Delian Asparouhov, Michael Mignano, Chrisman Frank, Kennan Davison, Markets are Down, We Love Bubbles
12 Mar 2025 · 174 min
This is a podcast titled "Delian Asparouhov, Michael Mignano, Chrisman Frank, Kennan Davison, Markets are Down, We Love Bubbles" recorded and published in March 2025. The content features a detailed, informal conversation primarily between Jordi Hays and John Coogan discussing current financial markets, including stock market volatility, trade wars, AI industry developments, and cryptocurrency trends. The discussion includes market analysis, historical comparisons to the dot-com bubble, and commentary on major tech companies and economic policies. The tone is conversational and includes sponsor mentions and personal anecdotes, reflecting a live or recorded financial talk show format.
Early light what so proudly we hail.
We're live. We're live. Welcome to TVPN. It is Tuesday, March 11, 2025. We are live from the temple of technology, the fortress of finance, the capital of capital. This show starts now. We got a great show for you today. Even though the market's down, we are making the best of it. We are up. It's a golden era for short sellers.
Yes.
That's what.
It's a bull market.
It's a bull market in put. Yes. So rough times out there but no matter what you're doing, you got to do it on public. Go to public.com investing for those that take it seriously. Multi asset investing industry leading yields trusted by millions. Get on public. Move your money around. Do whatever you think is best. Do your own research.
And you know what we're a fan of?
Yeah.
Buying when others are scared.
Yeah, that's good.
That's what we do.
Yeah.
When other are flood in the streets.
Yeah. When others are fearful.
When others are fearful, we get greedy.
Yeah. Greedy. Greedy when others are fearful. Anyway, moving on. We're talking about the market crash. Here's what happened. The Wall Street Journal is breaking it down. The stock market yesterday trade threatens sent the Dow down more than 600. The Dow Industrials dropped after President Trump said he would ramp up tariffs on steel and aluminum from Canada. 50% shares of industrial and financial firms were among the biggest decliners in the S&P 500. All 11 sectors in the broad index were trading lower. Fears about a recession sparked a sell off Monday with sliding tech shares spurring the Nasdaq's biggest loss since 2022. President Trump declined to rule out a recession on Sunday and and said his economic shakeup would result in a period of transition. It's really, it was a really emotionally charged decline, said Katie Stockton, founder and managing partner of Fairlead Strategies. But she added that this is more than just a brief pullback that we're going through. New Labor Department data showed that the US had 7.74 million job openings in January, up from 7.51 million in December, slightly above the consensus for 6.7.6 million openings. So unemployment, ticking up, too many job openings, not enough people getting placed in their roles. Big tech stocks recovered. They started to recover from some of their losses. Tesla shares regained some ground after the EV maker shed 15 of its market value on Monday.
I saw that on account post. You know, there's that iconic shot of what's the Chris Paul is the basketball player where he's Like Chris Paul drills a three to close the Lee, close the the gap to 40 points. That's, that's Tesla going up 3% today after being down.
It's, it's rough out there, but we've said it before. Naturally aspen, naturally aspirated V12 with a gated manual shifter in the next Tesla Roadster. And it's a $10 trillion stock. Heard it here first.
There you go.
Verizon.
Not financial advice.
Not financial advice. But if you see them deliver A naturally aspirated V12 with a gated manual.
Shifter, we know that we will be going turbo long.
We will be going turbo long. Verizon stock dropped more than 7% and was the weakest performer of the Dow Industrials Tuesday morning. A company executive flagged heightened industry competition at an investor conference. So rough time out there.
Complains about competition.
Yes, yes, yes. So a lot of, lot of reactions on the timeline. A lot. Gill here, he says quote and he puts in quotes. Most things are not as serious as they feel in the moment. I don't know if that was about the market crashing, but it seems everything's about the market.
It's all priced in.
I think so. But yes.
I was just workshopping a post which was Being greedy is low key goated when others are fearful.
Extremely stupid. But you send it. Yeah, I love it. What was the original format of that? I don't know. It was something funny. I like that. Yeah, just send it. Okay.
Anyway, this is just for the record. It's a Warren Buffett quote. It says be, be fearful when others.
Are greedy and be greedy when others are fearful. And so buy low, sell high. Anyway, the Kobiesi letter has a thread here on the real reason that markets are crashing. And I thought we could maybe take a tour through this. Over the last two months, the S&P 500 and crypto have erased combined five and a half trillion dollars of market cap. I think we need a moment of silence for that.
Yep. This moment of silence is brought to you by public dot com. Fantastic. Multi Invest. Multi asset investing. Products trusted by millions. Okay, that's back to the show.
That's enough silence. We have, we have just witnessed one of the most sudden shifts in sentiment since 2020. What's happening? Let us explain. Let's begin with the timeline. Markets have known the trade war was coming since as early as mid 2024. In December, tariff threats ramped up. We saw many all time highs in the S&P 500. After that, even after the trade war began February 1, we saw more all time highs since February 20, the S&P 500 has raised a whopping 4 and a half trillion in market cap.
Yeah, just I guess, quick comment here. Saying markets have known the trade war was coming is not exactly. Yeah, not exactly. Like it's hard to say or it's hard to basically position that as fact. This is stated as a fact, but this is clearly their opinion. Right. Many people thought Trump would run, but many people also thought Trump was not actually serious about tariffs. And still in many ways the market isn't fully pricing in tariffs because there's sort of this back and forth. He announces something. He just announced 50% tariffs on Canadian aluminum products this morning. But who knows if that's real, right? There was like a day last week, I think it was Wednesday where if you paid some big tariff bill, like you know, at the end of the day, like it was like you shouldn't have paid it. Like, you know, very odd, very chaotic. So I think the markets, when you look at the last Trump presidency and what the stock market did then, I think the markets to date, the sentiment has just been Trump presidency generally good for the economy because he's a guy that cherishes the economy.
Yeah. I mean the whole thing has become very oddly political. I mean we covered it during the.
Trump pump post Trump presidency becomes political.
That is, that, is that for the first time in, in my life at least I feel like like small 2% moves in the market are driven by executive level. Like the narrative is this is the, this is the problem of the president. Like yeah, like during the housing crash, you know, there's like a multi, multi month sell down and a big recession and way over leveraged. And then people start asking questions and they start asking questions about, well, who's responsible. In part the banks, in part in deregulation. They go back and they find different, different pieces of legislation that might have led to this. Some of it came from the Bush administration, some of it came from the Obama administration. And then, and so it becomes like this bigger narrative. But this is a time where like crypto pops and people will be like, oh, this is because of Trump. And then, and then, and then, you know, S and P goes down to you know, a couple of percent and people, this is because of Trump. It's the worst thing ever. And it all just. My takeaway is that we need a president who is just hyper focused on the short term stock market returns and that's all they're doing every day. They're not thinking long term at all. Like a high frequency trader type.
It's like protocol founder.
Exactly.
Posting.
Exactly.
Which is just.
Which is in many feedback into the market.
Trump is the closest president we've had.
Very close.
That.
Very close.
But he's not doing enough.
Even, even he's put out statements like, okay, I don't really, I'm not worried about the short term performance of the stock market. I'm trying to make America great again over some long period of time. No, no, I want him to say, yes, I do care if the stock market went 2% down, interest rates are negative.
Yeah. There's some angle here where he says, in the first quarter of my presidency, The S&P 500 was XYZ. By the fourth, it had more than 3x. So maybe he's positioning. Positioning. He's really playing the long game.
Maybe the President should have some sort of. You know how Elon had that pay package that was like, if he can get the, if he can get the Tesla stock up to a certain amount, he gets more of it. He gets rewarded for high share prices. Is that effectively the President should have that where like, if the S and P goes up by, by a certain amount, then they get to stay in power longer, but if it drops, then they get fired and then we get.
A new president and we get hyper financialized.
Hyper financial.
It's already kind of like that. Right. You see these senators that are just running up these crazy operating hedge funds.
Yeah, yeah.
And you know, the more, the more, the better they do in the, in the public markets. The more they can invest into their campaigns, which. The more inside information they can get.
Exactly.
Better investors.
This is a great virtuous cycle. One hand washes the other.
Yeah.
That's what we're going for here. Yeah.
All right, let's get, let's get back into this.
Anyway, the NASDAQ is sadly just 8% away from entering a bear market for the first time since 2022. What changed so quickly? The trade. The Kobi letter is arguing the trade war is simply the scapegoat. The real reason behind the market decline is a sudden shift in risk appetite. We've gone from extreme greed to extreme fear in a matter of days. Positioning was so polarized that we have swung in the complete opposite direction. And long mag 7 is the most crowded trade. Everyone agrees that tech is great and the AI narrative and so everyone's pumped into that. Where it gets even more interesting is that institutional capital exited before this decline in tech stocks. Heading into 2025. Hedge fund exposure to MAG7 stocks fell to a 22 month low. Let's take a look at the divergence between the NASDAQ and fund positioning. On February 9, institutional investors built the largest Ethereum short position in history. This came as retail investors piled into crypto on the hopes of a US strategic reserve. Crypto is down 1.
One institution went turbo long and that was World Liberty Fi.
Which Eth.
Yeah.
Oh, really?
Yeah, yeah. What is it, Eric? Trump was basically Ethereum bull posting. You know, saying like now it's my opinion, but now's a really good time to be stacking.
Yeah.
In there. Unfortunately. Another moment of silence. Yeah, well, not if they didn't sell yet, but they, they're down like hundreds.
You know, the whole like, oh, not financial advice. I'm responsible. Yeah, you could get rid of that.
A centralized blockchain that could fix. Do price fixing. Yeah, would be, yeah, would be cool.
Step one is permanently a stable coin to negative 10% and then the fund rates, the fed funds rate needs to legally be negative 10% forever. And then maybe permanently you could just legally mandate that the S and p grows at 10% a year. Forever.
Yeah, there's something there.
Exactly.
We should workshop. Yeah, we should maybe, maybe throw it into a blog post.
Yeah. Crypto is even more supportive of our thesis. Take a look at the bullish crypto developments that have happened over the last two months. Even the US Bitcoin reserve became a sell the news event. So what's changed?
And to be clear, many people said Trump launching a token is so obviously the top. Because there's nothing. There's really nothing. The US government can't launch a token. Right. It would just be competing. I mean, nothing's off the table anymore, but competing with your own.
Every time someone said, oh, this is the end of the road for the craziness in crypto. They've been pretty.
But anyways, it very clearly felt like a massive sort of dying breath of a bull market.
And retail had just gotten hosed again and again and again throughout 2024. So all of the meme tokens, a.
Lot of people wanted to blame it on Melania.
Oh yeah.
Because it sort of pulled the wind out of Trump coin and everybody felt like they were losing a bunch of money or were losing money. Yeah.
But anyway, so, so they go to this Apollo risk list. Apollo was predicting a 90% chance of tariffs coming in 2025, while they were also predicting a 0% chance of a US recession. Fear and greed indices in crypto and stocks have hit their lowest since the 2022 bear market this month. Last year, crypto saw extreme greed levels of 92 plus. But now it's at a polar opposite of 17. Sentiment is the ultimate driver of price in any market, regardless of fundamentals. When sentiment shifts so quickly, outflows hit record highs and cause flash crashes, as we have.
How do you, how do you put the probability of a US recession at 0% if you're Apollo?
That is crazy.
When the President is actively threatening massive trade wars and things that I think, I think, yeah. Bucko Capital had a really good post, which was basically like the President told me he was going to destroy the economy. So I listened and sold everything.
Yeah, yeah.
And you know, it's obviously an exaggeration, but there's some, there's some truth to that.
Yeah. Like the, like Trump, the ripping a band aid off.
Yeah, right.
It's not, it's not. Oh, this is going to be all sunshine and rainbows. Although people were certainly talking like it was going to be so small. Cap funds saw 3.5 billion in outflows. Mid cap funds saw outflows of 2.1 billion. Sectoral funds saw 4.5 billion in outflows. Once again, shift in positioning. This means that getting ahead of shifts in sentiment will be the most profitable strategy in 2025. They argue Vix surges over 70% in one month. The swings are going to broaden. This is something that a lot of people have been talking about. Even I think, Jeff Lewis, you know, markets are getting more aggressive. There will be more swings, more volatility probably.
Sentiment spreads faster is one thing. Right.
Yeah.
You can imagine a world where now, you know, historically you have your college friend group, you know, guys that you just talk about, random business, stocks, et cetera. You might get together with them. Yeah, once. Yeah, once every six months. And they're like, oh yeah, I'm like pretty short the market, right?
Yeah.
Everybody like goes and they go short crazy now. It's, it's a group chat.
Yeah.
And you know, it's just sort of that sentiment spreads really quickly.
Yeah.
We had a friend who went super long. Tesla, you know, basically a month ago. Exactly. Down 40% since then. RIP.
Yeah. Yeah. The idea of going to something like what happened in like the 70s, so there's like languishing stagflation for like a decade or even even post housing crash where the economy was in the doldrums for like years. Seems unthinkable because the swings are just so fast now with COVID down and up and then same Thing with the, with the, the interest rate crisis like down and up so fast. Through technical and fundamental analysis they've been trading these swings. Stocks, commodities, bonds and crypto are highly tradable and they're arguing that you should sign up for their stuff. But anyway, kind of, kind of an interesting post but packing. McCormick had one of the best jokes of the day. He says now would be the perfect time to go to, to hit go on the strategic NASDAQ reserve. I love it. What a banger.
Yeah. And who is saying that if the U.S. government needed them to manage. Oh, it was Keith on the show. He said if, if we started a U. S Sovereign wealth and you know he wants it. Khosla was asked to manage some of the funds he would do. You would oblige as a patriot.
Yeah, yeah, yeah. Here Keith, go, go to play $10 trillion. Become the next Masa. Great, be great. I mean the, the, the, the, the steel man on the strategic NASDAQ reserve is like the original Peter Thiel thesis on like a cryptocurrency that's backed by hard, hard assets. Kind of like the makerdao idea but for like you know, non crypto companies and the idea that you could, you could have like something that looks like a tradable bond or tradable ETF slice and when I go to pay you, I'm paying you not just a dollar piece of paper that's maybe backed by gold, maybe backed by nothing. It's backed by the cash flows of Apple, Google, Amazon and every American business. Feels very stable, feels very hard to implement but was always like an interesting, totally, you know, turbo libertarian dream of the late 90s. Liquidity says PE funds are the chad memes watching public markets plummet while keeping their portfolio marks flat. Always nice to be in privates when the market's down. Power bottom dad says Elon is down almost $21 billion today. That puts him at only checks notes $113 billion richer than the next richest person alive. We did it. Reddit, I love it. So yeah, everybody's losing everybody. All the billionaires. What do they call it? The super billionaires. Wasn't that the phrase the Wall Street Journal tried to coin?
Giga beaners.
Giga would have been way better but you know they didn't use Giga Nair between trillionaire and yes, senti billionaire is confusing because some people use it for centi millionaire.
Yep.
So it needs. I think giga is the right one. Giga billionaires over 100. Yeah, you heard it here for first folks Garcia Capital says I can tell the bottom is close because traders are starting to share Bible verses.
I haven't seen this yet, but maybe I'm not following enough.
I don't follow enough traders to really.
See this, but certainly sharing Warren Buffett quotes.
Yes.
He's known for saying being greedy is low key, goaded when others are fearful.
Did you post that earlier? Yeah. That's great. And a lot of people were, yeah, like, oh, like, you know, now's a good day to learn about dollar cost averaging. It's like you weren't dollar cost averaging the last month. Like now you're going to start.
The most memorable moment for me as, as an investor where I really thought it was entirely over. Like things were never going to come back, was seeing Ethereum at $800 and thinking, where's the bottom on this? What is the. Because with cryptocurrencies, yeah, there's some network value and activity and all that stuff and fees and stuff like that. But I was like, we got no cash flows here. I don't know if this protocol is even going to exist. In two years with this was when FTX had collapsed. There was just so much contagion. Very dark. And then of course it was like right when I thought that was the absolute. So, yeah.
What were the darkest moments? I remember the SVV crisis was pretty crazy. I remember like just looking at my phone like all night and just being like, whoa. And then the other one was the Sam Altman open AI drama over the weekend. That was like when, when he got fired and then.
Oh yeah.
Yeah. That was like, wow, I can't believe this is happening. This is like history in the making.
You were calling your second secondaries broker, like sell everything.
Now that was less like a shock to the market. Yeah, but the SBB thing was clearly like, okay, like the market is bad, like rough. Anyway, if you're losing sleep over the markets, why don't you improve your sleep by getting an Eight Sleep? Go to Eight Sleep.comTBPN There are nights that fuel your best days. Turn any bed into the ultimate sleeping experience. It's a fantastic. It's a fantastic product. We highly recommend it. Family loves it. What are you thinking?
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Yeah, yeah, send us your sleep scores. Uh, anyway, let's move on to some historical analysis from the Wall Street Journal. Uh, they write today. Rolf Winkler writes what the dot com bus can tell us about today's AI Bo boom. This week marks the 25th anniversary of the NASDAQ peak. But it was.
I just got to say, Rolf Winkler over at the Journal. This time it's different, buddy.
This time it's different.
Yeah, no, we don't know yet. It feels different because, you know, you got companies like Cursor and, you know, Windsurf doing, you know, millions of dollars of revenue per month when their dot com counterparties were doing, you know, thousands a year. Thousands. They were doing. Yeah, we're in the.
Go back. All these, like, emails of them, like, being like, look at this chart. I went from zero to $100,000 in revenue in six months. Of course, I'm worth 10 billion. Of course. Everyone's like, I'm going to do it even faster. 0 to 100,000 in revenue.
Then I go, we have plumbing.com.
Yeah.
How at least $1 billion by itself.
Yeah, I mean, the multiple is. Is all the difference here. Anyway, there's some good history in the Wall street journal today. 25 years ago this week, the NASDAQ composite hit its.com/era peak after soaring more than 500% in five years. Imagine that ride. You're just sitting in the NASDAQ 5Xing your money.
Mary Meeker just going off.
Going off. Its subsequent collapse was swift and brutal. Small investors lured by a promising new technology called the Internet's lost, called. Called the Internet lost fortunes, the economy stumbled. High flying companies like Pets.com, the Globe.com and Webvan collapsed today. Some investors are worried the same cycle might be playing out when it comes to artificial intelligence. Now the interesting thing, I don't know about the globe.com, but Webvan was basically Instacart, very successful company. Now pets.com, chewy.com pet delivery stuff.
Yeah.
$10 billion company for a while. I'm not sure exactly where it trades now, but big company, lots of good ideas. MP3.com went public with just a domain business plan, no revenue. Obviously Spotify is a beast of a business now. So the story of the.com to me is not like wrong ideas, directionally correct, just bad timing, bad, bad execution.
Yeah.
Today some investors are worried the same cycle might be playing out when it comes to artificial intelligence. Even if that is the case, a big if. There's an important lesson for investors from the dot com collapse. Ultimately, the early Internet hype proved correct. It's easy to understand the fear and echo of the dot com boom. Leading AI companies are valued in the tens or hundreds of billions of dollars. Some of them with little prospect of generating meaningful sales. That's not, I mean I don't know who exactly they're talking about. A lot of these companies have plenty of prospects for generating meaningful sales there. There's obviously a ton of questions, but yeah, investors are racing to give the companies still more money.
It ever having a founder on In 45 minutes, it's putting up insane numbers in his first month.
Yep.
So.
So they're, they're buying AI chips to fill out new cavernous data centers. I like that term, cavernous data centers. Yet the dot com boom and bust showed that big bets on ambitious technologies can pay off in the long run. The five most valuable listed companies globally and six of the top seven architect companies from that era or ones that grew from seeds planted then. In other words, the dot com bubble had elements of what some investors call good bubbles that fuel rapid adoption of revolutionary technology.
I want to make a statement for the record that we have been pro bubble.
Pro bubble.
We were pro bubble in the first episode of this show.
Yes.
And we're going to be pro bubble in the last. And we're certainly not going to fold now that Tesla's down 40% a month. It's going to take a lot more than that.
Yeah. So the Journal's separating out the idea of good bubbles versus bad bubbles, which I think it's a good distinction to make bad. Bubbles are things that where people speculate on assets that don't make the economy more productive. Tulip bulbs, Beanie babies, houses in the Arizona desert. Boom to bust. And they have some charts here. It's very difficult to be a radical innovator, says Carlota Perez, author of Technological Revolutions and Financial the Dynamics of Bubbles and Golden Ages. To create a world that doesn't exist, such innovators convince suppliers, workers and financiers that they should march simultaneously toward an imagined future of clamoring consumers. While people race to cash in, ideas are are tried and infrastructure is built. Many fail who nevertheless lay important groundwork. Famously, the the fiber optic lines of 2000 were the equivalent to the electrical grids of the early 1900s, the railroad tracks of the 1800s, the canals of the late 1700s, says Perez. Busts followed those booms. Yet the networks fertilized new markets. And so, you know, even if we build these massive data centers, we don't know what to do with them. Eventually we'll figure it out, which is why this is potentially even if it is a bubble, it's a good bubble.
We love bubbles.
AI innovators are making their own gargantuan capital investments, primarily in specialized semiconductors known as graphics processing units, GPUs made by Nvidia. Today, Nvidia is the most valuable company in the world, or among them. With a market cap of 2.7 trillion, the question of whether those investments will lead to productivity advances that power the economy, or elements of a good bubble. The jury will be out for some time, but there are tangible advances already. Search is smarter. AI bots can write software code, cover letters. And more AI agents are booking flights, filing taxes, scheduling meetings, and acting as smart assistants. That could boost productivity in years to come. Not that there won't be losers. Some AI companies are already melting down. Sequoia Capital's David Kahn has written of the massive revenue hole that AI companies need to fill to justify their data center spending, which could lead to a speculative shakeout. Yet he's optimistic.
That's a great article, by the way. Oh yeah, it's probably worth revisiting at some point.
The massive revenue hole is the. Is the one the Journal linked.
Yeah, it's basically this idea of like if you're spending, I mean, it's simple idea. You're spending all this money, you have to actually make it back at some point.
Yeah, but I mean, as we say, you know, 99% of AI companies quit right before they closed the massive revenue hole.
Yes, before they hit it. Many have said that. Yeah.
Yet he's optimistic that a huge amount of economic value will be created as I to distinguish bad bubbles from good bubbles. Look at the assets the people are betting on, says Bill Janeway, former vice chairman of Warburg Pincus who has studied speculative eras. The world banking system collapsed in 2008 when houses couldn't, people couldn't afford were financed with risky mortgages sliced into highly leveraged.
I didn't just study speculative errors, John, I participated in them. Who are you going to trust more? Bill Janeway.
Yeah. Has he ever had speculative eras? Has he ever had an NFT profile picture? If you haven't been in the trenches of the speculative eras, Bill, I don't want to hear from you.
Yeah. Where Were you in 2021?
In contrast, Janeway points to Tesla. Some investors think its shares are overvalued, but Tesla is using its windfall to deliver a future of electric vehicle solar power as well as self driving cars and robots powered by AI. Many overhyped AI startups may flame out, yet some will have had brilliant ideas that get picked up by others. Anyway, fun article. Good times. They talk more about the smartphone revolution. By the time Steve Jobs unveiled the first iPhone in 2007, wireless phones and the Internet were already widely used. Flash memory was cheap. Computer chips were smaller and faster responsive. Touchscreens had already been invented. And when the smartphone revolution came came it was General Magic alums Tony Fadell and Andy Rubin who helped deliver it. Fadell helped develop the ipod and iPhone and Apple and Rubin founded Android the world the the startup behind the world's largest mobile operating system. And so are you familiar with the story of General Magic pre? It's fascinating. It was basically this like dream team of like, you know, all the venture capitalists came together, all the top technologists came together and they were going to build an iPhone essentially in the mid-90s, I believe. And they so an early version of the smartphone was released in 1994 by a company called General Magic. Co founder Mark Porat envisioned digital touchscreen phones, but his device arrived years earlier. There were no digital cellular networks, Porat recalls. To retrieve digital content, of which there was little, it had to be plugged into a dial up modem. So they were just too early. Company doesn't work, but the team goes out and works at Apple and ultimately Google post Android acquisition. And so as hundreds of billions of dollars pour into AI, some are calling it another bubble. True or not, Perez forecasts that AI will boost productivity as the first electrical Lines did when they replaced Steam power. General Magic went bankrupt in 2002. Its devices were so far ahead of their time that few customers bought them. Another prescient idea it was working on would also have to wait. AI agents to build AI agents built to complete tasks for people. The engineer working on that project, John Gian Giandrea, now heads Apple for AI for Apple.
Oof.
Interesting. Maybe they need some new blood. Maybe he's needs to hang his jersey in the rafters. He's been certainly early to this stuff, but not rolling things out faster. My biggest complaint recently, we talked about the Gen Moji thing, which is terrible. Playground, which is bad. They still haven't replaced the voice dictation. Like I'm used to decent voice dictation.
Yeah, you use it a lot.
I use, I use a lot for ChatGPT. I go to ChatGPT and I click the voice thing and it records it and it nails it every single time, no matter what. And then every once in a while, I'll accidentally hit the button on the Apple keyboard and it's just terrible. And it's like Apple, that's not a security thing. That's not, it's not some crazy. It's. It's so easy to implement Whisper. It's like there's open source frameworks, there's like they could buy a company. There's a million ways to just upgrade that and just make the existing stuff better. I was thinking about like how funny it is that their, their Apple intelligence. You've seen like they like their rewriting thing where like you, you highlight stuff and then you have writing tools. Now have you seen this? Writing tools. Writing tools. Describe your change. This is an Apple intelligence. So if you highlight some text, you can go to writing tools. You can say like proofread it, rewrite it, make it friendly, professional, concise. Like turn it into key points, turn into a bullet list. Turn it into, turn it, turn it into a table. Like it's cool, but it's, but it's weird because like there's already spell check and grammar check, like running. And so instead of like replacing that with one system that runs over your text, now there's just two systems that are talking to it and they're like kind of fighting. One's like the old school, like, hey, we're just checking spell check here. It's like the metaphor is like there's a robot over your shoulder who's just kind of looking and say, oh, you misspelled this. Like, let's underline it. With the blue line, you can click and you can change. Right?
Crazy.
But then there's a separate robot over here saying, hey, actually, you want to turn this into a list of bullet points? Like, I could do that for you. And it's like, I kind of just want one system that I'm interacting with that I'm, like, really comfortable with instead of, like, when I want this problem, I go over here. It's very, like, fragmented. Anyway, well, time is money. Save both. Go to ramp.com easy to use. Corporate cards, bill payments, accounting, and a whole lot more all in one place, folks. You gotta get on ramp.com we launched our season two of the show, our version two, today. We are now officially supported by Ramp, presented by Ramp.
And we had talked about Ramp, but we had never, we'd never shown a.
Handshake that we were in partnership with them. Little, little teasers. But we never actually really told everyone that we were, yeah, partnered.
We had never had a shot of us, me grabbing a briefcase out of an unmarked black van and pulling it into a yellow Ferrari and driving away. But now that's really what makes it sort of official.
Now it's clear that, yeah, we're in.
The great car too. Underrated.
We're in the pocket of Big ramp.
Yeah, big Ramp.
Big Ramp.
It's got to be. A lot of people have been talking about, you know, the, the potential monopoly, you know, positioning of ramp and ramp.
Yep, yep.
But we're conflicted out of that.
We are, we are. Anyway, let's move on to another big deal. OpenAI signs a $12 billion deal with Core Weave. They'll get an equity stake. Core Weave, an Nvidia backed cloud provider, which we talked about on the show last week. They're filing to go public. We had Nick Carter, one of the first angel investors in the company on the show, which is very cool. Um, they just signed a five year deal to rent AI servers to OpenAI. According to a Reuters report. As part of the cloud deal, OpenAI will also get a stake in Core Weave, expected to be worth around 350 million when the company goes public. Now, Core Weaves already has a big partnership with Microsoft, and they've signed deals to spend more than $10 billion renting AI servers through 2030. And so this is the Satya Nadella I, you know, I own. I also like to lease, I like to rent, I like to do everything. I, you know, I'm a core customer. It all just depends on what the flavor of the week is for me. I'm good for 5 billion.
So I have another article pulled up here. In 2024, Microsoft accounted for 62% of Corby's revenue, which is wild.
Wow. Yeah. Yeah. That's one of the main things that people are one is revenue concentration.
Yeah.
Are they too concentrated? Because if Microsoft says, hey, we're out, then the company's worth, what, a tenth or something? Or fifth? But, you know, we'll see.
Yeah. Yeah. And so in many ways, OpenAI could have continued to access Core Weave's underlying products through Microsoft.
Yep.
But now they're not.
Now they're becoming their own company. They're leaving the nest, spreading their wings, becoming all grown up.
Yeah.
They're even going across.
You do have to credit. You got to credit Satya and Sam for publicly, you know, right after, everybody was like, oh, they're beefing. They're not on the same team anymore. They, like, went, Took a picture together. This was probably three months ago at this point, but. Jersey swapper. No, no Jersey swap. Okay, well, this barely counts.
Yeah, barely counts. You got to do the jersey swap if you're serious about, you know, healing wounds. Exactly. You know, Zuck and Zuck and Jensen seem like they're just really aligned. They're not playing in each other's backyards at all. It's like pure customer. Nvidia has never.
Meta. Doesn't Meta have a chip?
They're, like, talking about it, but it's clear there's clearly still a huge Nvidia buyer. Nvidia is not trying to do any. You know, Nvidia does have a cloud offering, so. With the other hyperscalers. Yeah, they're. They're in some competition sometimes.
Yeah. I think today actually, Meta announced that they're testing a new AI chip with tsmc.
Tsmc.
So you were correct that they were respectfully just letting each other, you know, do their own thing. But now Zuck is kind of doing the same thing.
Was there a Morris Chang Zuck Jersey Swap?
Maybe that's the thing.
I'm guessing they must have. Even if there's no photo, they probably did it.
Jersey swap.
Jersey swap.
The Financial Times, they just say they're testing it.
So the Financial Times reported that Microsoft cut back on some planned spending with Corvey Core Weave due to delivery issues and missed deadlines. Core, we've denied the report and said there have been no contract cancellations or walking away from commitments. And so that's the story of OpenAI and Core Weave. And I feel like this IPO is going to be pretty Crazy because there's all these deals that are going to get papered like right before and the, the future, in the future revenues and cash flows and contracts of these businesses. Like the entire AI industry is kind of deciding like, hey, like we're going to spend like, you know what I mean? The base case is like 250 billion in capex in one year, right?
Yeah.
And so like where does that pie get sliced up? And so if you're Core weave and a couple billion dollars will materially move your, you know, market cap, then. Yeah, you're going to do a deal with OpenAI for 12 billion over.
Yeah. The timing is very convenient with their.
Stock away and stuff. So there's all these kind of like one hand washes the other type deals.
Yeah. They're just to reiterate. So Core Weave, OpenAI is doing this deal, but then core weave is passing them back $350 million in stock.
Yeah.
And it's very conveniently timed with Core Reeves ipo where the number one risk factor, like you said, is that the revenue concentration with Microsoft.
Yeah.
I feel like people will.
Yeah.
My sense is that analysts will switch from revenue concentration, which is still going to be a focal point to okay, you're less, you have less concentration going forward. But OpenAI is losing all this money and you know, it's not the most reliable customer and then they're going to still, you know, continue to have to fight a similar fight.
I do like this trend of if you spend a lot of money with a company, you get equity in it. I feel like with how much you spend at Erewhon, you should, they should give you a slice, they should cut you in. They should give you some equity.
You're telling me, you're telling me that's. I go to their customer support daily. Cold email. Hey, here's how much I spent in the last week. Think about a little, little pre ipo. Yeah, a little pre ipo.
Slice me. Awesome.
I wouldn't even need. I don't even need the shares. Just let me, let me get an.
Allocation to get an allocation in Erwan. I mean LVMH should, should cut us in with all the dom we're buying to.
Yeah.
You know, every company. If you're a good customer. Let us get it, let us get a taste anyway.
Exactly.
Speaking of stuff, you can buy it Erewhon. There's a tour of food and drink startups in the information today. Taking through some D2C, some, some consumer, some CPG brands. I thought this kind of interesting Strategic acquirers are starved for growth. They're cash rich and they need to innovate, says John Lavert, a managing director for consumer retail at investment bank Solomon Partners.
Most conflicted possible position the guy who wants to sell all the consumer the upstart consumer brands for the most amount of money to do the strategic they.
Have to this conglomerates like Coca Cola, Pepsi Co and Mars have one so.
Much cash you got to innovate, why not buy?
You got to do it.
Run advice Some of my brand, one.
Of some of my clients They've long used acquisitions to add trendier brands popular with new sets of shoppers. And over the past few years, new food and drink brands have been able to grow sales quicker than ever, using social media to reach shoppers cheaply and leaning into viral health and wellness trends. Still, big acquirers will likely be selective to be a good candidate for an acquisition. Brands need to have over 100 million in annual sales and gross margins of between 30 and 50%. Levert said they should be nicely profitable on earn on ebitda. And if they're growing quickly, buyers typically are okay with a lower ebitda. Some potential sellers are holding off on seeking buyers until later this year amid uncertainty around the impact of tariffs and supply chain disruptions. Selling or offloading a big stake to private equity firms could be another alternative for brands that aren't able to find a strategic buyer. And so here are the eight food and beverage startups that might get acquired in the next year or two. Banza Bonza. They raised 31 million. They were founded in 2014.
It's garbanzo bean based pasta.
Cool.
I used to eat a lot of this. Yeah, I still have it from time to time. It's pretty good.
Is the pitch low carb? Lower carb than pasta?
No, it's just no gluten.
Oh no gluten. Gluten free. Okay.
Sort of high protein.
Yeah. In. In 2014 when they launched, this was. This was ultra trendy, as they say. More recently, it has added products including high protein waffles. They raised $20 million in 2019 from investors including private equity firm Prelude Growth Partners and Danny Mayer's investment firm Smart. They sell their products in 23,000 locations. Chomps. The line of chomps guys. I'm not a big chomps guy. I mean in. If I'm in like a random store, maybe I'll grab.
I think they're fantastic.
Daily driver. Yeah. No, I like the idea.
I'm almost a daily driver.
Yeah.
My son is an absolute chomp. Fiend.
Okay.
I ever pull one out, I'll just come over and. And he'll just take it from me and just eat the entire thing.
I mean they're looking really strong. It's been a long road. 2012, so I mean they're going on 13, 14 years old. But in 2024 they did over half a billion dollars in sales. And the last disclosed valuation was 200, 300 million and they raised 80 million.
Yeah, they're well, well they're in.
Yeah, they are in the money stride. Consumer partners looks great on this deal. They got meat stack, meat sticks, other snacks. Founded by personal trainer Pete Maldonado.
That's, that's John had. John had an idea this morning while we were working out to just have.
I don't know if they should leak this. It's such a good idea.
Pre cut steaks. Like imagine if you could buy like steak that was cooked in sort of more of like a bacon style, like pre slice form factors. You can just instead of going for a chomp, just grab, you know, a little bit of filet mignon.
Yeah.
Which is. I'd like somebody in the audience to build that. We'll definitely trial it.
Well, my idea was specifically like chick fil A but steak based. So you go to the drive through and instead of getting some chicken nuggets, you get a bunch of steak and it's like 50 bucks. Because steak, it's expensive and there's no.
Other items and there's no other items on the menu.
Yeah, it's like, I mean maybe like you get a whole steak or you get half a steak or little slices of steak. But like basically the restaurant just cooks steaks all day and then you drive up and you buy steaks.
Economies of steak.
Steak, it's great. Anyway, Chomps has proven it can scale up. It's on its own. The brand has already expanded to most major grocery chains. Whole Foods, Target, Kroger, Trader Joe's as well as many convenience stores. And Maldonado expects it to hit a billion in retail sales this year. Wow, that is big. Could include a strategic exit and ipo. Or we could continue to hold it for cash flow. Good culture, I don't know this company. They did over 200 million. They're founded in 2014. They raised 85 million. Good culture has been the forefront of a resurgence in the population. Cheese.
It's like a yogurt. Dairy health better for you. Kind of dairy esque brand.
Cool. Do you know lesser evil? Are you Familiar with this 2004 wow, popcorn. That's an old company. $105 million in sales. They've raised 45.9 million. Aria Growth Partners, Valor Equity Partners is in there. That's amazing because valor's in like SpaceX. But yeah, good team. Around the, around the board looking good. Raised money in 2023, around $19 million and apparently they are exploring a potential sale but also seeking evaluation of around a billion dollars. That would be a relatively rich number compared to a recent to recent snack deals. In January, Flowers Foods said it would pay 795 million for Simple Mills, which sells gluten free versions of snacks like Goldfish and Wheat Thins, but had higher net sales.
The trade, the basically trade of the early 2010s was just to go into a 711 or a gas station and make a better for you version of every product. Every single product. From meat sticks to Wheat Thins to Goldfish, you know, all these categories.
It is kind of crazy that no one said like let's just do that. They, everyone. It was always like some random entrepreneur focusing on one single category. There was no one who said like our business is we are going to create a better for you product in every single category.
Yeah, some people focus. Yeah, some people tried to do that but you can't remember any of their names.
No, I agree. They didn't nail.
And it also, that's, that's the thing. Cpg. We talked about this on the show yesterday. CPG is so tangible that people assume that it's very easy, oh, I'm going to make a cracker, I'm going to make this drink. And then you realize you actually have to. The best CPG companies either got super lucky, which is unreliable or they iterated across 30 plus production runs to like dial in a product and make it truly, truly great. And then they had to like reinvent it when they scaled up again and it's just really difficult. It's basically blue collar entrepreneurship and that, you know, you have to go sit in grocery stores early on and just like get people to trial your product. It seems crazy, but yeah, it's kind of what it takes.
Liquid death. I mean this is another good example, like liquid death, super unique go to market super unique branding. Like that's not going to come out of some hold code. That's just like we need better for you in every category because yeah, liquid Death is a very bespoke like Liquid Death is not a brand that was a market fish. Right? Yeah, it doesn't translate. It's a very different thing.
Liquid Death had perfect marketing market fit in a mass market product that they could sell everywhere.
Yeah.
And they've executed that very well. They've. They've also been very aggressive in terms of raising capital science, which is an L. A based sort of incubator that incubated it.
Yep.
They were also in Dollar Shave Club. That was like their first big outcome, I think in the. In the DTC world.
They were.
I was getting pitched. Yeah, I was getting pitched Liquid Death, you know, pre IPO round. I didn't sign any type of NDA. I think it was like. I think it was at like close to $2 billion. I think that's completely unrealistic. Unless it was trading like a meme stock.
Well, they did get some private credit money in. They got a 55 million dollar working capital line from Aries Management.
Let's go, let's go.
Some of the best in the game. They got three or four billionaires.
We got to get a private credit fund as a partner for sure for the show.
It's great. And so we'll see. We'll see where that goes. Olipop, also very, very popular. They're doing 400 to 450 million in sales. They've raised 90 and the last disclosed valuation was 1.85 billion. So. Wow. Pulling a 4 or 5x revenue multiple. Not bad. They got JP Morgan's private capital growth equity fund, Monogram Rocana Ventures. Low calorie, low sugar sodas with added fiber. It's long been seen as a candidate for buyout by a big beverage company. And they're in kind of a race against Poppy, which was launched in 2020, just three years after Olipop started. Poppy's doing more than 500 million in sales and has raised 30 million in funding.
Yeah. So Poppy directly. They were also making sort of better for you ish sodas. But then Olipop was working so well that Poppy completely cloned their product down to the font.
Wow. Like, it was spicy.
A complete copycat. But they, to their credit, they executed well and have grown sales pretty impressively.
Yep.
A buddy of mine is the head of growth. I actually don't know what his title is now, but he was the head of growth for Olipop back around their seed round. And he's super well connected, smart guy. And basically I kept. Back then, I would. I would honestly ask him. I didn't really understand how hard Olipop was ripping. This was like 2020. And I was like, are you gonna look and do other things? Like do you want to be ahead of growth for, like, a CPG company like, your whole life. Because, like I said, he had all these opportunities and he had been there for a while already. He's like, no, like, we're doing well. I'm gonna stay. And, like, I'm sure he's gonna do, like, really, really well from this, so.
And Kavu Consumer Partners is in. Is in Poppy, which is Rohan Oza's fund. You might have seen him on Shark Tank. Good, Good guy. I ran into him in Beverly Hills the other day. Anyway, if you're building a consumer product, a food product, a beverage, you're going to need to advertise it. And where should you advertise it, Jordy?
Out of the home.
Out of the home on Ad quick, go to adquick.com it's out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only Ad Quick combines technology, out of home expertise and data to enable efficient, seamless ad buying across the globe. And so start a CPG company and throw it on a billboard.
Obviously, obviously, we are partnered with Ad Quick. And right after we launched the video this morning with Ramp, we started going back and forth with Chris and Adam on the Ad Quick team about our video with them. So there's lots in the works. I'm excited, very excited for that one. Iconic memes will be created, recreated, definitely, to celebrate out of home advertising.
Yeah, and we wanted to celebrate some great out of home advertising. Durin put up a billboard that says, you can't have rocket science without rock science. Duran's a new mining company. Very cool. And Jackson Moses here says, adds the go hard. I love it. Right outside the SpaceX headquarters. So beautiful.
Time to mine.
We love some billboards out there.
That's actually insane, Alpha, that you can get a billboard right in front of.
SpaceX and then just take the photo and SpaceX is right there. It's really good. Anyway, we got to move on. We got 15 minutes till our first guest is joining. Have you seen Meghan Markle's new Netflix show, Jordy?
I haven't, but everybody's been saying the show is one of a kind. It's the best ever.
Nobody's ever made. I don't know about the second part. It's definitely one of a kind, but I don't know.
People are saying it might be the show of the year.
Well, I don't know. I'm not really equipped to judge this. I don't want to watch a lot of cooking shows. But I watched like five minutes of it and it was atrocious.
Oh, it was really, really rough.
Really? Really.
Ouch.
But you know, I me dragging it is nothing compared to what the Economist did. It was one of the roughest articles. I was laughing out loud and I so I want to read some of it here because the Economist is one of those. One of those journalism outfits that has just incredible command over the English language and can body someone in the most.
Basically pseudonymously, or not synonymously. Basically anonymously.
Yeah, it's an anonymous writer and it's hilarious. So I'll read some of this. One scene is magical, another is so pretty. Another delightful welcome to With Love with Meghan, Meghan Markle's new cookery and lifestyle show in which she smiles at things. In Montecito, in episode one, she smiles at raspberries on a cake. In another episode, she smiles at hydrangeas. She also smiles at bees, whose hives she keeps on her property. Quote When I think of honey, I think of bees, she says in one of the many insights with which the show brims. Just like, wow.
When I think of honey, I think of bees.
Just like. These are the type of insights you're getting from this show. There have been doubts about whether Netflix was right.
We talked about bees and honey on this show before we did. And John didn't believe that.
She's more of an expert than I am.
John didn't believe that bees ate their own honey.
I do.
Turns out they do.
They do. There have been doubts about whether Netflix was right to fork out a reported 100 million in a deal with Ms. Markle and her husband, Prince Harry, for this show and other content. Such doubts must now be dispelled. However, Ms. Markle is not just smiling. She's on a mission. As she explains, she wishes to share some little tips and tricks for entertaining friends and elevating one's life. Such as, perhaps, make sure to member little tips and tricks, such as perhaps make sure to marry a member of the British royal family.
Wow.
We've been saying this.
We've been saying this.
Marry into royalty. Yes, hot tip, that. That tends to help to no end. Or ensure you get Netflix to pay you a vast sum to show off an immense property, complete with a vegetable garden, beehives and chickens to lay fresh eggs. That helps, too. This new eight episode Netflix show, released on March 4, is more or less Martha Stewart for the 0.01%, but aimed at the other 99.99%. In it, she offers indispensable tips, such as how to make candles with your own beeswax or how to boil noodles with tomatoes, apparently. First you put the noodles in a pan, Then you put in water, then you take off the lid. Then the water will evaporate. Then they are done at last. Everyone had been wondering. Destroyed.
Destroyed.
Like, it's just. This is such good, right? I love. I love it so much. It's just. It's just so funny. Anyway, it's a lot of fun. Go read the article.
Created a lot of fans.
No, no, no.
Decade.
Ms. Markle says that she is not in the pursuit of perfection, but in the pursuit of joy. This is charming, if not precisely the wording that some inside the palace use. Their descriptions of her tend to go a little heavier on words like abrasive, bullying, difficult, and rude. But then perhaps those palace workers did not step to. Did not stop to smell and smile at the hydrangeas. So funny.
Ms. Marco, we're not far from. Yeah, Montecito. We'll come up.
We'll come up.
We will show you how we drink Dom.
Yeah.
Proper etiquette. If you're celebrating a podcast milestone.
Yes. She had a podcast on Spotify. Big deal. And I heard through the grapevine that her one request was that there was, quote, unquote, no homework, no way.
She just wanted to show up and do it.
I mean, this is unsubstantiated rumor, but the rumor was that at a certain point, she was, David, Sandra will love this. We got to send this clip to him. She wasn't even doing the interviews. So imagine it's like we're going to have someone on. We're going to have like a. Like an assistant, ask them the questions, record their answers, and then I will come in once a month and record all the questions. So I come in and I say, barack Obama, what was it like being president? Tony Blair, what was it like being prime minister? And then I go away, you know, like, you know, whoever else, like, is on this week, you know, Martha Stewart, what's your favorite recipe? I come in, I record those lines, and then they cut it together with the answers, where that person got interviewed by someone else.
Insane.
It's like the lowest effort podcasting, and that's why he's no longer a podcaster.
That's crazy.
David Sanra rolling over, just ripping his hair out thinking about the lowest effort podcasting you could possibly do. Brutal. Anyway, the one. My main takeaway from the show is that Montecito is beautiful. We should spend more time there. And there's no better way to do that than on Wander.
That's right.
Find your happy place.
Find your happy place.
Go to wander.com book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning and 247 concierge service. It's a vacation home, but better. Jordy, do you have a code for folks at home?
I got a code for us. It's wander.com tbpn. You can use the code tbpn to get a discount if you're booking a trip. And just by creating an account, you can get entered into a giveaway that they're just doing for TVPN listeners. So you're only competing with other brothers, which is kind of a win win situation. So either you win a free trip or another one of your brothers wins. So there's zero downside.
Fantastic.
Enter now and, you know, take it. Take a crack at it.
I love it. Let's, let's do some timeline. We have 10 minutes until our first guest and I want to kick off with a post from Bezel. We're going back to back with the advertisements today, but this is a great post. Sold and authenticated by Bezel along and Sone Long 1 time zone reference 1360292 time zones, day, night, indicators, zero guesswork if you're crossing continents. This Lange ensures you never call the wrong person at 3am Beautiful watch. Flip it over and things intensify. Its manually wound L141 1 movement is pure German engineering. Flex visible through a sapphire case. Back hand engraved balance cock. 72 hour power reserve.
You hesitated there slightly because that sounds vulgar, but it's just. No, that's just watch terminology.
72 hour power reserve and enough finishing to make any watch nerd emotional. Fancy a longa of your own good taste? Better news, we've got more. Hit the link in bio to Shop Bezel's full selection.
This is screaming Zuck to me. I think he might have snapped this up.
He might have. Yeah.
They have a lot of private, you know, clients they can't, you know, share. Yeah, but this seems like up his alley.
Anyway, go to bezel. Go to getbezel.com shop over 23,500 luxury watches fully authenticated in house by Bezel's team of experts. Download the app, scroll and have fun. Should we move on to Lulu?
I just got to say, when we, when we do our Bezel partnership video, multiple watches. We need a shot of both of us, all the watches just wearing watches all the way up to the shoulders.
Yeah, yeah. We got to get the Graff diamonds hallucination. Yeah, get one of those going. A couple Pateks.
Yeah. How much would it cost to just get a graph diamonds hallucination for?
Depends on what the market's.
Two minutes.
You buy it and then you sell it at a higher price. You made that smart. Yeah.
Look at you. Possible course coming soon.
Course coming soon.
Coogan's code.
Anyway, Lulu Maserbi posts just went to the dmv. They've replaced the take a number ticket dispenser with a person at a booth. And you get a ticket, you have to line and to get a ticket you have to line up and when it's your turn, ask the person to give you a ticket. This is so funny.
The AI mogging. Mogging computers and artificial. Artificial intelligence, you know, I mean, when.
When midjourney came out and everyone was like, oh, this is going to destroy artists, I was like, like, there's still courtroom illustrators who like draw pictures of like SBF sitting there. And like we have cameras. They could just take a photo. And yet, like, somehow that job, like, did not get destroyed by technology. And so there are plenty of jobs that are super resistant.
I didn't, I didn't understand third party DMV services until I was probably 22.
Break those down.
Well, pretty much. There's only a handful of things that you need to actually go to the DMV for, and then the vast majority of them, you can pay a third party DMV $50 to do it with just over text and they just send it to you.
That's great.
I bought a car recently and the title, like, you know, got registered under my name, but then the title never got sent to me. And I just texted my DMV person and they're like, oh yeah, just like send me a hundred bucks and it'll be there in like two weeks.
That's great.
And I don't have to touch it at all. So Huge Alpha. My dad was a very practical. Is a very practical, pragmatic guy. He. He goes and sits in the line, but he's retired now.
Yeah. So I always think of the DMV as a good example of Gel man amnesia, which we talked about in the last thing is like, it's very, very ridiculous. Over the top, like mental model, but Gelman amnesia. I like it because the whole thesis is like, once you realize that one thing is incorrect, like you're reading. You're reading an article in.
Yeah.
Like you're listening to this show and you hear us talking about your, your point of expertise, and you realize we don't know what we're talking about, and then you assume that we don't know what we're talking about about anything. And you're probably right. The DMV is a great insight into, like, how the government works in the sense that, like, everyone's like, oh, man, the DMV is so bad and so inefficient, but I'm sure the NIH is fine. Or I'm sure the DoD works great. I'm sure the, you know, the other arms of the government are fantastic. And it's like, no, actually, like, the DMV is par for the course. Like, your experience at the DMV is the exact same experience you'll have doing business with the fda, doing business with the dod, doing business with, like, any, any arm of the government. It's kind of all the same. But it. But the DMV is the one that, you know, the average citizen interfaces with the most. Yeah. And so, yeah. Anyway, big news. Robinson Helicopter Company has released a new helicopter.
We've been waiting for this.
They haven't released a new helicopter for a very long time. The R88 reveal trailer is now available to watch on YouTube. Go check it out.
Very cool video. You know, we pull it up.
We wanted flying cars. We got new helicopters from Robinson Helicopter Company.
We wanted flying cars. We already had helicopters. I mean, really, just skill issue.
Why don't we just put wheels on the helicopters?
Yes.
It seems pretty easy to do.
Yeah. With little electric motors in each wheel.
Yeah. Be fine.
Probably get up to like, 30, 40.
I, I really, if. Can you play this? Let's see. Yeah, I mean, I really feel like the whole flying car thing, a lot of those, A lot of those companies, like we were talking about Kitty Hawk, the Google founders, had trouble. They couldn't get through all the regulatory. It'd be very interesting to see someone try and take a much more iterative approach and just take a helicopter, modify it, and do just the minimum. I mean, this is what we saw with the Seaglider thing where you got to find the regulatory hack. Anyway, Aussie hex says, nice machine, nice machine. 53 views. Just showing up. I mean, the Robinson Helicopter Company, they have a check mark, so they are verified on X, but they still posted a link, got 3,000 views. Fortunately, we're featuring it here. We'll try and get you some amplification and, yeah, send us more footage, Robinson. We'll check it out. We'll review it on the show.
Yeah, we got to give them a masterclass in the vibrio.
Yes, exactly. This should have been. This should have been native. You should have posted it. Native. Could. It could have had a banger.
Could have had a banger gone viral.
I don't know. I don't know how we're doing on this, but let's see who we got. Okay, we got a bunch of stuff here. Let's move on to Jack Rains.
Let's do it.
Jack Rains went on the Ad Quick podcast. We love Ad Quick. We love.
Let's go.
Very funny. He was previously joking that only fans is the best way to get your message out, but now he's advocating for LinkedIn. He says with revenues higher than Pinterest, Reddit, and Snapchat combined, LinkedIn is still ultimately number one for cringe.
Number one.
Number one for cringe.
We've been getting active on LinkedIn.
We are go. Follow us.
If you go to tvpn.com, you can follow our LinkedIn account.
Yeah.
And we're starting to share. We're staying true to our ex roots by posting the LinkedIn content, like, two weeks later. Standing, you know, honoring X.
Yes.
Being where, you know, everything app where the most important conversations happen. But LinkedIn, you know, you can. It's more like a greatest hits.
I don't want to, like, I don't want to pat ourselves on the back too much, but we do that often, and it's actually part of the brand, so. But, but, but, but I do. I do like the strategy of. Of just posting interview clips on our LinkedIn. It feels like the least cringe thing to do. Like, we tried to take. I tried to take one of my, like, like, sound bites from the show and turn it into text and put it on LinkedIn and be, like, serious, and it's just, like, didn't feel right to me for some reason.
Yeah. I remember when we did our first launch video.
Yeah.
The thing LinkedIn doesn't understand is humor and satire. So we did our first launch video, and people's reaction when they would talk to me about it is they were like, super cool video, dude. Like, looked very serious.
Yeah, yeah, yeah.
It's like everyone on X got it.
Everyone on X got it.
Yeah, yeah, it was ironic.
Anyway, let's. Let's get away from the irony, get away from the jokes. We have to talk about this story. This has been shaking up tech. Lamborghini just announced a $5,000 baby stroller. This is huge for the pronatalist. Crowd huge for the. Yeah.
This was a lot of people's final excuse. They were like, you know, I want to have children. I've been planning for this for a while. But all the strollers are so cringe.
Exactly.
The babies are surprisingly heavy carrying around once they get a few months old, it's like carrying around a 25 pound dumbbell, you know, everywhere. But, you know, it's, it's not even as easy to carry as a dumbbell.
I mean, I gotta say, like, Lamborghini really did not bring their design aesthetic to this at all.
It's super disappointing.
It just looks like a normal stroller to me.
The only thing is maybe it's, it's. It feels super like. Something I don't like about strollers is because they're made of a lot of plastic.
Yeah.
They don't feel always.
This looks like there's some metal in there. I see some shine on there.
If they have carbon fiber accents.
It needs carbon fiber.
I would even, I would even like imagine if they had the, the rear view mirrors on it.
Be cool.
That could be cool too.
Yeah, yeah, yeah. But I'm thinking like sharp angles. I'm thinking like.
Yeah.
You know, rev and.
Yeah.
The one where they take the Aventador and they make it even crazier, more aggressive.
Yeah. So I'm going to give this a four out of 10.
Four out of 10. Okay. Well, it is 1245. We should have our first call in. Ben, make sure we have pulled up the. The zoom and see if we can have our guests join us. How we doing?
Hey, can you guys hear me?
I can hear you.
Awesome.
How you doing?
Video on too, but fantastic.
Yeah, we can see. No, me too. Yeah, we can see you. Cool. So Ken Davison is here from icon. Big announcement today. Can you break it down for us? What are you announcing? And give us a little backstory on your product, what you're building, how it's going, just from the top.
Sounds good.
Yeah.
So we, we just announced a second round from Founders Fund. I'm the founder of Icon and basically what we're doing is we're helping brands make much, much better ads with this thing we're calling the AI Ad maker and high level. What we do is we take someone's big content library and then we turn it into hundreds of ads.
Cool. Do you have any good case studies or examples from companies that are using Ridge?
Wasn't Ridge. Sean Frank was on the show less than two weeks ago and I think he was one of your guys. Super early partners.
Yeah, we built a lot of icon with Sean and then Ron and Obvi and a lot of other folks in the community. Basically what we're doing is we're tackling nine different problems at once. We help with script writing in that script writing, we're helping you target a specific audience. Then once you have that script, we're taking your library and then matching it with that script so you don't have to do that by hand. On top of that, we also do analytics. We help you keep an eye on competitors, we help you even launch ads on many different channels. There's all these pieces of ad making puzzle that we're taking on and it's very manual today. So we're solving that.
Do you like competitive markets? Previously you started Skio. Subscription management within E Comm is deeply competitive. I'm actually a co founder of this company, Rora and Rora was running on some other subscription management platform. But I actually messaged the CEO just before this, Brian Keller, and he said we're switching over. Skio is just a far superior platform than the others. That's so great, Great review for Skia. But my big question is, is you clearly love competition because to go into subscription management dominate and then, and then come in and do icon, which is a very obvious idea and many people are, you know, trying to tackle it, but it's very difficult to do well. Is competition something that you're sort of seeking out in some way because you just know you can do it better?
Yeah, definitely. I as you said, Skio was a really competitive space. There's at least 10 subscription apps and yeah, we tackled it with one, a really engineering first culture, but two also just a really playful personality. I think we really try to be real with our customer rather than corporate and I think that resonates really well with the community. And we're bringing a similar approach too to iacom. We're working seven days a week. We're really like pouring our heart into this and I think it resonates really well with, with the type of customer we're going for.
Can, can you break down in terms of where AI lives within the the ad stack? There's so many places from generate a script, generate an AI voiceover, generate a deep fake of a UGC customer or even the CEO or something like that to AI assembly and picking which clips go where. A lot of these could be done programmatically or deterministically. A lot of them could be done with AI approaches. What do you see working well, where's the highest leverage point to inject AI.
Yeah.
So I think a really common mistake is thinking AI is just going to generate that and then you're not going to have to do anything at all really. The way I see us is basically cursor for ads where we're trying to take the editor, the creative strategist, anyone involved in the ad making process and, and just make them a lot faster, remove the work they don't want to do. Right. So with the script writing previously, I'm sure everyone knows this, but you can get some writer's block when you're trying to pump out 100 ads a week. So one of the things we're doing is we're looking at your previously ran ads where we're looking at trending concepts on the Internet and then we're doing all of that behind the scenes and helping you steer that. You're able to write in first or third person. You're able to say don't make a medical claim or something really, it's up to the user and as a result you're just a lot quicker.
Is there some sort of concept of temperature? I remember in the early GPTs you could kind of turn up the temperature, get a little bit crazier because I feel like I could immediately imagine any of the LLMs kind of just re paraphrasing the same value prop again and again and again. But maybe the value is actually, hey, let's think of new ideas that then we can test and that's where like the real alpha is going to come. Hey, we never thought to make this type of claim. It's not a medical claim. We didn't cross any lines, but we never really knew that that was what the customer wanted. Do you have some sort of way to dial that in?
Yeah, yeah.
So it you're able to use our thing called ADGBT, very similar to ChatGPT but for ads. And the key thing with it is you can really like just steer it in the direction you want to go. There are people who want like 100 permutations of their winning ad. That's a really common use case. We also have people who want to just like do a hundred different concepts at once. Right. So it's really like pick your own adventure sort of thing and we just help you do that a lot quicker.
Got it.
I have a question. So for the last five years the meta on the Meta ads platform has just been. Meta's really good at like finding you the right customers. So you should focus on creative that's part of the opportunity that you have with Icon. Is there a world, do you imagine a future where Meta tries to almost like move up the stack and get into the area that you're in? Obviously you're no, you're not afraid of competition, but how do you think about sort of Meta getting into this game?
Yeah, there's definitely some stuff that's more in the pocket, but what I can say here is that we're going to be like platform agnostic. Right. So you can run ads on Meta, you can run ads on TikTok. Imagine 10 different platforms. I don't think Meta is going to want you to run a TikTok ad or different platforms ad. Of course, we can't rule that out, but there are five of those misalignments, I'd say for Meta to be doing something like this, and the other four I have to keep in the pocket, but I'm pretty excited to partner with them and just see where this goes.
Awesome. Well, you'll have to come back on when you can share on that.
I mean, anytime I have an AI founder on, I have just a bunch of questions like, what's hot? What's trending? Like mcp, does that mean anything? Is that legit and real? What other kind of foundational developments are you watching for? Give me a deep seek take. Give me a scaling take. Give me whatever you got.
Yeah.
I wanted to bring this up in a few of our other trains of thoughts earlier. One of the things that we're really approaching this with is we want to pick the best model for the problem. One of the things we do is UGC lip syncing.
Sure.
I'll be real candid. It's not quite there yet in terms of replacing normal ugc. That's why we're taking existing content and repurposing it. But we've definitely got our eyes on it.
I'd say.
Hey, Jen. Tavis. There's like 10 players in this space and we're just going to partner with the best one and we use a combination of them today already. So that's kind of the way to think about Icon. We're taking the best voice vendor, we're taking the best video UGC vendor, the best writing. We're using a lot of Claude underneath, but with a lot of code on top. It's really picky.
How do you think about cost reduction at. At kind of the infra slayer You.
Yeah.
You said you've gone from 0 to 5 million in ARR in 30 days. You're extremely profitable. It sounds like, you know, costs aren't a big issue at the moment. You know, you guys are running pretty efficiently, but presumably it will only get better. So it sounds like you're in a good spot. Yeah, yeah.
I think another thing that's, that's really fun about this is there's a lot of people in the space that are, are basically like operating on like 90% margin. They're, they're really charging a lot for what they're doing. And part of the reason we're, we're being so disruptive here is we're charging like 10% of what they're charging. Right. And I want to like, pass the savings to the customers as the costs get better underneath. Right. I think companies either are going to have to, like, adapt with their pricing or they're going to die.
That makes sense. What, what's the actual. You're going for the record to beat every company ever on the 1 to 100 million AR record, which is less than 12 months. Do you know the actual day? Are you just going to do it in 12 months?
Well, I'd like to hit it in nine months, like, not leave it too close, but we'll have to see.
Is there a scenario where on the last day you have to bump prices like 30% just to hit the mark? Or you think there's enough customers out there at the current pricing that you can get in front of? Because I feel like E Commerce is very. The top E Commerce founders and CMOs are all talking to each other. There's almost like, you know, Sean Frank and Connor McDonnell have their podcast, I think, I think like, you know, probably an important acquisition channel for you guys, but yeah, you seem pretty confident. We'd love to, you know, do a check in, call in maybe six months, you know, and see where we're at.
The gauntlet down. I want to see the house. Let's do it. Yeah.
Part of the reason I'm doing this is it really pressures me and the team in a good way, I think. I don't want to let everyone down, so it keeps me working pretty hard. But, yeah, if you think about it, right, we've got a business plan that's 1,000amonth. It's only 8,300 customers. We need to get to 100 million. Right. Keeping the numbers a bit more private. But we're more than 1,000 already.
Yeah, we'll see.
Six to nine months from now.
Yeah, 8,300 customers. These are businesses. I mean, Meta has what, like a million businesses? Probably Advertising at a significant level. Yeah, it's. It's not insane. Insane penetration to get there. So good luck. I. I love that. That's amazing. Well, we'll let you get to your next meeting. I know you got to jump, but thanks so much for calling in. Please let me know when you have news or announcements next and we'll bring you back on.
Yeah, congrats on the progress in the new round.
Talk to you soon. Bye.
Cheers.
Okay, bye.
Bye.
Cool. Should we move on with more timeline, Jordy?
Let's do it. Let's run through a couple.
Well, a lot. Gill has reported that Dropbox has converted from Delaware to a Nevada corporation. Lots of people talking about the risks of being in Delaware. Interestingly, I don't know exactly what triggered this. We should get the. Drew Houston, the Dropbox founder, on to talk about how he's thinking about his business, because Dropbox was one of those companies. Came out of yc, I believe. Yeah. YC company got to Unicorn almost Decacorn. Status was super legit. Goes public really big, but then just kind of stays.
Well, they hired 300,000 people, right?
No, that's Docusign. That's a different company.
The name.
Yeah.
Did you really confuse it?
Yeah, no, no, no, no, no. It's Dropbox. I mean, Dropbox has a fascinating engineering culture. They hired Guido Van Rossum for a while. Do you know who Guido Van Rossum is?
Great name.
Creator of the Python programming language.
To be clear, Dropbox still has, I think, more employees than X.
Really? Yeah. I mean, they were. They were one of the hottest startups then have been kind of a. What do they call it? Like a store value type company or, you know, if you bought. You bought a thousand dollars of Dropbox five years ago, it's still $1,000 today or something. And the stock's been kind. But. But I mean, it's a. It's. It's a. It's a fascinating founder story of, you know, building a multibillion dollar company, and not many people can say that they've done it. Okay, I was wrong.
I was wrong. X has 2800 employees. Dropbox has 2200.
Okay. They've been getting 22, 2200. And what does Docusign have? Because Dropbox acquired hello Sign, which is a DocuSign component.
DocuSign has 6,000.
6,000.
Let's go hit the size gong first.
Size gong first. Head count, Doc.
Headcount still cool. A lot of people says, hey, you shouldn't. You shouldn't celebrate. Headcount. You know, it's not a real metric.
I'm a job creator.
Yeah, job creation.
Docusign is going to get the craziest corrupt bargain from Trump. Be like, well, you're employing half of America, like what do you want? Docusign is going to decide whether or not there's tariffs or taxes. They're just going to write the policy and it's going to get ironed in because they're creating so many jobs. Every, every politician there should be a.
Founder that comes out and, and says, my entire mission is to create jobs. I, if, if we have.01%, you know, profit margins that, and we can hire more. You know, I will just keep, you know, dividing that point.01% as many times as possible to just get each incremental employee.
Dropbox, fantastic story. You know the story of their viral growth too. They were very, very early at being very intentional about distribution baked into the product. So when you would sign up for Dropbox, they would give you like, you know, one gig of space to store files in the cloud. But then if I referred you, you would get an extra gig of space and I would get an extra gig of space. Right. And so it went super viral on college campuses. And, and they really did a good job of that. Like that, like, you know, viral, viral marketing model that so many companies tried to copy in like after Dropbox was successful. But it gets harder and harder over time. But it makes a ton of sense. It's the same Gmail model that works, worked. Anyway, speaking of legendary Silicon Valley startups changing things around, Asana CEO Dustin Moskovitz is retiring.
What did the stock do?
And I mean, young guy down 24%. Really?
Oh, but, but it could be.
It was like a crazy day in the markets.
No, no, no, but that's, it was very clearly because of him, because of him stuff.
But I mean, what an interesting run.
As a CEO, you want your stop to stock to drop tremendously when you announce your retirement because that is your market value.
I wonder him, I wonder how much of his net worth was in Asana versus Facebook because he was a Facebook co founder. And so you're looking at a trillion dollar company. Even if you got 1%, you know, you're in the multi billions. I'm sure there's dilution in sales and stuff but still it's like there's so many things where, you know, it's a big, big shoes to fill when you're on your second company and your first one's Facebook. But I don't know, I used asana for a while. Nice product. And you know, Dustin, come on the show now that you're unretired. Let's talk about what you want to do with all that money now that you're retired. We'll get you a nice watch on Bezel. We'll get you an eight sleep.
Yeah.
So, Trey, nice wander vacation every once in a while.
Trey, in the chat there was some Rolex leaks around their new 2025 models. Oh, I heard about this. And they're allegedly introducing a land dweller. Trey says it's a perfect watch for VCs.
Really? Why?
Yeah, well, obviously they just mostly dwell on land.
Yeah, yeah.
If you're enough of a size lord, you start to be more of a sky dweller. That's great, but it takes a little bit.
Okay, do we have our next call in for this stream? I know we are going. We're supposed to be going live at 1:00pm I. I don't like doxing the. The guests too frequently. There we go.
Hey.
Hey.
Good to see you guys.
Welcome to the show.
Yeah, welcome to the show. It's great to have you. Chrisman. I. I don't know why I messaged you yesterday, or it was maybe the day before, but I was just like, dude, you got to come on. John and I are dads. You're building products that our children will ultimately use. I don't know if they're quite old enough yet, but I've got a bunch of buddies that, that are on synthesis for their kids and have said great things. So I wanted to have you on.
Let's start with just a high level intro. Who you are, what your company does, set us up for the viewers and then we'll just ask a bunch of questions.
Yeah, yeah, I think, by the way, it was like 9 or 10pm last night that you messaged me. So, yeah, definitely. Thanks for the advance notice. But yeah, happy to. Come on. I was maybe in a similar position to you guys. Like five years ago. My oldest son was two. I went down to visit the school at SpaceX that Elon had created for his own kids. He hired a teacher out of the fancy private school in LA and started his own school at SpaceX. And the guy he hired, Josh Dahn, is, you know, became a friend of mine and we ended up starting a company together to kind of scale up the best parts of that school. So we started during COVID The initial product was this thing that really captured my imagination. I went to the school, which I was at a company education Company called Class Dojo, which went from zero to a billion dollars. I was the first employee there and what they did at the SpaceX school looked a lot like what we were doing to build that company. The kids were just working together to solve problems in the form of games. And so we took that approach, put that on the Internet and signed up kids from all around the world, you know, kind of took off. So that was our initial product and now, you know, we have built an AI math tutor that I think is taken off pretty well and I think is going to be a major part of every kid's education in the future. Yeah, companies love synthesis and.
Yeah, that's where we are.
Yeah. So right now you have the subscription. What does synthesis look like long term? Starting digital makes a lot of sense, but over time, is there, you know, desire to kind of almost verticalize and go into the real world or what does that look like?
I don't know about going into the real world. I think it's. There have been some Silicon Valley startups that have been really well funded that tried to do the software piece and the real world piece at the same time. I think it's really hard to pull off both. Like if you're going into the real world for schools, you're doing like a real estate play essentially. And I think when it comes to learning math, science, engineering, the fundamentals, this is information. And so information can be transmitted through computers in a lot of ways better than a human can do it. And so I think we want to reach a billion kids, then it makes sense to go vertical. But within software, things that can be delivered purely software, Never say never, because it is attractive to, you know, the idea of like opening up physical in person schools. If we did something like that, we'd probably do something like an academy like the. I always admire that the European soccer clubs, what they do is they'll have an academy attached to all their professional teams and they'll bring kids in at like age 6 or 8. There's a guy who's a star now for Barcelona that they brought in at 8 years old and now he's like 18 and he's just, he's amazing. I think if you really want like incredible performance, then you should do that, kind of like focus on the elite. So we might do one of those in like every city. We talked about the kids with the most potential.
Yeah, we talked about a teal fellowship for middle schoolers, you know, just to go like you just go further downstream, get the middle like you, you could Basically be that guy of getting the middle schooler to like drop out of their like regular, you know, or elementary school and be like, come to the synthesis, institution, academy, walk in.
And that's exactly what if we, if we do go in person, that's what we're going to do. Okay. I think it's, it's that, that'll just make a lot of people upset, but I think it's actually the right thing to do. Like I think you can identify kids who have potential, like engineering talent pretty early. And if you develop that, this is, it's like this is what they do for sports. And so like if we're looking at people who can actually advance civilization, you know, we should have something that's at least as serious as what we do for sports.
Yeah.
What is, what is 10 years from now? What is sort of K through 12 going to look like? My, my sort of personal experience with school was interesting. I started at a Waldorf school that was like my earliest memories of school. I think I benefited a lot from it, but they didn't really teach me to read until I was in the third grade. And I was conscious enough to complain to my parents and be like mom and dad, I want to learn to read like the other kids. So I ended up going to a regular elementary school and then by high school, my father was actually a math teacher at my high school and I hated high school so much that I graduated early and then by college I was just focused on startup stuff. So I didn't feel like I had a great experience with my education. How much better can it be and sort of what's your broader vision? Obviously synthesis can be a big part of a child and a kid's education, but what does the full stack look like in the future?
Yeah, yeah, that's funny. I also had a bad experience with my education and I got like psyoped into, you know, devoting the rest of my life to changing the whole system because I hated it so much. So, so, so maybe similar to you in that regard. I think the big problem is you start with this original elite education is with one on one tutors. And I don't know, but I don't think it was like eight hours a day plus homework with one on one tutors. I think you can learn a lot more efficiently than that. Then you had like the one room schoolhouses which again were like, kids are like working on the farm and then they come to the schoolhouse a couple hours a day, maybe a couple times a week and that' and then all the parents go to work and the school day expands. And instead of just sticking to that, like, well, we'll teach a little bit and then we'll kind of have fun for the rest of the day. They just expanded the teaching to make it somehow encompass all the hours from like 8 to 3, 8am to 3pm and homework. And I think what we're going to see, I think AI tutors are going to drive this. I think you could actually learn 20 to 30x faster. I don't think there's going to be a need for any homework. I think kids are just going to use AI tutors to learn the fundamentals and hopefully, you know, a lot beyond that, what their interests are. My hope is the rest of the day is spent in ways that we can't imagine. Like there's just like in your life there's an infinite number of things you can do and ways you can spend your time. And the same is true of kids. So we should spend a little bit of time teaching them the fundamentals so that they can have good ideas and find what they're interested in. And then I don't know what they should be doing. My kids go to like a charter school two days a week where they, they build bridges, they do school plays, they do all these kind of things that you're not going to do with. It's not just software and like it's not just reading. And so I'd love to see a lot more of that. Our goal is like be the partner with every in person school that does that. And you know, hopefully there's a lot of just local creativity and exploration. Right. Because kids have a tough job. You know, they have to figure out what they want to do in life and that, that's, it's a hard problem in the modern world. It's hard to say like I just, I want to be a doctor or I want to be, you know, something specific like that. Because careers get more and more creative and so I think it's important for kids to have that time to explore.
Can you take me on a little tour of where the government's doing things that are great for education of the next generation, where things could be improved, how charter schools fit into that, how public funding fits into that. Just kind of like what's your world model for, you know, public private partnership in educating the next generation?
There's some really exciting stuff going on now, which I don't know if you guys had Ryan Delp from Primer on, but he's Done some work in like kind of lobbying governments in Florida for increased school choice, which is like. So I think a lot of people don't know. In California, for example, it costs like $20,000 a year to put a kid through the public school system, which is just like an extreme amount of money. And that's a little bit higher than the national average, but not by much. And so what a lot of states are trying to do is say you can take that money with you and go choose a different school. And so that creates like the government where there's usually like a local government collecting taxes, paying for the education. But then there's this fierce competition, right? Like somebody can open up a school right next door. Bad schools can fail, bad teachers, bad principals can go out of business and there's going to be a lot more creativity in, in that regard. I think that's maybe one of the most exciting things that government can do because I think, you know, then, then you would be as well served by education as people are served by like grocery stores. And they'll just be, you know, kind of wild, like cutthroat competition and people trying to do interesting things to, to attract students and get results. So I think that's, that's one place where the government can do something really great just by letting the, you know, bringing this like kind of consumer mentality into what's typically been a government monopoly. So schools could get, you know, you'd be as well served as grocery stores as opposed to what it is now, which is like the DMV, right?
Sure, yeah.
Does all K through 12 education, over time start to look more and more like a video game? Because like one, one concern I have right now is that kids, when they're out of school, they're doing Roblox, they're watching TikToks, and then you put them in a classroom or you give them homework that's sort of built around this sort of old style philosophy around learning, which is like writing things down and here's this textbook and we're going to read a chapter out of it or things like that. To me it seems like kind of an impossible uphill battle to try to get a kid to pay attention to that. When outside of class or even on their phone in the classroom, they have this sort of consistent, really intense stimulation. So in order to compete, does education need to start looking more like what's on their phone in their sort of leisure time or how do you think about that?
I think those are. I know this is like on people's minds, I think they're less related than people think. I think, you know, TikTok and these things are addicting, but also school is just terrible. Like, it was terrible when we were kids and we didn't have TikTok.
Right.
So I think regardless of what's going on in the rest of the world, you want to make the tools for learning as effective and as engaging as possible. It's a really tight balance that you have to strike when you're building products. Like, for us there's, you know, there's things like Duolingo, which famously, you know, it's maybe really good at getting their early retention and engagement, but, but, you know, hardly anybody knows someone who's learned a language from Duolingo. So they kind of focus all the way on the engagement and gamification and not so much on effectiveness. And then, you know, you, you can go the other way where it's like, well, theoretically, if, if kids would spend a lot of time on this, they would learn, but they won't do it. And I think the right products, it's going to be, you know, just, just a balance of, of those kind of things. And I think if you get it right, you know, something a lot of people miss is kids, they want to learn. When you really learn something, you, you rock a new idea. It makes you more powerful, and you can feel that. And I think it's especially true in math, but I think that's true in all subjects. If you want them to learn something, it's because you're trying to make them more powerful. I think what a lot of teachers do is say, well, this will become useful to get to the next level of school. And that's not terribly motivating. What we try to do is just show you these ideas, make you a more powerful thinker in the moment. And I think kids are pretty motivated. They're pretty motivated by that. So.
Yeah, yeah, that makes sense. Last question I really have today, and we'd love to have you back on in the future just as this sort of industry develops. But we had talked before when the humane AI pin came out. I think everybody that was intelligent in the tech industry generally looked at it and said, this is not going to replace my phone because it does a lot of the same things. It doesn't necessarily do them better. But our reaction at the time was that this is not going to replace my phone. But maybe this is a solution that, that my kid would use where, like, I want, like, location tracking and I want, you know, them to be able to easily call me, but I don't want them to be on a screen. Have you thought. And so as like all these AI pins sort of evolved. There was the rabbit, there was humane, there were some others. My immediate thought was maybe they're focused on the wrong user type. Maybe there's a market for this with kids who, if you gave them something that they could ask any question in the world to and was sort of like this sort of companion, and maybe that could be cool. Have you guys thought at all about sort of hardware experiences? I know you're very focused on delivering these sort of digital experiences, but has that ever been even a conversation?
We haven't talked about it at all. My kids have the. It's not Apple Watch, but it's like a knockoff watch brand that tracks it. They can talk to you and that kind of stuff. And I assume they'll be able to connect to the Internet and use the. Use AI for questions and that kind of thing. I think for learning. Screens are extraordinarily powerful. You can simulate almost anything on a screen. And that's underrated. I think people don't realize how amazing that is. There's a lot of Luddites who are like, there's just something about learning on paper, like reading a book on paper. And I just don't agree with any of that at all. I just think it's information. The information kind of flows. You know, you can kind of do anything on a screen. So, yeah, you know, we haven't, we haven't talked about doing. Doing any, anything in hardware yet. One, One kind of crazy idea I have is because a lot, a lot of people do homeschooling now. A lot of, you know, I've become, you know, close with some people who are, you know, fairly prominent who do homeschooling. And I like the idea for my kids as well having like a booth with like a screen and speakers and just something to like isolate the outside world where you've got the computer in it and you're going to go in there, you're going to go in this booth, which seems kind of dystopian. It's going to be for like an hour and a half a day, right? Like, lock the door and everything else. Yeah, yeah. It should have, like a time lock on it. Of course. Yeah, yeah.
You know, you have to complete the lesson focused to get. Get out.
Well, last, last question for me. Let me flip that around. I know a lot of parents are obviously, you know, they want their kids to be accelerated in STEM and math. But. But there is the other side of socialization, and there's a big question. Tyler Cowen's written about this, how maybe in the future intelligence is too cheap to meter. The real value is in connections. We like to joke that we're trying to be golden retrievers, be very friendly, attractive and dumb, because intelligence is going to be too cheap to meter. The AI can do the rocket science for me, but if I'm a friend that you want to hang out with and you want to chop it up with, we're going to have a great time. So, I mean, but I mean, seriously, as a parent, like, I think a lot of parents do even worry even more about their kids. Like, hey, it's okay if you're falling behind in math just a little bit, as long as you're getting socialized and becoming like an upstanding member of society. And so do you see AI tutors or AI calibration being able to communicate with a child and understand, hey, they're being a little antisocial or something like that in a way that a teacher could, or maybe just an augmented or an additional layer there to, to see, hey, this kid is actually engaging at a very mature level, which is great. These are good signs. We want to continue this pattern of behavior.
Yeah, that's a great question. I think parents are correct to worry more about social skills, especially from a young age. How old are you guys, kids? Are they 24.
And then I have twin boys who are six months.
Yeah, okay, three and eight months.
Yep.
Okay, cool. So, yeah, you're in that age now where like the social skills matter. I think up to like age 7, it's like close relationships with the family and just try to spend as much time with them as you can and be around and like reading faces. I think it's a mistake. We don't like, actively recruit customers below age 7. Because if you think about how much processing it takes to, you know, learn how to operate in the social world and read faces, I think you just want to leave kids brains like open to basically spending all their resources doing that. Because if you get it, it's like speaking a language. You get that by like age, you know, four to seven, then. Then in some ways, you know, you're set for life because you're going to be able to like, fit in with groups. And I think that's, that's extraordinarily important. We kind of, when it comes to education, I think it's. I don't see that the AIs are going to be able to do our thinking for us. I mean that's like a totally different world. It doesn't look to me like we're on the path to getting that. I think LLMs are really cool. I think you're going to want your kids to be smart and knowledgeable and able to think as an individual and also have those social skills to work with other people and solve problems together, which is humanity's way of super intelligence. Right. It's like being able to work together in groups. So this is actually mirrors the structure of the company. Now the AI tutor is like the leading edge of the product. But then we have synthesis teams where you put kids and teams, small groups, to work together in solving problems. They're like video games, but they're not shooters or race games. They're like complex problems where you have to argue and decide what action you want to take under conditions of uncertainty. Figure out what you got wrong and make the course corrections and it's like meta problem solving skills. So it's, I think if you want like these outgoing, like, you know, sociable engineers, people who can do both sides of their brain, I think we can do that.
Right.
I think of course people lean one way or the other, but I think we can get people up to like a really good standard on both of those and then that's just going to make us able to solve more problems and advance the civilization. So that's how I'd look at it if I was a parent. Anyway, work on the social skills first.
That's a fantastic vision for the future. I'm very optimistic.
I have one Last, last question, Ms. Rachel on YouTube, very popular, little controversial. Do you have any under the radar creators on YouTube that just make. My wife is very good about having like extremely limited, just like TV screen time. We don't do iPads in public or at home. Planes are maybe the one condition. So if I'm taking my kids on a plane, is there a YouTube creator that you recommend or you just like now put them on, put them on, give them their AI tutor and that's that?
No, I mean at your kid's age. I think the Daniel the Tiger, like PBS series is really good. If you guys know that one.
Alpha.
I don't know.
This is Alpha. Yeah, this is the real Alpha.
That one's great. It like teaches them little. It's like, I think it's like the successor to Mr. Rogers thing is like made by like the same people. So they got like little lessons and it's animated. It's okay for them to watch your kids watch Bluey?
Oh, yeah.
You ever seen Bluey? Bluey's great. So that's what we would do when they were on planes and little kids like that. I would. I haven't seen. I've got four of my own. And just having seen the. I think YouTube. YouTube is quite bad. And it seems to push them into the YouTube shorts, which are just terrible. And even my, like five year old recognizes, like, this is bad. I shouldn't be watching this.
What's that?
Yeah, short form is like slop. And, you know, you should avoid it at all costs no matter what age you are, basically.
Except ours.
Except ours. You should definitely watch clips, clips of this because we will be clipping this interview and posting it out. And you should definitely watch these shorts because they're educational.
But clips on X are great.
But I'm sure if you swipe up on this on X, you're going to get some. Really. Anyway, this was an awesome interview. Thank you so much. We'll have to have you.
Thank you for joining.
This is fantastic.
Very helpful.
Thanks. Thanks for having me.
Appreciate it. Have a great rest of your day. We'll talk to you soon.
Talk soon. All right.
Cheers, guys.
That's hilarious. The, the how much screen time thing is a great question. I don't know if you saw Peter Thiel got asked this at, like, Sun Valley.
Really?
Yeah, because they were saying, oh, you're the founder, you're the board member of, you know, Facebook. Like, how much Facebook do you think kids should use? There's basically screen time. And he was like 90 minutes a week. And so I was just like, yeah, that seems like a good number to benchmark against. But then I was. I was trying to think, like, how.
Can I gotta get your 90, son.
Yeah, no, no, no.
Here's the iPad. Get your 90 in. No, no, Mr. Mr. Teal.
Yeah, get to 90. Yeah, you got to get those numbers up. But no, but then I wanted to make it like, you know, can I. Can I make it even easier to keep that number lower? Because you want to basically keep the number as low as possible. And I realized you just have to create a really brutal economy in your house. So we have a whole economy going now where you get stars for brushing your teeth, doing all these different things.
Oh, yeah.
And all of a sudden it turns stickers. The sticker economy is big. And so all of a sudden it turned from like, oh, yeah, like it's a Friday. I can watch this to like, I am grinding for like weeks for like a movie night which was like it was just free before. But he doesn't mind it that all of a sudden I've just created this, you know, Kafka esque economy around it that he has to work like weeks to get like a single episode, a single like eight, eight minute episode. But, but it's worked fantastically. The new economy feels the reward. It's fantastic. I highly recommend it. Create a really, a really arcane economy in your household for whatever your kids want to do. It's great. Anyway, speaking of arcane Kafka esque economies, let's move over to venture capital. Will Menitis posts Paul Ferry, founder of Matrix Partners. There's a little interview in this book question, do we have 20 minutes? What do we have?
And he says, no, I'm done, I have to quit. But again, if you want to call me next week or continue on, we can do it by phone. Let me just finish the point. So why is this the best business? One you can make a lot of money if you're in it for a long time. It's not a business that you can get rich next year or the following year or five years. It's changed a little bit with some of these secondary mangoes, solo GP funds. It may be 10 years, it may be 15 years. But if you continue to be successful at it, it's amazingly rewarding. But more importantly, you're dealing with interesting people all the time. They're innovators that are people that are changing lifestyles in the world. You're dealing for the most part with people who have no net worth and you're helpful to them in building net worth for themselves and net worth for their employees. And you can be in the venture business and be relevant for a very long period of time if you're good at it, more so than if you start a tech company. The people who started Strata Soup Computer or Apollo Computer were relevant and important people in the 80s, but nobody knows who they are today. Whereas people that were in the venture business to be relevant for 40, 30, 35 years later, you're at the leading edge of product development or technology or capability. There's no other business like that. You're not collecting the receivables for the hundredth time. You're not laying off employees. You're dealing with interesting personalities. So it's the best business. Sorry we had to cut it short, but something came up and I have to attend this.
I love it.
Great. Fantastic quote. The only pushback here that Some GPS would give you is the downside of having, you know, 20 to 100 LPs who are your customers in many ways and can call you at any hour of the day, 365 days a year to, you know.
Well, that's the most interesting thing is that like there's this bifurcation right now where a lot of funds are trying to do less LPs, higher GP commits. And then simultaneously there's the opposite, which is like, let's go public. Let's have any retailer, retail investor be able to yell at us when the stock goes down because we had a miss.
Yeah. But you know, yeah, I've got a buddy who raises first fund. It's $20 million fund. 100k is like the average check size. So that means there's people that are way less than that, people that are way more than that. But you do the math. It's a lot of people.
I wonder how, I mean, if General Catalyst and Andreessen Horowitz get out in the public markets, I wonder what the smallest fund to go public would be in like five years. You think someone would take like a hundred million dollar fund public?
Are there, are there any?
Just raise, just raise a fund. Just spack it. Sell your entire GP stake, Deploy it all. Yeah, I mean, I don't know. Stranger things have happened. Who knows? Silly.
Anyway, there's not.
Let's move on to Near Cyan, big friend of the show. They are hiring for a social media influencer marketing lead. This seems like a dream job. Seems really fun. We released V1 of RN last week and the response has been amazing. If you'd like to lead our marketing team for an app that has already been redefining the relationship between humanity and AI, please apply DM Mirror is super smart.
I got early access to the app. I've used it and it's very cool. It's built on. Built on Claude. But near is super opinionated and a little lore here. We talked about this before, but for anybody that doesn't know, near developed some notoriety for creating an Nvidia only fund.
That's right.
I think two years ago at this point, it turned out you just can't sell it. Yeah. For 10 years. The bullet point is that it's a 10 year lockup. That's really fun and that's a cool thing so far. So far so good.
And yeah, I mean, we've featured Nearest posts many times. A lot of bangers.
Yeah. And this is just an underrated role in tech because there's the historical social media manager role, that was like, you have your little SaaS tools and, you know, you're scheduling posts out weeks in advance, and that's just not the way that social media.
And we talked about this with the PMF or Die guys.
Yeah, it's.
It's like. It's like, can you make a crazy vibe reel? Can you post a banger? Can you be truly in the conversation? Get a bunch of fans, be doing frontline customer support, almost getting, you know, executive communication from the founders, get the founders posting more? You know, it's just. It's just 360 now. Anyway, I wanted to move on to a little historical size Gong because I want to have Connor Zwick on the show from. From Speak. Do we have our guest in here? Okay, we'll. We'll do this one after. Let's bring in Michael. He's here. I. I got so excited with the size Gong. I was gonna. I was gonna hit it, but we.
Can hit the size Gong for Michael.
Welcome to the show.
Welcome, Michael. We don't have you up on.
We hit it a little harder. Hit the gong harder.
Hit a little harder.
All right, there we go.
That was. Works.
Can you guys hear me?
Every time.
Broke it. That was. That's what I was going for. I was hoping we would break it.
Welcome to the show.
What's going on? You made it to Boston. He. Michael messaged me, like, maybe two hours ago and says, I might be in the air, but you made it, and you're at. Where are you right now?
So this is the Suno studio.
Oh, cool. Very cool.
This is where I guess they have, like, artists roll through and stuff when they're in town.
Nice.
Yeah.
Is Boston. Is Boston a major music market or is it more. So they're bringing in musicians that are helping improve the models that they're making in the app in general.
I think it is a market, right? It is a. It is a major market, but no, it's not like in LA or in New York. But this is where SUNA was founded.
Right.
The founders came out of mit, Harvard, obviously. As you guys know, there's a lot of machine learning research going on in Boston and Cambridge. So that's where the company got started. But, you know, I think they had a really smart idea, which was when our artists start going through Boston, which, you know, most major artists do, they can use the studio. It's a place to.
That's cool.
Okay, that makes sense.
Really quickly, can you introduce yourself to the stream?
Yeah, yeah, yeah.
And give Us, a little backstory.
The man who needs no intellectual introduction, but you may as well do it.
But you're not at that level yet.
Of course, of course. No, I mean, I. I appreciate you guys bringing me on. Sorry, am I introducing myself?
Yes, yes, yes, introduce yourself. Tell us what you do now, and then I. I have a bunch of questions about your career we'll dive into.
All right, let's do it. What's up, everyone? My name is Michael McNano. I'm a partner at Lightspeed. I was the co founder of Anchor podcasting platform, which is now owned by Spotify. I also recently co founded a company called Oboe, which is an AI education platform.
Awesome.
Yeah. Big, big fan of the pod. Happy to be one of the early guests. Thanks.
Yeah, I'm a huge fan of Anchor. I. We. We. I used it for some podcast test I did. Like, must have been right when it came out. And I just remember thinking, like, man, this is. This takes so much of the headache out of podcasting. You could upload it on your phone. I. I don't think was the original vision. You wanted people to be producing and, and producing podcasts on their phone and uploading, because that was a button you could just kind of hit record and then boom, it goes out to the RSS feed. But it seemed like it almost became like a prosumer tool pretty quickly because the podcasting market, it's pretty bifurcated between, like, people start taking it seriously once they get any sort of traction. Right.
Yeah, no, the original vision for Anchor actually was not to be a podcast platform. It was very, very idealistic. We wanted to be a social media platform. Platform Audio.
Social media.
Yep.
Like think Clubhouse, but a couple years earlier.
Sure.
And what we. What we learned is that social audio is really, really freaking hard.
Yep.
You know, we. We took a crack at a certain format take on it that we had, which did, like, fairly well. I mean, there was like, you know, there were spikes of growth here and there, but overall wasn't working. After a year, we like, completely pivoted to another iteration of social audio. Gave that a year didn't work. And then what we were hearing from all of our users is, hey, we just want to use these tools to publish podcasts to Apple and Spotify.
Yeah.
And when we did that, it was just like instant PMF from that moment.
So, yeah, take us through the story of the. Of the company. How big did you get? You raised money, I'm sure, eventually exit. I want to hear that.
Yeah, yeah. And for a little bit of lore. When I was. This was 2018, I had just. Maybe I was still in college, I hit up Michael and he did a call with me. Didn't need to, had no real. I mean, it was much more beneficial for me. I was working in, you know, doing a bunch of podcast advertising stuff at the time. But thank you, thank you to Michael. You always remember the people that, like, give you, you know, 30 minutes of their day, however long it takes. But yeah, I would love to hear the story again.
Yeah. So my co founder and I, near Zickerman, we built product at this company called Aviary. And this was around the time that Instagram was taking off and people were realizing that you could take and edit photos on your phone and it could actually look good. Obviously, now that's just a given. The camera is the phone. And we sold that business to Adobe. And while we were there, we got really into podcasts and we were sort of like sitting around asking ourselves, like, how come nobody has done for photos? How come nobody's done for podcasts? What has just been done for photos? And so that was like the original idea, like, and of course, at this time, it was like 2016. Everything was a social network back then. Like, Snap was exploding. And we're like, oh, of course, this should be a social network.
Right?
We should have a feed. We should have a button right at the bottom of the app in the middle. And so that was the original vision. We raised a couple million bucks from folks like Betaworks and SV angel and Eniac and all these.
All these guys.
And. And yeah, like I said, we, you know, we, We. We had to go through a couple of different pivots we raised. I think, to answer your question, John, we ended up raising just under 15 million total.
Sure.
We were about 25 people when we exited. We sold to Spotify in 2019. Did you actually Acquisitions on the same day? Anchor and gimlet.
I remember that.
Yeah, I remember that.
Which is like the cardinal sin of. Of launches is like, if you have two very interesting launches, you should just do them, like, space them out and like, you know, get the full benefit of each.
But I think, I mean, you could probably speak to it more than I can, but it seemed like Spotify really wanted to plant a flag and be like, we are in podcasting now. So not just one acquisition. We're taking this seriously. Wait, quick question. Did you ever run into Archie Archibong at Aviary?
Yeah, of course.
I went to high school with him.
I hope he's listening.
Yeah, yeah, I'll have to send him this clip. That's awesome. Yeah, yeah, he was out in Japan a bunch of. Yeah, that's right.
Good guy in Japan.
Huge in Japan.
Honestly, I wanted to ask you about where, you know, as somebody who sold your company to Spotify, worked there for a while and then now you have a much more sort of, now you're a venture capitalist. But, but still, you know, I'm sure very opinionated on the Spotify product. How do you, you know, where, where do you think Spotify is going? You know, we, we had talked about this a little bit offline I'd said and I had even posted about this of Spotify and YouTube have sort of always been on a collision course. Long, ultra long form became very important to YouTube and then they became the biggest podcast platform. And in many ways, like podcasts aren't just replacing radio, they're replacing TV. Right. Which is. So it's super important to YouTube. And it feels like a sort of critical battleground for Spotify. But I'd be curious to get kind of your point of view on the, on the overall battle between these, you know, tech, tech giants. Right. Spotify feels like a small company, but it's $140 billion market cap. It's a big business. Probably would be well beyond that if Apple music wasn't, you know, rammed down everybody's throat. But yeah, I love, would love to get like a kind of general market perspective on that.
Yeah. So taking a step back, and I should caveat all this by saying that I haven't been at the company in like three years. So this is a pure outsider perspective. But I think the big thing that Spotify has always done well and they've always believed in is this notion of bundling, taking these products and these business lines that they have strengths in and then bundling them with other new products, product lines and business lines. And that's honestly why podcasts were so successful for Spotify. If you think back in the day when it was like Spotify head to head with Apple, Apple had two separate apps for these things, right. They had music and they had podcasts, two separate apps. And that was a, that was a total gift to Spotify because Spotify could take the podcasts and put them right next to the music so you never had to leave the experience. And that's really what kickstarted the whole thing. It's like they had a built in audience of hundreds of millions of people that were one tap away from podcasts. And I think, you know, maybe to start Getting to the question you're asking, I think that's, that's how they've probably thought about video as well. It's like, hey, we have people listening to music now. We have them listening to podcasts. What if we bundle in video now and that opens up a whole new market for us? So the obvious place for them to start was with podcasts, right? Like, they have every podcast in the world already now. Let's get these people to add videos to these podcasts. But, you know, again, as an outsider, you have to imagine the next step is you start to see other types of video content on the platform. And even if they can start chipping away a few market share percentage points here and there of YouTube's catalog, that's a big deal for Spotify. So, yeah, I think it's, I think it's a pretty smart move.
How do you think about the relentless march of the algorithmically curated feeds in the podcasting world? I think a lot of podcasters are super, super happy that they're in the RSS feeds, and they feel like it's almost as strong as having someone's email address. There's a very high open rate. If you have that RSS feed, your weekly show, you're dropping a weekly thing right at the top of their Apple podcasts app. But. And Spotify has a similar feel right now, but you could imagine them going to something that's more algorithmically generated, more variance in the, in the total views. You see this on YouTube where, you know, Mr. Beast can be, can be reliable, but for most other creators, it's like a banger and then a flop and then a banger and then a flop. And we all feel this on Apple when we post. You know, it's very high variance, but you can go really, really big because it's an algorithmic feed. You know, your, your podcaster who's built on RSS pretty hard to all of a sudden have one episode go 10x bigger, but the downside's very protected. Do you think my question is basically like, if I'm an RSS podcaster and I'm thinking, hey, I want to go to Spotify, this is a little dangerous because I could see them going more algo feed in the future and then that introduces more volatility to my business, maybe that's good, maybe that's bad, maybe. What's your read on that?
Yeah, I mean, I think the RSS feed is a very, very controversial thing in podcast land. You have the podcast purists that will live and die by the RSS feed. I mean they will fight you to the death if you tell them that RSS go away. But on the flip side, it has lots of limitations. The RSS feed, it's not like a two way channel. Right. It's very limited in terms of the functionality it can ultimately provide. And you know, I think there's probably no coincidence, two biggest platforms now for podcasts, Spotify and YouTube are not really RSS based anymore. Right. They're all doing things that layer on top of the format that have nothing to do with rss. And so again, I know like the RSS purists are, you know, probably want to, want to murder me right now, but I just don't, I don't know if the, the format is viable long term as a solution. I think because like you said, you can, you can get massive, massive distribution on YouTube that you can't get through just like a plain old RSS feed.
Totally.
Yeah. The two things, as a creator now, the analytics on the RSS feed are just obviously a joke.
Terrible.
You basically get no analytics. And then with Spotify is a lot better. But then the distribution, which we're already seeing this with Spotify, we're growing our audience just by nature of being on Spotify versus that's not really happening on Apple. It's sort of us driving other sort of top of funnel growth. But anyways, it's the exciting time.
It's the classic centralization versus decentralization argument. Right. And in most cases, I know people don't want to hear this, but centralization often wins.
Yeah.
Yeah.
What's your take on the pivot to video? For most podcasters we saw a big one today invest like the best now has video. I started on video with YouTube basically. I never really had a. Of pure audio product. I think the first episode we did was video. We very much enjoy video. But is there any hope for a creator that just wants to stay audio only for the future?
I don't think so because again, we're talking about Spotify and YouTube being the predominant platforms right now. And we know that those algos, they need the video, they crave the video. I think users got wise to this.
Actually.
It was during COVID People don't realize it was during COVID when before COVID people were recording podcasts in studios, in booths. Right. Similar to how you guys are now. But they weren't video booths. Right. It was just like a microphone on a table. And then Covid, everyone went home. And the, the way that these Shows kept going, was through Zoom in Riverside.
So you get video.
So all these podcasters got video for free and they were like, oh, if I upload this video to YouTube I get all this distribution.
Yeah.
And now you can't go back. The algo craves, craves the video craves the video.
Makes sense. The AI guys talk to us about. I'm going to butcher the name Oboe. I've only read OBO Oboe. So this is a company you basically incubated, you're a co founder but obviously you're still a full time investor. Maybe talk about that dynamic and then what you guys are working on.
Yeah, recently co founded this new company with my former anchor co founder Nir Zickerman. He's the CEO, he's running it full time. I'm, I am not full time on.
It as you mentioned, I'm a full.
Time partner at Lightspeed. Basically the, the premise behind OBO is very, very simple. We, we, the humans, you guys, me, everyone, we have invested many, many billions of dollars over the past couple of years in making machines very, very smart right through through AI. And we believe with Oboe that it's time for the machines to make the humans smarter. And so this is a company. The premise of AI making humans smarter than you guys have all heard a lot of talk about, you know, a hyped up use case of ChatGPT has been, oh, it's going to be a personalized tutor. It's going to help people learn. ChatGPT is not really built for that. Yes, yes, it's helpful for like one off asks, hey, tell me about this thing. Tell me about this thing. But John, it doesn't know everything you've ever learned and it doesn't know what your interests are and it doesn't know what your goals are in you know, maybe learning a new language or learning about, I don't know, some theory around finance or something. And so that's the basic premise of what, what Oboe is solving. We have a beta coming very soon. If people want to be the first to check it out, just go to our, I guess our ex Oboe labs at OBO Labs. But I'm very, very excited for it and yeah, I think people are gonna really like this product.
Awesome.
Yeah. And you, you dropped by the PMF or Die Cage to support the players recently and they're working on a problem that's, that's sort of adjacent. But, but yeah, maybe you know and funny enough, we just before this we had the founder of Synthesis, which is an AI tutor and so it feels like, it feels like we're maybe, I'm sure maybe people have already done it, but sort of a broader market map around, you know, AI and learning.
Maybe they're in the app store moment where there's a bunch of we need to build products around this stuff. We have the new technology, but you know, what is the dominant product factor, product form factor for each of these use cases. And so it's a knockout drag out, fight. Good luck out there.
Yeah, yeah.
What I mean that's, it's usually a good sign, right?
Yeah, totally. Things going on and consumers benefit. I mean everyone benefits. Like, you know, you, you, you pace of iterations very fast. You get to test a bunch of things, you get to try new stuff all the time, everyone. And then, you know, at the end a bunch of people make money, which is great. Exactly.
How do you, how do you think about the pressure? So you're sitting on both sides of the table, right? You're an investor at Lightspeed, getting an opportunity to look at and invest in some of the fastest grow exciting companies in the world. You're on the founder side now. Meanwhile, the average founder is being inundated with content around companies going from 0 to 10 or 0 to $100 million in this super short period of time. Meanwhile, you at anchor, you know, pivoted multiple times and iterated towards this idea and eventually had a fantastic outcome. But it wasn't this sort of straight shot, linear. As a founder now and from the founders that you talk to, is there just sort of this extreme pressure around, I need to deliver faster results than ever. And do you think that could have a negative impact on outcomes? Because when I think of Oboe, I think, okay, massive tam, massive opportunity. This can be a $10 billion plus company if you look at, you know, companies like Duolingo and things like that in the public markets. But I could imagine that you're going to have to sort of iterate in the same way. So what does success look like for you and what advice do you give founders that are kind of facing that pressure to, you know, put up ridiculous numbers in a really short period of time or be, you know, relegated to the like, you know, sort of not top tier company.
Yeah, we actually talked about this in the, in the PMF or die cage.
In the cage with the guys, as one does.
There are a lot of startups right now that are experiencing explosive revenue growth. Right. It seems like every week that chart has a new line on it. Like zero to what? You know, the chart.
I'm talking about 100 million ARR. Six months, two months, one day, zero days.
Yeah. Something we talk a lot about at lightspeed is, is like high calorie ARR and low calorie ARR. There's a lot of like, cheap ARR growth out there. And I think a lot of it has to do with the fact that AI is very magical. People see these products, they're kind of like blown away by them and they're like, oh, here, take my credit card. Like, I'm happy to pay. But that doesn't necessarily say something about how sticky these products are or how good they are or whether or not these users will actually retain. And so, you know, with a lot of these explosive high ARR companies that we've seen over the past couple of years with AI, it's not really a secret. You guys have probably heard of this as well. Many of them are very, very churny. Right. They churn very quickly. A lot of trialing, a lot of like, ooh, I want to experience this magic moment. Take my credit card, but then I'm never coming back. And so, you know, the advice I gave to the kids was I think we got to remember to continue to pay attention to like, the metrics that have always mattered. Right. Things like consistent user growth and retention and making sure like the retention cohorts flatten out. They don't just like drop to zero. Because I think people are getting like very, very hung up on this ARR metric, which is great. I mean, it's a business that can go from 0 to 100 in six months. Phenomenal. But you can't ignore the traditional metrics that tell you whether or not a product is good. And I think, I think that's going.
To be really important.
Yeah. So on your side, are you, are you ready to. You obviously started this with your former co founder. Are you guys ready for. You know, I think you have like, good instincts here, but you, you must be sort of ready to, you know, do as many. Hopefully it's a one shot, you just nail it out the gates. But it sounds like you guys are ready to pivot as many times or sort of adjust the strategy as many times as necessary because it is such a big problem space. There has to be a. There's definitely a billion dollar business in here somewhere, but you know, it still takes work to find that spot.
Absolutely. I think you got to be willing to pivot. And by the way, that's what we see like, you know, in places like yc, these companies pivot Sometimes like, like five times over the course of two weeks. The pivot is so important. And you know, the other thing I would say is not only do you have to pivot, but you have to move faster than ever. I mean, the thing that I felt when I went in the cage with the guys was I've never seen people move this fast. These guys have been in there two weeks. They showed me what they're working on and I'm, I'm not going to reveal it. They told me not to reveal it. But the, the amount of progress they've made in two weeks, I've never seen anything like it. It like they literally went from not having a line of code to having a very fully featured app, iOS app. They're about to ship to the app store. There's never been competition like this before.
Yeah, yeah.
It's insane. I interviewed this, this guy, Josh Moorer on my podcast. He started this app called Wave. Have you guys seen this app Wave?
I haven't.
It's kind of like, kind of like Renola. It's like a note taking thing with AR.
Cool.
It's doing like 5 million ARR. He built it by himself just like he had never coded before in his life.
That's amazing.
And he uses AI to not only teach him how to code, but to write the code and to generate the marketing. And it's just the level of intensity and competition right now is unlike anything we've ever seen.
That's fantastic.
Switching over to putting on your investor hat wanted to give you an opportunity. Lightspeed's big investor in Xai, you know, and has been just one of the most active investors across the foundation model landscape. I'd love to, you know, besides the obvious, you know, you just sort of invest in Elon companies and you know, you tend to do well, what was like sort of more of, you know, without going into, you know, go into however much detail you want but like break down kind of the memo on the XAI thesis.
Yeah, I mean a lot of what has been reported publicly, you know, aligns with, with our, our thinking and our thesis. Thesis. And that yes, betting on Elon is a pretty smart thing. But, but more than that, it's, it's the level of intensity, I mean to again bring it back to the speed and intensity that, that he and the people that he hires brings to the team. And so, you know, the first time we talked to that team and they were telling us about the data center that they were going to build and again, it's been very Publicized at this point, we were like, wow, like if, if you could actually do this, you would, you would go from basically the starting gun to, you know, being at the same level or possibly exceeding OpenAI in, in a matter of months in terms of model performance. And, and then they went and did it like, they literally did it in like three or four months. And I think that type of intensity and speed and scale that, that, that, that only Elon and Elon like companies can actually do, combined with the fact that they've got obviously this incredible distribution channel right out of the gate through X. And not just a distribution channel, but a really unique content set to feed off of the model. Right. This model, unlike most other models, it has real time information that they don't really have. And that real time information also serves as a surface to trigger usage of the product. Analyze this post. Tell me more about this. So I think those are some of the factors that got us excited and the team has as far beyond delivered on what they said they would. So it's been really exciting.
Yeah. What. You know, obviously you can't share any details here, but should the, should the broader market expect more foundation models or is it kind of getting to the point? You remember in crypto it was like, okay, we don't need another like foundation, we don't need another L1. Like, like, and then you'd see one and you'd be like, really?
You know, like, but this one, this one built different.
Or, or, or do you think that, you know, the five or six major players, thinking machines, XAI OpenAI SSI are those like the labs that, you know, you know, we're sort of betting on or do you think there's room for, for more teams there?
The way we were framing this was like, like if it is commoditizing, well, commodities are valuable, oil is a commodity and everyone wants to drill for a well.
Yeah, it's very common.
The more wells you have, the better. Get a bunch of wells.
Yeah, it's capital intensive, but if you put together a really great team, you can just start a new oil company and being worth something.
But yeah. What are you thinking about it?
Yeah, I mean, I think a few weeks ago a lot of people wanted to have the debate about whether or not deep seek meant that models were commodities and nobody should ever train foundation models again. I actually feel like that was the wrong thing conversation to be having. You know, the way we think about it at lightspeed is these, these companies are not just models, they are companies. They have distribution, they have Customers, they have data. Right. They have security, safety, like, things that enterprises actually care about. And so, you know, I think, should there be more models trained? Maybe, but I don't think a model by itself is necessarily interesting. I think there needs to be a product and a team behind it. And so I think if you were starting a model, you know, if you were starting a company today that was training a foundation model, I think you need to either bring something very, very unique to the table in terms of what that model can do, or you better have some other advantage in terms of distribution or some sort of data that other players don't have access to that lets you jump up ahead. And I think, like, that's an example of something Elon and the XAI team were able to do. They were able to build this data center in a way that no one else was willing to do, to jump ahead. Right?
Yeah.
Yeah. That's a little bit of the way that we think about it and talk about it.
Yeah. That's fantastic. You have any other questions?
I think we covered everything. It's been great having you. We'd love to have you on when you have news with oboe, new investments, things like that. Come on. We're all about conflict, right? So we want people coming on that have. Have positions in the companies discussed on this show.
Highly conflicted.
Yeah.
So it's no conflict, no interest, right?
Exactly.
Yeah.
That's. That's why you.
Come on, pump your bags. Then we'll have your direct competitor come on, pump their bags.
Yeah, yeah.
Why not?
Why not have you both on.
Shout out to the guys in the cage, by the way.
Yeah, yeah, yeah, yeah, yeah.
Thank you for. Thank you for coming on. Thank you for supporting the players, and we'll have you back on here soon. Have fun. Are you gonna go play some music right now?
I don't know. Maybe.
Why not generate some music around with.
That Gibson in the background?
Yeah, generate some music. Honestly, skip the Gibson.
Wait, you're in Boston? Are you staying through St. Patty's Day?
No, unfortunately.
You got to go to South. You get hammered on Guinnesses and throw up in the street like you're just.
Boston and just college student yell about your striped secondary.
Yeah, yeah, exactly. Yeah.
Be fun in another. Another timeline.
Maybe another life. Yeah.
Yeah. I don't know if my wife. Hey, I decided to stay.
There's gonna be green beer. There's gonna be green beer. I have to drink it. I have to do a keg stand in Southeast. I'm sorry. Exactly. Yeah.
Anyway, she'll Understand.
Great hanging out with you. Have a great rest of your day.
Great to see you, Michael.
We'll talk to you soon.
Later, guys.
Talk soon.
Cool.
Michael's a man.
We're, we're like informally doing a full, like deep dive on AI education today. Yeah, we got that. We got oboe. Now I want to go to Connor Zwick over at Speak. This is for language learning.
We already did a size gong whole segment on this, by the way.
We did.
So I think we should skip this.
Okay, yeah, let's skip it. But we do. But I do want to have them. I do want to have them on at some point. But yeah, little, little historical size gone. You know, you got to do it. You got to do it. Any, any excuse to hit the gong.
Yeah.
Really.
We'll take it.
Well, let's go over to Saga and Jetty, good friend of the show. He's reporting. He's getting a little political, but it's fashion based politics. And so we'll cover it here on the show. Denied entrance to the chamber, to the Senate chamber for Senator Jim Banks for wearing Cloud Runner running shoes with a full suited tie. He wasn't wearing proper footwear. And Sager says the way I feel reading this must be what it's like to get high on heroin because Sager has been beating the drum on. We need our politicians to be well dressed. They need to be wearing suits. No more sweatpants, no more, hey, dress.
Is at least as nice as we do this show.
Yes.
Which John sometimes gets upset.
Yes.
Because I'm not wearing a jacket, but I just like to wear a college shirt sometimes. Do a little business casual. It's too casual for John.
Casual. Unless it's casual Friday, in which case we should be in Jeff Lewis tank tops. Anyway, love, love Sager highlighting that. Speaking of Jeff Lewis, he's the next post in here.
There we go.
He says Jeff Lewis over at Bedrock says things that go up only over 10 year time horizons. Select individual companies led by transcendent entrepreneurs, private and public. Tasteful ultra luxury real estate. I like where he's going with this. Land in select locations, select cryptocurrencies, select precious metals and select artwork. He says that is all. I love it.
Ominous.
Great post.
Yeah. So if you're in the Mag 7, rotate to select precious metals.
Well, if your Mag 7 company isn't led by a transcendent entrepreneur, because if you are led by a transcendent entrepreneur, it doesn't matter if you're public or private, you can still go up over a 10 year time horizon, but otherwise get out and get into some ultra luxury real estate, some cryptocurrency, some precious metals and smart work.
I do it.
I think we're getting up to speed with the ultra luxury real estate. We're getting up to speed with the crypto and the precious metals. I think we're behind on the artwork. So we should have him on to talk about that. Where's the bull market? There's always a bull market somewhere.
Well, art's great because you can find an artist that you like, buy up all of their available, you know, works and then just start, you know, putting them up in auction. Buying them yourself. Yeah, you know, sort of market.
Chandelier bidding.
Yeah.
Are you familiar with chandelier bidding?
I think so.
It's a phrase for when you are essentially bidding on your own.
Yeah.
Just to like kind of raise the reserve on a piece of, of on something that you're. You're auctioning off. And of course, if you win your own, win your own auction, then you have to, then you have to pay the fee, but the fee for the risk of pumping up the price, you know, demand.
I think that's just called market manipulation. Chandelier bidding. I just looked it up.
Oh yeah, what is that?
Where the auction. Oh, the auction house tends to see a non existent. To see a bid from a non existent part of the room. So you go oh, oh, oh, okay. And. And we're going up.
So it's the auction house trying to punch their bags. Yeah, I got it.
It's not what you're talking about is even more real where, you know, I know people that, let's say you own 30 pieces of artists work and one of their pieces that's comparable to yours goes up for auction. If it doesn't sell, well, then your entire collection you might as well just buy. So you might as well just buy.
Mark.
Yeah, Mark it up Smart. Mark it up. VCs do this.
Yeah, they're like, they're like all of the, all of the foundation model companies are worth so much because every time one comes to market and it's worth billions. And so you know, the first one I invested in certainly has to be worth a trillion. Who knows? Anyway, speaking of a company that sorely needs to acquire one of these foundation model companies, Transcendental. Apple plans one of the biggest software overhauls in its history for iOS 19, iPad IO, iPadOS 19 and Mac OS 16.
If you love the Photos app, you're going to love this.
Looking to revamp its operating systems. For a new generation of users. And Rajvir says, I don't trust 2025 Apple to pull this off. They might just incinerate the greatest business ever created. And Chris Horn says, yeah, I'm taking under on this. I don't know, I don't know if they can incinerate the greatest business ever created. But they definitely need to try something new. They definitely need to get some fresh blood in there, take some risk.
They could really make the software much worse and it would still take a lot to actually compete with them on the hardware.
People don't like green bubbles and yeah, the hardware is hard to make. Like it's a very reliable product. It connects to the wireless network reliably. People forget that like, you know, a lot of the beauty of the Apple ecosystem is just yeah, like it finds the 5G tower or the LTE tower or it doesn't drop phone calls that often like that. Those are considered table stakes but they could go away if you, if you get lost in something else. Anyway, Jared Rosner says huge opportunities for AI startups that no one is talking about. AI native broker, when broker transactions can be fully automated. Those markets for context.
Jared.
Hey, really quickly we got Delian on the show.
Oh, bring your big O's.
Hey, how you doing Delian?
What up am? Congratulations on launch day. Making tech great again.
Yes, thank you, thank you.
What's new with you? How did you, how did you enjoy the weekend?
You know, Tahoe, terrible place to ski, great place to hang out with friends. Always, you know, sort of happy to, you know, sort of be there and you know, God bless, you know, sort of Coogan's wife for being willing to carry two big Coogans inside of her once upon a time. Really hard. Wouldn't want to do that myself.
Well, I mean she got, she got a relaxing weekend. It was good.
It was all worth it.
It was all worth it.
You have twins.
It was all worth it in the end.
Twins. If you have twins, twin boys. Give me a third son. Yeah, I'll take you to Tahoe.
I actually didn't get to ski with you, Delian. Are you good? Can you do backflips and 360s or.
You know, I think I was the best skier on the trip but I'm not quite at the level of doing backflips. But I do have many friends from high school cause I went to high school Utah that are very backflip capable, including my little brother Pavel's co founder, Jeff Morelli. She's sort of CEO out of New York. Not skiing very much, but a very.
So where are you on the. Where are you on the skiing risk curve? Do you ever scare yourself skiing? John and I were talking yesterday. If you're getting the point where you're genuinely scaring yourself consistently, it's probably too far. But at the same time, skiing. I was telling a story in December. I was in the Alps helps and having the best run of the trip. You know, got distracted for a second and fell like 200ft. Got a yard sale, did a yard sale, then fell like another 200ft. But you know, that that happened once on the trip. That's maybe the most that I'm comfortable with. Where, where are you on the risk curve?
You know, I think I'm very bad at the risk curve and I should be better at that given that I have a wife and, you know, sort of child. But weirdly, somehow in skiing is not the place where it shows up. Like, I've had probably more near death incidents in like the first first quarter of this year than like, you know, the prior decade basically combined. And so it's made me think a lot about maybe I need to adjust my risk curve, but somehow it's flying because I just ski for so long that I know the downside of, like, I did all the crazy shoots and cliffs and all that stuff when I was younger. So, like, I don't feel the need to like, quite go that crazy. But then yet again, earlier this year, I found myself in this place where I was just like, I kept powder hunting. Where was I? Oh, yeah, in Deer Valley. And I just kept going slightly more up off piece and slightly more off piste and slightly more off piece until at some point I found myself going a little too fast up a cliff that I didn't know was there. I managed to catch myself, but unfortunately, like halfway down the cliff, where I no longer had an option of like climbing up, I just had like, the rocks below me but not enough speed to clear them. And so I was like, well, there is only one way out of this. It doesn't involve like, you know, waiting an hour for ski patrol to, like, you know, come and grab me. And it's like, it's time to go rock ski skiing. Launched myself, skied across the rocks, a little bit went off, and I was like, I think I'm done for the day. So, you know, I'd like, I've gotten better my wrist curve. But yeah, I purposely only grabbed super thin racing carving skis. I'm not even tempted to go off piste. The only thing that these things are capable of is carving.
Are you, are you having those near death experiences as a pilot? You fly small planes. The pilots I know will tell me these stories where that are just like the most harrowing stories about a single landing on just like what was supposed to be a casual trip. And they're like, yeah, it was raining and we lost connection with the tower and it was like completely pitch black and there was no lights on the Runway so we had to land and the plane was like going backwards, there was so much wind and I'm like, how does your wife let you do that? Where are you having near death experiences other than skiing?
You know, every motorized vehicle that I find myself behind, whether it's in the air or not, I somehow have found myself in a bad situation over the past quarter. I'm so deep in the doghouse that I'm putting myself through a remedial program of I'm very good at the technical nature of the operation of the vehicle, but it's the higher level risk calculus of what situations I put myself into that is very poor.
Poor.
So my remedial program is I went and back to all my flight trainers and I went and found the oldest one because as they like to say, there are bold pilots and there are old pilots, but there are not bold and old pilots. I think it's important for me to become an old pilot rather than a bold one. And I think right now sometimes I'm a little too bold. So that's great. Out from south la, which speaking of, of excited to be in LA with you guys a little more often lately.
Yeah, yeah, we're happy to have you. Well, stay safe. I wanted to run something by you. Obviously there's turmoil in the financial markets. We were pitching something called the yard sale theory of financial markets, where basically every ski season the capital allocators go, they're speaking freely on the ski lifts together, they know no one else is listening, they share stock tips. And then the market crashes. And so if you look at like Theranos, it happened during ski season. FTX happened during ski season. Enron was discovered during ski season. What do you think of that? Or why do you think the market's going down right now? What's gone wrong?
You know, there is a, like historical seasonality to like the stock market. I remember, you know, sort of seeing something similar where it was basically the past, like, you know, sort of 50 years of the steepest dry downs of the S&P 500, something similar, like 80% of them happened between like October and February. There's a component of that that I'm sure is also like tax season related where like people want a lot, you know, sort of gains versus losses at the end of the year, but not too closely, you know, sort of coupled to it. I'm sure there's a component of it is, you know, people sharing stock tips in Aspen. There is also the presidential transfer, whether it's, you know, sort of this year or any prior year, always happens at this time of year, which also introduces volatility. And people don't like volatility. The one bull sign that I'll say is I was just looking at this. I don't know if you guys know this website Truflation, which basically tries to do like a week to week analysis of inflation, just tracking grocery store prices, etc. It has, it is actually showing like a pretty steep drop over the past 15 months. And so I'm, I'm a little bit of a believer of like the Scott Besant, you know, there is going to be a detox period.
Sure.
Now I think that some of the moves that the administration are making feel like a little blind and they clearly are sometimes pulling things backwards. Like you do the tariffs, you roll them back, you do a bunch of layoffs and then some of those layoffs like and no, I was just reading today where like they laid off a bunch of like the NOAA commercial sent remote commercial sensing team and then there is a huge, you know, sort of backlash. And so some of those people got rehired like a week after getting fired by you know, sort of Doge and crew. So there is a little bit of like, I feel like they're taking you know, sort of a chainsaw which is not unreasonable when you need a scalpel because it's just like the scalpel may take too long and you know, it only has two years before like Congress potentially flips. And so it's probably a reasonable sort of approach. But I think that's what you're seeing in the market is dear God, like the sort of President and Ellen are taking a chainsaw to the federal government and that's, you know, introducing some level of volatility. I like this. You know, you've, I'm sure heard, you know, Peter say this a bunch, but I love his, you know, analogy on what is the US President and it's, you know, they're the mayor of the United States, but the dictator of the world in that they basically have infinite power over foreign policy. But actually pretty limited power domestically. And so there's so much of, like, the S&P 500 that's been propped up over the past couple of years by just, like, insane amounts of foreign inflows that starts to become, you know, sort of very aggressive to some of our, you know, sort of partners and allies. And especially in Europe, you'll start to see some of that, you know, sort of flow out into, like, their own domestic stock market, which, again, you know, I'm not saying, like, I'm somebody that. That obviously comes from Eastern Europe, and I'm sort of crazy anti sort of Russia. And so I don't necessarily want us to totally concede to Putin, but at the same time, I also think it's important for allies to finally get their shit together. Now, rearming of Germany, we've seen how that's gone the past couple times, so we got to be a little cautious there. You never know. Afd, Elon being very pro fd probably good. If AFD gets too powerful powerful, you know, maybe we're back to Lebensraum. And so that's maybe a little, you know, sort of tricky. But, you know, the Germans, probably you could stand to be a little more, you know, prideful.
Well, speaking on Starship.
Yeah.
Do you have a theory for how long. For why it's taking so long?
Real quick before that, because it sort of leads into this. Right. As the Doge stuff started to get very intense and was sort of top of mind, NASA just happened to come out and they said, oh, by the way, there's an asteroid that's. It's basically. It was like doubling every day. Yeah, yeah. I gotta, I gotta throw this on. We keep this nearby for incidents.
Conspiracy theories.
Yeah, it was like almost every day, it was like doubling the chances that an asteroid was going to hit in 10 years. And I was like, this is just like, it's 10 years out. It's particularly convenient. Conveniently timed.
Now we finally need NASA.
Yeah, yeah, yeah. That. That was. That was kind of the joke. But how did. Do you have any insight into how. Into why they could have had an event that's far enough out that we have probably quite a lot of data on that then there could be that amount of variance in such a short period of time around something as catastrophic as impact.
I'm going to bring up a totally unrelated point and then answer your question. The totally unrelated point is China has now confirmed that they're going to fly Pakistani astronauts to the Chinese space station. So for the first time Now I'm not saying that Pakistan is like a huge, you know, sort of lover of the US or anything like that, but I actually don't know too much about like the, you know, general foreign policy history with them. Do they like US vs China more? I mean, China did basically invade, you know, their next door neighbor India, but I know they hate the Indians. So maybe because that, you know, the enemy of my enemy is my friend. And so maybe therefore Pakistan likes China. But I think the interesting thing to think about there is that China is exerting soft power not just via like the Belt and Road initiative and like investing into infrastructure, but it's like, you know, come visit our infrastructure and it's starting to build up a coalition around that because you can imagine that eventually turning into, you know, Pakistani astronauts visiting the Chinese lunar station. And you know, I don't know if Pakistan's good at a lot of things, but like, maybe they're good at having, you know, sort of some of their folks go up there and be, you know, sort of lunar miners that may have a very high death rate early on, but, you know, maybe they're willing to, you know, sort of push for that. So thinking about some of our, you know, sort of enemies, you know, coalescing around, you know, sort of station in space, you know, potentially scary thing. We got to think about what we do as America on the like asteroid tracking. I kind of buy it in that, man, it's so hard to track even our satellite and we know where SpaceX dropped us off and like where things are going and that's like so close to Earth. The idea that like we have perfect track on these like asteroids super far out, you know, there is, I think, a lot of statistical variability. And then you have to like, you know, the reason that there is, you know, increasing, increasing and then sudden drop is I'm sure what was happening is we have a bunch of these like, you know, sort of deep space radar, etc. Different assets. One of them starts to pick up, hey, this thing is starting to get close. And then it may take some time for us to like spool up a bunch of resources. You probably need the Earth to spin around a couple of times. You have like the Australian radar, etc. Pointing at it and then we just get better and better and then all of a sudden it drops down to zero.
Yeah, every time that. Because it really felt like every day it was a sort of doubling effect. So. And it's very possible that it was like the Earth was just spinning around. We were getting another look at it.
Yeah, that makes sense.
But yeah though, that we did a, like a test run on this. So NASA actually about two and a half years ago did a test run on what we would do if we had to deflect an asteroid. And so they basically slammed a satellite into an asteroid going crazy fast and then measured that they were able to adjust the course of the asteroid.
So how does that work exactly? Is that like there's, there's already, there's already a satellite up there and they just task it to, to move a little bit to intercept? Or is this like we're going to launch a new rocket with a new satellite on it specifically for this? Like what's the trade off there?
I think one of the things that helps with SpaceX and this is both true for like space based like even stuff that Varda, you know, sort of works on on the defense side because you know, Falcon 9 is basically going up like every 24 hours. Now you don't have to think about this stuff as much as like fixed assets in orbit needing to be ready to go. Because the difficulty with that is like now you have to think about like the longevity, the maintenance of that asset. You have to, you know, sort of replace it. Because people don't realize is like, if you're up in low Earth orbit, it's not like you get to be up there infinitely because like there still is a little bit of atmosphere up there and so you have a little bit of drag. And so if you're like 500km in the size of a varsity satellite, you'll still deorbit over the course of five years and basically come back down. And so something like that we can actually just like, you know, have the satellite basically ready to go in a storage facility down here on Earth. The moment we know the asteroid is starting to head towards us, then you know, basically go launch it. And so they've demonstrated that, you know, sort of now, you know, in terms of the like go launch the custom satellite and go send it directly at an asteroid and go hit it. And then in space, even though the satellite is like so, so, so, so so small relative to the asteroid, the speeds are just so insane that like you're going at such a speed that it's like basically like a thermonuclear weapon getting like, you know, detonated on the asteroid at those speeds and you can actually like adjust this thing's course and if you're like, if you hit it when it's like seven years out, even like a 1% adjustment is like a thousand kilometer. You know, basically, like, you know, going off course, in which case you, like, totally miss the Earth. And so, yeah, I don't think we need to be too worried about the asteroid stuff. We've gotten pretty good at, you know, detecting that and, you know, now showing that we can deflect it. Unless you have read the. What's it called, Neal Stephenson book, Seven Eves.
Oh, yeah.
A little dot that goes through the moon. Yeah. Then we're fucked.
Well, so every guy, you know, thinks they could land a commercial airliner, like, if required. Right. Is sort of like, oh, I could do it.
Like.
Like, you probably actually could, given your experience as a pilot. But if we had an asteroid coming here, it. You'd probably secretly get a little bit excited. Cause you're like, all right. Yeah, it's my time. Like, I'm the guy.
I'm going to defy the astronaut. Speaking of needing to, you know, land an airliner as a pilot, if one were to ask me, what's your favorite situation? If you had. If you put me behind the cockpit of a 747, you're like, Dell, you got to land this thing. I would say I would want to be in the northern latitudes at daytime on a very cold day in the winter with super clear skies. Why? Because that's basically, like, the highest air pressure that you can basically get. So the atmosphere is very. And at sea level, so the atmosphere is very forgiving. Basically, you have like, a, you know, sort of ton of, you know, both lift, but then also when you, you know, sort of put your, you know, sort of flaps in a ton of drag, it's basically almost like, you know, flying like, the equivalent of, like. If you've ever seen XKCD comic of, like, if we had humans on Titan, which is one of the moon of Jupiter, you could actually just go out there with, like, wings and the atmosphere is thick enough that basically, like, we could just flap our wings as humans and fly. And so it's pretty surprising that, you know, a Delta pilot landing in Toronto in the middle of winter on a cold, clear day with super high air pressure, somehow flip that thing upside down. That is literally, like, should be the easiest situation to, you know, sort of land in. So.
Well, we need to give you the tinfoil hat and you can tell us what really happened.
I mean, you know, there's a lot of, like, you know, DEI accusations going up there. Maybe it's, you know, the Canadians are starting to try to, you know, fight back against the trade wars by, you know, making our planes flip upside down.
Yeah. UFOs or something. Who knows?
Talk to us about SpaceX. Last week, the haters, the space haters were taking a victory lap.
Yep.
What, what's your take on the situation as, as a, as an entrepreneur who's building on top of SpaceX infrastructure, obviously a big believer.
Yeah. Why is, why is Starship so much harder than Falcon 9 on this? Like, walk us through some of the complexity. Complexity there.
Yeah. I mean, you have to remember Falcon 9 was in the early days ultimately based off of technologies that had like a ton of heritage. There wasn't really anything that was that totally net new other than as they started to, you know, sort of do the landing legs and the grid fins. Right. And those were obviously very, you know, so net new. And as we saw it took them like, you know, basically on the order of, if I remember, like the first landing was like 2014, when it really got operational. I would argue was like sort of like end of 2019. So it was still like a five, five and a half year. And by the way, they were trying to land for like two years before that. So call it like two years of lots of failed tests. Five years even from when the first test succeeded to when it became operational. That was obviously in some ways a much simpler vehicle. It was smaller. It was based off of like, you know, technology that had a lot of heritage. Everything from the metals they were using, the way that the rocket engines were, you know, sort of designed. There was a lot that already had a ton of heritage. Heritage. As we flip over to Starship, those technologies just do not scale to the size of Starship, especially as they start to think about distributed engine architecture. They wanted to be able to re enter, et cetera. So Starship is both a huge leap in size, but you're also discarding this whole history of aerospace that previously you were building on top of. And so the fact that they've even made it this far this quickly is, I still think, astounding. Obviously the company's a lot bigger. They have more resources. You want to push for, like, hey, they should be able to make sort of faster progress. But I don't see it as any sort of like existential, you know, sort of risk. I think it's just that the company is way more high profile. Like in 2013 and 14 where all these rockets were like landing and blowing up. I don't feel like there was like huge news cycles around each one because Elon was like a loved lib you know, that, you know, the media, you know, treated as like a darling versus, like, you know, he's, you know, seen as a Nazi. And so anytime anything ever so slightly, you know, goes wrong, they're trying to, you know, sort of attack, you know.
I mean, SpaceX even turned all the crashes into this, like, vibe reel with like, in the hall of the Mountain King playing. And it was like celebrated by everyone. It was like, oh, yeah, they blew up so many rockets. This is how progress happens. It's awesome. It was great.
Yeah.
And now it's.
I mean, there's also. I don't know if you guys saw. Actually Kiko Duneff, who's the VP of launch at SpaceX, actually just wrote, you know, maybe it can be one of the tweets you guys discuss at some point, but he just, earlier today, like two hours ago, wrote this like super long tweet to like a random SpaceX fan Twitter account, basically asking like, what's going on? Why are things. You're taking a bit, you know, sort of longer, etc. And if you want, I can even text it to you. Kuk. I don't know if it's something you guys.
Yeah, we should pull it up right now and maybe walk through it.
Let me, let me text you the.
I got it here. I found.
Oh, you got it, don't you?
Yeah. Cool.
It's like this long, you know, sort of super long Rapai. But it was basically like, look like, you know, they are just flying a lot because, like, Falcon 9 has also had more issues over the past year, sort of six months than like the prior five years combined. And I think you get it from his point. It's like, you know, sort of. Look, some of these boosters are getting sort of a lot older also. Just like the sea conditions off of Florida have actually been sort of pretty crazy. And so that's been more refurbishment. We're now starting to learn what happens when something flies 12, 13, 14 times in a row. And so we still have a long ways to go until, like Falcon Nines are at the level of safety of like a 747. But remember with commercial aviation, from when the first jet tube sort of airliner came on to when we basically stopped having deaths other than let's ignore the DC thing, which more has to do with like, air traffic control than it does with, like the jet. It took us on the order of like 50 years for those things to become very, very safe.
Right.
Like, we basically had lots and lots of airliner crashes in the United States until 2012. And then in 2012 they basically stopped or maybe it was like 2010 and then we didn't have them for like 15 years other than this like DC thing. And so I'm sure Falcon Nines will get to that point. But like, it may be like, you know, 30 years of finding all the weird edge cases, atmosphere, this sea condition, this thing before. These things are like as reliable as commercial jets and they're more, you know, complicated than commercial jets are. Oh, one analogy that I like to, you know, sort of bring up that, you know, some of the viewers might, like, people think about like, how expensive is it to go to space, etc. If you think about it on like a unit of fuel, of like how much fuel you need to get up there, the amount of fuel that it would take for somebody to transport us from like London to New York on a 747, that's basically the same amount of fuel, like hydrocarbon energy that you would need to get up to orbit. Which gives you a sense of like once.
On a per person basis, this.
Yeah, on a per person basis. At this point, if you think about your like tickets to, you know, from London, New York, it's actually mostly the fuel cost, right? Like they've largely amortized the airframes over so many passengers and so many flights, you're barely paying for that. And so to give you a sense of like, what is the terminal cost of going to orbit? It's going to be roughly like a cross Atlantic flight is basically like how much it should cost, like on the order of like 500 or 700 bucks for like an economy ticket.
Interesting. Yeah, great. That probably unlocks point to point as well then like the SpaceX point to point, just like using the rockets to get from New York to Japan as well. Similar cost.
Yeah, yeah. I mean, obviously that's where it's like, okay, the rockets now have to be probably as safe as that because the people that are going to pay for that are going to be like the richest people in the world. They're also the most safety conscious, which is what I always think about when people are talking to these like faster jets, et cetera. I'm like, man, people are definitely willing to pay for some speed, but like rich people also really care about being safe too.
So there is a little bit of.
This like, like, you know, people claim, hey, I'm going to build the like, you know, the Tesla style, you know, what was their first vehicle called the expensive one. And then, you know, on the roadster it's like the roadster of planes approach is like a little harder to do. Like the crazy people are more the like, you know, small, you know, sort of pilots like me that are a little crazier but like, you know, I don't know that like, you know, Mr. Peter is, you know, hopping on his jet anytime soon.
Yeah, talk about Eric Schmidt going to Relativity Space. He's obviously been a big backer of the company. You have some of your own opinions and then we'd love to maybe have you extrapolate a little bit on just for context.
We cover a lot of posts on X here, but we don't cover deleted posts.
Yeah, that's probably. There were some great deleted posts performing quite well. But the team here is all about not making enemies. So I've got to play it say.
The deep state came for you.
This is the problem with two jobs is you have twice the number of people that are trying to get you to delete tweets. Yeah, I think I should have 0 jobs that way I have 0x the number of people trying to get me to delete tweets.
I can't wait for that moment where you're just running your family when he's running his family office from Mars and he can just say whatever he wants. No, but just 30 minute delay.
So even if people ask me to delete, it's like so late that it's like it's been up there for an hour already, you know, sorry, let it ride.
Just unhinged.
Talk about Relativity as a company that presumably would want your business, you know, should it, you know, continue to make progress.
Yeah, I mean, you have to look at it from our perspective, right. We have to sign launch contracts basically on the order of like two years out because that's basically how long it takes us to like supply chain plan things, build vehicles, etc. That's how far out our customer contracts are. You know, we plan on, you know, call it roughly that two year cycle. And so if I'm signing a launch contract two years from now, I better have that, you know, vehicle ready to go. Otherwise like my customer's going to be as disappointed and all of a sudden I'm like holding up revenue.
Revenue.
And so from a commercial basis, it's like really hard to sign contracts with anyone but SpaceX right now because no one's showing any level of repeatability. Like even though, you know, sort of Blue Origin has gotten to Space, Firefly, Rocket Lab, et cetera, have nobody's matched like the consistency or the price of SpaceX and nowhere close to it. Right. It's like, yeah, there's, there's not even like an obvious number two even anytime soon. It's like for me to feel confident in, you know, let's say Relativity, they would both have to launch like this year. They'd have to probably do it multiple times and multiple times next year. And then maybe, maybe at the end of 2026, I would consider signing a contract for 2028. And so, man, that's like a really tough business to take over. You know, I think in 2017 the sort of consensus viewpoint in Silicon Valley was that launch was this commodity. There was going to be like, you know, four or five players, there was going to be very, you know, sort of low margins and it wasn't going to be a place where you could generate many, you know, sort of venture returns. And it turned out that it's actually quite the job Visit. There's basically one player, SpaceX effectively represents 99% of the market and has like insane profit margins on their launch business. It's something on the order of like, you know, sort of 50%, you know, sort of gross margin is like the rough report numbers that I've seen publicly. And so man stepping in as Eric Schmidt into Relativity, it's like one, my understanding is he's basically funding the company payroll to payroll. That I always think is a really hard cultural place to be as a company because you're both on the brink of death, but then also you don't have an obvious death date.
Yeah, emotional sort of, you know, you might feel great about the company one week and the next week and the CEOs like, Ah, should I? Should I? Whereas funding, you're like, at least I'm funding for 24 months of Runway and.
You know, try and do the experiment.
We're gonna have good weeks and bad weeks, etc.
Yeah, exactly. Like this is why I think a lot of these billionaire funded projects where they, the billionaire has made it clear that they will backstop the company somewhat indefinitely without a clear end date have never really worked because you don't have this clear. Like I think what's become the magic of venture and how it's been staged out is like you have this very clear window, you have 24 months, you have to accomplish a lot. If you don't, you're dead. And if you do, you get to march onto like the next window. And like there's a reason why Darwinistically, basically all the best companies the last 20 years have gone through those windows and the ones that tried to like avoid those windows basically haven't worked.
Right.
And like we can list so many examples, examples of this airship, Kitty Hawk, etc. There's been like so many types of projects.
Yep. Larry Ellison has a farm.
He's spent like almost like a billion.
Dollar, he's like half a billion into it and it doesn't seem like it's going too well. Yeah.
And it's like I, I think when people try to avoid this in self fund, like I tell billionaires when it's like when you're going to start a company, don't do the backstopping thing, still race so much, or participate alongside the venture rounds and make it clear that you'd like to invest in the company, but predicated on like again, hitting, you know, sort of these milestones and growth. And so the thing that I think is really hard about this Eric Schmidt situation is like you're both totally decoupled from the, like, we need to hit milestones in XYZ period of time. But also it's not like, you know, Eric has indicated I'm going to fund this thing for multiple years. You're sort of like, you know, on some indefinite, you know, time period, which is like the worst parts of both worlds. And then also SpaceX is just continuing to succeed and there's other players. Like, you know, at this point, relativity was thought of in 2021. Let's say relativity was thought of as like the number two just because they had so much funding, momentum, etc. It's like you're not even number three anymore. Right. Like number two is obviously very much so. Rocket Lab number three at this point is Firefly. Right? Firefly is actually getting to space on some regular basis. They just landed on the moon. You know, I'm sure it's going to generate a ton of investor interest for them. Like even though their prior CEO twiddled some diddles and had to get, you know, booted from the biddle, you know, the new CEO is, you know, hopefully not going to twiddle some noodles. Rockets is dead.
Let's keep it focused.
Are there, are there any. How closely do you track, you know, China's progress? Do they have anything that could be competitive with Falcon 9 in the next 15 years? I'm assuming they're stealing all of our sort of trade secrets actively. But it still takes, even if you have the master plan and you know, even the schematics, it takes quite a lot.
Is there a Chinese Varda yet?
There's an Indian Varda as of yesterday. Yeah, it's actually in the latest White Combinator batch. Props to them. It was a very cool launch video.
Okay, cool.
That was awesome. You know, look forward to hopefully there being Chinese Varda and, you know, African Varda and, you know, I just want every continent, Aussie Varda.
You know, it would actually be very bearish if you weren't getting copied.
Exactly right.
You want that.
That's always my perspective. You're not getting copied, then your idea is probably not very good. So there are plenty of spaces X copycats even today. Of course, on the Chinese side, they don't have anything that is anywhere close to landing, but they're clearly just willing to throw manufacturing and bodies at the problem where I think it's something like SpaceX has launched 27 times so far this year. China has basically launched 19. So it's, I mean, in the grand scheme of things, it's like pretty close. I believe they just, you know, are, you know, very good at manufacturing these things very rapidly and then just pumping it off the line and just not dealing with, dealing with reusability. And so it's somewhat been like there's a couple of Indian launcher companies that have taken that approach too. It was like, we're not even going to try and do reusability anytime soon. We're just going to make these things super, super, super cheap and then at some point we'll think about reusability down the line. And so the Chinese are definitely like, if it weren't for SpaceX, man, there would be like red panic bells all over the place. You know, sort of God bless that SpaceX has actually succeeded the level they have, otherwise we would be like very far behind the Chinese.
Is there is what, what's the chatter within the space industry of, you know, we've seen plenty of, you know, undersea cables being cut. How worried is the average space founder generally? Like, how worried are they about sort of sabotage? Is that something that's sort of like a risk factor in a, in a series C deck where they're, where they're like, you know, you know, is that, that, is that even the right question to ask?
I would say, like not too worried. It's not to say that it could happen or anything and we should underwrite this, but it's like the, the thing that would be really bad is if like Russia basically, you know, nuked low earth orbit, you know, detonated through a nuclear weapon and you had a bunch of like highly charged ion particles, you know, Basically orbiting around Earth at a much lower level than where you like the Van Allen Belt is because it basically destroy everybody's LEO business right now. Part of why Starlink works is they're low enough in orbit that the Earth's magnetosphere basically deflects the solar winds. So you're, you're still relatively protected if that all of a sudden becomes a very unprotected zone. You have a ton of radiation, man, everybody's economics basically just blow up. Actually one of the few that probably doesn't blow up is Varda because radiation basically screws you on a day by day basis. And we don't need to be up there for very long. But anybody whose business case is built off of like being in space for a longer period, period of time, man, if the Russians launch a nuke up there, that'd be really hard. And I haven't seen any like how one would fix that problem if they did. Like I don't think that like there's even like a hypothesis for how to do that. Like maybe some like really big magnets or something. But I don't even know. I'd have to massive magnets up there. So I don't know. The Russians detonated nuke and I could see them doing it where like they just keep falling behind. They see Starlink helping Ukraine. They see that like, you know, the United States is like winning this like, you know, new space race, you know, sort of 3.0 and like, you know, us in China are leaving them in the dust and Putin and is like dying, you know, breath is just like, screw it, nuke space. Because it's like you're not killing anybody, but you're just tanking all the commercial space economies that mean like it.
Yeah, it feels like most of the opportunities in space should be pursued by private companies that said stuff like thermonuclear radiation cleanup in low Earth orbit and like asteroid deflection are probably better suited for NASA and, or sort of NASA private partnerships. Just because Varda, yeah, you'd be a good candidate to potentially, you know, save us from an asteroid. But it's not a good business model where you're like, okay, we have to like develop technology, maintain it, like carry this team. But then maybe you never have to use it across 30 years. It's not going to be necessarily a huge profit center.
Yeah, I mean, I don't think we're so religiously libertarian at Founders Fund that we believe the government has no use whatsoever. So you know, there is the extra occasional need for Something that is, you know, of the public good. And asteroid deflection and thermonuclear cleaning is probably, you know, sit up there with that. But, yeah, I mean, hopefully diplomacy is more effective than having to do the cleanup, you know, sort of part of it.
Yeah. Makes sense.
Well, this is awesome. I think we got to wrap up, but thanks for coming.
Closing it out. Thanks for coming out.
Oh, yeah. Thanks so much for having me, boys. And congratulations on a phenomenal launch day. Look forward to success of TV calendar.
We expect a cameo on the next video. It's already in the works. True.
Well, he cameo.
You cameoed in this video. Iconic.
Oh, yeah. Oh, yeah. I mean, look, everybody needs an island vacation, but, you know, Reid Hoffman really needs one.
You had a face cameo because we used a clip from your call in. I wasn't talking about the tweet. You had two cameos. I guess, technically, yeah.
Oh, I had two cameos.
You had two cameos because at 37 seconds, 38 seconds, you pop up for a second as an example of one of the guests that we've had had double cameo.
Well, I like my first cameo better than.
Your first cameo is good, but, yeah, a little bit of an Easter egg.
Fantastic having you on.
Goodbye, boys.
I'll see you soon.
We'll talk to you soon. That was great. We.
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