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[Music] [Music] You're watching TVN. It's James Bond. It's Tuesday.
5:02
Uh, it's Wednesday, April 2nd, 2025.
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We are live from the Temple of Technology, the fortress of finance, the capital of capital.
5:09
We are enjoying these uh these pistols. Yeah.
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Apparently, you don't get a gun if you're a spy for a B2B SAS company, but you do get a gun if you're a podcaster. So, that's fun.
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And you do get cool code words.
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Yeah, we're going to be busting out lots of code words you're going to want to see.
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Send that watch to London, John.
5:26
Send that watch to London.
5:26
Uh we love a good a good a good tech spying story. We've covered it before.
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the allegations that deal implanted a spy or recruited a spy from Ripling, the rival B2B SAS company that that handles HRIS and payroll, uh, amongst other things.
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Uh, we've covered it when the story broke a few weeks ago when I was in Washington DC.
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Now we're back in the Temple of Technology and we're covering it again.
5:56
Um, and it's fascinating because the spy, so to give you just a little bit of background, um, guy works for Ripling, deal is a rival.
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These two companies are very similar size and scale, but they've been bitter rivals for years, funded by different sets of of venture capitalists.
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Uh, guy from Ripling gets an, you know, starts applying for a job at at Deal, maybe thinking about jumping ship or starting some consulting and doing some work with Deal, the rival company.
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um winds up messaging with apparently the CEO of deal and uh and sending over secrets and potential clients and strategies that Rippling is using to win the HIS market and uh it's a fascinating story because you think about spying as being much higher stakes and maybe reserved for the palunteers of the world or something that SpaceX would need to worry about or maybe Anderol needs to worry about it.
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If you don't think about it in the context of your payroll provider, the lesson is no one's safe. No one's safe.
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And so, um, I think, uh, we will go through the affidavit, which we shared on X this morning.
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Parker Conrad, also the CEO of of Ripling, also chimed in with his analysis.
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Uh, but I thought Everett Randall summed it up very nicely.
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You got to hold it in camera. Boom, boom, boom, boom.
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We got these water pistols. Teimu Glocks. Teimu Glocks.
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They look very I mean you spray you spray paint this black and you know that's going to be an issue.
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It's going to be an issue but they're fun.
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They actually click when you when you click.
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Anyway, so fun Everett quoting Everett summed it up really well with a great meme post.
7:38
So can we pull up the Everett post?
7:40
Everett Randall over at Clan Perkins if you're not familiar.
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Friend of the show there was a deal spy.
7:42
Oh, the deal founder told him it'd be like James James spy was directly on founders payroll through sloppy payment trail which we'll get into.
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Founders dad also the CFO and chairman set up a code language to make it feel more like a spy movie.
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Uh I honestly am going to be using these lines for a long time.
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My favorite is send that watch to London.
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Send that watch to London is going to be in the cannon of tech phrases forever.
8:13
It's going to be like Sweet Baby Rays or, you know, the cat is in the bag, the bag is in the river. That whole phrase.
8:19
Uh, I'm trying to think of the other like iconic senator, we sell ads.
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That I'm I'm I'm not I'm I don't I'm not doing it for the money.
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What was the Sam Alman quote?
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Like that just became like a meme forever.
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There's a going direct founder mode.
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Send that watch to London.
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You know, it's going to be iconic.
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That is going to be an iconic phrase.
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Um, but let's start with let's start with our post and then we'll do some reactions.
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And I'm sure there are timeline right now.
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So I will run through a little bit of this feel.
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So we covered this story the morning that this was all breaking the original Parker Conrad post.
8:53
It was very explosive at that time. It was unclear, right?
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The spy we talked about this is sort of caught in the middle in a weird way, right?
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Nobody, he's not not really on anyone's team at that point.
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We had so many questions.
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You know, just in the past month, he'd been paid by both Ripling and Deal. Yeah.
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But now he's out uh in the wilderness by himself, right?
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And so there's this big question of which side is he going to take because that obviously gives a lot of leverage to the to the side that he sort of like says this is my team. Totally. I'm riding with them.
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And so and it even seemed like he was ready to remember he was like I'm willing to take that risk and it felt like he was like ride or die deal.
9:31
And then all of a sudden he flips and goes uh and he starts cooperating with Ripling.
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And so why don't why don't I do some some reading?
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We'll kind of trade off the post that we highlighted this morning.
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So the affidavit is basically step by step all the different sort of sections to the story.
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Remarkably readable 12 pages and and it's like it's not total legal ease.
9:52
It's very much it's in plain English. You can just go read it. We posted it. Uh we shared it.
9:56
It's at the bottom of of our main thread on the deal spy.
10:00
Um, and of course, uh, one of the most fun exchanges here comes very immediately and it's the reason we are in James Bond mode today with our pistols.
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Uh, it's because, uh, so this all started in September of 2024.
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Uh, Alex, the CEO of Deal, who we'll need to remember, his name's Alex because we're just going to be calling him Alex.
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We could call Parker Parker. Uh, Ripling.
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There's a lot of people moving around, but uh, Alex and the spy.
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Um, his name has leaked, but I think we're just going to keep calling him the spy.
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uh because I don't know why why draw more attention to this guy than he needs.
10:33
Um yeah, Alex suggested that the spy and him consider uh discuss career considerations.
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Kind of a normal recruiting cycle. They talk on WhatsApp.
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Uh they had a phone call and they expl they had exchanged messages on LinkedIn and WhatsApp. Very normal. Yeah.
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So the backtory here is the the spy was working for Ripling applied to work at deal and uh didn't receive an offer which is normal.
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And so he reached out to he reached out to Alex to get feedback on the application process and Alex said you you kind of bombed your presentation. Yep.
11:05
But uh they built a relationship from that point on. Allegedly. Yeah. Yeah. All of this is alleged.
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Um this is a uh a signed affidavit.
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So uh I think if he's lying in here, he could potentially committing another crime.
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He's committing another crime.
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Um but let's just be honest, like deal has not responded.
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maybe they have some amazing response and like we're we're we'll we'll hear them out if that comes out.
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It'd be super interesting.
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It'd be a crazy plot twist and we love plot twists. Yeah.
11:33
Um and so, uh he takes a WhatsApp call with Alex from a meeting room in Ripling's Dublin office while he was at work and Alex told him, "I have an idea."
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He suggested that he remain at Ripling and become a spy for deal. Which is in quotes.
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He must have said the word spy, not just like he could have been like, you know, dog whistling and said like, "Hey, like, you know, we would we we would love for you to like give us competitive intelligence, you know, no euphemisms, just straight up spy."
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And then and then he says he suggested that I remain at Ripling and become a spy for a deal.
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And I recall him specifically mentioning James Bond, which is hilarious, hilarious to be like you're this is the opportunity to be James Bond in B2B SAS.
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Um, he said I asked him what he meant.
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He said he would offer me a monetary reward if I agreed to spy on Ripling for a deal.
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I told him I'd have to think about it.
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Uh, and so communication immediately starts spinning up between the spy, Alex and Phipe, who's Alex's father and deal CFO.
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So, it's a father father some son combo kind of running the company.
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And they move from WhatsApp to Telegram.
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So, of course, they're unencrypted and probably disappearing messages.
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And so a lot of those probably won't enter the record at any time.
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Later they talk about how like a few videos and later the spy to be clear breaks his phone with an axe.
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Destroys his phone with an axe which as we know destroys all the information inside for sure. Exactly. Maybe. Who knows?
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He also flushed it down the toilet.
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He really like went after it.
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It's it's it's just iconic.
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This is like some one of the best tech stories in history. So fun.
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Um, so they have a three-way call between Alex, the dad, and uh who is Deal's CFO and the spy.
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Um, uh, Alex asked me if I was agreeing to his offer.
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Once I agreed, Alex said we should move the conversation to Telegram.
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And so he sets up Telegram to engage in secret communications.
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Uh, now this was something we were very interested in hearing was how much was the spy paid because it feels like extremely risky to do this.
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It's seems like it's extremely illegal, maybe criminal.
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It's like a lot of risk and and these are very high-flying companies.
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Like the top people at these companies are making millions of dollars, right?
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Like they're getting huge comp packages, huge equity bonuses.
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You would think that to do something that's so risky and so and also moves the needle for deal a lot.
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Like if they if they poach like one or two of Rippling's clients from this, like that creates millions of dollars of value and he should be capturing 50% of that. I would Yeah.
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If we were his agent and and this is all legal, let's say, we would never advise him on that.
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We would have said, "Hey, you're going to put up some historic numbers for deal with with what you're doing.
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You're creating some massive shareholder value for deal. You need 50% of that.
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So, like it's got to be 100k a month."
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But it wasn't 100k a month.
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It was 5,000 a month, which feels very low.
14:27
Oh, and it feels well and the thing the thing that makes this whole thing so serious is that some of these customers would have potentially, you know, not gone with Rippling or switch from Rippling to deal and those contracts even if you land a few big logos could be worth tens of millions of dollars over time.
14:48
And uh not to mention that, but there was also, you know, the the spy was was allegedly passing information on the superstar talent sort of top also poaching.
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And I mean superstar talent someone like that.
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I mean, what's a recruiter fee? 50K, right?
15:05
30K, something like that.
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And so, you know, he's going to he's going to feed some superstar talent and get 5K. Yeah. Yeah.
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So, uh to put this into perspective though, €60,000 6,000 euros or five it's 5,000 sorry 5,000 so 60,000 a year and you know 5,000 annualized spying is what a general practitioner like a doctor makes in Ireland. Oh interesting.
15:30
And so it's actually like you put this into the equivalent of like he's basically if he was in the US he'd be getting paid like $300,000 a year sort of like the entry uh salary for a doctor.
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So it's not inconsequential.
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It's very possible that he was making more from this arrangement than his actual he wasn't super senior at Rip.
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He just had access to all the systems because he was on the team.
15:54
And man, they must be redoing their security like crazy at Ripling right now. Yeah.
16:01
Bull market and IT jobs over there. Sure.
16:03
Well, the the the the the there's so much irony in this whole story, but the great irony is that Ripling was selling payroll with it.
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And it seems like they were able to use their own product to catch the spy. Yeah. Yeah. Yeah.
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Which is a great I'm sure they'll use that as a case study basically forever. Yeah.
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On why you should use Ripley. Yeah.
16:24
Um, and so initially he wants to be paid in fiat, uh, because he's worried about volatility in crypto.
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And so he asks that payments be made through Revolute, but over time he asks to, um, move over to crypto, uh, which deal CFO incorrectly believed would leave no trace.
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And in fact, it leaves the most trace, permanent public one.
16:47
In fact, anyone can trace it. It's on the blockchain.
16:52
Well, in this case, I think he was getting paid to a centralized exchange. Yeah.
16:55
So probably not, but like you know you can easily subpoena.
16:58
But the big thing here is he's claiming that the payment came from the wife of the COO of deal.
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And the reason that that becomes an issue is if it's true, it just ends up incriminating basically the entire exec team, the CEO, the COO.
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Every single person was involved. Yeah.
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And then the lawyer come the the the general counsel comes in later too, deals lawyer.
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And so there's that was unclear to me.
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Yeah, I don't know if it was external counsel or somebody they brought in, but it seemed at least one lawyer. Yeah.
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From deal was like, you know, actively working on on trying to fix this issue that that seemed to be internal. Yep.
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And so he would get the crypto, he'd get Ethereum uh in his blockchain.
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com cryptocurrency wallet and uh and then he would liquidate the funds and transfer it.
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But it's again, it's so funny.
17:46
We've talked about a little bit insider training before.
17:47
Um, like the most obvious thing is just like, oh, like I don't want this payment to show up on my account because I'm working for a deal.
17:57
Like I I'll have to use someone who's like arms length from me and it's like your wife who's like clearly tied to you. Yeah.
18:03
It's not like it's some oh yeah, someone that you are not even connected with on social media.
18:07
No one could possibly know. You cross paths.
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You love each other, but like you never talk.
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Is the issue is like so obvious.
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If in this situation, if the spy had said, "Deal's my team." Yeah.
18:19
I'm riding it out with you guys. Yeah.
18:22
He like all this stuff makes it so much harder to for for them for deal to spin, right?
18:31
Because you go onward where the spy is giving a record of the code words and phrases they use to coordinate payment which uh Phipe uh the CFO and chairman would say uh would send a picture of a watch to the pay uh the spy would send a picture of a watch to their payment chat and Phipe would say send that watch to London and then he would respond the buyer is very happy.
18:54
Uh, and so they were sort of communicating in, you know, trying to imply that like there was, I guess, some type of like watch transaction and that was the payment.
19:05
Yeah, that that's how I read it is they wanted some plausible deniability that like they were just trading watches with this guy.
19:10
I think that's I I think that's what they wanted to paper over a little bit.
19:14
This corporate espionage is brought to you by I mean, as soon as I saw We're not gonna we're not going to monetize this.
19:20
We're not going to monetize this.
19:21
Um um but yeah, I mean seriously, you should not you should not be uh doing fake watch transactions.
19:28
You you should be buying real watches instead.
19:29
Work hard, make make legitimate money. Yeah.
19:33
So the crazy go invest in the crazy thing is that deals uh CEO would allegedly would message the spy multiple times a day and if the spy didn't respond quickly would follow up and sort of double and triple text.
19:47
His texting style is wild.
19:49
He says, "Yeah, honestly sounds seems like pretty cool.
19:54
Just throwing the word boss around." Yeah.
19:57
It's funny because like he's the CEO of a multi-billion dollar company, very successful.
20:01
Uh and uh and and he has this spy who's like clearly un like many levels below him, only making 60K.
20:09
Is there a reason you're pointing a gun at me constantly?
20:11
It's very threatening to just do an interview.
20:14
Jord's like this at me like just just under the table. Under the table. Sorry.
20:18
Don't say Don't cut me off.
20:20
Don't say Don't say what you're about to say. Never cut me off.
20:26
Never cut me off while I'm talking. Awan coffee in one hand. Pink timu gun.
20:33
You see it on the other hand screen. There you go.
20:34
Um but but he texts in all lowercase which has been a contentious issue on the timeline for a while.
20:40
Uh but he always he always addresses he always he always addresses the spy as boss.
20:48
So he'll say, "Hi boss," or "Hey boss, can you search for this?"
20:51
Uh Alex would frequently message me on Mondays with, "Hey boss, good weekend."
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with two question marks, which is something I don't normally do. Casual and fun.
20:59
And hey, let's give him some credit.
21:02
He wasn't calling him bud.
21:03
Yeah, it could have been a lot worse.
21:05
It could have been a lot worse. I like boss.
21:08
I I I think I think it's a good way to address Yeah, Chief is respectful. Sorry.
21:16
Take it on the other side.
21:16
Can't can't stop pointing.
21:18
He keeps pointing the gun at me. Water gun at John.
21:23
Anyway, uh so what did deal actually want the spy to search for in Ripling Systems?
21:29
Well, we heard about Tiny Bird before.
21:31
Um but we also know that they were searching for Tom Brady.
21:33
We don't know why, but I think maybe Tom Brady's building a startup and needs HIS.
21:39
Maybe you think that's I was trying to I was trying to or maybe they were going to do a sponsorship.
21:45
Anything we'd say here, I think would just be pure speculation.
21:49
Iran seems pretty obvious. Yep.
21:49
Because there were there were like allegations that that um deal was being used in sanctioned countries.
21:56
sanctioned countries. I believe there was like there was a there's a rumor going around uh and there was some reporting by the information that maybe some clients and and this is the nature I mean I don't want to be too too harsh
22:07
like this is the nature of like online platforms people try and abuse them all the time sometimes it's you're doing everything you can to stop abuse and you still get a little bit but the allegations were that they weren't really doing that much. Yeah. Yeah. And Yeah. Yeah. And who who knows?
22:22
But clearly he wanted to knows?
22:23
But clearly he wanted to know if know if RIP if people at Ripling were RIP if people at Ripling were were were talking about Iran. Yeah. And talking about Iran. Yeah.
22:28
And probably probably in the context of deal. Yeah. in the context of deal. Yeah. Interesting. But who knows? And then Interesting. But who knows?
22:35
And then yeah, they was also asking for yeah, they was also asking for superstars.
22:38
What was up with Tiny Bird? superstars.
22:38
What was up with Tiny Bird? I don't know.
22:41
I don't know what Tiny I don't know.
22:41
I don't know what Tiny Bird is.
22:43
It was mentioned in the Bird is.
22:43
It was mentioned in the previous uh thing. Yeah.
22:45
And who who previous uh thing.
22:45
I think it was like, wasn't it, wasn't it the wasn't it the leak of the uh it was it was something that was it was like, wasn't it like the honeypot?
22:54
It was like there was an article that was going to go out that was going to mention Tiny Bird.
22:56
And so uh and so uh Ripling sent an email to the executives at deal and said like, "Hey, there's this hit piece coming out that's implicating you and it's about this thing called Tiny Bird."
23:10
And then they they knew that they searched for it and they would have no way to know that that was the keyword that was going to be in that article unless they had read that and then passed it to the spy, which is exactly what they did.
23:21
Anyway, um Tom Brady though could there's potentially a Tom Brady of B2B sales, you know.
23:29
Oh yeah, maybe that's it.
23:30
You're looking for a superstar.
23:30
You want to know who the goat who the goat is rising up. Yeah.
23:34
Looking around the next Sam Blond the next Sam Buck.
23:37
Everyone who's good in B2B SAS sales, Sam B always. Yep. Sam blonde. Sam B.
23:44
Uh the CEO and spy were friendly and enjoyed talking about sports.
23:50
Uh Alex uh the CEO of deal was also just chatting it up about Paris St.
23:56
Germaine football club, the soccer team of Paris.
23:58
Uh he reached out to me multiple times today to request information about Ripling. It seemed constant.
24:03
It had been a few hours since he had heard from me. He would reach out.
24:06
Uh, and then the level of detail here and like the the management.
24:11
I mean, you join an organization, it's it's usually pretty hard to get facetime with the CEO, but you come in as a spy, you're going to get direct access. You can chat them up.
24:19
You can you can get all the mentorship you want.
24:20
Maybe this is the the path to career acceleration. If only it was legal. Yeah.
24:25
So, here's where it gets particularly spicy.
24:29
So, at the end of February 2025, Alex told the spy to search Ripling Slack system for the channel #d defectors.
24:37
And remember, this was part of the honeypot operation that that Ripang was running to try to prove that deal senior management was coordinating with the spy.
24:47
The spy ran the search immediately and began to look at the results.
24:50
Within minutes, Alex had messaged him and told him not to run the search because he believed it was a trap.
24:57
The spy told Alex that by the time he got his message, he had already done the search.
25:01
And Alex said, "Oh shit." Wow.
25:05
And said, the spy said, "I told him that deed defectors had Matt Plank, Ripling's chief revenue officer in the not who you want to find."
25:12
It's such a virtual world of like of like walking into a room and like the big guys just there and be like, "How about you have a seat?" Like we the jig is up. The jig is up.
25:22
I wasn't expecting HR to be here. Yep.
25:26
I told him I was frightened, but he said, "Don't worry."
25:28
Thereafter, he continued to press me to pass him information from Ripling, which is extremely bold.
25:33
Like, you think it's a trap. It looks like a trap. It went in.
25:38
You went in and looked around and it was like only this chief revenue officer is there.
25:42
No, that like the thing that you expected was not there. It feels like a trap. You suspected it.
25:46
And then he's like, "Don't worry. Let's just keep spying. You're good."
25:48
Like they should have cut it down then in February. Yeah. Who knows?
25:52
But it it was probably already too late.
25:54
So maybe he ran the calculus of, you know, let's just Should we talk about the escape attempt?
26:02
I don't even think he attempted.
26:02
I mean, obviously when he was confronted in his office, this is the spy.
26:06
The spy made a bunch of excuses and said, "Oh, my phone and my laptop are down here." He had them.
26:14
He said he went to the into the bathroom and he flushed the toilet a few times, but I don't think he flushed anything or that's what he implies.
26:21
Uh, and where it gets particularly interesting is that the apparently a seif deals in house lawyer uh was you know at this point starting to talk to him and said that uh he was speaking in a personal capacity. Ripling has nothing.
26:41
Uh and a seif suggested that the spy and his family fly to Dubai that night. Yeah.
26:46
Saying we all need a holiday.
26:48
Uh and we all do need a holiday.
26:52
Dubai has I don't believe has extradition agreements with anyone, do they?
26:58
I I don't think that's true. I think they do.
27:02
I don't think it's non-extradition.
27:04
I think it's just hard to find someone if they're there. Land low.
27:08
Um, I think you have to go like way way more obscure, but I don't know. You can look it up.
27:12
Um, the spy proceeded to smash his phone with an axe.
27:15
He also deleted his LinkedIn account.
27:16
Like that would do anything, but it's very Yeah, they do.
27:21
They signed an extradition treaty in actually late 2024. Ireland in the UAE. Yeah, they were ahead. It makes sense.
27:31
I mean, there's a lot of people that go there.
27:32
Um, it would be weird for it just to be like a free-for-all of criminals, right?
27:35
Um, and so he smashed his phone with an axe and put it down the drain at my mother-in-law's house as Deal's lawyer uh as as the deal's lawyer had advised.
27:47
Um, that uh that evening, Deal's lawyer uh spoke to his wife for 45 minutes on an to an hour on a Telegram call, reassuring her and corroborating what I had told her that Ripley was lying and making all of this up.
28:00
My wife later expressed concerns to me about the call with Deal's lawyer.
28:04
She said that what he was saying did not add up and she felt he was being pushy.
28:09
And so this the spy finally decided to cooperate with Ripling after getting a text message from a friend that said the truth will set you free.
28:15
And so um the family members were advising him to just tell the truth and that it was the fastest way to move past all of this.
28:25
And so uh he realized that he was harming himself and his family to protect deal.
28:29
He was concerned and am still concerned about the wealth how wealthy and powerful Alex and Philipe are.
28:35
But I know what I was doing was wrong.
28:37
Uh after I spoke to my solicitors, um I started to feel a sense of relief.
28:43
I want to do what I can to start making amends and writing these wrongs. Yeah.
28:48
And I'm not surprised now getting his side of the story that he very quickly flipped to team Ripley. Yeah.
28:58
It just doesn't it's hard to imagine like seemingly if he went with deal and this was the situation that it was going to be hard for him not to go down with the deal ship.
29:10
Now there's a lot of different stakeholders and players involved here.
29:13
There's there's deal and its management team.
29:16
There's deal shareholders, right?
29:18
And then on the other side you have rippling and rippling shareholders.
29:21
And it's going to continue to be extremely messy.
29:24
But uh and to be clear here, like the spy, nothing about this makes the spy look any better.
29:35
In fact, it's like he knew what he was doing the entire way and repeatedly made the choice to commit crimes. Yeah. Steal.
29:45
Like there are gray areas for some not there's not a lot of gray areas.
29:52
there's not a lot of gray areas. There are gray areas generally in not in like corporate secrets but in like strategies like if you go if you if you go and work at at you know some high growth company and then you're recruited somewhere else and you leave like yes you can't you
30:07
can't export GitHub code everyone knows that but can you call up someone that you got drinks with and maybe you met them in a corporate context but then you became friends and then you get them as a client like probably or or can you just say hey at my last company we worked really hard and we had this fast-paced thing and this was our strategy. So, why don't we implement
30:26
So, why don't we implement that strategy here?
30:27
Like that stuff happens all the time.
30:29
That's the reason why VCs love to back like former Stripe operator now doing a startup.
30:33
It's because it's like, well, we hope that you're going to kind of steal the Stripe culture or copy it in some ways and bring that to bear in your new organization.
30:43
Now the line is drawn at like stealing secrets, IP, contacts, connections, and then also and then obviously way way further.
30:51
But the whole thing is that to your point, this wasn't even framed as anything like that.
30:56
It could have been framed as like, hey, like you have this you have this depth of experience at a rival company.
31:02
We would love to get you out of there and then put you to work in a much higher growth scenario very quick very quickly.
31:11
take advantage of this all the expertise that you learned over there.
31:13
Obviously, don't steal anything, but you're going to hit the ground running very quickly here as opposed to if you came from a company that has nothing to do with this industry.
31:23
That happens all the time, right? Um yeah.
31:24
So, but it doesn't look like that at all.
31:27
And the fact that like it literally kicked off with like, hey, do you want to spy and beat James Bond? Um not good.
31:32
To be clear, we don't have any insight into Ripling's employment agreements, but there's things like IP assignments and things like that and and uh there there's there's no spying clauses.
31:44
Yeah, there's going to be plenty of documentation around that that would make it very obvious that that by giving company secrets and IP to uh to a and getting paid by a direct competitor is just going to be Yeah.
31:59
Um, yeah, that that's that's the thing that's sort of unclear with the case so far and how this is going to shake out is like there's civil case.
32:08
Yeah, there's potentially criminal cases.
32:10
The way this is shaking out now, I mean, we saw like um I think it was JD Ross said, "Never seen anything like this in tech.
32:17
These guys are all going to jail.
32:19
Uh, and deal will likely die as a business." Um, I don't know. Aggressive. Very aggressive.
32:24
I don't know if either of those are true.
32:26
Uh there are so many layers of irony in the story it's hard to even know where to start which I do agree with.
32:31
But this the first part is it's hard for me to imagine how Phipe and Alex stay Yeah.
32:38
in management roles or or the COO, right?
32:42
Like seemingly like uh they all probably have to go for the company to move forward. Will they go to jail? It's unclear.
32:52
I think that again it will kind of be on rippling and rippling shareholders whether Ripling wants to.
33:02
Right now I believe it's a civil case right and so that doesn't mean that uh and and there there will be if that were to proceed there would be sort of penalties and and you know a number of consequences for that but it could switch to being a criminal case and at that point you know who knows there there could be jail time.
33:21
But before you get to that, you'd have deal and deals, you know, board and shareholders broadly that could go to Ripling and say like, you know, this was clearly, you know, a big mistake.
33:32
Here's what we're going to do to correct it.
33:36
There's probably a massive settlement associated with that. Yep.
33:37
Um it's it's very possible that Ripink could basically get like a series E done here to move forward.
33:45
A non-dilutive series E type of thing, you know? Yeah.
33:48
just like, hey, if you want this to go away, you're going to have to pay us $100 million or something like that. Uh, that would be crazy. It's possible.
33:55
The the thing that I was talking about with you earlier was was, okay, so if deal winds up paying Ripling a huge settlement to make this go away, well, now they have a new problem on their hands because their investors should be upset about that because that was a massive liability that was not disclosed to the investors.
34:16
that could be considered securities fraud and they might have a case there.
34:20
And so you're kind of fighting a war on two fronts.
34:22
You want to keep Ripling happy, but then you also want to keep your shareholders happy.
34:25
And if you can't do both, you're going to face pressure legally.
34:28
And how how that will manifest, I don't know if it's if it's criminal, I don't know if it's civil, but like you're going to face pressure and there's going to be unhappy people on one side or the other.
34:37
And that's a really really tough spot to be in.
34:39
It seems like no matter how much control Alex and Phipe and the COO have over the business today, yeah, just purely from a corporate standpoint, I don't see how they make it out of this.
34:51
Y, you know, I I agree with you.
34:53
Still running the company.
34:54
Yes, I I completely agree with that.
34:57
that. There is the bigger question of like this could be a where there's smoke there's fire situation where like there's other problems with the business uh and there's been like rumblings about that and reporting but let's assume that deal has you know huge book of business and a lot of companies that are you know
35:14
relatively happy with the product and they run their payrolls on time and do hs stuff and they're just like happy with it as a SAS product and they couldn't even tell you the name of the CEO if they tried you know like we use you know sure microphones here I can't tell you the CEO of Shore if Shore was embroiled in a conflict or some controversy. Like I wouldn't be aware of
35:32
Like I wouldn't be aware of that.
35:34
And so it's totally possible that a lot of deal clients just don't know that this is going on and they don't care and they're like, well, you gave the example earlier off air like tires.
35:48
Like if you went to the like for people in tech, this is the biggest story. It is the biggest story. It's so dramatic.
35:53
the the year so far, even even though you know Monday night you get this like $40 billion biggest venture round ever.
36:00
Who knows if that's you know completely real or not, but uh still like this is the craziest story ever.
36:09
It's YC on YC violence, right? Crazy.
36:12
Like talk about talk about being in a rough spot.
36:13
If if you're Y Combinator right now, you're you're looking at two of your darlings uh just sort of duking it out in a very sad way.
36:20
Uh but but the example you gave was tires.
36:23
Kind of disagree with that actually because oftent times competition is for losers.
36:29
You want one power law winner.
36:29
So the value the value of a single really concentrated winner might be higher and higher margin anyway. Sorry. Yeah. Yeah. Yeah.
36:39
But I I again I don't believe that a deal with hundreds of millions of dollars in revenue is going anywhere. Yeah.
36:44
like they they have tons of, you know, national multinational companies working with them.
36:49
It's going to be a big, you know, business, I think, for a long time.
36:52
Um, but my example of the tires. Yeah.
36:56
So, the tire example I thought was good.
36:57
If you go if you work in the tire industry and Michelin and Bridgestone are doing corporate espionage on each other, you're like, "This is crazy.
37:06
We've never seen anything like this."
37:08
Like, it's like you're fixated on it with your friends.
37:11
But then if you go to like if I went to my mom and I said, "Hey mom, like I saw you have Michelin tires.
37:15
Did you know that Michelin was stealing from Bridgestone like their rubber, you know, uh supply chain?"
37:23
And she would be like, "Okay, sweetie."
37:27
Like that's like, you know, like you know, I'll keep that in mind.
37:31
And then she's replacing her tires in a year and she's like doesn't even remember. Yeah.
37:37
Unless it actually affects the client, like the way FTX locked your funds or Theronos was giving you the wrong information.
37:43
But if there's just if there's just chaos at the top and you never even knew who the CEO was, you might just be like, "Hey, I'm not going to rip out my HIS system.
37:52
I'm just going to stick with what's working."
37:54
At the same time, it's got to be the best time in history to be a RIP sales rep.
37:58
Can you imagine sending those emails?
38:01
Hey, I saw that you're a deal client.
38:03
Did you see the latest affidavit about the spying thing?
38:07
I'd love to hop on the phone and tell you about Ripling service.
38:09
Like they must be having a blast selling this product.
38:11
The sad thing here and I'm sure the frustration for the deal team. Yeah.
38:15
And the shareholders is that deal despite the spying, ignore the spying, has executed phenomenally and has built a one of it's one of the most impressive revenue ramps. Yeah.
38:29
That we've seen in the last 10 years.
38:33
and they had a big lead over Ripling.
38:36
Sure, I don't know what their growth rates look like exactly, but the spying thing reeks of desperation and it didn't feel like they were quite in a desperate situation yet, right?
38:47
No, I these markets are huge.
38:49
Even if Rippling and Deal just feasted on ADP and Paycom and all these big federal providers, they could have each eaten, you know, another, you know, 500 million of ARR a year for a very long time. Both been totally fine.
39:06
And now it seems very unlikely that that this company is going to be founderled uh you know you know by by you know the end of this month I imagine.
39:16
I just don't know how you how you let this go.
39:20
I wonder if there were any any ser like I wonder what deal was doing against ADP like what was their strategy to beat Paycom, Payloity, um any of those like larger public payroll companies because to your point I think that really is somewhere where
39:38
you could just like feast on the market cap for a very long time and uh probably not as aggressive of a counter espionage effort as Parker Conrad who who clearly has taken deals Bill seriously as a competitor for a very long time. Um he's
39:50
Um he's like the Yeah, he's the hornets nest.
39:55
You probably Yeah, when you look at their product strategies, right, Ripling is the original compound startup.
39:58
They they did R&D for years I think before they actually like went to market with their product.
40:05
And RIP uh deal started with a simple simple idea enable glo global payroll complicated you know sort of uh actually underlying product and infrastructure to do that.
40:19
But then they both were just converging back, you know, they sort of started in their own lanes, got up to hundreds of millions of revenue, and then started aggressively converging onto the same core opportunity, right? Yep.
40:32
Um and uh yeah, so these companies were just always destined to um collide. Collide collide. They did.
40:38
I liked Will Manitus' take here.
40:40
He says uh talking about deals, CFO using code words and phrases to coordinate payments with the spy.
40:48
Send that watch to London.
40:48
and the buyer is happy, etc.
40:50
Will says it is a useful law of human behavior that whenever you're engaging in something your heart knows is wrong, your brain tries to rationalize it in narrative terms.
41:01
The second you find yourself using code words, you're doing something wrong.
41:06
Speak simply and speak truthfully.
41:08
I thought that was a good take. Good take, Will.
41:13
But code words can be fun.
41:13
Uh uh especially when you repurpose other people's code words. Yes. For your own.
41:20
Well, those are just memes then.
41:20
Uh I liked Andrew Reed's post.
41:22
He said, "Paid man's and ETH on blockchain.
41:25
com sounds like straight out of a UK rap song."
41:32
You can I can always count on UK rap to tell me how many people were in the car. That's funny. You like UK rap? Yeah. Stormy.
41:41
We were listening to the Storm in the studio last year.
41:42
paid mans in ETH on blockchain. com blockchain. com. It really so silly. Yeah.
41:47
Josh uh Pacini says this one went super viral by the way.
41:53
You're like James Bond, but you only make 60K.
41:55
You don't get a gun and you steal B2B SAS secrets.
41:58
Uh not not the best trade. Yeah.
42:01
Um but yeah, Europe Europe honestly came like took some brand damage here. Yeah.
42:09
If you're willing to spy for 5k euros a month, gota get the economy going, guys. Risking it all. Risking it all. Yeah. What are you doing?
42:19
Yeah, I'm sure Deal Spy massively regrets his actions and I'm sure everybody involved does except Parker. Yeah.
42:27
Whenever there's a crime Parker, wartime wartime CEO for sure.
42:29
Uh yeah, whenever there's a crime, like you know, there's always, you know, there needs to be accountability, but at the same time, I think there needs to be some empathy.
42:39
like this is a frustrating and sit and and difficult situation for all involved and I think you know I just hope that there can be a resolution that where like there's some sort of uh resolution and and we're closing the book on this chapter of tech history in a meaningful way across the board.
42:58
But I'm sure there'll be a lot more news related to this over the next few weeks and next few months.
43:04
The story is moving incredibly fast.
43:06
This whole thing started just five months ago.
43:07
Uh, and then it broke just I mean the the honeypot happened in February and then in March boom the story dropped and so everyone's been moving very quickly here and uh it's been it's been fascinating to follow. Moving quick. All right.
43:23
Well, we should move in to the next story. Yes.
43:24
Tesla's global vehicle delivery sank 13% in the first quarter.
43:32
Recent surveys have shown an erosion in the brand's appeal, especially among Democrats in the United States.
43:36
And so Tesla was putting up massive numbers for the last two years, somewhere between 400,000 and 500,000 vehicles every quarter.
43:46
In Q1 of 2025, Tesla delivered 336,000 vehicles. Still a lot of cars.
43:54
Um, but a 13% fall is nothing to ignore.
43:58
And so you got to dig into it.
43:58
And I was always wondering if there was going to be, you know, obviously there's a there's a decline in in interest from Democrats.
44:06
Would that be offset by Republicans who now like the brand?
44:11
Well, we kind of have the answer at least right now.
44:12
That that demand has not The issue is the average Republican that that has switched and said, "I'm a, you know, turned to an Elon fanboy loves Ford Raptors."
44:27
And that's the big challenge. Yeah.
44:27
It's like no matter, you know, even if they they think they're on team Elon now, the Ford Raptor is still probably, you know, the greatest truck.
44:35
I still think that's an opportunity though because there's no reason why Elon and Tesla couldn't build something like a Ford Raptor, a Ford Raptor R, like a lifted truck.
44:41
No, not the Cybert truck because it needs to have it needs to have an combustion engine for sure.
44:48
Uh, and it needs to have, you know, you need to have an option on the Tesla configurator to say like, I want to check the I'm rolling coal button and then it just has the massive smoke stacks out the back.
45:00
Uh, it needs to have a really a really aggressive engine note.
45:04
These things are important to the new customers of Tesla and I think Tesla needs to adapt.
45:08
Um, but let's dig into it at the Wall Street Journal.
45:12
Um, there's further evidence that a growing consumer backlash against the brand is hurting Tesla's business.
45:18
Um the analysts were expecting 396,000 uh shipments.
45:23
It came in at 336, much lower.
45:26
Um Tesla shares were up 4% in midday trading Wednesday following the release of its latest delivery figures.
45:32
Fascinating that it went up, but I guess the the the market was expecting even more of a sell-off.
45:36
Uh Musk's active role in the Trump administration and vocal support of four far-right parties in Europe has made Tesla a target of political protests and boycots in recent months, including in some cases by once loyal Tesla owners.
45:47
Yeah, it's Elvon's probably looking around like now watching the stock pop 5% being like, interesting.
45:57
Uh but it's possible this is more of a reaction to uh China. No.
46:05
Oh, the news that that he may be leaving the White House. Oh, sure.
46:07
So, if he goes if he goes deeper into just like I'm back in just the tech world, that would certainly offset things.
46:14
Yeah, it seems clear that uh there's a limit to his there's some sort of limit to how much he can multitask and I would uh imagine that Tesla shareholders will benefit from him shifting focus out of the government and back on to sort of so we saw this from Joe Weisenthal.
46:34
took a picture of a computer showing Bloomberg and there's an article in Politico that says Trump tells inner circle that Musk will leave soon.
46:44
Uh obviously just kind of rumor mill at this point but um but interesting if true and unclear what that would mean for Tesla.
46:53
Could the Democrats who have been buying Teslas kind of forgive and forget and move on and come back to the to the uh to the brand?
47:02
brand? I s I certainly think it's possible if Elon wanted that he could go on he's very he's a very good communicator he could go on a press tour and say you know like hey like yeah I'm I'm actually just really focused on cars right now and you know I I was thinking about this like Tesla should be the most nonpartisan vehicle in the world because it's it's electric so it appeals to
47:27
Democrats and it's built in America and so it appeals to Republicans and He could, if he was purely focused on that and didn't care about the politics stuff, he could have he probably could have gotten the Tesla brand to a position where it was loved by everyone in the same way that like Nike is loved by both Apple that these are very bipartisan brands, nonpartisan brands. Um, but I think he really did think that
47:48
Um, but I think he really did think that this uh he was a true believer in the in this idea that the 2024 election was deeply important and it was worth him coming off the sidelines risking everything to move Washington in a different direction and he did that and now he kind of you know there's going to
48:05
be some like we were talking to I think we were talking to Senro about this like like what is the net effect of Elon's going political like will it be good or bad for him like and it's like okay what are we talking about here like aggregate net worth like some of his companies might do better, some of his companies might do worse. We have to like add all
48:20
We have to like add all those.
48:23
I think if he was running the calculus, it would be like this is probably shortterm bad. Yep.
48:26
But if I can be effective and sort of change the course of history with the country. Yep.
48:35
Then it will be net good in the long run. Yeah.
48:36
Um but certainly it would have been hard to argue that going in short term was just going to be default good for everything. Yeah.
48:43
I mean, you you could even imagine it's like, okay, so what if the work that he does winds up streamlining the FDA, speeding up Neurolink development and Neurolink, every single person winds up getting one and they cost $50,000 and all of a sudd Oh, really?
48:59
They're opening up a patient registry. Fantastic.
49:02
But there was two poly markets I want to look at.
49:05
So, right now, Elon uh out of Trump administration before July is sitting at 50%. 50%.
49:10
And then out of the admin in 2025, uh, you know, sort of basically by the end of the year is at a 76% chance. Wow.
49:21
Um, so I also wonder what that will mean because it's totally possible that so people have been predicting like the Trump and Elon relationship is going to dissolve and blow up. It's going to blow up.
49:32
Like they're too they're they're both two hard charging aggressive figures. It doesn't make sense. They just can't last.
49:38
That's been the narrative, right?
49:39
Um, but it's possible that they that Elon is no longer a member of the staff of the White House. Like, he doesn't have a.
49:48
gov email, but they're still friends.
49:50
Yeah, that is a that is a possibility.
49:52
I don't know if that's where it's going.
49:53
I really can't predict any of this.
49:54
I'm not really tapped in in DC.
49:56
It would be very short-sighted for both of them to blow up the relationship. Yeah, I think so.
50:02
It seems like it's been pretty mutually beneficial. I don't know.
50:05
I mean, uh, no one expected them to win and then they did.
50:10
So, you know, it seems like it's good.
50:11
Um, sales from China, which exports to foreign markets, fell 49% in February, but fared better in March after it started delivering the refreshed Model Y.
50:20
I saw the first refreshed Model Y on the street the other day. Looks great.
50:23
Uh, in China, uh, according to China Passenger Car Association, the company sold 78,000 China made vehicles in the month, down 11% in the same period last year.
50:34
Despite the decline, Tesla climbed back to third place in sales uh in the Chinese car market after dropping out of the top five in February.
50:40
And they have some stiff competition that I'm actually very excited about.
50:44
I I think just from a consumer perspective, seeing some of the demos of the cars and the way the Chinese car companies are pushing things forward is awesome.
50:53
Have you seen that demo of the adaptive suspension?
50:55
So you're going around a corner super hard and it's and it and it's tilting the car so it's perfectly flat and they have a wine glass on the center console and it's not spilling. Amazing.
51:06
Or like going over bumps and and the car is like adapting to the bumps so it's just perfectly smooth.
51:12
There's all these like they do all these like weird features like there's a car that floats. We talked about that.
51:17
Yeah, there's there's a bunch of simple features that just make sense.
51:22
They have hand tracking, so you can be like this and then it'll pull down.
51:26
There's even like this LED bar on the back of some of these cars, so you can send a message to someone in front of you or behind you being like like, "Sorry, like I I I was on my phone.
51:36
That's why I didn't go when it was green." Like you can send that.
51:37
It's all these funny weird things.
51:39
Explosion of of innovation and like testing weird things.
51:42
And I like that puts pressure on our catalyze that. Totally. Yeah.
51:45
Tesla did the same thing. Yeah. The fart. Yeah.
51:48
or like playing video games or playing, you know, all these different things.
51:52
Tesla very much did that.
51:54
And while I absolutely want American companies to win, I do like the idea that there's now pressure to say, "Okay, we really need to stay innovation."
52:04
I want to see Mercedes execs look at these videos of these Chinese manufacturers and be like, "Okay, they're like way ahead of us on so many dimensions. We need to catch up."
52:16
I mean, I'm pretty sure the I don't know if it's a Yong Wong U8, but the CEO of Ford was driving a Chinese car like daily for like weeks because he was like, "I need to understand what's going on over here and like we need to figure this out at this company." Uh, yeah. Yeah. Yeah.
52:27
A little bit of little bit of that.
52:29
Um, so in Germany, home to Tesla's European factory, new vehicle registrations fell 76% in February, compared with the same period last year, according to the country's motor transport authority.
52:40
In the US, sales fell 2% in the first months of the year, according to um research from firm Wards Intelligence.
52:48
And so that's not that much of a drop considering that I think of Elon as being more politically controversial in America than I mean maybe in China, maybe in Germany, but it seems like it's a little bit more distant there. But I don't know.
53:00
I think people make car p I think these purchases are super considered outside of somebody's home.
53:10
It's one of the most expensive decisions that they make and you know or costly sort of products that they buy.
53:17
And if you're looking at buying a car, you're looking at the cost.
53:22
If it's an EV, you're looking at the range, you're looking at the features.
53:26
Yeah, maybe you care a bit about the founder, but that's only one factor, right?
53:30
And so, right now, Tesla is basically giving away these cars.
53:35
You can get a you can get a Tesla Model Y for 300 bucks a month. your phone bill.
53:39
Yeah, it's it's not far off from your phone bill.
53:42
So, it's an extreme and and who knows if that's at all profitable. Yeah.
53:46
But it's and it's extremely solid offer in the market.
53:49
And the reason for the sales decline is despite these sort of massive incentives, every other manufacturer has overproduced EVs, so they're also giving these things away.
53:59
You could get a Rivian pickup truck last year for like 500 bucks.
54:02
Like, it's like it's like it's great.
54:05
They're giving these things away.
54:07
Um and uh and so yeah, it's a amazing time to be a buyer in the car market.
54:13
You have a lot of options and the sales de decline like I'm sure was anticipated by analysts, right?
54:18
Tesla basically had a monopoly on on quality cheap EVs for a period of time.
54:23
It also feel like felt like they were reaching saturation like every car on the road in LA is a Tesla.
54:29
LA is a Tesla. like at a certain point like I understand the monopoly power that acrru to the iPhone and the integration there and everyone wants the blue bubbles and everyone it's nice if I have an iPhone you have an iPhone we can do airdrop cars it's a little bit less
54:45
so and I feel like cars are still a little bit more of like the status symbol what it says about you the difference of the the Ford Raptor driver versus the Audi R8 versus the Lamborghini like they all say slightly different things and at a certain point
54:59
if every single person is driving a Tesla, which is like this appliance car, there's just going to be some people in the world that say, you know what, I I will accept a lower quality of car even on a price per hour, horsepower, any any ratio that you want to measure, like quantitatively a
55:19
worse car, just to express myself and actually say something about myself and say, "Hey, I I have a convertible like and that says something about me or I I I have a I have a And even if I don't need that space, I have it because like it it makes me feel like a cowboy and I like that. And like
55:35
And like if Tesla's not offering that brand feel that will drive cars cars are so emotional that people use them.
55:44
It's like a handbag for women or a watch for guys as a way to express yourself.
55:48
Some people still just say, "I'm going to be practical.
55:51
I'm going to buy the cheapest best option."
55:53
and other people, you know, do what I did at one point and bought a lifted Ford Raptor because I just like wanted to live out my childhood dreams. Exactly. Exactly. It's great.
56:02
And I had a great time with it.
56:04
And then I It was so funny driving a Raptor because I felt like I'd go to a meeting and if if the person I was meeting with saw me pull up in the Raptor, I had to like explain like, well, I'm actually like driving it like kind of ironically.
56:14
I'm kind of driving this more for like my like 10-year-old self more than my current self.
56:19
I just want you to know that I'm not like really a Raptor guy, but I kind of respect completely murdered out and it's tinted and um anyways. Yeah, that's great.
56:29
Uh so in California where Teslas are among the bestselling vehicles, the new vehicle registration of Teslas fell 11. 6% in the state.
56:38
Obviously California is like a D plus30 state and so very democratic maybe more affected there.
56:42
But also there's just saturation happening.
56:43
Um, the market cap of Tesla reached a high of 1.
56:48
5 trillion in mid December.
56:48
Uh, in the weeks after the inauguration, the shares, the price per share returned to pre-election levels.
56:58
There's also been Vanization that was their all-time high. Yeah.
57:05
And so uh now Musk is trying to refocus of investor attention away from car sales and onto its driver assistance software which it calls full full self-driving supervised and its Optimus humanoid robot technologies he has claimed could one day boost the automaker's market value to as high as $30 trillion. You'll love to see it.
57:25
The humanoid robot market it's it's also fascinating because everyone is so skeptical about it.
57:33
like the the the anti- Elon people are like it's TA operated, it's a guy in a suit, like it's nowhere near any commercial scale.
57:40
And like that's probably true.
57:40
Like that like the Optimus does not seem to be something that's going to be shipping anytime soon.
57:45
But at the same time, like we've seen the Chinese humanoid robots, like they work. You can just buy one.
57:52
Like it can't do everything, but like it's out there. It exists.
57:55
It's not some sci-fi we have no idea how to do time travel and it's like people are writing academic papers about how one day you might be able to make a humanoid robot.
58:06
It's like Boston Dynamics exists.
58:06
You can see the Atlas robot running around.
58:10
You can see the uh the and you can actually get a tree robot dog for under three grand on Amazon. Yeah.
58:16
And so and so like Unree is shipping these things.
58:22
They're not great, but it's like can can Tesla copy that and just copy paste that? Absolutely.
58:26
Can even figure Brett Adcock like like can they just set up a plant that copies unitry?
58:33
Like that doesn't seem that crazy.
58:36
Uh even the legacy car makers were eventually able to make electric cars that were in the same ballpark as Teslas.
58:43
Like the Ford Mache is like it has similar range, similar performance.
58:48
like a Tesla fan would say like, "Oh, it's like, you know, too expensive for the power and you don't get the self-driving stuff."
58:56
And it's like, "Yeah, that's all true.
58:57
It's it's but it's 80% of the way there or 90% of the way there."
58:59
And there are some electric cars that give you a better experience than Tesla in certain in certain categories.
59:05
Like the Rivian, the Rivian has a full-size SUV. Tesla does not.
59:10
Like they they have the crossover.
59:11
And so, and and even like uh the the TYON, the TYON comes in a in a wagon configuration.
59:19
Like Tesla just doesn't have a a wagon, which I think looks fantastic. I like it a lot.
59:25
And and also like Tesla doesn't sell a convertible.
59:29
Like if you want a convertible electric car, like you're out of luck with Tesla.
59:33
And so there's all these ways where where where where you could kind of like slice off the market, figure something out, but like you know these uh these humanoid robots like they do exist.
59:42
And so even though it feels silly to think about Tesla as like oh yeah they're going to win in humanoid robots, it's like well they're probably going to do something there and they're probably going to make it Yeah.
59:53
They're probably going to make something work.
59:54
Uh and so I'm I'm I'm very interested to follow it.
59:57
Uh it's it's it's fascinating to see how this pencils out and it'll be interesting to see how Elon kind of reintroduces the company or if he does.
1:00:07
He had Trump, you know, pushing like, "Hey, go buy a Tesla."
1:00:12
There was those note cards.
1:00:12
You saw that the notes of like the Tesla costs $60,000 this and that.
1:00:17
Um, is there a way that he can beat the Ford Raptor at its own game without putting an ICE engine in, which I think might he might need to do?
1:00:28
That would that would go crazy. Cybert truck. Yeah.
1:00:30
Internal combustion engine.
1:00:33
He needs a Hellcat competitor.
1:00:35
He needs a Dodge Charger competitor. something that trades.
1:00:39
Uh I mean, one of the problems with with Tesla, I'm sure, I I'm sure one of the problems with Tesla is like is like there's too much technology in that.
1:00:49
So, you can't really like trade it on Facebook Marketplace just like here are the keys like I don't have a title because like whoever act actually owns it will be able to just like it has lowjack basically because it's so connected.
1:01:00
Uh and they could just disable the car.
1:01:02
But if you if they take some of that stuff out, they put in a V8 and uh maybe throw some superchargers in there. Yeah.
1:01:09
Really get the secondary market pumping.
1:01:11
Get the secondary market pumping.
1:01:12
Get the thieves involved.
1:01:18
Anyway, we're having some fun.
1:01:18
That was always a good bit of ours. Yeah. Yeah.
1:01:21
You Well, Tesla sells products online.
1:01:25
They sell cars, but they also sell uh stuff like merch.
1:01:28
They'll sell tequila from time to time, you know, bunch of, you know, hats, things like that.
1:01:32
And what should they use for sales tax compliance and auto numeral baby? They should go hq.
1:01:39
com benchmark series A sales tax on autopilot.
1:01:43
Spend less than five minutes per month on sales tax compliance.
1:01:47
They work with thousands of high growth companies.
1:01:49
And if you were selling products online or you're a SAS business, uh, go sign up for Numeral.
1:01:56
And uh just for old times sake, tell them the technology brothers sent you.
1:02:01
They'll know they'll know what you mean.
1:02:03
Uh and there's 25 there's 25 states Yeah.
1:02:06
that are taxing software sales. Yeah.
1:02:08
And uh if you have any type of scale with your SAS business uh I'm sure you're uh dealing with this already.
1:02:14
So go go check out numeral.
1:02:16
And this monitoring feature is is actually genuinely very interesting if you're a startup and you're growing because oftentimes you don't have to pay sales tax until you hit some sort of threshold.
1:02:26
And so their example here is like they're monitoring your sales in New Mexico.
1:02:30
When you hit $100,000, you're going to need to register and start paying.
1:02:33
But as long as you're under that, the the state doesn't care, which is great because the state you it's cumbersome to file these new tax uh these new sales tax reports.
1:02:41
So, they're going to they're going to, you know, track that and then help you file that as soon as you need to.
1:02:47
So, I mean, I've been caught so many times that like I can't even count where it's like, oh, I, you know, we we hit the threshold, then we had to go pay a lawyer to figure it out and like do all those things.
1:02:56
Like, this is a uh re a really great product. So, go check it out. Numeral HQ.
1:03:04
Anyway, uh let's move on to uh uh watch news. Some big watch news. So, we got Quaid.
1:03:12
We got Quaid coming on, co-founder of Bezel. He's calling in today.
1:03:16
We're going to be breaking down what's happening at the world and wonders.
1:03:20
Basically, every watch company launched new uh watches.
1:03:22
Uh the one that I wanted to highlight here is Vashron Constanton uh has released the most complicated wristwatch ever created.
1:03:29
Uh the Solaria Ultra Grand Complication featuring 41 complications and 1,512 patent applications.
1:03:38
And it tells you everything like, you know, sunrise, sunset, moon phase, uh, day, month, year, time, you set alarms, like all these different things on it.
1:03:50
And the funniest thing is, I'm sure this thing costs like a million dollars.
1:03:53
But I was looking at this and I was like, yeah, like that's actually like really useful stuff. Like I need this.
1:03:57
That was my reaction was like, yeah, this is like totally justifiable.
1:04:01
like like this is this would just like just practically just practically high output you know podcasting live streaming you just kind of need this level of performance. Yeah.
1:04:12
I was like I'm sure they charge a lot but like look at all the complications like you kind of need this.
1:04:15
I need to know where the tides are on my wrist at any with a mechanical device.
1:04:20
I can't use my phone for that.
1:04:22
Um but I mean this is a fantastic watch and it looks very cool and it's also pretty huge and on the back they have constellation charts. So, do you see this? It's insane.
1:04:32
You can see where where the what the night sky looks like.
1:04:34
We've been saying this, but Vashron is we believe Yes.
1:04:39
going to go on a generational run, we think.
1:04:41
So, it's already on the run. It is. It's fantastic.
1:04:45
Well, I'm excited to have Ryan on.
1:04:47
He is going on uh with Kramer later today and so I think we should help him workshop some just crazy tips, crazy bangers, crazy bits. Yeah. You just want to go big.
1:04:57
You want to go extreme when you're on there. Yeah.
1:04:59
Um I mean we should set set the table a little bit.
1:05:03
Um basically uh Trump is giving an a uh a press conference today at 400 pm Eastern.
1:05:10
So in exactly one hour this should starts uh this should start.
1:05:17
Uh tariffs are looming but uh Trump has called it liberation day but the the stock market is up maybe calming fears that there will be really really aggressive tariffs.
1:05:28
The yield on the 10-year Treasury note ticked up as well, on pace to snap a three-day streak of declines.
1:05:33
Gold prices rallied, sending the precious metals towards another all-time high.
1:05:37
Uh Trump has declared April, April 2nd, liberation day for US trade policy.
1:05:42
He is due to announce the contours of a sweeping tariff plan at 400 p. m.
1:05:46
Eastern in a Rose Garden address.
1:05:49
Uh the Wall Street Journal will stream the president's uh tariff comments live.
1:05:53
The tariff fight has ignor ignited worries about a slowdown in economic growth, driving a steep selloff in shares of small companies after weeks of unease about how Trump's tariff plan will shake out and which industries they will reshape.
1:06:05
Investors and business leaders around the globe are hoping for more clarity.
1:06:09
And that's the big deal here is just clarity.
1:06:13
People want to know what to expect.
1:06:13
You can't move a whole factory in a day.
1:06:15
It takes years to reshore manufacturing capacity and the bigger the company, the harder it is to move.
1:06:23
This was this was Sean Frank's, you know, big point, which was, you know, uh even if I want to react to tariffs, it's going to be, you know, damaging to my business and every other e-commerce business in the short term.
1:06:36
And so Trump clearly wants to make big change, but uh there's still, you know, uh a lot of companies caught in the crossfires in the short term. Cool.
1:06:48
Well, we got Ryan in the studio. Welcome, Ryan.
1:06:50
Ding ding ding ding ding ding ding ding. Are you not traveling? Was yesterday. I'm back. You're back. Congratulations. Enjoy. Uh, Home Sweet Home.
1:07:01
Uh, first, I mean, we got to ask you, uh, are there are there any spies?
1:07:06
How are you dealing with uh counter intelligence, counter espionage these days?
1:07:09
Uh, there's always spies. Yeah. Um, we're good.
1:07:13
We uh we try to make sure that our codebase is super buggy, so if you steal it, it just work.
1:07:18
That's my advance tactics.
1:07:20
my advance tactics. Do you think this is a symptom of like just just zooming out from you know the the deal rippling thing and anything that's happening at flexport like do you think this is a symptom of like tech becoming a little bit less green field a little bit less
1:07:35
positive sum there's like two or three majorbacked companies in the exact same category now and it's less of like the anointed power law winner who's going up against some company that's so sclerotic that there's just it's just it just oh you're just stealing billions of market cap app all day long and it never really matters. So, you're not not it's not so
1:07:54
So, you're not not it's not so so much of a knockout dragout fight.
1:07:57
Like, how do you think about this in the context of like the history of Silicon Valley and like your career? Oh, I don't know.
1:08:03
I mean, you know, our our issue was like I I think very different than deals like that was like two arch rivals going at each other and like someone you know that that was that's crazy.
1:08:12
I just read the deposition. It's crazy, right? Really crazy.
1:08:17
Our issue is very different.
1:08:19
There was a couple of employees who just like made some bad decisions, download a lot of stuff on their way out and the company they started is pretty insignificant.
1:08:26
My my general view is never never punched down, but when you see someone committing ultimately a crime. Yeah.
1:08:33
Uh yeah, there's a sense of moral righteousness that needs to happen, some justice in the world.
1:08:39
So yeah, but it's quite different.
1:08:41
I mean, we're not this company is not a threat to Flexport the way maybe deal is to Ripling or vice versa. I don't know. But Oh, yeah. Yeah. Yeah. That's very different.
1:08:48
Uh so yeah, I mean on tariffs like what are you expecting?
1:08:51
What are you looking for?
1:08:52
What do how do you think it's going to go down in an hour?
1:08:56
Um it's Yeah, I don't know what to expect.
1:08:59
I feel a little bit like, you know, um maybe you're in Florida waiting for a hurricane and about to hit Florida man. I don't know.
1:09:05
We should get our American flag out and stand in the wind and enjoy the show or be horrified and go, you know, get in your car and try to drive a thousand miles away.
1:09:15
Um there's no escaping in your business.
1:09:17
Yeah, there's no escaping. It's going to hit hard.
1:09:21
Um it's really ugly for our customers already.
1:09:23
I mean, they've already on the the China tariffs.
1:09:25
It's hard to imagine how they go much higher really.
1:09:29
Um because of the they they added 20% to what was already 25%.
1:09:36
And then the Venezuela stuff hit today, I think.
1:09:39
Um which is another 25% on top of that because China imports Venezuelan oil. Oh wow. What am I at? 45 plus 25 70% tariff.
1:09:48
And then if you do steel or aluminum, which if you have that component, you're you're pushing into 80% duties, go a little bit higher.
1:09:55
I mean, at some point you're just like, oh, okay.
1:09:59
So, I don't know how much worse China can get. It can get worse.
1:10:04
They can they can do whatever they want, I suppose.
1:10:07
Um, the tariffs on other countries is the big wild card here.
1:10:09
what other countries get.
1:10:11
You know, you've already seen Israel and Vietnam both went to duty-free on American imports. Uh so we'll see.
1:10:18
My my impression from having talked to a cabinet secretary last week that what he told me was that this would be April 2nd today is the start and not the end process.
1:10:31
And he means that I think in a positive way for companies that they're going to come out with a big bang today.
1:10:38
it's going to be ugly and then he would expect that countries will come to the negotiating table and make deals to bring the tariffs back down.
1:10:48
But they want to show send a very clear message that they're dead serious about, you know, that they they mean business and then he expects countries will will will come to the table.
1:10:58
Um, but some may some may read it the wrong way and kind of retaliate with their own tariffs and then the administration may escalate further.
1:11:07
We've seen that uh as a pattern.
1:11:08
So my advice to all the presidents of the world is to go read the art of the deal and uh not that hard to figure out how these guys work in my No, that it's like similar to FF.
1:11:18
It's like how does FF make investments?
1:11:21
You know, read zero to one.
1:11:24
Yeah, that's basically it. It's all out there.
1:11:26
They're still doing the playbook.
1:11:28
Are you do you think is this already happening or is it going to happen?
1:11:32
Companies sort of dying before they can onshore manufacturing.
1:11:35
Is that is that something that you're super worried about or are people just battening down the hatches like you said Florida style and just figuring out a way to you know obviously everybody wants to survive?
1:11:47
Uh but are we seeing sort of like an an extinction level event uh within e-commerce yet specifically? Certainly not yet.
1:11:55
Um I I it's very hard to say.
1:11:59
I mean the the reality is tariffs alone won't do won't bring most of these industries back to the US.
1:12:05
the the US dollar is just too strong.
1:12:07
I was talking with a company yesterday that imports garlic. Mhm.
1:12:09
I was like, wait, I thought California like has the best farmland in the world for growing garlic.
1:12:15
Like, why do we need to import it from China, but it's just even with the tariffs, it's cheaper to import the stuff from China.
1:12:22
And it's the you know, our soil is better than theirs.
1:12:26
Like California is the Gilroy is like the garlic festival.
1:12:30
I mean, this the best place in the world to grow garlic.
1:12:31
So, but the US dollar just being so strong as the reserve currency makes it like no matter what you do almost with tariffs, it's still cheaper to buy from another country.
1:12:42
So, I think that tariffs alone won't do it.
1:12:45
And and nobody's there's no political will to make the dollar cheaper.
1:12:49
But if you want manufacturing to come in the US, the US just can't it just can't be that we're that much richer than everybody else on a dollar basis because it's kind of big. Yeah.
1:12:58
But haven't haven't some people argued that with extreme enough tariffs it would you know get people to tr you know try to just move off the dollar maybe it's impossible there's got to be a number yeah it might move off the dollar which might actually cause their problem
1:13:11
not the way they intended to be I'm not like I've always been a macroeconomic skeptic it was I'm either too smart or too dumb to for macroeconomics I'm not sure which uh I couldn't figure it out they would have all these advanced it all seemed more complicated than they were it out to be. Uh, so you never studied is ISLM? All
1:13:29
Uh, so you never studied is ISLM?
1:13:29
All the different charts and graphs interact inter like the only class I ever got a bad grade in in college was macroeconomics. Yeah.
1:13:39
Uh, is there is there hope that um I mean it seems like obviously there's like the micro like what is the actual tariff rate in the country that I'm operating in?
1:13:50
But then the real hope from the market at least in companies seems to be give me a framework and a real understanding of what the future's going to look like and does is is there a chance I mean it sounds like we're maybe even just starting that process of really understanding how the business community can respond to like a a larger trade policy strategy and like is that what people are pushing?
1:14:21
for is that is it really is it really more about um just clarity over the long term? For sure.
1:14:29
Business needs certainty and clarity and it's really hard.
1:14:31
These supply chains are multi-year maybe ideally decade plus investments that you're you're making and how you're going to set up your supply chain.
1:14:40
And if you if it's changing every single week like you're just paralyzed.
1:14:43
You can't make any decision at all.
1:14:44
I think Canada stuff's pretty harmful in that way because if there's going to be tariffs on Canada, then there's going to be tariffs on Malaysia, Vietnam, India, and everybody else.
1:14:53
Like, so it makes it really hard to to make any decision.
1:14:57
Let's say a company finally says, "Okay, it's very clear we're going to have to move our manufacturing out of China.
1:15:01
This administration and the Biden administration, by the way, was also um ratcheted up the first Trump administration's tariffs on China.
1:15:08
They didn't lower them at all."
1:15:09
So, both parties are aligned on that.
1:15:12
So, if that's clear and you're ready to make that move, then you go, "Okay, where do we move it to?"
1:15:16
Unless you're ready to move to the US, there's no ability to make a decision at all right now.
1:15:21
Um, do you think it would be better to take a more gradual approach to implementing these uh tariffs, I'm just thinking like instead of saying, "Hey, there's a 24% tariff coming in on this country," it's like, "No, we're going to raise the tariff 1% per month for the next two years."
1:15:38
And so, you know exactly where it's going.
1:15:40
It's not going to just just destroy your profit margin today, but if you don't figure it out in two years, like you probably will be done.
1:15:46
And so you're signaling to the market exactly where it's going to go.
1:15:50
But it seems like I've never seen a policy like that rolled out.
1:15:53
Yeah, I've heard they were talking about that.
1:15:55
I mean, I think that was one of the things that Trump or Lighheiser, one of the admin people close to the administration said they were going to do during the campaign.
1:16:05
No, I think it was Bessant who said that, Treasury Secretary.
1:16:06
Um, that would make sense to me.
1:16:09
or even just giving people, you know, six months notice of this is coming, a year notice.
1:16:12
Like some of the policies they've enacted have said, "Okay, this kicks in tomorrow or next week."
1:16:18
And you're just like, "Oh my god."
1:16:20
Like I have a friend who's importing uh stuffed animals and he bought $100,000 worth of stuffed animals and while the container was on the water, the duty rate went up and he got hit with his $20,000 bill. He didn't plan. I know.
1:16:36
plan. I know. like ah brutal you know and so brutal you need some notice period that they haven't done that this time around I think yeah gradual ratching it up but ultimately just providing clarity like where are we going to be um it's it's also the ultimate challenge of the US system is you know here at least the two parties are mostly aligned at least when it
1:17:00
comes to China we'll see about other we'll see what policies they actually roll out but the two parties are mostly aligned on trade they both hate trade right now Um, and so at least you have some longer term view of what it's going to look like if but in the US system where it can totally flip overnight, it makes it very makes us very hard to deal with as a country. I mean I uh I think
1:17:18
I mean I uh I think this is one of the things that has made it difficult for a deal like with Russia for example.
1:17:25
I mean the two parties are just polar opposite in policy.
1:17:29
So, how do you how can they make a deal with either party when it might just flip in four years to someone who's got it who won't hold up the deal?
1:17:36
Yeah, I've seen I've seen the uh like the flexport 747, there's one right behind you.
1:17:41
Uh if if onshoring really happens and there's major major production shifting to the United States, what does that look like for flexport?
1:17:50
Are you going to get into like more rail, more trucking?
1:17:51
Is is is the market even big?
1:17:54
H how would you think about that?
1:17:57
I would imagine there'd be an expansion of the US opportunity, but like what what does that look like for Flexport specifically?
1:18:01
Yeah, winners and losers in different parts of our business for sure.
1:18:05
The air freight we air freight business, a lot of our we do a lot of e-commerce products from China to the US.
1:18:10
Of course, that's about 50% of all the air freight in the world now is coming out of Chinese e-commerce.
1:18:14
And so that that is at major risk and the price of air freight will probably collapse.
1:18:21
That that would be bad for our air freight business.
1:18:22
Um, our customs business is already booming as we help we provide a lot of advisory services to help country companies figure out what this means for them.
1:18:32
Uh, how to mitigate, minimize duties, be compliant, um, get refunds on duties.
1:18:37
Every year, even before all these new tariffs, seven billion dollars was going unclaimed in refunds that people are owed. That's right. That's crazy.
1:18:45
So, we got people $140 million worth of that uh last year or no, that's our goal for this year.
1:18:53
Um, but that's still a big market.
1:18:53
You know, we should be 10 times bigger or or even more than that.
1:18:57
Um, so that part of our business is booming.
1:19:01
Trucking, we do about 200,000 truckloads a year. Mhm.
1:19:06
Domestically, moving trucks uh that have nothing to do with the international freight.
1:19:10
That would probably grow.
1:19:10
Uh, we'd want to get more, we will be getting more into kind of trade with US and Latin America, US and other parts of the world.
1:19:20
I I I don't really worry too much about the macro.
1:19:22
Like we're still pretty small.
1:19:24
We estimate our market share is about 0. 25%. Wow. Um right now.
1:19:28
So like okay, even if the market shrunk in half. Yeah. We Okay, now we're 0. 5%.
1:19:35
You know, hold on to the business we have, but to all of it. So I I I'm too worried. Yeah.
1:19:40
I have a question about a a market I'm sure you've thought about.
1:19:46
So, we've been having a bunch of, you know, there's a bunch of new defense tech companies emerging.
1:19:50
Uh, you know, they have to move uh big expensive uh flammable, you know, things around all the time.
1:19:57
Is that a vertical that like you guys have looked at at all?
1:20:00
Because I think it's obviously, you know, bunch of compliance issues.
1:20:06
It's it's Yeah, a little bit.
1:20:08
Um, I think you tend to want to be more those guys want to work with people who own the assets. Interesting.
1:20:12
more tighter control security-wise.
1:20:14
Like actually, I heard about this company that does trucking for the DoD or for big defense contractors and they ship missiles and it's like a very lucrative business, but they own all the trucks and we don't we try not to own any assets. Sure.
1:20:29
Very hard to maintain to provide the kind of like ultimate security that one of those companies needs if you're not asset heavy.
1:20:34
So, they'll it's a it's a it's a cool space, but probably not one that we're best suited to play in right now. Yeah.
1:20:41
What about uh what about self-driving trucks?
1:20:45
I feel like we're seeing so many just like the studio Giblly moment, the chat GPT moment, like AI feels so big and yet the self-driving trucks aren't really here. What are the dynamics?
1:20:58
And do you have a timeline for that actually affecting the market?
1:21:02
What's kind of the impact? It'll be huge.
1:21:04
I mean, it's um the Whimo's here.
1:21:08
My Tesla I mostly drives itself now.
1:21:12
Um and Tesla's making a truck.
1:21:15
So, but I don't know how many of those Tesla semis they've really shipped.
1:21:19
And and there's two different problems of the electric truck and the self-driving truck that maybe shouldn't have been conflated.
1:21:26
Like because I think the electric truck actually has more problems than the self-driving truck, it seems like. Yeah.
1:21:29
Um just because of like charging and range and different things that don't make that much sense for a from what I've heard.
1:21:38
I'm not I'm not that close to the physics of it, but the recharging network has just like not been there for it.
1:21:42
Y um it's going to be really huge though and a massive impact on a lot of things.
1:21:48
You know, right now transit time even like a a truck that drives 24 hours a day can cross the country.
1:21:55
I think the law says you can only drive eight hours a day.
1:21:57
So crossed three three times faster where today you would need three drivers and they charge you a huge premium. Yeah.
1:22:03
for that team trucking it's called where you have multiple drivers running shifts and sure and like it's a shitty lifestyle like riding overnight like never getting out of the truck as you cross the country.
1:22:15
Um that is crazy and but you could it would be very competitive.
1:22:18
You could I once drove across the country in 53 hours with four friends just taking turns.
1:22:25
Were you doing Cannonball being hardcore?
1:22:27
Four four broke college kids.
1:22:29
Like there's something about that that sounds like amazing with your boys once.
1:22:33
But I hear I take your point on like a lifestyle.
1:22:35
We've been we've been talking about it. Yeah.
1:22:38
We want to do a race try and get across the country.
1:22:39
I think the record is something like 22 hours which is easy. Yeah.
1:22:42
Over 100 miles an hour the entire time.
1:22:45
Uh very illegal, very controversial.
1:22:48
From Maryland, where I'm from, to Oklahoma.
1:22:53
And actually the only reason we stopped the car broke down.
1:22:54
We were gonna go the whole way without stopping. Yeah. Broke down.
1:22:59
So the 53 hours actually there was a stint while the car was in the mechanic. Okay. I'm ignoring that part. Okay. Yeah. Yeah. Yeah. You cut that out. Yeah. Yeah.
1:23:07
And then we can like looked around a little while. Yeah. Yeah. Yeah.
1:23:12
The real cannonball is from the Red Ball Garage in Manhattan to the Portoino uh hotel in California.
1:23:15
And uh it's been done for years.
1:23:19
Alex Roy was the famous guy who did it originally and then Ed Bolian destroyed the record during COVID when there was no one on the streets.
1:23:26
It's a fascinating story.
1:23:28
You should go check it out.
1:23:28
But yeah, this will be big in trucking.
1:23:30
Um Oh, not you know, jobs aside, it's like I think truck driving is the most number one profession in 34 states. Yeah.
1:23:35
Uh by number of people doing the job.
1:23:38
So that'll be massively impactful.
1:23:44
Um, and yeah, like I think there's a lot of positives for the industry and productivity and stuff, but certainly it's an interesting problem for the for the society.
1:23:52
Yeah, going speaking on AI, you know, something we've talking about on the show is like you had this Giblly moment last week where something that was historically super timeintensive and expensive and costly, like if you wanted this sort of like beautiful handdrawn animation style.
1:24:08
Yeah, you could go on Upwork or Fiverr and get that kind of thing done.
1:24:13
It's not going to cost a ton.
1:24:14
Most people wouldn't even bother to do it.
1:24:16
And I think that we are racing towards like the giblificication of like all goods right on like a long enough time horizon like automation robots will just you'll have sort of an idea for something that you want and in theory like you know you just you know something could be made with no human involvement and that could really drive the cost down.
1:24:36
Now if the cost of a lot of goods goes down over time then in theory there would also be a lot more sort of like a Jevans paradox dynamic where like if things get cheaper people want more of them which means that like we we there's a scenario where like we're ordering 10 times as much ch stuff from China in you know 10 20 years.
1:24:57
How do you think about just AI?
1:25:01
Like it's easy to see how AI is, you know, going to make Flexport a better business by rolling sort of systems out internally and building these sort of customerf facing experiences, but have you thought at all about like how automation broadly can actually sort of like impact like the flow of goods around the world at sort of a more macro level?
1:25:25
Well, um, actually just coming back to the giblification of everything.
1:25:29
So, I'm a, uh, I'm a I'm a published children's book author, you guys may know. That's great. Yeah, there you go.
1:25:34
Big shift and the little digger. I wrote this myself.
1:25:39
It was not written by Chad TBT. It was not illustrated. I didn't illustrate it. I just wrote it.
1:25:42
So, you can write a children's book about 45 minutes. Uh, I love it.
1:25:47
And, um, but the design took a long time.
1:25:50
My designer who used to work at Flexport did this. Yeah. Great. It looks great. Beautiful. Oh, yeah. It's a wonderful story.
1:25:56
Um took him like man the better part of like six or eight weeks to do that. Yeah.
1:26:01
I when the um when ChatBT released their new image model last week, I was like, "Oh, I'm going to write a new children's book."
1:26:09
And I did it in an hour and on my phone.
1:26:11
I could have done it faster if I would have been on desktop and had parallel tabs open or whatever, but on the phone app didn't let me.
1:26:20
But in one hour, I was able to create a really cool book. Uh yeah.
1:26:21
And and and like I think I could publish it and be done.
1:26:28
It's also so cool the customization being able to like make it about these really cool iconic flexport posters.
1:26:36
We have 40 offices around the world and one for each office that like Oh, that's super cool. Well, yeah.
1:26:39
So, usually like iconic from the golden age of like ocean ocean travel liner tunnel. Good prompt for that.
1:26:46
And it I asked the same designer to do it for me.
1:26:48
I wanted these posters like you know I asked him six months ago and he quoted me something I couldn't afford.
1:26:56
So using children effort made them all last night in like an hour and I'm Yeah.
1:27:02
So let's use a children's book as an example.
1:27:03
My son is obsessed with reading. He's three years old.
1:27:05
He could easily burn through five six books a day.
1:27:09
Like he would happily read he'd probably read 20 new books a day if we had 20 new books available in the house.
1:27:15
And he'll read I bet you he'll read even more if he's the protagonist of the story. Yeah. Exactly.
1:27:18
So if like he's a protagonist, it's customized to his interest.
1:27:22
It's perfectly matching his level.
1:27:23
But I also don't want him on screen.
1:27:25
So like there's a world where if like the cost of producing the books drops, books are, you know, 80% less because there's it's just generated.
1:27:33
There's a world where I' I'd order five times as much.
1:27:35
And that means that you're going to be shipping in theory like a lot more goods.
1:27:39
And that's just like for one category, right? Could be. Yeah.
1:27:44
Um and there'll be categories like that.
1:27:46
I I you know, if I wasn't so busy, I would definitely try to set the Guinness Book of World Records right now for whoever wrote the most children's books in the world.
1:27:53
Like that's great right now before they in a 24h hour in a 24-hour period. Yeah. 2,000 children's books.
1:28:01
Uh can we hear a little history of the Flexport Lion and the Generative AI stuff?
1:28:06
And is the Flexport Lion coming back or Yeah.
1:28:10
Well, when Dolly first came out, I you know, I think every company should have a mascot and ours is the lion because he's king of the jungle.
1:28:17
Um, you know, lion probably kill any other animal in the world.
1:28:22
So, that should be but you know, I wanted to claim that and make it really we're the lion.
1:28:25
You can be something else like we're the lion.
1:28:27
Uh, and so yeah, I probably I like went a little crazy on Dolly when it first came out making lion in a shipping container in port, whatever. Yeah. Um, yeah. Yeah.
1:28:39
So, you should expect to see more Bport Lions out there. Yeah.
1:28:41
I remember you got me access every should have a children's book for your marketing. It's great marketing.
1:28:47
Kids love it and parents love it.
1:28:49
And then uh then you should have a mascot.
1:28:51
The best at this is by the way Dolingo.
1:28:52
Like apparently their owl is like Oh yeah, their owl has like 50 million followers on the different apps. That's amazing. Uh yeah. Yeah.
1:29:00
We need to instantiate the the flexport lion with its own Yeah.
1:29:05
I need I need to make more people know about it. Yeah. It can be posting.
1:29:08
It's not an obvious shipping reference.
1:29:10
I don't even know if lions are good at swimming or anything, but um Well, I mean, you do you do shipping over land as well, but yeah, it's not a pack animal and it's not king of the seas.
1:29:19
I would expect, you know, an octopus, tentacles everywhere. Who knows?
1:29:23
Are there any uh transportation platforms is probably not the right way to think about it, but things like airship, you know, drones that you're excited about?
1:29:34
We had a founder on earlier this week who's building uh sort of kind of plans. Yeah.
1:29:40
It's like a a sea plane drone for like short-term transport, you know, if you that the one that went viral or they like five guys that made it in their living room or whatever. Yeah. Yeah. Yeah. David David co-ounder. That thing seems sweet.
1:29:51
If you like forgot something at home and you lived by a body of water, you could there. I don't know. Yeah.
1:29:57
But yeah, like I've been pitched airships, you know, there's been a bunch of attempts, you know, at that.
1:30:04
Uh I'd be curious to think as you think about the future 10 years out.
1:30:10
What's what's exciting to you and and are there is there whites space?
1:30:16
Definitely the um actually the uh man I'm forgetting the name.
1:30:17
I think Eli Dorado is a backer of it of this uh airship company. Yep. Yeah, I know that one. Pretty high potential.
1:30:24
I met with the founder recently and I originally was very skeptical.
1:30:28
I'm like, I don't think anyone needs this and sounds really complicated, whatever.
1:30:31
But he walked me through it.
1:30:33
It can carry the same volume as a 747, take three days to cross the ocean instead of 15 hours.
1:30:38
But like three days is pretty fast compared to a ship container.
1:30:44
So if you get to a price point in between air freight and ocean freight, um that's very compelling.
1:30:50
It's just a new tier and so some people will opt into it for a certain class of goods.
1:30:55
That will be very compelling as a replacement for air freight. That'd be cool.
1:30:58
Does that kind of unblock the port system because we'd have a new se new set of ports.
1:31:02
We could go automated from day one.
1:31:04
What's really cool about his model is his idea anyways is that it would just go straight to your warehouse, not go to a port at all. That's amazing.
1:31:10
Land at your wherever your warehouse is and not trucking or any you know like land on. That's pretty cool.
1:31:18
Um, hopefully somebody awesome funds it because it's not cheap to go launch these things and uh, yeah, that's what real venture capital should be, right?
1:31:28
Take some risk and do some badass stuff like that.
1:31:29
So, um, rooting for them. Yeah.
1:31:31
Um, I think the self-driving ship, I see that all the time.
1:31:35
It's really stupid idea just because there's only these ships are like 20,000 containers with 20 guys.
1:31:40
Like there's just not that much labor savings here.
1:31:44
And most of those guys are doing maintenance like they're like painting it and Yeah.
1:31:46
doing engine maintenance like you still need them even if it's self drive.
1:31:50
There's one guy driving the ship like Yeah. Well, yeah.
1:31:52
You you you we've had pretty good autopilot in boats. Yeah.
1:31:56
It kind of drives itself anyway, right?
1:31:59
So, I think the self-painting ship is kind of interesting. Like that's cool.
1:32:03
Just kind of painting itself as it goes.
1:32:05
What about those crazy uh ships that have sails or nuclear power?
1:32:11
Different different modes of power for ships.
1:32:14
Yeah, the nuclear power I think is going to be probably regulatory problem more than anything else.
1:32:19
Like nobody really wants your nuke uh sailing into their harbor has been probably the problem there.
1:32:25
Um I've seen some cool ideas where like the ship the mother ship would stay offshore like 200 miles and then deploy like little baby ships that would bring the cargo to port uh so that it never had to get within your coastline.
1:32:41
But it's still a ways away. What about the sales? Um, yeah.
1:32:45
So, I've also seen there's a really cool company called Clipper Ship, a really tiny seed round company.
1:32:49
So, but with a big vision of little autonomous drones, sail sh sailboats that would carry like five or six containers worth of stuff and again like sail not to your warehouse but to like a little tiny port a river or something and set up their own network of ports.
1:33:09
They're they're trying to go live soon.
1:33:11
I all of this stuff's pretty cool and I have no idea, you know, it requires venture capital and it's it's very interesting, you know, founders fund's the obvious one, but like it's really interesting to see when do they get excited. Yeah.
1:33:25
About something it's not everything could be the next SpaceX and SpaceX was a crazy vision until it worked, right?
1:33:31
Uh and could have lost a lot of money if it didn't. Yeah.
1:33:33
What about SpaceX pointto-point? Um, yeah.
1:33:39
Uh, I mean, obviously the first the the the first like beach head is like the most expensive like private jet traveler needs to get to Tokyo in like an hour from New York and so they're like, "Yeah, 50k, no problem."
1:33:49
Uh, but but where do you see that technology going over the long term?
1:33:54
Uh, the problem is like flying in the to can it can SpaceX launch like in bad weather and it's raining or something like you're No, not really.
1:34:03
I think they need pretty clear skies, but they're in Florida and Texas.
1:34:06
It's pretty clear most of the time.
1:34:06
They don't scratch too many.
1:34:08
I think the from a cargo standpoint, it's probably not worth any premium because cargo doesn't care that much.
1:34:14
If it gets there in 15 hours or in 30 minutes, it's basically the same for most almost everything.
1:34:17
For military, it's a big those are very big differences.
1:34:21
Like if you need to get supplies to some soldiers on the ground in 30 minutes, like that can be life or death versus 15 hours or whatever.
1:34:27
So like sure, military applications are huge.
1:34:31
Rich people Yeah, care a lot more about their time.
1:34:34
Um, so yeah, I would be certainly bullish on that, but it's just like cargo doesn't care that much if it takes 15 hours.
1:34:41
Very rare you would spend that much extra for something to get it there that fast.
1:34:45
I mean, maybe it would shorten down your trips, which would be nice.
1:34:49
The one that I'm very excited about is Zipline. Oh, yeah.
1:34:52
Um, which is I can't figure out if they launched or didn't launch yet.
1:34:57
They're supposed to launch any day now in Dallas.
1:34:58
And you'll be able to buy anything that's for sale in a Walmart on a drone delivery. Wow.
1:35:02
Uh in less than five minutes. That's amazing.
1:35:05
Out of there's 25,000 items in a typical Walmart and 24,000 of them are small enough to fit inside their drone. Wow.
1:35:14
Uh and then I understand they're going to go live.
1:35:17
I don't want to reveal anything I'm not supposed to, but they're going to go live with some restaurant chains. Oh, cool. Get your burrito.
1:35:21
Be able to get like a burrito in five minutes.
1:35:23
This is this is one of those things like you know they they had the early hype where like everybody was like oh this is the future and then like they had to do the thing and like actually like make it work so the hype like dies down and then suddenly like a burrito lands in your backyard in 5 minutes and you're like we are so back.
1:35:40
Uh last last question for you.
1:35:40
Uh how do you think about sort of managing like the team and the company at a time when you're running a business that's you know most companies have the benefit like you know if you're running like payroll software you can be like let's ignore sort of like politics and like what's going out on each other. Yeah.
1:36:00
And like let's ignore the world and just like focus on our business and our customers.
1:36:02
But like you're in a business where like in 30 minutes they're going to announce some news that's going to be very impactful to your customers.
1:36:07
like, you know, h how have you messaged um everything with the team?
1:36:12
Like, do you got are you going to be like, you know, doing a war room as as the news breaks out?
1:36:18
What does that look like? I'm curious.
1:36:19
curious. Uh we always there's we do we have war rooms as we call it too and they're slack channels basically where we get people together to go run UDA loops and observe what's happening in the world orient ourselves who needs to
1:36:33
know about this uh make decisions take action and and our our ultimate you know my message to the team is is what my dad used to tell us when we go camping it's uh you don't have to outrun the bear you just have to outrun the the the campers in the next sight over. That's great. And our competition, um, That's great.
1:36:49
And our competition, um, we've just got to be better.
1:36:52
We can't outrun this bear of tariffs or geopolitics, terrorists blowing up ships in the Red Sea or Yeah. Yeah. Whatever it might be.
1:37:00
Uh, but we have we can be better at responding to this than any other competitor.
1:37:04
And, uh, it's a moment for us to actually double down on being the most customer centric, you know, like and tech gives us a huge advantage here.
1:37:14
when when the new tariffs hit, we will be ingesting that into our databases and publishing it to our customers uh within minutes, right?
1:37:22
And our account management teams within the hour will have a plan, a script, and start calling down and letting people know what it means for them, what it how much it would have cost them, like start setting up advisory appointments to talk through, you know, things like your in tariffs, um it's your value of your goods times the tariff rate, times the duty rate.
1:37:42
Well, there are a lot of perfectly legal compliant strategies you can do to reduce the valuation of your goods.
1:37:49
Uh that nobody bothered with when it was time zero.
1:37:51
Uh and you can get refunds as I was saying before.
1:37:54
So it's all about how do you respond to these things?
1:37:58
Um and yeah, we think we have a big advantage there. So it's fun.
1:38:00
It's why Flexport's the most fun business in the world. Yeah.
1:38:03
I don't want to sit there and run payroll for other comp. It's boring.
1:38:09
Get out there, see what's happening.
1:38:10
Hey, it's an entertaining time to be in payroll.
1:38:12
You picked a bad day for that analogy because it is high stakes.
1:38:14
It's James Bond out here as well.
1:38:16
We got the We got the guns in the studio straight from China. The team pistols. They're water pistols.
1:38:22
But we're having a lot of fun today.
1:38:24
Uh we got James Bond on the soundboard.
1:38:26
We're having a great time.
1:38:28
But thanks for stopping by. This was fantastic.
1:38:29
Always great talking to you. Good luck on tonight.
1:38:30
See what happens with these.
1:38:33
Maybe I'll maybe I'll need to come back and talk through when we actually have. Yeah. Yeah, that'd be great. We'll have you back. Of course. Yeah. All right. Take care, guys. Have fun later. We'll talk to you later. Great to see you. Fantastic.
1:38:43
Always an entertaining interview.
1:38:44
Uh thanks to So we got an absolute lion.
1:38:46
We got James from Profound calling in.
1:38:50
We are going to be talking about uh I I spoke with James yesterday for the first time.
1:38:58
What he's doing is absolutely fascinating.
1:38:59
He's helping uh companies understand how they are appearing in LLMs. Okay.
1:39:05
Yeah, let's bring him in. James, how you doing? Boom. What's going on? We got you. Uh, you live? Can you hear us? Yeah, I can hear you. Yeah, there we go. Fantastic. We're live. What's going on? Cool. How you doing? We're good.
1:39:21
Uh, can you uh start with just like a brief introduction of yourself, your company, what you're doing?
1:39:27
Yeah, I'm James, co-founder, CEO here at Profound.
1:39:29
Uh, we're a New York City based startup.
1:39:34
Um, yeah, we we're we're building a marketing platform that helps brands understand and control how they show up in AI responses. Mhm.
1:39:43
Um, we launched in August, August 17th of 2024 and kind of like came sprinting out the gate.
1:39:51
Uh we we raised a $3 half million dollar seed round that was uh co-led by uh Keith Rabo Coastal Ventures with uh Saga uh uh sort of co-leading and yeah we've we've been growing pretty fast pretty quick.
1:40:09
Um we have built this platform that's relied on by brands like MongoDB, Indeed, Mercury, Ripling, Ramp Ramp.
1:40:16
Um, yeah, we love ramp here.
1:40:21
Um, yeah, talk about talk about like the genesis of the idea because I think what what you're doing and we'll get more into how it works, but what you're doing is now like blatantly ob like it's a blatantly obvious idea, right?
1:40:33
Because you all you have to do is kind of compare like as search became a big market and companies sort of rapidly realize like we need to understand and control how we're showing up in results.
1:40:44
you know, there's a lot of parallels to now, but I I thought your backstory of kind of like how you guys discovered uh the the opportunity in the first place uh at the beginning of last year was cool. Yeah.
1:40:54
I mean, it's it's it's you know, myself and my co-founder Dylan, we were at South Park Commons, um which is like a VC incubator accelerator.
1:41:06
They have one in SF, one in New York.
1:41:07
We were lingering around the one in New York um spending our time trying to figure out what business we wanted to work on.
1:41:13
And there was this kind of sort of ironic moment where as we were thinking about other businesses to work on, we kind of realized that we had just been using Perplexity all day, every day for weeks or months on end without actually going, you know, and doing traditional blue link search.
1:41:32
Um, and yeah, that again, it's one of those ones where, you know, it seems more obvious now, but this is back then, but even at the start of last year, chat GPT didn't have web retrieval.
1:41:44
Uh, so it was no good at search perplexity.
1:41:46
It felt like this streaming to CDs type moment.
1:41:52
And uh, we just went all in on that inflection point.
1:41:55
We said, "Hey, you know, either Perplexity is just going to take everything here because this is so good and it this makes AI answers makes so much more sense than Blue Link search um or everyone else is going to jump on board and do the same thing."
1:42:07
And probably closer to the latter is the way it unfolded.
1:42:11
Um GPT introduced introduced web retrieval.
1:42:14
Um I I mean Adobe did this huge study that they released like a couple of weeks ago.
1:42:20
Uh it's based on like a trillion web visits on American retail.
1:42:25
Um and it's like I think 40% um of uh consumers now are are trying uh AI search for shopping uh for commercial purposes.
1:42:38
So, it's definitely We had somebody we had uh Aiden from OpenAI on yesterday who said that he just anytime he wants to buy a product, even if he's just buying hand towels, he just does like a deep research report and he's like it's worth just waiting five minutes to figure out like what's the best product based on my interest.
1:42:55
Uh I'm curious like how aware uh it makes sense that companies like RAMP are using these tools every single day and they start to realize like hey this is a product discovery mechanism.
1:43:04
we should get on top of sort of understanding how ramp is is appearing in results.
1:43:08
But for how aware are legacy companies, you know, sort of like multinational public companies aware of how uh do they realize this is almost like a hair on fire problem yet?
1:43:21
Or or do you have to kind of explain to them like, "Hey, by the way, you know, 20,000 people are searching about your products every single day and like you have no grasp of of how you're appearing or or what that's causing people to do, etc." They're all over it.
1:43:35
I I like reject this thing of the incumbents all had their lunch stolen in the early 2000s, and I think that everyone's like wiser now when, you know, they can sniff a platform shift.
1:43:46
We work with some really big companies.
1:43:48
It's like I know everyone's got the, you know, the the founder yap, but we genuinely work with some of the biggest like Fortune 100 companies in the world.
1:43:54
I just can't say their logos.
1:43:56
Um because they just don't like that.
1:43:59
Um but yeah, they're super clued up.
1:44:01
They're super wise to what's going on.
1:44:04
Um they're maybe a bit slower in terms of the workflows because understanding is very different to like taking action and like trying to improve the results.
1:44:13
But I mean, as an example, to give you one of our customers who I won't say who it is, but they're big company, 12,000 plus employees.
1:44:19
They did like a a big global PR push uh around this new product launch uh last I think a week or two ago and they saw a a 50% increase in their visibility on that like their visibility in answer responses.
1:44:39
W- without giving away the secret sauce, can you just give us some general guidelines for how a company should think about steering how they show up in LLM responses?
1:44:48
Because you could imagine everything from like do more SEO stuff, get on Reddit, make sure you're in the next crawl in the in the pre-training data set, or you could even go and say, "Hey, there's some there's some inaccurate information about us.
1:45:03
Let's just go directly to OpenAI and say, hey, can you trim this out of the data set?" Yeah.
1:45:06
So, I guess that there's a sort of wide aperture or sort of like philosophical response to this which is I think understanding that this is that the the failure mode here is to think this is like traditional search where I mean traditional search was essentially a marketplace system.
1:45:25
a marketplace system. you had uh the website and the end user and the Google index just helped the end user you know come into a website maybe top a funnel and you know thumb around and the ecosystem eventually get pushed down the
1:45:38
funnel into a conversion event AI answers there there's three parties at acting here where we have the we said the same website and the same end user but sat in the middle is the answer engine the answer engine changes everything because it's not connecting the too. It the answer engine is
1:45:56
It the answer engine is essentially for all intents and purposes stealing the relationship from the end user. Mhm.
1:46:02
Um or stealing the the the stealing the relationship with the end user from from the brand.
1:46:08
So I most brands don't aren't really groing this idea yet, but most brands are about to lose the majority of connection they have with their end consumer. Mhm.
1:46:23
Because now when I'm researching a purchase, I go to chat GPT and if I need more information, I send a follow-up question to chat GBT.
1:46:30
There's no need to click out and eventually I mean, you know, if you read the the Strateery article that came out, the interview with Sam, I think this week or last week, you know, it's obvious that Open AI are going to go into shoppability.
1:46:42
So, we're going to see like aic browsing, aentic shopping start to take place.
1:46:45
And you will you will transact within these answer engines.
1:46:48
You will consume media within these answer engines. you won't need to go.
1:46:51
We're going into a zeroclick future.
1:46:54
So, as a brand, the impetus, you know, going back back to that sort of philosophical point that the your impetus is how do I distribute information to these answer engines in real time accurately, the first step is like to just understand what the hell is going on.
1:47:09
So, you know, if I'm ramp and I want to show up more in accounts payable, cool.
1:47:15
Let's like run a bunch of interrogations.
1:47:19
Let's see how the answer engines respond when we send a huge variety of questions about accounts payable open-ended questions, not brand direct ones about ramp. Mhm. Let's see where they go.
1:47:29
Where which sources do they go does chat GPT go to or perplexity go to or co-pilot go to to get that information and then from there we can start building strategies.
1:47:38
I mean and ramp you know they we just published a case study with those guys.
1:47:41
So it's it's public information.
1:47:43
and they increased their um visibility like 7x in one of the indices that they were looking at by just looking at what was going on and what they could do about it.
1:47:53
But then I guess John to give you a more direct response like you know tactical stuff llm.
1:47:56
txt our our website tryprofound.
1:48:02
com we get as our web our LLM.
1:48:05
txt now is getting as much traffic as our sitemap which is pretty interesting.
1:48:11
We think for like very for rich extensive websites, you know, websites like I don't know Stripe as an example, we have tons of documentation. I think LLM's full.
1:48:19
txt will be very interesting because it's just essentially cramming a huge txt file of everything all onto one page because answer engines don't mind that.
1:48:29
Um I think going you know just sort of cycling through other ideas you know things that we're seeing work are lots of structured data um is very important like you know removal verosity you're creating content essentially for a retrieval agent to pick up not a human um images are useless uh answer engines don't care about images so like kind of ignore them to an extent.
1:48:51
uh metadata, you know, needs to be very thoughtful.
1:48:56
Like you can essentially you can you can just spoil the whole article with your metadata and that will often be like pretty effective.
1:49:01
So I mean I could like I could go through I could cycle through. Yeah.
1:49:04
What uh I have a couple kind of questions.
1:49:06
You're sort of building in a what's a new category?
1:49:08
Do you call it a AEO like answer engine optimization?
1:49:13
Do you have you coined it yet?
1:49:14
Obviously you want to own it.
1:49:14
Yeah, it I think you have to let the kind of market decide what it's going to be called.
1:49:21
AEO, AIO, LMO, um, GEO gets thrown around.
1:49:25
Generative engine optimization gets thrown around a lot.
1:49:30
Everyone, considering we're all like techno optimists and, you know, Silicon Valley is meant to be full of technoptimists.
1:49:35
It's the the desire to use heristic is quite interesting to me.
1:49:41
I've seen like so we as human beings, we love to use huristic.
1:49:44
we just want to say this is SEO for AI, but there's all kinds of like new surface areas that just didn't exist before. Um, yeah.
1:49:53
Uh, can you talk about do you have any type of vision of what paid ads in LLMs will look like?
1:49:58
I had gotten multiple pitches over the last year of people that were building these sort of like ad networks to fit within uh different LLMs.
1:50:10
And my general read is like I sort of believed that ad, you know, paid ads would be heavily integrated into LLMs, but I sort of felt like it might I wasn't necessarily convinced that in a world where there's, you know, an infinite number of different answer engines that everybody has a different favorite.
1:50:29
Maybe the sort of global network makes sense.
1:50:31
But then if OpenAI is getting like, you know, long-term or Grock or whoever's like the sort of power law winner, if if they're getting 80% of the traffic, like maybe they end up with more of like a meta style ad network where they just build it, you know, from scratch.
1:50:46
Um, but I'm curious what you think.
1:50:48
I mean, I definitely uh I kind of think well I I I believe there will be a more fragmented uh marketplace this time around.
1:50:56
I think there's just more everyone knows what's at stake here.
1:50:59
uh Google search has been the biggest monopoly in the history of the internet and I think there's more capital more energy going into trying to ensure that doesn't repeat itself this time round.
1:51:12
Um but answering the question I I think it's actually two things.
1:51:19
I think it's generative advertising in a conversational user experience will be that the convergence of those two things will be one of the most powerful unlocks in the history of marketing.
1:51:33
Language models are really good at language.
1:51:37
Um and being able to synthesize net new ads on the fly that are perfectly tailored to that exact moment in the exact conversation in the exact way. Yeah.
1:51:48
that is most compelling I think is about to melt marketers brains on and on the efficacy of like how how powerful that advertising medium is going to be.
1:51:59
I I mean I I'm I we want it to happen.
1:52:02
We think it's very interesting and we think it will speak perfectly.
1:52:03
It will be a very obvious next move for our business. Um I don't know.
1:52:08
We're not holding our breath right now.
1:52:11
holding our breath right now. I don't think I you know I don't I'm not sure if it if if it will unfold like that especially with open AI you know they have that corporate the the corporate structuring I think is a bit of a hindrance just to kind of the the values of the business I can't I don't know
1:52:26
your speculation is as good as mine but yeah yeah well very cool uh I'm sure uh I'm sure you're going to be raising a lot in the next few years so uh when when you're when you're ready to announce anything come back on and break it down send me keep sending me different learning ings and stuff in the meantime. I think we we just have a ton
1:52:43
I think we we just have a ton of founders uh in our audience that probably aren't taking LLM optimization seriously enough now.
1:52:51
So, uh go uh DM James or or sign up for a demo or whatever.
1:52:57
And uh it's great having you on.
1:52:58
Thanks for having me, guys.
1:52:58
Yeah, congrats on everything. It's cool.
1:53:00
Yeah, thanks for stopping by. Later.
1:53:04
We got we got Quaid in the in the waiting room yet.
1:53:06
We got Quaid coming in to the Temple of Technology breaking down watches and wonders which of course is it seems like the biggest watch event of the year.
1:53:16
Uh every major watch brand announced new watches and we're going to get the update from Quaid.
1:53:21
I'm very excited for this.
1:53:23
We discussed the Vashron Complications watch that launched but I want to hear about PC.
1:53:27
I want to hear about Rolex Landweller.
1:53:29
I want to hear about everything Quaid has to say.
1:53:32
So break it down for us Quaid. How you doing? What's going on? It's James Bond day.
1:53:40
I hope you I hope you have your your your uh your gun because we're all secret agents today on the internet. Uh what's going on?
1:53:48
Uh what time is it over there for you? It's 9:48 p. m. in Geneva.
1:53:51
I'm in uh a tiny little Geneva hotel, so apologies for the background, but we're on the ground. You look great. Uh yeah, break it down. What is going on?
1:54:00
Why is everyone in Geneva?
1:54:02
Uh what's what's going on in the world of watches?
1:54:04
Yeah, it's watches and wonders right now.
1:54:06
So, it's kind of like the biggest year or biggest week in watches for the year typically.
1:54:10
Uh it's when the watch world comes together, a lot of the brands come out and they reveal the new models, discontinuations, and everyone comes out here and and nerds out together.
1:54:19
So, what what's making a splash?
1:54:22
Like what are the biggest announcements?
1:54:24
And then what are the what are the announcements that I might have seen that are kind of overrated? Yeah.
1:54:28
So, it's it's typically a time when when brands like Rolex and PC come out and they announce like iterative improvements on their models.
1:54:40
Uh I'm sure a lot of you folks have started to see a lot of the press coming out of it.
1:54:43
We got quite a splashy year specifically around Rolex.
1:54:45
It's not very common for them to come out and release a new model.
1:54:49
Uh and so they dropped the Landwell dweller.
1:54:52
Uh and it's definitely like penetrating popular culture a little bit more.
1:54:56
where I was in LAX on my way here and a bunch of people who clearly don't talk about watches were talking about the Land Dweller and that excited me.
1:55:03
But um so that was the big splashy one.
1:55:06
Uh first model, what's what's the hardcore enthusiast collector reaction to the Land Dweller?
1:55:16
I look at it, I'm like, "Okay, you took, you know, the best of AP and you combined it with uh, you know, a Day Date and that seems like probably like it's going to sell well, right?
1:55:26
I just look at the bracelet."
1:55:28
But like as as a you know, a very much like a hobbyist enthusiast, you know, I'm curious what the sort of on the ground reaction is to the new model.
1:55:37
Yeah, I think there's like the consumer reaction and then there's like the the nerd reaction.
1:55:43
I think the consumerfified one is like integrated bracelet homage to the late '7s Oyster quartz.
1:55:48
I think Jordy, you're spot on there.
1:55:51
Like it's the first moment in a long time or maybe ever where I think Rolex is building a fully integrated bracelet that like really puts a model directly in the Royal Oak Nautilus category.
1:56:01
And so Rolex has been largely dominant without doing that.
1:56:03
And and so now that you have a bracelet where I'm wearing a Royal Oak today, like I haven't put on the Land Dweller, but does it make sense to have both in my collection?
1:56:13
And I think it's like you started to ask that question which is is quite exciting for the watch nerds.
1:56:16
Uh they released a new caliber with it, the 7135 which has a new escapement in it.
1:56:24
And so like for most people they're going to buy the watch cuz it's a hype new Rolex.
1:56:26
I'm sure every every 80s line's getting blown up right now.
1:56:28
Uh but for the watch nerds, it's just a really efficient new escapement.
1:56:32
It's uh pretty exciting to see it come out.
1:56:36
For the notwatch nerds in the room, like the escape mint regulates the hairspring.
1:56:41
the hairspr is what you're winding to power the watch and it's kind of being regulated and releasing and that's what's driving power to the gears and so super nerdy but uh to have a moment where they not just make a new model and make it exciting but they also invest in
1:56:55
kind of the technology and and push the innovation forward in the watch perspective and then to have the confidence to drop a new caliber and a new uh uh escapement in like a sport watch uh I think it's just kind of a ballsy Rolex move so I think the watch world likes it. I think everyone wants
1:57:10
I think everyone wants to like it. That's cool.
1:57:12
I'm curious, how do you guys think about estimating how these things are going to price?
1:57:18
Obviously, as soon as an AD releases a land dweller from their hands into a consumer's hands, some of them will get listed on bezel immediately.
1:57:24
Do you have any sort of sense of how this is going to price?
1:57:29
It's a little bit different than seeing a new GMT, you know, release where it's a different color way, but there's it's certainly not a new model.
1:57:39
Yeah, it's it's uh it'll be interesting and I think like it's very hyped and it falls like right into the hype stream and everyone's going to want this.
1:57:45
I'm sure '8s lines are are getting absolutely blown up.
1:57:48
It's also expensive at retail.
1:57:50
It's a $14,000 watch, I think, is the the retail on it.
1:57:53
So, like, you know, it's 1,500 bucks more to get a Daytona at retail.
1:57:57
Granted, those are obviously impossible to get, so it's not even real numbers.
1:58:00
Whenever Rolex drops a new model, specifically one that's desired, you pay a premium to wear it first.
1:58:06
And so I'm sure if you want to be courtside, you know, wherein you're your first land dweller, you're going to pay an insane premium on that.
1:58:15
I would not be surprised if these things are are selling like well over double retail.
1:58:19
That probably seems like the entry ticket even at a stable market, but we'll see.
1:58:24
It's like, you know, there's not a lot of hyped datejs out there.
1:58:27
Even the hyped datejs are still trading in the mid- teens.
1:58:29
So it's certainly a new market.
1:58:32
Uh but I think it's going to be pretty frothy, my guess.
1:58:35
Can you talk about some of the other launches and how they've been received uh either this year or specifically at Watches and Wonders?
1:58:45
Yeah, so I think like it's been interesting like uh usually what ends up happening is like I I mentioned you'll drop a watch, it'll be popular even if it's like a funky watch.
1:58:53
Like we saw the the Day Date with the emoji, you know, I saw a Tetris one that was kind of wild. Yeah.
1:59:01
Like it's crazy, but because there's inherent scarcity and it's hype, do you end up seeing these things trade for insane figures?
1:59:06
I think there's a lot of other really exciting ones that that dropped this year, they don't touch the Land Dweller, but it was kind of a theme of really interesting color dials.
1:59:17
You had the the Sprite get kind of the big brother, the the green and black GMT that's a left-handed.
1:59:23
I never thought I like I thought they were going to launch that model and then discontin it because it just inherently was weird in a Destro.
1:59:28
Um, but we got a white gold version of it with the first ceramic dial that Rolex has ever made. It's all green.
1:59:34
It looks kind of hulky meets the sprite. That's exciting.
1:59:36
Uh, you got this crazy iron stone, tiger iron stone dial for the full gold rupier, which is like gemology mix of tiger's eye and all these other crazy metal or crazy stones.
1:59:51
Um, OP Colors got some new ones.
1:59:51
They brought in like a hyped turquoise dial in the Daytona.
1:59:55
So, it seems like they're investing in technology, but they're also playing like right into the hype cycle and giving color dials and things that are strong.
2:00:02
How are some of the holy trinity brands playing watches and wonders?
2:00:06
I saw a launch from Vashron.
2:00:08
I saw some PC news that you guys broke down on your X account.
2:00:10
Uh, can you give me just an overview of like how big is this year for each of the holy trinity?
2:00:17
Yeah, it's not it's not quite the level of Rolex, I would say.
2:00:22
Like obviously Vashron's had a big year with the 222s.
2:00:24
U kind of riding that lightning.
2:00:26
As far as PC goes, we got the 6196P, the the newest iteration of the Kalatraa.
2:00:32
The watch world loves it.
2:00:32
It's kind of being hailed as the, you know, best modern Katraa we've seen in a really long time.
2:00:38
It has that amazing salmon dial that the market loves.
2:00:40
So, still active, but I would say like more like a normal year than uh kind of Rolex having the standout new model.
2:00:46
What is the general sentiment like industry sentiment right now on the ground?
2:00:52
We obviously had the COVID zer boom and then things crashed.
2:00:57
There's a lot of models that are down 50%, they're obviously still trading, you know, high, you know, above retail.
2:01:05
But, uh, is the sentiment good even though we're maybe back to like a new normal, but the new normal is just like, you know, sort of higher than than, you know, 2019, let's say. Exactly.
2:01:17
Like, I think the the hype models are still hyped.
2:01:20
They're still trading well above retail.
2:01:21
you know, Daytona 155 retail is still trading in the low30s.
2:01:26
It's not a $55,000 watch anymore, but you know, it's still trading at a meaningful premium, still very hard to get.
2:01:31
Uh, and I think, you know, the correction that we saw over the last two years actually, in many ways, I think accelerated the market.
2:01:39
You have a lot of people that were watching the price of a Daytona being $55,000 and just feel prohibitive to enter the market there.
2:01:44
now all of a sudden see the watch at the low 30s and they either feel like they're buying the dip or they just want the watch well enough that they are willing to make that price at that point.
2:01:53
So, uh we're seeing a lot of energy come back in the market on our side.
2:01:57
Last month was the best month we've ever had ever.
2:01:59
So, uh you know, we continue to grow. Congratulations. We love growth here.
2:02:03
We have to shout that out. It's fantastic. Congratulations. Thanks, guys.
2:02:09
But, uh, yeah, so I think the market's still frothy and it's there, um, a little bit less speculative than it's ever been.
2:02:15
I think people saw the highs and they saw the drop and now they're, you know, being more careful, but still a lot of watches to be bought.
2:02:22
We love a little bit of froth.
2:02:23
Not as big on speculation, but I love a little bit of froth. We love the froth.
2:02:28
Uh, is there anything else? Anything else? Uh, yeah.
2:02:30
Anything else that's been anything surprising from from this trip so far that or is it all kind of expected?
2:02:38
all all what you'd expect.
2:02:40
It's always fun to see everyone in Geneva walk rocking the most buyer watches ever and they're just casually on the street.
2:02:48
I had lunch today and I think I saw two crashes, a bunch of open works like all sitting in the same vicinity. So cool.
2:02:55
Um and it's fun to see how the stuff regulates on the secondary market.
2:02:58
Like we're already seeing these celebration dials like you know they're they used to be trading in the mid- teens.
2:03:03
the mid- teens. we have a seller that's opportunistically listing them in the 30s now trying to get this the speculative buyers to be ready to move but then we're also still selling them you know in the low 20s right so like it'll everything will shoot up immediately and then it'll find its way down and if it's a hyped model the celebration model or dial is inherently a crazy watch like it's I people who
2:03:24
rock it hats off to them because it's an impressive watch to be able to pull off but um for the ones that have staying power and they're discontinued and have a lot of demand obviously the price shoots up can you talk about some of the
2:03:34
smaller brands, what's going on with FPJO and some of the more challengers, the upandcomers, the brands that folks might not have necessarily heard of uh but are making big splashes in the last few years. What are they doing at
2:03:45
What are they doing at Watches Wonders and what are they doing generally?
2:03:47
Yeah, so I think most of the brands are here um even some of the big brands like tend to be a little bit quiet even not just the independents like uh um like AP didn't participate in watches and wonders but did like some quiet announcements of new ceramic colors and things like that. Yeah, I went today.
2:04:02
There's a a small little just just one step back.
2:04:05
Is that like interpersonal dynamics?
2:04:09
Like they don't like who runs the show?
2:04:11
Like why why why do you decide to not be at the biggest, you know, watch event of the year?
2:04:16
I don't know if they I don't have like the nuance there and and I don't know if like reps and them are not participating and things like that, but I just know like they're not making as big of a presence as as uh other brands are.
2:04:26
And I think that's just like a selective choice.
2:04:30
But obviously they announced they love the ceramics and they announced a new blue ceramic that is aligned with the color of a specific sky in a Swiss valley.
2:04:40
Um, which is very AP and super cool of them.
2:04:44
Um, so yeah, they're just doing their thing.
2:04:47
And on the independent side, uh, there's a fair actually next to Watches and Wonders.
2:04:53
They're in the same little area by the Geneva airport that is focused on specifically independence.
2:04:57
And so I actually spent time there today and you're kind of working with, you know, brands like Ming and and kind of these like new up and cominging brands that are doing really cool stuff.
2:05:05
So uh you get a mix where it's a fun moment where I think a lot of attention is brought into the watch world of watches and wonders.
2:05:12
And I think, you know, rising tide rises all ships in this kind of stage. That's awesome. Love it, dude.
2:05:17
Well, thank you for joining at at 10 p. m. your time.
2:05:19
Have a great rest of your trip.
2:05:21
And thank you for responding to John and I at all hours of the day.
2:05:25
Every time we have watch questions with with like the most obscure wrist checks.
2:05:29
Hey, we we we we saw this VC with this watch. Let us know what it is.
2:05:32
And you're always the best. We appreciate it. Watches.
2:05:35
I am I am available 24/7. So, thank you.
2:05:38
Yeah, it's been it's been fantastic working with you and partnering with you. You're the man.
2:05:43
Have a great Have a great rest of your trip. Yeah. Safe travels. Talk soon. Bye. Good timing. Uh, so much watch news.
2:05:49
I'm glad we were able to have him on as our official watch correspondent. I I love this stuff.
2:05:55
Uh, well, next up we have Sarah Guo coming into the Temple of Technology talking about She runs a fantastic AI podcast.
2:06:02
If you're not familiar, also a big time investor.
2:06:03
Um, and uh, wasn't she the reason that uh, Andrew Reed joined SEOA? Wasn't that the story? I think that was it.
2:06:11
I think it was about the backstory. Yeah. And she's here now.
2:06:15
Welcome to the show, Sarah. Good to have you. Hey. Hey. Hi. What's going on? It's great to have you. How's it going? Thanks for having me.
2:06:20
Uh what's uh what what's new in your world?
2:06:25
How did you process the Studio Gibli moment? Uh how are you feeling?
2:06:27
I mean, you've been, you know, bullish on AF for years now.
2:06:32
Um what's uh how is it like updated your world model and what's exciting going forward from here?
2:06:40
Um well, it's super cute, right? Start with that.
2:06:43
I have a lot of and generated a ton of images of me and my kids and my family, my friends.
2:06:48
So not be um ignored like how much people actually do want to create.
2:06:53
I think it updates I think it should update a lot of people's world models in terms of how early we still are in quality.
2:07:02
I think the fact that like quality is a very broad term.
2:07:04
I think the fact that you had image generators make things that were beautiful or realistic.
2:07:12
realistic. I feel like people kind of thought that you know to some degree like images were solved like other um like other domains were uh already more well solved but like what I think the GPT40 and studio Gibli moment taught us is first of all it's like a different
2:07:30
technology for image generation but it allows a lot of controllability and it there's more knowledge of like why the image is the way it is and so I think we're going to keep seeing a ton of improvements in our ability to create different things that like surprise people. Have you gotten a chance to dig
2:07:44
Have you gotten a chance to dig into how much of the I mean it's clear that like this new model, whatever they're doing is much better.
2:07:51
How much of it is just the design, the algorithm, the strategy versus like scale?
2:07:55
And I I really hope that we have almost like a deep-seek moment where we're like, oh, now it now these now it's a filter on Instagram and it's just a button and it takes one second and it runs on your phone.
2:08:08
We've compressed it down.
2:08:08
That seems to be a trend in all of these models.
2:08:11
something comes out, it's really cool, it's really big, it's really expensive, then it gets really cheap and quick.
2:08:15
Um, what are you expecting this year as this evolves?
2:08:17
And do you think any do you think any of those trends will like unlock new uh use cases?
2:08:24
Uh, I I mean I I think this system can do things that uh were really hard Yeah.
2:08:31
to get right consistently before, right?
2:08:35
Um, and it is it is different.
2:08:35
I mean, I don't work at OpenAI, but lots of people believe that GPT40, it's not it's not a diffusion based image generator.
2:08:42
Instead of starting with noise and you like gradually cleaning it up the way like midjourney um models supposedly work, you you're building images piece by piece like sequentially like you have tokens in a language model, right?
2:08:54
And um if the image parts are more like words in a sentence um and you're creating the image one element at a time.
2:09:04
So it's like technology brothers in a cyberpunk city with a blue dragon.
2:09:09
It's understanding the request with language.
2:09:10
It's connecting the words to visual concepts it knows and then it's doing it like step by step.
2:09:14
And this is great because it's more controllable and it's really high quality but requires a lot of compute which is why Sam is talking about servers melting and you know it's it's still slow.
2:09:26
Um, do I would take I would take like every bet that in general all types of AI capabilities due to competition and continued investment um, and technical progress and distillate like it all gets cheaper and faster, right?
2:09:42
So, anybody who's building with this stuff or using it should expect that curve to continue the way it has for the last 18 months.
2:09:48
And I think a lot of it will be open.
2:09:50
Um, I mean opening I just said they we're committed to this too. Yeah.
2:09:54
And and so like do I I definitely think that the um the the data would would suggest that we should continue to see like new capabilities as the models continue to like invest in or the the foundation model companies invest in multimodality and continued scale. Mhm.
2:10:17
How do you uh what advice would you give to somebody that's doing anything around image generation at the app layer?
2:10:24
generation at the app layer? I think that prior to last week, if you were building like something that generates Facebook ads, you felt pretty good cuz you were like, "Well, we have great UI and like customers care about workflows
2:10:37
and like, you know, we help with this sort of like effectively like, you know, baking in prompt engineering to get great outputs and then OpenAI releases something that like consistently oneshots, you know, prompts with like three words and it's like a fantastic output." Yeah. Uh do you think that um Yeah.
2:10:52
Uh do you think that um you know do you think if you're working on like sort of image generation or or ad generation SAS that you need to like pivot to just having like new ideas and like kind of thinking deeper into the stack or do you think that there's you know uh do you think that you can still kind of like stay ahead by focusing on workflows?
2:11:15
Um I I definitely think there's a lesson here of like watch what the labs are doing.
2:11:21
watch what anybody who is doing like core research is working on and you don't want to fly too close to the sun, right?
2:11:28
Um uh I I do think one surprise might be uh what anthropic and open AI explicitly care about is like AGI or ASI whatever you want to call it, right?
2:11:41
Um, and one might have argued that like image generation, voice, like these things are not on the path to AGI, right?
2:11:50
They're um they're products you kind of get for free. Yeah.
2:11:58
Um I I think there's like maybe two lessons here for entrepreneurs.
2:12:03
One is well these companies they do care about making like enduser progress and commercial progress in part because they need to build a business that requires consumer engagement to keep justifying the training cost and the research cost, right?
2:12:20
And so, um, I think if they feel like there are capabilities that fit into a broader consumer engagement or, um, like productivity platform, they're probably going to pursue them.
2:12:33
Um, but I I also think that like the at least my experience with creative tools is that people want a huge amount of control and like not one tool will serve everyone and and so like the things that OpenAI and the labs have produced are very democratizing and yet like that is lowering the floor for if you want something that looks like a decent ad.
2:12:58
I also think there's a lot of room to like continue working on the last mile and raise the ceiling and we're gonna have just like much better content, much richer content, more diversity, higher quality from people spending a lot less money and there is opportunity in that.
2:13:12
Yeah, I think last mile is just like an interesting framework where like you know the base models are going to get you to like, you know, pretty great and then how do you get to excellent and there's like probably a lot of value that you can capture by delivering excellent and I think you can make like reasonable predictions about what the labs care about, right?
2:13:30
Like um uh let's just use some examples like do they care about code generation?
2:13:36
Yes, they care about code generation.
2:13:38
They think it's on the path to better reasoning.
2:13:39
But do they want to build every workflow for a certain type of code base or migration every workflow and serve it like in customer service or law or finance or accounting or even um I don't know video capture and editing like absolutely not they neither can nor want to do that. Yeah.
2:14:01
It seems like there's been this uh trend over the last few years of maybe don't train a foundation model, stick to the application layer and then go operate on highly protected data sets like legal or finance or investment banking, uh medical records, etc.
2:14:17
And I'm wondering if there will be a version of that that relates to image generation.
2:14:22
Um, but do you think we're kind of at the end of that trend or do you think there's more niches that people can discover if they just think really hard about where the labs aren't building towards and then go find something really cool?
2:14:37
I actually think we're still like pretty early in quality. Mhm.
2:14:39
Um like in your like artists and advertisers and communicators like the the specificity that people have for what they want in an image like you know the concept here is controllability. Yeah.
2:14:53
Um like I think the ceiling is really high and to the point at the beginning like I think people thought we were kind of done. We're not done.
2:15:01
And so um I actually think there's still opportunity for large companies here.
2:15:05
And then relatedly like video is much harder than images and um requires like different architectural change.
2:15:12
And so if if images are this expensive and slow to generate today like I do think also efficiency is going to matter here and workflow is going to matter here and collaboration is.
2:15:21
And so I um I still think there's opportunity uh for other companies that are not necessarily um just training pure textto image models. Yeah. Oh, sorry.
2:15:32
I was going to take it in a different direction, but I I I was going to ask um it it seems like there's been this evolution of the value will acrue to the foundation model layer.
2:15:44
Now, it will acrue at least in the short term to the application layer.
2:15:46
term to the application layer. uh every foundation model company kind of has a dance partner on the distribution side whether it's uh Google obviously has their own distribution through their apps and meta has all the different uh social media apps X and XAI are now part partnered and together uh even openAI
2:16:06
has gotten so many people to install the OpenAI app and the chat GPT app uh do you think there'll be an increasing trend of hey yeah it's not enough to just be a foundation model company you got to find a partner on the distribution side if you really want to accelerate over the long term and remain relevant. Uh I I certainly don't think it hurts
2:16:22
Uh I I certainly don't think it hurts but the um like to the best example would still be open and catch.
2:16:29
Yeah, they didn't actually like their distribution is their own. Yeah, right.
2:16:33
But it depends on how novel the capability is.
2:16:34
And so I think there's a deeper question in like maybe that you're implying that in what you just asked of like well are people going to build new experiences that are so different that they can create their own distribution.
2:16:48
It is fascinating that they're have this deep partnership with Microsoft.
2:16:52
I've used Outlook for one email inbox for the last two years.
2:16:58
Haven't seen any open AI products in I don't know if I just haven't clicked the right button, but doesn't seem like Microsoft is really pushing like, hey, we're going to build these models in, although they've talked a lot about co-pilots in different office products.
2:17:10
But, uh, Jordy, what's your question?
2:17:12
Uh, do you think that it it almost feels like there's there's never been more hype for AI, but I almost feel like it's like underhyped.
2:17:20
Like you shared an article yesterday or a study that shows like AI therapy like actually seems to work really well.
2:17:25
And the idea that like society broadly, everybody would have free access, infinite access to high quality therapy like should probably be like the top story in the world because of how transformative it could be if every individual could understand themselves better and sort of, you know, mature and and whatever they're getting out of therapy.
2:17:46
It it feels to me like just AI broadly is still underhyped even by the cohort of humans that is like you know like fully AGI pill.
2:17:58
Um I think it's I I think it's wrongly hyped.
2:18:01
Maybe that's the the the answer.
2:18:04
Um uh like it is still underhyped and the things that people are really excited about are not necessarily the right ones. Okay.
2:18:11
Um maybe I'll go back to like the Microsoft thing for a second.
2:18:15
This is not like I mean clearly SA has done an amazing job with Microsoft but it's still a very large beast and I think it is like kind of impossible to overstate how hard it is to get existing products in existing businesses to move quickly, right?
2:18:32
And all of this [ __ ] has happened so quickly.
2:18:36
Um and like should there be intelligence in your email? Absolutely. Right.
2:18:44
like that technical capability exists today.
2:18:45
exists today. But what does anybody who is a traditional email vendor Microsoft or Google like navigating here they're like oh what does our user agreement say about if we can process our d that data what is like the safety consideration around processing that data what does the user promise around privacy right like there's um how much is it going to cost does like do we even have our infrastructure set up to share that data
2:19:11
with model inference um I I think it's it's complicated to go deploy this stuff especially at scale with organizations that by virtue of actually having users and customers are more conservative and um and so I I think they're like people
2:19:27
can go challenge it by yeah I mean staying on email I was I was setting up a new Gmail inbox and it's there's Gemini buttons everywhere but they don't seem to do anything that I want to do. It's just like, "Oh, give me a twoline
2:19:39
It's just like, "Oh, give me a twoline summary of this email that I could already kind of skim."
2:19:42
It feels like, you know, during the mobile era, there was this whole drum beat of like Mailbox.
2:19:49
I don't know if you remember that company that got acquired by by uh Dropbox. It like went viral.
2:19:52
Everyone was using it in it introduced a couple different UI patterns that were really cool and then eventually adopted.
2:19:57
And it was never like a power law outcome, this massive trillion dollar company, but it was like a really cool product. People enjoyed it.
2:20:05
It was probably a good outcome for the investors, the founders, the users, everyone had a good time.
2:20:08
And I feel like there's a little bit of a meme right now that like, oh, you're you're just a chat chat GPT rapper.
2:20:14
You shouldn't even go and try and build that.
2:20:18
And and I've always wondered like like should we be telling founders like just go build and maybe don't even worry if it's aligned with venture capital necessarily.
2:20:28
It's okay to go build something because there's there's so much opportunity with these new tools.
2:20:33
You might become really big, but you also might just build like an okay subscription business and people are paying 20 bucks a month for it for a while and then maybe you get steamrolled, but maybe you land somewhere great and you get acquired somewhere and it's all worth and at least we get the product.
2:20:45
It just feels like again and again I think of a product and then I can reason my way out of that's not a venture bet, but we don't get the product in the interim and I'm like I just want the product right now as a consumer. Yeah.
2:20:59
Um, I don't think like you can give entrepreneurs advice on things that are really about like personal motivation. Sure. Right.
2:21:06
If they want to just build the product, like go build the product.
2:21:09
If they want to build a hundred billion dollar company, they should think a lot about like what's going to make a hundred billion dollar company. Yeah.
2:21:15
Um, we are explicitly not going to back anything that's going to like be a small outcome that is a tuck in at least that we believe is, right?
2:21:25
But I I also think that um there are spaces that people think of as like very red ocean that people have creative approaches to.
2:21:34
What does red ocean mean?
2:21:37
Red ocean like just overly complicate competition.
2:21:39
Blue ocean the opposite of blue ocean. Yeah, exactly.
2:21:42
Like a lot of people are fighting over it.
2:21:44
It's not like an unknown market like um you know I think I'm pretty excited for notion mail.
2:21:50
Lots of other mail services exist as you Yeah.
2:21:52
Uh, have you I'm sure you've looked at a bunch or gotten pitched a bunch.
2:21:57
Have you done any AI rollups or do you have a broad thesis there?
2:22:00
When I when I look at some of these strategies where where sort of you know uh startup people like basically are trying to reinvent the private equity playbook being like we're going to buy businesses and make them more efficient.
2:22:11
Like it's sort of the same thing as like you can make them more efficient with software and now the narrative is is AI.
2:22:16
Uh how have you thought about opportunities like that?
2:22:21
There's obviously a bunch of them and I'm sure you've Yeah. probably seen them all. Yeah.
2:22:25
Um, we have something still in stealth in the portfolio that you might characterize this way.
2:22:29
Um, I uh I'll I'll like talk about what I think the component parts of this thesis um are and uh probably piss a bunch of people off by starting with um I think that there are asset classes where finance people are pretty good at finance, right?
2:22:47
private equity is a mature asset class and like a bunch of engineers being like you know what we're going to be really good at underwriting private equity.
2:22:56
I'm like like why why would you have any alpha in this?
2:23:00
Like I think you seem really smart like a very good engineer but but like the component pieces of I think it's really interesting when people just like discover other sectors that have existed for a long time and don't think about what the basis of competition.
2:23:12
Well, that's a classic Silicon Valley approach being like, I'm an outsider.
2:23:15
Like, I know how to do this better than you do.
2:23:19
And then it's like private equity is like the most optimized asset class ever where there's people out there that were like, I will buy this knowing that I will only get a, you know, 7% return, but that's okay because I'm going to do it enough times throughout the fund life cycle that it's going to, you know, work or whatever.
2:23:34
So, I I I uh I'm glad we're on the same page here or I'm like I'm I'm pretty skeptical of most of these things that start with like we're just better at finance. Yeah.
2:23:44
But being, you know, I could imagine uh hiring or actually being good at the under like the asset selection and underwriting piece of this as being like a baseline for a rollup type play working.
2:23:59
for a rollup type play working. And then the the other premises here are like uh we think that there are a bunch of sectors in the world that would benefit a great deal from technology or AI and benefit being like it shows up in the growth rate or in the EBIDA right pretty
2:24:19
quickly but they're not um by by uh virtue of the industry structure they're going to like adopt these technologies very slowly they're fragmented they don't invest in technology the um the user base is really far away from Silicon Valley and like sales is hard, right? Like that's that's kind of the
2:24:36
Like that's that's kind of the premise and and like it and maybe there's some broader technical thesis about why working across these companies is interesting.
2:24:46
Um I just said there there is something in our portfolio that you would characterize as a play on this and um I would just want to believe that these component pieces are true, right?
2:24:59
um that the team can be world class at finance, the team can be world class at the technology piece and the technology piece is going to translate to something that is not like incremental but fundamental to the quality of the business and your um scalability in an industry or ability to compete. You heard it here first.
2:25:15
It's an HVAC roll up for sure.
2:25:17
HVAC plus docuign printing money.
2:25:20
money. Uh, how do you think about as a GP wanting to constantly learn and learn about new industries and and get enough conviction to make bets in areas where maybe you didn't have like a ton of context 5 years ago while at the same time sort of like knowing your lane and like having areas that you're super confident in and having a deep bench of sort of like experts because like the
2:25:43
thing that I think is you know every every VC became an AI investor over the last you know year and a half two years but also a bunch of people became defense tech investors and a bunch of and like for us like we we angel invest it's low stakes if there's a founder we like we'll we'll put money in and we want to support them but then you're running a firm you kind of have to know
2:26:01
your your edge and your lane and I'm curious how you sort of like sort of balance that like what and think about like your sweet spot yeah it's a pretty core question I was actually having this discussion uh uh with my friend Eric Vishria who's at benchmark and he you know is like an infrastructure enterprise software person by background or like me and we're talking about
2:26:22
companies that are out of domain and his point which I think is like pretty aligned with my view is if you are too familiar with the status now I'm going to like you know make fun of myself because I just said all this stuff about the private equity rollup but if you are too familiar with the status quo um you uh the the experts in the field do not necessarily see the future Yeah. Um and especially as you like I I
2:26:50
Um and especially as you like I I genuinely I mean believe that uh large models can extend to many domains that were not software before.
2:27:03
Like I was not particularly interested in vertical SAS or the legal industry before Harvey.
2:27:08
But I think Harvey is a really interesting company.
2:27:10
I still don't know anything about the legal industry.
2:27:13
I know like 1% of what like I should as an investor here.
2:27:16
But like the the the point is um the the TAM has massively expanded because we are not just doing some incremental little productivity thing.
2:27:27
We're trying to take huge amounts of the profession and democratize it and raise the bar of expectation for what you get from your lawyers.
2:27:36
Um and and so like if that opportunity is large enough and I think the hammer is a really good hammer like I am so excited to learn about the legal industry and work on it for 20 years. Yeah.
2:27:47
Um, we just got a legal bill like a day or two ago and John was like, "Oh, maybe we should have chat GBTED some of that stuff."
2:27:53
And I was like, I think we're like in the last like maybe like few months before we're going to have good enough, you know, uh, legal AI, you know.
2:28:01
I think we're going back to handshakes and uh, and smoky back rooms and threats of violence because we can't handle these legal bills anymore.
2:28:08
But but yeah, going back to your question you said that I think is an interesting thing to pull out.
2:28:12
You said like experts can't see the future, but they absolutely can see today.
2:28:16
It's like sometimes you like, you know, look and you hear a pitch and you're excited about it and then you talk to a friend who like actually knows the industry really well and they just point out like here's like the one reason like why this is not going to work today.
2:28:31
Is it just you have to like step back and like almost kind of view things at a macro level and then ultimately make a founder bet?
2:28:37
Um I I mean like why do we end up working in areas where we don't have deep domain expertise?
2:28:42
It tends to start with like we love the founders and there's some first principles view of like it makes sense why like we should be able to restructure the industry or the technology is going to be massively important. Yeah.
2:28:55
Like the thesis just makes sense, right? Yeah.
2:28:57
Um, and so at least my personal approach is like I'm going to try to understand what every expert in the status quo believes.
2:29:06
And usually if it's a good thesis, like somebody thinks it's viable, right?
2:29:13
You'll just get mixed opinions back.
2:29:13
But um I don't want to discover that there were obvious reasons it was not going to work.
2:29:21
I would like to understand why everybody else believes it is not going to work and then like, you know, still.
2:29:28
It seems like there's a lot of I mean obviously there's a lot of money slloshing around in the AI deal making space right now but at the same time it's it's easier than ever to test an idea and see oh well we got to 100 million ARR in three months like maybe there's something here.
2:29:42
Uh can you talk about just like the pace of play in AI both on the deal making side and then on the actual revenue making side because it feels very different than the dotcom boom where companies were going public with like $2 million in ARR and they're trading at a billion dollar valuation.
2:29:56
Uh some of these companies, they're at high valuations, but they have a lot of money coming in. Yeah.
2:29:59
I mean, if any of you guys are experimenting your way to 100 million on run rate, please call meiction. com.
2:30:07
Um I still think it's pretty hard, but uh I maybe to your point like people are doing it very efficiently.
2:30:14
Uh and I think it just speaks to like the technology, the magic box is very powerful.
2:30:18
Um and you don't necessarily need it's not like if you just think about the SAS world, right?
2:30:25
Like I need an army of engineers to implement the business logic. Yeah.
2:30:27
Of like how does payroll work in Slovenia? Like what?
2:30:33
Like I'm I'm turning the law into code. Yeah. Yeah.
2:30:35
Um uh and uh I think that um the experiment like the iterative nature of like I'm trying to make a model produce outputs that are great in these specific workflows but the workflow is so valuable enables some of these companies to grow in an unhinged way like the ROI is there.
2:30:57
unhinged way like the ROI is there. I think healthcare is a really interesting example of this because for you know for like a 10-year period I was like oh man like I would be really careful about you know with love to my friends who are healthcare venture capitalists like
2:31:11
massochist not it's not a super fastm moving area huge part of the economy very important but it's just like you know it's not um it's not like an early adopter industry and yeah you have companies that um like a bridge and others that like have massive revenue new pacing including in the enterprise. Um and I think the basic answer is like
2:31:30
Um and I think the basic answer is like now people are making things that are worth buying quickly.
2:31:34
So that the fundamental piece is like pretty exciting here.
2:31:38
I think the pacing for entrepreneurs and for investors is either also very exciting or very stressful depending on your personality. Yeah.
2:31:46
Uh do you think do you think some of the the sort of bad activity in the space like is there so much pressure now on a like the bar in AI has now been set that like if you're a general access product and you're not like 2xing every single month or like you know not not every single month but like you know growing like extremely quickly.
2:32:05
Uh everybody's seen the charts of like you know whiz and cursor and ramps and and and deal and all these companies.
2:32:12
and deal and all these companies. It just feels like the pressure is now so intense that people are like counting CR as like you know uh like trials demos like do do you find yourself giving advice to founders of being like you know ignore these sort of
2:32:29
like uh ignore the charts and just like focus on your on your customers because if you're too focused on like how do we just grow like bestin-class then you maybe end up like not building you know building stuff that's not reliable or, you know, robust. Yeah. I I I I think Yeah.
2:32:46
I I I I think people focus more on uh what's out there instead of what's possible for their business way too much, right?
2:32:56
Like I think it's a pretty um so there is something fundamental in what you said which is like the world has become faster and the internet gave us the ability to distribute software products much faster than previously.
2:33:10
Like you were not going to go to like a hundred million of run rate in a couple months before you could discover things on the internet, right?
2:33:16
Like what are you going to do?
2:33:17
Like call somebody phone and be like come here with buy the CD ROM.
2:33:20
That's how soft bank got started.
2:33:25
I mean or it was it was just like structurally a bit slower. Yeah. Yeah.
2:33:28
Um uh so so I I think the the ambition for the number of connected people in the world, the number you you can serve, how quickly things can grow should structurally increase for entrepreneurs.
2:33:42
Um but and like an investor from the outside being like best-in-class is this company which has nothing to do with your company is not very useful.
2:33:50
If it is like if there is a data point in your customer segment of how quickly something can grow and you are not winning that is relevant data right then the bar has actually risen and like you should figure out how to win.
2:34:05
Um but I I don't uh I I think there's also like an important question like we talk about um uh uh there's another investor who calls it chicken nugget revenue but we just talk about revenue durability right like there there's a big difference between like deep usage multi-year contract enterprise revenue with integrations. Yeah.
2:34:28
Um and like people trying something with 30% a month churn.
2:34:31
Is that what chicken uh chicken nugget revenue is?
2:34:35
Is trial revenue basically? Yeah.
2:34:37
I don't know if people like Yeah.
2:34:39
trial revenue or just like revenue that you know is um perhaps commoditized. Yeah. Right.
2:34:48
It's the novelty of people trying new things because like AI can do so many cool new things. Yep. That makes sense.
2:34:53
Not really changing their dayto-day like it's not like a 3d7 behavior where I'm somehow working better like playing more being happier.
2:35:01
And so, um, I I I think people should figure out what the bottleneck to growth is in their business for durable revenue and then anything else they should treat as distribution.
2:35:12
Um, and like I don't know what to tell investors about that. Buyer beware. Buyer beware.
2:35:16
Uh, last couple questions.
2:35:20
Uh, what introduction have you made that's generated the most enterprise value?
2:35:24
uh Andrew Reid was on the show and and said that like I think he said that you connected him to Pat and and that's you know been uh pretty pretty good intro.
2:35:34
Is there anything else that that comes to mind uh that uh that you're particularly proud of?
2:35:42
Um uh I don't I don't know.
2:35:45
I make a I make a lot of introductions.
2:35:47
I I think Rita is a very good investor. Um, no.
2:35:51
I I think the um I think like probably created the most enterprise value.
2:36:03
I think there are companies that I've been a part of, be it Figma or Harvey, where I'm like giving an investor friend a hard nudge and being like, I really think this is going to work.
2:36:16
And like this guy or gal's like good, you should work with them.
2:36:19
And um that included like Andrew Reed had the thesis at Figma, but I was also like you should do this, right?
2:36:26
Like to to Dylan and Andrew.
2:36:28
And I think I think everybody's thrilled about that.
2:36:32
Um, I introduced a uh I introduced my husband Pat to Harvey.
2:36:36
I think that is making progress.
2:36:39
I introduced a very close friend Sinking Zeb to Harvey um at GV.
2:36:43
And so I think I'm like excited about this company, right? Um well, I'm excited.
2:36:48
I'm excited like you know 20 years from now for the email screenshots from you of like all you know all the AI winners being like, "Yeah, I made that intro. I made that intro."
2:36:55
Uh last last question I had and then we'll let you go. I know we're at time.
2:36:58
Uh were were did you did you ever in intend on being a solo GP?
2:37:05
You hired, you know, Mike.
2:37:05
I think that got announced last year.
2:37:07
I'm assuming you just had this like 30-year master plan to like build a real firm.
2:37:14
Uh or or or something like that, but but how did you think about when are you IPOing?
2:37:18
I've heard uh Andre's going out.
2:37:21
When can we expect to buy some shares?
2:37:21
I um I don't think we have the ambitions for selling equity carriers scale. Um, okay.
2:37:29
So, I I think I would be much more interested in how high the hit rate can be. That's great.
2:37:35
Um, and how high the multiple can be and how we are by our entrepreneurs. So, um, master plan.
2:37:39
No, kind of the opposite, right?
2:37:42
I um I I I had a very strong instinct that I like wanted to do I wanted to do early stage investing in a concentrated way and I believe in partnership.
2:37:50
And then also like I was in a big hurry to like get going.
2:37:56
Um, we launched in October of 2022.
2:37:59
If you'd like seen research previews or yeah, played with AI or like thought about it for a number like it was it was accelerating, right?
2:38:07
And and so I thought that there was a window to go figure out what was going on and try to be in great companies.
2:38:14
And so um I'm I just figured it would be better to like start figuring it out and um and like date very slowly, right?
2:38:23
The idea that the perfect partners would be immediately available right when I was leaving Greylock seemed like unrealistic and um it took me a year to convince Mike that he like wanted to work 110% and I'm I'm super thrilled to be working with him. That's awesome. Amazing.
2:38:41
Thank you so much for coming on. Fantastic conversation.
2:38:44
We'll have to have you back soon. See you guys. Have a great day. See you. See you. Thanks a lot.
2:38:50
Coming in next, we got Nick from Light Matter.
2:38:52
gonna go deeper on Nick Light Matter himself in interconnect.
2:38:55
It's a very interesting company.
2:38:57
They raised a ton of money uh all focused on how we can improve uh these huge gigas scale AI training runs.
2:39:04
Uh it's a fascinating company, very deep tech basically.
2:39:10
Um he's going to have to do a lot of explaining for us because I'm not up to speed on his technology, but I'm excited to talk to him. So Nick, are you here? Yeah, I'm here. Good to meet you guys. Good to meet you, too. Um, how you doing today? Doing great. Yeah.
2:39:25
We just had a big launch event yesterday sharing our products and excited to chat and tell you guys what we do. Yeah. Yeah. Yeah.
2:39:30
Why don't you just start with a breakdown of yourself, your company, and what you announced yesterday. Yeah. I'm Nick.
2:39:35
I'm co-founder CEO of Light Matter.
2:39:37
Been building a company for about eight years now.
2:39:40
Um, we're based in California in Mountain View and, you know, we're about eight years old, spin out of MIT and we're looking at the future of computing.
2:39:50
Um so our goal is to continue to make progress on uh the cost of computation, the scale of computation and the energy efficiency in a time when uh computer chips are no longer making progress.
2:40:03
You know really principally the only way that chips get better these days is by if I want to double the performance I double the number of computer chips inside a package.
2:40:11
And so you're seeing over the past 10 years these chips getting absolutely massive. Yeah.
2:40:18
And then the next challenge is around how do you link them together especially in the context of training these large language models for AI and that sort of thing.
2:40:25
And that's what we do is we build these optical links between GPUs to power foundation model training and and that sort of thing.
2:40:32
So how does that interface the rest of the products in the market?
2:40:35
I mean Nvidia is known for NVL link.
2:40:37
I used to have two uh 3090 graphics cards that were kind of linked together over the PCI slots.
2:40:42
like I imagine it's much more complicated on your side, but uh can you give us a little a couple more concrete examples of like how this rolls out, what the timelines are for this type of thing, and what kind of performance gains we can expect to see?
2:40:54
Yeah, so right now uh in terms of timelines, chips are coming out this year.
2:40:59
We've got big semiconductor partners that uh will be releasing uh products this year based on our technology passage.
2:41:04
And the way passage works is it's a silicon phatonix engine.
2:41:09
So it leverages all the semiconductor manufacturing supply chain that's used to build all modern chips today.
2:41:16
So it's built in these big semifabs.
2:41:18
You hear about companies like TSMC, Global Foundaries.
2:41:19
That's where we build the stuff.
2:41:22
And what we do is we 3D stack GPUs and switches, these really like heavy data center AI products on top of our phetonic wafer.
2:41:31
And then you cut out the die size that you want, attach optical fibers, and now you can wire up these massive AI data centers.
2:41:42
You know, you're hearing about XAI with a 100,000 GPUs.
2:41:44
You know, Elon and team deployed that thing in what was it 30 days or something like that. Yeah, that's insane.
2:41:51
Which is break neck speed.
2:41:53
We are the wires, the fetonic links that connect up these massive data centers and the speedups are are enormous.
2:42:00
So, we just announced yesterday 114 trillion bits per second.
2:42:04
State-of-the-art is about 1.
2:42:04
6 trillion bits per second. So, about 100x. Wow.
2:42:10
So, uh obviously there's a lot of trade-offs here.
2:42:12
I imagine that you're Yes, thank you.
2:42:14
The gong goes off when we hear a big number.
2:42:16
Um uh I I imagine that there are trade-offs probably at the early stage cost, but uh are we just talking about speed or is there also a heat component that's important to to think about?
2:42:29
But I know heat dissipation is super important on these big uh training runs. Yeah.
2:42:32
I mean on the heat point, so something to notice like at a global scale, we're building data centers.
2:42:38
Humanity is building data centers that use as much power as the biggest cities on the planet.
2:42:41
So 5 gawatt data centers. New York City is 7. 5 gawatt. LA is 2. 5 gawatt. Yeah.
2:42:46
So if you were to look at planet Earth through a thermal imager, the brightest objects you would see would be the mega cities, the deserts y under uh sunlight, volcanoes, and these new data centers. Fascinating.
2:43:00
That's the scale of of what's being built.
2:43:02
And the real task at this point is how do you wire them up?
2:43:07
How do you continue to drive performance and build bigger monolithic computers to train these AI models? Got it.
2:43:11
Uh how did you process the sort of deepseek moment?
2:43:17
It feels like a decade ago at this point, but it it it you know, the narrative was that they had GPU constraints and so they found more ways to be efficient.
2:43:26
Do you think the American v, you know, sort of like tech world just hasn't cared enough about efficiency to date because it's all been about speed and we sort of haven't had that much capital constraints just because of how much investment is sort of pouring into the category.
2:43:40
But I'm I'm you know sort of broadly curious how how you and the and the team processed it. Yeah.
2:43:47
On the DeepSeek side, you know, what people are thinking is that you don't need as big of AI clusters to build a frontier quality model.
2:43:52
Um and they had some innovations in how they train the model and and some people suspect that a lot of that came from using existing LLMs to build the new model. And that's not novel.
2:44:03
Think about how we design computer chips.
2:44:05
Like the CPU today was designed using the previous CPU and you're stacking up this ladder.
2:44:11
That's how exponentials work. Yeah.
2:44:12
So to me it's like yes obviously that would that would happen.
2:44:14
I don't think it's really slowed things down.
2:44:17
Uh and I think that reasoning models are going to require an enormous amount of computation and they require lots of links like the kinds of fatonic links that we build so that you can take these models.
2:44:29
Have you ever tried deep research?
2:44:31
It's like 12 minutes to get a a result back.
2:44:32
What if you could get it back in one minute?
2:44:34
And what if the energy cost on communications was one? Yeah.
2:44:41
Can you talk about a few of the other paradigms for fighting with Moore's law and improving the speed of these models and inference?
2:44:47
I've you know there's etched which is baking the transformer architecture down into silicon.
2:44:51
There's you know if you look at the history of Bitcoin they went from CPU to GPU to FPGA to ASIC.
2:45:00
Um are you uh excited about in uh data interchange in a world where you know the the latest and greatest Dolly 3 or four model is baked down into silicon into an ASIC.
2:45:13
Uh is that still valuable?
2:45:16
Well, the past 30 years have been a millionx improvement in operations per second for GPUs and for AS6. A millionx in 30 years.
2:45:22
Interconnect is only improved by about a thousandx today.
2:45:27
Interconnect is the bottleneck and the next thousandx in performance for AI training and AI inference will come from interconnect and that's fundamentally what we innovate on.
2:45:36
Uh so so that's the thing that we're excited about.
2:45:38
I think if you look at AS6 it's a spectrum.
2:45:40
You start out with the GPU which is relatively general purpose and then you go to an ASIC that's like okay I'm going to target AI training or AI inference.
2:45:50
If you talk about etch that's saying like let's go even further all the way to the bottom.
2:45:53
I'm going to bake one model into this thing.
2:45:55
Yeah, and of course you should be able to get efficiency gains that way, but these are architectural tricks.
2:46:00
You could have built that computer 30 years ago if you wanted to.
2:46:04
So it's a one-off sort of hit.
2:46:06
What you really need are new scaling laws.
2:46:07
And at Light Matter, we're focused on the fundamentals like how do you make compute faster and more efficient?
2:46:14
Are there new ways to do compute?
2:46:15
How do you make the interconnect faster and more efficient?
2:46:19
We need new scaling laws. Got it.
2:46:19
I I I don't know if you've been following George Hatz's journey with AMD.
2:46:22
Uh but some of the foundation model labs and the folks who are working on these big AI models have been kind of banging the table saying like the cost per flop should be better with these other chip manufacturers and yet I'm locked into Nvidia's ecosystem effectively because of bugs and just go fix the bugs.
2:46:41
Uh do you have any uh push back that you have to overcome when you're pitching a somebody who's building a big cluster to say hey slotting us in is not going to create any extra overhead on your software engineering team.
2:46:59
Yeah, that's you know that's one of the exciting things.
2:47:02
We're not building processors.
2:47:04
We're building the interconnects that link them together.
2:47:05
It requires no change to any software and thank God for that. That's amazing. There's there's no lift.
2:47:11
And the TAM for this thing is absolutely massive.
2:47:14
300 billion a year spend on AI hardware.
2:47:16
About 30% 25 to 30 is networking.
2:47:20
And that's where we play.
2:47:22
So it's an enormous market that requires no software change.
2:47:24
You can run CUDA, whatever you want. It's all fine.
2:47:27
So what are the major hurdles or or like next milestones for you in terms of scaling up? Do we need new machines?
2:47:33
Do we need new machines that make the machines?
2:47:36
Is it just are you are you demand constraint? supply constrained.
2:47:40
How are you thinking about the next roadblocks in the business?
2:47:41
So, I would say that the the ramps are happening now in terms of volumes.
2:47:46
So, this technology silicon ponics attached to GPUs, attached to switches, it's happening now.
2:47:52
You're going to see roll out in 26, 27, some of these big data centers are going to be using it.
2:47:57
And the trick will be can we make sure that the supply chain can handle it if everybody comes online at the same time. right now.
2:48:03
I don't think that that's possible, but I think you could handle um at least half of the world demand.
2:48:10
There's about 14 million GPUs or XPUs that are shipping per year.
2:48:15
I think you could get at least half of that.
2:48:16
And it's not too hard to imagine building out the capacity to get the rest of the way.
2:48:21
But the tech's been ready for prime prime time, you know, for a couple years now, uh with us.
2:48:24
And it's been an eight-year journey.
2:48:26
So, it's not exactly overnight.
2:48:29
We've been working on, you know, all the problems on every front for quite a while.
2:48:32
Well, you we're still going to call you an overnight success when you go public and finally, you know, deliver some massive quarter.
2:48:40
We're going to say, "Oh, yeah, you know, it just happened all of a sudden."
2:48:42
Because we love we love overnight successes.
2:48:44
How skeptical are you when you see new seed stage anything on the the hardware side of AI?
2:48:49
People love to come out and sort of make these big promises and then some companies actually can manage to get public just purely on big promises. Um, how Yeah.
2:49:01
How like do you think we need more founders coming in and starting to build at at the hardware level or is it just so hard that you know focus on the rappers and you know do we need like to start a an activist short hedge fund because he seems like he knows the science here and can probably make some good calls but I'm sure he's too nice to do any of that. Yeah.
2:49:20
do any of that. Yeah. So I would say that um the pitch early on so we started in 2017 that was the AI accelerator boom you think about graph core senova like all of these companies Sarah all coming out largely that's been a really tough slog like it hasn't really worked out I
2:49:37
wish those guys the best yeah you know you know to be frank here I wish them the best but it's hard the software mode around Nvidia the the adoption the models are designed to fit on Nvidia GPUs like that that is the moat like everything is architected for Nvidia and so good luck bringing in something else. So the new pitch, the new like uh pitch
2:49:55
So the new pitch, the new like uh pitch for these guys is everyone did this wrong.
2:49:59
I know what they did wrong.
2:49:59
If you just do this, it's going to be fine.
2:50:03
But my fundamental issue with it is you're all using TSMC in the exact same node with the same packaging technology.
2:50:10
You can't tell me you're going to have some breakthrough.
2:50:11
It's the exact same tech. That's fascinating.
2:50:13
Well, good time to be in the compliments to Nvidia, not in the not in the substitutes business. Love this. I like your strategy.
2:50:22
Uh, this was a fantastic conversation.
2:50:24
I honestly I didn't know about the business last week, but I'm super excited we got to talk to you and uh we'd love to have you back. This was fantastic. Thank you so much. Awesome.
2:50:33
Yeah, happy to be on and and thank you guys.
2:50:34
Yeah, congrats on and congratulations and we'll talk to you soon. Cheers. See you.
2:50:41
Switching gears, we're going over to overnight success.
2:50:42
an 8-year overnight success. An absolute dog.
2:50:44
Uh we got to we got to hit the size gong again for all the big numbers we heard from that.
2:50:50
Didn't understand most of them, but uh liked his attitude and size gong. I love the size gong.
2:50:56
Uh well, we got Rome mortgage coming in the temple of technology in just a few minutes. Uh fascinating business.
2:51:02
Heard about this and the pitch made so much sense.
2:51:04
You're locked into a 2% a 3% mortgage fixed. You want to move.
2:51:09
you feel chained to that specific house forever.
2:51:11
That shouldn't be the way it is so you can move and and and and uh kind of keep your rate or sell your sell your mortgage.
2:51:18
Uh but I want to hear from the founder. So, let's bring him in. How you doing? Hey, John and uh Jordy. Great to meet you guys.
2:51:25
Uh by the way, if you're wondering, I say my name like Ronic.
2:51:30
It's like ironic without the I. Ronic. Okay, great. Uh thanks so much.
2:51:32
Uh would you mind I tried to give the pitch. I probably botched it.
2:51:36
Would you mind giving me the pitch uh for Rome just from the horse's mouth?
2:51:39
Yeah, it's basically you can buy a home with a 2% rate.
2:51:44
You know, the basic problem we're solving is that today there's millions of sellers who are locked up at home because they have this 2 or 3% rate.
2:51:51
They don't feel like there is a value or ability to be able to move.
2:51:53
And 75 million uh families in the US cannot afford a purchase because of how high rates are.
2:51:59
So, we help buyers wind back the clock and purchase the home with the seller's mortgage included. That's amazing.
2:52:05
uh is this a uh a regulator regulatory innovation or a technological innovation?
2:52:10
Why didn't this exist a decade ago or is it just a function of we didn't need it when rates were low? Yeah.
2:52:17
So actually, you know, these were very popular in 1988 when mortgage rates went from 2% to 15 to 17%.
2:52:22
And at that time all mortgages were assumable actually.
2:52:27
And you know for uh other reasons because of the savings and loan crisis we ended up regulating it such that all the other homes had to have their loan paid off uh when the home was sold so we could avoid you know everyone just purchasing the home with sellers mortgage but what remained were these FHA and VA loans so the government back loans and there were 1.
2:52:47
loans and there were 1.5 trillion of them basically if you think back to the low rate years of 2020 and 2021 when everybody was getting a 2 or 3% mortgage that remained assumable but the problem was nobody knew how to find them because no seller knows what type of loan they have and if they know what type of loan they have they don't think there's a marketing advantage to it and even if
2:53:06
you know by the grace of God you could find one of these loans it was impossible to transact on them because the banks made less money on it so we thought we could build a platform that basically vertically integrated all the problems within that you know uh purchase process and give it to consumers as a simple tagline buy a home with a 2% rate come to Rome and you know you can find all the homes that are relevant. Yep. Uh yeah. So break down uh Yep. Uh yeah.
2:53:24
So break down uh I guess what what like the obvious thing is just like for Rome to be you know truly uh you know widely just incredible, right?
2:53:39
You just need scale, right? You need options, right?
2:53:43
when people go and they're looking at a specific some people want to go down and you know I have friends that want to move to to where I live and like they're trying to buy one of like60 homes and like 90% of them aren't on the market.
2:53:56
Maybe some are for rent and some are for sale.
2:53:57
So how do you think about just getting um getting it feels like it's a supply problem in terms of just getting the supply on and then once you have the supply then the demand is just obviously there. Yeah.
2:54:09
So, we actually did something pretty scrappy.
2:54:11
You know, I think had we waited for every seller to come on board, it's like any other marketplace issue.
2:54:16
If you wait for all of the supply to come on board and opt in, then try to aggregate all the demand, it's going to take like 5 years, you know, and by that point, consumers have lost interest.
2:54:24
So, what we did is we actually in a pretty novel way found every home in America and then every mortgage record in America and cross-pollinated it.
2:54:31
So, we just loaded up all the supply on the site. We didn't I love it.
2:54:36
Like, yeah, I'm on board.
2:54:36
So you solve the supply side because you can uniquely show all of those homes and then you just hammer demand and you're basically like hey do you feel priced out?
2:54:46
There's nothing wrong with that.
2:54:47
All of us feel like we can't afford to purchase a home today and there's a better way you can actually afford to do it and it's credible and legitimate and trustworthy and in cases where you know for instance like the banks wanted to drag their feet on closing some of these transactions.
2:55:00
So you know we were like let's just pay for it.
2:55:03
like let's say that if it takes longer than 45 days to close, we'll pay for the seller's mortgage until it closes.
2:55:08
So, it's kind of a combination of using technology to find all of the homes that are relevant, taking advantage of some of the partnership stuff and getting some of the mortgage lenders to come on board and see that there's value in this.
2:55:17
And then also just like really pushing on the experience, you know, like I tell the team every day like if somebody doesn't want to close one of these, I will personally call and we will make sure that this gets cold closed, you know?
2:55:30
It's like just uh do people ever realize that that they have an like an assumable mortgage and then try to sell their house for more because they're like look your car your carrying cost is going to be a lot lower.
2:55:41
You should be able to bond market pay more right.
2:55:42
Uh I know John has a very low uh low mortgage rate and I was like he was like you know if he ever moves he could be like well pay me more.
2:55:53
Yeah pay me more because your carrying cost is going to be lower. Yeah. Yeah.
2:55:56
where does the value actually transfer or acrewue?
2:55:58
actually transfer or acrewue? So basically an independent group of economists recently studied Rome and it's always fun you know when you like start a company you're like okay we have like these set of ideas on like what the seller's going to get what the buyer's going to get and what's going to happen but like independently a group of people who'd never even spoken to me studied
2:56:14
Rome and what they found was sellers get 5% more for their home sale when they sell their home with their low rate mortgage included buyers save $700 a month and that if this option was widespread it would remediate basically
2:56:26
the lock in effect you see today and one of the reasons I got really excited excited about starting Rome was that I was at Open Door before this, which is how I had a chance to work with Eric and Keith. And uh I just pulled 50,000
2:56:34
And uh I just pulled 50,000 homeowners and asked them, "What's the interest rate on your mortgage and what's your preference share for selling to Openoro?"
2:56:41
And like 90% of people who had a 7% mortgage were willing to do it.
2:56:45
But if you had a 2% mortgage, you would only do it like 5% of the time. Wow.
2:56:47
So intuited there was like a large chasm both emotional and functional that they wouldn't be willing to cross, but somebody could give that optionality to them. That's cool.
2:56:56
Can you take us through the news today? What are you announcing? How'd it come together? Give us the story.
2:57:01
Yeah, so uh today we announced that Keith and Kosla led an 11.
2:57:06
5 million round into Rome with Founders Fund.
2:57:08
We actually only had two investors.
2:57:10
Um and the whole process happened in like a week, so it was really fast.
2:57:13
But we're thrilled to continue working with uh Founders Fund and Coastline.
2:57:17
You know, Founders Fund led the preede and the seed round.
2:57:18
And it's been great to have a chance to work with Keith in all three uh investments that we've done.
2:57:24
So preede, seed, and series A.
2:57:26
Keith led all three rounds and then he joined the board alongside Eric who is the founder of Open Door in series A.
2:57:32
And in terms of the use of those funds, I imagine it's almost entirely R&D.
2:57:36
You're not putting up any capital for these mortgages or buying things.
2:57:42
There's no It's a very assetike business, right? Exactly.
2:57:45
So, we're not taking any capital risk.
2:57:47
You know, I still hold all my open door shares RIP and uh you know, saw some of the dynamics there, but uh basically we help people without putting balance sheet risk on.
2:57:56
We're like connecting all of the layers through the stack.
2:57:58
So, uh, yeah, no balance sheet risk in the business. That's great. Uh, what do Oh, sorry. Yep. Go.
2:58:04
Do you just get frustrated that, you know, there's millions of people that are, you know, looking at Zillow all day long and you're just like like I feel like the big problem in terms of scaling Rome is just like making people aware of it now.
2:58:19
Like do you walk down the street and yell at people and just say like, "By the way, have you heard about Rome?
2:58:23
like you can get a 3% mortgage.
2:58:24
Like if I were you, I'd just be screaming it like on the street like a crazy person because it would probably be pretty effective uh marketing.
2:58:30
Uh but I but I'm curious like what are the next two years look like?
2:58:35
This almost feels like you know uh you know with the series A it would be not super practical to spend it entirely on a Super Bowl ad, but this almost feels like the kind of business that you could be doing this just sort of like mass, you know, at scale marketing and and and find results with that. Yeah, exactly.
2:58:52
I mean, I you know, I like walk into a bar and the first thing I ask people is like, "Do you want to own a home?"
2:58:57
And then, "Do you feel like you can afford a home?"
2:58:58
And like nine out of 10 people want to be able to own a home, but like one of 10 people feel like they can.
2:59:03
So that's immediately like the opportunity to tell everyone about is like, "We can close that gap."
2:59:07
And then we think about getting distribution in three ways basically.
2:59:10
So, we tell sellers and listing agents who like actually have that inventory with an assumable loan that instead of advertising like everyone else that you got a cozy two bed, two bath garage in Decar, Georgia, you need to lead with the fact that your home is differentiated compared to everyone else because it comes with a 2% rate.
2:59:26
That's why somebody's going to buy it.
2:59:27
You know, it's because it's not a rate that they can afford.
2:59:28
And for buyers, it's as you mentioned, more mass market, just getting the word out there through media as well as through some now we're trying a few paid channels.
2:59:35
uh but telling people that they can actually afford a home with a 2% rate.
2:59:41
And then we're actually getting uh like some other partners, you know, like mortgage servicesers and agents to distribute the product for us to their clients because they see there's value in it now, too.
2:59:50
So, a lot of the distribution, you know, we had found signs of early on, but now we're diversifying that and bringing out really what's going to be super repeatable as we look to get to like, you know, massive scale.
3:00:00
Sorry, I'm not distracted.
3:00:03
I'm just shopping on Rome right now.
3:00:04
There's some absolutely banger mortgages available here and I'm seeing uh some potential future in Yeah. Yeah. Yeah.
3:00:12
I'm like it's way honestly uh I think people what you need to tap into is people's addictive behavior around Zillow. Oh yeah. Totally.
3:00:20
And you just need to convert that to because the dopamine of seeing like I see a house that's uh seeing a number that's like oh two grand a month or three grand a month like it's like oh that's like completely like the shot goes away.
3:00:33
I'm seeing a house that is almost three times as expensive as my house within a half mile but the mortgage is only like 60% more. Yeah.
3:00:46
And it's like that is like the dopamine rush for a user to be that sort of like basically take the magic of like look home shopping and then you just make everything like you know whatever whatever the average is 30% cheaper from a carrying cost standpoint because that's what ultimately drives affordability for most people.
3:01:06
That's why we have this right through visualization everything on Rome because you know we didn't even need to make a map if Zillow would have done this.
3:01:13
If you go to Zillow and you search for like, I don't know, like a city like Houston, and you go in keyword search because that's how you'd have to find it, and you just look for sellers who are advertising assumable loan, you'll find like literally two results.
3:01:24
And then if you come to Rome and search in Houston, you'll find 2,000 results.
3:01:27
And it's because sellers don't know they have it.
3:01:31
And Zillow is basically just feeding what the MLS gives them, which is like, you know, an uninformed perspective into it.
3:01:36
And uh, you know, we raised the capital, too.
3:01:37
We had some investors ask like, "Oh, what happens if Zillow does it?"
3:01:40
And I'd be like, "Great."
3:01:41
You know, like now everyone knows.
3:01:43
put a button on there that says buy this home with Rome and cut your monthly payment in half.
3:01:47
So it becomes like a firm for home buying where it's button on every listing card in the US to help you cut your monthly payments in half. Yeah, that's very cool.
3:01:54
Uh I mean speaking of customer acquisition, like what is working and what do you think the next year of customer acquisition will look like? Yeah.
3:02:01
So right now what's really worked super well, you know, preede seed series A, like when we did the preede, you know, and we're like, okay, like is this a real problem? Like let's announce it.
3:02:10
Uh it was like the front page of the Wall Street Journal, you know, which like blew me away.
3:02:14
And uh that's not because of me or anything that I've done.
3:02:17
Like nobody even knows who I am.
3:02:18
It's mostly about like the fact that it resonates with so many people that they feel like they can't afford to buy a home.
3:02:24
And so we saw that continue for like the last 18 months basically that there's just, you know, quarter million buyers that come to the site and we didn't pay for any of them and they're just like looking to be able to buy a home.
3:02:35
Now it's like, okay, how do you really deepen that penetration and get to work within each of the local markets?
3:02:40
And so now we're finding ways to work with agents, which like for listing agents, hey, let's help you win more sellers because you can actually show them why you can get them to move.
3:02:49
Kind of relating to that study I done at Open Door.
3:02:51
And for buyers agents, it's like, hey, you got like 10,000 contacts in your CRM that basically said, "No, I'm not interested because insurance is high, taxes are high, prices are high, rates are high.
3:03:02
Go and re-engage all of them.
3:03:02
be like, "Hey, if I got you in a home with a 2% rate, you might find that you don't get qualified for 325K, but now you get qualified for 475K."
3:03:10
So maybe that makes you interested in buying a home now.
3:03:13
So, have you seen have you seen investors using Rome to buy homes with the intention of just leasing them out because like I imagine, you know, I'm just like scanning the marketplace around LA.
3:03:26
There's rental units that I'm, you know, or I'm seeing like three bedrooms that are whatever for like four grand.
3:03:32
I'm like, I know where that is.
3:03:34
It's probably like a 7 8K a month rental.
3:03:35
And if you're an investor looking at this, I don't do anything in real estate.
3:03:40
I prefer highly liquid private shares of my friends companies, but uh there a lot of opportunity I imagine just like in in kind of like, you know, potentially alpha on on Rome. Yeah, totally.
3:03:50
So, we actually launched a page just for that.
3:03:54
I think if you go to the homepage, there's a tab called investors.
3:03:55
So, it shows you all of the homes that have an underlying VA loan.
3:03:59
Those don't require primary residency and so any investor can purchase that.
3:04:04
You can put in the cash and you can take over that loan and, you know, go on to lease it out.
3:04:09
So, we facilitate those all the time.
3:04:10
And most people don't even know that's possible.
3:04:12
You know, there's so much misinformation about this stuff because if you think about it, nobody's really incentivized for it to succeed.
3:04:16
Um, most people are incentivized to originate new mortgages at 7%.
3:04:20
Not like to recycle the cash to purchase your friend's mortgage at 2%.
3:04:25
Yeah, that makes a lot of sense. That makes ton of sense. Very exciting.
3:04:29
Uh, well, now we know you.
3:04:29
We know how your name and uh, yeah, we really appreciate you stopping by. This was fantastic.
3:04:35
And congratulations on the series A.
3:04:36
Congratulations on stacked uh, stacked lineup too on the whole size going for you. So, enjoy it. I appreciate that, guys.
3:04:43
And then if there's anyone listening who is interested, I think of it as like the Manhattan project for housing affordability and we're actively hiring.
3:04:50
This is going to be the most important and I think only solution to affordability in the next 5 years.
3:04:55
Politicians talk about like, oh, we'll increase permits or something like that.
3:04:59
That's just not going to take impact to like 2035. Sure.
3:05:00
You want to contribute to making it more affordable today, email me.
3:05:03
I respond to every single email. I'm ronic with rom. com. Raqqrome. com.
3:05:08
So well, thanks for coming on. Fantastic domain, too. hit the Yeah. Yeah. Oh, it's with with Rome. Sorry.
3:05:14
Uh hopefully you're getting Rome. com soon. Soon. Soon. That's series B money.
3:05:19
But we will have you back as soon as the series B drops and anytime there's housing news, we'd love to chat with you about it.
3:05:26
Um but have a great rest of your day.
3:05:28
Thanks so much for stopping by. Great to meet. We'll talk to you soon. See you. Bye.
3:05:33
Uh well, you know, if you're looking for a new house and you're roaming around, you're trying to see if you want to live in a community, go on Wander, find your happy place, test it out, rent a luxury home, and then get on Rome and buy a house next door.
3:05:43
Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and 247.
3:05:48
What do we say about wander?
3:05:48
We say find your happy place. Find your happy place.
3:05:54
And we also We're getting better every day at that. Yeah, we are. We're getting good.
3:05:57
Uh well, let's go through some news and some uh some timeline.
3:05:59
Uh this is an exciting story.
3:06:02
So the co-founder of Robin Hood has started a company called Aetherflux.
3:06:06
Etherflux uh and Chad Buyers was posting about it.
3:06:10
Uh Baiju co-founded Robin Hood and helped scale it to a $40 billion company is today.
3:06:16
He's back with a new company to help deliver energy from space.
3:06:17
Excited to be a small angel to work on space lasers.
3:06:22
So they're putting solar panels in space as I understand it.
3:06:23
I I had uh I got like a pizza with him like a long time ago.
3:06:27
I think he'll be able to come on the show in a few days.
3:06:28
Um, and uh, and and I think they're putting solar panels in space and then beaming the energy down with lasers to a receptacle that that takes the energy and uh, it's all very sci-fi and futuristic, but I'm I'm excited to hear how he built out that model because that feels like something that lives and dies by the Excel spreadsheet of like what are launch costs, what do the cost of the solar panels cost?
3:06:50
And if you play it out, there's a bunch of controversial things about like are we going to black out the sun?
3:06:54
Like will we be able to see the sky?
3:06:56
There's there's uh, space trash based junk questions.
3:06:58
Uh there's also a ton of hard tech engineering stuff.
3:07:02
We've talked to Delhi a bunch about how hard it is to actually manufacture something, get in get it into orbit quickly.
3:07:07
And so lots of challenges, but I love that he made a bunch of money in finance and then is taking it into hard tech.
3:07:13
This is what we saw with Elon.
3:07:14
This is what we saw with a lot of folks who had this is what everybody says.
3:07:18
They say I'm going to I'm going to I'm going to get the bag and then I'm going to change the world.
3:07:20
Few actually and he's doing it. So get there.
3:07:23
So yeah, happy to support and I'm sure we're going to see a lot more from his company in the near future.
3:07:27
Um, I wanted to cover the Circle IPO filing.
3:07:29
They filed their S1 yesterday.
3:07:31
Uh, we have a post from Omar, who I believe's over at Dragonfly.
3:07:35
He says, "Nothing to love in the Circle IPO filing and no idea how it prices at 5 billion.
3:07:40
Gross margins getting crushed with distribution costs."
3:07:44
Um, for those that don't know, Circle pays Coinbase, as an example, a lot to effectively distribute the stable coin.
3:07:52
Um uh Omar says core US market being deregulated and banks and financial institutions about to crash the private party spending over 250 year in compensation another another 140 million in GNA core income driver which is rates already topped and heading lower 90% chance of two cuts this year um and it we're they're pricing it at 32 times 24 earnings for a business that just lost its mini monopoly and facing several headwinds.
3:08:24
Uh, and it's expensive when growth is structurally challenged.
3:08:27
TLDDR feels like a hailmary for some liquidity before the squad rolls in.
3:08:31
So, who is the squad in this case?
3:08:33
Oh, it's just all the banks and other financial institutions that will launch their own equally stable coin. Sure. Sure. Yeah, that makes sense.
3:08:40
Um, I heard a take from a crypto investor I was texting with.
3:08:43
with. uh she said uh you know there's no real crazy take here but it's the first uh stable coin IPO which is just a cool way for public markets to have a clearer way to be long stable coins generally and so that's a product that really hasn't existed prior you had to go into
3:08:59
the private markets and invest in something like bridge which Sequoia did or you had to go onchain and do all this more manual stuff and get some like leverage and do all these crazy DeFi things and now you'll just be able to buy it on public.com
3:09:10
com so if you are invested in Circle and waiting for the IPO and you're stressed out.
3:09:17
What kind of bed should you sleep? An eight sleep for sure.
3:09:19
Absolutely doubts of feel your best days.
3:09:21
Uh, how'd you do last night?
3:09:24
I think I did poorly because I woke up so early because of the Ripling Deal Spy news.
3:09:28
We had to get up early to talk about that story. Dig in. Let me see how I did.
3:09:33
I imagine I'm a little low on total time. I was right. I got a 79.
3:09:39
I was asleep for 6 hours and 31 minutes. What' you do?
3:09:42
We were We were scooping. Yeah. In our defense. What' you do? I I did a 97. 97.
3:09:47
That pales in comparison to uh friend of mine and listener of the show, Bailey.
3:09:53
Uh Bailey Barrow put up a hundred last night.
3:09:58
Congratulations to Bailey.
3:10:00
Congratulations to Bailey.
3:10:00
Give him give him a little gong for that. Little gong moment. Uh but go to eatleleep.
3:10:06
com/tbpn and get yourself a pod.
3:10:08
uh you will not regret it and your uh body will thank you.
3:10:11
Uh who else should we talk about?
3:10:14
Oh uh big news from Patrick Oanosy.
3:10:16
Uh he's uh launching issue number two of Colossus Review.
3:10:21
We we did a whole deep dive on the first edition of Colossus Review.
3:10:23
It was a fantastic uh interview and and really a lot of content in that magazine.
3:10:30
Not not light on content at all. Uh great layout.
3:10:32
Um it will be free for everyone online that the print is magic.
3:10:36
You got to get the print edition.
3:10:38
That's a good strategy, by the way.
3:10:38
And I feel like one of my friends had um his parents had a subscription to National National Geographic since like the 80s or something.
3:10:48
And so he has a collection of every single magazine of National Geographic.
3:10:53
And so when you go over to his house, he'll kind of say, "Oh, like what month and year were you born in?"
3:10:58
You'll pull out the National Geographic from that year and you can kind of see what's going on in the world at that time.
3:11:02
It's kind of a fun like party trick.
3:11:04
And it's not every day that you get a chance to actually say, "Okay, I think this will be I think Colossus Review will be around for a long time.
3:11:11
If I order the first one and then stay subscribed forever, I could wind up with a library full of these things and actually have a complete collection."
3:11:18
Uh, and I'm not saying that that's going to be like wildly valuable.
3:11:20
It'll just be a cool artifact to put in your library one day and a way to understand history from the lens of Patrick himself.
3:11:28
Uh, I'm I'm just excited this becau about this uh because the topic. Yeah.
3:11:33
because the topic Green Oaks is is one of those firms that is intentionally goated under the you know they they're in many ways under the radar.
3:11:40
You don't see them on the timeline a lot but then every time there's a you know10 billion plus exit and they're they're way in there.
3:11:48
So snuck in um very excited. Yeah.
3:11:50
So they're covering Neil Meta and Green Oaks.
3:11:52
It's written by Jeremy Stern and you really won't want to miss it.
3:11:54
So check back tomorrow uh to get a copy of Colossus Review. Can't wait.
3:11:59
I mean, I think Colossus Review, I'm I'm I'm super bullish, super long.
3:12:05
I wish uh you know, Patrick obviously posts about it and he talks about it on his show, but I think he should buy some billboards and I think he should go to adquick.
3:12:11
com and I think he should make you know focus on put Neil on the 101. Yes, 100%.
3:12:15
I'm sure he would love that. I'm sure.
3:12:18
Yeah, I'm sure Green would love that.
3:12:20
Uh I mean, Adqu would allow Patrick to tackle out ofome advertising in an easy and measurable way.
3:12:27
Yeah, you know, Patrick and Colossus, they'd be able to say goodbye to the headaches of out of home advertising because only Adquertise and data to enable efficient, seamless ad buying across the globe.
3:12:37
And so, it's it's kind of a no-brainer for Patrick. Text him, let him know.
3:12:40
Um, should we go over to this this fun story that people were generating uh AI generated receipts trying to fool the expense management softwares? Ramps on the case.
3:12:54
They solved it within within 24 hours. within 24 hours.
3:12:56
Eric Lyman posts speced, designed, and widely shipped to production in under 24 hours by Will Ye and the applied AI team at RAMP.
3:13:05
They uh and he shares the Michael Jordan meme of I took that personally.
3:13:10
Chat GPT's new image generator is really good at faking receipts.
3:13:11
Well, you're going to have to try harder, good luck, to sneak it by your ramp expense policy because ramps on the case.
3:13:18
What What's the scenario where somebody's generating a fake receipt?
3:13:22
they uh didn't catch a picture of the receipt. No, no, no.
3:13:26
I I I think it would be you you your you you know your boss says, "Hey, yes, you can go and take people out, but you can't get a bunch of drinks."
3:13:33
And so you go and you say, "Yeah, we were at the we we we went to this restaurant and we bought salads and we weren't buying liquor."
3:13:41
Basically, something like that. That is wrong.
3:13:43
You know, you could change that.
3:13:44
No power because you're not going to be able to change the name of the swipe on the credit card, but you could fake the items that you purchase.
3:13:50
So you could say, "Yeah, I went to Best Buy, boss.
3:13:52
I got a new office chair, but really you got an iPad and you like sold it or something like that."
3:13:58
So like that type of fraud, I think is what not not to give you any ideas, but that that's the type of fraud you want to avoid.
3:14:02
And that's the reason why why why RAMP like is whole built around like take a picture of your of your receipt so you know actually what people are are are buying on the corporate cards. Yep.
3:14:14
Anyway, um speaking of ramp, go to ramp. com. Say both.
3:14:20
A lot of people say, "Oh, Wander is where you find your happy place."
3:14:23
But when it comes to corporate cards, expense management, and bill pay, RAMP is where I find my happy place every day.
3:14:30
Use corporate cards, bill payments, accounting, and a whole lot more all in one place.
3:14:33
Um, what else would be good to go to before we wrap it up?
3:14:38
Um, we got, uh, I liked I liked, uh, to round it out Chris Baky's post on summary quote.
3:14:47
He said, "Uh, the plan, you're James Bond, but it's at a global payroll company, and you only get 5,000 euros a month, and when you get caught, you'll lock yourself in the bathrooms and delete your LinkedIn account, break your phone with an axe, and immediately confess and join the It's a great summer.
3:15:06
Join the uh, you know, the enemy.
3:15:09
It's such a bizarre story.
3:15:12
It's really entertaining.
3:15:12
It's the truth is stranger than fiction.
3:15:14
You can't really can't write this."
3:15:15
Um it is the new the new season of Silicon Valley.
3:15:20
Everyone, what a wild what a wild day. But yeah.
3:15:22
Um and yeah, thank you to all the sponsors.
3:15:25
Uh show's been really fun. Go to public.
3:15:28
com investing for those who take it seriously and check out Poly Market, Adqu Wander, Bezel, Numeral, all of our sponsors.
3:15:36
We're really grateful to them.
3:15:38
Do it all in We got to get a new We got to get a new So I was looking on Poly Market.
3:15:43
There's a lot of stuff on who will acquire Tik Tok.
3:15:46
Apparently, Apploven and Amazon emerge as Tik Tok biders ahead of the deadline.
3:15:53
So, right now, uh, Perplexity, Larry Ellison, Oracle, etc.
3:15:59
I don't know if App Appven I don't think is even listed or or people.
3:16:07
Yeah, we're not seeing it up there.
3:16:08
So, we're going to get this update or we're going to get this market updated uh because app is in the race and last I checked I'm going to look on public uh app actually had the market cap to potentially absorb something like this and they have you know the uh I mean just the last thing we should cover today because it is news today uh the tariff announcement did happen.
3:16:32
Uh Trump gave the speech at the Rose Garden for Liberation Day and the result is that uh the US will impose 10% tariffs on all imports and even higher rates for some nations.
3:16:44
The president opened his remarks Wednesday by saying new tariff policies would make America wealthy again.
3:16:48
He said he would be announcing reciprocal tariffs on countries across the world.
3:16:52
It can't get any simpler than that.
3:16:54
You tariff us, we tariff you.
3:16:56
Later, Trump held up a chart with a list of countries saying it was too windy to put on an easel, which is kind of funny.
3:17:02
There's a funny image going around.
3:17:02
There's a funny image going around. uh he began to read off the list with tariffs of the countries imposed on the United States and then the tariff he said the US would levy in response he said that the US was going to be charging a discounted reciprocal tariff
3:17:15
because the US is kind for China the US is levying a 34% tariff then for Europe we're going to charge them 20% Japan Japan 24% is going down 31% tariff on Switzerland meaning that the price if of your existing watches just went up and uh in general the market seems to like it. Uh the Dow Jones is up half a
3:17:37
Uh the Dow Jones is up half a percent, the S&P 500 is up point6 and the NASDAQ is up8% today.
3:17:43
And so not a not a bloodbath in the markets.
3:17:48
Um people were expecting some stuff, they got some stuff, they got some they met their expectations and so things move forward.
3:17:53
The march of capitalism marches on.
3:17:56
We should have Joe on tomorrow. Sure. It' be fun.
3:17:58
I don't know if we have time. stack lineup tomorrow.
3:18:02
Joe Weisenthal would be great.
3:18:04
One of the top posters in the world.
3:18:07
But uh wait, we got to give away We gota So let's give away the dom tomorrow.
3:18:12
I realize we didn't prep and and pull all the reviews and everything give away. Little bit of an update.
3:18:18
We are we are giving instead of instead of drinking a bottle of Doming, we are regifting a bottle of Dom Pering.
3:18:26
And so leave us a review on Apple Podcast or Spotify.
3:18:28
Send us a screenshot of your review and you will be entered to win this wonderful bottle of Don Peron.
3:18:35
It is a 2015 vintage if you care, but we think it all tastes pretty good. Everybody cares. Thank you folks. Thanks for watching. Cited for