TBPN Live - Elizabeth Holmes and Theranos, AI Data Center Forecast Jumps, Poppi’s Pepsi Deal | Diet TBPN

Episode Date: October 20, 2026

Diet TBPN delivers the best of today’s TBPN episode in 30 minutes. TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays 11–2 PT on X and YouTube, with ea...ch episode posted to podcast platforms right after.Described by The New York Times as “Silicon Valley’s newest obsession,” the show has recently featured Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella.TBPN is made possible by:Ramp - https://ramp.comPublic - https://public.comCisco - https://www.cisco.comConsole - https://www.console.comCrowdStrike - https://www.crowdstrike.comFigma - https://www.figma.comMongoDB - https://www.mongodb.comNYSE - https://www.nyse.comRailway - https://railway.comShopify - https://www.shopify.com/Follow TBPN: https://TBPN.comhttps://x.com/tbpnhttps://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235https://www.youtube.com/@TBPNLive

Transcript
Discussion (0)
Starting point is 00:00:01 Yeah, this weekend, every time I would refresh, it would be you can see everything takes. Everyone had all these different opinions and takes. The one that stuck out to me was that there's this, there's a little bit of a, like, you watch the movie and most people came away thinking more positively of Elizabeth Holmes being like, oh, maybe she wasn't, maybe she's not that bad, maybe there's more to the story, maybe she was manipulated. She seems to be manipulated multiple times, potentially. Like, maybe she's more of a... Some people might be like, she's bad, but she'd probably be nice to me if I interacted with her. Yeah, yeah, a little bit of that. There's some sort of, like, suspicion that I feel some people in Silicon Valley are having where it's like, oh, it's just like the fake it to you make it thing.
Starting point is 00:00:47 It's not that big of a deal. I just can't stop thinking about, like, it seems like she's just a bad founder. Like, put aside the fraud. Like, it just seems like, like, total slop in terms of... of the execution of that business and gives me absolutely no faith in a Theranos 2.0. Totally.
Starting point is 00:01:03 And the whole time I was like almost yelling at the movie screen because she taught, the way she describes Theranos is like this box and like it's in the cloud. It's just like it's so, it's so unaware of the medical device industry.
Starting point is 00:01:22 Which is so frustrating to me because she, she's making this point where I was like, we have an invention. And our invention allows you to test blood for things. And we test all this stuff. And she's making it sound like it's like magical science. And it's like, I looked it up.
Starting point is 00:01:37 There have been 60 plus companies since Theranos started that sold for over $100 million in that category. It's like, it's like someone coming to you and being like, I have a magical, we invented something. It takes information and it stores it on a database that you can access through a website. It's like, so you make a SaaS product. literally hundreds of people make those. And there are thousands of people that work in the medical device industry, and they've made boxes that look kind of like a Phaeranos box, and it runs a test.
Starting point is 00:02:08 And they don't go to prison for 10 years. Yeah, they don't go to prison. And she never just says, like, look, this stuff happens all the time. It's not crazy that I'm going to be able to build a box that tests for something. Like, this happens all the time. Instead, it's like, I'm the only one that could possibly do this, which is so weird. It's such a bad frame to not just admit.
Starting point is 00:02:27 what's really happening on the field, which is that diagnostic boxes get built and sold every few years for hundreds of millions of dollars. You could just do that. But instead, it has to be this pie in the sky nonsense, and it really, really frustrates me, as you can probably tell. Nikita Beer broke down a little bit of this concept. He said one of the things that hasn't been talked about
Starting point is 00:02:47 with Elizabeth Holmes, she was created in the era of the TED Talk entrepreneur. And this is exactly what I was picking up on. So between 2011 and 2015, after the release of the social network, there was an entire apparatus built around child prodigies, college accelerators, young entrepreneur organizations. I watched countless founders of hard tech companies present fraudulent products at conferences. They had fake studies with fudged numbers. Most of the adults in the room excused it as faking it until you make it, but Holmes was the one
Starting point is 00:03:19 who rode the wave better than anyone else. When the TED Talk era came to an end, when people finally came to, to their senses. She was still running the same playbook. And in the most scrutinized field, there is medical technology. When people ask how far she, how she got so far, it is largely explained by the period she did it in. And she got caught when the world suddenly woke up. And so there's other things, which is that this is strictly regulated by the FDA. So if you're a founder of a medical device company, like what you are going for is FDA authorization. That's marketing authorization, that's literally the ability to sell the product. It's not illegal to
Starting point is 00:03:56 build a medical device. It's illegal to sell it, to market it. And so that also includes, like, you can't, you typically can't go on podcasts and media and say, oh, yes, we have this thing that does this thing. We have to say, oh, we're working on this progress. Like, we can't say that it actually works because we haven't been approved to say that by the FDA. Spoiler. You don't want to hear spoilers. Just turn, leave the stream going, but just turn the audio down. Yeah, and we'll just talk away. What spoiler do you want to talk about? So, Billy does this side deal to get a cut of profit on the back end of the movie. You would probably know what that's exactly called. Yeah, points on the back end. Points on the back end. So he does
Starting point is 00:04:38 this thing. Incredibly good. And then later, after the movie's totally been, like, finished, he decides, ah, this is going to look pretty bad, backs out, right? Damage has already been done. And then, Right? Like he looks, he looks, he doesn't look great. And Elizabeth is trying to say like, oh, I don't really know much about the details. So one thing, like the damage was already done and now the movie is a massive hit and it's going to be continued to be a massive hit. It seems like it'll be like a cult classic.
Starting point is 00:05:09 And I can't imagine being 60 years old being like, I'm going to turn on some Nathan Fielder just take me back to the good old days. But the funny thing is, do you think that Billy, do you think it made sense for him to do the side deal because she has, she claimed in the show she has hundreds of millions of dollars of restitution to pay. So of course she wouldn't want to make, even if she wanted to make money on it, she wouldn't get any benefit of it. So she would want to route it through Billy. It's a good question. There's some ambiguity over whether or not they're married. I couldn't get to the bottom of this, but I think they might not be legally married, in which case it would make sense for him
Starting point is 00:05:49 to get those profits and then use that for their kids and their family, but then it doesn't flow to her bank account, which immediately gets grabbed by the investors. That's what I'm saying. I think you might be on to something there. She gets a lot of the benefit in that sort of funding. Yes. And so is your point that if she's in on the deal sitting there being like,
Starting point is 00:06:07 we want to get paid, but just pay it to Billy's account, don't pay it. That's more tricky from a restitution perspective. Totally. I imagine a judge would be like. Oh, that's an interesting wrinkle. I hadn't thought of that. Yeah, a judge would be like, yeah,
Starting point is 00:06:19 you're earning money. I don't care. Yeah, I don't care that you did. Billy has to like go behind her back and make it really public that she's, yeah. He's going behind her back.
Starting point is 00:06:27 Huh. Yeah, good point. Good point. I mean, the wildest part about the whole you can see everything, Theranos thing, is that one,
Starting point is 00:06:36 I've talked to Billy on the phone about the Twitter that he was running and all that stuff, answered all those questions. Nothing that really was different than what you saw in the movie. But he sort of gave me the pitch for Theranos 2.0, and I was like pushing back, being like, so you should go for like a specific
Starting point is 00:06:53 diagnostic, go for like do this. Like I have a buddy who ran this exact playbook, made $400 million in a very short amount of time. Like this is tractable. And then he was like, when did you have this conversation? I talked to him like last year. And so my pitch was I said, look, if we're going to take this Elizabeth Holmes redemption arc seriously, I want to see some great calls about biotech. because this is sort of what's happened with other individuals who have been rehabilitated. From a branding perspective, my point that I posted about was like, I want to see Elizabeth Holmes give an incredible take about peptides and how that market will evolve, and then watch that happen and be like, oh, wow, she was early.
Starting point is 00:07:37 I want her to be a good biotech analyst. I want her to be smart on the science. I want her to tell me what's happening. The crazy thing about the movie, though, I can't remember a single point where she was locked in on anything science-related. I completely agree. It was just, it was Billy. That's the point. Learning about mitochondria.
Starting point is 00:07:52 Yeah, that's my point. Like, if, if a genius scientist goes to jail wrongfully, I would assume that they continue reading science literature and that they come up with interesting thesis around that. One simple trick that the medical industry hates. You can actually do that. That happens. And I want to, I want Elizabeth Holmes to throw down, give me your biotech 2027. Give me your AI 2027 thesis.
Starting point is 00:08:17 Let's watch it play. out, if you're right. At the very least, a market map. At the very least a market map. Show me that you understand what Roche Barber's a deal. Or a tier list. A tier list. A tier list of biotech acquisitions in the medical device space. Yeah. Show me you're a student of the industry you're operating it. Right? Yeah. Watching Nathan have that light bulb moment where they're pitching him Theranos 2.0 and them not realizing that people have been using the phrase Theranos 2.0 to describe like massive things that they perceive might be. massive fraud. Yeah, yeah. It's great. Yeah, I just also, when I got to YC in 2018, my visiting
Starting point is 00:08:55 partner was Diego Ray, co-founder of Gene Weave, who actually built and sold a real diagnostics box, a medical device, and it was basically just a lab testing machine. Previously, size of a dishwasher, add a lab down the street, you shrink it down to the size of a box, and you put it at the actual hospital, and then the hospital can test for a specific thing. They were testing for antibiotic resistant bacteria. They developed a chemistry. It's not rocket science. It is hard science, but, like, it's not magic.
Starting point is 00:09:26 It's not future sci-fi magic. And if you can get that data in an hour, as opposed to two days, everything in the hospital is just going to move a little bit smoother, and people are going to be a little bit healthier. And you're going to sell your company for $425 million, which is exactly what happened. They raised $25 million. It's a great outcome for founders, employees, Roche eventually got the product approved by FDA. So in 2019, it got authorized for the co-bos Vivo DX MRSA test, which is like not going to be on the stage at TED anytime soon.
Starting point is 00:09:57 But it should be. It's like real science and it actually moved the needle forward. That being said, I came away from the movie, right, feeling like, okay, Sunny had done some side deal and got way less. No, no, no, Sunny Balwani, the other co-founder. My impression was that he was getting way less jail time. Yeah. Elizabeth is going to jail for like 11 years. Yeah. It seemed like Sonny, they were positioning it as like they, Sonny was able to pin it on her.
Starting point is 00:10:24 Yeah. He got out. Yeah. Or at least he got a reduced sentence. Yeah, yeah, yeah, yeah. And you told me afterwards, Sonny is in prison for like 12 years or he had like a, 12 years, 11 months was a sentencing. Elizabeth got a 10-year sentence, reduced originally from 11 years and three months.
Starting point is 00:10:44 According to the internet. Sonny didn't sell secondary either. I know. That's ridiculous. So none of them, they both go down with the ship. They both don't make money. That was the jaw-dropping moment for me. I was like least shrewd person in the world potentially.
Starting point is 00:10:58 No secondary selling. 11 billion. Doing fraud purely for the love of the game. What are you doing? What are you doing? And it's not like I came away being like it wasn't a fraud. Like it was. It was very clear that like everyone there, Sunny heard, they knew it didn't work.
Starting point is 00:11:14 They knew that they didn't have the reverend. The profits. That's really like the TED entrepreneur. Yeah. It goes to prison. For the love of the game. For the love of the game. Insane.
Starting point is 00:11:23 Just, just for the vision. If you do want to sell secondary, there's one, one neat trick. One neat trick. This is a new thing. So if you're a founder and you want to sell $10 million a secondary, $100 million a secondary, you don't want it to be a negative signal. Here's what you do. Before, so you've grown your company to the point where you're valued in the billions.
Starting point is 00:11:44 you don't want to sell secondary because everyone will be like, oh, he's like selling out, she's selling out. Like, that's not good. That's not a good sign. So what you do is you take out an immense amount of debt. So you get like $100 million of debt. Yep. Then you sell the secondary, sell another $100 million of secondary, pay off the debt. And then you can tell everyone, look, I just sold secondary to pay off my debt, my personal debt.
Starting point is 00:12:10 Yeah. And everyone assumes it's like, oh, they think it's credit card. Yeah, yeah. They think it's credit card debt. They don't realize that it was a equity-backed $100 million line of credit from a major financial institution. You don't need to clarify that part, but you can still get away with $100 million out of the gate. It's possible. I wonder if anyone's doing that.
Starting point is 00:12:28 It might be happening. Who knows? Who knows? Anyway. What's semi-analysis? Raised its 2027 data center capacity forecast from 43 to... 50 gigawatts. Wow.
Starting point is 00:12:41 50 gigawatts. 50 gigawatts. That's a lot. That's a lot of compute. And people are going back and forth on this, right? Did Gersner say it was too much, something like that? It seems like semi-analysis has the data and has been pulling together a whole bunch of, a whole bunch of... The semi-analysis said...
Starting point is 00:13:00 So we looked at the data. They looked at the satellite photos. I mean, a lot of these things, like, they were papered a long time ago. Even if the market's, like, having a hiccup right now, that's not going to stop people from actually pulling out of I sent you this this morning from Revcap, which is semi-analysis saying if you're worried about demand, ARR, don't be, because there's going to be even more supply than you realize. Of course, semi-analysis is also saying that they have some of the most bullish forecasts for the labs, but it's funny that in the midst of like everyone being worried about ARR growth over the last two weeks,
Starting point is 00:13:39 that semi-analysis is coming out and saying, don't worry. there's an obscene amount of supply coming online within the next 12 months. Yeah. Yeah. I believe them on supply. That seems very cut and dry. I don't think anyone has a stronger read on what's actually getting built than them. I think if you look at the satellite photos and you look at the deals that have already been inked,
Starting point is 00:14:07 that even though, oh, the NASDAX sold off 5% last week, like, that's not enough. enough to be like, okay, pack up the dump trucks. We're not building this thing. Like maybe in months, if things continue to get bad and the rates go up, like some projects will be delayed or stalled or deals would get on round. But like right now, it's not that it's full speed ahead. It's just like it's a train. You can't slow it down that quickly. Like, it's just going to keep going. On the demand side, I feel like the agentic stuff, the personal agentic stuff is going to be high demand for compute. I'm less. I'm less. clear on what the willingness to pay will be. How many people will be willing to pay the equivalent
Starting point is 00:14:50 of $1,000 a year for inference related to like their semi-personal, prosumer life, shopping and all the little agentic features? Now, I think the tech is incredible. I've been using Dott a ton and I think having an agent that just runs in the background and just tries to go find little opportunities for you is amazing. It just catches things in my email that I never would have gone through or taking the time to do and it just sends me a little message being like, hey, like you asked for this and you should follow up because like they said that they would do it.
Starting point is 00:15:19 You used it to cancel your roadster order too, right? Yeah, yeah, yeah. So just like little things like that. It's just a better interface. Like I love, I love interacting with the open web through an LLM. It's amazing. No cookie pop-ups, no ads. It's truly like the best consumer experience.
Starting point is 00:15:37 There's a lot of controversial stuff downstream of that. But like, as it, consumer, if I'm trying to learn about something, instead of having like 25 tabs open where I have to accept cookies 25 times, make sure I'm logged into 25 different things and like scroll, find the fact, it's so much better to just have it, oh, put it all together with the exact quotes. I can click out to the link if I need to. And that's starting to happen in the personal agent space. The question is like, how do you get the money from people? Is it the ads? Is it the interchange? Like there's that sort of bearish take that even that the agentic commerce market, if you assign all the these take rates, it's like a $40 billion market or something like that. It's like not big enough to justify. No, I think what needs to happen is something closer to going from automating tasks, automating certain roles or extending the capabilities of people, right? Because we're in this era of obviously there's a viral clip going on over the last 24 hours, talking about somebody's having a 26-hour day. Because they need to stay out. She's changing and manipulating time. Because they need to.
Starting point is 00:16:41 to be online and available to keep their agents productive. Are you saying she's crazy? I'm not saying. Because she's not crazy. You're crazy. You're crazy for thinking that it takes 24 hours to complete a full day. That's right. Not 26.
Starting point is 00:16:57 But anyways, it's like the next leg up will probably be. She's a special case. She's an entrepreneur. Yeah, the question is like for the 90% of Americans that aren't in. But that's not what we're seeing. We're seeing that one, we're seeing that a very, very, very small number of companies are driving all of the adoption. And so there's probably not all the adoption, but a massive amount of it. And so there's another leg up there just
Starting point is 00:17:21 with a capabilities increase. And then what you're saying is like the other 99% of businesses, how are they going to be, how is their spending going to ramp? Will it ramp beyond the, you know, $20, $200 a month subscription? Yeah. Yeah. I mean, in the business side, like the Jensen take of like, a software engineer who makes 300K should also get 300k in tokens or something. That seems to be happening basically. It's like, yeah,
Starting point is 00:17:47 like a software engineer can deploy AI very efficiently and like at a high ROI. It is less clear for a marketer for a salesperson. It's like, okay, what should your actual token, your inference budget be? If you gave a sales rep
Starting point is 00:18:03 $50,000 a month in inference, like is there something that they could do? with the best models to actually get generate $100,000 in value that they wouldn't have otherwise. Like, like those are the economic equations that happen across the business. I'm talking more on the personal side, the consumer side. Like, people are using the LLMs. No, and I'm just saying we don't pay for all this cat.
Starting point is 00:18:26 Like the CAPEX is not going to be paid for by consumers. Yeah. Yeah. I think you're right. So you're saying that's not, that is not the leg up that needs to happen. It has to be diffusion into the enterprise and B2B. beyond what it is. It has to 10x. So, so like the, the small company that has, you know, basically everyone on a $200 a month plan and they're maybe spending $100,000 on maybe 10 mil top line,
Starting point is 00:18:53 they need to go to a million dollars in France a year, even though they're at a, even though they're a $10 million business. Maybe they go to $15 million of top line. Speaking of $1 million budgets, what we got? Brett Adcock launched Hark, which is something like a muse or an instinct or a Dots. And they gave away or tried to give away a million dollars of pizza. I believe it was on Friday. You just had to download an order from the Hark app. And I don't know that it went well.
Starting point is 00:19:32 I think the summary we have here is, an app called Hark tried to do a pizza giveaway, but it quickly turned into a PR disaster. That's the thing. Yeah, I don't know. I mean, clearly they got a ton of people to download the app. Like, I think it wasn't working. People just don't want to give them the data because it needed to be able to edit Google Drive files.
Starting point is 00:19:55 Yes. In order to get this pizza, I will need to edit your tax return. See, edit, download and permanently delete all of your contacts. See, edit, create, and delete all of your Google Sheets spreadsheet. See, edit, share, and permanent. delete all the calendars you can access read compose and send emails from your gmail account yeah so download your organization's workplace directory i don't know if all these were were required um yeah sometimes you can just not check those and still get access it's like when you download an app on the
Starting point is 00:20:21 ios app store you can just say like no thanks i don't want any notifications armand tried to get a free pizza and uh had some issues and so use the app to submit a formal complaint to the FTC. Farr, that's annoying. And I just tried again with no luck. I can file with the FTC, but a giveaway that's been flaky for a few minutes on launch night isn't something they'll act on.
Starting point is 00:20:45 I'd rather report it straight to Hark's team now with all the details so they can fix it. Want me to send that? No, file a complaint with the federal government. This submits the FTC complain about a Hark pizza promotion. On October 16, 2026, Hark publicly advertised a $1 million free pizza giveaway,
Starting point is 00:21:03 promoted on X, and state users could claim it by typing order a free pizza in the Hark app. Crazy. Yeah, interesting. I'm so curious why Brett didn't just do Hark as part of figure because the whole, like, I don't know. It doesn't make any sense to me other than you wanted a fresh cap table that could raise. Yeah, I mean, Yilan court kind of created the playbook, right?
Starting point is 00:21:33 X-A-I was a separate thing. You raise fresh funds. get, it's a way, it would be hard for SpaceX to go to top AI scientists and say, we're going to give you $5 billion of equity. Now, Zuck has kind of broken that glass and been like, I'm just going to do it. But the way you get, the way you get, you know, the multi-billion dollar outcome is you give a co-founder role of a new company and then you acquire them in. So I think it's probably that.
Starting point is 00:22:04 I don't know. Is there another? The only thing is Elon had sold a lot of cars and launched a lot of rockets prior to doing that. And so I think it's the kind of thing that makes more sense in the fullness of time. Democratic staff expect AI to do 75% of their work by 2030 and GDP growth to reach 17.1%. Now, did they specify if this is real GDP growth? Because they just said GDP growth. Because what if inflation is at like 40%.
Starting point is 00:22:36 That would be the equivalent of negative 23% real GDP growth. You've got to clarify these things if you're going to be asking the tough questions. But let's assume they went with real GDP growth. You think that's low? You think that's high? There's somewhat anthropic who said it would be 28%. I like that. The lowest was 6%.
Starting point is 00:22:56 Basically no one there thinks that GDP growth is going to be at normal. levels. Everyone is expecting a boom within the building. Agree? Disagree? Bullish. Bullish. Dringing the Kool-Aid. I don't know. Just out of the FOMC, of course, thinks GDP growth will be 2%. That's the government. Southerobic staff are obviously like the most bullish. Like they are at 17.1% GDP growth. Reminder, America grows 2%. Typically. They're saying 17, huge economic explosion, unlike anything we've ever seen in America. Absolutely fantastic. If we grow at 17%, it is so positive some. There's so much to go around. You can do everything, basically. You can build new roads. You can give people health care. Everything just solves itself because a rising
Starting point is 00:23:54 tide lifts all boats. Where would you really put it, though? I'd put a 200% GDP growth. I want to be tripling every year. Yeah. Predict what you want to happen. Manifesting. This is manifestation. I want to manifest it. Site visitors said 12.5% again,
Starting point is 00:24:12 staggeringly high. But interesting, U.S. adults predict 5.4% just broadly, which is, again, way above where we've been. So, like, everyone is bullish. The American mind must be said. Spore doesn't buy it. Spore says this is borderline mental illness.
Starting point is 00:24:30 I'm sorry, but 20% GDP growth. in 2030 is a common belief in Anthropic. What are these people smoking? How does one get so divorced for reality? They're smoking cigarettes. They're smoking cigarettes. Lung cancer will be solved. That was reported from, we talked about this a little bit,
Starting point is 00:24:46 but that was reported from Trump Sankar. And has not been widely confirmed beyond his anecdote that he shared, I believe, on Bloomberg or CNBC. But I don't think this is, I don't think this is unique to anthropic. Yeah. I think, like, clearly the average American is already insanely well. Exactly. You're looking.
Starting point is 00:25:06 And so if you go to the labs, anybody who, like, really truly believes in this current revolution, and that probably is, like, an average across the field. There was a funny, there was a funny exchange in the Tyler Cowan Dorcasch Patel interview on interesting times. He was guest hosting for the now departed, not past. away, but he'll rust out at laugh for, I think, CBS and the free press or something like that. But Tyler Cowen and Dworkesh Patel were going back and forth about AI. And Tyler asks Dworkesh, like, when do you think I'll walk into a Walmart and see a product
Starting point is 00:25:46 that is the product of artificial intelligence? And Dwork Hesh is like, oh, it's really hard to say. Like, I think that there will be a real effect on the economy soon. 2028. I'm very bullish on this changing the economy. but I just, I can't predict how it'll be. And I was like, there's already AI slop breech towels in Walmart. Like, you can go into Walmart and get AI products now.
Starting point is 00:26:09 Like, there's so many, like, pool floaty that looks like a tank that was sold on TikTok via, like, you know, AI video slop. We have signs. We have signs of signs. Yes, we have signs of signs. Like, like, the AI slop economy is thriving right now. But the AI slop is being sold. And, you know, a lot of people will.
Starting point is 00:26:28 say, oh, the San Francisco tech people, they need to touch grass. I think if they want to get in touch, they need to touch the gas pedal of a Lamborghini Kuntosh or Lamborghini Hurricon in Miami. You got to get into the mind of the core seller, the drop shipper to understand how AI is changing the real economy because that crew is selling AI slop. It's happening. Like, there is definitely AI, AI instantiated products up and down the stack all over Facebook, Instagram Reels. TikTok. This stuff's flying off the show. And Sweeney, founder of Epic Games, says the games we've long wanted,
Starting point is 00:27:05 which didn't exist because they'd cost several times more to make than they'd turn back will soon become possible. As will the game's developers wanted to build, but couldn't with the resources available. It'll be a new golden age of gaming. Yeah, I like that he is taking the white pill on AI. Three Blue and Brown also put out a big, he's a math YouTuber,
Starting point is 00:27:26 does these incredible video, These motion graphic explainers of difficult math concepts. And he put out a video saying, like, it is the best time to go into math, very, very optimistic about it. And so, obviously, very divided organizations. But I love that Tim Sweeney went back and forth. And I saw another post by him talking about, like, look, I had to migrate from C to C++, from 2D to 3D. Like, I've been through so many tech migrations. This is another one. I'm very excited for it.
Starting point is 00:28:00 And he'll just adapt. He'll improvise, adapt, adapt, overcome. If people are rolling their own, you know, Fortnite clone in a web browser, decompiled or whatever, I'm sure he's going to find a way to participate in the upside in some way because he is innovative and flexible. What about this poppy deal? Have you seen this?
Starting point is 00:28:23 Yeah, I mean, it's really quite funny because everyone's trying to use it as an opportunity to try to dunk. when it's like they sold their company for $1.9 billion. Yeah. And. So wait. Let me set the table. So Poppy is a beverage brand.
Starting point is 00:28:39 It's a soda, probiotic soda company. Sold a Pepsi for $2.2 billion. $300 million of that $2.2 billion was an earn out. So they got $1.9 billion on the day the deal closed. and then 300 million waiting for milestones. Now, Pepsi announced that instead of paying 300 million, based on the performance of the brand, they will only be paying 12 million.
Starting point is 00:29:06 And the dunk is like, oh, that stings. They didn't get their earn out. But yeah, they got $1.9.12 billion dollars. It's still an incredible amount of money. And people are like, yeah, like, here's how you negotiate an earn out. It's like, it seems like they already negotiated it. Like, they negotiated it really well. The disaster would have been if the numbers were reversed.
Starting point is 00:29:28 300 million for the company and 1.9 in earn out. And if they didn't get that earn out, it would be, it would seriously change the economics. But it seems like they got 90% of the deal value. Still pretty good outcome for the founders of Poppy. Amazing outcome. But yeah, Sean Frank chimes in and says, a quarter is what you should expect in an earn out most of the time, right off that second bit, that second bite to zero.
Starting point is 00:29:55 You shouldn't go into one of these deals expecting to get the full earnout because companies have, you know, lots of resources. They control the budget, the distribution, all the success or failure. You're no longer in charge. You're no longer the master of your own destiny. And so if you put all the chips with them, they might bet them differently than you would expect to. Thank you for tuning into TVPN. You can close out the show with us. Hit the gong again.
Starting point is 00:30:20 One more time before we. Hit the gong again. One more time to close out. Sign up for our newsletter. TPP.com. We love you guys. Goodbye. See you tomorrow.

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