Karri Saarinen, Sean Frank, Semil Shah, Dan Lorenc, Google's Earnings Power Holding Up Well, Intel Says Layoffs are in Store, The Relationship Between Netflix and The NFL, Elon's Friends Sell Access to Stakes in Private Companies

You're watching TVPN. Today is Friday, April 25, 2025. We are live from the temple of.

Technology, the fortress of finance, the capital of capital.

Oh, I was in a particularly brutal board meeting with a venture capitalist. Got ugly. We've talked about how board meetings should be more confrontational. There should be a threat of physical violence.

That's right. It brings out the best in people.

It really does. It really does. Oh, you want me to pull forward my revenue projections? Are you willing to die for that? Let's duke it out.

Let's go to the test.

Let's go to a foreign country that allows duels, and let's duel to the death. This is the future of technology. Technology for the week.

Big opportunity for praxis is enabling duels.

Yes, yes, yes.

Many people would like to duel, I completely agree. But they don't have the legal framework to really do it here in America.

There are. I have looked this up before. There are countries where you can go and duel to the death legally. It's a little complicated. You got to fly out there. You have to get some permits, but you can do it. It does exist and maybe we should bring it back. You never know. It would certainly make tech more interesting. It would make our job reporting on tech more interesting. But nothing's more interesting than earning season, baby. Can I get a sound effect for earning season? Google's earnings power holds up in global turbulence. Google Alphabet reports solid earnings, but tariff impact on second quarter results is still unclear. From the Wall Street Journal. Google's earnings power held is holding up well. They're making money. They're printing. They reported operating income of 30.6 billion for the first quarter on Thursday, solidly beating Wall street. Forecasts of 28.7 billion. Revenue rose across the company's business units, but was largely in line with analyst estimates. Capital expenditures reach a record similar 17.2 billion in the quarter. Let's hear for Capex. We're going to be training bigger models.

Manager mode.

Manager mode for sure.

Sundar might be goaded.

He might be goaded.

He might be back.

He doesn't do a lot. Do a lot of media. He's starting to go directly a little bit more. Yeah.

People were saying, if he resigns, does the stock pop? He did it while staying in place and he deserves all the. All the credit for it.

He does so congratulations to everyone at Google, all the shareholders, all the employees, the founders.

And this was breaking news. Yesterday we announced that we are joining the war against big tech on the side of big Tech.

Yes. We are joining the war on big tech on the side of big tech.

And yeah, it must be protected.

Big tech must be protected.

Just because we want to turn little technology companies into big tech. Yes, we still support big tech.

Yes, yes, a reverence for big tech.

Be very clear about that.

So the stronger bottom line show Google's resilience in a quarter that was marked by fears of an impending trade war and the effect that could have on the global economy. Alphabet share price rose 5% in after hours trading. Again, this is like a trillion dollar kill. That's $50 billion. That'll get you 100 of Sergey Brin's yachts which cost 500 million. So he could buy 100 of those if he owned all of, all of Alphabet. And Alphabet should, they should get 500 corporate yachts. And if in, in my opinion, 500 foot yachts. But those worries, one for every VP. Yeah.

If their VPs are anywhere as good as Ben, they all deserve half a billion dollar yachts.

Yeah. Everyone talks about the perks of working at Google. You get the sleep pods, you get the nap room, you get the free lunches. Like let's take it up a notch the all that stuff.

Avoiding the only perk that matters, which is yachting.

Yachting. Yes. Really? I mean it's so played out. They've hit what feels like the logical conclusion of perks. Right?

Yeah.

Oh yeah. Free lunch. Oh, we'll walk your dog for you. Oh, there's yoga classes.

Oh, there's a. I told you I spent a summer. Just.

What about the Google yacht?

Google cafeteria.

Yeah.

One of my fraternity brothers worked at Google for a summer and he spent the entire summer trading crypto.

Fantastic.

When he would take a break while working for Google, to be clear. And oftentimes around dinner he'd say, hey, do you want to come have lunch? And I enjoyed every, I've had lunch there too. Every salmon dinner that I had on Google's dime.

You know, people were upset about the Google bus that took Google employees from San Francisco down to the Google headquarters in Silicon Valley. Should have just cut out the whole system with the Google yacht that takes you from. Because it could take you down the bay.

That's right.

The Google yacht would be so much better. And the whole thing where they were vandalizing the Google buses, but it's so much harder.

Maybe they could have hit some of their climate goals by using a sailboat.

I love this. Yeah. 500 foot sailboat just sailing to work. There are some people that actually sail across the bay, if they live in Marin, which is pretty sweet, they ride their bike and then take the boat. And it's not. Yeah, you know, it's very. Anyway, people are still worried. People don't think Sundar can do it. Google doesn't issue financial projections with its quarterly reports, which leaves it unclear how, just how, just how its business was affected by President Trump's April 2 announcement of high tariffs. But the turbulence that has followed amid the ever changing status of those tariffs and the company's earnings. On chief business officer Google's chief business officer said it's too early to comment on trends for the current quarter. Now, Google doesn't manufacture a lot of stuff generally. Of course they have consumer products. They have Google home devices. Those might be made in China. They have Google Android phones generally.

But merch store too. ANDREW Reed yeah, merch Merch store. The Google has merch and so I'm.

Sure they have operations in China, but they are seem much less exposed to Chinese tariffs than Apple. Right. And so if Apple is hurt and the iPhone does wind up going to $2,000 a phone, $3,000 a phone because of tariffs, well, that will probably drive even more people to buy Android phones, even if the Android phones are more expensive because on a relative basis they would be cheaper. And also the phones seem to have been unaffected. Ben Thompson was talking about Tim Cook and there's the kind of dancing around this issue of Is Tim Cook the right CEO for Apple? He's 64 years old, so he's getting close to reasonable retirement age.

I was going to say close to hitting his prime.

Hitting his prime. I agree and I actually, I think, I disagree with Ben Thompson on this. He was very shaken by the there's something rotten in Cupertino report by his co host of, of what is podcast. Yeah, Daring Fireball. And so there's this big question about the big miss on, on Apple intelligence. Should that be serious cause for concern that if Apple's not getting AI correct. Do you need new leadership if AI is the most important thing in the world. But I think we learned from the tariff situation that in fact supply chain is maybe the most important thing in the world. And Tim Cook is world class at supply chain and so it makes sense that he is at the helm. And I think any discussion of Tim Cook stepping out of Apple is too, is too, too premature. I think maybe getting new product leaders to in some ways Apple intelligence more aggressively makes sense.

Supply chain expert Yep. At a point in time where we're dealing with, you know, you Know, really complex, you know, tariff policy and uncertainty. He's the perfect guy.

Yep.

To be in at the helm right now. Maybe not the perfect guy for five years from now, but we can just.

You know, which would, which would affect more, which would affect Apple worse if they truly lose the AI agent Siri, you know, AI assistant landscape to the point where they need to open it up and they need to say, you can map your Siri button to any, any app and we're actually auctioning it off. And Google's going to bid just like they did for the default search in Safari and OpenAI is going to bid. They'd probably make a ton of money from that. Maybe not capture all of it, but they'd capture a lot of value from that and that might be a loss strategically for them that they wouldn't own consumer AI in the future. Obviously consumer AI is something that you want to own, but. So if they lost that, it wouldn't be good. But compare that to getting the tariff issue wrong, getting the supply chain wrong, not being able to deliver the product, delivering the product at three times the price. That is actually catastrophic versus, hey, there's this massively incremental technology and we have to partner with other big tech companies on it like we did in search. I don't think it's that big of a deal. And so I'm pro Tim Cook in this case, at least for now. We'll see. But it's fun to watch it unfold. So Alphabet's operating income per quarter, just a hair off of peak, of course. The Q4 season I believe, is always strong, but they are rocketing towards over $30 billion in operating income every single quarter. You love to see it. Their Advertising revenue rose 8% to 66 billion, while cloud revenue jumped 28% year over year to 12.3 billion. Let's hear it for them. Congratulations, everyone at Google. Both were declarations from the decelerations from the growth rates seen in the fourth quarter. But Google isn't blinking in its plans to invest in aggressively in generative AI. The company maintained its plan to put $75 billion towards CapEx this year, more than double its annual average over the past five years. Of course there's an acceleration there. The business has grown a lot and they are risk on correct A plus work on the soundboard today.

Jordy, the natural, the natural evolution of this is that I have a soundboard with, with thousands of effects and I just don't say any.

You don't say anything, you just, you just move from from front office to.

Back office, I'm just wearing an Apple Vision Pro.

Yes, like hitting the reactions. So the the Google didn't exactly face a high bar coming into Thursday results. Alphabet stock has been flat over the past 12 months, lagging most of its mega cap tech peers on worries about its position in AI of two federal antitrust cases that could ultimately result in the company's breakup. Of course everyone was saying OpenAI is the disruptor to Google search. Maybe Perplexity is going to take a run at Google, but people are still googling stuff. They're googling stuff and then they're doing deep research reports separately and, and maybe that's chipping away, but it doesn't seem to be chipping away at earnings. Google seems to be lindy in this case. So Alphabet also commands the lowest valuation multiple of the multiple of the major tech giants, with the stock trading at just 18 times projected earnings for the next four quarters, compared to Microsoft at 28 times. The company said Thursday that it would boost its quarterly dividend to 5% to 5% to 21 cents a share, which comes a year after it initiated the payout. This of course, was the famous criticism that Peter Thiel levied at Eric Schmidt on stage at that Fortune conference years ago. Do you know this?

I had another thought jump into my head that's hit me with the other thought, which is Netflix trading at a PE ratio of around 50:50. How frustrated you have to be as Google management when you look at Netflix and you're like intense competition from a bunch of different players.

Totally.

Obviously they basically own the entire market where they have everybody signed up and the strategy now is just to just increase prices and, and reduce costs or keep costs as is. But ultimately when you look at the sort of underlying quality of these businesses, it just really says that the markets firmly believes that Google is at extreme risk of disruption of the core business model. But when we talk to people like Logan, which who we had on the show Monday, who runs Google's AI studio, it's hard not to be generally bullish on what Google is doing in AI.

Yeah, no, I agree. It's interesting, the Netflix comparison because by all accounts you would have to assume that YouTube is just a better business. It is the final form of, you know, all the best content goes there. The algorithm sorts it all out, sifts the wheat from the chaff, the really low effort. Videos get a couple views, they make a couple dollars.

But.

But the Mr. Beast videos get 100 million, 500 million views and generate Millions of dollars in ad revenue and it's all decentralized. It doesn't have any oversight. So there's no overhead there. There's no negotiation. Oh, we lost this particular video. The videos go up like clockwork and.

They have a subscription plus ad based business model.

They do.

It's the same as the other thing that I think is worth noting on, on Google is yes, chat GPT is a threat. Yes, there are people that are, you know, chatting with chat GPT as an alternative to, you know, punching something into the Google search bar. But I look at it much more in the context of, you know, TikTok and Instagram. Yes, TikTok, you know, has taken away sort of usage from Instagram and other meta products but it certainly didn't kill either of them and they've still been able to find growth there. So.

Well, speaking of Google's ad business, they're making tons of money running ads. We're making money running ads. And you can make money running ads on ad quick out of home advertising made easy and measurable. Go to adquick.com let's kick it over to Intel. Intel cuts outlook says layoffs are in store. You hate to say company posted a quarterly loss on Thursday. They are the old guard. I think intel and Google both raised money from Kleiner Perkins. I'm pretty sure maybe Sequoia is in both those but similar venture capitalists, very different stages of life as big tech companies. The company posted quarterly loss on Thursday and gave a weak revenue outlook, said it would lower its operating expense target this year by $500 million and would reduce it by a further 1 billion next year. This is on the tale of new Chief Executive Officer Lip Bhutan beginning a turnaround effort. And we are excited to see what he does and how many pages he takes out of Stratecheri printouts because Ben Thompson has been playing armchair quarterback for the last decade and maybe it's time for intel to implement some of the Ben Thompson playbook.

Not a bad idea at this point.

Tan said to a letter in a, in a letter to employees that layoffs would start this quarter and continue over several months, although he didn't quantify how many employees would be affected. That's pretty rough.

That's brutal for the team.

Some people are, yeah, we're going to.

Be doing layoffs over a few months.

I mean, I guess it's like no surprises and hey, this is going to happen and maybe you telegraph it early. They're also reducing capital spending by 2 billion down to 18 billion. In total capex they're getting into for this entire year. I mean now they're spending less on Capex than Google is spending per quarter. They spend less than a year than Google spends in a quarter. And it's like their whole business should be capex in my opinion since they should be a fab mostly. But of course they also invest in design of semiconductors as well. And so there's been a slowdown in a gigantic manufacturing expansion undertaken by Tan's predecessor. Pat Gelsinger, finance chief, said tariffs were affecting the company in two ways. Customers rushed to buy electronics in anticipation of the tariffs, contributing to higher than expected revenue for the quarter. But looking ahead, he said costs would increase and the market would contract as consumers and businesses face an uncertain economy. And intel stock dropped by about 7% in after hours trading. The revenue was flat.

We are so far from the rumors last year that Elon was in the mix. I know by intel that global foundries such a great timeline to be on.

I still think it would have been so cool if, if the CHIPS act was basically just, you know, structured as a, as a, you know, debt financing for an LBO and takeover take private of, of intel with, with Elon at the helm. I think that could have been a really, really great ending. And it would be so much less. It would be very, it'd be very easy for people to rally around America from an American perspective because it's, it's, it's so much less controversial than oh, what's going on on X, it's the public square. Is, is it right wing like this culture war effort is, is it? Regardless of where you stand on the issue, it's clearly causing friction between Americans. Whereas if you get Elon and he's just off making semiconductors and the semiconductors are getting cheaper, it's like who is this? A left wing or right wing? We don't even know. It's like, yeah, he's cutting some jobs there, probably making it run more efficiently, but ultimately the goal is cheaper semiconductors. I think that's something everyone can get behind.

But he made cheap cars. Yeah, and, and then those got.

Yeah, so yeah, maybe anything's possible. Who knows. Anyway, sales rose 8% in the division that sells chips for data centers and AI, obviously a rare bright spot. Amid the gloom. Sales in its personal computer chip division, its largest segment, fell 8% to 7.6 billion. Its contract chip making business reported 4.7 billion of revenue, up 7%. Intel also gave a forecast of roughly 11.8 billion in revenue. For its current quarter, lower than Wall Street's forecasts of around 12 billion. And so a lot of uncertainty. They are signaling to the market. Hey, we're going through a transformation. We're going to be cutting costs. Revenue might dip, but hopefully we will emerge stronger. And we're rooting for you over at Intel. We would love to see intel become a fantastic tech company as it has been throughout history.

It might need a new name. The American supercomputer Super Corp. Super Corp.

I like that.

I think it really needs to, you know, the modern branding of, you know, some of our new hard tech companies.

Well, we'll see what Lip Bhutan winds up doing. Maybe he'll need to take out some ads to make the company. I wonder if, again, if he does a rebrand, he's gonna have to buy a bunch of ads and we gotta do an ad. What's our next ad for Bezel? Oh, fantastic. We've done some risk checks on various and various semiconductor CEOs. We've seen Lisa Su over at AMD rocking a Rolex.

She's a collector.

She's a collector, to say the least. Lipp Bhutan, I know you're. I know you're listening. Get on Bezel, pick up a watch, go to getbezel.com. they got a bezel concierge for you, Lip.

If Lip is not at Hill and Valley. Yeah, that is bearish.

Yeah. He should get out there to dc.

Hopefully he's there. We'll talk to him.

He should be wearing an FP Journe.

Yeah.

Or Richard Mille.

That's right.

A one of one.

One of one.

Piece unique. Ideally piece unique with the semiconductor right in there. That's what I want to say.

That's right.

Anyway, nobody did a Blackwell watch.

I know it's like, I don't need the time. My phone tells the time. But I just want you to know that I have a, you know, I have a black well on my wrist.

On my wrist. That's really good. I mean, did you see the. The Nvidia purse? That was pretty cool.

That was cool.

That was great. And so someone took a Nvidia GPU and turned it into a purse that you can purchase for the. For the technology sister. For technology girlfriend or wife. Great gift. Absolutely. Anyway, we're moving on to probably an even more important story in the tech world. Yeah. This is big story about a man who built a house with room for 21 of his Porsches.

Yep.

He actually had one house.

Tell you how many people are in this.

Yeah. Are in this scenario, this is great.

Well, sent us his article and said one, you have to cover this.

Yes, yes, yes. And the show wouldn't be complete without it.

That's right. It wouldn't be a Friday show without something like this.

Exactly, exactly.

Here we are.

So he wanted room for 21 of his Porsches, so he built a second house across the street, as one does near Palm Springs, California, architect Steven Harris spent millions designing a modern house equipped with an underground garage of his sports cars. He's a highly successful architect of houses and apartments and his husband, Lucien Rees Roberts, a prodigious interior designer, which we'll get into later. The interior, the interior design game is fascinating. There's trade deals happening all over the place. Deals, big deals. They spend most weeknights and the lifestyle of these two bros is top notch. So they spend most weeknights in an elegantly appointed loft in the Manhattan in Manhattan's Tribeca neighborhood. For weekends they have a house called Galloway Hill. Always a good sign when your house has a name. You should always be naming your house that's in Kinderhook, N.Y. for vacations. There's a compound on an island in Croatia and a restored mid century modern house in Rancho Mirage, California, eight miles southeast of Palm Springs. So they got, they got, you know, their fingers in every single pie.

Croatia is very underrated. Have you been?

I haven't been. I've been to Greece. I feel like Croatia's kind of like knock off Greece. Is that the case? I don't know.

Our two Croatian size lords are gonna fume, giving you death threats.

I don't know. I don't really leave the United States. I don't go to any of these, like, backwater developing nations, regardless of how scenic and luxurious they are. But good luck to them. I'm glad they built a compound on an island out there. For years they were happy with those options, especially, Harris says, because Rancho Mirage and their part of Croatia have perfectly reciprocal climates. That's pretty smart. Meaning that if it's the wrong time to visit, if it's the wrong time of year to visit one, it's the right time at the other, which is really smart. But there was more real estate to come. In 2016, a one acre lot directly across the street from the Rancho Mirage house came up for sale. They purchased it for 800k with no plan, Harris says, other than to prevent someone else from building something hideous. I love it. It's like, how bad could it have been? Like, it's probably just going to be A normal house. But they're like, no, that could be a real issue. Beautiful.

They're really design driven. Yeah. I mean, necessarily control your neighbors.

They're architects. And so they're like, we're not going to let you build some McMansion up there. We're not going to put the fake, fake blinds on the outside. So they found themselves wanting to spend more time in California, where their neighbors include theater folks like John Robin Bates and Joe Montello and television personalities Kelly Ripa and Mark Consuelos. And they had solved one of the logistical problems of being bi coastal. And this is the art of the deal, folks. If you're not doing deals like this, you are going to be left behind in the modern economy. This is golden retriever maxing.

Literally.

Taken literally. So you want to break it down, Jordy.

These two guys designed a client's private jet for free. Many of our listeners know and have gone through the process. You know, when you buy a Gulfstream, you're not going to sort of necessarily take this sort of stock interior. So they designed a client jet for free in exchange for a promise to fly their yellow Labrador retriever, Zoe, between New York and California for the rest of her life. And one of the two guys always travel with her.

And so this is why in the modern economy, you don't just want to be golden retriever, maxing, you actually want to be a Labrador retriever.

You need to be working out deals that allow your dog to fly private, fly private, whenever they want, whatever they want their life in exchange for a one time.

One time service that really has no cost. Because. Yeah, it's. You're just designing it.

Yeah.

So you're just like picking things, really.

Just your time.

It's just your time. So you swap.

This is potentially one of the greatest investment.

It's one of the greatest service of all time.

Based investment.

Yes. We were talking about this. So with companies like Loyal Celine, who we've talked about on the show, Loyal is working on life extension for dogs. And so, you know, how do you underwrite the price of private flights for a Labrador retriever for the rest of their life? Well, you probably pull out an actuarial table like you're doing life insurance. Right. You say Labrador retriever. How old is Zoe? You know, five years old, probably lives to 10, 15. But with modern advances in science and artificial intelligence, dogs could be living hundreds of years, Thousands of years.

Yeah. And so this could add up billions.

Of dollars of value. This would be the greatest interior design project ever of all Time of all time.

100 from a value cap, from a.

Value capture standpoint, it's genius. But it's also going to be incredibly inconvenient for whoever's private jet that is because imagine that the dog wants to get from New York to California on Tuesday. You're trying to take a meeting in D.C. now you take off from LaGuardia and you're heading to, you're heading to LAX just to get to Reagan International.

The dog basically runs your life.

The dog runs your life.

I don't know who agreed to this. It's absolutely insane. Yeah, they basically said this interior design service that I'm a billionaire and I could just pay for is so priceless to me that I'm gonna offer up my jet to the end of my days. I would expect the dog at this point to outlive the client himself. So anyways, going back to the house situation.

Yes. Yes. Because the cars are equally important. There's 21 of these vintage Porsches they bought. The, the house they had bought is historically important so they couldn't modify it. And there are the pictures of the Porsches. And I love this because. So this garage is specifically designed 21 Porsches in the collection. You don't have to move a single car to select any of them. None of them are double parked. And so if you want to take the 1980s air cooled 911 out, you just grab those keys, you're good to go.

Good to go.

If you want to take the GT3Rs in your path, you take those keys, you're good to go. You don't have to shuffle them around. You don't need a personal valet shuffling. You're all good to go. There's no stacking. There's a lot of people who is garage. Have you ever seen Hoovy on YouTube? He has his garage stack three high. Basically. He's clearly not doing it right. He should have just built a 21 car garage where you can pull out any of them at any time. And so the new house would have two things. The old house didn't have a studio complete with skylight. A third generation. Rees Roberts is a third generation painter and he would be painting in the studio with a skylight and an underground garage where Harris, a serious collector of vintage Porsches, could store 21 of his favorites, all 911 RS models made by the company from 1973 to 2024. Wow. So it's a, it's, it's the 911. I guess it's the 911 RS every single year. So wow.

Unreal.

Incredible. And such dedication. I mean, Steve Jobs had the same dedication where he would buy a new 911 every single year.

Right.

And there's. But, I mean, I guess you would, like, rotate that.

I was in the Middle east once and got to see a private collection. And the collector had basically around 10 full scale warehouses on his property. And he would not just get, you know, a Range Rover every year. He would get every color that they made it from the manufacturer in that year. So it was literally like a rainbow collection where you'd walk into one of the warehouses and it's just every single color of car in that year. And then you would do it for the next year. You do it for Range Rover, you do it for Land Rover, you do it for Ferrari.

Yeah.

So that's true wealth because the depreciation on a Range Rover is insane. Unlike some of these Porsches.

Some of them. Some of them.

Some of them. Some of them do pop, but. So in the new house, he can slip away to a studio when he wants. And Harris is able to keep more of his 50 prized vehicles in California, where he likes to take them out for early morning jaunts. He said he drives every one of his Porsches. We'd love to see a car collector committed. Puts miles on the cars. It doesn't just keep them in the plastic. You got to be daily ing your countach. Your LMO to it is a funny daily. Your supercars.

If you have 50 cars in your collection, it's actually hard to put a meaningful amount of miles.

Oh, totally.

Spreading the love, of course.

And I mean, it's not like taking them to la. He's probably just driving them around the neighborhood.

Time mechanic. Like having a collection once you get into that range and above.

Yep. Jay Leno has like a whole team just for registration. Because there's new registration, like every year. Well, you have 50 cars that every single week you're doing registration stuff. It's crazy. So even just one of his Porsches, the 1984911 SCRs, he's been offered more than $3 million for. He said no. He said, I'm dating it. Yep. So they have no plans to live in the Palm Springs area until they helped a couple. They had no plans to live there until a couple of friends. Until they helped a couple of friends locate and renovate a house at a country club. And then in 2015, they heard about a house for sale and decided to buy it after a Meyer. After admiring its mid century modern forms on Google Earth. They later learned it was designed by the prominent Palm Springs architect Donald Wexler. When they renovated the 1957 house, they returned it as closely as possible to the original appearance. A reverence for the classics. This guy seems like the man. The new house across the street is more than just luxury for the two men. It. It embodies everything Harris has learned in more than 40 years of designing gracious modern residences. Everything Rees Roberts has learned from furnishing them, almost always with a mix of important vintage pieces and items of his own design. The two men work together on about three quarters of their projects. Each also accepts separate commissions. I love that. It's like we'll work together, but you're paying us both. It's not a package deal. And also, our dog's gonna fly private forever. It's the best. I love the Journal for profiling these people. You just, you know, where else would you find this story? From the outside, the house is deliberately unimposing. There's no fence. The pool doesn't require one because the whole country club is fenced, Harris explains. Reese Roberts and his landscape design partner David Kelly added topography to the previously flat site to match that of the golf course. They even gave the pool the shape of one of the courses nearby. Water hazards. The result is that the adjoining fairway seems to continue right to their front door. The club thinks of it more as a golf course, and we think we have more lawn. Interesting. More golf. The club thinks of it as more golf course. We think of it as we have more lawn.

Just don't do a long, you know, sort of phone call pacing around the yard.

You get smacked in the head. I like this. He calls it visual borrowing. And so when you blend your backyard into the golf course, it just feels like your backyard extends endlessly. Very, very cool. Inside, the house is light filled, thanks to the oversized windows. To complete the landscaping, they splurged on over 100 palm, olive and fruit trees at the cost of more than 300k. You love to see it. 72 years old and he designed a lot of the furniture himself. Fantastic.

Cool little backstory here, Harris says, I don't think of myself as rich. During his childhood in northeastern Florida, he says it was hard for his parents to scrape together his high school tuition of 700. Some nights were spent flounder gigging, a method of fishing that involves wading in knee deep water with a car battery in a washtub. This is amazing.

And you're building a ChatGPT wrapper and you think you're scrappy.

This guy is different level from flounder gigging to every single Porsche 911. I got to repeat this. A method of fishing that involves waiting in knee deep water with a car battery in a washtub attached to a tractor headlight on a pole.

Can we get the founder mode sounder mode? That's so good. So we went to architecture school at Princeton on a full scholarship. And then 34 years he lived in a rent stabilized loft on Harrison street in Tribeca where the rent never went above $300. That's so insane to be pulling in like millions of dollars collecting like oh yes, every single new Porsche 911Rs I buy and my rent is $300.

300 bucks. 300 bucks.

The landlord eventually asked him to leave, but also hired him to convert the building into condos. Among other things, he created a brand new pen that sold for over 18 million. Wow. Reese Roberts grew up in England and spent summers in the Spanish artist colony where he was fascinated by the work of Peter Harndon, an American architect who is modernizing old fishermen cottages for expats. He had undergraduate and graduate degrees from University of Cambridge. The two men working together in 1985. They married in 2013. Together Stephen Harris architects and Reese Roberts and partners have about 40 employees. What a small organization to create such a fantastic outcome. That's how many can fit in their Manhattan office buildings on Chamber street, which is right across from the street. Right across the street from their loft. So the men don't plan on letting their firms get any bigger while pouring millions into the new Rancho Mirage house. Harris says, my biggest fear is that we would like the old house better. But according to both men, that hasn't happened. The new house owes a lot to the old one, but it works much better for us. You'll love to see it.

Fantastic.

And you know, in that house, what type of bed should they be sleeping on? I think they should be sleeping on eight sleep nights that fuel your best days. Every eight sleep guarantees an overnight success. They have an overnight success guarantee. So go to 8sleep.com clinically backed sleep fitness.

John, you don't even want to look at your sleep sleep.

Oh, have you seen the new app by the way they shipped it? The new. The. The new eight sleep app is actually incredible. You should download it. If you have an eighth sleep. Make sure you're updated. I think it's a way better design. I got a 91 last night. Not bad.

I got a 96 96. And we were just texting with Brian Arm. Brian Johnson.

Brian Johnson.

He's coming on the show in a little bit and I sent him my sleep score from yesterday and he said, great job.

So do you Brian Johnson. Is that the Liver King?

No, that's the other.

That's the other Brian Johnson.

There's two Brian Johnson.

Yes. Oh, that's right. That's right. Well, we should have the both on. I would love to have the. I would love to have.

Yeah, you would. You would love to have the Liver King on. But telling. Having Brian Johnson.

When you posted that, I was like, this is the most dangerous post you've ever shared. Because he is normally so critical. And I was like, he's going to roast you for not being at 100. I mean, I hit it for work. Was.

It was 100.

Oh, it was 100. But I had a feeling like a normal thing for me.

Yeah, that's like. That's not like I thought.

I thought he would dig into one of the sub metrics and be like, secretly, you're gonna die tomorrow unless you change everything. Because he's normally just like, so on top of it.

He can just rip us to shreds. But it'll be entertainment.

Good. Yeah. Anyway, let's move on to another story in the mansion section of the wall.

This is John's favorite section, by the way.

This is the highlight of my week. Gene Simmons of KISS lists his Beverly hills house for $13.995 million. He's giving it away, but this is why it's funny. So he says he. He listed the house, but he's not gonna sell to just anyone. He said, you have such wonderful times there. You don't want some schmuck in the place you call home after you sell it.

This is his quote. No drugs, no alcoholics. I don't want anybody coming in here who's going to destroy the place. Yes, I love he's selling it, but he's not letting go of control.

Yes, yes, yes. And I think. I think we should enforce the exact same rule. If you're an alcoholic, if you're on drugs, do not listen to TVPN unsubscribe.

That's a little bit hard. If you are any of those things.

As I chug Celsius, get help.

And you're still welcome to listen to the show while you get on the right path.

Yes, yes, yes. We're rooting for you. But don't try and bid on Gene Simmons house because he wants you to clean it up before you spend $14 million. It is hilarious because it could be.

An awesome arc if you.

Who is in who is who? How can you have $14 million to buy a house and also be a schmuck? Like it's very weird. You'd have to be a very, very high functioning.

I gotta push back there. There's a lot of high drug abusers in the world, I suppose.

I suppose.

I hate to break your golden retriever mindset.

It's been said I have the mind of a golden retriever and maybe I got this one wrong. Anyway, the house is beautiful. Four bedrooms, roughly 7,740 square foot home sits on a hill with views of Coldwater Canyon, Century City and the Pacific Ocean. And so if you're in the market and you're going to join us in Los Angeles, we are super bullish on Los Angeles work. We think it's the future of media. Think it's potentially, if things go right, the Silicon Valley home of entertainment could be the home of entertainment. If when we're done this. Check it out.

Fantastic. Simmons says I'm the most blessed human being on the planet. These hard times, you don't want to say I have too many houses, but we have too many properties, said Simmons.

They have a house in Whistler, Canada, two homes in Malibu, two houses for their children and they will be spending more time at their additional properties visiting quote, whatever wifey wants. Certainly, certainly. Happy wife, happy life. Gene Simmons just sending it. Talking to a Wall street quotes to the Journal. Just yapping me an outdoorsy. Amenities include an art gallery space where he hangs his own artwork and a soundproofed home theater where Simmons said he screens movies for his production company, Simmons Hamilton Productions, which released the movie deep water in 2022. The home is outfitted with high end smart home devices. It's like a 22nd century house, said Simmons. He's truly living in the future. I had to go out and buy a simple microwave so that I could press one button and heat things up because the coffee maker, the cappuccino maker, the time machine, all that stuff was built into the wall. Voice activated I might add. It was so complex I couldn't make it work. He was like, yeah, just like get the nicest stuff. It was too complicated for us.

What I've been saying about smart homes, we want dumb.

Rip it out.

I would invest in a dumb home startup. Just a bunch of knobs, all physical.

Yeah, yeah. Get teenage engineering in there.

Yeah, I want to be teenage engineering house.

That would be super Cool.

Like an odometer style for sure.

Yep. Outside the half acre lot, it has a solar paneled 40 foot black lined infinity pool and 1800 square feet of patio space. He said he likes sitting outside with his children and significant others. They eat popcorn and hot dogs and play the adult card game, Cards against humanity.

Of course we laugh our heads off.

He said, it's amazing.

I love this. They call, they're describing his career. They say the Kiss co founder. He's the co founder of the Kiss. He's not just like in the band. Also known as the Demon is known for wearing black and white makeup, spitting blood on stage. In addition to his work as a musician, he has a restaurant chain, a record label, reality show and other ventures in the fourth quarter, luxury single family homes.

He really beats the allegations that like, you know, metal enthusiasts are like demonic soon.

Totally. No, no, no. He's like, no alcohol. Yeah, I'm going to go wear some crazy makeup and spit some blood on stage.

Yeah. The Demon.

They call me the demon. But I really just want to play cards against humanity with my kids and.

Eat hot dogs and laugh my freaking head off.

It's amazing. Anyway, last, let's do one more ad and then we'll move on to another ad for a Mississippi home and 14 million. It's selling for $14 million. So let's tell you about Numero. We've called it before, we called it AGI Sales tax. God. Magical sales tax. Intelligence from the heavens. Let's take a moment to say thank you to numerl. Get on Numerl and my company Lucy is officially a numeral customer. I can't recommend it enough. We're dog fooding it here, golden retriever style. So anyway, the $14 million home in Mississippi that you probably have your eyes on, it's being listed by Brett Favre, the legendary quarterback Green Bay Packers.

And if you're looking for acreage, this they got it spot, they have 465 acres.

Yeah.

For only $14 million.

Yeah. And you know there's a lot of, there's a lot of hubbub about new cities, new startups, startup cities across the globe. You don't have to go to the across the globe to build your 500 acre compound. You can just buy this or the.

Cost of a mango seed million.

Yeah, honestly, that's the, that's the strategy. Head to Silicon Valley, head to Sand Hill Road. Hey, we need 20 mil. We're going to build a new city and then buy this and then just go live in it and be like, mission accomplished. We did our job well. We built the new.

Get residents to come in and pay you, you know, $5,000 a month to be part of the city.

Yes, yes.

Citizenship, flat tax.

Oh, so just like throw parties.

No, basically get your arrow, you know, to. So it's not well into the seven figures.

So it's not a complete fraud.

Yeah. And then, and then I imagine you could do a lot of other things.

So Brett Favre is 55 years old now. He's the star quarterback. Played 16 seasons of the Green Bay packers, followed by one with the New York jets and two with the Minnesota Vikings. Wow, 19 seasons.

He was definitely sleeping on an eight sleep.

Oh yeah, for sure.

Early prototype, I would imagine.

He retired in 2010 with one Super bowl ring and he joined the Pro Football hall of fame in 2016 just shortly after retir. Pretty great. He grew up in Mississippi and they used this roughly six 465 acre property called Black Creek Farm. Another named house, we love named houses on this show as a primary residence since the late 1990s. And there's a little bit of interesting history here about how they built this up over the last 20 years. And so the parcel was undeveloped when Favre bought it. Said Callahan. Among the. The first things they built was this was a structure with horse stables. We've been seeing a lot of folks in the technology journalism industry get into building horse stables because of all the generational wealth. And then a lot of post exit founders also now following in the footsteps of the technology journalists, getting into equestrian dressage, et cetera. And so he built a structure with the horse stables on the first level and guest house on the second level. Then yeah, this, I mean this is, this is, this is, this is the playbook. Exactly. He's run, he's run top tier plays for Green Bay. Now he's running top tier plays in the real estate market. And so they lived in the guest house while building the gated main home. That was 20,000 square feet, a very reasonable number that was completed in 2002. And then they built another house, 5,000 square feet for the mother in law. You'll love to see it showing love to the rest of the family.

Do you think this ends up getting a premium? I mean to put this, to put the price, $14 million for the 465 acre estate. That's only 329 Tesla Model Threes, which just feels very low to you know, buy the home of a former hall.

Of fame for the same price. You could also get the. The Demon's House. You can get the Demons. Can we get the Ashton hall sound? The Demon's house is available. But also this.

I mean, these are really.

But also Brett Favre's house is somewhere out there.

Somewhere out there. Somebody's gonna, like, just, you know, basically make a call. All right, I have 14 million to spend on home.

Yeah. Which one are you going with, a.

Demon go to, Ms. Farrell?

Yeah. Brett Favre has a nickname, but Pat McAfee got in a lot of trouble for calling him this. Do you remember this story? He called him the Sticky Finger Bandit because of some legal trouble that Brett Favre got into. But Brett Favre denied any. Any wrongdoing, and the case is ongoing. So we will not be calling Brett Favre the Sticky Finger Bandit. But I love these nicknames. I love that we can say the Demon. I don't know if I want to call Brett Favre the Sticky Finger Bandit, because I don't know anything about the case, and I don't know if he's guilty.

You don't know anything about sports, John?

I don't know anything about sports, honestly.

You thought UFC took took place in. In a circle?

I did. I did. But I've learned a lot more, and I love the United Fisticuff Championship now. I'm a huge fan. I like the punching, I like the kicking. I like everything else that goes on in the hexagon. Anyway, moving on. By the way, the property has two pawns.

Bo Nickel is going to be calling into the show early next week. He's got a big fight on May 3rd.

I can't. I already have my questions ready. I'm going to be like, which one was better, UFC 375 or UFC 524? You know, I've been doing the deep dives. I'm going to get the answer from him. I'm going to have him break down the greatest moments of the last thousand ufcs and tell us how it all works. So this house has two ponds, one spanning roughly 3.5 acres and the other spanning 2 acres. Those are pretty big ponds. Favre enjoys recreational hunting on the property. That's pretty cool. Has a array of wildlife, including white tailed deer, wild turkey, and dove.

It's so easy to tell when you get so into a story that you're like, okay, actually, we need to go back.

Yeah, we got. You can't just leave us and not.

Talk about the pond.

Anyway, speaking of farve, let's do an ad and then we'll tell you more about the NFL. We'll bring it back to Netflix. So Polymarket get on polymarket. We're going to be doing a Polymarket deep dive later in the show. Stay tuned for that. That we're reviewing the top eight poly market markets that we are tracking in technology. Anyway, the information has a deep dive.

The big of the information I think of sports.

Sports.

And so that's why we're going to be talking about this article today. Yeah, I'm very excited.

Yeah, People, people often call the information like the, it's like the tech crunch of sports. Right?

Yeah.

The NFL loves Netflix. But does Netflix want to love the NFL?

The assumption has been streamers will need sports as much as the leagues need the streamers. The reality is more complicated. We talked about F1US trying to sell the US television rights to Netflix. Netflix kind of balking at the price and saying not interested. Who knows, a deal could still happen. But it seems like there's a mismatch between the league expectation from a, you know, pricing standpoint and what the streaming platforms are willing to pay. Given again that they're sort of at like peak set market saturation. There's you know, babies are being born that will someday sign up for Netflix.

Yeah, yeah, we cover this on Netflix earnings. Yeah, like Netflix has great penetration and sports are important but sports historically have been the thing that keeps people from cutting the cord. And if you just, just included in Netflix, it's not that additive. And so there's a big question of what is the true value of live sports for Netflix. Now Hulu went really big into live sports. They have a whole campaign around that of course owned by Disney now, but Disney also owns espn so there's a whole flywheel there. So there was a gathering in at the Breakers Hotel in Palm Beach, Florida where the NFL was hosting its annual owners meeting. The conclave is a big deal for the league League an occasion for it to hatch, hash out its multi billion dollar business deals and discuss what the future may hold. The latest gathering, which lasted over four days, had a notable first time guest. Ted Sarandos, the co CEO of Netflix. Is there an absolute dog?

Is there another tech company anywhere near the size of Netflix that has CO CEOs?

It's very rare, Very, very, very rare.

Public. But they're private.

Yeah, exactly. But I would put them in the same league as Netflix in terms of, of just overall amazing market dominance. Exactly. He came for a panel discussion about sports on streaming video services like Netflix and the league revealed that Netflix would air two Christmas games crew two Christmas Day games in 2025, just as it did in 2024. Everyone knew Netflix would do at least one Christmas game as part of a three year deal that began with a pair of Christmas matches last year. The the first NFL games ever broadcast on Netflix. But the deal requires Netflix to air one game per year. So now they're doing two. So they're going a little bit deeper. The media world saw the decision to have two games as Netflix's acknowledgment that it's interested in nurturing its nascent relationship with the league after decades of resisting live sports. For the league's part, it couldn't be happier. We're now in a world where there are some platforms that are doing one deal, that are doing one deal. You tap into global scale. The NFL's chief media and business business officer said. Netflix is one of them. Amazon is certainly becoming that and YouTube is certainly becoming that. Right now, the league is trying to find a marquee home for an opening week game on September 5th. September 5th in Brazil. And while it might go to a TV network, a streamer like Netflix is probably more likely since those companies have greater interest in international audiences. We talked about this with Netflix adding users internationally and more money to spend and that's. That is a change in the sport world, in the sports world that is upon us. And for us it comes at a good time as we think about global distribution. And so it'll be interesting to follow what happens with all of these different sports leagues and where they end up. I do think that eventually they have to each, each, each sports league has to find a home on a streamer. Just because I don't see young people ever going back and uncutting the cord and getting on cable. Right.

Traditional cable.

And so it will either be the. The Gen Z kids never get into sports really, or the stream or the league's figure.

Well, their testosterone has been cut by.

Yeah, Cali Means is really not mincing words of the younger generation.

Alpha.

He was coming for them.

Not so Alpha as it stands, but yep.

Anyway, is there anything else you want to cover on the NFL and Netflix?

No, I'm interested to see how this plays out. I mean, right now it feels. Feels like a pretty bad fan experience if you're having a kind of like bounce around, you know, but.

And Netflix has a lot of really cool. I mean Netflix has a lot of really cool technology. Did you ever watch what was that called? Balder Dash or something? Balder Snatch or something. They had a choose your own adventure video. It was kind of Black Mirror, I think was directed by the Black Mirror team or something.

You're saying Netflix should allow sort of create AI generated fan fiction of games where you can create a reality where your team wins every time? Is that what you're about to say?

Yeah, exactly, exactly, exactly. No, I mean, on a serious note.

There are just losing and it's like, do you want to see the final five minutes where they win? And then. Yeah, that would save a lot of households.

You know, it would, it would. Oh, like, yeah, Dad's going to be in a bad mood unless. Unless the packers win. Let's just put on the good ending. Yeah, no, I mean, I do think Netflix has embraced technology and obviously a very, you know, unique way. And. And there are interesting things that you can do over a streaming platform that you can't do over the air. And so that's things like letting the user choose the camera angle, letting the user choose even subtitles, dubbing these different things. I made a YouTube video a couple years ago about how with the advances in artificial intelligence and wave to lip, which is an AI model that remaps the lips of to a waveform. I think this is what Tyler used to make Delian speak Chinese.

Can we pull that video up?

Yeah. Can we pull up the Del speaking Chinese on tvpn and yeah, drop it in the bangers tab. But I was very bullish on on Netflix. In particular, being able to re dub every single piece of content with matching lip movements because I'd watched a German show about time travel called Dark on Netflix and I was just too golden retriever brained. I couldn't get into it because I didn't want to read the subtitles, but the dubs didn't match up with the lips and so it was very jarring. So there's always this big debate about dubs versus subs. Are you dubbing the words over or are you using subtitles? Let's see. Delian, it's really funny when he gets to like the chat GPT thing too, because he keeps like not.

It doesn't translate those Delian Wohoon Shiwan Peugeot. Let the audience figure out what that means.

Yeah. And so I was really bullish on Netflix, basically doing exactly that. What Tyler was able to do probably in an hour.

I doubt knowing how cracked Tyler is.

It's probably five minutes, honestly. But doing that for every Netflix show. And MrBeast has been doing this with localization of all of his content. Netflix is in a unique position to do that for all of their content and make it even more accessible internationally. That's obviously an incremental, an incremental source of revenue for them. And then there's a whole bunch of other things that you could imagine Netflix offering unique experiences to NFL fans, whether that's, you know, the ability to switch between different games very quickly. Like, have you ever watched NFL Red Zone? This? There was like a specific channel that would switch from one game to it. It's all the channels. So it switch from any game that has an exciting moment, it would just cut over to that. And that's something that they were able to do. It's just a team managing all the streams. But you can imagine members, a whole.

Bunch of different versions of that, members of the community that are huge. NFL fans are going to be like, oh, great. So John's explaining Red Zone.

Yeah.

This is just great.

Anyway, why don't we move on to an ad and then we'll move on to explaining how SPVs work. So before, after the SPVs happen, the companies go public. Oh, I hear the sound of F1. Oh, is that public.com the latest sponsor of Aston Martin? Aston Martin F1 team.

Love to see it.

Go to public.com, go to the website, create an account, transfer some money in, get set up and then start hunting for those Aston Martin cars. They're not easy to find, but if you dig around, you can definitely find them and you can enter to win. And so get on public.com anyway, before companies go public, they are private and they're doing a lot of SPVs. And the wall Street Journal has a little piece about a side hustle for friends of Elon Musk selling access to stakes in his private companies. Lucrative stock deals have allowed SpaceX to avoid public scrutiny even as it has grown into one of the largest companies in the United States. And we might have to put this in the truth zone, but let's break it down because there are some interesting things here. So Antonio Gracias and Elon Musk go way back. The Valor Equity Partners founder and family and his family spend their Christmases with Musk and vacation with him in the Bahamas and Jackson Hole, Wyoming. For for Gracias, it has been a lucrative relationship. He has become a multi billionaire in part by investing in nearly all of Musk's companies over the years, according to of public filings and court documents. Now Gracias and his firm have found another way to cash in on his status in Musk's inner circle by selling wealthy outsiders access to tightly controlled shares in Musk's privately held company. Jordi, do you want to give us a little 101 on how SPV hustling goes down? I've heard it's very much like club promotion. Is that an apt analogy?

Yeah. So the average SPV promoter is similar to a club promoter where they hit you up and they say, hey, coming around later, you want a bottle, you want a table? What's going on now? I think that analogy is accurate for some SPV leads, but not certainly for not all. Not for all. And yeah, I just thought this. The attacks are continuing to rain down on Elon from all over the Internet.

Yes.

And I thought the idea that, you know, the dynamic that's happening here is a very similar dynamic to what happens at pretty much every single private company in which management teams and CEOs prefer to fundraise from people that they have longstanding relationships with, oftentimes personal relationships with. And so nothing about this article should be surprising. I mean, I think that again, over time people have joked about the idea of I'm an investor in SpaceX and you're an investor in sort of like layers. Layers SPVs with high fees and ultimately the SpaceX has performed so well that you're still up massively. Unless you know, you were, unless you were really, really layered.

Totally.

And so I think investors have done fine in this and I think that in general this is just a function of there being much demand for SpaceX shares that these types of fee structures work. The only thing that stood out that was interesting is that Valor was sort of bundling SpaceX and XAI shares in a single vehicle offering basically doing a $1 billion raise. About 25% of that was XAI. So I think that could be more of a function of there just being outsized demand for SpaceX and less and basically forcing people to say like, you don't really have an option buying both. That's at least the way I read it. Don't have any inside information.

I think there's kind of two points on SPVs that are interesting. One is that at the ultra growth stage, Centicorn level, the fundraises are the same size as large venture capital fundraises. And so you might go raise a $2 billion growth fund and that might be a huge size gong moment and you deploy that over a number of years. It's a 10 year fund and you're expected to have a diverse range of investments across the portfolio. But when you're talking about raising $2 billion, you're talking to LPs that are writing huge checks and those LPs might be fine, making effectively a direct investment into a spv. And they treat it just like a growth fund. And they're just saying, yes, I'm writing a billion dollar check, I'm writing $100 million check, but instead of going into a growth fund, I'm just going into SpaceX with this. And so that makes sense. On the flip side, I think why SPVs get a bad rep sometimes is that they're assigned at the lower level. If you're doing a $1 million SPV into a $10 million raise, there's just a question about like, like wait, there are so many venture capital firms that could just fill out this entire 10 million dollar round. Like, why do we need an SPV? Yeah, it makes sense why you need an SPV for SpaceX if they're raising 10 billion or something that, you know, you don't want to suck up an entire growth fund.

And to be clear, Valor and some of the other firms that do this are providing a service in a way to SpaceX because SpaceX doesn't want to have tons of shareholders of individual shareholders that are going to send say, hey, like, what's the update? How are things going?

It's not just that, it's also legal. So one of the ways SpaceX has been able to maintain its private status is by limiting its investor base. Once there are 2,000 record holders of record, not including employees who own shares through stock compensation packages, a company is legally required to disclose financial information similar to a public company. And so there was always a fear that if you raised money from a VC and then they, you ran your company for 10 years, they distribute the shares out and they have more than 2,000 LPs. I think this number might have been lower earlier too. But if they distribute LPs and you wind up with 2,000 holders of record because you've done so many different raises and so many different party rounds that you wind up with 2,000 holders of record, you could be running a small company that now has to disclose financial information similar to a public company. That could be very problematic. And so SPVs have always been a way to kind of of tie a bow around a group of holders and then layer these structures. And I think that it's overall fine and doesn't seem like a big deal, but obviously it's of interest and newsworthy because SpaceX is an interesting company. Elon Musk is An interesting founder and often doesn't get exposed.

Yeah. What the Journal doesn't mention is that even if these investors were just investing directly, SpaceX can't do general solicitation as a private company.

Yep.

And nor, nor. And the other factor is you, you still have to be an accredited investor even to invest in these SPVs. And in fact, I think these SPVs probably have much more firm accreditation checks than other SPVs that might be investing into figure as an example.

Yep. So, yeah, there's some little bit behind the scenes text from the Twitter deal. Venture capitalist David Sachs texted Musk in 2022 after Musk asked if he would invest in Twitter. I'm personally in and will raise an SPV2 if that works for you. And so good, good communication there from the investor saying, hey, I'm open to doing an spv. I would love to do that for you, but only if it's helpful. And then on the flip side of that, Musk accused Twitter investor Jason Calacanis of marketing as SPV to randos during the first Twitter fundraise. SPVs are how everyone is doing these deals now. Calacanis responded. But tensions were flaring at that moment. But it seems like they have resolved. And so these, the sale of these SPVs generates fees, of course, and, and UBS is also getting in on the action because UBS Swiss bank.

Much less of an individual if the article was UBS and Valor Equity offer shares in SpaceX to their client base.

Yeah, it's not even tied to a new mark. Which would be more interesting to hear about. Oh, well, like, you know, there's new revenue numbers or there's new, new on the back of some change in the business. The, the company's worth more. It's more just like, hey there, SpaceX.

Does these a couple times a year.

Yeah, right. Yeah. I mean, Elon's been a master of, of ensuring fair liquidity to early employees. Because we've talked to a lot of the early SpaceX employees and investors and they've been in the company for 20 years now it's 2005 company. And so even if you're totally bought in on SpaceX and you worked there for a decade from 2005 to 2015, you took immense risk. You got comped for that in, in stock. At some point you're going to want to put your kids through college or buy a house. And so having some liquidity makes a ton of, of sense.

Or start a 3D printing company.

Yes, I love that. Let's recycle the capital and let all the SpaceX alumni go build fantastic companies. They're very, very interesting. They also profile Luke Nosek, SpaceX board member who worked with Musk at PayPal before joining Peter Thiel's Founders Fund in 2006. He and Musk remained close, sometimes attending game nights in Austin where they played Werewolf, which pits villagers against monsters. According to a person who knows the them, someone leaked to the Journal that they're playing essentially board games. Very fun. Nosek founded Gigafund in 2017 and has purchased roughly 1 billion in secondary sales of SpaceX shares. Probably a great fund in that case. It's pretty good.

Gigafund best name so far.

Gigafund is a great name. It's a great name. This is interesting. MySpace co founder Berman is getting in on the action. You don't hear about the MySpace mafia very often, but he frequently gets slugs of shares when SpaceX sells them on behalf of employees and earlier investors. His firm Troy Capital invested part of a 47 million dollar fund in secondary sales in SpaceX stock in 2022 when the company was valued at roughly 127 billion. And so that investment is probably doing very well. Fisher Wolfson, an early investor in SpaceX and a friend of Founders Fund founder Peter Peter Thiel, another close associate of Musk, also often gets SpaceX shares for his fund. 137 Ventures management and so fantastic to see the boys ripping some SPVs. You love to see it and you love some capital flowing into important companies that are doing great things in space and beyond.

Love it. Should we talk about some markets?

Yes. Let's go to our poly market analysis for the day and debate some of these. The first one is the largest company at the end of April and Apple seems to be running away with it. It's April 25th. Only five more days if Microsoft wants to catch up. But it was a knockout drag out fight mid month. On April 10th, Microsoft was actually expected to be the number one biggest company.

What did Tim do?

He cooked.

He cooked.

He cooked. And so everyone else is left behind. The options are Apple, Microsoft, Nvidia and Amazon. What would it take for Microsoft, Nvidia or Amazon to flip Apple next month? I think you got to see crazy tariffs on Apple that actually stick and hurt iPhone prices and sales. And you need to see increased AI demand for Nvidia to do it. Something with Amazon. I'm not exactly sure what would. Yeah, what would be the catalyst there? Nvidia is the one that could pop. I feel like if all Of a sudden there's a news of a GPT5. The whole rumor about the pre training scaling wall and GPT 4.5 not being that great. It's like if all of a sudden the game's back on scale is all you need. Bitter lesson comes back in the meme in the meta and all of a sudden it says no, you actually do need to build the $500 billion data center. You need to build a 5 trillion dollar data center and everyone is taking it seriously. Everyone is scale pilled. AGI pilled. You could see Nvidia maybe pop. But this is not financial advice. We're just debating the markets. I don't know. Anyway, the next news, the next market is what will Michael Saylor say during strategy Q1 2025 earnings call? And I like this because they're. It's not just that he'll say Bitcoin is that he will say bitcoin more than 100 times in a single earnings call. They know he's going to say Bitcoin. But will he say Bitcoin 100 times? And there's a 20% chance according to Polymarket that Michael Saylor will say Bitcoin 100 times more. But it's bitcoin, Bitcoin, bitcoin.

He's also got a lot of bitcoin.

Bitcoin, bitcoin, bitcoin, bitcoin, bitcoin, bitcoin. There is a 9% chance that he will say billion 50 times or more. Crypto at 7 plus.

I've actually ever listened to sailor call strategy.

We should oh is it no longer microstrategy strategy?

Drop the micro.

Drop the micro macro strategy.

It's a GIGA strategy.

China is at 50%. Inflation is at 56%. Nvidia is at 34%. Lots of, lots of people getting on the action. Some of these are very low volume Interest rate is just $374.

But like if you go to strategy.com by the way. Yep it's just a bunch of basically. It's basically a big ticker that shows their market cap, their share price, their six month as it should be.

Yeah it is interesting focus on stuck with it in the face of Bitcoin ETFs and wide Bitcoin availability there there was of a lot big discussion for a long time of like how do, how do the public markets get access to Bitcoin? Maybe MicroStrategy is just a wrapper around that it's okay but he's, he's stuck with it. And so it'll be fun to see what happens with the. With his earnings call. The next market is asked by us, actually, TBPN, will ChatGPT reach 1 billion monthly active users in 2025? The volume started small, it's climbing. It's now at $76,000. You can go on Polymarket and, and express your.

Yeah, the numbers have been kind of all over the board. Sometimes they talk about weekly actives. A lot of people like to look at similar web and other data sources for information. But ultimately I think this will be such a significant milestone that they will come out and announce.

I certainly hope so. And I would like to hopefully this market gets, it matures and then hopefully people who interview Sam towards the end of the year will just ask him like, hey, are you over or under a billion MAUs in 2025? Did you hit this, this milestone? And this does seem like a milestone that might.

Yeah. And he said, he said, I think he said recently, recently that somewhere around 10% of the world uses ChatGPT on a monthly basis.

Yep, that's 800 million. Right.

So we're getting close.

We're in hair's breadth and this is.

Just such an impossible number almost.

Yeah. But you add another studio Ghibli moment where it onboards a bunch of people, you, you just add more viral loops of sharing. Maybe they do the social network thing. And we actually do have more OpenAI news that we're tracking here. Will OpenAI acquire windsurf before August? It's at a 52% sitting now, lower.

Than I would have thought.

Yeah.

But again, the headline that was initially reported was not a confirmed deal, that was a publication, kind of like front running something. And this happens before. It's very common for media outlets to basically get word that a deal is in the works and then just announce it. It.

Yep.

And it's not necessarily a dumb done deal. Sometimes a term sheet hasn't even been signed and so it can actually put a lot of.

We saw this with Wiz where, where there was rumors of an acquisition that happened earlier and they denied it and it wound up not happening. And there's been other times when companies have. It feels like they've maybe deliberately leaked news to kick off a fundraising round. There's a bunch of different things that can go on staying in the AI model race. Which company has the best best AI model? By the end of June 30, Google is at 45%. OpenAI is at just 25% and it's a little bit Odd because the reviews of of of GPT03.4.5 have been remarkably good.

Well, this is Google June 30th to be clear, not April 30th.

Yeah, sure. So. So we're two months out and you get a little bit of like a yield curve when you compare these different, different time periods. And so a lot of it's driven by when developer conferences happen, when new releases are expected to happen. So if Google for example, has Google I O in mid June and you know that they're going to drop something then, well, it might be a new model. Well, they might just blow out the benchmarks.

Meta is sitting at 2% right now and you know that Zuck is just absolutely fuming every single day not having the best model.

Especially since this is based mostly on benchmarks. I don't think think this is based on vibes. Vibes. Although some of the benchmarks are kind of vibe based. Like LM arena seems to be like a measure of vibes kind of. But it's a big market, over one and a half, almost one and a half million dollars in volume on the poly market for which company has the best AI model on.

Yeah, it's interesting to just watch the graph and just see like, okay, on a longer time horizon it just becomes very unpredictable. You know who's going to actually be in the best spot. Well, well, we have the CEO of Linear coming in.

Let's bring him in.

Is our most recent partner. What's going on?

How you doing?

I'm good. Thanks for having me on the show.

Of course.

Great to have you. It's great to have you a partner on the show as well. It's fantastic.

Yeah, I've been following you guys along from the very beginning. I think you really have an interesting concept and I think some people are calling for that three hour podcast. But I think I like, like you guys are going for the more like shorter content as well.

Three hours a day.

There's something for everybody. Yeah, it's fantastic. Well, yeah, there's tons of stuff to talk about. I think we'll probably see you up in SF next week, potentially the week after, the week after for Figma's event. But yeah, why don't you give a quick introduction for everybody that's not familiar that maybe hasn't yet used Linear in the past like us and then we'll go from there.

Sure. So yeah, I'm Karis Arnen. I'm the CEO of Linear. And Linear is basically this purpose built tool for planning and building software or products. And we've been building this the last five years and what we are really doing for the product organizations and companies is that we are helping them with the end to end workflow from going from customer discovery, collecting customer requests into planning roadmaps, planning projects, then executing on those projects and tasks. So we try to be this, really understand the customer's workflow here, that what it takes for these different people in the organization to do their job well and how can we streamline it or make it easier for them. And today we have about over 10,000 companies as customers and and these can be anything from ambitious startups to major enterprises. And I think if you think anyone building something cool today, they're probably building it with linear. So OpenAI Skale your sponsor ramp. I think Mercury, probably a lot of locals that you see at the bottom of the screen, there are customers as well. So I think for me or for us, it's been a really exciting work with the these very forward looking companies and they're always thinking how they can do things better. And I think you probably talk about this a lot on the show that I think AI is the topic that AI is changing the way we do work or how people do their personal work, but also how the organizations operate. And I think a lot of execs and CEOs and CTOs are now pushing it to their companies that hey, we need to use more AI because we do believe that it can make us more productive and more efficient.

When did you know you wanted to start Linear? You were founding designer at Coinbase and then you're over at Airbnb. I imagine you were pretty frustrated with the tools at the time and had a kind of concept for what you wanted to build. But I'm curious at what point it really clicked.

In the end it clicked with my co founders. I think we're all kind of frustrated at the same time. So I think we had this time where we all worked in our companies for four years or so and we were like, well, what do we do next? And I think we're all so frustrated that each of the companies we ever worked at, these tools never felt that good. And especially it didn't feel good for builders like us. Maybe the tools were okay for the management and some of the other people in the company, but. But like for designers and engineers.

Yeah, it's very different if you're just kind of like looking at a dashboard as an exec and you're just kind of like monitoring the situation. But when you're the Person that has to sort of like, use the tool constantly and sort of be generating the content in the tool. It's just a dramatically different experience. I remember my last company when our first employee joined this guy, Brandon Jacoby, who had been at Cash, App and Square and joined to lead design and product. He literally set up a linear account on the first day because he was just like, we're not going to use anything else. It would just be insane. So I'm curious. We talk a lot about venture markets, broadly. I think you guys have taken a pretty unique approach in sort of like building being a sort of default tool. And I'm sure over time getting an immense amount of pressure from investors to take on down more and more and more capital. Yet I feel like you guys have. Have had kind of like a efficiency ethos from. From day one. Can you talk about your kind of just like, mindset when it came to, when the right moments were to. To raise and what went into that?

Yeah. So I think the ethos of the company is like, what we really try to do is like, we want to be the best tool for this purpose and this market. And I think that's the way we win. And that's kind of like the strategy we have. And for me, being a best tool means that you also needs to be a quality tool, like a high quality tool. I don't think you can be the best tool if it's like the quality is kind of low. So to do that, I think sometimes companies get themselves, or startups get themselves into this stage where it's like you just have to work on the growth metrics because you need to raise the next round. We were fortunate that we didn't have to do that. We hit the market pretty well and we got companies starting to use us in the first year and we started getting revenue pretty quickly. And then given that. But we also had this quality mindset. We always saw that. We worked at the Airbnb and Uber and Coinbase, and the amount of people doesn't necessarily generate the quality. A lot of times when we are actually trying to build something new or something really like, good, it was a small team. And so we took that lesson that like, hey, can we just build better with the smaller team? So that's great. So, like, situations like our costs are lower, but then also we were able to start generating revenue so that we actually started. We became profitable the second year and we've been profitable ever since, so the last four years or so. And so what it creates is like we can have a little more control of our destiny of like we don't have to work for the round. All of the rounds have happened because we felt that there's now a good moment of bringing someone new in. We are in this new, I think with the seed. I think obviously there are some like, well, we should like let's say Sequoia light our seed. So I think there's some like a brand aspect of that. Like, hey, we are like a real company now and we have like real backers. And then some of the other like serious A and B has been about, hey, we are now like entering this new segment. It's a little bit uncertain like what's going to happen. We are getting this larger customers and maybe we need to invest more into sales. So like I don't, I don't. The profitability is not the like the number one goal of the company. Like still the growth is. But what it, what it allows us is like it gives us a little more like flexibility. How do we go after it versus like well, I'm running out of money like in six months now I have to like go figure out how do we put the numbers up so I can like race a good round One.

Unique part of your company in that it feels very core to the culture. You guys are remote, remote only. And then you simultaneously. I think probably one of the reasons that works so well, you guys focus on hiring very, very senior people. Do those two things go hand in hand or are they sort of of separate and both have their own reasons?

Yeah, I would say there's some link there and I think kind of like from the perspective we wanted to have more kind of like a talent density so you have smaller team and better talent. So I think that talks about that kind of goes into this more like senior people, I think remote it is type of mode of working where you have to trust the employees to figure things out on their own. And usually that develops a little bit later in the career. It doesn't mean that junior people couldn't have that, but it's just more, just happens more and as you get more experience, I think today we are acquiring more juniors and I think the India, the remote to me is just that there's a lot more focus on the actual work. I think when you're in a company, in an office, there's all kinds of things going on and people have crazy ideas all the time. Some of those ideas maybe are very good, but sometimes people end up or startups might end up kind of tacking A lot like they're constantly changing the direction versus remote. It's a little bit. The management is a little harder. It's harder to. It's almost like hurting people to the direction. So you have to do it more like this is the plan and this is the strategy. And then you need to let the people to execute on that. And so you kind of have to trust people's judgment. So that's what we try to hire for, is like hire people in all positions that like, if we. If you get no instructions from us directly, then like, could you figure this out and could you like make something good?

About a decade ago, I was running an engineering organization. I think we were using Trello or Asana. I'd love to know, kind of like what does your battle card look like today? And what was the feature or pitch to get organizations that maybe already had some sort of product in place to switch over? Like, what was the killer go to Market Motion.

I think part of it not to jump in is that if a designer or a product manager moves to a company that doesn't use linear, the first thing they tell the hiring manager, I won't join unless you commit to switching to linear. But Kari, go for it.

Yeah, I mean, I think in the end that's kind of like it. It's the word of mouth. And I think obviously that doesn't happen just automatically. So it's been interesting that there hasn't been necessarily just one thing, but there's some kind of. These kind of tools are in some ways simple and some ways complex. There's a lot of things that people do, different things people do in a product, different roles use it. So a lot of things needs to go right. And I think our lessons using these tools for a long time is one, it's like speed. It's really annoying if things are slow, if you're trying to do a little task and every time it takes a minute to do it or you are confused even how to do it, it. That means like you, you probably won't use the tool that much. Like engineer will just, well, whatever. I'll go there once a week to update my status.

That's the worst. Having like dead project management software, product management software that's like, hey, we, we paid for this. We have it. It's my dashboard into what's going on and no one's updating. And you got to go around, be like, everyone. You got to update. Yeah. Bad Jordy, you got a question?

You guys had a, an agent focused launch recently? I'M I'm curious to. You guys are a company that historically is less fixated on sort of chasing trends, right? Like, you know what you're building the best platform to plan and build products. And so when a new trend pops up, you're not sort of automatically piling into it at the same time. So in that context, I think, you know, having this new focus on agents is probably a reaction to what you're seeing from customers, what you guys are doing internally. I'm curious how you kind of to get your thoughts on where agents are today in a sort of workplace environment and kind of how you see them evolving over time. Just because you guys are in a position again where you're not trying to raise a billion dollars selling a dream around agents, you're just trying to build great products. And so I think it's more real grounded context.

Context, yeah. I think we definitely have followed AI, what's been happening and experimenting on things. But a lot of times we do talk to the customers and that's kind of like what we're seeing now, that there is a lot more interest and demand for this. And then also I think in the last couple of years the models have gotten better and we are now starting to see this agent, companies, building agents and agents. I think people are fighting what the actual definition is. But I think to me what it means is that this kind of AI model or system can take some kind of form or a shape in these tools or outside of the tools and you can start delegating things to them. And so in our context it could be like, obviously there's a bug being reported. Maybe the agent can see that this is a bug that can take and solve pretty confidently and they could just say, hey, I can solve this. And then some human approves that. Or as an engineer, an IC individual contributor can just look at their task and say, hey, I'm going to try to delegate some of these tasks to the agent and then I go work on my own task. Whatever is the most complicated one.

I was wondering if you could talk a little bit about the trends in management philosophy. I remember Agile, Kanban, Toyota management, all these different terms. There's books written on these. What's the latest and greatest and is there. I remember a lot of companies were kind of aligned with one strategy or the other. What are you long, what are you short now in terms of like management philosophy?

Yeah, I think a lot of these systems are agile or safe or some of these other frameworks. I think I generally short frameworks when it comes to any kind of management systems. So I'm long on the first principles of. I think in the end it's like what any kind of organization is about. It's like how do you generate the output? Is a like doesn't really matter how do you get there? And so with linear, I think the idea always been can we make it simpler? And I do see Brian Chesky and Airbnb, they have this founder mode idea. And then I think Prex had a similar shift that like hey, let's try to simplify the system like the framework. So I think the simplification kind of. I think why it helps is that it makes the, that makes the real things more visible. It's easy to. If you have this very complicated framework or system, it's easy to hide in the corners of like, yeah, we're kind of moving things around, but nothing is actually happening. But I don't know, it's interesting questions. What does the agent system does? I think in some ways one thing I think it's interesting each individual contributor kind of like maybe becomes more like a manager because they have this like almost like paralegals working for them.

Yeah, you have to imagine that there's more focus on like CI and less like waterfall monolithic mono repos in the age of AI. But I don't know what you think about that. Does that track?

I think it could track in a way that it's. It's if building things, implementing the code becomes a lot cheaper and faster. You can, I think like today we have this waterfall processes partly because the engineering is expensive. So you do the thinking and the design before you start building because the building part is kind of like the bottleneck or expensive. But if that equation changes. So now we can just start what we see with a lot of this website builders or something. It's like you can start just try something out and see if that's actually useful. So I think it does flip the system, but I think you still probably need to go back to the planning a little bit think why are you doing these things? But you can maybe start experimenting more internally, directly with code and not try to have this very waterfall process.

How are you thinking about partnership partnerships in the context of your agent support? I imagine you guys have your own agentic workflows. But then over time I imagine some coding agent will come to you and say, hey, can we get plugged in? So that instead of delegating a specific issue to an engineer, you just delegate it to us. But then that introduces a Vector, where I feel like Linear is about like surgical sort of precision and perfection with product. And so adding this sort of external agent who's now sort of becoming a part of the product, even though they're sort of in some way mirroring what, what an external engineer might look like. But, but I'm curious how you think about that.

Yeah, I mean, our view is that there's going to be like hundreds of agents, maybe like thousands. And I don't think we can, we can hold it back and I don't think we should. So what we're doing is we're kind of fully leaning into that. Hey, LINEAR is a platform for agents. So this might be third party companies building agents. Maybe we build our own agents, maybe our customers build their own internal agents and they want to bring them on. And our job there is to figure out what is the right way to, what is the kind of interaction layer. How do you actually use these agents, how do you delegate the work, how do you monitor it, how do you review the work? Or how do you as an organization just generally monitor the security or the usage or the cost, for example? So we just think that there will be a lot of, at least in the short, medium term, there will be a lot of different agents and we should just support that. And so that's like we already have two, at least two that people are using, like Devin and CodeGen that exist on a platform. You can assign issues to them today and they will try to fix them. And we actually seen like a lot of other developers and we are launching something in a couple of weeks. So I think there will be like more launch partners there.

That's awesome.

Yeah, actually, I mean, it just gets me really excited because, because historically using Linear, there's just so many sort of issues that you create that are assigned to a junior engineer. They take a crack at it, hopefully they get it right. Sometimes they don't, and then you bring in other people to actually get it resolved. And so it's just like such a natural workflow. But it's also exciting because even more junior engineers will learn sort of how to manage engineers just by managing agents.

So I'm excited to run the show on Linear Project. One ticket. Bigger gong.

Bigger gong. Yeah, we're gonna need a bigger gong.

More tinfoil hats, more soundboard effects. Can we get a founder mode soundboard.

To kick it off in talking with your team? I mean, one of the, one of the, like everybody that watches the show knows this. We're trying to make the show, you know, one 1% better every single day that sometimes it's in different ways.

But we really do have so many projects. New studio, new lighting. Like I have 20 projects projects in my mind and, and like they don't perfectly map to.

You know, a lot of people think of content as like, you know, it's a camera.

Yeah, yeah, yeah.

And a microphone.

But if you're not improving it and you're editing.

But it's more so like the, the show is ever evolving product.

Totally, totally.

So anyways, excited to hang.

Yeah, this is fantastic.

Thanks for coming in. Always welcome and.

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

Yeah, thanks for having me.

Bye.

Cheers. See ya.

And next up we got Sean Frank coming in the studio.

The wallet man himself.

But we're going to tell you about Ramp. In the meantime, time is money. Save both. Get on ramp.com, switch your business to ramp.com also find your happy place. Go to wander.com. book a wander with inspiring views, hotel grade amenities.

What does Wander always say? Find your happy place. Find your happy place.

Thank you.

Thank you. Thank you.

Well, we got, we got Sean Frank in the studio. The wallet salesman here, here to break it down. Talks tariffs. Great to have you on the show, Sean. How you doing, dude?

I'm excited to be here. You know, I typically watch a 2x speed and I got like two or three screens going. So, you know, I feel, I feel a little bit ahead of the curve here. I, I think I know what you guys are going to say next.

Next.

Oh yeah, what's that? Yeah, what are we going to say next?

I mean, you guys are going to compliment my suit, I assume it's a fantastic suit.

There we go. Fantastic suit. He's got a suit.

He's got a suit.

He's got a suit. Let's go.

Anyway, great. Looking great.

I want to run through a bunch of stuff.

Yeah, there's so much to cover. How are you doing?

First of all, how was the private equity conference at Jeffries? I thought it was a little derivative of the TB VPN format. You said you spent the day talking to 20 to 14 different firms. 30 minute meetings, speed dating style. We do 30 minute segments on this show. What's going on? Are you copying us? What's, what's happening?

Dude, it wasn't me, but Vinay, the senior vice president of Jeffries is a huge TBP and fan. He's like, he's like, dude, I'm a day one listener. I. In chat. I stole this from them. Don't tell him about it.

Okay, well, maybe we can have a truce then. That's great. He can borrow from us. The, the, the, the official creator of the 30 minute segment over here. But. Yeah. How, how was it? What did you learn? Who'd you talk to? Can you break it down for us?

Yeah. So it was a mid market consumer conference. So to break that down for the audience, I'm sure everyone here knows what that means. There's probably a lot of LPs and funds, but mid market is like a hundred million to like 500 million in revenue. There are typically deploying checks of like 25 to 100 million dollars.

On the equity side, right? Not obviously not the total.

Round.

So.

So businesses are doing between 100 and 500 million, is that right?

Yeah, typically that's the valuations that they target, right. And then their, their equity checks in are, you know, 25 to 150 million, something like that. These are smaller private equity funds. They're typically a billion dollars raised and deployed. And this is like the first professional layer for private equity. Right? Like small market private equity is very scrappy. It is like guys who look like us, like out there grinding it out, trying to find deals where these, these people are, are professional bankers through and through. So they're, they're going to go to good schools. They're going to have, you know, five to 10 years in the industry. And yeah, so like, this is not your, your mega funds. These people are not deploying $5 billion checks. Right? The, the fund size will be under $5 billion. And they're very targeted on consumer, so anything consumer discretionary. What we've seen is that that segment of the market has been destroyed probably since 2022. It got really, really hot in 2021. There was a bunch of spacs in the space. Right. Famously you have like, you know, Warby Parker, but then you also have Solo stuff that just got delisted on Monday. So, I mean, there's a lot of great smart people and there's people who are on the Solo Stove deal. So Solo got taken public by Summit, but Summit's like a little bit bigger than a mid market fund. The first check into Summit was Bertram. So Bertram Capital, really great firm based in the bay. So they found Solo when solo was doing 60 million in top line, right. They put a check in at like $100 million valuation. They probably owned 40% of the business, maybe more. And then they sell it to a different fund. So that's typically how mid market works. You're going to be selling to a different Fund to take them public. So Bertram made a ton of money. They sold all of their shares to Summit. Right. Maybe they had a little bit more that they sold in the ipo, but then a larger cap fund is going to take a company public. So what's happening in the space? They are cold on consumer and the only categories that are interesting for them are services. So talk to a lot of funds who are buying roofing roll ups, ups, and you know, they're trying to buy plumbers, like that type of like, because it's non discretionary spend. If your roof up, like you're gonna get a new roof. And they're really into the pet space. Like pet is still really hot. I have a friend, Bill, who just announced today he sold his company to Morgan Stanley in. In the pet space. And it's on Twitter. You guys can engage with it. So check out Bill. He. He's crushing it.

Yeah, I saw that he's been grinding for a long time, so was great to see. It's funny, there's a guy who works in mid market PE who knew that I was friends and associates with Sean, and he basically would email me once a week for like three years asking for an insurance.

I want to stay on Solo Stove. You broke down. What happened? Is it a casualty of terror tariffs? Is it mismanagement? We've talked about it a little bit before, but can you give us the full post mortem post NYSE suspension, which we hate to see here? We want to see more IPOs, not more D listings.

Yeah, yeah, it's. It's a lot market activity in the wrong way. So what's happening with Solo? So there's like the bigger third thing. And actually, I mean, I'll break some news. I talked to the corporate dev buyer at YETI who was at the conference yesterday, and I asked her, I'm like, oh, so are you gonna buy Solo? And she's like, even if you gave it to me for free, I don't know what I'd do with it. She's like, why is that?

Isn't it making like 500 million? We looked in the numbers recently. It seemed like it was like, even if revenues are declining, even if there's tariffs, like there are people buying stoves, there must be a way to make some money out of that company, right? Am I crazy?

Yeah, there's. There's a lot of debt.

Okay.

And people. There's. There's two main problems. One, it was like the biggest Covid trend of all time, right? There was. There's A two year period where all of us were stuck inside, couldn't travel. We all discovered the great outdoors. They sold a lot of stoves. And there's a negative flywheel for that business.

Sure.

If you sell one stove, you're never going to buy a second stove. Like it actually it removes a buyer from the market so now it's harder to sell the second stove. So it's a horrible problem with that business. The second is massive tariff risk. They are 100 sourced in China. They are very tight with the manufacturer there and you just cannot get stoves right now. So you have a situation where they have their growth solution the past two years has been to go to mass market, retail. They're in Costco, they're in, you know, Home Depot, whatever. And then those retailers won't let you raise prices. So you, you have a contract to sell it to whatever price you're direct importing from China. You have stuff on the water and now your inventory is, is essentially toxic. Right. Like, are you going to, they cost 75 bucks to make. Are you going to give the government $125? Like probably not.

So that's rough. Okay, so casualty of tariffs then, or mismanagement or.

I mean, we talked about this months ago, remember? We were, we were kind of looking. And at first it was a debt issue and that issue was looming regardless of tariffs happening or not. It seemed like it was.

So it seems like this was predictable from day one. If you were really clear eyed about that fly, that inverse flywheel you mentioned. And then also like the COVID dynamic.

How about Chubby's though? Chubby's has to have some, some broader. If that has a positive flywheel, you.

Buy one pair of shorts, you like them, you buy more, and then you're replacing those shorts every year. Right?

Yeah, look, and I love all these guys. So Kyle, the founder of Chubby's is awesome. He's building a software product. Won't plug them, they got to pay for that. But really, really smart founder. And, and Chubby's is a good business. Like Chubby's does $100 million a year, top line. They do $10 million in EBITDA. That business is worth something to somebody. But John Maris was the CEO of Solo and his idea to solve the negative flywheel was to bolt on acquisitions. He's like, I'm going to, I'll fix my company wide LTV by having Solo customers buy Chubby shorts. And that just didn't happen.

Happen.

Right. Like they could never integrate it because somebody likes the outdoors doesn't make them more likely to be a Chubby's customer right now. It would make more sense if Chubby's, I don't know, started selling beer pong equipment or something. Right? Like there could be some sort of like, you know, positive flywheel there. But their solution was to broaden the overall product offering with just like very distinct businesses that have no cross sellability.

So yeah, can you talk about I. People have this idea that, oh, I'm gonna like. I feel like everybody's in love with the idea of a consumer product holding company because like people just like consumer goods and they're like, oh, we have, we're good at selling this, we'll be good at selling that. But then when you, when I, you know, understanding, you know, that your focus and Connor's focus over the last, you know, coming up on a decade and not too long, the idea that somebody could compete in the wallet space with you guys while being part time is just like insane, right? Because you guys are best in the world at what you do and you're just able to put more time into it than anyone else. Is the idea is the consumer product holding company model just like generally flawed? Is it not something that people should be be going after? Or is it just more about actually having like distinct businesses and ultra competent management in place in each of them?

So it's just really fallen out of vogue, right? So very famously in the past two weeks, Hermes became the largest, most valuable company in the, in the consumer space, right? There were 300 whatever billion and they surpassed LVMH. So LVMH is the Holdco model, right? And, and that was the like everyone wanted to be a Holdco because Elvin H. Was and then curing became a Holdco. Right? They have Gucci. They have a bunch of assets. Well, Gucci just put out their earnings. They're down 25% year over year. That came out on Monday, right. So like the Holdco model is just falling out of favor in favor of Hermes. Single standalone band, super valuable Lululemon set the trend. Lululemon is worth more than Honda. So Lululemon makes awesome leggings that we all love. They trade more than with the best car company or one of the best car companies. And then on running is also. I broke this trend, right? So on running is worth $10 billion today. Single brand just making shoes. So right now the markets are valuing beautiful brand, super clean focus, owning a category that'll change again, right? Someone there's really great hold codes out there, you know, the people behind Crocs, Croc zones, hey, dude, they're becoming a great Holdco. Deckers is another shoe company. They're crushing it in the Holdco space.

But isn't there something about even the way that LVMH has approached their Holdco, which is like we don't, we never share kind of creative resources across brands. Like there's very distinct kind of like firewalls in place. Is there something to that? Is that what you think, think you know, is does Decker sort of benefit from scale as just being like a massive shoe manufacturer? And then it's like when it, when it comes to the kind of individual brand level, like let's just make sure that people are ultra focused on, on the sort of the, the purity of the brand and sort of scaling that.

What I think LVMH does beautifully. LVMH calls them houses, right? So they're houses, but they're in the same neighborhood, right? And, and what they're able to do is they have Elle Catterton, which is like they're picking up. Imagine this is like basketball. There's like amazing high school players, right? Elkadderton is signing those high school players. El Catterton is their private equity arm, very much owned and controlled by the Arnault family. So Chrome Hearts is the greatest American accessory brand that's in the L. Ketterton portfolio. At some point they get called up to the major leagues and then they get integrated into lvma. And then LVMH has the spotlight light approach. So of course Louis Vuitton is always going to be the best branded in the spotlight. But when there's a challenger like off white, they can put that in the spotlight for a little bit and then that becomes their star player and they cycle out to somebody else. They just got caught flat footed that they don't have a good star player right now. So like that's the challenge with lvmh. Kering tried to do that, right? Richemont is the other big Holdco in the European fashion space.

Space.

Richmond's crushing it because they own Van Cleef and they own Cartier. Those brands are very, very hot right now. So LVMH is trying to take over Richmond because they want to be in the spotlight. So that is the inside baseball, the inside basketball, if you will, of the luxury space. You need to have recruits and you need to have a star player you can cycle out. And LVMH just doesn't have a hot brand right now.

I like this idea of the pure play. It aligns with the founder mode, the life's work entrepreneur. Just not getting too scatterbrained and focusing on one thing. What is the post mortem on some of the pure play companies in the fashion space that weren't able to reach escape velocity? I'm thinking of All Birds and a few other brands in that space. Is it just doing too much too early or is it just like missing some fundamental insight or is it more of like a market segment? Segment and this maybe works in the high end luxury market but it doesn't work when you're more in that hundred dollar range competing directly with Nike. What's your take on that?

Well, you can't be cool forever. So that's, that's like, that's the biggest challenge. Allbirds was really cool. But San Francisco famously horribly dressed people, right. They have, they have no sense of fashion. Why do we think they're gonna tell us what's cool? Right. And they were betting on a sustainability wave. Right. So like Nike is able to like they just benefited from people caring about athleticism. Right. That was, that took them from a billion dollar stock in the 80s to 180 billion today or whatever. Right.

But they were caught flat footed by wellness. Right. In that. And if effectively Nike was the brand for sports enthusiasts, everything from fans to athletes. But then wellness kind of came out of nowhere. Took the ally, you know, the, the aloe crowd whenever they're Lululemon running in many, in many ways. Lululemon obviously. So it seems like Nike missed the wellness trend and that was again probably the biggest miss.

Yeah. What's your take?

Well, and their stock suffered for it, right? I mean like Nike is down massively from all time highs. They're down from their five year mark and it's because they missed that trend and they didn't pivot in fast enough. The other thing that's happening is, that's happening in beauty right now. So if you go to Sephora, you're either a celebrity brand or you're a wellness brand. That's all the newness going into Sephora. So Sephora and beauty in general is going through this wellness craze right now as well. Like skincare is taking over everything. So we're going to watch more of those waves happen. Consumer trends change over time. You can't be cool forever. So the whole thing like, and this is the biggest problem with venture capital coming into the consumer space. Coca Cola is the most popular drink in America and it doesn't even have 20% market share because people like different drinks right now. Uber is a service that is just great for Everybody. They'll have 100% of like the, the ride hailing market.

Right.

Google, it's just the best. So I'm going to Google everything. There's no second player in consumer taste.

There's no power law outcomes. There's no monopoly outcomes. They're just inherently oligopolistic markets. Interesting. So if you, if you go back to the founders, who do they focus on? The pure plays?

Well, I have a good example of something you brought up before. I mean, Chrome Hearts, I was about to ask, needs to be studied. And one of the reasons why, you know, right now, it's like they've never been, been. They've never been hotter, but they've gone through periods where they certainly weren't nearly as hot. And I'm curious what you think they've done right? I think to my knowledge they've stayed mostly family owned or certainly majority family owned. And is that, do you think, allowed them to kind of like ride different waves and not. If at any point they were overly fixated on just pure scale, you know, maybe they would have not been able to kind of come back in the way that they have. But I'm curious what your take is.

Yeah, I mean, the creative minds behind Chrome Hearts, they're artists. They're gonna do what they're gonna do with, with or without you. If you think it's cool. If you don't think it's cool. Like, Cher was wearing Chrome hearts in the 90s, bro. Like, they're owned by the Sinatra family. Like, they're gonna do what they're gonna do, and it'll come in and out of oak, but they don't care. Right. So that, that, that's true authenticism. Like, they've never chased revenue. Like, they'll make pants that are like $112,000, because that's what they want. That's what they choose to do that day. And then, you know who buys them? Drake.

It's like, well, I've heard they, I've heard they, they basically, they'll mog Drake too. They'll be like, Drake. Like, Drake will be like, I want some new pants. And they'll be like, cool. Like get in line. Like, other people want the pants too. And then Drake has to like, you know, try to cozy up with the, you know, the essay. But that's hilarious.

Yeah, so it's, it's just like a commitment to the craft that, like, I mean, this is the reason why the Europeans are so good at fashion is because they will do it for 50 years making no fucking money. Right. Or Goyard. Goyard's another like amazing brand. They just don't have a website. You can't buy on their website now. It'd be awesome. They would make way more money and if private equity owned them, they would open a website immediately. But then they're like, no, we want you to remember where you bought the bag. That's important to us. So like you have to go wait in line and you have to, you can only buy what we have that day. And it just creates like a very personal relationship with the products that is people are longing for in the Internet age. So yeah, did the Europeans are the best at this. I talk a lot of shit about Europe, but they do have this figured out.

Yeah, I want to go to tariffs. I saw a viral thread yesterday by Ramon Van Meer. He says everyone says they'd pay more for made in the USA. I tested it. We make a $129 filtered shower head manufactured in China with tariffs surging to 170%. We explored reshower reshoring. We found a US supplier. Our costs nearly tripled. I ran a clean AB test. You had two options. There were 25,000 users that did this. The exact same landing page. You can choose made in China for $129 or made in the USA for $239. And they had zero conversions on the US version. The add to cart rate for the US version was less than 1% and over 3500 people bought the Asia made version. How did you process that news? There's some community notes on it. I want to know what you think.

Yeah, I think overall it was flawed experiment.

But.

But it's a good story. But what do you got?

Good viral post.

Yeah, we've seen this play out with sustainability, right. So people, people had two options on their website, like sustainable packaging and we'll buy carbon credits versus not. And like people won't pay more than 5% for that. So it ends up being there's tons of cheap goods in the marketplace and there's tons of substitute goods in the marketplace. And what you need, you need value props to stand out. So like Ridge has, has, you know, best materials. We have a great warranty, we have tons of reviews, we have social proof. These are just value props. Made in the USA can or cannot be a value prop. Right. And if he ran that experiment with a Japanese audience, what you'd see is the Japanese audience is more willing to pay for made in America goods. And if you go to Japan, there's entire stores built around made in the usa. Right. If you go to Dubai, it's the same thing.

Let's hear it for the Japanese. Showing some love for the, the Americans. Yeah, yeah. And so, and so paint me a broader picture about how the tariffs are affecting E commerce. Is it a bloodbath? Are people figuring out ways around it? Is it, is it going to put companies out of business? Are people going to lose jobs with.

So without a doubt it's the most challenging self imposed regulation we've ever seen.

Right.

Like we went through Covid. That was hard for a lot of reasons. That that was external forces. Right. We went through iOS 14. We're peons in that we have no idea. We can't control that. Consumer demand has been up and down for fucking years at this point. I have a lot of friends who will go out of business because of the tariffs. Right. And a lot of people on the Internet are celebrating that. They're like, well fuck them for buying from, for China. But here's the thing. A year ago it was encouraged. It's like it's very hard to actually produce things in America. I've tried for years. I've put millions of dollars into it. So like the government basically gave you a free pass to buy international goods and then import them. And then all of a sudden it became very, very difficult to get anything in from China. And I don't think small independent businesses should suffer for that. I've publicly appealed to J.D. vance. I'm like, look, I totally get you want to incentivize Made in the USA stuff. Like don't just steal our money in like a massive tax. I have shit on the water. You're just making me give you money like this is the government getting more reven. Getting bigger. Let's put it into a fund where if, if, like I owe you that money unless I invest in American business.

Yeah, I thought this, I thought this was a really good take and a really good kind of concept especially too kind of basically extending out the timelines. The policy as it stands today is just like pure pain now. Like you're, you're being like, you know, punished versus what you laid out. So maybe extrapolate plate on that a little bit.

Yeah, like, look, I mean I, I understand the goals and this, this is hurting China more than America. Like I think, I think people in America are whining and complaining because like tn Shipments or, or TEU shipments are more expensive. I'm like, look, I do business in China, I talk to Chinese people. Factories are shutting down and you have youth unemployment of 25% in China. Like it's going to hurt them way harder, way faster. We'll feel it in 30, 60, 90 days when in Walmart gets more expensive. They're feeling it right now. Now, right. And there is ports that are just shut down and it hasn't been good in China for like five years. Like it's been a very difficult economic situation over there. So it will hurt them way more. But the flip side is we don't want to also bankrupt a bunch of American businesses, right? Like what we want to do is incentivize them to either nearshore or onshore production capacity that takes three to five years and takes millions of dollars. So, so look, charge me tariffs, but give me an out. If I take that money and I bring it to American manufacturing and I hire workers and I open factories, I don't have to give you the money, right? So it's like a one to one duty deferral to incentivize US investment. I mean do you guys want the government to get more money or do you guys want fucking more investment and factories built or whatever, right? So that's my pitch to everybody.

Makes sense. I want to get your reaction to this slate auto launch. Have you seen this truck? TJ Parker was talking about it. Finally someone built a simple, cheap, utilitarian truck, 20K, made in the USA, no touch screen. Lots of people are talking about it. Did you see the launch? Did you watch the video?

Hell yeah, man. That guy's been working on it for a long time. I think he's been documenting on YouTube.

So.

Hell yeah, brother, I love, love to see that. And I was in China a year ago and I was at a big like electric vehicle, like you know, potentially sales summit. Like they have 50, 100 brands all competing to sell little tiny electric vehicles and those actually can't pass U.S. safety standards. So they're only sold to Africa. So it was me and a bunch of African buyers walking around and like, you know, they sell for 5, 10, 15 grand or whatever. Now if he can actually hit American safety standards standards and ship a $25,000 truck, I mean this guy's, I mean he'll, he'll, he'll do $10 billion the first year, maybe more, right? Like it's a sales gong.

Let's do it. What do we got?

Oh, oh, the sound effects board is down. Brutal.

For founder and founder mode.

Brutal.

I, I want to talk about the ad people were very happy with that dynamic. First, second, Clear. Initial framing in the first five seconds. Curiosity gap in the first, first eight seconds. Frunk disarming anti ad humor. Founder, CEO Curiosity gap. In terms, you obviously make a lot of ads. You buy a lot of ads. What did you think of the actual launch video?

Look, people are saying inside that front there's actually Ridge carry ons. So I'm not going to confirm or deny, but there could be a cameo.

I did see that.

Yep.

Those are rich trunks. I love to see it. I love to see it. Yeah. How do you, what would your complete guess on what their margin profile could look like on a $20,000 made in America truck? I know the $20,000 is like allegedly due to some EV incentives, but ultimately how much are they actually going to make on something like that?

Yeah, so I think they said it's 27,000 and then you get a $7,000 credit if you buy an EV from a new manufacturer. I think they're going to lose about three grand for the first million of them they make. And that's just how auto manufacturing works. Right? Like the cost set them up. You have all these machines, you have to depreciate them over time. Rivian still loses $20,000 on every Rivan they sell. So it's a, it's a different model to a higher price point. Right. They're going to lose three to ten grand for, for each one they sell. But, and, and if you guys ever say the auto market. The amazing thing about Tesla, Tesla is every car manufacturer loses money on every car they sell. They only make money off of the parts and repairs. Tesla found out a way to not do that. Right. Tesla found out a way to actually turn a profit on the actual purchase of vehicles. Ferrari makes $80,000 per car they sell. Tesla makes. I don't know, I think it's like five grand or whatever. Every other car manufacturer breaks even or loses money on the actual purchase of the vehicle. It's all about financing. It's all about, about parts, it's all about service. So I, it'd be, it'd be crazy to think they're making any money on these things, but the demand shows that like they could make money over time.

I think they'll have trouble because if you have $20,000 burning your, burning a hole in your pocket, you could get 200 Ridge wallets or something, right?

That's true.

Yeah.

So I mean it's like a trade off.

200 Ridge wallets or a little truck.

Yeah. You could buy every product on the Ridge website site, for sure.

Well, yeah, it's an interesting dynamic where it's like he has to show so much demand that he can justify, you know, potentially raising lots of money, five to $10 billion over time, in order to just, like, actually get these to scale. But I think the thing looks awesome. And.

This one is also in Rivian.

I'm surprised. I'm actually surprised they didn't go with a slightly higher reservation price point, just given the history of Tesla charging 100.

What is the reservation?

It's 50 bucks.

50 bucks?

Tesla charged 100 bucks. You know, had this big demand signal, and then obviously people showed up for.

A lot of people show up, but expensive.

It's a much different price point.

Yeah.

And I think this is a car that people just buy as. Like, I would just get one and park it outside of my house and maybe do coffee runs in it. Go surfing.

I would put the $20,000 deposit down today. Like, if they made Skip the line, give us 20 grand today, I would totally do it.

Well, I would do it if they put a naturally aspirated V8 in it. I don't know about the electric stuff, but I would be very pro this vehicle if it had a really loud exhaust note. It was kind of like a more affordable raptor. That's what I'm looking for.

Yeah, man. Well, today I'll publicly announce. If you buy a slate, I'll have a partnership with them. Free Ridge wallets for every slate customer. We can get one to one.

Let's go.

Thank you for coming on.

It's great to have you, Sean.

Awesome. We'll talk to you soon.

I love you.

You're looking great in the suit. Don't take it off. After this call, I'm gonna. We're gonna. We're gonna have our paparazzi, you know, outside your house confirming. Oh, Sean, Frank just puts on a suit to go on tvpn. Make it a part of your brand. Okay.

Dude, it's custom too, so. You guys didn't even ask. This is custom. All right, see you guys later. Made in the usa, too. Bye.

Later.

Thanks. That was fantastic. Always a great time having Sean on the show.

Sean is my favorite entrepreneur salesman.

He's one of my favorite wallet salesmen. Yeah, he's up there with the best wall.

Definitely up there with the best.

The world.

Next up, we got Semel Shah coming in from Haystack. Semel, welcome to the show. Good to have you here. How are you doing?

Doing great. I'm really excited about this because I've had like 100 friends Tell me that they love this podcast.

That's amazing to hear.

Yeah.

I'm so glad. I'm so glad that we're breaking through. We've been spamming the timeline, spamming everything on X. We've learned that slop is the future and volume wins, pace wins, speed kills. And we've been trying to do. Do all of the above.

Also, in a previous life, you know, I used to work in the podcast industry and I love the medium. This is way before it really took off.

Yeah.

And I love media and I love TV shows, and I always felt like there should be like a live tech VC segment, you know, So I just.

Yeah, it's time to pulling it off. It's a crazy idea to do a live daily show for. Just for technology, but. But it's been a lot of fun. It's been working out. I'd love to start.

Did you ever look at Cheddar?

Yeah, we actually talked to the CEO earlier this week. I was familiar with it. Where they took that business was much more. I mean, they actually wound up owning ratemyprofessor.com that was interesting. They also owned TVs on college campuses. And I do think we have a bunch of college students in the audience, but. But definitely we have focused more on insider baseball in Silicon Valley and stuff that's not quite as general audience, but who knows where it goes? This is still an early project. It's evolved a few times, and we'll see. Anything's possible.

I love it. Well, thank you again.

Yeah. Well, I actually would love to start with your experience in the podcasting industry and what you were doing and kind of what lessons you learned. Just because I'm curious. Curious?

Yeah. Just real briefly. It was kind of in the 20121314 time frame, and the entrepreneur at the time, who was a repeat entrepreneur, who's a technologist and a mentor of mine from Stanford and was on the faculty, had this idea of like a personalized audio. So if you, you know, I don't want to date myself here, but imagine you 10 years ago or so, you opened Pandora on your phone and you're going in the car. What would the AM version of Pandora B. That was kind of the vision. And so we really spent a lot of time curating the initial set of things that would come onto the platform. You know, the big categories for commute were news, spirituality, or philosophy. Comedy was probably the biggest one on the nighttime drive. And then it was like giving the person the opportunity to skip. So now if you're in a Spotify playlist, for example, we just take for granted that we can just skip to the next song, or in Instagram, we can flip to the next reel. But users didn't really have that amount of control back then. But ultimately, the cost of acquisition at that time, you know, was really, really difficult. And there wasn't as much podcast content. It was mostly kind of radio or TV content being ported over. You know, this is pre Joe Rogan and all that kind of stuff. So eventually it was acquired by Apple primarily for the technology of streaming, the ability to stream from server across different telecom networks.

Interesting. I'd love to know your kind of venture origin story. One fun question is, like, what was the deal where you caught the venture bug? What were some of the early deals that stuck out to you as, hey, maybe I want to turn this into a real career?

Well, it really started because I was working as a consultant for a lot of different firms. I was working in industry and I was writing a lot online and doing lots of media stuff just for fun. And a lot of people who happen to be investors and LPs read it and I thought, oh, it'd be, you know, I was helping a lot of friends raise capital. I thought, of course, one of these funds that is employing me as a consultant will give me a job that did not work out. And so Haystack was born literally out of desperation of having nothing else to do do. And so it started with a $1 million fund, and in the first eight months, wrote seed checks into Instacart, Envoy, DoorDash, and HashiCorp.

Wow.

Banger after banger after banger after banger.

And I knew in the first. The first two funds, which took about three years, I knew that I would enjoy it because I had been around it a lot. And so it was a lot of fun. I did not realize how much I would love it. And then the other component, I always call it luck and love. Mike Maples has a great line which is like, you gotta get hit by the lucky truck. And I got hit by the lucky truck a bunch in the first three years. So it was very fortunate. But it was a different era. Like, I could never raise as much as I wanted to for funds, and. And I would have to beg, borrow, and steal to make sort of ends meet at home, you know, so for.

A long time, yeah. When you're eating foie gras on the $1 million fee structure.

Yeah, it's 200k over 10 years.

Over 10 years.

Pretty brutal. I didn't take any fees really in the first three funds and.

Yeah, that's great.

Are you surprised? Surprised today when you see managers without much of a track, I mean, you know, you listed off a few of the companies that you invested in the first fund. You would think that that kind of portfolio would get you, you know, if you had that today, it would probably get you a $500 million, you know, fund too, type of thing. Are you. When you talk to, you know, upcoming managers today and they're, they're sort of complaining about sort of the challenges of raising money, yet they're still raising 50 plus million dollar funds, do you, I'm assuming you don't have a ton of, I mean, you have empathy, but you're also.

Well, it's a very astute question you're asking, especially since we don't really know each other, because that is a very astute question for two reasons. One is that the rational answer to your question is that it kind of makes sense because, you know, back when I started, people didn't really know how big Uber could be or Palantir could be. It was like, well, I'll just wait to see what happens. I mean, a lot of VCs just passed on Palantir for rounds and rounds and rounds and rounds. And Uber was like, you know, just kind of blew people's mind of how fast it grew. So now I think a lot of LPs and a lot of people around the world are like, hey, the tech startup ecosystem is a place where I need to have some money at play. Because, you know, people who come on your show, like, I mean, Kari. I have a great story about Kari, by the way. So we think we got to jam that in. But yeah, people like Kari are like coming here from, you know, Europe and like doing amazing things and like you find one Kari in a career, you know, or in a portfolio, it's amazing. So I kind of understand that more LP dollars are coming here. America is more attractive. The American entrepreneurial ecosystem is an attractive place to park, park some money and put it in the ground. It totally makes sense. And when your choices are billion dollar plus funds charging you 30 carry and, and they're going in a little bit later, it's kind of like, well, okay, do I, you know, which burning building do I want to fall off of? You know, now the, the more micro answer and why. I thought that was the question is that A lot of people come to me and ask for advice or help with LP Andros or how to like, design their fund or do stuff. And I've learned, you know, from, like, I had amazing access to people and that cannot be shortchanged. Like, I was very lucky to have access to like incredible, incredible VC people, you know, VC creators and fund creators that you would all know by name. I had direct access to them and still do. So I try to pay it forward by helping with LP intros and doing all that stuff. But occasionally I do get that, oh my God, like, you know, I need to raise a fund of the size to pay myself. And I always come back with, who. Who says you need. Who. Who owes you a salary to deploy the money? And that's really the line I always come back to, which is it's a little bit unfair because you could have a really qualified person who doesn't have access to capital. And part of the game of a VC is to aggregate capital for the entrepreneur. That's part of the game.

Yeah.

So if. If you have a unfair capital relationship or an asymmetric relationship where you can aggregate capital, all of a sudden you're in the game, but then you have to access the founder. So it's that you got to aggregate supply on both sides, high quality supply on both sides. But this idea that like the fund should start paying you is a luxury in my mind. And of course, if you have access.

But if it isn't willing to pay.

The fees, like you can get paid.

Yeah, isn't today, though, I feel like l. From. From my understanding, if you go to LPs and you're trying to raise a small fund, let's say 10, 20 million bucks, and you say, I'm not going to have any, any fees or maybe a very small admin fee to cover the cost, isn't that given that they're just so used to paying fees everywhere, is that even like a selling point or does that send the wrong message to.

That's a fair. That's a fair question. I think that LPs are happy to have their GPS, if they want to work with them, pay them in some fees. I think the point is that when you're starting and you're trying to hit a target or you're spending a year or two trying to fundraise the idea that, like, you're owed a salary, philosophically to me, is kind of bankrupt, and that like, you can say you're going to do that, but at the same time it is a market and LPs vote with their feet and sometimes they may make smart decisions and sometimes they don't. Yeah, but yeah, I would say that somebody going into market with that 30 million dollar fund should have a budget for how they want to pay themselves. But also like sometimes you have to cut deals when you start. Like, you know, a lot of people who want to raise an $100 million fund, maybe the market only gives them six or eight, you know, and it's like that's where you should start. But a lot of people don't want to start there. And it's, it's a little bit unfortunate because Angellist, which kind of came up when I was coming up, created a whole new pathway for me too. Like that's available to you now, you know, and so a lot of people do use it, but I think a lot of people want to aggregate more and more capital before the market's ready for it.

What AngelList products were you leveraging most aggressively on the come up?

Oh yeah, this could be its own, this could be its own podcast pod, deep dive pod. I mean I went, I mean first of all of all, Gene Genius, you know, and really was helpful to me. But essentially there were a couple of like public products and a couple of off book products. The public products were that you could do these kind of like software Click and subscribe SPVs, you know, where if you could aggregate from your following or people who were following you and say okay, I have over capacity in a decent deal. You know, there's, I've got a 50k allocation in a series A that I did a seed in and I, I don't even have the money right. Sure, you could do that and then set the carry. You could even do little things like portion out the carry based on, you know, people who are helping you on the deal or other people you want to give a little gravy to. Then it turned into like these rolling funds or angel list funds which are very popular, you know, 18, 19, 20, 21 and are kind of industry standard today. And then I hope naval doesn't mind but like the off book thing he did me a solid for because I had known him for a long time and he is just incredibly helpful and savvy. But he had raised a private pool of capital and an SMA from a, I can't really disclose who, but let's just say a large sovereign that wanted to basically pump a lot of money into the ecosystem. And he picked four early managers to kind of white list and he chose me and Told him just do whatever.

He does when you're. I'm curious, how long should someone wait to get hit by the lucky bus before they should, you know, hang up the cleats? Because I, I really do feel like in my personal experience, if you're in venture seriously and you don't get a true banger in the first five years like this, your job just becomes infinitely more difficult in every conversation you have from LPs to entrepreneurs to other managers that you might be co investing with. But I'm curious how if you've seen examples where like you know, year eight, they finally get the banger.

This is, this is a very, very good question. I mean I should be back on this pod at some point because you guys asking like the right awesome, detailed questions. It kind of depends, I think think to answer your question based on what fund you're at and what stage you're investing in. So let's say you're at a larger fund and you're doing kind of like a classic series A where you're joining a board or you're putting 7, 8 million plus in a deal, maybe you're doing B's at 2025. You, you can only do in a high quality sense, maybe 2 to 4 of those per year.

Year.

And everyone that's your partner or who's around you or the bigger heads in the, in the fund, they'll ask you to report on your portfolio on a monthly quarterly basis and they'll have a sense of an underlying like what's happening there. Sort of like a few times a year they're now obviously the boards are going to be using AI sorry, the funds are going to be using AI to like track the board. So it's not just about the relationship with that investor but like sometimes the investor in the old days could say everything's going fine, but underneath the hood it's on fire. They'll have more of a record of what's happening. And so generally the people who are running the funds will watch and see like what are the underlying metrics, who's going to follow your deals, right. As a proxy for quality. And so all those things are under a microscope. I think when you're a seed investor like myself, where you're in that early part of the ecosystem where you're not investing $7 million per deal, but it might be 200k, 500k a million dol, you can take a lot more shots on goal and people suspect that some of those things are not going to work. And you Only need a couple to work, right, so you have more chance, you have more surface area to get hit by the lucky truck early. The trade off is that you don't own as much as you would if you did a rifle shot later. But yes, I think five years is actually too long. And there's a couple heuristics here. Like it used to be in venture when you would join like a really good fun, they would, they would hand you a later stage deal that already had a board in place and already had some momentum underneath it so you could learn the ropes and have like a good kind of chip to put on the mantle to start. But if you think back, I don't know if you have come across Matt Kohler, but Matt Kohler was a GP at Benchmark for 12 years and this guy's hit rate at Series A was incredible, credible and even. He doesn't even get credit for certain deals that he sourced, but he just doesn't care, you know. But you know, very few people are going to have that rifle shot selection. Yeah, that. Matt, did you know someone today who I would mention would be like Mamoon at kp. I mean you look at the guy's track record, it's absolutely insane to pick off the money round.

How common is it for you? Because I'm assuming you're LP in a ton of different funds at this point. How often do you see like a $50 million fund these days that's fully deployed in a lot of winners, but just not kind of a dud of a fund just because of concentration issues, pricing, et cetera?

Well, I do lots of small investments and friends and like other people to support them when they're starting funds. So it's relatively small, the funds are relatively small and when the funds are a little bit bigger, those managers have already had experience around portfolio construction. So you can get away with kind of shittier portfolio construction when it's a smaller fund because you're just really chasing the alpha in that. But I would say the broader point I would make here is that the idea of portfolio construction and the math around it, it's. It's no more complicated than basic algebra. And I would say I probably spent a lot of time trying to learn it and around a lot of other investors to deeply understand it. And it was still probably the hardest topic for me to grok or years for me to grok. And I think that's why a lot of LPs like to fund people who come out of these bigger funds because you're served that every week when, when people are doing partner meetings and portfolio reviews and the people running these funds know it. So it's very hard to learn from scratch.

Totally.

I want to follow up on a talk we had with Sam Lesson yesterday. He was saying that the unicorn factory is broken. And it sounded a little bit like he was complaining that just like the big funds, you know, the crossovers have squeezed the growth investors, the growth investors mess up all the early stage markets because they're just like, oh, ten million dollar Series A, it doesn't really matter. And then the series A investors mess up the seed markets and the seed markets mess up the angel investors. How real is that dynamic? Are you feeling pressure? Are you optimistic? What's your takeaway on the broken unicorn factor?

I gotta watch the Sam episode. That guy's full of, full of amazing thoughts.

Yeah, he's a hot takesman.

He is a hot takesman. Very artful. I think Sam's exactly right.

Right?

You know, everyone is on everyone else's lawn, you know, and so yeah, it's definitely a concern I still feel at the end of the day, and maybe this sounds like Pollyanna, but like the game is, can you meet great entrepreneurs every week, every month and you're not bogged down by other BS that your partners throw on you or that you go to stupid conferences. Like, like we all have like a ton of time every week and we should all be meeting awesome founders as much as we can. And like, can you connect with them? Can you get to know them? Can you take a bet on them? And I still think you can because a lot of investors have ADHD and they go to stupid conferences and they go to stupid meetings. And so that's my kind of view is that like you're not going to catch everybody, there's no way to meet everybody. But like there's plenty of people here that you can take a bet on and you can get paid, you know, if you're only chasing hot deals and everything's price of perfection, we all know where that goes. So the other thing I will say is I've been seed investing, you know, in this part of the market for 12 years now. And every single year, with the exception of like a few six month periods of like Covid or dislocation or something, something, every year people complain there's too many smart people starting companies, there's too much money in the early stage market and the round sizes and the valuations are too high. I hear that every single year. So I just don't know when that's going to stop. Like, maybe a meteor will hit the Earth. I don't know.

No. I got to Silicon Valley in 2012 and I got a big sit down speech. We are in a bubble. And it was like, yeah, we were. For another decade.

Yeah. I mean, one of the things that makes me so bullish on America is just we spend every single day talking to bright entrepreneurs. And at a macro level, it's obvious that there's bubbles in different, you know, kind of sectors and industries. Right. People say, oh, manufacturing isn't investable. And then you talk to an entrepreneur who's like, six years developing, like, a proprietary method for manufacturing metal, and you're like, yeah, you're going to sell billions of dollars of this product. I want to ask you about two archetypes of new fund managers, and I want to get maybe the advice that you kind of like, give them as they think about raising. So the first one is the angel investor who sort of casually locked into maybe investing in a bunch of winners while they weren't taking investing seriously. And I think, I think this is fairly common. Somebody's working at a great company or they're a founder and they just happen to invest in, let's say they invest in 15 companies, couple of them end up being unicorns, and they decide they want to become a fund manager. And then the second archetype is somebody who's at a big fund, gets hit by the lucky bus, maybe, but doesn't really realize the kind of dynamic in which enabled that investment, which might have been the fund's brand or it might have just, you know, a variety of factors. So I'm, I'm curious how you talk to those types of managers. Both, both of which believe that they deserve a $50 million seed fund and deserve. They should be you know, able to kind of like win deals and, and they very possibly can. But it's not necessarily a walk in the park.

The. For the angel archetype. I mean, let's not forget, like, Elod Gilbert was like a super angel and then turned into, like his own growth fund as a brand. I mean, it still amazes me to see, like, the entrepreneurs, you know, when they create their Coachella banners for their huge fundraisers. Andreessen Horowitz, Elad Gill. Okay, that's pretty awesome.

It's awesome.

So, you know, he was born from that. I think that, like, the pattern going back to your question is, you know, hey, you've been doing this as a founder, so stuff I would think about a Couple things. One is like when you have a founder, especially a founder who's like, or operator who's like very, very connected and just kind of angel investing for fun, a sophisticated lp. Now he the the pro. The problem is here to do a 20, 50 million dollar fund, that person could just call his or her friends, you know, but let's say if you're going to like a sophisticated family office or institutional investor or fund of funds and all these managing merging programs or managing manager emerging manager programs are popping.

Up.

That LP knows that they're trading off access that this person may have that's unique for that portfolio construction and discipline of building the basket. And so that person, I would advise to say like two things to watch out for is how are you going to get smart on the portfolio construction and build a model that works and kind of stick to it. You can, you can deviate from it a little bit but, but you want to show consistency, right. Because as you build up your track record, literally when we raise funds, you know, we may or may not be in the middle of that right now. They take your whole bank ledger. Like every dollar that comes in from an LP and every dollar that's wired to a company is just in an Excel spreadsheet.

Yeah.

And so everything is recorded. And so you know, you go to Wyo by second or third fund when an LP is really looking at you, they may say like love to see this smoothed out a little bit. You know the other thing is just what I say, network atrophy, which happens to everybody, which is like if you're not constantly replenishing your networks, not everybody are the Collison brothers.

I mean the big, the big thing, the big thing, the big red flag for me on the angel side is, you know, as an angel I have 50 plus companies that I've put various checks in. Both of my, you know, true banger unicorns I would not, I got 25k into. If I tried to do 50k they would have said sorry, like you know, we have a bunch of people on the rad.

You had access, but not that much access.

Yeah, yeah, I had access and I was intelligent enough to just give the founder money. But, and, and so, and so if I, if I were to go out and raise a fund, I, it wouldn't be authentic to say like oh yeah, at that point I would have, you know, been co leading the round or.

Whatever you're talking about like what happens with check size escalation. So like I'll give you a couple of things to noodle on. So for me, I had no choice but to crawl, walk, run. So I was incrementally increasing my check sizes in the same kind of around. So the same rounds I was doing 12 years ago, we're doing today. Now, most people will just say, oh, I can go a little bit more. I tend to think if you talk to other seed investors, that kind of line is around. Somewhere between when you're asking for 250 to 500k starts to get tight.

Yeah.

So. So you could have an aggressive, you know, one. One model is. You could have an aggressive angel who gets that right away and starts firing the million dollars instead of 25. And they still have a hot hand, they still have a good network, they still have good judgment and nose. Like, that can work. The problem is, like, you're gonna. You're probably gonna light a lot of money on fire too, because the deals are moving too fast and they don't have like that deal judgment going. But the, the broader point you're making is a very good one, which is around, like, what check size can you really write in the competition set?

Yeah, in the one. In the companies that matter.

This is fantastic. We definitely do have to have you back on. We can talk for another five hours.

I gotta ask one more question. Can you. How, how. How do you think X is today in comparison to the good old days of Twitter? I think you were one of the first people I ever followed on tech Twitter.

Yeah, same here.

I didn't get. I got on like, somewhat late. I was in college.

But I mean, five letter username, it's no four letter username, like, but it's pretty good.

Like, I'll see new people follow me and like, usually it's just bots or people with like a, you know, an animated.

The anime profile pictures. There's alpha in those. Some of those folks are really great AI engineers.

But, like, recently a bunch of people have, like, followed me and I'll look at, like, recent followers and they'll be like, Barack Obama.

That's awesome.

What's so funny? Yeah, if. Elon, if you're listening, I love X. I love Twitter. I've been on it for, I don't know, over 15 years.

Years.

I just want Tweetdeck back because I think Tweetdeck being removed has disrupted my flow and I've never. I haven't been able to, like, find my footing again. But I think the content on there is great. It's just. It's harder to find.

Yeah.

Right now. And I tend to get the best tweets in my social chats, in my, in my group chats.

Yeah.

And to me that's a sign that like the interface is too much.

Yeah. We talked about this with Eric Torenberg a little bit. That a lot of the alpha has shifted to these big group chats and there is a little bit of that that's lost. I mean, Twitter originally was like the global group chat for the world and for tech and you had NFL Twitter and all the different Twitters. There's still a little bit of that and we're bringing it back with the show.

I think Elon and them can make more money by going back to tweetdeck, redesigning it. And then in each stream you can have different ads just at top. It's like such low hanging fruit.

Yeah.

Yep.

Well, this is awesome. Thank you for coming on.

Let's see you guys.

Yeah, thank you. Great to meet you.

Take care.

Cheers.

Let's bring in Dan from Chain Guard.

Boom.

Announcing a pretty medium sized round. I think it's just in a couple hundred million dollars.

By the way, did our three o' clock meeting get moved to.

Oh, did it get moved to 2:30.

So we got even less time.

Wow. Okay, well, we might have to reconfigure some of the agenda because a big meeting just gotten moved up and it's all the way across town in LA traffic on a Friday. We are going to be in trouble. We will figure that out. But we will first have a chat with Dan from Chain Guard. Welcome to the stream.

Thanks for having me on.

Yeah, thanks so much for joining. Congratulations on the hefty $356 million Series D. We'd love for you to introduce yourself. Break it down, down. Give us the news, tell us what's up.

Oh, man. I was just on my roof 10 minutes ago trying to get my Starlink to work because my Internet was down for two hours and it came back on five minutes before this. So I'm so happy.

There you go.

It's a miracle. It's meant to be.

Yeah.

Perfect.

Where are you right now?

Yeah, yeah, I'm in my basement in Rhode Island.

Oh, nice, nice.

Very cool.

Yeah, we're an all remote company. Company.

Yeah.

We're about three and a half years old at chainguard. We got started during the pandemic, so there were no offices and we've kept it that way as we've grown. But we're building a safe source for open source software. Open source is this kind of like hippie software movement that's been around for like 30 or 40 years. But it's like anyone writes code and puts it on the Internet for free and people use it and everyone kind of gives back and trusts it. And it mostly works, works, it's awesome. It's like 90 to 98% of the code that people use when they're writing, you know, their own applications. But when you're using code that's written by anyone on the Internet, it turns out not everyone on the Internet is a nice or responsible person. And that leads to security issues.

What was the single I was about to say?

Yeah, what's the inciting story? Is it Solar Winds? What, what do you go back to as like the, the, the foundation story that we will be able to prevent in the future?

Yeah, SolarWinds was like one of those eye opening moments. It's something I've been paranoid about for a while though. There's actually this paper that was like written in the seventies by Ken Thompson called Reflections on Trusting Trust. And it was like a Turing Award winning paper. Like it was his paper after he won an award. And he kind of proved by pranking all of his co workers at Bell Labs that if there's a backdoor and a compiling a compiler is a thing that turns source code into like, you know, the thing you're actually going to run, then you can't really trust any of the programs that are ever built with that or any of the things that are built with those things. And it's an awesome paper. And then everyone just kind of blocked this out for like the next 40 or 50 years until SolarWinds happened basically where somebody actually spent the time and did something like that and then had dramatic consequences as a result to all of those kind of downstream customers. But my co founders and I have been working on this stuff for a while at Google and SolarWinds was kind of the kickstart to actually get this company going.

Got it. So talk to me about, I mean the ramp on this company is increa is crazy. What was the first customer? What was the go to market? How did you scale? I wanted to hear all that.

Yeah, we spent a while in the beginning trying to figure out what we wanted to do from a product side. Software, supply chain security, open source security. It's a whole bunch of problems. It's not just one problem. And it took a while to figure out what, which one people actually wanted to solve first. It was this topic everybody knew about. Out after Solar Winds there was an executive order from the Biden administration that kind of thing. But nobody was really ready to take action yet. They were all just paying attention to and learning about the space. So we tried a bunch of different things. But this product that we have now, our Chain Guard Images product, we started on it pretty early and it took a while to get going because there was a lot of software that we had to build to get to this point where people could come to us and get whatever they wanted to run from us. We first started selling it like oh sorry, go ahead, ahead.

Oh yeah, I, I, I, I just wanted to hear, just finish that story and then I'll ask the next question about, you know.

Yeah, we really first started selling it about halfway through calendar year 2023. We got the first couple customers on board. We had a couple sales reps at the time. They reported directly to me after it really started selling though. And we, we had a feeling it was repeatable. We brought in a VP of sales, really started to scale that. But we've kind of been perpetually behind on, you know, growing our sales team as a result. Result, the demand has been more than we can handle.

You're doing great.

Talk about, I want to ask you more potentially just fun question, not so serious talk about the brand. I think if you said 20 years ago that like a security software company would have such a fun, delightful brand, they would have kind of laughed at you. Is it just an extension of the team and your guys internal culture or how did that come together and what's been the customer response to that? Because I imagine at this point many of your customers are not just cool ex native startups, they're really scaled enterprises.

Yeah, I think it's a reflection of in some ways our internal culture. Security is really serious work. It's the type of security we do is really tedious work. It can be boring, it can be hard stuff nobody really wants to do. And we try to keep it fun. One of our core values is we do serious work but we don't take ourselves too seriously and we spend a lot of time on that one. We have fun in all hands. We have crazy stuff, summits, that kind of thing. And it helps keep the culture light when you're about to go spend eight hours trying to fix some tiny bugs somewhere in some piece of software you don't understand. It helps to laugh every once in a while. It keeps everybody engaged, keeps everybody having a good time, especially when things get tough. And we try to, you know, reflect that in our social media and our branding and the events and all of that. Stuff we do. Yeah, I get cold called all the time. There's all these brands out there and like just some personality and authenticity really goes a long way in this totally.

What, what, what, what are the, the general risks and in, in you know, cybersecurity risks around software that, that kind of like keep you up at night that aren't related to, to Chain Guard directly and what you guys are doing. So kind of like more at a macro level.

I mean this one's sort of related to us, but it really is the one that keeps me up at night. But we don't have a perfect solution to it either, so I don't feel too unfair. But it's the XZ Utils attack at the start of last year, if you remember that one. I think that's the one that probably should be keeping the entire industry up at night. It was this piece of open source software that had been around for like 30 years. It's this compression library that's used everywhere across the Internet. You know, as you upload, download things, it all gets compressed and decompressed just like from Silicon Valley, you know, the middle app compression kind of thing. It's everywhere and you don't even think about it. And it was maintained by just one person like a lot of projects are for you know like a decade. And somebody else just showed up and started helping and they were like fixing bugs, doing good stuff, cleaning up the old code nobody else got around to for like a year or two. And then the original person was like, you know what, I've been doing this for a long time. You're doing a good job. Why don't you just a take, take over and the original person just kind of left. And then three months later this malware gets slipped in. That was incredibly sophisticated. And it turned out it wasn't even a real person. It was just like a made up name on an email list.

The name was Giatan.

Yeah, gan. That's not even a real person. Like there are people with that name and they had a terrible week getting harassed. But none of those were that gan. And it was luckily detected at the last minute and it was a really close call all but that's not the first time that's happened. I'm sure it's just the first time we've noticed and that's definitely not the last time that type of thing is going to happen. It's about trust in the end. You have to trust the people that are doing this and you don't know if they're a Nice person on the Internet. What's that old meme? You don't know if someone on the Internet is a dog, right?

Yeah, yeah, no one knows you're a dog.

Yeah, a dog. Russian or North Korean hacker. You know, nobody on the Internet knows.

These things, so it's kind of related.

To what we do. So. But like, it's not hard one. It's impossible to solve unless you know the identity of every single person and know their entire life history.

Yeah, this is somewhat related. I could imagine there's a world where this is handled by the government, and if there's critical software that's identified, it's like we're going to find this person and verify who they are and basically do a background check. On the other side, the more futuristic Silicon Valley tech approach might be, hey, we have incredible software LLMs. We have AI agents. What if we just run an LLM over every piece of public code, constantly review every, every git push or every pull request? Right. How are AI agents effective? Is it just going to be a, like a cold war of, of both sides? Using AI to sneak ever, ever more complex hacks in and catch them is a cat and mouse. How are you seeing AI and AI agents helping or hurting in the future?

I'm scanning the Internet right now while we're talking. Yeah, I'm vibe, I'm vibe. Scanning the Internet. Yeah, no, it's, it's an arms race. Like everything in security, attackers get better, they move around, find different ways in, and defenders have to have to keep up. Right now I think we're losing that war. Right. We're getting a lot better at finding vulnerabilities in software and finding ways to exploit than we are at keeping up with that. I hope that changes. You know, AI adoption in security has been pretty slow and for a good reason. It's kind of scary. You don't want to just run these things with direct access to all of your systems. But attackers aren't slowed down by that. They're running this stuff every day and every week as it changes. So it's going to be a kind of wake up call and catch up period as the defenders figure out how to use it as well as the attackers are.

What's the, what's the vibe in the security community right now? Just. Is it. I remember I like accidentally landed in Vegas during DEF CON or Black Hat, and it was kind of out of my element one year. But what does it take for someone to break into the industry? Where are the key pipelines? Are people even like, are universities relevant here anymore? I know there's a lot of hackers that just kind of do CTFs and then become famous, but what are the typical pipelines into either career at your company or just the industry broadly?

Yeah.

Security is both really easy to break into and hard at the same time. Right. Like, like you mentioned, universities aren't terribly relevant. There's no, you know, college that you get a degree in cybersecurity from. Even programming in general. Right. You can learn this stuff on your own. I learned it on my own. I did mechanical engineering. I never took a programming class. But it's also hard because there's so much esoteric stuff, like there is no curriculum. You kind of just have to spend all that time on those forums and reading hacker news and reading all these different sources. So I'd say there. There's not a lot of credentialism, but there is still this like kind of obscure, dark knowledge base that you do kind of have to pick up on on your own. But it is incredibly welcoming. Hopefully you had a good experience when you landed there in the desert. Yeah, at defcon, it's always a fun crowd.

Yeah, totally.

Yeah, it's way more fun than rsa.

You never know what you're going to get in Vegas. It might be the Plumbers, you know, annual conference or an arms dealer conference or.

It's always different. But yeah, I remember people were joking like, oh, like, don't even go near the DEFCON folks. Like, they'll hack your phone in two seconds while you're not even looking.

No one takes a shower. Yeah.

Yeah. So what's next for the company? I mean, you have a new war chest. You mentioned hiring salespeople. Scaling that up. What are the new challenges? What are the goals for the coming 12 to 18 months?

Yeah, we're trying to be the safe source for all open source. You know, up until today, it's been pretty limited with just our container images. We're adding new products. Just announced a few a month or two ago. Virtual machines, language level libraries. You know, we're really just on the tip of the iceberg when it comes to open source. So we're scaling up our investments a lot in R and D, our automation, making this stuff easier for us to do. As we continue to grow and scale, you know, the amount of open source that we have, it's moving even faster. You asked about this, about AI. Open source is accelerating. You can crank out code even faster now. Today it's more people writing more code. All code has bugs. Bugs. We haven't really made an improvement dramatically that way in, like, you know, the. The number of bugs per line of code written. In fact, it'll probably go up as more inexperienced people start writing more and more of this. So the security gap is getting wider and we have to get even faster at it.

Yep, that makes sense. One more question on AI and we'll let you get out of here. Dario over at Anthropic just published a piece, the Urgency of Interpretability. Jordi and I were talking a few months ago about Deep Seek and this idea that even if it's open source, there could potentially. It's a little sci fi, but there could potentially be a Manchurian Candidate buried in the weights of one of those models. Is that something you're thinking about? Is this pure sci fi? Is this a year? 2, 5, 10 out? How should we think about auditing the output of open source LLMs? Because that seems like a really valuable target. Target? If I'm a hacker, yeah.

I've seen studies, not even just recently, you know, in the last couple of years, where if you could taint a percentage of the training data going into a model, you can control some of the output. This stuff is not possible to reverse engineer. Code is hard enough to reverse engineer and this is that scaled up by like a thousand x. Yeah. Open source models, you know, there is an open source definition for models and these weights, but, you know, you can read source code. It's hard, but you can't read these ones and zeros in a, you know, a 40GB file. It would not shock me if it's in there. Even. Not even just Deep Seek in any of these models, intentionally or intentionally. We like to think that we can review stuff line by line and catch these bugs, but there's no possible way to do that with LLMs. The whole explainability piece is scary.

Totally. Well, thank you so much for stopping by. We have to cut it short because we have to run to a meeting, but this was fantastic. We love to have you back on the show whenever. Hopefully there's never a big security incident, but if there is one, we'll be.

Calling you and we'll be playing this sound effect.

You know where to find me.

Thank you so much.

Thanks for coming on.

Good luck.

Yeah, we'll. We'll talk to you later. Bye.

See you, Dan.

Fantastic. Well, we have to wrap up. We have one last ad. Linear. You heard from the CEO directly. It's the new standard for modern product development. Go check out Linear Build with Focus, Ship with Care linear app. And thank you. We will wrap up there. We will be back Monday.

Yeah, we're sorry. We have to run. It's going to be a massive week next week.

Massive week.

We're going to be on the ground.

At Hill and Valley in dc. We have a lot more planned, a lot more timeline, a lot more top stories, a lot more real estate is stories.

Hopefully that's right.

To break down some more mansions. We'll see. Anyway, thank you for watching.

Thank you, folks.

We will see you soon.

Have a fantastic.

Have a great weekend. Bye.

Cheers.