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Delta team, you are clear to engage. 5.
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Today is Friday, June 20th, 2025.
4:44
We are live from the TBPN Ultra Dome.
4:47
the Temple of Technology.
4:49
Many people call it the fortress of finance.
4:51
It's also been known as the capital of capital. That's right.
4:54
Uh we have a great show for you, Jay, folks.
4:56
Um there's a whole bunch of news.
4:58
I think we should run through it a little bit.
5:00
Uh first off, um uh interest rates aren't going down.
5:04
We need a moment of silence for interest rates. We want them to be zero. Ideally, negative. How low could they go?
5:09
Could you have negative 200% interest rates?
5:10
I think that would be the best situation possible.
5:15
Negative 100% If you deposit your money, you lose it all instantly.
5:21
Negative 100% interest rate.
5:21
Keep it in cash in brief. Invest it or lose it. You have to go long. You have to go long. Risk on assoc.
5:29
You have to be risk on or else the money just evaporates immediately.
5:33
Uh that uh I guess that kind of happens if you're in an inflation environment.
5:37
Uh anyway, uh the Fed's Powell maintained his caution about interest rate levels as the central bank continues to monitor the effects of Trump's tariffs on the economy. So no movement.
5:47
The Fed is waiting for dust to settle on tariff turmoil.
5:51
And the Bank of England is doing the same thing.
5:52
It left its key interest rate unchanged, mirroring the Fed's decision a day earlier.
5:56
Uh so they're they're really copying off of Pal's homework, looking over, oh, he's not cutting interest rates.
6:03
We won't cut interest rates either.
6:04
Um, in other news, Microsoft is planning to lay off several thousand employees in the next few weeks.
6:09
This is not the same story that happened back in May.
6:12
We'll dive into this a little bit later.
6:14
Um, but they're ramping up the cuts, which is, uh, you know, obviously kicking into gear with the the AI and efficiency push.
6:23
There's a whole bunch of different narratives that we'll try and untangle.
6:26
Uh also uh a firm is starting to sell uh consumer loans from their buy now pay later program to uh larger investment firms like Credential.
6:35
So Credential is buying $500 million of these packaged loans uh from a firm. So interesting there.
6:42
And then in other news, Social Security could become unable to pay full retirement and disability benefits in 2034, a year earlier than previously reported.
6:53
that I don't even know why that's news. It doesn't matter.
6:56
AGI is coming in just a few years and none of this will matter.
6:59
Um uh also Trump gave Tik Tok another 90-day reprieve.
7:08
Uh follow us on Tik Tok if you're on Tik Tok for some reason.
7:10
We are trying to grow on that platform because you got to hedge and we got to be everywhere.
7:13
Well, we just don't think we'll be able to make a good case for taking it over if we have zero presence. Exactly.
7:19
We have to understand know thy enemy.
7:20
Um um I got some insight from our fintech correspondent Aaron Frank over at Lightseed Venture Partners.
7:28
He flagged that Chris Waller, a member of the Federal Reserve Board of the United States, was on CNBC today. Uh it was unscheduled.
7:38
It's pretty uncharacteristic, but he came out um and was basically signaling that they're going to drop rates uh most likely in July, you know, the next cycle.
7:46
And this is news from a venture capitalist. They told you this.
7:49
venture capitalist is saying that rates are going to drop. Yes.
7:52
And uh we'd love to hear that.
7:56
Um but yeah, this was apparently went out uh this morning.
7:58
Uh and okay, not not super traditional to break ranked like that.
8:05
The biggest news that obviously everyone is tracking is meta. We got to cover this.
8:09
Uh you know, everyone's been focused on meta.
8:11
The story of course is about Andrew Bosworth's $45 million house.
8:16
So, which absolutely hit the mansion section of the journal this morning, which we have we have a signed copy of, by the way, because the photographer who has shot for the mansion section was in the studio today.
8:29
We got a signature on the mansion section. We need a close-up cam.
8:34
Should I put that on the printer cam?
8:35
Put it on the printer cam. Signed copy.
8:38
Does that Does that work? Priceless. There you go. Signed by Mark.
8:40
And the other thing we have going on today, the sort of the the elephant in the room is that uh we got a new intern cam going.
8:49
So, let's let's take it over to Tyler.
8:51
Tyler, how you doing over there? What's up, guys?
8:53
In the back of the Mayback.
8:56
It's pretty chill back here.
8:56
We got a little desk set up. Yeah. Got Wi-Fi. You're productive.
9:00
The the the big news that we're having him dig into is Cle. Yep. Uh they are Okay.
9:05
something happening there.
9:12
But we got some flak for talking to Roy and not actually using the app.
9:15
We're still above using the app, but we will let our intern use the app.
9:21
It's more that we don't have time.
9:22
We're too busy podcasting, but Tyler has time.
9:24
Many people are starting to call after his Windsurf review, people are starting to call him the MKBHD of enterprise software.
9:33
Yeah, but people haven't seen that.
9:34
So, um, so yeah, today he's going to be, uh, trying out Cle.
9:37
We're going to be helping you're going to see how how easily he can cheat on some hard-hitting questions that we're going to be asking him.
9:44
So, so, state of affairs, uh, Tyler, where are we on the CLY install so far? Have you paid for it?
9:51
What's the experience been like so far?
9:52
Yeah, I mean, I I'm ready to go whenever.
9:55
Um, I I I played around with it for maybe like two minutes just to make sure it was working. Okay.
9:59
So, I I want to get my live reaction when we start. Okay.
10:02
Well, spin it up, pay for it. Yes.
10:05
Let's get on the top tier.
10:08
Uh, and we'll check back in a little bit. Yeah. Yeah.
10:11
We're going to be peppering you with questions that only Cle could answer. Yep.
10:14
What's the popular What's the population of Iran? Go. Go. 89 million. 82.
10:19
Wait, I don't have it running right now.
10:23
You got to have it running. You failed.
10:25
You failed your technical.
10:26
You failed the first test.
10:27
Well, get it uh get it fixed and we'll circle back in a bit.
10:30
Get it to get it together. Guess a question.
10:33
Guess a number between 150 randomly better than 27. Okay.
10:39
So anyway, I do want to cover the story.
10:41
A $45 million home that blends into the California landscape. Uh let's read from this.
10:45
After building a modern home in San Monteo, California, April and Andrew Bosworth Bos uh made a major architectural pivot when they decided to build a gateway inspired getaway getaway.
10:56
Inspired by a trip through the through South America, the couple built a rustic 12,000 ft hosianda that nestles into the landscape.
11:04
The vacation home, which they call Estan Estansia Madera. Estia Mada. That's a great name.
11:10
You got to name your house.
11:12
It's like you know you've made it when you when you have a name when you when your state has a name. Yes, it's great.
11:18
is in the Santa Lucia Preserve, a former working cattle ranch that is now a gated community between California's Carmel Valley and Carmel by the Sea.
11:26
While a large portion of the 20,000 acre preserves, rolling meadows and hills is a conservation area, the community also has almost 300 home sites and amenities like a golf course, clubhouse, and guest lodging. Lovely.
11:39
It is where the couple got married in 2012 and purchased 65 acres the following year. That's amazing.
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It's long been a dream of ours to build on this piece of land, Bos says.
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But we had a lot of things to do.
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Our jobs, building our family, building our house in San Monteo, so we just let it sit.
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But we would go down to the preserve whenever we could. That's so cool.
11:56
The preserve is about a 2-hour drive from San Mateo where their two children go to school.
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It is also close to two of Meta's Meta's campuses where Bos 43 is the chief technology officer.
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He joined Facebook in 2006, two years after graduating from Harvard. Wow, he's a lifer. What a badass.
12:12
Uh, April 46 was a physical therapist before the children were born.
12:18
Um, and then we're flipping over to other Meta news and we'll go back.
12:24
Uh, Meta apparently tried to buy Ilia Sutzer's company for $32 billion.
12:26
Oh, we should definitely be ringing the gong for Bos's $45 million home.
12:30
That makes a ton of sense. There you go. I'll I'll do the honors. Clean hit. Clean hit.
12:39
Um anyways uh as it was reported yesterday uh this was sort of rolling series of scoops.
12:45
Meta tried to buy uh safe super intelligence Ilia's uh $ 32 billion AI startup but ended up hiring its CEO instead.
12:54
So went for an aqua hire and then just basically said we'll we'll just take uh DG the CEO.
13:02
Apparently allegedly the price uh that had been offered or thrown around was $32 billion which was their last valuation. Yep. Which makes sense. It's a lot. It's pricey.
13:14
But yeah, I mean it's it's the it's the current pref price, right?
13:17
Isn't that the current preferred price? Yeah.
13:19
I mean, that's the valuation of the company.
13:22
And so, well, the preferred the preferred would have gotten a 1x either way, right?
13:26
Like they would have just gotten their money back. Oh, really? Yeah. I guess you're right.
13:29
It wouldn't have m even if they'd sold for $10 billion, you know, wouldn't wouldn't have mattered.
13:35
Swix came in here and said, "Lest I be mistaken for a hype beast, I believe that Ilia saying no to Zuck was a mistake.
13:42
Understandable given the OpenAI history, but still a mistake."
13:44
And he's posting a screenshot here.
13:46
He probably should have said yes.
13:47
TBH, why do you say that? SSI alone, not a threat. Meta alone not a threat.
13:52
SSI plus Meta, okay, we're cooking. We're cooking.
13:55
Um, and whoever he's texting with says both would have been my top bet immediately if you put them together properly.
14:02
They have such like massive advantage in terms of just scale and also talent.
14:08
It's like yeah it's like the perfect blend of like what Google does well versus also at the same time does well.
14:14
Ilia I don't I don't know this exactly but guessing he's already a billionaire and at that point he I think he's always cared so much about the mission the idea of SSI going to Meta where they would inevitably be working on things like ads and entertainment and companionship and these things that are important. Yeah.
14:34
But on a different path potentially than you know true super intelligence. Yeah. Yeah.
14:40
I mean this is like the George Hot take about um like imagine the future where it's not just you know some you know some regression deciding okay uh you're this age and you own this car so we're going to recommend this ad to you but it's you know super intelligence targeting the perfect product to you constantly.
15:02
It can feel a little dystopian.
15:03
It can feel like it might it might drive you to just constantly be consuming endless slop all day long.
15:08
Um, it it can feel like a like a pretty dystopian outcome.
15:13
But I I've always felt that that Zuck is someone who is also aware of that and fighting against that and has kids and is and and there's a lot of things that like white pill me about Zuck's approach to building meta where it seems like he doesn't want to be the person who builds a really like negative service that's causing a lot of strife or problems like problems will inevitably crop up when you develop new technology scale. Yeah.
15:38
It's it's bound to happen but he's always actually he's not fighting to make the problems worse.
15:43
he's fighting to make the to mitigate the problems.
15:45
And so, um, I don't know that there is a good ending where the AI is tracking you constantly and and trying to recommend advertising, but also trying to make your life better so you can contribute more to the economy and ultimately buy more expensive things as opposed to, you know, just like getting in a downward spir spiral and kind of like dropping out of society.
16:04
That's that that's clearly not a win for for like long term of the company if you are indexed on the global economy essentially. Um anyway, back to Bos.
16:12
Um and his and his beautiful house.
16:16
Uh the experience of building a modern primary house, which they finished in 2017, helped them figure out what they wanted and needed from a second residence, which they used for weekend getaways, school breaks, and holiday gatherings.
16:28
First was access to nature.
16:28
They used the preserve trails for hiking and horseback riding.
16:31
The family spent six months of the pandemic in a smaller house in the preserve that they bought to use during their house construction.
16:39
every morning before telecommuting to work.
16:40
Have you seen Bos's telecommuting uh uh like setup?
16:43
He has like a recliner chair with a VR headset and an iPad.
16:47
He has like the ultimate He's working from home.
16:50
Yeah, he's been working from home during the pandemic.
16:52
He got really really into it.
16:53
So, he had like a teleprompter with Probably the best set of world. Yeah, exactly.
16:56
But it wasn't it wasn't just like a money is no object setup.
17:01
It was like this is what you'd expect from like the CTO of a hyperscaler.
17:04
like he's clearly like takes it seriously and he didn't just say like get me the most expensive thing.
17:10
He clearly like put together all the best products and like designed something that was unique. So it's pretty cool.
17:15
Um so he take his kids out and go exploring.
17:17
Bos says it's one of the things we love about the preserve.
17:21
Your default behavior is to go outside. Beautiful.
17:23
Um there's some great photos in here. Absolutely.
17:25
Other priorities were to design a house that was an architectural fit with its surroundings and to scale the house to work for large family gatherings, but also to be cozy when just April and Bos are there.
17:36
That is a challenge, right?
17:38
is a challenge, right? You have you have like these massive some people wind up with like the entertaining house and then like the the house that they actually live in because at a certain scale like do you see that the that that the the biggest house in LA the one did you see this where it had a 500 person
17:54
nightclub in it and it's like like you can't just go there and like you can't just go to your personal nightclub and like have a few friends in there and not be like this is weird like or like they have a I think it has like a I think it's like a hundred car garage there, 50 car garage or something like you pull in. Didn't that house ultimately end up
18:10
Didn't that house ultimately end up selling for like 50%.
18:12
Fashion Nova founder bought it.
18:15
Uh, and yes, it it sold at a massive discount.
18:17
They were trying to get half a billion dollars, which would have been a record.
18:19
Uh, and I think it sold for still in the hundreds of millions of dollars.
18:22
Uh, and it's over 100,000 square feet. Uh, fantastic building.
18:26
Um, because of pandemic pandemic related supply chain delays and labor shortages, the house took six years to build, design, and finish.
18:34
The end result is a main house which was finished in 2024.
18:36
Plus a pool cabana, guest cottage, and horse stables.
18:40
Oh, let's play some horse noises. We love it.
18:44
The horses are absolutely thrilled.
18:46
I mean, can you imagine being the horse that gets to live and and you know, it's a dream.
18:51
Experience life on this property. That sounds fantastic. Sounds incredible. Yeah.
18:54
Uh the Bosworth spent about $45 million on the entire project, including the land, construction, landscaping, art, and design.
19:00
The design was heavily influenced by the architecture the couple saw in South America.
19:03
We were traveling through Argentina and Chile and saw lots of estansas, these grand estates which are very similar to California ranches.
19:10
They're all they're sprawling and all the rooms have access to the outdoors often on more than one side.
19:16
Uh the Bosworths hired architect Richard Beard, founder of San Francisco based Richard Beard Architects, who had designed several other homes in the area that the couple admired.
19:24
They really wanted to do something timeless.
19:26
Beard says, "The house will age well because the materials we used reflect the pallet of the land itself."
19:31
Even if it's new, it really blends in so perfectly to the landscape. Yeah.
19:35
Um even uh even in its new state, it doesn't jump out from its surroundings.
19:41
In the style of both estansas and estansas and ear in California, early Californian ranches and villas, Beard used stone, wood, and tile to harmonize with the landscape.
19:53
Beard organized the house around a manicured main courtyard with smaller yards for a car park and pool pavilion.
19:59
The guest rooms and kids rooms are arranged around the courtyard so the main living area of the house including the primary bedroom can feel like one smaller house.
20:05
There's a sequence of going from a wide open space to a more intimate one.
20:08
Uh once the architectural drawings were underway, the couple bought brought in interior designer Jeff J.
20:15
Jeffers, good name, uh who worked with them on their San Mateo house.
20:18
One of his first finds with the help of a rug dealer was the large late 19th century Orshock rug in the living room of the great room.
20:27
Normally for a room of this size, we would have a rug custommade, but I just felt like this was a different kind of house.
20:32
An Estansio an Estansia would never have a new rug, Jeff says, adding that the rug's jewel tone jewel tones over a base of golden brown sparked the project's color palette.
20:45
They built the entire house's color palette around this rug. That's awesome. incredible.
20:48
Just like, yeah, the rug really ties the room together.
20:52
Uh, that great room, which was inspired by the gathering spaces in Estansas and the historic lodges of the national parks, contains kitchen, living, and dining spaces with a long porch running alongside that has outdoor seating, and dining areas.
21:04
In 2024, at their first Thanksgiving in the house, the room easily accommodated their 20 guests.
21:09
Everybody hung out in that space.
21:11
April says it was exactly as we envisioned. People were cooking.
21:13
People were playing games at the dining table.
21:17
And some people were just talking on the couches.
21:19
The couple relied on Jeffreer's vision to create comfortable spaces.
21:21
Our guidance to him was that we like to have color and interesting combinations of things.
21:27
If you look at the house, yeah, it looks like even though it's already brand new, it looks very like lived in and very very approachable.
21:32
It's pretty pretty amazing.
21:34
Anyway, we have some massive breaking trade deal news, some personnel news. news.
21:39
We haven't done a personnel news section in a while, but Derek Thompson is leaving the Atlantic almost after almost 17 years and moving to Substack.
21:50
Congratulations to Derek Thompson.
21:50
You got to wonder teaming up with with Chris Bass over you got to wonder did Substack, you know, max out contract?
22:01
Did they give him an advance? Something like that. You don't know. We'll see.
22:06
But well, he's starting a new business. Let's hope he's on ramp. Ramp. com. Time is money. Save both.
22:10
Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place.
22:14
Uh Derek, you got to do it.
22:16
You're going to be you're going to have a chance.
22:17
You're a businessman now.
22:17
You are a business need to be on ramp.
22:21
Derek, uh we're getting Derek show next week.
22:23
We're going to be pitching him ramp directly. That's right.
22:24
He thinks he's coming on to talk about abundance, the frontier of science and technology.
22:30
We're going to bring on a ramp SDR, maybe even Sam Buck himself. That'd be amazing.
22:35
And we're going to give him the full pitch live.
22:36
How about an abundance of artificial intelligence in your CFO's software suite?
22:40
How about an abundance of enterprise SAS? That's right, Derek.
22:44
Uh Derek says, uh, "Today I'm leaving the Atlantic after almost 17 years of moving my He's taking I'm taking my writing to Substack.
22:51
Moving my talents to South Beach.
22:54
This is this is LeBron level moves in the industry."
22:56
Uh he says it would be convenient for the purposes of crafting an exciting departure announcement to have a dramatic exit story, a fight, a grievance, a shouting match with an editor that ended with me hurling a bunch of leatherbacked throw volumes across the open plan office.
23:10
That is not the case here.
23:10
I love The Atlantic and I'll remain a contributing writer here.
23:13
But after almost two decades at one publication, I wanted to write for myself the things I've published that I'm most proud of, whether it was the original abundance agenda essay or my piece on workism.
23:21
Is that like celebrating workcoholism? I don't know. Is that the trend?
23:28
I Yeah, I think he was probably very pro work. Pro work.
23:32
Emerged from a very personal experience whatsoever of it. Sure. Yeah.
23:37
Maybe maybe like the we need a culture of work.
23:39
So right here you can see he's saying like there's no dramatic exit story.
23:42
Like I love the Atlantic.
23:42
And what we're not seeing is like in the in the offices of the Atlantic like they're burning his jersey right now. Like they are upset.
23:51
This is this is major major news over there. This is personal. It's personal. It's personal. It goes deeper.
23:59
The editors are going to take this one personal and some and some time spent in the CMS.
24:02
He says, "I want to know what my thinking and writing is like if I lean into a more independent and personal writing life.
24:07
That's what brought me to Substack, which is already home to an astonishing share of my overall reading.
24:12
I'm excited to join their community community and excited to build my own."
24:15
The name of the newsletter should be easy to remember. Derek Thompson. Love it.
24:22
Uh Ben not not you know but the Thompsons are really kind of dominating you know online writing Ben Thompson's the Derek Thompsons maybe related.
24:28
Yeah maybe we could do a roll up of Thompsons.
24:32
Yeah like Thompson Reuters something like that. Yeah.
24:36
The newsletter will have three main pillars.
24:39
Abundance the frontier of science and technology.
24:41
GLP1's AI biotech and energy breakthroughs.
24:44
Uh covered in a way that's both curious and skeptical.
24:46
and three, the antisocial century and the social crises of anxiety and aloneeness.
24:53
And uh Emily Sunberg uh has some uh quick analysis here.
24:58
She says, "Friends who don't work close remotely close to the media industry are texting me about Derek Thompson's move to Substack.
25:03
Media is turning into sports, an entertaining industry that revolves around exciting, controversial characters in their teams, and everyone has favorite players."
25:14
Yeah, I mean, Substack's out on the fundraising trail right now.
25:16
This could be the This could be the thing that puts them in the centicorn category. Well, they're Oh, yeah.
25:22
100 billion, you're saying? Yeah.
25:24
I mean, that would be that would be a steal in my mind. Yeah.
25:26
Uh I I I would say this is the move that gets Masa on the phone. Yeah.
25:31
It's going to be a Stargate level deal. I could see it, John. I'm pulling forward.
25:36
So Emily says in Feed Me this morning, "The biggest news of the day in my household, Derek Thompson, who is hot off the success of his new book, Abundance, is leaving the Atlantic after 16 years and bringing his writing to Substack.
25:51
Yesterday, New York Magazine's Charlotte Klein reported on The Atlantic's hiring spree and that 300K salaries some writers were making.
25:57
A friend in one of my group chats said that that it was funny that 300K was still considered the ceiling for writers.
26:03
Just a few days ago, it was reported that Substack is churning out millionaires.
26:08
You know what else is funny?
26:10
Friends who don't work remotely close to the media industry are texting me about the Derrick Thompson news.
26:15
Media is turning into sports, uh, which I just covered.
26:17
We're all walking around with an inbox full of our favorite players.
26:22
If you're a media operator, you should not be taking a summer Friday today, calling them out.
26:28
You should be having an emergency meeting about talent retention when signing with Substack is always an option.
26:33
One retention strategy is obviously having insurance and benefits which still beat Substack in some ways.
26:39
Another is to let writers play in new formats like newsletters and video.
26:41
So I don't think this has been happening as much recently but it was being reported in the last few years that Substack would actually give writers in advance and basically say like we're going to give you 500k maxed out contract maxed out contract.
26:57
you're going to pay that back over time uh as a revenue share, but it'll help you kind of like get on your feet and really get going.
27:03
So, um exciting uh to follow.
27:06
Uh should we see does he already have paid subs up? He better.
27:13
It would be it would be a total miss.
27:16
How is the brand design looking?
27:19
Because I have some more recommendations for Derek.
27:20
You know, if he's designing a logo for his new Substack, should be using Figma. Go to figma. com, Derek.
27:27
Think bigger, build faster.
27:27
Figma helps design and development teams build great products together.
27:31
You're going to need a designer.
27:33
You're going to need to design some graphs, charts, all sorts of things for yourself.
27:38
How can you visualize abundance without an abundance of design tools at your fingertips with Figma? Get into Figma, Derek.
27:43
This we are calling you out.
27:47
Um, he does have a paid uh plan up and running, which is smart.
27:51
He's got his annual plan.
27:51
and he's got his super fan tier where you can just pick the number you want to do.
27:56
So, if you're truly a Derek Thompson super fan, go in there.
27:59
You can create a plan that's $300,000 a year.
28:01
Come back and work for me.
28:04
And uh if you're, you know, maybe like a foreign intelligence agency that wants to gain leverage over Derek, you could go that works though. No strings attached. No. No. Yeah, sure. No strings attached.
28:15
But you could sign up create a million dollar plan.
28:17
create a million dollar plan and just say, "I noticed you writing about this topic.
28:21
I I think you really got it wrong.
28:24
I think I'm considering unsubscribing further into this." Yeah. Yeah.
28:28
I mean, and I know you're just getting off the ground and it would be a real shame.
28:31
I mean, as someone who loves technological abundance, I should sign up for that plan.
28:37
And if he ever stops posting about abundance and starts going into Hey, hey, actually, I think scarcity is good.
28:43
I think scarcity is the new thing that we should be talking about.
28:44
See, I have my finger on the subscribe button. Yeah. Great. Lots of good stuff. Uh, anyways, moving on.
28:53
We have Wait, one more ad for Derek.
28:56
If you're going to drop merch and you're going to sell it, you're going to need to pay sales tax. Get on numeralhq. com. Sales tax on autopilot.
29:03
Spend less than five minutes per month on sales tax compliance.
29:04
Okay, we can move on from our pitching to Derek.
29:08
Well, well, we have so much more.
29:08
We have so much to get Derek set up with.
29:12
I'm so happy that he's a businessman now. So happy. It's amazing. New clients.
29:16
We need more entrepreneurship so we can sell more SAS.
29:17
It really is, you know, the legacy media dying, all their best talent becoming business people.
29:24
Yes, it's so good for the the the SAS industrial complex.
29:27
It can cannot be understated enough. Cannot be overstated.
29:32
Uh Sam uh G uh says, "I will I always love looking at founders crushing it to see and see if you can spot it on their resume.
29:39
Edwin who bootstraps surged to 1 billion in revenue in 5 years.
29:43
Looks like he can't hold a job down.
29:45
And this is of course Edwin who we covered on the show yesterday.
29:49
He was at uh goo he he was at uh Twitter for two years, core science at Google for one year, data science at Dropbox for a year, and then he was a research scientist at Facebook for a year, and then he of course uh built Surge AI uh which was uh is uh or I guess was a scale AI competitor to a billion dollar revenue run rate. Fantastic. Allegedly bootstrapped.
30:14
I did see some people on the timeline yesterday saying that he did have angels.
30:18
But then there were some people that were saying like, "Well, did your safes convert because that could happen." Shots fired.
30:26
It's totally possible that was like, "Yeah, you raised some safes, but like, you know, are you participating in the upside fully?"
30:32
There's always a question.
30:33
But, you know, I'm sure he's uh they're going to do quite wealth on the back of this business, especially with um with more of the Foundation Labs leaning away potentially.
30:42
We've been seeing some Yeah.
30:44
Somebody was throwing out that there was like $2 billion in in demand that's now kind of up for grabs.
30:50
So Handshake is going after it.
30:52
Companies like Surge I'm sure are label box.
30:55
Uh there's a bunch of them.
30:55
Um so Alli Dau friend of the show says welcome to the roaring 20s technology brother summer.
31:04
GPU credits are countless. AI slop is skyrocketing. Aura is radiating.
31:10
Your memories are in Swiss albums.
31:12
That's how you say it, right?
31:12
That's her That's her company. That's her company.
31:15
I know, but I I didn't want to mispronounce it.
31:16
The American Dream is back.
31:18
Drinking is on the decline.
31:18
TBPN is the National Radio. Thank you, Ally.
31:22
We appreciate the shout out.
31:22
The only one that got tagged.
31:24
She didn't even tag her own company. Wow. Crazy. We're honored. We're honored. We're honored.
31:29
Anna says, "The most important trend of the next decade, the average 21-year-old Silicon Valley founder is no longer driven by greed, Ellison, or idealism, jobs. They're driven by fame.
31:38
It is too go to become an influencer.
31:40
So being a startup founder is the best proxy to status.
31:44
Clear shots at our guest today potent.
31:47
At our guest today firing shots.
31:49
Have we announced our guest today yet? Who we're having on? I don't think so. We probably should. Should we? I I don't know. Wait a second.
31:55
But but I I would say I I would say like this is uh is the breaking news printer ready to go?
32:00
It is a new era that we're in that young founders like to Rico can become micro celebrities.
32:10
Yeah, by building hard tech companies or any type of company really. Yeah.
32:15
Um but at the same time, uh it ultimately ends up being a good strategy if you want to recruit, raise money, etc.
32:23
Just being a founder was extremely low status 10 years ago.
32:28
It was like the classic example.
32:28
You were living in the tenderloin on like $200 a month. Yeah.
32:31
Basically, it was not glamorous.
32:34
I I was I had negative net worth.
32:36
It was $5,000 in debt living on a mattress.
32:39
And but but now that's like glorified.
32:41
People take pictures of the No, people take pictures of the the mattress on the floor and they're like, I'm I'm just like Steve Jobs or whatever.
32:49
Meanwhile, they have $5 million.
32:53
There's a little bit of stolen valid, a little bit of LAR there.
32:55
little bit of LAR there. Um but but yeah, I mean there was a bit of like an industrial complex that that created the the the new high status around the earlier stage founder because it used to be yes it was high status to be like Mark Zuckerberg after the company IPOed
33:11
but before you IPOed people would be asking you like what are you doing like why aren't you working at a at one of the big three consulting firms like you should be at Mckenzie Bane BCG you should be at an investment bank you should be in med school or law school
33:24
and now just being a founder even no matter what the stage even if you're pre-product market fit pre-revenue is like high status and so there are there are some folks who flock to it for those reasons and that's probably the wrong reason but it is odd because you can be
33:39
I mean the the unsaid part here is that she's she's alleging that Larry Ellison is driven by greed I don't know how true that is but it's clearly worked it's clearly worked like he he's created a great company and he's and he's been successful and then uh Jobs is driven idealism and it worked. And so the
33:55
And so the question is like can you be driven by fame and can it work? Like I don't know. We're about to find out.
34:02
Like it feels like the other thing is it's not it's not fun to be famous for being a loser.
34:08
So if you have early fame or attention you have to convert that into success otherwise you know you won't be taken seriously on a on a long enough time horizon.
34:16
So it hasn't really happened before necessarily.
34:19
I mean we've seen famous people start companies that have done quite well.
34:22
We've seen people become celebrities in the process of building their companies more or less.
34:28
Uh I mean I'd put like Palmer Lucky in that category where he's he's kind of become a celebrity on the back.
34:32
Two of the most famous building people in the world are technology entrepreneurs. Donald Trump. Donald Trump.
34:38
Social media network through social crypto entrepreneur as well.
34:41
IPOed his company in almost record time. Yeah. Yeah. And then obviously Elon. Yeah.
34:45
I mean Elon is like a legit celebrity. Yeah. He did SNL. Like that's crazy. I mean Trump did too.
34:52
So, but everyone's a founder.
34:52
Haley Bieber billion dollar outcome, right? Yeah.
34:56
So, I mean, Anna's clearly getting at something real.
35:00
Um, should we read the rest of this?
35:01
Uh, this has become some fas This has some fascinating real world implications.
35:04
The amount of young people who have now been oneshotted by Tik Tok edits of a social network or performative how I got into YC videos are, which I have made.
35:12
I literally made how to get what into YC video.
35:14
I'm I'm probably responsible for a little bit of that oneshotting are growing exponentially.
35:19
uh being a founder implies intelligence, status, risk-taking, wealth.
35:22
So naturally, the cultural shift in startup e in the startup ecosystem has moved from contrarian rule breakers and hackers to the over overachieving STEM kids for whom being a founder is simply the next box to tick.
35:35
Money is not a motivator. It never was.
35:37
What does this mean for VCs?
35:39
They're the most mimetic of the bunch.
35:40
So they'll fund the founder with the most curated credentials, most hype, most viewed product launch videos.
35:46
They'll confuse attention for distribution.
35:47
This also explains why YC 2020 and beyond will go to zero. Hot take.
35:52
Uh they attract this and fund this exact type of founder.
35:54
The emperor has no clothes.
35:56
There will be no cultural cultural defining winners for YC to maintain their prestige into the next decade.
36:01
So then when So then what happens to the builders of this decade?
36:06
That's the trillion dollar question.
36:08
Overly cynical perhaps, but it does reveal a risk that threatens American hedgeimonyy.
36:11
Uh next generation of founders, some tinfoil hat. Yeah.
36:17
idolize Tik Tok and YouTubers.
36:17
Why would this trend reverse?
36:18
Could YC be infiltrated by the CCP?
36:20
It is an under It is an underrated national interest.
36:25
Poison the timelines where artisan century defining American technology companies are nurtured, reinforce the West economic dominance, and it now funds mass manufactured slop instead.
36:32
I I I I think that's a a very odd take because like like yes, like there like like the YC companies do seem to be a little bit more tracked now.
36:40
They're a little bit more on theme with like the AI agent stuff, but you talked to the teal fellowship and like of what the timeline is interested in. Yes. Yes.
36:46
But what I'm saying is that like there are still it it's not that it's not that the the trend followers tracked kids have crowded out the risktakers.
36:55
The risktakers who are there for ideological reasons or some bizarre countercultural reason, they're still starting companies.
37:04
companies. They're just doing it over here in a completely different pocket of the world in a completely different they might be not on X or they might be not the funny thing we didn't have any of the YC hard techch founders from this last batch on the live stream and it's very possible they just didn't want
37:20
attention they're just hacking away right they're like I don't need media right now and that's that's perfectly okay so I don't know why anyway I have the gong because SoftBank Masa plans $1 trillion robotics manufacturing out of the Uh, I'm going to hit the size gong if you want to read through this. Okay. A Okay.
37:36
A US version of China's Shenzhen manufacturing hub.
37:40
Production lines for AI powered industrial robotics.
37:45
Already spoken with Trump admin officials about tax breaks for companies that are investing.
37:49
Seeking partnership with TSMC, but not clear if TSMC is interested. Cenamed Project Crystal. Clearing order inbound.
37:57
Okay, here we should uh we should figure out uh I'm gonna I'm gonna look up and we're going to quiz Tyler now if he's ready. Is he good to go? He's ready. I got a thumbs up.
38:08
Uh I'm I want to ask uh how much money has been invested in Shenzhen.
38:13
I'm trying to talk into the mic but not not give it all away. Yeah. Yeah. Okay.
38:20
So, I am looking this up. Oh, no. I used 03 Pro.
38:25
So, it's gonna be 12 minutes. Damn it.
38:28
Okay, new new new new tab.
38:28
I will have to use 40 for this because I need a quick uh so he's investing 1 trillion, right, to compete with China's Shenzhen manufacturing hub.
38:38
I want to know how close that gets us. Um, wait, this is weird. I don't know.
38:45
Uh, one of 9 billion, more than 25 billion.
38:48
This does not seem right.
38:53
I have some I have some I have some various stats.
38:55
I think it's going to be pretty hard to pin down the exact quiz Tyler on on on this question.
38:59
Um Tyler, uh over since 1980s, how much foreign direct investment has there been in Shenzen? Um let me think here.
39:13
Uh I would say since 1980s, uh over 100 billion.
39:20
Um estimates range from 100 billion to 150 billion.
39:24
Um, and Shenzhen is a major global manufacturing and tech hub. Wow. Okay. Wow. Smart.
39:33
It's actually kind of pretty pretty close.
39:36
I mean, I think that the challenge is actually there's so many ways you could kind of measure this, right? I have a table.
39:41
So, there was about a hundred billion of local funds.
39:46
There was a state and AI robotics fund announced this year.
39:48
There was a there was another semiconductor industry fund announced this year.
39:54
There was uh be up until 2014 there was uh 65 billion of cumulative foreign direct investment.
40:02
Um but but who knows and then and then run rating um you know I guess around 10 billion but also like does this count what Apple is doing right that that's like another you know form of investment.
40:19
Anyways, this might be an answer that clearly I guess got pretty close. It was pretty good. I thought it was good.
40:23
I have I have a follow-up.
40:24
So, um you know, the iPhones made over in China often flown via 747 to America faster than shipping on a cargo ship.
40:35
How many iPhones fit inside of a 747? All right. Uh let me think here.
40:44
I'm gonna say I would say about two to three million in a 747.
40:51
Um you know so okay so 747 max payload is about 140,000 uh kilograms. Okay.
40:56
Each iPhone box is about half a kilogram. Okay.
41:02
Um so I would say you know a practical range of iPhones is probably 1. 5 to 2. 5 per flight.
41:06
Um but obviously it depends on you know packaging pallet cargo layout you know all that kind of stuff. That's pretty good.
41:13
I mean, uh, Chad GBT here has 9.
41:16
6 million, but I think that's including like every inch of the plane, including like the passenger.
41:23
I think that's more accurate, actually.
41:26
I think that might be more accurate. Is clearly goed. It might be.
41:33
We'll have to ask Roy uh who's coming on the show later today.
41:36
Yeah, this is impressive.
41:39
So yeah, the the chat GPT estimate had the usable internal volume as passenger plus cargo and I it feels like you use just the cargo number. Is that correct? Uh I believe yes. I I think so. Okay.
41:51
Oh, I see JBT estimate 9. 6 million. Oh.
41:55
Oh, it's streaming through. Yeah. Yeah.
41:57
So I I was using just the just the cargo. This is fantastic.
42:04
It actually works pretty well. I I'm impressed so far.
42:06
Uh, this is basically young young Jamie from Joe Rogan. Yeah.
42:11
Except you don't even have to look anything up.
42:13
We just get to ask you live. Yeah. Yeah. This is great.
42:16
Um, well, uh, you know, Clo is dealing with a lot of personal data.
42:20
They're going to need to put rigorous compliance right uh, practices in place.
42:24
They're going to need to go to vanta. com.
42:28
Automate compliance, manage risk, prove trust continuously.
42:29
Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation.
42:36
Whether you're pursuing your first framework or managing a complex program, we actually should put Roy in the hot seat and make sure that he is on Vanta because I would be a lot I would be a feel a lot better with, you know, knowing that that Tyler is using Van H clearly in our office if they were on Vanta. For sure.
42:52
Yeah, we'll get them to switch for sure. Fully certified.
42:54
What else is uh what else is in the timeline?
42:58
I like I mean just just kind of another closing out this Masa story.
43:01
It is funny to pull the one, you know, pull the one the one T out of the hat, right?
43:06
He I don't know if he's fully, you know, I definitely don't think he's fully funded the uh the $500 billion project Stargate.
43:14
Uh I'm sure he's sort of making strides towards it, but uh it's great to see that he's uh this long America.
43:22
It feels like he's kind of Masa is kind of the DJ Khaled of the capital markets.
43:26
It's like he's he's pitching a $1 trillion dollar US AI hub to TSMC and Trump.
43:33
And so it could just be TSMC winds up building a massive facility and the government gives some incentives for that and like he's not even he's like investing where it makes sense off of his own balance sheet.
43:46
But it's like a spa promoter kind of, but it's more like he's just he's just connecting the dots between the different pieces of the global economy. He's a power broker.
43:55
He's Yeah, he's he's lubricating the the capital markets, the art of the deal.
43:59
Yeah, I like the name Project.
43:59
Uh Chris, one thing if if capital formation was in the Olympics, Masa would be leading the the Japanese team.
44:08
Yeah, we've we've said that uh it's been said that the Nobel Committee should give a Nobel Prize for capital formation and I think uh Masa should be a front runner. Absolutely.
44:20
Uh, we have a post here from the Supreme Leader of Iran back in 2013. Is this real?
44:27
This this is a gray check mark. So, it's real. Click through.
44:30
I think it's such a wild antiquated posting style.
44:34
You know, like the the hashtag read it.
44:38
He says, "Woman is a flower.
44:41
How evil of a man to treat a flower with violence and without appreciation." #violence against women.
44:46
Uh, and somebody Ahad quotes this and says, "Born to be a lo a lover, forced to be the supreme leader."
44:52
It's a wild posting style. No spaces.
44:55
You don't see You don't see posts like this much anymore. You just don't.
45:00
No spaces after the periods, using a hashtag, throwing in a random date.
45:05
I I don't know what that date's alluding to.
45:07
The 9th, September 18th, 2000.
45:10
Is that like right after 911 or something? I don't know. It's very odd.
45:14
Anyway, uh I like this post by Ben Jarvis Green Ellis.
45:17
He says, "Does the HDMI cord have the most dominant run of any chord ever?" # witness witness.
45:28
I don't know if power cord even counts because of its dominance, but sure it would like but it would sure like a spot on the p podium.
45:34
Power commissioner of the league control says type C is on a brunesque run right now.
45:42
how the goat debate will start in 3 to four years. That's true.
45:44
But the HDMI cord has been around for like 20 years and it's just been reliable.
45:48
And actually, it gets upgraded pretty regularly, but they don't need to change the actual shape of it, so you don't notice.
45:55
It's not not nearly as annoying, but it's gone from, you know, it can it can do HD high definitioninition video to now it can do 4K, 8K, you can do power over HDMI, you can do all these different things.
46:05
Big fan of HDMI CEC over here.
46:08
Are you familiar with this?
46:09
HDMI CEC lets you plug an HDMI cable into into a TV and then control the TV from the device that's connected over the HDMI.
46:17
So you can go to the Apple TV.
46:20
And when you turn on the Apple TV, the Apple TV can send a signal to the real TV. Yeah.
46:24
Over HDMI CC and say, "Hey, turn on."
46:27
Or and switch the channel.
46:27
So it just makes it a lot easier to to actually like control the end point and for the communication to happen. It's pretty cool.
46:34
We have more breaking news.
46:37
Nvidia to drop humanoid robots that will produce Nvidia GB300 chips in Q1 of 2026. Nick says wholly based.
46:42
That is so Nvidia Foxcon in talks to deploy humanoid robots at Houston AI server making plant.
46:52
Wow, that is extremely I don't totally understand this. What does that mean?
46:57
I guess Fox Foxcon has been training the robots to pick and place objects and insert cables.
47:00
Yeah, I don't know if this is marketing.
47:04
It feels like we've had we've we've asked a bunch of robotics experts about humanoids and so far I haven't got a I I don't have the confidence that that this is actually a super great use case for them.
47:22
It's just the definition of like what is humanoid because you go to a you go to like a Ford F1 Vic F-150 factory and they have like massive robotic arms like moving windshields around, right?
47:31
Like it's like you could anthropomorphize that by like spray painting it pink and putting some hair on the on the hand and being like it's a it's a humanoid now, you know?
47:41
But like you could like retrofit more bicep definition. Totally.
47:46
I mean like like Amazon has like tons of robots sliding around.
47:52
You could put googly eyes on them and be like they're humanoids now and and you get maybe get like a stock bump, but like there's clearly things that are happening in the AI server assembly process that are using robotics obviously whether it's even just like conveyor belts or or you know the the three axis pick and place you know pick it up put it over here that type of stuff.
48:14
just going to humanoids is just it's like well will it have five fingers or will it have a just a grabber?
48:19
Will it have legs or will it have wheels?
48:23
Like it could just be sitting there because for a lot of these pick and place jobs you can just have the the humanoid sit there with a single arm mounted to the ground because the stuff comes to it and so then you're just kind of in a okay we're in the arm business now.
48:37
Um, it feels it feels like it's a little bit wrapped in marketing lingo, but still cool that more companies are making humanoids because, uh, it does seem like a cool form factor that hopefully people will break through and get there.
48:48
And this seems like, you know, a step in the right direction in the sense that it's a very defined task.
48:52
I think when people think humanoids, they think some like my new touring test is is humanoid robotics will will be here and when they can put up a six-minute nurburggering time in a manual. Yeah. Gated manual. In a gated manual.
49:13
Uh because at that point the they have to not just be a self-driving car but they have to be able to you know negotiate the uh the the wheel and the stick shift so so efficiently and so quickly that they are truly performing. Yeah.
49:31
And a manual and a manual can be weirdly like probable probabilistic, right?
49:35
And that like you're like you know you can move the synthesize a lot of data. Yeah.
49:39
It's not it's not like you know Yeah. perfect system, right?
49:43
You're not going to You're not going to put up a sub seven minute nurburggering time with a Joe Biden walk. That's right.
49:49
You're going to have to be moving fast.
49:51
Those actuators are going to have to be That's right. high speed.
49:52
Um so yeah, I I I don't know where all this goes, but uh I mean exciting to see that they're that they're at least doing work on it because it seems like an important it's it's clearly an important path in the tech tree.
50:06
We don't know how relevant it is to other to other formats but uh cool to see a lot of money pouring into the sector from very big companies.
50:15
So Foxcon will be announcing their robots in November and then deploying them shortly after. Yeah. In our year 2026.
50:23
I mean Foxcon seems like the right builder for this.
50:25
Uh Unitry is is already like feels like it's scaling up to the point where like Unree robots should be usable in certain locations.
50:34
like they're not generalizable yet, but they're certainly if you train them on a specific task, they could do that task over and over and over again.
50:39
Uh the question is just like like you know, do you need five fingers, 10 fingers, 10 toes?
50:46
Is that is that really like the right form factor or or should we do be just doing things that are more specified?
50:51
Uh because if you're if you're if the whole point of these human robots is just AI server making, just assembly, just one one spot on the manufacturing line, could probably be a much more specialized robot.
51:01
But we'll be cool to see.
51:03
I'm sure we'll see a lot of viral videos about it. It'll be very cool.
51:06
I invested in a company making uh robots for data centers. Oh, yeah.
51:10
And they intentionally uh chose not to make it humanoid form factor. Yeah.
51:17
Which and I think a lot of those the the reason behind uh that decision would also transfer to manufacturing setting, right?
51:25
Which is like do you need legs if you can use wheels?
51:29
data centers have the the most perfectly polished floors with like no dust at all.
51:33
Like it's it's the the perfect environment for a wheeled use case.
51:37
At the same time, you probably need to have a very specific actuator for like unplugging and plugging the cable back in, right?
51:42
And that's actually like it's pretty hard to reach around the back of a computer and and unplug an Ethernet cable.
51:47
And obviously the server racks are like designed to be worked on more, but still even the cabling is like very detailed work.
51:53
And so if that's what they're trying to do, um, uh, you probably need a specific actuator for that. Yeah.
51:59
Anyway, at Boring Biz says, "Today I learned that Meta's CFO and CRO share the same corporate and personal budget." Fun.
52:06
Uh, so Meta's chief financial officer, Susan Lee, is married to the company's chief revenue officer, John Hedgeman. Yeah, that's amazing. Pretty cool.
52:17
Just topline and bottom line handled by the same family. Yep. It's amazing. CFO, GF, CRO, BF. That's great. Very cool.
52:25
Um, well, if he's the uh chief revenue officer, you got to get on Adio, customer relationship magic.
52:34
Adio is the AI native CRM and scales and grows your company to the next level. Get on adio. com. atio. com. Check them out. Uh, let's go to Arvin.
52:48
He says, I find the story of AI and radiology fascinating.
52:50
Of course, Hinton's prediction was wrong with a star.
52:54
Jeffrey Hinton famously predicted like stop training radiologists.
52:56
All radiologists do in his estimation was look at images of potential cancer spots which computer vision could do better.
53:07
Um, but that didn't happen and there's still radiologists have jobs and so what's going on?
53:13
And so Arvin says tech advances don't automatically and straightforwardly cause job displacement.
53:19
That's not the interesting part though.
53:21
Radiology has embraced AI enthusiastically and the labor force is growing nonetheless.
53:26
The augmentation not automation effect of AI is despite the fact that as far as I can tell there is no identified task at which human radiologists beat AI.
53:36
So maybe the jobs are bundles of tasks model in labor economics is incomplete.
53:41
Paraphrasing something Mel Mitchell pointed out to me, if you define jobs in terms of tasks, maybe you're actually defining away the most nuanced and hardest to automate aspects of jobs, which are the boundaries between tasks.
53:53
Can you break up your own job into a set of well-defined tasks such that if each of them is automated, your job as a whole can be automated?
54:02
I spe I suspect that most people will say no.
54:04
But when we think about star other people's jobs that we don't understand as well as our own, the task model seems plausible because we don't appreciate all the nuances.
54:16
If this is correct, it is irrelevant how good AI gets at taskbased capability benchmarks.
54:21
If you need to specify things precisely enough to be amendable to benchmarking, you will necessarily miss the fact that the lack of precise specification is often what makes jobs messy and complex in the first place.
54:34
So benchmarks can tell us very little about automation versus augmentation. And this is the star.
54:41
Hinton insists that he was directionally correct but merely wrong in terms of timing.
54:45
This is a classic Mottton Bailey retreat of forecasters who get it wrong.
54:49
It has the benefit of being unfalsifiable.
54:51
It's always possible to claim that we simply haven't waited long enough for the claimed prediction to come true. Interesting.
54:57
And this is from a New York Times article.
54:59
Your AI radiologist will not be with you soon.
55:04
Experts predicted that artificial intelligence would steal radiology jobs, but at the Mayo Clinic, the technology has been more friend than foe.
55:09
And Andre Karpathy chimes in.
55:12
He says, "Very interesting to think about.
55:14
Job equals bundle of tasks plus glue."
55:19
probably a bunch of other variables involved.
55:21
Eg the number of tasks, how long each task is, eg met like notion of task length roughly equals difficulty, how contextual it is, how high how high reliability it needs, uh whether it can be done fully digitally, not sure what the state-of-the-art is in trying to think this through and chart the impact of AI on labor markets so far. Eg.
55:41
I was curious to look for radiologists.
55:43
And if I'm getting this right, the US Bureau of Labor Statistics cites 29,530 US radiologists in 2021 and then up to, and let's go to Tyler.
55:55
How many radiologists does the US Bureau of Labor Statistics claim there have been in 2023? Uh, okay.
56:05
Come back to me in 30 seconds. Okay, we'll be back.
56:11
I think he's actually I think he's working.
56:12
And so when I just when I just hit him with random questions, it's not quite He's not in the Zoom. So Cle's not running. Oh, okay. Okay. He's not in the Zoom. Okay.
56:22
Well, yeah, that was your first mistake, Tyler. Yeah. Always keep Cle. Always keep Cle.
56:27
Does Cluey have the ability to to just prompt it directly or or or do you have to be on a Zoom?
56:33
No, you don't have to be on Zoom.
56:35
You can do it on So on the website, you can just prompt it.
56:36
It looks like almost just like the chatbt interface. Sure.
56:39
But you can also just pull audio like um just from in person.
56:43
Like if I was sitting across from you, it'd be fine.
56:45
I'm not sure it'll be able to hear you from in the car. Yeah. Yeah. Yeah.
56:49
But it doesn't have that.
56:49
I'll get back on the Zoom. Okay.
56:50
Well, we'll come back to you with that.
56:52
The audience will have to wait to find out how many radiologists we have.
56:57
Everyone's waiting with baited breath. Everyone wants to know.
57:01
Um well, let's tell you about Linear.
57:04
Linear is a purpose-built tool for planning and building products. Meet the streamline.
57:07
Meet the system for modern software development.
57:09
Streamline issues, projects, and product road maps.
57:13
Uh if you're building cluey, get on linear.
57:15
Uh Nikita Deir builds customer list looks like a tier one venture firms portfolio page. Got ramp openai. Wow.
57:25
Cursor runway perplexity.
57:25
I normally make the joke of like the next when we talk to Sam Alman, we're going to pitch him linear, but it's like oh too late. Wow. Boom is on there too. That's cool.
57:37
I you I always make jokes about like using linear for other stuff and you're like no it's just for software and look at boom they're using it for everything. It's fantastic. Yeah.
57:45
Uh anyway let's uh Tyler uh the question radiologist expert we're interviewing you for a job as a data analyst you know covering radiology. Yes.
57:55
So the question is, how many uh how many radiologists does the US Bureau of Labor Statistics claim exist in the United States in 2023? Let me think about this. I'm noticing tell.
58:12
I'm going to estimate maybe 31 to 34,000 radiologists at least from at least from 2023, I would say.
58:21
But yeah, that that's my best guess. It's your best guess. 31,960. I think you got the job. He might be goated. GD.
58:33
Okay, I have another question for you. Pop quiz.
58:37
Off the top of your head, what's the GDP of India?
58:44
Off the top of my head, let's see. Um, I'm gonna say 3. 7 trillion.
58:46
Well, it's really it really sells it that you that you're touching your face.
58:52
So, I can tell that your hands aren't on the keyboard.
58:55
You can tell that I'm thinking. Yeah. Yeah.
58:56
You're you're just thinking about it. Yeah.
58:57
You got to be a good actor.
58:59
Uh but maybe that's why Clue is so focused on the social media influencers because they have a little bit of acting in them and so they're able to h this is going to be the modern tale. No, it's good. Okay.
59:10
Rather, you're a great actor and Cluey might actually or maybe he's not using Cluey and he just knows all this stuff off the top of his head. It's very possible.
59:17
Switching gears, Nikita Beer has a post here.
59:20
He says, "The most important lesson I ever learned about dealmaking was the line Dick Costello told me, "Every great deal dies three deaths.
59:27
Once you understand that, you will be emotionally prepared for each crisis." I like that.
59:31
Nikita's done his fair share of deals. Yeah.
59:35
So, I want to get Dick on the show.
59:37
Be great to to to hear about his whole uh journey.
59:42
You know that you know that famous like first tweet that he posted?
59:45
So he he joined Twitter and he posted you know immediately the culture was like very jokey and so he posted this joke tweet like day one as I think he was like maybe chief he wasn't Adam Bane was the chief re revenue officer he was someone in the executive suite he was
1:00:01
like day one on the job like my mission like become the CEO it was like you know like backstab the CEO become the CEO and he was like joking about it and then he actually became the CEO that's amazing and so so it was like he was kind of like calling calling a shot, but not really. But then he just got like put in
1:00:16
But then he just got like put in the job and I think he had had a good run.
1:00:20
Um oh just a wild story with with the arc of Twitter and Axe, like one of the most fascinating tech companies. Uh and it's true.
1:00:27
Every great deal dies three deaths.
1:00:29
This is this ties to that idea of like you'll meet your acquirer like years before you get a deal done.
1:00:35
Um like you need to be ready for for the highs and lows and this is just the nature of entrepreneurship.
1:00:39
But uh some lessons need to be learned the hard way.
1:00:42
I don't think that you can just read this and and internalize it.
1:00:44
I think that like you have to go on the emotional roller coaster uh before.
1:00:51
I think it's good for people to understand that you can be on the path to getting a deal done and there can still be major crises that happen along the way. Yeah.
1:01:00
Whether it's a major investment, acquisition, partnership, etc. , you know. Yeah.
1:01:04
I just think I just think that's like that's something like unique about entrepreneurship is this idea of like the emotional roller coaster, the high highs and the low lows.
1:01:13
Like it's it's just it's a higher variability job than anything else.
1:01:16
And because you just feel all the sways and all the swings of the of what's going on in the business and there's always something that's good, there's always something that's bad, but you internalize it so much more as the founder. I don't know. Yeah.
1:01:32
Uh anyway, Sarah Guo, friend of the show, says the AI leaprog effect is quietly transforming sectors historically slow to adop adopt technology, legal, healthcare, logistics.
1:01:43
We've been seeing a ton of startups in those categories uh come through the show with often massive fundraising rounds to announce.
1:01:50
Uh they're not merely catching up, they're vaulting ahead.
1:01:53
Traditionally, automation in these industries is blocked by high barriers, expensive software, difficult integrations, ambiguous ROI.
1:02:00
The business math m rarely worked.
1:02:02
Large language models, code generation, MCP and computer use agents have fundamentally shifted the economics.
1:02:08
Suddenly automation is affordable, fast and obviously valuable.
1:02:13
Examples emerging everywhere.
1:02:13
Harvey in legal, latent health and and open evidence in healthcare, solar AI in logistics. Haven't talked to them.
1:02:19
Uh would be interested to get to know them.
1:02:23
Uh each providing rapid tangible productivity gains.
1:02:25
Crucially, every industry, even the slowest, is filled with motivated, tech- hungry end users ready to drive adoption.
1:02:32
Founders who overlook these sectors risk missing something of the decade's best opportunities.
1:02:38
What other areas with prior with poor priors deserve another look? Insurance, education.
1:02:42
Oh, she's on the hunt for the next Harvey. She wants vertical SAS. She's looking for ideas. On the hunt. She's on the hunt. Love it. I don't know.
1:02:52
Do you have anything on the top top of your mind?
1:02:53
Uh, I thought Crosby, who we had on the show earlier this week, was an interesting approach, not just creating software or a co-pilot for lawyers, but actually just delivering the end service.
1:03:04
So, I'm excited to see more companies like that that are truly that are AI native, but they're actually firms doing the work that legacy law firms used to do.
1:03:12
Yeah, I I think there might be something like the like when you think about insurance and education like those are also like massive industries like legal, healthcare, logistics, insurance, education.
1:03:26
There's something interesting going on that I want to dig into deeper around these like incredibly niche industries.
1:03:32
I talked to an investor this morning who does uh growth equity deals and often and some control deals as well in much smaller markets where there's there's there's it's easier to underwrite to a 2x but it's harder to underwrite to 100x.
1:03:46
So less in like the venture moonshot category um more in the traditional PE but still with like a venture lens um and and with like a tech focused lens.
1:03:56
And so one of the examples he gave me was a company that does software for the chamber for chambers of commerce.
1:04:04
So like if you're if you're if you every city has like a chamber of commerce and it's like how that would appear on no market maps like I've never heard I've never even considered that as a as an idea of a market and yet there's someone who clearly got the idea you know years ago probably from directly interfacing with the chamber of commerce.
1:04:24
It's like the D DMV DMV DMV software.
1:04:26
It's probably going to be a business there.
1:04:28
It's like Palunteer for the DMV is probably going to be a category.
1:04:31
Now, is it going to be a hundred million dollar business? No.
1:04:33
Is it going to be appropriate for for Sarah at Conviction and and you know like a true venture fund? Maybe not.
1:04:42
What is the what what are the operating annual operating budgets of every DMV in the country combined? Tyler, totally. Do you have the answer? I have no idea. I have no idea.
1:04:56
I'll I'll I'll You'll do your work.
1:04:58
This is just the battle of the of the LLMs right now.
1:05:03
This is the true benchmark. This is the future.
1:05:05
This is This is the future.
1:05:08
What being a golden retriever is all about. Yeah.
1:05:09
Just sitting around chatting with chat GPT and clearly.
1:05:12
Um yeah, let let's find out how big of a market is DMV budgets.
1:05:21
Wait, what was the number?
1:05:21
How much is spent on all the DMVs in America in a year?
1:05:25
What's the annual budget of all the DMVs in America combined? How much do they spend?
1:05:29
Because a lot of that's probably on personnel, but maybe we can automate some of that away. Is that the idea? Yeah. Okay. So, we're we're racing.
1:05:38
Tyler, do we have a number?
1:05:42
We're I I think you're on mute. Technical difficulties. Hit the mute button.
1:05:46
Well, look, I'll I'll give you the California DMV is 1. 5 billion a year. talent for DMVs.
1:05:51
You get in there, you start Yeah. start shaking things up. Take 10% of that.
1:05:56
You do that a couple more times, you get a couple hundred million dollar revenue business. Not bad.
1:06:01
Anyways, Tyler, you're you're free to do some real work now.
1:06:05
So, we will come back to you later.
1:06:08
Kevin Wheel uh of OpenAI, chief products officer over there, friend of the show, says, "And remember, the AI model you're using today are the worst AI models you'll use for the rest of your life.
1:06:21
And uh in the last Andre from Andre said in the last 35 days, OpenAI codeex has merged 34 345,000 PRs in GitHub AI is eating software engineering.
1:06:35
So uh cool to see that's so many compared to the other coding agents. That's so so many. Wow.
1:06:47
They really scaled that fast.
1:06:47
I wonder what's going on there because GitHub Copilot is at is at 10,000 merged PRs.
1:06:56
Codeex is at 345,000 merged PRs.
1:07:00
Cursor Agents is at 1,000.
1:07:00
Devon's at almost 20,000. And Codegen is at 1,600.
1:07:08
And the success rate is also the highest with OpenAI codeex.
1:07:10
I wonder I wonder what the what the base use case for OpenAI Codex is.
1:07:15
I mean, I imagine that um maybe the roll out was just a lot more aggressive because OpenAI for Teams was already installed with a lot of a lot of workplaces.
1:07:24
I think this probably comes down to distribution. Yeah.
1:07:28
More than even product quality.
1:07:30
Um you talking I'm firing up.
1:07:38
How many million uh millions of software engineers already use chatbt?
1:07:40
So like why not just fire this off and see how it works?
1:07:44
Switch over and try it out. But man, results crazy.
1:07:46
I mean, good for good for Devon for, you know, uh, being, you know, strong second place.
1:07:52
Strong second place there and and above GitHub Copilot, which we know is is doing something like half a billion dollars in revenue. Yeah.
1:07:59
Not not every PR is created equally, too.
1:08:01
It is interesting to understand like yeah, what is the nature of these PRs?
1:08:05
is um I mean I have some like PRs on like crazy projects just because I would go around and just do like little like you know oh tweak the documentation or basically like writing English but in a really powerful project and then I'd be like a contributor.
1:08:21
This is like a classic thing to be like to like build your software engineer resume is like yeah like I'm a contributor to like Linux Ethereum and Ethereum or something and you went in and like fixed like one test case or something like just did something very very basic.
1:08:34
Um, but I mean like there's got to be some crazy stuff in there.
1:08:39
So I imagine that there's a really wide variety of those uh, you know, 34 uh, 345,000 PRs.
1:08:43
We got to hit the gong for Kevin. This is fantastic. Hit it. I'll hit it. Yeah, you you hit it. You hit it big.
1:08:50
Kevin, congratulations to the OpenAI team.
1:08:59
[Music] Two hands that time.
1:09:01
Maybe on Monday we can get Tyler to do a review of OpenAI codeex.
1:09:06
That would be interesting.
1:09:06
I want to know how Tyler reviews that.
1:09:11
You got something for us. This shot's amazing.
1:09:14
[Music] Technical difficulties. Back to the timeline.
1:09:19
Max Meyer says, "I regret to inform you that the outrageously priced Apple Studio Display is the best monitor I have ever owned and it isn't close. Now I can't go back. I agree."
1:09:27
You've used one of these? Yes.
1:09:29
I've never used one of these.
1:09:32
Isn't Is that Is that not what we have right here? No, no, no, no, no, no.
1:09:36
So, those are uh Wait, wait, wait, wait.
1:09:39
So, he's This is interesting because he's using the wrong term, I think.
1:09:44
So, the Apple Studio Display, yes, that's the one we have, but it's the Apple Pro Display XDR that's the outrageously priced one.
1:09:52
I wonder which one he's talking about because Apple has two.
1:09:56
the the the studio display is like kind of expensive, but it's like 1,500 bucks.
1:10:02
The Apple I mean, the Pro XDR is 5K.
1:10:05
Yeah, that's the one that I think of as like extremely expensive.
1:10:07
And and it's also weird because it's like a decade old at this point, but and they haven't fantastic, but it's still You have the Pro Display XDR, right?
1:10:17
It has like the the cheese grater in the back, right? Yeah.
1:10:21
That and and that one's that one's known to be amazing.
1:10:23
What's interesting is that they just haven't revised it.
1:10:26
I I would have expected them to be like now it's 8K, now it's even better.
1:10:30
Like they just they they just kind of nailed it out of the gate and people are still posting videos like you know like 5 years later just make a television. I know. I know.
1:10:38
Just scale it up like the technology like I I was I was at a soccer game yesterday and there was an ad for a high sense TV that's 100 inches and I'm pretty sure it's like a couple grand. How much is that?
1:10:49
Uh maybe we should ask Tyler, but we'll see.
1:10:51
Tyler Tyler needs to use Cluey to figure out I think we got a feedback loop here. Can we hear you?
1:11:00
How much is the High Sense 100 inch TV cost? High sense. Um, let me think.
1:11:08
I'm going to say typically I would say around $3 to $5,000.
1:11:15
Obviously price varies by region and model. Okay. This sounds so natural. This sounds so natural. Oh, 100 inch. Yeah. Yeah.
1:11:25
I I I think Apple should do it. Do it. It'd be great, Tim. Do it.
1:11:31
100 inches would be a good a good like, you know, differentiator, too, because a lot of brands, you know, the 55, 65, 75, it's gotten all confusing.
1:11:37
It was just like, you know, if you're going with Apple, you're getting 100 inch TV.
1:11:40
But yeah, and it's like and it's just amazing amazing quality.
1:11:45
Anyway, Daresh has a post.
1:11:45
People underrate how big a bottleneck inference compute will be, especially if you have short timelines.
1:11:51
There's currently about 10 million H100 equivalents in the world.
1:11:54
By some estimates, human the human brain has the same flops as an H100.
1:11:59
So even if we could train an AGI that is as inference efficient as humans, we couldn't sustain a very large population of AIS.
1:12:06
Not to mention that a large fraction of AI compute will continue to be used for training, not inference.
1:12:11
And while AI compute has been growing 2. 25x 25x so far.
1:12:14
By 2028, you'd be pushed uh you'd be pushed against TSMC's overall wafer production limits, which grows 1.
1:12:21
25x according to AI 2027 compute forecast.
1:12:27
Pretty interesting uh chart we have here.
1:12:30
But uh yeah, I mean my uh my volume rocker got screenshotted in here by accident.
1:12:38
I guess I must have been adjusting the volume. Um, cue the O Leonard. Uh, laser eyes meme. Uh, I don't know.
1:12:47
Yeah, people have been debating this back and forth in our group chat about like, are we going to be energy constrained?
1:12:51
Are we going to be are data centers being overbuilt?
1:12:53
Are we going to be GPU constrained or are we going to be idea constrained as Mike put it yesterday?
1:12:59
Uh, and uh, I I I don't know.
1:13:03
I I keep going back to the Ray Kerszswwell timelines.
1:13:05
Like Ray Kurszswwell has the singularity uh, at possible to be inference compute constrained but not and still be and still not have the ideas that get us to super intelligence or or AGI depending on your definition. Yeah.
1:13:21
So, so he said uh Kerszswwell says AGI by 2029 that AI will reach a level of general intelligence comparable to humans by 2029 which four years from now with like just different agents and reinforcement learning on different tasks like that feels like we're we're kind of in the AGI era now and that 2029 feels reasonable.
1:13:48
reasonable. uh he says technological singularity in 2045 where AI surpasses human intelligence in all aspects leading to a merging of human and machine intelligence and when you think about 2045 that feels like I don't know it just feels much more
1:14:04
reasonable and yet it is like a crazy crazy stat because 2045 is well within our well within our lifetimes um and so that that is the point where there will be enough H100 equivalents in the world to be more powerful and smarter or in theory smarter than all of humans. So
1:14:20
So like the machines will outnumber the humans and at that point uh he he describes like uh it is extremely hard to predict what happens then.
1:14:28
But I don't know it's interesting.
1:14:30
We'll have to dig into it.
1:14:31
Obviously uh it has you know immediate impacts in you know NVIDIA market cap hyperscaler market cap what's what's happening at the early stage what's happening where the opportunity is in the neo clouds all these different things.
1:14:43
There's all these like micro transactions that that happen on a week toe or month-to-month or day-to-day basis with this backdrop of like massive change coming in maybe a few years, maybe a few decades.
1:14:55
Uh you skip this one post, but now anthropic uh co-founders saying we will have super intelligence by 2028 or or I think that was like that was at least the question.
1:15:06
Um and so the number keeps sliding around and the definitions keep changing.
1:15:09
We used to be in AGI now we're in super intelligence world.
1:15:11
Um, but it it's this weird thing where like the hype is growing and changing and kind of dodging around, but also the tools are really cool and we're getting a lot of value out of them.
1:15:23
So, like you you can't be entirely bearish, but there's still like a lot of a lot of uh like weasel words being used, I suppose, is the term.
1:15:33
Anyway, uh did you see moving on?
1:15:36
We have a post from Justin Quan.
1:15:36
He says, "We're using stock market P&L as an LLM eval.
1:15:43
Now, what happens if you give each model 100K in a Bloomberg terminal?
1:15:47
We're tracking the results on LM PNL, a public leaderboard."
1:15:49
So, this was launched yesterday.
1:15:53
I don't think they have uh posted any results yet, but I wanted to flag it because I'm excited to follow along.
1:15:59
And this seems like something we would task Tyler with of saying like, "Hey, make chat GBT day trade for you. See how it does."
1:16:06
Um, Anand Sunwal says he talked to a friend at KPMG.
1:16:13
She said they're dramatically reducing fresh grad hiring because AI does it faster, better already, gradually, and then suddenly.
1:16:22
Uh, and anyways, thought this was an interesting uh anecdote and something that I'm sure will start showing up in the data.
1:16:33
And uh we have a post here from Do we know where he got the money from?
1:16:37
Because did he raise money for this?
1:16:39
Because I feel like 100K for each model like there's a new model every day. You're quick. Also 100K feels high.
1:16:47
There's some breaking news.
1:16:47
We got some breaking news.
1:16:48
We got the breaking news.
1:16:50
And Horowitz has invested in Cluey.
1:16:50
This was alluded to on the timeline.
1:16:54
There were some rumors floating around.
1:16:57
Brian Kim has led an investment in Cluey, a series A.
1:17:02
He says, "What if breaking the rules was the unlock?
1:17:04
We're excited to announce our investment in Cluey, an AI powered desktop assistant that delivers real-time support during everyday moments, whether meetings, customer support calls.
1:17:12
If you're live, if you're an intern live on TBPN, project brainstorming sessions or collaborative tasks.
1:17:18
You've almost certainly heard of Clue's founder, Roy Lee, the mind behind viral stunts like Interview Coder, hiring 50 interns to fuel Cul's content engine, and his infamous exit from Columbia University.
1:17:29
While Royy's bold approach may seem outwardly controversial, behind the scenes, his moves are rooted in deliberate strategy and intentionality.
1:17:37
So, we will have on Brian Kim and Roy Lee uh later on today's show, and I'm excited for them to break this down.
1:17:46
So, the rumors were true. It was pretty funny.
1:17:48
There was there was an account that baited Arurer Rock in the DMs to confirm it. Yeah.
1:17:52
Uh, he said he made a deal or something.
1:17:58
Apparently, Arerford had made a deal with Roy not to leak it or something like that.
1:18:01
I feel like that's like what Roy would want.
1:18:03
I feel like he would love a leak.
1:18:04
I feel like he wants like, you know, the virality and the attention for it.
1:18:08
And he's clearly very intentional, right?
1:18:10
It's possible he had he had different plans for it.
1:18:11
I mean, if they if they drop those insane they dropped a new video. Yeah. You have to imagine it.
1:18:17
We'll have to pull it up.
1:18:18
We'll pull it up when he's coming on later. Raj Vir has a post. He says, "Sam is right.
1:18:22
Paying a hundred million for top talent destroys your culture.
1:18:24
It's not how you attract the best people."
1:18:28
And he shows a picture of open AI unites with Johnny Ivan $6.
1:18:31
5 million deal to create AI devices.
1:18:34
So, putting Sam in the truth zone, but um uh there's, you know, narrative warfare happening right now, right?
1:18:45
Well, we've talked about it before.
1:18:45
Uh, lots of folks on Wall Street also pulling in hundred million dollar paydays.
1:18:51
If you are trying to set yourself up for a career in finance or high finance, get on public.
1:18:55
com investing for those who take it seriously.
1:18:59
They got multiasset investing industry.
1:19:00
They're trusted by millions.
1:19:04
Um, what else is in here?
1:19:06
Uh, why don't we sell hurricane names?
1:19:09
It's free money for Noah.
1:19:11
I want to see headlines like Hurricane Capital One decimates Gulf Coast.
1:19:17
Hurricane Eric makes landfall. This is hilarious. Wow. 89,000 likes.
1:19:24
That's like obviously it's because it's a really bad thing.
1:19:26
You don't want your brand associated with destruction.
1:19:28
But maybe like they could do something with like the WWE or something like you know hurricane like Yeah, you could see Iran sponsoring a hurricane that was causing widespread destruction in the US but then seems like there'd be a conflict.
1:19:46
Hurricane Gravedigger is but it's still bad.
1:19:48
It's still just sad and like negative. I don't know. It's a very funny idea.
1:19:52
But haters should sponsor hurricanes.
1:19:54
You know going at one of your enemies. Yeah.
1:19:57
If you're taking out a short on a on a on a big company, name a hurricane because that would be really if if a hurricane was coming or a fire was coming towards your home and your your enemy had paid to name it after themselves, that would really hurt.
1:20:11
That would, you know, that would get you. Yep.
1:20:14
You'd be got uh I I I say I say bail on the on the selling of hurricane names.
1:20:19
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1:20:22
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1:20:34
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1:20:34
Um, we're going to have Wade Foster on the show soon.
1:20:39
Uh, Matthew Prince over Cloudflare says, "I did in fact say this quote, I go to war every single day with the Chinese government, the Russian government, the Iranians, the North Koreans, probably Americans, the Israelis, all of them who are trying to hack into our customers sites.
1:20:52
And you're telling me I can't stop some nerd with a CC corp in PaloAlto? Shots fired.
1:21:01
Publishers facing existential threat from AI. Interesting.
1:21:06
Uh yeah, he's he's duking it out.
1:21:08
I mean, Cloudflare is the front.
1:21:10
It's the CDN for the internet and so obviously there's a lot of attacks that that happen and they have to fight them all off. Very fun.
1:21:15
Uh we have some news from uh HFZ.
1:21:17
Uh what how would you describe HFZ?
1:21:20
incubator accelerator batchled startup investment vehicle hacker house we'll let Dave Dave is going to pop on the show later today great to talk about it but they had a new batch uh this re they call it the moonshot batch so they have people doing thought a new longevity lab and then a team that's uh 3D uh printing drones in these tiny tiny microactories that that is lining up a bunch of contracts so excited to check that Very cool.
1:21:51
Microsoft plans to cut thousands more employees.
1:21:53
Company's layoffs are expected around start of July and will target sales and other departments.
1:22:00
Absolutely brutal when these things leak.
1:22:02
I feel bad for the employees that have to, you know, spend the next couple weeks waiting around to see if they get to keep their job.
1:22:10
But, uh, ultimately, this is the kind of thing that Microsoft does routinely.
1:22:16
They had another layoff earlier this year and it shouldn't really be a huge surprise to everyone.
1:22:20
This is effectively part of their corporate strategy.
1:22:24
So the number of cuts isn't final yet and they are planned for around the beginning of Microsoft's new fiscal year which starts in July.
1:22:30
They said the latest round of layoffs came come on comes on top of the roughly 6,000 roles the company eliminated in May across product and software development roles around the world.
1:22:41
Bloomberg earlier reported on the planned summer layoffs.
1:22:43
Companies ranging from retailers to pharmaceuticals have begun drawing up plans to consolidate positions looking to do more with leaner stabs relying on technology for additional tasks.
1:22:52
Andy Jasse said the company planned to reduce its workforce in the coming years because of increasing use of artificial intelligence will eliminate the need for certain roles.
1:23:01
I mean you have to imagine that like you could almost have the same narrative at Microsoft just around SAS, right?
1:23:07
It's like, you know, if you have, you know, a massive organization that's just, you know, I don't know, categorizing paper receipts or something like like when software becomes more available, you can you can shift those resources around.
1:23:19
Um, but uh Microsoft had about 228,000 employees at the end of its last fiscal year with roughly 45,000 of them in sales and marketing.
1:23:32
That's a huge organization.
1:23:32
I mean, the with the holiday parties held at the the Rose Bowl or something, how do you even get everyone together? I I don't know.
1:23:40
How do you get out for like a happy hour or movie night? It's it's impossible.
1:23:44
Uh Microsoft eliminated 10,000 jobs in January 2023, retrenching after a pandemic driven hiring frenzy by many tech companies.
1:23:52
The company also made cuts to its video game division last year after closing its acqu its acquisition of Activision Blizzard.
1:23:58
Uh we continue to focus on building high performing teams and increasing our agility by reducing layers. Oh man, layers. That's a whole thing.
1:24:08
You know what about layering? Have you heard of this?
1:24:10
Like how many layers are you from the CEO?
1:24:12
You try and track yourself.
1:24:14
Like I report to someone who reports to someone who reports to someone who reports to someone who reports to someone who reports to the CEO.
1:24:18
So I'm like eight layers deep.
1:24:19
And there's whole businesses.
1:24:21
Um that's the number of people that you have to backstab in order to get to the point where you can actually backstab the CEO and take the top spot. Exactly.
1:24:28
Well, we have some breaking news.
1:24:32
As of 25 minutes ago, the Financial Times is reporting that Mera Marott's Thinking Machines Lab valued at 10 billion after new $2 billion fund raise, the six-month-old secretive AI startup is uh in one of the largest initial funding rounds in Silicon Valley history.
1:24:50
So, I think this would been rumored for a while.
1:24:52
Um, but uh it's good to see it finally closing. Okay.
1:24:55
uh was one of the is one of the largest seed rounds in SV history.
1:25:01
SFbased Thinking Machines Lab has not declared what it is working on.
1:25:07
Instead, using Marott's name and reputation to attract investors, said those familiar with the fundra.
1:25:13
So, uh I thought you were going to say there was like an acquisition or something like this is like the least dramatic breaking news I've ever heard.
1:25:18
It's still breaking, John. It is breaking news. Breaking news.
1:25:22
Uh how much did they raise?
1:25:23
And it is funny because with the all the different billions of dollars being thrown around right now, this is you're not even you don't even get excited about a $2 billion seed round.
1:25:33
Oh, I'm gonna get excited.
1:25:33
I'm going to get excited.
1:25:35
I'm going to get This one is for There we go.
1:25:39
Wow, that had a good ring to it.
1:25:42
I think it's going back there into Tyler's microphone, maybe.
1:25:43
Does he still have the window down? Yeah, he does.
1:25:48
I can't see him because we're completely blocked by the gong.
1:25:49
We're going to have to rearrange this whole thing.
1:25:51
and Horwitz led the round with participation from Sarah Guo's conviction partners. Very cool.
1:25:55
Dylan Patel is like obsessed with this company and and keep singing the praises of like who they're adding to the team.
1:26:02
Like pretty rough for thinking machines to announce their seed round on the from Andre.
1:26:08
Not even announce it, have it leak on the same day that Cle is raising a series a series.
1:26:13
So really overshadowing the sort of $2 billion raise. You're joking.
1:26:17
But like I wouldn't be surprised if clearly steamrolls thinking machines in the timeline today just because of virality.
1:26:24
Well, we should invite Mera on today.
1:26:26
Let's get her on 36 left OpenAI in September having helped drive the creation of products such as chat GPT, the image generator Dolly and Voice Mode.
1:26:34
She had also been a senior product manager at Tesla where she worked on the Model X. Oh, that's cool.
1:26:38
I love Man, if she had stayed at Tesla, we might have a naturally aspirated V12 Model X, you know, ripping around Goodwood Festival of Speed.
1:26:48
I saw a refreshed Model S hit the timeline and it was very moderate.
1:26:54
More of an evolution than a re very moderate refresh, but we didn't know what's inside.
1:26:59
If they switched out the engine, we could be we could be getting very very excited very soon.
1:27:03
Anyway, our our first here, by the way, okay, we should let's run it. I'll be right back.
1:27:07
I I uh we got Steve Sowski in the studio uh coming on to TBPN live. Let's bring him in. How you doing, Steve? Okay, I am here. Oh, fantastic. Uh yeah, sorry.
1:27:22
Where did we I showed up early. I apologize, but Oh, no. I love it.
1:27:24
I connected to you guys before.
1:27:25
Didn't know what your process would be.
1:27:27
Yeah, it's uh it it's evolving. It's evolving.
1:27:31
It's a it's a pirate ship over here.
1:27:31
It is a uh it is a startup in every sense of the word.
1:27:35
Um uh we we only learned later after uh the information was interviewing guests who have been on our show that it's common that when people go on live TV they talk to a producer beforehand as opposed to just what we do which is just send you a Zoom link and you just hop right on.
1:27:52
Like like just so everyone watching and listening and later it's clear not only do you just send a Zoom that's it like there's not there's like nothing zero. Yeah.
1:28:00
Yeah, I mean we want to we want to bring a little bit of the Clubhouse magic, the casual uh conversation nature uh to the show as a feature.
1:28:09
It might be a bug, but we are hoping. I'm excited.
1:28:11
I People were asking what are you going to talk about?
1:28:15
I'm like I I don't know how I'm going to talk about it, let alone what I'm sure we'll have stuff to talk about.
1:28:21
There's so much in the news all the time.
1:28:22
Uh I mean why don't we kick it off with a little bit of introduction on you and K like a brief overview of your career and then we can kind of de dive into a bunch of different topics from that. Sure.
1:28:29
Well, working working backwards, uh, today I do mostly lots of informal mentoring, coaching kind of stuff.
1:28:37
I spend a lot of time talking to the to companies, newly forming formed ones all the way up to biggest of big and lots about strategy and tactics and management, organization and and rolling in technologies and all that stuff. Do a lot of writing.
1:28:55
Um I I have like my whole uh Microsoft history I've written and then I do posts every few weeks on what's going on in the world.
1:29:03
Um in the past I worked at um Microsoft for a long time.
1:29:10
Started as an engineer on on programming tools back in I I I think what Kaparati called like tools 1.
1:29:15
0 Oh, I think in that scale it's more like 0.
1:29:18
5 and then um all the way through office and Windows and bunch of other stuff in in the middle.
1:29:27
Uh I also am a board partner at um A16Z. Cool.
1:29:29
But you guys know for sure board partner doesn't mean much in terms of writing checks or having a decision or knowing anything that's going on.
1:29:40
So I'm learning much of what you talked about this morning the same time you are. Yeah.
1:29:44
When wh when did you join Microsoft exactly and how did that come together? Sure.
1:29:48
I joined Microsoft in uh 1989.
1:29:50
So for product chronology it was like before like six eight months before Windows 3. 0 shipped.
1:30:00
So I was there the summer that that was being debugged and that was sort of a big giant turning point that came together because I was in graduate school doing uh databases and programming languages which was basically what everybody in the 1980s studied.
1:30:14
and I I just wasn't going to be a professor. That wasn't on my radar.
1:30:21
So, I literally had sent my resume on paper into the address that was on a box of Microsoft software that I had won at a conference for a prize for my booth.
1:30:32
And then a day later, the recruiter called me and like three days later, I'm in Redmond interviewing.
1:30:36
And then I have a job and there you go. That's amazing. I have a whole story.
1:30:41
I actually wrote the whole story out as part of my hardcore software thing. Love it.
1:30:44
Uh there's this narrative about the the kind of the '9s era at Microsoft that the like the antitrust like like era was so tumultuous.
1:30:55
It was like this very painful experience for Gates and it kind of reshaped the organization.
1:31:02
uh how much do you think that that's like uh an overblown narrative or it's or maybe it's very real and what do people maybe miss when they when they tell that story today in kind of the more compressed version? Sure.
1:31:14
It is totally compressed and you also have to keep in mind it's it's like 12 years long. Mhm.
1:31:19
It it started in the early 1990s um with some FTC investigations blah blah blah and it didn't really end until like 2007 and by then I was working on Windows. Mhm.
1:31:33
I was on office which was certainly in there but I was also part of the very very early set of people who were running around talking about the internet at Microsoft.
1:31:43
And so I was in the middle of all of it for the whole time.
1:31:48
And I there no one is going to ever convince me that it was as big a deal as everybody else made it to be.
1:31:54
Um because like it just wasn't it's not the whole thing with litigation and regulation and the government. It's not daytoday. Yeah.
1:32:04
Even if you're working in it.
1:32:06
I mean, the government doesn't do stuff every day.
1:32:08
The legal process doesn't change every day.
1:32:10
So, it's this massive amount of hurry up and wait.
1:32:12
I mean, like, I'll give you like very personally, I had to personally design the what was called the browser choice dialogue that was in Windows, which was this thing the European Union made us do like you start a new computer, you log in, and then it pops up, hey, which browser do you want?
1:32:29
So, I personally did that, but it was like over six months and it would be like I'm working three days straight.
1:32:36
I'm not leaving this room in our house, our apartment where I was designing it.
1:32:39
And then nothing would happen.
1:32:40
And then well, they would go on vacation.
1:32:42
They would go on they would go they would go on a 12-week vacation they you know Brussels is completely European so like they you'll see it'll happen again.
1:32:53
happen again. Like in fact the Google choice just came out the Google decision on Android just came out yesterday and as the summer ends just like the Supreme Court in the US they start pushing things out but the difference is in Brussels they like literally just like
1:33:07
put chains around the door and nothing happens until September and that's amazing and so there's a lot of that but I you know there were some things about like for example the browser like ended up being completely self-inflicted by Microsoft in my personal view. Sure. And Sure.
1:33:21
And it was just not like it wasn't the browser choice dialogue.
1:33:26
It was not the deals with the OEMs we had to go change.
1:33:31
It was all our own making.
1:33:31
More than anything, it was our our perspective was either wrong or perhaps warped by the antitrust.
1:33:41
It made us think Windows was more important or central to every single thing we did and put us constantly trying to push it because if they're trying to push against, maybe there was something there. Mhm.
1:33:50
But by and large I I just I think for some people it became a bigger deal than it was.
1:33:58
And I think for the people covering the company, I mean, if you look at books about Microsoft, most of the books about Microsoft are really about either there are like three books about the formation of the company, like a dozen books about the trial and stuff like that, and and that's about it. Yeah.
1:34:13
And so I I and I have a whole bibliography like a hundred books you could look at and it just I always it's just overdone. Yeah.
1:34:22
Zooming out a little bit in the '9s, was there anybody that that you remember being you know having incredible incredible accuracy around predictions of how the internet would evolve and impact various parts of the economy.
1:34:39
feel like what we do on the show today is try to understand the present of AI and and how it will impact various industries in the future.
1:34:47
And there's a lot of people that have cool ideas.
1:34:51
Some people sound like they have good ideas.
1:34:53
You know, we have these conversations all day long and, you know, we spend a lot of time trying to figure out, okay, who who do we actually kind of align uh with from a thinking standpoint?
1:35:04
But uh I I remember earlier this week on the show we talked about how a lot of internet entrepreneurs in the late 90s and early 2000s like really predicted that the internet would allow you to run companies drastically more efficiency because it helped with distribution.
1:35:20
So maybe you needed less sales and marketing and all these kind of things.
1:35:25
And then it turns out companies like still needed massive headcount to deliver products and things like that.
1:35:31
So, I'm curious, you know, kind of focusing in on the '9s, was there anybody that you think was really getting it right in the moment around how the internet would evolve?
1:35:39
Well, of course, you know, obviously present company excluded, but the the key thing is that I I always go back to a ' 80s movie that you guys won't know, but there's a line in it, you know, no matter where you go, there you are.
1:35:53
And with predictions, no matter what happens, someone always said it would.
1:36:00
And so you have to be really careful, especially with the internet, because all the all the things that people said in 1993 would happen all happened.
1:36:11
The only problem is all the words are different and the technology stack is divided up differently.
1:36:17
So the question is like, is that a good prediction or not a good prediction?
1:36:22
And so it just depends on how charitable you want to be.
1:36:24
There are these very famous commercials that um AT&T ran.
1:36:27
Now you have to remember in the early 1990s AT&T had just gone through 10 years earlier a massive antitrust suit been broken up into regional Bell operating companies.
1:36:37
But they were like the biggest company you could imagine other than IBM in the US at the time.
1:36:44
and and they ran all these commercials about what the future was going to look like, you know, and they were called the Someday You Will.
1:36:52
And so they would be like, "Did you ever write a business memo while sitting on the beach?"
1:36:59
And there's like a person with this like 18 pound laptop and a printer next to them pounding out a memo and a cell phone the size of a shoe box.
1:37:06
So yeah, I now can write a business memo on the side of a beach.
1:37:11
Except I don't want to write a memo.
1:37:12
I'm using a cell phone that AT&T didn't really have much to do with and I'm using not really a word processor but I'm just talking.
1:37:20
So like yeah you can write a memo from the beach but it wasn't but that if you watch it it you know you just go crazy or could you imagine going through a toll booth and not stopping I can in fact I do that twice a day but not at all like how they predicted in the movie.
1:37:38
So, you know, you have to be really careful.
1:37:40
But then there are also some incredibly preient like micro things that are just wild.
1:37:47
Like when this company in Seattlebased webban was doing grocery delivery, I remember web like nobody said that was going to work.
1:37:54
Everybody's and of course it's not just grocery now just everything shows up four hours later. Yeah.
1:37:59
And when they but the thing is when they said it even the world's experts in shipping like the founder of what was called Federal Express or FedEx at the time impossible cannot do local delivery because you know their whole model was okay we own a fleet of jets and we pick up your packages with trucks drive them to the airport and fly them all to Tennessee and then fly them back.
1:38:20
So obviously we can't do that in four hours but that's how we do overnight envelopes for $10. Yeah.
1:38:23
And so, but you know, along comes Amazon and like a million and a half employees and they figure the whole thing out.
1:38:30
And so, you know, like these, you know, and there's a great a thing I always love was this prediction that's like every single utility in Linux will eventually become a company.
1:38:41
And it turned out that really ended up being true. Yeah.
1:38:44
And so the whole thing with that 1995 to 2000 meaning you know Windows 95 broad internet everybody even though it was dialup to the crash the whole thing about it was all of those companies ended up being being right.
1:39:02
It's just they were all early and early is mostly just wrong because it means the technology was wrong. Yeah.
1:39:08
the web the investors in web van got smoked totally and yet it was the right idea that is now played out in and that happened with every single category during the like mp3. com Spotify pets.
1:39:18
com Chewy like there is a $10 billion company in the public markets today that has a precursor every single one of them has a precursor in I mean like that sock puppet was the symbol of company Oops company.
1:39:34
com I remember I remember that website yep it was I mean you know that was a super TV commercial, come to pets. com, blah blah blah.
1:39:40
And now like I'm literally if you if I were to move the camera, there's like nine feet of Chewy boxes right behind me.
1:39:47
Everyone buys pet food online now.
1:39:49
Everyone and so so you you I like predictions dime a dozen.
1:39:52
But it's also and also like all of those companies and I really mean this with the most feeling and sincerity.
1:40:00
All of those companies they they had to crawl so that everybody today or to today can walk and then tomorrow other companies will run.
1:40:10
And I think that there's so much of that with AI right now.
1:40:14
A lot of what's going on these are just the crawlers and you have to be careful to sort of declare them winners.
1:40:21
The platform is known all this other stuff.
1:40:22
I mean I love Karpathy's talk. Unbelievable.
1:40:25
just amazing amazing talk that he did at YC and and like he talked about like it it's not the year of the agent, it's the decade of the agent.
1:40:35
But that's not you can't build a company by claiming hey we're the 10 yearout company. Yeah.
1:40:40
So because you don't even start it thinking that.
1:40:44
You start it thinking the revolution is happening and I'm behind already. Yeah.
1:40:47
I mean, Mark Andre talks about how he moved from college to Silicon Valley in in 93 and he was worried he missed everything. Wow, that's crazy.
1:40:58
I mean, and I think that you have to have that mindset to move fast to to do things that when the whole world is telling you it's not going to work, which is literally what's happening with AI right now.
1:41:09
Yeah, it it it feels so similar and yet the some of the revenue ramps of these companies are just so steep that they feel much more like real.
1:41:19
They feel more real as businesses than what was going in the dot boom when there would be companies that would IPO with no revenue and just massive costs.
1:41:27
But at the same time, if the revenue doesn't stick around, we're going to have a lot of dead kind of corporate corpses that look a lot like flame outs. I don't know.
1:41:36
Maybe another way to look at that though is remember what's the denominator you're dealing with.
1:41:41
So if you if you had an internet company in 1996, your denominator was like what like a 100 million computers in the world. Mhm.
1:41:48
You know, you're looking at in an era when when 30% of the US had a home computer. Yeah.
1:41:53
And and so and no mobile.
1:41:56
So you had to like be at home or be at work to shop. Yeah.
1:42:01
And so so a big reason that there was no revenue was like there were no end points. Yeah.
1:42:05
Yeah, I mean it's so much easier to get to 10 billion in revenue of your OpenAI with on the back of Stripe on the back of everyone having an iPhone, on the back of the app store, on the back of everyone having an internet connection, everyone having a laptop.
1:42:17
And so the install base is just so so much bigger that you can actually build a durable business.
1:42:21
They're still trading at a high multiple, but it seems pretty it seems pretty durable.
1:42:24
Well, it's it might be durable, but at the very least, the near-term revenue is an entirely a product of the addressable trial market.
1:42:34
Totally like the number the whole thing with with every generation of technology is the gating factor has always been distribution.
1:42:43
And and so like when the PC was new, you know, you're talking about shipping like, you know, a hundred pounds worth of stuff all around for $3,000.
1:42:48
Y like, you know, you had to set up a store where people wore our coats and ties and it was like buying a car and all this other stuff.
1:42:56
And you know, to today where like the friction to use GPT is it's like what?
1:43:02
Three clicks on an iPhone. Mhm.
1:43:04
And you're paying them $200 a month. Yeah.
1:43:06
Like I mean, it's so fast. It blows my mind. Yeah.
1:43:09
And it's funny because it maths out like like $200 a month, $2,400 a year.
1:43:14
Like you're right in $3,000 PC Dell TV territory like immediately, but it's with three clicks instead of a visit to the store and a talk with somebody in a suit. Right.
1:43:25
That's honestly no cost of sale. Yeah. Yeah. Yeah. Yeah.
1:43:27
Yeah. Yeah. Yeah. Yeah. Dell's revenue ramp if you remember they went from five to seven to 12 to 18 to 25 and just like just absolutely just compounding compounded but at the same time the that's slower than cursor right totally that's slower than open AI best denominator yeah yeah the denominator
1:43:46
that makes sense almost always it's the denominator that you you can use to unconfuse things or to level set yourself yeah I I'm I'm personally like very bullish on that idea of like the denominator being much bigger and the addressable market and that just the ability to ramp with something useful. Uh I've been I've been talking to Jordy
1:44:02
Uh I've been I've been talking to Jordy about this after WWDC.
1:44:03
It seemed like Apple was shifting to a more developer friendly mindset with uh you know free ondevice inference.
1:44:12
They planned this for a long time but it felt like maybe the moment is here where we'll start to see companies that are building AI apps that that have zero variable cost only fixed cost to develop them and then can ramp very quickly.
1:44:25
What were your uh what were your WWC reactions overall?
1:44:30
How did you process that that that event?
1:44:32
Um well, of course, you know, I I always have massive empathy for all the people that have to participate in like a giant developer conference because like nothing can be more stressful.
1:44:39
I I feel cheated because they get to do it all on video and not crash in front of an audience, which turns out to be like quite the right of passage.
1:44:48
But for me, it was really three things.
1:44:50
Uh, one of them was obviously liquid glass, which you know, love the shout out to Vista Arrow in there. Take your victory lap. I love it. There we go. Yeah, actually super.
1:45:01
But I I just don't I think like until you've literally foisted a new design on the world of existing customers, you don't get to have a an opinion.
1:45:13
Like it it it's just like a good take, you know?
1:45:16
I I h it there is literally because it is so easy to just poke holes and everything.
1:45:24
Now the thing is is that what Apple's doing now they haven't quite done as much in the past which is first there's just way more people paying attention. Yeah.
1:45:33
And second, like it they are releasing things that aren't nearly as baked relative to say eight years ago or iOS 7 or whatever because there's just you don't have that ability to do that anymore.
1:45:47
And so, but the flip side is like I they are going to be so good at fixing any of the things that people got hysterical about in the first 12 hours.
1:45:57
And you actually saw the arc go from to like the I see all the positives. Well, yeah.
1:46:03
People were so clearly just rooting for it to fail immediately.
1:46:06
And it's like, how do you have so little faith when you use an iPhone, you use a MacBook, you use Apple software all day long, every single day of the year, and you're going to immediately call them out as idiots because like you found one example where the contrast was the contrast wasn't great.
1:46:25
And and it's also just like like it's one thing to criticize uh Apple intelligence which is a new entirely it's a it's an entirely new discipline for Apple like they they need to learn they need to hire there's so much more experimentation that needs to be done there.
1:46:40
It's a challenge versus UI which is like what they have been bestin-class at forever and there's no one else that's really been challenged.
1:46:47
They've always been great at design.
1:46:47
So I would I would it's much harder.
1:46:49
be curious to get your thoughts on Apple's positioning in the AI talent wars.
1:46:54
We were joking on the show yesterday that if you're a, you know, top tier one AI researcher, you can get a signing bonus that is greater than Tim Cook's annual salary, total comp last year. Tim Cook made 774.
1:47:11
6 million I think last year as the CEO of a you know $3 trillion company.
1:47:16
And then we've been hearing about if you're justund if you're if you're a top, you know, 100 AI researcher, you can just go get that, you know, on day one at Meta.
1:47:26
And so it feels like Apple is not set up to have these, you know, immense comp packages and in many ways that positions them in a way that they will potentially struggle to actually recruit, you know, top talent uh or or retain them in this kind of current meta.
1:47:44
This is you can play either side of this or three sides depending on how you want to count it.
1:47:48
This it's a very very tough time when this sort of starts to happen.
1:47:52
I mean we we went through this at Microsoft when with browsers, you know, and the hiring the right people who did who did languages or were interpreters or who were just known in the space who were networking and and so look, one side of it is super easy.
1:48:08
Like if you're the founder of a big giant company and have infinite money, you have the authority to go hire these people for whatever you personally think is the right number and the authority to deal with the the implications of that.
1:48:21
If you're not the founder, but you have great authority, which I think Tim does, you could do the same thing, but you do tend to start to think about the ripple effect of what you're going to do a little bit more.
1:48:35
you know, you think, okay, well, now do I have to do special comp for other people?
1:48:41
Do I have to deal with a bunch of other people who are going to go shop themselves around?
1:48:44
But one thing to keep in mind is there is also a level of adverse selection that happens at times like this.
1:48:50
Like the first people to leave from the outside might look like rock stars, but it might not have been working so great on the inside.
1:48:59
Like I saw lots of people leave Microsoft for whom on the outside was a little bit of gossip and whisper. Oh, what a disaster.
1:49:05
But on the inside you're like h they were already we you know and then also you see big losses you know and and this happened a great deal in the very early days of of computing with people who were doing the programming languages that was like a huge battle in particular between a company that's no longer around um in the Bay Area called Borland International. Oh yeah.
1:49:26
And Microsoft and we sued each other over people leaving.
1:49:30
It was those are my competitors and I worked on development tools. It was very very nasty.
1:49:33
Now, you know, that was back in the day.
1:49:36
That was six figure comp, not you put them in the dirt.
1:49:38
You put them in the dirt.
1:49:40
It'd be so funny to play back during the peak of the dot bubble.
1:49:44
Microsoft was worth 620 billion.
1:49:47
Imagine the different fork in the road of history if they had gone to Mark Andre and said, "We want to we want to pick up Netscape.
1:49:53
We're bringing you in and we're making you, you know, a 20 billion offer or something like that."
1:49:59
Do you I mean, I'm not there's nothing news like but yeah, lots of those discussions all happen. Yeah.
1:50:03
again antitrust, but they hadn't invented the 49% acquisition.
1:50:07
This is this is revolutionary technology.
1:50:10
This this whole thing is that this is just super interesting. I I something to add.
1:50:14
I I know you guys love talking about M&A.
1:50:17
So, here's a thing to really think about with the regulators and M&A.
1:50:18
If I could toss this in, please, which is you you never you can't lose sight of one particular aspect of competition in the world of regulation, and that's competition between regulators. Oh, interesting.
1:50:33
Who's going to outregulate who?
1:50:34
Yeah, that so when we were being regulated, the US was clearly in charge of global regulation.
1:50:42
And so we sort of define the treaty terms like if the US chooses to regulate first, we're going to have a discussion between FTC and DOJ and then we'll decide and then we'll come to you and we'll explain to you how you will honor whatever our system arrives at. Mhm.
1:50:59
And it turns out the Europeans really wanted, you know, like a gold medal in regulation.
1:51:03
And so they started to to sort of assert, well, we're just going to do more of it.
1:51:08
And if we're so good at it, we should do it more 10x.
1:51:13
We're going to force your companies to follow our rules.
1:51:15
And then they're going to have to choose whether or not to do it different in our market or lose and lose efficiency or do it the same in our market.
1:51:24
And then the same thing is going to start to happen much more in Asia.
1:51:28
I mean it happens quite a bit in China already as Tim Cook is dealing with constantly but the rest of Asia is going to do this too.
1:51:34
We dealt with it in Japan quite a bit and and then you know but the regulators are talking to each other all the time.
1:51:41
In fact the regulators probably talk to each other more than they talk to their victims.
1:51:47
Sorry their their constituents and their dance partners. Yeah. Right.
1:51:54
And so you don't lose sight.
1:51:54
And so you don't lose sight. I think it's just really important to understand that because if if one of them starts to to do something like if if if the US decides not to challenge say an M&A the EU is going to just jump on it out of you know competition and spite or
1:52:11
whatever and now of course you have UK and EU you know and and they're important markets and so a lot of it's not it's almost like collusion it's what it felt like I'm not saying it is it's what it felt like between the mass the major regulators of the world over who is going to take charge. But that a
1:52:28
But that a variable in there is is the ego of the regulators and and in Europe they don't really have constituents.
1:52:37
They talk all about how they're elected and appointed and they list they they operate you know very regally.
1:52:44
In the US it's much more difficult.
1:52:46
You see how the president can directly influence it, how they can appoint people and and there are activists and all that.
1:52:52
So you trust me like there's so much that goes on there that is a big factor in how things go.
1:53:01
Uh how how are you thinking I mean on the the the competing regulators it feels like the next fight should be potentially over the routing of the Siri button on the iPhone.
1:53:13
Uh it feels like if if consumers were able to uh press and hold that button and begin dictating to chat GPT uh they would be pretty happy compared to the roll out of Apple intelligence just thinking about like consumer preferences.
1:53:31
Um, do how do you think about that battle playing out?
1:53:36
Because that's a little bit in the weeds in and from a from a consumer tech perspective, but if I'm predicting out what the next battleground will be, the invocation of the AI assistance seems top of mind.
1:53:48
Uh, is that the right frame?
1:53:50
How how should we think about this playing out?
1:53:53
I'm going to I have to figure out how to be short and cool in this that that's a triggering topic.
1:53:57
Here's why it's triggering. Yeah.
1:53:59
So when we were going through our antitrust stuff on Windows, Yeah.
1:54:03
you know, the original original Windows antitrust case was about the browser. Yeah.
1:54:09
And then it turned into the browser and instant messaging and the music player. Yeah.
1:54:14
And the music player was about not really about playing music, but about the codecs to plays m play music.
1:54:20
I mean, it's just really quickly, can you can you give us a little bit more backstory on like the actual definition of default browser because um you could have three icons.
1:54:32
There's some apps that will if you click a link it'll open a default browser, but I feel like in many ways like the my default browser choice doesn't even affect me that much because I'm clicking the button to open Chrome on my MacBook and then I leave Chrome open for months at a time and it it never even pops up.
1:54:53
Even if I had a different even if I had Safari selected as like the default, I would still be in Chrome all day every day for months at a time.
1:54:58
And so was that the nature of the default or was it just about what was installed? Right. Right. Fantastic point.
1:55:05
So that like you're basically playing the role I played and arguing this whole thing is moronic. Put me in coach. So there is no argument. You lose the case.
1:55:13
You deal with what it is. Okay.
1:55:15
On on the PC originally the default there there were two things about it.
1:55:19
One is you would just get like a mail message in whatever your mail program was and click on it and then something had to happen. Yeah.
1:55:28
And the question is what would happen?
1:55:30
Today, of course, you're already in your favorite mail client, which is Gmail in the browser, which is just going to open another tab. Yep. Exactly.
1:55:36
So, so back in the day, there was this leap you had to do. Yeah.
1:55:41
Plus, that was one thing.
1:55:43
The other thing was it was like freaking wild, wild west of hacking every place in Windows to get the other browsers to pop up. Sure.
1:55:51
So, the iPhone stopped all that nonsense. Yeah.
1:55:54
But the European Union just came back one day and they just decided, well, if you could do that for the browser, you should do it for everything, everything.
1:56:03
And it shouldn't it should have like a a choose your default. Yeah.
1:56:08
No one loves pop-ups more than the Europeans.
1:56:10
They love they wanted like literally so so the reason that we ended up with that stupid ballot screen Yeah.
1:56:18
was because we agreed that you should get a choice for the browser that's pushed in your face. Yeah.
1:56:24
so that we didn't have to make a choice for like every single file type in the operating system all the time. Yeah. Yeah.
1:56:31
And it just it's an awful awful thing.
1:56:34
And it turns out in the real world where there are humans and not regulators, people just they just don't care.
1:56:42
Now immediately if this were some ongoing discord like I get a zillion tech enthusiast people.
1:56:48
I care I want to do this and I want to hit this fall for that.
1:56:52
Not only that, but like if I'm in a tab and I open this, I want this browser and I want that.
1:56:55
And no humans really want to do that. Yeah.
1:56:58
But you can't convince the regulators that choice is bad.
1:57:05
Like you see that's you're arguing that choice is bad. Yeah.
1:57:07
So, Windows ended up with this incredibly long list of like file types that you could pick and choose and the iPhone sort of resisted that.
1:57:15
And I really am complet I wrote a giant post about how I'm on the side of Apple in this because when you buy a product, you buy into the product. Yeah. Exactly.
1:57:25
And you you you're buying the whole thing and and the the counterargument is yes, but that whole thing is a distribution channel.
1:57:32
And so therefore, you can't it's like buying a highway and saying what cars can drive on it. Mhm.
1:57:39
But it isn't like buying a highway because there's another highway right next to it that you can buy called Android. Yeah.
1:57:45
And so the market's already solved this problem.
1:57:47
And what the what Europe is doing is actually reducing choice because they're taking away the choice called really really smart people who I pay money for that have my best interests at heart are are doing it this way and I I actually want to buy that.
1:58:06
And when you're trying to do computing for 8 billion people, that's a valuable choice to have in the market.
1:58:11
Somebody who respects privacy, somebody who's going to protect my credit card, somebody who's going to protect my data and and do things that might make it more difficult for people to exploit those. Yeah. Like I I have all Yeah.
1:58:24
The payments the payments issue in in the app store will be interesting if if apps can just everybody has their own payments and login and all this stuff.
1:58:30
I believe that consumers will eventually get extremely frustrated because they'll realize I have $500 of random subscriptions every month and to find and cancel all those things where Apple in the app store right now it's really nice.
1:58:42
You can see who what am I paying for and you can you know click in, you know, very quickly unsubscribe from everything and that is good for the user potentially better than getting a small discount for circumnavigating the app store, right?
1:58:54
I mean, like I'm doing the Brian Johnson and you know, like I've got all the bands, all the rings and you know, they all get access to my Apple Health data and that's freaking me out. Okay.
1:59:08
Because like they can just read it.
1:59:08
It's it's sort of like what happens with all the social apps that get your contacts.
1:59:14
Like all they get they get your contacts and then they just have them and there's no taking them back. Mhm.
1:59:17
you know, so you sort of have to run your life if you care about that with like the secret contact list that doesn't integrate with anything.
1:59:26
And and I hate that you have to do that. Yeah.
1:59:28
And and so I I think that that we're and so here's the funny part about like this defaults and and the Siri button and all that is that yeah, of course you want choice and I want to have the hardware button.
1:59:41
First, I don't want the hardware button, but that's a different problem.
1:59:44
And but the the thing is is that that the the European Union is is at the one hand they're going to push for choice choice and openness, but they're also the freaking GDPR data protection popup people. Interesting.
1:59:58
So that you can't reconcile and the security people. Yeah.
2:00:03
So if you ever read if you read the digital markets act which is the big one that's that making the stores required all that it's got all the stuff that just waves their hands at it literally says and of course security should not be compromised. Excuse me.
2:00:14
Like what does that really mean?
2:00:17
Security can't be compromised.
2:00:20
Like that's kind of a big deal. Yeah.
2:00:22
And so that's the loophole through the whole thing that's like well that means you you really have to approve the third party stores and you have to do this stuff but that's not what they wanted you to do.
2:00:32
And and so they've set themselves up because they've just regulated at opposite ends of the spectrum openness of and choice and security privacy like it's unreconcilable and which is literally iOS Android like you pick.
2:00:51
Can you tell me the story of the iPhone launch and how you processed that at the time? Oh, sure.
2:00:57
So I was there and and I had flown back from from uh like in the room I think and um I I left and so a bunch of things like first you know you remember he did the whole thing where he just railed on on Windows smartphones at the time you know where he does the market share based on each OEM and and I was using I was actually using a Trio at the time which was the Palm device.
2:01:23
I I wouldn't use the our phones, but I was locked into trio because and I had been a BlackBerry person because Outlook tested Blackberries very early on like before they were released.
2:01:34
I was completely one of these crackberry people.
2:01:37
I actually read the entire DOJ finding on a Blackberry flying on a plane because the pedra signal travels through the clouds. No way.
2:01:45
You could actually download it like 2K at a time.
2:01:49
Um I my view of it was a lot of the simplicity was going to be difficult.
2:01:53
I actually was I loved that they didn't support Flash and that if and that a year later they were like, "Yeah, we're not doing Flash ever, so no way."
2:02:04
Because I I thought Flash was a virus.
2:02:07
And and I but I I I definitely was on the touch skeptical side.
2:02:14
Um but, you know, I was online in June and to pick my you know, 4 GB black one up at the AT&T store in Seattle.
2:02:21
waited on the giant line, got yelled at, traitor, all that stuff, you know.
2:02:28
Um, you know, and you I used it in 10 minutes in I was like, whoa. And it didn't have push.
2:02:33
It didn't have copy and paste.
2:02:34
I knew all the and you know, the touch keyboard was brilliant, but not quite.
2:02:39
And of course, having been on on the office team when the when word autocorrect was invented, I was I was like, "Wow, I know how this is going to go."
2:02:48
Like, every error is going to be like a meme and the whole, you know, the whole deal.
2:02:52
But and it was obvious obvious that there was going to be an app.
2:02:56
There was way to do apps.
2:02:56
It was the app store a year later that really changed things for me personally because it was the there were stores. Palm Pilot had a store.
2:03:08
There was a website called Handango Window.
2:03:10
But you needed like a rocket science degree and a serial cable and all this stuff to get apps onto these phones.
2:03:16
and their phone, their app store was unbelievable from the technology, from the APIs and the ability to write them and the go to market.
2:03:26
You know, people mock and rail on 30% freaking brilliant because the amount of money it took to get an app recognized in the marketplace was way more than 30%.
2:03:39
So, I I I was like over the top like this is going to screw us up big time by by 08. It's a great story. Wow. Great lore.
2:03:49
You're a big tech defender. So are we. Yes.
2:03:51
Big tech gets a lot of hate, but you know, I mean, there's so much to talk about. It's fantastic.
2:03:55
Thank you so much for joining.
2:03:56
This is a really Oh, thank you guys.
2:03:57
I love what you guys are doing.
2:03:59
So, really thankful to have a chance to chat with you. Come on again soon. Yeah, we'd love to. Oh, I would love to. Thanks so much. Great. We'll talk to you soon.
2:04:05
Have a great rest of your day. Bye.
2:04:06
Uh, really quickly, let's tell you about Bezel.
2:04:09
Your bezel concier is available now to source any watching. Seriously, any watch. Go to getbessel. com.
2:04:15
And Quaid had a Bloomberg hit.
2:04:17
Quaid was on Bloomberg TV this morning talking about the watch market. That's amazing. I love it. Alternative.
2:04:25
These are alternative assets, right? Yeah, these are great.
2:04:26
Uh, next up, we have Anu Pom from Roblox in the studio.
2:04:31
Uh, I've been fascinated by this company for years.
2:04:33
Uh, it's a company that I don't have a ton of experience with personally, but it's obviously a behemoth with a generational founder at the helm.
2:04:41
Very interested to get to know you.
2:04:42
Uh, how are you doing today? We're good. Are you happy Friday? Happy Friday. Uh, sad Friday for us.
2:04:47
We love what we do and so the weekend is just a tough time where we're we're not on counting the hours until counting the hours. Yeah.
2:04:55
But, uh, but it's great to be here. Yeah.
2:04:58
Would you mind uh kicking us off with a little introduction on yourself and what you do for the company and how you wound up there? Yeah.
2:05:05
So, first introduction about myself.
2:05:08
Uh, have done a couple of big data startups uh before.
2:05:10
So have been a founder and I've been involved in at least at least scaling a couple of companies uh and then uh uh I was retired for a year and uh Roblox came along.
2:05:24
It was such a fascinating uh business.
2:05:28
It was such a fascinating technology stack that I came in and now my responsibilities are AI used to be called machine learning at that time uh um and uh uh infrastructure um so that's that's generally my remmit in the company. Yeah.
2:05:46
Take me on a little tour of how artificial intelligence is being used right now.
2:05:50
Uh we're we're hearing stories of just accelerating software development, new products being unlocked, new actual features.
2:05:56
um how would you characterize the various ways AI is transforming the company right now?
2:06:06
Yeah, so sort of three arcs.
2:06:06
The first one is it's been around for a long while for companies like ours.
2:06:10
So our homepage for many many years has been generated by machine learning.
2:06:16
What you all call recommendations whether you like them or not is different but the recommendations are machine learning generated.
2:06:22
So if I watch a TVPN uh YouTube podcast, maybe I'll get I'll get other TVPN podcast.
2:06:30
collaborative filtering, recommendation algorithms going back to like you know Amazon you might also enjoy classic machine learning that's it right and so classic machine learning would be everything that we do that we've done for many many years uh in that area people are starting to think about using
2:06:47
large models in production interesting uh which is very difficult uh because it's super expensive to invoke a large model and you wouldn't like your YouTube homepage or Roblox homepage or Netflix homepage Amazon homeage any of these homepages loading slowly would be really really tough. So the entire industry is
2:07:02
So the entire industry is trying to figure out how to get these large models working in in traditional uh uh machine learning.
2:07:09
Then very unique to us is the amount of AI we use in safety. Mhm.
2:07:17
So everything that you type in the chat for Roblox goes through a filter. Yep. Right.
2:07:21
goes through a filter. Yep. Right. uh and that we we we developed technology with machine learning but now we are developing technology with AI which means we are deploying a very large model which has a huge memory of your chats y so that we can detect bad behavior on that makes a ton of sense
2:07:41
yeah that's huge uh talk to me about really quickly we'll we'll we'll continue on the I think there's probably a third option but um just inferencing these large models at cost is open source important are you looking forward to like getting some of these LLMs that are good enough or at the frontier like onto AS6 just dropping the cost. We see
2:07:57
We see these we see these news news items every week.
2:08:02
Oh, this cost is 80% cheaper.
2:08:02
This is 90% cheaper, but it still feels like it's probably expensive.
2:08:08
Have you just been bearing the cost and you're waiting for it to come down further or have you developed tricks to actually reduce the cost to uh something that looks more like a traditional, you know, database query cost which is basically negligible? Yeah. Yeah.
2:08:21
negligible? Yeah. Yeah. So the so the latter very very good question by the way this is this is something that is top of mind for us because if you're going to uh you know invoke that model 250,000 times a second if every one of
2:08:34
them was 10 cents you would be in trouble you wouldn't have a business right so uh then what what we focus on is uh creating smaller models from large models so we still start with the large model but we then create smaller and smaller models through distilling and quantization. Both of these techniques
2:08:54
Both of these techniques are well understood. Yep. Yeah. Yeah.
2:08:56
I mean, we talked to a company that's doing this for other companies coming up with it's just a profanity filtering LLM and it's and it's trained on a consumer graphics card and it's so small it's really baked down and and this makes a ton of sense for a large enterprise that has very high performance computing needs at scale.
2:09:15
talk about the how you see the potential of AI at the game experience level for players.
2:09:21
How much time you guys are thinking about that.
2:09:23
I can imagine you know players leveraging it to create worlds, characters, storylines, narratives. Yeah. All that kind of thing.
2:09:34
So you teed me up for the third point which which I was going to which is uh you know generative AI classic generative AI is text image video and kind of stops after that.
2:09:44
So we decided around one and a half years ago to pick up from that so we don't try to create our own large model which is trained on text.
2:09:54
We've created our own large model for 3D generation.
2:09:58
for 3D generation. M so uh today if you want to build a video game or if you want to build a game you are going to open uh some software you're going to blend all the all the stuff together you might have to you know work with your artist for many many hours but imagine if you could just type a prompt a stylized Japanese village pagora and you want to make it gothic for whatever reason um we have a large model right now uh open sourced uh
2:10:32
people can go to hugging face and and and use it uh and and uh build an entire scene using 3D generation model uh all of it is possible because obviously all the advances that have happened in AI interesting yeah I imagine the traditional workflows like Cinema 4D or Blender or Unreal Engine and then you're you know bringing that in to do the shading and all of that stuff is like super teed up for uh for image generation makes a lot of sense. I'm
2:10:59
I'm also interested in in in uh when do you think we will see uh the advancing the advancements in AI play into actual NPC creation.
2:11:11
So I I design a game in Roblox and I want to uh instantiate a character a boss and I'm don't just want to give them a star algorithm to or or oh yes the boss like you know attacks three times with the sword and then cast the fireball and it's the same you know when you play those games and you're just like this doesn't this feels too algorithmic like I understand the algorithm that's running there.
2:11:32
clearly uh you know um deterministic code that I'm interacting with and it feels like oh it's a bullet it's a bullet sponge boss instead of like oh wow like it feels like I'm playing against a human. They're being creative.
2:11:44
Maybe they're not maybe they're not just impossible to defeat because they're superhuman AI but they're just creative in a way that the default AI algorithms are have been in the past whether you're fighting like you know a boss in Doom or something.
2:11:56
uh is there any are there any uh resources that you're going to provide to the community on that front? Yeah. Yeah.
2:12:06
So that that's something that we debated a lot.
2:12:09
One is that we as a platform become very opinionated about what an NPC is and you know this is how the goss NPC is.
2:12:16
But that's not our philosophy as a company.
2:12:19
As a company, we are a platform that deploys a series of APIs and then we just wait for people to come up with things like grow a garden or dress to impress. Yes.
2:12:29
Uh trust me, you know, I don't know about y'all, but I couldn't have thought about dress to impress.
2:12:34
It is such a simple game and it appeals to such a very human thing.
2:12:40
You dress to impress, right?
2:12:40
And so, I mean, we we do we play our own version of that here on the show as you can see. tailoring suits.
2:12:47
All of us are, you know, even my teenager who wears a toned shirt is actually trying to convey something.
2:12:54
So, going back to your NPC question, uh we release large models as a service.
2:13:00
So, we don't want our uh creators to worry about what you all asked, right?
2:13:05
The the cost of inference, which model should I use, all those details we take over as an infrastructure team.
2:13:13
So, infrastructure is invisible to them.
2:13:15
And now many creators are using that to give their players capabilities to build their own NPCs.
2:13:24
So it's it's two layered now rather than us building the NPC.
2:13:29
It's like you can you know like that old thing you can do it and you can do it right.
2:13:34
Can you can you give a an update on the scale of Roblox?
2:13:37
on the scale of Roblox? I think there's been headline you know every everybody I think should know by now that that it is a massively scaled platform but even just insights into average user minutes on the platform scale how many America you know what percentage you know I
2:13:54
imagine it's doubledigit percentage of American children play can you give us some ground on the scale right now yeah so but I'll give you the scale the latest scale which was I can't believe it's Friday so it was just 5 days ago 25 million concurrent people players showed up. 25 million at the same time at the
2:14:10
25 million at the same time at the same time. That is so much.
2:14:14
It's like it's more than the Super Bowl, right?
2:14:19
It's like significantly I think it's significantly more than the Super Bowl.
2:14:22
Like it's like Super Bowl every significantly more than the population of certain nations that I shall not name.
2:14:27
Not quite not quite the Super Bowl. It's 127 million. Okay. Okay.
2:14:31
Well, you're getting there.
2:14:31
But concurrent is the you know concurrent is specific what concurrent is is essentially on a random time.
2:14:37
But then our our founder Dave always reminds us that yes today of course there's a lot of news around these all-time highs.
2:14:47
But for the last 16 years every other weekend we've hit a new high. Hit a new high.
2:14:53
It just happens to be that this weekend we just hit a Guinness, you know, the world record of a single game having 16 million people playing simultaneously.
2:15:05
Uh that's never happened before. I didn't know that.
2:15:08
I'm an infrastructure person.
2:15:09
Uh uh so uh we've been working on this for a while now.
2:15:12
Um last December we thought we saw one of the biggest highs with dress to impress and then we saw fish then we saw dead rails.
2:15:22
It's every two or 3 weeks uh we see a massive massive high. Yeah.
2:15:26
Uh tell me the story of grow a garden specifically.
2:15:30
Um do this come out of nowhere?
2:15:33
Does do these things surprise you at this point or are you able to predict and track these things? Yeah.
2:15:38
How early can you tell if a new game is is actually a hit?
2:15:40
Is there initial data that you can see from the first 10,000 players or anything like that that says, you know, this thing's going to go into the millions?
2:15:49
The third the third Google result for Grow a garden, by the way, is a Reddit post on r/Roblocks from a month ago.
2:15:55
Why is Grow a Garden so popular?
2:15:58
So, even even the Reddit community can't figure it out, but what do you know about it? Yeah. Yeah.
2:16:01
So, so um I'll take you back a little bit.
2:16:05
Uh you know, two or three years ago, we used to do annual planning. Mhm.
2:16:09
annual planning. Mhm. which tries to answer your question which is can I predict how many players will be playing how much at what time and then we realize it's it's sort of as an as an engineer it's a little bit of a fool's errand because you're almost capping the
2:16:26
popularity of your platform by saying I'm going to predict some 10% growth 20% growth u so what we do is we do long range planning but we also do short range planning which means as you as you talked about if if I see 10,000 people really engaging with it. Uh uh the
2:16:41
Uh uh the recommendation algorithm picks it up and starts giving it more traffic. Mhm. Okay.
2:16:48
In the meanwhile, we are tracking that the game the game is going up.
2:16:52
But on the capacity side, uh uh we don't try to predict exactly how much a game is going to be popular because we're a platform with literally millions of experiences.
2:17:04
So we wouldn't have been able to tell you that grow a garden is going to be at this.
2:17:08
But we could have told you that as a platform we continue to grow a at a very high rate. Mhm.
2:17:15
So we plan for the platform and then if one of the games becomes popular it's okay.
2:17:21
Every four weeks we have had a new popular game.
2:17:24
Uh uh um so uh so we just we just track the total growth.
2:17:32
Uh we don't try to be good enough to track each game. Yeah.
2:17:35
Do you is do you find it uh I can imagine if you're a S sur you want to go this is like the the the NBA of site you know reliability engineering because there's almost there's few there's few places where you can get this this amount of pressure this scale this much unpredictability who's LeBron James of uh of site reliability engineering we want to ring the shout out they immediately get poached Ah, so here's the here's the interesting thing.
2:18:11
Thank you for bringing that up.
2:18:12
Very few people would would would bring up the the the site reliability.
2:18:14
The heroes the heroes of the unsung heroes.
2:18:19
The unsung heroes of the internet.
2:18:19
Well, we would be nothing without they keep the internet running. 100% agree.
2:18:22
But here's what we we have done culturally.
2:18:28
Number one, every executive is on an on call rotation with SR. Oh, interesting.
2:18:35
That's a crazy cultural move. I love it.
2:18:38
I'm on call I think from today 6:00 p. m. or something.
2:18:40
Uh uh and I report to the CEO and the SVP of engineering here.
2:18:43
So, you know, yeah, for some of my industry friends, it's just odd.
2:18:49
I thought you kind of work up towards not being on call, but the way you institute a reliability culture, Yeah.
2:18:55
the way you institute a reliability culture is uh uh uh everybody takes some on call.
2:19:00
We're not always on call, but we always take a rotation. So, that's number one.
2:19:04
The other is our S sur team is really a software mindset.
2:19:08
Uh so so every Tuesday they run this thing called taco Tuesdays.
2:19:13
Now you would think that they eating tacos, right?
2:19:15
Well, what they're really doing is testing the actual capacity.
2:19:20
Every Tuesday they try to bring Roblox down by taking capacity from a particular service. Interesting. Okay. Yeah.
2:19:28
So that is a nibble nibbling a little bit of a little bit of the server little bit of the taco testing.
2:19:36
You take the voting you take the discovery service and you starve it of capacity as if we have too many players but we are all in the office so we can watch it. Right.
2:19:44
The other one that they do is uh um uh is chaos testing.
2:19:47
We have a very unique name but our coms team doesn't like to talk about that name.
2:19:55
So, I'll not say the name on this on this talk, but but let's say there's Roblox and there's Godzilla and if Godzilla was in our data centers, I'm still not naming the service, right?
2:20:05
So, it creates so much chaos in our system, including like unplugging servers. Yeah.
2:20:11
Now, most people don't know this about Roblox.
2:20:13
We have 24 data centers globally. Wow.
2:20:16
Uh uh we look like gaming company from the outside, but really to your point about being the Super Bowl of site reliability.
2:20:23
Yes, I agree because we also have servers to rack and stack.
2:20:28
Uh so we do these taco things and these chaos testing throughout the week trying to keep bringing down uh uh uh Roblox as if we want to see what happens and that's why we get ready for big Saturdays. It's amazing.
2:20:41
Um do you have anything else?
2:20:44
I want to let you get back.
2:20:46
Every day is the Super Bowl.
2:20:46
Every Saturday Super Bowl on Roblox, but this was fantastic.
2:20:50
Thank you so much for stopping by. You said it. Thank you very much. This was great. Yeah. Thanks for joining.
2:20:55
Yeah, we'll talk to you soon.
2:20:57
Uh, how'd you sleep last night?
2:21:00
Did you put up good numbers?
2:21:00
I'm not going to I'm not going to I'm not going to lie to you, John.
2:21:04
I got a little bit cocky about a month ago.
2:21:05
Yeah, even just earlier this week. Completely falling off. I got a 75.
2:21:08
Only put up 7 hours for 96. Let's hear it for me. I want a soundboard. Play the Ashton Hall. Yes. 96.
2:21:22
that I'm going to go home this weekend, reset, and get back because you're putting me putting me to shame.
2:21:27
Yeah, I I'm I'm I'm beating you up out here.
2:21:30
Um anyway, let's run through some news before our next guest gets here in 12 minutes.
2:21:36
Um and also go over to eight. com, get a Pod Five.
2:21:38
They have a 5year warranty, a 30-day risk-free trial, and free returns, free shipping.
2:21:44
Um the US prepares action targeting allies chip plants in China.
2:21:46
This is from the Wall Street Journal.
2:21:49
The move isn't meant to escalate trade tensions.
2:21:52
White House officials say it sounds like the number one thing you would do if you were trying to escalate trade tensions. But uh let's see.
2:21:58
Beautiful image of TSMC here.
2:22:00
Can you see this, Jordan?
2:22:02
This factory looks this looks amazing.
2:22:02
I don't know if this is the factory.
2:22:04
It might just be like the headquarters, but wow, what an amazing building. This like building.
2:22:10
They were like, make us a Pinterest board of the most sci-fi building of the future and then let's just build that.
2:22:15
This is giving Apple a run for its money with a donut.
2:22:17
This is really, really cool.
2:22:19
I had never seen this picture before. Yeah. The cannon. The capital cannon.
2:22:23
Now you you see why MASA saw this.
2:22:25
It was like $1 trillion to TSMC. Let's get it. Yeah. Let's get it going. Yeah. I mean, right.
2:22:30
Uh Jensen earlier this year after all the trade war stuff, started setting up new facilities for Nvidia, believe in in Shanghai. Yeah. Yeah.
2:22:42
So, I'm sure he's sitting there needs a heater after seeing this headline going back and forth.
2:22:47
Um, a US official wants to revoke waiverss that allow global chip makers to access American technology in China.
2:22:56
People familiar with the matter said this has been something that people have been talking about with the chips act for a long time.
2:23:02
Just the idea that yes, ASML makes lithography machines that are used by TSMC.
2:23:07
ASML is not is a European company, not an American company, but they use a lot of American intellectual property.
2:23:14
And so the the American government feels that they have the ability to restrict trade of those lithography machines, which is obviously a key point of leverage in the AI race.
2:23:28
Now, there's differing opinions as to how real the AI race is or or how seriously should be taken.
2:23:32
There's folks who are saying certainly a race.
2:23:34
I think the debate is is it a war? Yes. Yes. Is it Yes.
2:23:38
Is it a or is it a dunk contest? Who knows?
2:23:43
You know, Deep Seek shows up. Windmill.
2:23:46
Oh, reasoning model for free, breaks the backboard. You love to see it.
2:23:49
Uh, the move could strain relations with South Korea and Taiwan whose companies would be most affected by the change.
2:23:55
The revocation could disrupt the global industry as companies deal with trade war issues such as China's limit on rare earth magnets.
2:24:02
And so, you know, you you hit them, they're going to hit back at some point.
2:24:06
So um currently South Korea's Samsung and SKH Highix very important company that makes memory and as well as TSMC enjoy blanket waivers that allow them to ship American chipmaking equipment to their factories in China without applying for separate for a separate license each time.
2:24:20
So your TSMC or your SKH you want to do packaging in China because that's where the industrial hub is.
2:24:28
That's where the special economic zone is.
2:24:30
You got to ship in a whole bunch of different equipment.
2:24:33
Maybe it's just, you know, a CNC machine or something or whatever from America. Yeah.
2:24:37
Well, that's going to throw off everything you're doing if you have to go to America and ask for permission every single time.
2:24:42
So, Jeffrey Kesler, the head of the Commerce Department unit in charge of export controls, told three top companies this week that he wanted to cancel those waiverss, according to people familiar with the matters.
2:24:52
They said Kesler described the action as part of the Trump administration's crackdown on critical US technology going to China.
2:25:00
If carried out, the move could be both disruptive diplomatically and economically.
2:25:03
Earlier this month, the US and China agreed to a fragile trade truce in London.
2:25:08
The part of the deal involved each country agreeing to hold off from introducing new export controls and other measures designed to hurt the other.
2:25:15
And so there's it feels like we're we're leaning war here, trade war more than trade race or AI race. Um but we will see.
2:25:26
This action isn't a new trade escalation, but we would be designed to make the licensing system for chip equipment similar to what China has in place for rare earth materials.
2:25:35
The White House officials said the US and China continue to make progress on completing the agreement they reached in London and negotiating on trade.
2:25:43
Chipmakers will still be able to operate in China.
2:25:45
the new enforcement mechanisms on chip mirror l chips mirror licensing requirements that apply to other semiconductor companies that export to China and ensure the United States has an equal and reciprocal process.
2:25:55
So that's the story from the journal. Uh this is a fun story.
2:26:00
We're getting AI pancakes.
2:26:04
Applebee's and IHOP plan to introduce artificial intelligence in restaurants.
2:26:11
People have been begging for this.
2:26:11
Yes, people have been begging for this.
2:26:13
Uh it's a very funny story, but the silence from Applebees on on the AI war has been definite. Yes.
2:26:20
So, uh this is all about dying, a company called Dine Brands, and I saw this and I thought it was interesting because AI pancakes is funny.
2:26:27
Um but, uh this is a $450 million company or $425 million company.
2:26:33
They're public on the New York Stock Exchange, Dine Brands Global.
2:26:38
They're partnering with uh the they're the parent company of the two chains.
2:26:43
They aim to streamline operations and encourage repeat diners.
2:26:46
And guess where they're headquartered? Pasadena, California.
2:26:48
We got to get the CEO in the studio. This is amazing.
2:26:53
Company behind Applebees and IHOP plans to use artificial intelligence in its restaurants and behind the scenes to streamline operations and encourage repeat customers.
2:27:01
Dine Brands is adding AI infused tech support for all of its franchises.
2:27:05
They're trading at about 0. 5x revenue.
2:27:07
And so if you slap some AI in there, they could trade at 300 times revenue. make it happen. I'm I'm excited.
2:27:14
I don't care that they're a restaurant. I'm rooting for them.
2:27:16
It's passing a homegrown company. Let's go.
2:27:20
Uh so, Dine Brands adding AI infused tech support for all of its franchises as well as an AI powered personalization engine that helps restaurants offer customized deals to diners.
2:27:28
So this is this is more just like retention and uh typical marketing stuff.
2:27:34
But I mean you could imagine that a lot of these AI tools will would as silly as it sounds it would benefit a restaurant chain because there's a lot of logistics and operations and marketing that needs to be done and why not have AI play a role in that.
2:27:49
The question is always like where does it sit?
2:27:50
Is should this be a uh a SAS product that you're buying from a startup that's leveraging AI?
2:27:55
Should you go should your current marketing partner offer this as just an add-on or improvement to what they're already doing?
2:28:02
Should this even just be your your marketing team now has a Chad GBT license?
2:28:06
Um, it sounds like they're going a little bit deeper, though.
2:28:08
So, the Cal the Pasadena, Californiabased company, let's hear from Pasadena, which also owns FA Fuzzy's Taco Shop and and has over 3,500 restaurants across its brand, is taking a practical approach to AI by focusing on areas that can drive sales.
2:28:23
Um the chief information officer Justin Skelton is commenting to the journal in this streamlining tech support for dine brands more than 300 franchises is important because issues like a broken printer take valuable time away from actually managing restaurants.
2:28:38
So it's not for the customers it's for the franchises they call in.
2:28:40
This is the this is the classic question of like why at McDonald's why is the McFlurry machine always broken?
2:28:46
Well, now if you're a franchisee owner and you have something that's similar to a to a McFlurry machine, a printer, receipt printer or PL as these chains roll out AI across different customer touch points and in the back office, you can imagine that that waiters like like worldass waiters will actually end up being like even more of a luxury and people actually seeking them out, right?
2:29:12
Yeah, it is a truly great waiter and service team at a restaurant can massively elevate the experience, right?
2:29:21
It's like it's and and so I think this is one of those things AI will take some jobs in the restaurant industry but also elevate roles, you know, like like uh you know, sitting down at your favorite restaurant, seeing a waiter that you see once or you know, twice, three, four times a month, right?
2:29:38
And and having that experience, that relationship.
2:29:40
So, the IHOP in past is zoo on Sunday mornings. Yeah, it's just dad. I've been there.
2:29:46
I've been there with my son once and it was it was fantastic.
2:29:49
Uh yeah, it's it's all the dads taking the kids out, letting mom sleep in on the weekend. That's the meme.
2:29:55
And it's just like line out the door.
2:29:57
I I had no idea it would be so popular, but it's extremely popular.
2:29:59
Uh so they're building tools on top of Amazon, uh which has uh the Q generative AI assistant.
2:30:06
It allows the company's field technology services staff to query its knowledge base for tech help using plain English.
2:30:12
So, you know, chatbot, but but trained on specific uh questions that the restaurant tours or the franchises have to answer.
2:30:20
And then they're also rolling out a personalization engine.
2:30:23
Um, pretty fun that they got a nice Wall Street Journal write up about this.
2:30:27
Uh, other tech initiatives Dine Brands, Dine Brands is testing include AI powered cameras that can detect when a table needs to be cleared.
2:30:35
So you will not need to wait for your waiter to come around.
2:30:37
They'll have a dashboard.
2:30:39
See, hey that you clean up on aisle six.
2:30:41
Uh as well as an AI app for restaurant managers that helps them oversee day-to-day operations like staffing kind of just better timekeeping, better management, better just tooling for these companies. Uh very interesting.
2:30:54
Uh with these updates, D Brands joins McDonald's and Yum Brands Pizza Hut and Taco Bell which are similarly tapping AI in their restaurants and behind the scenes.
2:31:01
One promise of AI is that it can make fast food and casual dining restaurants more automated, lessening the need for human labor and speeding up the work of existing staff.
2:31:09
The ability to offset labor costs, whether by reducing or more accurately forecasting it is a major cost savings for restaurants.
2:31:14
Unclear what that would mean for a price war.
2:31:16
If both companies implement AI, they're both able to reduce labor costs.
2:31:20
Would they both just drop prices or would they actually both reap higher margins?
2:31:24
I actually don't know how.
2:31:26
Or just spend more money on marketing. Maybe. Yeah. Yeah.
2:31:30
May maybe we just see more McDonald's ads in the Super Bowl and I have ads in the Super Bowl hopefully.
2:31:35
Anyway, AI is moving quickly and I believe it's going to be embedded in everything we do, says Skeleton. Fantastic.
2:31:40
Uh we at least give him a 1x revenue multiple. I've seen enough. I've seen enough.
2:31:47
Um we have our next guest in the studio. Great. Let's really quickly.
2:31:52
Let's tell you about Wander. Find your happy place. Find your happy place. Find your happy place. Seriously, it's summer. Get on. com. Now is the time.
2:32:02
If you've been waiting around, get on there.
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They got top tier cleaning.
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They got 247 concier service.
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It's a vacation home, but better, folks.
2:32:12
Um uh there's also the Tik Tok ban, which has been delayed for the third time.
2:32:18
Uh, the president gave the Chinese controlled video app another reprieve from a 2024 law requiring its sale or closure. Another 90 days. Just 90 days.
2:32:29
Trump is kind of the king of these like, you know, stalling it out.
2:32:33
This has been like his leverage.
2:32:35
He's known for like moving extremely quickly and just being like all of a sudden everything has a massive tariff and then also like really dragging his feet on things. Art of the deal. Art of the deal. I'm banning Tik Tok. Art of the deal. I'm delaying the ban. Art of the deal. Art of the deal. I'm banning 40 chest. chest.
2:32:49
Um, he issued another 90-day reprieve.
2:32:53
White House spokeswoman said the administration will work over the next three months to close a deal ensuring American user data on Tik Tok is safe and secure.
2:33:02
Uh, prior Supreme Court ruling upheld the law, citing national security concerns regarding Tik Tok's data collection in foreign ties.
2:33:08
What's interesting about this is that the the narrative of like of like why is Trump soft on Tik Tok during the election cycle was completely different reasons.
2:33:18
It was like there was there was someone who had Sesuana, what is his name?
2:33:20
Jeff Jeff Hass or something, I forget. Uh yes. Uh yeah.
2:33:27
So this investor at Saskuana had a huge position in Bite Dance which owns Tik Tok.
2:33:33
And so a Tik Tok band might like personally impact him to the tune of like $5 billion or something.
2:33:40
So, so obviously it was worth it to him to invest like hundreds of millions in lobbying to prevent that from happening.
2:33:47
So, there was kind of this narrative emerging that like Jeff Yas was was like the driving force economically in America just a natural incentive not like a CCP agent just like just like he has a financial incentive to to not let his asset get burnt by by a ban.
2:34:02
And so do the investors in DJI.
2:34:06
Yeah, there are few American venture investors American venture investors uh in G in DJI who would similarly be against a ban, right?
2:34:12
Uh just if you were just tracing like basic economic logic.
2:34:16
Now there was also the narrative that Trump wanted to uh keep Tik Tok alive because it was very good for his campaign because there were a lot of viral Tik Toks promoting Trump but or or just very bad for the campaign because how many young people would be like you banned my favorite app. Exactly. They took my Tik Tok.
2:34:33
I'm voting against this guy. My precious.
2:34:34
All of those I all of those reasons are out the door because he's elected.
2:34:38
So I don't I still don't understand the logic here.
2:34:40
Um and I hope that something gets done here.
2:34:42
Anyway, we we will continue to track the story.
2:34:45
Uh at the end of this 90 days, start the start your engine, start putting a 90-day hold on the calendar.
2:34:50
We'll be checking in and obviously check Poly Market to see the updates on.
2:34:54
Right now, Tik Tok sale announced in 2025 is sitting at a 28% on Poly Market by the end of the year. By the end of the year. Okay.
2:35:04
Yeah, it feels correctly priced at the moment, but who knows?
2:35:08
Well, we have Miles from Dash Fuel in the studio.
2:35:12
Welcome to the show, Miles. Good to meet you. Welcome. Nice to meet you. How you doing? Good. How are you? Uh, good.
2:35:17
Would you mind kicking us off on uh with a little bit of introduction on yourself and the company and then obviously have a bunch of questions to ask downstream of that uh related to the current uh kind of global situation. Yeah, happy to.
2:35:28
Um, so I'm the CEO of Dash Fuel.
2:35:28
We are a vertical SAS company focused on downstream oil and gas logistics.
2:35:34
So that is you know you have Exxon and the big producers producing fuel but how do you get that fuel to gas stations, airports, marinas for actually the consumption of that fuel and our customers are focused on that.
2:35:48
So are your customers like like you know the the 76 or like the Chevron station, the gas station?
2:35:58
Some of our customers are um you know the big hazmat trucks you see driving down the slow interle trucks those are our key customers. Okay.
2:36:04
And that might be a different company that is contracted by 76.
2:36:07
Hey I need gas deliver it for me but then I might go to a different competitor if I'm if you're out of gas today and I need to react. Got it. Okay.
2:36:16
Um and yes if fascinating industry.
2:36:19
How how did you get how did you discover this opportunity?
2:36:21
I feel like this is something that most people don't necessarily interface with on a daily basis. Yeah. Yeah. Absolutely.
2:36:26
So I I actually got recruited by a venture studio called Fractal.
2:36:29
So they incubate vertical SAS problems and this is one of the ones they were incubating. Okay.
2:36:33
Um and you know it's a huge market uh lots of legacy players, old technology. Yeah.
2:36:41
And just an interesting space like it's dynamic, it's complex, it's 24/7 and it's a critical part of how kind of the US keeps running.
2:36:46
And so I I kind of jumped at it. Yeah.
2:36:48
What what is the key unlock in actually building the vertical SAS product?
2:36:53
Is it just like having an an mobile app or getting from paper to spreadsheets to a database table and some visualization or is it handling payment processing more efficiently?
2:37:05
Like where are you actually plugging in and creating value for these companies?
2:37:08
Uh I think honestly all of those.
2:37:08
Um so key things that we look at are moving off paper. So that's a big one. Uh duplicate data entry.
2:37:16
So logistics or spreadsheets into the accounting system is a big one.
2:37:20
And then the third big one is just driving increases in profit margins.
2:37:24
So um fuel is a very complex dynamic optimization problem.
2:37:27
So you might for a single load have 400 different sourcing options from all the terminals around and it's dynamically priced and so how do you figure out what is my optimal sourcing for those?
2:37:37
And so we're going to try and drive those margins higher.
2:37:39
Um and so those are kind of I'd say the three key pieces for us.
2:37:45
So uh what are your customers seeing?
2:37:47
you're seeing news that oil prices are are starting to gyate on the basis of uh the the conflict in the Middle East.
2:37:53
Um what are you hearing from uh your customers and folks in the industry?
2:38:00
Yeah, so I I think we're definitely seeing that.
2:38:02
So Thursday night into Friday morning from last week, the typical price volatility in our space is roughly 3 to 4 cents uh overnight.
2:38:09
And we saw price jumps from 15 to 20 cents.
2:38:13
So you're talking, you know, 5 to 10x greater volatility.
2:38:15
Um, so that's definitely playing out and that obviously cascades through.
2:38:19
Um, ultimately if prices stay high to gas stations and the end retail customer, although we haven't seen much of a jump there, it's very competitive and so prices are still only slightly higher.
2:38:29
I would say the big thing I think people are watching for is does this conflict extend into the straightfor that would cause prices to go up pretty significantly. Yeah.
2:38:42
Explain to me the different uh beneficiaries of various oil price levels like uh who likes higher prices, who likes lower prices.
2:38:54
Obviously, the American consumer government loves high gas prices. It feels like that.
2:38:58
But I've also heard that uh that gas station owners actually like higher gas prices because they slap a margin on top of the the oil price.
2:39:07
And so, uh, when when prices are high, they might be making more money, but at the same time, if consumers are pulling back from high prices, they might not go into the store and buy, you know, a case of beer and some snacks.
2:39:17
I I think it's it's more the Goldilocks, the happy middle is kind of where people like to be with a little bit of volatility so that you can take advantage of price swings.
2:39:25
But ultimately, as you're saying, too high prices, no one's going to be driving.
2:39:29
No one's going in to buy snacks for gas stations.
2:39:31
So, no one wants really high prices.
2:39:33
and really low prices, you start to have producers cut back because no one wants to sell at the, you know, 30 or $40 a barrel volume.
2:39:41
And so really that happy medium is where people like to have it sit.
2:39:46
We've got enough supply and demand matching.
2:39:48
Um, and so I would say that's kind of the the sweet spot. Yeah.
2:39:49
We're uh how closely do you track these markets?
2:39:53
Do you do you can you tell me the story of that that time that like oil was negatively priced or something like that or whatever? Yeah. Yeah. What what happens there? Can you break that down?
2:40:03
I honestly I don't remember.
2:40:03
It was like a very temporary thing, but um I do remember so I was actually this that was before I started this.
2:40:10
I was at Bridgewater um and I remember the markets were going crazy and we were you know I was in trading at the time and so people are scrambling to figure out well how do you deal with this temporary dislocation where as you're saying prices were literally negative people trying to roll contracts and uh it was mostly just chaos.
2:40:27
Yeah, it seemed like something where like you could make money, but there was always a risk that you would have to receive the oil and then they'd be like, "Okay, like you're getting a thousand barrels of oil delivered.
2:40:38
Do you have a warehouse for that?" Exactly.
2:40:40
Good luck finding out like 100,000 if you went in with size. Um, yeah.
2:40:45
So, uh, uh, what else are people tracking in the news if you're trying to understand where oil markets go?
2:40:52
Obviously that straight of her mu herm's story is important, but is there is there a narrative around uh oh, we have a strategic reserve that we might unlock.
2:41:00
There's other sources that might come online.
2:41:02
How do these things work out?
2:41:04
I feel like there's always this um this back and forth between the various major players uh kind of jostling to keep the price at a reasonable place for everyone.
2:41:14
Yeah, I mean I think that's right.
2:41:16
And I think the other thing is with producers obviously the higher the price the more they want to they're incentivized to to kind of um export or drill or what have you.
2:41:23
So so they're also definitely keeping an eye on that.
2:41:26
I think um you know from from the US perspective there's no real super fast supply unlocks is the problem right cuz to spin up a new well or something you're going to take you know 6 months or so.
2:41:36
And so people are keeping a close eye.
2:41:39
They're probably starting to get ready for that but they want to see how this plays out.
2:41:42
like if this conflict is mostly goes away in the next couple of weeks then you know it's going to be much to do about nothing really.
2:41:48
Um if this extends or again if more drastic actions taken that's where you know we could see something different change.
2:41:54
Um and so I think I think it's mostly in a wait and see now from from the people that I've talked to and again I'm more in the downstream space but from their perspective on the upstream um it it's mostly a waiting game right now. Yeah.
2:42:08
how uh um what pieces of the entire oil supply chain are still on paper the most?
2:42:17
Can you actually walk me through?
2:42:19
I'd love I'd love just like oil 101.
2:42:21
Like I know it's it's not dinosaur bones, but it's something close to that. It's in the ground.
2:42:27
It gets dug up and then it goes on a journey.
2:42:30
Walk me through that whole journey and kind of like what the different players are. Yeah, absolutely.
2:42:34
So you're like you're saying you're you're extracting that raw crude out.
2:42:38
Um and then that is again your Exxon Mobile or you you have smaller players in the Perium Basin or things like that that that is then going to refineries and those refineries are processing the raw crude into its various components.
2:42:52
So that's not only just like gas and diesel but that could be you know end up in plastic and other things like that.
2:42:58
So you're separating out the pieces from there.
2:43:00
It's either, you know, via pipeline or via barge moved around.
2:43:06
I'm again talking US specifically um to there's about 1,200 terminals around the US. Oh wow.
2:43:11
That's then sitting in those terminals until a wholesaler or a carrier comes and picks a f a load of fuel up and then goes and delivers it ultimately to again gas stations, airports, homes for home eating, whatever you have.
2:43:25
Um and there's a lot of paper, right?
2:43:28
So, so in a single load for one of those deliveries from the terminal to an end store, you might end up with, you know, a bill of lighting, a delivery ticket, maybe you've got two bills of lighting.
2:43:42
You end up with a supplier invoice a day later, maybe a freight invoice.
2:43:43
You could have four or five different pieces of paper.
2:43:47
They're all coming in differently.
2:43:48
A couple of them are going to be pictures from a driver's phone that are emailed in.
2:43:52
Um, so you can imagine it's it's a little bit hard to process all of that and keep track of everything.
2:43:58
How does the overall uh industry and various players in gas process uh what will be maybe not ever a a total phase out of of gas cars, but you know what what is you know California had like a this ban in place for banning the sale of new gas cars past 2035.
2:44:20
Sounds like cold dead hands. Yeah.
2:44:23
No, I mean there was a massive amount of push back.
2:44:26
um uh from from the president uh as well as Congress.
2:44:30
So I don't think that necessarily is happening as of now.
2:44:32
But is there does the industry try to you know oil isn't going away has a bunch of different uses.
2:44:39
Gas isn't going away again has a bunch of different uses just other than just getting a car from point A.
2:44:46
Just look at the Nurburg Ring Times.
2:44:47
It's obvious it's not um but I'm but I'm curious like if there's any sort of like highlevel discussion around you know because many of these companies have been in business for so long you know if you've been in business for 100 years you should be thinking about the next
2:45:00
hundred years right it's reasonable yeah absolutely sorry sorry I accidentally tossed the iPad off no it's appropriate the idea of having of not having a naturally aspirated V12 at my disposal is booy booy but break down the evolution of the industry Yeah. So I
2:45:16
So I think um you know you have at the upstream space you have them exploring alternative energy a little bit right.
2:45:24
So you had you know BP was exploring carbon neutral fuels and a lot of these thing they've been exploring them and I think you know you you've talked to people um you know like Valor Atomics who are exploring that as well and so I think there's definitely interest there and so um that's one piece.
2:45:39
There's also another piece which is like on the kind of gas station side, you have these EV chargers which in some ways are helpful because it, you know, takes 10 or 15 minutes.
2:45:49
Someone's more likely to go into the gas station and the vast majority of gas station revenue is actually from inside the store. It's not the gas.
2:45:55
It's, you know, that's break even if they're lucky type thing.
2:45:57
Um, and so you have some of that as well.
2:46:02
And then um honestly you look at the projections out to 2050 from from the US government you don't see that much of a decline because just as as people are wealthier they want to travel more they want to own a car and so so it's honestly more of an unlock than anything
2:46:18
else and so as long as the US keeps growing I expect to see demand to keep growing you know you have a little bit of a slump but in the order of 1 to 2% as opposed to this giant you know cliff that you're going to fall off of anytime Yeah, that makes a ton of sense. Uh,
2:46:32
Uh, anyway, thank you so much for stopping by. This was fantastic.
2:46:34
Thank you for being our gasoline correspondent. Yes.
2:46:38
Our oil and gas consultant.
2:46:38
Straight from the oil fields of America. Yeah. Yeah.
2:46:41
Can we call you a rough neck? Exactly. Yeah. Show me. Vertical SAS rough neck.
2:46:46
Vertical SAS rough neck in the trenches.
2:46:48
Thank you so much for stopping by. We'll talk to you soon.
2:46:51
Thanks for joining, Miles. Cheers.
2:46:53
Up next, we have Alex from Meridian coming into the studio. Uh, former size lord. Former size lord. Break it down.
2:46:57
I think he was in PE, Toma Bravo, maybe Black Rockck.
2:47:02
I've met him before a couple years ago when he was just getting the company off the ground. So, have him in here.
2:47:08
Welcome to the studio, Alex. How are you doing? Hey guys, doing well. How are you doing? What's going on? Not much.
2:47:14
It's been a big week for me.
2:47:17
We uh we're launching our uh seed round publicly.
2:47:20
I had a baby two days ago.
2:47:22
My first launch gone for that. Two. Two. We need two.
2:47:26
Wait, how how much did the baby weigh?
2:47:29
The baby was 7 lb and it was a 7 million.
2:47:33
7 lb in a $7 million seat.
2:47:36
That's the number of the week. Amazing. That's great news. Congratulations.
2:47:39
I saw a tweet the other day.
2:47:41
It was like the new fundraiser announcement stack and it was like, you know, tech crunch is out.
2:47:43
You guys are in I think what it was the New York Times, right?
2:47:48
You would say marriages, deaths, births.
2:47:50
So happy to be announc the new thing is baby baby announcements announcements.
2:47:56
We definitely have to do that.
2:47:57
We need a different different prop for that. Well, congratulations.
2:47:59
Uh it must be a absolute blur of a week, but it's great to have you here.
2:48:06
Are you Are you Are you calling in from Miami?
2:48:07
Where are you based these days? I'm in Miami. Yeah, I'm at home today.
2:48:10
Um company's based between New York and Miami.
2:48:12
We have sales and customer support in New York.
2:48:15
I'm down here in Miami today.
2:48:15
I'm wearing shorts cuz, you know, I'm here supporting my wife as well.
2:48:19
So, throw on a blazer, but there I'm not going to stand up.
2:48:23
Uh but anyway, break down the break down the pitch of the company. How are you pitching?
2:48:28
Yeah, and quick and quick backstory too.
2:48:29
People need some context and then go into the company. Yeah, for sure.
2:48:32
So, I spent about 10 years in private equity.
2:48:34
I was at big firms like CBC, Blackstone, and Thank you. Thank you. Thank you.
2:48:38
He doesn't get enough credit. Thank you.
2:48:40
And uh I would say one of the common themes of that career was just wrestling with terrible software pretty much across the stack.
2:48:48
It was like software that was built in the '90s had kind of been pushed into the cloud and was really never kind of modernized.
2:48:54
And I think a lot of that was cuz private equity as an industry was kind of an SMB for software companies.
2:48:59
It was like five or six guys in a room.
2:49:01
It was like Henry Kravis and George Roberts, you know, size lords doing a couple of deals and the economics were great.
2:49:06
So you never had to make it more efficient.
2:49:08
You never had to figure out how to use software.
2:49:09
Um, and there was this promise of the private equity CRM that was basically it's got all the context of who you're meeting with, the deals that are crossing your desk, all these pitch decks, all this information, but none of it was being harvested into an intelligence layer.
2:49:24
And so firms would spend hundreds of thousands of dollars implementing Salesforce and then they'd use it like an Excel spreadsheet, like who's working on what deal, we got to tick through them.
2:49:34
Um, and you know, that was about it.
2:49:36
There was no like insight that was coming out of it.
2:49:38
And so what we do at Meridian is we combine the concept of CRM with a massive third party company data set and an AI agent called Scout that essentially is the power user of the CRM and the data set.
2:49:50
And so what Scout does is it goes out, scour all of the information on private companies that's out there.
2:49:55
And there's really never been more of that.
2:49:57
And really helps you focus your mandate on the ones that you are actually going to invest in and then pulls in all that context that's in your inbox uh that's on your calendar that's in your investment committee memos and helps you focus on the 10 companies in your space in that kind of specific thesis you have that you need to get in front of.
2:50:15
Helps you set up those meetings and helps you kind of get in front of them faster ahead of your competitors.
2:50:19
Talk about the structure of the market.
2:50:22
Is this the kind of business that you basically need to get every customer right or at least all the the the truly big logos in order to build, you know, a nine figure revenue business?
2:50:32
What what does that look like? Totally.
2:50:34
You know, when I first started the company, people said, you know, obvious right people want a better CRM and private equity, but small market, like how big can it get?
2:50:43
And I think what we've discovered is actually just how deep the market is.
2:50:46
There are so many private equity firms.
2:50:48
They've never, you know, it's a really fast growing industry, but it's also a broadening industry, right?
2:50:53
There's there's private credit that's just going through explosive growth growth.
2:50:56
Hedge funds that are doing private deals now and kind of combining private and public.
2:51:02
Um, there are family offices.
2:51:05
There are this whole universe of sovereign funds, LPS.
2:51:06
And so, we've been lucky to kind of sell to each of those constituents.
2:51:10
And I mean, do solo operators or like scout funds like the the HBS grad who's going to go out and buy a a a window washing business? Does that fit?
2:51:19
I mean, we literally have hundreds of HVAC rollups on our suddenly seeing for HVAC HVAC rollups very quickly. That's amazing.
2:51:28
Uh h how does value acrruel work in the industry?
2:51:34
I imagine that the data brokers and the data providers want their pound of flesh.
2:51:39
than the private equity firms.
2:51:39
Uh not notorious for being loose with the pocketbooks.
2:51:45
Uh not exactly, you know, they're like they're they're they're going to try and extract as much value as possible.
2:51:51
So you're kind of sitting in between those two.
2:51:53
Uh how do you not get squeezed?
2:51:55
And what's the fair take rate between these three kind of parties in this in this deal?
2:51:59
Yeah, it's a great question.
2:52:01
You know, when when I started the company, I kind of had this thesis that we were going to have to charge a huge amount for all of this live data on companies.
2:52:08
But what's happened with AI is that actually that data is so commoditized now.
2:52:12
Like you used to pay 7,000 bucks a seat for a pitchbook license.
2:52:17
And what Pitchbook would do is basically structure all this publicly available data around, you know, who invested in which company, how many employees do they have and put it in a database for you.
2:52:26
You can get all of that information with good prompting now.
2:52:29
And so we actually have our own proprietary data set.
2:52:31
We use AI to kind of scour all of that stuff.
2:52:33
We feed it directly into the platform.
2:52:35
And so what used to happen was associates would just, you know, copy and paste information from PitchBook, throw it into Salesforce, and, you know, it was just this kind of dumb database that you had to manually update.
2:52:44
Now we're able to just package all of that into the software.
2:52:48
And so we do work with a few of the data providers.
2:52:51
Source Scrub is one of them because they do have amazing proprietary data, but for the most part, these databases are, in my opinion, going to become incredibly commoditized over time.
2:53:00
What is what is LinkedIn's role in the industry right now?
2:53:02
I feel like LinkedIn has an incredible amount of data.
2:53:06
I've seen growth equity investors look at headcount growth as a hey, maybe I should give them a call. Yeah, I know.
2:53:13
I know venture investors that track this and they know a company's cooked long before the headlines are coming out all the time.
2:53:21
When you see, oh, there's two competitors and one's growing headcount and the other one's not.
2:53:23
And yeah, they both raised at 5 billion a couple years ago, but one's actually compounding.
2:53:27
I mean, not that headcount growth is really like it's kind of a vanity metric.
2:53:32
could be a bad signal, but it's usually enough that people care doing truly poorly don't tend to 10x headcount in a couple years. Yeah.
2:53:40
Uh so, but but I've always been interested in LinkedIn.
2:53:43
Back in the day, you used to have an API.
2:53:44
You used to be able to scrape it very liberally.
2:53:46
I'm sure it's way more locked down.
2:53:47
Is this like just walk me through like even trying to get access? Is it is it available? Is it pricey?
2:53:52
Uh what is the dynamic with LinkedIn?
2:53:55
Yeah, LinkedIn data is is is a great data source.
2:53:59
Headcount data is probably one of our most requested kind of numbers that we we throw on every company profile.
2:54:03
Another one is glass door reviews.
2:54:05
People want to know, you know, is this a good place to work.
2:54:06
Are the account executives hitting quota?
2:54:08
If they're not, you know, that's a bad sign.
2:54:11
Um LinkedIn, you know, they continue to try to lock the data down.
2:54:15
Um so that these web scrapers can't hit it.
2:54:18
But we do actually work with a couple of really good LinkedIn scrapers.
2:54:21
That's, you know, our data sources that we buy it from.
2:54:22
They're just, you know, trying to be one step ahead of of the LinkedIn algorithm.
2:54:26
I think not expecting that answer. Totally.
2:54:27
I mean, they try to pay wall as much as they can, but there are always ways around it.
2:54:33
And frankly, I'm surprised that LinkedIn hasn't just API that data and started to sell it because it really is an incredible database that you can start using.
2:54:40
But I guess they're just not because like they they they will let you pay for a human seat and look at everything, but if you want to automate it, they're they're not as friendly. 100%. Yeah. Interesting.
2:54:50
Uh Jordy, any other questions?
2:54:53
Uh I'm curious if you have any insight.
2:54:55
We have a friend of the show that was posting this morning. Oh, yeah. I was gonna ask this. This is good.
2:55:01
Uh, I'll pull up the post.
2:55:01
You probably have crossed paths with him at some point.
2:55:05
This is carried no interest. Uh, he's a non.
2:55:08
He says, "Uh-oh, it is happening about two weeks ago.
2:55:10
I started getting five plus emails a week saying the same thing.
2:55:14
The VCs are ready to start selling.
2:55:16
The insane glut that is the 2021 to 2022 vintage might start moving soon. VCs DM me. I have dry powder."
2:55:24
And he says a screenshot.
2:55:24
Are you guys still buying software companies?
2:55:27
I have a wellrespected VC firm that is finally wanting to part with a bunch of their good, not great assets or portfolio companies. Are are you seeing this?
2:55:35
We hear about this for a long time, but there's always a question of like when will this actually happens?
2:55:39
And I'm sure I'm sure back in your day you you bought I imagine you you acquired ventureback companies that were good but didn't quite, you know, weren't necessarily going to go public or anything along those lines. Totally.
2:55:50
I mean, I think the 2021 vintage is is challenged for sure.
2:55:54
And I think we're seeing a lot of, you know, private equity firms just they're going to have to hold those deals for a long time.
2:55:59
They're marking them at 1x cuz they have that luxury, but to really grow into value, it could be many years.
2:56:03
And I think that's so even so that's on the but but the but what I was calling out is venture funds are sitting there with a bunch of software businesses that they want to sell to PE.
2:56:12
So the challenged uh you know vintage and ventures trying to sell to you know effectively a 2025 or 2024 vintage on the private equity side. Totally. No.
2:56:24
And I think that's going to happen more and more. The IPO windows closed.
2:56:27
Private equity is sitting on a lot of dry powder. They got to buy stuff.
2:56:30
And I think those VC funds are going to see you know definitely value impairment, right?
2:56:34
Private equity are not paying the type of let's say ARR multiples um that they probably invested in.
2:56:40
But there's a lot of great IP that's out there.
2:56:42
I think for the right private equity firm to come in, buy the IP, probably roll together a few of these things, I think it's actually going to be a great strategy and I'm I I definitely see private equity firms getting more creative um with how they want to work with some of these early but uh you know really highly valued companies that got over their skis. Awesome.
2:57:00
Well, thank you so much for joining.
2:57:01
Congratulations on on the new baby and the seed round.
2:57:03
Uh it is big week for you. Yeah, congrats. Come back on again soon. We'll talk. Bye.
2:57:13
Up next, we're covering our breaking news with Andre and Horowits.
2:57:18
They said they wouldn't do this deal, but they did.
2:57:21
They said it was impossible.
2:57:23
The chattering the chattering masses said it wouldn't it wouldn't get done, but it did.
2:57:29
And we have Who do we have in here first? I think Brian.
2:57:34
Um, apparently Brian and Roy are both in the waiting room.
2:57:36
I don't know if we want to let them in at the same time.
2:57:38
Have them go back to back.
2:57:38
What are you thinking, Jordy?
2:57:40
I think we start with Brian.
2:57:42
Give the level anatomy of the deal.
2:57:44
The anatomy of the deal and then we bring in Roy and we just go crazy.
2:57:48
Brian, welcome to the studio. How you doing? Good to meet you. Good to meet you. Great to be here. Thanks, John. Thanks, Jordy.
2:57:54
Your notifications must be crazy right now.
2:57:56
Clearly, you guys decided, hey, Friday, let's let's throw it out. Over the time, right?
2:58:01
Nobody's crazy to launch.
2:58:03
Everyone's going to going going on a weekend. Yeah.
2:58:05
There's no other Andre deals that are really taking up mind share right now. This is the one.
2:58:11
Yeah, you guys you the the the thinking machines was leaking to the world the two billion and of course clearly it's just going to suck all the attention out of the room. For sure. For sure. This is the hot one.
2:58:21
Anyways, uh we got we got your we got your launch post here that we read through briefly earlier on the show, but why don't you break down uh background on you and then let's break down the deal, why you invested, and then then of course we're going to have Roy on in just 10 minutes. Fantastic.
2:58:36
Uh background on me, been at A6D for four or five years.
2:58:38
Look at a lot of AI applications.
2:58:41
You met a bunch of my colleagues here and had them on already.
2:58:44
invested in 11 labs functional health of the world and prior to this uh was a was a snap uh as early employee and was a CFO.
2:58:51
U yeah 5 years no I'm in New York right now but uh my heart is in LA. Okay.
2:59:00
Yeah, we got to get you back. LA's uh LA's coming up.
2:59:02
It was too too nice to live you know.
2:59:04
live you know. Um all right so deal uh rational uh anatomy of deal or as you said the anatomy break I think it like really really breaks down to a couple things but really three points one is you know distribution it's really really hard to get distribution these days and
2:59:20
to get it repeatedly is a little bit of a dark art yep and so I think uh Roy have that in in abundance so one got the distribution we invest for strengths of strengths as you know not lack of weakness and so that's really exciting for us Um, second, I love the product. Um, you know, I grew up on Dragon Ball
2:59:38
Um, you know, I grew up on Dragon Ball Z. Yeah.
2:59:40
And I always wanted one of those scouters that tells you how strong is Jordy, how strong is John, like the thing goes up, right?
2:59:46
And, uh, that's essentially what it is on your web browser, right? Talking to people.
2:59:50
You just do a quick command enter and it just gives you all the things you need to know while reading it and looking into your eyes. I think that's special.
2:59:59
I think that sort of is right for a lot of the use cases, whether it's consumer or enterprise. So, I love the product. Mhm.
3:00:05
So, that's that's one thing I'll I'll call out.
3:00:07
Today, we've had our intern uh over on the intern cam testing testing the product all day long. And I've been impressed. I've been impressed. He's there. There we go.
3:00:14
How are you liking it so far?
3:00:17
Yeah, it's been really good.
3:00:19
I mean, it it's very fast.
3:00:21
Uh the answers are really good.
3:00:21
I I think it's like a great product. That's amazing.
3:00:25
Out of 10, what would you rate it?
3:00:27
Why are Why did you put it in a car? Nine.
3:00:31
Uh it's our version of kind of like the the the office in a box. What do they call this? The quiet room. Yeah.
3:00:35
A lot a lot of people have like these toll booth or like you know phone booth style live in the pod and our version of a pod is a Maybach. Yeah.
3:00:46
It's very perfectly it's perfectly soundproof.
3:00:48
So when we don't want to hear him he just rolls up the window.
3:00:51
He just he just rolls up but he's got a D a desk in there.
3:00:53
Uh he's got a comfortable setup. Phenomenal.
3:00:58
Phenomenal massage chairs.
3:00:58
Good, good, good ergonomics. Yes. Thank you. That's right.
3:01:05
So, we've we've had uh Roy on the show a couple times.
3:01:08
We've covered some of the various stunts and we got some push back one of the times we had him on because we hadn't used the product and somebody was calling us out and now as a company we're paid we're paid subscribers of Cle. We're customers.
3:01:22
customers. throw you can throw the TVPN logo on the site and I've been I've been impressed like we we were kind of firing back questions using it more in that interview functionality and and the answers were very good guesstimates of
3:01:36
of you know if somebody that had generalized knowledge on a topic being able to answer quickly and he actually better question on it answer it answered the 747 question better than my chatbt 40 direct question clearly mogged clearly mogged 03 yeah Yeah. Yeah. Yeah. Whatever.
3:01:52
Whatever the f whatever I was 03 03 love that but it did well.
3:01:54
Um I guess the last point I'll just add on is you know it's a you know revenue conversion.
3:02:01
A lot of people think oh it's just hype and what's happening is it all distribution all the stunts.
3:02:08
The truth is that he he is actually converting that to revenue right whether it's consumer or enterprise.
3:02:11
So that to me is sort of the I guess the seriousness that underlies the crazy stunts that people see outside.
3:02:18
And that combination works for me. I'm excited for it.
3:02:23
Um, and you know, let's go. Let's go.
3:02:26
Let's go back to the first one.
3:02:28
Uh, Royy's clearly great at distribution, breaking through, getting attention.
3:02:32
It feels like earned media does have a cap versus paid media or brand marketing or some of the other flywheels of, you know, referral programs or or or, you know, some viral mechanic. cap, John.
3:02:48
He's going to be in front of Congress, you know, using Cl and some spectacles.
3:02:55
Cheating when he's dragged in front of Congress, you know, for antitrust.
3:02:56
Do you think it has a cap or or or and and because you could one one scenario is is this is his this is not this is not his uh this is not his permanent go to market motion.
3:03:09
It's it's merely the beach head.
3:03:10
It's it's the way to break through, get attention, hire the first 50 interns, but the next thousand interns will come through recruiters and kind of standard practice and he'll be on a more traditional podcast circuit when he has news.
3:03:21
Uh, but we won't be hearing from him every single day.
3:03:23
Uh, the other is that maybe we're in a new era and he actually can and the company can go viral every single day and you're seeing kind of the the Mr.
3:03:31
Beast playbook in reverse instead of Mr.
3:03:33
Beast going viral every day and then launching a uh a snack brand. uh the other way around.
3:03:41
So he's builds a company and then becomes famous on the back of that company.
3:03:45
Uh which one of those feels right to you?
3:03:48
Yeah, I think uh maybe I'll just comment one, Mr. Beast follows Roy.
3:03:52
So that that's fun fact one. That makes sense. Fun fact two.
3:03:56
I think from a media and audience perspective, John and Jordy, I think I think of it as like a bunch of oceans. There's no one ocean.
3:04:05
There's Indian, Pacific, Atlantic, and that's Twitter, you know, Facebook properties as well as like, you know, more organic.
3:04:12
And all of these pools of water are very, very deep. Yeah.
3:04:14
And in terms of general population, who I lovingly call our, you know, consumers.
3:04:22
I still think it's so early.
3:04:22
The only consumer AI product people are using are really chachi PT. Yeah.
3:04:27
And for them to actually learn about products like this and use it, I think the the the sort of oceans way deeper than we imagined and we're just scratching the surface today.
3:04:39
Talk about calculated risk there.
3:04:39
This feels, you know, this is a calculated bet.
3:04:44
You guys invested 15 million in the company.
3:04:47
He's clearly talented on the product side, clearly talented on the attention side.
3:04:52
You know, he's charismatic, he's fun to talk to, he's well spoken, all these things.
3:04:56
So there's a lot of reasons to love it.
3:04:58
And then the the push back and and other other VCs that maybe didn't do the deal would say, "Oh, Roy's like a wild wild card."
3:05:06
Like do do you think that more investors need to be comfortable with like a very potential real risk and and and maybe the average VC has just gotten a little soft? Two things I think.
3:05:16
Look, like if you think of the history of large general population products, you see a lot of them actually being pretty risky early on or not for Facebook. Where does Snap begin?
3:05:29
What was, you know, uh, Reddit initially?
3:05:32
And sort of think of thinking about that.
3:05:34
I think there's a beginning of a lot of the consumer products and products that are used by many people have a funny beginning sometimes.
3:05:41
And I think so one calculated risk site, we're comfortable with that.
3:05:45
with that. And I think second thing is when I you know I have a saying where momentum is a moat today in this sort of era of AI applications and when I say momentum is a mode I don't mean just distribution I also mean product iteration
3:06:00
and so the calculated risk here is that Roy can convert this awareness into people clamoring to work at the company that are highly high and exceptional great great people to build products and then use that to continue to iterate on innovation on the format that is already amazing. So that's sort of the bet if
3:06:16
So that's sort of the bet if you will and when those two come together I think we'll be surprised.
3:06:20
How do you think about uh restrictions or dynamics from the major like big tech companies?
3:06:27
Because you mentioned that you know there's a consumer angle here but when I see the product I see it as a desktop app and many consumer interactions happen on the phone.
3:06:39
And so, uh, you know, Roy was fantastic at creating a viral moment around the idea of like using Cloey on a first date.
3:06:47
Uh, and yet you're not going to have a first date over a Zoom meeting on your MacBook Pro.
3:06:56
Maybe maybe Royy's planning another pandemic. Yeah, May maybe.
3:06:58
But but but but but people do talk to each other on the phone and on FaceTime, but it's much harder to plug in and do screen recording and do uh picturein picture and all of that.
3:07:11
So it feels like there needs to be some sort of transition point if you're going to go broader to killer use cases for consumer.
3:07:18
Um but at the same time, you're going to bump up against a ton of push back from the platforms who just say, "We don't want to give you access to that API.
3:07:27
We don't want you to screen record for for for privacy reasons good or bad. So I don't disagree.
3:07:33
We are techno optimists and I would believe that there will be another innovation that actually allows the likes of Culy to live and be omnipresent in everyday interaction.
3:07:42
That said, you know, AI is like a digital god we created and we trapped it behind a little chat box. Yeah.
3:07:48
So it is natural to me that it should live on a thing that you actually work and interact with the most.
3:07:55
And we're starting with computers today because that's where the power is.
3:07:59
Like that's actually the digital god is not godly enough on the little little, you know, uh little devices today.
3:08:05
So we put it in a little larger box. Yep.
3:08:08
And the little boxes will get better and we're excited for that future. Awesome.
3:08:11
Well, I'm excited for you guys.
3:08:14
Congratulations on the deal.
3:08:16
And we got to get Roy in here.
3:08:16
We should pull up we should pull up the launch video as well.
3:08:19
But thank you for joining. Thanks for having me.
3:08:20
Ryan, thank you for being bold and making real bets.
3:08:24
probably had to fight it out with American Dynamism team because as we know they're working on hardware.
3:08:29
They're working on reindustrialization.
3:08:31
They're doing everything over there.
3:08:31
Uh thank you so much for stopping by. We'll talk to you soon. Cheers. Bye.
3:08:34
Next up, we have Roy from Cluey, the man himself.
3:08:39
Third time in the studio, third time on TBPN.
3:08:41
Welcome to the stream that ready. Let's bring him in. Let's hope he's ready. Roy, give us the news.
3:08:47
Give us the headline number. How are you doing? How much did you raise? 15 million dollars. Clean hit. Clean hit. Um, congratulations.
3:09:02
Uh, why'd you raise money?
3:09:04
I thought you were printing so much money.
3:09:06
You didn't need to raise ever. What happened?
3:09:07
We're printing money, but we need more money.
3:09:09
We're trying every single day.
3:09:11
We're looking for things to spend money on. Okay. Okay. Uh, uses of the funds.
3:09:15
Uh, what are you going to spend on first?
3:09:21
14 million for brain computer interface development. Exactly. Exactly. Exactly.
3:09:25
We We have whatever you thought the viral content you thought this was cool, bro. We're doing 10x this. Okay.
3:09:30
More videographers, more more after more editors, more engineers, more everything, please. Moss. Moss. Yes. Let's go. Yeah.
3:09:42
What's the morning routine like now over at CL?
3:09:46
Everybody wakes up and we swipe on Hinge for 30 minutes. is mandatory.
3:09:49
Everyone swipes on Tik Tok, Instagram for an hour just to make sure the viral senses are refreshed.
3:09:54
And we we uh we we all do cold plunges and we're we're ready to hit the day with um with caffeine.
3:09:59
If you if you cold plunge though, does it negate like the the brain rot?
3:10:03
Like do you get to or is that is that intentional of like relocking like you know we we we we scroll to keep our viral sense up, but after that is is time to get to work.
3:10:14
We're a serious company, you know.
3:10:15
We're not just we're not just trolling over here.
3:10:16
Okay, that's good to hear.
3:10:18
Uh, talk to me about the Hinge use case.
3:10:19
I want to hear uh Clue's desktop app, you're not in the app store.
3:10:23
If I'm if someone's using Hinge on their phone, how are they gonna take advantage of Cluey now or in the future?
3:10:29
I mean, every single time you screenshot something and ask Chatbt anything.
3:10:33
I mean, like this entire use case like it is ridiculous that I have to do this like AI can already take the context of your screen and audio and and and and give you information out of it. Why can chatb. com not use this?
3:10:43
Why is the main AI use case not already aware of what's going on on your screen? We think this is crazy.
3:10:49
Yes, but it's but but it's locked down for privacy reasons on the iPhone.
3:10:53
So the question is like what user interface innovation are you going to bring to bear on the phone so that you can actually unlock the vast majority of consu consumers who are realistically not using the most popular consumer apps on their desktop.
3:11:10
I would I would push back on whether we even have to enter the phone at all.
3:11:14
really the technology is growing so fast.
3:11:15
We might just be able to skip phone entirely.
3:11:17
We might be able to skip classes entirely and like like whatever it is, I think the technology is growing super fast.
3:11:24
Like like I think phone like in five years, I would question whether phone is the dominant consumer use case. Okay.
3:11:29
Uh I I I I get that you're BCI pill.
3:11:32
It still feels a few years out.
3:11:34
The meta-bands feel very much here today.
3:11:36
Uh have you looked into those APIs?
3:11:39
How developer friendly is the Meta Rayband ecosystem versus the iOS ecosystem versus the MacBook Pro ecosystem, which seems to be where you're flourishing right now.
3:11:49
I feel like you're going to have a really hard time on iOS.
3:11:53
Uh no matter how cracked your engineers are, Apple is just going to say I think I think Roy, if anybody can cook Cook, I I I won't I won't put it past you, but it feels like the Meta Rayband ecosystem might be a little bit more open.
3:12:06
What are what's your read on the Meta Ray-B band or the Meta glasses roll out?
3:12:11
They just had an announcement this today.
3:12:13
My read is that there is way more money in an all-in desktop assistant than people actually think.
3:12:21
There's maybe two, three competitors in this, maybe maybe two, three competitors who are actually trying to take a meaningful stab at a desktop assistant.
3:12:28
And there's way more money and way more value in this than people think.
3:12:29
We're still going to be using computers in a few years.
3:12:32
Maybe we'll be using something else.
3:12:34
But like like enterp bro these sales Oracle, Adobe these guys move slow as bro.
3:12:37
Like they will be using Blackberry still, bro.
3:12:38
Like they are moving slow.
3:12:40
We're going to have computers unlock a bunch of enterprise value for the next few years and we'll be here to capture all that. Yeah.
3:12:46
So I mean I I I get that the it I mean it feels like this is going towards uh enterprise note takingaking, enterprise assistant and and and would have a very positive.
3:12:56
Yes, you use the cheat on your technical interview as like a viral hook, but you know, we're we're having our intern demo cluey today.
3:13:06
And you could see that if we're on a call, just having answers be pulled up ambiently is valuable.
3:13:10
There's obviously a bunch of, you know, bots that plug in and listen and record your emails, but being more proactive seems like a step forward.
3:13:19
Uh, it begs the question, why are you in the consumer group in Andre?
3:13:23
I guess that there still is a consumer angle long term, but how are you seeing Cluey users adopt the product?
3:13:31
It feels like the logical cases at work on the desktop. Yeah.
3:13:36
Well, of of I mean the question is how are Clue users using the product? Yes.
3:13:40
Most people it is most helpful in a meeting.
3:13:42
Right now there's no product on the tool that gives you live assistance during a meeting.
3:13:45
That's where all the proumer and enterprise values mo most proumer and enterprise value is being derived.
3:13:50
Other than that, you're the gigantic consumer.
3:13:51
The most viral use case ever of literally cheating, bro.
3:13:55
Like, like like answers you questions and like what even when you're doing homework.
3:13:58
I mean, like just immediate, bro.
3:13:59
Like, you do all your homework instantly when you're doing quizzes, assignments, when you're watching lectures, bro. Immediate, bro. Just immediate help. Immediate on site. Um, yeah.
3:14:08
Got to give a shout out to the whole team.
3:14:10
We we we were reviewing Cluey throughout the show today.
3:14:12
We're pretty impressed with with the product.
3:14:16
Um, I think a lot of people that are yapping on the timeline, haven't tried it yet.
3:14:20
And I think anytime going forward somebody leaves a negative comment, just say, "Hey, totally understand how you might think that.
3:14:28
Why don't you just use the product for 5 10 hours and then come back and let me know if you feel the same way? Get a user out of it."
3:14:33
Uh, talk about the process for for the round.
3:14:37
You you did you you raised a seed round not very long ago.
3:14:39
You know, did this come inbound?
3:14:42
I will say right now to all the VCs watching, if you ever are trying to get a round, you get me an email thread and you say, "Hey, let me loop in my assistant and we'll schedule a call in two weeks.
3:14:52
You are not getting allocation and I'll rig up every single one of my friends to make sure you don't get allocation."
3:14:56
Bro, these rounds move so quick. You don't have too much.
3:15:00
Your whole job is to find the alpha and invest quick and early.
3:15:02
Why are you looping an assistant in two weeks?
3:15:05
My partners Brian and Eric, they came with steaks and Coke Zeros to the house direct.
3:15:10
stakes are coke zero guys.
3:15:13
This is how investors need to be.
3:15:13
Your job is to find the album, bro.
3:15:16
Why are you looping in this?
3:15:19
There was a there was a preempt and I think all rounds you need to preempt the bro. Preempted founders.
3:15:26
If you're not getting preempted, just shut your company down.
3:15:29
Even if you're running out of money, if you're not getting preempted, just shut the company down. Shut the company down. That's great.
3:15:33
These rounds are going so quick. Companies grow so fast.
3:15:35
VCs don't have two weeks to loop in your system. Okay.
3:15:39
Uh, what is your underlying motivation for building this company?
3:15:42
I want to be conqueror of the universe.
3:15:46
It is so obvious that AI is going to massively expand what is capable.
3:15:51
And I think like in even in 5 10 years, bro, if we keep growing at this rate, like we'll be on the next ship to Mars, we'll all be living at 400 years old and I'll be jacked till like die.
3:15:59
And in that universe, bro, like these companies will converge into super companies.
3:16:03
And these super companies is going to be me versus Elon vers competing to be guardian of the galaxy, bro.
3:16:08
I'm I'm going to be on top. Okay.
3:16:10
Sounds like you're power hungry.
3:16:13
Uh there's been a criticism which can be a strength. A strength.
3:16:15
Uh the uh there's clearly a subweet about you going around on X uh arguing that you are driven by fame, not greed or idealism. Uh is that true?
3:16:26
To what degree are you motivated by fame specifically?
3:16:33
The only two things that I really care about in my life are working on is working on something that I find interesting and getting the work seen by people of Elon Musk.
3:16:40
These are my inspirations.
3:16:42
Like these people are known by every living conscious human being in the world, man. This guy founded Apple. This guy did Tesla, bro.
3:16:49
Like it's it's the coolest ever.
3:16:51
4,000 years ago, bro, you wanted to hunt big woolly mammoths and bring back the tribe.
3:16:54
There's no more woolly mammoths. There's only startups. Okay.
3:16:58
So, so you're not beating the allegation.
3:16:59
Wait, wait, but but but the more precisely uh if if the best path for Cluey forward is your interns getting up getting tons of social media views, you step out of the limelight because you're managing the company.
3:17:15
People know Cluey, but they don't know Roy Lee.
3:17:17
Is that still a win for you?
3:17:17
Of course, at one point the company becomes undistinguishable from the founder.
3:17:22
What happened with every single big company and it's what is what what will happen with Clue?
3:17:27
Yeah, it's just it's just a unique situation because we we know of Palmer Lucky because of Oculus the product and many people know of Cluey because of you and the and the viral stunts that you've pulled and so you're kind of inverting it and the and the question that the the haters are asking of you is that is this is the long-term goal to build a great product or to build the brand of Roy Lee.
3:17:49
Bro, of it is to change the world in a meaningful way and you don't change the world by going viral a million times.
3:17:55
You change the world by genuinely building a worldchanging product.
3:17:58
Technology changes the world.
3:18:00
I will I will build great technology and every person in the world will watch me do it. Okay. Amazing.
3:18:05
How how big are you going on the content side?
3:18:07
Do you want to get a single video with a 100 million views?
3:18:12
Are you are you going that big?
3:18:12
Is that is that kind of the wrong framework to think about it?
3:18:15
But but I but I imagine you're going to have more, you know, budget than ever.
3:18:19
and and you know it's easy now to get a million views on X on a video uh is is a 100 million views on YouTube the next you know uh challenge I will tell you right now and this might be the the most logical thing I I say on here but the biggest societal shift in maybe human history happened about five years ago when Tik Tok surpassed YouTube in terms of like virality and usage.
3:18:40
All of a sudden, the number of content creators stayed the same and the relative number of content being created stayed the same, whereas the quantity of content being consumed about 100x.
3:18:50
As a result, there is this gigantic gap where there is not enough viral content for people to consume, which is why you see the same subway surfers overlaid on a Reddit store.
3:19:00
You see that a hundred times because there's literally not enough good content out there for the next maybe six months to a year.
3:19:07
Anything you post that has the potential to go viral will go viral.
3:19:09
Which is why you see our marketing team is all influencers with viral sense.
3:19:13
We know we independently all have 20 ideas a day that we know will go viral.
3:19:17
And this extrapolated out over a year will literally generate a billion views a month.
3:19:22
And if you're someone who thinks a billion views a month is not going to convert to to some money like bro you're bro. Go back to school, bro.
3:19:28
Uh a billion views a month.
3:19:28
Is that is that like will you run into a cap?
3:19:31
Is there a set market size that you will saturate and then we'll be seeing Super Bowl ads? I have no idea.
3:19:36
But I'll tell you right now, like like Super Bowl ads, it's it's it's all old.
3:19:40
Like this is the old meta.
3:19:42
The new meta is in content is in short form.
3:19:44
And nobody seems to have captured the the gigantic delta in generating more viral content.
3:19:48
I still think it'd be funny if you forced 127 million people, the number of people that watch the Super Bowl to just watch a video of you saying, "Hello, I'm Roy Lee.
3:19:58
I encourage you to go to clue.
3:19:58
com and sign up for Cluey today." So don't count it out.
3:20:03
Uh but uh anything else you want to share while you're here?
3:20:06
I know it's a big day for you. The timeline's blown up.
3:20:09
You you uh not very many people have the stones to to launch a series A on a Friday, a summer Friday to go headtohead against Meera, too. Yeah. Yeah. And you pulled it off.
3:20:22
Again, I think people worry too much about the little things.
3:20:24
In reality, if you post something that deserves to go viral, you will 100% go viral.
3:20:28
And this will only be true for maybe the next few years, maybe.
3:20:33
And I encourage more people to post.
3:20:35
Most businesses will die not because the product sucks but because you can't get enough eyeballs.
3:20:40
And I think we if we win if and when we win we will show to the world that there needs to be a fundamental difference in how companies are built.
3:20:46
You start with distribution and eyeballs because right now that is where the gigantic delta is.
3:20:51
And if you can't have then you stick with us stick with us for a minute.
3:20:54
I want to play your uh fundraising video live on the stream and then if we have any questions from that I want to ask you please.
3:21:01
So let's play that video. Mr.
3:21:09
Lee, Columbia University has found you guilty of academic integrity violations.
3:21:14
Do you have anything to say? Color grade.
3:21:18
I've already apologized to school, but to be honest, in 2 years, nobody's going to think this is cheating.
3:21:24
Yo, the Andrea wire just hit.
3:21:24
You think it can last us through the summer? Oh, welcome to Clue. Great video. Great video. Congratulations. Banger.
3:21:49
I got to hit the gong again. Very well done.
3:21:54
Very well done and beautiful. Beautifully shot. Like the lighting.
3:21:58
I mean the cinematography you have on very very good very very good nailed it.
3:22:02
Uh anything else for Roy that's it for now in house studio.
3:22:04
It's crazy that you can shoot that in-house.
3:22:09
That that that really is remarkable. Congratulations.
3:22:10
We are excited to follow We just got $15 million. Oh yeah.
3:22:17
Tell us about the fundraising leak.
3:22:18
What's your deal with R for Rock?
3:22:21
Were you able to How much do you have to pay him to shut up?
3:22:25
Man, I I was I was begging him. You guys have no idea.
3:22:27
For the last few weeks, I've been begging this man, please do not leak. Why? Why?
3:22:30
I feel like I feel like it already leaked separately and like having I feel like you would be leaning into a leak.
3:22:36
I was expecting like a collab almost.
3:22:41
I think what whatever leak there could possibly be, I have very strong faith in my ability to make my announcement go more viral. Oh, sure.
3:22:49
This video will go more viral than any leak would have, even if I Yeah. Yeah. Yeah. That makes sense.
3:22:55
You actually don't want to take the gas out of the out of the tank. I love it.
3:22:57
Uh thank you so much for stopping by.
3:22:59
This is fantastic and good luck.
3:23:00
Congratulations to you and the team.
3:23:01
Excited to watch you guys cook this summer.
3:23:03
And hopefully the 15 mil makes it, you know, back.
3:23:05
You know, August, just remember August, it's going to be hard to get the autoresponders will be on.
3:23:11
It's going to be hard to be, you know, get those 24-hour meetings.
3:23:12
Uh and so just make sure you got the runway to September.
3:23:17
And this comes IPO underwriters do not preempt.
3:23:21
So at some point you will have to stop with the preempt everything mantra.
3:23:26
I don't know there's some spack sponsors out there that who knows maybe yeah maybe you'll get preempt spack in the fall.
3:23:30
You know I wouldn't be I wouldn't be surprised.
3:23:34
So you're you're saying it as a joke.
3:23:34
I I feel like it might be in the cards.
3:23:38
Uh we're we're we're going to be tracking it.
3:23:41
Thank you so much for stopping by. Awesome. Great chatting with you. We'll talk to you later. Talk soon. Bye. Wow.
3:23:47
Uh what a sensational run for Roy Lee.
3:23:50
I'm I'm I'm very excited for him.
3:23:50
just getting started too.
3:23:52
Uh and uh I won't I won't dox any uh any particular names but uh Roy Lee is the most controversial guest within my family group chat.
3:23:59
Uh very very divisive part of my family absolutely loves him and is like he is a national treasure and another member of my family is like I cannot stand this guy which is why it's good.
3:24:10
The internet loves people that are you know divisive.
3:24:17
But I did I did I I I feel like uh this was like a more serious interview and I feel like we broke through a little bit more and and obviously like there is the idea of Roy Lee the character who is who can play a character that can go viral and there is the Roy Lee who is like an entrepreneur the man and we got a little bit through and you know I'm fine with either showing up.
3:24:35
I'm I'm actually fine to do an interview with the character and have fun on the stream.
3:24:39
I'm also interested to talk to him, you know, as just a person who's building a company.
3:24:45
And I think we got a little bit of both.
3:24:47
Uh, still, you know, lots of uncertainty.
3:24:48
It's an early stage company, but, uh, I'm I'm rooting for him.
3:24:52
Hopefully, he builds something great and it seems like the product has been pretty good so far. Awesome.
3:24:54
Well, we have Dave from HFZ in the studio. There he is. What's going on? How we doing, y'all? We're doing great. It's been a banger day. Lots of news, dude.
3:25:06
Tough to follow up Roy Lee.
3:25:06
That guy has a lot of energy.
3:25:08
So, we got to we got to we got to bring up Give us some numbers.
3:25:12
Give us how many companies were in the last batch.
3:25:13
We do 10 companies every single time, y'all. There we go. There we go.
3:25:21
Um, give us uh give us uh the audience some quick background on you and HFZ and then let's dive into the batch and talk about some of the companies. Sweet.
3:25:29
So, I'll give a little backstory.
3:25:31
Is it cool if I give like a two-minute backstory? Absolutely. Perfect. We'd love that.
3:25:33
Um, so a little backstory on myself.
3:25:35
Started largest hackathon the world like 10 plus years ago.
3:25:39
was called M hacks at the University of Michigan. Oh yeah.
3:25:40
I dropped out of Michigan and just traveled to different universities helping spread hackathons.
3:25:44
Um then I I had my heart broken.
3:25:48
I quit everything when I lived in monasteries uh for a year and a half.
3:25:52
And HFZ is essentially a monastery meets a hackathon.
3:25:54
Um and so started investing about six years ago now. This is before HFZ.
3:26:00
My third investment was a startup called RAMP that I actually see. Pretty cool.
3:26:06
Um, you should have just you could have just called it quit.
3:26:09
Many people would have said, "No, that's it. I I've done it." But you kept going. You kept going. Congratulations.
3:26:18
Depends on why you do it.
3:26:20
And so our normal investing was going really well.
3:26:21
But then we started thinking like what is the product that these top technical founders actually want even more than cash.
3:26:28
Everyone's trying to invest money in them, but what is the product that they actually want?
3:26:33
And that's how we came up with HFZ.
3:26:33
It's essentially a monastery meets a hackathon.
3:26:36
It's a 10-we monastic retreat where you let go of everything in your life and drop into the zone of your life and build.
3:26:42
And uh it's a lot of repeat founders join our program.
3:26:45
It's the most selective startup residency in the world.
3:26:48
And uh actually the backstory is interesting.
3:26:50
So the first batch was in New York and it kicked off February 15th, 2020.
3:26:54
Um wasn't a great timing to have a inerson people in the same house. Yeah.
3:27:02
And so two weeks in I had to shut down um that like zeroth batch.
3:27:05
But I heard the day that I shut it down, I heard that Taiwan didn't have CO.
3:27:09
So I flew to Taiwan that night in the hopes of keeping this dream alive.
3:27:14
I spent 6 months learning Mandarin, building political relationships, convince them to give me visas.
3:27:19
Then I flew everyone to Taiwan and we were in the first full HFZ batch in Taiwan in the middle of CO.
3:27:25
Was the only country in the world that didn't have CO um and uh that batch worked.
3:27:29
Then my co-founder at the time, Lucy, um Lucy Quo, who started Scale, she was in Miami and she was like, "Yo, Dave, Miami has like a hundred investors for every technical founder, you know, all the technical founders. We bring them here.
3:27:41
Um they're going to have a great time, the fundraising and and everything."
3:27:45
So, we started Miami Hack Week.
3:27:47
Then, we ran two batches in Miami and they went amazing. She was totally spoton.
3:27:50
Um then I decided to go allin on HFZO and we were thinking really deeply about where we wanted to do it.
3:27:56
San Francisco was dead at the time, but we came and visited and it seemed like it was just having the sparks of life uh coming back and so we were between New York and and San Francisco to base it.
3:28:07
We decided to take an early bet in this latest wave on on San Francisco in a big part due to like Gary Tan and the the work that he did like kind of getting the city shifted back in the in the right direction.
3:28:17
And we've been holding on for dear life since then.
3:28:19
We started this uh hackathon in San Francisco called AI Hack Week.
3:28:23
Um which happened to be the week after Chat GPT came out. Um good timing.
3:28:27
You had some bad timing the first time around, good timing that time.
3:28:32
Good timing in Taiwan, good timing in Miami, good timing in San Francisco.
3:28:36
And uh and then the program's just been taking off since we moved to San Francisco.
3:28:39
We've had about uh 35,000 teams start the application to HFZ.
3:28:41
We still only back 10 teams at a time.
3:28:44
It's been 10 teams from the first batch.
3:28:45
It's still 10 teams at a time today.
3:28:47
I I love what we get to do.
3:28:50
We pour our heart and souls into it.
3:28:51
And when you work with 10 teams, you actually deeply get to know um each and every one of the teams.
3:28:55
So So we really love what we get to do over here.
3:28:58
About How many batches a year?
3:28:58
Is it Is it three batches a year? Three. Great. Interesting. Yeah.
3:29:02
I think you know my buddy Evan Stites Clayton from Teespring.
3:29:05
I I I hung out with him very very early and he was like a couple years ahead of me in like the venture world and gave me a bunch of amazing advice that was very very helpful.
3:29:13
Uh but uh the last time I ran into him was he was at YC demo day, alumni demo day, and he was writing a poem about every company that went on stage.
3:29:22
And I was just like I think he was like maybe thinking about investing in them, but I was just like that's a very different way to process and internalize.
3:29:28
And I mean even in the age of AI, it's like the one thing that like the LLM probably couldn't do a good job at. Uh but but great guy.
3:29:35
I mean, have you read the poe? It's rough.
3:29:37
Jokes are rough, but poems it's all it's all rough.
3:29:39
Uh but were epic back then.
3:29:42
That was the the demo days.
3:29:44
I would just read his poem and Yeah. Yeah. He'd post them all. It was great. Yeah. Yeah. Yeah.
3:29:47
Uh but but I want to hear the story of like uh tell me the story of one particular company that particularly surprised you or did something unique throughout a particular batch.
3:29:59
Uh and really take me on the the the story of like what can happen?
3:30:01
What does great look like in the context of this 10e sprint? Yeah.
3:30:05
So the company that comes to mind right away is Open Router.
3:30:10
Um, so a lot of the folks listening probably use Open Router.
3:30:12
It's the top router when you want to switch between models. So Gemini 2.
3:30:15
5 Flash came out and it was like incredible and way cheaper.
3:30:20
And then if you're on Open Router, you click one button and you switch everything over um from OpenI to Gemini or from Gemini to Anthropic.
3:30:25
Um, and if you actually go you can go to open router.
3:30:30
ai/rankings and they have like essentially the definitive usage rankings for all the LLMs.
3:30:34
But to your question, when Alex was in HFZ, this was like fall 2023.
3:30:44
And back then there were only a few models.
3:30:45
And so he took this really contrarian bet at the time that actually there would end up being a long tale of models that people would use when at the time everyone thought it was going to be like one model to rule them all.
3:30:58
Um and and so at that time there there were very few models and this bet wasn't even true.
3:31:06
And actually in the middle of the batch, he almost gave up on that thesis.
3:31:11
He was like, "Man, maybe I'm I'm wrong on this."
3:31:13
But but in the context of HFZ being with 10 other teams who were like on the ground, who were pushing these models to their limits, he ended up like having the right surroundings, the right community and stuff where he actually like stuck with this kind of crazy thesis at the time.
3:31:26
And now if you go to their website, open air, like they're doing like trillions of tokens uh a week.
3:31:33
Um so that one's it's a great story.
3:31:35
We're actually having him on the show soon.
3:31:37
So I'm really excited to meet him.
3:31:38
I've never met him, but uh he seems like an amazing thing. Yeah.
3:31:39
So Alex was the founder of OpenC before you started Open Router.
3:31:42
So that's where I know his name. He was in my YC batch. Yeah. Amazing. I didn't realize that. Yes. Second time founder.
3:31:48
That's such a unique thing.
3:31:49
And you wouldn't like a lot of people don't think that like uh second time founders or someone as successful as him would go through any sort of program.
3:31:57
Usually it's just like straight to series D.
3:31:58
You know there's so many stories.
3:32:01
You did you did Crossman super early too, right?
3:32:02
I remember Dave called me and he's like you got to talk to this company. They're insane.
3:32:09
Uh they were raising on an uncapped note at the time and I was like the whole round uncapped after HF. Yeah. Yeah.
3:32:15
you you you did you did this uncapped round with you know with a discount of course and I was like h I couldn't get on board with the unc uncapped note personally and I ended up having to invest like 3 weeks later like at the at like whatever the series A price and and you're totally right on that one. Yeah.
3:32:29
I I want to talk about uh those repeat founders.
3:32:31
This is something that uh kind of shocked me.
3:32:33
So I I went through YC in 2012 and then or like my my my first company went through YC in in uh summer 2012 when went back through in summer in winter 16 and I was like I'm still like a founder.
3:32:46
I'm still like a startup guy.
3:32:47
But we'd scaled the first company to 50 people and I was very much in manager mode like I had like gray hairs on staff and like managers and and even though we had enough money to hire people there was this big mental shift.
3:32:59
I remember Daltton Caldwell from Y Combinator kind of telling me like, hey, you got to go back into individual contributor mode.
3:33:06
You got to even though you can afford and you're connected enough, you got to do it yourself.
3:33:10
And and through that, it was a wildly different experience and it was really good.
3:33:15
Uh talk to me about some of the shifts that you see in these second time founders going back in to these like, you know, dedicated environments where you're maybe not hiring and scaling and raising a bunch of money even if you can. Yeah.
3:33:25
So about 70% of the founders we back are repeat founders and usually our kind of bar for actually considering them repeat founders is their last company did at least 10 mil annualized. Yeah.
3:33:34
Um and in fact in dispatch you know of the 10 teams five of the founders either built a billion dollar company before this or their previous company was doing 100 mil plus. Wow.
3:33:44
That's very different than the the challenges of repeat founders actually pretty unique to being a repeat founder.
3:33:51
It's like by virtue of their success.
3:33:52
success. their last company they had gone into they were managing you know hundreds maybe even like a thousand people but what that wasn't the recipe that made their first company successful in the beginning they know that and by virtue of their success they're usually angel investing they're advising
3:34:07
startups everyone wants them to speak at their conference they might have families all by then 60% of the teams we back someone has a kid wow yeah very different from that's hard mode and so and so the the challenges they have are different and so actually our our like the residency that we offer is like very different. It's not an accelerator. It's not It's not an accelerator. It's not incubator. It's a residency.
3:34:27
They actually like leave their normal life for these 10 weeks and we subtract everything from their life.
3:34:34
So our whole thesis is while everyone's focused on value ad, we focus on this thesis of recursive subtraction that actually our mantra at HF is the most insidious distraction isn't networking or conferences or this or that.
3:34:47
No, it's the second most important thing in your business. Yeah.
3:34:51
And so founders are so often so good at doing the second, the third, the fourth, the fifth, the sixth, seventh, eth, ninth most important thing in their business.
3:34:59
But the first mo the most important thing in the business is usually a blind spot.
3:35:03
It's usually something that that only that you only see when you force yourself to stop doing everything else.
3:35:09
And then you're like, you're on that second most important thing that's very important.
3:35:14
And you ask yourself that question.
3:35:14
Is this the most important thing in my business right now?
3:35:17
And and it comes up for you and you just can feel it's it's not.
3:35:21
But you don't necessarily have clarity yet. Yeah.
3:35:23
On what the And then and then you realize, oh man, I've actually been afraid of this thing because if I if I go here, I might find out that the whole business doesn't work. Yeah.
3:35:32
So So that's why it's usually there's some fear that is holding.
3:35:36
And so by doing this recursive subtraction, startups just end up like zooming forward because in the beginning of a startup like early stage, you essentially have two things.
3:35:45
You have like your rate of realizations and a lot of this comes by like talking to your customers and then you have a grind and the residency format allows you to increase your rate of realizations and then grind like you've never grinded in in your life before.
3:35:58
It's like it's like pretty insane.
3:35:59
So that's why like in our last batch 40% of the teams broke 3 mil AR by demo day.
3:36:03
So like the results we're seeing like like even if you're Sequoia you shouldn't be able to pick this well.
3:36:09
And I think it would be hubris for us to think like we're getting amazing founders, but I think it would be hubris for us to think it's just that we're we're picking this well.
3:36:16
Part of it is the selection bias.
3:36:16
Um like the set of founders who are repeat founders who are willing to leave their nice apartment.
3:36:22
Most of them have made money on their last startup to leave their nice apartment and move into the residency for 10 weeks. They're serious. Yeah.
3:36:28
They want to birth their life's work.
3:36:30
But the other part of it is that the residency works.
3:36:31
This format of company building.
3:36:33
I think a lot of companies like kind of did it in an emergent way like Apple in a garage, Facebook had the house in PaloAlto, even Devon Cognition had the house in Athetherton.
3:36:43
Um, so a lot of companies kind of do these residencies without fully realizing it.
3:36:48
We've figured out a way to do this to like a whole other level and it works like every single time we're just getting like the the results don't even make sense.
3:36:58
I can I can imagine a conversation, you know, with with a CEO in one of the batches and and they're saying like, "Oh, I'm worried about this."
3:37:04
You know, like, "This thing's working. This thing's working.
3:37:07
This thing's working, etc."
3:37:09
And you're like, "But what are you afraid of?" Yeah.
3:37:10
And they're like, "Oh, I'm not really afraid of anything."
3:37:13
You're like, "No, what are you afraid of?"
3:37:14
And then they're like, "Oh, I'm afraid of this thing."
3:37:15
And then you're just, you know, you're you're effectively the the sensei.
3:37:17
So, we you can't you can't really directly just ask it like that.
3:37:22
you actually have to like stop doing a bunch of the other things that are important but aren't the most important thing.
3:37:27
And it's only when you actually sub subtract over and over and over again do you actually have the space to even realize that you might be afraid of something. Yeah, totally.
3:37:34
Uh we keep coming back to this uh this like X thread about the motivations of the modern Silicon Valley founder by Anna.
3:37:45
Uh I want to get your reaction to this.
3:37:46
Uh she identifies uh a trend.
3:37:46
She says the there's a cultural shift in the startup ecosystem that has moved from contrarian rule breakers and hackers to the overachieving STEM kids for whom being a founder is simply the next box to tick.
3:38:02
And it seems like you have carved out an an area or like a weird I don't even know what like Yeah.
3:38:10
Like just you you you still have to be taking a risk to do what you're proposing.
3:38:15
And I'm wondering if you can comment on that trend as like it's like sacrifice. Exactly.
3:38:23
Like like like uh there are ways to do founder that are high status now and low sacrifice and low sacrifice.
3:38:31
Talk to me about uh the status symbol that being a founder is and how you think about that within the context of your program.
3:38:38
So one of my core values is substance over hype.
3:38:41
And so actually like at HFZ we actually kept the lowest profile possible for the first couple years of the program because in my mind I'm like there's nothing to talk about here until you know we have our first unicorn or you know first company goes public or whatever like I already know a ton of engineers and everything.
3:38:57
I want to just build the best product in the world for founders.
3:39:00
There's no one else building this product for repeat founders.
3:39:03
Um and so that's what I'm constantly focused on.
3:39:06
Um, that said, Jordan, our creative director, who I think y'all chatted to, uh, and then my co-founder, Emily, did convince me.
3:39:14
They're like, "Hey, Dave, there's like nothing online about HFZ. It's like two years in.
3:39:18
They're like, "We we should do we should do at least something so when people who don't know you already look it up."
3:39:23
They know it's like actually a real thing.
3:39:25
And so, um, they fought me on this for like 6 months.
3:39:28
And then finally, I was like, "Okay, well, if you get the New York Times, we can do it." But I was joking.
3:39:32
I didn't think they'd actually.
3:39:33
And then next thing you know, we had a New York Times writer like living with us for a week.
3:39:35
and she happened to have been like a Google engineer before she was a New York Times writer and then she loved it so much that she started coding again. Oh wow. That's awesome. So that was sweet.
3:39:45
And so just returning journalist these repeat founders who join our program and really the founders that we filter for they are here to birth their life's work.
3:39:56
Like these folks aren't founders because it's any like any sort of status thing.
3:40:01
They're founders because like whatever like way they grew up, whatever like childhood like they they they can't not be founders.
3:40:12
They can't not build things.
3:40:12
Um so that's like when you're at age of zero surrounded by a bunch of people who like it doesn't matter how high status low they they just like can't stop themselves from building.
3:40:21
Um and yeah, that's that's the really cool thing.
3:40:26
And it's, you know, it's only 10 teams and just you're surrounded by other folks who are like this kind of, I don't want to say addicted, like it's a sacrifice thing.
3:40:35
It's like a very painful thing starting a company.
3:40:37
Um, and they've done it like most 70% of the founders back have done it before.
3:40:42
They've been through that pain and then for some reason they're like sick enough to like do it again.
3:40:47
Um, and uh yeah, and and I respect the hell out of them.
3:40:51
And then and then you know seeing seeing I I watched like a little clip of of Royy's uh uh thing earlier and there's a big part of him that's you know excited about the fame and the attention and all this stuff but another thing you mentioned was around like the the BCI stuff. Yeah. Right.
3:41:04
We had a startup in our batch we just had our demo day this week called conduit that literally as they just they had a a huge breakthrough in like neuro neuroscience research where they have the first helmet that can actually like read your thoughts before you type them.
3:41:20
And it doesn't work every time, but when it does, it's like nuts.
3:41:25
And a week ago, this didn't work.
3:41:27
And then now we're right on the verge of like literally as a coder, like you being able to wear a headband that actually even cuz think, you have the thought of what you want to build, then you're bringing it into English language, then you're bringing it to code, and there's just like loss every step of that way.
3:41:44
step of that way. But if you actually could just see the the the image the the concept the thing they're thinking in their head like pro like you know vibe coding's cool but like thought to thought to accept all don't make mistakes build me a build me a hund00 million revenue business don't
3:42:06
make mistakes but I mean the BCI stuff is super real like Nudge there's so many companies working on this stuff now and I saw one company that was doing like uh they they read your brain while you were sleeping and then use generative AI to generate videos about what you dreamt about. Like even that, even if it's like
3:42:19
Like even that, even if it's like wildly off and abstract, it's still just like a cool thing to have on your nightstand.
3:42:23
And so it does seem like we're about to see a Cambrian explosion in this industry.
3:42:27
Yeah, I wanted I wanted to have you review the companies.
3:42:30
Uh but we should just have Yeah, we should have a bunch of them on.
3:42:32
I mean, we're having Alex on soon.
3:42:33
So, uh yeah, please send us all all the companies. We want to talk to them. This is fantastic. Awesome.
3:42:38
Thank you so much for joining, Dave, and and congratulations on all the progress. It's an awesome story.
3:42:42
One one one last note that's pretty crazy.
3:42:43
So from our last batch um average valuation post demo day was 50. 3 million. Whoa.
3:42:56
You're uh your your everyone was like, "Oh, it'd be great if there was like some type of Hey, but it's only 16x revenue accelerator residency with with reasonable valuations."
3:43:07
For their revenue, it's very reasonable. It's not Yeah. Yeah. Yeah. Yeah. Yeah.
3:43:09
It's less than a 20x revenue multiple, which isn't that crazy.
3:43:11
like yeah, you know, for they have real traction.
3:43:13
Any founders on TVPN who want to make 12 months of progress in 12 weeks, send them our way. Much love, y'all. We'll do. We'll talk to you soon. Great talking, Dave. Cheers. Fantastic.
3:43:21
Well, um, anything else you want to cover?
3:43:26
Somebody from from your uh I don't know if you want to I don't know the family. No, no, no.
3:43:32
But this is what I was telling you about like like Roy Lee is the most controversial person in my family right now because half my family loves him.
3:43:39
But is this your grandma saying he's No. No. Someone else.
3:43:41
Um, but yeah, it's very funny. Good stuff.
3:43:48
Anyway, uh, is is the intern cam still active?
3:43:50
I want to go to Tyler for one last pop quiz. Oh, is he on? Uh, okay. Uh, I want to ask you. Yeah.
3:43:57
What's the capital of Michigan? The capital Michigan.
3:44:00
Didn't you go to school there? I think it's Lancing.
3:44:07
I think you're maybe leaning on clearly too much at this point.
3:44:08
I don't I don't know if you're cheating using your brain or I can't really assess the product.
3:44:14
You know, you too much uh yeah knowledge on Michigan. Uh what's your name?
3:44:19
My name um let me think here.
3:44:24
It's like the that paper that just came out, right? Oh, yeah. Yeah. Yeah. Yeah. Yeah.
3:44:29
Do you think that uh based on your use of fluid, do you think it'll make you smarter or do you think uh you'll take your foot off the gas?
3:44:36
Uh I mean I was let me think about that actually.
3:44:39
Um I I think probably the latter honestly.
3:44:42
I mean it's just like I just don't need to think.
3:44:44
I don't need to store any knowledge in my brain now.
3:44:47
So maybe it frees me up to do more, you know, reasoning tasks. Okay.
3:44:49
But even then, you know, once they get 03 in here, it's really like everything's covered. So no reasoning.
3:44:54
Did you get a feeling for what model was under the hood? Uh I don't know.
3:45:00
I think I could probably check.
3:45:02
Uh, but I'm not sure right now.
3:45:05
It's so weird interacting with somebody using Cluey.
3:45:07
They're like like every answer is like and you don't know if they're reading Cluey or not or just actually thinking.
3:45:13
Well, anyways, uh, people should go try the product. Yeah.
3:45:17
You know, I really I really think that anytime Roy gets a negative comment yet, please just, you know, use the product for five five plus hours and then you can have an opinion.
3:45:25
the the the message to Andre, no crying in the casino because you know Roy Lee, there's probably a viral video of him going to the casino soon.
3:45:34
Pretty soon, you know, that's going to make a lot of people angry and so Chimath is talking about spacking again.
3:45:39
Yeah, I think Clue is a good target. I bet.
3:45:41
I bet it's not the craziest target out there. Not the craziest.
3:45:45
You know, Chimath and Mr. Beast hold.
3:45:46
Yeah, there's a lot of revenue there. It's growing.
3:45:49
You know, the market needs a pure play AI. They love pure play. a pure roy play. Yeah. Yeah. There's no pure play.
3:45:58
Uh well, we have some more breaking news.
3:46:01
Apparently, uh Apple held internal internal talks about buying Perplexity. Okay. Yeah. Yeah.
3:46:08
You mentioned um but clearly everybody's talking about buying Perplexity. Yeah. Yeah.
3:46:11
I mean, it would be an interesting way to just beef up Apple intelligence and and Siri very very quickly.
3:46:20
Um, you know, the the the perplexity team's clearly built a great product.
3:46:25
The the the question has always just been like it's hard to unseat people from Chad GPT and Google.
3:46:29
It's really hard to break through.
3:46:31
really hard to break through. What's interesting is like comparing it to the Roy Lee story which is like I feel like perplexity has gone viral many many times and if you look at the uh the even just like the ex presence of the of the
3:46:43
CEO Arind let me look up how many uh arind uh Arind uh at Perplexity he has 271,000 followers Roy Lee is just over 100,000 so similar kind of broken through serious uh you know on the podcast circuit um very you know respected founder
3:47:09
raised money a lot of attention on the company um but it's always difficult to actually get people to switch their daily driver from Google search to perplexity in mass but if you can team up with a company like Apple that would solve that distribution problem and so
3:47:25
there probably is a case to underwrite the deal at some sort of I imagine the number was big if they were talking I don't imagine it was some, you know, oh, we'll take you out for a fraction of the preferred. No, it was probably a real
3:47:36
No, it was probably a real deal if they were talking about it.
3:47:38
And so, um, but it but but but the question is like, could it make iPhone users happier?
3:47:44
Could it make the next version of the iPhone even more, uh, even more addictive and higher retention and and get people to upgrade to the Pro phone with a faster chip that's going to have faster local perplexity and faster interactions over Apple intelligence or Siri?
3:47:57
I mean, Siri was an acquisition after all.
3:47:59
They didn't pay very much for it, but it was.
3:48:01
And so the idea that Apple never acquires things is not really true in the AI space. So, I don't know.
3:48:06
I'm I'm rooting for them either way.
3:48:07
I'd love to see I'd love as a consumer, I'm rooting for Apple.
3:48:09
I would love a better search experience on Apple natively, and I feel like getting a a major player in in AI in the company would be the perfect thing right now.
3:48:22
So, I hope it happens, but good luck to everyone on both sides of the negotiation. Well, it is the weekend.
3:48:29
Have a great weekend, folks.
3:48:29
Leave us five stars on Apple and Spotify.
3:48:31
And thanks for tuning in.
3:48:33
We will be back on Monday. Have a great weekend.
3:48:35
We'll talk to See you then. Bye.