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Three, two, one. You're watching TBPN.

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It It is Wednesday, April 30th, 2025.

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We are live from the Temple of Technology, the fortress of finance, the capital of capital.

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We're here with Zack White from AVC at the Hill and Valley Forum 2025 breaking down.

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We're in the We're in the literal capital, which is great.

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Uh we're normally in the capital of capital.

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Today we're in the capital of America.

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People call this the capital of America. Many people call it. It is. It is.

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Uh we are here with Zach.

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Uh can you introduce yourself? What do you do?

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What do you like to invest in?

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What what's your takeaway from Hillen Valley so far?

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So my name is Zach White.

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I work at a fund called AVC.

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We invest in everything from defense to uh biotech, healthcare.

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I spend a lot of time doing defense stuff. Yep.

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And the Hillen Valley has been a crazy vibe so far. We had Hamas protesters. Oh yeah.

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Uh we've had, you know, a variety of different uh things happening here.

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So, it's it's been great.

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Talk about the difference between this year's Hill and Valley versus the last, you know, couple years.

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Uh, from our understanding, it's been, you know, uh, uh, almost a order of magnitude more people here this year.

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I think there's like 10x people here.

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There's like random influencers here, which is awesome.

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We have people rapping tefl It's an amazing vibe.

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Like, it's it's like Coachella for uh, you know, people with G550s. So, yeah. Yeah.

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I'm sure the tarmacs are absolutely stacked right now.

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Um, uh, who who who, have you listened to any of those speeches yet?

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Is there anyone that you're excited to hear?

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Who do you think is the best like pitch for an actual concrete plan?

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Cuz there's a lot of people that are just like, we want better communication between tech and DC, but then there's other people that come with concrete things. We need to fund this. Yeah.

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I think uh Jensen he was talking about how we need to just be like onshoring all of these like fabs and stuff and you know everybody wants to be in and like in in his crazy around Jensen.

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Um, so, uh, you know, I think that he has like a really good plan on like what we need to do to make sure that we're not relying on China for all this stuff.

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And he, uh, he was doing great.

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And then, um, Brian Shy also, he he killed it at Andre.

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You know, there's, um, there's a lot of stuff that they're doing right now.

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And it's just really exciting to see Arsenal, right?

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Is the most re-industrialized, pled project right now.

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There's like a bunch of generals here and stuff. Yeah.

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And they have the the, you know, an actual factory, not just hype videos, right?

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that's that's coming out.

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Um I I think the it was cool to hear from Jensen personally.

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I mean we we've seen these headlines around Nvidia's investment in the United States and uh our big question historically has been you know how much of that is like really real and it seems like he is you know extremely yeah I have a few questions for Jensen we want to follow up with him is like is he a customer of reindustrialization or is he truly a reindustrializer because Nvidia is an American company.

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American company. I think they bab with TSMC TSMC now investing very heavily in America in Arizona and we could see that go a lot further in which case I don't know why Jensen wouldn't want to buy chips from Arizona TSMC that seems very logical package with Foxcon like he's

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going to be very happy with that but is there something that he can do personally to bring back jobs or create more manufacturing infrastructure in America I don't even know if he has the tools or needs to do that but that was kind of interesting it's interesting how Foxcon is always uh doesn't seem to be in the convers. It's so associated with

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It's so associated with China despite being a Taiwan totally totally totally that they have the same incentive to in next valley we got to get the CEO of Foxcon. Yeah, that'd be sick.

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I mean, I think he just needs to start pushing demand here.

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Like there's so much demand and if he starts reshoring it here, all of a sudden there's going to be a lot of work that people need to do here.

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And I think that that's kind of just like what he was talking about at Hill Valley today.

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So yeah, the the other line that stood out to me, he was like, "Some people there's going to be new job creation.

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some people are going to lose their jobs.

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Uh, and then everybody's job is going to change, right?

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So, it's like, you know, basically embracing that change, I think, is except I don't know if you guys saw the Mark Andre clip this morning.

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Apparently VCs are the only things that stay.

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Yeah, we we've been saying this actually.

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I mean, I I think it's actually it the job of an investor is somewhat uh somewhat in the you know, I would actually compare it to just to come to uh Mark's defense a little bit, I would compare it in some way to the job of a lawyer uh or a doctor where just because a computer can do something well, you still want a human to sort of like sign off on the investment and have responsibility. Yeah.

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because it's just not as satisfying to sort of like fire a uh it's not as satisfying to fire a uh you know a robot as it is to say like you know you you have you had responsibility over this capital you know you know etc etc.

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So the other big question I have is on the robotic side.

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I know you've done some AI investing.

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There's a big question in my mind.

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Obviously we've scaled up on the pre-training side and these massive data centers have been built out.

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XAI famously bought a ton of NVIDIA chips.

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Uh when does that start to happen with robotics companies?

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Because robots are generating a lot of data.

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At a certain point you need to build the big transformer and you need to crunch all that data down.

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And I haven't seen any of the robotics companies are still early and none you know you see Boston dynamics.

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You don't hear about the Boston Dynamics data center.

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You don't hear about the the physical intelligence data center yet, but it feels like it's coming.

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Jensen kind of put it as like a 5year timeline.

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I think anything that we can do to get more sight lines on how that grows is going to be really really key to Nvidia.

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Uh because everyone needs a second act and Nvidia is like the king of the second, third, fourth act.

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It was scientific computing, then gaming, then uh then then AI and robotics.

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I mean after LLMs could be the thing that really drives like massive massive GPU demand. What's your take?

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Uh Brett Adcock might be the guy here, but I I I actually I really think that like you have to be like really talented at fundraising.

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You just need such an insane amount of capital.

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You need tens of billions of dollars to do this well.

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And so it's really going to come down to the people who can actually raise the money very well.

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And that's like a very small handful of people.

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May maybe Adam Newman could do it. Maybe Brett Adcock. I don't know who else.

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But I was kind of I was hoping for a surprise Elon appearance today.

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I don't know if it's uh I don't know if it's happening, but uh he's probably around here somewhere.

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He's probably Yeah, he's probably approximate to where we are right now. We should single pop in. Yeah, that makes sense.

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Um, what what else is top of mind for you uh this week?

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I know uh in many ways you eight has placed so many bets in this sort of broad category that's relevant to where we are today that I I imagine a lot of it's just kind of like you know being a part of this watching it play out.

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Um where where do you where do you uh anything specific you're hoping to learn from today? I don't I don't know.

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I just think that like this was like this weird heretical space for so long and now you see like hundreds of people here all just like sort of reing in the fact that you know it's cool to do this now.

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I I'm just kind of like taking it all in and I don't know Joe uh from our fund has been doing this for so long and he always has this like piffy thing where it's like now this is the cool thing.

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What's the next sort of contrarian thing to do?

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And I don't know it doesn't seem that contrarian anymore which is like really interesting.

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It's you we see people who are doing all sorts of things uh you know 5 years ago that are now here doing defense.

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Is there is there more like practical uh like or like tactics that you can do as a founder in an event like this?

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Maybe not just looking to get a feel for the vibe of DC, but actually understand okay there there are dollars going towards this. We can make this happen.

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We can go after this pool of capital.

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Is this a place where you can learn that?

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Is that is that a reasonable?

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I think this is something that you should have like done some pre-training yourself and learned a little bit about like who are the who are the dealmakers here?

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Who are the people with the pools of money?

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Where are the programs of records?

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like who are the guys here before and walk up to the people that are actually in control of where this money's coming from.

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Well, we got Dave Freeberg coming in for a couple minutes. Thank you, Zack. Nice to see you guys. Congratulations. Great.

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Great to have you on Dave. Welcome to the show.

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Let's hear it for Dave Friedberg.

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We will on a speaker badge.

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We're on a we're on a mission to get every single All-In podcast host on the show. You're the first. How many have you had? You're the first. You're the first. Might be the last. Let's see. Yeah, might be the last. Let's see how it goes. On camera here. Yeah.

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Yeah, we're on camera here, there, there, everywhere. We are live.

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What's your What's your audience like right now, do you think? How many people? Probably a few thousand. Growing. It grows over time.

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The longer we stream, the more people uh flow in. Yeah. Yeah.

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You mean you mean the live stream this very moment? Probably a few thousand. Say in the thousands.

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Uh but now that you're here, it's probably going to 10x, maybe 100x. Go to,20,30. Yeah, be awesome.

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What are you talking about today?

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So, it it's the same topic for everyone.

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America leadership, America strength, China bad, America good. America good. America good.

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Technology reigns supreme. We must win. Yes. So, that is the topic.

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I think my every one of the topics is I think worded a little bit differently, but they all have the same end up in the same spot. The same spot.

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Can you talk a little bit about Oh, and how you interact with the government because it's very different than like what we normally hear with like DoD, I got to get a program of record.

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The government's going to buy my stuff.

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But it does seem like it's important for you to interface with the government in some way.

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What does that look like for you?

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Uh the seed industry has three um regulators.

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It's the USDA, the EPA, and the FDA.

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So, there are regulators, regulatory frameworks and bodies in those agencies.

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and it's a pretty well kind of tried and true, but there's not a lot of procurement.

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You're not servicing the government.

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So, DoD is very different.

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There's a massive industry here that services the government, but like a lot of other industries, agriculture is regulated to some extent. Food is regulated.

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So, there are regulators that we deal with, but we're not building a business, selling it to the government and supporting government action. Are we overregulated? Are we underregulated?

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Everything's overregulated.

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That is a matter of fact.

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I was talking with someone last night who I had dinner with who works in the government about his observations coming in to the government and just how insane it is.

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We were talking about why that is and I think like every organization has a fundamental incentive to grow from a couple of different points.

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You as an individual start out as an individual contributor in a company. Yep.

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Then you get promoted to be a manager.

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Now you're managing two or three people.

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So your career progression ultimately is I want to manage 20 people.

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I want to manage a department. Totally.

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So when you have that incentive model within any organization whether it's a school meaning administrative bureaucracy or a startup or the government there's an incentive for people to want to get more resources.

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So every year everyone says not what can I do less this year everyone says how can I do more this year and the answer is always I need more people I need more budget.

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So the natural flow of any organization, nonprofit, school, government, company over time, get more money, grow, add more people, and ultimately you end up seeing all of these things that don't necessarily map to the mission of the organization, but they're created to meet those incentive models.

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So in the government, we have a lot of regulatory overhead.

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Like the guy I was talking with, he's like, I cannot believe the regulatory processes that we've created for no reason.

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Just stuff that came out of the blue. Yeah.

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So, this is true in energy, it's true in agriculture, it's true in um uh uh drug testing, it's true in so many different markets that I think it's um you know, it's starting to become apparent to a lot of these outsiders who are now stepping into the government that there's an opportunity.

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Now, last year the the the important point that there was a a Supreme Court case where they struck down what's called the Chevron doctrine.

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And the Chevron doctrine basically vested authority to the agencies to regulate their industry however they see fit.

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Meaning the courts always said hey whatever the agency says is the way we need to regulate.

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We're going to rely on that.

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And that was the Chevron case from years ago.

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And what they ended up saying is like no that's actually not true.

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That agency does not have legal authority to just regulate everything however they want.

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They have to have a law passed.

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Congress has to pass a law that says these are the regulations that need to be enforced.

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agency attempts and it's going to go to court of attempts to unwind and deregulate and as they do that they're going to cut people.

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They're going to change the rules.

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That's going to lead to people people that are regulatory capture people saying, "Hey, wait, those regulations are awesome.

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We need them or we got to keep them in place."

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And then that's all going to get adjudicated and hopefully that Supreme Court uh decision is referenced and holds up as this goes forward.

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So I think deregulation is a big theme.

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It's going to take a while.

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It's going to take a while to work through the courts sort of like all the Doge actions.

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They're all going to go to court.

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They're going to take and you believe that's some that's a trend that we can see carry out across admins.

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You think it's a decade plus long trend or is it going to be sort of oscillating back and forth?

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I think it is the I think what happens is it's such a sharp tack right now. Yeah.

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My personal belief is that the response to this is a sharp tack towards more socialism, bigger government, more more kind of principles of everyone working for and living off the government.

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And I think that um that what we're going to end up seeing in this midterm cycle is candidates and policy proposals that look like they're diametrically opposed because that's how you're going to get elected cuz people are going to be pissed off about how quick these changes were, how quick these actions were, how bad they're going.

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So the story line will be let's do the opposite.

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Let's put everyone back in. Let's spend more money.

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Let's do blah blah blah blah.

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And so I worry a lot that this is actually going to be now a flip-flop back the other way.

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So many people are going to decide. Yeah.

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There's so many people in Washington today that have lost their jobs in the last 3 months.

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And I don't think they're going anywhere, right?

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They're just sort of like, you know, circling around in in many ways and and want to find Have you seen all the homes listed on Zillow and it's crazy.

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there's like a million homes, the prices are down like 30%.

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Uh there's a lot of talk, especially with the Maha movement of like comparisons to Europe, comparisons to Japan.

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Uh on the agriculture side, are there any other countries that you look to as examples for what America should be doing or are we already kind of like the the least bad regulatory regime for agriculture?

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Um so there's a couple of aspects to that.

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One is the ingredient supply chain and food where a lot of stuff is being addressed and talked about and there's issues there and that's independent I would say of agriculture.

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So there's a lot of technology and innovation happening and needs to happen in agriculture to grow things more efficiently.

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Um that's a lot that's the work we do at Ohio for example and we have these incredible tools that didn't exist using AI to make predictions and uh take actions in the field and so on and so forth.

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So the US today is the most advanced agriculture technology adopted market, but we're still very far behind its potential and when it comes to food supply chain.

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Yeah, that's that's where things are. So great.

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I'm going to go on stage. We'll see you guys. Perfect. We'll talk to you soon. Bye guys. Thanks for coming by.

15:08

Enjoy your uh enjoy your talk. Is Keith out there? Yeah. Yeah. Jacob can come on. We'd love to have you. How are you?

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Jacob, you got five minutes? You got five minutes? Sit down.

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We're here with the man himself. The man himself.

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the man who organized Hill and Valley uh and has championed it and grown it by a thousandx I think.

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Uh it's it's been fantastic to watch. Last year I was here.

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I was able to find a seat.

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Now it's standing room only.

15:32

Uh what what has it been like growing this?

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What what uh can you give us kind of the the the the general overview of what the mission and goals are for Hillen Valley?

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So the Hillen Valley was always designed to be a bipartisan bicostal alliance between technologists and policy makers on the basic premise that builders and policy makers are both in the business of building the future.

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They just use different tools to do it.

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Builders use the laws of science and nature and policy makers use the laws of man.

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And ultimately it was very clear through conversations with Dian and Christian that there was a huge amount of distrust between Silicon Valley and Capitol Hill.

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But also there was this cliche that had uh taken hold on Capitol Hill that our best and brightest people were focused on advertising technology not building paradigm shifting um uh technologies.

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And so ultimately it was clear that you know from the vantage point of the tech industry we actually as a country do have a really deep ecosystem of builders working to solve really hard problems.

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And so we thought it was incredibly important to actually bring them to Washington, give them the attention that they need so that policy makers actually knew this existed but also thought of them as a toolkit to solve some of our hardest national problems. That's great.

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Uh how does it feel being here today?

16:54

I uh everybody senses that uh you guys 10x year-over-year.

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Is it does it feel that way?

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And I and I know there's like significantly more demand.

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I heard a rumor about the waiting list being, you know, well well beyond probably even like the actual people here. Yeah.

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What does Hill Valley turn into over time? Yeah, that's it.

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into over time? Yeah, that's it. It's really interesting because in a way I think the success of the Hill and Valley Forum actually reflects a lot of the the Peter Tealisms about you know high growth startups where at first you know

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it's it's um an invention that you can't really give a name to because if you're really going from zero to one it's something that by definition doesn't really exist and then you start out with something that it's a small community that's really hyped up about it. Um, and

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Um, and all of those principles have actually applied to the Hilton Valley Forum.

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I mean, we started out and it was kind of this opaque dinner that was totally behind closed doors and we were initially planning four tables of 10 people.

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It ended up being 100 people and it just the growth has actually been exponential.

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Now you have random live streamers here and you know you've made it when you draw the pro Hamas crowd. So, yeah, totally.

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Next year the goal is Code Pink.

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I'm surprised they got in. This was remarkable.

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impersonated press badges.

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So, impersonating a journalist.

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Well, we we impersonate some in some way.

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We do our best journalist impression.

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Uh I know you're waiting for confirmation, so you can't talk about much else.

18:24

Is there anything else that uh folks should be aware of or uh take away from Hill Valley uh other than um I I guess in terms of like what the audience is getting out of this uh are do you have any advice for founders who are in attendance, anyone who's watching online?

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um what is the best way to engage?

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I think it's really inspiring to see so many bright talented people actually make the effort of flying across the country to come here and show up.

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You know, they say there's the old saying that so much about life is about showing up, especially in politics. Yeah, totally.

18:57

And the fact that people actually spent the money, took the time to come here and engage in these policy conversations really does make an impact.

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And there isn't a single year where we've had the Hill and Valley forum where there hasn't been legislation that's actually come out as a direct result of people's having conversations here.

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So, it's gratifying to see people show up, but it's also really inspiring to see people talking about re-industrialization this year.

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This has been the plague of our country is that we de-industrialized 20 years ago and it's inspiring to see so many bright people working hard to reverse that. Yeah. Cool.

19:35

Well, we'll let you get back to it.

19:37

I'm sure you have a million more panels to host and come back on the stream anytime, but we'd love to have you back. Thanks for having us.

19:43

Look forward to doing this again. Fantastic. Cheers. Cheers. Thanks for doing this. Yeah. You want to do this now?

19:48

Zach, can you come in in 15?

19:48

Are you good in 15 from now? Okay. 10 minutes. Yeah.

19:55

Let's do 10 with Keith and then 10 with 10 with Keith and then we'll have you on. Is that great? Yeah. Keith, come on. Sweet. Welcome. Hey, how are you? What's going on? I love this live studio. Yes. Yes. Yes. Uh we are live.

20:05

Um but uh we're very fortunate to be graced by someone who's not going for confirmation.

20:09

Maybe can give us a little more hot takes, you know. Oh yeah, I can see.

20:11

First question, uh do we need a department of government efficiency for confirmation hearings?

20:17

They seem like they're going slow. Absolutely.

20:18

Um you know, I think this should be simplified at some point, which is basically the president should nominate you for the constitution and and the senate should provide advice and consent and we don't need too many other steps in the process.

20:30

But that said, um you know there's lots of room improvements in the government.

20:35

First saving money is probably more important. Yeah.

20:38

Making it more attractive for talented people as we talked about um to serve and do setting a good example for this is being a magnet for talent.

20:44

So the best people in America want to improve society through the government would be great.

20:50

Those are much more fundamental.

20:51

So there's details that can be improved at the margin, but I wouldn't confuse the details with the strategy. Yeah.

20:56

Are you doing more uh investing in companies that touch the government now?

21:01

Because the this feels like Hillen Valley is like the floodgates are open.

21:05

Uh DC is kind of open for business in some ways willing to do business with startups.

21:10

We've seen success with the big defense tech companies, but now we're seeing energy and agriculture and a lot of uh kind of like hard tech companies or hard tech adjacent just Yeah.

21:19

adjacent just Yeah. I mean the big issue is it feels you know being here nothing about investing in these categories feels contrarian anymore it was for a long time well if you look at like the hot sectors AI still is the most you know there's some founders here I would say and defense tech is the second and

21:38

so I think that that is a structural problem I don't think I agree more with Delian um's comments about there's not going to be many successful defense companies I think the one thing that is a positive change and is structural and you know uh can improve the odds of success for many founders and entrepreneurs is moving into federal revenue earlier than usual. So many companies have

21:57

So many companies have historically had a federal revenue arm.

22:02

They may not talk about as much publicly for a variety of reasons but usually that comes after significant commercial success.

22:07

You might see the sequencing change.

22:09

I mean the government runs on Microsoft scale.

22:11

Microsoft scale.ai had federal revenue has federal revenue that's meaning VA significant federal revenue early in the trajectory so that may be more normal and more common but I don't think government only revenue is going to lead to a lot of successful companies except for very very small

22:29

sliver so we as a fund are not really investing very actively in government oriented solutions we do have I just did make a defenseoriented technology investment but that's like an outlier but we have lots of lots of companies that have meaningful federal revenue and continue to scale. And this feels like a

22:46

And this feels like a category.

22:48

Last time we had you on the show or maybe it was the first time you talked about how most like a lot of people just shouldn't be like, "Oh, I want to be a founder.

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I'm going to start a company."

22:55

They should go work for a great company.

22:57

And if you're trying to uh if you're excited about spaces that are going to require federal funding early, you probably shouldn't start that right, you know, when you're 20 years old maybe, unless you're, you know, truly well, you need to understand the sales process in the federal government, which is different than a sales process in a commercial environment.

23:13

And there's probably a limited scare there's probably more scarcity on quality salespeople that can sell successfully to the federal government. Yeah.

23:21

And maybe there's 40 of them.

23:23

And so unless you have an angle to be able to attract one of those 40.

23:30

So do you have a better product that the sales people think, "Oh my god, I can sell this."

23:34

Like the best way to attract sales people is make their life easy.

23:37

I've got something cool differentiated and I know the buyer.

23:40

Second, you have a missionary zeal that's off the charts. Yeah.

23:42

that's off the charts. Yeah. um without without the ability to attract one of the top 40 people who can sell into let's say defenseoriented stuff threeletter agency stuff I think it's really dangerous um so I think that's more critical sometimes than the technical breakthrough um you know the government is decades

24:00

behind as talking about like you know Oracle started serving CIA and NSA there are examples like that but there's very few and so you know one every decade so that seems to me to be a bad strategy Y unless you have a reason to believe you're the once every decade, you know, company and that should be part of your initial seed deck. Yeah. Uh talk about Yeah.

24:19

Uh talk about what you're talking about today.

24:22

You're you're doing a talk with Eric Lyman, correct?

24:25

Yeah, we just finished uh Eric and I were on stage with Senator Erns from uh Iowa.

24:29

um talking about how we can make the federal government's expenses, you know, more streamlined using programmatic expense reporting like like that RAM offers commercial sector.

24:40

Commercial products, commercial customers of ramp save between 5 and 15% on expenses and the federal government probably would be able to save more. So there's four 4.

24:49

5 million card holders in the federal government.

24:51

There's only 2 something million employees.

24:54

So there's clearly a lot of waste, fraud, and abuse.

24:57

Um the senator cited a bunch of examples of 80,000 charges on federal credit cards at casinos.

25:04

Clearly most of those 80,000 charges are not doing official business on behalf of the federal government.

25:10

So hopefully you know that's an easy savings.

25:13

It doesn't require cutting programs that people care about.

25:16

Doesn't require this big controversial debate.

25:18

But every dollar we save goes back to the American family and they can spend it on raising a family successfully.

25:23

Secondly, if we can cut 1% from the federal good budget, just 1%, the Federal Reserve can lower interest rates by 1% safely and allow people to afford mortgages, allow the economy to grow without triggering inflation.

25:37

So, it's a very big deal to save 1 or 2%.

25:39

I think a lot of people miss that. Yeah.

25:40

Do you have any good uh stories from uh visits to Washington during the PayPal days?

25:45

Was it It was different time. It was different.

25:46

I was actually just mentioning um I don't know if I'd been back in the capital before today since 2003. Wow.

25:52

Um when I was lobbying, that means we're officially back. America is back.

25:57

Um but yeah, like we we spent a lot of time and energy.

26:00

I spent a lot of personal time and energy um uh using the federal government uh to help protect payball from a lot of people that didn't like us on Mastercard, eBay, and then later the Treasury Department post 911, the Treasury Department wanted to issue these rags that would have imposed significant burdens on consumers and small businesses.

26:20

And we were able uh using a lot of uh connections on the hill and messaging about not interfering with e-commerce uh to put put a lot of pressure back on the Treasury to to draft much more reasonable regulations.

26:35

They really wanted everybody to put in their social security number on every like every transaction which is you know crazy intense. Last question.

26:40

Jensen was saying SF is back because of AI. What's your take? Well, he stole my line.

26:45

Yeah, I mentioned that I my my version of the line was slight slightly narrower but you obviously can expand it.

26:51

Mine was open AI saved SF without open AI success SF would be dead and still dying.

26:57

Um you get another power law company and that drives a ton of it does and you know the people who are favorable to SF would say oh that well that happens every 10 or 20 years like the internet saved SF too.

27:10

You know, when I graduated Stanford before the internet, um SF was like a a 12th to 15th ranked city in the United States.

27:17

Nobody there was no business going on.

27:18

Oakland was actually a better commercial city at the time.

27:20

The only people who stayed in SF to work at like Bane or BCG were like for lifestyle reasons. It was a dead city.

27:26

Then the internet revolution happened and although a lot of the best internet companies and best technology companies were in Palo Alto and Mountain View and Sunny there was enough spill over at SF to sort of save the city.

27:38

It was just cheaper in some ways, right? Yep. No.

27:42

And well cheaper and you need large floor plan like floor plan off uh floor floorprint uh offices like uh and those those didn't exist in the city.

27:50

The city's culture was never really never great for building companies.

27:54

Like when we considered moving the PayPal office to SF in 2001, Peter asked this question, Peter Tale asked this question of name a successful SF company and the largest SF company at the time was like CNC or something incredibly mediocre.

28:06

So we didn't we stay we moved to Mountain View. Interesting. Wow.

28:10

Well, thanks so much for joining.

28:12

This was fantastic day and we'll see you out.

28:15

Enjoy the rest of the conference.

28:16

Uh Ben, do we need to shift Thank you.

28:19

Uh do we need to shift the microphone a little bit?

28:21

Have Zach maybe sit at the end of the table? point towards us.

28:24

Okay, we're gonna shoot around. Yeah. Um, but come on in. Welcome. Uh, repeat guest.

28:29

Yeah, we're gonna go right here so that you're kind of aiming at us right here.

28:33

So, just kind of sit right here. Thank you.

28:36

Lean into the mic as much as possible. Look at this. Doing your own AV setup.

28:40

Yeah, we got two of the best in the business here.

28:45

But, uh, you know, it helps when everyone's an individual contributor when you're running a startup, right? Totally.

28:51

I've got to say this getting into this room is the hottest ticket here.

28:53

the line at your door is just like impressive person after impressive person. All right.

28:57

Were you were you an early uh like an individual contributor in the early days at who else would do the work? Yeah. Exactly. Exactly.

29:05

Um so fintech remember fintech like wasn't always you know one of the hottest categories.

29:10

The first like four years of the business were me telling VCs hey financial services we could innovate here like this might be a thing.

29:17

2016 someone came up with the word fintech and then it finally caught on.

29:21

Crazy story from uh Keith.

29:21

you wouldn't have heard, but he said the last time he was in the capital building was in 2003 fighting for PayPal's life. Oh my goodness.

29:29

Cuz after 911, there was like a lot of regulation being pushed. Yeah.

29:33

Uh but speaking of uh uh financial regulation is like everyone here is obviously, you know, super aware of what's going on with the DoD.

29:41

There's a lot of DoD budgets and every defense tech company's looking for their next program of record or SBI.

29:46

Uh what is the mood uh in Washington around financial regulations?

29:53

Are there is there low hanging fruit meme that everyone talks about if are people talking about it enough? It's a good question.

29:58

Um right now there's probably three things that are top of mind for everybody.

30:02

Um first is the Genius Act which is the crypto stable coin regulation.

30:07

Um that is as far as I can tell moving though I don't know the the day-to-day details of that one.

30:13

Um second is uh there's section 1033 of DoddFrank.

30:16

This is the open banking regulation that was put into in it's put into place under the last administration.

30:21

Um this administration we'll we'll see what happens but there's some talk of making a few modifications to it before it before it fully goes live.

30:30

Um and then the third big thing is the conversation somewhat kicked off by Doge somewhat not about payments modernization.

30:37

So, can we move the the payment system of the US to not send out paper checks to everybody in all these places with old addresses and so on and so forth and actually make it a little more modern.

30:47

So, do you have any type of estimate of of how of how many of those paper checks just never ever even get, you know, have basically been paid but just sort of sit in the Well, they don't get cash.

30:56

That's that's money back in the taxpayer.

30:58

Maybe we don't want to move off paper.

31:00

Maybe this is free money for the taxpayer.

31:02

You got to keep in mind the cost in the system.

31:04

So you have people that are writing the check to you, people that are mailing the checks.

31:09

It probably costs, you know, $5 to $10 to send out the check to each person.

31:13

Then you get it, you bring it to the bank, it cost the bank $5 or $10 to actually cash the check.

31:15

So getting that out of the system would be a net worth thing.

31:18

Plus getting people payments a little faster is not a bad thing. Totally.

31:21

Talk about the difference in your experience, you know, this week versus maybe your first trip to DC for for Plaid. For Plaid ever. Oh my gosh.

31:30

What was your first trip ever?

31:30

I I think it's must have been seven years since since since since the first trip here.

31:35

Um you know, we were we were lucky.

31:35

We hired um our first head of business development had worked in the previous administration.

31:40

At some point she said, "Hey, Zack, we we should go to DC and meet some people and talk about it."

31:43

You know, there's there's some things that are relevant to Plaid.

31:45

We known that this open banking rule was going to come eventually.

31:48

And uh so so even seven years ago, you were thinking about this new open banking. Oh yeah.

31:52

I mean the concept of plat has always to been to to kind of build open banking for the world to build infrastructure that enables people to um link their bank accounts really easily.

32:01

We've of course created a ton of stuff on top of the network that came from that later.

32:04

Um but we knew that this regulation was a thing that would be written at some point.

32:08

Um so we started spending time here.

32:10

We hired a policy team uh in DC.

32:11

I think we probably still have four or five people that are just based in DC full-time.

32:14

Um and right now just the conversation is totally different.

32:20

the the the size of this conference, the number of people that are here, um the number of other tech CEOs that I'm seeing in DC, even just casually, the I was here about a month ago and was walking into a building and out of the building was was walking a kind of big public company CEO.

32:36

So like say hello and it's like that runin would not have happened seven or eight years ago.

32:40

Um so it is kind of a testament to in some sense Silicon Valley for people being willing to come out here and have these conversations.

32:47

um in a big sense is a testament to to to the administration and to a lot of the people that have put together forums like this uh to bring uh to bring the two sides together.

32:55

So, it's been an awesome event so far. That's awesome.

32:58

Well, you got to get to your next panel. I think I do. Yes.

33:00

Well, it's been great having you stop. See you.

33:01

We'll we'll see you out on the floor later. Yeah. See you soon. Uh let's bring in Zach. You want to come on? Who else is out there? Welcome to the stream. Let's play this song.

33:14

Let's play Let's play a sound effect to let everyone know.

33:16

Sound effect, a song like I'm on radio.

33:18

Scoot in as much as possible.

33:22

We want to get your mouth right up close to that. All right.

33:25

You have me all the way on. There we go.

33:27

Thanks for having me, guys. Yeah.

33:29

Can you introduce yourself?

33:29

By the way, I just got to say you look very comfortable in a suit. Thank you.

33:31

That's a horrible insult, but I appreciate it nonetheless.

33:35

I'm not calling you a suit.

33:36

I'm just saying I appreciate it.

33:36

Looks like they haven't put it on in a long time. That's what was saying.

33:39

Well, minitus on the on the stream yesterday was saying, you know, it's Hill and Valley when you can't when you don't need to put in new business cards cuz they're still in there from the last Hill Valley. That's the standard.

33:48

I will say when I first moved to DC, I'm a lobbyist.

33:52

Short version is I'm a lobbyist.

33:54

I was a venture capitalist for a long time, General Catalyst, Emergence Capital before that. I work here now.

33:57

I lead the tech and venture capital practice of a lobbying firm, but I also hang out at a think tank called FAI, the Foundation on American Innovation, where I'm a senior fellow, too.

34:07

That's the short version. Yeah. Yeah. Yeah.

34:08

The long version it is a suit. I am a suit.

34:12

I wear a suit now all the time.

34:12

I have ties a technology brother.

34:14

I am at my heart a technology brother.

34:17

This feels like a safe space for suits to be honest.

34:21

This feels like you guys rock a good suit. We wear suits every day.

34:23

You guys brought back suits.

34:24

Actually, on the lobbying front, uh, you know, Lulu's talked about going direct in the comm's world.

34:30

Uh, going to an event like Hillen Valley feels like going direct for lobbying. I agree fully.

34:35

talk about the the compliments or substitutes of founder lobbying essentially.

34:40

Well, the best founders are the ones who are building the relationships themselves.

34:44

I mean, the truth is, by the way, I guess I'm talking myself out of a job in some ways, but the truth is if you outsource, if you are building in a space that is key to regulatory work and you outsource your regulatory relationships, your government relationships to somebody else, you're not doing your job.

34:58

I mean, think about it this way.

35:00

If you're raising money, you wouldn't hire a banker if you're if you're good.

35:04

Frankly, you wouldn't hire a banker to go out and organize your fundra for you, right?

35:07

But if you come to DC and your attitude is great, I'll have my lobbyist do everything.

35:11

I don't need to go meet these people. That's a problem.

35:12

And in fact, the biggest people, you guys had Blake on the show from uh Boom. Has he been on the days? Yeah.

35:22

Yeah, he's somewhere somewhere back there.

35:23

But Blake's done a great job of this, right?

35:25

He came in here five, seven years ago.

35:26

The idea of supersonic flight was totally outside the Overton window, but he's done such a good job getting into the DC establishment.

35:35

And I actually say that as a compliment, not insult.

35:36

So, to put this all invention, uh, the job of a lobbyist is to make great intros, much like a VC does, and then back channel. That's exactly right.

35:46

It's like a part shrink, part A Ari Emanuel, right?

35:47

You sort of do the like you're a little bit of an agent selling somebody downstream.

35:54

You're a little bit of a shrink cuz they complain bitterly about government.

35:55

they have every reason to do so.

35:57

So you hear all that out too.

35:58

And then your job is to help actually in some ways I think about it as you are teaching people in government who don't know about what you do.

36:06

You're an educator to them because it's not that they don't care or they don't have any whatever.

36:10

It's you're just not high enough in the priority stack and they don't have the background to understand it.

36:14

I mean I I met a congressman a couple years ago who was like thanks for telling me about android. Yeah. Exactly.

36:19

talking about know about that company, but it's like how do you feel is the average is part of the uh the best lobbyists are are selective on on who they work with because you're not going to be you're not going to be successful if you're if if it's not a solid underlying sort of company.

36:37

Uh how much are politicians reading into who a company is working with on the lobbying front in terms of understanding the quality of the underlying sort of like you know potential?

36:48

It's a really good question.

36:49

the best lobbyists are tremendously demand constrained, right?

36:51

So, so you're sorry, supply constraint, which I mean like an infinite amount of people more who want to work with those lobbyists and they have room to work with.

36:58

The compliment that I love to get is when somebody says to us, hey, you don't feel like other lobbyists because when you actually you come in and you bring the client with you, we actually have a real relationship with them at the end of the day and it's not just, oh, I've come in and I've done my briefing book and I've given you your onepager and so on and so forth.

37:14

So there is a step in from a tour. You're totally correct.

37:15

And because the lobbyists who are smart, proactively think about organizing the opportunity, right?

37:21

Like I had dinner with two members.

37:22

They came to be they're like great.

37:23

I would love to meet folks from the valley.

37:25

I don't know anybody in tech.

37:26

Is there is there a holy trinity of lobbying firms?

37:28

You know, we we talk about McKenzie, Bane, BCG, we talk about Goldman, Morgan Stanley, we talk about Sequoia, Andre, Founders Fund, you know, a Trinity, it's more of a single firm and it's mine obviously. Yeah.

37:42

There's not really much of a long you have a coupon code we can share. Yeah, you can put 50. Yeah, exactly. We want our cut.

37:48

Give us 10% of the ongoing revenue. 10% of ongoing revenue.

37:54

I mean, uh Athletic Greens does that all day long.

37:56

Athletic Greens does that.

37:57

What's the average order size of Athletic Greens?

37:59

Cuz I bet you it's a little lower than a lobbying.

38:01

No, but that's that's the media of the Athletic Greens deal.

38:04

You use the coupon code and you get paid every month.

38:06

That's a nice plug by the way. That was very well done. Very very oriented.

38:08

Uh do you guys have specific sectors that you're you're most oriented around or or things that you avoid?

38:16

We uh we do a lot of tech and science.

38:18

So as a firm we do a lot of tech and science.

38:20

I lead the tech component of what we do.

38:21

We uh avoid things that don't feel values aligned.

38:26

So there are some folks in the world who are doing interesting work, compelling work.

38:30

Gambling, yeah, sin, vice are probably outside of the scope for us a little bit.

38:35

Anything with a foreign government is outside of the scope for us a little bit.

38:38

But when it comes to things that are around American dominance, around American dynamism, around global resilience, when America comes first, that's the sort of stuff we focus on.

38:46

But lobbying is pretty fragmented.

38:47

The truth is it's not a great comp for the Bane Mackenzie BCG.

38:51

Because there's a huge like anybody, any schmo who has one rich friend can say, "I'm a lobbyist now, right?"

38:56

Cuz they can get one contract and put up a shingle and say, "Okay, great.

38:59

I'm going to service this one person."

39:01

It's hard to have great 50, 100, 200 clients and do that at a really high caliber.

39:05

How damaging can the wrong lobbyist be?

39:07

I imagine it can kill your company. Yeah. Yeah.

39:10

Well, they're they're your representative.

39:11

Like, you shouldn't work with somebody if you don't feel comfortable with them telling your story when you're not around cuz part of the gig is when you guys go back to SF or you go back to LA. I'm still out there. Correct.

39:23

Talking you up all over town. That's right. That's right. We're in the market. So, yeah. Give me a call, guys.

39:28

We're trying to We're trying to put really really harsh bans ideally, but maybe tariffs on foreign podcasts. Yeah. I think that's great.

39:34

And we want significant subsidies for Americanmade podcast.

39:39

You guys should be getting a tax break. That's the real tax.

39:41

We actually want it to cost a million dollars a year to host a podcast.

39:45

Just via barriers to a license. It's very dangerous.

39:50

You guys are familiar with the taxi medallion system.

39:52

Very similar idea for podcasts.

39:54

Very, very similar podcast.

39:57

Let's play them off with the with the sound.

39:59

Thanks for having me, boys. I appreciate it.

40:01

Thank you for coming on the show. Thank you for having me. This has been great. Um, have fun.

40:06

Would you mind grabbing Mike Salana?

40:06

I think he's right out there if he's if he can.

40:09

Great having you on, Zach.

40:09

The soundboard is a working production.

40:11

We are actively looping the short.

40:13

Um, but hopefully No, no, no.

40:18

Mike Salon is coming into the street.

40:21

Welcome to the studio, the Temple of Technology. Bless the sound. We are live. We are live. What's up, guys?

40:33

Thank you so much for coming on the show.

40:34

Uh great to great to have you on.

40:37

Uh what's been your reaction?

40:39

What what and and also I'd love to know like I know you're writing a piece.

40:40

Uh I'm sure it's churning in your head, but like what is the what is the angle?

40:44

What is the interesting thread to pull on here?

40:48

I mean I don't know if I'm supposed to say this. Yeah.

40:51

The thing that I thought was the funniest was getting out of Union Station, the first thing I see are a bunch of sort of failed bureaucrats and shirts that say federal workers matter. Oh no.

41:01

Um, it's just the overall sort of circus vibe of of uh of DC I think is funny.

41:05

Um, and then I'm paging through the Washington Post this morning.

41:10

It's just like horrifying headline after horrifying headline and DC and they're talking about DC.

41:15

They're like people things are tense.

41:17

People are losing their minds. No one is at ease.

41:19

And it's just like I'm in this beautiful hotel overlooking the White House and there are all these people going to work.

41:24

They're they're drinking coffee. People are happy.

41:26

I don't know what they're talking.

41:27

I don't like what you're reading is not what I'm experiencing in DC.

41:29

Every time I'm here, I'm just like, did I actually move home?

41:33

Well, well, it's a momentum thing.

41:33

The people at this event feel like they have real momentum and opportunity right now.

41:38

And then if you just lost the job you had for 20 years, then obviously they're not they're feeling and you know, they're not accelerating, right?

41:43

I don't know, but I was I don't I hate to be Tom Freeman about it, but I was in a car today and the driver was like, "Things change here.

41:50

These people have to We're looking at these protesters who are outside and he's like, "They got to get over it."

41:54

Yeah, they got to get over it. That's what DC is.

41:56

I mean, we were reflecting on this with the tariffs.

41:59

Like there's all these crazy headlines about like the global economy is destroyed and yet like the stock market's kind of flat this year.

42:04

You know, it's not really like level down 30%. We'll see.

42:07

We'll see what happens with the earnings predicting a recession. 70% chance.

42:11

But even then, we had a recession a couple years ago. It was very mild.

42:15

Like we seem to be better than ever at just maintaining the status quo.

42:19

Like America is somewhat lindy in this case. Yeah.

42:21

You just got to decide what you want to do and work on that.

42:24

And you can't truly The reason I brought up the noise was because Also with those federal workers, they were just standing there.

42:30

But then Jack Posich gets out there and starts a fight with them and everyone's like DC's in chaos.

42:36

And I thought it's not that bad.

42:38

It's like it's a lot of theater. Everything's fine.

42:39

You got to just ignore the noise and focus on your own And that's what I'm trying to do.

42:46

It just so happens that the that I focus on is noise.

42:48

That's my art that's running at the noise. The noise is my signal. The noise is my muse. That's hilarious.

42:55

Is there a good metaphor for DC?

42:56

Is it like, you know, lunchroom tables in middle school or something?

43:01

Like I feel like it's very clicky.

43:01

Maybe even clickier than uh than San Francisco Tech. I don't know.

43:05

I'm trying to understand what's the mindset of I think it's a little more sociopathic than that.

43:10

I think it's sort of like all the people care about here is power and they're willing to happily head over to the other table if they're in power, generally speaking.

43:18

And then you have you have the exceptions, but mostly industry town.

43:23

This is why I felt like kind of out of my element in DC because in tech there's still a lot of like power games, there's a lot of status games and you can be like a famous founder, but at the same time there is the concept of locking in and actually going and building something.

43:36

But in DC, there's nothing really to build.

43:38

Like there's no like, oh yeah, this person was heads down for 6 years and then produced like a beautiful piece of legislation.

43:44

Like that's not how it works.

43:46

Make stuff happen and sometimes that means a lot of dinners. Exactly. Yeah.

43:50

Anyway, uh can you talk about uh kind of your uh I mean obviously you've been in Silicon Valley forever.

43:55

Uh uh how has uh just the mood around Silicon Valley and Washington changed over your career.

44:02

Uh what was it like when you first got to Silicon Valley and how has it changed like Yeah, maybe talk about your first trip to DC too.

44:08

Yeah, that'd be interesting to hear ever in the context of work or or in the context of work and tech.

44:13

Um well, the first my first work trip to DC would have been I wasn't in DC ever.

44:19

We didn't do things here.

44:20

The first time I came out was for Pirate Wires. Oh, no way.

44:22

Because I was invited out by a congressman and I realized that or maybe it was comfortably smug.

44:28

That might have been the first time out.

44:29

Um, effectively and I realized there were all these people here who were reading Pirate Wires because they were interested in tech.

44:36

They were interested in like the sort of tech Yeah.

44:37

center, right, maybe perspective or let's say heterodox perspective within tech.

44:42

And um it's very different than what it was what 14 years ago.

44:47

No one thought about government at all.

44:48

In fact, it was considered like not I don't know a red flag if you cared about government.

44:52

Um and then like a distraction.

44:55

The businesses changed and now you know the most exciting businesses a lot of them are working with the government and you have to understand how it works and so there's a lot of excitement here and also in Silicon Valley. Yeah.

45:05

I always think that that's like an underrated thing.

45:09

I mean, a lot of people in uh in tech kind of criticize media, tech media when they start talking about politics or whatever, but I think that's like incredibly valuable because it's very hard for DC to get the tech perspective if they're if it's not from us, it's from, you know, somebody else. Yeah. Carisher, right?

45:26

Uh are you do you have that in the back of your mind when you're writing in terms of like the avatars that you're writing for, the messages that you want to send, or is it just like you're just going to write and they're going to read?

45:36

I just get on the page and yeah, just let it rip.

45:40

Like spit out what I'm thinking. That's great.

45:44

And uh and I hope it resonates.

45:47

Oh, it certainly has been. Yeah. Yeah.

45:49

Uh so so I mean uh coming out of this, are there are are you trying to interview the politicians and get their perspective and kind of bring that back to Silicon Valley because Well, I'm here with uh one of my uh colleagues, Blake Dodge.

46:00

Blake, who's a new writer at PWires.

46:02

So she's doing a bunch of interviews right now and kind of soothing around.

46:05

she said gathering facts for our take down no um peace incoming. Yeah.

46:09

No, so she's just uh she's exploring now and um we'll probably you know collaborate on something but the interesting thing is it does feel like this is my experience but uh it does feel like it's hill and valley but there's not a ton not as much overlap maybe as you would you would like. Right.

46:28

There's like a lot of people from the valley, a lot of people from the hill and like technically we're in the same space, but like it's like tech people.

46:35

I mean, I just don't think they know how to talk to each other.

46:37

Like I I think I even myself and I know that I know better, but I showed up today without a suit and I rolled up.

46:41

I I didn't I don't I haven't been following the facts at all.

46:45

I didn't even know where I was go.

46:46

I did not know I was going to the capital building.

46:47

I just have gotten used to just looking at my calendar and doing things.

46:50

So, I got here and I was like, "Oh, no. I I cannot be that guy." So, I head back.

46:54

But I that's a cultural vibe, you know?

46:56

I've never had to wear a suit in in San Francisco.

47:01

I didn't even own a suit until a few years ago.

47:03

Um or I think I had one for our LP meeting, but like that that it's that's it.

47:06

So, and today you're wearing Fantino label.

47:08

Is that guy good friend of the show? Yeah, we love him. A true craftsman. He is. He is.

47:16

Uh were you surprised at how much uh press was allowed to to come today? Oh, yeah.

47:21

We went to the press briefing yesterday. We saw your name tag. Too big.

47:24

We were sitting there looking around.

47:27

and we were like we are the fish out of water here. Yeah. Uh I don't think so.

47:32

I think that journalists are looking for things to write about and there are a lot of people here that my question was more like obviously they would like to be here just because like there's so many ways that you could spin what's going on.

47:43

I was just surprised that uh Delian instead of saying hey no. Yeah.

47:47

I think that broadly text relationship with the media is very different than it was 5 years ago.

47:56

The war is over and there are actually plenty of writers um who are not unfair.

48:02

Like even New York Teddy Schifer writers about there like that's a guy who's just reporting on wealth and he reports what he sees in both directions.

48:10

And I think that there are people who have integrity now.

48:11

I think it's just the the environment is different and you're going to they're going to be hit pieces, but you have to just read people's work and see who they are and what and and what kind of, you know, interview they run and then make a make an educated Yeah. guest.

48:24

Every once in a while, Teddy shows up with the with the telephoto lens and goes TMZ mode outside of a party, but, you know, for most of the time, he's just writing, you know, good writeups. It's good.

48:34

Are you uh obviously, you know, manufacturing, re-industrialization, defense tech are sort of like dominating the narrative here.

48:44

here. Is there anybody that that is kind of flying under the radar that you're or or any like industries specifically that you're that you're I feel like you've written a lot about like the sperm racing stuff and some of the like the zer stuff is where is the sperm race representation infuriating exactly yeah

49:00

we do we need subsidy or do we need a tax on foreign no I think I was having a conversation yesterday and what's actually interesting is they've really expanded beyond tech defense tech it's energy there's much broader there's a much broader interest in the technology industry now, which is pretty cool. People are open. Who was it? Oh, it was People are open. Who was it?

49:16

Oh, it was Delian who was talking to me about how uh uh senators and congressmen were just really excited to even talk, you know, to ramp or something, which a few years ago was just not on their radar. Totally. Yeah.

49:27

Keith was saying there's about four times more federal corporate cards than there are federal employees.

49:35

Well, that and there was 80 80,000 charges at casinos uh like last year or something like that.

49:42

I mean, gambling is the most American thing in the world.

49:47

Federal team building matter. Yes. Yes.

49:50

Even if they're gambling.

49:50

It could have been team building activities. Yeah. Yeah. Yeah. Team building.

49:52

You take him to the gam, you take him to the slots. Anyway, slot. Yeah. What's the difference?

49:57

Uh so so so what's next coming out of here?

49:59

Um how do you think about um covering this from the Pirate Wire's perspective?

50:04

Is it is it just meeting people doing interviews downstream or is there supposed to be like a definitive writeup or new angle?

50:11

You're you're just you're still on the hunt, right?

50:12

I think we're still looking.

50:13

I think probably a lot of people are going to do the just here's what I saw Hill and Valley.

50:17

Maybe what would be more interesting is to find some sort of meaningful interaction between someone in tech and someone in DC. Yeah. Yeah. Yeah.

50:29

There there's all these like big budgets and you see 150 billion in defense, but then you get down into like, okay, what is the actual mechanic of a seed stage or series A founder like actually getting a $10 million contract?

50:41

Jacob Jacob was talking about this too.

50:43

Every Hill and Valley so far, there's been some policy or like some major sort of business activity that's come out of it.

50:50

So, it's clearly working.

50:50

The question is like if we've 10xed the size of Hill and Valley, are you going to get in 10x the output? Right. Yeah. Yeah, probably.

50:59

I mean, last year's theme.

51:00

Yeah, last year's theme was Tik Tok.

51:02

Have you been tracking that?

51:02

Do you have a Do you have a Tik Tok take or have you evolved at all since last year? Uh, shut it down.

51:08

Shut it down is how is my Shut it down. Don't even sell it. Uh, shut it down.

51:12

I don't even believe that you can sell it and have it still not be backed in some way that I don't understand.

51:15

But I also just think that we're in Trump era now and like nothing matters and the rules change every day.

51:23

So it's like why am I going to sit here and be like the right policy for Tik Tok is because we don't we're not playing those rules anymore. It's a new set of rules.

51:30

The rules are it's like a bunch it's like Trump says some and writes executive orders and then a bunch of wizards and coats in DC fight back with like their random pen and it's like everyone is searching back to past court cases for I guess uh justification for what they're doing and it all is just to me quite chaotic but also I don't care.

51:51

I I my intention for this administration was to be calm while others were crazy. Okay.

51:55

Um and I am trying my very to maintain the calmness through the storm.

52:00

Yeah, it is a great time to be in media.

52:02

Does it feel like it's a the best time possible to be in like tech media or is it like the the war is over?

52:08

We're the dog that caught the car.

52:10

Yeah, it depends on what kind of press you're doing.

52:13

I think right now what's happening in the tech press is people are trying to figure out who they are in the context of a very different culture totally and how they're supposed to navigate that.

52:22

You see the sort of center left like Atlantic type people who have pivoted wildly to just anti- uh anti-Trump antiro stuff.

52:31

Um, but more so than I would say your standard issue leftist.

52:36

Like I think there's like this strange thing that's happening where people are just trying to find a lane and I'm trying to be I just want to take my time and write the stories that matter to me.

52:47

There's also that interesting development with the Ezra Klein abundance thing that feels like very new, but you're rolling your eyes.

52:53

What's your abundance take?

52:53

Because they just ripped it off of like your standard issue tech bro from years ago, right? Or Yeah.

53:01

Yeah. like EAC or what about anatomy of next like I talked about all of these all of them all those anecdotes in fact in fact Derek the author the co-author of that book I saw at Founders Fund for a Charter Cities uh Charter Cities conference years ago many years ago

53:18

which we hosted but I would describe that as finesse it's like we took your best ideas we rebranded them and now we're selling it ourselves yeah I mean you you incepted you I'm not saying they haven't they definitely successfully created something that they're now selling. The question is

53:34

The question is whether or not the conclusion is the right con.

53:38

The their conclusion their whole thing is like we've taken all of these ideas and we blame the fact that we don't have them on the people who created those ideas.

53:44

And I think the reason that we don't have for example um you know housing in California is it's just the people who are in charge of the government in California. It's very simple. Yeah.

53:55

At what point at what point do you expect tech's uh sort of you know basically attention to shift more towards California given it that it's the home of our industry?

54:04

We've seen the Gary Gary go so back. Yeah.

54:06

You know the Gary the Gary Tans of the world obviously kind of were were uh took a big stand now probably a couple years ago.

54:14

I would argue that he's suffered in some ways because of that just given how much negative attention he's drawn locally.

54:21

But at some point tech tech seems so focused on Washington that at some point you're just going to look around your backyard and be like actually we have some pretty big problems here.

54:29

Well, I guess I think a lot of people are I think more people I disagree slightly.

54:32

I think more people are focused on local politics in San Francisco within our industry than any other San Francisco is different than like broadly in California though because like we're we're in Southern California and and I would say most of the people in the Gundo again have much more part partly is the nature of the industry. LA is a lost cause.

54:48

I think it's just like you're never going to save Los Angeles. We are saving Hollywood.

54:53

We're bringing media to Hollywood.

54:54

Bring media to the Hollywood. That's our big push.

54:56

I I think that your best bet is San Francisco.

54:58

I really think that's tactically the the closest that's the best chance you have at fixing anything.

55:04

And if you could save even one city, maybe you could do something else.

55:07

But I think that Gary actually has made a lot of progress.

55:09

Um and I don't think it's hurt his brand.

55:11

I think that it's it's uh he's he's I mean they were asking for his help online when he totally I wasn't saying it to hurt his brand.

55:20

I was just saying like acceleration of like death threats and like people saying for him like stuff like that that's the price to play unfortunately.

55:29

It's kind of like raised the standard deviation of his experience like had some really great experiences and then some really negative ones as opposed to just the anonymous VC who flies under the radar doesn't tag uh switching gears a little bit.

55:39

Did you have a reaction uh to uh benchmark investing in Chinese AI?

55:45

Did that feel that that was very contrarian in in some ways?

55:46

But uh I was trying to I I was personally trying to understand the decision of like okay hill and valley is happening next week.

55:55

We should invest in this company while Tik Tok is like probably should be banned.

55:59

Maybe it's getting banned. Maybe selling you know.

56:00

I mean if their job is just to make money and they think that's going to make money.

56:04

It's there's like a there's a moral question about it.

56:07

But then are we going to break down every single investment that everybody I mean what is I don't know this is a much longer conversation.

56:14

I I guess I didn't feel the way that other people felt.

56:16

I don't I have a much bigger problem with what they did to Travis Kalanick than I do with their investment in a Chinese company.

56:25

Uh are you are you digging in at all this idea that feels like there's a divide right now?

56:30

It's like if you're a foundation model company, you want to tell people that we're in an AI war, an AI race, like we have to win the race.

56:38

uh and that that's a a good narrative if you're needing to raise a lot of capital and uh sort of solidify significance.

56:45

The other side and this is a real side and this is actually Gurley's position which is that we're not in you know the idea that you can win the AI war or race and this technology is not just going to disseminate anyways is and he believes it's flawed.

57:00

What in in conversations that you've had this week, do you feel like you know just sort of uh everybody sort of understands we are in an AI race, we need to win it or do you what what and and kind of maybe what side are are you on?

57:14

I don't think anybody knows anything.

57:15

I think AI is so like we're we're waiting for a paradigm shift and we're trying to also make really firm predictions about what happens after the paradigm shift. Yeah.

57:28

And so I I think that uh all I kind of know is that it's obviously really powerful.

57:33

It's obviously improving really fast. Yeah.

57:35

Um but if something is, you know, fundamentally changing society, then it's anyone's guess.

57:39

I don't think that we know if it's centralizing.

57:42

I don't think we know if it's going to be decentralized.

57:44

I don't think we know if it's a race.

57:45

I I I actually just I don't think we know.

57:47

I think all that anybody knows is that it's powerful.

57:49

And um everything else is just people I don't know.

57:52

I saw Tyler Cowan announce that we had reached AGI the other day and I felt like you're just saying Like I don't you don't do you even believe that?

58:01

Like I don't think he believes that.

58:02

Like I I I think that I think that people are just I think that Yeah, I think that a lot of people were just saying That's kind of how I feel about the Trump administration.

58:11

Do you think there was an overreaction then over the weekend when when when For rolled out and it was just saying like Salana like you might be the goat like a lot of you know like you're one of the greatest Blazegate.

58:22

So, so, so, uh, the latest chat GPTt 40 release, they they fine-tuned it.

58:26

Basically, any question you asked, it would be like, that is so brilliant.

58:30

Mike, you are you are one of the best writers because I was like, yeah, I am. I am.

58:34

I was like, these just accurately reading the landscape like I a keep it up. I love it.

58:40

Well, then you do think there's a story there potentially for pirate wires around that.

58:46

That was the first time I felt like a model could be dangerous where if somebody is having, you know, significant uh delusions of grand delusions of grander mental health issues, they think they're God.

58:55

Uh they think they're on some, you know, confirms all of that and says, "Yeah, you should go a friend."

59:01

And you're like, you know, if I went to you and I was like, "Mike, you know, confidentially like I think that I'm God and I'm on this thing."

59:08

You might be like, "Hey, Jordy, like let's you know, talk about it a bit more why like that's not quite right.

59:14

That's not what I would do.

59:15

That's not what I I will ramp it up.

59:18

Someone shows up and is like like some old kind of guy and he looks at me and he says, "I'm you from the future." Yeah. I'm leaning in. I'm like, "All right."

59:27

Like I'm listen prove it. I'm here.

59:30

I want the Give me the evidence.

59:32

If you said you were God, I'd be like, "All right, like do some God Okay, we'll talk." That's amazing.

59:35

That's my We need you to do some reinforcement learning uh for Open AI. Yeah, this is amazing. Dial it in.

59:43

Thank you so much for coming on the show.

59:44

We'd love to have you back. Glad you got your suit.

59:48

There's more news and stuff. I'll see you guys later.

59:50

Have a great rest of your day. We'll talk soon.

59:51

I I I texted Sean Magcguire, told him we are ready.

59:56

Um hopefully he can swing by.

59:56

In the meantime, why don't I give you a little We We should just literally read some uh Hey, how you doing? What's up? We are on air. On air.

1:00:08

Um you can feel free to introduce yourself. Sit down. Tell us about yourself.

1:00:14

Um Let's uh tell everyone uh who you are, what'd you do?

1:00:17

Michael Eisenberg, general partner at Olive in Tel Aviv before that at Benchmark. Yeah. Four years ago.

1:00:23

It was just a dinner in the Library of Congress Rotunda. Yeah.

1:00:24

So, was it was the dinner, you know, more intimate?

1:00:29

Was it more, you know, what was your read on it then?

1:00:31

What's your read on it now? This is overwhelming. Yeah. Yeah. It's big.

1:00:34

You know, for a guy like me, it's like super overwhelming. Yeah.

1:00:36

You know, I used to be on the other side of the microphone.

1:00:39

I have my own podcast invested.

1:00:39

I interview other people. This is kind of fun. It's fun. It's fun. Well, uh Yeah.

1:00:44

What what what what are you trying to get out of the event?

1:00:45

Uh are you specifically looking for founders that you could potentially invest in here? I'm not.

1:00:49

So we invest only in Israel. Okay.

1:00:52

But you come to Hillen Valley. Why?

1:00:54

Because politics the intersection of geopolitics and technology is perhaps the most important issue of our time and where there's enormous opportunity.

1:01:02

Maybe a little cap by the size of in general the defense establishment.

1:01:03

The M&A side won't be as big as Google, Cisco, Microsoft. Sure. Yeah.

1:01:07

Cisco, Microsoft. Sure. Yeah. So is there an angle here where you kind of act as like a part of your value ad as a venture capitalist is a de facto lobbyist for the until they can afford a lobbyist where I'm not a lobbyist but personally but you can make introductions I can make this is a

1:01:23

relationship at the first hill and valley you know Senator Cotton was here JD Vans now the vice president of United States was here last year was here and you know this is where people here in a minute you should have Joshua for he's coming on in 20 minutes he's a great guy the You and I will be together in Tel Aviv next week also. Oh, so we're having Sean

1:01:39

Oh, so we're having Sean Magcguire jump on in just a minute.

1:01:41

He told us about how Talpo has become a pipeline for great founders.

1:01:46

Can you give us more insight there?

1:01:48

Have you backed any Talpo founders?

1:01:49

Yes, we've backed many top 30 years. Well, yeah. Yeah. What is Telpo?

1:01:53

Why is it such a hot bed for entrepreneurial talent?

1:01:57

Everybody knows about 8200 unit, which is like the cyber unit of the Israeli military.

1:02:00

Topio is a unique program.

1:02:02

Takes about 30 kids a year who are the best and the brightest.

1:02:04

The Israeli genius goes there. It's a 10-year program. Wow.

1:02:07

In which you get a couple of degrees along the way. Okay.

1:02:09

And then you get a budget. Yeah.

1:02:11

To go do a big weapons program or military program.

1:02:13

And so we give these 22, 23-y old kids the most immense responsibility.

1:02:18

They grow up, they deliver, and they know how to build essentially companies. That's awesome. In a box.

1:02:22

Can you give some examples of uh alums that you think are worth digging into or understanding their history? Uh, sure.

1:02:29

So, we backed a company called OneStep.

1:02:30

It's actually three top guys, which is like hitting the jackpot. There we go. um by Torman.

1:02:39

They just took they just took this little telephone device and turned it into what's called a gate lab. Okay.

1:02:42

And it turns out that how you walk is predictive of your health. Oh, interesting.

1:02:47

In many ways, it's like a blood test.

1:02:48

Literally like a blood test.

1:02:50

I can tell if you're going to have dementia or Alzheimer's, by the way, whether your hip and knee replacement works. Interesting. That's what I mean.

1:02:55

Only guys who are literally rocket scientists could turn the phone into what's called a gate lab and use it to measure everything.

1:03:00

That's one example there.

1:03:01

What's the business model?

1:03:01

sell to the customer directly or vend that into Apple Health or something like that?

1:03:05

No, they're actually selling to uh uh facilities that do rehab. Sure.

1:03:07

For elderly people or people have hip and knee replacements.

1:03:11

They sold to medical device guys like Zimmer.

1:03:12

He's growing extremely fast. That's great.

1:03:14

And you know, incredible genius.

1:03:16

And you know, then there are others.

1:03:18

There's a guy out there, you might have met him, Michael Calfman, who's working with a bunch of guys who come out of that place.

1:03:22

I think met him last night.

1:03:24

Talk about uh collaboration with this group here and and and your companies back in Israel. What what is that like?

1:03:31

The interesting thing about Israel is there's no local market, right?

1:03:34

10 million citizens doesn't make much of a market.

1:03:36

400 million on the other hand, Sure. Sure. is big.

1:03:38

And so if you assume that US defense spending is going to go up. Yeah.

1:03:42

Um this is a good place to do defense technology.

1:03:44

We've backed a bunch of companies in the area.

1:03:46

A company called Ore, which makes uh uh rocket fuel and uh explosives. Got it.

1:03:50

Uh using natural and biological means uh and uh another company called chemistry company.

1:03:58

It is like it is actually a chemistry company using biological means a specialty chemicals company.

1:04:01

Our co-investor there is standard industries on WR Grace. Yeah.

1:04:04

Um and uh we've backed a company that's in the kinetic defense area and another company called Dream.

1:04:11

You may have heard it was founded by Sebastian Kurtz the former chancellor of Austria and Shal Julio that is doing national level AI protection.

1:04:16

It's one of the fastest growing companies I think in the world right now.

1:04:20

Uh what's your uh what's your read on whether or not we are really we're clearly in an AI race.

1:04:28

uh what what is uh is that something that can be won or is it like any other industry where it's just sort of a perpetual race?

1:04:33

There's there's no ending, you know, do you have a thesis around uh do you agree or disagree with Bill Gurley?

1:04:39

I agree with Bill Gurley. Okay. Yeah.

1:04:41

My former partner eventually Bill Gurley.

1:04:43

I I I agree with Bill Gurley.

1:04:44

It's an infinite game, but I'm not sure the question is framed right. Sure.

1:04:48

So AI is going to impact just about everything we do.

1:04:51

It's a super accelerant of of many things.

1:04:52

I think the question becomes because the clock gets sped up. Yeah.

1:04:56

Um you could fall really far behind in every iterative game you play, right?

1:05:01

If you're not at the head of the game, you know, if you're not winning winning the game, it's not that you win in order to defeat the other person.

1:05:07

You win in order to stay ahead.

1:05:09

One of the burn a bunch of books.

1:05:11

One of the core thesis of the books is that the civic society runs on iOS and AI and runs really quickly and government runs on the fax machine still and that's inevitably creates friction and the civil society pulls ahead and it creates tension with the government.

1:05:22

I think that's part of the loss of faith in institutions.

1:05:25

So if you don't accelerate the clock on absolutely everything, what you just have is unending friction, society kind of collapses on itself.

1:05:31

So you need to stay ahead of the race in order for your society actually to be healthy.

1:05:35

And then also to deter others uh from doing other things.

1:05:40

You know, as science accelerates with AI and weapons development with AI, it can be troubling.

1:05:44

I I gave a talk in Abu Dhabi about this about a year and three months ago where I showed that there's correlation.

1:05:50

We can argue whether there's causality.

1:05:51

I think there is between the increase in compute power and cyber attacks and interest in uh in bioweapon attacks online.

1:06:00

I think it's not an accident.

1:06:02

There's agents of chaos in the world and now they have access to super tools y like AI.

1:06:05

So if we don't stay ahead these people get emboldened and you can't kind of keep in a box.

1:06:09

Uh what you know there's a lot of talk uh today around just efficiency in government specifically around like payments things like that.

1:06:16

Uh does the US have uh anything that we can learn from Israel in terms of do you think Israel's done a better job in terms of like modernizing the way that governments actually run or is it still fax machines all the way down?

1:06:27

The really interesting thing about Israel is not the government.

1:06:31

Uh what Israel has is the most incredible civic society on the planet.

1:06:35

If you look at what happened October 7th, the government was absent, but the civilians all turned up. Yeah.

1:06:40

They turned up to evacuate people, turn up with their own weapons and their own cars and took care of business of what needed to be done.

1:06:45

And in fact, the evacuees were taken care of mostly by civilians.

1:06:47

The government didn't turn up.

1:06:49

And what I think Israel is a model for the 21st century, which is it's almost impossible for government to catch up on so many of these technology things.

1:06:57

It's just going to take them a while. Yeah.

1:06:58

What we're doing now is devolving this to citizens to take over more control of the economy, emergency response, uh, and everything else.

1:07:05

I I chair the largest volunteer organization in Israel.

1:07:08

There's actually wildfires going on right now in Israel.

1:07:10

They've been set on fire by terrorists.

1:07:11

There's 20 places that the fires are.

1:07:13

This my civilian organization that I chair called the the new guardians is out there with thousands of volunteers stopping the fire the fires and stopping people from lighting more.

1:07:23

And so the lesson from Israeli society is how you leverage technology in civic society to take over more capabilities from the government.

1:07:30

Now you can't defend people like that.

1:07:31

That still requires uh the government and policing should be done by the government.

1:07:35

Um, but the Israeli government, I think, is like every government right now, which is there's lower uh trust in institutions.

1:07:40

They're still very, very slow. Yeah.

1:07:43

Um, and they're kind of coming around to this very late, but because of the force of the public, I think it'll get there faster than most other governments. Yeah, that makes sense.

1:07:53

Uh, what what do you think about uh different geos to invest in?

1:07:58

Uh Benchmark was obviously in the news for the Manis investment, which is kind of controversial, but you could see a world where, hey, they're just great founders.

1:08:05

They want to get out and so, you know, American capitalism is like the path out.

1:08:09

Uh are there more are there other geos that are you think are interesting or more on this continuum of like east versus west narrative?

1:08:16

I'm pretty bearish on Europe. Yeah.

1:08:19

Uh broadly, I've said that on Harris Debings podcast and other places.

1:08:22

Um I'm super bullish on the US and Israel. Sure.

1:08:26

And you went on the on the king of Europe's spirit list. That's right. I did. Brutal.

1:08:30

By the way, I should say I'm an LP of Harry's too.

1:08:32

But but you know, he he feels the need to disprove me right now when you know was super bearish on Europe. Going all in. He's all in. He's all in. He's dying on the hill.

1:08:42

He's got to make it work. He's got to make it.

1:08:44

It's good to be young and ambitious like Harry is and do it.

1:08:45

I I think there's interesting things going on in pockets, but still Mecca is It's by the way, it's not the United States per se.

1:08:54

It's Silicon Valley and New York and maybe Austin and a little bit of Miami and Tel Aviv.

1:08:58

It's cities around the world and maybe there London.

1:09:00

I think the most interesting thing going on right now is actually in Abu Dhabi and and Dubai.

1:09:05

They become a massive magnet for the talent fleeing Russia and Ukraine.

1:09:09

They made it really easy to come there.

1:09:12

More and more companies are setting up facilities here. Just here.

1:09:13

I met three people who've set up in Abu Dhabi. Yeah.

1:09:16

And so, well, they have a lot of incentives, too.

1:09:18

I've heard that they'll basically say free space, free energy.

1:09:21

There's a lot of, you know, they'll they'll basically like massively reduce the cost, my understanding of operating things like manufacturing, any type of like hard tech, you know, projects.

1:09:31

They're also really good at building big projects and they have lowc cost energy.

1:09:33

So, they're going to build big data centers.

1:09:34

They're building big data centers for the US giants and Microsoft has a partnership, you know, in MGX with Mubala and with OB.

1:09:39

I think there's interesting things going on in the Emirates, uh, more broadly.

1:09:44

not as much, you know, entrepreneurship coming out of there, but places where you can kind of build infrastructure and deploy.

1:09:51

And I I think the really really big question facing the West right now and I'm a fan of Alex.

1:09:55

I think we're here to defend the West is how do we create a secure and resilient supply chain? Yeah.

1:10:04

For the infrastructure we need to stay ahead in AI and not just in AI, AI, robotics, uh defense, whatever the next generation of bio is and chemicals as we've talked about. Yeah.

1:10:14

That requires real infrastructure and a secure supply chain for the west to win and we got to focus on that. Yeah. Yeah. Great point.

1:10:22

Uh what is your postmortem on the bricks narrative that uh I I don't know I grew up with uh Brazil, Russia, India, China.

1:10:30

Uh Goldman was calling these the next major markets and the way that's bifurcated.

1:10:34

If you invested in Russia and China, it's really rough but Brazil and India they've developed but not fully.

1:10:40

uh are are there still like jump balls on the geopolitical uh like uh chess board that can be pulled towards like the broader definition of the west even if India is not in what we traditionally think of as the west.

1:10:53

It's funny you should ask this question.

1:10:55

I was just remarking to somebody a couple days ago there was bricks and now there's IMC. What's that?

1:11:00

Ah the India Middle East corridor. Okay.

1:11:03

So we assume that India would go with Brazil, China and Russia.

1:11:05

But if you look at China and Russia in particular on some level, Brazil, these aren't real democracies in India is is a democracy.

1:11:14

I think it turns out by the way if you invest in a non-democracy, you actually don't own what you think you own. They take it from you.

1:11:20

You don't you know free markets as uh Freeman said, you know, create uh free societies. Yes.

1:11:24

It turns out the opposite is also true.

1:11:27

If you don't have a free society, you actually don't have a free market.

1:11:29

You don't own what you think you own.

1:11:30

And I never thought India was actually a part of that.

1:11:33

But this thing, what's the corridor?

1:11:34

India Middle East corridor. Yep.

1:11:36

Yep. It's the alternative to the belt and road initiative and this you know people understand this find you geopolitical point so Turkey which is kind of on the side now Turkey Pakistan which is now waring with India are part of the belt and road initiative the China initiative that China has

1:11:51

initiated to try to get to Europe via land India Middle East corridor is alternative that where you go via India via the sea to Dubai Abu Dhabi you cross through you know Saudi Arabia Jordan Israel and out to the Mediterranean y and then in there and this I think is a deals. I think bricks fell apart because

1:12:06

I think bricks fell apart because uh democracy doesn't belong with these people.

1:12:10

But I think there's a giant opportunity for the west and for the United States if we can bring India on board and make them a core part of the supply chain across the Middle East and into Israel and Europe looking into it and more and more companies testing the waters.

1:12:22

But these things take more time. It takes a long time.

1:12:24

These things take more time than anyone believes.

1:12:25

The supply chain created in Shenzen and China and Taiwan is 30 years in the making.

1:12:31

It's not going to happen overnight. Yep.

1:12:32

Well, thank you so much for coming on.

1:12:34

Sean McGuire's out there waiting. Can you go grab him?

1:12:36

I'm like a warm up for Shawn McGuire.

1:12:38

That's like, you know, I mean, life goal unlocked. Yeah, there we go. Opening for great. Yeah, great to meet you.

1:12:45

Thanks so much for stopping by. Um, fantastic.

1:12:46

I think Jordy has to send a uh a tweet or post uh promoting the feed.

1:12:52

We're going to bring in Sean Maguire from Sequoia Capital. Welcome to the stream.

1:12:56

Third time appearance on TVPN. How are you doing?

1:13:02

I think we have a question.

1:13:02

By the way, he's like leaning down.

1:13:05

These guys are much taller in first and then you Oh, yeah. Yeah. Yeah. Uh yeah. Yeah. At one. Yeah.

1:13:10

We'll do six minutes then we'll bring him in. Great. Uh great to see you. Who's the VIP at one? Josh Wolf is coming on. Legend, great guy. Good buddy.

1:13:18

You guys could share your mic.

1:13:18

I think that'd be entertaining.

1:13:20

Uh what what's the initial reaction?

1:13:22

Is this your third Hill in Valley? Fourth Hill and Valley. Something like that. Third.

1:13:28

You know, I actually met you for the first time at the last hill in Valley.

1:13:30

Yeah, I missed I missed the first one which was a big mistake. Got the invite.

1:13:33

I think I got food poisoning or something before, but uh this thing has grown every year.

1:13:37

It just gets crazier and crazier. Yeah. Yeah.

1:13:39

Uh are you do you like the framing of like re-industrialization being the focus?

1:13:46

Last year was a lot of like Tik Tok stuff.

1:13:47

Is there something else we should be focused on or is reindustrialization really the heart and soul of uh the agenda with Hillen Valley?

1:13:56

Whatever the agenda is, I think the conference is focused on how tech meets Washington and like how we play nice together in the future.

1:14:04

And I think that's the right focus and it's, you know, what technologies are going to matter in the future, what policies can happen that will help us get there.

1:14:12

And I think like re-industrialization is critical, but I I'm already hearing, you know, there's a lot of talk of a lot of other things, too. Yeah. Yeah.

1:14:22

like energy, you know, all sorts of things. Yeah. Yeah. Yeah.

1:14:27

It does it does feel like even defense tech, if defense tech ends up being involved in anything, it ends up overshadowing it because it's just exciting.

1:14:34

You have these planes and drones and dominate like great videos. Even better demos. Even better demos.

1:14:42

Yeah, the nearest demo is wild. I got that one early on.

1:14:44

Saurin's a champion drone pilot.

1:14:46

So, sort of great drone uh great demo.

1:14:49

Uh, in terms of energy, uh, are should every venture capitalist be on the hunt for the Elon of energy?

1:14:54

It feels like there is Elon energy might end up being Elon.

1:14:59

You think he's going to go into it?

1:15:00

I mean, we I can't read his mind, but if he does, just tell me where to wire the money, Elon. Is there any limit? Elon is Elon.

1:15:09

Elon. That's kind of my reoring resoring semis but like there has to be an upper limit to like you know how much industrial work he can do at some point or I mean look on so there have been to the credit of the tech industry there have been probably 10 to 20 pretty promising vision startups in the last

1:15:30

five six years and probably five to 10 fusion startups I haven't invested in any of those which you know means I'm not doing my heart to just like raise the tide of all and my kind of the challenge for me has been it's even though I believe so much in the category I have like I believe in the macro I have to get the micro right. I made that

1:15:52

I made that comment before and it's it's been hard for me to pick like who's going to win in that category and I I think this is something that we kind of struggle with and I think some sectors Yeah.

1:16:02

there should be a lot of government support like for all these if if one ends up as like you know number 10 in the space but is still like a public good and is like is a positive payback for the government.

1:16:17

Anyways, I think we need more government.

1:16:19

I just feel like there's an opportunity for a startup that's like, "Yeah, SMRs are cool.

1:16:23

People are building those.

1:16:23

There's new designs that are great, but our startup is just copy pasting Diablo Canyon.

1:16:29

We're going to copy paste it a 100 times." 500 times. Exactly.

1:16:30

But that does seem hard to Who on uh We've had a lot of people on from the valley side of Hill and Valley.

1:16:38

Who on the hill side have you been, you know, excited about talking with that you think really gets it?

1:16:46

I mean, I was just on a panel with Senator Todd Young, and I I think he deeply gets it.

1:16:49

And for example, one comment he just made was like he doesn't want to like re onshore everything, only like a small number of very strategic industries.

1:17:01

He doesn't want to onshore garments. Yeah.

1:17:03

You know, and he's fine with things that are not there's different levels of like how strategic something is. Yeah.

1:17:10

And you know, it's fine if the medium strategic things go to friendly nations. Yeah.

1:17:15

And so anyways, I think Todd has had very nuanced opinions.

1:17:21

I think up right now or next is Richie Torres who is someone on the left who I I've generally admired and felt like has very even though I disagree with him a lot of times I think he's a very principled person who really deeply cares about America and is willing to say unpopular things that he believes in.

1:17:43

For me, anyone that is willing to be bipartisan, like not just purely tribal, but take a on like some topic that is core dogma of their party and they're willing to go against that dogma, like that's someone that I generally admire. Yeah. Yeah.

1:17:56

I mean, that should be a good fit for Silicon Valley.

1:17:57

Like the whole search for contrarianism is like pervasive in Silicon Valley, right?

1:18:00

And so pervasive in Silicon Valley, a little less pervasive in Washington. Yeah.

1:18:04

But it still exists and there's pockets of it that you have to seek out. Seek out.

1:18:08

Um, what is your read on the new defense budget?

1:18:12

We're hearing this $150 billion number.

1:18:14

Uh, for a while it seemed like there was going to be a freeze, maybe very bad for challenger defense tech companies.

1:18:20

Then it seemed like the floodgates open and there's all these huge numbers for even just smaller series A companies are throwing out, oh, there's a billion dollars hanging out for my thing.

1:18:29

Uh, how optimistic are you about that?

1:18:32

And how optimistic are you about uh not just like the SpaceX's of the world but the actual upandcomers, the next generation of defense tech?

1:18:43

You know, unpopular opinion.

1:18:46

I simultaneously believe that defense tech is one of the most important categories in the world.

1:18:50

But I also believe that there's going to be a very small number of winners.

1:18:54

You know, call it in the west.

1:18:56

This is including Europe and Israel and America.

1:19:00

Roughly 10 companies that go on to be really big next gener next generation companies call it companies with 10 billion plus market caps.

1:19:09

And I think there will be multiple with greater than hundred billion dollar market cap. Wow.

1:19:12

And I think that the defense tech companies of the next generation are going to be way better businesses than the last generation.

1:19:19

So I think it's kind of focus on efficiency. Focus on efficiency.

1:19:23

Focus on vertical integration.

1:19:24

If you go look at like I think I think one of the core things people got wrong about Tesla in the public markets going back to like 2017 2018 is they were comping it to auto companies. Yeah.

1:19:34

And they're coming to GM or Ford whatever.

1:19:36

And people didn't realize that GM and Ford don't really make anything anymore. Mhm.

1:19:40

They basically design cars and and are, you know, customer acquisition channels and maybe some financing, but they subcontract out everything and and so they would look at, oh, GM or Ford have these market caps and Tesla's already here, but they would ignore NXP and ignore like all these supply chain companies. Yeah.

1:20:00

And I think we've kind of been doing the same with the defense primes. Interesting.

1:20:04

You know, Boeing, Lockheed, they subcontract out almost everything.

1:20:10

that goes into their only a slice of the market cap.

1:20:12

You're only getting a slice of the market cap and I think these next generation companies are going to have way more vertical integration, higher margin.

1:20:18

I actually think that we're going to see a change with how procurement happens to move away from cost plus.

1:20:22

I think we're already starting to see that.

1:20:24

Um, but basically the reason it's unpopular is I think there's going to be a very small number of winners that win mega hard and then a lot of, you know, losers or companies get rolled up into the big, you know, the big winners.

1:20:37

Were you surprised that I think the number was $500 million was earmarked for autonomous systems and when you compared that to some of the other categories it felt pretty low.

1:20:46

Do you do you have any insight into into into how they got around to that number or you know general reaction?

1:20:55

So like there's different philosophies.

1:20:58

I think one philosophy would be that like we're trying to push a boulder up a hill in terms of like changing the defense budget and moving budget towards next generation emerging industries.

1:21:10

And if that's something where like every year it's predictably getting bigger and bigger and bigger and if 10 years from now 40 50% of the budget is going towards kind of next generation strategic technologies then I'll be very happy. Yeah.

1:21:24

Um, what would be very bad is if it's like 500 this year and then zero next year.

1:21:29

That's a really great take.

1:21:31

It's like it's like if a company raises, you know, $100 million in VC and they have to spend it all in the first year, like they're going to probably spend it really inefficiency inefficiently versus like, hey, let's like stage this out on certain milestones.

1:21:44

And so, yeah, I think that's the right.

1:21:46

And this has been the look, I learned this lesson the hard way with my cyber security company that focus on defense.

1:21:52

our first big contract, we got we got awarded a $10.

1:21:57

5 million contract and then government sequestration happened.

1:22:02

Like they couldn't pass a congressional bill and we basically got told like either we accept the contract with 60 cents on the dollar or no contract at all.

1:22:10

So obviously we took the 60 cents on the dollar but and we were lucky that this was actually our first big contract because it taught us from day one how unpredictable government funding can be.

1:22:20

But it's that predictability like if it's if you know it's going to be 500 this year and a billion next year etc.

1:22:26

you can invest strategically if you have no idea what it's going to be in the future.

1:22:30

It's just very hard to plan. Totally. Uh do you have Yeah.

1:22:33

You guys get Josh last last question 60 seconds.

1:22:35

Uh do you have a re you know a a a take on this idea of whether we're in an AI race but is it a is it a is it an infinite game?

1:22:43

Is it just sort of a perpetual game?

1:22:46

or is it uh uh is AI war even the right framing? Right.

1:22:52

I feel like this has been debate.

1:22:54

Oh man, I I'm so glad you asked this.

1:22:56

I've been obsessing over this for a couple years.

1:22:57

I have a pretty strong opinion that the foundation model companies are going to capture way more value than people realize.

1:23:04

My I think it's a combination of operating systems plus cloud which means this will be incredible businesses.

1:23:13

Let me just make this point.

1:23:15

So like if you think on the operating system level, there's Windows, there's Apple, there's Android by Google, there's you know Linux and open source and these companies like the value capture of Microsoft or Apple, it's not on the operating system, it's on all the applications that they control and built on top and same with Android.

1:23:40

Um but by control I think the operating system are going to be the foundation models themselves.

1:23:44

I think there's incredible kind of capex and development to get to the point where you are the like one of the top operating system that has eyeballs. Yeah.

1:23:54

Yeah. Yeah, but then I think the lock in and the value capture will be with the applications that are kind of verticalized on top and I think there will be an additional moat which will be like the mode of cloud the cloud has done a very poor job of the application lock in the way the

1:24:08

operating systems did but they've done a very good job of having a hardware mode and a capex mode and uh and I think it'll I think I think these AI foundation model companies are going to have both they're going to have like a capex lockin mode and they're going to have like the usage and application mode plus value. And then just the last thing

1:24:27

And then just the last thing I'll say on this and and like if you look at Linux, Linux probably has five times as many installs as like Windows.

1:24:35

But the value capture of Linux is like 1/100th of Microsoft.

1:24:38

Um but Red Hat's still a big business.

1:24:41

But Red Hat's still a great business.

1:24:42

But I I personally think this is where we're going to go with AI is that like the open source deepseeek and all that stuff will be great and it'll be there will be more open source models used in the world.

1:24:52

I think the value capture will be lower by that than XAI, OpenAI, Anthropic, some Chinese income, etc. Get Josh Wolf on here. The best. Let's go.

1:25:04

Yeah, we got to do a whole deep dive on that.

1:25:05

We'll see you back in LA. Peace, guys.

1:25:07

Let's bring in Josh Wolf.

1:25:07

And I got a post that we are live. Um, so much to dig into. 60C question.

1:25:13

Jordy, you you you hit him with the the the deepest possible question.

1:25:18

Deepest possible question.

1:25:19

I wanted to take more on uh on this idea of, you know, should we be investing in Chinese AI companies? Yes. Yes. Yes.

1:25:25

Well, well, we have Josh Wolf, the man himself. Great to see you. Welcome to the stream. Uh, how you doing? Please. Uh, awesome.

1:25:36

Uh, we've been wanting to have you on for a while. Yeah. Great.

1:25:40

I've been wanting to be on. Yeah. Yeah. Yeah.

1:25:42

I'm glad you can make it.

1:25:42

Uh, I'm going to disagree with everything that Sean said.

1:25:44

I don't even line by line. Line by line. Yeah.

1:25:47

He said, "Uh, AI is valuable."

1:25:49

Uh, what what about that?

1:25:52

You're in front of a camera.

1:25:52

Can you uh Yeah, I think you're good right there. Yeah.

1:25:54

Yeah, you should be good there. Yeah. Yeah. Yeah, that's great. Uh, how's it going?

1:25:58

Is this Is this I I I'm wearing a tie. I love it. You're wearing a tie. You look sharp.

1:26:03

Has it been exactly one year since you put on the suit and tie for Hill and Valley last year?

1:26:08

year? Break down your your first business trip to Washington because I feel like you've been coming to DC for a very long I feel like you've been banging the the you know public private partnership you know drum for a long time a long time and and many of the companies I feel like you know oftentimes I see a new fund raise announcement from a new you know sort of hard tech company and I'm like I I feel

1:26:27

like Josh invested in like this exact company like six years ago or something like that company and they raised a lot more money uh yeah no we've been in this for a long time I think we really started with a lot of like uh Intel

1:26:38

community facing things so most of that was sort of software maybe sensor sigant uh data collection Then we started working with special operations and it wasn't at the scale that you need to win a big army contract. Sure. Started doing stuff in Sure.

1:26:50

Started doing stuff in space with satellites.

1:26:52

Um, and then I would say like really the first pure play non quote unquote dual use thing which was unapologetic was first round of Ander and uh, you know, I wish that there was like some sophisticated analysis we did for that, but it really was me and Trey at Balthazar in uh, in New York and he's like I'm going to start this company with Palmer Lucky. I'm like I'm in. I'm in.

1:27:12

So, you know, that was that was the that was the diligence.

1:27:15

diligence. How have you found uh you know you do you do a a first round in anderole but then and then you're like okay this category is going to be really important so you want to invest more but then there's this issue where the anderol of anderol is probably and yeah

1:27:32

it is and so and so have you had to hold back in a lot of instances where you're there there are venture funds and we we compete with them and we partner with them that are sort of a little bit more uh polymerous and they're doing lots of

1:27:42

deals with lots of different people we try to be really monogous And so there was one company in particular um I'll say it out loud but it was dive technologies and they came to pitch us and they were doing subc which was sort of complimentary to our company sale

1:27:53

drone which is doing autonomous fleets of on and I said you know I think you would really be better off as a part of a platform that has the muscle and the uh mechanisms to be able to win contracts and um scale and manufacturing and think about this as part of a portfolio. And so at first I think they

1:28:07

And so at first I think they were a little bit hesitant but then they ended up going to Andreal and I got to say I think it was like 60 or 90 days.

1:28:12

We then won the big OAC deal. Yeah.

1:28:12

And that to me is just like proof positive of high-tech in the right platform, able to execute.

1:28:20

Matt Grim, credit and props to him.

1:28:22

I mean, he picked up his family, moved to Australia, set up this operation, 60 plus people, billion dollar plus contract, like very, you know, but but clear sign of winning. So, we love that.

1:28:30

But yes, it is harder to do something that is in a category as Ander expands because we really want Anderil to just be, you know, is there a different type of underwriting that investors could be thinking about?

1:28:39

Not necessarily, hey, I'm trying to back the next and all and I'm underwriting to a 1% chance of a hundred billion dollar outcome or is there a world where yes, we're building something that might get acquired or might totally go through an M&A process and is that even the is that even the purview of venture at that point?

1:28:58

You go back to Sequoia, Sequoia Fund and Cisco, you know, Cisco, but then Sequoia made a fortune selling company after company to Cisco in the late '90s, right?

1:29:03

So if Ander you know ends up being a 50 $200 billion business the ability for them to buy a bill a company for a billion is venture for a lot of fun.

1:29:12

So I think that the ecosystem is growing the right way that it should.

1:29:16

We will have a bubble in aerospace and defense.

1:29:18

It will happen and it will happen in part because of capital formation which is really interesting.

1:29:23

So you got venture funds like us that us and Sequoia and founders and and KP and coastal a handful of people that are doing you know these kinds of investments.

1:29:31

Then you got dedicated specialist funds. Yep. Yeah.

1:29:33

And uh then you got fund of funds and the fund of funds are interesting because you have a bunch of universities and endowments and hospitals that are like we won't invest in the defense category because we are not comfortable being part of a kill chain.

1:29:42

We as a partnership are right but they might not be but we would invest in a fund of funds that is investing in a venture fund that is investing in a company.

1:29:48

So you have this moral remove that is going to provoke more formation of capital but there won't be enough companies in the first few years and so you're going to get a bubble.

1:29:56

There's going to be a bunch of frauds.

1:29:57

There's going to be a bunch of crashes and disasters.

1:29:58

Is that an argument against building like a dedicated defense tech fund?

1:30:02

Have you ever done a segmented fund?

1:30:04

I know a lot of big big VC funds have.

1:30:05

No, we we uh we have like a little opportunity fund for some of our best defense companies, but not a carveout. We are generalists.

1:30:14

We like to have one pocket, one pool.

1:30:15

You can do a $100,000 check.

1:30:15

You do a $100 million check. That's great.

1:30:17

Uh and you can go sort of all sectors, but um I don't think there's anything wrong with it.

1:30:21

If somebody's a specialist and super passionate about it, like go for it. Yeah.

1:30:24

Jordan, uh what was your play what was your kind of DC playbook?

1:30:26

What what advice would you give to your portfolio maybe 5 years ago and how is it different than today?

1:30:32

You know 5 years ago I think you were working with a lot of lobbyists to try to get meetings on the hill.

1:30:36

You'd be lucky if you can get a senator.

1:30:38

You were mostly getting congressman or staffers to know if that today I think everybody wants to be in the conversation because they don't want to be ignorant.

1:30:44

You have a lot more alliances between red and blue Republicans and Dems on things like shared adversaries.

1:30:50

China you know that's a question which everybody converged upon.

1:30:54

So competitiveness, thinking about the scientists, the engineering, people are going to debate some of the policy stuff.

1:30:59

Should we be cutting science funding, should we be partnering with South Korea or Japan or UK, but everybody wants to be in the conversation.

1:31:06

So your access today as evidenced by this conference.

1:31:08

I mean, what Jacob and Deli and Christian have done here is just really amazing because it started as this napkin sketch. It became a crowd.

1:31:15

Now the crowd has become sort of a movement, but the caliber of the people that you're getting is both extraordinary.

1:31:21

and the politicians sort of keep getting older, but the people that are doing the tech companies that we're looking to fund keep getting younger, and I think that's a beautiful thing.

1:31:27

Are you taking would you say you're taking more a lot more pitches today?

1:31:31

I mean, I imagine like in the halls here. In the halls here. No, no, no.

1:31:35

Just in the context of uh I I know you guys have all, you know, been focused for a long time on like, you know, finding like researchers that were developing, you know, things that could be commercialized.

1:31:43

Uh but I imagine like just the scale of inbound as hard tech, manufacturing, defense tech, all these categories like became like hot get heated.

1:31:54

I'm assuming like the number of pitches just gone through the roof.

1:31:55

pitches just gone through the roof. I mean the number of entrepreneurs and by the way the best entrepreneurs frankly are the people that we backed at and we've done two people that have vested and you know sort of with blessing have gone and left and started their own company and so being able to find these fountains of talent that have seen

1:32:11

success have seen rapid scaling have seen valuations they understand the venture game they can raise money they can attract technologists they can in license IP develop it themselves those are the people that you can back time and time again so I think we have a decade long run of amazing talent in this ecosystem that isn't going to be just silicon Valley, right? It's going

1:32:26

It's going to be SoCal and it's going to be other parts of the US down in Texas and and uh and maybe even Florida.

1:32:31

How do you think about uh and by the way, sorry, and international, too.

1:32:36

We did our first two ever Israel investments.

1:32:38

Both are defense companies.

1:32:40

We did a company in Japan, company in the UK.

1:32:41

So, we're interested in not just American defense also, but American allied defense. Totally.

1:32:47

Um, how do you think about uh VCs as a conduit to DC?

1:32:50

It feels like potentially low hanging fruit for some sort of value ad.

1:32:55

You know, a lot of VCs would say, "Oh, we'll help you find find your first uh you know, VP of engineering or we'll help you with some comm's puzzle, but uh like almost like light lobbyist uh just making some introductions to the senators and and congress people that you might know.

1:33:10

Is that a more modern form of value ad that's coming out of venture funds these days?"

1:33:17

I think partners at firms like ours and others have relationships and they're authentic relationships and you spend time with these folks and you admire them.

1:33:22

There's congressmen who I deeply admire and I think are the future leaders both Republicans and Democrats.

1:33:26

People like Richie Torres and Jake Oenclaus and then on the Senate side Young and uh uh Slotkin.

1:33:29

I mean these are like real patriotic Americans that are smart and savvy.

1:33:34

Might have been in the CIA, might have been a marine uh but but quite savvy and they are techsavvy and they're young and they want to know these companies and uh and you know they want a future donor base too and their own self-interest.

1:33:44

As Ben Franklin said, would you persuade appeal to interest, not reason?

1:33:47

Y but I think understanding that game and also understanding tech moves at this crazy velocity that is hard to compete with.

1:33:53

It's why tech wins because they out compete because they move faster.

1:33:55

Government does not move that fast.

1:33:57

And so you have to be a realist.

1:33:58

Government is moving faster than it has in the past. Particularly in defense.

1:34:02

You look at this appropriation bill, this reconciliation bill, trillion dollars, 47 billion plus going to be going towards ship building, autonomous systems.

1:34:08

Like that's going to be a big boon for Anderil, for Hadrien, for Varta, for sale drone.

1:34:12

How do you think about uh founders that are trying to time some of these broader structural changes if you were in if you're in ship building at all?

1:34:22

The best time if you want to take advantage of this new bill to start your company was maybe a decade ago because you're sort of ramped and you scaled and you have a great team and you have some credibility.

1:34:30

But how do you think what's your advice kind of early stage founders that are seeing the world change and trying to kind of navigate and see opportunities?

1:34:37

You know, an example being like, you know, I I'm not convinced that like every manufacturing, you know, automation company is like going to do is the right time to start it is now because we don't know very the the future is like murky, right?

1:34:53

Like totally a lot of these things are unfolding.

1:34:54

How do how do you help founders kind of understand market timing uh when when there's so much in flux?

1:35:01

The honest answer, a lot of it is luck. Yeah.

1:35:03

I mean honestly like uh I always say that there's a fiveyear psychological bias that you want to be invested today where you should have been five years ago. Yeah. Okay.

1:35:09

But I'll just give you a few quick examples.

1:35:12

Um you think about uh the people that were doing modular reactors.

1:35:14

I'm not a personal great believer and I think it's great for society.

1:35:17

We're not invested in them.

1:35:18

I did a lot of nuclear nuclear waste cleanup.

1:35:20

You agree with Sean on that.

1:35:21

You guys doesn't sound like you I hope it happens.

1:35:23

More solar bowl or uh it's happening and it's getting cheaper.

1:35:27

Like I'm not crap on solar but it's just it's not super exciting.

1:35:29

Um but but I'm a huge nuclear bull, you I've renamed it elemental energy.

1:35:33

Uh but but if you were developing modular reactors, you might have been like, okay, it's large base load power.

1:35:39

It's better than intermittency, but you weren't anticipating that there was going to be this data center buildup, which is at least part of the narrative.

1:35:44

Whether or not gigawatt scale, correct?

1:35:45

And whether or not that will actually see the light of day today.

1:35:49

They were able to capitalize and and draft off the hype of that. So that's number one.

1:35:52

They're thinking about bringing back Three-Mile Island, Diablo Canyon potentially.

1:35:56

There's a lot of big opportunities for a large scale nuclear.

1:35:57

You you look at people that are doing minerals and mining which is not a really sexy area but suddenly you're thinking about supply chain geopolitical conflict with China.

1:36:05

You're thinking about robots and magnets and things that have to go into my question is like you know if you're in if you're doing anything in mining or rare earth obviously great if you started a company 3 years ago and then you get to capture this momentum but will we see do you see potentially enough explosion of sort of demand uh and and new markets that you could still start something today?

1:36:26

You can always start something today and but you got to remember that I think some of the best successes are not just like execution.

1:36:33

You follow this playbook, but it's luck.

1:36:36

15 years ago, we started a high techch nuclear waste cleanup company to go after the defense nuclear waste from pre and post cold war bomb.

1:36:40

All of a sudden, earthquake, tsunami, Fukushima disaster.

1:36:44

We become the only US company picked for the cleanup to clean up this nuclear disaster. Right?

1:36:48

That became a boon for this company.

1:36:49

It was a total black swan for Japan.

1:36:52

A negative one, a total positive black swan for this company. Yeah.

1:36:54

Uh, today sail drone autonomous fleets of boats.

1:36:57

They started oceanographic research and all this kind of stuff. Bright orange ships.

1:37:00

The guy that's here, I don't know if you've seen him, Hondo Girtz. He's a big hulking guy.

1:37:04

The two of us are together.

1:37:04

It looks like the old poster of Schwarzenegger and Dvito.

1:37:09

And he's like, you know, I got a big strategic idea for you.

1:37:11

What if you paint these things gray? Yeah.

1:37:13

Instead of bright orange and all you open up to this defense market.

1:37:18

But that wasn't in their founding thesis of we are going to make a fleet of autonomous systems from Task Force 59 in Bahrain and expand to the rest of the world. Yeah. Yeah.

1:37:26

What what what do you think uh I mean you mentioned some of the other countries that you're investing in.

1:37:31

Um Japan, I think you mentioned Australia.

1:37:34

Uh what do you think the future of partnership between the United States and Middle East allies looks like? Huge. Explain.

1:37:42

You know, we we call this scitec diplomacy.

1:37:44

We brought onto our team maybe six, seven years ago Tony Thomas T2. Okay.

1:37:48

head of SOCOM, 90 people, 90 countries, 90,000, you know, all special operations.

1:37:52

Incredible guy, great entre into aerospace defense. Yep.

1:37:54

A guy that was on a board of one of our early intel companies that were focused on intelligence community was Brett Mcgherk. Mhm. Yep.

1:38:00

Brett just left the administration.

1:38:02

He was in Bush White House, Obama White House, Trump White House, left the Trump White House because he had put together the counter ISIS coalition.

1:38:08

And when Trump surreptitiously sort of pulled out from Syria, he abandoned the Kurds and he had built that allied nation with the Kurds and said that that allied force with the Kurds and said we're going to supply you militarily. He then resigned. Came back in for Biden.

1:38:20

His capstone deal was the Gaza Hamas Israel uh hostage deal.

1:38:22

John 20th left, joined us a few weeks later, company Middle East. We met with NBS.

1:38:29

We've met with Tanoon and ABZ Abdul Bin Zed.

1:38:32

I am so bullish about UAE.

1:38:32

Yeah, UAE is so ideologically righteous on being coexistence, all three major religions, you know, the Abraham Accords, Major Snee, uh, Tech Forward, Cleveland Clinic, NYU, John's Hopkins, uh, the Goo the Guggenheim, the Louve, major cultural institutions.

1:38:52

It's it's incredible and and and they're building it super fast, but they're building it thoughtfully.

1:38:56

And the ability to make a decision very quickly, high-tech, you think about G42 and some of these other things, they've decided we're not going to cast our eye with China. We're going with the US.

1:39:04

We're going to build data centers.

1:39:06

We're going to partner with the US and it's going to be at like giga scale, hundreds of billions of dollars. Super bullish about UAE.

1:39:09

Saudi I think is next both for normalization with Israel.

1:39:13

Uh they want to be in the defense umbrella of the US.

1:39:15

They are going to spend a lot of money on AI infrastructure and comput huge. Yeah.

1:39:20

So um so so UAE, Bahrain, Saudi next I think uh in the region, but of course Israel.

1:39:27

I mean it is a tech mecca.

1:39:28

Many of those countries realize it's really far to fly to Silicon Valley but if you can go to Israel it's a big deal.

1:39:33

Tel Aviv is there short of flight.

1:39:35

Uh our first two deals like I said defense focused Hamut Meridor who ran Palanteer in Israel.

1:39:39

We backed her with Shawn in a company called Kella. Great.

1:39:43

So Lux and Sequoia teamed on that and just really bullish uh on the region.

1:39:47

How do you think about uh how quickly information spreads today?

1:39:50

It feels like a category you know a decade ago you'd have a category that could be underhyped for a long time.

1:39:56

Now, somebody enters a space, they release a video and suddenly like a bunch of new people are pouring in.

1:40:02

Where where are you looking at this point uh just besides your own network for the the next founder that you're going to fund?

1:40:09

So, I have this as a flaw in my personality, which is, you know, I want to know everything that everybody else is talking about, but then I need to understand what's the white space like Sherlock Holmes, what's the curious incident in the dog in the night, the thing that people aren't talking about.

1:40:19

So, I'll give you one because it's unsexy and I've talked about it publicly. Maintenance.

1:40:21

Yeah, maintenance is the most boring thing you could think about, but here's the simple logic that I had.

1:40:26

It wasn't reactive to a quarter or even a year.

1:40:27

It was the basic idea that the cost of capital is going to rise. Y okay.

1:40:30

If the cost of capital rises and you're not funding low interest rate stuff. Yeah.

1:40:34

If you think about capex on a financial statement, you've got growth and you've got maintenance. Yep.

1:40:39

Everybody's been funding growth.

1:40:41

New data centers, new satellites, new military installations, new HVAC systems, equipments, hospitals, everything. Okay.

1:40:46

Now, if you're a CFO or you're a capital allocation committee or you're a board and you're like, "Do we really need to spend another hundred or billion on that?

1:40:53

Do we need another data center or can we maintain the stuff we have?

1:40:56

So I think that there's going to be a demand shift from buy the new to how do we maintain the old and that is going to be demand for preventative maintenance, early maintenance detection, robots that can go out into certain things and repair them.

1:41:07

So all of that I think is going to be a big wave.

1:41:09

That's the kind of thinking at locks that we're thinking about orthogonally.

1:41:12

Everybody else might be tacking here, but how do you find something?

1:41:15

Start making some bets and then 3, four, 5 years everybody wants to be in that space. Yeah. Fantastic.

1:41:18

Well, thanks so much for joining us.

1:41:22

Hey, come on the show again. Yeah.

1:41:24

Yeah, we'd love to go way deeper on a on a proper so much to talk about. Thank you so much.

1:41:27

And we're bringing in uh Delian as Bruhoff from Founders Fund, a co-host and co-creator, co-founder of Hillen Valley Forum.

1:41:35

Very excited to have him on the show for the what, seventh time.

1:41:39

Uh so let's bring him in.

1:41:42

Uh Jordy is posting amplifying the stream, pumping it up, pump up the numbers. Uh how we doing, Ben?

1:41:47

Can we get a little review of uh the stream is up, the internet's working.

1:41:52

Uh it was a fascinating I'll give you a little inside baseball here.

1:41:55

We brought in something called pop-up Wi-Fi to do this stream.

1:42:00

Uh and uh it does not look like something that would normally get through security at the capital.

1:42:04

Uh it's locked and only the TSA can unlock it.

1:42:09

Capital security police do not have the key that TSA has.

1:42:11

And so uh it was very tricky to get in.

1:42:14

They had to x-ray it a bunch.

1:42:16

Uh we couldn't get into this locked Pelican case that has a Wi-Fi router and a bunch of uh cell phone uh like modems in there.

1:42:22

Uh but we got it through and we are live streaming and we're very excited to have Delane coming in later.

1:42:29

Uh we also have Christian Garrett hopping on to break down the other third co-founder of of the Helen Valley Forum 2025.

1:42:39

And uh Jordy is tagging madly uh all of our guests, getting us into the timeline, promoting the stream.

1:42:45

And we have we have an absolutely stacked line lineup.

1:42:49

Uh we got Delian and Christian coming on, then Eric Lyman.

1:42:51

Lulu should be coming on.

1:42:53

A lot of repeat guests breaking down what's going on in DC uh today at Hillen Valley. And here he is, Delion. Welcome to the stream. TVPN Hill TVN. Let's go. the show. Let's go. How are you feeling? Good.

1:43:09

Um, you know, made sure to arrive here on Monday.

1:43:11

Got a little accustomed to the East Coast.

1:43:14

Realized I haven't, you know, switched time zones in like 3 months.

1:43:18

Weirdly the most brutal time zone. It is. Yeah, it's tough. It's tough.

1:43:20

But, you know, we started off the day strong.

1:43:24

Hamas protesters from the get go.

1:43:24

That's how you know you've made it as a conference.

1:43:27

This is the first time you've been a journalist. First time. Yeah.

1:43:30

And she That's when you know you really made it.

1:43:32

If somebody is disguising themselves as a journalist to sneak into your conference and protest on behalf of terrorists. Yeah.

1:43:36

What was Karp actually saying?

1:43:38

Was he being particularly controversial? I think he had anything.

1:43:44

Literally, he was like, you know, he was like talking about his book and they were like, "Oh, you're killing Palestinians." Okay. Okay. Yeah. Trump was asking.

1:43:53

Uh but other than that, uh how's the reaction been?

1:43:55

Uh what have the most important messages been?

1:43:57

Obviously re-industrialization is the theme, but what else is popping up today?

1:44:00

Yeah, I mean I think what's cool is like this is a week where, you know, we talked about this in a couple prior segments around the, you know, continuing resolution.

1:44:07

And so, um, this week the, you know, sort of big bill in Congress is the reconciliation transferring from basically, you know, sort of leadership into, you know, you know, congressional language that actually goes gets appropriated to individual program offices.

1:44:17

And so I think it's like a really fascinating week to have this conference cuz, you know, a significant portion of that bill was around ship building.

1:44:24

And then today we have panels on ship building with some of the appropriators that are literally by the way on the other side.

1:44:29

I've been boppinging back and forth between Capitol Hill briefing congressmen and then Congress.

1:44:33

And so it's just like there's something magical about it where this stuff is happening on like the perfect, you know, sort of week.

1:44:38

Um and then the other thing that's been fun is even for congressmen that uh weren't aware or not even attending the event, they've been like, "So do you know what's going on?

1:44:46

Like I have like a lot more Silicon Valley tech companies on like my briefing calendar this week than like ever before."

1:44:50

And I was like, "Well, sir, like I'd like to describe to you about this thing called the Hill Valley Forum.

1:44:54

We'd love to have you the following year."

1:44:56

So, I don't know, it just feels like an institution.

1:44:57

And then the, you know, other piece of feedback that's been fun is like um congressmen have even said that like this is a place where they get far more casual time and especially on a bipartisan basis.

1:45:06

You have tonight's dinner.

1:45:08

We have 17 Republicans, 17 Democrats, and it's extremely bipartisan, and it's totally off the record, completely casual.

1:45:15

If one person misses the dinner, somebody will write an article. Oh. left. Exactly. Right down the middle.

1:45:25

Sorry, you can't come in.

1:45:25

Somebody bailed on the other side. It's going to be equal.

1:45:28

Uh on the $150 billion uh appropriation.

1:45:31

Uh is that an update to what we talked about I think the first or second time you were on the show where you said, "Hey, maybe there's not more money coming.

1:45:38

Maybe it's not going to be a jump ball for a bunch of startups."

1:45:40

Has this updated your thinking?

1:45:42

Yeah, I mean I think it was sort of, you know, the the February bills were clearly like a pause.

1:45:44

I just like, look, we're not just going forward with what the prior administration did.

1:45:50

And even though we're very late in the game on passing this year's budget, we're just going to pass a contin resolution to put everything on pause and then lect is talking about the first trillion dollar, you know, sort of defense budget.

1:46:04

Um, since we last chated also, they pushed out the executive order on busy analyzing all the uh contracts and programs that are behind schedule and behind budget and, you know, sort of um, you looking at cancelling those.

1:46:12

So yeah, I think generally trending, you know, should all in the right direction, but I'll always continuously reiterate of just like this doesn't mean that there needs to be like unbridled optimism.

1:46:21

All of this is default going to Silicon Valley companies like a significant amount of that reconciliation package has a bunch of line items that are currently only possible to be served by traditional defense contractors and like the primes and so you know is there anything to read into when you see a really round number versus a very precise number?

1:46:39

Um the round numbers are when leadership are doing it.

1:46:41

The precise numbers is when the program office is actually saying like what you actually need.

1:46:44

But is one is one more bullish than the other?

1:46:48

If I see a if I see a very precise number and I'm like, "Oh, that's definitely happening."

1:46:50

versus the round numbers just like, "Oh, they just threw something out and they're going to figure it out." Oh, yeah.

1:46:54

The precise number is one to be more bullish on.

1:46:55

The reconciliation package is like great, but it's leadership saying like there should be approximately $150 like million dollars, you know, sort of sent towards, you know, sort of this package.

1:47:05

And it's like, okay, but like is that really is that really the right number?

1:47:08

like it happened to be exactly $150 million exactly on the dot is like what's necessary.

1:47:12

So there'll be some early in my career VC was like oh we we we we had our whole team run like a DCF we know exactly and the value of your company came back at $100 million and I was like there's no way that you actually have a spreadsheet that spit out perfectly seven zeros or whatever. No way.

1:47:27

Well, you know according to leadership it happens. It happens. It happens sometimes.

1:47:31

Uh how do how do you think about sort of forecasting uh government demand?

1:47:35

One of the one of the things that that was uh top of mind this week was $500 million allocated for like autonomous systems broadly felt low for a lot of people when you compared it to other categories.

1:47:47

Yet, uh Sean Maguiire's point was like if you kind of just as long as that number is going to go up over time, maybe it's good and it's a more efficient way to kind of deploy budget where because if you're like when you spend $5 billion this year, it's going to be spent pretty poorly.

1:48:01

But how do you think about kind of like forecasting government demand and how should uh teams think about it?

1:48:07

Yeah, I think you can sort of use the reconciliation package as your sort of like combination of TAM and KGER, right?

1:48:13

It gives you a sense of like what the current TAM is, but they're clearly indicating also what the Ker of that is going to be.

1:48:17

And so I think in some ways for defense startups and startups in general, you know, to go back to like the Peter Teals year to one philosophy, you want to monopolize a small market first and then grow from there over time.

1:48:27

And so in some ways if they were forced to spend $5 billion in a single year probably inefficiently and probably zero chance that it happens to be one provider.

1:48:34

There's no way that any startup no matter how great you are is ready to spend $5 billion in a single year.

1:48:39

So by default it's super disparate.

1:48:41

disparate. there'll be a bunch of different players which you might not necessarily want 15 ship building players like you know probably what's best for the country is like probably not one probably not 15 but probably like three that are constantly competing against one another right I think that's probably what happens like the launch provider world right if you look at um

1:48:55

last week they had announced the latest phase of national security basically you know launch contracts and you know SpaceX and ULA won as per you know sort of usual but they did introduce Stoke space and you know rocket lab and so it's like yeah I think that's probably like an appropriate sized pool and the equivalent on like you know sort of ship Um, so I think you can think of it as a TAM, but it's not guaranteed. Just like

1:49:12

Just like in any TAM in technology, you're not necessarily immediately going to capture it.

1:49:16

It's like, you know, VA had equivalent, you know, areas where there was some language around nuclear weapons modernization, re-entry testing, etc.

1:49:23

of, you know, sort of budgets that were in that same, you know, sort of dollar range.

1:49:25

But again, that's just like literally the first step of, okay, now that's going towards that program office.

1:49:30

Now you have to start thinking about what are the contracts look like, what are the actual missions that you're going to be providing for them, the hardware that you're providing for them.

1:49:36

But yeah, I think generally you know bull for defense tech that there's a whole set of you know sort of budgets now that in particular are very uniquely tech forward right so if you look at like the concept of like unmanned fighter jets and unmanned service vessels.

1:49:48

This reconciliation package is by far the biggest budgets that you've ever seen for those types of activities.

1:49:54

And obviously that is a particular area.

1:49:56

There's some in there that's like ammunitions and like you know army barracks like you know you know refurbishment things like that.

1:50:00

I'm not sure that like and roll is great at like army barracks refurbishment. Sure.

1:50:02

But like I think they'll probably be pretty great at some of this like unmanned surface vessel type activity.

1:50:07

And so it's really exciting to see like some of these TAMs be pretty big that are very clearly only servable by like you know this next generation of tech companies. Yeah.

1:50:18

Uh we got to get to Christian.

1:50:18

So last question or we want to let it go. Yeah.

1:50:24

Just just congratulations.

1:50:24

This is I I I said uh this is the highest density of absolute killers that I've that I've you know set foot in in a long time.

1:50:34

So I'm glad after I saw you guys' YC thing, I just like texted Cougen afterwards and I was like this at Hill Valley. It's going to be sick. Amazing. Good to see you.

1:50:45

We don't need any more parttime podcasters.

1:50:50

Uh let's bring in Christian Garrett from Hill and Valley 137. How you doing? Let's break it down. How's the day going?

1:50:57

What's the latest with you?

1:50:57

Is that your third or fourth coffee or are you on tea now?

1:51:01

Because you're you losing you're losing your voice. I'm I'm a tea guy. I'm um tea guy. I'm half European. Okay.

1:51:07

Uh and any way that I can dig at Delian by showing how strong the Europeans are.

1:51:13

I think one way I can do that is by uh drinking a lot of And you're also wearing a European watch today.

1:51:18

We got the Cardier Santos on.

1:51:18

I can neither confirm nor deny checks going on. It looks fantastic. How's the day so far?

1:51:28

Is it I'm sure it's been Yeah, it's been awesome.

1:51:29

Um I'm sure you've heard from folks all day.

1:51:33

You'll hear from more uh from founders, investors, um folks in office.

1:51:38

I know you guys will have elected reps in and out over the next few days and today.

1:51:41

Y uh the enthusiasm and excitement um is really really special.

1:51:46

uh this is the fourth year and just to see how big it is um is a testament to how much our ecosystem has changed.

1:51:52

You know I talked about earlier uh it was less than a decade 9 years ago that Palunteer sued the army for commercial preference and violating title 10 US 2377.

1:52:05

Um and today you know Palunteer is seen as one of the greatest partners and the army particularly is one of the greatest partners to Palanteer into our ecosystem. Uh it's it's incredible.

1:52:14

Apparently SpaceX sued as well and they use the same lawyers as Paler.

1:52:16

So whoever that has a lesson in that he's got a good uh got a good business going.

1:52:24

I know that the theme is re-industrialization.

1:52:26

What are the other conversations that are happening here?

1:52:30

What are the other subtopics that people are digging into? Yeah. Yeah.

1:52:31

I think uh within that right you can go all the way down the supply chain or value chain to you know rare earth elements and minerals.

1:52:39

Um, uh, we just had a panel recently with, you know, James Latinsky from MP Materials, Rafe Scoly from from Lyra.

1:52:46

Uh, talk about right place, right time with MP Materials. Right time. He's awesome. He's awesome.

1:52:50

When did that company start? Years ago, right? Years ago.

1:52:53

Oh, that company's been around for decades. Decades.

1:52:54

It's one of the oldest minds and they they took it over.

1:52:56

It's a great turnaround story. Oh, wow.

1:52:58

Um, one of our partners, Lower Carbon Capital, and Clay Dum moderated that.

1:53:02

Congressman Richie Torres is in that. Uh, that was incredible.

1:53:05

We then went all the way up to, you know, we had a panel with uh with Friedberg and Shawn Magcguire and Senator Todd Young on manufacturing which we hit on everything.

1:53:12

We actually talked about how energy and education are the key unlocks there.

1:53:15

Uh and then you go up to defense, right?

1:53:17

And and obviously has hit on this and you'll see more talks from Seronic and others talking about the work that all these defense companies and the existing primes are doing to uh shore up our industrial capacity.

1:53:28

So I think you've just seen the full gambit.

1:53:30

I know Jensen hit on semiconductors as well.

1:53:32

Yeah, Jensen's interesting because he's is I was asking this question of like is he a customer of reindustrialization or is he truly a reindustrializer? Oh, he's both.

1:53:43

And I think you see where Nvidia is going, right?

1:53:44

They're now selling full systems, right?

1:53:46

I mean, they're moving they move from just to GPU.

1:53:47

I mean, they're doing the networking, the cooling.

1:53:51

So, if you extrapolate where that company is going, um, and you look at where they are today 100%. You're right. They're on both sides. Yeah.

1:53:58

can't really be a trillion dollar company with just, hey, we just designed some stuff and then let TSMC handle the rest.

1:54:04

There's so much more about that company. Yeah. Fascinating, Jordy. Um, yeah.

1:54:08

I I'm interested more on uh who who on the on the on the hillside really gets it.

1:54:14

Richie Torres's names come come up quite a bit.

1:54:16

Uh, how many people like that does the valley need to or in order to, you know, continue to be successful, right?

1:54:26

right? because I feel like a big a big a big part of what's exciting about this event is is it because it's you know bipartisan it's not about this admin right it's about the next 10 years it's about the next 15 years the next 20 years and so uh how many people are are

1:54:41

you know we talk about this in Silicon Valley it doesn't take that many great CEOs to like transform an industry right sometimes just takes one right and so how many how many uh true allies do you think we need and and are are those people today or hoping, you know, next year we get more. Well, I mean, one

1:54:57

Well, I mean, one piece of that which is more of a meta point, but I think it would be great for government to have its own version of founder mode, right?

1:55:04

We need to get back to that within government.

1:55:05

Sean Sangard talks a lot about this and how that's something that's been missing.

1:55:09

And if you look historically, when we've had success, when we were really great at building, it was because we empowered individuals within government to own these programs and see them through.

1:55:16

Um, so I think no one knows the name of the person who's responsible for highspeed rail.

1:55:21

rail. I mean we Sean always talks about uh Admiral Rick Rover right is a great example of this person right I mean like we need these people again um now I will say today Congress uh there's a lot of champions in Congress there's a lot of people that get it they provide support they obviously draft policy they provide

1:55:38

cover um but what you really need more of are these kind of founders at the individual level from the program officers to the folks running these departments and so you know I think that will be a big unlock um and then ciring asking your question, right, within Congress, look at the folks here today, right? You have Senator Shaheen, um you

1:55:54

You have Senator Shaheen, um you have Congressman Richie Torres, you have Congresswoman Gabe Amo, um you have Senator Todd Young, um and then you have, you know, House Speaker Mike Johnson speaking later.

1:56:04

I mean, you really see across the board, both Democrats and Republicans, there are folks that understand the importance of this.

1:56:10

And you know, the last panel said this, like this is as bipartisan as it gets, right?

1:56:13

gets, right? like we want to have uh uh critical mineral and rare earth uh element uh dependence uh we want to get rid of our dependency on China there right we want to have redundancy there uh and a strong supply chain we want to have energy abundance right um and we

1:56:27

want to have a strong deterrent strategy and a strong military um and so Democrats and Republicans align on that and the tech industry is preaching something that is in of itself aligning and unifying and so I think that puts us in a very good spot um to try to build bridges and be successful. Yeah. Can you Yeah.

1:56:40

Can you uh I know you work with a lot of later stage companies, but uh can you share some best practices for government relations lobbying that you're seeing tech companies get it right? What are they doing?

1:56:51

Yeah, you know, I think what's interesting is um and I've talked a lot about this.

1:56:56

Um Mark Andre has a lot of great stuff on this.

1:57:00

You know, tech doesn't have a trade association and that's actually a very good thing.

1:57:02

Um so it is on the onus of individuals, founders, entrepreneurs, operators, the companies and the investors I think as well to spend time within government educating policy makers on various subjects where they're experts in.

1:57:14

Uh a lot of the work that you see here are from folks that do not sell to the government. Right?

1:57:17

There's no revenue to be had here. Right?

1:57:20

There's just educating and making sure that their industry uh is a recipient of good policy, good regulation, and good support.

1:57:26

Um, and I think that, you know, from from the first part, I think the best thing is like making sure you have these relationships with folks.

1:57:32

They are willing to take the meetings. Um, it's incredible.

1:57:35

It's it's uh and so I think that would be the first step.

1:57:37

Um, I think the second is also figuring out like where's the highest leverage thing that you want to focus on.

1:57:42

Like you don't want to come here and just take meetings for the sake of meetings either, right?

1:57:45

You want to be focused on something very specific.

1:57:46

You want to care about something very specific and that makes it easier for folks to to digest.

1:57:51

And so I think that's the other piece is like figuring out where your business should be focused on whether it's a potential contracting opportunity or something you want in a budget.

1:57:57

Um or whether it's just a specific policy or regulation that you care about.

1:58:01

So I think it's like first go build relationships.

1:58:04

Um go rely on your investors, go do this directly.

1:58:06

Like that's the way to do it.

1:58:08

Um and that's how our ecosystem is going to do and always has done it.

1:58:11

And then number two is figure out what that high leverage thing is.

1:58:14

And quite frankly don't go take the time in DC until you have that. Interesting. Okay. Cool.

1:58:18

Well, we'll let you get back to on a million meetings and panels. See you guys later.

1:58:22

Yeah, we'll see you later.

1:58:24

And let's bring in Eric from RAMP. Welcome to the stream.

1:58:28

Let's hear for Eric Limon.

1:58:32

Uh is has has your panel already happened or is it coming up?

1:58:34

It happened this morning.

1:58:35

It happened this morning. It was a ton of fun.

1:58:37

We were we were locked into the stream.

1:58:38

Um but uh give us the over was fired up. Yeah.

1:58:41

Give us give us the high level.

1:58:44

Uh what what is the pitch and uh how did it go? It was fantastic.

1:58:49

Look, I I think um for private companies, startups, whatever it is, for a lot of years, getting more from every dollar spent is just obvious, right?

1:58:57

You know, a dollar saved is not a dollar earned.

1:58:59

The average American business has an 8 and a half% profit margin.

1:59:02

So, a dollar saved is 12 earned. Yep.

1:59:05

You know, um the government is thinking about this.

1:59:07

Of course, there's a lot of tax dollars in, but the deficit is growing every year.

1:59:13

And so whether it's Doge and the folks there or other parts of the government, everyone is starting to think about um how can we start to apply modern tools to drive savings and in many ways ramp is at the forefront of it.

1:59:23

Um uh a lot of the payment systems that are used by the government from the treasury which doesn't require um at least in the past who was sending the payment, why did we send it, what was the purpose and additional payment?

1:59:36

Now they're starting to get put in to on credit cards.

1:59:40

They're still using old antiquated designs where you have one system for cards. Yep.

1:59:44

But your actual expense policy doesn't drive how these cards behave.

1:59:48

And so there's people who are able to go and use cards for purposes that are not really advancing taxpayer interest.

1:59:55

And so we we talked about this um both, you know, at a high level.

1:59:57

So Senator Joanie Erns talked about how she um she's approaching it, how the Doge team is approaching this.

2:00:04

team is approaching this. Um uh and then Keith and and I shared a little bit from the RAM context how how we is there a story that you're particularly drawing from of a more recent tech company selling into the government that's not in the defense tech obviously we all know the SpaceX Palunteer and all stories but uh at a certain point Microsoft must have said

2:00:26

hey we're going to try and sell Windows into the government or we're going to try and sell Outlook or Excel into the government uh but that's a long time ago it's a huge company are there other uh companies that aren't maybe government first but have developed best-in-class government sales functions that you look to or or as like interesting anecdotes. Are there other case studies that you've

2:00:44

Are there other case studies that you've uh heard about that are interesting?

2:00:46

Is there anyone out there?

2:00:48

It's I mean I I I just think um I mean a couple things I I don't think people realize the scale of how large the US government is. Yeah.

2:00:59

Between federal, state, local education. Yeah.

2:01:02

Um, one of the most mind-blowing stats that I learned is one in six Americans who work work for the US government. That's wild. It is huge.

2:01:08

And I think at some scale, if you want to go and and be a, you know, a scale technology provider, financial service provider, healthcare provider, you're going to work with the government. I just think so.

2:01:20

And and so one of the openers this morning um was a secretary of the interior, Doug Berg um who um you know he had started an an accounting software um uh company called um Great Plains.

2:01:33

He sold it to Microsoft and I think Microsoft is a great example of it. Yeah, totally. Yeah.

2:01:37

Um that's probably the best example that I can in terms of a government and and interestingly they're one of the big tech companies that never really blinked in their support of the government when there was that era in 2015 2014 where a lot of the tech companies were saying hey maybe we want to stay away from the US government for a variety of reasons.

2:01:56

So it's good to see that there's like a resurgence here.

2:01:57

uh in terms of like technically or not even technically but just like the sales process uh is that wildly different than a normal sales process or is it somewhat like just selling to a Fortune 500 company?

2:02:10

I look at it I mean not not to not to interrupt but I think that the dynamic if you're if you're a uh scaled up you know fintech company and you plan to be in business in 50 years like you said you know you're going to be working with the government at some point.

2:02:24

So, it's more about figuring out the right ways to do it early on and also not being, you know, understanding like always having urgency because I think that every American can get behind um can get behind efficiency, right?

2:02:36

It it it became political over the last, you know, 90 days due to Doge and stuff like that.

2:02:42

And like you said, one out one out of every six people works uh in some way for the government, then obviously that's going to get political.

2:02:47

But when I when I look at it, you know, it's just about how do you uh defense uh if you're if you're dual use or you're you know, primarily serving the private market uh or private companies.

2:03:00

It uh you can you can think I feel like a lot more long term versus the defense, you know, defense tech companies that are here and they're like if I don't get the government this year, I'm done, you know?

2:03:10

And so I think like having that I'm sure that sort of like long-term thinking around partnership with the government has driven a lot of your decision making. Oh for sure.

2:03:18

I mean look it's um I mean maybe a couple things.

2:03:22

I mean first I I I actually just think there's like a very I I think some of the story of technology I I I think about you know Steve Jobs's old famous quote of you know a computer is almost like a bicycle for the mind.

2:03:35

It allows you to go faster, do more, think at an accelerated rate, and ultimately achieve more.

2:03:39

Um, and so I I think it's not well, it's it's great that people are trying to modernize defense.

2:03:46

I think that there's a lot of people doing many types of great work.

2:03:50

You know, departments of veteran affairs, departments of of of whether it's like its education, interior, there there's people doing important work.

2:03:56

And I I think one of the examples that often I I think just makes clear and connects with people is you know there are um I think about a million um uh folks serving in in in armed services and they're doing expense reports too.

2:04:11

reports too. Y um and you take you know some of America's most courageous you people who were who were serving sacrificing a lot to do this and then you say you know what I'm going to make you do hours of expense report on a nuclear submarine for years and I was like what was that like you know and he was like a lot of paperwork

2:04:30

lot of paperwork I was like I can't believe you're you're 30,000 leagues under the sea doing paperwork but he was like yeah that was my don't get me wrong like it's like you should explain why but it's like actually like it would be great if a lot more of the work was to, you know, defending the country, um, going in in the VA, serving our veterans, whatever it may be. So, I

2:04:47

So, I think that there's like a a human and moral side to it.

2:04:50

Um, but but to the other question you asked of working with the government, in some ways, it's this was all like pretty organic.

2:04:57

I mean, there was a tweet um uh put out I think in February um that you know I I think there was 4.

2:05:05

there was 4.7 million credit cards issued for um I I think there's about half the number of federal employees and people were wondering where are all these extra cards and so a lot of cards were turned off and and at the time um you know we reached out to someone who

2:05:20

was a former customer um put us in touch and so it's early we're involved in the same process as as everyone and I think you you know, no matter who does it, I I I just think that the way I would almost describe it is people would find it ludicrous if our air force was flying with propeller planes in a jet age. And yet that's kind

2:05:37

And yet that's kind of what's happening with with the tools we use to, you know, make expenses, do our accounting, um, make sure add a stationation is clear.

2:05:47

stationation is clear. These are old disperate systems that you know I I think private industry has has has adopted tools like ramp lead in the forefront of it's integrated your expense policy drives what you can buy it does your expense report your accounting and so however it goes I just think countries be a lot better off

2:06:04

using modern technology yeah I mean the the the thing that I thought was fascinating is they couldn't actually turn extra cards fully off it was a dollar a dollar limit which is like system Even speaking of that, like you know, you'd think, okay, let's go and turn a limit, you know, to zero or $1 or whatever it may be. I've heard stories

2:06:23

I've heard stories of individual people because of the way the portal was designed spent 4 days going one by one job.

2:06:33

It's not as because no one has done something like this, but it's like when when you look into um these things that you think should be trivial are very hard when you have old systems like this. Yeah. It's amazing.

2:06:44

Well, we'll let you go and we'll bring in co-founder to dig deeper into the bowels of the financial system.

2:06:50

Uh, welcome to the stream, Kareem. First time itself. Good to see you. Good to have you. Welcome. Welcome.

2:06:59

We're getting to see supplies. Yes, we do.

2:07:02

Uh so we uh yeah so obviously we're talking about uh getting the entire government on ramp and then getting every country in the western world on on ramp uh one at a time.

2:07:13

Uh have I was talking to the Anderal guys about some of the integrations that they have to do into like these antiquated systems just to do communications because they want their drones to play into the mono systems.

2:07:25

Have you started even digging into like what the technical standards are that are running?

2:07:31

We we we've talked to folks about like the Swift system and and you know stable coins but then there's also like the overnight payments thing.

2:07:36

Uh like where do you even start with that?

2:07:40

Is it a GPT query or do you start talking to people like how do you build your your knowledge as a technical mind in how the government runs?

2:07:47

Because I I was telling Jordy I want to talk about the the the running the government on rampant more just because like I don't think most people know how expense reports work in the government.

2:08:00

Like I don't think it this is seeing like is it technically feasible. Yeah. Yeah. Yeah.

2:08:03

Uh I mean I was it was crazy even yesterday I was hearing a story of someone who spent three years with the government and filed an expense report on their first week and only got the check back after they left. So three year delay. It's kind of crazy.

2:08:17

That's I mean think about in in in the you're at a company and you file an expense report and the company says yeah we're going to pay you back for this.

2:08:25

Then you don't get it for three years.

2:08:26

You would be you would be Yeah. Yeah. Yeah. Interest.

2:08:29

But also, it's just offensive, right?

2:08:30

It's not it's not nice to an employee who's, you know, uh, you know, to to basically take uh take their their funds for such an egregious amount of time. So, it's kind of crazy.

2:08:41

It's basically companies and government in some cases using uh their employees as a bank.

2:08:46

Like that's kind of what a bank is supposed to do, like front the cash so they could do your business and eventually pay them back. Yeah.

2:08:53

And like to your point on the the complexity of those systems, I mean one of the first thing I did when we started on ramp is try to understand how a works. Sure. Totally.

2:09:01

And it is like absolutely mind-blowing.

2:09:03

the the really boils down to very basic CSV files, Excel files almost that um every single entity puts together, constructs and at the end of the day they get shared through some system and there's some computer sitting somewhere that's reconciling these files together.

2:09:23

That's why it takes so long to send money is like all these systems run in batch uh take a full day to get access to that to get access to information and be able to reconcile it.

2:09:33

And you got about eight of those, right?

2:09:35

You got one for um like bank-to-bank payments. You got some for Yeah.

2:09:40

I mean really the way people used to file expenses is they used to submit their uh credit card statement that doesn't connect at all to uh the receipts that they have in the their inbox and then you have to wait an extra day before you find out that you actually forgot to uh submit the receipt that you wanted to submit for the the restaurant that you were at.

2:09:58

But I mean I think if you connect these systems obviously you can move a lot faster.

2:10:02

Um talking to people in the government I don't think they even know what they're supposed to do.

2:10:08

So, a lot of them just end up uh either not filing expenses or they get a card with no controls and they're lucky if they have it then they share with their friends and who knows what what the money is being spent on but yeah one step at a time.

2:10:20

Do you know much about like the counterparty?

2:10:22

Obviously, Palunteer uh pioneered like the forward deployed engineer because Sham Sankar was telling us the first time they sold Palunteer for onrem installation, the team on the other side, a a a software developer, tech person, IT person who worked for the government uh installed Palunteer on a box with like 4 gigs of RAM and they needed 16 or something like that.

2:10:46

Uh and we've seen with Doge folks like Luke Ferriator are going in.

2:10:49

You could see Luke Ferriator in another world like working at Ramp or working at Palanteer or working at any of the the the high growth high very strong engineering culture companies.

2:10:57

Um do you think that there's a need for America's best and brightest to kind of do a tour of duty as maybe just an insane IMO level software developer in the government?

2:11:10

Even if that takes away from your pipeline, I'm sure 100% that would be great.

2:11:14

be great. I mean this is uh a company that we all have a stake in the equivalent would be yeah that's a good point we're all American right get a equity stake in the government like I want the government to run well we all

2:11:28

win if we we're operating more efficiently we're making better decisions and we all pay less in taxes so no it's it's funny efficient spending which you know ramp is focused on non non-payroll spend right and so payroll spend gets political really quickly Right. We talked about this with Eric

2:11:44

We talked about this with Eric briefly where yeah, if you're on the government's payroll, you don't most people don't want to be off it, right?

2:11:50

Like they have a job, they've maybe been doing it a long time, but non-payroll spend should be the least political thing ever, right?

2:11:56

It should be like we should spend as little as possible and the dollars that we do spend should every single one down to the penny should be spent um efficiently.

2:12:04

Um what what what are your other kind of reactions?

2:12:09

How much how much are you spending time here at the event versus, you know, meetings around town?

2:12:14

I mean, the the the event is taking another form this year.

2:12:19

It seems it's a lot bigger than it used to be.

2:12:21

And the level of excitement is is incredible.

2:12:22

I think it's uh the first time that I felt that uh government is really trying hard to modernize, build bridges with um companies in Silicon Valley, New York and and other places.

2:12:36

So I think I think people are on the same page that yes, we we do need to spend less.

2:12:40

We do need to introduce technology to to help us.

2:12:41

And look, with with a lot of the advancements in AI, some of the problems that seem too intractable now, you could just just throw your massive database into an LLM and you can wrangle it that way.

2:12:54

So like we we got better tools now to to do the work.

2:12:57

Uh a lot of people are excited about it.

2:13:00

So we'll see what we can I mean, frankly, there are a lot of founders that are here thinking about very specific regulation or deregulation.

2:13:08

Uh, obviously like nuclear energy is the biggest one that is very concrete.

2:13:13

Make speed up the time to get a new reactor design approved.

2:13:15

Is there anything like that in finance? What is it?

2:13:19

Give us some of the history.

2:13:19

What's the good and what's the bad?

2:13:21

It I mean it it's everywhere like money transmitter licenses is the most basic one today.

2:13:26

To move money around uh you need a license.

2:13:29

But you not only an American license, you need a license in every single state, which is kind of crazy cuz they're all looking at the same things and making sure that you're abiding by the rules and like the rules are quite similar, but it's kind of crazy.

2:13:42

I I remember having to sit down in a room with uh Char on our team who who helped us do a lot of that work and there was a stack of papers this thick and I just had to sign one at a time. No way.

2:13:54

It's like I read the first like I know what this is about.

2:13:56

I read the second one, they're very similar.

2:13:57

And at some point I'm just like Like I'm already I'm already all in. Yeah.

2:14:00

You're trapped in a room. There's a cup of coffee. He's a go sign. Yeah.

2:14:03

Um how how has it been when when you look at uh sort of incumbent financial services companies?

2:14:10

A lot of them have had I'm imagine a large presence in Washington for a long time. Yeah.

2:14:14

You imagine RAMP ends up with with a you know a fairly big office here at some point.

2:14:20

How do you how do you look at that?

2:14:22

I I imagine you've been taking trips here.

2:14:24

I know you've been coming to Hill Valley, but uh is this a place that you you and the team expect to be a lot more? Would love to.

2:14:32

I mean, it would be great to to uh put our best resources forward and and try to help, but I honestly think about it the same way I thought about uh a lot of the products that we build.

2:14:42

I think it'd be a win if people spent as little time as possible in them. Yeah.

2:14:45

And more of the work is being automated.

2:14:47

I think part of the the problem that you have uh in and around Washington right now is like the incentives are so misaligned that you have incentives to like drag projects on.

2:14:57

They cost massive amounts of money. Yeah.

2:15:00

Uh any little change that you want to do is also like another massive bell.

2:15:05

And like our our hope is to just build great technology and hopefully if we do that if we do that well, we don't need uh massive sort of like time and and people investments to get them to work.

2:15:16

Like technology is just doing the job.

2:15:18

No, I was talking to Eric too that the thing that stands out to me is is ramp is playing in decades and there's a lot of founders here that are like if I don't get a program of record in the next two years, like I'm done. Yeah.

2:15:27

And I think RAMP's position is being able to think long term.

2:15:32

There's very pressing problems that we have right now.

2:15:33

problems that we have right now. you know, spending being being one of the biggest, but how do you kind of zoom out and be like, you know, you know, in in the fullness of time, I imagine ramp and and the government will have a you know,

2:15:46

very meaningful partnership and and it's about finding the kind of right ways to do it in the beginning without understanding that you have tens of thousands of of happy customers and you got to make sure that they're like, you know, continuing to get uh resources and attention. So, well, that's fantastic.

2:15:59

So, well, that's fantastic.

2:16:00

We'll let you get back to the Thank you so much for coming on. Come on again soon.

2:16:04

Uh we'll have Ara on uh probably next week at this point.

2:16:07

But uh great the rotation. And let's bring in Josh. You got a minute. Come on down. Yes. Look at look at that. Fantastic. [Laughter] Yeah.

2:16:22

So Steman uh we ended up on the same flight for those who didn't see.

2:16:27

And uh Steman Simon spotted us because I had a huge ramp logo on my back. Jack is outstanding. It's fantastic.

2:16:34

Uh it's great to see you.

2:16:37

Yeah, great to see you, too.

2:16:38

Where'd you get that, though? We made it.

2:16:41

Yeah, this is a one of one right now, but we will be multiplying them soon.

2:16:45

We'll get our people will talk to your people.

2:16:46

Well, every guest will get will get one.

2:16:48

That's the thing people understand the LA street wear scene. Yes.

2:16:51

Like so far away from tech. Yes.

2:16:53

You can get super high quality stuff very well. Totally.

2:16:55

So, I saw that and I was just like perfect. Yeah. Yeah. It was awesome. Um so, yeah.

2:17:00

How's the conference been?

2:17:02

You're you're probably one of the few tech founders here with real DC experience.

2:17:07

When did you first go to DC?

2:17:09

When did you first get into politics?

2:17:11

Take me through your journey a little bit. Yeah.

2:17:13

So, you know, I started my career doing uh expeditionary stuff as a military officer. So, two tours in Iraq. Wow.

2:17:19

Um one uh my first tour I was at a unit down in uh Virginia in southern Virginia.

2:17:27

And then my second I came up here to a to a to an intelligence agency here in DC. Yep.

2:17:31

Um and honestly it was it was 20 I think I showed up in like 2011 and it was like peak Obama and as a military officer in DC you kind of you were definitely the help. Yeah.

2:17:45

You know you'd like go out to a bar and like girls would be like oh what do you do?

2:17:51

Oh you're not some like staff director on the hill like you know thanks. Get out of here.

2:17:54

Um yeah but it worked out. You have a family now. Someone liked you. Yeah, that's true. It's great. That's true. No, it was good.

2:18:00

So, um, did that got out, went to Silicon Valley. Yep.

2:18:04

And then, yeah, got a phone call from an old boss after, uh, President Trump won election the first time during the transition.

2:18:11

He's like, "Come help me out on transition, White House transition." Sure.

2:18:16

And I came and, uh, just didn't leave. He asked me to stay.

2:18:20

I was a National Security Council staffer in the White House for four years. Fantastic.

2:18:22

What were the top what were the top uh issues then and how have they evolved?

2:18:27

Yeah, so I think the biggest issue uh in the unclassified space was telecom technology.

2:18:32

This is Huawei I assume 5G. Exactly. So 5G.

2:18:34

So this was like one of the big issues that I you know owned for four years.

2:18:38

So yeah, think of it like if you were in the middle of the cold war to go to the Russians and be like, "Hey, can you build out the electrical grid?" Yeah. Yeah. Yeah.

2:18:49

Oh, of course, my friend.

2:18:49

of course have the best electrical grid for you.

2:18:54

That's a fantastic Russian question. Don't worry. Yeah.

2:18:56

And you know, it's very clear that like and there's there's Wall Street Journal journal articles about this like the Chinese in Africa with Huawei, they just use it as a spying tool. Yeah. Yeah. Yeah.

2:19:06

So it's like why would we have those people build the American telecom infrastructure?

2:19:09

Why would we have them build the telecom infrastructure of our Five Eyes partner? Yeah.

2:19:12

Like London, Australia, other places.

2:19:16

So yeah, I think that was probably the biggest.

2:19:18

And where do where do we stand today with 5G?

2:19:20

I see a 5G icon on my phone sometimes.

2:19:23

Is it real 5G or are we behind?

2:19:26

So interesting you should say that.

2:19:28

You know, a bunch of the companies kind of raced to brand 5G as like here when actually the quite there. Right. Exactly.

2:19:35

So I think a lot of that stuff's been rolled out and being rolled out.

2:19:38

You know, the big challenge is that America's a big land mass. Yeah. Yeah. Totally. Right.

2:19:43

So um I'm guessing we're probably mid roll out.

2:19:46

You'd have to talk to actually you guys should have Brandon Carr the FCC chair. Oh yeah. Yeah. I met him a few times. Yeah. That'd be great. Exactly. He's great.

2:19:53

So he'd be able to tell you like what percentage if you put a gun on my head and you're like take a guess.

2:19:58

I'd say like 65% or something. Um because it's a race. Yeah.

2:20:00

So the theme's reindustrialization, but uh in terms of what you do uh what are the more interesting sub themes going on?

2:20:06

Um I'm sure you're excited about restoring manufacturing, but there's other stuff top of mind. Yeah.

2:20:13

Spain power outage and explosion of Northwork Grumman missile man, you know, manufacturing and testing facility. Yeah. In the past week. Okay.

2:20:22

So, like there's this Oh, yeah.

2:20:24

You think that was an attack? So, here's the thing.

2:20:26

Do I think it's an attack?

2:20:28

I'd say it's like tinfoil hat. Get the tin foil hat. Here's the problem.

2:20:33

No, I you look at the top five like uh you you list out like the top 10 facilities that the United States and our allies use to manufacture weapons. Yeah.

2:20:44

Half of them have had catastrophic events in the past 2 years. So I don't know.

2:20:48

Does that seem like a coincidence to you? Yeah.

2:20:50

In the military we used to say like once is a tragedy, twice is a coincidence. Yeah.

2:20:55

Three times is enemy action.

2:20:57

So like the numbers big and yeah they're like oh these things go boom but like let me tell you like it is 10 plus years old unclassified you have cyber actors going out and uh modifying safety systems to tell operators that things are operating within the right parameters so that they blow up.

2:21:13

Yeah it's well it's well established that western you know uh groups have have tried to meddle with Iran's you know uranium enrichment.

2:21:23

Why would they why would the adversaries not want to do the same thing back?

2:21:28

It's just this is what warfare looks like.

2:21:30

And the fact that we don't know and I'm not saying it is or it isn't.

2:21:33

What I will say is every single person out there building these types of facilities today or running them now like needs to have the capacity to monitor them 24/7.

2:21:44

Otherwise, you're not going to know.

2:21:44

And so it's like what are you actually building for?

2:21:47

Like you're building so that on the day that things actually kick off, you'll finally figure out if you built a defense company or not. if it survives.

2:21:54

I I want to talk a little bit more about the shape of your business today.

2:21:56

I embarrassed myself as a podcaster.

2:21:59

You know, we try to be experts in everything.

2:22:00

Uh but I completely botched the understanding of your company.

2:22:04

Uh and so how much of it is consulting driven?

2:22:07

How much of it is product driven?

2:22:09

How much of it is SBIR uh program of record?

2:22:12

The the stuff we hear in defense tech.

2:22:15

Give us a give us a a rundown of where you are today and where you want to go.

2:22:18

Zero consulting, zero government, 100% private sector. Interesting. It's a SAS offering. Okay.

2:22:24

We come in and protect an industrial facility against cyber attacks. Okay.

2:22:28

So, we do that by installing sensors in the facility.

2:22:30

And then we've got a software layer that's collecting essentially anything that generates data. Got it.

2:22:34

These things are already generating data on like a big like you're looking for patterns, right?

2:22:40

We're looking for patterns.

2:22:40

We're looking for the absence of certain things.

2:22:42

We're seeing like, hey, what process is running in this place? What's talking to what? Yep.

2:22:46

And we're basically the first company to actually take every single thing that's generating data on an industrial infrastructure and take that information and look for threats. Yeah.

2:22:53

We we we talked to the founder of Chain Guard looking at maybe supply chain attacks.

2:22:59

Uh is that something that's completely complimentary or in some ways competitive to each other?

2:23:03

Yeah, we're trying to do a deal with them right now. Okay, cool.

2:23:05

Yeah, we're live by the way.

2:23:08

But uh but we'd love to see it.

2:23:08

We love we love companies working together.

2:23:09

My co-founders meeting with them like right now. Fantastic.

2:23:13

So, hey guys, switching switching gears a little bit. Yeah.

2:23:15

How important is it that Hill and Valley is bipartisan?

2:23:19

That's been something that, you know, we're we're uh Delian and and Christian.

2:23:23

Your feed typically isn't really bipartisan.

2:23:26

No, but but in the context of if you're a serious uh technology company and you want to be around crushing it the next four years and the four years after that and then the 10 years after that, right? Totally right.

2:23:38

Um I I I feel like uh and you I'm sure got to experience the sort of back and forth nature of Washington, but when it comes to um you know uh talk about uh how how you think Hill and Valley can kind of um evolve from here from your perspective as somebody spent so much time in Washington. Yeah.

2:23:57

Here's the reality is that obviously like I spent four years first day to last day in the Trump in the first Trump admin and was never going to be befriended by people on the left just because of that.

2:24:07

They didn't have to know me.

2:24:09

All they had to know was that piece of information and like I was just never going to have an opportunity to even talk to them. Sure. Um I do have friends.

2:24:16

I wouldn't dare mention who they are that are on the other side of the aisle.

2:24:19

I wouldn't want to, you know, I wouldn't want to put them in a in a in a spot. Yeah. Exactly.

2:24:24

But like there's good people on both sides.

2:24:26

Um, and I've done a lot of good work with folks, you know, in the in the Democrat party.

2:24:30

Um, and so I think that you want to find people that want to solve the problem that you're solving, right?

2:24:38

And that can be any number of reasons.

2:24:39

It's because you're going to put a factory in their district.

2:24:41

It's because they care about an issue because they're on a subcommittee.

2:24:44

And like you hope, and I would encourage folks to just look for those folks.

2:24:48

They'll be on both sides.

2:24:50

Um, obviously, uh, you know, part of it is just like the brand that I've built coming out of the place that I came.

2:24:57

I, you know, I'm talking to folks that I know and that's what my feed looks like for that reason.

2:25:00

feed looks like for that reason. Y um but yeah, I mean it's part of it is just that's you know that's how yeah you I mean you mentioned you're entirely B2B no B toG yet or uh are we properly resourced on the cyber security government like huge fight because you

2:25:20

know we know about Palunteer we know about some I mean Microsoft sells to the government but is there a cyber security champion that sells to the government right now who who who should we be looking to yeah not really I Some of the solutions in the space are okay. They're They're not great.

2:25:34

You buy them and then you have to like put a bunch of people on top of them. Sure. Sure.

2:25:37

Um but yeah, look, we're in some talks with some interesting folks.

2:25:45

with you know some of the folks here in this space and I just think that that's probably the most critical thing for us to think about from a security perspective because I want us to be able to sustain operations on day one or day two or day 10 or day 50 of a conflict because that's going to make it more likely that we're going to be able to stay in the fight and win. Yeah.

2:26:07

And if we can't like it's a huge problem. Yeah. Yep. That makes sense.

2:26:12

Well, uh, should we let him questioning fantastic jumping on you back at the Yeah. Bill, come on. Give us an update.

2:26:23

You haven't been on the show in weeks. It's been far too long.

2:26:27

Gentlemen, we got Phil from Dra in the studio in the Temple of Technology in the capital of Great. Great tie, by the way. Is that a tie? What's on?

2:26:34

I thought it was a unicorn.

2:26:36

Actually, it is Mughal Conquerors.

2:26:38

I was recently in London. Okay.

2:26:41

took a trip down Savo, walked into Drakekes and said, "You know what?

2:26:44

That six of six, you know, yes, only six made tie, you got to have one.

2:26:52

You got to meet the other five guys who wear the same tie." So true.

2:26:53

I was thinking about this. Let's get a group check.

2:26:56

Let's get a group, you know, Patrick Baitman style.

2:27:00

Like, you know, let's see Baitman's card. Yep. Popular in the '90s.

2:27:02

I'm thinking we're going to be bringing back ties. I love it. Let's see.

2:27:05

Uh, we've talked about your business before.

2:27:07

uh it feels like mostly B2B selling into defense tech companies, selling into uh uh hard tech companies.

2:27:14

Uh what is top of mind for you here?

2:27:17

Obviously, it's a great event, good to meet people, but is there uh is there a particular agenda item that you think is important to highlight at Hill Valley this year? Absolutely.

2:27:27

So, yes, we sell into uh airspace and events, automotive, agony, construction, maritime recently uh to be announced uh soon, but uh closed a maritime deal, which is very exciting. Congratulations.

2:27:37

There is a very very critical lack of discussion around the American worker. Sure.

2:27:43

You know, we the average age of the American manufacturer is 55.

2:27:47

Over the next 5 10 years, we're losing a lot of those folks.

2:27:49

And with that critical tribal knowledge that without writing down, institutionalizing, capturing in some way, we are going to see an immense loss of our ability as a nation to produce.

2:28:02

And so there, you know, I I've said this before, I'll say it again.

2:28:04

You know, we have spent billions of dollars on environmental conservation.

2:28:07

We have spent zero dollars on tribal knowledge conservation as the country.

2:28:10

Um, this is something I'm advocating for from a policy perspective.

2:28:13

You have a hot take on AI not disrupting your business or not really disrupting uh the I I I guess like the American worker.

2:28:21

Can you unpack that a little bit and take me through how you see AI changing the way we uh design and manufacture things in America?

2:28:30

So little bit of a complex uh perspective I guess.

2:28:34

Um when you look at what LLM are useful for generally right people will throw them at generative tasks but when you look at what LM have been trained on is more broadly like the internet.

2:28:46

the internet full of forums and all of this context and context is key. Yeah. Right.

2:28:51

And what you do not have in those LLMs is the context of what you need made the specs of it uh and how to actually do it because kind of like what I mentioned earlier, it's tribal knowledge.

2:29:03

And by that virtue, it means it wasn't written down anywhere.

2:29:07

And even if you like even if it was written down, your scan is probably private.

2:29:09

It's not just out on the internet, not crawable like you know some sort of private database. Interesting. Exactly.

2:29:13

And so while LM are useful as a technology, you need to put them in a position to aggregate, contextualize, and then leverage critical information that is not, you know, in a LLM that open AI might have been able to train on.

2:29:27

So, uh, you know, I think if you were ever going to see AI actually, uh, disrupt manufacturing, you're going to have it, you're going to have to have a way to embed it within the workflow and infrastructure of an existing manufacturing facility and make sure that you are able to well integrate it into the flow of folks who are not super techsavvy.

2:29:46

That's where are you bullish in terms of AI and manufacturing?

2:29:50

I can imagine we've seen those reports that like, oh, I I emailed a Chinese manufacturer, a European manufacturer, and an American manufacturer, and the Americans and the Europeans didn't even get back to me for a week.

2:30:01

That feels like at the very least you could just have a chatbot that takes your order and gives you some data.

2:30:06

What's about um that specific problem is the problem of quoting complex, not really AI LLM.

2:30:10

Um, people have been doing quoting software for a while.

2:30:14

It's really computational, geometry intensive, generally pretty complex.

2:30:18

Um, and so companies like uh, you know, paperless parts will or or zometry will like help you with this.

2:30:25

Um, what we're describing there isn't really like a an AI problem.

2:30:28

It's a like work culture problem generally.

2:30:32

Like we as Americans work very very hard, but the the Chinese have the underdog mentality.

2:30:38

They've been hungry for 30 years.

2:30:40

They've been on the come up.

2:30:40

you know, we what what we're running into is that 1991 was a 1776 moment for China, you know, for you know, specifically 199.

2:30:50

So, basically for 50 60 years from 1945 to 1991, we were in the cold war, right?

2:30:57

And so we had this, you know, global battle of, you know, the west versus communism.

2:31:01

But is 91 different than 89 follow the Berlin wall? Why 91?

2:31:06

I say 91 generally, you know, either one.

2:31:08

one. sort of like that marker of when we basically said the west has won global American you know hijgemany has won you know we can sort of like rest on our laurels very similar to beginning of the Clinton era yeah exactly you know NAFTA and all that stuff we basically said

2:31:21

let's pick a couple of nations to offshore our production to globalism is going to win let's pick China Japan Korea offshore all production you know fund all that infrastructure and then you know just trust they'll have our best interest in mind very much like this industrial colonialism like our own

2:31:36

version of it so if you look at historically you know you had the global power do that set of colonies and then get very uh you know comfortable and think you know it's the end of history we've won what's happening with China is exactly what happened in 1776 now where we you know have basically seen China

2:31:54

say you know what you know Japan and Korea you want to play with the US fine you know just like Australia and Canada you know pay ties to the vassal state or to to the to the mother ship um fine right but China is now saying, you know what, we're not going to play ball. We

2:32:08

We are going to go, you know, 1776. We are on the come up.

2:32:11

So, there's that underdog mentality of one generation, two generations of 30 years of that baked into the culture of the Chinese manufacturer and that's where we're fighting against.

2:32:20

Not talk about uh do you think there's enough conversation at Hill Valley around just labor in general?

2:32:26

Cuz I imagine like part of your thinking is like who's going to be using my product in 20 years, right?

2:32:30

Like that's a big question and and it's one that's interesting because it actually does feel like there's less direct ways for private companies to develop the next labor force for manufacturing, right?

2:32:44

It's like yeah, individual companies can train people. Yep.

2:32:45

You can h try to, you know, poach people from legacy firms, but it does feel like an area that the government can have a a tremendous impact.

2:32:53

tremendous impact. Are you hearing conversation uh so far throughout the event on that or or should certainly a little bit um but I would like to see more a lot of technology brings the top up and so you see this distribution of technology at manufacturing companies this is always you know always been the case and so the companies with the most

2:33:12

money all the enterprises the Lockheeds the Toyotas the Fords you know all the big guys can just dump money on the fanciest you know AILM stuff but the key to saving the American industrial base isn't just making the top most, you know, wealthy companies have more and more advanced technologies and having like a 99% 1% split of that distribution technology. It's bring the bottom up.

2:33:31

It's bring the bottom up.

2:33:33

And so when you talk about like the labor base, what I'm starting to hear folks get is, you know, this is and something that I deeply agree with.

2:33:38

We don't want cheap labor.

2:33:39

Like we don't want bugman cheap labor. We want smart labor.

2:33:43

And so that's why, you know, tools like us, tools like a bunch of other things out there are geared towards saying, "Hey, we are not just going to radically improve quality of life for the modern manufacturer.

2:33:53

We're going to build something that makes people want to go into this job because of how cool and modern it is."

2:33:58

Like, you know, people love building, software engineers love building tools for other software engineers.

2:34:04

And there's this flywheel effect and positively reinforcing feedback loop of cool tool, cool tool, cool tool.

2:34:09

When you start doing that for production, you end up having younger folks saying, "That looks super cool.

2:34:16

SpaceX has all these cool tools. That sounds awesome.

2:34:18

Let me go work in that facility."

2:34:20

And so government um yeah, SpaceX is actually an interesting example cuz didn't didn't their uh their warehouse management system like spin out as its independent company or something? Uh no, not exactly.

2:34:30

It is uh people have it is like very very common for like somebody to work in this like thousand plus software engineering org.

2:34:37

They have this uh internal software they call uh warp speed. Okay.

2:34:40

Um, warp speed, warp drive.

2:34:42

It is, you know, fairly sophisticated.

2:34:45

Um, and you'll often have like somebody who was at SpaceX fairly early on that team say like, I'm going to do this and productionize it.

2:34:50

And then they like spin out. There's been like five.

2:34:51

Yeah, there's been a couple other they're fine, but you know. Yeah.

2:34:57

Anyway, Jordy, uh, any other questions?

2:34:58

Should we back to the conference?

2:34:58

Thank you so much for stopping by.

2:35:01

If Aaron's out there, you want to send him in or anyone else?

2:35:05

Well, I think I just saw him. Let me Okay, great. Yeah.

2:35:06

Yeah, grab him cuz I think he was hanging out for a little bit and we got to bring him on.

2:35:11

We got four more people, maybe five more people on the guest list. Ben is sweating.

2:35:16

He needs a bathroom break. Should we take five?

2:35:18

Can we go to Can we go to a break?

2:35:21

Uh, we are going to take a 5minute break, folks. Thank you for watching.

2:35:25

We'll be back in five minutes. Have a good one. Thank you. We're live. GBPN.

2:44:15

We just took a quick break. Got another coffee.

2:44:17

We are in the capital of the capital of America today.

2:44:19

This this room is the capital of the capital today. That's right. Today. That's right.

2:44:25

It's the center AI power and we're here with Aaron. Been on the show before.

2:44:29

Great to have you in person.

2:44:29

Camera was a little shakier last time. So, I don't know. Oh, yeah. You were walking around.

2:44:35

Shake your camera a little bit as you walk around the floor to simulate what it's like to be in the trenches. Yeah. There we go.

2:44:40

Uh, but just so everyone's familiar. Big moment. Big moment for you.

2:44:44

Uh, you've been banging the reindustrialized drum for years.

2:44:46

Uh, it's the theme of the entire event.

2:44:49

Uh why don't we start with uh your reaction to Jensen's speech earlier on high level AI but then AI factories and and how you're thinking about that.

2:45:05

I mean it's amazing right like he's obviously doing a little holding.

2:45:07

All right as close as possible. Okay. There we go.

2:45:12

Um no it's it's it's amazing right?

2:45:15

like you have the most powerful man in AI sitting up there talking about bringing American manufacturing back, right?

2:45:21

And like the role of AI converting electricity to now like tokens for for everything.

2:45:27

It's it's a really phenomenal way to kind of like wrap wrap the story, I think.

2:45:31

Um and converting that into real outcomes, right?

2:45:37

No matter what the industry is.

2:45:39

Um with the focus on obviously like manufacturing, right?

2:45:42

And yet you've often said that AI is not a uh a oneshot solution for manufacturing. Break that down. So all right. Yeah.

2:45:50

Uh when people get a chance to like go through the the transcript, watch him talk or whatever, right?

2:45:55

Like there are key things that he kind of mentions you can pick up on, right?

2:45:58

Like we can do this stuff in anything that has to do with like text and images today, right?

2:46:03

Like you might not want to diagnose a disease because there's no room for error there. Yep. Yeah.

2:46:08

Manufacturing and like all all of his talking about like getting to physics faster.

2:46:12

This is kind of like how we do these things eventually, right?

2:46:15

Like it's a matter of computing accurate real-time physics for something.

2:46:19

Not just, you know, like a bottle falling, but like if I'm trying to design a mold, right, for like mass production, I need that thing to be five micron tolerant or better.

2:46:30

And right now, you know, there's no way to do that uh with current architectures and models and stuff like that.

2:46:36

This is why I'm not blackpilled on it, but like the horizon is longer. Yeah. So, a lot of work to do.

2:46:40

Uh, can you talk a little bit about some of the work you're doing with reindustrialize? Yeah.

2:46:47

So, last year, you know, incredible show of force from this community, right?

2:46:52

Like it grew from like Wait, was last year the first year? Yeah.

2:46:55

Because it grew from like an idea to like a massive massive conference. What? Give me the stats. Break it down.

2:47:01

Uh, so last year we had about like 4,000 RSVPs and like 800 attended. Wow, that's a lot.

2:47:07

Um, and yeah, I mean it snowballed from like I wrote that technoindustrial manifesto we threw together uh like two and a half months and it was crazy.

2:47:16

Um, it just all came together magically, but you know there's obviously and so going back to Detroit for this one or DC? Yeah.

2:47:25

So, um, we're going to be back in Detroit.

2:47:29

Uh we have an amazing benefactor uh who you know was pretty impressed I guess by the first one and uh they're giving us a brand new skyscraper that they just built. Fantastic.

2:47:41

It has a beautiful I'd hit the size gong for that.

2:47:43

Beautiful convention center uh attached to it and yeah, it's going to be it's going to be wild.

2:47:50

It'll be very very high quality. More than 800 this time.

2:47:52

Um what does it take to get in the off the guest list then? That's hard. Just just DM me. Okay. Yeah. Yeah. Yeah.

2:47:58

Um but yeah, it'll it'll probably be around the same.

2:48:01

And and is it a similar Hillen Valley mix, founders, politicians, or are there other folks?

2:48:05

Is this a place where someone could go and just find a job or Yeah.

2:48:08

talent, everyone, everything in between?

2:48:10

This this is like a it's, you know, it's a good champagne problem to have because you want all these different facets from everywhere to be there.

2:48:17

But at the same time, uh I think ultimately what we're going to struggle with and and need to refine over the years when we do this is we want high quality decision makers there, right?

2:48:27

because like the whole community has to move forward somehow.

2:48:29

So that might just be day one eventually and then day two we can kind of go into like startups and like you know maybe a trade show kind of thing like that.

2:48:38

So there's you know it's all in motion but very cool.

2:48:40

We'll we'll take all the feedback and when is it?

2:48:44

How can people learn more? Give us the plug.

2:48:46

Is there a TVPN coupon code yet?

2:48:48

If not, can we get one set up?

2:48:48

Yes, we will have a TBPN coupon. Thank you.

2:48:51

I want to kick back on every sale. It happens. Dream 50. Golf team 50. We'll be Yeah. Yeah. Just send the jet. That's all. Uh July 16th. July 16th. Detroit. Yeah.

2:49:04

We're super super excited for Reindustrialize. Yeah. We'll be out there. Um Yeah.

2:49:08

How how where where do you think uh where do what what do you think people are missing this week around reindustrialize?

2:49:15

When you look at kind of like the guest lineup and everything like that, are there areas We were talking to Phil.

2:49:20

One area that I kind of identified as something that doesn't feel like it's a huge part of the conversation is labor, right?

2:49:24

It's like who's going to uh even if we're building automated factories, we still need to upskill just due to how many people within manufacturing are retiring, right? Yeah.

2:49:37

Education technology has always been hard.

2:49:38

No, this it's it's insane, right?

2:49:40

Because in Jensen's talk, right, like he was talking about trades, right? Like elevating trades.

2:49:46

If we want to be able to accelerate these things faster just because the gap has grown so large and we don't have time, we don't have another 20 years to teach these people, right?

2:49:55

So, uh, yeah, that's kind of like where my company comes in, right?

2:49:58

Like we're trying to encode tribal tradecraft into technology and then maybe it doesn't take you 20 years to learn how to make a mold anymore, right? It takes like a year.

2:50:07

Uh, so they've taken people uh, you know, forklift operator and pretty soon he's like just CNCing stuff. It's cool.

2:50:14

So yeah, I how can you can you break down I'll give you an example.

2:50:19

I saw somebody take they were working on their irrigation in their backyard.

2:50:21

Seemingly a very complicated system that like one person had kind of designed a long time ago.

2:50:27

They were able to take a picture of it, plug it into Grock or 40 and the the model was able able to spit out like an completely onpoint analysis of the situation about put you in the truth zone and thinks it's impossible and and so so is that is that you know clearly for a simple consumer application it works.

2:50:47

works. uh are we going to see that in manufacturing in the same way where an individual might not have that you're talking about ingraining tribal manufacturing knowledge into AI are how how bullish are you on that or or uh what's the timeline so again just go back to the mental model of like how

2:51:05

much precision and accuracy do you need to accomplish the the end task right so like in manufacturing there's some room for error depending on the process so ultimately I'm I'm super bullish on this right yeah But factories have to be rebuilt literally like from the ground up with a software nervous system, right? And like AI will play a huge part

2:51:24

And like AI will play a huge part not in just the like the SGNA kind of stuff, right?

2:51:29

Like yeah, doing invoicing or whatever, get rid of that.

2:51:31

Uh the actual skill in coding is the thing that becomes this like weird, you know, physics driven deterministic model.

2:51:38

Like if you need to engineer something, that's a that's a really out of distribution problem. Yeah. Right.

2:51:44

like you need to understand the physics behind it.

2:51:48

I mean like does a trades person no but like they sit there and do it for 20 years.

2:51:51

They done it 10,000 times.

2:51:54

So like their brain is a physics simulator.

2:51:56

So it's just like how close are we getting there, you know, with like each task as it gets more and more refined and like accurate, I think. Yeah. Fantastic.

2:52:05

Well, we'll let you get back to it.

2:52:07

Thanks so much for stopping by. Thank you.

2:52:08

Very uh excited for Reindustrialize and uh yeah, good luck.

2:52:14

Good, good work on being ahead of a massive wave. So, for sure. Thank you. Um, awesome.

2:52:19

Well, we have, uh, Sriti coming on from Navier.

2:52:23

Aaron, would you mind grabbing her?

2:52:25

Navier, we're talking boats, talking maritime, roboticist.

2:52:27

She was formerly at NASA. Okay.

2:52:30

And she also was working on subcritical nuclear reactors at Fermy Lab.

2:52:35

And fun fact, I filmed a twoperson podcast with Jason Carman where Jason Carman was on one of your boats. Welcome. Sit down. Sit down. Here you go. Um, great to have you. I'd love to start.

2:52:50

I was just reading off your bio. Absolutely cracked.

2:52:51

MIT mechanical engineering, PhD.

2:52:53

Scoot in so you can be as close as possible. Yeah.

2:52:58

And you can grab the microphone.

2:52:58

It's a little bit heavy, but you can hold it. Okay. Great to have you on. This will be fantastic.

2:53:02

How's How's your Hill Hill and Valley been so far? It's been great.

2:53:07

that it's really incredible people. Is this the first one? This is my first one. Yeah. Yeah.

2:53:10

Are you hoping to be a beneficiary of all like the momentum around ship building broadly or is this more just about meeting folks um in Silicon Valley and the hill as well?

2:53:19

I think I think this is an incredible time you know to build hard things.

2:53:24

I mean something that you know I feel like for years people were holding back and suddenly you see the momentum everywhere and you feel it here.

2:53:33

They have done an incredible job.

2:53:35

I I don't think I've, you know, been in any conference where you're seeing builders, policy makers, everyone coming together and just saying, "Let's build. Let's do it now."

2:53:46

And it's it's awesome to see that energy.

2:53:47

Speaking of building, what uh can you describe exactly what you're building?

2:53:51

What design tradeoffs you made that put your product uh standing out from the pack? Correct.

2:53:58

Correct. So you know the the the foundation behind building Navier is um building next generation maritime vessels and you know when we are thinking of next generation marine vessels you have to think about like you know why why suddenly now right so

2:54:14

America is number 11 in maritime and you know very small number of vessels China is putting putting out thousands of them y so the goal is just not to think about okay how do we outnumber China to when you have to out innovate China. So that

2:54:28

So that means when you think of building marine vessels, what does out innovating mean that how do you build vessels that are just not a little bit better but a step function better?

2:54:41

What that means is not just automation software and all that.

2:54:45

How do you reduce per unit mile right per unit payload cost of moving things on water?

2:54:52

Yeah, the world moves the whole world right moves on the terms of you know what is the cost and speed at which goods and people move.

2:55:02

If you tap into that economy, if you tap into that problem, suddenly you're controlling how the world economy moves.

2:55:09

That's a trillion dollar market.

2:55:11

And functionally in terms of the actual design of the vehicle, uh is it a hydrooil? That's electric hydro. Electric hydrooil. Yes.

2:55:20

I mean, so unpack the one that is out in the market is electric.

2:55:23

We build more than just Yes. Yeah.

2:55:25

Uh so yeah, what were some of the design trade-offs? What are the specs?

2:55:29

uh and and and uh how do you pitch that to the eventual customer? Who is the customer?

2:55:34

Well, so the focus as I say is to build a maritime company.

2:55:40

When I started this company, uh we were against COVID actually, right?

2:55:44

And um you know, no VC was interested in maritime and there was no excitement around it.

2:55:50

I'm just going around and saying I'm going to go to segment possible that's not venturebackable.

2:55:55

Um and then the the first application when you think about put you know goods and people and you're thinking electric the first application is moving people in in coastal cities.

2:56:04

is moving people in in coastal cities. I mean that's a good demonstration of the use case operational efficiency and cost right but it's co so everybody is like work and no VC would believe that people will ever ever take a you know ride and go go to work but people have commuted

2:56:22

across the bay for years but suddenly people thought that you know what again remote work is forever right sure so to do that but for me it was important let's get the tech out and let's get money to get the tech out so what we did is that well you know what the First problem we had water doesn't have a brand. Let's build something that gives

2:56:39

Let's build something that gives that a awe inspiring magic, you know, that emotion uh and put it out on the water like you feel when you see a rocket.

2:56:49

So that's why we started with like this super cool sexy high-tech Navia 30 and 30 pioneer edition and the initial customers and who backed us are like you know tech entrepreneurs and what not.

2:57:03

I mean they bought recreational boat buyers bought these boats. Yeah.

2:57:06

Um then we also had like you know hospitality and so on.

2:57:08

Uh but now we have you know the recreational part is a small segment.

2:57:13

Our major customers are defense and commercial.

2:57:15

So we work with the you know our our patrol systems.

2:57:20

Our technologies with US Navy vessels right now.

2:57:22

How does the DoD think about um uh maritime kind of fuel sources long term?

2:57:28

Are are EVs a part of like how they're thinking or is it more traditional sort of fuel sources?

2:57:33

It all depends on your use case, right?

2:57:36

So EV when you make it all electric board, it has certain use cases.

2:57:40

has certain use cases. So some when you're thinking of low heat signature um sudden kind of like noise and and there are certain applications where you're looking at electric um all electric application uh but you know the other ones that you're really looking I mean

2:57:56

what what is the pros of a hydrooiling boat right forget electric or a gas like compared to a conventional pling hull you're taking out the hydrodnamic drag as a result you're getting like three times longer the range when you're thinking of long range platform. So it's, you know, you're

2:58:11

So it's, you know, you're putting a payload that you don't want to be like, you know, bouncing around.

2:58:15

You want a steady platform.

2:58:18

So, so far you would need like large platform gimbals and whatnot, right?

2:58:23

So that's for payload, but also for crew because crew, you know, CTV, crew transfer vessels, people can get injured when you're always slamming against them. Yeah, makes sense.

2:58:32

They're kind of Last question or should we move on to Jared?

2:58:35

I know he's waiting out there. No.

2:58:35

Uh I I'm just curious how like talk about the re you know what it's like being in Washington you know today versus even a couple years ago.

2:58:44

I I imagine the response has just been completely different in so many ways.

2:58:48

It feels like you know uh you know um every every the ocean is becoming uh I think in a year it'll be overheated.

2:58:56

Right now it seems like it's getting the right amount of investment but um it's it's 70% of the world and I hope there are more and more maritime company.

2:59:03

I mean we need to build you know and and I mean it's a huge economy.

2:59:09

I mean people are you know all of these talks about jobs getting taken over and we won't have jobs and I'm thinking wow we are going to unlock a whole new kind of economic opportunity.

2:59:20

I mean there will be so much jobs so many things that will spin out and the secondary effects of it that to me is exciting.

2:59:26

I mean there's a whole industrial revolution that will happen around maritime and I I think it's awesome to be a part of it. Amazing. Amazing.

2:59:33

Well, thank you so much for coming on the show. Yeah. Thank you.

2:59:36

We have to record a stream from the boat. Yeah. Yeah.

2:59:38

Jason already filmed on one.

2:59:40

It was extremely cinematic. Yeah.

2:59:42

We can be nice and stable recording.

2:59:44

No, it actually was really stable.

2:59:46

He was on the phone and we recorded the whole thing. It was amazing.

2:59:48

We did 20° banking turn and the champagne doesn't spill. That's amazing.

2:59:52

Uh if you if you don't mind, can you grab Jared?

2:59:54

He's out there in the in the suit with the marbor pin, I think.

2:59:56

Um but yes, uh fantastic.

2:59:59

Jared, welcome to the stream. Look at that.

3:00:05

Normally in a racing jacket, but you look fantastic.

3:00:07

You dressed up first time since last Hill and Valley or you throw on the suit every once in a while?

3:00:13

I I I wore talks at the inauguration. Okay, that's about it. That's great.

3:00:16

Uh well, uh what's top of mind for you?

3:00:19

Uh I want to hear about stable coins.

3:00:21

I want to hear about uh the stuff that's less about re-industrialization, manufacturing, maybe more on the crypto side.

3:00:26

uh what is uh what's the most interesting to you today? Yeah.

3:00:32

So, the crypto industry obviously showed out extremely heavy for extremely heavy for the uh you can hold it for the uh incoming Yeah.

3:00:37

the current administration.

3:00:39

So, effectively there $250 million donated like lots of crazy stuff but also s lot lots of reasonable stuff. Yep.

3:00:46

So, uh since then we effectively have uh a few pieces of legislation that is going to be delivered.

3:00:52

So, there's currently two stable coin bills, one in the Congress and one in the Senate.

3:00:55

One in the House, one in the Senate. Yep.

3:00:57

Uh, one is called Stable, that's the one in the house, and uh, Genius is the one in the center. Genius.

3:01:01

So, the main difference between the two appears to be the treatment of non US issuers. Okay.

3:01:05

Now, there's only one significant non US issue. It's Tether. Tether. Okay. Yeah.

3:01:12

So, so Tether has roughly God, I'm I'm going to butcher the number, but it's over 150 billion issued. Circle is number two.

3:01:17

Isn't it the most profitable on a per employee basis? Something like that. Yeah.

3:01:21

I mean, I don't know how many people work on the Medallion Fund at RET, but it's not that.

3:01:23

Like, this has got to be it.

3:01:25

They claim they've made over $20 billion in profit over the past 2 years.

3:01:29

It's an absolute monster of a company.

3:01:31

It's crazy you can make I mean Medallion Fund makes sense because they're doing such complex stuff, but stable coins seems simple to me. I don't know.

3:01:37

Maybe I'm underelling them.

3:01:37

I need to talk to If you're someone in a country like Nigeria, you have double digit inflation rates.

3:01:42

Your country desperately does not want you to be able to access US capital markets or even like, you know, things to hedge against inflation. You want dollars.

3:01:50

inflation. You want dollars. Y and so the demand for dollars has been so strong that you know people all over the world go through a bunch of extremely complicated UI processes you know they use Google use a bunch of these swapping who would possibly do this not an American consumer well it doesn't matter

3:02:05

y and it's like mo most stable coins uh from tether issued on a blockchain called tron people here have probably never heard of tron um so it's it's a very international user base the pull of the market you know we talk about product market fit product market fit of stable coins is so insane um and the

3:02:18

fact that there's a debate between you know the section of the house on should we write legislation that potentially kneecaps the one group that is doing the most to export the dollar abroad I think is extremely interesting interesting and this is on the heels of you know circle's trying to IPO right now we saw

3:02:34

that perspective so compared to the 20 billion profit over the past few years I believe the um EBIT on Circle's $62 billion issuance was like 258 million yeah people did not like the S1 it was not um uh and and they were leaving a lot on the table they their distribution costs are high due to the the Coinbase relationship, I think. But um but yeah,

3:02:53

But um but yeah, that makes sense.

3:02:55

It's like um the the the tea bill is arguably the best America's greatest export, right?

3:03:00