1:14:11
So at this point you have to ask the question of uh do they get bought by a foundation model company. Interesting.
1:14:18
You need more distribution.
1:14:21
If you're not like Llama is aligned with Meta and Instagram XAI is aligned with X anthrop.
1:14:28
Google has you know YouTube and Google search for distribution. Yeah.
1:14:34
Maybe you take enthropic and put it together with Snapchat. That'd be interesting. Daario just no.
1:14:37
I just wanted to work on safety.
1:14:41
Now I have to work on viral Tik Toks or viral Snapchats. Uh I don't know.
1:14:48
Uh it it does seem it does seem like it's interesting.
1:14:50
It's like floating out there as this like pretty solid platform and distribution and they have a lot of tech and a lot of interesting ways to cont.
1:14:57
Other issue with Snapchat from an acquisition standpoint is even if you're a foundation model, let's say you're a massively lossmaking foundation model, Snapchat is also losing they lost uh $700 million in 2024. Wow.
1:15:10
Despite being how how many years into the business and so hard for uh a CEO that even wants, you know, massive distribution among a you know, younger sort of cohort.
1:15:22
Uh, still it's hard to say, you know, is it is it going to be worth it to um to have that be my problem?
1:15:30
Now, you know, I mean, if if AI allows for better monetization and it turns Snapchat into a stronger engine, like part of the reason Snapchat is not monetizing that well is because of things like AT, app tracking, transparency, uh, harder targeting, but maybe you start, you know, inserting chat bots into the conversation and driving more personalization, better targeting, better monetization through that.
1:15:57
better monetization through that. I don't I think the question just comes down to where is the consumer value for the anthropics the opening eyes the GRs etc really going to come from and I think there's a good argument to say it will come from the sort of personal
1:16:13
assistant capacity if Snapchat is big on college campuses and with high school you know students and things like that is uh Snapchat you know suddenly like you know trying to force an LLM uh forcing kids to say like Hey, I know you're in here to talk with your friends, but like why don't you use us for your homework? Yeah. Like maybe that Yeah. Like maybe that works.
1:16:33
Or maybe they're just like, "Yeah, when I'm on my computer, I use chat GBT and when I want to talk to my friends, I Yeah, it just like I still think like the X XAI integration is actually a pretty good case study for AI in a social context where you see someone uh post something and you want to fact check it essentially or get more context around it and so you just click a button."
1:16:55
And so I could imagine you're watching content on Snapchat and then you click a button and you're dropped into an interface where you're discussing that with the LLM.
1:17:03
Um, and that could be somewhat valuable.
1:17:07
So you see a viral video for, you know, a handbag, click on the chatbot, get more context on the handbag industry, what the different options are.
1:17:19
Maybe there's a there's an agent that helps you buy that and you check out all in Snapchat and it's becoming more of an e-commerce engine. Yeah. Not sure.
1:17:27
Maybe Snap's one of those companies that always uh and Evan I I would love to get an up like a It seems like he just loves running the company still.
1:17:37
company still. It seems like even though yeah maybe financially it wasn't the best decision not to sell like he probably could have gotten a bunch of meta stock and then 10x that 10x that I mean it is the 10x it again if he just got the six billion if he got a billion
1:17:51
he could have gotten a billion in in meta stock he could have gotten a billion in meta stock like for sure at the six billion price based on what he owns like he could have gotten a billion in meta stock and then he and then the stock price would have actually 10xed and he would have had 10 billion. It's It's crazy.
1:18:03
Um and then he just has 10 10x that three more times and he's trillionaire. Yeah.
1:18:07
So yeah, honestly the math is like pretty simple.
1:18:08
Yeah, the math is pretty simple.
1:18:10
More people should be doing this.
1:18:11
Um, but uh, no, Snap's just one of those companies.
1:18:14
I mean, it it we got to get the full update from Evan sometime.
1:18:17
Uh, yeah, I reached out to his team to try and get him on the show.
1:18:21
I I really think that it's a company that has consistently shown so much potential.
1:18:28
um spectacles, VR, shopping, uh you know, early AI, avatar, you know, uh and uh never has like quite they just haven't hit a home run on any of those. Yeah, it is interesting.
1:18:41
They they have like enough resources because it is a 10 plus billion dollar company.
1:18:46
There's a lot of cash slloshing around.
1:18:48
So, they can go and do a VR project, but Zuck has a hundred times more resources, right?
1:18:55
Because he's a trillion dollar company.
1:18:57
And so it's literally a 100 to one fight on everything.
1:19:00
You want to train a model?
1:19:01
Well, Zuck has a hundred times more resources.
1:19:03
And so Evan for a long time was I mean I think still I think still on his LinkedIn he puts like I'm like the I'm like the VP of ideas at Meta because his whole idea is like he comes up with the ideas and then Meta clones them.
1:19:18
And it's like yeah but when you have 100x Yeah.
1:19:23
Yeah, but when you have uh 100x um the money to spend, you can actually win in those markets sometimes.
1:19:27
Anyway, uh you want to read this post from Ryan Peterson? Uh yes.
1:19:33
Uh Ryan says, "Bull market RN for the number of business people admitting to customs fraud on LinkedIn."
1:19:40
So, a lot of people are saying, "Oh, I I figured out how to get around the tariffs."
1:19:44
Basically, it's like, no, that's not how it works. That's not how it works.
1:19:46
You can't just figure out a a workaround.
1:19:48
You have to pay the customs.
1:19:50
No, I talked to somebody that works in a manufacturing and they they're they're like everybody's just working a way to figure out loopholes, a way to effectively show that their cogs are maybe lower than they actually are, so the tariff is not as substantial.
1:20:06
So, uh, folks, if you are, uh, importing, uh, products to the United States, why don't you go and just talk to the Flexport team before you think you you cracked the code. Yep. They will help you out.
1:20:21
Don't skimp on your uh, customs bill.
1:20:25
Don't skimp on your sales tax. Go to Numeral HQ.
1:20:28
Put your sales tax on autopilot.
1:20:30
You would be crazy not to use spend less than five minutes per month on sales tax compliance. Go to Numeral HQ. benchmark series A.
1:20:41
That's my favorite my favorite line to just sprinkle in there. I love it.
1:20:44
Um well, let's move from Benchmark over to Sequoia.
1:20:48
Andrew Reed says, "Founder to their therapist."
1:20:50
Hey, look, I want this to be more of a conversation than a presentation.
1:20:54
Please jump in with questions anytime.
1:20:58
Classic uh board meeting.
1:20:58
Clearly takes a lot of pitches. Yeah.
1:21:03
um when you're pitching there I don't think you have to say that to make it a conversation.
1:21:08
You should just actually have a conversation. Yeah.
1:21:13
Um but it is a little bit of an art. Yeah.
1:21:15
I mean the right approach generally is explain very clearly what you're doing in about 3 to five minutes and then talk about it. Yeah.
1:21:22
I told you about that founder I got on the phone with and he spent I was eating lunch and I just put myself on mute and he just talked for 20 minutes straight and at the end I was like hey like I'm not an investor I'm not on the investing team founders fund and he just did not understand that and I was like I should have jumped in 15 minutes ago but I was just eating so I was like okay just keep talking doesn't eat itself it was out. That is very funny.
1:21:53
So yeah, don't make that mistake.
1:21:54
Make actually make it a conversation more than a presentation.
1:21:57
People like conversations.
1:21:57
People hate presentations.
1:21:59
Stick to the stick to the conversation.
1:22:02
Long conversation presentation.
1:22:03
Aaron Harris gives a shout out to Sequoia uh with some best practices for VCs.
1:22:07
I think everyone should probably follow this.
1:22:10
Uh the truth is is it isn't complicated.
1:22:11
One, make the calls you say you will.
1:22:14
Two, schedule the meetings you say you will on time.
1:22:17
Three, if you ask for a data room, actually look at the data room.
1:22:20
If you ask for customer references, do them quickly and promptly.
1:22:24
If you want to pass, you have to tell the founder.
1:22:26
You can't just whisper it into your pillow.
1:22:29
If you want the deal, chase the founder.
1:22:31
If you want the deal, don't disappear for a few days. Be extremely responsive. Yeah.
1:22:36
If you if you can't do that, you're not going to be competing.
1:22:38
This isn't just a Sequoia thing.
1:22:40
I think all the best uh VCs uh follow the same playbook.
1:22:44
And that and that like I mean it is crazy how how bad some VCs are at passing.
1:22:49
They just cannot bring themselves to do it.
1:22:51
And it's like it's like pretty easy part of the job.
1:22:55
Unfortunately, we're going to the hard part is picking the good companies.
1:22:56
Like the hard part should not be just saying like yes, I have enough conviction to say like I'm passing on this round.
1:23:02
Like go find someone else. There's a million VCs.
1:23:04
Like no one's going to be like offended forever.
1:23:06
Every now and then you'll see like some exchange where a VC passes and then the founders like basically like start swearing f you all this stuff.
1:23:17
But those founders don't tend to to go anywhere at all.
1:23:19
Uh and usually uh founders are going to really respect a just like kind of really direct prompt pass. Yeah, of course.
1:23:30
Most most of the big funds now are very much multi-stage and and uh there's not a lot of value in making enemies. So, exactly.
1:23:38
Um anyway, you don't we have a post here from uh Architectural Digest.
1:23:45
Oh, you want to do this one? Okay. Yeah, let's do it. Yeah, let's pull it up.
1:23:46
Um I just thought this was a fantastic house.
1:23:50
I wanted to look at this house because I was I was looking for specifically for the bed.
1:23:53
I wanted to see if the bed had an eight on it.
1:23:55
I don't know if the photos uh doxed the bed that Dan Romero, the founder of Farcaster, uh sleeps on, but he does have a fantastic looking house uh that's been profiled in Architectural Digest.
1:24:08
I I did a lot better last night.
1:24:09
8 hours and 11 minutes, 100% sleep quality.
1:24:12
The routine's still off because I'm all over the place, but 91. How'd you do? Let's see.
1:24:20
And you know, you were talking trash to me. You beat me. Of course you got 100. Oh, let's go.
1:24:25
Um, yeah, you you're talking to Oh, just beat me twice. Just beat me twice.
1:24:29
I I You beat me once and then I beat you twice.
1:24:31
You beat me once and then I beat you twice.
1:24:34
Well, I have twice as many children, right? Or young children. Notense. Okay. Okay.
1:24:40
You're trying to You're trying to I think I just think like you have three kids. I have two. Yes. Yes.
1:24:44
But but the young ones are the dangerous ones.
1:24:47
The young ones are the ones that kill the sleep score.
1:24:50
Those are the wild cards.
1:24:52
So when you have two young young ones, uh that's two extra bad nights of sleep.
1:24:58
And so I think the ratio of good sleep here in this in the in between me and you, it's actually completely understandable.
1:25:03
I need a I need a button here that just says giga excuse. Giga excuse.
1:25:07
Anyway, um anyways, Architectural Digest did a fantastic.
1:25:12
This is a really cool story. They bought four house.
1:25:13
They bought four houses and merged them all together into a mega compound in Venice. It's pretty cool.
1:25:17
Um I didn't realize was in LA.
1:25:18
I used to live on this street um same street and this house just looks absolutely phenomenal.
1:25:26
They did an amazing job with it.
1:25:28
Dan uh and his uh wife who I haven't met but she's Julia Dwall Julia founder of Antar's nuclear very cool nuclear. Very cool.
1:25:36
I think she was at SpaceX for a long time.
1:25:38
Um and they just did an incredible job with this and uh it's very cool.
1:25:42
I was here for a beautiful house. We loved it. Beautiful house. Overnight success.
1:25:46
Anyway, uh go to adsleep. com.
1:25:49
Uh 5year warranty, 30 night risk-free trial, free returns, free shipping.
1:25:53
They got the Pod 4 Ultra. Check it out.
1:25:56
I loved how you turned an AD home feature into an eight sleep ad.
1:26:01
That was just phenomenal. That's all that matters.
1:26:03
Well, I have a post here from Sean Frank.
1:26:04
I believe Sean Frank is in the uh YouTube chat right now just hanging out. Really?
1:26:09
Uh he says, "Second order effects.
1:26:12
talked about this on a call with Ryan Peterson today, but ocean freight out of China is capital D A dead.
1:26:19
Prices should collapse, right?
1:26:22
Well, it is so dead ships aren't sailing.
1:26:24
They are just cancing the voyage instead of losing money on the cargo.
1:26:27
So, ships are waiting around for weeks waiting to fill up, driving up the cost to get an actual to get on an actual departure.
1:26:33
Ironically, freight costs out of China are peaking. So, interesting.
1:26:38
Uh weird second order effects.
1:26:40
Uh, and this again is just little word play there. Peeking peeking China. Yeah.
1:26:45
Uh, this just makes it even harder if you're, you know, manufacturing products in China, needing to get them to the US.
1:26:50
Not only are your actual effectively your cogs going up due to the tariffs, your your, um, you know, uh, transportation costs are going up as well.
1:26:59
Um, back to three kids in a trench coat walking through TSA security with all your goods.
1:27:06
That's the way you get stuff out of China these days. fly there.
1:27:11
Yeah, I don't have 75 iPhones on me. Don't worry about it. I'm all good.
1:27:17
Trench coat with with a bunch of iPhones. Yeah, I don't know. Uh it seems rough.
1:27:22
I have not tried to get anything out of China.
1:27:24
Uh hopefully we can manufacture all our merch in America.
1:27:27
We did get this giant gong which we have not revealed yet.
1:27:31
I think it came from China.
1:27:33
Maybe that would have been the gong would have been hit hard except it was a gift. So yeah.
1:27:36
Um we we'll reveal it soon. We'll reveal it soon.
1:27:38
There's a time and a place for that. It's so loud. It's way too loud. I was dying laughing.
1:27:45
Um, anyways, we got a post from Yine.
1:27:45
He says, "Girl science is real.
1:27:48
Manifest manifestation is real. It works.
1:27:51
What else are girls right about?
1:27:53
I'm going to start looking into astrology.
1:27:55
Maybe I should listen more."
1:27:59
Yeah, I've been I've been long on astrology for a long time.
1:28:01
Uh and but my thesis was like you can actually get to the same conclusion uh via something that feels more like boy science I guess.
1:28:11
Um which is that uh so what is astrology?
1:28:15
It's like if you're born in this month you have a certain personality right?
1:28:18
Uh and that seems like weird random like why would it be that case like is it really like the moon and the stars and the certain alignment like makes who you who you are that doesn't really f doesn't really track if you're like a science guy.
1:28:28
Uh but uh I always thought about it like well if you're born uh during like tax season and your parents are stressed out about tax season and that's your main memory of like your birthday well could that make you more neurotic about money like probably.
1:28:45
What about if you're born during Christmas and every Christmas season you're for like warmth Yeah.
1:28:50
season you're for like warmth Yeah. or or or or like there's all these different even just being born in the winter and spending more of your life in win harsh winter conditions and and having more rain more gloomy days be imprinted on you could that make you a
1:29:08
glooier person like that's certainly possible right you might have cracked the code and so and so I always thought that like the the astrology thing like it's it it maybe isn't straight up like this moon and this sun and this star at the same time but just the idea of when you're born that affects you. Even
1:29:23
Even you look at the NHL, the hockey hockey guys, uh many many of the hockey stars are born right before hockey season starts or something like that so that they're older, so they're bigger on their young teams and then they outperform again and again and again and then they and then they get reinforcement on that.
1:29:42
And so like there's a there's a probably like like there's there's more I remember on my high school football team the best guy was born in July and was really old for the class and the worst guy was born in September and was really young for the class or something like that.
1:30:01
You know it wasn't worse but like you know just being a year bigger a year older if you really care about your children's athletic pursuits just yeah hold them back right hold them back.
1:30:11
And there's all those things about like, oh yeah, there's a foot I remember there's a football player in in LA.
1:30:15
This guy, I think he went to go play at Notre Dame, but he was like driving himself to peewee football games because he'd been held back so much.
1:30:22
So he was 16 in like eighth grade.
1:30:25
He was like a 16-year-old eighth grader.
1:30:27
He should have been like a junior.
1:30:28
Uh but he was like amazing because he was older.
1:30:31
And then there was all those like uh all those debates about the baseball players who came from other countries and they'd like fake their baseball fake their birth certificates.
1:30:39
So like it's very clear that like when you're born affects like how you accelerate in different My parents are doing my parents are doing that with YC.
1:30:47
They say don't don't do YC until you're you know 60. Okay.
1:30:50
Like wait until you've accumulated incredible immense knowledge in a network.
1:30:55
Come into YC, get the check, raise $200 million in the first week and just steamroll the class.
1:31:03
Same same thing about the uh like the teal fellows.
1:31:08
people are always trying to, you know, kind of reinvent themselves at age like 38 and be like, "Oh yeah, I dropped out of college, like let me go through a deal fellowship, right?"
1:31:17
And and it's all just a ruse.
1:31:19
But it's effectively like holding yourself back.
1:31:24
If you hold yourself back and you're like, "Yeah, well, I I had I had a career, uh, 10 years on Wall Street.
1:31:30
Then I went back to college, undergrad, and then I dropped out of undergrad for a teal fellowship at age 36."
1:31:35
Like, all of a sudden, everyone's like, "Wonder, he's amazing. This guy is incredible.
1:31:43
Like, he knows he has encyclopedia knowledge of business because he's it feels like he's been on Wall Street for a decade."
1:31:48
Uh, but he's a teal fellow. He's super young. How old is he? Oh. Oh, yeah.
1:31:53
24, you know, uh people lie about their ages all the time, you know, and this is kind of uh this is all this all related to it's all hearsay to astrology.
1:32:01
Anyway, uh I way to round it out.
1:32:04
I think it's I I think I think Yakine is on to something.
1:32:06
Anyway, well, I'll be right back.
1:32:08
And we have our first guest, actually two guests coming in to the Temple of Technology.
1:32:14
We got Daniel from Checker and Ryan from True Work coming into the studio uh to discuss a very cool merger that's happening, an acquisition.
1:32:24
Uh so Checker CR CKR Checker employee background screening for companies.
1:32:32
Uh streamline your hiring with the fastest, most accurate background checks.
1:32:36
Uh so you probably run into these background checks not just when you're hiring on uh for a job but also this was a huge thing during the uh those marketplace boom of you want uh to put your product on or your your your house on wander for example.
1:32:54
Well they're going to want to see your uh ID.
1:32:55
They're going to want to know who you are.
1:32:58
Same thing with your car on Turo.
1:33:00
They're going to want to make sure that you have uh you know they know who you are.
1:33:04
Even Coinbase is a customer of Checker here.
1:33:06
Uh and so when you go through the KYC flow of Coinbase, uh Checker's the company that helps Coinbase understand the uh a the ID verification, all the document verification.
1:33:20
Coinbase didn't have to build that in-house.
1:33:22
Instead, Checker built it and sold that into Door Dash, Fenwick, FIFA, Harris, Hot Topic, Instacart.
1:33:30
Wow, they're really in everything. Domino's uses Checker. That's cool.
1:33:33
Uh anyway, and the deal uh that was announced uh was announced yesterday morning.
1:33:39
Yeah, let's break that down. Checker True Work deal. Let's see.
1:33:44
Checker acquires True Work in uh it was an employment verification uh rollup.
1:33:51
I'm getting a payw wall on Axio.
1:33:54
Let's see if there's something else we can do. Big news.
1:33:55
Ryan Sandler, he writes uh True Work is being acquired by Checker.
1:34:00
Together, Checker and True Work will achieve the vision of a truly one-stop consumer verification product.
1:34:07
When Ethan, Victor, and uh and Ryan here started True Work in a Back alley office in The Mission in 2017, it was a dream to get to where we are today.
1:34:14
Over the past eight years, they've grown as an incredible team to over 100 employees.
1:34:20
pretty big company, raised five funding rounds, called six different offices home, operated in three cities, had two name changes, and most importantly, helped millions of consumers get approved for homes and apartments.
1:34:28
True Work now services thousands of customers from the smallest family-owned businesses to eight of the 10 largest mortgage mortgage lenders in the country, including Rate, Penny, and Fairway.
1:34:41
We've gotten to the scale only because we are obsessed with giving our customers the highest completion rate and accuracy in the in the industry.
1:34:51
Today marks a major milestone, but the journey is just beginning.
1:34:53
I'm excited to see True Work and Checker continue pushing boundaries of what's possible.
1:34:59
Together, we can unlock endless opportunities from powering Checker's background checks with True Work employment data to expanding Checker into new verticals like mortgage and property management.
1:35:06
It's going to be an incredible journey ahead.
1:35:08
So, well, looks like we got both of them. Fantastic. Let's bring them in. Let's bring them in.
1:35:14
And, uh, I'd like you to kick it off with a little bit of an intro, get the background from them, and I will be right back. Sounds great. Yes. Okay. All good.
1:35:25
Sorry, there was a Google Meet link in the same invite.
1:35:28
I clicked on the Google Meet, not the Zoom. That's on me. Sorry, I messed it up. How are you guys? Exciting week. Yeah, great.
1:35:36
Great to meet and uh great to see you Ryan. Good to see you.
1:35:39
Uh it's been a long journey.
1:35:42
Why don't why don't you guys give uh your own kind of quick intros and uh and then John will get back and we can go from there. Great. Ryan, cool. Yeah.
1:35:51
Ryan Ryan here, founder and CEO of True Work.
1:35:54
And Jordy, it's it's great to see you.
1:35:56
Um you know, we started work eight years ago.
1:35:59
um grew it to quite a large company and excited to see the vision really continue and accelerate under Checker.
1:36:08
Um so I'll let Dan share himself. Awesome. Yeah. Hey guys.
1:36:13
Yeah, Daniel here, founder and CEO of Checker. We started 11 years ago.
1:36:15
Um we invented the API for background checks and verifications.
1:36:22
And so we've been uh pretty big uh in the employment space and verifications for employment access to marketplaces and uh I've known Ryan and the Detroit team for for many years as well.
1:36:34
I was an investor in their in their bound and been following the journey and we're excited uh to announce that uh our teams are going to join forces and uh we can uh continue to build uh the product and and platform together. Amazing.
1:36:48
uh when when did uh did you know uh when you were investing in the bee did you have any idea that that your guys's journeys would really intersect at some point?
1:36:58
I'm curious when uh when that conversation uh you know or that idea even popped into your head.
1:37:04
I mean we we we love I love this space because I love you know um APIs and uh data products and verifications.
1:37:16
Um I wasn't sure it will if it will ever intersect at some point.
1:37:19
You know I thought that the the challenge that they're taking was great and then uh I think it's only in the last I would say maybe in less than last year that uh we started thinking that that that could align with our long-term data platform vision. Awesome.
1:37:35
Um talk about I guess the last uh your your guys' opinion the last few years.
1:37:41
Uh, you know, I know Checkers, you know, more on the H, you know, H, uh, HR category, true work, uh, you know, more more of a like, you know, fintech darling.
1:37:52
But, um, Ryan, how how was it the last few years navigating, you know, all the ups and downs to get to this point?
1:38:00
Yeah, I mean we we saw immense growth during during COVID uh with home buying sprees and and once the interest rate went up, you know, we definitely had to navigate um a higher rate environment that meant lower volumes for mortgage lenders.
1:38:12
Um we expanded into other verticals like property management um that was a little less cyclical, but we were able to keep up, you know, really strong growth despite the market that we're really proud of.
1:38:21
Um and now there's a way for us to expand into even more verticals like Back on Check.
1:38:25
Can you talk a little bit about the different tiers of verification and kind of like the the the different pools of TAM that you're going after together?
1:38:39
Like I I run a a I I started a nicotine product company and uh we need to age verify.
1:38:46
So we do background checks loosely. We do ID verification.
1:38:48
Uh but it's sometimes like a $30 checkout.
1:38:52
So, you know, we need to be under a dollar per verification versus if you're hiring some engineer and you need to verify them.
1:39:01
That could be hundreds of thousands of dollars in, you know, value essentially totally worth paying, you know, I don't know, $10 per verification.
1:39:09
Um, what are the different pools and and what's most exciting? What's the biggest TAM?
1:39:14
And how do you kind of divide up the market? Yeah. Yeah.
1:39:18
So we're going after over a $50 billion PM on on different types of verifications and identity products.
1:39:23
Um which started in the 14 plus billion dollar employment market.
1:39:29
Ryan and Tim uh they've been going after financial underwriting uh property management which is also you know 12 billion plus TAM.
1:39:40
Um we also are going after the risk and fraud market in TAM which we also size at that's about $10 billion.
1:39:47
Um you know specifically competing with companies like Lexus Nexus sure in financial fraud and and financial risk and then we also have a a nent consumer offering and product uh that's growing quite well and and that's also a multi-billion dollar.
1:40:04
So yeah, we're quite busy and um once we start to build a consumer-driven profile with verified credentials, identities, employment, work information that can uh that can be used um to solve lots of um use cases in different industries.
1:40:19
Can you talk about the the the the war between artificial intelligence here?
1:40:25
Uh yeah, I saw a uh a post recently saying, "Oh, the new chat GPT images, you can generate a fake receipt.
1:40:34
you can generate a fake ID and use that and upload that.
1:40:37
Uh, at the same time, I'm sure you can use AI to weed some of that out.
1:40:42
Uh, what technologies are the most interesting to you today? Yeah.
1:40:46
So, I mean, Ryan's product and ours, we've been more on the data sides.
1:40:51
Um, which is a little bit harder to fake by AI.
1:40:54
I mean, AI can fake anything.
1:40:56
It's just a question of cost of, you know, the bad actors, how much money are they going to spend to to try to do fraud.
1:41:01
Um, so we're we're not focusing on taking pictures of driver licenses.
1:41:06
I think that's going to become very challenging over time. Okay.
1:41:07
Um, we're focusing more on verified data sources, you know, from from government signals like the DMV, from payroll companies and payroll records from, you know, employee records.
1:41:20
So, we stitch together, you know, different verified data sources, also consumer generated data.
1:41:26
We triangulate it, we we score it, we verify it.
1:41:29
Um and and so that that's a lot of our approaches that are a little bit more resilient I would say to to AI fraud.
1:41:36
Um we're also we also both in our products have you know document based verification and processes in case you know there's there's no data available on on different systems.
1:41:47
Um and we also use AI to to combat AI fraud on documents.
1:41:53
So it's it's definitely multiprong strategy and AI I think is both an opportunity because it's going to create a lot more fraud and problems for customers.
1:42:01
So it gives us a lot more work to do and at the same time um it's an opportunity because we're going to use AI tools and technology to combat AI fraud.
1:42:13
What is it like uh working with the DMV as a data source when you hit the API?
1:42:19
Do they make you take a ticket and wait for the response or is it a little bit faster on your end? Yeah.
1:42:24
And I'm curious about the evolution.
1:42:26
curious about the evolution. I imagine, you know, uh, when when Ryan started True Work and and, uh, Daniel, when when you started Checker even, uh, farther back, I imagine there was things that you had to do with humans that you maybe
1:42:39
anticipated that you could do with AI at some point, but weren't immediately possible uh, just given um, you know, now we have products like Computer Use that could sort of like, you know, navigate uh, uh, systems that don't necessarily have APIs. Yeah. Yeah, I Yeah.
1:42:53
Yeah, I mean for us like we you know as as D mentioned similar to checker we try to get our data from as automated of sources as possible like directly from the payroll system directly um from your bank account etc.
1:43:05
But in some cases where you know you work at a mom and pop store and there's there's just no other way to access the information we have to get in touch with the HR department.
1:43:13
get in touch with the HR department. we have to um we have to get verified data back from them and it's a mix of automation and manual work but there are some HR departments that that just only use a fax machine for example they will only respond to fact it's crazy and so we've had to kind of build a lot of
1:43:29
automated flows on top of these manual processes AI LM are definitely making that easier you can automatically you know send a fax email communication even make a phone call to these teams um in an automated way so it's it's changing um but there are still a lot of these businesses that are really stuck in the legacy past. It's really funny to be
1:43:47
It's really funny to be using like the future of technology to like work backwards with like a SAS company, right?
1:43:55
Like they all build on top of these like archaic systems.
1:43:59
Uh what's your take on eyeball scanning worldcoin?
1:44:03
This is this the I was gonna ask you ask that.
1:44:06
I I imagine every time you guys see somebody walking around with a, you know, an orb scanning eyeballs, you're like, that's cool, but you can also sort of triangulate personhood.
1:44:16
But um they're they're less focused on on the US market, but um but I'm curious how you guys think. Yeah.
1:44:23
What do you think about the far future of uh of verification?
1:44:24
No, I think on on on identity, I think we're laughing about it, but I think in in person is going to become important when you want to want to have the best assurance um because online will be able to be faked so much easier and cheaper.
1:44:40
So, I think there's going to be actually more. It depends.
1:44:43
It depends on the use case, but if you have some very very important transaction like getting a passport or you know like very important points, you still are going to need the biometrics in person.
1:44:53
and it's going to be it's going to be hard to fake that.
1:44:55
Um so I think we'll see more in person use cases and probably in the identity stack more solutions.
1:45:02
Um the the the other thing that I'm bullish on is um electronic driver licenses and wallets.
1:45:09
You know like Apple and Google are starting to have your driver license in your wallet like Apple Pay.
1:45:16
And I think uh you know and the government especially in Europe and other countries they're moving to mobile driver licenses that connect to the government and if Apple and Google are are opening their SDKs and continuing to build them right I think that's going to be a more elegant solution um than scanning your you know picture of your driver license for example. Yeah.
1:45:37
Uh how do you think about like I don't know the the the the cost curve on this technology?
1:45:45
A lot of people are complaining about like the dead internet theory.
1:45:46
Uh all social networks will just be filled with spam and bots.
1:45:50
Uh is there is there a world where you can get this to a scale where it's so cheap and effective that we can reliably put an end to the bot problem on the internet or is that just intractable because it's like a capital fight?
1:46:06
No, I think the the cost is definitely going down.
1:46:09
I mean just to give you an example, you know, the verifications Ryan and I were doing, they used to cost tens of dollars because a lot of human labor. Yeah.
1:46:15
Um with AI and automation, we can now automate it end to end and bring it to pennies in terms of cost.
1:46:22
Many of them, for example, the criminal checks, we can do it at very high scale, very low cost.
1:46:29
And that allows us to open new use cases like not just hiring an engineer background check but we can um you know provide safety on online dating marketplaces, car car rental marketplaces, home sharing marketplaces for a fraction of the cost and it's an instant product.
1:46:46
So as you with technology you can lower the cost you can make it instant you can open new use cases.
1:46:52
So I think we'll be able to do similar things also on on risk and fraud over time.
1:46:57
Yeah, we see this with uh like like ramp often looks at like the the B2B trend report of where companies are spending more money than ever before.
1:47:09
Uh do you have data like that as well?
1:47:13
Because I see on your website like you know you're in gigan marketplace staffing, hospitality, retail, manufacturing, healthcare technology.
1:47:18
Do you have an idea of what industries are doing an like a exponential growth in verification?
1:47:26
I guess like ours quickly and Elliot you had D like we we have a pretty good view of the mortgage market like mortgage mortgage lenders thousands of lenders on platforms.
1:47:35
So y we we will see uh pretty early if if volumes are going up or or down. Sure.
1:47:40
Um I I think what's interesting these other verticals like property management like we we are seeing a huge uptick in using technology here.
1:47:49
I mean 90% plus of property managers were using very manual processes.
1:47:53
Hey, give me your payubs, give me a tax return.
1:47:55
Um, and you're seeing real momentum in that space of of folks bringing on AI and automation.
1:48:03
Uh, the there was this tweet a while back that we talked about uh something like you'll meet your acquirer like four years before the deal gets done, something like that.
1:48:11
How did you guys originally meet?
1:48:15
That's been true for us, right, Ryan? Yeah, exactly.
1:48:17
You know, Daniel and I got connected, I believe, by a mutual investor and and um you know, Daniel's been incredibly helpful, just obviously really close to the space, invested in our series B about four or five years ago. So, um that that Yeah.
1:48:29
And we're both part of Y Combinator, so you know, we are well connected with Y founders and so Gary Tan wins no matter what.
1:48:36
I again, another another million dollars for Gary. Love to see it. Um that's great. It's great.
1:48:45
It's been great to just work with other founders.
1:48:47
You know, I think there's there's lots of small YC companies who, you know, some of them are going to break through, some of them it makes sense to join forces and build products together.
1:48:55
So, YC founders, working with YC founders been one of the most most fun thing for me to do over the last I think a lot of people don't often get like the inside story of like how an M&A event comes together.
1:49:06
Can you give us some color on like how long the deal took?
1:49:11
What who who were the parties in the room?
1:49:13
Uh was it just uh handshakes over dinner and stakes and Don Perryan or was this in a boardroom with all the lawyers and you're screaming at each other? Uh what what happened?
1:49:25
And then I also want to go through the post merger merger integration stuff.
1:49:27
But let's let's talk about the anatomy of the deal first.
1:49:30
Yeah, we we can share some story.
1:49:30
Ryan, when did we go on that walk, Ryan?
1:49:32
I think it was July of last year.
1:49:34
So it's been quite the long process about 10 months. Um overnight success. That's great.
1:49:42
and and yeah, I mean like like what how do you build vision?
1:49:44
What are the uh uh what are the hurdles that you guys have to overcome to kind of get a deal done?
1:49:51
I think a lot of founders uh are open to acquisitions, but uh what what what are the parameters that you guys were thinking about that and the discussion points that led you to think that this would make a lot of sense?
1:50:06
Yeah, I think I mean I one thing I was really impressed by uh how Daniel and team approached it is I think it really started a lot with the product and is this is this a product that is that works really well?
1:50:16
Is this something that we we want to buy and um you know there was testing of the product and our completion rate and and how it could potentially look like a part of the checker environment and um I I really appreciated that as like one of the first steps.
1:50:30
So are you both based in San Francisco? Yeah. Okay.
1:50:32
So you just went on a walk.
1:50:35
Where was the walk specifically?
1:50:36
Around my office right here in one Montgomery. Yeah. Very cool.
1:50:42
Uh so the deal comes together.
1:50:42
What What does post merger integration look like?
1:50:46
I imagine that there's you know teams can work together.
1:50:49
You guys can merge offices.
1:50:51
You can go into a new office together.
1:50:52
What what are you thinking?
1:50:54
What are the uh what are the hurdles that you both want to overcome? Yeah. Yeah.
1:50:58
So it's still very fresh, right?
1:50:58
I mean, we literally signed it was there was a bit of drama getting all the signatures on Wednesday evening like less than two days ago like at 2 a. m.
1:51:09
The last few days were a lot of lawyer calls like more than my entire life.
1:51:13
Like I have enough lawyer.
1:51:13
I don't want to do more like but on like small details that are not very important like we're both sides were like let's let's get it done guys, you know? It's fine.
1:51:25
It's just like legal ease. Yeah.
1:51:25
Um, so it just got signed and then we just announced it yesterday externally and to our employees and everything.
1:51:32
So it's still very early. Yeah.
1:51:34
Um, we've done six different acquisition bigger and smaller over the years.
1:51:38
So kind of trying to learn how to get better at it and a lot of acquirers mess up the acquisition as you know right like a lot of company it's a failure because mostly because of the acquirer just not not doing the best to welcome the team and to continue the growth and the business.
1:51:55
So our top priority is like to continue what's working at work.
1:51:59
A lot of things are working.
1:52:01
We want to accelerate their growth and give them more support.
1:52:02
We don't want to suffocate them in a in a bigger company.
1:52:06
So I think that's been early alignment with Ryan and and Ethan and and Victor and the team.
1:52:11
Um and so also the the rational for the acquisition is both we tested their product and their employment verifications are 10x better than than what we have.
1:52:21
So it's gonna their product is going to make our product much better for all the customers and we're excited to expand into the the financial underwriting space. Sure.
1:52:29
So double rational and and on that they have Yeah.
1:52:34
It's cool to it's cool to think about, you know, I can imagine you guys are in a much better place to do this extensive diligence because you have such a, you know, similar and and potentially overlapping businesses over time than uh even somebody that'd be writing like a nine figure check, right?
1:52:51
Uh on the, you know, VC side just because uh yeah, who's going to be able to get into the weeds more and and really understand the product.
1:52:57
So, it's a huge vote of confidence in the in the platform. Yeah. Yeah.
1:53:01
I remember hearing a story from a lawyer about like getting the signature from a VC who was literally this is not a joke literally on the ski slopes and they had to they had to fly someone out with the paperwork to get them to sign at the top of the hill because they were on vacation.
1:53:17
They're like this you have to sign this day. This is super important.
1:53:20
Uh so I'm sure I'm sure there's a lot of drama and I'm sure there's going to be a massive legal bill for you but but good luck.
1:53:25
Uh I think it's going to work out.
1:53:27
Obviously it's a lot easier when the companies are growing, right?
1:53:29
because uh this doesn't become about like oh let's chop it up and like you really cut costs.
1:53:34
It's like hey we're all growing together.
1:53:36
This just will accelerate things.
1:53:37
Um what is you're both private companies.
1:53:40
Is there uh like an FTC approval process for a deal like this or is that just something that doesn't even come into play at this level?
1:53:46
Is Lena Khan punching the air watching two companies merge even though both of you guys seem pretty happy about this? Yeah.
1:53:55
No, I think it's I think this one was below the threshold.
1:53:56
Um, we've had it for previous bigger acquisitions. Sure. Yeah.
1:54:01
Uh, I is there any like regulatory process?
1:54:05
How do you even calc how do you even think about that as a as a startup?
1:54:09
Uh, I mean, we've we've all heard the story about like, you know, the big ones like the Figma, Adobe back and forth.
1:54:15
You know, they're still litigating uh Instagram and and Meta right now.
1:54:17
um uh what what advice would you give to founders as they're growing to think about acquisition and merger and acquisition strategies broadly in the regime as it's evolved over the last few years. Yeah. Yeah.
1:54:33
years. Yeah. Yeah. I mean I think M&A and I was talking to M&A bankers you know last year and this year and the trends um M&A with the big big uh big four tech companies like Amazon Google everything it's been very difficult especially in the last regime uh lots of deals canceled and and everything um I
1:54:52
don't know for right or for wrong you know I think it is important we we are startup guys like we root for new startups to succeed right I think we that's what we like to do um but I think in in the opportunity unities are for small and medium startups to to join forces and do M&A and I think it's a good M&A market right now. Um the road
1:55:09
Um the road to IPO is longer than ever.
1:55:12
The bar is higher than ever.
1:55:15
I mean the IPO window just got shut again.
1:55:17
And even before that, you know, experts and and friends and and people are saying like, hey, even $500 million in revenue, it's not it's not strong enough these days.
1:55:26
You want a billion plus in revenue. Yeah.
1:55:31
super strong growth, super strong profitability, super diversified business, very high bar.
1:55:34
There's very few companies to get to that level.
1:55:36
And so even for us, you know, I think the opportunity is like we have a big vision.
1:55:42
We work in the data and identity space.
1:55:44
What other startups can kind of join the venture and we all work together to be a bigger, stronger company and and and qualify over time. Awesome. Yeah.
1:55:53
Uh yeah, Ev Randall was talking about how he pulled up a screen of uh SAS companies with over $500 million in revenue that are public and there's hundreds of them now.
1:56:04
And so uh just as a public markets investor like you can kind of satiate your demand for SAS companies in like almost any vertical and so the bar has never been higher.
1:56:16
Um uh I mean you mentioned that like the M&A markets are heating up.
1:56:21
Is that is that are you looking backwards towards a year ago when this start process started or is this what you're feeling even this week because obviously there's been some market turmoil.
1:56:31
Uh do you think that uh the mood in Silicon Valley, the mood in San Francisco has shifted at all around M&A because obviously Wall Street reacts much faster with like the the IPO window is closed like as of a week ago.
1:56:44
Well, it might be open again. It might be open again. Who knows?
1:56:47
It might, you know, it changes so fast.
1:56:49
But I feel like in Silicon Valley, the M&A market moves much more much more slowly as VC funds scale up and scale down.
1:56:56
Obviously, there's still growth funds that are getting bigger than ever.
1:57:00
Uh what are you seeing in terms of M&A over the last like year and do you think there's going to be a shift this year?
1:57:06
Yeah, I mean I think it's from the seller side there's going to continue to be a lot of appetite because the again the valuations were so high in 2021. Sure.
1:57:16
um it's really hard to catch up especially when you're like raising at 100 times revenue multiple or things like that.
1:57:21
Um if the if the scale is not there, profitability is not there, companies might really struggle to fund raise more.
1:57:27
So I think we're going to continue to see companies interested in joining forces um and and demand on the seller side.
1:57:34
Um that started over a year ago and it's continuing today.
1:57:37
I think on the buyer side, I have seen some anxiety in the last few weeks from investors.
1:57:44
Uh, you know, should we really do M&A or not?
1:57:46
Is, you know, it's it's scary out there. There's anxiety.
1:57:50
And so, you know, it's always a big investment.
1:57:51
So, you know, people don't want to invest or take risk um when when things are scary out there.
1:57:55
But from our perspective, I'm fortunate.
1:57:57
We have a strong financial position, strong long-term investors.
1:58:01
And, you know, we we continue. We went for it.
1:58:03
We did that M&A because it's the right thing to do in the long term.
1:58:07
So, we're really playing the the long-term game here. Yeah. Love it.
1:58:10
Last question I have, Ryan.
1:58:12
Uh, is there one investor maybe besides Daniel that comes to mind as the most helpful?
1:58:16
Somebody that stands out on the on the eight-year journey that uh that uh uh you would uh you know, highlight?
1:58:26
Yeah, I mean, it's it's it's hard to single out uh just one.
1:58:28
We we're lucky to have many really really great um helpful investors.
1:58:33
Because I mean all three investors on our board, Alfred Lynn from Sequoia, Heather Boy from Kla and really stacked. Yeah, stacked board.
1:58:42
And who who is the last one?
1:58:42
And Steve uh Sarino from Activant. Oh, cool. Awesome.
1:58:47
Yeah, so they're st is stacked.
1:58:50
Incredibly helpful, incredibly supportive from the beginning till now.
1:58:53
I really couldn't have asked for a better board. We got really lucky.
1:58:54
But gun to your head, Keith or Alfred? Just kidding.
1:58:58
No, I I I I do want to know uh like maybe last question for Daniel.
1:59:01
Um, uh, there's been this back and forth meme about chat GPT rappers, GPT rappers just, uh, we're we're the AI Salesforce.
1:59:11
Maybe we're the AI checker, you know, uh, there's a lot of those companies.
1:59:15
Some of them, uh, they felt like they were overvalued.
1:59:17
And then some of them ramped up revenue really nicely.
1:59:18
Uh but they still feel like uh I wouldn't want to be building one of those companies when there's a active venturebacked company in founder mode building in the same category because I think that they're going to figure out how to wrap if they need to rap.
1:59:33
Uh but what are you thinking about in the early early stage of like AI empower disruption?
1:59:39
How important is it is it to do a green field project build something?
1:59:44
We're seeing that Windinsurf is getting acquired and I think a lot of people were saying, "Oh, that's just a chat GPT rapper.
1:59:51
OpenAI is just going to build that."
1:59:53
Well, maybe they will buy it and so what are you thinking about the latest crop of kind of AIdriven startups? Yeah.
1:59:59
I mean, I think we we are the AI checker in found mode. So, good luck.
2:00:04
Good luck if you want to come come but in our space. Yeah.
2:00:06
Um, no, but I I think AI is just the the latest software, right?
2:00:12
Like just you used to say we're like the SAS company to do CRM.
2:00:17
We're the AI we're a cloud company to do CRM.
2:00:19
Now we're AI company to do CRM. Yeah.
2:00:21
But I think in B2B and we're in B2B, it's like what B2B problem are you tackling? Are you tackling sales?
2:00:28
Are you tackling underwriting? Are you tackling HR?
2:00:29
And AI is just the way to build modern products.
2:00:32
If you think about it this way, it applies to every category, every business.
2:00:36
And it's not enough to just be the AI rapper.
2:00:38
enough to just be the AI rapper. you have to come in and say why is AI going to be a differentiator to replace all of the you know other players um and if you have a strong story on that and the other players are not doing and leveraging what you're doing I think there's a chance it's highly disruptive
2:00:55
building AI products is not the same as building the products we've been building as product and edge people in the last 20 years the paradigm the UI the experience is different the stack is different so either there's going to be opportunity because bigger companies are not going to change fast enough. Um, but
2:01:10
Um, but I'm racing in my company to transform everyone to be like, "Hey guys, we got to relearn everything from signup flow to monetization to, you know, buttons and dashboards.
2:01:21
It's it's we have to rebuild products AI first." It's it's different. Yeah. Have you thought at all?
2:01:27
Uh, we always say last question and then there ends up being more questions, but uh we have one minute left.
2:01:31
Have you thought about um a world you know maybe you've done this already but um integrating with something like a chat GBT where if somebody's using chat GBT at work and they can say like hey I have a new hire coming on board would there ever be a world in the future where you would actually like integrate into the uh you know agent layer if you're looking at something like a chat GPT as an agent or is that not even the right kind of workflow?
2:01:58
No, that that's futuristic.
2:02:01
But uh it could be it could be, you know, I think if you look at uh who was it like CLA who's not even using workday and Salesforce anymore and just like directly agent who do the workflow.
2:02:13
Yeah, you could skip some of the traditional recruiting and hiring process and go straight into the agents. Um yeah, could happen. Awesome. Interesting.
2:02:21
Well, thanks so much for stop. Congratulations, guys. Very congratulations.
2:02:24
Uh excited to watch you guys dominate together.
2:02:26
Uh seems like it was fate and uh yeah, congrats to the whole uh True Work team on on the on the eight-year run, too.
2:02:34
Um and the continued success. Thanks, guys. Thanks, guys. Bye.
2:02:39
Really rubbing it in Lena Khan's face.
2:02:42
She hates a merger, doesn't she? She hates a merger.
2:02:48
I'm sure she's fine with this one. Uh little tech.
2:02:50
Little tech building up resources. Future big tech. Future big tech.
2:02:55
But uh little tech right now. Gary Tan at the helm. Yep.
2:02:57
One hand washing the other on this one. Yeah.
2:03:00
Well, we are gonna be talking about David Center. It's coming on the show. Technology. Big Dell. Big Dell.
2:03:06
We're the history of Michael Dell.
2:03:09
The history of Dell Technologies. He asked pull up a post. Yes.
2:03:14
Um most historic runs for a founder. Dell.
2:03:18
Are you looking at the revenue over time? Is that the one? Oh man. 1984 $6 million. This is the first $16. 1985, $33 million. 1986, $67 million. 1987, 159. 1988, 258. 1989, 388.
2:03:33
Goes all the way up to 25 billion by 1999. Uh, and let's bring in. Um, what a run. How you doing, David? What's up, brothers? What's up?
2:03:50
You're looking great today. I like the suit.
2:03:52
Of course, I I I texted you last time. I came on with a hoodie.
2:03:57
It was completely unacceptable.
2:03:59
So, would never happen again. Much better in a suit. You look fantastic. Everybody does.
2:04:02
Before we jump into Dell, which is a crazy story.
2:04:08
Um, can we talk about the fact that Larry Ellison has now started following uh TPN say hello Larry? Hi. How you doing? Good to have you today.
2:04:17
What I and what you guys called him.
2:04:19
Do you remember the nickname you gave him?
2:04:21
the big technology father.
2:04:23
Was that he's not he's not a tech bro. He's a tech father. Yeah.
2:04:30
But I I think I texted you guys and then what I love is how fast like you are with it.
2:04:35
You're like the original technology father like immediately basically created the data the database basically the main frame. Yeah.
2:04:44
Yeah. I mean, what a fantastic fantastic what a what an incredible book the which you covered uh what is it the difference between God and Larry Ellison is that so so there's actually it's funny um because he I think he's going to be I I just did Michael Dell I'm working on the
2:05:01
founder of Sony Akarita uh and I think I'm doing Larry Ellison again I've done three on Ellison but it's been like four or five years so there's three books about him the best one is probably Soft War Y um because he got This is so such a funny story. Tell this please. Tell this please.
2:05:18
So to get to to agree to cooperate with the author, he's like, "You can write whatever you want, but I must be able to answer on the same page and like have my like counterargument."
2:05:27
And so at the bottom it's like Le E Wrights his initials and you I could almost do an entire episode like you might want to just read the whole book and just read Ellie Wrights.
2:05:36
It's just it's hilarious.
2:05:39
But um more books like that should exist.
2:05:40
somebody should go do that for, you know, all the major tech people today.
2:05:45
Uh, with that style because on the one hand, it's like it's not what journalism is about like you're it's not it's not it's not going to drive the same narrative.
2:05:54
It's not objective because he's like putting his footnotes everywhere, but it's just an awesome format.
2:05:59
I think more people should do that. Yeah.
2:06:00
We go back and forth like actually no, I disagree with it. I was there.
2:06:03
It this is what I think happens.
2:06:05
And then there's an even better uh so I think I'm going to do soft war uh you know cuz I think the founding story of oracles told best in that book.
2:06:11
There's only you know shockingly only three books on him.
2:06:14
But then he did a book called uh there's a book written about him called the billionaire and the mechanic.
2:06:18
And I think when I did that episode I was like yeah it's technically about Larry Ellison but it's about extreme winners.
2:06:24
And I think that's when I realized like, oh, uh, Larry Ellison has probably like more in common in ter terms of his competitive drive with like Michael Jordan than he does with like most other like founders.
2:06:34
And I said something like, uh, you know, if uh, Michael Jordan sold enterprise software, he'd be Larry Ellison.
2:06:40
Like they're just ruthlessly competitive.
2:06:41
And the there's a fantastic scene in the billionaire and the mechanic cuz Larry Ellison was best friends with Steve Jobs and he'd go on long walks.
2:06:50
And so I'm pretty sure the book opens or maybe I open the episode with it with them debating who the greatest person in history was and and Jaws went more more like Gandhi like peaceful and I'm pretty sure if I remember correctly Allison went like conqueror like Napoleon or something like that.
2:07:05
It's like all right here's your two personalities you know uh basically explained in this conversation you guys are having.
2:07:12
So yeah, I hope you can uncover what what uh Ellison's longevity regimen is at some point.
2:07:19
I know I know it won't be the focus, but to live such an intense high stress, you know, lifestyle, you think it would take a take a toll on him, but it seemed like it hasn't at all.
2:07:30
So this is actually interesting because I feel like every time we come on there, we talk about uh founder mode. Sure.
2:07:36
Um, and one thing that was like striking that missing from that essay is the fact like, you know, like it was like, well, there's a a manager runs a company one way and a founder runs a company one way.
2:07:45
It's like, no, like the founder runs it based on the personality who they are.
2:07:48
And so I I was having private conversations about this and it was like, well, take take two competitors, Larry Ellison and Bill Gates.
2:07:56
It's like Bill Gates was a grinder.
2:07:58
Larry Ellison, by his own admission, is a sprinter.
2:08:00
He'll work excessively hard for like 3 weeks and then he'll disappear on his boat with some Italian model for a few weeks and he comes back.
2:08:07
He literally says that he did that during co during co he sent an email like everyone in Oracle just saying like I'm on the island.
2:08:12
I'm on he's like yeah we're all going to work remotely.
2:08:15
It's like yeah but you're working from an island that you own. An island that you own. He only owns 96% of it.
2:08:21
But but the point the important part was like he was like that you know it's not really his island. Yeah. Decades ago.
2:08:27
He was like that decades ago.
2:08:28
wasn't just now as like an 80-year-old man.
2:08:30
So like, you know, he there's there's a lot of different personality types where Bill Gates was just like ripping his, you know, there's this great story that Michael Morates tells when he before he was a VC, he was a phenomenal writer.
2:08:42
Still is a phenomenal writer.
2:08:44
Um I just finished reading his Don his hidden book on Don Valentine, which is remarkable.
2:08:48
Um but Morris tells a story I think at Stamford.
2:08:51
Uh you can see this on YouTube where he's like, "Oh, you want to know what focus is?
2:08:56
like I'll tell you a story about focus.
2:08:58
Like I'm riding with Bill Gates.
2:08:58
It's probably in the early ' 80s.
2:08:59
And he's like, "Oh, somebody broke into your car and stole your radio."
2:09:01
And Bill Gates like, "What are you talking about?"
2:09:03
He's like, "No, I had I took that out."
2:09:04
He's like, "Why'd you have it taken out?"
2:09:06
He's like, "Well, it takes me 8 minutes to drive from my house to Microsoft.
2:09:08
And it takes me 11 minutes to drive from Microsoft to the airport." And he does the math.
2:09:15
He's like, "So, you know, if I had a radio, that means I would wouldn't be thinking about Microsoft for that those eight minutes or for those 11 minutes.
2:09:21
And then I go to work every day.
2:09:22
So, that's like 40 minutes, whatever the time frame is."
2:09:23
like insane focus, insane level of grinding. That was not Ellison.
2:09:28
By his own admission, it was not him.
2:09:30
A lot founders podcast didn't exist back then.
2:09:33
So, no kept the radio in there and just you've been hearing you over the airwaves.
2:09:38
I uh so I talked about this.
2:09:41
We we were talking in uh our group chat that um I'm probably going to do an episode on Jangaskhan.
2:09:46
Um and uh I said on there's a fantastic book on Bill Gates which everybody should read.
2:09:53
It's really hard to find.
2:09:55
Uh it's on it's a biography of the first 35 years of his life.
2:09:56
It's called Hard Drive: Bill Gates and the Making of the Microsoft Empire.
2:09:59
I've done two episodes on it.
2:10:01
And in that episode, I said a line that now like years later still gets spit back to me like every week.
2:10:06
And they're like, uh, you realize the similarities between like Djangus Khan and Bill Gates.
2:10:10
I was like, "Oh, uh, Bill Gates is like Jenis Khan in a Mr. Rogers costume."
2:10:14
Like he's like dressed like Mr.
2:10:16
Rogers, but he's unbelievably like ruthlessly competitive.
2:10:19
would yell like when he lost a contract.
2:10:22
Young Bill Gates lost a contract.
2:10:23
Let's say, you know, uh, you lost us a $50,000 contract.
2:10:28
He's like, you didn't lose this $50,000 contract.
2:10:29
It was $100,000 contract because we lost the $50,000 and our competitor got to 50,000.
2:10:32
There's this great I can't remember which one of his competitors was, but there's a great story that one of his competitors tells that Bill Gates wipes the floor with and and knocks the guy out of business where he sees Bill Gates sitting in the corner at a conference one day and he's sitting in like a foldable chair and he's looking at something in his hand.
2:10:49
He's like just really focused, kind of shut out the world, uh, shut everything around him out except what he's looking at.
2:10:56
And so he walk, the competitor walks over to Bill to like say hi to him and talk to him.
2:11:00
And what he realizes is that Bill is looking at a picture of his face. I love that.
2:11:06
It's like that's amazing.
2:11:11
It's like if I come to the TP studio and like I walk in and there's pictures of other podcasters face that you guys are looking at.
2:11:17
I think we have I think we actually have a picture of you up as the godfather of podcasting.
2:11:22
Yeah, we're framed photo around here.
2:11:24
Yeah, that's that's a that's a positive thing.
2:11:26
I No, I know some other people Yeah. Yeah.
2:11:28
that you would have like [ __ ] bullse eyes on for sure.
2:11:32
Uh yeah, just super competitive.
2:11:34
What What do you think about the uh the posteconomic adventuring of the greatest founders?
2:11:38
Uh what I'm talking about is like you know uh there's a very I mean a lot of the there's like a lot of commonalities between what the founders do when they build their companies and how methodical they are about that.
2:11:53
But once they're super rich and they're thinking about their legacy.
2:11:57
Some of them start hospitals.
2:11:58
Some of them uh get involved in politics.
2:12:01
Larry Ellison is really into sailing.
2:12:04
I guess Nathan Mervald at Microsoft.
2:12:07
He owns more T-Rexes than anyone in the world.
2:12:10
He owns the T-Rex skeletons and he's creative. Yeah. Yeah.
2:12:15
So, he he actually put all of his money to go and find new T-Rex skeletons.
2:12:20
Uh and I used to bring them back.
2:12:22
I mean, Jurassic World deck for a dinosaur fund like Yeah. Yeah. Yeah. Yeah. Yeah.
2:12:27
And and and uh you know, William Randph Hurst obviously built this like unmanageable castle that became a museum.
2:12:32
Uh, I I'm I'm kind of beating this drum about like we need our elites to go and do even crazier things just like build the world's tallest building, build the world's biggest house, build a castle, build a library, build a museum.
2:12:44
Uh, and I'm not seeing it enough, but what do you think about that?
2:12:48
What interesting kind of like side projects have you seen from the greatest founders in history?
2:12:52
I I it's interesting like what would be the most interesting uh one that's done?
2:12:58
Honestly, I I prefer them to do like what Steve Jobs did.
2:13:00
I I you know if Steve was alive today he'd be what 70? So still young.
2:13:04
The idea that he wouldn't be still working all the time at Apple to me is just unfathomable.
2:13:08
Like I think like he I'm all for charity and all that other kind of stuff, but like you know every biography is kind of written like that where it's like you know focuses on the early life and then the rise and then gets really boring once they're like super rich and like name like that's not relatable to other people.
2:13:25
It's like yeah I donated a wing to you know the hospital named after my mother or something like that. Yeah.
2:13:28
Um, I'd prefer them to not have side quests.
2:13:32
I'd prefer them to work on what they're working on until they're dead.
2:13:34
You want you want Bezos to go back into Amazon now that Lena Khan's out and the heat's off.
2:13:40
Cool it with the Blue Origin. Cool it with the girls.
2:13:43
But if you're gonna have a side No, that's actually a great example.
2:13:47
If you're going to have a side quest like the Blue Origin, like then build like another company. Make it a company. Um, yeah.
2:13:52
That clock, the Long Now Foundation.
2:13:55
Have you heard about the clock? Yeah, of course. Of course.
2:13:56
Well, even even Allison did this.
2:13:58
He he took his island and and turned it into a sensei season, which is Oh, yeah.
2:14:03
like, you know, this amazing like hotel.
2:14:05
It's not It's not a David might say it's not a man, but uh Larry uh when you hear this, I love Sensei.
2:14:14
I think your properties are phenomenal. Yeah, they're fantastic.
2:14:18
I'm I'm sure they're excellent.
2:14:20
I would expect nothing else.
2:14:22
Interesting interesting lore.
2:14:22
He he So, Larry has six homes on PCH.
2:14:24
He's invested heavily in Malibu. More than that. Well, no.
2:14:28
He's got like dozens of properties in Malibu. Okay.
2:14:30
That are and I think there's six that are just in a row on PCH and the I think the fires got to two of them.
2:14:37
And at some point uh the firemen decided to make like the last stand and we're basically like the fire is not going past this point.
2:14:44
And so a couple of them went down.
2:14:47
Uh I heard in the in the January fires, but uh four still standing.
2:14:52
And I'm sure he's doing a ton to to kind of help with the recovery effort broadly in Malibu.
2:14:57
So, no, I think this is a perfect like segue into what I actually want to talk to you guys about, which is Michael Dell. It's like he's 18.
2:15:04
He starts Dell when he's 18, 19 years old. He's 60 now, right?
2:15:08
Um I talked, you had uh Zack Dell, his son, his uh co-founder on last week for for bass.
2:15:18
I talked to I talked to or yeah I talked to Zach uh for a while before I did the episode and you know he's like the idea that my dad is ever gonna stop is just never gonna happen.
2:15:27
is just never gonna happen. He's just like he had so many opportunities like he didn't when when he took the company private when he came back public he didn't have to be the CEO he's like he he's just obsessed with it like you go
2:15:36
to his house like he will he's working on his computer he wants to talk to you about the the company like he's completely uh in love with what he's doing and that's probably the the highest and best use of his time as opposed to like another side quest. Um,
2:15:48
Um, so I I do like I the response for this episode has been really really nutty um in in terms of like everybody knows they've heard Dell, right? They know who he is.
2:16:00
They've heard of this company, but the feedback I'm getting is like they didn't understand his life story and just how I think I just tweeted out like I study uncommon people, uncommon life stories for a living and Michael Dell is uncommon amongst uncommon people.
2:16:13
I'm almost 400 episodes in.
2:16:16
can't think of another single comparable founder story to his in the sense that like this guy was a money-making machine since he was like 13.
2:16:25
You guys I just heard if uh I don't know if you guys put up on the screen I heard you talking about it that that tweet that he has where he starts with you know $6 million the first year.
2:16:32
You break down doing how did he manage I haven't I've been so uh focused on TBPN this week I haven't been able to listen to the episode yet.
2:16:42
I'm going to get to it this weekend.
2:16:44
But how do you go from zero to netting 6 million uh or or grossing 6 million in the first year?
2:16:53
Like what does that even look like?
2:16:53
It's even crazier than that where like he started a company with $1,000, no co-founder, no VCs.
2:17:00
Okay, so like this is what I mean.
2:17:04
Like uh I I I I've been getting a bunch of text messages and one of them was like, I don't think there's another like [ __ ] startup story like this ever.
2:17:11
I forgot what the text said.
2:17:12
definitely an F-word in there and I posted it too.
2:17:13
Um because I I just can't think of another like that successful that fast with so limited means and he's his head competitor was compact which was he's in Austin.
2:17:24
He he launches Dell in his in his uh dorm room.
2:17:26
Austin's or uh Dell Compact is in Houston.
2:17:29
They raised I think 25 million initially.
2:17:31
So I think 25 million at the beginning and then in the first early years of Dell they had already raised like a hundred million in capital and he smokes them.
2:17:37
um they wind up getting bought and then you know Dell still is thriving and and Compact no longer exists.
2:17:43
But the one of the things that um is obvious in in the story is like he a lot of this outside success is obviously like you ha you have to be the right person with the right set of skills at the right time and you know in ' 84 the personal computer his the first time the first very popular personal computer computer appliance is what Steve Jobs called it was the Apple 2.
2:18:06
That's the first computer that I think uh Dell was 14 years old when he buys.
2:18:11
And there's a crazy stories about how big of a hustler he is and the businesses he was making.
2:18:14
He was making more in high school than his teacher was.
2:18:17
Like just a money-making machine from day one.
2:18:20
And he buys an Apple 2 with his own money, right?
2:18:22
You'll love him, Kugan, because he buys a Porsche.
2:18:27
He buys a BMW and then a Porsche.
2:18:27
He gets arrested when he's like 19 for going like 92 and like a 55 and and a red 911. under the bus like that.
2:18:35
I think both of us like this.
2:18:37
You'll love him because he was defended Marquez Brownley for speeding. Yeah. Yeah. I think it's fine.
2:18:47
So, he's uh he's obsessed with uh with you know, beautiful cars uh and and going very very fast.
2:18:52
Um but to answer your question, it's like a lot of this is because the market was pulling out.
2:18:58
So I I um I a long time ago I think it's episode 50.
2:19:00
Have you guys ever read Mark Andre's blog archive? Most of it I think. Yeah.
2:19:05
Do you remember like this is a long time ago?
2:19:06
So a lot of young founders don't even know this.
2:19:08
He was like a prolific blogger before he started A16Z. Pear.
2:19:10
That's like the blog name. Exactly.
2:19:13
And uh I think you go to A16's website now and you can pull the archive and it's absolutely incredible.
2:19:20
And one of the most important things that that uh Mark says in that was very fascinating because he's like well you know a lot of people debate what what is the the biggest predictor of startup success is it like the product is it the the the the actual people the founders the team or is it market and he's like
2:19:38
if I had to pick one my thing would be on the market and he's like in a great market with a lot of real customers the market has to be satisfied the market will pull product out of uh the market will pull product out of the company and it the market will be satisfied by the first viable competitor that comes along. And so Dell kind of before he
2:19:53
And so Dell kind of before he goes all in on it, he travels to England.
2:19:58
He's making a ton of money essentially just buying IBM PCs, souping them up, and then selling them to rich architects, dentists, doctors, and stuff like that. Right. That's how it starts.
2:20:07
Story of the bra of PC market of IBM PCs, AMG. Yeah. Yeah.
2:20:16
So, and so then he goes to England and he's like, "Wait a minute.
2:20:18
I thought like all this like there was just like computer fever in Texas.
2:20:21
He goes to England and he's like, "I'm in these stores.
2:20:24
The the the product sucks.
2:20:24
Uh the salespeople don't know anything."
2:20:30
And yet they can't keep the inventory in stock.
2:20:32
And that's when he realizes like, "Oh, I need to go all in on this."
2:20:34
He winds up dropping out at 19, telling his parents, "Hey, you know, if this doesn't work out, I'll go back to school."
2:20:39
He never goes back to school.
2:20:42
Was he technical at this time or was he just a hustler or was it No, he was he No, no, he was like a computer nerd, but I think he was much more like in in the sense of like a hardware.
2:20:51
He liked his favorite thing to do is to take apart computers.
2:20:55
So, let me give you example.
2:20:57
Another crazy stat that people don't understand.
2:20:58
He starts a company in 84. 88 they go public. Mhm. Okay.
2:21:00
Uh by the time he's 26, he's in the Fortune 500. 26 years old.
2:21:08
26 years old. like what I'm telling you right now when you listen to this episode you're going to be like holy [ __ ] there's not another story like this so his favorite thing to do um he recruits this older guy because we can talk about the fact that they they he made a lot of money because you know people give him money they were paying
2:21:24
on credit cards back then so the customer pays today and then I go buy the parts right um and then eventually he starts selling to governments and businesses and and schools and everything else so he needs to get credit and so this where he's like my bank won't give me credit I need to extend credit to governments and everything else pay credit card. So he
2:21:38
So he he winds up partnering with this guy name Lee Walker who is like a 45-year-old very successful venture capitalist entrepreneur in in Austin and he was really played a really important role in the first like four years of Dell.
2:21:48
Um but one of the most uh fascinating things is that uh what Dell then does um they how would I like let me back back up real quick.
2:22:03
Lee Walker is the one that has the relationships with the bank to get the credit that Dell needs to start selling to uh all of these uh like to to to issue the credit like they're selling to like US government and Monsanto and and all these different um companies.
2:22:17
He's also the one that helps Dell go p uh go public.
2:22:19
So Goldman Sachs uh does recommends they they use Goldman Sachs to do to to to uh take Dell public.
2:22:29
They say, "Hey, let's do a private placement first."
2:22:30
Okay, the this is going to answer your question, Jordy.
2:22:34
So, the private placement, right, there's like a couple hundred private placements that are that are in the works on Black Friday, which is the stock market crash in 1987.
2:22:41
Okay, which we talked about last time I was on here with Sam Walton.
2:22:44
Lee Walker goes in and is telling a young Michael Dell, "We're screwed."
2:22:49
Like, they're they're going to cancel our private placement.
2:22:50
They the stock market drops in 23 I think it's 23% in a single day. Mhm.
2:22:55
And he goes and to to Dell's office and he finds Dell to tell him this bad news. And what's Dell doing?
2:23:02
Dell's like, I was taking apart the the computers of my competitors to see how we could improve.
2:23:09
So, I don't know if he was technical from a software perspective, but from a hardware perspective, he was he understood how they worked.
2:23:13
He liked putting them together.
2:23:15
He liked taking them apart, putting them together, making them go faster and perform better. Yeah.
2:23:18
The concept of a computer nerd almost like died off, right?
2:23:21
in some ways, not not died off, but it was just way more of a thing and then it became like, well, if I'm really into computers and I'm just gonna make software, he talks about now they're way too complicated.
2:23:36
You used to be able to take away the first Apple 2, the IBM 5150, which I think is the first uh one he gets, you could take it apart and actually understand what every single component was doing.
2:23:44
Now, it's impossible to do that. Yeah.
2:23:46
Can you can you compare uh Dell to Jobs?
2:23:52
Um, similar revenue ramp at Apple actually, although a little bit slower in the first year.
2:23:58
Uh, I think Apple made uh under a million dollars the first year, but that was 1997.
2:24:03
By 1984, Apple was doing over a billion dollars in revenue.
2:24:08
So, Dell comes in with six million.
2:24:10
The market's a little bit more established.
2:24:12
And then, if you look at what Dell's done today, they're selling servers for businesses.
2:24:17
That's about $40 billion revenue.
2:24:20
And then uh laptops for often computers, personal computers, but for business workers, another 40 billion or something in revenue.
2:24:30
Uh he seems much less focused on product design, brand, all the different things that Steve Jobs was known for.
2:24:37
Um is he more of a private equity financial mastermind?
2:24:43
Is that what makes him special?
2:24:45
No, he he's de he's this is the weird thing too where again not really comparable to any other people.
2:24:50
He was obset he was a computer nerd.
2:24:51
Like he'd get in trouble in high school because he'd just sit in the back of class and read like Bite magazine and like was just obsessed with computers.
2:24:57
But his parents were successful in business and so every single conversation they'd have when he was a kid like this dude was reading Fortune and Force magazine at 12 years old.
2:25:08
And then we didn't even get to the point where like he does he takes Dell by the time they they they go off on this crazy run.
2:25:15
By the time uh they start hitting a lot of headwinds like 2005 by the time he gets 2012 2013 he's in real big trouble.
2:25:21
And so he takes this huge risk of doing the le the the the uh the biggest technology leverage buyout in history with Silverlay partners.
2:25:31
So they take Dell private in 2013. Okay.
2:25:34
The story gets even crazier.
2:25:37
So he understands he he was actually preparing for the age of AI like 10 years ago.
2:25:40
And so Jensen I talked about this in the um in the episode where I I found an interview with Jensen Wong and Michael Dell.
2:25:46
And Jensen's like, "Well, there's only one company in the world that can actually build these data centers at scale and give do every single thing from the storage to compute and everything else." And that's Dell.
2:25:54
And that's why they're such an important partner to us.
2:25:55
And Dell was like moving into storage and servers and stuff a long time ago, way before AI, like the prolifer proliferation of AI, I should say.
2:26:04
And um the I the the most interesting is like so he does the largest technology that they buy out Dell all they take a private $24.
2:26:11
4 billion if I remember correctly. Okay. two years later.
2:26:16
Well, he's still a private company.
2:26:17
He does the largest technology acquisition ever.
2:26:18
The MC I I I was at dinner night and uh we were with our wives and I had to apologize.
2:26:26
Uh you know, I was like, listen, I don't mean to be vulgar, but I have no other way to say this.
2:26:29
It's like Dell's got balls the size of watermelons.
2:26:30
Like the guy is a private company.
2:26:34
He buys EMC VMware, right?
2:26:37
67 billion with like4 billion of equity. Yeah.
2:26:41
So, it's like there was like a special dividend or something like that, but they wind up borrowing like 50 billion $50 billion.
2:26:49
He's like, "Hey, I'm going to take this risk.
2:26:51
I'm going to go $50 billion into debt to buy this company."
2:26:55
There's a great story I talk about in the podcast.
2:26:56
It's also in the book where EMC is, I think, a Boston company.
2:26:59
Uh the board of directors a little older, a little different.
2:27:03
And so, Dell's coming there saying he's pitching this as a, you know, merger, not an acquisition, but you know, it's more of an acquisition, I would say, but merger, acquisition, whatever you want to call it.
2:27:10
And uh he brings Jamie Diamond with him, right?
2:27:13
And there's a great story in the book where the board he's talking about what his vision for EMC, what he wants to do and and everything else.
2:27:20
And then they're like, "Okay." And they lean forward.
2:27:23
This old guy on the board, he's like, "But Michael, we're talking about a lot of money here. Do you have the money?"
2:27:28
And Michael is about to answer and Dell goes or and Jamie De goes, "They have the money."
2:27:32
It's like, it's like the guy running the most valuable bank in the world is telling him he has the money.
2:27:39
we got the money, we will get you the money.
2:27:40
Um, so yeah, and then what happens?
2:27:43
He buys that for 67 billion. They spin out VMware.
2:27:44
Uh, this will go back to your question is like he techn he's obviously technology.
2:27:50
He's also really gifted at business.
2:27:50
He understands finance and everything else.
2:27:54
So he buys uh EMC VMware for 67 billion.
2:27:57
I think in 2022 they spin out and they sell VMware by itself for 61 billion. That's insane. Wow. Like that's insane.
2:28:05
And then EMC, I forgot the dividends. It's in the book.
2:28:08
they were making like six or seven billion a year in cash flow anyways every single year.
2:28:11
So, it was like the the it's one of the most successful acquisitions of all time as well and the foundation for all the uh like building all the AI and everything they're doing now.
2:28:20
Um I again I just I've never I'm almost eight year nine years into this project 400 biographies written.
2:28:26
I just cannot think of another comparable to Dell.
2:28:28
Um, now if you want me to contra contrast him with Jobs, yeah, Jobs was much more interested in, you know, the the there's a great uh there's a great clip that just went viral on Twitter the other day where it's like Steve Jobs back in 97 sitting there with Tim.
2:28:45
I think you want to mute could share. Yeah.
2:28:47
And his whole thing was like, no, no, I like I'm not worried about market share.
2:28:50
I'm worried about building products that I could be proud of. So, yeah. Completely different.
2:28:53
Uh, much less inquisitive.
2:28:55
I mean, Apple's never really done that opportunistic acquisition thing generally, and it seems like it's still in the DNA of the company now.
2:29:01
They buy some IP, they buy some foundational technologies, but if but they're not just going to go buy a VR headset.
2:29:06
They're going to build their own.
2:29:08
And then if you look, I've been told by people that know way more about finance than I do that Dell's family office is the most financially successful family office in history.
2:29:16
He's actually built it into a firm and like some of the things they've done around that.
2:29:18
So, it's like every single thing this guy does, he's just an extreme winner. Yeah.
2:29:21
Um and and he just owned I think when they went public he owned like 73% of Dell the first time.
2:29:28
When they went private and then went public again he wind up owning like something like 45% personally. So huge uh ownership.
2:29:34
And then I think he personally profited from a friend of ours that I can't mention who that knows a lot about finance told me this uh where it's like you have to also look that when he sold VMware to Broadcom he took a a [ __ ] ton in stock.
2:29:46
And if you look at the acquisition date and Broadcom stock it's up like 3x.
2:29:49
So Broadcom buys VMware for 61 billion and then the stock is up like 3x from that since then and a lot of that was his own personal money from what I understand.
2:29:59
So it's just like when just the guy the guy just can't help but win. It's it's crazy.
2:30:03
What uh what's the backstory on his broadcasting company?
2:30:05
Did you did you follow that at all?
2:30:08
He started OTAA broadcasting in 2011 which seems like maybe kind of a No, the so the the book has actually a weird structure.
2:30:16
So I read he I read his first kind of autobiography.
2:30:19
It's called Direct from Dallas. published in 1999.
2:30:20
Then he publishes um during co uh play nice but win.
2:30:25
So play nice but win is is the one I wanted to focus on because I think it's actually like and uh he like reads the audio book.
2:30:29
It has a very interesting structure because the the first chapter is him fighting with Carl icon who's trying to steal steal his company from him and it's about to take private Dell.
2:30:38
Then every chapter alternates right between the fight to take his company private to the the startup of Dell.
2:30:46
It's a very interesting structure for an autobiography.
2:30:48
structure for an autobiography. And then the next chapter will go back to the fight and then it'll and then the next chapter after that will go okay now we're in 90 you know we're in ' 84 we're now in 87 it weirdly stops in like 90 I think maybe 99 or 2001 he talks about the troubles they were having in 2005 2007 2011 the first
2:31:07
chapter of the book but no I don't even think that's in the book if I if I remember correctly yeah that makes sense um it's crazy to see where Dell uh imagining uh if he was still running the the company today it it trades that uh 2/3 of their like the the value today the market cap is like twothirds of their revenue last year. Wow. So which Wow.
2:31:25
So which is just $60 billion company and it billion in revenue. Yeah.
2:31:31
What was it last year though?
2:31:33
Uh well they did like $95 billion in revenue last year. Yeah. Yeah. Yeah.
2:31:38
But it was it was the market was over 100 Yeah. 100 billion, right? What was it? Uh or two years ago. Yeah. Yeah. Yeah.
2:31:45
It was the stock was at 118, stocks at 84 today, down 30% over the last year.
2:31:51
So yeah, they were around 100 billion uh uh last year.
2:31:54
Um and it's pretty it's pretty fascinating comping them to Apple like they Dell was significantly bigger than Apple for like a decade.
2:32:07
Like 1999 Dell's doing 25 billion in revenue. Apple's doing seven.
2:32:14
1998 Dell's doing 55 billion in revenue.
2:32:17
Apple's doing six billion in revenue.
2:32:19
Apple had a like also had went through like this really rough period of transition in the late 90s early 2000s before having the breakout success that they've had now.
2:32:28
Now they're up in like the 300 billion revenue and of course traded a much they also invented they also invented the most successful consumer product of all time and and then also built a services about and then they also built a very very high margin services business around that and that's something Dell has never been able to do build like this high margin locked in monopoly on top of the technology in the software.
2:32:50
technology in the software. I remember I remember um in the early days of the making the podcast um just how disorienting like the success the outside success of the iPhone was cuz I think in one of the first episodes I did on Steve Jobs and I've done like 10 or
2:33:05
15 or something and they made the point that like Apple makes more from the iPhone if they just had the iPhone and nothing else than like Disney does from every single thing they've ever like they they everything all their theme parks all their movies everything else just like that one single product. Uh Uh yeah.
2:33:21
So I mean Larry Ellison is 80. Dell is 60.
2:33:25
He's got another 20 years in him.
2:33:28
It's not he's not he's not stepping him down or anything.
2:33:32
So uh I mean Larry Ellison is in the conversation to buy Tik Tok now.
2:33:35
Uh you think Dell's got like a second, third, fourth, fifth act coming up? Yes.
2:33:44
I got a great text message. Uh, somebody Yeah.
2:33:47
Uh, they said, "Dude, when you said he's only 60, I had to Google it real quick because he's so young.
2:33:53
There's going to be another edition of the book for sure.
2:33:54
He has another era of domination coming for sure." Uh, yeah.
2:33:57
I think there's going to be for sure.
2:33:59
Like I Okay, so we've talked about this last time I was on here.
2:34:04
It's like, "Oh, people say if you love what you do, like you'll do it for free."
2:34:06
And I was like, "No, there's actually another step to that.
2:34:07
It's like if you love what you do, people couldn't pay you to."
2:34:10
No, people couldn't pay you to stop. Yeah.
2:34:12
Yeah, he Dell takes it another level in the book where during 2012 uh when he's fighting to take the company private, they're like, "Why are you doing this?"
2:34:20
Like, it was very painful.
2:34:21
He could have lost control of the company with his name on it.
2:34:23
They're like, "You've already made so much money.
2:34:25
Like, just go retire to Hawaii or why don't you start a new company?"
2:34:28
And he goes, "I don't want to retire.
2:34:29
I don't want to start a new company.
2:34:32
I want this one with my name on it."
2:34:33
And then he takes it to another level.
2:34:35
He goes, "I will care about this company after I'm dead." legend founder. No. And then hold on. I I do have to say one.
2:34:52
I do have to say one even and and again uh a lot of the people I cover on the podcast are kind of cautionary tales.
2:34:58
They're like obsessed to the point where they destroy everything around them. No, Dell seems great.
2:35:00
I think he seems like he had a great life.
2:35:02
I I I think it's really important.
2:35:05
First of all, it's a much longer episode than I normally do.
2:35:08
Um, it's really important to get to the last few minutes of the podcast because like I save what I think is the most important lesson for the very end.
2:35:13
I'm not trying to like hide it in the fact that like when I talked to Zach and the way he talked about the way his kids think about him and how they look at their father, you know, they they're they're he's a hero to them.
2:35:28
Uh he was talking about like you know Dell's running one of the most complicated largest companies in the world and yet anytime his son calls him or any his kids call him is like he'll drop everything for them.
2:35:38
He's legitimately great dad still married to the same wife like this what I mean he's just uncommon amongst uncommon people.
2:35:44
I cannot think of another single like comparable to him. It's fantastic. Absolute legend.
2:35:50
I think you kind of compare to him actually.
2:35:52
I often think of you as like the Michael Dell of podcasting. Uh, no.
2:35:55
One thing I will say, he's got excellent um, excellent taste in podcast.
2:36:00
He sent Michael Dell a few years, like a year and a half ago, sent me the best DM I've ever got.
2:36:03
He says, "Your podcasts are A+."
2:36:04
And a little trophy emoji.
2:36:06
I was very proud of that.
2:36:08
And then today, he wind up tweeting.
2:36:09
He's like, "You're very good at what you do."
2:36:10
I was like, "That's amazing.
2:36:11
[ __ ] crazy that you're saying that."
2:36:12
So, real recognized, real, real recognized, real. It's wild. This has been great. Thanks for Yeah.
2:36:17
Thanks for coming on, hanging out. This is always fun.
2:36:20
Jord's got something queued up on the soundboard. Let's hear it. Brother Behavior. Brother Behavior. Thanks for the invite. I love you guys.
2:36:32
Have a good rest of your Friday.
2:36:32
Uh and Nicole Whiskoff's got some news, right? Wish off.
2:36:36
I mean uh she put out a post.
2:36:39
She's in the waiting room.
2:36:42
Which uh she said yesterday spent two full days with institutional LPs.
2:36:44
Can safely say that 98% of them are fed up with venture funds are too big, especially for new fund spinouts.
2:36:51
No one does math anymore. No liquidity.
2:36:55
Godspeed to whoever is out raising our hand.
2:36:56
You don't need to do math. We have AI now.
2:36:58
Intelligence is too cheap to meter. Yes. Yeah, that's true.
2:37:00
We have to take AI to meetings and let them speak.
2:37:05
Um and then more funds will get raised, I think. Yeah. Uh break it down for us. Name names.
2:37:10
Who's who's the dumbest man LP in the valley? No, I'm kidding.
2:37:15
No, I wasn't even in SF, but I don't want to throw it in under a bridge.
2:37:19
Um, so I was in a big money hub, if you will.
2:37:22
Less probably tech companies, but a lot of capital.
2:37:24
Um, and I did, so I try to every six to nine months, just to to like set the stage here, I try to just go to the LP tour.
2:37:32
Existing LPs, uh, as you guys probably know, you want to get to know institutional folks years before they invest or that's the expectation that they know you for a super long time.
2:37:40
So I do my, you know, grand old tour across the US, um, you know, twice a year and this was one of those.
2:37:47
So, I took six like hourlong meetings in person um over the last two days with like endowments, pension funds, you name it.
2:37:55
All of which are largely pretty active in venture or have become increasingly so.
2:37:59
Um and so yeah, just just setting the stage there, but happy to either you guys Yeah, let me know what's most Yeah, break down the post.
2:38:08
Uh there was kind of a lot in there, but um the idea that uh you know venture is clearly an important asset class or or at least we would always like to believe even though it's a small percentage of actual dollars allocated. Uh, I'm curious.
2:38:24
Um, the quote, "No one does math anymore."
2:38:30
To me, that stood out as potentially, you know, you have a $200 million seed fund, you start running the math and you're like, wait, we need to back six unicorns at seed to deliver a 2x fund.
2:38:42
And then is that what you're kind of getting at there?
2:38:44
It's just like I don't want to butcher uh some quotes here from from meetings, but I think it was along the lines of um fund managers come to raise funds.
2:38:52
I think and what I what I should caveat is it seemed like a lot of the house cleaning was done on the existing kind of blue chip relationships with a lot of these institutionals like a couple over the last few years.
2:39:03
So I think that the negative sentiment was actually towards maybe newer funds or like the funds that are on fund three and fund four but going out and still trying to raise these like aggressively large like over $300 million funds.
2:39:15
um it seemed less I I think they did some house cleaning already when they were frustrated with the big funds that they've had in the portfolio for over a decade um and did some house cleaning there.
2:39:26
And so I think that feels like it's sort of settled.
2:39:29
They've picked the folks they want to concentrate with.
2:39:30
Um and then but I think the new relationships are getting a little bit blurry.
2:39:34
Um, and so from that perspective, it was a lot of how are we supposed to invest in like the next generation of the blue chip funds and like being in their fund two and fund three when we have these folks coming to us who don't have a portfolio construction model trying to raise over $und00 million which may seem small to folks but it's a lot of money.
2:39:55
Um, and then they're saying things like I I forget exactly what what the CIO said to me, but something along the lines of like, yeah, so I'm asking like what returns the fund and like, oh, we expect, you know, over like 25 to 30 positions that like five will be decacorns and like five will be unicorns and that like it's just you guys get it from there.
2:40:11
And so it's like, wait, I'm sorry.
2:40:14
Can you please back me into the math?
2:40:15
And so they were saying that like you know 80% of the meetings they take and these are folks on fund two and fund three like clearly have never like opened up a spreadsheet and like walked through portfolio construction but I think they've been able to get away with that for their past few funds.
2:40:30
for their past few funds. Um, do you think part of it part of it is that uh math is not commonly used in venture because you're kind of trying to predict outcomes 10 years down the road, but then that that CIO is getting pitched by
2:40:44
some traditional private equity fund that's basically saying we are going to invest in, you know, six companies a fund and they need to do uh we're going to exit within four years and all we're really aiming for is to just consistently get sort of an 8% uh return on. Well, there's two different types of
2:41:02
Well, there's two different types of math a VC can do.
2:41:03
They can do math about the market size and and uh you know, DCF on the value of the company they're investing in, but then they can also do math on the portfolio construction side.
2:41:14
And it feels like vibe investing might be okay.
2:41:16
Just find the insane founder, invest in, oh, it's one on 10 or it's two on 20, whatever. That might not matter.
2:41:23
But if you're not thinking about the portfolio construction at all, you might turn away some LPS.
2:41:26
And simultaneously, the the other thing that I think is interesting is is venture and private equity were always under the same in the same category, yet they're starting to like overlap more in different ways.
2:41:40
I mean, I felt like one CIO that manages like like I think they're around 15 billion was saying to me that like she's like I would just rather I'd rather just do private equity all day.
2:41:50
She's like the IR is better.
2:41:52
She's like I have a window into like liquidity that is not that long.
2:41:54
Um, and so they're obviously safer investments.
2:41:58
I think where people are I I would say that the net takeaway is that folks are just sitting on their hands and I think frustrated that they're still sitting on their hands as in there's no liquidity.
2:42:07
So there's no no one would say this, but there's not a lot of fun that's going on right now.
2:42:10
Like no one's super excited about like these massive exits where they've got to think that the problem that they're thinking about is where do we deploy this cash, right?
2:42:16
Like most folks go into every year and they have a fiveyear plan and they know we're going to deploy a billion into venture this year.
2:42:22
Um, but I think that's just been the other takeaway was from really large folks that are active in venture.
2:42:27
I don't know how everyone else is still investing in these funds when no one has any cash.
2:42:33
Like they're like I just don't understand.
2:42:35
There's been no liquidity for any of us.
2:42:36
We don't have a lot of money to deploy right now.
2:42:38
Like I don't know where this like cash is coming from.
2:42:41
Um, and so it just seemed like some of the bigger I think more legitimate folks that have been around in venture for a long time don't understand maybe the newer entrance.
2:42:47
Um, hasn't it always been driven just by shifts away from other asset classes?
2:42:54
Like, you know, large LPs rotating out of real estate or treasuries or the public markets like it like anytime there's a boom in venture, it's always dwarfed by the other asset classes.
2:43:02
So, we're just looking at like if they take, you know, 2% of their equity or their public equity strategy and roll it into venture, that will like double the size of venture, right? Yes. Yeah. Yeah. I know.
2:43:14
But maybe they're tapped out. Yeah. But it's it's hard.
2:43:16
I mean, right, this is all this is just all cyclical, right?
2:43:20
Like, we're going to be in a world I bet in 24 months, I hope that I'm on the show and we're talking about this and everyone's going to be like, "Wow, we like tripled our exposure in venture and everything's going fantastic."
2:43:30
And like poo poo on private equity and like, you know, so I I do foreshadow like I foresee that happening.
2:43:35
I think that just for right now, it's just been like three plus years of crap and I think everyone feels like they're taking this beating. So, no one's optimistic.
2:43:42
Well, is the three plus years of crap coinciding with a boom in AI, you know, 58% of venture funding in Q1 went to AI startups.
2:43:53
Is part of are are do you feel like LPs are like, yeah, well, we had to stretch ourselves a little bit thin effectively so that we could get as much exposure here as we wanted or um like Yeah.
2:44:06
How how do you think they're like Yeah, I I'm curious like in many ways you could you would imagine that I think over time it will become clear like yeah deploying into you know AI startups from 2022 to 2025 was you know yeah there were some overvalued companies but like some generational winners I would hope. Yeah.
2:44:36
What what does seem to be true is that especially with AI and there's so many unknowns, right?
2:44:42
Like how much capital do these companies actually need.
2:44:45
need. We're seeing record-breaking seed rounds for example and insane prices like Mera's company two on 10 billion like goodness you know so I think a lot of it right now is it is actually making more sense to me that I think the data last year was that like what was it like 75% of VC funds or maybe north of that
2:45:02
went to like 10 funds or sorry capital raised for venture funds went to like the biggest ones the GC's the Andre's I imagine a lot of it is that one they're clearly master storytellers so they're able to say like here's what we estimate will happen in the market and how much we need to deploy now and maybe those vintages will be fantastic. I think what
2:45:17
vintages will be fantastic. I think what is really confusing and some of the conversations I was having and I actually got this data I sent DST to did this presentation for some of my portfolio companies a month ago and it was they wouldn't give me the slides but
2:45:29
I have it like burned in my brain which was like at growth what's super hard is that for growth funds is that they've traditionally underwritten companies to say great if you're a DST you've got 30 billion plus in AUM you're typically a
2:45:40
growth investor you're looking at a company and your timer starts for their year-over-year growth once they hit 2 million in AR and so like from 2 million in ARR is that if you grow and it's kind of nuts and I I might be butchering some
2:45:52
of this but we can like verify it but it was like if you're growing uh only 200% year-over-year from 2 million in ARR then it will take you like I think it was like 29 and a half years to be a 10 billion company they're not going to invest that's like forever. Um if you're
2:46:03
Um if you're growing 300% year-over-year then I think that number was around uh like 14 and a half and if you're growing 500% year-over-year from that 2 million I think it was like seven and a half.
2:46:14
But what happens when that window from like one like like that that two million right now companies are going from like zero to what was it like 70 million I just saw in like a year or like two years.
2:46:25
So the entire underwriting model of like a great business for growth funds is broken.
2:46:30
funds is broken. So everyone now I'm sure from an LP perspective is like are you yoloing cash like you know like what is the new model that you guys are underwriting to like what is a great exit look like and what is the the big question you get in venture is like how do you identify a great business like
2:46:43
what are the metrics that make sense for you to deploy 50 million into a business and and like I I shouldn't speak for DST but they were like they talked to all the other growth funds and all the guys that run them and they're all sitting around a dinner table wondering like well how do we underwrite these businesses? So, I imagine as an LP
2:46:57
So, I imagine as an LP you're thinking, shoot, I'm going to trust the guys that have made us a bunch of money over the years versus these net new, let's say AI funds where no one knows, right?
2:47:06
And they haven't proven that they've done anything in the past.
2:47:09
Um, on the AI stuff, maybe on the venture side, uh, do you think the wind surf rumored acquisition by OpenAI changes the conversation?
2:47:17
There was a big meme, don't build a don't build a chat GPT rapper, GPT5 is going to steamroll you.
2:47:23
Well, it looks like uh Sam might be opening up the piggy bank and shelling out for some companies that could be described somewhat as rappers.
2:47:32
And if that trend continues and all the foundation model companies are buying a ton of consumer products that are built on top of them, well, those could be some really great exits.
2:47:39
Uh what is your take the conversation?
2:47:41
We don't necessarily know, we don't have details on that acquisition.
2:47:46
It might not be a liquidity event, right?
2:47:48
It might just be like, you know, our wind surf investors getting rolled in.
2:47:52
You know, I'm sure there's uh uh people votes in the nonprofit. Yeah. Yeah. Nonprofit.
2:47:56
The seed of the nonprofit.
2:47:59
I have too many questions there that I have answers, right?
2:48:02
Like I actually don't even know who most of Windsor's investors are and how I It's a Green Oaks deal actually.
2:48:07
Green Oaks did the seed and the series A.
2:48:08
Um of course are amazing. No, that's amazing.
2:48:13
Look, I I hope I hope people make Look, we are all incentivized to see cash, right?
2:48:18
like to see some liquidity.
2:48:18
I think I would summarize all the sentiment to being just like obviously as you guys know lack of liquidity and so people are looking for new reasons to get angry.
2:48:27
Like I was hearing even things like I hate the 2 and 20 model.
2:48:30
It's such BS and then big funds ask for more than like 20 you know if they hit like over a 3x net you know then it becomes 30 and like I feel like a few CIOS were like f this market you know but that sentiment's going to change as soon as they see liquidity and then it's gonna be like oh my god it's amazing our exposure is like tripled.
2:48:45
Um, and so I just can't wait for that to happen.
2:48:47
I just think people are grouchy. Grouchy.
2:48:51
Are you telling an AI story to LPs that mirrors cloud or mobile or fire or electricity around AI?
2:48:59
You kind of pick your metaphor and depending on how bullish you are, you pick a more extreme metaphor.
2:49:06
Look, I think um me co-founding a business uh to build nextgen AI data centers shows where my head's at.
2:49:14
head's at. It's in the infra like the physical infrastructure and the power and so like and that's obviously nonwishoff ventures related though I've told you guys like I gifted my shares into the funds y um but I think that
2:49:25
like that that's but that's like a non- kind of LP pitch from that perspective I think the from a wish ventures perspective I'm very bullish on the vertical AI applications I think I can't I don't know who can I can't really predict where everything goes um at all
2:49:38
on the AI front whether it's horizontal it's foundational I I don't know um what I will say is the more specialized you are in your vertical and the more you can enable a home services business for example to um you know hire less people and and bring in more business I think
2:49:54
the more like you know insulated you are it's harder to rip you out and so I'm really really all in on like these vertical applications where folks are specialized and they can kind of walk their users uh to this type of automation. I think people like really
2:50:05
I think people like really really like don't think deeply about how hard it is to get people to adopt this.
2:50:12
I know the idea is to like decrease headcount, but like no one understands this stuff.
2:50:15
No one knows how to implement.
2:50:17
No one knows how to think about it.
2:50:18
Um, and so I I just think it's like down to the folks that know how to like tangibly articulate the value of an offering.
2:50:25
And being an SF, and it's kind of why I'm grateful not to live there, though I love it, not knocking it, but like you just kind of get sucked into this like, oh my god, of course it's like so obvious like everyone's going to adopt and pay a million dollars for this and enterprise value is like going to balloon.
2:50:38
And like we're forgetting that there's a whole world out there that's like never even heard of like GPT. Yeah.
2:50:43
Um and so yeah, you are you staying away from consumer AI?
2:50:46
I talked to a founder yesterday that pitched me like a what was like a great idea and application of the tech.
2:50:55
But I just like immediately he was like tell me why I shouldn't do this.
2:50:59
And I was like, I believe that this is like not something that OpenAI has like explicitly said is on their road map, but is like an obvious thing that Agentic, you know, like an an agentic uh system would just do automatically. Yeah.
2:51:15
do automatically. Yeah. And so how are you thinking are are you feeling like you know a lot more confident in these like sort of B2B verticalized applications versus like a lot of consumer right now if if it's not network anime filter was not on the open AI road map but they crushed it just by
2:51:37
working on images long enough right it's like NFTts they come in and they're so cool for like five minutes and then it's like wow we spent a lot of money there I mean that's probably not fair and I've watched NFTs come back in like 12 months I think that the uh honestly I don't know. I mean I toy around with a lot of
2:51:49
I mean I toy around with a lot of this stuff.
2:51:51
Like the great thing about consumers that I can just mess with it and like try and figure it all out.
2:51:54
Um I don't know that I I found anything even personally sticky enough that I'm like every day like you know like messing around with it.
2:52:02
And I guess it's not fair like obviously like open AI like clawed and perplexity.
2:52:05
Um but I think like on the everyday I haven't really I I always have an open mind.
2:52:09
Some of the YC companies I've seen have been super interesting, but I haven't really found longevity for my myself using them as like a, you know, personally.
2:52:17
Um, but maybe my mind's not open enough.
2:52:19
I just try to think I realize this is a pretty irrational business than some, you know, like I I try to take more of a rational lens around like could could this make it 10 plus years as a durable business.
2:52:31
Um, you're hiring in San Francisco looking for two to three folks that are operators.
2:52:35
Uh, why did you settle on uh that language operators?
2:52:38
Uh we've talked to VCs who have been top of their class at Goldman come in and just work the spreadsheets for a decade and put up historical runs.
2:52:47
Also founders, you know, but operators specifically, what why do you think that's the key to success in venture?
2:52:53
Look, I think for my style of what we do and like where we try to like add value to companies is absolutely saying like, oh, been there, seen that, like here's what worked for us, here's what didn't.
2:53:02
And like just being fast to that response because things have to get done.
2:53:06
things have to get done. Um I have hired so I have Neil on my team as a senior associate and who he comes from venture doesn't have operating experience and so this July when it's quiet in DC Neil is full-time at one of my portfolio companies in LA as on the bisops team operating like that's important to me
2:53:23
like I'll cultivate it like that's the thing I want in our DNA if you don't have the operating experience I don't want to lose you to it but you're going to go get it um and so I want to keep that DNA I think it matters in SF we need exposure there over half the deals done last here, you know, we're in California. Um, we do a ton of deals in
2:53:38
Um, we do a ton of deals in SF.
2:53:40
We see a lot, but I want folks folks that are boots on the ground.
2:53:42
Um, I it's sort of kind of like to start I want to hire someone there full-time, but for now, sort of like scouting, people that are excited about venture, but still really like operating that are writing small checks, but I want to pull them in.
2:53:55
So, unlike scouting now where you just source and then ideally get some carry, I want them to see a whole deal through.
2:54:00
They source a deal that we do it.
2:54:02
They're joining every call.
2:54:02
They'll learn how to we underwrite the deals, how we do the work, and then eventually they can put that on their resume if they want to, but we'll see.
2:54:08
And ideally, I can hire one that's fantastic.
2:54:11
Um, but just an approach I want to take.
2:54:13
I don't know how these venture firms do their thing and do their scouting stuff. I don't care.
2:54:16
Um, but it's something that I just want to test out and see how it works. Very cool. Jordy, anything else? No, this is great.
2:54:22
I wanted to uh just get a get a gut check for I mean, we have a lot of managers that listen to the show that maybe aren't fundraising right now.
2:54:30
Hopefully, they're having, you know, doing little mini checkups. Um, doing some math. Doing some math. Open up that calculator.
2:54:37
You need to answer the question, how do you return 50 million, right?
2:54:42
Your fund sizes, you know, like like literally and and walk through tangible examples.
2:54:45
And apparently no one does that or can do that on the fly.
2:54:48
You see one trillion dollar company in the portfolio. Exactly.
2:54:52
Just get out the the unicorn decacorn thing.
2:54:54
just buy 10% of the next Facebook seriously for 100k. Yeah, it's easy.
2:55:00
Now on the other thing that was interesting is a lot of I was actually I didn't mention this but I was asking about spinouts.
2:55:05
There's a lot of great people I think great you know spinning out of of of notable funds and and raising funds.
2:55:11
I think what's confusing for them is they were like look a lot of these guys took the strategy even though they even the blue chips do this and this is why they're so active in seed and this is coming from the LPS.
2:55:20
They're so active in seed because the individual investors are like, "Well, hey, if we take 30 million and divide that out by a ton of two, $3 million checks, if we lose a few, it's not such a blow to the reputation of that of that, you know, partner at the firm versus taking a $30 million check and putting into one company and saying like, hey, like I'm a pretty good picker if that works out."
2:55:43
And so, I think it's made it really really hard to underwrite these guys because they've just done whatever they've wanted and candidly haven't taken a lot of risk or maybe been able to.
2:55:49
Um, so it's going to be interesting to see specifically I think right now we're seeing the most probably good quality spinouts it sounds like over the last six months raising funds.
2:55:56
Um, but I think it's also I thought that like [ __ ] it's just hard for me because I've never been in venture before and I'm trying to like do something substantial but it turns out that like even the folks that spin out are still getting kicked in the teeth.
2:56:10
So I think to what you were saying go meet LPS really early and be able to answer these like tangible financial question.
2:56:15
I mean it seems obvious it's not but like it really that matters. Yeah.
2:56:18
It's funny to look at if you just ignore like you know looking at a spreadsheet of portfolio construction and you just look at somebody and you look and you say if this person has a hund00 million to deploy in the next three years do I think they're going to be able to give back hundreds of millions of dollars and when you really just like look at somebody and just like ask yourself that question.
2:56:40
Sometimes I sometimes I look at a manager, you know, I'm an LP in a in a fund uh here in LA uh uh run by Didn't do any math.
2:56:48
It sounds like that was a Vibe LP investment.
2:56:52
It was a Vibe LP investment, but I look at, you know, I'm talking about a buddy of mine, Jack Drafus, and like he's got a $30 million fund.
2:56:58
I look at him and I'm like, "Yes, I believe he's going to give back around $100 million to his LPs."
2:57:04
And like it's not like it's purely vibes based, but the guy knows how to, you know, knows how to do deals. Yeah.
2:57:12
And well, the other Yeah.
2:57:14
And I'll leave you guys this.
2:57:14
I know we're over is like, so I was talking to um like a managing director at a pension fund that's got like over 55 billion and they're super active in venture.
2:57:23
And he was actually saying, he's like, "Go after the pensions."
2:57:26
Because he's like, "Endowments will actually leave you. Like they will turn."
2:57:28
But he's like, "Pensions don't.
2:57:30
So if you get in, it's like pretty sticky, but they do have a high bar for like emerging folks."
2:57:33
But he was like I almost he's like I could make a killing if I left here and just advise managers that are trying to basically institutionalize because he was like the hard stuff are things like when to exit.
2:57:44
He's like you could be you could have great access you could actually pick the right deals and you could just never exit at the right time.
2:57:48
And he's like that is just like a lot of what we see.
2:57:52
So there's just an art to how do you institutionalize your firm that he's like a lot of folks miss.
2:57:55
So if emerging managers are listening that's like the big chasm that is really hard to cross like have you hired appropriately even if you're a solo GP like you have wait but when you talk about when to exit are you talking about let's say a a breakout company in the portfolio is raising a round at $5 billion and there's a lot enough demand for the round and you're saying like when to exit those positions or or what did you mean by that?
2:58:17
I would say that largely most folks, especially emerging managers, at least as far as I know, um are tell LPs, and this is what I do as well.
2:58:25
I'm not a public markets investor.
2:58:27
When my companies go public, as soon as we're out of lockup, like that that's ideally around the time that we sell, and then it's your responsibility to do what you want to do with the shares.
2:58:34
Um, so I think a lot of it is on the way there, especially I mean, and this is probably a lot of what we're seeing because of 2021.
2:58:39
A lot of folks should have probably sold secondary on the way up because people got priced at like sky-high valuations and there was secondary happening all over the place at an insane premium.
2:58:48
And I think they're referring to VCs never selling secondary.
2:58:52
And then th those rounds go from being a $5 billion series D where they could have sold secondary in 21 to like a billion dollar company right now.
2:59:00
And they're sitting on these and it's like just still on the books.
2:59:04
And so I think it's a lot more of that that never happened. But that's hard.
2:59:07
Well, that's another reason to keep your fund small because if you have a $50 million fund and you get an opportunity to sell a port, you know, secondary, like that could return the fund potentially.
2:59:19
But if you're, you know, $500 million fund, it's hard to ever figure out an opportunity to sell secondary that's going to like meaningfully, you know, you know, uh, return the fund or or or anything along those lines.
2:59:31
That stuff can haunt you too because I'll hear stories of people selling Facebook when it was like, you know, 20 B.
2:59:36
I think I heard the craziest story from Tiger once, which like I don't actually never mind.
2:59:41
I was like, I don't even know if that's on the record. Yeah. Yeah.
2:59:44
They love doing PR actually.
2:59:44
Tiger loves just like they're open book.
2:59:47
That is not my story to tell.
2:59:49
There's definitely not a book about them where all the names are changed floating around. Actually, no.
2:59:54
It's got to be public knowledge.
2:59:56
They sold They Oh my god, they sold so early at Facebook. That's all I'll say.
3:00:00
It is it hurts because they do money people sold.
3:00:01
I mean that like I mean Sequoia sold Google and we we we've talked about this like they you know IPO and then they just distribute and it's like oh like they sold Google at like 50 million or 100 million or 500 million like way way way too early by the way.
3:00:13
I have no idea if that look I just think it's the it's the angle this the approach you want to take.
3:00:18
If they want to take that capital and the returns they made and dump it right back in then they should should do that. But yeah. Yeah. Awesome guys. Anyway, this is great.
3:00:25
Thanks for squeezing this in and have a great weekend. Y'all too. See you soon. Thank you. Talk to you soon. Bye. Let's go to Zack Kukov.
3:00:32
He says, "Know your audience.
3:00:34
Chief of staff edition in DC. They're either 24 or 45.
3:00:36
They're the second most powerful person in the room. They run the show.
3:00:41
In San Francisco, it's a newrad, a glorified associate, best case, or EA, base case, and they run the Slack." Slack. It's funny. Very real.
3:00:50
SF stole the word the title. Co-oped that language. Yeah.
3:00:54
And made it extreme in the opposite direction. They did.
3:00:58
Yeah, gotta bring it back.
3:00:58
Uh, Sheiel says, "Thoughts and prayers for our glassreneurs.
3:01:03
The business is down 75%." This is crazy.
3:01:05
Auto tan is cooked so hardcred incredible glass is not getting broken.
3:01:11
So, San Francisco auto glass shops are now suffering as car breakins plunge.
3:01:16
Uh, it really does seem like San Francisco's cleaning things up. There's a new mayor.
3:01:21
There's a lot of new investment and obviously the AI boom.
3:01:25
But I think just a general vibe shift uh not even around the the federal election but just around uh enough is enough.
3:01:33
And so uh they're they're mixing things up there and it seems like good progress.
3:01:37
And also anytime anything bad happens somebody tags Gary Tan Batman.
3:01:39
I kept telling friends who live in the Bay I'm like you realize that like like 2023 was the time to be buying an SF because the buy ship was happening. Yes.
3:01:50
homes were when I when I compared home prices in prime central SF to like suburbs outside of LA. Yep.
3:02:00
I was like, how does this make any sense?
3:02:02
The only reason it makes sense is people had gotten so depressed there was not a lot of management, you know, people saying, you know, certainly less people going, I'm going to move from Austin to SF. Yeah.
3:02:13
And so, but people did get dramatic with the moves out of SF.
3:02:15
It's like you could have gone to Marin.
3:02:17
You could have gone to Athetherton.
3:02:18
But instead they were like I need to go to Moadishu Somalia.
3:02:20
I have to leave the the hemisphere.
3:02:23
I have to be so far away from San Francisco because it's so bad.
3:02:27
I have to go to North Korea.
3:02:29
I would rather be in Pyongyang than than Incline Village in Tahoe.
3:02:33
Like there are so many good options.
3:02:36
Even when even if San Francisco the city is rough like Sunnyale is fine.
3:02:41
Like there's so many places in the Bay that are great.
3:02:43
Uh, you can go to Sand Hill Road, you can go to Menllo, you can go to Palo Alto.
3:02:47
None of those places were ever bad, but it got really, really dramatic for a while.
3:02:53
Anyway, um, uh, here's a rumor from TechCrunch.
3:02:56
Expense management startup ramp is being considered for a charge card pilot program by the US government's general services administration.
3:03:05
Well, we're going to take a little credit for this one.
3:03:09
Did did they plant this in our head and then we joked about it or did we joke about it and plant the in their head? I don't know.
3:03:15
No, we were just joking about it. We were joking about it.
3:03:16
We were joking about it in a serious way. Yeah.
3:03:19
And then and then we got a uh a deep dive on it.
3:03:21
Uh Eric put out a longer post, started taking it more seriously, and it sounds like it's actually being considered, which is crazy.
3:03:28
Uh but you love to see it and uh it'd be very cool.
3:03:31
I mean uh we always have the question of like where does the money go in the government?
3:03:34
Why not have some insight in that?
3:03:36
Why not have the receipts actually categorized?
3:03:38
That makes a ton of sense.
3:03:39
There's some debate over whether or not every card to a dollar like what they've been doing. Yeah. Yeah. Yeah.
3:03:45
Very, very bizarre functions.
3:03:47
And I mean, you can just imagine that if there's no oversight, there's going to be more like just looser spending and and that hurts the taxpayers.
3:03:54
So, uh very excited about this. I hope it happens.
3:03:58
Um anyway, uh anyways, let's move on.
3:03:58
We talked about the Golden Dome.
3:04:02
Um anything else in here we should talk about?
3:04:06
Should we close out with Wilmanitis talking about Don Valentine? Don Valentine. Don Valentine.
3:04:11
He says on pricing and 25-year-old uh entrepreneurs.
3:04:16
Valentine says uh maybe maybe we should go back and forth here.
3:04:20
Um I'll be Valentine, I guess.
3:04:20
Can I make an observation before we switch? Sure, absolutely.
3:04:24
Uh because John, I were John and I were talking about this in the car and one of the great things about that venture business is that you're in an opportunity to learn constantly.
3:04:34
One of the large number of things that were brilliantly recognized and executed was the pricing of the product.
3:04:39
We have in general at Sequoia lots of trouble and difficulty in persuading 25 entre 25-year-old entrepreneurs that you've got to pro price the product higher.
3:04:47
And our agenda for that conviction was the fact that 25year-old that a 25-year-old cannot run a company activate golden retriever mode on 35 or 40% gross margin.
3:04:56
uh they need 60% 65% gross margin in order to compensate for the mistakes that we know they're going to make.
3:05:06
Not specifically no, but in general we know they're going to waste a great deal of investment capital.
3:05:11
That's a great insight like like they're going to overhire.
3:05:12
They're going to get over their skis on capex.
3:05:16
They're going to be excited and say, "Oh yeah, let's just pay up for this talent."
3:05:20
And if you are making a lot of money, you can afford to make mistakes. Fine. Yeah, it's fine.
3:05:25
uh and Cisco was early on no and no influence from me or other investors able to recognize the need of first of all pricing the product very high sustaining a very high price and continuing to make enhancements to the product that provided them with the opportunity to continue at high at a high gross margin level or increase the high gross margin level.
3:05:43
So, one of the miracles of the launch of Cisco was the creation of an enviable cash flow that was early on very positive when most companies are negative.
3:05:51
And I remember conversations not seriously had but not often had either about what we were going to do with all this cash we are accumulating.
3:06:00
Now, startups do not have accumulation problems.
3:06:02
They have the opposite problem.
3:06:05
So, they need to persuade the founders. Yeah.
3:06:07
And I love where I love where Will pulled this from Cisco oral history panel part two. I love it.
3:06:15
He's got the PDF esoteric PDF. Big PDF guy.
3:06:18
Uh but I think that's a good where uh place to uh end the show.
3:06:24
Yeah, this was fantastic.
3:06:27
Hope everyone has a fantastic weekend ahead.
3:06:28
Thank you to Poly Market.
3:06:28
If you're trying to monitor the news in real time over this weekend, head over to Poly Market.
3:06:33
They got a bunch of markets to check out what's going on.
3:06:36
Yeah, the Poly Market news platform. never stops.
3:06:38
I shared earlier uh this chart the largest company end of April and Apple and Microsoft were neck andneck and then Tim cooked and uh Apple is now sitting at you know a 92% with a almost a couple weeks left in the month.
3:06:59
So uh who would have thought that Apple would be still on top in a trade war with China, their primary supplier? They're doing great.
3:07:06
Uh Tim is goated when it comes to supply chain management.
3:07:12
So um anyways, we were in one of those interviews and I just looked over at that stupid giant gong and we started laughing.
3:07:19
When we when we roll out this gong, it's going to be insane.
3:07:23
We keep going to the wide angle and the gong is not even it's too big to fit in this tease. It's such a tease.
3:07:29
Anyway, uh have a great weekend everyone. Happy Friday. We will see you soon. Goodbye.
3:07:34
Looking forward to Monday.