TBPN Live - Crémieux, Tess Cameron, Eoghan McCabe, Pippa Lamb, Jack Dreifuss, David Tisch, TJ Parker, Surprise U.S.-China Trade Deal, Trump EO on Drug Prices, New Air Force One in 2025?, Perplexity Valuation Surge

Episode Date: May 12, 2025

Crémieux is a writer who explores genetics, econometrics, and demographics. His work blends data-driven analysis with cultural insight, earning him a loyal following in intellectually curious circles.Tess Cameron is an emerging voice in venture capital and technology commentary. She is known for her work analyzing trends in consumer tech and startups.Eoghan McCabe is the co-founder and Chairman of Intercom, a customer messaging platform. He previously served as CEO and is a vocal advocate for design-led product development.Pippa Lamb is a partner at Sweet Capital, the investment firm founded by the creators of Candy Crush. She focuses on early-stage investments in consumer and wellness brands.Jack Dreifuss is a venture investor and entrepreneur involved in tech and finance circles. He is known for working at the intersection of emerging technologies and startup incubation.David Tisch is the Managing Partner at BoxGroup, an early-stage venture capital firm. He’s invested in companies like Warby Parker, Airtable, and Harry’s.TJ Parker is the co-founder of PillPack, an online pharmacy acquired by Amazon for nearly $1 billion. He is a trained pharmacist who helped modernize prescription delivery.TBPN.com is made possible by:Ramp - https://ramp.comFigma - https://figma.comVanta - https://vanta.comLinear - https://linear.appFigma - https://www.figma.comEight Sleep - https://eightsleep.com/tbpnWander - https://wander.com/tbpnPublic - https://public.comAdQuick - https://adquick.comBezel - https://getbezel.com Numeral - https://www.numeralhq.comPolymarket - https://polymarket.comFollow TBPN: https://TBPN.comhttps://x.com/tbpnhttps://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235https://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV(05:48) - Surprise U.S.-China Trade Deal (22:17) - Trump EO on Drug Prices (35:39) - New Air Force One in 2025? (43:04) - Perplexity Valuation Surge (46:03) - Crémieux (01:04:09) - Tess Cameron (01:31:58) - Jack Dreifuss (01:45:04) - Pippa Lamb (02:02:54) - Eoghan McCabe (02:32:04) - David Tisch (03:05:34) - TJ Parker

You're watching TVBN. Today is Monday, May 12th, 2025. We are live from the Temple of Technology, the Fortress of Finance, the Capital of Capital. We are wearing white suits. You know what that means. The market is ripping. The market is ripping.

I never doubted it for a second. Never doubted America for a second. Never doubted the market for a second. We were never gone. And yet we are so back. We are so back. We are so back, John. And we got a great show for you today. We were never gone. And yet we are so back. We are so back. We are so back, John. And we got a great show for you today.

We're diving into... We got a bunch of fun stuff. We're talking U.S. China trade deal. We're talking Trump EO on biotech. We have a few biotech folks coming on talking about drug prices, talking about... T.J. Parker himself. T.J. Parker's coming on.

Cremew is coming on, a couple other folks. We have, here, here's the full breakdown. We're gonna dive through everything. We're gonna give you a market recap, break down the US-China trade deal, break down the Trump EO on drug prices. Is there a new Air Force One coming in 2025?

Polymarket has an analysis. There's a whole bunch of rumors. There's a piece in the Wall Street Journal about it And of course perplexity is raising more money there in they've advanced from regular talks to advanced stocks. It's big news It kind of is with perplexity it's a young company then we have a whole bunch of guests coming on commute us Jack Pippa Egan and Gabriel, and then I think we got cut off at the end because we have even more people towards the back half of the show.

We have maxed out the number of slots on our graphic and we will have to advance and go deeper and get a better graphic in the future. Anyway, let's kick it off with this post from Joe Weisenthal, the stalwart. He says, recession odds are way down from the highs, though still up substantially from the start of the year. So things are looking better than they were a week ago,

two weeks ago, three weeks ago. I think we got up to, what was it, 60%? 60%. At one point. But we're pulling through, we're doing okay. And now it's down to 42%. Probably has multiple holes in his wall Just slamming slamming this new order coming but not today not today Ray not today Ray Yeah, Joe isn't all summed it up. He said the two biggest losers today are people hoping for a Trump led economic catastrophe

Keep going members of the big chess party thought that the terror announcement was some brilliant strategic plan that would reshape the global economy. That's so good. In a way that was beneficial for the US. And so, huge win for the nothing ever happens crew. Yes. Because we essentially round tripped right back where we started.

The market went down, the market went up and we're back right where we started. But yeah, the nothing ever, the, the nothing ever happens on the poly market party for, uh, the nothing ever happens may poly market is sitting at 80, 78% right now. I can't tell if you're joking. No, they actually have a market. Nothing ever happens. Yeah, here. How do they measure whether something happens? Well, I think we would know if something happened, you know?

Yes, we would know. Yeah, you'll definitely know if something happens. Here, I'm gonna have the team pull it up. Okay, pull that up. Guys, we have a screenshot. These are also macro podcasters. Yeah, yeah, yeah. Yeah, it's wild.

But you got to give us credit here. A couple of weeks ago when the tariff news hit, we were very cautiously neutral. I guess we were kind of in the camp of nothing ever happens. But I was saying this feels, given the markets off, it feels like COVID. It feels like the interest rate hikes. It feels like oh wait, crisis. We could eventually, if this gets really bad, we could see thought leadership pieces

from venture capitalists about this. But what did we say? We said that- Sequoia didn't- They didn't drop the memo. They didn't go first. They didn't drop the memo. They didn't drop the memo because the nature

of this was different because it was self-inflicted and therefore it could always be pulled back and that's exactly what we've seen. And so we went there and back again and we're back where we started basically. But there's some good stuff in there, there's some bad stuff. I think I have some opinions and Jordi has some opinions

and we'll break through. But Q-Cap summed it up nicely, said, come tell us about the US empire collapsing, honey, and Ray Dalio's in the attic, very sad. It's a great post, great post. Anyway, the surprise US-China trade deal gives global economy reprieve. Tariff reductions are bigger than expected,

and Besant says neither side wants to decouple. So a few days ago, it would have seemed almost impossible. We're boys again. We're boys again. Did we just become boys again? Yes. Seems like it. Everyone loves each other. We're boys again. Did we just become boys again? Yes. Seems like it. Everyone loves each other.

When the announcement went out yesterday, I read it, the one that was on the White House website, I read it as very soft. Like nowhere in that announcement was anyone taking any type of real victory lap, if you actually read between the lines. Yeah, but it's soft in what way? Like soft, like this is not a deal.

We got some things that we wanted. Okay. But not anything specific. Yeah. But anyways, we can go forward and. That's weird because normally, I mean, I feel like the White House press release is always gonna be different from the Trump truth social post,

which is probably gonna be claiming victory in like the most aggressive fashion. But yeah, even that, I haven't seen very much aggressive, like we won from the Trump camp broadly, so I don't know, that's kinda weird. Because we're back where we started. Close to where we started, yeah. And yeah, I mean, has anything changed?

I don't even know, there's some tariffs that are sticking around, I guess. Offline earlier, you made a good point, which is that even if nothing changed the mindset of the American CEO executive team, is that after this is that generally you can't bet on stability with China forever. And if you're not willing to think about alternatives.

We haven't even talked about that hat. It's so good. Just drop that hat. Drop the hat. Just no comment. Yeah, so anyway, my thesis here, I'm not trying to be like a shill for the history of the last three weeks.

I think it is pretty chaotic. But the interesting takeaway is that in the intervening period, you did see a lot of CEOs think seriously about what, what it would take to reshore what it would take to build a new factory in America, shift to a contract manufacturer in America. Some of those deals probably got signed and will stick just because the the immense pressure of the hundred and forty five percent tariff meant that okay let's work a deal and then enough of that

happens and then maybe some of those deals stick around where yeah sure it's not as competitive as if we went back it's not as cheap as if we went back on our move to move. We moved to America. We could move back now because the tariff's kind of gone or it's dropping, but we always know that there's this risk that the tariff comes back. It made the idea of a really, really bad trade war

very, I don't know, real. Like it felt real. And so this happened at the end of Q1. There were a lot of Q1 board meetings that happened during that era, like the Trump trade war era. And it was short, it was short, but memorable, but a lot of those a lot of those people probably at least walked through the question of what would it take to decouple. And somebody could push back on that and say, Trump could have just said, hey, in 2026, we're going to be implementing, you know, 145% tariffs in these industries, you have a year to make changes so that your business survives and we can, you know, reshore the industries that are strategically critical. That would have been the lower volatility option. Yeah, but if you like volatility, then.

Yeah, if you're long vol, you hate that. Yeah. But I mean, seriously, if that had been the plan, if it had been, hey, there's 145% tariffs coming in a year, do you think that the Q1 board meetings would have been that serious? Because a lot of people would have said, well, like, yeah, we probably should get started about thinking about finding a co packer in

America or think about how we route our supply chain, et cetera, et cetera, as opposed to all hands on deck. Let's go and make this a priority. Let's go and see if there's an option here. So I, I don't necessarily think it's like a good outcome. I don't really know, but I think there's something here. There's like a silver lining where at least most executives went through the mental exercise in the last month of what would it look like if we did decouple with China and some, and some of those CEOs will say, you know what,

let's actually just do that plan now. And I don't know that that's going to be a huge boom in re-industrialization or completely reshape the global economy or world order, but at least American companies are more prepared now. So I think that that's like maybe I would call it a silver lining, not like this was how it was always planned to be, and this is like the good out. Big chess. Yeah, yeah, I'm not a member of big chess,

but remember we talked to Jordan Scheider at China talk. And I was like, Jordan, like you're all doom and gloom right now on this trade war. Is it possible that in six years, or we're talking about this like we talked about the first trade war during Trump won, which was like not great. And all the economists said that one was bad, but like we got through it and it was okay.

I was kind of in the nothing ever happens camp. And he was like, no, no, no, this, this one's different. It's so much worse. And I was like, but Trump can just roll it back, right? Like he could do that. I'm not saying predicting that he will, but like he could. And he was like, oh, but no, it's like, this is different. This is way worse.

And I think I'm right. I think I got him. I don't know, we'll have to see. We'll have to roll the tape and get him back on and actually debate it. But it feels like this could be a win for team. Nothing ever happens. Yeah, right now the market is certainly

pricing that in John. But it's also just a 90 day pause. And so it's totally possible that things heat back up, right? And then we could be talking about Disaster and more trade war but hopefully not because we're buddies now. We're friends. Yeah. Yeah, we're boys again Yeah, we're boys benchmark go forward with your man That was crazy that that kind of came at the end of the week, but yeah that the Treasury Department

Investigating them. Yeah, I'm interested to see how that that works out. Yeah you really saved Sonya when I asked her that question. Yeah you really put her on the spot. I don't know why not I'm like I have to train myself that not every VC is as loose-lipped as Deleon yeah and some of them have decorum. Yeah yeah they don't like to talk about other I'm just so used to like oh well yeah like Dellian will talk about any deal any company any other VC most other VCs are diplomatic but not Dellian so that's why we have him on sometimes that's why we have the diplomatic VCs on sometimes anyway let's go through what actually happened with the US-China trade deal the world's two biggest economies unwound for now

most of the tariffs they had imposed on each other since April in a tit for tat battle that was threatening to stoke US inflation, crash China's export engine, and upend the global economy. Stock markets in the United States and elsewhere surged on the news. The dollar and bond yields rose, reflecting expectations for faster US growth as trade tensions recede.

Exporters breathed a sigh of relief. I'm sure Ryan Peterson got his first sleep score above 50 in a month. He deserves it. He does. Investors and analysts said the outcome was much better for the global economy than they had expected on Saturday when the US and Chinese negotiators started two days

of intensive talks at the Geneva residence of the Swiss ambassador to the United States. Great setting. Great setting. Great setting. Probably some type of lake view. Yeah. I would have to imagine. Yes.

It'd be hard not to have a lake view in Switzerland, to be honest. Yeah. Switzerland's kind of set up to be this like neutral. Kind of like Switzerland. The Switzerland of negotiation. Yeah. Yeah. Geopolitically.

Yeah. It's kind of like the Switzerland of geopolitical negotiation. Yeah. Exactly. That's right, John. It's pretty sweet. Yeah, it's kind of like the Switzerland of geopolitical negotiation. Yeah, exactly. That's right, John. It's pretty sweet. The US agreed to lower the base level of tariffs on most Chinese goods to 30% from 145%. While China said it would cut its levies on US products to 10% from 125%.

Wow, pretty good. The 30% rate imposed by the US includes a levy, levy, levy, related to China's alleged role in the fentanyl crisis plaguing the US and issue in the weekend's talks. The US tariff on many Chinese products will be higher than 30%. US duties on steel, aluminum, and autos remain in place, as do some earlier tariffs on certain Chinese goods

imposed during President Trump's first term in office and that of former President Joe Biden. Yeah, it's we're getting to the scalpel, not the sledgehammer. Everyone says, Oh, you know, the precision doge is too much of a sledgehammer should be more of a scalpel. There is there are things you need to cut. Same thing with these tariffs.

They need to be targeted on specific industries that are, you know, important and strategic. Well, you know, and strategic well you know sometimes you got to use a sledgehammer before you get in there with a scalpel and clean things up I guess. Break things up a bit. Just smash it into pieces and then come in with a precision scalpel that kind of trim around the edges. But Washington and Beijing agreed to keep the new tariff levels in place for 90 days with the goal of working toward a broader deal on tariff on trade in further talks China said it would cancel or suspend some non-tariff trade measures it had imposed a hit back at the US potentially

excluding including easing export restrictions on critical minerals used in batteries and other high-tech applications speaking at a news conference the Treasury Secretary said it was seeking a long-lasting and durable trade deal so it's just a you know a negotiation and they're renegotiating everything. Neither side wants to decouple, he said. We're a couple. We're a couple. We're a couple.

We're couple-maxing. We're couple-maxing. Just a couple. Yeah, the U.S. said, the best in the U. the US still had grave concerns about its unbalanced trading relationship with China, which is legitimate. He cited issues such as China's management of its currency and subsidies for manufacturing, which Washington believes are a major factor driving factory job losses in the United States. Those and other issues will be discussed in talks over the next 90 days.

The outcome forestalls for now what was shaping up to be a destructive clash between the world's two biggest economies with potential ripple effects across the globe. Very interesting. Yeah, this was something that a lot of people in DTC were paying attention to, but retailers in the US were warning of empty shelves if they couldn't get Chinese products

and some small businesses were worried they would go under without easy access to China's vast factory floor. Economists warrant higher prices and shortages risk reigniting inflation. For China, an unrestrained trade deal with the US would threaten millions of jobs tied to serving US consumers

and potentially worsen trade tensions with other countries wary of a surge in Chinese imports. China was also worried about losing access to some US products it still needs such as Boeing planes, aircraft parts and certain chips. The other thing here is this was sort of under reported last week but the Chinese central bank was cutting rates in response to the tariffs so they clearly

were feeling the heat as well. So we were kind of ready to buckle down because the market was pretty resilient. If the market had truly been in free fall and there was no buy the dip meme, the DGENs saved us, you think? The American investor. The American DGENs were just like,

the prices are too low, I gotta get in. I gotta mortgage my house to go long. And the Fed and the Treasury Secretary, the Fed is just like, you know what? We don't need to go long. And the Treasury Secretary, the Fed is just like, you know what, we don't need to cut rates. The Americans are simply too bullish. They'll just never stop buying the debt. It's great.

But I mean, the one thing that I like about this is, I think the fentanyl tariffs should be pretty bipartisan. That seems like something where truly no one wins. You can make the argument about like a free market around electric vehicles and like competition being good for the electric vehicle market. I see a lot of stuff from Chinese EV companies and I'm like yes I want American companies to win but also I want those cars to be here so that there's more pressure on American companies to make cooler and cheaper cars like there's that crazy car that has

It's a EV but it has a gas engine that just charges the battery So it has like on a single tank you can go like 800 miles. It's like insane. There's a Chinese car that floats There's those Chinese cars that have like the the LED screens on the back so you can talk to the person behind you say like hey Stop tailgating me basically. Yeah, like all these cool features. All these insane features, some of which are silly, some of which are actually cool. Yeah, but I like competition in the market. I like free markets generally and I'd love to get there. I don't feel that way about fentanyl.

Like I do think fentanyl is so bad that it should just be banned and like China should do everything they can to stop exporting it. And so the Wall Street Journal writes, though the sides didn't come to an agreement over the fentanyl tariffs the US The US made clear in private meetings its views on the importance of combating the deadly drug Trump has accused China of playing a role in the illicit fentanyl trade something Beijing denies in a private meeting on Saturday

Besson picked up a bit of sugar out of a dish on the table and told Chinese officials that the amount he was holding could kill a person if it were fentanyl. Said a person with direct knowledge of the exchange. That's pretty dramatic. He picked up a little more sugar and said that amount could kill people across Geneva. Then he picked up more and said that could kill people across Switzerland. So dramatic. It's good though. He's cooking.

He's cooking. He's a showman. Trump likes a yapper, a talker, somebody who can present. Yeah, show. It's huge. Showbiz, baby. In a briefing with a small group of reporters, Besant said that although Fentanyl wasn't the main focus

of the trade talks, the Chinese delegation included a senior Chinese official who was able to discuss the issue in detail with the US officials. Such an official who at later press conference, Besant identified as deputy minister isn't usually part of the trade team, Besant said, and that shows their responsiveness to our concerns. So China actually sent someone, a deputy minister to say, Hey, we're not admitting guilt, but we're in the conversation where we're gonna send somebody who can actually speak to this particular issue, which I think is good because it's way harder to steal man.

Yes, they should be able to send as many drugs. They shouldn't be responsible for that. And it's like, our DEA, the United States goes into Mexico and hunts down drug traffickers, right? It's like our DEA, like the United States goes into Mexico and like hunts down drug traffickers, right? A lot harder to do that in China. Like they do not want us sending our like DEA guys kicking down doors in Beijing if they are doing fentanyl. Yeah, and to be clear, the cartels are the ones

that are basically distributors for the fentanyl. And their position is we wouldn't do this if there wasn't a buyer in America, right? Yeah. And so naturally I think you need to go but normally upstream and put pressure on the source. How much pressure, right? Because that does have a cost.

Like America has been waging a war on drugs. There are negative externalities of that. There's a cost, right? We have to pay for DEA agent salaries. We have to do a lot of different things. We wind up locking people up in jails that cost money. We have court systems that cost money. Like, it all is a tax on America when we fight

the drug trafficking that happens in the United States. We don't really have the ability or authority to do that abroad, so we have to ask China ask China to say hey invest in preventing fentanyl. Yeah, you certainly invest in the local Dissemination of it and you have drug policies there, but we want you to take that as seriously even if they are just leaving your borders So it's a potentially a strong step forward. I'm Optimistic about it. Anyway, let's move on to the I'm optimistic about it. Anyway, let's move on to the prescription drug executive order from Donald Trump.

He posted on- He was like, he's like, yesterday he's like, it's feeling like a slow news day. We only announced a potential trade deal. Let's fast follow, you know, with, you know, a little Sunday to just shake up the biotech. So I'll read a little bit about what Trump actually said. He said, for many years, the world, capital W,

has wondered why prescription drugs capitalized and pharmaceuticals in the United States of America were all caps, so much higher in price than they were in any other nation, sometimes being five to 10 times more expensive than the same drug manufactured in the exact same laboratory or plant by the same company? Question mark, question mark, question mark.

It is a good question. I think a lot of people have asked this both on the left and the right and we'll go into Bernie Sanders plan and how that maps to Trump's plan. And then we'll talk to some experts about is this, are we, should we be cautiously optimistic here? Is this great? Is this terrible? Price controls, usually pretty bad

from an economics perspective, but this is something different with this most favored nation strategy. So it was always difficult to explain and very embarrassing because in fact, there were no correct or rightful answer. The pharmaceutical drug companies would say for years that it was the research and development costs

and that all of these costs were and and would be, for no reason whatsoever, borne by the suckers of America alone. Campaign contributions can do wonders, but not with me, not with the Republican Party. We are going to do the right thing, something that the Democrats have fought for many years. Therefore, I am pleased to announce that tomorrow morning I will be signing one of the most consequential

executive orders in our company's history. Prescription, drug, and pharmaceutical prices will be reduced almost immediately by 30 to 80%. They will rise throughout the world. Of course, that's a prediction. We need to figure out if that's actually gonna happen because the way this is structured,

they don't actually have to reduce prices. They might just raise prices elsewhere. But of course, this question. The NASDAQ biotech index is up 4 up four percent today insane. No one was expecting this uh, and and we can go through some of these, uh, some of these posts, uh, but delian Uh said biotech markets are going to be a bloodbath on monday kicking the dog when it's already down I thought this was a good take. I liked it. I posted something similar I went to deleting my post because I was like, I look stupid now

um, and sharp shark on the next post says, has the Grim Reaper going from door to door, just killing biotech over and over and over again because biotech's had a hard go and seems that they can't catch a break. And then Sheil, friend of the show, says, this is a policy that was proposed by Bernie Sanders in 2018, horseshoe theory again, Bernie Sanders' new plan

to bring down drug prices briefly explained the plan from Sanders and Rep. Ro Khanna. Which is boring for his- Let's see, Bernie and Trump love PJs. Bernie was getting flack recently because he was using a PJ on the campaign trail. And he said, do you really expect me to sit at a United terminal?

Yeah. When I'm getting paid? He said that? Yeah, he said that you really expect me to sit at a United terminal? What I'm kidding. Yeah, he said that. It's crazy. So Bernie and Trump have far more in common in many ways than at least many people would think. Yeah, they're more alike than they are different. They're both Americans.

They're both Americans. So TJ Parker, who's coming on the show later today, summed it up, he said, my initial take on the Trump drug pricing announcement, I could probably be convinced that a global, most favored nation is a reasonable approach. The problem is even the federal government doesn't always know the actual net price

of these drugs today. That's why I've always argued that you have to kill rebates first. It's the necessary precursor. The optimistic take, forget rebates, forget margin buried in GPOs, just mandate a global MFN on list price and pharma will be forced to unwind

the entire web of rebates fees and other unnecessary complexity. My guess is that's the rough logic given the failed rebate repeal attempt in Trump 1.0. It will be nearly impossible to implement cleanly, but if it worked, it could be a brilliant end run around the current system. Now his pessimistic take. I still believe that the best long-term strategy is to let market forces do their jobs, put power in the

hands of consumers and let competition drive down price like every other retail category. That's more consistent with our capitalist instincts and more American but so far that hasn't worked it's been a disaster so maybe I'm wrong and so we'll have him unpack his his his takes a little bit more. And we're also bringing on Cremew in about 20 minutes at 11.45 to talk about, answer this question, like does the US actually overpay for drugs? He says common knowledge says yes,

but the real data says no, because the US gets favorable prices for generic drugs And it primarily consumes generic drugs. In fact, they're 91% of prescription So I'm excited to talk to Cremu about some of his analysis here. He's a great accountant and author on X So let's go through some of the Wall Street Journal analysis of the EO aimed at lowering drug prices and break it down for you all.

The executive order seeks to institute a policy known as most favored nation. You guys probably know about that. Seem this is a safe note. That's the first time anyone's interacted with an MFN. When you're in founder mode, you deal with MFNs and the saves. Well, now biotech companies will be dealing

with the same clause globally. It was a big moment when YC added the MFN clause. You remember that? Yeah, maybe JD got in there and was like, hey, I've heard about these things, MFN clauses. They're working really well in Silicon Valley. Could be a thing. Could be a thing.

So the US government pays prices for drugs that are tied to the prices paid by other countries. Many other countries pay lower prices for Medications because they're single-payer health care systems negotiate for deals Basically what we're doing is equalizing Trump said Monday before signing the order at the White House He also said it was unfair for the US to shoulder the costs of research and development for pharmaceutical companies American patients were effectively subsidizing socialist healthcare systems. Americans often pay higher sticker prices for drugs

than people of other countries. For example, the list price of diabetes medication, Jardience, I'm probably mispronouncing that, was $611 for a 30 day supply last year according to health research non-profit KFF, compared with $70 in Switzerland and $35 in Japan. That's a pretty big delta.

You can see why this is an issue. So the EO directs the US Trade Representatives and Commerce Department to take any appropriate action against unreasonable and discriminatory policies in foreign countries that suppress drug prices. It also gives RFK Jr. 30 days to work with pharmaceutical companies on how to lower prices. If the drug companies don't lower prices within 180 days, the order gives Kennedy and others authority to propose

rules and restrictions on drug companies and imports. The order doesn't specify whether pricing changes would apply to Medicare or Medicaid, suggesting that its impact could be broad and apply to commercial insurance. A White House official said that lowering the prices of drugs for those who use Medicare Part D would be a strong focus but didn't specify which medications. Hopefully it's Trendyball, Anivar, testosterone. Just the essentials. Just the basics we are paying the cremeux actually posted like a

post from the from a bodybuilder saying that like he's actually the bodybuilders actually fine with the current structure because It where is this let me find getting imported He said I really like the status quo with pharmaceuticals where people with good insurance and lot or lots of money get built Hard to fund new research so that high agency people like me can buy cutting-edge Experimental drugs from a great from gray market websites for a fraction of the price Body build the bro science always ahead of the curve it is Yeah, one one

Analysis I got that I don't think is public at this point, but I think a number of people have had this reaction is that MFN pricing in general will likely face lawsuits on constitutional and administrative law grounds. If Congress can pass a new law, this would change. But an MFN like benchmark could be folded into legislation as part of some type of like Medicare price negotiation, right, which happens frequently or international reference

pricing. And people are kind of theorizing that you could roll this idea into legislation in the reconciliation bill in the House. But then that's just gonna be another factor that could potentially get that not passed in the first place. And so I think people were posting yesterday

when this news rolled out, like drug prices are gonna drop tomorrow. And I don't see that happening, but I'm interested to talk to TJ later and just get a sense of how real price drops are going to be, if they're gonna happen, if they are, what is the actual schedule, things like that. Well if you're trying to save money,

switch your business to ramp.com. Time is money, save both. Easy to use corporate cards, bill payments, accounting and a whole lot more, all in one place. Thank you to Ramp. Thank you to Ramp. Thank you to Ramp. Switch your business to Ramp. It is, I mean, it is a controversial decision because it is government price setting.

The Wall Street Journal has this quote from Alex Shrivner, the Senior Vice President of Pharmaceutical Research for Manufacturers of America Trade Association representing major drug companies. Government price setting in any form is bad for American patients at a time when we are facing growing competition from China. Policy makers should focus on fixing the flaws in the US system, not importing failed policies from abroad.

Yeah, so an example here is rent controls. So rent control in many cities have, if anything, been detrimental to the poor. A meta-analysis of over a hundred studies showed that rent control often leads to reduce supply of rental housing as it discourages new construction and investment. So the comp here would be if pharmaceuticals

can't charge what they want to charge, they will invest less in R&D. Whether or not that ends up being true, I'm sure could be debated as well. But a 2017 study by Stanford Economist found that after rent control was expanded in San Francisco, landlords removed 30% of the newly controlled units from the rental market, leading to a 15% decrease in the city's total rent housing stocks. Property owners are more likely to neglect maintenance of their apartments. And a National Apartment Association study in 2024 found that doubling the number of rent

controlled units in a metropolitan area correlated with a 16% increase in severely inadequate housing units indicating a decline in housing quality. So again, just a good kind of reference when thinking about price. I mean, one option is that they lower prices in America, but the other option is that they just raise prices everywhere else. And if they do that, they might sell less drugs overall, because people can't afford them in other countries. Although when the examples of like Switzerland and Japan, I feel like if Americans can afford $611 for diabetes medication, like the Japanese should be able to as well because they have similar cost of living and similar GDP per capita. So I wonder, would they really see a drop off in consumption or would they just see

higher overall revenues and ultimately higher profits? Well, it's possible. It's possible. I mean, I mean there's so many different factors, but one scenario is that there are alternative drugs in those countries that you can get that are generic, that are very inexpensive. And so the only way these American drugs can compete that aren't generic is to just have massively reduced prices and so if you're a you know pharmaceutical company, you're gonna say well we're making this for the American market and Then as a bonus we'll sell it over here because even at

$35 a dose or we still have amazing margins. Yeah, right It does it is always odd when you run into something where it's like, you know Yeah, like you buy a car, you know, it's a big vehicle It has a lot of metal so you kind of expect it to be like tens of thousands of dollars You go to the gas station like the gas costs money and it's very obvious that it's like well It costs money to pump it out of the ground deliver it to you So it costs certain amount of money but people always said this was like Facebook where it's like why don't they charge you like if they if you're not being charged like

you are the product. And with healthcare, it feels like sometimes it's the opposite where it's like, did it really cost $10,000 to drive me in the ambulance two miles? Like how did that happen? And I get that my insurance paid for it, but like something weird is going on here

because like it just doesn't track at all. Whereas with many other things that you buy you're like Yeah, it would basically If people were paying out of pocket they would be like wow I'm getting scammed by this company exactly But they get the bill and the insurance covered it. So they're like, oh like Yeah strange, but it is it is very odd even even with like like there's a lot of R&D that goes into the iPhone and you buy it And it's a thousand dollars and you're like, okay. Yeah, that actually kind of makes sense that like checks out Yeah, like like sure, you know that they can manufacture these for 300 and they're charging 900

But that margin goes into the R&D and I get that but it's weird when it's like, you know Something that's the costs two cents to make and they charge $10,000 for it. So, I mean, healthcare's always been like an odd quagmire and clearly, I mean, everyone seems to agree on both sides of the aisle that like something's off in America and that it's not particularly working well. And maybe that's, you know,

hey, we need to just be healthier and eat healthier. Maybe it's we need different drug prices or different insurance policies, but I'm sure there'll be a lively discussion this week all about it. But if you are long biotech, you're short biotech, you gotta express your views on public.com investing for those who take it seriously.

They got multi-asset investing, industry-leading yields, trusted by millions. Let's hear it. Boringpublic hear it. Anyway, let's go. They have a big launch this week, which I'm excited for. Let's go into another Trump story. There's so many. It's just been a busy weekend. Trump administration in talks to accept new Air Force One as gift from Qatar. The Qatari government says possible transfer of plane for temporary use is under consideration. Obviously this was

burning up the timeline. People very very very confused about this because apparently America has two brand new 747s that they're actively retrofitting. Did you see this take? Yeah. That they're like actively working on getting up to par and the plane is like the least expensive part of air force one. It's like all the military equipment stuff on there. So this feels like it was designed just to cause chaos basically or something. But it's like of all the different things. Anyway, the, the article here's, uh, uh, they're in talks with the Qatari government into about accepting a luxury Qatari plane for his use as president and potentially beyond

according to people familiar with the matter under the potential arrangement which is raising legal and ethical concerns the plane owned by the Qatari royal family would be used as Air Force One while Trump is in office after being retrofitted by a US defense contractor the US wouldn't pay for a luxury 747 style jumbo jet. It might then be gifted to the Trump presidential library for Trump to use after he leaves office. And so obviously people are very up in arms about this.

Sean McGuire said, the mainstream media has been wrong about so many things over the last few years, so I hope this is just more fake news, but if it is accurate, it would be the first of Trump's actions in this term. I find unequivocally wrong. Qatar uses money to silence people and by favor. And Josh Wolf is quote tweeting Sean saying Qatar played him perfectly. We will get you the American hostage. We will get you a new shiny plane, the best plane bigger than any other presidential

plane, not just air force one air force one mega supreme. And then you will retire to your library. No president will ever afford such a beautiful, huge plane. We will help you bring peace to the mid East and help you win a Nobel Peace Prize. A lot of that sounds good. I want peace to the middle East. The Obama book deal, they could have gotten a private jet, but it would have been probably,

Yeah. You know, more in the, This one's complicated for me. Not flying international. Yeah, it's complicated because the regional airports obviously I think like foreign governments should not be trying to curry favor with our electric officials period Yes, but I'm a huge huge fan of giving your friends planes Totally totally and we've actually put planes on our gift guides before I realized that so we're kind of to blame here

Because that's advocated for this. I believe a 7 So we're kind of to blame here because we advocated for this. I believe a 747 BBJ was on our Christmas gift guide. Probably. What's a better gift to the right person? I know. And so we kind of laid the playbook for this and then the guitarist just picked it up and they were like, Oh, well, you know, TV and saying this, like we should give it a try. Uh, but we'll see. I mean, the good news here is like, yeah, when you think about the scale, right? It's like, well, this would be like me getting you like a Red Bull.

It's like literally like, hey John, are you thirsty? You want a little pick me up? Do you want a Red Bull, right? It's like. From a balance sheet standpoint. From a balance. Now that you got me the Red Bull, I'm in your pocket. Value of the gift in the context of the balance sheet.

Yeah. It also is just so funny because it's not like, it would be one thing if like, I've seen some super cars that have been made in like foreign countries that don't typically produce, they don't have like large auto manufacturing segments, and they look very cool. And it almost makes sense if you made a plane to gift one to America to be like, Hey, like there's a there's a there's a Kenyan supercar company that looks very cool. I was like, this is interesting. It's mostly like a retrofitted Lambo. But it has like a very unique design. And it's and it has like, you know, all the like the colorway is designed to like mimic like, think it's from Morocco and cool. It's very, very cool. And gifting something like that to America would be cool just to say like, hey, we appreciate you America. You can put this in one of your museums. We're we're entering this industry and we're excited to partner with you. Hopefully we can distribute these in your country. We can make these. That would be one thing. But it's really just like, it's an American company, Boeing, that makes the 747.

We bought the plane, and we're gonna give it back to the president. And then America has to retrofit it, because Boeing has a contract for 3.9 billion to deliver a bunch of planes to Air Force One. And then L3 Harris is a smaller defense contractor, an American company that has to overhaul the Boeing 747 that was formerly used by the Qatari.

So it's like, American and Qataris just like in the middle being like, hey, we put some nice leather seats in here. Yeah, I mean, where the plane gets retired to is a big question. Sure. If it was given to the White House and it was gonna be effectively,

Yeah. You know, a presidential plane on an ongoing basis. Yeah. That would not be a lot of issues with it. You could argue, okay, Trump's getting it when it's brand new or whatever. But yeah, we'll see how this one plays out. The other downstream thing about this is like, as we're talking about, okay,

maybe we shouldn't accept this plane. Is it time to give back the Statue of Liberty to France? I think France has had- It's such an amazing monument. But every time you have to ask like, are we making shrewd decisions with regard to France? Totally. Are we being too nice to them because they've curried favor with us by sending us that monument? Yeah.

So if we send it back and say, Hey, we're done. It's going to be it's going to be a clean relationship by the numbers from here on out. Yeah, it's surprising you'd think that Trump would maybe try to draw attention towards that. You give the Statue of Liberty back to France, build one that's potentially five, 10 times as big in its place. I like that idea.

Honestly, I mean, I would be way more down for- And it's actually just from folding an American flag. I would be way more down for Qatar to give America a monument like the Statue of Liberty. Like we can have a Statue of Liberty all over the place. There could be one in Florida. There could be one in Alcatraz. We've talked about this. Catalina Island.

Put a ramp, put a ramp card in the Grand Canyon. A ramp card swiping the Grand Canyon. A ramp card swiping the Grand Canyon. That's a good idea. That's that's actually genius. lifted by blimps just cruising swiping the entire that's America runs on ramp. That's that's a very that's a very American thing. Something there and if Qatar could help finance that so I mean doesn't need to raise more growth equity for it.

And that feels like something that, it wouldn't be like, oh, Trump would have paid for that anyway, because the whole thing with this plane is it takes something off of his personal balance sheet, because he gets a free plane, but he was never going to buy a RAMP card that swipes the Grand Canyon Yeah, even if you should he showed you should objectively should so yeah, I mean I think that's a great idea

Anyway, speaking of sponsors linear is a purpose-built tool for planning and building products meet the system for modern software development Streamline issues projects and product roadmaps Also put your sales tax on autopilot spend less than five minutes per month on sales tax compliance. Go to numerallhq.com sales tax AGI benchmark series. Thank you to numeral numerals, you know all these Oh, yeah, they're on the hat. They're not yet. Not on the V1 actually this came in late. But we got ramp on there. We got the next one. We got wander bezel adquicks on there there even even roar right here

It's always in in my vision. Yeah, you can see it right? Yeah crazy Anyway speaking of news AI started perplexities valuation surges to 14 billion dollars new funding round You'd think this is from our for rock, but it's in the Wall Street Journal. Berber Gin got the scoop. Yep. To be clear, they are in advanced talks for a new funding round. They've advanced from talks to advanced talks. It's hard to know if this means they've signed a term sheet,

if they've done any type of handshake deal. But venture capital firm Excel is set to lead the new round, which is expected to total 500 million people familiar with the matter said. The raise underscores investor enthusiasm for general artificial intelligence companies, some of which have begun to challenge Google's longstanding dominance over search.

Perplexity was valued at $9 billion last November, its fourth round that year. That was crazy. That really went on a wild run. Insane. It is one of a set of AI startups that have grown quickly after the launch of chat GPT three years ago. The San Francisco based company sells an AI powered search

tool that provides summarized answer using information gathered in the web. Perplexity is launching its own web browser called Comet. Yep. And that is, that is what got, we were talking about Comet with Arvind on the show and he answered your hypothetical and got a hit piece out of TechCrunch for it. So.

It's not a hit piece unless it comes from the hit piece region of the New York Times print edition. But it was close. And it's not a Docs. It's not a Docs. Unless it comes from the Docs region of the Washington Post. Yeah.

But Eddie Hugh last week made news at Apple when he said that Google searches over Safari web browser fell over the past two months for the first time in more than 20 years. And he attributed that drop to more people using generative AI services such as Chat GPT and Perplexity. And so Q said Apple has held conversations with Perplexity, OpenAI, and Anthropic about adding AI search features into Safari, and so that would be a big deal if the iPhone kind of migrated away from Google. But it's interesting to see where this goes.

I'm excited that they have so much money. I like Arvind. It seems like a really, really tough market to compete with. Even in this narrative of like the application layer will be what's valuable. It's like, that's true, but you still have to aggregate enough demand to drive so much traffic to your application

and have a flywheel there. When you're in consumer search, it's not the same as, oh, like the bull case for Harvey is that they hire a bunch of great SDRs who can go sell into law firms. That's something that they can just scale up, I feel like, versus changing consumer habits from google.com or Google is my auto complete, right?

So huge challenge in a huge market. Interesting to see where it goes. The stuff that's interesting to me is they're doing these live earnings transcripts, which are cool. I saw that. But is that a $14 billion business, right? You know, sort of subscale providing the sort of

type of information that's not necessarily hyper relevant to the average consumer. We'll have to get Samir Gandhi from Excel on the show because he's joining the board and we will see what he has to say about the deal once it closes hopefully and hopefully the rest of it goes smoothly but we have Cremu in the studio here to break down drug prices welcome to the stream how are you can you hear us okay oh wow voice changer too okay let's go honored we're honored. We're honored. What's new? Oh, I think I'm using AI voice changer.

It looks a little bit clearly. We can't hear you at all with that thing. Is there any way we could turn this off? Yeah, it'll be, just check if I can use a pitch changer. It's strong. It's a little too powerful. It's a little too powerful. You're being overpowered by the AI.

Yeah. We wanted to read through some of your posts, see if there's anything that we could break down. That sounded a bit better. Let's hear it. Gotcha, can you hear me? This is amazing. Yes.

This is way better. Sound amazing. Thank you so much. Tremendous. Okay, great. So yes, what has been your take? Yes, absolutely shocking there. Anyway, thanks so much for joining.

Can you break down the news, the Trump executive order? How are you interpreting the news? How would you explain it to a lay person? So the idea behind the executive order is that we are getting ripped off because other countries are paying far, far

less for the same drugs that we buy in the U S for huge amounts. We pay a thousand dollars for Zempik and Denmark pays $40 and that's just not fair. So the idea behind this is that we're banning geographic price discrimination. We're making it so you can only sell at, you know, the lowest rate that another developed country is willing to pay for a drug. And how, how real is that?

Like, and, and what, what drives that? Like the Zempig example, uh, that's developed by Novo, a Denmark company. Are they just doing their friends a solid by discounting in their home country? Or does this apply to American companies selling abroad? And is it just like trying to capture any possible market at whatever price the local market will bear? Or is there something else going on

with the dynamics of like insurance companies? Bladder is exactly right. It is a group of largely American companies that are maximizing profits by selling at prices that allow them to, as I said, maximize profits. They're just selling at whatever the market will bear. And if a country will not bear American level prices, then they aren't going to be selling at those prices there

just for the simple reason of supply and demand. Why does America, like why can America bear such high prices? We were looking at the Wall Street Journal article and they were saying that for a particular drug for diabetes, Americans were paying $611. In Switzerland, it was 60 bucks, and in Japan, it was 35. But Japan has a similar economy to America

on a GDP per capita basis. They should be able to pay $600, in theory. What's going on there? So the thing is that GDP per capita is actually not a very great way of getting at consumption. The Japanese save more. They actually are quite unproductive in the service industry. Other countries tend to have far, far lower levels of consumption relative to GDP.

And this is especially true if they're a country like Ireland or Singapore, for which a lot of their GDP, their exceptionally high GDP, seems to be driven by profit shifting, where companies bring money over and doesn't actually affect the incomes much of the people who live there. So you'll see that Ireland, for example, has very relatively low gross national product relative to their GDP. They are able to consume considerably less than their GDP might indicate. But the US, on the other hand, consumes a lot more than you might expect because everybody else's GDP is kind of out of whack compared to ours. We are the world's consumers and as such, we consume a lot more and the prices we pay are actually quite in line with what you would predict given our consumption. Just to say that

prices grow a little slower than household income growth and the US has exceptionally high household income. The high prices and the fact that they are relatively low, both are facts that stem from America just being really, really rich. Why do you think the market, the NASDAQ biotech index is up over 4% today? Why do you think that is? I was actually just about to do a differencing exercise with that to see if the biotechs were up more or less than the rest of the market,

because they are benefiting from the fact that the tariff barriers are actually going down as well today, which is wonderful news for them. They, however, might not be benefiting as much as the rest of the market, so I'll have to go check that afterwards. Another thing is, there is a considerable expectation that this will fail.

This was attempted, there's actually a CFR entry for this from 2020, and it was shot down by courts. And then the Biden admin came in and they ended the whole thing. And there are a lot of people who believe that this will not be able to go anywhere because it'll run into some sort of issue. I'm going to tell them, no, the opposite. It will actually succeed and it will have pernicious effects. Because this is totally legal. Yeah.

Interesting. Can you talk a little bit about the US as an early adopter and how that shapes drug pricing? Oh, yes. So a large portion of the reason that the US pays so much for drugs is because our launch lag, the lag between getting the drug developed and getting the drug to market is so, so much smaller than elsewhere. To take an extreme example, the US's launch lag for new drugs is about six months versus

the UK's, which is about six years. Which means that if there's some new therapeutic that you really need, they'll probably approve that one pretty soon. But if there's a thing that's like an improvement on insulin, it'll probably take them many, many years to actually get that drug to market because they're just not willing to pay for it. They have considerable cost controls because they are a more managed care system. They provide a lot less care, and if there's something new that rules, but it's like a slight improvement on something else, they're going to go for the thing that is less expensive.

We are aiming to maximize our tech adoption, whereas they are aiming to, you know, constrain their prices and do as well as they can under a certain set of, a certain budget. You talked about potential pernicious effects if this goes through. Are you using what happens when rent control is implemented in cities as a comp here?

Do you think there's just going to be less R&D spend, less investment? What does that look like to you? So two things. We actually have wonderful models of this now, and we know how this played out in 1991. I'll talk about the models first. The models suggest that this naive expectation that we're going to lower our drug spending by 50 to 80% just cannot happen because we're gonna dynamically adjust prices. Prices are determined in equilibrium

and we're probably gonna get about a 10% reduction in the US, but we're going to see a very, very large increase in a bunch of our allied countries. So for example, Canada should be expected to see something like a 90% increase. They're a small market and they're gonna be facing a lot higher prices. That's not gonna be very good for them at all.

The total farmer revenues as a result of this will fall considerably because this forces them in order to comply with the regulation to price above the profit maximizing level in most other countries. This is bad for their returns and it's bad for the health of those countries. Now, when this was attempted in 1991 with the most favorite consumer model for firms, the

prices didn't change for drugs that were under patent with no generic competition because everybody's already paying those. The reason that we pay more for those is because we're the ones actually buying them and the other countries aren't really buying them very much at all. They don't do new drugs as quickly as we do. We do it way, way faster. Like sometimes it's an order of magnitude faster. There also was no change for just generic drugs in general, but there was a backfiring effect

and prices rose about 4%, which is not huge, but it's something for drugs facing generic competition because of the uniform pricing under MFN. The compliance costs were really bad. And there was an IRR shock such that the returns for the firms went down as a result. It was just not good for anybody. No winners. There are okay, some winners, I should say that back. There are some people who do win from this, there are minority and the future loses out because the returns to R&D go down and they're already very low. And if you get less R&D, then you get less improvement in the future. and if you get less R&D, then you get less improvement in the future. Can you dive deeper into R&D? As I understand it, there's basic science research that's done at universities. Kind of the foundational research on DNA might come out of an academic lab that's funded as a nonprofit.

Maybe there's NIH grants that go in there. Then at a certain point, a biotech company raises essentially venture capital, maybe gets acquired or IPOs and rolled into one of the big pharmaceutical companies. There's losses and losses and losses for years and years and years. And then at the last second, there's a blockbuster drug that makes a billion dollars and the math works out

but on a 10 year, 20 year time horizon. Is that in a good place? Should that change over time? Like what is your view on, on how we as like humanity are paying for drug development right now? We are paying way too much for drug development. We are paying out the nose for something that is not nearly as efficient as it could be. And we know it could be a lot more efficient and a lot better targeted and everything else

because we know that other countries are doing it well. For example, China in 2016 introduced wonderful trial reforms that we should have had, I don't know why we never even had this, where you can recruit people from across the country to participate in your trial. In the US, if you wanna do that, you're gonna be constrained to one center.

And if you are constrained to like one hospital, you are probably gonna be flying people in that adds a lot of extra cost. You are constrained to like one hospital, you are probably going to be flying people in. That adds a lot of extra cost. You are going to probably be constraining your sample as much as you can. That adds a lot of uncertainty. That makes your trials less reliable. So you're more likely to have a trial that

produces a false positive or a false negative. These reforms have been implemented in China, and they've worked wonders. China's actually ahead of us as of this year in terms of the as of this year in terms of the number of trials they have going. And beyond that, they have a higher number and they have a higher number of people

in each individual trial. They are beating the hell out of the US because of some simple reforms that the FDA could actually implement right now. They could go in, they could have a direct final rule on a bunch of these things and change this overnight to make stuff less expensive. They could also reform GMP,

the good manufacturing practices, in ways that take off a lot of the costs from, for example, gene therapies, like having to produce tons of placebo ahead of time is a very silly rule. We could actually mimic countries like Australia, or we could do, follow the WHOs, the World Health Organization's GMP guidelines,

and cut costs right away. The wonderful thing about the WHO's, the World Health Organization's GMP guidelines and cut costs right away. The wonderful thing about the US though, when it comes to R&D is that we have a good way of directing R&D funding. We have lots of connections between the public sector and, well, I should say the sort of quasi public private R&D drives. Like we have universities with a lot of industry directive, a lot of industry grants, a lot of knowledge of where they should be focusing and whatnot. And this leads to a situation where even our public funds are able to be allocated to things that have good returns.

That's why it's going to be very difficult to replace whatever happens here with public funds because you're going to have to just figure out how are you going to distribute that money how are you going to do what the industry does which is to find areas with pretty good returns pretty reliably when we the elasticity of research funding to the returns is very very very high. It is very considerable. So we're going to see a very stark reduction in R&D. And that's going to have pretty major effects in the future. It's also going to lead to R&D outsourcing, it's going to move to other countries because of the cost angle, it'll

very likely move to China because they have the best R&D environment right now for pharmaceuticals. And because the US is doing this. And additionally, the manufacturing is likely moved there too. Yeah. As you work through the, the effects of this executive order, if it goes through, uh, is that good for America? Is it good for humanity? Are we closer to a cure for cancer? Does this like accelerate or decelerate, uh, overall biotechnology progress in one way or another in your, in

your opinion. Unfortunately, this is very likely to massively decelerate things. This is likely to be something that causes a lot of harm to research for many years to come. The IRR for biotech is for pharma is already below the average cost of capital. And we've recently have a little bit of rebounding, But if people were expecting it for many years to go basically to zero, a little bit of rebounding due to COVID, there was a blip, and that was OK.

There was a lot of funding going into biotech for COVID reasons. And then there's been a GLP-led boom in returns as well. And that's been tremendous. But that has an expiration date, because we know what's going to happen with the patents. And we know that people are very likely going to go for cheap generic ozempic when it comes about in 2033 or whatever, rather than the better terceptide or redishrutide based products, just because it's going to be so cheap. And at that point, the GLP boom will be over and we'll have to return to the state of

what's going on with pharma. And what's going on on is very very low IRRs that are going to go even lower due to this regulation. So it's unclear if pharmaceutical research can actually survive in the US given this because we're already teetering on the brink and moving even lower is well it imperils the whole thing. Brutal. How much did you read into the timing of all of this? It felt, initially it felt a little bit random because so much conversation had been on trade issues, but then once I sat with it a little bit, it felt conveniently timed given where Trump has been polling and things happening in Congress that they would like to get through? Yeah, I actually don't know when I expected this to come out.

But I did expect it to come out because it was an old thing. And they are trying to introduce a lot of the things that they try to run near the end of the previous admin. And this was just up there. They're basically going to redo the same thing. They're going to fight the legal battles and then implement this. And I don't know if there's anything in particular the profit of this right now But I knew that it was coming and I didn't know exactly when but I expected it like

Within a few months of the admin actually coming in Anything else to read brutal I was hoping for a white somewhere but uh Didn't get it. Do have a white bill, please, please Just one, sir. I'll give you a few, actually. So there are a lot of efforts going on right now at the FDA and at HHS more generally to promote price transparency, which

will help with the PBM-based Delta and Price. They are looking to accelerate manufacturing and approvals for nearly genericable drugs. They're going to be participating in generic drug user fee amendment reform, which is massive. I can go into that. manufacturing and approvals for nearly the Louisiana's purchasing model across the whole country. There are a lot of really great things happening and it's likely the situation will be better in the long run, not because of this, but because of everything else that's going on. What would the Louisiana plan look like? I'm not familiar with that.

Ah, so Louisiana did an amazing thing a few years ago. They basically went to every manufacturer of EPCLUSA, this wonderful drug for hepatitis C that is a cure. And it's a super high cost. I think the cost is actually around $27,000 right now for 28 days. So it's not able to be done for Medicaid meaningfully. So what they did is they negotiated with a producer of it and they said, you're going to be the exclusive provider for as much as we want. We're going to give you $30 million and you just give us as much as we want. And they said you're gonna be the exclusive provider for as much as we want We're gonna give you a 30 million dollars and you just give us as much as we want and they they look for people and they said Okay, you look like you're going to produce it all they agreed

And they just produced as much as they want they could wanted if the state demanded more they would get more that was part Of the deal. So they started screening prisons. They started screening Medicaid patients They started screening prisons, they started screening Medicaid patients, they started screening everyone in order to get as many people as possible this prescription for a formerly very high cost drug that had to them zero marginal cost because of the deal. Lots of pharma companies are actually willing to engage in this deal.

They're willing to provide zero marginal cost drugs if you give them just one big contract and exclusivity. And this seems to be amazing. It worked really, really well. They reduced the rate of hep C and the same the hep C death rate actually, by about a sixth in about a year, which is incredible. They actually saved a ton of money on it. They reduced the number of organ transplants people needed.

They did just lots of really, really wonderful things. And all they had to do was ask a manufacturer, Hey, will you provide as much as we want if we pay you a set amount and give you exclusive rights in our state? And yeah, yeah, business is a lot of predictability, right? What's that? Yeah, businesses love predictability, like it's predictable revenue. And so even if it's at a lower margin, it's more guaranteed and higher volume. And so all the all the math works out in the IRR increases.

Yeah. And when that model goes national, it's going to basically make our high-priced drug problem a thing of the past if there's a generic. That's fantastic. Well, that's a great white pill. Thank you. Thank you for that. This is great.

We'd love to have you back. This is a fantastic... I'm so glad you were able to join really quickly. Yeah. Thank you for making the time. Learned a lot. Thanks so much. And we'll talk to you soon. All right. a good one guys. Cheers. Bye. We have our next guest hopping in the studio, but quickly Let me tell you about Vanta automate compliance manage risk improve trust continuously

Ventus trust management platform makes the manual work takes the manual work out of your security and compliance process and replaces it with continuous automation Whether you're using your first framework or managing a complex program, go to vanta.com. Anyway, thank you so much. And welcome to the stream test. We'd love to chat with you. If you're here, let's bring you in. Can you hear us? I sure can.

Can you guys hear me okay? Yeah, you sound great. Welcome to the show. Great to meet you. Thanks so much for hopping on on short notice. We're trying to make heads or tails out of the news. We were just talking to one guest about the latest executive order around drug pricing, and we'd love to just get your a little bit of your introduction and then how you are processing

the news today and what's going on in the market and just kind of your high level take. Absolutely. So thanks so much for having me on. So my name's Tess Cameron. I'm a principal at RA Capital Management and RA is a leading life sciences investment fund. We make investments across all stages from seeding and building new companies all the way through to investing in later stage companies

in the public markets. And I think this whole concept of most favored nation for drug pricing, it is not something new. It is something that we saw in the first Trump administration actually several times in 2018, it came back in 2020. It first in one executive order, then in another executive order,

and then in a rule from the Center for Medicare and Medicaid, a rule that ultimately did not get implemented because the rule was actually knocked down in court because they didn't follow certain procedures that were required from an Administrative Procedures Act standpoint in order to get the rule through. So I think that broadly, there'd been some rumors among the biotech investment community that this is something that was coming back, right? Trump had made some statements about it's not fair that we are paying so much more than these other countries. And so I think investors were anticipating

that there might be something. Was it, do you think it was? And we can break out, oh sorry, please jump in. Do you think it was priced in in some way? So right now the NASDAQ biotech index is following the overall NASDAQ perfectly. Yeah, and everyone last night, at least the Peanut Gallery, myself included,

were predicting blood bath in the biotech markets No, didn't happen. Are we just really stupid or do we get something wrong? I Am totally with you. Um, so yeah, I think this just shows the value of predictions in this kind of market Where but I think it's I think it's for fundamental reasons that you know Biotech stocks were like biotech and pharma stocks were actually up this morning. So my goodness, why the heck is that? And I think the reason is because the executive order and particularly the administration's language around the executive order was actually much more positive than I think people were

anticipating. This doesn't necessarily mean that it will be positive, but I think it's being interpreted positively. And I say that for a couple reasons. One is that, I think Trump made it very clear, like the focus is on other countries that aren't paying. And the focus is more on those countries than the companies. And I have to say, as a biotech investor, you know, I think all of us are like totally behind that statement,

right? Like, you know, the fact that the UK and you know, a lot of Europe benefit from these like super low drug prices, like that isn't, you know, they should be paying a lot more. There's actually a study that came out just a couple of days ago that looks at the ways that a lot of these European countries set price, which is through these health technology assessments, where they basically say that patient's lives aren't worth particularly much,

and they very narrowly value the benefits of these drugs in a way that undervalues the societal benefit of medicines by more than 90%. Right? So these are not, I think what was really positive to hear is you know, hey, if you want to sell your cars here, you have to buy, you know, our medicines that are, you know, at like market price, right? And in the US, like we do have a competitive market. I think also as a biotech investor, key thing is, like, we want to keep that market competition going in the US. That is what drives drug prices down over time is like generic entry. It's like more branded competition, much, much, much better than like importing foreign price controls that essentially are based on math that like under

values human life, right? So good trade stuff, but like bad if it results in like importing foreign price controls. I think the weight of those changed based on the language that we heard this morning. Sure, sure. Are those, effectively the price controls that they have already, are those happening at the EU level or country by country?

It is country by country. And it's a very nuanced and very complicated process, but essentially like when a drug gets approved US is almost always the first launch right so 85% of new medicines launched anywhere in the world those are available in the US and then it's a question of what other markets you go To and it's really complicated because all of these different many of the different countries they reference price each other Right, so you don't't wanna like start in a country that like is referenced pricing another country

and it's like, oh no, like now like, our pricing is all messed up. So typically what companies do is they start with Germany, right, maybe they consider Japan and then after they get pricing in one of those markets, then they go to these other markets. So this is why like these countries are so staggered and they don't get the

benefit of these medicines like nearly as soon as the U.S. does. They're usually delayed several years but it's a very country by country you know decision making process and it's not really a decision making process. It's kind of a take it or leave it right like drug company do you want to launch in this market or not? If you do, like here's your price, take it or leave it. And so actually having the US government step in and say like, hey, you're not just negotiating with a drug company, you're negotiating with the US government now. And like, if you want to sell your cars in our country, you're going to have to pay the price that I want you to pay. Like that becomes a more powerful statement where now companies can actually be in a position where they can start seeing the benefit of more deliberate trade negotiation by the U.S.

in favor of getting other countries to pay their share of research and development. U.S. has been 75% of drug, biopharma research and development is, is what the US funds, which is just incredible. It's like defense, right? It's like a, similar to the NATO, similar to the NATO issue. Yeah. Is there, is there something at the political level that the biotech community broadly, both the large pharma companies and maybe even the, the, the more startup focused companies agree maybe even the more startup-focused companies

agree on in terms of changing regulation or how the government interfaces with the biotech community. For example, we cover tech a lot and there's been a lot of rumblings about the government blocking acquisitions. In general, big tech companies want to acquire startups, startups want to sell themselves to big tech. And so tech as a whole has been pretty against the blocking of acquisitions. But is there an analogy there to how the biotech community broadly thinks about their list of priorities in Washington? And is this anywhere on that list? I would say like across the board for, you know, uh, big pharma companies and like little biotechs alike, it is all about like,

let us compete, right? Like market competition is like such a great force for access and innovation and, um, you know, bringing prices down in the U S, like let us compete and, you know, enable that. And I think we have, you know, I think we see it in our access to medicines. It is because of the dynamic US market and market competition that we have so much access.

It's because of US market competition that when generics come in, you know, prices will go down sometimes like 98%, right? Like Medicare pays 30 cents for like, you know, prices will go down sometimes like 98%, right? Like Medicare pays 30 cents for like, you know, or even less, I think it's three cents actually for like each like Lipitor pill. And so that's great. Right. And so let us compete, let us compete.

You know, there should be government mechanisms, you know, we think for drugs to actually go generic on time. Right. So like, yeah, you don't want like drugs hanging out for 20 years like on patent, that isn't really, you know, part of the deal, right? But when we think about like, you know, what makes the US so dynamic

and what brings patients a lot of benefit, it's like, it's having that innovation and ensuring that that innovation is driven by market competition rather than government price controls, actually helps instill more natural mechanisms for prices coming down. More branded competition, more generic competition. If the US government just comes in and sets price,

guess what's gonna happen? You're not gonna have a second to market branded product that's launching three years later, coming to market and competing against this price at one, because they're, I'm not going to compete against the US government, right? Like US government is going to get, you know, going to get what it wants. So I think that is somewhere where, you know, biopharma as a whole, big company, small company, I think all aligned on that. We had the Inflation Reduction Act, right, which is essentially instituted price controls in the Medicare market. And, you know, the big inefficiency there was setting price for small molecule drugs

at nine years. Biologics are at 13 years. Usually as investors, we're counting on like 14 years of exclusivity before a drug grows generic and drops off, obviously dependent on the quality of that patent. That's a price control that we don't want, that's already had an impact, unfortunately, on small molecule innovation. So pills instead of shots. And we don't think that's good for Medicare beneficiaries. And we don't wanna see more price controls

coming into this market because it could really cause something very special where America leads, which is biomedical innovation, to have a lot more challenges and less investment. So generally, our last guest was sort of disappointed with the EO. He thought it was going to have negative implications, but generally felt fair.

He seemed somewhat unfazed. Can you talk about investors' sentiment in biotech right now? Industry has had a rough few years, and in many ways, you could kind of just shrug this off and just say all right you know just got to get through it but I'm curious you know from your point of view are there what what are the sort of positive outlooks right now from from your standpoint and what should people be paying attention to outside of this EO?

Yeah, absolutely. So, I mean, I think the reaction, you see it in the stocks, right? I think that there's optimism that the impact of this policy may be a lot lower than people thought. And indeed, I think some of that is just, hey, it looks like this is gonna happen through rulemaking

instead of through some other kind of implementation that might be more top down. And that may impact the probability of actually getting something that is super broad based and bringing pharma prices down across the board. That may lower the probability. So I think that's kind of what we're seeing in stocks. I think in terms of just the sector, there's a lot of amazing stuff happening fundamentally, right? And that's why as investors, when we see periods of volatility like this, it's very exciting from an opportunity set perspective, because you have companies that have made incredible scientific progress.

You have companies that have, you know, that are launching, you know, transformative medicines that are making really good progress. And we're seeing some real disconnects, you know, across the board for many, you know, for many companies. And that, you know, that's a great set of opportunities for investors. And, you know, ultimately, I think America does really value biomedical innovation and will be rewarded for companies that make fundamental progress. Can you talk a little bit about the life cycle of a new drug or new biotech company? Comparing it to tech again, it feels like there's

companies older than us that are still private because the nature of the tech market is that there are venture capital firms that are set up to do $5 billion injections at $100 billion valuation. And yet it feels like in biotech, there's been a long history of going public at a much lower market cap, the the stock moving based on FDA trials very early before revenue years on the market pre revenue. Is there some sort of fundamental reason why companies and biotech go public earlier? Or is that lifecycle changing? Do I even have that, that

characterization? You are so right. No, you are absolutely right. So it is a very different lifecycle. I mean, it can take like 10 years for a drug to get to market. Like, even when you've gotten into the clinic, 90% or more of what you're working on is gonna fail.

So it is a really tough sector. We're talking numbers in the billions, like on a probability adjusted basis, it's like over two and a half billion to actually get a drug to market. So we're talking big investment, very high risk. And as a result, yeah, so you're like, why is anyone doing this?

What's the best result every day? But you would think high burn, high capex, high risk, leave that in the private markets, but then Stripe, which has been making tons of revenue for a decade, get them in the public markets, and yet it's the opposite in America. I'm curious if there's any type of disconnect between the public and the private markets

in the sense that, hey, you can buy shares of a private company that has $0 in revenue at ex-valuation, or you can buy shares of a company that's public, that has drugs, and that are in market, that has revenue. Can you talk about that? Yeah, absolutely. Is that correct and correct? Typically, what we see is that it's very unusual

for any drug company that has a commercial product that is marketed. Very rare for those companies to be private. It exists in a few spaces, but very, very unusual. They're almost always public. And the reason that biotech companies tend to go public so early is because it takes so long to develop these drugs and the depth of the capital markets for the biotech market,

it's just deeper on the public side, right? There's a lot of investors who are like, hey, we do like public market investing and maybe they do like a little tiny bit of like private market investing, and maybe they do a little tiny bit of private market investing, but the pools of capital on the public side are just much larger. And so you see a lot of these companies

going public very early, and the private company valuations, they tend to, on a lagged basis, follow the public market somewhat. Curious if that also happens in tech. But it might be that after you see a real drawdown in the XBI, six months later, if the XBI is still low, private companies will be like, hmm, maybe that stuff up

isn't going to be as big. Maybe I have to be a little more flexible on valuation. So it usually takes some time. but like everyone is usually looking at that because that is the exit typically before an M&A. There is, you know, certainly, you know, strategic M&A activity that happens for private companies. But usually it's after they've raised enough money to get to a point that, you know, a strategic is like, cool, cool like I think this drug is Gonna work. I'm gonna take that risk now

And usually the company would like to be public to be able to raise the money to get to that point where they can be bought so You know, it's a it's an interesting dynamic and certainly different. I think then then the tech world Can you talk about the longevity market from your point of view? In our world, every single, once somebody has at least a billion dollars in paper returns, they become very obsessed with longevity, living forever. And so in tech, the companies that get attention,

we had one of the co-founders of New Limit on last week, which was an exciting conversation, but I'm curious from your point of view, more at a high level, give us kind of a broad overview of the longevity market, which I'm sure is just one area that you guys invest. Absolutely. Yeah, so the longevity market can mean many, many different things.

Every drug is a longevity drug if you're life threatening. Yeah, exactly. And also with many different levels of scientific validation. So, RA Capital, we are like a very data-driven, like we're a very data-driven organization, right? A lot of the people who work at RA Capital are like PhDs or former physicians or sometimes even current physicians. And so very scientifically rigorous. But I think we're developing and have developed a lot of really, really interesting research

on scientifically oriented ways of extending not just lifespan but health span. So when we think about longevity, we tend to think about it not in terms of like, hey, do you wanna be like, you know, hanging out on a couch, like not really able to move, but you're like, I'm alive, I'm alive. Like, you know, ideally-

As long as my Neuralink plugs in, I'm good. As long as I can use the internet at 150 as a vegetable, I'm good. You're like, that's probably not my jam, just being able to use it. I mean, using a computer with your eyes at 150 would still be pretty cool. But if you could do more, that would be even more fantastic, right? And so our focus is actually being more on the health span side of things. I'm really thinking through, we actually think that there's a lot of existing technologies

and existing, it's also not just about treatment, it's about prevention and how do you identify, how do you diagnose, how do you manage risk factors very, very early. And so a lot of that involves having algorithms for identification, having algorithms for like disease prevention and identifying where there's a lot of existing stuff that you can put to work in combination with novel agents to really improve health span. So that is an area that we're very excited about and certainly doing a lot of work in.

What does Deal Flow look like for you? I know a lot of the best biotech companies it seems like they there's some tech transfer point out of a university lab and then I've seen like flagship pioneering is like incubating stuff and Moderna came out of that and There's just so many and RA has an incubation arm, too Yeah, yeah, there's so many different formats that you don't you don lot of like, oh, you know, kid in the garage said, you know what, I have a problem and I'm going to solve it myself. It's a very different pattern of entrepreneurship. So what does the lifecycle look like for you?

It is very different. I will tell you, I would actually love to see more like garage biotechs, because I think like there's some more, like I think that there is actually, in some ways, like the entrepreneurial process for biotechs because I think like there's you know some more like I think that there's actually you know in some ways like the entrepreneurial process for biotech has been a little too like institutionalized right but let's let's talk about it because you know the deal flow for biotech and like how companies get formed can be in a number of different ways. Academia right ideas

coming out of academia is like a big one. Ideas coming out of venture funds is another big one. Right? And then you have business people, often people who've like, they've worked for a company, that company got sold, and they're like, hey, I wanna come back and do another one. Here's like these other areas and other problems to solve, right?

Or maybe someone's coming out of big pharma with like an idea that they couldn't prosecute in their big pharma company because they were too risk averse and they want to start something new. But because biotech is like so high risk and requires so much capital, that process for like getting a company started is often, I'd say there's a bit more institutional process

around that than I think you see in tech because it just takes a lot of money to go from, hey, I have this idea to, oh, I even want to test this in animal models and try and get a drug out of this. That is millions of dollars. So I think that is something that is actually a real challenge for the, and that we at RA think is like a real challenge for like the biofarm and ecosystem is, you know,

look like we have to, you know, find ways that we can be more, you know, be more efficient and like try and get to some of these answers more quickly. Because when, you know, when you when you look at the pace of innovation that is coming out of China, which is really pretty astonishing for biomedical innovation, it's like that is a fundamentally different cost base and fundamentally different pace of iteration. And there's a lot of work that I think we need to consider for our biotech ecosystem here to adapt. Can we do a quick round of like overrated, underrated? I'd love to know artificial intelligence broadly, is it speeding up drug development?

Is it overhyped in Silicon Valley? Everyone says, oh, we're just going to, you know, ask Chachi PT to cure cancer. It's going to happen next year. It's a convenient line if you need to raise $30 billion yourself. But what is the mood in the real industry from the folks who know about AI? So I would say that AI is like, it's overhyped in the sense that AI itself is not discovering and developing drugs. It is underhyped in the sense that like, oh my gosh, like what a powerful tool.

Like we absolutely use it. Every single company worth their salt is using AI in their drug discovery process, right? So it's a little bit of both. Usually when someone is talking about themselves as an AI company, you should approach with like, how different is this really? And like, but if a company is like,

no, we don't use AI for anything, I would also be like, huh? with like how different is this really and like but if a company is like no we don't use AI for anything I would also be like huh? What about mRNA broadly Moderna? Stefan Bessel was on the TED Talk saying before COVID saying mRNA is gonna be a cancer cure the stocks kind of gone up gone back down is mRNA a technology that we're gonna be seeing more of in the future in different applications? Or should we be thinking about Moderna really just as like a pandemic frontline defense firm? So let me talk about RNA therapeutics more broadly, because actually mRNA therapeutics

are like one flavor of RNA therapies. And I would say say like RNA therapeutics overall like huge, huge potential, right? Huge opportunity. I think that the challenge has been delivery, right? How do you actually get these to the right biological target? And there's a lot of really awesome work being done that can hopefully improve on that. Yeah, that makes a ton of sense. What about GLP1s? improve on that. Yeah, that makes a ton of sense. What about GLP ones? I feel like everyone has heralded them as like a cure for everything from diabetes to obesity to gambling to just anything being lazy, I guess it cures. It seems to cure everything. Overhyped, underhyped, overrated, underrated, or kind of underhyped, underhyped, phenomenal drugs, phenomenal drugs, lots of problems to solve, right? The market isn't rewarding a lot of that now, but I think

the market will in future. So lots of problems to solve need to improve on accessibility, right? So how do we get like pills and patches instead of needles? And how do we improve tolerability, right? So that people are actually staying on these drugs and a big part of that is insurance coverage as well. Last one for me, are you worried pharma IRRs on average have been low? Our last guest was talking about how, if you look at average returns,

they're below the cost of capital today. Are you worried about net new investment in early stage biotech funds? Obviously, if there's less investment, you could imagine the returns actually going up because there's less competition for deals maybe, but what's your kind of high level take on incremental investment in early stage biotech?

My take is that there is a lot of great work to be done from a fundamental standpoint, but we need the incentives in place. So we've got to have a functioning market. We've got to have competition in order to incentivize that. So, you know, I think that's the best, that's the best thing that the government can do is ensure that there's, you know, strong market competition for pharmaceuticals. And, you know, loved hearing this morning

that there's a real appetite for trying to get other countries to incentivize that innovation as well. Yeah. Do you think biotechnology process is overall accelerating or are we heading into a period of, of kind of rebuilding and stagnation? What's your overall optimism on the, the industry broadly? My view is accelerating because we have to, right? We have to, and we have better tools to the thing that causes biotech to take

such an enormous amount of time is clinical trials and like the clinical trial system in the us is just like clogged right everyone's trying to recruit the same patients at the same hospitals um so i think we need uh different ways of doing things but i think that we have a lot of the tools to actually accelerate some of that innovation that's exciting. Awesome. Well, thank you so much for joining us. We got out of here with white coats.

Thank you. Yeah, yeah. White suits, white coats. Leaving on a high note. Thank you so much for joining. This was really enjoyable. Welcome to white suits. Thank you, Tess.

Well, the market's up, so we have to celebrate. Yeah. It's a white suit day. Great to see you both. Yeah, thanks for going on. Cheers. Thanks so much. That was great.

I feel like I'm learning a ton from these interviews. Yeah, we've been meaning to have a biotech day. This is kind of the informal biotech day. The EO. Yeah, kind of triggered it. But I'd love to go deeper here because it's such a, every answer is something where I'm like, I've never heard this particular take before.

I'm learning a lot. So I'm having a lot of fun. It's interesting that Cremute, what didn't bring up the price controls in the European market, right? Because that does feel like a factor. He was saying that, you know, European country or that the pharma companies are selling at the rate in which the profit maximizing rate and it sounds

like there might be some other factors. Yeah, play. Yeah. We have Jack, let's bring him in the waiting room. Let's bring him in. Welcome to the stream. Jack, how you doing? There he is. There he is. I changed my shirt when I saw that you guys white What you when you went light today? I had a dark shirt on Can we get those? No suit though? Hey? He's in the studio Let's go get the Ashton Hall. Yeah one more

He's got news today Got news's go, he's got news! He's got news. What news do you have? What's going on? What you got for us? This is, you guys are getting the first look at this. It's a pleasure to do it here. We are announcing Impatient Ventures Fund One.

Let's go! Let's go, another Airhorn. Another Airhorn. How big is it? So we set up to do 20 million. We had set up to be 20 million. We ended up over subscribing and doing 23 and a half million. So congratulations, you know, it's, it's, it was a tough market to start in February 2023 was basically the rock stone cold bottom adventure.

Stone cold. Have you thought of concentrating the entire fund into a single foundation model company? Just putting all 23 million in one deal. I basically was hoping that that would be the case. I was just waiting to Yolo and with Josh Kushner. There you go. No, I never found it. Next fund.

Next fund. I mean, seriously, break down the portfolio. Maybe talk about, why don't you give people a little background, talk about AUM too, cause I don't think the first fund tells the whole story. Yeah. So I was lucky enough to start investing, honestly, during ZERP when it was a little bit easier to raise capital. And so we did a series of SBBs while I was a founder in 2020, 2021, 22. First deal we did ended up being a CPG company.

It might be the first and last CPG company, but it's my best investment, which is a high protein oatmeal brand called Oats Overnight. I met the founder, he was a pro poker player. I was a very serious poker player once in my life, which I think is an amazing skill set to have as a founder is that sort of decision tree between luck and what you actually did to impact an outcome. which I think is an amazing skill set to have as a founder is that sort of decision tree between luck and

What you actually did impact an outcome But yeah, we did about 30 million bucks of sbs before the first fund and then along the fund We've done probably another 50 or 60 million. So aom is uh is north of nine figures. Um, but uh, Uh, we're we're definitely We're definitely as they like to say in the industry just getting started. Just getting started. That's great. Portfolio construction for the new fund. What's the average check size? How many deals are you trying to do? Are you leaving some on the table for pro rata and follow ons? Will there be a growth fund and IPO, a special situations fund debt fund? Are you getting into a structured section credit, debt fund, are you getting into structured credit,

private credit at some point? What's going on? Import-export. You know what you have those friends where you ask them what their parents do and they don't know and they say import-export and you're just left wondering, but everything's import-export to some degree. Import the capital, export it to the founders. Yeah, exactly. So we're a concentrated fund. We're going to do probably about 20 to 22. We're actually at 20 right now. And so we're just deciding kind of the last few that the nice part about being a first

fund is you can not only make a lot of mistakes, you don't have to be as kind of like letter to the law of how it's done. I think as you scale and you have institutional investors. We were fortunate to have an institutional investor. It was a top endowment. I need permission to say publicly, unfortunately, I don't have that permission. But as I've been told, I can say it's a Boston-based endowment. And it's in the top quartile of investing.

So we have a generalist approach. How I think about it is, I was reading some of the other day that somebody talked about how specialist funds actually outperform generalist funds for only fun one. But then as soon as you escape fun one, you start just getting decimated. And basically, the articulation was, if you're focused, it's because you're investing in whatever's of the time, right? Right now at the time, it's, it's foundational models and deep tech. So everything from AI to robots. But, you know, three years ago, I saw a lot of people saying we're Web 3 focused.

And then they kind of like branded everything that way and then slowly walked off stage and pivoted as that industry changed from where it was three years ago. So I like to think of this as a generalist fund that dynamically invests in what the best categories of today is. And so right now that is robotics, that is deep tech, that is advanced manufacturing and defense. But we're also doing consumer. I think consumer is permanent.

It's a permanent category. I think we have yet to do a Web 3 deal. I don't want to write it off. We did some pre-fund stable coins that we're excited about, but you know, I think it's still sort of to be determined, you know, what's going to work in Web3 because it's still just tokens with not a lot of value. How do you find, there's been a number, full disclosure, I'm an LP and impatient, but how do you think about investing in companies before there's any heat

on the deal? I can think of a few companies in the fund that were, couldn't have been less hot at the time of investment, and then a year later, you've got tier ones leading and they become super competitive. But what are you looking for in a founder to get a sense of their abilities,

oftentimes before there's any revenue or sometimes not even an actual product yet? Yeah, I mean, that's a, that basically is kind of where I think our edge is is in what we invest in, which is, you always hear it, it's about the people, but my line is I can't underwrite a business if I can't underwrite the founder.

And so it's those characteristics of that founder that I feel like are a winning, you know, sort of profile because, you know, comically the word pivot is so often used in startups because the beginning life cycle of a company is one continuous pivot. And so I love the Mike Maples quote, 80% of his best investments were pivots, Mike Maples being the floodgate founder. And I think that that couldn't be truer about so many of our best deals versus sort of the

business change later. And so what I'm really looking for is that the founder has there's a line that I like to use, which is never uncertain, often wrong. And so whatever they believe to be true at that point, they believe it with 110 percent. But as soon as new information enters their head, that might change the way they go to market, that might require them to need to shift their team. I'm looking for a founder's ability to be dynamic

as the sort of the information changes. I can see fire right now. This is the celebration cigar. Break it out, John, let's do it. Let's do it. I don't mind taking the suits to the dry cleaner after this. In the next studio, I think we will be a spokesperson. I wish, you guys remember remember there was like at least two

or three COVID startups that were like, I think there's still one that doesn't really get like 10 minute delivery or something like that. Cigars? I mean, I may be the next great consumer business. Maybe. Yeah, go puff for cigars. What does it take on these new Zoomer companies, these young entrepreneurs who seem to be really

good at going viral on day one, Vibriels take over the internet, and then they kind of got to build the plane after they're already flying versus the Dylan Field story of Teal Fellow in private beta for three years raising money, then launches Figma and goes on this like generational run. Uh, the fear and like the vibe is like, Hey guys, like you're taking the marketing a little bit too seriously. Maybe you're too good at going viral before you, you really have any product, but, uh, are we just being like boomers if we're like, hey, you know, get in the garage and start coding?

I love that question. One of the companies that, you know, Jordy knows is in our portfolio, and we're all big fans of, in fact, I think you both have the fish as Shinke. Oh yeah. Yeah. Yep. So I think they're at 40 Michelin stars of sort of their fish being distributed to restaurants. I're there. They're at 40 Michelin stars of sort of their fish

Being distributed in a restaurant Three Michelin stars, but they got 40 They're hogging all the stars One of the things I really appreciate about the CEO is quite young and you know, we backed him you know when he had two roommates from college working on the idea with him. And actually the original idea, he wanted to make autonomous fishing boats and he wanted to build the fish processing robots that kind of execute the fish when it's caught

and then get it ready. The narrative violation there is that Shinkai is a YC company that graduated YC and still had, and this just goes to show how not hot robotics were in any type of sort of more antiquated industries that they could, that a founder of Safe's category could get out of YC and just be out in the free market building in relative obscurity for,

I don't know how long it was exactly, but if I remember correctly it was. It was a few years, but just to even finish, John, your question, one of the things I like about the CEO is there's a lot of pressure for him now that he is a, you know, tier one backed startup and has, you know, some of the best from SpaceX and Andro working there to really scale revenue.

The thing that he's focused on is quality revenue. And I think in the age of AI being able to pump numbers up quickly, I don't know what that company was. I don't want to say the wrong one. It was 11x or 11 Labs or something that had like 10 million revenue. Two wildly different companies. They're wildly different. There was one that basically had like 10 million in revenue in like three weeks or something

crazy. And it was just turns out it was like all turned over, like 90 percent churn. And so I think, yeah, I think in this age of of being able to scale as fast as we've ever been able to, quality revenue is really the most important thing I look for. And does that founder understand what that means? Yeah, so understanding economics are still in right now. And I think the founders that don't understand.

Hot take. Yeah, I mean, hot take. Margin profile, basic finance 101 stuff in conjunction with a market insight and the ability to scale and execute. That's an important thing that we underwrite is, I don't know what your ultimate business is gonna be, but will you know it when you see it?

Last question I have, are you a long or short Burning Man? You've been a vocal proponent of Burning Man over the years. Every year that I've known you, you've gone. I'm short, I gotta say. I'm short, I think it peaked a couple years ago. But what's your take? I got bad news for Burning Man. This will be my first year in which I do my hot VC summer

in Europe. Ooh. And out of Burning Man. OK. And so this is my first year taking off. Could be a death note for you. I think I will be back. I will say I have gotten deals and LPs out of Burning Man

every year I've been there. So I have a good batting average and the productivity, but it definitely feels. Actions. What's that? The actions are speaking louder than words here. You're short. Yeah, the revealed preference is that you're mega short.

The revealed preference is mega short. I'm currently, I'd say I'm currently, I'm currently at, I'm staying in cash. I'm not lost yet I'm staying in cash. I'm not lost yet. I'm staying in cash. Awesome. Well, it's great to have you on. Congrats on the milestone and yeah.

Good luck to you. I'm looking forward to a fun two announcement. I'm sure it'll be not too long. Around the corner. Not too far away. It'll be sometime after Burning Man, which I'm sure is. Great. Anyway, great seeing you.

All right. We'll talk to you soon. All right fellas. Thank you. Thanks Jack, see ya. Let's talk about 8 Sleep. Go to 8Sleep.com. Get a Pod 4 Ultra.

I'm gonna keep the cheering going. Five year warranty, 30 night Rice Free Trial, free returns, free shipping. It's clinically backed. I got a 90, I'm back. Wow, you're back, John. I'm climbing the ranks. I'm coming through. I think I actually put up a 90.

A 99 or a 90 on the dot. What you got? No, actually a 90. Because we got Pippa from Sweet Capital coming in the studio in just a minute. Let me also tell you about AdQuick. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising.

Only AdQuick combines technology, out of home expertise and data to enable efficient, seamless ad buying across the globe. Pippa, are you here? Welcome to the show. Hey, John, how's it going? It's good.

Would you mind kicking us off a little bit of an introduction on yourself for those who don't know you? Absolutely. It's great to be with you guys. I know we've been wanting to do this for a little while, so it's great to be with you. Yes, somehow we missed you at Hill and Valley. It was a crazy day, but it was good seeing

you there nonetheless. You guys were overrun. The hardest spot at the conference. A tiny room in the corner. It was good. It was a crazy day. Those guys did a great job. Yeah, fantastic. Yeah. So my name is Pippa Lam. I am a partner at Sweet Capital. We are a private investment fund. Clue is in the name Sweet Capital. My colleagues started gaming company, Candy Crush, most famously King.com, which they sold to Activision and then subsequently Microsoft.

I run a huge game. I run the private investment fund for those founders. And we sit between the US and Europe and invest sort of broadly multi-stage, again, with private capital, so we can sort of invest across a whole wide range of sectors. And I'd say we're about 70% US allocation at this point. My background, I actually started my career working for the British government on trade relations between the West, UK, US and China, which obviously quite topical today. And I then sort of moved into equity research, covered large cap, China tech, US tech, JP Morgan for five years.

So pretty much just doing Publix, covered a lot of macro, which obviously is now increasingly relevant to sort of tech, which obviously is now increasingly relevant to the tech world and private investing now, but been in venture and private investing for about five, six years now. So yeah, great to be here with you guys. Yeah. How are the founders thinking about investing in gaming technology? I feel like every successful founder, they sell their company and they're either like, I'm never doing that industry again I know too much about what can go wrong so I want to stay away from it or they're like I'm an expert and I'm gonna dominate the next generation of

Generational companies that that come up in the industry. I know so much about obviously there's a lot of value out there So what's their what's their was their feeling on? Gaming startups right now and are you doing any deals in that area broadly? I'd say it goes both ways. So there are five founders of King. So I'd say a couple of the founders are like, get me back in, I'm ready for more gaming. In fact, one of our colleagues is actually

started a new company. It's unit is on compete pretty much ended with Activision and Microsoft last year. So he's straight back in it. He's operating sort of himself at the moment, but he's kind of straight back into operating. So very much bullish on gaming. And I'd say on the other side, it's a little bit of a range between wanting to invest alongside more the gaming ecosystem, not so much purely on publishers.

I think that obviously King and Candy Crush were such an incredible zeitgeist and breakout success. I think Match 3 and sort of casual gaming really rode the kind of mobile transition that we saw be so large for them. And when they were coming up, I think obviously the gaming industry has moved a lot. And of course, you know, my colleagues are still very interested in what's happening. I think a lot of what's happening obviously around AI, and sort of the broader, broader ecosystem, you know, still extremely tapped in. So we do look at gaming deals. But I'd say that, you know, it was partly the thing that you allude to about having, you know, knowing too much that has meant that we've, you know, with the private investing

media on the side, we've really moved out of purely doing gaming. We did also have a non compete for quite a long time with Activision. So we were sort of forced in my earlier years to do sort of the gamification of adjacent sectors versus, you know, competing immediately with with their former company. How did you guys react to the news last week around the App Store and the changes to the App Store's payment or the forced changes to the App Store's

payment policies? Look, I think that, you know, I don't want to speak for them, but they certainly had an ongoing, very interesting relationship with Apple throughout the course of, I guess, as Candy Crush was coming up, I think also, you know, they really began at a time of sort of the internet portal, you know, they really had to deal with how, you know, they were dealing with, you know, Facebook at the timea, and also Apple.

So I think that broadly we're hopeful around changes coming out. But I think that certainly the issues that we faced as operators, certainly the world is drastically different now. We're no longer really at the fight to try and win mobile, which is really how they were having to come up at the time. So I think it's too early to say, but it's certainly something that my colleagues are tracking very closely and certainly Sebastian Knudsen,

who I mentioned has started his own new company, is actually facing now directly as they launch their first game. So let's see. Yeah, gaming is such an interesting venture category because I feel like over the last five years, there's been a ton of breakout games, but very few of them were true venture-backed, seed series A from main funds. Fortnite came out of Epic Games, it's a 30-year-old company. Roblox had this venture story, but all the early backers, they became rich off of Roblox. Roblox was kind of like their main win.

Then Among Us and Bellatro were these huge successes, but they were kind of just like random indie developers who just kind of got lucky and weren't really like financialized in like the, oh, we're building a team. And then a lot of the game companies like Pivotal Slack was originally a game company and stuff. If? You go into Silicon Valley, they eventually push you into B2B SaaS. If you're a game company. But anyway, I mean, we can talk about gaming all day. But I want to hear your take on the UK US trade deal. That was the first one to fall last week, you had a great breakdown x about it. I'd

love you to take me through kind of like, what was your expectation? How do you process the news? And, and what do you see going forward with that particular trade deal? And maybe before you dive into that, even kind of the on the ground opinion in the UK, how UK citizens have viewed this whole trade debacle, given that they have a, we have the US as a trade surplus with the UK. Right. Yeah, yeah. It's funny. I know.

I know a friend Ryan from Flagspot tweeted, you know, the UK is the only country to have a trade surplus. Oh, the US have a trade surplus with the UK. So it doesn't bode well for other countries, right? If we manage to like, you know, that is that is the beginning point. But I think, yeah, of the top 10 countries that the US has a trading partner with, the UK is is the beginning point. But I think yeah, of the top 10 countries that the US has a trading partner with the UK is is the only one that they don't have a trade deficit with. So so let's see. Yeah, look, I think it's a sort of by myself putting back my macro hat on again, these days so much because we had finally this trade first trade agreement between the US and UK announced last week. And of course, this morning with the news coming out of Geneva of how the US and China are hopefully going to move towards closer

bilateral trade dialogue. So I think first on the UK piece, I know that sort of from behind the scenes that this has really been something that has been in the minds of the UK government ever since sort of mid February, when we had the end of February when we had that very sort of, you know, very productive and positive meeting between Prime Minister Keir Starmer and President Trump and the White House. I think that there has been on both sides a real determination to work towards a some sort of bilateral trade agreement that, you know, went beyond the Liberation Day Board, where I think we were, you know, 10% with with some of the lowest countries. So this has been in the works for for weeks, certainly, I guess a few months since then. And I think the reception has been broadly positive, you

know, I think that of course, there are still talks to be had. I know Ambassador Peter Mandelson has said that this is not a still picture. I think he said it's a movie that the trade talks will continue. But if you look at the headlines, it brings down to the average, I think, tariff to somewhere between 1 and 2%. That is the aim, which of course is hugely beneficial for both when we were really sort of stuck at the 10%. So I'd say it's been broadly very positive. Obviously, markets reacted well to it. And it really hit some of the key points around sort of steel and autos, which I think are in both sides views, potentially a blueprint for how the US is going to engage with other trade partners. I think that's where I would like to see things move next is

really expanding this into a broader dialogue around UK and US tech partnerships. I think that that is certainly something that we should keep our eyes peeled on over the coming weeks, and something that, you know, I think there's a lot of interest on the UK side about really firming up our relationship with, you know, US big tech. We already have a fantastic working relationship with many large tech companies in the US, but I think we could really push the needle on some of the factors that have become issues of national security, you know, AI, defense, robotics and stuff like that. So yeah, broadly, broadly positive. And I think it's been interesting

to watch how we've seen, you know, the UK public and and also UK big industry react to, you know, the new administration and what the White House is doing. Do you think the UK will be kind of a net importer or exporter of venture capital over the next few years? Obviously, there's a lot of LPs there that would love to invest in American companies. There's also new projects to invest in UK based entrepreneurs, new startups. So what is the trade balance look like from a venture capitalist perspective? I think it depends who you ask.

I think that traditionally we have struggled in the UK and I say we obviously I'm British. I do. I have, I have personally as a microcosm spent about 70% of my AUM on the US. So I think it's clear sort of how I voted with our wallets, but I think certainly if you, if you look at Europe, there has traditionally been a issue with getting scaled capital to the pre IPO stage. So, you know, you had a lot of this homegrown seed capital and sort of, you know, of course, US counterparts setting up their UK offices, be it Accel, who's done very well there in index, who are, you know,

still big firms in the US, but they really found their footing in Europe. And then in recent years, you had, you know, Sequoia come in, you had, you know, Andreessen Horowitz do a big crypto play, NEA and many others. So I think that there are certainly continue to be sort of a wealth, you know, the UK has really wanted to welcome US venture capital. But of course, it has also raised the question as to why isn't there more homegrown, you know, European and US funding at that later stage. So I think, you know, in some ways, the industry is just more nascent there. So the law has taken time to scale up these funds. But yeah, I mean, I personally think that we should continue to try and push for greater collaboration on the capital side at those later stages as well.

Do you think the UK is a good kind of launch pad for investing in the Nordics broadly? Because the Nordics seem to be a little bit of violation of the narrative that Europe isn't producing generational companies. You have Spotify, Skype, there's tons of stuff out of Sweden and Estonia, and there seem to be pockets of like really entrepreneurial cultures there, even if it doesn't fit like the traditional Euro narrative. So is that an interesting angle to go set up in the UK and then deploy into the Nordics

broadly? Okay, first of all, I want to know if my colleagues have been texting you because four of my four of my founders are Swedish, the other is Italian. So this is definitely like a setup. But but yeah, look, I'm we're a big fan of obviously investing in the Nordics. I think that my general view and you know, John, I saw a lot of you lost at the end of last year when around the US election, I was on the ground in the US for a couple of months during that ramp up.

And I think I remember on election night being at a sort of election watch party and a lot of people were saying to me, okay, well, this is great, you know, in many ways for the US tech scene, but how will this impact the UK and Europe? And I was the one going around saying, look, this is a fantastic chance for the UK and the US's closest allies to also

benefit from some of these, hopefully blockages that are moving, especially within the tech sector. So my view is that the UK is still a fantastic place from which to welcome, you know, tech companies as a gateway to broadly Europe. Um, I do think the Nordics are definitely a sweet spot. So King obviously basically also being a part of that, the Nordic gaming community, it's huge. Well, they didn't even make this list. I'm looking at this list cursor, my sequel, my Spotify, Skype, or a

Yeah, King, I mean, King invest listed on the on the New York Stock Exchange. Sure. You know, it's headquarters were in London, but it's co founders were a lot of them are Swedish. But certainly we we, you know, our second office really is Stockholm. So yeah, big fan of that. And I think that it's it's proof that both in the Nordics and also in Eastern Europe, you've had some really breakout sectors, including gaming. So yeah, I what about what about foundation models? Is there is anybody kind of raised around like, you're worth a UK open AI. Let's

raise this is gotta be worth a billion. Yeah, so we haven't so yeah, we haven't had our own sort of foundation model in that sense. I think that's, that's something that the UK is seriously considering. And as we think about the theme of sovereign capital and secure capital and how the UK is actually going to be able to compete at that level of the sort of AI ecosystem. Of course, across the channel in France, we have Mistral. And, you know, famously, we, you know, we've had incredible generational AI talents on the engineering side in the UK for a long time. But, you know, DeepMind was, DeepMind was started in the UK and then obviously moved over to Google. So I think that certainly as the UK government thinks about this next generation of AI companies and sort of technology companies in general, it's certainly something that is very top of mind for how both, you know, desit the department of science and technology, the foreign office. And obviously number 10, thinking about these things.

So have you thought so severely about like expatriating entrepreneurs? I mean, just go find the best entrepreneurs, set them up with the first round, take a huge chunk of the company and then say, hey, go to San Francisco. That's where you need to be. Go build the company because there is the aperture widens when all of a sudden you're talking about, yes, American companies, but founded by European entrepreneurs, then you're in the trillions of dollars of market cap, right? Yeah, sure. We could. I mean, if we already look at companies that that then we get we sort of we can draw a line nowhere. I mean, Stripe in theory has British like, you know, founders or Irish. right, in theory has British like, you know, founders or, you know, Irish, Irish, let's not I know, I know, I know, I'm a separatist. I am against communication.

I think what's important, no, is, is, you know, it's keeping I think the UK government will be also keeping its homegrown talent in the UK. I think that's obviously a very sore spot as to why DeepMind did leave. And I think that the UK, in my view, needs to look at itself and consider what are the requirements that you really need to build multi-trillion dollar market cap companies in the UK and Europe more broadly. But I think that there is, if you look at this current administration, there has been a lot of really encouraging signs. Early at the beginning of this year, we had an AI Act that PM signed off on where 20 new ideas around how to enable AI progress in the UK specifically, were announced and adopted. And that really came from a lot of great work from collaborators in the venture capital industry in the UK.

Right of mine, Matt Clifford, who has been advising number 10 on really the opportunity around AI and AI security. So yeah, let's see. But I think that my hope is is stepping out more broadly that the conversation between the UK and the US can also start a bit of a blueprint for how the US starts to work with some of the other other allies on on tariffs and also on tech partnerships. It's great. Well, thank you so much for joining. Well, you're fantastic.

Our official UK correspondent. Let's get a sound effect. Let's thank you so much for joining. Well, you are fantastic. Our official UK correspondent. Let's get a sound effect. Let's get an air horn for you. Thank you. I'm honored to be that guy. Yeah. Yeah, we'll talk to you soon. Good to see you.

Good to see you. Really quickly. Let me tell you about Bezel. You can shop over twenty five thousand five hundred luxury watches, fully authenticated in-house by Bezel's team of experts. Go to getbezel.com, tell them TBPN sent you. And we have our next guest, ready for us to join the show, the founder of Intercom. Welcome to the stream.

How are you? Gentlemen, how are you? Look at that microphone. Look at the lag time. You're urging, you were ready for this. Terrible? No, it's good. It's fantastic.

It's good. It's fantastic. I don't want to mispronounce your name can you pronounce it for me well before I tell you there are two types of people in this world I found out there are those who guess yes and then there are the rare few fucking gentlemen thank you because you'll never guess. It's pronounced O-H-N, so kind of like O-H-N, O-N. Wait, you lagged right as you said it. So it's O-H-N. Oh. What is it?

It's pronounced O-N, basically O-O-N. So it's if you spell it O-H-N, O-N. A lot of people say O-N, and I will accept that. Okay, O-N. Well, thank you for joining us. It's great to have you. Would you mind just giving us a brief interview of kind of a brief intro to your kind of entrepreneurial

journey and the company that you built and kind of then we can dive into a bunch of the hot topics. I'm sure we'll be talking about AI venture, all the top, all the typical topics, but I'd love to know kind of like your story. Yeah. In a nutshell, I moved from Dublin, Ireland in 2011, a long, long time ago, to the Bay Area in San Francisco.

And we started Intercom around then. Intercom at that time was a general purpose customer communication platform. We had a cute little messenger, the first of its type. You put it on your website, in your app, and it was great for sales, support, marketing use cases. And it blew up. Two or three years into Intercom,

we were the fastest growing software companies in Salesforce. Slack subsequently beat us, but that was our hot start. And yeah, it's been an incredible journey since snippet trend, right? Like you were able to boil down installation of your product to just like a few lines of HTML or JavaScript. And so the integration all of a sudden went from get a four year deployed engineer build

on top of our API to drop this snippet into your website and you're good to go with some basic functionality. Is that correct? Yeah, yeah. There was, there was other people doing it. There was a company called Olark years ago that had like a kind of a live chat thing. We were a little different. We were a messenger. So it was a mix between live chat and, and kind of, uh, you know, asynchronous. Um, but what was different about our approach was that you'd install the JavaScript and it would start to learn about your customers. And so you had a really data rich customer

experience. So in many ways, it was almost like a CRM for digital businesses. But at core to it was all the communication stuff. How did the business model evolve? Were you on kind of just like a monthly plan for a little bit? Did you go constantly based at some point? We tried approximately 14 trillion price plans. Most of them were unsuccessful. But we you know, we charged per seat and per message.

The problem with a really horizontal product like ours was that you're trying to capture value in a dozen directions. So you have a super complex pricing model if you're really trying to do all the things. So we did that and then eventually we picked a lane. So these days we're in customer service. Okay. So you've tried all these business models. I have to ask you about Salesforce.

They're moving to this like ticket completion pricing, getting away from seat pricing. Is that a reasonable strategy? Is that the future? Like Mark Benioff has kind of said, are you testing that? Do you have any information on what we should expect from future pricing of these types of services in an AI driven world? Yeah, I think it'll stick. We were the first to charge per resolution. Salesforce came to me. Oh, there we go. Yeah. Hey, hey, we're going to think about this. Does it work? Yeah. Um,

and, you know, we like it. We like it because it's aligned with our customers. We don't charge you if we don't do work for you. And every time we do work, we charge you. And when we make our technology better doing work, we earn more money. And right now, forgive the plug, Finn, our AI agent is the highest performing agent and service. And so we more we earn more per customer, at least when you charge for resolutions than the other guys, because we just do more work. Oh, interesting. So it's highest performing not on a particular benchmark, but on just how much money it makes? No, well, yes. Because I've been saying that's actually the real measure of AI is how much economic value can it create?

And it's weird to say because we want to be like, oh, it's really good at math or whatever. But I'd much prefer like, no, it actually does a job. Solves real problems. It solves a real problem. And there's no better measure than that than economics. Yeah, absolutely. You know, work in some sense is a bit of a commodity to a degree, right? And so, you know, if you can charge more for your work than others or if you earn more

from doing work, it means that you're providing more value to the world. Yeah, totally. So yeah, we have more customers than anyone else in the AI service agent space. We have more revenue than anyone else. That's very good. We have a higher average resolution rate, et cetera. Have you been, in general, applying AI to customer service makes a lot of sense.

There's a lot of spend there. It's just a generally good application of LLMs. Were you surprised at how many companies came in to try to compete in the category, given that the intercom of AI, I imagine is intercom, right, because I feel like a lot of companies came out and just said like, oh, we're making AI agents for CX, or we're making more native experiences. But in this case, it feels like, you know, there's always been this debate, right?

Is AI a disruptive innovation or is it an extending innovation? And I'm sure as the models have gotten better and better, you've just gotten more excited about their potential at Intercom. So maybe talk about the kind of market dynamic. Yeah, it's been interesting. So in hindsight, I'm not at all surprised because it's a giant category. I mean, the space we're eventually going for is all customer experience, sales, marketing, success, service.

There's certainly trillions of dollars spent on salaries globally doing all of that work. So of course, many other people are going to chase it. I, I, I do think that categories are going to be more, they're going to be shared in a way that they weren't in the past. There's no way one company gets half of that trillions. That's just not the case.

There's going to be many different players in the space. At the time, I was a little surprised. We were first out of the gate, and we had so many different advantages. But I was only surprised because I had yet to realize that the times are changing. The technology world is just so much more competitive now. Like when we started in 2011, you'd pick your lane, you probably would have a direct competitor if you were doing something interesting, but you wouldn't have 16. Like that just was not the case. And I don't

have a hypothesis for why that is. I mean, if I had to guess, I guess I would say that AI is most likely the biggest innovation the world has seen since, you know, the internet may be way bigger than the internet. When there are new technology changes, opportunities open left and right. And opportunists come out of the woodwork. I mean, opportunists in the bus way, wonderful entrepreneurs, yeah, matter the woodwork to go and pounce on those. And that moment. So I don't know, it's fascinating.

It's incredibly competitive and not just our space, every single category in AI. I mean, think of like, note taking, think of, you know, it just make anything up. A.I.A. It's Gary Tan's fault. Let's just say it. I mean, I love the guy, but you know, we got to we got to hold him accountable for all the competition. Wait, who is that? I was saying I was saying I love Gary Tan, but it's clearly his fault.

There's so many startups now. I mean, half half the intercom competitors are a YC company. Yeah. I mean, you know, that like something like three or four of the top payroll Half the intercom competitors are YC companies. I mean, you know that like something like three or four of the top payroll companies all went through YC. Deal, gusto, rippling. For a while there was this narrative of like, oh, YC doesn't fund competitive companies.

Like, no, they fund a ton of competitive companies. But it's great. Yeah. I mean, competition breeds innovation and breeds these huge power law outcomes. It's all good stuff But it is very it is very very competitive right now I want to hear about your evolution with artificial intelligence Take me through were you tinkering with the GPT-3? DaVinci API playground. Do are you trying to implement that stuff was where there are times when it was unsuccessful and then it became successful is reinforcement learning and reasoning with

the critical turning point for you guys. Like how have the different eras of AI over the past few years played out into your product strategy? I will answer that question. I first do have to mention that I think you just heard a burp live on air. Did you hear that? No, you didn't hear that? Okay, good. I just a lot of Laquan was just like the burpy moment. I heard it in my ears. I'm like, we're all getting carbonated. Yeah. Good thing we're going to cut this out, right? Yeah. So yeah, good thing it's not live. Yeah, good thing it's not live. We didn't randomly choose to live stream the show. So to your question, you know, so there hasn't been for people in our space,

major innovation at the model layer or within the model providers that has dramatically changed how it is that we function. So much for the innovation is in the orchestration around the models and a lot lot of ways in which we've got these massive performance gains over all of our competitors is that we've built a lot of our own AI to allow us to do more sophisticated rag and use multiple models in different types of ways. We've needed to be very experimental, we've run something like 200 different A-B tests to eke out different

improvements along the way. Going forward, the next innovations will likely come by the way of these application layer companies starting to work on their own models. At least right now, and this space is so dynamic, so I may have a different opinion in just weeks. At least right now, it looks like the biggest leaps forward for the verticalized AI application companies will come by way of building verticalized offerings, where they have applications and models kind of working together and somehow leveraging that interconnection.

Yeah, we need an application layer sound effect on the soundboard. Yeah, I wonder, I imagine that there was an era where you were effectively building AI agents or AI chat bots back during the chat bot boom, that were defined much more like linear business logic, if then statements, and you layer those up and that that might be derided today, but it was value creative back then. I'm wondering if there is a world where having done that work results in a better product today because you can slot LLMs in to the business logic or train a model to interact with some of the business logic because I imagine customers and companies do want

to enforce some rules and restrictions around the interactions. And so if you already have those bumper lanes on the metaphorical bowling alley, you're gonna be able to deliver a better product. But can you talk to me about the evolution of that rules- based chat bot development to modern, you know, I just have an LLM that one shots it.

Yeah. Well, you basically said all this one things I could say, but I'll just repeat it. There was kind of three generations around the third generation. Now the first generation was all the conditional stuff. And we have pretty sophisticated conditional stuff where you could build big, beautiful, graphical diagrams that showed exactly how the customer would flow through your machine. Yeah, that was great. Generation two used machine learning. And it used various heuristics that

learned from all the human data points we have about conversations that happen to try and route people to the right answers in your knowledge base and would pull out little snippets. So we had a thing we ended up calling a resolution bot because I can share exclusively here that Zen-esque threat just to us because we had an often called answer bot and little did we know apparently they also had an answer bot. Oh no. Yikes. Yikes. Generation three now is LLMPR and so that is one that uses AI as we know it today and

it does away with everything in generation one and two except as you say there are some companies like us that can leverage those innovations. So we sell to banks, we sell to businesses with highly restricted operations in regulatory environments that don't allow them to make mistakes. You know, you get it. Our customers very much want confidence that the LLM is not going to just hiccup and bump its way in the wrong direction, you know, hallucinate, even though, you know, we've managed to squash pretty much all the nations. Classic example would be, you know, somebody gets the LLM to refund them a huge amount for some

purchase that they don't intend on actually... Oh yeah, the prompt injection. I heard about that on airline. It was in their own system. Yeah, I think a big, I think a big question I have is at what point is your AI actually better than an agent that would use the platform, right? Because right now, over the last few years, as AI got kind of good, but maybe not great. I would still find myself in that sort of cycle of being like, you know, kind of getting frustrated and just saying, talk to a human, talk to a human. But you could eventually get to the point where somebody would actually just prefer to talk to an AI because it's instantaneous and you can really

potentially move a lot faster than an agent who's working across, you know, multiple open tickets. So I'm curious, like, what is the point where it kind of flips where the average user is preferring to talk to artificial intelligence? Yeah, the world is coming to exactly that point for the average user, but it's there for a lot of people already. We have multiple funny instances

where we see people asking for the bot. We see requests increase when people realize that they can ask quick questions and get quick answers. We see resolution rates and kind of response times improve dramatically for certain categories of questions. The dirty little truth in the era of AI is that well applied AI is far better than humans. It is always available, you know, always stays on script is never rude. You know, often gets the answer far more right than the humans. We've run a couple of different studies where we've classified the answers that

human agents provided using internal LLM products that we've built, we found that only 65% of the tickets that humans marked as resolved are actually resolved. So the humans are way worse than they think, way worse than they report. And just anecdotally, you will have far kind of messier experiences than humans than you will with a very good AI agent.

The problem is that still most AI agents are not very good. Most of them are in fact, GPT wrappers. And so there is a lot of kind of crappiness. The very big consumer products that already provide shit support don't really mind, but in the future won't be acceptable. But we are nearing that point. Yeah. How, how has it been a challenge figuring out the right way to message intercoms products, given that many of your actual core DAUs on the customer side, the actual reps are people that over time, like they have to be using the software and realizing somewhat slowly or maybe quickly that they aren't as good

as the underlying system. And that's kind of a difficult, very human question, crisis. Yeah, look, the reality is, there's a couple of realities. One reality is that those people on the ground and even the support leaders are often not those buying these technologies. You know, there's a vested interest in those two groups of people not adopting them. And so a lot of people adopting these technologies or CTOs,

even CEOs that realize their opportunity, their, their, their operations and customer experiences could be dramatically improved by bringing these agents to the fore. I will say that often these agents are almost sugar on top. They resolve, at least right now, some of the easier issues. And the humans are still needed for the harder ones. They're serving on-met demand. So sometimes people will deploy FinR agent to. They're free customers that the neighbor gave support to before.

But often when they deploy it, like I mentioned earlier, people will ask more questions. And so it increases demand too. So you're not really seeing, we haven't seen, big mass layoffs where the humans are just obsolete. That said, all of that said, it will compete with human work. And AI and robotics is simply going to compete with the most repetitive, most demeaning,

least enjoyable, least purposeful work out there. And if you talk to customer support reps, very few of them wanna be customer support reps long term. It's a great way to get into the tech world, earn a tech salary, learn what you wanna do, but pretty much all tech people have their mind and eye on something else. Yeah, what are your high level thoughts

on the AI sales agent market? We've seen hundreds of companies at this point. And the face says it all. But yeah, I mean, you said earlier in the call that you guys will eventually get into sales and marketing. And so I'm sure you have a ton of opinions on it. And great customer service is often a sales role. You're closing the customer as they ask questions.

And the best customer service reps I've ever worked with have always been able to turn a customer interaction into a sales interaction. Yeah, and it's just a much different dynamic sort of taking inbound concerns or feedback with a product. This is a big one. Trying to solve it with AI and then passing it to a human quickly versus spamming somebody

with just nonsense. My favorite one was the sales agent that was like reaching out to somebody in New York. Have you been to New York? And it's like, hey, have you, what do you like doing in New York City? You should try to go to the opera in Central Park. Yeah, the big apple.

The city that never sleeps. I'm ready to close. Anyway, yeah, what's your take on the AI BDR race? I don't know. It's, you know, you know the way they say marketers ruin all channels, you know, all channels get, you know, you know, the way they say marketers ruin all channels, you know, all, all channels get exploited and trashed and spammed and completely destroyed by

marketers because the job of marketing is to find, you know, the frontier, like white space where it's not flooded by other marketers. So all sales and marketing is really exploiting to death all opportunities until people are thoroughly fucking sick and sick to the teeth of them. So that's going to happen with AI, you know, unfortunately. And it's already happening. You know, I've gotten tricked a couple times with some emails, I open them, some of them are kind of on point and you're like, fuck you. This is God, I don't even know if I'm allowed to say this f word. I've said it three times.

We're working on getting a bleeper, but you're good. We are family friendly show. We don't swear, but we'm allowed to say this f-word. I've said it three times. We're working on getting a bleeper, but you're good. We are a family friendly show. We don't swear, but we won't hold it against you. Okay, thank you for not holding against me. I will try my very best to not use it one more time. But I don't know if it's gonna work, but like you said, there's a full spectrum.

There's a muscle spectrum. And yeah. No, the challenge is any tool that's decent will get such rapid adoption because of the internet being the best distribution channel ever and X even it used to be faster than atoms yep so I think the issue is is any tool that's worth anything will just

be used so much that it'll quickly yeah lose any type of real edge. I have a follow up on the cost side of things. Obviously some of these API calls are quite expensive, especially if you're doing O3 level reasoning, test time inference, like everyone knows that it'll get cheaper, it'll get baked down into ASICs, or there'll be specific chips that run these things

really cheaply in even six months, even a few years, the cost per tokens dropping. But at the same time, we've heard about startups that are like, Yeah, I burned through 500 K of open AI credits in a couple months testing this thing out. So is there a world where you've actually seen an impact on your cogs or your margins in the short term? And have you had to work with the board or investors to kind of think through that cost benefit analysis? Or have you always been able to kind of

dance around it so that the business always feels like a software business and feels like it has very high gross margins like any other tech company? Or is the fundamental gravity and the laws of physics around building a software company changed or at least temporarily changed? I think it's too early to say and I think it's a really pertinent question. Obviously, when we started and we launched Finn like four months after chat GPT came

out, each resolution cost us $1 and 20 something cent. We charged 99 cents. So we decided to take a loss on that. We don't share our margin at the moment. It's very, very healthy now. I think businesses that like ours build very deep applications on top of these base level models, we'll be able to extract plenty of value because of what makes them unique. Those that are simply GPT wrappers will need to charge something closer to GPT prices. But model

prices are just going to continue to come down. So in the same way that SaaS companies were able to make 80% margins on AWS in the future, pretty much everyone will be able to make 80% margins on OpenAI or AWS when they run their own model. So I actually will see, but I don't think it's gonna net out where the margin structure is completely different. Yeah.

How much have you followed the Clarnas CEO? Every one day he says, oh, we fired everyone. Now he says, oh, we rehired everyone. Next week, I think he just found the ultimate attention hack is we got to have him on the show. Got to have him on the show, but it's basically just flip flop. Risk off. Risk off.

Risk off. Risk off. Risk off. Risk off. Risk off. Nice. I don't know. Yeah, he's really good at marketing.

Yeah. Yeah. What has your founder journey been, and where do you see the company going over the long term? Like from the outside, I think it's, you know, there's a lot of people that would see Intercom and just think like, oh, like venture back, they're gonna sell and get rolled into something else.

It seems like you've been in founder mode for a long time and it doesn't seem like the writing's on the wall for you to stop, you're enjoying what you're doing. What do you see the rest of your career looking like? Yeah, in many ways, the company, the biggest opportunity is still ahead in terms of being perfectly positioned to roll out. Where we talked to a founder and we're like,

wait, if he's really gonna work on this for 20 years, it's gonna be insane. So yeah, I'm interested to hear, what do you see all this going? Talk about your ambitions. Yeah, I mean, I'm 14 years in now, which is long. Most people are like, holy. Overnight success. Overnight success. 14 years in now, which is long. You know, most people are like, Oh, success. Well, you know, we were an overnight success two years in, and then we just did it for another 12 years. That's great. Yeah.

Maybe we messed that up. Yeah. You know, there are definitely being periods. Certainly near the tail end of our first chapter where, you know, we were all tired. I actually was off for two years. I was sick and trying to run away and ended up coming back. That's a whole other show perhaps. But the AI thing definitely reinvigorated us. Totally. And, you know, it's a dick, you know, I won't deny that I'm 41 now. I was 26 when I started intercom. It's a different thing when you're a little older, and AI give give or take, is a young man's game. Certainly now that the world is so competitive, people are working their damn asses off. And a lot of our competitors, they're in their twenties.

They're working literally seven days a week, 12 hours a day. We don't do that. So we have to take advantage of the things that make us unique. But the thing that keeps us going, that keeps me going is just the scale of potential. You know, our business is accelerating dramatically now. I think next year, our growth rate, our annual growth rate will have doubled three years in a row. And these are very significant growth rates. So for that was all I was looking for. There you go. I mean, guys, That was all I was looking for. There you go. I mean, guys, chill.

He's still talking. He's still talking. Come on. Thank you. Thank you. Thank you. Well, yeah, for a company at scale, you know, in the hundreds of millions to accelerate at that pace is just insane.

And it's because of this AI stuff. And yet, very literally, we've just scratched the surface. I mean, if we're going to do the future of work then you want to get started What do you think about the early stage AI market the the rapper market? People were very bearish on it Then we saw open AI acquire Windsor for three billion dollars and if it felt like you know, it's very special company very incredible team But it felt like it could be game on for every big tech company needs a rapper or a startup in every single category. And so all of a sudden you could see, sure,

maybe some of these companies don't become massive public companies. But if, if a founder out there is building a narrow AI solution for something that can slot very neatly into AWS or Azure or, or Microsoft office, you could see kind of game on in the M and a markets and some good outcomes for the founders and maybe even the VCs. What do you think? Yeah. I mean, from what I hear, their M and a activity is picking up, certainly from our perspective, all sorts of bigger companies have started to

ping us. Um, it's, it's kind of a thing, you know, the, what I respond to this general question is, is, is, is, is I just ask how big is this market really? I mean, if we are doing the future of work, if Oh, we lost you. There you go. Sorry. If cursor or Wainstorf are doing a big majority of future development work, these things are insanely valuable.

So all of this is just way bigger than software like AI, AI applications, wrappers, et cetera. Maybe they're a hundred X the total software market. Maybe they're a thousand X. Maybe that's way too much, but think about it. They're doing all of work. That's great. I really, VCs get so much shit,

but I would love for all the VCs. Whoa, swear jar, buddy. Yeah, yeah, yeah, I gotta put one in that swear jar. But I would love for all the VCs to just be right this time. Oh yeah, for sure. Like all the rounds, the perplexity of 14 billion. Like if they're just, what if it all works out, right? It'd be amazing.

What did you do before founding Intercom and would you do anything different or would you recommend that path to the next generation of entrepreneurs? I was starting companies, I was doing consulting, it was auto development design. I don't know, there's a dozen paths, maybe 100 paths into this.

At this point, I wouldn't do anything differently. You get to a certain age in life where you love all your mistakes. Maybe you like look at your younger self and you're like, wow, look at you, look what you did. But it made you who you are, so no regrets. And people should just follow their own paths. Follow their hearts.

I love that. Follow your heart. Well, I am so excited for you and the whole team. I'm so bullish. I'm actually extremely bullish. I love the way these conversations were just like, oh my God, what a beast. Yeah, no, I mean, you guys are,

you guys basically, you know, 14 year overnight success in the exact purpose. Potentially voted. Yeah, definitely in the conversation. Definitely in the conversation, but no, just in the perfect position to take advantage of a massive trend, but then also deliver that value back to all of your existing customers

and all your new customers. I know you customers a great time Let's have the Ashton Hall effect and thank him for joining the show. Thank you for joining the show It's great chatting come back on again. Yeah. Yeah, we'll have to have you back on soon. There's so much more to talk about We'll talk to you. All right, and I think we have David from box group in the waiting room We'll bring him in chat with him. We love when a venture capitalist yaps about venture capital. It's one of our favorite activities. We got a plan. I would love to get his take on what are we going to do in August, because I think August might be an existential crisis for the show. As all of

you know, every venture capitalist takes all of August off. And so we won't have nearly as many guests. I think we go to the south of France and just do man on the street interviews. Yeah, what do you do for a Oh, hey, what do you do for a multi stage venture capitalists? I think we have to what about getting in a scuba diving suit and swimming up to

boats and say, Hey, what do you what do you do for a living? Let's bring him in and look at his take David, welcome to the show. How you doing? Why limited to the south of France? There are a lot of destinations. You guys are being quite isolated Okay, okay. So give us the full tour How do we make sure that the show doesn't implode in August when all the venture capitalists go on vacation and we have no one to Yap with I think you need a yacht a yacht. Yeah, okay Yeah, like you guys need a yacht and then you travel from port to port. Bring the show to the VCs. Yes. Okay. And what ports

are we hitting? Take the show on the road. We're going to San Jose. I mean there's a base level VC and then as they get more advanced I feel like you can find new destinations. Okay. Antarctica for the really successful adventurous. Yeah, if your yacht doesn't have an icebreaker, I'm sorry, you're not ready to lead the series Bs of 25. I think we should get into halo jumping. So when we get Intel, hey, there's a big VC in Antarctica. We're just pulling the parachute minutes before hitting the ground,

seconds before hitting the ground, show up with the mic, what do you do for a living? And if this period, as you alluded to, works, I mean, the destinations we're gonna expand to, tremendous. I think so. There's something here, there's something here. We'll keep noodling on it. Anyway, how are things going?

Do they have a wander location in all the places you need to go? I mean, let's get the plugs going. We do need to wander. We do wander in Antarctica. Yeah, they should definitely get some of those on board the Greenland location, the ones that just pop up purely for marketing mostly. But yeah, I would take them up on that for sure. Yeah. But yeah, how was your weekend? How are you processing all the the flurry of news and business and trade deals and biotech?

Do you have any exposure in your portfolio? What are you excited about right now? What's new? My wife makes clothes in China. Oh, okay. So that's my main exposure. So I live with exposure, if you will. And so, and making clothes is not a good business

for anybody. And then when you get tariffed Aggressively you start doing math and your math already doesn't work And you're like, oh, what if we make it worse? And so I think I live with her emotions Yeah, which impacted me. I think as a venture firm were generalists. We have exposure in all different categories. I think you know the TJ who's joining you after I think we'll talk about the the pharmaceutical side of this. I think there's You're in a world where reading headlines reacting to them and then waiting until the news comes out, right?

You read about the China deals like we made a deal. We'll let you know the details Market of me the market immediately Yeah, okay. No rush. Market immediately starts pricing it in. Zero rush. Just let us know whenever you get a chance and then we'll understand things better. Yeah. And I feel like all of the news

is getting rolled out like that, where you're like, here's the headline, more to come. And I think reacting, again, reacting to that as an early stage VCs is important for Twitter or what we call X it's important for podcasts and really unimportant for the actual job so you have to balance these two stressors out which is like how do I get engaged and sound like this is really impactful to me and it matters and I have to overreact

and then on the same time just doesn't matter. Well, I think for you, if you're a true contrarian, which every VC should be, everybody's bearish biotech, they've had a bunch of issues over the years, you should just invest in like 30 new biotech companies today, even without any sort of real insider edge. Just- We probably did.

I was on an airplane today and there's a chance that we did that today. Like 30 new deals, yeah. We're investors in Zach Weinberg's Curie, which in fact does 30 new biotech deals regularly. So we have achieved your goal. Yeah, I think he's hopping on the show next week to give us his take on all the biotech stuff. Yeah, there's gonna be three more news cycles. It we have achieved your goal. Yeah. I think he's hopping on the show next week to give us his, his take on all

the biotech. Yeah, there's going to be three more. It'll be team and chill. Yeah, I'm sure. Uh, yeah. I mean, talk more about that idea of like patients and venture. There was this, uh, headline recently that, uh, Tiger global, they got really stung during the Zurp era, but they're looking a lot better because they put a bunch of money in open AI and that eventually seasoned. We saw the same thing with the FTX fund buying a big stake in anthropic and, and, and the, the deal winding up looking great over time.

What, and they, they invested in cursor too. Oh yeah. Cursor open AI and that's in cursor. Right. Yeah. Yeah. You didn't FTX as well? Yeah, they might've. Yeah, I think so. But they sold that. That got sold by the way. Yeah, yeah, yeah. It got sold in like the bankruptcy.

No one knows who bought it. Yeah, I mean, FTX's investment was not one of the best investments ever. It was the person who bought it out of- The cursor mouth on Twitter that was shared made no sense. Yeah, the 200 to 500 million, that wasn't right. That's not how math works. Yeah.

Like there's no equation that equals that. Like you can't get there. So I was confused by that, but I didn't want to keep my mouth shut. Maybe they invested like a $50,000 post money. O3 is not very good at numbers yet. We invested in the seed pre-seed of cursor and that math wasn't correct.

Yeah, okay. So I can tell you that. We invested in the seed pre-seed of cursor and I that math wasn't correct. Yeah Otherwise you wouldn't you wouldn't be doing podcasts anymore from a hotel room. Yeah, yeah, I'd be on I'd be on my yacht Yeah, yeah. I mean speaking of like cursor and just like the the AI application market broadly How are you thinking about demand from the hyperscalers for? How are you thinking about demand from the hyperscalers for finding a dance partner in the application layer companies? There was a big meme for a while that all these companies are just going to get steamrolled by the foundation model companies. Now we're seeing deals get done.

And I've been arguing with Jordy about what if there is a world where every hyperscaler needs a dance partner in AI, in the AI application layer, and there's just a flurry of M&A deals that seems plausible, but Jordy's a little bit more hesitant about that. What's your take on how the M&A markets look for application layer AI companies in big tech now in the new era. I think application layer companies is a catch all of so many different behaviors and paths in. Does every application layer company look the same?

No. I think what you're looking at is in many ways a brand. And there is like a speed momentum and scale Advantage to not being first mover but to being fastest mover. Is there a Barrier to switching like there has been historically in software probably not but in many spaces Barriers haven't been the thing that defends winners, it has been brand and it has been sort of

recognition. And I think that that piece has been under sort of underappreciated and open AI is the perfect example of that right chat GPT, the idea that that, like, name, yeah, created it became a household. It's like hard to say, it's weird. I don't think technical people understand, like why is that the name, but yet here it is, household name. It's very hard to disrupt that on a better model.

A better piece of technology isn't gonna suddenly, like the same way Google won search by Google becoming the verb, not because Google's search engine necessarily was always the single best product the single best tech Even though it was for the most part. I think there's a brand value and so at the app layer I think brand is equally going to be important here if you can and and more users more usage on your product it it ideally improves because of AI. And that's going to matter.

There's a compounding value of scale that's different than just the initial momentum. And I think that that's underappreciated. In terms of M&A, I'm more interested to see if the big companies need to buy Apple Air companies, the fangs of the see if the big companies need to buy app layer companies, right? The fangs of the world or the big seven. If the government allows actual M&A to happen anymore, I think that's the more intriguing unlock versus all the sort of foundation models buying a handful of app layer companies. I think there is a value of sort of by users and by scale that you're

probably looking at at the beginning stages. It's almost more like product. I feel like Google has their destination website. They can point google.com to anything and they can funnel a billion. Sundar recently said that Google has over a billion users of generative AI. And this is the same story with llama beginning stuffed into WhatsApp and Instagram, they have a billion users, but the product isn't thought of in the same conversation as chat GPT, which is a destination, a front and the front door to artificial intelligence. And so yeah,

there's something that there's some still secret sauce to building really great products that happens kind of only in the startup ecosystem. And if you look at Facebook now, on the way up, right, they were buying things every step of the way that felt either threatening or felt interesting. So if you go back to FriendFeed, they bought a CTO there. Right. And so Brett stayed on and built a big chunk of the technology inside of Facebook. But FriendFeed was an interesting

early momentum company. And then they bought, you know, obviously Instagram and WhatsApp, totally sort of separate channels within this bigger ecosystem. It ties into the business model. I look at those acquisitions is how you historically built companies in tech. If you go to this like previous 10-year period when the government sort of stopped allowing it and valuations and founder expectations just became misaligned with acquirers you saw so little M&A in terms of companies growing and getting bigger, and I think you're coming back into an era where the valuations of the foundation model companies,

the valuations of the big tech public companies, are so large that you can actually hit a founder expectation in terms of acquisitions and not make as big of a dent. You're not paying, you know, Twitter paid 10% of their equity for some eyes back in the day. Which is a dunning. That's a crazy story.

Can Venture, as we know it today, survive even in a low M&A environment just because all that matters is the power laws, or does it make things a lot, you know, the power laws? It has survived for 10 years because you got it You had a period of Zerp and then you had I think well me a I 10 years is like one fun cycle If you're lucky, but but I think it created momentum of liquidity for a moment And I think I saved this dearth of M&A and so is this

moment in time where people were able to find liquidity after seven, eight years of very minimal M&A. Do I think VC needs M&A as a secondary channel for exits? Yes. I think 15 years into my career, that was a bet I've been mostly wrong on, is that there would be a lot of old companies buying new companies. I think AI might be a catalyst for that forcing function, right? If you are not able to buy software, you might have to buy companies to modernize.

Yeah, it's super interesting, like playing back some of the other Facebook acquisitions, like they bought control labs. Do you remember this? It's a wristband that could basically read your mind. And so if you pinch your fingers, it would pick up on the electrical signals and be able to put that into the computer and the VR face. They acquired control labs between 500 million and a billion. And this was, when was this? 2019, I guess, so it's been six years. They still haven't commercialized that technology

But they're going to in the new Orion Smart glasses and so just so much they have John. It's it's it's in the iPhone when you squeeze it It's like give John more of this dopamine. Yeah, you like the iPhone is made by Apple The iPhone is made by Apple. I just don't know that. I just want to clarify. But then Facebook was trying to buy a VR fitness app and they got blocked. And everyone was like, it's so dumb because like the FTC said that they were creating a monopoly in the VR fitness industry.

And everyone's like, what are you talking about? There is no VR fitness industry. But at the same time, when you think about Facebook's really or Metta's really long-term horizon, if they can sit on control labs for six years before seeing any sort of economic return, they're still not even close. What could that team gone on to do?

Maybe they could have done something cool. I don't know. Facebook from 2005 to 2015, 50 acquisitions. 50? Wow. 50. These are real. And some of them were acqui hires or some of them were were the version of acqui hire that was aligned to like future, you know, value at Facebook. Same lesson came in through. There was a hot potato, Justin

Schaefer's early company, there was a bunch of early acquisitions that were team acquisitions when it made sense and those people became important at Facebook And I think when you look at today's modern companies, they were not built off of that same Talent acquisition the same same way to build a company I think you might get back to that because not every one of these companies is going to succeed But if the value of the ones that are succeeding skyrockets quick enough, your equity becomes attractive to a company that is looking for a home.

And I think that's a real alignment. You talked earlier about companies potentially buying brand from all the companies that you've invested in. Brand in the early days doesn't matter. Usually when you guys are writing a check, brand, if somebody's trying to sell you on how great their brand is, it probably means there's other fundamental issues

with the company, like the teams. Anyways, brands take a long time to build. I'm curious if you have any framework for evaluating whether or not a team has the capability of building a brand that is gonna resonate over time, just because brand can originate from so many different places, right?

You can build a great brand because you ship quickly. You can build a great brand because you have good taste, you know, and your marketing assets are pretty. Yeah, I think brand is this big amorphous word that when applied to specific spaces means something totally different. The that cursor has built their audience And how they've gone about building that is totally not related to a D to C, you know We're early investors in like Warby Parker. We're the Parker is a version of a consumer product brand

I think in software Capital helps I think there's's this two-sided thing. One is users and a community, however that fills in within your company. A community can be like a B2B startup building, customer momentum where the customers are telling other people to sign up, but I think it's users and the community of users

sort of spreading the word. And I think in this moment in time, capital helps. If you're telling this like every six months fundraising story, you're creating momentum for your company that is different than your competitive set. And so if you can go out into the market and say our valuation doubles up every six months,

we're able to raise from top tier investors, you're able to hire differently. When you're going to pitch in a competitive hiring process and you're able to show that this is the rocket ship, that you're trying to tell that potential hire that it is, I think those things matter. And I think that a brand in all those components can compound to make you some version of, I don't wanna say too big to fail, but sort of you're getting made the winner. You have a lot of people that care about your success.

Yeah, and you're getting made the winner. You're the default winner. At some point, you're not fired for picking that company if it gets to be that big of a name. No one's fired today for picking Salesforce. And I think when you're trying to challenge a company that no one's fired for picking, you have to really be a unique outlier to get somebody to risk their job in essence by picking your company. We're an investor in the eight-year overnight success of clay Yeah, your sound effect, please Which one I mean we got a lot of them just do them all

But you know clay today Eight years in is starting to do a go-to-market eight years in is starting to do a go-to-market motion that starts to compete with some of your entrenched software players. And I think that it takes a lot of product build, and that's been, in the past 10 years, something that's been hard to do as a startup because you're not funded for these five,

seven year builds of software. And I think, as the Intercom founder said, if you can develop software automatically or through, you know, a combination of your engineers and AI, the scale of product that you can build will happen a lot more rapidly. Tell us a story of meeting and investing in TJ back in the day, since he's coming on next. Good one. TJ, yeah. I met TJ. You must have since he's coming on next. Good one. TJ, yeah. I met TJ on-

You must've been a rascal back then. I think Skype, to be fair. You met on Skype? It was in Zoom. Okay, yeah. It wasn't like Google Meets. It was pretty all that, so it had to be Skype. And I was in the room with,

I believe TJ's first employee, not TJ, and not Elliot. So it was like their first employee was physically in the room, and he Skyped in, luckily, TJ. And TJ and I really liked each other. But we didn't meet for like four or five months after. We Skyped, and I invested. So it's been a journey. You know, we were the first investor in PillPack in that original, he was in Techstars in Boston

and that's how I met him. Thank you. It really feels good when you get the sound effect. It's emotional. You gotta work for it, you know? It just brings the energy level like way up. It's a dope immediately. You feel like, as a VC, it takes a long time to get feedback.

And this is like really immediate. It's instant. All you had to do is do something 10 years ago. Exactly. So I appreciate that. 12 years ago. It's a thankless job, VentureCast. So yeah.

And then watching TJ's journey and then tricking TJ into becoming a VC, it's probably a point of pride in my career and watching him thrive, being able to ski, golf, and invest all at the same time, which is complicated. First to do it. No, it's funny with TJ. I got to ask him about this when he comes on, but it's like, I don't know if I've met anyone who's a VC who hates VC broadly as much as TJ. Like he seems like he has like a disdain for it. He has a pride in that, yeah. He has a pride in how much disdain he has

for the profession. But I think part of it, he gets some ability to kind of laugh at the industry, given that he got know, he got to a billion dollar outcome, less than a billion dollar outcome, less than five years. He knows something about an industry that no one else knows about. And his company got to a billion dollars of revenue in less than 10 years. And so I think you get the ability to kind of laugh at how Amazon's pharmacy, like it's still a, it's still a product in the world.

And I think his ability to have seen the inside of one of the biggest companies in the world and then operate there, which he also found funny, I think gives him this unique insight as an investor to really have a top down look at the healthcare system and a bottoms up as you built a startup by competing against the world and then sitting inside of Amazon, you got to see sort of the world operate at scale. I think it's a unique perspective.

Did you see Business Insider's new list of the 100 best early stage venture capitalists? It's my dream in 26 to be on that list. Do you feel like you got snubbed? What happened? They went to him and they said, David, we know you're really number one, but you got to pay us seven figures.

Well, it was ultra competitive this year, as I don't know if you saw, but Peter Thiel just barely made the list. He's at 67. Mark Andreessen didn't make it at all, so you're in reasonable company. I mean, it's a data-driven list. Yes.

And nothing is more truthful in venture than data. It's hard to argue that, you know, random pitchfork and crunch based data isn't the correct outcome for rankings. Yes. Yes. Exactly. Yeah. Yeah. Yeah. A lot of snubs on here, but a lot of great people. It's sad because I got this inbound, I got this inbound spam emails saying that I could buy a plaque for being on the list. And then I didn't make the list. But I bought the plaque already. Oh, yeah, I mean, I'll share this with you. This year, we're

thinking about doing our own version of the Midas list of the top 100 venture capitalists, not just seed across everything on what just the top venture capitalists TB just seed across everything on what just the top venture capitalist TBPN's version of the Midas list. What's the criteria vibe? Well I mean we're putting out a simple call if you want to be included in the list. Packages start at 100k and go up from there so you can reach out to sales at TBPN.com if you're interested in being included if you're venture capitalist and

you're listening. We'd love to include you in the list of the best venture capitalists. We accept credit card and wire transfer. And everybody was worried about how you guys are gonna monetize it. Yeah, yeah, yeah, exactly, exactly. We figured it out really quick. I mean, year one, you cracked the code. Yeah, I mean, this is like the old million dollar web page.

Do you remember that where you pay $1 per pixel? What was that? You accept equity. Well, take a stake in your management company Will take a stake in your life's work to be on the list Secondary market to have a lot of opportunities here. It's eventually Anything else top mind Jordan? I was gonna go through the Timeline and so I have a post here. I want you to react to it, David.

I thought we were gonna go through the top 100. One, no, yeah, the top we'll go. Yeah, and you can go long, short. You can go on the record and go long, short, every single top 100. That'd be great for your brand. It's a list of the best venture capitalists and Mark Andreessen didn't make the list,

but Mark Benioff did. And he's not an interesting. I don't think anyone from Sequoia did either. Oh no. I'm pretty sure. Not that I read it. And he's not a big fan of the list. I don't think anyone from Sequoia did either. Oh no. I think no one. Not that I read it. Sorry Andrew. For anything and thought about it.

Sean and Andrew, he got snubbed. Alvord has never funded any good seed companies, to be fair. Yeah, notoriously bad at seed. Really, he always missed them. Those guys just can't make a buck. Yeah. Those guys just,

just scraping pennies through the couch cushions to pay their plans. I don't think anyone on that first round made, I was a great, so. It's great, it's great, yeah. I mean. I'm not bitter or anything. I'm not bitter.

Yeah. Okay, I have a post. Yeah, yeah, yeah, read it. It's a post from M. Stanfield. I'm just gonna read it out loud to you. David, me, I'd like to invest in this brewery. SEC, no dummy, you're not an accredited investor. Me, cool, I guess I'll just teach myself

some double broken wing butterfly trades by watching TikTok. SEC, yeah, I mean, for sure, it's your money, do whatever. What do you think about it? Yeah, what do you think about accredited investor laws? Oh, I didn't know where this is. I thought that I have to fund a brewery. We funded a nicotine company. So like in the same vibe

Yeah a credit investor look like I You know I think the challenge of having credit investor rules is that you have it in one area of like the country and not in everything and that's the challenge to me. You have scams left and right throughout the economy, and yet in this one area, it's like, no, there are a lot of rules here. And so I think that feels unfair. So to me, you're either going to sort of clean up the ability to invest in things

across the board, or you should have sort of everybody operate at your own risk. And so I'm just thinking. Just like a level playing field generally, right? Yeah. Yeah, and so I feel like that's the issue. And then there's all these like gray areas of like getting around it,

which feel like you're not holding the bar properly. So I don't know. What's your reaction to the new news that Elizabeth Holmes is advising her husband's AI medical testing startup, which can conduct diagnostic tests using a small sample of blood from prison? I mean, we were saying this when we when we. I think she's so do.

She was in the news. You're saying like the real way to be vindicated is not just get out of prison, it's to come back, run back the same product, but actually win. And prove that it's real. Yeah. My first question is what are we gonna do with the blood?

Right? Like where does it go? Like the collecting is step one, but then what? So I don't have that question. I think send it to prison. She should be doing the titration in her prison cell right this about like the young boy plasma thing Yeah, anyway What do you think clarinus ceo says his pursuit of cost cutting fueled by advancements and AI has gone too far

When you have a port port Co that's later stage that says they're you know cutting everyone due to AI. Do you get do you get worried? They Know I think there's like a timing and sequencing here right when he will overstate the present You may be also underestimating how soon the future will be here and so It feels like a nice mid-cycle story for the eventual outcome, as you guys alluded to before. But it, like, does 90 plus percent of customer service get solved by AI?

For sure. When you look at like Ecom customer service generally, like 65% of the questions are, when am I getting my item? That feels like you can automate that, right? And then you start going to the next chunk of things and there's like 3 to 10% that feels like you actually need to think about how you respond here. And even in those situations, there's typically some version of a save. And so I think as you get to customer service across most companies, that becomes relatively

automatable sooner versus later. The idea that we need to announce that we're going to let go of a lot of people because AI is magical today might be a stretch. You thoughtfully informed us that the iPhone is made by Apple. Do you have any reaction to the news of the new Apple products that are launching? They're potentially a curved iPhone without any cutouts in the display.

New Meta Ray-Bans competitors, new Apple glasses, and then Apple intelligence developments. Are you the type of person that lines up to buy the latest Apple product? Do you like all these weeks big line big line guy over here? I Want to stay I want to stay focused on being a VC. Sure a smart home, right? You didn't mention the screen that goes in your house Which I think for every VC is just like a pipe dream to have screens everywhere. And so that is another one of the products

that is rumored to be coming out. A new Apple TV, we're at like six years later, new Apple TV. So there's a lot of opportunity here to spend a lot of money. The foldable phone confuses me. Yeah, why? I don't know. Don't need to fold it?

Well, I feel like there's a iPhone There's like a baby iPhone for little hands and there's the big iPhone for bigger hands Then there's a little iPad. Yeah, and a big iPad Yeah, so the foldable phone is like you have you seen the demos in China where it's three phones stacked together It's the size of one phone that you unfold and you get a tablet. That's pretty cool, right? So then I have a iPad. Yeah, but in your I just want to be able to, you know, you can put a newspaper in your back pocket and you pull out the newspaper and you pull it out. That could be just kind of a cool bit. This is interesting. They say the Apple's pushing

into robotics, which will include a tabletop machine with a robotic arm that would feature in the IOS. What does the arm do? I don't know. Assume it can juggle for you or something. Yeah, or it gets you beverages. I feel like that's the other VC pipe dream. Beer me Apple.

It's like the robot that just brings you stuff. Yeah, beer me Siri. I like it. Anyway, this was a fantastic conversation. Thanks so much. He's gonna hang out for a minute to say hi to TJ. Okay. I just wanna see what TJ's facial hair looks like it. Anyway, this is a fantastic conversation. Thanks so much. He's gonna hang out for a minute to say hi to TJ. Okay. I just wanna see what TJ's facial hair looks like today.

I have one more post from a former employee and a friend of mine, Josh Harris. He says, American oligarchs be like, this has over a hundred thousand likes by the way, American oligarchs be like, oh, I founded Bloober. European oligarchs be like, yeah, my family owns the trees. Have you found much success on the LP side in Europe? Do you go there?

Is this Josh Harris from Apollo? What's that? Is this Josh Harris from Apollo? No, Josh Harris, he was an EIR at Paradigm. I was afraid of Apollos. I don't want to say anything. Just clarifying. You don't mess with private equity people ever.

Real cardinal role. We have a great, mostly domestic LP base. Damn. No tree. TJ, I think. Big tree. TJ, Matrix. Never know. Okay, damn I punted a tree a big tree PJ matrix. Yeah, never know big big big tree LP base Yeah, big trees a lot of PCs that are raising new money from LPs in Pyongyang

Get in North Korea the final frontier And Antarctica that's why they're there Yeah, exactly Anyway, let's bring in TJ and we can all chat. Hopefully the layout works here. TJ, how you doing? There we go. Good.

He made it. He finally made it. Let's hear it from the crowd. Yay. Welcome to the stream, TJ. How you doing? It's great to have you. Great to have you.

Great to be here. And David just had to join too. He's just so proud of you. Not only the company that you built, but your transition to venture capital, which is the highest and best use of anybody, any geniuses time. We were trying to assign credit for your success and we kind of broke it down like 80% David, 20% you. Does that sound fair? Yeah, I mean, 70-30.

70-30? Yeah, you gotta give yourself a little credit. A little more credit. How's your, what was your first impression of David back in the day, I gotta ask? You know, it was pretty good. I talked, first time I ever met Dave was a phone call where I'd already told like

Five investors around was closed and somehow we saw his way into the round anyway, so he must have been made a pretty good first impression I think it was Skype was it phone? Well, I was like at some conference and we kind of met at Skype honest on a Skype But then we actually talked like the next day on the phone and that's when that happened You remember I do I feel like your memory is more shot than that. Yeah, I know. It's a rare memory for me. Thanks for letting that stick.

Is that important for you? Yeah. Very meaningful. I've been here on drug prices to get this conversation started. Very exciting. Were you, my last question for David, were you worried that TJ would sell secondary at the bee and get too caught up in Porsche's and That's in that whole world or

Was worried about my daily driver actually I still drive that car I was worried about TJ selling drugs at the bee Actually, I still drive that car. I was worried about TJ selling drugs at the B Thanks for having me on guys Great to see you Cool. Yeah TJ take us through it. What was your reaction to the news? How would you actually summarize what the proposal is? Because a lot of these press releases get written kind of aggressively, and then the actual implementation is very different. How are you processing the news, and what's your kind of early take on it?

Are you getting some of that context directly on true social, or do you wait till it hits other parts of the internet? Wait for the delay, for sure. I mean, I think maybe helpful to level set, like lay of the land for folks that are kind of less familiar with the category. So you know, I think probably the problem I've been most focused on the beat it, you know, beat a dead horse on on Twitter is this rebate issue.

And I think in many ways, that's the most interesting part of the executive order and something I'm most excited about. So today if you're a normal consumer, you go to the pharmacy to fill a branded prescription, so like a higher cost prescription. Maybe you need an EpiPen and it's January and your deductible just reset or you want to fill a GLP-1 at the counter and it's not covered by your insurance, you end up paying something like three to four times order of magnitude what that drug actually cost in the US. Now, so I'm not even talking about what it costs in other countries, but what it costs in the US. So for like in Ozempic as an example,

you're paying $1,000 or so, which is the list price, the gross price in the US. But the net risk is actually $250. That's the price that the PBM, the pharmacy benefit managers, negotiated. And you've effectively paid $750 more than that drug costs. And that money is getting captured by either the PBM, the insurance company, or your employer, usually some combination of all of those things. And everyone's always bemoaned, pharmacy benefit managers, obviously, they're kind of everyone's

favorite punching bag, the middleman in healthcare obviously, they're kind of everyone's favorite punching bag, the middleman in health care and the couching and all this margin. And to some degree, that's true. But no one has come up with a solution that could be an alternative path that could work better. That's the sort of fundamental issue is like, you could hate how the mechanics work today,

but without some alternative, it doesn't matter. And so I think what's most interesting about the EO is that there's a specific call out around requiring that pharma companies have comparable direct to consumer prices to list prices in other countries. So you take that as an example. In the UK, that's $150 to $250250 drug, actually not that different from our net price, right? It's sort of similar. It's a little bit less, but it's like, not that different. They're basically requiring pharma to have that sort of pricing available if the consumer is just

paying cash, kind of paying out of pocket. And why I think this is so interesting is if you start having these things get priced in somewhat of a rational way for consumers, all of a sudden the need to negotiate these rebates and have all these kind of backdoor negotiations and these fees and all the stuff that creates the complexity effectively goes away because you have some version of rational pricing for consumers. So there's a bunch of other stuff in the EO and I'm happy to get into some of the more nuanced complexities but to me that's pretty exciting if you actually have normal reasonable cash prices for the end customer.

So just staying on prices, is this confounded by the fact that in other countries they have larger government sponsored healthcare plans? So when we talk about Americans paying higher drug prices, are we saying American consumers versus European consumers? Or are we saying that the same pharmaceutical company actually makes more money from a single dose in America versus Europe? Yeah, so both is the short answer. But I think what's happened in the press that has really

been challenging is that everyone always talks about the list price as the price in the press that has really been challenging is that everyone always talks about the list price as the price in the U.S. right. And so the narrative if you listen to like the rhetoric over the last handful of years is like we're paying 10 times as much for a Zempbic or we're paying 10 times as much for insulin. We're not. The list price is 10 times as much as it is as a list price in the UK. We're paying and it says this in the EO. This is definitely the truth. We're paying two to three times the net price. Yeah, the Wall Street Journal here said that the list price for diabetes medication, Jardience was $611 for a 38 supply in the US versus $70 in Switzerland and $35 in Japan. That's

what you're talking about being not entirely accurate. Probably actually like a hundred bucks net in the U S. Okay. Got it. Yes. More expensive. Yep. But not 20 X. And so I think you're hearing in like, you know, I think you're hearing a lot of the dialogue be about like all the downstream implications of R and D and and the stock media investment, if these prices come down in the US

because we're the ones wanting to pay. That's an interesting conversation. People should have that conversation. It's pretty complicated and nuanced. But I think everyone can agree, consumers shouldn't be paying 10 times as much when they get stuck with the full bill. Yeah.

And certainly shouldn't be paying three times as much as the PBM is paying or their employer is paying. That to me is what's most interesting, is could come up with it. There's a real credible solve here potentially for that problem, which I think is much more compelling and interesting. Cool. What are your thoughts on the market's reaction? I think everybody expected this massive sell-off in pharma and biotech, and maybe it's because there was other news announced this morning, we haven't seen that, but.

But biotech markets went up by like 3%. Yeah, do you think people are processing this? What we heard earlier was that it was kind of like, like a really, really bad scenario was priced in, and this was less bad, so it popped, do you buy that narrative or what are you taking away from the kind of the market reaction? Yeah so the PDAs and pairs have gotten whacked which makes sense if you think about the dynamic here. I think there's a lot of skepticism

about how how much this can actually be implemented in the success that they'll have. If you jump back to the last administration they tried to repeal rebates, which is solving the problem I just described. It's sort of getting rid of this excess margin that's invisible to the consumer and they failed. They got it pretty far along. It was like an admirable effort, but ultimately CBO shut it down because rebates do contribute to lowering premiums and there's things that made it difficult to get rid of rebates. They also had an MFN approach on Medicare Part B drugs. So like drugs that are dispensed if you're in office, things like that. And that failed in

the last administration. So I think my sense is that some combination of if the real punchline here is that effectively this is a backdoor way to get rid of rebates, it's actually not that big of a deal for pharma. Like they're still getting their net economics. It's just that for the middleman, right? So that's like one indication from the market. And then there's probably also just some skepticism about whether this will actually get implemented. And I think that's fair skepticism given the historical track record here. What does this mean for pharmaceutical R and D the way it's done? We talked to Zach Weinberg a little bit about NIH funding getting cut. There's debates about how research gets done in, you know, the Ivy League universities spin out a lot of drugs.

There's so many moving parts to actually get us what we want, which is probably just like a cure for cancer or just great new drugs. Right. How is the actual pipeline evolving through all these different changes when you stack them all up? Yeah, so if you jump to the other other components of this beyond the consumer implications, that's where I think these questions become more relevant, right? So if there's really, you know, an MFN for the net price that we pay compared to other similar situated companies or countries that that would have potentially some of the impacts

folks are concerned about on R&D. I think we're so far away from that and that's so difficult to imagine truly getting implemented on face value that I'm skeptical that that's really the thrust of this EO. I really think it's potentially a better way to eliminate rebates than historically. I do think if you kind of play out, let's assume that all of a sudden, Ozempic does cost 200 bucks at the pharmacy counter, which I do think is a credible path here and

it will be reflected on what the true net cost. And all of a sudden consumers are sort of just paying for most of these products out of pocket versus like bothering to use their insurance. And then you have pharma companies competing on price to win the transaction. That's actually, I think, how net prices come down ultimately, not because there is going to end up being some true kind of dead net MFN that they're able to execute again. So I think the debate about R&D is sort of, you know, to me is from a practicality standpoint, um, kind of two clicks away from where we are today. And I'm pretty focused on, can we just get to a place where consumers are choosing these products based on

price instead of PBNs and other middlemen trying to determine price? Why, why is the market for Zempik so competitive on day one? You hear this whole narrative around patents and you know, the whole idea is like, yeah, you should be able to incentivize this like this heroic, Herculean research effort, because you'll generate all this value over the long term. And that certainly happened with Novo and their share price. But at the same time, it feels like the GLP ones came out. There were like every major farmer company had one around the same

time. Then there was compounding going on. There was so it felt like they were already generic almost, but I know that they're not. But why, why did the market play out in this way is just because it's such a dominant technology. Everyone's thinking the same idea or something. What happened there? It was originally approved for diabetes, not weight loss. And then weight loss is a by-product that they figured out was a, was a not a side effect, but also an effect of the, of the products. And so when it caught, you know,

the public's eye was already much farther along in its life cycle than a traditional kind of new indication, new drug. Got it. That being said, like the, the price dynamics with GLP ones are not that anomalous. Like if there's a successful product and there's a known pathway, there's going to be other similar products that get developed in the current ecosystem supply chain, current structure that does drive down net price. That's why these things don't cost a thousand dollars anymore. And so other net price is 200, 300,

$500 depending on the how new the their net price is 200, 300, $500, depending on how new the GLP one is. So like the system actually kind of works okay right now. Like the price does come down based on competition relatively quickly. It just doesn't work particularly well for consumers in these instances where they're paying out of pocket. Everyone else is wearing a hat.

So I wanted to put on a hat. Can you comment at all on Europe's existing solution? They have some complex system of price controls where they tell US drug makers what they can charge is what we heard from an earlier guest. Yeah, somebody else was saying that this EO is like Bernie Sanders' dream. Is that true at all? Are these like,

are we in like left wing or right wing territory? I can't even tell anymore. Yeah. I mean, that's going to depend a lot on exactly what's being contemplated here. Right. I think if the extreme interpretation is these are literally price controls at the government setting, like, yes, I think you're kind of in the Bernie Sanders extreme version of managing these prices. I think if you take the other extreme, and it's really focused on consumers, and they say, well, look, you can set reasonable prices for consumers that are somewhat comparable

to those prices in other countries, or consumers can just buy these drugs from other countries and import them here. That's not particularly, that's not a price control, that's just actually opening up the market to more competition. So really, I think it depends on the exact, uh, the exact implementation and what's being contemplated. Yeah. Uh, where are you seeing opportunity in startups in healthcare to kind of carve out value or deliver value in healthcare broadly right now?

I mean, as you can probably tell from my tweeting, I'm quite interested in how you pull forward shopping and pricing into healthcare. Like to me that is the linchpin to make the category work better. That was a lot of the work we did. At Amazon, as far as I know, it was the first time you could actually see

an insurance price for something before you bought it, healthcare, which is pretty insane. And so, you know, I think being able as a consumer to understand what your options are, how much they cost, what's available, and ultimately, like transact in a very seamless way, I think is the most interesting thing. Now that could be like literally what feels like a marketplace, right? I think that's a very interesting opportunity in different categories. It could be utilities that make that possible.

So like super clear, like APIs for pricing, there's a bunch of permutations of things that enable that, but that's what I'm still, how are we talking about APIs in 2025? Like it's the age of a GI ASI. Like how do the insurance companies not have the APIs? This is insane. Yeah. I mean, what's going to end up happening because you know similar to faxes we still send faxes, but really it's just two digital interfaces You're with all these like phone agents that are talking to each other, but basically I swear to God I don't know. This is an hyperbole like this is crazy

Insurance companies you're like, okay cool. Like you want clear pricing and you're bombarding us with phone calls with your AI bots. We'll just give you like a dedicated AI bot and you guys can probably keep this figured out. Like it's not bullish for 11 labs. Yeah, this is gonna be like voice agents win everything instead of just building an API. Are there any places where AI and healthcare makes sense or is exciting for you. There's like the super frontier research going on at DeepMind. There's protein folding is solved now. There's stuff like that.

But then at the same time, I can imagine like the use cases you described being very real business cases. Yeah, the voice agents specifically feels like an area that's experiencing somewhat rapid growth, but the nature of that also means that it's probably, you know, it is hyper competitive. So I'm curious if you think categories like that are even in festival. It's tricky, right? I think I, so I buy that there's going to be a bunch of

administrative efficiency in healthcare, right? Things like phone agents and prior authorizations and other kind of very laborious work stream workflows. It's much less clear to me where that value accrues. I think that's the tricky bit. Like there's an argument that it actually accrues to the service businesses. Like that's historically where the value accrues in healthcare. And so maybe the most effective service companies

can accrue that value as being good at implementing AI. The place where I'm pretty convinced in it will be valuable and will drive real venture returns is companies that are good at compounding those as differentiation for consumers. So as an example of before, it would have taken the human $40 to book you an appointment to see a specialist if you can use an AI bought to do that for two bucks

Unlocks a new consumer experience to write. It's not just like an administrative Efficiency, and there's lots of these examples. That's probably what I'm the most you mentioned compounding. What's your take on drug compounding? I'm quite vocally Oh, God. I am quite vocally anti-drug compounding. Why, is it a quality issue or is it just a market dynamic issue? It feels like- He's an IP respecter. I'm an IP respecter above the law

and below whatever the right nomenclature is here. It's twofold. I mean, I do think there are real safety concerns. Last time there was a prolific compounder compounding a commercially available product that scales and like a compounding center and they killed a hundred people with meningitis like happened. Not claiming that's going to happen here, but that is like the overhang from compounding. It also just, it sort of outside of these temporary shortages very much violates IP law.

And so there's, so the conversations before about whether there's any incentive to do R and D, well, if someone can immediately just copy the product, there's certainly no incentive to do R and D. It's much worse than some kind of Is it kind of a, is it kind of a beneficiary? Like is, is there a boom in compounding because of the internet or like, is there a, is there a market force that's driving the increase in compounding or is it just like, no one ever thought to do the loophole before? Well, the funny, the funny dynamic was that I was just going to say, it's not

like people are compounding and then, you know, Hey, we didn't have to do R and D. We're just sort of like, going to compound to this and then we're gonna pass the savings on to you. That's been like a big part of like the messaging online. And it's like, no, like you're gonna pay the same and like you're gonna like it. Just like be happy that you're getting the drug as man seemingly. The story.

I think the market dynamic is rebates, right? If we'll go be, or as epic was the net price for consumers because now out of pocket drugs and they were 200 bucks, 300 bucks, is there like much of a market for compounding, which are also 200 bucks and 300 bucks? Like the reason that there was so much demand for it is because of this disconnect between list prices

and net price, right? And so if that dynamic goes away, all of a sudden the opportunity for compounders to really gain share is minimized, right? Because like, I can understand why someone would really not be willing to work at a four, paying a thousand dollars a month, and they can get the compounded product for 200.

But if we're talking 200 versus 100 or 150 for a compounded product versus the real product is a very different calculus for the consumer. Yeah. What percentage of doctors do you think are using chat GPT on a weekly basis? And is there a big wrapper to be built there just giving them a more HIPAA compliant version

of chat GPT? I can't imagine, shouldn't be legal. Yeah, I mean, I bet it's like, like using it at all on a weekly basis, like most doctors I would imagine at this point. Using it like as part of their workflow all day, probably still a smaller subset, but definitely in the double digits.

Is that, is chat GBT HIPAA compliant? I, I was just asking the most obvious question. You don't want to be dropping like specific patient information into chat GBT, but like you can certainly do- Generalized?

You can do generalized. Yeah, there's other ways to do that, but certainly generalized workups and notes, and we're using it a bunch, and one of the companies I'm involved with, to help automate the questionnaires, or the notes, or things that happen downstream for efficiency, like tons of sense.

It absolutely happens, and we'll continue to do that. Some of the biggest, I think everybody has this idea in their head that you're gonna be able to go to, it's like AI doctor. I don't know what that looks like, right? I don't know if it's embodied. I don't know if it's a screen. I don't know if it's a-

That doctor is Chad GPT roughly. Yeah, yeah, but I don't necessarily know what the form factor is, but as an investor, are you, is that a category? How do you think about that opportunity, right? You know, at a high level, is that one company that's just gonna dominate? Yeah, we've seen that for lawyers, is there going to be- Yeah, or is it more of like a co-pilot approach and it's just less exciting than it sounds? It's just more doctors can see more patients

and deliver better service, but how do you see that category? Cause I, it's just one of those areas that people always bring it up in the context of, oh yeah, everybody's gonna have like an AI doctor. And it's like, okay, well, what does that actually look like? Yeah, I mean, I, I mean, I think for sure the first step when you're trying to deal with symptoms

and figure out what's going on is going to be going to chat GPT or another similar CX, like pretty confident that's gonna be the first step. It's not that dissimilar from the first step today, which is people were Googling symptoms and trying to figure out like what's going on. And it was just much less efficient, but ultimately like a very similar kind of flow.

So I think that's for sure gonna happen. I think the interesting question is, are the vertical players actually gonna have a better differentiated product than the foundation models? That's a lot less clear to me. Like I still think the found like the core foundation models, that's a lot less clear to me. Like I still think the core foundation models in my personal experience are better at diagnosis and better at figuring these things out still,

even though there are dedicated other models. Well, and that's a big issue, right? You could have a wrapper that's specific for diagnostics, right, that you can message and say, hey, I have this like, you know, skin thing, like what's going on? But that's like so infrequent, you're not paying $20 a month for something like that.

If ChatGBT can do it 80% as well, and you know, it can kind of get you on the right path. And so I don't think- This is like ChatGBT eats WebMD, for sure. I think the more interesting problem to solve is like at some point you get through most of that conversation, you're pretty sure you figured out what's going on. You still need an intervention of some sort if there's anything moderately serious going on.

You either need a prescription, you need labs, you might need some physical intervention, you need labs, you might need some physical intervention, like you need something. And that's where nothing in healthcare has actually been digitized, right? Like if you think about this compared to other retail categories, which I do think is the right mental model, like ChatGBT is now implementing Shopify checkout right in ChatGBT, right? So you can go from that, what should I buy, straight through to a checkout flow. No one's built that checkout flow in healthcare. You don't have a product catalog, you don't know how much stuff costs, you don't know

what's available to you based on your insurance. I think that's actually a more interesting problem for startups to go wrestle through because chat GBT is going to be pretty damn good at the things you used Google for before. And it's not going to deal with any of this stuff. And so the stuff I've been working on and spending a lot of time on is much more in like how do you build equal product catalog in healthcare, how do you ultimately make it easy to transact,

how do you make it easy to shop because that infrastructure still has to get built regardless of where the kind of front door is into that experience. Shopify for health, something like that. Can we do overrated, underrated telehealth broadly? How are you feeling about telehealth? I am bullish on the sort of usage of telehealth still. I'm

probably bearish on most of the existing business models in monetization, it's probably a short bit. What about overrated, underrated? Existing business models, have you been surprised to see like HEMS almost second act in the public markets? Do you think they would even have had a second act if it wasn't for GLP ones?

Or is there some underlying unlock that they have? I mean, it's sort of like commenting on any medium stock, right, it's a tricky thing to have a strong opinion on it. Well, I think that's enough commentary. Overrated, underrated, GLP ones. Underrated. Overrated, underrated, GLP ones. Underrated. Underrated. What about some of the foundational AI applications

coming out of DeepMind, protein folding, any of that stuff, moving the healthcare markets or how you think about healthcare? Not until you have to have an opinion on that. Yeah. Too complicated. Too complicated, get out of it. Anything else?

When you were a pharmacist, did you imagine a world in which you retired as a pharmacist at you know, at 65, or did you like cars too much from a young age that you knew that you'd need to figure out another way to build a collection? I think it was pretty clear that the working behind the counter was gonna be a short-lived endeavor for me,

that's the question. Are you asking, is that what you're asking? Yeah, basically. Yeah. Yeah, I think that was pretty clear from the job. How much do you love being a venture capitalist now? Is it just the best? I love it. I sort of like the second I took the job,

I became an expert at everything. It was so convenient. Yeah. Yeah, maybe- It's almost instant. It really is almost instant. Take us on a little world tour of all the geopolitical conflicts, how we would resolve them really quickly.

I'm just really happy that my first conversation on here was political in nature. That was what I was looking for. Yeah, that's fantastic. Yeah. The last question I have, just generally curious, given you guys are, I'm sure do multi-stage, but I imagine given, like are you like trying to pick,

like are you investing in a couple companies a year? What's the goal for you? And I'm assuming you meet a lot of companies all the time that you like, but don't end up investing because you're not like, you just more of, from a conflict standpoint, if I do this deal and you know, a better company comes around in six months or a year,

I'll be conflicted out, is that accurate? Yeah, I mean, certainly the first bit's accurate. We're doing a concentrated early stage investing kind of classic venture. So I'll do two to three deals a year in any given year is probably a pretty standard year for me and for the other partners of Matrix. I mean, I certainly think about the conflict thing.

I think that pre-assumes that I'm constantly liking things and wanting to do all of them. That's probably not the dynamic. It's really like finding like really interesting things that I want to spend a bunch of energy and a bunch of time on versus seeing like a lot of different things that I'd love to kind of be less involved in. So, uh, it's certainly a dynamic, but we're, you know, we're doing a couple of deals a year. As you do deals,

when do you start using the term we to describe how the company works? That happened pretty quick too. It was like the same as my expertise. Just immediately write some small check and it's we. We are building the future. We, yep. Dropping a we as a venture capitalist is strong. Let's see now. Hey, I'm on the board.

Yep. I'm part of the team. I don't know if this is fair. You're not a performer operator, so otherwise you're not allowed to. What, the last thing before you take off, what should people be paying attention to in the days and weeks from now around the actual implementation of the of the EO? What are

you looking out for? I think it's obvious that you know you're not going to walk up to a pharmacy after work today and see lower prices, but what are you looking for? I personally would be focused most on how much this is really about the difference between gross and net prices, right, which we talked a lot about, or whether it's really about true competitive net prices with other countries, because those are pretty different paths, right? And it has all sorts of different implications. So I think the more this feels like it's about solving the consumer problem and less about solving

the kind of payer problem or the fairness problem, the better for me personally. And the more it feels like we're trying to do some true price setting, kind of net and the fan against other countries, the more I'd be a little bit nervous. So that's where it pivots for me is, is this about consumers, is this about net MFM? Great. Do you think the Mission E makes it to

production? Do you think Porsche goes a different direction with this next supercar? You know, I know so little about like new modern Porsches. I'm like the furthest from an expert, but no idea. It's a short answer. Ask me about something old, and I'll talk about it for a long time. Yeah. Well, we'll be coming out your way. We're working on putting together the Amman Rally.

So more news to come there. You'll be one of the first to know. This is fantastic. Awesome, thank you for coming on, TJ. Yeah, thanks for having me. This was great. We'll talk to you later. Appreciate the insight, cheers.

Were you able to clock his watch? Aquanaut. You have something on Aquanaut? Well, if you're looking for an Aquanaut like TJ, head over to Bezel. Your Bezel Concierge is now available to source any watch on the planet. Seriously, any watch, I think I already did that read actually.

And then, of course, we gotta tell you about Wander. Find your happy place. Book book of wander with inspiring views hotel Great amenities dreamy beds top-tier cleaning 24-7 concierge service. It's a vacation home, but better job better hit me with some soundboard What do you want John? I got options? Ashton Hall, you know, it's my favorite The movie trailer switch up favorite. Oh, the movie trailer switch up.

Let's switch up some poly markets up that are tearing up the news. Uh, the odds of Donald Trump eliminating capital, capital gains tax this year are surging. It's now looking more likely than not that they'll be eliminated. 57% chance unclear if that means they'll be taxed as income or not taxed at all. But they will be eliminated. We eliminated capital gains tax. It's now 50 percent, 55 percent or zero percent. Who knows? Also, the odds of Larry Ellison buying

TikTok have doubled this morning. One in five chance now that he buys it before July. He's up at 18 percent. Someone knows something. Someone's going in with size. But of course, this it's phrased as who will acquire TikTok, big question about whether that's a whole co-acquisition or a minority investment from an American company.

Could also be the data is hosted on Oracle's cloud, their servers. Could be that the algorithm is run on Oracle servers, but that doesn't necessarily mean that Oracle knows what all the weights do. Yeah. Know that they're involved in the training of the algorithm. And so that's a big question is that, Hey, if, uh, yeah,

you're inferencing ticktocks algorithm, but the weights have been trained in China to, you know, be favorable to China. That still doesn't really resolve the issue. So I'm sure we'll be tracking that. Anyway, let's run through some timeline and then get out of here. We're doing four hour shows now. Have you noticed that it's just grown? It's crazy. We're just doing longer and longer to addicted to podcasting. The Pope was chosen in two days, your wrote your remote hire needs doesn't need

five rounds of interviews. I said what I said So funny that this got five thousand likes on threads and then three hundred and fifty thousand likes on X as a screenshot That's what's going on here in this screenshot. Do you see this? 350,000 likes I haven't seen that on anything. That's what an Elon post I and you would think some higher about like viewing the That's huge. But an Elon post. And you would think for Mo Tire about interviewing, that's not that big of a.

Yeah, that's so niche. That's very, it seems niche, but five million views here, 31,000 repost. It's also funny. MC Squared is just the banger god. Yeah, I mean, the, I should put that in banger archive. Seriously.

Now the funny thing is, the counterpoint here is that if you're meeting somebody for the first time, it's not like the cardinals were meeting the pope for the first time and they were just like, you know, oh, we just decided in two days, right? There's a lot of past history there. If you're talking to a remote hire, hiring the wrong person is just so painful. It really is the worst for everybody involved, right? The person who got the job, who ended up not being the right fit,

company who hired the person and has to invest all this time trying to ramp them, and then un-ramp, de-ramp, let them go. Switch your business route. No, it's just really painful. And so if you're if you're, you know, four interviews in and you're not confident, do the fifth one, you can avoid a lot of pain. So what's the right number of interviews for remote hire? 50

50 have each of your 50 interns, as long as you in person workouts in that process, in that process, I think you're gonna be good. Anyway, I wanted to highlight Jesse Pelton. Interesting new account. Hadn't seen this guy before. Elon Musk's been amplifying him a bunch and he's been posting about solar energy and energy a lot and just has some great posts and seems like a newer account.

I don't know, he might be on there forever, but seems to be blowing up most recently. He said, if God wanted to build us a type one, if God wanted us to build a type one civilization, a Kardashev type one civilization, he would have one, put a giant fusion reactor in the sky emitting blackbody radiation around 5800 Kelvin, which is exactly what we have. Two, made 28% of Earth's crust out of a semiconductor with a matching band gap 1.1 EV or so which is exactly what happened and then 3. filled the oceans with an alkaline metal we could use to store limitless quantities of energy sodium or something similar and is that would be a crazy coincidence and he's

basically super long EV battery energy production. And I just think there's something about this account where I just saw a few of the posts, a lot of them were lightly technical, but for coming from this very optimistic techno perspective that I thought was interesting, hadn't seen the account before, so I wanted to highlight it here.

Thought, I mean, we should honestly have him on the show at some point, because it seems like he knows his stuff, but I want to dig in deeper there. The other interesting post that I wanted to highlight was from Mike Noop, who have him on the show at some point because it seems like he knows his stuff But I want to dig in deeper there. Yeah, the other interesting post that I wanted high that was from Mike newb Who's been on the show? founder of Zapier and and Arc AGI and he said we are targeting at least three orders of magnitude instead of 3x with Arc AGI 3 But directionally a lot of useful insight on AI benchmark development in this thread and so so Ophir Press posts, I have a post where I talk about how to build good language model

benchmarks. I've had to edit the part where I talk about how you should think about making your benchmark hard multiple times now. And so the first time he says, you have to make your benchmark challenging to evaluate language models. The accurate, if you drop your benchmark and the accuracy at launch with the best language model is 80%, people will see your benchmark and the accuracy at launch with the best language model is 80 People will see your benchmark is already being solved and they won't even try to build models to improve performance on it

So you should think about Launching a benchmark interesting at between one to thirty five percent accuracy for the best model in the game So take gemini or take open ai's best model and if you if you can get your benchmark to one to 35%, you're good to launch. Then he edits it in January of 2025. He says, due to the extremely fast development, I now say that you should do 0.1 to 9%, take that way down.

Anything higher means that the benchmark is too easy. And then he says, May of 2021, sorry, I have to make another edit due to the speed of development. I'm now asking people to think you can't just think your benchmark has 0% at launch. You have to imagine that your models would achieve negative 200% at launch. The smartest human ever should get a negative score on the test. Find benchmarks that are so hard, find questions that are so hard that even if the models improve 3x

They still get zero just building a benchmark where models get 0% today might not even be enough anymore You have to look at how the models have been improving over the past three to six months Try and predict where they'll be in the future and build benchmarks that would not only make the current models fail But benchmarks that would make the models of next year fail anything easier than that might get saturated much more quickly than you expect. So I just thought that was a funny interpretation. We've been talking about benchmark saturation and the depth of the benchmark. But it's interesting to hear someone in the industry kind of put it in such hard terms there.

Anyway, Palmer Lucky is advocating that the United States should immediately expand our naval base on Guantanamo Bay into Liberty City, an American Singapore of the Caribbean shipbuilding arms manufacturing near equator space launch energy refining and more in beautiful paradise. Any Cuban who can escape there by running swimming, boating or biking gets asylum and a work permit to help build this mega project by robbing the communist party of their workers in critical areas like power generation and military might. We accelerate regime change.

Liberty City will be the first domino. I like how he's thinking outside of the box. Liberty City. Liberty City, GTA reference. Yeah. That's great. Anyway, we talked about Apple's new product launches. It's gonna be a big 2027 that they're lining up for

and a bunch of new iPhones coming out. What else is interesting to talk about in the news orb? But what else? Yeah, this is interesting. The Apple foldables thing is so funny. They gotta do it. But I mean foldables, it was one of those things where, you know, like it was an interesting idea,

but the first iterations, even from the top tech companies, not Apple, not named Apple, were bad and everyone kind of knew that they were bad. And so Apple waits to do it until it's good. It really used to be much more of a thing to text. Like this horizontal. So I was thinking the foldable phone, you bring it back. But I think people just got pretty fast at typing.

Yeah. Swap it in on. New hat. You gotta do all the different hats. This one's a little tight. Anyway WorldCoin launched the Orb Mini designed to make human verification more accessible. It's transportable and seamlessly accommodates your lifestyle. The Orb Mini it goes where you go. And I guess there's a bunch of world stores, showrooms throughout the US now.

We're gonna hopefully have the founder of World On tomorrow, Alex. And anyways. So my take on this is like, I understand the main pitch, which they put out this infographic that said like 80% of gamers online say that their online gaming experiences are being ruined by bots. And that makes sense. Like

there's a cheater, there's a bot, there's AI. Like no one really wants to go and play chess against the hardest AI possible. That's just not fun. They want to play against humans. And so if you play against a cheater, it's just less fun. You want to play against real people. So like verification makes sense there. But what's odd is, like, if you play out the AGI ASI thing really, really far, you would imagine that at some point, the AGI figures out how to either steal or grow eyeballs, right? Like, or assemble them.

Like, it's really dark. Stealing the eyeballs. I've hit a World I've hit a world coin human verification checkpoint. I should just get a human. Yeah, the future is the, the terminators keep us in cages and make us do arc AGI puzzles

and then scan for the world coin. And it's just like, there's arc AGI puzzles all day long cause we're just like being scanned brutal. But, but, but final job just being scanned. Brutal. Yeah, it's the final job. UBI is just offering your eyeballs today. If you believe in the nanobots and you believe in the paper clipping, if you could turn me into a paper clip, you can turn a paper clip into an eyeball, right?

And if you can turn a paper clip into an eyeball, because it's just matter that you're reconstituting, right? And you're just assembling atoms and molecules. Just matter reconstitution. Yeah. So I mean, I guess that's farther away. The bot crisis is here almost today, right? It is in the sense that there's a lot of spam out there.

We need a better version of CAPTCHA. RKGI is maybe like six months after being cooked. And so the orb kind of makes sense in that case. But it is an interesting intermediate step. But I don't know. It's an interesting story to follow and interesting to see how it rolls out. And I'll be, I mean, I'm excited to see, you know,

there will be gamers who sign up. They will test it and they will let us know if their Cod lobbies are cleaner. You know, if they're on Rust and they're having more fun. That's good. Isn't the bot problem something you can solve at the software layer? Like, obviously if you could get a device to just like-

You can get a device that does that. I know exactly what you're saying. Yes, you can get a robotic arm to move a physical mouse and press buttons on the keyboards. Yes, and use computer vision just to look at the screen and you can cheat that way. It is possible. It's not perfect there. It's obviously better to just go into the code at a lower level

and then and then see, okay, I'm not even getting pixels. I'm getting more like screen view. Exactly. Yeah. But but screen view is a is a viable cheating strategy form of potting. Yes. Yes. And so obviously it's much better to just interface with the net code that's coming across. So you can see through walls and you can understand the full map and there's no fog of war all that type of stuff But you can cheat just by Camera at the screen and like that's that's almost impossible to detect until until the the the front-facing Camera turns on and it's constantly scanning your eyes to make sure that there's a human on the other end Which I mean face ID is pretty secure. It does kind of make sure that there's a human on the other end. Which, I mean, Face ID is pretty secure,

it does kinda make sense that there's be something here. You gotta build it in the next Xbox, I guess, or something. I don't know. Well, before we go, we should talk about Figma. Figma is our latest partner. We talked about this a little bit last week. It is the design tool that we've used to build the TBPN brand. Every single asset that we create, for the most part,

comes out of Figma. And it's a tool that I've used for my entire career. So very excited to partner with them and be on the extended team. We were at Config last week. They launched a bunch of new products. Our takeaway is the Figma for Figma is Figma. I've said it before.

But the new product they launch is Figma Sites, which sounds simple but is really exciting. Basically, you can turn whatever you make in Figma into a website. So if you're not using Figma already, go check them out. And thank you to the whole Figma team for supporting the show. Fantastic.

And thanks to you for watching and listening. We'll see you tomorrow. And making it this far. We will see you tomorrow. Enjoy the Bull Market Day.