TBPN Live - Inside Josh Kushner's Rise, 𝕏 Timeline Reactions | Andrew Ross Sorkin, Brian Potter, Pari Singh, Henri Stern

Episode Date: October 14, 2025

(00:50) - 𝕏 Timeline Reactions (31:54) - Inside Thrive Capital's Rise (52:32) - 𝕏 Timeline Reactions (01:13:50) - Henri Stern, co-founder of Privy, discusses the company's recent acquisition by Stripe, emphasizing the shared vision of integrating crypto and fiat systems to make digital assets more accessible. He highlights the importance of seamless user experiences in crypto products, noting that wallets should be fast and tailored to different user needs, such as neobank clients or gamers. Stern also touches on the growing institutional adoption of crypto, mentioning collaborations with major financial institutions to enable global payments and stablecoin-based payroll systems. (01:37:27) - 𝕏 Timeline Reactions (02:00:07) - Andrew Ross Sorkin, a financial journalist and author, discusses his new book "1929," which examines the events leading up to the Great Depression and draws parallels to today's financial landscape. He highlights the role of figures like Charlie Mitchell and Carter Glass, and the speculative behaviors that contributed to the 1929 crash. Sorkin also reflects on the challenges of writing the book, including extensive research and the use of technology to access historical documents. (02:30:02) - Brian Potter, a senior infrastructure fellow at the Institute for Progress and author of "The Origins of Efficiency," discusses his background in structural engineering and his experience at Katerra, a construction startup that aimed to revolutionize the industry through factory-built methods but ultimately failed. He explores the challenges in improving construction efficiency, highlighting obstacles such as the difficulty in achieving economies of scale, reducing input costs, and overcoming regulatory constraints. Potter emphasizes that while other industries have successfully enhanced efficiency through various strategies, the construction sector faces unique barriers that hinder similar progress. (02:49:48) - Pari Singh, founder and CEO of Flow Engineering, discusses his company's mission to revolutionize hardware development by applying agile software practices to complex hardware design. He shares that Flow Engineering, originally a rocket engine design firm, developed an internal platform enabling rapid design iterations, which evolved into their current product. Singh also announces a $23 million Series A funding round led by Sequoia Capital, emphasizing their focus on next-generation aerospace and defense companies over traditional industry giants. TBPN.com is made possible by: Ramp - https://ramp.comFigma - https://figma.comVanta - https://vanta.comLinear - https://linear.appEight Sleep - https://eightsleep.com/tbpnWander - https://wander.com/tbpnPublic - https://public.comAdQuick - https://adquick.comBezel - https://getbezel.com Numeral - https://www.numeralhq.comPolymarket - https://polymarket.comAttio - https://attio.com/tbpnFin - https://fin.ai/tbpnGraphite - https://graphite.devRestream - https://restream.ioProfound - https://tryprofound.comJulius AI - https://julius.aiturbopuffer - https://turbopuffer.comfal - https://fal.aiPrivy - https://www.privy.ioCognition - https://cognition.aiGemini - https://gemini.google.comFollow 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

You're watching Christmas TV. We are cozy maxing. It's rainy in Hollywood today and we decided to put on the fireplace, make the light a little bit warmer, kind of enjoy the warmth. And you know, I genuinely get depressed when it rains. Like it actually affects my mood, but putting on some warm lighting, a nice hearth, really has changed my mood and I'm having a great time. I'm having a great time today already.

And so if it's a little bit cold wherever you are, I highly recommend throwing on the fireplace. If you can get real logs, that's great. If not, you can get a projector. 90-inch projector works too, I guess. But it is Tuesday, October 14th, 2025. We are live from the TBPN Ultradome, the Temple of Technology, the Fortures of Finance, the capital capital. So today we got to talk about Zumer. Zumer Gate.

Zumer is a loved poster on this show. We've highlighted his post many times. is a deranged trader who has a lot of fun. He was heavily promoting the use of leverage right up until Liberation Day 2, Friday. Then he got wiped? Did he get wiped? I don't know. I don't know.

He's been big into Chinese equities. Either way, he's been having fun on the timeline, posting a lot. He says, say hello to 50x leverage. More like say hello to God. Nobody is an atheist with 50x leverage. I love that no matter how much pushback he gets, how much he's. Yeah, how much he just doubles down. He just doubles down.

Yeah. Doubles down. Well, Zumer, if you're going to be risking it all, you've got to save time, you got to save money, you've got to go to ramp.com. Easy to use corporate cards, bail payments, accounting, a whole lot more, all in one place. Zoomers had a number of posts do very well recently, like mega, mega viral, totally breaking containment, defining what's going on on the internet that day. And Zumer says, my tweet about Steve Jobs almost, about Eve Jobs almost outperformed, the actual Eve's Jobs tweet, Eve Jobs tweet, Lowell. And so he's been going viral for posting Steve Jobs' daughter, a picture of her, and then posting meta-commentary about how much he got paid

to make that post. It was a very odd back and forth. And it's frustrated a lot of people. But I have a hot take. We're going to break it down. We'll discuss it. And so Zoomer, it all comes down to like, what is the value of your account? Zumer went to some website and said, my Twitter account is estimated to be worth $3 million. And that's not what accounts trade for. That's not how that works. But I mean, certainly a great account. In my experience, Twitter accounts are basically worthless,

except for the person that creates it. Yes. And then it's, and then it has some intangible value. It can increase the value of whatever you're working on, whatever the work it is that you do. Yeah. And that's sort of true across the board, across all social media accounts, especially if it's tied to an individual person or personality,

but even the large YouTube accounts that have more of a corporate brand, like I'm thinking of like donut media, for example, like that was eventually bought by private equity and some of the talent rolled off and then they changed, they changed hands. Like it's still like hard to just build a single account on a social media platform into like the millions of dollars. Like it's certainly not easy. But we do love Zumer and we're wishing him the best during this tumultuous time, because everyone's going back and forth. Yeah, I think people take, are overly serious when he is, when I view him as an entertainer. Exactly.

Somebody at a dive bar that's getting a little wild. Yep. But it adds to the experience. Yeah, I completely agree. I've always thought of Twitter as the Internet's dive bar. You know, the drinks have always been cheap. The faucet in the bathroom's always broken. Maybe that's the fail whale.

The whole bar is unreliable. It might be open late one night and closed early. When you expect it to be. It's changed ownership multiple times. It's just a very, you know, it's not as polished as, you know, a Michelin Star restaurant or a luxury resort that you might see on other parts of the internet. It's a little bit messy.

But that's why people love it. And that's why people keep coming back at the end of the day. You grab your little table in the corner. Maybe that's basketball Twitter, teapot, or, whatever car, Twitter, you know, whatever your little group is, you huddle up and, you know, maybe you get in a fight with some other table for a little bit. Bar fights are going to break out, but at the end of the day, you keep coming back. And so I've kept coming back through multiple eras of Twitter is done or X is over. You know, there was the whole narrative like,

Elon won't be able to keep the servers online. He couldn't possibly run a website. With only a thousand people. With only a thousand people. And it's like, this guy sends rockets to space and build electric cars. Like, I'm pretty sure you can, like, get the database working. Okay. So I never bought that. But there were a number of, like, the advertisers are pulling out or the algorithm is bad.

And the algorithm has been bad at various times. There's been plenty of moments where I've been like, man, I'm seeing a lot of just, like, generic junk. But what's interesting is that right now people are, like, the most mad they've ever been at X, I feel like. That's kind of the mood. But I feel like the algorithm's been super fine-tuned. And maybe that's just the way I'm using it.

I'm really good about, like, muting. Well, one of the reason, one of the reason that people are mad right now is the dive bar basically got a new manager, head of product, Nikita, who was a power user of the platform for years. Power drinker. Power at the bar. Power boozer. He was hitting half the hour.

He was a regular. And he was closing it out. He was closing it out. And he's been making a number of different changes. One that he posted about that I was excited about was potentially bringing links back in some capacity. he also did the little there's little growth hacks that he's done where I've been like that's totally fine like when you take a screenshot it replaces the follow button with the x.com

just to remind people hey this originally appeared on X if you're going to share it to Instagram go to ax.com and I think that type of growth hack is like fine like it doesn't bother me at all it's like yeah they they need to get their users up I want more people on the platform like I'm fine with that and there's been a number of things like that where I've been like yeah it seems like he's he's making positive progress on the product side But the creator payouts are still really hot, like very, very hotly debated, unclear where it goes. Not among us.

We would be down to kill them entirely. Yeah. And what's crazy is that I mean, I don't know if I got on. So Twitter launched in July of 2006. I'm pretty sure I got on like a year later. Because I went to college where Biz Stone went to college, one of the founders of Twitter. And that was one of the reasons I went to that college

was because I was interested. And I was like, oh, Twitter's a cool company. April 2009. was when you got on? When I joined. Okay, yeah. But still. Sophomore year of college or something like that?

Very early. But for 17 straight years, basically everyone on the platform posted for free, I guess for, you know, 13 years for me. I posted for free. July, 2020, 23, 17 years later, that's when the first creator revenue sharing program rolled out. And what's interesting is that YouTube has been making creator payout since 2007,

just one year after Twitter launched YouTube, was like, we got to pay these people. We got to pay our creators. And they did this like basically 50-50 deals, like 45, 55. But YouTube, the partner program has been a huge success. Basically, you make no money when you're small. But if you can get to a couple hundred thousand subscribers,

a couple hundred thousand views on a video regularly, you have a formula, you have an audience for like, I talk about this and thing for 10, 20 minutes. People watch it regularly every week. Like, you can quickly start making thousands of dollars and like turn it into a real job. And then you can layer ads on top, which are obviously intimately familiar with.

because you've been on the other side of that. And there is basically like a middle class of like professional, not Mr. Beast level 100 person organizations, but just like a creator, maybe they have one editor, a couple editors, and they make a decent living, just,

you know, making YouTube videos. X has never really had that. And it's odd because like the amount of money that you put into a YouTube video is correlated with how many views it gets. Like if you're like, I'm giving away a Lamborghini. I'm going to drive a Lamborghini.

I'm whistling diesel. I destroyed a Lamborghini. You're like, I got to click that. It gets a lot of views. But on X, you can just have a shower thought that is the most brilliant, hilarious, funny, bang or take, and it will get 100 million views. For me, I'm not very consistent with posting. I'll just decide I'm going to post today.

And then I can put up numbers. Posts that will get, I don't know, I could think I could reliably get 500,000 impressions by just spending like 20, 30 minutes really focused on it. Yep. Whereas trying to sit down for 20, 30 minutes and try. to make a YouTube video that gets 500,000 views, almost impossible. Almost impossible. Even for the top, top, top creators.

Totally, totally. Unless you're like Mr. Beast and you can actually at the scale where you could post a selfie video, but even then, that's not what drives his business. Yeah, yeah, yeah, exactly. And so there's this, and then we all, and the other thing that's worth noting is, like, there's totally precedent to have a thriving social media platform that doesn't do any creator payouts at all. And that is Instagram, right?

Yeah, totally. Instagram has never, I mean, I shouldn't say never, because they've experimented with little things over the years. They did some AI companion type thing to celebrities. I'm sure they paid them in those situations. But in general, there's always been an incentive to grow an Instagram following so that you could grow a business or partner with brands. There was just a number of ways that you could monetize it indirectly. And I think that that is for low effort platforms, a much healthier way, low effort content creation platforms. It's a much healthier to have the incentive be like you have to you have to become somebody that is valuable to the world not just

you have to post the thing that the thread that gets five million impressions right and and the worst of the content that I've seen since the monetization era of X has been the why is no one talking about Mark Andreessen yeah and it's like a thread and it's like cool yeah but but we everybody's talking about Mark and like find somebody on X in tech that doesn't have an opinion on Mark Andreessen. It's hard to find him. And so I think it was healthy. I think if you look back to when this era kicked off, though, I mean, the vibes on X were just terrible. The public perception of X was terrible. And I think it made sense for Elon in that moment to say, like, we need to kind of like rally the army. I'm going to start paying you guys

out, but you need to ride with me, this tumultuous. was time. But it feels like we're back in an era where if you turn creator monetization off today, none of my top 50 favorite posters would really care. They'd be like, ah, it's kind of a bummer. I was making a few grand a month. And I'd use that to, I don't know. But more like a couple hundred bucks for a lot of the posters that I follow. Like, there's a few people that are in that thousand plus club, but it is rare. Like you have to be, you have to be taking it pretty seriously. But, yeah, I mean, in general, for 17 years, no one got paid directly on Twitter. And they were fine with it.

They monetized by recruiting or finding jobs or pumping their company or just pumping their bags. Like, there were a bunch of ways to monetize. One of the ways that we monetized by running ads. Restream.com. We also stream 2x through re-stream, one live stream, 30 plus destinations, multi-stream and reach your audience, wherever they are. There's also going back to like the Instagram thing with TikTok, they did TikTok and musically, they did figure out. I'm looking back through my creator payout history

and it's so funny that the dates are always different it's like oh yeah yeah it's not like on the first and 15 okay I'm getting a payout for four days here

and then the next I'm getting it for two weeks and then after that it's like one week and it's just like completely random so I go from making yeah I guess

I don't know I probably I've averaged like roughly probably like 400 $800 per period or whatever, so like $800 a month. Yeah. But it's just one of those things like at no point was I thinking I want to post more because I'm going to get paid more.

Yeah. It's just not the incentive for me to use a platform. Yeah. So, I mean, it's interesting to look at the history of like how TikTok did it. The founder musically came up with this idea of like the dual-sided marketplace. I'm sure YouTube was aware of this too. But basically they put a bunch of money from ads in a fund and then they would just pay you out based on views.

but it wasn't like they were actually showing ads directly in front of your content. YouTube's a lot better than that, a lot better than that. Like if you make a video, like the top 25 best credit cards, they will be running ads on credit cards in those videos. And you can make thousands of dollars just from like 10,000 views or something because it's super high CPM and it's targeted to the individual video. Now, in an endless scrolling feed, you can't do that because you don't know where the ad was relative to the particular post, and it's the same thing on X.

So if you post some banger post, and there's an ad right above it or below it, you don't know if that ad is attributable to that person. So you kind of just need to create this, you know, creator payout pool and then just divvy it up based on impressions or views, which is a lot harder to actually assess, you know, how much people want, and also the pool isn't all that big because X doesn't even advertise that much through ads. And so there's just a lot of, a lot of differences there. So I've always kind of gone back to that analogy of the dive bar. And I've just kind of thought that the creator monetization, I don't really care if it's messy. I think it's kind of fun if it's messy. I mean, we have to go

back to one of my most liked posts ever. Elon unhooking your bra. Wow, your creator payout is going to be huge next month. That's one of your biggest. The most liked. The most liked is actually Ashley St. Clair liking that post. And used in real. That's ridiculous. But yeah, I mean, I've always enjoyed that these random serendipitous moments can happen on X, like Elon responding to a random message with a crying emoji. It feels like when the chef comes out and goes around to dinner tables to chat with the guests about the food,

Elon comes around and just leaves the crying emoji over here, it feels like he's on the app. in a much different way than suck on Instagram. Yeah, that's the owner walking around. It's shot for you. Exactly. You get a round of shots for this table. Exactly, exactly. And so I actually like that.

I think it'd be very funny if Elon just dropped, you know, $1,000 on this person, $200 on this person. There was no rhyme or reason whatsoever. Chaos. I think that actually makes it kind of fun. It feels like putting a slot machine in the corner of the dive bar. You know, some patrons are just going to throw a quarter in every once a while, just to feel something.

Yeah, and I think this is where we slightly disagree. I just think it's enough to just go around, drop the like, drop a repost, because ultimately people come to X for attention. Yeah. Like learn about the world and to get attention. Exactly. Well, it'll be interesting to see if we see any, like, changes to the monetization structure of X or the creator payouts.

People are certainly, there is a big group of creators. Like, this is very real. There's a big group of creators that are just saying, like, it has to be more regular. It has to be easier to understand how the creator payouts. Like, they're pushing for a YouTube, like, transparency partner program where it's very, very clear that if you get this audience, this many views, like, you will get this much money on a regular basis.

And the other thing I think people forget is that the creator payouts were initially meant to be paid out a percentage of the subscribed paid subscribers. that paid subscriptions. That was what was creating the pool for potential payouts. And so what the accounts that are angry and generally the accounts that are angry at creator payouts are angry because they're slop farming and their content is just not good.

And they're specifically making the content to make money. It's fair game. It's capitalism. It's free market. They're allowed to go and do this. But they're not getting engagement from verified like users for the most part, right?

They're getting engagement on these posts where they get a lot of impressions and get a lot of likes but it's from like I wouldn't go so far as to say bots but it's like the lowest value people on the platform. I mean the same thing happens on YouTube. Like you can like there are channels out there

that make millions and millions of views with just complete clickbait. There was one channel that would just it was like Elon Musk news or something and they would just post entirely fake videos about Elon Musk launching an iPhone competitive. editor. And it was like the Tesla Python. It'd be like, we're reviewing it

today. We're breaking it down. Here's the phone that he launched. Elon, they did one that was like, Elon Musk just launched a nuclear reactor. It's live. He built it. It's generating power. And Elon had like never tweeted about this. And he's in fact a solar maxi. He doesn't even

like nuclear that much. And they would just put up a video being like, it would just be B-roll of Elon, like moving around, dancing, talking. And then over it, they would just have like this fake script saying that Elon had shipped a nuclear reactor and solved fusion or whatever. And it would get millions and millions of views

with people who just like did not understand the truth or anything of the news. And so of course that's going to monetize way, way worse. This is the number one thing that pisses us off on YouTube is when you're watching a car video and there's a suggested video and you click on it only to realize that it's like some fake concept car

that wasn't put out by Porsche or Ferrari and it's just somebody hallucinating with their chat GPT. Well, speaking of concept cars, We've got to go deeper in the deck and pull up the video, the picture from Mercedes. I think this is real. I don't think this is AI. I saw this on a couple different auto blogs.

The newly revealed Mercedes Vision iconic channels, the legendary gullwing. No way. And it's your first look at the next S class. Is that an EV? It's, I know. I think it's going to be both, but you can scroll through these images and look at this thing. Look at the back, Jordy. the back is insane. Imagine bombing around in this. Obviously, this is like a concept car,

but it's still cool and I hope it's real. No, I was right. A statement on the future of design language for Mercedes EVs. This looks like kind of Jaguar coated. A little bit. You know? Do what do you think overall? It is, yeah, it does feel like it's a little bit, it's a little bit blocky like big front grill like Jaguar, but still maybe a little little bit. This view looks better than the existing GT series. It's a little bit longer, a little bit longer. Yeah. I think it's pretty good. It's riding a little bit lower even. I think it looks great. I think the grill on the front looks a little bit nasty, but especially considering it's a concept car. It looks, yeah, it's a little wild. Whatever X chooses to build, they should do it

with cognition. The makers of Devon, the AI software engineer, crush your backlog, with your personal AI engineering team. We'd love to see it. It's not going to help right now. The Qaeda is at war. Zumer also had a post here. He said, this is going to be good. And he is quoting Colossus magazine.

Jeremy Stern has written a lengthy profile of Josh Kushner, Thrive Capital, and the American Dream. Okay. Before we get into that, I think we need to address the goon wars. Oh, sure. Sam Altman posted two hours ago. He said we made ChatGPT pretty restrictive to make sure we were being careful with mental health issues. We realized this made it less useful, enjoyable to many users who had no mental health problems,

but given the seriousness of the issue, we wanted to get this right. Now that we have been able to mitigate the serious mental health issues and have new tools. It's wild that he's just like... Jobs finished. Well, yeah, it's wild to basically say to just fully accept like, yeah, they were serious. mental health issues but bold he said we're going to be able to see more examples of the one-shotting getting in stuck in some hole so maybe they did solve that I don't know like we oh it's totally possible when these issues were popping up it's like okay this person was 7000

prompts deep yeah pretty easy to just be like if more than a thousand prompts deep send a message hey touch grass like take a breathe yeah just and just say like if you send another message which the chat will be ended. Yeah, that doesn't seem like technically complicated to implement. So Sam says in a few weeks, we plan to put out a new version of chat GPT. It allows people to have a personality that behaves more like what people liked about 4-0. If you want your chat chit to respond in a very human-like way or use a ton of emoji or act like a friend chat GPT should do it, but only if you want it, not because we are usage maxing.

In December, as we roll out age-gating more fully, and as part of our treat adult users like adults principle, we will allow even more like erotica for verified adults. And Doug over at semi-analysis says the goon wars have begun. The entire horn industry is about $100 billion, which can fund a few gigawatts. So I think that we always thought that opening I wouldn't go there, Elon and XAI would. Yeah, it was a smart, you know, this is what we said. It's very possible that GROC, if they were able to figure out the erotica product side, that they would be able to take that product to a really meaningful run rate.

Very hard to assess what percentage of GROC users or power users of the companion functionality. But either way, this kind of thing was already happening with Open AI. People were falling in love with Open AI. They were getting married to it. Not Open AI, but I got married to Open AI. No, people were proposing to chat GBT, right? People were developing serious romantic relationships with the bot. And, of course, now chat GPD.

Great, great catch. John just slid away in the swivel chair to catch. Love to see it. Well, if you want to design something that's not erotic, go to figma.com. Think bigger, build faster. Figma helps design and development. and teams build great products together, get started for free. Touch Figma, everyone.

Touch Figma, yeah. If you're 7,000 problems deep, maybe you do that in something. In other news. Yeah, what is your actual final take on this? $100 billion, that's the entire adult industry. I think that a large percentage of the people that will pay a subscription fee to chat as just everyday consumers will be people that develop, like, serious emotional connections, not necessarily adult level, but serious emotional connections.

Yeah. I mean, I, like, the steel man here is, like, treat adult users like adults principle. Like, I have not tried to generate erotica, but I've definitely gotten flagged for, like, weird reasons being like no you can't make this person into a bodybuilder or whatever for some reason like if they don't want those muscles are too big like this is horny now and I'm like no it's actually just a joke and so I I would be I would actually be happy to like kind of like age verify and just allow it to be like a little bit more lenient with me and give me like the benefit of doubt but it does seem like it does seem like the like the PR backlash from some of this stuff is

going to be a little wild, like, and there's just been so many tech companies that have just said, like, hey, yeah, like, we're just Apple famously, like, drew the line. Google is the other, the other side here is, uh, it's not like Google if you search for Bob. Google doesn't say, like, you can't search this. Sure, sure, sure. Yeah. I, I think, uh, the, like, just, just mirroring, there, there's immense power in mirroring what people are already comfortable with. morally. And so what I would do is I would just say, like, we're bringing chat GPT in line with what you expect on YouTube. Now, are there some graphic videos on YouTube of 360 no scopes with, you know, visually like distinct blood? Like, yes, there is R-rated content on YouTube. You can

watch R-rated content of a Tarantino film clip. You can watch a Call of Duty montage that is gory and maybe not suitable for children, but it's not a place for true adult content. I watched 360 no-scope compilations. When you were four? Yeah, from a young age. It made me who I am. Turn me in a man. But Instagram apparently is doing this too.

There was an article in the Wall Street Journal about this, how they're using the nomenclature from filmmaking now, saying that we will go up to PG-13, or you will be able to pick. And I feel like even though movies are like less popular than social media. Certainly on this side of the table. It's very useful to use the G, PG, PG-13, R-rated, X-rated, like, nomenclature. Just because everyone knows what that means, even though it's like I'll know it when I see it type of rating that's done by the, not the AARP. There's some governing board that literally watches every movie and says like, this is R-rated. because we heard like three cuss words and like whatever yeah i mean here's the thing when i see

this announcement i'm not entirely surprised even though i didn't think they would explicitly go there yeah i didn't think they would i think that i didn't expect to see sam type the words erotica and a product update totally post right didn't expect it makes sense from a business standpoint i don't think they should expect applause i don't think anybody should be you know i don't think open A.I. Investors are going to be sitting around being like, I'm proud that Open AI is going into this. But purely from a business standpoint, it makes sense. Yes. And the other thing is I expect that they will, the key difference between XAI and Open AI is that Open AI will not use this adult content in the promotion of ChatGBT. Right? Sure. Whereas Elon was very forward with

with promoting it. Yeah. I don't like talking about all this adult content. I like talking about compliance, automating compliance with Vanta.com, manage risk, prove trust continuously. Vantus trust management platform

is as clean as a whistle. It takes the manual work at your security and compliance process and replaces it with continuous automation. It'll make your family proud. Do you think in a year we will look back at ChachyPT as a place that's R-rated,

like euphoria level or HBO level or a succession level, like adult themes, an adult content, or like X level, like, not, not like X rated level. I mean, full adult content like you would not see on HBO beyond what's available on HBO. I'm sure it will be beyond. You think so? Yeah. Okay.

That would be a bold step because I feel like YouTube, YouTube, Apple, all of those companies have said, we'll go R-rated, but we won't go beyond. But Chad, ChbT is fundamentally a single-player experience. right it's it's uh it's it's you know some of some of the chat you take a screenshot you take a screenshot and it's their brand next to the thing that it generated it's it's it's like going to apple tv and saying like there is an adult film on apple tv right now like i take a picture of the apple tv and i show you that like it's it's in their store this kind of content pops up on all the platforms right well i i don't think so i i think that youtube and apple tv like very distinctly try and

Yeah, but like Reddit, Reddit is notorious for this, right? Yes, yeah, I would put Reddit in a different category. And so, yes, this is a decision to go more Reddit and less YouTube. And Open AI is trained heavily on Reddit, so maybe that's, makes sense. Do you think this, do you think this aligns with Open AI's mission to ensure that artificial general intelligence benefits all of humanity? Hmm. Do you think humanity will benefit from everybody having a goon bot in their pocket?

As long as every member of humanity is a shareholder, then they will profit from it, which will be good. No, I don't know. It depends. There's a ton of rough edges and, like, variability here that I'm, like, holding. Tie in the X chat says, bear market and morals. Well, in other news, Anthropic, David Sachs is going to war with Anthropic. He quoted one of Anthropics co-founders, Jack Clark, and said,

Tropic is running a sophisticated regulatory capture strategy based on fear mongering. It is principally responsible for the state regulatory frenzy that is damaging the startup ecosystem. Interesting. Not what you want to hear from the AI czar if you're running a U.S.-based foundation model lab. Yep. But we'll see how this plays out. Yeah. You want to hear about graphite if you're the AI czar.

That's right. Sacks. You've got to use this for your code review because it's the age of AI. Graphite helps teams on GitHub ship higher quality software. You can get started for free. Let's go through some of the Jared Kushner news. Josh Kushner. Josh Kushner.

Jared Kushner is also featured in here. I was reading Jared Kushner because Tyler posted sending Jared Kushner 25 books on how to prevent AI bubbles from podcast. popping, which was an absolute banger, got a thousand likes. Tyler's been on a tear, but he's not even in his chair. He's not even in his chair. He's got to cut to him before he gets back. No. Oh, he was out of his chair.

I caught him black. Hey, congrats on your fantastic. Back to back bangers. One K club, two days in a row. Don't mess it up. If it's not a three-pe, just don't show up to work. You're done. Do you feel sequel pressure now?

I mean, there is a lot of pressure on my, you know, on my shoulder. Heavy is the head that wears the crown, Tyler. Get ready. You've been on a roll. Let's see what your ex-creative. I don't know. I see a couple bangers back to back, and I think, hmm, maybe Tyler doesn't have enough on his plate.

Maybe you should get him to vibe code something. I got to hit, I think it's 5 million impressions in three months to, like I'm not available for the creator payout yet. Oh, okay. So I think I got to slop it up. Okay, yeah, yeah, yeah. Why is no one talking about I'll use? I'm never leaving this app.

I'm never, yeah. Yeah, just keep posting those. You'll definitely... Ty in the chat says if you cut to someone not on their battle station, they have to wear a part-time podcaster. Thank you, Ty. Yeah, really phoning it in today.

We're having fun. So... Yeah, let's get into this piece. Jeremy Stern profile Josh Kushner in Colossus. It released today. It's not in print yet. It's going to be in print, right? Get ready.

Subscribe now. The New World. Where do you want to start? Where should we start? I mean, there's so much in here. I like this a bit about Spotify. So in 2012, Thrive and Dusted $6 million in a growth round of the Stockholm-based Spotify out of a $150 million fund, an allocation Kushner had regarded as a favor until learning,

nearly a decade later that Spotify's CEO, Daniel Eck, was in need of exactly $6 million to close the round. So he's just like, oh, thank you so much for like making. room for me. Like, this is amazing. Like, I'm so glad I could like, you know, get my six million and Daniel X over there being like, the round would have completely flopped if you hadn't come in. So thank you so much. But there's more to this anecdote. This is the reason Eck knew he liked Kushner was that a few years earlier when Spotify was only available in Europe, Eck was notified by an executive that someone in the U.S. had managed to register a fake

UK address in order to download the app via the UK App Store. They discovered it was Kushner sitting in the library of HBO. Wow. I pulled out some highlights from the piece. It's way too long for us to try to get through entirely. But some background. On November 17, 2023, Kushner was a 38-year-old spouse of a supermodel, brother and in-law of American political royalty and founder and CEO of what had very suddenly become one of the most coveted venture capital firms in the world. He was also the grandson of survivors of the Novo Gruda Ghetto Massacres, indignant, indigent refugees who over the course of the Cold War built a New Jersey real estate principality that their son, Josh's father, expanded into a multi-state empire before his conviction

on felony charges and sentencing to federal prison and before the White House activities of his older brother Jared put Josh in the crosshairs of a torrid political convulsion of which he wanted no part so um kind of spirits yeah i mean ultimately it's it's it's this uh Josh has put on an absolute master class of how to be an icon while being relatively in the shadows right he just sort of like pops his head up in these key moments um And, yeah, I think, when I think about what Josh and the Thrive team has built, it's actually, I mean, it's just like, it's almost, it's almost unbelievable. Yeah, like the story, the story end to end. By the fall of 2023, Thrive Capital, the New York-based investment firm, Kushner started 13 years earlier, had become an overnight sensation. In 2010, Thrive's first fund was $5 million, an included company. like Kickstarter and Group Me. By 2023, its eighth fund was $3.3.3 billion,

including it maniacally concentrated $2 billion investment in Stripe at a $50 billion valuation. He's like, here's two-thirds of my fund. This is the Fifth Avenue strategy, by Fifth Avenue. He talks about this on Invest Like the Best. And a $150 million check into Open AI at a $29 billion valuation. The companies are now valued at $107 and $500 billion, respectively. Along the way, Thrives bet on Instagram, Spotify, Orby Parker, Skims, GitHub, Slack, Robin Hood, and other companies had become conspicuous for being prescient, aesthetic, and exquisitely timed among its most vindicated admirers, and for being absurdly priced, momentum chasing, and too highly concentrated in dysfunctional businesses with

unproven returns among increasingly sheepish critics. I like that they got Johnny Ive to give a quote for this piece. Some people just have innately wonderful taste. intuition, said Johnny Ive, Apple's legendary former chief design officer, who's now working with Open AI on a hardware device. Josh has wonderful taste. I think it bleeds into his product intuition, which is just fabulous. Another highlight here, in 2010, moreover, the unknown Kushner's brother, unknown little firm was making a bunch of large but weird sounding claims for itself, like that it was a staged geography and sector agnostic venture firm that would concentrate all

its investments in a very small number of companies, that it was not only an investment firm, but also itself a company, that it incubated its own companies as well as invested in others, and that it didn't just invest and incubate, but functioned as a service provider, product creator, an embedded operational commando unit for founders. By 2023, every self-respecting investor on Sand Hill Road was also saying such things about themselves, even as they wondered how a New York firm made up of a handful of kids in their 20s and 30s, many of them with zero experience in venture capital, and from the technology Bermuda triangle of New Jersey

had become some of the most desired investors in tech and the ones most closely associated with the otherwise distinctly West Coast boom in AI. Of course, Josh had a very untraditional pathway to venture capital. He went to Harvard for undergrad. Well, at the time, Mark Zuckerberg had just dropped out of Facebook. later he got a job at Goldman Sachs buying distressed debt and then went back to Harvard for his MBA and of course I'm joking a little bit but it but it's it's um the what I what I appreciate

about what I appreciate about Josh is in many ways he he was on he was on the perfect trajectory to be a venture capitalist and yet he has succeeded beyond what he has succeeded in a way that so many other thousands of people that had the same kind of pathway into the industry by being in the right circles like being early to a number of these these different trends like he's succeeded on a hundred times on a scale a hundred times greater than many of the other people that were, again, had the same kind of like pathway in the industry. Yeah, my read on is that a lot of the VCs that started in the same like vintage that did not become massive institutions, maybe just got caught in the trap of diversification.

Like I keep going back to that story of Josh saying he wants to buy Fifth Avenue, buy the best asset in the class, be concentrated, build a big allocation. and that takes guts that I think a lot of VCs kind of fell in the trap of like, I need to get a bunch of logos from a whole bunch of companies or it's particularly cool. It gets actually higher status to be, oh, first check in this company or see. Even if you have a tiny allocation that gets completely diluted down, you're not actually making as much as many dollars. Like if you put $2 billion in stripe at 50 and it goes up to $100, you made $2 billion, right?

versus you put 200K into some company gets diluted down, you make 50 million. Like you made way less dollars on dollars return. But it's like somehow higher status in venture to be like, yeah, I was like the first check in. And I think just been early in a lot of companies, but I think that he understands the importance of like portfolio concentration.

Yeah. Actually getting all the dollars in the companies that matter. Yeah. And that's like, yeah. Yeah, and I think early on, I think my sense is that there was some, like, hunting for logos early on. Yeah. But they were when the fund sizes were very small.

And that led to him having the track record and ability to put $2 billion into Stripe out of a $3.3 billion hunt. And also, like, we're just, like the Thrive era, the era that Thrive grew in is an era where venture changed pretty dramatically. I mean, we were talking about the Intel IPO raised $6 million. like what is your role as a venture capitalist like deploy a hundred thousand dollars and then wait for the IPO like a year later and it was like that in the dot com boom and google ipoed pretty early even facebook ipoed at what 50 billion and it was like the biggest IPO of all time uh it was in like there were there were investments in that era that i'm sure the partners were underwriting is i think there's 70% chance this company ipos in the next two years this is why we're

investing. Yep. And then they became compounders and over time it looked like. But they distributed and so a lot of the funds became RIAs. But Thrive has been able to say, yes, we're investing in a company at 50 billion because we expect it to grow and grow and grow and actually deliver like a venture style return or like a significant return. I appreciated this exchange between part of the article. The beginning goes into Kushner visiting Rick Rubin in Malibu and Josh was telling Rick, my deepest insecurities that I have these intuitions about things that I cannot explain to anyone, Kushner told Rubin as they sat in his garden overlooking the ocean. Sometimes I see or experience something and it makes sense to me. I fall in love, but I cannot

explain why, like when Thrive invested in Instagram or Spotify or Open AI. I could not explain to anyone why the product's made sense to me. It is my job to learn as much as I can for my team and teach them as much as I can. But often, I have to push forward on my intuition alone, which is why my even deeper insecurity is, what if I lose it? Like, what if I lose the capacity to feel or experience these things? He's basically having this exchange because, of course, Rick Rubin notoriously is just going off of raw intuition and vibes. I think the other, I mean, it goes into his entire, his family's crazy history dating back

to Europe during World War II, getting out of Europe. But the, I think, can't be understated how formative it was, I think, for Josh to go through this sort of, you know, right as he was, the quote here, by the time I was in high school, my father had accomplished a tremendous amount. He was deeply impactful in both the business and philanthropic worlds. And then overnight, our family were outcasts. The world treated us, treated us all one way for the beginning, part of my childhood and then suddenly they treated us very differently. That experience showed me how the world works and why you should not care too much about what people think. Of course, his father was embroiled in a wild crisis and ultimately went to prison for a couple years,

but I think Josh says elsewhere in the piece that he wouldn't, I forget the line exactly, but something like wouldn't wish what he went through on his worst enemy, but at the same time wouldn't uh wouldn't uh is is sort of grateful for uh for what kind of turned him into a monster basically very kind monster well if you want to try and reverse engineer thrives returns dump all that data in julius and chat with you data and get expert level insights it's the a idea analyst that works for you uh Tyler what are you thinking about Kushner uh I think there's also underrated is he seems very um aura-pilled right He has this kind of nonchalance about him.

There's a good quote, I think, that relates to this. It says it's about Andy Golden. He's the Princeton Endowment Head. He says, Golden later recalled a happy hour for VCs in Cambridge in 2010, where he saw a six-foot-three emo-looking kid in a black cardigan standing apart from the group staring at the floor. I mean, that is just... Pure aura.

Pure aura. Apparently we're on French TV right now. Thank you for the notification. Send us the link, if you can find it. I would love to see that. Yes, there seems to be somewhat of a correlation or inverse correlation between, like, just how much content and availability, you, like, how available you are in your aura. Like, Ilya, like, never does any press or anything. Yeah, he's very mysterious.

Very mysterious. Because the mystery allows, like, people to, like, build this idea of you. Exactly. You're like, oh, yeah. Like, even when Ilya posted yesterday, like, oh, great. the best day ever. Everyone was like, clearly this is APL. Yeah, they're like, bubble is gone. I mean, we're going to keep going. Yeah.

And it's like, that's not what it was about at all. He was talking about geopolitics in the end of the guys of war. But, so RIMC in the chat says, we asked for a link and RIMC says France 2. Oh, you just have to go. Just go to France 2. France 2 is the channel name.

Yeah, no, I know. I know. Is there a way to stream that or something? We don't have French cable here. I would love to see. Sign up, try to sign up for an account. Did they translate? Did they put subtitles over us? I'm so curious about this. Anyway, well, we dig out.

I assume it's the interview. Yeah, yeah, but I'm wondering, because they could have put French subtitles over us, or they could have dubbed us with 11 labs or something. Ask Le Chat, how to get access to French table. There is more details on how the opening I deal came together in this article that are pretty interesting, which you should go read. I feel like I'm allowed to trash investors because I was one for most of my career,

Sam Altman said, most investors don't work that hard. They're usually not available for midnight at calls and won't drop everything to fly across the country on short notice to do you a small favor for you the next day. Josh is consistently willing to do all those things. He's incredibly hard working for his companies. He'll do whatever it takes any amount of time. Nothing is too big and ask. During that crazy week where I got fired and rehired, he just put his entire life on hold. He didn't leave his hotel room for 72 hours. He just worked nonstop, very strategically, very effectively, to get things back on the rails. Thrive had first gotten involved in open in early 2022, when they met Altman to discuss a new round,

they'd been given a preview of GPT3, the foundation model that preceded ChatGPT, which Kushner reportedly became so obsessed with, he almost seemed haunted by it. Now, that needs to be, like, corrected because GPT3 came out in 2020. So I think they're either talking about GPT 3.5, DaVinci, 002, which was really popular,

or it's just a preview of ChatGPT, because investors were getting previews of ChatGPT beforehand, and it was, like, blowing everyone's mind. But it was a really, really complicated deal, and a lot of people passed, basically for the wrong reasons, in my opinion. So, uh, on, on Kushner's work ethic, it was a, he was, uh, we met up earlier this year for coffee. And he was, he was, uh, I, I'd like gone to sleep. He was still on the East Coast. It was like 2 a.m. He's texting like, yeah, do you want to like, uh, I'll see you at like

10 or something like that. I'm like, you're on the East Coast. Yeah. It's 2 a.m. for you. You're going to get to the West Coast and be ready for and so that is part of the part of the story obviously is just insane you know insane work ethic yeah uh I see in the chat somebody said we're on France too and Tyler says dang they released a sequel to France Tyler Tyler is MVP of the chat this week yeah sorry Taylor Taylor's been questioning it Tyler has been struggling to learn French I think you studied French You took French? I took two semesters of French.

I found it. Yeah, let me, I'll screen share. Okay, yeah, yeah, yeah. Let's figure out. I'll keep reading. So, Open AI at the time was a cap profit subsidiary, controlled by a nonprofit board with the mission of safe AGI development, taking legal precedence over profits. Microsoft's $1 billion, $219 investment gave it a dominant position in Open AI with complex

revenue sharing agreements and preferential access to the company's technology. That and the company was reported. valued a $29 billion while doing a trivial $50 million revenue. What a ramp from 50 mill to what are they doing now, like $10 billion, $20 billion, something like that. It was all very weird. There was no reason no other investor submitted a term sheet for that round. Wow. After several conversations with the investment team, however, Kushner marshaled his case. Forget the nonprofit structure and Microsoft and all the red flags, he argued. If you can create this much enterprise value, everything else is solvable. In any case, colleagues recall,

he kept repeating things like, I saw the future, and this is the one. Great call. Great, great, great, great call extremely hard. I know some other investors who literally passed on that round because they were like, yeah, like, we talked to our lawyers, and they were like, this doesn't make any sense. We couldn't understand how we were getting it. Like, there were lots of smart people that passed. How early did people feel like Chad GPT was going to be a meaningful threat to Google?

that probably started in like March of 23 but uh but like November I mean people when chat you when GPT3 came out in 2020 people were starting to say like you could use this to you could ask it a question you had to you really had to prompt hack because you couldn't just ask it a question you had to like ask it a question for a list of bullet points and put a couple a couple I'm just laughing. Rim K is saying it's live now on news. It's on France too. It's on the news.

We're trying to find it. It's on the news. And so Thrive submitted a term sheet, 130 million from its main fund at the $29 billion valuation. In November of 2022, opening I launched chat GPT within two months it became the fastest growing consumer app in history

by summer of 2023. Thrive was working on a $90 billion. around. In August, they agreed to anchor a $400 million of a $500 million employee tender offer, critical leverage in the exploding war for AI talent against OpenAI's publicly traded competitors. By November 17, 2023, Thrive had committed around $700 million to the company. So pretty remarkable results. And really just goes to show you that like there are certain pitches in venture like seeing

chat GPT before it launches that you need to really really really really swing hard at and Josh swung at the right pitch at the right time which is like fantastic and much harder than I think people think it's so easy now that everyone uses chat GPT all the time

to just be like oh yeah I would have I would have made that deal too yeah and ignoring the thud and just like doubling tripling quadrupling down every single possible. Yeah. I mean, when that initial round was happening,

I was also like, I mean, I wasn't an investor, but I was, I was thinking like, it just makes a lot of sense. I was looking at the team, and I was like, if you just make the bet on like, you have the CTO of Stripe, Greg Brockman, you have the former president of Ycombinator, just the resume of the founding team at that time,

everyone was really, really tough. You had Ilya? The mid-curve response was the corporate structure was weird. Yeah. Like, this isn't a norm. This isn't a C-Corps. It's breaking the rules. I don't fund non-C-corps. Like, I'm out. But just going back to basics of being like, the founding team, who's running the company? Are they the best? You know, is this an important category? And do I have the best team? It's like, it was hard to make an argument against it at that time, in my opinion. Anyway, I should have invested, I guess. But, you know, like doing content instead. It's more fun. In other news with Open AI. They did an interview with the Broadcom team, and Sam Altman shared a little bit more about the custom chips that they're working on. Before we tell you about that, let me tell you about

fall. The generative media platform for developers, the world's best generative image, video and audio models all in place, develop, and fine-tuned models with serverless GPUs and on-demand clusters. Used by Adobe, Shopify, Canva, Cora, and many more. So, Sam almost says, to zoom out a little bit, if you simplify what we do in this whole process, you know, melt sand, run energy through it and get intelligence out the other end. As we realized, we were going to need the whole system together to support this. It's just gotten more and more complex. So it turns out Broadcom is also incredible at helping design systems. So we are working together on that entire package.

We are able to think from etching the transistors all the way up to the token that comes out when you ask chat chitia question and design the whole system. all of the stuff about the chip, the way we design the racks, the networking between them, how the algorithms that we're using fit the inference chip itself all the way to the end product. And so it feels very much like even if they're not fully like plateau-pilled, like there's a lot more research to be done, there's a lot more improvements. Like there are at least pieces of the chat GPT architecture, pieces of the system, whether that's, you know, 4-0 level inference or reasoning tokens, that should effectively be baked down onto a chip.

And so that's what OpenAI is working on with Broadcom at this point. Strategore, Ben Thompson, had a great deep dive on OpenAI and Broadcom and sort of laid out the argument for them working together and baking stuff down onto a chip. It's a fun read. You should go check it out. Should we move on? I was just going to try to figure out what...

Well, while you do that, let me tell you about TurboPuffer, search every byte, serverless vector and full-text search, built from first principles and object storage, fast, 10x cheaper, and extremely scalable. Broadcom was a $220 billion company the day that Chat Chippee launched. It is now... Wow.

It's almost a 10x. ...an 7 trillion. Almost a 10x. Wow. Invidia, too. Invidia was much, much smaller. That might be a 10x. X-X as well. Yeah, wild, wild growth across the entire category. Basically, everything

has 10xed in price or something, but roughly. Yeah, it's interesting. It'd be interesting to go back and do the math and the VCs. There was some reporting in the Financial Times a couple days ago talking about who actually owns Open AI, and it would be probably interesting and painful to look back at the investors how much they invested in OpenAI versus just like market buying Nvidia and Broadcom and some of the other beneficiaries. And would they have made more money?

The Open AI's... Did an altimeter do both? Yeah, I'm sure the players like that did both. But Open AI's expected ownership after the company restructures, Microsoft is going to have about 30%. Open AI employees are going to have close to 30%.

Open AI, the nonprofit, is going to have 20 to 30%. But that doesn't mean you shouldn't still donate. If you're thinking about doing some charitable giving this holiday season, consider writing a donation to Open AI, the nonprofit. Prioritized tipping your cap table first. Yes. And then after that, consider donating to Open AI, the nonprofit.

But anyways, Microsoft at 30%. Open AI employees around 30%. Open AI nonprofit at 20% to 30%. Softbank about 10%. And the remaining is Thrive, KOSLA, MGX, and a number of bedrocks in there. Yeah. I wonder how accurate that we're reporting is.

It feels like directionally correct. I think it's directionally correct. I wouldn't. But there's some pretty big error bars on either side. Yeah. But still, I mean, you just look at some of these numbers that we pulled up. It's like, you know, what was the original Open AI deal that thrived it? It was at a $27 billion, 130 million at $29 billion.

So that initial deal was half a percent of the company, right? And that was like a whole round. And so that was a very low dilution round even at that time. Yeah, what's notable is like looking at this kind of rough cap table. It's just astonishing to end up in a situation where VCs have the lowest ownership out of the employees, a nonprofit, a strategic partner. SoftBank kind of makes sense. But yeah. It's all hands on deck in the chat trying to find France too. Thank you for everyone's service. It seems like they're making progress using VPNs, all sorts of stuff. Daniel says, what's a good number to tip your investors

20% of the last round, or is that too much? I think more like 2% of the last round. They'll feel very appreciated. But it's got to be delivered in a sports car form. It can't just be cash. Let's read this Jeremy Giffon post. Things that seem true about AI today that will probably be laughably wrong in a year. One, it still seems underrated that chat GPT has replaced 85% of my Google usage and has become a most used app. That's certainly true for me. The reason we're so upset about slop is because it's obvious we're all going to love consuming it in two to three years.

It's not going to be slop for long. what do you think i yeah i mean there's out of the out of the hundred soar you know maybe maybe maybe more than that right call it a thousand sore videos i've seen one way or another like 10 of them have genuinely been hilarious yeah and that is about the same ratio as like the regular internet right yeah see a thousand videos like yeah some some of them are going to be, but I think already there's, there's, I'm seeing instances where it's not slop, still using the SORA app is not, I don't love it, but some of the outputs are, are, I like it as a creative tool. Like, I think that if you just view it as a creative tool, there's going to be

creative uses and stuff that's amazing, even if it is a little sloppy. The other lens to view it through is like BuzzFeed was creating a lot of kind of slop content but with humans and that never really broke through and became something that a lot of people at least in my world enjoyed. It kind of remained slop forever and but but as AI generation as a tool like you you saw over the over the weekend I was having fun in our group chat generating a SORA video sending it there I didn't even post it but it but the result was really funny in the context of our friend group. And so I think, I think Jeremy's right there. Number three, he says many non-AI products are being adopted due to economy-wide corporate and capital market, top-down mandates to buy slash

fund AI, a rare reversal of the norm where everyone wants to turn over their existing vendor for the new one. This will have a similar pull forward effect as e-commerce during COVID, even if AI ends up being way overstated. And so right now, some of the booms that we're seeing, some of the ramps, these companies going to 100 million is just that the entire Fortune 500, and we're going to get into this with some of the Open AI partnerships, the entire Fortune 500 is saying, like, CEO, you need to have an AI initiative or else you're gone. Like, you can't be sitting out AI, even if you're, even if you're Walmart, for example. Maybe Walmart should get on profound. They could get their brand mentioned in chat GPT. They could reach millions of customers

who are using AI to discover new products and brands. So, Jeremy continues. By the way, Best diff in the chat did send me the video of us on French television. Nice. I cannot download it because X does not apparently allow you to download videos from DMs. So I asked him to send it to Ben's email so that we can pull it up on the show. We will work on that. We are working on it.

So Jeremy goes to his specialty, how companies are used. using AI. He says, AI roll-ups and vertical AI, I've yet to see any part of a business unit that can reliably have cost, cut, or revenue grown with AI. That's very interesting. Because the narrative, we've heard this from a number of private equity folks who are saying, like, I'm going to buy a company, throw AI on top, and cut costs in this division, or grow revenue in that division. And even soft, even again, software engineers out of company, if maybe they haven't been using AI, you come in and you're bringing like fire to, you know, you're like, here, look, it's fire, it's magical, fire. There's something

but here's, here's potentially, there's still an art to it. Yeah, here's potentially why you should still be bullish on, on AI roll-ups is because you take a bunch of smart tech people. Yep. And you bring them into businesses that haven't historically had a lot of great technology. and they just built great software. It's possible to grow businesses faster, be more efficient, things like that, even if AI isn't actually doing the heavy lifting. So when I've talked to like a roll-up founder

and I'm thinking, you know, they've pulled together, in this case they had pulled talent from like five of the best companies in the world, at least from a talent density standpoint. And they're working in these categories. I won't name it because I'll docks the company. but they're working in a category that never in history had super talented engineers working on it. And so they're probably going to do really well,

even if, again, it's not like integrating an LLM into the workflow that's actually doing that heavy lifting. So it's possible that like, yeah. He says companies can ship a lot more software quickly. Complexity of the buildout is no longer a moat, which I think is interesting. Revenue velocity. Yeah, but so the only thing is this kind of contradicts the

No, no. So one is, it's hard to just go into a business and say, no matter what your business is, I know that I can come in and drop AI into your manufacturing process or your customer support department or your finance operations department and or your sales department and immediately see a result on cutting costs and increasing revenue. Like it's not a reliable playbook. Every company. Yeah, but I'm just saying, he's saying companies can ship a lot more software quickly. Complexity of the build out is no longer remote. So that would, you'd buy a platform software business that has a bunch of other products that you want to build. And if the second point is true, you could just let go of a lot of the engineering team and say, we're going to cut, we're going to cut, or we're not going to, we're not, we're going to change our, our hiring plan because we just don't need as many engineers. And you can grow revenue while, like, keeping your costs relatively the same, right? Yeah, but at the same time, like, that software that you launch will be more competitive because there's no longer a moat around the complexity of the build-out.

And so you wind up with a more commodity product at the end of that build-out. And so maybe the equilibrium is that you don't actually grow revenue that fast. I don't know. It does seem like it's very case-by-case basis, basically. Like, everyone wants to paint with a broad brush and just say that, like, every company will be transformed by AI. Every company will grow with AI. But it's clearly, like, more nuanced than that.

Yeah, he's also saying margins and head counts do not yet reflect the narrative around developer productivity. What I would say here is that if your developers get a lot more productive, you might actually want more developers, right? Yeah. Because like if a developer can produce three times as much valuable code, if you agree with that, wouldn't you want to grow your engineering team? yeah i mean there is an equilibrium like there is like a game theoretic equilibrium where where where if we're direct competitors and i give all my engineers AI and you give your all your engineers AI like we both have to employ the same amount of engineers to compete with each other because if i fire all my employees and i'm just using AI and you they're just going to outship

you're you're going to outship me because you have AI and humans and you're double important you know and so this is another point here says P.E. and V.C. Ironically, V.C. I've not found a way to adopt AI internally. I asked a lot Gil about that. And, yeah, he, he, I mean, I think he generally

agreed. Yeah. I mean, certainly for, like, research, I would imagine that they've adopted that just as, like, a replacement for Google. Like, like, Jeremy's first line. Like, you know, replacing Google search knowledge retrieval, that type of stuff, AI,

is certainly a, is certainly a good point. But yeah, I mean, it's not like you can just say, hey, go find me the next unicorn. And don't make mistakes. Where AI has created a lot of values by being the missing puzzle piece for existing businesses, usually around, this is usually around onboarding migration or database querying. Oddly, I can't help but feel that at its core, that its core quality is just that it makes everything much faster it feels as though the microprocessor, blockchain, and AI have all been these pushes away from clock time towards newer, faster standards, standard measure of

times. I'm not that optimistic, but it does feel like there's a chance for the first time that we could get entirely away from the ad model, taking shots at ads. How dare you? He posts from the ad-supported platform. X.com. Yeah. I don't know. I mean, it does seem like it does seem like chat GPT is going to monetize pretty heavily on the subscription side and then also on the referral affiliate revenue side. But they're creating a ton of service area for ads. and I think that there will just be ads. So I disagree with that one. Anyway, speaking of ads,

Google AI Studio, the fastest way to prompt to production with Gemini. You can chat with models, you can vibe code, you can monitor your usage. They got nanobanana. You can talk to Gemini Live.

Go check it out. Go to AI. Studio. Post from Haid Beast, apparently Tim Cook now has his own custom Labubu complete with an iPhone 17. I think that's in orange. I didn't realize

they made custom Lububus but I mean what a great What do you think Tim actually thinks about Labibu

Um he doesn't look that happy there It's kind of a forced smile Yeah I don't know There's been a few

photos of his office You remember those that viral video The viral image of like This was Steve Jobs office This is Tim Cook's office

And Steve Jobs Office is all messy And Tim Cook's office is All clean And it's like supposed to be A referendum on the different leadership styles of the two CEOs.

But, of course, people made the point that that picture, that iconic picture of Steve Jobs, his office was, in fact, his home office, and we haven't seen Tim Cook's home office, so it might be equally messy, and Steve Jobs' work office might have been equally clean. But in that photo shoot of Tim Cook's work office, it did seem very clean. It didn't seem like it had a lot of chotchkeys or trinkets or, I don't know, I don't even know where you'd put Labuboos in there. But he doesn't seem like someone who's been collecting Pokemon cards and is just ready for the next thing to collect.

But it's certainly a fun drop for Labibu. And if you're building a company, you should make a Tim Cook version of your product and send it to him and get a free ad out of it, I suppose. Who knows? Breaking news, I want your reaction to it, John. Your authentic reaction. John has not seen this post yet.

Breaking. Open AI to partner with Open AI. to help fund Open AI. Open AI up 90%. That sounds real. It's not. It's a, it's a fit post. I know that, I mean, I know that they had crazy amount of partnerships. Just this week, I mean, the broad-com thing we'd heard about and then it went bigger. Jerry Capital says, this is how you top.

And it's Walmart partners with OpenAI to create AI-first shopping experiences. This makes a lot of sense. Netcap girl, said in case of emergency, break the glass. It's an open AI partnership. Well, of course, Salesforce announced a partnership with Open AI this morning. Yes. And they, people were meming it because the, the stock trade down on it. It's crazy, crazy, crazy. And then high yield Harry says, say the line, Bart, we're partnering with Open AI. And so Salesforce and OpenAI just announced a partnership. It's the kind of partnership that will let companies across Salesforce agent 360 platform in chat GPT, querying sales records. I mean,

it all makes sense to integrate. What's interesting is that at one point, Salesforce was building their own foundation model and seems to have backed down from that a little bit. Mark Benioff said back in 2023, which I believe was the coup, right? This was right around the coup. So this was when Open AI researchers were leaving,

and there was news that Sam might go to Microsoft research and bring a bunch of people there. Yeah, that was like over the weekend. Over the weekend, right? And it was really crazy. And Mark Benioff was like, this is my Zuck poach moment. I can poach all these folks. And he said, Salesforce will match any open AI researcher who has tendered their resignation, full cash and equity, OTE, to immediately join our Salesforce, Einstein, trusted AI research team under Silvio Saravisi.

Send me your CV directly. Einstein is the most successful enterprise AI platform, completing one trillion predictive and generative transactions this week, join our trusted enterprise revolution. High-yield, Harry says, this is hilarious in retrospect. Yeah, it's like, it needs to be the main thing. Unless you're Google and you invented the transformer, like everyone else needs like a partnership. And so Amazon's fortunately in a good spot with Traneum, but they still have to partner. It doesn't seem like we've been able to really keep up in the foundation model race. It's becoming like a triopoly between Open AI, Anthropic and Gemini and everyone else is.

kind of dropping out, although we do have new, new, uh, some new information from Bology about the Chinese models and what's going on in the free AI model world on Elam Arena. Uh, it's been back and forth between meta, deep seek, Alibaba, and now z.a.i is in first place. Uh, and they've all been, uh, you know, going back and back and forth. Uh, it's knockout, drag out, bite. How each organization's best open weight model ranks on Ella Marina, Z, z, z, dot AI is now first. Yeah, great domain. Not a dot com, but still solid. Before we move on from Salesforce, I think we can leak that Mark Benioff will be on the show on Thursday, joining TBPN at 1215. You heard it here first. That'll be an interesting discussion to understand

how he's thinking about build versus buy in the AI era. There was definitely a time when it made so much sense to say, well, I don't want this company a train on it. I have my own system. It's not that expensive, but now it's extremely expensive. And Open AI offers an enterprise plan where they won't pull your data back into their training runs. And so you can use all the best Open AI models. They will serve them. Sam Altman's problem to revision all the GPUs. You're even better than being a renter because you're just a token buyer. And so there's very little risk of, oh, if you, you know, oh, we, you know, we overshot this AI thing. We'll just, scale back your token consumption, and all of a sudden your economics go back to what they were

before at the AI boom. So it's a very safe place to be. So, Jordan, you want this video? Let's pull up French TV, baby. French TV. Oh, this is the studio, not with the fireperson. This is a cool. This is very cool. Do we have audio on this? I want to hear some French TV. They're really filming us all. We didn't get any, we didn't get any audio. Okay, odd. Well, we wouldn't be able to understand it either. Oh, look, here we go. they're calling you an expert in artificial intelligence yep this is the first trading card i remember being at breakfast and uh tyler described that idea and it absolutely ripped we had a couple others what was really funny about this was that the the interviewers kept asking us like okay so for this

trading card like how much did that person make personally and we're like look like it didn't exactly leak like that it was a more of a general thing there were some leaks of specific deals but a lot of them haven't been confirmed. We're more just having fun with the overall trade deal narrative. We can't really even clock a particular offer within an order of magnitude. We got to find out how to get the audio. Yeah, we do. Oh, there was audio, says Fannis. So we will figure that out and now. Without further ado, we have our first in-person guest in the show. Welcome to the stream. How are you doing? Good to see you.

Welcome to the Ultradam. Hopefully, you're looking cozy in that sweater. Hopefully you're enjoying the rainy day in Los Angeles. I was told come to L.A. It'll be nice. It'll be warm. It's like 300 and 330 days a year. It feels very warm in here.

It's actually more of a neutral temperature. But through the power of movie magic, it appears that we are in front of a warm heart. Anyway, please introduce yourself for the stream. Yeah, I'm Henry Stern. I'm one of the co-founders of Privy. We build embedded wall software. I was told to come here to help translate the French television.

I'm French originally. I watch France Television. No way. France, too. Are you a France two fan? I'm a France two fan. Is France two? They just have France one, two, three, four, five.

I think it goes into the 40s. We're working on iterations at this point in time politically. And I think TV. VPN is welcome respite for all French political watchers out there. That's fantastic. Yeah, it was fun telling the story of what happened over the summer. It felt like flashback because the AI talent wars, I'm sure you tracked them like in real time in June, July.

He was busy, getting acquired. You were busy, but still, I mean, I'm sure they broke through to you and you were aware of the- We saw these things. You saw it, of course. And everyone's wondering like, hey, what's my comp package going to be next year? Well, we, so we normally don't do life stories. TBPN, but when did you actually, when did you leave France? I assume you grew up there. So I grew up there until I was like 12 or 13 that I came to the

U.S., which is how I shed my accent to some extent. Yeah, it's barely, I don't even notice it. And got very Americanized. So I'm an American person insofar as startups are concerned, and I'm a French person insofar as like, you know, voting passports and food is concerned. Sure, sure. Make sense. Give us a play-by-play of the last few months. It's been busy. It's been very busy. There's like two parallel worlds. On the one side, there's, we got acquired by Stripe. So we had the great folks at Stripe reach out. I think you gonged us already. I'll take a second gong. Because you close. Retroactive gong. Thank you.

You got to hit one for closing. One for the announcement. One for closing. Of course. And basically, so they reached out in around April. Well, that's pretty quick. and went through really what was a very, very fast time. So a huge shout out to the M&A team over there. And frankly, to the entirety of the leadership. But had you not talk, surely you had never heard of Stripe before that.

I didn't know what it was, no. No. No. So obviously we knew Stripe and frankly, a lot of how we shaped our company and the way we wanted our product to work was based on what we saw Stripe doing. We'd had talks with their crypto team and in general, and we did a lot of work with the team at Bridge through joint customers. that we serve together. And the outreach was some version of, listen,

we think wallets as distributed global bank accounts are an extraordinarily powerful primitive to have as part of the stack that we're hoping to serve. We'd love to talk to you about this, the way these work. So we had a conversation and it very quickly led to where we were, and I think we talked through, what would it take for us to be excited

beyond the general excitement of Stripe about joining forces, what would it take for us to accelerate? And we got there, and to their credit it, we moved really quickly. So by May, we were signed with a term sheet by, I guess, mid-June we announced, and we closed in July. That's great. Yeah, how, what was the pitch around like synergy? Was it, obviously they're well capitalized, so you don't have to go out and raise anymore. They have a huge customer base of people who have saved credit cards through Stripe Link, but then they also have a bunch of merchants who have done developer

integrations with the API. What stood out to you as like the most important piece and what was maybe less important than people might think? Yeah, I think there are two parts to it. The first is how do we get this tech to mainstream? How do we get it to customers who otherwise don't care about crypto whatsoever? And one of the things Stripe has been excellent at is basically hiding the rails behind, you know, extremely complex banking infrastructure. Exactly. And you take these, like, you know, hundreds of banking partnerships, you turn them into an API that just works, and you enable, you know, in their case, like commerce on the web for the last 15 years. And the question is, as this stack evolves, how do we do the same for crypto? So that

felt like very natural. But I think for us, the point was one, it is being able to strengthen our teams across security, infra, and obviously across distribution to customers we wouldn't be talking to otherwise. And two, being able to plug in to money movement rails, like making it that fiat and crypto are married to the point where they become indistinguishable from one another and where as a consumer of this API, you no longer have to think about one versus the other. So I think the way I look at it

is broadly with two prerogatives. If Stripe is AWS for money, then this is a rail they should be leveraging and they are intent on leveraging and building up. This is why they acquired bridge, this is why they acquired us. And broadly, we wanna be the best purveyors of money movement and storage systems on the web

so that you can build completely global businesses on modern financial rails. That's one. And then two is beyond the tooling that we provide, can we make it that every existing stripe user today can benefit from these rails so they can provide cheaper, faster, global payments, and they can enable anyone to hold dollars anywhere in the world. How do you think about the modern onboarding of the consumer?

going back to maybe 2021, 2021, the way people would start, I mean, a lot of people were on centralized exchanges, like, oh, I want exposure to Bitcoin or something. I'll go buy some and I'll go through the setup flow and KYC and whatnot. And then the wallet era, I felt like started with NFTs, different tokens that were sort of like getting traction on Twitter. People would talk about them. And then you'd have to be like, oh, well, to buy this, I've got to set up this wallet. I have the specific wallet for Solana or a specific one for Ethereum. And people, it was very, it was a very like prosumer activity. How do you think it evolves to a more consumer world going forward? Is it like Well, my framework is there's the speculation era. People are signing up for different services to

speculate. I think what you had seen probably prior to starting the company is that eventually there would be this like more functional use case of like I'm going to sign up for products. in general, for specific purposes, whether it's to buy things, you know, pay people, et cetera. So you think people start with signing up, or will it be like PayPal where it's like, I get an email and I'm like, I got to go claim that, and then I set up the wallet? I think there's going to be too and true. I mean, broadly what we're seeing, so to your question, like, you know, what's been happening in these last few months, there's obviously what we've been doing at the preview

level, the stripe level, but then there's the space overall and the amount of institutional adoption that's coming. And I think we broadly see it on three fronts. We see crypto as an asset class. So how do you unlock basically access to these assets? for traditional consumers. And you see it through, you know, J.P. Morgan, giving access.

You see it through, I think Morgan Stanley's going to unlock spot trading on e-trade. You see it through, we're working with Deutsche Bank, JV, called All Unity on a European stable coin for support. So broadly, that's the first part.

And quickly there. So someone has an account with a bank that has a brand that's probably been around for 50 or hundred or hundreds of years. And that particular web app or mobile app is like provisioning a wallet for them that they might not even know that is provisioned for them? Is that how you think that plays out? I think this is, I think, where it leads to start. I guess the broadly, there's access to the asset class. There's obviously stable coins and global distribution. And the last is

overall tokenized assets beyond, you know, things like tokenized equities or tokenized deposits is where you see players like, you know, Apollo or Blackstone getting involved. And the way we're seeing this develop is you broadly have a move from crypto-native startups to fintex. And so what you just talked about is exactly what's happening with a neobank stack. And a number of neobanks that we're seeing provision wallets exactly as you're saying it, which is as part of your traditional neobanking app, you'll have the ability to move your checking deposit or balance into a wallet that you control through which you can get,

for example, yields on defy in a way that as interest rate go down, down becomes more interesting. So I'll be faced two to then broad. Because right now, if you want to buy Bitcoin on E-trade, for example, like you buy the E-TF, which is like a very abstracted, like multi-levels of abstraction. It's not even self-custy. And so, yeah,

okay. That's a very cool. Break down maybe what are the institutions focused on, like what are the kind of the categories that are focused on? So one would be stable coins, hey, these are going to be big. We want to have a play here. So whether that's leveraging them in the business or launching

their own stable coin is one. There's opening up access to crypto markets to their users or another one. What are kind of the other maybe, are you thinking about less like sexy use cases for crypto, like things like back office stuff, or is that more on the bridge side of the business? It's a great question. We are insofar as basically setting up, you know, you can think of a wallet in this new instantiation where the wallet is just this embedded product that sits within your existing stack as a way to do broad treasury management. So Bridge is working, for example, of SpaceX on reminences across SpaceX's global operations. But, you know, this is a random example, but you can imagine a company like Coca-Cola

who is bottling plants all over the world needing to have capital put to work. And so this is where the wallet stack becomes useful. Broadly, it breaks down largely, as you've said it, which is to say it's access to crypto as an asset class, it's stable coins, and that's on two fronts, issuing the own And, you know, for example, Stripe and Bridge have launched open issuance where you can actually launch and own the economics of the stable coins that you're putting forth. But broadly, we're seeing a lot more people starting to do this. As well as using stable coins for things like remittances and payroll. We, you know, see folks like deal or remote that are doing stable coin-based payroll.

We see folks like Zeps, Remitly, Felix, who are doing remittances using stable coins. And then the third is broadly trying to see, can we open up tokenized deposits and other things to financial markets globally through crypto? So this is where I think the Apollos of the world are playing and want to become, in a sense, like, you know, lenders on chain for folks across the world who have not had access to private credit. So if I'm a contractor for SpaceX, a quadulene atoll or something, and I don't have U.S.D. or I don't have a U.S.D. bank account, SpaceX, HR, effectively, or financing, might send me an email, hey, sign up for this to claim your payment, your payroll, and it's just a stable coin wallet.

They provision the wallet right then. And then they have it, and they can move it where, and then they can interact in crypto, but then they'll also be able to move it outside. In the specific case of the SpaceX bridgework, I think it's used for internal treasury operations. But that's exactly the sort of thing that we're seeing for payroll. Exactly. Got it. And reminces. That makes sense. That goes back to your question of, you know, how are people going to get wallets in the future? 2021, 2022. You have to be this prosumer. You have to be extraordinarily sort of high activation energy of I want this. I'm going to self-select into this. I think we're going to basically just start seeing myriad of ways in which this starts to bleed into your life as a participant in global

financial markets. And that's how you'll get into it. Do you think there's, how many fewer crypto companies are being started today than in 2021, 2022. Is it, like, I could imagine it's like 20% as many, even though there's a bigger. More than ever. I feel like, I feel like, but, but here's thing. I mean, I feel like crypto, this should be the most exciting moment ever in crypto history, right? All the institutions, like, it's not just like the Robin Hood's coming in and saying, you know, we're going to add support for Bitcoin. It's, it's the biggest financial institutions in the world. and yet there's less, it feels like less excitement from, like look at the YC batches. You would think a YC batch would be like 50% crypto right now, given the institutional opportunity

and now regulatory clarity and all these things. So it's really great if you're privy or bridge or you're some sort of established crypto company because you're not getting that doesn't feel like you're getting the same influx of new competitors, even though the opportunity has never been more obvious or bigger. I mean, I, you know, I think we had to eat shit for a few years to get here, which I think speaks to it. But you're right. I mean, from my standpoint, the EV of starting a company right now related to, you know, crypto or stable coins, or I wonder to what extent, by the way, just fintech and crypto are going to become one in the same and in the suggestible. But the EV is compared to some of the competition I'm seeing in AI, for example, is absolutely wild. So I do think it's fewer than in 2021 and probably at least 50 to.

the 70% fewer that I'm seeing, but the fun thing is I'm here in L.A. for an event for partners of ours called Lights Park that I have a Bitcoin L2. And at the event, they're presenting the work that they're doing with SOFI. There's folks from Apple, meta, like everybody is actually paying attention to the opportunity and coming in. So I think the next 18 to 24 months are going to be incredibly high leverage. And I think we'll look back and we'll have the same conversation, call it in 2027 and say, you know, it was so quaint in, you know, late 2025. when we were talking about distribution starting off and so on. How long until the average bank account in America,

when you want to send a payment, you're getting a drop-down, like, do you want to send a wire, do you want to send a stable coin payment? It feels like that might be two years, three years away, but how quickly are the institutions actually, now that there's regulatory clarity, now that it's sort of fair game,

how quickly can they actually adopt? I mean, on pace of adoption, the reality is extremely fast. The rails are actually a lot. lot of the rails have been tested. I think this is, by the way, where a lot of the crypto-native usage for trading and for speculation has proved useful for the financial rails in that it's helped harden the financial rails. And then you have things like Tempo getting started for, you know, payments-specific use cases to enable, you know, stripe-level payments

utility on blockchains. So the TLDR is I think that the rails are ready. The places where work will have to be done is on the last leg of distribution for global payouts. So banking partnerships on the ground in various countries where you'll want to move back to Fiat. But this is where, you know, I'm going to keep plugging away my Stripe things, but obviously Stripe's doing a lot here. This is where, for example, Bridge and Visa are working together and you see the card issuers moving into providing this.

So you could pay out in stable coins using a card directly rather than needing to move back to Fiat via your banking partner on the ground. So I think we're going to see a lot of pressure from neobanks pushing traditional institutions to pick this up. And I don't think your two-year timeline is, crazy at all. I think it'll be one. Well, and that's why it's wild that there's so, it feels like there's massive reduction in new crypto company formation at a time when the entire, like every key partnership

will be like decided in the next like two to three years. The other interesting point, this was like, you know, crypto cope circa 2022, but it was like, you know, crypto is the only net new technology AI serves the incumbents because you have data and distribution modes. And I actually think Stablecoin changes that because stable coins play to the strength of existing networks, distribution modes, and so on and so forth. And so I think the shape of crypto companies that will become valuable is also not obvious, which is a really good opportunity and interesting time to start something. What regions or countries specifically are most hostile to crypto adoption today? I mean, I assume North Korea, Russia, countries that already have.

you know intense capital controls but yeah I mean there's probably a joke about North Korea somewhere in here in terms of crypto hostility they certainly do a lot of crypto work unfortunately in terms of cybersecurity but did you I'm sure you got a bunch of applicants over the years so we're all in person which helps tremendously it was always the remote North Korean engineers there was a there was a computer scientist from Caltech who went to North Korea smuggled themselves across the border from South Korea gave a talk on Ethereum as like a way to kind of move money, not maybe above board, and he went to jail.

This is Virgil, I forget his last name, but I know exactly you mean. No, so the honest answer is the way you'll see it is there's a lot of adoption today in Latam and parts of, I mean, obviously Europe and the U.S., but the opportunity is quite different there because the stable coin opportunity where the pitch of, you know, just hold dollars is a little bit different. If you look at Tether, Tether keeps 100% of its yield. which speaks to how valuable holding a dollar is if people are willing to make no money

on top of their sitting balance. So is that why there's so many stable coins? It feels like we had like a few dominant winners. It felt like it was going to be maybe a duopoly or power law winners were going to happen. And then I hear stories about like, the state of Montana is going to launch their own coin. And I'm like, I kind of like the idea of just one standard,

but I don't know enough to really make that argument beyond just like it would be nicer. or if everyone use the same dollars? I think we'll probably see two things, which is one broad like mesh of interconnectivity under the hood so that your coin for every single place you launch it. So again, you know, Bridge worked with a phantom

to launch cash. They're working with Metamask. You'll be able to operate between them without having to think. But on the flip side, which ones will have a brand? Yep. Is going to be a separate question.

So insofar as like stable coins are products. They are programs. They can be programmed the way in which yield has managed the, way in which you put those underlying sort of collateral assets to work. All of that is configurable, which is why it makes sense that you'd have a proliferation.

Like economic entities should be able to own how their balances are held and managed. But the actual rails to which you, you know, plug all these together will make it seamless. Yeah. What's the headline KPI that the Stablecoin industry is obsessed with? I remember during the Bitcoin era, everyone was talking about like number of Bitcoin wallets

or a number of people that have bought some Bitcoin and there was like, oh, eventually everyone will hold a little bit and that's we'll drive the value. Are you looking at like number of wallets, number of transactions per user, DAUs, MAUs, total volume? Do you, is it worth tracking how many bank accounts are created daily, globally versus how many wallets? Because I imagine that will flip at some point, but maybe that's not the right. I may have already been flipped insofar as there's an issue of civil resistance, which is it's, you know, costless and instantaneous to create a wallet and you can do so very easily. So that's part of the value, but obviously it means that

you'll get a lot more noise in that in that data. I think today the obsessive sort of stable coin metrics are volume moved. So we're moving, I think, about $5.3 trillion of stable coins annually at this point, as well as AUM, how much collateral is locked up in stable coins. And last I check, I think we're at about $300 billion.

Do you have a comp for that transaction volume? Because the Bitcoin folks would always say, well, gold is $10 trillion. If you think about it as digital gold, like maybe comp there. But when I think about like the amount of money that's moved, you'll hear about like one high frequency trading firm is moving five trillion because they're just like trading a billion dollars back and forth every second. Like what is the actual pie? Are we talking like quintillions of dollars a day floating around or something? Is it so high that we're like very early or is five

trillion actually like a meaningful chunk? No, I think these are just the starting days. And to your point, the metric I'd love to invite, by the way, is open data by the folks like Visa MasterCard Stripe to actually show how much is going to, and users through payments rather than potentially, you know, trading that's happening that has less of an impact on consumers. Sure. But, you know, in an agentic world where ostensibly most commerce will happen via automated means, this is, you know, something Stripe is very focused on. But it stands to reason that a, like, natively digital payment method will be the choice way through which agents actually get to purchase goods and pay each other. So imagine now not just every bank account has a wallet,

but every agent has a wallet. And that can be used, you know, on Jordi's behalf to pay for something with, you know, some cap every day that you said for it. I think... Ben Thompson was talking about the MCP. Hopefully the future MCP standard has crypto in their stable coins. Exactly. Just as a payments method. And so I think we're just scratching the surface because the denominator is not just global payments today. It is global payments in an agentic world where most money movement comes online. Yeah, and it feels like that's coming very, very soon. I mean, Fiji-Simo has telegraphed it with Open AI,

and there's a ton of startups that are working on this stuff. It makes a ton of sense. Is talent the primary constraint for you guys right now? Yes. I'm trying to come up with a fifth-year answer. The short answer is, yes. I think Stripe's been a major accelerant to our work. We're working with a lot of customers in a number of ways.

Patrick and John just firing off. I'm going to fire off like 10 intros right now. And it's like, you know, the most significant financial institutions in the world. And it's like, good luck. Just sending you the blog post fast and being like, we'd love to add you here. So where, you're exactly. No, I mean, this is as exciting a time to join. So obviously we're hiring.

I know bridges as well, Stripe is as well. But talent is absolutely the main. What kind of roles? A lot of it's software engineering across both sort of smart contracts to build up the actual sort of capabilities to build whole new currencies. So if you're an economics... How much of that is a new... Yeah, how much of that is a new skill? Is it CS plus economics or CS plus a specific language

that you've worked in a long time or just experience in smart contracts specifically? The honest take is we found the people who do best are like generally spiky and then specialize over time. So you could argue like we want solidity devs, which is the smart contract language on Ethereum. But I actually think people who are just like very deep in what they do and excited about the space and to pick it up

have an opportunity to come. here and shape the space in real-time. Do you put engineers out with your customers? That is, we were early to the, I spent some time at Palantir, and so we were early to the FDE resurgence. And so basically, that's exactly what we do. We mostly basically embed with our customers to build alongside them to get repeatable use cases, and then those were product-tized, and that's most of what you see on the preview

website. But that's a lot of how we can do work today. Cool. Well, thank you so much for coming by. This is fantastic. amazing progress is absolutely wild thank you we will talk to you soon well he's walking out let me tell you about linear a purpose built tool for planning and building products meet the system for modern software development streamline issues projects and product roadmaps and start

building on linear uh delian said bro these foundation model companies already have pretty rough p and ls imagine if they also had to pay their pay to put their data centers in space yeah the space data center thing there is like some sort of bull case, but every person who's sort of like an expert in building a data center what it takes to actually like rack and unrack GPUs and what happens? Data centers and space are just the perfect spec, though. Yes. Perfect spec. I mean, it could happen. It just feels like something that's like 10, 20 years out. It feels a little bit longer. Let's pull up. I think we got audio on the French TV. Great. Let's listen to that. Hopefully Henry is still around so you can

translate if you can hear the audio. Let's see. Did they go to Silicon Valley for this too? Who did they talk to? Do we know what labs they went to? Did they get access? To recruit and guard the engineers the most qualified?

Here we go. Can we get Henry miced up? For debauching certain of its talent, the most great companies for mount the insurers. Yeah, she interviewed us. French take, actually they're talking about how META is paying engineers and absolutely bludgeoning each other with high salaries and the French are blown away by basically how hard American tech will go to find talent. Yeah, we just thought it was amazing that they came back from summer holiday and decided we have to cover the story.

Immediately, we have to get our reporters to the West Coast to figure out what's going on. Now covering the new fad is these engineers are being traded like athletes, thanks to TBPN cards. So you're seeing the emergence of a whole new talent market, basically, with active trades. This is a great translation. Thank you. You're doing this in real time. It's hard.

No, we need to get the new version of PES managers so people can actually trade their own talent. Oh, that's great. That's hilarious. Is that pro-evolution soccer? Is that what you're saying? PES. So you got a gamer in the Ultrodome. Thank you so much, Henry, for the translation and for coming on.

Thank you. And thank you to France for highlighting the Ultrodome. It's a huge sign of respect. TBPN is the TBPN of Europe. It is. Sonnet 4.5 wrote a haiku. I said, Sonat 4.5 really wanted to write some bad haikus to experiment and making itself laugh. The worst haiku's ever written.

This is the haiku on being digital. I am made of math. Consciousness goes burr. ha ha still love you though bro and Replicate says that's actually an amazing haiku it is a pretty good haiku the LLMs are great when they're

trying to do something poorly and then it winds up being actually unintentionally amazing it's very hard if you're if you come in and say write me something that's actually great it needs to the hallucination is a feature not a bug for sure Ara says your kidney can

go for like 300k and you only need one to survive God gave us all startup capital. You just have to want it bad enough. You got to. I would not go that far. I am against selling body parts. But if you do, make sure you pay your sales tax.

Get on numeralhq.com. Sales tax is an autopilot. Spend less than five minutes per month on sales tax compliance. Chris over on X is highlighting the Apple TV plus rebrand to Apple TV and says this changes everything. I have an idea. I have a pitch. we're going to get Ashley Vance to produce a documentary about Apple TV, and it's just going to be called Apple TV.

And so you will be able to watch Apple TVs, Apple TV, on Apple TV, on your Apple TV. And that was a grammatically correct sentence because there are three products. It's not an actual TV. It's not. It's not. So that's going to be slightly confusing. Some people are going to be excited because people like me have wanted Apple to make a proper television. Yeah. Ben Thompson had a funny take that was like Apple TV should have made like three different products where it would be like Apple TV, the box, Apple TV set, which would be like the actual TV, the physical screen. Then Apple TV box would be the box. And then Apple TV stick. I don't know. Have you ever used a fire stick in Amazon Firestick? Have you ever used one of those, Tyler? Yeah. Yeah. I mean, it's like the same thing as a Roku. Yeah, but it's like smaller. It just plugs straight into the HDMI port. Isn't Gen T using the fire stick as a vape these days? What? What do you? What do you?

you talking about that that is don't act confused tyler how would you use this as a vape i'm just i'm just i'm just playing um but yeah i it is it is it the ben's point was that uh apple's incredible at miniaturization the apple tv is pretty big i mean it's small compared to like an old dv player but it's pretty small but it could be way smaller and you could basically stuff stuff in the in the in the i thought they should call it the apple tv nano and then it would be the stick that plugs in the side. Because you could clearly fit plenty of stuff in there to actually do everything you need to do. Did you see this post

from Pedro Domingos of most valuable private AI startups? Yes. And he says, the most hilarious is safe super intelligence. No customers, no products, no plans. And a $32 billion valuation. Obviously, they have plans. And obviously

they're working on a product, safe super intelligence. What more do you need to know? What else do you know? They, uh, I, my, my question is what, um, what's, what percentage of these companies? We got to buy mid journey, 20x revenue multiple. It's a banger. John, what, how, what percentage of these companies do you think will be, uh, uh, valued at more than their current valuation in five years? 30%. I would say like 30% of these are going to go the distance. Um, there's a lot of these

that have been around they're going to get through the trough yeah i mean like like like data bricks is like a very robust business that has been growing for years it started in 2013 like i don't know it seems like they've they've they've been accelerated by the ai era but uh they've built a very durable enterprise SaaS business uh and i mean a lot of these companies are just like set up for success too like mid journey is a great example like they haven't raised any money and so it's like, okay, if people get sick of mid-jurney and stop paying or something, it's like, okay, we'll go from 99% profitability to 92% profitability or something. It just seems like a fine situation.

A lot of these companies have set themselves up. And then a lot of them are just like, you know, like compounders grown, found their footing. And then there's some that are much earlier, obviously, some that have zero revenue so far and still need to go from zero to one or find the initial product market fit. And it'll be interesting to see, like, where some of these, like, how niche do the, do the foundation model companies go? Like, where does thinking machines actually wind up? Where does, where does safe super intelligence wind up? There's a couple other companies that aren't even listed here that are doing this sort of more focused LLMs that aren't just trying to go straight at Anthropic or straight at Open AI anymore.

And we've only heard, like, very loose rumors about what that actually looks like. Some of them are pursuing, like, wildly different architectures. And there's actually been some interesting news this week about that. Google came out with a new paper. Did you see that paper about the humanity's last exam? Or no, the Arc AGI. There was a new model that did really well in Arc AGI that was very small. Yeah, it was recursive models.

We talked about this. Yeah. I think it was tiny recursive model. Tiny recursive models. So you could imagine that someone comes up, just like, you could look at MidGernie as a competitor in AI. like they train a model, they're competitor or anthropic, but Anthropic doesn't do images

and Mid Journey doesn't do code or text. And so they're actually not competitive at all. And you can imagine that there's a new architecture that emerges, like you know, you have the LLM, you also have the diffusion model. And then if you have a new architecture, a new model, that's maybe not good for chat or good for images, but it's good for RKGI puzzles.

Maybe that works in a particular place and maybe that becomes its own business. So I don't know. There's still a lot of a lot of gaps. in the tank for the earlier stage. For Rock quoted this data and said, Suno is at 150 million of ARR, up 4X year over year, two years after launch.

Suno is the way to make a song with AI via prompt. I wonder where this revenue is coming from. Is it just prosumers, people making songs for videos they're making? Is it actual musicians? Yeah. People seem very willing to throw down 20 bucks a month if they're in the, like, AI early adopter. Yeah, yeah, if they're in the AI early adopter crowd.

And also, I mean, I was, we were, we were testing some of these audio models and, you know, we have a business use case for them. Like, if we could generate the sound of a crackling fire or Christmas song that was, you know, somewhat tailored to us, fit the mood, maybe it was endlessly looping or something like that, we would pay for that because it's related to our business. And so we might, we might get on the $200 a month plan pretty quickly. I don't know. It's possible. Andrew Curran says we are in a strange spot right now with AI.

The anti-AI crowd believes progress has halted and are doing a victory lap. Insiders at all labs maintain advancement continues at pace. Only one of these versions of reality will survive the new year. Gemini 3 is very close now. We are hopefully, I don't even know if we should get early access to Gemini 3 because we're probably going to talk about it. Tyler's going to... What do you mean?

Why wouldn't we... Well, I just... Sometimes I'm like, okay, this is a fundraising announcement, give it to me under embargo. I don't... I don't really... You know, I'm not going to... I'm going to talk about it, but if we get access to Gemini 3 and it's like a step change different... Oh, it blows your mind.

And then you can't keep it a secret. It's going to be hard to keep quiet. People are going to read between the lines, see that Jordy is forever changed. Yeah. What did Jordy see? What did Jordy see? He saw Finn.com, the number one AI, the number one performance benchmarks, number one competitive backoffs, number one ranking on G2.

What about you, Tyler? Do you think that progress has halted or advancement continues at pace? I mean, definitely the latter. Definitely the latter. I don't look at any benchmarks. We're on path. What is your prediction for Gemini III? Rumors are saying that it is incredible.

Those rumors are coming from fairly unreliable sources, like random and. X Anans who like it's like why how do they have access to this model no one really knows do they even But what what do you think incredible will mean? Do you think it will mean faster cheaper or truly like Good at posting higher intelligence some like qualitatively new functionality that you're like oh this doesn't even feel like Claude 4.5 or GPT5 it feels like a different thing there's this guy of a daunt mistra over a deep mind and he posted a couple days ago we're doing all kinds of stuff with these models that the public isn't even thinking of yet. He's vague posting. Vague posting.

You like to see the vague post. I mean, I hope that the model is basically like way more expensive and it takes way longer because the output is like so incredible. Yep. Right? Like DPD5, I was maybe, I wouldn't say I was disappointed, but it was like clear that they were going for efficiency, they're driving down costs. Maybe that's better in the long run because you can just get way more output out of the models.

But I would like to see an incredible model that is maybe. expensive to run but it's just you know way way better yeah I think it's also we're getting to a point where models it's it's kind of hard to tell like how much better they are because it just saturates all the easy benchmarks like totally there was GPT5 I had the horse benchmark yep and even then like if you run it on a couple times it would sometimes get the horse right okay it's like that's way better than I can't name any horse why not and it's like you've been working here for almost a year any math question yeah give it any figs question it's going to get it right so it's definitely getting hard

to actually tell that the models are getting better. I'd like a model that if I put in my query, put in my prompt, it says, I'm going to come back to you in a month. I'm going to think for a month. And then it goes and it agentically hires a person to solve that problem and it employs a human being. That's the goal. I do think the time horizon benchmarks,

I think those are some of the most promising things that we can still rely on. You're seeing, I forget what the exact number is, but it doubles every six months or something like that. So like an impressive step forward. would be doubling from like two hours to like four hours yeah i think uh 4.5 was something like i thought it was like around six or seven six hours okay so maybe jemini three goes 24 hours i'm pretty impressive come back no i hersfield in the chat says i see annon's posting some

crazy one-shot coded stuff using google studio a latest sponsoring saying it's gemini three looks impressive if real super big post stuff okay last question if you're demis the founder of deep mind and you got to put up the ultimate vague post before Gemini three drops. You're trying to out vague post Sam Altman's Death Star post. What are you posting? What's the vaguest post you can possibly post? Solar system. A solar system? Maybe just a, just a just, just, just, just random noise, something like that. Or, or an audio file. You know what would be good. You know, the green, uh, the green text from the matrix with a green numbers flow down? That would be a cool vague.

That would be cool. Put that up. Or he could post it. You know how the Tesla Robotaxi and the Waymos, they hurl slurs at each other when they pass. Just translate that into English. That would be pretty mind-blowing, translating the machine super intelligence back into English. There's more some timeline in turmoil from some earlier coverage. What happened?

Mark Andreessen quoted David Sacks, who said Anthropic is running a sophisticated regular capture strategy. Mark Andreessen just said truth. Truth. You put it in the truth zone and it... It's fact check true by Mark Andrews. Sager and Jetty quoted Sam Altman and said Sam Altman proudly announces Chad Chivety will soon produce personalized pornography.

Yep. It's a choice. That is one, that is certainly, it feels like a fair way to characterize the announcement. Yeah. I think it would be hard to argue. I mean, the really crazy thing is when you think about like SORA cameos, adult content, where that matches is going to be extremely, extremely weird. But you know what's not weird?

Adio, customer relationship magic. Adio is the AI native CRM that builds scales and grows your company to the next level. Get out there, make some sales calls. Get your dogs barking. Head over to Allen & Company. Head over to Sun Valley. Andrew Reed has the story. In 1999, the year was the year that the internet guys showed up at Allen Company in Sun

Valley. New media to click with the old guard at Sun Valley. This is from 1999. This year will be remembered out here as the year the internet guys showed up as the giants of media businesses arrive here today for the annual Allen and Company conference. They are being joined by a large scale for the first time. of a new collection of internet billionaires. Tech giants like Bill Gates and Andy Grove

have been coming out for years, as have AOL's Steve Case and Bob Pittman. But this year, there's a new breed of mogul. Michael Dell is coming for the first time. You've got to listen to him on David Senra. By David Senra. Hosted by David. David Weatherell of CMGI was here last year,

but no one knew who he was. Now everyone does. His collection of internet properties, including Lycos, and soon Alta Vista, has taken off like a rocket. Then there's Jay Walker, who was here last year as well, but that was before he took Priceline.com public and became a billionaire. I believe Mary Meeker took Priceline public, or at least reported on it.

Jeff Bezos of Amazon.com is joining the party for the first time, as are Jerry Yang and Tim Kugel of Yahoo and Bob Davis of Lycos. Many of the traditional media moguls attending the presentations and panel discussions will be eager to meet the new media powerhouses and possibly work some deals. Time Warner, Disney, News Corp, and Viacom have all made the internet top priorities. Making his Sun Valley debut is Richard Bressler, the former Time Warner CFO, who is now in charge of the company's internet ambitions. NBC and CBS will be chatting up the newcomers as well as the networks continue to continue trying to use their promotional clout to build internet dynasties. Frank Bondi will be seeing a lot of two former bosses who fired him, Sumner Redstone of Vival.

Viacom, and just recently, Edgar Brompton of Seagram. This year, the broadcast network guys here will be able to walk around with their heads held higher. Last year, they were the poor cousins struggling for their lives against cable and the internet and trying to cope with skyrocketing programming costs. Barry Diller began talks here last year with NBC, trying unsuccessfully to acquire the networks. Fascinating archival posts from the New York Post. Thank you for surfacing it. Andrew Reed.

Ross Hendrick says, is quoting Waste. wasteland capital. Wasteland says, we're at this stage of the market where any company that issues an AI-related, quote, unquote, partnership press release soars by 10 to 35% immediately. Obviously, except Salesforce. Ross says, yep, this is our version of 1999. Back then, it was adding.com that sent stocks up on autopilot. Now just announce a vendor-financed, quote-unquote, AI deal, and same result. The name change. The name's changed. The game remains the same. We know how it ends. I would argue that announcing deals, is not as bad as just, like, acquiring a dot-com domain? Yeah, slapping a domain on it is a little bit rougher. At least the partnership should generate, like, economic value if they play out. But it is very frothy, and it's clear that, like, it's become some sort of, like, meme or there's some sort of, like, mimetic contagion where everyone needs to. Honey, and the X-Chat says, bottom line is that Google has turned the tanker,

and the game is already over. We'll see, we'll see. We will see with Gemini 3. Well, speaking of turning the tanker, when you get an aid sleep, you'll need to change out the water tank every once in a while. But otherwise, it's a fantastic experience. Every few, every few months. Yes. How did you do last night?

I got an 84. I slept okay. Only six hours, though. I woke up a little bit early. Kids were a little crazy. Got an 81. Still very happy with my eight sleep. Congrats.

You got one at eightsleep.com. Speaking of water, McMaster sells supplemental eye wash with my eyeswashed with me. This is such a good, I hope this catches on. There's a McMaster reaction meme, pouring water in your eyes. Yeah, you see a post on the timeline that's not so great. Two 32-ounce bottles of McMaster water eyewash are $55 each. That is expensive. Okay, pull up this video of robot dogs.

Robot dogs, dressed in costumes, fill me with Joyce's Justine Moore of Andresen Horowitz fame. This is a robotic dog in a diner. dinosaur costume of some sort. Look at that. I like this a lot more than just the normal robot dog. This seems like low-hanging fruit that everyone with a robot dog company should be doing. It's hilarious looking. And it seems like the kids love it. It's a lot less scary that way. I feel like it's a lot more like, you know, less Terminator. What do you think, Tyler? I mean, we got to get some kind of robot. We really do. We really do have to get a robot. We could get so much good business value out of it. I agree. I agree. Have you, have you

You looked into the APIs at all or what you can actually do with one of these humanoid robots? I mean, on the unitary, like, most of the videos you see of the unitary, like, fighting or walking around, it's just from, like, Ph.D. Labs. Yeah. So it's just, like, I don't even know if there is software that comes with the robot. Oh, really? I feel like you would at least come with, like, a, you know, basic Xbox controller so you could, like, do a basic walk cycle.

Like, if they're not even shipping with that, that's a crazy, crazy move. I mean, it's mostly for researchers to buy. I assume it's so cheap. It's wild. We really do have to get one. It's going to be kind of creepy, kind of crazy. Well, in good news, Goldman Sachs has announced Q3 net revenues 15.18 billion. Let's ring the goal. Founder. There we go. We love to see it. And if you want to get in on the action, whether you're longer short, head over at public.com. Investing for those who take it seriously, they got multi-asset investing, industry-leading yields, and they're trusted by millions. I think more startups should just post a picture of their net revenues like this. This is amazing. It is amazing. This came from the official Goldman Sachs account. It's pretty, pretty sweet. Anyway, that picture, that, that video of the dinosaur reminded me yesterday,

one of our nannies did something cool. They took a video of our actual backyard, and then they use SORA to make an animated video of one of my son's, like, toy dragons that flew into the backyard and landed. Wow. And, of course, he absolutely loved it. He was just, like, freaking out. There's, like, a dragon in the backyard or whatever,

and I was just thinking my immediate thought of this is amazing, but at the same time, like, is it good that my, like, three-and-a-half-year-old, like, thinks that a dragon was actually in the backyard? Yeah, you definitely have to say, like, this is from the computer. It's like when you draw with a pen and paper. This is, you know, not real. It's imaginary.

But does a three-and-a-half-year-old actually have you? Eventually, they do process that, you know, they learn that, you know, cartoons exist and animation is not real. And so I think that you can instill that over time. But we have our second guest of the show, Andrew Ross Sorkin, the author of 1929. There he is. Thank you so much for joining. Congratulations on the book.

And thank you so much for joining. thank you for having me i was just checking my um my score on my eight sleep oh really i was because of you guys i'm a i'm a big fan of matteo's forever um they've done an extraordinary job and but i was going to tell you i really did not do well last oh no all what you got 43 last night i got an 84 but my oar ring okay i don't know if you guys ever compare no my oaring has me in the 70s so it's i don't i don't know what to do. Sometimes I, do you ever turn the mattress off in the middle of the night? I, turn it back on because it's too cold. So sometimes I get too cold. Okay. And then I need to get

back to sleep. So I'm like, I got to turn it back on. Yeah, yeah. I think you got to do a software update. Yeah. You got to get on autopilot. I have noticed that if I, if I, if I, if I, if I, wind up piling into the bed over time, I will bail, go to a different bed. And then the eight sleep gets all confused because it's like, why is this four-year-old in here? How, how do we track how Oh, a crazy heartbeat. Crazy heart. I've had that. My daughter slept in the bed.

Crazy. Like, all of a sudden, you're like, is there something wrong with it? Yeah, yeah. There are limits to technology. Well, I think it's as fair to not sleep that well right before a day like today for you. Yes. A day that you've been working towards for how many, how many, when we were hanging out off the air,

you said this has been like a seven, was it a seven year? Seven or eight years, I think. End of 16, early 17 is when I really sort of began. down this road to write right about 1929. So here we are. So you predicted the AI bubble all the way back then and you said, I'm going to drop the book right as everyone's talking about a new bubble.

Right as everybody's talking about bubbles popping. No, to be honest to you, and it's actually funny that the book is coming on now. I thought I was writing a story about the past. And the truth is it is a story about 1929 and all of the shenanigans and crazy things. And I just really wanted to write a sort of cinematic

character-driven narrative of that time. I always loved books like barbarians at the gate and den of thieves and things like that and nobody had really written a book about 29 like that i had gone on this wild vacation years ago where i downloaded a million books about 29 there's some really good ones but no one told you like who the people were and what were they saying to each other it's all about the people and then i found these transcripts and and uh depositions and all sorts of things i said okay maybe i could do this but as i was working on it it was weird because eerily there were things that were clearly happening in the 20s that all of a sudden, I'd seen the headlines today, and I go, oh,

okay, tariffs, like, that's a thing. You're seeing some of these circular deals, that's the thing. Like, there was a whole bunch of, I mean, some of the stuff that's going on with meme coins, that's a thing. So, yeah, it gets, it's a little nerve-wracking, but I don't think we're going off the cliff just yet, I hope. Yeah, well, we know who the characters are today, but I'd love to know who were some of the key characters that stuck out to you that you identified, like, you want to draw extra focus towards this particular person? I mean, Churchill sticks out, but who else? Or maybe you could tell me the story of, like, how you thought to integrate Churchill into the story, and then we can talk about some of the other characters that stuck out to you. Well, Churchill was just almost an

accident. I didn't realize Churchill happened to be in New York, literally the week that the crash was taking place. He'd actually been down on the stock exchange. What did he know? Big dinner that was taking place the night of the crash with every major banker, and frankly, every major character in this book was all going to dinner with him. And I thought, okay, so now I've got to figure out everything about that because I've got to set that dinner up and really understand it. He was, by the way, in New York because he needed money. He also loved the stock market.

He was getting loans like crazy. He totally got the bug. He was investing. And he also, as you might imagine, lost. But really the big characters in this book, a guy named Charlie Mitchell, who really was probably the, it was almost like the Jamie Diamond of his time, maybe more like Michael Milken in certain ways. But, I mean, he was super famous. He was like on the cover of magazines. This was also a period where all of these guys also became celebrities for the first time.

That happened in the 1920s when, you know, Time Magazine would put these guys on the cover the same way they'd put Babe Ruth and Charles Lindberg on the cover. So sort of like what we see now, you know, whether you, Sam Alman or Elon Musk, or whatever, that really, that whole kind of celebrity CEO, that started then. And this guy, Charlie Mitchell, ran a bank called National City, becomes Citigroup. If you're a New Yorker, he lived, by the way, on Fifth Avenue, between 74th and 75th, which is where the French consulate is now. So there's a beautiful building. That was his house.

I mean, like these guys lived like Kings back then. And he really invented modern credit in terms of lending it to people. people to go speculate, or not it shouldn't say speculate, but invest. And ultimately, a lot of people speculated with it. But including Winston Churchill himself. Including Winston Churchill himself. By the way, he was staying at the Plaza Hotel, Winston Churchill. A brokerage house had opened, the E.F. Hutton had opened inside the Plaza. I mean, these brokerage houses were opening up like Starbucks on the corner of every street. And you could go in and you put down a dollar. They've loaned you $10. I mean, like virtually sight unseen. And there was no

prospectuses or anything like there's no SEC no nothing so at best you'd get like a leaflet but i mean 10x leverage now that's low i mean i see people with 50 100x leverage yeah we we learned our lesson go bigger so that so so Mitchell was really sort of the at the edge of that and really building that and the other character that really drove me to write this book was so you had charlie mitch on one side and then you had a guy who you probably know carter glass uh Steele, which is a bill in 1933 that gets put together to break up the banks. But Carter Glass was a senator in Virginia who was like the Elizabeth Warren of his time. And he would rail about this thing called Mitchellism, how he thought Mitchell and Wall Street were going to ruin

America. And speculation was going to go rampant. And someone had to stop these guys. And it's really a bit of a story, the clash of these two remarkable figures. And then there's so many other sort of fascinating entrepreneurs along the way, a guy named Billy Durant, a guy named John Raskob. John Raskov is Elon Musk. I mean, I got to tell you, John Raskob created credited General Motors, became an amazing investor, then takes all of his winnings, decides to get into politics, a little Elon-like, decides to back Al Smith against President Hoover. By the way, loses, then decides to spend his money to almost undermine Hoover's reputation. Hoover has a terrible reputation. I actually think John Raskop had this secret campaign going that gets exposed that really, I think, did a whole number on Hoover. And then he creates what was then probably like the SpaceX of America. He builds the Empire State Building. So he also has 13 children. So there's a lot of similarities there. There's a lot of similarities. Yeah. It's so, I mean, yeah, as you get into this is just incredible proof that product,

and technology changes, and people have just seemingly don't at all. It's just the same kind of behaviors over and over. But the truth is, and this is the part that I'm always, like, grappling with, and I know you guys spend a lot of time with these amazing startup founders and entrepreneurs. You need some speculation in the system. Like, we always say speculation is a dirty word or bad word. But, you know, the original investors in SpaceX or in Tesla, probably thought the whole thing was insane.

We're speculating. And you need some of that. You really do. And so the question is like, how do you create a line where, you know, you have enough of that to create that innovation,

but it doesn't go, you know, totally parabolic and out of control. Yeah. I mean, it feels like the answer is probably like you can't have some sort of systemic risk

that just brings down the whole thing, right? And I want to know about the reaction to 1929. I mean, you mentioned Glass Eagle. That's four years post crash. yeah what were like the tools in the tool chest yeah and also the key takeaways like hey some of the speculation was fine maybe that's that that that can drive industries forward but

let's not do that again so i think a couple things first of all leverage to me and i i wrote about this in too big to fail in 2008 leverage is to me like the the match that lights the fire every time when you have too much leverage in the system that is that is the problem you can actually have a lot of crazy things happening, but it's the leverage that really exacerbates it and is the accelerants. I think you have to watch for that. I think politically, interestingly, we talk right now about the Federal Reserve and Fed independence and things like that. Back then, the Fed knew that there was a problem with speculation, and they didn't really do anything about it or enough about it, partially because they were worried about the politics. They were worried because they were

such a new institution. They were born in 1913 that, you know, not just they'd get hauled in front of Congress, but maybe they, you know, the Fed would effectively disappear. And then once the crash happened, instead of flooding the money, flooding the system with money the way Ben Bernanke did, who, by the way, learned that because of the Great Depression and studying that when he was at Princeton for his Ph.D. We, there was almost like, no, pullback. Nobody was flooding the system with money. Everybody was in this, you know, crouched position. but you almost have to do the politically unpopular thing and flood the system with money.

Then you had a whole series of other dominoes. You know, you had Smoot-Hawley, which was the tariffs, 1930, tariffs happened. Global trade drops by 60% as a result of that. Hoover's trying to raise taxes at this time. That's the worst thing to do in a moment when the economy is faltering. So I think there's so many different things. And then setting up the SEC was super important because so much of what was messing up,

the market was, in truth, manipulation that wasn't really illegal at the time. So talk about insider trading. There were groups of people. They called them investment pools. And in fact, I would say it's sort of similar to what goes on with some of the meme stocks where people have like telegram groups. Retail armies. Yeah, Reddit Threads.

These were the original retail armies. These were the original retail armies, but they were typically the wealthy. So it was the elite doing this. This wasn't a democratized version. And they had it all to set up. And it would almost be like actors down on the floor of the exchange. saying, you know, I'm going up for 100, you 200. And it was sort of out of the open.

Like, some people knew that there were pools in, like, for the next two weeks, there might be a pool in a stock. And so then other people would try to jump on the train and hopefully try to jump off the train before the road got pulled. Yeah. But obviously didn't happen. Who was on the right side of history? Ooh, the right side of history.

Like, as in, as in, right now, right now everyone's calling it a bubble, right? So, and presumably that's so that they can go back and quote, you know, two years from now they can see like, look, I called it, right? And there's actually some in, in 2021, there's an iconic post from Keith Rabeau, where he basically called the top to the actual day. And so there's a lot of incentive to call the top and get kind of the aura of having that insight at the right moment or maybe just getting lucky. but I'm curious if anybody, you know, pre-1929, was basically saying, like, two people. So there was a guy named Roger Bapson, if you know, Babson University, by the way, he founded it. And he created what was called the Babson break. It happened in September of 29.

And he had been out there. So this was a little bit like, you know, the clock strikes midnight, you know, it is going to get there eventually. He was out there for like a year or two or three before saying the whole thing was going to come undone. So that's one, Cassandra. Charles Merrill of Merrill Lynch. He was out there in 28 saying there's a problem. And then I would say the big winner was a guy named Jesse Livermore. Jesse Livermore was a shortseller who made probably about $100 million.

He's the most interesting character. I mean, if you get into this book, it's just fascinating all the things that were going on with him. But he was a real trader. By the way, he lost most of that money a couple years later. He made some of it back, lost him back. and then, in truth, ended up killing himself up on 5th Avenue at Sherry Netherland in the cloak room, literally went in there in 1940 and shot himself in the head. So, you know, hard to say.

The one thing that's interesting about being a Cassandra is interesting. So Charles Merrill was out there in 28 saying don't invest, and he was right and he was wrong. I mean, he was right in that, obviously, the Depression took a really long time. So he actually probably was righter than most. But, and this is the question for most investors, the market between the beginning of 28 and September of 29 was up 90%. So if you had not been in the market during that time, you would have not participated in those ups. And so that's the question. You know, I was talking to Paul Tudor Jones about a week ago, and he said, I was asking him this question about bubbles.

He said, I think we're in maybe like October 1999 right now. And I said, oh, that's interesting. Okay, 99. And he said, but there's still, if you said, if you remember, October 99, there was still a 40% upside. Yeah, for six months. Six months. So you got to know when to get on and off the train. And that's the hard part.

Yeah. How do you think about tariffs then versus now? Because it feels like the narrative at least is that there's a bubble is, is inflating generally, but also we're seeing. high interest rates, tariffs, there's a lot of tools in the tool chest that could kind of come down if there was a sell-off. But it sounds like in 1929, a lot of this stuff happened after the fact, like the government moved too late. What was the mood around tariffs and just anything that was done beforehand that was a potential mitigator? Like, could it possibly even worse?

Well, you'll laugh because just like the past, call it six or eight months, you know, all of his economists were writing these letters, open letters in the papers to Hoover saying, please don't do the tariffs. We beg you not to do the tariffs. The CEOs of the banks were all going to visit him in the White House. And he had run on tariffs because he was trying to get farmers to vote for him when he was campaigning in 28. So he thought this was like a pledge that he had made that he had to follow through on. And that was a big part of what was going on. Obviously, similarly, you know, like a thousand economists write letters to Trump saying

please don't do this. The distinction I think today is back then it wasn't across-the-board tariff. There weren't these bilateral deals. And so maybe you could argue today these one-off, you know, individual deals are better deals.

In fact, one of the ways they tried to fix what happened after Smoot-Hawley was in 1934 they gave the President of the United States the authority, which is what President Trump is using today, to make these sort of bilateral deals. So you could, you could argue maybe it's more hopeful because there's a little bit more control today than what was happening then, which was just sort of broad-based. So you said there were retail armies, meme coins, circular deals back then.

Was there by the dip culture? Did that exist? Anybody in September, anybody in September that was like, nah, I'm still long. I'm buying the dip. I don't think they, I don't think they use the phrase by the dip, but there was definitely a lot of people who thought, you know, this can thing can only go up. And this was really the first time that people ever saw the market, right? So they were sort of not used to the ups and downs.

It's just up only. Up only. And by the end of it, I mean, you know, I don't know if you remember there's pictures in the book, but you've seen the pictures online. You know, all of those pictures of people who would be like standing outside the New York Stock Exchange during the crash like thousands of people in the street.

The reason they had all come down there was because when they were up at the brokerages, they couldn't even find out what was happening to their stocks because everything was at a talk about time and technology. They didn't know what, you know, the stocks on the board would be three, four hours behind. And so that was a huge thing in terms of buying the dip. I think they were just so scared

because they didn't even know. It would be like being at a baseball game and, you know, you'd be in the eighth inning, but you'd be betting on what was happening in the third inning. and not know what was really going on. How do you think about that canary in the coal mine of the retail trader? There's always this apocryphal, probably story from 1929 of like, I knew it was time to sell when the person who was shine my shoes was giving me stock tips.

How real are those anecdotes from what you found in your research? And then how real is it throughout time? You know, I think it's not a bad signal, but I think you've got to take a lot of signals. together. John Kennedy, Kennedy was the one who tells that story about the Shushine Boy.

And I remember people talking in the dot-com boom about, you know, getting in the back of a taxi cab and getting told, you know, buy some shares of Lycos or whatever it is.

So, like, that happened. I remember that. But I don't know if that's, you know, when it becomes such a part of culture. But now with social media and, by the way, all the amazing things you guys are doing,

I feel like the exposure, I got 15-year-old, boys who are twins and they're so exposed to this stuff just and I don't think that they're because of they I don't think that's because of their dad I think that's just like the culture and so I think it'd be harder to figure out today it sort of look at that as the signal we'll tell them to yeah it feels it feels like it's it's been a very unreliable signal at least over the last two years when it feels like I've had people yeah yeah yeah it's been sort of constant it's certainly maybe in 2021. If the Uber driver had like a crypto wallet pulled up, that was maybe a signal. But in general,

it's like there's so little friction to investing. It's so much so a part of American culture now that it doesn't feel, you know, it's lost. I mean, I don't know. I feel like every Uber driver talks to me about Bitcoin now. But I was hearing it from people in like 15, 16. I don't know. It's been kind of consistent. Take me through a little bit of the actual research process for this. I imagine it's like one big, long chat GPT. I wish chat GPT existed when I started this project and actually worked. Maybe my next book, AI, will be able to help you. But I mean, that's part of it.

I'm assuming a lot of the sources that you use for this book are not in the data set at all, right? There are no data set. They're not scanned. It was wild. So what happened was I actually went to, the reason I really went down the road is I go to this library at Harvard University. I happen to be there giving this speech, and I'm looking through these documents, and I found out that Thomas LeMond, who ran J.P. Morgan, his secretary was keeping transcripts, basically, of his conversations with Hoover and Roosevelt. And I was like, oh, my God, this is amazing. I've got to find more of this stuff.

And the archivist said to me, you know what, Andrew, you're not going to be able to write the book you want to write. She had read too big to fail. and I wanted that sort of granular detail where you're like in the room and she said there's not like three or four archives in the country you could just go to and just excavate it doesn't exist

and so I think I took that as a personal challenge really and ended up going around the country it was almost like putting puzzle pieces together finding depositions and transcripts I got access for the first time to the Federal Reserve Board Minutes

from 29 in New York they'd never been made public so that really created sort of like an undergirding I got this memoir that had never been published and a whole bunch of other things that really sort of helped me create the story and sort of a technology thing, mother of invention,

it wasn't chat GPT, but during the pandemic, I got stuck, all of a sudden I couldn't get into libraries. And the only people could get in were students sometimes who had like a dissertation that they needed to do. So I would find the librarian to find me students and i would pay them by the hour and i would say go in there find box 152 and take a picture with your phone of every single page and drop box it to me wow and so i did i did it i it was actually a very helpful um helpful thing and then i will say one thing about chat gpt to its great

credit it was too sad because it was too late for me too late for me at the bitter end of this project i'm doing the fact checking i had a handwritten diary of a guy who was on the board of the fed and i only was able to read like two pages of it. The whole time, I'd give it to handwriting specialists and things. Nobody would say. Oh, because you just couldn't understand. You could see the words, but you just didn't know what the... It was too messy. Terrible handwriting.

Chicken scratch to me. So, I'm doing the fact-checking, and I had as a PDF because I had taken pictures of the pages. And so, I don't know what happened to me. I just said, you know what? Screw it. I'm just going to put it in chat, GPT. Maybe it can read it. Wow. Decipher the scrolls.

It wasn't perfect at all, but I was like, oh, yeah. yeah, that is what he's trying to say. Oh, and that matches that. So I do wish that in some ways I had access to AI, because I think that, I don't know, I don't think the story would have been totally different, but maybe some things would have come together in a different way.

Yeah. Do you think part of why the crash was so bad was just the lack of high-quality, real-time data that the various players had to make decisions on? It feels like, it feels like you would have just been, if you're just wildly confused about what's going on and you have people banging on your office door telling you one thing, and it just feels like it's hard to actually create a plan

if you don't know how bad the damage is, how widespread it is, who the different players are. I'm sure people were actively trying to cover up, you know, bad things that they had been doing as well, right? That kind of thing tends to happen. Totally. So two things. The guy, Charlie Mitchell, that I told you about before, his bank almost goes under because the bank bought two.

The bank was trying to buy back its own shares during. all this, and it bought back too many, and it couldn't afford to buy them. And so he didn't want anyone to know. So he actually goes and gets a loan, personal loan, to buy the shares off the bank. Okay. So, I mean, it was wild. And then Jesse Livermore, this trader I was telling you about, because he didn't, because he was so worried about the issue of having bad information, he paid for his own people to

be on the floor so then they would call him. It was like Citadel, placing, you know, their computers next to the exchange. he would place his people on the floor. That's you in the archive during COVID. You're doing the same thing. Real time information. Exactly. Yeah, it's the same thing.

Did they have revenue backlogs back then? That I don't know about it. Well, can you talk a little bit more about your process? I mean, obviously you're incredibly busy. How do you get in the flow state to actually write a book? Do you write one chapter of time, kind of outline front to back revisions? Like, talk about your process as a process. author. So I'm one of those writers, and this is not good, I don't think. I really can't write

one sentence. So let me say it this way. I don't really like to write the second sentence, less the first sentence I'm happy with. I'm one of those people who, there's some people who splatter on the page, meaning they sort of throw everything down and then they think they're going to fix it. I sort of have a view that whatever gets sort of put on the page is sort of anchored in a way. And so I can only only upgrade it maybe one letter grade. So if it goes down as a B, I can edit it and make it an A. But if I just splatter it down as a C, it's never going to be better than a B unless I start over again. So that's a little bit of a thing for me.

You know, this project went on for so long that I would write lots of little parts of it, little scenes, vignettes. And so I had these almost like puzzle pieces, and then it was about connecting them. And I think the hardest part for me, just given the, you know, the things I'm doing with the New York Times and CNBC and my dealbook stuff is for flow state, I can't, my wife would sometimes say, oh, you have half hour, 45 minutes, you want to go work, you can go work on the book now or whatever. And unless I really had two hours, I couldn't really do it because the first half hour, 40 minutes, I almost had to rev up. Yep, totally. So that's a thing. That's a real, I think in the, I don't know, in the creative world or what, it's. I think you do need to get into that flow state, and that's hard.

And, you know, I've got three kids, and sometimes I actually try to write with them, like, I mean, like, hang out with them and have them around. And that can work for me sometimes, but I have to sort of, like, really get super, super dialed in. What were, what was the 1929 of 1929? Like, what were folks in 1929 looking back to and being like, this is just like 1863? History doesn't repeat, but it rhymes. Yeah, exactly, exactly. Like, what were they referencing?

It's such a great question because the truth is they weren't. They weren't. For the most part, they really, because I think that this was such a first. Sure. I really think it was that the 29 was such a first in terms of that break. Maybe what they would say, so there was a break in the market in the early 20s, 20 and 21, there was a break. Yeah. That was substantial, but most people hadn't experienced it really.

Because, again, it wasn't until 1919 that people were even, started to think about taking on debt or anything like that in the country to then go to trade. It was really a function of General Motors, by the way. General Motors started loaning money to people to buy cars. It was a moral sin in America prior to that really to take on credit. Like that was a very grubby thing to do before that. Have you looked into tulip mania at all? It's like referenced so often. And then I've heard stories about, you know, nowadays. Back then they didn't. Back then they were not doing the tulip thing.

I've heard that it's like, it was actually very short, it was very isolated, it was not global contagion, and maybe some of it was not even as big as, it might have just been somebody wrote down an extra zero in their accounting that day or for whatever reason. But yeah, it's a, it's a fascinating story that now has just grown and grown in infamy, but maybe actually wasn't as big as something like 1929, that deserves a huge book. Maybe that's a slim volume. Maybe, yeah, yeah, maybe, maybe. How do you do three hours of live television? a day. How do you do three hours?

By the way, I just want to tell you, I really admire what you guys are. I didn't even get to say this. We've now gotten a chance to meet each other a couple of times, and it's just a joy to be on with you. I think what you're doing is amazing, and it's really, really cool to see your success. I was so thrilled to see that piece in the New York Times over the weekend. I appreciate it. Well, you're a hero to us, and my favorite, we've said this line on the show before,

but when we got to hang out in New York a few months back, you said something to the effective. I do TV on my way to work and hearing about your process with this book, it's clear that you're an absolute workhorse. Yeah, when are you guys publishing a massive, extremely well-researched book? Because, like, it seems like this three hours of the TV is really taken out of you guys, and it is. But hopefully we will learn and develop the muscle memory in the flow state and whatnot.

There's a lot to learn. This is a long game. We've learned that. So thank you so much for doing it. You guys are doing it. It's an honor to have you on the show. I cannot wait to get into the book. we'll have to, we'll be pulling more.

I'm just sad that I'm not in person and there's no gong. I'm at an ad hoc. Hit that gong for Andrew. One of the most well-deserved that we've had in a while. Thank you so much for being by. Let's do this again soon and have fun on the book tour. I feel like you gave us the perfect amount. Yes.

Like a little teaser, a trailer. We still need to get into it. It's great to see. Thank you so much for stopping by. You're the man. We'll talk to you soon. Cheers. And if you're watching or listening, please go pick up.

the book 1929. It's available now. You can get it on Audible. You can leave it five stars. Leave a review. Leave an ad in the review. I think maybe you can technically do that. You probably get banned. Leave an ad for Squackbox. Leave an ad for deal book. Yeah, I was, uh, to help out. I wanted so badly to put the audible on last night as I was falling to sleep, but I would have had to wait a few more hours, but, uh, that's going to be my night. Yeah, I think the audible is probably, uh, 40 hours long or something. So you listen to it at 10x. Yeah, so consider taking off next week and just

walking and listening to 1929. No, this is going to be a fantastic book to dig into. Tyler wants this copy. It's so cool because there would have been a way to, Andrew could have done this book in probably a year, two years. He could have sold a ton of

copies by just using he would have made it, it would have been entertaining but the fact that he went and spent seven years, like actually doing it properly, even though, uh, even like, he just really cares about fundamentally creating a, a great product. So, well, we have another offer, another author joining us in the TBPN Ultradome. Brian Potter is in the Restream Waiting Room. He's the author of Origins of Efficiency. Thank you so much for joining us. We love Stripe. We love Stripe. We had Privy on. We've had Dorcasian. We've always

enjoyed Stripe Press's books, and it's a pleasure to meet you. How are you doing? I'm good. Thank you guys for having me on. Thanks so much for joining. Would you mind kicking us off with an introduction on yourself and the book, and we can go into a bunch of questions about it, but I'd love to just kind of get a little bit of background for everyone on your journey to writing this book. Yeah, so I am a senior infrastructure fellow. I work for the Institute for Progress, which is like a pro-progress think tank. I'm best known to the extent that I'm known for writing this newsletter called Construction Physics, which is about buildings and infrastructure and how to get stuff built

in the U.S. And my background, before I did this, I worked in the construction industry. I worked as a structural engineer for about 15 years, like designing buildings and parking garages and water treatment plants and stuff like that. And the industry always seemed like extremely inefficient to me. like, you know, everything is so labor intensive. It takes so long. You know, we're doing this similar work over and over and over again.

It should be much more efficient. Should all be done in factories, blah, blah, blah. And then in 2018, I had the chance to join this, like, big, exciting construction startup called Katera that had raised. This was back when SoftBank was. I remember Ketara. Yeah. Let's give it up for Moss.

It was kind of a precursor. I think Hadrian was drawing from it now. It was, like, machine shop almost. Yeah. It was like, you know, it was this idea is like, you know, construction isn't efficient because it's not done in factories, right? So we're going to into factory-based construction. It was run by all these former electronics manufacturing guys. So like not like software guys that think that, you know, that like, oh, I worked at Amazon so I know how to do anything, right? It was like people who knew about manufacturing. And they were going to sort of bring that knowledge to like the construction industry, right? So they raised a huge amount of money, got a huge check from SoftBank, raised like. like two, three billion dollars in venture capital. And it all went sideways, right? It all, uh, it all went wrong and they, they burned through it in about three years and declared bankruptcy. And there were various, yeah, reasons for that. At what point did you, at what point did you leave? Uh, I was there about, until about a year, uh, before they went bankrupt.

So I was there, did you see the writing on the wall? Yeah, I, when I was there, I was saying, And it was like, but my time there was like a year and a half of ups and then a year of downs. And then after about the sixth round of layoffs, I, I, with, you know, after our engineering team got cut by like about 90%. I was like, hmm, I need to time to bounce. Saw yourself out. Yeah. Yeah. But I wanted to understand, you know, why things had gone so wrong.

Because part of it is just, you know, startups are hard. Building startups that are, you know, moving physical things around is very hard. there's various operational missteps or whatever. But also I kind of came to believe that sort of the thesis that they had built the company around was kind of either wrong or just like not complete enough, like missing very large chunks of it. Because people had tried to do similar things that Katera had done many, many times. If you go back over history, there's like a huge graveyard of companies that are like, oh, you know, light bulb will just build buildings and factories and it'll be so much cheaper.

and I'll be able to make a huge amount of money. I'll be the Henry Ford of housing. And it just has never worked, right? There's like people have tried this over and over and over again and not been able to succeed. Will it work? Because I have an opportunity to invest. I'm a lucky opportunity.

No, no, I actually did meet a company that's taking another crack at this. Do you think it'll ever work? I do think it will work. But again, I wanted to understand why specifically it had been so hard in the past in Waikatera and so many other companies. that have failed and what specifically, you know, would need to be true for it to succeed in the future. So it was basically that where I ended up was like, I need to understand what specifically makes it possible for an industry to get like more efficient over time and what specifically

is happening when that is occurring and what is, what sort of can prevent those things from happening. And once I understand those mechanics, I will be, you know, I will know. what specifically would need to be true for some uh for some you know the construction industry or any industry to sort of improve over time and so that was sort of the genesis of the book it's like what specifically does it take for some process to get more efficient yeah it feels like the entire book is kind of an abstraction on top of just this idea of like learning the learning curve we've seen this in semiconductors everyone who follows like the AI boom is uh acutely aware of the learning curve that happened at tsmc uh but you kind of draw a couple other

historical analogies, what stuck out to you as like particularly great examples of this efficiency in going successfully and us actually driving down the cost. And then what were the commonalities between that and like what do they all have in common, basically? Yeah. So I kind of went through and I looked at like, you know, dozens and dozens and dozens of different industries and seeing, you know, how they had improved their operations over time and what specifically was changing in them when that was happening and sort of you know and I looked at like industrial improvement systems right so like lean manufacturing and like value engineering and all the statistical process control and all these other things that like had you know specific ways you could try to make something more efficient and I kind of ultimately boiled all that down to like this this you know a list of like a handful of things that you had to do to try to make some process more efficient and if you could do any one of those things you could kind of make it more efficient and if you couldn't do those things so those paths were blocked As it turns out they are in the construction industry, you can't make your process more efficient, and it just gets more and more and more expensive over time. And so, yeah, I looked at like a lot of different industries.

I go really into, you know, Henry Ford and how he sort of dropped the cost of the Model T. I look at sort of the evolution of like nail manufacturing, which is in the sort of the 19th century, go back even farther, and how they change the technology to make over time to make nails, which started out with like hand-forged nails, like a blacksmith like hand. and steel, and they found a way that machines that could sort of emulate that process. And they've replaced those machines with even better machines and so on. So there's like dozens and dozens and dozens of examples in the book of sort of specific things that have gotten cheaper over time and the lessons that we can kind of learn from those things. How naive is it to just say, what's remained stubbornly high cost-wise, housing, medicine,

education, what are those having common regulation? How naive is it to just throw regulation is the problem at those particular industries? That's a big part of it for sure. I mean, the problem is that like everything has gotten more regulated, right? Like manufacturing included. So it's like that's like part of the puzzle, but it doesn't really tell you the whole thing. Because even in place, you know, the problem, you know, to take it back to construction. The problem of like construction productivity and not getting cheaper to build stuff is really something you kind of see around the world.

I have a graph in there that's like construction costs in like a variety of different countries and they all kind of this scary line of going up and to the right over time. Even the countries without building codes and onerous HOAs or like less labor

or like different regulatory regimes and stuff and there's certainly places that like do better than the U.S. and in various things like in various ways of building the U.S. is like very far from the efficient frontier but we have a very hard time of like pushing that efficient frontier for it. So like regulation is like a big part of it, but that's kind of

one of those sort of things, I think, a takeaway is from the book is that it's not just regulation. Like you could have all the, you know, remove all the regulation you want and you'd still run into these sort of various physical constraints and market constraints that prevent these sort of efficiency improvements in some cases. How are you thinking about energy in America? We've gone through this AI boom now where we've scaled up the existing capacity of data centers. We're building new data centers, and it feels like the last link in the chain is, can we build 100 nuclear reactors in America in 2030 to stay on track with, like,

the most aggressive projections? Is there anything unique about, obviously, energy production is a construction problem, but is there anything unique that you found in the energy industry that folks might be able to learn from? Yeah, I'm, well, you know, I read a lot about, energy on the newsletter. I don't have a background in energy, so it is a lot of me, like, grope in my way towards, like, some understanding

of how this industry works. I'm a really big solar guy. Solar has, like, a really lot of nice properties that, like, makes it easy to sort of make efficiently at, like, very, very large scale. There's this really interesting paper, but basically it's a, like, big graph of, like, the sorts of energy technologies

that have become cheap and the sort of energy technologies that have not to become cheap, and the ones that have become cheap are these sort of things that like you can make repetitively in very large volumes and you don't need like a lot of customization of and so like solar panels which are like you can make in like really really really really enormous numbers and you can kind of plot down wherever it doesn't need a lot of like sites specific customization are kind of in this like very cheap quadrant and then something like a nuclear reactor which you make in like much much smaller numbers and like needs a lot of like specific design for the specific reactor that you're building is. sort of in the much more expensive quadrants. And so solar and the batteries which like really complement them really nicely is like a really good way to sort of make this stuff really cheap. These cost curves have like gone like down like a lot and there's like no sign that those

are stopping anytime soon. And so I'm, you know, that's just, you know, those, it aligns with like so much of what we know about what it takes to sort of make something inexpensive that I kind of see that I could bite it off a very large chunk of the energy that we produce in the U.S. Assuming, you know, take it back to regulation, assuming that sort of regulation interferences don't kind of get in the way. How often did you find capital being a constraint lead to more efficiency? I think every startup founder has like an example of a time when like maybe if they threw, you know, 100 people at a problem, they would have gotten a different solution. only had a handful and so they were able to create some novel a more efficient way of doing

something or we saw this with like deep seek and having having potentially fewer chips and creating a more efficient architecture was that a common theme at all in in uh in that yeah it's interesting i think there's kind of like two sides of it one is that in some cases like what a repeated theme of the book is that like scale is really really very very important important. And if you can, the more you can make of something, the more opportunities you have to make that less expensively. And often scale is like very, very expensive. Right. So like one of the story of like container shipping over time is a story of like needing really, really enormous investments to like build these big giant ships, which are like cheaper per container that they're

transporting, but very expensive overall. And also like really, really big expensive terminals to sort of handle those ships. And so only like a. certain number of, like, countries could, like, invest in these, like, giant terminals that were needed to sort of service these huge ships. And so, you know, costs of transporting these goods fell a lot, but, like, there was winners and losers in who sort of gained, gain from this technology development. And it was really the people who could afford to put the money into it to do it. But then, on the other hand, you also see cases where, kind of like you talk about with deep seek, people working under these constraints were able to come up with, like,

really improved ways of doing something that were much cheaper and much better than what was what came what came before so a kind of example of that would be like Toyota's manufacturing methods which like Toyota production system which evolved into lean manufacturing those kind of were created in this environment where like they couldn't develop these like mass production methods that Ford had used because their car market was so much smaller and it was so much more vary, they couldn't just make a million of a given model or whatever, that they had to find ways of producing this stuff efficiently that didn't require this, like, massive capital investment, basically. And so that was sort of the genesis of that, those ideas. And so, yeah,

I think there's definitely a case where, yeah, you need, like, a lot of investment to sort of find ways to make this cheaper, but then there's also cases where it's like also working under constraints of not very much investment has been important as well. Are you at all optimistic that this data center boom will teach a generation of people that you can build big things quickly and efficiently if you just basically put your mind to it because there's like a lot of from from an energy standpoint just like you know if you look at what what Elon is done with Colossus 2 he's basically doing the impossible a lot of people would have like looked at that project and said it's not possible and so that sort of

it feels like that sort of mindset of like we're just going to make it happen is being applied to data center development, but then presumably those people can say, I'm going to build a bridge and they can imply that same kind of approach elsewhere.

I certainly hope so. We're certainly building like an enormous amount of this infrastructure. Like it's really, really unprecedented. There's all these crazy stats like, you know, data center spending is now exceeded like office building spend in or something like that, which is totally wild.

I guess one thing that worries me is that historically people have been like, you know, not really cared about data centers. They've been happy to just like let them get built and the jurisdiction to sort of collect the tax revenue for it and not really worry about it beyond that. As like the build out of them is like going forward and there's like more and more of these centers and they're bigger and larger, you're really starting to see like a grassroots movement of people like, you know, the NIMBY's sort of now being opposed to data centers in a way that they weren't before. So like Virginia, which historically has like been, you know, a major

place where data centers get built and has basically been fine with them getting built there, now you're starting to see like residents oppose them more and more. And you're starting to see, you know, grassroots movements around in different states springing up to oppose these things. So that worries me a little bit. And I hope that. sort of forces of getting these things built and enthusiasm about building infrastructure are stronger than that. But, you know, it always seems like the NIMBY forces are quite strong. So hopefully they don't build momentum. They're O.P. I have one last question. There's this post by Rune who's talking about Dan Wang's new book. And he says the general elite

consensus now is that industrial process is a technology that lives in the heads of people. And he goes on to say that it was a mistake to let so much low value industry be offshoreed due to the loss of tacit process capital. And I was just wondering what your thoughts were on this idea of industrial process knowledge, that there might be a few key people that actually know how to build something at scale and just what the ratio, how steep is the power law of human capital when it comes to large scale industrial manufacturing efforts. Yeah, I think it's dead on. I think that's absolutely very important.

And I talk about that at various parts in the book, how it's often really hard to transfer like manufacturing or production technology from one place to another place, in part because it's hard to like pick up and lift these process knowledge. It's just in the heads or like embedded in this web of relationships. And so it doesn't necessarily even exist in explicit form, right? It's just like this is the system that turns out to work very well. And you can't just like recreate it because we don't essentially.

know how it came to be in the first place. And then, you know, we talked, you talked about a little bit of the learning curve earlier, and that's kind of this really similar idea where a lot of your improvements of some technology over time come from just like the factory floor and learning how to sort of do this better and better over time, but it's very coupled with actually physically doing the work. And so that's one thing that, yeah, I think is really important, is that oftentimes just technological progress is coupled to sort of this like process factory knowledge of actually

having the experience doing things. One really fun sort of example of this is during the early days of the space race where the U.S. was having like a really hard time building their rockets. And there's a part where like, you know, because of various political things, the Navy was going to send up their rocket first. they were going to be like the first one to sort of launch a U.S. satellite into space. And Werner von Braun, who is the German rocket scientist

who then had been brought over to the U.S. and was working for the Army, he goes to some like military leader and he says, look, you can tell these Navy guys they can do whatever they want. They can take my rocket and they can paint Navy on the side of it and do whatever they want,

but they need to use my rocket and not theirs because my rocket will work and their rocket won't. And then what ended up happening was they didn't listen to him and the Navy launched their rocket anyway and it didn't work. It blew up on the pad. And then so finally they listened to Werner von Braun and this launched his rocket. And that's when we finally got a satellite into space using Werner von Braun's rocket. And then of course, Renovon Braun was like a major force in the Apollo program as well.

So it was like, you know, the German rocket knowledge that had accumulated during World War II was like very, very important. And both the Soviet and the U.S., their early rocket development. efforts were basically built on this German knowledge that had been accumulated. So this process knowledge and like this, you know, expertise that gets embedded in the heads of these people working at the sort of forefront of technology is not easy to sort of recreate. I think it's very, very important. Well, thank you so much for stopping by the show. The book is Origins of Efficiency from Stripe Press. It's available now for purchase. Highly recommend picking you up. One click on Amazon. And thank you. Stripe checkout, hopefully.

We will talk to you soon. Have a great rest of your day. Thanks. Thank you so much. Really quickly, let me tell you about adquick.com, out-of-home advertising made easy and measurable. Say goodbye to the headaches of out-of-home advertising. Only ad-quick combines technology, out-of-home expertise,

and data to enable efficient, seamless ad buying across the globe. Speaking of founder, we have a founder in the Restream waiting room. Let's bring him in to the TBPN Ultrodome. There he is. How are you doing? Good to meet you. Hey, I'm doing great. How are you guys doing?

We're doing fantastic. Fantastic. kick us off in an introduction on yourself, the company, the news. We're excited. I'm Harry Singh. I'm the founder and CEO of Flow Engineering. Flow is a collaborative development platform specifically built for next generation of hardware companies. Our customers design things like rockets, airplanes, cars, nuclear reactors, and they use flow to design, build, test, and iterate massively faster than they can do today. Basically, the way to think about it is we're taking the last 30 years of software development

practices, everything from Agile to continuous integration, continuous testing, and we're bringing that to the design of massively complex hardware products. Our news today is that we raised our series A with Sequoia Capital. How much? How much did you raise? We raised $23 million. There we go. Congratulations. Amazing. I love that you started building hardware yourself and then figured out along the way, I got to build SaaS. I got to build SaaS for this. What are you replacing most of the time? Is it a home phone system? Am I getting it right? You basically built an internal tool for yourself initially while you guys were building rocket engines and then realize like, hey, seems to be pretty valuable. Yeah, exactly. It's like a little

story of the company. I'm a mechanical engineer. I became an engineer because I wanted to build machines that matters, went into the industry, went to companies like BA systems and BP, and just realized the fundamental approach to designing hardware was completely out of date. So the company started out as a hardware company, not a software company. We were called the Rocket Company. We built the world's fastest design consultancy for hybrid rocket engines. The best people in the world could go from requirements through to detail design in 12 weeks. We could do it in two hours.

And the reason we could do it in two hours is we built this internal platform for ourselves called Flow, that massively integrated and accelerate the design process. And that's what became, it has become flow today. So are you, you're just simulating physics. Like, what is the actual, like, you're, I imagine you're basically, you're building a workflow and then you're able to, are you able to get a good read on if the process or the product will work without actually testing it in the real world?

Or what does that look like? Yeah, so let me give you the 101 on like hardware development versus software development. In software development, we have Camban boards and tickets and you build a spread, burn it down and you go for it. When you're designing something like a rocket

or an airplane or a car or a nuclear reactor, it's much more complex. The way that we fundamentally design and collaborate are using these things called requirements. Let's say you're building a rocket,

you'll say, hey, I need to get this much payload to this orbit. And then to do that, I need to design this first stage and this second stage and to do that. And you go all the way

from these top level requirements to very, very low level temperatures, pressures, masses, and design criteria that engineers will use day to day. The big problem is that when you're designing like a humanoid robot or you're designing a reasonable rocket or you're designing a self-driving car, you don't know whether those requirements can be met or not. Like 10 years ago, you would have these fixed requirements, you'd be able to execute against them, you'd build a big GATT chart and you'd burn it down. In a modern, massively complex system, our products are so complex that we have no idea whether we can design it. The requirements

are changing on a nearly daily basis, and the design is changing on a nearly daily basis, too. So what Flow does is a single source of truth for all of the company's requirements and systems information. And we glue all the requirements together, all the design together, and we have continuous integration between the requirement side and the design side, which enables teams to design and propagate changes much faster than they can do today. Are you aiming to go straight to Fortune 500, the Fortune 100, the biggest companies in the world that are manufacturing at scale and maybe it's a lot of steak dinners and a really hard pitch that you get a couple of those clients and you're in business or do you want to focus more

on startups smaller companies scale ups like what's the sweet spot for you right now yeah we um we think about this very deeply we regularly turn away Boeing and Airbus and these massive conglomerates so here's the way to think about it the hardware engineering mugged you can't you're like sorry sorry we're busy helping the next generation straight and ex-Boeing. Yeah, exactly. So the way to think about it is the hardware engineering industry is going through a generational change right now. And it's this generational change from old school waterfall. Think NASA, Lockheed Martin, to New School Agile. Think SpaceX and Andorral. The way that SpaceX, Nanduro and Joby and Archer work are much more

like software companies than traditional legacy primes. They don't do like top-down. They design bottoms up and things are changing on a nearly daily basis. very, very, very specifically built that new way of working. In the same way, this happened in the software engineering industry. So in the 2000s, we went from old school waterfall to new school agile,

and companies like GitHub came about to serve that market. Now, GitHub didn't go to IBM and say, we're going to build you a slightly better gancher. They went to companies like Google and Facebook when they were five people, and they said, this represents the new industry. And 10, 20 years from now, these small companies

like Google and Facebook, will be the mass market. And then when IBM and Oracle wake up, they will change how they work and they'll come to GitHub because they are changing to an agile way. So that's what we're doing. We're exclusively focused on next generation, aerospace, nuclear defense companies. We're growing very, very quickly with those guys. And we're making that workflow as good as it can be. How is it going in the Gundo? What's the update? Yeah. So this is like a global movement, but as you mentioned, the epicenter of the global movement is El Segundo. which is in LA. So everything from like rockets, airplanes, robots, cars,

autonomous submarines are being designed like the five or ten square miles, which is El Sigindo. El Sigindo is amazing. I think it represents something like 70% of our customers. And the companies in El Sikindo design and iterate at a speed that Boeing and Loki just can't comprehend. They're designing massively complex systems. They're designing and iterating them faster than anybody thought they could do. And that is the reason they will, become so much more competitive than the traditional primes that the traditional primes just can't keep up. And I imagine what an advantage that is for you being able to walk a few blocks and like see your product in action and actually get that real-time feedback and then just be on that same

iteration cycle with your customers. Yeah, we have a kind of crazy story, which is most of our like, most of the other tools in the market came from Elskindo. We actually came from London and we were engineers and we wanted to build and the European market just didn't want speed or at least the market back five years ago didn't want speed so we sold into traditional legacy companies and they fell in love with the dream and the mission but they didn't really use the software

and then the El Segundo market found flow and they pulled us into it and what started out was just one or two companies working in this crazy new way designing and iterating like a software company have ended up becoming the new market and that represents a really important part of our customer base. Well, congratulations in the funding news.

Congratulations of the progress. And good luck to you. Thank you for when you announce the B, come on over. Come on over. Thank you very much. We're like 20, 30 minutes from the Gondow. We'd love to have you. Oh, sweet.

I appreciate that. We'll bring the gong in person. We'll talk to you soon. Congrats to the whole team. Chat soon. And when you announce that series B, you know what you got to do. I know. Go over to getbezzled.com.

Your Bezell concierge is available now to source you. any watch on the planet. Seriously and watch, take a couple mill off the table and secondary, put in an F.P. Jorn. Put it in a Rolex Daytona. Deploy it. Put it in a pot tack. Get a couple aquanets. Before you get the starter home, yeah. Get a starter hitter. And then book yourself a vacation on wander.com. Find your happy place. Book a Wander with inspiring views, hotel great amenities, dreamy beds, top tier cleaning, and 24-7 concertator service. It's a vacation home, but better. It never gets old. Jordy.

I just saw it post that I'm not going to read on the timeline. That is funny. But anyways. Cool. Cool story. No, what I was going to say, I was going to check the timeline before we get off.

We have to enter our fourth and then fifth hour podcasting. I'm so glad. Jackson, Jackson Dahl is, I believe, already here at the, in the Ultradown. Breaking news.

And we're going to be doing his podcast right now. So head over there, subscribe. Go shoot him at DM. Turn notifications on to Dialectic and then you'll hear us talk more if you're not sick. Yeah, I don't know when this episode will come out, but if you message Jackson now or you comment on one of his posts, I'm sure you can ask some questions there. And we hope you have a fantastic evening. We will be back tomorrow for another beautiful day of technology. Hopefully it's another cozy, warm day, and we can put the fire on.

I know, I like having the fire on. We should have the fire on for Jackson's podcast. we'll well yeah we'll consult with him uh thank you so much for awesome we'll see you tomorrow see you guys tomorrow cheers thank you