The Legacy of Warren Buffett, Bucky Moore, Katherine Boyle, Aditya Agarwal, Molly O'Shea, Augustus Doricko

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

We're back.

Officially back.

Yeah. We are so back. It was never over, but we are back. We enjoyed the weekend in Ojai and it gave us some ideas. You know, Ojai is a very idyllic place, very slow paced. Not country living. Fast paced enough for us. Just the entire place is kind of devoid of finance.

Finance, really.

And so we're launching campaigns.

Those calm, tranquil streets filled with a.

Lot of farmers markets, market a lot.

Of derivatives trading, wine tasting, things like that.

Exactly.

There was this constant thought of what if we brought finance to Ojai?

Yeah. So we're launching a campaign. We're calling it Save Ohio from Stagnation. We're going to petition Goldman Sachs to open an office there.

That's right.

That's really the goal. Get Goldman in there.

I think it would massively stimulate the local economy.

Exactly. Transform it, even. Transform and save it. Ultimately save it from being idyllic and stagnant.

That's right. That's right.

Yeah. If you know someone at Goldman, please kick them the idea. Let's transform Ojai into sort of like a midtown Manhattan vibe.

Really. The next midtown town is what we want.

The next Midtown. Yeah.

There's so much, you know, Midtown is, you know, Manhattan in general is. Is so constrained geographically. Exactly. The vision for Ojai is what if there were no bodies of water stopping, you know, tremendous growth and expansion.

Right.

Just parking lots and condominiums and billionaire. We could build a new billionaires row in Ojai.

That's right.

We'd save Ojai.

That's right. Save Ojai.

Yeah.

We did have a fantastic weekend though.

It was great.

And. But we are certainly happy to be back today.

Locked in. We got a great live.

Locked in.

Yeah, we have a great lineup for you. We'll pull that up.

TVPN lineup.

TVPN lineup. We got five guests. We got Molly o' Shea from Sorcery, Augustus Dirico from Rainmaker, Bucky Moore from Lightspeed, Kathryn Boyle from Andreessen Horowitz and Aditya Aggarwal from South Park Commons. Very excited to talk to all of them starting in about 40 minutes. But we will go through some breaking news also. If you're traveling to Ojai, get on wander. Go to wander.com, find your happy place.

Find your happy place.

Book of Wander.

There's a new wander opening up in Ohio very soon. So you can get on the waitlist.

Yeah, go check it out. Anyway, the news from the weekend was entirely dominated by Warren Buffett. The Wall Street Journal today is. It's just the Warren Buffett edition, basically.

That's right.

Two different articles in the main section, two different articles in the business and finance section. Bunch should have just been wall to.

Wall, to be honest.

Yeah.

They should call it kind of offensive.

That Buffett Street Journal today.

Yeah.

Um, but obviously a fantastic legacy. 60 years as chairman. This was his 60th annual meeting and he kind of teased that maybe he'd step down. He had already announced that he would be transitioning out, so it wasn't a complete surprise, but it seemed like no one really knew that today would be the day. And so it was very exciting. And obviously it triggers a lot of reflections. And so this piece in the Wall Street Journal was particularly interesting. Why there will never be another Warren Buffett. He's been the chief executive of Berkshire Hathaway, of course, the conglomerate he has built into one of the most successful investments in history. There are three reasons why he has no equal and never will. The person, the period, and the package. Let's start with the person. He's not only brilliant, but he has spent nearly his entire long lifetime obsessed with the stock market, especially in his early years as an investor. His unparalleled success depended on unbearable sacrifice for going a normal social and family life. A later writer called the great 17th century philosopher Spinoza the God intoxicated man. Buffett is the stock intoxicated man.

Right.

He bought his first Stock at age 11, devoured information around about companies, reading corporate reports the way most people listen to music. He read a ton of financial statements while other kids played at amusement parks. Buffett was there physically, but mentally and emotionally, he was off in a world of his own. Fixated on tax loss, carryforwards and amortization schedules. We love to see it. Imagine being that obsessed. Imagine enjoying it. That's how we feel about podcasting. Kind of the Warren Buffett of podcasting, the Munger and Buffet of podcasting. Ideally, that's where we want to end. You really should strive to be so driven in your career that when you retire, you retire. You announce your retirement at a stadium to just all the adoring fans.

To applause.

Yes. Applause.

Round of it. Standing ovation.

Yeah. He started when Harry Truman was in the White House. Expertise is rooted in pattern recognition, and Buffett has seen every conceivable pattern, given what I know about his work Habits. I estimate conservatively he has read more than 100,000 financial statements in his more than seven decade career. Years ago, winding up a phone interview, he was talking to the man who wrote this Wall Street Journal op ed or piece and said, hey, I'm reading this book. And Buffett says, oh, I also read it. It was about 50 years ago. And then he starts describing a passage and Buffett's like, wow, yeah, Buffett knows the, knows the exact quote from that book and read almost every sentence verbatim. Yeah. Fantastic.

His parallel exposure to financial information combined with his prodigious memory made Buffett into a human form of artificial intelligence. He could answer almost any query out of his own internal database. That has given him an unparalleled ability to identify the kernel of significance in any new bit of information and, and a durable advantage over other investors. Now that AI is universally available, a person with Buffett's massive command center won't even have an advantage in the future.

Do you think this is true? Do you agree with this? I thought this was an interesting take and I don't agree with it.

Yeah. I don't want to believe that it's true. Right. Because that sort of would imply that Buffett's only advantage is just knowledge, access to information.

Yeah.

And in a world where information has already been widely accessible and freely available for decades, you know, effectively for free, it feels like we would have already, you know, it feels like he would have lost his edge, you know, maybe in the 90s if that was the case.

Yep. So, yeah, there is, there is a remaining question. I wonder how David Senra and like the, you know, modern business historians will see his legacy. Is it purely driven by knowledge? Is it intelligence? Is it contrarian, individual, independent thinking? Is it, is it access to capital and storytelling? Or is it management? Like, he's also great at in, you know, putting the right person in the job and giving him the tools to succeed. So there's a lot of other things that, that go into making successful.

It seems like market timing seems to be, you know, it's really good, is, you know, access to historical information can certainly give you an advantage, maybe in timing markets, but it certainly doesn't seem like it'd be the only thing that gives you an advantage. Otherwise more people would be better at it.

Yeah, yeah, it does seem to, I don't know, it's odd with the market timing thing because it does seem like that would be easy to encode into an algorithm. And yet we haven't seen quantitative hedge funds necessarily apply the Buffett philosophy when they do quantitative investing, they, they usually do it on a much shorter time horizon. So it's kind of interesting. I did like this that he Buffett has said many times that he won the ovarian lottery by being born when he went and where he was. If he born In Omaha just 50 years earlier in 1880, he would have had to invest in livestock instead of stocks. Had he been born in 1930, Omsk instead of Omaha, a little play on words there he wouldn't have owned, he wouldn't have owned railways. He probably would have worked on the Trans Siberian Railway. And so he lucked out being in Omaha in 1930 when there was a big boom. And then also Benjamin Graham, pioneer of security analysis and one of the greatest investors of the past century was it was developing his career right then. So Buffett was able to study under him. And Buffett also began his career before trillions of dollars had poured into the stock market from index funds and other giant institutional investors. He built his phenomenally early track record by his phenomenal early track record by fishing where no one else was even looking to catch anything. He fed on the tiniest plankton on the stock market. He bet big on these small fry. This guy's such a good writer. At various points his investment partnerships had 21% of their total assets in Dempster Mill Manufacturing, a maker of agricultural equipment based in BeatRice, Nebraska and 35% in Sanborn map, a New York based cartography company whose investment portfolio alone was worth more than its stock price. Sometimes it took years.

Such a testament to. You can be an extreme generalist and do very well if you have a deep passion for the craft of investing, which to date have we seen anybody that seemingly loves investing more than Warren Buffett outside of Charlie, Maybe this was a funny comp somebody else shared this online, but they said as Warren Buffett retires. Think about this. In 2024, Warren Buffett's stock portfolio performance was 25%. And in 2024, Nancy Pelosi's stock market performance was 71%. So anyways, strong, strong case for the Pelosi act there.

I do think this is the final takeaway in this piece is interesting because Buffett placed his investments in a package like no other. Talking about the holding company Berkshire. Berkshire Hathaway operates as a publicly traded holding company, a receptacle for whatever he thought was worth owning other publicly traded stocks, treasury bonds, private companies. At one point it was even one of the world's largest holders of silver. Now it holds $330 billion in cash. Berkshire isn't a hedge fund, mutual fund, exchange traded fund or any other conventional investment vehicle. By design, it charges no management fees that would subtract from its returns and no performance incentive fees that would encourage acceptance. Excessive risk taking in pursuit of a big payday. Most investment funds operate under a curse that economists call pro cyclicality. After a fund racks up, racks up a streak of good returns, investors throw money at the fund, forcing its managers to put the new cash to work in a market that is likely becoming overpriced. That hinders future performance. We saw this with venture, obviously, like a bunch of people made a bunch of money on mobile and then they raised huge funds specifically for mobile. We're seeing this in defense tech now. You know, if you got early in and now you're raising like a dedicated defense tech fund is there, Are the assets overpriced now? Maybe it is risky. Yeah. And so with Buffett, when returns falter in a falling market, normally when, when returns falter in a falling market, investors yank their money out, forcing the fund managers to sell as bargains are becoming abundant. This is the problem of pro cyclicality in normal investment fund. Structuring the fund's own investment investors make its performance worse, intensifying the market's ups and downs. Berkshire's only cash flows, however, are internal. Money comes in from or goes out to the assets it owns. Cash can't come pouring in from new investors or get yanked out by fleeing investors at the worst possible times. Because you can only invest in Berkshire by buying shares from someone else in the secondary market, they don't do new stock issuances. And this package has given Buffett a structural advantage that has enabled him to pursue opportunities wherever and whenever he has perceived them. That's a luxury almost no other professional investor has or even wants. So long as most fund managers can earn a lavish living from underperforming the market, the real risk for them will be trying anything different. Pigs will sprout feathers before anyone has the daring to truly emulate Warren Buffett. I love it. That's great. Anyway, if you think you're the next Warren Buffett, get on public.com multi asset investing industry leading yields Trusted by millions.

Trusted by millions. They had their first race yesterday sponsoring Aston Martin.

Aston Martin F1 in Miami.

F1. And thank you to public for betting on us before you bet on Aston Martin. Yeah, really shows we're in good company. And yes, yeah, in good company. It is interesting how many people is there a Curse to call yourself a baby. Berkshire Hathaway. Maybe a few people have dared.

Yes, yes, I know exactly what you're talking about.

It is rough building. You know, this, this whole notably Josh.

Kushner thrive has not drawn that comparison.

Yeah.

Thinking very differently, maybe building something different. But it is interesting because they're like that pro cyclicality thing does feel like a problem in venture. And, and if you have the, if you have the permanent capital vehicle, maybe there's something there that you can grow into over time. But yeah, I mean it's very, it's very different. There aren't like, you know, if you're a traditional vc, you don't have deal flow stuffed with cash flowing assets constantly.

Yeah.

Somebody shows up with a lot of cash flow, you're kind of confused.

Not sure what to do here, bud.

Yeah. Anyway, we should talk a little bit about the CEO in waiting, Greg Abel. He is taking over and at the young age of 60something. 60something.

Imagine being ready for a generation, second generational run.

Yeah, but at the same time, you know, his boss, Warren Buffett is 94 years old. And so yeah, he's like, yeah, that's what I'm saying.

He's got a good 34 years.

Yeah, probably that's the nature of these.

These potentially a lot more.

Yeah. And so Abel will inherit the challenge of overseeing that wide ranging empire while living up to Buffett's seemingly impossible to replicate record in stock picking. Something even Buffett has struggled to do in recent years. He would make a huge mistake trying to be Warren Buffett and he knows that, says Will Danoff, the Fidelity manager who counts Berkshire as a top holding. Shareholders want Greg to be the best Greg Abel he can be. Buffett isn't just an investor. His unique stature allows him to confer legitimacy on damaged businesses in times of crisis, as he famously did when Wal street veered toward potential collapse and to extract a good deal for his shareholders in the process. That's of course the story of bank of America during the financial crisis. It was definitely the next domino to fall after Lehman and Bear Stearns. But Buffett saw something beautiful in the business. He saw something saveable and he came in, kind of bailed them out in the private markets, injected a bunch of cash, and then of course wrote a op ed on the COVID of the Wall Street Journal.

Never let the bank of England America fail.

Never let the bank of America fail. His reputation as a brilliant investor means that many shareholders are content letting Berkshire amass a huge pile of cash because they expect that Buffett will eventually be able to deploy it. Well, no one can completely fill those shoes. Warren's so unique, bill Gates, the Microsoft co founder, said of his close friend. I hope we have leaders like Warren in the future. Buffett's planned departure, combined with the death in 2023 of his close friend and investing partner Charlie Munger, sets Berkshire on a new path. The company's fundamentals remain strong, but Berkshire's investment decisions might no longer carry the same weight. Abel, who is 62, will join other successors with tough acts to follow. Tim Cook filled Apple's top spot after Steve Jobs died and has made a lasting imprint. He drew on his supply chain expertise to expand manufacturing in China and built up a services business at Disney. Bob Chapek took over as CEO for Bob Iger, only to have his uneven tenure cut short by a boardroom coup that resulted in Iger's return.

Battle of the Bob's.

Battle of the Bob's. There's a lot of Bob's over at Disney. It's very fun. Greg will have to be Greg. Said Mark Ohman, a retired Wells Fargo executive and a close friend of Abel's in his adopted Iowa hometown. Berkshire succession plans, one of Wall Street's favorite guessing games, were finally revealed in 2021. So we've known this for four years now when Buffett said Abel would eventually become the next CEO. Buffett had previously said that his son Howard Buffett would someday replace him as chairman, though without an executive role. Until this weekend, many shareholders assumed those handoffs wouldn't take before Buffett's death.

But he honestly, I think it's, I think it's smart to try to make this a phased approach versus, you know, Buffett, you know, were he to pass away. Yeah, without warning, would be probably much worse for shareholders in general and just much more chaotic than saying, hey, I'm gonna, I'm gonna take a step back at the end of this year and here's exactly how we're, you know, phasing out my leadership. So, and knowing Buffy, he will be involved. There's no way this guy is going to stop caring about stocks. There's just no way.

I do hope he's healthy. It would be very, it'd be very unfortunate if this was all like, you know, like how the Pope went out the day like the weekend before he passed away and you know, spoke with the people. I hope that his health is in good. I hope he's in good health and can serve as the chairman and non executive director for a number of Years.

Because maybe it's that he wants to really get seriously into weight training. Maybe he never made a lot of time for the gym and he just wants to be able to, you know, take some of that time he would spend reading or studying companies and just put it towards iron. It's a very good possibility.

But if you are buying cash flowing assets, trying to squeeze every penny out of the businesses, you got to put Those holdings on ramp.com Time is money. Save both easy use corporate cards, bill payments, accounting and a whole lot more all in one place. Ramp, a ramp powered roll up. It's easy money. You just buy, buy a company, put them on ramp, triple the cash flows.

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Could be that easy.

Could be that easy. Not financial advice, of course. Then there's another interesting article in the Wall Street Journal. Five wins and losses from Coca Cola to Berkshire. What worked and what didn't for the head of Berkshire Hathaway. Looking back on his hits and misses, Coca Cola was a hit. He invested in the soft drink company in 1988. He told Berkshire shareholders he wasn't he expected to own the stock for a long time. When we own outstanding businesses with outstanding managements, our favorite holding period is forever.

Great life.

True to Buffett's word, Coca Cola remains a holding 40 years later. By the end of 2024, the stake was valued at roughly 25 billion. Coke's dividends, which have increased annually for decades, paid Berkshire some 770 million in 2024 alone.

So along the way, the stock came to represent something more to Berkshire and its shareholders than just a steady source income. Buffett was Coke's largest shareholder, a one time board member and an unflinching pitch man. So good he often said he drank five cherry Cokes a day. And his devotion to his favorite soda became part of his lore of the lore that drew thousands of fans to Omaha for Berkshire's annual shareholder meetings.

Junkyard dog. He's junkyard.

Yeah, I mean he really, you know, this has been one area where people have said, oh, you know, tried to poke holes in Warren Buffett and say, you know, you're promoting, you're making your money on big soda, basically, right? Something that can have negative health effects. But he sort of has been able to beat those allegations by just drinks five a day. How bad could it be drinking five a day?

I'm good performance.

If you're worried, drink two a day. Just dial it back to a miss that he had with Salomon Brothers. Berkshire Bought preferred shares in Salomon Brothers in 1987, when it was still one of the biggest firms on Wall Street. In 1991, through scandal, though, scandal enveloped the investment bank when its traders were accused of rigging a Treasury note auction. Buffett was forced to step in as chairman to clean up the mess, which ended when the firm settled a series of government investigations. Investigations.

This was very interesting because people don't, I mean, in Silicon Valley, we don't think about that many opportunities where a company's embroiled in some sort of chaos or scandal and then, like a legend steps in. Yeah, like, it kind of happened with Zenefits and the David Sacks thing, but it didn't go well. Can it ever go properly? Like, it's just an interesting strategy to try and pick something up. But I think the, I think the lesson, you know, is this, Buy. Buy wonderful companies at reasonable prices as opposed to trying to get a discount. This feels like the example of, like, oh, they're so beaten up. There's still some business there. Let's hop in. But ultimately got, you know, your hand burnt because there was just too much. Too much.

Well, in this case, they invested in 1987 in the, in the, this ordeal, but the treasury note auction didn't happen till four years later. So it wasn't necessarily trying to be a turnaround. But, yeah, you could imagine. I mean, there would have been a scenario where.

Yes, but, but in, in 91, Buffett had to step into the chairman role instead of just saying, like, hey, it's. I'm wiping my hands of this. Because, you know, we have, yes, we have our preferred shares, but we, like, the investment's not going well, so we're going to bet we're going to dip out and sell at a loss, as opposed to, I'm going to step into the chairman role. I'm going to run the company. That's kind of crazy.

Founder Mode.

Buffett said, I can handle bad news, but I don't like to deal with it after it has festered for a while. A reluctance to face up immediately to bad news is what turned a problem at Solomon from one that could have easily been disposed of into one that almost caused the demise of a firm with 8,000 employees. Then the next one, the hit. This is kind of interesting. BYD Little. No, battery maker. Munger went over to China, found BYD, the battery maker, and encouraged Berkshire to buy a 10% stake in the company in 2008. Within two years, the $230 million investment was valued at nearly 2 billion. And so this is like a series C230 million for 10% at a $2.3 billion post. That's like adventure style investment that they just did kind of randomly. Obviously a little controversial now that BYD is so closely competitive with American industries, but, you know, he secured the bag and made a 10x. Pretty, pretty. But they have since, since begun to trim their stake. They also missed on US Air, the airline. And this is, this is the famous and hilarious quote from Richard Branson, the wealthy owner of context. Where's BYD right now?

BYD is still over $100 billion.

100 billion?

Yeah.

So they own 10%. That's 10 billion.

On investing.

It's a 50x. We got in at 2 billion.

No, no, no. They, they invested way.

Berkshire invested a $2 billion post money, essentially.

Oh. It said Berkshire to buy a 10% stake in 2008 within two years. The 230 million dollar investment was value. So they got a 10x to 2 billion.

Yeah. And now another 10x. Basically.

Yeah.

Or sorry, another 5.50x.

50X.

Yeah, yeah, yeah.

Okay.

So they invested.

Yeah, yeah.

Got like. Within two years it was a 10X.

Yeah, yeah.

And then.

Yeah, yeah, got to a 50X. Not bad. But they struggled with US air. Richard Branson said. Richard Branson was asked how to become a millionaire, and he had a quick answer. There's really nothing to it. Start as a billionaire and then buy an airline. Buffett wrote in his 1996 letter to shareholders unwilling to accept Branson's proposition on faith, your chairman decided in 1989 to test it by investing 358 million in a 9.25% preferred stock of US Air. Buffett conceded he underestimated just how much havoc the deregulation of the US airline industry would play on US airs business. From 1990 to 1994, US Air reported total losses of 2.4 billion. US Air eventually became US Airways, which later merged with American Airlines. Not a good outcome, but contrarian, interesting outcome. Mid American Energy. You think of mid. It's not mid.

It's not.

It was great.

It was goaded.

It was goaded. Buffett bought a 75% stake in the. In the Des Moines utility in 1999 at the urging of Walter Scott, a lifelong friend who had joined the Berkshire board in late 1980s. Mid American, later renamed Berkshire Hathaway Energy, thrived under Berkshire by issuing dividends and plowing the company's profit back into the business through acquisitions of capital, events, capital investments. BHE would become one of Berkshire's four pillars, along with its insurance and railroad businesses and its stake in Apple, annual operating earnings grew to nearly 4 billion from 122 million in 2000.

Wow.

Yeah, that's pretty, pretty great growth. The deal also added Greg Abel to Berkshire Hathaway's payroll. That's where Greg Abel came from. He was working at Mid American Energy, and that's how he was able to climb the ranks. Pretty, pretty great. And then actually, the last one that's kind of interesting is that Berkshire Hathaway itself apparently was a miss. In May of 1964, the top executive of struggling textile manufacturer called Berkshire Hathaway wrote to its investors offering to buy their shares for eleven $11.37.5 cents a piece. Buffett, a major shareholder, had expected $11.50. But when Berkshire's Seabury Stanton responded with the lower offer. I bristled at Stanton's behavior and didn't tender. He's like, it's offensive that you didn't want my $11.50. You only want 1137. What is this? What are you trying to sell me? And so that was, Buffett wrote, a monumentally stupid decision. Berkshire continued to wilt, along with the rest of the New England textile industry, shutting mills and racking up losses. But Buffett, peaked by Stanton's actions, ignored the company's grim outlook, and instead kept buying more stock. By May 1965, he took over Berkshire for good. It is a move he still regrets, though it did earn him his first mention in the Wall Street Journal.

There we go, Stan.

Although Seabreeze and my childish behavior. Through Seabreeze and my childish behavior, after all, what. What was an eighth of a point to either of us? He lost his job, and I found myself with more than 25% of Buffett's partnership capital, his original investment vehicles, Capital invested in a terrible business about which I knew very little. I became the dog who caught the car. Buffett kept the textile business going for years. But stubbornness, stupid stupidity, has its limits. He wrote in 1985, I finally threw in the towel and closed the operation. So very ironic saying that the company.

Yeah, the namesake, ended up being an L. Just goes to show, as if you want to be one of the greatest or the greatest investor of all time, you can okay to have some L's along the way.

It happens.

It happens to the best of them. Even to the best of them.

So the market so far does not like the retirement news for Warren Buffett. Berkshire Hathaway Stock is down 6.3, 9% in this post by Ryan Peterson, friend of the show. But he asks, how was this night? How was this not priced in? He's 94. I mean, I guess, you know, there's the question of, like, what's. Yes, yes, we know he's going out, but it could be another two years, could be another three years. And what does that mean? Well, is the delta between another year of buffet an extra 3% in the performance of the company? Maybe.

Yeah, in many ways. I mean, I think the interesting dynamic is they're sitting on all this cash, cash that they will have to redeploy at some point. And so it would be fascinating if Buffett's main sort of final act was just accumulating this fortress balance sheet. But then you have to trust Greg Abel and the rest of the team to actually deploy it effectively and be able to live up to basically fill some of the biggest shoes ever.

This is an interesting quote by Warren Buffett. I read everything. Annual reports, 10Ks, 10Qs, biographies, histories, five newspapers a day on airplanes. I read the instructions on the back of the seats. Reading is key. Reading has made me rich over time. Warren Buffett, that's. That's David Senra to a T. It's great. And Jerry Capital had a funny post here. Proof that nobody can actually compound 20% over his entire career from 1995 or 1965 to 2024, the gain 19.9%. Just 0.1 off of 20K, 20%. No one can do it. It's too hard. Simply, he has not had that many bad years. Although 2008, the financial crisis, that was rough. 31% down. But the S&P went down 37%. And so it seemed like didn't get back in fast enough because next year.

If you look at his exposure, he actually was down in 1999. But then as tech, the original dot com bubble collapsed. He had one down year.

Yeah, but mostly out of general.

He was outperforming massively.

Fascinating. Yeah. So 5 million percent overall gain versus 40k percent overall gain in the S&P 500. Anyway, there's some more information here. I like these just like key ideas and takeaways from Buffett. I pulled a bunch of these together. We'll have to get David on the show this week. Can talk to him about Lessons because he's done like seven different episodes about Buffett and the Buffett cinematic universe. But avoiding mistakes is the ultimate goal. Buffett and Munger teach that the best way to prevent trouble is to avoid it altogether by learning what works and what does not. Focus on not doing dumb things. I like that. Learn from folly and remove ignorance. Fewer dumb mistakes than other people and fix mistakes quickly. Buffett and Munger stress ignorance removal. Systematically eliminating what you don't know or understand. Simplicity and common sense. A core theme. Simplest timeless principles win over complexity. Efficiency, simplicity, common sense. Hallmarks of Buffett and Munger. And tons and tons of lessons in everything from venture capital to startups to building businesses to just living your life.

Yeah, and they, they, I mean the, the, these are illustrated by looking at investments like Coca Cola and See's Candy, which are beloved brands. And it's sense of are people going to love candy in 20 years? Probably just as much as they do today. Yes. Okay, if. Can we scale, you know, distribution between now and then? Great. Yeah, probably a good investment. So I mean, here's a good lesson.

Made the iPhone or the Apple investment. The iPhone was seven years in. I think the iPhone started in 2007. And he made the investment like 2014. And he didn't use an iPhone. He had a flip phone. But he was like, my grandson uses one, my granddaughter like loves them. And so he was like, and the retention rate is 95%. And so I think it's a good business.

That's amazing.

And it became a fantastic investment for him. And a lot of people were pointing out that if you pull out Apple from the Berkshire Hathaway investment returns, it then underperforms the S&P 500. But that's kind of odd because Apple's in the S&P 500, so maybe you should pull it out of that too. But it's kind of like interesting. But at a certain point it does raise. The interesting question is like people originally.

If you pull out the power law outcome out of any investor's portfolio, it's.

Kind of the nature of these things. But I mean, just to kind of steel man, that criticism. The flip side is what service were you paying Warren Buffett for in the 70s or the 80s? It was like, go find some company that's maybe the stock isn't even publicly traded and operate that company extremely efficiently. Reinvest all the cash flows, all these different things. And, and Apple feels like, well, anyone could just buy Apple.

Yeah.

And so certainly, you know, I think, I think Apple outperformed.

Yeah. But at the same time, I'm happy to pay somebody 2 and 20 if they just only invest in.

And in this case you're not, you're not paying 2 and 20. There's no fees.

No. But in general, it's like that. That is what somebody is paying a manager.

Totally.

Like, I will pay you 2 and 20 to buy public equities because I think you're going to just buy the best ones, not buy the bad ones. And that's the, and I mean the.

Real, the real benefit is like, he's been trimming that Apple position going into the crazy year we've had so far.

It is.

So it's not just buying and holding.

You know, you remember, remember, I mean, this was last year, the first time that they announced they were selling.

Yeah. Last year there started to be some articles about the growing cash pile at Berkshire Hathaway, which sits closer to $350 billion now in cash.

So Berkshire started selling in Q1, Q2 and Q3 of last year with the most significant sell off happening in Q2, which reduced their stake by nearly half. So, I mean, I remember at the time, people were somewhat coping and just being like, oh, like the business is just getting complicated.

They're getting it wrong. Of course, the market goes.

They've just held it a long time. They're probably not actually bearish.

They're actually calling the Tom successfully for the seventh time in a row. That's great. Yeah. Anyway, I like this investment principle, the circle of competence. Invest only in businesses you truly understand. Buffett and Munger stay within industries where they have knowledge and insight and they put anything outside the circle in a too tough pile to avoid. Venturing beyond your competence or into overly complex ventures is a recipe for mistakes. Knowing your limits and saying no often is just as important as spotting opportunities. This idea that, like, it is okay to grow the circle of competence, become competent in other, in other words areas, but don't step out of the circle of confidence of competence, because you will be smacked.

Yeah, just going back to their. When they were selling. So the stock actually they started selling in Q1.

Yeah.

The stock rose from $165 a share in the beginning of Q2, the entire period where they were really selling and actually ripped that quarter up to 230 and going all the way to 250, 50 by December and then ultimately has just been down since. So just shows the conviction in that, you know, it's not like they fomoed back in once, you know, once they were like, oh, the stock's actually ripping. Maybe we sold too early.

It's like, no, no, he waited.

We were going to be, you know, right in the fullness of time.

I like this. There's a bunch of interesting, memorable quotes we should go through. All I want to know is where I'm going to die, so I'll never go there.

Iconic line.

Consider how hard it is to change your. You'll understand what little chance you have in trying to change others. This whole idea of like they meet people where they are a bull market is like sex. It feels best just before it ends. Euphoria.

Honestly. Crazy line from. From Buffett.

Yeah.

He had a like a few too many Coca Colas.

The secret to being successful in any field is getting very interested in it. I couldn't excel in anything in which I didn't have an intense interest passion. You excel when you truly love the subject or work. That's 100% accurate.

Here's another good one. We don't try to change people. It doesn't work well. We accept people the way they are.

Yeah. Smart.

And this is a lesson you only have to learn a couple times. I think founders hiring people or even investors hiring people.

You mentioned this with some investments where you were like, okay, the founder's bad at this one thing, but I'm good at that. So I can change them into being good at the thing that I'm good at. And it's like, often that's not the case.

Yeah. Or more so you hire somebody to do a specific thing and there's only. You can help somebody go. From my experience, you can help help somebody go from like great to excellent. It's hard to take somebody from okay to great. Right. And so accepting people the way that they are and then sort of, you know, trying to really be honest about whether they can get where they need to be is important.

Yeah. I like this. Wall street never changes. The pockets change, the suckers change, the stocks change. But Wall street never changes because human nature never changes. That's great. There's a kind of interesting overview of his. Of his career in 25 key moments. So he reads the Intelligent Investor in 1949. That's so long ago. Does this discovers Benjamin Graham's philosophy of value investing. And this forms the foundation of his approach in 1951.

He visits real quick the article in the Journal earlier. He's talking about the authors, talking about how Buffett's edge is the information that he has. And I would almost argue that Buffett's edge is the experience that he has. Because there's one thing to read about financial turmoil 30 years ago and you can understand why it happened pretty well. But it's a very different thing to viscerally feel it. And Then have that inform your future decision making. And Buffet at this point done 60 plus shareholder annual AGMs. Right. And being able to actually have 60 years of experience to draw on where he was viscerally feeling what was happening in the industries that they're in just gives you an intrinsic advantage. Right. Sometimes you actually have to experience something to really learn the lesson. And he certainly has experienced the full spectrum of investment experiences.

Yeah, 100%. So in 1951 he visits Geico headquarters. Learns firsthand about insurance float and low cost moats. Gets excited about insurance. In 1956 he launches the Buffett Partnership Ltd. Starts managing outside capital. Using Graham's principles. Rapidly outperform the market. He begins buying Berkshire Hathaway shares in 1962. He spots this deep value opportunity in a dying textile mill and builds the stake.

Ended up being his biggest regret.

Yep. Takes control of Berkshire Hathaway in 1965. Buys enough shares to oust management, turning it into his investment vehicle. Buys National Indemnity. Entering, entering the insurance market in 1967. It's crazy. Like each one of these is like a three year journey but. But because it's an 80 year career or something or 60 year career, we're like condensing it down so quickly but. So he enters insurance, unlocking the float model that would fund decades of investments. He closes his partnership to focus on Berkshire in 1969. Returns the capital to investors to avoid speculating an overheated market. 1972, he acquires See's Candies. Learns to pay up for great businesses with pricing power. Shifting his investment philosophy instead of just finding, you know, these really, really beaten down stocks. He's okay paying a reasonable price for truly great business. Invest in the Washington Post in 1973.

The Washington posters.

The Washington posters bought a world class media business at a bargain and became close with Kathryn Graham.

Yeah, and I forget when we were talking about this, wasn't he notorious for really marketing? Like he would take a position and then he would actually effectively go on road shows like doing media around, around the stock. So yeah, yeah, he's like I'm going to own my distribution. Right.

He's like, he's like let's talk about See's Candy.

Let's talk about See's Candy. Armies of retail investors on board.

Certainly early to that. He rescues Geico from collapse in 1976. Buys shares and joins the board to help steer his favorite insurance firm back to health. He names Charlie Munger vice chairman in 1978. And this was a formalization of his Most important partnership and philosophical sounding board. He shuts down the textile business in 1985, acknowledging silence failure. It frees up capital which completes Berkshire's transformation into this holding company. Buys the Coca Cola stake in 1988. Makes a $1 billion bet on a timeless consumer brand that became one of his biggest long term wins. Stepped in to lead Salomon Brothers in 1991. Takes an emergency control of a scandal ridden firm saving its reputation and stability but ultimately not a great financial outcome. Issues Berkshire Class B shares in 1996. Created low cost access for smaller investors and blocked Wall Streets from misusing his name because I think there was probably some sort of like, you know, aggregation SPV essentially on it because the shares were getting so expensive. Acquires General Re in 1998. Expands Berkshire's global insurance reach through though later admitted early integration challenges. He avoids the dot com bubble in 1999-2000. Refused to chase fads, preserving capital and credibility as others crashed. Pledges $31 billion to philanthropy in 2006. History's largest charitable donation, primarily to the Gates Foundation. His buddy backs Goldman Sachs and GE during the crisis in 2008. Stabilized markets by investing when fear was highest. Bought Burlington Northern Railroad in 2009. This is the biggest acquisition of all time for Berkshire. Betting on America's long term economic growth. Railroads aren't going anywhere. They're not making any more of them. Funded bank of America.

You had a post yesterday that was fascinating. Pasadena was estimating that it would take.

400 years, 500 years to put all of the electrical power lines underground. So they said the phase one is 100 years and phase two is 400 years to put them underground. Isn't that crazy? That's longer than America's been around. Yeah, America is what, 250? They're 300 years old now going on 1776, right? Yeah, it's like a crazy, crazy amount of time.

Imagine writing that with a straight. I hope they put on clown makeup.

Oh, you think in decades? We think in centuries.

Our plans are measured in centuries.

So he funds bank of America during 2011 slump. Injects 5 billion gains, a massive stake. Then he invests in Apple in 2016. This is the iconic investment $36 billion of Apple. Now it's Berkshire's most valuable holding. He promotes Abel and Jane as vice chairs in 2018 and starts quietly initiating the leadership succession process. Names. And then of course in 2021 he names Greg Abel as the future CEO. And then in 2025 he announced retirement as CEO and so that is the legacy of Warren Buffett and we will continue talking about him this week. Hopefully we'll get David Senroe, some other folks on the show, but we are joined by our first guest of the show, Molly o' Shea, host of the Sorcery podcast. Welcome to the stream, Molly. How are you doing?

Molly, it's great to have you.

You are live, you are alive. Okay, one second. We are working to get Molly. I wanted to have her on. But we'll talk to you about LINEAR in the meantime. LINEAR is a purpose built tool for planning and building products. Meet the system for modern software development, streamline issues, projects and product roadmaps on linear.

Just do it. We use LINEAR at tbpn. As you know, we treat our media products like regular software products in terms of the way that we build them, in terms of trying to make them better every single day. The best evidence of that is our livestream overlay, which we are always rolling out changes to. And if you have any feedback for it, let us know and we'll get those issues slotted into Linear so we push against them. So thank you to LINEAR for supporting the show.

Did you watch Miami F1?

I did not. I had food poisoning. It was absolutely brutal. Yeah. Yesterday I didn't get a chance to watch either.

I did throw on a little bit of the, a little bit of an older season of Drive to Survive and I'm starting to get back into it, but it's hard. Yeah, F1's tricky to follow. Bodybuilding is much easier to follow. Yeah, I think it's really the only spot.

Well, there's, there's very little space in your brain for anything other than bodybuilding.

Yes, exactly.

So it's like anything that you would watch is competing with, you know, reruns of the Arnold.

Yes. Yeah. Historically they really do need to do, I mean, full, full drive to survive level production on the next Arnold. I mean, that is like Sam Suleik's like channel. Basically it's like that. It's just Drive to Survive for bodybuilding, basically. But we wanted to have Molly on the show because she is a good friend and has done a bunch of interesting things. But she posted over the weekend venture funds as F1 teams. Red Bull is Founders Fund, McLaren is Thrive, Mercedes is Sequoia and Ferrari is Khosla. And we're going to debate this with her, see how she breaks it down. And if we have any different takes, she says Red Bull Racing is Founders Fund. Why? High conviction, unapologetically bold and driven by Generational talent. Verstappen is Peter Thiel traits. Relentless, unconventional and power focused. I feel like for Red Bull you got to go with a venture fund that's not in venture because Red Bull's like not a car company.

Yeah.

So I almost feel like you should go with like in q Tel or CO2. CO2 crossover. For sure. Tiger maybe. Or maybe. Is there an actually decent corporate VC arm? I mean I guess OpenAI. OpenAI one of the better performing corporate firms. They have a really good corporate firm.

Arm as of late.

Who? But. But I haven't seen much from like. I mean I guess Google Ventures has done pretty well gv although they've. They've kind of spun out now.

Yeah. But I think Stripe Stripe has probably made some good balance sheet investments over the years. I know they're in ramp. I've heard Okta randomly does a decent amount of corporate investing. They have some some fund vehicle or they're doing it off the balance sheet as well.

If you're looking for a new bed, get an eight sleep. Go to eight sleep.com CBPN five year warranty.

I actually had such a brutal night. So it really picks up on when you're sick.

Free shipping. It does.

And for me I got 8 hours and 57 minutes of sleep. But I had a 77 which is well below my typical 98.

Let's go.

There we go. John.

Back in the game. Away from it for a week. Came back, the consistency was terrible but I slept a ton. Eight hours, 40 minutes. Let's go. I wasn't bit by like nine last night. Wow.

Fantastic. Fantastic.

Got to put up some big numbers this week anyway. Hopefully we can get Molly back in the studio. We will see. How we doing? Just figuring out audio. Okay. She can't hear us. Let's see. We will try and route that in. Let's do some timeline in the meantime.

Little timeline.

Did you see Mark Zuckerberg went on Theo Vaughn and they kick it out. I didn't realize this was the opener to the whole episode. But Theo Vaughn says, you drink coffee man or no, Zucker's. No. Theo Vaughn says, really? I mean you've had it, right? And Zuck says I have. I just like hate anything that messes with like I don't like any kind of chemicals or anything. My sister gives me such a hard time about that. She's like, you're just sitting there raw, dogging reality. The ovan says, wow, that's a great line. And then. But it got spicy on the timeline because memnon of Rose says, let's be real. Mark Zuckerberg's sister did not tell him he was raw dogging reality. And Mark Zuckerberg's sister Ariel Zuckerberg says I 100% said this to him. You know, never deleting this app moment by Shweta. Anyway, I think we got Molly. Let's bring her back into the studio. We'll ask her if she's had coffee or if she is raw dogging reality today. Let's see. Molly, are you there?

I'm here.

Are you raw dogging reality or are you caffeinated Today?

I've had about five matchas and two espressos.

Wow.

Wow. Potentially into that 500 milligram range, which is.

That's junkyard dog in reality.

Yeah.

That's just consuming everything. Maxing.

Max, did you have a rough time like with, you know, going to the east coast last week? I think for. For me personally, given my caffeine intake when I.

It was go.

When I. When I go through a time change like that, just everything gets messed up. How. How did you do?

Horrible.

I've been up since 4am every morning.

That's a good thing. That's a good thing though.

Yeah, that's good.

Just cranking content.

Yeah. Just Ashton hall mode. Ashton hall maxing.

Yeah.

Get out.

No, I think it's time you have to do one of the it. I think you need to do the. The Ashton hall for tech video. I think you should basically start tomorrow morning when you wake up at 4 and just do it.

Yep.

Anyway, I'll try my best.

It's great to have you on the show finally. Long overdue. There's a bunch of stuff to run through. We have limited time, unfortunately, but maybe we'll. Maybe we'll make Augustus wait, you know, a couple minutes extra and just hang out. We were already covering your F1 firms as or sorry. FF.

What inspired it? What was the reaction? What do you think you got right? What do you think you got right wrong? And then we'll go into the other less iconic F1 teams, take some shots.

Well, so all this started because I got a nice tip from someone who might be on the inside. I can't share much more than that, but I was given a tip because I've done these before where I've compared the VC funds to something like the Coachella stage. I did this for sorcery, like years ago and it went so well. But this was at like, like ZURP funding and like ZERP environment. So it was like Softbank was in it and Tiger and like, it was just so much more clear who the stages would be. And now, now we're dealing with F1 because there's only a couple contenders and we just have to. We've got to see who's going to win.

Going back to the Coachella, which fund was the Do Lab? I got to ask.

That's the Do Lab.

Oh, my God. That's a good one.

I forget, I've never been to Coachella.

You've never been extremely bullish. That's extremely bullish that you've never been. To be honest, I've never been to Coachella. Sweet child. Sweet child doesn't know what the do lab is. But who do you have as a do Lab? I got to know. And then Sahara and then we'll move on to F1.

I mean, let me pull this up.

While you're pulling that up, there are some midfield teams that someone broke down. Williams is Greylock, the fifth most winning team in history. Didn't keep the top talent or scale, so fell behind. Alpine is BCV at Bain Capital Ventures. Storied brand across racing categories. PE consulting, strong veteran lineup. Couple wins and podiums in recent years. Decagon Kreia. Younger guys largely untested in no clear succession. I Love AlphaTauri as YC Battleground for young talent. Produces some of the best drivers but sees limited return. Verstappen saying Gasly plays an important role in the startup driver ecosystem. And Aston Martin is SoftBank one man behind it all. Lawrence Stroll, Masayoshi Sohn. Tons of money and big deals. No significant results to speak of. Brutal. Anyway, yeah, break us down the Coachella landscape and then I thought I'd put in terms that folks that are more familiar with bodybuilders and could. Could key off of.

Okay, so for Do Lab. Okay. Yeah, this, this one was just scrappy. Bootstrapped companies or people in stealth. For the main stage, we had is Tiger Edition, CO2, A16Z and Sequoia crossovers.

Oh. So it's basically the lineup crossing over. Okay.

It's the big show, headliners, hard to compete, expensive rounds.

Got it.

And then for. For outdoor theater, which is just as experienced, arguably more fun, artist friendly, we had first round benchmark, pair and index. Okay.

Yeah.

Sahara. Sahara, which is also like amazing. Very large, loud and a little bit more out there. Founders Fund, SoftBank, General Catalyst Lust, Lux Craft, See Gobi.

I can see Delian playing the Sahara stage right around like six o' clock. Just really, you know, peaking basically.

Well, Yeah, I mean, I'd never been to Coachella. I barely get to watch F1. I'm. I really only follow. The only sport I follow is bodybuilding. So I did my own kind of version of this, mapping the top venture capital firms to professional bodybuilders. So I'll give you a rundown and I'm sure you're familiar with bodybuilding, so you'll be able to give some feedback and tell me how I did. So for Sequoia Capital, I have Arnold Schwarzenegger. They. I mean, this one, obviously, it should be.

Obviously.

Great documentary.

The industry's gold standard. Early Sequoia, Apple to Airbnb, hit list and Arnold's seven time Mr. Olympias. It became the blueprint that everyone studies, Right? Yeah. Andrews and Horowitz. This one should be obvious. Dorian Yates, of course. Each burst in with radical math. You know, software eats the world. Media blitz, six straight Olympias, they kind of reset what scale and intensity could look like for founders. Fun. I mean, this is a no brainer. Phil Heath, precision obsessed. Moonshotters, Teals, Contrarian bets. Heath's near flawless symmetry. Both racked up seven crowns while dividing the crowd. A little controversial. Heath, Kleiner Perkins, Ronnie Coleman, obviously. I mean, everyone's gonna guess that one.

Of course. Of course.

You know, they're 1990s titans that went maximalist.

Yep.

KP's.com era supremacy. Mears Coleman's eight title. Yeah, buddy.

Yeah, buddy.

That per. That pushed sheer size and later paid for it in surgery and turnover. Excel, you got Lou Ferrigno, Lux Capital, you got Jay Cutler, of course. Probably makes sense, you know, of course he's a, he's a methodical grinder just like Lux. They've been at it for a long time. Lux, deep tech persistence. And Cutler's dogged prep finally dethroned the champ. Showing steady focus. Beats Flash. Lastly, we got Nat Friedman. He's the up and comer. He's the Sam Sulek of Sam Schulich. People have been saying that for a long time.

Many people have been saying that.

Yep. So I think that will put, you know, the venture funds in terms that really anyone could understand because a lot of the F1 analogies, they just don't really land with like our audience.

At least bodybuilding is very American where F1 is very European. European. Right.

It is.

What, what else is on your mind, Molly? How, how was, what was your reaction to last week? We obviously were in D.C. as well. Did you have any major takeaways? Any. Anything, you know, that you're following after the event.

You got some Palantir merch.

I got some Palantir merch, became friends with Iliano there, got introduced to Seam, got a private tour of the office on Friday or the next day. Some amazing merch they got there. But I think like the biggest takeaways and I'm still seeing this, but the biggest theme from the event was the US versus China. And we're seeing that because Delian's still posting about it.

He's posting through it for sure.

He is, he is, yeah.

An interesting one. I I we had heard some light chatter about the TikTok deal potentially getting closer to a resolution, but they're being general unhappiness with how it was getting sort of resolved. So not sure how much we can share. But that was one takeaway for me. It's like in the midst of this like massive trade war and all this talk about US China, one of the sort of key issues that should be completely bipartisan and we should be acting extremely intensely around it seems like we're gonna miss the mark on So I.

Think consensus is the there will be a group of financial investors that come into the company and own a stake and then Oracle will do the data management and kind of the cloud infrastructure. But it won't fully leave control of the ccp, which is maybe not the best outcome. I've been advocating for just giving all of TikTok to Truth Social. I think that would be something that everyone could really rally around. Might destroy. It might. But it's definitely going to get approval from the top dog in Washington. He'll be happy to have an asset.

Yeah.

What else? What can you tell us about working at a family office? How it differs from working at a VC firm? You've obviously worked in both places. What's different and how are family offices like positioning themselves these days? In ventures it just like tag along rounds or are they trying to lead rounds? What are you seeing in the family office landscape?

Good questions, many questions. I think the biggest difference is the time horizon on deals and the thinking. So instead of capital. Yeah, it's permanent capital. You're thinking evergreen. It's not, you're not confined to four years for investing. It's not like you have to stop investing after two and a half years and start raising and going out to fundraise. Instead you're thinking long term. You can actually like be like a little bit more thoughtful. Instead of playing the rat race of competitive rounds, you can pick companies and go deeper with them, have longer term relationships it's just like, it's a much different game because it seems much more rational.

You.

I think my biggest, my biggest thought and reflection after leaving institutional VC was just like how much it's thwarted by fast decision making. If, if you have to consistently confine to, oh, I've got to do this many deals a year, you have to do this many per fund and allocate X amount of capital, then it really constrains your judgment and how you think about what you want to do. So yeah, I mean it's great because you can operate with clarity. You don't have to waste your time with tons and tons of meetings. You can actually just focus on the power law winners.

Yeah. And that means effectively identifying a company early, not necessarily being able to invest in that moment for some particular reason, but just saying like, hey, it doesn't really matter. We want to get in at some point, let's continue to build a relationship. Whereas I think oftentimes VCs have a specific window. Unless you're a big platform fund, you have a window where you can make an investment work, but then you can't even do an SPV into the company necessarily if you weren't in one of the earlier rounds. And so having that timeline flexibility to be like, okay, we can have, have ten plus billion dollar outcomes now it really doesn't matter if we get in at $100 million or we get in at $500 million, you know, post.

So it's also just, it's much more flexible capital. It's not like you're confined to an X amount of percentage that you need in equity or check size. Like you can get in whenever and whatever makes sense. Then you can also put in your own capital and then raise the rest through SPVs and make a larger round. So there's many different dynamics. It's, it's much more friendly.

You, you dropped an interview with Bucky Moore. He's going over to Lightspeed. We're having him on the show later. What was the question that you know, you were too afraid to ask because it doesn't meet sorcery's brand standard. But you know, it's anything goes here when we're live. So we can put him on the spot. What did he ask you to like edit out and then we'll ask him that live.

I will say I, I passed all compliance. My biggest question that I wanted to ask him was what was the deal like? Did you get your carry bought out? I asked, you gotta listen in the interview so you get the answer?

I'm prepping my show. Yeah.

But I asked him, like, how does it work transitioning large partner from another fund, going to another. Right. Like, there's a lot of tied up carry, there's board positions. It's very complex. Like, what was that process like? And we walked through it. I mean, he was very open. I was very, quite surprised. It was an awesome interview.

That's very cool. What else did you talk to him about that we could maybe dig in deeper. When he hops on the stream in an hour.

Ask him about his view on asi. Ask him about pricing dynamics for tier ones and tier twos. He doesn't like that branding. But you think he'll sell it more.

As like tier three?

He wants, he wants to be labeled as a tier three. So you can have that dog.

Yeah, that dog in him. Inspiration to grind harder.

As soon as you're labeled a tier one, you just, it's like, I.

Mean.

And then I would also, I would ask about global pools of funding. He was open about that.

And yeah, he's, he's big on to raising money from Pyongyang. Right. North Korean money is usually in his funds. He does a lot of SPVs with.

Somebody out there is not going to. Not going to understand the North Korean sovereign.

Yeah, we'll have some fun with him. Last question before you go. What should they do with Alcatraz? Everyone's been debating it in tech. I want to get everyone's take on it today. Should they become Y Combinator? Put a monument on it. Put it. Bring back the jail. Keep it as a tourist destination. What's your pick?

I want to keep it. I know I want to bring it back as a jail, but I want to keep it open for tours.

Okay. So you can tour the prisoners.

Prisoners.

Crazy.

Crazy. That'd be very chaotic.

That'd be extremely chaotic.

Somebody was running a Pentagon. I forget who it was. I think it was Sheol was saying that like the reason that it was shut down initially was that you could only have like 300 prisoners. And like due to being on an island, it was like extremely expensive. 3x the cost to actually house them. So it was just like. Doesn't really, actually make sense. But I liked.

I mean, if I was, if I was in jail, I'd probably choose the island jail. Right. I mean, that'd be. That doesn't seem like a bad place to be.

I don't know. Have you been. Have you done pretty miserable.

It's so bleak.

It's so bleak. It's always.

Kind of see everything, but I don't know. Yeah, pretty terrifying. Anyway, we'll see what happens with it. We'll be tracking it.

I'm in favor of putting, you know, letting Y Combinator set up shop.

I like the Y trapping. You know, it's BMF or Die 2.0.

Yeah, yeah, yeah. Y Combinator is the Y combinator of Y Combinator. It's true, as many people have said, but. But put it on an island. That's the place to eat.

Anyway, thanks so much for stopping by, Molly.

Yeah, this was great. Molly. Have you back on soon. Congrats on all the progress.

Bye, guys. Thanks.

Bye to ya.

Let's bring in Augustus Dirico from Rainmaker.

I got the gong ready.

I think we got some breaking news from Augustus. Yeah, we had a chance to sit down with Augustus in dc, get the update from him. I loved that his business is cloud seeding, making it rain. And he somehow tied it into the AI race to develop more data centers. And it wasn't complete nonsense. Like, it actually made sense.

Where's the water going to come from?

Yeah, yeah. It's a big question. Anyway, we're always excited to have him on the show. In the meantime, text him.

Here he is.

Yeah, let's bring him in.

Let's do it.

How you doing, man? What's up?

Boom. Look at that contact.

I'm blessed. It's a.

It's a size gong occasion. Rainmaker just raised or just announced its raise of $25 million for our Series A.

Fantastic.

Congratulations. Let's go 25 million.

Give us the breakdown on the deal. Who, who, who's in?

Okay. Yeah, so it was led by Lower Carbon. So that was Ryan Orbuck and Clay. Clay Dumas. Chris Sacca founded the fund. They're really interested, interested in adaptation tech now. Right? Like in the face of severe weather and change of climate, how do we build technologies that can make us more resilient? Right, so more resilient to drought, More resilient agriculture. More from cloud seeding is one way to facilitate that. And so they were stoked. Naval Ravikant Sage, philosopher king of tech bros everywhere. He was in, I think just because we went for like a really long romantic walk in Manhattan beach one time. And then Greg Bernstein from Ace Cap, Sovereign's cap. Some really great Christian mentors and leaders for me. And then Drover Ventures as well. Drover Ventures. William Clark, Great dudes. So that was the deal there.

Talk about what the process was for the raise, because from what I know, this Is being announced now, but got done a while back. It was, from everything I heard, an extremely competitive process. Well, what were you really looking for in that lead check?

Yeah, I'll tell you that and then I'll show you all of the crazy shit that we've been working on with the money since we actually did raise it. Because that's the more exciting part. What we were interested in then was technical sophistication. Cloud seeding, unlike even a lot of deep tech, is an inordinately complicated business. You need to be really good at weather modeling, at aerosol chemistry, at radar, at a bunch of other electronics. Meteorological radar is crazy unto itself. The avionics of the drone boutique, anti icing systems, new chemistries for new cloud seeding agents. And so here is some of the stuff that we had to diligence our investors on whether they'd be able to understand what went into building novel meteorological radar.

Right. And to be clear, this is all behind you. Is all renders, right?

Yeah, he's on a green screen, great CAD model. So anyway, in 6,000 square feet, which is nuts, we started high rate production of our drones which are anti icing capable drones. They're the only Class 1 UAS in NATO that can fly in severe icing. And so this is one of our Elijah's right here. So it has thermal anti icing systems, ridiculously difficult to engineer. Airsold dispersion system that tunes the particle size that you're emitting into the cloud exactly as you wish. And then over, over here, I can't even begin to show you this. Actually that's probably proprietary. I won't show you our boards, but here's some more material going into some more drones. Here's the next unit of our radar that's going to Argentina, our second international deployment. So I'm pretty stoked about that. Here is all the proprietary radar stuff because we had to design our own boards. And then on the other side of the house is like our novel chemistry work that, by the way, I'm taking this out of Aaron slowed off's playbook. Just like walking around the factory.

Love it.

That's the fun stuff that's going on.

Yeah. So I mean, talk about the use of funds. It seems like you're buying a lot of stuff, hiring some people. What's the breakdown? Probably doing mostly like founder led, had growth in sales, but where is the money going generally?

Yeah, so I would say it was probably something to the effect of like 30, 30, 20, 20. So 30% of all the money that we raised is dedicated to designing our own meteorological radar and atmospheric sensing platform. So that platform is called eden. That is radar, lidar, long wave, infrared aerosol probes, pressure temperature humidity probes and anemometers. It's one of the more, if not the most sophisticated and low price point atmospheric sensing systems on the market in the world right now. And the lead time is only five weeks instead of nine months.

Yeah. And out of curiosity, did you try to buy that off the shelf initially and then realized that you had to build it yourself? What did that look like? Because that feels like its own product line. Although it doesn't sound like you're selling it to individually yet.

Yeah. So basically everything at Rainmaker, I am grateful and happy to be making money and eventually returning capital for our pre seed investors. But our thesis initially was like, well, we're going to use off the shelf radar off the shelf drones, off the shelf chemicals off the shelf weather models and just be like a really good systems integrator. And then we got punched in the face like a hundred times and decided we had to vertically integrate everything. So tried to buy that radar cots, but there's one guy in Germany that makes them for 51 grand and they take nine months, if not 12 months to get there. Our system is about five times more cost effective, more affordable and the lead time is five weeks. So we did that. About 30% of the funds went to Designing Elijah, our Class 1 UAS that's capable of anti icing. That was a big thing that about 10%, 20% was for novel research, the fancy probes so that we could detect the right conditions in cloud, validate our effect. And then the remainder went to ga fighting Florida, fighting for bigger budgets, that sort of thing.

Talk about acquisitions going forward. Anduril just announced another acquisition. It seems like in defense tech and hard tech there are assets that can be, you know, you can create more value if you roll them into a larger, more agile, more founder led organization. Are you looking at that? Have you done it? Are you thinking about it in the future? How do you think about building versus buying everything?

Yeah. So one of the really strategically important things that Rainmaker planned to do from the outset was roll up the existing cloud seeding market. If you look at the market as it stands, it ostensibly doesn't exist. There's like a few legacy operators that are kind of cowboys that blast clouds randomly and states or municipalities or even like Saudi will pay for it because they're so desperate for water they're willing to try anything Even if it's technically unsophisticated. We bought North American Weather Consultants, which was a old school cloud seeding company out of Utah, out of Salt Lake City. Did so with Project Finance, which was great. Shout out to my finance director, John Madigan. Killer. And then we injected our tech into it. The organization was extraordinarily well run there. We've retained everybody because they're great operators, but we injected our tech upsold that have been getting better yields because of it. More transparent reporting to our customers. I think that we'll continue to roll up the existing market. I also think that there's a lot of novel probe and material science companies that Rainmaker is targeting as well. So anywhere where we can inject our tech or just accelerate growth by deploying stuff faster and at a better margin is part of the plan.

How much pushback did you get initially around people that were like, I love the idea of what you're doing, but I don't see. But like I'm trying to find comps in the market and I can't find any. Is this a market? And I'm assuming your answer was like, well, the tech didn't exist and we're actually creating the market. But what was your, you know, was that your kind of primary answer there? It seems kind of obvious in hindsight that there could be a technological sort of barrier between the demand for something like cloud seeding and the ability to actually deliver on it.

Yeah, absolutely. Got pushback on that. A lot of what we had to say was like, well, this is actually deep tech and frontier tech. Sorry, there's no comp, like do you want to, to participate in something net new or not? And so our investors were really solid about that. But the thing that I did say, which has pros and cons looking back is SpaceX is like a launch services provider. For now, we're a cloud seeding services provider. Rather than get stuff to orbit as a function of our service, we build all of the hardware, we operate all of the hardware and then get precipitation down on the ground. I think over time we'll probably trend more towards an exorbitantly high margin utility. Just because cloud seeding water is the cheapest water that you can produce, but also will start buying up land too and then look very strange. Maybe more like Monsanto or a hedge fund.

Alcatraz is in the news. What's the coolest thing we could possibly do with Alcatraz? What's your pick for the next move with Alcatraz?

I think to catalyze more conspiracy theories putting heat on us. We should put a huge EMF array like Harm there that won the San Francisco Bay.

What would that do?

We don't know. We don't know yet. We're going to find out. Maybe. Last question, but what's the revenue mix look like right now? Because I only know. Last investor update I saw from Rainmaker, I was pretty blown away by the traction. But talking generally, where does the revenue come from? Is it it local governments, states, countries, private industry, et cetera?

Yeah. So first of all, Jordy, you'll find out soon. But we've doubled our realized revenue since our last investor update.

Wow. There we go.

Yeah, I would say about. What's the math? 85%, 86% is domestic. The rest is international. And Then another, about 75% of all the domestic revenue comes from state governments. So departments of natural resources, departments of agriculture. The remaining 25 is small municipal or ski resorts that need more snow.

Yeah, very cool, very cool, very cool.

And when you, when you last. Last question, when you talk to these end customers, I, I imagine. Are you feeling like. I'm assuming you're feeling the product market fit where they're like, please do this, we need this. I'm assuming at no point were they like, oh, why would we want more precipitation? But maybe talk about how those conversations go.

Someone made a really salient quote tweet of Gary Tan's post of the gif, of the whatever bouncy ball game where when you hit pmf, everything runs away. Yeah. Deep Tech is not like that at all. Dtech, the demand is like so obvious from the jump. People have been desperate from the very beginning when we didn't even have a drone to fly, saying like, hey, if you can figure this out, we would love to buy more rain and buy more snow. It was just a matter of getting to the point where we actually had an operable system. And everything changed for us in October 2024 because we picked up the entire company, moved it to a rural hamlet in Oregon to do more intensive testing, and then everything really accelerated and we got the. The system ready and to a point where we could sell it, and people are desperate for more water. So that's been straightforward.

Amazing.

Cool.

Great having you on. Congrats to you and the whole team on the milestone. And I can't wait for the next investor update.

We'll see you soon.

Godspeed, guys. Thanks.

Godspeed.

Up next, we have Bucky Moore moving over to lightspeed, shaking up the industry. Huge pickup.

Many people have Been saying this was a maxed out contract for sure.

I texted him that as soon as he told me.

Absolutely maxed out. I'm super excited to chat with him. He has been on a podcasting road show.

Yep. Roadshow for sure. He's been making the rounds.

Making the rounds.

That's great. What else do we say? Anyway, let's bring him in to the studio and talk to Bucky Moore. How you doing, Bucky?

There he is.

Great to be here with you both.

Fantastic.

Welcome to the temple of technology.

Yeah, give us a little break.

Stop today and then I promise I'm done going on podcasts.

Oh, yeah, you've been on quite the tour.

Honestly, roadshow. Four podcasts a day for the next 40 days. Yeah, you should run it out.

Just wind up on like Hawk Tua. Why is Bucky on Bill Maher today? That doesn't make sense.

Yeah, you shouldn't be able to listen to a podcast in the month of May without having Bucky join. At least for five minutes.

I want to get confusing with the politics do Tucker, but then do Pod Save America and no one knows where your politics align. Just talk early stage venture, right? Yeah.

But I'm particularly excited to be here today because I think you guys have been hitting on some really big ideas in this podcast just in the past couple weeks alone. I. I'd love to just kind of riff on those a little bit with you because I think they're so important and I want to encourage you guys and so what's the first one when it comes to. The first one that comes to mind for me is this. This sort of make hotel gyms great again you guys are having. This is. This is a really important discussion. It's not being had anywhere but here. There's clearly a hole in the market where someone needs to build an insurance product that allows for those folks hitting leg day on Friday to max out at above £500.

Yep.

Yeah, it's just not happening out there. So this is a big problem. I'm glad you're talking about it.

It's a big market failure.

It's the kind of thing that maybe it's not a venture. It's not a place that venture dollars should go, but maybe a group of investors like, should say, like, hey, for the good of America, we need to. There needs to be a company.

I think everything's venture now. There will never be enough venture dollars. I think we need to put this firmly in the venture bucket. And then do.

I think it could be a fit in one of these, you know, sort of AI turnaround funds that are being spun up by a lot of the big platforms. Like, it's. It's just gotta happen. Right. It's. It's gone on for way too long. And all of us travel a lot, and we need to. We need to be dialed in, especially as professional yappers.

Like.

Like be seasoned podcasters.

Yeah.

I mean, maybe. Maybe we just boycott all travel until the dumbbells get up to 100.

The economy will collapse.

We'll start to have a conversation at 100.

Yeah.

And then go from there. We'll start the negotiation at 100.

Yeah. Yeah. Like a trade war. A real standoff between the capital allocators and the luxury hotels.

Exactly.

So, I mean, maybe across the Bear. And I just wanted to say I'm glad you guys are talking about it.

Yeah. I feel like there's an early stage bet here. Get AI powered. You put cameras in the gyms and then. And then the underwriting is based on the form of the. Of the average gym goer. And so if you just have, like, mass monsters in there all day, they're just throwing around the 100. No one's getting injured. Take those insurance rates down.

There was an inference list.

Where off the shelf. AI models.

It's doable. It's doable.

There's an infamous list. VCs for Kamala.

Yes.

What if we had VCs for dumbbells? We could throw that up today. I think we could get 100 signatures in. In 24 hours.

And unclear how much overlap there is between those two lists, but it's a good idea.

Yeah.

It's a big tent. The mass monster.

It's a big tent. It's a big tent.

Yeah. Get them all in there. Why not?

And look, I think before. Before we talk shop, I also just have to make sure I really reinforce the. What you guys are doing here, really trying to turn LA and more broadly, Southern California into the Silicon Valley of media. Like, this is a. This is a gargantuan effort, but a very important one. And I think you have this foundation emerging over in Malibu where you have these esteemed podcasters like the Rick Rubins, the Andrew Hubermans, the Jord phases kind of settling in, so it feels like.

You'Re well on your way.

Yeah, no, go.

Go ahead.

I just think it's important that we dream a little bigger than that. Right. In the sense that Southern California is the. The closest thing to the Amalfi coast that we have in America.

Yep.

You look across the Catalina, it's our Capri.

There's no super yacht.

There's no luxury experience. Like, we got to fix this. And so I just, I just want to encourage you guys to keep going on that and, and keep pushing. And I think it'll lead. It'll lead. Lead to some really great things for what I think is all three of our home hometown of Southern California.

Yeah, I mean, the natural evolution is, you know, Potentially, we had 100% tariffs on foreign films get potentially announced yesterday. I don't know how real it is, but I mean, a natural next step would be, you know, 200, 300% tariffs on foreign podcasts.

Yeah.

And to really kind of like, you know, generally I'm a free trade guy, but when it comes to podcasting, you know, I want to support.

So we were in. We were in Ojai this weekend and we noticed that it was just devoid of high finance and there wasn't a single Goldman Sachs office or high frequency trading operation there. And so we announced our campaign to save Ojai and bring finance to Ojai and really get the cubicles there, get the stimulants flowing, get these folks to work hard and really save Ojai. But we need to. We should do that for Catalina. We should save Catalina from the problem of boats under 50ft.

Yeah, yeah.

Because it's a big problem out there.

Most fishing, fishing small, notoriously unreliable. You might have a good year, have a lot of yield, and then you might have a down year. Whereas hedge funds figure out a way to generate alpha in any market condition.

Stock the ocean with new fish to hunt.

Related to this, Augustus was talking a little bit about what to do with Alcatraz, who isn't a mega yacht owner in San Francisco that wouldn't want to bring their boat into the San Francisco Bay and enjoy what Alcatraz has to offer. So I think there's another dimension we can take, the Alcatraz conversation that sort of aligns with what Catalina has in terms of its potential. So there's a lot of good work to do here. And I just want to say I appreciate you spearheading this effort.

Yeah. There was kind of a controversial post from Christina over at Bain Capital. Right. She was saying that Alcatraz should be a Four Seasons resort where you pull up in a fancy water taxi to White Lotus style, not a federal prison. But I mean, a lot of people were firing back. Being like, this would obviously be better as like an Amman, and instead of a water taxi pulling up in a.

Super yacht, I haven't heard. Heard of a VC going to a fourth season in about 15 decade.

Yeah. But what is your.

These places have a lot of potential.

Yeah, yeah. What, what is your top pick for. For Alcatraz Revitalization.

I'm not sold on the idea of reopening the prison. Anyone who's taken a tour of Alcatraz realizes it doesn't look like the Rock, the movie that is. Which is. Which is very disappointing if you're a fan of the Rock in that shower scene where it all starts. But I think this, I think this five star destination in the making idea that Christina floated again, up leveling the Four Seasons to the Amman, up leveling water taxis to super yachts. Like, I think this might be the best idea at least floating out there right now.

I like the idea of turning it into. What are the. What are the regions in the Mediterranean that like, don't or not. Not Mediterranean. Caribbean. That don't really have any financial sort of rules, like tax haven. Yeah, yeah, yeah. So if we turn it into a place that VCs could generally solicit, it.

Should be the Puerto Rico of the bay.

Yeah, yeah.

If you go there, but you have to spend six months in a day on the island.

Yeah.

We're trying to insure the crypto industry. So, you know, all those folks living their life in Puerto Rico right now, this might be the answer. So, yeah, keep pushing these big ideas. Somebody's got to do it. And I think you guys are doing a really good job.

Yeah, I love it.

Amazing. How's your, how's your first real day on the job today? Right?

Yeah.

Change doesn't happen often in this industry, so it's been really exciting. It kind of feels like the first day of school or something where I'm just meeting a bunch of people I've never met before getting up to speed on how we do things here. And there's a lot of similarities in how the firm operates relative to where I was at Kleiner Perkins. But given the global footprint and just the scale of the firm, there's a bit more process that we use to run our operations here that I'm getting used to.

But.

But super excited about this opportunity. I mean, I think it's just such an incredible time to be investing right now. And given we're kind of in the midst of the super cycle, I'm just really, really excited to kind of hit the ground running here at lightspeed and make the most of the opportunity in front of us.

And it's a pretty big change. In terms of your actual focus, because I always thought of you as the growth guy at kp, now your early stage. Is that right? Is that a correct characterization?

So Everett would be the growth guy at kp. But I think what's unique about KP is we all, we preside over the growth, growth and venture funds together. So every, every investor makes growth investments, every investor makes venture investments. And for me, my roots have always been early stage. I love, you know, pounding the pavement, going to Stanford, figuring out who that next postdoc is that's going to start a company, figuring out who those amazing people inside of these juggernaut companies like OpenAI and Anthropic are kind of those next great founders. And I think the tension for me has always been like, how do you put your best foot forward on early stage while also running, running growth, growth stuff down? And so here, what I'm really excited about is we've got a dedicated growth team and I can really go back to focusing on those early stage roots of where I started. And that was a big, big driver for me about why I was so excited about this opportunity.

Is there some sort of like, how do you, how would you define the delineation between growth and early stage at Lightspeed specifically? Is it like certain round size, certain valuation, certain. Just like you're getting out an Excel model for the first time. So the growth guys have Excel installed and, and the early stage team hasn't touched it in years?

Yeah, I mean, I think that's a fair depiction of it in the sense that if there's real venture risk to a company's standing in terms of like a total loss of capital is a possibility. There isn't a ton of repeatability and revenue generation or how they put product in customers hands. I think that feels a lot more like a venture type of investment. Whereas if there is that sort of repeatability, which for certain companies, especially in AI, can come very early in their life, given just the market pull that we're seeing, Setting aside quality of revenue and that whole debate, you're starting to see more and more that these companies become growth stage companies very quickly. So I think what I'm really excited to focus on here at Lightspeed is like how do we get into those companies as early as possible? Because you know, they can be six, seven months old and suddenly it's a growth stage opportunity. You've kind of missed the opportunity to get that venture exposure that really does at the end of the day drive a lot of the returns for this industry at Least historically.

Yeah. What is the shape of like these AI companies and where they fit between growth and venture? Because I saw some, some firms were putting OpenAI at 27 billion in venture, which wound up being like a venture style bet. Like it, you know, it could have kind of zeroed with, you know, all the, all the complexities around. You're investing in a nonprofit at that point. Like it does have binary risk, but again it's like almost 10x or something. It's been like a venture style return very quickly. On the same time you have a lot of these very hyped AI companies that are maybe rappers would be the negative critique. They're generating a lot of revenue but everyone's worried about churn and durability of that revenue. It reads like a growth stage company, but maybe it's more of a venture bet. How are you seeing the AI landscape kind of break down?

Yeah. So to the question about OpenAI and that being a venture bet, I think it's even more clear today that the investors that participated in that round, again there's a lot of dilution that comes along the way. But if you look at it just on like a multiple evaluation basis, there is absolutely a venture like return to be made at that round and that's going to make a lot of funds that, that went in big there.

Yep.

I think with respect to your, to your second question about just like how these, these rapper companies sort of fit into this box, the first thing I'd say is I think it's becoming clear that when you look at the mature companies that were once referred to as rappers, like the Harveys, the cursors of the world, they're getting a lot fatter in terms of like how much of the tech stack they own themselves and how much differentiation you can argue that they build in. So an example in Cursor's case is like they've been very publicly public about like the people they want to hire are people that can help them train models. Why is that? Well, the cost that they have to pay to the model providers, as we all know, is non trivial. Hence this wrapper distinction being a bit pejorative in nature.

Yeah, of course.

And so what I think you're going to start to see happen is that these breakaway companies that were once AI wrappers, once riding on top of the existing frontier model companies are going to get a lot fatter in that sense and start routing as much of the queries that their users have to models that they can, that they can control and own and customize for that use case. So that's like one trend that I'm seeing. But I think to your point about the quality of revenue, the capabilities that these products bring, especially those that kind of have a prosumer adoption motion, are just so alluring and magical that everybody's going to try it, right? And not everybody's going to stick around, not everybody's going to stay with that product and they might go to another. But from my perspective, I don't think as much about that because I just think the poll for these is so extraordinary that over time you can think of that as a bit of a marketing cost and the quality of the revenue at steady state, especially as these products get brought into larger companies, go from kind of credit card swipes to invoicing customers, you're going to see that these companies look a lot like traditional enterprise software businesses. But in theory they're going to grow and compound at much, much larger scales.

Yeah.

How do you think about the competitive dynamics and differences between B2B sort of enterprise focused agents and consumer agents? From my point of view and evaluating a lot of consumer agent businesses lately, a lot of my thinking comes down to, okay, this is not necessarily explicitly on Anthropics or OpenAI's roadmap, but I can imagine, you know, six months from now they just sort of like immediately enable something like this. Where on the enterprise side, when you look at businesses like for example, like Harvey, something like that, it's like, okay, there's a ton of functionality and features that to me feel like there's much more of a long term kind of like value proposition and moat here. But I'm curious to hear how you think about the differences.

So I agree directionally with everything that you said and with the caveat that I'm not a consumer investor, it intuitively looks to me as though a consumer agent is only useful when it can do everything from planning my kid's birthday party to booking the flight, everyone's favorite example, to really just automating away all these tedious tasks that I would otherwise be clicking through websites to accomplish. And I just haven't seen a consumer agent that can really do that in a holistic sense yet. And, and I think someone will figure it out. And I think that someone will most likely be one of the frontier model providers because this is just such an important use case for them to get right, to kind of maintain that core consumer mind share that they have today. So on the consumer side, my bet is on the model providers, but I just haven't seen anything that really lives up to the product that I would be compelled to use. And I think one distillation of that is the moment you ask it to do something and it can't do it, you just get a little frustrated and it breeds distrust and you kind of move on and go back to doing it your way. So that's sort of where I see consumer today and where I see it going. The enterprise side, on the other hand, is much, much more interesting to me because I think you can create a tremendous amount of customer value by going narrow. So you mentioned Harvey. There are companies obviously doing this in Cogen and trying to abstract away parts of the software engineering process. There are some really interesting companies that are kind of going after, like the people that use Datadog, for example, and helping automate the human intuition that goes into munching through all that data when your software breaks. There's obviously a ton of stuff happening kind of more on like the process automation side of the back office that like a financial institution or large enterprise would have. So I think we're already seeing those products, like, hit runaway trajectories. And the reason for that is because, like, the products work and they do a simple job really, really well. And I just think that's a lot harder to deliver on the consumer side in a way that's compelling. So my sense is the inflows that we see into, like agent investing will be very heavily concentrated on the enterprise side. And I think that those companies are going to get very, very big for the obvious reason that they're starting to chip away at human labor budgets rather than tool budgets. And I'm seeing that with my own eyes today. Like, I feel like I'm seeing the future every day when I meet these new companies that can just, they just have superhuman capabilities in terms of some of these enterprise tasks. They're automating.

Yeah.

What is your take on, like, the rapper meme? It felt very, it felt like a VC psyop basically to me, in the sense that like, like a lot of VCs were like, hey, maybe there's some rappers out there that they might get steamrolled, but they're going to be fantastic lifestyle businesses for a few years. And then, and then we had the Windsurf rumor about, you know, kind of a pretty fund returning result if that deal goes through. And so it feels like, is the Windsurf acquisition potentially like a, like an Instagram moment where it kind of unlocks like a new mindset around the ability to go and build businesses in AI. And it won't be totally winner take all or like the, the, the category as a whole will be. There will be monopolies, but not just one. There will be pockets of value all over the place.

Credit to Bucky, to Windsurf, angel investor.

Really very nice, proud angel investor before it was Windsurf.

And I have to give credit to my former partner Lee Marie for leading that investment at Kleiner Perkins. She's amazing and you know, it's a really special company. So what I'd say about the Windsurf rumors, if true, to me, what it foreshadows is this notion that there will be probably more chips to fall, not just in Cogen, but also just more broadly in these like core categories of agentic work that the model providers are going to want to get into. OpenAI famously said anyone who's an investor in a company called Glean is not allowed to invest in OpenAI anymore. Glean is an enterprise search product that kind of does retrieval over all of your business data and incorporates it into the model so you can gain intelligence from that. To me, that's indicative of them looking at that piece of turf as something that they want to occupy. So to the wrapper psyop question, I would completely agree. And you need to look no further than all the top funds voraciously trying to invest in as many of these companies as possible to know that that's a psyop. That said, I think the scaffolding of why these companies are very, very interesting to me is that ultimately the way you do retrieval of all this enterprise kind of first party data is what makes these products like, like good versus great. Right? And so in a sense, if you look at Windsurf versus Cursor, Windsurf has figured out some tricks as to how to essentially pass the model better context and in doing so generate better outputs for their users. And what that to me says is that like really the IP of these companies is going to largely be around how they do that retrieval and how they bring that data into the model at the right time and in the most efficient way. So I think, and given Cogen is the most mature category, you're kind of getting to see how that plays out. So I think what you're going to start to see is like a, the winning companies, like be it illegal or Cogen or, you know, any of these other categories that we've been talking about are going to be the ones that figure out the best set of retrieval steps to give the models Optimal context. And then coming back to what I said earlier, I think these companies are going to look a lot fatter than the wrapper name might indicate over time. And again you're seeing this with Cursor Windsurf. These companies are really out there trying to take more and more of the stack on versus just being dependent entirely on a Frontier model provider. I think it's safe to say the same about Harvey. They recently published a really interesting blog post that kind of shows the architecture of their, of their app in terms of how it interacts with the AI models. And what you see very quickly is it's a lot more than just a wraparound. And so I think that trend's only going to continue and it's why I think, you know, we at Lightspeed are very bullish on this, this form factor of company. And I think you're going to see a lot of activity from us there over time.

From how have you personally evaluated, you know, businesses that are looking to eat into effectively labor spend through rolling up businesses versus companies that looking to get into that on a ground up basis. And I don't have a ton of context on Harvey's business but from what I would guess right now it maybe looks more like a SaaS business today but over time it could look like more like it. You know, it's sort of eating more of the, of the value chain.

Like what Salesforce did where they, where you they comped on per ticket closure as opposed to just pure.

Yeah. Results results basically or output it. But I'm curious. Yeah, just, just this nature of you know, ground up, you know, new software businesses that are leveraging AI versus this sort of buy and and build on top of strategy.

Yeah.

So I think this question is sort of being answered collectively by the industry like as we speak, as in like there's a lot of chips on the table around this notion of like hey, what if we go and buy the BPO in India and inject AI into it? Or what if we go and you know, buy the homeowners association administrative businesses all over the world and inject AI into the. Yeah, just, just an idea off the cuff I had and, and then on the other end you're seeing companies like Harvey that are saying no, the right way to do this is kind of to deliver like AI native value in the form of a co pilot like product and then over time you start to chip away at the labor spend and bring more automation to do it. The first thing I'd say is that I think one of the mistakes that a lot of investors have made looking at these companies early is seeing the product as it was like then and not imagining how fast it was going to get better. Part of that is obviously just the models getting better. And I think just like when you have like logarithmic rates of improvement, it's just really hard for the human mind to like intuit that and look forward and actually feel like confident in, okay, this is what it's going to look like a year from now. So for example, I think it's fair to say that if you met Harvey at C or series A and you saw the product, you'd say, I don't know if there's like a lot here. It's hard for me to see how this is going to be like a daily active use for the average lawyer. But what's happened is that product has gotten so much thicker and more capable to some degree because of better models, to another degree because of the in house engineering work they're doing around how the information is retrieved and delivered to the end user. And so that product is just a totally different beast than it was, you know, a year or two ago. And I think you're starting to see that reflected in the growth rate and more importantly the, the product engagement of these, of these products. So that's kind of one point on that end. And then I think with these turnarounds, like I, I haven't spent a ton of time digging into these. I think my, my high level concern would be one, do the people that know how to bring the AI into these products know how to run the, you know, the BPO or the call center operation or the community association administrator? I just think these are, these are kind of oil and water like DNAs. And it feels a little bit like, you know, Doge coming into the US government and telling all these people what to do? I think there's going to be some friction like that, of course. But on the other hand, you know, having that existing distribution and scale is really, really powerful. So I can see how there'll be a lot of enterprise value created by these if they can kind of manage that DNA mismatch that I foresee being an issue. So if you're asking me, I'd much rather invest in the AI Native company. And the other thing I'd say is that if you're the AI Native company, say competing with the company that's transforming itself around AI, what I see out there right now is that there's sort of a board and CIO level mandate to just adopt as much AI as possible. And they look at it almost as existential, as if like their business is going to perish if they don't do this right. And more immediately they're going to get fired if they, they don't do this right. And I think if you can, and when I see with the best companies like you could, you could say this about Windsurf, you could say this about Glean and some of the other companies that, that I've been somewhat close to is that if you can get mind share with the CIOs, there's this mimesis that plays out where then the next one has to buy it and the next one has to buy it. So I think really being first and being looked at more of as like a true pioneer of the space rather than like a company that's being competent about how they bring AI into their existing products is just a much, let's just say sexier position to be in when you're going and talking to CIOs and CEOs of these really large corporations. And so that's the side of the fence that I'm more inclined to bet on as an investor.

Makes a ton of sense. Let's talk about outcomes. I think in 2021, 2022, especially early 2022, everyone was writing of like writing to lots of $10 billion outcomes. That was like maybe the general sentiment you shared recently that you're thinking about trillion dollar outcomes now is the right framing as sort of a scaled platform fund to be thinking about making sure that you're in the handful of companies that over time can be trillion dollar businesses versus just expecting tons and tons of these $10 billion plus companies.

Yes. Just to reiterate my position there that you mentioned, what I see happening right now is that there are companies that seem to be scaling into market opportunities at a rate and scale that we just really haven't seen before. That can actually convince me that there will be companies that cross trillion dollar valuations in the private markets. Of course many companies have done this. Well, I shouldn't say many, but some of the great household name companies have done this as public companies. And a lot of the value has been created there. Obviously now these companies are staying private longer, they're growing faster, and therefore I think it's not unfathomable to think of an OpenAI or a SpaceX getting to this place where we're talking about trillion dollar companies in the private markets. So what does that mean for the venture business? What it means is there's even more headroom in this later stage investing part of the business that the mega platforms operate in to generate alpha there that I think just wasn't there before. So that's hard for me to ignore personally. And I think why these mega platforms like Lightspeed are in a really unique position to capitalize on that. I think there's an obvious question as to are these companies a point in time thing or are they more foreshadowing of more of these to come? I think that's something that we're kind of figuring out as an industry and watching, but my instinct will be that just the problems and the ambition of the problems that founders are going after these days are just so fundamentally massive that I think we will just see much, much bigger outcomes aligned with those companies, succeed at going after these really fundamental problems like space travel, like intelligence, for example. And then I think with respect to the $10 billion outcomes, I mean look, you're, you're still going to see a tremendous number of those, right? I think that these, these AI app companies are like, the large platforms are going to be very acquisitive of these companies. I think you're going to see things like Moveworks, which, you know, ServiceNow announced or, or you know, the windsurf rumors that OpenAI and windsurf are having conversations around. Like, I think there's a lot more of this to come and so I think the venture business will still be driven by those outcomes. But I think when we have these trillion dollar outcomes, even if they're few and far between, it just completely distorts and changes the shape of the industry. And I think that the mega platforms are, are well aware of that and architecting their setups with that in mind.

Yeah. In many ways these bigger companies would prefer to avoid four or five rounds in a row that are predominantly random SPVs with hundreds of underlying shareholders that are then all trading those positions over time and it's very chaotic. If you could just have, if you could get the majority of your cap table around a single dinner table for a few more rounds, you might be more inclined to stay.

Sure. Last question. Any lessons from Warren Buffett? He's transitioning out of Berkshire Hathaway, obviously a very different style investing from early stage venture. But at the same time, if Lightspeed keeps scaling aum, who knows, anything's possible.

Yeah, so I guess the, the thing, whenever I think about Warren Buffett and I think technically Charlie Munger said this, but I sort of think of them as one in the same for all the lessons that they share, the one that I always come back to is this notion of the too hard pile.

Right.

And so what the too hard pile refers to is when they see a business that someone is trying to pitch them on being a really compelling investment, if it doesn't necessarily fit in the box of like their circle of competence and their ability to underwrite that business, like with an unfair advantage, it goes in the too hard pile, even if it ends up being a great investment.

Investment.

And look, I think venture is all about exceptions, but at the same time, I think knowing your strengths in terms of how like the type of people that you can read and work with, the types of markets that you can understand, the type of companies that you can start to really like, dream with and kind of look out forward and have a sense and intuition of what they can be, there's this notion of a too hard pile and venture there where I think sometimes the mistake that venture investors will make is they'll run after things that they don't actually understand, either at the personal level or the market level. And what I think I've really Learned in the 11 or so years I've been doing this is like there is a notion of a too hard pile adventure and just like sticking to your strengths and really being open minded, but at the same time like understanding your core strengths that you can anchor on as a picker. And so that. That would be my answer.

That's great. Well, thanks so much for stopping by.

Congratulations Job come back on again.

We love personal.

Thanks guys.

We really appreciate you hopping on. We'll talk to you soon.

Thank you for having me.

Bye.

Cheers.

And next up we have Kathryn Boyle from Andreessen Horowitz, the the pioneer of American dynamism, one of the top coinages.

Of the last few years.

Yeah, for sure. And. And more relevant than ever in some ways. Mission. Mission accomplished. I mean last week in D.C. it was American dynamism on display. Right? Everyone, everyone is a believer and the question is, where do we go from here? And that's what I'm excited to dig into with her today. Catherine, welcome to the stream. How are you doing?

Thanks for having me. It's about time. I'm so happy to be here. Longtime listener, first time caller.

Great to have you with the flag in the background.

Yes, fantastic. Where should we start? I'm curious about just state of affairs with the American dynamism movement. The project feels like it's maybe time to rest on our laurels.

What do you think We've achieved American dynamism.

It feels like it, yeah. But I mean, seriously, it feels like it's broken through.

It's mainstream cultural victory may be coming before actual victory.

Sure, sure, sure.

In that American dynamism is almost mainstream now, at least in the venture world. But job's not finished.

Job's not finished. So what are the key asks in D.C. from, from Silicon Valley right now? What are the top projects? Where should tech be focused in terms of the American dynamism project?

Broadly right now, totally. So it's nowhere near finished. I mean, this is like three or four years into a 30 year project, which is always good when you have those sorts of aims. And I'd say it's even longer than that. When you think of Defense 1.0, it started around 2015, 2016. It sort of has, it's become this very large movement. But I'll tell you, like, last week was a huge, huge week for American dynamism inside of the dod. And the news sort of got buried in techland. But it was just, it's probably one of the biggest things to happen in the first hundred days of the Trump administration. The army announced, what's what they're calling their Army Transformation Initiative. It was with Secretary Driscoll, General George, they actually went on Fox and Friends, which was like a huge deal, that they actually went public with it and they said, it's been way too long. Like, we have so many platforms. We want to modernize, we want to divest from technologies that are no longer useful. We want to modernize the force. We want to make sure that we get rid of civilian jobs that are not important anymore. We want to make sure we are not having wasteful spending. I mean, it was sort of like I had read in NBC after it came out, they said like the army is doging itself. I think the real story of what the army is doing, and kudos to them because they truly are the first movers, is there are people inside of the DOD who have been saying these things for years, pounding their head against the wall, saying they want acquisition reform, saying they want to work with startups, saying they have to have new platforms that come in and actually support the needs of the war fighter. And they've been pounding their head against the wall with little results. And so when you have a doge effort going on in Washington and an administration that really wants to see the waste disappear, it allows for those people who are really forward thinking, like General George and like Mike, Secretary Driscoll, to come forward and Say, hey, we're going to do this ourselves. We're going to pick out the new technologies that we need. We're going to get rid of things like Humvees that we haven't needed in 20 years. We're going to figure out what is actually useful for the army, and we're going to do it ourselves. So it was a huge week. I think it was probably one of the most it was reported, but it didn't get sort of the praise from technology that it should have. This is an extraordinary movement that I think has really been a long time coming, and it's something that a lot of the early American dynamism companies have been pushing for, for a long, long time. So congratulations to the Army.

Yeah. So can you give me a little bit.

It's better to doge yourself than get doge.

Always doge yourself.

Doge yourself.

Yeah. Can you give me a little bit of a tour of the market map of the beneficiaries of this transformation? Obviously, everyone knows the palantirs and the andurils, but I imagine that there are tons of pockets of value and projects that need to be overhauled. Is it mostly drones, weapon systems, vehicles first, or are there other areas that companies that you talk to are focused on in this transformation process?

Totally. So, I mean, in the early days, that's what's been called out. So it's, you know, it's early UAVs that were developed 20 years ago. They're not relevant post Ukraine war. I mean, it's actually sort of, I don't want to say comical, because it's not funny, but when you think about the fact that the Humvee was developed in 1980, it went into production in 1985, and that the army said in 2004, this actually isn't useful for us anymore because there's this new type of warfare called IEDs, and we're not going to use it. And these are still in production in 2025. And so that's a perfect example. And I think they're sort of, you know, they're showing certain programs that are so long overdue that they need to be changed. But I think it's also smaller things like the program of record was developed when you had to build out these very, very large, large platforms, and you had to plan years and decades in advance. And when someone won a program, it was understood that they were going to run that program for decades. And now the army has ways to acquire things where technology is changing at a pace and at a speed. That really needs to have a genuine competition every year, every couple years. And so that really benefits all startups, that benefits all incoming emerging technologies that are going to serve the fight of the future. So in some ways I think it's, you know, they have specific call outs that they're pointing to now. But there's definitely. This is sort of a, this is great news for startups because what it's showing is that there is actual, actually the will inside the DoD to change things bigger than just, okay, we're going to give you a.

Is there any movement on procurement reform? I remember I watched this hilarious movie, Pentagon wars, all about the development of the Bradley fighting vehicle. And it's a very funny movie, but it kind of, you know, everyone has a different requirement. They all get put together and becomes this kind of platypus of a vehicle that is part tank, part troop transport, all these different problems. Part of the benefit of modern technology is that we do develop platforms and things like Anduril's Ghost can do ISR and also do munitions and a whole bunch of things. There are projects that do need flexibility. But is there a cultural shift around moving away from exquisite systems or just when folks in defense tech say we need procurement reform, what are they really talking about in 2025?

Yeah, well, I think they're talking about different things because I think what this initiative is going to do is it's going to allow the army, and I think there'll be a lot of replicas of this as well. I think other branches will look at this and say, this is a great idea. Instead of being locked into a program for decades, they're going to be able to say, actually, we would love to use that capital for something new. We would love to recompete that program. We would like to be able to be better capital allocators because now their hands are tied. And I think when you talk to people who are just in normal business, not in defense world, and you say, hey, if you had to make a decision about a purchase that's going to last for 10 years and get no updates and you would not be allowed to change it, what would you do? We would say, that's insane. Like, how is a CEO going to say they're going to acquire technology for their company that they're going to use for 10 years and there's going to be no software and updates, no nothing. And if it's not working, you can't get rid of it because you're told you can't get rid of it. I mean, that is literally what the DoD has to deal with. And so I think what's great about this initiative, again, it's one, the fact that the army is going public, says that they mean business and that they have air cover to do this. But I think that the meta story that we're going to tell ourselves is, you know, Doge has been very public in the last week of what they're doing. There's been some pushback on, you know, why are you working on IT systems? You know, everyone has sort of their, their favorite Doge meme of why it's not working. But the story of Doge, I think when we look back, even in a year is going to be that it gave extraordinary air cover to reform in every department. And the first example inside the DoD, this is the biggest example in the last hundred days. To see General George out there saying like, this is what we need to do and we are committed and we're going public because we are so committed, which doesn't usually happen. I just think it speaks volumes. And tech should be celebrating. This is a big, big day for everyone in the American dynamism ecosystem. For every defense company that's been fighting for this for a long time.

Yeah, yeah. And for all of this to be, to actually achieve those sort of 30 year goals or execute against that 30 year plan, things need to be bipartisan. People need to realize we efficiency and innovation across every branch. I'm curious on the investing side, I'm sure you have this painful experience all the time where you meet companies that probably are going to be great businesses, are good for America, but maybe aren't a fit for venture. What's your updated thinking on understanding if something can be a great important business versus something that can truly be a generational outcome?

Yeah. One of the biggest mistakes I see investors make is trying to predict tam. So early, early days of Anduril, a lot of people didn't want to look at Anduril because of ethical reasons or because they were worried about being involved in defense. But there was another meme that was going around which is almost comical now, which is, well, it's kind of a small town, right? Like a border security company, like, oh, they're selling to dhs, Department of Homeland Security. Does it really help have that big of a. But like, like these were real things that people said that are hilarious now you guys can imagine. So it's like, like I think it is very difficult to predict a growing markets eventually what some of these incredibly important technologies are going to be worth. But I, but I agree with you. There are some examples of companies that might not be, you know, standalone businesses, but will ultimately, you know, Enduril's done a very good job of acquiring businesses that aren't going to be these venture outcomes but work, you know, very well within their platform. But I think in some ways there's always surprises with companies that were initially passed on or people were very skeptical of their TAM in the early days and then you look back and you see just how much they've grown or how much the product has shifted or how important the platform actually is.

Yeah.

How have you been kind of reacting to ignoring the politics of it all, but reacting to, you know, the trade war in many ways. Like when you have these like big geopolitical, you know, events playing out, that doesn't necessarily mean start to make a lot of venture investments because venture investments take a long time to play out and it's very hard to predict the future. Are you, are you seeing new opportunities related, you know, to the events of the last month or are you still just, you know, continuing? Like I imagine when you guys invested in Hadrian, you weren't like betting on a trade war in two years or something like that. Right. But how do you think about timelines and is the benefit of sort of thinking in that 30 year timeline that you're kind of able to broadly ignore or not place too much focus on the headlines of today and just think about what America needs in the long run?

Yeah, no, I mean, I would say my bias as a very early stage investor is to not think about the immediate timeframes. These are very long cycles. You can sort of see trend lines, but it's hard to know what actual events are going to happen, obviously. So I think even when we made the investment in Hadrian, as you called out, there was a movement towards re industrialization and towards investing in manufacturing that was early and nascent. But if you were hearing the signs or spending a lot of time in D.C. or even both sides were very focused in Washington on how do we think about investing in America? Reindustrialization, how do we bring back manufacturing? So, so it didn't feel like it was, you know, it felt like it was a message that was being heard, then it's just of course been accelerated. And I think truly if you, if you think about kind of the next 10, 20 years, reindustrialization is going to be a very important theme. So, you know, it can feel like everything is hot right now or feel like we're in the middle of something. But ultimately I think we're again in this like very, very early, you know, three or four years into a 30 year journey of this, this sort of. It took decades for globalization to really hit its peak. And now we're sort of seeing the pendulum swing again. And so you're going to see a lot of companies that are built in the next few years that become generational companies.

Yeah. How do you think about the kind of broader market map of American dynamism? Obviously Anduril is just a great case study in the American dynamism thesis. But at the same time as you go through the American dynamism website, like you can go back to like the moon landing and the development of the iPhone as like examples. At the same time there's this question about like the Anderal of X is Anduril? Potentially. But then that doesn't always come true if you're talking about something that's truly outside of their purview in consumer or in, you know, Flock Safety or Hadrian. These companies are not competitive. But maybe fit in the thesis. How are you seeing the, the investing landscape of American dynamism kind of evolve as more people come into the category, but then think outside the box and address different issues? I mean, I've seen even like some education stuff kind of fit the broader thesis. So how has that evolved over the last couple years?

Yeah, we define it as companies that are actively supporting the national interest. So it is a very simple definition and founders have different interpretations of what it means, but there's common themes. And actually this goes into why we decided to have a separate fund, why we decided to build out the platform is because these companies need something entirely different than a true enterprise or a true consumer company. And when we looked back at our early portfolio of Shield AI, Anduril, these astranas, these companies that were sort of what I would call space and Defense 1.0, we'd sort of put them in the enterprise category as though they're no different than a company that's selling business software to the Fortune 500. Right. It doesn't make any sense. They have totally different needs. You know, Andrew famously said that they had a lobbyist on staff on week one. There's things that companies need that our view is that we could build a platform to help support these companies, namely in Washington, understanding who their buyers are on the BD side, which is a very difficult kind of role to hire for inside of early stage startups, but then also understanding kind of the Washington game, which is Very important for companies to understand if they're going to be selling directly to the federal government. Now you mentioned education and there's a lot of companies in our portfolio too that are selling to state and local. And that is totally different sales motion. You know, that's, that is something where, you know, company like Flock Safety has sort of rewritten the rules of how you sell directly to a police force or, or how you, how you even follow what I would call kind of like a second city strategy of not going to the biggest cities but going to these smaller municipalities and getting a lot of, you know, almost circling a big city with the suburbs around it and kind of getting a lot of momentum from, from the citizens. But all these companies have very similar needs and sort of things that they have to think about early rather than later. And we've now seen enough of sort of the early success stories in public safety and aerospace defense, like sort of these sort of generational companies that came up in the last several years that the boom that's happening in these categories, many of them want to replicate those playbooks and have, I think with a lot of success.

Yeah. Can you talk a little bit about almost like lobbying as value add for venture capital? I remember I was running an Andreessen back company a decade ago and there were, I met the CEO of McDonald's through Andreessen at some happy hour and there were trainings on B2B sales and PR and all this stuff. But there was no concept of regulatory or lobbying. But I imagine that's a piece of it. But it's at the same time you need to, to eventually staff your own government affairs team. How are you working with early stage founders to get them up and running in Washington?

Yeah, well, I mean, I would say a lot of the founders that we backed are very, I would say sophisticated in their knowledge of who they need to be meeting with or the types of company or the types of people they should be meeting with in the DoD. But the thing that I think we're actually, I would say even more successful in doing that's really important is, is making all that knowledge public. You know, we make our playbooks public. You know, my partner Layla, who runs, runs our Go to market in D.C. she wrote this incredible glossary of things you need to know if you're even going to approach a venture capital firm about, you know, about a defense tech company. Like these are the acronyms, these are all the acronyms you could possibly hear in a conversation with the dod. And it's things like that where we do want to make that public and we want to help educate the ecosystem. And I can tell you like five or six years ago, the number of venture capitalists who understood the difference between contracting, the different types of contracting vehicles that understood the names of different people on the Appropriations Committee, these things that are now sort of, I'd say, taken for granted were not well known. And so I think that's a huge part of it too is really helping the ecosystem get up to speed, helping companies sort of speed run that early stage process of like, you can ask any dumb question and we're going to help you with it.

It.

But then there is also something to be said of. It is much easier to get a meeting with certain people if you are at a dinner that's sponsored by a group of people who are always in Washington. I mean, we have a Washington office now. We are fully staffed in terms of both Republicans and Democrats and people who work on both sides of the aisle, people who specialize in DODs, people who specialize in certain types of the DOD. And I think that is like a very important thing to be able to say. Okay, you're. You need to meet with X, Y and Z people or you need to understand the glossary before you can even begin to have those conversations.

Do you think defense tech is now mature? It's oversaturated. I was joking with Jordi that I think world peace is like maybe six months away. And then I'm going to start poaching top defense tech talent to build the next generation of advertising optimization. Because I think that we just got.

To get them back in, get them back next company. You know it.

Yeah, yeah, but I mean, but, but I mean seriously, like it does.

That would be the most, you know, the open AI, you know, AGI is always six months away.

World peace is defense tech.

Founders need to just go like, yeah, just two more. Two billion more.

And like world peace. Yeah, but I mean there is a serious question here. Like there. I know some people who are like just so excited that they're jumping into things. But, but you know, being even. I'm not even in the industry, but I'm a little bit more tapped in and I'm like, like there are already seven companies working on that exact thing. I don't know if this is the best time. Is it, is it worthwhile to steer, you know, these incredible hackers, these great entrepreneurs, like, maybe towards the, the more like the more tangential hard tech problems, like what I see with like, but base power is doing Is like it's hard tech, it has defense roots, but it's not directly something that's on Anduril's roadmap app. What advice are you giving to kind of the entrepreneurs that are like in between things thinking about serving the national interest but not necessarily putting themselves on a collision course with a multi billion dollar founder mode company?

So I'll say deterrence is the constant project. Right. So like your whole like the meme of maybe six months away from world peace.

Of course.

I actually think that was part of the problem in the 90s. Right. Like seriously that people thought it'd be over.

Yeah. Democracy will the end of history, end of history, end of history.

We flourished and we don't need to be working on these things. So it is very important that we've gone back almost to the roots of the DoD saying like, hey, actually we remember what it's like to be a country at war and we need to be constantly focused on the next technologies. We need to be focused on deterrence, thinking about as deterrence because we want to prevent war, but we have to be continuously building. So from that perspective, I think again we're only a few years into this real movement of Silicon Valley caring about working with the Dodge and I hope that it's a 30 year project. I think that's what we all really should be, should be focused on is making sure it's a 30 year project and even longer than that. But to your point, what I think is so interesting about companies that are founded out of Anduril or out of SpaceX, we've done an analysis where we looked at all of the founders who've left SpaceX in the last 10 years and there's hundreds of companies that have been formed in just wildly different sectors, whether it's radiant nuclear, working on nuclear, including Energy Castellan, which is in our portfolio and they're building hypersonic weapons. I mean some of the best founders are trained, I always say they go to the school of Elon Musk. They learn manufacturing, they learn production and then they want to take that to something that is pretty low hanging fruit. They want to make sure that they're competing against the incumbents of yesterday who have not modernized their production, who've not modernized a lot of the technology that they're working on. And so I think you see that with a lot of the yes, there are some extremely crowded fields, but then there are also so areas of defense that are really just boring and completely untouched. And you're seeing founders realize that too, that it's not something that's interesting to any of the existing companies and it's a low hanging, it's low hanging fruit. It'd be interesting to work on that. Or they're interested in being a tier one supplier. We have a number of companies that are really focused on the supply chain aspect of defense and they're partners to Anduril and they're partners to SpaceX and other companies in the ecosystem. So you really are seeing founders like, like understand that question in a very sophisticated way and saying, okay, we're going to go after the parts of the supply chain or the things the DoD needs that no one is focusing on. And that's been exciting to see too.

Can you, can you talk about M and A in defense tech broadly? Anduril's done this very well. Saranic announced a deal last week acquiring gulfcraft. That feels super significant. I'm curious, you know, how you advise founders kind of broadly when thinking about that. We actually had Augustus on from Rainmaker earlier who had acquired a company in his space. But when's the right time to be thinking about that as somebody in defense tech and. Yeah. What kind of opportunities do you think make the most sense?

Totally. Well, I think both Anduril and Sironic, they have incredibly unique stories in terms of where they're operating and what they need to do in order to grow and scale. And they've done it at a speed that is just incredible. Right. Like they have very sophisticated teams that know a lot about acquisition. I'd say for earlier stage companies, like it's, you know, we're seeing more companies that are, that are potentially interested in doing that. It can speed up, it can speed up innovation. It can speed up being able to work with certain customers, that's for sure. If you're acquiring a certain capability so that you can sell to a major prime, that's something we've seen more of too, which is, is interesting and exciting. Like I don't think we were seeing that several years ago and now we're certainly seeing companies experiment with that. But when you, when you said actually M and A, I actually thought you were going towards something that I, that I think is actually more likely to happen in the future. That hasn't happened in a long time. When you look at these existing prime prime companies, the big five say they've really only acquired companies that have not raised any venture dollars. Right. Like they don't acquire companies that are kind of seen as these bleeding edge companies to shore up their capabilities. And my instinct, we're talking about Army Transformation Initiative, we're talking about a government that's becoming far more sophisticated and a DOD that's becoming far more competitive. It hasn't been competitive for decades. And now you're seeing all of these startups come in. My prediction, if we're looking five, 10 years out, is that the companies that have not been acquisitive for the best engineers and the best technologists and these capabilities that they need are going to find that as their only solution. And I think we could potentially even see another last supper situation, which of course in the 90s was the famous case where the government came to all these primes and said you have to merge. You have to have kind of forced mergers and acquisitions because the budget's going to decrease. And of course that was probably the wrong strategy given sort of the results that came out of that. But I do think it is something that I would not be surprised if in five or 10 years you're seeing the existing primes that have been around in many cases for 100 years saying we have have to work with these startups in a much more tangible way. And you could see a highly acquisitive ecosystem that people don't necessarily write into their thesis today.

How do you think about leadership at the individual Primes and people over the last few years, Boeing has been dragged through the dirt by pretty much everyone. But I think of it as a great. In the fullness of time, it's a great company.

I ain't going.

Yeah, John. Is John so loyal.

Boeing. I can't excitement.

He'll never fly as a white collar.

Worker, you know, you don't risk your life very often. When I go on a business trip and I step on a 737 Max.

No. And I mean I just look at it as China would love to have a company that was actually competitive with Boeing. It's hugely strategic asset. But I'm curious, do you think that you know any of the Primes, you know, and every now and then you'll see a prime release a video that's like clearly like they hired a marketing agency and said like make us like an Anderil movie, you know, and then they put it out. But how do you think about. Do you see that the leadership at the primes.

Lockheed Martin invented artificial intelligence, remember?

Yeah, they came out last week and claimed that they invented artificial intelligence.

They basically just said, you're welcome. Welcome, you're welcome.

Yeah. By the way, you're welcome. But I'm curious, any hope for transformation yeah. Do you have conversations with them or is it, is it.

Because, I mean, even though it's not an opportunity for, you know, venture capitalists necessarily, like it would be great if they were highly functioning in the American interest, like as Americans.

And then you have the, you have the program that was spun out of, you know, was it Microsoft? Microsoft?

Oh yeah, the HoloLens.

Yeah.

Sorry.

So I think there's probably more kind of even spin out opportunities where new companies collaboration totally value on top of existing programs.

Yeah. I think Palmer, and actually Brian Schimpf has done an incredible podcast on this where he talks about sort of what happened at these primes and why things sort of went by the wayside. And it's partially because they really stopped focusing on research and development. They didn't really need to. There was no real competition and they kind of recognized that they would always get paid by the government to do new things. Again, it's sort of this confluence of factors that, that led us to be, I don't really complacent. And I went back actually last night and was reading the first few pages of the Kill Chain by Christian Brose, which again, it's like it's reading it. It was written, I believe in 2019 things changed so dramatically in terms of the conversation. But it's like going back in a time warp and saying, wow, like in 2019 people really didn't care that Boeing was collapsing or that there were these private or these public companies that were doing no research and development because it didn't matter. Right. That was pre war in Ukraine. It was sort of, you know, in some ways it was a security theater. Right. Like we don't actually have to remain secure, we just have to pretend we're secure. And so I think there is this new sort of wake up call where a lot of these companies are going to say, one, if we, if we can't recruit the engineers and do the research and development in house, we're going to have to acquire it. So again, that's why I think you're going to see a lot more acquisitions over the next several years, because I think a lot of these companies are really going to have to change. But two, like these initiatives inside the DoD that are now getting real steam that is going to force incredible competition that has not existed even in the last 10 years when we've all been investing in American dynamism. So I'm actually much more hopeful and excited about where I think the world is going because I genuinely believe that a lot of these Players have sort of woken up and are looking for solutions because now they know they have to.

Yeah, yeah. A while ago I was talking to Trey about just the lack of the deeper supply chain, specifically in drone motors. Like there are no small drone motors manufacturers in the United States. They're almost all made in China. And that feels like, oh, there's almost a startup idea there, but I don't know if it's a venture idea. There's actually a drone motor company in Washington. They outsourced some of their supply chain recently. That feels like almost like we need an American dynamism private equity fund to just turn those companies around. They're not going to be These power law $100 billion companies, but they might produce 20% returns more reliably and they. There's maybe no venture style, zero loss of capital risk. Do you think we need American dynamism for private equity? Is that something Andreessen would do at some point? I mean, you're kind of in every asset class now, so anything's possible. But is there a flip side to the venture model within investing in the national interest?

Well, I certainly think we've invested in some companies that are focused on component parts. So we're, you know, we're invested in amca. I know that Jay was on recently. So like there are more and more companies that are figuring out ways to do this. And again, those are the examples of companies that are, that are, you know, much more focused on how do we, you know, how do we acquire companies, how do we, how do we, how do we make it, you know, make them, I would say tech forward, but also think about like, how quickly we can get into the supply chain, some of these larger primes. But I think you're, you know, you're seeing a lot of innovation around the edges on this and you're probably going to see more and more founders who recognize that if that's where the real problem is, they're going to build there and they're going to build in the best way that suits them.

So, yeah, does it seem like there's almost like a way to turn something like MP Materials we were talking about? You wouldn't think like, oh yeah, venture is suitable for mining at all. But now there's a couple mining companies that are figuring out how to inject enough technology to make it potentially a venture scale opportunity, which is interesting. Do you have anything else? I have a couple more.

I got a totally switching gears. But you had a post recently that I liked. It was, I'm committed to doing whatever the opposite of gentle parenting is. And I wanted to ask you if you found any Lindy books on parenting, anything that sort of resonated that you're implementing. John and I both have similar aged children and I always have this, you know, sort of concern around, you know, you want to experiment, you know, with parenting and try new things and maybe not just take exactly what the mainstream media says is the right way to do parenting. But then, you know, your children have one life, you know, you want to not run, you're not trying to run a B tests, you know, on there.

I have three boys so I employ what I call the snake pit strategy, which is you lock them all in a room and then it's just a snake pit and they just like wrestle and you know, if there's damage, they'll heal and that's fine.

Right way to do it. Well, I followed up that tweet with the tried and true Irish strategy, which is the hay method. You just shout hey.

Increasingly.

Yeah, hey, hey, hey. You know, it works like there's something about, it definitely works where your sons actually turn around and listen to you. But sadly, you know, there aren't like any books, like old timey books that I found that actually teach, I would say the best way to train children or to child rear. But it's interesting, I always think that grandmothers kind of know best. So if there's a grandmother in your life anywhere, they remember how it used to be done and how effective it was. And it was probably harder in the olden days too. So it's like basically just ask grandma, Grandma knows.

I would plug free range kids all about this. Our society has moved towards don't let the kids just run around in the neighborhood. They could get kidnapped. There's so many bad things that could happen. There's been a lot of fear mongering from the media and so that's kind of led to kids turning in, in inside, becoming inside kids, staying on the iPads or whatever. But there's this movement in the free range kids to just be like, yeah, actually like you're six, you can ride a bike, like ride your bike to the park, like, and that will enforce the society to maintain safety.

I need to find the rate the repeat of parenting. Yeah, that's, that's the next alpha. Yeah. My problem with the grandma method is that my, my mother and mother in law just want to let the kids do exactly what they want to do. You wanted two cookies, you want three cookies? So maybe they're, maybe they're Maybe that is Lindy.

Who knows?

Maybe it is Lindy.

I'm the great grandmother, right? Like the one who remembers how tough it was.

Yeah, that's right.

I want to get your reaction to Warren Buffett. Obviously, he stepped down over the or. Announced. Announced his transition at Berkshire Hathaway this weekend. What do you take away from Buffett's legacy as an investor? It's obviously a very different type of investing, but there's so many interesting lessons there from company building to investing to everything else. What was your reaction?

Yeah, I'll take a little bit of a different take because I was watching the annual meeting last year, and there was this moment that happened, and I actually wrote about it and a piece on friendship and founder friendship where he was doing his usual, you know, going through company analysis, and then he just kind of forgets where he is and says, Charlie. And everyone stopped. It was like, you know, I think. I think I teared up seeing it because it was like he was so in his zone after so many years of working together. He had forgotten that Charlie had passed, and he was almost embarrassed about it. But I thought it was the most beautiful moment because one of the things I don't think we talk enough about in venture world is founder friendship. And I mean, like, deep, deep friendship. Not like, oh, we went to college together and we were friends or whatever, we're gonna start a startup together. I mean, those people who, like, work together decades and decades out. I actually think this is why family businesses often work better. Where even if you look at, like, the Collison brothers, it's like they've sharing resources, you know, for. Since. Since childhood, since they can remember. And, like, there's something about just the going through life with someone, suffering with someone, understanding how to, like, you know, end someone's sentences that leads to these just incredibly rich and beautiful companies. And I think if, you know, if we did an analysis in Andreessen Horowitz and just looked at the companies that were true outliers, I think there would be stories of these people are like brothers and sisters. And Andrew, certainly this, right? Like, it's, you know, the founders there were DARPA challenged together, like, their first day of college, right? So it's, in some ways there's something about just having these deep relationships that span the test of time, where you're on a journey with someone and it's real, like Aristotelian friendship, not like faux friendship, but true love. And clearly you saw that with them. It's just a remarkable thing how they were able to kind of be true brothers and kind of each other's better half throughout their business career for as long as they were.

It's amazing. Last question. What should we do with Alcatraz?

Oh, you know, I love all the ideas of turning it into a casino.

But I do know I haven't seen that one.

I like that. I was saying, I was saying tax haven and general solicitation rules. So you can like go out there.

Go quiet periods, sell your angel, lock up periods. Just unfettered libertarian capitalism out there.

That sounds good. But there is something about bringing it back in its original form. You know, it's like there is something about these buildings that the President likes to restore into their former glory. And so if Alcatraz is the case, like keep the historical details accurate.

Sure.

You can kind of see where it's coming from. He's definitely a historicist in that. In that regard.

Okay, well, thank you so much for joining us. This was fantastic.

Yeah, this was great. Come back on again soon.

Thanks for having me. Have a good one.

We'll talk soon. Bye.

Cheers.

That was fantastic. I hadn't heard the casino idea. She's clearly on a different part of X than I am.

I think I saw a little bit.

Of that turn into casino.

I was singing if you made it river, you could just put casino.

True, true, true.

Yeah, yeah. It should be completely home of riverboat gambling.

It needs to be either more lawful and become a prison or more lawless and become a gambling haven. It does have like that riverboat vibe of like, you know, being in the bayou, hanging out on the riverboat gambling. It's kind of like international water. Anyway, our next guest is here. Welcome to the Stream. How you doing? Do we have you? Hey, how are you guys?

Good to see you.

We're doing great. Would you mind kicking it off? A little introduction for yourself? Yourself?

Yeah, for sure.

Hey.

Hey everyone. Aditya Agrawal here. I'm the managing partner here at South Park Commons. I've been in the tech industry for about 20 years now. Kind of started off by meeting a very young 19 year old Mark Zuckerberg in like early 2005 when I just moved out here. Facebook was still working out of the famous house and you know, so kind of meeting a 19 year old Zuck at that point was pretty obvious. The dude was special.

How old were you at that time?

I was 22.

Wow.

Okay, so you were like three years younger than me, but generational founder. I should probably join the company.

That's great.

You know it's funny. It's like I kind of joke that I love working for founders younger than myself because I went for working for Zuck to. I then did my own company after Facebook, which then got acquired by Dropbox, Dropbox's first acquisition. And then I was the CTO there, working for a young Drew Houston and a young Arash Widowshi.

Wait, so did you recruit Guido Van Rossum personally? I did. That's incredible.

Personally recruited GVR to kind of join.

Dropbox, creator of Python.

Wow.

Absolute legend.

And it's interesting, right?

The benevolent dictator for life of Python, probably the most important programming language in modern history.

Yeah, it's interesting you say that because, you know, Python at that point Dropbox was probably the most used, I would say, consumer app, maybe actually the most used kind of app in general, written mostly in Python. But most of our. A bunch of our backend and front end was actually kind of like code gen using Python. And Guido is a legend. I mean, like, I think that the way he has crafted Python both by himself, then at Google, then under kind of the Dropbox auspices, was just legendary.

And.

And it's kind of amazing. It's kind of becoming the programming language of choice for AI as well, right? Kind of like most of the AI programming is actually done all in Python, which is pretty crazy.

Wild.

Yeah. Best to ever do it.

Let's talk about the news, because it was hitting the timeline, I think it was Friday, New Fund three. Maybe talk about the genesis of the fund and the series of funds to get where you guys are today.

For sure. You know, happy to tell you about SPC Fund 3, that South Park Commons Fund 3. But maybe I, you know, instead of kind of telling you about the fund sequence, let's talk about why SPC exists. Right? SPC was started in 2016 with the simple premise that if you are a talented technologist, do not waste your life kind of stacking small ideas, right? I'd say that there are two big mythologies that we've been trying to bust, if you will. So the first big mythology is that, you know, we all have this mental model of kind of like founders essentially getting a stroke of inspiration going up at the top of a mountain and then coming back to us with kind of the promised product, right? It's a very. It's framed as this like solitary hero kind of or heroine kind of act. But our strong premise is that great companies basically come out of insanely high talent density, right? They come out of places like PayPal, which kind of like kind of show like, you know, what greatness looks like. And then people go out and build things. They come out of places like obviously Facebook. Then we have had a bunch of companies out of Google, Xerox, Spark, obviously. And we also see this greatness kind of occurring in clusters all across us. We see it in elite sports teams, we see it in elite musicians. We kind of see it in essentially academia. So our take was that if you want to start a company, why would you want to go and kind of ideate by yourself yourself, right? Instead, be surrounded by super high talent density people who challenge you, like, you know, where interesting collisions of ideas can happen. And it's kind of a semi competitive collaborative setting, right? You want to be surrounded by the best people who are kind of challenging and pushing on your ideas. But then you also have a little bit of like, you know, you're looking over your shoulder, being like, I want to aspire to the greatness that I see around me, right? So that's our first mythology, which is that in order to start a company, you should be surrounded by great people. And the second one, which is maybe it's more than a pet peeve for me, which is that there is a generation of founders, I'd argue over the last decade in Silicon Valley, who basically, because of the availability frankly of early stage seed capital, kind of latch on to the first idea that they think of. Because they have some idea, somebody gives them a seed check and then they think that the idea is good. And our take is that actually instead of just focusing on the first idea that you have, take some time to wander, let your mind kind of go lateral, figure out it's unlikely that the first idea that you have is the best one, if you just think about it from a probabilistic perspective. So our take at SPC is that come spend 6, 9, 12 months with us, wandering, ideating, exploring, tinkering, letting interesting ideas come about. And in some ways, everybody is so focused on scaling the mountain. We talk about hyperscaling, we talk about scaling the mountain that nobody stops to ask, like, is this the right fucking mountain? Like, is this the best mountain that you want to go climb? Everest has like, you know, 16 peaks over eight. Sorry, the. The Everest range has like 16 peaks over 8,000 meters. Like, which one are you going to pick? Right? Like, that's a pretty good one, right?

So K2 becomes the hardest.

K2 is the hardest in the winter. Highest fatality rate by.

Sure. Some founders just want the pain and so they go K2, North Face during the winter. Oh, yeah, really quickly, what? The name, not South Park Capital, not South Park Ventures, South Park Commons. What does that mean?

It was a name that was actually chosen by our early members, right? So our early members in circa 2016, 2017. The idea is that it is a meeting place of ideas, right? Like it's kind of formed by the commons, obviously, very famously out of London, but a place where the intellectual public can gather to kind of like, you know, introduce ideas, kind of essentially debate ideas. Some of the folks that we were inspired by back in the day were Benjamin Franklin's Junto Club, right? We actually remain deeply inspired by that, which is it exists in a society to better each other, to kind of like towards greatness. So the idea was that SBC, I mean, sure, we have 20 people on staff here, we have a bunch of investors. I think we are awesome. But ultimately, a lot of the value of SPC is being surrounded by great talent that can all kind of push each other. So when you come back to the genesis of the fund, right guys, in the early days, there was no fun. We framed ourselves as a learning community. We framed ourselves essentially as like an exploration society, kind of the Royal Exploration society in the 1800s in the UK, with the idea being that, like, being a founder is kind of being like an explorer in the early days, right? You're trying to navigate the idea maze. You should be able to like, you know, throw away like the bad ideas in pursuit of the great ones. And then over time, what we realized is that this is actually an interesting model for early stage, kind of like company exploration. Right? So we would basically provide a place where people would come in and essentially it was very hard to get in, right? It's, you know, we do maintain super rigorous standards for essentially getting in. We put people through multiple interviews, reference checks. So for instance, this people, this year, 20,000 people plus will apply to be part of SPC across 250 spots across SF, NY and Bangalore. So it's very rigorous to get in. But once people essentially got in, we would kind of like have like a very vibrant intellectual environment where we would invite like really interesting people at the frontier of their fields, you know. So for instance, I remember back in 2016 and 2017, a young Vitalik would be like walking through kind of like svc, just talking to people about some of his ideas around distributed systems. We would have GDB and Ilya walking around telling people about kind of what was happening in deep learning. And I know that today these guys are like world famous. But back in 2016. They were still trying to pioneer something that felt a little bit heretical, right? Which is this idea that we were about to enter kind of a. A kind of like a Cambrian explosion of machine learning away from the deep learning winter. So, you know, we have always welcomed the people who are kind of in some ways pushing the boundary. So it was framed as a learning society. But as people kind of came and spent time in spc, we realized that they were actually converging on more interesting ideas for, you know, by way of their exploration. So as they started essentially starting companies, Ruchi and I, Ruchi is one of the founders of like spc, would basically write angel checks and introduce them to our investor network. But over time we decided that, hey, why don't we start a fund to invest in SPC companies? And the fund would also, for instance, the fees coming in from the fund would be used to essentially provide for staff and also provide for the building that we have in South Park. And that fund one was a $55 million fund in 2018. That fund has done phenomenally well. It's going to be in the top, top 5% of its vintage of that year. On the back of, on the backs of that, there you go, boom, boom, boom, boom. Is that the money bell? Okay, there we go. And then on the backs of that, you know, we raised another fund in 2000 in late 2021, which was 135 million fund. That fund is actually outpacing fund. Fund two is outpacing fund one. And on the backs of that, we have just raised Fund 3, which is the $275 million fund to invest across, across the globe, but also specifically the USA and India and the model scaling. Well, you know, like, we're curious.

So. So I want to get into potentially some of the learnings, the broader learnings for companies. You talked a little bit about the sort of the unicorn factory. You know, companies come, they get, you know, 2 to 5 million, announce their fundraise, maybe they launch. And that's sort of like this, like, you know, they get. Then they're on this sort of treadmill, right? And it just speeds up and speeds up and, you know, hopefully you don't get thrown off of it. At some point you can keep the pace up. But one of the things I've been talking about recently on the show is kind of the how that timeline can actually end up hurting your business. If you pick an idea, you have a super high profile launch, and then everybody knows you as this company that does this one thing. But Maybe in that process you discover a totally different idea or it makes sense to, to pivot. And I'm curious, you know, seeing so many of these companies go from zero to one and then I'm sure ultimately oftentimes you know, pivot into other areas. What is the, what is the, what is, what is the core advice that you're giving to founders that are joining at the earliest stages? Spc maybe pre idea or maybe they only have, have ideas of an idea to help them avoid that. You know, we saw, we had the founder of Clulee on a couple weeks ago and he's had, you know, two, maybe three, four, five super viral moments around what he's doing. And my advice to him was, you know, don't be afraid to basically reinvent yourself just because, you know, in three months if it's not working as well as it should. Right. And, and I've gone through this in the past myself, which is going viral before you have product market fit is not always gift and a curse. It's a gift and a curse. Right.

Double edged sword.

Yeah. I mean, honestly, I think it's a well phrased question and I think insofar as the question also contains some of the answer. Right. My take is that honestly, the cheapest time, the easiest time to kind of do pathfinding and to do pivots is in the earliest days. And in some ways, obviously my point of view is that you shouldn't raise a ton of money. The first 2, 3, 5 million dollars should be easy to raise. That should be your easiest raise in the sense of you're kind of converging on an idea that is making people excited. What you really want in the earliest days is to have a lightness of being in terms of making sure that you can actually objectively examine the idea from all sides. Right. Like if it's not working. Put another way, here's something I often tell founders. Your first $2 million of sales should be damn easy. Right? Like I think that people often conflate that, like, I'm going to go and do hand to hand combat to kind of go and get my first $2 million of sales. It's like, what are you talking about? Like, if you have a great idea, that first two, five should be easy. Right. People should be taking a product that is half baked because it's so resonant. So my take is that like wait around and kind of like keep on kind of like doing big pivots or small pivots until that idea comes. Focus. Right?

Yeah.

Entrepreneurship, like any founder that you talk to that has gone on kind of a unicorn or a decagon journey, it is long. It is super painful. Right? Like, if you are going to sign up for a super long kind of like game, take the time in the beginning to make sure that it's actually like the right mountain, the right game to play. And I think that, I mean, if you kind of think about it, guys, it makes sense that a lot of trends, I think, at least in our industry, make sense to me when viewed from the lens of like, we are trying to push founders to start things as soon as possible. Software kind of enables that super low cloud computing costs enable that. But I think the flip side is something. What we have seen is that I actually would argue that over the last 10 years, founders have shied away from a problem that doesn't immediately come into focus. If you can't code V1 in a month, or if it requires physical atoms, if it requires talking to anybody that is not over the Internet, people tend to shy away from it. Right. And my take is that there are actually tons of super interesting kind of problems to tackle if you widen your aperture in the early days. And again, you know, whether you raise like a million dollars or five million dollars, I would urge raising less. But ultimately it's kind of about having that mindset of being light in the beginning because none of your early investors actually care that much if you pivot like five times because the alignment around, like, bigger. Sorry. The biggest outcome is just there.

Yeah. How did you think about fund construction with the new fund? Just the nature of venture means that a handful of companies in the fund will end up being maybe an order of magnitude larger than the rest. And I imagine you've learned a lot of lessons from the first couple funds around making sure that you're able to participate in multiple rounds and that kind of thing.

Yeah, for sure. I mean, I'd say that the first thing that we often talk about is that fund size is an output, not an input variable. Right. I think there's a lot of managers in our industry that basically raise a big fund and then come up with a strategy to deploy the fund for us. Kind of the methodology always has been like, fund size is an output of the number of founders that we can serve, the number of people we can have in our community. We strongly believe in that our community is best facilitated when things feel intimate, limit. So this is why, like, you know, none of our spaces in SF, New York and Bangalore are more than like 150 people. And then we kind of have a sense of like, how many of these members can each of our kind of like investors support such that we can actually provide them with an amazing frankly, white glove experience. Like I personally work closely with like 30, 40, 50 founders per year. And that's a fun part of the job, right? So a lot of it is just like, what is the maximum number of people we can support both in the community, but also on a per investor basis. And then we kind of back our way into a fund size from that. That frankly, you know, I think that right now we are not constrained. The big, the big thing that we are constrained by is simply our ability to support these founders, not from demand for the product, if you will. Right. Like, I think that just looking at the numbers in terms of how many people want to be part of spc, I think we are humbled, I think by the interest. It also kind of makes sense, guys, in the sense that I think a lot of one of the really interesting trends for us is that, that how many second time founders join us, right? Or how many like essentially people who have been early employees at like a stripe or a scale join us. And I think it's because they see the. I think we're kind of spreading a philosophy which is that if you want to play this repeated game of startups, right, and you want to start companies, like it's better to be surrounded in the early days by super high talent density. I think one of our goals at SPC has always been that, that startups are hard, but startups create a lot of value. Let us figure out a way to kind of like actually make them more net productive for everyone. So I think that the minus one philosophy is resonating. We obviously want to serve as many founders as we can ourselves, but I also hope that like other people start up minus one things, you know, and we're starting to see a bunch of, I would say folks who have similar philosophies like minus one I think has entered the vernacular now, now, which makes me really proud. So yeah, fun size is an output. I actually think we can serve a lot more people as we figure out ourselves how to scale. But more than that, minus one is kind of a big thing. It's kind of a big philosophy that makes me proud to be able to share with the world.

Totally. You co founded Bezel? Sorry, not Bezel. Bevel. Bevel.

Bezel's initials were part of the motivation for kind of talking about Bevel. But yes, I did co found Bevel last Time.

Yeah, I would love for you to talk about that and how it's been. It makes a lot of sense. I think one of the biggest complaints people have about different fitness trackers is the data is not always consistent. Right. You know, your whoop might tell you a different. Tell you you're walking more than your aura ring or whatnot. And you know, having a platform that can pull all that data into a single place and help you understand different trends. Trends makes a lot of sense and just the nature of bundling and unbundling. But talk about maybe the genesis there and how it's been going.

For sure. I think probably a bunch of us six years ago, kind of when Covid first the lockdowns and stuff started, decided to channel a lot of my pent up energy into just going full beast mode on my health, basically analyzing everything like sleep, fitness, nutrition, body metrics, everything. And I started to maintain these super detailed spreadsheets. And these spreadsheets were basically like, I have all of the data collected on a daily basis going back six years. It's kind of stored in a combination of Excel, so like Google Sheets and Airtable. And I think everything that you said like, you know, I would collect data from three different sources, right. I would collect data from my aura ring. I also had an early Fitbit and obviously when Apple Watch came out and some of the data would be like a little bit different and I would basically normalize it. I would also collect a bunch of qualitative data about my own kind of like I would say experience. So when I was talking to Ben and Gray who were at spc, they were also essentially going through similar journeys. They've kind of been through a little bit of the ringer in terms of their first startup. And as we were talking about what we wanted out of essentially like a health app, a lot of what we were saying is that essentially number one, all of these health devices at this point were kind of like offering you like a dashboard of your data, but nothing was really tying it together. I mean, Apple Health is fine, right? Like it's not a bad product, but it's a little busy and it's kind of like very specific to that ecosystem. So our take was that how do we kind of create as step one, the best place to ingest all of your kind of health data? Because at this stage it's not just your rings, your watches, it's also your eight sleep mattress. It's also like, you know, everything basically is kind of like creating this health data, which is awesome. Right. It's beautiful because I think it's indicating that consumers care about this. So our take was step one, how do we get all of this into the, Into a one place that essentially is that a eight Sleep? There we go.

Amazing.

Yeah, that's a great product, right? Like eight sleep. But eight sleep gives you a nightly sleep score, as does your OURA ring. Maybe if you wear your watch. So, like, how do we make sense of all of these, this data into a clean, consistent place? Right? And it's. I mean, it was a simple proposition. It was one of those classic things. Let's just build what we want. And Ben and Gray are just world class kind of builders and designers, so they just built something that was beautiful, it was easy to use, and we put it out there and it's just been all kind of like crazy organic demand. You know, we're not divulging too many numbers, but, you know, we are definitely kind of the number of users and kind of paid subs. It's just kind of blown us away. We've kind of been on a tear for the last four, you know, last like six months.

Well, there's, there's this, I. There's this idea that once you get to a certain obsession level in health, the amount of money that you'll spend on an incremental 1%, you know, gain in your health is like, you know, you get to a point where you, you know, I did this like, nad treatment last year that in hindsight was like, I think a terrible use of funds. But it was like, it was like a series of, I think it was like six grand over, like multiple treatments. And I was like, I didn't feel anything at the end, but at the time I was like, yeah, if this is gonna make performance. Yeah, if I'm gonna feel like, you know, 5% more energized during the day, totally. It's totally worth it. But yeah, it's a great market. That's cool. I'm curious. Last thing. Cause I know we have a cutoff here and there's probably a founder you need to chat to chat with. What are you seeing today? At a high level, you guys have a unique insight into the sort of trends and categories that will be probably hot in a year. And you're probably making those investments now. You know, I'm sure a lot of the obvious stuff, you know, agents, mpc, that kind of thing. But what's, what's getting a lot of your experience?

Probably two areas that I would highlight, and maybe this is, I Think both of these are somewhat well understood. Now the first one is the amount of, I would say enthusiasm and excitement for stuff around robotics is very real. This is both kind of like building actual robotics, like hardware to kind of building robotics, kind of, I would say middleware, kind of think like end to end stage stacks for coding on robots. Then obviously robotics foundation models, it's hard to say whether it will all translate into usable products over the next three or four years, but over a ten year horizon I think that the energy is just substantial, much more so than I've ever seen in my career. And the second one I'd point out is that a lot of the times the conversation around foundation models has really centered around essentially take what we have and like throw more compute at it, throw more data at it. But it's surprising to me that a lot of people don't actually take a step back and realize there are lots of smart researchers out there who are building the next generation of algorithmic changes to these models. So there are lots of really interesting, both I would say variants, but also novel takes on. For instance, what would a pure RL based kind of like model look like? Right. If you had to ingest reinforcement learning from day one. So I'm seeing a lot of energy around building the next generation of foundation models. It's a little bit, I would say still hazy, but it's very exciting because I think that I still think we're at the tip of essentially the innovation we're going to see on top of these core LLM capabilities.

Yeah, it makes total sense.

I mean, assume we're at the end of history and all the future algorithmic progress.

It's so crazy, right? Like everybody assumes that like it's just going to pause and then we're going to scale it up and I'm just like, no, no, no. There's a ton of like energy around core innovation around the algorithm.

That's very interesting.

Makes a lot of sense. All right, well, I know we've already had some of your founders on, but let's make sure to get more on and thank you for coming on and telling the story. And congrats on the new fund.

Amazing. Thank you.

Thank you guys. Appreciate it.

Congrats.

Have a good one.

Should we rip through some timeline? Get out of here.

Let's do it.

Start a little bit late. We'll get.

It's timeline time hours.

It's timeline. Play some sound effects. I've been missing that sound effect.

It's so great. One, I mean last week that's not.

Even the main one. That's the different one. I want the Ashton Hall. No, not that one. The Ashton Hall.

The Ashton Hall.

You know the one I'm talking about? This is the one. This gets me so fired up. I love this one. Anyway, Morgan Housel, friend of the show put a random thread boy in the Truth Zone. Aaron Richards writes, In 2020, Morgan House published his best selling book the Psychology of money. It sold 4 million copies and changed the way we think about money. Now he's predicting the collapse of America. Here's everything you need to know. Beautiful photos from diary of a CEO. And Morgan Housel comes in and says, lowell, I am a 1000% not predicting the collapse of America. Double kill. Double kill. Community note. And the actual author of the book telling you that you're wrong. Yes, absolutely wild for Step it up on X. You're on notice the next slop thread you post better be factual.

What's Morgan Housel's late the Art of Spending Money is his next book. I'm so excited about it because it's very interesting.

Yeah, we gotta have him on more regular. That was such a fun conversation where we had him on.

Yeah, absolutely brilliant.

That'll be great.

Thank her.

Anyway, we want to take a second to tell you about Vanta Automate Compliance, Manage Risk and Prove Trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation. Whether you're pursuing your first framework or managing a complex program.

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We gotta get Waymo on Vanta. I'm sure that there's a lot of compliance with a business like that.

I'm sure they're already on Vanta. Probably. Yeah. Fact check that one.

Next post is from Jane Wong. She says this Waymo almost T boned a cyclist blowing through a red light at an intersection in San Francisco. Who's in the wrong here? Why isn't the robo taxi yielding to someone who always has the right of way anywhere and everywhere at all times? But. But what's interesting is that a lot of people were looking at this and being like, this is incredible performance by the way. Mo like it stopped and the biker kind of came out of nowhere. But Christian Kyle is putting his bet his dollars on the gambling table. I don't know what analogy I'm using here, but he says prediction in 2040 it will be illegal for humans to drive cars. What do you think 15 years ago.

Is gonna come illegal, though?

That's gonna be.

I think it will be frowned upon.

Yeah.

I mean, it is funny as it's.

Not illegal to ride horses.

Yeah, true. But it's frowned upon to. It's one of those things. Right, so. So it's technically, I think legal on most roadways to just ride a bike, Right?

Maybe.

Maybe not on a freeway, but it's frowned upon if you're in like, you know, 45. Like, if you're like expressing your right to cycle in like in the middle of a highway, one lane highway, and you're like riding in the middle.

Yeah, it's kind of.

I could see it being like that. I mean, I do think it will become at some point just so objectively clear that is dangerous for humans to drive that there could be plenty of pressure, at least in some. In some areas.

I think. I think think wayos very underrated horses. Also underrated. First off, let's go through the stats. One horsepower. Not bad. It's pretty good. And I was thinking about it. The most jacked horse, probably 2 horsepower.

Yeah, yeah. I was going to say. How do you rank? There was journalism was racing on Saturday against big horse weekend. Who were they racing against?

Sovereignty.

Sovereignty.

Sovereignty.

Sovereignty. Mogs journalism again. But. But yeah, I was thinking about. Does. Is. Is journalism really one horsepower? Is that the right way to think about it? Or is journalism also getting up into the three or three or four range totally possible?

Also, Henry Ford famously said if I asked people, they would have said a faster horse. What's wrong with a faster horse? If we've been spending the last if instead of the Ford motor company, it was the Ford horse performance enhancing drug company. We could have horses up in the 20 horsepower, 200 horsepower easily. Who knows, get them in the right cocktail gear.

This should be our investment strategy for the day that humans get banned from driving cars on roads. Go and buy all these legacy racetracks that haven't really been as, you know, you can go and do a track day all over America. It's popular in some circles. But I think if car. If humans were banned from driving, for.

Sure, they're gonna hit the track a lot.

They're gonna hit the track way more. Yeah, it's gonna become the new round of golf.

There's actually a some track in California that just got bought out by a new investment firm and they're gonna modernize it, build like a hotel on it and build like a paddock so you can Store your cars there, do all these different things. More of a.

Was it button Willow or.

I think it might be. That might be right. It was up for sale and it wasn't that expensive.

You know about, about Thermal Club in loosely.

But tell the audience.

I mean, I don't think it's been an amazing business.

Not yet. So it didn't work for them, but maybe it would work for us.

But. But yeah, no, it's basically, they built a track and then they built a lot of houses that are specifically designed for car enthusiasts.

So they have transparent drive in and out.

Yeah, they have transparent flooring so you can look down.

That's great. Yeah, yeah, I love it. Also, hackathon project. Self driving horse. Totally doable. Think about it. Horse. You just need to put in compass gps. You literally strap a phone to the horse and then in one tiny servo motor moves the reins to the left or the right. You can steer the horse and little, little motors goes kick and the course goes. All of the tough parts about like the horse. Yeah, yeah, yeah, yeah, yeah, yeah. The crochet, you could easily automate that. But the hardest part about, you know, Waymo is like the fine motor, like, oh, slight object detection. You want to scrape, you want to look out. A horse isn't just going to run into a bicyclist. Horse is going to see that and, you know, stop immediately.

Yeah, you can do a horse in the loop. You know, the sort of interim stage where it's not fully autonomous and the horse, the horse can take over.

You know, you basically have an end to end neural network running in the horizontal horse's brain already. It's probably like GPT3 level.

So you give it some credit. Could he. Could, could, could be frontier, could be frontier.

Horses were often on the front benchmarks. Horses have been on the frontier, they remain on the frontier.

Frontier models.

They're frontier models in the, in the horses.

I think we're getting some, getting some.

I really do think you could train your horse to just learn your commute and just say, hey, take me to work. I'm going to take phone calls.

I mean, people were doing, doing that for thousands of years.

It's so Lindy. Let's bring it back.

Let's bring it back.

I'm gonna daily a horse.

I'm gonna daily a horse.

One horsepower. Maybe one horse, one horsepower. Oh, it's so good. Anyway, what should we do, Sam? Less than data is oil. We should just have him on the show at some point, talk about it.

Yeah, let's let's have him on the show.

He's easy yapping too much on here. I want him to just read it to me.

Yeah, just come on and read it to me.

I want to read your post. I want you to read it too.

Well, you know what, Sam Lesson loves ads. Ads. He likes billboards.

He loves that. Billboards.

And to be honest, Lesson is going to love when people pivot from American dynamism back to ad optimization.

He's going to be excited about that.

Happen and he's going to be ready to fund. Fund them all.

Yes.

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Just do it.

Gary Tan had a funny early Paler story. He said they were doing some of their first sales meetings for Paler and team was all under 25 years old at the time. They were staying at the Mandarin Oriental. We said hey this is a startup. Why are we wasting money on this? Alex Karp said the people you're selling to will ask where you are staying and we aren't selling Motel 6 software. We are selling Mandarin Oreos.

That's a great line.

It's great. Apparently Joe Lonsdale said he was responsible for this.

A lot of people are going to take this the wrong way and go and stay at the Amman. But there's also, you know, probably other ways to accomplish this but we're selling.

Amangiri sports betting podcast, microtransaction riddled mobile app games, something like that. Mobile games.

I love this post from Solana. If we can't do trains we should at least do a big atomic autonomous pod network on a special guard railed 150 mile an hour lane with cars the size of gorgeous sleeper carriages which link up in giant chains with elegant bars and restaurants on long haul drives across the country.

This is so doable and so beautiful. I love it. I've been big on the tear down the speed limits. I firmly believe this is much easier than building new high speed rail is just take down the speed limit signs and just have an American auto on and then put it. It's incumbent on the individual to drive safely. Cars are getting way safer. They have autopilot now and lane keep assist. So if you're on a long drive and you can, you can get a car that goes 150 miles an hour for like 50 50k, right?

Yeah.

Like, plenty of cars have, like, they demonize. Yeah. Going super fast, get like an 05AMG and you're good and you're just cruising and it will actually cut the time, the travel time in half. You can drive twice as fast.

Teslas have to get better brakes though.

Yeah, they do. But I think anytime, I think beater AMJs are where it's at these days.

Anytime you see a car driving double the speed limit in traffic, it's always a Model 3. You're like, Bro, you know, the brakes.

Aren'T that good, but. But go into mammoth from LA and E63 like our S63, just bombing.

Can't beat it.

160, you get there twice as fast.

That's a drive and it doesn't require any retrofit. That's a drive that people have been known to get there. And you know, 60% of the time that Apple Maps says, I mean.

It takes a lot to build something new in America. A lot of permits, a lot of eminent domain, a lot of regulations, a lot of different consultants and legal battles, but just having a bounty for, hey, take down all the speed limit signs. It's now an autobahn. Pretty easy.

So good.

Pretty easy.

Here was the post you were referencing earlier. Wasteland Capital says it's still amazing that Buffett's crowning achievement was simply buying Apple in 2016 when Apple was already the largest company in the world by market cap.

Wow.

So true.

And just adding and holding onto it.

So good.

Amazing.

So Berkshire with Apple 174%. The S&P did 168%. But without Apple they would have been at 142 versus the S. P is 168. But again, people were saying, like, is it really fair to consider that? Because, you know, Apple's in the S and P, so the S and P would be lower as well. But anyway, still just like a good pick. You know, he didn't, he didn't. He wasn't too dogmatic about like, oh, I'm just a silver investor. Like, I'm just a. You know, I mean for a long.

Time he, he was not anti tech, but he just didn't fully understand it.

And then figured it out.

You're selling candy in hardware form. I like this.

I like it. Candy Crush device.

Candy Crush.

The seize candy of mobile devices.

Yeah, it's great. This is funny. This is a funny post for a few reasons. It is by unemployed capital Allocator and it's a screenshot. Unemployed Capital allocator says from a friend, a capable analyst, the chasm has been crossed.03 is significantly better than I at my job in almost every aspect. Brutal, but not surprised. So your job is to just analyze a thousand times more companies.

Yeah.

And then you'll be fine. Scale it up, scale it up.

Just do more queries than everyone else. Yeah, I guess. I don't know.

I mean this was interesting. I had this up earlier and it didn't get into the stack, but I'll pull it up now.

Is it really that much different than just being like, yeah, Google is, is like. I mean there were people that were cells in individual spreadsheets calculating all day long. Excel is, you know, significantly better than, you know, somebody whose job was just to crunch numbers all day long. And we move forward, we did more work, found more capital to allocate more things to analyze.

Yeah, yeah. It's funny being like, well is so much better at multiplication.

I kept trying to put this to the, to the AI people who would say like, yeah, there's going to be serious unemployment because of AI. Like, okay, let's actually quantize this. Let's say over under American unemployment by 20, 2030 is. You think it'll be over or under 10%. Like we've been at above 10% before. It's not that crazy.

China is that high, like 20%.

Yeah, but America's always been like routinely at like 3 and 4 and so the question of will we actually see unemployment? Still an open question in my opinion. Lots of people talking about, oh, I'm going to stop hiring. But we're not really seeing it in the data.

Yeah, China still has urban youth unemployment at 16.5%. Who knows how accurate that is? Pull this post up, Michael. I thought it was relevant to the last one. This is from the CEO of Fiverr. You have to imagine he knew this was going to leak. I think anytime a CEO sends a company wide email, that's dramatic. They're probably expecting it to leak. He says, hey team, I've always believed in radical candor and despise those who sugarcoat reality to avoid stating the unpleasant truth. The very basis for radical candor is care. You care enough about your friends and colleagues to tell them the truth because you want them to be able to understand it, grow and succeed. So here's the unpleasant truth. AI is coming for your job. Heck, it's coming for my job too. This is a wake up call. It does not matter if you are a programmer, designer, product manager, data scientist, lawyer, customer support rep Salesperson or a finance person. AI is coming for you. Didn't mention podcast. You must understand.

Are you talking about people that work at Fiverr?

No, he's talking corporate or the fi.

Your corporate Fiverrs.

No, he's talking to corporate. You must understand that what was once considered easy tasks. This is the part that's interesting. What was once considered easy tasks will no longer exist. What was considered hard tasks will be the new easy. And what was considered impossible tasks will be the new hard. If you do not become an exceptional talent at what you do, a master, you will face the need for career change in a matter of months. I'm not trying to scare you. I'm not talking about your job at Fiverr. I'm talking about your ability to stay in your profession, in the industry.

And everyone's been saying this. We've seen like three at this point. The part that's interesting is AI first organization.

The part that's interesting here is digging into easy tasks will no longer exist. So if you're a marketing manager and the CMO is like, hey, we should put up a blog post about this regulation that can now be done instantly.

Five minutes.

Yeah, instantly. It's not sort of a painful research and writing process, it's just sort of done for you. Hard tasks will be the new easy in that, hey, why don't you generate ads?

What should our strategy be?

And then impossible tasks, I think, are these more agentic, sort of of mild, you know, complex sort of milestone based tasks. But overall it's interesting. I'm going to pull up the Fiverr. Fiverr is one of those companies that people identify as a company in trouble just given that a lot of their work is lower skilled sort of services.

Oh, little illustration, little cartoon or little blog post and that type of stuff.

Record a sound bite, you know, record a size gong sound bite.

Size gong. Hilariously human in the loop for that one. I think that's Ben's voice, right?

Yeah, yeah, Ben is our Fiverr. That's, that's Ben. He's like, no, no, no, no.

It's not even a Fiverr job. It's not an AI job. It's not a Fiverr job. It's a full time employee job.

Yeah, I know, but Ben's like, Ben's like, AI, you're not taking my job. I'm making every sound bite.

We, we tried to use AI for it and his voice was way better still.

Ben's built different.

It built different.

Yeah. Advice I always give to founders. Be present. Building a Startup is very hard. Sometimes you just want to hide. But it's also an incredible ride. Working with and meeting great people, constant growth, endless creativity, and working with this new technology that is changing the universe. Life goes by so quickly. Don't run away from it. We only get to do this once.

Take pictures.

Take pictures. Look around.

Yeah. Once if we're lucky, twice if we're good. Interesting. Be present. I don't know what the. What is the opposite of that. Like, how are you? I guess sometimes you want. You just want to hide. What does that mean? Hiding from the organization, Hiding from the world while you're building something. I don't know. I think, I think it's one of those.

So this is what I'm not very.

Into, like meditation or anything.

That's just because you always on. You're always on. Somehow you don't. You don't follow any eastern sort of practices, and yet you're one of the most present people I know. So you're just built different. But I think this is one of those things. Founders go through these periods of excitement and euphoria and then pain. And that pain is usually like the classic is, you have an idea, you raise some money, you launch. It's euphoric. And then you realize, oh, yeah, you know, the reward for hard work is more hard work. And even if you're, you know, even if you're, you know, Jensen Wong, the job is only getting harder.

Speaking of which, she met Jensen, asked what brand his jacket is. Told me Ferragamo.

There we go. I'm not surprised.

But you know what's equally exciting? And what was the word? Euphoric.

Euphoric.

Buying a watch on Bezel.

Oh, I was gonna say we missed bezel.

Go to getbezel.com. buy a watch anyway.

Do it.

We can move on because we can also talk about numeral, which is also euphoric. Sales tax on autopilot.

Sales tax on autopilot. Many people.

I mean, it really will allow you to have more time to be present as a founder.

Yeah.

If you're. If you're getting sucked into sales tax compliance.

Yeah.

You're not gonna be present. Growing.

Yeah.

Experiencing your form.

If you're spending less than five minutes per month on sales tax compliance, I mean, that's.

That's plenty of time, hours back that.

You can be present and just in the moment.

Exactly.

Full Rick Rubin mode.

Just vibing. Vibing vibe. Entrepreneurship. What else is there? Some. Some deep analysis of Grok 3. Do you see this? It's like they're doing deep, deep, deeper searching. Grok 3 and one of the, one of the steps that it takes is searching posts by Elon Musk. The information I am looking for just seeing like hey, has Elon said anything about this? Let's throw that in the results. I mean he does post a lot. I mean whatever he's posting is probably relevant.

It's a good way to find every query in the model.

Yeah.

On your CEO's page.

Not even hiding it. Very silly. Anyway, what else should we talk about?

I thought this post from Kari was quoting. Dd, founder of Linear Didi says every single one of these companies was started by people from one part of the world. And it's Klarna Cursor Databricks, Zendesk, Spotify, linear public.com also.

Oh yeah, that's right. Scandinavia Unity. The Nordics built different. Very interesting.

And of course Linear.

You think it's the weather because it's a similar government as the southern states. You know, Italy and, and Spain and Greece. But once you're on the French Riviera, no time to grind. You're chilling.

Yeah, it's tough.

You're chilling. If you're in the Greek islands, you're not. Yeah, you're not putting in 20 hour days code.

That's the, that's why SF just stays on top. It's not because OpenAI trillion dollar company at times the fog makes it so hard to want to be outdoors that you just want to create shareholder value.

Yeah. People were predicting that because of global warming it would lead to the downfall of San Francisco because it would get warmer, balmier, more people would just be hanging out in Dolores park all day.

And Portland would become the new. Imagine if AI was being built in Portland. Portland primarily the AI safety people just.

Oh, are you talking about the artificial intelligence company of Portland.

Huge alpha there. Safest AGI on earth. This post praying for exits. Friend of the show.

We should meet him.

We should meet him. We should have him on the show. Sometimes actually, honestly, I feel like we can go out on enough of a limb and say it's possible. Praying for exits has been on the show.

It's entirely possible.

We've had so many guests, it'd still be very hard to nail down.

Entirely possible.

This email from Steve Jobs to Bruce Chishen, who is the CEO of Adobe at the time. Bruce, Adobe is recruiting from Apple. They have hired one person already and are calling lots more. I have a standing policy with our recruiters that we don't recruit from Adobe. It seems you have a different policy. One of us must change our policy. Let me know who. Steve. That's so good. So hard.

64,000 likes. Prank for exits. Let's get it.

Gigabanger.

Gigabanger.

No. So apparently there was a whole lawsuit surrounding this around how.

Yeah, it's illegal.

Psych. Anti competitive.

It's totally anti competitive. Yeah. You're not supposed to do that.

And yeah, it's good for employees. I guess if you can try to, if it's a free market and say, hey, you're making, you know, a million dollars at Apple. How would you like to make $2 million at Adobe?

And then it's a bidding process. Yeah.

But. Oh well, we have this policy with other. With other podcasts, so.

We do. Yeah. So sue us. Or don't. Alex Stapp has a story about Universal about this. I didn't understand understand this to break it down.

So Universal antivenom may grow out of man who let snakes Bite him 200 times.

I hate snakes. I'm Indiana.

You had a. You had a.

You had a. I truly hate snakes.

You had a snake interaction recently that we won't go into. Scientists identified antibodies that neutralize the poison in whole or in part from the bites of cobras, mambas and other deadly species.

He's 57. Over 18 years he injected himself with more than than 650 carefully calibrated escalating doses of venom. Okay, so he didn't actually let them wait. No. He also allowed the snakes, mostly one at a time, but sometimes two, as in video, to sink their sharp fangs into him 200 times. Wow. It's.

Yeah.

I built the tolerance. This is poison. Resist.

Yeah.

This is what. This is. What did you in this weekend?

Yeah.

Everyone. Yeah. You just too much of a thoroughbred. You're on the thoroughbred diet. If you're on the junkyard dog diet diet, nothing could I have poison resistance for everything. Microplastics unaffected.

It really. John's had this running joke on the show for those that haven't heard that like a single inorganic blueberry would cause you to be sick and throw up and all this stuff. And then over this weekend I got food poisoning and no one else did it. Yeah.

Except Sarah, who's also on the thoroughbred diet.

On the thoroughbred diet. So on. There's something.

There's something you need. You need to build your poison resistance.

Yeah.

Yesterday was so brutal and like we were eating like lovely food. But there's probably something there that you weren't used to.

Got me.

Ridiculous.

Gnarly.

This Bit of daredevilry. One name for it may now help solve a global dire health problem. More than 600 species of venomous snakes roam the earth, biting as many 2.7 million people, killing about 120,000 people and maiming 400,000 others. The numbers thought to be vast. Underestimates brutal.

Yeah, so anyways, this guy's blood. Scientists have discovered antibodies that are capable of neutralizing the venom of multiple snake species. So anyways, major sacrifice still kicking. And he says, I'm really proud that I can do something in life for humanity to make a difference for people that are 8,000 miles away that I'm never going to meet, never going to talk to you, never going to see problems. And I hope he's monetizing this. That's all he went, he really went through the ringer. But it sounds like he enjoyed it. Bit of a masochist.

Well, let's go on to Harvard. Their tax exempt status is to be revoked, says Trump. And Sheil, good friend of the show, says wild impact on our world. Hearing from multiple funds currently raising that universities have paused allocations, I had some ideas for how Harvard could get get back in the good graces of the Trump administration. Do you have any takes? I think step one is Harvard needs to prove that they're on the side of Trump. They need to add division one bodybuilding. Absolutely. You know they're known for. They have a football team, they have crew. Everyone knows. Oh, the, the, the, the, you know, Harvard crew team. The, the, what's it called? The. Something on the Charles. Head of the Charles. It's really fancy crew race. But if they get into bodybuilding, I think that would be a big step forward. They should also get into pro wrestling at the collegiate level.

Yeah.

Never seen NCAA pro wrestling, but you know, Trump has been in many Wrestlemanias and if you could go full scholarship to Harvard as a wrestler, junior wrestling. Not, not the typical wrestling but the pro wrestling specific quickly, I think that'd be, I think that'd be a big step up.

Yeah.

Anything else that they could do? I think if they go for profit, it might actually wind up. Maybe they don't allocate. Maybe they become build a high frequency trading option like start prop. Trading their own endowment. Why are they outsourcing?

Sure, they're pretty close to that already.

They should just start leading series A's. Yeah, just directly. Just go direct, right?

Yeah, yeah, yeah. I mean this is interesting one. Bucky shared something recently about how one of the dynamics here is in many ways this will negatively impact net new funds or funds that are getting off the ground because Harvard would have already committed for the major platforms the funds they're in it with for the long haul they're making commitments multiple funds out. And so this is primarily I doubt there's reneging on existing commercials. Don't worry, Lightspeed A16Z general catalyst will be okay. You don't have to worry. We're going to make it through this.

Mark Gurman had some news. Apple is teaming up with Anthropic on a new AI powered Vibe coding platform and is rolling it out internally to employees. It could come to third party developers in the future. Details and what this means Interesting. Makes a ton of sense. I don't know who how familiar you are with iOS development but most of it happens within Xcode which is not as it's not open source or it's not forkable like VS code. And so you can't really I think most iOS developers, if they're really serious, they have to use Xcode or they get good at Xcode. And so to just not have a cursor competitor or a Vibe coding option in that software is like really antiquated. It's always been a hard, harder, harder IDE to use but it makes a ton of sense that they would team up with someone for this Anthropic probably a good pick. So we'll see.

Oh, it makes a lot of sense.

And there was other news. Claude is known as one of the best when it comes to programming. Daria1 says Nick, Apple is partnering with Anthropic. Very interesting. I wonder what the structure of that deal will be because most of like you don't think of Xcode as having like a consumption based pricing. It's something that just comes pre installed with a Mac look.

Apple's golden goose. The App Store is getting cooked right now and I would not, you know, I can imagine that Apple will find a make and Anthropic will find a way to make plenty of money.

I mean in the similar vibe coding world. The CEO of Windsurf went on the Y Combinator podcast.

If you think about it though, like I'm sure that I don't believe that Apple Anthropic vibe coding, you know, X co code platform can make up for that. What may end up being a massive drop in App Store revenue but it is pretty funny to think about. It's like okay, hey developers, you're not going to give us our 30% cut?

Oh, we're going to handicap.

We're going to charge you. You can use regular Xcode, but if you want to use AI to code.

It'S going to cost $100,000 a month. Well, windsurf CEO went on the spot. Spotted in two polos. Sam enjoyed the fashion. I thought that was a fun little Easter egg in his podcast.

I mean, I don't know, I don't know any, any details, but I have to imagine that's the kind of move you make when you're very close to closing or I think so, or a done deal that doesn't, it doesn't seem like a YOLO move. You know, if the deal were to not go through, I don't think the Double Polo is gonna save it.

Right.

We're talking about billions.

Although he was very muted. I don't know if we should read into the shades and hues of the Double Polo choice, but it was nowhere near as as vibrant as Sam Altman's original Double Polo.

Maybe, maybe it's more like a Jobs not finished Double Polo.

He's like, I'm open to the really bright colorways, but we're gonna have to.

Plug in the ARR first. Yeah.

We have some personnel news. Will Brown, he came on the show, what last week, the week before, told us that everything was great at Morgan Stanley. Then he completely rug pulled them and dipped immediately.

No, Will, it. Will had actually known he was gonna take off for a while and we got to have him back on when he joins the new company, which should be. He's been just teasing it out. I don't think he's announced it yet.

It's time for a new adventure. The ML research team there has been a wonderful home for the past two years. I've learned more than I ever could have imagined about LLMs, markets, responsibility and how things work in the real world. I mean he's a very, very interesting poster and always brought a very interesting unique perspective because he wasn't fully aligned with one of the labs and kind of had more 30,000 foot view at Morgan Stanley. And I really enjoyed his takes and excited to continue following him on his career.

Total narrative violation. That finance guy wasn't extremely conflicted, but it was fun while it lasted, basically.

Yeah. Anyway, I think that's a good place to end. Thank you for watching. This is a great show. We really enjoyed it.

Wait, I got one last post because I'm going to throw it in here. Michael, if you can pull it up. I think it's pretty funny. What it is. This post VCs trying to figure out Who? Arthur Rob.

Oh, they are trying to figure out who he is. I invited him on the show anonymously, thought he might do it. We're not sure exactly when he will be able to but I'd love to get him on the show anonymously. I would not dox him.

I respect his anonymous. So from my friend Anish. Yeah. The funny thing here is he kind of miss. So Arthur Rock sort of like misreported. Oh he did, did Replit's revenue.

Okay.

He's called them at 40 million of ARR. Raising it 2 and a half to 3 billion which felt expensive. But then he had to show a follow up graph showing that they added roughly 30 million ARR in a month.

Oh, okay. Okay. That's pretty good.

So he had. He basically.

Yeah. I mean that's the problem with those leaks is that a lot of times they're super out of date because you're getting docs that like oh yeah, I, they did send me a deck last year. I passed it to somebody, then that they passed it to somebody and then pretty soon it's like eight, ten months later when, when that leak is happening. And founders always get frustrated with that because they don't want to share any financials, let alone old financials. And so usually some horse trading, but yeah. So what, what, what is this image Citizens. I, I don't get the reference. Do you?

I don't get the reference either. But you should because you're, you're a big movie guy.

Yeah, but not this time. I don't know.

Yeah, but it, it is interesting. I've DMed with, with Mr. Arfur and I, we, we also talked him about him coming on the show. It's just so hard because there's so much incentive for people to try to triangulate who he actually is and eventually some schizo is going to do it. But for now it's, it's very fun.

Maybe there should be a polymarket for it who is are for rock.

Yes.

You can list out a couple top candidates. Yes, that'd be fun. Yes, I had a fun polymarket.

It's interesting.

I'm tracking the trade war and it's at a 19% chance that there's a US China trade deal before June. And I said I honestly believe I could hammer out a trade deal in a weekend if I was in charge. What do you think, Jordy? I pull it together.

You're good at finding win wins. Exactly. And that's kind of really what it takes.

Step one, Xi Jinping. Let's get a lift in.

Let's get a lift.

See you at six.

See you at six. Let's do it.

Bring some.

That's really the chance, the right strategy. The other one. That's interesting.

What else are you tracking?

I don't know. When did this screenshot? Ever since the Double Polo, the chance of will OpenAI acquire windsurf before August has just been steadily going up. So the market.

Oh, okay. The market is reacting very positively to the Double Polo. It does feel like if the deal was falling apart, you would be like, I'm not in a real joking mood. Right. So I feel like the read on the Double Polo is probably positive, 68%. But again, August, like the question that, like the date is so important there because that could slip because a lot of people, you know, a lot of the OpenAI employees are very, are very wealthy now. And so they're probably getting ready to go on summer vacation. Probably usually starts like mid May and they don't come back until what, like August, September, October, sometimes a lot of venture capitalists will be out for four or five months. It's actually going to be a big challenge for us at TBPN because most of our best yappers are going to be at the Amalfi coast for 5, 6.

We might have to set up, you know, a remote studio in the south of France.

Yeah. Just to make sure that we have some coverage there.

A dedicated helicopter to sort of take people between the boats to or. Or potentially a water based studio.

Water based studio would be good.

A boat would be. Would be very helpful. Well, anyway, it is fantastic to be back in the studio.

It's great, John.

And we gotta get out of here. It's a big week for technology.

It will be. Anyway, thanks for watching.

Cheers.

We'll talk to you soon. Bye.