Jason Calacanis & Adeo Ressi on AI and the Future of Startups

Ah, and I've known Adeo. I have so many good Adeo stories that I can't tell you.

Thankfully.

We've watched many a sunrise.

That is true. And Jason—

In Manhattan, on the playa. On the Pacific Ocean, in Mexico. Many, many sunrises together. Mexico, which I can't say for that many people. Like, if you see the sunrise with somebody, you know you have a unique and special relationship. I love you, bro.

I love you too.

30 great years together.

I think I introduced you to Elon, and you guys have become great friends.

You know, it's very strange when one of your friends becomes the most well-known person on the planet, or top 5. That is very weird. Not as weird for us as it is for them. But you were his roommate. And yes, you did introduce me to him. And we both lived in LA at the time. And there were no tech people in LA. So when we met, where we kind of reconnected. He's like, "You live in LA?" I'm like, "Yeah, I live in LA." He's like, "I live in LA." I said, "Where in LA do you live?" He's like, "I live over here in Bel Air." And I said, "Oh, I live right next to you in Brentwood." He's like, "You want to go to dinner?" And I was like, "Totally. I have another friend in LA." He's like, "You have another friend in LA?" I'm like, "Yeah, his name is Sam Harris." He's like, "Oh, I like Sam Harris. I've read his books." And we used to go to dinner at an Italian place. And, you know, as you said, I've been doing the same thing for many years, but I always liked to hang out with people who were really smart and driven. And because I just like that energy. And I— Sam was, you know, very brave talking about atheism and radical religions in the world. And Elon and I were both sort of interested in atheism, meditation, all this kind of stuff. And so we would be there sitting here asking a bunch of questions and he'd be like, hey, can I ask you guys a question? I'm like, yeah. "Sam, I want to talk to you about this artificial intelligence and consciousness thing." And so literally, I would sit there with Elon Musk and Sam Harris, and we'd be talking, and then I'd say, "You know, Elon, you should get back on Twitter." And then Sam would say, "What is the podcast you're doing?" And I said, "You should have a podcast." And so one of the fun things in my life is I always like to encourage my friends and support them. And somebody said at a dinner party recently, you're not necessarily my best friend, but you're the best friend I've ever had. And I said, well, that's incredibly sweet. And the other person said, you know, I kind of get what he's saying. Whenever I've asked you to help me with something, you've gone 10 times that. And then when When you haven't had to, you've gone out and defended me and been a friend. And we're all the product of our childhoods in many ways. And in Brooklyn where I grew up, Bay Ridge, the last train stop, the way to survive was to have a crew. And it was kind of the '70s and '80s in New York, you can look it up, was—

Were rough. They were rough.

It was a little, yeah, I mean, it was a little different. And we were the last generation. Different, rough.

Let me help you.

Gen X was the last free— any Gen Xers in the room? Yeah. It's so— just don't fuck with those guys because they were the last free-range generation. Like, literally, that group of people were— we were told, we were thrown out of our houses in the morning in the summer or on the weekends, and they said, "Come back when the streetlights are off," because we didn't have phones or watches, you know, or access to a clock. We were feral. So imagine taking, on our block there was at least 12, 14 kids. All the moms and dads would kick you out of the house at 8:00 AM after breakfast. And then the sun went down at like 7:30, 8:00 in the summer. So we got to come home 14 hours later. And they would give you, my dad would give me $20, which for 3 boys was a lot of money, but he had a bar and he had cash. And businesses, I'll leave it at that. And you give a 10, 11, 12, 11, 12, 13, 13, 14, 15-year-old boys $20 and the New York City subway system, I mean, we literally would go to the fucking Bronx or we would go to Coney Island. We would do crazy, we'd go on the Staten Island Ferry. We'd come home, our parents didn't even ask us what we did. They didn't give a fuck. Did you have a good day? Yep. Great. Eat your food and go to bed. Yes, Mom. Can we go? Can we sit on the stoop after? I say all this to say it's just meaningful to be here with you and to develop friendships. So don't forget along the way as you pursue all these incredible goals that one of the great goals you can have in life is to build meaningful relationships with great people. And it is not a transactional thing. It is like a foundational thing.

Can I tell a story of what happened outside? So a mutual friend of ours came up.

Yes, you can.

She's like, hey, I have an idea and I'm thinking of doing it. I'll spare it. I won't go into it. And so Jason takes out a credit card, gives it to her. It's like You have $25,000.

So it's my new way of investing. If you have an idea, I give you the credit card. It's got $25,000 limit on it. And then you give me 2.5% of the company. It doesn't matter if it's incorporated. It could be just an idea. And I have 10 more cards with me. So we're actually at 9.

So I was like, that's pretty awesome, right?

It's a new strategy for investing.

So I wish everyone here had friends like that. So There's so many— wow, there's— let me start with saying, so you moved to Texas. I wish we spent more time together. We spent time together.

Moved to Austin.

Okay, and but so, okay, I'd love to move to Austin, by the way. So that's why the first thing I wanted to ask you, how's it been?

I've loved this town since 1999 when I first came here. They were doing this little festival, South by Southwest, at the Driscoll Hotel, and they wanted to do an interactive. That's how like old it was. They had just started film. They had been doing music for a little while, and we came, and the number of people in the interactive festival was like that row of seats. Like, literally, they had 50 of us there, and I was like, this town is awesome. Like, it's a great combination. But I fell in love with a beautiful woman, my now wife and the mother of my 3 beautiful daughters, in California. So I did a little 30 years in New York, 20 years in California, but I always thought about this town. And how much I loved it. And you know, California, in the 20 years I lived there, got worse every year. Noticeably worse. But the worst part about it was the contempt for success and entrepreneurs and the self-loathing. That was the most disheartening because California was supposed to be the place you went, you know, go west, young man, you know, like go find the future, go build the future. And it's where trends started. You know, you'd start the trend in California California, and then you like the hippies in Boulder would do it, then it might hit Austin a little bit, and eventually like the squares and uptight people on the East Coast would do it, and then yoga would make it to Europe.

Maybe.

Maybe. And they'd be like, "Soy milk," and like milks that aren't milks that are made out of nuts, and then it went to Boulder. And sometimes it boomerangs to Hawaii and hits Kauai and comes back, but I say that to say innovation, it was like one of these places that was open to innovation. Not only open to innovation. When I moved to LA, people were too open to things. Like, I would be at a dinner party, they'd be like, "Hey, yeah, what are you working on?" This person would be like, "Oh yeah, you know, I sell crack to children outside of like Trader Joe's." They'd be like, "Oh, rock on, dude, good for you." I'm like, they're not even listening. They're not even listening. Like in New York, within 10 seconds of meeting somebody, "What do you do?" "Okay, you make a lot of money doing that?" How much? Okay, how long you been doing it for? I do something similar, is there a way for us to do business? It was like, you know, so when I came to LA, you know, I'm like on a ski trip with a couple of couples, and this like hippie-dippy guy's like, you know, this is like 2003, and you know, we're at après-ski, or actually we're at lunch in between skiing, everybody's having a great time, and I'm having a hard time fitting in in California because, well, I'm a New Yorker, A bit outspoken. I kind of find this place more comfortable. Austin is pretty great in that regard. It's just the right amount of like, you know, kick-ass and tolerant, but also like a little bit of edge. Anyway, this dipshit says to me, or like in front of 10 people, "Well, you know, that's because the Jews blew up the World Trade Center." And I said, "Excuse me? One more time?" He said, "Yeah, the Jews." They blew up the World Trade Center. I said, where did you get that piece of information? He's like, well, everybody knows it. I said, hey, dipshit, that's the stupidest, most offensive thing I've heard in years. Why the fuck would you say something so stupid and offensive and not even have the courtesy of a citation or an argument? This is in front of 9 people. I don't— well, I know my wife, so it's 8 people. My wife goes— She kind of grabs my leg. And the guy's like, "Well, I mean, I'm just— It's like, well—" And I'm like, "It's like what?" I said, "Are you a fucking—" And then I said the word that you can't say anymore, but maybe it's coming back. I heard a lot of people saying it in Austin. I'm not saying it here, but I said it on Twitter once. In the last 30 days, and I didn't get canceled. So things are changing in some weird way. I probably should not have said the word. You know, it's— But I used to say the word in every other sentence.

I think we used to say a lot of things that we can't say anymore. Let's just—

Well, I said it to you a lot.

Some of it's good, some of it's bad.

In fact, I said it to you a lot in those mornings when the sun was coming up, and I was like, you know, you're such an—

He says a lot of words. By the way, I'm usually the butt of all of Jason's jokes, so I'm very—

It's kind of a group thing. Where we play poker and people just sit there and they're like, how many ways is J. Cal gonna torture Adeo tonight in poker? Many, many ways. Many ways. And we just laugh.

But so coming back to Texas, it's fucking great here.

It's great here. It's the same feeling I had in Manhattan in the '90s where people felt anything's possible. Young people can do anything. Young people are going to define the future. In the '90s, it was literally at the same time, the internet, hip-hop, fashion, documentary films, publishing magazines, zines, it all hit at the same time in the '90s in New York. You were there building websites for people for $3 million a fucking website. I kid you not. This lunatic was charging people 7 figures to build websites. That look 5% as nice as a Squarespace site, which you can get for $29. Things have come a long way. Use the promo code TWIST on checkout to get 10% off. Shout out to my friends at Squarespace. You didn't know I was dropping ads in the middle of this, but I mean, literally, I mean, think about how far things have come. But people here feel like that. And when I went to San Francisco and I lived in California in the 2000s, when Reddit, Digg, Facebook, Tesla, Uber, all these— Robinhood, all these great companies were being formed in Web 2.0 and moving on, there was also that sense like young people, people with ideas can change the world. And then both of those towns became very cynical and very much like Europe, no offense to Europeans here, but where, you know, if you're in France and there's an entrepreneur at the table, you know, you're at a dinner party and they're like, "Oh, what do you do?" "I'm an entrepreneur." You're running a scam on somebody. Who are you fucking out of their money? You're an entrepreneur? Oh, I see. What do you want to sell me something in, you know, Saint-Germain?

We're going to change that, though. We're going to turn it—

okay. No, but it is changing. It is changing. There are entrepreneurial communities, you know, and I'm making fun of France, but they do get some things right.

Like, no, France is pretty anti-entrepreneurial, even though the word entrepreneurial is French. They're banning VC funds. It's French for criminal. Yeah, it's kind of crazy. So let's talk about what's hot. I wanted to go to the ranch, because you didn't just move to Texas. You didn't just move to Austin. You moved to a ranch.

I'm in the Hill Country. I got a ranch. It's a gentleman's ranch. Let's not overstate it, folks. It's 33 acres. But I'm buying 7 more and getting a mule.

There's a lot to say about this, but I want to— So how has that been? It's the fucking greatest.

I've always been fascinated by distance and towns, and like, if you— anybody here from New York or Brooklyn, raise your hand if you ever lived in New York. So imagine like you could buy Prospect Park, like all 30 or 40 acres of Prospect Park, and you live there, and then you worked or went to dinner, I don't know, in Madison Square Park, 20 to 40 minutes away depending on traffic or if you took the subway. That's Austin right now. I got here in the worst traffic I think I've ever been in in 40 minutes. And I usually get to this exact location in 27 minutes from a horse ranch. It's bizarre. There is so much land here. When they say everything's bigger in Texas, correct. Yes, it's not an exaggeration, it's just a description.

How are you adapting though? Because you've kind of downstepped from the city LA, to suburbs, to our ranch.

Yeah, I mean, listen, when I opened DoorDash when I lived in Hillsborough, you know, which is a very tiny little town next to San Mateo, you know, when I pull up my Uber Eats or my DoorDash and I type in ramen, I would pick from, I kid you not, 40 places serving ramen, and 4 of them would, you know, arguably be some of the top 100 in the United States. Yeah. And in fact, Taishoken is the number one ramen, I think, in the United States. They're like Michelin star kind of level. And they would be at my house in under an hour with Michelin star ramen. Now I open my Uber Eats and DoorDash and I see Carl's fucking Jr. and, you know, Taco Bell and McDonald's and 7-Eleven. And I'm like, oh shit, I'm fucked. And so there's that. So But it turns out hiring somebody to cook for you is cheaper here. Oh, having a chef here is cheaper than ordering DoorDash when I live there, or it's probably a push. Yeah, roughly, roughly equal. So you have somebody cooking for the family a couple of days a week and that works out just basically the same. But there are tradeoffs. There are tradeoffs. But I'm in my J Ranch era right now, you know, like I really am inspired by Taylor Swift, obviously, style icon, and she's had her eras. So now I'm looking at what remaining years I have left. I'm just going to block them into 5-year eras.

Yeah, that's a suggestion for the next era.

I know the last era is going to be like Mars, so I have like 4 or 5 hours.

Are you going to go to—

you want to go to Mars? Fuck yeah. Last trip, one-way ticket. Let's go. Do you want to go together? I know a guy. I know you can rank on—

you got 6 months of ranking. On me on the trip.

And then literally, you just made me push it up. Maybe we could go next year. I, I, I mean, if I can torture you for 6 months straight—

I'm curious, who here would go to Mars? Raise your hand.

One-way ticket. This is age-dependent. If you're like a 30-year-old, don't go to Mars. You'll die from radiation quickly.

So I survey and I get 30%, sometimes 50%. Here it's like 5%, maybe. Okay, you guys are firmly grounded on this planet. All right, I want to talk— I want to move away from taxes this up, talk a little bit about AI, because now this is— I know, and it's super relevant for startups here. I know you put a lot of thought into this, you have a lot of opinions on it, so let's dive right in. Okay.

Um, I have never seen anything like this. It's almost like every single technological wave being put together into a super rogue wave. So, I got to experience the PC revolution in the '80s, the online revolution, and then the internet revolution, which is kind of the same thing, into the '90s, the mobile revolution, the broadband revolution, and the sensor revolution. I mean, these things have all culminated in this. It's all been the epilogue to the story. With AI being the story. And it's happening at a pace that is so fast that it's even shocking to me. And I do it for a living. And we have 20,000 people apply for funding from our 21-person venture capital firm where we do year zero investing and then pre-seed investing. Basically, if you think about Y Combinator or you know, Founder Institute, Techstars. We're kind of even trying to go a year before that, like literally year zero.

And great source of funding, by the way, Jay. If you can get Jason's Launch Fund involved in your company, it'd be a great thing.

We invest in 100 companies a year on average, and the number of applicants on average the last couple years, but the application pool went from 4,000 applications maybe 5 years ago to 20,000 now. So This Week in Startups, my original podcast, which I do 3 days a week, Monday, Wednesday, Friday, 12 o'clock Texas time, that podcast, you know, got it to an unbelievable number of applications. And then I started a second podcast with my friend Chamath called All In, and it went boom. You know, it kind of like tripled the number of applications. And so we invest in 1 in 200, I guess, that apply statistically. We will give people a $25K investment and $125K investment. The $25K sounds crazy. But that was kind of the original OG angel investor check size back in the day. People would raise that $4 or $5 million when they had an MVP. They would raise friends and family at $1 million. They'd probably raise $100K, then they would raise $500K, $5 million, and then they would go on to a Series A or seed round. So in our programs, we will offer people, you know, during the program, do you want a $25K check or $125K check on the standard Y Combinator Techstars terms. And maybe 70% of people every week ask for it, one or the other. And we're pretty frisky in terms of making those bets. I have a whole system now for sorting through those 20,000.

It's insane. I've met people who are on your team. They're fantastic. They're very meticulous. It's pretty awesome. Yeah.

So we have these 17 quality— these 13 qualities we look for. It's under a very fancy rubric why we should invest. Then we created a second filter why we— anybody want to guess? Shouldn't invest. Shouldn't invest. Wow, you guys, uh, it's corporate espionage here. Um, there's about 30, 40 reasons on why we shouldn't invest. Pink flags to red flags, like minor things, major things. Could be like a patent lawsuit. That's a pretty big one, you know, but a legal letter from a former employee who felt they were, you know, fired without cause, like that would be like minor, right? Cap table problems, you know, where they've given away half the cap table, that's a blocker, that's going to be a red flag. Maybe they gave a founder 10% and fully vested them and the person never showed up for work. That would be a pink flag. We can fix that. Like we have, strategies.

But have you ever made any of that stuff more public?

I've talked about a little bit. It's probably going to be my next book, will be this framework I built. And I like to, you know, I wrote a book called Angel where I just shared all my secrets for angel investing. Great book, by the way. 13 languages.

And if you're thinking of being an angel investor, you should read the book. One of the things that Jason talks about that I think is fantastic is actually how to treat founders with respect in the process. And because you do that, you get more deal flow even when you say no. And a lot of angels don't do that. And I think you really pioneered that.

Yeah. What I told everybody was like, every time you say no, that is your reputation. When you say yes to a person, they're like, hey, how's Jason as an investor? Amazing. He said yes. What's great? He gave me money. Okay, like, it's— you don't— first principles thinking. Like, what does an investor do? They give you money. Like, okay, did they give you money? Okay, they're a great investor. Did they not give you money? Okay, you're starting from— this is the worst restaurant I've ever been to. Zero stars. Yeah, right. Like, if I went to a restaurant and they didn't give me food, I'd be like, well, fuck this place. Zero stars. So you're starting at zero. And so I literally trained people like Maddie, and I think your name's Corinne? Is it Corinne? She's worked for me about 8 weeks. I kind of learned the first name in month 5, and then I think I'll know Maddie's last name at the— when you hit your year, which will be August or September. So that's my joke, but it's actually true. I don't even want to know your first name until month 4 or 5. And, you know, like, last name, maybe year 2. So wait, wait, let's go back.

Let's finish the angel thing and then go back to AI for a minute.

So what I do is when I train somebody like Matty or Corinne and they have to do 500 meetings with founders, 20-minute meetings on right coverage, they have to do about 5 a day would be an average. What do you guys do, 5 a day when you're— Yeah. What's the most? 25 a week. 25 a week. What's the most you've ever done in a week? 36. Great. Get those numbers up. Those are rookie numbers.

Now, for you and investors here, by the way, I want you to internalize that as well.

Well, when I tried to hire people from the venture community and I told them my expectation was 5 meetings a day, they're like, yeah, no, I totally, I do 5, 10 meetings a week. I'm like, a day. They're like, a day. I'm like, and 47 weeks a year. And they're like, 47 weeks a year? I got— I'm at Burning Man for like the week before, and then I do the cleanup the week after, and obviously I do the week, and that's 3 weeks alone right there. And I'm like, yeah, it's not right for my firm. And so what I decided to do is I just decided to hire, you know, people out of school typically with 0 to 1 year of experience, and then put them in a training program. And the training program is do 25 meetings a week. Let's talk. We're when you hit 400 or 500 meetings. You do 500 meetings, your brain is going to have melted and be reformed in my formulation. I'm going to melt your fucking brain. Literally my goal. And literally I'm trying to break people. It's like working at Noma, like the, the restaurant.

Well, they learn what's good and bad pretty fast.

They'll be smarter than a partner at most venture firms after I get 1 year with them and 1,000 meetings because I make them record it, put the recording in the database, the transcript in the database, the summary, and then qualify everything and then debate it. Your brain will be fucking fried. And you know where I came up with the system? That's how I became the best angel investor in the world. It's my system. That's how I challenge myself. I said, if I do this 5, 10 times a day, I'll get good at it. I had days where I was doing, literally, I'd have 2 people setting up dueling conference rooms. And I'd say, I'm gonna be in this conference room for 40 minutes, set the next startup there for 30 minutes, have their deck ready to go. And I said, I'm gonna be in the office for 12 hours, I'm gonna eat my breakfast, lunch in the room with them. And so 12 hours, I can do 24 companies in a fucking day, and I did it. And the people who work for me were like, I can't do this, this is too hard, my brain is melting. I'm like, yeah, let's, you're right, let's do it. 10. No, I was like, yeah, let's like skip the last 2 hours and let's just do 10 hours of it, basically, yeah. It's pretty funny. So back to the AI question, what we've seen is—

Whoa, whoa, whoa, so let me, before you, I wanna just throw something out here. So working with Jason, one of his team members who is, leaving Applied and say, hey, is it cool if I can hire Cecilia? Oh, she's great. And I mean, amazing. Like, this woman's amazing. You're welcome. Like, really amazing. Thank you, by the way. I'm so impressed. The alumni. You're going to be, you know, you're going to learn a lot.

Just think someday you'll work for me. You'll work for Adeo.

Look what's here. I'm not going to drive you into the ground, but you know.

No, I mean, I just, I'm teasing. Here's what I think. You're going to learn— I think the overwhelming majority of people are capable of being elite. I actually believe that. I believe people of average, below average intelligence can be elite. And it doesn't matter where you're from or what your parents did. It matters your motivation, your discipline, Your hustle. I have seen hustle beat the Ivy League every fucking day for 30 years. Every day hustle beats them. And that's not to pick on anybody who went to the Ivy League. It's just that like—

Well, you can hustle from the Ivy League too. Of course. But if you don't hustle, you're fucked.

You're roadkill. You are roadkill.

I see some children over there. Hi, ignore the words we're saying.

Repeat after me. Hustle. Fuck this shit.

So I have a rule with my daughters.

When I'm driving alone with you, if you hear any curse word, you can say it 50 times in the car in a row. Go. They get to like the 7th time and they're like, this is stupid, Dad. I'm like, exactly. Yeah, so use it for emphasis.

Hustle. Hustle is super important. It is. Because like I can tell you, and this is before Before we go to AI, which is going to be a lot of good advice for you guys, one of the things we do at the Founder Institute, one of the things that Jason does with his team and in his accelerator, hustle, right? We try and make you hustle, but the amount of hustle you do, and like, just to use a mutual friend of ours, like Elon, as an example, that dude works harder than anyone.

That's a level of sacrifice I might not suggest. Yeah, no, I mean, he might be like maybe 20% more like maybe enjoy your life 10% more. Yeah.

You know, I gave him that advice once. I was like, dude, you are burning out. And it was in his kitchen. His son was there and he was on the phone negotiating a parachute contract for one of the Rockets. I'm like, Just take 10% for yourself. And he's like, oh, that's interesting. He's like, no, shut the fuck up. And he left.

Back to work. Well, yeah, I mean, so back to AI. I think it's like, um, really interesting to watch the people who are embracing it fully versus the people who are dabbling versus the people who are clueless.

Um, I found a way. 3 buckets. That's important.

Like, put it in 3 buckets. Like, how many people use AI 20 times or more a day? Raise your hand. You can be honest. Okay. How many people use it between 1 and 20 times a day? Okay. That's like another— that's a third. How many people use it a couple of times a week right now? It's okay to be honest. Okay, great. You guys are fucked.

Yeah, sadly. You guys are roadkill.

I roadkill, literally. It's kind of like you're— if you're using it under 20 times a day, you've got a bicycle or a horse and you're up against people who have supersonic airplanes. Like, that's the difference in terms of distance traveled. Um, and when I look at companies that are applying AI to run their company, not running an AI company, but running your company on AI. Everybody understands the difference? Great. You're running your company on AI, you will never have to hire another person again. Let me just state that. I have a 21-person company. Right now we're operating like a 50-person company. We have not changed the number of people in the company in like 3 or 4 years, maybe 3 years. And I do not see us ever hiring another person because people in my company are getting every month between 5 and 25% more effective at their job. And we have, you know, a mantra: systems over goals. Systems, processes over goals and KPIs, whatever. Um, and what that means is every time we talk about a problem, we do zero-based budgeting. We're in the doing a yearly zero-based budgeting. So do you want to explain what that is quickly? So zero-based budgeting is saying, hey, well, this isn't— what are you trying to accomplish?

Hold on a sec, I just want everyone put your phones down. I see you with the phone there. Put your phones down. This is—

I will take a selfie with you later.

You don't have to.

You got the selfie, don't worry about it.

You don't have to do this, okay? But it's important for you to understand as an investor and an entrepreneur.

So it's very simple. You get a blank piece of paper, paper. And if you tell somebody, okay, we want to do the Founder Institute, we want to graduate, you know, 500 people a year, and we want to invest in the top 100. They're like, okay, yeah, I'll build a budget for you. Fuck it. Yeah, we need— we're gonna have 500 people, it's gonna be 3 cities, be 150 companies or so in each city. So I need one city head for each, they need an assistant. And then we're gonna need a global marketing person, we're gonna need Oh yeah, we're going to buy everybody lunch. We're going to do 4 events a year. That's it. That's making a budget. That's not zero-based budgeting. Zero-based budgeting is saying, okay, you want to invest in 100 companies. That's the output. What's the best way to invest in 100 year-zero startups? And it might be running one cohort a year, open to everybody in the world, in person and virtually, and just saying, we're going to spend 3 months marketing it. 3 months running it, we're going to have 5,000 people go to it, we're going to have 2,000 people graduate, we're going to invest in the top 100, is the best way to do it because we looked at what does it take. Well, you need to invest in 1 in 100 companies or 1 in 200 companies to have a high-quality company. The denominator is the most important factor, not the numerator, the denominator. How many companies did you say no to versus how many did you say yes to? That ratio, I'm trying to get to go up so that The bar for funding goes up, and I've done that every year a little bit every time. So, how do we get the output we're looking for? Okay, what's the least amount of work we can do? Well, when we built the system, we realized— I had written in my book about a 3-hour rule. Before COVID the idea of doing a Zoom call— well, Zoom didn't really exist, it was a Skype call. The idea of, like, meeting with a founder over Skype was considered, like, No one did it. Nobody did it. It was considered insulting to both parties, ridiculous. So, you spent an hour prepping, you took an hour meeting, you might spend an hour with the founder afterwards having coffee, take them to lunch because they flew to Sand Hill Road, and then you would do an hour of deliberation and work. So, it's about a 5-hour process. 5 hours. And sometimes you would get in the meeting and be like, oh my God, this person's a sociopath. I should just give them money. Other times you'd be like, "Oh my God, this is an incredibly kind, thoughtful person who will lose all my fucking money. I need to get out of this meeting as quick as possible." See what I did there? They expected it to go one way, and I took it the other way. In comedy, that's misdirection. But in this case, it's the goddamn truth. So, and you've been through this. Like, you're in the meeting, you're like, "Holy shit." And then that's where the stories come from where I went to a meeting, 5 minutes in the meeting, the VC wasn't paying attention and they ended the meeting after 15 minutes. They were trying to be kind to you. So then I said, first principles thinking, what is the least amount of time and effort we can do that sort based on and make sure we're not wasting the founder's time or our time? So we created a system called qualified sorting. This is how we sort companies. We ask them a bunch of questions. Every 3 or 4 months, we change the questions we're asking them. Based upon our deliberations and how we can get them through that. It used to take us— we used to allocate about 10 minutes for us to sort an incoming application. We've now got it down to 2.5 minutes. It's 75% less time, which is another way of saying we can do 4—

we can sort 4 times as many applications, which goes back to the ratio you started, right?

And now we are using AI to do this. When an email or a deck comes in, AI, they fill out the form. AI summarizes the form. AI goes and looks for other sources of information to add to the profile. And AI will kind of— we don't have a score like how likely are we to fund this, but make a note of that, like an actual score, like how likely this would be to get a— a human would pick it, and then we can use the AI picking it and compare it to the human picking it. And we do 100 tests. Yeah, so, and do it quick. So, so now we've got that process down 75%, and that's like a way in zero-based budgeting. And then having somebody else say, well, how can I take the 2.5 minutes and get it down to 0 minutes?

So it's really starting from zero, and rather than you're going through a conventional budgeting process thinking like, what's the most efficient way to get the result and building it up? So it's almost like first principles thinking. Yes. Applied to budgeting. And so back to AI, I just want to comment something you said here and before. One of the things that I'm doing right now is so you can use these AI tools to help you do something, write an article, summarize something you've read, something like that. Now I'm actually using tools like Replit and things like that. You can build whole— with prompts like you would ask it to review an article, you could say, build me a tool to review an article, vibe coding, and use this type of logic, and it will actually make a tool. And then you can repeat it very easily, whether it's write something, review applications. So now we're at a point where AI is making the tools to do the job you need much easier.

And a way to think about this is there's this hot new programming language English. So if you know, and you study real hard, English, you can program now. And it actually kind of works. And the last 10%, you know, it's going to get 1% better. You know, there'll be like 1 percentage point of increase in problem solving every 6 weeks or so. So we'll be sitting here next year, and the idea that you had to do the last 10% or 20% polish will seem foolish and silly. That I even said there's 10% left.

So as an entrepreneur, what would you recommend that they— I mean, I think everybody here—

I mean, there are an unlimited number of tools. So what I did in my company was I found a Chrome extension, a Firefox— I use Brave, which I think uses the Firefox extensions. And, you know, when you open a new tab, that's like the browser's way of making money. They show you news stories and then every fifth one is like some spam bullshit. They get paid per click. Yada yada. This tab override lets you set what URL you want to go to. And so if I went on Maddie's computer right now, in her backpack, and I do a new tab, what would I see? Very good. Corinne, would I see the same thing? Don't lie, 'cause I'll fucking check it. I'm fucking crazy. Don't tempt me. So, I'm joking. I'm not joking at all. Actually, he's not joking. Totally not joking.

But you need to be maniacal, everyone. No, because I— this is how you win.

You want to talk about maniacal? I bought ChatGPT for everybody. It shows me if they used it or not. Gemini now shows me on the back end how many queries people are doing. So, and I know if you were on Slack and how many days you were on Slack this month. So I'm not like monitoring your computer, but I might every couple of months look at like how many days in Slack. Like, I can see like there are people in my company who are on Slack 22 out of 30 days, and then everybody else is 29 or 30. And I'm like, who the fuck's not checking their Slack for 5 days a month? Like, you obviously do not want to work for a lunatic. You want to work for the post office. Like, I'm going to doge you. You're doge.

You, you, you did go there.

I'm a doge bag.

I'll be totally honest.

Total douchebag. I don't— If you're not working, if you're not checking your Slack and you're a venture capitalist on the fucking weekends, then like, literally, that's like, oh yeah, I hit the lottery and got the greatest job ever. And like, I decided I would not want to take advantage of that opportunity. So then the next thing we did was, they do this 20-minute meeting. And we tell everybody, we'd love to do an introductory call with your firm. And we said, "Well, what's taking time?" And so we looked at the process. Putting the meetings on the schedule was taking the time. And I was like, "This makes no sense." We're getting on the phone with these people like 3 days later. They're like, "Yeah, that's incredible." I'm like, "I want them on the phone the same fucking day." Everybody in my company. You know who the biggest roadblocker is going to be in your company? The people you chose to hire. Every time you ask them to do something, they're going to tell you why it can't be done. And so I told everybody, Next person who comes to me and tells me why some shit's not getting done, I'm firing them. I don't give a fuck who it is. Literally, tell me how it could be done. I'm not asking you to do something to have you tell me why it can't be done and why it's not necessary. I'm asking you because I'm paying you money to figure this shit out. Do you want to work at the post office? Are you in a fucking union? What the fuck is going on here? Like, what planet are we on? So, but let me tell you, I started—

Give me your hand. First of all, I'm sorry, I just want to say I couldn't agree more.

All right, so look, look, guys, right now the only reason I'm talking is to mentor those two people, I guarantee, and the next two I'm hiring in the room, because one of them's gonna make it, and I want the one who makes it to actually do this to the next person. But here's what happens. I just want to finish this example because it's so profound and important. I'm like, well, who's getting the most done here? Oh, this person, Bianca, is doing great. This person's— Kelly's doing great. I'm like, okay, great. Hey Kelly, Bianca, how the fuck do you get on these calls or whatever? They're like, I use Calendly. I'm like, you use Calendly? They're like, yeah. I'm like, the company where they send you a link to set a meeting? They're like, yeah. I'm like, why do you use that? So I don't want to be going back and forth like coordinating schedules. They just pick an open slot. So I tell everybody, everybody set up a calendar. Oh, half the people, why do I use Calendar? I don't like doing it this way. And I want to get an executive assistant. Fucking executive assistant? I want to get a fucking G650. I don't have a G650. Like, what are we talking about here? We all want things. So then somebody's like, well, why don't we just do a group calendar? I'm like, a group calendar? Like, yeah, everybody puts their schedule in We send a link, a calendar link, and it gives you the next available person. And they're like, oh, well, you know, we like to give certain startups to certain people. I was like, fuck that. One link. Every time somebody gets approved for a meeting, they get a link. And I want it to show 7 AM and 7 PM. And I want it to be every 15 fucking minutes. And so now if you're a founder, you apply and we sort you and probably 20% of the people move on to a meeting. We don't invest in movies or pizzerias, full disclosure. We get some of those. I've got a great idea for a pizzeria. I am so there, but I'm not investing. But I do like pizza. They click the link and founders are like, holy shit, this guy's a lunatic. I can get a meeting. And they click the link. In a few minutes. And literally it's 1 PM and they're like, now serving, 1:20, 1:40. 2 o'clock, 2:20, and they're like, okay, now I'm the lazy one. And you know what that communicates to a founder? We're fucking serious about the job. So I want to—

I want to— I want—

and you know what happened? Yeah, thank you, Mom. Um, my mom's here. Um, I'm just kidding. Um, but you're going to get one of the $25K cards. It's locked. Um, so now we get the meeting in like, boom, That's first principles thinking. That's zero-based budgeting. We took out literally an hour of back and forth, and we increased service. So we saved 1 hour per startup meeting, setting it up and the back and forth, and we increased service levels. So the next time somebody tells you, oh, we can't do it, say fuck you now, and give them a harder challenge. I want to do this 10 times faster. I want to do this in 0 minutes. And that's what AI does. You can actually do this in 0 fucking minutes. I need to—

I just want to point this out to everybody. Okay. I had the same conversation with my team. I'm like, we've got to move faster. We've got to move faster. It's no longer I can't do it. No, no excuses. We get like, we got to figure out how we can do whatever we need to do faster.

How we can do— and better, and faster, and better. And here's the thing, this thinking— and this puts people in the 3 buckets— the people who are using AI 20, 30, 40, 50 times a day, they know what I'm saying is absolutely true. Is what I'm saying absolutely true? Raise your hand if you agree with it. Or do you think like maybe I'm bullshitting a bit on the margins and maybe this isn't exactly true? Okay, just kidding. Okay, good. I appreciate you playing along. Um, This is the head of the Austin Public Library. She's here. They're open 4 days a week, 3 hours a day. Why the fuck isn't the public library open 24/7? Let's ask ourselves that question. Like, why the fuck can't I come in with my driver's license, swipe it, and go into the library 24/7? They put cameras up, and if I steal something, it knows who the fuck I am, and then it bills me for the thing. Exactly. The public library should be open 24/7, and there should be one employee. And so we should get literally 100 times the number of hours in service for 5%. There doesn't need— we don't need the US Postal Service.

That's where we— guys, that's where we—

how many people here would pay $20 a month to not get the US Postal spam service? I'm not kidding. Would you pay to not get it?

I would pay. I mean, it's just spam.

So what the fuck are we talking about here, people? Like, what is the purpose of the US Postal Service in the age of email? One day a month, one day every two weeks for people who pay $1 a year for it. That's my plan. I'll doge the shit out of the Postal Service. Don't, don't go postal. I'm going to give you 4 years severance. Everybody else gets 1 year severance, but for the Postal Service, we're giving 4 because they're a bit crazy.

All right, so, so, Jay, let's go. Let's— one, what we're I'm getting there, like, we need to wrap. So I want to cover a couple quick things. Lightning round. So lightning round. So I'm in founder mode. I know you and I are somewhat close to this because of our friends. Should we do the Doge thing quickly? Sure. What's— and then obviously a general advice one. So we'll do the two last things, craziness that's happening. Sure.

Well, it's been a hell of a week. You know, talking about founder mode and moving fast, uh, agree, don't agree, it's nice to see the velocity of change. Zero-based budgeting, and if you're coming into a dysfunctional organization with a lot of waste and fraud and inefficiency, you know, there's a lot of different ways to go about it. You could try to change it 5% a year for 5 years, get a bunch of resistance, and wind up changing it instead of a compounding 5 percent each year, 20-odd-something percent change. You'll probably get fought on it, and you'll make, you know, 10% change in 4 years if you're lucky. And we all know that. The only— I mean, I think Clinton did a pretty good job of like lowering the number of employees in Washington, D.C. If you come in and you shut everything off, man, it's incredible. Anybody here ever turn off their credit cards just to turn off all the subscriptions because it was easier? Raise your hand if you've done that. Okay. By the way, I was at— and I don't want to overstate my involvement, but I was at Twitter when Elon bought it. And I watched my friend Antonio Gracias, myself, Elon, and a couple of other really great folks, David Sacks. And, you know, we sat there looking at this mess and they were going to make major cuts before Elon bought it. So, we had to make some cuts or else the business was going to go away. And I was thinking like a third, maybe Sacks and Antonio may be thinking like 40%, and Elon was thinking 80% the whole time. So, um, one of the things they did was we need to figure out like where all the money was going, so we just turned off all the credit cards. Now of course people are like, oh, then just broad strokes, like there were 6 and 7-figure software contracts for software that had never been installed or used. If it hasn't been installed, it can't be used.

So, and then we're installed and unused.

And then there was installed 10,000, whatever, 1,000 licenses used by 12 people. And you're like, well, should we, are we paying for them? Yeah. And then there was a cafeteria that was fully staffed. But 1% of the employees were coming to it. So the lunches, when we did the math, were $800 a lunch. And nobody— and this is what happens when you're stealing and there's fraud and incompetence— people are saying, you know what, let everybody— they're nice people in the cafeteria, like, we don't want to lay anybody off. It's like, But it's COVID, and we gave everybody the ability to work from home, and things have changed. So should we still be making 80 meals and having 1 eaten and 79 thrown in the garbage or given to a homeless shelter? It's making no sense here. And like, the one I was the most like tweaked about was I was like, wow, this is a very cool system for, you know, reserving desks. You come up, you scan your phone, QR code, you're at this desk, you know. And I'm like, but nobody comes here. And it was like, yeah, not only are we paying $500 a month per workstation in real estate and $800 a meal, we're also paying $14 per workstation a month across 6,000 workstations or whatever it was, $200 a year across 6,000 workstations. We're spending $1 million a year on a suiteing software platform that is exceptional. I would have invested in, in a heartbeat as an angel investor or venture capitalist. For a remote company. So a remote company is still providing every— so that's what's happening in our government. Will they make mistakes? Definitely. Our country is about to go bankrupt. You've been lied to by every politician. We went from $16 trillion in debt to $35 trillion in debt. Anybody here who has any kind of a debt load like a mortgage, imagine your debt load doubled doubled in 8 years. And imagine your interest payments went from 2% to 7%. So you net-net were not just, you know, doubling your expense, your debt, you were also paying a rate on that debt 4x, 3x. We're going to go fucking bankrupt. It is acute. We talked about it on the All In Pod for 2 fucking years. We never thought that any person in Washington would ever reverse this. You can hate Elon, you can hate the Republicans, you can hate Trump, and he'll give you a million reasons to hate him. There's a long list of things he's done that are abhorrent that he probably would say, you know, probably maybe a mistake. You know, I don't make them, but maybe on the margins another person would change it, but not your president because you love him. You love your president. Elideo is a nasty, nasty man. Very nasty. So I got to work on the Trump. He's going to be here for 4 more years. I kind of let it—

You should do Trumpo. You should go on that solo.

I let it go for 4 years, and now I got to bring it back, but it kind of gets your throat a little bit. But I'm going to work it. I'm going to bring it back into rotation. The point is, let them cook. I'm a never Trumper.

Who likes about 65% of what Trump's doing. I'm with you. I didn't vote for him, but—

Okay, so putting aside even if you voted for him or not, this is a triage situation. There are people, like, literally this country is like a person, you know, at a, like, the beach in Normandy, and we've got to save the fucking patient. There isn't really time to be graceful about it. We got to get this tourniquet on before this patient bleeds out. In this metaphor, that patient's America. We're going to fucking bleed out. And it's been happening. If this experiment could flip at any moment, if people don't buy the bonds, if, you know, we don't solve these very acute economic problems, it could be the end of the empire. Like we could see like the dot-com bust and the great financial recession combined times 10. Like, it could get really gnarly. It could get really sincerely gnarly. And that's the thing about macroeconomics. Last night I asked, because I'm taping All In this afternoon, we're gonna talk about tariffs. I asked like 4 different groups, including our group, why is Trump doing the tariffs? And what's the end goal? Back to first principles thinking, zero-based budgeting. like, people can't figure out what's going on. And these are some of the best in our group, you know. Smartest people. Smartest people you know. And in very significant positions of power and very wealthy and powerful and plugged in and smart. And then in my other groups, it's like— some groups are just pure investors. Macro is alchemy. Macroeconomics, like, you start talking about macroeconomics, people are like, "Well—" It basically is bullshit. Like, they kind of know what's going to happen, but they don't because the world changes. And like, you put in AI, it changes. So the one thing I do know is that it's hard to go bankrupt when you have cash in the bank. It's easy to go bankrupt when you're in debt. How do I know this? I watch it happen to companies all the time. I have companies that raise money during the ZIRP era at billion-dollar valuations and are currently sitting on $50 million to $100 million. And they have infinite runway, and they send me their update and they say runway and they put the infinity symbol. And I teardrop. I love you, I love you, man. And then other folks are like, raised money, insert, built, you know, added 300 people, 1 new employee per day because employee count was in some way correlated with their, you know, founder virtue signaling or peacocking. And then they loaded venture debt on top of it, and now boom, they have no control over their company. And the company could be doing $20, $30 million in revenue, and they have lost control of it. Because at any point in time, the bank can be like, oh, you know those 17 covenants? You're breaking 9 for the last 2 years.

Or SVB goes out of business.

Or SVB gets cut up for parts and needs to be saved. So that's what's happening. I think it's going to be uncomfortable. Bankruptcy would also be uncomfortable. And there's a saying about bankruptcy, like I think it's attributed to Ernest Hemingway, who I think went bankrupt, but that could just be a meme on the internet. And they said— but I won't let it get in the way of a good phrase, which is, how did you go bankrupt? Slowly, then all at once. That's how it goes. Your startup is going bankrupt slowly, and then one day you can't hit payroll and everybody's gone. We've seen it a million times. That's our country. Slowly, boom. Well, let's fix it.

Yes. All right, well, thank you. Final, final thoughts for everybody here because we got Entrepreneurs, we got investors, we got people from all around. We're running a bit late.

It's greatest time in the world to build a company. Why? Because you're not getting a job offer at Google, Facebook, or any of these companies ever again. Because if you look, they have either the same number of employees as they did 3 years ago or 10% less. What I told you about AI, they're doing inside of corporate America inside of tech more than ever. Microsoft, Google, Uber, and Airbnb, and Meta have less employees or the same, and their revenues are growing between 10% and 30% year over year. It's the major unlock of our time. Never hire anybody again, build systems using AI, and watch your revenue go up. Can roll your eyes all you want at me, I'm just telling you the truth. That's all I'm doing. And there will be no more corporate jobs. It's just gonna be static team size, or it's gonna contract as the earnings and revenue go up. You want to be in the top half of the 61% of the country that own equities in these companies, but you will not work there in all likelihood. And if you have kids in school, you're graduating from school, there is no job for you. That is the good news. For me, because you are going to need to get— you're going to need to start a company because there ain't no more jobs in big tech. There are only layoffs, and it's going to be more every year. I guarantee you, I'll make a bet with anybody here. Take the Mag 7 and they will be no more than +5% and in all likelihood, -5% in employee count. Anybody want to take the bet? Great. So that means either you're starting a company and you're entrepreneurial or you're roadkill. That is the binary nature of AI right now. And if you have kids, you must make them entrepreneurial. You must make them think entrepreneurial. You must let them know that we're going back to America in the 1800s where you're on your own. Go west, get a fucking horse and a buggy, whatever the fuck. And, you know, this Little House on the Prairie— my— I'm reading Little House on the Prairie to my daughters. Like, if you— if you don't find some fucking food, we die. That's it. Eat what you kill, folks. End of the empire. All right, Jason Calcanis.