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4:51
It's Monday, April 7th, 2025.
4:54
We are live from the Temple of Technology, the fortress of finance, the capital of capital.
5:01
Uh, this is exactly where you want to be on a day like today.
5:05
You need to be in is in turmoil.
5:08
The timeline's in turmoil.
5:08
You got to go to the fortress of finance.
5:11
You got to find out what's going on from the experts.
5:13
Trust the experts on geopolitics because have been reading the timeline all day. So, we're experts. Yeah, we're experts.
5:20
We've been reading the information on the timeline.
5:21
We've been getting misinformation from the timeline. We've been mixing it up.
5:26
And we're here to deliver it.
5:28
We're here to deliver live.
5:29
You always know it's bad when the Wall Street Journal redes their front-end web design.
5:34
And today it's looking terrible.
5:37
I don't know if you can pull that up the first slide, but uh they it's no longer just a normal list of stories.
5:43
There's only one story and that's the market chaos.
5:46
And so literally, you go to the Wall Street Journal's website and it's just like here's exactly what's going on.
5:52
You need to be tracking this live because it's uh it's bad news. Uh the markets are down.
5:57
They went f down Thursday, 5% down Friday.
6:00
Uh I was golfing with a buddy.
6:03
He's like, "Oh, if we have a big leg down on Monday, could be in business."
6:07
because he does like distress financings because so he's always like vulture.
6:10
Yeah, I'm going to lick my chops like getting excited. It's always bad.
6:12
Uh but yeah, uh we didn't quite get another 5% leg down.
6:17
The markets uh have been up and down all day.
6:19
Uh there was a rumor the futures were trading down at 5%. We might see a 5% drop.
6:23
We opened at around 3% drop. We bounced up. We bounced down.
6:28
But it's all chaos and we're going to try and figure it out.
6:30
We're bringing a bunch of people on who can talk about it.
6:32
Bringing on some VCs, bringing on some founders learning about what they're doing.
6:36
When you need an expert on any anything related to complex geopolitics. Yes. Yes. Yes.
6:44
Uh macro, you got to go to early stage private market investors. Exactly. And get the truth. Yeah. Get the truth.
6:51
So that's what we're going to be doing.
6:52
That's what we're going to be doing.
6:52
Uh but if you're trying to trade the market while it's up, while it's down, you're trying to buy the VIX, you're trying to go short, buy some puts, buy some buy some options, go long, whatever you want to do, do it on public investing for those that take it seriously. Multi investing.
7:04
and many people have been saying and trusted by millions and literally like like if you're bearish right now in the stock market uh you should put your money in bonds, right?
7:12
Like that's that's pretty basic.
7:14
Uh and there's no better place to do it than not financial advice.
7:16
That's not financial advice, but you can express your opinion about the market anywhere and there's no better place.
7:22
One of the crashs from the weekend was the Aman, Bill Aman. Yep.
7:25
Uh going off on on uh Lutnik. Yep. For being long bonds. Yep.
7:32
And so, uh, you know, pick your pick your hero. Yeah. And, uh, do your thing. Yeah.
7:38
It was got, it got spicy on the timeline. Lots of back and forth.
7:42
We're gonna dive into it, but I wanted to start with, uh, Ben Thompson on Stretcher.
7:45
He's back from vacation and not a moment too soon.
7:48
Uh, he gives a good breakdown of the history here.
7:52
I think we should dive through this because I think it's very, very interesting.
7:55
Um, so he says, "Pretend if you can that last week didn't happen."
8:00
Uh, and imagine another scenario. China invades Taiwan. What happens then?
8:02
Says he's not a military expert, but his assumption is that Chinese China would be successful.
8:08
The biggest unknown variable would be time.
8:10
If the US does not intervene, the conflict will be shorter.
8:14
But if the US does intervene, uh the conflict will be longer and ultimately decided in a way that wars are always decided through industrial capacity.
8:21
And that's something we've been talking about on the show a lot.
8:22
We actually have an announcement from Anderoll today and a folk and a and a friend from Ander coming on the show to talk about it.
8:28
Um, it's all about just how many drones can you produce, how many bullets can you produce, how many ships can you produce.
8:33
That's the way getting them across the country. Yep.
8:35
Or not the country, in this case, the ocean. The ocean. Yeah.
8:39
Uh, China, China has a meaningful advantage in both areas given its relative manufacturing might and the fact that it would happen off their coast.
8:47
They can make stuff right there and just send it on over.
8:48
Uh there are experts who disagree um and concluded that uh the US would would repel a Chinese invasion but at a heavy cost to US military forces and Taiwan generally.
8:58
And it's crazy to think about that actually happening.
9:01
Let's hope that does not get there because it'd be very very disruptive to the global economy and everyone involved.
9:07
Um but Ben Thompson says it would raise a more pertinent point.
9:11
When it comes to the economic impact, it hardly matters who wins or loses.
9:14
In both cases, China is effectively removed from sub from global supply chains and Taiwan's economic output, including chips from TSMC and others that would all be destroyed.
9:22
It's difficult to overstate the extent to which every aspect of modern life rests on global supply chains, whether you like it or not, uh, which are so long and complex that no one truly understands the effects of messing with them.
9:35
It has often, however, gotten easier to grasp the complexity in recent years.
9:40
First, there was the bungled economic response to COVID where the temporal interruption in supply chains triggered worldwide supply shortages and contributed to global inflation.
9:47
You remember like you couldn't get a car.
9:50
It's like what does this have to do with washing my hands?
9:52
But it's like oh well like actually if you're locked down there's trade and like you can't get the chips in the car that you can't make the car. Yeah. And it's fascinating.
9:59
The dealer markups that you saw during co are basically back, but now uh if the tariffs go out, you'll be paying that markup directly to Uncle Sam. Yeah. Effectively. Yeah.
10:12
And so uh he gives a little bit of history.
10:14
Uh last November in the wake of President Trump's second election, he wrote a chance to build, obviously playing off of uh Mark Andre's A Time to Build essay.
10:24
Uh that title referenced the optimistic conclusion to a piece that was if you read closely a pretty pessimistic summary of the current trade situation with a special focus on tech.
10:34
To summarize, the US leveraged foreign aid direct direct investment and and its consumer market to rebuild Europe and Japan after World War II and pegged currencies to the US dollars dollar which was pegged to gold to do it.
10:47
This started the cycle of foreign countries exporting to the US and buying US debt with the proceeds.
10:53
Although the US's relative size to the rest of the world meant that the US still ran a trade surplus by the 197 by 1971 the system was about to collapse under its own weight leading the US to dep from gold depreciate the US dollar and dissolve the Brettonwood system of currency controls.
11:09
This led to a decade of pain including including the oil shock of the 1970s.
11:12
But what emerged had a similar structure to the postWorld War II system with the dollar as the reserve currency untethered from gold.
11:19
Uh and this was fascinating.
11:21
I was digging into this this morning.
11:22
I I think a lot of people don't understand the rationale for getting off the the gold peg.
11:27
Um it's actually pretty intuitive if you walk through it.
11:33
So basically what happens is gold is fixed.
11:36
Like there's not there's not a growing amount of gold.
11:41
So you if you if dollars are pegged to gold, you can't have a growing monetary supply of dollars.
11:44
Now why is that a problem?
11:47
Well, when when the entire global economy is bringing new resources and goods online, like they are discovering more coal and more oil and more trees that they're turning into furniture and they're creating more value added goods.
11:59
The economic value of that is all is all going up.
12:02
Now, what does that actually mean in practice?
12:04
You would you would think it's like with Bitcoin, you know, you just use smaller and smaller fractions of Bitcoin, right?
12:10
But when you have when you have uh when you have prices denominated in dollars that are pegged to fixed gold, what happens is that prices are going down over time.
12:18
And so you have deflationary pressure.
12:20
And so as a consumer, you're like, well, why would I buy this car today?
12:25
It's going to be cheaper in a month.
12:26
And so you just don't buy it.
12:28
And so you there's less stimulate the economy.
12:31
It doesn't stimulate the economy.
12:32
And so it seems like stupid because you're just like, why wouldn't we just fractionalize it?
12:37
Like a thing that costs a dollar. We have pennies.
12:38
But really, it's like, well, if the if the true price is going down down down constantly, people won't hire because they'll be like, "Oh, I could pay less tomorrow."
12:46
And so, you've always wanted like maybe flat prices or maybe a little bit of inflation, but deflation can be very dangerous.
12:52
And so, that was the alternative.
12:54
Now, a lot of people say, "Oh, 1971 was terrible, is this like awful moment, and a lot of things like stagnated after the fact."
13:01
And I think all that's legitimate, but I totally now understand the rationale for breaking that peg.
13:06
um which I didn't before.
13:08
Uh this meant that there was inelastic demand for US treasuries.
13:10
Uh meaning that because of the trade system uh no matter where the US priced the treasuries, they'd be like oh yeah like we want to issue a billion dollars of debt at 0%.
13:22
People would be like great inelastic demand.
13:25
People would buy it at any price basically.
13:26
And so this basically made it impossible for the US not to run a deficit uh either in terms of trade or the federal budget because there's just so much money flowing into treasuries uh because you have the lowest rates and you're the and you're the the the global reserve currency.
13:38
Uh still this was maintainable given the size of the US economy to its trading partners.
13:43
So basically, you have a bunch of small countries that are just like buying your debt at any price and and hoarding dollars and just like it's all good stuff because it's a bunch of like you know small little minnows that are like just kind of doing like helpful things around the edge basically.
13:58
That's the way I think about it.
14:00
Uh but then he goes into China which is obviously a much different dynamic and he says yeah so I can read this.
14:05
China is the skeleton key to understand so many oddities about the US's fiscal situation over the last 15 years.
14:11
In particular, how it is that the US's response to the Great Recession didn't lead to inflation.
14:18
Chinese production was deflationary and their everexpanding trade surpluses created an everexpanding market for US debt.
14:24
Whether it be held by the Chinese national government, provincial governments, stateowned enterprises, etc.
14:29
This inelastic demand also served to keep the dollar artificially high in defiance of the theoretical expected response to long-running trade deficits. Yeah.
14:38
So, if you have a long-ranging trade deficit, you'd expect that to kind of damage your economy, but because there's just so much more demand for the dollar and for us US debt, uh the the the music's never stopped playing basically.
14:54
Uh this more than anything else is what hollowed out US manufacturing.
14:56
The cost of cheap consumer goods uh and seemingly inexhaustible capacity for US debt was shifting far uh ever more manufacturing abroad.
15:05
Yes, things like lower costs and different labor standards played a role.
15:09
But the structure of the world economy is what matters most.
15:11
Indeed, China's labor costs are significantly higher than they used to be.
15:15
Uh but China's manufacturing dominance is actually accelerating which I think is a very interesting take.
15:20
And this next part is key.
15:22
Part of this is due to China's decision over the last few years to respond to the puncturing of its housing bubble by pushing resources into export oriented industries.
15:30
Another part is the unfortunate reality underappreciated by apostles of comparative advantage that capabilities compound meaning that China is just getting better and better and better at manufacturing because they're doing so much of it. Yeah. Yeah.
15:43
A lot of the comparative advantage uh like examples in macroeconomics.
15:48
You were going to say comparative advantage, bros. Yeah.
15:51
compared to Advantage Bros.
15:53
Like they they will tell you it's it's like well I make uh you know you make shoes and I make hats and we could both make shoes or hats at any time but I make shoes slightly more efficiently than you make hats.
16:05
So I'll make the shoes and you make the hats and we'll trade.
16:09
And it's like, yeah, that's true.
16:11
Until we get seven iterations of the global supply chain deep, and all of a sudden we're using mirrors that are flatter than anything that's ever been created to bounce likequefy tin and create like silicon transistors that are like so complex, you can't just be like, "Oh yeah, well, we do have like, you know, Ford is still here.
16:30
Let's just turn Ford Motor Company into TSMC."
16:32
It's like, that's not going to happen anytime soon.
16:34
or or the reality where I'll design the shoes, you make the shoes, uh, and we'll just do that forever and we'll live in peace and harmony.
16:44
And then eventually says, "Well, actually, I'm going to design the shoes and I'm going to make the shoes." Yep.
16:48
And then I'm going to still expect you to buy them, but I'm also going to do that for, you know, you design drones and I'll make the drones.
16:54
And then eventually it's, well, actually, I'm going to design and make the drones now.
17:00
And then you get into some type of conflict and things uh devolve which has been the big you know one of the big reasons for uh reshoring the gun and you feed me put away the squirt guns.
17:11
I'll make a gun and you put away the squirt gun.
17:17
You make the food and you're going to pay what you what I ask.
17:19
You're going to take confiscate the squirt gun.
17:21
Uh very interesting story from Steve Jobs here uh meeting with Barack Obama uh and advocating for uh kind of re-industrialization.
17:31
Jobs is the original re-industrialization brow basically.
17:35
You know, he would have been keynoting at reindustrialized 2025 for sure.
17:40
So basically uh Obama and Jobs get a dinner sometime uh it was it's from the Steve Jobs biography by Walter Isacson.
17:49
So, it must have been in the early 2000s, like 2008, 2009 time frame.
17:56
Um, but, uh, Jobs goes to Obama and says, um, hey, we we we have 70,000 factory workers in China.
18:04
Uh, and we need 30,000 engineers on site to support those workers.
18:09
You just can't find that many to hire in America.
18:11
Uh, these don't have to be PhDs or geniuses.
18:13
They just need to have simple basic engineering skills for manufacturing.
18:17
Tech schools, community colleges, trade schools could train them.
18:21
Um, we've got to find a way to train these, uh, 30,000 manufacturing engineers.
18:27
And so, um, basically Steve Jobs keeps pitching Obama like, "Hey, let's bring manufacturing back.
18:32
We can do it, but it's a skill issue."
18:35
And Obama keeps telling him all these different ways that like legally it's impossible to do, and they just get very frustrated.
18:43
And so, uh, Obama basically says like, "Hey, the only way we could do this is that's one thing about Trump.
18:49
He's not historically been too worried about the rules about what the rules say, you know, and so Jobs finds this annoying."
18:57
Uh, and it's an annoying example of how politics can lead to paralysis.
19:00
The president is very smart.
19:02
He said, he kept explaining to us reasons why things can't get done. It infuriates me.
19:07
And then uh Ben Ben Thompson goes on to say uh I think jobs had cause and effect backwards though there's not 30,000 manufacturing engineers in the US because there aren't 30,000 manufacturing engineering jobs to be filled and that's because of the structure of the world economy.
19:22
And so what Ben Thompson I think is getting to here is this idea that it's like yes, you could go bottom up and say let's let's create more schools that train more engineers and then the and then companies will say hey actually it is doable to to to build here.
19:37
Um but maybe you need to go top down and start with the trade dynamics and the structure of the global economy.
19:46
And so he goes back in time and looks at what happened with uh Nixon and goes back to that 1971 uh ending of the Breton Woods uh uh situation and says uh uh this this all started with Nixon uh closed the gold window, instituted price controls, very controversial, and imposed a 10% import tax.
20:07
And it's very interesting because with the Nixon example, the it was a PR masterpiece and the market loved it.
20:15
But it was later res like like later analysis kind of shows that it was like extremely chaotic and like not great for you know kind of flipping the table.
20:24
Easier to control the narrative when there was newspapers, television, radio and official wires going out of the White House. Yeah.
20:33
And so that's exactly what they did.
20:34
Like the Treasury Secretary John Connelly at the time packaged the whole program, this new deal, this new structure that they were going to roll out as America.
20:44
We weren't abandoning the commitment to the gold standard which again like America had said like we're this is a commitment basically like we're going to exchange dollars for gold one to one.
20:51
Uh but this is America taking charge.
20:54
He turned the dollar's collapse which could have been shame appeared shameful into a moment of hubris.
21:00
The emphasis would be on writing America's trade balance as well as minor points such as a 5% cut in foreign aid.
21:07
Uh William an aid to William P.
21:09
Rogers the secretary of state called and interjected.
21:10
You can't cut foreign aid.
21:12
Connelly said, "Tell him if he doesn't shut up, we'll make the cuts 15%." Aggressive.
21:16
Schultz muzzled his disquiet over price controls. Even Burns joined ranks.
21:20
The group feverishly debated whether whether Nixon should address the country on Saturday on Sunday night, which would mean preempting the popular show Gunsmoke, which I've never heard, but I guess it was like what everyone it was the all-in of the day. So wild. I mean, yeah.
21:33
Last night we had White Lotus, and many people were hoping that Trump would make some type of announcement over the weekend. It didn't come.
21:42
I think he didn't want to disrupt quite Lotus. That was probably it. Probably it.
21:46
Um, and so, uh, uh, the public relations aspect was paramount.
21:50
Stein wrote later that the discussion at Camp David assumed the attitude of script writers preparing a TV special.
21:56
No one pretended to know how controls would work.
21:59
The question was scarcely debated.
22:00
Addressing the nation on Sunday, Nixon blamed currency speculators and unfair exchange rates rather than US monetary policy.
22:09
Politically, he hit the jackpot.
22:10
Monday's uh rise in the Dow was the biggest ever to that point.
22:13
Nixon's new economic policy drew raves from the press.
22:16
The the New York Times said, "We unhing we unhesitatingly applaud the boldness with which the president has moved." What a throwback.
22:25
Uh you don't hear that about today stuff.
22:28
Uh yeah, only from like a very few people uh very small cohort of supporters.
22:34
Uh, in the present era, America's inability to repair its fiscal problems tarnished its credibility and hampered currency negotiations with China.
22:42
Um, so the end of the end of Breton Woods was probably inescapable.
22:45
But it's worth pointing out that the Nixon shock was an economic disaster.
22:49
The country endured a decade of drastic inflation.
22:50
This is like the stagflation era where we weren't really growing, but there was a lot of inflation.
22:55
And this was only cured with sky-high interest rates.
22:57
I think the interest rate got up to like 15 or 17%.
23:01
Mortgages were super expensive.
23:01
Just think about how painful that would be.
23:04
We've, you know, we've lived with like, oh, high interest rates are 8%.
23:06
It's like, it can be so much worse.
23:08
And there was a massive recession.
23:10
Uh, Vulkar, Paul Vulkar was the guy who instituted the shock.
23:16
Uh, he was on the team with Nixon.
23:18
Then he cured it, and then he became the the chairman of the Fed, I believe, later, or the Treasury Secretary later.
23:25
Uh, in other words, the reaction of the market and the press was totally wrong.
23:28
And so I think what Ben Thompson here is getting at is like it's possible that this is happening again and you need to at least consider that both the reaction from the press and the market could be wrong.
23:39
I'm not 100% on board with that and I don't think even he is.
23:44
But it's a very interesting like historical example to pull from just to because it's very easy to say, okay, you know, the the the media hates this, but of course they do because they don't like Trump and Trump says it's great, but the but let's go to the market because the market's always right and may and but the market was wrong then and so maybe that's the case here.
24:02
It's it's very interesting.
24:04
I I still don't exactly know where I sit with it, but that's why we're doing this show and that's why we're talking to so many folks today to hear different points of view.
24:11
Uh the question is if what happened last week ought to be compared to the Nixon shock or contrasted.
24:16
Uh certainly the reaction is a contrast.
24:20
Everyone hates Liberation Day tariffs including uh the market and we saw like Tyler Cowan's post.
24:25
He's coming on the show next week.
24:26
Uh you know Tyler Cowan add 25 bullet points why it was stupid and a lot of them were very convincing.
24:34
Moreover, the Trump administration's roll out has been the very opposite of a PR masterpiece.
24:38
No one in the administration can seem to agree about what exactly the goal was or what success looks like.
24:43
And then even today, there was like a leaked story that they might go back on them.
24:46
And then the White House had to come out and say like, "No, we're not going back."
24:49
Well, it wasn't a leaked story.
24:50
It was somebody one of those big accounts that shares the breaking headlines, Walter Bram, Bloomberg Bloomberg, fake fake account. Yeah.
25:01
uh took somebody asked a question on CNBC that said something to the effect of uh will will you know President Trump you know putting a 90day and he just was like boom hit he hit the timeline with it President Trump considering a 90day
25:18
you know temporary uh pause on the tariffs and it actually moved the market because the market jump massive 5% and then went down another 5% we were in the gym and we looked at our phones and we thought, "Wow, we might be back." And
25:30
And then we in fact were not back. Yeah.
25:33
I I I really think, you know, this is the technology business production network.
25:40
And I do think that the fact that the technology comes first is important.
25:43
Like I this is a very important story.
25:45
This is a business story. This is a finance story.
25:46
There's some politics in here.
25:48
Of course, it's important for everyone to understand, but I want to get back to talk talking about tech so badly.
25:52
Like Friday's show was amazing talking about AI and that stuff's just way more interesting to me.
25:56
Um but this stuff's this stuff's very important.
25:58
So we will we will go through it and cover it.
26:01
Um so what Ben Thompson comes back to and what he opened with is that there is a scenario within the realm of possibility that is far more painful than anything Trump proposed.
26:09
Is it better to try and force into place a new economic system that in lease in at least in theory reduces dependency on China and resuscitates US manufacturing now instead of waiting for the current system to collapse by literal force.
26:25
This does seem to be the administration's goal. Simply terrifying.
26:27
Simply tariffing China is dead weight loss, leading to rerouting and the fundamental problem of the dollar as reserve currency unressed.
26:36
Blanket tariffs on the other hand are a valid if extremely blunt and inefficient way to meaningfully reinstruct re restructure incentives.
26:43
And so we've seen this with you know this even before there were major tariffs on China there there was just like a there was just a rational business decision to say hey maybe you don't want to be 100% indexed on China for a variety of reasons.
26:55
And so, you know, we saw even Apple, they make AirPods in Vietnam.
26:59
Well, now they really have to consider what can they do to make products in America and the economic equation is like, yeah, if it's going to be 30% more, um, like that could be meaningful over a long period of time.
27:15
And the thing that I keep coming back to is like the market is in turmoil.
27:19
It's dropped like like 15%.
27:19
And I do really feel bad for everyone that's lost money.
27:23
And it's it is it is it is very serious.
27:25
Like I I I do think that there are like main street people with pensions and all sorts of retirement funds and like it is it is very harmful. It is very bad.
27:34
Um but there is a world where you build that back up in the markets pretty quickly because you get a new AI narrative or you get something that like everything rips or interest rates go down.
27:45
Like I've seen 15% gains in a couple earnings.
27:48
But if but if this like 50% 25% tariff like if this new tariff regime sticks around for years like that will actually yeah inform and change is there is a general feedback from the market and from people online that they're saying that they're saying it's a bad idea after looking at the market's reaction in a couple days.
28:15
And what Ben Thompson is saying here is that basically we're going to need to judge this in the fullness of times.
28:22
Like yes, the roll out was poor.
28:24
Yes, the market hates it today.
28:26
But if we're avoiding something that would have was bigger and more specta spectacularly terrible, then it actually could be worthwhile.
28:34
It's funny to contrast it to to Brentton Woods and Nixon's roll out because again, like you said, the market liked it, but then it ended up being bad.
28:45
And so, um, you know, short-term market movement is not necessarily always going to be an indicator for long-term success or viability of policy. Yeah. Yeah.
28:55
It'll just be it'll just be very important to follow like where this actually goes.
29:01
And I think one of the interesting I I I I kept I kept coming back to like okay if I'm being like cautiously optimistic about this stuff.
29:07
It feels like I would say like high-risisk high reward maybe or high-risisk medium reward is kind of as I was thinking like high-risisk high reward is kind of the natural thing.
29:15
But then I was thinking about it I was like well the the high reward is really like we slowly build up industrial capacity and GDP grows a little bit.
29:24
It's not really like oh all of a sudden we just like win everything in America's like amazing.
29:29
It's like, no, we're like on a slightly better trajectory.
29:31
So, I would say that's like medium reward.
29:33
Um, but then I was thinking like, is it really high risk?
29:36
It's like, well, part of the problem here is that and and it's not really high risk because if it gets really bad, he can just say with the stroke of a pen like it's it's over.
29:46
Like, I'm rolling it back. Like, he could do that.
29:48
And so, the downside risk feels not so bad as opposed to like the question is what breaks during the negotiation period, right? Totally.
29:56
But like previous crashes, yeah, were very much out of the control of the president where you know in the dotcom crash, it's not like the president could go out there and say like actually yeah AOL is worth the trillion dollars or whatever, right?
30:13
Or like COVID like actually leading around into AOL at 200 200 times revenue. Yeah. Yeah. Yeah. Exactly. Exactly.
30:20
Um and so I don't know if we should close out with his conclusion then move on to the timeline because we got about 20 minutes. Yeah.
30:24
The one thing that comes to mind, and we'll probably get into this in the timeline, but so Chimath was doing quite a bit of lying over the weekend.
30:31
He kept getting caught lying.
30:33
Um, uh, the internet was being very diligent, but one thing he's posted, which I did notice, is he's been orienting the narrative around the Mara Lago accords. Yes. Yes. Yes.
30:42
And so this entire time, to be clear, David Sax has been silent.
30:47
JD Vance has been silent.
30:49
Um, but the sort of the Mara Lago accords, right?
30:51
So, so if Trump is the deal guy and he lives to do deals, Yep.
30:57
and he did every deal there was to do in sort of business and crypto and social media, you know, and real estate or whatever.
31:04
and the final deal is like the new, you know, the new sort of backbone for the global economy then and and normally I would discount what Chimoth would say, but because he had that call on bonds earlier, you remember you were talking about this where he was like default swaps. Yeah. Right. Right. Right.
31:24
Um, uh, I think it's totally possible that that there's a lot that the administration could be angling towards that they're not able to really talk about, but I believe that Chimath would leak it basically in order to try to basically position himself be like, I call this this is a very So, so we invited Chimath on the show.
31:42
Hopefully, he'll be able to join.
31:44
Um, uh, I don't know what he'll be able to say.
31:46
It is interesting because he he does not, to my knowledge, have an official position in the administration.
31:52
Um, but he obviously is extremely close with David Saxs who does have a position in the administration and Chamath has been to, you know, all these different organization events and like he's clearly tapped in.
32:04
And so if you think about like, hey, we need to like send out some messaging, but it can't really come from us.
32:11
Like having Chimoth post messaging might make regardless of how regardless of how anybody any one person feels about Chimoth, he has a huge following right now.
32:21
Yes, among a bunch of major investor types and even if they don't respect everything he says or they should be reading into what he's saying because he does have information based on his position. Yeah. Yeah.
32:34
So, uh it's very very interesting. I don't know. Uh we Yeah.
32:39
He's also had he's been interviewing um Lutnik and Bessant and everybody obviously I imagine they're having conversations on air.
32:51
They're having conversations on air.
32:52
They're certainly having this, you know, similar conversations off air as well. So, yeah. I mean, who knows?
32:56
Uh, you should go read the full Ben Thompson piece.
33:00
You can go to strateery and sign up.
33:01
I It's uh it's in the everyday carry of every tech person in my opinion.
33:04
Um, he closes with a couple interesting uh conclusions.
33:08
Um, there's some there's some knock-on effects.
33:11
Apple's services business is not subject to tariffs, which is to say that it will become even more important to Apple's bottom line.
33:18
that decreases the likelihood that Apple transforms its relationship with developers, which is the most which he thinks is the most promising opportunity for Apple like really flip their model and make it so that it was like $200 for the software and like they basically give you the hardware for free and well they're basically doing that if you've looked at the price of the iPhone on an inflationadjusted basis.
33:39
It's not going up by as much as it should.
33:41
Um, and it's it's held very steady because they make so much money off of services.
33:46
Uh, I mean, you get a new phone and there's like 25 different calls to action to buy like Apple Health, Apple News, Apple App Store stuff, uh, subscribe to this Apple TV Plus, and then also every app they get 30% of and and and and that's why they're not giving up the Siri button even though it would make so much sense.
34:05
It's because like yeah this button is going to be auctioned for a trillion dollars basically and open probably something like that because this button is going to be the next Google like when you go to Safari and you type in just you know like restaurant near me it goes to Google and Apple gets paid for that.
34:21
Uh it's going to be the same thing with the hardware button here.
34:22
Um but it would be a lot cooler if it was more of a free market for that button and for the ecosystem and certainly uh it seems to be stalling the Apple Vision Pro with developer hesitation.
34:33
There's a lot of stuff there.
34:35
And then they also have uh some interesting takeaways on the advertising based businesses.
34:38
Meta, Google, Amazon will also be negatively impacted.
34:41
Lots of cheap products mean lots of advertising.
34:43
Uh much of which could disappear.
34:45
Could this mean a return of app install advertising like mobile games?
34:49
Uh if e-commerce advertising decreases, lowering prices overall.
34:53
We got to get Sean back on the show from RidgeWallet to give us the breakdown of how how people are thinking about this in e-commerce after all this settles.
35:00
Um but uh you know so what is my optimistic spin?
35:04
So what of my optimistic spin last November when I called my tariff preview a chance to build?
35:10
Well, my skepticism is keeping with the pessimism embedded in that piece.
35:13
It's a lot easier to build from scratch than to retrofit something that exists that applies to companies just as much as countries economic orders.
35:19
Uh I'll be cheering for the startups that seize this opportunity.
35:24
I'm sympathetic to incumbents looking at guaranteed costs with very uncertain rewards. rough.
35:31
Um, well, if you're feeling upset about the tariffs, you should just treat yourself to a nice weekend on Wander. That's right. Go wander.
35:41
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35:42
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35:44
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35:49
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35:51
Uh, some newspaper Industries.
35:54
Uh they launched Copperhead, Anderil's high-speed softwaredefined family of AUVs.
36:02
Uh the US and its allies need scalable autonomous subc weapons that can be rapidly deployed to meet the demands of modern naval operations.
36:08
And uh yeah, it looks like a torpedo. It's pretty amazing. Uh except it's square.
36:15
So I want to know about that.
36:15
They seem to be taking everything that's round and making it square.
36:18
Have you seen the the Ghost Shark? Their submarine. The Ghost Shark. So cool.
36:22
Yeah, it looks really cool. It's like a VW bus.
36:23
And I think that's because it's easier to transport and you can stack them and stuff and fit them in.
36:29
Um, but I I don't even know.
36:29
I asked one of the Andy old guys and they're like, "I don't know why it's square."
36:37
They're like, "Ask one of the engineers, you idiot." Ask that.
36:39
That's the first question I would ask.
36:41
If he if he doesn't answer it, I'm going to be like, "Man, it's a mystery."
36:45
Uh, but it looks really cool.
36:46
Uh, Copperhead is built for speed, ready to carry advanced payloads, and integrates seamlessly with autonomous systems.
36:50
The first two models, Copperhead 100 and 500, offer different payload capacities and ranges for commercial and defenseman.
36:56
Our munition variant, Copperhead M, equips autonomous vehicles with torpedo-ike capabilities at a fraction of the cost.
37:03
Critically, it's mass-producible.
37:03
And so, yeah, this is uh one of the beneficiaries of tariffs and trade war, more defense, more manufacturing in the United States.
37:11
And um it's it's odd that this is where this is the most high-tech this could be the most high-tech product made in America when you think about it in terms of like AI.
37:19
Is this thing more complicated than an iPhone to manufacture?
37:22
Like maybe it's out there.
37:24
It feels like American manufacturing really comes down to having vision, incredible willpower, and incredible ability to recruit. Yep.
37:36
Amazing talent because Elon's done it. Yep. Anderl's doing it.
37:38
Uh it clearly is possible. Yep.
37:41
But it takes uh incredible power effectively to actually It's also interesting that we're kind of going maybe in reverse here.
37:49
Like in World War II, we had all this industrial capacity from the from the from the automobile industry.
37:55
Ford and Chrysler wound up pivoting and making tanks.
37:58
And there was a there was a I think a Ford manufacturing plant that was pivoted to uh making bombers and it took him three years.
38:06
And here, you know, I think the good ending is like Anderoll secures the global order and then hey, you know, it's time for you guys to make some iPhones.
38:15
Like, you guys got all the best engineers.
38:17
We want you to just make some like consumer drones.
38:18
And we kind of joked about that where it's like, hey, they make all these drones.
38:21
They keep us safe, but then, you know, I still want a I still want an FPV drone to fly around. No.
38:26
And there there there definitely is a Tesla like mafia, right?
38:28
Like uh the CTO of Deterrence, we had Duva on the show a couple weeks ago.
38:35
he um was in worked in manufacturing at Tesla specifically on on their battery cell side and now he's working in defense, right?
38:45
And so we just need winners to win and then distribute out talent into other industries.
38:50
Well, speaking of talent, Anderl ran a great advertising campaign for don't work at Anderol, trying to weed out all the folks who don't believe in their mission.
38:59
Uh and they bought a bunch of billboards.
39:01
So, if you're looking to buy billboards for your company, build your culture, uh, go to adquick. com.
39:06
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39:10
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39:12
Uh, would it be possible?
39:14
I'm hearing you're hearing that for the first time because I I have a lot of headaches about out of home advertising. Yeah.
39:19
Would I be able to say goodbye to those?
39:21
Yeah, you can say goodbye to that. Great. That'd be great.
39:24
I'd love to say goodbye to the headaches of out of home advertising.
39:25
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39:34
Should we should we review this uh this Chimoth uh post to kind of give some context on his position, my current best view?
39:42
Because I think this is just one position.
39:44
This is one this is one position.
39:47
He says, "Trump lets tariff reactions play out for the few weeks, sees the trend of capitulations, and is emboldened to keep going.
39:54
He fields offers from everyone, negot negotiates with no one, then brings everyone to Mara Lago in a month or two and puts an offer on the table. Brettton Woods 2. 0.
40:02
It's simpler and more effective to have one grand bargain that negotiate peace meal with 80 countries plus.
40:09
I am focused on figuring out what terms matter most for the MAL Accords, Mara Lago accords.
40:13
I have a few in mind that which are obvious and would kingmake the US.
40:18
I don't buy the whole end of US hedgeimonyy.
40:20
this is the moment to go for the jugular and establish world order around America.
40:26
So, he's very optimistic that this ends well, but we we will see.
40:28
Um uh who else should we cover from the timeline because the timeline's been in turmoil.
40:36
Uh this uh the Walter Bloomberg pump occurred from 10:13 a. m. to 1048 a. m. It was glorious.
40:43
Uh Joe Weisenthal documented on the timeline to the tune of 7,000 likes.
40:48
You have to wonder, could this have been, you know, that the default is that it was just a total accident.
40:56
He just like wanted to be the first person to post.
40:58
I don't I don't know who runs the account.
40:59
It's somewhat anonymous, but it's totally possible this was like coordinated, right?
41:04
These accounts don't monetize well.
41:06
Like the the the ad re the ad revenue that he gets from, you know, posting headlines is probably like $3,000 a month.
41:11
So, it's just like not super meaningful. Hedge fund, you know. I don't buy it.
41:18
I think it's just accidental. Accidental.
41:22
I think it's just somebody just I'm just saying like you have to dopamine.
41:23
It was such a default the default Yeah.
41:26
is that it was just an accident. Yeah. Yeah.
41:29
But it could have absolutely been um the funny thing is that you I mean you mentioned hedge funds.
41:35
For some hedge funds it doesn't even matter because they just see the trading volume go up and they make a whole bunch of money during volatility like that.
41:41
Like like I'm sure Jane Street printed during this pump on both directions, right?
41:45
Uh insane market action right now.
41:48
market exploded on a headline attributed Kevin Hassard.
41:50
Uh, and now nobody can figure out where it came from and the markets are diving again.
41:55
An 8% surge and then a 3.
41:55
5% plunge in a matter of seconds.
41:58
Anyway, you want to make sure that your expenses are plunging with ramp. com. Time is money. Save both.
42:05
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42:11
Uh, we like this DJ post.
42:11
I want to have Ramps head economist or Karasian.
42:14
I'd love to have him come on on the show. Yes.
42:19
Uh I think it'll be next week at this point just to break down what they're seeing across the ramp ecosystem.
42:25
I like these leading indicators.
42:27
There's this whole idea of like, you know, the market is a leading indicator.
42:31
It'll eventually show up in GDP, but there's a lot of things in between that we want to look at like venture flows and what's what's going on on Angel List and and are funds sizing up or sizing down?
42:42
During the SVB crisis, we saw a lot of VC funds pull back. Are we there yet?
42:47
Are we even getting there?
42:49
And then what are consumers and businesses doing?
42:50
Uh Arazzian breaks it all down in his uh economic reporting from RAMP and has fantastic data. Uh let's go to DJ Cows.
43:00
The market crash looks so much nicer in Gibli.
43:02
This is a ridiculous chart. This can't be real.
43:04
I mean, maybe maybe this is if you zoom out enough.
43:06
It's really steep though.
43:09
I think it might have taken some some liberties.
43:11
In fact, at the end, it looks like it's going backwards in time. Not great.
43:14
Looks a little dramatic, but some green shoots.
43:18
Nvidia is up 9% since 939. There we go.
43:22
I don't know if it's stable. It's actually up 4. 7% today.
43:23
That is still uh down almost 9% over the past week, but um we like we like to see a little green. Yep.
43:34
Uh we got some news out of Taiwan.
43:37
Taiwan does not seek retaliatory tariffs against the US.
43:40
Instead, we'll start talking from bilateral zero tariffs to ensure Taiwan's competitiveness will increase US US imports and adopt other measures.
43:51
Working together will usher in a golden age of shared prosperity.
43:58
You'll love to see it from our friends over in Taiwan.
43:59
Uh yeah, I mean I think this is where everyone wants to get and uh but it's interesting.
44:06
uh but it's interesting. I I was talking with a friend today and we were both kind of lost on like you know what is the tariff take and he was just saying I just want less regulation like I want I want this to I want that to be divid actually had a great take because
44:21
he is in the automotive industry obviously if you're in the business of selling new cars you got to be really frustrated with the tariffs because Doug just compared it to the dealer markups that we saw during co it just became really hard to make cars move them around the
44:38
and uh interest rates were super low so people wanted to you know the market was ripping right you remember Gwagons were like 350k for like a $200,000 car and basically steal but yeah still giving it away other no but he basically said um you know the US was based around the Hummer EV was trading for like 200k and now
45:01
it's like down at 60 where where it should be um no but he he basically He said, you know, the the the in many ways um the US was like founded on this, you know, the ideals of like free trade and capitalism and letting you know the market do its thing and you know tariffs are taxation. It's protectionism which
45:20
It's protectionism which is like against like the entire ethos of like the United States was basically at least looking back was like let's win by being the best. Yep.
45:31
um not uh and so again he he's obviously biased from being in the automotive industry but I think that's generally like tariffs being unamerican is like gen generally it's a good take that's a good take. Yeah.
45:45
Uh I I also I was talking to a hedge fund manager a year ago during like the inflation crisis and uh he was talking about like you know when there's like too much money flowing around you you need a place for that to just like die.
46:00
You need the money to die. Uh you mean stop moving?
46:03
Stop moving, but just like just get sucked out of the economy when the economy is like overheating. Yeah. Right.
46:09
And so he was like taxes like the IRS or like tariffs which are a form of taxation is like where money goes to die because the money instead of going into the pocket of like a business person that can like immediately deploy it or even just a consumer like a worker can go take the money and immediately deploy it.
46:25
when it goes into the government, it's often used for like such, you know, like such inefficient means that Yeah.
46:31
like funding Sesame Street in Iraq. Yeah.
46:34
That basically like it really really slows down the economy.
46:38
And and so uh I I think the the Trump folks have been kind of signaling that like, okay, if this works and we're generating more money uh from tariffs, like we'll do a tax cut, which I think would kind of pair that down.
46:50
But in general, tax and then we're going to cut cut It's a tax cut.
46:56
Increase taxes, increase cuts. Yeah, tax cuts.
47:02
We're simultaneously increasing and decreasing taxation.
47:04
I mean, it's it's when you put it that way, but it is possible.
47:08
It's just like, yeah, it it it's just like, you know, where where does the money get taxed from? Where does it go to?
47:14
You know, you can tax from a bunch of different places and you can cut from a bunch of different places.
47:18
But, uh, Andrew Reid, uh, posted, uh, so turns out the weeks where decades happen happen a few times a decade.
47:26
And I, uh, I asked him, uh, when's the new Sequoia memo dropping?
47:31
because uh Sequoia famously dropped the uh blacks RIP good times memo at the end of the financial crisis uh or the housing crisis uh which was a very detailed macroeconomic analysis of where the American consumer was and kind of calling upon all entrepreneurs to gear up for a very different market going forward.
47:50
Uh and then when COVID happened, they dropped the uh uh black swan memo, which was also very wellreceived, telling founders, hey, buckle up.
48:00
Interestingly, the black swan memo was kind of like too soon because the market ripped, but a lot of those lessons were later applied very accurately to the SVB crisis.
48:08
And if you were running a ventureback startup with 12 to 18 months of runway coming into the SVB crisis, like you needed to move very quickly to know that, hey, you weren't going to raise another round in I think it was 2022, 2023.
48:20
Things were getting rough, so you needed to buckle down.
48:24
And the companies that did made it through and the companies that didn't went bust.
48:27
And so, uh, I'm sure we will see a lot of interesting takes from venture capitalists.
48:32
We have some on the show today to break down what we think uh entrepreneurs should do in this case. It's a weird scenario.
48:39
It's it's half uh you know wait and see.
48:43
Right now we're only a couple days into the crash, but if this sustains and the GDP starts dropping like you could see even if you're selling B2B SAS, people are saying hey I'm trying to tighten my belt, right?
48:54
I'm trying to stretch my burn.
48:56
I maybe VCs aren't going to fund me.
48:58
Maybe there's going to be you know the requirements.
48:59
We're just going to see less froth in the market.
49:00
And so that requires a different type of management.
49:05
Anyway, and it's such a fascinating time right now because it seems like all of the attention that artificial intelligence was getting like just, you know, evaporated, right? Yeah.
49:16
Yet, if you're heavily in the industry and you're seeing the impact of it and you're seeing the power of it and you're seeing the progress it's making, even if it's, you know, maybe um not doesn't feel like it's quite accelerating, you know, maybe like it was six months ago, uh it's still if you're in a private markets investor, you have to be extremely bullish on um a number of new investment opportunities despite sort of like macro backdrop.
49:43
So yeah, I mean speaking of it is a fascinating time.
49:47
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49:56
And you know, on a day like this, you just want to look down at a at a fantastic time piece and remember that things will always look up eventually.
50:06
There's always a bull market somewhere.
50:07
And Trump's a Trump's a Vashron guy. Yeah, he is.
50:10
So I don't Yeah, I don't expect the 31% tariffs on Swiss to hold.
50:18
That's gonna be the first one to fall.
50:19
That's going to be the first one to go for sure.
50:21
Okay, we got our first guest from Anderl. Shane's in the studio.
50:24
Uh welcome to the show, Shane. How you doing? Boom. Hey, John. Yes, thanks. Uh they're they're good.
50:31
You know, the market's melting down.
50:33
It's a little chaotic, but uh a lot to talk about and a lot of interesting uh opinions flying around on both sides.
50:39
Hopefully things are doing better for you. Uh massive launch today. Congratulations.
50:44
Can you break it down for us and maybe introduce yourself as well? Thanks a lot. Yeah.
50:47
Uh so we're at the world's biggest Navy trade show. Cool.
50:52
Here in DC, so the sea air and space conference and we're in the dive bar. I know.
51:01
Our marketing guys are epic. So I love it. Yeah.
51:05
So we've got in the dive bar.
51:07
So my name is Shane Arnut.
51:07
I'm the senior vice president for maritime business line here in uh at Andrew.
51:12
I'll say yeah really really really big conference for us and um two brand new products.
51:19
Seabed Century Copperhead going public today.
51:21
So yeah it's pretty cool.
51:23
Can you uh maybe let's start with Seabed Century.
51:26
Uh what what was the genesis of the project? What's the need?
51:32
Uh, and then what is the what's the product actually do just for like a layman? Can you hear me? Yeah.
51:40
So, Seabird Century is about undersea awareness, if you will.
51:45
Um, so hopefully am I coming through okay for you? Yeah, you're good. Yes. Yep. Great.
51:52
Um, so it's pretty crazy.
51:56
Like if you zoom out, like as as a species, we know less about the seafloor than we do about the moon or Mars.
52:01
Like, uh, some 70 to 80% of the seafloor is uncharted, which is crazy.
52:07
So, it's a good place to hide if you're a submariner.
52:10
Um, it's also a good place to hide if you're the threat.
52:12
Um, so we kind of created this system, if you will, to be able to bring light to the deep dark sea, if you will.
52:20
So you look at kind of vast amounts of infrastructure.
52:24
So uh 80% oh sorry 90% plus of uh internet traffic.
52:28
So this particular podcast would be running across subc cables. Yeah.
52:33
Many nations have their gas lines under the uh the waves.
52:39
These are broadly unprotected unwatched right now.
52:42
So the greatest vulnerabilities are below the waves and no one's really talking about it or working on it apart from some super secret things.
52:50
And we kind of think that's wrong.
52:52
that's wrong. So Seabed Century was kind of came from that place as you know Andrew we can invest our own money put points towards things that we care about and we believe this is a big issue that people should be working on say and seabed century is seabed century uh do
53:10
you expect you know DoD our allies etc to be the the main buyers or is this the kind of thing if you are in the business of laying undersea cables would would uh you know th those types companies be customers as well or is it purely defense uh applications? No, we we definitely see it as dual use
53:30
No, we we definitely see it as dual use like anyone who's got energy infrastructure.
53:34
One of the key things I will uh lay out is this is a cableless system.
53:39
So, it's completely wireless.
53:42
So, all the all the systems as you guys probably know are cold war era.
53:44
You need big cable laying ships to put these uh systems on the sea floor.
53:50
uh almost impossible to upgrade.
53:52
These are completely wireless um fully electric and you can place them in the ocean.
53:56
Um specifically, we can use some of our autonomous submarines so you can place them covertly or clandestinely, which isn't a bad idea if you're setting up security cameras and the bad guys know exactly where all your surveillance systems are.
54:12
Kind of defeats the purpose a little bit.
54:14
So, this approach is is different thinking, if you will, that we can place them anywhere on the planet.
54:19
we can get one of our submarines and you can place it with all sorts of different payloads in um in the body of it for long range surveillance for listening for other actions that you might be taking as well.
54:31
So can you talk about the broad risk of uh undersea drones?
54:37
You know, I imagine it's the same type of dynamic as, you know, uh, traditional, you know, airbased drones and that you could send a $10,000 drone to destroy, you know, a pipeline that that could cost a billion dollars or or cause a billion dollars of economic damage.
54:55
And so um the uh the whole ratio is pretty pretty thrown off and and uh but but I'd be curious like is it something that's not getting enough attention because it feels like right now kamicazi drones and and uh everything um in Ukraine is sort of like dominating the narrative but clearly you guys are um have found this important enough to to put a lot of R&D into it.
55:20
Yeah, the maritime environment's been kind of slow to the punch to be honest.
55:24
like you you look at the proliferation and the success of robots in the Ukraine conflict and everyone looks back now and goes, "Yeah, of course, uh this was a better idea."
55:32
Then you also see kind of crazy things like Patriots being used to drop um UAVs that are a tenth or 100th of the cost.
55:41
The the unit economics of that exchange just doesn't make any sense.
55:45
So y maritime domain just on the military side exactly the same.
55:47
There is a proliferation of unmanned underwater vehicles primarily from the Chinese and the Russians, also unmanned surface vehicles as well.
55:57
And if you're going to utilize, and this is probably a good segue to the copperhead, which is the the next thing that we announced, which is a fast, flexible payload um AUV, which could be uh made into a munition.
56:12
Um so a torpedo, if you will.
56:12
um that particular system is built to be at a fraction of the cost of say like a Mark 48 or a Mark 54.
56:19
These are very prevalent um uh torpedoes for for your listeners uh who aren't familiar with that.
56:28
But when you're launching a Mark 48 against a USB that's like a tenth of the cost, the economics don't sort of work.
56:36
So we've specifically built these things to be at a price point that's a fraction of.
56:40
We can also build them at thousands per year whereas kind of right now you may be lucky to get 100 200 uh torpedoes out of a supply chain as it exists today.
56:52
And again that that exchange ratio just does not work against kind of the fight that we're basing into.
56:58
So the Asia Pacific fight with uh with China clearly that's a water-based um conflict that's coming but also people don't talk a lot about the high north.
57:08
So, and that's where Russia is dominating.
57:10
So, uh you know, there's a lot of great stuff um sitting under the ice that's now retracting.
57:17
Everyone wants a piece of that.
57:17
You know, some of the discussion around Greenland and others is the basis of why the high north's kind of the next focus, if you will.
57:26
So, having these capabilities that are fully electric so we can get them under the ice caps, for instance, is of interest to folks.
57:32
um the ability to do it at on mass affordably in order to kind of deal with a very wide waterfront is kind of the basis why we invest in these capabilities.
57:42
Can you talk a little bit of a little bit more about the trade show that you're at and exactly what type of buyer are you interfacing with?
57:52
What kind of uh points are you trying to make to them beyond just hey there's this new thing it's important and cool? Yeah.
58:00
So as as I said um and you know what's happening around me at the moment world's biggest is everything from frigide to you know weapon systems whatever else um that's kind of happening.
58:14
So I think a big part of what we're trying to paint if you will is the ability to mix match.
58:19
So we've got our autonomous underwater submarines um that are in effect mother ships for delivering these things plus the seabed sentry plus the copper head and just to be able to give the creativity back and it's not an obvious thing.
58:33
So enabling you know within the dive XL which is our big uh underwater submarine or autonomous submarine I should say we can put dozens of copper heads in.
58:43
We can put a dozen seabed centuries.
58:46
So the ability that you can kind of mix and match and give more creativity to the commander and that's not immediately obvious.
58:54
So just kind of we've got virtual reality um experiences for people to kind of ah here's how I would do this as well as coming into our our dive bar that we have here to you know have the conversation.
59:04
But the it's not obvious.
59:07
A lot of this is second order kind of understanding for what's incredibly wicked difficult problem um that the subc warfare environment kind of presents if you will.
59:17
So that's what it's about being able to come here start those conversations.
59:22
Uh I I I always notice that both the dive submarines and the new copper head are square.
59:29
Is this is are there advantages to that?
59:32
Does that mean that you're less compatible with old torpedo tubes or is there some sort of backwards compat compatibility or does it just not matter and it's better to stack in, you know, a shipping container as you ship these around the world? Yeah. Yeah, great question.
59:48
So, truth be told, it all started with uh with Palmer. Okay.
59:52
So, Palmer Lucky, our founder, and um you know, I was kicking around and said, "All right, you know, boss, we're looking at doing a a torpedo."
59:58
and and he said, "Ah, but make sure it's square." And I like, "Well, why?"
1:00:04
So, I took it away and the guys did the numbers and interestingly for what we're doing, it's actually faster. Wow.
1:00:11
So, given we've got the the software magic to fly these things, it actually flies more stable and quicker for the application that we want.
1:00:21
Secondary is then the um uh the manufacturing.
1:00:24
it's a lot easier to manufacture something that's like you know a bathtub as opposed to a big spherical pressure vessel thing.
1:00:30
Um so that was very significant as well.
1:00:33
So those two kind of together is why that's the case.
1:00:38
Um now it is a similar diameter to existing uh aectors like the Mark 48 so they could be used.
1:00:45
It's not our intent at this stage.
1:00:47
So, our intent is for this to be launched off an autonomous to be launched off an autonomous submarine.
1:00:55
Um, and that it makes the integration and the safety case a lot easier when you're both sides of that equation.
1:01:00
So, when you're the archer and the arrow, um, you can just go a lot quicker when it comes to changing the threat, changing the seekers, changing the capability, you can pivot a lot quicker.
1:01:11
So, that was the basis of the intent.
1:01:13
But, um, certainly a lot of customers have asked the question that you've asked. So, we'll look into it.
1:01:18
Uh maybe last question for me just curious uh does Anderoll have scuba divers on the on the payroll or do you guys observe the R&D and and the testing process using other is it is it fully autonomous end to end you just sort of launch them and and say goodbye and then and then watch from from on board or I'm curious whatever you can share I think it's be fascinating.
1:01:41
Yeah, I mean part of a dev process is things go wrong. So I'm a scuba diver.
1:01:45
Um so when things go wrong, I'll stick the tanks on and jump in as will the team.
1:01:49
So I mean it's it's the iterative process.
1:01:52
So uh it doesn't work all the time, but we're able to spin the wheel fast enough to get to good from, you know, bad fairly quickly.
1:01:58
But uh yeah, certainly all the team, everyone's big enthusiast of the uh the water space.
1:02:06
It's uh not terrible thing.
1:02:11
group because all the tests are horrible places like Florida and you know Sydney or um you know California or whatever.
1:02:20
Previously I did fast jet stuff and the the test ranges for the Air Force guys are in these awful dusty places.
1:02:24
So it's not a terrible thing doing Navy projects nowadays.
1:02:29
Uh I mean last question for me and then we'll let you go get back to the important work you do.
1:02:34
Get back to the dive bar.
1:02:35
Get back to the dive bar.
1:02:37
Uh, I would love to hear about some of the challenges of communication in the underwater domain.
1:02:41
Obviously, you're flying a drone around.
1:02:43
You might be able to talk to Starlink.
1:02:44
There's tons of satellites and other drones up.
1:02:47
When you're underwater, signals don't travel as far.
1:02:51
That feels like it makes autonomy more important being able to operate even with if the connection gets lost.
1:02:59
But can you talk about how you're thinking about uh communication and signal transmitting across the different fleet? Yeah, a thousand%.
1:03:08
So underwater is the worst domain. So com suck. There's no GPS.
1:03:14
All the things that you rely on for an autonomous system.
1:03:17
So we it is the masterclass for autonomy.
1:03:19
So not space, not air, not surface, not land, it is subsurface. It's the most difficult. Right.
1:03:26
So, um, we've spent a lot of time and I think, uh, you know, Andrew, this is kind of our, uh, what we're good at.
1:03:34
Uh, but this is certainly I've got probably the best autonomy engineers on my team because you've got such thin pipes or non-existent pipes.
1:03:40
So, you're in effect GPS denied. You're a whole mission.
1:03:44
Um, you can only pass very, very small amounts of information between the assets because they all do team together.
1:03:51
M so in doing so like you need to be very judicious about what you pass and when in what configurations etc.
1:03:59
etc. So um it it's the most difficult domain and and one of the highest reasons for autonomy and I think where we're getting the success is we've come with this software first thinking for a particularly difficult problem which is this I think everyone can build you know
1:04:16
a a sub a submarine autonomous submarine that's not difficult having it survive communicate act still be on a string from a human particularly when you're taking kinetic action um to make sure all the approvals are done in the right order is that's that's the big challenge. So, you hit the nail on the
1:04:31
So, you hit the nail on the head there.
1:04:33
Sir, I I I did hear one interesting thing in the uh Seabed Sentry announcement.
1:04:38
I think Palmer mentioned that it can detect biological creatures too.
1:04:43
Is does that have a benefit or is that just like a fun fact? Yeah. Yeah.
1:04:49
I mean, anything below the waves that kind of makes noise.
1:04:51
And in fact, uh, you know, one of the big things we want to do is actually detect when the biologics are, you know, seasonally coming through because you want to be careful when you're actually putting energy into the water because it can be harmful for sea life.
1:05:04
So, we all of our systems are collecting the pattern of life, if you will.
1:05:09
So we make sure that if there's some humpbacks, you know, cruising through a surveillance area that we're tuning down our sound system, if you will, to make sure that there's no damage to the u uh to the people who live in or the animals that live in that space.
1:05:25
So that's just, you know, good practice. Um so yeah.
1:05:27
Yeah, it does all those things.
1:05:30
You you mentioned that uh the underwater domain is the hardest from a comm's perspective, but Palmer's been talking a big game about doing subterranean warfare and tunneling.
1:05:40
Uh do you think he's going to give you for a run for your money with an even harder domain or you think you're going to maintain?
1:05:46
It is a more hard domain, but we'll we'll see what systems actually get employed.
1:05:53
So for right now, yeah, I think it's subc, but he's he's not wrong.
1:05:54
He's always a step ahead. So yeah, drill.
1:05:57
It's going to be eventually it'll be time to drill. It's time to drill. Drill, baby, drill.
1:06:03
Palmer and Vander, uh, well, thanks so much for taking the time out of your out of your day to come chat with us about this launch. Congratulations. Uh, it looks awesome.
1:06:10
The design's fantastic and I'm looking forward to learning.
1:06:13
Yeah, I imagine I imagine you're quite busy because I doubt anybody was creative enough to come up with the dive bar at that at that conference.
1:06:18
I'm assuming everyone's coming by, I'm sure. Yeah. Awesome.
1:06:21
Yeah, we had to shut it down just for this.
1:06:24
So, everyone's very upset.
1:06:25
They're they're lined up outside. I'm not kidding. So, Oh, really? Okay. We'll get back to it.
1:06:29
Thank you so much for calling in. We really appreciate it. We'll talk to you soon. Cheers.
1:06:37
Well, we shut down the biggest naval warfare conference.
1:06:41
Yeah, we set back the America America's military. It's actually brutal.
1:06:43
Imagine Imagine your your Loheed Martin.
1:06:45
You probably spent a hundred times more than Anderl on the booth and then nobody wants to come by if you can't.
1:06:52
Xander is like, "Yeah, come by the dive bar and hang out." Yeah.
1:06:55
you actually get to touch the the tech. Ridiculous.
1:06:57
Uh should we should we go back to the timeline and turmoil?
1:07:02
Do a little bit more timeline and then we will I I mean actually we could move on to uh some of the more optimistic news.
1:07:08
Uh I don't know if you saw Llama 4 launched. That's very exciting.
1:07:13
And of course we got Zuck with a front-facing camera video. Hello everyone. It's Llama 4 day.
1:07:18
Uh Llama dropped a of course the open- source LLM from uh Meta.
1:07:24
Uh now they have a 10 million context window which I believe is 10 times what Google was previously offer offering with Gemini and uh the ELO is insane.
1:07:33
There's a bunch of debate about how much of an advancement this is.
1:07:37
Uh are are the benchmarks getting saturated?
1:07:39
We should get into all of that but I think it's just cool that um what they've clearly recognized is that you need to be superlative in something when you're launching a new product.
1:07:47
And there's a lesson for there for that in even if you're launching like a CPG product, you know, be Celsius.
1:07:52
It's the It's the energy drink with the most caffeine of all of them, more than Monster and Red Bull, right?
1:07:58
And so you you can say a lot of things about it, but like you can d sum it down into what is llama for good at?
1:08:04
Well, they're the best at the biggest context context.
1:08:06
And then there's a lot of other stuff that's interesting. Uh but it's funny.
1:08:10
Uh Austin Red posted a screenshot from Zuck on threads.
1:08:15
Uh somebody said, "Why did you drop Llama 4 on a Saturday, bro?"
1:08:20
And Zuck responded, which is awesome.
1:08:22
normally like the coms people would be like, "Oh, like the person's using bro, like shouldn't engage with that person.
1:08:27
Like they're not serious.
1:08:27
You should only take questions from like really serious people."
1:08:31
Uh, but Zuck just comes in and says, "That's when it was ready.
1:08:35
That's when it was ready.
1:08:35
It was ready on Saturday, so we launched it on Saturday." And I love that.
1:08:37
And Austin says, "Bullish." I agree. Very bullish.
1:08:41
And Zuck's photo on threads is him, an AI image of him with like 25 gold chains.
1:08:46
And that's actually wild.
1:08:46
It's such a good such a good meme that he's just like, "Yeah, I'm I'm I'm rocking the 25 chains."
1:08:52
Give I remember when he's got a piece on in the video, too. Yeah. Yeah. Yeah. He's not holding back. He's he's hanging out.
1:08:58
He's says, "If Satia and Zuck are shipping on a Saturday, what's your excuse?"
1:09:01
Satcha posted, "Thrilled to bring Meta Lama for Scout and Maverick to Foundry today as we continue to make sure Azure is the platform of choice for the world's most advanced AI models." LLM indifferent.
1:09:13
They just want to rent the space. Sachio wants to rent. He wants to vend.
1:09:19
He wants to deliver models all over the place. Uh this is interesting.
1:09:24
There's an article uh a post from uh less wrong uh says recent AI model progress feels mostly like BS.
1:09:34
And uh we won't get into the whole article.
1:09:36
You should just go read it um from zeropath. com.
1:09:39
Uh this was posted by LC on on Less Wrong.
1:09:42
Um, but it tells the story of someone building a uh penetration testing tool driven by AI.
1:09:50
So, uh, you know, penetration testing of course is you you build a a a software application, you put it up on a server on the internet, and then, uh, are there different ways you can get around the security, figure out if there's a different way to to break into the server, get root access?
1:10:05
You you hear about this like WordPress gets hacked every once in a while and people figure out how to get into the admin page and kind of change your blog posts.
1:10:13
Um but of course pentesting is very important especially at the higher level and the more money is at stake the more the bigger the business the bigger the prize for the hackers.
1:10:22
Um and so this this person was building a an AIdriven uh pentesting thing says about nine months ago I and three friends decided that AI had gotten good enough to monitor large code bases autonomously for security problems.
1:10:35
We started a company around this trying to leverage the latest AI models to create a tool that could replace at least a good chunk of the value of human pen testers.
1:10:41
They've been working on this project since June 2024.
1:10:45
And what he goes on to say is that there's all this hype on on on X and in AI circles about a new model that oh now it can, you know, do IMO gold medals and stuff, but for some reason he he Yeah, not yet, but soon.
1:10:58
um but but but he keeps he keeps switching to the new models and getting results that are quantitatively better but not qualitatively better and so it's not really solving his problem and this is this question of you know we've seen with GPT 4.
1:11:12
5 maybe pre-training is maxing out maybe scale is all you need but you got to apply that scale to the right algorithm maybe now it's reasoning models and you got to scale those up maybe it's else program synthesis is basically write have the model write code that does the problem that you want it to do.
1:11:32
Um there's also the just needing new ideas new ideas and and it's crazy I I need to dig this up because I think this would be a very viral clip but George Hots went on Lex Freiedman after GPT3 dropped.
1:11:44
So this was maybe back in 2021 and he said that uh you know AGI or ASI will not be GPT9.
1:11:54
it will not just be scaled up of next token because that is not the algorithm for intelligence.
1:12:03
That is one thing that we do as humans but there are a lot of other factors that go into intelligence and you and you think about that where you know even someone like uh isn't it Daniel Conaman with thinking fast and slow this idea that you have two different frames of thinking.
1:12:16
You can you can be very reactive and think fast but then you can also step back and and there's all these different subsections of the brain.
1:12:22
We barely understand the brain, but we understand that there are long-term memory, short-term memory.
1:12:26
Uh, you know, there's probably some humor segment that we haven't even tried to build in AI yet.
1:12:31
Uh, and all these different the funny bone. The funny bone.
1:12:33
Yeah, the funny bone has not even been tried to be put into silicon.
1:12:37
Um, no, but Mike from Arc Prize and Zapier aligns with what he was saying, which is like, hey, we need we still need new ideas. Yep.
1:12:46
Which is part of what gets me excited about SSI.
1:12:52
Totally trying to take a new approach. Yeah. I mean, yeah.
1:12:53
I mean, I siter seemed to be not only the person that decided that that that read the attention is all you need transformer paper and realized the impact of it because we look back on that and there's this survivorship bias where it's like, yeah, of course, like all these Google brain people put out this amazing paper called attention is all you need.
1:13:13
They describe the transformer architecture.
1:13:16
Of course, that was like going to be groundbreaking from day one.
1:13:17
But you forget that on that day there were probably a hundred papers that dropped and the next day there were another hundred papers that dropped and even that Google brain team was publishing other papers and others other research trees and other paths and even things like symbol manipulation were popular at the time and all sorts of different algorithms were being tried.
1:13:33
Um and Ilia had the foresight to realize that that was the architecture that you could throw a billion dollars of compute at and get a really magical result. He did it.
1:13:44
Open AI released chat GBT.
1:13:44
it. Open AI released chat GBT. it becomes this amazing like you know LLM we know about that they implement transformer architecture in a ton of different stuff even Tesla's autopilot has transformers baked into it now it's
1:13:57
all over the place this architecture uh then he realizes that reinforcement learning kind of the the alph uh you put that on top of an LLM have it selfplay have it talk to itself reasoning tokens that will be the next uh the next amazing thing originally called Qstar very scary. There's all There's all this chaos.
1:14:17
Uh then it becomes uh you know what was it? Strawberry.
1:14:20
Then eventually it becomes 03 01 03 high 03 mini high R1 from DeepSeek.
1:14:25
All these different reasoning models come out.
1:14:30
They clearly deep research.
1:14:30
They clearly advance the ball towards something that's more usable.
1:14:33
You see the coding agents like uh cognition and uh and Devon doing something similar where there's there's a reasoning layer on top of a pre-training LLM.
1:14:42
uh but uh the question is what's next and I think everyone is kind in a and seems to be coming to the conclusion that there will be a next thing in order to unlock the next big breakthrough.
1:14:54
Um and we're excited to watch it.
1:14:57
But as the model as the race for just general LLM training and scale heats up and all the news about you know Grock is in the game now and and OpenAI is scaling up to 4. 5.
1:15:13
There's GPT5 coming at a certain point.
1:15:16
There's uh there's DeepSeek.
1:15:16
Uh Meta has been continually uh pushing the ball down the field.
1:15:21
They have a lot of infrastructure as a hyperscaler.
1:15:23
But there was some uh controversy on the timeline from Nick.
1:15:27
He says breaking meta meta AI internally caught cooking benchmarks to hide poor poor results. Absolute state.
1:15:33
Um, I don't know how how ex uh how um how real this is, but they are alleging some benchmark fraud, which you hate to see. Um, let's read it.
1:15:42
It says, "The original post is in Chinese."
1:15:47
Um, but the translation here says, "Despite repeating traded efforts, the internal model's performance still falls short of open source state-of-the-art benchmarks, lagging significantly behind.
1:15:55
Company leadership suggested blending test sets from various benchmarks during the post-training process, aiming to meet the targets across various metrics and produce a presentable result.
1:16:06
Failure to achieve this goal by the end of April deadline would lead to dire consequences following yesterday's release of Llama 4.
1:16:13
Many users on X and Reddit had already reported extremely poor real world test results.
1:16:16
There was a debate about whether or not you could even run this on uh you know I'm sure people will like play with the models and we we talked to some of the open AI folks about like yes there are all these eval but at the end of the day you kind of just got to talk to the model and play around with it and see if it's useful and then also you need to implement into your system or your codebase and see you know is this solving a real problem.
1:16:39
Maybe it is, maybe it isn't, but it kind of depends on your your the economics of your business and the and and the application that you're building forward.
1:16:47
So, uh interesting to see where this goes.
1:16:49
There's been allegations of benchmark fraud and and eval saturation all the time.
1:16:53
Some of it is just completely accidental just because, you know, someone posts a a benchmark, then all the results go onto the internet, that goes in the next scrape, and then of course it gets baked in.
1:17:04
And so, uh, you know, AP bio, for example, every AP bio question is just on the internet now.
1:17:11
And so, it goes into the pre-training data.
1:17:12
And so, it's basically just memorized every AP bio question and answer.
1:17:17
Is it really good at biology?
1:17:19
Like, it's kind of hard to say.
1:17:21
It's certainly good at looking up the answers, which is great, and that's useful. Memory is all you need.
1:17:24
And it's a it's a great Yeah, it's a great Is it intelligence?
1:17:29
These things are certainly extremely high on knowledge, and they are amazing knowledge engines.
1:17:33
Isn't that the term you use? Knowledge engine. Answer. Answer engine.
1:17:37
Like they're fantastic at that.
1:17:38
And what I love about Llama 4 is that it is funny to think about you could have if if you took a human who had was sort of lowest on intelligence and then you gave them all the knowledge in the world.
1:17:50
In so many situations they could fake intelligence.
1:17:56
Like they could you sort of ask them something, they give you an answer. You go, "Wow, so smart."
1:18:02
do do Jeopardy or do do uh trivia at a bar, you'll be like, "That guy's so smart.
1:18:06
He knows exactly who won the World Series in 1982."
1:18:08
But it's like, is that intelligence? It's unclear.
1:18:10
Anyway, I like David Holes, founder of Midjourney.
1:18:14
He says, "I desperately want Mark Zuckerberg to pose with four llamas for the Llama 4 release. I'll even say please.
1:18:21
We need aesthetic moments in tech, and this llama branding is good for one thing and one thing only." Great picture. Great picture.
1:18:28
Clearly generated from MidJourney. Looks fantastic.
1:18:30
But Zuck has the resources to do it and I think he has the the character and the and the personality to pull it off and have fun with it.
1:18:37
And so I would I would hire drop the chain, pick up the llamas. Yeah.
1:18:41
Do get get four llamas together.
1:18:44
Do some do some llamas llama photos.
1:18:47
Uh anyway, Toby Lkey has uh uh a leaked memo that's been floating around that's pretty interesting all about how uh spot uh Shopify is using AI.
1:18:57
Uh he says AI usage is now a baseline expectation.
1:19:02
Uh we are entering a time where more merchants and entrepreneurs could be created than any than in any other than than any other in history.
1:19:11
We often talk about bringing down the complexity curve to allow more people to choose this as as a career.
1:19:17
Shopify's whole business is making e-commerce easy.
1:19:19
So they want to make it as easy as possible to set up an online store.
1:19:23
They've done it very very well in my opinion, but they want to continue.
1:19:26
Each step along the entrepreneurial path is rife with decisions requiring skill. judgment and knowledge.
1:19:30
Having AI alongside the journey and increasingly not just doing the consultation but also doing the work for our merchants is a mindblowing step function change here.
1:19:40
Our task at Shopify is to make our software unquestionably the best canvas on which to develop the best businesses of the future.
1:19:46
We do this by keeping everyone on cutting on the cutting edge and bringing all the best tools to bear so our merchants can be more successful than they themselves used to imagine for what we des for what we need to be absolutely ahead.
1:20:00
And he uh outlines this in an email to every Shopify employee.
1:20:05
Reflexive AI usage is now a baseline expectation.
1:20:08
Maybe you're already there and find this memo puzzling.
1:20:12
In that case, you are you already use AI as a thought partner, deep researcher, critic, tutor, and pair programmer. I use it all the time.
1:20:18
And so, he's telling folks, you got to be using AI and we got to uh build it into all of our products.
1:20:25
So, just interesting to hear from a big public company CEO in founder mode.
1:20:27
Definitely pushing towards more AI. Yeah.
1:20:30
I'm gonna go out on a limb and say I don't think this was leaking.
1:20:35
Oh, you think it's recruiting? I think uh Oh, no. My my memo leaked.
1:20:39
my extremely well-written, kind, visionary memo.
1:20:42
I think it probably was leaked, but he did post it now and it's good content.
1:20:46
No, I'm sure it would have leaked.
1:20:47
It's just it's just you kind of write these things with leaks in mind.
1:20:51
Anyway, uh we got our next guest coming in to the studio.
1:20:56
Welcome to the show, Logan. What's up, guys?
1:20:58
Uh we wanted to bring on the foremost geopolitical expert, tariff expert, and and you couldn't you couldn't get that person.
1:21:07
So I uh you got a VC which is the next best thing I guess.
1:21:11
No honestly grow what we've seen is growth stage VCs tend to be you know have the strongest opinions most strongly held.
1:21:17
So I listen I am open to I would love nothing more than to be wrong about all of this stuff and I uh I spent my weekend glued to my phone more than I should both out of shot in Freud and also uh debating Keith Reo back and forth which has he already come on? Is he already poison?
1:21:37
No, he's coming out in 30 minutes.
1:21:38
Maybe you just stay on and start arguing if we're actually doing a podcast tomorrow.
1:21:42
He and I are I'm going to try to be a neutral moderator in that discussion uh rather than a uh a participant.
1:21:48
But uh yeah, it was uh it was interesting.
1:21:51
It was interesting to hear his perspective about the uh what the intended results are of this.
1:22:00
Uh because I guess I I I typically try to stay out of like politics uh for the most part, but this I don't know this feels a little bit adjacent in that it's pretty economically driven and does tend to impact the world that I play in.
1:22:14
So I ended up dipping my toe into it far more than I wanted to.
1:22:18
Well, let's start how conversations have gone with portfolio company CEOs.
1:22:24
You guys are obviously been a growth stage software investment firm.
1:22:28
Y but I'm curious uh in talking with CEOs over the weekend, what's been your sort of high level what's been what's been top of mind?
1:22:39
Uh aside from just kind of battening down the hatches maybe.
1:22:41
Yeah, I mean I think it's mostly that uh I I I will say it sort of feels like we've been through three different um existential uh potentially risky circumstances over the last what is it five years.
1:22:56
five years. uh we we had the March COVID stuff and then we had the unwind that sort of happened postzer uh the time to get fit or whatever it is and now we have this and so feels like most of our CEOs are are kind of old hat uh in some ways at how to deal with this stuff and
1:23:13
I do think that we measure our time in months and years and not um you know days and hours if you will and so I I think it's kind of a wait and see approach in particular because it's hard to know is this a means to some end that might be orthogonal to the pure economic purpose of it. And I think you're sort
1:23:33
And I think you're sort of seeing that with what Navaro comes out and say says versus what Bessent will say versus what Elon's, you know, out out tweeting now.
1:23:42
It's a little bit hard to know um what the strategy is behind this.
1:23:48
I do think we probably need to take it literally at this point and assume that this is probably here to stay in some way, shape or form, but I do think that our company shouldn't be totally um uh moving the dials too much in the near term.
1:24:08
What do you think's happening?
1:24:08
Uh I mean, you do those fantastic uh public market reports.
1:24:12
um it feels like just kind of everything's down, but I would assume that some of the larger SAS companies that in the public market should be less affected.
1:24:24
Um but do you think that there will be any sort of like bifurcation or like uh flight to safety that might happen in the next uh couple months as people kind of figure out who's actually exposed?
1:24:36
Like if you're Nike, it's different than if you're Salesforce, I imagine.
1:24:40
Yeah, it's it's a great question.
1:24:42
it's a great question. I I I think that it seems because we've gone through this twice before and ultimately the results that were learned out of that in the postcoid uh you know after March of 2020 and then after um 2022 it seemed that everyone kind of
1:25:02
learned similarish lessons of it and maybe the wrong ones like uh postcoid the the right answer was to invest into all these tech companies and so I do think with the war chest that a lot of the venture firms have right now, I think it's going to take a while before people actually stop dancing. I think
1:25:19
I think everyone's going to convince themselves, at least in the near term, that this is a good buying opportunity.
1:25:24
And if you look like I was looking at some of the numbers, I think March was the highest uh buying that we've seen on record uh from retail investors.
1:25:35
And so it feels like a lot of people have learned similar lessons of like, oh my gosh, well, when a dip happens, that's actually a better buying opportunity than it is a time to be fearful in this.
1:25:47
And so my guess is it's probably going to take a couple orders before uh anyone starts to capitulate that maybe this is the new normal, particularly given how manic the market has kind of been and the decision seems to have been. Yeah.
1:26:01
Um, I remember during the kind of Zerp Unwind post SBB crisis, you did a show where you were talking to somebody about just this idea of like dry powder and everyone was saying, "Oh, well like the VCs have so much money they have to invest and of course there were a bunch of funds that like returned capital or size down their funds."
1:26:19
Um, but then most of the funds just kind of ripped pretty quickly and came found excuses to move into AI and stuff.
1:26:26
And uh at this point it feels like if you're an LP in a large fund and you see the market down, you've been trained.
1:26:35
So I guess the question is like like do LPs pay more attention to this than GPS or or does this or or is it even a longer cycle for the LPs to actually start making calls and saying like, hey, how are you adapting to this strategy?
1:26:51
Yeah, I think that the uh the GPS in some ways like when you're a hammer everything looks like a nail.
1:26:58
like a nail. If you're if you're thinking like, hey, I need to do growth stage investing, then I think a lot of people just operate with, okay, I'm going to invest in the relative quality of the names that I see over the next
1:27:12
quarter, two quarters, four quarters, and try not to be too uh episodic because at the end of the day, what we're trying to deliver back to our limited partners for the most part isn't um some relative uh uh adjusted return versus all the other sectors in the economy, right? We're not deciding
1:27:28
economy, right? We're not deciding should we go buy lumber or should we go buy futures contracts or go buy equities in the public markets like we're delivering some sliver of a product and I think within a lot of LPs that's also the case where you've seen kind of this uh as it's been more institutionalized you've seen um different people become
1:27:48
responsible with oh I'm not just responsible for the venture book I'm actually or I'm not just responsible for private's book I'm actually just responsible for the ventures book and we're going to allocate 8% or whatever it is to that and and so at a at a micro level I think a lot of the LPS are um incented almost similar to the to the GPS. Now as you go up further and
1:28:07
Now as you go up further and further up the stack to the CIO or someone that oversees some like broader purview of all this stuff then those people are making relative tradeoffs of like is venture at a 12% level like the right exposure that we want to have going forward and that's where the domin denominator effect can really play through.
1:28:27
Um, I will say back to the everyone kind of learning similar points though, it does seem like a lot of the LPs have decided, hey, um, the best time to be in these managers is is when things are going down and so we're going to commit to it.
1:28:43
And then there's also this like kind of principal agent problem, I guess.
1:28:46
I don't know if that's the perfect term for it, but if you leave a uh a firm, then they don't let you back in the next fund.
1:28:54
like you don't get to cherry pick, okay, I'm going to be a part of this vintage, but not that vintage for the most part with the blue chip names.
1:29:01
And so the LPs in some ways are sort of faced with a a decision of do I want to get out of this manager almost in perpetuity or do I want to stick with it and trust their ability to navigate those waters?
1:29:12
Uh and so I think that there's a bunch of different dynamics that sort of play out in all of that.
1:29:18
Uh and it's going to take a while for it to role through, right?
1:29:21
like fund cycles are two to three to four years and it's only on those time periods that the LPs are really making these decisions.
1:29:27
So I think we're a long way from knowing. Yeah.
1:29:28
Doesn't this just continue to overheat AI in that you know especially and and other sectors too when I look at the areas that have gotten the most hype and attention in some of the biggest rounds recently.
1:29:43
It's defense, robotics, AI.
1:29:46
And like if I'm a GP or I'm an LP, those are three areas that I actually, you know, the world's becoming less stable.
1:29:55
It feels, it certainly feels less stable.
1:29:56
Uh AI is not getting tariffed and we need to, you know, the sort of onshoring reshoring narrative just means that you want to deploy even more dollars there.
1:30:06
Yeah, it feels actually very on theme. Go ahead.
1:30:08
No, no, you know, it just feels very on theme, but yeah, what's your take? I I mean, I think so.
1:30:14
think so. Although I wonder um when we talk about like AI not getting hit or semis not getting hit with tariffs like it's such a complicated global supply chain that um I do worry about the um like I I I think and I've heard anecdotally from some of the big
1:30:36
foundation model companies that um the different tariffs and the the issues that you have to deal with not just China or Taiwan or South Korea but also um even Mexico like there are a bunch of inputs even if it doesn't feel like
1:30:52
they're direct inputs there's so many complicated pieces of the puzzle from an AI standpoint that um that I think it's going to be hard to disassociate uh the the aggregation that is what's being tariffed into AI uh and in talking
1:31:10
to people over the weekend that are exposed to these large model companies Um, I think there's a real real concern about what this is going to do to those businesses, uh, and their ability to access the different things that they ultimately need. And it could be
1:31:24
And it could be everything from, I don't know, cooling to, um, to different server types.
1:31:28
And all these different pieces are a part of a big chain.
1:31:32
And so, I will think there I do think there will be a flight to to those things in some ways.
1:31:36
But I I I'm hesitant to say that they're not going to be impacted.
1:31:41
I actually think especially the way at least this has been messaged thus far, it feels like there's going to be a lot of different inputs that ultimately cause a bunch of um uh issues no matter what the end market is.
1:31:53
Be it defense or be it robotics or be it AI.
1:31:54
Yeah, we were talking about electrical transformers, not the architecture, but very key ingredient in drawing power into these huge data centers and most of those are made overseas, many of them in China.
1:32:06
If there's if there's tariffs on those, it could slow down the roll up roll out of new data centers.
1:32:12
Although I imagine that's not a huge portion of like the per token cost.
1:32:16
But even like Poly Market has the chance of a US recession in 2025 at a 62% chance.
1:32:20
If there's a recession, like people could say, you know what, $20 a month GPT or chat GPT plan, like maybe I downgrade.
1:32:29
Uh there could just be like some consumer hesitancy to add a new subscription as people tighten their belts.
1:32:35
I think I think that's 100% where we're headed uh on all this.
1:32:39
Like I think that um at a minimum some of these things are self-fulfilling in some ways where if we have the perception of a slowdown, then people are going to stop spending which will inherently lead to a slowdown.
1:32:53
And so it starts to become a little bit self-fulfilling in that regard.
1:32:58
And so I I've seen stuff I mean I realize poly market saying 62%.
1:33:03
And it sounds like I think Goldman moved their estimates to 45% this morning or their economists did.
1:33:08
Um, and I've seen some people saying we're already in the in the middle of a recession.
1:33:12
I mean, just the amount of uncertainty that this is introduced.
1:33:15
introduced. I don't know how you do any planning if you're a if you're a business right now and you're thinking through like should I uh maybe not Apple or someone that has like you know a gobs and gobs of money to go figure this out but like a midsize uh public industrial company or something if you're thinking through like whether or not to start rebuilding in the US which in some ways
1:33:40
is a very noble goal particularly with regard to security and so I don't mean to be like entirely anti-tariffs Uh but if you're thinking through that and you're not sure, I mean, we've seen some people start to break ranks on tariffs already, be it Elon or Ted Cruz or um I mean, uh Aman, there's like a bunch of people in the Trump world that's starting to break ranks. And then
1:33:58
And then Congress does theoretically have the power to revoke some elements of the president's tariff uh power.
1:34:05
And so, I mean, there's murmurss of that, not to mention midterms in the next whatever it is, 18 months.
1:34:12
And so you have all these different things that could throw a wrench into the the tariff plan.
1:34:16
Not to mention maybe this is just a means to some other end as a negotiating tactic.
1:34:24
And so I don't know if if I think people are going to be stuck in the state of paralysis a little bit of like what do we what do we actually do right now?
1:34:30
And inherently I think that becomes self-fulfilling in the way that it's going to lead to a recession for us.
1:34:36
I hope again I hope I'm wrong.
1:34:38
Like I don't want to be right about any of this stuff.
1:34:42
Uh do you how do you weight uh posts coming from the handle chamoth on X because um you know he's he's clearly one to happily sort of like talk his book but at the same time Yeah. Yeah.
1:34:58
That that guy the C h a t uh like the guy the guy talking. Yeah. Yeah.
1:35:03
That guy that guy big podcaster but no so so there's two things happening.
1:35:08
one clearly happy to talk his own um book.
1:35:12
He's probably super long.
1:35:12
Laura Piana uh among other things, but um he also is like, you know, podcasting with the pe some of the biggest sort of like he's an insider. He's an insider, right?
1:35:24
And so it's one of those things he's he's coming out, I think it was last night or this morning talking about the Mara Lago accords.
1:35:32
How do you uh how do you kind of evaluate, you know, it's a signal.
1:35:35
I don't know if it's a good signal or an accurate one, but um do do you put any weight on on anything?
1:35:42
You know, there's this great feature I've started to use on um on Twitter X.
1:35:47
Uh and you can actually do it for any account.
1:35:50
I I uh you it's um I I forget exactly where you find in the screen, but it mutes these people talking and then you don't see what they have to say.
1:36:00
And I didn't know I didn't know it existed.
1:36:03
Uh, and so I will say I don't know what made me think of that, but I will say that um I I think you have to take some of the insights that these folks have because of their access. Yeah.
1:36:16
Um, you have to take it um with probably a grain of salt, but also as a potential angle of dissemination of information uh or at least trial balloons going out there.
1:36:28
I saw right before I came on, Kimble Musk tweeted something about how terrible tariffs are and uh maybe he just woke up today and thought that or maybe you know his brother who he sits on the board of and I think a lot of his net worth can be attributed to uh maybe encouraged him to go say that.
1:36:47
And so I think it to be dismissive of any of these individuals uh I think is probably not not particularly do but I I'll even if I'm making a joke I'll I'll say it out loud to John first and be like what do you think and if John thinks it's funny I'll post it if he says I don't know which is the exact same thing as uh you know the the Kimble Elon thing.
1:37:10
Yeah, the Elon thing is and so I but but but I I think all of that is to say I'm not sure there's like I I think we sort of seen that that what what Bessent says versus what um Navaro says versus what uh what um Elon says like there's not any consistency that uh at a high level is coming out from those different people there.
1:37:33
all the messages are slightly different.
1:37:35
And so I I would I would find all this stuff pretty intriguing if not um if not necessarily uh factually accurate.
1:37:45
And so I feel like all these things are kind of informing the little inputs into my decision.
1:37:48
But I do think it's interesting to see people like Dan Loe or Dan Loe uh Bill Aman break rank uh and start to come out and really be negative against these tariffs.
1:37:58
Uh I I mean we can joke and uh I have certainly on Twitter about um him and changing his views and all this stuff, but like at least he's owning some of the decisions that he now finds to be wrong.
1:38:11
I I find the most frustrating thing is a lot of people just morph their view into whatever um fits into the the uh I mean Donald Trump specifically, but I this is true of of people on the left as well.
1:38:25
Uh that whatever they say is their talking point, they just follow it in suit.
1:38:29
And so I give Aman credit for breaking rank and uh maybe we'll end up seeing Chimoth or some of those other guys do the same. When's the last time?
1:38:38
Yeah, the Elon thing is interesting because you you'd think he'd be a big beneficiary of tariffs because of the cars and the exposure for Tesla.
1:38:43
cars and the exposure for Tesla. But my my my question is like I feel like tech VCs like shifted so into the Trump camp like I'm not even seeing like like the the big dissenting opinions on tariffs are coming from like Tyler Cowen and the
1:38:58
economists and I'm not seeing that from like big GPS and it's it's like have they just completely overrotated or do you think that they're just not even thinking about it or not exposed to it like what's driving that lack of well one one thing to note uh Tesla sell sold sold almost 34 of a million. They sold
1:39:15
They sold just under 700,000 cars in China last year. Trade global company. Very bad.
1:39:26
And I'm sure they source from China very heavily for certain things. Yeah.
1:39:28
And I think they have they have factories there as well. Gigafactory in Shenzhen.
1:39:33
You know, there's this interesting thing that's uh that's played out where I think kind of post the election, it was so uncool to have voted for Kla Harris.
1:39:45
Uh to the to the point that I was at parties kind of being accosted like people asking who I voted for and all these things and I was like and I just found it an unusual um swing of the pendulum in that way.
1:39:58
And I give the Democrats there's a lot of blame that Democrats should should have on that.
1:40:03
the one that I there's obviously all the DEI and whatever all that stuff.
1:40:08
Uh but I do think that if you look Democrats have been very um anti-growth and anti- capitalism in a meaningful way.
1:40:18
And I think it was just kind of embarrassing in some ways to uh be extolling the virtues or pushing back too much over the course of the last couple months because it was such a resounding um election defeat.
1:40:32
resounding um election defeat. And there was such a even the people that I think within the the uh at least the parties I know uh that within technology that voted for Kala Harris like they they all seemingly held not all but a lot of them seemingly held their nose and did it and
1:40:50
was like hey this is the lesser of the two things and so now under the tariffs um it's been I feel like people are like warming up their thumbs a little bit like sort of forgetting what it's like to like push back too too much on on this and so I I found myself waiting in the waters of all of this far more than I expected. What I find most interesting
1:41:08
What I find most interesting though at like a high level is just how populist uh a lot of the rhetoric within the Republican party or at least Donald Trump has become.
1:41:17
And um I mean you sort of go back and you look at Milton Friedman or Ronald Reagan or like some of these OG conservative icons and what they had to say about tariffs are just so different than than what we're hearing from our president today.
1:41:31
And so I guess the question in this is like does this present ultimately if this is going to be the move that the Republican party makes from a populist standpoint, does this present an opportunity for the Democrats to be a little bit more progrowth and like let's grow the pie?
1:41:48
And I think it was pretty well time that Ezra Klein and Derek Thompson wrote that book abundance, right?
1:41:51
Because this there was no such thing really over the last decade as a progrowth Democrat, I think.
1:42:00
And that would be an interesting lane for the party to try to rally behind. I just don't know.
1:42:04
Ultimately, these things seem to follow some like charismatic politician uh in some ways.
1:42:10
And so I don't know who that person is.
1:42:12
Shapiro seems like someone that could be interesting in that regard.
1:42:14
Uh you know, maybe if we tweet enough, we can get Weineberg to run for some political office.
1:42:20
He can take the proc Democratic thing.
1:42:23
Maybe that's Aaron Levy's next uh next, you know, gambit he's going to go down is politics.
1:42:27
Uh, but it feels like that's a mantle that that people should really take.
1:42:31
I don't think his hair can get any grayer. I agree, honestly. And it's still full. That's the thing.
1:42:35
I don't know if that's just genetics or hims or or who we credit that fullness of hair.
1:42:41
It's definitely gray, but man, it's like a robust set of hair.
1:42:43
It almost feels like he's set up to be presidential in that regard.
1:42:47
You take a company public at like what, 29?
1:42:48
Like you're gonna go gray, which will do it to you. Could you see it though?
1:42:52
I mean, he honestly looks like a West Ring, you know, like a Josh Lyman kind of running into Martin Sheen, President Bartlett's office on the West Wing now with that gray hair. I could see it. Yeah. Fantastic.
1:43:04
What did you What did you think about uh Toby's leaked memo from this morning where he very very eloquently lays out how he wants his employee?
1:43:14
Like to be to be honest like one it's well timed in my point of view and that you can basically say to your team we're freezing hiring without saying we're freezing hiring because now it's like hey if you want to hire if you want to actually make an offer hire an agent. Hire an a Yeah. Yeah.
1:43:29
No, but I'm curious uh you know obviously if it was leaking wouldn't have been that damaging but it's cool that he put it out there.
1:43:37
I'm curious what what your immediate thought was.
1:43:39
Yeah, it it's um it's something we've been thinking more and more about and I've seen my my my own uh workflow switch so much more to being AI native in like what I'm doing on a daily basis.
1:43:54
I'd be curious your guys perspective on like prepping for this show.
1:43:57
Um, it's just so much easier to get information at your fingertips and and get access to uh I feel like I learned more this weekend or the last week like going really deep into the history of tariffs and all this stuff.
1:44:12
It would have taken me in the past like I don't know three weeks to do what I did over the course of the last four days, five days.
1:44:19
And so I get the perspective of like hey we have to make our company AI native in some ways.
1:44:24
Um I do I imagine there's a little bit of marketing behind it like behind every good um leaked internal memo.
1:44:32
Uh there does seem to be an element of both signaling to the broader market as well as potential new candidates that are coming on board like this is the new normal.
1:44:45
This is the way we're going to do things.
1:44:47
But I haven't heard anyone else do it. I don't know.
1:44:49
You guys might Well, the Clara I mean the CLA took another approach. It wasn't a memo. He just came out. we're not hiring.
1:44:54
And it was like almost overly aggressive and everyone was like, "We don't really buy it, man. Like, it's too much."
1:44:59
And then Jeremy uhh Jeremy Diamond Jamie Diamond uh had that leaked like voice call. Yes.
1:45:07
Where he was like, "You got to work really hard."
1:45:09
And it was like, "Okay, this is just a billboard advertisement for your company and your culture, which is cool."
1:45:14
But I think the lesson is like every we all need to be leaking more memos. I think that's right.
1:45:17
I your your your redpoint analysis, you shouldn't you shouldn't try and post that.
1:45:22
You should be like, "It's leaked. We'll leak it. We'll leak it.
1:45:24
That's what I I don't know if you guys ever uh like New Cocover, Eric Newcomer, it's like a bunch of interesting like oh here's founders fund returns and heck like how did you where on who would have given you these amazing returns, right? Good news.
1:45:40
You got to leave that stuff. Yeah.
1:45:42
The other one I thought was really masterful PR was um was ASF and and Whiz last year.
1:45:47
Um what was interesting in that whiz announcement uh when they when they announced that they were going their own and not going to be bought by Google was like everything that they said was then reported on the media be in the media because of the leaked memo and so they got to really control the narrative of how things went down with Google.
1:46:07
So, I actually the dark arts of PR I think is is a pretty clever thing um for companies to try to master both as for morale and hiring and just public perception.
1:46:20
Um, the other one I thought was funny, not to give credit to Whiz, but I don't know if you guys remember this, they like Sentinel One had some company that was agitating to buy them or something, and Sentinel 1's like a $6 billion public company.
1:46:31
And uh, I think Whiz announced that they were interested in exploring the acquisition of Sentinel One.
1:46:39
The Sentinel One CEO is like, "Fuck off." Like, what? You're not buying us.
1:46:44
What are you talking about?
1:46:44
But like, you know, it gets reported in that way.
1:46:49
I think Toby's really smart in that regard.
1:46:52
Uh, and I do think we'll see this divergence of fluency of of people's ability to use AI.
1:46:57
I still get asked questions from people internally or externally from buddies that are like so quickly answered by a prompt into a model.
1:47:07
And so I wonder when that behavior shift is going to happen uh for people in mass.
1:47:11
But I think signaling that that's an requisite thing is smart from an employee standpoint.
1:47:15
Uh, speaking of models, uh, did you read AI 2027 and do you think we're just sort of picking up pennies in front of a steamroller right now with all the tariff stuff?
1:47:26
Because if if AI 2027, either path we go on, uh, the forecast basically means the economy will change by like a 100,000% or something like that.
1:47:37
I it certainly seems I mean man I really hope uh I I really hope we get the ubiquitous sort of uh growth in all of this.
1:47:47
Remind me I just saw it tweeted about.
1:47:49
What was the what was the net of AI 2027? What was the takeaway?
1:47:51
Super intelligence by 2027.
1:47:54
So uh extreme compounding growth driven by AI models that can do their own AI research starting at the end of this year.
1:48:02
uh no no hiccup in any of the scaling laws uh a quick path to you know 10 terowatt it involves it evolves basically by you know 2027 2028 open AI buying every automotive manufacturer and turning them into self-replicating robot production facilities I like that will we still be able to um will we still have our jobs like screwing doing the screws into the iPhones like that will be in America.
1:48:34
That's the main Okay, so we can do that.
1:48:36
Our jobs might be gone, but yeah, that's uh that sounds good.
1:48:39
I will say this website's super slick.
1:48:41
Uh it is it's a really cool website.
1:48:43
You scroll down and it like it updates the probabilities and takes you through all the time.
1:48:47
I mean, it's a beautiful feature.
1:48:48
People are calling it like science fiction fanfiction, but I like it. It's entertaining.
1:48:53
No, it's a it's a very cool exercise to go through.
1:48:54
It it to me sort of the great irony of this whole situation is like right now nobody can talk about anything other than the tariffs and fixating on like what's the next post on truth social bull market for true social usage.
1:49:08
Uh but uh but then you know you know the big winner in tariffs right now is Pete Hegsth.
1:49:14
Man, I uh we were all we were talking about last week.
1:49:20
Signal this, signal that. Is he in? Is he out?
1:49:22
And now that is a long since forgotten thing.
1:49:25
So I uh if there's anyone that I think deserves credit or is celebrating this, I think it's him.
1:49:30
Last one uh for me, underrated voice right now online.
1:49:34
Anybody breaking through that you think is uh good signal?
1:49:39
you know who I I mean I I've sort of appreciated this mix of uh of politics, economy, and all of uh all of that stuff.
1:49:49
So I really Modest Proposal I think's always done a good job.
1:49:52
I don't know if you guys follow Buco Buco Capital.
1:49:54
Uh I always find him super entertaining and some of the stuff he's he's tweeting out.
1:49:59
Um so those are probably the two biggest ones that I've been uh enjoying of late.
1:50:04
Uh but I I' I've definitely added a lot of uh econ people to my LA of my rotation over the course of the last 10 days or something.
1:50:14
So yeah, good time to be an economist.
1:50:17
Bull market and economist posted.
1:50:17
I I've always I've always honestly thought that you would be the kind of guy to have like a really big alt account that we all like followed and nobody knew.
1:50:28
You know what's funny is I uh I feel like I tweaked too much of my unhinged stuff, at least I did for a while for my normal account.
1:50:35
So, well, he does have an alt.
1:50:38
He does have an alt, but it's just about basketball. Yeah, that's right. College football, too. I'll sneak in there.
1:50:41
I I will say I was accused of at different points in time being um uh I don't know VCs congratulating themselves like all these different things and I'm like I I just I don't know.
1:50:52
It feels it that was pretty unhinged things for my own account. So, yeah, for sure. For sure.
1:50:59
Uh well, looking forward to your uh you sort of moderating this debate tomorrow.
1:51:05
If I hang on, will Keith show Is Keith the next guest? He's the next guest. Hang on. You can hop on.
1:51:09
Uh should we give Should we give a preview?
1:51:10
Listen, I uh I mean, I teased out from him all his stated goals of what he was thinking was going to come from all of this stuff.
1:51:19
So, I hope you guys uh you know, pin him down on all that stuff.
1:51:21
I need to make sure I have all my prep work done.
1:51:23
He's sort of open sourcing the manual to debate him by uh by tweeting all his takes.
1:51:29
So, I mean I mean the the the debate that was going on in the timeline was just that he's he's somehow found a way to make no matter what happens proof that it's working, which is kind of genius. I like that a lot.
1:51:39
I don't know if I I probably can I share on this screen?
1:51:44
Yeah, you can share here. Hang on.
1:51:45
Just whatever you share is live, so don't share a password. I know. I know. I know.
1:51:49
I need to I need to make sure I get Oh, wow.
1:51:50
It's the returns from Logan's portfolio. They're fantastic leads.
1:51:54
Oh, what a what a quick 60% IRRa for a decade.
1:51:57
It's all these models reaching out to me.
1:51:59
I was like, "No, I'm married, guys. Take it easy." Uh, let's see. I can't find it.
1:52:03
Uh, but it was it was Oh gosh, where is this?
1:52:06
Uh, give me one second here.
1:52:08
I'll wait while uh while Keith comes on.
1:52:10
But it was essentially a meme of like the Oh, here it is. Uh, let's see. How do I share this? Hey, Keith. How you doing? Great. How are you guys?
1:52:19
You're you're on with Logan Bartlett, too. Prepare this. Can you see it? Cool.
1:52:23
prepping for the next uh for the next for the next debate tomorrow, right?
1:52:28
Is my uh is my thing coming up or no?
1:52:30
Is this prime time and that's the backup? Yeah. Yeah.
1:52:32
Yeah, this is prime time.
1:52:34
All right, I'll let you go, Keith.
1:52:37
Keep open sourcing all the points of your debate.
1:52:38
I uh I want to hear all the talking points.
1:52:40
Uh just get them out there in the wild for us. Good.
1:52:44
One day I'll get you into turn you into a DJT voter.
1:52:46
Yeah, maybe tomorrow you're gonna convert him from a member of the Panakin party, which Trump says is a new party based on weak and stupid people. That's me.
1:52:55
I uh I actually am getting my my card and badge tomorrow. It's coming through. So, yeah. Yeah. Yeah. All right.
1:53:02
You might win the economic department, but you'll lose the dunks for sure. There's no chance. Yeah.
1:53:08
We'll FedEx won a Paul Graham in the UK, too. Okay. Yeah.
1:53:10
You you you can probably buy in bulk at this point, Keith.
1:53:14
You just send them around. So, all right. to see you guys. Great to see you, Logan.
1:53:17
Uh yeah, Keith, how you doing? Great. Yeah.
1:53:20
So, you're happy about all this?
1:53:22
Well, I mean, obviously there's, you know, volatility, you know, can be terrifying for everybody. Yeah.
1:53:29
Um but I I think directionally the administration has the right strategy, which is we need to address the absurd cost of our debt.
1:53:36
We need to rebuild American manufacturing and there are certain strategic industries we absolutely need to have control of our which we learned during COVID.
1:53:45
We're massively exposed to strategic weaknesses.
1:53:49
We couldn't manufacture even prescription drugs during the co you know fiasco.
1:53:54
And then on top of that we need to unlock this golden age of prosperity which does require rethinking uh globalism does require rethinking our tax and regulate overt taxed and overregulated state and so I think some people are isolating tariffs as an individual lever in a grand equation and there's a lot of moving pieces the country does need to deregulate.
1:54:15
Biden alone just in the Biden administration we added $1.
1:54:19
4 trillion dollars of regulatory costs.
1:54:21
Trump will get rid of all of that and go back, you know, and reverse prior administrative buildup of regulatory burdens. That's great.
1:54:29
Energy costs soared under Biden.
1:54:31
We need to drill baby drill.
1:54:33
We need to bring down the cost of energy which a major input into goods and services goods most is some services like Uber.
1:54:39
And you need to um invest in the future of technology which also lowers the cost of goods.
1:54:45
But tariffs are also strategic.
1:54:47
The best way to often convince foreign countries and nations to do things we need them to do is through what I call economic statecraftraft and tariffs are perfect lever.
1:54:58
Let me give you two examples.
1:55:00
Canada has been ha has been enabled under the Trudeau, you know, regime, an incredibly poorest border and the Mexican cartels took advantage of that and imported fentanyl at massive scale into the United States and various people in the administration, Biden, the new administration were complaining about this, but Trudeau administration did literally nothing to seal the border.
1:55:21
Think about these, you know, cartoonish uh Canadian Mounties on their little horses.
1:55:26
That's basically the entire security protecting the northern border from fentanyl and the cartels have been killing Americans uh through the northern border.
1:55:34
So once Trump started threatening tariffs all of a sudden even under like the you know current regime which is not particularly conservative they started cracking down on the border.
1:55:43
So we've already seen improvements in interdictions of fentanyl uh from Canada.
1:55:47
All fentanyl, virtually all fentanyl that's manufactured, the precursors are manufactured in China with the knowledge and consent of the CCP.
1:55:55
So 100,000 Americans are dying completely unnecessarily because the CCP and indirectly Mexico and Canada aren't willing to do anything about it.
1:56:03
Trump has told China and will continue to tell China that when you stop allowing the precursors of fentanyl to be produced in China, we will relax some tariffs.
1:56:14
It's much better if a 100,000 Americans are alive even if the stock market goes through a day of turmoil.
1:56:22
Uh what uh historical precedents are you digging into?
1:56:25
We've seen a lot of people uh calling up Brettton Woods uh the gold standard or deping.
1:56:30
Um what are you looking to to kind of inform lessons?
1:56:36
Ben Thompson today was writing about how the Nixon shock was received very well from the public.
1:56:42
The New York Times was raving about it.
1:56:44
The market jumped way up, but over time it became very uh very it was a very rough decade in the 70s.
1:56:52
What are you looking to to inform uh where we go from here?
1:56:55
Well, I look first of all just 2017 to 2020.
1:56:56
The first Trump administration was a massive success until COVID was unleashed arguably, you know, intentionally, arguably through misfe malfeasants or negligence in the American people and the blue states and the blue cities shut down.
1:57:14
This was an incredible economy.
1:57:14
We had high growth and low inflation, everything we want.
1:57:18
And so despite that two, despite that three-year trajectory, we also increased tariffs massively strategically.
1:57:26
And so, and every economist, by the way, was wrong.
1:57:31
There's a list, a laundry list of economists that said tariffs wouldn't work in the first administration.
1:57:34
So, they were wrong then, and they're going to be wrong now.
1:57:36
So, that's the most relevant history, and it's pretty predictable.
1:57:40
Um, I do think that Ray Delio's post, which I retweeted, uh, is interesting, which is this is definitely an intentional strategy to kill globalism and reshape the political order, the global order. Absolutely.
1:57:53
And so I think the implications of that will take months, years to play out.
1:57:59
I don't think you can, you know, look at the stock.
1:58:03
I think it's a fool's idea, you know, sort of a fool's crusade anyway to look at, you know, the hourly or daily uh trading on the stock market as a, you know, indication of the wisdom or folly of a particular policy.
1:58:15
just today alone we've been up down up down up like it's it's crazy to evaluate policy from that perspective.
1:58:25
So I do think that we will see this administration execute on challenging the CCP's threat posed to the United States and the democratic order on multiple fronts.
1:58:35
AI winning an in AI is ex existential on Fed and all and on their attempt to expand their influence in Taiwan and various other key supply chain moves.
1:58:48
I think the United States will be closer to the Monroe Doctrine if you want to go historical where expansion of the United States is a positive expansion influence but expansion of land mass.
1:58:59
I think the Panama Canal is a very serious agenda item.
1:59:03
uh Greenland is a very serious agenda item for this administration and we're going to continue to think that way for the first time since you know President Monroe.
1:59:11
At the same time uh if there is if the market continues to crash, maybe we even go into a recession for a couple quarters.
1:59:18
Uh you could see consumers tightening their belts, you could see investors tightening their belts.
1:59:23
Um, what advice are you giving to founders in your portfolio today about how to deal with m maybe it all works out like you're proposing but it could be a rough couple quarters.
1:59:33
What are you what are you advising folks? Well, it's uncertain.
1:59:36
So, I think the best way to approach from an entrepreneurial standpoint is uncertainty is you have to have scenario planning, probabilistic scenario planning like if if then I would do why.
1:59:45
However, I don't agree that we will go into a recession.
1:59:46
I don't think we should go into a recession.
1:59:49
And I don't think we should accept that as um a reasonable approach.
1:59:54
I think we need to cut interest rates, which I think there's going to be some movement on.
1:59:57
The evidence is that inflation has been solved by this administration already.
2:00:01
Um you know, you wait for the official government print of the CPI numbers, but there's better, more accurate metrics like call to inflation that show you in real time and we're down to like a 1. 28% inflation.
2:00:10
So we can clearly lower interest rates safely.
2:00:14
Um, as I mentioned, energy prices, oil prices, you know, continuing to crash and that's going to continue to happen as long as we explore alternative energy, but drill and proven reserves.
2:00:27
So, I think those are major inputs in allowing people to spend money.
2:00:30
Um there is a wealth effect and it is important to know you know that it's been studied pretty accurately that if if people's savings in you know 401ks and various other stock like instruments go down they may spend less and that's not necessarily good.
2:00:47
Now I don't think tariffs cause the spending less directly.
2:00:51
People talk about tariffs causing inflation.
2:00:52
First of all that's false like definitionally false.
2:00:56
Inflation is the rate of growth of prices.
2:00:59
tariffs are uh at most are a one-time price shock.
2:01:02
So, they can't cause inflation by definition.
2:01:04
Second, um I don't think anybody can easily model the impact.
2:01:09
First of all, some countries are clearly going to bring their uh tariffs on the US down.
2:01:12
Maybe not all 170 companies, but some are already rushing to the doors, you know, to negotiate better trade deals with the United States than we've had in 10, 20, 30, 40 years.
2:01:23
So the net effect of tariffs may not even be even may not even raise prices at all.
2:01:28
But even if it does, consumers are smart and savvy and they compare and contrast. They substitute goods.
2:01:33
So you know the price of of a good from let's say somewhere in Latin America goes up maybe the domestic equivalent Americans substitute for and that's actually a cheaper product.
2:01:43
So you have deflation if anything not inflation.
2:01:47
And then it's not even that obvious because yeah that's true of competitive like directly competitive.
2:01:53
Let's say you're buying coffee and you know coffee from Latin America gets tariffed and it goes up but you can buy like cheaper but let's say less quality coffee in the United States people substitute etc.
2:02:01
But maybe some people just decide to buy a substitute instead and like so all the people who are alleging that there's these studies absolutely do not know how the American consumer is going to substitute from Latin American expensive coffee to American domestic coffee to Celsius and at what rates.
2:02:18
And so that's why nobody really knows the net effect.
2:02:22
But I think if you even if you have I saw Bessins estimate that even these very high tariffs on on the CCP in China which are warranted probably add something like 70 basis points of cost across all goods from China over five years or something like that.
2:02:37
And I don't know exactly how we did the math and I don't have time to like rebuild the spreadsheet, but people definitely are overrating the impact that tariffs have because consumers vote with their feet.
2:02:48
And that's part of the point is they vote with their feet for products that are manufactured in America that are not subject to tariffs, whether they're American automobiles.
2:02:54
So, for example, some people are like, well, why would you, you know, care?
2:02:58
Um, apparently a Chevrolet um, like one of these uh, standard model Chevrolet like SUV things costs $170,000 in Norway.
2:03:08
Well, of course, no Norwegians are buying a Chevrolet Tahoe, it actually is. It at $170,000.
2:03:14
that whether they call it a bad or call it some other policy or something less, it's clearly it's clearly discriminating against American goods and causing Chevrolet to manufacture less than a fair and free market across the world would you know sort of naturally stabilize and where equilibrium would be.
2:03:36
So we need to address this but the most important thing is we need to achieve foreign policy objectives.
2:03:42
econom economic tools are better than military tools.
2:03:45
Secondly, we definitely need to crack down on fentanyl.
2:03:47
It's this, you know, unbelievable how many people die compared to like COVID or Vietnam.
2:03:53
And the American people, you know, have accepted politicians doing almost nothing about it.
2:03:57
And we need to stop that.
2:03:59
And then third is we need to set the platform for a century of prosperity and eventually this burden of debt which was exceeding the defense department budget and growing at 40% a year is completely unacceptable and was eventually going to crash us into at least a recession if not something severe you know significantly more severe.
2:04:23
to President Trump at least has the courage to address fundamental root causes of economic challenges that most American presidents have avoided confronting since the 1980s.
2:04:38
Um in Ray Dalio's uh post which he mentioned earlier uh he has a bunch of different points.
2:04:44
One of them he says is uh sort of part of this whole conversation which which is amazing changes in technology such as AI will be highly impactful to all aspects of life including the money debt economic order the political order and the international order.
2:04:58
Um there was also a post uh from a friend of ours Will Manitis the other day where he said worth figuring out what happens if LLM stagnate at 1 to 2x what we have today.
2:05:10
smart enough to slowly displace all low-skilled digital work and things like call centers.
2:05:14
Uh no loss for lawyers, doctors, bankers.
2:05:17
This is very good for the US uh and very bad for elsewhere.
2:05:22
I'm curious how you think about all of this, you know, sort of drama around tariffs with the backdrop, the sort of like looming, you know, AI steamroller like coming to uh transform the economy in many ways.
2:05:34
Well, it is going to transform the economy, but historically speaking, technology has unlocked new opportunities rather than completely suppressed the ability of humans to thrive.
2:05:46
So, for example, when I was growing up as a lawyer, actually, I had a secretary, literally had a secretary.
2:05:51
And the idea that an individual associate would have a secretary today makes no sense.
2:05:55
makes no sense. Yeah, but obviously once you know Microsoft innovated with actually Microsoft Word for lawyers actually that's what it was called there was it became less needs for secretaries but and my secretary was highly compensated at a law firm in New York
2:06:10
City in Washington DC 100 plus thousand dollar jobs the this whole workforce has migrated into other higher productive you know things to do and so it would be inconceivable for me to wake up and you know literally expect to have a secretary Um so I think that is the history of technology. I
2:06:26
I think AI will actually displace lawyers, accountants, investment bankers more rapidly than the middle and certainly faster than manufacturing.
2:06:41
I mean obviously it's a hyped area in venture now is robotic innovation, AI meets robots, whether software, hardware, the intersection of the two.
2:06:49
But if you've ever been in a light industrial warehouse, I I think that's years out.
2:06:53
Whereas replacing lawyers, you know, can be done much faster and much better, cheaper, less annoying.
2:07:00
Replacing doctors, um, you know, the node Kosa, you know, who runs Kosa Ventures wrote a paper, I believe in 2011 or 12 about how AI was going to replace doctors.
2:07:11
And, you know, I think that is much more realistic in the short term.
2:07:16
realistic in the short term. and they will give people access lower cost which will bring health care costs you know to roughly 22% of the GD GDP or somewhere like that now so if you bring down the cost of health care that also affects whether we have inflation the disposable income that a consumer has Obamacare has been a massive disaster the costs are up fivex on the average health care plan
2:07:38
than before Obama the American American people just don't have money to spend on disposable income on disposable discretionary purchases so even If tariffs raise things by 1%, if you bring down the cost of healthcare, the cost of energy, allow affordable doctors, you know, there's so many offsets that are much much better and much more fundamental and durable than worrying about a one-time tariff. Personally, I
2:07:59
Personally, I would go with a flat tariff of like roughly 10% and then extremely high tariffs on China. I think Dr.
2:08:06
Miller is more right than wrong, but I trust Treasury Secretary to calibrate this correctly.
2:08:15
uh how do you think about uh entrepreneurs coming to pitch today that that want to you know be a part of the sort of reshoring onshoring manufacturing there's fortunately a bunch of companies that have gotten started in the last few years that were
2:08:28
focused on manufacturing but I'm curious you know what the playbook sort of you're giving them how you think about the space and how you think of manufacturing broadly as a venture investable category if it is at all. Yeah, that's a it's a great question
2:08:42
Yeah, that's a it's a great question because you know venture is probably like 4% of the capital um that funds you know sort of startups and it's not appropriate for many many many great or good or great businesses.
2:08:53
Venture capital is designed for high risk high reward explosive opportunities and those are rare.
2:09:01
Manufacturing usually does not meet that standard.
2:09:05
It's really hard to scale manufacturing like a thousandx year to year.
2:09:09
year. And so I do think we need to look at alternative sources of capital for innovation in manufacturing and there will be some where venture is appropriate but just like there's only some financial services innovation where venture is appropriate there's only some
2:09:26
transportation opportunities there's only some in health actually like what fraction of health care you know dollar venture dollars going into healthcare is a fairly small fraction and so I don't think venture is the panacea I also
2:09:39
think to go back one question a bit is look when I I invest in seed rounds and series A rounds predominantly that's my sweet spot I'm taking an 8 to 12 maybe 15 year view to what tariffs do today should not be affecting the people
2:09:57
pitching me the people that my evaluation my criteria for something that's eight to 10 years in the future completely like ridiculous that said anytime there's massive uh sort of turmoil or flux in a system, it's a really great time for an entrepreneur. I
2:10:13
I I have a macro thesis that the more flux there is in any market or system, it's a really great time because inertia is not your friend.
2:10:22
Let's take take a step back as entrepreneurs, inertia is not your friend as a founder.
2:10:26
You have to invert inertia and create momentum in a physics sense.
2:10:30
And so when the world is kind of moving around, it's the best time to start a company.
2:10:34
So I think now is a wonderful opportunity for everybody who's stuck at some large company, not being challenged, you know, etc.
2:10:41
to look at starting new companies and be innovative because the world is in flux in all the dimensions that Dallio outlined so well. Yeah.
2:10:50
Can you talk a little bit about deregulation?
2:10:52
You said you're uh optimistic there uh on the White House's website.
2:10:56
They're kind of claiming that they're not going to create new agencies and um there's the one in 10 out regulatory budget, but we haven't heard very many concrete details of what that could look like.
2:11:08
What are you optimistic about on the deregulation side?
2:11:11
What's the top Well, so I think that standard of, you know, for every new one you have to eliminate 10 sounds great kind of reset the equilibrium.
2:11:18
We've been overregulated.
2:11:20
I think it's it's you know cabinet secretary and agency specific and you know only recently have we seen the staffing of these agencies you know get confirmed by the Senate.
2:11:31
You have to remember the administration starts on January 20th.
2:11:34
The cabinet gets confirmed typically pretty quickly call it a couple weeks but then they have deputies secretaries under secretaries.
2:11:41
These are the people that are the political appointees that drive the administration's agenda.
2:11:46
Most of the departments do not have even half of their political appointees confirmed by the US Senate.
2:11:51
So you're asking the secretary, let's imagine like the secretary of state who's got to, you know, work on the Panama Canal, help negotiate various economic things, solve wars globally, blah blah blah blah blah, and doesn't have his full staff.
2:12:07
or the you know the left is assaulting the administration every day in in all these district courts and this kind of absurd district court litigation.
2:12:16
Well, it's it's really unfair to the attorney general when she doesn't have her team confirmed.
2:12:23
Last I looked and hopefully this has changed or will change imminently.
2:12:26
The solicitor general of the United States, the principal like appellet lawyer who's supposed to quarterback all this strategy has not been confirmed by the Senate.
2:12:34
been confirmed by the Senate. So people are taking advantage of vacuums in the presidential staffing and I think this is you know an artifact of history when the world moves more slowly maybe new presidents acted more you know cautiously perhaps but slowly and so
2:12:51
there was more time for an administration to get staff but with an agenda where Trump's running a like sort of a no no huddle playbook you know he's like boom boom boom boom next the nicest way to describe it Yeah, and it's intentional that hey, there's a hell lot of problems, a lot of things to fix. He's had four years to,
2:13:08
He's had four years to, you know, contemplate what to do.
2:13:10
But secondly, just like the no huddle offense leaves defenses, you know, kind of befuddled.
2:13:16
Is it intentional to keep the Democrats in the left, you know, not able to keep up?
2:13:21
And that's what's happened.
2:13:22
Legacy media can't keep up.
2:13:23
Like, what's the latest thing to complain about? Oops.
2:13:24
The news changed yesterday. Sorry.
2:13:26
Okay, we're on to our next EO.
2:13:28
Um, but in any event, you need a more modern confirmation process, I suspect, to allow an administration take office with their core team that can execute.
2:13:38
Otherwise, you're going to see things mistakes made, things broken.
2:13:42
It's it's just not it's not reasonable to ask an administration to fix everything with onetenth their team or one-third their team.
2:13:50
And so, we're have to really revisit this.
2:13:52
And this this should be bipartisan because there will be a Democrat president and they're going to want to appoint he or she's going to want to appoint his or her nominees and the Senate's going to have to act with fast to allow that president to exe and if anything the velocity in the world with a free form of information things like X is going to accelerate not decelerate. Yeah.
2:14:11
Uh one last question for me and then I'll hand it over to John.
2:14:16
Hopefully this one's quick.
2:14:17
Uh do you think we should be taking more decisive action against uh Uni, Robotics, uh DJI, you know, groups like that in terms of just blanket bans?
2:14:29
Like tariffs are a good start, but potentially not significant enough. Yeah. So, absolutely.
2:14:34
I mean, we talked about this before, but Tik Tok is a threat.
2:14:39
I think DJI is even worse probably.
2:14:42
And then advanced robots manufacturer in China uh are probably an order of magnitude more threat.
2:14:48
And these things could run 17 miles an hour.
2:14:52
They have military applications.
2:14:52
Um you know there's a a tweet I posted yesterday that retweeted some of the spire that's already embedded in the Chinese for context.
2:15:00
Uh they discovered a remote access backdoor and the robot dog from Unree. Yeah.
2:15:08
So I I you know I think we take this very seriously.
2:15:11
I hope the administration and the legislative branch act on this very quickly.
2:15:14
I think there is a lot of attention being paid to this.
2:15:18
So, I think there'll be some traction here, but absolutely we need to be very we need to take this stuff very seriously. Yeah.
2:15:25
I want to let you go, but I want to give you a chance to respond to this Derek Thompson post.
2:15:28
He was asking, "How do you know if your plan to shock the system is failing?
2:15:32
One of the confusing aspects of the tariff defense is the idea that every event justifies the strategy. stock market goes down.
2:15:41
Oh, we're just taking our medicine. Stock market goes up.
2:15:42
It's so it's so obvious it's working.
2:15:44
Uh have you had a chance to think more about his uh his critique?
2:15:48
Yeah, as I said, it's a very good question because I think anytime you have a new strategy, whether you're in a startup or in politics, you want to have directional feedback, you know, is your nose, you know, nose plane going up or down and stuff like that force.
2:16:01
So, I think on the fentanyl stuff, it's pretty easy.
2:16:03
stuff, it's pretty easy. um we need less fentanyl debts which is less fentanyl being imported to the United States blah blah blah blah on the economic front I think definitely the yield the various yields on our debt are pretty critical it does seem like that best managing towards that I think we need the
2:16:21
inflation we need inflation to stay lower and be slightly lower so that interest rates can come down which accelerates growth and makes homes more affordable which is absolutely critical so I think those are easy relatively short-term metrics to look at whether this whole reinventing the global order is working or not is going to take time. Pretty your point about Ben Thompson's
2:16:40
Pretty your point about Ben Thompson's post about Nixon that is not going to be measurable, you know, overnight and maybe not even this year.
2:16:46
I think we'll have visibility into it by the midterms.
2:16:51
Um, you know, when Thatcher and Reagan, the closest metaphors that I think about is both Thatcher and Reagan inherited economic basket cases and geopolitical basket cases in many ways.
2:17:00
And it took both of them a year or two of pain, but then everything was up into the right.
2:17:08
And you know, Morning in America in the famous Reagan re-election, Thatcher went through a very tough one or two years when, you know, she mentioned this lady's not returning is because she was actually cutting some spending, allowing for the the, you know, getting out of stlflation, rebuilding the military in the UK, etc.
2:17:26
But I think two years is a pretty realistic time horizon. That's great.
2:17:31
Uh, well, we'll let you go.
2:17:33
We know you got to get out of here.
2:17:34
Uh, but thanks so much for stopping by. Always a pleasure. Great time. Always a pleasure. Thanks. God soon. Cheers.
2:17:37
And, uh, our next guest is coming in in two minutes, but we got to talk about numero sales tax on autopilot.
2:17:44
Spend less than five minutes per month on sales tax compliance. Gong.
2:17:51
Uh, numeral puts sales tax on autopilot for leading e-commerce and SAS companies.
2:17:56
It is the platform for sales tax compliance. We have a 4. 8 on G2 cloud.
2:18:02
That's the review service. That's Yelp for SAS.
2:18:04
You know, we love Yelp for it again.
2:18:07
Uh they're backed by Y Combinator Benchmark. Go check them out.
2:18:10
Benchmark Series e-commerce. I mean, now is the time.
2:18:14
You're going to have to be figuring out tariffs.
2:18:15
You're going to You don't want to be slipping on your sales tax. Head over to Numeral HQ.
2:18:19
Uh and I also want to review quickly, how'd you sleep last night?
2:18:25
Because we are sponsored by eight, baby. Eightlee. Go to eight. com. I had a It felt rough. Yep. Still got an 88.
2:18:38
White Lotus threw me off a little bit.
2:18:38
I got to bed a little bit later. I got an 86.
2:18:40
I only slept for 6 hours and 34. It was a long episode.
2:18:43
It was I was planned my sleep around it being like 50 60 minutes by and then I Yeah.
2:18:50
Halfway through I pause it and it's like or I thought we were halfway through and it was like 54 minutes left. I was like great.
2:18:57
I I was rushing to be like I I need to start this at 8:30 or else I can't get to bed by 10.
2:19:02
You know what I had no difficulty waking up this morning in part because of autopilot was adjusting the temperature throughout the night. Yeah.
2:19:10
In part because you know it's also been hot.
2:19:12
We also some information Jordy was repping 225 today. Baby leaked here. We're going to leak it. There was leaks.
2:19:19
Don't put out a press release. Don't share that. Don't share that. Leak it out there.
2:19:22
It was uh It's Monday, which is National Chess Day push day.
2:19:28
We also we also got a little son yesterday. We did.
2:19:31
We were hanging out with Justin Mars and and I honestly was Yeah.
2:19:35
We had an inerson guest for our off pod pod. Yeah. Yeah. Yeah. You get us together.
2:19:40
It's We got Bryce in the waiting room. Bryce, how you doing?
2:19:44
Wow, look at this background, brethren. I'm doing great. How are you all? We're great.
2:19:48
Um I mean things are good.
2:19:48
Was Jordy stunting on his reps?
2:19:52
How many Did we talk about how many reps he did or was it just Well, we haven't leaked that. We haven't leaked. Yeah.
2:19:57
You just want to get the story going in the press.
2:20:00
Hey, hey, the company's for sale.
2:20:03
Probably in the billions.
2:20:03
We're not going to tell you exactly. Exactly.
2:20:04
X X is a a flutter about this these reps.
2:20:10
They're they're pining to know. Yeah. Yeah.
2:20:12
We know you respect the Church of Iron. We've seen many photos. So, welcome to the show. You fit right in. Uh, wait.
2:20:19
Uh, you're traveling now. Is that right? I am.
2:20:21
Yeah, I'm on the road right now in Oakland, California right now, about to head over the Oakland Bay Bridge. Very cool. Wow.
2:20:26
Dreams on the belly into the belly of the beast. Belly of the beast.
2:20:31
Uh, what what uh what brings you to San Francisco? Meeting founders. Meeting founders.
2:20:35
We're recording some stuff and um I'm trying to get here more consistently.
2:20:42
I live in Utah and it's just a quick trip.
2:20:44
There's enough going on here that I've recently decided it's going to be kind of a weekly adventure out here to San Francisco. Nice.
2:20:52
So, I'm gonna try to try to keep that pace up for a bit. Wait, weekly? Weekly?
2:20:55
That's I did that for the first five years of starting OTV back in '05.
2:21:01
I commuted here uh once a week for 5 years.
2:21:04
I think if you're going to San Francisco, you shouldn't go weekly. You should go strongly.
2:21:07
But I general the general that's a great point.
2:21:13
But when you're in doing business, you want to be there strongly, not weekly. Wait, so so weekly?
2:21:16
I'm just I'm just curious.
2:21:18
Uh not to get too into your personal life, you just get an apartment and like because you're there so much or are you a hotel guy or a wander guy? Hotel guy. Hotel can't do Airbnbs.
2:21:30
Can't do uh can't you Well, you got to try Wander. Wander. com. Code TBPN.
2:21:37
That was an incredible setup. Yeah. Yeah. I mean you set you up.
2:21:39
I I I think we'll change it too.
2:21:42
We'll have you back on and you'll we don't do we don't do we don't do your Airbnbs either, but um we do but Wander Yeah.
2:21:47
No, that that that's cool.
2:21:50
I'm going to have to look into this.
2:21:51
What was the What was the code again? VPN easy to remember.
2:21:53
Um yeah, you can find a happy place.
2:21:56
You can book up Wander with inspiring views, hotel, great amenities, dreamy beds, top tier cleaning, and 24/7 concier service.
2:22:03
Basically, Bryce, it's a vacation home but better. So, yeah, check it out. Wonderful.
2:22:06
Would it be possible to get one with an eight sleep in? Oh, absolutely.
2:22:10
We can figure our people will talk to your people.
2:22:12
Anyway, we wanted to have you on talk about uh it feels like uh indie is an you know traditional venture firm but built for good times and bad times uh and scary times and fearful times.
2:22:28
And right now there's been there's been a lot of fear in the market.
2:22:31
you came out and um are you being greedy while others are fearful?
2:22:36
It's possible to be greedy but pragmatic.
2:22:38
I think that that what that's what we actually wanted to talk about.
2:22:42
Advice for entrepreneurs, founders in the midst of market turmoil.
2:22:44
Maybe it doesn't affect their business today, but they're seeing bad news and that's going to put a you know, you know, their customers are going to be worried, their employees are going to be worried, their potential investors are going to be worried.
2:22:56
Uh what advice are you giving to founders these days?
2:22:58
Well, you know, like like Jordy touched on, I mean, part of our whole thesis is traditional venture, same type of upside, but a different approach to building your business.
2:23:09
So, you know, the approach most people take today, you know, they go and raise their seed round, their preede round, their whatever it is, and then the objective of that round is to get to the next and the next and the next.
2:23:20
And so, you're oftent times kind of anchoring on what that next fundable milestone might be.
2:23:25
And he takes a bit of a different approach.
2:23:27
So our companies are kind of the default we set is like let's have that be the last round you need to raise and then you can kind of be a lot more offensive as you build your company so you don't necessarily need anybody else's permission to exist.
2:23:40
So, with that being the case, I think there's kind of two, you know, I I tweeted this out last night.
2:23:47
We talked about a little bit.
2:23:47
You know, there's kind of a few approaches to take with an indie company specifically.
2:23:53
You're, you know, you have, in many cases, you have infinite runway and so you get to operate and you can message in a very different way.
2:23:59
So, part of what I said is hunker down, you know, conserve cash.
2:24:04
Um, I don't think this environment goes away anytime soon.
2:24:10
Um, and so I think people need to be preparing um for, you know, to be long-term focused and what that often means is um, you know, getting getting the house in order because right now we've been playing the lottery and it's time to play, you know, it's time to play chess.
2:24:30
I think that's to me that's a really important distinction.
2:24:32
And so much of how we've conditioned entrepreneurs is to kind of play for these lottery tickets.
2:24:37
So it's all about fundraisers to get it in the next round.
2:24:39
We're trying to kind of work with people to play chess through this because I think the game has fundamentally changed.
2:24:44
As you know, I I I'm been in venture for a long time now.
2:24:49
I came in in 2001, so immediately after the dot crash.
2:24:51
So I've kind of lived through the dot.
2:24:53
I've lived through the financial crisis.
2:24:57
We've lived through Zerp.
2:24:57
This one, you know, echoes the same, but there's some very fundamentally different dynamics going on here that are going to influence the amount of capital that's available to entrepreneurs over the next few funding cycles. Mhm.
2:25:08
In some ways, we were talking about this earlier with Logan, uh, Bartlett, but one one thing I've been maybe paying attention to is is the categories that felt overheated, AI, defense, tech, robotics, in many ways like the the sort of tariffs would just encourage like, you know, more investment.
2:25:32
And I imagine, you know, we had like Chris Powers on last week and and he's been, you know, banging the the reshoring drum.
2:25:40
Um, but yeah, I guess like do do you think that do you think that over the next like couple months we'll see like a pretty big slowdown in investment activity or just like refocusing?
2:25:54
Um, or are you just less interested in like predicting investment volume and and more so just in any whatever the future holds just like run a tight ship?
2:26:04
I you know I I think I think I'm always the fan of running a tight ship.
2:26:07
You know I feel a bit like you know it's Groundhog's Day today.
2:26:10
You know I'm waiting for Sequoia to drop their memo.
2:26:13
That would be the third time.
2:26:16
and and you know it it does feel like we learn the lesson and then we kind of go right back to the same behavior that got us in the problem in the first place not kind of globally but I think specifically to um the startup ecosystem
2:26:29
specifically you know we came through Zerp everybody wanted to get really tight and then the money started flowing again and basically kind of people shifted to the you know the current narrative whether that is defense tech or AI or one of these things. Um I think
2:26:40
Um I think what fundamentally changes this time is you you saw last week CLA pul quietly pulled their IPO on Friday.
2:26:48
You know this what you would call the denominator effect in venture like that name gets thrown around a bit.
2:26:57
So I'm happy to explain it if someone hasn't already hit it today.
2:27:00
But I think that denominator effect is probably more pronounced than I've ever seen it in my venture career.
2:27:08
And that's going to cause the longer term liquidity issues.
2:27:10
you're talking about Jordy in terms of kind of how what the funding cycles look like over the next call it year or two. Yeah. Yeah.
2:27:20
Can you unpack the denominator effect a little bit more?
2:27:22
I mean the denominator effect is is basically that um traditional institutional LPS have allocated a tremendous amount of money to the venture and private equity asset class.
2:27:32
So the topline number isn't the you know that the returns that are coming back from those investments don't come anywhere near to the size of allocations they've already made.
2:27:42
So another way to frame that is LPs are out way over their skis on venture and private equity and there's no there there's no relief coming in terms of returns.
2:27:53
So Clara pulls their IPO.
2:27:53
You know you've got this kind of regulatory uncertainty.
2:27:57
There were a bunch of people cashing Figma checks a few years ago.
2:28:01
um that never materialized.
2:28:01
And so you've got this real issue now that I think is really acute and I think it's already even starting to show up.
2:28:09
Like if you look at that $40 billion Open AI deal that that Masa just did, right?
2:28:13
How much of that is actual cash?
2:28:16
How much of that is credits?
2:28:18
How much of that is debt that he's going to have to go out to find and service?
2:28:21
Like the financial market, the financial picture in startups, I think, is a lot more murky than I've ever seen it before.
2:28:28
And so counting on either support from your existing investors or a next round materializing over the next 18 months if you aren't just like absolutely crushing it and putting up insane numbers like I'm sure most of your audience does.
2:28:43
But in that case, unless you're just such an obvious pick, the sidelines are going to be filled with people cheering for you. Can you talk?
2:28:52
I I I was honestly seeing that the tariffs, the trade war, and you know, if if rates come down, that kind of saving MASA in the sense that pulling together $40 billion by Q1 of next year, which I think is a target.
2:29:07
A lot of it's coming from debt.
2:29:08
He can obviously secure it against, you know, ARM and whatever else he's doing.
2:29:13
But still, it's a lot easier if rates drop.
2:29:15
There's a trade war happening.
2:29:17
And it's like, where do you put your money if if if you want to try to generate any type of return?
2:29:24
But but who knows what were you going to say?
2:29:25
Uh I I was going to ask for a little deep dive on some of the buzzwords in the founder world specifically the difference between boot scaling in indie.
2:29:34
You had a post about this but I liked uh unoorn. Yeah. Yeah. Yeah.
2:29:40
I want to know more about Yeah. Yeah.
2:29:42
There's a lot of there's a lot of phrases out there and I think that you know obviously there's a little bit of hype around these oh what does founder mode really mean or whatever but they are useful tools and I'm a big fan of agree the mimemetics of it are great. Yeah.
2:29:56
So so no I mean I I would say you know you you touched on a few I mean Jordy jokingly kind of um amplified one from this morning.
2:30:04
Somebody sent me an article they were writing that included India and they called companies who raise one round of funding. Yeah.
2:30:09
with the intent that they're going to get profitable and scale from there as an uno corn.
2:30:15
So, you know, only one round.
2:30:18
So, people getting very creative.
2:30:18
Yeah, Zapier is a good example of Uno.
2:30:21
Zapier is a great example of that.
2:30:23
Um, you know, Kalan Lee until they did their growth round was was a great example of that there.
2:30:29
You know, I think this is a small but growing cohort of companies that are kind of working towards that as an objective.
2:30:36
Not necessarily to um kind of prove a point, more to kind of control their own destiny and to not be so at the whims of these financial markets that are they're whipping so intensely and also you know kind of putting putting their customers before their investors needs.
2:30:55
their investors needs. I think this is this is kind of a growing you know what we see is a really growing trend in terms of you know there's there's kind of a this massive wave of returning founders who had built through financial crisis or built through Zer who've kind
2:31:09
of lived through this kind of treadmill of an experience as an entrepreneur who are looking for a different way to do it and we hope we can be their partner but I think you hit on a few of those other terms right of boots scaling you know the idea with that one is bootstrap for a little bit and then raise money to scale later on. So, kind of merging
2:31:25
So, kind of merging those two ideas.
2:31:28
The other one I think was um seed strapping, right?
2:31:30
So, again, that idea of lot of port mantoes, a lot of port mantoes on this.
2:31:37
Look, hey, you know, I no no judgment, but tech hasn't exactly killed it on the marketing front of some of the stuff.
2:31:43
Um but yeah, the idea with seed scale is like raise one round and then scale it, you know, as much as you want.
2:31:51
you know, as much as you want. um on the back of yeah I think the twe the tweet you mentioned was like yeah I basically was framing those two really as like fundraising tactics you know that that's that's still fundraising is still core to that idea and I think with India you know what what we like to embody is this
2:32:10
idea of independence of this idea of kind of controlling your own destiny of building things that don't have to ask permission to exist and I think as we get to you know this kind of inflection point in tech whether it's in the financial markets are in this kind of new and evolving technologies coming, you know, um we want lots of possible futures. We
2:32:27
We don't just want the one that's blessed by A16Z.
2:32:32
We don't just want the one that's blessed by Sequoia.
2:32:34
We want we want futures that could be um possible with or without their participation or with their blessing.
2:32:41
So, I I think the world gets a lot less interesting once you start having to ask for permission to exist. Yeah.
2:32:47
Uh are you are you bullish on the app layer?
2:32:50
I imagine if you want to scale efficiently right now and build an AI, you're not getting into the foundation model.
2:32:58
Well, I mean, uh, SSI is technically a unicorn. One round. Yeah. One round. That's right. Exactly.
2:33:08
Most of the most foundation model companies actually straight to unicorn. One round. Yeah. One round. That's it.
2:33:14
They didn't have to raise a ton of rounds to get to a billion dollar valuation. Yeah.
2:33:16
But you're you're going to be an SF.
2:33:18
You're gonna be an S SF later.
2:33:21
Like what what are you looking for?
2:33:23
That feels like the place to build an indie company is in the rapper layer that's overlooked by VCs.
2:33:29
Maybe it's not power law company, but you can build a fantastic business delivering amazing stuff.
2:33:32
I'm super bullish on it, but I want to know what you think.
2:33:35
No, super bullish on it, too.
2:33:36
In fact, I think you have Rahul coming on after me.
2:33:38
And we we've had this kind of ongoing multi-, you know, multimonth, multi-year conversation going around kind of high status and low status startups. Yeah. Yeah. And the Yeah.
2:33:47
the kind of high status have to raise a ton of money or at least look like you have to to kind of position like you're really really innovating.
2:33:55
I think those are so they're such a head fake here in the Bay Area specifically because the kind of social strata is so funny.
2:34:03
I think John, you hit on it.
2:34:05
Like I think that that app layer is where so many incredible breakout indie companies can be built because you're now talking about, you know, swapping out any of those models and you get a benefit from all those improvements and just focus on a customer and their needs and the opportunity of a market.
2:34:22
I I think it's I think it's a huge opportunity that doesn't feel at all like you have the same kind of network effect lockins that you had with like Facebook back in the day or when Twitter turned off your API access.
2:34:35
I think so many of these models are like hyper competitive in terms of what their performance and output actually looks like that you can build incredible experiences off of those that can swap pretty easily between them.
2:34:46
You know, I would think of them more like moving from, you know, Google Cloud to AWS, right?
2:34:53
That feels like more the analogy than like a, you know, the dependency of of Facebook and their platform. Yeah.
2:34:59
Yeah, that makes a ton of sense.
2:35:01
Uh, you got a last question or we're No, this was great.
2:35:03
I want to ask you how you're, you know, the all offline how you're trading the tariffs in terms of like, you know, uh, Japanese fashion and, you know, sort of collectibles, which I'm sure you're I'm sure you're making.
2:35:15
I knew I knew I knew the fit check was coming at some point. Fit check. Fit check. This is great.
2:35:23
Always a pleasure, Bryce. Have fun.
2:35:23
Have fun over uh across the bay. Enjoy.
2:35:29
Looking forward to the next one. Yeah.
2:35:30
Yeah, we'll have you back on soon. Thanks so much. Cheers. Appreciate it. Take care, guys. Bye.
2:35:33
Uh well, next up we have Rahul Sonwalker coming on to talk about Julius.
2:35:38
uh he has a bunch of interesting traction on his startup and uh did just did a podcast with Bryce actually.
2:35:45
Um but uh we'll we'll talk to him about rappers and high status and low status uh startups and all everything in between as soon as he joins. I'm excited.
2:35:55
Um in the meantime, if you're looking for something to do while we're waiting for our next guest, why don't you just go sign up for RAMP? Time is money. Save both.
2:36:04
Easy to use corporate cards, bill payment, accounting.
2:36:09
This is the economy that ramp was built for. It really was.
2:36:11
You know, um during the uh during the the major sell-off posts SVB crisis, like one of my hacks, actually, this is going to sound like a crazy ramp ad, but uh one of my hacks was just cancel all the credit cards in the company and then just reset.
2:36:25
And you reissue someone a credit card and then you have some like marketing person who's like, "Yeah, you know what?
2:36:30
I was signed up for like three SAS products that I didn't need and I'm just going to renew the one that I'm using."
2:36:36
And when you do that, like now there's like credit card updater that can kind of like get you on anyway.
2:36:42
But for the most part, it's just like resetting and it allows you to cut your burn a little bit.
2:36:48
Uh but you don't need to do that with ramp because you have full vis visibility in this stuff.
2:36:51
And if you're actually save money, this is um this is the best this is the best product for it.
2:36:56
This is uh yet for my personal uh card needs, the thing I find most frustrating with credit cards is cancelling an MX card and then seeing the same I have a VPN that's been charging me for years.
2:37:08
Um I've I've had I I've I've called support to try to get them to remove it.
2:37:15
Uh we got Rahul in the studio. Welcome to the show. How you doing?
2:37:19
Thanks for having me, guys.
2:37:19
I appreciate Oh, he's got the suit. The suit.
2:37:23
Thank you for dressing up.
2:37:23
It's so good to see you, man. It's been way too long.
2:37:27
It's I I think it's been like almost two years since we got dinner, but uh thank you so much.
2:37:30
Understood the assignment.
2:37:32
Yeah, understood the assignment.
2:37:33
Uh just quick introduction on you, the company, what you're building. Sounds good.
2:37:36
I'm Rahul, founder of Julius.
2:37:38
We're building an AI data analyst.
2:37:40
So, if you have data on your hands, whether you work in roles like finance, marketing, operations, product, you need to analyze that data, AI can help you with that.
2:37:47
And Julius is the tool for that. Very cool.
2:37:49
Uh dude, I'm just going to start.
2:37:52
You have 2 million users.
2:37:56
How do I How'd that happen? Yeah. What's the secret? Yeah.
2:37:58
A lot of it is word of mouth.
2:38:01
Um and some of it is SEO.
2:38:01
So if you look up AI data analysis, Julius is the first result on the internet um on all search engines.
2:38:08
Basically, turns out like analysis is a fundamental part of many jobs and people just kind of assume that it's a solve problem.
2:38:14
Turns out most people don't know how to analyze data.
2:38:18
Um and and Julius helps them with that.
2:38:21
So, I think we kind of found that that need um and used AI to solve that problem for people. That's insane.
2:38:26
Um where uh where should we even start with this?
2:38:31
Uh I mean, I want to talk about just like the culture of uh of this this whole meme of like a rapper.
2:38:36
I think it's really I' I've said this on the show a bunch, but I think it's kind of like a sigh out from VCs to like not like for so long it was like, oh, like you're just going to get steamrolled steamrololled.
2:38:45
Like it's not it's not a viable place to build a monopoly business, a trillion dollar company.
2:38:48
and that's all you should be focused on. Go for broke.
2:38:52
Now we're seeing, oh, the value actually occurs at the application layer.
2:38:56
Oh, maybe there are tools that need to be used.
2:38:57
Um, but at the same time, like if somebody said, oh, well, like GPT7 might be able to do the same thing as Julius.
2:39:03
Like I might hear them out on that argument.
2:39:05
So, how do you process it?
2:39:07
And can you take me through your thesis on just companies that leverage foundation models instead of train them themselves? Absolutely.
2:39:13
By the way, shout out to Sam Hoffman for for that steamroll sound.
2:39:17
think it really stuck a chord with the VCs.
2:39:19
But um look, turns out like you know every business out there in the world is solving problems for people, right?
2:39:28
And as long as you're building something that solves a problem for people, like that's all that matters.
2:39:33
Your users aren't paying for a model, what they're paying for is this tool solving a problem for them.
2:39:39
If you can do that faster, easier, cheaper, that's all that matters to your users.
2:39:43
Um now uh in terms of like models and like where does value occurr early stage founders just get too caught up into that meta level thinking instead of just building something like just go build something talk to people um see if you can sell to one user can you sell to 100 users and then worry about these other things.
2:40:02
Um what how the way it has played out is when we started people told us you're a rapper um and we would try to like fight that label um and then over time we just learn to embrace it.
2:40:15
Um turns out like these models they keep getting better.
2:40:19
There's multiple model labs AI labs that are producing really good models and what that means is the differentiation is actually in the product layer.
2:40:25
Can you create a differentiated product and an experience and a whole infrastructure to power that?
2:40:30
Um now um is is that how it's going to play out forever? Depends.
2:40:38
Turns out like your your product needs to have enough of a unique value proposition so that it matters outside of the models themselves.
2:40:48
Like for example, we have this infrastructure code execution.
2:40:51
Every 24 hours, by the way, every 24 hours, Julius writes and executes over two million lines of code. Mh.
2:40:56
Um, and to serve that to our users.
2:40:58
Um, we serve like over a million Jupyter notebooks.
2:41:03
Most of our users don't even know what a Jupyter notebook is, right?
2:41:04
You're a VP of marketing at a at a big company.
2:41:06
You don't know all that technical details.
2:41:10
All you care about is analyzing your data.
2:41:11
And then how do we build that infrastructure to power that is really important.
2:41:14
Uh, and because we have built that models getting better actually helps us build a better smarter product.
2:41:23
Uh, with all the infer and all the UI and the the interface that we have built. Yeah.
2:41:26
Uh how do you uh how do you think about companies in the space doing anything related to AI data analysis?
2:41:36
There's companies, you know, coming out uh some of them very vertical where it's like this is just for investment bankers. Yeah. Yeah. Stuff like that.
2:41:43
But but the the thing that comes up for me is like you clearly have chased hype from users versus hype from VCs, right?
2:41:51
because some of these companies that have come come out um they maybe have like as the same amount of users as they have raised millions of dollars, right?
2:41:59
So it's like you you know other other companies in the space like with like 300 users maybe at some cool firms or whatever, you know, raising hundreds of millions of dollars.
2:42:07
millions of dollars. But I'm I'm curious even understanding like adoption at how your tool gets adopted at at you know big companies that might have some crazy procurement process but then you just have like they're just sign going over to Julius and being like yeah actually
2:42:22
like almost positioning the work that you're doing in Julius as kind of their own and they're just like pasting in a screenshot to some slide deck or yeah I'm curious how you think about adoption and and maybe like have you intentionally avoided hype throughout this entire process. Um because like
2:42:37
Um because like clearly I would say like Yeah. Yeah.
2:42:44
Anyways, just just take it from there. Absolutely.
2:42:46
So um I think you're spot on.
2:42:48
You know that's how users discover Julius.
2:42:50
You know they're looking for they're working a job.
2:42:51
They need help in the moment to analyze data.
2:42:54
They're looking something up on the internet and they come across Julius.
2:42:57
Um and once they start using it slowly what happens is they're able to first of all bypass all the procurement process and just get the value right away but then analysis and insights are inherently sharable.
2:43:10
So they start bringing their teammates you know onto Julius especially if it's a manager or an executive that discovers Julius they bring the whole team with them.
2:43:20
Um this is an early shout out but we're we're about to launch real time collaboration in Julius.
2:43:24
So you can collaborate on analysis with your teammates in in the product.
2:43:27
Um and and that's going to be huge uh for collaboration in general.
2:43:32
How do you how do you think about data analysis?
2:43:34
do you think about data analysis? you you guys are the AI data analysis company but how many of your decisions are based on vibes vibes a lot of the so the for the channels that are established for example SEO growth all that we use Julius pretty heavily and it's also very datadriven
2:43:54
for a lot of the exploration and that's where we bring in a lot of qualitative data like talking to five users that are superpower users and observing how they're using the product what would they need um and how do simp create a simple version of what they need so that many more users can actually access it. I have a couple
2:44:09
I have a couple questions on the actual platform.
2:44:11
Uh what models are working the best for you and what languages are most popular?
2:44:17
I know that Python's obviously super popular but then a lot of data analysis use R and Julia even which is kind of a funny name.
2:44:27
Uh yeah, are you kind of language independent and then you just service the results and then how much are you swapping models under based on like what's hot on Twitter today or X because you hear about a new model every day but then you know is it actually worth switching? Yeah, great question.
2:44:44
So for the models, you know, it this changes quite often, but you know, if you're watching this a month from now, it might be a different answer, but you know, usually it's just OpenAI and Enthropic doing a lot of the heavy lifting on the model front.
2:44:56
Uh both both labs have really good models.
2:44:59
Uh we do work with other model providers as well in different parts of the stack.
2:45:03
Uh but usually it's OpenAI and Enthropic doing just a killer job there.
2:45:07
Um, in terms of languages, turns out like a lot of users don't know what Python is.
2:45:13
You know, for them it's just like something that the AI is doing to do the analysis for them and they like seeing that, but whether they understand it is is like not that common among our users.
2:45:25
Python is pretty popular as a default because it's just so versatile, right?
2:45:29
It's it's like the most popular language on GitHub.
2:45:31
It's got the biggest ecosystem of modules and all that.
2:45:34
So, it gives you a lot out of out of the box.
2:45:36
Um there's there's also um R that we support and we might add support for SQL at some point in time. Sure, makes sense.
2:45:45
Do you think the power of giving anyone uh in the world access to this sort of complex analysis is under just like priced in yet?
2:45:55
Like because to me because to me I think about okay every Shopify store owner can now get the power of like this sort of like worldclass CFO for basically nothing right they have their Julius subscription but it's not super consequential that to me doesn't feel priced in because you can enable millions of businesses to run more efficiently and but I'm curious what you think.
2:46:17
I think the market hasn't priced this in yet.
2:46:19
In fact, the cost of getting an insight from the d from your data has gone down 99% in the last two years.
2:46:27
And I think most businesses, whether small or big, haven't really like realized that value yet.
2:46:31
You know, if you're a big company, you have to realize that every marketer on your team can now go do really deep marketing analysis, channel analysis within seconds using good product like Julius.
2:46:44
Every finance person on your team can get financial insights within seconds or minutes using Julius.
2:46:48
And these businesses when we talk to them um most of them haven't priced this in yet.
2:46:54
Um so I think we're going to see like a big reckoning in the next few years.
2:46:58
How do you uh advise your team around hiring and how do you think about hiring when you know how powerful these tools are and uh you know I'm assuming you really push people to say like you know do we need to make this higher or you know I'm I'm uh curious what you think hiring internally at Julius or just at his companies? No, no, no.
2:47:20
Just internally at Julius, like you know, today the Shopify CEO came out and with a leaked memo where he was saying like, "Hey, we're we need to be AI native.
2:47:29
You need to question every single hiring decision uh that that you want to make uh and compare it to just like getting that same service or value from models, but it's different at a high growth startup potentially."
2:47:43
I think you guys had Keith on earlier today, right? Yeah.
2:47:45
He has this like memo about barrel and ammo.
2:47:47
Like you you don't want to hire people that are ammo.
2:47:52
You want to hire people that are barrels.
2:47:53
Like I think what he's looking what he's basically hinting at is you want to find people that are multipliers.
2:47:57
And so we look for people that are multipliers.
2:48:00
You give them resources and they find a way to 10x the value creation out of that out of those resources.
2:48:06
And AI is a resource, right?
2:48:09
a a really competent barrel uh employee, a really competent multiplier employee can take all the power of AI and just make a lot more happen in a shorter amount of time.
2:48:19
And I think that's what we care about when we recruit at Julius.
2:48:23
So whether it's engineering like what is their learning rate not not how much how much like hard skills they have in a particular area all of that matters a lot too but it's do they have this like massive learning rate where they can just pick up new things really fast and get really good at it and ship things um for marketing similar things like you
2:48:41
know you may have experience with one particular thing but the game is changing all the time you have to learn how your users are talking you have to learn where your users are can they learn all that quickly is what we care about and with AI it's just the people that are multipliers are going to get so much more productive and get so much more done. Um, and that's that that's
2:48:56
Um, and that's that that's how our hiring philosophy works today, too.
2:49:00
I have one last question, we'll let you go.
2:49:02
Um, can you tell me about HBS?
2:49:05
What's going on at Harvard Business School?
2:49:06
How did that come together?
2:49:06
Tell me kind of the whole story and and how Julius is being used at Harvard. Absolutely.
2:49:12
So, Harvard is Harvard Business School is teaching analysis with Julius.
2:49:16
Entire MBA class over a thousand MBA students. Wow.
2:49:18
all kinds of backgrounds like investment banking, marketing, product managers, tech exe executives, all of them are learning to do analysis with Julius because they realize companies have data and business leaders need to make decisions but analyzing that data is really hard.
2:49:33
Um with Julius just becomes very easy. How did it come about?
2:49:38
Well, the professor um at Harvard Business School who teaches data stuff, Professor Yav Bjanov, he's a Julius user.
2:49:44
He's been for over a year before he reached out and said, "Hey guys, we want to teach this whole class with Julius and we said let's do it like we launch."
2:49:53
Um and um yeah, so they're they're all learning to use Julius now. That's amazing.
2:49:59
Are you going to scale that to other universities or just hope that Mometics take hold and everyone copies HBS?
2:50:04
Uh we I mean we have a lot of interest from other institutions as well.
2:50:09
So like Rice University is teaching a class called AI financial analysis with Julius.
2:50:12
Um, it's just like this new way to do analysis. It's like the new Excel.
2:50:16
So, yeah, that's awesome.
2:50:19
Is that the prize by the way? Is Excel.
2:50:21
You want to just replace it entirely on a long enough time horizon? We won't tell. We won't tell Satia. Absolutely.
2:50:27
Excel, Tableau, all of that.
2:50:30
You know, number one business software in the world, Excel. Follow that. I love it. Uh, last take AI 2027. Uh, did you read it?
2:50:37
Maybe you didn't have time.
2:50:39
Uh, are we all getting paperclipip by a year and a half from now?
2:50:43
What does Julius have to say about a AI timelines?
2:50:45
Import import the GDP growth rate and the energy growth rate and tell me when will we be paper clips? Yeah.
2:50:53
Well, um, I think I think it's a really exciting timeline.
2:50:55
You know, I think the best I think the way to I think one one easy way to look dumb right now is to make super bold predictions on how the future's going to play out.
2:51:04
And so I'm a big believer in like just like I think it's an exciting timeline and we just have to like ride the tiger. Ride the tiger.
2:51:10
I'm going to make a bold prediction.
2:51:12
Uh 4 million users by end of year for Julius. Let's go.
2:51:17
Um I'll take you over on that.
2:51:17
We're going to We're going 10 million users.
2:51:23
It's great to have you on.
2:51:23
Um we uh we got some data to analyze.
2:51:26
So you'll you'll you'll uh see us in there.
2:51:27
And yeah, come come back when there's a new product release or funding announcement.
2:51:33
We'd love to have you back on. I'd love to come back. See you guys. See you. Talk to you soon.
2:51:36
Love that he wore a suit. Yeah. Fantastic.
2:51:39
Understood the assignment.
2:51:40
Uh, next up we got Flo from Lindy. Another AI company.
2:51:43
You could call it a rapper, but I've seen him doing really, really cool stuff.
2:51:47
Um, I'll let him describe it, but I'm excited to to chat with him.
2:51:51
And he is in the studio now. Welcome to the stream. Hello. Yeah, thank you. Uh, how you doing?
2:51:58
Uh, uh, thanks so much for joining. Uh, it's been too long.
2:52:00
Uh but uh good to have you here.
2:52:02
Could you just give us a kind of a basic overview of who you are and the company for everyone? You are on mute. Sorry, we're lost. We lost audio. We're working on it.
2:52:16
We heard him for a second. Okay. Can we talk now? Let's hear it. Can you hear me? Yep, we got you. All right.
2:52:23
Uh yeah, Flo here, founder of Lindy.
2:52:27
We are building a no code platform to build AI agents to automate various workflows.
2:52:31
So like sales, customer support, operations, you name it, we automate it using AI agents. Yeah.
2:52:39
Um I mean the question we've been asking everyone is like when can a agent book my flight or something like that?
2:52:43
What's your timeline and what milestones are we expected to hit?
2:52:49
I guess we're at a big like big picture level.
2:52:51
We're all just waiting for the Studio Gibli moment of agents.
2:52:55
I think we passed the touring test.
2:52:57
Everyone used AI to to do their homework.
2:53:00
Everyone had that magical experience of like, wow, I'm talking to a computer and then it faded out and people used it as a answer engine.
2:53:05
And then same thing with Studio Gibli where everyone's like, "This is incredible."
2:53:10
Uh, but now it's like a tool and it's a filter and people use it tastefully and they'll be creative with it and sometimes they won't.
2:53:16
But uh when when do you think and what milestones do we need to hit to get this kind of breakout societal level meme around agents? A year a year.
2:53:28
I I I I broadly buy the meme that 2025 is the year of agents. It's like a yearish.
2:53:34
I think there's going to be a pretty serious inflection point.
2:53:37
And and you know I I think like when you hear this kind of prediction like a year is qualitatively different from like five years because like five years is like h you know a year means uh you see it you see it in the pipeline.
2:53:47
I can can I share my screen? Yeah you can.
2:53:51
Yeah should come up but whatever you share is live.
2:53:54
So if you have tabs open with passwords we're going to see it.
2:53:57
All my passwords everything is is open. Be be careful.
2:54:00
This is this is a demo we had of actually this is really cool because it's it's uh marrying computer use which we haven't released yet with uh agent swarms which we released uh last week and you can see here I'm asking an agent like hey help me plan a trip to like raises in Colorado need to book a flight find anb and get a rental car. Okay.
2:54:21
And it's deploying a swarm and check this out.
2:54:24
So it's deploying a swarm of three agents one for each.
2:54:26
So, it's like booking a flight, finding an Airbnb and res resolving a car. Yeah.
2:54:31
Decomposing the problem and it works. It just it just works. No interaction.
2:54:33
No, no intervention needed. It just works.
2:54:37
It's doing all of these things at the same time. So, is this live? Uh oh. No, no, no, no.
2:54:41
I mean, this is screen recording, right? Recording. Oh, yeah. Okay.
2:54:44
This is like really fast. God damn. It works really well. No, no, no.
2:54:49
This is This is This is the downside to this. Like, it's pretty slow.
2:54:50
You can see this is like a six minute recording, but in the end, so yeah, I think like this is going to be in production pretty pretty rapidly. Okay. Yeah.
2:54:58
Follow up like uh part of what made the Studio Giblly moment so powerful in my opinion was the fact that um it didn't require a lot of creativity on the part of the user.
2:55:11
And so everyone has a profile photo.
2:55:13
Everyone has a photo of their dog or their family.
2:55:14
They could just click upload Studio Giblly style and they get something amazing.
2:55:18
And and I think that that's almost as important as the underlying technology to make something go mega mega viral.
2:55:26
Do you think that we're using the right example with book a flight or do you think are there any other use cases you've seen where it's like oh I could see there's a day when every single person in America or everyone who's online is going to use an agent to do this because it'll be fun and viral and they'll want to share the results or it'll make their day better. That's a great question.
2:55:46
I am actually quite bearish for consumer agents.
2:55:49
I think like consumers are time rich and money poor. Yeah. Right.
2:55:53
It's like they they don't want to trade time for money like that.
2:55:57
Which is why I think like Google Assistant and Alexa like they've been relative failures.
2:56:01
And I don't think it's because of the technology.
2:56:03
I think it's just like one your time and money pool.
2:56:06
And two, I think the life of a consumer is very convenient because on the other side of every transaction as a consumer, you've got a business which interest is to make the transaction as painless as possible.
2:56:16
Y I actually think like the flight booking experience is fine.
2:56:20
I think the restaurant booking experience is fine.
2:56:21
I think all of these experiences are kind of fine.
2:56:22
I think like there is going to be a transformational moment for businesses where you have like the holy grail of AI agency like what we call the the the drop in replacement for a human worker.
2:56:34
And I think that's coming in like 12 to 18 months. Yeah.
2:56:36
I I I almost I'm just kind of riffing on this, but I almost wonder if the agent moment will look like the Studio Giblly moment, but instead of a single picture, you'll say, "Uh, go and and do some research about my life or my kids' life or put in I'll talk to it for a bit."
2:56:52
And it just produces an entire animated book or something like that.
2:56:56
And it's something that requires using multiple systems and writing and iterating and generating images.
2:57:02
And so, it's still highly personal.
2:57:04
And so anyone in America or anyone in the world can get joy out of that experience, but it's something that wouldn't otherwise be be created.
2:57:10
Like you might stop on a boardwalk and have an illustrator draw you at a carnival.
2:57:17
Um but most people weren't hiring illustrators on Fiverr to turn them into anime.
2:57:21
Uh but they could when it was just one button.
2:57:24
And so maybe the maybe the agent use case will be like for for consumers will be denovo.
2:57:28
It won't be optimizing something that they're already doing.
2:57:32
It'll be something completely new that they would never have paid for. I don't know. What do you think? We'll see.
2:57:35
I mean, we had like one competitor that went viral like nine months ago that did something like that.
2:57:40
It was like use an agent to roast my Twitter viral and then it fizzled out because like the market is that really I think even the the Gibli thing I think is going to eventually fizzle out. It's all fizzled out.
2:57:51
It's like I I don't know that consumers need all that many agents.
2:57:55
I think I think businesses need agents. Yeah.
2:57:57
Well, do you think it's a good uh like marketing strategy at least?
2:58:00
Like have you ever thought about like how can I get uh even if it's even if it's a meme product or meme use of Lindy uh and it's not going to be an enduring or it's going to be extremely high churn but I know that everyone will sign up for that day do one task and yeah I'll keep 2% of them but that's a great trade because I figured out how to go viral with my product.
2:58:20
That's a that's a good point.
2:58:23
I think the downsides though is that boy it's so expensive.
2:58:26
AI sounds so expensive and so that's gonna be that's gonna be a $10 million bill like actually $10 million build and like Open AI is burning money right now on the Giblly thing and they don't care because they raise like $40 million have infinite money if you're a startup it's you know it's it's a different move. Yeah.
2:58:42
Uh what what was your reaction to Toby's leaked memo this morning around you know being AI native? Did you did you see it?
2:58:50
I I skimmed it and I I forwarded it to the team and I said the cosign before I even read it.
2:58:54
I was like whatever he says I I agree. I love it. That's good management.
2:58:59
But but do you think do you think CEOs in general have been wary around you know being too pro pro AI in their businesses to not almost like basically scare employees because you know some it's just about not scaring employees.
2:59:13
I think there is a culture in tech of avoiding to be too prescriptive on exactly the how and really leading on outcomes and like letting engineers like do whatever they want and use any IDE they want.
2:59:25
And I think that's the graph the gap has grown so much now between the frontier of the level of productivity that you can achieve as an engineer and the median practice of the median engineer especially in big companies that now employers have no choice but to just lay the law and be like hey this is the tooling we use like you don't get to use tooling from like the 1980s anymore. Yeah.
2:59:45
Um, can you talk a little bit about uh Lindy being sort of multi-product and and I I I can see a lot of reasons why, you know, for phone calls as an example.
2:59:59
You know, there's companies that do just do that, right?
3:00:04
And I could see the reason for Lindy to to do multiple things is like, you know, a customer does a phone call and then they need an email and then they want a recording and like there's a bunch of, you know, sales, customer support, all all these different areas end up, you know, connecting in.
3:00:18
So, I can see I can see why uh you would want to be sort of multi-product, but uh I'm curious if there's any more uh I'm sure you've thought very deeply about that.
3:00:31
um and and curious your being less opinionated about the actual use case for the customer.
3:00:35
Yeah, I actually think of us I actually think it's a single product.
3:00:39
It's just a lot of use cases and I think that's an important distinction because the beauty of building it this way is that you build a a set of actually few low-level primitives and then this it's like Lego bricks you know and then you can combine these Lego bricks however you want and they combine super linearly and then they explode into this set of of use cases.
3:00:58
the demo I just gave with like agent swarms and computer use.
3:01:00
We didn't have to build this.
3:01:02
We just built agent swarms and now we're building computer use and now these two things just like this demo just like happens like spontaneously basically.
3:01:10
basically. So it's the same thing for computer use you know like when you build a computer use uh startup I summize that maybe 5% of your bandwidth is the actual not sorry not computers phone agents 5% of your work is actually phone like phone code and phone whatnot right the rest is like the scaffolding
3:01:28
around the product right like the the SAS features around like team collaboration and like the the way to like orchestrate your agent and then the go to market overhead and all of that stuff and so I'm like man if we it actually didn't take us that long to build an agent because we all of that scaffold scaffolding around it. And once
3:01:41
And once we have that building block, it's just that much more powerful because it's it's it's plugged into all our other primitives.
3:01:49
And so you you realize a ton of economies of scale from like a good market standpoint and R&D standpoint.
3:01:53
I think it's a better experience very often for the end user because you end up having all of your AI agents in one place.
3:02:00
So you have like one clean pane of glass and you have all of your AI agents in one place.
3:02:04
And I actually think it's going to be much more important even once AI agents can actually work together.
3:02:08
uh you don't want like having all of these different platforms for all of your different AI agents is maybe the same thing as having like five headquarters.
3:02:15
You want all your AI employees under the same roof able to work together very very seamlessly.
3:02:21
Can you talk a little bit more about cost?
3:02:23
You said that AI agents are very expensive to run.
3:02:25
Uh what are you what was your reaction to DeepSeek?
3:02:29
What's your reaction to Llama 4, some of the open source models that might be a little bit cheaper?
3:02:33
Uh what are you monitoring on the inference side?
3:02:35
Yeah, I mean we are seeing costs fall by roughly 40 to 100x every year.
3:02:39
Okay, so today you know we don't have negative unit economics but our unit economics are actually pretty thin.
3:02:47
The margins are pretty thin and we're totally fine with it and so are investors because we're like it doesn't matter.
3:02:52
Like we have actually seen the the prices go down by 40x.
3:02:56
So it's expensive today but it's it's actually still the ROI is is tremendous and and soon it's just going to be an absolute no-brainer.
3:03:02
How much do you think that's driven by um new new algorithms and optimizations versus just new hardware and uh put the transformer on silicon or bake the you know the the weights of llama 4 into an ASIC or something like that.
3:03:18
Historically it's been mostly new algorithms. Yeah.
3:03:20
Well you know or like distillations you know for GPT4 or like GPT4 is so much smaller than like the original GPT4. like GP4 was like a 1.
3:03:29
was like a 1.7 trillion parameter model and GPT40 I think is like what 50B or something like that and then yes there all t like quantization and there's like a lot of optimizations at the level of the stack we know that these innovations didn't happen at the hardware level in
3:03:44
the time span where we saw these costs fall uh can you talk a little bit about evaluation of new models we saw llama 4 dropped on Saturday how does your team actually test that do you just roll it out to a small set of users or you just playing it with yourself. Do you have
3:03:59
Do you have eval built out?
3:04:00
Um how are you testing new LLMs when they drop?
3:04:02
Because it seems like it's every week this this year. Totally.
3:04:06
I I think like so we do have our own eval built out for like cool set of use cases that we're going after and there's a couple hundred test cases there.
3:04:14
Um and we also test by vibes quite a lot.
3:04:18
I will say I feel bad for saying that because the I have friends like the Lama team but boy like Lama for the vibes are really bad.
3:04:23
like the events are good and the vibes are quite bad actually.
3:04:27
What what what do you think's driving that?
3:04:30
Is that just too much focus on pre-training which is hitting a wall on the scale side or is there something else going on?
3:04:36
There are all rumors that they injected some data from the eval in the training set at the last minute. Yeah.
3:04:43
Isn't that like data poisoning or something like that or yeah saturation? Yeah.
3:04:48
I don't know if you saw like the I saw the allegations.
3:04:49
I apologize to my LMA friends, but uh the VP of AI research at Meta resigned and so have a couple members of the core research team seemingly in protest for what they deem to be unethical practices. Oh, interesting.
3:05:03
We'll have to follow up on that.
3:05:05
Oh, and is that you think that just comes down to their AI team being on just having so much pressure due to Meta's investment in capex that it's like if you're not best in class, it's just clearly Yeah.
3:05:19
You know what what are you doing?
3:05:22
Basically, if you're not first, you're last.
3:05:23
I I think Zuck is is massively raising the temperature and I think he's basically threatened to like destroy the whole or like fire the or like similar stuff like that if they don't hit certain targets by a certain date and I think that's led to this outcome.
3:05:39
How uh how how do you think about AI adoption in enterprise but just sort of B2B SMB broadly because I'll give you an example.
3:05:52
So, and I brought this up a few times on the show, but dur during the stib studio Giblly moment, uh, if you had a post go viral enough, people would would respond to it and not know where it was being created, seemingly unaware of OpenAI chat GPT broadly.
3:06:10
When you talk to business owners today that are maybe outside of Silicon Valley, and you explain to them what's possible for AI with AI, are they are they surprised?
3:06:19
Are they aware of this stuff already?
3:06:21
Do you think they're they're quick to adopt uh these products?
3:06:26
Uh you know, I'm curious.
3:06:28
People are aware definitely.
3:06:28
Um we we're seeing some very interesting dynamics play out in the market where um SMBs are aware and they are eager to realize immediate ROI.
3:06:39
So SMBs are actually the ones who have in my mind the most real deployments out there.
3:06:43
They are actually deploying agents for mission critical stuff all day long.
3:06:47
Um enterprise customers are interesting because there is I think AI agents there is a little bit of a return of shelfware.
3:06:54
Um so you know shelfware is like that thing that happened in like the 2000s or like the 90s like Microsoft and Oracle like just like released this software very expensive and everybody the enterprise customers buy it because the pitch is compelling but then it gathers no adoption internally.
3:07:08
adoption internally. that just sits on the shelf and and I think that's happening again with AI agents because a dynamic was seeing play out quite a bit and I don't want to say names but there are some very hot AI startups out there in the enterprise that are basically shelfware like their revenue is skyrocketing and they're meeting very little adoption internally and what's happening is that the board is on
3:07:28
Twitter all day and they're freaking out and they're on the back of the CEO and they're like you've got to figure out this AI thing whatever it means to figure out this AI thing and then the CEO turns around and talks to his
3:07:37
executives and he's like you guys have got to figure out the AI thing and basically the [ __ ] rolls downhill and immense uh uh budgets get unlocked like hundreds of millions of dollars like figure out the AI thing. Um and so you
3:07:45
Um and so you know we are seeing these huge AR numbers these huge growth numbers.
3:07:52
Um adoption is is low very often and even when adoption is their satisfaction is is low because the the products are not quite mature yet and even when the products are adopted they're not typically for very uh uh mission critical tasks yet like enterprises are notoriously and I think for good reason quite risk averse and so they're going slowly here as far as like actual adoption and deployment is concerned. Yeah, that makes sense.
3:08:15
Do you think about h how do you think about uh general risk of rolling out these products?
3:08:23
Right, if you're using cursor internally to write code and help you ship faster, there's, you know, if you make if if the if cursor makes a mistake, you know, you sort of can have the opportunity to correct it.
3:08:36
The customer doesn't isn't necessarily made of aware of the mistake.
3:08:39
Whereas, um there's a bit more risk with with what you're doing, right?
3:08:43
if if a customer gets an email and it doesn't make any sense or they're on the phone uh and and they're talking to uh an agent and the the agent is just sort of stumbling or whatever.
3:08:55
Um I'm curious how you think about, you know, testing uh I'm sure you're doing a massive amount of testing internally and then making sure that that these things are functioning before they're really um you know being rolled out uh at the customer level, but uh I I'm curious uh what your approach is there.
3:09:14
Well, first of all, I I always tell people to compare apples to apples, which is like the the the bar is much lower for agents than it is for other software.
3:09:22
For other software, you want like three or four lines of reliability or what or whatnot.
3:09:26
Agents, the comp is not other software, it's it's humans, right?
3:09:30
And when you hire humans and very often enterprise customers, they have their support done by BPOS in the Philippines or in India or whatnot, the quality is not 100%. Right?
3:09:38
And so you've got to compare, you've got to compare this to that.
3:09:41
compare this to that. So the vast majority of the time for use cases where AI agents are deployed right now they more than clear that bar of human quality and then some right because they are obviously they are available 247 they respond to tickets in like a couple of seconds and then they give you perfect observability so you can
3:09:59
actually see exactly task by task what your AI agents did did like all day you can't say the same for for for for humans and then on top of that with this noted which is like hey headline it's fine AI agents work pretty Well, but you know on top of that what you do is obviously you deploy eval you deploy human in the loop for like the most critical parts of a workflow. So for
3:10:17
So for example customer support agent if you're Uber we don't have Uber as a as a customer but I used to work at Uber.
3:10:23
If you're Uber and a customer complains about like a sexual assault, don't have an AI just just like escalate that to a human as right.
3:10:30
Um or if a customer is asking for a refund on a transaction of more than call it like $500, escalates that to a human, right?
3:10:38
And you can have these hard guard rails in place that are like this action always structurally requires a human in the loop for the AI agent to perform it. That makes sense.
3:10:47
Uh can you talk a little bit about distribution?
3:10:49
uh with a lot of these B2B products, you hear uh oh yeah, anyone can set up a Shopify store, anyone can set up uh QuickBooks, but oftent times these products are actually vended into companies from agencies, consulting groups.
3:11:03
There's actually a like a middleman that's that's doing the implementation and the maintenance of the software.
3:11:09
And in some cases, the companies don't even know that their emails are being sent by Mailchimp under the hood or Claio or any of these different uh SAS products.
3:11:16
Are you finding do you think that'll be a material part of your business or or are you thinking about that?
3:11:22
Yeah, it is a material part of the business today.
3:11:25
We have a partner network. If you go to like lindy.
3:11:27
ai/partners, we've got like dozens of implementation partners that that help us implement these things.
3:11:31
I think it's temporary though because AI agents are soon going to be simple enough.
3:11:36
Again, if you have a drop in replacement for a human worker, it's going to be no more complicated than collaborating with your human teammate.
3:11:44
Um, so I I don't I don't know that you're going to need this for all that long.
3:11:47
Uh, how do you think about collaboration between agents?
3:11:49
I was reading the AI 2027 thing and they were talking about uh oh well like when there's a billion AGIS uh they'll just set up a Slack workspace and they'll talk to each other literally in Slack. Yeah.
3:12:03
Uh you you gave that demo of the three agents working on separate things and then I imagine that their results are kind of put together.
3:12:09
Are you thinking about communication between the agents during the process?
3:12:12
Because you could imagine that oh, it finds a great it finds a great place to stay while you're traveling, but that requires taking a slightly different flight and there's a trade-off there.
3:12:23
And if you had a really great human working on booking you a trip that involved a flight and a and a stay that they might want to talk to each other about the trade-offs there and kind of do some sort of optimization.
3:12:34
You don't just want to book the flight and then also book the best hotel or whatever because they might not be the same. Yeah.
3:12:40
Oh, and so this is currently something we support.
3:12:45
So for example, like we do a lot of recruiting, you know, engineers or designers or sales people, anything while hiring everything, hit me up.
3:12:50
Uh but you know, I have a Lindy that's really good at sourcing candidates and then I have a Lindy that's really good at reaching out to them.
3:12:56
So she perform research about them.
3:12:58
She knows exactly how to reach out to each person and all of that stuff.
3:13:01
And so these two lindies are are in touch with each other.
3:13:03
So one finds candidates, the other reaches out to them.
3:13:06
Um yeah, I I think that's going to be super important and that's part of why we are so passionate about having all of the agents in the same platform.
3:13:13
You could say you don't need them in the same platform because they can use platforms like Slack and whatnot to to collaborate, but and that is part of the AI 27 uh 2027 essay, right?
3:13:20
He he talks a lot about neuroles.
3:13:23
He says like agents are not always going to go communicate with each other in uh human readable tokens.
3:13:29
Um and and that's also part of our thesis and so that's going to be much easier for AI agents to do if they are part of the same platform.
3:13:35
Um I think ultimately this like the AI agent team topology is going to be one of the main drivers of the performance of your of your AI agent setup.
3:13:44
And I think at first it's going to be on you as a user to figure out that topology.
3:13:48
In a way you're going to be doing the the job of a CEO.
3:13:51
It's like hey what's the reporting structure?
3:13:52
Who communicates to whom? How?
3:13:54
Like all of that stuff you're going to have to design eventually and in the not too distant future.
3:13:58
You are going to have an AI agent design design that for you.
3:14:02
So we call that the AI chief of staff.
3:14:03
It's just going to manage all of your AI agents and you can imagine this recursively, right?
3:14:07
Just like agents managing agents managing agents. Uh what's your PDoom? Are you scared?
3:14:13
Uh does AI does AI scare you or you just like no we're putting them to work? I'm terrified.
3:14:17
work? I'm terrified. Um my pedum is about look I fluctuate the error bars are huge but like look even if it was low like 10% that's unacceptably high if you listen to the dor the dorkish podcast on 2027 that's the part I love dorkish I love the podcast but that's the part where I'm like what at some point they talk
3:14:38
about pdoom and one guy is like yeah I'm 70% and the other guy is like I'm an optimist I'm only 20% and then they move on I'm like can we spend the whole conversation talking about the fact that like very credible very smart people who are who spent a lot of time thinking about this literally think that there's a 20% chance that we as a civilization go extinct in 10 years. Like I'm I'm Like I'm I'm terrified.
3:14:57
I I I think I I think it's very under discussed.
3:14:59
I think it's it's pretty and I think that's Is it possible is it possible that Lindy at some point pivots to being a defense company, but you guys are deploying agent swarms to to fight the uh robot apocalyp our robot adversaries?
3:15:12
Look, you know, we're selling to SMBs.
3:15:15
who you are but a time agent company.
3:15:17
Um um I mean uh I I I want to talk about something very anodine compared uh uh just uh the idea of like putting an agent on a cron job that feels like something that's that's potentially uh so simple but very value creative just okay I have a task that I need to do and I want to make sure it happens every single day.
3:15:43
every single day. Are you seeing traction in that vertical or are you messaging that type of activity and and and what are the what are some of the cool use cases like do you have any like cron jobs set up where an agent does something for you even if it's simple uh just checking a newsletter checking a website just doing something pretty
3:16:02
simple but it's something that happens reliably every day that I have a ton I have a ton so I have one that actually I received the email from this morning that checks out my favorite podcasts uh every week and Uh because I I don't really listen to podcasts anymore and so just like takes the podcasts, transcribes transcribes it and sends me a summary of my favorite podcasts every week. Yeah. Um I have a couple that ping Yeah.
3:16:21
Um I have a couple that ping me on Friday nights that so one of them looks at my calendar and tells me like and looks at my priorities and tells me whether my calendar is aligned with my priorities.
3:16:32
One of them looks at my personal CRM and at my calendar and like hey you met with this guy this week. He seems interesting. You should hit him up. That's cool.
3:16:39
One of them, one of them looks at all because I have a Lindy in all my meetings and so she looks at all my meetings for this week and she sends me a digest of all my meetings this week.
3:16:48
Uh we have one that like every day, this one is really powerful actually.
3:16:52
It's my one of my favorite. It's companywide.
3:16:54
So every day it ingests a ton of information from the company.
3:16:57
So every external meeting we had with customers, every support ticket we received, like a lot of communication and then it sends a companywide digest to the whole company like the general channel on Slack.
3:17:07
So like in a couple of bullet points you get like that heartbeat of the company.
3:17:10
That's been one of the most surprising use cases to me is AI agents are really good at just ingesting a ton of data very rapidly and summarizing it.
3:17:18
So writing reports is is a really really strong use case right now.
3:17:22
Do you need a larger context window for that larger task or does it work with any of your models?
3:17:26
I mean modern models have like 200,000 tokens context windows.
3:17:30
That's enough for like 150 pages book or something like that. That's that's plenty. Okay, last question. We'll let you go. Um, what about the name?
3:17:37
This seems like the least Lindy company possible.
3:17:39
It's like very new age and futuristic and sci-fi.
3:17:44
Uh, is it a reference to the Lindy effect or did you just like the name?
3:17:49
No, we have a teammate named Lindy actually. Oh, okay. Yeah.
3:17:50
And so we were just like looking for a name for way too long and then she was in the room.
3:17:54
We were brainstorming like, "How about Lindy?" And so yeah, all right. Lindy. That's great. I love it. Can never leave now. Yeah, she's got to stay.
3:18:01
Do you have a This is great. This is great. Thanks so much.
3:18:04
We got to get some lindies going internally at TVPN and yeah, where can people sign up, get started?
3:18:10
What's pricing look like for your average consumer B2B? Yeah, go to lindy.
3:18:14
ai and don't worry about the price, right?
3:18:18
It's it starts at $50 a month. Yeah.
3:18:18
And we also offer to my point about the implementation like you know if you've got stuff you want to automate, hit us up.
3:18:25
We'll we'll use to implementing men for people. That's amazing. Amazing.
3:18:29
Well, thanks so much for joining. Great to chat fluff. This is fantastic. Talk to you soon. Bye. That was a great day.
3:18:34
He he he writes about it a lot on his on his uh on his ax.
3:18:40
It's uh always scary when you talk to somebody who's close to the metal and terrified of the metal. Yeah.
3:18:44
But I I feel safe knowing that he could turn his swarms against, you know, that's all that matters is there's more good robots than bad robots and we win. Yep.
3:18:52
But hopefully hopefully we we outnumber them.
3:18:57
Uh anyway, any other posts you want to do from the timeline or should we get out of here?
3:19:00
No, I honestly was just looking at Poly Market pulled up. I was I was tracking.
3:19:04
I don't know how this feels. Um, it's crazy.
3:19:07
Do you know that Poly Market right now is only has a 1% chance of a US recession before May 2025?
3:19:16
Well, that's like it would be very very hard for it to happen in May because a recession they would have to like rewrite the data like Yeah. Yeah. Yeah. Yeah.
3:19:26
So recession is defined as like uh I I think it's actually it's usually defined as like multiple quarters of of economic contraction.
3:19:32
So so it's basically impossible. Yeah. Yeah.
3:19:35
It's unless they were to rewrite unless they were to basically get new old GDP data because I mean these like the market is a leading indicator right now.
3:19:47
You're seeing people I mean even on the show we're talking about will companies pull back? Maybe they will.
3:19:53
Will consumer stop buying foreign made cars?
3:19:56
Will they stop buying cars overall?
3:19:58
Are is there gonna be inflation?
3:19:59
Like we have no idea what's going to happen to the to the business community or the or the American consumer.
3:20:04
And so for GDP to just suddenly shrink it would be very rare unlike what happened in COVID where you know all the businesses were closed immediately and there was a massive drop in GDP very very quickly that all came back.
3:20:16
Uh this is very much I mean you talk to the smartest people in the tech and finance world and they're all saying some version of let's wait and see.
3:20:23
I don't know the the market's down.
3:20:26
It doesn't seem great but maybe it'll work out. I don't know.
3:20:30
I'm kind of just doing the same thing.
3:20:32
I'm focused on AI or whatever.
3:20:34
And so I'm sure there's a lot of people that Yeah.
3:20:35
They're they're upset that the market's down, but they're not fearing for their jobs or really like pressing pause on that purchase or that vacation.
3:20:42
Yeah, they're just kind of continuing on.
3:20:45
Anyway, uh we'll be digging into it more throughout the course of the week, so stay tuned.
3:20:52
And other than that, thanks for watching. Thank you. Uh it's going to