Arm Pumps CPUs, Social Media Addiction, Data Center Ban | Eric Goldman, Nima Jalali, Jon McNeill, Karri Saarinen, Dimi Kellari, Mikey Shulman, Aida Baradari, Zack Kanter, Nik Milanović, Zach Perret

You're watching TVPN.

Today is Thursday, March 26th. We are live from the TVPN UltraDome, the temple of technology, the fortress of finance, the capital of capital. Well, let me tell you about ramp.com. Time is money. Save both. Easy to use corporate cards, bill pay, accounting, and a whole lot more. Let me also pull up the linear lineup because we have a monster show. Jordy's back in the TVPN UltraDome. I know you missed him. We have Eric Goldman coming on to help break down the Meta YouTube lawsuit.

By the way, yesterday was the first time we've been live that I was not on the air.

Yeah.

And so I was watching in the third person.

How'd I do? Here, we can drop the Linear lineup. Linear, of course, is the system for modern software development. 70% of enterprise workspaces on Linear are using agents. Give me a review. How'd I do?

I thought you did fantastic. I was texting you in real time. I probably sent you like 20-something messages of like, ask me about this, ask me about that.

It was, yeah, somebody in the chat said I was free soloing TVBN, and it was great. But we really bore down to our last few few associates here. Tyler was out. Jordy was out. Who else? Nick was out. We were on a— what do they call it? A shoestring or something like that? I don't know. But it worked out. It was a fun show. It's not the same show without the soundboard. I was gonna do this whole bit about like, "Oh yeah, I got it dialed. You can just— we don't need you on the show anymore." And then, of course, the fans would be like, "No, bring back Jordy." I'd be like, yeah, okay, he's back. But I can't even joke about it because we need the soundboard.

I only got 2 buttons. It really is musical. It really is. Imagine if you were just— I was waiting for you to just be spamming that.

Just sitting there having a serious interview.

Apparently we have some audio issues.

Okay, we will work on it.

Bear with us, we're working on it. But I can go through a bit of our guest lineup today. We have Nima, friend of mine. He is the founder of Salt and Stone. Yeah, good person. Recently exited the business as of this week, a massive multi-hundred million dollar deal. Very excited to get to understand the business better. We have John McNeill coming on. He's an author to talk about Elon Musk's 5-step algorithm for scaling Tesla. Then we have Kari from Linear on how Linear is evolving in the AI age. And then we have a bunch of different founders, including Mikey from Suno coming on.

And then we got back-to-back Zachs, Zach Kanter, Zach Perret, going back-to-back Zachs. That's what I like to see. Well, the big news of the day, of the week, this has been going on all week, is that Arm, the intellectual property developer that creates intellectual property designs for CPUs, is now getting into the chip game. And they got a big Arm pump in the stock market. So the company is up 15% over the last few days on the news that they will sell their own chips. This is new for Arm. Arm's a very old company, fascinating history. I actually made a 25-minute YouTube video all about the history of the company back in 2023, but we'll recap a little bit of it today. But they normally just license out their intellectual property And that is a phenomenal business, 97% gross margins, 97% gross margins. Yeah, let's give it up.

There we go.

That's amazing. And you know, it's a big business, $4 billion in revenue last year, nearly $800 million of net income. This new move, they're expecting to ramp revenue to $15 billion by 2031. So they're expanding the market significantly. Now margins will be different, but the market cap for Arm is now around $100 billion. $166 billion. So it's a big company, trades at a very high multiple.

Yeah, $4 billion last year, currently trading at $165 billion.

But very, very high gross margins. So this is a big shift in strategy. Arm's not an AI loser by any means, but it hasn't gotten the attention that other GPU makers have received, like Nvidia. CPUs are far from dead though. In fact, we are currently in what seems like a little bit of a CPU crunch. Intel can't make CPUs fast enough. Nvidia is starting to say, used to sell their Grace CPU that goes with their Hopper. So you get the H100 and you pair it with the Grace CPU, you get the GPU and the CPU all on one system. Well, now you can buy the CPU by itself if you're CPU constrained. So you don't want to just be GPU rich and CPU poor. You gotta be rich in both camps. And a lot of companies are jumping in to fill this gap. So agents, and a lot of this is because of agents. Agents need CPUs. You need to fill the GPUs constantly with new data and tasks. Also all of the agents use CPUs to make web queries, search the web, run Python, spin up web servers, interact with anything. We've just seen, you know, we talked to some folks at Semi Analysis about this, like uptime is going down for non-GPU accelerated workloads. Like you go to a SaaS product that is basically just a web server that's running on a CPU somewhere in a data center and you're like, ah, this thing isn't loading today. Or like there's downtime. And a lot of that's just because we're writing more software, we're using more software as a society, as a country, and we need more CPUs as well as GPUs, even though GPUs are like the hot thing to talk about. So Arm has a very interesting backstory. As I mentioned, you can go watch my 20-minute, 25-minute YouTube video about it to go all the way back and all the precursor companies. It's a really long story, but you can think about it basically as a joint venture between 3 groups, Apple, Acorn Computer and VLSI. And so they needed to design a low-power CPU for mobile devices. Before phones, you know what was hot, Jordy? PDAs. And have you ever seen a PDA, Tyler?

No.

You've never seen a PDA?

I don't think so.

Wow.

Okay, so before the iPhone, you know, everyone had flip phones, but before that—

This is not a pager?

It's not a pager. You don't know what this is either?

No.

Wow.

So there's something called a PalmPilot and basically it was, It was like a, like a, you know, iPhone-sized screen and it has stylus and you could write on it and you could make notes. And PDA stood for Personal Digital Assistant. And I feel like that brand is just itching to come back in 2026. Like that's what so many people are—

Everyone is working on a PDA.

Yeah, Personal Superintelligence Assistants. There's a whole bunch of things. We're building PDAs, folks. They just live in the cloud. and it's not a physical device. But these PDAs back in the '90s were physical devices. This was post-pager, pre-smartphone, and it was the device that you carried to take notes and do things that you do today in apps, you would do on your PDA. But it wasn't always on, internet connected, none of that. It was a PalmPilot, and this was like a fantastic business for a while. But there were a lot of problems with this because for the first time, you needed a CPU that could live within a plastic shell, basically. These were like plastic enclosures, needed to run on a battery. It needed to be able to do some things, not crazy compute, but the CPU industry in the '90s was very focused on mainframes, servers, desktops. There were a few laptops popping up, but there was not the mobile phone revolution that's happening now where you have Apple Silicon chips Those are of course based on ARM architecture, but that's where all this came from. People said, okay, we need a lower power chip that can actually run off a battery, not overheat and melt the plastic, do all of this. And it can be somebody who can power a device that you carry with you as a personal digital assistant, a PDA. And so—

Chicken in the chat says PayPal started on PDAs.

That's right. That's right. So PayPal started originally, the idea was, these PDAs had, they didn't have like tap to pay or anything like that, RFID. They had basically the same device that you'd see on a TV remote, so IR, and it would flash a light that could be seen by another sensor. And if you flash the light at a certain rate, you can send a message. You can basically, it's like advanced, what's that SOS thing?

Morse?

Morse code. It's like a more advanced version of Morse code. And so you could send a specific packet of information from PDA to PDA. And this was the original idea for PayPal. That's correct. That's a great, great piece of lore, tech lore. So ARM starts to build these. Later, there's Robin Saxby, who was the CEO of ARM at the time. He wanted ARM to become the global standard for CPUs. And so in the '90s, there were lots of different CPU makers, lots of different architectures. There's this whole CISC versus RISC debate. There's the x86 architecture that Intel pioneers. And slight differences in architectures can limit interoperability. You see this with what's going on with Mac where a whole bunch of applications have needed to be rewritten for Apple Silicon because previously you would have an Intel Mac before we got to the M1, M2, M3, M4, M5 chips. Those are Apple Silicon, those are ARM-based. And sometimes you'll go to a website and they'll be like, oh, do you wanna download this for a Mac? Like, what do you have? Do you have an Intel Mac or do you have an Apple Silicon Mac? Well, it's important because when you write the software that runs on the Mac, you need to use specific instruction sets. Now there are ways to abstract that and run on either, but there are lots of pieces of software that interact with the CPU at a low enough level that they need to be aware of the instruction set. So ARM sets out to be the global standard for CPUs and they create the ISA, the instruction set architecture, and that ultimately let Apple design their own chips. But within the architectural guidelines set forth by ARM. So Apple pays a license to ARM for every chip Apple sells. It's a very small license fee because Apple does a lot of design work. They do the manufacturing, TSMC fabs it, and like there's a million other pieces of the value chain. But for this one little slice, they have to pay ARM and ARM just takes that and says, thanks. Like, cool. Like you used our intellectual property successfully.

You know who else says thanks?

Who?

Masayoshi Son.

That's true.

Because they own 90%, roughly 90% of the company. It was a full buyout in 2016. They bought the entire company for something around $25, $30 billion USD. Buy the entire company. They still own 90% today. So, they're like SoftBank's holdings just in that one company are Somewhere in the range of $140 billion.

It's great.

When I was looking at it, it's the— and of course, they've massively levered up $100 billion. Well, and they've massively levered up against that position. Yes. They've used— they've, they've raised debt against their holdings in Arm. Yeah. But certainly Masa is somewhere out in the world seeing it go up 15%, just happy. Smash in a gong somewhere.

I hope so. I hope so. And although everyone knows Apple, my clickbait for my YouTube video was like, did you know the iPhone is secretly British? I think it's funny because it uses ARM deep inside, but ARM licenses to a ton of different tech companies. So Amazon uses ARM for the Graviton chips. A lot of Android phone makers have ARM-based chips. Tons of other tech companies license ARM's technology to build chips, but now, ARM is going to be making the chips themselves and they're going to be working with Meta Platforms and OpenAI. This means a shift in the economics of the business. So 97% gross margins for just those licensing ISA contracts. This will be closer to 50%, but it, but it should be offset by the huge gains in market size and revenue potential. So the company has one of the highest multiples in semiconductors, roughly 90 times forward earnings. So there's a lot to live up to. But there's a lot of value coming from AI agents that have access to plentiful CPU resources. The industry dynamics are also particularly interesting. Ben Thompson pointed this out in Stratechery. So NVIDIA sells an ARM-based CPU, that Grace CPU. And so they're— NVIDIA is sort of competing with ARM. Jensen showed up and gave like a remote talk at this ARM event where they announced this chip. And so they're competing, but they're also in some ways working together because they're challenging x86 options from Intel and AMD that are still really popular. And so if Intel's constrained, it's like they're like, if Nvidia sells a bunch of chips for, you know, AI workloads, well then that actually makes Arm more likely to sell their chips as well because whatever software is built for the Nvidia Arm-based chips will probably run on the Arm ARM-based chips. So there's some sort of like integration there. And the x86 moat is not as strong as the CUDA moat, but there's still this like dynamic of NVIDIA and ARM are going up against Intel and AMD in the same way that different GPU makers are going up against the CUDA moat. So there's like this, all these different interactions there. But it'll all be interesting to, to follow. Let's, let's move on. The big news that drove this was, of course, Meta engineering at Meta said today we're announcing a new partnership with Arm to collaborate on the development of multiple generations of purpose-built CPUs to support compute and AI infrastructure. Arm called it the Arm AGI CPU. What a great name. We love it. Let me tell you about Labelbox. RL environments, voice robotics, data evals, and expert human data. Labelbox is the data factory behind the world's leading AI teams. And let me also tell you about Sentry. Sentry shows developers what's broken and helps them fix it fast. That's why 150,000 organizations use it to keep their apps working. So the Wall Street Journal has another good write-up of this story talking about how this— the timing is good. It is. There is a boom in CPUs right now, but the stock is already priced very highly and everything has to go perfectly because it trades at one of the highest multiples of all the semiconductor companies. So what else is going on in the timeline?

Well, let's talk about this data center moratorium bill.

Yes.

I wrote in the newsletter today, yesterday, Senator Bernie Sanders and AOC introduced a new bill, the AI Data Center Moratorium Act of 2026, that if enacted would require all current and planned data centers to halt construction slash production. It even, it would even block upgrading existing data centers. So if you have an asset, and you wanna make changes to it, in theory, as this bill is written today, it would be blocked. They sort of like define data centers based on power demands, cooling capabilities, like how much power you can get to each individual rack. So they have been fairly specific, but trying to be like very good.

'Cause I was thinking I was fine with this. I was thinking like, I don't need any more, AI data centers at this point. We can freeze those. I just wanna build AGI data centers and ASI data centers. And so as long as I can just build tons of those, like it should be fine. But it is interesting that they seem to have figured out the semantic loopholes that might happen if it's defined AI.

Yeah, the bill would halt all new data center construction and upgrades until more legislation is put in place to guarantee the following. And these will be tough to guarantee. So from Sanders' site, they want AI to be safe and effective, preventing executives in the industry from releasing harmful products into the world that threaten the health and well-being of working families, our privacy and civil rights, and the future of humanity. The economic gains of AI and robotics will benefit workers, not just the wealthy owners of big tech. And AI does not increase electricity or utility prices, harm communities, or destroy the environment.

So this stuff seems good.

Yeah, all generally good, but no one wants unsafe and ineffective AI. Well, yeah, and the bigger problem is anytime you're creating, I don't think we've created a technology ever that didn't have some negative impact. Yeah, car crashes is an example. I'm sure this will be rewritten and debated, and obviously it has a long way to go before becoming law, but this set of requirements seems completely impossible to actually achieve.

Well, it depends on how you define it. I mean, AI does not increase electricity or utility prices like the ratepayer protection pledge and behind-the-meter stuff could.

I'm more talking about number 1.

Number 1, safe and effective. I mean, it's all in how you define that. Like some of the, Some of the parental controls are a good example of like how to take that overarching thesis and then boil it down into something tractable. And when I hear that, I think like, oh, like I don't know how we are defining safe. I don't know how we're defining effective. Like this feels like this could be like some sort of very vague thing where like if one particular administration likes this company, they just approve it or not or whatever. But then when we actually talk to lawmakers and you hear something like, oh yeah, we're going to, you know, require parental controls. So if your offspring has a, you know, an AI account, you can say, hey, like they are this age, don't show them anything that's inappropriate for that age. That seems good.

Yeah. So I don't know. Overall, at least this first bullet point, preventing executives in the AI industry from releasing harmful products in the world, —that feels like you could end up having something like an FDA that's like, every product you create needs to go through years of studies in order for the government. And it's like, hey, I just wanted to create a slightly more AI-native version of the SaaS tool. Do I really? I just want to make SaaS.

At the same time, the bull case— I mean, I think the FDA model would really slow things down based on how long the FDA takes to approve things. At the same time, what is the definition of harmful here? Is it net harmful products? Because that is the goal of the FDA. They release drugs all the time that have side effects. You take this, it cures your cancer, but it's gonna make you throw up or it's gonna make you lose your hair. And people are like, yeah, I'll take that trade. And so, if you went through the government, you said, okay, yeah, I'm gonna give you this tool that can like, write code, but sometimes it's gonna hallucinate and like you might get some code that doesn't pass tests. I'd be like, yeah, okay, like it speeds me up on average, I'm in, like that's fine. And having some of those disclosures and it's the same thing with knowledge retrieval. Like I do a deep research report, I get something that's 99% of the way there. Maybe there's something in there that's like, oh, that's actually like misattributed or that number's, I know that that number's from this report online that was wrong. And the model doesn't, and so I need to fact-check it. Like, I still see that as like net beneficial, but there are of course like flaws in every system. And so, you know, again, it's like where, how does this get defined over time? That's like important.

One thing I noticed from the announcement was that they are using AI leaders' own statements against them. And it's easy to see how this would resonate with their constituents. This is really powerful. So they, on Sanders' websites, he included, this quote. Okay. In December, Elon Musk, who leads XAI, said he had, quote, a lot of AI nightmares and would, quote, certainly slow down AI and robotics if he could.

It's so interesting because Elon doesn't talk about that with like the rollout of electric cars or the rollout of space travel. He's not saying like, oh yeah, like, you know, 2030 is too soon to get to Mars. Like we need to— we need to slow down on the race to the moon. Like, let's really figure out the spacesuits first. Yeah. You know, he's like, let's just go. Yeah.

And then another one. In January, Demis, the head of Google's DeepMind, said he would support an AI pause if he knew other countries and companies also paused development. In February, Dario Amodei, the head of Anthropic, said he was absolutely in favor of trying to slow down AI development if other countries also slowed down. That was Davos, I believe. January, February. So continuing, I wrote, but the problem, of course, is that there is zero movement on getting other countries to slow down. I can imagine some companies that would be like—

There's already comments in the chat about like, yeah, let China win.

Yeah. I'm not going to name the countries that would be down to slow down, but I think we all know that China, even if they agreed to something like this, wouldn't just automatically do anything about it. But the problem of course—

are there any countries that are like, yeah, we definitely should, we're ready to slow down? Like, we're France.

Well, I think if you're way behind, if you're way behind, there's kind of a benefit. Elon had said, I think, in 2023 that he supported like a 6-month pause. Yeah. And at that moment, that would have been awesome. Yeah. Because, hey, if I could just have 6 months to like get my—

I feel like if you pull people in the south of France or the Amalfi Coast, like those folks would say we should just slow down generally, like AI, but also just slow down our lives, enjoy a glass of wine, hit the beach.

Yeah, or even like a summer break. Just a summer break.

Like 4 weeks. Yeah. Or even like during the workday, like taking a break, taking a nap, just taking, just slowing down generally. I think there's a lot of people that are just in favor of that.

Yeah. But okay, Jordy, like if you're saying like people who are behind should want to like slow down, like, does that mean that China should be more in favor of slowing down?

That is interesting. That is interesting.

Well, I'm just saying, I can imagine in the same way that like for as many chips as we give them, advanced GPUs as we give them, you can assume they're still going to put an immense amount of pressure to kind of stimulate the local semiconductor industry. In the same way here, I'm sure they would love for the United States to just pause all new data center construction And I think it's possible that they would like generally say like, yeah, like this seems good, but then what would they actually do? They would just use that as an opportunity to catch up, right?

So my question is like, where does China actually stand on this? I'd be very interested to know. Maybe you could look it up. Like, has the Chinese Communist Party actually put out any statements about whether they want to accelerate or pause AI development? Because I think that they might refrain from taking that stance because it would discourage local, like, indigenous development. Like, if the government is coming out and saying, like, "We want to slow down," then a lot of entrepreneurs are going to be like, "Okay, I'll go back to e-commerce," or, "I'll go back to manufacturing." Like, "I'm not going to work on this because the government doesn't want me to." And so, I feel like there's this tug and— like, even though I agree with you, like, it would be in their advantage to say, Hey, we want to slow down. Everyone should slow down. We're pro-slowdown. If they actually said that, it would have an immediate slowdown effect on the local AI progress.

Does that make sense? Yeah. Like it would slow down. Yeah.

I mean, yeah, because even, even if they, even if they, if they just take that stance because it's an authoritarian country, like there's like this, like, like the Bernie Sanders comment stands in opposition to other politicians who are saying like, no, actually things are going well and here's how we're going to you know, like advanced energy and to build more. And so, but if you don't have that and it comes down as like a dictate or, you know, like this is the stance from the government, it's much harder for local entrepreneurs and local AI labs to like push back against that because it feels like they're all of a sudden in opposition to the government, I would imagine. I don't know. I'm very interested to hear how China's actually reacting.

Yeah, anyway, so just to kind of finish my thought. Yeah. All these quotes, like, must go extremely hard. If you're not kind of acknowledging the full picture, which is that the AI leaders are saying, yeah, if you get other countries to agree to slow down, we would be open to it. But that is like the big elephant in the room. They don't mention any even conversations or dialogue with other countries around slowing down. And I don't think there's been any. So anyways, the act has a long way to go and it seems like the odds of it getting into law are low but not zero. Safe to say that as written, the requirements in the bill would be an incredible gift to America's adversaries and catastrophic for overall AI progress.

Yeah, could be popular though. There are already some candidates who have, you know, made pausing AI or data center, like pausing data center buildouts sort of like their main thing. And it does seem to be getting traction. I don't know how much of that's just on social media. We'll see how it shows up in the midterms. But Saagar Enjeti was tracking this for a long time. Like it's going to be a political stump speech that hits. Like people are gonna be like, yeah, I don't like this stuff.

Yeah, the question becomes if anything like this were to become law, what are the effects of that, right? Space, right? The space data center people are saying like, space data centers don't seem so silly now, right? Taking that angle. Totally. Although I'm sure they would also be like, you can't put 'em up there either. We're gonna try to—

Yeah, I mean, there's also just like the globalization process that happened based around environmentalism in like the '90s WTO ascension for China. Like the reason that a lot of the mining happened in China is because like we said like, we don't want that here, right? It's dirty, it's gross, there's chemicals, there's pollution. And so like out of sight, out of mind, let's push it abroad. And we could do that again with data centers. We can just be like, they're all in Canada or Mexico, or they're all in some, you know, Australia or New Zealand, or like, you know, there could be a response receptive country out there that just says like, we would love, we are an ally now and we'd love to get all these data centers. And then you have to ask the question of like, what does that look like in 30 years?

Data centers generate, they don't create a lot of jobs, luckily. They create a meaningful amount of work during the development process. And certainly some jobs. They continue to generate massive amounts of tax, local tax revenue.

Yeah, I actually don't know how you tax data centers locally.

The data center that will block I think in New Jersey, was going to be generating like tens of millions of dollars of local taxes. Seems pretty good. Yeah. Yeah. But real estate or—

I mean, yeah, like one medium ground here is like just tax that and then use the tax revenue to do something else.

Yeah, and the environmental concerns. Yeah, I think everybody should want to make sure that if we're investing hundreds of billions of dollars into these things, that we're not destroying our lovely Mother Earth. Yeah, but, and the energy costs, again, real concern. But we're making progress there.

Yeah. Well, let me tell you about CrowdStrike. Your business is AI, their business is securing it. CrowdStrike secures AI and stops breaches. And let me also tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange.

Do we want to talk about this Meta lawsuit?

Oh, this minor headline on the front page of the Wall Street Journal? It says Meta, YouTube found addictive, harmful. It's like one of the hardest-hitting headlines I've ever seen on the front of the Wall Street Journal for two companies that are usually relegated to the business and finance section. They made it to the front page because they were found guilty or, you know, by California jurors. California jurors say the tech companies designed their apps to cause injury to kids. Very, very bad. But Brandon Gorell had a take and a write-up and some explanation of what's actually going on here. And then we are, of course, having Eric Goldman from Santa Clara University come on and break it down for us in more detail, because there is a lot of debate about this and it's been very interesting watching it play out. The total damages are, I think, $3 million each company, roughly $6 million total. And I had a friend who's a lawyer who texted me and sent me the number and was like, "Hey, I'm predicting that it'll be like 3M." And I didn't read the M and I was like, "Okay, $3 billion, like what'll that do? This is not that big of a deal." And then it was $3 million and I was like, "That's extremely low compared to like the numbers that we normally see from big tech companies." But this has much broader implications because this is precedent setting and there will be a flood of other companies.

And Zuck's like, "I did spend all of my free cash flow." on data centers. But if you give me another 2 seconds, I will have the cash flow to cover this. So just give me like 2 seconds.

Yes, but it is a very important case, even though this particular ruling is not changing the cash flow structure of these businesses, because it has a lot of ramifications and there's a lot more plaintiffs that are in the queue. So this is what Brendan Gurrell wrote in our newsletter today. Which you can sign up for at tbpn.com. Yesterday, a Los Angeles jury found both Meta and YouTube, that's fantastic, I want a lot of soundboard for this, both Meta and YouTube liable, wah wah, for a 20-year-old woman's mental health crisis in a bellwether trial that treated platforms as quote, defective products and potentially marks the end to the absolute immunity nature of Section 230. In the case, the plaintiff's lawyer, Mark Lanier, argued that Meta and YouTube built, quote, digital casinos that use neurobiological techniques similar to those employed by slot machines. Fun fact about Arm, throwback: the first chip that the company, the precursor company, ever built was a chip that went into a slot machine. They call them fruit machines in England. Fruit machines. Fruit machines. They call them fruit machines because they have like the cherries and the strawberries and the bananas and you line them up and, and they needed chips. To run those. So the iPhone traces its lineage and Apple Silicon and all this. This goes much deeper. It all goes back to literally gambling. Very fascinating. Anyway, so the jury found that specific features of Meta and YouTube are designed to be addictive. Infinite scroll creates an environment where there are no natural stopping points. Algorithmic recommendation feeds Users feeds users highly engaging content. Autoplay removes users' agency in choosing whether or not to watch the next video. Notifications pull users back in by exploiting their need for validation. Instagram beauty filters contributed to the plaintiff's body dysmorphia. Features like the like button exploit users' biological need for societal approval. This is what the lawyer argued, the plaintiff's lawyer argued.

Shake Shack exploited my biological need for food.

Yes, there is this question. There was Taylor Lorenzen had some great takes here. She said—

So Taylor has come out in the last like 48 hours, I would say, is like the number one defender of big technology. Yeah, she does have one of the top technology podcasts in the world.

She had a take that was like, so Does Spotify— did Spotify addict you to music by playing like good songs for you on demand?

And this DJ, this, this AI DJ is simply too good. Basically.

I mean, that's kind of the argument. They didn't obviously go after Spotify. They went after Meta and YouTube. But yeah, there's a question about like, you know, what UI features, what are dark patterns and how do we regulate those? And it's very interesting. But the decision has been made and these companies will have to pay $6 million to the plaintiff in total damages. This is obviously a trivial amount of money for these companies, but the bellwether nature of the outcome has significant implications for social media. There are over 10,000 individual personal injury cases, almost 800 school district claims, and 40 state-level cases pending nationwide that are similar to KGM versus Meta and YouTube. More broadly, the social media industry's reliance on Section 230, which has up to now shielded them from liability for user-generated content may no longer be enough to protect them from litigation like this. Now, to be clear, this case is not attacking Section 230 because it's not making the argument that someone uploaded a video to YouTube that said, "You should be sad. You should be afraid. It's over." And that made someone sad. That is the content that is user-generated. That is protected under Section 230. You might be able to go after the individual creator of that video. If I make a video that says like, Jordy Hayes sucks and should be sad, and then you get sad, you might be able to sue me, I think. I don't know. But that's, that's a little bit more defensible because it's like me on you. But you won't be able to sue YouTube for, for platforming that content, for putting that up in just general cases. But this is different because they went after the like button, the infinite scroll, the recommendation feeds, the features that are built by the platforms themselves. So if the decision makes it through appeals and this might go all the way to the Supreme Court, we'll see. Platforms may be forced to redesign their user experiences and algorithms, put up age verification, even deprecate infinite scroll. Obviously, changes like this would have an effect on both these platforms' ad-based revenue models. Meta and Google plan to appeal the decision. It's not hard to imagine this one making it to the Supreme Court. Taylor's also been sort of sounding the alarm bells around age verification. It sounds very good. I feel like I'm pro-age verification based on like I have kids and I don't want them seeing adult content. But she was worried about the KYC and needing to be tracked, privacy tracking anywhere. And that is a good argument to be made. Well, let me tell you about Graphite, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. And let me also tell you about ElevenLabs, build intelligent real-time conversational agents. Reimagine human technology interaction with ElevenLabs. We have to start apologizing to the schizophrenic community. There is a surveillance drone reportedly flown by infiltrator elements and disguised as a natural bird such as an eagle that has been spotted in Iran. This goes back to Taylor Lawrence because I believe she worked with the folks behind the viral stunt Birds Aren't Real that was sort of a commentary on the conspiratorial nature of the internet. And in that stunt, they make the argument that birds need to be recharged and they're all spying on you and no birds are real. Of course, that is very satirical and funny, but apparently someone made a drone, some, organization made a drone that looks like a bird so it can sneak behind enemy lines and spy during the conflict, which is remarkable. But—

Do you think there will ever be video games that are effectively, you're just remote piloting something in the real world? Yes. Do you think there would be demand for— Yes, so I have heard of this.

Years and years ago that there was something along those lines that would allow you to hunt remotely. So you go to a website and you control a weapon that can hunt an animal, which is crazy.

I don't know if it's right. That's crazy. But— Do they close the loop? Like help you actually get meat?

Yes, yes. So after you down the animal, they will go and ship it to you. So you can mount it on your wall. Dang. A lot of people—

Sort of, sort of. A lot of people are not going to like that.

I don't think Joe Rogan would approve.

He's a bow hunter, you know? Yeah, he wants the connectivity with—

I think so. I think so. It's destroying the art.

Now I'm curious. Is it like a gun mounted to an ATV?

Not an ATV, but sort of like a two-axis swivel. Like a turret. Yeah, like a sniper rifle on a turret with a webcam. Pretty crazy. I don't know if this is real. I heard about this like years and years ago. Anyway, the reactions to the Meta and YouTube trial continue. Ariel Gribner says, or Gibner says, this is disgusting and I can't wait for the appeals. The precedent set by YouTube being liable for screen time addiction is kind of scary. Treating algorithms like a defective product opens the door to endless lawsuits over addictive tech. What's next? Books? Video games? Junk food? I mean, Video games, we got to do something about. Those things are too, too fun. Too fun. Truly, we got to make them—

Except you ascended. You beat your addiction. Yeah, I definitely did. You don't game anymore. You actually did. I mean, it might be one of those things like you're still addicted. You just—

Might have been playing a game earlier this week. Got sneaky little 45 minutes. Really? Yeah. No. Yeah, it was good. No. Player Obscura.

I'm going to go, I'm going to go look.

You got to pull me out. I'm addicted now.

I'm going to go look back at our texts and see, like, when did it take you 45 minutes to respond to something?

Maybe it was like Tuesday night. Yeah.

I'm going to be coming after Erik Jorgensen. Oh, yeah. For the Book of Enoch. Yeah, because that just came out and Erik did a fantastic job. Yes. And I think it's highly addictive.

We got it. Can we sue this lawyer? Because this is one of the most interesting cases and I actually can't pull myself away from it. And I feel like I'm just gonna spend hours and hours reading about this lawsuit. Obsessing over the filings. Yeah, and I don't know, it's depressing. It's making me sad thinking about these tech companies having to pay fines, and it's just ruining my mood entirely. And it was like, you can tell that the way the lawsuit was designed was designed to take an emotional toll on me, suck me in, make me read. All of the transcripts from the court, all the reporting, all the research, and eventually, you know, talk to Eric Goldman from Santa Clara University on my show about this. Like, I just can't pull myself away from this. So, yeah, I think— I think should he be held accountable for what he's doing?

I don't know.

We'll see. But there might be a lawsuit.

Meta, of course, trading down massively today, almost 9% off of this. And you know, there's some real concerns, right? If they, there's new legal risk, there's thousands of other kind of lawsuits floating out there. You might get more copycat lawsuits, class actions. And then the real question is like, do they have to make any product level changes? Does that end up impacting time spent in the app, which will impact the advertising business? Such a weird one because certainly, certainly I don't think back throughout—

NASDAQ is also down 2% today. So there's a general sell-off. But yeah, yeah, general sell-off.

But like, you know, Meta down dramatically. That's a lot. Hundreds of billions of dollars. Yeah, this is a weird one on a personal level because like on one hand, my kids, I'm going to keep away the infinite scroll machine as long as I possibly can. Yeah, right. And I will, you know, I don't think back on the time that I've spent on social media and think, you know, I'm so glad I put in those, those long hours and I really put in the work.

Yeah, it just doesn't seem that addictive to me. I can pull myself away like any time. It's not a big deal. It's just not a big deal.

We lost it. It just sounds like, it sounds— This place. Enter Pixar honeymoon.

Okay, you just gotta get more.

I'll ask you a question. If you follow me, I'll double your bank account.

Well, on Instagram. Okay. I mean, this is good content.

Just follow me. This is the route you would have to take if you want to go to—

This is my subscriber.

And this is my subscriber. This is such a— Hey Jimmy. This is such a good—

This is the final mystery box.

Yeah, it's fine. We're gonna get back to the show in a little bit. It's not a big deal.

I'm not surprised that College Classroom— it's awesome. He grabbed 100 people. He grabbed 100 people.

Okay, he took people that are ages 1 all the way to 100, and he's having them taste test Lunchly. I gotta watch this. The world's largest LED— okay, it's the wall, the largest LED floor. No, this is just my normal feed. What's yours like? I am scrolling MrBeast.

It's so funny because it, I think whatever that was was completely inverted from a meditation soundtrack, right? It's just like, it's so insane.

Anyway, let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just power AI, don't just build AI, own the data platform that powers it. And let me also tell you about Cisco. Sorry. Critical infrastructure for the AI era. Unlock seamless real-time experience for new value with Cisco. Never apologize.

Cisco. Well, so the funny thing, the funny thing is how addictive are the apps themselves? Can they argue that the apps themselves, it's really not us? Yeah. Right?

I've seen some people's channels not very addictive.

Yeah. You know, like it takes a lot. In many ways, like our content, right? We talk about niche subjects in technology and business. There's a lot of content content on YouTube that is far, far, far more addictive.

Yeah. But yeah, no, I, I've generally had a good experience on social media.

You know what else is addicting? What? High-speed trains.

Oh, you want to skip to high-speed trains? You don't want to do, uh, we can come back to that. Okay, we can come back to that one. Uh, what's going on with this? So in China, high-speed trains have become a high sightseeing attraction. This is a good— I would definitely go to this. I would 100% just go see the the high-speed train rip through the countryside. That looks amazing. I love it.

Also, this is the most incredible video of China that I've ever seen. It's so beautiful. What is it? What is this mountain range at sunset? I think people are posting up there even if the train isn't there. Yeah, that's like one of the most beautiful.

You think that secretly everyone there is like, boo, the train ruined my beautiful view? Because like they could just be sitting there watching the amazing sunset and landscape.

That guy's leaning forward as the train goes by.

Yeah, I think they're pumped up. I think they're cheering. I think they're cheering. That's great. Where else do you want to go?

We can go back to this article.

Okay. Okay. Because I need to know where everyone stands. I need to know where do you stand on shoplifting? Are you pro or anti? Are you pro or anti? I'm anti. You're anti-shoplifting. What about you?

There we go. I had one moment as a kid when I think I took a piece of candy and my parents Immediately took me back.

I'm gonna put you under citizen's arrest right now.

Yeah, it's time for citizen's arrest. No, it took me back, and it was like the most deeply embarrassing moment. That's like a core memory of telling them like—

Most of them need to learn that.

And I think it was at an age that I didn't really know that it was wrong, but still.

Well, that's not what's going on, actually. So the Wall Street Journal wrote a piece about, in free expression, Emma Kamp, wrote this op-ed. And there's a new generation of— Yes, the Campanator. There's a new generation of shoplifters who aren't children, who should have learned their lesson a long time ago, but are actually fairly affluent and are just sort of sneaking out luxury goods. I think that's a piece of it. But she makes a very compelling argument for why this is a very bad thing.

We need to make skydiving more accessible. Okay, that's fine. Like if skydiving was a dollar—

For the thrill.

A dollar a dive. Yeah. I think a lot of people might say, I'm just gonna go skydiving today. I'm not gonna steal anything.

Well, I mean, Ben on our team is working on a new weather report.

Or jet ski racing.

Do you wanna do more of thrilling things to do?

Yeah, if we could make jet skis more accessible, universal basic jet ski. I like that. I think a lot of people would say, I don't have time to steal, I'm getting ready for the race. My cortisol is super low.

I don't need to spike it by sneaking something out. So, "At least once a week, as I begin my commute from home, from a Midtown Manhattan subway station, I see someone in a suit and tie dodge the fare. Well, it isn't always a suit. Sometimes it's a chunky gray J.Crew sweater and ballet flats. Each time I see the fare evader slip through an open emergency exit or casually hop over the turnstile, a wave of outrage bubbles within me," says Emma Kamp in The Wall Street Journal. Free expression. And I consider shouting out after the shameless thief. You should do it. I am in favor of yelling at fare dodgers in this case. But before I can work up the courage, he's melted into the crowd. It's tempting to give fare hoppers and shoplifters the benefit of the doubt and assume that they are all Jean Valjeans. Do you get that reference? No. Les Mis. You gotta see Les Mis. Jean Valjean is the pinnacle of morality. He steals a loaf of bread for his family 'cause they're starving, goes to jail, gets revenge. It's a great story. You will love it. You should see it in a theater because it is, of course, a live stage production many times. But there's also a great movie with Liam Neeson. The Liam Neeson one is the one you wanna see. The Liam Neeson Les Mis is amazing. I think I have that right. But that's far from the truth. Well, according to one 2025 survey, and this was what was interesting I love this article. The likelihood that someone would purposefully take an item at self-checkout without scanning actually increased with income. So the rich get richer. The rich are stealing from the rich. A viral article in Curbed, a site published by New York Magazine, paints a vivid picture of this kind of thief, a member of a certain subset of the city's wealthy-ish, as writer Nora Delighter puts it, for whom a little shoplifting on your grocery run has become about as mundane as jaywalking. This isn't exactly surprising. A report from the Council on Criminal Justice released earlier this year found that while reported shoplifting decreased during the pandemic, rates have returned to roughly pre-pandemic levels.

Wait, did they just decrease because people were ordering groceries online?

I think so. I think so. If you're not in the store, you can't steal anything. Crime. You got to hack the system or something. It becomes a cyber crime to steal from DoorDash. The rates have since returned roughly to pre-pandemic levels. This New York Magazine profile in Curbed profiles several shoplifters who were caught stealing from Whole Foods. None were acting out of necessity, and most stole what can accurately be described as luxury goods: $30 eye cream, strip steak, fancy organic chocolate. None expressed guilt, and no one— and one explicitly justified her actions as being in a kind of artist's subsidy. Petty theft is a vice for a certain kind of loser. Go off, Emma Kamp! I love this. Many of those profiled in this article are creative types: photographers, graphic designers, sculptors, and musicians, presumably These people are highly educated but downwardly mobile. They steal because they feel entitled to the kind of life where they can thoughtlessly drop $50 on French cheese and sushi rolls while paying Manhattan rent. They can't— that they can't indulge in such luxuries feels to them like a moral outrage, one that can be rectified in some small ways by taking what's owed to them. When shoplifters justify their actions online, they make themselves out to be Robin Hoods. They claim it's good to steal from large and therefore evil corporations. This is a teenager's leftism, one in which fighting the man means ripping him off. It's a post hoc justification for a baser impulse, the belief that everything you want should be free. This motivation is made particularly clear when people justify fare evasion given that public transportation is inherently not a big private enterprise. It's not a megacorp. It's, you know, taxpayer dollars. That you're stealing from. Even when we grant the assumption that large companies are inherently evil, which for the record, I don't, says Emma Kamp in the Wall Street Journal, that doesn't justify stealing from them. If thou shalt not steal doesn't work for you, consider another argument. Petty theft damages the institutions and businesses in a community, making them materially worse for your neighbors. You may think you aren't hurting anyone. Actually, you're hurting everyone. Businesses hike prices to make up for shoplifting losses. Have you heard of like loss? It's called like loss rates or something. Like every retail store just assumes that they're going to get 20% or 5% or some.

Yeah, I don't think it's— it can be high.

It can be high in some stores, like significant amount of merchandise just like gets lost. Prevention is like the term that they focus on, but it's like a constant problem for these businesses and they have thin margins. People don't realize— I think people think like grocery stores because like you go and check out, it's $100 or something. It's like, they're making a ton of money, but like the margins are very, very thin on those. It's not, it's not, it's not ARM. They're not licensing IP to Apple. They may even close. Public transportation crumbles without sufficient revenue from riders. As journalist Kelsey Piper put it in a post on X, when you shoplift, you directly and unambiguously impoverish your community. That bar of chocolate you swiped isn't nothing. That little pot of eye cream you slipped into your purse is more than a rounding error on a corporate balance sheet. What you're doing ultimately creates a worse, less functional, less trustworthy society, and even shoplifters need a place to get groceries.

Yeah, the comment section is agreeing with Emma. It said, well said, and I'll extend it beyond just shoplifting to include things like buying something with the intent of returning it after using it for a few days. I remember someone buying a grill at Lowe's with the intent of using it for the weekend and then returning it. Which they did. Okay. Yeah, just didn't— steaks didn't really come out that well. I don't think it was me. I think it was the grill.

I'm not a big returns guy. Costco does have a huge return policy.

Yeah, it's so interesting. The Coogan or the Hayes mind cannot comprehend the return. I've maybe returned 2 things in the last 10 years. It's just not an impulse that I have.

It's because you're deeply in touch with everyone. So funny.

Anyways, we can—

Okay. Let me tell you about TurboPub, our serverless vector and full-text search built from first principles on object storage, fast, 10x cheaper, and extremely scalable. And let me also tell you about Gemini 3.1 Pro. With a more capable baseline, it's great for super complex tasks like visualizing difficult concepts, synthesizing data into a single view, and bringing creative projects to life. And thank you, the clapping in the studio is at an all-time high now that we're back to full strength in the TBP and UltraDome. So that's right, uh, Wilmanitis is giving some more context, uh, around anti-AI backlash. He says, in case you're skeptical that anti-AI backlash will become central issue in the next election cycle. Sanders just introduced a bill to halt all new data center construction and require the federal government to review and approve AI products before release. Interestingly, this idea of an AI FDA, the first time I heard about this concept was on the All In podcast. I believe Chamath Palihapitiya was making the point that an AI FDA was something worth considering. I think he's evolved his position, but It was something that, you know, the first time you learn about like the possibility of a fast takeoff, the possibility of AI doom, it seems really rational to say, well, let's review everything beforehand. But then there's natural effects and there's limitations to the models and we can't even do a puzzle on ArcGIS. So maybe there's a little bit more work to be done. Maybe there's a few more data centers to build before we actually get good things out of these models.

Noah Smith wrote a piece that I think is relevant to the data center moratorium, which is AI has the worst sales pitch I've ever seen. It's rough. His quote, our product will make you economically useless and possibly kill you, is not— says it's not a value proposition. AI leaders need to change their public messaging and fast. We don't need to read through all this, but you need to read this quote.

He opens with this quote, hi, Hi, do you have a moment? I'm from the Cursed Microwave Company. Our product is much better than a traditional microwave. Not only can it automatically and perfectly cook all your food, it also microwaves your whole body so you and your family are paralyzed and unable to work ever again. Don't worry though, because when everyone has a cursed microwave, our society will probably implement universal basic income and you and your children can just go on welfare. Oh, by the way, we estimate that there's a 2 to 25% chance that our microwaves will put so much radiation, will put out so much radiation that they destroy the entire human race. If a door-to-door salesman came and gave me this pitch, I would gently see him out the door and then quickly call the FBI. But this is only a modestly exaggerated version of the pitch that the big AI labs, OpenAI and Anthropic, are making to the world about their technology. And I completely agree with this. It's very important that AI lab leaders, you know, focus on the actual tangible benefits of the technology right now. Like, I think, You keep identifying this disconnect between like, people are afraid of AI and there's so much fear-based marketing, but then like every single person, like a billion people are just using ChatGPT to like get answers. And every person you talk to, no matter how, they can tell you for 20 minutes, lay out a very cogent thesis of AI doom, what might happen, Terminators, they can take you on this very reasonable scenario. And then 5 minutes later, the topic changes and they'll tell you how they use ChatGPT to like, you know, plan their vacation or something like that. And this disconnect just like cannot last. Yeah, yeah.

I wrote on January 9th, the phrase techlash was originally coined by Adrian Wooldridge in The Economist in 2013. He correctly predicted that the big developments of 2014 will be the growing peasants' revolt against the sovereigns of cyberspace. The Silicon elite will cease to be regarded as geeks who happen to be filthy rich and become filthy rich people who happen to be geeks. Over the coming years, the world experienced the Cambridge Analytica scandal, fear around the mental health impacts of social media on young people, and growing concerns around monopoly power in our digital world. The internet and the platforms that dominate it began to test the core foundations of our country and the free world: privacy, democracy, censorship, and more. The second tech clash has begun, this time because the average American believes that technology, specifically AI, is now a threat to their very way of life. Starting at the bottom of Maslow's hierarchy of needs, Americans have heard that data centers use a lot of water. They heard their power bill is probably going to go up because of it, or already have. They've seen the movie Terminator and have imagined how that might go from science fiction to reality. Watch Terminator. You still haven't seen it, right? No, I have seen Terminator. You have? Have you seen Terminator 2? Probably not. You're killing me. John, it's enough to ask me to finish one movie.

Now you're like, oh, you got to see the sequel. 2 is the best one, I think. But the end of Terminator, it's a good ending. The humans win, we beat the robots. Yeah. It's a good outcome. You got to push back on that?

No, I was gonna add, so earlier we were talking about like China and like how is China thinking about some stuff. Oh yeah, yeah, yeah. I found some interesting anecdotes. Okay, tell us, tell us. Okay, so Xi Jinping is like, if you basically compare like Chinese government to US government, Chinese government is probably like much more concerned about safety than the US is. Okay, interesting. Like there's all these things like, so Xi Jinping, we don't want other people to be able to do surveillance as well as we have to do it. Yeah, there's always like the take, which is like, you know, if you're super concerned about safety, well, what does that mean? You need this oversight over everything, right? Which is like, if you're China, you want to be authoritarian, that's like the thing you're going to do. But basically he's like, he chaired this, it was from Time, a rare Politburo study session on AI warning of unprecedented risks. It's listed, AI safety is listed alongside pandemics and cyberattacks. In their national emergency response plan. He's also said, he stressed the need for monitoring, early risk warning, and emergency response. So it's like, sure, that's like about safety, but also monitoring, right? No, no, no. It's kind of—

I wonder how this interfaces with the Bernie Sanders position. Like, will there be some sort of open discussion? Bernie's going around doing a lot of different conversations, that would certainly be like the next step if he wants to get through the, you know, the geopolitical pushback.

Even when you talk to a lot of like the pause AI people, very few of them are like ever really say the US needs to pause regardless of what China does. It's always like we need to have international, you know, agreement on it. Because otherwise, like, it obviously doesn't work. Totally.

Totally. Yeah. Yeah. If everyone could just give their GPUs to Tyler, He will watch after them. He can be trusted. He can be trusted. He can be trusted. That Gigacluster. Yes. Anyways. Yeah. So this story will continue to evolve. Good info. Thank you. Rune hit 300K. He says time to dox on TVPN.

Okay, let's do it. 300K, that's massive. Let's go. Congratulations.

Boom, boom, boom. Spore says—

I think we hit the gong at 2:52. Every time there's a Rune milestone, we must celebrate it to the fullest. Spore says— Really quickly, let me tell you about Cognition. They're the makers of Devin the AI Software Engineer. Crush your backlog with your personal AI engineering team. And let me also tell you about Console. Console builds AI agents that automate 70% of IT, HR, and finance support. Giving employees instant resolution to access requests and password resets. Continue.

Let's pull up one of the greatest videos created in the last year. Ooh, yeah. Spore says, RIP Sora, you gave us the greatest AI video of all time. Yes. Let's play it.

This was a great video. I did enjoy this one.

Sound, please. Yeah, you can—

Stop that, it's midnight, give me that. No, sir, no more fiddle tonight, got it? No more fiddle tonight. Make time with this thing, go home. Hey, what did I say about the noise? It's the middle of the night. No more stints on the porch. The door cam, the Sora model, I don't know what was in the training data, but it nailed this like doorbell footage. Like the graininess really leans into the flaws and it hides the flaws in the model. When you try and do something that's photoreal, it looks a little waxy still, but this is just perfect. And it's too low res to detect like, oh, the finger's perfect or whatever. That's a good instrument. That's fun. She really hits the cat with that door. Absolutely insane. Yeah. Well, the didgeridoo.

Oh, here's the thing.

Here's the thing. Human creativity. You had to string all these together. This was not one shot. This is like, no, no, this is like, you know, 10 prompts. I've done it.

I've gone to ChatGPT and said like, think of a funny prompt and it doesn't come up with something as novel as this. Otherwise I would be the creator of that. Hey, that's our gong. That's literally our gong.

Or former gong.

Our former gong.

Yeah, it's nice.

We made it into the training data.

Hey, is that aerobics now? Aerobics? Volume down. Pause off the neighbors.

Silent disco.

Cool down before 3 AM. Okay, it's good.

I love it. Uh, yeah, the Sora, the Sora news is interesting. I mean, obviously good As a reflection on like, okay, era of focus, we heard that news from like a week ago. This is like a very clear step in like refocusing. There is a question about like the value of models like Sora jumped ahead of MetaVibes very quickly. MetaVibes launched like a week before and when Sora came out, the consensus was like, oh wow, this is like definitely a step above of what you can do with Vibes, which was much more like an animated picture from Midjourney. It had cool, cool aesthetics, but it was way less like— it was very constrained in terms of what you could do. With Sora, you could automatically insert different cuts, generate something that looked a lot more like a native reel, even if there were sort of rough edges. But the question with every model is, you know, you spend money to train it. And then it has ongoing inference costs, the cost of a video model. It feels immense because I went back and looked at some of the first Sora videos that I generated. I'm thinking of me in the orange and white suit. Yes. One of the greatest AI videos. We'll have to play it at some point. But that one felt like it had about 1,000 times as much compute allocated to it than the last one that I generated. Because I generated a Sora like a week before this announcement. And it does feel like they had shifted the GPU workloads to other, to maybe Codex because that was the product that was taking off. What do you think?

There were some rumors where they were spending something like $10, $15 million a day on compute just for Sora, which is like $3.5 billion a year or something in this range. So it's like so much compute just on inference. And it's like, yeah, what's the actual value of it?

Yeah. And if it's not monetizing with crazy ad rates immediately or crazy API costs. Like, you're just in GPT-2 territory where Greg Brockman came on and told us that, you know, I don't know, they spent probably millions of dollars training GPT-2 and they were like, we had to pay people to use it. Like every dollar of inference was negative margin. We were losing money on every token generated. And then GPT-3 was in a similar boat. It was like, almost there, but they weren't really making any money for it. And then the GPT-4 training run happens. And that, I mean, looking back, that has to be an incredibly profitable model because I think it maybe cost $100 million to train. And then the inference cost, like they distilled the model pretty quickly, got to a place where I think that was very, very ROI positive based on the subscriptions during that time before they rolled out 5. And then, you know, you're always facing this battle of like, a little bit of a Red Queen's race, training the new model, depreciating the model across whatever the inference margin you get during the period where you have the best model.

Mitchell Green went on Invest Like the Best. And Patrick pulled out one of Leedge. He said Leedge is probably most famous for this letter. Mitch, Mitchell calls it the hierarchy of BS. It's his way of distilling what he learned from cold calling 10,000 companies. And I will go through it. If companies have good cash products— profits, they report those. If companies don't have good cash profits, they report on adjusted profits. If companies don't have good adjusted profits, they report on gross profits. If companies don't have good gross profits, they report on revenue. If companies don't have good revenue, they report on adjusted revenue indicators like GMV. If companies don't have good GMV, they report on monthly active users. If companies don't have good monthly active users, they report on subscribers. If companies don't have good subscribers, they report on downloads. If companies don't have good downloads, they report on page views. If companies don't have good page views, they report on what they were voted the best place to work in XYZ city.

Right now, this is very funny because the only news that we've shared from TVPN is that we're like the 40th The second most innovative company recently, but we're not a public company. If you want to trade a public company, go over to public.com. Investing for those who take it seriously. Stocks, options, bonds, crypto, treasuries, and more with great customer service. I want more of your take on this.

People that flex how many lines of code they're writing. Oh yeah. Like if your product doesn't have any users or revenue, you just report on lines of code.

Lines of code per year run rate is a crazy one I saw recently. LOCRR. That's an insane stat, but we have the solution. It will be released soon. Do you have a general update?

Yeah, what's the timeline, Tyler? Did you— when you went on the road, did you stop— locking in? Work?

The project can be done today, tomorrow.

Really? Does it have sound effects yet? It does not yet. Okay, then let's do sign— let's do sign.

In a day or two. Just one more prop. Fundamental mechanics. Okay.

I was fine-tuning some art. 12:07, chat. Ask Tyler the status of the product.

The project is not done yet, but I talked to Tyler and he said he's generating 25,000 lines of code an hour in advancing of this project. So I mean, he's clearly putting out a lot of code, and that will translate to a great product eventually.

The best entrepreneurs I know are generating millions of lines of code daily just to keep their About page updated. Up and running and humming.

Rough. Well, let me tell you about Restream. One live stream, 30+ destinations. If you want to multistream, go to restream.com. Just do it. Gwynne Shotwell is on the COVID of Time magazine. SpaceX is racing to build the most powerful rockets yet with the goal of returning humans to the moon. Gwynne Shotwell is leading the charge alongside Elon Musk. This is a good deep dive. You should go check it out. Go. The first YouTube video I ever made that went viral or like broke out, 'cause when you have—

Was why is no one talking about Glenn Shotwell? Literally, literally, that was not exactly the title.

So not literally. But it was, that was the whole premise. That was the whole premise. And normally I think I had 1,000 subscribers. And so getting like 1,000 views was like, okay, this is great. And if you can get more views than subscribers, that's like a banger. What was it called?

The title was the only reason SpaceX works. There we go.

That might have been retitled a few times, but you get the idea.

Anyways, no surprise that Gwen shot well. Yes. Running. Yes. Running a company that is shooting things, rockets into the atmosphere. No surprises. Well, FT has some reporting on the SpaceX IPO. The bankers involved are toying with the idea of allowing existing shareholders to sell out of their positions on day one. 2 of the people said, wow, that would do away with rules to prevent insiders cashing out or trading shares, which are typically imposed for 180 days after a company goes public.

I would think they're rolling lockups.

A third person said SpaceX is considering a so-called staggered lockup that would allow initial investors to slowly sell down their stakes over the course of several months. The deal is, quote, too big of an IPO to just unlock. Yeah. Musk's influence over the size and timing of the listing has been highly unusual, said one investor close to a banker on the deal. It's kind of scary how Elon is setting the price. It's not being done formally. Oh, interesting.

So it's not a full auction format. He says, this is the price, and you can either buy or not, and hopefully you buy. Yeah, interesting. The staggered lockup, it feels like it makes a lot of sense. You could just see, OK, this person's held these shares for 20 years. This person's held it for 10 years. They get 180-day lockup, a 90-day lockup, a 270-day lockup, whatever you want.

I don't know. Just imagine how much money the lawyers are going to make from unwinding all the different entities and the SPVs and the SPVs and the forward contracts with the SPVs into the forward.

It's going to be full employment for lawyers for sure.

XAI co-founder Croiss— Croiss, Australian now? Manuel Croiss. Okay. Is departing the company, which is, I think, officially the last co-founder remaining outside of Elon. So that's remarkable.

Well, it'll be interesting to see what the next, uh, what the next run, the next version of Grok does. Is there, is there a new— 4.2 came out, is that right?

Yeah, I mean, that was a while ago.

That was a while ago. So we're expecting like a 5 or 4.3 soon.

But yeah, I don't know if anyone expects it super soon. Yeah, right, because they're kind of revamping the whole thing.

Yeah, I wonder what they'll try to do with ArcGIV3 because they were the fourth lab that tested and they were the only lab that got 0%, although I don't know how much worse that is than getting 0.25%. But certainly, it'll be interesting. Ryan Peterson had an idea for Elon Musk. He said, "If Tesla makes a car with 3 rows of seats, each with its own pair of doors so nobody has to climb over everybody else to get in their seat, they will create a baby boom." the likes of which we haven't seen in 80 years. And Elon Musk says, noted, would you buy a car with 3 sets of doors? It would look extremely odd. It wouldn't be the very iconic, but that's sort of Tesla's thing. And the Cybertruck stands out on the road.

Model Y SL. SL. Size Lord. Size Lord, okay.

Well, yeah, so the YL has 3 rows. But it has 2 sets of doors. 4 doors. It's a 6-door car.

I don't know how big. I don't know.

Someone has to have done this at some point, a 6-door.

Having a kid jump in and just crawl to the back. We did that. Back in my day. Back in your day? When you climbed in that door, it was uphill to the third row.

Yep.

Both, and then uphill on the way out. Okay. Yeah. So it was a nightmare. It was a nightmare. We did it.

Yeah. But it made you who you are.

Made me into the man I am.

Yeah, and so you don't want easy street, extra doors in the back. No way. No way. Your kids are gonna be climbing. They're gonna be climbing all over the seats.

Yeah, it's interesting. It feels like Tesla's entire strategy from a merchandising standpoint has just been to make like more and more, as much as possible, just make the lowest number of cars. And so he's getting all this feedback But they already have like a 6-seater coming out.

Okay. Someone, someone shared an image.

Yeah, this is the data that you were talking about yesterday.

The Ambruster Stageway, the world's oldest and largest manufacturer of custom multi-passenger vehicles. And it's a Suburban that was converted and it comes with 6 or 8-door models. So you can have rows and rows. I don't know if you can scroll down and find it. It's from Talos Dreams in the replies there. But I don't know. Anyway, where do you want to go next?

Meek Mill says, I'm getting $250 for a tweet. Oh, interesting. I was fascinated because he's gone on this big tear of promoting AI, specifically Claude. And so— What is Nikita Beer going to say about this if he's getting paid for not checking out Claude? Is he basically just saying, I'm I'm doing undisclosed paid promotions. I don't know. Because he's certainly getting more than 250 likes. Yeah, I don't know.

He got about 250 retweets on this, 295. So I don't know, it's possible. Let me tell you about Okta. Okta helps you assign every AI agent a trusted identity so you get the power of AI without the risk. Secure every agent, secure any agent with Okta. And let me also tell you about Lambda. Lambda is the superintelligence cloud building AI supercomputer for training and inference that scale from 1 GPU to hundreds of thousands. And I believe we—

Eastland, last, last, last thing before we go into our first guest. Sure. We have to pull up this post from Eastland. He says, I've seen some fire fits in China, but I've never seen a jacket this hard in my life. And they got the back of this guy's jacket just says, Mr. Enjoy the Money. M-E-D-M? M-E-D-M. Mr. Enjoy Da Money.

Apparently that's a legit brand. That is very tough.

I like it. This might be the new meta.

This might be. The puffer jacket with the stitching on the back is very nice. There's a lot of fun examples of other swag in the replies. Well, without further ado, let's bring in Eric Goldman from Santa Clara University. He's the Associate Dean for Research and a professor there. Eric, how are you doing? What's going on?

I'm all right, thanks.

How are you?

I'm good. Thanks so much for joining. Uh, please, since this is the first time on the show, I'd love a little bit of an introduction, and then of course I want to go into the case today.

Uh, sure. Uh, I'm Eric Goldman. I'm a professor of law and Associate Dean for Research at Santa Clara University School of Law. I've been doing internet law for over 30 years, teaching, researching in the area. And my area of specialization includes how users talk to each other online.

Okay, and when did you start tracking the Meta-YouTube lawsuit? How long has this been going on? And then I wanna hear about your expectations for the case, your interpretations of the case, how things played out.

So I started tracking the cases when they were filed. I can set up electronic alerts to notify me of new filings of the cases. And I had to give that up after a while. These parties were just beating each other up in court with an enormous volume of very picky filings. So I stopped tracking at that level a while ago. It's hard to track the state court cases. There isn't an electronic tracker for that. So it's been a little bit harder to get the information in that case. And this has been going on for a couple of years. Many millions of dollars have been spent by both sides in these cases.

So, uh, take us through what actually happened, how we should be interpreting the, the, the, the verdict, and, uh, and then we'll go into where we go from here.

Uh, so we need to step back for a moment, and let me lay the, uh, describe the landscape, and then we'll see how this case fits into it. Yeah. Um, in California state court in Los Angeles, there have been hundreds of plaintiffs who filed lawsuits against the social media services. These cases have been joined together in a proceeding, but they're not a class action. So there's hundreds of parallel lawsuits all sitting next to each other. A similar lawsuit is also pending in federal court in Northern California. It's called a multi-district litigation or an MDL, and there are thousands of plaintiffs in that case as well. Similar format. They're sitting next to each other. It's not a class action. That case also includes entities like school districts and Native American tribes. So there's other entities in that as well. And then there have been individual filings across the country by state attorneys general and others in the lawsuits. So there's basically just a litigation mania taking place across the United States.

What does it actually take to qualify a plaintiff? Do they just look at their screen time and say, oh, you use social media for 5 hours last week, you're addicted, and then they figure out how to trap you?

There is no screening for who gets named as a plaintiff. They just raise their hand and say, I think I qualify. They've been joining these lawsuits. Lawsuits. The lawyers, of course, are helping them, and each lawyer is trying to add to their portfolio of plaintiffs that they have, that they're representing. But whether they're actually going to get any recognition from the court or money, they'll have to make their case eventually. So that's part of why the trial was held that led to the verdict that came out this week. California state court case is they said, we're going to pick 3 plaintiffs and we're going to do what are called bellwether trials. We're going to let the parties make their case to the jury and we'll see what the jury thinks. The goal was to do 3, not just 1, with the idea that plaintiffs have so many different stories. The victims are each in their own unique situation that we wanted to get multiple data representations from the pool of plaintiffs. To start to be able to estimate the overall value of the case. So the first one came out and the jury agreed with the plaintiffs, did not agree with the defendants, and awarded $6 million in damages. Now, this is just the first data point of what's expected to be 3 just in the state court case. There's lots of activity taking place throughout the country.

So how, how should we think about the actual ruling? Wall Street Journal has a headline, Meta and YouTube found addictive and harmful. What— how are you interpreting the nature of what the plaintiff attorney proved?

At the core, the plaintiff's lawyers had to make a number of novel arguments, both to the judge to get to the trial, and then in front of the jury, they had to convince the jury to to recognize the harms that the victim suffered and attribute them back to social media services. And the jury agreed with all of that. And so the way I think to interpret this verdict is that we've now heard from some ordinary Americans— I don't want to say, you know, metaphorically picked off the street— and asked them how do they feel about the accountability of social media services harm of their users. And the jury said, we think that the social media services should be responsible and we should assign some pretty significant dollar values to that responsibility. Is that—

is $6 million seen as a significant dollar value in the courts? Because these companies are so big. But again, this could just be the beginning of a wave.

Yeah.

So where does this go in terms of the damages as they snowball? Will there be a class action, some sort of master settlement that goes way bigger?

Just about the numbers for a moment. $6 million is far less than what the plaintiffs requested. It's far more than I think the defendants had hoped. And as you were pointing out, if you multiply it times 3,000 potential plaintiffs, so there are already in the queue, that translates into something on the order of like $20 billion. Again, maybe numbers that Meta and Facebook and Google have. But TikTok and Snap, if they're also going to be coming along for the ride, maybe they don't have that. Maybe that becomes uneconomic. So the numbers grow, I think, really rapidly because not only is it the people who've already filed, it's all the other potential users who will say, just like, like you were suggesting earlier, who will say, you know, I've been addicted for 5 hours on my site. There could be tens of thousands of more plaintiffs coming through. The numbers on this could get extraordinary. Now, remember, this is only one data point. The other two bellwether cases could establish no liability or they could assign much larger damages. And so we'll see if that $6 million is even the right number for the parties to start estimating the settlement. Sure.

So will those other bellwether cases for sure resolve before this gets appealed? Do you anticipate that this ruling will get appealed all the way to the Supreme Court? How do you think about the interaction between the bellwether cases and then other legal proceedings?

So I believe that the appeals are going to be lodged now, but I would expect that by the time that the appellate court is ready to hear the appeals, the other two cases will have been resolved. And ideally, they'll be all handled together. Whoever doesn't get the results they want in the other two bellwether trials would go ahead and appeal those as well. All these cases are going to be appealed until there's some kind of definitive resolution. And I would expect appeals to go up all the way as high as the court will take them. The U.S. Supreme Court has discretionary review, so they They may not take it, but I expect the cases to be appealed to them unless there's a settlement. And you did ask about that. And let me just close the thought. The difficulty with settlements, because they are not class actions, the defendants cannot settle against all the potential plaintiffs. They can only settle against the ones who've already expressed— who've already signed up to the case. And so one of the tricky aspects of this case is how could they price the settlement to pick up all these other potential plaintiffs who are waiting in the wings.

Are there any other countries that have gone through this process of litigating social media addiction? It feels like uncharted territory when I see things like the effect of the like button or endless scroll or feeds. There's been a conversation about the effect of those technologies for a long time, but this 'Cause this is the first time I've seen them actually been in the court of law.

That's a great question. I don't actually know if there's been any trials on these questions in other countries. And other countries don't always have a jury system like we do. So I do think we are in some new ground here. Having said that, other countries often can regulate the specific mechanics of online publishers in ways First Amendment may not protect or permit here. So the other countries might very well have already dictated that certain things cannot be done that are part of the litigation now.

Yeah. So do you think that there's a hope for sort of new federal regulation alongside what is going on with Section 230 that sort of sets the rules of the road at a national level that then if you're in compliance to you can't be held guilty of, you know, this, these, all these lawsuits.

It's possible that we could get some kind of federal legislation that provides some kind of security or safe harbor for the defendants. Yeah. That would also preempt any of the state laws that would conflict with that. I don't see that anywhere in the Overton window, the window of what's actually being debated today. Yeah. But maybe if the services are feeling a pain, they would be willing to, um, uh, to pursue that. The reality is today that states throughout the country are passing laws that, um, govern the same issues that are at issue in the litigation. Um, and so unless there's some federal preemptive laws, the, the defendants, the social media services, are going to have to navigate this ever-growing stack of state legislation. Uh, Jordy, please.

Do you think we Will we get to a point where when you open a social media app, it has like an addiction warning, like you might see on a cigarette box? Is that where this is headed? Or if this goes far enough, are the platforms running the risk of needing to remove the like button because it hurts people's mental wellbeing or eliminating infinite scroll or app-level usage limits? Like, what are kind of like the extreme sort of downside scenarios for the platform?

So there have been some states that have enacted mandatory warning labels like you're describing. Those are going to be subject to constitutional challenge. It's not clear to me that they're actually constitutionally permitted. For example, Texas's law has has, I believe, been enjoined on that very point. So the warning label approach, I don't think, is likely to be the final resolution in any of the disputes here. I think that that's going to be an effort that probably isn't going to either solve a problem or be constitutional. It is already the case that states have passed laws that have done things like tried to ban auto-scrolling or infinite scrolling or autoplay. Or the like button or like counts or whatever. States are going to get to that level of granularity and they're already doing so. Many of the things that are already part of social media features today are regulated by state laws that are on the books, but possibly being in the process of being challenged. And I think the bigger question isn't will we lose our like button or will we lose infant scrolling. I think we would consider that, for those of us who are aficionados of social media, who think that there's some value to them, we would consider that to be maybe the best possible outcome. I think the more serious outcome is what social media services drop out of the industry entirely, what social media services add barriers to user populations having access to social media, and how much we see the circumscription of social media conversations entirely. In other words, I don't think we should assume that social media will exist in its current form in the future. The question is whether we'll even have social media in the future. That, I think, are the stakes of the cases and the legislation. Yeah, yeah, yeah, that's fascinating.

What other industries have been through this type of pivotal moment? And where should we be drawing analogies or where should we avoid drawing analogies. People have said social media is the new cigarettes. Jordy was making a point about the warning labels on cigarettes. It feels like that might not be the actual best analogy. I was talking to Tyler on our team about the risks associated with driving a motorcycle. And I was making the point that there's an instruction manual that you buy— that you get with a motorcycle that, you know, puts a lot of the risk on on you if you choose to transport yourself.

If this really progresses, like the precedent it sets is like, okay, fast food companies shouldn't be able to use bright colors in their logo. Yeah, there's a lot of different things. Musicians shouldn't be able to play hooks that are just too catchy, maybe?

I don't know. Yeah, but where do you think the best analogies are?

I'm not a fan of analogies between online and offline. Activities. And in particular, I don't like the analogy to tobacco. And let me make clear why. And I think that I'll start to enlighten where the risks and opportunities are. Tobacco, we would generally say there are no health benefits to consuming tobacco. Nobody is healthier because of that. It's just either neutral or negative. But social media consumption has many social benefits. There are many communities that that are thriving online and who are, you know, I think, justifiably concerned that their benefits are at risk in this litigation without them even having a say in it. So unlike tobacco, social media is a mix of potentially very helpful things and things that could potentially be harmful for some of its consumers. And those kinds of mixed uses technologies that have both benefits and potential detriments are really, I think, a better analogy than tobacco. And I don't know that we have great circumstances where we can point to where mass tort litigation has targeted and potentially removed from the industry these mixed-use scenarios. And in the end, the things that people are being addicted to or that are allegedly causing harm are people talking to each other. Yeah. And that kind of speech-related theme is unlike almost any physical product that we might draw an analogy to.

Yeah, it's a fascinating case. We really appreciate you taking the time to come chat with us about it. I hope you have a fantastic rest of your day.

Yeah, come back on as there's more news.

Yeah, we'd love to talk to you again in the future. Scratching the surface. This was really helpful.

Been great talking to you. Thanks for the opportunity. Have a great rest of your day.

We'll talk to you soon. Our next guest is in the TDP and UltraDome. First, let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agent to deploy web apps, services, databases, and more while Railway automatically takes care of scaling, monitoring, and security.

We got to make it illegal. If I drop a good one-liner in a group chat, it should be illegal for people not to chime in, react, hopefully get some laughs.

Yeah, the like button's just going to be like a circle, whatever.

Good to meet you.

Nice to meet you. How you doing? Introduce yourself for those who are not familiar, since it is your first time.

My name is Nima Jalali. I'm the founder of Salt Stone.

OK. Founder and CEO. Yeah. Take us back. And I'll give some context. So I met— Nima recently moved into my area. And I think we met within like a week of you moving in. And so I haven't even gotten like the full story, even though we've been hanging out the last couple weeks.

Cool. Yeah, full story. I was a pro snowboarder. I heard you're from Pasadena. Yeah. Is that right? Yeah. So I'm from La Cañada. No way. Yeah. That's awesome. And so grew up there. I was obsessed with skateboarding, and then got into snowboarding, and started going to those local mountains right here.

Mountain High, Big Bear.

No, like Mount Waterman. And it used to be called Cracka Ridge. Sure. Have you heard of that? Yeah, yeah. Yeah, and so back in the day, when I was in high school, we had El Niño winters. Yeah, yeah, yeah. Like a ton of snow, and they would actually operate. They don't operate anymore. And so I would just get out of school at 12 every day and go up there 5 days a week. And I got good and went off and turned into a pro snowboarder.

What does that mean? Does that mean like speed competitions, trick competitions? What are you doing? Because there are multiple ways to become a professional snowboarder, correct?

More like freestyle.

Yeah, so there's basically like two paths. There's like, think like lifestyle guy, who's just like going around making movies all the time. And then there's like the competition track and there's some crossover. But generally there's like you have sponsors in both departments. Yes. But one, one person is focused on like winning contests, going to the Olympics. Yes. Going to the X Games. Yes. Doing things like that. And there's then there's the more like guys that might do backcountry or street or park, but they're focused on producing. Yeah. Like parts basically. Got it.

I didn't know you knew so much about it.

I know a lot. Yeah.

Yeah, so I wasn't the contest guy. I was more in movies and in magazines and stuff. Oh, cool. Yeah. So I went off and did that. How long were you doing that? Pro for about 10 years, from about 20 to 30. 10 years, that's awesome. Yeah, it was amazing. I mean, that was like my college, really. Yeah, that must be so much fun. Yeah, it was fun.

I feel like entrepreneurs can probably resonate with what a pro snowboarder is doing, where your job is is to basically produce, write like a banger part, a season, potentially multiple, and there's like this prep where you're basically like— What is part? Like that's like a 5-minute video that might be released independently or as part of an entire movie. And so your job is to do enough tricks, stomp them, as Nemo would probably— Stomp them.

It's a lot, yeah, there's a lot. I mean, there's like, you pick out a song that you wanna have in your part, there's first part and then the most prestigious is being in the last part in the video. So it's like you got this video and everyone's supposed to be on the same kind of team to make this best video. There's probably 10 snowboarders going after it and doing it. But there's a little competition within that because everybody wants to get last part. You know what I mean? And so it's not a team sport. You're really out for yourself. And there are a lot of lessons that you learn especially growing up skateboarding where it's like fail, fail, fail, fail. Like learning how to kickflip takes you 6 months of just failing, and then you figure it out. And so—

Yeah, then the other thing is these parts come together. It might be like 4 or 5 minutes, right? It's just one trick after another, but you're missing— sometimes they'll include it, but they're missing the blooper reel, which is like sometimes you have to fall really, really hard 20 times in a row to land the one that you make it look easy. and that gets cut out. So I feel like there's so many lessons out of that. A lot of successful entrepreneurs would have failed miserably for years, and then they have that breakthrough product or feature, whatever it is. In snowboarding, it's happening on a day-to-day basis where you have one season to put together your part, and you're kind of racing against Mother Nature. In some sense.

Can you chase the winter into the southern hemisphere effectively?

Yeah.

Yeah? Yeah. So you would be— how many days would you actually be snowboarding over a year?

I mean, 5 days a week. I ended up— I lived in Tahoe, Mammoth, Utah, and all that. But I ended up landing in Big Bear, just because it was like the weather's always good for if you want to just snowboard every day and train. The weather's always sunny and nice. And it's not like icy or cold. So I would just go there and snowboard every day, and then fly out of LAX to wherever I needed to go.

And Big Bear is basically one lift that you're just going around and around. And there's like 50 features you can hit on one. So you go, and you might be hiking a little bit on one feature. But you're basically lapping it. So people that don't like park go there, and they're like, this is the worst mountain ever. If you're used to skiing in Mammoth or Tahoe or whatever. Colorado. But if you just want to ride park, Big Bear is incredible.

Jordy, we're going to have to go, man. I know.

I know. No, I went through— I did almost like 50 days, I think my junior year of college, a lot at Big Bear. I would just go up and lap the park. Nice. A lot of good memories.

Yeah, so it's a project. It's a project that you're— What's that?

Where do you ski in the summer in the Southern Hemisphere? If it's summer here, I imagine that even Big Bear, there's no snow? And so you have to go to the southern hemisphere.

The only time I snowboarded in the summer was going to Mount Hood, where it was— there's a glacier. Oh, OK. Do you know about that?

It's still snow? I don't.

There's still snow. So it's in Mount Hood, and they have the summer camp. And so all these kids go, and a lot of pros go and stuff. But honestly, during the summer, I would just skate. I would skateboard. OK. Yeah.

That makes sense. OK. OK, so the reason you're here is because you built Salt and Stone over the last 8 years. Partially exited this week. I don't know which— I know the numbers. I don't know what numbers you're disclosing. But yeah, take us through what was the transition like? I'm assuming you didn't just retire and immediately start Salt and Stone, or was it effectively instantly?

So I had a couple ventures within that industry, like the surf, skate, snow world. And then Salt and Stone was this idea that I had had.

Which is like, I don't know if you can give any context on that, but brutal industry because every single pro and everybody adjacent also wants to start ventures within the industry.

Yeah, that's true. But I mean, there's just such a ceiling in that world, unless you end up being a Burton or a Quicksilver or something like that, right?

Yeah, and even those brands. Sense of struggle. [Speaker:CHRIS] Totally.

So I knew I wanted to do Salt and Stone and I wanted to do something on my own, to be honest with you. I had business partners and everything and I wanted to just see how far I could go if I just went all in, 100%, like not have to worry about waking up at 2 in the morning and doing emails and just going so hard and just, I could justify that if it's just all me and I'm just going for it. And so, yeah. And so, transitioned over to that full time. And it's been just a rocket ship, man. It's been such a great, such a great— Yeah.

You guys did $165 million last year. Yeah. Scaling still. What was the first product?

The first product was sunscreen, actually. Yeah. So sunscreen was again, it's like a brute—

I would say like from my perspective, sunscreen is like a brutal category because like a lot of people use it throughout the year, but like much fewer people actually are using it enough to need to even be on a subscription. And then oftentimes you're buying it just in a random hotel retail store because you're on vacation. Anyways, but how did that go?

Yeah, I always wanted to do deodorant. And sunscreen was the— it just happened faster as far as searching for the perfect chemist, contract manufacturer, and all that stuff to bring it to life. And so sunscreen came out. The brand was profitable from day one. And then when we launched deodorant—

How did you sell? Were you just selling it D2C?

So we had some retail on day one. So I had retailers lined up. We had, I think, about 40 to 50 of them. And so as soon as we were shipping orders, we were collecting payment. And so I funded it out of my own pocket to start, but was able to pay myself back pretty quickly.

And the business— Were those 40 to 50 stores, were those individual stores or chains?

They were individual stores for the most part, yeah. Yeah. And then it was when we launched deodorant was really when stores started coming to us. Yeah.

What are the economics of getting one sunscreen product— it sounds like one SKU— into one of those stores? Are they buying like a $100 box?

Oh, there's a minimum. From my memory, I think it was like a case pack of 12 sunscreens that came out to like $300 or something.

OK, yeah. And then you can sell it at a markup.

SRP. That's right. Okay, that's right.

How quickly did you realize that, like, my experience having invested in CPG over the years is the number one, the number one factor that leads to success is not like operational excellence. It's not always just the team. It's just like how good is the product. And I've seen a lot of like exceptional teams that have like all the operational shops that have all the experience come out with a product that might be fine or pretty good, but they just don't go anywhere. They can never reach escape velocity, 'cause the product fundamentally, like, doesn't really sell itself. Like, you can sell it, might cost a lot to acquire customers, the sell-through's not that great, retailers don't really love it. And when I first tried your deodorant after trying probably, like, 20 different, like, better-for-you deodorants, I was like, wow, this product is like incredible. And I've like retained across years, even though I, I don't even know that I've maybe bought it on the website once, maybe bought it on different stores online, or I just buy it in the grocery store. But I'm like permanently retained because I tried everything else and this is just the best. It like goes on well, it smells good. And so I was just like sold off of that. And you didn't need to be like the best at like email marketing to me or like have the best like retention flows because I was just like, it's a good product. I've tried everything else. And so I'm wondering like how you— how quickly you realize that from like a product development standpoint? How much of like, what is your ethos around product development? When is a product ready to actually go to market versus just still in that kind of testing phase?

Yeah, that's why we launched sunscreen before deodorant because we were just trying to get everything perfect. And so we did something in deodorant that hadn't been done before, especially in clean deodorant. Deodorants before didn't smell the way I wanted to. They didn't have these sophisticated scents, and clean deodorants didn't work, or they weren't really a pleasurable experience to use, and they certainly didn't look good.

They'd be like mint. I don't want to smell like toothpaste.

Yeah, exactly.

It's like, why shouldn't it smell as good as your perfume or cologne, right? And so just hitting it on all cylinders and making sure it's perfect. And for me, I was really making it for myself, right? What do I want? And it turns out what I wanted was what everybody else wanted. Yeah.

Did the company ever almost die?

No.

I love this story. It's been a dream come true right now. It's been fun. It's so funny because the classic philosophy in venture is just like, yeah, we almost— years this time, we almost died, and in talking to you, like getting to know you just recently, it just kind of seemed like it was just like permanently up and to the right, and you told me one story that was like not like kind of annoying around on the capital side, but nothing that was like, it didn't feel like you experienced that much hardship. You kind of just one-shotted entrepreneurship. And it's so crazy, because I know so many, you started the company at the peak of the D2C boom. Like, this was the time— this was 2017, right? And so this was the time that everyone was like— Red Antler, Gin Lane were just pumping out brands. There was so much capital flowing in. I'm sure you had many competitors. There was like a— yeah, there was a school on the East Coast. I forget the name of it, but they had an MBA program that was like every single— Harvard. Not Harvard. It was one— No, there were a lot of MBAs that were coming in, like, I'll just take B2C product. Every person in an MBA program would be like, I'm building a D2C brand, and they were just picking off all categories.

And there were some really good outcomes that people were tracking against, like Dollar Shave Club and Harry's. And there were a number of companies where it was like, oh, they did Warby Parker. They raised money. They did the VC playbook, and it sort of penciled out for everyone. But then later, people realized, like, oh, those were more like one-off exceptions to the rule. Where you get a Unilever who gets excited and buys Dollar Shave Club for $1 billion, and maybe doesn't wind up realizing $1 billion of value, because it's just a young company. So, tricky.

I mean, honestly, I feel like it's just the power of a founder who's just going to be relentless and go up against the big guys, right? Because I interview people from the big guys all the time, and I'm shocked at how sleepy some organizations are, right? So if you even have a team of 3 people that are just relentless— and you guys know from what you guys do— it's like you can't compete with that. I don't care how much money you have, or what incubator you're in, or what VC's starting you. It's if you have a founder who's just going to be relentless and—

How did the approach to funding evolve? Because you said you were profitable from day 1. You did raise at a couple different points. I know it's a little bit of money, but did you care about maintaining profitability, or did you ever go through periods of growth where you thought, OK, we can burn a little bit here to get to the next stage?

We've always been profitable. That's always been important, right? I just want to make sure the bank balance is growing. The raises were secondary, right? It was me sort of taking chips off the table. The business has just been so profitable that we didn't really need to inject connect it with money, you know. And so it's a healthy business, man. I'm blessed. And venture capital?

Not really my cup of tea.

Oh, it's just so crazy. I mean, it just goes back to you guys nailed so many different elements of the product, and yet I know people that started deodorant brands during that same period that just didn't— they just didn't go anywhere.

It's always been really team-like. The early team? Yeah, yeah. So you have the idea, solo founder, but— and you mentioned co-packer. Did you work with a formulator? Did you hire a salesperson first, operations manager, somebody just to help you, personal assistant? Like, what was the stack?

Yeah, so first 2, first 3 years was myself, just myself, right? And then for that, it was really working with contract manufacturers, chemists, but also, you know, bouncing off my internal network on like, hey, I got this deodorant sample, like people I trusted, their taste, and what, you know, here's the goal, this is what I'm trying to achieve here, like let's test it. So that, myself, you know, my wife, like constantly we're smelling each other's underarms, you know?

Is it working? In the lab?

Yeah, you know, it was just relentless, man. It was like, we know what we want in a product, we see what else is out there, we have all the other products on our shelf, right, like to just see what, what they're like. Yeah, let's make something better. Yeah, right. And so, and then 3 years in, I hired, I hired somebody who really took on all the ops, all that stuff off my plate. That's not where I excel— ops and like finance and like all that. I'm more brand, product, anything the customer sees. That's what I love. And so when she took all that, and she really excels at that stuff, and it was me and her for like 3 years, 4 years after that. Wow. Or like, like 2, 3 years after that. Um, that's just a couple people.

This is just the 2 of you. 2022 and you're still 2 people? Uh, no, 2019.

No, it was like— yeah, sorry, my years are, uh, yeah, 3 years.

So like 3 years with 2 people and 6 years yesterday.

Then we start hiring. So she came on board and, and it really— I saw how it would really excel the business and I got to focus on what I like to do. She came in and crushed it way better than I could do on the other stuff. 3PL, logistics, all that stuff. and then I saw power of team, and then from there, we just started hiring people, hiring people, and then just got the confidence to keep hiring, as, you know, 'cause the more we hired, you know, we hired the right people, then the business kept growing and growing and growing, and then all of a sudden, it's 166, and we're the best-selling deodorant on Amazon.

How big is the team now?

Uh, 50, 55.

That's still really tight. It's really tight.

It's really good. We have a high bar for who we bring in. Like, it's, you know, we'll interview people, and I'll know within 5 minutes, like—

Are you in the office, or remote?

No office, all remote. No office, all remote.

All remote. This is like the most insane story.

It's like most of the time you get to this moment, and just like the most battle-scarred founder. I'm telling you, man, we're blessed.

It's been a fun ride. OK, so walk me through the product portfolio expansion. How that happens. And then are you subdividing sales reps by region, or vertical, or channel? We don't have sales reps. You don't have sales reps? No. No. Sales reps? Never heard of them. Product sales reps. So here's the thing.

You got to create a brand that the retailer wants, right? You don't want to go and just push something down a retailer's throat and have your sales guy knocking on the door and all that stuff. And so that was it. Really focusing— like, this wasn't all just like, oh, it's just happening, it's happening. It's like an obsession, right? Like, I turned into an advertising expert for like 6 months. All I did was want us to have the best ads, the best digital presence, right? And like, create a brand that the retailers needed to have, right? And then from there, then those retailers need to have you, and they come knocking on the door.

What was that advertising process like? Were you looking, were you reading Ogilvy, looking at the greats, watching everything?

It's just looking at all the competitors, seeing how they do, right? And, and really it's like not looking at the other indie brands, like looking at the big brands, right? Like I always want to take inspiration from the brands like, like the Nikes of the world that are going to be here in 100 years, cuz that's what I want this brand to be, right? I don't want— this isn't some like influencer brand. I'm not an influencer, right? I'm not in front of the camera. Like this is something that, um, I, I want to be a legacy brand that's here long after I'm gone. And so those are, those are the brands I look at for inspiration.

And then, uh How are you actually instantiating your learnings? Are you directing photo shoots? Are you casting models? Are you writing copy? Right now? No, no. Once you go through that 6-month brand exercise, you become the expert. Are you taking a project, a brand project, from start to finish? Or are you picking an agency or hiring people?

It was start to finish. So there was a time where I was picking out models, picking out photographers, videographers, helping with the edit, like all that stuff. The edits here, and then go in and work with— Give feedback. Yeah, yeah. And if they're static, like still photos, I would go in Figma, drop text overlay, figure out what to say, like all that stuff. And yeah, I mean, I just threw everything at it, man. All I did, I gave up all, like everything, all my hobbies, like snowboarding, skateboarding, like all that stuff. Like I got into golf for a second, all of it ended. It was just like, I'm going to go in on this. But like when you get a signal that the thing is working, then And you want to.

Because the bank balance is going up.

Bank balance is going up. You're having fun. It's like, really, your purpose. It's just like, nothing else I want. Like, I want to build it. Yeah.

What do you think about international expansion? What do I think about it? Yeah. How has your thinking evolved? What's the strategy? Is that something that— a lot of companies go through this moment where they're like, maybe it's so operationally complex it'll change the business, so let's put it off. Let's maybe wait. Until we're at a point where we can team up with a bigger company, and through a merger or acquisition, and let them bring their operational force so that you don't need, you know, a person in every locality, because they will bring that to bear, and you're set up for success. Yeah.

No, so we've already expanded internationally, and, you know— As I expected. Sephora Canada, Sephora UK, Space NK in the UK, Sephora Europe we just launched, Middle East, Southeast Asia. So on, so on. That being said, there's a lot more opportunity, and that's one of the reasons I chose Advent to be the partner here, is because they have a strong expertise in international, and I feel really great about them. I mean, look, my goal was never to just exit out fully and just put it in somebody's hands and let it go to shit. That's not what I want. I want my grandkids to look at this thing and be like, oh yeah, that's what my grandfather built. I want it to be around. I want it to be what it was always meant to be and not turn into to some discount brand.

So, yeah, what was the— how many— did you have a bunch of opportunities to sell prior to this moment? I'm assuming people were just kind of seeing public metrics and sell-through and all these things and hounding you at different points. What was the process of knowing when the time was right?

We had a lot of private equity reaching out, a lot of people reaching out in general. And so I worked with Raymond James, who I love. And I would just forward it to them, and they told me when it was time. And it was like, let's go. Let's go explore. Let's go explore the market.

Yeah. So, this was not a story where you met your acquirer, like, years and years ago?

We'd been talking for about, you know, for several months, 6-plus months, you know. And I really, really like them, you know. And for me, it's— when I did the deal with Humble Growth 2 years ago, you know, we had, like, 15 private equity funds to choose from. and I like them because of who they— No, we had a lot. We had a lot of bidders.

No, no. I just think if you were looking for the hero's journey of founder stories, this isn't it. You can turn it off. I mean, it is, in a way. It's missing some plot points.

There's a lot more to it. It's just choosing good people to work with, right? People who can do it with integrity and that I want to work with and that are aligned vision-wise on what the brand is going to be in the future, and let's go build that together.

Yeah. What advice have you been giving to people that want to follow in your footsteps? This is kind of what I feel like every CPG founder imagines is just like, yeah, I'm going to be building for 8 years, and then I'm going to sell for— $500 million to $1 billion to a strategic. And yet, the hit rate is obviously something probably like 1%, right? And over the last year, I feel like there's actually been a dip in new brand formation. At least that's what Sean Frank was, I think, mentioning on, I think, at the end of last year. His point of view, he's the founder or the CEO of Ridge, and he's like, okay, in 2 years, are people gonna want new brands to choose from? And his point of view is like, 100%, right? Like, there's constantly a desire for newness and that kind of founder-led product development approach that made Salt Stone what it is today. So yeah, what advice are you giving?

I mean, honestly, like, I didn't read any entrepreneurial books or really listen to any of entrepreneurial podcasts or anything until recently. I just went off instinct. We're fighting for our life. My advice would be to go all in. You can't go and be like work-life balance, and I want to check out at 5:00, because there's going to be someone right behind you that's going to come and take your place and be that brand that comes in and does what you want to do if you're going to just chill. So you got to make sure you love it, because that's the way you're going to be able to— do it basically around the clock from the moment you go to sleep to wake up. It's something you gotta love to do, and it's gotta be your passion, right? And so you gotta just go relentlessly. I would say forget the work-life balance stuff. You just gotta go hard. You gotta go all in and just use your instincts. You just gotta be competitive and go after the big guys and don't be afraid. You gotta go for it. Go all in.

Yeah, I like the focus on the actual incumbents. Like a lot of people will focus too much on like, okay, who are the other new brands in my category? And just actually studying like, okay, what, what makes the big players actually successful? It's like, okay, massive retail distribution, like actual like IP on the product side, all these things. Yeah.

I mean, for us it feels like in beauty there was such a playbook, like every brand looked the same, all the content was the same. It was like pay the influencer, have the influencer talk about the product. Post it on your social, like, over and over again, and that's the playbook. And I didn't want to— I didn't even know anything about beauty, really. Like, I'm not— I don't come— I'm a skateboarder, you know.

I don't come from beauty.

I like fashion brands. I like, you know, lifestyle brands. And so coming in and just being inspired by, you know, the Nikes of the world, the big brands, instead of looking at beauty, I think played in our favor because we came out and it was like, oh, this is different, you know.

Did you do any, like, community marketing Because sometimes there's a brand that I love. Let's say maybe it's like, I would say like if a deodorant brand was putting together an event, I don't think I'd be like, I want to, I got to be there. But did you, did you do anything that like worked that broke through that like was material to the business? Because I feel like sometimes it's very distracting for CPG brands to like do IRL marketing early on because I'm like, I usually will ask a founder like, okay, how many units have you sold? In the last month? And they're like, 1,000. I'm like, OK, then don't spend $30,000 on some activation. You should just make a product that actually sells well, and then you'll have opportunities to do things.

Yeah, I mean, early on that was my philosophy too. It's like, why are you going to go waste money on something that you don't know is going to move the needle? So it's like, spend it— like, if our ads are going well, let's just pour more money into that versus doing some pop-up somewhere. But now we're at the point where those IRL pop-up I think it's good. It's good brand building. And so we do that now. We do pop-ups at conventions.

Yeah, but pop-ups are, I would say, different than a lifestyle event that is just a bunch of people hanging out.

Yeah. What about owned retail, like flagship store? Have you looked into that?

We're looking into it. So, yeah, yeah. So we're looking right now. Yeah. Yeah, yeah.

I mean, it says a lot that you didn't jump into that in year 2, for example.

Yeah. I mean, it would be tough to do that and maintain profitability, right? Totally. And so it's like you're fighting for your life. You want to make sure it's— it's profitable.

Yeah, it's a balancing act. Like, you need enough awareness that you're actually going to get upside, but then if you have complete awareness, it's probably like you're already stocked everywhere. So it needs to be in the sweet spot. Yeah. Makes sense. Interesting.

Such an amazing story, honestly. It's like a very unique— It's a great story. It's amazing because it's exactly what people set out to do, and yet it's so uncommon to just like— go up into the right every month.

It's very refreshing. It's like work hard and don't get caught up in a bunch of stuff that doesn't matter.

Do the things that matter, right?

And John, you're going to be relieved. He's now a David Senra enjoyer. Oh, really?

Love his podcast.

He's fantastic. So he's getting to enjoy David Senra after climbing the mountain. That's amazing.

That's funny. I hear that. It's like I hear the hustle stuff and you got to do this and you got to go all in And I'm like, yeah, I naturally kind of do that. It makes me—

It works. But even— yeah, I mean, David talks about this a lot, where even a lot of his audience members are not listening to it and saying, oh, I never considered working hard. They're saying, like, it's a reminder. It's a meditation on their current philosophy. And then it's a bunch of other examples and just confidence to continue being different, because because there's a lot of people, as simple as focus is, there's a lot of people that feel pressure to continue their life.

Or they need to have this super complicated 7-part strategy.

That, that, and then also just like the work-life balance thing. Like there's a lot of pressure to not be that person who's not, who's turning down invites to the golf trip. And so the Founders Podcast definitely like reinvigorates you to like add more confidence that you're not crazy, you're not the only person doing this on Earth.

100%. Yeah, I love his passion.

It's great. I'm going to introduce you guys. You guys are going to have a lot of fun.

Yeah, this will be great. Brand-wise, though, we're just getting started. Honestly, it feels like that. And so this partnership is exciting, and I can't wait to keep building this thing.

Yeah. Amazing, dude. Congratulations. Thank you so much. Thank you. Yeah, thank you so much for taking the time to come chat.

See you back at the ranch. This was great.

Let me tell you about Fantom Cash. Fund your wallet without exchanges or middlemen and spend with the Fantom card. And let me also tell you about Vanta. Automate compliance and security. Vanta is the leading AI trust management platform.

Let me get my headphones back in. Back to our guest. A lightning round.

Yes, yes, we have John McNeill, the author of The Algorithm, in the Restream waiting room. I love it.

Everyone's getting me to watch. What's going on?

Put my IEMs back on. How are you doing, John? Hi, guys. Hey, how are you? I need to adjust my headphones.

Great to meet you. Great to have you on the show. We're having a lot of fun over here. We just had a friend of mine, Nima, come tell a story. He just exited his company.

He has sort of a one-step algorithm.

Yeah, his algorithm was just like, focus, work hard, and he one-shotted entrepreneurship. He was like, I think I'm going to just be a solo founder. Then I think I'm going to build remote. And then scaled to $165 million of revenue in 8 years profitably. And then Jordy asked him like, "Did the company ever die?" He's like, "No, we were all profitable." Not die, did it ever almost die?

Come close to dying? He's like, "No, no death scares." No, it was like the opposite of Elon. Yeah, yeah, yeah. But you know, that's the beauty of the show. We go all over the place. We like to talk to, you know, entrepreneurs who have all sorts of different paths. And fortunately, we have someone here who can tell us about Elon Musk's journey, which has been much more tumultuous. But why don't you start with the introduction and how you got to a place where this was the book that you wanted to write?

Yeah, I wanted to tell the story of how like Tesla and SpaceX to a certain extent work on the inside. Like there's, and I asked Walter Isaacson when he was writing his book on Elon, like, why don't you tell the story of like how Jobs runs Apple? 'Cause there's a really specific way Jobs ran Apple and his other companies. I said, same with Elon, there's a really specific like operating system and way inside of Tesla. Why don't you write about that? And Walter said, I don't write business books. Yeah, and I write character books. So he turned to me and said, you got to write that book. Yeah. And so that's the short answer. When Walter Isaacson tells you to write a book, you write a book.

You better listen. Okay, so talk to me first about the process of distilling the work philosophy, how Elon works inside of Tesla, and then actually take me through the algorithm, the steps, because people hear things like First principles, engineering mindset, but I think all of that is pretty vague, and I think you can concretize it for us pretty well.

Yeah, so basically this framework came from two things. One was all the mistakes we'd made. So you talk about tumultuous, a lot of that was self-caused, and we would do like postmortems and say like, how the heck did we get ourselves in this situation? And let's not do this again. And so what's the principle that would keep us out of the ditch? And so that's how the algorithm got developed, and it was, with the goal of pushing decision-making out to the edge. And so we wanted two-way door decisions, make those at the edge, and here's the framework you can use. And it turned out the framework drove innovation too. And so it starts with, no surprise, simplifying. And the first three steps of the algorithm, basically, you gotta simplify. So the first one is you question every requirement you're given. Is it a requirement of physics? Is it a requirement of safety? Is it a requirement of law? And if you can't answer yes to those questions, then you, then you got to consider deleting that requirement. So example of that is we were trying to sell $100,000 things online. Nobody had done that before, sight unseen. And it took 64 clicks to buy a Tesla, and 44 of those clicks were in the auto loan and auto lease documents. Whoa. And it turns out an auto loan document is 12 pages of paragraph after paragraph after paragraph of how the bank's going to, uh, the bank's going to basically kill you if you don't pay. And so I asked the lawyers, can you come back to me and tell me how many of these paragraphs are a requirement of law or regulation? They came back not much longer, not much time later, and they said none. Whoa. And I said, what do you mean? They said none. All of this stuff, all these paragraphs were inserted by well-meaning corporate lawyers who are trying to save their company's necks, and none of this is a requirement of law. And I said, so literally I could get down to a one-page or maybe a one-paragraph loan. One that said, here's how much the car is, here's how much the interest rate is, here's the time period, here's the monthly payment. That's 4 sentences. And so, like, we did goofy stuff like that. We would question a loan doc. And it turns out that if you eliminate 44 clicks, you sell a lot more of these $100,000 things online. And so, that's the first step of the algorithm is just question every requirement. Second is that you make the new thing or the new product as simple as possible, fewest steps, delete everything that the customer doesn't pay you for. And then you speed it up, because speed reveals all kinds of warts. And if you can make something go fast, it's gotta be simple and it's gotta be really good. So good, fast, and cheap is actually false. You can get all three. And then this sounds nuts coming from a Silicon Valley perspective, but you automate last. And it's not so nuts when you consider like how DoorDash started, 5 Stanford CS majors in a dorm room. They put up a PDF with a phone number so that they could figure out the, workflow of the business before they automated anything. Same with the Amazon guys. They were— they put up a web page to order books, but they had no fulfillment capability. So they ran down the street to a bookseller, bought the book you ordered, dropped it in a box so they could learn the business. And we found this time and time again when we automated first, like the auto— the Model 3 production line, we automated it first and it never worked. And so the only way we could save the company was build a tent outside the factory and start building Model 3s by hand. And we learned automate last over and over and over again, and it became religion. So that's the 5 steps to the algorithm.

Yeah, there's been a lot of speculation about the next Tesla vehicle. Somebody was proposing a 3— a car with 3 sets of doors for big families. That doesn't sound simple. Roadster that flies. There's the Cyberman, the Cybertruck turned into a Suburban. Yeah. What's the product that you want?

I do want the Suburban. Yeah. Here's why. Like, like when you go to, when you go to Tokyo or you go to China, they have these like really tricked-out minivans. Yeah. And they have every feature. It's like sitting in the best man cave ever. And I want that car.

Yeah, I think that'd be a good one. Yeah. What do you think translates from a hardware company with very, very sleepy incumbents, thinking of the car industry, the space industry. What translates to software development, artificial intelligence, app building, social networking? What's going to transfer of the algorithm of the Elon way of working, and what might not?

That's a really good question. I think what transfers— these principles transfer of like simplify and kind of go slow to go fast as you're developing, like, the software. Basically, your first architecture, what the software is going to look like and what it's going to do, and really determine, like, what are the key features or value we're going to ship, and just concentrate like heck on that. Like, keep it simple first. And a lot of people have talked about this as a minimum viable a product, but I think that's still really true. And then try to make the product as perfect as possible. And like you take Claude right now, the reason Claude code is winning is because it is the best. And that came out of long discussions about how to simplify the architecture so it could actually do things that Codex can't do, that Cursor can't do. And I think that's the piece that translates. Like, Simplify down to the 2 or 3 things you absolutely have to crush, and then literally go crush those.

Yeah, within Tesla, is there a noticeable bifurcation between the software engineering orgs and the hardware engineering orgs?

No, one of the things that Elon believes in is hiring what he calls orthogonally, which means basically that nobody has any experience in the industry, because he doesn't want you coming in with a preconceived, like, set of frameworks or preconceived notions. And so, we were all software people. Like, I was a 6-time software serial entrepreneur. And we didn't know, I didn't know anything about hardware. I'd never been in it before. And so, we approached every problem from a software-first perspective. So, an example of that is like, if you say, okay, to your last question, like, what do we have to crush in the car business? Well, we gotta get an autonomous car. Okay, to run software in an autonomous car, the requirement of that is we have a single chip. Because if you have more than one chip, now you've introduced latency and syncing and all the sort of stuff you have to do. So, we can only have one chip. And that's the software-first kind of mentality. We're competing with people who are hardware-first, who have 18 to 36 chips running in their car, which means they can never deliver autonomy because they're not thinking about software first. And so that software mentality gives Tesla an edge kind of every day of the week.

A lot of people have been speculating about demotivation from SpaceX liquidity as the company goes out at a $1.5, maybe $2 trillion valuation. There's a lot of engineers who are great. They're about to have a lot of liquidity and maybe they will decide to retire is basically the thesis. But we've sort of run this experiment with Tesla. What was it like post-IPO? Do you have a read on how the culture changed? Did everyone remain interested in the mission or were there some people that actually did choose to sort of step back?

Yeah, I think the majority of people that were there for the mission, they're mission-oriented and the size of their bank account over time grew, but it really didn't matter to them. They were showing up every day to solve problems. Just to solve the next thing that was in the way. There were some people that cashed out along the way, but they were kind of the minority. And one of the things that Elon did was something that I had done in each one of my startups, and a lot of entrepreneurs do, which is you kind of starve the balance sheet. You raise only as much capital as you need. Because the first principle is you don't want your company to go soft. And when people see a big number on the balance sheet, you're not close to death and people aren't like really aren't really moving as fast as they can, aren't as motivated. So even after we were public, we operated Tesla on a quarter's worth of cash, believe it or not. And I kept saying to Elon, like, I would like a little breathing room. He's like, no, no, like, we got it. Like, we got to think about this like when we're young entrepreneurs, like, if you're close, if you're two steps from death, you operate differently. So, but I was like, man, we have a quarter's worth of cash, but we have 70 days of payables. That means we have less than 3 weeks of cash. This is tight. But that kept everybody sharp. And what we started to worry about was post like Model 3 and Model Y, when we actually started to generate cash on the balance sheet, like how we could make sure the company stayed sharp. And SpaceX has had this advantage of that for a long time. And Gwen and Elon are going to have to manage this now post-IPO. But my sense is most people are there for the The experience of working in a Musk company is that you are literally on the biggest challenge you've ever faced in your life with the best people. And you are, you're doing the best work of your life. And so that's what keeps most people engaged. It is not the balance in their bank account.

How do people stay engaged and so laser-focused on like a singular mission when Elon has like a new hot thing every 6 months maybe? And there's like, it feels like, I feel like if he were to share that cultural tenet of like, try and solve every problem that humanity faces with the rest of the organization, you would have a very scattered organization, but that's not what we see. So how does that dividing line happen?

So like, I started to get the entrepreneurial itch a few years in. And so I went to him and said, hey, look, you know, you're starting OpenAI, you're starting Neuralink, starting The Boring Company. Like, I gotta scratch this itch too. And he basically said, you can't. Because, because I got to have you focused so I can go do these things. Sure. But then it was pretty cool. Like, we designed this way that I could scratch my entrepreneurial itch, which was just doing it inside of Tesla. So we invented mobile service. We invented insurance inside of Tesla, which now is a third of the cash flow. So I got to, I got to scratch those itches. But you start to learn, like, Gwynne's job is keeping SpaceX focused. My job was keeping Tesla focused so he could go exercise that Da Vinci side of his personality.

Yeah, yeah, that makes sense. Jordy, you have anything else?

This is great. Where are you investing mostly these days outside of the Elon orbit?

Yeah, so we start companies from scratch at my venture firm and we're investing in I would say the intersection of AI in the real world. So what that means is like we pulled this amazing team out of Tesla that did the supply chain automation and optimization and they've created a business called Atomic that is just slaying it. We created this really cool platform for restaurant hospitality where at any restaurant you can get up and walk out without having to pay the check because it already knows who you are and what you ate. Meat. So every restaurant becomes like a London supper club. We're— so we're, we're deploying AI.

Which company is that? That's called Zumi. Okay. Um, I, I know another— a friend of mine has another company competing in that, in that category. Same, same pitch. Uh, yeah. And, uh, yeah, but, uh, I, I'm sure he'll be devastated to know that a Musk-adjacent company is— yeah, there's room for more than one of us.

I like having competition. And, um, And that's a really tough technical solve actually to be able to pull that off. So it'll be protectable if your friend's company's working on it and there's room for both of us to swim in that big ocean.

What's your advice for American auto manufacturers? Because it feels like they're just, you know, they're behind in autonomy. They're behind even from a feature standpoint with a Tesla or BYD.

I see these electric cars out of China China where it's like, it has 1,500 horsepower. It's as big as a Suburban and it drives itself. And then you're like, and it'll cost $35,000. You're like, that is impossible. How can we possibly compete with that? So yeah, what should American automakers broadly do?

Well, this is a real challenge that I'm a part of, 'cause I'm on the board of GM now trying to help them navigate this. And so like when I walk around the street, to Tel Aviv or Mexico City or Paris, you see all the BYDs. And to your point, these are, these are not crappy cars. These are really good cars and at a really good price point. Yeah, they're at that price point because the government subsidizes the heck out of that business in China. Uh, you get free factories, free labor, free parts basically. So, uh, so you can sell stuff super cheap. But that is a real competition. What is their—

to your knowledge, what is the long-term thinking there? Is it effectively like an employment program where they just want—

yeah, or are they looking at it like CAC where they're like, we'll lose money for a decade, then we're gonna make money for— or both?

Or like, what, what are the kind of pillars do you think of their strategy overall?

It's a combination of both of what you guys just said. So on your point, Jordy, it is the way that you keep a single-party system in power is you provide jobs. So job, uh, job growth is the is the one metric that every level of government gets bonused on there. Can you imagine like the American government, everybody gets a bonus that doubles their base salary, and that one metric is GDP growth? That's what you have in China. So, they start with that framework, and they say, we got to provide jobs. And the way we're going to provide jobs is every 5 years, we're going to announce 5 industries that we're going to enter and dominate. And the second, well, the third pillar of that is then that they subsidize 100 market entrants to come in, and then they let evolutionary biology take, take its place, uh, and may the best person win. And so they get down to the top 3 or 5 competitors that are winning. So in this case, it's like BYD, Geely, NIO. And they say to those competitors, now we're going to consolidate all of the capacity that we've created with these 100 companies under you 3. You get it for free. And your job now is to export and dominate these markets. So, they've gotten subsidies to get started, subsidies to operate, and now they're getting capacity for free. And they've proven themselves as the winners in a hypercompetitive market. And now, they go enter the rest of the world where the competitors are soft. And that's their formula. And they run this formula across all kinds of industries. They run it in solar panels, they've run it in TVs, they've run it in bicycles, they've run it in electric cars. And it's a very powerful flywheel they create. But those are the four pillars.

They're also starting to buy legacy brands. Have you seen this? That's where it gets really interesting because— Have they owned Volvo?

Yeah, so like people talk about, are Chinese cars coming to America? And my answer is they already are. It's called Volvo. Yeah, Volvo is owned by Geely. And yeah, and, and Zeekr is providing now the new, the new Waymos that are hitting the road because Jaguar stopped the I-PACE production. So the new cars you're going to see are Zeekrs. So we already have two Chinese cars that are, that are on the roads in America. This is not like a theoretical, it's an actual thing that's happening.

We interrupted you as you were explaining like, you know, how you're kind of advising GM and what American manufacturers need to do to— Or even America broadly. Yeah. Considering they're coming for every physical—

Like, should we fight back or is this like Happy Meal toys where it's like not that big of a deal that they're over there? I think it's a big deal.

You know the answer to that, John. I think it's a big deal.

So the auto industry is 5% of GDP in the US, but let's like, like consider you're in Germany, it's 29% of GDP, or it's close to that in Japan. Like, you can't let your car business, your car industry go because there's so much GDP tied up in it. So that means we got to compete, and, and competing means we got to have like super compelling product, uh, and we've got to have super low-cost manufacturing. And what's a little scary is like Amazon invented this thing called the lights-out warehouse. Yeah, uh, and it's lights out because the warehouses are so automated there's no humans, so therefore you don't have to turn on the lights. The Chinese already have lights-out factories. So like Xiaomi has a lights-out factory where raw materials come in one end of the factory, there are no humans in the factory, and finished cell phones come out the other side. And there's like a couple of electricians and plumbers keeping the thing running, but the plant manager is actually an AI that's running the plant. Yeah, that is something America's got to get ready for. And to get ready for it, we need a bunch of manufacturing engineers. And Tim Cook says this all the time. You could gather the best manufacturing engineers in the country and they would fit in the auditorium at Stanford. If you gathered all the manufacturing engineers in China, they would fit in 3 Stanford football stadiums. Like, we are so outgunned on the manufacturing engineering, and that's where we've got to like shift this fast. But that's gotta be a demand pull from places like GM and Ford and others who are moving diligently in this direction.

Like literally Stanford? Like, does Stanford need to be training those folks specifically, or is it more money for trade schools or online? I think it's all the above.

Like, yeah, it's all the above. Like, Stanford needs to be training them, so does Purdue, so does Illinois, so does Michigan, so does Penn, etc. Like, we gotta— like, we gotta put a focus around this and really bring supply chains into the U.S., uh, so that we can have a fighting chance of not only building super automated factories, but super efficient supply chains next to them.

Well, hopefully we can execute. Thank you so much for at least laying down the algorithm and showing people how it can be done. And we appreciate you taking the time to chat with us.

Yeah, fantastic to meet you, John. Feel free to pop on the show whenever you feel like it. Yeah, we'd love to talk to you again.

Same, guys. Really good to talk to you. I'm a big fan, so thanks for having me on.

Thanks so much. We'll talk to you soon.

John. Great hanging out. Have a good one.

Let me tell you about Plaid. Plaid Power is the app to use to spend, save, borrow, and invest, securely connecting bank accounts to move money, fight fraud, and improve lending, now with AI. And without further ado, we have Kari from Linear in the Restream waiting room. Let's bring him into the TVP and Ultra Dome. How you doing?

What's going on?

I'm doing great. How are you guys?

We're doing well. You've been, uh, stirring up the internet this week.

Cooking. It's my favorite hobby. It's like, it's definitely like It's like something I like to do.

Yeah. Well, we're excited to talk about it. So yeah, take us through kind of the announcement this week. What led to it? All that stuff.

Yeah, so this week at Linear, we kind of like wanted to share more about like what is our thinking and kind of read on the market and in our category, which kind of historically has been this issue tracking project management. And I wrote this essay that tries to talk through some of these topics. And it starts with this somewhat controversial statement saying issue tracking is dead. And I think what I was trying to do with it is to really shake the industries and everyone's thinking around this. And I think what still is happening is that how companies and software companies operate, they still are operating with these old assumptions and processes that are built around the old world, like the world before AI agents and that kind of development workflow. So I think historically issue tracking has been this ticketing task system for engineering. So basically engineer doesn't do anything unless there's a ticket. And then you have to create the ticket, someone else creates it, it goes to engineering, there's some negotiation happening. Eventually the engineer does something with it. And it's kind of like, it's almost like this line cook system where it's like someone for yells like, we need fries and steak, and then in the kitchen, they start cooking it. And it's kind of dumb, and I always thought it was dumb, but it's like how a lot of companies tend to operate. And the second problem, I think, is that these legacy platforms vendors have kind of created this kind of idea that it should be complex, and they kind of encourage the complexity and the overhead of this process. So we have customers coming to us and like, hey, we want to switch to Linear. But then they say like, oh, we have this like bug tracking process, which is 40 different states. And the bug report needs to have these 30 different custom fields. And then they ask, like, can you do that? And our answer is like, I don't think we should or you shouldn't either. Like the point of moving to Linear is actually rethink some of this stuff. Like, is this necessary? Yeah. And I think like this becomes even more clear now is that if the agent can fix the bug in 5 minutes, but your bug reporting process or the process of running through that process takes a week, it starts to look pretty silly that like the actual work takes a lot less time than actually running through the whole process.

Yeah.

And you're sitting here being like, I don't want to be like part of the bottleneck. Yeah.

And so I think my thinking here is I think we can start compressing and simplifying a lot of these workflows. And even I know that companies do need some process where it's compliance or security or some other reasons that you just can't remove. I think the agent can really handle that. But this statement was really for us to say that I think we should all look into the mirror. It's like, what are we doing here? And why? Do we still need to do these things? And from our perspective, we don't. I think we should start looking into different problems. And the different problems is like, yeah, how do you work with the agents? And I think the problems I noticed today is one is the context problem. How does the agent know what to work on? Or how do you set up the agent to work on with the right context? And we think like Linear can be that or is already that. Context system for humans. So it can also be the context system for the agents. So Linear collects user bugs, it collects user feedback or customer requests. There's also all kinds of projects. You have goals, initiatives. There's a lot of context of what is your product, what is the state of your product, and also what is the future state of the product. And then if you can bring that into the agentic workflow, I think the agents can work a lot better. So I think at Linear, we want to look into that category of context problems and try to find solutions there. And then the second thing, second problem I noticed is the agency part that a lot of the systems historically has been quite static. It doesn't do anything unless you move that thing from one state to another. And we think now the system should be with this right context and understanding of what you're doing and what your team or product is doing, it could start moving the work on its own. It should become more self-driving. And so for example, this bug reporting example is like that if the bugs get reported in Linear, they should just like, the Linear agent should look at it, start debugging it, connect to other tools, make a fix, then eventually at the end, tag in a human to like, hey, can you authorize or verify my fix? And so then this 40-state bug tracking process is now 1 state because the human only has to verify it. And even if it's not correct solution, you still have the option to fix it and work with the agent. So I don't think we can one-shot problems all the time, but that's just the direction we want to go. It's like, is there work that Linear could do automatically that the humans don't even have to look at? And at least at the very beginning of the state, and Linear could start doing it for you. And the last thing I'll say, I think that we are launching several things over the weeks. We launched this Linear Agent, which it's an agentic surface for Linear. So you can ask things, you can, how I use it is I get feature requests from people, then I go there. It's like, I wonder what other customers are saying about this problem. And can I understand the underlying need? Because I think the problem today starts to become if you can build anything fast, the problem is not building things anymore. The problem is deciding what to build and why, and even understanding what is the problem. So I think like Linear can be a system where you can understand the problem, shape the problems, and then pick a direction or solution and then start working on the— have the agent work on it with that correct context and direction. And then in the future, we're working on our own coding agent, which I think there was some confusion about it. And I think the goal there is it's more like a wrapper around this existing coding agents. And what do we do there is we can dogfood our own platform, which we have this agent platform that third parties like Codex and Devin and Cursor have participated in and they have their agents in there. But because we are building our own, we can create the capabilities and the tooling and the hooks or whatever we need better because we also notice the opportunities as we build these things. And we also just generally see that there is probably situations where the linear scoring agent can be better than some of the generalized coding agents.

Yeah, I think it's really smart to, if Linear had been started 10 years prior, you would have been able to just do the legacy SaaS playbook of, let's just try to add a lot of seats every month and compound forever. And that was a beautiful existence. And now our entire industry is disrupting itself. And so you can choose— I think Toby Lutke on David Senra's show was talking about every category is up for grabs. There's going to be an AI-native company in every single category. You can wish that this wasn't happening, or you can decide to be that company, and the mature, hard thing to do is admit that things are changing, embrace it, rally the team around it, rally your customers around it. I think it makes a lot of sense. How do you think, taking a step back, what's your view on how enterprise software categories are evolving? Evolving? Because I think a lot of people are kind of waking up to this idea of everybody wants to be, at least in software development, in the pipeline of tools, everybody now wants to be the same, kind of like the same thing. You want to be the place where people go to encourage the machines to do things, right? And kind of do that. And so, and how do you see Linear's role evolving you've been very open to different agents leveraging the platform. I'm sure you'll continue to be. But yeah, how are software categories evolving in this era of you kind of need to be selling? Everyone's trying to sell work.

Yeah, I don't think I have the complete answer there. I think there's a lot of nuance, and it depends on the markets. I do think that feeling of everyone's building the same thing, I think partially comes from a lot of people are noticing the same primitives and from like same kind of blocks or pieces of this puzzle. And then they're trying to like figure out like what is the right setup for that? Like what is the right order of those things? And like who is actually the best thing, best one to like own part of that puzzle? And I think that's like the, the feeling probably there. But I think my feeling, my thinking is that it's similar to earlier software days too. It's like when people invented databases, now everyone's like, why is everyone making databases? Yeah. Like, well, everyone needs a database.

Everyone wants to be a system of record. Yeah.

So I think there is like a lot of, like, there can be a lot of shared primitives across products. It doesn't mean that every product still like has the same outcome or like the same advantage or something. And I think like we, we, we don't know like how this will all play out. And I think the other sentiment I'm seeing is that there's this like idea of like, let's throw everything out, like no SaaS at all. And I think that's an option, but I think like you can do that and then you start like inventing stuff back from the first principles and you maybe end up like in the same spot again. And I think like that's what we're seeing in our space is like everyone's running their agent and now they have 10 agents running. So then they put them on a Kanban board, which Linear has. And then it's like, oh, now I invented the agent orchestration. Like, no, you invented the Kanban board, which has been like around for like 30 years, but you just put the agents on a Kanban board. So like kudos to like connecting those two topics, but like, it's not like that some things don't need to be reinvented. Like, some things can still work, but like, if you just throw everything out, you kind of like start from the beginning, and then I think it's a long journey to like figure everything out again.

Yeah, I got an investor update last year that was just like, workflows have been rebranded in the product as agents. That was a funny moment because I was like, okay, some of this stuff is, you know, very new approach to software, but some of it is just kind of rebranding Some of it is just repositioning.

I have one more question, but first we gotta give a shout out to Russell Smith from Y Combinator Summer 2012. We're not beating the YCS12 mafia allegations on this show, since I believe we all went through that one. But my last question is, you know, we talk about Linear every day on the show. 75% of enterprise companies are using agents. Have you talked to the other 25%? Like, what is unique about those businesses that they haven't jumped in? Are they just like asleep at the wheel or is there something unique about their business where they're sticky and for security reasons or some other reason?

Or they're using agents but haven't integrated them into their human workflow.

Maybe, I'm just interested because, yeah, it feels like, you know, this is such, everyone understands how powerful agents are. Why is it not 100%? That's always an interesting question. Yeah.

And to clear the status, like, like 75, 77% of like linear workspaces have cloud agents. Okay. So, so there's a difference between cloud agents and the local agents. So we don't track the local agents, but okay. So I think the couple of things like the cloud agents are still somewhat like less developed today. There's like environment problems where like if you have a massive system or some kind of large company system, the environment starts to become kind of complicated and the industry hasn't fully solved it yet. I think it's solvable problem and many companies are kind of like solving it with the sandboxes of like you start a sandbox, the agent has the right environment and can do the things. So there's like just like a timing piece, a similar timing piece, not everyone has like decided to do this and like go into the cloud agents. The third piece, which is kind of the stupid reason, is the policy. So companies are still procurement, IT, and security still run a lot of decision-making when it comes to tooling in companies. And there is a lot of companies that employees ask, can I use the agent? And they say, no, you can't. And they don't have a reason for it. Or like, we have to evaluate it and that evaluation takes months. And I think like what the companies need to look into here is like, what this has to change. Like you can't like, like the industry is moving so fast. So you cannot have like a month long, like many month long processes to evaluate every single new tool. Like, I think like the security standpoint is like valid, but like you kind of have to like figure out a new way to think about the security and not like block new tools. So I like one hack to this I've seen in some companies is like they have this friction form. So engineers that want to use like feel friction and that they want to use new tools or AI, they form a friction form, like file a friction form, and then that escalates it to the higher leadership. And then it makes an SLA that has to be resolved in a week or in 10 days or something. And so you force the hand of this like procurement, IT and security people to like do something about it because the incentive a lot of times for these jobs is like you don't want to rock the boat. So you don't want to change things if you don't have to. So then like the companies do, I think that leadership should recognize that like we do have to like allow people to use new tools. Otherwise we'll kind of fall behind here.

Well, thank you so much for taking the time to come give us the update. Always good to hear from you. And we'll talk to you soon.

Have a good rest of your day. Awesome. Thanks, Progress.

We'll talk to you soon. Goodbye. Bye. Let me tell you about Gusto, the unified platform for payroll, benefits, and HR built to evolve with small and medium-sized businesses. And without further ado, let's bring in our next guest.

Yeah, it sounds like a lightning round.

Yes, this is the Lambda Lightning Round.

Tell me what's happening.

Good to meet you. You're here with us.

Please introduce introduce yourself and the company, because not only have we not heard of you, but I think you're coming out of stealth. No one's heard of you, or at least this company. No one has heard of us.

I'm Dimi Kallari. I'm the co-founder and CEO of a company called Neon Bio. Yeah, uh, in a nutshell, what we do is we genetically engineer chickens, okay, to produce medicines inside their eggs. Wow.

How did you get into this? What's your backstory?

So I'm an aerospace engineer, so naturally I went into, uh, biotech. Yeah, um, chicken My co-founder is an evolutionary biologist as well. I've always been involved in manufacturing of complex things. Planes are sort of one complex thing. These proteins, these medicines are also similarly complex in different ways. As some of the problems facing drug pricing and sort of the onshoring of manufacturing had come to bear over the last few years seemed like a good place to hone my, uh, my skill set.

So what do you think?

Yeah, where, where did the original kind of concept come from? Did it— did your— was your co-founder, you know, making on—

making an omelette, hanging out, being like, this will cure cancer?

You know, um, these chickens, they lay eggs every day, we gotta put something in them outside of—

you're not far off. I mean, we all know chickens to be sort of incredible sources of edible proteins, you know, the ones that make your omelet. Most new medicines today are, are complex molecules. They are proteins themselves. And so the way they're manufactured today, prior to Neon Bio, is, you know, it's expensive. It's sort of reliant on these complex, fragile global supply chains, and it sort of makes these drugs inaccessible to most people. But chickens happen to be the universe's best protein factory. They've been honed by 250 million years of evolution to efficiently turn very simple inputs, grain and water, into complex outputs, these proteins inside their eggs. And so we harness that same system to produce some of the drugs you might see advertised on TV, like Humira or Keytruda.

How far away are you from actually doing a partnership with a, biotech company that owns intellectual property around a particular protein, it feels like there's this dance between like, you need to genetically engineer the chicken, make the chicken, get the eggs, extract the protein, actually get into the drug. That sounds like years, but then there's only, there's a ticking clock on every drug that's out there in the IP landscape. So how do you marry those two?

Yeah, so one of the things we announced today really is this large commercial deal that we signed with partner to bring up to 3 drugs to market.

Up to 3 drugs, okay.

And the drugs that we're focusing on to start with are known as biosimilars. So they are drugs that, you know, have existed. We know they work. They're on the market. They can cost in the thousands or tens of thousands per dose. That's super expensive. We are starting with those because they're known molecules. We're not taking on molecular risk. Risk there. Over time, we're developing technologies that will make this process way faster, much more efficient, increase the yields. But for now, we have a very good market in the biosimilar space where there's huge demand for these drugs, coupled to sort of the cost aspect, which is sort of a big part of our value proposition.

How many doses from an egg are we talking? Is it a single shot, or can you get— potentially multiple doses? And then, because I'm just thinking at some point you're just scaling a facility that has chickens.

Yeah, we scale by breeding chickens. That's one of the advantages here, right? It's pretty linear and we know how to do that. To just give you a sense for scale, you know, with a few thousand birds, and to give you a sense of what that means, you know, a small farm is anything below 25,000 chickens. So with a few thousand, we can produce the global supply of a drug like Humira. So a chicken can treat, you know, depending on what the medicine is, anywhere between 10 to 100 people in a year.

Wow, that is remarkable. That is insane. Do you not have a chicken sound effect on the back?

I was just about to text the team. We need a chicken sound effect.

Play the rest of the barnyard. We got the whole— Because we'll ask, is there a plan to make Horses work for us, goats for us, sheep. Are you staying in chickens forever or will there be other animals? Okay, eventually.

Okay, well, call us back. We need horses to save us from other ailments. There are actually drugs that come from horses as well. You know where my mind's going? Partnership with Varda. Varda, yes.

Space chicken. Space chicken. I mean, I was thinking about that when you said aerospace. To bio, there is an interesting overlap there. Well, thank you so much for taking the time.

Demi's on the line.

Yeah, we're having a lot of fun, but this is one of the craziest pitches.

I think Caffeinated Capital's, I think, an investor in both companies as well, right? That's right, that's right. Raymond loves making drugs in difficult ways, but potentially extremely valuable ways.

That was very cool, Demi. Very cool.

Thank you so much for coming on. Thank you guys. This is great. We'll talk to you later. Bye. Let me tell you about Vibe.co, where D2C brands, B2B startups, and AI companies advertise on streaming TV, pick channels, target audiences, and measure sales just like on Meta. And without further ado, our next guest, Mikey Schulman from Suno. He is the co-founder and we cannot wait to talk to him about AI-generated audio. Let's bring Mikey in from the Restream waiting room into the TBPO, Ultradome. Mikey, good to see you again. Thank you so much for taking the time. Welcome back. One of the most interesting, do you call yourself a Neo Lab? Is that a fair characterization?

Great to be back. Thanks for having me. We definitely do not think of ourselves as a Neo Lab.

Okay. But you are training models, you're doing AI, but you're a product company. Are you a consumer company? How do you think about yourself?

We're a consumer company. We're an entertainment company. Consumer entertainment doesn't seem so hot right now. Yeah, I'm not exactly sure why, but being entertained and fulfilled is like a basic part of being a person. And so often underlooked part of the market. Yeah, we're like— the word we use here is creative entertainment. Sure. We are giving people the best, most fulfilling creative experiences of their lives.

Yeah, I mean, that sounds maybe broader than music one day. Have you thought about video? Are you thinking about— I mean, I'm on Spotify. A lot of times a video will pop up alongside the music. Are you thinking about expanding or continuing to refine the music model itself?

It's a great question. I think there's a lot of reasons why this is going to work really, really well in music, least of which is we love music. This is like really the DNA of the company. But I think creative entertainment is coming everywhere. And I think about it like this, like, I think even Claude Code or all of its competitors are creative entertainment. I don't know how much you guys play around with it, but it's like really fun to build things and it's really fun to use what you build. And there's a huge allegory there for music too.

Sure. Yeah, yeah, that makes sense. The tinkerer mindset.

Let's talk about progress since the last time you popped on. You guys growing revenue. At all? What metrics can you share?

I had heard some rumors. Yeah, so growth has been great. You know, a lot of things have compounded, a lot of hard work from the team and kind of some big step changes in how people engage with the platform. So since our last model release, yeah, recently we kind of announced that we had hit 2 million subscribers, $300 million revenue, and we're like one—

Oh, sorry to interrupt. And you got cut off a little bit, but it's $300 million of ARR, you said, right? That's remarkable. That's wild. Insane. And how much have you appreciated all the other labs just slugging it out while you guys just kind of stay in your niche focus and go after what clearly is a massive opportunity, but maybe is stays kind of off the radar for some of these other labs long enough for you guys to just run away with it?

Truly, I like wake up 6 days of the week and I think, this is great, we're the only ones really playing in consumer entertainment and I'm really, really excited. And then the 7th day of the week I wake up and I say like, we must be missing something that all these other giant companies know. You know, but I think, it's what I said before, like being fulfilled is a much elevated state than utility. And everybody's focused on utility 'cause it's straightforward. But eventually, like, you need something more than that. This is like a basic part of what being a person is all about. So we love to focus on it. I love watching people slog it out in other domains where scale and compute and dollars are honestly bigger weapons than they are in music.

Yeah, we've been, we've been, I've been enjoying Suno a lot, throwing out, making, making, making songs for the team. It's just, it's an amazing thing to just like be joking. And in our use case, we're just like joking around about something. Yeah. And I'm just like, all right, I'm going to turn it into a song. Yeah. It's, it's a lot of fun. But yeah, talk about the updates on the, on the product side, the new voices functionality, all that.

Yeah, it's a really exciting launch. We a couple of hours ago released a new model. It's our best model yet. Will make the best music. But I think most excitingly is it really gets personal. So you can use your own voice to make music that sounds like you. And if you're not the best singer, it actually sounds like a better version of you. And so there's something beautiful about that. Auto-tune? Yes, yes. And without sounding too, like, artificially auto-tune-y. Go try it out. I've learned not to try to demo this for people in large groups. People don't like singing in front of their friends. So I'm not going to try that here. And then some other personalization features on the creation side about how you really tailor the system to really know everything that you love. And then also really exciting is the ability to upload a bunch of tracks from off-platform of your own that you can inspire the model to be be more like those. And we've seen some amazing things happen from everything from like musicians, film composers, producers, to like uploading tracks there and getting the model to really kind of follow their leads. It's like an incredible way to fall in love with a particular thing that you already love.

I'm super excited to play around with it. John?

Yeah, is there— I'm interested in like top feature requests. And what we can learn. I don't— obviously, you don't want to spill your entire roadmap, but some of the interesting things that happened in image models where you could, at a certain point, you know, take an image and basically just replace the background and it wouldn't sort of regenerate your face. And I feel like there's a lot of opportunity if artists opt in, or I have music to say, okay, I want to keep the song exactly the same and just change out the lyrics. To do sort of a remix, or keep the lyrics exactly the same and change out the style, style transfer. And I feel like all of those are maybe, it's going to be more of a lift on like the business development side to figure out how to do that. But what are you excited about in terms of increasing the level of control from the creator or the user?

A lot of what you said is coming soon. Yeah. I mean, unlike other media, music has like a very rich history of basically derivatives from covers to samples to remixes to mashups. And people riffing off one another is a way to spark creativity. It is a way to keep old works alive. And so you'll see a lot of that come in the not so distant future. Some of it's already on platform, you know? Yeah, of course. Something people don't know is, like almost a quarter of all songs made on platform are derivatives of other songs on platforms, like a lot of covers basically. And so there's a kind of a social ecosystem around these things.

Yeah. What's the B2B side of the business like? We talked to a lot of AI video generation platforms, and it seems like there's a lot of just ad creative, like ad agencies basically that are using the tool at volume beyond the, creativity and just the fun of making an AI video for themselves. They actually see it as a way to accelerate creative works on their ad side. And I'm wondering if you're seeing pull from ad agencies saying, hey, we need, you know, a new song for this campaign. We have some AI-generated video and we're going to partner with Suno on that.

We've definitely had a lot of outreach. Honestly, it's just not a huge focus for us right now. Like, we want to delight everyone, like just regular people who love music. And we're honestly like a lot of the company's DNA is not being, not trying to do the same thing a little bit faster or a little bit easier, but actually to try to do something that is entirely new. And like that is changing how people entertain themselves. So there's probably a big business to build helping people make songs for ads or jingles for companies. Maybe we can work together on a jingle as a side project. But for us, that'll be a side project.

What global superstar has embraced AI music the most?

And is it Meek Mill?

The most?

Oh, I don't know. There's—

because you kind of have to go on like a villain arc. Soldier Boy didn't— like, there's— there we— again, the last time we were here, I was telling you Somebody I know in the music industry is like, every artist is using the Suno. Every artist thinks it's amazing. Nobody wants to talk about it yet because they're kind of scared of the reaction from the world and the creative industry and all this stuff. And so it feels like the first one or two people to go in a huge way will get some pushback. And then over time, it just is normal.

I think it's slowly changing. I don't want to out anyone, but this was— this is a quote that is attributed to me, but it's actually not mine. I'm not this clever of everything that you just said, ascribing this is the GLP-1 of music. It's like everyone's on it and no one wants to talk about it. And I think these things just take time. So I'm not— I'm not going to— I'm not going to out anyone just yet.

But it feels like things are changing. Final question from the chat. Are there deep cuts on Suno?

I don't know. Deep cuts. What is—

You don't know what deep cut is? Deep cut is like deeply underrated, like from deep cuts in the vinyl.

Like everyone knows that piece. Yeah, yeah, no, I understand, but it's not for me to say what is good and not good. Like we never wanna be the arbiters of good music and bad music. And like, I have deep cuts of my own, that you're gonna hate, like that I made, and I promise you'll hate them.

I guess to quantify the question, it would be like, do you think the listener, the plays are less power law distributed than on say Spotify? Where Spotify probably has like Taylor Swift, Taylor Swift, Taylor Swift at the tall end that's driving a ton of consumption. Do you think that your curve of consumption is a little bit more even? For sure.

For a couple of reasons. One is that the whole purpose of the platform is actually to enjoy creation. Yeah. And not necessarily to go and browse for other people's music. It's actually to get inspired to make your own music. And so we actually see people falling in love as much with their own music on platform as they do with other people's music, which is amazing and new.

So it's more— it's— so the answer is more deep cuts. It's all deep cuts.

Yeah. Okay. But in that lens, it's all deep cuts. I love it.

I love it. Yeah, no, I mean, obviously not to paint it into a corner. There's a million ways to think about this, but thank you so much for taking the time to come chat with us.

Yeah, great to catch up. Excited to play around with the new model.

Congrats on the progress. Congrats. Talk to you soon. Thanks, guys. Have a good one. Let me tell you about Figma Agents. Meet the Canvas. Your AI agents can now create and modify your Figma files with design system context. It's in beta starting today. And our next guest is Aida Bardari from devalence, the anti-surveillance company. I'm very excited to talk to you. Congrats on the viral sensation. But since it is your first time on the show, please introduce yourself and the company.

Definitely. Thanks so much for having me. Hello, everyone. I'm Aida. I graduated with a degree in physics from Harvard, and now I'm building devalence, a company that's protecting your freedom. How does it work?

Great question.

So basically, we're building on top of existing ultrasonic jammer technology, but what we're integrating here is that we're making it a smart device which takes in information from nearby environment and then targets our distortion signals into the direction of where we detect smart devices. And then simultaneously, we also have an AI algorithm that makes sure that the distortion signals that we send out out, use artificial tones and voices that make it hard to decode.

Okay, let's take it one more step back. What is the actual problem that people are experiencing today and may not even be aware of it?

Yeah, no, I love the question. So at the beginning of 2024, we saw a huge rise in AI wearables. I mean, I think everyone in the Valley probably knows about Friendbot, Oomi, all those promising technologies. The problem there becomes, well, when you have a conversation and for example, you just forget to turn it off, a lot of confidential information or private information can be used to train AI models that you might not necessarily want to be trained on it. And people already have this problem who deal with a lot of confidential information in their everyday professional lives. So that can be people working in jobs that deal with IP, with other sensitive info. And this issue is way broader than just audio recordings. We also see this with Meta Ray-Bans happening. There's a lot of unwanted recording happening there, a lot of freedom for people to just go out and do whatever they want. And simultaneously, of course, digital data collection has been a thing for a long time. And the way that it's used in recommendation algorithms, for example, is another thing. So cognitive security is also a big part. Part of this.

How do you not disable someone else's device if you're okay with them using it? I was skiing, and a friend had Meta Ray-Bans, and he was talking to them, and it didn't— I was sort of eavesdropping on the questions he was asking. He was sending texts to friends and whatnot, and he was fine with me hearing it. If I was wearing this device, wouldn't he just not be able to use his device?

In this particular case, I mean, if you don't mind, then you can just turn it off.

Okay, that makes sense. So it's very easy.

It's like an on/off thing for you to genuinely be in full autonomy over it.

Okay. And then what's— obviously it sounds like you launched preorders. Who has been buying? Is this corporations that want to make sure that they're— because you could imagine, you know, cell phone jammers exist and Faraday cages exist. Like, there are ways to secure a property. Is this just privacy-conscious individuals? Is this a direct-to-consumer product mostly?

So for the pre-orders, it's been mainly consumer-facing, which means that a lot of people who have pre-ordered it are in the range that, you know, the price point allows. But we are working to, like, make it accessible and affordable to everyone because we really believe in the mission that everyone who wants autonomy really, and agency over the data. They should have it. But we also are working on a version that is for more like organization-based because they usually have different requirements. So we're also working on that.

Why is this? We got to get TJ one of these. Oh, yeah. A gifted one. Our friend TJ Parker absolutely hates meeting recording and all these things that are just—

Can you make it into a watch? That would be the killer. He's watching.

I know there's, there's a lot of cool stuff with the form factor that we're experimenting with.

But what, um, are you going to be in a little bit of like an economic war here? Because, uh, $1,000 product to counteract something that costs $100. There's just, uh, there's a— so there's an economy here that's sort of misaligned. I'm also interested to hear about how on earth can it, can an Can a recording device cost $100 while an anti-recording device costs $1,000? I imagine that you think the price will drop over time, but what is in the device that is expensive?

Yeah, there's a lot of processing that's going on because we have certain algorithms that require a lot of power in order for it to work. So that is honestly a big component of the cost that's driving it.

Maybe even a more powerful chip than what would just be in a passive audio recorder.

Yeah. I mean, passive audio recorders, they are usually not as complicated to build, right? You basically just need a mic and then you can just detect the stuff, right? But in this case, you want to find nearby devices, then you also want to make sure that they're blocked. And then you also want to make sure that the way that you're blocking them is not just reconstructible in post-processing. Sure. 3 different tasks here that make it way more expensive, unfortunately.

But we're working on it. What are the laws around this right now? I remember the backlash to Google Glass and then everyone had a phone and it just seemed like if you're out in public, people can just take pictures of you and record you. Yeah. Is it legal to block someone from recording me? I don't know anything about this.

Yeah, that's a good question. In terms of recording, there's one-party and two-party consent states. Sure. So, but nobody really follows that, I feel.

Yeah, what's the two-party? Is California two-party? I believe it's two-party, yes. Certainly doesn't feel like it when you walk around. No, it definitely does not feel like it.

Exactly, that's why I'm saying nobody really follows it or it's not really enforced by folks. And then regarding the blocking, so certain blocking is not allowed. So for example, blocking from RF jamming is not allowed because you can get in the way with emergency services. But unless you don't do that, there's certain areas in which we can work in.

Okay. Yeah. Very interesting. Well, where can people find it? Where can people preorder if they're interested?

Go on our website. It's dvalens.com. That's where you can find it. Otherwise, I mean, in general, we're going to be posting a bit more more also about the development process and the general vision and mission behind the company on our social media platforms. So on X, we're on Bee and Audible. And then my personal X account is just my name.

I need a little jammer for John's mic. Sometimes he'll just keep talking, you know? And no, I'm kidding.

Well, thank you so much for coming on.

Yeah, great to be here. Very, very cool that the chat is in a positive way. Saying that it feels very Harry Potter-coded to have this sort of magic device that—

Oh, that's a good one. That's high praise. Yeah, become invisible. It's the invisibility cloak for the modern era. Well, thank you so much. Congrats on the progress. Thanks for having me. I'm excited to follow along. Have a great one. Let me tell you about AppLovin. Profitable advertising made easy with Axon.ai. Get access to over 1 billion daily active users and grow your business us today. And without further ado, we'll bring in Zach Kanter from Steady. Zach, how are you doing?

What's going on? We know— no audio. You look fantastic. You have many books.

Lighting is fantastic and the bookshelf is fantastic. This is, of course, Zach Kanter. He is the founder and CEO of Steady. How about now? We can hear you now. How you doing?

Here we go, guys. Thanks for having me.

Thanks for hopping on. Great. I feel like— I'm surprised. I feel like I've never met you in person, but I know you from the internet for so, so long.

So good to finally meet We're Twitter friends, you know, it's how I meet many of my reputable and disreputable friends.

Exactly. But for those who haven't been following you in your journey, since it is the first appearance, please introduce yourself and the company.

Sure. I'm Zach Caterham, the founder and CEO of Steady. It's spelled S-T-E-D-Y. We're a healthcare clearinghouse. So if you're not familiar with the world of healthcare, you know, we exchange the administrative transactions that power are all of healthcare. You've probably heard stats like this before, that healthcare is 18% of US GDP. So it's a pretty meaningful chunk of the ecosystem. But you go into your doctor's office, they ask you for your driver's license and your insurance card. And then they tell you your copay is $20, and you have 3 visits left, and all those details. That's a transaction called a real-time eligibility check that happens under the hood. We process those. We process tens and tens of millions of those per month. Month. And then when, you know, you finish the encounter, whether it's a surgery or a, or a, you know, teeth cleaning, whatever it might be, they have to send a claim. There's a series of messages that come back. So there's an adjudication message that comes back, uh, saying the claim is rejected or accepted, and then the claim gets paid somehow. You know, you get those things in the mail that say, this is not a bill, explanation of benefits. Your doctor gets one of those as well. They can get them via paper, but they You can also get them electronically. And basically we process all these transactions back and forth.

And why can't a registered nurse just vibe code a system to do this for them? I'm just kidding. Well, it's a funny question.

Like, you know, it's interesting. So we primarily, you know, we think about our business as selling to other technology companies. You think about us as like the Stripe of healthcare. But we've seen a surprising number of these small small and medium-sized doctors' and dentists' offices that are, that are signing up. And so we recently did an analysis and spoke with a bunch of these places, and it turns out that indeed doctors are vibe coding revenue cycle management systems.

So it's not thousands of them, but it's dozens of them. It has happened. That's amazing.

That's very cool. What have been the key milestones for the business? You're raising new money today. Your name is Steady. John was saying how he's known you forever from the internet. I feel the same way. Just steadily chugging along. But yeah, what does this milestone represent? Like, what did it take to get here? Healthcare, every healthcare founder will tell you that obviously there's a big, massive market, but it doesn't move as fast. And it can take years to make progress that another industry might happen in a quarter or something like that.

Yeah, it's interesting. So, you know, we didn't start in healthcare. I don't come from a healthcare background. I previously started a brand of auto parts. So I manufactured auto parts in Taiwan and China and, you know, follow the typical auto parts to healthcare pipeline as many founders do. And in building that business, you know, I sold to O'Reilly Auto Parts and Amazon and these different retailers. And I had to, at some point, it was probably in like 2011, the transaction volume got such that it wasn't feasible to have these things manually entered anymore, before AI. And so, I reached out to all the different retailers that I was selling to and asked them to send me the API spec for their purchase orders so I can automate the transactions. And over the next 2 weeks, they all wrote back and they said, what's an API? And so, things got a little bit better since then, but what I found out at that point was that this whole world of, of retail logistics, supply chain, transportation, etc., manufacturing is powered by a technology called X12 EDI. And so if you see Stedi is spelled S-T-E-D-I, it's because we started with this underlying EDI technology. And, you know, long story short, maybe long story long here, I got so frustrated with the various EDI systems that were out there said, like, look, what I want to do is I want to receive purchase orders in, I want to get them into NetSuite, I want to have those automatically sent to a warehouse, I want the warehouse to ship the order, I want the transaction to come back, I want when things come in via Flexport, I want those things to, you know, get automatically pushed into my system. This can't be that hard. Kind of famous last words. And I was so sick of the solutions that were out there that I ended up having my own system built. And then, you know, I ultimately sold the auto parts business to a private equity firm, and I started studying And, uh, you know, I spent like $50 grand on— which, first, you know, it was a bootstrap business, so spending $50 grand was a lot of money, uh, $50 grand on building this homegrown, uh, platform. And, um, I was like, you know, it's gonna cost like 10 times as much, uh, to do this for everybody, for all transactions. I was like, but to be safe, you know, this margin of safety, I'll raise $1 million instead of $500K. And, you know, now we've raised $142 million total, and I think we, you know, Still have—

still have more to live. It's gone time. It's gone time. There we go. Thank you. Thank you. What, what's your favorite car? Uh, favorite car?

Um, you know, it's funny, like, I grew up, you look at, uh, you know, the Porsche 911, you say like, that's like a, a car that old guys who don't know anything about cars buy. Um, and then you go and you drive one, uh, and it actually turns out that 911 60, 70 years of iterative design is pretty good. Yeah.

What kind of auto parts were you selling? I'm in the market to pick up a straight pipe exhaust system as a birthday present for Jordy. I'm hoping to get him some LED underlighting as well, maybe stance his car. Were you doing anything like that?

I can hook you up.

You can help? That's fantastic.

It's going to be like TBPN Kuma Ride Edition. Yes, yes.

That's what I'm looking for. A horse. You like horses? We put a horse in your car. We put a gong in the passenger seat. You can't transport anyone, but it looks good.

John, John has been trying to get me to go the Mansory route. Yes, for years. And he will be doing it until he—

you gotta do it. Until you do it. Out of this earth. Until you do it with the full sponsored livery wrap.

Um, uh, you guys hiring, I'm assuming? Yeah. Oh yeah.

Engineers, product.

Talk a little bit about the company culture. Where are you based? Are you in-person, remote? Like, what's the, what's the scale of the company right now?

So we're about 125 people. Uh, we're, um, distributed. We have a bunch of people in New York, but we've got people all over the place. I live in the Bay Area. Okay. And, um, uh, look, I think, you know, with the talent wars, you know, look, there's obvious pros to being in person. Yeah. Um, at the same time, you're kind making the implicit decision that you're gonna exclude 99% of your potential hiring pool and saying we're not gonna be able to hire those people. And for us, we think the trade-off's worth it. So we're, yeah, we're all over the place.

That's amazing.

Awesome. Well, so great to finally meet. Yeah, great to finally meet. Amazing progress.

Yeah, thanks so much. Thanks guys. Thanks for having me on the show. We'll talk to you soon. Have a good one. Let me tell you about Finn.ai, the number one AI agent for customer service. If you want AI to handle your customer support, go to Finn.ai. And let me also tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in-store, on mobile, on social, on marketplaces, and now with AI agents. And without further ado, we're going back to back. Oh, we got Nick. Nick. I thought we were having Zach. Great to see you. I was excited to go back to back Zach to Zach.

Look at this, plaid on plaid.

But this is a beautiful background. This is a beautiful outfit. Introduce yourself. Tell us how it's going. This is where I'm living now.

It's good to see you guys.

Good to see you too.

Good to see you, dude. How you doing? Just let's just start with a gong. Start with a gong. Start with a gong hit. I don't want to wait.

I don't want to wait. No delay. The anticipation was too high for the last one. Congratulations.

You know how long I've dreamed of that moment. Oh, let's do it.

Take a quick photo for my mom.

Let's do it. Got it. Fantastic. Very fun.

You can of course screenshot it. Yeah. But it's cooler. It's cooler.

Later, you'll be able to screenshot yourself taking a picture, which is—

and then say, look, Mom, I took this screenshot of me taking a picture for you.

Give us some background. Tell us the story of how you wound up in this particular situation.

Just take us through it. Well, I'm excited to talk to you all about it because as pioneers of new media, I feel like you'll understand this more than most people. But, you know, we've been building this Week in FinTech as what started as a fintech newsletter and turned into more of a fintech media company over the last 6 and a half years. And the Plaid team approached us about 5 months ago. Yeah. And I thought we were going to talk about a partnership. So I came in there ready to sell sponsorship, ready to sell a media deal. Yeah. And they said, actually, you know, we've been thinking a lot about how we can improve the conversation around fintech and we want to partner with you guys. And what that means is we want to acquire the business. Yeah. And they won.

They out-negotiated me. But here I am. Amazing. Amazing. So what do you think stays the same? What do you think changes? Are you going to be working in their office? How does all this fit together?

Yeah, I went and did a little office tour this morning and I got a badge. So they haven't given me my gun yet, but they did give me my badge. And so after 6 and a half years working out of a home office, just seeing another person and that Having a conversation in an office was a transformative experience for me. Yeah, we are going to keep things mostly the same from now and then we'll just keep adjusting as we go. I think probably the best comp for what we're looking to build is something similar to Bloomberg with Bloomberg Businessweek.

Oh sure. These are two really complementary properties.

There's obviously a parent company, they share a name, but you can be a Bloomberg software customer without reading Businessweek and vice versa.

Yeah, that makes sense. What is the state of fintech? What are you— I mean, you know, you've been 6 and a half years, you've seen the boom, the momentary bust, the comeback. During that time, there's been so many companies that have thrived throughout the entire period, even as the market was in turmoil overall. But what are you most excited about today?

Well, I assume Most of the half a billion TVPN watchers know Jordy's background, but Jordy is an exited fintech founder who built PartyRound and Capital. And so you also had a front row seat to kind of the change in the fintech ecosystem over that period. Today, what I've noticed is you had this spike in fintech enthusiasm and funding in the venture community in 2021. A lot of companies got out over their skis. Because of capital availability. I think there were sloppy decisions made and a lot of them took tough medicine. Some of them didn't make it past the downturn in liquidity for fintech startups. But a lot of them said, look, we're going to build real businesses now. We're going to take the tough medicine and we're going to come out the other side stronger. And so if you look at the top right corner and see Ramp, like, that's a great example of a company that has been around for a long time, said, hey, we grew too quickly. Downsize, and now they're better for it and are just kind of crushing and shipping on a weekly cadence and, you know, really redefining this entire category. And so what we're seeing today is you have fintech companies— we've been talking about this for a long time— you have fintech companies that are actually taking market share from incumbents. I know fintech companies have wanted to say, hey, look, we're the challengers, but we're going to be, you know, the dominant providers of financial services one day. But now that's actually happening. And so You know, thinking about this with my plaid hat on.

So much merch.

I love how you brought— you just came with the same— you came prepared. You understood the assignment. The same entertainment level as we bring. Put on your steel man, John.

We noticed that the tech media conversation hasn't really caught up to how well some of these fintech companies are doing. And it's tough. Technology media is really stretched. And I think there are a lot of different areas like AI, like crypto that command a lot of attention. And so you have really well-run companies like Ramp that are doing generally interesting stuff and shipping at this crazy rate, but nobody's covering them other than TVPN. And so we're looking to really—

Yeah, but even, even we are not, we're not, we're not covering it on a level where if you're a fintech industry insider or builder, you're actually getting alpha from our fintech coverage, and alpha comes into like, okay, what does infrastructure look like? What kind of, what bank partners are evolving with the needs of these companies? Like, you know, you guys are going like 10 layers deeper and have been for so long. I think it's super important.

Yeah. Last question for me. I appreciate that. What media formats, where, like, how would you describe where you are now? And then what excites you? Because, you know, obviously the newsletter list is over 200,000 subscribers. Congratulations. Massive. How many newsletters do you want to send a year? Do you want that to increase? Do you want to do more events, video, interviews, audio? Like, what's interesting to sort of like zoom out and think about the next couple of years?

Yeah, you know, our DNA has always been the community. Initiative. And so events are a big part of what we do. International is a big part of what we do because there's so much interesting innovation happening. You know, American tech companies will go on stage at conferences in Mexico City and in Lagos, Nigeria, and talk about what they're doing. But then they actually start talking to people who are operators in Lagos, Mexico City. And like, the level of innovation there is often more advanced in fintech than you'll see in the US because because these are areas that don't have the same level of financial services. And so you actually have to build a lot more there. And that's been a big part of our DNA too. And so I think it's really double down on the community focus, really deep, thoughtful writing, and continuing to grow the pie, not just here, but internationally as well.

That's awesome. Well, congratulations. Amazing. Super pumped for you.

Thank you so much for taking the time. Match made in heaven.

A true match between the background and the shirt. Truly. And the hat. It's fantastic.

Come, come in person next time. Yeah, it's great to finally have you on the show soon.

Have a good one, man. We'll talk to you soon. Goodbye. And up next, we have the co-founder and CEO of Plaid, Zach Braithwaite, in the Restream waiting room. Let's bring him into the TV Pen Ultra Dome. Zach, how are you doing?

Doing well. Thank you for having me.

When did you first meet Nick? That's a great question.

I think it was at a Money 2020. I think it was maybe like 6 years ago or something like that. It's been a long time and we've long admired what Nick and team have built. I feel so honored to get to work with them in this new way and it's been pretty amazing to watch them go over the last few years.

Yeah, yeah. Talk about your experience as CEO at an event. What makes for a good event that you will say yes to attending? Appearing at, etc.? Like, what's the secret sauce that you're like, okay, that clicks into place and I'm going to say yes to that? Because I'm sure you get invites every day.

Yeah, I think— oh man, this is a difficult one because my default answer is no. My EA and I have the conversation frequently of no new things.

Yeah, there's a lot of stuff.

I think it all comes down to who's there and the size of the event. Small things where I can meet people that are really high value are are super interesting. And things that have content in an angle that's not covered all the time in the same way are valuable. So I don't say yes to a lot of things, which feels fortunate.

Also, I really like working, so it's hard to get up from.

Yeah, we're the same way. Outside of this acquisition, what's on your mind this week? Week? What's the business focused on? What are you focused on personally?

Well, first, I don't want to skip over this week in fintech. I mean, big deal for us. Like, we've been really excited to push this conversation forward over the past many weeks. We're excited to now finally have Nick and co as a part of the team. And the future together, I think, is going to be super fun. Aside from that, a big focus is AI-ify everything. So you might have seen we did a launch of Perplexity and this was, I think, a week and a half ago or so where we can power the finance tab of the Perplexity application and it allows you to do things like see your, see your stock portfolio in real time, get an update in the morning to understand, you know, what stocks you might want to trade in a given day. Lots more that we're going to do with them to bring in more financial data into Perplexity. And I think this is the first step in a lot of kind of consumer-facing AI experiences. And so that's been a big one for us internally.

Yeah, that's very cool. I mean, you think about people are using their— they're going to AI tools for intelligence to help them understand the world, but then they lack all of the, you know, maybe you've put something into the context or maybe that has some memory, but it's lacking like that real, real-time data on you individually and money being at the core of everyone's life just means that it's very important for it to be in there.

So that's very cool. Yeah. What does integration with AI tools look like? How is it changing? Obviously, you're known for the API, which has had years and years of development. There's MCP now, there's skill.md files. There's all these different ways to interact. The agents can obviously use APIs. APIs and write their own API integrations. Where do you see that going? Are there any changes that you need to make or you're in flight already making?

Yeah, so, um, sure, the core of Plaid doesn't change all that much, right? Yeah, um, we are a pipe to bank accounts, um, we're then a data store on top of that, and then analytics that sit on top of that. So like, um, that, that, that chain doesn't change all that much, but the entry point to that change does change a lot. So, like, we're doing a lot of work internally to say, how do we build, like, a one-shot vibe coder, like, get started with a thing? So, you know, you can go home and build your own personal financial management app. Now, you guys are nerds. You might do that. Most of the world is not quite as nerdy. No offense.

I was literally just thinking about that. I was like, okay, so I'm gonna go and tell Codex to write a Plaid integration, pull all my bank accounts together, tell me exactly how much money I spent on everything, recategorize it using LLMs, basically rebuild Mint for myself. And I'm like, maybe there's a tool for this. I don't know, but it'd be more fun to build. So tinkerer mindset.

You should probably just use Perplexity or many of the other wonderful LLMs that are out there. I will say I have spent more hours than I would care to share building the totally most souped-up personal financial management tool.

It does literally everything in my financial life. 6 monitors, just like situation monitor.

Yeah. Not 6, but you don't see this room. There are many. This app is like the perfect thing for me and my wife. It's like, it has everything. And like, I can like chat with like In like 2 months, I think we saw a 200% increase in the number of hobbyist developers that are building stuff on Plaid. Yeah. Don't quote me on that stat. I guess I'm on public TV now, so I said that. This is Insider.

Insider's gonna turn this into an article for sure. Insider. No, we don't cover up a lot of— But I was about to ask you, yes, you are actually seeing some sort of material increase in the number of, small indie developers, vibe coders, hackers, individuals. It's not just, you know, I'm sure there's a lot of excitement from the enterprise to deeper their integrations, but you are seeing a groundswell at the individual level, which is fascinating.

It's that. Yeah, that's really big for larger enterprises. They're like, how do I automate all of the support stuff and stuff with CloudTube? But like support tools for them. And then like there's a lot of, a lot of consumers have questions about like what data is going where. And so we're thinking about how can we smartly build intelligent permissions on top of the data permissioning so that as a consumer, you might not want to link your CalSheet spending, but you might want to be able to analyze your stocks. How do we create tools for that kind of thing? Yeah.

Are you seeing— I guess the question is, where are you seeing benefits when the frontier advances? People are currently excited about— GPT-5.4 or Gemini 3.1, and they see a model and they're like, okay, this new release does this new benchmark better, or it has a better smell, or it feels better in this particular area. But as a business owner and business leader, you're, you know, you might have a system that's using an LLM or an API and it's already at 100%. And so Are there systems that you're not upgrading and then there's some systems that you want to keep on the frontier like chat or, I don't know, going around and doing fraud detection? Where are you hitting the newest, most expensive model button versus, okay, the system that we built is actually rock solid and we're good there?

Yeah, so there's a lot of layers of the stack and it kind of varies based on on the layer. So for coding, I want our engineers to be using cutting edge possible everything in almost all situations. Now, at some point we will get into cost optimization and cost management. We're not in that phase right now. We're in the get the best possible thing and go as fast as you can within the products. We don't want to actually upgrade our models too quickly. For example, we've built a lot of stuff to improve transaction categorization. Transaction. If transaction categorization changes quickly, our customers notice and they're like, oh, well, I built like, you know, you might say something's a restaurant and I want to say it's a food purchase. Okay, great. But if you change it all the time, then I'm not going to be able to map restaurant to food purchase as quickly as possible. So it's like different names for the same category. Those changes are hard where it flows into our anti-fraud models and like eventually into our credit models. You know, we don't want to be changing the models too quickly because we have to do a lot of backtesting every time we make an upgrade. But then anything that's like, you know, customer-facing, like our improved support experience, so on and so forth, like there we can be quite iterative. And like oftentimes we're not using the cutting edge. We're maybe using a turn or two back because the value, it doesn't make any better responses, but the cost is high. So there's so many different choices that we're making on this stuff. It's honestly really fun.

Yeah, it seems like a really—

What is your thesis on how agents will use money? Because there's a number of companies that have sprung up, and their incentive is to tell you that agents will exclusively use stablecoins and generate their own— effectively, like, generate their own real-time payment rails on the fly because they don't want to deal with fees. And I think we've generally John and I have been pretty neutral on this. We can imagine a scenario where an agent would use stablecoins, but we can also imagine a scenario where—

Where an agent hires a human to be a bagman and carry cash from one place to another. That's another possibility.

That's another possibility. Or just use the existing rails that I— if an agent's acting on my behalf, maybe they use the existing set of financial products that I already use.

For as far as I can see, which in this environment is maybe a year or something like that, I think like agents using credit cards is going to be like by far the primary thing that happens. The reason for that is the merchants accept credit cards, right? Merchants don't accept stablecoins for the most part, for most of the things that a consumer wants to do. Now, over time, certain types of merchants might start to accept stablecoins, like certain types of payments might move in that direction. The question is like will the companies that care about making credit cards really easy be able to make them sufficiently easy in the amount of time that, you know, the merchants actually start to shift to think about accepting stablecoins? And my hunch is like you've seen, I think, I think like Ramp actually launched an agenda credit card, like one of our customers, Privacy.com. They have an agenda credit card. I know there's a bunch of other agenda credit cards that are out there. And like, I can't like Imagine that there will not be 5,000 YC companies that are launching agentic-focused credit cards soon. So I think we will see more and more options pop up. And that's not to say I'm not a believer in stablecoins. I think it'd be super cool, but I just don't think it's realistic in a short timeframe.

Yeah, yeah, that makes sense.

What about what is your timeline or prediction around big institutional banks natively supporting stablecoins? Like, is there, is there a point where like the default Chase account, you want to make a payment and you have the option of, you know, a Zelle, a wire, or a stablecoin payment? Or is that not coming ever?

Or, you know, what's your general read? I think it's probably coming. I don't know that it's coming going fast. And I think there's like a lot of reasons for them to want to be slow. But I certainly think some of that is coming. Like, I think wires not working on weekends— one, it's actually structurally not true. Like, there are many ways to like create the effect that a wire has moved on weekends. So like, if a bank wanted to do that, they could do that. But ultimately, like, it is a thing that bothers enough people that some people will want to move money on weekends, and we're gonna have to give ways to do that. So stablecoins seem to be the most optimal way to do that, even though you can change the existing system.

You wonder where that— maybe there's not enough consumers that are even asking right now, to be honest, but it might actually come from industry first, where like car dealerships are like, hey, we really want better ways to—

I just found a bit of a potential competitor for you might need to watch out for in like the agentic future. I went to Brinks.com and there you can move money via an armored car and the roads are open on the weekend so you could move a lot of cash. You might wanna watch out, Zach. You start retooling the business plan 'cause you're gonna have to deal with, hey, Codex, dispatch the Brink truck. Don't make mistakes. This is gonna happen. You gotta watch out.

So watch out, you gotta stay sharp. What else is on the roadmap for Plaid this year that you can talk about now?

We've got Effectz coming up. So Effectz is our annual conference. It'll happen here in a couple months. It's gonna be awesome, super fun. Nick, we haven't figured out what we're gonna do together.

I was thinking he could fit really well into that too. MC, great. Very good.

Exactly.

If you guys wanna come visit, We'd love to have you. Amazing.

But yeah, so that's going to be a big one. We've got a bunch of launches lined up for that. Cool. You can't spill the beans on all of them, but there are going to be a lot of AI-related things, as you might imagine. And then look, it's been a really fun year so far. I think just like even for me as a leader, retooling the company to think about how do we want to operate differently if the average size of an engineering product and design pod was It was 8 people, now it's 4 people. Like, how can we parallelize things? So like, honestly, just as a leader, it's really fun right now to get to retool an entire organization around, you know, an improved shipping velocity. So yeah, I'm nerding out with it. It's great. I love it.

I love it. Well, congratulations on all the progress. Congratulations on the acquisition. And we'll talk to you soon.

Have a great day. Yeah, great to see you, Zach.

Goodbye. The Daily Beast got a little bit of a scoop Here's how they phrased it. They said the 75-year-old Disney executive who stepped down as CEO just last week has been busted for leading a secret double life on social media under a different name. And, uh, Taylor Lorenz is on a tear. She says Bob Iger had a private IG account for IRL friends and family where he shared kayaking photos with his wife. And this is how the Daily Beast framed it. That is an absolutely— it's like Yeah, I guess he had a Finsta. He had a fake Instagram account where he would, you know, connect with friends. Not an uncommon tactic for someone who's probably the most scrutinized and watched public figure potentially in the business world. Everyone wants to track and read into what is Bob Iger doing. Is he, you know, in— is he in the office? Is he in Orlando? Is he at Disneyland? There's a lot of reasons why people would want to report on every everything that he does, and he probably doesn't want to share all that. So he had to do the fake Instagram, the alternate, the private Instagram for friends.

We have a good place to end it. Please. John Palmer's wife's company was more innovative than TVPN in Fast Company. Honestly fair. What is Row 7? We got beat. Row 7 makes seeds. Seeds? A vegetable company dedicated to delicious This is more innovative. It is. They're inventing vegetables. We reinvented business television.

Well, it ain't over till it's over. So yeah, wait for next year because we're coming for you.

We're coming for you. It's personal now. It's personal now.

We're not stopping until we get to number 41. Let's make it happen. Thank you for watching. Thank you for watching Apple Podcasts and Spotify. Sign up for newsletter, tbpn.com. And we'll see you tomorrow at 11:00 AM Pacific. See you tomorrow. Goodbye.