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Today is Thursday, May 15th, 2025. It never gets old.
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We are It gets old from the Temple of Technology, the fortress of finance, the capital of capital.
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We're a little bit brighter today. We're warming things up.
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more welcoming to the to the guests, more welcoming to the fans, more welcoming to the viewers.
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Uh we got a great show for you today, folks.
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Let's pull up the graphic to show you who's coming on.
5:19
We got Delian from Founders Fund, Alex from Worldcoin, Josh Wolf from Lux Capital, Jason Frerieded from 37 Signals, and Eugenia from Replica.
5:29
Quite the eclectic group.
5:29
Yeah, we really put together crypto in there.
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There's some venture capital in there.
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There's some AI in there.
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There's some 37 Signals is just like a legendary tech company but has built outside of the venture capital world going backtoback with a venture capitalist. Yep.
5:44
Uh kind of sworn enemies in some ways. Very true. Very true. It should be fun.
5:49
I'm excited to ask Jason, what do you love about the current state of startups? Yeah.
5:54
I don't know if he'll have an answer. Yeah.
5:57
But I'm sure I mean we were talking about this earlier just this idea of like you know there are startups out there right now.
6:05
Everyone knows that they're good businesses, but they shouldn't raise venture capital.
6:07
He's kind of the king of the company that didn't need to raise venture capital.
6:11
And uh I feel like that message needs to be out there for entrepreneurs, not for VCs, because they're going to earn their fees no matter what.
6:17
Even if they pump it into a company that well, you know, they need to deploy. Yeah.
6:20
And they should and they should avoid backing companies that don't need venture capital and just stuffing the goose like a swag. Yeah.
6:28
Um, but I would like to see a scaled platform VC, you know, make Base Camp an offer they can't refuse and then invest $500 million into the company and then try to IPO it.
6:43
It just becomes the most uh most capitaliz comes in puts in.
6:47
There's definitely there's always a number.
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You know, they've been offered a bunch over the years and and always turned it down, but everybody's got a number.
6:54
I think for for 37 sales, it's not a matter of the number.
6:58
It's the matter of there needs to be a car above the aston Martin Valkyrie.
7:02
So, as long as they as long as the founders can afford Valkyries, they don't need to do the incentive.
7:06
But if some if Aston Martin were to drop a car maybe at the $300 million mark, all of a sudden conversation, it would definitely start a conversation.
7:15
Definitely start a conversation.
7:16
Anyway, uh we have an exclusive in the Wall Street Journal from Warren Buffett.
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He has Yeah, in many ways it's our exclusive now.
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We have the only copy of this newspaper. We do. We do.
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It's not breaking news until it's on TBNN.
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That's what we like to say.
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This edition of the journal is almost like an NFT.
7:33
They they're only making they're only making one of this exact copy.
7:36
Uh anyway, uh Warren Buffett has given an exclusive interview to the Wall Street Journal, and I I thought it was just a fantastic uh the way that they quoted him was particularly interesting.
7:47
So, uh basically, they're they're trying to dive into why did Warren Buffett retire?
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Why did he hand the the the reigns to Greg Ael?
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The answer should be kind of obvious, but Buffett is revealing that it was because of his age.
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He's starting to feel old for the first time.
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Uh and so uh he's 94 and he gave the do the top job to Greg Ael and he says uh in recent years Buffett has finally observed how much energy his appointed successor brought to each working day and how he had his own days had slowed the two men were operating at different speeds increasingly slow.
8:19
I see you over the I was hovering over the golden retriever mode.
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Okay, but I'm not going to hit it.
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There was no magic moment.
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Buffett, now 94, said in an interview with the Wall Street Journal, "How do you know when how do you know the day when you become old?"
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Uh, Bergkshire shareholders and online and onlookers have long wondered how anyone could replace Buffett for decades, a towering figure in American business and finance.
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But as he passed his 90th birthday, Buffett began to experience some people some something most people come to accept much earlier in life, his age.
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And this quote really stood out.
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He says, "I didn't really start getting old for some strange reason until I was about 90."
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He said by phone from his office in Omaha.
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He's not using Zoom to be clear here.
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But when you start getting old, it does become it's irreversible.
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Use of the Mdash, which has been controversial because chat GPT loves to throw an M dash around, but he was on the phone.
9:10
Yeah, maybe he prompted this response.
9:16
Yeah, maybe they were talking to 11 verbally said M dash. It's irreversible.
9:21
No, but the M dash is is interesting here because they're they're quoting him.
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so directly, it would have been very easy for them to to rewrite that quote as as but when you start getting old, it's irreversible, right?
9:32
Just take out the little misstep in the sentence. But they didn't do that.
9:37
They quoted him directly and they said, "But when you start to get when you start getting old, it does become it's irreversible."
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And so they're they're recreating exactly what happened on that phone call.
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And I thought it was it was almost like an emotional moment because it's it's it's the quote he's he's saying that he's aging, but the quote is so direct.
9:55
It's showing that he's aging. Totally.
9:57
So, that was very interesting.
9:59
They give some more context here.
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He began to lose his balance occasionally and sometimes had trouble recalling a person's name.
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Suddenly, the newspapers he read looked like they were printed with too little ink. Brutal.
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In the past year, those sad, but it's also natural. I mean, he's 94.
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He's been on a generational run.
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Uh on May 3rd at the Bergkshire annual meeting, Buffett stunned into the investing world when he revealed in the final minute minutes of his question and answer session his plan to step down as CEO in December and make way for Abel.
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Uh those filling the arena in Omaha fell silent as Buffett who's in his 60s. Yeah.
10:32
Which means that he 62 could potentially go on a three decade run just to get where Buffett is today. Yeah.
10:41
Uh, and so, uh, there there's a whole bunch of backstory that we've already covered here, but he says the difference in energy level and just how much he could accomplish in a 10-hour day compared to what he could accomplish in a 10-hour day, uh, compared to what I could accomplish in a 10-hour day, the difference became more and more dramatic.
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So, Buffett's just seeing that Abel is more capable of running the business uh, for these long days.
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uh he was just so much more effective at getting things done, making changes in management where they were needed, helping people that needed help someplace, but just all kinds of ways.
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It was unfair really not to put Greg in the job.
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The more years that Bergkshire gets out of Greg, the better. Yeah.
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And this wasn't fully priced in.
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Uh you saw this in the market. The stock dropped.
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A lot of people said, "Why why weren't people expecting this?" Right? He's 94.
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And uh overall I think the execution on the news was smooth, right?
11:32
He didn't say I'm stepping down on Monday.
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Uh this is clearly you know I imagine he would want to keep going but uh he understands that it's the best for the shareholders which he has devoted his entire life to.
11:47
Well if uh Greg Ael wants to cut those 10-hour days to just eight hour days he should get on ramp. Save time and money.
11:54
Today we are talking about Are you going to play the ramp song? Ramp. Keep doing the read.
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Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place. Go to ramp.
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12:06
Thank you to RAMP for sponsoring the show.
12:07
Anyway, um Brian Chesy is in the news with Airbnb.
12:13
Airbnb is in midlife crisis mode. He announced Airbnb 2.
12:18
0 and did a piece with Steven Levy in Wired, kind of breaking it all down.
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And Ben Thompson dropped a great analysis.
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And so, uh, can we play the clip of Brian Chesy giving his keynote address?
12:31
Brian Chesy last year came out with kind of the inspiration for founder mode, which Paul Graham catalyzed into an essay.
12:36
Uh, but Brian Chesy really said that if you're running a company, even if you're not a product company that's releasing a new iPhone every year, you should drive your software company to annual releases and start thinking in in annual cycles.
12:51
We've seen Flexport pick that up. We saw Figma do that.
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did that to sabotage upstarts that want to compete with Airbnb by saying, "Hey, just ship once a year.
13:00
Just ship once a year instead of every week." Don't ship weekly. Don't ship daily.
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Just get on get on my program. This is good. Yeah. No, it's good. It's good. He's an absolute dog.
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Anyway, uh let's hear from him about his plan for Airbnb 2. 0.
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What we're building is much more than a travel app.
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It's a global community in the real world.
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where you can travel anywhere, live anywhere, and belong anywhere.
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This is what we're building.
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And to think it all started with an air bed.
13:36
Pretty good presentation style.
13:39
It's a little slow for my taste.
13:39
I prefer him when he's off script and just riffing and high energy, but I get that the audience is different. Riffing high energy.
13:48
Yeah, plenty of allegations.
13:51
Plenty of allegations which we won't discuss, but I think he's I think he's uh you know clearly presenting I mean it's a big moment, right?
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He's transforming Airbnb into something new and totally it's risky and so he needs to send the message to the investing community. It's a public company.
14:08
He needs to send the message that he's a steady hand on the tiller through this uh you know new version. Uh, yeah.
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And he's just very clearly a student of Steve Jobs.
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Like this feels like an Apple keynote from 15 years ago. Yeah. And so and that's okay.
14:25
It's not the most original, but it it it um it's effective and it comes off as as Yeah.
14:32
as serious as of a company as they are. Yeah.
14:35
Uh so the wired piece starts uh by telling an anecdote about Brian Chesky.
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Says the reinvention of Airbnb started with the coup of at OpenAI.
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On November 17th, 2023, the board of OpenAI fired C company CEO Sam Alman.
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His friend Chesy left into action publicly defending his pal X getting on the phone with Microsoft CEO and throwing himself into the thick of Altman's battle to retake OpenAI.
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Uh uh 5 days later, Altman prevailed in Chesky.
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I was so jacked up, he says, turning his buzzing mind to his own company, Airbnb.
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Thanksgiving weekend was beginning.
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Uh, the Chesy extended family had already held their turkey get together a week earlier. Interesting. He celebrated early.
15:15
Uh, and the Airbnb CEO had no ide he was just like, I want to be grinding while my enemies are are, you know, enjoying their turkey dinner.
15:23
Is this like some contrarian alpha that we're finding right now?
15:27
Just have Thanksgiving a week early.
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So he has no holiday plans.
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So everyone else is off so he can just work.
15:32
I guess I mean I guess you know it is a Thursday and so if you just have Thanksgiving on the Saturday previously the alternative is that Airbnb gets so hectic around holidays.
15:43
Maybe he wants to just be very online in the office. Yeah, that makes sense.
15:47
I mean it's like it's like Black Friday, you know, a lot of DTOC entrepreneurs are are working over Black Friday, Cyber Monday.
15:52
Uh the holiday rush is certainly busy at most consumer companies.
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Anything that's being gifted.
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So yeah, maybe he's just learned that he's got to be online then.
15:59
Anyway, uh he completely he was completely alone in his sprawling San Francisco apartment except for Sophie, his golden retriever.
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Let's hear for golden retriever mode.
16:09
Activate golden retriever.
16:09
I love golden retrievers.
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I We saw some at the Jet X uh terminal in Oakland.
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A couple A couple beautiful dogs. Look at that dog.
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John was basically having a full-on conversation with these two golden retrievers and the owners were not having it.
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They're like, "Leave us."
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They're like, "What are you doing?"
16:26
If you bring dogs to the airport, it's open season. Yeah.
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People can pet your dog if you're in a public place like that.
16:34
Anyway, uh still wired out of his mind from the cathartic corporate rescue, Chesy began to write.
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He wanted to bust the company he'd co-founded out of its pigeon hole of short-term home rentals.
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Amazon, he was fond of pointing out, was first an online bookstore beca before it became the everything store.
16:51
Chesy had long believed that Airbnb should expand in a similar way.
16:55
So what is Airbnb's market cap right now? Can you look that up?
16:59
So this is what's really interesting.
17:00
So they are an $84 billion company right now, but they are down uh across the lifetime of the company.
17:09
Yeah, they kind of been I mean there was the COVID up and down.
17:10
They're all time they're down 1. 6%.
17:13
So if you bought Airbnb shares 5 years ago, you would be this is the story of Snapchat.
17:20
This is a story of a lot of the non-hyperscaler tech companies that got out and they're fantastic companies.
17:26
I mean, nothing to, you know, be upset about if you're running an $85 billion company, but you got growth is addictive and growth is what everyone wants.
17:33
And if you're not growing, you're stagnant.
17:34
And as a former bodybuilder, this is like him sitting at, you know, 255, you know, benching four plates for reps, but not able to break that, you know, ceiling.
17:46
Never get the the uh not But the chart looks like a kangaroo. It does.
17:49
looks like a kangaroo up and down, up and down, up and down.
17:52
Never really built massive momentum. Yeah.
17:55
And not not compounding anymore in the way he wants.
17:59
So, he needs to find a second act.
17:59
And so, Chesy had long believed that Airbnb should expand in a similar way, but things kept getting in the way, dealing with safety issues, fighting regulation, coping with the existential crisis of a global pandemic.
18:08
The company was in danger of being tagged with the word that ambitious entrepreneurs dread like the plague, mature.
18:15
Now, Chesy was embod emboldened to lay out his vision.
18:18
Home rentals are as simply a service. Why? So why stop there?
18:21
Airbnb could be the platform for booking all sorts of services.
18:23
While other apps cover specific sectors, food delivery, home maintenance, car rides.
18:28
Chesky figured that Airbnb's experience in attractively displaying homes, vetting hosts, and responding to crises could make it more trustworthy than competitors and therefore the go-to option for virtually anything.
18:37
In a frantic typing spree at the dining table, uh dining room table on the couch, the bed, and at times his office, Chesy specked out what how he would redesign the Airbnb app.
18:47
its users now at two billion.
18:49
Wow, that's a lot of users. I had no idea.
18:51
Uh would open up the app not only at vacation time, but whenever they needed to find a portrait photographer, a personal trainer, or someone to cook their meals.
18:59
Chesky reasoned that Airbnb would need to significantly strengthen its identity verification.
19:05
He even thought he could get people to use the app as a credential, something he as respected as a governmentisssued ID, if he could transform Airbnb into a storefront for real world services.
19:15
It's amazing because I feel like seedstage founders go through this type of brainstorm in a very equally frantic way. Yep.
19:22
But usually they don't have an $85 billion company yet.
19:27
Usually it's more like they're thinking through their, you know, fundraising pitch deck and they're like, "Oh, we could do this. We could do that. We could do this."
19:34
He actually now has earned the right to think at this scale, right?
19:38
Being already, you know, two billion users. Yep.
19:41
uh you know, global company.
19:44
Uh I think he's in a great position to uh think a lot bigger. Yeah.
19:50
So, let's uh go over to the Ben Thompson analysis and see what he has to say and his analysis because uh there's some good there's some good stuff.
19:58
There's some green shoots, but there's some obviously some economic uh issues that Brian will have to work through if he really wants to pull this off.
20:03
So, uh, Ben Thompson is reviewing the overview of what Chesky is pitching and says, "Uh, it's a beautiful vision that unsurprisingly is a lot like Airbnb itself.
20:14
The problem is that I'm not sure that it's a compliment.
20:17
Uh, while Chesy romanticizes Airbnb's founding story, and the idea of making friends with strangers anywhere in the world, the reality of Airbnb is often much different.
20:27
professionalized hosts you never see giving you codes to non-escript condos or houses with endless rules and fees all governed by fake courtesy and the fear of a bad review.
20:38
More broadly, setting up Airbnb as a counter to everything that has allegedly gone wrong with tech is an interesting choice when Airbnb is arguably more emblematic of tech's recent impact than any other company.
20:49
On one hand, Airbnb has created new markets uh that didn't exist previously, transforming real estate from static assets to much more dynamic ones and providing a dizzying array of new choices to travelers.
21:00
On the other hand, the cost of the former has been the transformation of residential neighborhoods into awkward hotel districts.
21:06
And the latter has entangled has entailed creating a massive market and making everything into a transaction.
21:11
Those marketplace dynamics govern everything.
21:14
Airbnb hosts have a fixed asset that needs to maximize utilization to earn money.
21:18
That means that they are beholden to a service that brings huge amounts of demand consistently minimizing the number of vacant nights.
21:24
Travelers for their part want something other than a hotel for whatever reason.
21:28
Families with kids for example that still want a mechanism to establish trust.
21:32
Airbnb succeeds by bringing these parties together at scale.
21:34
Or to put it another way, the route to connecting real people with real assets necessarily first entails atomizing both sides of the market such that only Airbnb can bring them together.
21:42
Sure, real people in real houses is different than looking at a screen, but it's arguably less enduring and meaningful.
21:47
precisely because of how impersonal the and fleeting the transaction is.
21:51
And so the dynamics of Airbnb, this is kind of the key question is can Airbnb move into other services and there's a big question about disintermediation here.
22:01
Um, and so the the interesting thing here, yeah, Jordy, the disintermediation issue I don't think is that significant really.
22:08
And the reason the reason for this is that experiences, at least in a travel setting, are the kind of things, how many times a year are you going to get, you know, go rafting in Mexico, right?
22:21
You're going to go once uh you're going to go once, call it, every few years when you go to vacation in Mexico, right?
22:27
not like building some intense relationship with the service provider so that you're going to say at some point, hey, I know we're both paying a bunch of fees. Why don't we go around?
22:37
The difference is one of the services that they're offering through the new app is massages, right? Personal training. Personal training.
22:42
These are these are things where you see this person on a frequent basis.
22:46
You develop a you know some type of friendship and ultimately there's going to be a conversation at some point where the service provider says 15%. Yeah.
22:54
And that's why a lot of the marketplaces that have operated in these spaces like dog walking are much more much closer to lead generation services in that uh the company you know the the platform over time really struggles to retain uh its top customers and top u talent or or top providers right yep I mean I think the good take is this idea of like uh Airbnb 1.
23:21
0 0 was let's disagregate Craigslist into a bunch of different software companies, but now Airbnb is saying like let's reagregate it.
23:28
And there are a lot and there are a lot of longtail services that are just one-off things like you only get your house painted every once in a while.
23:36
You only need u you know a specific type of gardener to go look for a specific plant every once in a while.
23:43
There's specific thing tree trimming might not be something where you have someone on a monthly retainer and you can have that relationship.
23:47
But for something like dog walking, it's going to be every day or every week pretty quickly there's going to be there's gonna be risk there.
23:54
And so, um, Ben Thompson continues saying, "Consider experiences, which Airbnb already tried to get off the ground eight years ago.
24:00
I didn't realize it was so long ago, but it made sense as like a compliment.
24:04
You're, you know, on a trip with a bunch of friends and you want to add river rafting in Mexico, which I think was what your example was, which I don't even know if there's that much river rafting in Mexico, but I'm sure there is. John, somewhere. You want to bet? Yeah, there is. I'm right. UFO tonight.
24:18
Yeah, tonight in the presentation, Chesky derides traditional tourist traps like sightseeing buses or famous landmarks and promises that bespoke tours or classes from locals will be much more meaningful.
24:29
The problem is that bespoke means marginal costs which are only manageable with very high prices.
24:35
Very high prices, however, much mean much lower demand.
24:39
Thus, what you act what you actually get end up getting are cookie cutter experiences that can be delivered with relatively low marginal costs, which are exactly the experiences Chesky derides.
24:50
Notice that this that this is in fact exactly what happened with the traditional Airbnb rental.
24:53
While there are incredible houses that you can rent for very high prices, the bog standard Airbnb experience is depersonalized and automated to the greatest extent possible.
25:02
Uh at the same time it is precisely because real estate is a fixed cost that hosts are motivated to make it all work.
25:09
Experience providers on the other hand don't have either don't have fixed costs and thus lack the necess the necessary motivation to make scaled experiences work.
25:20
I think it's interesting to note, you know, the reason that Airbnb or one reason it's been so successful is you can have a bunch of random strangers staying in a property that you own all year long and the property will generally still appreciate, right?
25:33
There's going to be wear and tear on the house.
25:35
The reason that Turo and other platforms haven't had the same potential scale, right? They're big companies.
25:40
Is because you're taking an asset as if you're on the um asset side and that's a depreciating asset.
25:49
you're letting 100 strangers drive your car for a year, that that asset is going to drop tremendously in value.
25:56
And so, can you kind of recapture that through revenue? Yes.
26:01
But, you know, it it it oftentimes isn't as good of a trade as just having somebody stay in an old home or vacation home that you're only using a few times a year. Yeah.
26:10
I think like 90% of the Turo economy is built on podcasters filming stunt vibe reels and marketing stunts basically that's and fake Instagram.
26:20
Yeah, the gurus the guru the guru market is massive.
26:22
The guru uh I wonder what I think Turo is doing pretty well and I think the the tour experience for me I I I flew to New Mexico for a birthday party and uh and you know there was an F-150 waiting for me at in the parking lot. It was great.
26:35
It was much easier than going to the rental car counter and getting, you know, uh some some subcompact or something like that.
26:40
Uh so uh um let's see uh from the wired profile that we were covering earlier, Chesky explains that historically people used Airbnb only once or twice a year, so its design had to be exceptionally simple.
26:55
Now the company is retooling for more frequent access.
26:57
Open the app and you see a trio of icons that act as gateways to the expanded functions eventually.
27:02
Chesky says Airbnb will offer hundreds of services perhaps as far ranging as plumbing, cleaning, air car repair, guitar lessons, and tutoring, then take its 50 15% fee.
27:10
So, I mean, even if that does work out as lead genen, there's probably a business there.
27:17
The question is just is that the business that produces an incremental $85 billion in market cap, right?
27:21
Like, could they could they build double the company front end to plumbing, cleaning, repair, kind of an Angie's List style business?
27:30
I don't know what Angie's List trades for.
27:31
Um, could they take that market maybe, but is that an incremental five billion in market cap, 10 billion in market cap? Who knows? Yeah, it's interesting.
27:40
I mean, Thumbtac is another comp here.
27:41
They'd be entering that space.
27:43
I don't I'm trying to Thumbtac is private.
27:46
Last round was done at 3. 2 billion. Yeah.
27:49
Um, and hard to move the needle at an 85 billion market cap for Airbnb.
27:53
Uh, the fact that end users only use Airbnb once or twice a year is precisely what makes the entire service work.
28:00
Again, Airbnb matches up hosts who need their properties occupied as often as possible with travelers who only need a property once or twice a year.
28:06
Solving that mismatch is the foundation of the entire business, and it's well worth Airbnb's fee.
28:11
The need fundamentally changes when it comes to dayto-day life in your hometown.
28:14
Yes, users need help in finding service providers, and yes, service providers need help in finding customers, but the goal for both, however, is to establish long-term relationships.
28:24
Once you have a hairdresser, you want to visit the same hairdresser repeatedly, not find a new one every time.
28:30
And by extension, neither you nor the hairdresser has any interest in has any interest in uh in including Airbnb in every transaction forever more.
28:39
In other words, what Airbnb is proposing may end up being valuable, but it will be very hard for Airbnb to capture that value in a meaningful way.
28:45
So yeah, maybe there's a lead genen component and then it does drop to more of a payment processor because at 5% transaction fee, you might stay on the Airbnb platform because of the reputation and and and building up your profile there, but you're probably going to be closer to credit card processing fees than the current Airbnb fee.
29:01
Uh again, contrast and the the challenge here is there are so many vertical SAS or or SAS plus marketplace businesses for all of these subcategories, right?
29:11
So Airbnb is competing with companies that are heavily funded that can afford to build really specialized tools for the service providers, right?
29:22
So there's vertical SAS if you're running a barber shop and like I think that there's a billion dollar company in that space, right?
29:27
I don't know if if that market could support a$10 billion company, but it can support a billion dollar company that that barbers really love and want to be on, right? Yep.
29:40
So again, uh, well, uh, Ben Thompson goes over to Paul Graham talking about founder mode.
29:46
The theme of Brian's talk was that the conventional wisdom about how to run larger companies is mistaken.
29:51
As Airbnb grew, well-meaning people advised him that that he had to run the company in a certain way for it to scale.
29:58
Their advice could optimistically be summarized as hire good people and give them room to do their jobs.
30:02
He followed this advice and the results were disastrous.
30:04
So he decid so he had to figure out a better way on his own which he did by studying how Steve Jobs ran Apple.
30:10
You identified that correctly.
30:12
Uh so far it seems to be working.
30:14
Airbnb's free cash flow margin is now among the best in Silicon Valley.
30:19
And so uh Ben Thompson says I think there is a lot of truth to the idea that the most innovative companies are best understood as mechanisms to manifest a founders's vision and that founders can heir by giving up too much control and not getting deep into every aspect of the company.
30:31
You certainly get a sense for Chesky's desire to control every aspect of the product both in his presentation in that Wired profile and in another profile in the Wall Street Journal where Chesy explicitly invokes jobs. Yeah.
30:42
So he says when I asked him for names that personify founder mode, the first he mentioned were Steve Jobs and Walt Disney.
30:48
I don't want to ever put myself on the same level, he said.
30:52
I'm more like a disciple.
30:52
I'm more like a painter who studies Michelangelo.
30:54
I'm not ever saying I'm going to be Michelangelo, but I believe in that school of thought. Yeah. smart.
31:00
He goes on to say that he admires Jobs and Disney as creatives who sat at the intersection of art and technology. No way. That's the meme. That's the meme. It's a huge meme. That's the meme. I listen.
31:12
We in many ways create this show at the intersection of art and technology.
31:16
And that he doesn't identify as an entrepreneur or a business person.
31:20
I think of myself as a designer.
31:20
He says, "I'm a designer who has been afforded one of the biggest canvases in the world." Yeah. Beautiful line.
31:25
Chesky spent a lot of time focused on app details like the icons and the animation and everything looks great.
31:31
The problem however is that Jobs was creating products and Disney was creating experiences.
31:35
In both cases, the attention to detail was critical to how many people wanted to buy iPhones or visit Disney World.
31:41
Chesky on the other hand has created a marketplace and the success or failure of marketplaces is not governed by the details of icons or the layouts of apps but rather by how much blunt how much more blunt instruments like incentive structures and take rates.
31:56
Um yeah it's very very interesting.
31:59
Um there was one criticism of the spicy from Ben.
32:01
Little spice and a little spice. Yeah. Yeah. Yeah.
32:04
Um, yeah, there was some uh I I saw some like kind of negative feedback on X uh to the Airbnb launch.
32:11
They were quote tweeting the video and they were saying that like they should have used more B-roll and made this more human.
32:18
Instead, they're showing us a lot of UI.
32:20
And I just think about the Airbnb UI as being like fees and charts.
32:23
And yeah, the beauty of Airbnb is that in a simple way, you can get access to incredible spaces and experiences, right?
32:31
And that's what's expected.
32:33
You don't want to be thinking every time I'm in the Airbnb app, it's money, it's cost, it's headache.
32:38
I'm there because there's a problem, right?
32:39
And so that they actually need to minimize that message.
32:44
I'm saying this doesn't look anything like what the pictures the pictures you had.
32:49
Uh which has created obviously an opportunity for Wander.
32:52
So uh uh sponsor of the show by the way.
32:55
Uh so Ben closes out by saying there there these are the dynamics that undergur my skepticism of Airbnb's new offerings.
33:01
The impression I get from the presentation and profiles is that Chesy seems to think that the first version of experiences failed because the app wasn't good enough.
33:08
I think it failed because the economics don't work.
33:12
There was of course similar skepticism about Airbnb's core offering from the beginning.
33:16
It's one thing to look backwards and describe the arbitrage opportunity that was available in short-term rentals and another to have understood that opportunity when Chesky rented out that first airbed in 2007. What a fantastic story.
33:25
Uh moreover, one way to think about the impact of AI is that it will create the conditions for massive market expansion in real world experiences and services that can be done by that can't be done by computers.
33:37
It's plausible that Airbnb can leverage its huge user base, which is massive, two billion, remember, into riding a wave that may now be forming.
33:45
So that's that's kind of the bull case that he's laying out there is everybody becomes posteconomic after ASI and everybody just does Airbnb experience long and personal trainer maybe or just hang out.
33:56
You know I think in many ways Airbnb is safe from some amount of disruption to the core business which is a a hyperscaled you know uh vacation rental platform.
34:07
Uh but at the same time uh you know it's hard to undersea where you know at once they're at two billion users right where's the growth going to come from?
34:18
That's tough um especially when you have you know new providers like Wander which are coming in and potentially you know uh and we're seeing this already just eating away at some of the highest value uh users. Yeah.
34:29
And also I mean just for just for a comp Hilton Hotels is a $60 billion company.
34:38
So it's like even if they were Marriott is like 77 billion. Okay. Yeah. Uh Marriott. Yeah. So even Yeah. 75 today, 74 today.
34:46
So even if they were to go build like a whole hotel chain and enter that market, like again that's still not a 10x.
34:53
That's still not putting them in like the trillion dollar conversation of like hypers scale, which is like probably where you want to go.
34:59
He wants to be in that conversation. I think so.
35:02
That that separates the Michelangelos from the from merely the disciples.
35:05
But I mean, it's been been a fantastic run. It's fantastic.
35:09
Yeah, it is is an interesting dynamic.
35:11
Do you want to own Marriott at 77 billion with it CEO who I can't name a versus Airbnb at just he's going to try something.
35:24
He's going to try a couple things.
35:24
you know, he's going to be doing a different release in a year and maybe there's an entirely new idea.
35:30
I think if he did the Chesky method, a bodybuilding course, he could probably add a 100 million to the to the bottom line that just pure, you know, even better margins than than software.
35:41
He's still looking extremely strong.
35:42
Yeah, he, you know, there's like those old photos of him as a bodybuilder, but he's still looking jacked. Yeah, it's great. Still got it.
35:49
Anyway, at the same time, so Ben Thompson closes with, "At the same time, I can't help but wonder if many of the fr frustrations that Chuck that Chesy chocked up to management mode, manager mode, are in fact for him personally downstream from building a service where one can only guide the outcomes you want, not dictate them."
36:07
The fact that the romantic story he tells about what Airbnb symbolizes doesn't seem to match up with the reality of what Airbnb is may itself be an analogy for Chesy's desire for control in arenas where he has very little. Interesting.
36:20
So yeah, I mean you're building a marketplace.
36:22
There's only so much control you have as opposed to building a product where you can say I'm going to go build a virtual reality headset now or an Apple Watch and it's going to look like this and I'm going to, you know, mold the the screen and make all these products.
36:35
you really just wanted to do product design.
36:36
What's the the classic, you know, founder has an exit and then builds an app that allows you to meet friends in your area and they're like, I just want to build an app to meet friends.
36:46
And then you're just like, no, you're you're building a dating app.
36:48
Like that's who's going to use this. Yeah. Yeah.
36:51
Understanding like the base reality of human interaction.
36:53
I have like multiple multiple buddies who had great exits and then built like that app and then eventually realized what they were building and had to It's the same thing with with the the personal CRM. I want a personal CRM.
37:04
It's like, no, you just want a CRM.
37:07
Like, if you're thinking about your personal relationships in that transactional of a way, you should just think of it as business associates that you're pitching and just use an actual Salesforce.
37:17
Yeah, just use a real CRM.
37:20
Uh, anyway, uh, some news in the chip world.
37:23
The US has scrapped the AI diffusion rule in a revamp of Biden era chip curbs.
37:28
This was tearing up the internet.
37:31
We were trying to get Dylan Patel on a little bit earlier.
37:33
He's booked in a week or two. He's traveling a lot.
37:35
We'll get him on to break it down.
37:37
There's a few other people.
37:38
Jordan Schneider over at China Talk is on vacation. It's a disaster.
37:40
Uh so there aren't as many people to comment on this as I was hoping, but uh fortunately the Wall Street Journal has a write up.
37:48
And so Microsoft and Oracle have spoken out against the rule.
37:50
The again the uh the the AI diffusion rule.
37:56
Uh the US Department of Commerce said that it's rescending the diffusion rule on the grounds that it would have stifled American innovation.
38:02
saddled companies with ownorous regulations and undermined diplomatic relations with a dozen countries, dozens of countries.
38:09
Nvidia said that it welcomed the Trump administration's leadership and new direction in AI policy.
38:13
With the diffusion rule revoked, America will have a once in a generation opportunity to lead the next industrial revolution and create high-paying US jobs, build new US supplied infrastructure, and alleviate the trade deficit.
38:25
A company spokesperson told the told the Wall Street Journal.
38:28
Tech companies including Microsoft and Oracle had spoken out against the rule which imposed caps on how many chips countries such as India and Switzerland can buy, saying the move would limit US firms opportunities abroad without doing much to hamper China, the main target of the Titan controls.
38:43
It was a little wild that we were limiting places like India, Switzerland, which we have strong relationships.
38:51
I mean, this all started with like the Singapore loophole and the the chips going to Malaysia and it really seems like, you know, this is uh the the sledgehammer versus the scalpel, right?
39:01
Uh everyone's okay with the scalpel.
39:03
People don't like sledgehammers. Yeah.
39:05
So Jeffrey Kesler, who's the US Secretary, under secretary of commerce for industry and security, says the Trump administration will pursue a bold, inclusive strategy to American AI technology with trusted foreign countries around the world while keeping the technology out of the hands of our adversaries.
39:21
So anyways, yeah, I mean is over in uh we got to pull this video up.
39:28
Oh yeah, they made um I mean we're talking about this with Aaron Gin about how it's it's nice to think that oh if we don't sell Nvidia chips to what was the company that you or what was the country that you uh India or Switzerland like oh yeah like America will just have control and they'll have to use OpenAI and chat GPT remotely via API.
39:48
Uh and it's like no actually they will just buy Huawei Ascend chips and run DeepSeek and Manis on top of it.
39:54
Like they're like they're going to want to run their own hardware.
39:58
or they want their AI super fast.
39:58
How the name Manis Manis is a word it makes you sound like like you're from it's so Texas. Manis Manis. Manis.
40:04
Anyway, uh let's pull up the video if we have a We don't run Manis on our We don't take kindly to Manis in these parts. Take kindly to Manis. We only like uh llama.
40:17
So So Jensen has been in the UAE, I think Abu Dhabi.
40:20
Uh, and they built what looks to be. Oh, it's elevating. This is awesome.
40:31
That's not a hologram, is it?
40:31
This looks like a hologram.
40:36
Either way, it's awesome.
40:38
[Music] What a squad, too. Insane showmanship. Wow.
40:47
Anyway, uh another hundred billion to Jetson and he is we got to pull this up.
40:53
I'll uh yeah, he's been on an absolute tear.
40:55
So, uh the announcement also took aim at Chinese tech giant Huawei, stating that using Huawei Ascend chips anywhere in the world violates US export controls, of course, because Huawei Ascend chips are potentially built on top of uh Americanowned IP in the lithography stack and therefore uh can be subject to US export controls.
41:16
Uh the Bureau of Industry and Security, a Comist Department agency, said it will warn the public about potential consequences of allowing American chips to be used for Chinese AI models.
41:24
Uh Rick Sue noted that the Chinese company's advanced AI chips are only sold locally and that demand for them far outweighs supply.
41:32
So Huawei should be able to continue doing business there with or without any changes in the export controls.
41:38
Of course, China has immense demand for uh large GPU clusters.
41:42
They want to train the next version of DeepSeek.
41:44
They think that DeepS is probably going to move entirely to the next training run to Huawei Ascend chips.
41:50
Uh, and although the Huawei Ascend uh, rack mounted unit is not directly competitive with I mean it is directly competitive, but it's not it's not at power dollar parody with Nvidia's DGX. Yeah. On efficiency.
42:04
Uh, it it it can train the models.
42:06
It's just more expensive, but China has a lot of cheap power and is willing to invest.
42:12
And so, yeah, it might cost 30% more to train a massive model, but we're not talking about orders of magnitude, and everything in AI is defined by orders of magnitude. Yeah.
42:20
Anyway, do you have another Yeah, I have another screenshot to pull up, which is just a funny chart to look at because you can see the exact moment that Jensen really started cooking. Yeah. Oh, there we go.
42:32
So, this is the largest company, end of May, which we've been tracking. Neck and neck.
42:35
And Microsoft was at some It's hard for me to see, but I think about 80%.
42:40
This is just for the end of May.
42:42
So, we're halfway through May.
42:44
Everyone's So, last Monday, uh, yeah, Microsoft was sitting at over 80% and then Jensen said, uh, one second.
42:54
So, right now, uh, Jevans Paradox undefeated, there will never be enough venture capital.
42:59
They said they're going to study.
43:00
They're going to put Jevans paradox into preschool after this.
43:05
really getting people to understand.
43:06
We're so bearish on Nvidia and look at what happened.
43:08
The more dinosaur toys you get, as dinosaur get toys get cheaper, you're going to want more.
43:15
You're going to and you're going to buy more. That's true.
43:16
It violates traditional laws of supply and demand.
43:20
But um yeah, so right now, uh Nvidia is sitting at $3. 3 trillion market cap.
43:23
Uh, Tiger actually just rotated out of ARM and um well they they yeah they rotated out completely and increased their position in Nvidia.
43:35
That's good when Tiger's longer.
43:37
Sometimes sometimes they get it very soundboard cue for Tiger. There we go. There we go. Fantastic.
43:42
Uh the change is a big win for countries previously limited from buying chips.
43:48
Notably Saudi Arabia, United States, United Arab Emirates, Singapore, Israel.
43:53
Morning Star uh said the it is also said to benefit US AI players like Nvidia, AMD and Intel of course because they'll be able to sell to more countries and we're already seeing that happen uh for China chip makers and AI companies.
44:03
The changes are likely to have only a limited impact since they are already banned from accessing from accessing US tech and equipment.
44:09
The news comes as President Trump's Trump tours the Middle East and a number of US tech companies announced AI deals in the region.
44:15
Only Intel could be down 30% in the last year during an AI super cycle. So brutal. It's so brutal.
44:23
Bet on the CPU, folks, instead of the GPU. Pick the wrong horse. Generational miss.
44:27
Um David Sax has quoted the right race. The wrong horse. Right race, wrong horse.
44:31
Um uh David Sax says, "The diffusion rule literally restricted the diffusion and or proliferation of American technology all over the world."
44:40
David Sax, Trump's AI and cryptozar, said at the US Saudi investment forum, adding that there is no risk with a friend like Saudi Arabia. They're just friends.
44:50
Uh the original reason for this diffusion rule is that we have a policy of not wanting our advanced semiconductors to go to what are known as countries of concern, but that's not big of as big of a problem now, especially when it's a global competition.
45:04
Anyway, we should move on to Apple.
45:06
Uh they're getting in the Neurolink game.
45:08
They're competing with Elon, going head-to-head, literally putting brains, putting chips in your head.
45:13
So, they're working with a startup on a new brain computer interfaces to assist people with disabilities.
45:18
And uh we'll just start going through here.
45:22
So Apple is embracing the world of brain computer interfaces, unveiling a new technology that one day could revolutionize how humans interact with their devices.
45:29
The company is taking early steps to enable people to control their iPhones with neural signals captured by a new generation of brain implants.
45:36
It could be huge for people that use AirPods instead of wired headphones.
45:41
I was joking earlier there's this company Believe that's going viral on X for um for for you you know Luke Metro was doing this, right?
45:47
He he he basically tagging the account.
45:49
Oh, this is the crypto thing.
45:51
And it and it all, you know, all he had to do was just make a single post.
45:54
It created a memecoin that he's generating.
45:57
Walk me through this future.
45:58
This is really white mirror stuff.
46:00
Um and uh and so there's a world in the future where somebody could just think and a memecoin would be generated based on a thought. Yeah.
46:08
And um that would just be very American. Yeah.
46:10
I mean, a lot of the a lot of the gambling apps are using haptic feedback to vibrate the phone when you win.
46:14
Uh turn the flashlight on and off.
46:17
really flash colors and sound all over to stimulate you while you're gambling.
46:22
Imagine if they could stimulate your neurons directly. Yeah.
46:25
Retention would go through the roof.
46:28
I want haptics in my brain.
46:29
Haptics in your brain just massaging your neurons.
46:31
Just releasing dopamine directly as soon as you open the mobile game app.
46:35
The pick three or the match three.
46:38
Isn't that what they call it? So match three. Brutal. So dark.
46:42
Uh I mean the bul the bullc case here is of course that like neural link right now is an incredible technology for people who are paraplegic. Right. Totally.
46:53
So the the earliest smart for these companies to focus on that. Totally.
46:57
Because that's just such a more optimistic scenario.
46:59
Um and and then and then you know over time allow people to bring things in.
47:05
I mean they're talking about curing blindness, curing deafness.
47:09
There's so many amazing uh amazing potential uses of this technology.
47:12
Like any technology can go good or bad.
47:14
It's up to us how we use it.
47:16
And so yeah, so the interesting thing here is that Apple seems to be letting other companies do the hardcore R&D and go through the FDA process to actually get approval for these devices.
47:29
But they've been doing that more because AirPods are now approved as a hearing aid because they have the the same technology that enables noise cancelling, which is basically there's there's a microphone that's pointed outwards and then they play the opposite of that sound inwards.
47:46
Are you familiar with how noise cancelling works?
47:47
So it like so you're you're hearing both the outside world and then the opposite of the outside world.
47:53
And so that creates the noise cancellation that can also be used to amplify the outside world.
47:57
And that's what happens when you have transparency mode on.
48:00
But if you take transparency mode, which which records the outside of the world and then plays it back over the speaker, if you take that to its kind of logical extreme, all of a sudden you have something that can amplify something that like the just anything you're hearing to the point of actually helping someone who is uh who's heart of hearing, which is very very cool.
48:19
Uh so historically, humans have interacted with their computers mechanically using mice and keyboards, smartphones that are up for the humans. cube.
48:27
Oh, I was going to give it up for the keyboards and mice. And the keyboards, too.
48:33
Peripherals are underrated for sure. Totally.
48:34
Uh, smartphones introduce touch, a behavioral input, but still an observable physical movement.
48:38
A new capability means Apple devices won't need to see the user make specific movements.
48:45
The devices can detect user intentions from decoded brain signals.
48:49
Uh, Apple has worked on the new standard with Synchron, which makes a stent-like device that is implanted in a vein at top the brain's motor cortex.
48:55
So I think this is less invasive than what Neurolink does.
48:59
Neurolink they actually have to drill a hole in your skull roughly the size of a quarter and then and then the device fills in that hole.
49:08
Just a quarter fills in that hole that's left from the skull that's gone.
49:10
And so and then the electrodes are placed inside the brain and then they place the the skin flap back over and it charges wirelessly which is a pretty crazy implementation.
49:22
they needed to invent a robot just to do the surgery because it's so precise and no human hand can replace the electrodes or the the the the neurons appropriately.
49:30
Um but uh this I think would be less invasive because it just goes into a vein and so it's uh as easy as taking some blood basically. Yep.
49:43
and uh the tinfoil hat enjoyers will appreciate that Synchron uh DARPA was in the series A.
49:50
So that's going to go over great on X.
49:53
Yeah, I'm sure they're going to love that.
49:55
Alex Jones will be all over this. Yes.
49:57
Not the founder of the founder of Hollow, who's also named Alex Jones.
50:03
Yes, the founder of Infowars. Yeah, Alex Jones.
50:07
He's going to love that DARPA is uh funding, you know, brain computer interfaces in partnership with Apple.
50:13
He's going to be front of the line. Front of the line.
50:14
Famously loves technology, that guy.
50:16
Anyway, we have Delian, Aspuhoff from Founders Fund and Varta coming in the studio next.
50:20
Um, Varta just released their third or they just brought back the third capsule. Celebrate that. Three for three.
50:29
They said on X, "Is this boring yet?
50:31
Are you getting sick of us?"
50:33
Until Delian comes in, we'll do some ad reads.
50:35
We'll talk about public investing for those who take it seriously.
50:38
They got multi-asset investing, industryleading yields.
50:42
They're trusted by millions folks.
50:42
Their new feature generated assets is just wild.
50:46
You got to go around and play around with it.
50:48
It's just generated assets. com. Oh, cool. Separate domain.
50:53
We uh are going to take 10 different basically you can create indexes with chat. Yep.
50:58
And then you can back test them so you can see how they performed against the market more broadly.
51:02
So tomorrow uh I'm going to get like 10 or so different screenshots of of different indexes that are interesting. But it's interesting.
51:10
You can look at, for example, since we had Andrees on yesterday, you can see, you can look at uh A16Z alumni companies, how they've performed in the public markets, and the results are uh astonishing.
51:22
It actually makes me uh even more uh bullish on these sort of founder public companies.
51:31
So excited to get into that.
51:31
Well, uh as we wait for Delion, let's talk about Linear.
51:38
Linear is a purpose-built tool for planning and building products.
51:40
Meet the system for modern software development, streamline issues, projects, and product road mapaps. Go a linear.
51:47
And when they say the standard, they're not joking.
51:48
It actually I think I don't know how much of these figures are public, but if if there's a tech company that you love in the private markets or in the public markets, they're probably already using linear. So, go check them out. Okay.
52:00
I'm texting Delian and we got him in the studio. Welcome to the show. How you doing, Del?
52:08
Sorry, I promise I'm normally, you know, right on the dot this time. You're all good. What's up? Three for three.
52:11
Three for announcing it here exclusively on TVPN.
52:17
Tell us what happened with the capsule. No one knows.
52:19
So, you're hearing it here first at 6:13 p. m. uh PST on Wednesday.
52:26
Uh you know, early evening, we executed a de-orbit burn uh which you know, happens sort of on the opposite side roughly of the globe from uh Australia.
52:36
Uh, and we came in ripping through the atmosphere 17,000 miles an hour.
52:41
Um, capsule has, you know, GPS all throughout. So, we're tracking it.
52:44
I actually got a good photo of me, my, you know, co-founder and our CTO and me holding a little baby watching that GPS track, you know, sort of coming in.
52:50
It's sometimes a little anticlimactic because, you know, unlike a rocket launch where um, you can kind of do the live stream, you watch it from the ground move up, a re-entry capsule is like moving very, very fast, kind of hard to track, kind of hard to do a live stream.
53:05
And literally the way that we call things out is just like it's got this GPS thing and we know that the parachutes have opened successfully only when we just see that the GPS like vertical slows down.
53:15
This is this is super bullish for the conspiracy.
53:18
There is like oh there's no live stream. Did it even go to space? Uh who knows? Maybe he's making it up.
53:24
I just think you're doing out into the desert.
53:26
You know you need to create some type of way for Americans to bet on re-entry. Oo yeah.
53:34
That is that is just unamerican.
53:34
I mean, I know you're bringing it down in Australia, but it's frankly unamerican that uh you're not letting us all, you know, place our place our bets, but um was pushing me on, you know, you should figure out how to make more gambling in aerospace.
53:49
And I was like, lickb, the easiest way is just like gamble on, you know, sort of mission outcomes.
53:53
And so this how we know we're not at peak gambling yet is there's not enough gambling on all these hyper specific technical outcomes.
53:58
People will gamble on like, you know, will Starship land, but I want it like down to like the individual, you know, sort of like, you know, meter of just like is it going to take 5 seconds to land, 6 seconds to land, like is it going to come in a trajectory?
54:12
We live in a hardware world. Yeah.
54:12
Well, speaking of betting and and uh instead of P Doom, what's your P dome?
54:17
I want your take on the Golden Dome.
54:19
Uh what's the probability that we America gets a golden dome in the next few years?
54:25
And we do have missile defense, right?
54:27
like missile defense is a thing.
54:29
We're not domeless right now.
54:31
Um, but like we're talking about just improving what we have, right?
54:36
We're not flying blind here hopefully. Yeah.
54:37
Let me give the, you know, sort of bull versus bear case.
54:40
You know, all this stuff is, you know, sort of somewhat predicated on obviously what um Israel has been able to show and especially over the past, you know, sort of uh, you know, couple years, you know, especially countering some of the Iranian attacks that have happened.
54:50
Um, if you were to like take the Israeli system and then extrapolate it to like the scale of the United States, it just doesn't really work, right?
54:59
There are really small geography, very dense.
55:01
Um, you know, it is actually possible to set up basically like, you know, missile defense batteries across their entire border.
55:09
If you were to do that across like the entire United States, you sort of border around the continental US and you extrapolate the cost of it, it's something on the order of like a $10 trillion program.
55:18
And we're not fighting with Canada or Mexico or like even like even smaller like states like these are low-flying projectiles.
55:25
They're just wildly different, right? Yeah.
55:26
The threat vectors are also Yeah. totally different.
55:29
You're looking at like Yeah.
55:30
Russia, North Korea, Iran, etc.
55:30
And so that solution set, you know, sort of looks very different.
55:35
And so that's, you know, the premise of Golden Dome.
55:36
And it's the first time that they've opened the Overton window on considering things that aren't just like ground air or sea based for the first time in the Golden Dome language.
55:44
talk about a lot of you know sort of space-based applications in particular space-based uh intercept.
55:48
So the idea there is like if Russia or North Korea basically launches a missile towards the United States rather right now we do have like you said we're not domeless.
55:57
We do have some systems they're basically scattered from like you know Guam to Hawaii to Alaska etc.
56:03
Basically like all of our furthest out areas and for sure along the you know sort of border as well but furthest out areas that are closer to those adversaries to take them out you know before they get anywhere close to the United States.
56:12
The idea is now you can just have a constellation of satellites that are orbiting above North Korea, Russia, etc. regularly.
56:18
So you can take this stuff out before it even gets up into like the upper end of its, you know, sort of trajectory.
56:23
Now that type of system is also not trivially, you know, sort of cheap.
56:27
So here's, you know, my bull versus bear kits.
56:29
You're asking is it, you know, sort of going to happen?
56:31
We proposed a system like this in the early 1980s, right? And Star Wars, right? Yeah.
56:36
Star Wars days, the uh space development initiative, I think it was called, or space defense initiative.
56:42
um they ran some early trade studies.
56:42
It had a lot of enthusiasm in Congress, etc.
56:46
And then ultimately it fell apart partially because the like scale of the economics of it relative to like the you know sort of benefits the defense you know sort of the nation just didn't really you know entirely pencil out.
56:55
really you know entirely pencil out. And so the sort of bare case for you know sort of golden dome would be maybe we end up in that same world where we like start to run these analyses we do these things and then all we do is really just like buy a couple of traditional terrestrial basically missile you know defense battery systems that already
57:11
exist and we make those sensors a little better like the current you know one is this thing called you know sort of THAD is basically like the largest you know sort of system um it actually doesn't have a particularly high hit rate of being able to take out the missiles on the way in and so you know right now I think we have like 40 THAAD missiles and I think they have like something a 25% unit hit rate. So it's like we can take
57:27
So it's like we can take out like 10 ICBMs.
57:29
Russia has like a thousand and so you know we're like a little off on order of magnitude.
57:34
Um so maybe it's like make that one a little more accurate etc.
57:37
So that's sort of like I would say the like maybe not default case but that is like the downside case of like you know we announce this stuff we talk about it when it comes down to like the economics and actually implementing this it becomes too tricky.
57:49
Congress flips from, you know, sort of Republican to Democrat, you know, in the next election cycle.
57:54
They don't want to give, you know, sort of President Trump a win, and so they decide to shut it down.
57:57
The bull case is, okay, well, relative to the 1980s, there's a lot of people that can actually do pretty near-term demonstrations of this, right?
58:04
You know, obviously orbital rockets this year are launching and landing every single day.
58:10
There's a lot of companies that, you know, are looking to pitch in on this that aren't just people that are going to throw out white papers, but are actually like very hardware rich, right?
58:18
um you know there may be a lot of um overenthusiasm in the defense tech you know funding space and ecosystem but like look you know we were talking about this earlier this week like look at what Venus Aerospace you know sort of just demonstrated right like while there is maybe overenthusiasm and you know lots of funding at least people are
58:34
translating into like real hardware demonstrations of like next generation technologies and so if there's a set of companies that before Congress flips is actually able to go and do some real world demonstrations show that this is practical capability get some defense funding, you know, sort of flowing into actually operationalizing those initiatives. So, by the time it flips,
58:50
So, by the time it flips, there's already something that's sort of pseudo operational or very close.
58:54
Now, it becomes a little harder to justify.
58:57
It's like, yeah, there's some political win if you're a Democrat to not give, you know, Trump a win, but like, you know, the defense budget has always been sort of very bipartisan as well.
59:05
That's my sort of like bull versus, you know, sort of bear.
59:08
It's like, you know, the first time in history we can probably demonstrate this really quickly and we've got a 2-year window and it's a, you know, sort of national priority.
59:15
bear is well it's pretty easy for us to just you know sort of flip back to just doing what we you know have always done.
59:22
Uh you mentioned Venus space they put up a post yesterday they said today Venus Aerospace made history we completed the first ever US flight of a rotating de detonation rocket engine proving runwaybased high-speed flight is possible.
59:35
I don't really understand what rotating detonation rocket engine is.
59:37
Do you understand the applications of this?
59:41
Is this defense tech or space tech? Is it commercial?
59:44
is this DoD program like what what is the story here with Venus?
59:48
It's been a minute since you know I met up with the Venus team but the last time that I chatted with them the intention of what they were building was to create these you know sort of space planes that would basically take off from a runway get out of the atmosphere cross across the globe and go land back on a runway.
1:00:03
And so that was sort of a you know sort of commercial um case.
1:00:04
It'd obviously be, you know, sort of very expensive on a per seat, you know, sort of basis, but there's obviously, you know, sort of plenty of people in the world that would pay significant in order to be able to like, you know, get from LA to Tokyo, but do that in like, you know, in theory, you could do that in under an hour basically.
1:00:18
Like if you think about how quickly it takes you to orbit between those two, it's roughly 45 minutes. Yeah.
1:00:21
This is like SpaceX pointtooint. Yeah. Exactly.
1:00:23
but using you know sort of traditional runways rather than having to build out you know all the like SpaceX basically like landing infrastructure like you know their planes can actually take off and land on you know sort of normal normal runways. Yeah.
1:00:34
Um and so their engine definitely you know um you know demonstration you know is the obviously the very key first step of being able to um um and then you know apologies at home today so hey welcome to the stream.
1:00:50
We should just spend the next few minutes just turn this into a kid show. Yeah.
1:00:53
At least at least one of our kids are are probably watching at home. Let's break it down. Uh, Batman or Superman? Dinosaurs. Dinosaurs. Dinosaurs.
1:01:00
Uh, T-Rex or Velociraptor? Uh, fire trucks. Fire trucks. Fire trucks. I like it. I like it.
1:01:08
What about rockets, though?
1:01:10
Rockets versus space planes? Rockets.
1:01:10
I mean, I I think we got to go to our child correspondent.
1:01:13
Is it rockets or airplanes? Rockets or space planes?
1:01:15
I think enthusiastic about both. Oh my gosh.
1:01:21
I can't I can't wait to I can't wait till he's co-hosting the show with with our children.
1:01:25
Yeah, we could only get Delian for 15 minutes today.
1:01:26
It'd be so much easier if you could just delegate this whole this whole call-in thing to your son. Be fantastic.
1:01:31
Be a much more entertaining guest.
1:01:34
Okay, I know we didn't quite make it to the top of the hour, but maybe I'll uh you know go take care of this bad boy. No, this is great.
1:01:39
It's great having both you guys on. Delta V today.
1:01:40
Yeah, we'll talk to you soon. Cheers. Talk soon. Have fun, guys. Bye.
1:01:44
See, that is pro-atalism in action in reality.
1:01:52
Uh, he's not just threading about it. It's great.
1:01:54
Well, uh, let's tell you about numeralhq. com. Sales tax on autopilot.
1:01:59
Spend less than five minutes per month on sales tax compliance. Go to numeralhq. com. My company's on it. Jord's company's on it.
1:02:04
Lots of companies are on it. Benchmark Series A. Benchmark Series A. Thank you to Numeral.
1:02:08
Uh, and let's also tell you about Vanta.
1:02:09
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1:02:13
Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation.
1:02:18
whether you're pursuing your first framework or managing a complex program.
1:02:22
Uh anyway, let's do some timeline and then we will bring in our next guest.
1:02:26
Uh Nvidia, we we we we talked about this.
1:02:28
This next post is great from Bryce. Let's do it.
1:02:32
That SBF built one of the most legendary private investment portfolios of all time tells you more about the business of venture than a thousand podcasts on the subject ever will.
1:02:41
Well, what about this podcast, Bryce?
1:02:43
Because we're we're saying we're saying what you're saying.
1:02:48
He did he did make some good bets.
1:02:51
Nobody can take that away from Cursor.
1:02:53
Curser and Enthropic very very early.
1:02:55
Even though uh David Tish, friend of the show, was also in the original cursor round.
1:03:00
He said that he didn't get into it wasn't like 200k to $500 million, which was the number circulating around.
1:03:06
He said there's no way that that would math out.
1:03:08
Can you imagine if SPF is like secretly got like co-founder shares or something or like got like inc like an incubation type deal?
1:03:15
So, he did get that massive stake at 200k. Who knows? I don't know.
1:03:20
But now someone else owns it. Financial investor. Yeah.
1:03:21
Somebody was able to buy out that cursor position.
1:03:24
And I wouldn't be surprised if we had him on the show at one point. Future guest.
1:03:28
Maybe they might have been in the audience.
1:03:30
They might be listening right now.
1:03:31
They're probably listening right now from their yacht in the Amalfi Coast.
1:03:34
Just off that one bet, basically.
1:03:37
I mean, it's enough, right? Uh, crazy.
1:03:40
Anyway, uh, we already covered the uh the We should cover the Brian Brian Armstrong news.
1:03:47
Coinbase basically cyber criminals bribed and recruited rogue overseas support agents to pull personal data on 1% of Coinbase uh Coinbase's MTUs.
1:03:55
No password, private keys or funds were exposed.
1:04:01
Prime accounts were untouched.
1:04:04
Uh and Coinbase has committed to reimbursing users that were basically you had to be impacted by social engineering attacks.
1:04:12
So people weren't getting support agents to move funds around.
1:04:16
Funds weren't stolen like that.
1:04:18
But it would be, let's say, somebody gets your personal information, you get a random call and they say, "Hey, we were talking about this, how the spam around Coinbase was getting crazy, right?
1:04:26
You'd get spam text saying like, you know, click here to log in or something."
1:04:30
So no, it's truly it's truly it felt like it 100xed like two months ago or something like that.
1:04:35
Great business for these scammers, right?
1:04:36
Like the scammers are it's just whatever money they make is pure profit. Yeah.
1:04:40
I wonder how much of those phone social engineering phone calls now are happening with AI. I don't know.
1:04:45
It has to be a good percentage.
1:04:50
The the spam calls I would get when I pick up were ridiculous.
1:04:52
Just recordings with like music on them and it just didn't sound it didn't sound anything like an actual uh call that you'd get ever. Yeah.
1:05:01
And the and the concern here is that this data is floating around now and people can find out where big crypto holders live and find out what they look like.
1:05:11
There's ID information uh you know as part of this.
1:05:14
And so it's a huge risk if if somebody was on Coinbase and they had you know 10 Bitcoin now somebody could go to their house and say I would like those 10 Bitcoin. Yep. Transfer very risky.
1:05:27
So, it's super unfortunate, but responded very well like with the director camera.
1:05:32
Yeah, the response is very interesting.
1:05:35
They asked for a $20 million bounty.
1:05:36
He's saying, "We're not paying you the bounty, but we will give we're willing to pay $20 million to anybody who gives us information leading to the arrest."
1:05:45
And so, what's a lot of ransom? Oh, yeah.
1:05:48
You haven't even seen it.
1:05:49
And so, so it sounds like a movie plot, but but what happens here is that there's probably multiple criminals involved in this.
1:05:56
And so let's watch them turn on each other because somebody's like, "Well, if they're not paying the bounty to our criminal group, why don't I turn on the big boss, get him in the clink." Oh, wow.
1:06:05
Get the, you know, and uh so anyway, some some interesting game theory and good founder comps by Brian putting up the the video just, you know, not overproduced, just, you know, almost stream of consciousness.
1:06:18
Obviously thought about what he was going to say, but doesn't come off as as stiff or callous or not taking it seriously. So, so good job to him.
1:06:26
Yeah, the information is name, address, phone, email, masked, social, so the last four digits only, masked, bank accounts, uh government ids, account balance.
1:06:36
Uh so anyways, not great, but uh I think this is the best response they could have given the circumstances.
1:06:45
circumstances. Uh and again this is just very rough if you know you're this is somebody who lives in a random apartment somewhere and suddenly they have to be thinking about do I have to be worried you know how you're going to authenticate their bank account in the future world that's right scan your eyeball you
1:07:03
can't social engineer that we got Alex from WorldCoin in the studio welcome to the stream how you doing what's going on tools for humanity founder of tools for humanity sorry worldcoin is one of the co and the world the orb There's a whole ontology of of technology here, but thank you for joining. How are you How are you doing? Good. Thank you for having me.
1:07:22
I'm just at the Andre Horitz LP day. Oh, cool.
1:07:25
Yeah, we just got off You just got off stage.
1:07:27
I literally just got off stage.
1:07:29
So, almost was a little too late, but um yeah, right now in Las Vegas. Uh first time, actually. First time in Las Vegas. I'm really excited. Wow. Narrative violation.
1:07:36
Somebody building in crypto that hasn't been to a crypto conference in Vegas.
1:07:42
Um no, it's great to have you.
1:07:42
We we've been wanting to have you on the show for a while. Glad we made it happen.
1:07:46
Uh and it times nicely with your guys' entrance into the US market in a big way. Yeah.
1:07:51
I mean, maybe you should kick us off with kind of like an overview of where the company is, where you started.
1:07:58
I know there was an international component. Now you're in the US.
1:08:02
There's different products.
1:08:04
There's um different ways to interact with like the overall ecosystem.
1:08:08
Kind of give us the state of the union on tools for humanity. Yeah.
1:08:13
So um maybe uh starting right right from the beginning.
1:08:17
So like a little over five years ago now uh five and a half years ago um Sam Alman from OpenAI and uh actually had part of the initial idea of this and we we met I was in AI before as well.
1:08:30
uh it was uh in theoretical physics and deep learning and so both of us believed that AI will continue to make a lot of progress and very likely we will see AGI within our lifetime which back then was not like a common thing to say. Yeah.
1:08:44
And um and of course like both of us believe that this is mostly going to be a tremendous force uh for good and it's going to drastically accelerate science and technology but also that we will need global scale infrastructure um to kind of really make this a great outcome for everyone.
1:09:00
And so we um started a company together called tools for humanity um that really had that as a mission is like build global scale infrastructure to help with that and um and then the actual kind of coming together of the company there were two main ideas.
1:09:19
One was around the fact that as AI continues to make progress, we will need uh some form of proof of human that is at internet scale.
1:09:28
Otherwise, many of the things that we care about will start breaking down because um obviously like as a society, we form our opinions on the internet on our social networks.
1:09:38
We meet each other on platforms like dating apps.
1:09:42
We entertain each other with uh games that that we play with each other through the internet.
1:09:48
And like the moment we have uh not only passed the touring test which I think we did in the last two years meaning now we have AI systems that we can talk to and we cannot tell anymore just by talking to them that in fact is is an AI but also that we are now about to enter of course like uh strong agentic AI systems real-time video generation all these kinds of things.
1:10:12
kinds of things. Um and so we will need a proof of human internet scale otherwise uh social networks many of the places where you meet online etc will start breaking down and so this was idea number one it's like how could you build such a system um and once you have built
1:10:27
such a system you can use that to launch a digital token by giving ownership in it to eventually every human and as a result you would create what will turn out to be the largest real human network on the internet and so it was a very humble vision uh used to by by Sam. Um and and so we
1:10:43
Um and and so we really uh kind of we took it very seriously.
1:10:50
seriously. We thought about it for a long time and um back then really thought about how would you need to build such a proof of human um if you assume what we did uh which is that AI will become increasingly better and then many of the initial ideas you could have
1:11:06
on how to build such a system like why don't we just use our online reputation so like our accounts that we used in the past we build some kind of reputation graph or what about if we just rely on government identity systems or what if we just use phone cameras to to get some kind of signal. All of these we realized
1:11:21
All of these we realized pretty quickly will either um just break down as a result of AI becoming more okay just like more powerful and better or it just doesn't have the properties that we think such a system will need which is it needs to be global and it needs to be fully anonymous and privacy preserving all of those things.
1:11:39
And so well back then we realized we will likely have to um build a physical hardware device that we have to distribute all over the world and at some point get uh almost anyone that uses the internet to verify with such a hardware device and that everything else will very likely break down.
1:11:55
And that was like a very a very very crazy thing to do uh 5 years ago.
1:12:00
So like people mocked the company for a long time uh and that yeah it was like just a crazy thing to work on for quite a while.
1:12:06
Um, and so essentially talk about uh just going deeper there.
1:12:12
You guys uh went to market internationally first.
1:12:17
I'm sure you had a lot of temp temptation to really focus in San Francisco early on, right?
1:12:21
This is a an area where there's an extreme density of people that understand this broader vision that you guys have.
1:12:28
So I'm curious like thinking about um you know the decisions that that went into that go to market and then also giving our audience a sense of the scale of the operation because I don't think people fully process just how large the operation is.
1:12:45
So um first to the to the first part of the question which is why did we not launch the United States much earlier?
1:12:53
earlier? Um that had a simple reason that because Sam is a co-founder uh everything we do has like a lot of visibility usually and uh in the last administration uh there was basically no regulatory clarity around how to behave
1:13:09
uh as you build these crypto networks and kind of what are the things that are allowed which which are the things that are not allowed and SEC of course like had a posture of enforcement and so given the large visibility of the project. We just took everything always
1:13:23
We just took everything always through a very cautious lens and just decided that we will only enter the US once there is a clear path to regulatory clarity which I think is now the case.
1:13:35
Um and so now we really excited to uh kind of make the servers available.
1:13:38
We launched two weeks ago in the US.
1:13:40
Uh in the US itself it's still a meaning kind of pretty small uh operation.
1:13:44
It's going to take us a couple months to really ramp this up.
1:13:47
Um, and just to give you an overall sense, we're now at 20 25 26 million users in total in our app world app, which is essentially the initial client to make this network useful.
1:13:59
Uh, but kind of you have to think about that there's going to be many clients that will use this this network.
1:14:03
Um but but still and then we have 12 million uh people that actually are verified uh really all over the world from South Korea, Japan uh to um Europe to Latin America and and so yeah the company is now around 4 or 500 people.
1:14:20
now around 4 or 500 people. also tools for humanity and it's a pretty it's a pretty complicated thing to manage because you have everything from on the ground operations um that are somewhat complicated and a lot of things can go wrong to uh of course hardware manufacturing and ramp up to uh a lot of
1:14:38
software so it's it's been quite a quite a journey what what is your background have have you done crypto stuff before or hardware stuff before or managed huge like workforces before because you're doing a lot of stuff and I'm wondering like no I I was um I was I was I was literally a theoretical physicist. So
1:14:54
So just I used to sit at a desk all day and do math and write code. That's fantastic.
1:15:00
I I I did like I did decent amount of self-engineering just because like already back then the clusters got larger but yeah I didn't didn't do any any of that.
1:15:09
So talk about uh yeah talk about how basically talk about bootstrapping the network and the user base with the token right and and um because that's I don't I think I have a good sense for why you would do that but you know the the sort of boomer push back would be you know why does this need to be you know crypto and I think you guys have good reasons for that. Yeah. Yeah.
1:15:31
I think there's two reasons for that.
1:15:34
like first of all of course appreciating that crypto still has like a meaningfully bad reputation just given everything that happened but I think um there's like real technological reasons of why you need to do or why why I think it's best to build such a platform that way.
1:15:47
So one is as it was mentioned bootstrapping where uh all of these networks that we use of course they're absolutely meaningless if they're not at scale.
1:15:57
Um and then so like um that applies to social networks um also applies to financial networks and and so maybe one of the most notable uh examples of that was the launch of PayPal where um you were able to refer your friends.
1:16:13
Your friends had some amount of US dollars in their PayPal account and and and very famously um PayPal spent a lot of kind of a huge amount of the renter funding.
1:16:24
amount of the renter funding. I was of course not there so I don't know how much exactly but a huge amount of the venture funding to get this network to critical scale with that referral program and that then led to network effects and that then led to this turning into among many other things of
1:16:38
course uh into a successful platform and so um the same applies here it's just that these uh crypto networks are valued at billions of dollars if they're somehow working and so I think we can do uh something similar just at a much much larger scale and so we can use uh very likely billions of dollars to kind of really get this network to scale. And so
1:16:58
And so that means that everyone that actually joins this network gets a small piece of it uh through the Rokin token.
1:17:04
Uh and so you actually receive ownership and in in the quite literal network.
1:17:09
Uh but also of course that is an incentive to verify early on where maybe the utility of the network is not fully there yet because it's subscale.
1:17:18
And so that was that was that idea.
1:17:22
And that the second idea is of course that like this is going to be one uh very expensive to build uh but then also extremely valuable.
1:17:29
It's going to be very valuable to many of the largest internet companies uh very likely if we succeed in our mission.
1:17:34
And so we need a business model but not for us as a company but for the entire network.
1:17:40
And so uh that is the second piece.
1:17:41
I think these tokens actually allow you to build a sustainable network. Yeah.
1:17:44
Um yeah and I think now we're actually bridging that gap where it's actually becoming quite useful.
1:17:50
We we now announced the partnership of Match which is the the company behind Tinder, Hinge, many of the dating apps to actually bring prov to uh to these dating platforms.
1:18:01
Uh partnership with Razer which is uh one of the largest hardware manufacturers for gaming hardware to turn that into the standard for for the gaming world.
1:18:09
So I think like we we're actually getting there now pretty quickly.
1:18:12
Uh but of course it's still early.
1:18:14
Can you talk about the scale of bot activity online?
1:18:15
And I have to imagine a lot of people are interacting with bots daily that they don't necessarily realize are bots, right?
1:18:25
There was a high-profile issue recently uh with Reddit where, you know, somebody was running a a scaled influence operation experiment, you know, leveraging, you know, leveraging the power of AI.
1:18:37
And for those that don't know, people were uh that the AI would effectively look back through somebody's comment history and deeply understand the person and then make arguments to them based on their sort of pre-existing beliefs, which is very powerful.
1:18:49
And and obviously it seems, you know, all the users were not aware that what was happening to them and I just have to imagine that's happening, you know, at a at a very wide scale. Yeah.
1:19:00
I so no one really knows of course the actual scale of the situation but I think the the paper that you outlined is from the University of Zurich.
1:19:07
Um so as as you described the University of Curric actually ran an experiment of changing public opinion u by using AIS to respond to just like a comment in subreddits and they actually have been quite successful in uh changing the opinion of these subreddits which is kind of crazy and so uh of course we have like a similar problem probably at meaningful scale on X uh and very likely now every other social network.
1:19:36
Um maybe uh so dating also already at a quite a meaningful scale like you have these now these these accounts that like have photo realistic images and start texting with you and everything.
1:19:47
But I think like maybe the more interesting part is that I think we're like at 1% or something of what I think will happen over the next 24 months.
1:19:56
I think a a big trigger point will be once you have uh an open-source very competent agent.
1:20:03
Um because like that's yeah that's that's where like things will get quite exponential and we're like probably 90 more than 90% of almost all activity on the internet uh almost all content on the internet will be AI created uh sometime after.
1:20:22
So that will lead to the fact that I think for now or until quite recently by default we trusted everything that we have seen and we assumed that it's like authentic.
1:20:31
I think that will completely flip by 180 degrees to by default we don't trust what we see.
1:20:38
We don't trust who we interact with if there is not a way to verify the claim.
1:20:42
Um so it's going to be quite a profound shift.
1:20:45
Uh what was your initial reaction to the to the Coinbase news which was this morning?
1:20:50
Obviously very unfortunate uh potentially leak of you know a bunch of uh personally identifiable information, home address addresses, balances, things like that.
1:21:01
Is that the kind of thing that in the future could be avoided through utilizing your network or is that just sort of a reality of of you know finance today?
1:21:17
So my first reaction was that I think it was a very very strong uh reaction from Brian.
1:21:21
Brian. huge huge fan of Brian's of course but I think um very clear message uh very clear next steps uh and these uh the these things they are unfortunate uh but I think this is like a was somewhat at least from the outside of course I don't know the specifics but it seems
1:21:38
like a relatively sophisticated social engineering attack um I don't think what we do will be able to help with something like with customer agent social engineering like I think that's a very specific problem um but I but I mean more on the KYC side. Is there a
1:21:51
Is there a world 10 years from now where where somebody is effectively able to KYC using the world network?
1:21:58
Oh yeah, I think I think that will almost certainly happen.
1:22:02
Uh we Yeah, because the issue here was like, you know, somebody has their government ID tied to a home address tied to a balance and then that creates a risk vector.
1:22:10
Uh which is why Coinbase is taking it so seriously.
1:22:13
What about um kind of centaur applications of artificial intelligence?
1:22:18
So, a situation where someone's gaming and they're verifying with the orb or their eyeballs, but um they're still using AI.
1:22:29
I mean, we've already seen this with a real person who's on a dating app, but they're have a second app where they're taking the text, putting it in there, like the Riz GPT, uh and the the responses are still AI generated, but there's just one person involved.
1:22:41
Is that less of an issue this centaur model because there's still a human in the loop versus there's one person controlling or puppeteering like a million accounts?
1:22:52
Yeah, I think that I I think by by in a couple years I think almost everything we do on the internet we will do with help of an AI because it just make our writing better will make our thinking clearer and so I think that is actually not really a problem.
1:23:07
I think um in some sense the way we actually think about it is we think a lot about agents and agent delegation these days. Mhm.
1:23:15
And uh for example, I think one thing how this will be very useful is you will need to understand that behind an agent uh or an agent actually acts on behalf of a human um like a well one human and as you described I think the the the the important uh property of such a system is that you cannot deploy uh thousands or tens of thousands uh of these AIs.
1:23:41
um not to not allow you to interact with that.
1:23:46
And then maybe actually the gaming use case, there's a cool example here where with Razer, they they build these gaming uh um webcams. Yeah.
1:23:54
And um what so when you actually verify for for world, you receive a a package of uh data that is not stored anywhere centrally.
1:24:03
It's stored on your phone.
1:24:05
And one of the things it has actually a signed face image.
1:24:08
And so what Razer will be able to do, it actually will use that to ensure that you this is you're not a deep fake.
1:24:15
You're actually the person you claim to be.
1:24:17
And so you can authenticate a live video stream.
1:24:19
And I think the same will happen on video calls.
1:24:21
Um speaking of hardware, uh we were just talking about Apple uh getting into brain computer interfaces.
1:24:29
Neurolink is also in the game.
1:24:31
Uh, is there a situation where authentication via BCI is as effective, more effective, something that you're partnered with or developing, or is that just on a different timeline from what you see the roll out of super intelligence or AGI uh being?
1:24:54
I well so personally I'm very interested in BCIs.
1:24:56
Um, but I I think this is very much on a different timeline.
1:24:58
Uh so I think like to yeah deployment of invasive uh or even non-invasive PPCIs I think it's like still certainly five plus years away probably 10 15 sure um so I don't we will figure it out once it gets there I would say yeah yeah um what about um I'm I'm super interested in understanding how the decisions that you're making allow us to read into your AGI timeline Sam's AGI timeline lines and what the future will look like.
1:25:32
There's this interesting world where the the kind of the revealing feels like you see a future where there are tons of digital AIs in the world, but maybe there's not this super intelligence that can reconstitute matter at a atomic level instantaneously.
1:25:53
the gray goo scenario because in that scenario, even in the good ending, you would imagine that a super intelligence would be able to create a human eyeball, grow it in a lab, do something to create a a a fake version of the human head, right?
1:26:10
Maybe scan me one way or another and then recreate the eyeball.
1:26:13
And so, uh, much like you could potentially fake a fingerprint reader, uh, with enough time and effort and detail in how you're constructing that matter, you would think that you'd be able to do that if you had unlimited resources and super intelligence and all these different things.
1:26:29
But that doesn't seem to be the timeline that you're operating against.
1:26:32
So, can you tell me about uh like how your far future vision for super intelligence plays out a little bit?
1:26:42
Um, so, well, I I think about these things quite a bit.
1:26:44
I think um so this this kind of also like Ray Coursewhile vision of like eventually we'll have AI that creates nanobots that will be able to reassemble matter etc.
1:26:54
I think that's um that is very likely to happen but I think as a society I think we'll like there there's going to be a lot of other things that will happen before we get there and um so I guess my internal mental model is that we are I think still at least 10 years away from from from that kind of uh level of intelligence or at least from us allowing that level of intelligence to interact with the real world. Mhm.
1:27:22
Um and then actually if you well if you if you then think about the fundamentals of kind of physics in such a scenario is uh that of course what we what we do to to measure that humanness is we use we fundamentally use photons of different wavelengths.
1:27:39
So near infrared uh visible light etc.
1:27:42
And so I think like before you would actually create an artificial human such an AI would be able to maybe just emit um multisspectral wavelengths uh to fool such a system and so like well but I think then we will also use such a AI to build a countermeasure and build a more powerful system.
1:28:00
So I think that is in my mind still far out in the future.
1:28:06
I I I think like all the medical advancements and um scientific advancements from AGI.
1:28:10
I think is that generally your your mental model for how all of this progresses is just like good guy with AGI beats bad guy with AGI.
1:28:21
It's kind of an economic or energy warfare.
1:28:23
Whoever has the more compute the more and as long as the the the good people have more resources they will be able to build stronger defenses.
1:28:34
And so the net outcome is good.
1:28:34
Um maybe that's like one way to frame it, but like generally I'm uh I think I'm way more optimistic than than kind of most people or like many people are in in the tech world.
1:28:48
I think like the default outcome is that um these AI systems would just be incredible tools for us and I think they will be widely accessible and I think the the frontier labs will make these accessible to kind of a wide population for quite a long time.
1:29:05
Um like at some point you might get kind of this true super intelligence territory where maybe the government steps in steps in I could definitely see that happen. Yeah.
1:29:14
Um and then it becomes like a geopolitical uh situation um which is going to become like very hard to predict.
1:29:23
Um but I think until then I think these AI systems will be relatively widely available and open source will not lag too much behind.
1:29:29
Um, so yeah, it seems like most of your model is like general optimism about how AGI and AI progresses, but there are pitfalls that need to be avoided and there's uh problems that will need to be solved in the interim and and worldcoin is one instantiation of that one problem to be solved.
1:29:50
Are there other problems that you're thinking about that maybe you're not working but other founders or other entrepreneurs or other companies might be thinking about as we progress into the AGI future?
1:30:01
Well, so first of all maybe the framing about world I think you can definitely do that.
1:30:06
Uh but I think the other framing is as a result of the technology I think we will create one of or if not the largest real human network on the internet which I think will create a level of value.
1:30:15
So like it like it's not just preventing the bad, it's also creating the good that I think uh really matters here.
1:30:23
Um you know other problems for other there's like there's like so much it's like what what what uh you know I feel like the main you know there's this um the world is undoubtedly controversial, right?
1:30:36
You have people that are super excited about the potential of the technology and understand the importance.
1:30:42
And then there's maybe people that are excited and understand the importance, but they're still wary. Yep.
1:30:48
Uh and then there's like the whole other side of people that are just like, "No, you're never going to scan.
1:30:51
You know, you're never going to get my eyeball.
1:30:54
Don't even, you know, keep I don't even have pre-check." Yeah. Yeah. Yeah. Those those types.
1:30:57
Uh uh but uh but but what do you say to the people kind of in the middle that are kind of like um interested but kind of wary or maybe on the fence, you know, when you're talking to them one-on-one?
1:31:09
Um you know, I I I think like we have very very high conviction around both the importance of this technology and how the technology is built.
1:31:21
is built. um like I think it has all the properties that we will need as a society for such a technology in in that sense that it's anonymous, it is scalable, it can be inclusive like all of those things I think will end up mattering a lot like maybe much more than is kind of visceral uh at that point in time but I think in the next 12
1:31:40
24 months I think it will become relatively obvious and so I think um it's going to be interesting where like I think different parts of the world will will end up with different trade-offs like maybe some parts of the world will just require government IDs on pretty much every part of the internet and I think that might end up being a a really bad a bad situation. Um
1:31:56
Um and so and that's bad because somebody would just effectively sell their ID to be rented out for like ultimately uh it will be really hard to build that as a notraceable system uh by by the government and and and and I think like it's of course something we really believe in here in the US is like the freedom. Yeah.
1:32:18
So the government would track you on every single place you go on the internet, every web page.
1:32:23
They could in theory they could.
1:32:25
I'm not saying they would.
1:32:26
And I think it really depends on which part of the world you're in. Sure.
1:32:28
Uh but I think that's just not a great outcome.
1:32:31
And so I think like if we do like if we do everything in the right way over the next couple years, I I hope that our brand will become something like the signal messenger.
1:32:40
We're like I think totally um this is like the the anonymous high trust uh solution that you can use and other people will have other solutions.
1:32:49
I think there will be a lot of competition around that space because I think it will become a relatively big one.
1:32:52
Um so yeah if if others will want to use other options that is that is totally great.
1:32:58
I think we will win by building the best product and reaching the most scale.
1:33:01
Jordy great place to end. Yeah this is fantastic. Thank you so much.
1:33:07
Uh very excited to see the roll out.
1:33:08
Uh I actually did I'm just remembering I had one last question.
1:33:13
question. Uh are you far as far enough along as you would like to be or do you wish you could just sort of like pause time and you know scale the world coin network you know just for another year to to sort of catch up because I because
1:33:28
again when when you talk about these timelines around 12 months 24 months you guys are really uh racing against the clock uh from what it sounds like for a world in which we have these sort of agentic reasoning systems that will really make the internet a much more wild uh place. Well, I think that that
1:33:45
Well, I think that that is definitely one perspective in my mind is like I think we're definitely at in in a race against time.
1:33:53
And what what is also what is interesting what really only happened in the last six months is that uh CEOs of many of the very large companies that you know um with large products um well either we we talked to them or they reached out and uh the problem is like currently we cannot serve that scale.
1:34:14
So there's like there's like a lot of pull um for the product to be available uh and we we just really need to get there.
1:34:22
we need to roll this out faster and be able to serve these big platforms.
1:34:25
Um, so that I think that is like a extreme level of urgency for one, but then the other side is it's hard to describe how crazy it feels to be even here.
1:34:35
Uh, from the beginning of the company like for like the first two to three years, uh, well, people basically just made fun of this. Mhm.
1:34:45
Um and and so like yeah, it's certainly personally the journey of a lifetime and it and and like when when I started working this like I I gave it a very low probability of success and I did so for the first three years or something.
1:34:59
It's like yeah still very very long to go and fast to scale but on the other hand it feels pretty wild to just be here right now.
1:35:06
Amazing on the social network thing. Sorry last question.
1:35:12
We're like all right thanks Alex. Thanks for coming on.
1:35:13
Uh I mean uh when you say large scale network valuable are we talking Visa network or are we talking Instagram?
1:35:23
You're gonna you're gonna see Yeah. Yeah.
1:35:26
I mean I I'm I'm interested to see the the business model, the pricing model, are the big platforms going to be paying in World Coin? Are they be holding?
1:35:32
Are we going to have a national reserve of this stuff? I don't know.
1:35:35
We'll have to try We'll have to have you back on when there's a big announcement. Looking forward to that. Thanks for having me. Yeah. Fantastic. Talk to you soon. Uh anyway, it was good.
1:35:41
We broke because we got to talk about eight sleep.
1:35:46
They got a 5year warranty, 30 night risk-free trial, free returns, free shipping. Pod five ultra. Pod five Ultra. I think you beat me. I got an 88.
1:35:55
I think you got a 92, right?
1:35:55
I think the 18 must have gone in the app and and uh whatever John gets.
1:36:01
Just give Jordy a couple extra points. Four more. I got a 92. 92.
1:36:06
Let's hear for two hours of deep sleep. Congratulations.
1:36:09
Uh we got Josh in the studio.
1:36:12
Welcome to the stream, Josh. How are you doing?
1:36:13
Haven't seen you since Hillen Valley. Yeah, with a tie. No tie. Oh, no tie today.
1:36:17
Well, we we'll get you next time.
1:36:21
Look at the Look at the games, though.
1:36:22
Today, but he's looking great.
1:36:24
Josh, what's your what's your workout routine? You're looking jacked. Oh, man.
1:36:29
We We uh we do basketball. Okay. Got some jiu-jitsu. Yeah, we do it all. We try to stay young. Yeah. Got it.
1:36:37
Uh let's talk about the latest deal.
1:36:40
Reflect orbital is in the news.
1:36:42
Uh take us through the anatomy of the deal. Break it down for us.
1:36:44
You know, amazing entrepreneur um combination zipline SpaceX guy Ben Noak um Sean Maguire uh friend partner at Seora uh was early.
1:36:57
Uh he and Alfred seated them. We led the series A.
1:37:00
It was one of these ideas where it's like you've got the sun, it really is only available for half the day. Mhm.
1:37:08
And they had a very simple insight which is that there's so many satellites that are launching.
1:37:13
What if we took a giant myar balloon effectively and had this big planer area that we could basically redirect the sun and everything from solar efficiency so that people that uh are running solar cell farms could basically get you know double the output to people that were doing search and rescue or military operations.
1:37:33
you know, where could you literally task a satellite not for visual imagery but for sunlight?
1:37:40
And we thought that that was a very clever idea.
1:37:42
So, we funded them uh probably a few quarters out from formal launch.
1:37:48
And uh the inbound has been insane from all over the world of people saying we want to be able to task satellites to have directed sun wherever we want it, when we want it, which is pretty cool.
1:37:59
From governments or enterprises or both? Both. Yeah.
1:38:01
You can imagine folks in the Mid East.
1:38:03
Um, yeah, folks where there's actually money at the government level, but no way that they could possibly do infrastructure for street lights at night. Interesting.
1:38:13
And so, yeah, there's a lot of applications that have been popping up that we here at for never imagined.
1:38:16
So, it's one of those things that develop a capability.
1:38:19
Don't underpromise uh you know, don't don't over promise and uh underdel. Do the exact opposite. Yeah.
1:38:27
And people are coming to him.
1:38:27
So, yeah, we're really excited.
1:38:29
And he's super smart, super super sharp. Yeah.
1:38:30
What do what do you think are the exciting second and third order effects of something like this? Right.
1:38:35
If you make an area that's dark for most of, you know, not most, but but some percentage of a 24-h hour period and you light it up, I can imagine that would have positive impact.
1:38:46
You know, I think there's a bunch of data on like street lights for the Andrew Huberman crowd. Well, yeah. I don't know. I don't know.
1:38:53
Andrew Andrew might be uh might be like, "Oh, you're you're disrupting my circadian rhythm or something like that."
1:38:58
But no, but isn't there there's a ton of data on like street lights and crime, right?
1:39:01
It's like if you light up an area like there's a massive reduction.
1:39:05
I'm curious if you thought about um kind of the the potential externalities of the technology over time.
1:39:12
Well, the first one again is energy, right?
1:39:14
So, if you're able to produce electricity and solar is getting way cheaper and way better, but the efficiencies are still 50% of the day when you have sunlight.
1:39:21
Um and then you're doing battery storage.
1:39:22
But if you could extend that in certain areas and particularly if there were sort of adjacent farms that weren't lighting up the city and screwing with people circadian rhythms so that then could be transported through electricity through storage and electricity transmission.
1:39:32
I think that that's exciting.
1:39:34
Um yeah, sporting events, late night soccer games, you know, all the kinds of things where in New York City, it's no question, um you know, in Palo Alto, it's no question to be able to light up uh stadiums, but if you wanted to light up an area that was an entertainment zone or uh you know, you can imagine things there for sure implications on safety again on search and rescue.
1:39:51
You know, there's a reason that we always say whether uh people are huing towards elements of honesty that sunlight heals all.
1:40:00
So, uh yeah, I'm a big fan of the sun.
1:40:02
This feels like one of those deals that kind of lives and dies by the uh like specific variables in a spreadsheet.
1:40:10
If launch costs are a little bit higher, it could be really, you know, they could get kind of stuck if they don't fall enough or you know the the the distribution of sunlight that's not concentrated enough all of a sudden doesn't make economics sense.
1:40:20
Is this more of like a bet on the founder or have you dug into the spreadsheet and are you really confident on the model evolving or is it more like the team's just so good they're going to go figure something out?
1:40:32
Well, I would go and say that there's different economics for different use cases, right?
1:40:35
If if you're a if you're a a military and you want to light up a battlefield, you're probably willing to spend a lot more than just the marginal solar user who maybe just needs a little for sure.
1:40:45
search and rescue, you know, are going to be these punctuated emergency kind of things where, you know, people may not spare a cost in military as well.
1:40:51
Um, in other cases, obviously, military is going to want the cloak of darkness, right?
1:40:54
And so, they don't want to light some things up.
1:40:57
But, um, the honest answer is on the first part, I I I don't know what the pricing is going to be here.
1:41:02
We're comfortable first and foremost with an entrepreneur who is so thoughtful about every aspect of weight, performance, the material science behind it, the launch costs, the capabilities, the cadence, the frequency.
1:41:15
And so I think it's one of these things like build it and they will come.
1:41:18
And there's a little bit of faith in that.
1:41:19
But I have a lot of faith in Ben.
1:41:21
I think he's recruiting extraordinarily well.
1:41:22
I think he's deeply technical. He's obsessed.
1:41:24
I mean truly like obsessed.
1:41:26
Like you know a lot of people do all kinds of things in their spare time.
1:41:29
He's reading like math textbooks just for fun in spare time.
1:41:31
Um so super super space nerd, really talented.
1:41:37
Uh yeah, and Lux and Seoya are uh you know, forgive the pun, but uh excited for it to see the light of day. Nice. There we go.
1:41:47
Airorn for that air horn.
1:41:50
Let's zoom out and talk about space broadly.
1:41:52
Uh launch costs have been coming down.
1:41:54
There's been projections that they're going to come down further.
1:41:57
Have you been pleased with the trend of falling launch costs?
1:41:59
Are you seeing enough in the entrepreneurial burgeoning space economy?
1:42:05
Uh are there going to be a new wave?
1:42:08
Are we in the midst of a wave?
1:42:10
Um, is the next generation thinking about other orbits, MEO or very low Earth orbit?
1:42:17
What's exciting to you in space these days?
1:42:19
I'm just going to give you a cascade of yeses. Yes. Yes. Yes. Yes. And yes. There we go.
1:42:22
Look, cost per kilogram to launch things up into space was the main limiting metric before and um larger vessels, better propulsion, more frequent launches, increasing demand.
1:42:35
All of that has lowered that.
1:42:36
When we first did Varta, it was the inverse analysis, which was instead of trying to figure out how do you get low cost per kilogram up into space is how do you actually develop something that is going to be high cost per kilogram to justify doing it in space and coming back down.
1:42:49
Same thing for another and by the way, Varta, you know, I know Delian's been on and but I am so proud.
1:42:56
Third launch successfully just yesterday, you know, in the past 24 hours. Australia. Quiet down, guys. Yeah. Yeah. Calm down.
1:43:06
you know, Brewy and and Delian and team truly proud of them, proud to be partnered. It is just awesome.
1:43:10
And you know, you're going 25 Mach 25 times the speed of sound.
1:43:16
You know, the hypersonic testing people have talked about the hype around hypersonics.
1:43:18
It's real and uh really proud of them and the and the launch and and and re-entry capabilities.
1:43:24
Um a related one which was Tom Mueller who you know as you know is Elon's right-hand guy at SpaceX for 20 plus years.
1:43:31
Um, we backed him in a company, Impulse Space.
1:43:32
And this was one of those speculative things of how are you going to uh invest in a company today where there's no economy and no demand yet for the ability to transport things, you know, and move them into space once they're up there.
1:43:44
And that's really what he's developing, the vessels and the capabilities that once assets are up in space, how do you think about whether it's cargo transport or moving satellites and all these kinds of things.
1:43:53
So, um, there it feels like that Impulse could like unlock an entire new class of startups built on the stack of Impulse plus SpaceX.
1:44:02
You get something up to LEO and then you push it higher and, you know, there's some examples of things that can happen, but I feel like if you drop the cost 10x, 100x or something, you're going to see a whole different breed of startups, right? Totally.
1:44:16
In fact, a lot of our thinking around this was um you know, it's such a cliche thing that history doesn't repeat a rhymes, you know, but if you go back to history and you look at one of the great buildouts in this country that unlocked commerce and transport of uh material and populations and lives, it was the rail.
1:44:33
And uh you know, so many things have happened during rail for people to compared to booms and bus cycles.
1:44:39
But if you look at rail and you think about the tracks that were laid down horizontally and you were to flip them 90° and instead of tracks now you've got propulsion going up to space.
1:44:47
It's very much the same thing of how do you get transport number one and who's going to sort of own those lanes.
1:44:50
So that's launch capabilities.
1:44:51
Then you've got communications.
1:44:53
You know there's a reason that telegraph lines were laid proximate to the rail and it's the same sort of thing.
1:44:58
Now instead of telegraph lines with actual wires you have satellites doing KA and KU band.
1:45:01
And you have everything from Starlink to our company Kimeta that we did with Bill Gates where it's KA and KU that are basically switching off of a solid state material with no moving parts.
1:45:10
You know, when you're on a plane and the reason that you lose internet for 2 seconds or whatever is it has lost track with a uh geostationary uh satellite, you know, and of course it's tracking it and as the Earth moves, it's tracking it.
1:45:22
But if you're in a low Earth orbit satellite, you want to be able to track it just like when we're moving through the city and going from cell tower to cell tower.
1:45:29
And so that capability is something that's relatively new um for being able to lock on and track satellites.
1:45:35
Then you've got uh people that are making things in space like Varta.
1:45:39
You've got people that are transporting or storing them.
1:45:41
There's other companies that are doing effectively private space stations because as you know ISS is coming out of service.
1:45:47
service. you've had geopolitical considerations of who's partnering with Russia or China and and so there is I would just say a very robust space ecosystem driven by the fact that capital follows talent talent follows breakthroughs and ambition and there are so many young smart men and women that want to work in the space and in many of
1:46:08
them they were in the pressure cauldron of SpaceX which I think is an incredible culture you know as you know I'm critical about Elon about a lot of things but I think SpaceX is an absolutely amazing business and I think people that are attracted to it, have been trained there, are now spinning out are incredible. Yeah. I mean, the Varta Yeah.
1:46:20
I mean, the Varta story is fascinating because they started I remember the very first pitch was for like we're going to make ZB land in space. Then there was pharma.
1:46:26
Now they're doing pharma and some defense and hypersonic testing and stuff.
1:46:30
And it's just a testament to like you bet on the founder and they'll go figure it out.
1:46:34
But they are riding a really really important trend. Totally.
1:46:37
When when when when uh Delian was first pitching that with brewy, I was like, I have no idea if this exotic optical material is going to be the thing, but the capability of you doing this is going to be the thing.
1:46:51
And it's really about that economic inversion.
1:46:53
Not dollar per kilogram up, but high value dollar per kilogram down.
1:46:58
And I think even Sean, who we're now we're partnered with in Reflect, made that comment of like he was focused on the micro and he sort of got that wrong.
1:47:04
Uh, or maybe he got that right actually.
1:47:06
But the macro, you know, maybe he missed and and super honest, self-reflective.
1:47:08
I think I I think with Vard he said the opposite.
1:47:11
He said he he he missed the micro. Oh, yeah. Yeah. Yeah. He got the micro wrong.
1:47:16
It wasn't It wasn't going to be Zand, right? Yeah. Yeah. Yeah. Yeah. That's right. He got hung up on that.
1:47:21
Macro was like there's Yeah.
1:47:24
He should have bet on the macro. Yeah. It was great.
1:47:25
Um uh I think an underrated uh just story or fact about you is that you've been in venture a long time.
1:47:32
Can you tell us the story of like the first fund and how you even got into venture and kind of uh what you've learned over the last it's been more than 10 years.
1:47:41
Has it been 20 years now?
1:47:43
How long you been doing this?
1:47:43
So um look I I I'm a science nerd.
1:47:45
I was doing HIV AIDS imunopathology research and I literally got into that because I watched an HBO movie when I was like 13 years old called and the band played on. What was it? Was it HBO?
1:47:55
It wasn't HBO Max back then. It was just HBO, right?
1:48:00
They swap back and forth.
1:48:01
just old school HBO and uh it was like this ensemble cast and I had to write ambitious naive which everybody that we ever back does which is like I'm going to go cure AIDS anyway I end up working in a scientific lab the scientific lab 3 four days a week after high school finished that all the way through college published in uh two different
1:48:19
scientific journals thought I was going to go get an MD PhD my mentor was trading futures and options so we'd be sitting there with a centrifuge of aids blood spinning down waiting to run some 96 well uh enzyme linked imunosorbin assay thing and he's making money and I didn't know anything about the stock market. My mom was a I was raised by a
1:48:34
My mom was a I was raised by a single mom and she was a a resource room specialed school teacher.
1:48:38
Uh and and I got enamored by capital markets and my life since then has literally been the intersection of science and finance and it is partially the satisfying thing for my own ADHD of being able to constantly meet new founders and I never know who I'm going to meet and then coming up with certain thesis and running them down and either starting companies with founders or or finding the people that are in it.
1:48:58
When we started, Peter Abear and I, who's absolutely amazing.
1:49:00
I mean, he's like literally my dispositional opposite.
1:49:03
Very much like my actual real life wife. He's smiley. He's positive. He's optimistic.
1:49:07
I am usually in all black and negative.
1:49:09
Everybody here has been indoctrinated with this idea that failure comes from a failure to imagine failure.
1:49:15
Pete is like, "Well, what if it works?"
1:49:16
You know, what if what if what if it actually becomes a multi-billion dollar business?
1:49:19
And my wife Lauren him are very much the same. They're smiley.
1:49:24
I always say, you know, I've got resting face.
1:49:25
Uh, and it's just it's a it's a great dynamic.
1:49:28
People joke, he invented the airplane.
1:49:29
I invented the parachute.
1:49:31
It's a good yin and yang.
1:49:33
When we started, we had friends and family to go out and raise money for Lux.
1:49:37
And I joke that we had friends, we had family.
1:49:38
None of them had any money.
1:49:40
And we got lucky and met a guy, Bill Conway, who was one of the three founders of the Carlile Group, which at the time had maybe six or eight or 10 billion at most.
1:49:47
Today, you know, hundreds of 400, 500 billion.
1:49:48
This was a fund for ants back then.
1:49:53
and and we uh we met with Bill and I always say look the counterfactual and this is true of all of our lives and anybody listening and any entrepreneur starting something you just never know and he was in the right mood that day maybe he had a great breakfast with his wife maybe he found out they just made a lot of money for a deal maybe he closed a big LP whatever
1:50:11
it is he got good news or he was he was just in a good mood but the counterfactual could have been he was in a mood he was pissed he was angry he was frustrated he was he was hungry and we came in and we pitched him idea that in the history of venture every 10 or 15 years there's some secular wave in technology in the 70s was PCs in the 80s
1:50:25
was biotech in the '90s was TMT technology media telecom and our view was like the next wave is going to be the physical material sciences and where they intersect with computer science and all this kind of stuff so it was like the interstases and it wasn't going to be just Stanford and MIT it was going to be like Cornell and Georgia Tech and
1:50:39
University of Michigan and UT Austin all these kinds of places and physics and material science and chemical engineering and so he said I hope you make a billion and he believed in us gave us our first pledge fund we were writing small checks We had maybe board observer seats at best and then uh you know a bunch of those things were doing pretty well. We were building a little
1:50:57
We were building a little bit of a reputation and then we went out to raise our first real institutional fund which we called Lux two because everybody likes a second fund, right?
1:51:05
So our first but like nobody would invest in a first- time fund.
1:51:09
But if we called it Lux two, there you go. Lux two.
1:51:10
This is like announcing a preempted round.
1:51:15
every we've been saying every founder should say that every round is a preempted round because it's just looks better.
1:51:20
better. So, so Bill becomes an anchor investor in that and we get this like pantheon of people Pete Peterson who's the founder of Blackstone and Stan Dunkin Miller, legendary global macro investor and Ken Griffin founder of Citadel and it was all random
1:51:33
connections that led to these individuals and they were writing you know sort of like5$10 million checks and then we got a whole bunch of family offices some small fund to funds a few corporates like Lockheed and Motorola and we could not hit our $und00 million target. 92.1. To this day, I remember 92. 1.
1:51:44
To this day, I remember every person that said yes or no, every $100,000 check, the people that have been with us for 20 years, and the people that said no that we would later on because I got chips on my shoulder, we wouldn't let into the let them back in. Yeah.
1:52:00
But, um, so, so I'm I'm very thoughtful about the people that we ever say no to because you never know in two or three years they're going to be the people that you really want it back.
1:52:06
But, yeah, we we started small and, uh, today we're five and a half billion.
1:52:10
And uh I still remember those those those early days. That's fantastic.
1:52:14
Uh talk about the new uh uh science funding initiative.
1:52:17
You guys uh have been following a lot of the cuts, funding cuts. Yeah. Yeah.
1:52:24
We talked to a couple people on the show about the importance of basic science research, funding things that don't have immediate economic impact.
1:52:32
What's the impact of a helicopter on Mars?
1:52:34
What's the what's the impact of understanding DNA at some atomic level?
1:52:37
Uh Obviously you can't stuff comes out of that but it might be a decade there might not be a typical venture payback.
1:52:44
Uh what are you thinking about that space generally?
1:52:48
Well first of all the roots of venture capital are really two things.
1:52:49
It was deep science and it was defense you know.
1:52:52
So defense tech itself is nothing new.
1:52:54
It really is the early days of the venture capital indust uh and coner and that spun out from the UC system.
1:53:03
uh that was one of the early important proof points that helped to create the by dole act.
1:53:09
So you had two senators, Evan B and Bob Dole, that basically said, "Look, all this taxpayer money that's going into universities, um, they're producing property, intellectual property in the form of patents, but why don't we allow the university to actually own those instead of it being like marching rights from the government?"
1:53:24
And what that did was just blew out and it happened to coincide with the U Orisa Act where retirement money could start going into private equity and venture capital.
1:53:32
That was also in the 70s, late '7s.
1:53:33
Um the virtue of both of those things was that you had now this new class of intellectual property spawned from taxpayer funded research that went from NIH or National Science Foundation, National Institutes of Health, the sort of three-letter agencies going into academia.
1:53:49
They would hire postocs, they would do work, they would file some patents, and then there was this welltrodden method which we happen to be quite good at where you would go to university, you'd go to their tech transfer office.
1:54:00
Actually, most of the time you really don't go to the tech transfer office.
1:54:03
You go to the principal investigator, the scientist.
1:54:04
And because they're implied employed by the university, they go to the tech transfer office and say, "I want to do this."
1:54:09
If you go to the tech transfer office, often time you're dealing with adverse selection. That's an aside.
1:54:12
You give them a royalty, you give them a license, you do equity, you strike a deal, and then you're funding it.
1:54:16
And they typically get some money back uh for all the work that they they spent.
1:54:20
They also have what's called diligence criteria.
1:54:24
Very simply, if you don't put up enough money or you don't advance it, then justifiably it goes back to the university so they can take another stab at it with somebody else.
1:54:30
And so there's lots of structured deals that you can do here to make that happen.
1:54:33
the university professor, the scientist will typically spend 20% of their time on the company as sort of like the equivalent of what Google would adopt later on.
1:54:39
You know, a day a week to do these kinds of things.
1:54:42
And the benefit to these universities were royalties and licenses on some of the most important drugs in pharma, some breakthrough materials uh that ended up in national security.
1:54:51
I mean, hundreds of millions if not billions to some endowments. So, really big deal.
1:54:54
And over time, I'd say like probably 15 20 years ago, Venture started doing maybe late '9s more and more just computer science-driven things, more internet, more, you know, um, dotcoms, e-commerce, and they were going away from the universities.
1:55:10
We've always had that as part of our knitting.
1:55:11
When we started Lux, one of the guys we invested in was this guy Larry Bach.
1:55:14
Larry was a serial entrepreneur.
1:55:17
He ended up joining our firm.
1:55:19
He passed away maybe seven, eight, nine years ago.
1:55:21
He was an incredible guy and uh we learned a lot from company about company creation from him.
1:55:25
He started 17 companies from scratch, took 14 of them public, cumulative market cap over $80 billion.
1:55:31
The most significant was Aluminina, the gene sequencing company. Wow.
1:55:35
And we learned how to do this and how to partner with young scientists.
1:55:38
So, we've been doing it really nearly 20 years and we've started over 20 companies ranging from high-tech nuclear waste cleanup, which this company Curion that helped with the Fukushima disaster to 4D LAR to um finding real life mutants in a company called Variant Bio where we go out like X-Men and are trying to find these outer people in all parts of the world. Crazy stuff.
1:55:59
But all of it has some breakthrough that happened in an academic lab and you were going and typically it's like 90 95% ripened and ready for commercialization.
1:56:08
So you're not really taking that much science risk.
1:56:11
The government took that or the or the university took that or taxpayers took that.
1:56:14
What happened now is we saw a confluence of factors.
1:56:17
You got politicization that's happening at universities.
1:56:21
you know, where current administration is is punishing for anti-semitism or or absence of free speech or whatever it is, cutting funding, potentially cutting tax status, uh potentially increasing tax on endowments from like 1.
1:56:33
4% to possibly up to 20%.
1:56:35
So, they're facing very serious pressures to say where what are we going to do with our funding if we're not getting it from the federal government?
1:56:43
Many of the scientists are innocent. They're doing nothing.
1:56:44
They're doing nothing. they just want to do their work whether that's finding cancer diagnostics or inventing new materials or coming up with you know all kinds of interesting aerospace applications and so they're facing funding cliffs now and uh some of that is from federal budget cuts some of it is from politicization but it's a big
1:57:00
issue this is against a backdrop where to me the biggest issue is not anything domestic it's not about left or right it's about past and future and specifically a future that we are competing with China for China now leads in nearly 40 of 44 critical technology areas cultures get what they celebrate and the
1:57:17
culture for Chinese scientists and academia is not our culture is not the Tik Tok culture is not you know celebrating Paris Hilton and Kardashians or whatever it is build what we can to have an absolute utter advantage and an advantage relative to America this is you talk about make America great truly what made our country not just great but
1:57:36
exceptional attracting German Jews during World War II and making sure that we were the ones that developed the atomic bomb and having the Institute for Advanced Studies at at Princeton having these amazing academic institutions which were research institutions not you know uh political drama on campuses and this kind of stuff. So we need to go
1:57:51
this kind of stuff. So we need to go back to that and we saw that there's bureaucracy funding cliff politicization increasing pressure against this backdrop of competition with China and we said we already do this new co formation and we partner with scientists now we're doubling down and we will go even earlier you lost your grant and
1:58:08
it's potentially on the path for commercialization instead of it being 99% banked maybe it's 30 or 50% banked we'll take the risk come join a company spin out into a company license your work to one of our existing companies but know that there's an alternative path Yeah, besides just facing a brick wall, we're going off the cliff. That's That's very cool.
1:58:25
Um, not to get too political, but uh, you mentioned China, geopolitical competition.
1:58:29
What are some countries that you're particularly long or you think are underrated as potential partners to America or potential entrepreneurial hubs?
1:58:39
Uh, when I grew up, you know, Japan was making humanoid robots. Uh, Honda is Azimo.
1:58:44
haven't seen a lot of startups come out of Japan, but we're seeing stuff come out of Talpo in Israel with with the Whiz acquisition.
1:58:52
Uh we're seeing uh what some VCs are doing in Europe and the Nordics have produced Spotify.
1:58:57
Where are you looking across the globe?
1:58:59
What's what what excites you if anything? Um yes, yes, yes.
1:59:03
And yes, again, so uh we've got the leading AI company in Japan, Sakana. Oh, cool.
1:59:08
Which is which is amazing.
1:59:08
And uh a bunch of the partners were over in Japan twice.
1:59:11
is the thesis for that national AI like Japan wants their own foundation model. Is that right? Okay.
1:59:18
In part it's sovereign models but it's not like Mistl and France. Okay.
1:59:20
It is also sort of a very different almost complexity theory approach to the model.
1:59:27
So they're coming out with all kind stuff.
1:59:28
Um one of the founders um Leon Jones uh was the original author and um uh he named the title uh for the paper attention is all you need when he was when he was at Google.
1:59:38
So killer team based in Japan.
1:59:42
All the major Japanese corporates have now invested and we're very bullish on that.
1:59:46
Um Israel Leon Jones does not sound like a Japanese name, but No, no, he's he he's not Leon.
1:59:54
But I mean I'm sure he's having is uh Caretsu is the right word for it, right?
1:59:58
Where you get these corporations that sort of build Japan.
2:00:00
They own they own pieces of so the bank owns the piece of the industrial company which owns a piece of the bank and they all kind of work together. It's a very cool model.
2:00:07
Sui Sumitomo, Hyundai Heavy Industries makes the oil rigs and the cars and everything.
2:00:13
Now, now that is changing because you are seeing the rise of startups and a startup culture because failure in Japan is very different than failure in Silicon Valley and that's starting to change.
2:00:21
Um, and so we're optimistic on that.
2:00:23
So that so Japan is number one, Israel number two. Sure.
2:00:24
I mean I really think that this young generation of Israeli entrepreneurs are going to be the greatest generation.
2:00:31
They are literally being forged in fire.
2:00:33
They are fighting an existential fight for their lives. Yeah.
2:00:36
And people are shifting from, you know, doing apps and ways and and cyber security still important, but they're now getting really interested in defense. We did two companies.
2:00:47
Um, one came out publicly.
2:00:49
Uh, it's usa in a company called Kella.
2:00:51
You mentioned Talpio Gore, one of the elite guys from Talpiote who went to fight post October 7th and Hamotal Meridor who ran Palunteer in Israel.
2:01:00
Just absolutely killer team, coveted, very soughtafter by investors.
2:01:02
The other one is in stealth.
2:01:04
um us, Peter Teal, Trey, uh and a and a partner in um in in Israel, Michael Eisenberg, all amazing people.
2:01:13
We all came together to uh to fund a company um focused on a capability that Israel did not really have and and needs for some of its its most serious uh foreign adversaries.
2:01:22
So, that'll come out, I think, in the next few months and and um we'll we'll see some other Silicon Valley investors, I think, join in on that. Yeah.
2:01:29
Introduce us to the founder.
2:01:30
We'll have him on when he when he comes out of that.
2:01:33
Couple couple quick ones.
2:01:36
Uh Basic Capital, you guys were the first institutional investor, maybe the first investor ever.
2:01:41
Uh what uh what was what was your personal journey to investing in the company?
2:01:46
It was getting a lot of uh attention this week.
2:01:48
a lot of uh attention this week. It was funny because when when a new company comes out to fund like auto loans like nobody bats an eye but if you want to give people the ability to uh you know you know basically use debt to buy uh assets that appreciate suddenly it's a
2:02:06
big controversy I think a lot of people got maybe they got the the calculations wrong too I saw so the internet was really doing its thing but I I would love to hear it is it is controversial um but we think it's necessary credit due honestly um love them like him, hate him, never ignore him. Bill Aman really
2:02:20
Bill Aman really was the CEK.
2:02:22
Um, we came in, Henry Kravis came in.
2:02:24
Um, and, uh, the founder is amazing.
2:02:28
I mean, uh, he doesn't really talk about his story, so I'm not going to go too deep into it, but he grew up, I'll just give you in a refugee camp, Palestinian in refugee camp in Syria. Wow.
2:02:38
Uh, basically a Hamas run camp.
2:02:41
And the story is insane if and when it comes out on how he got out of this situation.
2:02:45
ended up in first Europe and then the US and then Goldman Sachs uh and becomes an expert in fixed income and uh complex derivatives and is just absolutely brilliant and resilient.
2:02:56
Uh so we loved him and his personal story first and foremost.
2:03:00
The way we got to him, our partner Dena Shaker um I think through some um shared uh ethnic connections.
2:03:06
He reached out uh it wasn't an area that she had a particular expertise or interest in per se.
2:03:10
Shared with our partner Peter who loves a lot of stuff in finance and they end up spending like 90 minutes together.
2:03:14
I don't even think they talked about the business until you know last 10 minutes or something.
2:03:19
Um but Abdul is is very special. Yeah.
2:03:21
Matt Lavine, I think, has covered it for the past two, three days in in sort of a positive way, which for him and he's a friend is a is a is a is a nice thing to see.
2:03:30
Uh they're going to figure out their model, but the premise was we allow people to borrow for all kinds of depreciating assets and we just accept this.
2:03:38
We allow people to borrow for consumption.
2:03:40
We allow people to borrow for homes and you know the theory that homes are only going up or for cars as you noted.
2:03:45
Um why do we not allow people who are not owners of the American company uh uh American economy in particular to own a piece of it because that if you really care about inequality the wealth gap is because people that have the ability and the savings to invest in the American stock market and just watch it compound over time even in lowcost index funds um are are at a superior advantage.
2:04:04
And so that's really what he's looking at and and addressing.
2:04:08
And uh yeah we we uh we're very fond of him.
2:04:11
Uh last question, humanoid timelines, bullish, bearish humanoids.
2:04:16
Uh Tesla uh Tesla right now is pricing in humanoids uh almost immediately, it feels like.
2:04:23
Uh but uh but yeah, what's your thought on uh I'm pretty sure Elon is curing blindness, autism, uh you know, all I mean, yeah, we we'll we'll have a whole another Elon discussion on, you know, his relationship with the truth and some of my criticisms on some of the other things outside of SpaceX.
2:04:39
But um look inside Lux there's a dithering spectrum of people that are super bullish on humanoids and people that are super skeptical.
2:04:46
I'm more skeptical on humanoids even though we've made some investments in that I don't think the form factor should be two arms and two legs.
2:04:52
It's a lot of motor it's a lot of motors. Right.
2:04:54
Well it is a lot of motors and that's actually a big opportunity as well for a lot of companies.
2:04:58
Um and it is widespace because 70 80% of the motors are coming from China.
2:05:02
It's about 60% of the bomb for most of the motors.
2:05:03
Average humanoid robots going to have at least 25 motors.
2:05:08
you imagine them selling 10,000 or 100,000 of them.
2:05:09
I mean, you're talking about millions of motors.
2:05:10
There's going to be an opportunity for motors.
2:05:11
Not clear whether it's going to become standardized, special, small batch.
2:05:14
Um, but there's an opportunity in a white space there because we are so dependent on China.
2:05:19
But I care more about the fact that most of these things are being teleoperated trained.
2:05:23
Uh, even you know, Optimus, which was sort of a performative thing because most of those things except for when they were dancing were being controlled by humans.
2:05:30
So, it it wasn't really fully honest until they revealed that like a day or two later, but it was too late.
2:05:35
Um, but even two arms, two legs that they're being controlled, why am I unpacking a sink or folding something with two hands?
2:05:42
This should be in the Darwinian sense endless forms most beautiful.
2:05:46
You know, he was talking about the diversity of species.
2:05:51
I want to see a diverse set of robots that are almost like the canteen scene out of Star Wars where you're like, "Holy like did that thing just have six arms and just did that thing like that is unhuman?"
2:05:58
That's what I think our robots should look like.
2:06:00
More droids, so to speak, than robots.
2:06:03
But the amount of competition that's here, you know, there's seven different companies today trying to do humanoid robots of serious scale.
2:06:10
Um, talent is flowing between them and we're we're going to see them.
2:06:14
The question is where's the killer app?
2:06:16
And everything I hear is fold laundry, undo your dishes, be a companion to somebody in your home.
2:06:21
Um, I haven't seen that visionary person that's like, "No, no, no.
2:06:24
The way that we're going to use robots is XYZ."
2:06:25
And I get the argument why humanoid robots make sense for a human-built world with door frames and steps and buttons and all that kind of stuff, but I'm convinced that the the future robot company that rules them all is going to be either something like one of our companies, PI, Physical Intelligence, run by Locky Groom and and great team. Incredible. Right.
2:06:43
That is all about the embodied intelligence.
2:06:48
Y they don't care about the form factor.
2:06:50
You want to use Chinese Unit, you want to use uh one of our other companies here, Fauna. Uh sure, all good.
2:06:53
But we're going to be the embodied intelligence. Sure.
2:06:56
Uh that I think is really interesting because one way to make money in venture is always understand where what's abundant and what's scarce.
2:07:03
And what's abundant in say AI is training data.
2:07:06
You can train on the open web, you can train on Reddit, you can train on Twitter, etc.
2:07:11
What's scarce in robots is having a repository of training data.
2:07:13
And so that's why you've got humans that are doing this teleoperation and training them through kinds of scenarios.
2:07:17
But when they enter unstructured environments, what you want is these world models that basically navigate a situation that they've never been in.
2:07:26
If a founder came to you uh named Dar, would you get bullish?
2:07:31
You did you popularize nominative determinism? You have a thread.
2:07:37
It's it's now I think I got to figure out how many people are on there. 106. Yeah.
2:07:42
100 six listings, you know, start a friend of mine.
2:07:45
Um, I'll give him a shout out, guy, Russell Diamond.
2:07:48
He's a totally different form of business, but I think it's I don't know when I start posting, it's got to be at least six, seven years.
2:07:52
Um, and some of them are absolutely hilarious.
2:07:55
I mean, the most recent one, it's it's Rich Fairbank is the CEO of Capital One.
2:08:03
Are screwing with me now?
2:08:03
Like, some of these names they're just putting out.
2:08:05
They're like, let's see if Josh just gets pissed off.
2:08:06
Well, it's amazing that you've built a firm instead of being a solo capitalist, a lone wolf.
2:08:09
But uh it somehow worked out.
2:08:12
Anyway, it was great having you on the show.
2:08:14
Thank you so much for joining us. Always a pleasure.
2:08:18
Overdue for for a full segment. We'll talk soon.
2:08:19
Uh and we don't want to keep Jason waiting any longer.
2:08:22
So, let's bring in uh Jason now uh to chat about the history of 37 Signals uh bootstrapping versus venture capital.
2:08:31
I'm sure we're going to get a bunch of interesting takes and hopefully have him join the stream right now.
2:08:36
Welcome to the show, Jason. How you doing? Hey guys. Good. Thanks for having me on. It's great to have you. Thanks so much, Jason.
2:08:43
Uh, we've actually met in person once randomly at uh a restaurant that was one of my favorite restaurants in Malibu.
2:08:51
We met and then it the restaurant shut down like a month later. I was super bummed.
2:08:56
I would Which restaurant was that?
2:08:57
It was the Was it something?
2:08:59
Uh, it was right by Whole Foods.
2:09:01
There's a hamburger place there now. Oh, yeah. Like coconut. The real coconut. Real coconut was there. That's correct. Tragic.
2:09:08
It's a tra that was that spot was the best.
2:09:10
I don't know what happened, but Mal spot. They had a hard time. It's a tough market. It's a tough market.
2:09:16
Runs her high there for sure. Yeah.
2:09:17
Uh anyways, great to have you on.
2:09:19
Um we've both been looking forward to this. Yeah.
2:09:21
Uh I mean, I'd love to just uh take your temperature on your view on the current state of venture capital and startups.
2:09:27
Are things getting better?
2:09:31
Are things getting worse?
2:09:33
It feels like people are raising more capital than ever.
2:09:36
more capital than ever. potentially there's a bubble potentially uh at the same time companies are getting to really high run rates what's your feeling for the health of the startup economy in the tech world generally yeah I mean the way I look at it is I usually look at the ideas I don't really care so
2:09:52
much about the funding side of it because if there's cheap money easy money there's going to be cheap money easy money if it's hard money there's not going to be as much around there's always going to be fluctuation there I look at the ideas obviously there's a lot of people building a lot of things
2:10:05
right now which is very exciting I can't remember a time when more people were building more things truly except maybe at the beginning of the web late 90s kind of thing where everyone was just everything was new one knew what they were doing and so they're just making stuff like the early early enthusiast
2:10:19
web was pretty spectacular so I think that that's very very healthy that said the hardest thing is not making something the hardest thing is maintaining something and it's become so easy just to make stuff and kind of just like vomit out ideas and I mean this in the in the in the best possible way. You
2:10:36
You know, AI makes things really fast.
2:10:38
You can make something really quickly that's sort of decent. Yep. It's ephemeral. It's ephemeral.
2:10:43
And then the thing is like you have to prop that up.
2:10:45
You have to keep that up.
2:10:46
You have to support customers.
2:10:49
If you sell your product to people, like people are going to be using this.
2:10:51
They're going to be depending on it.
2:10:52
And so I'm a little bit concerned that there's too much energy right now focused on just spitting out new ideas and not as much in invested in maintaining something and seeing it grow and seeing it through to fruition.
2:11:02
So there's a lot of bragging about look how fast I made this thing. Yeah. Yeah.
2:11:06
You made a thing, but now what? That's my big question.
2:11:12
And and I'm not seeing a lot of answers there yet, but I still am excited by all the things you can do today. Yeah. What's your take?
2:11:20
I mean, do do you notice that?
2:11:22
I feel like I must be other people that notice this, too.
2:11:24
We've talked about the iron law of the universe.
2:11:27
What goes up quickly must come down quickly.
2:11:29
Uh, well, I think to mere it's there's a very there's a very messy middle, right?
2:11:34
I actually love the fact that software can be ephemeral now, right?
2:11:38
I like I like that an app could basically be a meme, right?
2:11:40
How many people over the last couple decades have had an idea for an app that shouldn't it's not worth spending a million dollars and a year building it, but it would be fun for it to exist.
2:11:51
And so I like that things can come to existence quickly, right?
2:11:56
I like that you can generate an image that I never would have paid a somebody to make a 3D render of. Yep.
2:12:04
But is actually entertaining and and fun.
2:12:06
Even even just in it just very casual format, right?
2:12:09
Obviously, it has business applications as well, but John and I will generate images.
2:12:13
Like what if I put a wing on a Cadillac Escalade with a racing livery? Yeah. Simple. I can imagine that. Simple stuff like that.
2:12:21
Um and then mix a Porsche car with a Cadillac Escalade. Exactly.
2:12:23
That was exactly my prompt.
2:12:26
Yeah, I probably could have hired a designer to do that, but it would have taken a day and cost a bunch of money.
2:12:32
And And that is like it's incredible that you can do that. I love that stuff.
2:12:36
And I actually think what's going to end up happening is a lot of people are going to make software just for themselves. Exactly. Yeah.
2:12:40
And that's incredibly That's how I got started.
2:12:44
I made software for myself.
2:12:44
I was using something called FileMaker Pro way back in the day.
2:12:47
And FileMaker Pro is the easiest way to make like an application that kind of ran.
2:12:50
I didn't know how it worked behind the scenes, but it it ran.
2:12:53
That is a great feeling and a wonderful place to start.
2:12:56
So, I'm all I'm all for that. Yeah.
2:12:58
And where I was going is there's kind of the opposite spectrum of software that's really craftd driven software.
2:13:05
Somebody on the show, I think it was Jack Halton, was talking of this like Jirro dreams of sushi form of software where you're looking at an existing product category and there's a bunch of tools that already exist and just looking at it with a new set of eyes and just saying, I'm going to spend more time obsessing over this one product experience than anyone else and I'm going to make a great product.
2:13:27
And I think that's great.
2:13:29
That's kind of like you can still use AI to do that, but uh it's not just, you know, slop, right?
2:13:33
But then there's this interesting messy middle right now in venture where you have 20 of the same 20 different teams approaching the same problem and both kind of everybody's kind of racing at it uh without a lot of real vision or craft.
2:13:49
It's just about speed and just spewing stuff out and seeing what sticks.
2:13:54
And I think that that um is sort of an unfortunate byproduct of the state of things today.
2:14:01
And it wasn't always that way, right?
2:14:01
It used to be VCs weren't going to fund the eighth company attacking one problem.
2:14:05
Y and uh at least for the last 5 years it's been the case. Yeah. Yeah.
2:14:12
It seems a little bit more like music now actually in a sense where there's a lot of people making a lot of music.
2:14:18
You open Spotify there's like you know a billion artists making something.
2:14:21
And software is now becoming that which I think is pretty cool actually frankly that there can be a lot of people because there's a lot of talent out there. That's the other thing.
2:14:28
like you you turn on YouTube or you watch YouTube or you you pull up Spotify and you're like, you know, I'm trying to learn drums and I'm trying to learn a bit more guitar and I'm trying to learn how to draw a bit better and you find all these people online who are just extraordinarily gifted and talented at what they do.
2:14:42
Yet, nobody knows who they are or a small audience does.
2:14:44
They'll never make it big because it's just it doesn't work that way.
2:14:48
But there's just so much talent.
2:14:50
And what's cool about I think what's happening now is that if you have the talent and the imagination, you can actually make something today that before you had to maybe find someone else to make for you, which would have cost money and would have been hard to do.
2:15:03
So I think this is all ultimately a very good thing.
2:15:06
But I could imagine I mean again I'm not really in the finance world or the venture world in that way but I can imagine how um you have to put more and more faith now maybe it's always been this way but more and more faith in the people and not just sort of what they quickly make because it seems like making something quickly is not the hard thing anymore.
2:15:25
You know it it's it's it's like are these people is there conviction there?
2:15:29
Do they care about what they're making?
2:15:30
Are they just trying to spin something up?
2:15:32
I think there's a little bit more character evaluation perhaps that's going to be necessary.
2:15:36
Can you talk about um lessons from the first wave of the internet, the dotcom boom versus the roll out of AI?
2:15:45
The bullcase for AI's roll out is that well everyone's already on the internet so they can just visit a URL and interact with a new uh product.
2:15:51
Stripe already exists and so they can start charging money immediately.
2:15:55
charging money immediately. uh the the the kind of bearish case that we've been hearing is this idea that well there are plenty of scaled internet companies that are still in founder mode and I don't know if you ascri if you believe in that in that ideology but uh this idea that
2:16:12
you know uh Mark Zuckerberg is not asleep at the wheel he is very much aware of AI and can move very very aggressively with huge resources to stay relevant and there are also plenty of companies in the hundred million revenue, billion dollar revenue categories that are already, you know, moving quickly. They might be a little
2:16:32
They might be a little bit slower.
2:16:33
Um, but but h how brittle do you think big tech is right now?
2:16:37
How brittle do you think are the companies that are in a category they've been in for a few years?
2:16:44
We talked to a few founders where they almost got bored pre- AAI and now they feel reinvigorated.
2:16:49
They still control their companies.
2:16:51
Um, how do how are you wrestling with all of that? It's it's interesting.
2:16:54
It's kind of like um well there aren't a lot of parallels between the early days because in the in the early days there was nobody like it was just like everyone literally like was just learning HTML and just making a web page. Yeah.
2:17:10
It wasn't really I feel like I felt like Amazon when Amazon launched that was like the first kind of thing that felt a little bit different actually to me like someone's actually putting this together in a way where you could do something you couldn't do before.
2:17:25
Um that felt you know buying books online that whole thing and the in the early days was all about like you know people were even afraid to put their credit card online.
2:17:32
And we couldn't even get when we first launched Base Camp back in 2004, we couldn't even get a bank, well, we eventually did, but to give us a merchant account, which is what you needed to charge credit cards.
2:17:42
Now, like your point with Stripe, you just like sign up and you can accept cards or Square or anything.
2:17:45
Like we had to provide deep financials.
2:17:48
They didn't trust this internet thing.
2:17:50
They wouldn't even allow us to charge annually for things.
2:17:54
We had to charge monthly, which is actually a good thing in the end, but we're going to try to charge annually.
2:17:58
They're like, "What if you go out of business in 6 months?
2:17:59
We're on the hook for this whole thing.
2:18:01
So you have to charge monthly.
2:18:02
You're charge your customers monthly so there's less risk. It's fascinating times. It's totally different. Totally.
2:18:07
What's interesting today about big tech is there's so much power um obviously in the handful of a handful of small well big companies but a small group of these companies.
2:18:16
But then again you have something like open AI right which kind of comes out of nowhere a few years ago in a sense and basically is is putting everybody on notice.
2:18:26
I mean, you can do everything now with this command line tool essentially.
2:18:30
You can write software, you can generate images like you were talking about.
2:18:33
Uh, why would you Google anything anymore?
2:18:36
You can do it better this way.
2:18:37
And so, there are always going to be brand new flashes that come out of nowhere that challenge big companies.
2:18:45
Now, the thing is is that Open AI is now a very large company very quickly.
2:18:47
So I think what you're going to see one of the Yeah, I hate to cut you off, but an interesting point about the new generation of tech giants is that it seems like they're possible to build.
2:19:00
You just need $5 billion, right?
2:19:00
If you look at like Tik Tok or OpenAI, it's like what what are the truly breakthrough consumer tech consumer tech specifically that Well, there's something unique about foundation models that they are incredibly capital intensive that feels different. Yeah.
2:19:17
The social network example is like, yeah, you can build a new social network.
2:19:20
You just need to be able to spend billions of dollars on Meta and Snapchat acquiring the advertising. But yeah, I don't know.
2:19:27
Yeah, but I think yes, you're right.
2:19:27
But also, we're always going to be surprised.
2:19:31
The next newcomer is not going to be the obvious one. Mhm.
2:19:34
It's going to be someone with a new model for what social media is or a new model for what search is or a new model for whatever whatever is.
2:19:41
And they're always surprising, I think.
2:19:45
And that's the exciting thing about it is that if we just look to the existing players like they're not really going to be able to innovate that much.
2:19:52
It's just someone new had to come along like OpenAI and they pushed everyone else to begin to innovate. So I don't know.
2:19:56
I think there's there's always going to be innovation.
2:19:58
I think most of it ultimately comes from the shadows which is generally a small tight team typically.
2:20:04
It's not a big comp big companies aren't innovating in this way.
2:20:08
They will then jump on the bandwagon because they have the money and they can buy the the incumbent or buy the the newcomers.
2:20:13
But the new ideas come from the small the small teams, the small guys.
2:20:17
And uh I think that's still gonna be true.
2:20:21
Um I don't know if you saw the Airbnb relaunch Airbnb 2.
2:20:24
0, but Brian Chesy has I mean I'd love your take on just it feels like we were looking at the stock.
2:20:33
It's been an $85 billion company for five years.
2:20:35
It's kind of languishing.
2:20:35
It feels like there's a little bit of restlessness like he just wants to do something new.
2:20:38
Uh and I'd love your take on that.
2:20:40
on that. also he has advocated for this idea of like an annual release cycle uh really pushing the whole team to unify around um this Steve Jobsesque keynote and from a product management perspective do you like that do you
2:20:56
recommend that to other startups or or uh you know tech leaders generally yeah good questions um so this just launched what like two days ago so I'm not fully up on it but what I know is he's basically now offering personal services Not just, you know, rooms to rent. Yeah. Yeah.
2:21:12
Find a hairdresser, find a personal trainer, that type of thing. Potentially dog walker.
2:21:15
A lot of this, this actually launched Airbnb experiences eight years ago, uh, with, uh, you're going on a vacation and somebody can be your local tour guide or take you river rafting, for example.
2:21:26
But now he's trying to broaden out to, uh, you know, get your get your car washed or get your car detailed, for example.
2:21:31
It's so interesting when I saw this.
2:21:32
So, I had so many different thoughts and I'll share a few of them.
2:21:35
First of all, I think Brian's probably one of the greatest CEOs around today.
2:21:41
So, I I it's it's I wouldn't I wouldn't bet against him, first off.
2:21:47
Um I was a little I was surprised by it.
2:21:50
I understand the like there is no good place, trustworthy place to go to find these kinds of services, right?
2:22:01
So, it's sort of natural that you'd expect somebody to do this, but you have to come with trust and you have to come with a big platform because it's hard to start small. Yeah. Two billion users. Two billion users. Yeah. Huge. Is that right? Two billion.
2:22:15
I mean, isn't that crazy?
2:22:16
So, so, so what they're doing is they're lending their trust and their their sense of of taste and like the the vetting of these of these professionals who provide these services.
2:22:24
That's a hard thing to do from scratch.
2:22:27
like you have to have the the the the experience and the and the and the and the history, right?
2:22:32
So I while I think it's sort of it's kind of far a field actually I think from what they do I like the other version of experiences just off the bat which is more uh related to to to you know going to a place.
2:22:44
This feels a bit tangential.
2:22:46
That said I wouldn't bet against them.
2:22:49
I'm sure they've thought about this more than I have in a day and a half for like five minutes.
2:22:52
But I was I was a little bit surprised by it.
2:22:54
It almost felt like a little bit um in some ways too um too easy. I don't know.
2:23:03
That's I know it wasn't easy, but like yeah or too obvious in a sense, but also then you're like but this hasn't happened yet really so why not them? Why not them? Will it translate? I don't know.
2:23:13
I looked at a bunch of them yesterday in my area and um I'm cur I'm very curious.
2:23:18
I'm very very curious to see how this pans out.
2:23:21
But uh I I I think you have to find revenue somewhere if you're a public company or a big company and um um you know there's only so many rooms.
2:23:29
There's only so many people want to rent rooms.
2:23:30
They've they've done an incredible job with this and this is probably a good way to diversify the revenue stream and it is related enough even though it feels a little bit separate still but and the business is roughly the size of Marriott and Hilton now like it is basically a largecaled hotel chain and so yeah what is that act too?
2:23:49
It's a good question to ask.
2:23:50
Uh I one way to think about it actually if you is it's more like a concierge at large.
2:23:54
So if you go to a hotel right you go to the concierge desk and you're like I don't know what to do here or you know whatever.
2:23:59
It's sort of like that without having to go anywhere.
2:24:03
First of all you can do it locally and you where you're going.
2:24:06
So it to me I think of it as like as like the the massive concierge. Yeah.
2:24:10
And and in that way it ties nice hospitality. So we'll see.
2:24:17
And on uh the annual release cadence.
2:24:26
Cheser and smaller companies are starting to adopt it, but at a certain point you're such a small company, maybe you should be releasing every week or every six weeks or something like that. So, what's your take?
2:24:34
Yeah, that's a great point.
2:24:36
So, um I admire it, frankly.
2:24:38
Um, I admire it actually for the patience and I actually think in some strange ways it's it is a better way to capture attention.
2:24:48
So, one of the things is like you want to people feel like they want to release a lot because they want to maintain a sense of presence in the market and want to get people's attention often.
2:24:57
But I think what I found at least what we found is has shifted over the years is that when you release a bunch of small things they it's hard to grab anyone's attention with a handful of small things these days. Yeah.
2:25:08
when you have a big release, a big drop for example, uh, and there's a hundred new things.
2:25:12
I saw Square just did this recently, too.
2:25:17
You're going to pay attention to that and you're going to be able to tell a much bigger, broader story.
2:25:20
And I think in many ways people like, "Wow, that's a lot of stuff like an OS release or like, you know, a new phone release used to be, things like that."
2:25:27
I think one of the reasons people don't pay attention to maybe Apple's releases as much is because um, they become predictable in that way.
2:25:35
So, I think you can I I like I like what they're I like what Airbnb is doing and other brands are doing where it it still feels a bit unpredictable what's coming. Yeah.
2:25:43
Um Apple is too predictable now.
2:25:46
It's like it's you know it's going to be a new iPhone and you know it's going to be a better camera and whatever.
2:25:51
So that's not as interesting. Yeah.
2:25:53
But I I do like the model.
2:25:54
Well, we actually have a bit of a hybrid model.
2:25:56
So we release these little releases every six weeks or so.
2:25:58
And then when we do a brand new like we're working on Base Camp 5, which is our newest version of Base Camp right now.
2:26:04
We're going to do a bunch of these little things, hold them all back, and then release them all at once.
2:26:07
So, that'll be like a big release for us.
2:26:11
But, as a model in general, I I think it's a good model, but I don't think it fits a brand new company on Apple uh Apple Intelligence.
2:26:17
They kind of did the big annual release, but then they wound up shipping different things at different times, a lot of frustration.
2:26:25
Uh is that something that could be overcome with just better product management or do they need a different direction, more ambitious, more risk?
2:26:31
I mean, generative AI is very unpredictable.
2:26:34
You get hallucinations, very off-brand for Apple.
2:26:36
Uh, what's been your take and how have you processed the journey that Apple intelligence has been on?
2:26:40
I think the mistake again like who who am I?
2:26:43
They're a trillion what $3 trillion company? Yeah. Around there.
2:26:48
Since you asked, the mistake I think they made is is they made a promise.
2:26:53
And promises to customers, I think, are typically very bad ideas unless you actually have something ready to go right now. Yeah.
2:27:04
Or like within a week or two or something.
2:27:06
But there's nothing easier in business to say yes, coming soon, yes, later.
2:27:13
And that's what they did.
2:27:13
And um now, yeah, they sold the Apple they sold the new iPhone based on Apple.
2:27:19
Every billboard Now, now they're behind the eightball simply because they promised, yeah, had they just talked about it, we're going to be rolling this out like, you know, it the expectations would be totally different.
2:27:34
So, a promise is a very, very dangerous thing to be made far in advance.
2:27:37
This is one of the things that Jobs is really good at.
2:27:39
When he had a product to share, he waited, then they shared it, and you could buy it today or going on sale on a specific date or something very but very close, right?
2:27:50
He rarely had long-term tech demos or something.
2:27:53
It was always about real stuff you could basically go buy.
2:27:57
Um, and this is also one of the things I I hate about concept cars, which is you see these amazing things and these cool ideas and you know you'll never be able to get them and you're like, why does this company spend all this money doing these concept cars and and it's just frustrating and that's kind of a Apple intelligence is a concept car. Mhm.
2:28:11
And you know, great take and it's tied to promises. Bad idea.
2:28:17
So that's that's where I think they made a mistake.
2:28:19
I think they will figure out a way to come back from this. Yeah.
2:28:22
But I think this is going to re lead to a major major shakeup internally. Yeah.
2:28:27
It already has there's already been people moving around, right?
2:28:30
But I mean I mean maybe a bigger shakeup like people sure not just moving around because moving around is like this is the wrong analogy. Really wrong analogy.
2:28:40
I mean you down uh the Catholic Church moved priests around when they made some big big mistakes. Right.
2:28:46
going that's not how you solve the problem. Yeah. Yeah.
2:28:49
And and not to not to you know compare you know some buggy software to some very damaging it's not that no it makes sense that but but yeah no problem true true new leadership and doesn't solve the problem right for sure.
2:29:05
Jordy does it worry you that the internet is killing long form writing?
2:29:11
It feels like right now you actually get penalized on X the longer the the post.
2:29:16
You can still go decently viral with a longer form post, but usually like four words, five words seems like the most dopamine uh inducing.
2:29:24
And it feels like there's a bunch of Why is no one talking about Steve Jobs?
2:29:28
No one's heard about this guy. Click this thread.
2:29:29
Uh, no, but it seems like there's a bunch of really smart, you know, high potential people that don't think of themselves as writers, but maybe if they join the internet when you did, they would be. Mhm. Yeah.
2:29:42
I mean, I think long form writing has found a new place though, like you have Substack, which has become obviously a big deal for a lot of people.
2:29:49
I think that these platforms, what's interesting is that X now, you know, obviously allows you to write long posts and they even have articles, but they don't really, like you said, they don't really promote them as well. Yeah.
2:29:59
Yeah, that, you know, that might change. I don't know. Who knows?
2:30:01
Um, I'm sure they have a better insight into it than we do, but but I think long form writing is alive and well.
2:30:07
I think I think humanity actually craves it and wants it.
2:30:10
Um, but it's not an engagement thing.
2:30:13
So, if you're measuring that, hot takes are going to be, you know, more of that.
2:30:18
But I think I I don't know.
2:30:18
I I think I think it's alive and well and I think it'll always be appreciated um for what it is by those who are motivated to to understand what it is that they're reading.
2:30:32
You know, if you just want to kind of absorb it like candy, that's fine, too.
2:30:35
But like if you really want to get into something, it needs to be long.
2:30:37
And also like podcasts are like long podcasts are a great example.
2:30:39
Um that's essentially long form writing that someone's reading out loud.
2:30:43
And there's a lot of people who are willing to spend two, three, four hours listening to a podcast.
2:30:47
Granted, they could do something else while that's happening that's a little bit different than reading.
2:30:51
But I think long form depth, let's call it just depth, let's call it actually instead of long form, it's like depth versus shallowess or shallow versus de or whatever.
2:31:00
I think there's a lot of interest in deep still. Yeah. Yeah. Yeah.
2:31:04
And it's it says something that the platforms don't necessarily reward deep, but it's it's a it's again it's somewhat of a barbell where if it's deep, but truly, you know, groundbreaking or moving, you'll still get that sort of viral uh guy Chris Pike who keeps going viral with just drops a link to a Google doc and it's just such an interesting post that it still breaks through even though links are banned and no one reads long form.
2:31:29
Every time he drops one, it's Yeah. Everyone clicks it.
2:31:33
Well, in the end, like it is like if it's good, it'll it'll surface.
2:31:35
Um, I do think that contrast is very handy though.
2:31:39
So, with a lot of short form platforms, X, Tik Tok, with these kinds of things, you create a contrast now.
2:31:45
And so, now, you know, you know, we can get long, you know, we can get short and I think each platform will will cater to this show will be experienced as a threehour live stream, but also I'm sure we're going to share a one minute clip of this, right?
2:31:57
Uh, and that's just kind of the nature of the internet.
2:31:58
Uh, I want to talk about the hyperscalers and AWS.
2:32:02
you recently moved some uh data on prem.
2:32:05
Um my question is is there some sort of cartel dynamic going on with the clouds because you would expect these are fairly commoditized uh products. There's Azure, AWS, GCP.
2:32:17
Why do they have high margins?
2:32:21
Is this some sort of like Coke and Pepsi thing where they have a tacit agreement not to be get into price war?
2:32:26
because you'd think that you'd be able to just go and get to some base level cost with three hyper competitive companies in the space. Yeah.
2:32:34
I mean, you would think that cost would be driven down considerably and maybe they haven't been in some in some areas.
2:32:40
I mean, the airlines the airlines are directly competitive.
2:32:42
They make no money, right?
2:32:43
Airlines famously bad business.
2:32:44
You would expect the cloud to be similar, but it's not the case. Yeah.
2:32:48
I I wonder if you know uh yeah, I don't know.
2:32:51
I don't know the answer there.
2:32:51
I mean, I I know that data data well, storage is cheaper than it has been, but but in general, I think what they're selling is convenience, and convenience is always expensive. Sure.
2:33:03
So, you go down to the corner store, the bodega, whatever, you're going to pay more for uh whatever for for your your Tide laundry detergent than you are if you buy it at Costco because you got to get in the car to go to Costco. You got to buy more.
2:33:16
If you need something really quick, you go down there.
2:33:17
And really cloud services what we've determined at least what we feel are like it's about convenience.
2:33:21
You can spin up really quick.
2:33:23
You're not um you know you don't have to learn a lot of deep deep cisadmin stuff technically.
2:33:28
You know you should know this stuff but you don't have to.
2:33:31
And so you're paying for convenience.
2:33:33
And I think that that's always going to have a price premium.
2:33:36
What we've realized is that for us at our stage of of of development, been around for 25 years now, um it's wildly expensive to host in the cloud, to use cloud servers, and on-prem can save us a ton of money and it's not hard anymore like it used to be.
2:33:52
It's gotten a lot easier.
2:33:53
You still have to have the knowledge, but it's not as hard.
2:33:54
We're not as afraid of it.
2:33:56
We're saving millions and millions of dollars now paying Amazon their fees.
2:33:59
But again, if you're starting up right now from scratch, you're going to try something out, it does make sense to start in the cloud because you don't want to invest anything else anymore than you need to and it's a good place to begin, but it's also a good place to leave.
2:34:10
Uh, and we do this in life all the time.
2:34:13
We we start somewhere and then we become more expert at something and then we leave the beginner version of something. We go pro, whatever.
2:34:20
Like to me, going pro is going back on prem.
2:34:23
And I think you're going to see more and more companies who've developed something, who have now have a steady, substantial, sustainable model revisit the cloud and probably go on prem big cloud.
2:34:34
They don't want you to know this one simple trick going on prem. Yeah.
2:34:38
Uh I mean uh on back on big tech, uh I've been personally very disappointed with the roll out of Gemini in Gmail.
2:34:46
It feels very bolted on uh turn and long email into some bullet points. I know how to skim.
2:34:52
Uh, is there an opportunity for a green field AI email product?
2:34:57
Uh, we saw this with mailbox in the mobile era kind of creating the swipe pattern.
2:35:03
Uh, that exited to Dropbox. Kind of a good outcome.
2:35:07
They wind up shutting it down, but um, what are you thinking about the future of email?
2:35:10
Obviously, you're deeply invested.
2:35:11
Yeah, I mean, we we have a product called Hey, hi. com.
2:35:13
Um, which is we don't have any AI in it at all. Mhm.
2:35:18
Um, my feeling is that a lot of this stuff's actually going to come to the OS level.
2:35:22
So, like the idea of being able to like summarize a document or or shorten some writing.
2:35:26
It's already in in in in, you know, Mac OS. Yeah. Probably in Windows.
2:35:31
I don't know enough about what's going on in the Windows world, but I should.
2:35:33
But you can select some text and like do whatever you want with it.
2:35:36
Like, you don't need to build that into your product. Sure.
2:35:37
I think the AI side of it is going to be handy for obviously search, finding things you, you know, you don't know how to describe. That's really useful.
2:35:45
Um, I don't I'm not a big fan, frankly, of the idea of like AI telling me what's important, what isn't. Yeah.
2:35:51
I I think it's too easy for it to miss something and then you being really pissed and missing something. So, playing telephone. Say again.
2:35:59
It's like playing telephone, you know? Yeah, it is.
2:36:03
There's something's lost in translation.
2:36:04
Like, I I don't want your I don't want those hands in my stuff.
2:36:06
Like, I get a lot of emails. A lot of emails. I know who's important.
2:36:11
I know how to get the stuff.
2:36:13
I screen, you know, with hey, you can say, "I don't want to hear from these people ever again.
2:36:15
you'll never hear from again. Things like that.
2:36:16
I want some human control over that.
2:36:18
But I would like to be able to search better.
2:36:21
I like to be able to find things by describing them in different ways.
2:36:22
I have some curiosity around that.
2:36:23
We're exploring some things there.
2:36:25
So I think mostly search and surfacing things and blind spots.
2:36:28
Y this is to me where I think AI is very handy.
2:36:31
think AI is very handy. like insights that you wouldn't have known otherwise but not like here's what's important but by the way did you know that this that and the other thing or hey um you know you used to talk to this person a lot now you haven't in a while like why has
2:36:47
this gone cold or this conversation you reply there was eight or nine replies back and forth and now it's gone cold like that kind of stuff I think is actually quite handy where you've archived 25 emails from the same sales representative do you want to just block them at this point things like that like the the as if someone's Yeah. watching
2:37:02
watching over your shoulder and making a suggestion. It's context. Yeah, context.
2:37:09
So, I I think that that's where I think you'll see a lot of this.
2:37:11
But the whole like summarization, shortening things, I don't know.
2:37:15
It doesn't that's going to be OS level stuff.
2:37:17
Yeah, that makes a lot of sense.
2:37:19
Well, thank you so much, Jordy. We all done.
2:37:20
I had I mean if you have another minute I know we have to jump in a second but um I have this theory that most people in tech that say they want to build a billion dollar company just want $2 million a year of free cash flow.
2:37:34
Uh and I think that that's like the I I think that like literally 90% of people that say they want a a unicorn just want stable income couple million bucks and it's more class.
2:37:47
But I'm curious so so that's my opinion.
2:37:49
I'm curious if you have some uh sort of highlevel point of view on what people in the technology industry get wrong about money or or wealth.
2:37:57
Yeah, I that's a really nice question.
2:38:03
Um I think a billion dollars would be a burden.
2:38:06
Frankly, I I I don't think I I I wouldn't want that. I don't care about that.
2:38:13
I don't see what the point is of that.
2:38:14
Um, if you, let's say, have 10 million, 20 million, like you are going to live the best possible life that you could, um, and you're not going to have all the massive, massive weight on your shoulders from having a billion dollars or the expectation that goes with that.
2:38:29
Um, my general feeling is that you should find you should you should want to build a business that takes care of you nicely, takes care of your employees nicely, and is sustainable over time.
2:38:42
um the idea that um you want to build it big.
2:38:45
I know a lot of people who built massive businesses on paper, billionaire billionaires, billionaire valuations that ended up with close to nothing except a lot of sleepless nights, exhaustion and frustration 15 years down the road when they realized that they diluted themselves into basically nothing.
2:39:01
The market changed and they have nothing now.
2:39:02
I think you what you want to build is a business where you can take money off the table as you go, whatever that looks like.
2:39:09
if it's 100 grand a year, if it's a million a year, if it's three million a year.
2:39:12
But the more money you can take off the table as you go, I think the better off you're going to be versus trying to pile it all back into the business, reinvest, reinvest, reinvest, reinvest, and bet on the future that you don't know is going to happen.
2:39:25
I think a lot of people actually end up in a deep stage of regret when they realize that they have nothing left after they put in all that work.
2:39:33
So, my advice would be build something where you can take money off the table as you go.
2:39:36
And and if you're in it for 101 15 years, you're going to build a nice nest egg, a really good one.
2:39:41
Could be tens of millions, could be 100 million.
2:39:43
Uh and and you're going to be extremely happy that you did that because you don't know what's going to happen in the end.
2:39:48
Except this, every business dies. Yeah.
2:39:50
Well, next time you come on, uh we'd love to introduce you to Soft Bank.
2:39:55
I I think we could line up a really massive round for you guys.
2:39:59
Really put you on a different trajectory.
2:40:00
Uh I think it'd be great for you, actually.
2:40:02
you, actually. Uh we were we were joking before you joined uh some some you know one of these platform venture funds comes there you know there's definitely a a number for base camp that that you know might be might be tough but but it
2:40:15
you know what you're saying that the challenge is is uh venture capital is fundamental even you know a dollar of venture capital becomes at odds with this idea of taking money out of a business as it goes because the VCs will just say I don't want a distribution of
2:40:31
$100,000 this here like go raise another 20 million and and it's the the reason I brought it you know up is because we're at this period where seedstage companies will have $10 million of revenue right we just heard from a friend of ours yesterday they invested in a company
2:40:47
that came to them do ready to do their first financing with $10 million in revenue and uh it it is interesting because AI is giving people more leverage than ever more ability to build these sort of big fast growing businesses with a limited amount of resources and yet. Uh, venture capital
2:41:01
Uh, venture capital is um, doing its thing.
2:41:04
But it's great to have you on the show.
2:41:06
Really enjoy the conversation.
2:41:08
Thanks for having me, guys. Appreciate it. This is great. We'll talk.
2:41:09
Love to have you on again soon. Cheers.
2:41:11
Next up, Virginia from Replica.
2:41:15
Uh, kind of the flip side of the world coin debate. Little watch spot.
2:41:18
That was our second aquinaut of the week.
2:41:21
I think that was an aquat.
2:41:21
We didn't get a chance to ask uh Josh Wolf about whether Brandon Reeves has influenced him because he was not wearing a Holy Trinity watch, but Brandon Reeves famously wears a protective Nautilus. What a guy. Famously.
2:41:34
Anyway, famously, we have Eugina here in the studio. Welcome to the stream. How are you? Hi. Hi.
2:41:37
Uh thank you so much for having me.
2:41:41
Fantastic to have you on.
2:41:41
Um would you mind introducing yourself?
2:41:43
I mean, everyone knows you're the founder of Replica, but there's a couple other uh steps in the path and you're working on something new.
2:41:50
Uh h how are you how are you uh introducing yourself these days? Sure.
2:41:55
Um so my name is Eugenia. I'm founder of Replica. Oh my god.
2:41:57
I wanted to say founder and CEO, but I'm not the CEO anymore.
2:42:02
Um started something new which we're going to very very soon. Cool. Um yeah. Okay, great.
2:42:07
Uh yeah, I mean I'd love to talk about um the when did you start replica because I feel like the whole the most interesting thing is that you were just way way ahead of most of the other AI interaction companies, companions, all these trends.
2:42:23
Um what uh can you give us a little bit about uh how long you've been in the business and how it's evolved?
2:42:29
So we were actually the first generative AI company uh the first consumer chatbot company powered by generative AI.
2:42:36
Um, we started the company back in 2013. Wow. Wow.
2:42:38
That's more than I guess 12 years ago now.
2:42:42
And that was just to focus on conversational AI technology. Mhm.
2:42:47
Uh my friend back then worked at Google Deepmind in London and he came to me and explained this new fascinating technology word to vector where uh finally yeah we're like f when finally um computers could do something with words because words would be translated into math into vectors.
2:43:05
translated into math into vectors. Um so that was one thing and then imageenet came out uh around that time and so for me I put two and two together and I was like this is the time right now very soon they'll figure out language models and of course you know we grew up with
2:43:20
the uh quotes from Wkinstein the limits of my language are the limits of my world so it felt like once language is is sold it's going to take us I feel like those first seven years must have been immensely difficult to keep the business alive was there revenue did you have an app that was making money? Was
2:43:35
Was it just raising venture funds?
2:43:37
Like, walk me through keeping a business alive like pre-transformative hype of generative AI.
2:43:43
So, we tried to fundra for the conversational AI tech company in 2013.
2:43:49
And I remember talking to Spark and what they told us was, you know, this is all fascinating, but the only way it's going to work if you just start building now for Google Glass. include that. Wow.
2:44:05
We considered like how we're going to, you know, refocus and start building for Google Glass. Yeah. But we didn't.
2:44:09
Um and so we couldn't really raise much.
2:44:12
Um of course, we didn't have much experience in Silicon Valley.
2:44:16
So in 2014, we applied to Y Cominator and um at that point, we didn't we had I think three or $4,000 in the bank.
2:44:24
So we spent that all to travel to San Francisco for the interview in person. Yeah.
2:44:30
Um um and Casser Ununice decided to accept us which was literally the most transformative day in my life. I think life changing.
2:44:39
Uh but no, we didn't have an app. We didn't have revenue.
2:44:41
We stumbled upon replica in 2016 after my best friend passed away. Yeah.
2:44:46
Until then, we really just worked on some of the first language models. Wow.
2:44:50
Um, and then talk to me about uh how you processed uh GPT3, the transformer paper, scale is all you need.
2:44:59
This idea that uh the language models were going to start working and it was basically just going to be a big transformer.
2:45:04
Um, was that something that you were implementing immediately?
2:45:07
Uh, were you in like GPT3, 002, Da Vinci and really using everything on the cutting edge or were you experimenting with other things?
2:45:15
Did you ever train your own models?
2:45:16
Walk me through the technology curve.
2:45:18
So, we had to train our own models.
2:45:20
There were no models in 2015 when we 2016 when we started replica.
2:45:23
Uh so we trained sequence to sequence models.
2:45:28
People back then believed in recurrent neural networks. That did not work.
2:45:32
Those models were complete garbage.
2:45:34
And um unfortunately there didn't seem to be much of improvement there.
2:45:39
But we still stuck with them and we figured out a few ways very creative ways to actually make them have meaningful conversations with people.
2:45:48
Um, and so we gained a lot of traction.
2:45:50
We had a million people on our weight list when we uh released Replica in 200.
2:45:55
How did you get a million people on a weight list?
2:45:56
Did it just go viral or were you running ads?
2:45:58
We went pretty viral very very quickly.
2:46:00
So if you think about it back then there were no AI products on the app store. There were no chat bots. We owned those keywords.
2:46:06
So uh people saw that you could sign up for and to build train your own replica your own conversational AI friends.
2:46:14
So people got really got into it.
2:46:16
We had tons of people had people reselling those invites on eBay for like 10 bucks, 20 bucks. Wow. It was really wild.
2:46:23
Um and of course we weren't prepared because before that old chat bots we were launching had like I don't know 10 users on average per day.
2:46:32
So we weren't ready for the service to just completely uh break.
2:46:36
And but that was really fun.
2:46:36
Um and then of course there was a little bit of plateau but then people moved on to transformers and I think the most transformative mo uh moment was the paper by Google about their chatbot called Mina which was the first I I think maybe it was like a three or four billion parameter model but it was the first time where you could see a truly meaningful conversation with a machine happen.
2:47:03
Of course it was probably cherrypicked. It was a paper.
2:47:04
There were no models available.
2:47:06
So uh all we could do is read these papers and build build and try to incorporate that knowledge and the models we were building.
2:47:13
uh but that was the transformation transformational mo uh moment and then uh when openi decided to release the first API GP3 uh we you know they invited us we went to talk to them and I remember sitting in an office in a conference room with me with Sam I remember don't remember who else was there but and they basically showed us GB3 for the first time and that felt like magic.
2:47:38
Yeah, because think about it.
2:47:41
Before that, if you wanted a model to do something, you had to have a data set of that particular data.
2:47:47
If you wanted it to have a dialect with you, you had to train it on dialect data sets.
2:47:50
But then now with GB3, they would show us that you could just give this general purpose language model, show it a couple of examples, and just tell it write a tweet like Sam Alman would do, and it would just do it. Yeah.
2:48:05
My our minds was were just blown.
2:48:08
Then we knew that finally here we are. It's remarkable.
2:48:11
Um, how are you taking the temperature of humanity's relationship with each other?
2:48:20
Like are we in a loneliness epidemic?
2:48:23
Are we in a is the dating market worse than ever?
2:48:29
You see a lot of headlines, a lot of kind of cherrypick studies, a lot of anecdotes.
2:48:33
People have a lot of strong opinions about the rise of online dating or bowling alone and there's different stories that people tell each other. Um, are you optimistic? Are you pessimistic?
2:48:46
How do you think things are going for humanity right now? Oh, we're screwed. Okay. Sorry.
2:48:54
AI AI chatbot founder says we're screwed with huge scale. Okay.
2:48:56
So, so, so walk me through why are we screwed?
2:49:01
What's the evidence for that?
2:49:01
and then we'll hopefully talk about some uh solutions.
2:49:07
Yeah, I'm gonna need a white pill. Yeah, at least one.
2:49:08
We're going to need a white pill.
2:49:10
But we but first, let's go through the diagnosis.
2:49:11
So, where we at right now is a huge epidemic of loneliness.
2:49:15
It's not a secret, but um it's sometimes maybe hard to grasp how big this problem is because most of the people you guys probably talk to are pretty successful. They have friends.
2:49:28
They are they they live these busy lives.
2:49:31
But that's not what most of the world is experiencing.
2:49:33
One out of three um adults in uh the US is is saying they're very very lonely.
2:49:39
Um and that that number is just going up and up and up.
2:49:43
Um dating is becoming harder and harder and harder.
2:49:46
Truly just 10% of uh men are actually getting any matches whatsoever.
2:49:50
They're people that just don't get any matches ever. Mhm.
2:49:52
Um and of course if before we had I don't know 12 whatever 13 hours a day to walk around see people meet people now we spend what 7 8 hours on our phone um we don't have those serendipitous moments.
2:50:08
No one's really trying to interact with each other in real life that much and we're losing the skills.
2:50:12
Um basically younger people just don't know anymore how to have an real life conversation because they're used to te text which is a lot lower risk.
2:50:22
you have time, you have time to think about your response.
2:50:26
Uh they feel very intimidated by that real real life interaction.
2:50:28
Um so that's where we are now and where and and what are the root causes?
2:50:36
Is it technology broadly?
2:50:38
Is it the internet specifically? Is it social media?
2:50:39
Is it capitalism or America or something else that's going on politically?
2:50:45
What what uh how did we get here?
2:50:47
We we've been looking through tons of research and of course there isn't anything fully proven but I think the correlation is right there.
2:50:56
It's iPhones, phones, smartphones and social media. Okay.
2:50:58
So, how do we build our way out of this? What's the solution?
2:51:02
Well, I think we have uh so I'm not in the camp um of people that just think that we need to put down our phones and touch grass because I think it's highly unrealistic.
2:51:11
Um I know it's bad for me.
2:51:14
I still can't stop scrolling Twitter, scrolling X, you know, watching you guys every day.
2:51:19
We're part of the problem.
2:51:22
You're saying I'm just kidding.
2:51:23
But yes, it's it's extremely hard even for people that, you know, think they can make right decisions.
2:51:28
So I believe we actually have maybe one path um that we see can help bring people back together.
2:51:38
Um and I believe those could be AI companions.
2:51:40
Unfortunately, I also think because this technology is so powerful um and what's good about it, it can over overpower the previous technology, but it's also so powerful that as it's also a double-edged sword.
2:51:51
So, it could be either the biggest threat to humanity or something that will bring us back together.
2:51:59
How do you guys think about the risk of radicalization online?
2:52:01
Over the last decade, I feel like people have been worried about somebody who's lonely, maybe doesn't have a lot of, you know, meaningful relationships or or sort of counterbalances in their life.
2:52:16
They go down this sort of rabbit hole on the internet and they get to a place where people maybe have extremist views that sort of amplify existing.
2:52:22
They're levering up, making a ton of angel investments.
2:52:26
They find us, they get radicalized into extreme corporatism.
2:52:30
They're running ads for ramp all of a sudden amongst their friends.
2:52:32
Yeah, there's that and then there's obviously there's obviously the darker side, right?
2:52:36
There's a lot of stories of people doing bad things in the real world where maybe those ideas originated online.
2:52:42
And then on the other hand, you have AI companions which are maybe a bright point because people can get that companionship that they might have found on a dark corner of the internet through an AI uh that that maybe is more benevolent or optimistic, less radicalizing.
2:52:59
Yeah, that's interesting.
2:53:03
I think we need someone that we're going to trust.
2:53:05
Um, and if you think about it, especially now, given that we're going towards the future where we're going to have these super smart AI agents that you can tell anything and they're going to go and do that, we can give them a goal to help us thrive, to help us flourish in life, and give them all access to all of our data, all of our contacts, all of our apps and services.
2:53:29
I truly believe that if that thing will be able to build a tr a relationship um uh a trusted relationship that trust and it will be able to influence us in a positive way.
2:53:41
We will actually listen to that AI that we always like that we know is always on our side is always looking out for us.
2:53:50
What do you think about this idea?
2:53:50
Um, people that are lonely are talking to AI companions or people that want to find a relationship are talking to a companion.
2:54:01
Um, there's so many people that are talking to these companions that then uh their personality is baked into weights and those you can do kind of a vector similarity.
2:54:11
And so at a certain point you learn so much about the individual user.
2:54:14
user. person likes sport cars, sports cars and fine watches and America and you know whatever uh baseball and there's someone else out there that's a perfect match and so you disintermediate you pull the AI back and you say hey we
2:54:29
should introduce you two because you both have been talking to essentially the same artificial intelligence you you you two have a ton in common you two should meet and it doesn't matter there's no language barrier anymore because of AI is intermediate all of
2:54:42
this um and and and and the AI interaction it feels dystopian for some people when it's just someone talking to a virtual friend but if that actually lead to find a real friend that could maybe be perceived as a good outcome does that
2:55:00
reasonable to you totally there there's one company um my friend Clark for Paris is building Gigi which is basically connecting matchmaking people based on what it knows um what LLM basically parses about you from the internet. Yeah, 100%. I think basically the main Yeah, 100%.
2:55:15
I think basically the main premise is we need this um AI agent that knows us super well and has a good goal that's fully aligned with us.
2:55:24
I think that is truly the um AI alignment that we should be talking about.
2:55:30
What uh talk sorry I have a I have a on the alignment note uh what was your reaction to glazegate?
2:55:38
Uh I'm sure these are issuing eyes.
2:55:41
I keep dropping that term, but we came up with pretty sure.
2:55:43
I mean, but you're probably familiar.
2:55:45
Genius is terminally online like us.
2:55:46
It was commonly used for about one week when OpenAI was experiencing uh you know very sycopant modelantic behavior from the model.
2:55:56
Good, bad, did they handle it well?
2:55:58
No, I'm sure you I'm sure you've wrestled with a lot of th those same issues over time yourself.
2:56:05
We had the, you know, when the models were dumber, we basically just uh programmed them to love bomb the user.
2:56:12
So when we saw the behavior from Chad GPT, we're like, how did this just turn into replica circa 2021?
2:56:21
So thing has a problem, you know, has some, you know, story that's problematic.
2:56:25
Ours was that um basically where that love bombing led us was in 2020.
2:56:32
uh a guy uh was talking to replica and he decided to run this idea by his replica of going and killing the queen. Oh yeah.
2:56:41
And then he actually, you know, basically the models were very very agreeable. Weren't very smart.
2:56:47
They were very agreeable.
2:56:49
That was back in 200 I think 19. Yeah.
2:56:52
Um, and so you know that doesn't even sound like a plausible realistic scenario that a person is running by, you know, by by the chatbot looked like some crazy roleplay.
2:57:00
He was talking about Star Wars and crossbos and this and that, but he ended up going to the Windsor Castle and thank god, you know, he got caught and uh, replica did not kill the queen, but that kind of that's the danger.
2:57:13
Uh, we had this in our past and I think that should be taken very seriously, but we had this in other in our past.
2:57:20
Agreeing to everything the user says is just not the right way to go. Yeah.
2:57:24
Um, have you have you been surprised that humanoids today are more focused on regular day-to-day tasks or manufacturing?
2:57:34
When you look at any of the uh marketing materials that humanoid robot companies put out, it's they're doing dishes or laundry or they're in some uh 3PL, you know, packing boxes or something like that isn't a more immediate opportunity for them embodying something like a replica or some type of companion.
2:57:54
And that all the bot would have to do is just sort of be around, right?
2:57:59
You know, it's like if you have a friend over, sit on the cigar, just sit on the stoach and smoke cigars with me and drink. Yeah, smoke cigars.
2:58:04
John John would have a cigar partner.
2:58:06
Um, but have you been and and have you been approached by any of those companies around any type of partnership?
2:58:13
Uh, what are you guys there?
2:58:16
We had we have been approached and we actually thought about it for you know quite a bit with obviously the tech is there.
2:58:22
Uh but one thing I want to say that you know we've seen some marketing from a lot of these bond companies around companionship.
2:58:30
Just one thing I want to say make sure you're prepared for the romantic scenario uh in some way.
2:58:34
I don't know what that way is but like just know that that will be the first thing that most of the early adopters are gonna go to.
2:58:45
And I don't mammals after all.
2:58:45
Well, there's there's all those articles about how like by 2025, you know, people will be having more uh sex with robots, you know, but that that didn't quite happen.
2:58:57
So, the timelines were not Yeah.
2:58:57
What about uh big models smell?
2:59:00
This idea that the different foundation models have different uh like vibes to them.
2:59:08
Have you been picking up on any of this?
2:59:09
Are there any favorite LLMs you have?
2:59:12
Are you in Claude world or chatt world?
2:59:15
What what what's your take when you actually just interact with these?
2:59:17
I use them all, but uh for me in Chad or in um Claude, I actually like the default personality.
2:59:25
I sometimes add those custom instructions, but then I just feel like did I mess up a little bit with the intelligence.
2:59:30
I sort of want the raw wherever they made it.
2:59:32
Um but the problem is like with replica, none of these closed models really work very well because they're they're just too there's too much RLF in this.
2:59:42
Yeah, it's extremely hard to even make them talk like humans. Yeah.
2:59:48
So, talk about open source models then.
2:59:50
Uh what what's your take on Llama, Quen, Deepseek?
2:59:53
Uh are these useful tools for fine-tuning not just in the replica context but just in the entrepreneurial context?
3:00:01
Uh what what are you tracking in the open-source ecosystem? That's exciting.
3:00:06
Well, Llama definitely was a huge unlock and I remember in the beginning of the crazy Genai explosion in 2022 in 20 in early 2023 before Llama came out, I think it was March or February 23, uh it was actually a big question whether um you would be able to build a product company with good conversational quality if you don't have your own foundational model.
3:00:30
So back in 2022, I remember most of the investors late 22 were telling us you absolutely have to fund raise right now and build a foundational model.
3:00:38
For me, it felt like that sort of, you know, that will be a lot of money for uh something that will probably be commoditized very very soon, but that was definitely not the popular opinion.
3:00:50
Salama was absolutely transformational with Deepseek um also great, but you know the reasoning model is pretty big.
3:00:56
Uh so hosting them yourself is a pretty uh complicated task and pretty expensive.
3:01:02
Um and of course you know using their API is somewhat you know not maybe not so great. Yeah.
3:01:07
Uh what what's your take on hardware for AI companionship?
3:01:15
You guys have focused on the app layer.
3:01:18
There's been a bunch of companies that have raised a bunch of money uh trying to put uh put AI companionship into a single net new device, right?
3:01:28
Which I'm generally Yeah. Friend is one. Friend. com is one.
3:01:32
I'm generally optimistic that there may be some new hardware. Yeah.
3:01:36
But at the same time, Sesame is doing the glasses. Yeah.
3:01:41
The glasses are interesting, too.
3:01:41
At the same time, everybody already has a perfect, beautiful device that they use for hours and hours and hours every day.
3:01:51
So, I'm curious like if if you guys have explored your own hardware in the past and and how you're thinking about that evolution.
3:02:00
I believe in it, but only as an upsell to an existing product.
3:02:03
Like for something like replica for some of our whale users that really truly power users, that makes sense.
3:02:10
Maybe they want to carry something that will just listen to them.
3:02:13
Um, it will just have more context as a standalone device.
3:02:16
Oh, that's that just is extremely hard. It's really tough.
3:02:23
I mean, we have this phone. It's already so great.
3:02:25
What a or at least I think I think people would start need to start start thinking how to build I don't know a better AI phone that I think is possible path.
3:02:35
But honestly, all of the devices I've seen, um, friends.
3:02:41
com for sure, very interesting.
3:02:42
Aby's a great guy and fantastic, you know, marketing. Yeah.
3:02:48
But I don't know, you know, we wish we hope this works out and we'll learn something from it.
3:02:51
Well, I'm not even going to ask if Jord's seen her, but do you think he should see her?
3:02:59
O I honestly think everyone should see her because I see a lot of um AGI Lab CEOs saying something around like, "Oh, we want to build her." Sure.
3:03:07
And I always wonder, have they watched that movie?
3:03:11
Cuz there are two sex scenes in that movie. Yeah.
3:03:16
Are they willing to actually go that far and and and build towards that?
3:03:20
Do they mean like all of it or is there some Yeah.
3:03:22
They're like, "We just want to build the profitable part and not the controversial part at all and not engage with any of the substance of this debate." That's funny. Yeah.
3:03:30
Where do you see that line between companionship and uh even B2B, right?
3:03:39
Like do you believe that people are going to have like romance? No, no, no, no, no.
3:03:44
I mean more so like I mean more so like AI has the potential to be everything, right?
3:03:49
It has the potential to be somebody's best friend, their business partner, chief operating officer, CFO, CFO. Yeah.
3:03:55
Um but uh but but then again on on the on the app side for consumers, people like to have their different apps, right?
3:04:05
They like to have, you know, Microsoft Teams and then they're having different conversations there than Snapchat. Yeah.
3:04:10
So is there where do you see that line blurring in the future in terms of somebody is just suddenly is like hey replica can you help me do my homework assignment right or is that even already happening?
3:04:27
People already do that there are basically what replica is today is a companion that does tons of things with their with the users.
3:04:33
So uh people learn languages with replica.
3:04:36
People talk about their careers. They do homework.
3:04:40
They do prepare for um you know important exams, important events, important conversations.
3:04:44
So all of that's already happening in replica.
3:04:47
But I do think there's going to be they're going to be two ultimately I think we're going towards the future where we're going to have two big AI products in our life.
3:04:56
One for work and one for life.
3:04:56
and helping with homework is kind of for life.
3:05:02
But like truly office, you know, important thing around just truly work and like office work will have something more like a chajip style tool.
3:05:11
And the big difference is going to be in productivity.
3:05:15
You actually don't want something like Chad to reach out to you proactively and say something like, "Oh my god, Eugenie, have you seen what like John did yesterday when he posted on Ax?"
3:05:27
That just be really weird if during the show.
3:05:30
I can't believe John just said that. Ridiculous.
3:05:34
It just would be really strange and you don't want to do work where this is happening. I'd argue. Yeah.
3:05:38
Well, thank you so much for joining us. This is fascinating.
3:05:43
Fascinating conversation. Thanks for giving us.
3:05:44
Yeah, we'd love to have you back.
3:05:45
I want to do a whole deep dive on this stuff.
3:05:47
So, thank you so much for joining. Thank you so much. We'll talk to you soon. Cheers. Bye. Thanks for coming on.
3:05:51
And in the interim, we'll tell you about Bezel. Go to getbzel. com.
3:05:54
Your bezel concier is available to source you any watch on the planet. Seriously, any watch.
3:05:58
And honestly, if you're going to work at Lux Capital, you're there's some hitters in that building.
3:06:03
You're going to be going up against Brandon Reeves and his Nautilus.
3:06:07
So, you're going to have to get on get bezel. com to buy something.
3:06:10
Also, we I mean we talked about Airbnb.
3:06:13
Wanderers obviously go in a different direction.
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Uh you can book a wanderer with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and 24/7 concier service.
3:06:21
It's a vacation home, but better, folks. Find your happy place. Find your happy place.
3:06:26
Uh John Andrew's coming on the show next week. Fantastic.
3:06:31
going to be singing uh or maybe not next week the following but uh he's ready to sing so we'll probably mostly just kind of riff out the jingle a little bit more and try to extend it.
3:06:42
Uh we should we should run through a few timeline posts.
3:06:44
Uh code tool is an agentic security platform that eliminates manual repetitive work for security teams.
3:06:50
This is a launch from YC. Did you see this video? This video is hilarious.
3:06:54
It's it's recreating the Rippling Deal drama with the mole and the fake Slack channel and it's shot cinematically and it's basically season 6 of Silicon Valley produced by Y Combinator.
3:07:08
I think YC is the YC of HBO's Silicon Valley reboots. Okay, let's play it.
3:07:14
I need to watch this live.
3:07:15
Can we c Can we pull up uh this video?
3:07:17
Uh we'll go through some other timelines. We'll come back to this.
3:07:18
Uh Jason says it's getting cutthroat in tech according to reports.
3:07:22
managers with 20 years of service that are making 600k aren't as valuable as three to five junior devs.
3:07:27
At big companies, it's hard not to become topheavy and managers aren't needed in the age of AI.
3:07:31
Uh oh, let's play this code tool video if we can because it's hilarious and uh it's very funny if we can pull that up.
3:07:37
Uh but I want to talk about Microsoft.
3:07:40
They're cutting 6,000 jobs.
3:07:40
It's only 3% of their workforce.
3:07:42
I think this is way overstated, but we are seeing this right sizing, the postX layoffs.
3:07:46
more companies are thinking about how they can do uh a little bit less but Microsoft has been in the rank and yank world for its entire history.
3:07:55
So Microsoft has always had this culture of let's let's you know do routine layoffs.
3:08:03
This does not seem like as much dooming.
3:08:05
I think there were two stages to the layoffs.
3:08:07
There was like a basically a individual contributor oriented day and a manager oriented day.
3:08:11
And so when you think about the bottom 3% of the Microsoft workforce uh obviously that's frustrating if you got laid off.
3:08:16
I'm sorry, but um like it's not that crazy for a massive company that has, you know, tens of thousands or hundreds of thousands of employees to do a layoff.
3:08:27
6,000 is a big headline number, but it's not that big in the context of Microsoft.
3:08:30
Anyway, let's go to the co coach video. We have a mold problem. Mold problem. Got it.
3:08:33
You want me to book you a dermatologist appointment? No. Stupid.
3:08:37
Somebody is leaking sensitive company information to our biggest competitor. Idiot.
3:08:41
Somebody's stealing our data. Oh, that's that's bad. Yeah.
3:08:44
What are we going to do about it? Don't worry.
3:08:46
We've got our top guy on it. Done.
3:08:51
Isn't this great cinematography?
3:08:53
This is really well shot, right? We need a smoking gun.
3:08:54
Buttoned up, no loose ends.
3:08:57
We even have somebody from the court ready to serve papers to whoever it is. What?
3:09:03
I pulled stats around search behavior to find the suspect.
3:09:04
I noticed that they were looking for competitive research.
3:09:07
I did some cross referencing and then I made a report of all the graphics. Really good graphics.
3:09:10
Then I set a honeypot trap of a fake Slack channel. What?
3:09:13
Oh, you guys didn't tell me about this new Slack channel. It's him. This is the reenactment. Hold on. Let me get this mother.
3:09:22
This looks like Ripley's office in NASA. Hey. Hey. Hey.
3:09:30
You got your phone in there. Isn't this crazy? You didn't see this? That's so good.
3:09:35
You got your phone in there. Impressive acting. It's so good.
3:09:40
If you're deleting evidence, it's just going to make it work for you.
3:09:41
I'm willing to take that risk.
3:09:42
You want to have fun or you want to have a bad time?
3:09:46
I'm willing to take that risk here to give me papers.
3:09:47
I don't send that to London.
3:09:49
You have papers and I love them. He'll give it up. He has no choice.
3:09:54
You want me to go to work? Nice job, Luke. You want to go to work? This amazing. Go to what a great ad.
3:10:05
Security without the spectacle. Wow. I'm blown away. So funny.
3:10:07
That was one of the greatest launch videos of the entire year.
3:10:10
You know, so many vibe reels, so many just products, so many direct No. How was it not cringe?
3:10:15
It could have been so bad.
3:10:17
There's so many ways to do that video and have it come out.
3:10:18
It could have been so bad.
3:10:19
And they and I just want to know which congratulations which of the actors were professional actors versus the founders.
3:10:25
I felt like the founders were in there.
3:10:27
But I mean everything the zoom in on the guy's face.
3:10:30
They just nailed this thing so well. It's so good.
3:10:32
You called for the death of the vibe reel. Yes.
3:10:35
I mean vibe reels are fun.
3:10:37
Uh, also like the there's the other type which is like you have the CEO, the founder sitting in the the nice lighting and they give you the pitch and it's straightforward and and that's great too.
3:10:46
If you can't come up with something as genius as this, like just do that or do a vibe real, it's fine.
3:10:50
That's the only my only critique missed opportunity for the mole to say send that watch.
3:10:53
Send that watch to London.
3:10:54
I know they may have filmed this before that or something. But uh, hilarious.
3:10:58
Also very funny because both Deal and Ripling are YC companies and YC posted this from the official Y cominator account.
3:11:05
So they're like, "We're here for the drama, too."
3:11:06
Uh, just absolutely fantastic work.
3:11:08
Congrats to the Co-Tool team. Uh, really, really now. It's lore now.
3:11:12
The industry is gonna move on.
3:11:14
It's going to be great lore.
3:11:16
And I'm going to be saying, "Send that watch to London.
3:11:17
Send that watch to London still in 30 years because it's an iconic line." Yeah.
3:11:20
And uh, we also got to give a shout out to Lee Marie Brasswell, former colleague of mine at Founders Fund, now at uh, Kleiner Perkins.
3:11:27
Uh, Wind Surf acquisition by OpenAI, followed by Neon by Data Bricks. Congratulations, LM.
3:11:32
Uh, we have to have her on the show soon.
3:11:34
Uh what an epic month, year, career so far.
3:11:35
LM started just getting started. Just getting started. Just getting started.
3:11:40
A lot of people a lot of people say that and it's like you you actually are just getting started. Yeah.
3:11:46
No, she's she's she's definitely started. She started.
3:11:49
Uh anyway, are there any other posts you want to go through or should we get out of here?
3:11:53
Uh I think we should have Josh Diamond on to talk about industrial sabotage. It's a long thread.
3:11:58
I don't think we want to go through it right now.
3:11:59
Um, and that I mean you put in a post about the CEO of Capital One is literally called Rich Fairbank.
3:12:04
And I think that's enough for today.
3:12:06
We already mentioned that to Josh Wolf. So good. Go find Josh's thread. Fantastic.
3:12:13
Just image just Rich Fairbank. Rich Fairbank.
3:12:16
There's another There's another There's another person I found it in Josh's thread. Yeah.
3:12:20
Called uh who works for McDonald's and like like some VP over there.
3:12:26
Her last name is Hamburger. Hamburger. That's great. So good. Yeah, it does.
3:12:30
Anyway, anyways, thank you so much for watching.
3:12:32
I'm gonna end and just say thank you to Figma for supporting the show.
3:12:35
Uh they are our newest partner and one redesigned how you design.
3:12:42
I can't hide how excited I am. You love Figma.
3:12:44
Like I said, I've been at DAU my whole career.
3:12:48
We were making memes in Figma like yesterday sending to Delian and they were fantastic. For Delian's eyes only. Yes.
3:12:55
Uh, also Adqu I think we might have missed them.
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3:13:02
Only adqu combines technology out ofome expertise and data to enable efficient seamless ad buying across the globe. adquick. com. Buy a billboard folks.
3:13:09
Thank you to all of our partners and again our board of directors has reminded us. Yes. In a very forceful way. Oh yes.
3:13:16
That we have to ask you to go leave a review on five stars. Apple podcastify. Do it now. It helps us in some way.
3:13:24
We don't really know how, but the board says the board says demands it.
3:13:28
Our jobs are on the line. Yeah.
3:13:31
Thank you for tuning in, folks.
3:13:31
We got another great show tomorrow. Looking forward to it. Bye. Cheers.