Keith Rabois, Ramp's $13B Valuation, Crypto Reserve, Moon Landing, Packy McCormick and Sheel Mohnot

Today is Monday, March 3rd, and this show starts now. We got a great show for you guys today. We're talking Ramp fundraise. We're talking strategic crypto reserve. We're talking about TSMC potentially investing $100 billion in America. Let's go. Also speaking of America, we landed on the moon again.

We're back. Flat Earthers.

We should have a flat earther call in. Probably not doing too well today.

In shambles. In shambles, absolute shambles.

Also we're talking massive garages. Apparently it's a trend and the Wall.

Street Journal covered it and we just had to cover it.

And we had to cover it. It's. People are building 6,000 square foot garages. 3,000, like four times the size of, you know, average house in LA, Minnesota, built different. We're also doing some call ins today. We got Shield Monot calling in at 1:30, hopefully and Cormick at 12:30 Pacific. And so we'll kick off it, take you through the stories and. Yeah, break it all down.

Break it down, John, Break it down.

Let's kick off with. I gotta adjust my headphones too loud. When I, when I get loud, it's, it's a little bit too much.

We're bringing the energy up. Let's go. Because we got some big news today.

We do, yeah. Ramp reached a new valuation. $13 billion. It's a lot of money.

It's a big number.

And so Eric posts today, Ramp reached a new valuation, $13 billion. We're not Steve Jobs or Wilbur Wright. We don't invent the next iPhone or flying machine. Our job is more modest. Save you time and money. So perhaps you can.

And there's levels to this. They went with the Financial Times for the write ups at this point. Right. This shows a sign of maturity, you know, skipping over the, you know, typical Crunchbase TechCrunch announcement. Very cool to see. And I like that Eric is leading with, by being a little humble here. Right. He's saying we are the platform in which you create the next iPhone. Not calling out that they're the next iPhone. And I think that's, that's what you want out of a financial institution. You don't want them, you know, thinking that they're reinventing the wheel and making it all about them.

Right.

You just want it to sort of run in the background.

Yeah. You can tell he's been listening to a lot of David Senators podcast.

Yep.

Founders podcast. Because he says we got here by taking Charlie Munger's quote to heart. Take a simple idea and take it seriously. And Sandra has literally said that to me on a phone call before. Yeah, about, about, about podcasting. It's a simple idea, but if you take it seriously, it can grow and grow and grow. Our simple idea save every business time and money. In less than six years, we incorporated have saved businesses $2 billion in 20 million hours. Over half in the past 12 months alone. Efficiency isn't flashy, but it builds enduring businesses. Sam Walton cut Walmart supply chain down from five components to three. Henry Ford cut the time to car from 12 hours to 93 minutes. We cut the cost to buy anything from 30 minutes to 30 seconds. Ramp puts lessons of history's greatest entrepreneurs on autopilot. Ask Poshmark who hit free cash flow goals five months early or Andre who's able to focus fully on their mission or notion and Cursor who maintain momentum without sacrificing control. Most companies slow as they grow. That's not happening at Ramp. We're determined it won't happen to you either. As we enter the AI age, finance is going from stock steer assist to self driving expenses that categorize themselves and money that reallocates itself for higher returns. That's an interesting vision.

Yeah, I love going back to this simple idea. I think every founder, usually founders start with a simple idea and then it gets dramatically more complex and then it's a good sign if you can re simplify it down to just like this core. Core idea. And saving every business time and money is a fantastically simple idea that they can build for decades off of that one simple idea.

Right.

So amazing to see. You know, I think this, this round from, from what we know got done last year and Ramp has just kept this ridiculous pace and I expect to see many more announcements like it this year.

Yeah. Also interesting that this is not a new fundraise that goes onto the balance sheet. It's a secondary sale.

Yep.

Essentially. And so the structure here is the five year old company had a new valuation as part of a share sale in which investors including Singaporean sovereign wealth fund GIC US private equity group Stripes and venture capitalists including Josh Kushner's Thrive, Khosla Ventures and General Catalyst bought $150 million worth of employee stock.

Yep.

And so for early employees, they've been working for a long time, they get some liquidity and Ramp gets to reprice the equity which allows them to hire more people, show them that they're making.

Yeah. Notice notably this was AB the 2022.

Mark, which is a milestone 7.65 billion in April of last year.

Yep.

And yeah, I mean, Ramp is, is known for being, I would say, aggressive and high throughput on valuation and marking the company. That's something that is. Can often be very, very difficult to do for companies because it can sometimes mean you're going down. And that's exactly what happened years ago during the kind of the interest rate hike and the failure of SVB. RAMP was at 8.1 billion valuation in 2022, but dropped to a 5.8 billion a year later as higher interest rates hit consumer spending factors that also hit rival Fintech companies such as Stripe and Klarna. Fintech obviously went through volatility given the wild swing in rates and spending across businesses and consumers. What I always thought was super interesting about this was that RIP ripped off the band aid really quickly and there are a lot of companies that didn't reprice their equity and there was always a question of is it a zombie corn? Which is something people were saying, but coming out and saying, hey, yeah, look like the market is down 50%, we're down 30%, we're still growing, we're growing into our valuation. It's actually a very strong sign of strength. And it means that for employees, companies.

That fixate on a headline number and are trying to recruit employees based on that 20, 22, 23 values. Billion really doesn't work well for anyone. Right. It's really difficult.

People only fall for it for so long.

Employees are intelligent, they figure stuff out and they're not going to, you know, they're eventually going to say, yeah, I'm going to go somewhere else. Like my equity is worth a fraction of what it was initially priced at. And, you know, I can go join another company that's priced fairly given their traction. So.

And so they delivered on exactly that. You know, they repriced. So, sure, the employees that got in at 8.1 went down to 5.8. They were like, oh, but at least they had transparency on what that was worth. It wasn't zero, obviously, because there was a round that happened at 5.8 and now it's up and they can kind of reprice and say, okay, this is what this is. This is where we're going. And so congratulations to the RAM team. We're going to have a couple of people call in and talk about where that business is and where it's going.

Yeah. So while Packy join, he's been an early investor in the company and covered their journey from, you know, early, early days till now. And Then we're going to have Sheil on at the end to talk specifically about just broadly the state of fintech because there was a very long, you know, roughly 700 days where it felt like everybody said fintech is dead.

Yeah.

You know, this was like a Zurb trend. These business models only worked when rates were zero. And it's very clearly not the case. So we're excited to have him on and get his perspective about kind of the future of the category and a lot more specifically the stripe Adyen stuff which he covered last week as well. And we covered a bit.

Yeah.

But looking forward to getting his thoughts there. So let's get into the rest of the show.

Cool. Well, speaking of fintech, if you're looking to invest, you should go to public.com investing for those who take it seriously. They have multi asset investing, industry leading yields and they're trusted by millions. And speaking of other investments that you can make that the government might be.

Making the, with your tax dollars, with.

Your tax, presenting you pay your taxes and then, you know, the government, the government gambles with them in crypto. I mean, we might have to put on the steel hat for this one as well. And there might be a silver lining here.

We need the steel helmet, the tinfoil, the tin foil.

We need all to come out today for the story and the story here.

The funny thing is the real takeaway from this is that when Trump plans anything crypto related, something big is going to happen. First time, he obviously launched the Trump coin, got everybody together, got the industry together and said, all right, now I have my own token and you guys are all sidelined because you're here in tuxedos instead of at your computers trading and this time launching the strategic crypto reserve or at least formally announcing it.

Yeah. So the story from the Wall Street Journal is crypto prices jump after Trump announces five tokens for strategic reserve. And so bitcoin, ether, Solana, Ripple, linked XRP and Cardano will be in the, in the stockpile. And so crypto prices surged Sunday after President Trump said he would move forward on a US Crypto strategic reserve that would include bitcoin and ether as well as three smaller and riskier tokens. Lots of fun. And the US and the US would actually be buying these. Such an odd time to announce these things, like most. Yeah, I mean, I guess he, he seems like he always announces things on like the weekend maybe. Yeah, no, because like, yeah, obviously like a lot of companies, they announced their earnings after the market closes. So people have maybe time to process it. It doesn't create like chaos in the markets. Is that why they do that?

Well, it's fascinating really because there's obviously, you know, there's Bitcoin ETF, now you MicroStrategy. There's apps that let you trade those in off hours. Right. But ultimately this sort of traditional financial markets are closed and he's releasing this very market moving news on a Sunday morning, which is, it's interesting to say the least. Also you have to look at the lead up to this, right. His son Eric Trump has been on the timeline pumping world liberty fi pretty much daily. He's telling people to hodl to buy, you know, so, so they're basically, you know, they're, they've, they've learned the crypto game, right?

Yeah, yeah. I, there was an interesting take Pomp obviously like you know, super pro crypto. But he was saying it was funny that like the crypto announcement happened when the market was closed. And so like the traditional, the trad five people could participate. Which is like kind of true. But also a lot of the tried five people can have on chain. Yeah.

Because they have assets that they trade with. Yeah.

They're not completely separate anyway. A US crypto reserve will elevate this critical industry after years of corrupt attacks by the Biden administration, said Trump in a Sunday post on his social media platform Truth Social. I will make sure the US is the crypto capital of the world. Trump said the crypto strategic reserve will also include Solana, XRP and Cardano. Unlike bitcoin, which is the largest and oldest cryptocurrency, these tokens were created more recently and often by smaller teams, making them more susceptible to the wild price swings and other risks. I heard, I think it was naval was saying like, if your crypto has a lobbyist, it's not decentralized. Something like that. Which I think is a very good take. Let's go through some price action. On Sunday afternoon, Bitcoin rose 9%.

That said that the counterpoint to that is that a decentralized organization could decide collectively we should have a lobbying army.

Michael Saylor is like PR for bitcoin, basically. And it's not for any arguably some.

Of the most important pr. Right. Pomp is catalyst for the X audience. Sailors going on CNBC getting normies.

Yeah, it has nothing. It's still decentralized, but it also incentivizes people to do stuff. And that was a big, that was a big push on like the Trump pump. And the idea of like, you know, eventually you know, like there are so many gold bugs in Congress right now, just because over the life of a senator, they accumulate gold. And so they go to stocks and health care stocks and industrial stocks and tech stocks and eventually the assets work their way into our government organizations. And so our, our, our representatives care about these things because they've acquired them. And our next generation of legislators will have crypto assets.

Yeah. And one of the interesting things about this announcement is so it very clearly was priced in pretty effectively because if you went back five years ago and you told a bitcoin maxi the US government is going to be buying bitcoin off their balance sheet, they would have said, oh, we're looking at a million dollars a coin. Right. Like, it just sounded, it sounded like a lot of people believe this would happen, but they assumed that it would come with such a massive, you know, sort of increase in the price.

Totally.

And now so yesterday it popped, significantly, popped around 10% yesterday. But today it's actually down almost seven and a half percent. So it's down 7%. It's back to 87,087, which is crazy because it's basically round, the announcement is almost round trip to.

And it very well, I remember, I remember thinking just a couple of weeks ago, like, like what is the next catalyst for bitcoin moving up? And it would have to be a massive US Strategic national bitcoin stockpile. And I think it also has to be that cascading into every other, every other country saying, we also need this.

Yep.

And so just like there is gold at every Federal Reserve of every country essentially. Like they all stockpile gold.

I don't know if we have any left.

Apparently you got to put on the tinfoil hat.

Put on the tinfoil hat.

Yeah. I'm a believer. I believe it's there, but I don't know. I want to see it.

Yeah. At the very least, I hope hopefully they spray painted bricks.

Ridiculous. So Bitcoin rose 9% from, from 24 hours earlier to about 93,000 than you mentioned it round tripped. What's eth at? Can you look on public.com?

Yeah, I'm pulling it up.

I'm sure it's up 11%.

Oh, so Eric, we got to get Eric Trump pumping eth a little bit harder. Clearly not.

That's hilarious.

Yeah, so the dynamic here is absolutely wild. Like so much of the, so much of the news around World Liberty fight. Eric Trump's project was that they were buying Etherium with size.

Yeah.

Presumably from the presale, but it Also seemed like potentially proceeds from, from Trump coin were being sort of reallocated over there. So I'm pulling it up right now. I'm expecting to see Eric saying hodl. Yeah, he said so he said on February 25 he said, Buy the dips, buy the dips. And then today he says, somebody said, never fade, Eric Trump. And today he says, you're welcome, my friend. Hopefully I made someone's life just a little bit better. Now my advice, hold long term. And Ethereum is down, yeah, 12% today on really, really a devastating blow to the Ethereum community because they've had a rough go at it, becoming a little.

Bit of a punchline.

And yeah, this is right after their conference eth Denver, which is one of the biggest events of the year for them. So tough go. But so let's get some more context.

And then go into the timeline. A one time bitcoin skeptic. Trump embraced crypto last year and made a series of big promises to the industry. Since returning to the White House, he has created a working group on digital assets and pardoned Ross Ulbricht, the founder of Silk Road, an online drug bazaar that used bitcoin as its payment method. Investors and analysts said that one way to build the reserve is for Uncle Sam to hold on to its stash of bitcoin seized from cybercriminals in darknet markets to the US government holds more than 180,000 Bitcoin worth about 18 billion based on current market price.

Yeah, see, that would have been enough, right? We could have just had the US Crypto reserve be assets that were seized from criminals.

Yeah. And it's kind of funny to be like, hey, look like it will effectively be burned.

Yeah.

Like any, any bitcoin that is ever seized going forward. Because we're probably going to be.

It's a way, it's a way, you know, because, because in the past there's been concern that the government has been sitting over the sell button, you know, going to just market sell. And so it would have been a way to potentially find sort of a through line of saying, you know, we believe the government should have some exposure to cryptocurrencies, but we're not going to be using taxpayer dollars to do that. But alas, not what ended up happening.

That's great. Well, let's go to some reactions. We got Nick Carter. We wanted to have him on the show, but he's tied up today. He'll probably be coming on later this week if this is still in the news. If not we'll get him.

The next time there's breaking, there'll be another headline.

I'm sure something will happen.

Trump, Trump Coin number two.

Let me retweet this. Repost. There we go. Today feels like a good day to repost my anti SBR article. That's the strategic Bitcoin reserve. I stand by it, especially in light of the inclusion of eth, sol, ADA and xr. Uh, it's not the job of the government to run an airsots crypto hedge fund. It's not their job to pick winners and losers. The dismay you're seeing at the inclusion of some coins confirms if the government gets interested in crypto, it's not going to be, it's not necessarily going to be good for my bags. Most conservatives and libertarians are suspicious of top down government apportionment of resources in this manner, preferring to let the private sector sort it out. I wasn't a fan of Biden's massive infrastructure spending, which I felt was extremely wasteful. And for that reason I don't see support further inclusion incursion into the private sector by the government, especially not via naked dollar issuance. Typically the US government doesn't really intervene in markets with its monetary tools beyond setting rates. Its role is setting the rules of the road and keeping the system stable, not aggressively deploying government funds into commodities for day trading. And yeah, it is fascinating. This is something that like I feel like it's so pro tech. It's like it really should mark the end of the story of the government being anti tech, anti crypto. And now the government's like so pro crypto.

Yeah.

But the response from at least our corner of X was this is not good.

Yeah. Yeah. Well, it seems like the government is generally pro crypto because it makes a certain part of the voter base happy.

Yep.

The government doesn't seem to be pro crypto and the government acknowledges that it's a legitimate asset class now. And we shouldn't as a country attack it because the technology has real potential and if you create a positive regulatory environment or a fair regulatory environment, it could flourish. Right. And we want that industry to flourish here in the United States. That being said, it does seem to date that the biggest pro crypto moves have not been, you know, the pushback is that there's so many ways that you could argue that they're sort of conflicted moves. Right, right.

Yeah.

And yeah, even, even Sachs was, was facing a lot of blowback yesterday on X just because he said, you know, he came out and Said I sold. He sold his positions in Solana and Bitcoin, Ethereum, all these different things. But you can easily kind of look through and say you're a, you know, major investor that has positions in a bunch of individual crypto companies. Like Bitwise is one. And yeah, he still has a ton.

Of look through exposure.

Yeah, look through exposure, basically. Yeah. And somebody was pointing out, you know, I think this is later in the. But somebody was pointing out that just how convenient it is that Bitwise's top five position in the Bitwise index are the exact assets that are in. And I'll push. And the reason I don't think that's.

A conspiracy at all.

What I would point out there is that they just picked the five biggest tokens by market cap.

Yeah, they're all the same. The top five happen to be the ones that the index built, which happens to be the ones. And that makes perfect sense. It's, it's more. So we're making a tech index and it was like Nvidia Fang, you know, seven. Yeah, mag seven. And then, and then all of a sudden some, some senator owns all, all the Mag 7. And then Trump says the Mag 7 are what we're going to focus on for like chip, you know, incentives. I'd be like, yeah, that makes sense. Like hyperscalers are hypers.

So, so overall, I think the pushback against Sachs on specifically Bitwise is a little bit misguided. Yeah, I agree. But, but overall it's, it's hyper politicized. Right. And yeah, the other thing is that they very clearly did this via the White House. This wasn't something that went through Congress and was supposed to be something that had sort of broad buy in from Washington.

Also, to be, to be fair, did this isn't. They haven't done anything. Yeah, they've just announced a plan to do something.

They were like, Eric's like, dad, we need a pump. We need a quick.

Yeah, no, I don't even think there's a number either yet. Like, it could be we're buying a million dollars. Yeah, it could be we're buying a billion. It could be we're buying a trillion. Like these are all wildly different things. He's just saying, I'm excited about. This is a. Yeah.

And the number is going to be hyper, hyper analyzed because people are. We're also tracking how much dose, how much waste Doge is catching. And so if Doge saves, you know, $500 billion and then we buy, you know, anything less than 500 billion doesn't seem super serious. Right. If they, if the government went and bought $100 billion worth of crypto, it's like, okay, cool. Yeah, but, but anyways, that's going to be, this is going to be, you know, continue to be hyper politicized as everything is today.

Yeah. And so I like this analysis from Joe Wiesenthal over at Bloomberg. Kind of breaks down what it means to build a strategic stockpile. He says conceptually it makes sense that conceptually it makes sense for the government to hold strategic stockpiles of any asset that A, it could presumably have a liability in at some point and B, it can't instantly acquire with money. So for example, oil, especially when we can't produce much here, made sense. Military equipment is like this as well. One could argue that in a war we have bullet denominated liabilities or tank denominated liabilities.

And you can't acquire bullets or tanks out of thin air with money due to the time to ramp up production. So. And then Sayla, we've had on the show before, says strategic bitcoin reserve makes sense for the same reason a strategic gold reserve makes sense. It's a monetary hedge against U.S. doll hegemony, a prime export of the U.S. other assets don't make much sense, I. E. The U.S. does not have a random basket of precious metals. So I think that's, I think that's the right take. I think a lot of people, Max Meyer had some good points along this route. He's like, he wants the government to be focused on making sure the currency of the United States, you know, sort of maintains. Maintains its value, not day trading. Yeah, but as we've seen some presidential day traders, you know, the guy from El Salvador, you know, he pulls up Robinhood or whatever on his phone. If he's smart, he's pulling up public and you know, he's just, you know, basically on a mobile device market buying. Market buying Bitcoin legend from what it. From what I can see. So I mean, we were talking about.

This before with the Javier Malay stuff and it's like, it's great that day trading bitcoin is working for some people and the crazy stuff is working for some of these smaller countries. But like, I need to be convinced a little bit more that this is like, that we are in the same situation as these other countries.

Yeah.

Let's go to Joe Wildsdale.

Yeah, this was, this was a good take. So Joe says taxation is theft. It should be kept to a minimum. It's wrong to steal my Money for grift on the left. It's also wrong to tax me for crypto bro schemes. Efficient defense courts, national parks, which he says should fund themselves, prison, etc. Fine. Cut it out with these schemes, guys. I thought this was the best take. You didn't see a lot of people that were, you know, overly pro Trump in the sort of election cycle actually coming out and pushing back against this. But this is the right take. I think we never discuss politics on the show, as our audience knows, but it's okay to vote for somebody yet disagreeably with, you know, and agree with some of the stuff they do and disagree with other stuff that they do. And if you can't, if you can't manage to do that, then you're not sort of thinking independently. Right. You're just sort of.

And vice versa.

Yeah.

You should, you should be able to say, hey, I don't support the guy generally. But, like, this is one thing that I like. And there are plenty of examples of that. Like the moon.

Yeah. And so, so somebody. And he was quote, tweeting Mayor Suarez who said, yeah, I turned Miami into the crypto capital of Florida. Now we're turning the US into the crypto capital of the world. I generally agree that the US should be the crypto capital of the world.

Yep.

Like 100%. But. But if you actually look at the chart of Miami Coin, hopefully our strategic reserve doesn't follow the same path.

Also, also, like, like making America business friendly to a, like a company like Coinbase that operates a very legitimate crypto exchange and having bitcoin on the balance sheet of the Fed are two completely separate things. One is like, stop sending Wells notices, have more regulatory oversight. Be very clear with Coinbase on what can they list, what can't they list? What's a security, what's not a security, what's a fair launch? All these questions that everyone in the crypto community has, where's the line drawn? And the other is just like, are we pumping?

The price is the chart won't even show for Miami Coin because it's down so horrifically. But it's a good experiment.

The, the steel man on this is that a lot of times when people, when people say, like, oh, the government shouldn't be spending on X, Y or Z, they always assume that the government spending is going to go to zero.

Yeah.

But there is a world where the government buys a bunch of crypto and it 10 x's and they sell it and they make money. And that's actually what happened during the, during the housing bailout, like, everyone was like, why are the bankers getting a bailout? Like, they're wasting my taxpayer money. Well, those loans got repaid back with interest. And so it's kind of like a narrative violation. And, like, you might not like it because you didn't punish the people as much as possible because, yeah, some of the people that were involved in the banks, they did get bailed out.

Yeah.

But it didn't cost the taxpayer anything. In fact, it made the taxpayer money. So you paid less taxes. It's.

The disappointing thing here is that if. If somebody was already not a fan of Trump.

Yep.

Nothing about the last 24 hours would have changed their mind at all. Right. Like, the dominant narrative on the left was that Trump is a grifter. You know, he's using his. The office to just sort of accumulate personal wealth and all this stuff. And now even the people for him.

Are like, stop it with the crypto.

Crypto, bro. Grift. So I posted yesterday a Nathan picture of Nathan for you. Fantastic show. If you need some business advice. And I said the plan, pay off the national debt by cutting government waste and investing the savings into high risk cryptocurrencies. I can't even finish it because it's so funny. It's such a. Such a ridiculous plan. But.

Well, let's go through Trump's crypto schemes according to how crazy they are.

Yes. In chronological order, Nick went ahead and did the heavy lifting here. He ranked Trump's six crypto projects. And so he starts off Trump NFT, 3 out of 10 low stakes was kind of cool at the time, and started off Ryan Selkis's Mar A Lago arc, which I think was kind of an important moment.

I have a hilarious story about this. So I know someone who bought this nft and they said that it was actually one of, like, the most valuable NFT things you could possibly get because it got you dinner at Mar A Lago.

Really?

Yeah. And the thing was, is that the people that bought it. So, like.

But it only gets you that one time, right?

Yeah, one time. But this is the thing. So. So it's sold to everyone. So a lot of the people that bought were just, like, fans of Trump, but they weren't like, hardcore crypto people. Yeah. So they went and bought it, but then in order to actually redeem the dinner and do the NFT stuff, you actually had to have, like, a wallet that you could transfer. And it was, like, somewhat technical.

Yeah.

And so you take the universe of, like, Trump supporters who are down to spend a bunch of money like supporting him and like buying his NFT. And you narrow that down to like 1% of people that are both Trump supporters are like down with him, but also like capable of running the wallet in the way that they need you to do to cash in the NFT to go to the dinner. And so like the person I know that, that, that bought the NFT went and like the dinner was like empty. And so then he was basically able to just pitch Trump like his exact vision for crypto. Yeah. And was like, this is exactly how it. And then, and then, and then Trump was like, wait, the, My. My biggest crypto fans all believe X, Y and Z. Yeah. When like clearly that's not true.

Yeah.

But it was able to.

Yeah. I'm surprised that more projects didn't realize that by it because it sounds extremely far fetched that you bought an NFT for 500 bucks and you got a dinner with the President and you could talk to him about crypto policy. But that was probably the best lobbying dol. You know?

Exactly.

Spend.

And so like, yeah, like, like the expectation was like you get, you get a dinner, you get to go into a massive ballroom and maybe Trump comes around and like shakes your hand. Instead, it's like three people. Yeah, it's like the highest leverage lobbying you could possibly do if you. But imagine the combination of things. You have to be pro Trump in crypto and also like enough of a degen to think that buying an NFT is a good idea. So you can't be like the highbrow crypto person who's like, actually like, bitcoin is just the thing. I'm a bitcoin purist, I would never buy an nft. But then you also have to be willing. Like it's like all these weird things have to.

One thing you have to give Trump's crypto team credit for is they always position these things as collectibles. Like very clearly they were collect Trump cards. Yeah, they were, they were trading card NFT.

Okay.

They weren't NFTs. Right. And with, with Trump Coin, it was Trump memes. You were just buying a meme. You could buy a million of them if you wanted.

You could buy a strategic meme reserve for sure. That's, that's obvious.

Okay, so continuing through this. So we have World Liberty Phi. Seven out of ten.

We got through one.

Yeah. Seven out of ten lows. Kind of an insane thing to do ahead of the election. Which, which you know, this started in.

Nick was very against it. He was like telling them, like, how can we tell them not to do this?

Started as vaporware. Now an extremely questionable slush fund thing that Justin's son owns. A lot of bad vibes on this. And so they were basically doing it public, sort of like equity financing type thing. But you just got tokens or something. And now, now they just have this, you know, basically hedge fund Trump coin. He says nine out of 10, completely unhinged. Just a crazy move. Overall, Melania Coin, he's. He's actually pretty harsh here. He says 6 out of 10. Kind of sad at this point, but it was the beginning of the end for Meme coins and introduced us to Kelsier, which was behind the Malay project, which was funny. So there are positive. And then he said crypto reserve featuring Cardano and XRP. 10 out of 10. I didn't even know what to say about this. A government bailout for your buddy who gets Crypto news from TikTok. Silver lining. @ least the Maxis are upset. Sad how long this list is. So I think, to be honest, I think Nick had the best takes across the board over the last 24 hours.

We should get him on tomorrow, even if it's slow news.

So we got another post from Jack Raines over at slow. He says this is a great take. And it's a post from David Sachs in 2021 that says who's now our crypto czar. He says the problem with government as a capital allocator is that the money goes to special interests who have the ability to lobby but not to innovate. And it has to come from somewhere. Usually innovators haven't built up influence yet. So anyways, and good, good, good one to surface. Sam Lesson, another crypto project guy and GP over slow says lol. So anyways, tough one again, David Sachs. You have to imagine if, if I had to. If David Sachs could say what he actually thought.

Yeah.

I would say that maybe he thinks that there should be a bitcoin reserve in the same way that there's a gold reserve.

Yep.

I don't think that if he could have made this policy himself that he would have just made it the top five projects by market cap.

Yeah, he does. He is in a weird situation. And again, like, we have no idea how much he's actually shaping policy.

Yeah, he is.

He is the crypto czar. Yeah, but what does that really mean?

Well, he's also the crypto and AI czar.

Yeah.

And arguably AI is probably a lot more important for him to be focused on.

Yeah.

But to date, you know, but when.

When anything goes wrong, he's going to take the blame.

Yeah. So I remember Saturday night, Trump Coin gets launched and I'm thinking to myself, it's very possible that Sachs didn't, didn't know this was happening.

Totally.

Right. And now he's in a position where he has to defend.

Yeah.

You know, defend the actions and make up some, you know, he kind of has to say something about it. I don't remember what he actually would have shared, but he's definitely along for the ride, right?

Yeah, he, he. Yeah. I mean, clearly anytime someone, anytime the government does anything like iffy with crypto, he's going to take like the brunt of the attack.

Yeah.

Effectively. Even if he was not in the room when it happened. But he has been pretty good. But good on comms like his, his, his. He very quickly anticipated people are going to think I'm pumping my own bags. Let me make it clear that I did sell all of my personal holdings. I might have some look through exposure, but that's a separate thing. I'm not actively managing any, any positions here. And most importantly, it's not like I went, I'm not front running this. I'm not like egregiously insider trading this. And like the bar so low that I think a lot of people look at it and they're like, yeah, okay, like, at least you, at least you're not trading aggressively.

Got alongside who we've had on the show before. Takes a screenshot of Truth Social. Donald Trump had to add a clarification what happened here. So basically he came out and initially just said the crypto reserve featuring Solana, Cardano and xrp. And then he had to follow it up. He had to follow it up and say, and obviously Bitcoin and Ethereum as, as other valuable cryptocurrencies will be at the heart of the reserve. I also love Bitcoin and Ethereum. So coming out and just saying the meme, Coin Network, Cardano and XRP are.

I know, I do, I do. Genuinely. I think the team behind Solana is fairly like legitimate. I did totally the whole thing. I think they're building cool technology genuinely.

Bitcoin is digital gold. Solana is payment rails for the greatest casino in history.

Yes.

And with the native sort of like poker chip. Right. Like it makes sense. And then card, and then Cardano and.

Xrp chip is like the immutable instrument. It's like the fundamental unit of value on Solana is poker Microchip.

But, but Cardano and XRP are, you know, people were joking. Like this is huge for Uber drivers.

Because it's like the fake one, right?

Yeah. Anytime. Anytime somebody that's outside of tech asks me like, oh, what do you think about crypto? They're always like, yeah. I'm like, oh, like blah, blah, blah. Yeah. Like I have Bitcoin and Cardano.

Cardano.

And they're like. And the funny thing is is Cardano and xrp.

Yeah.

Like one of the reasons that you could make the argument that you should put them in the strategic reserve is they sort of just like generally trade based on Bitcoin too. So like they're all sort of like fluctuating at different rates, but overall fantastic and then hilarious. Yeah. People were trying to put Sachs in the truce zone over Isaac Saul says that's a pretty weak dodge, David, you know, calling out that the conflict of interest here. And they say first Sachs's firm Kraft Ventures has been invested in a startup called bitwise since 2017. David Sacks was a lead investor. Right now Bitwise is celebrating. So the CEO of Bitwise came out the top five holdings of the Bitwise 10 crypto index fund. Because the main crypto coins going. The best way to out yourself is not understanding crypto is to call them crypto coins.

That's hilarious.

Not ironically. Anyway, so the main crypto coins going the crypto strategic reserve just so happen to match Bitwise's top five crypto holdings. And the reason for this is that the tokens going in the crypto reserve are just the largest market cap. Market cap.

Yeah. Except for Binance Coin which is, which didn't make it in. But that's like the Chinese.

Yeah, right, right, right.

Which makes sense.

Anyway, so, so we talked about this.

It's not crazy. Also there's a question about like, you know. Yes. So Sachs invested through Kraft. I don't know if Sachs is stepping back from direct control over Kraft over the czar. Ship it. He could be.

Yeah. I don't have an obvious. But I doubt he has a board seat.

Like that doesn't mean that he also invested in the, in the index fund. And yeah, there's just like there's like seven layers of like conflict here that where it doesn't seem like that bad. But also it's not great. But also it's like how could you ever find someone credible at all in to advise the government on crypto who had never invested in crypto? Like that's basically impossible. Right?

Well, yeah. And to Be honest the way. So Sachs is very good at the Internet. Right. He has one of the biggest podcasts in the world. He's got a hyper engaged X following. If he was running point on the strategic reserve announcement, it wouldn't have gone out like, hey, we're putting Cardano, XRP and Solana in the reserve. Oh, and also we're doing this. It would have just been. So clearly he's not actually running point on anything or has any impact on sort of the comms around this stuff. Right. That feels very obvious. We have another post here from Joe. He says even prior to today, there are a lot of professional people in crypto who have been denigrating coins like XRP and ADA for a long time. And yet they're still here, largely riding the same beta and performing not much differently from Solana and eth. Why is that? He says all the big defi stuff is on Salon and ETH. Most of the NFTs you hear about are on Salon and Ethan. You would intuitively think that Salon and ETH would have built up some gigantic market cap over others like ADA and xrp. And yet.

And Laura Shin has a take.

Yeah, it's a good point.

It's because their total supply is many billions. 45 billion for ADA and 100 billion for XRP. That gives them an inflated market cap. Even if you limit it to the circulating supply of 36 or 58 billion respectively, it's still many, many multiples of the circulating supply. Yeah. Other side of the coin is that they benefit from small unit prices. Someone with a limited crypto allocation can feel like they're buying a lot of coins.

It still still doesn't fully explain it.

It's ridiculous. But like these psychology things are real. I mean, like even like Warren Buffett has to split shares. I mean, at a certain point.

Yeah.

I mean you can't buy Berkshire Hathaway Class A because it's like 250k a share.

Well, there was a while where you couldn't buy fractionalized shares very easily too, which is a big factor. Yeah, that never was a thing on crypto. We have a post from fat man. He said the whale. So. So on Saturday night there was, there was a bunch of hubbub on X because some, you know, all this is happening on chain. This, this whale comes on and makes a. Does a 50x long on Ethereum and maybe one of the other positions using only $4 million in capital to create a $200 million position as the strategic reserve was announced on, on Sunday they went up, I think about 6 million. It says 5 million here. Coincidentally, perfectly timing Trump's true social pose confirming United States Crypto Reserve. So obviously some insider action here. Who knows who it was, but it's hard to say. Right, because these assets haven't been explicitly sort of designated as securities, sort of a gray area, but at the same time, sort of insider trading. Collusion is broadly illegal and you would have to hope that this kind of thing got cracked down on because it's some serious size being thrown around.

Bad luck. Very, very bad luck.

Yeah. And for what it's worth, that guy Nate Chastain went to prison. He's in prison today for doing the same type of activity on OpenSea. He was the product manager at OpenSea who was involved in the decision making around what NFTs got featured on the homepage. And so he would just buy them, they would pop, he would sell them.

And he went to jail for that.

He went to jail. He was sitting in jail, I think it was, at least for a few year.

Yeah. I mean the question of like, of like, is this security or not, blah, blah, blah. It's like there's just something clearly immoral about having an edge on anything that has a financial asset wrapped around it. And so I don't care if it's a monkey picture or a decentralized cryptocurrency or a stock, like you clearly have an edge, you're trading on it, you're stealing money from people.

Like, so he's actually out of prison now. He only had to go in for three months and then three years of supervised release. So they were trying to make an example out of him. But overall I think this is enough of a precedent, enough of a precedent to say whoever was, you know, trading on insider info ahead of the strategic reserve announcement, probably it's kind of crazy too that they got a 2x in, in, you know, 24 hours. They had to put it, you're less than a 2x. Right.

I mean 50x long is pretty crazy. I mean like, but, but the issue is, speaks to the lack of volatility. It's a very low volatility asset. Right. Like, like I feel like for something as monumental as like the government is going to be stockpiling this asset, like yeah, you should not need to go so long just to double your money. Like I feel like a 50x long, like just like an Nvidia earn a slight Nvidia earnings beat is enough to do this. But Ethereum's pretty sticky.

Yeah.

And Then there's a funny post here. If he was really an insider, he would have longed anything other than Ethan btc though let's be honest, he's of course everything else.

No, this is a good response. He says the original poster says, I don't know if it was an insider or not, but it's possible for an insider to know the tweet is coming, but not know the exact content of the tweet. Which is again, good.

Hey, this is going to happen. I mean the rumor was index months.

Ago, the original way to index the crypto market. Which is why crypto indexes didn't become super popular. You could just buy the few biggest coins by market cap basically have an index.

Yeah, it is interesting also when I see this, I want to know like, okay, yes, $4 million, 50x long. That seems like a lot. But does this type of trade happen every single day? Because in that case, maybe this isn't entire trading. Maybe there's just one random person who's doing this every day and then something big happens and then you see it pop.

You know, this was out of the ordinary. It also is funded by a wallet that was associated with phishing.

Okay.

So who knows what's going on there? We can cap it off. We have a post here from Paki who's joining in about an hour. He says not to get all political, but Cardano crying emojis. And then another post from Alex.

I actually don't understand Cardano that well because wasn't the guy like one of the co founders of Ethereum? Like, is Cardano not a serious technical project or because it hasn't been like hacked or anything? Right? Like. Like it works.

I think, I think Cardano and XRP are two, two blockchains.

I know that they're not taking seriously.

But I super early and they were, they were ICOs that, that never delivered on from a.

From a product perspective or adoption perspective.

Adoption perspective.

The price is really the only.

It's one of those things like Solana came about, they were like, we're going to build a really fast blockchain. We're going to build this amazing developer ecosystem on it. And then they basically did exactly kind of did it right. And one of the things is payment.

Rails for the global casino. Yeah, that's the sound bite.

And yeah, overall it makes sense that you know, in 2022, every other week you'd have a new L1 blockchain and then it was a new L2 blockchain. And what we're seeing now is that it seems like developer and investor activity have sort of focused in on Solana and, you know, it makes sense. Right. There's no reason that there should be 100 different L1s. Anyways, last post for this one we have from Atlas at Creatine Cycle. He says American strategic scam and GAM gambling reserve with the. With the bald eagle.

I was so inspired by that.

Yeah, you were inspired. We got a immediately ripped. I'm going to pull up John's post. He says, you want to read it out?

Say now that we have a strategic crypto gambling reserve, the next obvious step is to introduce universal basic parlay. Every Friday, Uncle Sam should send $5 to every citizen's DraftKings account to give them a little thrill going into the weekend.

Fantastic.

Obviously, I'm very anti gambling.

We got to get that into Saks here. That's next.

Yeah, I mean, there is something to it. Just giving someone a little. Hey, there's a chance. It's like the government already runs casinos or like the lottery and they give you little stimulus. The stimulus is giving everyone the same amount of money. Right. And so this is a version of that, but instead of giving everyone $1,000 for the COVID checks, the Trump checks. Remember that?

Yeah.

What was it? A thousand bucks? Something like that?

Something like that. I don't know.

I don't think I qualified. I don't think I got it. But I think everyone got like a thousand bucks and then they went and bought sneakers and Bitcoin and GameStop stock instead of that. Cut out the middleman. Instead of giving everyone the thousand dollars and then they go gamble it.

Yeah.

Just give them a lottery ticket.

Yep.

And so everyone gets it. And it's like, hey, we need. We have a trillion dollars in stimulus. We're going to make a thousand billionaires. So every American we know you're suffering. There's a one in a million chance they become a billionaire.

Incredible. The American dream.

The American dream. You know?

The American dream.

Okay, we got Keith coming on 15 minutes.

Amazing.

We got Packy coming on in third in 45 minutes, and we got Shield in an hour. So let's keep moving on. Let's keep talking. We got 15 minutes to run through.

You know, what's something else that people would take?

Strategic stockpile of.

No, what's. Yeah, strategic. What's. What's another thing that the US Government should be getting a strategic stockpile of?

Holy Trinity watches.

Holy Trinity. And, you know, I want to. I would be more comfortable as a citizen if I knew that uncle Sam had 100,000 day dates.

Yes, yes.

Every.

Just Rolex is for everyone.

Like, I would like to know that the US Government.

Yeah.

Could at any point decimate the watch market.

Yeah. By flooding the market.

Yeah. And if you really. So imagine, let's, let's say if Trump really wanted to build goodwill.

Yeah. Yeah.

He would buy up every single watch on the market and then at the end of his term market, sell them all, drop the price. And then every American could buy a Daytona or everybody would be walking around, you know, in style.

I mean, you know, you know, Fort Knox is filled with gold. Let's take that gold, turn it into Cartier tanks, turn it into presidentials. Turn it into, turn it into, you know, I don't know what's another good gold watch? A Santos.

Yeah.

Let's. Let's take our gold, ship it to Cartier every year and just be. Yeah, yeah, we'd like, we'd like 1 million Cartier.

Santos wants to avoid tariffs.

Yeah.

Use.

Use the Fort Knox gold to make.

More watches and then give us a cut of the net revenue on the final product. We want some of your margins.

And of course, the US Government should order all of their watches on bezel. You can shop 22,000 luxury watches fully authenticated in house, which would be important.

Authentication team is going to be busy.

Yeah.

Maybe we should send the bezel authentication team to Fort Knox. They're authenticating gold watches. Why not have them authenticate gold bars?

Do the bars, too?

Do the bars too? Yeah.

Are these bricks that were spray painted with yellow?

Yes, yes.

Chrome spray paint.

Yeah. If they can, if they can tell, is this watch just, you know, gold plated versus gold? Have you seen that viral post that's like, like, oh, there's these fake jewelry companies that sell on TikTok and no one can tell the difference because they gold plate them instead of making them solid gold. And Ryan Peterson was like, didn't Archimedes figure this out 2000 years ago? You literally just have to figure out the density. So you just put it in the tub and look at the water displacement. And then you weigh it on a scale which has existed for thousands of years. And everyone on TikTok is like, it's impossible. We can't figure out if it's gold plated or not without destroying it. It's impossible. It's so funny to me that he just, like, he's just dunked with like, the Archimedes thing. We've actually been able to solve this problem for thousands of Years but misinformation continues to be, continues to be the problem.

Anyway, information is back. Yeah, well we have some real information for you.

Real information.

Trump and chip maker TSMC expected to announce $100 billion investment in the U.S. it is the latest effort by Trump to persuade companies to make big investments in the U.S. what do you got, John?

It's exciting. I mean the, the whole tune and the whole, the whole just, I don't know, vibes around the chip ban and how we are playing the, the semiconductor strategy in the era of AI has changed pretty radically. Like there was definitely a thought in post chat GPT post doomers having a serious say and being taken pretty seriously. There was definitely a vibe of like, like yeah, like this is going to be a weapon. This is going to be something that's very valuable. We need to corner this resource. This is maybe like nuclear weapons. We should maybe lock it down. We should make sure that it's not just you know, being stolen left and right. And, and, and also we should restrict the chips that allow these models to run at scale. And then you know, flash forward a few years. We've done the chip band. Nvidia was able to restrict the memory bandwidth on the, on the, the H80 instead of the A1H A100. They basically created a custom one that complied with the chip bands. China bought a bunch of those Deepseek team optimizes winds up building a frontier model.

No, and we've talked about this before. We don't think that Nvidia has gotten enough sort of flak for sort of working around the chip band. But at the same time, so many major US institutions have so much such large positions in Nvidia. You know there's actually a good, you know, you brought this up earlier. Ben Thompson has made a good argument for we actually should. The chip ban is probably bad. We want China to be dependent on, you know, TSMC chips and not to build their own sort of alternatives to it. So that they sort of worry about, you know, invading Taiwan for that reason. And Ben Thompson lives in Taiwan, obviously doesn't, you know, wants to continue living there. I don't think he would be too welcome after a Chinese invasion given his, you know, long history of critiquing.

Yeah, and so China is rebuilding the TSMC supply chain right now they have SMIC and SME, which are the TSMC and ASML copycats, but they are potentially a decade behind. It's very hard to tell how close they are to the frontier. I mean even Intel AMD are not near the frontier. And American companies have been struggling to catch up, which is why we, you know, both, every administration, every tech leader has been like, let's get TSMC to come here. Can't we just, you know, give all those people green cards or gold cards? We didn't really talk about the gold card thing, but I think people would happily pay 5 million per person to bring over the TSMC experts and manufacturer.

The challenge there though is you have Taiwanese people who love Taiwan and have.

Yeah, they don't just want to leave their country because there's like slight tensions between two countries that aren't two countries that are just rivals. Like, yeah, we're not enemies with China. We're just rivals. Like, we're not allies, but we're in the World Trade Organization together, we're in the UN together. Like we are not at war.

Sure, sure, that's a bigger debate, but we are not geopolitical experts.

Yeah, we're in like an economic tiff, but that's about it.

And I don't know, no one's killing each other. I mean, ask the fish off the coast of Argentina.

Okay, okay.

No, but here. You know what I like about this announcement, hopefully it goes through, is that this sort of America first investment executive order, this is the kind of thing that makes that EO real.

And so 100 billion in chip manufacturing plants over the next four years.

In a short timeline too. Yeah, it's not XAI speed, but certainly pretty fast.

And there was news that TSMC was making good progress at their Arizona plant. I don't know if it's in this article, but yeah, that should give them.

Confidence in making a much larger investment.

Yep. To the US Advanced chip packaging is particularly critical for AI related chips as it enhances performance by integrating multiple semiconductor components, reducing size, improving power efficiency, and ensuring faster data transfer. Key applications for key factors for AI applications. The US has supported TSMC's growth through 2022's Chips act, which earmarked tens of billions of dollars in grants to domestic chip manufacturing. And this is the other criticism that Ben Thompson has always lobbied against. The CHIPS act is that it's grants, it's hey, we'll just give you money to just go try and build these. Instead of, instead of being demand side, it's supply side. So much better. And what's, hey, we want to create actually strategic reserve. Like, like the US is a buyer of these chips at this price. If you can domestically manufacture a chip that is competitive with a Nvidia H100 or H800AT. At scale in America, boom. We'll buy it, we'll build the data center, and then we'll be the leaser. And then maybe we'll just sell it immediately. But you know that the demand's there.

Yep.

And that's. And that's enough for the free market to go work and figure everything else out as opposed to, oh, there's this grant that's going out. And so the grant got parceled up, and now all of a sudden you have to do it. You can't just do it in America. You have to do it in Arizona because the Arizona guy gave more of the grant. And like, this is the taxes and this, like, all of a sudden it becomes like the government is now managing the project fully instead of just being like, hey, we're just a buyer. We're just a buyer.

Yeah. And so one of the. So. So going back to one of your earlier points. So tsmc, the world's largest contract shipment maker, set down routes in Arizona in 2020 when it said it would build a chip factory there for $12 billion. Its ambitions for the site have expanded rapidly since with two more factories on the same site and a total investment of 65 billion. The company's first factory began mass production late last year. So we'd love to see them, you know, make a significant $12 billion investment and then. And then commit to, you know, expanding that site as well as, you know, committing additional capital. Hopefully this announcement isn't final yet, but have to imagine it'll be sort of set in stone later this week.

That's great. Yeah, Love to see it. And, yeah, I mean, the, the, the, the, the TSMC stuff, it is, it is, it is somewhat interesting how AI has made everything. It's democratized learning in the sense that, like, you know, like it just codes for you. You can also learn pretty much anything. Any history. You can just go and talk to it and it's your teacher. Except for making the chips that make AI possible, all of that knowledge is just locked away. Yeah. You have to imagine in these. What do they call them, like mentor, mentee, artisan. They don't open source any of the papers, so there's nothing to build on. And so deep research, if you actually ask it how to run an ASML machine and get good yields, it will come up very, very short.

Yeah. The interesting thing is it seems that the conversations around intel and potentially Elon getting involved intel have gone silent. I haven't heard much from that front.

Yeah, all the airplanes were like circling and we'll see where it goes.

Yeah.

Anyway, let's move on to the moon.

Let's talk about the moon.

What a shot. The first lunar sunrise and everybody by a commercial lunar land.

We tried our best to get a, you know, flat earther on the show today. Somebody a moon denier. But we're squarely in the moon should be a state category here, which is why we're happy to see. Yeah, an American private company is landing on the moon. I really with NASA.

I really want to know the moon. Yeah, the moon landing denier. Like they have to deny this too. And then they have to deny the next one that's going to happen. And then SpaceX and then Elon.

It's just like, well, the moon was a bit of a lost art for a while, right.

It was, it was, it was easy to be a denier when it was like, oh, that happened 30 years ago. It's great. And now it's like, okay, we're going to be up there all the time. And so huge, huge news. We have the, we have the breakdown here. Blue Ghost, which is a private US spacecraft landed on the moon after its successful lunar touchdown. Firefly Aerospace is Blue Ghost mission could soon be joined on the moon by two more commercial spacecraft. And we have two minutes to rip through this before Keith, I think will be hopping on.

Yeah, we just have to call out that Firefly Aerospace's comms are not where they should be. Right.

Oh, good point.

The fact that nobody really knew this was kind of happening until they were basically on the moon.

Yeah.

And Austin's calling out a private company just flew to the moon. I didn't hear about it until now.

Yeah, it is hilarious. Anyone else who would do this would be like, like seven days until we land on the moon. Five days until we buy merch. Here's a documentary about it. Here's a video about it. They just went and did it. It's amazing.

I mean, which is also cool.

It's cool. Yeah. I mean they were clearly rare in deep tech. What do they call it? Monk mode. Monk mode, something.

Yeah.

They were just focused on themselves. After 45, after 45 days in space and a pulse pounding semi autonomous hour long descent to its landing site at 3:00am Eastern Standard Time. The boxy car sized spacecrafts, four foot tipped legs crunched into the surface of Mare Chrisium, a vast and ancient impact basin filled with frozen lava on the moon's northeastern, northeastern near side. This marks the second time the US has soft landed on the moon since the crude Apollo 17 mission of 1972. The first occurred just more than a year ago when another robotic commercial mission, the Odysseus lander from the company Intuitive Machines, made Moonfall lopsided but intact.

How do we not know about Intuitive Machines either? So space companies, please reach out to LULU and get your act together.

That is so. Yeah, that is truly. Stuff's just going out there.

Yeah. The fact that who knows what we were talking about when Intuitive Machines went to the moon. But.

Yeah, I want to know more of this. Maybe it's because it's not launching on SpaceX.

Yeah, you would think. How did they.

I think they went. It says it's a suite of 10 experiments provided by NASA as part of the space agency's Commercial Lunar Payload Services CLPS Public Private Partnership. So NASA's effort to save costs by enlisting more than a dozen US firms to ferry cargo tied to the US Space Agency's ambitious Artemis program. I honestly don't know. I honestly.

I mean, an Elon critic might say that Elon is intentionally sort of look resilience.

Also. Also called Hakuto, Our mission launched to the moon alongside Blue Ghost on a SpaceX Falcon 9 rocket in mid January. But unlike other landers.

Okay, so I'm surprised that Elon wasn't pumping this harder. But he's, he's been a busy. He's been busy.

He has been busy. There's been a lot going on anyway. One of these inward looking instruments dubbed Lister, is a drill capable of reaching a record setting 3 meters. Belief beneath the lunar surface to measure heat flowing up from within. Deep enough to give scientists a better idea of how exactly the Moon cooled from a ball of molten rock to the cold inert world we know today. Another called the Lunar Magneto telluric sounder LMS will place electrodes across a roughly 700 square meter swath of terrain. Its measurements of subtle electric and magnetic currents coursing through the moon can probe more than 1,000 kilometers into the interior, 2/3 of the way to the lunar center. That's crazy wild.

We got Keith in the waiting room.

Oh yeah, that's perfect.

You have to imagine Blue Ghost was running on ramp to, you know, make it to the moon.

Undoubtedly you can't, you can't get to the moon if you're taking 45 days to close your books every month. It's impossible. What do you think, Keith?

Is it possible the future's on ramp. So all the companies that want to create the future hopefully are saving time and money on Ramp.

Yes, Yes, I love it. Can you give us the update? What's going on with Ramp? They seem to be on a tear. Valuations never been higher.

Actually, I would push back and say take a, take a victory lap. I know the job's not done. Eric has been very clear about that. But I feel like you can take a little bit of a victory lap and probably more, more this year to come, given the momentum.

Well, the amazing thing about RAMP is the value proposition has been clear from the beginning. We're going to save you time, we're going to save you money. And now there's empirical evidence across any type of company. We can show that 5% this, 10% that. So it's very obvious. And the CFO world is one of the most archaic worlds parts of any business. Even the most cutting edge organizations typically have a very archaic, call it analog CFO function. And Ramp has the vision of we're going to digitalize and bring the CFO function and all the finance into the modern age and use the same tools, same techniques, same data, Same software, same SaaS, tools that everybody else in your organization uses. And that's why it's such an exciting vision like the valuation. The valuation is somewhat art, not science. But the reason why investors all across the globe are ecstatic about not staying Ramp at any point is because we have this vision of changing and transforming the CFO suite. And every company has this broken engine, has an old engine from the 1800s or 1900s. And we're going to bring the engine of finance into the 22nd century, 1st to 21st century. I'll probably bring us into the 22nd century with ramp too. So that's why everybody's excited. The thing that's special about the company though in the short term is usually at this level of scale, companies slow down, the product velocity slows down, the quality of talent decreases. We have a reversion to the mean, so to speak. And Ramp, if anything, is firing on all cylinders. The product velocity is increasing. The quality and insights of the products in the team are improving. The intern classes for the last two years are by far the best intern classes anywhere in the globe. So that's the future. And so that's why this round is very exciting, because it's a prediction for the future based upon a lot of savvy people who get access to all the best companies, that ramp still has the highest slope, which is, you know, a plan or metaphor.

Do you think that's because Eric and Kareem are second time founders like can you break them down as founders and like, what makes them able to stay on the like, just insane cadence going into year six, going into year ten? Like, how do they have so much energy?

Great question. I wish, I wish I knew the answer because I would love to invest in more.

If you can come up with a.

Formula or predict a formula, that's great. But having worked with them now for over five years, I think there's a couple ingredients. One subtle ingredient is Eric has amazing marketing instincts and you really can't train us. The best CEOs are the chief marketing officer for the company. And, you know, Eric entered originally a space that was, quote, unquote crowded. There were large incumbents, there were other funded startups, and we were able to cut through the clutter immediately. And he deserves the credit for being able to clarify succinctly, powerfully and communicate the value proposition of Ramp and then reinvent that every year or two to make it broader, more relevant, more impressive. Actually. Korean is definitely setting the engineering, both tempo and quality bar and has been from the beginning. And I think the combination is really interesting. And maybe a global point is, if you look at some of the other heroic companies in people's portfolios, let's say stripe, you have two brothers, you're getting two executives for one. I think Ramp, there's like, you're getting two CEOs for one. And so I think at other amazing companies, that incredible synergy between two incredibly talented people where you're always on the same page and you really reinforce each other is very rare. And so if I can find two other founders that are that much in sync, that might be the reason to invest, actually.

Yeah. What are you seeing for like, young Gen Z founders? Like what? What? Like there's this narrative, like, oh, Gen Z hasn't produced, there's Zuck yet. Like, what's your, what's your take on that? And what would be some advice for, you know, the younger entrepreneurs who are coming in, maybe deciding between, like, hey, I build a ChatGPT wrapper, make some money. Maybe it's not a VC backable company, but it gets me paid versus let me take a big shot at something massive. How do you counsel people these days?

I don't think there's a formula that works for building an iconic company. Like, as you pointed out, Zuckerberg is his first company. Eric and Cream did build a company, did sell a company. So I don't think there's a one size fits all formula. I think it really comes down to, do you Have a vision of what the world needs and do you have a strategic advantage in your own traits, your own personal superpowers that maps to that problem set? And if you have one when you're 19 years old or 20 years old or 21 years old, it might be a really good idea to proceed. If you don't have that combination of a vision and your own superpowers, then learning, building, working with other talented people might be a really good sort of formula. For those of you who are sports fans. You know, there's this epic debate constant in football about you draft a rookie quarterback in the first round. Do you start that quarterback and do they learn, you know, trial by trial, or do you sort of sit them on the bench for a year or two, have them carry the clipboard around occasionally, you know, enter a game that's, you know, over, so to speak. And I've studied this actually empirically and it's really interesting. The people that there are hall of Fame quarterbacks of both, both sort of backgrounds, career progressions, the career progressions of those who start right away, typically the first season, the performance of, of the quarterback is miserable. It's the worst year of their career. Almost without fail, interception, touchdown ratio. As a specific illustration, the people who sit on the bench though, for two or three years, put aside the opportunity costs there when they start. They don't have an upside down intercept to touchdown ratio. So they do learn things. And so it depends upon the quality of the team anyway. I think it's most useful most of the time for founders to work in an outstanding organization for a year or two before starting their own company. You get a feel for a taste of what great is like, what excellent, really excellence, really excellence, quality, excellence in driving an organization forward. And I think there isn't, there isn't a great substitute for that. But if you're really ready to go, there are people who learn better by being told, you know, I'm throwing in the pool, learn to swim.

I love it.

Yeah. Question I have is, you know, you obviously noted earlier that ramp was a, already a pretty competitive category. People thought that it was not. You know, a lot of people had made a bet and we're kind of ready to just watch the category play out. Do you see categories today that are like fintech in 2020, when you made the, what I believe was your first time investing in ramp, that are ripe for a team to come in and take this sort of new approach, kind of potentially invert the value prop in the way that ramp did have you identified anything there or is there kind of categories that you would like to invest in?

Well, I was fortunate it was in 2019. I had a fair amount of expertise in the space and I'd come to the conclusion that there's massive opportunity in replacing Amazon Business Card, let alone this bigger vision of digitalizing the CFO's world. But the people that were funding other operations, those founders and teams were missing some key ingredients and were kind of naive about some stuff underwriting specifically. But there's other points. So actually unusual for me. I was proactively trying to find high quality founders that were interested in this problem step and then Delhi unfortunately intercepted Kareem playing a video game, having listened to me, probably annoyed by me pontificating every day that we need to find people to kind of compete with Brax or Amex and blah blah blah, Jibby and all this stuff. And then he's like, he actually walked into my office. I was in shock. He said, I think I found two founders. I was like really? But he turns out he did. We had actually been like, like pitching other founders and trying to recruit people to do this. So I don't usually do this, but I have a lot of expertise in the area so I'm not usually proactive about trying to find investment opportunities. And then similarly when I was working at Founders Fund at the time, there's a very non standard Founders Fund investment in many, many ways. The most acute one being if you have all these competitors that are doing well, what's the monopoly story? And there is a monopoly story. I believe RAMP will be a monopoly. But imagine pitching the investment team at Founders Fund the monopoly story in 2019 in a category that includes Amex. Actually SVB even had a product in the market. Braxton did he very well funded, you know, with quote unquote traction. So you know, it took a little bit of massaging. Fortunately, Brian Singerman also saw the potential at the time and really was alienated by some of the other founders too. So that helped correct the anti monopoly.

That's great. Are there any categories that you're looking for right now? Hunting for finance.

Obviously everybody talks about AI all the time and I think there are opportunities in AI that probably fit that characteristic where people have assumed there's a winner or winners or you know, whether an application layer, foundational model layer or somewhere else infrastructure layer. But perhaps the right founders. It's now five, 10 years into that story and sometimes it takes a lot of time to bake before you get the next generation of founders. Who have insights into what could be reinvented. The thing about this is kind of like what SpaceX did. In some ways the rockets was like the rockets were really good, but they were invented in the 1960s in the United States and I waited about 20 years, maybe 30 years to reinvent rockets. And then Rocket Lab, which has a very competitive offering for certain kinds of payloads was another 20 years post space X. So sometimes you just have to let the wave sort of go on for a while before you have a vision about how to reinvent it and then it's the right founder. So I would love to invest in something that's the next generation replacement for LLMs. Not a better LLM, but something that will transforms a pretty good double tundra. But that's something that would be a complete. It would make LLMs obsolete. That would be a cool investment.

Yeah, yeah. How durable do you think the AI revenue is today? You obviously were around for the dot com era and companies going public with little to no revenue. 5 million in revenue going public. Right. The counterpoint today is that we have great private companies, we with nine figure run rates that are growing tremendously fast. But we've talked about this on the show before, this idea of easy come, easy go. Right. So if you can create a bunch of traction really quickly, how durable is that? Do you think that the companies that are adding 10 million of ARR every month are sort of durable yet are they going to be leaders in five years? What's your take there?

Well, there's a quality of revenue and it's different. Like for example OpenAI most of their revenue comes from ChatGPT subscription that's pretty durable consumers or people using it for business applications. But on an individual basis there are revenues you can get that are more like pilots and those are completely non durable and then they're somewhere between if you sell to an enterprise and they roll out to the entire organization this AI based product, the chance that they're going to swap in any short term is very, very low. So if you get through it, you get through procurement, you know, you have a champion and you change business processes within a very large fortune thousand organization that's pretty damn, you know, scalable, durable revenue sustainably for probably five plus years. And so those kind of companies, those AI companies are in pretty damn good shape in my opinion. But you do see people adopting something as kind of like a trial like you know, my board told me there's this AI wave I need to test out this, this and this and have an Answer to my board that revenue is very precarious. Another set of revenues is around training and post training. I think the advances in AI are so fast that the way we build models today with fine tuning and different kinds of training may be also obsolete a year, two years from now. So there may be models that are built that don't require any human training. So revenues that are built on companies that are built on that kind of revenue may not be as durable as people think either.

Yeah. While we have you here, what's your take on one of the hotter categories in deep tech, humanoid robots? Everybody's got to take because I think they rightfully should. But I'm guessing you have something spicy for us.

Well, spicy is that, look, Chinese are ahead of us and it's very dangerous politically, geopolitically. I think the administration is going to have to take some action there. I think you have large companies like Meta publicly embracing this and their CTO is responsible for this. It's a very top down initiative. You have a lot of startups. We funded several at KV. It's probably the hottest sector among VCs right now is robotic startup walks in, it's like, okay, how much money do you want? And the valuation could be hundreds of million dollars. So. And then Tesla has had a lot of progress actually. I think some of the private progress is better than the public stuff. So it's very impressive. I think the sector will be successful for somebody. I think as a VC right now it's really hard to invest in a sector given the proliferation of startups, all with high potential. The prices you'd have to invest that.

Also the monopoly make money. It's unclear that there will be monopolies yet some of these companies are being priced that way. One of the concerns that I have is I think we need to learn from dgi. We need to understand that they were able to flood the market with products that they were selling for less than it cost them to produce. Right. If you just take apart some of these products and you understand the component costs, it's actually more than what the retail price is. And Unitree is doing the same thing right now. Right. You can go on Unitree and buy a humanoid and you imagine they're pretty happy with how the DGI rollout went and they want to do the same thing again.

No, this is why I think geopolitically the Trump administration is going to have to address this. I think robotics have military applications too. So not only do you have this, like imagine the data collection potential, but the military applications of a robot that can run 17 miles an hour. So I would be shocked if this administration doesn't figure out a way to ban Chinese robots before it's too late.

Yeah, with dji, there's this idea that you're not too worried about the drone in your closet because it's like zippered in, you know, the box that it came in. And there's the idea that like, okay, like in this doomsday scenario, the drones take off and, you know, become these sort of weaponized devices. But a humanoid who's doing your laundry and then can turn around and, you know, get up anymore, take you out is a totally different story. So I think that you have a good plan.

Also training data, I mean, there's a lot of, of dangers. And so I think this is a real political issue that needs to be top of mind, like once we get through TikTok, which will happen sooner, rather later. I think robotics and humanoid robots are particularly severe, particularly severe threat. And so that said, we will need an American competitor one way or the other. Like the world is going to develop at some point humanoid robots that are effective and better if American competitors are great. But we really need to slow down the Chinese progress, especially if it involves subsidization by the ccp.

Yeah, yeah. One thing that's been interesting is seeing how Uber's been positioning themselves in the context of autonomous driving. Right. They're basically. Dar has positioned the company to be like a booking.com for autonomous vehicles, giving you an opportunity to potentially talk your book a little bit. Does Traba, and I don't know if you can speak to this, but does Traba have a position where, you know, today they're using sort of, sort of human capital across the sort of network of customers that they have is their world where, you know, I'd be curious if you could speak to sort of long stand potential of a humanoid through Traba?

Well, I think not immediately. I think if you look at the tasks in light industrial warehouses where Traba specializes, a lot of those tasks are not yet ready for robotic intervention.

However.

But 10 years from now, if Traba.

Is succeeding in running an organization, in running the most sensitive part of a light industrial operation is the human labor and your action, quality control, reliability, all of those things, if you get the credibility of making a business more successful, you may be a great pathway to introduce more and more technology. So you may not obviate humans, you may supplement humans, you may introduce a combination that does some humans and some robotics, but it's some company from afar that doesn't understand how a warehouse works, that doesn't understand real workers and what real workers needs are, and tries to run a mixed system without having any understanding of real people. I don't think it's going to be very successful and I don't think we're ready to rip out in the long tail, fragmented sense, light industrial. The investment required for robotics to rip out all the humans isn't going to be economically feasible. Amazon may be able to justify the R&D plus the fixed cost.

No. And we had Ryan Peterson on the show last week talking about how the bar to clear if you want to replace humans is so high. Because we're pretty good at what we do, right? We've got all this ability to an agency and it's very clearly going to be the same type of situation within warehouses as in ports.

But over 20 years I could see Traba introducing more and more technology to their current customer base. Like say, you know, look, look, we've already satisfied you, we're delighting you. Trust us, this is going to make you more efficient, more competitive, more scalable, etc. And so that could be a long term strategy that makes tons of sense for the company and for their customer base.

Yeah. How do you think about the rollout of humanoids specifically around depreciation in the EV space? We've seen massive depreciation on the consumer side, right. Somebody buys a Model Y, it's worth, you know, 30 grand less a few months later, right? This sort of extreme depreciation, do you see that as potentially a headwind for the rollout of humanoids where factories basically say, hey, look, I think your tech has potential, but if I just wait a year, I can get a much better robot for the same price?

Well, I don't think anybody really knows on the decay curve because what does wear and tear do to these robots and what functions too? It may be very different. If you ask robots to do this versus, versus. But a year, are they completely dysfunctional? Imagine a simplified metaphor. You, if you have weights like a gym at home, probably last for a decade easily. Like your squat, racking your weight, you throw up in a commercial gym. Those things are going to show wear and tear in the first year.

Especially you and Barry. You and Barry, they got to change the treadmill out every day after you at Barry's, I'm sure.

Literally like the wear. So it does depend upon the use. The use. And I don't think anybody knows really what that like curve looks like. And Then that affects the economics. Like how prudent, just on a purely rational basis is using a robot to do X, Y or Z, because you don't really understand that trade right now. The only way to really do that is you have to throw some robots at some problems and then monitor what breaks, why and how, and how fast and how expensive are the replacement parts.

Yeah, totally. What about the strategic bitcoin reserve? Do you have a take prepared for that yet?

Yeah, I'm probably not the biggest fan. I mean, I'm very supportive of the Trump administration. I think almost everything they've done has been really good and really strong. And I've been very impressed. I probably, if I was going to do it, would have done it Bitcoin only. I don't think we need to do it. But if we were going to do it, I don't think kind of stepped in the middle of a bunch of messaging problems by like, including a bunch of other cryptocurrencies. But I'm not the biggest fan of like the government doing performing business functions, period. So I don't like the sovereign wealth fund either. I mean, I'm happy to manage it. If they need, you know, KB wants to. If they want to meet kb, if they need professional managers, we'll probably do it. But the reality is I don't think mixing business function and politics is a good idea. I think you should separate those. And, you know, free enterprise works really well. Capitalism works extremely well. And the government should do, you know, protect the American people, defend. Defend the border, you know, et cetera. And I don't see any. The only argument for the bitcoin strategic reserve is obviously we do have gold reserves. And if you believe the metaphor that the future of store value is like gold, you can talk yourself into it, but I don't think it's the most compelling thing.

Yeah, there was a good point.

Administration.

The strategic reserve could just be bitcoin we seized from criminals. Right. And it just goes in a fund.

We just don't sell it for that too. Yeah, I mean, obviously the FBI and other people, treasury winds up getting their hands on a lot of valuable assets.

Yep.

And you know, that could be a good way to fund it without taking American tax dollars. You know, I think the burden, and I think Doge is showing this is really setting a great example. Here is the burden for taking a dollar from an American family should be increased by an order of magnitude. The justification should be go up. Not that there's never a justification, but we need to raise that Bar the dollar belongs to the people who earned it. Barring the most extraordinary justification for it, we can't have these frivolous soft justifications or lower justifications. Really belongs to the people who create the value.

Interesting.

Well said.

Yeah. You're spending more time in dc. Do you think that there's a potential for startups or specifically defense tech startups to move offices there earlier or actually build companies there?

I don't know. I think for non defense startups I wouldn't recommend starting an early stage company in D.C. obviously the people who are already successful are spending more time in D.C. which is valuable to me to some extent. But I think if you're an early stage company that's not really targeting the government as your first customer. Federal.

Yeah.

You know, in some way then I think it's probably a mistake right now. That could change in five or 10 years and you know, maybe there's a better ecosystem there.

Yeah.

I don't know the defense landscape and how fast the Defense Department is going to innovate. We'll see. I mean there are people in the administration who believe that reform is going to be fast and furious in the Defense Department and that we need it from a budget perspective. We have to to the defensive army needs to do more with less. But until the proof's in the pudding, I don't know how vast the opportunity is right now.

We have time for maybe one more question. I'm curious to get your take on Sundar. Do you think he's still got a job in a year from now? The rollout of AI across the Google ecosystem has been atrocious from my view and I think consumers feel this. John always jokes, he's like I pay for Gemini. I don't know where to find it it but I, I, it's cool when it pops up. He seems to be under underperforming dramatically in the context of Satya. You know, what's your, what's your take on, on that whole situation?

Well, he's, he seems to be outperforming Tim Cook, which you've read the latest.

At least they have bottles that they trade that are good.

Yeah. For those that missed it, Apple just said we're delaying series two years. Two years. Something like that.

Two years. So long as other people pointed out two years in an AI world is an eternity, you might as well start playing something for 20 years or at this point. And so I think that's a serious problem. And I'm an Apple fanboy forever, you know, have ever so I Think it's pretty devastating that they're so far behind. I think Sundar made several miscalculations and I actually do think that Microsoft Satya got a lot of credit. But I think they're seeing some of the downsides to some of their strategies now. Like, I think they are going to wind up not having quite as much of a strategic, like, lock on AI as they thought they were. I think that said, they maybe played the cards the best they could. You know, you can't always control everything, but I think the world is changing really rapidly and the people who control the future of AI may not be at Microsoft.

Yeah, that makes sense.

Right?

Well, thanks for stopping by. We love having you. You're welcome. Anytime, anytime there's breaking news. Well, I'm sure I'll give you a call. This is fantastic. We're going to hop on. Keep talking about ramp. We're going to Packy McCormick. Yeah. Next. So awesome. Thanks for stopping by, Keith.

Great to chat.

Have a great day. That was great. Good questions, Jordy. I like keeping the humanoid question going across all of these. We got to ask Packy that too. And then eventually we can put together a supercut. Here's every, every important capital allocator, every Silicon Valley person talking about humanoids. Well, while we are waiting two minutes to bring Paki in. Let's talk about wander. Find your happy place.

Let's go.

I got a hat for this.

Throw it on.

We got a hat.

Throw it on.

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Big Yosemite guy over here.

Yeah. It's snowing and we wanted to go to the snow, but we didn't want to do crazy hotel. We didn't want to do some, you know, Airbnb thing. Wander was just like the perfect middle ground. Perfect middle ground. And they have this really nice UI feature where if it's snowing at the Wander when you're going to be look, booking at it, it will drizzle snow over the webpage while you're on it. It's amazing.

Amazing.

It's a really, really nice.

Well, while we're, you know, buying some time until Paki joins, Paki did an entire deep dive on Wander.

Oh, fantastic.

And we got Paki in the waiting room. Let's bring him in.

Let's bring him in.

I wish he was Here in person.

He could do the Wanderer.

Oh.

There we go.

Ramp day.

Hello, brothers.

Hello. Welcome to the show. Good to have you here.

Oh, my God, it's great to be here. Long time, long time. First time.

First of many, first of many, first of many.

Yeah. Break it down. What happened today? Why are you wearing a ramp hat?

Take a victory lap.

Take a victory laugh.

No, I always wear a ramp hat. I love it. I've heard that TVPN is just unbiased journalism and so I wanted to join you for an unbiased conversation.

Exactly.

Yeah. Guests and hosts of this podcast may hold securities by the presenting sponsor of the show. Anyways, great to have you on Paki. I wanted to go back to March 21, 2022, when you. This was like, probably your second time covering when. When they announced their $8.1 billion valuation.

Was that the back to back round, the double round or whatever?

I mean, every single round for a minute there was. You basically would. You would read a ramp fundraising announcement. You'd. They were speed running close the information and then they'd, you know, you'd get a notification on your phone that said, scoop ramp is raising another round.

Yeah, it was wild.

Yeah. That was the eight point that. That actually might have been the third piece. I think the first time I wrote about them was December 2020. I think they were. We didn't talk about evaluation, but I think they were valued at 300 million at the time. So, like something just pathetic seed in.

Series A at that point.

Yeah, that's like a personal kind of net worth type number. And then the next time I wrote about them was when they had raised back to back rounds. I think it was like 1 billion and then 1.6 billion.

So I have it here first time.

And I spent a lot of the time in these pieces, one, just being like, you know, praising ramp, obviously, and then two, kind of justifying that, you know, if you're growing this fast.

Yeah.

Like, these valuations kind of end up catching up. I think there was a period in between they took a down round. They took their medicine in 2023, but now they just kind of continue to grow fast. And we're. We're back way above that $8.1 billion valuation.

Yeah. Think about thinking about the. The ramp down round was directly tied to the market, not business performance, which is why they're back above that last, you know, financing. Just given that, you know, they were. They were taking that down round while still putting up ridiculous numbers.

And also, I mean, down round is Like, I mean, Facebook did a down round at one point, but down round can mean so many different things. And like, I saw some down rounds during that year that were brutal. Like pay to pay, pay to play. Total cram down. Yeah. It's $100 million on 50 pre. So the new investors are taking two thirds of the company.

Yep.

And then, yeah, there's a 10% option pool for the executive team or something like that that's like going to get rolled out. And literally anyone who touched the company for the first half decade that they were running it is just gone. Wiped, like didn't exist. Never thing you got paid W2 wages. I hope you. I hope you put some in Nvidia stock because you got nothing now. It was like that happened all the time. Time and it was like terrifying. But, you know, it happens.

Yeah.

I was on, I was on the other side of a few of those. But I remember reading about the, the ramp piece, the ramp down round, when it happened.

Yeah.

And that's when I really knew, like, I think, you know, in 2020, 2021, you know, you can, you can be impressed by a company, but a lot of people are going fast, a lot of value valuations are going up.

Yeah.

When you read a story about, in, you know, this terrible market, a company doing a down round and it's like pretty much gushing and all of the commentary around it and Twitter and everything about them doing a down round was gushing, how, how smart it was for them to kind of just take the hit and keep going. That's when you know you got a company that's. That's pretty special on your hands.

Yeah.

Should we talk about ramp safety?

Yeah. So this is John's. So.

Yeah. So packy. Like obviously, like ramps moving really quickly. We're worried about a future where ramp is like closing the books so fast that like you go to ask ramp to close the books and it thinks like, if we didn't have any humans, we would never need to close the book. So it just kills. Kills everyone.

Yeah.

Yeah. Kind of like, kind of like a ramp doomer scenario. Like, should we pause ramp? I've seen some people throwing out open letters, maybe trying to lobby the government to slow down ramp. What do you think? What's your take?

It's tough. I mean, I think it's a real risk. I think pausing doesn't work though. Right. Then the Chinese are going to start. You can't do that. The thing that I get worried about is that you run out of atoms in the universe. At some point.

True.

If you're an investor and you're thinking, like, can they continue to double every year?

Yeah.

Like, at some point, you run out of. Of atoms in the universe. And so that, to me, is kind of one of the bear cases, I guess.

Yeah. I think RAMP generally is what they're doing is like, they're building a machine God that lives in your CFO's Chrome tab. But ultimately, it will be a beneficial, benevolent machine God that lives in your CFO's Chrome tab.

Focus on saving you time and money. And it knows it's lane.

Exactly. Exactly. And so in a post ramp society, kind of like a post AGI post ramp society, I think. I think human. Humans will be doing fantastically. I think it'll be great.

At least the CFO suite will. Right. They're going to get all their time back strategically about the business, about life. So I think that's one of the things. You know, my dad is a cpa, and so I just think when I write about ramp, I think about my father, right? And, like, how many basketball games, you know, he could have been out of mine had Ramp existed.

Oh, wow.

At the time, I mean, the guy was, you know, he was a business consultant. He was traveling, traveling all the time. He'd fly to Germany for the day and fly back. And like, imagine, you know, ramps AI just does that for him, right? And, like, we're hanging out. He knows me better, I know him better. Like, and it just suddenly gets super dark.

He's like, my dad never made it to games in the first 15 years.

No, he actually did.

It was pretty incredible that he would, like, fly back. He would take the early flight back to make it to my stupid game. So good on him. I just mean he'd be, like, a lot less tired had Ramp existed.

You know, I'll give a personal anecdote. I got to hang out with my kids this weekend because we're on ramp, and it just. The books close themselves pivoting a little bit. John and I were talking this morning. There's too many top signals to count right now. Everywhere you look, you got trump coin, you got cardano going in the reserve. You got onlyfans competitors doing something we don't know. And we got humanoid robot companies with one customer raising at 40 billion.

What is BMW's valuation, by the way?

Yeah, that's a good question.

Oh, my God. If it's less than 40 billion, you.

Know, Ford is less 53 billion euros.

53 billion euros. Okay, so, yeah, so what's that in.

USD, like $1250, we, we're mogging the.

The euro these days, but yeah, it's probably 50 billion. Yeah, so, so, yeah, there's definitely, there's definitely a bull case to be made of why figures should be worth as much as their customer, their first customer. But anyways, how do you think as an investor right now we're, we're clearly living through one of the greatest times in history. Right. We just had a private spacecraft land on the moon.

Yep.

Elon's launching rockets every day. There's, there's, you know, austerity in the government, which is, you know, potentially bearish for GDP short term, but probably good for the dollar long term. How do you think as an investor and even a writer and somebody who's called a lot of trends early, what do you think the next. Talk to us about the next five to 10 years.

Oh, the next five to 10 years. You know, what I found really fascinating is that a lot of the stuff that I'm not investing in has been super overvalued and then a lot of the stuff that I've been investing in has been undervalued and underappreciated. And I think it's going to be worth like, of a lot, lot more in the next kind of year or two. So that, that's kind of my take. I, you know, I'm not a figure investor, big fan of, of their videos and actually my daughter loves figure videos and was like, really psyched to see two of them. Two of them together.

I don't know.

I mean, I think, like, there's a lot of probably overhype in AI. There's probably going to be like a couple of $10 trillion AI companies that are going to pay for the whole thing. Humanoids scare the hell out of me as an investor because it's like this really impossibly hard thing to do with a lot of really, really smart people working on it where, like, if you pull off this impossible thing, then you're competing against these 10 other companies and like, who wins big consumer surplus event. But there's, you know, like, human labor doing things. There are some people I've heard who don't just kind of podcast and write, who, like, do you, like, you make cars or whatever, physical labor? Yeah, I think, like, you know, human, human salary and wages and all of that. It's like $45 trillion. It's like half of the world's GDP. And so, like, if you underwrite robots is like some small percentage. I mean, I Think figure already got like 0.1% of that GDP. Got credit for 0.1% of that GDP, which is pretty, pretty amazing. But like there will be like massive, massive, massive companies built here and I think there's also going to be a lot of people who lose a lot of money. We could talk about what's happening in venture. I think it's like a really, I think like the big funds are actually super well positioned and there's going to be a lot of these like emerging ish funds who try to compete who I just think get kind of like wiped out. I don't know. I think there's going to be.

Do you have a take on General Catalyst going public? That's a good one.

I don't have a good take on that. I mean it's like, it's a really.

Good, I would say like one of the, you know, when I think back of some of your. One of my favorite pieces of yours over the year, I'm not going to know the title, but you had a really great deep dive on this idea that as our tools become better and more efficient, you know, a group that, you know, a company that would have taken 100 people to build, you know, five years ago now only takes 20. Right. And I think we're really seeing that right now in AI where you have companies like Cursor, a big one, you know, with 20 people doing 100 million of ARR. It's been amazing to see that play out how, you know, how, you know, take basically one, take a victory lap there, maybe double click in and share some more insight site. But I feel like that was really. You basically called that and did it in a very eloquent way. But I think we're, I expected it to be something like maybe like five years from now that would be the case. But it feels like it's that way like today.

So there's, there's a few different ways that goes and it's, it's really like there's the Russell Russell conjugation where like, you know, the person who's doing something different than you is doing it bad, you're doing it right, whatever. And like I literally think about this a bunch when I see all the charts of, of these companies making like more money than Ramp faster and like that's actually like way too fast. And that's totally understandable. Ramp, however, is like actually growing perfectly. That really, actually goes through my head, doing it just right. But they're, they're not. And I think I'm Actually, bigger growth rates scare me.

Yeah, yeah, yeah. The bigger, the bigger growth rates scare me. It's okay. Your growth rate is perfect. Growing faster is unsustainable.

Right?

Disaster. You're growing the perfect. Right. The Goldilocks effect. The Goldilocks growth rate. Right.

I mean, that's just, you know, that's Eric and Karim just doing what they do, I think just like really nailing that.

That's hilarious.

But I do think there is something about that that like really actually does. Does scare me. That fast growth and just like how easy it's become. So really the. You can build more with fewer people. It took to me kind of two different things. Like one, it just made me scared and this was like back in 2022, like really scared about software in general because you can go out and build with five people a company that grows really, really fast. And two, I think the other point of that essay was because we have better tools and because you can do more with fewer people, startups should be able to just actually start fresh and compete with these companies that you never thought that you'd be able to compete with. I'm writing a follow up on Primer right now, which is taking on K through 12 education, taking on public schools. Not a group of incumbents that you thought you'd ever be able to take on. And I think they actually can. You can put education on a Moore's Law cost curve and, and make education better for less and less money. And so like, that's pretty amazing. Obviously. Anduril, you know, is like starting to get, starting to approach kind of primes valuation. And so like that I think is like the really exciting part of it to me. Less that five people can build things really, really quickly and more that 100 people can build things to take on like these really old big companies.

Yeah.

What's your AI stack? You've been a little bit critical of AI's writing ability, which I think is fair. We also. So we have Coogan's benchmark, which we do about once a week, where we get the new latest model to try to tell us a joke.

And it's pretty, it's hilarious when you read it like you're a standup and it just bombs intentionally. And it's funny to watch someone bomb intentionally. So it's good in that regard.

But how have you been. Yeah, what's your AI stack and yeah, what's actually useful?

I mean, I still use Claude and chatgpt and Grok to just kind of like, if I don't Understand something, I'll throw it in or to make sure that I have explained something the right way or to get feedback.

Better Google search, basically four point.

What's that?

You're using it like a better Google search or like better engine.

A better Google search and just a little safety blanket on the. I don't have an editor, so somebody to tell me that this isn't the worst thing I've ever written. 4.5 is actually a little bit better. It stopped doing like the thing that killed me that I've tweeted about a couple times recently is like the M dash. It's not just blank em dash. It's like a totally different blank. And 4.5 has actually stopped doing that, which is really good because I would see that in people's writing and it just like, it really made me hurt.

But yeah, what was a PG one? Delve.

Delve. But you know, it's funny when I read older stuff that's like, that totally predates it's. I find delve in it all the time. I think PG might have been wrong on that.

People use it. Oh, really? Interesting. Yeah, Yeah. I thought there was some, some. Some weird round tripping thing where like, like the RLHF team in Kenya that OpenAI was paying to do the RLHF stuff, had learned English in a very proper way. And so Dell Delvin was one of the words that was like in the vocab course that they all took. And so they thought that it was like a much more popular phrase than Americans think. Use it, but just not all the time. So it's kind of weird, but I mean, you'd see these aberrations all the time where you'd be like, write a tweet and it would like use hashtags and it's like, that's kind of what a tweet is. But not really. Not today. It's not a banger. Like no one uses hashtags or if you do use a hashtag, it's like in this funny, like kind of meta. Ironic way. It's not just like, yeah, so yeah, yeah, give me some other hot takes on.

I mean, it's. I literally just asked it today because I was trying to, you know, make my own joke for this podcast. You know, the joke that ended up becoming, you know, the fact that this unbiased conversation about ramp. There's like that one phrase, like, no bias, no something.

Conflict, no interest, no mercy, no conflict, no interest.

So that's what I was looking for. See, this is this is. So I said that. I said, no bias, no dot, dot, dot.

Yeah.

And it was like very confidently, no bias, no bet, no B. What you're thinking of. I was like, no, the phrase you're likely thinking of is no skin in the game, no opinion.

Oh, my God.

Yeah.

Yeah.

And Jordy got it. Two seconds.

Yeah, I like.

Yeah, still got it. Not a paperclip yet.

What.

What's going on on Substack these days? They've got some, like, social activity that's happening that seems to be picking up. You're still writing on Substack, correct?

I'm still writing on Substack. I've seen a lot of conversation about, you know, people going over to substack. You can use links there. It's a friendlier conversation. I have not, not done that at all. And I think, you know, my. My people are on X. We're on X live right now. Right. Is this our first live X episode?

It is.

First ever. First ever.

Go retweet it right now. Don't get too distracted. Yeah, I don't know. I don't know where you want to take that. Oh, no, I mean Subtech, like, as a company seems to be doing very well. Like last time I saw Chris and. And I would. I got like some kind of. I don't know if I should even say, but like, know you can say so. So some reference on like, oh, I'm like hiring an accountant that work for them and they're like, oh, yeah, it's actually pretty good business. And so congrats to the team. I think they've. I think they've done really well from a company that was like kind of like maybe overhyped at one point. It's like, oh, it's like playing in the social.

It seems like it's.

They built a really solid business broken.

Through the cultural norm.

Yep.

I see it on Instagram.

Yep.

And my question to you is, you pay them 10% of your gross revenue. New, right.

No, I don't. Because he, unlike the all in podcast, run ads. This is why he's on the show.

There we go.

You gotta run ads.

I mean, he is an ad respecter.

Ad respector.

We're both, you know, ram, Sponsored, obviously. Wander Portfolio company.

Yeah.

Longtime friend of the newsletter and just feel good getting to tell people about that. If I were. There you go. If I were a subscriber business, I wouldn't get to tell people about Random Ramp. I wouldn't.

There's not nearly enough ads on the screen right now we need more. So we got. Everyone has a sponsored hat right now.

There we go.

I got the wander, you got the rip. Be sure to look down so I can see the logo. There we go. That's good. Yeah. So. So. So, I mean, he is kind of a bit of a failure mode for. For subs. I am.

Well, it's funny because people will ask me, like, you know, you, like, what do you think about Subsack? And like, you've talked to the team, obviously. And like, I actually have never talked to the co founders. I've talked to one person at Substack one months. Because you just got, like, the worst possible business for.

Yeah, yeah.

I haven't paid a dollar to Substack.

What do you think about this idea that, like, they should be doing the bundling and aggregation on their side where, like, you should go to Substack, somebody should pay $20 a month and they should get, you know, like, you and pirate wires and, you know, Barry Weiss's free press, like, all instead of. Instead of those folks, like, leaving and you monetizing elsewhere. Like. Like, do you think that makes sense or is that just, like, a crazy idea?

No, it's a good idea. I mean, it's like, it's the idea that everybody, I think, has that they should do that, that they should build an ad network that, like, there's all these things that are, like, clearly good for. Good for business, that actually, I think in practice, like, when you. When you're, like, dealing with people who have kind of, like, egos and think that their own thing is, like, the thing are really, really, really hard to pull off in practice. Like, I wouldn't want to be part of a bundle. And so I think that that ends up being a challenge. Same with, you know, like, Ramp is not going through an ad network and buying, like, REM slots. Right. They're partnering with, you know, just top shelf kind of shows and specific people. And so I think the ad network stuff falls apart there. I really like what Substack is doing for the simplicity. Like, I, in the beginning was definitely somebody who thought that I would move to a different platform. I wanted more customization, whatever. You'd have to pay me a lot of money to move to a different platform now just because it works really, really well. The core product that they built.

Yeah. Have you ever experimented with a paid offshoot? Because I know you've done other offshoots. Like, what was the Thursday white pill one?

We did the Friday.

Yeah.

The weekly dose of optimism.

Yeah, yeah. Weekly doses of Optimism, which is kind of like offshoot. But that's still free, right?

It's all still free. I don't want to write more. If anything, I want to write less this year. And so I think I don't want to.

Bangers only.

Bangers only. I don't want to limit what I send exactly. And I actually don't know like at this point I'm in too deep and I don't know what the conversion rate would be and maybe it would be incredibly embarrassing. And so I'm just going to stick with. Stick with what I got.

There you go.

Love it. Where you mentioned earlier, you've been finding companies you feel are undervalued, you obviously have an insane top of funnel, right? You've. You're broken through the mainstream. If I ask somebody that you know is on X, they know who you are. If I ask somebody that's kind of even LinkedIn mode, like they usually know who you are. Right. So the top funnel must be. The top of funnel must be crazy. But what like where, where are you excited to be investing right now? I'm sure you're flooded and doing a bunch of AI, but at the same time it feels like an interesting time right now where you maybe wouldn't want to invest in the next humanoid robot robotic company. You probably don't want to be investing in more defense like net new defense tech companies that are just incorporating today. What's got, you know, space feels like in many ways there's more opportunity than ever because the cost to get up there has dropped. But where is exciting to you? What's the weird stuff you're looking at?

Yeah, really like the way that I've been thinking like my catchphrase on this is Andrew and SpaceX for everything. So as opposed to like you see Andrew and SpaceX, the move is not like go do the second best version of that. It's go find that in the other industries. So you know like a base power company or somos Internet doing telco or primer doing education, like find the thing that is going to go win that category is really what I'm looking for. And those end up looking weird. So I was kidding about the stuff that I'm investing in being undervalued. But I do think that because it doesn't really fit a thesis that a fund would have on defense or whatever, it is a little more affordable than a humanoid company or a foundation model company for sure.

Y. Yeah, I mean stuff in like power energy, deeper in the supply chain, way far away from the core hot AI consumer stuff. There's going to be more reasonable prices. There also are. Are you looking at bio stuff yet or bio adjacent stuff?

Oh, we've been doing a lot of.

Bio stuff, I imagine.

I think hot take would be Cancer is probably gone in 10 years, I think is one of my favorite hot takes. There's so many different attacks on it and car T cell therapies are doing well and it's a matter of kind of scaling, scaling those out.

Yeah, I'm sure you Malibu is the, the power Law. I'm sure you've read Sebastian Malabi's the Power Law and before that he wrote that book on more money than God about hedge funds. And so his whole thing is like, go and find the group of people that are making trillions of dollars effectively or like really moving capitalist markets like the biggest power players and then write the definitive history and profile of them. And so I went to a speaker series with him and afterwards, you know, somebody comes up to him, he's like, what's the next book you're writing? Because that's where I want to be investing today. Right. And he said bio. He was like, I think that the next book I write will be about like the flagship pioneering like, but also the biotech public companies and then the biotech funds. And so it's something that I've certainly been meaning to get more up to speed on. I have a lot of friends and co founders who have done like, I.

Have to say it is hard. Bio is hard compared, like of all the other things, you know, Hirschberg, who I've been working with on the BIOS side, who's, who's, you know, Stanford Ph.D. in genomics and he like, without him I wouldn't invest in bio. You see other generalist investors investing in bio and he'll be like, that is the dumbest deal I've ever seen in my life. Are we allowed to curse on X? Dumbest deal I've ever seen in my life.

You are allowed to curse on X, but you, what would your mother say? And we will shame you for cursing generally because this is a, this is a friend.

Our kids watch this kid friendly show.

Our kids watch the show.

My goodness, I'm so sorry.

We don't, we don't curse personally, but do whatever, whatever's right for your brand. Yeah, they're, they're, you know, if you want to have like a low, a low tier, like I, I, I, I know you're an Irish guy. You're, you're, you're you're up in Boston getting drunk, getting hammer. Oh, Patrick throwing some curse words out.

No, I, I'll just say Bio is incredibly exciting and Bio is like a really funny one where I, I think like people get really excited and really. Oh my God, like they told me that they're, they're going to make people live till 250 years old. They're definitely investing in that and people are going to lose their shirt.

But I mean at the same time it's like, it's like every category is hard until some power law company comes along and makes it look easy. Like Anduril hardware was hard. Now there's like now there's a new hardware company like every two days and then they like yeah, they can't like beat Android necessarily overnight but they can like sell and get deals and then sell to Androll or like create value or like there can be good deals done in hardware now. Even though, though like hardware is hard.

Totally. I mean more just like this might just be me calling myself out. What do you have like millions of people watching this right now? Calling myself out for being stupid. But like just the vocabulary of biology and like understanding how the whole thing fits together, it's just like a totally different beast even I think compared to hardware and other things.

Yeah. One of the things I've been sort of realizing around everything, deep tech, hard tech, biotech fits. This is within software. We went through a 20 year period in Silicon Valley where software entrepreneurs could go out and make these sort of outlandish claims around the products that they would build, but then just go and do it. Right, because the software is hard, but you can kind of make the pixels like, you know, work and whatever. It's code, right. We know how to do it. And then in hard tech it's very different. You know, Elizabeth Holmes, like I do believe she genuinely believed that she could build the blood testing device that only needed one drop. But then like physics got involved, involved and it was like I gotta, I gotta tell you to pump the brakes there. So it's been interesting to see that play out where for you as somebody who's a definite optimist, somebody that wants to believe in human potential and the ability to great build great things, you probably have to dial it back at points and say like I want to believe this is real but I'm not going to invest because I can't kind of reach that conviction threshold.

Yeah, I have said and I think this is fair for me, not for people who are better at science. But I do. I'm actually moving closer to the series A now and like not doing deep tech because like I'm not the guy to underwrite the science. And if I'm like the investor that you're calling to have something that has a bunch of science risk in it, like I shouldn't actually be. It's more like the, you know, the furthest out proven thing and putting a bunch of those together into a company. Gentlemen, I have to, I have to lead you.

Can I get a minute? Minute?

Yeah, you can get a minute.

Okay. As the godfather of Solana, the guy who kicked off Solana Summer. You did. You gotta, you gotta give credit. You gotta. You deserve some credit for that. Give us your 30 second take on the strategic reserve. It would have been an unimaginable to think that the US government would be buying Solana. But you probably. Maybe. I wouldn't be surprised if you alluded to it. What's your 32nd take?

Oh man. My 32nd take is that it's also dumb right now. Like, I think Solana is great. I think it's. It's like fast tech and I think at like some point in five years, a lot of finance is going to run on Solana, on eth, maybe on suite or you know, like a lot of. I think it's inevitable that, that more and more finance will move over to crypto stablecoins. And having stripe behind it is like a real thing. Any strategic reserve that has Cardano in it is just. It's a joke, right? Like, it's like not to get political. There's a bunch of like, and I'm guilty of this too. There's a bunch of. A bunch of dogs that caught the car stuff going on. I think right now it's like no regulation strategic reserve. And we're like, this is actually kind of stupid. Like, not this way. Like, this is not. We've been.

Yeah. Bitcoin's down 8% today and basically round tripped back to where the announcement happened, which is so bearish. Like, that's. The US government is buying crypto and everybody's bearish. But I know you have an in person meeting in like four minutes, so sorry for making you late for that now.

This is great.

Thanks for having us.

You're welcome. Soon. Have a good one.

See you later, guys.

Let's move on to garage Mahals. This is, this is important stuff.

This is really.

If you're building a garage, how big should it be?

Yeah.

Couple hundred square feet. No. Couple thousand square feet. No. Let's, we're talking to people that are making 6,000 square foot garages bigger than most people's houses.

And where are we talking about? Minnesota. So I have spent time in Minnesota. The CEO, my co founder at Rohrer, Brian, lives in Minnesota. And you can play. Everything's bigger in Minnesota, right? The houses are bigger, the basements are bigger. You can play basketball in his basement. He's got a half court. And when it's below freezing for half the year, you got to go big. You got to build man caves. And we're talking about man caves today. So I'm excited.

He's a three car garage in the Minneapolis suburb, already full. He had a three car garage. Brett Bailey, Talk about struggle. I mean, we need a moment of silence for this guy. Because he had to keep his racing Porsche, a trailer outside through brutal Minnesota winters. Then one March, as he prepared for a race, he discovered the wheels of the trailer had frozen to the ground. Unacceptable. But he didn't just take it lying down. He figured out a solution. For two weeks he was throwing salt out there. But now he is part of a man cave meets Storage wars revolution spreading across the country. I love it. I'm a huge fan of man caves and storage wars. And so he now keeps his two Porsches, a Ferrari, a custom Harley, a dune buggy, and a racing trailer in a nearly 2,700square foot space outfitted like a sleek European car dealership. It sports a tequila bar, heated floors, bathroom with a shower, giant tv, leather sofa, stack of racing tires, and a car lift so you can lift up the car, work, work on it, wrench on it with a couple of cold ones on the weekend. It's great.

Nothing like getting under your car after you've had a couple of beers. Just going to work on it.

Going to work on it.

It's a little dangerous sometimes. You hit that Balmer peak, right?

Yeah.

Working on your CR car.

Call them car barns, barn dominiums, toy sheds, garage Mahals or shows for shop houses. They're a big hit in the land of 10,000 lakes.

All right, so what's the controversy here, John?

The controversy is that they're too big and they make the town look stupid. Everyone hates how they look. They called it, what was it? What they call it? They call it the tin tin city or something.

So I don't, you know this, but Ben, our vice president, producer of the show, is actually from Minnesota.

Yeah.

So we might have to send him out there and just have him zoom into the show on the site because this is just such an important story.

It is.

We got to get original reporting. We don't like to do original reporting here. We like to just, you know, spread misinformation from the timeline.

Yes, yes.

But we got to get Ben on the ground there because. Yeah, there we go. Ben. Ben says he's got friends with Garage Mahomes halls.

That's fantastic. Yeah. In Cross Lake, a forested vacation mecca two and a half hours north of the Twin Cities, space is limited on lakefront lots, making storage space elsewhere, often in simple metal buildings, highly valuable. The city council has twice put a moratorium on new storage, combating an image that has led some to dub this the community tin city because there's so much tin going up as storage. But if you look at some of these photos, they look fantastic. It looks like a lot of fun if you're in one. Nelson and others tout the expansion of the tax base from the storage boom, which includes his new 4,200 square foot building, which is like, that's a massive house.

And he's got a taxidermied Kodiak Bear.

Yes. It's jammed with boats, an rv, sports cars, motorcycles. A taxidermy Kodiak Bear and his father's model. One section, designed with input from his wife, includes a full kitchen, flat screen tv, bathroom and stone fireplace.

You know, the biggest thing here, John, is I can't go in my backyard and throw up a. I can't do one of these because California, they don't, they don't want you to build.

You can do adus every once in a while.

I know, But I want 4,000 square feet of podcasting.

You know, I gotta run to the restroom. Can you keep it going?

I'll keep it going. Let's jump, jump through to the next post. We're going to jump into the timeline. We got a post from Reggie James. Somebody posted. Do you think that Steve Jobs did a market survey, you know, did consumer survey to build the iPhone? And Reggie jumps in here with a fantastic point. He says they literally did. They got all the phones on the market. They saw it was all junk by Apple standards. And they knew this for a while, but had to get a few technical things in order for. First they had to get really good at miniaturization. Ipod helped them learn that. Then they had a cross learning moment where the company they acquired for their touchscreen technology, which was working on computer displays, they took that and brought it over to Project Purple and that is how the multi touch was born. So now they have multi Touch and know how to make things small. And they are still looking at these junk phones on the market. Once they see what's wrong with them, they ask themselves, what's the phone we make for ourselves? They vibed after they knew the market, they had technical pieces in place. And this is where all the software love that made the iPhone and the iPhone finally comes together. Pulling from Springboard and all the Mac oss work. That's what made the iPhone feel so good with directional manipulation and multi touch. The iPhone wasn't some isolated do what you want event. It was built off of decades of HCI learnings, a key acquisition in the success and learnings of the ipod fraud. Learn the real stories and don't just take a cliche like users don't know what they want as an excuse to build nonsense. So yeah, aggressive but completely fair analysis.

The guy who posted this though was like, was like, hey, I'm actually, I actually don't know the history. I'm just curious, like, can you just like educate me? But Reggie's a good poster, so he kind of amps it up and it's like, let's, let's go, let's, let's talk about this.

But you want to have Reggie. You know, Reggie's had some amazing analysis of Apple over the years and their different trends. It'd be great to have him on the show sometime soon.

We should have him on the show. It's interesting. I remember this old Quora post by Joe Lonsdale talking about the Hegelian dialectic. Are you familiar with this?

No.

It's this idea of like, the dialectic is basically like, there's a thesis, antithesis and then the synthesis. And so you take like the, like an idea, you think about the opposite of that idea, the counter argument. And then you synthesize something that takes into the best art, the best pieces of both, essentially. And it's a very popular like mental model. And the example that he used in this Quora post to explain the Hegelian dialectic was literally Steve Jobs both being like the vibes guy, but also the spreadsheet guy. And it's so easy in thought leadership and like posting for people to be like, oh, like, vibes are the only thing that matter. Like, you should never think about them. Market map.

Don't ever. Don't talk to customers.

Don't exactly, exactly. People want axioms when in fact like, like the best leaders are often like, you know.

Yeah, generalized advice is to like, don't do traditional market research. Just talk to as many customers as you can. The thing about consumer is consumer is a category where you can have no pre existing business experience with a category and just build the product that you want. I mean, you can do this in B2B as well, but I think it's more common to just kind of ignore the market. Just build what you want in consumer.

Yep.

But even then, it's cool to see the history of how the iPhone came together and not just being, oh, here's a good idea. We should just do this.

Yeah. Anyway. Anything else on Apple?

I got a lot of hot takes on Apple.

You got to be more positive about Apple.

I think I just. I've just been positive, positive on Apple for 20 plus years of my life. And it's fair to be negative in the short term, but I'm positive in the long run.

It's more just like. Like, I feel like at the end of your. After you go massively viral for talking trash, there needs to be like, hey, like, we can.

I gave Apple an out. I said, if you're just giving up on innovation, buy an F1 team.

Exactly.

Then we'll. We'll all shut up.

There's something about, like, I still love this company and I want it to be great. And, and there is a sliver of greatness here. Let's just.

There's more than a sliver.

Oh, yeah.

There's way more than a sliver.

Totally.

But if Tag Heuer will sponsor F1, why not Apple?

That would be very cool.

An Apple car and no other sponsors.

Yeah, like Red Bull. Like, I mean, Red Bull has a few others.

Yeah, they've got a bunch, but.

They got a bunch. Imagine complexity not being around. But I'm sure they can't do it because it's like some emissions thing or something. Like, they've made so much many. Like, they've pandered so to so many, like special interest groups, essentially. Like, they're like completely bought in at this point. Yeah, I don't know. It'd be very cool. I'd like a. I'd like an F1 team.

Do we want to talk about the GC?

Yeah. General catalyst is going public. You'll be able to invest in a venture capital firm soon on public.com. so get ready. Move your assets over to public.com. but no, this is a real story. General Catalyst is considering an ipo. Dan Primack has the scoop. We've been hearing rumors about this for a couple months. And as these asset managers get bigger and bigger, it makes more sense to trade Them publicly. There's a few reasons behind that. The main reason in my, I mean we can list out a few. But when you're a public company you are subject to much more aggressive audits. And this is why people don't want to go public because it's a hassle. They want put, they will put up with that hassle and as a result they will have access to more capital and it will be a. There will be potentially more of like a power law consolidation in the actual fundraising of these funds. General Catalyst has, you know, billions and billions under management at this point, tens of billions. And if they want to go for even bigger funds saying hey, we are publicly traded, all of our financials are public, you can go see them. You know, you don't have to rely on, on newcomer scooping some random things to, to, to count on it. But there was some debate over this. Dan Primack, you know, posts that General Catalyst is considering an ipo. Jason Calacana says what is going public exactly? The returns or the LP interest. And Dan Primac says what do you mean? In this case it would be the management slash holding company like Carlisle, Blackstone, etc. And a lot of people don't necessarily really understand this I guess but you know, asset managers are themselves businesses that make money from fees and all sorts of different pieces of that.

Yeah. Gc, I think. Didn't they roll out a private wealth.

Yeah. And, and they have private equity investments. They have, they have growth stage investments, seed stage investments. And so every time they make a deal with someone else's money and so it, it will be valued similarly to a bank, although it's a very, very like high performing bank in the sense. But how do you, when you invest in a bank, when you buy, when you buy shares in Citi or Chase, JP Morgan or, or I don't know, Goldman Sachs, what is happening? Well, Goldman takes money from some people, put my money in the bank and then they lend that money out and then they return it and over time they make money and it's just like any other business.

Yeah.

So I don't know why J. Jason isn't thinking about this.

Jeremy Gaffon has a good bit on this which is basically that at the end of the day private equity is the greatest business model on earth.

He always says merchant banks. The merchant banks.

Yeah, he talks about merchant banks. But specifically it makes sense that the people that invest in private markets who study businesses all day long created a business model for themselves that's just absolutely fantastic.

Sure. Yeah. I Mean, they certainly have like an advantage playing in the question.

The question is, is it will be very interesting to see a venture capital firm going out and doing a road show and putting together materials and saying, look how much EBITDA we're going to put up in this year. And it's based entire, you know, presumably entirely based on the fee accumulation from their various funds that are all kind of funneling into this one vehicle.

It'll also be very interesting to see what computer looks like post IPO at these firms.

Right.

Because instead of carry points, you're looking at stock options, potentially. There's a whole.

Yeah, that's what's unclear is the fund performance, the carry. Where do those returns flow through? Because some of them will flow to the partners still. But you would imagine that investors in GC and the public markets would want upside in the returns as well.

Yeah. So the partners have. The partners own the general partners, right?

Yeah. So then they would just shares in the, in the company.

Exactly. And so when you buy them, you're buying a slice of the general partner stake. And if you buy enough, it's like you're a general partner.

Right.

But you just paid for that instead of worked on it. And. Yeah, and this, this type of thing has happened before where firms have sold GP stakes and said, hey, I'm cashing out of my fund, did this, but I'm selling. I don't know if that's, that's actually, I haven't heard that, but, but basically I'm, I'm selling part of my GP stake. You will, you will be the one to earn the returns from that upfront.

But yeah, so this happened in 2023. January 24, 2023, Thrive Capital sells minority stake to Bob Iger and other moguls. So this was kind of like a party round. They sold 3.3% of the company, including CEO Bob Iger, and yeah, so they were able to raise $175 million to the balance sheet.

That's so fascinating too. And because you think about 3%, like that could be just like hiring another GP and giving them a slice of the gp, right? Yeah. You hire another partner, you say, oh, you're going to be the one who does the AI deals or the deep tech deals or the defense deals or whatever, and you wind up giving them the effectively the same shit share, but they didn't pay for it. Or unless they, you know, bought in for some reason or they. And, and, and they don't get the same alignment. Like at this point, it's Kind of like Iger's like a partner almost in the sense that, like, if he had, he owns a stake in this one firm, so if he has a deal that he wants to bring or a partnership or he wants to do a deal with a portfolio company, like, he is linked to thrive in this, like, very important way that's more tangible and more economic than just like, oh, I'm an advisor to your fund. It's like, no, like, I actually invested in your fund. I, I, not just as an lp, but also on the GP side, which is fascinating. Anyway, so SHIELD sums it up. He says GC would be the first major USVC fund to ipo. They own a health system, a wealth business, a fund of funds, a debt business, et cetera. They all started from a $73 million fund, one that had 0.7 IRR. Wow. Not good.

Legends.

But they kept going.

I mean, you just got to give them credit for that.

Yeah. That's amazing.

That's incredible.

Their first five fights.

I mean, I'm sure, I'm sure if.

You look at that all changed with Stripes when Hemant led Stripes Series B. And of course, Hamantanaja is the CEO now. And he refers to himself as CEO. He has never, he, he, he's never said. I'm sure he said gp. But more recently he's been saying, hey, I'm the CEO of the this firm. I'm not just the, I'm not just the GP or like the, the named GP or the most important gp. Because all of that's kind of like, you know, fake, essentially.

Yeah. We should ask Shield. He's going to be on in 20 minutes. We should ask him. Yeah. For kind of a deeper analysis here and how he thinks all the fees and everything.

A huge percent of GC's returns, 5.85 billion came from Livongo, a chronic care company sold for 18.5 billion in, in 2020. Written down two years later. I wonder what it was written down to. And I wonder, and I wonder exactly what, what happened with that. Like, like, why was that asset so mispriced? But this happens all the time. I mean, plenty of times companies get, get sold early and then wind up not doing the thing. But then on the other side, you have the Instagrams.

Yeah. So Teladoc was the Acquirer. They took $13.7 billion dollar loss in 2022 tied to the Livongo.

That's a lot. That's a lot. I wonder what happened. I wonder how they mispriced it. So bad.

This is maybe on par with. With Square. Square's acquisition of Affirm or not Affirm. Who did Square acquire?

Wasn't it title or something?

Well, that was.

That was the. Wasn't that like the. The music streaming thing? Didn't they. Wasn't Check. Dorsey.

They bought afterpass Pay.

After pay. Was that not a good deal? I don't know. I mean, all that stuff blew up when the interest rates.

They acquired after pay for 29 billion.

Yeah.

And then like two years later, they were worth like maybe 40 billion.

Interesting public company. Okay, well, should we zoom in on much smaller deals? A company making 30k in 24 hours, selling through Google, meet after one viral tweet. Interesting rhyme scheme here. I wonder if that's intentional. Eddie Zoo.

Wait, so just to clarify on the last bit, then we'll restart that. So Square buys a firm in the ZURP era for 29 billion, and two years later they're worth 26.

You need after pay. Right, Sorry. After.

Sorry. Yeah. Yeah. Okay, so block Square.

Yeah.

Buys after pay for 29 billion.

That's a lot.

Then less than two years later, they're worth $25 billion collectively themselves. Block is worth 25 collectively. I mean, they're worth $40 billion now. So.

So they build it all back.

It's one. It's just one figure, basically.

Yeah. Yeah. I mean, they're just. They're just one really good parlay away from getting back to nine Dig territory.

Yeah, we don't see public companies like. Or ripping parlay parlays.

What's 100 billion? I don't even know.

I think that public companies should start ripping parlays Friday after the market closes.

What. What is your job as a CEO if not a parlay? Yeah, it's like, I want. I want. I want my CFO to work out. I want this financing to go well. I want that distribution deal to pop.

And I'm gonna rip parlays.

It is a parlay.

Well, yeah. And. And even you would. You are constructing the ultimate cfo. His job is automated away by rent ramp. And they have all this free time. They could be ripping parlays, and it would be fun for the market to be able to sort of anticipate. All right, how's the company. You know, the company's putting up $100 million on DraftKings this weekend. How's it gonna go? Right.

No, no, no, no, no. Don't. Don't bet on sports. Bet on yourself.

Bet on yourself.

But view your organization as if it is a Parlay.

Yeah, because get this right. Never going to get this right. Never going to get this right. And you only have to do that a few Times.Times.

Exactly one T. Jensen Wong, he's like, I want China to not invade Taiwan.

I want, I want America to work.

America to work. I want, I want Microsoft over 80 billion in CapEx. I want Zuck to develop a $20.

Billion secures the 500 billion.

500 billion. And if he gets that, boom, 10 trillion.

Stop.

You got to post that 10 trillion stock.

He's like, here's my $10 trillion parlay for Nvidia.

It's like, it's like the Tesla secret plan. You know, it's like if all these things go right, my stock should be worth a 10 trillion. And so, you know, great stuff. This is my plan. Just express it in a parlay. I think it's a viral format. I think it's good. I like, I like thinking about things in parlays even though I don't participate them in the sports betting realm because it's low class and vulgar. Anyway, moving on. Eddie says he made $30,000 in 24 hours selling through Google Meet after one viral tweet. And I like the rhyme scheme there. He says he was inspired by PMF or die.

Yeah, this is amazing. So he made a post.

Yes.

On Saturday. And he said, I built an algorithm that simulates how thousands of users react to your tweet so you'll know if it'll go viral before you post. It's a really cool concept. Everybody's experiences. If you post it on X, you think you've got something great. You post it. 300 impressions later you got one like from. It's brutal. Your absolute boy. And you realize like, all right, this wasn't a good point post. Sometimes the opposite happens and something that you weren't super confident in rips. But anyways, very cool. He ended up launching this and starting to sell it kind of immediately and did $30,000 in volume in a day, which annualized his pretty good business. He basically would have gotten out of the cage in an hour.

Insane. Oh, I didn't even annualize it. Yeah. That's crazy.

Yeah, you got to annualize everything. Don't talk about, about, you know, you had a good day, say, well, annualized were, you know, 200 million dollar revenue business.

It's great. It's great. Yeah. I saw some big, big people quote tweeting this. It seemed really fun. We should give it a try. And congrats to Eddie. I love that People have been inspired to go build stuff and, and take a crack.

Yeah, I saw Emmett Shear from.

Yeah, that's what it was. Tick, tick, tick.

Yes. Which basically alluding to, if we're letting truly right now, there's a lot of human input. You know, your brain's basically an algorithm. It sort of creates a concept, releases it to the algo, and then, and then humanity sort of reacts. And then in a world where algorithms are dictating the sort of entry into the algorithm, it's just an entirely new level.

Yeah. And so Emmett Shear says, tick, tick, tick. And essentially, you know, he says, we're going to start. He's going down like the wire heading path. We're going to, to be optimizing for the algorithms too much. That's going to lead to some sort of AI doom scenario, essentially, not full doom. I don't want to mischaracterize what he's saying, but he's just saying it's clearly just like things are getting weird, which I agree with. And so Yaxin chimes in and says, would work better to replace this app with something that just has a blank screen with the text. Everyone likes you because the goal is to get lots of dopamine from the like people, basically. But that's not really what it is the goal of social media. Everyone thinks it's the goal to get like, you know, a pat on the back and oh, people like me, I'm popular. No, the goal is to make money. The goal is to make money. And that's what a proxy for getting a banger post is, is that it will get you a job, it will sell your product like this kid is making money. And so it's not about that everyone likes you. It's, you know, you cannot replace the app with, with, with shareholder value with, with actual capital trends changing. So Emmett says, do you truly not see the oncoming train of consequences for building optimizers that can predict the discourse generated from a post, both volume and tenor? Do you truly not see the oncoming train of consequences for building optimizers that can predict the discourse generated from a post, both volume and tenor? And so I can't, I mean, break it down. I, I gotta dig into it. I mean, I can imagine some consequences from that. I don't know about all of the, all of the consequences on this oncoming.

I think that, you know, the reality is right now, every active creator online.

Yeah.

Is already hyper fixated on how to. What does the algorithm want?

Totally.

It's like TikTok does this like, if you do this song, we're gonna surf, you know, surface it. If you talk about positively about if you are against the TikTok ban, we're gonna surface it. Right. So people know that they start to lean into it.

So how is this an oncoming train? I, I, I see this as like the train has been whizzing past us and continues to whiz past us and is, is accelerating. And you know, I don't see this as some binary moment that Emmett is, is kind of, I don't know, we'll have to have him on and discuss this with him because I think that's the main thing that I, that I disagree with the characterization here is like I, Mr. Beast literally built this for YouTube like two years ago.

Yeah.

Like, it's like it predicts how well your thumbnails and titles are going to do. And so like we're here like people, people have these tools. Maybe, maybe it's not good enough yet. And we're, it gets better. Then it really becomes, you know, give the people what they want. But I don't know. I mean, yeah, it becomes all AI generated and becomes all, all very addictive and it becomes wire heading and no one ever goes outside and they get the juice reward and they get the, the, the nutrients directly delivered into them and, and that's the end of humanity.

Beautiful.

Except for us because we'll be lifting.

Speaking on the end of humanity. We got a post from Patrick Patty Collison. He says, grox voice mode remains active when the app is closed. This behavior is made very clear with a live activity. It ends up being an awesome experience. Plop it beside you while reading a book and bat occasional questions its way without interrupting your flow.

I read this post and I read the first sentence. Grok Voice modes remains active when the app is closed. And I just thought like, oh, this is gonna be bad. This is gonna be like it's spying on you. You need to be aware of this. Like I thought, because I didn't even see it was him. And I love that. It's just like, this is exactly what I want. Actually. This is great. And I completely agree. What was I.

It's funny because Patrick has the perfect index on AI, which is every AI company pays him, you know, 2.7% of every dollar. So he can be sort of Switzerland. He's like Switzerland of AI, the true Switzerland of AI. You know, everybody can run on stripe. But this was cool. I mean, it does seem like voice has been this sort of lingering trend that everybody's been predicting, but it hasn't quite played out right. It seems that voice has been predominantly used by people that aren't good at using their thumbs and it hasn't been the preferred sort of method of communicating with your device. That seems to be changing. Right. Sesame. Sesame came out last week and had a pretty incredible response. It's a wild experience to use. And now Grok is. You know, I flagged this post from Patrick because I think we should try to. I think we should try to leave Grok running for a show and just start interacting with it and saying, you know, when we have a question that I would otherwise Google, we can just ask Grok.

Yeah.

And it'll have the context from the conversation, be able to sort of surface relevant data. So that's cool. But we're having trouble with X servers today. Our livestream on X.

The entire servers to Grok.

Yeah.

What happened? Yeah, clearly they're not, they're not deploying AI, they're not deploying the service to the humans. We're the second class citizens now.

Yeah. Well, it's a disaster, but sweet. Well, let's jump in. We got a promoted post from Adquit. Our favorite way to advertise out of the home.

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What I think is amazing in the same way that you know, any, any company in the world can go on Meta and just sort of sign up and start running ads alongside the biggest companies in the world. Same thing happens on Ad Quebec. Biggest companies in the world. There's like a ton of the Fortune 500 that runs on Adquic, Wall Street Journal, Warby Parker, Ramp, Discount Tire, Instacart, Credit, Karma, H and R Block, Lyft, all these massive companies use it. But you as a startup can go and start testing out of home even on a smaller scale.

Another way to advertise out of home, make a T shirt like Jason Carmen did. Let's move on to the next post. He says we made a movie about space for free on Apple. Then we made some T shirts. All of the designs are love at Story Dot Ink Apparel. Go check it out. We love to support Jason Carmen here. He has made some incredible dog and yeah, he's building a whole media company right now and it's fantastic. And yeah, I mean really cool designs. Like very, very iconic. I think These will age very well and yeah good to get it out in the world and I'm sure it'll start lot a lot of conversations about the content. If you see somebody in rocking a Jason Carmen original, you know they're, you know they're an absolute killer techno optimist. Should we go to carpathy on 4.5 again?

Let's do it.

So this is a reply to someone Zivi Movitz saying GPT 4.5 reaction time go. Anything you want to make sure I don't miss or your own reactions. And Carpathy says my reaction is that there is an evaluation crisis. I don't really know what metrics to look at right now. MMLU was very good and useful for a few years, but that's long over. SWE bench verified real practical verified problems I really like and is great but itself too narrow. Chatbot arena received too much focus. Partly my fault that LLM labs have started to really overfit for it via a combination of prompt mining, private eval bombardment and worse explicit use of rankings as training supervision. I still think it's okay, but there's lack of better. It feels like on. Like it's on the decline in signal. There's been a number of private evals popping up, an ensemble of which might be one promising path forward. An in absence of great comprehensive evals. I tried to turn to vibe checks instead but now I feel they are misleading and there's too much opportunity for confirmation bias, too low sample size, etc. It's just not great. TLDR. My reaction is I don't really know how good these models are right now. Yeah, you got to get the models to write. To write little standup sets, feed them to stand up comics that get bucket pulled at Kill Tony or go on, put them, put them in this, put them on the stand. No, it's got to be humans that step on stage at the Comedy Store on an open bike, don't get booted off and then you measure the booze to the laughs.

Yeah, booze to the laughs. No, I think, I think the real, the real bench, like the only thing that really matters right now if you're a foundation model company, is being significant. Noticeably better not to benchmarks. Noticeably better than chat GPT.

Yeah.

For specific use cases.

Right.

So Claude is noticeably better at coding.

Right.

And so people use Claude. Grok is notably more entertaining for some specific use cases for consumers than ChatGPT. Right. So that, that's like something that you know, potentially but. But you have the situation right now where 100 million plus consumers love ChatGPT. They think it's awesome. So if you're competing with them, you don't just need to be 10% better on some random math benchmark, you need to be 50% better so that somebody will try you and switch to you for their day to day use. I think that's what actually matters in terms of winning. And you know, you can see what, in my view, you can see what companies are actually consumer AI companies are actually doing well by looking at the App Store rankings. Right? It's not, it's a snapshot and it's obviously momentum driven. But if you're a consumer AI company and you're not on the App store chart, while OpenAI has continued to have a pretty dominant position, you're not in a good spot. And that like the App Store chart is the finest final benchmark, the real benchmark that matters.

It's got to be so hard to try and be competing in LLMs right now because it's like you have people who are. Everyone there is like an OpenAI co founder or adjacent to the president or a state actor. It's like if you're not on the highest, highest level, like, how are you, how are you competing there? It's going to be tough.

Anyway, we got SHIELD in the waiting room. I'm excited to have a bronze.

Talk FIN T hack. Let's talk financial technology. Hey, Ramp.

We're not going to call it FinTech today. We're going to call it finance technology.

Finance Finance. Finance Tech. Finance technology. Let's go. Let's bring them in. Let's chat. Let's chop it up with SHIELD how are we doing? Should we do one more related post? Will Brown says It's interesting that 1.5 billion parameters is all you need to crush math competitions, but you need like 15 trillion to make the model funny. Maybe humor is the right measure of true intelligence. And I agree, I agree. So very difficult is.

Can you see him in the waiting room? Yeah, I just see his photo here.

It says shield oh well, 15 trillion parameters quickly to be funny. The whole be me thing is funny because it feels like it's going to really benefit from personalization. Like the people that are like, oh, it's so funny. It's like, well, yeah, Tyler Cowan, like you did laugh at it because, like, it's funny that the LLM knows so much about you. You give that to just some random person off the street and it's like, be me. Like, I don't Know the LLM doesn't know anything about you or, like, you just have a normal job. Hey.

Hey, guys.

Welcome.

Oh, looking good in the suit. Let's go.

He was prepared.

Thank you.

I mean, when you come on on this show, you gotta. You gotta dress up, you gotta do the part.

I appreciate it.

I mean, we had. We had quite the lineup today. Paki was on. Nobody showed up in a suit, but you did, which is why I think.

You win the day.

You win the day. Hey, let's go, let's go, let's go. I love it. Super excited to have you here. I mean, we. We've had you on the show informally dozens of. Dozens of times, constantly surfacing, the stories that matter. But I don't know, we've had a big week. I think. Why don't we start. I want to kind of start with maybe kind of extrapolating on your Stripe, Aden point of view.

You.

You covered this last week. Let's start there. And then I want to kind of broaden it and talk about fintech more broadly. There's been some big news, but maybe we start there. What's your takeaway? Yeah, yeah.

What.

What's like, the main takeaway from. You know, I think you've tried to generally stay somewhat impartial. Right. And just sort of like, put the numbers out and let readers take away their. Their own opinion. But, yeah, what. What. What's your. What's your expansion there?

Yeah, so. So the overall headline is the Stripe. Stripe puts out an annual report now. And Adyen's a public company, so they do. They process a similar amount of volume. Stripe is slightly ahead, growing slightly more. It's like 1.4 trillion processed by strip Stripe. And I think, you know, a lot of people look at that and say, okay, well, these are equivalent companies. So it's crazy that stripe trades at 91 and a half billion when Adyen's a public company, trades at 56 billion. So a lot of people said, okay, that's a sign that the private markets are overvaluing Stripe. I don't think that's exactly true. Like, although they have similar processed volumes, their margin profile is different. So, like. Like when you make a transaction on Stripe, Stripe actually charges more than Adyen does, in part because of the types of businesses that Stripe serves. Adyen has a lot of enterprise businesses. Stripe has some smaller businesses. So Stripe most likely actually has greater net revenue than Adyen does. We don't know it because Stripe hasn't posted that publicly, but overall, I think both are amazing. Companies, I think Stripe, you know, people fault them for having more employees, but I actually think it's interesting. I think like Stripe is investing more in R and D and they're growing faster and they have a lot more business lines. So I think both are outstanding companies. I actually have exposure to both, which I'm quite happy about.

Amazing. You got to be the best case scenario is you're conflicted, but the even better scenario is you're double conflicted.

Double conflicted.

And they're both ripping.

Yeah, they're both ripping. I'm happy to hear that. Where do you think one Stripe's had this amazing ability to build a behemoth by betting on. Basically betting on these super early stage companies. Right. Many of their biggest customers today were startups when they were all going through YC together. And that's turned out to be a fantastic strategy. Is part of the reason that Stripe could be worth significantly more than Adyen right now is that the sort of general investor base believes that they'll be able to take customers away from Adyen, these sort of bigger enterprise players. Because all the marketing, you know, Stripe has been able to take these two lines, right. They've got Stripe Atlas. So they're going to get the next generation of companies.

Yeah.

But then simultaneously when you see their out of home ads today, it's all oriented around hey, we, we signed Hertz Rent a car. Right.

Totally.

Clearly marketing. And so do you see Stripe's. What are Stripe's biggest future opportunities? Enterprise and sort of beyond.

Yeah.

So you're absolutely right. So Stripe does a phenomenal job of getting all early stage startups or a huge percentage of early stage startups. And actually this business, it started like almost 15 years ago now. And at that time your CTO was not making the decision on who you chose for payment processing. That was not a CTO's decision. That decision was made by if you had a CFO as a CFO or it was like the CEO because it was, it was a money decision. And then what Stripe did is they said we're going to save you so much time and energy in getting a payment processor up and running that it's going to be the CTO's decision. And the CTO is a little less price sensitive and is going to go with the best option that saves them time and engineering resources. So Stripe charged a little bit more money than you would pay if you went somewhere else. But it was transparent and you knew what you were paying. And then along the way, a lot of those early Companies that they signed ended up growing into massive behemoths doing many billions of revenue. And so that was awesome for struck Stripe but now Stripe is also saying okay, like we got those customers that started with us when they were small and grew, grew up. But to your point, the on the out of home and like when they're at conferences and stuff, they are trying to attract these other behemoths as well. And so you know, I think they have part of Amazon's business. They have. Shopify is large in the. I think if you look at in aggregated all the sellers one then Shopify is probably the largest single opportunity for Stripe. But it's made up of thousands or many more than that of smaller individual retailers.

Yeah, that makes sense. Obviously they're making a push into stablecoins. What do you think they're. I think it was very smart to identify that hey, what is the stablecoin developer tool that has the most traction that's really working and just pay kind of any price to get that and then bolt that on. Right. That's basically what happened. What do you think, what's your thesis around Stripe and stablecoins? They obviously wanted to own that sort of asset and have exposure to it, but it's not like they're exactly rolling it across out across the entire portfolio today. But what do you think that rollout actually looks like? Like.

So yeah, one thing that's kind of interesting is like how this came to be. So one kind of funny thing is I think the Bridge Stripe acquisition was announced, I don't know, three or four months ago.

Yeah.

And literally in the next month I was getting five to ten stablecoin pitches per week. It's amazing how, how quickly that happens. Like as soon as some, some large acquisition happen happens, you're instantly VCs are getting pitched all sorts of companies around that space and everybody thinks, you know, because Stripe made this acquisition, now the space is super hot. I think what actually happened here is pretty interesting. I think like Bridge is a very, a great company. I think what happened is they. So SpaceX had this problem with Starlink. So Starlink Link is an international ISP accepting payments in developing markets. Developing markets are really hard to accept. Payments in traditional banking infrastructure totally sucks, is slow. It was blocking transactions like traditional infrastructure in some of these markets was blocking transactions. So SpaceX said, okay, we're looking for a solution. I don't know if Sean McGuire was involved at all, but Sean is close with SpaceX, is close with, was an investor in Bridge and So Bridge, you.

Can imagine between raging, fighting the culture war on X, he was also doing the side deal to get the bridge SpaceX thing to happen. I'm just saying there's a world.

The man contains multitudes. Man of many talents. For sure. Sure. Yeah. Do you want to finish?

And I have a. I think, like, I think SpaceX using stable coins was a big moment and I think a lot of other people said, oh, like we're having this issue too. SpaceX is using stable Coins with the Bridge. Yeah, I think that was actually super instrumental for that.

Even the scale AI example like really concretized it for me where it was like, oh, it's very clear that you're paying a bunch of people in international Philippines. I paid video editors internationally using stablecoins and just because like it's, it's so much easier for them to get the money. And so I think as soon as you have that, it's very hard to be a skeptic about it because you're like, okay, I actually used it. It worked. It was, it was, it was what everyone's been talking about for a very long time about easier, faster, lower fees, et cetera. But I wanted to flip it around for you and ask, you know, you know, in consumer tech you always have like, oh, Zuck's going to kill you. You do you feel like, you know, you get these Bridge pitches. Post Bridge acquisition, is there, is there any fear like, oh, Stripe is going to build that? Is that a vibe that you see among early stage fintech companies? Because there's been a lot of successful fintech startups. Also, Stripe is a founder led Decacorn that is very able to move quickly.

Yeah, I do think, I do think there's some of that. But, but I think that there are other. There are areas in which people have been able to build great businesses that Stripe was competing actually, you know, kind of crazy, maybe blasphemous to talk about, but one of your sponsors here and friends of ours, Ramp, you know, Stripe ended up investing in Ramp. Stripe, as you may recall, had a competing product.

Totally.

So.

So it's not like you can't beat Stripe at anything they do. There are a lot of businesses that are going after well.

Stripe also had a stablecoin internal stablecoin team that had been working for a while, so.

So while Stripe, you know, those guys are super sharp and as you said, founder led, my brother works there. You know, I'm, I'm, I'm all about Stripe. Love it. But I think there are plenty of opportunities to build businesses that go after businesses that Stripe is in. And Stripe has a core focus area that they need that they're doing phenomenally well at and they're doing a bunch of other stuff that I think there are opportunities to compete with them on.

Just don't start a high end publishing company because they will kill you. I would not touch it with a 10 foot pole. That industry, I think that's the one that they just have completely locked up, monopolized and they will actually break your legs if you.

Yeah, the Irish Mafia.

The Irish will come out.

We should just hope Stripe does not launch a podcast because game over.

Yeah.

Others.

Yeah, yeah, very true. What you posted a day or two ago about the general catalyst IPO and sort of rumors around that. How do you talk about, you know, I don't know if you, you know, speak generally. You don't need to give us any sort of inside baseball on it, but how do you think the sort of fee structures work when a venture fund goes public? And, and do you think that's going to impact GC's ability? Is it going to be good for GC's ability to recruit top investors because there's more liquidity? Is it going to be bad in the sense that people that really want to bet on themselves are like, oh, I could go work for BTV and get a bunch of carry and I trust my picking ability and I can make them a lot more getting actual carry. How does that unfold?

I think on the latter part, I think like these mega funds, we'll call them the like, you know, double digit billion a going out to raise 5 to 10 each time. They're already huge behemoths and like somebody who is considering working at them should not be considering working for us. Like we're, we're, we're playing a different game. Yeah, it's like, you know, you're, you're a seed or series A startup and you interview somebody who's like. And you're like, who are they? Who are you considering? And they're like, well I'm considering meta Stripe. And you guys, I, I'm like, get out of the room dude. Don't waste my time.

We just had this. It makes so much sense.

So I think, you know, I think we play a different game. Like they're in the asset accumulation game and going public only furthers that.

Sure.

Where like they're going to make a lot of their money off of management fees from these billions of dollars they collect and you know, returns like They've had some great returns along the way. You know, they led Stripes Series B at I think a $500 million valuation. It's now worth 91 billion. So obviously they've done phenomenally well there. They have a few other bangers that they've had through the years, Livongo among, amongst others. So I think in the past they've had some pretty good returns. I think in the future it becomes more of an asset accumulation game. And if I think about how we as btv, like if we're, if we're pitching or we're trying to sell a startup to take our money, it's like look like we're returns motivated, we're driven by you being successful. They're just, and, and like you're really meaningful to us versus if, if it's a multi stage firm, it's like take their money later. Like they're not, they're not as driven by there.

Yeah, they'll always be there. We won't be.

Yeah, yeah, exactly. But I think it's interesting. I think you're going to see more funds ipo. Frankly, I don't think this is the last one. I think, you know, it's certainly possible that Andreessen could IPO and, and any of the mega funds could.

Yeah, now that makes sense.

Especially if they're already set up. Right? Yeah, exactly.

You have to be feeling pretty good lately given that fintech is, is back. I'm sure you had, I'm sure you had a. Now I remember this. In late early 2023, FTX had collapsed. I was running a fintech at the time that had digital asset features and traditional fiat features. And it just was like, where do we really go from here? Brex at the time was burning, spending like 800 million a year to make. It was totally inverted, right? It was like 500 million in revenue on 800 million of expenses. I was, was like, is this category like, you know, where do we go from here? Right. It was sort of a dark time. You guys rode through it. You know, crypto is really good at this, right? Like crypto VCs like the market's down there. Like I'm going to get paid if I just hang on. VCs typically are like, you know, you probably had a lot of fair weather fintech investors that were like, we're going to go and do other categories. How, where do you think the biggest opportunities are in fintech today? And yeah, I'd even be curious, you know, without naming names out of the last few deals that you've done. Can you kind of, kind of talk about the, the investment areas?

Yeah, sure, sure, sure. So I'd say, like, FinTech overall, look, it's been, it's been a crazy time. We started this fund five and a half years ago. It's been a roller coaster, you know, and I've been investing in fintech full time since 2016. Nobody gave a shit about us then. Then, you know, Fast forward to 2021. We were the belt, the ball. Everybody, everybody wanted to invest in fintech. People were like begging us to give them advance notice on deals we did. And then investing like months after us at, in some cases, like 15 times the valuation. It was absolutely bonkers. Stupid, frankly.

Good for fundraising, I'm sure.

Yeah, you know, good for fundraising. Actually, not actually, not actually good for those companies. Too much money.

Money, sure.

And so, and then what happened was an overcorrection in 2022 and 2023. And in part because those companies had so much money, they didn't have to find PMF. Like, it was, it wasn't PMF or die, it was PMF or survive. Because you raise $100 million.

Yeah, yeah, yeah. For coast for five years.

Yeah, exactly. And so, so, you know, fortunately, most of the companies in our portfolio, like, they had enough money to survive and then they didn't burn too much. And they're now, like, now they're having killer years. Like, a lot of our companies actually kind of struggled in 22 and 23, but then 24 was a banger year and like, especially the second half, I think it was just coming out of that whiplash. And you saw in the public markets too, like, if you look at fintech companies 22 and 23, they were totally in the, in the doldrums.

Yeah, I was just explaining, I was just explaining to John that Square bought Afterpay for 29 billion and then was worth less than 2020, like 25 billion combined, like less than a year later. I mean, one of the, One of the most, one of the most devastating acquisitions ever in recent memory, by the way.

That's a fun topic. So after pay. So the cool thing about that one is our friends at Matrix, Dana over there, when they invested in Afterpay, I believe it was a $80 million public company. Matrix led the a. It was an Australian.

They were already. They were already raised money and raising money. Australia just meant you go public. There's a lot of Canadian companies like that. I see them all the time where it's like, oh, it's $100 million company and they just happen to be public because, because like that's how you get a deal done. If you're raising $5 million, like you have to go public because I want all of the oversight and I want all the accounting and I want all the audits and so you better just be public if you want me to underwrite this. Yeah.

So. So what a banger of a deal like they invested, any of us could have invested in.

Yeah.

And then like I don't know, I don't how many years later it's four or five years later, sells for $30 billion. I think when all said and done, what happened was it got announced at 30 billion but by the time it closed, Square stock had already dropped a lot. So it was like half as much. Still quite a banger.

Yeah.

Yeah.

Amazing how that's why they brought in.

TJ to find the next one, right?

Yeah, yeah, yep. So there was a bunch of, you know, bunch of businesses started super low rate environment that, that worked in that, in that sort of setting and then sort of started to not work work in 2023 and beyond. How are you advising your founders around just are, are you telling them like plan like this is the new normal? You know, it's been easy to imagine a situation where Trump just lays on the pressure to drop rates. But. And then, and this reminds me, you have a portfolio company, Mercury, that generates, you know, basically like really obscene levels of ebitda, but it's predicated on this sort of fed funds rate that they don't control. Right. So they've got a fantastic product. But so yeah, how are you advising your portfolio companies around the sort of rate environment given that so much of the returns in fintech are driven by finding that perfect balance.

Yeah, it's true. And I would say overall all lower rates are great for us. We have Mercury and one other portfolio company, Relay, that are benefited by having higher interest rates. It's because they're sitting on deposits. So you know, they, they, that's how they make a lot of their money. It's tricky for both those companies. Like if you think about to your point, they're printing money, but investors have to think about, okay, like what is the rate that we can make, we can assume is going to be the case going forward. It's really hard to predict these things. I don't think it's going to be back to where it was in 2021 anytime soon, if ever. So.

But at the same time you could totally imagine like you Know like a period in the next decade where we have effectively zero interest rates for like 5 years plus like post some sort of recession, like.

Yeah. And that was why when the, when the Mercury News came out and you know, they were getting a $3 billion valuation and everybody's like, oh, this is great because it's 2x whatever they got priced in 2021, I was looking at that and saying they're not really getting credit for that.

Oh, totally.

Profit at all. They may as well. Like there's, you know, other companies that are losing $200 million a year, much less making $200 million a year that are getting priced like that.

So fundamentally America just has a lot of debt and keeping a high interest rate is not fun when you, yeah.

Totally see a lot of pressure from traffic.

I think there will, at some point in the future of American history, we will see low interest rates.

Yeah. The next, the next grift. There's been one grift every two weeks, but the next might be dropping, dropping rates just long enough to refinance the whole Trump.

Yeah.

You know, but anyway, so your, your general position is like, assume they're going to be somewhere between here and 2% and you got to make your business model work kind of anywhere in that range.

Sure, yeah, totally. And one thing that's interesting is like Mercury started before, like Mercury was making a large portion of their revenue off of the rate. And then in 2020, rates dropped, they lost a huge portion of their revenue and then actually like built up a pretty substantial interchange revenue business and like kind of, I don't remember the exact amount, but like in March 2020, rates dropped. Mercury lost a shitload of the revenue. And I, I believe that like two or three months later they were back up to where they were before.

Yeah, yeah, that makes sense. Since it's the, the topic of the last 24 hours. I would love your, I would love your take on the strategic scam and gambling.

Yeah, strategic crypto reserve.

Yeah, yeah, yeah, yeah.

I think, I think it's total bullshit. It's like a, it's a classic big government idea that masquerades as some sort of like forward thinking policy. You can say we're innovative or whatever, but it's actually quite the opposite. We're literally handling, handing public funds over to like, you know, private cronies and wealthy people like myself.

Yeah, you said, you said your single biggest position, personal position is bitcoin. You're, you're actually. And the craziest thing is, you know, we started the show today and we realized that, that the bitcoin price had almost round trip back to which is the biggest bear signal that we the government announces, hey, we're going to be investing in crypto now.

It doesn't move the market materially or in any permanent way. It's crazy, really priced in fully. It's ridiculous.

I think like my, my point of view is on this and a bunch of the other stuff, stuff that, that has Trump has done this administration. I feel like, you know, it seems like a short term political win, but long term it's bad. And in this case I think this crypto reserve undermines the dollar's position which is like fucking awesome. The dollar is the global reserve currency and this sends some sort of confusing signal about our own confidence in USD.

Yeah.

And like other countries hold hold dollars because they're stable, consistent and predictable.

Yeah.

And you know, I think you could make the case for bitcoin. I wouldn't personally sure. But you could make the case that bitcoin is the new gold and it's some sort of hedge against inflation or currency instability. I don't think you can make the case for fucking Cardano, you know, xrp. Like what is this? It's, it's, it's, it's basically a taxpayer funded backstop. Now David Sacks came out today against Joe Lonsdale and said it's not taxpayer funded. I think that's, let's say there's confiscating coins and holding them. It's the same thing. Like if you like previously when they confiscated, they sold.

Yep, it's the same thing.

Like it makes no difference.

What about the argument of like you know, during the bank bailouts in 2008, obviously like it looks very bad because it's like taxpayer money is going into the balance sheet of bank of America, Wells Fargo, save those companies. But if you look back historically now and you read the Tim Geithner book, it's like, well, the banks paid them back with interest and the taxpayer actually made money on that. What about that argument? Yeah.

So what's the. But what's the argument for the crypto reserve?

Because the argument is that is that it could be net positive to the tax taxpayer. Like the taxpayer. Yes, the taxpayer does, does put money into this thing essentially. But if it goes up, then they wind up paying less taxes down the road when, when the government wants to fund something because hey, we don't need to tax you as much because we went 10x long on x, Y or.

Z. Yeah, it's just a question of do you trust the government to allocate our dollars or do we trust individuals? And so I think it's like a personal freedoms issue. So it's kind of strange to have it come from the Republican party frankly.

Yeah, totally. It is odd.

Anyway, what talk to us about you've got an accelerator which vertical specific accelerator makes a ton of sense. It, you know if you're, you know YC is an amazing product and platform.

And why are you locking them in cages though?

Yeah, yeah, yeah, no that's the real question. Why aren't you locking them and putting a live stream on it? Yeah, no, I don't think that. I think people are sick at this point of the PMF or die approach applied to financial products. We very clearly did not want that because there's been some bad things that happen when you just try to. But what kind of companies are you looking for? I imagine that it would be insane if somebody had the opportunity to go through your guys accelerator and they're building in FinTech to choose YC not because YC is not great but just because you guys can connect them to this hyper, hyper specific network.

Yeah, yeah I totally agree. YC is great. Look I ran an accelerator 2016-2018 YC I think Gary said that they had 4 and a half percent of their companies became unicorns. Actually in mine 7% became unicorns. So we have a good success.

Congratulations.

So we have a good success rate. I think the idea is like look if you're building in an area that we have expertise get yes. Ring the gong with expertise we could be helpful. Now you asked what areas I'm interested in. I'd say look we're sort of founder driven first and foremost but there are some areas we've invested in a lot. One is this very unsurprisingly we're investing in AI companies. We've done a bunch recently in the services as software space.

Space, cool.

Including one actually we did with previous guest on here Keith. We have a company called Basis that's a AI for accounting company that is able to do a lot of the work that a low level accountant does. We led the seed last year, Keith led the A Recently we've done a bunch of others in that space. We did one in the SMB loan underwriting space called kaj. We did one in the mortgage space case, did one in insurance. And all these companies basically are using AI but embedding themselves deeply into a workflow and solving a problem for somebody who probably could not Build it themselves, which is exciting, I think. You know my worry with a lot of these AI companies, you've seen all the charts, 0 to 100 million revenue. I think a lot of them that aren't as deeply embedding into a workflow I think are in danger of going from 0 to 100 down.

Easy come, easy go.

Yeah, so, so we're trying to invest in companies that we think have some durable, lasting value, some data distribution and embedded workflow value. Those kind of things are easy to find in fintech.

Yeah. Have you touched any of these broader sort of more PE style roll ups? You know, there's some opportunities in payments obviously for that, that, have you gone into that space at all yet? And what's your general point of view there?

We haven't, we haven't done a whole lot of these PE roll up style things. We've done a couple things that are similar. We did one in the, in the health care space that's doing that works in private practices called Morocca. I think honestly jury's out on those kind of businesses and raising venture dollars to do so.

So probably works better for the asset accumulator harvester model where you know, you can deploy a lot of capital with, with no, you know, lower risk. Unless you're saying, you know, we're going to replace every employee with AI. You know, it's easier to say we're going to buy a bunch of companies at fair prices and, and get some efficiency. But that's basically just private equity, which is not the business that you're in.

Not the business that we're in. That's exactly right. And so I, I, I completely agree. I, I was going to bring up like General Catalyst is buying a hospital system in Akron, Ohio that's they're in a different business than we're in and I can see why it makes sense for them.

Really quickly you say is buying. Can you break down like I heard about that deal like last year. Why is it taking so long? Like what's going on with that? What is, is this like a regulatory approval type of situation?

Yeah, I'd imagine. I don't know, I don't know any information, but I'd imagine when you're buying a health system, there's a ton of that you have to do. There's like, there's pushback from the community. I noticed like immediately like when we heard about it. I also saw articles like, hey, this is up. Like a venture capital firm is buying something that should be for the public good.

Yeah, there's been a lot of pushback on like, oh, private equity bought this, you know, local clinic and like made it worse or like reduce the quality of care to like, maximize private profits. So it's always been controversial. It'll be very interesting to see how General Catalyst position themselves in the IPO. I mean, Citadel was thinking about going IPO back like, I don't know, 10 years ago. And they, they like hedge funds were seen as like villains of the.

Yeah.

Of the crash. So they bought an investment bank to try and make themselves look better. Which is hilarious to me because it's like, like, oh yeah, we're, we're not the bad hedge fund guys. We're the good invest in bankers. Both of those are like kind of villainized already.

It's bad. If you go banker to make yourself look better. That's bad.

Exactly.

That's great.

So they, Yeah, I think they paid McKinsey like a tough fortune to like, you know, advise them on how to position their brand going into the ipo. And then they just kept it private and then they created Citadel securities and printed it was great.

Yeah, you're probably got a jump because I know we had 30 minutes. Is there any IPOs that you're. You're pretty convicted are happening and, and 2025 and FinTech specifically. I mean, there have been rumors around Chime and Klarna and you know, Chime.

And CL are the biggest, I think where Chime prices is going to be, you know, very important to the fintech world. I think, like, I think in the private markets it's currently trading at 10, but people think, you know, people think it's going to go out strong, longer. It's going to have a huge impact on, on me and our portfolio. Actually we have, we have some other companies that are in a similar space. So I'm, I'm really looking forward to that one. Klarna, I think, you know, I actually don't know where it's going to price. Karna has something interesting. You know, they raised at a crazy valuation and then did a massive down round, which is not necessarily bad thing, especially for them. Klarna actually does not have liquidation preferences. Crazy enough. So interesting. It actually was just like they also.

Replaced 100% of their employees with AI. Right. Supposedly it's just the CEO and Claude 3 sonnet cursor.

Actually now somebody should go buy a peloton and see if, see if a human bangs on their door or it's just a chatbot being like, hey, please pay this back no, that's fine. What. But chime. What was their la.

What was.

Was their 2021 or 2022 valuation? It must. Wasn't it? Or, you know, 4x. Yeah. 25 billion in 20.

25 billion, yeah.

Nice.

And I remember it trading privately at like 30.

Yeah, yeah. Cool.

Very cool. Well, we will have to definitely have you back on. This is super fun, guys.

Enjoyed.

You're welcome. Any week. And thanks for jumping on.

Appreciate it. Cheers.

Bye.

Cheers.

See you later. Bye.

Fantastic.

Should we close out with. We're going so long. The lights are turning off because we're running out of battery and we're really pushing it to the limit today. It's great. Should we close out with some timeline? What do you want to do? We got. We got to drive around in a Ferrari later. You know, it's a hard life out here.

More to come there also.

Not kidding. Did you see the Mr. Beast backlash? I thought this is kind of interesting.

I did, didn't.

So Mr. Beast did a podcast on Diary of a CEO. Have you ever listened to this podcast, Diary of a CEO?

No, but it's like the biggest.

It's the biggest business podcast and no one in Silicon Valley listens to it. It's very odd. I mean, it's like, it's popular, but it's popular just with like a very different crowd, I guess. I think it has a lot to do with the fact that it's not an American show. The guy's British. And so even though he has. He has great guests, like, I mean.

Brian Chest, he also has like a Web3 startup.

He's.

Yeah, yeah.

Oh, I had no idea.

The host.

Really?

Yeah.

Wow. He should have stuck to supplements, I guess.

But anyway, I'm going to let you read through this.

I'm going to use the restroom. Yeah, sure. So Mr. Beast goes on Diary of a CEO and then Kotaku writes an article about Mr. Beast going on the show and says, Mr. Beast, life is, quote, so much easier when you're broke. And of course, this is very controversial. People get very upset. There's a viral post saying f you. It gets like 100 million likes. Everyone sees it as very, you know, negative and flippant that this rich guy would come on and say, ah, it's life's so much easier when you're broke. But that's not actually what he said and it's very interesting. So Jack Appleby breaks it down. He says, this might be an all time PR team screw up. Mr. Beast went on Diary of a CEO podcast the podcast PR team team pitched Jack Appleby and other writers to cover it, which is something most. Most podcast. But most people don't know about podcasts. But when you go on a podcast, there's a PR team for, you know, trying to amplify the attention that this guest gets. It's all very, very planned out, very insider. Plant industry plant. And so when Kotaku wrote about it, they used a pretty harsh quote. He said, I'd. I'd have done the same, except it's not a real quote quote. The podcast publicity team somehow confused Mr. Beast saying bro as broke. So maybe they use, like, AI dictation or something. But in a moment where he's just saying life is harder when you travel, they misquote him and made him sound like a jerk when it's not the case at all. And it's all not naturally gone viral with the misinformation side of it all because the publicity team tried to get coverage and they screwed up. So now Mr. B says is taking heat. Kotaku is taking heat when neither of them deserve it. And so the real quote was, this is killing me, to be honest. It was, like, so much easier when you're broke if you don't travel constantly. And that's not what he was saying. He was saying, it's so much easier when bro, like, you're not traveling. And it's fascinating. And of course, his original point is correct, but the Straussian reading of all this is, of course, that life is so much easier when you're broke and that with wealth comes responsibility.

Yeah.

And that's great. And that what he's. What he's getting canceled for. He should have said the quiet part loud and that everyone else is wrong.

Yeah, it's true. He's also built up a brand where he's sort of almost promised his audience that he's reinvesting, like, 101% of whatever he makes doesn't fit with his brand at all. All.

But, I mean, Elon has said this and not back down from it, where he said, like, look, I have all this money. I'm the world's richest man. I'm miserable. You don't want to be me. Like, I'm not having fun. Like, I'm. I'm like. Like I'm having. I'm doing. There's forward motion, there's energy. But I wouldn't call what I'm doing fun. And that's fine. That's good.

That's also a choice. You don't have to be fun. He could Retire, buy the biggest yacht and not ever talk to the.

Exactly, exactly. Yeah, he could totally didn't have to buy and plenty of people have. The Google founders did for a long time. Bill Gates, you could say, has kind of been on that tip for a long time. Even Ellison is kind of chilling from time to time. Like there are people that choose to be much less aggressive.

Yeah. Jason Calacanis was the first investor in Uber. One of the first. And now he's deciding to be in this, you know, go to war with defense tech founder.

You know, he does not need to do that. You know, he could, he could pass on that and, and yet he doesn't. He keeps, he keeps kicking the beast and everyone involved in that seems to love fighting. Love fight. It's very annoying.

Makes sense.

I'm totally over it anyway.

Over it.

Should we stay on the topic of vc? Liz Wessel, ramp investor. Congratulations to Liz. She was an angel, she says. Has anyone written about the trend over the last six to 12 months of founders 18 to 26 years old, raising VC to buy old school businesses and inject AI into to them? I've seen so many pitches in every vertical on this in 2024 and it looks like still in 2025. I'm curious to learn how VCs who have done these seed and A rounds, often priced pretty high, are thinking about this approach. Blog posts or podcast wrecks. Appreciate it. Well, let's just do a podcast about it right now.

Let's do it.

Here we go.

Let's do it.

So Liz, we got the answer for you. We're going to go to Jordi, an expert in this exact topic. Jordy, break it down for us. Would you invest in a 18 year old founder buying a old school business, injecting AI into it and the seed round is that you know you're going to get.

You had me at AI, Joe.

What? I'm 99 pre.

I'm in. Send me the wire instructions.

Fantastic.

No, so there's two things that happen. There's two things that happened. The, the concept of the search fund exploded because the idea of these sort of old school irl, real world businesses.

It wasn't a Silicon Valley thing.

It wasn't a Silicon Valley thing. Yeah. It was an HBS saying, hey, you could have gone to Goldman. Instead you're going to take 5 million bucks and try to turn it into $15 million in, you know, five years. Something like that. So that became popular and then the, the AI sort of enabled roll up, you know, started blowing up and And Liz is right. There's just tons and tons and tons of these companies. My concern, you know, generally I think we're going to see, we're going to see returns in the category. It's not going to be one where, you know, every, everything that gets basically zeroed out. But that being said, you're going into, you're, you're taking venture dollars and you're going into this sort of private equity world which is like one of the most efficient markets in the world. Right. Private equity has spent decades honing the ability to buy assets, make them better and then sell them for a higher price. And so by going in there and saying it's a huge bet to say we're going to be able to replace 80 to 90% of the employees with AI right. When the models are good, but they're not agentic yet for the most part. And so my concern is that you're going to have. It seems like the most likely outcome is some of the big winners end up being, the big winners still end up not being venture winners.

Right.

And that they get a nice, nice 3-5x and on invested capital, but it's not enough to sort of return any type of fund.

Yeah, I think that's a good point. I'm trying to think of like the private equity deals that I've seen like kind of up close and personal and I'm going back to like Bain Capital. When I was there. They, the historical like banger for them was Staples.

Yeah.

You know, Staples stores. And that was not a digital transformation so story.

Yep.

Like that was very much a nuts and bolts like what should the capital structure be? How do we lever this thing up properly? How do we close underperforming stores, ramp up over performing stores? It was not, it was not, hey, the Internet's here. I mean this would this happened like the 90s. Like this is the Bain Capital story. So they, I mean they think they owned, I think they owned Staples from like the 80s 90s to the early 2000s. Like the Internet was a thing they there, there is a world where you could be like buy Staples and turn it into Amazon.com.

Yep.

But I'm sure they launched an E commerce site at that point. But it didn't like materially change the business. Same thing. They bought who they buy Toys R Us and that one, I think they got out but eventually it went bankrupt and it was not a digital transformation story. And so yeah, the private equity thing, it's like the, the, the. Even though there's been A trend of like the Internet. For a long time there, like that hasn't been the story of private equity. In my, yeah. In my, in everything I've read over the past, like few decades, it hasn't been, oh, let's like, let's go and buy the hospital network and we're going to improve the user experience flows of the payments plan or whatever.

Yeah.

It hasn't been, let's use the talent.

The challenge is when you're buying a legacy sort of SMB.

Yeah.

Typically the founders retiring.

Yeah.

And the reason that that company, you know, outsiders will look at the business and say, oh, they run on pen and paper.

Yeah.

They're not factoring in the fact that that founder was a staple of their local community, would work 12 hours a day for decades and put their blood, sweat and tears into the business. And so you would get this effect of you're ripping out this sort of owner operator who's, who's made their life's work this company and then you're slapping some AI on it. And I don't know, I think you almost are better off with the owner operator.

Right.

And so the value and business, when you're buying, buying businesses that are being valued on cash flows, you need to make them grow faster and you need to increase earnings, otherwise the value is less.

Yes.

And so you can rip out costs to increase earnings, but the sort of replacement, what you're ripping out is human capital and injecting artificial intelligence. It's unclear what that trade is going to look like in the short term.

The other thing is where the value capture lies because. So hold on on to that second point. But the, the interesting thing is like, like, oh, they're doing stuff on, on pen and paper. Well, if they're paying somebody, you know, $10 an hour and they're only spending one hour a month on it, well, that's 10 bucks a month. DocuSign is going to hit you up for 100 bucks a month. You're going to 10x your bill by going not paper. Right.

Yeah.

And so there's a question of like, how efficiently priced are the digital tools? Because if they're really efficiently with these, they're going to take their pound of flash.

Small businesses are like, you have the niece and nephew of the founder who kind of work for like below minimum wage. They're getting ripped out too. They're not sticking around.

Yeah, yeah, yeah. We're the grandchildren coming in on the weekend and like, you know, racking servers.

I've got a buddy in Malibu who's like, has a multi hundred million dollar like healthcare software focused PE fund and he, he has like, people don't realize like how, how precise these managers are. And then he does not care to try to get a 10x. He's like, I just want to get, you know, 2x. I want a 2x and that's really all that I care about. But I'm never going to miss. And I'm just like only. And so you're coming in and you're competing with an operator where you're going to have to pay. You know, people that are selling their businesses, usually they have some type of long term incentive, incentive to make sure the acquisition is successful. Do they want to sell to the guy that's a proven operator that's like literally like I'm gonna go out of business if this doesn't, my fund is going to be damaged if this doesn't work. Or do you want the 22 year old that's like, I'm rolling up pools. I saw a pool roll up that was like, and I think it's awesome. It's a cool, like, it's a cool shot pool. But you know, I, I, I'm, it's unclear if public pools. No, no, like residential pools. So like if you can, if no. So you can go on a biz, buy, sell or some of these other sites right now and you can buy a pool route and it'll be like basically the client, the clients. And so these things trade over time where you can go and say, yeah, I'm gonna buy, you know, thousands of pool clients and outside of Boston. Right. And roll those up. The challenge is like that the, the competitive pressure on a pool route is so intense that anybody with, you know, $100 worth of equipment can clean pools. Right. And so it's not, it's certainly not a monopoly type environment.

Totally. Yeah. Yeah. I mean I can see a lot of VCs getting burnt here mostly because like, yeah, like even if you wind up shifting from look, we have one 100x in our, in our fund to everything's a 3x. And the math and you work out the math and the IRR should be the same. That's not the entire purpose of a single fund because there's plenty of, there's plenty of situations where yeah, you want to get a seed, you want to get a seed into some company and then you want to pile it into, pile into it with your growth fund.

Yeah.

And if you're just getting a 2x, you're not going to pile into it and scale it. And so it's kind of just this. This hope that that AI will transform private equity. And maybe it will, but we don't know. We haven't seen it yet. Yeah.

And the risk for venture funds is that you're running a traditional venture model, and then you say, oh, we're going to put 20% of our fund into a bunch of rollups, and then you get a banger and it's a 4X and you're like, great. We still are going to underperform.

Right.

So anyways, I think venture people need to understand that we like to go into other industries and sort of say, like, oh, like, you guys have been doing this all wrong.

Expeditionary or boondoggles. I mean, they're basically boondoggles. Yeah, maybe. Hopefully it works out. I hope they figure it out. Let's go to Molly o' Shea. It's a fun one, I think. I think we should take this into account. We've been. We've been podcasting pretty hard. I think we should announce that we're taking a break. We're going to take maybe 18 hours off.

Yeah.

So you won't hear from us for a while.

Yeah. We're going to end this stream eventually, and it's going to be about 18 hours, start up again.

Yeah.

So we're going to spend time with our family.

Yeah, yeah. Really recharge the batteries.

Yep.

Deep breaths and stuff. But then we'll be right back at it. But let's. Let's close out with this post from Molly o' Shea. She says, after further analysis, I've come to the difficult decision to go into hermit mode. I will be refraining from any generalized social interaction or networking like events, travel, conferences, and coffee chats for the foreseeable future. If you want to hang out, sign up, link in my bio. My team will get back to you.

Brave, Molly.

Brave.

You're brave.

I wonder who inspired that.

I wonder who inspired that.

I wonder who inspired that. No, no. We love Molly on this show.

And, yeah, she's our default answer when we get invited to events now, is come on the show covered on the show?

If you invite us to event, we're going to say no. But if you tweet about it, we'll cover it on the show. If you want to call in, too.

Everybody wins.

But you're probably not going to get us out of this chair because it's so much fun.

It's just too much fun.

It's too much fun. You never want to Turn off the stream. Are there any other bangers you want?

What was your sleep score last night? Because I had a rough one.

I had a good one. I got a ton of sleep.

It takes me having the worst night of the last 30 days for you to. For you to do better. I got a 72.

I got a 94. I slept eight hours and seven minutes. Let's go.

You put up. You consistently do eight hours. You got the laughter.

That's great. Yeah. Put up huge numbers. Built like a bear. Sleep like a bear. Just hibernate every once in a while. I have. I've been a bit under the weather so I had to go to bed early. Still got up at 6. Got in.

So I had a funny. So. So I didn't set an alarm. Yeah, I use the eight sleep alarm. I didn't set it yesterday day.

Yeah, you shouldn't have told me about that because if you're competing with me now, I got an edge. Yeah, you got to keep these features to.

Well, I got some other secret features you have to share with the audience. But you.

But not me. I'll have to do cover my ears.

No, but I, I didn't turn on the, the warming feature at the end of the night. And so it was like impossible to get out of bed yesterday even though I was sleeping in like two hours past, like whenever we normally get up. So anyways, go to.

I forgot my transition. My original, original transition was when we go to the moon with Firefly. We'll. We'll sleep on an eight sleep on the moon or something. But somehow I missed that.

I don't know what we are interested in competing with the audience. So go to 8sleep.com tvpn.

Yep.

You can get a discount on 8sleep and then DM US, we'll get in a group and we'll all sort of motivate each other to put up crazy numbers. Um, anyways, we got some more timeline.

I think I, I think let's do more time timeline tomorrow. I think we're. I think we're good at this point. It's getting late.

Good, good.

We got a promotion to film.

Yeah. We are gonna go drive a Ferrari around which you'll hear more about soon.

Fantastic. Thanks for watching. Leave us five stars on Apple podcasts and Spotify. Leave in your review.

We gotta do a review of the reviews tomorrow.

Yeah, we should do a review of the reviews. We'll get them up on the show. Show. And thanks for watching. We appreciate you.

Thank you, brothers. We'll see you tomorrow.

See you tomorrow.