TBPN Live - Bridgit Mendler, Aravind Srinivas, Ted Feldmann, Karol Hausman & Lachy Groom, Sam Lessin, Kevin Systrom Says Meta Denied Instagram Resources

Episode Date: April 23, 2025

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You're watching TVPN today is Wednesday April 23rd, 2025 We are live from the template technology the fortress of finance the capital of capital. We're sharpers Starting late. We are under attack folks likely by a nation-state likely by a state actor That's why we're six minutes late seven minutes late, but we got a good show on us. You're live today They didn't they didn't they knew they knew the lineup was too unbelievable We're gonna pull it up on the screen for you folks today. We got a massive lineup. We got funding announcements.

We got Sam Lesson coming on, yapping about VC stuff. We got Perplexity, big announcement. They're going head to head with Siri. They're launching an iOS voice assistant. Durin Physical Intelligence, Northwood, we're going to be covering it all it all but first we need to cover Kevin's sister um the founder of Instagram has changed my dog turns out billion dollar acquisition. It's not enough He went to court and said you know what testified testified and said his

Sire was being mean I guess so Alex Heath kicks it off with a post here saying, Lord, give me the confidence to sell a company for a billion dollars. Basically disappear for seven years. Not true. He built another app. It didn't really go that well and they wound up selling it. But I used it for a while.

I used it for a while too. Old news app. Yeah, news app. Very cool. I wanted that to be like a modern incarnation of Google reader. I thought it'd be very cool if it was like AI assisted news reading.

They had some summaries. It wasn't quite there. And I think they didn't find their like early adopter. It wasn't clear if it was for like tech people or like normies. And so it didn't really go anywhere, but it was pretty cool at the time. And so he basically disappeared for seven years

and then reappeared in court to basically SHIT on my acquirer and I went back and found a great Sam Parr post from five years ago basically with some chat logs you know we love some leaked emails on this show this is amazing the chat logs from when Zuck was buying Instagram the highlights Zuck I can't get to two billion dollars Systrom two billion was my absolute say yes number I'll have to think on it. Just two dudes negotiating the best $1 billion acquisition ever via Facebook Messenger. Yeah, the deals go down in the DMs.

As they do. Deals die in the data room and they flourish in the DMs. I guess. Sarah Friar says, wow, after years of silence from Instagram co-founder Kevin Systrom is on the stand in federal court confirming what I reported in my book book including that Zuckerberg starved Instagram's headcount around safety issues leading to major problems and so

Alex Cantrowitz posts Kevin Systrom watching Zuckerberg saying Instagram would be nothing without him. Curious. No, I was on to something here. And so there's another funny post from Will. Do you think Kevin Systrom and Mike Krieger envisioned this when they created Instagram? Chatting with AI. Chatting with Walter White. Yep.

Or YN. I don't know who YN is, but 8 million messages. Wow, that's a lot. Anyway, also Kevin Systrom, apparently he's on the board of Walmart. Not bad. Pretty awesome post-exit founder mentality. Good place to land.

Yeah. I grew up with a buddy whose dad was on the board of Walmart. And we'd go to Walmart. And he was just like, buy anything you want. It's customer, it's research. I was like, that's awesome. Well, if you think about it for Walmart, the amount of purchasing activity that Instagram drives

is obscene. That does make sense, actually. Yeah, and that's why Ben Thompson was saying that Walmart should buy TikTok, which seems weird, but it actually makes so much sense when you actually play it out, right? And so this all comes from a report in The New York Times. At trial, Instagram co-founder says

Metta denied his company resources, Kevin Systrom said during testimony in a landmark antitrust trial that he Instagram co-founder says Metta denied his company resources. Kevin Systrom said during testimony in a landmark antitrust trial that he believed Mark Zuckerberg, Metta's chief executives, viewed Instagram as a threat. Kevin Systrom, a co-founder of Instagram, testified on Tuesday. He said, quote,

Mark was not investing in Instagram because he believed we were a threat. Mark was not investing in Instagram because he believed we were a threat. Mark was not investing in Instagram because he believed we were a threat to their growth. But they'd already done the acquisition. It was interesting. So I think the high level Systrom is basically saying that Mark wanted to own Instagram,

and he knew it could be successful. But he didn't want it to be too successful, because it basically would have been damaging to Facebook's metrics. Yes, Systrom called it a buy or bury strategy to illegally cement the social media monopoly by killing off its rivals. The Instagram co-founder made millions when Mark Zuckerberg bought his company,

but Systrom sharply contradicted Metta's defense during hours on the stand. And so, what I- Millions is sort of an understatement. Yeah, it was more like 100 million, I think. Couple hundred million. But I'm confused about this, because once it's a whole co-acquisition, like he owns the whole thing,

was Zuck optimizing for short-term earnings in the public markets? Because yes, if you funnel everyone over to a lower monetizing product, this happened with Reels, too, when they started pulling people away from the feed, which was very efficiently monetized. They moved people over to Reels, Reels wasn't monetizing as well.

Then they had to keep giving guidance to the market and say, hey, Reels is gonna get there, it's gonna get there, trust us. It's starting to monetize really well. The ARPU is gonna be there, the retention's there. It's gonna be additive to our business, it's not gonna be destructive, because there's always a fear of that. So maybe there's something like that. It's very to be additive to our business. It's not going to be destructive, because there's always a fear of that.

So maybe there's something about that. It's very possible that Zuck, at the same time, was being wanted to be aggressive over the long term, in terms of building out a new platform, but short term wanted to basically be able to control the process, basically. And I think that's a great take, being like, hey, we don't want to move a bunch of users over to this app

that we're monetizing well on Facebook and move them over somewhere where we just can't make nearly move a bunch of users over to this app that we're monetizing well on Facebook and move them over somewhere where We just can't make nearly Yeah, it's just odd to sell your company to Facebook and then you have Facebook stock or cash or some mix of those two and not Just immediately and still have it be like your baby Like I feel like if you're if you sell your company to Facebook You should be very much on like the Facebook team and you should say hey Yeah, I have my thing Instagram that I want to grow but really all I very much on the Facebook team. And you should say, hey, yeah, I have my thing, Instagram,

that I want to grow. But really, all I care about is the Facebook share price. And so if what's best for the Facebook share price, because that's what I own now, is slower growth of Instagram, faster growth for Facebook, you should be fine with that. So I don't really understand the problem here. It does seem like he has a bone to pick. Lots of people do.

I was listening to Palmer Lucky talk about the Facebook acquisition and he said that the thing that got him over the line was that Mark told him that, yes we're gonna acquire you for single digit billions, I think three billion, something like that, but if you let us acquire you, we will invest $10 billion a year for a decade in VR and AR technology in reality labs

and and Palmer was running the numbers and was saying well I'd either have to raise a hundred billion dollars to make that happen or I need to sell you know millions and millions of headsets like every quarter to justify that type of R&D investment and so in terms of like making VR a reality in the way Palmer wanted this was a great option and of course course, like, Zuck did do that. He did actually back that up, did wind up investing in Reality Labs very heavily. Of course, there was all the political stuff

and the fallout from that, that left like a bad taste in Palmer's mouth, obviously, but then he built Andrew also, you know, worked out. Yeah, I'll be interested to hear if Adam Masseri ends up having to, is basically dragged into this, because he had a product at Instagram. This was, I think, long after Kevin had left, but ultimately he was the VP of product management

at Facebook during the period in which they were kind of integrating the platforms, and then eventually kind of moved over and focused exclusively on Instagram. Yep, another quote from Systrom here. As the founder of Facebook, he felt a lot of emotion around which one was better, meaning Instagram or Facebook. And I think there were real human emotional things going on there. That's funny because the diss on Zuck during this, oh, he has no emotions. He's a robot. And I was like, oh, he's too emotional. I don't know, it's hard to tell.

He was picking favorites. It seemed like it all worked out and it didn't feel as a consumer like Instagram, oh, they're not investing in this. Oh, they're trying to sunset this. It was like, no, they're trying to monetize this like crazy. They're putting more ads, they're adding video, stories, reels, everything.

They went crazy with that business and it became very, very, very, very successful. Yeah, I mean, hands down, one of the best consumer tech acquisitions of all very, very, very successful. So I don't seem to have worked out. Hands down, one of the best consumer tech acquisitions of all time. Yes, of course. Can you think of anything bigger or better? It's not like WhatsApp.

WhatsApp was significant and was probably a good buy. But it was also 19 times the cost. And doesn't generate nearly the direct revenue. Very important to the strategy. But I'm sure we will have more to talk about on Big Tech Strategy. But we have the founder of Perplexity in the studio. So welcome to the show.

How are you doing? Thank you. Thank you for having me here, John. What's going on? Great to have you. Can you tell us about the announcement today? What are you announcing? Who are you taking a shot at? Well, we are going to be partnering with OEM. I think Bloomberg's already written

about it. Replexity will be pre-installed on the phones of that OEM and we'll be able to push notify all those users to set for complexities to default assistant on the Android phone. This is a pretty big deal because until now, people with OEMs would just not even take a meeting with you. If you ever go to them and say, hey, what do you think about using an alternative assistant

or an alternative search? They'd be like, Google is just paying too much money. I'm not gonna do anything. So it took this long to actually build something pretty differentiated and new, which is obviously taking actions. We put out a Twitter announcement today morning to saying we got most of it working on iOS as well.

So I feel like this is the next stage, like moving all these AI chatbots to native assistants on the phone that not just answer your questions, but also help you get things done. Is there any hope that there will be a more open ecosystem on the iPhone? I've used the shortcuts function on the action button.

It's pretty janky. I'd love to just remap Siri. I love Apple. I love my phone, but I don't love that particular product. I'd love to swap it out with one of the more founder led AI companies like yours. Is there any hope there or is Apple just too dominant in that? And do they view it as too valuable? I would assume the latter. I think my hope is at least like, let's start with Siri being able to call multiple AI apps. Sure. They let the user provide some preferences on what apps they like for what different things.

At least we can start with that. And I think calling other apps could be interesting. Most of, actually, to be fair to Apple, a lot of it is still exposed in the Apple SDK through the events kit. So that's how we got things done, like calendar, mail, reminders. These are all part of their SDK,

so you can actually call it. Podcasts, Apple Music, part of their SDK. So you can actually call it podcasts, Apple music, that's Apple Maps, all of these are possible to integrate into. You cannot do stuff that's more native like alarms and volume and brightness, you know, people want and everything system at the end of the day. So that's their advantage. So I hope like, you know, what they can do is stuff

that's so easy and obvious, like setting an alarm or making a phone call or sending a text message. They can just continue to be pretty reliable there. But anything that's more multi-step in nature, they let the user invoke their favorite AIs to get things done. What lessons have you learned from the antitrust history in big tech and what are you watching today with the antitrust stories that are unfolding around Google and Meta on Capitol

Hill recently? Yeah, so one of our executives, Dimitri, is testifying today for the Google versus DOJ case. I've already wrote a written on next our core points. I don't think Google should be broken up for two main reasons. One is, it's not even in the interest of America for Google to be broken up. And number two is it doesn't actually increase competition. It's just gonna like transfer from one monopoly to another.

And actually they've done a pretty great job at helping other people build browsers. Like Edge, I mean, if you want to use the word wrapper, since I get accused of it a lot, Microsoft Edge is a Chromium wrapper. Yeah, that's right. Ray was a Chromium wrapper. No, that's a great take.

Everything, every other browser that's even managed to take even a tiny bit of market share from Google Chrome has been built on technology that Google did. So we should actually credit them for that. And I don't trust another organization to maintain that open source repository in the same way that they have. And the other the other thing, honestly, though, that we're pushing back on against Google is their how they couple OEMs to keep them as a default and don't let the OEMs put in Play Store otherwise. So basically, it's very simple to understand. If there is like an enthusiastic OEM who wants to ship AIs on their phones, what Google does is, okay, you can do whatever you want. It won't be an approved Android version of Google. And if it's not, you're not allowed to put Maps, YouTube, Play Store. The one that affects this the most is the Play Store,

because nobody can see the phone where you cannot install other apps. And most developers of other companies are not interested in maintaining versions of their apps for multiple Play Stores. It's a lot of work. Even Samsung couldn't really get Galaxy store to work and meta Amazon all of them tried making their own phones and fail for this very reason. Even if you fork Android and try to make your own phone, you have to convince everybody to actually ship to that particular new Play store and maintain it and keep improving it. And you're not going to be able to share the Play Store ad revenue and subscription revenue with the OEMs that Google can. So this is the primary problem. And but that said, like, you know, the system

that they have Gemini is actually pretty horrible. And the model is great, but the product is not. And there should be no reason to force people to keep that as a default when you have an inferior product, just because you have all these deals and lock-ins. So that's what we're pushing back on in our testimony. Yeah, just because you build a great foundation model does not give you a guarantee that you'll win at the application layer.

And so these wrappers, although they've been derided, like that's the UI layer. That's what's so important to the actual consumer. I want to talk about social networking in the context of foundation models. We've seen the partnership between the merger between X and XAI. There's been rumors that OpenAI might

be thinking about doing some sort of social network. Obviously, Zuck has been able to vend llama into all of the Meta core products. What do you think the future, does every AI company need a social media dance partner? Are we gonna see Pinterest and Snap do things? I know some of them have experimented with AI features but haven't brokered a huge partnership yet.

What does the future look like? Are these two technologies like intrinsically linked and destined to be part of one organization or can an AI company operate independently forever? I mean, I don't know how socially I go hand in hand that it's not that straightforward. Like if it was then meta AI would have already taken off pretty massively, right? Even though it's not the leading model

You could imagine most of the car like say let's assume chat GPT. You know get like a billion queries a day or something I Don't think like like 60 to 70 percent of them are probably going to be super simple enough that media is going to work for it You don't need the fancy models in fact most people most people using tracks between the world don't even know there's a model called all one or three and don't even know what the differences for GPT four. So I would say the main problem is it's not as still very single player. The only experiment that I feel took off on social is this thing that we did first called ask for complexity bot on X. Yeah, I remember that. And I'll see all this hype in the comments.

Yeah, it's great. X AI also, you know, implemented that with a grok and they have way more advantages because they own the platform, no rate limits and like, they can drive installs of their app through that. So it's like a pretty good experiment that worked. So I could imagine matter doing this, like, you know, on threads that could be like a add matter AI and then, or it could automatically reply. You could do all sorts of cool things. So it's more like the other way where a social network

can help you grow usage of an AI app pretty immensely compared to like an AI app benefiting from social error, so far at least. But if you could figure out social for an AI app within the app itself, it can definitely make it more daily usage and high retention, which is what most AI apps struggle with today. Can you talk about how you're thinking about your own models going forward versus leveraging the existing models? You guys have Sonar and then R1776. I'm curious how you're looking to focus going forward. I think we'll continue to keep the same strategy, which

is have a version of our product that can run with our own models, but not hinder or disrupt the user from this best experience that we can provide to them. If we're not able to do it with our own model, we'll just use other people's models. We have no problems with that. Our belief is that nobody's going to have a lead in having the best AI model for more than a few weeks. The pace at which the field is moving, like Anthropic did the 3.7 on it. And then within a few weeks, like Google did Gemini 2.5 Pro, which was way better.

Grok 3 came out and then OpenAI has 03 and 04. There's always some debate on like what is the best model? But they're all looking the same and they're all good for certain specific set of things. Do you think in five years, the average internet user will have a favorite model or they just won't even know the underlying model that they're using and they'll just be sort of, the software application layer will just be serving

the most effective model for the task? I think it's gonna be more like the second case. The main reason I believe that it's gonna be like that because everybody's just chasing the same benchmarks. Everyone has the same set of benchmarks, Elim says, Elim Arena, GAIA, GPQA, and Humanity last exam. And they're just trying to show their AI is the best. And so they do all the same sort of things that you do in RLHF. And it ends up making models like look similar. Yes, there are some like tasteful things some model developers do, like some people

like the way Claude responds. Some people like Grok's attire, but these are all like easy to build. It's not that hard. The difficulty, which is why everybody's working on the difficult problem is making these truly smart and like better all these reasoning tasks. And so that's gonna end up making all these models roughly similar looking to the average user.

That makes sense. When do you and the team decide when something is ready to ship? With the voice assistant today, one of the massive advantages that I think you guys have is the culture of Apple specifically is about perfection, right? It's about pixel perfect design. It doesn't feel like the culture is sort of comfortable making

mistakes. You can see the even iMessage summaries being very embarrassing to them, right? Whereas like as a, you know, a big company now, but still relatively young, you guys have the advantage of being able to, you know, move quickly, try things and iterate. Yeah. So I'll literally read out to you

the chat I had with our engineer who worked on this. We good to launch and announce today? Question mark. And then he's like, yes, still making improvement, but let's launch. And me, like, do you want to address some of the onboarding concerns people had, like all the which calendar or which maps to use? And he's like, yeah, they're valid concerns, but I'm worried about waiting too long to launch. The Apple engineer in me says to wait until it's perfect. The perplexity engineer in me says that's why Apple has never launched anything.

Wait. So, and then I said, okay, let's roll. Do you have a sound effect for us, Jordy? Founder mode. Anyway, you posted, what's a social app that doesn't exist yet, but you wish existed, doesn't need to get to 100 million or a billion users. What did you learn from that? What was exciting? And what do you think you might stay away from? Yeah, yeah. The major learning was the OG Facebook

and Usenet. These were the two main ideas. Mark and reason actually talked to me after that. He's just like his bet, like, you know, idea that he always keeps coming back to apparently. And Bloomberg terminals and they're interesting thing where, you know, nobody thinks about as a social network, but it is what it is today. People are not leaving it because of the network it has. today. People are not leaving it because of the network it has. Right. And it's very elite because you have to actually pay that much money to get into it. But then because of that, the quality of like exchanges are also high or at least that it gives you this feeling of exclusivity, which is what Facebook leaned

on to in the early days where they're only in Ivy League colleges and stuff. And so I think that concept can be explored clubhouse definitely tried that and failed. So it's not like, you know, bulletproof, but that can certainly be explored again, if you want to build an app that doesn't have like too many users, you need to get it in some way, whether it's by pay to play or like some other kind of eliteness criterion, it's not clear. And what after you get in should also be thought about. The quality of exchanges should be high, like in some sense, Elon has turned x into some something like that. There are a lot of roles, a lot of random accounts and all that stuff, but

like that. There are a lot of trolls, a lot of random accounts and all that stuff, but they're forcing people to have the blue mark and paying eight dollars a month and all that stuff. I think he's already made it like much better than it used to be. So a more aggressive version of that could be explored. He could explore it himself. Like if there is a super premium version where you only get to like respond to some people if you're paying even more. How would that make the quality of exchanges on the platform? It's not clear because the other side of the story where some people like Bill Ackman come and respond to random people on X and he's and he gives us like I like the attention I like I like and I'm even on a vacation I want to come in like keep replying I like the dopamine hits of like getting

notifications you know so it's not like if you get billionaires they want to stay with the other billionaires or stay exclusive I think they actually like using a product like X to stay connected to the normal people yeah okay I don't like drag the idea yet I want to pitch you an idea that we've been kicking around here might be terrible. But in terms of like the LM research, AI driven social network, I find myself doing a lot of very niche deep research reports. Sometimes I did a whole deep dive on deep research report on

Toma Bravo. And then I did another one on the story of Johnny Carson, the original host of the Tonight Show. Fascinating, I don't know how I wound up down that rabbit hole, I really enjoyed it. If I'm on perplexity and I find some, and I ask some really interesting question, because asking interesting questions is often more challenging than getting a good answer,

what if I just could just click a button and share, publish it to an internal network and then Jordy can follow me on perplexity that he can see my most interesting questions. Not going to see the whole feed because maybe I'm asking about a health care issue, but if I choose to share it, I'm just sharing my result and then they can click in, oh, John was interested in this specific thing. Maybe I'll take a tour down his research result. Is that an interesting option or is there something I'm missing that's like, that's actually a terrible idea?

No, it's not a terrible idea. We've exactly considered this exact idea. And, you know, obviously the more I keep working on features, people ridicule me that what are you doing when your core product is failing and buggy and like going down and like they're going down the drain and like you're taking the company down. So all I read all that stuff too. So don't let the haters get to you. Don't let the haters get to you. I think there's some of them have a valid point though. Like you're

more features you keep introducing to the product. You just lose sight of the core focus. Why the product even exists in the first place and making it like a pretty bad experience and then you win on neither of these things. But I do agree with you, like it'd be great to share the perplexity threads or like that you create. We have this thing called Discover and we're trying to increase the volume of content on Discover and we're trying to increase the volume of content on discover. And once we do that in an automatic way, with curation to users' interests, like we're going to let some of the users try to like publish it to discover on their own, just like a creator on YouTube does it. And then if a few people engage with the

like the TikTok algorithm, we're going to try to surface it to more people. That is the long-term idea. That's why I'm even having to discover, a lot of people even ask me, why does this thing even exist? Because I wanna keep it as the optionality to like have a social product within for complexity. Yeah, that makes sense. If you have another minute,

I'm curious how you're thinking about shopping, how much time you and the team are putting into this. It's obviously a very exciting opportunity. And I know you've shared some about what you guys are doing before. Yeah, so last year, it was the end of last year, we launched a perplexity pro shopping where you can, and once you do a shopping query,

we're not just giving you the answer, but giving you the product cards, and we could even let you buy it directly from there. Some of the things we surfaced from Shopify with their API and let you buy with ShopPay. And some of the things we ourselves integrated with some merchants and did the checkout flow ourselves. And you wouldn't even have to go and check out on the merchant side. You can just do it directly on Proplexity.

We thought this would be the best innovator dilemma angle against Google, because Google, even if Gemini gives you shopping answers, they have no incentive to let you transact, because they make money by sending you a merchant sites. That's why Google Flights doesn't let you book flights on Google. You have to book it on Expedia or booking.com. Same thing. So I think that's why we

worked on travel and shopping where we let people try to book directly. We have some ideas on how to incentivize it, like free shipping or like X percent off on hotel bookings done on complexity. But what we learned the hard way is people actually want really good results first. That's why they're even coming here. They don't care if they transact here or not. It's a secondary thing. That is only if the result quality is so good, are they interested in the last step. And we didn't quite get that right in the whatever we did end of November. So that's what we spend time on the first quarter is to just improve the UI, improve the latency, improve the relevance,

make sure the cards are like up to date, high quality, filter all the low merchants, like low quality merchants, make sure like even images for every card is present. Like this is all a lot of boring work that LLMs don't solve. Same thing with hotels, like TripAdvisor data is great. We work with them, but like there are so many other places on the web where there are good reviews

that people wanna know. And you gotta like aggregate all of that. And this is why I think like model companies are not guaranteed to win the application layer because you have to work on all these boring things. And then sometimes when people book a hotel on perplexity, like when you actually go to the hotel, like they say the booking never came through.

So there's a lot of real world problems you hit in, like packages might not get delivered. You don't have a way to track the package because the merchant still does the shipping. We don't do that. So tick tock, if you notice tick tock has a shop tab, which literally looks like Amazon now. And I heard that they even have their own fulfillment in Seattle. They hired people from Amazon and like they're have their own fulfillment in Seattle. They hire people from Amazon and like they're doing their own shipping. So that's my lesson from this is you want to go to a vertical you have to go all in and like nail like like be prepared to like play the long game there. How do you think about manufacturing viral moments? You guys had a cool experiment with your Super Bowl activation.

I'd love to get a postmortem on that, but then you're also not afraid to go. And you did this sort of squid games campaign that I saw getting a lot of attention as well. How do you think going forward sort of balancing these more like scrappy kind of organic activations versus going big and working with global celebrities to build the brand? I think we should keep being scrappy. By the way, he's a pretty global star, well-known star. People recognize his face pretty quickly, but he's also not as expensive as Hollywood people. That's why we decided to work with him. The the other things like, it's a concept that matters in the end, right? Like coming up with the right concept is more important than like who you work with. And we'll still try to keep doing these one-off viral moments. It's all about taking bets,

not all of them land. The Super Bowl was good. In fact, the retention from people who came to Super Bowl exceeded my expectations. And again, whether it's better than doing Instagram ads, it's not clear to me yet. We have to explore all these different platforms. But I do think there's two things you benefit from. We did this thing with Ben Schaper over in his podcast, like he pulls up perplexity and ask questions. Um, I think like, uh, that doesn't actually convert, like you cannot track performance, but, uh, it, it, it does lead to more brand awareness. Like if they're like, he has a lot of listeners and it's a different way of doing ads

on a podcast where you're not actually like having him say perplexity is awesome go and install it it's more like watching him use it and then you learn what the product is and how what it's meant to be used for kind of inspired by Joe Rogan's pull it up Jamie where all the time google is being used there yep yeah we do that with polymarket we pull up polymarkets all the time and recommend that people go and download and install the Polymarket app. Yeah, that's pretty awesome. It works really well.

I'm curious. You mentioned earlier people sort of yapping on X, trying to sound in on your product strategy. How do you balance like on X, it's like an echo chamber of people that are in Silicon Valley working on AI. But perplexity, in theory, doesn't really care about people in San Francisco or New York or these sort of hubs.

It's like you care a lot more about some random person in Arkansas wanting an answer about something and using the app, how do you personally kind of like think about writing a needle? Everyone in Silicon Valley can switch to DuckDuckGo and Google would be unaffected. That's like the lesson from the last era. And so you could do the same thing, but yeah, I'm interested to hear your take.

I think this is both my weakness and strength. I spend a lot of time on this platform so I understand it better. But then we are living in a bubble. My weakness and strength, I spend a lot of time on this platform, so I understand it better. But then, we are living in a bubble. Most people are only using chat GPT and they haven't even heard about most of the other apps. I think Elon has managed to break that a little bit because he has 200 million followers.

So essentially he reaches a lot of people. But that's kind of why we want to do more of these Instagram related things, the commercials, Super Bowl. These are our attempts. Actually, if you notice the Super Bowl tweets didn't actually matter on X. Most people made fun of it or didn't even engage with it. But it did help us get a lot of mainstream normal people become aware of the app and use it. Same thing with the Legion J commercial.

Like it helped increase our usage in other countries outside, countries that don't even use X. So I believe the platform that has the most people in the world is Instagram for good or bad. Like if you go to any city outside the Bay Area, just watch which app people are having on their phone. It's mostly Instagram or bad. Like if you go to any city outside the Bay area, just watch which app like people are having on their phone. It's mostly Instagram or WhatsApp. It's not really X.

Yeah. Do you spend a lot of time thinking about AGI or is there just enough consumer application features to build that it's almost a distraction? I do spend time thinking about it. In some sense, it's a unique opportunity to have like the ability to have the front end, which people can feel the AGI, let's say.

Yeah. So you do want to think about experiences where people can be made to feel AI and that creates that jaw dropping magical and consumer experience. So that's kind of why we worked on all these pro searches, it is voice assistance agents, we're working on the browser, browser agents, or the you can only do all that if you're like making some predictions of where these models

could potentially get to and try to build before even they get there. You don't want to be late. You want to build at the right moment where like kind of like how we book reflexes around the GPT 3.5 time, not GPT 4 time. It would have been too late then. You need to pick your moment. So you do need to think about AGI. That said, I'm not a believer in like, you know, fear of hongering. I just think it's already happened. Like the genie is out of the bottle.

China versus America that race is already going on. Nobody's gonna slow down and everybody wants glory No, nobody cares about the other people or something Everybody wants glory and and some kind of power to control the future. So let's just Like like accept the truth and move on and try to like make sure Everyone knows how to use the AI so that their livelihood doesn't get affected. That makes sense. I was thinking about it.

I don't know of another $10 billion plus AI startup founder who's not constantly promising that AGI is like two months away to get, you know, you're just like, you know, let's focus on our users and focus on the opportunity. It's probably the right thing. I mean, speaking of the foundation models on a more practical level, where are you

seeing the most interesting vectors of optimization? People are focused on large context windows, huge pre-training runs, but there's been some debate about, are we hitting a pre-training wall? Are we hitting a data wall? RL is very hot right now. Where do you think the foundation model labs need to go? And what are you specifically excited about?

I imagine that maybe a cogeneration model, not super important to your business, but something that's more knowledgeable and hallucinates less about facts, extremely valuable. So what do you want to see? I think RL is the place where most investments are gonna go to, especially with models like 03 that are able to do two calls pretty natively

rather than being prompt engineer to do that. For example, before 03, the way we built our agents is there would be one model that came up with a plan for the query, another model that would execute the plan by converting the plan to smaller queries, filtering links, calling searches, and then another summarization model that actually takes all the results of the planner and the router and summarize things. Now it's all one single model. That's great. That means you have to rebuild it, you have to throw away lines of code and rewrite it.

But we've been doing this since the beginning. Like people think like Perplexion has remained a stagnant code base or something, it's always changed as soon as like models became more capable. But the interesting thing about the native tool call kind of models is that if we want like a sonar version of the product that runs on our own setup, we also need to start doing post-training beyond just training for instruction following and summarization, but like also like two calls

and completing tasks using RO. And we hope to collect all this interesting data through the browser platform where like people are giving tasks on our browser. And then we obviously some of the agents will fail there, where we'll collect all the data and like try to create like positive trajectories, create like eval suites, and then do RL post training on that.

And so the nice thing is a lot of open source code bases exist on how to replicate GRPO or PPO and post-drain these models. And we've been doing that work already. So that's where we plan to invest more resources into for this year. How are you thinking about advertising in the context of search?

It's historically been an ad-driven business, but we're seeing a lot of AI product companies just charge 20 bucks a month, $200 a month, $2,000 a month, who knows? Is there a future where if you search for what's the best corporate card, Ramp is gonna show up at the top if they bid on that? Hopefully not.

I think that's the main reason why people like using the AIs. They think it's giving them something that Google doesn't offer. So I think the subscription revenue is very healthy and positive, like OpenAI is making 10 billion a year or something like that, right? Or 7 billion, something like that. So definitely that's only going to grow. And if AI start doing things,

not just answering questions or writing code, people will pay even more because they kind of think about it as hiring somebody. If you look at the amount of people, people pay for personal assistants, they kind of think about it as hiring somebody. If you look at the amount of people, people pay for personal assistants, chiefs of staff, personal chief of staff, estate managers, nannies, like, you know, it's a lot of money. And there are like a lot of people who can afford all that. And we're talking about doing something 100x cheaper and also economically 10 to 100x more valuable in terms of end output. So I think the subscription TAM is way bigger than what it is today. I believe you can do a lot of interesting things with memory,

where once you understand the user deeply enough, the user can probably trust you if you show them relevant sponsored content, as long as it's super personalized and hyper optimized for that user. Instagram has shown some stats where the engagement time on their platform reduces if they remove the ads, because that's the level of personalization of the ads. So if any of the AI companies can do that, I think that could be like a thing where brands could pay a lot more money to advertise there. So that's yet to be explored, but in order to crack that, you need to crack memory properly. That's kind of one of the other reasons we wanted to build a browser is like we want

to get data even outside the app to better understand you. Because some of the problems that people do in these AIs is purely work related. It's not like that personal. On the other hand, like what are the things you're buying? Which hotels are you going? Where are you? Which restaurants are you going to? What are you spending time browsing? Tell us so much more about you that we plan to use all the context to build a better user profile. And maybe, you know, through our discovery feed, we could show some ads there.

Makes no sense. How quickly do you want to launch Comet? Do you have a launch date? I was supposed to be out by now. We got delayed, I think, partly because we underestimated the difficulty of the project and partly because we try to do multiple things. And so we've tried to scope it down and we're aiming to get it out by mid-May. Awesome. Good luck.

Last question I have, you posted, bite dance of America is worth building. I'm assuming you're building the bite dance of America. I hope to be able to, but we need to earn the right to do that. So let's first like, you know, I want to succeed with the Comet browser. I think that'll be like the real second product of Reflexity. Everything else we launched, like the assistant

or the like apps, platforms is all like just different versions of the same thing. The Comet will be the first really, truly different product. And I think if we can do that a second time, I believe like we can and discover that's the other product we're trying though. It's within the app right now, but you could imagine spinning it out as a separate app too. You could imagine us like earning the right to do that. I think there's like I've spoken to the founder of ByteDance. And one thing he told me is they're structured in a very different way. It's not like CapCuts or TikTok have different growth teams. They do have their own growth

teams, but there's one team in ByteDance that takes care of infrastructure for all their companies, one team that takes care of growth for all their companies, one team that takes care of front-end mobile development for all their apps. And so they share knowledge across apps very quickly. It's insane. So that sort of structure doesn't exist in the US. Like I think Google is actually the closest to ByteDance of America, if you think about it. They have so many different apps in one umbrella,

but they don't share lessons. Like the YouTube team is so different from the Gmail team, so different from the Chrome team. And that's why it takes so much time to collaborate. So you need a very different leadership structure and a culture to make it happen in America. Yeah. That makes sense.

Every time I ask you one more question, I get one more question and this I promise is the last. That's how people use perplexity. Yeah, yeah. Without violating any NDAs, what's going on with TikTok, speaking of bite dance? There was a big flurry, everybody was submitting bids and then it's been quiet.

Is there any, do you have any insight that is not necessarily confidential? Yeah, what does- I really don't. We've submitted our bid. We never expected to be the leading candidate or anything. We're a very small company compared to them. Our bid was more interesting in the sense that everybody else who bid for them did not want to do anything to do with the algorithm.

But I felt like the core problem is the fact that like the algorithm is controlled by China in some form or the other. Even if they say, okay, the Chinese app is separate. Apps running outside the US and outside China, like European countries, are all sharing the same code. And they can get to like use that data and influence, you know, what feeds people in America see. So I think like that's where we wanted to do some real work. And the search bar is another place where we want to do some real work. We thought our proposal was pretty interesting, but there are some, you know,

we're not a data center company. We cannot guarantee them security and all that. Oracle can, so we'll see what happens. I think they've delayed the decision and it's probably gonna be coupled with the tariff situation too. Yeah, that makes sense. Well, thank you so much for coming on. Thank you for wearing a suit as well.

Yeah, you look fantastic. Thanks. You guys are you guys are killing it like uh thank you. Technology Brothers. I like the name. Yeah. It's awesome. Well, it's great to have you on uh fellow Technology Brother and come back on any time when you have news. Yeah, we'll talk to you soon. Thanks so much. Cheers. Bye. On Polymarket, who will acquire TikTok?

AppLovin has shot to the top of the charts, but on low vol, they have about $10,000 in a $2 million market in terms of volume, but AppLovin is at 20%. Oracle, Larry Ellison combined, if you consider them one entity, 21%. Oracle's at 12, Larry Ellison's at nine, Microsoft's at eight, Amazon's at eight, Tim Stokely at eight, Frank McCourt at eight, Alexis Ohanian at six, Perplexity is down at 4%,

right there next to Mr. Beast at 4% as well. Walmart at 3%, who we discussed earlier, would actually be the Ben Thompson choice. We should get ourselves in the mix. And I don't think we're- We should submit a fake bid just to go viral for a day. We're not allowed to bid on anything on Polymarket. No.

But we should bid on TikTok. Yeah. We should just bid on TikTok. It's just going to be, we're going to no more slop content. It's just TBPPN clubs the entire time. We considered doing a press release around it, but it never hit the wire. Played out pretty quickly.

Anyway, let's do some timeline while we wait for our next guest. Tyler says, scoop, I found TBPN's hidden warehouse. Nice try. And he finds a picture of the brother's supply. I wonder where this is. But we always love when fans share funny photos. You found us, Tyler. You found us Tyler

We are in the in the market for a new studio Hopefully moving into one soon and this this brick building looks like it's a fireproof been it's Lindy It's been around for a long time probably safe probably great to record a show that we love a fireproof Luffy says There was this news yesterday in TechCrunch. X Meta Engineer raises $14 million for Lace AI, a revenue generation software startup. And this was shaking up the timeline. Everyone was quote tweeting this.

Luffy says, hey, Lace, make 100 million ARR software for me. Do not make any mistakes. Fantastic prompt, by the way. Use it. Use it on any of your preferred model. It'll work every time. Why don't more people do this? I don't know.

It seems like one of those obvious. It seems obvious. Tealian sort of secrets. Secrets, I suppose, yeah. No, but Lace, I guess, is focused on maximizing revenue for your call center with zero extra investment. It's more just like the TechCrunch headline went weird. But again, TechCrunch is so back.

Yeah, a lot of startups don't generate much revenue. Yes, yes. So they're like, hey, our business is revenue generation. But yeah, TechCrunch is back. I don't know if this is accidental, but I feel like again and again, we're seeing more TechCrunch headlines post-acquisition. So they're doing well.

It's great to see. Great to see. Patty, I just wanted to give Patty a shout out because he's a friend of the show. He says he's proud to announce he's starting a profitable startup. VCs, my DMs are open. So yeah, if you want to get in touch with Patty, he's a free agent. He could be picked up at any moment. He's in Japan, live streaming. Could be picked up by a venture capitalist or company, but we love Patty on this stream.

This post from East Village Guy is 30 too late for me to lock in. My brother, Ray Kroc, was a 52-year-old traveling salesman when he met the McDonald Brothers. Get a grip. It's awesome. And I thought this was worth highlighting. There's so many great stories of this.

Enzo Ferrari is another. He was 45 when he started Ferrari. Granted, he had spent a couple decades in automotive racing. Founder of Zoom, founder of Workday, both 60s, 50s, when they started their company. Red Bull founder, too, right? Yeah, Dietrich. I think he was pretty old.

Founder of Monster, very old, which was very funny, because it's a very young brand. I think the Estee Lauder founder? Yeah, there's tons of these examples. Never too late to start doing your life's work and start a generational company. Just do it, why not? Yeah, Estee Lauder was 38 years old.

Why not just start a power law company? More people should do that for sure. Anyway, we have this bizarre TikTok or YouTube video. It's the third most viewed video on YouTube this week. It's an AI-generated short of a pug that saves a baby from a plane crash, and then they try surviving on an island. Can we play this?

It's... It's... It's... It's... It's... It's... It's... It's...

It's the future, folks. This is... This is entertainment now. It's great. Parachute. It does have a compelling narrative. Inciting element, inciting action. Turn of events.

Will he save the baby? The sound effects are brutal. It's really well designed. It's so optimized. It's got 400 million views. 400 million views, yes or hundred million views. Yes Feeds the baby starts cooking over the coconut cooks fish adorable Beads the baby some sort of fish do and then writes SOS in the sand

And then for some reason the military shows up and they have like guns The military shows up and they have guns and stuff. And they've got overnight success and they rescue the baby and the pug and then it just ends. And it's like the ultimate, you don't expect it to end so you don't watch it again. That is fine art. It's the future, it's the future. Again, clearly some human element in there

figuring out what's viral about it, but pretty sloppy, pretty sloppy. Little sloppy. Well, you know it's not slop AI grant batch one that's absolutely insane Jeff Huber who shared this so I didn't realize this is going back yeah so going off the initial batch this is crazy Lexity yeah was in there cursor I know chroma chromaambo. Whambo. Who else do we know in here? Pretty cool. PixelCut, Dust, Forefront. Just so early.

I wonder when AI Grant Batch 1 was. This is the Nat Friedman project, correct? Yeah. Very, very cool. Little under the radar. I guess, was it structured as a grant? It wasn't even YC style? Or did they take it?

No, it's an investment via no cap, no discount MFN safe. Okay, yeah, yeah, pretty standard. So pretty standard investment. And you can imagine they've done pretty well. Yeah, I think some other cool, I'm almost sure Julius went through a later batch. I saw some other folks go through, pretty cool. Yeah, Julius was in batch two.

We have our next guest here. Let's bring him in. You guys told us you yearned for the mines. So we brought the man himself. How you doing Ted? Chief miner. What's going on? Doing great, how are you John Jordan? Fantastic. Great to see you.

What's happening? You're looking great in that suit. Welcome to the show. Thank you, it's technology brothers. You need to dress up. You gotta dress the part for sure. And I love the map too. That's the only market map that I care about personally. Yes. This is

our target market. At least that is the market map. What's actually going on with that map? What are the different colors represent? Yeah, this is a geological map showing kind of the common rock types in a given area. And you can see the central and eastern US are not quite as exciting as the Western US and that's where all the minerals are. Interesting. Can you give us a brief overview of you and your company just to kick us off? Yeah, absolutely. So Ted Feldman, founder of Juran and started the company about a year

ago, we are building and operating automated diamond drill rigs used in mineral exploration. So I'll start out kind of high level, how does mineral exploration work and kind of get into what is the actual problem we're solving. So, basically building a mine is in many cases a billion dollar endeavor, incredibly expensive in order to justify this capping. So, you never really good understanding of what's actually going on underground. And so, you have this kind of decade long exploration process where you'll start out maybe geologists walking around, they're seeing some interesting rocks.

You can do geophysics, look for a magnetic anomaly, a gravity anomaly, or do some seismic surveys. You can do soil sampling, kind of pick up some, some kind of tiny holes, see if there's kind of trace elements of what you're looking for. But really, in order to understand what's underground, you got to drill. And the main type of drilling used in neural exploration is called diamond drilling or core drilling. This is basically where you're collecting cylindrical core samples of the rock anywhere from a few hundred meters to a kilometer or more underground, generally a few inches wide. You pull it up in three meter intervals. But really, once you collect these core samples, you send them off to the lab. The lab will tell you exactly what the composition is. You do that every foot or every meter across hundreds of holes.

You plug all this data into a 3D model, and then you have a 3D model of the subsurface. You can visualize where is the mineral deposit, see how large is the resource, what's the grade, the kind of percent of the metal you're looking for within that deposit, and then make a determination on whether it's economic to mine or whether you need to collect more data in order to make that determination. Answer the problem here. Go ahead. Before you go into the next segment, can you talk about the value chain? Is there different groups that are doing, you know, the core like research and then do they sell the rights basically say

like, Hey, this is worth spending a billion dollars, but like, we're not going to spend a billion dollars, like you should do it. And they sort of like sell access to it effectively. So the way this will normally work is you have an exploration company or junior explorer, junior minor, they either own the land outright, they have rights to lease the land, or they have some claim on federal land, but they have the rights to mine in a given area. And they basically have a hypothesis in geology that there is some valuable deposit underground. And they raise

capital primarily from public markets. Many of these companies go public extremely early on on the TSXV or the ASX. and they raise capital and spend most of that capital on drilling to actually collect more data. And so then this constant cycle of raising capital, spending most of it on drilling, analyzing those drill results, updating the geological model until they can either raise enough capital, raise a billion dollars in equity and debt to actually build the mine or what happens more often is sell the mine or sell the deposit to a larger miner that will actually have the money in the balance sheet in order to develop the asset.

And so you- Why public markets versus private? Is it just because you need to raise so much money? You need to be able to basically effectively market? It sounds like biotech. What happens with biotech companies going earlier out? Are these typically like penny stocks where they're just trading and it's something random. Mining is historically a penny stock industry.

We used to have small exchanges in Denver or Phoenix in the US, but in North America it's just dominated by Vancouver and Toronto where a lot of these exploration companies are based. Canada has a lot more capital flowing into mining than the United States does today. It's really just how it's been done historically. These investors are kind of smaller retail investors historically, they want liquidity and they can't just be called up for a private placement

if you're Joe with a hundred bucks to throw into a gold project. Did you ever, speaking of mining, did you ever join a call with a VC early and have them be like, sorry, I thought this was like crypto mining. That has happened a lot. It has happened less now than a year or 18 months ago, which I think is a very promising

trend. Got it. That's good. How much of the business is kind of just you need to take off the shelf technology and just go do the thing versus you need to build new technology. And, and is that more in like the hardware world or the software world, or are you just like going and doing the actual exploring? Like, can you concretize what you're doing?

Yeah. So I'll get into what is Jiren actually doing. So we are a drilling contractor. We are building rigs from scratch and, uh, and operating them for exploration companies. We're starting our first pilot with the Gold Explorer in Nevada in a little over a week. We'll be out in the field for that. We started building this rig about four months ago.

And so we get paid basically per meter that we drill for our clients. And so we're not taking on the geology risk. Let's just focus on the tech. Yeah, and why are you building the rig yourself? I imagine that is that just built, you're buying different pieces of equipment and then piecing them together. I mean, you've raised money, but not that much. Like I

imagine you're not reinventing. Plus, it's probably there's good drills out there. I imagine you don't need to build a new drill. Or do you? Yeah. So the initial idea was let's retrofit a rig, maybe save us a lot of money. And there was the avenue I was pursuing for about six months, we really had two options, we could buy a Chinese rig for less than 100 grand, we need to add a whole bunch of sensors. I talked to a lot of the operators. These things fall apart. They're not high quality. So we rolled that out. Or you could buy a Western rig for half a million bucks and you need to hack into the firmware and probably void a warranty, which you do not want to do on a half million dollar piece of equipment or partner with a manufacturer and figure out how to actually pull data from it. We tried that with a couple of manufacturers. They were incredibly slow. And all the manufacturers, they sort of have their own halfhearted efforts on autonomy. And so they didn't seem particularly eager to partner with us.

And so almost out of necessity, we had to design our own. And now the way this rig operates is fairly similar to every other sort of rig. All these drill rigs are basically two hydraulic rams pushing what is called the drill head, which is what provides the rotary motion to the drill rods into the ground. So all drilling is really, so you have a bunch of pipes that you screw together and then push and twist into the ground and leave a bit on the end to make sure you get a clean cut. And so we are, the off the shelf parts that we're buying is with the drill head, that's what grips onto the rods and rotates them. If the other part called the foot clamp, which just clamps down onto that bottom part of the drill string to make it easy to load a new rod in and then ramps to push

it into the ground. And then the structure is ours. And then in order to actually retrieve the core sample from the bottom of the hole, think about it like this. You have your drill bit, and then you have, which is a cylinder. That's what our logo is actually. And then you have drill rods coming up from that. But inside of that bottom rod, you have another tube called the inner tube. There's a latch on the top of that. So basically once that inner tube fills up with rock, when you've gone down five feet, you can grab a tool called the overshot,

lower it down on a wire line, it latches into place. You could pull up the inner tube containing the core sample. And then that's what you send to the lab to be analyzed. How mature is the venture-backed mining market? Like are there market maps that exist in our- There's too few. And were you, when you're surprised everybody wants to go to space,

nobody wants to look beneath our feet and go down, has it been surprising how little investment has gone into the actual technology side of the industry? There's been very little surface area between mining, and particularly Silicon Valley historically. little investment has gone into the actual technology side of the industry? There's been very little surface area between mining and particularly Silicon Valley historically. Australia has a bit of a more mature mining technology ecosystem, but not nearly as much capital as we have over here. And so there's been a few billion dollar, multi-hundred billion dollar mining tech companies

over the last decade or so, but just a few. And like mining overall is a two to three trillion dollar industry, kind of overall market size. Mining tech is a small portion of that. But it's a difficult industry to sell into. It's really not so difficult to start a tech company here. Building a mine is incredibly capex intensive, and you're basically making a bet on technology early and then utilizing that equipment or software system for a decade plus. And so these companies are risk-averse. They don't want to bet the farm on a new technology.

Where I think we come in, there's a few other companies with a similar model, is as a contractor. So we're just replacing a separate service provider and any sort of innovation that we're creating is done internally. So we are more efficient, safer, and we're cost-effective to a contractor because of the autonomy that we're building. But it's really no risk to the customer. We get paid just like any other contractor to them. What's been the industry's reaction to the trade war?

China very early came out and said that they were restricting access to various rare earths. What's been your read on the situation? How are US players kind of reacting? Yeah. Rare Earths are very close to my heart. Prior to starting Turin, I worked for MP Materials, which operates the only rare earths mine in the United States for about a year and a half.

Their mine is in California, about three hours away from where we are right now in LA. MP produces about 15% of the global rare earth supply. They refine about half of it domestically right now. They announced last week that they're seizing shipments to China, so keeping it all domestic going to Japan or Korea, which they have some offtake with, through Sumitomo. I think it's certainly a tailwind for the Western producers, but there is fear because we don't have everything in the United States. Rare earths, we would be almost self-sufficient on, but we really need to ramp up the processing.

The problem is that within this group of rare earths, we would be almost self-sufficient on, but we really need to ramp up the processing. The problem is that within this group of rare earths, about 15 different elements, you have some rare earths that we have a good chunk of at Mountain Pass, like Neodymium and Prassiodimium, but then you have heavy rare earths like Turbium or Dysprosium, which we do not have enough of, and MP materials. It's very heavily weighted towards these rare earths, and there's very little of these heavy rare earths. And so we really need to partner with countries like Brazil or Vietnam or the two that I point to for rare earths that are potentially allies and maybe we'll get closer to them over the next few years. We're going to need to import. There are no other decent rare earths deposits in the United States

that we can just spin up production at. That we know of. You never know. We could find a gas at long history. I see a bunch of gaps in that map in Ohio. We'll find rare earths there, I'm sure. That's where we come in, is that in order to find that deposit, you've got to spend $100 million to drill it out. Yeah, you've got to drill everything. Every suburban neighborhood, just drop a Durin miner

in the back of my backyard and start finding stuff. What we'll do first is fly my planes over to do some sort of magnetic survey that USGS is a pretty cool program for earth MRI where they're mapping a lot of the country with titer spacing that they have previously with these geophysical surveys, but we need to be doing a lot more on that because that's really the top of funnel that narrows down the potentially, uh, mind of the sites. Sorry. Uh, can you talk a little bit more about autonomy? I'm seeing the first prototype rig can core 300 meters around a thousand feet deep,

two and a half inch diameter, and these rigs can run unattended for something like two to three years. So what is the math on that? Is the rig moving around or does it just take that long to get a single core sample out? Yeah, so basically I'll tell you kind of how it's done today, that is the rig moving around or does it just take that long to get a single core sample out? Yeah, so basically I'll tell you kind of how it's done today, what we have now and then where we're going to be in 12 months. So today you have a rig these things weigh into 10 tons, you're normally track mounted, so basically on tank treads.

You have you put them on a truck as close to the side as you can, then you have a guy with a remote control driving it in the rest of the way. You generally have three operators on a rig, you have the driller, he's the guy listening to it and looking at a bunch of gauges and he's really sort of interpreting what is the kind of rock that we're going through that through at that time. And from that adjusting RPM, the amount of weight applied to the drill bit, the pressure of a fluid that you're pumping down hole to clear the cuttings and keep the bit cool. So you kind of constantly adjusting these parameters. Then you another one or two guys called helpers and they're doing a lot of

the manual work. They're loading the rods into place because you're normally they're using five or 10 foot rods. They're grabbing the over shot, lowering it down to pull up the inner tube, tapping on the inner tube with a hammer to actually take the core out, putting it in boxes for the customer, threasing the rods, adding additives to the mud mixture because you got to adjust the viscosity of the fluid that you're pumping down hole. And so you really have this sensing problem, this controls problem of adjusting these drilling parameters. Then you have this more so robotics problem of just grabbing the rods, putting them into place, grabbing the core samples, et cetera. So on this first rig, we have basically

the ability to collect a whole bunch of data, but everything that's going on on the rig at any given time, we're going to use that data to build a sort of V1 autopilot system deterministic at the start, move to machine learning when we get enough data. There really are not data sets available for this online. And so we've got to do a whole lot of drilling before we can actually get to full autonomy. So follow up, how long does it actually take to drill a thousand feet deep? Yes, so a good shift is about 50 feet in a day. And so 12 hours, 50 feet, a thousand foot hole, 20 shifts, 10 days. And that's traditional, like, 20 shifts, 10 days.

And that's traditional, like, you know, human operated. So that's like a month. Right. Yeah. Exactly. One hole. Right. Wow. Yeah. And he lives in about 100, $100 a foot. Yeah. Okay. That's a lot. Interesting. How are you? So really, what we're trying to do is we're we built this first rig manually operated at the start. We'll have some automation in terms of rod handling and kind of a V1 of this drilling

parameter adjustment system. But then on the next version, which we're going to start building in just a couple of months, we'll kind of add on to the rod handling system to actually be able to cover the core sample, design our own mud mixer that can dump in the additives separately, and then you get most of the way there in terms of kind of removing these jobs on site. And it's really, yes, I think we can save a lot of money because labor is incredibly expensive here, but it's more so about availability. We are in a workforce crisis in the mining industry right now. I heard someone say, well, I like that we don't have an autonomy problem in the mining industry, but labor problem, just don't have enough people.

And so that's why it's awesome costly. Is Minecraft not providing the pipeline that one would vote? No, I think the problem here is you play Minecraft when you're like 8 to 14 or something, or maybe later. And then you have this kind of eight year gap between starting high school and finishing college to where you're not involved in the mining industry.

We need Minecraft for adults. I have to ask, how are you so goaded at marketing? You have one of the most unique hard tech brands. Every time, I think it's very common for people to copy what Anderl does. And it's very hard to do something that feels new and fresh and super opinionated. And I've loved your out of home ads.

And this segment is brought to you by AdQuick. But I think you've been extremely strategic. I saw this hiring billboard that you had, that you can't have rocket science without rock science and sort of placing these strategically in Hawthorne. Where does that come from? When did you figure out that you had a knack for this? Because I'm assuming your team helps, but oftentimes marketing this good typically is very founder led.

It's we've got an incredible team. My head of operations has really helped a lot with the marketing. We have a few incredible designers that help us out part time with all this as well. Hiring is the lifeblood of any company, particularly a company with as bold a vision as what we're trying to accomplish. And so we need to get the word out and have kind of this massive funnel of people that have heard of us. Some of them will be interested and some of them we are going to want to hire.

And so I think we need a cool brand for people to hear about us, both in kind of the, we have the billboard across from SpaceX, obviously we want to pull incredible talent from SpaceX, but also like there are very few companies in the mining industry that really care about, I think they don't care about the brand. There are very few that are particularly good at creating a cool brand. And so like we get like we get great engineers in LA reaching out to us because they like our stuff, but even more so drillers and geologists in the mining industry who are like, you're

the only cool company in the mining industry. I mean, hardly put anything out yet. And so both kind of both of those sides, the engineering, and for kind of the mining customer and talent acquisition, we want to be very intentional about it. And there is much more to come. Once we get this first rig in the field in about a week or so, there'll be some really cool videos of us actually drilling and showing some hardware in the field. Love it. Can you talk us Um the path to full autonomy?

I imagine it's like a walk crawl or crawl or a walk run situation Is teleoperation a big deal here? Um as you get towards a fully autonomous autopilot system Yeah, so it's we need a whole lot of data for this. And so it's mainly controlled at the start. You can have a driller there with an iPad or laptop. The infrastructure is there. But it's really like a Tesla full self-driving system. Like you build the software to actually control it.

A drill by wire system is what we're calling it. And then you need data. And so we're going to have a driller onsite operating it, initially collect this data. We need them there to actually test the robotic side of this in case anything goes wrong. And I think we're on handling, we should have found over the next few months

in the extraction system by the end of the year. Those are a bunch of little stuff like how are you gonna grease the rocks, figure that out. We're definitely additives into the mud mixer. And so we're going about this incrementally. We'll have three guys at the rig initially, good out of two,

then hopefully have one can operate at a safe distance. And if something goes wrong, bring another guy in. But we're never going to get to a point where you don't need at least someone on site, at least not over the next five years, because you need a flat surface to drill on. So you have guys out there with dozers

clearing these drill pads. You need to dig a sump pit to put the water into after you use it. You need to deliver your consumables, your water, your fuel, you need to pick up the core samples to deliver to your customer, the exploration company. And so there's always going to be things to do. You need someone to get the rig there and then maintain it. But the point is we don't need someone there listening to the rig and loading rods into place. There are better uses of their time

operating a fleet of rigs. Two weeks ago, it came out that China was limiting rare earth exports. Chamath chimed in. He said, this may be a good moment to let everyone know that I control one of, if not the largest, rare earth supplies outside of China. At full capacity, it can be 25% of what the world needs,

all located within countries allied with the US and the US itself. A lot of people push back on this. They said, okay, what's the company? He said it was in stealth. I wanna give them the benefit of the doubt and say, you know, it sounds very, it sounds almost unbelievable that a stealth company

could control 25% of the world's rare earth supplies. Is that possible? Could there have been some sort of roll up behind the scenes? What was your reaction to that exchange? Perhaps. I haven't heard anything about Chamath's involvement in any rare earth project beyond he helps back Campy Materials five or so years ago.

I haven't heard anything. Maybe he does. I hope he does. That'd be great. He does some massive errors mine that, uh, that, yeah, myself and my friends were rare earths analysts, uh, haven't heard of. And so I want them to surprise us, but I haven't heard anything. Sure. Cool. Can you talk about the challenges of putting a sensor a thousand feet underground? Like I just imagine if it there's dirt and grime and crust and whatever else is down there, plus a diamond tip drill churning everything up.

Even putting a thermometer down there is going to be difficult. How are you actually collecting data? Does this exist off the shelf? Is this something oil explorers do? I imagine that's mature? So the short answer is we're not collecting any data underground at this point everything We are measuring you can measure from the surface just like the human does because the humans listening to everything and collecting that data from above Exactly. I've got it. Okay, and so the vibration we're not even using vibration right now

So you can measure your your weight on bit basically how much force are you pushing into the ground with, your RPM, how fast are you spinning, the pressure going into the hole, your rate of penetration, just how quickly you're moving to the ground, your torque. You can do that through a secondary pressure reading. You can't put sensors down whole. There's a whole field of study within the gas industry primarily called MWD or LWD, measurement while drilling, logging while drilling. You can put sensors down hole, it's something we're gonna be looking into.

One of the things that you'll do when you're doing this sort of drilling mineral exploration is you can send on a survey tool that can tell you sort of exact position because your hole, you wanna drill it straight, it's not always gonna go straight, might deviate a degree or two every 100 meters. And if you're trying to hit a 50 foot wide target,

500 feet underground, you might miss. And so making sure you know exactly where the tip of the drill is at all times is paramount. So you can lower a tool down either every run or every 50 meters really whenever you want. And that'll tell you your exact position, which is a gyro probe. And so if we can integrate that into our corporate

or down hole, that would be cool. Not doing that yet. Or doing some sort of EM survey or XRF to scan the core or the sides of the walls as you're actually drilling. That'd be great, we're not doing it yet. It's gonna be done soon. Are cave-ins a problem? Like as you dig down, you get, you know,

you have a two inch hole that you're digging. And then if you pull up the rods to send something else down, and then all of a sudden it collapses on itself're digging. And then if you pull up the rods to send something else down and then all of a sudden it collapses on itself, that seems like a problem. You're thinking like a driller. That is a huge problem in this space. Basically what you do, as you're drilling through the first,

call it a hundred feet of unconsolidated sediment or loose rock in the surface, what you'll do is you'll drive casing. And so casing is basically a wider diameter pipe that you'll drill down with and then drill through that hole. And that casing is basically a wider diameter pipe that you'll drill down with and then drill through that hole. And that basically prevents if there's some sort of collapse near the surface, it goes around the casing and maybe your casing gets stuck, but at least it's not around your drill string and that can continue drilling through that.

The problem is what if you don't drive the casing deep enough or there's some sort of fracture down hole, like 500 feet down or whatever that does collapse in and you'll basically what you're trying to do then is try a whole bunch of different RPMs, pull up with maximum force, but sometimes you get stuck. There's really two options. You could try to, if you try to guess where the cave-in is, you can actually use tools to cut the steel above that and just recover everything above that. You lose some steel in the ground, a well, around 10, 20 gram at least.

Or you can say you're stuck, but you can actually drill through it. So there are tools that you can literally drill through your previous tools that were down hole at a smaller diameter. And you should get some steel in the inner tube, which is pretty cool to see. It lets you continue the hole.

You don't have to abandon it. You're decreasing the diameter and that is valuable data. And you are still going to lose some equipment. And so you basically don't want to push it too hard to avoid risk any cadence. Last question on my side, just curious, how has the, I'm assuming throughout history,

the sort of diamond drill bits were just actual diamonds that people pulled out of the earth, and then at some point they were lab grown, or were they always? So what's the history there? Yeah, so the way these jobets work is you have a it's primarily iron to the soft iron matrix with diamond particles So poor and pregnant into it and so you can like kind of see I wish should have brought a job But over here to show you all that would have been cool You can see the tiny diamond particles. It looks like glitter

On it. Yeah, and then And then as it cuts the diamonds, the hardest material on earth, but they do wear, they dull. And so the bits are designed such that as the diamonds dull, the iron wears at approximately the same rate to reveal new sharp diamonds. Very cool, very cool. Last question from me, Armageddon.

In the plot of Armageddon, they say it's too hard to teach drilling to an astronaut. They got to teach going to space to the drillers, to the miners. Realistic or unrealistic, based on what you know about how complex mining is, would you have trained the drillers to go to space, or would you have trained the astronauts to drill?

I think we're doing both here. We are teaching SpaceXers how to drill and drillers how to participate in a high functioning engineering organization. So I think you got to do both if you're trying to build a large organization and manufacture thousands of these rigs over the next five, six years to become a leading drilling contractor. They really didn't bring any astronauts on that trip. It's all drillers. No. I don't think that's realistic.

Anyway, this is a fantastic conversation. Thanks so much for joining. Ted, I'm very excited for you and the team. It's been awesome watching you guys over the last few months and Congratulations on all the progress in the new round We're excited to be on just a quick message everyone. We are hiring jobs at your in comm brilliant engineers Please apply or reach out to me. Thank you all for having beautiful. Have a great rest of your day. Talk soon. Bye Let's go back to the timeline a Durin did run a great out of home ad, brought to you by AdQuick.

There's also news on the timeline about a Series A that was announced by Artisan, apparently a white combinator company. They announced their Series A with a massive billboard. And if we can pull this billboard up, it's the previous slide, I believe. Celine is just commenting on it. But Tiege says, what's going on here.

And it's the two founders there. And are they- Are those the actual founders? I thought they were- Those are the founders. Those are the founders. The founders are Jasper Carmichael Jack and his co-founder Sam Stallings,

a former IBM product manager. But the way they're looking at each other in this photo makes me look like they're in love or something. Maybe they're married. It's possible. But I don't know, we often look at each other like that longingly and fondly during photo shoots, so it's understandable.

But very funny to put out a billboard about your Series A. With your own face on it. with your own face on it. But I guess, you know. With no information about what the company has. Well, I guess they have the whole team there, presumably, at the bottom. Or are those the AI SDRs? Because I think this is an AI business

development representative. Yeah, I thought these were just two other AI employees. They're not. Those are the founders. Those are the founders. They're stoked. Yeah, every once in a while, the timeline starts talking about taste.

This is a very specific kind of taste. I mean, also look, founder, absolutely Jack, the guy's diced. We love it. Let's hear it. Let's hear it for Jasper. Guy is looking, looking peeled. Activate golden retriever mode.

TechCrunch, White Combinator Day One Ventures, HubSpot Ventures, Oliver Jung Fellows Fund participated as well. They closed a $12 million round in September, and now they got a $25 million Series A. They're running a marketing campaign, Stop Hiring Humans. Very viral. I think they just get it. They get it.

I think they get it I get it they're playing 5d chess yep they're gonna frustrate a lot of people and this they knew this billboard would go by Celine totally post about it this Celine CEO of loyal says I cannot believe a startup bought a billboard on the 101 to advertise their dot-dot-dot series a and 671 likes and so yeah out of home advertising consistently underrated we've said this go to ad quick comm out of home advertising made easy and go yeah and measurable and go go viral do as long as you can come up with something that's gonna infuriate enough people on the

timeline will get attention. Andrew McCallop says, I think company towns are going to make a comeback. We've been exploring this. We've been exploring a town. Yeah, I was actually thinking about this. So I think if things go really, really well for TVPN, what we're doing here in Los Angeles,

a lot of people say, oh, why are you building in Los Angeles? Like you should be in Silicon Valley. And I think that we could potentially make Los Angeles like the Silicon Valley of media, like a Silicon Valley of television almost. And we could create a whole boom. And I think in a number of years,

you could see some massive media companies. Entire film and television kind of industries bringing up. It's totally possible, right? It's totally possible. And I think it could all start right here and so what I would say is to folks is like let's check back in five or ten years see the market cap of all the media companies that are built in Los Angeles and you know maybe it's in the hundreds of billions if we add it all up I it could it could become possible

it could become possible yeah we are in a company town. I think John's onto something here. Yeah, we are in a company town. Los Angeles, I call it the Silicon Valley of news. Yeah, it's interesting. I mean, it actually is very, I think the experience of living in Los Angeles has become worse as the entertainment industry

has struggled. The number of restaurants that can be supported has just gone down. The interesting thing about this post is that he's saying specifically company towns. So there's obviously industry towns. New York is a finance hub, Silicon Valley is a tech hub, LA is a media hub, Silicon Valley is a tech hub. LA is a media hub.

Miami is like an NFT hub. But company towns. Ripley is doing this for Foster City. They are. Oh, I didn't know that. Yeah, yeah, yeah, yeah. That's right. That's right.

They left SF. They went to Foster City. They were like, we're going to focus. It's nicer to live here. Meta and Facebook were kind of doing that in Palo Alto, to some degree. They were building housing for employees and stuff. But I think what he's getting at is that things like Starbase, where a company can't just be in the hub of a main city, so they go somewhere really bizarre and off-grid, and then the

infrastructure builds up around that. We were talking about the Stargate facility. If $500 billion really does pour into one data center, there's going to be infrastructure around that. Welcome to Abilene, Texas, Abilene, Texas is going to have there's going to be people that are like, yes, it's going to be low headcount because it's just data centers. But like, you're

talking about so many data centers, there's going to be people that are working on the air conditioning, working on the power, they're going to need an air wand for sure. They're definitely going to need an air wand. Um, and so yeah, I was, I was talking to a real estate guy. I was like, maybe you should just go to Abilene Texas and then just start doing deals because they're like the construction is going to be going on for a decade. There's going to be a lot of people that settle there after the fact.

They're going to need an air wand. You could sell them the property for the Arowan. They're gonna need gas stations and all sorts of different, there's gonna need to be a hardware store, right? They're gonna need hammers, all these different things. So it'll be interesting to see if this happens. I think it'll be a long, long journey to get to new company towns, but I love that. We have a post from Adam Rosenblum.

Says, my nomination for the next TBPN AI Deep D deep dive live from the Forge of Fine Tuning, the MCP monastery, the eye of AGI, the weights are sacred, the context is cash, the vibes are autoregressive. Tune in now. I messaged Adam, I think he's over at Cal, I said maybe you should write for TBPN Open invite Adam you absolutely cooked and we love being live from the eye of a GI. I like it I like it. We we yeah, we need to we need to spice up the intros Keep iterating on them. I think people enjoyed the Institute of iron the palace of pump the hall of hypertrophy But there will be more we're doing a crypto day. We'll have to come up with some new jingles for that. That'll be fun. Anyway, Google co-founder Sergey Brin pulled up in downtown Miami in his 450 million dollar...

Founder of No. 450 million dollar, 465 foot yacht. That's million, 465-foot yacht. That's less than $1 million a foot. Yeah. At that price, it's a steal. They're giving these yachts away, to be honest. I mean, it's a lot of money, but it's a lot of yacht. It is a lot of yacht.

And you can't sell a house or a midsize series B company. That's right. Mike, Solana says, I honestly can't figure out why everyone is attacking him for this. Sorry. Yachts are awesome. Pirate wires will absolutely have one in a few years. I completely agree with that. Yes, I'll be laughing there champagne in hand before the waving flags when you come for us. Enjoy your bike ride.

One of the greatest posters of all time. He cooked them, John. Generational poster for sure. Fantastic. Good friend of the greatest posters of all time. He cooked them, John. Generational poster, for sure. Fantastic, good friend of the show. Yeah, I love it. Beautiful yacht, and why not? I mean, Google co-founder Sergey Brin has generated probably a trillion dollars of value

for the economy, right? So enjoy your little yacht. I support big tech. I love big tech. I would defend. I would take a bullet for big tech. Theory get a, I support big tech. I love big tech. I would defend. I would take a bullet for big tech. Theory would take a bullet for big tech. I would scale a castle wall for big tech.

I would fight in a trench war. I would dig a tunnel under a castle with a spoon for big tech. I would work years in the mines for big tech. Yes. I would fight a decades long trench war. I would re-enlist in the hundreds of years war. We got our next guest. We got our next guest. To join us. Welcome to the

studio. How are you doing? We are doing well. Hey! We got both of you. That's fantastic. What's happening? I'm so happy. Welcome to the show. You can ask him about how it was. Yes, yes. I mean, maybe that's a great way to start. We're huge fans. We were just singing Big Tech's praises, saying that we would do anything to support big technology. And yet you left Big Tech. Why did you leave and what are you building now? We're building physical intelligence. We want to build a model that can control any robot to do any task. This is something I did explore in Big Tech before. It's just much more fun to do it in a startup.

Way more fun. Also a little quicker. A little quicker. A little faster paced. Yeah, I mean, the pace has been crazy. If anything's become clear in the last few weeks, we need the robots now. Yes.

We can't really wait 20 years. And if Big Tech was fully responsible, we probably would have to wait something like that. Yeah, for sure. So can you walk me through the most recent announcement? I saw the video. Fantastic. But how would you break it down in terms of what

the milestone represents? Yeah, the biggest challenge in robotics so far hasn't really been agility or dexterity, what the robots can do, but then generalization. Kind of similar to what we've seen in language before, where it was really, really hard to get it to do tasks where you just ask it to do something and see if it can work.

And what we tried to do for the past six months or so is to get to the next level of generalization for these models for robots. So the challenge we set for ourselves is to take a robot to a completely new home it's never seen before and ask it to do a complex long horizon task, like clean a bedroom or clean a kitchen. And there is so

many details that go into cleaning a kitchen that you need to understand when you're in a new home. And you only start appreciating it when you try to do it with a robot, where you know, everything is different. Like the countertop looks very differently. You don't know where the drawers are, you don't know how to open them, you don't know where the objects are, you don't know where to sit. Even when I try to wash dishes in my house, I'm always I'm like, I can't where's this? Where's the spot? I don't know where the soap is. When I try to wash dishes in my house, I'm always, I'm like, I can't, where's this,

where's the spot? I don't know where the soap is. Where do I put this? So, not even easy for me. You can't even realize. Yeah, I guess. Really, really hard. And on top of like knowing all of those things, then you also need to connect it to motion. You actually need to get the robot to do the right thing. Um, and it turns out that with, with PI, uh, oh five, which we, which we just released yesterday, we can do that and it doesn't work all the time. It's not that I can just give it to you and it will work in your kitchen every single time, but it works. Why often quite well.

So we bring it to a new home and it can do those things maybe like 50% of the time, sometimes 80% of the time. A big increase from 0% of the time. But yeah, a big increase from what we've seen before where the previous state of the art was basically if you want to show a robotic demo, you need to collect data in that specific environment for those specific tasks and that's where you show it. But now we can for the first time bring it somewhere else and it kind of works, it understands what it needs to do.

Do you think that consumers will generally be more patient around reliability with robotics? Because if I, you know, let's say I have some type of robot in my home and I say, hey, do the dishes, right? And 50% of the time it does it perfectly. And like, you know, the other 50% of the time I have to kind of interject. Whereas if I'm like booking a flight and only 50% of the time it does it perfectly and like, you know, the other 50% of the time I have to kind of interject. Whereas if I'm like booking a flight and only 50% of the time it like books the flight,

it's like, well, I'm just going to do it myself, right? Because like, it's only going to take me a minute, whereas like the dishes could take 20 minutes, right? So how do you think about kind of the sort of threshold of reliability in order to like really deliver value for consumers? Yeah, I think that, like, we don't think right now about deliver value for consumers. Yeah. I think that we don't think right now about delivering value for consumers. And it's kind of why we structured the company the way we did. We're a research lab.

We're trying to solve this problem of physical intelligence. We really like these consumer-oriented tasks. And I think people tend to as well, like when they think about laundry being folded for them. I think there'll be a point at which it gets good enough that we can deploy it to consumers. But it's not going to be like 50%. It's going to be closer to 98, 99%. And there, I think we can harp on self-driving cars where there'll be a period of interventions, right?

Like if it doesn't work, it's not that it just will stop and do nothing for a while. We can have a human tele operator intervene and finish the task. But I think the other cool thing about the home and consumer use case is there's so much that could also just happen overnight. There's like while you're sleeping, your laundry is folded, your, your, your meals are cooked for like the, you know, the prepped for the week ahead. Your house is tidied. So consumers still a little far away, but making a lot of progress. Can you talk about the, uh,

just the path in terms of the underlying technology to go from a Roomba, we're pulling up the video here on the stream of what you've actually built. What were the foundational turning points in terms of the, like the different models and different breakthroughs? I imagine the transformer was really important, but there's probably a ton of other developments that excited you and now is the time like we're ready to go. Yeah, there's been a lot of things that we are we are building on top of things like

transformers, things like vision language models, the concept of pre-training and post-training. vision language models, the concept of pre-training and post-training. A lot of those things transfer to the robotics world, but they're not as well understood. We are still in the process of figuring out what that recipe should be like. We kind of have to rediscover some of the steps that language people had to do initially, and see how we can map them onto the robotics world. We don't have the privilege of having an open internet full of data. We need to collect the data ourselves,

which on one hand is a big challenge. Like the data isn't there, you can't trade nearly as fast. On the other hand, it also gives you more freedom in figuring out what kind of data is the most important and what data to collect. For this particular 505 advancement, what we had to do is one, collect very diverse data set,

large diverse data set that involves not only model manipulators in homes, but also static robots in the office or data of the internet. And it turns out if you collect very diverse data across many different tasks from many different form factors, they all contribute to each other and they contribute to a better understanding for the

model of what actually is happening and how to utilize all of the data to figure out what to do. So that was a really, really big component. And then there's also a lot of architectural things, a lot of details that we need to get right to make sure that we take full advantage of that data. Interestingly, most of the data is actually not the model manipulators in many different homes, it's a very, very small percentage of it. So it gives us also a lot of hope that we can leverage the data off from the internet or from other platforms where it's easier to collect it to get to that kind of generalization.

Can you talk a little bit about simulation, like data generation through simulation? I imagine it's very easy to procedurally generate like a million different floor plans or a trillion different floor plans to try and navigate those in, you know, kind of two-dimensional space. But at the same time, when you get into the manipulating of a sheet, all of a sudden that's a physics calculation, it's probably harder to simulate. It's not like with self-driving cars, there's Grand Theft Auto you can train on.

Maybe there's a game where you clean up your house, but I certainly haven't played it. How effective has simulation been in generating data and is it useful? Is that a viable path here? Yeah, it's been so far really, really useful for locomotion, for robots walking around. Yep.

And the reason for this is that for that kind of problem, the main difficulty is modeling your own body. Like, how do you place your foot? How do you walk? And that you can do once when you model your robot really, really well. And then it works. It works across many different terrains. You can easily randomize that and figure out the gate that is robust. It hasn't worked nearly as well for manipulating objects

or working with your hands. And I think the reason for that is then the difficulty isn't about like, how do you move your hands? It's more about the world that you're manipulating. And that is much harder to simulate, you don't just do it once, like every object you interact with is different, and you have to model each one of those. And it's really, really hard to

figure out all the different physical parameters to make it to make it good. So and this is kind of the data that is the most important the data of physical interactions, because this is the data that is that is the most important, the data of physical interactions, because this is the data that is not on the internet. This is the data that is not even describing language. This is something that comes really natural to you. You just know how to do it. You don't even sometimes know how to describe it in words.

So I think it's kind of like a really bad combination where it's the hardest thing to do for SIM and is the data that we need the SIM the most for. And what we discovered so far is that basically looking at the past successes of machine learning of AI, it seems that the best successes are where you take real world data and large diversity of that data

and learn directly on that. You don't try to find some kind of proxy or some kind of simulated environment that reflects what you actually want to do. You just go after the problem head on. And that's what we're doing here. So we're collecting a ton of data ourselves in the real world. We can collect very diverse data this way. It's also very easy to collect it across many different scenes, many different objects. We don't need to create them in SIEM. We can just buy them and bring them in and start interacting with them. And that so far has been actually easier than we had initially thought. Yeah. I mean, you say you're collecting a lot of data, but I imagine there's only so many of those

robots in that demo video that you can manufacture. There's only so many houses that are like, yeah, come try your 50% robot in my house. Um, is, is, is that a key, uh, is, is that scaling as you'd like, or, or, or, or is this more like you're going to build a physical, uh, you know, demo, like demonstration unit, like, uh, and then be manipulating it in a warehouse. Or is the plan to be more like, let's roll this out and just have beta testers kind of dog food it for us? All of the above. Basically where we find there's benefits to scale

at this stage, we'll scale it, we'll figure out a way. And whether that's producing more robots, giving them to people, whether it's scaling up our operations team and the folks that tele-operate these robots ourselves, whether it's going out and commercially deploying these into environments where they're doing economically useful or viable tasks. The training data set collection will do it.

We also think there's so much though to do on just the algorithmic development that can make the data far more useful, that can reduce the necessities of scale, but we're structured such that we can go and pursue every avenue required. That's awesome. What you guys both mentioned there is,

that was one of the big questions before PIO 5, where it kind of was unclear, do we have to visit million homes? Do we have to visit hundreds of thousands? And at some point it becomes kind of not feasible or really, really hard, and maybe we need to find a different path. But so far we've been quite surprised

by how few different environments you need to see to be able to generalize to a new one. That's awesome. We actually got really reassured that this path could really work. Would you guys like to see way more early stage robotics companies? It feels like there's the Optimus, the One X,

you've got figure making noise. But it feels like we just covered this, I think, Monday, the Chinese humanoid marathon. I'm sure you guys have all of that. They've got a lot of people working on this problem. It seems like there's a tendency in venture to think that, okay, there's a bunch of heavily funded players now.

I shouldn't go build in that space. But at the same time, when you look at some of these TAMs, maybe we should have 10 times the amount of early stage robotics companies getting started. It's extremely early. We work with, I'd say probably most of the new robotics companies starting in the US and abroad. If you're starting a robotics company, reach out to us. We'd love to work with you. You can build the body will build the brain. But yeah, we need to see a lot more robotics companies, particularly in the US. That's awesome. I want to talk. Did you ever interact with the Google arm farm?

Yes. Yeah, one of one of my co-founders actually started with a project. I have a feeling Do you have your own version of an arm farm or can you describe for people that might not know? What was the genesis of the arm farm? What was the purpose? What was the takeaway and is that does every robotics need an arm farm or is it just you or and what will that look like in the context of what you're building specifically? Yeah, so back then that was a few years ago. The idea was that for robots to learn, to acquire those kind of skills, to manipulate the world around them, you can't really prescribe it. You can't just code it all up. The world is too diverse, you can't have a lot of

if statements describing what you should do in every single situation, they need to learn it the same way as we do. And the idea of the arm farm was to set up many different stations where you have static robots, static robotic arms, where they just practice and they learn from experience. So in that particular case, they were trying to learn how to grasp objects, so they just practice and they learn from experience. So in that particular case, they were

trying to learn how to grasp objects. So they just had a bin in front of them with lots of different objects that are very diverse. And the arm was just going down and trying to figure out how to grasp it. And over a long period of time, and to gather enough experience to actually learn from it and get and become really, really good at grasping objects, like remarkably, remarkably good, andping objects, like remarkably good, and way better than any kind of prescribed systems

that people design by hand. And on one hand, it was a big success because of that, because it was clear that this learning approach is something that can truly work and understand the nature of grasping and truly nail that skill. On the other hand, it was also disappointing in that it took really long time. It needed a lot of data and especially a lot of data at the beginning

was kind of just like the arm wandering around and not knowing what to do. So it seemed like a lot of that time was just kind of wasted with the arm figuring out the simplest things. And one thing with PIO 5 that we are really excited about is that we are now at the stage where the robots kind of get the sense of what they should be doing in the environment. So they're no longer in the space where, you know, you just like arrive in a new home and you start with just like moving your arms around, not knowing what to do and hoping that you you do something that is useful. And then you learn from that.

You start at a point where you kind of know more or less what you can do. It works some of the time. You just now need to get it to work every time and really, really well. Can you talk about the path to, or the importance of end to end learning in the context of robotics. My understanding is that teleoperation is great, and as long as it's economical, we should do it. And then having a deterministic code, like, you know, a control system that's written in C++,

that's also great, as long as it works. It's sometimes more debuggable. But the reason that we wanna get to end to end AI systems is that then you're on the scaling law, then you're just data bound and the more you can manufacture, the more you can produce the actual robots. You're on this flywheel and you're now bound

by actual productive, you know, getting the cars on the roads, getting the robots into the world the roads, getting the robots into the world that will naturally create a flywheel. That's what everyone's hoping for in self driving. But but what does that path look like now? And how ridiculous is it to claim that and and robotics will be here by the end of the year or something like that?

So and then robotics is already here. Everything we've shown so far is fully end-to-end where you take camera input in and few other sensors and output actions directly. I think there's another reason to do end-to-end learning, which is this is I think the only thing that has a chance of working. If there was a way to just pre program your robot and write a

really good C++ codes to get it to do all kinds of different things like folding laundry, we would have done it long time ago. That's not for the lack of trying many people have tried it for very, very long time. There's just the world is too complex. There's too many things that you will never see you will never predict. And you can't really write that code. And I think the only way to get there is for AI to figure it out from experience.

This is similar to what we've seen in language or in vision, where people have tried to write chatbots with writing different instructions and prescribing logical steps of how you should proceed. But it turned out that the intelligence you need is much more messy. It just like, you give it a lot of text and you let it figure out all the different patterns

and analogies and there is many, many more of them than the ones that we can express in code or in language. I think something very, very analogous is gonna happen here. And that's what we start seeing. Demonstrations that we've shown so far here at physical intelligence are of tasks that were not possible before. Like things like folding laundry. You can't really,

there is no program that I've ever seen that could do that. The same with arriving in a new home and making the bed. There's just too many variables there to do it any other way. Can you talk about some of the experiences that you both have had in your careers? Google and Stripe, in some ways big companies that maybe move slower than a small startup, but at the same time, both of those organizations,

I feel like the time from, hey, we're starting a company to we have a product that, it wasn't a research organization for years. What have you learned from those organizations? What are you taking into this experience? Right. Really taught me everything I need to know about building a robotics research lab. Uh, it's just less than the school or I'd never worked in a research environment.

Uh, so I don't have priors. I don't know what a research environment actually looks like. I just know what our research environment actually looks like. I just know what our research environment looks like. I feel like we whatever it looks like, maybe it operates exactly like startups, like maybe grad programs are exactly like startups, but we feel like every other company I've worked with that moves extremely quickly and has a clear set of goals and direction just has a bunch of

people that work behind it, and work extremely hard to solve whatever it is that we're setting our, our minds towards. And, and, uh, uh, there's so much I learned from Stripe that informed that, but a lot of it's just the obvious stuff, right? It's like, can you hire exceptional people set a really high bar for it? Don't compromise, set a very clear set of goals for everyone, really aligned people. Actually, I think that's one thing I really took from Stripe is you want an extremely aligned set of people. And I've never seen more alignment than I've seen a pie. We talk about the alignment tax, like when we're bringing someone on, how much

work is there to align them around our mission, our way of seeing the world, and almost everyone that joins, there's like basically nothing. Most of the people that work here have dedicated their lives towards robotics or robotic learning or AI in some form or another, hardware, whatever it might be. And that just allows us to move so much quicker. And it's like, we need to communicate a fraction of what the average company needs to communicate to someone. We don't really need to inspire people or motivate them

because they're so inspired and so self-motivated. I think that's probably one of the things that's worked best for us today. I think that's probably one of the things that's worked best for us today. How have you seen your customers react to all the news and chaos around the tariffs? I think a lot of these companies are not in full commercial production yet, so it's not like, hey, we're no longer making money. But how are they thinking kind of like long term, just given how much of the supply chain is based in Asia? And are there opportunities for, you know, new US kind of like subcontractors and manufacturing

companies to sort of service this new industry? Yeah, the good thing is, I mean, good and bad. It's also subscale right now. Like most of the money is being spent on R&D rather than scaled production. And so it's not as if there's 100,000 robots that everyone's buying and it's now just twice as expensive I think the good thing is that given its subscale There's a lot of time to build out US supply chains and it's putting a lot of focus on figuring out Can we get us actuators?

Can we can we start to create companies that are developing those and all the other critical supply? Elements of the supply chain. So it's actually just getting people into gear and maybe it's the right time for it. Can you talk a little bit about what you're excited about on the data center side? Is there a moment where you're like really pulling for Stargate to come together and we need the, the,

the a hundred gigawatt data center to crunch you to crunch all of the data that you've collected in kind of a GPT-5 class training run? Or is that something that's so far out that you'll always be able to just tag along on the residual capability from the large language model labs? from the large language model labs. Yeah, we are, we are not there yet in terms of like having a full scaling law the same way as we've seen for LLM companies where you can just translate pro computes to progress with the capability where we are searching really, really, uh, really heavily for that. We were trying to figure out what is the recipe

that would scale like this, but we are not there yet. We do at the same time generate a ton of data. I think that's one thing that I realized since starting the company, is that robots generate a ton of data and you don't need that many to generate data that is close to the levels that LLM companies use for their models. and there is no ceiling to it, right?

Not that we run out of the data that robots can collect, it's not like the internet. So I think over time, it's quite likely that the places are gonna switch a little bit where most of the models, including LLMs and BLMs, are gonna be using using real world data collected through robots, because that's the data that has no ceiling. And it's very active as opposed to just passive observations of what people wrote on the internet. And I think at that

point, probably the question about data centers and compute is gonna is gonna be a big one. But for our models, we are not there yet. We are not bottlenecked by, you know, if only we had 100 times more compute, everything would have worked so much better. Yeah. How do you guys think about demos long-term? We joked on the show recently after seeing the Chinese humanoid marathon. Like I want to see humanoid's doing like big wave surfing, cliff jumping, you know, at what point is that that worth even doing or exploring

just because of the amount of attention that it would bring to the industry? What do you think we should demo? I'd like to see one of your robots surf Jaws. I think that's really the HCI to me. I want to see a robot do the 900 on a half pipe, Tony Hawk style. That was a really foundational moment in my childhood,

in American skateboarding culture. Really life or death stuff. Exactly, it's gotta be high stakes. Yeah. What about with hands? What about manipulation? Juggling for sure, Rubik's Cube for sure. Juggling Rubik's Cube, so you can do that.

I can do the Rubik's Cube, Jordy can juggle. We need to learn each other's skills so we can do both at the same time. But yeah, I mean these stunts, when they're done right, they can draw a bunch of attention. Although you guys have plenty of attention. I don't know if that's really what's keeping you back. No, but it's an interesting thing where it's

like you have the intention of the entire industry, but then at some point to basically inspire the next ever many thousand robotics companies. I would love to know about, obviously, with any AI project, there's always the public perception of job displacement, dystopia, AI doom, et cetera. But when I look at the demo that you just posted, I'm like, that thing is going to be fighting on my team

in the singularity. This is a friendly robot that will be defending me. But how do you think about the like tuning the language interaction? so that Do you see a world where? Yes, it's doing my laundry or or making my bed But if I happen to just also ask it I tell me about the news I can just have a chat with it Is that something that's even in your mind in terms of like human computer interaction? It's not a big focus of ours right now, really, we're so

focused on, on manipulation and economically valuable tasks. And more so than that, the fundamental building blocks that we think gets us from here to physical intelligence, I think it's inevitable that everyone has robots in their homes, their workplaces, just like in their lives. And I think they'll want robots that are more useful than just doing things, whether it's companionship or like It's the best Amazon Alexa that can actually then go like cook the recipe that you ask it for

It's a place we focus Around the interaction but right now it's more understanding the intent of clean my kitchen and then breaking that down into tasks But it's pretty straightforward to go from Do the thing to tell me about the thing. Let's have a conversation about the thing. And so it's on the horizon, but not the greatest priority. And then one thing there, it says with the models we've been releasing, they're actually built on top of vision language models.

So they're the models that are truly what they call multi-model where you can talk to it, you can ask it what they see in the image. And every now and then you can ask it to perform actions too. That's cool. And what we what we start to realize is that all of these different data sources contribute to each other, they give you just like a bigger picture of what the world is like, and better understanding. And it just turns out that robot actions is just like yet another language

that these models can speak. And they just need to learn it and see enough examples of it. So the model that we have already is the model that you can talk to and it works, you know, just as well as open source BLM. But on top of that, it can also have that understanding be very embodied. And it and you know, it's that understands what it sees in front of it. And it's a much deeper understanding when it knows how to move its arm to actually accomplish a task.

We were kind of joking before the show about the obvious comparison between robotics and self-driving cars, but can you explain to me, like I'm a five-year-old or a venture capitalist, why is that a bad analogy? Why don't you love that analogy? I feel like it's not that you don't love it. It's just that it can put you down

a bunch of wrong directions. There's a lot of parallels. But I mean, even like the Waymo Tesla thing, right? Like Tesla has this incredible advantage with how much data they're collecting and passively. Yet Waymo is so much better so far, and it has so many fewer cars on the roads. There's useful things about it, but there's also aspects that don't transfer in the analogy.

I think the reason why we were joking about it is it's the number one question. We don't talk to many five-year-olds, but investors and VCs ask us, and so we have to go down this rabbit hole where we're breaking down all of the assumptions and correcting some of them and validating some of them. I mean, is that a, so should VCs, if they're looking at the robotics market, just throw out that analogy entirely or should they be saying like there are a set of robotics companies that are in the Waymo category and there's a set of robotics companies that are in the Tesla category and those are reasonable,, an ontology to map to. Yeah, no, it's a, there's a lot of very useful stuff in the analogy. I think, I think one thing that's interesting is that there are all these self-driving

companies that have died over the past 15 years. And one thing that we actually like to remind people is that this is not coming tomorrow. You log on to Twitter and you'll see all of these crazy robotics demos, most of them tele-operated or most of them being like robots doing backflips, which is a much easier problem than actually a robot folding laundry. And the thing we really try and remind everyone that looks at investing in us or is thinking about investing in us is this is not a problem we're going to solve tomorrow. There's fundamental research breakthroughs that we need to make. And much like self-driving had a, it's what, like a 15 year arc at this point, there is a very high likelihood that

robotics is the same way. Like we think our greatest competition is science itself. It's not like this company or that company. It's just maybe we can't pull it off in our lifetimes. We think we'll be able to. It's looking more and more likely, but it's not a tomorrow thing. I have one last question. I know you enjoy food and cooking.

What is the final eval, the Mount Rushmore, the Mount Everest of cooking that you expect will be the last dish that a robot will be able to cook what's the hardest dish for a robot to cook the Don Angie lasagna oh yeah yeah okay it'll be very difficult so so when when they cook that I achieved it's game over yeah it's game over that's amazing there was actually a GI a GI benchmark someone scared shared a screenshot And it was a very old definition of AGI. It said, it'll be able to describe a sheep,

tell you three things that are larger than a lobster. And AGI is here by that definition. But one of the things that it can't do is bake you a cake. And we just thought it was funny that that was the last thing that the computer can't do. But maybe soon, maybe future. But thank you so much for coming on the show. This was great.

This was a fantastic conversation. Thanks for making the time, guys. Best of luck to you, and thank you so much for building this. This is really important technology. Yeah, we're excited. Put a robot in the studio when you're ready. Send it over.

It's a mess. I have clothes all over here that need to be folded. So we'd love to have one. Awesome, cheers. We'll need a live demo. See you. Bye. Next up, we got Sam Lesson coming in the studio.

Venture capitalist yapping about venture capital. We will bring him in when he's ready. In the meantime, I will do some ads. We'll talk to you about Wander. Find your happy place. Book a Wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, 24-7 concierge service. It's a vacation home, but better, folks.

We can also tell you about Ramp. Time is money. Save both. You heard me slip it into the complexity interview. I'm gonna try and slip more ads in. We've been hearing a lot of feedback that there aren't enough ads on the show. We are working hard to remedy that.

But we have Sam Lessin here in the studio. Welcome to the show, Sam. How you doing? I'm doing great. How are you guys doing? We're doing fantastic. We just had a fantastic conversation with Carol Hussman and Lockie Groom over at Physical Intelligence.

Did you see the demo of their cleaner robot? The room of five pull-out? No, I love Lockie. I haven't seen him in a bit. Is this the folding robot? It can fold your laundry. They've been folding shit in like a warehouse for a while. Yep.

Well, they're doing it in the real world now. The demo was they sent the robot out into the field. It cleans someone's house. They say it's about 50% accurate. They're getting ready to deploy it once it gets to 99%. What does a 50% accurate cleaning robot do? Like they would have to time. Yeah, it can fold half of your shirts properly and half of your shirts improperly look in fairness

That's probably better than I could do. I'm not much of a folder myself. I'm terrible at it. I'm terrible at it So yeah, I would be a terrible laundry robot personally yes Great to see you Sam always fun. You guys are crushing it. I'm loving the vibe you like your full-time now Yeah ads yeah, yeah,, we can never side hustle Always full hustle. Yeah What's what's going on in your world? you know, I don't I've been traveling a bunch, but I'm back and Traveling as a venture capitalist. How does that work? Oh just for fun guys work, please Yeah, no, I just I would imagine such a prestigious career path is so demanding that you would never be able to take a day off

Never no, I I am a slave to zoom. I just sit here and zoom back to back crack the code. What's your stance on? Zoom you do you invest much purely over zoom are you just meeting everybody at this point? You know, it's a really interesting question. I, I personally think Zoom, Zoom's had like a really interesting impact, I think on venture capital. Cause initially people were all bowled up on how Zoom and like no meetings in person was gonna open the funnel.

And people would like invest all over the country and we break down walls because all of a sudden physicality like there was like this kind of euphoric zoom will be democratizing type thing going on and it's interesting i do think that zoom means that people like me and venture capitalists are willing to take more meetings than we otherwise would be on like interesting topics with people that look again like it's just like The barriers lower you'll meet with more people now does that actually result in more investments? Unclear I think it might invest in like broader sets of first meetings

Just because the barriers lower and like if the meeting gets boring after 15 minutes I can just do my email and say aha, right? So it's like, there is some breakdown in like access, but it's not clear to me how much that resolves to like actually broader access means. And in fact, I think that's one of the big things that's interesting about AI broadly right now is, there's this narrative like with auto scripting, I get the number of pitches I get that are like half written

by AI or written by AI is like out of control, right? I don't know what people think they're doing with those because they're all just going to get deleted, right? And if anything, the irony is the fact that the barrier now is so low to those emails means that even the ones that actually are legitimate just get archived because like on the margin, they're probably spam. And so there's this interesting thing where AI is actually leading making venture capital, I would argue more insular, right? Then it was before not less insular right so there's all these like unintended

Consequences going on of zoom of AI of all this type of stuff in VC Yeah, email you just got to use it like text messaging just no no subject No body at all just whatever you have to say just put it in the subject and send yeah Actually, I'm a he I'm like probably I'm. I actually am a huge, I'm like probably I'm old. I'm like 41, right? So I'm like a huge, I love email. Like I think it's great. And I'm an inbox zero guy.

But I also like run aggressive filters on my emails and like, I'm fine not responding. Like I don't consider email a contract that because you sent me something, I'm required to send you something back. I think you just have to treat it differently. What about on text? Are you an inbox zero on text? Text I take pretty seriously actually. So that is like I kind of have a pretty quick SLA on text and I tried to make sure that

not everyone knows my actual phone number. Let's put Sam's phone number up on the screen for everyone so you can text him if you have it. Texts, texts. Well, I'll give you my plug, which is one of our companies is called OpenPhone, which is a great company. And I use an OpenPhone phone number for a lot of things where you want to put it up on screen.

And it's great. It's like a second text inbox. It's not really the purpose of the company. It's more sophisticated than that. But I like it for that. That's great. We should set an OpenPhone line up. Yeah, for me, I like to think of the company is more sophisticated than that, but I like it for that. That's great. We should set an open phone line up. Yeah, for me, I like to think of the hierarchy of inboxes,

email. But then now it's like, OK, you have XDMs, iMessage, WhatsApp, Signal. If you want to get in touch with me, show up and grab me by the collar. Yeah, it's basically like juggling. Until I hear what you have to say. That's the only option.

So I have like, my stack is text is incredibly important and serious. That's like a one hour SLA, but it's limited. Email I take very seriously. Like I really care about email. But then people are like, you should be in my Discord server or like Slack. I'm like absolutely not. Like I think those things are disasters. I refuse to engage with Slack. I'm like absolutely not. Like I think those things are disasters. I refuse to engage with them. I hate everything about them. Despite the

fact slow was one of the seed investors in in Slack. And so I have to thank Stuart for making us some money. But like I just like can't deal. I refuse to deal. Yeah. Let's take us through that. Should we talk about venture capital? I actually want to start and go back to your 2023 piece, which is on the timeline. You called out, this is October 16, 2023, the shutdown of the VC factory line and the death of the factory farm unicorn narrative, the awkward crowd into seed investing by multi-stage firms,

the mirage of AI and LLM startup investing, the post pandemic fundamental cultural change impacting startups. Which one of those- Would you grade yourself? Yeah, how would you grade your predictions? Well, I obviously grade myself excellently on all of them. No, I mean, I think like, look,

I try to pull up every few years and just especially in times of uncertainty, like what is going on? Like where should we be spending time and attention? I think, you know, two years ago, you know, those were the big themes for me is one, we were very used to for 10 years as a fund effectively operating on this factory line. We take in company at a certain stage. We know what metrics they have to hit. We give them the money.

We then package them and send them on to our friends at series a who then send them on to be and dead It and the whole thing works beautifully because at the end we pop them out into the public markets and retail investors buy them And life is good. And I was just saying like after the pandemic, you know people wanted that to come back And I was like, this is not coming back like this whole the market is it's a mixed-up market You know, we've basically produced a bunch of these things which are on paper unicorns, but like they're not fundamentally important businesses. And more importantly, there's been this huge release which is the biggest platforms in the world

can just keep getting bigger. Like I remember a time when like $100 billion company was a huge company, right? People thought there was a limit to how big the biggest could get. And so there was this constant hunger in the public market for what's the next $3 billion company that's gonna grow really fast. And there was a limit to how big the biggest could get. And so there was this constant hunger in the public market for what's the next $3 billion company that's going to grow really fast.

And there was coverage for that. People cared about it. And now the obvious answer is just like, put more money into Amazon, put more money into Meta. Like there is no upper bound. And so I just think the markets have shifted, demand from consumers has shifted at the public and it's kind of rippled back to the ecosystem. You know what we have now,, I have this in the 2025 version

is what I'm calling zombie corns, right? So there's all, you know, people thought, people, friends of mine were like, oh, we're gonna see this mass extinction of these unicorns. They're all gonna die because, you know, they're gonna run out of money. No one's gonna fund them. The liquidation preferences are huge.

They can't go public. They actually mostly didn't die, right? What they did do is they basically sacrificed growth, they cut their burn a lot, they kind of got marginally profitable, they can kind of exist, and they're kind of zombies. They're just, they're out there, they're not going anywhere, but they're also not going public. There's no market for them, no one knows how to buy them. The liquidation preferences are set up so that no one wants to deal with them, and they're're just gonna kind of exist.

So the factory line is broken at the late stage because there's no off ramp, but in many ways, the sort of early stage pre-seed to seed to series A is still accelerating as though there's an off ramp. I don't think it is actually. I think this is like one of the, I think the part of the 2025 deck

we're trying to think about what's going on. I actually think what we now have weirdly is effectively several markets for companies that are pretty decoupled from each other and kind of have their own logic and exist in their own vacuum. So like there is a public market, like the public market exists is the biggest, right?

There is a private market now. There are companies that are private and will like probably never go public or never, for various reasons. The way that companies are valued by the late stage private and the public are actually just different. What's valued is different,

how people think about them is different. Large LPs actually invest in both, so they don't care. They're basically running two parallel universes that don't have a lot of operability. Now, at the early stage, I actually think the same thing is going on, right? Which is like, there is a kind of seed to pre-seed-esque market that exists, and people compete,

and people get excited, and there's kind of a market-clearing price for startups and investors, sure. But then when you say, well, what does it take to hop from an early stage, call it like pre-seed, seed, maybe sneaking into A to like a legitimate B and beyond growth round. There's no more like magic numbers you hit and like a valuation framework that's consistent. It's actually much more about belief.

You know, I say in the deck, it's a lot about this kind of new math of people want downside protection and then an option on infinity. Right. And so like what's the average of infinity and zero? It's infinity. People are backing and devaluating. The entire factory is predicated on $1 million in ARR equals Series A at price blah blah with 30% growth and $10 million in ARR.

Triple, triple, double, double, you can come up with all these frameworks. Everyone agreed on shit and there was just like market clearing action and prices. And now I actually think there's just like distinct markets of belief that are really hard to move between. Yeah, does this necessitate like a different model around growth?

We kind of saw this, like the crossover investors like Tiger, but a lot of growth funds have this downside protection mandate, no zeros, but let's underwrite to a 3X. And yes, I hear your infinity thing that does happen every once in a while, but I think in general, a lot of growth investors are just saying no zeros and let's triple our money over this deal. But should you have more later stage growth investors that are thinking more like portfolio

construction at the seed stage? Look, I think that the answer to that basically is I don't even know when they talk about we're underwriting to a 3X, who's buying? Everything is about the marginal buyer. There is no value on anything. It's all about who's going to buy. What about a DCF? I mean, you could justify the cash flows.

You could comp to the public market. But the problem with it, first of all, comping to the public market, basically nothing at late stage is trading comp to the public market really, right? And we can get into like why and how. I think that, look, the DCF comp to the public market, that is the factory model, right? It's basically saying like, hey, I have a late stage thing. I put money in. It's going to triple.

The DCF looks like this. It has this much profit margin. This is the story. Package sell to the public market. The public market buys on that same story. That was the mentality that persisted for a long time. It was a great system for money making for a lot of people. I actually think that, again, the public market now is like, well, if I kind of just want

those types of metrics, why don't I just buy more of the Mag-7? I don't even want to dick around with your subscale offering. I don't care. There's reasons for that. It's because the big LPs are bigger. It's because of meme stocks. There's a whole bunch of stuff going on there that kind of makes that happen. But the net outcome is there is no off ramps.

So then the question is when you're underwriting at a late stage, you also have to underwrite to someone buying from you. And the question is what are they buying and why are they buying it? And I think this is where it gets a little bit squirrely because I do think, I'm not the only one saying this, but private to private transactions are going to happen way more. You're going to look, just as it happened in private equity like funds will sell the funds then the question is well What is the buying fund paying right? They're gonna pay they need some margin They need to have a framework in their heads about how they're gonna sell

Right, so then they're gonna you're gonna be paid you as an early stage fund are no longer underwriting to some late stage to some DCF To the public market. You're really underwriting to who's gonna buy from you. What's their narrative on buying? Why do they wanna hold this? What's their time horizon? What's their purpose? And the irony of the whole thing is honestly, those prices are gonna probably be much lower

than what the DCF might otherwise imply. Right? How do you think about funds selling an entire think about funds, you know, selling an entire fund and I'm talking about venture funds, maybe selling to other, um, you know, kind of like not continuation vehicles, but just other secondary buyers versus trying to sell off and kind of like prune the portfolio and say like, well, in the end of the day, look, I think, look, the fun side of the funds, you're just going to take some massive discounts on that shit, right? Cause in the end of the day, look, the funds, you're just gonna take some massive discounts on that shit, right?

Because at the end of the day, if someone's buying a fund from you, they're really only buying the winners and the rest is bullshit, right? And so in an ideal world, they just carve out the pieces they want, like, I want this position and this position and this position because I care about these companies or I have an infinity thesis on them. I actually think the infinity thesis really matters in terms of how people are thinking about how big things can get

and whether they matter or not in the world. And then everything else, it's like, it's basically worth zero, right? You know, we were joking at our firm about, like we were joking about sharding right off co, right? Because that's the other funny thing that happens, right? Is you just kind of give up on positions and you sell them for a dollar to take the tax advantage,

right, on it. Every once in a while, the hilarious part is you sell something for a dollar because you give up on it and it turns out being worth something. Right? So like, there's a whole business that's hoovering up irrelevant positions.

But I don't know, it doesn't happen. Yes, do GPs sell piece of the GP? Yes, but that's complicated because the reality is at least the public market only really values the fees, which means like, so it's basically I've been having trouble because I wrote this 2023 thing that I was pretty proud of and I think was honestly pretty accurate about what was going on. Understandably, it's been two years. I wanted to update it and be like, well, where are we now? And there are things I think I got mostly right. There are things that I think are wrong

But I think that the real story is end of factory model the factories over What the the the yada yada yada on is we're now I think entering this period where like you don't even think about it As one integrated capital system. They're just like different parallel universes like everything in the world is regionalizing and fractionalizing This is happening with globalization. We're having a de globalization moment. This is happening with all sorts of things just like different parallel universes. Like everything in the world is regionalizing and fractionalizing. This is happening with globalization. We're having a deglobalization moment. This is happening with all sorts of things. I think it's happening with capital too.

They're just literally distinct ecosystems and people play in multiple of them, right? But they have their own valuation logic, et cetera. And then I think like the way people value companies as a result has changed. What you should be looking for has changed. The types of CEOs you wanna back has changed. It's just a new world. Did you dabble much internationally? This was a very 2021, 2022 thing with funds thinking that they'd win a deal and like 10,000 miles away.

In hindsight, it's like you have to think like, why did you win this deal? Why are you so lucky to have the opportunity to back this company? And then a lot of them just are derivative and- The only, yeah, the only, we've always invested in Israel when it made sense. I think the US Israel relationship is strong. I think there's a lot of good technology. There's a lot of reasons that makes sense. And so that's always been a thing we've done. We know it well

enough to be confident investing there. I think the thing for us historically is yes, in a Zoom world, you'll take the meeting in Europe, right? Because it's interesting. And no one's accounting for your time as a venture capitalist. So if you're interested in something in Europe and they really want to talk, sure, you'll do it. But we're so lazy, right? There's always an exception. We have done a handful of deals that are kind of outside the wheelhouse. But I kind of believe that there's really something to be New York, be San Francisco focused, pick a few GEOs, understand them, understand how they fit into the global capital world, et cetera. So no, we didn't get drawn into too much Europe.

What is your interpretation of the rumor around OpenAI potentially buying Windsurf for three billion? It's not an AI cherry on top business. It's a wrapper. Is it bull market for wrappers? Now, are we going to see tons more acquisitions? Yeah, Slow is going to FOMO into a bunch of rapper businesses now. Yeah, FOMO into every rapper, because they're just going to get hoovered up. I mean, my take was maybe OpenAI buys one,

then Anthropic needs one, then Amazon needs one, then Google needs one. And all of a sudden, you have like seven unicorns getting bought. Everyone's making money. Everyone's generationally wealthy. That's the good ending, right? I don't look, I really am pretty cynical slash don't think that we're going to see a lot of aqua

hire AI type stuff in this era. I think there's a few reasons that one is like, what are you really buying? Right. In some of these things like you could are you buying talent? That is not unreasonable. But you know, and we've seen that. We've seen people like effectively quote unquote buy companies that are literally just for like the one person they want to pay $200 million to because they really think they're special because they need an exit.

Look, some people are going to get massively overcomped. That will happen. I don't think it's an investment thesis. It is what it is. And I think it won't happen that much, but we'll see. I think there's going to be, are you buying technology? It's like the thing about AI and a lot of where we're going is like, why? Like software is getting commoditized. Like what is it? Like if you're buying technology, you got to be buying some really important technology. And I think that's like an, the third thing you in theory can buy is just distribution,

which is like, if someone really has, you know, for whatever reason, got their hooks into a few key contracts or like, you know, they have a tailwind, like fine, you buy a distribution and that, that can be worth something. But look, honestly, it just seems like all very squirrely to me at this moment. You know, the thing I'd say in venture capital is there will be random walks, some random stuff will happen, right? And like, I think you can't get to you know, twist it around that you certainly shouldn't be chasing random walk But no, I don't I don't personally see it and if anything I'd say like look I was part of this

you know, my first company was acquired by Facebook in the era of aqua hires, right and I think there and I say this with some humility And I think, and I say this with some humility, but also perspective is like, I think when you go back and look at like, what was really bought there and was that a good use of capital by most of the aqua hiring company? If the answer is probably not, you know,

like that era is kind of over. People aren't that special. You know, the big companies, just because they have such incredible access to capital and distribution at this point, they can kind of just build whatever they need anyway. Right. So anything that does happen will be highly bespoke as opposed to like some industry wide trend is my personal view. How do you think right now about the dynamic between

30 to $50 million early stage funds versus 30 plus billion dollar AUM funds in some ways they, versus 30 plus billion dollar AUM funds. In some ways, the tiny upstart funds benefit from these big platform funds coming in and sort of marking up deals, right? The returns look good. Maybe. I just think they're completely like, they're two completely different business models.

I think this goes back to my poll about like regionalization and fragmentation and what capital even is. Right. If you're running a 50 billion dollar venture fund, you can't possibly be deploying that well early. Right. And actually, you're paid to move gross dollars. The problem you're solving for LPs is you have some massive fucking LPs. So like I want exposure to private markets. It's really hard for me to go find how to do that. I would love you to deploy as much capital as possible. And like effectively the way you get paid is on fees. You're not getting paid on carry.

Like if you have a $50 billion fund, making 3X on that, so you're making money on carry is like extremely difficult to impossible. Like the numbers just don't add up. You're getting paid to deploy. And that means your business model is attracting more capital. You have to return enough to justify it, right? But like you're not actually shooting

for maximum DPI or actual returns. You're just shooting for that. And by the way, just goes further. Doesn't the big, you know, I just see this all the time where I have friends with funds that are maybe sub $50 million funds and they're investing into, like, even if the big platform's just periodically

dipping down into seed when they have a really like the founder or whatever. And then suddenly the round is like six on 40. And then the tiny fund is like, you could get a bunch of bangers and you just do the math and you realize, like, they're not going to be making DPI either. And they're not getting those management fees. going to be making DPI either. And they're not.

The late stage, what happened after 20 in 2023 era, which I wrote about then is like the late stage capital allocators who are again, are paid fees to deploy gross. They're like their weight deployers, their mass capital deployers. They got, they couldn't deploy. So a bunch of their junior people in particular, like, well, I need to do something to justify my paycheck. So they started dipping into seed, right? Cause like they're bored, right?

And they're like, we can't deploy big checks. So we might as well deploy small ones. And by the way, no one cares, right? Like it's such small amounts of money. It's irrelevant either way. That completely messed up the seed markets cause it got super undisciplined, right? And like it did, cause it's candidly,

we do the same thing at slow to like the angel market. Right. Whereas we are it's a recursive problem. Like we will write hundred thousand dollar checks off a meeting because it's kind of irrelevant to us and it's just relationship building and like whatever. But there's some poor angels out there trying to price it properly and we don't care and then we fuck it up for them. So like it's a recursive problem. That did happen. I think mostly honestly the late stage guys with AI have a narrative where they can put billions of dollars to work and do their Actual jobs so they've mostly pulled out of fucking up the early stage markets because they have better things to do with their time That's actually what they get paid for right and just to make a finer point on that, you know A lot of these late stage public platforms., they really are setting themselves up to go public. Here's the thing about that. When they go public, the actual way the public market's value of these funds has absolutely nothing to do with returns. It is 100% the fee base.

And so their structure and their incentive structure is 1,000% about earning fees and just making enough returns to justify the fees they charge and raise more money. That's what they do. Then there's the early stage market. Here's the thing about those $50 million funds. Ultimately you got to eat. You got to actually deliver DPI, not just marks.

Marks are nice. They're fine. But I think what we're going to find in a lot of ways is the gulf between I have on paper made a bunch of money or these deals look good versus like, oh no, I actually returned capital. I like made you money, you should give me more money and I made myself money doing it. That's a pretty big gulf.

And I think what we're gonna find is that, A, the market, most of those funds are going away because they don't have that and they're not going to. B, there could be a world where late stage funds start saying, okay, at some discount to the last round, I'll buy out the seed funds effectively and give them some DPI, et cetera. But then the problem for the seed funds is that mark they were using to be like, look how smart I am.

That's not what they're getting paid, right? That's like the high water mark some investor invested later for primary. And when you come around and say, hey, by the way, would you like to buy my shares? And they're like, well, we'll take more in a lower average cost base. They're not paying what they paid for the primary, right? And they're looking at their portfolio and they're like, I need to do this for 80% of my bets in order to like actually. Yeah, and then it's like, you know. Yeah, and so look, I mean the upshot,

the really simple way to think about it is like, if you're a early stage investor, you have to make money. Like, that is actually what you are paid for, and people are saying, hey, I'm gonna allocate a small amount of money to you. By the way, it's not efficient, right? Because if you're even a medium-sized LP, someone's running a $50 million fund,

what are you gonna give them, like a few million bucks? You don't care unless they make you a shit ton of money, right? And so, like, if you make them a shit ton of money, you're doing your job, you get to keep playing. If you don't, forget it. And that's just in a completely different game than what it means to be a late-stage capital allocator in the private markets.

Yeah, I have kind of a random topic, but there's two early stage kind of publicity stunts going on this week. One is by Roy Lee. He launched Cluey, Cluey, cheat on everything. I'm not sure if you saw this, but it's very controversial. And he's kind of like a troll, almost like a Nathan Fielder type, really kicking the bear.

And then there's also this Artisan company announcing their $25 million Series A with a billboard on the 101. I love billboards, as you know. Yeah, we love billboards here. We're sponsored by AdQuick. We love billboards. But the positive take on this is that, hey,

they're breaking through. They're getting attention. Attention's valuable. Distribution's important. The counter to that is, should they're breaking through, they're getting attention, attention's valuable, distribution's important. The counter to that is, should they even need to do that? Shouldn't they just be heads down building? Where do you sit on that continuum? I guess the question I would ask is, what is the track record of companies that started with marketing stunts that ultimately were important or successful.

My sense is the track record off the top of my head is zero. Right? Well, I mean, Facebook started with thought or not. That was very viral. No, but it's actually really, it really, it really. I'll give you an example. I'll give you an example. So the challenge with going super viral early,

and I had this with Party Round, is that people get a fixed idea, a lot of people get a very fixed idea of what your business does, and then you run into this product marketing challenge, which people are aware of your business, but they're aware of it for something that you may not even do anymore,

and that's why I was talking with Clueli, founder yesterday of you need to be committed to iterating and basically burning the whole brand down because you might find in two months that the real opportunity is something else. I think that's a really good point and like I'll do a step further, which is in my experience, really successful things, you actually want fairly high barriers to entry so that the people who show up as your early customers are like deeply in need of it and true believers, right? Because if they're deeply in need of it, they're going to put up with a lot of crap to get

what it is you're offering out of it because they're deep, because they really care. Like they showed up first and they like have a real stake in it. And then they become true believers in that cult that advocates. I think if you have too much attention too quickly from a not fervent enough audience, you get distracted. You have to deal with a bunch of the wrong stuff. People are flighty. So I think there's this irony, which is how you get your first 100,000, 10,000 people and the barriers to entry there are like, and I'll give you a kind of

counter example, which actually kind of is a marketing stunt if you get into it, which is quite by accident. Icarum and I kind of started this Jelly Jelly meme coin, which blew way the hell up and went crazy, but was supposed to be like a component of this app Jelly Jelly we've been working on. The app's super cool, but like the app was not ready. Yeah. Right? Like when, and what's been really interesting to watch

is because the app wasn't ready, you got a bunch of people in, most of them balanced. They're like, this isn't ready, this is weird, whatever. But you did attract a kernel of like crazy true believers that are really engaged with it and then it's kind of like a fire, like you kind of blow on the coals of that, right? And you kind of keep iterating and working. So I guess that's a long-winded way of saying I think the history of companies that start with a marketing stunt and blow up big is pretty poor. There probably is a way to be very inefficient and blow up something big or say something, funnel out 99% of the noise, somehow find that kernel 1%, work with that 1% and treat it like the embers of a fire and grow up. That's the mental model I would have. It's like how you handle it. Got it.

Last question, how cooked is Tesla? I mean, look, I've been in the camp of Tesla's a meme stock for a long time. I think Tesla's a meme stock. Yeah, you posted posted maybe it was yesterday No It was this morning if Elon can move Tesla stock up by seven and a half percent by saying he's stepping back from Doge Against the backdrop of profits and revenue. They just reported then yes He probably deserves the 56 billion dollar difference as a pay package. That is what the market says his attention is worth.

I thought that was pretty on the nose. Yeah, look, Elon is the greatest marketer of our generation. He's the greatest capital raiser of our generation. He is the greatest, I think, storyteller. I mean, there's a lot that he's really, really, really good at. And I think he's the ultimate cult influencer in a lot of ways. And he's built a lot of cool companies doing that. But it is so belief driven.

And I think this is kind of the thing where it's like, what does Tesla work from a DCF perspective? We talked about public markets and how you value things. Not a fraction of what it's traded at. But it is absolutely, he is great at the infinity story, right, the infinity story is so big and infinity, you know, plus zero equals big number. Everything's about the marginal buyer

and it's incredibly loved because retail investors want something to believe in, like they want something that can go to infinity. It's the same thing with the Mars thing, it's like, look, again, I find the whole Mars thing in SpaceX so frustrating, I love SpaceX, it's like, you know, I think it's an, look, I, again, I find the whole Mars thing in SpaceX so frustrating. I love SpaceX. It's like, you know, I think it's an amazing company. Like what they do is incredible. Right. And there's a lot I love in the whole nine yards. The Mars narrative

is so frustrating because it's so disingenuous on one hand, right. Like it's just like the, the predictions are out of control. Like it doesn't make any sense from like a fundamentals perspective, but my God, people need something to believe in. Right? And so believe in something. Well, I think Tesla is coming back. I think they're going to put a naturally aspirated V12 with a gated manual in a new car.

I'm going to sell 700 million cars in a single quarter. I would fucking love that. If I did that, even I would buy Tesla stock. That would be awesome. We we go, there we go. We cracked it, we cracked it. It's gonna happen. You heard it here first. Thanks for stopping by, Sam.

This was fantastic. Great to see you, Sam. We will talk to you guys. Thanks for coming on. Talk to you. Next up, we have Bridget Mendler of Northwood Space coming into the studio. Very exciting, I believe $30 million Series A

from Idris and Horowitz in partnership. I think Founders Fund and a bunch of other folks got in the round. So we'll talk to her about that. Bridget, welcome to the show. How are you doing? Hey, guys, what's going on? What's up? Um, I haven't been on podcasts before. So am I on? You're on you're not only on a podcast, but you're also live. Whoa. So there's no post editing. But hopefully we got the facts right, but you can break it down for us. Tell us, what does Northwood Space do?

And tell us about the $30 million funding round that just was announced. Yeah. We're building the ground network for the industrialized space economy. We view it kind of as the third critical pillar of infrastructure for space, where you need to get things into space on rockets. You need to have things to put into space, which are satellites. And then you need a way to actually communicate with them and use them once they're up and operational.

And so we're focused on that last third part and building the shared infrastructure that the whole industry can take advantage of, really drawing parallels to the cellular industry and to the internet, where shared infrastructure that the whole industry can take advantage of, really drawing parallels to the cellular industry and to the internet, where shared infrastructure is just a big enabler for being able to push technology forward. Talk about what companies have had to do historically. We've heard a lot about satellite companies

that send a satellite up, and they're like, it's working, but we don't know where it is. So it's a critical kind of critical aspect of maintaining. What was the status quo prior to you starting the company? Oh yeah. I mean, it's not just prior to us starting the company. It's like ongoing. We talked to companies, I think like last week, they're just not getting enough coverage. And so they're endeavoring to build their own ground stations themselves. And our co-founder, Shar, it was actually interesting during our first fundraise, he

was still working at his old company and he was woken up two times in the middle of the night. There were a total of four ground failures just in the course of one evening while he was manning their operations at all different locations, all different ground networks. One was a site that had already been down and just like not even notified the company that they weren't going to be able to make their contact, talk to another company last week that had been out of contact with their satellite for 28 hours. It's like, you know, you're not just tossing like a $50 piece of equipment up there. It's like, you're not just tossing a $50 piece of equipment

up there. It's like tens or hundreds of millions of dollars. So it's very stressful. And we're excited to pursue setting a new standard there. Yeah, people get stressed out when Slack's down for like five minutes. And imagine having this $100 million, $1 billion device that you don't have contact with.

I'm curious, what does scale look like for Northwood? How many different ground stations do you hope to get to within the next, call it, decade? Ooh, decade. That's a long horizon, but that's fun. We are looking at scale both from a network level and a site level. So when you think about why do you

need to have a global network to begin with with space, the reason why you need to have a global network is because satellites orbit the Earth. And so maintaining contact with them requires having locations all over the Earth to make sure that you can be in contact all the time. So think of it kind of like when you're using a cell phone and you're driving on the freeway and you're passing different cell towers, you need to maintain contact with cell towers

in order to maintain connections, same with space. And so for us, there's like two verticals. One is coverage. So you want to have enough coverage. So basically like a cell tower, like you're always in contact no matter where you are. And then the other one is throughput. That's like density. And so kind of gold standard for this is SpaceX,

where they have hundreds of ground stations to not just have global coverage, but to be able to serve millions of users in different regions. So when they're wanting to like service a region that has a lot of customers, they need to put a lot of ground stations in that region in order to support that much capacity.

And so we want to be able to offer that to other folks so that they can have that kind of gold standard of connectivity through space. So we're going to be putting ground stations in different regions, as well as ground stations densifying in the same regions. And one of the things that we think about with scale is really how can we put as many

Ground stations to support as much capacity as possible at a single region. So our kind of you know Sub-near term goal is 500 sites. Can you take me through some of the can you take me through some of the history of These ground stations maybe explain it in really really simple terms like maybe like I'm a venture capitalist or something Something like how do we communicate with the Hubble telescope? Is this like a big satellite dish, like what I'd saw in contact with Jodie Foster? Is that how we communicate with the Hubble

or is there a different network of ground stations? What was kind of the gold standard 10, 20 years ago? Yeah, I have to just say like us ground nerds in space, we do not often get asked these questions So thank you very much. Like the ground is just generally like the not sexy part of space. Um, very fun So yeah, I mean what you're doing is uh, you know generally using rf to contact a satellite that is like hundreds of kilometers away Um, you need to concentrate enough power to be able to do that. So that's why you see like the big parabolic dishes, it's concentrating power.

And so when you're further away, that requires more power. So actually if you're in the Palo Alto area, you go by the Stanford dish is kind of a well-known one. I imagine like some folks, if they're watching might know of that. It's massive, a giant dish that's used to make that contact. And so it's interesting because like the legacy of space,

it's more exploratory, it's more research-based where like booking a Nintendo is kind of more like booking a telescope, you know, where it's like an individual piece of equipment where, you know, they're located at these different locations around the world. You book the time. You're kind of in control of how that functions and how it operates. But as the space industry

has been scaling, it's not really a sustainable model to think of as you're needing to coordinate tens or hundreds of different sites to think about that individual booking and coordination. And with that, we kind of like to analogize to network routing for the internet, where it's like you're not thinking of every single router and network switch. You kind of trust in a network that can reliably deliver that data. And so that's something that we're starting to think about, about how the space industry is going to evolve in terms of communication, going from booking an antenna like you book a science telescope to having the outcomes through a global network

where you can have a lot of observability and control into that network, but it's much more like software defined and controlled kind of like modern internet infrastructure. Question, for now I think there's an obvious opportunity to serve existing space companies. What kind of companies do you think are potentially enabled by your technology and network that may not have been smart

to start five years ago if you didn't have kind of the resources of SpaceX? Yeah, there's a company that we were recently talking to that I get really excited about. In LA, we had the wildfires a couple months ago and absolutely devastating, really difficult to figure out where to route resources with a really fast moving fire. If you're trying to get a sense of the scale and the direction of that fire with a helicopter, it's often not safe or not even permitted

to go into those regions because there's just so much debris. And so satellites are a really interesting application where if you're able to have enough revisit rate, which is what in the space industry you call being able to go over a region again if you're a low-Earth orbit satellite where you basically just need to have a bunch of satellites that pass over and take turns because it takes time to orbit the Earth. So having enough revisit rate to where you can actually

regularly track the movement of a fire is pretty revolutionary. You could stop fires much more rapidly and be able to detect the movement. The challenge with that is if you don't have your latency down low enough to be able to give the information, it's pretty much useless. If you deliver information an hour later, then you can't deliver anything actionable and helpful

towards firefighters on the ground. They're going to go into the wrong. Yeah, lives are on the line. I remember John and I live in Malibu. John lives in Pasadena. I remember the watch fire. Watch duty. Watch duty went down for like an hour.

And I was like, I was looking at the mountain behind my house just like being like, if the fire comes over the hill, I just want to have eyes on it quickly. And that was like very brief that it was down. I have a follow up question. Again, maybe a stupid question, but what is going on in the various different orbits? We talked to Albedo about V.Leo.

Obviously, Leo is kind of the hot one with Starlink. But do you need different ground station technology or scale to hit something in high Earth orbit? We talked to Astronis, which is maybe partnering with Impulse to kind of boost to higher orbits. What are the challenges or benefits to different orbits when you're thinking about it from a ground communication perspective?

Yeah, that's a great question. VLIO, you're getting closer to Earth, so you're able to get more high fidelity imagery or sensor, things like that. If you go up to LEO, that's useful both from that perspective, but also from a latency perspective when you're talking about trying to hit internet similar latency timelines, just the time it takes to go with those altitudes. There's also operators in NEO, which is Middle or throw a bit that are supporting internet use cases.

And then if you go out to geo, the benefit of that is like it's geo stationary. That's what the name means. You're fixed at a certain location and you're able to have really continuous coverage over a wider area because it can see so much of the globe. This is a super interesting area and an area that we're actually like really enthusiastic to be working in is servicing multiple orbits. And yeah, I think it's both of interest

on the commercial side and also on the government side. You know, they have a lot of assets that stretch up into higher orbits and they're looking to have, you know, more capacity, more coverage, more resiliency. Like there's really a shortfall of ground assets in the higher orbits, actually. And so that's something that we didn't enter into the business planning on, but that's something that has been a very large driver of activity in our business over the past 18 months of existence. And, yeah, I think the more dynamic movement is also a really interesting point where it's not like you're just hanging out in one orbit, right? Like that's kind

of impulse is really exciting proposition with prop is that they're able to maneuver between orbits in new ways. And in space economy, rendezvous proximity operations like that's that's something that's definitely going to be picking up and very significant in the coming years. I feel like Middle Earth orbit is like super ripe for a Tolkien named start up. Yeah. Another Andrew Rolfe. I mean I would love to hear where the name Northwood came from. Yeah tell me where the name come from and then I do have a follow-up question that's

more serious. Yes, that's a very serious question. The name came from the lake house where we first did our prototyping of antennas during pandemic and it was the very origin of becoming a ground nerd. And so yeah, that's kind of the history of the name. I mean, that lake house, my great grandparents got it in 1945. It's just a little shack in New Hampshire. And it's been kind of the, all the companies that I've had have had some affiliation to

it. Got it. So on the business side, can you walk me through where you're playing in kind of the value chain? I imagine that there's a fair amount of equipment that's available off the shelf. You might, or correct me if I'm wrong, but do you need to build the equipment from scratch?

Is this a project where you're gonna be building like a gigafactory, like what we've seen for the Starlink units at some point? Or is it more about assembling different components and then being really strategic about placing them and then building a network on top of that and really like the services side of the business? Great question. Something that our head of manufacturing, Thomas, thinks about a lot.

We're definitely going to be leveraging outsourcing in early days. We are a vertically integrated company. We design all of the different components. We have those outsourced and then, you know, brought in, we're not, you know, like making our own circuit boards at this point in time. There's certain things that are like more efficient to insource versus outsource.

So largely leveraging outsourcing. Initially, I think, you know, we're really focusing on modular units and making our units designed for manufacturing. So making sure that we can parallelize development, making sure that we can have things ready to be integrated at like kind of the final hour is the thought process just to accelerate our manufacturing capability.

And then gradually over time, when we figure out what is actually cost efficient and time efficient We bring it in house entirely I want to know more about actually the mechanics of setting up a ground station somewhere. I imagine you do Yeah, we're thinking about doing You know some extra space There's a lot of ham radio amateur folks that do that. I have a family friend who their family has some land in Napa and I think they monetize

it by selling a cell phone tower right on top of it. Is that is that is that the one of the folks that you'd buy land from or or is it on federal land like how do you think about placing these? Do we need them to be equidistant across the United States and beyond? Are there other countries? Are you placing them in allied countries? Like how do you think about the coverage map? The veri- I want to see the Verizon map with all the different coverage points, right? How does that grow over time? Yeah, no, it's it's real. We do that modeling in-house. So yeah, we think in terms of like

the coverage mapping and the metrics that we're prioritizing in-house. So yeah, we think in terms of like the coverage mapping and the metrics that we're prioritizing hitting for customers. Also shout out to Christian at Astronis who has his own amateur radios. We had a fun time talking about that. We got to tune in. Yeah. But in terms of where you put sites, it's a great question. Basically comes down to three things, land, fiber, power. So you just at the top of the list. So we're at the top of the list. So we're at the top of the list. So we're at the top of the list. So we're at the top of the list. So we're at the top of the list.

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So we're at the top of the list. So we're at the top of the list. So we're at the top of the list. So we're at the top of the list. So we're at the top of the list. So we centers honestly become like a good spot to put them at because they have the power in the backhaul already set up. And generally try to just make sure that the land is easy to deploy. One advantage of the way that we're building our systems is we don't need to lay a concrete pad, which can add weeks to months to your time frame, especially when you need to do permitting and all that. So our goal is to make it so that the tech bros of the world can just have one in their backyard very easily, deployed easily.

And yes, it is a global effort that we're doing right now. I remember Anderil did something similar with the sensor tower. They didn't want to pour the concrete pad because of permitting, so it's on wheels and Paul was saying it's completely unnecessary. You could just drill it in the ground, but then it's way more complicated. How do your timelines work? I'm assuming a lot of your customers are kind of planning around launches, and that means

those are kind of busy moments for you guys, I imagine, but at the same time, you can serve a lot of existing companies that have assets in orbit already. How do you think about kind of the advantages that you guys have of like being on the ground and not needing to plan your entire business around SpaceX? Oh yeah, it's very convenient.

We can work on our own schedule. I mean, we have different challenges, because you're going to different countries, and they have their own local regulatory regimes and all that, but we are not constrained by launch schedules, which is great. And then the first part of your question was, what was the first? Yeah, you answered it.

You answered it already. I have another somewhat random question. We ask a lot of artificial intelligence founders about their P Doom. We ask a lot of space founders about their P Moon. What is the probability that you will visit the Moon in the next 30 years, let's call it? Would you go if the capability was there? Let's say there's been 100 people or a thousand people or 10,000 people up, are you going?

And then what's the likelihood that you think the space economy and the flywheel that gets us to the moon happens based on your insider knowledge of the industry? I would absolutely go to the moon if I had the opportunity. I did hear from like an astronaut one time, just how life changing that experience was. And yeah, I mean, I feel like that would be definitely

a thing for the bucket list. As a mom now, I think that's honestly the only thing that holds me back from saying- We gotta bring the kids. You gotta bring the kids. It's gonna be Disneyland on the moon. That's the first economic use case. We talked about this too.

You would love that. Do we go on a Blue Origin flight? It's 250K. Do we just go and podcast in space? John was all in. I was like, my wife will absolutely kill me. I don't know if it's worth it. So it's definitely part of the calculus.

I know, to be young and wild and free. And like the lunar economy, I'm very bullish on it. I think, yeah, I think we'll hopefully see that within our lifetime Somewhat related to space tourism the Blue Origin flight did just happen last week. I want to know Specifically, what are the challenges with? with again connectivity because it seemed like we lost the video feed while they were at the

Apex of their kind of trajectory. It was only three miles or three kilometers up or something. It wasn't that high and yet we still lost the live video feed. Is that something, it's a moving object but satellites move too. What does it take from a ground station perspective to be able to watch Netflix on your Blue Origin flight consistently? Yeah, that was actually something that we talked about in the very early days, like preforming Northwood was like being able to watch Netflix in space and we're like, oh, wouldn't that be such a cool future?

I mean, to accomplish that, there's multiple different kinds of the communication going on. There's like, how do you actually make sure that the rocket is going where it's supposed to go and it's safe? And we talked to someone the other day who was concerned about like a rocket trajectory not going the direction it was supposed to and winding up like landing on another country and needing to deal with kind of like the catastrophe that falls out of out of that and managing that.

So like you really need to know where your spacecraft is going because yeah the the consequences that fall out of that are serious but then yeah having actual you know humans on board needing to have some kind of communications on board yeah it's it's going in a different trajectory than a satellite that is just kind of conventionally like orbiting and that's something that we're excited about with our technology as well is being able to vary our beam width. So if you think about like, you know, the signal as you get further away is kind of like a, if you were to shine a flashlight on a table and like the area that the flashlight spotlight covers changes,

depending on how far away the flashlight is, it's the same thing with an object going up in space. Like it's changing the actual signal propagation depending on how far away the spacecraft is. And so you need to be able to have like some way of tracking that. And we're excited through the tech that we're developing to be able to track the beam with us as it changes for more dynamic trajectories. Can you talk a little bit about the long-term mix of customers? that we're developing to be able to track the beam with us as it changes for more dynamic trajectories. Can you talk a little bit about the long-term mix of customers? I mean, we've all been following Delian's trajectory

with Varta. He was talking about ZB land at one point, then it was Pharma, now there's some DoD mixed in there, some government contracting. It feels like a lot of these companies that are doing stuff in space or doing stuff in hard tech, it's dual use Is there a government angle here at some point or is that just something you're thinking about in the future?

No, it's it's very near-term. It's very real term Very real term very very real real Yeah across a number of different applications. I mean they're dealing with the same challenges like if not even more so where like they have aging assets that are kind of infrequent. There's certain networks that just don't have a lot of assets, and they're old, and they're vulnerable to outages, whether it's an intentional outage by somebody targeting that site or not.

And so there's been a lot of interest in how that they can leverage commercial to get sites deployed quickly. Like for us in the conversations we're having, we're really emphasizing like we can deploy capability quickly and we can serve up capability that's quite scalable. So if one of those outages happens, you'll have that backup and that resiliency. And so as government use know, government use cases,

like so much of our world runs on space in a way that I think people don't really realize. And so it was, you know, that's been a refrain that you're hearing more and more through government stakeholders where there's this concern on, you know, if anything goes down in space or through the ground connectivity,

it has ripple effects through like a lot, a lot of our critical infrastructure. And so for us to be able to deploy capability that can enable resilience there is something that's definitely resonating. This might be a silly question. Are you guys already making hardware that's actually on satellites? And if not, is that something you would do at some point? Because I imagine when it comes to reliable communication,

you're somewhat reliant on the technology that's actually on the craft. Yeah, it's a great question. I think so far we've been pursuing partnership there. But if the need presented itself to stretch onto that side, we have amazing engineers that would be very capable of doing something like that. But yeah,

there's kind of a decomposition happening right now where there's a, there's one company that just makes the satellite buses. And so you could imagine that there's a different company that makes, oh, just downlink connectivity. And then you kind of vend all that together and then you do the important thing and you can focus your company a little bit more. Exactly. Exactly. Like that's, that's the vision where, you know, in the same way that a developer doesn't need to think about their

cloud resources or networking or any of it, it's just like you just focus on building and yeah, the rest is kind of- Yeah, focus on that key value creation. When did you initially start researching or catch the space bug? When did you get into this? I mean, honestly, it was around that, that time of the, um, you know, prototypes that we were making, uh, my husband Griffin is our CTO. And so, you know, we were just, uh,

working on those prototypes during the pandemic. And, um, I feel like I don't pursue things. One does. Some, some people were, you know, baking, some people were podcasting sourdough bread, but a lot of like new founders coming out of the pandemic to totally. Yeah. Too much time on your hands. We were fortunate to be in that position. But yeah, can't do something casually. I was just like, all right. And then after we did that, we kind of like,

you know, wrote a white paper with commercial folks and then we did another one with some government stakeholders and like, damn, like this is a really critical vulnerability in the space industry. It kind of took off from there. So five years of work to get here. Can we play the overnight success sound? Overnight success.

But congratulations on the funding round. Really, really, really great conversation. Really incredible milestone and congrats to you and the whole team. Come on, next time you're in the news. What are you guys drinking over there? Is that a yerba mate? That's a year. I am I am I key big year, but

John's Wait, this is like endorsement or something. But yeah, we have the trifecta the Holy Trinity Red Bull Very Lindy. Lindy. Holy Trinity. The Holy Trinity of energy drinks. Anyway, have a great rest of your day.

Thank you so much for coming on the show. And we'd love to have you back when there's more news. Thank you so much. Cheers. Bye. All right, have a good one. Bye. Let's close out with some timeline.

What else we got? Oh, Mike Newp new former guest on the show has Released the results from open eyes Oh three model, which everyone's raving about on arc AGI and so his takeaway is that oh three medium because there's a million different varieties now for how in how Intense and how long-running these these reasoning models can run for. But 03 Medium is the industry leading AI reasoning system by a large margin, 2x the score and 1 20th the cost compared to the next leading chain of thought system

as measured by Arc V1 semi-private set scoring 57% for $1.50 per task. And that's interesting because we talked to Sean Swicks about how Google was dominating in this Pareto frontier of model capability versus cost. And we talked about this with Logan too, how Google has been dominating in these benchmarks and then cost.

But Arc AGI is this completely separate benchmark from MMLU and LM Arena and Human he made his last exam and all these other things that are, ArcGi, it's so simple, it's these puzzles, but it's in some ways harder to game or harder to optimize for apparently. And so he says his key question for released 03, is it more like 01 slightly better than pure LLM on novel tasks or more like O3 preview?

I love opening eyes, naming scheme. Keep it simple, guys. It makes it really hard to do my job. Qualitatively new capability to solve problems outside training data. And so we are going to be following the Arc AGI development very closely. He closes by saying Arc V2, which is the latest puzzle eval that he released, ARK V2 still has a long way to go, even with the great reasoning efficiency of 03. New ideas are still needed. He called this when he came on the show. He said, we haven't evaluated the new OpenAI models yet.

We've heard rumors about them. We think they're great, obviously very economically valuable, obviously amazing tools. We love them. But in terms of Arc V2, they're not solving that fundamental problem. And it raises questions about is it AGI? Is it 10 minute AGI? Is it it's AGI that can do like IMO level math, but it can't solve a puzzle that a kid can solve. It's a different type of intelligence. And I think that's great. I think it's amazing for the economic impact, but we still got our edge. Still got it.

We still got it. Humanity is not done yet. But anyway, let's move on to some news. The United States banned artificial dyes from all food products effective yesterday. Yeah, this is big. We gotta get Call get Cali, West Amer's co-founder on to come break this down. I don't have full context.

It seems like it's going to be incredibly disruptive to big CPG. Can you imagine trying to reformulate M&Ms? M&Ms, they've been making this for 100 years. Get ready to have some gray M&M's folks. They're still gonna taste the same. Actually we'll see if they taste the same if they're not you know the color of the rainbow. Yeah. But I think this is good there's plenty of evidence that these different dyes like have really terrible impacts on health and especially considering that kids consume these and they don't have the same ability to reason. I have a different take. I think natural immunity of the human body is

incredibly resilient and so as long as you build up a tolerance to the poison, you're going to do fine. So I would say just start slowly, micro dose the M&Ms, build up your tolerance and then you take a ton of artificial dye. No amount of artificial dye could do anything to me at this point. I have consumed so much Celsius and so many processed foods that I am invincible. Some people say, you Bruce.

Yes, thank you, thank you everyone, thank you. Yes, I'm unkillable by the American food industry. Let's end the show there. We got to get on with Taipei we do but we will see you guys tomorrow. See you tomorrow a show. Thank you for tuning in We'll see you tomorrow. Thank you to the incredible corporations that make the show possible. Thank you