Meta–Scale AI Deal Tensions, Ken Griffin’s Next-Gen Finance Empire | Arielle Zuckerberg, Mike Maples, Andrea Hernández, Farooq Malik & Charles Yoo-Naut

You're watching TVPN. Today is Tuesday, September 12, September 2, 2025. We are live from the TVPN Ultradome, the Temple of technology, the fortress of finance, the capital of capital.

Hello to chat.

There are so many people chatting right now. Thank you for being here.

We're sorry for taking yesterday off. Yeah, it wasn't our choice.

Brutal. Brutal. But thank you for being here on Tuesday. We are happy to hang out with you.

So good to be back.

We have a packed show, tons of stories, tons of podcasts, posts, tons of news, tons of guests, tons of everything. We are newsmaxing and we are kicking it off with a debate that me and Jordi got into earlier today and was burning up the timeline over the weekend. We'll kick it off with this post from Dilip Rao. Chat, is this true? I'm hearing scales. Alexander Wang is already out the door. Swick says, please tell me this is a joke.

I mean, this was totally fake news.

Shlom says, seems like you saw this and misread. Yes. So this came from a TechCrunch article in the TechCrunch article said Scoop. A scale executive Alexander Wang brought over to help run msl, has departed Meta after just two months. And depending on how you read that, where you put the commas, very different readings.

Yeah.

So a scale executive, Alexander Wang, he was brought over to help run msl. He has departed Meta after just two months. Or it could be a scale executive that Alexander Wang brought over to help him run msl. He's left. Who knows? We'll find out. Well, the news is that it's not Alexander Wang that left. It's someone who was on the team, a former executive. Former executive.

Which is very normal.

Yes. Yeah. I mean, they brought over. Yeah. Also it's like, was it an acquisition? Was it an acqui hire? I was going back and forth with the team about this earlier today. Like, how do we even characterize it? It's one of those zombies. I just call it a trade deal.

One thing we know, TechCrunch loves a spin. They like to spin non stories. They like to put things in the spin zone.

Yes.

We put things in the truth zone. They put things in the spin zone.

There was one guy who, remember, I.

Mean, for anybody that missed it, we had Arvind on from Perplexity and he made an offhand comment about ads and browsers. And then TechCrunch ran a story that was like, perplexity will put ads in its browser. And he was like, wait, like that's not what we, it was like a wide ranging conversation. He said. Yeah, it was a hypothetical.

So yeah, we were talking about the nature of advertising and AI and stuff. Anyway, yeah, I mean there was one guy who clearly like was working at Scale, got like Zombie Aqua hired, went over to MSL and then like wanted to start a company and was probably like already thinking about starting a company.

And made the most dramatic post and made it.

Made a super dramatic post.

But yeah, he made himself the main character.

Wait, you think it was his fault? I thought it was. Other people were kind of putting that on him.

Oh, I just thought the way that he worded it was like, yeah, I had the opportunity to be basically running it around here when I decided to take my talents somewhere else.

Yeah, there's a lot of this going on. People are spinning narratives left and right, left and right. Anyway, let me tell you about ramp.com time is money save. Both easy use, corporate cards, bail payments, accounting and a whole lot more all in one place. I knew you were going to hit the Eagle. I was very excited to hear the eagle. It's been too long. So the cracks are forming in Meta's partnership with Scale AI, says TechCrunch. It's only been since. It's only been since June that Meta invested 14.3 billion in the data labeling vendor software.

Invested?

Yeah, invested. So it's not an acquisition, it's not an acqui hire. It's a trade deal. It's basically a trade deal. That's how I think about it. 14.3 billion for less than half the business equity. A big dividend.

49%.

They just wanted some of the scale.

49% was a nice, nice number.

Yeah, they just pull it out of a random, random. It's just random. And so several of the top executives left Scale to go run meta superintelligence labs. That's MSL. But says TechCrunch, the relationship between the two companies is already showing signs of fraying. At least one of the executives being brought over to help run MSL scale AI's former senior vice president of Gen AI product and operations, Ruben Mayer, has departed Meta after just two months with the company. Two people familiar with the matter told TechCrunch. Mayer spent roughly five years with Scale AI across two stints in his short time at Meta. According to these sources, Mayer oversaw AI data operations teams but wasn't part of the company's TBD Labs, the core unit with in Meta tasked with building AI.

Superintelligence where top they made MSL and TBD and like the.

Just to confuse TechCrunch reporters.

Just to confuse.

Yes, yes, Journos. Yeah, yeah, it's entirely the 40 chest that's going on. And so after this, after this article was published, Mayor reached out to TechCrunch and was like, hey, you got the story wrong. My job was to set up the lab with whatever was needed rather than data, and I was part of TBD labs from day one rather than being excluded from the core AI unit. Mayor also clarified that he did not report directly to Wang and was very happy with his meta experience. Was leaving for a personal matter. So.

So again, it's hard to read too much into this article, but the bigger.

The bigger question is, like. Like, TechCrunch has their angle. And then the timeline was kind of in turmoil. I feel like the timeline's always been rooting against Alex Wang, and there's a few reasons. So I wanted to go through, like, the bear case for just the question of, like, was meta buying scale AI the right move? Like, did they overpay? Will we look back on this as a great deal? Because when we look back on Instagram, we're like, that's one of the greatest acquisitions of all time. WhatsApp also, great acquisition. Very expensive at the time. Both very expensive at the time. At the time, even Oculus, I was thinking about it and I was like, oculus VR, super expensive, multi billion dollar deal. And the level of headset adoption, I mean, they didn't even have, like, a consumer product at that time. It was like dev kit still. And obviously retention was super low. People would churn off of them. And they still do, even, what, a decade later, like. But you.

But it was very important to Zuck.

Yes. And, And. And VR is a tech wave. That's going to. That's going to happen at some point. We know that the technology is going.

To get there where Zuck's not gonna miss the next platform.

He has his surfboard, and when that wave comes, he's ready to surf. Did you get any surfing in this weekend?

I did, I did. I did.

Describe your surfing experience. Can you do, like, 360s off the back and stuff? Can you do a backflip?

Can you do a barrel roll? No back flips, But I went surfing with a tvpn, a technology brother, Steve, founder of Clock Tower Capital, and he saw me do a couple errors. You could do errors? I didn't land either of them.

But you were telling Speeder, like, he has to get barreled. Did you get barreled?

It wasn't Barreling this weekend? It wasn't barreling this weekend, but it was, it was, it was, it was fun. There was definitely swell. I got quite sunburned a couple days in a row.

It's fantastic. We should one day stream your stream your surfing endeavors and we should do it on Restream. One livestream 30 plus destinations, multi stream, reach your audience wherever they are. People have been asking, will TVPN expand to other mediums? Will you do other things? And it's yes. Surfing live streams.

That's next.

And you, if you're surfing and you want to live stream, head over to Restream. There's a bunch of questions in the chat we should get to at some point, but let's keep talking about this Scale AI stuff. So Zuck has a surfboard with Oculus VR. The question is, what's going on with Scale AI? Because it's not necessarily an obvious compounder where like with Instagram and WhatsApp, it's like you have this network effect. It's just going to keep growing, keep growing, keep growing. You can grow the user base. The user base never goes down. The business never gets smaller. You just run more and more ads and it just prints, prints, prints. Right. Buying a growing social network that has strong product market fit. Easy, easy to justify at any price. Basically.

Scalia, well, Elon wanted to get out at one point.

Anyway, for the most part.

But if you can buy it and then lever it up and then merge it with a foundation model lab.

So scale AI does not have that obvious winner take all network effect, that.

Very real competition, extremely real surge, which was the bootstrap scale AI that was Merkor, which was emerging.

Isn't there another one? Garrett at handshake.

Handshake label box.

There's a ton of these companies.

There's a bunch of players.

And so the reason is because it is not a monopolistic market by default, you might be able to make it one. But it's tough to justify. It's tough to think that, oh yeah, it'll just continue to compound. And then also if you're AGI pelled, you don't believe that basic data labeling tasks are going to be done by humans in the future. Like if you have a bunch of tasks that are like, oh yeah, like just, you know, what do you go to scale AI for? Oh, RLHF this. Tell me if this is a good answer. If you're AGI pill, do you think that the next version will be able to do that level of task perfectly?

Yeah. And the expectation if Scale had stayed fully independent would be that they would keep having to bet the company on these new sort of eras.

And that's sort of the story. I mean Skale started as a data labeling company for self driving cars and then eventually that kind of hit takeoff where there was not that much more business to, for Scale to do, I believe because Waymo had gotten all of the data and Cruise has gotten the data and Tesla had gotten like the base level data and then the RLHF boom and the LLM boom happened and, and Scale was able to move over to that and then all of a sudden they were having their best, their best years ever. And so the business was kind of like up and down, very much like, oh, they have a second act? Do they have a third act? Chunky Y, very high, high volatility. And so as the market shifts and more and more expert like, like as it shifts to more of these expert data collection processes, like what we see from Merkor, Scale potentially becomes less and less relevant. It's not like an obvious, just beneficiary of every next wave. You have to keep kind of reinventing the company. And so there's.

And they, at some point they stop working with OpenAI. Correct?

Yes, yeah, yeah, they stopped working with OpenAI and then post metadata deal.

That's part of what created the opportunity.

Post meta deal. It seemed like Microsoft and Microsoft and Google both pulled back from working with Scale. And so like the core Scale business doesn't seem like it's just like endlessly compounding. So you really can't Underwrite this like $14.3 billion investment purely on the basis of Scale's business.

Potentially. They're not trying to make money on the investment.

Yeah, maybe. Yeah. It seems like they need a mad scientist for their lab and every other AI lab.

Or they need a deals guy.

Yeah, or deals guy. Exactly. So OpenAI has Mark Chen, SSI has Ilya, DeepMind has Demis, Anthropic has Dario. Each leader has a different shape and style, but they're all capable of rallying top AI researchers and building teams of missionaries. Alex Wang is unproven here. So if you believe that the best talent magnet wins, it seems like a bad deal. And that's kind of the bear case. Now the bull case is that yes, metaboling Scale AI is a bit pricey, but ultimately it was a good decision for the company. Here's why. Let's review the landscape of big tech's AI efforts. Google has DeepMind firmly on the frontier. Microsoft has GPT5 also frontier. Amazon's a bit behind, but the core business doesn't seem very threatened by limbs and video benefits from basically every outcome. Right now, Apple acts as a window into AI, probably not too threatened. Meta feels like it could benefit liquidity, benefit hugely from getting to the Frontier, but it doesn't have an obvious dance partner. So what do you try and do? You go down the list and you try and buy every company or hire every researcher you can, hence the rumors that Zuck tried to buy ssi, tried to hire Mark Chen, et cetera, et cetera. Right, because it's super high. I mean, we saw that image of like some Wall street investment bankers, like did like a kind of some of the parts valuation of Google and just DeepMind was worth like $150 billion. Right. And so if you're thinking like, okay, if I have my lab and it's adding all this value all over the place, is that worth $200 billion to my market cap? Like, absolutely. Right. And so you try and do that. So at the top of the list you have something like, you know, assemble a dream team. Get Ilya, Mark Chen, Demis, get everyone. Just put the OG OpenAI team and the DeepMind team together at Meta and like, you win. Right. But that's obviously not on the table. There's a bunch of reasons why you can't make that happen. There's economic reasons, there's interpersonal reasons, there's some ideological reasons. But Alex Wang isn't that far down list. And so, yes, he hasn't led a real AI lab that's trained a popular big foundation model. But if you look at his trajectory, all of a sudden it becomes, I can be a lot more optimistic about it. So he's 28 years old, he's a fantastic communicator. You've seen him on, on every podcast. And he clearly communicates very well about the Avon.

One of the few heavy hitters that's been on the Avon.

Obviously you joke, but he was on Theo Vaughan really early and he tells a very convincing story. And he's actually able to communicate to like to, to both insiders and outsiders, I think. And he's genuinely been at the center of the AI boom for his entire career. But he wants to go bigger. He's built a great company that easily could have cash flowed hundreds of million dollars over time and continued to serve the training data market. But getting further into the action that's happening at the big labs was probably not in the cards. If you stayed at Scale. And so teaming up.

Yeah. And people, people would push back on that and say that that scale was losing real market share to Surge and other players who had a reputation for having higher quality data.

Losing market share, but still like so many big contracts that if they just went like, like to like weaker and weaker clients and just like held on and just had high margins like I.

Built to die, basically.

Like, I do think like the, like the run out the clock value on that company is definitely like hundreds of millions of dollars every year. It's just such a big market. But that's clearly not what, what Alex wants to do. He's 28. He wants to go bigger. He loves being at the center of AI and wants to work on interesting huge problems.

Now he has will have, does or will have more compute than pretty much, pretty much everyone.

Like the latest cluster that Zuck's trying to build is, is, is supposed to be just a couple percent over the next biggest cluster. So he will have the biggest. And so I think that you, when you look at, at Alex Wang, you see someone who's been through like the Gartner hype cycle of training data. Right. It's like, wow, we are teaching cars to drive. This is incredible. Then oh wait, like they actually don't need that much more data. And then like, oh wait, like need incredible amounts of RLHF data. And then like, oh wait, so he's been on the up, up and down. He's. So there's, there's a bunch of different takes here, but let me continue. So there's also the rumor that Scale AI isn't fully delivering all the data that MSL to train their next model. But the reporting here is a bit questionable. I don't think that the scale acquisition was ever fully underwritten against the value of the training data business as we discussed. So the, and the AI race is so aggressive that every company is grabbing every possible resource. Not only is Meta using other data providers, they also just signed a $10 billion cloud deal with Google.

Yeah.

So this idea of like, oh, demand is outstripping supply. Oh, they did one deal with scale. That that means that they shouldn't do a deal with Mercour or they shouldn't do a deal with, with Surge. Like, no, they're going to do deals with everyone.

I think. Yeah. All it says is that it was primarily an act. Like an acqui hire.

Yeah, an acqui hire of the team and a bunch of the people. And mostly it's a bet on Alex Wang. And so I think that the FUD over the departures is overstated. Right now it doesn't seem like it's an exodus. They hired a ton of people. There's been rumors that like one person was thinking about leaving but then wound up staying and then one person left, but they said they were never really planning to stay and then another person left but clearly to start a company. So it doesn't seem like there's some sort of massive exodus. And basically it just comes down to the value of developing an in house AI team that's like DeepMind. It's that team. If it works and if they build it out, the value of that team is immense, probably in the hundreds of billions of dollars. And so there's inevitably going to be bumps in the road. But at the end of the day, Zuck is just betting on the most successful entrepreneur that Gen Z has produced thus far. And it seems still reasonable that even if he's not entirely a researcher, he's deals guy. You have him and then you have Nat Friedman who's able to, who's worked with Ilya, and you have the pieces of the team to put together the right amount of researchers and engineers to actually go and build out a Frontier capability or near Frontier.

It's an all star team.

It's close to an all star team. It's not the all star team like the all star team is Ilya and Demis and Mark Chen. But like that's not happening. It's just never going to happen.

Yeah. You know why I have this out?

Why?

OpenAI is buying product testing startup Statsig for $1.1 billion.

Statsig?

Haven't heard that name in a while.

Who did?

Statsig Statsig, founded in 2021, builds tools to help software developers test and flag potential new features. Services have been used by employees at OpenAI, Eventbrite, SoundCloud and other firms. According to Statsig's website, Statsig raised 100 million in funding in a funding round earlier this year, valuing it at 1.1 billion. So interesting. I guess they're just getting bought out at the last round price. As part of the acquisition, Statsig's founder and CEO Vijay Raji will join OpenAI as chief technology officer of applications. He'll report to Fiji Simo, the former Instacart head who recently took over CEO of apps at OpenAI. In a statement, Simo said Raji would help companies and developers use OpenAI's technology to build safe applications that empower people. So anyways, all stock acquisition. Nice pickup for OpenAI and they're taking the product. They're taking the whole company.

They're taking the whole company.

It's a proper acquisition.

We love to see it very, very rare. Tyler, what was your take on the TechCrunch FUD around MSL? What do you think?

Okay, so I think first, yeah, there's. I think there's way too much hate on Alexander Wang on the timeline.

Yeah.

I think also maybe interesting way to think about, like, the scale thing is.

Like, do you think that's. Do you think people hate on him just because he's not an AI researcher?

Yeah, I think there's some sense of. It's like, oh, he's like, kind of an outsider. Like, he's like. Has this, like.

He's like a business.

I think part of it is he made. He made a billion dollars doing something that wasn't extremely technical.

Technical.

Yeah.

It's like labor arbitrage, right?

Yeah. Anytime you have a young person that has massive success.

Yeah.

People figure out a way to kind of poke holes in it.

Yeah. It's like people are saying, like, oh, scale is just a wrapper on, like, Vietnam or whatever.

Philippines.

Philippines.

Philippines. Yeah.

But I think rappers all the way down.

Like, I think a good way to think about the scale thing is, like, maybe it's just, like, the people at Scale AI just, like, have very good taste on what is good training data. Like, they've seen, you know, it's like, you know, driverless cars and.

Yeah, like, what actually works.

Yeah, it's like. Like, they have good taste on, like, this is actually, like, good data. And then if you're a big company that has a ton of data, like, meta, that's, like, actually very, like, useful.

Right.

You have these people who have very good taste. Stuff like, okay, obviously within Meta, within, like, Instagram or something, there's a, like, a massive amount of data. Some of it is clearly useful. Some of it's, like, not useful for training a foundation model. Just like, that is something that is worth a ton of money.

Yeah.

Yeah. So Zuck went to Alex and basically said, it's time for the dragon and the elephant to dance together. The dragon and the elephant.

That is the best quote ever.

Who said that to who she said that to? Modi says it is time for the dragon and the elephant to dance together.

And wasn't Modi meeting with Putin? So he's like, the elephant and the bear and the dragon.

Oh, I don't know if there was another. I don't know if there was the.

Elephant and the bear and the dragon had a tea party this weekend I.

Think Luke Metro posted. I just know that this line is doing numbers on SF Hinge right now.

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Yeah, I want to read the About.

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Thank you to Turbo Puffer for making this possible. This weekend Elon Musk revealed the master plan number four for Tesla and in the video Nick Cruz Patain shares Tesla revealed a potential three row cyber SUV design in their Master Plan 4 video. This could be a true competitor to the Escalade, Range Rover, Navigator, et cetera. Would you buy a cyber suv? And I've been pushing for this for a long time. I actually went back and looked at the Tesla Master plan number one. And number two, if you go to.

Tesla master plan, how many EM dashes did those have?

I don't think those had very many. So the, the latest, we'll read through some of the Tesla Master Plan 4 that dropped over the weekend. It featured 14 EM dashes. It didn't. The EM dash thing is like kind of a joke because as I read it, it read like a kind of. It was a lot staler than. It had a lot more like press release vibes than previous master plans. But it didn't read as AI generated to me. It just read as like corporate speak basically and kind of like high level and abstract. I actually had chat summarize it. Tesla's Master Plan Part 4 is a high level manifesto centered on integrating AI into the physical world via robots and autonomous transport. All powered by cleaner, smarter systems. It casts a bold vision around sustainable abundance, but delivers very few concrete actionable targets or roadmaps, marking a departure for the more structure from the more structured master plans of the past. And so if you go to the first Tesla Motors master plan, Just between you and me by Elon Musk, he wrote this in 2006 and it's a remarkable document because at the end he actually sums it up very well. He says we're going to build a sports car. We're going to use that money to build an affordable car. We're going to use that money to build an even more affordable car. While doing above also provide zero emission electric power generation options. That's exactly what they did. They built the Roadster and it made enough money and generated enough attention that they were able to build a Model S which was more affordable than a high end sports car. And then the Model S was able to finance the Model 3 and then of course the Y and the X were kind of spin offs of those platforms. And so he says don't tell anyone. And you know, the ultimate goal was to go after the Honda and the Toyota Prius and those cars. And he was completely successful. Then it was ten years later he writes the Master plan part two. And so the first one, the original master plan, create a low volume car which will necessarily be expensive. Use that money to develop a medium volume car at a lower price. Use that money to create an affordable high volume car and then provide solar power. No kidding. This has literally been our website for 10 years. And so at the end, in short, the master plan part do is so.

Crazy that you can lease a Model 3 for $299 a month. So you've seen how would you.

Some of these are.

Look at it like would you like one chat GPT Pro plan or a car?

Yeah, it is insane, but it's getting even crazier. So the Wall Street Journal has an article today about EV deals that boom before this deadline. So tax credits are expiring for EVs.

And we're going to get naturally aspirated V12 credits before the end.

Yeah, we need V12 credits. At a Kia dealership on Denver south side, a steady stream of shoppers navigate around noisy renovation work in search of electric vehicles with super cheap lease deals. Guess how cheap these lease deals are? How cheap? As of last week, this Kia dealership offered to lease the small niro EV for $40 a month before taxes. The EV6 lease was being marketed for less than $100 per month. And the 65,000 3 row EV9 SUV can be had for $189 a month before taxes. Can you imagine getting a car for $40 a month? That's so ridiculously cheap. Okay, and so there's some really weird.

It's a bubble.

It's not a bubble. It's like the popping of a bubble. It's like the end of a bubble. It's like they overbuilt and they made all these and no one wants them.

And so they're giving them away.

They got. But yeah, very, very bizarre times in the, in the EV market. There is a, there is an interesting wrinkle that I was listening to. One of the, a couple of the Tesla engineers did Jay Leno's show recently and they were talking about how the EV tax credit's going away. So you can't just take money off if you buy it, but if you get a loan, an auto loan, there is an interest tax deduction for EVs now or for American made vehicles. And Tesla's the most American made vehicle. And so you can still deduct something like, I don't know, 8 or $10,000 off your taxes. So there still are some incentives for Tesla. So it's not, it hasn't gone away completely, but if you buy cash, it's not an option anyway. The master plan, part two, number one, create stunning solar roofs with seamless integrated battery storage. It's kind of happened, but not as major as I feel like it should have. It's still kind of early days there. Two, expand the electric vehicle product line to address all major segments. And so that obviously foreshadows the truck, but it also foreshadows the full size suv, which I think we're teasing now, but it should also be, we need a convertible, we need a minivan. Like we need, you know, every major segment means every major segment, I think. I don't know.

What should Tesla make? Prefabs?

Prefab homes?

Yeah, I don't know. I think, I think, I think Elon could sell homes. Maybe the Elon army could get pretty into just buying a piece of land and throwing, dropping a little electric box on it.

Live in the pod.

Live in the pod, potentially.

Then this is where self driving comes in. Develop a self driving capability that's 10x safer than manual via massive fleet learning. I think that's going very well. And then step four is enable your car to make money for you when you aren't using it. Isn't that crazy? 2016, he said that, he said like you buy the car and then you're gonna be able to put it in the robo taxi, like army passive income. Very, very early. And then part three comes out and it's hilarious because part three switches from like a, a, like the first master plan is probably like, I don't know, like a two page blog post. Very readable, you can just kind of cruise through it. There's one table, there's a lot of summaries. Master Plan Part 3 is a 41 page PDF with like a bunch of diagrams and like all these crazy things. It's so much more detailed and it goes into like trucks and all this other stuff that they're trying to do. It's a pretty, pretty remarkable document. And then now he is into Tesla Part four. Part four, which is much more high level. Talking about sustainable artificial intelligence. As the influence and impact of AI technology increases, the mission set forth in Master Plan Part four should come as no surprise. The next chapter in Tesla story will help create a world we've only just begun to imagine and will do so at the scale we have yet to see. We are building the products and services that bring AI into the physical world. We have been working tirelessly for nearly two decades to create the foundation for this technological renaissance through the development of electric vehicles, energy products and humanoid robots.

We need a poly market on if Tesla will eventually merge.

That does seem like a logical end state. Here innovation removes constraints. It's all very high level. I mean I think a lot of the, a lot of the big reveals have kind of already happened. Like you know, the idea of robo taxi fleet, the idea of autonomous or Optimus, the autonomous.

Does it cover humanoids? Yeah.

Optimus, our humanoid robot is changing not only the perception of labor itself, but its availability and capability. Jobs and tasks that are particularly monotonous or dangerous can now be accomplished by other means. In this way, Optimus's mission is to give people back more time to do what they love. And so he walks through a bunch of different pieces of this.

You just want one thing from Optimus which is to keep the Tesla diner open 24 7.

It is crazy. So we work just a couple blocks away from the Tesla diner. And so I drive past it every morning and when I think of a diner, I think of a New York City diner that's open 24 7. And every day I drive by it and it's closed. And it's so crazy. I mean I guess it's like, it makes sense because it's like still like early days and kind of a marketing stunt. But really they got to keep that.

Thing, keep it going, keep it humming.

Anyway, if you're designing your next mission document, do it in Figma. Think bigger, build faster. Figma helps design and development teams build great products together. You can get started for free@figma.com on.

The Tesla Dana website. It says 24 7.

It does, yeah.

And I'm pretty sure at least the first week it was open 24 7.

Okay, so we should go over there spreading fake news. Yeah, but it also looks incredibly empty. At least when we drive by.

I mean that's just L. A though that's probably, that's not his fault if it's, if it's there.

We'll go there for breakfast tomorrow.

Yeah, maybe I'll stop by on the way at 6am and see if it's, if it's actually open. It seems. I mean there are definitely people there like cleaning and stuff. So maybe it's open. But I mean there are truly not that many places in Los Angeles where you can get a burger at 3 in the morning. Like LA is not the city that never sleeps by any means. Anyway, Citadel securities is.

There's some interesting highlight here. So Power at power Bottom. Dad sucks quoted our post announcing anthropic series F and says SBF got so aft. Man, I just did the numbers quickly. SBF stake in Anthropic or not SPF RTX's FTX's stake would be worth just under 15 billion today. So plenty to plug that hole. So anyway, duration mismatch problem, I guess in. I guess Gavin Newsom went on pivot and says he's going to be releasing a meme coin to challenge the Trump token.

Is that real? He said that? I wonder if he's like trolling or something. It feels very off brand. I don't know.

You never know anymore.

I haven't really been following the Gavin Newsom thing. Brandon was saying that like, he's been like kind of trying to mirror Trump in terms of like if Trump does something crazy, he'll try and do something else that like kind of matches the.

Energy, matching the crazy energy. And it's. I mean, he's doing numbers.

It's a bold move, Cotton. See how it plays out.

Yep, I guess. Trump is was slated to do announcement at 11:11am Pacific. He is 43 minutes late right now apparently. So hopefully he can get get on to that announcement soon. Citadel securities set to pay an average employee 2 million a year in the first half of 2025. They did 5.7 billion of revenue, 2.6 billion in net income. They paid out 1.8 billion in comp, and they have 1800 employees. Their CEO's name is Peng Zhao. He has a PhD in statistics. So turns out being good at math is good for your income.

19 years at Citadel. Look at that quant researcher in 2006.

There was something else about, I think Hudson River Trading. Overall profit at Hudson river trading was 3 billion for the first half of the year, which is higher than Citadel Securities. 2.6 billion in net income in the first half of 2025.

Wow.

So they are putting up some crazy, crazy numbers.

Well, Ken Griffin's on the COVID of Barron's this weekend. I thought it'd be fun to read through this because he actually gave some choice quotes in here.

Is this not a silly, kind of a silly picture of him? Yeah, I'm not, I'm not.

It looks pretty heroic. I think it looks good. I mean, looking up.

I mean, the angle is fine, but I'm just saying they kind of did him. They did him a little better.

What about it? The coloring of the cheeks or something. I think it looks good.

I just. I don't know. I think they made him look a little bit silly.

They should have given him the Gigachad filter and. Yeah, made his jawline a little bit.

If you're gonna draw somebody, at least make them a Gigachad Yeah, I would.

Have liked to see more shoulder definition here underneath the suit. It looks great. The most successful companies of Wall street, on Wall street have been built by those with relentless ambition and a strong wind at their back. Decades of deregulation helped growth minded CEOs turn firms such as Morgan Stanley and Bank of America into behemoths. More recently, financial entrepreneurs have leveraged booming private markets to create the likes of Blackstone in private equity, Bridgewater in hedge funds and injuries, and Horowitz in venture capital. Now a somewhat stealthier trend fueled by the explosive growth of technology and finance is behind a new wave of digital first powerhouses such as Interactive Brokers Group, Susquehanna International, Jane street and especially Citadel, a burgeoning Wall street empire controlled by billionaire Ken Griffin. Citadel is a two headed business beast. A two headed business beast consisting of Citadel LLC, a $68 billion hedge fund operation best known for its top performing multi strategy flagship Wellington and Citadel Securities, a sprawling market maker that facilitates and engages in the trading of stocks, derivatives and increasingly bonds. Citadel Griffin chose the name because it denotes a place of strength and protection. Fantastic nominative determinism. If you're picking the name for your business, pick something strong like that.

Yep.

He says is defining the prototype of the next gen bulge bracket firm. Except that Salt. Except that Citadel isn't that bulgy with just a fraction of the employees and overhead of the traditional Wall street firm. As of now, the boss is happy. Quote. It's. It's incredibly satisfying to run one of the world's most successful hedge funds and to witness the transformative impact of Citadel securities on the capital markets around the world.

Griffin says great quote.

Yes, I'm proud of that. Taken separately, first hedge fund, Citadel. Huge deal.

This is how you do an interview. This is marketing.

Yeah.

It is incredibly satisfying to run one of the world's most successful hedge funds and to witness the transformative impact of Citadel securities on the capital market.

Do you care to comment? Yes, I will take the Self Glazinator 2000 Wellington, not related to Vanguard's Wellington Fund or Wellington Management, has been a superstar producing annual average returns of 19.2% net of fees since inception in 1990. Nearly two times the market and I believe so. A million dollars invested in the fund now is now worth $452 million. Insane. The other crazy thing is that I'm pretty sure they had a 50% drawdown during the mortgage crisis. So in 2008 or 2007 I think they went down 50%. They went from like maybe like a $20 billion fund down to 10 billion or something like that.

Ran it back.

And I remember one of the traders there, because I interned there, and he gives the story of, like, during the. During the crisis. He. He was trying to, like. He was trying to, like, explain how important it is to understand how percentages work. And he was like, yeah. I walked outside and my neighbor was like, oh, like, how's it going? He's like, oh, it's. It's terrible. We're down 50% this year. And he was like, and then next year, I was like, walking outside, I ran into my neighbor again. He's like, like, how's it going this year? I know last year was pretty bad. You were down 50%. And. And he said, oh, well, we're doing a lot better. We're up 50% this year. And the neighbor's like, oh, great, so you're back to where you started. That's. He was like, no, that's not how it works. And this was like his way to. His way to explain to interns, like, the way. The importance of understanding percentages or something. That. It was just a funny anecdote.

There was surfing yesterday. My buddy pointed out, this guy, he was like, that. This guy was absolutely shredding.

Yeah.

Just getting a bunch of great waves. And this, my buddy pointed out, he said, that guy's lost all his LPs in 08 and just like, packed it up, bought a house in Malibu and now just basically retired. Runs his own money and just surfs like three times a day.

Wow.

Living a great life.

Anyway, let me tell you about Vanta Automate Compliance. Manage risk, improve trust continuously. Vantage Trust management platform takes the manual work out your of security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. Anyway, back to Citadel. Even though Griffin says he spends the majority of his time working on the hedge fund's investment portfolio. Arguably the hotter ticket is Citadel securities. Sitsec, as it is known, is a complex, sometimes controversial, ever evolving endeavor which Pac man like is on a seemingly inexorable march across the capital markets, gobbling up market share in options, equities, treasuries and corporate bonds, and now expanding to Europe and Asia. Example, CITSEC recently bought Morgan Stanley's US Equity option market maker business, leaving no major banks in the market. Making business Citadel Security now. Now trades 25% of all US equities, including 35% of retail flows plus 45 billion option quotes a day, and is a top three trader in US treasuries and swaps. In total, it executes 652 billion in notional trades a day. The goal is clear. Quote, building the capital markets firm of this generation is a vision that is increasingly becoming a reality, says Citadel Securities CEO Peng Zhao, who holds a doctorate in statistics.

I like how you're just casually giving an ad to Patak right here.

Of course, of course. Begin your tradition. Begin your tradition. This is a very.

By the way, Trump is currently live on Fox News, and he's. He's looking good. So I am happy to see our president doing well.

Was he. What is he announcing?

I've got it muted right now. If somebody else is watching.

Moving the. The space headquarters.

Yeah, the big announcement is they're moving Space Command.

I think it was in Colorado. Moving to Alabama.

Wow.

I'm pretty bummed he didn't. I'm pretty bummed he didn't, like, rip the. I mean, the speech isn't over, so hopefully he still rips the collared shirt off and has a Superman.

Tyler, does anything ever happen?

Nothing ever happens, bro. I was pretty sure that he had passed away.

You thought he died? You thought he was dead.

Nothing ever happened.

We need. We need a gong for when nothing happens. We need something. We need some, like, activity that we can do.

It's a gong that is, like, so reinforced that it makes no sound.

Oh, yeah, that's good. That's good. Just a cement block.

Yes.

With a gong.

Looks like a gong.

Looks like a gong, but it's stone, so it makes no sound. Play the wah wah sound. Nothing. Nothing happens. Not that. Not with. Not that we're hoping for bad things to happen, but I was hoping for something exciting to happen, something. Something positive. Hopefully some. Some amazing deal.

This is positive. I was disappointed to see a lot of the Internet, like, clearly was. Was not Not. Was hoping that there was something wrong with his health.

Yeah, yeah. Obviously that's very negative, but this could have been some crazy 4D chess trade deal. Reinvigor. Reinvigoration of the American economy. Investment in AI. Like, it could have been, like, this doesn't feel like market moving to me.

Right.

Hopefully. I mean, God willing, he finds a way to move.

We got to find out a way to trade this. I mean, is there some Alabama real estate development company that, like, benefits from this? Who knows? Anyway, Alfred Lynn is in Barron's. He says this is a very different company than most people understand. Is Alfred Lynn a partner?

Stock Did.

What stock?

I mean, Truth djt. Truth Social did pop a Little bit live. Okay, so that was the trade. Everybody, if you were, if you were long Truth Social going into this announcement, you.

Well, that makes sense because. Because Truth Social is a social network. So whenever, like, news breaks, there's a bunch of people on there and they're selling against that. And that's why people are investing, because it's probably good for their financials, good for their. Good for the bottom line.

Not. Not a meme at all.

Yeah.

What about on Polymarket? This is, this would have been good trade. So there is what will Trump say during announcement today? And one of the choices was emergency, and it was at 64% right before it started and now it's at 30. So that was pretty big move.

Okay, wait, so it's going down, but he still might say it?

He could still say it. Just. I think it's just the word. Yes.

Yeah. So so far he said China, is.

He Russia, is he taking questions from the audience?

He.

Is he reading chat?

You should be. You should be.

Thank you for the 20. Thank you for the 20. I'm not saying emergency. I know you're on Polymarket right now. Anyway, Alfred Lynn chimes in to explain what's going on at Citadel. He says he's a partner, venture capital firm Sequoia Capital. Of course, he's been on the show. And whose brother happens to be the head of global fixed income and macro at Citadel, the hedge fund size lords running the family. Wow, we completely missed that scoop on the show. We should have been hammering him about his brother legend. Citadel is taking math and their distribution and technology power to price risk using techniques not traditionally used on Wall Street. While technology has been absolutely critical to Citadel success, so too is Griffin's strategy. You don't want to go up against the Wall street incumbents, he said. Instead, you want to understand where the market is heading and position yourself there before incumbents arrive. The incremental rise of electronic trading allowed Citadel to move step by step ahead of names like Goldman Sachs and Morgan Stanley and a number of trading businesses. He makes all kind of. Griffin makes all kinds of headlines. He's a Republican who has mostly given hundreds of millions to GOP candidates. And Griffin has praised and criticized Trump. Just this past week, Griffin told Barron's, I hope President Donald Trump appreciates that while he can score political points by attacking Jay Powell, ultimately the independence of the Fed is of the utmost importance to the American and global economy. Meanwhile, Griffin, 56, has been adding to his personal portfolio at a stunning pace, including buying over a billion dollars worth of real estate in New York, the Hamptons, London, St. Tropez, Hawaii and multiple properties in South Florida, including a few $400 million compound in Palm Beach. According to the Wall Street Journal, his art collection is worth a billion dollars. It includes work by Picasso, Van Gogh and Warhol. And he has priceless historical American documents including rare copies of the US Constitution. RIP to Constitution Dow on that one. He bought the bill.

I can't believe I saw that. That whole saga was so crazy times. He mogged the entire on chain economy with that one.

Yes, he owns the 13th amendment signed by Abraham Lincoln. He also owns a $45 million stegosaurus. That's crazy. Crazy. Yeah. When I worked at Citadel in Chicago.

You got to do more Dynasty.

I think he kept two phantoms parked in the garage with two drivers like ready to go. So you never knew which one he was in or something. He had some crazy, crazy, crazy, crazy choice.

A good setup.

I think he also had some sick hypercars down there. I forget. Anyway, keep him handy. He's doing some philanthropy. He has a cool name for it too. Griffin's philanthropy now directed through an entity called Griffin Catalyst. General Catalyst. Move over. General catalyst. Griffin Catalyst exceeds 2 billion and includes funding Operation Warp Speed. On the hipper side. He recently donated 2.255 million to Mr. Beast's water philanthropy after the YouTube superstar called him out on the today show. It seems very important to Ken that the world knows how wealthy he is, says a business associate. A lot of other people go to great lengths to keep it the other way. Interesting. He's less secretive.

Contrarian.

The totality of Griffin's world is dizzying. The billions upon billions of hedge fund investments, market making activities and personal assets are markers of a man with great aptitude and perhaps even greater ambition. Along the way, Griffin and his companies have encountered friction, false starts, falling outs, fines and failures. The hedge fund dropped 55%. This is what I was referring to. Losing $9 billion of clients money during the 0809 financial crisis and was on death's door. SITSEC tried and failed to get into investment banking. Yeah, they were going to become a, an investment bank and then they were going to IPO the whole firm. But, but then investment banks had such a bad like stench on them after that. Like retail was not going to be a fan and so they stayed private. Very, very interesting like decision to go back and forth on that. The market maker has had a number of run ins with regulators. Yet now after more than 30 years in business, the tumblers have begun to fall in place. A decade ago, Griffin was worth a mere $6.1 billion. Today, his net worth has ballooned to 48.3 billion, making him the world's 31st richest person by let's hope he can.

Crack the I just. I just hope that he crack the top 10 by the end of the decade.

He has an 85% stake in the business plus an 80% stake in the an 80% stake in the market maker, the latter being valued at 22 billion three years ago and like Citadel securities, has obviously grown a ton. He sold a 5% stake to Sequoia. Never mind the real estate.

I never knew that. Yes, that's crazy.

Yeah, yeah. Sequoia, I'm sure.

I wonder if Alfred surely broker the deal.

There's some good color in here. I thought we ran hard at Goldman, pablo Salame, the co chief investment officer of the hedge fund who came from Goldman Sachs in 2019, said to a colleague. And then I showed up here and I realized there's a whole different gear. Griffin is going to chief investment co, chief investment officer and CEO of the hedge fund. I would tell my team you're playing for Real Madrid, says a former Citadel executive. You don't get to keep your spot on the field if you're not producing. Ken would call you on a Sunday night at 11pm and he might be screaming and yelling at you, but he was working, says another former employee. He demanded 150% and nothing else in your life should matter. Ken's not yelling at you, he's yelling with you, joked a person close to Citadel. I'm not yelling at you, I'm yelling with you.

We're yelling together.

Citadel securities and hedge fund Citadel are highly performant places to work, says Matt Kulak, CIT SEC COO, has worked at the firm for 13 years. This is a place to come if you have a lot of confidence in your ability and you want to challenge yourself. It's true that Citadel hardly has an issue attracting aspiring masters of the universe. We had over 100,000 applicants for our summer internship program. Our acceptance rate was 0.4%. People are falling over themselves to demonstrate they deserve to be here just for the summer and some subset of them get to come back full time. Griffin was STEM smart and achiever in his early, earliest days. Growing up in Boca Raton, where he was president of the high school's math club. He graduated from Harvard with an economics degree in three years. Chapters of Griffin's origin story have become the stuff of Wall street legend like Pursuing Harvard to let him inspire. Install a satellite dish on the roof of his dorm room so he could trade convertible bonds. That's sick. After Harvard, Griffin moved to Chicago, where Frank Mayer, a pioneering hedge fund investor, mentored him and helped seed Griffin's hedge fund. The best advice I ever gotten, I've ever gotten was from Frank Meyer, who in the early days of my career really pushed me to think big, says Griffin. Meyer also pressed Griffin to build a multi strategy platform instead of a single strategy fund. Griffin stayed in Chicago until three years ago when he says he became disgruntled with the crime and business environment and relocated his companies to Miami. A triumphant return of South Florida's most successful financier, native son.

Yeah, one thing I'm confused by. There's. I don't think Ken Griffin owns any horses.

No, no.

Which is.

You look this up.

Strange. Yeah. There's no evidence.

Maybe that's.

And maybe he's quiet about that. Maybe he wants to be loud about art, but then, you know, maybe quiet when it comes to horse racing. There was a question Regov asked, what's the update on Tyler? Has he dropped out? Tyler, any. Any.

Give us the update.

Any updates?

Yeah, I've moved. Oh, I forget the LeBron. I've moved my abilities. Talents. Yeah. I've taken my talents to Los Angeles.

Whoa.

Let's go.

Gap semester. Tyler's on a gap.

Wait, did we. Did we ever do the trading card with gaps? Master?

No, we gotta do that.

We gotta.

We should throw it up. Throw it up.

Throw up the gaps of the official gaps.

Master. Tyler couldn't miss the great lock in.

Yeah, he had to lock in.

He had to lock in.

September. The Citadel strategy is fascinating. You know how they started trading convertible bonds? Like, literally, like the convertible notes that everyone knows about in Silicon Valley. Like, companies have those and they're pretty illiquid. So he would figure out how to price them, buy them, sell them. But eventually he scaled the firm to the point where he basically like, maxed out the market size. Like, they were the most dominant convertible trading shop, convertible DAT shop in the world. And like there was nothing more. And so they set up a frequency, a high frequency trading firm, got into quant stuff. They also had everyone thinks about them for if you're thinking about them in like the 2010 era, you think of them as like a high frequency trading shop. But they also had a global macro fund that took like, like just 4,000.

But let's give it up for global macro.

They took like 4,000 meetings with CEOs or something like that of like public companies. And it's fascinating because like, like how, how would that, how would that not produce Alpha? You know, it's like, it's like obviously like you don't need to be insider trading to just talk to the CEO. They don't share any private information, but you can just get a vibe and you can understand. Oh, they know how they're talking about the business. But I'm optimistic about this particular business. Or like this CEO sounds like he doesn't know what he's. I'm lost. Like he's talking about a strategy. He's not telling me anything that's non public, but I guess seems dumb.

If you talk with somebody, if you talk with somebody for 10 minutes.

Yeah.

That's almost always enough time to say totally bear.

Holy bearish. And it's so funny because like, yeah, you don't need to be insider trading to just like talk to the CEO, get a vibe check and then actually go and execute a trade against that. And so that's why I've always been so bearish on retail traders, because it's like, it's like if you like, this is who you're going. This is like who you're going up against. You're going up against someone who gets to sit down with a CEO in a private conference room and have a con and have a conversation and then also have expert research and all these other things.

Yeah, people have, people like to bring up that Citadel has a hedge fund and the market maker how that could be a potential conflict. But apparently there is. Ken believes the greatest risk to his business is regulators. And so he's not willing. He's not, you know, doesn't take risks around that. Basically there's like an extreme firewall.

Interesting.

And they take compliance extremely seriously. Because you can imagine, like, again, he's not so threatened by the, the hedge fund that's trying to be the next Citadel. Right. He feels threatened by.

I was reading Caesar Palace. Caesar Palace Coup. What's that book called? The Coup on Caesar's Palace. I forget where is it on my audible. The Caesar's Palace Coup. Fantastic book. How a billionaire brawl over the famous casino exposed power and greed of Wall Street. It's about Apollo buying Harrah's casino and then turning into Caesar's. And they all came out of the Michael Milken crew basically at Drexel. And Milken, of course, was indicted on like a ton of counts of securities fraud for insider trading during like the 80s. And Milken had A very different approach to regulators. He was like, at least he was like quoted some book saying like, like the regulators are like making the market inefficient, like the market should be a lot more efficient without the regulators and like the courts did not look kindly on that. And he went to jail and got slapped with a bunch of things. But he was pardoned in 2020, which I think means technically did nothing wrong after the fact. I don't know.

Did nothing wrong.

He went on a great run.

John Exley in the chat was asking if we'd covered and round already. We did. Early on they raised 13 billion at 183 billion. He was asking if that was the largest round ever. I think that OpenAI is the only company that has raised more as part of their like $40 billion funding round. But that was tranched out. Right. It wasn't. It wasn't 40 billion at once. So certainly one of the biggest fundraises of all time. World Liberty Financial started trading on the blockchain yesterday. Went out at a 8.6 billion dollar valuation. Now trading down at 6.2. This is the company with a lot of co founders, right?

I think so, yeah. Yeah. No, co founder emeritus is a great new title. I think Donald Trump is a co founder emeritus which I think means he's not day to day because I think he's tied up in the White House or something.

Yeah. So the president is co founder emeritus. Eric Trump is a co founder. Donald Trump Jr. Is a co founder. Barron Trump is a co founder. Chase Harrow is a co founder. Zach Folkman is a co founder. Steven Witkoff is co founder emeritus. Zach Witkoff is co founder. Alex Witkoff is his co founder and I think that's the all the co founders that they have.

But World Liberty stated like mission. Like what?

What I mean how do they want. Seems obvious. It's bridging Legacy finance and the open economy with purpose built on chain products.

Yes.

Where Defi meets tradfi.

Yes, but can you elaborate? Like what?

Like how can I be more clear, John? We're bridging Legacy finance and the open economy with with purpose built on chain products.

I'm asking you to steal man.

I have no idea what L1 L2 USD1 a US dollar stablecoin upgraded for a new era of finance. Stable, secure and transparent by design. Lend and borrow. Supply digital assets and borrow against your holdings. Monitor risk easily with real time health factor and the World Liberty FI app. And you can deposit crypto via wallet or bank account and and spend by Accessing your liquidity anytime.

I have the steel man, the steel man on this is basically. We know competition's for losers. You don't want to be in a highly competitive market. You don't want Brian Armstrong at Coinbase and Vlad Tenev at Robinhood and all the other killers that have Anatoly at Solana. You don't want them all immediately coming out and crushing you and trying to compete with you. Right. And these guys are, they're established, they exist in the space. If you, if you do something innovative, they could potentially clone that very, very quickly. Right?

Yeah.

So how do you keep them, how do you throw them off the trail? How do you keep them from suspecting that you're going to build something incredible? You launch a bunch of Meme coins, you rot. You launch Trump Coin, you launch Melania Coin, you launch Meme Tokens, you do a bunch of things that makes you look sloppy.

Yep.

And then you come out with the really serious thing and everyone thinks, oh, this is just another sloppy project. This is a cash grab. This is something that isn't serious. I don't need to really keep tabs on it. And then all of a sudden you're just building silently. Building silently until you disrupt everyone.

Yeah, that's. I think, I think there's something there. I mean, I think they should, they should start acquiring companies. You know, they're sitting at their, their 8, they've had 2 billion in trading volume in the last 24 hours. There's $6 billion token. Why not start. They should just hit up Chamath and say, let's join forces on this back and create the greatest roll up of all time.

The one thing that they actually should do is get on graphite.dev it's code review for the age of AI. Graphite helps teams on GitHub ships higher quality software faster. They could get started for free. They could be reviewing every.

They really could. Every GitHub they could and they should.

We could.

Fuko Capital says AI features are eroding SaaS margins. Ivan over at Notion says that two years ago his business had margins of around 90%, typical of cloud based software companies. Now around 10 percentage points of that profit go to the AI companies that underpin Pen Notion's latest offerings.

How many times have I asked a founder on the show this, I've asked this question so many times and nobody.

Nobody gives a straight answer.

No one gives a straight answer.

And here it is. But this is, but this is not that bad.

This is not.

Especially if revenue.

Thank You Ivan for commenting, if you.

Know, if revenue is really accelerated, it more than you know, they can take a hit on margins if they're growing the base.

Yeah, yeah. Well the real question is like, does it reduce churn? Does it increase sales? Does it increase growth? Are you getting more customers? Are your customers sticking around for longer? Are they paying more?

And I, and this is just too, this is just, this is just too, too perfect to tie in. But Notion obviously runs on Turbo Puffer.

Oh really?

And they're saving millions of dollars annually. Part of how they can deliver AI efficiently to all their customers because of Turbo Puffer. Mickey Liu, over the data engineering lead at Notion, says turbopuffer makes it too easy to build state of the art AI apps. So absolutely fantastic. Are you, did you ever, were you ever a big Notion guy?

Never big Notion guy used it a little bit. I was buddies with a Notion influencer. What's his name?

Oh I know this, I know who you're.

He plays like metal. What's his name? Notion Brand ambassador. He has a really great YouTube like business.

He went giga long Notion and it paid off hugely.

He had a bunch of really great insights. I forget what his name is, but he's a nice guy. But I use Notion a little bit but have mostly just been Google Docs for most of the stuff. I don't know, building a second brain. Never, never went too far down that rabbit hole. What about you?

I've paid for Notion for years and years and years. We use it heavily at Branded Native and they still use it. Yeah, I think it's a great tool. I think it's more of like an.

Operating system for like a team. Like it's really great in the business.

It's so I mean it's still. We were Google Maxis here. We use Google sheets and stuff but still like being able to create like knowledge bases and sort of like layered is, is great. So yeah, I don't understand, I don't understand the notion, the Notion haters out there.

I think the notion.

It's actually crazy that people type I hate Notion. Like imagine hating a note taking.

That's ridiculous. No, no, I think the way the, the, the over optimizer like meme happens is that you're basically like it's the same, it's the same vibe as like the credit card points Maxi. It's like someone who has like taken something that makes sense in a business context and applied it to their personal life. Like oh yes, I have a personal CRM for like reminding myself to like, call Tyler and get a beer with him on the weekends. It's like, that should feel just natural. And so like if someone's like, yes. Like just to like, if you need.

A CRM to manage a relationship, it's probably not that great of a relationship.

Yeah, yeah. And it has that say. It gives that same vibe off in the same way of like, okay, like, like if you're spending 10 hours a week optimizing credit card points, like is. Is that really worth it? Don't you have a higher opportunity cost? What are we doing here? I actually have a buddy, I get seven the show who is like the biggest points maxi and has gone so far that it's actually driving like tons and tons of value.

Oh, really?

I'll have him come on the show and tell the story. But he.

I'm a billionaire from credit card points.

I mean, didn't I tell you this? He bought a half a million dollars of gold at Costco on credit cards points just to get points and then sells the gold and arbs.

No way. Oh, okay. That's cool.

He's the king of this stuff. He runs a whole show about it. Anyway. The. Yeah. I don't know notion. Like, there are certainly people that get. You have to like get joy out of it, like doing like, you know, in your personal life. Because if it's, if it's not like work.

Definitely. It's definitely gatherer coded.

It is a little gatherer coded.

Yeah.

And that's okay. Some people are hunters. Some people are gatherers.

Organizing. Yeah. Yeah. I like to hunt through my messy, messy documents. I like it.

No, it's messy text.

I'm going through the file system searching for the random. TXT file where I put all my passwords. Like a hunter on the prairie thousands of years ago.

Yes.

Hunting.

You like, stress of opening your laptop makes you feel like. Makes you feel like you're really like, you know, I do.

Or just like one gig. A doc of everything. I mean, you're the worst dude. I see you texting yourself.

Yes.

That has got to be the like, like that is so much like. I feel like though that's my city. The platonic ideal is like, okay, yeah, like, you know, you use a spreadsheet when it calls for a spreadsheet. Use the right tool for the job. Like maybe, you know, you'll. You'll use a communication tool for this. If you're managing a complex product. You know, like if you are. If you are actually, you know, planning and building a product, you're using Linear. It's a purpose built tool for planning and building products. Meet the system for modern software development, streamline issues, project product roadmaps. This is what you actually do. You actually use linear for real, for real stuff. But then at the same time, on the other end of the barbell, you're like texting yourself.

Perfect transition. Because you know who's a customer of TurboPuffer?

You're really on the TurboPuffer run today.

I mean, generational runner. This is why I talked to, to Simon. I was like, we're absolutely working together.

Yep, yep. Anyway, should we go through this Christopher Mims article or just.

Yeah, so.

So Mims is the reason we know about these, about these margins. He says with models doing more thinking, the small companies that buy AI from the giants to create apps and services are feeling the pinch. Developers who buy AI by the barrel for apps that do things like make software analyze.

I buy my AI by the barrel.

That's a great turn of phrase. Are discovering that their bills are higher than expected and growing. What's driving up costs? The latest AI models are doing more thinking, especially when used for deep research, agents and coding. So while the price of a unit of AI known as a token continues to drop, the number of tokens needed to accomplish many tasks is skyrocketing. It's the opposite of what many analysts and experts predicted even a few months ago. That has set off a new debate in the tech world about, wait, who did what.

What about the, the Jevons Paradox?

Maxis, this is. Yeah, this is Jevons Paradox.

I know, exactly. So while the price of a unit AI known as a token continues to drop, the number of tokens needed to accomplish many tasks is skyrocketing. So that Jevons paradox, something gets cheaper.

You use more, more of it. Yes, this is. Yeah.

So if, if, if the cost of AI was skyrocketing, I don't think, think you'd see.

Yes, so, so, so, so the question that you're beefing with, and I beef with this too, is the characterization that it's the opposite of what many analysts and experts predicted even a few months ago. And there's a lot more nuance to what the experts, if you really trust the experts, the podcasters, what they were predicting, they were predicting drops in per token cost that actually has happened. But then they were also predicting Jevons Paradox, that we would use a lot more of the resource. And so I don't know, it seems like that prediction was kind of true. But I do understand, like there was A moment where the idea was you spend 10x more on the training run and then the inference is too cheap to meter. Intelligence is too cheap to meter. And so you basically get the inference for free. You spend a billion dollars training this massive thing and then you can distill it down and inference it on your phone on the edge for free. And that certainly has not happened.

Yeah.

What were you about to ask?

Should we put. Theo Brown, chief executive of T3Chat, he says the arms race for who can make the smartest thing has resulted in a race for who can make the most expensive thing. I don't totally agree with this. I mean, I think it was. I think it was. It's always been the case if, if you take a hard problem and have an LLM, try to tackle it and just give it as much inference, as many tokens as you possibly can, it's going to probably deliver a better result. But I feel like now you have companies like OpenAI clearly making decisions to deliver products more efficiently. Right.

Certainly like not wasting tokens is the goal of the router. Like the router is. Let's try to not get. I mean it's also, let's try and get people to use the thinking models if they're not and they're asking questions that should benefit from thinking models, but reasoning models, but also like just downgrading my, you know, my hammering of the O3 Pro API when I ask a question that actually could just get one shot by the default model is probably a benefit. And so it's. Yeah, it's more nuanced than that. I agree. It's right tool for the job. Sizing the value of the query to the cost of the query makes a ton of sense anyway.

And over the weekend Xai released Grok Code Fast 1, which briefly topped the charts on Open Router and is specifically focused on cost. Do you want to keep going here?

Yeah. So there's a cool graph in here about the cost of doing business. The price per token for prompts and responses. For AI models at a given level of intelligence, the least intelligent model showed roughly a 9x decrease in cost per year, while the most capable ones dropped in price by roughly 900x per year. So remember, AI training and AI inference are different. Training, those huge models continues to demand ever more costly processing delivered by those AI super supercomputers you've probably heard about. But getting answers out of existing models, inference should be getting cheaper fast. Sure enough, the cost of inference is going down by, by a factor of 10 each year, says Ben Cartier, a former AI engineer who's now a researcher at Epoch AI. Not for profit. Despite the drop in cost per token, what's driving up costs for many AI applications? So called reasoning. Many new forms of AI rerun queries to double check their answers. Fan out to the web to gather extra intel, even write their own little programs to calculate things. And AI agents will carry out lengthy series of actions based on user prompts. Here are approximate amounts of tokens needed for tasks at different levels based on a variety of sources. A basic chatbot q and a, 50 to 500 tokens. A short document summary, 200 to 6,000 tokens. Writing complex code might be 20,000 to 100,000 tokens. And a multi step agent workflow might be up to a million tokens. Tokens. Hence the debate. If new AI systems that use orders of magnitude more tokens just to answer a single request are driving much of the spike in demand for AI infrastructure, who will ultimately foot the bill? This is like the Jevons Paradox by Nvidia. When they sold off that you did was like so perfectly timed, like it matched what actually happened so flawlessly.

Remarkable Check. I should check on that trade.

I mean yeah, just like, like, like there was this idea that like models that tokens would get cheaper and like literally the timeline was just like Jevons Paradox. Jevons Paradox. Like understand this thing. We're going to wind up using more of these, more of these tokens. This is a new capability. We're going to use more of this even though it's getting cheaper. And lo and behold people use a ton more.

Literally bought Nvidia on while we were live on the show. Yeah, the day, the day that it.

Just sold off massively on public.com investing for those that take it seriously, they got multi asset investing, industry leading yields. They're trusted by millions.

I am up 42%.

Very nice. Not bad. Anyway, Ivan over at Notion says that he's spending 10% of revenue on, on AI. Now that is, that is high when you, you think about it in that frame. Because what is Notion's revenue? It's gotta be in the hundreds of millions of dollars, right? And so they're probably spending tens of millions of dollars on tokens for features that they've added to Notion and then they have to upsell or give some sort of free.

Yeah, I mean they were, they were super quick to add a lot of AI features. I remember. You know these are founder mode companies, right? Wrong.

One founder mode.

No, but I, but I just remembered it was like, like, okay, chatgpt was taking off. Ivan clearly looked at that and said, hey, we should just integrate this everywhere into our product so that people don't have to leave the app to access intelligence.

I mean, Notion feels like such a beneficiary of AI in sort of like three different ways. One is like the most intimidating thing about Notion is when you set it, when you, when you create an account and you're just hit with like a blank page. And that's why there's people like, you know, these influencers that sell Notion templates, because the whole idea is like, yes, when you set up the second brain and you have your notion for your finances and your notion for all your friends and your friends birthdays, and the notion for everyone you invited to your wedding, and the notion for, you know, your dog's medication schedule, and you have all your different notions and they all link perfectly and all the data is perfect. Like, that feels amazing. That's like the dream. But getting there so much work, you have to spend like days and days and days, like onboarding yourself, basically. And if AI can do that faster, that's huge.

Yeah.

So actually, it's actually one of the cases where I think just putting a chat box, like, what do you want to do right now? Instead of just being like, hey, here's a blank thing. Like, it's a. It's a sandbox, do whatever you want. That feels incredibly value additive. And then also the behind the scenes AI stuff seems incredible, incredibly valuable too, where if I have a CRM built out in Notion or I have a list of topics that I want to talk about on the show or something like that, having an AI that kind of can in the background go and hydrate cells in a table, or hydrate or transform or summarize or kind of polish up a messier document and keep it all in, like the proper notion type taxonomy. That feels hugely valuable. Totally. And so it should be a beneficiary. And then also just like, if you're somebody that's actually been doing the hard work of putting a ton of data in Notion for years and years and years, and then all of a sudden now you have the ability to, you know, with, with just one prompt, like be able to synthesize some sort of new visualization layer on top of that, that feels really valuable too. So I would be pretty optimistic about them spending this much on AI, even if they're not immediately reaping the benefit, even if it is a little bit, like, who knows Maybe they're getting a 50% bump in revenue and so 10% hit to margin worth it all day. Take that all day. But, but even if they're not, I feel like this.

Yeah. So, so here's, here's if you, if you, you can buy notion for $10 a month.

Yep.

And then if you want AI features, you just pay more.

How much?

So it doesn't say here, it doesn't say how much. It's $20,000 a month, but I would assume it's like another $10 a month if you want AI features. And so they're having to spend 10% of revenue on AI, but they're potentially, you know, doubling revenue on a per user basis. So.

Interesting. Well, if you have a bunch of data and you want to analyze it, go to Julius, chat with your data and get expert level insights inside seconds. Ask Julius to analyze your data used by Princeton, bcg, Zapier and tvpn. And tvpn. Yeah, we actually are working on something fun. Put all of our. Every post that we've ever reacted to has been cataloged. Put it in Julius, ranked it by how many times people have been mentioned. Kind of a poster power rankings working on monthly updates. Here should be a. Our own kind of, you know, top poster list. Top. Most mentioned of all time. Should be fun. Anyway. When Replit updated its pricing model with something it calls effort based pricing, in which more complicated requests could cost more the world, the world's compliant complaint box, Reddit filled up with posts by users declaring they were abandoning the Vibe coding app despite protests from noisy minority of users. Quote, we didn't see any sort of significant churn or slowdown in revenue after updating the pricing model, says Replit CEO Amjad Massad. The company's plan for enterprise customers can still command margins of 80 to 90%, he adds. One solution, says Christopher Mims is Dumber AI. The big companies creating cutting edge AI models can at least for now, afford to collectively spend more than $100 billion per year. And so yeah, I do wonder, like a big thing is that if you're just hammering the front, it's so easy to just hammer the frontier. I think the king of the timeline situation room is Buco, actually.

I think it's, I mean he is.

I think he's number one.

We got to start at it. We should probably add our own creator payouts. We should start paying out Buco.

Yeah. In merch.

King of the timeline in merch.

We should send merch to the top 10.

Zeke says an ocean premium subscription will get you a lease. 2025 Tesla I wouldn't be surprised if somebody starts throwing in a lease Tesla. A Tesla lease to your enterprise plan.

Great.

Why not?

So yeah, I mean in summary, like the bull case here is that the GPT5 API, like eventually there will be a model router API that will dynamically route the request to the best model. And you can instead of just saying like okay, this particular feature is wired up to a reasoning model, it will say okay, well yeah, like this particular feature is wired up to a model router. And when a customer comes with a question saying hey, I'm notion and I want to reorganize all my data and it says yeah, that's not really a notion, that's not really a reasoning level task. Let's put that on a cheaper model, dynamically route it. Save a bunch of money. Anyway, if you want to get your brand mentioned in ChatGPT, go to Profound, Reach millions of customers who are using AI to discover new products and brands and get a demo at Profound. Anyway, should we talk about the podcast gold rush or should we through some timeline? What do you think?

The Podcast Gold Rush Media companies race to license star creators with AI upending how people consume information News outlets are willing to pay top dollar for unique voices. Traditional media companies are in a deal making frenzy with podcast social media influencers and other content creators. Fox News in July announced a new media expansion, including a licensing agreement with the ruthless podcast freewheeling talk show featuring several former Republican political strategists. In August, the Athletic agreed to a seven figure deal to license Pablo Torrey Finds Out a sports and culture show. Vox Media recently announced a partnership with Bella Freud for her Fashion Neurosis podcast and has agreed to a licensing deal with David Axelrod, Mike Murphy Mike Murphy and John Heilman's show Hacks on Tap. Established media companies watched in Oz, independent podcasters drew starguests and drove the news cycle during the 2024 presidential election. And with artificial intelligence tools changing the way people consume information and audiences hungry for authenticity, outlets from Fox said the New York Times are eager to create content that can't easily be replicated by a chatbot. For many, that means building out rosters of distinctive human voices. The world would be poorer if we were just served, quote, by an AI agent with content that has originated from algorithms, says Paul Cheesebrough, chief executive of Fox Cores 2B Media Group. The role of the creator becomes even more important in that world. Fox and the Journal's parent News Corp. Share Common ownership. Sean Ryan, a former U.S. navy SEAL and CIA contractor, started shopping the Sean Ryan show earlier this year. Recent episodes, which can last upward of three hours, featured a deep dive featuring. Featured a deep sea mining executive, a former military contractor held hostage in Columbia.

And like seven of our boys.

Seven of our boys. And California governor Gavin Newsom. Ryan Bill's the show is.

Yeah, Sean Ryan.

Oh, I didn't realize I missed that. Ryan Bill's the show is focusing on.

Holding a gun or something. That was like the viral moment.

Yeah. Focusing on what the media isn't talking about. Yeah, I mean, I, I think they might get into this in a bit, but the takeaway here is people are less interested in paying and just for news because you might open X and see some anon account posting a headline. Someone else did the fact finding. They're just like posting an easily digestible screenshot and more interested in sort of commentary and analysis surrounding news.

I guess my question is like, if the end state of these podcasts is partnership with legacy media networks, what, what does that say about the talent identification and like talent nurturing for the networks? Like, why can't, why can't Fox go and find the next Ruthless and set.

Them up, put it together.

Yeah, exactly. Like. Or is it maybe more efficient to actually have the NFL combine of like the next sports.

Yeah, you guys have a, you know, a competitive bloodbath.

Exactly.

And we'll pick out winners.

Yeah, maybe that is actually.

I mean, this is, you see this in music now where a lot of record labels wait until somebody shows incredible talent and then they'll sign them after they've gotten a billion views on TikTok or.

Yep.

Have a hit song. So I still think. Yeah, the question here is does signing, you know, if Sean Ryan goes to Fox or Tubi or one of these other platforms, is that enough to, is that enough to sustain these legacy media companies or do they still get competed away over time?

Yeah, the question is like, what. Yeah. What is the long term business look like? Because they're all pivoting to like where they're all expanding to over the top or instead of over the air, like the. I think it's ott like the streaming services. So like they all want to have their own streaming networks, but then they're in direct competition with Netflix and that's going to be really hard. And they're in competition with Apple and Amazon and YouTube and that's really, really hard. And then, and so the question's like, like in the short term it makes sense Like I could imagine paying Sean Ryan to license his show and running ads against it on Fox being higher value than just like the next random show that probably costs a bunch to make and brings in the same amount of ad revenue. Like if they're just paying Sean Ryan to do his show and then they're just airing it, that could be like a good financial decision, right?

Yeah.

The question is like, does that actually get like a younger Sean Ryan viewer on board on Fox?

Like, well, yeah, the question is like if legacy media, you know, if cable is being competed away by different streaming, cable revenues are being competed away by streaming platforms and social media platforms, how many Sean Ryan's do you need to replace the lost revenue and the fullness of time that comes from cable just going away? Yeah, you need a lot of Sean Ryan's.

There are a lot of Shawn Ryan's out there though. You could carry a lot of these shows and you could, you could definitely fill out a 24, 7 news cycle. You could fill a full channel with independent content creators that are licensed. But the question is like, is like how much does that actually make people stick around versus they just stay in their apps and they just don't really go back to the networks or like, what value at that point is the network actually delivering?

Totally.

Anyway, let me tell you about numeral sales tax and autopilot. Spend less than five minutes per month on sales tax compliance. Where should we go, Max?

Let's rip some timeline.

Do some timeline. So Elon Musk is back to posting about romantic companions, I believe. Major upgrade of Grok. Imagine in a few weeks. Definitely needs an upgrade. People were not very happy with the quality of the video, although there were lots of people that were promoting it and sharing it because it was certainly edgy. But in terms of like the video.

Pull up that video of Sam Altman.

Yeah, that's the next one by Taoki. If we can pull up that. Try not to share your screen. The. The Sam Altman clip from. This is from Cleo Abrams show.

I believe.

In the. In the timeline. In the meantime, let me tell you about Fin AI, the number one AI agent for customer service. Number one in performance benchmarks, number one in competitive bake offs, number one ranking on G2.

Do not get in a bake off with Finn. That's all I'll say.

And can we pull up the Sam Altman clip from Tyoki Toi? I don't know how to say that. Repost from Hungry Donkey of Sam talking to Cleo Abram on her show? It's in the timeline.

Meanwhile, our fur rock is highlighting Static was acquired by OpenAI in a 1.1 billion all stock deal. Notably, they announced $100 million Series A at the same 1.1 billion dollar valuation from Iconic a few months ago. Wonder what prompted management to sell after the recent large fundraise. This is what I was saying earlier. The acquisition is just at the last round price, but it's very possible that the statsig team and the board think that there's just more upside in.

In.

In owning a piece of OpenAI than owning a piece of Static. So even though it's happening at the last round price, the last investors aren't getting a premium. They are. They're riding with OpenAI now.

That makes a ton of sense.

We got the video ready.

Let's pull it up.

No audio.

That is best for the world, but not best for winning.

Can you start it over? Because we missed what is an example.

Of a decision that you've had to make that is best for the world but not best for winning?

Well, we haven't put a sex bot avatar in ChatGPT yet.

That does seem like it would get time spent.

Apparently it does.

Is that graphic added on her show or after the fact?

I would assume.

I think it's after the fact.

She didn't add that.

Somebody added that. Yeah.

I don't know. The other thing about this deal is Iconic is the lead investor in Anthropic's new round. So this is a way for Iconic to get some. To get some OpenAI exposure.

Interesting. You want to talk about Align Ventures. They're on a generational run now in early stage CPG investing. The fund started in 2018.

Yeah, we covered this Friday.

$20 million fund was invested in some of the biggest.

Because they're in. They're in Mammoth Brands, which is why Coterie.

Coterie sale to Mammoth Brands. Figs. Oh, they were in the Figs series A which IPO'd in 2021. How is FIGS doing now? I know that they IPO and they were kind of ripping.

They were in hims and ho. Still a billion dollar company.

Wow. Touchland Seed acquired by church and Dwight Company. I don't know. Touchland for 880 million. Billy Seed acquired by Edgewell Personal Biggs.

Also IPO'd at what, $34 a share. That's $6 a share now.

Okay, so it's down.

They would have done. I mean, a line would have done really well in the IPO.

The total EV of their investments is likely north of 15 billion.

Wow, that's crazy. So that's how they have the capital to be ripping into figure robotics.

Yeah, yeah, that was a, that was uncharacteristic. It seems like they really know their stuff.

But I mean, humanoids could be some of the, you know, the biggest consumer play of all time. If you get a, if you get a robot in every, in every person's home. But obviously a competitive.

Okay, we got to talk about this. Ethan. Ding. Post Google Trends data on interest in lovable Replit. Claude Code, Cursor windsurf all down. Cursors down 60%. Peaked August 3rd. Claude Code's down 56%. Lovable's down 44%. Replit's down 68%. Wind Surf's down 78%. This doesn't make any sense to me. Like, I mean even looking at the charts and it doesn't look like it's weighed maybe down from peak, but like that's just Google Trends.

Like, doesn't mean revenues down.

Yeah. Is this. What do you think, Tyler? Has anything happened in cursor Cloud code, lovable replit?

I mean, Ethan responds and he says might be nothing. Markets maturing, users not switching as much. Right. If they're actually settling into using products, then they're not like posting frantically looking and. Or it could be that just overall growth is slowing also.

It's just like a, it's a slight sell off before lock in season.

Or people are just using the models to do search now themselves.

Oh yeah. So people. Maybe this is just overall. No, I think all this is relative.

Oh, right, right.

Tyler, what do you think?

I think could be like, yeah, it's like the lock and like by now the kind of exploration phase is over. People like, no, okay. I like using Claude code. I like using lovable.

Yeah.

They've tried everything and now they're kind of maybe just using one now.

Maybe something like that. Yeah, I mean this is, this is. I guess the data's down during August. That has to be like the slowest time for basically everything. It's like big vacation season. I don't know. I don't read too much into this. I still feel like a lot of these are big markets where many of the companies will do well. Also there's some sort of compounding thing also like clogged code. I wonder if that's even the term. If I go to Google Trends. Are people just searching for anthropic? Is anthropic off peak? Anthropic is a search term. Anthropic is a search term over the past. Let's see.

Seems like every search, everything I've searched so far has peaked around the beginning of August.

Yeah. Yeah. Anthropic, broadly is down. What about. What's something that should not be down at all? Like Erewhon. Is Erewhon down? Erewhon is flat.

Labubu peaked in July as well.

What about OpenAI? Let's see. OpenAI also saw some crazy spike in August. What Was going on July 27 to August 2? Everyone was talking about AI or something and then it just like completely dropped something. Something weird happened with the Google data in on August 2nd or August 1st or something. What was going on then? I don't know.

Anyway, anyways, I don't think we should read too much into this. It's interesting data, though.

I agree. Let me tell you about Adeo. Customer Relationship Magic. ADEO is the AI native CRM that builds scales and grows your company to the next level. Get started for free.

This was funny. Mr. Beast was streaming about his water charity.

Yes.

And he just kept refreshing polymarket.

That's so funny because he, he can see the actual data of how things are coming in, but he'd just prefer to look at polymarket.

I mean, it's a fun chart to look at when it's going up from. From, you know, up to. Up to 90%.

It's amazing.

99%. Wait, let's see what it was like a week ago.

The odds that we were going to.

Hit it was 50%.

So Ken Griffin came in.

This is. This is America. It's like we can bet on charity in this country. A lot of people who bet that we weren't going to hit it our. Our do dosing the site so we don't hit it.

What were the lowest odds at the beginning? What was it?

Oh, that's a crazy dynamic.

It.

It looks like it hit a low of 50% a week ago. At the very start, it was hovering around 30%.

Wow.

Yeah, it's kind of crazy. I'm. I'm tearing up realizing that we can bet on charitable giving dollars of betting volume on this man. Why are so many people betting on this? He's like, can you please just donate to the. To the charity.

Yeah. Instead of gambling on it. Oh, that's hilarious.

Shout out to Ayush from Warp. Married the love of his Life in a 500-year-old cathedral in a 2,70-0-year-old town in Spain this weekend. Absolutely fantastic. Love to see it. Love to see a young technology brother Marry the love of their life. Now. Ayush, please. Get back to building sass. What's this?

This is Here Comes the Bride. This isn't the trade.

Is this.

I don't think so.

I think this is like fair use.

I think it's fair use. We'll see. Maybe we'll get struck. Let's keep talking. We need a wedding sound on the soundboard anyway. Congrats to him. That's a fantastic photo.

Wow. So Palantir is launching a new campaign saying you're being sold an AI future where you're obsolete or irrelevant. We see it differently. Doomers say AI will take your job and then your life. Pacifiers say not to worry. Machines will handle reality as you handle the remote. They're all wrong. Americans are already wielding AI to work wonders from factories to hospitals. They're ditching spreadsheets to solve real problems, make real friends things, and kickstart the prosperous era. The most prosperous era in our history. Today we are launching working intelligence, the AI Optimism Project. To see. To show you how. This is great. The Doomers will hate to see Palantir providing an optimistic future for AI in our lives. Should we pull up this. Should we pull up this clip of Gavin Newsom?

We certainly can. We also have our next guest.

There we go. Well, why don't we dive into our first guest of the show and we'll come back to that. Andrea from Snackshot, who was, of course profiled Friday in the Times. Great to see you.

Hi.

Same. How's it going?

It's good. How are you?

Great.

Congratulations on all the progress.

Thank you. It's been five years in the making.

Five, Five years.

What was the. What was the inspiration? What was like the first post, do you remember?

Yeah. It was about the rise of this new wave of non alcoholic drinks. And look at it.

Now is now the time to go long alcohol.

Yeah, yeah.

Because I've been seeing people, you know, fading. The like, non alk trend being like, all right, everybody's laying off the alcohol. I'm going to go on heavy.

Yeah, I think so. Yeah. I, I like, Gen Z is into like buzz balls and like people are bringing back hypnotic. So 100%.

We got to get some buzz. We got to get some. Unfortunately, some members of our team are not 21, so we will not be bringing back buzz balls in this office. But I think. But do you know about.

Yeah, yeah.

Is that. Was that around when you were.

Yes, yes. I'm familiar with balls. I don't think I've ever actually had One. I've seen them at the grocery store though. But yeah, what were the, what were the biggest winners out of the non alcoholic trend? Was it Athletic brewing back then or were there other, were there other like companies?

Yeah, I think the only one that I'm like, like I can say like, okay, it makes sense is any beer because it tastes, it really does like taste like the real thing. You have all these like any drinks that I'm just like, dude, it's fucking just like a sugar drink. And yeah, that's what.

I never, I never invested in the non out category despite getting a bunch of pitches because I was like, I can just have a diet Coke. I could just have like a soda.

Yep.

I guess I get, you know, energy drink. There's just a lot you should be investing in.

Like protein heart. I mean there is already a protein heart seltzer brand. We have nicotine energy drinks now.

Okay. But we saw that. We. I, I don't think that's, Yeah, I don't. Is it actually real? It seems extremely, I literally, like, I.

Interviewed the founders when I wrote about, they're doing.

Wow, okay.

They hired one of the guys from Coco Vita. Okay.

No, that's, that's a, what do they know? Do they know it's, it's illegal?

So they're operating. Okay. So I asked them about this and they're operating under the Kratom category. Oh, I'm telling you guys, like the keys.

So they're. We're operating in a gray market. A drug.

Yeah, they're operating in the like, like smoke shop, gray market area. But these guys are like from the Redneck Riviera, like Destin, Florida. Like, okay, kind of. And that would be behind this brand and they don't give a fuck. They're like, they literally told me we're building this for the LA people, the lower Alabama people.

So Lower Alabama, they know they're target market. So yeah, that's the.

What about protein? Are we short protein? You can get protein and everything now.

I, I, and I've been reading studies about this. I think in the next 10 years there's going to be people with like, severe kidney like, problems.

Too much protein.

Yeah. Your body cannot process the insane amount of protein that American people are putting into their bodies now. And so I joke when people are trying to push you. Like, I, you know, I saw protein croutons the other day and I was like this ridiculous. But I'd love to see people's blood work.

Like, no, no, no, I won't add protein I don't want to add like a meat or fish to my, to my grain bowl. I'll just take protein croutons, please.

Well, there's also now a brand that's doing protein greens and it's like a solid green. It's.

Don't greens have some certain. That's funny.

I have no idea. But we're beyond parody at this point. Starbucks announced they're doing a protein foam matcha latte foam this month. Yeah, like cold foam. You know those drinks that have like the cold foam on the top. So like Starbucks is long protein, so I think we should be shorting it. Wow.

The short.

I feel like we're like, okay, we can start backing out a little bit about that. Beyond protein, you know, like now it's this whole like creatine snack trend. And I came across like creatine, you know, man cereal is this creatine cereal that's launching. But then you also have day job creatine muffins, creatine croissants. And it's just. That's the thing about what I love, creatine pastries.

That, that, that I don't get behind it.

The science behind that is that carbs help our bodies absorb creatine better and faster. So that's the science behind it. But yeah, that's kind of what I love doing. What I love doing. It's like I come across like the most insane, unhinged products. But it also is a testament of like the American consumer is like optimist. Like you will. You can sell anything to Americans.

Speaking of selling everything the chat wants to know about psilocybin ice cream. I don't know if that's real or if that's just a joke.

I mean, I, I've definitely seen like psilocybin, obviously, like the chocolates.

Yeah.

There's some places in LA that I've do them. The, the teas. I've actually had some of those teas. They operate on the down low.

So it's like mushroom tea.

Yeah, it's. And it has like, it'll deal. Yeah. But it'll be like micro doughs. So it'll be a little small bottle of them. The company is called Toasty Town. I'm obsessed with it. I actually smoke.

Okay, okay, you're live. You're live.

Okay, I'm live. But anyways, great tasting psilocybin tea.

So I'm not surprised you smuggled it from the plate into your, into your mouth.

My mouth anyways. But yeah, I'm not Surprised if people are doing that on a DL. I don't believe that ice cream would be the best way to ingest it. I don't know. I would have to.

Have you seen anybody try to put cocaine back into cola? Yeah.

No, but I think at this point I wouldn't be surprised if coke just says like it, you know, like, what about this? Like, like push into like the cocaine induced opulence of the 80s. And that's why we're seeing people, you know, want to do 300 milligrams of caffeine and one drink. We have the killer Panera lemonades. Starbucks is also doing energy drinks. So I don't know, I feel like America wants to and it yearns to be stimulated and we're like kind of the reverse of the ayahuasca psilocybin kind of like brain dead vibes.

Do you think we're seeing more new CPG companies formed than ever? Because over the last few years there's been less early stage investment activity or at least from, from the institutional side, but it seems like there's still like a fire hose of new brands.

Yeah. Because a lot of the barriers of entry of these categories are so low. And it's really funny because people can just kickstarter it like fly by Jing, which is doing really well. It's like a chili crisp brand and they started off with a Kickstarter. You don't really necessarily need venture money to launch a brand, a CPG brand. But obviously we've, I think it's VC came in to corrupt the CPG industry and trying to like grow it in five years and trying to get like those exits, something like a poppy or a CT that have been able to do it in less than a decade. But that's obviously like not necessarily the norm for the industry itself. But yeah, there's.

Yeah, I mean it's certainly true. I mean I, I'll defend venture capital with my life, but I would take a bullet for venture capital. But certainly a lot of brands that I love were started decades ago and didn't raise anything close to what venture capital looks like today.

I wish there was like a way to short new CPG brands. Like someone needs to do a poly market for that.

Brutal. Brutal. You're supposed to be there. But isn't that, isn't the competition good? We just like, you know, we throw a bunch of budget, bunch of see.

What sticks and every once in a while you get a great product that sticks around forever.

I know, but like, like, I mean, I've come across Palo Santo brewed water and like wood.

It's just, it's like a certain type of wood really.

The description of the product is like, you know, Palo Santo is what you burn to like sage yourself. And so like the product describes itself as like, like something that can like elevate your vibe.

Okay.

There's people who say like oh you can have like spiritual enhancement through like these seven dollar adaptogenic seltzers. And so at this point I do think that we need to be more like, like strict in what we allow to put out there because like none of that actually changes that there's Skittles water in the market. You know, like wait, is there actually Skittles water? No, there's actual Skittles.

I bet that raises your vibe. Crazy. How do you do you still some something I like personally, I think the invest. If you're going to invest in cpg, the only criteria that really matters is the product. Truly amazing. How often are you surprised where you try a product and you're not impressed by it but then it goes on to be successful?

Oh God. Yeah. And I've, I've spoken my mind about how I don't believe that people are buying $12 protein cereal or you know, I'm not going to say the name of the brand but I, there's a lot of things that I don't believe that make any sense to me and I do believe that it's like VC and distorted. Yeah, it's distorted and it doesn't make sense. And I'm someone who does does spend a lot of time in groceries really observing form of more anthropological pov like what are people really wanting to spend like a lot more on or you know how groceries became this like way of status signaling that you didn't have before. Like our parents weren't like showing pictures of Heinz to their friends and being like oh my God, I have you know this in my pantry and now you have limited edition ketchup, the grass saw in their kitchen. And even like the idea of what I call like a hypebeast grocer like an erewhon or a happier grocery where it's like that, it's so crazy that that actually exists. And then our generation this form of affordable affluence where it's like oh yeah, I'm gonna go spend $30 on a 80 gram sugar smoothie for clout. And I, I think that I saw the news about, you know, Emily Sundberg posted about that like erewhon being inside of like A kith that members club. And so it's really funny because I think that's going to be like the clout chasing final boss. Like, you dropped $6,000 on a membership to buy a $30 smoothie in New York. Like, you got to love it. I can't hate it.

I mean, badge value is real. People want to be seen with something as an accessory. There is something to that. I mean, it might be bizarre and distorted, but it's real and monetizable. And so it will. It will.

I like putting. They should put all erewhons inside members clubs because I don't. My only critique of Erwan and my only critique is like, the crowds. I hate going in. And you can tell on like on a, on a summer, on a summer Saturday that it's like, tourists. I don't want to see tourists in my grocery store.

Who, who do you. Who do you write for? Like, who do you think you're. Do you think your audience, you know, do you write with the mind of the consumer in mind? Do you. Do you.

Snacking generation?

Yeah. Or is it more like the industry participant, the investor, the business owner?

I come from PR and marketing, so like, my POV was always like, I can kind of dissect this for you and tell you what of this product is. Mostly BS and a crafted narrative. And so I started this publication based on the idea of no one's writing in this, like, CPG circle jerk of an industry. Like, everybody's just writing for the buyer or for the retailer or whatever, or for the other investors. But no one was really talking to like your average person who eventually finds us at a Target and doesn't understand, like, how come we have like protein popcorn at Target? Where did that even come from?

From?

So, yeah, I write it's funny because.

Like, have you thought about putting protein, like bundling it into the subscription? Your subscription? Like, subscription?

Well, my audience use very young, which is really funny. Like, I've even been invited to give guest lectures at colleges, which is interesting. And my number one advice is like, don't do it. Don't get into cpg. But it's, it's interesting. Like I, you know, but it's fun.

It's, it's, it's. People love it. It's fun to make things that you can consume and physically, you know, it's a very common story. Somebody's in finance, they're just in Excel all day long, and then they start a beverage company.

Yeah, it's much less abstract. Like, you are making Widgets. It's a widgets business. Like, you manufacture something, you distribute it, you see it, and people think it's.

Easy because they're like, okay, I just make a drink and I sell it a lot of times and then I exit for a period.

The first time you see one of your products, like, in the trash out in the real world, and you're like, wow, like, this is a real thing. It's amazing. Yeah, it's amazing.

Yeah. So I try to, like, write. I started writing for myself as an audience, but I guess that, you know, there's so many people that can take what it is. So, like, I, you know, there's. I have a popular Instagram account as well. It's not just a newsletter. And I do a lot of memes there that have gone really viral. It's funny because, like, oh, they're like celebrities like, like BJ Novak and Kira. I forgot what her last name is. But, like, all these random people that I'm like, wait, how did you even find out about this?

People love snacks. Yeah, it's a universal language, universal experience.

So, yeah, I guess that is a very universal subject. But the way that I write it just makes it a lot more relatable and digestible to your average person.

Are you long or short? Celebrity brand?

Oh, super short. Like, I'm saying, like, we. Someone needs to make Polymarket for cbg. Maybe. Maybe I'll do it.

What? Are you long? Are you long? Like legacy brands then?

Long.

The American consumer, 100% that. But what I'm fascinated with right now, that I wrote a deep dive on this, like three years ago, the inner, like the influence of wearables on what we decide to eat and drink. So I'm very invested in. Not personally, because I don't invest, but I like, I'm very fascinated with how, you know, there's the trend of people not drinking at a certain age because they're wearing the whoop. They're wearing the aura. This whole, like the new hot biometrics, which is like quarters people wanting to know what their cortisol looks like. I just talked to a company that has cortisol strips that you put in your mouth and they immediately like, populate the information into your cell phone. I think that's crazy. I love the idea of technology advancing enough that you can potentially have one one day. A non invasive glucose monitor that can tell you, like, oh, you know, you shouldn't be doing, like, drinking this or whatever, how it affects you. But there's brands now. The guy from Oatly. He launched a brand called Good Idea and they developed this ingredient that counteracts your sugar spike if you drink it with meals. So I think that's really cool.

It's important because Oatly massively spikes your.

Yeah, he's trying to like undo his like what he did in that company. But I think that's fascinating.

I'm like explaining to people, explaining to people that your body like processes your. Your oat latte. Just like it's a, a Coca Cola is mind blowing for people.

Yeah.

But you don't have to be Brian Johnson at this point to be able to like understand your body in that sense.

But yeah. Anyway, awesome. Well, congrats on the recognition and the profile.

It's so nice to be here.

I know. Thank you for all the support since day one. It's a great hangout and it's great watching you win.

We'll talk to you soon.

Cheers.

Have a good one. Bye. Get that mallet ready. Jordan. We have some news coming into the TVP and ultradome. From the Restream waiting room, we have Rain. Welcome to the stream. How you guys doing?

Welcome.

Give us the update. Introduce yourselves. Tell us what you do. Tell us the news. Give us a big number, please.

Hey, we're co founders of rain. I'm Farouk.

I'm Charles.

And yeah, we're building stablecoin infrastructure. We just raised a $58 million Series B.

Let's go.

First proper hit of the day.

What was it? 52? 58. How much money?

58.

58. 58. And, and, and that 58 million. It's still worth 58 million, right? Because you're keeping the stable coins. Did you already rip it into World Liberty Financial?

Hopefully not. Hopefully not. Yeah, yeah, just. I'd love to just better, better understand the business. Kind of go a little bit below the surface. What are you guys doing? What kind of customers are you working with? All that good stuff.

Yeah, I mean we power a lot of global payments use cases powered by stablecoins. Largely on top of the Visa network. We are stablecoin based card issuing platform as well as a stablecoin based payments institution. So we connect any use case with any sort of payout mechanism around the world. Anybody can embed stablecoins into their app and just rip it, you know, you can give us dollars to everybody around the world.

Let's give it up for just ripping it. Some of our customers include Nuve Large payment process, Payment acquirer, Avalanche. We power the Avalanche card. We power a lot of dollar Access cards in Latin America and emerging markets.

Got it.

Yeah. I was going to ask. So like, is a lot of the business international at this point?

Only about like 50% of the business is international.

We power.

A lot of us use cases where consumers are dealing with stablecoins. But it feels and looks like a regular credit card or debit card product. And so it's not just global, it's everything. Our thinking is, let's just upgrade the infrastructure in the back and then the consumers and the users can feel whatever they want to feel with whatever they already have.

Yeah. What are the tangible benefits for the American consumer who might be using just normal Visa network card? If you're using a stablecoin as the backing, is that going around the Visa network entirely or are you still plugging into the Visa network at some point?

We're still plugging into the Visa network, but I'll give you an example. Like Rain is the only company that settles seven days a week with the payment hour using stablecoins. That lets us have significant savings in terms of collateral that our customers need to post.

Got it.

Oh, the end user advantage is not necessarily to the end cardholder.

Yep.

It's our partner that's operating a program so you can launch faster, you can service more people, you can be more flexible, you can operate more cheaply, you.

Can make more money.

And so for us, it's really about driving cost down, driving revenue up for our customers and using Stable coins to do that.

Typical like four days of collateral or long weekend risk and we're able to bring that down to less than a days of collateral.

Yeah. So is the long term that you might see someone try and compete with like those popular credit cards like the Chase Sapphire Reserve or Amex Platinum or something and they're able to pass through more savings because they're saving more, so they acquire more customers that way. And there's this flywheel there. Is that how we might see something like this actually go really big in America?

You can already see things like this happening in the US we have a number of customers that are paying like 3% cash back and they're meeting head to head with some of these programs. And for us it's really about being the partner that you can scale with at a significant cost savings. And so our customers are able to just move a lot quicker.

Yeah.

People get the Ether five card, which we power. They have really competitive rewards that they're offering.

Nice.

You guys start. Correct me if I'm wrong, but you guys started in like 2021. Is that, is that right?

Yeah, we were actually.

So we initially built this product called Siren Wire, which was a little bit competitive with Party route. Yeah, yeah, yeah, yeah. That's, that's what I was getting at. Because I know obviously I'm looking at the website, look, obviously you guys have evolved a ton, but I remember, I remember those days. Yeah. And we had stablecoin. We had stablecoin functionality in our product. But we just. After the. What I was going to ask you about is like navigating kind of the FTX kind of crisis, because at that point we had to basically completely jettison or remove a lot of the stablecoin functionality that we had, because at that point every major financial institution was just saying, like, look, risk off. Exactly.

Yeah. I mean, look, we were lucky to find a way through that without having to, you know, cut down on all the stablecoin stuff. And it was actually a blessing for us because we were able to build in relative obscurity all technology that we now take for granted and be able to use that with volume and multiple years of history that now, like large enterprises come to us and they're like, wow, you've been doing this for several years and you know, anybody starting today is going to have to start today. Whereas with us we've started several years ago and you get a battle tested solution, which has been our advantage in the market.

Yep. What do you guys. Obviously we have new stablecoin regulations. What are you guys expecting from the market? Broadly, over the Next, call it 6 to 12 months, it looks like a.

Lot of people are going to explore what stablecoins mean for their business and for their bank or for their app. And I think that that's all very good. Right. Our hot take is that it's probably going to look like when people started issuing like, you know, gift cards that you can buy, you know, CVS where, you know, I can get a Red Lobster gift card and all these other things, but if you can't use it anywhere else, is it really money? Yeah, I think that's what people are going to run into. And a lot of folks come to us when they launch a stablecoin and then they're like, oh wait, like I can't use this anywhere. Like, what if there was a partner that lets me and my customers use this in more places? And so that's where we come in. We just started part. We just partnered with the state of Wyoming where on the first day of launching their Frontier Token, it was accessible and usable on the RAIN infrastructure. Anywhere that visa is accepted globally. So just from Wyoming we were able to take it to the world without them having to do anything.

That's wild. Is every state going to launch a token or do you think they're an anomaly?

Some states will probably launch tokens. I think other states are still probably figuring out why they're anti all this stuff.

What is the rationale for an individual state not launching a token that's tied to the economic prosperity of that specific state, but just backed by USD? That seems extremely redundant and, and I could not wrap my mind around the benefit of that.

I mean a lot of these states, like in Wyoming for example, they see this as an opportunity to build a state backed token where a consumer around the world knows that hey, this is supported by a government institution. It's going to be one to one, they're not having to take the risk on a private market issuer that could have a run on the bank. And so there's a potential market for there to be, hey, you know, this is the public sector token. It's more trustworthy because it's issued by a regulated by an actual regulatory state.

Is that just a run around the no central bank digital currencies vibe that we're getting out of DC?

I think that there are going to be a lot of different types of experiments on how do we get around no central bank digital currency thing. Ultimately, if you look at the dollar, if you go far back enough, most of them are just issued by private banks. Dollars are issued by like your local community bank and then eventually they were issued by the federal government and we're probably going to have several countries where it's going to be issued by your local private bank and or your state and other places where it's going to be issued by the central bank and maybe other places where it's going to be just issued by your corner store or Walmart or Amazon. And I mean it's going to be interesting to see what the next few years looks like because we're going to see this Cambrian explosion of whatever people want to do.

And that creates an opportunity for you guys to just be in the back end swapping in and out of all these random stable coins that each represent a dollar but have varying levels of liquidity. Is that right?

I mean you don't know if you have cash in your pocket? I mean I don't, but you may, but most of the bills in your pocket are issued by or you know, they have a different Federal Reserve on them. Like do you know, do you care? Like is it Denver Federal Reserve? Is it the Kansas City one? Like which one is it?

So we really built our infrastructure to be agnostic of whatever stable COIN is. People want to use, people want to spend them. And we have direct relationship with these issuers and we're just providing that utility layer for them. Yeah, that makes sense. Last question. Aaron Frank told me to ask you. You've already given some hot takes but he said to ask for some hat takes. He said you're very opinionated on hacks, on, on hats. Farouk, anything there? Is he just messing with me?

No. Look, I'm a big deep hat guy. So like I think your hat looks very nice because it looks like a nice deep. Charles is more of a dead hat guy.

Never dad. Never dad hat. Never dad hat. I didn't know, I didn't know that. I didn't know the terminology for it. But dad hats are over this year addressing the.

Sending some rain hats.

We'll do it. We'll do it. Awesome guys. Well, congratulations. You started the company at the right time and it's awesome to see the progress.

Cool. We'll talk to you soon. Congrats on the round.

Cheers. How'd you sleep? We talked to so many incredible entrepreneurs building so many incredible things and yet we still had to solve the Internet crisis. There's a global Internet crisis.

84 last night. But I think this doesn't count some of the bonus sleep I got. What'd you get?

I got a. So this is, this is crazy. Went to bed at 8:32. Woke up at 5:30.

Okay.

But only got six hours of, of sleep because three year old was going, the whole house was going crazy. I walked. I got up this morning and my, my.

What was the final score?

62.

Oh.

Play the sound effect for me. Let's go.

I woke up this morning 10 this week.

Let's see. It's a short week. What I can do.

I get up, get up at 5:30, walk out of my room. 3 year old walks out of his room holding sandwich.

That's hilarious.

Holding. Where does he had got at some point got up in the night and just grabbed a sandwich from the fridge.

There is a moment where the kids be, they like stop being like babies and they start just being like roommates. And you're like oh like you're just like.

It's like dude, what are you in the fridge, bro?

Like did you ask, did you ask if you could eat my sandwich?

It was his sandwich. To his credit. We got, we got a takeout yesterday but. But still I was like dude, it's 5am 9/10 of the law, Jordan. Yeah, it is.

Anyway, apparently 8sleep.com get a pod 5 code TVPN 30 night free risk, free trial, free returns, free shipping.

So apparently the judge issued a sealed decision in the Google case. Trying to figure out what. Any more details?

Oh yes, we finally got the Google result but we don't know exactly what it is. I don't know. In other news, Benny Safdie collapses into tears during the 15 minute standing ovation for the Smashing Machine. Do people realize if the Rock wins the Oscar he's going to run for president? 41,000 likes. I think people want the Rock to run. That would be great. What do you think? You think the Rock could pull it off? Did you see his new slimmed down look? He lost some weight. He's not, he's not.

I mean do you think he's just getting ready for mass the mask a mass gain run?

Yeah. I mean bulking season is coming clearly.

Yeah. I mean it's hard because he's so bulk.

He is. He is getting older. It seems like it's probably a more healthy decision to take off some of the weight and not walk around. But I'm excited. I know you won't be seeing this movie because you never see any movies, but I will be checking out the Smashing. The Smashing Machine looks pretty good.

Anyways, can't figure out what's happening with Google yet, but the stock is up in after hours trading. Likes it.

This is. This is a good one. So there's an interview with the CEO of Chevron in the New York Times and there's a quote here. So what are you trying to learn about right now? Asks the interviewer. And the CEO of Chevron says artificial intelligence said. What's the last thing you asked AI My last question was about was the biggest. Was about what was the biggest merger in the United States last year? And they say what was it? I said our acquisition of Hess.

This is the power of AI.

Power of artificial intelligence.

Priceless.

Just going to.

You're the CEO asking about your own activities.

Yeah, I don't know. What was he expecting a surprise there like that is such a funny. Such a funny result. Anyway, we have Mike Maples from Floodgate Capital in the restream waiting room. We will bring him into the TDP and lpm.

Mike, what's going on? Welcome to the show.

We're doing great. Thanks so much for hopping on. I don't know if you read that Article. That interview with the Chevron CEO, did that surprise you? No, I haven't.

You know, I got to say that it's a little bit out of my lane. I invest way too early in startups and so Chevron is not top of my radar.

Radar. Yeah. Jordy.

Well, yeah, I still think it's fun to use AI to research yourself. The Chevron CEO was researching his own business activities to validate, I think. But I'm sure it's fun to look up some of your best investments in ChatGPT. But it's great, great to have you on the show.

Yeah, thanks for having me. I've been fans of what you guys have been doing, even. Even when it started as the Tech Bro podcast.

Long time ago. Nine months ago.

That's right. Yeah. I think we might have replied to one of your posts. We had some fun with that. It was a good time. Yeah. Anyway, what. How would you introduce yourself to the audience? What's the right way to think about your position in the ecosystem right now?

Yeah, I'd say that I'm kind of one of the OG seed investors. And so, you know, seed investing wasn't really a thing 20 years ago. You know, you either scared up a few dollars from angels and friends or you went straight to raising 5 million. And so guys like myself and Josh Koppelman started to create these seed firms and things have obviously changed a lot now. Nobody questions whether they're seed investing now. There's like 2,000. You know, if you go to LinkedIn and type seed investor, I think you get more of those than there are founders now. So it's changed a lot. Yeah.

What's been your strategy for dealing with the change in the market structure? I mean, some firms have been like, I need a massive growth fund so I can ride my winners all the way up. I need to really incubate stuff and get huge ownership stake at the early stage with less capital. What's been most enticing to you?

Yeah, what I started to realize was I always say to founders, you have to avoid the comparison trap at all costs. And that startups role in the world is not to be better, but to change the subject. I realized about 10 years ago that I was a hypocrite giving that advice because here I was, one of 2,000 seed funds. And so I was like, you know, I'm playing the comparison game all the time. And so what I started to do is to try to say that I don't want to be pitched anymore, that I want to find founders before they figured their ideas out and get to know them and come up with ways to help them evaluate whether they really want to pursue the idea or not. And so, you know, there's that famous essay that Paul Graham wrote and Brian Chesky talked about founder mode. I like to find people who are in builder mode.

Sorry, a little sound effect for you.

Yeah, we'll have a complimentary one for, for builder mode, I suppose. But I like that who are, you know, pursuing something almost to an unreasonable degree. They're down some rabbit hole. They're not sure it's a business yet, but they're doing it because it's interesting for its own sake. They're, you know, people are living in the future. So that's really what I try to do is find the. What the prime movers to be. And this may appeal somewhat to your all sensibilities, particularly some of the founders fund adjacent stuff. Right. But you're kind of, you know, I just think that some people just have this very rare blend of determination and original thinking. And those people to me are the prime movers. And my job is to find those people before the rest of the world believes.

Do you have particularly favorite lakes to fish in? You know, there's the folks that are, you know, at Stanford and Waterloo constantly. You know, the Thiel Fellowship is pulling from pulling kids out of college. YC pulls a lot of new grads, casts a really wide funnel. Chris Dixon was famous for kind of hanging out on Reddit and finding like these little pockets and communities where, oh, there's a bunch of people doing 3D printing online. Let me go find a 3D printing company or VR or whatever else. That's where the Coinbase investment, I think came from. Saw the community there. There's other people that are specifically great at pulling founders out of big tech companies. How do you think about the different lakes to fish in for the next generation of founders?

Yeah, One of my mental models, I call it freshmen and seniors. And so, you know, like when I first met Justin Khan, when he was doing Justin tv, which became Twitch, he's a year out of college and he's sold his prior company with Emmett Sheer on ebay.

Yeah.

And you know, these guys didn't know much about.

They sold their company.

You don't know this story?

No.

Yeah, their first YC company. I mean, you can tell it, you know it better than I do.

Oh, yeah. So I'm sitting in a coffee shop with the Weebly guys and they were pitching me and the pitch is almost over and I See this guy show up in the door, the coffee shop, and he's wearing a baseball cap and a camera on it and wires going into a backpack. And I remember thinking, that's kind of a strange dude. I wonder what's up with that guy. And, you know, as. As the meeting's wrapping up, he's walking into the place, and David Rosenko weebly goes, did you get your email earlier today? I was like, what are you talking about? Well, we got this friend, Justin Kahn. He's got this new idea, Justin tv. And right then, Justin sits down and turns his laptop around, and I'm on the laptop screen because his camera is looking at my face. And he said, I'm going to do a 247 reality show of my life and broadcast it on the Internet. And I was like, justin, that's. That's one of the dumbest things I ever heard. Like, that's not even how reality TV works.

You know.

They script it and they condense it down. Nobody wants to watch you like you're some fish cam all the time, right? Like, that's not like you're not even describing what the business is. And he's like, you're supposed to be a seed og. Why are you shitting on my idea? And I was like, you know, it's terrible, but, like, what's. How do you even do it? What's in your backpack? And so he showed me how Kyle Vogt, who was a genius, had designed this thing that did EVDO cellular combined with Internet software. And so that night, I was just, like, researching them a little bit more. And I'd seen that Justin and Emmett had sold their prior company on ebay. So they had a calendar company called Kiko and as an Ajax calendar at the time. And Google decides to Google Calendar, and they're like, okay, we're out of business, so why don't we try to sell this? They try to sell it normal ways. Nobody will buy it. So they just put the company on ebay and they sell it to two cows for $250,000.

There we go.

Incredible.

And I thought, you know, just common sense. We want to sell something. I don't know, put it on a big marketplace.

But one of the things back to kind of, where do you look for things? I like, I call those freshmen founders because they haven't been polluted by the conventional wisdom echo chamber of the Valley yet. They think that all you need to do is build stuff and sell stuff, and the rest of it is a waste of time. They don't even know that there's time to waste other than doing those things because they don't have to unlearn anything. They don't know much yet, and that ends up being really valuable because they end up caring about the right things. And then sophomores and juniors, I have less luck with. So the sophomores are like, they read a few too many blogs. They spend a little too much time on Twitter. They know a bit too much that's not worth knowing. And then the juniors are the worst. They've worked at Google and Facebook and a bunch of fancy companies, and they decide it's time to be anointed as a founder. And so they raise a $5 million seed round and pay their buddies quarter of a million bucks a year each, and usually, you know, run out of money halfway into it, raise some more, and then they decide not to do it because they can get a bigger job that pays better back at a big.

It's also interesting, too, with Justin. He. He didn't have enough experience to realize that it was a dumb business opportunity to stream his life. But then it turned out, you know, over a decade later, some of the most popular streaming content is people just filming their entire lives. Like, he was just living 20 years in the future.

Yeah, yeah.

Justin wanted to be an influencer before there was such a word. Right. He wanted to be Internet famous. And so what you realize in hindsight is he was trying to solve a problem he had. And those are the types of freshmen that I've had the best luck with. They're scratching their own itch. Right. They're living in the future. They. They don't really even think at first that it's a business opportunity. You know, Marc Andreessen, when he did the Mosaic browser, when he's 21 years old, he's just trying to make the Internet useful, and it wasn't. And so he built what was missing. And then the seniors I've had luck with, too, like Casser Yunus at Applied Intuition.

Oh, yeah.

A little bit of luck.

I love him every time he comes on the show. It's so much fun.

Yeah.

And so.

So, like, the thing about Caster is he was experienced enough that he knew that what matters is building and selling and all the other stuff is window dressing. And so, ironically, the freshmen and the seniors have the same priorities, but for different reasons. You know, the freshmen have the benefit of the beginner's mind, and they don't know a bunch of stuff that gets in the way of them succeeding. And then the seniors Know enough to know that some of it's not important, that it's. Yes. And so they. They focus on the stuff that matters. And I love working with both because with the freshman founders, you're trying to help them avoid avoidable mistakes, whereas with somebody like Caster Yunus, you're trying to help them run up the score, you know, because, you know, he knows what he's doing. You know, he doesn't have to learn Business 101, but, you know, there, there are other things where you could be helpful.

Yeah.

I even noticed that my, my, My first. My first company, an ad network, was like very freshman mindset. I mean, I was very young at the time, but it was like, get something for one price, sell it for another, and just do that over and over and you're going to have a business. And then my second company was like, oh, we need a wedge product and we need to do this and that and. And like, if we're gonna do this and then that and then that's a really, you know, created something complicated. Cause maybe I had read too many memos on tech Twitter or whatever. And then third, being tvpn, it's like we just. We have a daily show. We try to make it better every single day, and we just do that over and over. So I think you can see that kind of freshman or senior mindset even across an entrepreneur's companies.

Yeah, yeah. And I think the other thing you guys did. Well, I don't know you. I wasn't there when it happened, but I imagine that when you started it, you weren't super attached to how successful it had to be. It was like, you take a small enough risk that you're not attached to whether the risk pays off or not. And if it starts to go your way, you just do more of it. And a lot of the. A lot of the great startups that I've gotten involved with had that quality where, you know, you didn't try to think of a startup. You were just doing something that was interesting and it just kind of fed on itself. And then one thing led to another.

Yeah. Who else sticks out as that freshman archetype that you've worked with in your career?

I'd say the guys at Weebly were that way. So that was a very fortuitous two hours in that coffee shop, one after the other two deals in one hour that folks did really well.

Just do that every day and you'll produce trillions of dollars in.

Talk to me about. About Weebly's business, how it grew the actual economics of that industry. And then I want, I want to bridge to like your take on the new crop of site builders because we've been having this debate over the lovables and the different companies that are playing in this space. V0 There's a whole bunch and we're kind of going back and forth on like, is it just such a big market that everyone wins and everyone builds a huge business or is there some sort of winner take all dynamic? So if you could walk through the Weebly story and then kind of bridge to modern web development, I'd love to hear that story. Yeah.

And the Weebly, it may not satisfy our modern desires, but it's kind of interesting. So these guys were about to graduate from Penn State and I think we invested, I think they raised at $650,000, at $2 million pre money money. And it was like Anderson and Biden Senkit, a couple guys. Those were back in the days when Paul Graham would call you and make sure you were going to show up at demo day. Right. Because the batches be like 10 to 15 companies. And so I remember it's like two months after the money's cleared and have another site visit with them. And I'm like, we ought to start thinking about what we're going to need to do to be ready to raise a Series A. And I said, so what do you guys think we need to do to be ready to raise a Series A? And they look at me like, what are you talking about? And I say, well, you know, you've raised $650,000. And they look at me like, I know, right? And I realized that like to them $650,000, it might as well have been 650 million, right? There's more money. They were, it was illegal for them to have that much money. And so they ended up, they ended up not raising money again until many, many years later from Sequoia. And at that time I think we were like 65 times in the money on the investment. So I don't know that it gives any lessons for today's world other than just I kind of make fun of my ability to predict how these things are going to turn out. And that's why I'm so founder focused. Right. I just think that determination is just such the high order bit.

Do you think ventures easier or harder game than it was back when you could get, you know, invest 650k to 2 cap into some great founders? Because in some ways it's like, it's much More competitive now, but also the nature of there being more capital means that.

And for extra reference, Weebly, I mean, I'm not sure if this is 100% right, because. Overview, but. Acquired by Block Square for $365 million in cash and stock in April 2018. $365 million. That's a seed round nowadays.

Oh, yeah. So there's no question it's gotten harder as an investor. Right. And I think even as a builder, I think there's a lot more distractions right now for the founders and there's a lot more sloppiness on the playing field. And so you got to play the game that's on the field, whether you're an investor or a founder. I think, you know, back in the days when, you know, Justin was an Emmett, were doing Twitch or, you know, what became Twitch or David and those guys, Dan doing Weebly, I think it was more of an act of rebellion to start a startup. Right. The dot com meltdown had happened about five years prior. You know, startups were not a popular, sexy path for people. It was. It was the path for people who didn't want to have a job at a normal company. And that was, you know, the only way they could avoid it.

It's incredibly trendy right now. It has become like.

It's trendy and it's comfortable, it's tracked.

Yeah.

It's come, you know, if somebody can quit their job in big tech and then maybe they're not making quite as much, but. But they've got a nice office and they can, like you said, hire all their friends.

I will throw out a counter to this, which is I was thinking about the El Segundo companies and the hard tech companies. I don't know if you've spent any time with those folks, but. But that feels like mountain view in 2008 to me, where these founders are taking extreme risk. There's not going to be a $10 billion acqui hire from some Mag7 company for your rain cloud seeding company. If it fails, you're getting a normal job and you're not doing tons of secondary and raising a ton of money and hiring everybody. And so you really are burning more of the ships when you do one of these crazy hard tech companies. But I don't know if you spend any time with those or you have a take. It's funny you say that.

So I think it may have been the only company I invested in in 2021. Certainly in the second half is a company called Hadrian.

Oh, yeah, yeah.

And like, I just think Chris Bauer is a stud. Right. And it's like, you know what we're describing about the types of founders who overcome obstacles and move the world down a different path. He's one of those. And so.

But.

But he's a perfect illustration, right, of what you're looking for.

And I mean, I don't know if 2021's the exact year, but, like, there were a couple years there where, like, you could see the toll that the business was taking on him. Like, he was working extremely hard and you could tell that it was not. There was not some cushy soft landing for him. It's like, either you build the thing, you get it to work, and it becomes really big, or you're kind of sc.

Screwed.

I don't know.

Being a real founder in some ways is more of a curse. Right. Like, most people, it's just like, it's not a fun job. It's kind of a shit.

Yeah.

And it's like if people really understood and it's. But it's like you're. You're called to do the thing and so you can't not do it. So it's. It doesn't feel like you have any choice but to do it because the, you know, there's no way Chris isn't going to do Hadrian. Right. He's just too. He's just too high agency and too high commitment. Commitment to let it fail. Right?

Yeah. You ask any founder what the lowest point in their life is, and it probably has to do with their business. Right. Maybe some family thing, but almost always they have, like, a specific moment where everything was.

Yeah. Zooming out. I was reading the Caesar's Palace Coup this weekend about the birth of Apollo, the private equity group. And I was thinking about how these. There's these eras in finance when there's booms like the LBO boom in the 80s, the high frequency trading boom, and then there's multiple venture booms. But I was wondering, I was trying to think about, like, who's the person, like, under 40 who's building the next great financial firm? Like, there are lots of great young investors who are writing checks or building companies, and there's a lot of founders. But I was having trouble putting my finger on someone who's young and actually set on building a financial firm of some course. I don't know if anyone comes to mind for you. I asked ChatGPT and the answer it gave me was Josh Kushner, which is.

I would have said Josh which is great, it's true.

But also it's like he's an investor in OpenAI, so I don't know if it's fair play. But is there anyone else that you've seen that maybe is taking a different tact in building AI financial firm for the future? Like what your advice would be to somebody who wants to actually make a career out of venture capital? Leopold's another good one, I think. Yeah.

Anyway, yeah, it's a good, it's a good question. I haven't seen a lot. You know, one way I've. One way I would come at that question is to say what is the financial product that entrepreneurs aren't getting? And I think that it's probably some combination of venture capital meets project finance. And so I think you have some of these that are, you know, in the world of atoms and bits. And it only seems like Elon Musk and Palmer Luckey and a few other guys have been able to pull them off. And you could say, well, that's because there aren't many of those. And that. I think that's true. But another way to come at that might be to ask, you know, is it, is it a good thing that Elon had to basically bet his entire PayPal fortune to make Tesla a possibility? And but for that there would be no Tesla because he had to bet all of his winnings on that. And I think Palmer probably similarly invested a lot, but he also had help with the Founders Fund folks who were pretty off the beaten path at the time. So I do think that there's a legitimate argument that says that a lot of our institutions that combine the worlds of atoms and bits need to be reimagined. And people say, why does a venture capital do that? But I don't think venture capital as it's designed today is, is tailor fit for that. I think it's probably some type of new innovation. Right. And it would be almost the opposite direction of yc. It'd be something that is more in the upstream capital markets rather than lean startups and that kind of thing. But I think, I think that could be kind of interesting. I'd like to see somebody do that.

Yeah, we're starting to see a little bit of that with, I mean, you hear a lot about those hard tech rounds where it's very clear that the headline number is a mix of debt and equity and that's usually two different firms. And then there's always been this question of like, is there a way to bring some sort of like Silicon Valley Technologist mindset to essentially a turnaround of a legacy company where there are some assets, but there's something that the company can stand. Like, that was what Chris Power at Hadrian was working on before he was doing a search fund.

Yeah, yeah. And it's interesting, right? There are some people that I look to. Another guy would be the Stefan Bonsell of Moderna. You know, like, you have some. Like, one company I was involved with back in the day was Okta. And when you Okta, you're like, okay, these guys are from Salesforce. They're really smart. They're saying there's going to be lots of cloud apps, they're going to need identity management. And I was like, sounds good to me. Right? Like, but you're like, that's a very plausible future and they're the perfect guys to do it. There are other futures that are going to take a lot longer to happen and much more divergent from the present. I think that Moderna was that way. Right. Ten years and $5 billion before they ship a product. SpaceX is that way, Tesla's that way. And so to me, the interesting question becomes, can you come up with technical risk takeout gates where you'd have funding that follows the initial funding, and then you don't have to have somebody like Elon Musk be a miraculous fundraiser going throughout the world trying to find money wherever it exists. People forget that's how it was 10 years ago. Right. Even after they went public. And so I'd like to see the capital markets. Part of what was good about seed investing back when I was doing it at first, or Josh, was that we were doing something that entrepreneurs needed that they weren't getting. And so to me, most of the good answers in financial innovation have something to do with that. You have somebody who would make great productive use of capital is not getting it somehow, and the markets have a gap in their ability to supply that capital in that way.

Well, I think in the case of Hadrian, aren't the capital markets working quite well in the sense that he raised a bunch of risk capital and then was able to de risk certain customer relationships and process, and then now he can access more traditional forms of debt.

And I imagine if the American Dynamism team at A16Z was watching this, they'd say, hey, Maples, what you just described, that's what we're doing. And there's a lot of truth to that. So I'm not sure Chris could have done Hadrian 10 years prior to. And so I think that There were some changes that were happening that were creating the conditions, but I'd still like to see more. Like, for example, I personally invested in Boom Supersonic because I think that Blake is just wildly ambitious. We just need more people like that. We need to have permission based innovation in the world of atoms and not just bits. And the more we can do that, I think the better. Yeah, yeah. And so that's, that's what I think is missing.

Yeah. I mean, at a high level, it feels like entrepreneurs are pretty catered to on the capital market side. Like there is a. There is dollars at every scale, every order of magnitude.

I mean, I don't, Yeah, I don't.

Know any hundred billion dollar rounds. And then people can snap their fingers on AX and raise 100k in the DMs if they need to.

Yeah. I don't think I've met a grant. I'm not. I haven't met an incredible founder in the last five years. Somebody that, you know, just personally I feel is incredible. That hasn't been able to raise.

Yeah. That has that part of their origin story. Like they might have other struggles. Oh yeah, we got in a lawsuit or, you know, oh, we, you know, we had to pivot entirely because some company steamrolled us or we misanticipated the progress of some underlying technology. But the. Oh yeah, we couldn't raise for five years. That's not really a story right now. Maybe the bigger question to answer in just the broader Silicon Valley is like, like, how do you get more of those freshmen, those weird thinkers, those people who are going to go and go from Groupon to building supersonic planes? That's a crazy move.

Yeah. How do you get people that aren't just seeking status?

Exactly.

People.

Less base hits, more swing for the fences.

And by the way, I think part of the reason that the people who succeed at it do is like, I think Elon's great superpower, among many, is that he only pursues business ideas where he existentially refuses to fail. And so, like, Elon never starts a company and says, well, I hope it works out. Easy come, easy go. If it doesn't, you know, he's like, I'm only going to tackle problems where I will never freaking back down ever, no matter what. And so like, if you say, hey, getting to Mars is the most important accomplishment I want to achieve in my life, if you don't sit there and handicap the odds, you're like, Han Solo right in an asteroid. You're like, don't tell me the odds, right? You're like, this is worth pursuing even if the odds are against me. And that has a way of impacting the odds, right, of your ability to succeed where others can't. Because if you'll even countenance the possibility of failure, it changes the equation, right? It changes the whole risk that you take.

Where do you think we are on the AI hype cycle, the Gartner hype peak of inflated expectations? Or are we headed for the trough of disillusionment?

Oh, man, probably all the above. Here's what I've been thinking a lot about is in the era of the microprocessors, you had mass computation and then the Internet, you had mass connectivity. And what got commoditized with micro age was the transistor and then you had the packet get commoditized. And so what I'm interested in is what happens in a world where we have mass cognition and where, you know, the inference unit, you know, becomes commodity. Because right now everybody's talking about the inputs, Nvidia chips, hyperscaler models, do we need more energy? And all those things are valuable. But it's just like in the early days of the PC era, everybody talked about the hardware. People didn't talk about software until much later. And so I think what's interesting to me is to ask not what's happening, but what is going to become scarce, given all the stuff that's happening, you know, what will the new scarcity be? I don't think that's been determined yet. So that gives me a lot of optimism. But it's not the latest model du jour, and it's not the latest chip du jour. It's not the, it's not the latest scaling factor that makes things more abundant. It's the thing that becomes rate limited in a world where it's a given that the new abundance happens. And so that's what I'm looking for these days. So in a world where microprocessing is free, software becomes scarce because you have to make all these machines useful that are everywhere. And in a world where the packet is free, what becomes valuable is the owners of these networks that aggregate attention and users and create network effects and become the systems of record. And so, okay, what will be the monopoly AI companies in a world where cognition is abundant? I don't think we know yet. But that, but, but to me, that is the question that is really interesting.

That is, that is 100% the question. That is, that is fantastic. I love that I'm going To be digging into that for years. That's a fantastic.

He wrote the microcosm and then the telecosm. Like I wish George Gilder would write the cognito cosmic and talk about what's going to be the new scarcity that complements the new abundance.

Used to be that we didn't have enough Reddit threads on niche topics and now the LLMs will just hallucinate one for you.

It's crazy. Anyway, we're keeping our next guest waiting, but this was fantastic. We'd love for you to hop back on and continue the conversation. I really enjoyed this. Thanks.

Hope you have a good trip to the coffee shop later. Hopefully you meet the next Justin Justin Kahn and the Weebly founders deals out of it.

I could get another twofer in the next three months. I'd be happy.

We're rooting for you hopefully to two cap again.

Yeah, yeah, yeah. Bring back the two cap. Bring back the two cap.

Yeah.

Two, two.

Two for one.

Out in two hours and a two cap.

Incredible deal. Well, thanks so much for hopping on Mike. We'll talk to you soon.

Cheers Mike. Have a good one.

Talk to you soon. Let me tell you about AdQuick.com out of home advertising made easy and no show. 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. Our next guest is in the Restream waiting room and as a benefit of Restream we got our first commenter on LinkedIn I believe.

Let's go.

The chat is just blowing up. We have chatters on. Welcome to the show here I see folks. YouTube. Thank you. You are live on TVPN. Welcome to the stream. How you doing? Woo.

Feeling good. Great to be here. Thanks for having me.

Do you remember meeting me? We met in near Stanford like a decade ago with Ankur Jane who now runs that amazing Fintech Built Built.

Yes.

Am I misremembering that? Do you remember this? I think we met years ago with Ankr.

This is when I was at Human.

Yes, I think so.

Okay, awesome. Good to see you again.

Good to see you. We're back. How would you describe where you are right now? Give us the intro. Introduce yourself to the folks who are watching.

I am a general partner at Long Journey Ventures. We're a pre seed and seed stage firm and our core thesis is that we think the biggest companies of tomorrow will look really weird at the pre seed and seed stages and our mission is to be the Second believer in the magically weird.

There are so many weird things in the portfolio. We had Cyan and Lee on the show, what was it a couple months ago, talking about? The diamond company. The cloud seeding company I believe is in the portfolio. There's just weird stuff all over. What else is in the portfolio?

And of course, Justin is a close friend, venture partner. He's always investing in weird, silly things. And then like five years later, they're. They're decocorns.

Totally.

It's a good habit.

Did they mention the robotic eyelash extension company?

No. What's that? Explain that to me.

Oh, yeah, it's a robot that applies eyelash extensions. Instead of taking an hour, hour and a half for a human to do it, the robot can do both eyes at the same time and it takes 15 minutes.

That sounds high risk because if the robot, like flinches, it just rips your eyelashes out.

Well, that's why they invented the anti flinching technology.

There you go. There you go. Patented.

It doesn't flinch.

I mean, humans flinch too. So it's not.

It's not.

It's all high risk.

It's true. Superhuman, unflinching AI. This is the. This is going to work.

Yeah, I think. I think we. I'm glad you guys do this. You know, obviously, I mean, it seems like the rest of the partnership, we've had them all on the show and there's not enough people that are just like, actively trying to find the weird stuff, but, like, you guys actually do it consistently.

A lot of people say they want to find the weird stuff, and then it just winds up being a lot of B2B SaaS. Defense task. Whatever's on trend.

Whatever's on trend.

Okay. We do quite a bit of defense tech too, but I think we were doing it back when it was weird or taboo.

For sure.

I think Cyan was one of the.

Two years ago.

Yeah.

Yeah. Is there something to the now contrarian statement that occasionally you want to do consent census investing and you want to be the momentum trader? It's certainly paid off for people in AI over the last few years. Can you at least see the value in that?

Oh, for sure. We have quite a bit of cognitive dissonance on the team because so many talented builders are building in AI. We want to play the game that's out on the field. But yeah, it kind of hurts our souls when things feel consensus and it's a question like, are we too late? Because, I mean, we feel like the best time to invest in seed and pre seed is when things feel absurd or non consensus and we want to invest before they become consensus. That's where the alpha is.

What's internally your feeling on the AI hype cycle where we are, it feels like, like it's been like punishingly dominant for the last few years.

Are you overall expectations are inflated?

Are there pockets of optimism? How are you seeing kind of the overall AI boom? Sam Altman recently said we might be in a bubble, which is kind of a crazy thing to say, but who knows, maybe he's having fun. What is your current thesis on like opportunity within AI?

Yeah, I mean we like to think of like the second order effects and.

Especially.

Have been looking more towards deep tech and the implications and how AI creates a tailwind for deep tech companies, you know, robotics, biotech, etc. Because we feel like, you know, working in those spaces, there's a lot of defensibility in doing something that's really, really hard. So that's kind of how we're thinking about it.

How do you dial in the opportunity there? Obviously you have big companies. Tesla just put out this big, the fourth master plan going into humanoids. It seems like it's an incredibly expensive place to play. But then we just had a friend send us a new Roomba that just like a new friendly robot vacuum cleaner and it seems like, I mean it's a fantastic product. I'm not exactly sure how the business is doing, but it seems like a fantastic product.

I think they're doing really well.

And those are like two wildly diverging opportunities. What are you seeing that's kind of interesting in the deep tech AI enabled, like AI tailwind world?

Yeah, I mean we're looking at everything across robotics because I mean there's just the ability to train robots because of LLMs and physical AI. I mean it's just gotten so much faster and easier which is, you know, the cost of training robots to do something that's actually creating value has just gone down immensely. So that is one of the tailwinds that we think has enabled. You know, we've invested in companies that, you know, doing case picking and distribution centers, centers, you know, we've invested in robotic eyelash extensions there, you know, many, many applications of robots. We've looked at a lot of, you know, in home robots. I'm not 100% sure how people will feel with a humanoid like figure in their home. I mean, I don't, I don't know if I personally want that, but yeah.

Yeah, on, on that. Do you think that, that we're learning Anything from the reception of the AI companionship to how robots will be received in the home. Because I agree with you that having a robot over there that's in my house seems maybe a little black mirror a little odd. But at the same time, I also would never have predicted that, you know, millions of people would be complaining about chatgpt4o going away because they saw it as a friend and a coach. And then, you know, Elon's going into the romantic space and there's like all these different areas where it seems like people are actually, you know, incredibly receptive to having a personal relationship of whatever kind with the robot. Do you think there's something we can learn about that or from that?

Absolutely. I mean, I am definitely reserve the right to change my opinion over time, but I think today it would be creepy and black mirror esque. And I am much more into the idea of like ambient, you know, single purpose objects doing it, doing a task, like something that lives in the laundry room, you know, moving your laundry or folding your laundry. And you know, that can be one thing that lives there and then I will have another thing that lives. Lives elsewhere. And I think like ambient robots, but not, you know, necessarily rosy.

I completely agree with you. And yet I can immediately imagine the black mirror scenario where my laundry robot is like, John, I'd like to actually go trim the trees today.

Like, you know, or I figured out a way to. I figured out a way to run the laundry with the door open and I'm going to flood your home. We had somebody on the show that makes like a bedroom lamp that can fold your laundry.

It was the exact.

I love it.

It was really cool.

But the thing is, you could easily imagine the black mirror scenario where the lamps just start killing you, just poking you.

It really lent itself to the dystopian world.

How do you guys talk about timelines? Because something that stood out to me from conversations with Lee and Justin, and I know you guys are talking all the time about deals is they're willing, from my sense is they're willing to invest in a founder and be okay with them, like going and just wandering and tinkering for a long period of time. And there's less of this pressure of like, okay, we're leading your seed and then you're going to sprint to the A, like hopefully later this year.

Did you do the Seed and Crusoe or something like that?

Yes, yes.

Crazy deal.

I mean, I think it would be rough if we were named Long Journey Ventures and we. But you have to get to the.

Series, long journey, short time. Right.

Get to the A this year or actually medium journey.

Yeah, Pump more money in this thing. But yeah, I mean like unpack a little bit more about like, is that just matching, finding the right founders? Is it a specific vibe that you bring? Is that like not taking a board seat, Taking a board seat, coaching the founders?

We do not take board seats.

Okay.

Yeah, we do not typically take board seats. And yeah, I think sometimes when you're investing in the absurd before it becomes consensus, sometimes you whiff it, of course, and it's just a matter of talking that through with the founder and usually the founder realizes it even before you do. And so yeah, we have quite a few companies that end up pivoting and re navigating the idea maze. But yeah, sometimes it lands and then you're one of the earliest investors in something incredible like Crusoe.

What a crazy par for the course. Yeah. How have you been processing all the news about Jevons Paradox and the token costs coming down, but then companies using more expensive models and maybe this is going to hurt margins and whatnot. Like did you, did, did you go through the same roller coaster ride that most people did during like the deep seek moment? Or how are you, how are you processing the overall temperature of like how the latest trends in the AI models just affect like the companies that are actually building on this technology day to day?

Yeah, I mean I think the cost reductions are obviously extremely significant. And I think, you know, people right now, a lot of enterprises are in the kind of pilot or experimental phase where I think they want to use, you know, the highest performance models based on the academic benchmarks. But I think cost reduction or you know, the cost profile will really come into play when people want to start deploying, you know, AI companions to all their employees or you know, autonomous background agents, you know, these sort of deployments across many workloads that will consume a lot of tokens. Then I think costs will really matter. So I think that's kind of like what I'm looking out for is not just increases in performance, but how these cost reductions will enable scaling more use cases.

Yeah, we were debating notion earlier. Ivan said that these gross margins went from just scraping by at 90% and now it's down at 80%. And to me it seemed, it seemed like a credit I'd take all day long for growth and a better product and something that's AI enabled. Of course you got to build the right product in there, but it seemed like a no brainer and that's probably why he's talking to Chris Mims at the Wall Street Journal.

Definitely.

Yeah.

About it.

It was interesting and I think like this sentiment has been interesting. It almost feels like the general reaction or like the gen pop reaction to new models is that we're almost in like the iPhone era. I mean, I remember when people used to wait in line, people freaked out about like new iOS releases and new iPhone releases. And now people are like kind of definitely deeply ambivalent about whether they're going to get the new iPhone or not. But it almost feels like the public feels like we're in that spot with the newest AI models. But I feel like that, that misses the picture on the cost reduction side, which I think is really powerful.

Yeah, I mean, it's interesting. I mean this is why so many people are so bullish on, on, on ChatGPT and OpenAI, despite all the chaos and competition, is, is you go walk to the average person down the street. Have you tried any AIs? They'll say, yeah, I've used ChatGPT, it's cool. And then if you go to those same people and say, hey, I have a something like ChatGPT, it's, it's twice as good. They're going to tell you, okay, I don't know. I don't know what that's really going to do for me. So, yeah, it's. It felt like six months ago we were in this era again. It was like the early iPhone days, like you said, where it was like, oh, a new model came out, let me rush to try it. And now there's way less of that energy.

Yeah, totally.

It's good for the new incumbents.

We were talking to Naples about this at the early stage. This analogy of finding good lakes to fish in for outside the box thinkers, entrepreneurs that might be up for a long journey. They might wander for years. Like, where are, where are some of the underrated places where you're seeing pockets of entrepreneurial talent bubble up? Like there years ago, it was like, you know, like the PayPal mafia was like a massive explosion of like just back all those companies, they're huge. The same thing happened with other big tech companies that threw off a ton of talented entrepreneurs. There was like the invest in every Stanford grad phase. There was get kids to drop out of college to do startups. Like, where are the interesting pockets of entrepreneurial talent that you're seeing just across the globe?

We're just waiting outside. YC Demo day.

No shitty.

We have partnered with a really cool Organization. I am really excited about where they're going. It's called Edge Institute and they run these monthly pop ups called Edge Esmeralda. They're about to do a month long one in Patagonia. They did one in Healdsburg back in June. And it attracts a lot of weird thinkers. It's not all founders, it's a lot of researchers and people who aren't necessarily necessarily in the kind of entrepreneurial ecosystem, but it's a lot of people with crazy ideas. I mean that's the whole concept is Edge city. People living on the edge, doing things on the edge and operating, you know, in not necessarily societally accepted ways right now, but like probably will be consensus in the future.

Yeah, that seems like a good, good pool to fish in. Just like, like weird thinkers, academics. Just anyone who's like, yeah, they might.

Not be a founder themselves, but they're like, hey, my friend is working on this crazy idea.

Yeah. Yeah, I love that.

Yeah. We did a residency program in Healdsburg.

Back in June and Edge Esmeralda is also building a city. Right. Can you tell me about what's the progress there? How's that going?

They have bought a site for it and are plan. Yeah. And are planning. Planning the city itself.

It's Devin.

I'm not sure how much is public. Yeah, Devin.

Yeah, we gotta have her on the show. That'd be great.

Yeah.

You gotta have her on the show.

Yeah. Devin Zugal, right? Is that the name? I think that's her last name.

I believe so. Yes.

Anyway, we will get her on the show.

She's awesome.

Thank you so much for taking the time to hop on.

Yeah. Great to chat.

Yeah, thanks for having me.

Awesome. Talk soon.

Bye.

Cheers.

Let me tell you about bezel. Get bezel.com you bezel concierge. They will now source you any watch on the planet. Seriously, any watch.

So, results from the Google ruling.

Yes.

They don't have to sell Chrome and they don't have to stop paying to be the preferred search provider. So total, total big tech fix.

Let's go to Tyler. Did anything happen?

Does anything ever happen?

Nothing happened. Nothing happened.

The no on ply market continues to print every time.

No. Tyler is our official did anything happen? Correspondent. Yeah. What was the point of all this? Just to waste a bunch of time and attention?

Also will not be required to divest Android.

Yes. Okay, so nothing. Well, I mean, something happened if you're a lawyer collecting a paycheck.

That's true.

I mean after like what, five years?

This is five years.

Yeah.

Wait, is this the final final final or is this like V1 final? I don't know. We need to figure that out.

Somebody posted Meek Mill about to raise 25mil from a 16Z. Meek Mill quoted it and said my first time hearing that but lol. But for real, I need investors. I don't think they're on Twitter. Donald Boat. Donald Boat responded and said dm.

That's so funny.

Donald Boat will lead you around, but first you need to buy him a private jet.

Yeah. What a crazy needs a jet. Yeah. So I mean the news here is Meek Mill the rapper is going to start an AI company of some sort.

It went viral a couple days ago. Working on a AI tool that can change the the world. Lol.

The funniest thing was that in the screenshot he posted he he'd switched it to 4.0and so everyone was like he's been one shot. He's been one shot.

I mean it really? Yeah, he. He had.

That's a tell.

Yeah. Spec. Spec or open CV basically hopped in.

The chat and said that.

No, he. He was. Yeah. He specifically highlighted that Meek had gone back to four hours. So you can imagine he's deep in the prompts like okay, me and ChatGPT figured out, figured out, figured out the next the AI app that's going to disrupt ChatGPT.

It's great. Love to see it. Yeah, I do Switch back to 4.0 every once in a while, but only when I want it to write a really obviously one shotted piece of prose.

You're right, John.

Yeah, exactly. So if I want to write something that's like it's not this, it's that, it's more than this. It's actually that and like use a lot of em dashes.

Just.

I'll fire up 4o and give it a little teaser comments.

The comments on this are shkreli comments. Let me know if you need help. I got 100 goons ready to go for you. Bone GPT, your favorite rapper's favorite rapper.

Okay.

Reginald says Mr. Mill, I'm a well known AI practitioner. I think you should collaborate with Cluly, your friend. These are some of the most innovative companies in the space. Happy to talk you through some of the players. If you're interested in vc, Braggs just says top.

Okay. Anyway, let's switch over to Ron Rule. He says this is pathetic. Gen Z in the workplace. This is a poll from Fox News. They say 77% of Gen Z in the workforce admitted to bringing a parent to a job interview. 53% of parents spoke with a hiring manager on their behalf. 73% parents help complete work assignments. 45% regularly have a parent talk to their current manager. I think we're pro work. We're pro parent workplace here at tbpi. We've had many parents stop by the ultra dome and it's been great. I don't mind talking to some parents about stuff and I say, hey, if.

It wasn't during the application, parents come.

In and help complete some work assignments. Do it. Tyler, you want to bring your dad in and have him code something for us?

My parents are coming on Friday.

Fantastic. Put them to work. Just let them know they got to be in the 73% of parents that help complete work assignments. Mr. Cosgrove, you will.

Yeah, we're fully in support of all the team's parents just helping them with their job.

In fact, I would insist that they come and they pull their weight and they help. They help organize information. I think we had Michael's parent in the Ultra dome recently. I think. Get them on the switcher. Get them on the. Pull the graphics up. We need all hands on deck. Get the parents in here. This is a pro parent workplace. Anyway, the great lock in of September to December has begun. This is just a general announcement. It's also bulking season, folks. We've seen this. It was teased earlier by will at OpenAI. He said the detwinkification process has begun. We are of course sending him some mass gainer on his journey to become a mass monster.

But great lock in what Meniere is.

Saying that it's bearish for OpenAI.

It's bearish that he's de twinkifying. Why? Why would that be?

I'm in the gym. That could be. No, it's literally keyboard.

It's. Wait. Oh, it's bearish because he's turning into a bear. Because he's going to be as large as a bear. Like a hairy bear man or something.

I'm just imagining Will.

Wait, is that the actual joke? Like twink and bear. Like bearish. Because like the opposite of a twink is a bear.

I don't. I don't know.

Okay. I don't know. I think it's bullish. I think it's very good. I hope he turns into a bowl and.

Yeah.

And. And gets yoked like a bull. That would be. That would be very, very, very good. Lift heavy, run far. Marry early. Eat steak and eggs. We didn't really talk about.

We missed this post.

Somebody, somebody was the timeline over the Weekend.

Yeah, this was. Let me try to find the original. Original quote.

It's deeper in the stack and people like to hate on a JIRA ticket. I mean, everyone was having their take. Some people were hating, some people were just having fun. Jir Ticket said the current vibe is drinking, drugs, 10 to three, five days a week, lift heavy, run far, marry whoever, stay up late, eat spicy Szechuan food. That's pretty funny. Yeah, I don't know, this was something that was like very dunkable. But you know, the.

Yeah, this made me when. When I thought it was fine. The actual quote was the current vibe is no drinking, no drugs. 9, 9 6, lift heavy, run far, marry early tracks, sleep, eat steak and eggs. And I resonated with this so deeply that it made me want to start doing drugs.

Wait, why?

Well, I've just. This. This exactly tracks with my life. Oh, oh, oh.

Yes.

No drinking, no drugs.

It is now so lifted to do this.

Marry early, track, sleep, eat, state Nick. I was like, it's time for binge drinking.

This was sort of the top for that concept. But yeah, you know, I think overall that take is more correct. It's just more from first principles, more foundationally true than not. And so it should, it should stand the test of time as like roughly correct. Even if it's like phrased in a little bit of a incendiary, kind of frothy like style. Yeah, I respect that. Founder going to the. It was the Wall Street Journal he quoted in or something. I don't know. Talking to a journo, like that's pretty funny to me. I think it's fun.

The current vibe.

I think, I think it's a funny quote and I don't think it's. I don't think it needs. I don't think it needs to be fully dunked on. I think you can just be. You can just have fun with it anyway. Well, on that note, find your happy place. Book a wander with inspiring views, Hotel grade amenities, dreamy beds, top tier cleaning, 247 concierge service. It's a vacation home, but better. And we do have to get on with Pyongyang. So we are going to hop on the phone now.

They're going to be. They may send a nuke if we don't.

Yang investment fund pif. You've heard a lot of founders raising from pif. They're talking about Pyongyang investment fund folks. Yep, we got to hop on with Pyongyang. See you guys later.

It'll be a big week.

Thanks for hanging out.

Have a great evening.

We'll talk to you later.

See all of you. Go out there, don't get one shotted by 4o void four zero.

Oh, thanks, Max. The SF standard.

That's right.

Thanks, Gabe, Daniel, everyone who listened, good hanging out with you.

We love you.

Talk to you soon. Bye.

Bye.