Daniel P. Driscoll, General Randy A. George, Gary Vaynerchuk, Harley Finkelstein, Delian Asparouhov, Will Ahmed, Adam Porter-Price, Jack Altman, David Haber, Alex at Hallow

You're watching TVPN. Today is Thursday, May 8, 2025. We are live back in the temple of technology, the fortress of finance, the capital of capital. We have an amazing lineup today. Absolutely stacked roster. We have our diversity. Yeah. We have the Secretary of the army, the Chief of Staff of the army coming on. We're doing a post game on Anduril's acquisition in the private markets. And then we're doing a post game on Shopify's earnings in the public markets. And then we got venture capitalists coming on from Founders Fund, Alt Capital, Andreessen Horowitz. We got Gary Vaynerchuk coming on from Gary Media himself.

Super excited about that. We had a conversation. We had a conversation with Gary off stream a little while back and excited to make that one happen.

Yeah, very excited for it. But we do have to take you through the news and of course, we have to take you through some ads. So switch your business to ramp.com. time is money save both easy use, corporate cards, bill payments, accounting and a whole lot more all in one place. I love that sound effect. It's, it's really, it's really.

I turned on the sound effect and John turned up his.

Oh, yeah, I turned it up because I want to hear it more. I'm so locked in with it.

Anyway, we didn't have the sound.

Go to ramp.com. switch your business. But thank you to ramp. The big news. Shaking up the tech industry today is of course the CEO of Instacart Fijisimo is going to join OpenAI Huge Pay as the CEO. CEO of Applications. So now they have maxed out contract, separate CEOs within. As if it couldn't get more complicated.

Over at OpenAI, they heard us talk Tuesday. They said, we've got, we've got people confused. Let's make them even more confused.

Yeah, let's keep it guessing. Keep you guessing. Yeah.

I mean, there's so many. It's funny, there's a lot of different entities. You could have CEOs at different entities.

Yep.

That's certainly. It's very clear they're not calling it a co CEO role.

No, but she is a. She's an absolute legend. She was one of the top executive it is at Facebook. She founded the Mitadora Institute health clinic. She's been, she's on the board of directors of Shopify, who of course we're talking to today. And she's also. She's also been on the board of OpenAI for a while, but now she's stepping into an executive role. She worked at ebay as well as Facebook and Instacart. And if you pull up this her post, it's very interesting because May 6th she was posting about working at Instacart saying, this is Fizz, our new group ordering app for drinks and snacks launching today. Very cute. Which was a cool, a great product, but doesn't quite have the weight as we're building. Machine God. And intelligence is too cheap to meter, you know.

Well, she's going to be focused on products, right?

Yeah, maybe.

I saw the Fizz launch and I was like, this is a cool, fun consumer product built on totally on Instacart.

And it also has a part of integration so everyone can kind of say what they want as they're. As they're, you know, planning their party. And then, and then things got real. She moved over to Open Air, which I just feel like, you know, obviously it's a fun company. I was noodling on OpenAI chatgpt all yesterday making charts and last night making images and stuff. I have a. It's a fun app. You spent, but it has weight.

You were sleep deprived and spent like 45 minutes working on one chart.

It was so fun.

Vibe. Vibe creating.

Yeah, basically a chart. Yeah, it was great. Anyway, Dan Primack has a big question. When is the last time the CEO of a very successful company quit to join another company in a non CEO role? Well, I can't name one. I bet OpenAI03 can if you search.

That unusual on so many dimensions. And this is an unusual move.

Yeah.

And yeah, it's interesting because the narrative with OpenAI for a long time has been the old OpenAI was this insane lineup. Right. Because you had Ilya, you had Andrej Karpathy, you had Greg obviously, who's still there, but then you also had Daario and. And everyone who's gone on to found a foundation model company at one point seemed to have worked at OpenAI and there was this question of like brain drain, almost like, is it just Sam now? But he's put together a new team of founders and executives that are kind of in the same realm as the previous team. And so when you think about bringing over Kevin Wheel to work on product, like he is a founder CEO that took a company public. Like he's a very accomplished business person. And so, yeah, it's been interesting to see how this works. But I mean, it makes sense. Like it, it is like what, the most, the most exciting technology since fire or electricity or something like that. Like it's A big deal. It's a lot of fun and you're at the center of something very important. And I'm sure there's a lot of amazing work to be done. And so OpenAI, Sam CEO Sam Altman said he would continue in his role overseeing verticals like research computes and applications. CMO will report directly to Altman, which is very interesting because you would think you would just do like chief Applications officer, but CEO of applications is a new term that we haven't seen before.

Yeah, it's interesting. As Matt Turk shared earlier, if OpenAI is mostly staying out of the application layer, a promise made to AI application developers, as long as they don't compete on what core models can do natively, why do they need a CEO of applications? Interesting question. I don't know, but OpenAI already has applications, right?

Of course.

And they're buying.

They have several. I mean, like, yes, yes, they try and centralize everything in ChatGPT, but they also have. What's the video model? Sora. Sora is its own application. Like it's a web app, but it is its own application. And now Windsurf will be its own application. And you could imagine many of those. Also. The real interesting thing is, is there some 4D chess, tinfoil hat conspiracy that Instacart rolls into OpenAI at some point?

That's very interesting.

I don't know. I mean, I think that's a crazy idea. But it is kind of interesting to.

I think it's a very fascinating idea, John.

Yes, yes, it's all a plan for Sam to control delivery. But I don't know, I mean, you could imagine some world where you want to instantiate something in the real world and you need a human to do that until there's humanoid robots. And Instacart has a huge workforce of humans that can do things. And so you're on operator and you say, I need somebody to go do something for me. And they. Against the current workforce.

I don't know. AI, you know, the sort of consumer agent, the AI assistant that can do everything has been, you know, one of the most exciting promises. And yet there's still a lot of things that, you know, O3 is amazing at some things. Hey, put together a report or an analysis on this new law. Great. It can do that. Well, if you wanted to pick up your laundry or something like that, I.

Think more, more likely she's just an amazing operator and they're scaling up and that. That conspiracy theory is just what I said it is. But she has years of experience in product management and monetization. Little. A bit of a generational run. She spent more than a decade at Meta leading the launch of ads on the news feed, heading monetization for the Facebook app, overseeing product development for Facebook video. That was huge. And then helping build its advertising business. Of course, like all the foundational stuff.

That they do, that to me feels like it's not getting enough attention.

Yeah, yeah, yeah. And then she took Instacart public too.

Right?

It's amazing. So, yeah, so she's going to stay on as chair of the Instacart board. In a letter to Instacart employees, she said a current member of the company's management would replace her as CEO and an announcement would be made soon. And so congratulations to OpenAI and to, you know, everyone involved in this deal. I'm sure it's a maxed out contract. Jordi, what do you think?

Maxed out? Probably, probably, you know, four year fast. One year. Cliff, you know, don't want to speculate too much.

Don't want to speculate too much.

I would go out on a limb and, you know, make that guess.

Yeah, we, we got another. I mean, the other story that's basically in the news is the death of the Google search. Google traded down showing that there are a decline in actual search volume. This has been predicted for probably like two years now. I remember using the very first GPT3 playground and thinking like, oh, this is a search engine because that was the thing that it could do kind of. Well, you had to kind of massage it and write the query in a particular way because it wasn't, it wasn't RLH def in the way to be like a friendly, helpful thing. It would just kind of continue. But what you could do is you could say, you know, let's say you're, you're searching for headphones or something. You could say, list of best headphones 1. Apple AirPods 2. Bose 3. Space. And then it would continue writing and it would just guess and fill it in. So you had to do a little bit to like set it up to thinking in that way. It was a lot of prompt engineering. But I could see even from that very early stage that search was going to be a thing. But these trends take a long time.

And, and I mean the, the, the fall in the share price yesterday was extremely dramatic. It was kicked off by Apple's VP of services who came out and said that for the first time it was specifically in Safari. Right. So it's important to note that that doesn't necessarily count what's happening over on, you know, people using the Chrome browser on iPhone, which is obviously quite a lot of people. I think the Safari Safari browser has always been relatively underwhelming even though it's the default. And it's interesting, I mean the brutal irony of the situation that Google's in in that they have leading AI models yet that technology set, and it's a technology that they have played a massive role in creating is the same technology that is, you know, just going to slaughter their golden goose.

Yeah.

And you know, it's like yes, of course LLMs can drive a massive amount of revenue across the Google ecosystem over time, but they have a, you know, $200 billion cash cow in search and you know, there's going to be a wide gap between. The question is how quickly, how fast is that revenue shrink versus how fast does sort of generative AI revenue grow? And there could be a very rocky middle period. I think it's, it's hard not to be bullish on big tech broadly. Right. They have so many advantages with this transformer after all this new sort of tech trend.

But yeah, but yeah, it might mean a slight change for the, for their strategy overall. I have a take. But first let me tell you about public.com investing for those who take it seriously. They got multi asset investing, industry leading yields. They're trusted by millions. Hit that soundboard, Jordy John.

Never know what to hit.

Yeah.

Expect the unexpected. Anyway, thank you to public for supporting this guy.

Yeah. So there's, I wonder how real this dynamic is, but I feel like there's a little bit of Google where you start using Google for research and to find answers and you use it as this answer engine and then when you go to buy insurance you wind up googling that, that too out of habit. Whereas right now what's going on is that a lot of those knowledge queries, those non shopping queries that are probably less valuable to Google because I would normally just land on a Wikipedia page or some sort of blog post explaining the concept that I'm asking about instead of, instead of taking that to Google, I wind up on ChatGPT and then I'm still doing my shopping queries. Like I bet my, my ARPU at Google is still similar because I'm still clicking the ads when I do go and buy something. But the fear is that once Jack is shopping and I have that more, it's more the default behavior then they really do lose me as a customer. And so, so maybe like user Monetization is a lagging indicator for Google, which would be.

Yeah, it was interesting. I mean these are sort of different business models. The thing that's just sorted around LLMs right now is people are paying for them. Right. People are paying $200 a year to use perplexity. They can get the same information from Google. They can get a lot of the same information from free LLMs. The question becomes is, are ChatGPT and ChatGPT like products going to monetize as well as search? I don't know.

They'll monetize better.

You think, you think they'll monetize better?

Almost certainly.

The question is it will have to get to a blend of SaaS and ads, I imagine, right?

Oh totally.

100% Google search right now. I was talking to Daniel, but not.

Not even just that. Also, also essentially like affiliate fees. Yeah, because you could imagine that if they cut out an affiliate and they, and you just go to ChatGPT and you say order me the best shoes possible and it just does it.

Yeah.

Like you've cut out seven different steps and so they're going to be able to advertise. There's a whole bunch of ways that, that they could capture value. I just think it's going to take a while but I don't see a reason why more data, more knowledge on the, on the interaction. Like even the ChatGPT memory thing, I was working on like an image poster and I had said the name of the title of like the movie poster. I was like take the Pulp Fiction poster and replace it with a different name. And. And then I was like, I was not really getting what I wanted. So I started ent new chat and then randomly it was like hey, would you, do you want me to use a different name? Because it remembered from the other chat that I was working on the same thing and it was like okay, yeah, you opened a new chat but you didn't really open like a new instance of me. And so like you could imagine so many different ways to have just way, way more context aware Search totally will monetize in terms of ads and everything else. First let me tell you about Linear. Linear is a purpose built tool for planning and building products. Meet the system for modern software, streamline issues, projects and product roadmaps. Linear app.

It is the tool that we use to run TVPN and you should use it too. Thank you to Linear and I believe.

Our first guest is here. Welcome to the stream. Hello, welcome. Can you hear me? Okay.

Hey, can you hear me?

Yes, yes, we can hear you.

Welcome to the show.

Thanks so much for taking the time. I'd love to start with kind of an introduction and an overview of what modernization is, what this project is, and what you've been just talking about in the media most recently.

Yeah, I have to. So the United States army is 250 years old. It's older than our country. We're celebrating our birthday this upcoming June and the last 30 or 40 years. One of the problems is that the Pentagon has contorted decision making in on itself and it's optimized for all sorts of crazy things that have nothing to do with soldiers in war fighting. It's optimized for parochial interests around the country. Lobbyist led, donor driven, non war fighting outcomes have driven what we've done for a couple of decades. And so what we tried to do in the last 75 days is work with army leadership under the leadership of President Trump and Secretary Hegstad, and put together a plan that is just rational. And so the plan essentially does four things. The first one is cut. And a lot of these will seem so preposterous to you that this is even a big thing, but it is. And so the first bucket was just to cut obsolete systems that we don't even want anymore and soldiers haven't wanted. And this is the part that should kill your soul for decades sometimes. I mean, we have been buying these things because they're just lack political will to stop. So mechanistically what would occur is the army would say, hey, we want this. And then Congress would come in on top of it and say, you have to keep buying these things for these other reasons. So it's to cut that, it's to then take the dollars that have been saved and fund the things that we actually do want. So if you thought about what modern warfare will look like, you need drones, you need autonomous systems, you need a data layer. We have to pay for that with something. So we're going to use the dollars to do that. There's a third bucket of actions which was basically we, the army have been a terrible customer to ourselves oftentimes. And so we've given away the right to repair our own equipment. So as General George, the four star in charge of the army, and I would tour bases, you'd see this exquisite, these exquisite platforms sitting on the sidelines for nine or 12 months at a time where we could 3D print a two to $20 part. And we weren't able to do that for ourselves. And so we banned that and the fourth thing is essentially we just allowed this preposterous amount of leadership to grow in our own formations. And so soldiers join the army because they want to wear a helmet, they want to get out there and they want to fight. And we put them in headquarters passing around paper. And so we said we've got to start with ourselves, we're going to push 1,000 people back out, we're going to get rid of the jobs, and then we're going to repeat these four sets of exercises again and again and again till we get closer to right.

What have you learned from history? And kind of the root causes of these problems is just the end of the Cold War. Is there something about technology and the digital transition, like what should we take from the past to inform the future as we look to, you know, it's not enough to modernize now, we want to stay modern. Right.

I think one of the things we, the army have, have not gotten right historically, at least in the last couple of decades is looking to the private sector. What Silicon Valley does in our venture backed startups and just our small and medium businesses around the country, what they do incredibly well is they go find product market fit, they have an innovative feedback loop where they take their minimum viable product, they get in the hand of customers and small, medium businesses in the, the heartlands might not call it this, but they practically do it. And then they learn from it and they iterate and they change. What the army has historically done the last couple of decades is we lay out these big grand schemes, we put a wish list together of all the things we could possibly want, and then we go out to the market and we say, hey, build us this and we may buy it. The problem with that model, as you might guess, is only a couple of incredibly well funded companies can do it, which we call the primes. And then they end up doing it terribly, and they've done it terribly for a long time, but we held ourselves hostage with our bad processes. And so I think one of the lessons we're learning is the army does best when it is synced with American enterprise and when it's synced with American ingenuity. And we are trying to return to those roots.

Can you talk a little bit about the breakdown of modernization strategies across hardware, software people? There's so many different. I mean, it's a massive organization. How are you thinking about decomposing the problem and where can Silicon Valley fit in?

So optimistically, a lot of the things we need are very basic tools that already exist in medium and large sized businesses in the country. I think Silicon Valley, the chief of staff and I did. One of the first things we did is we went to the west coast and we hit Microsoft in Seattle and we went to Silicon valley and did OpenAI and Meta and Google, and then we went down to Los Angeles and did Palantir and Anduril and some other autonomous software companies. And it's incredible what they've built. And so when we are trying to build something to compete on a hardware side especially, it's generally going to be a bad outcome for us. But I think what we are trying to do is we're defining our current short term goal for modernization. The number one thing we have to do is create a data layer. So we need our people to be able to sync with each other over the horizon and then sync with our things and our sensors. And all of this has to happen in near real time. And it has to be able to be updated constantly with new software as we've received inbound attacks. But what that data layer will do is it will allow us to start to do things like apply generative AI to our targeting. It will allow us to start to think of our vehicles and these exquisite tools that we build as really just the manifestation of software in the world through this hardware. But that's how wars are going to be fought going forward. I mean, it's hard to understate or, excuse me, overstate war. And the way humans have fought for the last couple of millennia has changed in the last three years. This is an inflection point. And if we don't move quickly, we're going to be left behind.

Yeah, Jordan, can you talk about the force itself? I was talking with Kathryn Boyle over at Andreessen, friend of the show, and she was saying that the force today is just so much more technical. Right. This is a generation that has grown up, you know, online, you know, very sort of Internet native. How do you look at, you know, you know, kind of upskilling within the force today and taking somebody from good to great or, you know, technical to, you know, truly an expert?

This is going to sound sycophantic. And so I commit to you that when I hear people say these kinds of comments, I always think they're full of shit. I actually believe what I'm about to say, which is the most remarkable part of these last 75 days of returning back to the army and getting to spend time with soldiers, is in the intervening 15 years since I've been gone, I went to an Ivy League law school. I've worked in VC backed companies and I've fed a fund. I've worked in PE backed companies. I've seen big, amazing law firms and consultants. And I would put the average American soldier against any of those people as far as their intellectual curiosity, their ability to problem solve, their ability to get to an end state of success like the American soldier is incredible. And especially what you're pointing at, our younger ones, when we hand them this technology, when we hand them these new drones, when, when we empower them with tools, I mean, they figure it out in two or three days.

It's.

It's mind blowing. They don't need a manual, they just get it, they put in their hands, they put it up in the air and they've started to innovate on it. And what we're trying to do is like, if we look at basic training, I was at Fort Jackson last week, which is one of the bases we put through a lot of our new soldiers. These soldiers were civilians five weeks ago. And we're running them through drills where we're putting up drones. They're learning how to think about top cover. And then when they finish this exercise, they go and review the drone footage to see what could a drone see. And I mean, it has been amazing, the kind of lessons and what we're taking away from somebody who has five weeks of experience, much less the other 1 million soldiers that we have, it is. It is a group of people that are just ready for the challenges ahead.

How, how are things changing on the recruiting side? The army is obviously, you know, struggled over the past. Call it, I don't know, five, ten years around recruiting. And I can imagine showing how you guys are modernizing is a great first step to be like, there's changes happening, we're innovating. This is a place to come and be part of an organization with real positive momentum that's adopting technology. I mean, it's such a massive change. Is that an intentional part of revitalizing and strengthening the recruiting process?

Absolutely. And so there's a couple of ways I would talk about recruiting and we talk about retention too. So how many soldiers decide to stay in? So the first thing I would say, and again, very sincerely, the leadership of President Trump and Secretary Hegseth has created a culture that is a return to excellence and a return to lethality. That was kind of the vast majority of the Army's experience or existence. And people want to be part of that. They want it to be harder. Like it's not about the stuff that they get for joining the army. It's about what the army can make them, but then quantity. So that's qualitative remark. Quantitatively what we've seen is kind of on the front end demand to join. We are killing it. We are up in nearly every category and nearly every geography across the country, male and female were up this year. And so we're really excited. And we think a lot of that to your point, is the storytelling. But our retention is incredibly helpful for us to look at too because to us that's the trailing indicator of how we're doing. And it is the soldiers that actually see us and are part of this and are reading what we're doing and are living this life. How are we doing there? And we're excited to announce we hit our 12 month goals six months into this year. And so all of that makes us pretty optimistic.

On the topic of kind of the actual fighting force is progress in technology or artificial intelligence playing into how you think about the scale and size of the actual humans in the army over the next few, I don't know, years or decades. Because in Silicon Valley we're hearing stuff about job displacement or a single company run by one person because they're so augmented by artificial intelligence. I imagine that a lot of folks in the army are just excited to use these tools to be able to do more faster. But what has the response been on the ground?

So I think about the army, we think about it, General George and I and the rest of the leadership team is two, two kind of fundamentally different things. One is a large enterprise system, it's a large enterprise business. The other is a war fighting killing machine. On the, on the large business side, one of the things we've been able to do is like our recruiting command. This may seem very basic to you, but it's hard to overstate how important this is for us. Instead of building proprietary software, hiring some developers, creating a new tool for how we, the army existed in the past, and then having to maintain that in the future with a bunch of other siloed tools, what our recruiting command did is they moved on to Salesforce and then they changed how we recruit people to match what Salesforce already had in its out of the box solution. And so. And then we've tweaked it a bit.

Yeah, of course.

But we're seeing just these incredible leaps forward as how we manage the army as a business. And then to your question about like the war fighting function, I think what ends up happening a lot of Times is people are trying to be intellectually weak, let's say, in answering that type of question. And so what they focus on is things like end strength. And then so they'll say we're going to go to battle for the number of soldiers that you have. And the army will say we need more, and Congress may say we need less, and the Navy might say we need more. And that's not actually the right way to think about it. The right way to think about it is how many soldiers do we have with helmets on that can go be the fighting force that we as a nation need? And so one of the things we focus on a lot is what can we outsource to technology once we create this data layer, what can be done by generative AI? And then what can we do with those soldiers to push them forward? And then how many of those soldiers do we actually need that can squeeze triggers or push buttons and kill on our behalf? And so the long winded answer is, I think what General George would echo too is we don't know what the exact number is. We think we're at about the right number. We probably wouldn't cut a lot, but our goal is to push more people from doing kind of like the useless shit in the office and push them back out into the field.

Makes sense. How would you grade just, you know, a lot of our listeners are in the technology and venture capital community, Silicon Valley, broadly. How are we doing as an organization, as a, as a community, are we stepping up enough? Obviously there has been this massive vibe shift and, or part of that Palantir part of that American dynamism and Andreessen Horowitz part of that. But are you seeing what you want to see from the technologists in Silicon Valley? Is there more that we could be doing? If so, what I think what you.

Should see is by General George and I coming on your show, we want you and need you. We are inviting you in, we are inviting that community to come help us. One of the things that we've seen with Doge, aside from just the cuts and the headlines and everything, that kind of people want to write about more often. What's actually really valuable about having Elon and his team here is they push us to think, is that a first principle problem? Is that a problem of gravity, or is that a human created problem? And taking that lens to a lot of these, what you realize is I, the Secretary of the army, my pen stroke can fix a lot of things. Secretary of Defense, he says pen stroke can fix a lot of things. We need the right mindset. And General George and his leadership team have been waiting for us to come in and give them the top cover to do what they know is right. And so I guess to grade Silicon Valley right now, I would say we can't give a score. I think a lot of the Palantirs and the Andrews had to take a beating over a number of years just to get in. We are trying to open the door up to get more in. And what I would say is what we need from Silicon Valley and the VC world and private equity if it's already starting to scale. We need you to look at what we need in our future wars and we need you to help us build it. And it's got to be cheap and it's got to be scalable and it's got to be not exquisite in nearly every instance. And despite our tendency, what we're going to need is we're going to need pushback Every time we put another requirement in, we need that community to say, well, wait a second, why are you doing this? Like it? We created this rcv so it's a robotic combat vehicle. It's awesome. The thing is cool as can be, but it's $3 million per copy and an $800 drone can take it out. We're one of the wealthiest nations in the history of the world. The math doesn't work.

How much do you feel like the west coast and in general the defense tech community broadly takes feedback? Well, a lot of people get fixated on a single solution or an idea to a problem and maybe they'll head over to Washington, start talking about it and get pushback. And sometimes founders can get so much conviction in an idea and they think exactly what they're doing is right. Have you found the defense tech community to be as receptive to kind of feedback as they should be, or are some of us a little too hard headed still?

I think if you take the most hard headed founder you've ever met and the person who's most entrenched in their belief set, and then you compare that person to the defense industrial complex and the Primes, your vision of entrenchment wouldn't even get you into the game with how these Primes have thought and acted in the systems that they've created. One of the things I say very often now is I will measure it as success. If in the next two years one of the primes is no longer in business and the rest of them have all gotten stronger, we desperately need the thinking from middle America, small and medium businesses, innovators in garages, venture backed businesses. And not to come into the Pentagon with us and push us on everything because that's where American ingenuity thrives the best. And so again, the reason we're here is we are welcoming you in.

Yeah, that's fantastic.

That's fantastic.

I mean, I have one last question that we'll switch over. Are you seeing enough from the, the parts of the financial market outside of Silicon Valley? For a long time, certain large pension funds couldn't invest in defense technology. Obviously we are very excited about the venture backed defense tech ecosystem. But there are transformations that should happen, maybe in the public markets, maybe the even though I'm rooting for the startups here, let's make our primes great. Also, are you seeing movement there? Is there the same type of energy in the public markets with the really big companies that maybe you're seeing in Silicon Valley?

I would say that they will be slower followers is my guess. I think that they have typically been able to withstand these little bursts of energy that happen at the transition of an administration. Their incentive structure, I think has been in these moments when you have General GEORGE on yes, we just testified yesterday at the House and we get yelled at by whomever the Congress man or woman is about whatever the parochial interest is. I think that the primes have had the tendency to double down on lobbyists. They've had the tendency to pull down the hatches and basically say we're going to weather the storm. And so what I think they're misunderstanding about this moment in time is President Trump's and Secretary Hex's tolerance for Payne to do the right thing on behalf of the American soldier I truly believe is different and unique. And my best guess is that they will start to realize in the coming days, weeks and months that they are going to have to adapt and change or die. And we are not going to come bail them out again as a nation. And we want them to succeed. Those remaining ones that can sell to the army in a couple of years, they're going to be incredible because we won't buy it unless they are. And so I think what it is going to take to change them is the realization that the ways that they have delivered value to their shareholders for the last couple of decades are no longer going to work in the new security environment with the leadership of the President.

Well, Secretary Diskel, thank you so much for joining. This was a fantastic conversation. I learned a ton. Really appreciate you hopping on.

This was fantastic. Come back on.

Yeah. Whenever you have more news. We'd love to have you.

Love to have you.

I appreciate it. Hey, thank you for having us and.

Thank you for doing what you're doing.

And General George should be joining in just a second. I'm excited to go deeper on this topic and then hopefully carry these conversations into some of the other folks we have on the show. Michael, I don't know if you want to pull up the guest list as well while we're bringing in General George, but we can give you the rundown of the show. We have General George coming in now, and then we're going to jump over to Adam Porter Price at Andrew Perfect Segue. And then Delian at Varda can also give some, some context on what's happening in defense tech on the smaller side of things. But the, the, I still think the, the, the proof is in the speed of execution. To go from a tweet that I posted that was, you know, almost half joking. Hey, tvpn. Hey Army. Do you want to come on tvpn to actually making it happen in two days. They're going to rest is just speed of execution. And you can tell that, I mean, there are some, there are some startups that can't get a CEO on our show in two days.

Yeah.

Because they're like, oh, we got to talk about what they're going to talk about.

Or a solo GP that needs to schedule a month out. Yeah, like how many Are you going on four vacations in a row? Yeah, no, but, but just the mindset, the focus, the sort of urgency, the commitment is amazing to see.

Yeah, totally. Anyway, let's take a second to tell you about numeral sales tax on autopilot. Spend five minutes per month on sales tax compliance. It is AGI for your sales tax. Sales tax on autopilot. Numeralhq.com Go check it out. We, we should also build, we should also build some poly markets around Army Transformation. I wonder if there's a market for, for recruitment goals. Well, anyway, we have our next guest. Thank you so much for hopping on. General George, welcome to the stream.

Thank you.

So we were just talking about modernization. I'd love to hear a little bit more about what that means for you, what your goals are, and how would you describe the overall process to our audience, which is mostly folks in Silicon Valley, venture capital and technology companies.

Yeah, I think we're seeing, we're watching what's changing around the world on the modern battlefield. I think a lot of people are seeing it and reading about it. And you know, what you get with a lot of this dual use technology is changing. Drones, for example, autonomous systems. What we have been doing over the last year or so is actually transforming our units. We're going to have to change how we train and operate the big thing. And I think our secretary was just talking about that, talk about how we buy things, how we get products that we know are going to work into our soldiers hands and doing it quickly. I think the biggest change that we're trying to do is actually getting the engineers that you guys are familiar with out inside of our formations, seeing the problems that we're trying to solve and help us solve those problems directly. So we're trying to get rid of all the middlemen that we normally have had in our process.

I was reading Mike Gallagher's Wall Street Journal op ed, bring warriors back to the US Military. He advocated for something he called shifting tail to tooth, talking about urging the Pentagon to redirect money and manpower from headquarters bureaucracy to actual combat units. Is that an important shift? And, and what does that actually look like, empowering the war fighter to make a decision to buy something that seems like antithetical to the way we've been operating?

Yeah, well, you know, we, I, we always put things in terms of, you know, we have a budget, it's our job to get the biggest value out of that.

Yep.

Headquarters aren't going to win. You know, it's our soldiers that are out there, you know, fighting and we need to put every resource that we can into those. So we're cutting higher headquarters, we're cutting geo positions, we're, you know, closing some of that down so that we can really focus. And I know our secretary and I talk a lot about getting helmets back out inside of our formations and that's what we're really focused on. So we're cutting our headquarters here in D.C. you know, whatever we can do to thicken our formations, make sure that we're growing the capability that we know we need.

Can you talk about how you're thinking around planning and urgency as you guys have a sort of monumental task to modernize the force and you guys are making great progress against that, but at the same time, you know, this is a multi, multi year project. How do you think around kind of pacing and, and pushing your leadership as well as the force to move as quickly as possible?

Yeah, well, the biggest, our soldiers have no problem moving at speed. We've shown that. You get that out there, they can adopt this technology, they can do it quickly. The Problem we have is the closer you get to D.C. that's where the challenge is. And so again, I think cutting some of that out, you know, the Secretary talked about, I'm sure, about being data centric and what we're doing, you know, to understand, you know, what's happening inside of our formations, automating our business systems, there's just a lot of things we can do. We can go fast, and there's a lot of things that we can do to adopt commercial tech out there. We're buying things that are modular, open system architecture that work with us. The we have bought drones for the most recent brigade that were updated from the very first unit that we fielded, some of the drones. So I think we have to buy things differently and I think we can go faster, and that's our focus.

Can you talk a little bit more about that digital backbone? I'm sure there's incredibly advanced things that you can do with artificial intelligence once data's in one kind of centralized location. But are there still systems that we're moving off of paper and just like, can you talk about the balance of working on the latest and greatest while still tackling the nuts and bolts of just a version one of a digital transformation?

So one of the things for us is we're calling it next generation command and control. And you can envision we have a bunch of these disparate systems. Each of them have a vehicle, there are several different radios, and we're collapsing all of that. You're basically, you know, leaders are going to be out there with a tablet and apps. So you got an application that does airspace management, you got an application that can help you with lethal targeting, and that's. That's where we're moving towards. That's on the tactical side. We're doing the same, the same thing on our business side. And really, we need to collapse all that together. I mean, I don't ask for, you know, the days I think of asking for information, papers and asking for information or over. I mean, I have a smart board in my office. I have every. You know, I just don't do that anymore. I can go click on anything that I need to know inside the army and have that, you know, have that data at my fingertips. And we just got to train all of our leaders. Like I said, that has to be business from top to bottom. Our soldiers have no issue. That's, you know, that's how they've grown up and they are very comfortable in that space. And we got to make sure the whole process from top to bottom is.

Operating like that is this modernization effort. I imagine that it will have knock on effects in recruitment. But what, what are the other messages that you're sending going forward around recruitment specifically?

Well, we, we're doing great. I think we're, we're closing in on like 95% of our recruiting mission. We have some of our biggest months that are coming up. You know what I, I enlisted in the army right out of high school. You know what people come into the army, they want to come in and jobs and again that gets to, you know, cutting out the excess and you know, folks at headquarters and doing those things. And so we're trying to eliminate anything that doesn't allow them to completely focus on their jobs. The other thing that I consistently hear from soldiers when I'm out there is that they know we need to transform, they want to transform faster. And so I think we owe them that and that will make a difference too. They want to come in to a modern transformed army and we can do that quickly. I'm confident of that.

What kind of. Historically people on the west coast and San Francisco or working in the tech industry generally think about serving the country by maybe joining a defense tech company. And if they're an engineer particularly, they want to oftentimes work on, you know, technology in the private markets. What kind of opportunities do you guys have in the force that you're really excited about recruiting for that maybe people within the tech community aren't, aren't thinking about as opportunities today.

So we are reaching out and I hope here next month we got a bunch of folks that we want to bring in. You know, there's so much talent out there, you know, that they have an opportunity to serve. We have some of them that on the army birthday we're going to swear them in that are engineers, technologists that can serve in the Army Reserve. They can help us and still be a part of their companies on the other, on the other side. You know, we want to be very open. I mentioned the transforming and contact. We're having engineers that are coming out with our units, seeing how our, you know, seeing the problems that our soldiers are trying to solve in the conditions they're trying to solve it, whether that's, you know, the heat out in the Indo Pacific. You know, we had engineers with us over in Europe and I just think we need to be more open and inviting and getting those folks in because we got a lot of innovation out there and we need to just make sure that we're tapping into all of it.

Last question and we'll let you go. A lot of early stage defense tech companies, they don't always have the opportunity to go run a large scale pilot with the Defense Department of defense or the U.S. army on day one. Some of them are getting experience in Ukraine, for example. Has that been, is that an effective path to pull some data from a Ukraine experience as a startup and then use that as a case study to make the case that the US army should at least demo what they're building?

Yeah, I mean, that has, we've taken a lot of that, we're collecting a lot of that, and again, we, we are creating our own environments. If you go to any of our combat TR centers, we have that out there where we have jamming, you know, they're going to have to face, you know, the electromagnetic environment that we can replicate to do that. So we're doing that at our combat training centers, we're doing that at home station training. So again, just getting these companies and that's what we want to do, we want to invite them in, and we're doing that. Next week, I'll be down at our Joint Readiness Training center and we got a whole bunch of new companies that are coming in there, showing us the systems that we have. And again, this gets back to being agile and our funding. And the Secretary and I talk a lot about we want these small companies that are very innovative, involved in what we're doing and building products for our soldiers.

That's fantastic.

No, this was great.

Thank you so much for taking the time.

I really appreciate it and thank you for all what you do.

Yep. Thanks for having us on.

Appreciate it.

Cheers. Back to talk soon. Super helpful perspective.

Yeah, very interesting.

And honestly, it makes, I mean, it's always a bull signal to me when people in any type of leadership position are willing to go out and be on the media, you know, the front lines of the media telling their story. You know, we've seen, you know, go.

Ask every drone company we've talked to, like, hey, have you actually taken the army up on their offer? They have electronic warfare test sites. Are you there or are you just, are you just building CGI renders? What's going on? Are you actually out there on the test sites getting shot down by the US Army? I imagine you build something, you raise some money, and the VCs are like, yeah, this sounds great. And then you take it out there, the army just destroys you. It's like, this is 1% of the way. They're nervous.

People are nervous to do the Sequoia partner meeting. Yeah, no, no, no. People are nervous to go, you know, do a demo for VCs, but for SaaS, doing it for the one customer that you need to make your business a reality.

Yeah. Well, we have Adam Porter Price from Andrew joining next and I'm sure we can ask him about these demos because they've been on an absolute tear, launching different missions, different programmers, record. They just made an acquisition that we'll ask them about. So. Welcome to the stream. Adam, great to have you here.

Great to have you.

Very excited to be here.

Thanks so much. Can you introduce yourself and then give us the breakdown of the news from this week?

Yeah. So I'm Adam Porter Price. I'm the head of M and A at Anduril.

I also look after some of our.

Strategic partnerships as well. And this week we announced that we acquired Class, which is a ruggedized computer company. They're based all over the world. They've got locations in the US as well as Ireland, and they've been making.

Sales to U.S. and allied governments.

So what's important about ruggedized computing in the modern warfare context?

So every robot, every Android robot has a computer in it and it turns out that, like, actually making a computer that can go into places that is hot, dirty, it's going to get dropped a lot. Things like that is actually kind of hard. And we have tested, we have tested other people's computers. Like, we have taken computers out into.

The desert and like, tried to make them work on the back of a.

JLTV and run program, run Lattice, our operating system. And, like, basically nothing works. Right.

Like, it is a difficult and very demanding environment.

And the only computer that we've seen consistently work when you're out in that.

Environment where a warfighter has to be.

Able to do something when they're out in the field is the Class. Is the CLASS computer.

So.

We use a lot of their computers today, but we have visions for what we want to do with them in the future.

And, like, the number one thing that is extremely likely to happen is that.

There are going to be more computers.

Out in the world and they need to make decisions.

Like, our AI needs to be able to do stuff without being able to phone home and ask for permission. Like, there's decisions that have to be made and literally can't happen fast enough over the Internet or over whatever networks. Right. The speed of light is not fast enough.

And so you actually have to make.

These decisions on the device.

Yeah, I imagine, like, the device gets hot, you want a fan to blow that up. Now water flows in like there's just like a constant trade offs. Right.

I was, I was thinking, you know, maybe another bidder in the process would have been Sonos. Because I can't even get, I can't even get my Sonos speakers to work in my.

Don't get Jordy started on Sonos.

I'm with you guys. I love my Sonos. And then they messed up the app.

And like, yeah, it's, it's so, so bad. Anyway, quickly, can you benchmark what one of these computers feels like relative to, you know, a phone, a laptop, desktop versus like server rack of H100? Like how powerful does the system roughly need to be if that's not classified?

So the reason why we, we, we.

Acquired this company is because the team can actually make lots of different types of computers. Like when we buy a company, we're, we're really, they, they often have a.

Product that we like a lot.

But really what we're doing is we're getting an amazing team.

Sure.

And what we love about this company.

Is that already they were sprinting with us on building a new product that we did, I think we announced this week. Menace tea, right?

Yep.

But like we have, we have a.

Lot of grand designs for different types of computers that we think need to.

Exist in the world.

And so they have, they have a.

Very popular computer called Voyager and it's.

Like, it's about this big.

Like it's, it's probably the size of.

A really thick, hard hardcover book. But the team is extremely capable of.

Building lots of different types of computers. And then the other thing that they do, which is for some people, like.

A little bit boring, but actually extremely valuable, is that they will build the chassis that's ruggedized. Like you can drop it off of.

A C130 and it's going to hit.

The ground and it's going to be fine, still going to work.

It has all of the cooling in it that you need. It can carry a lot of different radios. You can plug in a silvis and a persistent systems and a, whatever radio into it.

And so like you actually can go.

Do the stuff you need to do out in the field. You can run lattice, you can talk.

To lots of different people that are using lots of different radios. And this is just like an absolutely invaluable capability that we have to have.

Okay, talk to me about the anatomy of the deal. Is there like an investment banker involved? When did you guys meet? I've heard this story, like, oh, if you're going to get acquired. You'll meet your acquirer a decade before the deal.

Yeah.

You don't just cold call and say, hey, I'm ready to get out, take my stock off me.

I mean, if you're, if you're a.

Good, if you're a good acquirer, you are out in the market and you.

Are talking to two to 300 companies.

A year and you just like, you know everybody, right?

Like, there's not that many companies in the world and there's not that many good companies.

And so the chances are pretty good.

That in fact, like every single company that we've bought, we've known them for a while, right? We watch them, we've talked to them.

For years in advance.

And like, we've been buying class computers for, for years. We knew that they were really, really talented.

And we, we realized last year that not only is our demand for computers just insatiable, but the things that we would like to do if we had.

This team working for us, we could.

Go build products that as two separate companies, we would never be able to do.

Right.

It would just be too hard to.

Make the incentives work. And we, like, we never buy a company that's for sale. Like, we always make them for sale. We go find them and we ask them like, well, we think that there's two paths, right? There's a path where we're separate companies and we do things arm's length or there's a path where we are one company and we are able to move much faster together.

And in every company we've bought, that's the route that they've chosen.

Right.

And so we've been working on this for, since last July or August.

And yeah, how long it takes.

It takes nine to 12 months to buy a company like this.

The line that stood out is that we don't buy companies that are for sale. And I wanted to highlight that because I believe there's a sentiment in the defense tech community that's, you know, it's. I'll kind of butcher.

Who cares If I raise $200 million and, or buy me.

No, it's like, yes, shoot to be a new prime. And even if I miss, someone will buy me. I'll just run a process and I'm so talented or, you know, so I.

Want to know what is the, the state of like the market, the M and A market.

And the thing I wanted to specifically highlight was a lot of teams look talented on paper, but if you've been, if you've raised and been working on products. Even if you don't care that much about the products they built in the past, you're still going to be hypercritical because you're, the real resume is like, well, what have you built with $10 million? What have you built with $50 million? What have you done? And, and because that, that says a lot more than who your investors were or, you know, anything else.

We, we often it's really hard to buy a company that has raised venture capital because the prep stack is, I mean, you guys know this, right? The prep stack is really, really high. So, and our expectations when we buy a company is that we can like 5 to 10x revenue in 3 to 4 years, right? So you really have to have conviction that when you're paying, when you're paying what we would pay for a company and we pay in market multiples, like, we can lean in on some things. We can, we can, we can be flexible in a way that I wasn't able to do when I was doing this in more traditional companies. But like, we still, we're not crazy, right?

We pay like what you would, what.

A fair value is for a good company. And so we can lean in a bit. But if somebody goes out and raises a couple hundred million dollars, like, the, the outcome that they have to have in order for their investors to be happy and for the common to have.

A good outcome is really, really high.

And I actually think that the ceiling.

On like a yolo, like, let's just.

Do this and be legends acquisition is.

Like three or four hundred million dollars.

Like when, when Boeing acquired Liquid Robotics a couple of years ago, that was a company that they had invested in. They were a little bit bailing out the venture capital arm because the VC arm had, had invested in it.

And so like, big Boeing was like.

All right, well, we're going to, yeah, we want to own this. And I'm, I'm certain that they, I think they paid about $300 million for it. I'm certain that that was 10x forward revenue. I, I don't believe that they ever hit that 10x forward revenue number.

But like, I actually think that that.

Is basically the ceiling that a, a.

A, a traditional buyer can be like, yeah, let's just rip it right above that.

The board gets involved. There's actual valuation math.

Like, people start to look pretty critical at it.

And so for like a traditional buyer, I actually think that that's the ceiling. And like, we're not stupid, right? We don't make dumb decisions about acquisitions. We don't just like rip it because.

It'S, it would be cool.

And we're helping somebody out.

Right.

Like we are, we're, we're pretty careful with how we value companies.

Yeah. So, so you've talked to, you know, two or 300 companies in the defense tech space. I'm sure some of those every year. Every year. How are these companies being built without venture capital? That seems very counter to the narrative. Everyone says, oh, I need to raise so much money because everything's so expensive. I gotta hire all the engineers and pay for all the drones I'm gonna blow up. But yet companies are doing it, so something must be, you know, unspoken takes.

Them, it takes them longer time. Right. And, and, but what you'll find is though, that they just make decisions that you make when you are, when, when you, you have to be cheap and cheerful.

Right. You have to like hustle and you have to figure out a way to do it. And so like a lot of times.

When we find companies, they've just found a really clever way of doing something.

That allows them to get their product out.

And like all of these guys are hustlers. To all these men and women who.

Run these companies, like they move. They're hustlers. They, they, they are, they are good.

At, at running their companies and like, that's why we want to own them.

That's awesome.

Do you expect more competition from primes on the M and A side in call it two, three years. Like it seems like right now they're, they're asleep at the wheel. And to be honest, I don't think a lot of talent would be like, oh, I want to be the talented team to go join the non talented team. And then, you know, it's not that fun, you know, to be like the best team at a company. Right. And you know, in many ways, yeah.

You want to be all A players.

In some ways that's what the money is for.

Right?

Like if you pay enough. Right, that's what the money is for. But yeah, I'm with you.

Well, yeah, and so that's what I'm kind of getting at. Do you expect you guys come in three years from now and say, this is a, you know, we believe this is a fair price. And then, you know, some other prime comes over the top and it's like we're going to pay double just because we're, we're getting killed over here. And that happens.

I don't ever pay double.

I don't think they'll ever do that. I often amend deals and like, there.

Are other people in this ecosystem that are smart, like other.

More traditional, but not super traditional, but other. Other acquirers.

And the problem is that, like, they are just. You have to do like a hundred.

Things right to buy a company like this and, and to. And to win. Right. And if you do some of those things wrong and like a traditional incumbent is just, just.

Is just.

They have so many impediments in their.

Way of keeping them from doing this. It's not just like finding a good company. It's not just showing up and saying, like, we want to pay a lot for you.

There's so many other things that you.

Have to do right. In terms of taking care of the team, committing to investing in additional products in the future.

And so, like, I think it's actually.

Pretty hard for them to do. And I used to work in a more traditional acquisition environment like M and A environment.

I know what this is like.

It's really hard for them to.

Yeah.

Well, this is awesome. I know you have to get out of here. It's 11:29. We will talk to you soon. I'd love to have you back. We could go way deeper. I'm sure there's tons of people that would learn a lot from what you have to say. So thank you so much for joining.

Thanks, guys.

We'll talk. Bye. In the meantime, let me tell you about Vanta Automate Compliance. Manage risk, Improve trust Continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation.

Whether you don't get air horns and.

Yeah, no, not in your average Vanta read. There's. You've probably heard them on other podcasts, but only our Vanta Reads have the air horn. Whether you pursue your first framework or managing a complex program, go to vanta.com Anyway, we got Delian coming in to the studio. Delta V with Delian. He's not here yet, so let's do an ad for one of his companies in his portfolio. 8 Sleep. What's new in Pod 4 Ultra? Pod 4 Ultra has all the signature features you love about the Pod, plus new groundbreaking upgrades. How'd you sleep last night, Jordy?

I put up an 89. Only 6 hours, 50 minutes.

Did I beat you? Did I beat you? The app. The new app is so good.

That would be 3.

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So your new milestone, John, is how.

Did I get three nights?

Two nights.

We thought we were going to have a real battle back and forth and Jordy just ran away with it and in the first quarter.

I take it seriously.

Anyway.

Take it seriously.

Oh, and we're having. We're having Mateo from eight Sleep.

Oh, fantastic. Next sleep day, we're gonna get a bunch of sleep people joining us. We should have the whoop CEO back as well. Yeah, talk about that sleep tracking. Anyway, until Delian gets here. He's almost here. I'll tell you about Ad Quick out of Home Advertising Made Easy and Measurable. Say goodbye to the headaches of out of Home advertising Only Ad Quick combines technology, out of Home expertise and data to enable efficient, seamless ad buying across the globe. And I'm excited to bring Delian into the studio. We have a yellow light, which I think means, like, he's kind of here. I don't actually know what that means. He's green. He's here. Welcome. Welcome to the stream. Delian, how are you doing?

Yo, what's up? You guys are getting real commercial. I like it.

Oh, yeah, yeah, yeah. The ads never stop. The ads never stop. Thank you to the sponsors. You see the ticker down there? The best companies, we do ad reads constantly. We just didn't need sleep read.

I know.

So you're welcome.

You could have, by the way, like, you know, come up on stage when I was, you know, interviewing senators last week at Hill Valley Forum. You should have said, senator, we sell ads.

Yeah.

You remember, we ran it. We ran out. We did a talk at Hereticon.

Oh, yeah.

Ran a ramp ad.

Ran a ramp ad during the talk.

Yeah.

Wow.

Yeah, I think they paid us a couple hundred bucks, which was the highest CPM ever paid for any ad ever, I think, because there were like 50 people in the room. But, you know, it's like a $2,000, $10,000 CPM, but it's a lot of fun. Anyway, let's talk about modernization. Army modernization. What are you reading into? What's being put out from the army, from the DoD, from the government. And are there any companies that are taking advantage of this? It seems like they're very much welcoming Silicon Valley. I mean, they're on the stream two days after we tweeted. It's crazy, but what's your take?

Yeah, I mean, huge cultural shift. If you look at the sort of various branches and how they're known for sort of adopting next generation technologies at like, the tippiest. Tippiest of the spear is basically like the Space Force sort of subpart of the Air Force, then next year. Traditionally sort of thought of as the Air Force Then Navy and then typically army is more of a thought of, I guess as like a sort of laggard in terms of really sort of pushing the fold on tech. And so clearly they're starting to shift that culture from within. And I do think it's a very bullish signal that SEC army goes from, you know, you know, seeing that, you know, you guys, you know, are relevant to the tech ecosystem and the Kathryn Boyle thing. And obviously the comms team there being like, sir, like you have to, you need to go get on this and like to do that in 48 hours is like very non trivial.

Like, I don't even know how they got my email. Like I tweeted US army, come on TVPN and they just emailed me five minutes later. It was crazy.

No way.

Yeah, it was wild.

They emailed me directly. It was amazing.

Yeah, I mean, look, I think there's, you know, sort of a lot of, you know, sort of changes in chaos from the new admin. I've been seeing this at a very tactical level with portfolio companies where it's like they're going from. We talked about this plenty of times, but continuing resolution, reduced budgets to, okay, there's now this reconciliation bill that's coming in, but then Congress has to go vote on and there's already talk of like, well, maybe they're not going to be super pleased with that reconciliation package in Congress and pass it all. And they're maybe already talking about a fiscal year 26 continuing resolution, so to extend the current budgetary environment. And so you're seeing that sort of volatility show up within individual program offices where there is a little bit of retreat to safety of the preexisting programs, pre existing contractors, et cetera. And so to have US army talking about, hey, even in this budgetary environment, even with all this volatility that we're sort of leaning in on, net new players and net new technologies, I think is a real sort of bull signal for the cultural shift that's happening within the Army. You're seeing that sort of some amount within other branches, but there's sometimes pushback too. I'll give an example that I thought was really interesting yesterday. I'm forgetting the exact official. I think he was like a major general, I want to say, within the sort of space force. I'd have to look up the headline. But he basically sort of went on stage at a space conference, not space symposium, but another one. Anyways, it was like two days ago and basically was like, look, I have a lot of people that keep pitching me on like orbital refueling. We've even funded some orbital refueling companies. I don't think that this gives, gives us any significant advantage anytime soon. The time where this will be relevant to the warfighter is when there's probably a significantly larger number of sort of Space Force satellites up in orbit to justify this. But that's not going to be anytime soon and is probably a decade away. And so it's kind of interesting to see these in some ways counter to what you'd expect. Do you think Space Force bleeding edge, adopting the new technologies and you have a major general saying, we don't think refueling technologies are particular sort of relevant and so indicating, hey, maybe the tech ecosystem is pushing too hard on next generation capabilities before it's relevant. And then you have the army, which is thought of as being a little Saudi or being like, we want next generation capabilities. People aren't pitching us enough on sort of this type of stuff. So yeah, those are two. I feel like sort of people are reversing seats.

Yeah. I mean, at the same time I feel like the story with the army was interesting because it wasn't just like ivas, which is obviously this like debacle that took 30 years, never really got anywhere. Now it's in the hand of Andrew. You could, you can imagine that when Andrew shows up and is like, hey, we're ready for you to buy this. It's going to be pretty good because it's in Palmer Lucky's DNA. And I think he's just like, you know, the ego of messing that up would not allow. He would never ship something that doesn't work.

Right.

But, but then we also heard that he was like, oh yeah, one of the tech companies we visited was just Microsoft because of course we need databases, we need email, we need Excel sheets, probably all these things. And I'm wondering if there will be a next, like a next generation OpenAI was one that, that, that he called out as, hey, we get all this data, we can drop LLMs on top of it. And I wonder if there will be kind of a second wave of defense tech where enterprise SaaS companies, as much as we like to joke about, like let's put the government on ramp, like it really might happen and there's all, there's gonna be all the.

Yeah, that was something I wanted.

Salesforce for recruiting.

Yeah, that was something I wanted to ask, but we didn't get a chance because we only, we only had it like 10 minutes or so with each. But is there, is there not Enough founders in defense tech doing non kinetic, non sci fi. Sort of boring, you know, just like effectively, you know the modern CRM for xyz. Who was the founder we had on that was doing supply chain logistics management.

Rune.

Rune.

Rune, yeah, yeah. So Delian, what are you seeing in terms of non defense tech startups start exploring working with the government in one way or another. I imagine that it's very, it's easy to like slap that on as like oh yeah, we're cool, we have an American flag on the wall. At the same time there is a real need and it does seem like there's been some neglect here.

I'm going to do the classic media thing where you ask me a question and I'm going to answer what I want to answer.

Please just do whatever.

All blend together. Ramp ad cool. Today Stripe and Ramp announced that they're going to be partnering together to issue stablecoin backed in Latin America. Yeah, now it's interesting to think about. Okay, so why Latam? Why aren't they launching this necessarily? US, Europe, etc. You can make the arguments on like hey we have more currency stability here so it's not as relevant there. The value proposition is a lot stronger. But I think it's always interesting to study. If you look at you know, let's say next generation sort of payment systems, how much is done be like mobile QR codes, tap to pay etc. You actually see that some of the more modern infrastructure is actually in more of the laggard countries because they don't have this sort of preexisting, let's say ACH wire systems etc. That have been built up over the course of a century so it makes it harder to fully adopt and switch over. Whereas like in Africa if you look at like mobile payments, you know, QR codes, etc. The like speed of transaction, it's actually like faster and better and lower fee there. But it is because there was no sort of preexisting, you know, sort of infrastructure or innovation there. They sort of leapfrogged us. You know you can kind of make those greenfield, you know, sort of China too is like it was more of a greenfield like super apps like WeChat. It's because like they didn't have all of these individual apps that existed before. And so one can come onto the scene with a super app. And so to tie this, you know, sort of into DoD, it's interesting to think about perhaps the places that are going to in general gov, let's say not DoD alone, perhaps the places that are going to be able to sort of leap frog are going to be some of the places that have been the least innovative over the past 20 or 30 years because they don't have any pre existing infrastructure concepts for how do we adopt next generation technologies. Right. Within the Air Force there is the like Air Force Research Laboratory, AF Works, which is meant to basically, you know, sort of be one of the early funding mechanisms for these next generation technologies. In the army you kind of have like Army Futures Command, but it's much less built out of an infrastructure of like how do we adopt next generation user technologies? There isn't like a preexisting pattern and so maybe it can be a bit of a leapfrog in a, you know, sort of greenfield and then the equivalent on the like OMB, smart card, etc. Side of things. Like no, I don't think there's been like an RFI for you know, next generation payment systems for like the Fed and like the corporate card system in the United states in like 30 years. And so in some ways they don't have any like pre existing buy season. They can be like yeah, we're just gonna like completely radically rethink the entire way that we do it and adopt this stuff from scratch. On the VC side, am I seeing tons of people working on this? I don't think so. It still feels like it's a little bit of an underexplored trend. I think the biggest thing is more like some of these incumbent companies realizing that there is a real sort of gov opportunity. So I don't think that you're going to see next gen corporate card companies start that are focused on the gov. I think where your is ramping like oh, I didn't even think about the idea totally the government could be an adopter of my technology.

Because the whole point of commercial off the shelf is that it's commercial off the shelf. Like if you build it just for the government. Yeah, you have one buyer and that's a problem. But also it's not going to be as good of a solution as if like yeah. Also every Fortune 500 company uses it and you're under immense pressure to deliver the best possible product anyway.

Totally. Like yeah, you know the reason that ramp is most relevant for them is because it also has all these commercial customers where you can adopt the like best in class basically like you know, sort of patterns and like, you know, I think they talked about, you know, I forget if we talked about this when I went on TVPN during hvf I think it was before this panel but just like you know, Senator Ernst and you know, you know Eric panel was phenomenal. Just from the perspective of Eric talking about the like cost savings and efficiencies they were able to improve with an Andrew, it's like apb, you know, it just was on the show. Brian, Chip, etc. All super, super brilliant people. These are like the best technologists that have tackled this field and even for them Ramp was able to sort of create significant efficiencies. Imagine what that happens when you get it adopted into the government.

Yeah, well speaking of Adam Porter Price, he just came on the show, he was breaking down their acquisition of class gave us some interesting anecdotes about how the M and A markets work. In defense tech he's not buying a lot of companies that are for sale. He's also not buying a lot of venture backed companies. What do you think? What are you reading into Anduril's M and A strategy as far as a venture capitalist perspective?

Yeah, I mean look, I think you know ABB is a very intelligent acquirer. Right when you know I was listening into the last year sort of five, 10 minutes of his talk and it's like look, he goes out and buys things where like there's a clear ability to like go 5, 10x their revenues. There's a 1 plus 1 equals 3 in that like they can build products together within Androll that the two companies weren't able to apart. And it's somebody that he's like known for years, not something that like when there's a fire sale because the VCs are starting to run out of money like you know, then he finally starts to take them seriously. And so yeah I do think there's a subset of investors that are investing into these defense tech outcomes that think that there is a potential you know, sort of acquisition M and A option at the end of it. And I don't think there is the equivalent of like you know there's definitely these like massive mergers that happen, you know, within you know, sort of the primes. But you don't see the equivalent of the like I don't know like Adobe Figma offer the Google, you know, sort of wix, you know like there's not the equivalent of.

What's that? Yeah, all of these.

Yeah, yeah.

No like looking at it there was, there was like roughly 3 billion of defense tech funding in 2024. Like there has to be a bunch of other exit paths. It's not Like Anduril is going to be like, oh yeah, you know, we know your fund's coming to a close in 10 years. We're going to, we're going to acquire $9 billion worth of venture companies that are at the. Just say we want you guys to get a nice 3X. Yeah, yeah.

And I mean the other thing is that like, I think that it's easy to look at a headline number on some sort of acquisition that happened and think like, oh well, like they were acquired for 3x revenue. So you know, we could probably. That's probably our base case. But when he actually dug into it, he was like, oh, there was this deal, but it was because like Boeing Ventures had invested in this company and then Boeing bought it. And so there was like total like cyclicality of the deal and like, like all these special things going on. And it wasn't necessarily just like an open fair price. All financial investors really setting a price in the market. And so there seems to be a lot of distortions in the M and A markets.

Yeah, I mean, I'll give an example that was just announced today in the like aerospace field that sort of matches the negative pattern that APB was suggesting. So it's this company. It was a Capelle space, it was one of the leaders in the synthetic aperture radar satellite. Think of this as basically like a different spectrum than like Planet Labs that you know, largely focuses on like visual spectrum. This is more like radar based. You can see through clouds. Yeah, they raised like, you know, $320 million total. So right in that ballpark where APB was saying, once you've raised hundreds of millions, it's really hard to, you know, sort of, you know, go to an M and A outcome. The company was around for like 12, you know, sort of 13 years. In 20, 22 or 23 suffered a handful of setbacks. Both like they had propulsion issues that made some of their satellites end up deorbiting a little more quickly. They unfortunately went on a rocket lab rocket that ended up having a launch failure. And so that basically satellite went down, founding CEO ends up having to resign and company just sold for what looks like, you know, sort of 320 million. Even though the basically sort of preferred stack was 315. And it sold to this like, I forget the name of it, but it's like Quantum Fund or Quant. It was like some quantum related hedge fund that is going to start using their data for sort of hedge fund trading and then try and develop some solutions on it. And so it's like, like interesting look that it basically turns into effectively like a sort of 1x outcome for all the investors if you're selling for your sort of prep stack. And that's sort of like truly the best, best case outcome that you can sort of get when you're called seven years in, probably I assume flatlining in revenue, still significant sort of burn. There aren't any obvious like large DoD programs that they were sort of scaling into. And then you have this counterexample that one of their competitors in the Los Angeles area, umbra era that has raised less, but I think has taken this much more. I don't know deeply the company's numbers, et cetera, but my just sense is they've just been way more capital efficient and they're taking a longer time to build up, but they're doing it in the way that gives them an outcome on the other side. Where I do think if need be they could get acquired and if not, I think they can probably run it for a pretty long period of time just on revenues and cash flows. And so I look at the defense tech ecosystem, I'm like, man, people are raising large amounts of money and they think like, oh, if I take the Silicon Valley approach of like burn fast, grow fast, et cetera, there will be like a whiz like outcome on the other side potentially. And it's like no, like the M and A space here is like way, way, way, way, way more constrained. Because unlike Google or let's say Facebook acquiring Instagram back in the day, there's much less of this competitive threat by next generation players that grow really, really fast. There's just not that equivalent dynamic where you're going to get, you know, sort of bought out even with like relatively limited progress. You're only going to get bought by like these very, very, you know, rational buyers. Not to say that like Facebook's, Facebook's, you know, sort of acquisition of Instagram was irrational in the long term, but in that moment it looked very irrational.

Right.

Like it was a deeply, deeply irrational purchase according to like traditional purchasing, you know, frameworks. I don't think like APB said there's going to be that in like the defense sort of tech ecosystem. They're only going to be very rational purchasers.

Yeah. Staying on, I don't know, cameras in space. I was talking to Kevin Wheel from OpenAI, formerly Planet Labs about observation in V. Leo and he was saying one of the challenges is that orbital refueling and maybe the fact that it's farther away than we think. What is your take. I mean, obviously you're one of the new leo, you know, beneficiaries. What's your take on timelines for doing interesting stuff in very low Earth orbit?

It.

Yeah, I do think there's a, you know, sort of real challenge of, you know, if your business case is predicated on a certain mission timeline of like how long you're up there to take photos and generate, you know, sort of revenue. You know, there's definitely some interesting folks. You know, Albedo Space is trying to build these very like dense and somewhat aerodynamic, you know, sort of satellites where they're trying to, you know, sort of close this gap between like, hey, if we're lower, we like have slightly better, you know, sort of imaging quality and if we make this thing somewhat aerodynamic, then we don't have as bad of like a sort of deorbit timeline. It just feels like it's so many technical risks and hurdles where you're trying to like, you know, you know, the way that I feel like Trey sometimes talks about it is like companies typically should only really rely on like one miracle. These like multi miracle companies are somewhat difficult. Now I'm saying that like also, you know, maybe Varda is also a multi miracle company, non trivial, but maybe you're allowed to take a sort of multi miracle stab if you're also.

We have an American Pope now.

Yeah, exactly, exactly. He's going to bless all of us.

What's your thesis around Fury? Super exciting. You can imagine they scale it up to be bigger, carry bigger payloads, faster, more competitive with something like an F35 or an F47. But, but does Anduril advance so quickly from an autonomy standpoint that they never have to do a sort of human rated human enabled platform? Is that just from your personal standpoint, does that feel like a possibility?

They just make them for Tom Cruise and the next Top Gun. That's it. They make exactly one plane. It has the IMAX cameras already baked into.

Feels like there's just a such a strong religion within sort of the Air Force around human pilots. And yes, CCA was a sort of significant step towards getting them comfortable with autonomous wingman. But fully, fully sort of decoupling for some of these larger, more capable, more expensive platforms from having a human operator that again, I think what happens is the ratio of autonomous jets to human jets just significantly sort of increases, I guess over time. Where it's, you know, right now they talk about is like 3 to 4 to 1. And then over time I think that gets to like 100 to 1. But I think they're still going to want this human orchestrator that literally just probably has like a literal ball of furies that are like, you know, operating around the like, you know, certified, you know, jet pilot. But I would probably bet on you know, sort of five to one odds that it's more likely than not, you know, and again hard to sort of gauge whether or not they win it. You know, I think, you know, Trey and others have talked about, you know, how recently some of the feedback that they get from the department is that they're winning too much. And so maybe they're not able to win because they're such big winners. But I put like 5 to 1 odds that they definitely sort of bid or architect some human rated sort of fighter jet system in the next call it five years.

It's a personal perspective.

This is not internal information of course or speaking on behalf of founders.

Well, while we're on FF portfolio companies in the news today, Fiji C going to join OpenAI from Instacart CEO of Applications. Now they have two CEOs and running different divisions. Do you have a take about that? Not co CEOs. Are you worried that will brewery is going to be poached at some point since Sam just seems to steal the CEOs from all over the market.

Head of space, head of space.

Planet now CPO there.

Yeah, exactly. I mean underrated, right? That like the old OpenAI team was incredible and they all kind of scattered to the wind and started 25 different foundation model companies. But now he's putting together the Avengers again. It's great.

You know, not to be rude to the prior v1 Avengers, but I think the v2 Avengers are a little more sane, commercially focused and a little more stable. You know I think the V1 was probably right for like the research lab days be a little crazy now that you know it's a commercial company. Probably a little different. I don't, I mean, you know there's so much news that I feel like has come out of OpenAI over the past week that I do, I do think fundamentally changes how you should like underwrite the company over the next sort of five years where you know, it seems like you know, they're sort of abandoning the full for profit conversion. It seems like Microsoft is not necessarily fully willing to give up their like rev share and percent of you know, you know the revenue they get at these like larger scales that they originally promised. And so. So that negotiation is clearly not done. And then in Sama's announcement You know, sort of tweet. He was like, by the way, I am staying on as CEO of OpenAI even though this person is CEO of applications. It's like, well, nobody was asking that question. But like given that you're clarifying, maybe we should be asking that, you know.

Well, it made me think. Is it. I mean we had 03 explain ChatGPT's entity structure the other day. Yeah. Opening eyes and it could not. It was like explain it like it was extremely botched. You came away even more confused. So we don't, we don't have, we haven't passed that to real AGI is.

When it's explained the structure of being.

Able to explain your own corporate structure. Yeah but, but I just read into that as like maybe Sam is CEO of one entity in the stack and then you know, OpenAI Global LLC is. Has another, you know.

Yeah.

Because they're not like CO CEOs.

Sure.

No point did it say that.

So yeah, I mean you've been, you've been a little bit negative on, on wrappers on companies building on top of. On a foundation models and yet another FF portfolio company windsurf acquired by OpenAI $3 billion outcome. It seems like Wind Surf is a.

Portfolio company by the way.

Maybe we looked at publicly reported.

It's publicly reported. I don't know how that would be the case. We missed that when we saw that.

I found it on three different.

Maybe it's fake news, who knows. But the big thing is, is it game on for application layer companies? Now, given that you can go and raise a very traditional venture path and the narrative of like, oh, you're just going to get steamrolled might not be there because $3 billion is $3 billion, it's a pretty good outcome. Right?

I mean, look, this is the perfect example of the delta between defense tech companies and AI tech sort of companies. One there is the hey, I am the big company with lots of cash. I feel slightly threatened. The exponential growth of these things can sometimes be inescapable. And so I need to buy this and have a player in the race. And then on the defense side of things, there is no such thing as uncontrolled exponential sort of growth. In some ways the government explicitly meters your progress where they want you to see you accomplish XYZ thing on a smaller program is a lily pad to the larger program, larger program, et cetera. So it's like yes, anduril has done super well, but if you compare them to the exponential revenue growths of the OpenAI's the ramps, et cetera of the world. I don't think it's that it still is super linear but there is some natural cap on true growth rate. And so I do think it then makes it more rational for investors to be piling into some of these AI application companies. Look, I still probably not a bull on things like Harvey as an example, not to overly pick on them but when I think about like a, you know, again not to pick overly on another company but if I were to think about like the irrationality of some of the like, you know, Harvey, you know, prices versus the Saronic prices, at least Harvey you can rationalize. Hey, there are these like multibillion dollar acquisition outcomes that are almost certainly going to happen quite regularly. I don't know like who buys Saronic, right? Like I don't think that like you know, electric boat, you know, the General Atomic subsidiary, etc. Is buying for their shipyards for $3 billion.

Like yeah, yeah, yeah, yeah. It's total that the windsurf thing causes this cascade of like every hyperscaler needs an IDE company and it's just like boom, boom, boom. And they all have $10 billion to spend. So you know, oh is $10 billion, maybe 2 billion happens but like multibillion dollar outcomes, we could see a whole bunch of those. Same thing with you know, image generation. Same thing with you know, different agent models. Like there's, there's a way that like a lot of these could be baked into things.

Anyway, I think the other question I'd be interested to get your point of view on. So we were at Config yesterday. Figma came out with makes sites buzz like a bunch of like very, you know, things that could be by themselves their own kind of businesses. Right. And I saw some commentary online that was basically saying that like every app is just like basically converging on the same feature set right now. It feels like in some ways where it's just like make anything, you know. And so like what ha. In your point of view, obviously you very clearly took a. You shifted away from looking at a lot of software, pure software opportunities. But how do you think VCs will change in kind of underwriting some of these opportunities where for some businesses that have been started in the last year, they're moving towards a place where everyone is weirdly competing over the same kind of like core use case at the end and the day. Make an app, make XYZ thing.

Yeah. I'll use a example from more backend sort of cloud infrastructure that was related to AI. There was all this hype in 21 and 22 around and I may butcher this because again, not my field, but I believe the term was basically these vector databases that were a way of basically storing a lot of the model weights, pre training data that you were working with and you know, you're fine tuned basically models on top of the base foundation models. There was a whole set of investors that plowed like hundreds of millions of dollars into these companies. They had crazy revenue growth. And then like within 12 months, AWS made it a feature. Google Cloud made it a feature, Azure made it a feature. And the basically dropped off to zero because it was like, yeah, this is just a natural cloud feature. Thanks so much for pointing it out. Thank you VCs for like funding hundreds of millions of dollars to like, you know, make, you know, our customers very aware that this was necessary. But it turns out like people just like having things in a single platform that they already have a relationship with. And so, yeah, I think like, you know, if I were, you know, sort of, you know, Dylan, the CEO of Figma, I would just be like studying what all these VCs are funding and then being like, great, I don't even need to buy this. This is so easy for my internal team to build that I will just go build the best applications. And then it turns out the CFO is like, well, why would we have two design software contracts? You know, we already use figma. It's already rolled out to everybody. Everybody knows how to do it. Let's just kill this AI thing and just like, you know, use the AI up within figma. And so I think that like, you know, I don't know if you guys remember this term Sherlocking. It was, you know, this is for the, you know, sort of viewers on the show that are, you know, below the age of 30. Back in the day there was this app on the Mac App Store called Sherlock that it was very popular. Some VCs funded it. It was getting to like millions of years of revenue. All that it did was if you hit command space, it pulled up a little search bar and allows you to search all your applications, et cetera, on your Mac app. Then one day at wwdc, Apple was like, hey, that's a cool idea. We're just making it like an OS feature. And so it was known as getting Sherlocked when a big tech company just release your entire company as a free feature in the software that they already have all the distribution on.

Yeah, I mean I always, I always looked At a lot of these generate an app companies and you know, looking at their revenue ramps, it's just, it's always, it's always, it's, it should be nerve wracking if your revenue is ramping that quickly. And there are founder mode incumbents that are in the same category because usually means you can build said thing very quickly. But yeah. Anyways, this is fantastic.

Thank you so much. We'll talk to you soon. Delta V Dells that's the end.

Godspeed.

Next up, we've Harley coming in from Shopify. We need a bunch of size gong because it's earnings day. And we're pleased to report that Shopify delivered Q1 2025. Revenue rose 27% year over year, 2.36 billion, edging past the 2.33 billion consensus. They beat the analyst estimates. And we're excited to have Harley here in the studio. Welcome to the show, Harley.

I'm so glad to be here. Can you guys hear me okay?

Yeah.

Oh yeah. You sound great.

Loud and clear.

So run us through it, Give us the breakdown. How are you processing today? How are things going?

Things are going really well. I mean, I think Q1, I mean, remember, obviously Shopify is a bit of a seasonal business, meaning Q4 is always like we're ultimately retail. So Q4 is always a big quarter for us. But Q1 was amazing. Revenue was up 27% with 2.4 billion free. Cash flow margin hit 15%. So about 330, $363 million. And then it was our seventh consecutive quarter of GMV growth above 20%. It was about 70, almost 75 billion. Which GMV is always important because it speaks to how well merchants are doing on the platform. So when Shopify does well, I'm obviously very proud. I'm especially proud now because I think this is just to say the thing. This is a very unpredictable market. And I think Shopify's superpower of agility really comes into play here. I actually mentioned something on the call that didn't really get picked up, but because you guys are interesting people, I'll share with you. We've been public now for almost 10 years to the day. We had our IPO May 21, 2015. And if you look back on the last 39 quarters. So 39 cohorts of merchants that have come on, 38 out of 39 cohorts of merchants on Shopify have outperformed, formed the greater e commerce market. So one of the things I'm, I, I'm, I'm Very, very proud of. Is that merchants on Shopify seem to be doing really, really well. But I'm excited to be on your show. I mean, this is.

Yeah, thank you, thank you.

I canceled mainstream media to do this.

There we go.

We are the mainstream now. We are the corporate funded media.

That has certain connotations. I think this is better than mainstream.

Because we want to be mainstream. Yeah, yeah. No, no, no, we love it. So, yeah, I mean, you talked about the, the tumultuous market. There's a lot of headlines at the same time. Stock market went way down. Stock markets kind of back up. What should people be reading into new business formations? Just broader entrepreneurship trends and the data from Shopify about the health of the American entrepreneur.

Yeah, I mean, look, let me talk about macro a little bit first.

Sure.

We were around in 2008. We were a tiny little company, but. But I spent, you know, almost 30.

Wasn't a snowboard shop originally.

Well, we were a Snowboard shop in 2000, like 4. But okay, yeah, like we started a snowboard shop. And then actually when I was in law school, I don't know if you guys know the story, but I. When I was in law school, I was born in Canada, grew up in South Florida and ended up in college in Montreal at McGill. And then I went to law school in Ottawa and I became one of the first merchants to use Shopify. That's when I met Toby. But 2008 happened. And actually one of the things we saw during the great financial crisis crisis.

Was that a lot of people turn.

To entrepreneurship either as a way to replace their job, their income, or as a way to supplement their income. If they had a reduced, you know, had. Had reduced hours, if they were working at, you know, restaurant or, or a retail shop during the pandemic as well, we sort of saw during the pandemic all these physical retailers that some of them were laggards that had not really, you know, moved online yet began to move online. This amazing clip. So in many ways this is sort of, you know, Shopify kind of does well in these periods of, of, of. But from our merchant perspective, we're not, you know, we're not seeing any changes in our merchants so far. Our data actually through April, so beyond just the quarter, but through April does not suggest any slowdown. It's still obviously fairly early to assess some of these impacts. But, you know, I think from a consumer perspective, one of the things that also happens is in times of disruption, it does feel like consumers and retailers, they kind of lean into Brands that they know and they trust. And you think about your favorite brands. You know, I know for me it's like Vuori and Alo Yoga and James Purse. Like all those brands are all on Shopify. So things have been really good for us and I think that'll continue.

Talk about, I want you to talk about for a second the power of Shop Pay. Just because as a consumer I'm probably a dau at this point.

Nice.

Truly, it's truly life changing. I would love to get your sense of kind of what is making Shopify so dominant today. I mean, we talk to a lot of entrepreneurs and obviously the core platform. But can you talk about how kind of the sort of like flywheel that Shop Pay is kind of creating in the ecosystem?

Yeah, I mean, shopay is really interesting for two reasons. One is historically we've really been a merchant facing product, merchant facing brand. So people kind of knew Shopify if you were a merchant and entrepreneur. But for most people, like we were the brand behind the brand. You didn't really know us. And both the Shop app and more specifically to your point, Shop Pay is really the first time that I think people are seeing the Shopify brand in the wild. And actually for the quarter, Shop Pay facilitated like $22 billion of GMV. That was a 57% year on year. If you look at the entirety cumulative GM, we launched Shopay in 2017 and we've done about $225 billion on Shopee so far. Part of it is that I think companies, I mean, Amazon has done a really good job of this actually. They've sort of reset consumer expectations for how commerce is done. And I think for a lot of consumers, because of that, they want, you know, they want their products either shipped fast or they want it, you know, ship cheap to them or they want to be able to do one click checkout. And so this idea of, you know, we are not obviously a retailer, we're a platform. But if you were to pretend for a moment that Shopify was a single retailer, we would be the second largest online retailer in America after Amazon. We have millions of stores. We're about 12% market share in terms of all E comm in the U.S. i think Amazon somewhere in the, you know, 40s or something, something like that. So one of the things that we're able to do is even though everyone on Shopify is an individual merchant with an independent business and an independent brand, we're able to give them economies of scale as if they were the second largest retailer in America. And one of those obviously is Shopay. But Shopay has done incredibly well. And not just that, but we're also seeing that brands are now coming to Shopify specifically for shop pay. So we have something called Shop pay commerce components, which allows merchants just to use shop pay. And the way we kind of think about it is that if you're a big, you know, coach is actually a good example of this. Kate Spade as well. If you're these brands that have, you know, your own platform, maybe you're using a legacy platform or you have your own, your own in home, in, you know, homegrown system, you can actually use that component. And we sort of look at that as our way of starting a relationship with these very, very large brands. But Shopee has been incredible in terms of the flywheel question, if you think historically about how Shopify started 20 years ago, really the focus for us was just e commerce for SMBs. And then some of those SMBs got really, really big gymshark, Bigori got big fashion, Nova got big Bombas, Allbirds. These stores that started their mom's kitchen table became billion dollar companies. And so one of the first changes was we sort of moved from just focusing only on SMBs to focusing on larger merchants as well. And especially those that sort of grew up on us and that allowed established brands, Hunter Douglas, Mattel on running that had their own systems to come and migrate entirely to Shopify. But the second thing that also happened was we began to think about like, what is the future of retail? Where is this thing going? And it became really obvious that, that the future retail was not just going to be this like false dichotomy of online versus offline. It's going to be retail everywhere. And that if you were going to be the entrepreneurship company, the retail operating system for the most important brands, you have to make it easy to sell on every surface area. And so we began to introduce things like point of sale and B2B and you know, embedding our checkout into places like Instagram and you know, X and you know, every social media platform, obviously YouTube is another one. We have a, we have an integration to Roblox now. So if you have a toy company on Shopify or a company where your consumer spending time in Roblox now you can actually transact directly in Roblox powered by Shopify. So the way that we kind of think about it is more of like a. Oh, each of these different, you know, channels where commerce happens. AI shopping on, you know, AI shopping will likely be one of the, you know.

Yeah, so that's an area that I, that's an area I wanted to get to. Next is basically LLMs. I think you guys have made some early meaningful moves here. How excited did you get about the intersection of shopping and LLMs as you started using some of these products? Just as a consumer, I think a lot of people just early on start using it maybe as an alternative to a Google search. And it was more for information. It wasn't purchase driven. And then we even had an employee from, from, from OpenAI on the show and he was like, oh, every time I want to buy a product now I just get a deep research, even if it's for something like bathroom towels or something like that. Because he's like, why wouldn't I want, you know, the equivalent of three hours of research on the right product to buy?

Yeah, it, it feels a little bit like where social commerce sort of started. Where it starts with discovery, doing research, finding new brands, you get served some like, I don't know. I think actually one of my favorite stores on Shopify is Ember.

You guys.

Oh yeah, I actually know the founder.

Great company.

Yeah, great company.

He's on Shopify. Please tell the founder that I'm incredibly. I use it every single day here in Montreal. My office. But you know, we start with Discover. I think I was, I think I saw an ad or I saw some sort of reel for Ember a couple years ago. I was like, my coffee or my tea can stay warm longer. That sounds really good. But I didn't necessarily go to complete the purchase on Instagram. I then went to, I went to probably Google, typed in Ember, found the website, went on Shopify store and bought it. So I think sort of the trajectory of these new commerce channels starts with discovery and research first and then eventually migrates into full on checkout. So I think this idea that more people are going to discover and shop on these AI tools, whether it's a wrapper or it's something like OpenAI or Perplexity, I think that is an amazing thing. The way that we kind of think about it is anywhere where commerce is taking place, Shopify has the greatest product catalog in the world. Because we have the best stores in the world, we want to power those as well. So I'm not going to front run product roadmap, but you should expect to see Shopify merchants selling wherever their customers are. And if their customers are spending time on places on AI tools and li modeling models, you should expect that will be there as well. But what's really interesting I think about that is that it means that all these, like, what's a good example? Let me use Spotify, for example. Like, weird thing to say out loud, but like Shopify has an integration for Spotify.

Why do we have.

Most merchants don't have Spotify artist profiles. But if you're Beyonce and you who own Sacred, which is a great cosmetic company, on Shopify, you have a huge artist profile. It makes so much sense for you to also have an embedded store inside your artist profile. In the same way that if you're Jim, if you're Mr. Beast and you have a huge Shopify store with feastables, you should also sell directly on your YouTube channel. Like right there, embedded checkout. So that's kind of how we think about the future of retail. That like, where are these surface areas new or old, that transactions should be taking place that they're not. And then what we do is we go to these companies and say, look, let us help. Help power that. Both discovery of great products, but also checkout in some cases even shop pay.

Yep, that makes sense. I want to do a little bit of a deep dive on AI. It's such a big topic. I'd like to break it up and understand how is Shopify thinking about using AI tools internally as a company. And then I'd like to go through some of the different technologies, from diffusion to text generation to agents, on how the merchants can benefit from those. But, but maybe let's start with just culturally, what is the average Shopify employee using in their day to day now? Yeah.

So I don't know if you've seen, you saw Toby's now leaked email.

Oh yeah.

Which at the time having it leaked, I wasn't sure it was. I mean, I think now actually there's probably more benefits downside to it because it does it feel. I feel like it's getting referenced a lot. And I think it also, I don't know, from an employee, brand, employer, brand perspective, it's kind of nice to know that like that's how we think about things.

Totally.

But this idea of like, I think every technology company has AI, you know, they'll say that it's being utilized inside their company. I think there's a big difference between utilization and it being reflexive. And part of the reason why, you know, this email was really important was we want to make this reflexive. We want to push the boundaries of how our team thinks about it. So this idea that even a simple friction point that before you go and ask, hey, I want to add some headcount to my team. Okay, well, like substantiate why AI cannot do that. That small friction point may seem annoying, but actually what it really provides for is a much more reflexive process of like, you're right, I actually don't need this person. I can go do it then. We also built roughly about a dozen MCP servers that make pretty much every corner of Shopify's work legible. So now any. Everyone can now find out about kind of everything else happening in the company. I'll give you the, the best example because I'm in kind of an earnings mode right now. Our earnings day was today. As you guys know why I'm here. I often will go to different teams and different product leaders or technology leaders and say, hey, I, I want to talk more about, you know, I don't know, B2B in Europe. And they'll be like, okay, well here's what's going on. And they'll give me, you know, they'll give me the brief. Whereas I felt for this particular earning cycle relative to previous ones, again, we've had 40 now or 39, so we're 40 coming up. I didn't have to do the nearly as much. I was able to go into the Vault, which is sort of our internal wiki, and I was able to pull far more information on my own, even to the extent that I can see at what stage different projects are at. So I think that is making company operations legible. I think is, I don't know. To me that's like the gold standard. It means that I'm not bothering anyone. I also, if I'm working at 6 o' clock in the morning and I need to get this One thing on B2B, I don't need to wait till someone is on Slack to ask them. I can just figure it on my own. And I think the other piece of it that I think is on the developer side, which maybe is more obvious, but we actually launch MCP server for, we call dev assistance. So effectively it allows developers to use cursor chat, Windsurface, Claude desktop in a very simple way. It's just part of their daily workflow. So that's part of it. The other part of it maybe is less sexy, but it's on the support side. We think about like our support organization, how they deal with these millions of merchants, how they work with our merchants. In many cases, there's two types of conversations. One conversation is really more like more of a low quality conversation. Things like configuration of a domain name, you know, like username and password, picking a theme or how do I pick a theme? Then there's like high quality conversations, which almost looks like more like business coaching. And that's like, hey, I'm noticing that I'm getting traffic from Pinterest. What should I do next? Well, you should actually be the Pinterest channel. Or I'm not getting any sales at all. What should I do? Or this theme, I'm not able to configure it properly. Maybe I have the wrong theme. So one of the other things we're able to do is by giving our support organization a lot more of these tools now, they're able to just simply focus more on these high quality conversations versus low quality conversations. And, and it just means that when you're speaking to, you know, if you're speaking to a human at Shopify, you, you like, we're able to ensure that you're having high quality conversations and you're not taking up time from them because you're, you know, you need a pass password reset.

So what I'm hearing is like barely using AI at all. It seems like you stuff that everywhere. Yeah, it's like we're using three different coding agents. We have agents everywhere.

Well, I, I, I like how deep you guys are going because we've seen other kind of like leaks, which is clearly just a CEO wanting to signal. It's purely, purely pr.

You should map that against, again, this is why it's fun to go on the show. It's something I can't talk. Okay. You should map that against technical founder led companies. Because I bet you, you know, I bet you, you know, dinner, like a dinner somewhere, that if you map that you will see that generally technical founder led companies at scale. So it's not that many of them.

Yeah, yeah, yeah.

You won't hear these sort of, you know, superficial kind of statements. You will see actual building. And you know, I mean, Toby's our CEO and Mikhail from Microsoft is our cto. There's, there's no room for that superficiality at Shopify. It is like, like this is the way to go. And there's a whole topic about this sort of era of founder led companies at scale, which I think is like the best era ever.

The other thing, it just means very different if it's coming from a founder led technical CEO. If they're saying we need to be AI native, that means we're going to leverage AI and actually use it to develop workflows and processes. And all these things. And then the other side is we're going to be AI native means we're going to buy $100 million of AI tool pilots. Six months. It's like very different.

A lot of decks from McKinsey.

You guys were at the Figma collection conference, right.

Yesterday. Right.

So like, I mean I've known Dylan for a while. Like, like, you know, like there's a group of people like Dylan and Toby and Patrick and Zuck, like they're just operating at a different level.

Totally.

Yeah.

And, and the fact that like we're in an era now where these incredible people, these incredible leaders can lead over a long period of time because that wasn't the case. Go back 20 years ago. You didn't see that.

No.

As we need the gray hairs in.

Yeah, that's right. And, and, and, and even the, the fact that they called the gray hairs or adult supervision was almost pejorative.

Yeah, totally, totally.

This is a run companies and there's no better person on the planet to run Shopify than Toby. Just on the AI Just before we get off the AI, one thing I do want to say also on the merchant side.

Yeah.

One thing that I think people miss is like yeah, like all these great tools that all of our companies are building. You know, I saw some of the stuff that Figma rolled out yesterday around you know, like effectively, you know you can fire your agency because Figma can. Ironically there's all these agencies in the room probably thinking like our like unique value proposition is now going to be somewhat disrupted by the stuff that I'm watching on at the keynote. But it's actually small businesses that I think actually will benefit far more from a lot of these. This, this tooling. Yeah. Big business can, can as well. I, this is a bit of an aside but I'm not a sports guy but on, on weekends I have this small podcast called Big Shot. I'm creating an archive of the greatest Jewish entrepreneurs the last 50 years. So people like Izzy Sharp who created the Four Seasons and Linda Resnick who created Fiji Water. I just did Bobby Kotick and Michael Milken. But I interviewed this guy Mickey Drexler a couple weeks ago and Mickey Drexler is about as close as you get to retail royalty. He ran the gap, he was CEO of the Gap for 20 years on the board of Apple, he created Old Navy, he quasi created J Crew. At least made J Crew what it is, which a household brand. But he talked about in the old days of the Gap, sort of the heyday of The Gap in San Francisco, they had hundreds of people doing merchandising, product photography, product descriptions, you know, layouts. And as he's sort of saying this to me, I didn't want to obviously say this to him on the podcast, but I can say it here. I was like, Mickey, like today, like, literally, like the thing you get from Shopify for $39 for free with all Shopify magic can do a better job of your 300 people at the Gap. And I think actually, like, people talk about this term, like, democratization of entrepreneurship.

And leveling the playing field.

It's all just these random, you know, platitudes. But actually what we're talking about here is that very thing that 20 years ago, a team of 300 people were able to produce merchandising results that today, for $39 a month on Shopify, you get for free. Like, you get included in your subscription. And I think when you think about, like, product descriptions and product, that's part of it. But even things like, you know, like we called Shopify Inbox or an email marketing tool, like the idea of automatic, like, automatic responses to every customer you have with highly contextualized replies. You used to have a team that would do that. And if you were a big company, you had a team. If you were a small business, you did not.

Or even downstream. Even downstream of that, though, right before somebody's signing up for Shopify, a lot of them need to get some type of entity to house their business. And before, now, somebody that doesn't have any business expertise can go and even asking a simple question like, should I set up an LLC or a C corp, Right? Which is a classic thing. A lot of people. People botch it. And it is insane for a lot of. If somebody's getting on their entrepreneurial journey and they're going and you should get advice on it, it's not even that complicated of advice, right? A lawyer's just going to regurgitate, well, like, here's the benefits of this and, like, here's the benefits of that. And like, given where you want to take the business, maybe you should use this. And the fact that you can now get that advice, like, contextualized for free from an LLM. And yeah, in many ways, you shouldn't get legal advice from an LLM. It might hallucinate. But for a decision like that, it's certainly better than just guessing. And then the other stuff I'm excited about is specifically, I can imagine a world in the future where an entrepreneur makes a product and the product's like, maybe it's a physical product and it's slow to change, something like that. Maybe you're making it overseas, you're making it here, but it's a slow process. But I can imagine a world in the future where Shopify lets you generate an entirely new kind of brand web world around that product and you might see conversion rate go up by 15% for something like that, for like a one time action. And in that world it's like the incremental benefit of like a change that could happen almost instantly is insane. So I think the implications of shopping in LLMs is exciting. But at the actual business level the impact of Gen AI I just think is really underpriced right now.

I also think one of the things that is missing is a little bit like this. Like we sort of think about our AI tools as very practical, like goal oriented. Meaning like what? Like how they operate their business rather than simply just rolling out random sort of features. Like what actually is this going to do? Is this particular tool going to help them pick a better theme? Well great, but why? Like what does that even matter? Well, a better theme may mean better navigation, maybe higher checkout rates, maybe more customers end up buying. And when you sort of think about that, in contrast to the cost of failure in entrepreneurship now is about as low as it's ever been in the history of the world, truly. I mean you think about like Ben Francis creating Gymshark. I think he's the youngest billionaire ever in UK history. The fact that he was able to create this thing from his college dorm room and turn this into a multi billion dollar company and he himself is now a billionaire. The prerequisite for that type of journey years ago would have been capital. It's not anymore. The other thing is if he failed, he could have like it didn't really matter because he wasn't leveraging his house and taking out loans and stuff. So when you layer on all these new pieces of technology plus this, you know, this idea that the cost of failure is treading so close to zero, what you end up with is more people trying their hand in entrepreneurship. And that's obviously good for Shopify, but it's also just, it's a great, I mean look what you guys have done, right? What you've built, you've built a modern media, you know, giants out of, out of sheer will and hustle and, and incredible insights around what's wrong with traditional media. Having more of these things I think actually makes everything better.

Yeah, 100% how do you think about messaging to the Shopify developer ecosystem? I can imagine LLMs could write new liquid templates. You can generate text, you can generate images, there's agentic workflows. There's so many things that could be the domain of plugins. You want to message that to create a really, really vibrant plugin ecosystem. But also there's certain things that you want to do internally because you have a unique position or advantage there. Is it just about communication? How do you think about that trade off and keeping everyone happy while you're responsible to customers, shareholders and the developer community?

Well look, it's the, I think it's called the Bill Gates line, like a real platform is when you create more value for others than you capture for yourself. And that obviously is the case for us, for our merchants, but also for our developers. And there's currently 16,000 apps in the Shopify app store. In 2024 we paid out a billion dollars with a B in rev share. So a huge part of Shopify success is our developer ecosystem. So that's the first thing. The second thing though is that we, I think communication is part of it, frankly. I think communication is often just a proxy for trust, a lack thereof or the trust battery.

Right.

When you say there's been a lack of communication issue, it's usually a trust issue. We've been really clear with the developer community for the last 15 years or so that okay, here's what you can expect. Shopify's core offering thing we build ourselves will be what for most people need most of the time on the platform, platform. And that, that definition, that philosophy is dynamic, meaning it's going to change. So years ago, 2012 there were apps in the app Store that would take your desktop Shopify store and make it mobile optimized. It was like I don't know how many there were. There's probably five of them, maybe more. At some point it was obvious that okay, this is not like this is something that Shopify's core offering should do because this is what like most merchants most time need and will expect that they're paying us to do. Like how would you like how are you even thinking about building a desktop store or a web based browser store on a desktop that's not mobile optimized. So eventually we basically went to those developers and said hey look, this is something we're going to do. But here's here are sort of the bounds, here are the limits of what we're doing. You can build everything beyond that and you can look at companies, for example, like Klaviyo, we have Shopify email. Klaviyo has built, you know, Andrew AB has built a multi billion dollar company on Shopify which is now publicly traded doing email marketing. Because we are just clear about here's the bounds of what Shopify email will do. Beyond that we're not going to touch. You can continue to roll that across pretty much every product category. So one is to your point, good communication. But the other point is like we have, you know, we have 15 years of reps building with this community to the extent that now if you are building an app or a piece of a product for the commerce and retail space, Shopify's app store and our APIs are probably the best go to market way to get access to millions of businesses. And that trust relationship, that ecosystem of reciprocity is not something that we take. It's actually the first thing I did when I got to Shopify 16 years ago was helped to build that ecosystem. And we cherish it. But we're also very clear of what's coming and what's not.

16 years. We love an overnight success on this show. Thank you so much for joining us.

I have so many more questions for another hour, but we'll have to have you back.

We'll have you back next quarter.

I'd like to come back one day.

I'd come back.

We can bring some Shopify merchants.

Absolutely. Let's do it.

Let's do it. Shopify day.

We'll get gym.

12 hour, 12 hour stream back to back. Let's do it.

You know what?

We can do something black. BFC. We can do BFCM like Black Friday Cyber Monday. We did $11.5 billion in four days. We can actually stream and then bring different merchants on to say fantastic. Tell us what's happening.

Qvc. QVC mode. Let's turn, let's turn TVPN into QVC on.

I'm excited for that.

You guys are for the affiliate model. It always happens.

Yeah. Well, thank you so much talking, Harvey. We'll talk to you soon. Have a good one. We're going to bring in Jack Altman. But first let me tell you about getbezel.com your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. I noticed Harley wasn't wearing a watch. We got to send him to Bezel. Get him a hitter. An absolute.

Send him one.

Yeah, just send him one. To commemorate 16 years in the game.

225 billion on shop.

You should always invest 1% of your AU or 0.1% of your GMV into your watch.

For sure. Exactly.

Let people know it's only right E commerce. Anyway, we. We got Jack Altman coming in the studio.

Welcome to the show.

Welcome to the stream. Jack. How you doing?

What's up, guys? Very happy to be here.

Thanks so much for joining. Yeah, I hope you can hear the soundboard, because I'm with it. Anyway, what's. What's the latest with you? Would you mind introducing yourself a little bit for the stream?

Yeah. I'm Jack. I'm a longtime listener of your show. You guys are doing amazing.

Thank you.

I've been waiting for somebody to do something like this, and you guys are just crushing it.

Fantastic.

Thank you.

Your chiron right now says rival podcaster squashes beef. Because yesterday you tweeted that you can either be collaborative or competitive. And just to be clear, we see this as direct competition. And so you're. This is not a collaboration.

I'm super angry. Every time I.

Exactly, exactly. Every time I see you pop up with another schismatic interview, I'm like that person.

I love how strong you've come out. Specifically where it seems like the average net worth of an alternate guest is like $2 billion, something like that.

Absolute hitters.

No, it's great to have you on.

So, yeah, I mean, obviously the podcast is something that you're working on, but also you're running this fund. Tell me about the fund. How did it come together? What are you excited to invest in? Do you have any. Any bounds on it, or is it just anything that interests you on a day to day?

Yes, I've been doing the fund for like 15 months. I had been doing a lot of investing before I was like a. I was running Lattice, which I started in 2015, up through the beginning of last year. And I did a bunch of angel investing, I did some institutional investing. I sort of fell in love with it, realized it was what I wanted to do, and then started this fund 15 months ago. It's like an early stage, pretty generalist fund. So it's $150 million fund. And when you see in series A, we're like, pretty concentrated and there's no technical bounds on it, but we've mostly been doing like B2B, a little bit of hard tech, just kind of trying to do stuff that we either know or think can be hugely impactful to the future.

Are you worried about your brother poaching your best CEOs? I mean, he hired Fiji Semo. He Hired Kevin Weil from Planet Labs. He seems to be hoovering up entrepreneurial talent.

It's unbelievable. That was an incredible. I mean, Fiji.

Incredible, right?

I mean, it's amazing. Yeah, it's really, really good. So, yeah, probably that'd be a good outcome.

Amazing. Well, what else are you taking away from the current AI market? We've been talking to a lot of folks about this, like, don't build a wrapper meme. Now Windsurf is going into OpenAI and it seems like it might be best time, better time than ever to build in the application layer. Is it too late or what are you seeing that's exciting you on kind of the, the, the AI front? Since most of the. It seems like most of the foundation models have left the harbor, but there's still obviously a ton of opportunity.

Yeah, I mean, first caveat is like, what do I know? But I've always thought that, like, the wrapper thing is like a bit of like a, you know, it's a slightly cheaper mark to me. I think, like, most companies are always built on the shoulders of technology that came before. There's a bunch of stuff to do with the underlying intelligence, just like there was stuff to do with, like, cloud infrastructure. So I don't think of it that way. I think there are prob. Probably cases where you're flying close to the sun in a way where, like, what you do is just going to be obviated by like, the, you know, sort of big labs directly. But I think in a lot of these cases, like the difference between a thin wrapper and then something that becomes like a specialized workflow, I think, you know, there's, There's a real gap there. And so I'm much more in the camp of like thousands of blooming flowers. And the underlying intelligence is going to create a bunch of specialized things that, like, OpenAI is not going to go do everything. And so I think you have to be thoughtful about it as a founder, but I don't. I've never thought the thin wrapper thing is, you know, it, it's. It's a concept that is worth knowing, but it doesn't, like, discredit the whole idea of application software.

Switching gears slightly, how do you think about opportunities to build companies in categories that, that are established but potentially stale? And I want to bring up an example, which is fillout. We recently used fill out, which is a portfolio company of yours. And when I used the product, I was so relieved to be using a form product that was beautiful, easy to use, and I looked back at their founding date, which was in 2022, not very long ago. Right. And I think that most of the time, I think a lot of VCs would sort of look at a category like that. Maybe they get a pitch and they're just thinking like, okay, forms. Like we've had these for, you know, forever now there's Typeform and Google Forms and all the, all these different players. How did you kind of, how do you underwrite opportunities where it's clearly a big market but it feels like, you know, there's no obvious why now other than in my view, typically it's like a super talented team that's just committed to like craft and just building this exceptional product.

Yeah, totally. And so I guess maybe two answers to that. First is, you know, I think you can always bet on Jiro. Like Jiro dreams of sushi style approaches where really great teams are building important products that a lot of people need. Even without a why now? I always believe that you can bet on teams, particularly at the early stages and like that that can work out. But I actually think that there is for this particular example and then I can share a couple others. I think there is potential for there to be a really important why now? Around AI, which is. And they just released this new product called Zeit, which is still in beta. But basically you can take all of this user data and then you can build things around it. And so now they have also like an application builder. And so you can release these forms, you can like get all this data in a seamless way, but then that can become like the baseline for a bunch of internal applications or other things that you'd want to do with that, with that user data. And so to me, I think a lot of times, particularly when you're betting behind great teams, there's a lot of adjacencies that come up over time and great teams figure those out and like find the next thing. But to me, you know, it looked, you know, it's a big enough market that for me, betting on a great team always is, is a, is a good thing to do.

Has anyone else coined the Jiro method? Because like Super Superhuman is like another example of like Jiro in many ways where it's like email. Everybody was like, this is a finished market. Everybody has an email product. Most of them are free. And then you just come in with sort of like craft and there's, there's an entire list of, you know, really successful companies.

I mean, speaking, just speaking of like talented teams, where are you Seeing new pockets of kind of young talent emerge. There used to be, like the Stanford industrial complex. Now it feels like you go to Stanford, you just walk onto Sandhill Road, you get a term sheet. Then there was like the Waterloo. We've talked to Sequoia Partners who are pulling people from Telpio now in Israel. Where are you seeing interesting groups of entrepreneurial talent emerge these days?

There's a lot of good pockets. And also now as a bunch of these companies start to. I mean, there's obvious ones like you could talk about like an open AI or something like that, or of course, Stripe previously. Yeah, Stripe, of course. I mean, I think Palantir has some incredible talent. I think outside of AI, one of the most interesting to me areas is like, hard tech defense. There's a lot more appetite for people to fund harder problems. Like I had Sean McGuire on, you know, our podcast, and he's talking a ton about, like, why that matters so much. And I think people who have seen those kinds of companies, someone who's been at, at a Palantir or an Anduril or a SpaceX, I think those are really interesting pockets for that. So I think there's a lot of these companies now that have gotten to such scale so quickly that you have people who have seen what greatness looks like from the inside. And I think, I always think there's more ways to fail than there are to really succeed. And so people who have seen a big success, I think those create obvious pockets. So there's a bunch, yeah.

Have you felt any of the squeeze from the mega funds and the crossover funds kind of pushing downwards? We talked about to Sam Lesson at SLOW about this, where you get the hedge funds crossover into growth and then the growth funds cross over to venture. The venture guys are like, yeah, I can do a seed check, it doesn't really matter. And then the seed guys are doing the angel stuff and they, and at each stage, they take the previous round, like, less seriously because it's like free money for them and. But it puts pressure on the people where. That's my business. What's your experience been?

So here's my perspective. In 2021, in ZIRP, the, the, the big funds at the latest stages, which I was a customer of, were the crossovers. And it was dominated at that point by all these crossover funds coming into venture with humongous amounts of money. But they were like, always going to leave, you know, like that group was always going to come and go. That's just. They weren't designed for it. Now you have really smart money doing really big funds. There are like brilliant managers. There's like, like Josh at Thrive. There's obviously Founders Fund is exceptional. Like there's just like really good groups out there with large funds and this group is not going to go away. And they do have different incentives at the early stage. And they're, you know, extremely clever about how they're positioning themselves. And you know, they're, they're, they're making very intelligent moves. And that does include in many cases, coming down to seed. And like you said, they don't need to make the same economic decisions at a seed as a $50 million seed fund because they don't have to make most of their money from the see seeds. So the rules of the game do change and I think it has a huge impact.

Well, your reaction to that, I imagine is take much more concentrated positions and use that as a lever. I imagine with the entrepreneur to be like, I'm going to put a meaningful amount of my fund into you and I'm going to, you know, this is not like doesn't in a $150 million fund, if you're participating in any seed or a today, it's not a flyer for you with the kind of concentration that you have. How much has that resonated with entrepreneurs on their side knowing that, yeah, Jack's not just kind of tossing a check in and maybe he'll respond to every third investor update. You're like going to do everything in your power to help the company win.

The way I think about this is in order to do well in any competitive environment, you basically just have to have an incredible amount of, of self awareness and know what you are, what you're not, what things you can provide, what things you can't provide. There are a lot of shapes where I couldn't look somebody in the eye and say it makes more sense to do a deal that makes sense for me than a deal that's going to make sense for another firm. And by the way, there's like, you think about the things that a VC can provide to a founder. Not all of them require blood, sweat and tears. Having a great brand and then not doing anything else might be a lot more valuable to a founder than having no brand and doing a lot. It just like depends on the situation. And so I think, I don't think that there is like a tweet length answer to sort of figuring out where you can play in what situations you look at. You have to look at each of these differently and Then you have to find the situations where what you can offer and what you think can be meaningful to you as a fund manager matches what's going to be valuable to the founder. And like good deals happen when it's an actual correct transaction for both sides. So that's how I think about it. Which is a bit of like a it depends kind of answer, but I think it's the truth.

Can you talk about your personal AI stack? What are you daily driving? What has been helpful in your job either with the show or with the fund? You know, deep research. There's all these different tools and I think everyone's always interested to know like how people are getting the most out of the tools that are available. I feel like everyone feels like, like, like I'm not doing enough with AI. Like I know it's powerful, but I just need to know that one secret prompt or something. But yeah, no, I mean I think.

I could use it more. But I mean I've moved most of my searching to ChatGPT. Yeah and I like instead of texting like my group of friends sometimes I'll just like say the same question to like ChatGPT. And so I kind of am like this is like an always on friend that I can like ask stuff to and I like, my usage just kind of goes up over time. Now I think I don't consume like that many software products for it. So that's also, you know, the nature of what I'm doing. I think like the companies that I'm investing in are consuming a lot of AI, but I think it depends on the area. Like I will say that outside of maybe we can, you know, talk about companies specifically but like outside of prompting there are certain specific domains where it's proven to be incredibly valuable and there's somewhere it's not there yet. And so like I don't think it's working in every category yet.

Yeah, totally.

You invested in Rogo, which these recently announced a pretty big up round. Have you, have, have you seen any products like that? And applied more specifically to venture, I mean I'm sure you could potentially leverage what they're doing. But venture is such a small, you know, market in comparison to potentially kind of Rogo's core market. Maybe it's not.

And for reference, Rogo is analyst secure.

AI for finance professionals. So investment banking at a hedge fund or Tiger Global.

Yeah, this to me is a, I think there is a market but it's easy to forget in San Francisco what little fish we are compared to New York. And like real finance and hedge funds and private equity and the big banks and the numbers are like super different.

Different.

For all of the talk, which I think is accurate talk about how there's too many dollars in venture, it's like still kind of pales in comparison. So the total spend and you look at things like a Bloomberg or something like there's not an equivalently big business to Bloomberg for venture. And I don't think that's because the products aren't useful. It's because the market is a lot smaller, in my opinion.

How do you think about the difference between going after these like the Mag7 companies that maybe have lost a step? We're seeing, you know, little cracks start to show, whether it's Apple intelligence or the copilot rollout versus taking AI into these niche markets that haven't even maybe seen the SaaS transformation yet. And maybe AI is the one that unlocks it. Is there one area that excites you more? How do you think about, about each one? Is there a certain type of founder that needs to kind of fit with a specific market? How do you think about those different areas?

I think for the most part it's a lot easier to take on the niches which are still not so niche. You know, like some of these niches that we're going after, you know, and you know what we're talking about in application companies, the leading company in the niche is 10 or 20 or $40 billion. Might not be 2 trillion, but they're, they're big niches. But I think this is, there's, there's two reasons. One, I think it's much easier to just win a small market and expand from there. That's like a, you know, Peter Thiel point is like monopolize something, expand. And that's much easier to do in small, less competitive markets than going up against Amazon or something like that. The other reason is what I've seen a lot of is companies are able to crack old industries with AI in a way that hasn't happened in the last software way. And so you're seeing in education and healthcare and legal and accounting and like finance and all these places where they were kind of hesitant before are suddenly buying things without even knowing for sure what it is. They just know that they want to buy AI and that's like a completely new paradigm. And it's not even, you know, that's professional services I just mentioned. But you could even go to restaurants or you know, like home services companies or mom and pop accounting and you're like leapfrogging and you show them AI and it's much easier to use than last generation of software. And so the value that they're getting is actually much steeper relative to what stack they were on than a tech company.

Yeah. The examples you gave, it seems like there's obviously huge opportunity to go after those small markets, whether it's mom and pop accounting firms or home services, any of those markets with essentially a SaaS product. There's also been a recent boom in folks in venture crossing over into kind of the private equity roll up strategy. Have you looked at any of those deals? Do you have. Are you cautiously optimistic? There's some people that have been saying like every time venture steps into that it can't go well. But what is your take? You're not. The fund's probably not really set up for that, but you could probably participate. Participate in some way.

Yeah, I think all of that is right. Well, I'm directionally optimistic about it and like you said, we're not an appropriate size for that to be the right strategy, but I think it's a very good idea. I mean the sort of one lens on this is at some point it is too hard to sell a great product into an industry that doesn't want to receive it and so just become that industry and then receive this great product. Product. The other lens is if it's so valuable, why are you going to give that away? I think that's a point that like Keith Ravell has made before is like if you've got this thing that's transformative for a, you know, an accounting firm or you know, a law firm or whatever, why should you sell them some software for 200k that they're going to go make a hundred million dollars off of? Yeah, like is that the right part.

Of the value Captures get a hundred times more customers, you know.

Yeah, exactly.

No, that makes a lot of sense. Do you think the job's finished with the founder friendly meme in venture? It was controversial 20 years ago, but now it feels like it's baked into most venture brands and it seems like it's more real than ever. I talked to founders that are set up from day one with super voting and seven board seats and stuff. Is that still an issue in VC or is it still a differentiator for venture brands as. As new managers build their firms?

I think it is here to stay. I think it is. Basically it is table stakes in at least positioning and then I think it is maybe more than table stakes in actuality. And I think people can sort of like go through and do the real work to see who's positioning it versus who's really doing it. I think in most cases it's the right thing to do, by the way. So I think the industry converged to the right place. Place where most of the time it's the right thing, but I guess a new thought. So I'm not positive if this is right, but it feels on some level like over time it is becoming a bet. Like it's a better and better proposition to be a founder. As like the decades go on and sort of the, the margin in this whole ecosystem has kind of probably moved from LPs to GPs to founders, where I think that is the directional flow of where extra sort of leverage is moving. And so I think that's probably just going to continue rather than recede.

Do you think any of that's due to the work of Y Combinator? I've often thought of YC almost as like a union for founders in the sense that if you're a VC and you screw over one YC founder, then it goes out to the entire network and you maybe lose access to the entire community potentially. Is that, is that a reasonable narrative or is it more like just the writing and the memes of all the folks in tech broadly?

No, I think it is reasonable. I think there's probably a constellation of inputs and I think that's probably a big one. And I don't underweight how important YC's footprint is. And it's so founder friendly and it's so dominant that going against that is hugely expensive. I also just think that there's, there's an extent to which everything about tech has become public. And like, to a, to a crazy degree, we know all the, you know, we know all these stories and the ins and outs and people have a good feel for how hard it is to be a founder. And I think even on that note, it's like, you know, all of the, you know, in the story, in the narrative of who do you want to win between the founder or the vc, it's like obvious. And so, you know, I think even that kind of thing, it's just like, like that's rightly the champion. And you know, having gone through it, I'm like, it is, it's like in order, like, part of what makes this whole industry work is that there is so much respect and support for founders because it is so hard. And so I actually think part of why Silicon Valley works is because the whole industry supports people in a way that otherwise you don't sort of get that. And I think that is actually critical.

Where do you go to get perspective and get out of the bubble? Right. If you walk outside of your house, you see billboards for companies that you've invested in or competing portfolio companies, or you run into another and then you go to Thanksgiving and you're not, you know, that doesn't work either. I'm curious how you try to kind of break out of the bubble and get perspective on our industry and the work that you do.

It's a problem. I'm steeped in it. And all my best friends are also in tech. And so I don't have a lot. But the obvious thing I have is my family. I have three kids, my wife's in medicine. And so I do have that in a huge way. And I think that's the only reprieve, but it's enough, I think. Think.

Can you talk about lessons from Lattice? How did you kind of grow as an executive? What in a founder? What skills did you pick up and what did you develop like, kind of, I don't know, like top tier talents in.

Well, I think, you know, some of this point I was just making about how like it's good that the industry supports founders so much because it's so hard.

Yeah.

Which is true.

Like, the flip side of it is that I think like one of the things that is that you just like can't believe till you do it is like how much you get to grow as a person. Being a founder and just getting constantly just like bashed every day for years by a million things. It's like the things from the early days that stress you out. It's like the, you still are equally stressed the whole way through. It's just like the two by fours that hit you have like gotten stronger. And so the little stuff doesn't get you as much. And so I think there's a lot of, of of that growth that happens. But I think, you know, people, one of the criticisms of consultants, which is the far other end of the spectrum from being a founder, is when you're a consultant, you are not actually, you're not tethered to the results of your recommendations. You are, you're, you know, the, the criticism is you're fully dissociated. You make a recommendation, you get paid, you're out. Who cares what happens five years later, you're like long gone versus as a founder, every decision you make, you're living with Forever and you're just completely connected to it. And so I do think that that experience of everything I, everything I do is like making the bed for, you know, years to come. I think that creates a, that creates like a sense of autonomy, personal responsibility. Everything's my fault. Like all of those kinds of characteristics I think are things that you build and then you never let go of. And I think this is a big part of why, why people like love hiring other founders. Like, you know, so many founders I talk to are constantly trying to recruit other founders to join their company because they have that DNA that gets built into them that just like doesn't go away. So I think that's, that's the biggest thing that's like, you know, an intangible.

What do you have to say to pronatalists in tech that don't have kids? You've got three, you're, you've crossed the, the replacement rate.

We always, we always joke, the Palmer lucky number. He wants everyone to have 2.1 kids at least.

It's the best. I mean honestly, it's like, you know, with all this stuff, with so much of tech stuff, it's so easy to get lost in like the sauce of you know, deals and new markets and AIs going crazy and it's all just, it's all, it's all awesome. But it is so far from the most important thing. And like, like, you know, the, you know, the, the, the most important things in life are relationships and like kids are the best relationship you ever get to have. And so it's like a really awesome special thing. And so yeah, I'm like, you know, there's, there's trade off to everything, but it's been the best.

Yeah, I, I have one last question. We'll let you go. I want to know. Yeah, I mean you mentioned that idea of like founders hiring other founders and there's a bit of a debate in Silicon Valley, I think broadly about you know, first job out of college. Should you try and go work for a really successful scale up series B product, market fit company, go work with the best founders, be on that hyper growth trajectory, experience growth, feel it and then go start your company versus hey, you know, some people see YC now as like a summer internship. Almost like, oh yeah, I'll go, maybe I'll drop out, maybe I'll go raise a little bit of money. Money, try something, have one startup under my belt and then go do the next thing. How do you counsel kind of the next generation between. Not necessarily like There's a one size fits all answer, but how do they know which one's right for them?

For me, So I worked at a startup before doing Lattice and I was there for a couple years and it grew a ton and that was really helpful to me because like when you start a company there's like 30 things you have to be reasonably good at, which is ridiculous. And at least you learned like 14 of them by like working at a fast growing startup. So you only got to learn 16. You know, it's like it's that kind of thing and it does help a lot. But you know, there's a lot of great examples we could name of people who just went right from college to building iconic companies. And in fact the very most iconic companies were built by people who dropped out of college or did it right out of college. And so it's like, you know, your mileage may vary and I don't think that there's like one story and it's easy to over rotate. I think think for most people getting experience helps, not hurts. And it's not like by the time you're 26 instead of 21, you're too old to do it. But you know, there's a lot of great people who have not needed it.

And so yeah, it's kind of like that quote, Mozart didn't go around asking people how to write symphonies. Like the folks who are destined to go start power law companies in their, in their teens. You can't stop them. Right? Exactly. But, but if you're asking yourself the question, maybe, you know, you should go build up the skills first. Anyway, this has been fantastic. Thank you so much for stopping by.

Yeah, thanks for sharing. Thank you guys for having me.

Yeah, we'll talk to you soon. Bye.

Cheers, Jack.

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We are having John Andrew, the founder CEO of Wander on the show very soon. Finally. Long overdue. It's been grinding. They've been putting up crazy numbers as everyone knows. Adding multiple homes a day it seems to the platform, which is just wild but very exciting.

Congrats to Wander. They're growing super fast.

Going so fast by the way, we're adding. So yeah, we are a new American Pope. And we are going to be adding Alex.

That's great.

From Hollow. Can't wait to invite him.

I'm really glad we got him on.

30, so the timing is good. Shout out to Katherine Boyle for suggesting that.

That's fantastic. And right now we have David Haber from Andreessen Horowitz coming into the studio. I believe he was at Goldman Sachs previously where he was the head of Firm Wide Strategy, which I always thought was an interesting description because it feels like the CEO would be the one to do the Firm Wide Strategy. But I'm excited to talk to him about his career and then what he's doing at Andreessen. So welcome to the show. David, how are you doing?

Boom.

Great to be here. Big finished show. Thanks for having me.

Thank you so much. Wonderful, wonderful background. Look at that. Thank you.

I was channeling the army earlier and you know, Catherine Boyle, you know, on the other day.

So it's fantastic.

Fantastic.

Yeah. That's awesome.

Yeah.

I mean, I'd love to start with just kind of like your background introduction and kind of how you. Your path to Andreessen, because I've been following you for like over a decade on Twitter and I think this is the first time we ever met in person.

Or you had to be. You had to be in one of my first hundred followers for sure. Back when I was in college, for sure. Like, this is. This guy looks like a chad. Let's throw him a follow.

Still chatting us.

No.

Yeah, it's been circuitous.

I.

Let's see. I. Well, I studied biochemistry as an undergrad, so I actually thought I was going to be a doctor. Worked for a super successful serial entrepreneur out of school, a guy named Rory Riggs, who had started a bunch of biotech companies, ran a railroad, and started a giant private equity firm called Royalty Pharma, which we can get into. It's a fascinating business. And then I joined Spark actually back in 2011 up in Boston essentially as like the one non GP at the firm. I was like a 23 year old analyst associate and it was an amazing experience. We were investing at a fund three at the time. The firm had already been pretty successful at that point. They had seeded Tumblr and put a bunch of money into Twitter and there were 10 people. We wrote the first check in Oculus when I was there.

Wow.

So, you know, great pickers. It's kind of where I learned, I would say like the, you know, the craft of venture, you know, ended up going deep into fintech at the Time and you know, in some ways getting, getting lucky. I helped, you know, Source and Seed plaid back in 2013 and a bunch of other companies. When I was there, I always thought of myself more as a founder than an, than an investor. And so ended up leaving and starting a fintech company in 2013 called Bond street with a good friend of mine named Payton Sherwood who had been running engineering at Venmo. They ended up getting acquired by Braintree and PayPal in 2013. I pulled him out to go start that business, which was in the small business lending space, which was challenging, but we built a great team, which is what I'm most proud of, and ended up selling business to Goldman. That's kind of how I ended up joining the firm. We came in kind of through the side door.

Yeah.

You know, and got merged ultimately to what became Marcus, which was their consumer business.

Oh, that's right.

You know, Peyton ended up inheriting. He had a real job. He had like 70 engineers to manage. I had a more amorphous off an org chart.

Yeah, I remember when I, when I, when I was following you, it said firm wide strategy. And that sounds like something that would normally be like the CEO's job. So can you actually explain like that sounds extremely important. Firm wide strategy. He was a puppet strategy. But yeah, I mean, what, what decisions were you making? What, what was the culture like at Goldman back then?

Yeah, it was f. You know, it was fascinating. You know, I thought I was going to go there candidly and get like suffocated and micromanaged because that's what my friends did, you know, 10 years before in, in banking and.

Yeah, yeah.

You know, fortunately that wasn't my experience, I think in part because, you know, I had no fear.

This DCF yesterday, we're not, not working on Sundays. That's good.

You know, I, Yeah, I just started firing off emails when I got there, honestly to like, you know, Marty Chavez, who's the CFO and the heads of banking and asset management. Just kind and trying to be helpful to people and really just like mapping the place. You know, you realize that even people who had been there for, for a decade or longer didn't know kind of what all the different component parts of that firm did. Yeah, and it was fascinating because it's not a normal kind of operating business, like, I don't know, an American Express that has a big consumer commercial business. It's really a confederation of a lot of little businesses who sort of fight for collective resources under these common kind of divisional umbrellas. But it's also really fascinating because if there's something interesting to do on the outside world, there's probably somewhere to put it, meaning you could be an equity investor, a debt investor, an advisor, a customer, an acquirer. So it was fascinating to bridge the world that I primarily lived in, like the tech ecosystem, and then try to help Goldman navigate that too. To be clear, I wasn't the head of Firm Wide Strategy. I worked for a woman named Stephanie Cohen who reported to David Solomon. But. But I was the weird kind of startup entrepreneur guy, kind of running around and trying to help her, frankly, get connected in the tech world. And she's now at Cloudflare and doing a great job there.

Yeah, it's still a really cool role. How much of Goldman's structure is a function of either, like, legal firewalls between different teams or just the idea that if you have a specific desk, you need to be able to manage their own P and L and kind of account for their business independently and then align incentives towards how that team is doing. Or is it more just like sclerotic because it's an old company?

I think it's a little bit of both. I mean, there's definitely some, you know, kind of regulatory bridge between, like, the public and private side and what can be shared legally. But I think the more interesting history, and there's a great book called the Partnership, which I think is a great kind of business history book. Even if you didn't work at Goldman Sachs, it would, I think for 140 years, it was one of the most entrepreneurial places in the world. Right? It was a firm that had to scrap. You know, it was started like by Jewish immigrants, basically. It was not sort of J.P. morgan or a lot of these other kind of white shoe firms. And they started basically like the factoring business. And then entrepreneurial people would raise their hand. It was a partnership. They'd give them a little bit of money and they'd say, I want to go build a new business. So somebody started the merchant bank, somebody started the wealth management division, somebody started Europe. And it was not a business built through M and A. It was a business really built organically, brick by brick, by enterprising people. And I think it's just such a fascinating history. And so part of that is the culture, right? It really was a partnership. And I think that confederation is kind of the evolution of that, which was like, you want to feel like a CEO, right, of your own kind of individual business, even that is like a trading business within a much larger division. I think the last 10, 15 years has required an evolution from that in some ways. I think the firm went public. Then you had the tech bubble, the financial crisis. The financial crisis, I think was a terrible experience for Goldman Sachs. If you remember the Vampire squid and the blood funnel, that was the brand, unfortunately, for a long time.

They actually did pretty well during the financial crisis. They like the best of the worst performers, which was somehow terrible even more because then all the negative attention came on the firm.

It did amazing. And part of that was they had really talented people. Part of that was actually technology. They built their own kind of unified core risk system. So they understood across every division kind of what their exposure was to the housing market market, and they were able to hedge basically that exposure and they didn't lose money. And then they made a ton of money kind of coming out of that crisis, which again, didn't hurt the brand, to your point, or didn't. Didn't help the perception of the market, unfortunately. But I think ultimately more recently, I just find their history fascinating.

Yeah, it is. It's so fascinating.

I think they become more of a, of a company than a partnership. Right. And I think to do that you kind of need operating leverage and, and therefore kind of, it's a bit tighter kind of at the top. And I think it's. My perception is that it's made it a less entrepreneurial place over time. Right. Instead of sort of giving an individual person, the agency to make their own individual decisions, especially from a technology perspective, you need more centrality, you need more leverage, you need more kind of command and control. And I think you've seen that actually benefit their share price. If you look at Goldman's market cap, even in the past few years, it's actually done really well. I think a lot of that is through that kind of centralization to some degree. But I think it does come at the expense to some degree of the entrepreneurial dynamism that existed for again, 140 years. It used to be one of the most lucrative places in the world to work. And nobody's crying for Goldman Sachs employees, to be clear, But I think it's a different culture and it's going to look more, in my opinion, like a normal bank than it was previously, which was a broker, dealer in a partnership.

I mean, responsibleness shareholders, when you catch.

Up with old peers, colleagues, et cetera, how do you feel like Goldman and other firms of that caliber are reacting? How would you rate their reaction to AI specifically? Are they just buying a lot of it? So that they can kind of say like, look, we're doing AI or is it like, you know, truly organic sort of ground up movement or some of both.

I think it's changing very quickly, you know, and I think again not to pick on them, but historically like, and I think in a lot of banks there was this culture of like, if it wasn't built here, we're not interested it. I think that was like the wrong decision for a very long period of time because the world kind of changed around them in a lot of ways. But I think actually Marcus, despite its challenges, was actually a good cultural catalyst in this point. They leverage a lot of third party technology because the consumer business hadn't existed previously. And I think many the CIOs and the CTOs at these firms are just, just understanding that there are some things that we should build internally. If it's core to our competitive advantage, fine, we should own it ourselves. But almost everything else we should outsource to third parties and leverage the best of what exists. It's actually informed a lot of how I spend my time here in part because as a founder it was very challenging navigating these big institutions to understand who is the decision maker. And then you get inside these firms and you realize that if you're, you're a division head running a 10,000 person, 20,000 person organization, it's not your job to know what's happening on the frontier, certainly not at the seed in series A stage. I think one of the things we've done explicitly and part of what's been useful to do from New York City where I sit, is be a bridge between those ecosystems and convene the CEOs and the leadership teams of every major financial institution in America and then curate a group of 20, 30 portfolio companies, non portfolio companies, that align with whatever their strategic priorities are. And it's kind of a win, win, win. You can accelerate the go to market for the seed stage business. You help this sort of incumbent understand what's coming. And it's helped us come to conviction on investments and just feel like everybody's sort of winning in that dynamic. But the rate of adoption is happening very quickly. Just to answer your question more specifically, and I think this is true in financial services, I think it's true Drew broadly in enterprise, both because there's bottoms up adoption like engineers are using, whether it's GitHub, Copilot or Cursor, big investors obviously. But then there's top down pressure. I think any CEO, any board member can plug a prompt into any of these models and understand intuitively the impact that it's going to have on their business. And I think financial services in particular are so human capital intensive of, you know, at Goldman, they call the. Basically the back office the Federation. And it's largely. It's kind of a Star wars reference. But, you know, it's still humans sitting in Excel, not even using enterprise software necessarily.

Right.

And across legal compliance, risk, vendor onboarding, and so much of that should be AI. And I think they're recognizing that and beginning to adopt it a lot more aggressively than I've ever seen, which is exciting.

Do you get a sense that there's been innovation happening in some of these more traditional financial firms or even hedge funds and things like that that is potentially groundbreaking but not being released as products? Right. Like, Jim Simmons didn't discover an algorithm that could make 60% a year forever. And then he was like, yeah, we shouldn't just productize it this and let anyone use it.

Jane Street's had GPT6 for like a decade.

We should just use it.

So.

Yeah. How do you. I'm curious if you have any kind of insight there, because if you've discovered something like, you know, if you discover a machine that just makes money, you should just.

Well, I mean, there was a rumor a while ago that Google's just. Their treasury management system was so advanced they were like, we could just become a hedge fund, but that wouldn't align with our mission totally.

I mean, look, there are a bunch of quant hedge funds that I'm sure have. I mean, they have to have had great kind of proprietary technology that have given them an edge. Whether it's Renaissance, as you mentioned, or Two Sigma or Jane street, it's hard to know exactly what's in there. I think they purposely keep it so secret. And I was listening to your conversation with Jack earlier. I forget if it was him or you guys who had said it. If you found something that is actually money printing, don't go sell it to a bunch of other people. Just like raise a giant fund. Do it yourself.

Yeah.

Well, can you talk about the transition to Andreessen? How did that happen? You know, you see people cross over from Goldman into Venture every once in a while, but it does seem like you had a somewhat unconventional path. So how did that conversation start? First spin up and then what's the experience been like over the last couple of years as the fund has scaled?

Yeah, it's been. It's been awesome. I mean, I. I've known actually Alex Rampel So he was the one who kind of of recruited me to the firm back in 2021. But I've known him for over a decade, so I met him I think originally through Plaid. We'd done the seat at Spark. He led it later round. I pitched him Bond Street. When he first joined the firm in 2015, 2016, he passed. We stayed friends.

Any such cases?

And then when I was at Goldman, I ended up helping them put a bunch of money into Carta alongside Maritech and alongside Andreessa. And he and Mark had worked on that investment. And then in ppp, like during COVID I was trying to figure out ways to help the firm plug our balance sheet into the economy. Right. I'd run a small business lender and I was afraid that small businesses weren't going to be able to get the capital they needed to actually survive. And we could pledge unlimited assets to the Fed window. And yet I thought technology and fintech in particular was the right distribution channel. So he and I were chatting a bunch in that moment as well. I actually left Goldman in October of 2020, went to go do this kind of weird thing with a hedge fund guy to buy a stake in Sotheby's. We can come back to.

Very cool. That's amazing.

I love that.

And he gave me a smudge.

He pinged me in March of 21. He's like, how's Goldman? I'm like, wouldn't know. Haven't been there for six months. He's like, what are you talking about? I'm like, yeah, I never updated my LinkedIn. Here's this kind of weird thing I'm doing with Sudden. And he's like, can I put you in front of Mark? And I'm like, well, twist my arm. I've never met Mark Andreessen.

And.

And that sort of precipitated a bunch of conversations. And, you know, fortunately they wanted to open up a New York office. And there was just a. I mean, I had always admired, you know, Andreessen from a distance really is a firm kind of run by. By entrepreneurs. And yeah, it was a unique opportunity to kind of plant the flag here in New York City. And, you know, that was almost four years ago. 100 people full time in New York now.

Wow. Yeah. Can you map Andreessen a little bit for us? Maybe compare it to Goldman? Obviously, a lot of entrepreneurial energy. But then, you know, there's specific funds, there's specific offices. It is a unique firm in so many ways. How has it changed? How would you describe it now Eric Torenberger was on the show and said it's very specialized. And I think, I think a lot of people in the audience were like, what are you talking about? They do everything. And it's like, well, they're specialized within the firm and there are specialists at the firm. And so what's that been like and what's the. How have you experienced the last couple of years as Andreessen has scaled?

Yeah, it's fun.

I mean, I think actually before Goldman, Bond street had been the biggest business that I ever worked at, which was several dozen people. Goldman was 40,000 people. So I think that scale has actually helped because Andreessen doesn't feel that big to me. I think in venture it's still big, but when it's. It's not. Yeah, just give you a sense for kind of how the firm is organized today. So, you know, we, last year we split the early stage venture business into three. We raised three separate funds. So there's an infrastructure fund which you know, my partner Martin Casada leads with. With Ang, Jennifer and Zane, we have American Dynamism obviously, which David Ula, which Catherine and Aaron help lead. We have an AI apps fund which Rampel, myself and Aneesh help run, which is basically anything consumer, anything B2B fintech, kind of being a horizontal across either. And then there's a separate bio and healthcare business, a games business, obviously a large crypto business, and then a growth fund that kind of sits across all of it and will invest in things that are kind of inflecting. And then uniquely, I think the firm is 600 people. The vast majority of our headcount is a large operating platform across a bunch of functional different kind of areas, whether it's go to market or marketing or people practices, an internal capital network team. And these are resources that we help make available to our entrepreneurs and really to try to tilt the board in their favors to help them build great businesses. And that was the ethos of the firm from the very beginning. I think Mark and Ben were customers of the best venture firms as entrepreneurs. And it was like five people on the checkbook. And their view was like, we're going to take no salary, we're going to reinvest 100% of our management fees back into building this operating platform. And that sort of benefited from economies of scale over time.

That makes a lot of sense. Can you talk about how the kind of platform teams have evolved over the last. I mean, as long as, you know, I was actually in the portfolio back in like 2012 and they did these like seminars for B2B sales and marketing and PR. But now you're seeing new value add pieces of the platform, whether it's introductions on Capitol Hill now, almost like a lobbying light version. But how has that evolved and how are you thinking about that going forward?

Yeah, I think part of what has happened is kind of it has further decentralized in some ways. So in some ways it does kind of remind me of Goldman where each fund is almost it's its own division that can kind of allocate management fees and talent at will to some degree. And as a result ultimately we think about each fund almost as a product to serve the entrepreneur. And so I suspect that as David and Catherine are thinking about the American dynamism business, it's how do I leverage these management fees to build the right capabilities that are unique for that specific customer which might be more of a presence in D.C. for example. Martin might think about it differently on the infra side than than on the app side. Same thing in the bio and healthcare business, having a deep relationship with all the payers and the big hospital systems to help again accelerate the go to market of the bio and healthcare portfolio companies. Super valuable. And so it has further decentralized, further specialized over time. But I think the same ethos is the same how do we come with capital but also help these businesses grow and scale and, and take what often was a first time founder and give them all the kind of superpowers and capabilities of being a scaled CEO. That was sort of the mental model I think that Mark and Ben started with.

I wanted to switch gears for a second and ask you about something that I feel like is kind of potentially on the horizon. So I've been hearing various teams are working on putting secondaries on chain which I think is going to be potentially hilarious and potentially a disaster. We'll see. We'll see. I'm cautiously optimistic but on the topic of secondaries in you know just, just, just companies liquidity and the private markets it feels like the, this has been this like perpetual like promise like the whole industry is very excited about it and I don't feel like at any point point despite so much the sort of broad growth of the private market over the last 10 years, it doesn't feel like we've made that much sort of meaningful progress. Can Silicon Valley learn at all from, you know, Wall street is notorious for creating new financial products that can actually be successful and scale and become big markets and of themselves. Do you expect secondaries to get There at any point in venture do you spend time thinking about that at all? It feels somewhat inevitable. But then at the same time we've all seen how illiquidity can be, you know, such a feature and not just a bug like like some people would have us believe.

And are you talking specifically about like kind of employee secondaries or just like.

Broadly like just bringing like.

Well, there's a public fund right now. There's a public fund.

Yeah. And I was going to be owns.

A number of SPVs and look through exposure into various.

Yeah, it's more so bringing at the same time exposure liquidity. I'm just, I'm interested to see if you have any type of thesis here. The other thing we saw recently was CO2 coming out with a new fund that's a smaller fund with like a $50,000 minimum check size. And I didn't fully understand that move outside of wanting to create a product for maybe the next generation of family offices and things like that. But I'm curious if you have any type of vision on the next 10 years of.

It's interesting. I think there's a couple of big secular trends that are happening. One, certainly companies are staying private longer and I think that's driven the scale of the venture business. You can put more dollars into your winners over longer periods of time. So it kind of makes sense to be able to capture the economics there. Yeah, I think the other kind of secular trend has been bringing, and we're still early I think in that kind of way of bringing alternative investments to wealth to the kind of mass affluent kind of wealth management channels which you know, historically have largely been funded by kind of institutional investors and, and their like. And I think, you know, the big private equity firms with REIT structures and credit products have done that much more aggressively. Venture is still relatively speaking a small asset class and a small business and historically hasn't I think needed in large part to tap the wealth ecosystem. And time will tell how aggressively you can scale a venture business. I don't know that that's not the goal necessarily, but I think if you're Apollo or Blackstone trying to raise hundreds of billions of dollars in real estate funds, wrapping it in a reap product and, and distributing it to retail makes sense. And, and to do that you need liquidity. Right. As an individual investor doesn't have the.

Same sort of like time horizon.

Time horizon. They need access to cash for, for various reasons. So you need to give them outs. And so the CO2 fund I think was a crossover Kind of public and private fund with some liquidity gates, you know, more power to them. We, we, we haven't, you know, done, done something like that.

You talk about the application layer in artificial intelligence, there was this meme for a while. Every wrapper is going to get steamrolled by the foundation models. I imagine you've been investing throughout that process, but has your thinking evolved and have any of the recent milestones that we've seen, you know, windsurf going into OpenAI that feels like, okay, maybe it opens the floodgates to every foundation model needs some dance partners here and maybe that's an opportunity for liquidity at the early stage. Investing side, how are you? Have you evolved your thinking on the application layer and the opportunity there, whether in B2B or consumer.

Yeah, I know. I mean, I think you're right. Like, you know, I don't know, 18 months ago, I feel like the pejorative was everything's a GPT wrapper and the fear was every state of the art model company was going to eat every workflow. I think that hasn't been the case. And I think the, you know, like declining cost basically of like intelligence has benefited the application layer and not, not just in like text and reasoning, but across kind of every modality, whether it's voice or video or image. And so, you know, both, I think you're. The quality of entrepreneurs has, has kind of, you know, I would say increased dramatically even in the past year. I think people building specific products for, you know, with a deep understanding of the industry and the specific workflow that they're targeting, you know, has, has changed, you know, again in the last like six months. And I think what you're seeing now is also not the sort of bottoms up, you're also seeing top down. You're seeing companies own the end customer, own the end workflow, and then begin to build their own models. I think the fear was sort of the inverse for a long period of time. But it's been easier to kind of route prompts to different models and maybe capture the highest margin queries in your own model or improve your own economics by owning some of that workflow internally. And I guess mine, my hot take is that moats still matter and a lot of them are largely the same, at least in my mind. I think AI is an incredible tool for differentiation. The idea that a voice agent can do the workflow in some cases a thousand times better than the human is amazing. But the technology I think is an ephemeral advantage. I think it's an amazing tool for differentiation, not necessarily the source of defensibility. I think a lot of the defensibility in my mind resides in the things that have always been true. Owning the workflow, end to end, deeply embedding yourselves within your customers, becoming a system record, having a network effect, being a platform. I think these were all the heuristics you would always look for when evaluating software companies. Historically, I don't know that this time is that different. I think the impact and the idea that the software can actually do the work is radically different. If you can capture labor budgets more than just it spends, the TAM is radically different, much larger. But that's at least been kind of my own mental model over the past several months.

How are you thinking about open source? Mark's obviously been very outspoken about open source. I've always wondered, will there be a red hat of this generation with AI? Stable diffusion was kind of thinking about that and you could imagine that some company crops up that's not like a for profit, very successful company, but built on top of open source. Are you looking at that? Are you optimistic about that or is it more just like philosophically, open source is a good thing for the ecosystem more broadly.

Yeah, honestly, it's a better question for Martin.

Sure.

You know, they spend more of their time on the infra side, you know, in that community. But you know, we are big believers and investors behind open source. I mean, we're big investors in Mistral, for example, in Europe, which is one of the leading open source players. Mark's obviously on the board of Facebook and I think what they're doing with Llama is amazing. So I think there's opportunity for both. And I think in many ways open source is a great competitive force which is also kind of drive down the cost of a lot of the intelligence, which again can be great in its own business and I think is also benefiting the application.

Jordy, last question, last question.

How much do you expect the adoption of AI to mirror what we've seen in Fintech? Right. It feels like fintech's, you know, been so transformative over the last decade plus yet at the same time, every once in a while I still need to, you know, write a check or you know, use any number of different things. Does that provide any type of mental model for you on how to think about how people and companies and countries adopt AI?

It's an interesting question. I haven't thought about kind of the through line there. I mean, I think AI, this may not be as shocking, but I Think it's going to. It sounds cliche, but it's going to change everything. It's going to be everywhere. And even the kind of intersection of fintech and AI is just, I think incredibly interesting. I think my bias for the past several years has been been to invest in fintech companies that lead with software, you know, as opposed to financial products. And it's part why we built that incumbent network. It's in part because of the culture of these firms are changing. But you know, again, the ability to do the work within these organizations is so radically different. There's just massive labor budgets to be able to capture. And so again, I think we're going to see the adoption of AI probably proliferate even faster than we did, you know, into products. Although that happened quickly as well.

Well, yeah, makes sense. Well, thank you so much for stopping by.

My pleasure.

Thank you for having you. We have to have you back and talk more that we could go on forever. But yeah, we'll let you get back to your day. I'm sure you have a lot going on.

Awesome, thanks.

Catch up.

See ya.

Fantastic. We are pretty much done with our ad reads. We did a lot of them but we still need to tell you we mentioned figma.

He failed everyone.

I know, I know you want more ad reads. Remember we are 100% corporate, corporate backed here at TVPN.

That's right.

And we're also sponsored by Figma. Think faster, think bigger, build faster. Figma helps design and development teams build great products together. We were at Figma Config yesterday.

The new products are so exciting. You can now, I mean my favorite is figma. Figma sites. I posted about this but it's a product that I've wanted since the very first day. I use figma real quick. So we have Alex joining from Hollow to talk about the new American Pope. I'm very excited about it.

That's amazing.

So he's gonna give some perspective.

Kathryn Boyle also, did this happen while we were live?

Because it happened while we were.

Okay. Because you keep referring to this and I'm like, I'm still seeing. I haven't gotten the update. So this is the Pope has been decided.

So Hollow is based in Chicago.

Okay.

And the new American Pope is from Chicago.

Wow. New Pope elected. Yeah.

Credit to Catherine.

On May 8, 2025, Catholic Church announced the election of a new Pope. Signaled by white smoke rising from the Sistine Chapel. This event, marking a significant transition in the church's leadership was celebrated widely. The new elected Pope was expected to address the public from the central window of the St. Peter's Basilica. Many people learned about this historic event through various online posts, with some humorously noting the unconventional ways they discovered the news. A lot of people posting memes. Very fun. Well, I'm excited to invite Alex to the show. I'm so glad he could hop on the same day. That's amazing. He's not here yet, so we can go through some other posts and talk about what else is going on. I like this poster.

Yeah, I got a post for you. Will Brown has joined Prime Intellect.

Oh, wait, really?

Yeah.

That's amazing.

I know. It's really ne huge pickup for Prime.

Some personnel news for you. Personal news, if you're not familiar with Prime Intellect. Fascinating. Fascinating company. They do. I mean, it's technically a crypto company, but they do decentralized training of AI models. And yeah, Will's a great poster and obviously very sharp in AI. So congratulations to Will. That's great.

Excellent rollout of this announcement.

He just was teasing. He was teasing it for days. I was sitting on the edge of my chair, very excited. Congrats to him and welcome to Alex to the Stream. Good to have you here.

Thanks for having me.

Thanks so much.

Yeah, that was fun how that came together.

This is amazing. I'm so glad you could jump on.

The same day with Harley from Shopify and coordinating, but made it happen. Busy day. Busy day for you, I imagine.

Yeah, it's a pretty exciting day for us. I mean, it's like a one in a million chance that the Pope happened to be American and then that he happened to be from Chicago. It was crazy. That's where I am today. So, yeah, it's been a fun day for us. Been a fun day for us.

That's amazing. Would you mind kicking us off with just a brief introduction on yourself and the company just for. So everyone knows.

Yeah. I'm Alex, the CEO and co founder of Hallow, which is a prayer and meditation app that. We're Catholic, but we hope to be a resource for anybody interested in growing in Christian spirituality. We've been working on it for five or six years now. We're a series C startup.

Very cool.

Talk about what it was like kind of starting the company at that point in time. It still felt like an era where people in SV didn't really talk about faith. It was kind of a. Didn't feel like it wasn't a market.

That people interfaced with very frequently. So they didn't think of it as a big market.

Maybe it was almost Like Silicon Valley had gone so far towards atheism. Atheism, effectively, that it was. That religion was like, taboo.

Yeah. For a long time, religion was seen as like anti science and technology was science and therefore you couldn't be religious and build a tech company, even though now that's been massively disproven and has been disproven forever. But anyway, what was your experience starting the company?

Yeah, I mean, for me, it was my own. We started. I started for myself. I had fallen away from my faith and discovery. A relationship with Jesus, a relationship with God through prayer and like, really learning about what it meant not just to talk to God, but to really listen to him, to really sit in silence and to spend time in contemplation and meditation. And I had no idea that those things were. That there was a Christian spirituality tradition of those things. I thought it was just, you know, hey, ask for stuff and repeat the things you heard as a kid or memorized as a kid. So it had changed my own life. But yeah, I was. I was in Stanford and working on this thing in Silicon Valley and pitching Jesus a Jesus startup. And it was certainly not. It was certainly not the. Not what people are used to hearing. Honestly, it was fun for me because I got to go to all these VCs and, you know, my story is just my own relationship with Jesus and how he's changed my life and how he's brought me this peace and this love and this joy. And I just get to go into these, you know, boardrooms and just pitch my own faith, which is fun. But it's certainly the vast majority of people thought it was a stupid idea. I mean, 99. But that's true for any, any startup. But yeah, I mean, it's like people don't pray anymore. They meditate. Prayer is a dying thing. You know, it's been dying for a while. It's going to continue to die. And it's funny because Hallow is, is. Is not. Hallow is a contrarian idea, really. Only in, like, Silicon Valley, in New York, if you go to, you know, the middle of the country, even if you come out here to Chicago and you're like, hey, do you want a meditation app or do you versus do you want something to help you grow in your faith? You know, the latter is much more. It's like, no. 75% of Americans are praying every week. It's a really important part of people's lives. And it's a huge. Nobody's trying to do anything to help people. But so In Silicon Valley, though, it's fun because it's a contrarian idea. So it was always fun to. Always fun to pitch, honestly, the best of both worlds.

You have contrarian here, which everybody's trying to be contrarian, and then non contrarian in the market, which is where.

Amazing.

You're growing.

Have you seen a big surge of downloads around the conclave? And I mean, like, religion is the national. It's the global news story this week. Does that drive growth for the business?

Yeah, we take it really seriously to try to help. You know, this is different than like a. We talk about it often as like a political thing, but it's very different for Christians and for Catholics especially than, you know, a presidential election in the US and the most important part for us is. And this is true also for political elections, but certainly for this, the most important part is prayer. And so the thing for us is just to make sure that we're spending time praying for the church, praying for the, you know, repose of the soul of Pope Francis after he passed. And so we tried to create some content to help people journey through that, and then also to pray for the cardinals as they were choosing the pope. And then now to pray for the new pope and to get to know him a little bit and learn about his writings and his homage and where he, you know, what he's trying to do for the church. And so, yeah, for us, trying to help grow deeper in prayer and use this as an opportunity to let God work in our hearts was, we thought, a big opportunity. So certainly, certainly pretty busy for us. And we got, like, today was one of our biggest spikes and downloads of all time because, you know, you send out a little push notification that's like white, white smoke. There's a new pope, so let's pray for him, you know, but for us, we just try to use it as an invitation to, you know, let God in a little bit more.

Yeah. How do you think about design of the app? I feel like the App Store is so competitive and there's so many dark patterns when it comes to mobile games. I'm sure you're trying to use best practices, but you probably have a moral framework that you're following the lines that you don't cross. How have you thought about actually building the app to be something that can grow and be fantastic business while still satisfying the core mission of the company?

I certainly hope we have a moral framework. I care a lot more about getting into heaven than our retention rates, but retention is important, actually. It's funny because retention is a great example. We work a lot on retention. You want to drive great retention. And for us, what that means is we measure retention based off of whether you're starting a prayer, whether you're praying on the app. And so a retention rate is just okay. If you downloaded the app, you're looking to grow deeper in your faith. You're looking to try prayer and meditation and growing in your spirituality. How successfully did we help you to build a daily habit of practice prayer? And that's a really, you know, that's the core of our mission. But it also, you know, as a subscription business, which there's a free version of Hallow and then a subscription version, but as a subscription, that's also all you care about, is trying to get new subscribers in at low cacs and then try to keep retention, which for us is just adding value to people, you know, for. There's a lot of people who have a lot of very strong opinions on this, but like Christianity and the church especially has always had a very clear stance, which is like business and, and economics and certainly entrepreneurship can be forces for real good. They can be used for evil. And most of the time they are. And that's the same with technology. Like, most of the stuff on the Internet is bad. It's at least if not bad, distracting and noise and awful for, like, your soul. But God can still use it. So just because we screw it up the vast majority of the time doesn't mean that God can't use it for his own good to try to bring joy and love and into people's lives. And it's the same thing with, you know, startups, which is, and even Pope Francis was really clear on this. Like, startups and business can be a tremendous force for good as, as long as they are, you're doing them with a spirit of service aligned with, you know, the right values, treating your employees well, trying to serve your customers, not trying to do dark patterns or anything, and doing it in a way where money is a tool and never the object. If it's the object, you're always going to leave unfulfilled. It's always going to be sad. It's, you know, you know, it's never going to be the end all, be all. You're trying to make it your God. But if you use it as a tool, then it can be a great tool to help serve your brothers and sisters around you.

Can you share a little bit more around the news today and around Pope Leo? We were live when the news was announced. And we've had like eight guests so far today, so certainly haven't been able to get into it. So for our own curiosity, even at.

A meta level, like how can someone get to know the new Pope? Like what, what is the correct process to even digest that information?

Yeah, well, in a self serving spirit, we have a challenge launching that is to get to know the new Pope and to pray and to try to spend some time in silence, but also to get to understand the new Pope. And most of the time it's through homilies. So these are cardinals that are chosen who were then priests and then bishops and then they're cardinals and so they've given a lot of homilies, they've given a lot of sermons and you can tell of a lot lot about where a person's heart is at, what they're trying to do in the world and what they think the world needs and what, you know, they've heard from folks in terms of what they need from their homilies. But you know, at a super high level, for the folks who haven't been following the news, the a new pope was chosen. Pope Francis passed away. This was the Monday after Easter Sunday, which is beautiful. Like his last day was Easter Sunday, which is just such a, such a beautiful time. But then there's a period of mourning and then the cardinals get together in this like super old school in the Sistine Chapel. Chapel, a beautiful place. And they vote on for a new Pope. And it's been, it started yesterday, so it's been two days, so it's relatively quick. But they go through these rounds of voting each day and you have to get to 2/3 and then that's the new Pope that's chosen. And today the new Pope was chosen and it's Pope Leo xiv, which is the name that he choose. You choose the name as a, as a pope. And he is a cardinal from, he was a cardinal from Chicago who lived in Peru for about 20 years, trying to serve especially the poor and act as a missionary. But then he worked in the Vatican for a while and got familiar with all the, all the Vatican stuff and was a very good, worked very closely with Pope Francis. You know, it's crazy because he's the first American Pope in the history of the papacy, which is insane. It's not that crazy because the church has been around for 2,000 years and America's only been around for a couple hundred, but a few hundred. But it's the first American Pope, which is huge from Chicago, which I live in Chicago, currently with my wife and kids, and Hallow is based out of Chicago. So that's just insane. I mean, the chance he was like. People kind of thought maybe he was in some sort of list of front runners, I guess, but, like, certainly not top five. Nobody would have thought he was, you know, the top three or four or five. You know, for. For me, it's.

And.

And then he comes out and he blesses the city of Rome and then the whole world. So it's this picture where he's out on the balcony blessing everybody, and he gave this really beautiful speech of, you know, just how God loves each of us and he just wants to enter each of our hearts and that we shouldn't be afraid and we should go forward with. With faith and with hope and. And, you know, with the protection of Mary and the angels and all the fun Catholic stuff, but really just to let God into our hearts. And so he gave this beautiful speech. It's. It'll be fun, but, you know, it's. He's 69 years old, so he'll be the Pope for, like, you know, probably 20 years or it'll be a long. He's a relative young Pope, so it's a cool thing to get to witness.

That's very cool. Are people already reading into, like, the political implications of this? I know the Wall Street Journal was a little bit critical of Pope Francis for some environmental decisions he made. What are people expecting from the Pope in terms of, like, political leadership or shifting the culture around the politics of the church?

Yeah, you know, we always. And especially as Christians, we run into this all the time. Time. And it's. Honestly, it's what happens in the Gospel. Like, you read the Gospels and you read the Bible, and what they tried to do to Jesus was they tried to. They. They tried to bucket him into these political things, and they were like, oh, you say you're the Messiah, so aren't you supposed to overthrow Rome? That's the current, like, operating power. And he's like, guys, guys, guys, I'm not focused on your, like, right left fights. I'm not focused on your little disagreements with your politics. I am trying to build a kingdom, but it's not this kingdom where it's, you know, I'm going to, like, fight a war. It's a kingdom. Like, it's your heart. I want your heart. That's what I want. I want your life, I want your soul. I want your heart. Like, I want. I want you to live a life of love. And so what we tend to do is the same thing. We've done it for 2000 years. But what we tend to do as Christians is we, like, we bucket these church leaders into these political category categories, and oftentimes it's appropriate because they, you know, speak very politically. But especially as the Pope, it's such a funny role because American politics are such a small portion. I mean, you're the Pope of. I mean, you're the Pope of the world, but certainly the billion and a half Catholics which are spread, you know, there's a small minority are in the United States. And so even just thinking, you know, for me, with Hallow, we have a global population now, and thinking of politics in different countries, it's just like, you can't really compute it. But you know, what he seemed. What Francis was really focused on, I think, was this, was trying to share the love and the mercy of Jesus with people, especially people who are the most marginalized, who are. Who are in the toughest places. Honestly. It's a lot of what we try to do at Hallow, and I think this is what Pope Leo will continue. Pope Leo XIV will continue to try to do it. He spoke a bunch of it about that in his first kind of blessing. He's spoken about it before. I mean, one of his quotes that I looked up, that I loved was like, we. We spend so much time as Christians focused on teaching and on theology, which is important. It's a beautiful part of the faith. But we forget that the first thing that we're supposed to teach is just like, hey, hey, there's this dude that I know that's awesome that I love, and I want to share him with you.

Now.

He said it much more beautifully than that. He said, you know, the first thing we have to teach is that is to know and love Jesus Christ. But it's the person. It's. It's. It's not. It's not like this set of facts or ideologies or politics or whatever. It's like, no, I just have this guy. I want to share with you this relationship that I want to share with you. That's all. And I think that's what he'll try to continue politically, actually, you know, on some of the more sensitive topics, he's been very reserved. So, like, there's nothing a. There's not a lot that you can tell on. On his stances other than the things that the church has always stood very clear on. So he stands very clear for pro life. I mean, he's. He's got a very pro Life message, which is the same as Pope Francis, both for the unborn and for elderly. He's got a very clear stance on protecting the environment. God gave us the environment. And, you know, the church's job and us, our job as Christians is to inspire us to take care of what the gifts that God has given us. And so, you know, he pushes for a lot of the same things. But Leo actually is a really interesting name, because the Pope, Leo the 13th, was the one who really fought against this socialism, like this rise of socialism, also unbridled capitalism. And he was like, look, you can't just, you know, exploit people for money. That's, you know, we shouldn't do that. But also, there is private property, and it was really fighting against this rise in communism. And so choosing the name Pope Leo does actually say a lot of really interesting things about what he's hoping for for the church, but we'll see. I don't. We've got 20 years to figure it.

Out, so got some time. Alex, thank you so much for joining.

This is fantastic.

Super insightful.

Thanks for having me, guys, so much.

We'll talk soon. Good luck today.

Bye. That's fascinating.

Have a busy evening.

For sure. For sure.

We got Gary in the waiting room.

Let's bring him in.

We're excited to have him on board.

Yeah. What a great topical update. I'm excited to dive more into the Pope and kind of understand where he lands on everything. Pope, someone who's, like, kind of, you know, drops out of consciousness, but then pops every once in a while and delivers a banger homily.

You got a new homily alert.

Really shake up the tech industry. Yeah, with a banger homily, hopefully. Anyway, we got Gary Vaynerchuk coming in to the studio to the show, excited to talk about the creator economy, what we're doing, what he's doing, how they intersect. And I want to ask him about this Walt Disney corporate chart. Have you seen this? The famous chart of how everything interconnects. And I have an interesting hot take. I want to get his reaction to, because this chart, everyone cites this as like, oh, it's okay. To build this really complex business where everything interacts with each other. Disney created this chart 10 years before he died. He was 50 and had spent 30 years building the Disney empire. This was a reflection on his life and his career. And we got Gary in the studio. So welcome to the stream. Gary, how you doing? Oh, welcome in the back of the car.

There we go.

Where are you? Where are you going?

Wait, wait, how was, how was Bloomberg? You were over on Bloomberg tv.

I was on Bloomberg TV a few minutes ago and now I'm upgrading to the most important business show in the world.

Thank you. Thank you.

First of all, men, you guys look very sharp.

Thank you.

Thank you.

Yeah, we try and dress up, we take it professionally. We are the media.

You guys look good. I am in New York City headed back to the office. I'm like in the thick of this major launch of my befriends trading cards and. But I'm really, really humbled to be on this show. And you guys, obviously we've spoken a couple times off screen, but I'm gonna give the flowers while I'm on it so other people hear it. I love what you guys are doing. I'm proud of you guys.

Thank you.

I cheer for you guys and I'm thrilled to be on the show.

Thank you.

Thank you so much for coming on. Tell us about the launch today. To start, I have to imagine this has been in the works for years now. So tell us about what you're launching and the significance.

Look, I. Knowing how high caliber the audience is here, let me say it this way. The direct answer is we have a TOPS trading card launched nationally, globally actually. Which is if you pay, pay very close attention to the narrow sports card world is a big deal. The only other IPs that are on Topps Chrome are Disney, Disney itself, Star Wars, Marvel. So it's a big head nod to this tiny young intellectual property that I'm building that has the ambition of Pokemon, Marvel, Disney. But I mean year four and back to, you know, you were just mentioning Walt Disney. He was doing that 110%. Travis from Uber and I used to invest a lot together. And when he took over and was the day to day CEO of Uber, he's like, I would hit him up about random things. He's like, I can't. I'm 100 focused on this. I, I'm four years into be friends and I'm in the process of getting to a place where I can focus 100 on it, but I'm not there yet. But yesterday was a great day, especially for me. I grew up a baseball card kid. Tops is the apex, but at a higher level it back to the audience that's here. I really think that intellectual property is going to be a very big topic of conversation over the next 20 years. I think as we go into this AI era, I think people will understand the value of IP more and more and more. And I'm grateful that, you know, on my belief of what the blockchain means, which is what I started Be Friends on as an NFT project, and my understanding of storytelling and brand building around comic books and cards and cartoons and all that stuff, I'm pretty excited, man, to be honest. Directly, yesterday was a big day, but it's a tiny, tiny little pebble in this boulder I'd like to build over the next three or four decades.

Yeah. Talk about creating iconic IP takes time. There's no way to shortcut.

You can't.

There's no way to shortcut. Yet at the same time, crypto is known for just being ruthless in terms of expecting things, things now, yesterday, things like that. How have you found. And obviously I don't think there's very few people in the world that work harder than you. Right. So you're like working on delivering that and growing the value of the IP day over day over day. How have you found the pace?

Pretty easy if you're willing to deal with pushback. Meaning. But to your point, if you go talk to hardcore NFT collectors, that small group. Right. In the scheme of 8 billion people in the world, a lot of them will tell you that over the last 18, 24 months, I've not been the darling of the ball because I just refused to do things that were going to create short term economics. I had to take my bumps and bruises on some of the degens and I was empathetic. Like when you are running a marathon, sprinters make fun of you.

Yeah.

So, you know, how have I dealt with it? I'm grown. Meaning I've been running businesses for 30 years of my life, day to day. So I didn't. I've also been a public figure for almost two decades. It wasn't hard for me to deal with the cynical tweets. I have a fucking vision. I'm focused on what I'm building and over the last 24 months building the infrastructure of trading cards and comic books and cartoons. My Moonbug collaboration, my Topps collaboration, us becoming a leader in live social shopping on whatnot. These are the pieces that are being put in place. And when you look at the NFT values, because people are falling in love with patient panda and fearless fairy tales. You know, I know why people buy Spider man comic books. I know why people buy Mickey Mantle rookie carts. I need the storytelling. While there was uncertainty in the market, especially with the prior regime's sec, I've just focused on building incredible community and collectability and infrastructure and building out my team. And so to answer your question, it was quite easy and quite hard. It was easy because I am who I am as a human and an operator. It was hard because even if you're a gangster and focused and I like to be all those things, I'm a human. And you know, when you get that pushback and people like, where, what, what's the value? What this, that or like, where did Gary Vee go? You know, you're gonna, you gotta eat it. But the reality is I've been very clear about what I've been doing from day one. You can go look at my CNBC or podcast interviews in 2021. I said I'm building a 30, 40 year IP. 99% of NFTs are going to go to zero. I see a path to not being part of that 99%. It is going to involve the real world, not just digital. I will stay on top of my web 3 understanding, my web 2 understanding and you know, I've spent six months on understanding AI creation is going to matter for this IP, you know, because I'm required to. Or the updates on new blockchain or what Coinbase is doing with base as a layer two or what's going on with YouTube Kids Dynamics. And I mean I'm just in my traffic bro, and so I'm, I've handled it easily.

How do you think about value transfer for intellectual property going forward? I mean, we were in the dark ages for a while where you couldn't even use a song on social media without getting the thing taken down. Now it feels like most of the platforms have figured out to how to funnel the ad revenue around to the correct creator. Imagine that gets better with AI, but.

It'S gonna get, it's gonna get better with AI and a lot better with AI on top of blockchain where you could really, really layer it all together. So what do I think? I think people in the intellectual property business are big winners of the next half century. And I'm grateful that between Gary Vee, the personal brand and Vee Friends, the intellectual property that has obnoxious ambitions that I'm going to be in the, in the game.

What is, what is the next one to two years look like you've been laying out, you know, your, your master plan, giving us updates. But what is, yeah, what is it? What's the immediate future look like?

Social media creative at scale. Believe it or not, this is analog. But the comic books are monstrous for me. We just put out. But it's a modern twist. We're selling comic books in packs. So it has like a baseball card feel. So different covers, different variations. And we're selling it on whatnot and TikTok shop. So we're doing commerce tainment, which is something I believe very deeply in.

Yeah.

So right now I'm going into the chapter of here's How I look at it. I don't know if you men knows this, but Harry Potter's original book is a very sought after collectible and very valuable. Yeah, but Pokemon and Star wars first books are not that sought after. Spider Man's rookie card in 1966, Donrus, I think an undervalued collectible, but it's not super sought at because when you're a comic book collector or more importantly, the first time Spider man appeared in the world, it came in comic book form. Harry Potter came in book form. Trading, you know, Pokemon came in trading card form. The form factor of the collectible when it first appears becomes the alpha, becomes the the real central focus. And then the IPs expanded to everything from pajamas to cereal to vitamins to movies to video games. My what I'm focused on right now is getting people to fall in love with my characters. So animation, social media content, comic books, trading cards that have stories on the back. I'm very focused on that. What that's doing is it's leading people when they fall in love to get into the ecosystem and then that brings them back to wanting to own Veefriend Series 1 NFT, because that is the original origin of the IP. So next 24 months is keep my eye on macro technology, make sure I'm utilizing AI and everything that it brings to the table for me to expand the output of my creative both in volume and quality, pay deep attention to the new blockchains and the layer twos and the innovations that are happening in NFT land. Because obviously you know, this isn't at the end of the day a digital collectible first and everything else second. And then most of all, figuring out more ways for people to fall in love with ambitious angel and balanced Beetle and the very lucky Black Cat.

You said you're one of the most active sellers on whatnot. Are VCs still underrating live shopping? It feels like one of those things.

That took off in Asia, but there.

Haven'T been that many taken off in certain subgroups and for certain product types here and certain demos. But I'm curious, as a seller, how do you view it today? Today.

I view the the QVC ification of social Media as one of the most significant micro emerging trends in the community of venture capital, private equity business opportunities for entrepreneurs and humans. I think it is incredibly real. I wouldn't call that VCs are underrating it. I think whatnot got an obnoxious valuation, but I think that's the macro infrastructure structure. To your point, D.T. i think entrepreneur. I think small businesses and entrepreneurs and startup founders are underestimating it. If you sell something physical, if you sell something and live social shopping is not part of your daily debate, strategy and then ultimately execution. You're misplaying spring of 2025 every. If you sell vitamins, if you sell underwear, if you sell racquetball, if you sell something and this is not part of your repertoire, you're basically similar to someone who's not using social media at all in 2008. 9. Which means you're not going to go out of business. It's not like you're a doofus and you're dead. It means that you're leaving an obnoxious amount of opportunity on the table.

Table.

Yeah.

Yeah. That's a good framework. Anyway, we'll get on there and we'll start selling 2026 ad slots right next to you. Yeah, I know, I know. We got a hard stop. Anything else?

You know what's funny? Like, like now I want to say thank you and I want to say commerce tament. You may not sell ad slots because that's a different form factor. But if you don't think that you guys could sell and I don't think this is the right move for the tone and 10 or what you're doing. However. However, there are general business items that this show could sell at scale, even passively while people are watching with shop for a briefcase or these are the best travel shoes or I don't know, fountain pens. I don't give a. Like, you guys could dominate.

Love it.

I love domination. I want to dominate.

Everything we discuss, we'll discuss.

Yeah, yeah. We'll put our master plan together.

Standing desk, floating across the screen and we. You're saying Bye now.

3 left.

Great to see you, Gary.

Fantastic travels. We'll talk to you soon. Anyway, let's do some timeline. We got 15 minutes until Will from Whoop is coming.

Amazing thing about GV. He's the same person always.

Oh yeah, totally.

Every interaction talking with him here. He's in the car just doing business.

Yep.

Fully authentic. And I like the clear dedication to veefriends. I mean he is on an absolute trenches. I love to See it anyway.

Let's go through some timeline. First up from Harsh. He says windsurf sold for 3 billion cursors now valued at 9 billion. Windsurf bought by OpenAI. OpenAI is an existing investor of cursor. Both are VS code forks. VS code is owned by Microsoft. Microsoft owns 49 billion of OpenAI. And it's the big short photo. Hey, there's a bubble. And I mean a little silly, but it makes sense that everyone's getting into this. This one from Leo Gao, if we can pull it up, is one of my favorites from Frog and Toad. Said Frog put the profits in a box there. He said now we will not be motivated by profits above the cap, but we can open the box, said Toad. That is true, said Frog. Just a timeless children's tale, obviously referencing the the OpenAI profit cap. Nick Carter also had an interesting post about AI. The K shaped reaction to artificial intelligence. For people who are naturally curious and love to learn, AI vastly improves their pace of information ingestion. For people who hate reading, writing and see knowledge work as pointless busy work work, AI will atrophy their cognitive functions. I couldn't agree more. If you're curious, you'll just be tinkering with chatgpt all day long. I was trying to pull a list of the fastest companies. I mean I'm sure everyone's seen that chart the fastest companies to 100 million of ARR. I wanted to see the big boy version of that fastest to 1 billion in revenue. Obviously. Google, Facebook, all these companies have done.

It very, very quickly.

And I was able to just do one deep research report, then have, you know, turn it into a scikit learn or I forget. I forget exactly what matplotlib chart all within one one chatgpt chat interface. And I was just going back and forth for probably like 30 minutes while Jordy was just watching me fully.

Voice mode too.

Yeah, it was great. Just talk to it and say hey yeah, change the this title, make this bold, make this font bigger. Analyst in my pocket is great. I'm not going to say the name of this account, but I will say I will read the post. It says there is a phenomenon on TikTok where businesses will exploit their young female employees to do an informal ad for their establishment. Have you heard about this?

I don't.

Oh, we have like a junior employee.

I call this exploitation. I call this shareholder value creation. Being on a team and being willing to do things that aren't necessarily directly listed on your.

Yeah, but I mean if it's not within your purview. And you're like, you know, forcing your employees to post about your stupid business or something.

Gun to your head. Make a TikTok.

Yeah. I mean, I don't know. It seems kind of silly, but yeah. I mean, you got to negotiate that in your employment contract. Hey, this isn't part of my job if I don't want to be doing TikTok for you anyway.

And always say no to TikTok ads.

There's this video that went out from Frothless. The money isn't real. I don't know if you saw this video, but it has a very cool, like, retro vibe. I don't even know if we can play it. But it has this very cool, like, retro VHS vibe. And it's making all these points about, like, you know, crypto's the future. Money isn't real. Gold standard dropped. And the whole time I was watching it, I was just like, this feels like an ad for buying gold. Like, you can still just buy gold. And yet it's funny that 90% of this is just an ad for gold. And then at the last second, it's just like, oh, actually buy Bitcoin. Or it's actually, don't even buy Bitcoin. It's like, buy dollar crypto on Solana or something like that. It was like a very odd pitch.

You're getting a meme coin ad.

Yeah, it was a meme coin ad. And I was like, I feel like a lot of the statements you're making are just gold bug talking points, basically. Anyway, Rohit says this image is unironically worth 100 billion in annual revenues. Did you see this? Gemini Advanced. You ask it, what are the best headphones in the world? It's a classic question with a delightfully complex answer. There's no single best pair of headphones in the world. Let's dive into it gives you this big, long text response. And then on the other side, you go to Google and you click and you search world's best headphones. And it just immediately shows you exactly what you can buy. And what was your interpretation of this post? Like what. What do you think Rohit's trying to say with this?

Well, I mean, first, this just goes back to what I was saying earlier is like, the Google dilemma is just. Will be a. A HBS case study within probably five years around disrupting yourself. But not in necessarily a great way. Right. There's some businesses that like, we're going to disrupt ourselves and they sort of launch an iteration of what they're doing but don't kill their golden goose. I mean, I mean I think this is, you know the funny thing here is I think that a lot of consumers the right side just getting shown the pretty picture.

I completely agree. I completely agree. I don't think the LLM response is better here. I don't want to see a wall.

Of text with headphones. Headphones specifically are not necessarily the best example because it's emotional, it's like a part of your outfit. It's highly personality driven. It's not necessarily like I want a.

Visual response and also I want the data can be presented in UI better than just a big long text block. So you look at the bows over here and it has the price, the brand which is important, the star rating, that's also important.

But I mean Gemini could easily just add those sponsored modules.

Yes, but in terms of big block of text, like 4,000 words on the best headphones. That's cool. And I'm okay with the LLM kind of noodling on the question, but I do still think that a lot of people would prefer just to have a visual representation of like here's what we think are the best, here's five others that are potentially in the running in the conversation and here's images, prices, you know, just, just basically write an entire wire cutter report instead of just being. So it just this highlighted to me just like the gap between the current UI for some of these. Yeah, some of these use cases and then text. Yes, text is the universal interface to quote warune. But, but there still is a lot of benefit that comes from just UI and imagery.

Yeah. The interesting thing here is, I mean very easy for Google to just like move the sponsored module into the LLM.

Yeah.

But then the bigger issue for them is ChatGPT being the preferred consumer LLM and growing astronomically.

Yeah. And I mean you imagine that, I mean Google has a decent image generation. I think they have actually a great one, especially with veo, the new video module. But there really is integration challenge in putting all of these together. Like we've been joking about like the PDF upload, like when will like all these different models that you have to choose from, everything's buried in dropdowns and menus. It really would be better like actually integrating all of the different AI models into to one unified search box. Like that's what Google has done over the past 20 years. Right. Like you search for a flight, it knows hey let's go to the flight UI. And it has different it instantiates a UI that's not developed on the fly, it's not coded on the fly. AI certainly has that promise of that, but there's still plenty of, plenty of, you know, business logic routing that can happen in the LLM. Like, you know, every once in a while I'll ask it like generate an image image or make an image of this and it'll just describe the prompt and then it'll say like, hey, do you want me to actually generate this? I kind of got confused. Did you want text or image? And so clearly within ChatGPT there are multiple routes that it can go down. Like do you want me to write code? And then if you say yes, it writes some code. Do you just want text? Do you want me to go out to the web and search? Do you want me to generate an image? There's kind of like four or five like tool usages. Google when you search has like 10 or 15, 50, I don't know, hundreds. Because there's like the Wikipedia knowledge box. There's also the flights, there's images, there's videos, there's all these different things that it can search and turn up in the UI. And the gap between that and where the LLMs are today, especially for some of the less productized AI products really is. It's clearly like a path that OpenAI is marching down, but it's going to take a while.

Yeah.

Anyway, speaking of AI, Sonia Wang from Sequoia is coming on the show tomorrow, but she was recapping the third annual Sequoia AI ascent absolutely banger lineup. Jensen Huang from, from Nvidia talked about token generating AI factories is the new industrial infrastructure. We were talking to her partner yesterday and Andrew Reed. Andrew Reed. And, and we were, and I have this big question of like when will we see the first data center build out for humanoid robotics? Because it seems like until that happens, we're not really on the scaling curve of that technology. We've, we've seen that for LLMs, we starting to see it with self driving cars, but we are definitely, you know, there's a lot of noise in humanoid robotics, but we're not actually seeing like the satellite images of the thousand H1 hundreds all go into one facility.

Jim, Jim Fan from Nvidia was actually at a cent talking on about why simulation is key to robots passing the physical Turing test.

And you would, so you would think you'd be simulating on a huge scale, you'd be doing a massive data center build out and that's something that it can't just be a talking point for a Humanoid Robotics CEO. It has to actually be. It has to be the domain of Dylan Patel and semi analysis. Until I see the satellite photo of your build out, I'm. I'm not fully convinced that we're there. But Brett Taylor becoming CE CTO at age Facebook CTO at age 29 was there. Jeff Dean, one of the most legendary programmers of all time is over at Google. Sam Altman was there. Chase Lockmiller from Crusoe. Really, really insane lineup stacked well.

We'll have to get more of her takeaways from that.

Yeah, the. There's this other poster for moving to Europe. Your student debt will not follow you here. And so Andre says we can weaponize American AI against them and burn. Hobart says sending Europe a bunch of people who have credentials indicating that they're suitable for office work, none of whom understand compound interest should be considered an act of sabotage similar to the Nord stream attack. Just sending our most indebted college graduation ads to Europe. Anyway, we have our next guest. Let's bring him into the studio. We're excited to talk about whoop, break down fitness trackers and everything that's going on today. Welcome to the stream. How are you doing?

What's going on?

Hey, what's up guys? How are we doing?

We're good.

Great. Big day. Big day for you today.

Yeah, congratulations. Yeah, bring it down for us.

No, it's great to be on with you. It's an exciting day for whoop. Obviously we build wearable technology designed to improve health and performance. I've been building this company for 13 years.

Wow.

And I think if you chart kind of the history of the company, it started really around, you know, high end athletic performance. And I think for the past decade you've slowly seen the company evolve from being focused on, you know, the world's best athletes to being focused on a much more jacket general population. And in a lot of ways our launch today, I think crystallizes that. We came out with two new hardwares, the Whoop 5.0 and the Whoop MG 14 day battery life, a whole set of new health sensing, a battery pack that gives the sensor up to a month of charge without needing another charge. And then we, we, we've come out with a whole suite of new features. So we came out with Health Span with Whoopage, which will tell you essentially how old you are. I think it's gonna be a fairly addictive feature based on people's response to it already. We came out with a heart Screener with ecg, so you'll be able to screen your heart with a medically cleared feature that's cleared by the FDA. So you can do ECG monitoring, see if you have AFIB, which affects about 1 to 2% of the population. We came out with a whole new suite of women's health features which is pretty exciting. Menstrual cycle coaching, and then of course, all sorts of new bands and apparel. We announced that we're going to be doing blood testing soon. So what started as.

Wait, you skipped over that. But. But I'm curious to dive deeper. Is that blood testing in people can visit labs or have somebody come to them or how far away from my whoop, being able to takes your blood.

While you're wearing it.

Just give me a little prick. The original.

Yeah. The hardware itself won't be giving you the prick, but we are gonna enable clinical lab blood tests, which will then be integrated into your. Your whoop data. I think a challenge that everyone feels as a consumer who cares about their health is I've got some data over here, I've got some data at a doctor's office, I've got my whoop, I've got wearable data. And none of that information is connected. And we're trying to bring more of that under the same umbrella. So we went from having strain, sleep recovery, health monitoring, stress monitoring. We've now added things like ECG metrics. We came out with blood pressure today, which is a huge deal. And then on top of that, we're now going to be introducing things like blood testing. So when you start putting all of this data under the same roof and you can layer in coaching and analysis different forms of artificial intelligence, it's pretty powerful. What you're going to be able to tell people.

People, that's amazing. How competitive are you and the team and how much does that impact your kind of product development cycle? I mean, I have to imagine, obviously there's a variety of fitness and health trackers out there, but you guys seem to be very clearly at the edge with this new launch and I imagine already working on the next iteration. But what's. What's the culture like internally?

You know, I wouldn't say we spend a lot of time thinking about or talking about the competition, in part because the space for wearables went from actually being incredibly competitive to now having maybe the fewest players it's ever had.

Yeah.

If we were to talk about competition 10 years ago.

Right.

I started the company in 2012, but let's say, like 2015 and we'd be talking about Nike and Adidas and Under Armour and Fitbit and Jawbone and Intel and Microsoft and Samsung and Google. And here are all the other companies that are going to enter the space. And Amazon's coming and Facebook's coming and of course Apple has been in the space. So today it's really only like, like three or four companies that I think are playing a big role in pushing health monitoring. And I think we got this far by having our own point of view on the space. We've done things a little differently. We built a device that doesn't have a screen. It really just focuses on health monitoring. It doesn't do a bunch of other things. It's not a tool that you can get emails with or call an Uber with that. It's really focused on health monitoring. So, you know, I think competition's real. I think you want to be paying attention to the market. But I wouldn't say that we spend a lot of time talking about competition. Now, that doesn't exactly answer your question because you asked if we're competitive and I would say we are competitive. You know, we like to win. When Amazon knocked us off in. So Amazon met with us in 2018 to invest in the company, never invested, came out with a copycat product in 2020 called the Amazon Halo. And we were so competitive then towards them that their forwards on every circuit board we manufactured, we wrote, don't bother copying us, we will win. And we literally. That message was actually directed directly at Amazon because.

Because you knew they were going to reverse engineer it, right?

Yeah, we knew they were taking our product apart. And so there was sort of like an inside joke that of course they were going to have to see that message.

That's so, that's so demoralizing. You know, you're like, you're one product manager of 300 working on Halo and you just like discover this. You're like, guys, I have some bad news. We're being, you know, we're being sent messages. Can you talk about the. I'm particularly interested in the Health span feature. I've tried a variety of different various testing companies over the years I'm an investor in.

Famously, your biological age is like, what, five years old? Three years old?

Yeah, yeah, yeah. This is our joke. There's this kind of competitive dynamic. If you're doing anything related to biomarker workers that like, you would just drive it down eventually, like, they're going to tell me I'm, you know, actually negative one. Like, I'm still in the womb biologically. But how do you guys kind of work? What does that product actually look like in practice? And what was. What was important to get right there?

Yeah, it's a feature we've worked on for a few years now, and it's called Health Span with Whoopage. And it really has two key numbers. The first is your WHOOP age, which is essentially what we define as your. Your real biological age, which is obviously different than your. Your chronological age. And then it's got your pace of aging, which ranges from negative 1x to 3x. And. And the lower, the better for that. And those two numbers kind of play off one another. The. The age itself is based on six months of data.

Data.

And the pace of aging is looking at your last 30 days. So you kind of get a sense for, have my recent behaviors been positively affecting my. My, you know, my overall health? And we developed this feature in partnership with the Buck Institute, which is one of the top institutes for longevity in the world. And in particular, we worked with an expert named Dr. Eric Verde. And we looked at a universe of all the different variables that are related with all cause mortality. And we looked at a pretty large universe of different metrics. But ultimately we settled on nine that most closely correlated with all cause mortality or were leading indicators of all cause mortality. And those include the hours of sleep you get, your sleep consistency, exercise, as measured as, like, the time you spend in heart rate zones, your steps throughout the day, your VO2 max, which is a huge one, the amount of time you spend strength training and your resting heart rate, and so lean body mass. So we took each of these metrics. We actually show some of the research that is related to each one of them. And when you get the feature, you can go down every single of those nine metrics and see the degree to which it's adding or subtracting from your age. And in a lot of ways, this is. It's probably one of the first times Whoop has been really explicit on how good you are at a specific metric relative to your age and, you know, your gender. And so people have found it very actionable because, you know, maybe you're great at these five things, and these four things are making you older. And so now you know what you have to work on.

Yeah, very cool.

I have a question about meta Ray Bands. Partner with luxottica, Ray Bans. Have you ever thought about partnering? Jordy was joking that you should partner with Patek Philippe or potentially Vacheron Constantin or maybe Audemars Piguet. But have you ever explored that? Do you see it in the future? What do you think on the partnership side?

We're certainly open to different partnerships. We haven't done a lot of them to date. I think there's a few different categories of partnerships. So one would be around just the whole universe of accessories and apparel that Whoop has. Actually, one of the things that's quite unique to Whoop is, is it's the most customizable wearable on the market. So you can create 70,000 different types of bands and looks and feels for the product. I mean, for your audience that's watching this, that's not familiar with the product, like, I'm just showing it right now, but, you know, these bands come off very easily and you can swap in and out all sorts of different colors and looks and feels. We've got, you know, everything from leather to cashmere to, you know, an everyday silicone. And so we are looking at different partners in that category where maybe we'll do specific band developments with someone. The sensor can also be worn in different locations on your body, which is something that's unique to whoop. So you can wear it on your upper arm, you can wear it in your boxers, you can wear it in shorts, women's bra, underwear. And so today, Whoop makes all of our own apparel as well. Well, but that's, as you can imagine, another area for potential partnership. Another category, I would say, of partnerships is around data. And so, you know, WHOOP obviously has a unique set of data. And then, look, there's other products on the market that have unique sets of data. A very simple example of this was we partnered with Withings, you know, about nine months ago, and, you know, everyone who has a certain withing scale, when they step on it, it goes straight into the Whoop app. It updates their profile. The, the weight, the lean body mass would feed into your health span. So things like that, that just feel really seamless. You know, you asked about like, Meta and Ray Bans and those sorts of things. I think from like a data display standpoint, you know, we'll go where the eyeballs go. Right. Obviously, today everyone's got a smartphone. So as a consequence, we have an iPhone app and an Android app. Right. If one of those platforms emerges as being really popular, one of these AR platforms, I could certainly imagine Whoop data appearing there. I think at the end of the day, we view ourselves as a tool for collecting this data and helping explain it. But we are open minded to what the platform is that you Analyze it on.

That makes a lot of sense.

Jordy, last question on my side and then I need to go get one of the new ones. Very curious now how, I'm assuming, since I imagine the majority of your revenue is really on the software side, does that mean that the terror, like, and I imagine a lot of your manufacturing is in Asia. My uninformed assumption is that you guys aren't terribly impacted by this, given that, that I imagine, you know, the real value that people are getting is from sort of the. On ongoing sort of membership. But talk about that and maybe how you're kind of planning around, around the tariffs.

Look, I mean, we, we are impacted by it, no question. We manufacture some products in, in China. We also do some manufacturing in Mexico. We've got accessories and apparel that we source around the world. So, yeah, look, the tariffs have impacted us. You know, I think for now we're, we're taking it on the chin rather than passing it to consumers. And, you know, my expectation is that some of this will evolve. And look, our standpoint as well is, all right, we have to have a manufacturing policy that adapts to where the US Is and US Relations with China and all of these different things. So I would say we're looking at a few different options in that category, but we haven't done anything yet that directly affects the consumer in a negative way. And at least I'm happy with that.

Yeah, that makes sense. Well, this is exciting.

Yeah, congratulations. Where can people get it?

Whoop.com.

Let'S go, baby.

And I just want to say congrats to you guys, I think, on creating a cool new category in this show. I've enjoyed seeing snippets on, on the Internet and listening to you guys. I appreciate what you do.

Thank you.

Thank you. Well, come back on whenever you have news.

Yeah, we'll see you soon.

Yeah, we might, we might start. We might have to start flashing our health spans on the Chiron so that it works well. We track our eight sleep scores daily with the audience to sort of keep ourselves accountable. But just, we want to.

Just because the audience wants that.

Yeah, yeah, we're going to add every single health metric because we want, we want to do this for decades. You can't, you can't stream for three hours a day without taking your health very seriously.

Yeah, I think like every 30 days, just kind of a live update on your age, your health.

That's great.

That's what the people need.

Yeah.

Wait. Doing the show three hours a day aged you 10 years in three months. What happened, Jordy?

Yeah, hopefully not awesome. Well, congrats to you and the team on the line and we'll talk more soon.

We'll talk more soon. Thanks so much. Bye.

Cheers.

Fantastic. Gigastream I think we're over four hours now. Getting close to four hours actually right on the dot. So thank you. If you watch the whole thing. Thank you. If you watch clips. Thank you. If you bought from any of our sponsors.

We have another great show tomorrow. I'm looking forward to it.

It's going to be Friday and that means it's rough. It's the worst day of the week.

It's our last day of podcasting for the week.

Yeah, but we got it. We got another week next and then another week.

Monday always comes around.

Yeah.

Thanks, folks.

Thank you for watching. We'll see you soon.

Bye.

Have a great day.