TBPN Live - Ferrari EV, Enhanced Games, Alcohol & Podcasting | Christopher Hale, Sean Henry, Eric Ries, Alex Atallah

Episode Date: May 26, 2026

(00:27) - Ferrari EV (40:58) - Enhanced Games (47:41) - Christopher Hale, a Catholic writer and former executive director of Catholics in Alliance for the Common Good, discusses Pope Leo XIV's recent encyclical on artificial intelligence, highlighting the Pope's emphasis on maintaining human dignity and responsibility in technological advancements. He notes the Pope's concern over delegating human decisions to machines, especially in contexts like warfare, and underscores the call for Silicon Valley to consider the ethical implications of AI development. (01:10:48) - Alcohol & Podcasting (01:17:21) - Sean Henry, co-founder and CEO of Stord, announced the company's recent $250 million funding round, elevating its valuation to $3 billion. He discussed Stord's decade-long development of a vertically integrated platform that leverages robotics and AI to enhance commerce, enabling faster deliveries and cost efficiencies. Henry also highlighted the launch of Stord Labs, dedicated to testing next-generation robotics and AI, and the company's international expansion into markets like Canada, Europe, China, and Australia. (01:31:05) - Eric Ries is an entrepreneur and author best known for The Lean Startup, which helped popularize iterative product development and rapid experimentation in startups. He is also the author of The Startup Way and Incorruptible, where he explores institutional trust, governance, and how organizations can remain resilient and accountable at scale. (02:09:45) - Alex Atallah, co-founder and CEO of OpenRouter, discusses the evolution of AI models and the importance of neurodiversity in AI agents selecting cost-effective tools for specific tasks. He highlights OpenRouter's recent $113 million funding round, led by Capital G with participation from existing investors and strategic partners like Nvidia, ServiceNow, and Databricks, emphasizing the company's commitment to fostering a diverse team. Atallah also addresses the trend of companies optimizing AI inference costs by utilizing multiple models tailored to specific tasks, leading to significant cost savings and improved performance. (02:22:45) - 𝕏 Timeline Reactions 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

We're watching TBPN. Today's Tuesday, May 26, 2026. We are live from TBPN Ultron, the Temple of Technology, Fortress of Finance, the capital of capital. We're back. We're back. A lot of complaining around the office this morning. Oh, yeah? Team was upset. They said two days is the perfect length for a weekend. Three is just too many. Too many. It's too crazy. And so we're glad to be back. And Ferrari's back with a new electric car. Are they? Are they back? That's what we're going to debate.

They're certainly, they launched it. Ferrari launches a $640,000, Johnny I've designed, glass-clad electric speedster. They're calling it the electric speedster. I was not, I, I, it's for door. And that is the journals word. It holds five seats.

I wouldn't, when I think speedster, I think smaller. I think two seats. I wouldn't. I think Porsche speedster. It is quick. It is speedy. Well, have they actually released

numbers on how quick it is. I know that they mentioned that it is a thousand horsepower. We would assume that it's quick, but who knows? We don't have a Nureberg ring time. We don't necessarily have a zero to 60 time. We will see. But we do have some good coverage from the Wall Street Journal. There is a zero to 60. What is it? I think they released it. It is more performant than I believe the Model 3. I will confirm. Model 3 or the model S plaid? Oh, that's a good question, Because the model three is not like base model three. Zero to 60 in less than 2.5 seconds. Okay, that's not as fast as a plaid.

That's, yeah, that's sort of surprisingly low or surprisingly high. Anyway, named after the Italian word for light, the loose will test, or is it Lucche? Luce will test the appetite of the super rich as EVs have fallen out of favor in the United States. It'll be interesting to know where, when did this start? because there has been a big shift, and it happened somewhat quickly. It feels like it's been, like the shift away from EVs happened over a year or two. But the design timelines for a project like this might be five years, might be even longer. So let's sit at the table with the Wall Street Journal article, and then we can go into your take,

just so we have a little bit of context here. An electric vehicle big on glass, light and space. This isn't your father's Ferrari on Sunday. Europe's most valuable automaker took the wraps off. For now. Yeah, Ferrari has been a, it's a big company. It's been a successful. The market cap's been huge.

Like it's grown a bunch. The acquired team did a great podcast explaining the whole history of the company. Stock is down 5% today. 5% today. But it's still, what is it? It's a $62 billion. That's not bad for, for, I mean, I feel like a lot of other car companies are sort of beaten up and much smaller based on their volumes.

They're only down 30% over the last year. Okay. Okay. Does that make an AI winner? Who knows? So, named after the Italian word for light, the Ferrari luce will test the appetite of the super rich for EVs when electric vehicles have fallen out of favor in the U.S., the world's top market for luxury cars, designed in partnership with celebrated Apple alumnus, Johnny Ive. The model also represents a leap into a new technology built for a brand built over decades around the size, sound, and sensation of traditional engines, the luce, will be among the most expensive Ferraris that aren't. a part of a limited production run.

So it's an unlimited production run they will be making as many as there are demand for. They'll make a bunch. People will hopefully come and buy them. If they do, they'll make more. Production might end up being limited depending on demand. I think you can see where Jordy's take is going. But the interesting thing here is that Ferrari typically has sort of two tiers, limited production runs. that's the F40, the F50, the F80, the La Ferrari, the Enzo Ferrari, these Halo cars, these hypercar super cars.

SF90XX. SF90 was interesting because it was at one level above the sort of a base model, mid-engine sports car that they've made in the lineage of the 360, 430, 458, 488, and then 296, which is unlimited production. but at the lower end, lower end is still $300,000, but it's at the lower end of the traditional mid-engine sports car, tossable, not fully track focus, but it's a sports car. And then the SF90 came in as sort of like this mid-tier, higher end, more expensive, twice the price of the 296, but unlimited production run.

So by getting one, you weren't locking yourself into a very tight allocation, and that, of course, led to some serious depreciation in the SF-9. market, which has been sort of heralded as a crisis for Ferrari. And this doesn't seem like a response to that. This seems like a continuation of that, potentially. But anyway, the company's starting price will be 550,000 euros, roughly equivalent to $640,000. That's more, that's a lot of money.

That's more than the SF90, that's more than the Dolce-H-Lindry, more than the 296. More than the new Testerosa. More than the new Testerosa. And also more than the Pura Sengue, which is V12, natural aspirated. And also, but the Pira Sengue only has four seats. This has five. So you're getting an extra seat for just an extra $200,000. Under $200,000.

It's a wild value prop. The launch event stadium took place in Rome in a stadium with a towering concrete sale that was opened for the Vatican's 2, 2025 Jubilee, featured tortellini by Italian chef Massimo Bout. Baruto, Botura. Clips of Formula One stars Lewis Hamilton and Charles LeClair, racing the car and lots of lights. Ooh, I want to see what this car actually looks like on the track. I haven't seen a video of that yet. The unveiling sparked a debate among car fans online with many pilloring the design as too far outside of Ferrari's design traditions. Ferrari's Milan-listed shares slumped around 6%. Ferrari has framed the shift as a chance to experiment.

We wanted to do what we hadn't been able to do before, said Ferrari. chairman John Elkin. Let's see. The luchet is Ferrari's first ever Ferrari with five seats, an option ruled out by the axle in his traditional power train configuration. So if you have a family of five, this is your only option. Despite the roominess, the EV accelerates from zero to 60 in less than two and five seconds. And if you have a family of six, you could pick up two of these for just over $1.2 million. Yes. And you'd still have some room for friends. husband and wife, his and hers. Yes.

His and hers, luches. Yeah, wild, wild prop. Also, yeah, I mean, top speeds, 190. Top speed in the plat is 200. And top speed in many, you know, Cadillax E D5V blackwigs, maybe more than 200. Yeah, so I did confirm, by the way, that it is half a second slower than the Model S plat.

Yeah. Which is a lot. I mean, yeah, it's, it's, at that point, maybe you don't really recognize it, Maybe you can't really tell. Straight line speed comes a muscle car. The range is worse than pretty much everything BYD makes, pretty much everything that Tesla makes and a lot of these other manufacturers.

But they could always argue, no, but the performance. And I don't think for this kind of car buyer performance matters. What is performance? Is it acceleration, straight line speed, how it handles in corners, right? this car is not going to be track weapon. I don't think. But we have some. But we have some friends that might help with that.

They take it out. See, you put a wig on this thing. Anything possible. To me. So yeah, the range is what you were getting at. 330 miles, despite an unusually large battery. The latest releases from BMW and Volvo run for more than 500 miles. The lucid air, sapphire is over 500.

And many Teslas can get up into the 400-something range. 330, totally usable for most. people, especially if you're charging it home, totally fine if this is a daily and you, you know, want to drive this around. But it is, it is sort of in search of a, like, how does it fit into someone's life? Yeah. Because, again, it's not designed for the track. It's not designed for the straight line speed. I overall, I think it looks pretty cool. It looks unique. Yeah. I don't, I don't see it and immediately want it. Like, there's been plenty of other modern Ferraris that I think look amazing. even many of them have gotten quite negative reactions. So overall, I think the design is interesting. I think the interior is obviously cool. We talked about that. I was somewhat worried that the interior would maybe not match the exterior.

I don't like the two-tone thing, but again, that's just sort of like a modern Ferrari thing. Like I think it will look really cool if it's entirely black, right? Murdered out. A lot of people were saying that. will look quite cool. But yeah, the main thing is like that this entire, that angle looks great, by the way. But not $650,000 is great.

It's certainly the most confusing release from a major automotive manufacturer that I can ever remember, right? Who is this? Who is this for? Like coming out and it costs significantly, like right away, I'm like, am I, am I crazy? This is like costs more than the Purisangue, 12-cylindry, the Testerosa, all these other cars that didn't get amazing reactions, but I think are like very, very cool.

Yeah, yeah. Seeing them in person, they look amazing. Yeah. I think they're fantastic. Yeah. What a confusing, what a confusing gap between like seeing images and videos and pictures of cars and then actually seeing them in person. Yeah. Like oftentimes when you see something in person.

person, you're standing there and you have the sense of perspective, they can look a lot better. Sometimes they're going to look worse. One of the other, one of the other challenges is, you know, modern Ferraris have had outside of their halo cars, have had, you know, pretty massive depreciation. And what have EVs become synonymous with? Depreciation. So this car, like the Per Sangway, I don't really know how it's going to hold up. It is naturally aspirated V12.

It's probably going to hold up. decently. You're still going to be able to buy it. Yeah, you're still going to be able to buy it. Unlimited. You're still going to be able to buy one for probably $350,000 like in the next couple years. But this, I can imagine just getting cut, getting cut in half, like quite, quite quickly. I expected it to come in, you know, not a very informed view, but I expected them to come in at maybe something in like the $300,000 range. Right? Something that is, would be a very expensive daily, but something that somebody could compare, oh, should I get, yeah, should I get a Roma? Should I get, you know, a Tycon TurboS if you want an EV? Oh, should I stretch a little bit and get a Lucche? Yeah.

And, and again, I just don't know, I just don't know who this car is, is for. I hope that there's enough Johnny I've fans to make this sell. The sense I get is like, I don't think Ferrari would have started this project and said, you know, we've always wanted to make a $650,000 daily EV. That's been the car. That's been the car. And it seems like they started this project. And they're like, let's make an entry level.

The closest thing Ferrari has to a mass market car, a car that you can daily, a car that is unique, really thought through from the beginning, right? This idea of combining EV with a Johnny interior is like a cool concept. And then you could imagine they start and they're like, oh, we're going to be able to hit 350 for sure. Or we're going to be able to hit 300 for sure.

Okay, maybe it would be more like 350, but like still we're in the range. And then it just starts like ticking up. and up and up and up until how do you, how do you, how do you just, how do you justify the price? It makes no sense. And it's very, it's very, it's just very, uh, I saw when you're laughing. Hunter, Hunter, be kind. It's a very, it's very concerning because I just think it's basically proving that Ferrari,

I don't think can ever, I don't think they'll ever be competitive. in EVs. This segment? Yeah, this segment. I think it's, I think it's completely over. It feels really hard to compete in. You're going up against Tesla.

This vertically integrated, like, comes with, like, if you want a daily, you also want self-driving capabilities. You also want the, oh,

park it, auto summon, like, you know, you want to be able, like, all these, like,

random features that Tesla puts in, like take your car, play the games, like, very functional. And the thing with the Luce is the design. It's so cheap.

There's so many elements of the design that are super tactile. very cool. Yeah. It's quirky. But Tesla has done a very good job of making a car that is very drivable. And it can be quirky if you want it to be. And it can, yeah, it has a sound effect.

The sound effect board. It has a sound board. Like, if you want the quirk, you can get the quirk. So, yeah. So I think it's, I think it's over. I think it's over. Take me through your take from start to finish. And then we can.

We've covered a lot of. I basically said, like, look, the peanut gallery is already very negative on all Ferrari launches. Which is sometimes bullish. Every single time they say bring back Pinn-inferina. Pin-inferina is not coming back. Yeah. Like the whole company got sold to an Indian automotive conglomerate. Tata.

Tata-Modos. They launched the Pinn-in-Ferina-Batista. So if you pull up the Pinn-in-Ferina-Batista, if you pull up a picture of that, you will see an image of an electric hypercar that looks exactly like you. would expect in the sense that it's the car that would go on a poster, on a kid's bedroom. But it's a million dollars or more, and it goes zero to 60 in two seconds. And the reviews are kind of like, yeah, this is the max. Yeah, the pin and farina Batista right there. Like, that looks like a McLaren, like a Ferrari. Like, it looks like, it looks like if you went to chat GPT and just said, like, make me a hypercar. And I think it checks the box. And I think the luce

does not. I think if you went to chat GPT and said, to design me a hypercar, it looks like, it looks like, hypercar. You could sit there for days and not get something that looks like the blue shape because it does look different. And that can be good. It can also be bad because people are expecting this. But this car, I don't think sold very well because the buyer for this design wants a naturally aspirated V12 with a manual shifter, right? And they want something that's more focused and more of an experience. They don't want something that's practical at all. Yeah. So anyways, people are always negative on

recent Ferrari launches. I usually don't agree. I think a bunch of them have been great. But the anger towards the design, I think, is totally misplaced. You've got to be disappointed in the price. The gap between

what you can get from a range and performance from Tesla or BYD, let's say in the $50, $60,000 range, you're looking at a 10x difference, right? and that gap is just way too wide. So I think if they had been able to come in

in the low 300s with this, it would have been super desirable, quite functional, right? This is a great, great commuter. We would have been seeing these all over L.A. I think this is going to flop. And I actually think that if Ferrari wants to be competitive in this sort of like mass market EV category,

even like luxury, you know, luxury, not necessarily true mass market, but more high end. I think they would have to at this point partner with like, you could imagine them partnering with someone else and effectively just saying like, you know, throwing in the towel. I think they still have a fantastic business focusing on the higher end of their range. Think of what a high-end driver-focused sedan, four-door, five-seater sedan is. Because typically the, when you get to five-seats, four-doors, up-market, expensive luxury, you just go SUV. So you have like Range Rover and Euras from Lamborghini and, you know, Aston Martin is pushing you that way. Like it feels like this is a very, like the four-door, expensive four-door.

is rare. Yeah, and I think, it's very differentiating. The Perisangue, personally, I would have liked to see something that was, like, sportier, right? Than that?

Yeah, it's very, it's supposed to be. Yeah, but, but it's a, for, an SUV from Ferrari, something a little bit more aggressive, personally, I would have liked,

it came off very key, take out the second row, take out the two seats. No, no, you can make a sporty, a Kiant Turbo GT. It's a sporty, it's a sporty,

it's a sporty, fast SUV. I just be like, With the perisangway, it's like the, like the 296 is right here, sir, if you have any complaints about it being an SUV. Like, they do have a, they do have a sports car for you if you want that. The question is just like, if you want, if you want performance, you go sports car. I'm just saying like, I'm just saying, I think they, they, they, uh, they kind of missed on both, right? Yeah.

I think if they made like a super weird. If they made like an aggressive, if they made the per sangway, but it was like more aggressive, I think it would be. way more desirable. Are you talking about the stock, Perosangue? Are you talking about the Puganator? The Mansori modified Puganator. The Puganator? No, I think that's called.

Mansori has a body kit for the Puro Sangue that's called the Puganaguer, which is such a funny name. Yeah, so anyways, big, big, big L. And I think that that will become very obvious in, you know, the coming years. They are going to sell some. I expect Cupertino to be crawling with with Luches. And I was seeing like, I was like, who is, when I thought about who is a buyer for this, it's like foreign exchange student in the U.S. that needs a car for like a few years. Instead of like a black badge calling in. Exactly. Exactly. And, but that's not a big market.

Yeah. It's just hard. Because I understand the, Like the concept of like the, the, when I imagine like the, the colonin, like driving on the sand dunes in Saudi Arabia, it just has such a different vibe. It's so much more regal and royal than this design. This design is so much more friendly. We can actually go and look at. The fact that you can, it's like, hey, luxury car buyer, would you like a Rolls-Royce Cullinan or a Ferrari luchy, Luchy. Yeah. Which is a just extremely millennial-coded car.

I mean, it has a lot of the Apple feel to it. A lot of people were making it. I had a theory earlier that maybe, maybe the real cost, maybe it's like a $50,000 car. Yeah. But making a custom iPad and you're only going to make a very small number of them. You're only going to make like. It's a $500,000 interior.

No, it's a $600,000 iPad. Okay. You know, the, in the front console. Yeah. So it's basically like a Model 3 and then a $600,000 iPad combined, right? Because I don't think they're going to be making a lot of these. I really wonder how they're going to drive. You want a safari version, right?

That's the ideal? I do. I do. Sam Schaeffer was sharing the... Like what does it look like if it's all black? And yeah, I went in there. I was like make it, make it a safari version, get some bigger wheels on it. Expand the wheel wells.

Fan the wheel well. Easy ask. Basically do another 300 grand of work to make it a million dollar, Luce. Add some equipment. You know what this looks like? This looks like that. Pull this up, this image. What was the Lamborghini electric one that they were working on?

The Lanzador. It was like a big car. This was like a theme for a while. I don't think it ever went anywhere. I don't know if you saw the Lanzador. I can share it in the thing. There it is. So this is the-

This looks cool. Again, having a car that's designed to go off-road that only has a few hundred miles in range. It's kind of a crazy move. It's kind of a crazy move, but I could see this being- People take the Rivians off-road, and they're very good. Yeah. Because you can, I mean, this car has four electric motors, one in each wheel.

Yeah, the Rivian at the- And so you can adjust the torque independently. So if you're losing great, grip on one rock in particular. Yeah, Arrivian at the fat ice race, big sky, was going absolutely crazy. Really? Yeah. It was extremely impressive.

Yeah, it's designed for that. Pull up the Lamborghini Lanzador. This was the, for Lamborghini's electric concept that I think got scrapped, but might still arrive in 2028. I just shared this image in the production chat because it has this idea of like the big car. It's like, have you seen this? What? What you like that?

2.6 says, that looks sick. Oh, wait, it's an EV. People don't like electric vehicles. I mean, great for daily commutes. Great for, you know, high gas prices. This lands door, you saw this? Which they discontinued because they realized it was going to flop. Yeah.

But it sounds like Ferrari is fully moving forward with this. They're going with it. Yeah, I mean, all the EU manufacturers are... This is a very high up car. Like you're very high up. They're caught between a rock and an and a EV, right? They there's basically, I was, I was trying to, I was asking chat about the, about like the, you know, regulatory situation.

And basically the EU regulates average CO2 emissions across each manufacturer's new cars registered in the EU. So it's not like model by model. like based on all the cars you're selling in a given you the new cars you're selling you need to be under certain emission standards across the entire fleet so if you sell a handful of EVs you can bring down the average a lot okay uh and so so yeah maybe they only sell a couple thousand of these but it's enough but yeah it seems seems seems seems tough uh we texted one of our buddies who has maybe 30 or so Ferraris this morning.

And he will be buying one. He made a good point. He made a good point. Anything that's hated at launch has the opportunity. Like the expectations are low, has the opportunity to become like a cult classic at some point. There's a lot of cars that launch and people are like, this is what happened with the Career GT.

It doesn't look any different. It doesn't look as extreme. It doesn't stand out if you're stopped next to a 9-11. Most people will just think it's in 9-11. So you think, in 10 years, we could be looking at Luce is going for 2, 3 million? Probably not. But who knows? Maybe 20 years.

I don't know. It might be like an interesting relic of a particular era. Pull up this post from Rhett. Yes. I like this version. Clear plastic, leaning into the vibes of that. Just lean into the plastic. Yeah.

There's something here. People were having fun. I mean, it's a golden age of Gen. images. Someone else was comparing it to the... Luca, former chairman of Ferrari, which Trey mentioned in the chat earlier in Italian. He says,

if I say what I really think, I'd be doing Ferrari harm. You risk destroying a legend. I'm very sorry. I just hope they at least take the prancing horse off that car. Wow.

What should we do? This for sure is one car the Chinese at least won't copy off us. Wow. Those are very, very harsh words. He, of course, worked under Enzo. Whatever, whatever journalist went out and hunted down Luca, the former chairman of Ferrari, like really knew that there was like a scoop to get here.

Because this is not a seated interview. This is not planned. This is an ambush. And he was struggling to not completely blow things up. And yet the body language of him, like, touching his head. He's not. TJ. Okay, former F40 360 owner.

It's driven most modern Ferraris. So he feels, he's very qualified to chime in. He says, apparently an unpopular opinion, but I think this is great. Interior, fully, Johnny, exterior, totally mark. See the Ford concept, which we can pull up. I imagine for the OCD types, the daily interactions are going to be quite satisfying.

Yeah. Yeah, that is the, it is an extremely unique interior. and things are experiences. This could be something you get to experience all day long. I'm excited to drive one. I won't be buying one. I won't be withholding judgment. I won't be judging a book by its cover.

Yeah, TJ says my opinion is in 10 years time. The Johnny Ed Ferrari design will be the main business at a price point of 150 to 250K equivalent and slowly washes out Ferrari as we know it. launching at today's price point preserves the dying core biz while they transition to an Apple style business. I would, TJ knows a lot more about cars than I would, I would take, but I would take the exact opposite. I would take the exact opposite. I think this is going to be more and more like an ultra luxury brand, small number of cars at very, very high prices. Yeah. For hardcore enthusiasts. Yeah. SB 3D tone, F80. Yeah, just getting back to.

what like the next siphon should be limited and manual and natural they're already coming back they're making they're making a version of the 296 without the EV component tree sure so so yeah I would take the exact opposite side of

this unless Apple or sorry unless Ferrari you know does you know does something like effectively a licensing deal and says hey we can't make a car for this cheap but we can license the bad And YD can make a car for 50 grand.

And then we'll charge 50 grand a car to put the prancing horse on it. Yeah, I mean, and that would be full capitulation, but could make. So Waymo is sourcing the power train and battery from Chinese EV manufacturers, but none of the telemetry telecommunication systems, IT systems, that's all Waymo. And so you get all of the benefits of the Chinese industrial support. You get efficiencies around batteries and cheaper frames and power trains and drive trains and the batteries, but you don't have the oh like the Waymo spying on me because the cameras were made there necessarily or like the whole car was made there and so I think Waymo's been very quiet about this obviously they're not really like openly talking about this decision, but I think that they that they picked a very clear line in the sand with where

with what parts of the Chinese supply chain they would go into. Because the whole like Waymos or Chinese cars would be like a bad headline. But if they can say, well, we're just buying things there that don't, they can't have any spyware in there because it's just a bunch of aluminum and battery packs or whatever. I think that will, at least I think that's their strategy. Yeah. People, people will still be suspicious, of course. But by and large, I think people will be happy.

We should pull up the Ford 021C concept. designed by Mark Newsom who works with Johnny Ive and did the exterior of the Ferrari luce because this car is so cool I think we were all looking at this and really enjoying this it's the Ford 021 C concept car as T.J. pointed out Mark wanted to create a car that was simple likeable and fun built at a historic carozeira Guilla in Turin, Italy, Mark developed a car via drawings followed by computer models and finally created a clay model to perfect complex surfaces to perfect complex surfaces Every component of the car was designed and fabricated from scratch from workshops all over the world the tires were custom made by Pirelli in in Italy

For example the composite exterior featured seamless shapes and deceptively simple surfaces including a wrap-around retractable trunk that opens like a drawer and a door hand-hand and door handles that are simple aluminum buttons surrounded by translucent plastic rings which illuminate when remote locking is activated. The doors themselves open to expose a completely open, pillarless interior. The windows were designed to allow as much light as possible to enter. This was done in 1999.

Chad absolutely hates this car. They hate the clown car. I think this would be a fun weekender. Yes, but this is, this should fit into like the Volkswagen ID Buzz lineup, which at 60,000, at 70,000 was deemed like woefully overpriced and should have been more at like 30 or 40. And so a design like this could be amazing, but again, prices everything here. Because for something like this, it can be this like delightful utility, this fun thing. Similar to the original Volkswagen bug.

I would instantly pick up the Ferrari luce for 20 grand. Many people would. Sheal asked Chad to make a four-door electric Ferrari. It's pretty good at this. I bet this version would be popular than Johnny's. This thing looks mean. It looks like a Dolcey Chirlandi a little bit. Yeah, mixed with...

Also, it's just, it's so clear that it's not electric. Like, why would it have this big, long front hood? Because it looks good, John. And it looks good because this is what we're used to, but this looks like a 200-0. car. Like as a daily, this seems like it would be wildly impractical in terms of parking and dealing with everything. It looks perfect. And also, it feels like it has a lot of down. The new images model is so good at making cars. You almost think that Sam was pretty involved

there. Potentially. Are you talking about Nikita Beers car? I mean, this thing looks fantastic. Phone has got to make this. He... They need a production version. I think what do they call it? What do they own call it, the Nikita Borgata? Borgata. I mean, I mean. It looks sort of like a Nissan Marano cross cabriela.

This looks absolutely. The big nose in the front is very, very funny. Incredible. Yeah, if it was the Apple car and price for scale, this thing would go triple platinum in all white with the Apple logo on there. This does feel like a little bit of, A lot of Apple leaked in this thing. Bobby Goodlate says, my theory on the luce,

this is the car Johnny wanted to design for Apple. Apple didn't want to ship it, so he made it for Ferrari. This car with an Apple logo priced at $100,000 would sell extremely well. I wonder, I wonder if you can get to a place where the fit and finish and the OCD, that's the daily interactions. That's the piece that I'm not super clear on willingness to pay for that because with a phone you're using it just as much as a car but I don't know there's something about like iteratively onboarding to the the little features in the iPhone that

create this lock-in whereas people go and they test drive a car and maybe the maybe like the window switches are in the wrong space and it's slightly annoying but they don't figure that out until much later you know or like the the the the the the the the the the the the volume knob is in a slightly wrong place. It takes a long time to, like, become frustrated with that. It would be hard, it's a harder pitch to make to a new car buyer. Like, oh, this won't have any frustrations. There's minor frustrations that you experience in other cars.

Like, that won't be a thing here. Yeah, I do, I don't know. I do find that a lot of my frustration with modern cars comes from the software hardware integration, right? And this dynamic that we have now where the manufacturer has their software, stack and then they also have car play and they're constantly basically competing and it makes absolutely no sense like I'm in car play like car I just bought like a week ago I'll be in car play and then I'm like oh I want to change like the the heating or air conditioning I got to get out of

car play to go and do it in like their software it's very very annoying and so yeah Apple Apple would make a a fantastic car but even I just don't know with Apple, part of it was like, no one's been able to make a great, like a truly great car business. Hmm. Like Tesla, but yeah. But it's not a good, it's not a good business. The car business is not a good business.

Yeah, it's made $20 billion in free cash flow over the history of the company. Something like that. Yeah. For as a, you know, 20 years. Yeah. Over a trillion dollar company. Yeah. So ship a lot of cars, though.

It is the number one. The model wise, the number one. number one best-selling car in like California, China, everywhere, basically. Yeah, that's what I'm saying. So like insane product market fit, global hit. Yeah. And it's still like not a, not objectively a great business. Crazy, crazy, crazy.

And that just feels like entirely new DNA for Ferrari to spin up. It's like hand-built. That's the whole concept. And, you know, Tesla to get to where they have on price point and distribution and scale. like completely different Jack Butcher made a great point He said make the Lucha 30% wider

And everybody would love it Where's this? You can see it on the screen here It has such better road presence When it is wider It just looks when it's too boxy Sure And it looks just a little dinky

But it looks a bit more aggressive It does seem like Everyone Everyone is just asking for something that it's not trying to be. Like, you make it wider, okay, it's less drivable. It doesn't fit in garages as easily. You make it longer, like the proportions look cooler,

but it's not, like, it's not going to be as easy to fit into parking spaces and stuff. The whole point of a vehicle like this is to be, like, accessible and usable. And that's very antithetical to the Ferrari ethos, but maybe that wasn't the goal. One car that was getting a lot of love was this special,

edition that was teased online. You can pull us up. This is the natural ice edition. I thought, I thought this looked fantastic if the team can pull it up here for everyone to see. Yeah, with a wrap, I think people might be, people might be wrapping these for sure. Color matching the wheels to the gloss and the shine of the can, I think is really, really nice. and I could see this being a hit on at least college campuses. Yeah, for sure. Imagine having this be your college car and wrapping it. Well, the wrap is usually paid for by the brand.

So the brand will be like, oh, we want a campus ambassador. I know, but I was hoping that Ferrari would just take the leap and actually do a full-on partnership special edition, right? Yep, yep. Well, Chad didn't like the Ford 021C. example, the concept car in the orange, which we can pull up. But I want to know if chat likes it more, if it has a body kit. Let's pull up the Ford 021C right after the...

There we go. Does that do anything for you? There we go. If you turn it into a track weapon, are you getting somewhere? Look at the arrow. The arrow is so aggressive. But show the original photo, the first one. Yeah, there we go.

You're going to take that, some slight modifications, and boom. Take it. Take it away. Go back to John's version. There we go. Yeah. We should look at the solo cup inspired. Oh, yeah.

So John was having went really, really deep on designing some new cars with the Chatsby-T. I think I got a future here. I think I got a future. Look at this. They call this the red time, the red line, good time, sharp lines. The red line. Inspired by the icon. simple universal solo cup driving a solo cup inspired this is really the perfect

Memorial Day weekend car but this is what I'm talking about we're like if you saw a company come out with this I think the reviews like take away the the the joke of like the beer pong thing like just the proportions of this particular hypercar everyone would be like oh that looks like a supercar that looks cool but it looks like generically cool it like if it can be if it can be just like one shot by an image model, it's probably not going to stand the test of time. I don't know. It's not taking any risk.

Like this feels like as hilarious as the solo cup inspiration is. It's not taking any risk. When you were writing that. The main, the two things. Like, again, my criticism was never the design, although the design is not for me. The criticism comes down to the price point and then positioning it as like an everyday car. And then the concern that I have because for our, Ferrari have always had electronic issues that have plagued the brand forever.

My personal experience, I had a Ferrari for a while, and I replaced the main battery like three times in three months trying to solve an issue, and eventually basically was like, okay, this is always going to have electrical issues. Do you think all the parts of the inside are glued in, like that iPhone? You replace the whole car. I mean, people will be doing that with Tesla's. They'll just be dumping them and getting new ones. I really liked your version of the Nissan Marano cross cabriolet.

Yes. Turning to get into a proper hypercar. If we can pull this up, I mean, this thing just looks really. Nissan hasn't introduced a hypercar in a while. Could be this. Could be this. The Nissan Marano calls. The spider.

It's crazy. It does look good. That was the thing is that I was like, oh, let's start with a joke and then get to something that looks ridiculous and still has some of that joke jokiness to it. But the final result just looks like a normal hypercar. It just looks like any other hypercar. Anyway. Anyways, we should talk about enhance games. Yes.

So I went over to David Senator's house on Saturday. with my friend Ben. And we were all excited to watch. And we basically turned it on. And pretty much 15 minutes in, I texted John and said, I thought the stock would nuke on Tuesday. Yeah. And it did.

It's down, let's see. From my perspective, I saw chatter about the enhanced games on the timeline. it seemed like everything was going normal. I saw some viral clips. I saw some posts about it. I didn't notice anything out of the usual, but you said that it did not, like, blow you away, and I wanted to understand what about it was not a great...

Like, you come away paying for UFC paper review or watching it on Paramount Plus now, very satisfied. Like, why was this any different? From my perspective, this looks just like any other sport on TV. It looks like something. You watch and sports and yay, you root for somebody and you pick a team. Yeah. So first of all, you know, this company went public before they had ever hosted an event, right?

So, and we've been hearing about it for years. I said to you this morning, it feels like we've been hearing about this for like eight years. You said it's more like maybe two years or something that it's even being talked about. Yeah, yeah. But anyways, a lot of anticipation. People have been super excited about this. The entire concept, I think is just like really cool and wild, right? You take something that like the Olympics, which, you know, even if you're not obsessed with swimming or weight or weightlifting or running or any of these things, like the Olympics are always like, you know, an exciting cultural moment.

And I think like I personally, you know, have a bunch of, you know, fond memories watching the Olympics, right? So take something that I generally think is very cool and you add, you know, steroids. That's a very fun idea. Yeah, it should be jet fuel. Jet fuel. Should enhance the experience. And then as soon as I started watching, there's a bunch of stuff I would give them a pass on, right? Like the production value, putting on an event for the first time, it didn't feel like you were watching the Olympics.

It felt like you were watching like someone's first attempt at hosting an Olympics. There weren't those like crazy like drone cameras following things, ultra slow-mo. Yeah, they were trying to do stuff. But again, the people doing commentary have never done it before. for, you know, the whole event is, you know, just being birthed, right? So it had an insane amount of attention on it for first event, which is always tough. But then watching it, I realize, like, the appeal, like, none of these, none of these events, like, you can't just watch somebody run in a race and know whether or not they're breaking a record.

Like, you can see, like, oh, that person's quite fast. Yeah. But unless there's, like, crazy graphics and stuff, you know, like an overlay of Usain Bolt of, like, be official. Yeah. Yeah. So, so it's never about, it's never about like exactly how fast someone was, right? Because sure, there's records involved, but the difference, you can't noticeably see whether somebody lifted 220 kilograms or 220.1. It's not visible to the eye, right? And so what became really obvious to me instantly was like the appeal of the Olympics is you have these like very niche activities where athletes dedicate their entire life to this pursuit. And then every four years,

there's like a five-minute period where they're getting like the entire world's attention and they're representing their country and they're going for glory. And they either do it or they don't. They get the gold medal or they don't. You know, whether even getting a silver medal is like agony, right? Because like you just dedicated your whole life to this thing and you're in second place. And so it really is about, it really, it just stuck out to me immediately that it's about, you know, national pride, representing your country, you know, true excellence, right? And in watching this, there was none of that, they were trying to do to basically build up the brands of the athletes ahead of time. But there was just like no, I didn't feel like bought in to any of the storylines. These are a bunch of athletes that were formerly Olympic athletes,

and some of them had done quite well, that are now basically opting into just a for-profit. Like, the Olympics are not about making money. The enhanced games were about, sure, it was about the athleticism, but a lot of it was just like a payday, right? And so, like, there wasn't the same. I didn't feel, basically we turned it on, and then we walked outside and we just made a fire

and like hung out and it was like really far in the distance and we eventually came back came back for the very end not realizing that no records have been been broken until the entire moment entire night until the last event last event and then you watch the event and I think what would have been made it more interesting like a horse race because is like if you had like an actual overlay of the person swimming the actual record like you they left a lane open or something like that and And you could have seen the person who was in first. I mean, it was seven one hundredths of a second. Yeah, so it was really, really tight.

Would have been neck and neck. And so, yeah, so anyways, it wasn't, it didn't, like, capture me. I think that it's something entirely different than the Olympics. I think it's a very clever way to market generic, generic supplements, right? If you go on Enhance.com right now, we don't have an affiliation, of course, but you can just get testosterone and a bunch of, of a bunch of different products. But yeah, to me, to me, you also came away

being like the human spirit is way more powerful than any PED. Yeah, no. Just like dedicating your life to something for decades and being absolutely obsessed. And representing your country is more powerful than being able to do whatever performance-enhancing drugs.

So major white pill for humanity. Yeah. Actually somewhat related to post- Leo the 14th's new letter, Magnifica Humanitas, which we will talk about with our next guest. Christopher Hale, who writes letters from Leo and is joining us right now. He's in the waiting room. We'll bring him into the TVP Ultrum. Christopher, how are you doing?

Great, yourself. Great, yeah. I was reflecting on Magnifica humanitas. And, I mean, I was struck by, we were just talking about the enhanced games and the Pope's commentations. on transhumanism and post-humanism. And I'm sure we can go into all of that. But why don't you start with a little bit of introduction on yourself and then take us through some of the key ideas or lessons that you pulled out of this letter and how you processed

the news? Yes. Well, so my background is I worked and the two things that you're not supposed to talk about on dinner dates, religion and politics. So I worked my career working with President Obama after college. I end up leading Catholic outreach, actually, ironically enough, for President Obama during his reelection campaign. And since then, I've done various initiatives representing consulting for companies on faith and in politics. And I've also done religious outreach once again for every Democratic nominee since 2012, in fact.

But I also spent a lot of time devouring and consuming Catholicism and its intersection with fake democracy. I was a contributor, a columnist for Time Magazine for about a decade during the pontificate of Pope Francis and got invited by Time Magazine and actually Newsweek to cover the conclave that elected Pope Francis this past year. I'm sorry, Pope Leo this past year. And from that, I started writing a substack and it took off. The substack is spelled letters from Leo. It's about the intersection of religion, American politics and technology. So yesterday, though, it was a holiday though, it was Memorial Day, was kind of my super bowl of sorts. Yeah, it seems like it was, like this particular news like really broke through.

It felt like, I don't know if it was just a slow news day. I think you mentioned that there was like bad weather in a couple media markets. It was that literal? Like there was nothing else to report on or people were just inside, bored and so they were reading all sorts of different stuff. Like what was your process on like how the actual announcement rolled out? I was very upset. time when the Vatican announced that it would come out on Memorial Day, the Pope is born in the United States. I just thought it was a bad day for immediate condition.

There was bad weather. I'm here in D.C. It was raining. In New York, it was raining and cold. So my religious claim is that God opened to heaven and the poor weather to allow the Pope's document to be received. But yes, it took off. And I think what that was really the hope of Pope Leopold 14th, he really wrote this. letter and this is different from how these

encyclicals normally work we could talk about anything a little bit about that but normally these are very pie in the sky this was definitely had pie in the sky elements of it but this was really meant for y'all for Silicon Valley he wrote this with builders in mind obviously Christopher Olaa being there

was representative of that but he wanted this to take off in Silicon Valley and yesterday morning Jack Dorsey tweeted out the entire so I think mission accomplished I think he is woken up a lot of folks, both detractors and supporters in Silicon Valley. And I think this document's resonating and making a lot of noise. Yeah. Yeah. What about it do you think is

resonating? Because it is such a broad document. And it feels like he's taking sort of a middle path. I saw it as an optimistic document. I saw it not as not as a doomer. This is AI is going to, you know, kill everyone and this is the end of the world. Like, AI can be useful, but there are a lot of different decisions that we need to make, how AI is rolled out, how we maintain our humanity. That seemed to be the central thesis, which I liked. It seems like it seems sort of like a middle ground. Is that the goal?

And then what would you expect Silicon Valley to take away or change based on that? So that was the goal for sure. I think Pope Leo the 14th understands that AI is inevitable. What's just for two minutes for a second? He's 70 years old, and Pope speak that's like a baby. He's quite young. He's the youngest Pope of having 40 years. He's the first Pope to own a cell phone.

He's the first Pope that's in the email. He's the first Pope to have an Apple Watch. So he's ingrained in the technological revolution in the flesh. He daily drives an Apple Watch? Yeah. Yeah, he has an Apple Watch. He also has a garment too. I'm a cat.

Wow, mode. So me and him have some sympathico there. But yes, he loves technology. He plays whirl every day. And most importantly, he consumes Western media. He consumes Western media and what's going on. So he knows what's happening in the world. And so I think that really informed him what he wants.

The Catholic Church never prescribes policies. We prescribe principles. It's really up to the policy. policymakers to do that. It's really up to Silicon Valley and the products they make to do that. But what he wants Silicon Valley to keep in mind is this question of the human person, whether our projects are advancing the dignity of the human person or whether it are not. And I think that he hears language that concerns quite a bit oftentimes. He's especially concerned about any time where human responsibility is abdicated to two machines, and there's no one that you can

look back to. And particularly, he's been a lot of this document talking about war. Obviously, what's gone on in Iran has really concerned him. He was particularly affected by that first bombing on the day one of the war that killed 168 school children in Manab, Iran, and that he'd received the letter from those children's parents. So he's deeply impacted by decisions like this, and he finds that be grotesque, but he thinks it would be even more grotesque if machines were killing humans without a human decision-making involved. So those are some of the concerns he has. It goes on the economics as well, but really the underlying, underpinning concern is human

responsibility. He wants that to be at the forefront and the dignity of the person. Now, that's at the Silicon Valley of what that looks like. I think that there's a significant chance that a lot of people in Silicon Valley will view this as, you know, desal nonsense, which as you said isn't. But I don't think the folks seriously. Yeah. On the economic question, I was interested in the fact that he sort of called out that

GDP might not be the best development measure because I've been hearing this from all over the place. We had Doug O'Loughlin, who is the president of semi-analysis, very deeply in the inner workings of the AI build-out, talking about how GDP was an inaccurate measure of certain. measures of progress in terms of just economic impact of AI. Then you have, Kyla Scanlan has written about the vibes session, this disconnect between the economic progress of Americans versus the perception and happiness. And we can see it right now.

The economy is growing. The stock market is at all time highs, yet consumer sentiment is at almost all time lows. And so I'm, I've talked to a lot of folks about this problem of like, what, what what are we measuring, what is the goal? It's always been GDP. And I think it's interesting to see that the Pope is calling it out. I don't know that anyone has a really solid answer. My fears that you wind up going towards like happiness optimization.

And then that takes you into a very dangerous territory too. But in terms of like unpacking that question of GDP development, progress, measures, like how do you think the church is, is reflect? on the way we have become a very measurement-driven society broadly. Well, let's go back. So, Leo the 14th was named after his, he took the name, his own name, after his predecessor, Leo the 13th, who in 1891 wrote what was called Rero in the Barong. If you're not a Latin expert, that means on new things. And Leo, the 13th, a lot of people in the West credit helm for the intellectual force behind labor unions, the intellectual force behind, the

intellectual force behind a 40-hour work week and weekends, etc. I think that that is a good indicator of what Leo the 14th once as well. The word leisure is sometimes, I think, derided in a capital society. But in Catholicism, it's a great thing. We rest on some days. Jews rest on Friday, Shabbat, the Sabbath. There's something about being able to limit the time of work, expanding time of recreation, of spending time with your family and loved ones. the word recreation, its root is re-create. That's actually the mission, if you will, of the Catholic Church of Christianity is to recreate. That's what Christ's Christianity when he rises from the dead. We're looking for more moments of recreation. So I think the Catholic dream would be, you know,

to honor the 40-hour work weekend, perhaps maybe a little less, I don't think that's possible, but to honor the 40-hour work week as sacred, to honor leisure as sacred to ensure that people only have to have work one job to provide for themselves and their families. I think that's what we're looking for. We're looking for a baseline comfort that everyone can achieve in this country by working hard for 40 hours a week. There's nothing wrong with having rest. Yeah.

So help me synthesize that with what the Pope said about, like, the unique human challenges, the challenges that make us human. He said, for an algorithm, an error is a flaw to be corrected. For a person, however, an error can be a catalyst for profound change. It was sort of a warning against transhumanism and this idea that every problem is to be solved. In fact, sometimes the problems are what make us human and our struggles are the value and what brings you joy overcoming. But how are you synthesizing those two ideas? I think that what, and so it reminds me of an author that maybe your listeners are familiar with, Oliver Burtman wrote, I believe it was called, I can't remember the word, there's 4,000 weeks, basically, a survival guide for mortality. And for the Catholic Church, for Christians, for people of faith in general, mortality is not something to be overcome in and of itself. It's about having a dignified wife. He's very skeptical of Ryan Johnson, like, of course, he didn't name check Ryan Johnson.

Yeah. But for Christianity, death is a part, a noble part of the equation. So I think it's really hard for the Pope and for the church to understand this idea, but that is something to be overcome. Just to get a little theological for a second, really the way that Christianity overcomes death is by dying. St. Paul says that Jesus, by dying, destroyed our death. So death is not something we should be afraid of. It's something that is part of the journey. It creates a second life for us, life everlasting. So, more practical levels, I think we want to do anything that can dignify the human life to make it better live, to make it more comfortable for people.

But we shouldn't be afraid of our limitations. St. Augustine famously says that my shortcomings, by the way, San Augustine's a patron, probably the 14th. He says that my shortcomings actually give honor to God, because what it does is it proves the need for a redeanor, a savior. When we put it in more blunt terms, we can't save ourselves. I think if Pope Leo thought there was an original sin of Silicon Valley, it's that Silicon Valley at its worst thinks it is God or that it can recreate God.

Yeah, we see a lot of that. How would you guess that he feels about people sort of implying that AI is alive? there were some comments at the event yesterday saying, you know, these systems mimic feelings like fear and joy. Particularly pointing out that Chris Ola or like Anthropic has written in the past that they have detected like, you know, emotions within certain reasoning chains. And then the Pope said that these systems don't feel emotion in the same way. But I didn't see that much incongruity there because one is sort of a description of, you know, the flavor of a text that's being generated. The other one is like the real true emotion, I suppose.

But how did you process that? Like, is there actually a divide or is there some more synthesis that can be drawn there? Sure. I think on the first, I will say that I think we abuse this as a side issue truly in terms of, I mean, you really care about the practical first and foremost. Sure. But what you're referring to, I mean, we know Anthropic gathered 15 fake leaders in March and asked the question, is Claude a child of God?

The very short answer from Catholicism, from Christianity writ large, is that the inviolable dignity of the human person is unmeasurable. A better way of putting it. People always hear that phrase, the whole is greater than the sum of the parts. It's actually a Christian idea. The wholeness of what it means to be a human cannot be measured or recreated in a lab. It is a theological claim. It is a religious claim. So I think the best way the church could understand it is that you can mimic a human being 99%, perhaps 100%.

But the fact that it wasn't brought to birth by God and brought to birth by a human person, first and foremost, and created it, if you will, in a lab. I think that limits the possibility of it being divine. Jordy, what else stuck out to you? What was, how do you feel the church more broad? broadly sort of, you know, I thought I was, you know, seeing some of the, the clip of OLAF talking about, you know, job loss and job displacement and economic disruption. I thought, I can imagine a lot of people in the church broadly were upset to have, you know, representative of Silicon Valley there. and who many, I don't know if this is the view, but many would feel like is part of the problem,

at least when you look at, you know, tech CEOs or lab CEOs specifically when they go and do interviews and historically when they've done interviews and they're saying like, you know, this is going to, we think this is going to cause, you know, massive disruptions of the labor market. People look at the person and I think, you're doing this.

Like, why don't you stop, right? And, you know, we don't need to talk about maybe why it's worth doing. But I'm curious what the kind of broader reactions to that kind of rhetoric are around job displacement. Because I would say the industry is like, the industry is becoming like quite divided. I think that everyone generally agrees that there will be, you. you know, some serious evolution of certain jobs and roles and things like that. But a lot of people in the industry believe that there will be significant job creation as new companies get built and entirely new roles emerge, even if some roles and jobs go away

entirely. And, of course, we saw the same thing in the Industrial Revolution itself. I'll say on Christopher Ola's remarks. So I wanted to step back very quickly. Olaas, Chris Olaa's presence there was on the result of really a 10-year effort by the Vatican to engage with Silicon Valley. And to be very blunt, that engagement was at times rebuffed by some, not by others. Christopher O'Law is there because Open AI more than any other company in Silicon Valley took these questions seriously and took the engagement of the Vatican seriously. And I know for a fact that February dust up with the Pentecost.

gone and the the Vatican would argue at least officials of the Vatican would argue the courage that tropics showed in that and that fiasco was the final was the final straw that makes made them the guys

for the Vatican but very quickly I thought Ola's remarks struck a lot of people in Rome and here in the United States as quite honest I appreciated him saying that like we're not driven by these questions in fact we are driven by innovation we are driven by profit it was stumbling of a, it was the opposite of a pitch, you know, and I appreciated the honesty.

In some ways, that's how someone arguing is actually a confession. You went to Rome and ask for a confession. He said, well, we have these shortcomings, and we need outside institutions to be, I don't know if referees, the right word, that's probably too strong a word, but advocates for, for a human-centered development of AI. Yeah. Have you, have you looked at, who do we have, who do we have, who do, who do you? do we have on the show? Pat Gelsinger, have you looked at any of his analyses of these

different LLMs? He's benchmarked all the LLMs on, on like how spiritual they are, how they, how they map to different religious values. And his sort of complaint is that the, the LLMs are overly agnostic or overly atheist in the training data, perhaps because there's like a lot I've read it in there maybe. And I'm wondering, like, if there's any perception of, like, the training data, like, the actual products themselves, misaligning with the views of the church. I would say, so I would say the Catholic Church, probably the 14th, is not looking for an LLM to replace a priest or religious advice. And I think that you have concern that people would go there first, quite frankly.

So I don't think he's most concerned about the bias. I think he's concerned, I mean, I think obviously Pope Leo is neither left or right, but I think a lot of his concerns do on this really attack to what the left in the United States is saying. I think that there's concern about bias in profiling, bias in credit scores. He talked about that. I thought that was remarkable that he's talked about credit scores and mortgages, getting access to mortgages. I thought that was profound.

So I think that is more of his concern. We actually saw another study today that said that when you asked some LLMs to, to, they compare, like, when you asked them to compare religions, the Catholic Church got a nice review, a glowing review, so perhaps Claude's Catholic or not, but I don't think Leo cares as much about that stuff. I think he's concerned more about, quite frankly, access to resources and judgment calls about who gets something versus not, and punishment and not. Those are really what I think overwhelmed. Look, this document was long, he did a lot in it, but the thing that really it kind of took most of like the least of a lot of part of a bigger portion of it was war.

Yeah. Yeah. Can you help me understand his views on international governing bodies, international cooperation, a lot of the debates in artificial intelligence right now, they get, they sort of, they sort of run into problems where the different American companies sort of agree on something, but then there's this boogeyman. of international competition and if we don't do it China will and so we must continue to accelerate and it feels like Pope Leo sort of gestured towards a view of international cooperation that could be the solution but also there were some detractors who were worried about the negative outcomes of that and I'm wondering like how you interpreted his his vision for international cooperation in the modern era Sure, I think the first thing is, obviously, he's an American pope, but he is the Pope of 1.4 billion Catholics. So, of course, he's a globalist.

Of course, he is concerned, he puts global institutions at the forefront. He's not, unfortunately, to some, chagrin, not America first on these questions. Sure. I think that the critics of Leo are going to be disappointed because he does believe in regulatory order. He does believe in international norms. he does believe in governing societies. The most conservative Pope we've had in the past 60 years, Pope at the 16th was very big on the United Nations and equivalent organizations.

Now, I think some in Silicon Valley might rightly argue that's naive, that those things don't work. But I would say that for a practitioner, I think that what he would ask is at least allow the question. Can we have more cooperation? can we have more agreed upon constraints and can we at least engage in this in good order? He obviously, you all are profit-run companies that are listening today and that's the reality of it. But I think he wants, I think he wants everyone to take the heart.

What can we do to ensure that what we're building is for the common good of everyone? but I very much think that J.D. Vance, when he went to Europe and Paris in 2025, and he said, let's talk about innovation more and guardrails less. I think Leo's saying, no, let's talk about Garberos as well. Oh, interesting. Okay. Well, thank you so much for coming on the show and breaking down for us. Yeah, great to me. Do you anything else? I appreciate it. Have a great rest of your day. Thanks so much. We'll talk to you soon. Goodbye. Interesting. I am excited for more people in intact to digest the encyclical and see where all of this goes.

We have our next guest joining in just three minutes, three minutes. We have time for one quick story, closing out the enhanced games, of course. The next thing was that over the weekend, Diary of a CEO, host, Stephen Barley, went viral for saying that... Tyler, throw me a beer. Yeah. So this is a funny clip. We can play this actual clip. Ross Hendricks.

A lot of people were not happy with this. The quote is it's from a clipper says, Stephen Barless says a few glasses of wine, ruined to the next three days of his life. Let's play this clip. It's one of those areas where you don't understand the hidden cost until you really give it up for a while. And I think about my own relationship with drinking

and I stopped drinking at 30 years old. I'm not 33. And I had just drank because I just drank. I'd never ran the experiment. of just giving it up for a while. And then I don't know, maybe I was at 31, I thought, do you know, I have a drink again? Because now I could really A-B test it.

I had a year of not drinking, decided to have a drink again. It ruined three days of my life. I had a couple of glasses of wine. Didn't get drunk. It ruined three days of my life because of the domino effect it caused. So it meant that I got worse sleep that night. And then because I got worse sleep that night, I ate more poorly the next day because my dopamine system or whatever,

the cortisol system was all messed up. That's reliance, yeah. And then I podcasted worse. I didn't go to the gym the day after. People did not like that. I podcast, I podcasted worse. Because I felt really bad.

I then slept worse. And I could track all of this on my week. Hashtag ad, hashtag sponsor, hashtag investor, whatever. Yeah. And I was like, oh my God. I love it. Chris is just chilling there.

The perfect. Perfect. The perfect. Hidden domino effect that I must have been living with for my whole life. So this is like a very non-controversial take that has been popular on podcasts for years, really. But it's so pointed here. And I think it, I mean, there's a bunch of interesting things. I mean, a lot of people are just saying like, oh, you should just be able to drink.

And like, it's gone too far with the total abstinence culture. Like, you should be able to have a glass of wine and be fine. If you're completely knocked off of everything for three days after a couple glasses of wine, like, you're not actually, like, you know, strong and hearty. And life will throw other problems at you. And much worse than three glasses of wine, you will lose sleep because your kid is sick and you will still be asked to perform. And so you should be perform.

Parents watching this certainly looked at it and thought if one, if one night, if one bad night's sleep doesn't allow you to work out for two days or grows you off so significantly, you probably shouldn't probably shouldn't have kids because get ready for, you know, every other. A lot of craziness. Like life will throw all sorts of stuff at you. It was funny because when we started doing the show and you saw like my various health habits. You used to joke, like, John would say, I'm a junkyard dog. I just eat everything,

and I just assume it's healthy and nourishing, and I feel great, right? And you would joke that you would say, if Jordy had a single inorganic blueberry, he would kill him. He would explode. He would explode instantly, the thoroughbred diet. So yeah, I've certainly just, you know, battle that myself. Like, the point of being healthy is to be resilient. I mean, the funny thing is that we used to have Dom Parangian episodes where we would drink on the show. And it actually did make us podcast worse, as silly as that sounds. Like, it was harder to maintain the flow of conversation. And you'd think, oh, having a couple drinks, it probably loosens you up. Like, no, this is actually a performance. Like, even though podcasting is a silly job, like, it is a job and you need to be on.

Yeah, another example. So we basically decided, we decided early on to never take sick days. Yeah. Partially because we would, we, we spent some. much time together. Like we're always, if one of us gets sick, usually the other one gets sick, is just part of the game. And think about moments where you just feel like completely terrible. Yeah. But because we don't take sick days, we're like, okay, we're going to power through.

And you end up still, like, we end up still having a fun time. Yeah. We end up hopefully still having a good show. And so, yeah, I think this is this. I think we probably hit, I was talking with some friends yesterday. and it feels like alcohol is going to go the way of cigarettes, where it's broadly established that it is very unhealthy, but can still be quite enjoyable.

And we'll maintain some level of... Like cigars. Cigars. No, but I mean, cigarettes are still widely consumed. Yeah, but cigarettes are so addictive that people either smoke them all the time or not at all, whereas I think a lot of people who do drink wine, will have like a glass of wine on the weekends, whereas there's no one who's like,

I have one cigarette a week. That's not like a thing. But people do that with cigars. They'll be like, oh, yeah, I go to cigar nights. There's definitely people that are. It's pretty rare, though. It's pretty rare. Anyway, the last thing is that I was fascinated by this fact

that this went so viral because of this clip. And Crypto Mickley, who is Web3 clipping at counterparty TV, not Thread Guy, clipped this. And I was interested in it because, at first I was like, is this out of context? And this is sort of the full context from the actual show. But it does sort of change the context because this is obviously from a longer show. It's two people hanging out for an hour.

They're talking about a lot of different things. But when the clip is introduced as like Stephen Bartlett says a few glasses of wine ruined the next three days of his life, it's the most, it's written like a press release. You know, it's like a statement. And it's not necessarily what Stephen would have put out as a press release. He wouldn't put it, he wouldn't necessarily have done a blog with the title. Yeah, and the actual, this is a guy that cares a lot about performance. Yeah.

He's basically admitting that he had a few glasses of wine and it threw him off. Yeah, and he's just trying to tell like a positive story of like, yeah, just, you know, removing something, feeling healthier. It made him happy. I don't know. But it clearly, it clearly triggered everyone because there's 24 million views on this and 2,000 quote tweets. And Ian over at SICOM, the team behind. Huberman, Ian is pulling up the chart of new podcast by year. It's possible that drinking is correlating with podcast creation.

People are drinking. We should start a podcast. We should start a podcast. Maybe, maybe. It actually peaked right in 2020 and it falls off a cliff. This is a crazy chart. Drinking really fell off a cliff because of COVID too. Yeah.

Make it make sense. So where all the podcasts launched in 2020, I guess, is that, is that where this line lines up because I guess during COVID a lot of people started shows and then it went back to sort of of the baseline. I guess I'm surprised. I'd like to know more about this data because it feels like there's been like an ongoing boom forever, but I guess not. Anyway, we have our next guest waiting in the waiting room. We have Sean Henry from Stored. He's the founder and CEO joining us today and speaking on your own. Sean, how are you doing? Good to be here. Thanks for having me guys. Welcome to the show. Very cool green screen.

In the background. Not a green screen at all. Anyone goes by, this is real time. This is live. I'll blame all of my performance on my three glasses of wine from Friday or Saturday night. There we go. Otherwise. There we go.

Great to see you. Been too long. You got some big news today. Yeah. What happened? For sure, John, Jordie, good to be here. Thank you guys for having me. Well, we're announcing that store has raised $250 million.

A three-pillar. Thank you guys. Thank you. Really, the power of the physical intelligence layer for commerce. We spent a decade building this that's stored, and we think that the scale, the vertical integration, and the ability to apply robotics and AI to the massive data set we have is just transformational for commerce and what we're enabling for our customers. So very proud to announce this round and thrilled to be here, live sharing it with TBPN.

So what's been the biggest growth? driver, obviously you're expanding in your commerce market, your offerings, but also is e-commerce, is commerce as a general category still growing? What are sort of the macro trends that are tailwinds for you? Yeah, if you look at our announcement, what you'll actually find is we put out a pretty public chart of revenue. And you'll find in our tweets that right around the time that AI came out, about six months later, we accelerated massively as a business, which really is in part that we had spent eight years to that point already building so much vertical integration of software from the time we're speaking to a consumer during the checkout saying, order now,

get it on Thursday, to the time we're orchestrating that network, to the time we're executing it with software in a building like this across our network of nearly 100 facilities. And so when we took that vertical integration with the scale that we had, maybe two years ago at that time powering about $5 billion of commerce, today powering almost $17 billion, of commerce. What we've been able to do is drive just faster deliveries, cheaper outcomes with all of that technology and with all of that scale combined. And so a lot of what we're using this new capital for is to keep expanding that scale. There's such a flywheel behind this business, whereas we get bigger, we're getting faster and cheaper. To then also complete the front-end

stack of software. That's been a big part of our growth the last few years is that we've built that whole front-end consumer experience that's now interacting with tens of millions of consumers per year now that we power deliveries to over a fourth of U.S. households. So we're going to keep expanding that front-end software stack. And then the final big pillar of our growth is we're also announcing stored labs with this raise, which was a big part of why we raised so much capital, $250 million, to apply AI and robotics to all of this real-time volume in the real physical world already running real time and we've carved out an entire facility here in Atlanta just dedicated to testing next generation

robotics and AI before we apply them and roll them out across our entire network. Yeah. What are the different why now is that you're feeling in robotics specifically around, you know, in fulfillment infrastructure? Is it like is it happening on the model side that there's, you know, other neolabs just working on the intersection of AI and robotics all the way through, you know, a new actuator technology coming out of, let's say, China. Like, what is, is it, and I imagine it's the combination of a bunch of factors that's creating the opportunity, but what are you seeing? Why is now the right time

to invest what sounds like, you know, nine figures into your own robotics and AI products? Yeah, there's really two why now is going on right now. One is why now for our business and one is why now for this investment in stored labs. For our business, more broadly, I think the why now comes to by 2020, consumers have been taught they wanted fast, affordable deliveries, and that was really what was driving commerce in today's world. Since then, for the last five years, brands of all sizes have fought to get that Amazon-like delivery on their own channels so that they can win and retain their consumer, rather than, as one of our customers said in a quote for this round, they don't want to just be a skew on Amazon.

They want to be a brand and own their channels and own those direct relationships. It's actually been a really hard five or ten years for e-commerce when you take into account all the changes with Apple and Facebook and rising ad costs, then with tariffs, then with, first with COVID, then with tariffs, and all of these kind of compounding challenges to where the why now for us is really that these brands have been beaten down. They've faced rising costs. They've faced rising competition from Amazon, from TikTok shop, and more. all that are just disintermediating them with their customer and harming their unit economics. And so we want to give them those unit economics on their own website. And we even saw two, three weeks ago, Amazon themselves announced this kind of AWS for supply chain moment. Well, we don't see that as any different that Amazon is really just subletting some capacity in their network.

What brands want is truly structurally different, which is independence. They want somebody who's not using their data against them, who is driving all the branding on their packaging, their tracking, and more that keeps consumers coming back to them. But it was validating. The why now for robotics and stored labs is equally interesting, which is that you kind of look at a company like a Tesla, let's say, and you go to the algorithm. They often put hardware and automation last because first you have to nail the processes physically and the operational excellence around those processes. Then you have to nail the software to run those processes and kind of unify those two. And that's really what stored spent the last decade building. And then only once you've gotten every efficiency out of software, every efficiency out of process, then do you go hard code with hardware, which is physical, it's expensive, it's hard to undo.

And that's really where I think stored time this perfectly in that hardware's changing. The hard coded robotics from yesterday and now the agentic robotics of tomorrow that can learn better, better, adapt better, already in this building, for instance, all of our cameras are equipped with AI that are telling us about productivity across the facility, about safety issues, about compliance issues, that wasn't available a few years ago. So when you take our vertically integrated software within all this hardware and sensors and vision and how it's then feeding dynamic, agentic robotics, we're in this like fundamentally different paradigm in automation forward, but you have to have the existing software and vertical

integration to capture it. How are you thinking about the different robotic opportunities? Like, I think there's a lot of excitement about humanoid robots. We saw last week a demo of a robot sort of humanoid flipping over packages so that barcodes could be scanned. And when I'm in a manufacturing facility, I usually see much more purpose-built machines or robots for those specific tasks. If there's a million boxes that just need to be tipped over, typically there will be a conveyor belt and some sort of device that just does that one task.

And I'm wondering if you're seeing more energy being devoted to task-specific robotic optimization or more generalist projects. Like, what excites you? What is, where's the next, like, a couple years look like? Yeah, that's a great question. And I think it's where we're headed, which is more general. I think the task-specific automation of the past is what kind of causes issues because oftentimes the task at hand changes. You implement that robot in six months later with a new skew variety, new production change, new consumer demand pattern. All of a sudden, the model you built that ROI off of is now fundamentally changed.

And if your robot can't adapt to it, you've just wasted so much capital. And so we're very much focused on this kind of new generation of more agentic, more dynamic. robotic. And a big challenge in the past was that you kind of either had a robot that moved the arms and could grab something or a separate robot like the Kivas of the world that were kind of moving the legs and it was just shuffling something around the facility. So now you're entering this new paradigm where what could a humanoid do in a warehouse if you could move the top arms and the bottom legs at the same time and really see this new level of movement going on in a facility. But it's in part why we're so excited because

our foundational insight when we began stored beyond the kind of consumer trend and that every brand was going to need these Amazon capabilities was the reason brands can't do this is that traditionally physical logistics and logistics software. And then the software that serves a brand and speaks to the consumer are all sold separately. And you're trying to figure out how to integrate all this together and tie it into the physical atoms moving out there in the physical world. And so our thesis was, well, if we build all of those together, the infrastructure, the operating software and the consumer-facing software, we will be the platform that can iterate off of these. And right now, our biggest costs are essentially either decisions, labor, or deliveries. And with how our decisions are going from ML to AI, we're getting faster and cheaper than our industry because of that proprietary software. With how robotics are going from hard-coded to agentic, we're getting faster and cheaper at a faster pace than the industry. We're getting faster and cheaper at a faster pace than the industry. And even things like drone-based delivery, it's such an awesome capability and incredible category of companies and what's happening there. But you still need inventory everywhere to be able to deliver from a drone, which has a limited radius.

And you need that front-end consumer experience software telling the consumer drone deliveries available. And storage is what controls that part of the stack that then extends out to then enable things like drones. So the shortest statement is we kind of see ourselves as the vertically integrated integrated platform that can first take advantage of a lot of these emerging technologies because our industry is so far behind us. Talk about international expansion. Where are you live today? Where do you think you'll be in 12 to 18 months? What international opportunities are exciting to you?

Yeah, so we're very large in the U.S. approaching 100 million packages a year to about a fourth of U.S. households this year. Internet. Nationally, Canada is our next biggest market followed by Europe and the UK. We're expanding with recent launches in both China and Australia. And that's taking U.S. brands internationally to say, hey, we can already ship your products globally to over 180 countries. We do that every single year. But what if you actually wanted to hold your inventory locally in those markets and deliver locally? So if you step back when you think of stored as saying we are the physical intelligence layer for commerce,

What that means is really we're trying to give all the physical infrastructure, all the software tools, all the robotics and all the AI that you need to sell anywhere and deliver to those consumers. And so already today, our platform is infused at every level with natural language AI where I only bring that up because one of the most fun questions we've seen brands asking is, where should I expand globally based on where all my consumers are already purchasing from? Yeah. Is China an underrated opportunity for independent brands? We were just reflecting on the fact that the Tesla model Y is the best selling electric car in China. It's obviously an American made, American developed vehicle. And I'm wondering if that's not on the top of anyone's mind. But is there some sort of opportunity there? I think you may be on to something.

That's not necessarily why we expanded into China. We are very customer obsessed. And so we tend to follow our customers globally. And to your point, we went with one of the fastest growing U.S. brands who wanted to access consumers in China and expanded with them. And so I think oftentimes we think about the inverse, which is, hey, if I launch a brand here, my product, my IP, or other is going to be quickly replicated internationally in markets like China. Well, there may be the opposite, which is the end consumer there may actually want that brand from other markets like the U.S.

I think there's just this often underestimated fact of opening up more channels tends to decrease your tack on your first channel. Because what we is, let's say, a brand goes into a new marketplace, a new store, a new international market, and therefore the audience just gets larger and larger and larger who's seen them at least once. And so then your ad effectivity goes up, and so your KAC organically continues to go down. Yeah, that makes a lot of sense. Well, congratulations on the fundraise. Great update.

Thank you so much for coming on the show. And have a great rest of your day. Talk to you soon, Sean. Good to see you again. Until our next run in. See you later. Bye. Up next, we have Eric Reyes.

What a chat. The author of Incorruptible Why Good Companies Go Bad and How Great Companies Stay Great. Eric is in the waiting room. We'll bring him in just a minute. You probably know him from his first book, The Lean Startup, which focused on why successful, successful companies drift. This book is focused on why successful companies drift from their founding principles and how to prevent it. The Lean Startup was foundational to me when I came to Silicon. Valley. I remember I went to a lean startup book event probably back in 2012. You spoke there and it was

very inspiring as I was starting my first company. And I took away from it just, you know, money is not infinite. Don't die. Don't burn all your money. But I mean, maybe we can start there and sort of reset. Like what are the correct lessons that you think should endure from the lean startup? And then we'll go into incorruptible and sort of all of the evolution. But I'd love to sort of have a reflection. Super incredibly influential on my career and journey. Really like unlocked entrepreneurship for a lot of people because it was a perfect time. You needed $20 million to be a business.

Well, yeah, for me, for me as somebody who just grew up obsessed with startups, beyond tech crunch every day and all the startups that I thought were cool and crushing it were in tech crunch every, you know, 12 months raising all this money. And it feels like out of, you know, it feels like out of, you know, it feels like out of, when you're a teenager and then you realize like, hey, the capital is, everyone permission. Capital is way less of a constraint than you would think. So thank you for that. Well, guys, thanks you. Thanks. And first of all, congrats to you. Thank you. Thank you.

You know, what's really held up? Like, a lot of the techniques and the specific tactics from Lean startup are a little dated now. I mean, you know, Group on. It's a case study. Like, it's old now. It came out in 2011. But I think the principles have held up really well. And especially if you think about, like, from a megatrends perspective, The book said that the world's going to get more and more and more uncertain. So our ability to plan and forecast is going to get worse. I think we hit, we think we nailed that one. And that the democratization of technology is going to mean that more and more and more people are going to be able to build faster, cheaper, better products. And so you put those two things together, every industry that's been hit with a double whammy of those two things,

and start to hold up real low. Yeah. Do you think startups are getting leaner or less lean in the modern era? And what I mean is that I will see, we, we, we have. have folks on the show all day, oh, $200 million seed round. It doesn't feel lean. At the same time, we hear about the mythical one-person, one-billion-dollar company. And although there's been some reporting that's been a little bit debunked on has it happened yet, it feels like it is becoming more attainable. You can run leaner, even if you're just using SaaS products, but also AI agents

can do a lot of things. You can answer a lot of questions. You might have slightly lower legal bills just because you're a little bit sharper going into that negotiation. And so I'm wondering on the net leanness. How are you processing the modern era? Well, every time we have a mania or a bubble, you know, what I can call it, right? The situation goes bimodal real fast. You have people who are struggling to raise money if they're not in the favored category. And then obviously the money is flowing ridiculous. What's funny is, I've been at Lean Startup long enough that people periodically write these articles that such and such company proves that Lean Startup is over. And they always pick a company like Quibi.

Okay. So it's like, you know, you just never know what it's going to be the thing. I think fundamentally, like using resources well is an eternal entrepreneurial virtue. So even the people that are overfunded, a lot of them run into trouble because now you don't have that, that reality kind of barking at you all the time to make sure that you're actually building something that people want. It becomes easier and easier to elude yourself the more money you raise. The other kind of startup that's emerged is the is the lean startup that ends up raising a lot of. of capital, but simply because they were lean and they were like really scrappy. And so they grow super quickly. I'm thinking of like, you know, a turbopper. Our friend's company where, you know,

raise very little money is at a nine figure run right now, but extremely attractive to capital. But but but but his entire approach is like how do I maintain that scrappiness even once I have a fortress balance sheet because that's what made the company great from the beginning. It's just like doing things that customers want that they'll pay. pay for, you know, all these things. When it's so easy when you take in that level of money to lose that ethos, the thing that made it worth investing in in the first place. And I think it's interesting.

Like I know quite a few companies like what you're describing where the fundraising was done for some other reason than for the money. In fact, I know a bunch of founders who brag to me, we raise this money and never spent it. Yeah. Because it can make sense to have a Fortress balance sheet. But to me, the real question is not about like how big or small is the organization, how much money was they raised, but how much control.

control do the people who are locked into that mission actually have over what happens next? And sometimes when you raise too much money, especially too much money too early, you think, you know, you ring the gong and you're really proud. It's great. You know, like, it's, okay, that's really fun. But then, like, how do you actually? Yeah, or you got the air hard. You guys get the sound effects.

And like sometimes, you know, this, you know, the media environment, like steadily building a product that people love day and day out. Like, that's not the sexiest story. And so sometimes, you know, we get distracted by all these other things that take us away from the one and only one thing that truly matters, which is can you build a great product, build a great company? Yeah, yeah. I mean, there are so many, and a lot of financial reporting sort of misses the changes of control that happen.

Like, there might be a company that's raised a $1 million series seed, and then a $5 million series A, and there's two VCs on the board and one founder. And then there might be five founders on the board, and VCs are stuff in $100 million checks, and they can't even get a board seat because there's so much demand. And which one tells you more about the future of that company, potentially the governance side. How are you grappling with the just governance in the modern era? I mean, I feel like that's a lot of what this book is about. There's so many different paths.

There's, you know, PBCs and really diffuse lots of, you know, lots of co-founders having even stakes. And then you have the SpaceX AI, immense control and a single founder. both can reduce fantastic products and good financial outcomes. But how should we interpret all the different roads that are available to founders these days? It's really confusing. That's actually part of the reason I wrote the book is meant to blueprint to actually show a new better way forward. Like the extreme founder control has its problems.

You know, psychologist call it hubris syndrome. Not to name check any particular founders. That can cause some issues. But also investor-dominated companies really underperforming. precisely because we have this financial system that has this gravitational force that pulls companies down into mediocrity or worse. And the book I document like over and over and over again, we reenact the parable of the goose that laid the golden egg and just stab it right through the heart. By removing the thing that actually made it worth investing in, in the first place, how many times have you gone to a restaurant and you look on your phone? You're like, take one bite and you're like, did private equity buy this restaurant?

It tastes disgusting. No, I have the best example of this. My favorite, my favorite hotel in the world was bought by private equity. And one of the things that every guest would talk about didn't matter at all. It just like barely contributed to the cost of like, you know, having a guest there was that every night the hotel would walk around and they would leave a warm chocolate chip cookie and milk for each guest. And literally, and private equity bought the hotel, which only, had like something like 20 something keys and they immediately removed the free chocolate chip cookie with milk at night thing and i just so such a funny thing to like take out but is exactly

the kind of thing when you met you transitioning from you know this like founder led you know family operated business to um totally investor owned yeah what's sad about it is we built an economy where people are routinely rewarded for cutting costs, but never held accountable for the downstream brand and quality consequences of that. So like on the balance sheet, getting rid of the cookie is immediate ROI positive. Yeah, and you can justify it. You can justify it because well, the cookie's still on the menu. So people want the cookies. Why do you have to get a free? We looked at the data. A lot of people don't even eat the cookie, right? And so it doesn't matter. Of course. No, you got it right. Like how is it possible that the capital structure of a

company has a flavor. You can literally taste it. Because, like, notice how when you said that private egg took up your hotel, we're all ready to give you condolences, right? Like, in theory, you might be like, well, having those resources made it better, right? Go, that's great. Now they're going to, no, no one ever feels that way. And everywhere I go, you know, I've been just having this book tour on the new book,

people are coming up to me to be like, I know that story. Yes, that happened to me. And they've named like 20 different restaurants to me, hotels, like so many service products where, and again, it's not about private equity per se. It's that we've built this pervasive force that is just dragging companies down. So if we're going to get now get to the governance question, and I know for founders listening, it's like, oh, God, governance. It's so boring.

But like, as I end of the book, if you don't get the governance of a company right, no other decision you make will matter in the long run because you won't be the one making it. So we have to figure out how do we create that like incredible alignment. You've seen it in mission driven companies, right, where everyone's on the same page. And how we protect that special thing from outside pressure? And when you put those two things together, can create what I call mission-controlled companies that cannot be corrupted by this temptation. Yeah. There's a bunch of different things that I want to like click through to get to interrogate that.

The first is probably quarterly results, quarterly earnings. I've seen proposals to go to every six months reporting. And it seems like, okay, that would align public companies with like the CEO could think for six months instead of three months and take bigger risks and think longer term. That feels very good. At the same time, it feels like the rug that you sweep things under is potentially just getting twice as large. Yeah. Twice as large or the closet where you hide the bodies is getting twice as big.

And I'm wondering, is there attention there? Am I wrong to think that there's attention there? Because a lot of, a lot of like I think about problems in the public markets with long-term value creation, long-term alignment. But then I also think about the transparency that comes with being public, the regulation that comes with being public, the access to public investors, retail investors that can participate in a company before it's a trillion dollars if it's going to be a great company. So how are you dealing with those tensions if there are tensions?

Yeah, well, okay. First of all, the tension is completely real. Okay. And the thing you got to know is long-term stock exchange, the company that I found it, is the one who filed the petition last year to the SEC to switch from quarterly. Oh, no, you're the one. Okay. So obviously, I have a strong, strong view about it.

Oh, nailed it. Exactly. So, and what's funny about it is, okay, so first of all, we have to understand the scale of the problem. You're not going to believe this, but we have really... By the way, sorry, sorry, before we continue, you should have named it like, you know, Eric's, Eric's Law or something like that. You're not getting enough credit. You're not getting enough credit for this. Listen, the memes and everything, that's your department.

Okay. I just, I just, okay. But you've got to understand the magnitude of this problem is insane. Yeah. If you look at other countries, there's these natural experiments where certain countries have switched from semi-annual to quarterly reporting or vice versa. And they happen to do it in such a way that not every company changed at the same time and it was random who did which. So we actually know the valuation consequences of quarterly reporting. And it's roughly a 5% loss of total equity value.

Wow. Companies are 5% less valuable when they report quarterly than sent. the annual. So the academic research on this is pretty good and the magnitude of the cost we're talking about so much, so many billions of dollars of lost value. It's not because the like, you know, effort to do a quarterly report is expensive, although it is expensive and annoying. Rather, when people report quarterly, they start to run the company for the quarterly report. So companies no longer make products. They start to view the quarterly report as the product, which means they're mainly meme factories. What do I have to do to generate the report that will get me what I want?

Now, getting rid of quarterly reporting just by itself, I don't think is a very good idea, and we'll see what the SEC ultimately decides to do. I think we should replace quarterly reporting with a better, like, more fulsome disclosure project where long-term investors can actually find out what the F is going on at the companies they invest in, where today companies are strongly incentivized to get out as little information as possible. But that's kind of broken the partnership we need between long-term companies and long-term investors.

That's, of course, part of why we created the exchange in the first time. Yeah. Talk about public benefit corporations and how incentive alignment might play out. Like in the longer term, when there is, you know, when you get to a stage of a company that's a lot more like Apple than a founder run, like Anthropic is a unique example with a set of co-founders. But like the normal Fortune 500 company has a leader at the top that might have 1% equity and a board seat. But there's a chairman of the board. There's a board of directors. it's much less controlled.

But in that scenario, they are reporting to shareholders and they have a fiduciary duty to shareholders. If, you know, you have a company that's, you know, broadly held and has diversified board and diversified ownership structure, but is a PBC, how does that play out? Like, what are they doing differently? Is it that the CEO has two different hats and they're mentally taking these on and off throughout as their decision making or what is? How does that actually play out? Yeah, that would be too hard.

The so-called double bottom line, triple bottom line, I think, is not worked out very well precisely because it leaves CEOs really confused. Okay, you want multi-sholder, great. Customers want lower prices, but employees want higher wages, now what? So it kind of leads to compromise. Yeah. But what's interesting, PPC is actually not that new. Okay.

For the vast majority of time, there have been joint stock corporations on this planet, it was considered obvious by everybody that they should be incorporated to do a specific thing, when they're just trying to make money for themselves, they want up hollowing themselves out. That's what makes them dangerous. It was only in the 1980s that the idea of so-called shareholder primacy came into effect.

So if you walk by your local park, you will see trees that are older than this idea. This is not some like ancient pillar of capital. And in the book, I make the case for, first of all, we've got to get rid of shareholder primacy. I think it's just a terrible idea. But the question is kind of like attacking it is easy because the data is so good about all these best practices

being so bad. The issue is what do we replace it with? What does mission primacy look like? And I think the key to that is to understand that being a for-profit company is actually great. Making a profit is actually about making the world a better place. That's literally the definition of it. It's like a positive margin transformation. So in the book, I argue, and I feel we're doing it on the same day that, like, Pope Leo made this same point in way better fashion.

You know, hundreds of pages. I only mentioned it in passing. But like literally to make a profit is to maximize human flourishing. That's what it means. So now coming back to the PBC, All PBC does is give the CEO and the board the legal cover to pursue long-term value creation in the face of hostile investors. So if you go there and say, listen, I want to sell the company to Philip Morris because they're willing to pay a dollar more per share than it's worth, you need the tool to be like, no, that's ridiculous. Of course we're not doing that.

And that's what PBC allows you to do. Interesting. What do you think are some of the most underappreciated companies in history that you feel like had mission primacy? Yeah, yeah, obviously these are profiled in a great deal in the book. And what's really interesting is if you talk to people about corruption and say like, why does companies go to bleep after they get big or whatever? Most people would be like, it's inevitable. It's human nature.

Companies get old. They get big. There's a lot of money involved, blah, blah, blah, blah. But those same people, if you're like, are there any companies you trust? They're like, man, I love Costco. Yeah. It's like, interesting. But I thought it was inevitable.

Costco's a $400 billion public company. Oh, yeah, well, they're the exception. You're like, well, what about Patagonia? You got a Vanguard mutual fund? What about, you know, John Lewis Partnership? Or you've ever eaten a Hershey's Chocolate Bar? You ever taking a Novonautist medication? Like, there's all these weird exceptions, many of which are decades or even like more than

100 years old. And what's interesting to me is if you take that whole category of companies as a dataset and say, what do they have in common? Every single one of them violates pretty much all of today's so-called best practices about how companies are supposed to be structured, built, and run. So I think we actually have really good data that this is not some abstract things. So, like, so for example, when the founders of Anthropic left Open AI, so what is that, like, three or four Open AI crises ago?

I can't track. Anyway, it's like, it's like, it's like, it's been a rough, you know, it's been a rocky road. When they left, like, I was one of the people that they talked to setting up their governance structure. And not only, and again, I am not taking credit. Okay, don't do the meme thing. Okay, I'm not taking credit for Anthropic success. obviously I played only a very big part. They wanted to call it the Eric PBC, but you said,

and I had to talk them out. I was like, guys, please, please, no, no, I don't. Eric would be an incredible name. They were looking for an idea and you told them like, I think you should work on AI. That's what happened. Yeah, yeah, they were like maybe thinking of pivoting out because they left open a.

Yeah. Maybe we should give up on AI. They were going to do protein shakes or they were doing energy drink and you were like, I don't do this. I just talked to you. I said about Dira's CEO. Don't get me in trouble here. Who's going to clip this out of context.

You're going to get me busted. Yeah. Okay. Well, listen, so I'm not for the record. I am not getting credit for their success, nor am I trying to talk smack about opening. I know you guys love them. Yeah, yeah.

The issue, but the specific thing I think is really interesting is because they were really worried about this specific issue, when I gave them my typical litany of, like, founder loss of control horror stories, they could see how bad that would be. And in fact, it's funny talking about the Pope. I was at an event at the Vatican last year, talked about AI governance. And I was on this panel with every major AI company,

Open AI Anthropic, Cohere, Palantir, Google, meta, everyone on the one panel together and me for some reason. And I'm looking down this row and I'm like, oh my God, not a single one of these companies has standard governance. They all consider it to be too dangerous. Interesting. They got to have somebody playing the role of what's called the Mission Guardian. But Anthropic, to their great credit, I think,

did not want it to be the founders personally holding that special responsibility because it's stressful as many founders who are trapped in this situation. So they created something called the long-term benefit. trust, which is like a multi-branch government, right? So you have the for-profit PPC, and then you have the board of directors accountable to a second entity, this outside trust. And the data shows that companies with that structure are something like five times more likely to live to year 50 and have like way better long-term value creation metrics too. So again, I think we have the evidence that there are these better structures, yet most founders are never given this as an option. And by the

time they find out about it, it's too late. They've already lost control. I want to talk about one interesting thing is if we move to buy annual reporting, there's going to be a lot of work, accountants, lawyers are going to have less work, but you're creating a new structure, you know, these complicated structures

they can just shift their attention to working on mission mission aligned companies. Yeah, sorry. I wouldn't be that bad, would it? No. I think I would like, what's working on now? No, no, I'm, I'm, I'm,

I'm sort of joking, but at the same time, I think it would be much better use of their time. I want to talk about Mondragon. Is that how you pronounce it? Sure. Yeah. I'd like you to introduce it, though, first for those who aren't familiar. And then I have some questions about, you know, where we go, what lessons we learn from it. But first, how do you understand that?

See, I don't get to talk about Mondragon very often. So I know you did your homework and I just A plus. Awesome. Okay. So it's funny we're talking about the day of the Pope's encyclical. So a Catholic priest walked into the war-torn Basque region after the Spanish Civil War. So there's not the setup for a joke. It's not like a priest walking to a bar.

He actually went there. And instead of like preaching, you know, just comforting people who are being devastated, he had this vision for a new kind of economic reality where workers would be empowered to learn a trade and to control their own destiny. And to make a very long story short, he started to create this network of worker cooperating. where the workers themselves own the means of production and they build all kinds. They started with like industrial equipment and now make all kinds of stuff. And if you zoom out today, Mondra Khan is this gigantic company that employs 90,000 people in Europe, one of Spain's largest companies, makes elevators and have a grocery store chain and all kinds.

If you look at it from the outside, you say, oh, that's like a fully diversified industrial conglomerate. Makes sense. Like making a lot of money. That's perfectly sensible. But if you zoom in, there's nothing about Mondragon that actually resembles a typical for-profit corporation at all. It is a network of, I think, 80 or 90 of these independent worker cooperatives that work together. They have like a Congress where they send representatives and they self-govern. And any of the cooperatives can leave the network if they don't get benefit from the central services that it provides.

So this is an example of what I call a mission-locked constellation, which is a set of entities that when you zoom out, the customer, the investor, anyone from the outside perceives it as one thing, but it's actually many things. Now, be honest, if I pitched you, this is my business plan, that I was going to create 90,000 person network of 80,

like, if I pitched it to you, wouldn't you say it was impossible? Well, that's my question. I should never work. Yeah, I would say, it's not that it could never work, it would just be extremely hard to reproduce.

Like, I think if you got to, really talented group of people and you tried to rebuild something like this, even knowing all of the mistakes and challenges that this last one had, it would still be very difficult and probably end in failure. But it's clearly possible. Well, the fact that it exists obviously proves that it's possible. But I think most people, when they're thinking about how to start a company, like just have a very narrow view of what can be done. Cooperatives, I don't have the stat in front of me. Like millions of people worldwide.

like this is not some like weirdo niche thing it's actually like it's a tool that we can use now in the book i try to go through all the different ways you can create mission lock and this is one of the rye i yeah you guys are a huge vanguard episode like rye i i guess i guess my i guess my question with it is that uh so i i i agree with you like you got me if if somebody came to me and pitched me that i'd be like ah that's too complicated that doesn't pattern match to like the usual series a Like, I don't get it. I'm out. Right.

But is that why we don't have an American Mondragon in the modern era? You know, like, why is there no, why aren't there as many, like, you know, Mondragon style counterparts to the monolithic, traditional founder-led companies? Because I've heard people pitch this as like America would be better if we had more co-op networked, like Mondragon style entities. and my initial pushback has always been like, well, it's a free country. Like, I don't know that that's illegal. I think it's legal.

I think you could just go do it if you wanted to. So is it that people don't want to, or is it that, like, Jeff Bezos is secretly out there, like, killing people who want to try to start the Mondragon of Amazon and, like, compete with them? Like, what's going on? That's a really good question. And, like, so, for example, so credit unions, credit unions are the closest thing we have in the U.S.

It serves like, I think it's like 40% of American households have an account of credit union. So they're pretty big. They're all not, you know, they're not. for-profit member on financial institutions and the fact that they exist holds big banks accountable in really interesting way. So that's like maybe the closest. The point that I was trying to make in this book is not so much that we need to copy Mondragon or any particular company, but rather collectively these were called alternative structures control something like 5% of world GDP. Yeah. So I don't want to convince anybody to do anything. But for founders that want to attempt

something like this, most of them have never been given the permission to even try. They even You talk to most lawyers, bankers, and you just say, I'm thinking about doing this. They're always like, oh, honey, that's so sweet that you're concerned about mission. How about Delaware C-Corp with a safe? Why don't you worry about getting your first customer? Yeah, right, exactly. Just go focus on this other stuff. One of the most important ideas in the book is this principle I call it's always too early until it's too late.

So what happens is you talk to all these advisors and like, oh, it's too early. They're so condescending about it too. Like, don't worry about that. And then one day, I've actually been in the room where the CEOs like talking to their CFO and bank and G.C. and everybody there and being like, hey, whatever happened to that, like, mission protective provision thing that Eric was talking about, did we ever get around to doing that? And they're like, oh, you were serious about that? Yeah, I told you to do it. You said it was too early.

Like, yeah, now it's too late. When was it the right time? That's wild. Yeah, you should have said something, man. Like, I did say. So I just feel like that has become the way that this has done. And it's why so many founders lose control. Japanese Kratus.

alternative? Do they fit in the category of alternative structures? Are they good? Are they bad? Like, I only know about them from the very highest level. Tell me, I imagine you've interrogated them more. Do they fit it? And is big tech emerging into Kretzoo? Like Google owns Anthropic and SpaceX and Microsoft owns Open AI. Like, we're sort of maybe walking our- Yeah, we're maybe walking our way into a K-retz-su. I don't know. Let's see after the financial engineering recedes. Yeah, yeah, yeah. Who owns what's going on, you know?

The accounts while in fieldway. Yeah, I got into the, I originally got into all this from studying Toyota. Remember, lean startup comes from lean manufacturer. Yep. And it's really funny. I can remember when I first was going around, just like when we met 2012 talking about lean startup, people would sometimes be like, hey, you're telling us to create the next Toyota, but you're also telling us to build a venture-back company and take it public.

Yeah. Like WTF, like I thought public markets are super short-term. but if you read any books about Toyota, they're super long term. So I actually like spent a lot of time on that question of like, have we just grandfathered Toyota into the modern economy? But even when I was in Japan, I remember people talking to me about we don't even create them anymore. Like we have these legacy companies that have this really unique cool structure that are kind of a hybrid of public and family run. Like it's a little bit in between both.

I think if you look at the data, these structures only work if the company in question has a really strong ethos to accomplish something other than making money. That really is like, that's what you see, like, that's what unites everybody from like these, like, really progressive companies we've been talking about to Elon to everybody. If you have a larger vision that is long-term in nature that is like trying to, to, whether there's something really lofty, like I want to fix climate change or I want to go multi-planetary or something really simple, like I just want to create high-quality products. No matter what it is, if you have that vision, you are a business revolutionary, whether you know it or not, whether you admit it or not, because the economic system we have has been designed to dissoned. destroy these companies to suck the marrow out of them because they're too weak to stand up for themselves. So if you look at the historical examples, whether they're talking about Mondragon or the Karetsu or all these different structures, like, they're only good if the thing they're protecting is good. So the question for me is like as founders, as investors, as leaders, as board members, like,

how can we create more and more and more of these companies that have a real long-term mission, that are what I call mission-driven, not just like mission hopeful? And when you do that, you see this like really counterintuitive. economic benefits that you get. So it's like you also get moral and ethical benefits too, you know, like, but that's not even really the reason to do it. You can do it just on the basis of the economic argument alone. Do you think that AI will force companies where it was otherwise maybe too late to maybe

over time, you know, sort of massively sort of rework any of any of their corporate structures? I mean, the example I'm thinking of that is notable recently is Samsung had 48,000. thousand workers basically say, like, give us a much greater share of, you know, AI-driven profits or we're not going to work anymore and started a, you know, pretty big negotiation. I could see over time that happening at more companies, specifically ones that are, you know, facing disruption due to artificial intelligence. Yeah, there's just, Two things I think that are pushing in that direction. The first is the data on employee ownership creating commercial advantage is actually really

strong. So I didn't know this. I was always a big, you know, everyone at Silicon Valley, like we're into employee ownership, but I didn't know it was like an ideological thing. I thought it was just good practice. Actually, we have really good data. There was a big meta study of like 55,000 companies with various levels of employee ownership.

And they found that employee ownership exhibits dose response. Like 10% ownership is better than zero, 50% is better than 10, 100% is better than 10, 100% is better than 50, not just in terms of employee welfare, but in terms of commercial success of the company, revenue growth, stuff like that. The second thing is, I really think AI is going to make collective action problems, like, very different, very different than it was before. So, for example, an old Toyota production system piece of wisdom was that if you're doing a lean transformation, taking cost out of a business, it's not ethical, nor is it effective to ask the workers themselves to contribute to their own firing. Like, nobody wants that. So,

so they're going to sabotage the effort, but also it's just not right. It's just fundamentally not right. You should take the savings you're getting from whatever the thing is and use it to grow the business. Like if all these CEOs who are like, like I'm getting a heart on for laying people off using AI, like if they were serious about how powerful they think AI, they'd be trying to use it to gain competitive advantage. Like I call BS on that whole thing. So I think you're going to see a lot of companies who actually sincerely believe in this possibility

realize that we have to enlist our employees in it. This is existential for our business. We're going out of business if we don't do it. We need to be allies with labor to get it done together. I think that alliance is going to be far more powerful than what we currently teach, the way we teach leadership today, which is this very zero-sum game thing. What he's called shareholder primacy is really the idea that companies should treat their employees and their customers like a resource to be mined. My favorite quotes in the book is, if you'll indulge me, there's a Wall Street analyst that was criticizing Costco. He said something like, Costco takes money that rightfully belongs.

to shareholders and instead invested in improving the customer experience. That's supposed to be a criticism. What are we doing here? That's how you get $1.50. My favorite, my favorite bit in here from Costco is I'd heard this quote before. I thought it was just a meme, but from Costco CEO, Jim, is it Senegal? Senegal, yeah. If you raise the effing hot dog price, I will kill you.

Figure it out to then CEO, Craig Jones. Lennick in 2008. I seen that quote before. I thought it was just a joke, but I guess he actually said it, which is remarkable. No, he actually said it. And in fact,

he said that and another quote, which is he said that if Costco raised the price of a dollar bottle of ketchup by three cents, they would sell the exact same number of ketchup, rather than no one would notice. They did that across the whole store, 3% across the board raising prices. They would increase their net income by 50%

and not lose any sales. So why don't they? He says it's like the business equivalent of taking heroin. You do it once and then you got to do it again and again. And again, next to you know, you're not the no place leader. Low prices are the easy way. Now that quote and the hot dog quote versus long term. There are memes online and I was like so worried that I was going to quote him incorrectly

that I actually contacted Costco PR and they put me on the phone with them. They put me on the phone with him. I was like, is this really true? This really has confirmed it to me. He confirmed it to me personally. So yeah, I think this like very distinct. countercultural way that they have run that company now for 40 years, the $1.50 hot dog and everything. What's interesting to me is when I tell people that story about the hot dog, nobody ever says,

like, how come the COO was trying to raise the price? Because of course he was. Like, we've all been trained. If you can get away with screwing people over, you always do it no matter what. You raise margins. Margins are a source of strength. But Costco is, I think, built on a very different philosophy, which is that margins can be a source of weakness. Jeff Bezos, understood it. He used to always say, your margin is my opportunity. So when you are too, you're making too much money when you are being too extractive, you're actually harming your competitive position in the long run. And the fact that we're consistently incentivizing that all across our economy is, I think, a bit of a travesty. There was a recent story. Everlane was

acquired by Sheen. Everlane, you know, Darling of Silicon Valley, you know, raised a bunch of venture, very strong mission, ultimately to get swallowed up by the beast that it sought to displace. Michael, the founder, his buddy mine, he seems very fired up. There was a leak earlier today that he's working on something new in apparel. What is your kind of general advice to somebody that wants a mission, a company to have mission primacy? Like, what is kind of the, there's no Stripe Atlas equivalent today. you can't just go press a button and make one of these.

But how does somebody get started? I'm working on it. I'm working on it. Obviously, check on the book. The book has a QR code actually that has a really detailed implementation guide. And we have like an incorruptible term sheet, all kinds of like legal docs, the whole thing, if you want to, for those that want to do that. But for your friend and for so many people who've been through this, I've personally counseled. I can't tell you how many mission driven founders who get betrayed. The company gets destroyed.

They get ousted. whatever. And you talk to them afterwards. I just had this conversation with Whole Foods John Mackie. I tell a bunch of stories in the book of people who've been through this. And you ask them about it and they really take it personally. They're like, I fail. This happened to me. I should have tried to trust the right people. I tell a story in the book of a founder who on their deathbed was like, I just didn't trust the right people, put the wrong people on my board. We personalize it, which means we keep the structural causes invisible. We don't see how it's not personal. This is a force that is dragging us down.

So I tell the story even of a really close friend of mine, great entrepreneur who was just tragically ousted by his employees onto a new mission-driven company. I remember asking him, dude, on the new company, what are you doing differently by way of governance? And he was like, like what? He didn't even occur to him that there was like any possibility that the new company could have a different outcome. So for your friend, there's two things we got to do, okay?

Just two. One is what I call the path of ethos. We have to build a company operationally to stand for something. The Great Salt Price, the father of modern retail, the progenitor behind Costco. He called this being a fiduciary to the customer. Who would you rather die than betray? Write it down. Make that the operating system of the company in its management structure,

its business model, and its culture. The second thing we have to do is what I call a path of integrity. We have to create companies that are capable of making and keeping promises, like that have structural integrity. So they don't give in to inner temptation. They cannot be bullied from the outside. You're trying to buy them. They can say F you.

If you try to incentivize them to do some bad things, they have the structural strength to resist. And that's where things like PPC, board mission pledge, the long-term benefit trust, like that's where many of the kind of so-called governance structural best practices that we currently are taught have to go by the wayside. When you have that special formula of ethos plus integrity, you have a company that is, wait for it.

Incorruptible. Woo! Sound good. I'm here. Hit the gone. This is great timing. That is what I love to be. I was talking to a founder yesterday.

I was giving them advice and they're with an idea that a lot of people have raised venture to do in the same way Bezos talks about your margin is my opportunity. I was telling this founder like your competitors raising venture is your opportunity because they're going to have to do a bunch of things that aren't. really aligned to what would make the product great for customers or what would make the product that you really want. And what I like about this approach is setting things up in a way that a lot of the problems that you're talking about are problems where you have other shareholders and there's other people that have a stake in what you're doing. And that's most businesses will end up that way over time. But if you can find a way to create a corporate structure that mimics the found, this insane mission-driven founder and allow that, that, you know, the entity to maintain that

even after the founder is gone, this sort of permanent structure. I think it will be incredibly powerful. So thank you for coming on. Oh, thank you. Thank you for saying that. I will say, you know, obviously you've heard I believe in feedback. I really like it. It's kind of my thing. Anyway, so I had a lot of people test read the book, you know, maybe 600 people generated something like 10,000 comments. It's like I really, I eat my own dog, but, you know. And the thing I'm the most proud of of that set of people is I think we're up to five or six of them now. It's like, well, coming up on 1% of the people who read the book so far have reached out to me to say that they had a new business idea that they wouldn't even consider before because they were able to use this framework to see new opportunities to make a profit that they just were blind to before. And a bunch of them have that just the thing you were talking about a second ago, like that there's some category where everybody hates all the vendors because they're all like they're all A-holes.

They're all extractive jurors. Yeah, yeah. What if we had a category? What if we had a company that competed by being trustworthy to companies? You're seeing that obviously in AI, but you see that in so many categories where it's like, oh, that's actually very simple to make a business like that if you take this idea seriously from the beginning. Anyway, very excited to be here on launch day with you guys. What else do you but TV cam to get the word out about? Congratulations.

Thank you so much for coming in the show. This is fantastic. Hopefully we can talk soon. We'll see you. Goodbye. Alex Atala has some news. We're seeing a Cambrian explosion of AI models, and it's happening on OpenRouter. The future of AI is neurodiversity, agents choosing the most cost-effective model provider tool for the task.

He's back. And he's back. Welcome to the show. How are you doing? Doing well. Thanks for having me back. You've been very busy. Been busy.

Give us the news. What happened? So we actually raised this round back in February. But we... We got a C from capital G. as the lead and our existing investors participating in a lot of strategics from different corporate VCs participating too, like Nvidia, ServiceNow, data bricks, and a bunch more. And we're growing the team. So, you know, not only do we believe in neurodiversity is a good thing

that every company will need to leverage, but also like neurodiversity within our team as well. So if you're smart and you are get things done and you are, you think in a unique way, we want you. How much did you raise? We raised 113 million. Now let's talk about ROI. You're obviously pushing tons of tokens. People need to measure the ROI on these tokens. How have you been processing like the next KPI? Like there's this back and forth with Uber. I'm sure you've seen this where they started token maxing. They're pushing tons of tokens through. Now, now. they got to see what did we get done? How are you actually talking to people about cost optimization, ROI? Like, what are you hearing around the value that people get? Where are the best use cases? What are the places where you're telling people, hey, you might have gone too far

on the token maxing that way? Yeah, there's a really important trend that we're observing among all of our customers. Sometimes you just don't need Uber black, but you're getting it all the time. because you just don't know what else to do. There was a time where everybody was in the pre-product market fit phase for leveraging AI for their needs. And now many companies are past that phase. And they're realizing that most of their OPEX is going to inference.

And that's pretty insane. That means that if you make cost-cutting decisions and if you optimize your model usage, that directly flows to your margin. And now the business is directly more efficient. This is not, you know, like optimizing your data dog bill. Sure. So I think the future is going to be multi-model for many reasons.

And that's a big one today. And it's a big one this coming year. And there are a lot of companies who are also just doing one task that should be broken up into multiple tasks. Yes. Served by specific lower-cost models. And they're getting massive cost savings out of it. in addition to improving their recall and accuracy. So it's really important to do.

And then down the road, another use case will be getting better than state of the art performance by using multiple models. And that's like we're also helping our customers with. Like a mixture of models, like ask the same question in multiple models, synthesize the results. Orchestrating multiple models that were trained by completely different companies to do something for you. And then using a judge or some other set of heuristics. to select the best result or combine them together.

Can you talk about opportunities or entrepreneurs or small operations that are bringing compute to bear on open router? I saw George Hatz talking about. He found some building that had a bunch of power. He was going to rack a bunch of Nvidia GPUs in there and sell the tokens on open router. I think everyone's familiar with what the hyperscalers are doing. People are familiar with what the Neo Clouds are doing.

But how diverse is the compute supply on OpenRouter these days? What is a small shop look like in the modern era? Good question. A lot of people think that basically everybody's just using one model, and that's completely untrue. We have about 350 models that are being used by hundreds of active users per day. And while... And the token diversity is growing over time. If you go to our rankings page, we have a chart that just shows the graph getting more and more diverse.

We're doing about 120 trillion tokens per month now. So there's diversity on model selection, but there's also a ton of diversity in providers for specific models. It used to be the case that being a provider is just really hard because how do you get distribution? even if you decide to specialize in like very, very, very low cost, but slow imprint. So stuff that's like optimized for batch agentic workloads. How are people going to discover it? So we're building all these skews in the marketplace so that providers can find a market really, really quickly.

And so we become the go-to-market strategy for the long tail of providers. We've built an enormous number of tools. to do quality checks and rigorously test these providers on the skews that they aim to support. And then we send them back all this reporting so they can really easily optimize their inference and get better and better over time. Predictions for American open source. I think American open source will become a mixture of taking existing models. some of them, some of them might be foreign, might be Chinese, and improving them, and then creating a, like, new models from a new foundation. And it's hard to make a prediction.

It remains to be seen because we're just seeing so much adoption right now from foreign open source models and domestic close source models. I think the best thing the American open source models have to leverage is some enterprise demand that really wants only American open source models. They're American companies, and they're aiming at it directly. So we provide easy ways of exploring the model providers on open router by their family type. So you can easily look at which models follow a specific family and only filter down to those. And we do want to help model labs that are like trying to aim for some kind of niche use case in the market or some kind of niche demand in the market. Find that market. It's really hard to discover otherwise.

How are you thinking about personal AI routing? Obviously with companies, you have this very economic calculation around OPEX and, you have. There's an agentic workflow that's running for every customer. So millions of times worth squeezing every cent out of the, out of the equation. But we are also seeing growth in OpenClaw Hermes, like these personal agents. There will be some closed source providers there. But memory feels like an important piece of the personal agent puzzle. A lot of that can be offloaded to the context window, to MD files.

is, do you expect the shape or the cost constraints to be any different in sort of personal AI or consumer AI versus Enterprise? Yeah, I think, I mean, this is not going to be that big of a surprise, but local context is the number one difference that we've seen over the last year. If you build an agent that can really leverage the full computer, it works very well for personal AI use cases. And that's because people have a personal computer. What's interesting is that there isn't something that works on the phone very well, even though a lot of contacts is stuck on your phone. So we may see a cool personal agent develop in that direction. What's also interesting is that we don't have something very social yet.

There isn't something that pulls your social media data and like leans into that part of a person's life. So I'm curious we'll see something there. And we've also seen like shockingly few games, I think. And there may be like a really good opportunity for something that looks like a game, but turns out to be much more. How big can OpenRouter become? I mean, we want, we really believe that the, like, everybody in the future will want to use multiple models in the same way that like, even if you could hire a 250 IQ, your chief of state,

staff, but you had the option of hiring five instead for the same, if not lower cost, you would go for five because, like, you know, the five people are just going to be like significantly more likely to flag issues that one person would have missed. And not only that, but, you know, it helps you cost-optimized significantly. You don't need Uber Black all the time. So inference, I think, will be the largest software. market, potentially the largest market in the economy. All knowledge work will need to leverage it. Otherwise, you're just handicapping yourself dramatically. And open router aims to be a very large

chunk of that. We do help the model labs, like find customers as well, and we work symbiotically with them. And same with our providers. So a lot of open routers about building like things that enterprises need. When you bundle a bunch of models together, immediately you realize that there are all these boundaries between models that you have to secure and observe and manage the costs. And so OpenRouter is a really good way

of managing and securing the boundaries between models and between server tools. So we're building a bunch of new agentic tools that you'll see in the coming months that help do this, both for enterprises and for individual devs. What are your scaling challenges? Are you CPU constrained?

We are memory constrained, I think, first on a, you know, like server memory. Yeah. And I don't think we're CPU constrained quite yet, but memory is. But uptime is particularly important for you, I imagine. But there are probably other other considerations around, you know, multisprudely. cloud availability, interactions with different geolocations, and being, like, you have a different set of optimization parameters from other companies. Yeah.

So we, that was the first problem we aim to solve. It's like, given a large set of providers for a given model, how do we really perfect the router to, like, send you to the model that will be up? as quickly as possible, and send you the provider that can best serve the parameters requested. So we've been doing pretty well there, but we can do even better, and it will get better soon. We do a lot of internal benchmarking against the rest of the market, against going direct providers, and so we can kind of track progress and hill climb internally. I think what becomes like a real constraint for us is like brand new models that don't have much capacity because only one provider is serving them.

You know, there isn't a ton of, sometimes we host the model ourselves or we work with a provider to do it. And sometimes we just tell other providers, like all the market signals that we're seeing and be like, guys, you should host this model. like look you know there's in this region of the world there's like this going on and we you know we we we blast this out and that sometimes solves the problem mm-hmm jordan anything else no congratulations i'm very bullish and thank you so much for taking the time to come chat with us thank you to be back have a great rest of your day congrats to the team we'll talk to you soon cheers goodbye well we have some words of wisdom to end on you can lead a horse to baha but you can't make it blast. These are wise words. Make sure. I'm angry that we didn't think of that. We've talked a lot

about Baja blasting. If you're in a code red, when you finish the code red, you got a Baja blast. You got to make sure that that part leaks out. But we never thought of you can lead a horse to Baja, but you can't make a blast. Also, Michael Tim's ran into some problems here. He said he's been trying the whole two grams of creatine per one pound of body weight thing for a month now, He's never felt worse. How do you guys do it? It's also like $1,000 a week at creatine. Hilarious.

Also, it's supposed to be, what is it? One gram per body, per pound of body weight for protein, I think is the joke. But two grams of creatine. What's a normal creatine to do? It's five grams, right? Five grams a day, maybe 10 grams a day. About one, one hundredth of what he was doing in this joke, of course. Anyway, anything else we need to.

We will be off tomorrow. And Thursday, we have a short week. We'll be back on Friday. We are heading to New York for some business trips. I asked chat Chabutee for a phrase like, you can lead a horse to Bob, but you can't make it blast. And it said, you can lead a horse to Taco Bell, but you can't make it live moss.

It's terrible, but kind of good. I'm funny. Anyway, well, folks. Thank you so much for tuning in. It's been an honor. We hope you have an amazing rest of your Tuesday. We'll see on Friday. It feels like a Monday.

Leave us five stars on Apple Podcasts in Spotify. Send up for a newsletter at tbpn.com. We'll see you on Friday. Goodbye. Cheers.