TBPN Live - LIVE FROM HILL & VALLEY: Jacob Helberg, Delian Asparouhov, Christian Garrett, Josh Wolfe, Eric Glyman, Karim Atiyeh, Mike Solana, Keith Rabois, Qasar Younis, Shaun Maguire, Sampriti Bhattacharyya, David Friedberg, Joshua Steinman & more

Episode Date: May 1, 2025

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You're watching TBPN. It is Wednesday, April 30th, 2025. We are live from the Temple of Technology, the fortress of finance, the capital of capital. We're here with Zach White from 8VC at the Hill and Valley Forum, 2025 in the Capitol building. We're in the, we're in the literal Capitol, which is great. We're normally in the capital of capital today. We are the capital of America. Many people call this the capital of capital today. We're the capital of America. Literally all this, the capital of many people. It is, it is, uh,

we are here with Zach. Uh, can you introduce yourself? What do you do? What do you like to invest in? What do you, what's your takeaway from Hill and Valley so far? So my name is Zach white. I work at a fund called eight BC. We invest in everything from defense to a biotech healthcare. I spent a lot of time doing defense stuff and the Hill and Valley has been a crazy vibe. So far we had Hamas protesters. Oh yeah. We've had, health care, I spend a lot of time doing defense stuff. And the Hill and Valley has been a crazy vibe so far. We had Hamas protesters.

We've had a variety of different things happening here, so it's been great. Talk about the difference between this year's Hill and Valley versus the last couple of years. From our understanding, it's been almost an order of magnitude more people here this year. I think there's like 10x people here. It does seem like that. seem like that random influencers here

Which is awesome. We have people wrapping Teflon like it's oh It's an amazing vibe like it's like Coachella for you know people with g550 so Yeah, yeah, I'm sure the tarmacs are absolutely stacked right now Who who have you listened any of those speeches yet? Is there anyone that you're excited to hear? Who do you think is the best pitch for an actual concrete plan? Because there's a lot of people that are just like, we want better communication between tech and DC, but then there's other people that come with concrete things. We need to fund this. Yeah. I mean, I think Jensen, he was talking about how we need to just be like on-shoring

all of these like fabs and stuff. And everybody wants to be in and around, like think Jensen, he was talking about how we need to just be like on shore and all of these like fabs and stuff. And you know, everybody wants to be in and in is crazy around Jensen. So, you know, I think that he has like a really good plan on like what we need to do to make sure that we're not relying on China for all this stuff. And he was doing great. And then Brian Schimpf also, he killed it at Anderil. You know, there's a lot of stuff that they're doing right now and it's just really exciting to see everybody. The arsenal, right?

That is the most re-industrialized pill project right now. There's like a bunch of generals here and stuff. And they have an actual factory, not just hype videos, right? It's coming out. I think it was cool to hear from Jensen personally. I mean, we've seen these headlines around

Nvidia's investment in the United States and our big question historically has been, how much of that is really real? And it seems like he is extremely- Yeah, I have a few questions for Jensen. We wanna follow up with him is like, is he a customer of reindustrialization or is he truly a reindustrializer?

Because Nvidia is an American company, they fab with TSMC. TSMC now investing very heavily in America and Arizona, and we could see that go a lot further. In which case, I don't know why Jensen wouldn't want to buy chips from Arizona. TSMC, that seems very logical. Packaging with Foxconn. He's going to be very happy with that. But is there something that he can do personally to bring back jobs or create more manufacturing infrastructure in America? I don't even know if he has the tools or needs to do that, but that was kind of interesting.

Yeah, it's interesting how Foxconn is always doesn't seem to be in the conversation. It's so associated with China despite being a Taiwanese company. Totally, totally, totally. That they have the same incentive to in many ways. Next telling Valley, we got to get the CEO of Foxconn. Yeah. Terry. Yeah, that'd be sick.

That'd be very good. I think he just needs to start pushing demand here. There's so much demand. And if he starts reshoring it here, all of a sudden, there's going to be a lot of work that people need to do here. And I think that that's kind of just like what he was talking about at Hill and Valley today.

Yeah, the other line that stood out to me, he was like, some people, there's going to be new job creation, some people are gonna lose their jobs, and then everybody's job is gonna change. So it's like, you know, basically embracing that change, I think is important. Except, I don't know if you guys saw

the Marc Andreessen clip this morning, apparently VCs are the only things that stay. Yes, yeah. We've been saying this actually, I mean, I think it's actually, the job of an investor is somewhat somewhat in this You know, I would actually compare it to just to come to Mark's defense a little bit. I would compare it in some way to the job of a lawyer

Or a doctor where just because a computer can do something Well, you still want a human sort of like sign off on the investment and have responsibility yeah, because it's just not as satisfying to sort of like fire it's just not as satisfying to fire a robot, as it is to say, you had responsibility over this capital, et cetera, et cetera. The other big question I have is on the robotics side. I know you've done some AI investing. There's a big question in my mind.

Obviously, we've scaled up on the pre-training side and these massive data centers have been built out. XAI famously bought a ton of Nvidia chips. When does that start to happen with robotics companies? Because robots are generating a lot of data. At a certain point, you need to build the big transformer and you need to crunch all that data down. And I haven't seen any of the robotics companies. They're still early. And you see Boston Dynamics, you don't hear about the Boston Dynamics data center. You don't hear about the physical intelligence data center yet, but it feels like it's coming.

Jensen kind of put it as like a five year timeline. I think anything that we can do to get more sight lines on how that grows is gonna be really, really key to Nvidia because everyone needs a second act and Nvidia's like the king of the second, third, fourth act. It was scientific computing, then gaming, then AI and robotics. I mean after LLMs could be the thing that really drives like massive, massive GPU demand. What's your take?

Brett Adcock might be the guy here, but I actually, I really think that like you have to be like really talented at fundraising. You just need such an insane amount of capital. You need tens of billions of dollars to do this well. And so it's really going gonna come down to the people who can actually raise the money very well. And that's like a very small handful of people. Maybe Adam Newman could do it. Maybe Brett Adcock.

I don't know who else, but. I was kind of, I was hoping for a surprise Elon appearance today. I don't know if it's, I don't know if it's happening, but. It's probably around here somewhere. He's probably like, yeah. He's probably proximate to where we are right now. We should see go pop in

Yeah, that makes sense What what else is top of mind for you this week? I know in many ways you eight has placed so many bets in this sort of broad category That's relevant to where we are today that I imagine a lot of it's just kind of like, you know Being a part of this watching it play out Where where do you where Where do you, anything specific you're hoping to learn from today? I don't know, I just think that like, this was like this weird heretical space for so long,

and now you see like hundreds of people here all just like sort of reveling in the fact that, it's cool to do this now. I'm just kind of like taking it all in and I don't know, Joe from our fund has been doing this for so long and he always has this like pithy thing where it's like now This is the cool thing. What's the next sort of contrarian thing to do? And I don't know it doesn't seem that contrarian anymore, which is like really interesting It's you we see people who are doing all sorts of things, you know five years ago that are now here doing defense

Is there is there more like practical? Like or like tactics that you can do as a founder in an event like this maybe not just looking to get a feel for the vibe of DC but actually understand okay there there are dollars going towards this we can make this happen we can go after this pool of capital is this a place where you can learn that is that is that a reasonable strategy something that you should have like done some pre training yourself and learned a little bit about like sure who are the who are the deal makers here? Who are the people's with the pools of money? Where the programs a record? Yeah, like who are the guys and they're all walking around here right now

So you should have basically done your homework before and and walk up to the people that are actually in control Of where this money is coming from. Well, we got Dave Freeberg coming in for a couple minutes. Thank you, Zach Nice to see you Great to have you on Dave Show let's hear it for Dave Friedberg we will we are on a to your badge we're on a we're on a mission to get every single all-in podcast host on the show you're the first you're the first you're the first yeah maybe let's see how it, yeah, we're on camera here there everywhere. We are live How many people a few thousand growing it grows over time the more longer we stream people

Yeah, yeah, you mean you mean the live stream this very moment. Yeah, yeah Thousand saying the thousands, but now that you're here. It's probably gonna 10x maybe 100x Yeah, yeah Say in the thousands. But now that you're here, it's probably going to 10x, maybe 100x. Like go to 1020? Yeah. 1030? Yeah. That'd be awesome. What are you talking about today? So it's the same topic for everyone.

America leadership. Yep. America strength. Yep. China bad. America good. America good. America good.

I like this one. Technology reigns supreme. Yes. We must win. Yes. So that is the topic. Yeah. the topic yeah my every one of the topics is I think worded a little bit differently but they all have the same yeah in the same spot the same spot can you talk a little bit about oh hollow

and how you interact with the government because it's very different than like what we normally hear with like DOD I got to get a program of record the government's gonna buy my stuff but it does seem like it's important for you to interface with the government in some way. What does that look like for you? The seed industry has three regulators, it's the USDA, the EPA, and the FDA. So there are regulators, regulatory frameworks, and bodies in those agencies, and it's a pretty well kind of tried and true, but there's not a lot of procurement, you're not servicing the government. So DOD is very different. There's a massive industry here that tried and true, but there's not a lot of procurement, you're not servicing the government.

So DOD is very different. There's a massive industry here that services the government, but like a lot of other industries, agriculture is regulated to some extent, food is regulated. So there are regulators that we deal with, but we're not building a business,

selling it to the government and supporting government action. Are we over-regulated? Are we under-regulated? Everything's over-regulated. That is a matter of fact. I was talking with someone last night who I dinner with who works in the government about his observations coming in to the government and just how insane it is.

We were talking about why that is and I think like every organization has a fundamental incentive to grow from a couple of different points. You as an individual start out as an individual contributor in a company, then you get promoted to be a manager. Now you're managing two or three people. So your career progression ultimately is I want to manage 20 people. I want to manage a department. So when you have that incentive model within any organization, whether it's a school, administrative bureaucracy or a startup or the government,

there's an incentive for people to want to get more resources. So every year, everyone says, not what can I do less this year, everyone says how can I do more this year? And the answer is always I need more people, I need more budget. So the natural flow of any organization,

nonprofit, school, government, company, over time, get more money, grow, add more people, and ultimately you end up seeing all of these things that don't necessarily map to the mission of the organization, but they're created to meet those incentive models. So in the government, we have a lot of regulatory overhead, like the guy I was talking with, he's like, I cannot believe the regulatory processes

that we've created for no reason. It's just stuff that came out of the blue. So this is true in energy, it's true in agriculture, it's true in drug testing, it's true in so many different markets that I think it's starting to become apparent to a lot of these outsiders who are now stepping into the government that there's an opportunity.

Now, last year, the important point, that there was a Supreme Court case where they struck down what's called the Chevron Doctrine, and the Chevron Doctrine basically vested authority to the agencies to regulate their industry however they see fit. Meaning the courts always said, hey, whatever the agency says is the way we need

to regulate, we're going to rely on them. And that was the Chevron case from years ago. And what they ended up saying is like, no, that's actually not true. That agency does not have legal authority to just regulate everything however they want. They have to have a law passed. Congress has to pass a law that says these are the regulations that need to be enforced. And if that law doesn't exist, the agency can't just make up regulations, regulatory process. So what we're seeing now is a lot of attempts, and it's going to all go to court, and there's going to be years of court battles, of attempts to unwind and deregulate.

And as they do that, they're going to cut people, they're going to change the rules. That's going to lead to people that are regulatory capture people saying, hey, wait, those regulations are awesome, we need them, or we got to keep them in place and then that's all gonna get adjudicated and hopefully that Supreme Court decision is referenced and holds up as this goes forward so I think deregulation is a big theme yeah it's gonna take a while it's gonna take a while to work through the courts yeah sort of like all the doge actions they're all gonna go to court and you believe that some that's a trend that we can see carry out across admins you think it it's a decade plus long trend,

or is it gonna be sort of oscillating back and forth? I think it is the, I think what happens is it's such a sharp tack right now. My personal belief is that the response to this is a sharp tack towards more socialism, bigger government, more kind of principles of everyone working for and living off the government. And I think that what we're going to end up seeing

in this midterm cycle is candidates and policy proposals that look like they're diametrically opposed because that's how you're going to get elected because people are going to be pissed off about how quick these changes were, how quick these actions were, how bad they're going. So the storyline will be, let's do the opposite. Let's put everyone back in.

Let's spend more money. Let's do blah blah blah blah blah. And so I worry a lot that this is actually gonna be now a flip flop back the other way. The American people are gonna decide. There's so many people in Washington today that have lost their jobs in the last three months and I don't think they're going anywhere, right? There's just sort of circling around in many ways

and I wanna find the way back in. Have you seen all the homes listed on Zillow? I've seen this, yeah. It's crazy, there's like a million homes, the prices are down like 30%. Yeah. There's a lot of talk, especially with the Maha movement of like comparisons to Europe, comparisons to Japan,

on the agriculture side, are there any other countries that you look to as examples for what America should be doing or are we already kind of like the least bad regulatory regime for agriculture? So there's a couple of aspects to that. One is the ingredient supply chain and food. Where a lot of stuff is being addressed and talked about and there's issues there.

And that's independent, I would say, of agriculture. So there's a lot of technology and innovation happening and needs to happen in agriculture to grow things more efficiently. That's the work we do at Oholo, for example. And we have these incredible tools that didn't exist using AI to make predictions and take actions in the field and so on and so forth.

So the US today is the most advanced agriculture technology adopted market, but we're still very far behind its potential. When it comes to food supply chains, yeah, that's where things are. Okay, great. I'm going to go on stage, we'll see you guys. Perfect, we'll talk to you soon.

Bye guys. Thanks for coming out. Thanks for stopping by. Enjoy your talk. Is Keith out there? Yeah, yeah, Jacob can come on, we'd'll see you guys. Perfect. We'll talk to you soon. Bye guys. Thanks for coming on. Enjoy your talk. Is Keith out there? Yeah, yeah, Jacob can come on. We'd love to have you. How are you? Jacob, you got five minutes?

You have five minutes? Sit down. We're here with the man himself. The man himself. The man who organized Hill and Valley and has championed and grown it by a thousand acts, I think. It's been fantastic to watch. Last year I was here, I was

able to find a seat, now it's standing room only. What has it been like growing this? Can you give us kind of the general overview of what the mission and goals are for Hill and Valley? So the Hill and Valley was always designed to be a bipartisan, bicoastal alliance between technologists and policymakers on the basic premise that builders and policymakers are both in the business of building the future, they just use different tools to do it. Builders use the laws of science and nature and policymakers use the laws of man.

And ultimately it was very clear through conversations with Dalyan and Christian that there was a huge amount of distrust between Silicon Valley and Capitol Hill Diane Christian that there was a huge amount of distrust between Silicon Valley and Capitol Hill, but also there was this cliche that had taken hold on Capitol Hill that our best and brightest people were focused on advertising technology, not building paradigm shifting technologies. And so ultimately it was clear that from you know, from the vantage point of

the tech industry, we actually as a country do have a really deep ecosystem of builders working to solve really hard problems. And so we thought it was incredibly important to actually bring them to Washington, give them the attention that they need so that policymakers actually knew this existed, but also thought of them as a toolkit to solve some of our hardest national problems. That's great. How does it feel being here today? Everybody senses that you guys, 10x year over year. Does it feel that way?

And I know there's significantly more demand. I heard a rumor about the waiting list being well beyond probably even the actual people here. Yeah, I guess what's the long-term goal. What does Hill and Valley turn into over time? It's really interesting because in a way I think the success of the Hill and Valley forum actually reflects a lot of the Peter Thielisms about high growth startups where at first it's an invention that you can't really give a name to because if you're really going from zero to one,

it's something that by definition doesn't really exist. And then you start out with something that it's a small community that's really hyped up about it. And all of those principles have actually applied to the Hilton Valley Forum. I mean, we started out and it was kind of this opaque dinner that was totally behind closed doors and we were initially planning four tables of 10 people.

It ended up being 100 people and it just, the growth has actually been exponential. Now you have random live streamers here. And you know you've made it when you draw the pro-Hemos crowd. Yeah, totally. Next year, the goal is Code Pink. I'm surprised they got in. It was remarkable. They impersonated press badges. Impersonating a journalist. Well, we

impersonate. Yeah, we do our best journalist impression. I know you're waiting for confirmation so you can't talk about much else. Is there anything else that folks should be aware of or take away from Hill and Valley other than I Guess in terms of like what the audience is getting out of this Given the advice for founders who are in attendance anyone who's watching online What is the best way to engage? I think it's really inspiring to see so many bright talented people actually make the effort of flying across the country Yeah, to come here and show up.

You know, they say there's the old saying that so much about life is about showing up, especially in politics. And the fact that people actually spent the money, took the time to come here and engage in these policy conversations really does make an impact. And there isn't a single year where we've had the Hill and Valley Forum where there hasn't been legislation that's actually come out as a direct result of people having conversations here. So it's gratifying to see people show up but it's also really inspiring to see people talking about reindustrialization this year. This has been the plague of our country is that we deindustrialized 20 years ago Yeah, and it's inspiring to see so many bright people working hard to reverse that yeah cool. Well. We'll let you get back to it

I'm sure you have a million more panels to host and Many times, but we'd love to have you back. Thanks. Yeah look for us doing this again fantastic cheers cheers. Thanks for doing this You come in 15 are you want to do this now? Zach, can you come in in 15? Are you good in 15 from now? I believe him. OK. 10 minutes. Yeah, let's do 10 with Keith and then 10 with Zach.

10 with Keith, and then we'll have you on. Is that great? Yeah, Keith, come on. Sweet. Welcome. Hey, how are you? What's going on? I love this live studio.

Yes, yes, yes. We are live. But we're very fortunate to be graced by someone who's not going through confirmation, and maybe can give us a little more hot takes, you know? Oh yeah, I can say interesting things. First question, do we need a Department of Government Efficiency for confirmation hearings? They seem like they're going slow.

Oh yeah, absolutely. You know, I think this should be simplified at some point, which is basically the president should nominate you for the constitution and the Senate should provide advice and consent, and we don't need too many other steps in the process. But that said, there's lots of room and improvements in the government. First, saving money is probably more important. Making it more attractive for talented people,

as we talked about. Deserve and Doja said a good example for this is being a magnet for talent. The best people in America want to improve society through the government, it would be great. Those are much more fundamental. So there's details that can be improved at the margin, but I wouldn't confuse the details with the strategy. Are you doing more investing in companies that touch the government now? Because this feels like Hill and Valley is like the floodgates are open. DC is kind of open for business

in some ways, willing to do business with startups. We've seen success with the big defense tech companies, but now we're seeing energy and agriculture and a lot of kind of like hard tech companies or hard tech adjacent just ... Yeah, I mean the big issue is it's field, you know, being here, nothing about investing in these categories feels contrarian. Anymore.

I don't know. But it was for a long time. Well, if you look at like the hot sectors, AI still is the most over-deeders, I'd say. And defense tech is the second. And so I think that is a structural problem. I agree more with DeLion's comments about there's not going to be many successful defense companies. I think the one thing that is a positive change and is structural and

can improve the odds of success for many founders and entrepreneurs is moving into federal revenue earlier than usual. So many companies have historically had a federal revenue arm. They may not talk about it as much publicly for a variety of reasons, but usually that comes after significant commercial success. You might see the sequencing change. I mean, the government runs on Microsoft often. Scale AI, for sure. Scale AI has federal revenue. It has federal revenue. That's meaning VARDA, significant federal revenue early in the trajectory.

So that may be more normal and more common. But I don't think government-only revenue is going to lead to a lot of successful companies except for very, very small sliver. So we, as a fund, are not really investing very actively in government-oriented solutions. We do have, I just did make a defense-oriented technology investment, but that's like an outlier. But we have lots of companies that have meaningful

federal revenue and continue to scale. And this feels like a category, last time we had you on the show, or maybe it was the first time you talked about how most, like a lot of people just shouldn't be like, oh I want to be a founder, I'm going to start a company. They should go work for a great company. And if you're trying to, if you're excited about spaces that are going to require federal funding early,

you probably shouldn't start that right, you know, when you're 20 years old maybe, unless you're, you know, truly one of one. Well you need to understand the sales process in the federal government, which is different than the sales process in a commercial environment. And there's probably a limited scar,

there's probably more scarcity on quality salespeople that can sell successfully to the federal government. And maybe there's 40 of them. And so, unless you have an angle to be able to attract one of those 40. So do you have a better product that sells people think, oh my god, I can sell this. The best way to attract salespeople

is make their life easy. I've got something cool, differentiate it, and I know the buyer. Second, you have a missionary zeal that's off the charts. Without the ability to attract one of the top 40 people who can sell into, let's say defense oriented stuff, three letter agency stuff, I think it's really dangerous. So I think that's more critical sometimes than the technical breakthrough. The government is decades behind.

As Sefer Kass is talking about, Oracle started serving CIA and NSA. There are examples like that, but there are very few. And so one you know, one every decade. So that seems to me to be a bad strategy unless you have a reason to believe you're the once every decade company. And that should be part of your initial seed deck. Talk about what you're talking about today. You're doing a talk with Eric Kleinman, correct? Yeah. We just finished. Eric and I were on stage with Senator Ernst from Iowa, talking about how we can make the federal government's expenses more streamlined using programmatic

expense reporting like that RAM offers commercial sector, commercial products, commercial customers and RAM save between 5 and 15% on expenses. And the federal government probably would be able to save more. So there's 4.5 million card holders in the federal government probably would be able to save more. So there's 4.5 million card holders in the federal government There's only two point something million employees. Wow, so there's clearly a lot of waste fraud and abuse Yeah, the senator cited a bunch of examples of 80,000 charges on federal credit cards at casinos Clearly the most of those 80,000 charges are not doing official business on behalf of the federal government.

So hopefully that's an easy savings. It doesn't require cutting programs that people care about. Doesn't require this big controversial debate. But every dollar we save goes back to the American family and they can spend it on raising a family successfully. Secondly, if we can cut 1% from the federal budget, just 1%. The Federal Reserve can lower interest rates by 1% safely and allow people to afford mortgages, allow the economy to grow without triggering inflation.

So it's a very big deal to save 1% or 2%. I think a lot of people miss that. Yeah, do you have any good stories from visits to Washington during the PayPal days? Was it a different time? It was different. I was actually just mentioning, I don't know if I've been back in the capital before today since 2003 when I

was lobbying that means we're officially back we spent a lot of time energy I spent a lot of personal time energy using the federal government to help protect pay ball from a lot of people that didn't like us he's a card. Yeah, eBay and then later the Treasury Department post 9-11 The Treasury Department wanted to issue these regs that would have imposed significant burdens on consumers and small businesses and we were able using a lot of connections on the hill and messaging about not interfering with e-commerce Yeah, to put a lot of pressure back on the treasury

to draft much more reasonable regulations. They really wanted everybody to put in their social security number on every transaction, which is crazy. Yeah, intense. Last question. Jensen was saying SF is back because of AI. What's your take? Well, he stole my line.

Yeah. I mentioned that my version of the line was slightly narrower, but you obviously can expand it. Mine was open AI saved SF. Yep. Without open AI success, SF would be dead and still dying. You get another power law company, and that drives a ton of innovation and stuff.

Well, it does. And people who are favorable to SF would say, oh, well, that happens every 10 or 20 years. The internet saved SF, too. Yeah, yeah. When I graduated Stanford, before the internet, SF was like a 12th to 15th ranked city in the United States. Nobody, there was no business going on.

Oakland was actually a better commercial city at the time. I graduated Stanford. The only people who stayed in SF to work at like, Bain or BCG were like for lifestyle reasons. It was a dead city. Then the internet revolution happened, although a lot of the best internet companies,

the best technology companies were in Palo Alto, in Mountain View, in Sunnyvale. There was enough spillover at SF to save the city. Well, it was just cheaper in some ways, right? Yep, well cheaper and you need large floor plan, like floor plan, floor print offices, like those didn't exists in the city the city's culture was never really never great for building companies like

when we considered moving the PayPal office to SF in 2001 Peter asked this question Peter Taylor asked a question of name a successful SF company hmm and the largest SF company at the time was like CNET yeah incredibly mediocre so we didn't we stayed we moved to Mountain View. Interesting. Wow. Well, thanks so much for joining. This was fantastic.

Great day. Great to see you. And we'll see you out on the floor. Enjoy the rest of the conference. Cheers. Ben, do we need to shift? Thank you. Do we need to shift the microphone a little bit?

Have Zach maybe sit at the end of the table, point towards us? Yeah. We're going to shift the microphone. Yeah. Come on in. Welcome. Repeat guest. Yeah. We're going to. Yeah. But come on in, welcome. Repeat guest. Yeah, we're gonna go right here

so that you're kind of aiming at us right here. So just kind of sit right here. Thank you. And lean into the mic as much as possible. Look at this, doing your own AV setup. Yeah, I'm gonna have two of the best in the business here. But it helps when everyone's an individual contributor when you're running a startup, right?

I've gotta say, getting into this room is the hottest ticket here. The line at your door is just like, impressive person after impressive person. Were you an individual contributor in the early days? At lab? Yeah. Oh yeah, of course.

I didn't know who else would do the work. Yeah, exactly, exactly. So yeah. Fintech, remember, Fintech wasn't always one of the hottest categories. Yeah. Yeah. The first four years of the business were me telling VCs, hey, financial services, we could innovate here. Like this might be a thing. Yeah. 2016, someone came up with the word FinTech and then finally caught on.

A crazy story from Keith, you wouldn't have heard, but he said the last time he was in the Capitol building was in 2003 fighting for PayPal's life. Oh my goodness. After 9-11, there was like a lot of regulation being life. Oh my goodness. Because after 9-11 there was like a lot of regulation being pushed. Pushed back, yeah. Yeah. But speaking of financial regulation, is like everyone here is obviously super aware

of what's going on with the DOD. There's a lot of DOD budgets and every defense tech company is looking for their next program record or SBIR. What is the mood in Washington around financial regulations? Is there low hanging fruit? Is there a meme that everyone talks about? Are people talking about it enough? It's a good question. Right now there's probably three things that are top of mind for everybody. First is the Genius Act, which is the crypto stablecoin regulation. That is, as far as

I can tell, moving. I don't know the day to day details of that regulation. That is, as far as I can tell, moving. I don't know the day-to-day details of that one. Second is, there's section 1033 of Dodd-Frank, this is the open banking regulation that was put into place under the last administration. This administration, we'll see what happens, but there's some talk of making a few modifications to it before it fully goes live.

And then the third big thing is the conversation somewhat kicked off by Doge somewhat not about payments modernization So can we move the the payment system of the US to not send out paper checks to everybody? Yep in all these places with old addresses and so on and so forth Yeah, actually make a little more money So you have any type of estimate of how many of those paper checks just never ever even get basically been paid, but just sort of sit in the ether? Well, they don't get cash. That's money back in the taxpayer.

Maybe we don't want to move off paper. This is free money for the taxpayer. So you've got to keep in mind the cost in the system. So you have people that are writing the checks. You have people that are mailing the checks. It probably costs you $5 to $10 to send out the check to each people. They're mailing the checks. It probably costs you five to $10 to send out the check to each person. Then you bring it to the bank.

It costs the bank five or $10 to actually cash the check. So getting that out of the system would be a net worth I think. Plus getting people payments a little faster is not a bad thing. Talk about the difference in your experience this week versus maybe your first trip to DC for Plaid. For Plaid ever.

Yeah. What was your first trip ever? I think it must have been seven years since the first trip to DC for Plaid? For Plaid ever? Yeah. Oh my gosh. What was your first trip ever? I think it must have been seven years since the first trip here. We were lucky, we hired our first head of business development, had worked in the previous administration. At some point she said, hey Zach, we should go to DC

and meet some people and talk about it. There's some things that are relevant to Plaid. We know that this open banking rule was gonna come eventually. Even seven years ago you were thinking about this new open banking? Oh yeah, I mean the concept of Plaid has always been to kind of build open banking for the world, to build infrastructure that enables people to link their banking accounts really easily. We've of course created a ton of stuff on top of the network that came from that

later. But we knew that this regulation was a thing that would be written at some point. So we started spending time here. We hired a policy team in DC. I think we probably still have four or five people that are just based in DC full time. And right now, just the conversation is totally different. The size of this conference, the number of people that are here, the number of other tech CEOs that I'm seeing in DC, even just casually. I was here about a month

ago and was walking into a building and out of the building was walking a big public company CEO. Yeah. And so I was like, say hello. That running would not have happened seven or eight years ago. Yeah. So it is kind of a testament to, and sometimes Silicon Valley for people being willing to come out here and have these conversations, in a big sense, it's a testament to the administration

and to a lot of the people that have put together forums like this to bring the two sides together. So it's been an awesome event so far. That's awesome. Well, you've got to get to your next panel, I think. I do, yes. Oh, well, it's been great having you stop by. Thank you so much for having me.

Thanks for having me. Thanks for seeing you. We'll see you out on the floor later. Good luck with everything. See you out there. See you soon. Let's bring in Zach. You want to come on?

Who else is out there? Welcome to the stream. Let's bring in Zach you want to come on who else is out there? Welcome to the stream. Let's play this song. Let's play. Let's play a sound effect to let everyone know As much as possible we want to get your mouth. Yeah, right up close to that All right have me all the way on there. We go. Thanks for having me guys. Yeah, introduce yourself Yeah, by the way, I just gotta say you look very comfortable in a suit horrible insults I appreciate it I'm just saying I appreciate it looks like they haven't put it on a long time I think that's what will be saying well my night is on the stream yesterday was saying you know it's Hill and Valley when you can't we don't need to put in new business cards because they're still in there for that's the standard I will

say when I first moved to DC I'm a lobbyist short version is I'm a lobbyist to put in new business cards because they're still in there for the last time. Oh God. That's the standard of the tech person. I will say when I first moved to DC, I'm a lobbyist. Short version is I'm a lobbyist. I was a venture capitalist for a long time, a general catalyst, the emergence capital. Before that, I work here now. I lead the tech and venture capital practice of a lobbying firm. And I also hang out at a think tank called FAI, the Foundation on American Innovation, where I'm a senior fellow too.

That's the short version. Yeah, yeah, yeah. The long version is it is a suit. I am a suit. You are a suit. I wear a suit fellow too. That's the short version. Yeah, yeah, yeah. The long version is, it is a suit. I am a suit. You are a suit. I wear a suit now all the time. I have ties. You're still a technology brother.

I am at my heart a technology brother. This feels like a safe space for suits to be honest. This feels like, you guys rock a good suit. We wear suits every day. You guys brought back suits actually. On the lobbying front, you know, Lulu's talked about going direct in the comms world, going to an event like Hill and Valley feels like going direct for lobbying.

I agree. Fully. Talk about the compliments or substitutes of founder led lobbying, essentially. Well, the best founders are the ones who are building the relationships themselves. The truth is, by the way, I guess I'm talking myself out of a job in some ways, but the truth is you outsource, if you are building in a space that is key to regulatory work and you outsource your regulatory relationships, your government relationships to somebody else, you're not doing your job.

I mean, think about it this way. If you're raising money, you wouldn't hire a banker if you're good, frankly. You wouldn't hire a banker to go out and organize your fundraise for you, right? But if you come to DC and your attitude is great, I'll have my lobbyists do everything. I don't need to go meet these people. That's a problem. And in fact, the biggest people, do you guys have Blake on the show from Boom?

Has he been on? Not yet. Not from Boom. He should come on. One of these days though. Yeah, he's somewhere back there, but Blake's done a great job of this, right? He came in here.

Five, seven years ago, the idea of supersonic flight was totally outside of the Overton window. But he's done such a good job getting into the DC establishment. And I actually say that as a compliment. So to put this all in venture terms, the job of a lobbyist is to make great intros, much like a VC does, and then back channel. That's exactly right.

It's like a part shrink, part Ari Emanuel. He's sort of doing the like, you're a little bit of an agent selling somebody downstream Yeah, you're a little bit of a shrink because they complain bitterly about government They have every reason to do so and so you hear all that out too Yeah, and then your job is to help actually in some ways I think about it as you are teaching people in government who don't know about what you do You're an educator to them because it's not that they don't care or they don't have any whatever It's yours not high enough in the priority stack and they don't have the what you do. You're an educator to them. Because it's not that they don't care, or they don't have any whatever.

You're just not high enough in the priority stack, and they don't have the background to understand it. Yeah, I mean, I met a congressman a couple years ago who was like, thanks for telling me about Andorra. Yeah, exactly, exactly. How do you not know about that company? But it's like, yeah, it's new. Is part of the best lobbyists are selective

on who they work with. Because you're not gonna be successful if it's not a solid underlying sort of company. How much are politicians reading into who a company is working with on the lobbying front in terms of understanding the quality of the underlying sort of like potential? It's a really good question.

The best lobbyists are tremendously demand constrained, right? So you're sorry, supply constraint, by which I mean like an infinite amount of people more who want to work with those lobbyists and they have room to work with. The compliment that I love to get is when somebody says to us, hey, you don't feel like other lobbyists, because when we actually come in

and you bring the client with you, we actually have a real relationship with them at the end of the day. And it's not just, oh, I've come in and I've done my briefing book and I've given you your one-pager and so on and so forth. So there is a staff informator, you're totally correct. And because the lobbyists are smart, proactively think about organizing the opportunity,

like I had dinner with two members, they came to me, they're like, great, I would love to meet folks in the Valley. I don't know anybody in tech. That's the thing. Is there a holy trinity of lobbying firms? You know, we talk about McKinsey, Bain, BCG. We talk about Goldman, Morgan Stanley.

We talk about Sequoia, Andreessen, Founders Fund. Yeah. It's not only a trinity. It's more of a single firm and it's mine. Obviously. Oh, yeah. Yeah. Yeah.

There's not really much of a long tail. Do you have a coupon code we can share? Yeah. You can put TBPN, thank you. Yeah. We want our cut. It's 10% of the ongoing revenues. Oh, 10% of ongoing revenue.

I mean, Athletic Greens does that all day long. Athletic Greens does that? What's the average order size of Athletic Greens? Because I bet you it's a little lower than a lobbying contract. No, but that's the media of the Athletic Greens deal. You use the coupon code, and you get paid every month. That's a nice plug, by the way. That was very well done.

Very, very organic. Do you guys have specific sectors that you're most oriented around or things that you avoid? We do a lot of tech and science. So as a firm, we do a lot of tech and science. I lead the tech component of what we do. We avoid things that don't feel values aligned.

So there are some folks in the world who are doing interesting work, compelling work. Gambling. Gambling, yes. Sin, vice are probably outside of the scope for us a little bit. Anything with a foreign government is outside of the scope for us a little bit. But when it comes to things that are around American dominance, around American dynamism, around global resilience when America comes first, that's the sort of stuff we focus on.

But lobbying is pretty fragmented. The truth is it's not a great comp for the Bain-Bakinsie BCG because there's a huge, like anybody, any schmo who has one rich friend can say, I'm a lobbyist now, right? Because they can get one contract and put up a shingle and say, okay, great. I'm going to service as one person. It's hard to have great 50, a hundred, 200 clients and do that at a really high caliber. How damaging can the wrong lobbyists be? I imagine it can kill your company. Yeah. Well, they're your representative. Like you shouldn't work with somebody if you don't feel comfortable with them telling your story when you're not

around. Cause part of the gig is when you guys go back to SF or you go back to LA, I'm still out there talking you up all over town. That's right. That's right. We're in the market. So yeah, give me a call guys. We're, guys. We're trying to put really, really harsh bans, ideally, but maybe tariffs on foreign podcasts. Yeah, I think that's great. And we want significant subsidies for American-made podcasts. In fact, you guys should be getting a tax break.

That's the real deal. You should have a tax break. We actually want it to cost a million dollars a year to host a podcast just via license. Barriers to enter. We are eating a license. It's very dangerous. You guys are money with the taxi medallion system it's a very similar idea for podcasts very very similar let's play them off with the

with all right thanks for having me boys I appreciate it you for coming on the show grabbing me grabbing my salon I think he's right out there if he's if he can having you on, Zach. The soundboard is a work in production. We are actively looping this short. But hopefully, no, no, no. Mike Solana's coming into the stream. Welcome to the studio at Temple of Technology.

What's up, guys? We got the sound effects. Where are the cameras? We are live. Oh, we're live. We are live. We are live. Thank you so much for coming on the show. Great to have you on. What's been your reaction?

And also, I'd love to know, I know you're writing a piece, I'm sure it's churning in your head, but what is the angle? What is the interesting thread to pull on here? I mean, I don't know if I'm supposed to say this. Okay, yeah. The thing that I thought was the funniest was getting out of Union Station. The first thing I see are a bunch of sort of failed bureaucrats and shirts that say

federal workers matter. It's just the overall circus vibe of of DC, I think is funny. And then I'm paging through the Washington Post this morning, it's just like horrifying headline after horrifying headline in DC. And they're talking about DC. They're like, people, things are tense. People are losing their minds. No one is at ease. And it's just like, I'm in this beautiful hotel overlooking the White House. And there are all these people going to work. They're laughing and drinking coffee. People are happy. I don't know what they're talking. I don't like what you're reading is not what I'm experiencing in DC.

Every time I'm here, I'm just like, did I actually move home? Well, it's a momentum thing. The people at this event feel like they have real momentum, an opportunity right now, and then if you just lost the job you had for 20 years, then obviously they're feeling, they're not accelerating, right? I don't know, but I hate to be Tom Friedman about it,

but I was in a car today and the driver was like, things change here, these people have to, we're looking at these protesters a car today and the driver was like, things change here. These people have to, we're looking at these protesters from the outside and he's like, they gotta get over it. Yeah, they gotta get over it. That's what DC is. I mean, we were reflecting on this with the tariffs. Like there's all these crazy headlines

about like the global economy is destroyed and yet like the stock market's kind of flat this year. It's not really like COVID level down 30%. We'll see what happens with the earnings tonight. I mean, Nate Silver is predicting a recession, 70% chance. Yeah, but even then, we had a recession not really like COVID level down 30%. We'll see what happens with the earnings tonight. I mean, Nate Silver is predicting a recession, 70% chance. Yeah, but even then, we had a recession a couple of years ago. It was very mild.

Like we seem to be better than ever at just maintaining the status quo. Like America is somewhat Lindy in this case. Yeah, you just gotta decide what you wanna do and work on that and you can't, truly the reason I brought up the noise was because also with those federal workers, they were just standing there.

Yeah, yeah, yeah. But then Jack Posibich gets out there and starts a fight with them and everyone's like, DC's in chaos. And I thought, it's not that bad. It's like, no, it's a lot of theater. Everything's fine. You gotta just ignore the noise and focus on your own shit. Yeah.

And that's what I'm trying to do. It just so happens that the shit that I focus on is noise. Yeah, yeah. That's my arc. That's running at the noise. The noise is my signal. The noise is my muse. Is there a good metaphor for DC is it like you know lunchroom tables in middle school or something like I feel like it's very clicky maybe even clickier than San Francisco Tech I don't know I'm trying to understand what's the mindset of a little more sociopathic okay I think it's sort of like all the people care about here is power. Yeah, they're willing to Happily do over to the other table

If they're in power generally speaking, yeah, and then you have you have the exceptions, but yeah mostly Industry town. This is why I felt like kind of out of my element in DC because in tech There's still a lot of like power games There's less status games and you can be like a famous founder but at the same time there is the concept of locking in and actually going and building something but in DC there's nothing really to build no like there's no like oh yeah this person was heads down for six years and then produce like a beautiful piece of legislation like that's not how it works where's like make stuff happen

yeah sometimes that means a lot of dinners. Anyway, can you talk about kind of your, I mean obviously you've been in Silicon Valley forever, how has just the mood around Silicon Valley and Washington changed over your career? What was it like when you first got to Silicon Valley and how has it changed? Yeah, maybe talk about your first trip to DC too. Yeah, that'd be interesting to hear ever. Yeah, I've got text or in the context of work and tack Well the first my first work trip to DC would have been I wasn't in DC ever we didn't do things here, right? Yeah, the first time I came out was for pirate wires Oh, no way because I was invited out by a congressman and I realized that or maybe it was comfortably smug that might have sure sure sure Effectively, I realized there were all these people here who were reading pirate wires because they were interested in tech

totally interested in like this sort of tech yeah center right maybe perspective or let's say heterodox perspective in tech it's very different than what it was what 14 years ago no one thought about government at all in fact it was considered like I don't know a red flag No one thought about government at all. In fact, it was considered like, I don't know, a red flag if you cared about government. And then the businesses changed and now the most exciting businesses, a lot of them are working with the government.

You have to understand how it works. And so there's a lot of excitement here and also in Silicon Valley. Yeah, I always think that that's like an underrated thing. I mean, a lot of people in tech kind of criticize media, tech media when they start talking about politics or whatever, but I think that's like incredibly valuable because it's very hard for DC to get the tech perspective

if it's not from us, it's from somebody else. Yeah, Kara Swisher, right? Are you, do you have that in the back of your mind when you're writing in terms of like the avatars that you're writing for, the messages that you want to send, or is it just like, you're just gonna write and they're gonna read? I just get on the page and just let it rip.

Like spit out what I'm thinking. That's great. And I hope it resonates. Yeah, yeah, yeah. It does. Oh, it certainly has been, yeah. So I mean, coming out of this, are you trying to interview the politicians

and get their perspective and kind of bring that back to Silicon Valley? Because- Well, I'm here with one of my colleagues, Blake Dodge. Blair, Blake. Yeah. Who's a new writer at PirateWars. Yeah, yeah.

So she's doing a bunch of interviews right now and kind of sleuthing around, she said. Sleuthing, we love sleuthing. Gathering facts for our take down. Take down. No, no, no. Hit piece incoming. Yeah, no, so she's just, uh, she's exploring now. That's great. Um, we'll probably collaborate on something. The interesting thing is it does feel like, this is my experience, but, uh, it does feel like it's Hill and Valley, but there's not a ton, not as much overlap maybe as you would, you would like, right? There's a lot of people from the valley, a lot of people from the hill, and technically we're in the same space,

but it's tech people. I just don't think they know how to talk to each other. Even myself, and I know better, but I showed up today without a suit. And I rolled up, I've been following the facts at all, I didn't even know where I was going. I did not know I was going to the Capitol building. I've gotten used to just looking at my calendar and doing things. So I got

here and I was like, Oh no, I cannot be that guy. So I head back. But that's a cultural vibe. I've never had to wear a suit in San Francisco. I didn't even own a suit until a few years ago. Or I think I had one for our LP meeting. But that's it. So you're wearing Fiorentino label? Is that correct? Fiorentino. Oh, that correct? Fiorentino. Oh, John Fio, good friend of the show. Look at John Fio. Yeah, we love him.

A true craftsman. He is, he is. Were you surprised at how much press was allowed to come today? Oh yeah, we went to the press briefing yesterday. We saw your name tag there. There were like 30 people. You were too big. We were sitting there looking around, we were like, we are the fish out of water here. Yeah.

I don't think so, I think that journalists are looking for things to write about. And there are a lot of people here that they would want to write about. My question was more like, obviously they would like to be here, just because there's so many ways that you could spin what's going on. I was just surprised that Deleon and Jacob

got the invite. Instead of saying, hey, no. Yeah, I think that broadly tech's relationship with the media is very different than it was five years ago. The war is over, and there are actually plenty of writers who are not unfair. Even at the New York Times, Teddy Schleifer, I just ran into him out there.

Nice. That's a guy who's just reporting on wealth, and he reports what he sees in both directions And I think that there are people who have integrity now I think it's just the environment's different and yeah, you're gonna They're gonna be hit pieces But you have to just read people's work and see who they are and what and what kind of you know interview they run and then Make a yeah make an educated. Yeah. Yes

Everyone's while Teddy shows up with the with the telephoto lens and goes TMZ mode outside of a party But you know for most of time he's just writing you know good write-ups. It's good. Are you? obviously, you know manufacturing Reindustrialization defense tech or sort of like dominating the narrative here Is there anybody that that is kind of flying under the radar that you're or any like industry specifically that you're? kind of flying under the radar that you're or any like industry specifically that you're that you've written a lot about like the sperm racing stuff and some of the like the Zaner stuff is yeah where is the sperm race representation

yeah you're eating yeah exactly yeah we maybe doing a subsidy or doing a tax on foreign no I think I was having a conversation yesterday and what's actually interesting is they've really expanded beyond tech or defense tech yeah it's your energy there's much broader yeah there's a much broader And what's actually interesting is they've really expanded beyond tech or defense tech. Yeah, energy. There's much broader. Yeah, there's a much broader interest in the technology industry now, which is pretty cool. People are open. Who was it?

Oh, it was Deleon. He was talking to me about how senators and congressmen were just really excited to even talk to ramp or something. Which a few years ago was just not on their radar. Totally. Yeah, Keith was saying there's about four times more federal corporate cards than there are federal employees. Well that's true.

And there was 80,000 charges at casinos. Wow. Like last year or something like that. I mean, gambling is the most American thing in the world. But remember, federal workers matter. Yes, yes, yes. Federal workers matter. Even if they're gambling. It could have been team building activities. Yeah, yeah, yeah. Federal workers matter. Even if they're gambling.

It could have been team building activities. Yeah, yeah, yeah. Team building, you take them to the gambling, you take them to the casino. Slots. Slots, yeah. What's the difference? So what's next coming out of here?

How do you think about covering this from the PirateWire's perspective? Is it just meeting people, doing interviews downstream, or is there supposed to be like a definitive write up or new angle? You're still on the hunt, right? I think we're still looking. Okay.

I think probably a lot of people are gonna do the just, here's what I saw, Hill and Valley. Yeah. Maybe what would be more interesting is to find some sort of meaningful interaction between someone in tech and someone in DC. I completely agree. Yeah, yeah, yeah.

There's all these like big budgets and you see 150 billion in defense, but then you get down into like, okay, what is the actual mechanic of a seed stage or series A founder like actually getting a $10 million contract? That's what it's really important. Jacob was talking about this too. Every Hill and Valley so far, there's been some policy or like some major sort of business activity that's come out of it. So it's clearly working. The question is like, if we've 10 X the size of hill and

valley, are you going to get an order to 10 X the output? Right. Yeah. Yeah. Probably last year's theme. Yeah. Yeah. Last year's theme was Tik TOK. Have you been tracking that? Do you have a, do you have a Tik TOK taker? Have you evolved at all since last year? Shut it down. Shut it down. Don't even sell perspective. Shut it down. Don't even sell it. Shut it down. I don't even believe that you can sell it and have it still not be backdoored in some way

that I don't understand. But I also just think that we're in Trump era now, and nothing matters. And the rules change every day. So it's like, why am I going to sit here and be like, the right policy for TikTok is because we're not playing those rules anymore. It's a new set of rules the rules are it's like a butt it's like Trump says some shit and writes executive orders and

then a bunch of wizards and coats in DC fight back with like their random pen shit it's like everyone is searching back to pass court cases for I guess justification for what they're doing and it all is just to me quite chaotic but also I don't care I I my intention for this administration was to be calm while others were crazy okay and I am trying to maintain the calmness through the storm yeah it is a great time to be in media does it feel like it's the best time possible to be in like tech media or is it like the the war is over where the dog that caught the car yeah

it depends on what kind of press you're doing I think right now what's happening in the tech press is people are trying to figure out who they are in the context of a very different culture totally and how they're supposed to navigate that you see this sort of center left like Atlantic type people who have pivoted wildly to just anti anti-tr, anti-Tekro stuff. But more so than I would say your standard issue left it. I think there's like this strange thing that's happening where people are just trying to find a lane.

And I'm trying to be, I just want to take my time and write the stories that matter to me. There's also that interesting development with the Ezra Klein abundance thing that feels like very near but you're rolling your eyes. What's your abundance take? Because they just ripped it off of like your standard issue tech bro from five years ago. It does sound like EAC right? Yeah like EAC or what about Anatomy of Next. I talked about all of these things. Yeah you did. All of them. All those anecdotes came from you. In fact Derek the author the co-author of that book, I saw at Founders Fund for a charter cities,

a charter cities conference years ago, many years ago, which we hosted. But I would describe that as finesse. It's like we took your best ideas, we rebranded them, and now we're selling it ourselves. Yeah, I mean. You, you incepted. You just say it's inception.

I'm not saying they haven't. It definitely successfully. Created something that they're now selling. The question is whether or not. The conclusion is the right conclusion. Their whole thing is like we've taken all of these ideas and blame the fact that we don't have them on the people who created those ideas. Yeah, yeah, yeah.

And I think the reason that we don't have, for example, you know, housing in California, it's just the people who are in charge of the government. California, it's very simple. Yeah, at what point do you expect tech's sort of basically attention to shift more towards California, given that it's the home of our industry, we've seen that in the Gary Tans.

And San Francisco's so bad. Yeah, the Gary Tans of the world, obviously kind of were were Took a big stand now probably a couple years ago Yeah, I would argue that he's suffered in some ways because of that just given how much negative attention He's drawn locally But at some point tech tech seems so focused on Washington that at some point you're just gonna look around your backyard It'd be like actually we have some pretty big problems here

I guess I think a lot of people are I think more people I just recently I think more people are focused on local politics Francisco within our industry than any other point different than like broadly in California though It's like we're in Southern California And right I would say most of the people in the gondo again have much more Heart partly is the nature of the industry is a lost cause You're never gonna save Los Angeles. We are saving Hollywood. We're bringing media to Hollywood.

We're bringing media to Hollywood. That's our big push. I think that your best bet is San Francisco. I really think that's a tactically the closest. That's the best chance you have at fixing anything. And if you could save even one city, maybe you could do something else. Yeah. I think that Gary actually has made a lot of progress, and I don't think it's hurt

his brand. I think that it's, he's, I mean people are asking for his help online. Totally. He's Batman. I wasn't saying it's hurt his brand, I was just saying acceleration of death threats and people saying that he's hurt his brand. Stuff like that. That's the price to play, unfortunately.

It's kind of like raised the standard deviation of his experience. Like I said, some really great experiences and then some really negative ones as opposed to just the anonymous VC who flies on the radar doesn't get tagged. Switching gears a little bit, did you have a reaction to benchmark investing in Chinese AI? Did that feel that was very contrarian in some ways? But I was trying to I was personally trying to understand the decision of like okay Hill and Valley is happening next week we should invest in this company while

tiktok is like probably should be banned maybe is getting banned maybe selling I mean if their job is just to make money and they think that's gonna make money it's there's like a bit of moral question about it but then are we gonna break down every single investment that everybody, I mean, what is, I don't know. This is a much longer conversation. I guess I didn't feel the way that other people felt. I have a much bigger problem with what they did

to Travis Kalanick than I do with their investment in a Chinese country. Are you digging in at all this idea that it feels like there's a divide right now? It's like if you're a foundation model company, you wanna tell people that we're in an AI war, an AI race, like we have to win the race. And that's a good narrative if you're needing

to raise a lot of capital and sort of solidify significance. The other side, and this is a real side, and this is actually Gurley's position, which is that we're not in it, you know, the idea that you can win the AI war or race in this technology is not just going to disseminate anyways. And he believes it's flawed in conversations that you've had this week. Do you feel like, you know, just sort of, uh,

everybody sort of understands we are in an AI race, we need to win it, or do you, and kind of maybe, what side are you on? I don't think anybody knows anything. I think AI is so, like, we're waiting for a paradigm shift, and we're trying to also make really firm predictions about what happens after the paradigm shift. And so I think that all I kind of know is that it's obviously really powerful, it's obviously improving really fast, but if something is fundamentally changing society, then it's

anyone's guess. I don't think that we know if it's centralizing, I don't think we know if it's going to be decentralized, I don't think we know if it's a race, I actually just, I don't think we know. I think all that anybody knows is that it's powerful and everything else is just people I don't know I saw Tyler Cowan announced that we had reached AGI the other day and I felt like you're just saying shit like I don't you don't do you even believe that like I don't think he believes that okay I think that I think that people

are just I think that yeah I think that a lot of people are just saying shit that's kind of how I feel about Trump administration Did you think there was an overreaction then over the weekend when when 4-0 rolled out and it was just saying like Solana Like you might be the goat like a lot of you know, like you're one of the greatest So so the latest chat GPT 4-0 released they they fine-tuned it basically any question you asked Yes, that is so brilliant. This is like you are you are you know one of the best writers I was like yeah I am I was like these just a landscape like I felt different a plus I love it well then yeah potentially for pirate wires around that that was the first time I

felt like a model could be dangerous where if somebody is having significant delusions of grandeur, mental health issues, they think they're God, they think they're on some divine mission. And says, yeah, you should go and try and. And you're like, if I went to you and I was like, Mike, confidentially, I think that I'm God and I'm on this thing.

You might be like, hey, Geordi, let's talk about it a bit more. Let'm on this thing. You might be like hey Jordy like let's talk about a bit more Let's dial this back. That's not that's not what I would do It shows up and it's like like some old kind of guy and he looks at me and he says I'm you from the future. Yeah, I'm leaning in yeah I'm like, all right Prove it. I'm here. I want the give me the yeah, yeah, you said you were God I'd be like yeah, I like do some got shit. Okay That's amazing

We need you to do some reinforcement learning. Yeah. Yeah, this is amazing. Thank you so much Love to have you back in sharp dude. I do got your new news We'd love to have you back. Thank you, Lincoln Sharp. Glad you got your suit back. When there's more news and stuff. I'll see you guys later. Have a great rest of your day. Talk soon, have fun.

We'll talk soon. I texted Sean McGuire, told him we are ready. Nice. Hopefully he can swing by. In the meantime, why don't I give you a little, we should just literally read some, hey, how you doing? What's up?

You guys on air? We are on air. You guys are on air. Are you enjoying? Feel free to introduce yourself, sit down, tell us about yourself. Tell everyone who you are, what did you do? Michael Eisenberg, general partner at Olive in Tel Aviv, before that at Benchmark. Fantastic. Yeah, and an original member of the Sillin Valley Forum. Really? Yeah, four years ago.

It was just a dinner in the Library of Congress rotunda. Yeah, so was the dinner more intimate? Was it more, what was your read on it then? What's your read on it now? This is overwhelming. Yeah. Yeah, it's big. For a guy like me, it's like super overwhelming. Yeah.

I used to be on the other side of the microphone. I have my own podcast. I'm interested in interviewing other people. This is kind of fun. It's fun. It's fun. Well, yeah, what are you trying to get out of the event? Are you specifically looking for founders

that you could potentially invest in here? I'm not. So we invest only in Israel. But come to Hill and Valley, why? Because politics, the intersection of geopolitics and technology is perhaps the most important issue of our time. And where there's enormous opportunity.

Maybe a little cap by the size of, in general, the defense establishment. The MNA side won't be as big as Google, Cisco, Microsoft Yeah, so is that angle here where you kind of act is like a part of your value-add as a venture capitalists is a de facto Lobbyist for the until they can afford a lobbyist where I'm not a lobbyist But you can make introductions I can make this is a relationship Yeah, the first Hill and Valley, you know, Senator Cotton was here. J.D. Vance and now the vice president of the United States was here.

Yeah, last year. Yeah. And you know, this is where people here. I should be in a minute. You should have Joshua. He's coming on in 20 minutes. He's a great guy. Yeah, best.

I'll be together in Tel Aviv next week. All right. Oh, so we're having Sean McGuire jump on in just a minute. He told us about how Telpo has become a pipeline for great founders. Can you give us more insight there? Have you backed any Telpo founders? Yes, we've backed many Telpo.

I've been doing this for 30 years. Well, yeah, yeah. What is Telpo? Why is it such a hotbed for entrepreneurial talent? Everybody knows about 8200 unit, which is like the cyber unit of the Israeli military. Telpo is a unique program. It takes about 30 kids a year

who are the best and the brightest. The Israeli genius goes here. It's a 10 year program. Wow. In which you get a couple of degrees along the way. Okay. And then you get a budget. Yeah. To go do a big weapons program or military program. And so we give these 22, 23 old kids the most immense responsibility. Yeah. They grow up, they deliver, and they know to build essentially companies. That's awesome. In a box. Can you give me some examples of alums that you think are worth digging into or understanding their history? Sure, so we backed a company called One Step. It's actually three top guys which is like hitting the jackpot. There we go.

They just took this little telephone device and turned it into what's called a gate lab. And it turns out that how you walk is predictive of your health. Oh, interesting. In many ways, it's like a blood test. Literally like a blood test. I can tell if you're going to have dementia or Alzheimer's, by the way, whether your hip and knee replacement works. Interesting.

That's why, I mean, only guys who are literally rocket scientists could turn the phone into what's called a gait lab and use it to measure everything. That's one example. What's the business model? Sell to the customer directly or vend that into Apple Health or something?

No, they're actually selling to facilities that do rehab. Sure. For elderly people or people with hip and knee replacements, they sell to medical device guys like Zimmer. It's going extremely fast. That's great. And incredible genius. And then there are others.

There's a guy out there you might have met, and Michael Kaufman, who's working with a bunch of guys who come out of that place. Cool. I think met him last night. Talk about collaboration with this group here and your companies back in Israel. What does that look like? The interesting thing about Israel is there's no local market, right?

10 million citizens doesn't make much of a market. 400 million on the other hand is big. And so if you assume that US defense spending is going to go up, this is a good place to do defense technology. We've backed a bunch of companies in the area, a company called Orr, which makes rocket fuel and explosives using natural and biological means. It is actually a chemistry company using biological means, a specialty chemicals company. Our co-investor there is Standard Industries, W.R. Grace. And we've

backed a company that's in the kinetic defense area and another company called Dream. You may have heard it was founded by Sebastian Kurtz, the former Chancellor of Austria and Shalev Julio that is doing national level AI protections. One of the fastest growing companies I think in the world right now. What's your read on whether or not we are really, we're clearly in an AI race. What is, is that something that can be won, or is it like any other industry where it's just sort of a perpetual race,

there's no ending, do you have a thesis around? Do you agree or disagree with Bill Gurley? I agree with Bill Gurley. My former partner at Venture, Bill Gurley. I agree with Bill Gurley. It's an infinite game, but I'm not sure the question is framed right. Sure.

So AI is going to impact just about everything we do. It's a super accelerant of many things. I think the question becomes, because the clock gets sped up, you could fall really far behind in every iterative game you play if you're not at the head of the game. If you're not winning the game,

it's not that you win in order to defeat the other person, you win in order to stay ahead. I've read a bunch of books. One of the core theses of the books is that the civic society runs on iOS and AI and runs really quickly, and government runs on the fax machines. That inevitably creates friction. The society pulls ahead and it creates tension with the government. I think that's part of the loss of faith in institutions.

If you don't accelerate the clock on absolutely everything, which you just have is unending friction society kind of collapses on itself. So you need to stay ahead of the race in order for your society actually to be healthy and then also to deter others from doing other things. You know, if science accelerates with AI and weapons development, so it's with AI, it can be troubling. I gave a talk in Abu Dhabi about, it's about a year and three months ago where I showed that there is correlation. We can't do it. We can't do it. We can't do it. We can't do it. We can't do it. with AI and weapons development, it can be troubling. I gave a talk in Abu Dhabi about,

it's about a year and three months ago, where I showed that there's correlation, we can argue whether there's causality, I think there is, between the increase in compute power and cyber attacks and interest in bio-weapon attacks online. I think it's not an accident. There's agents of chaos in the world, and now they have access to super tools like AI.

So if we don't stay ahead, these people get emboldened and you can't kind of keep them in a box. There's a lot of talk today around just efficiency in government, specifically around payments, things like that. Does the US have anything that we can learn from Israel in terms of, do you think Israel's done a better job in terms of modernizing the way that governments actually run, or is it still fax machines all the way down? The really interesting thing about Israel is not the government. What Israel has is the most incredible civic society on the planet.

If you look at what happened October 7th, the government was absent, but the civilians all turned up. They turned up to evacuate people, turned up with their own weapons and their own cars, and took care of business that needed to be done. In fact, the evacuees were taken care of mostly by civilians. The government didn't turn up. And what I think Israel is a model for the 21st century, which is it's almost impossible for government to catch up

on so many of these technology things. It's just gonna take them a while. What we're doing now is devolving this to citizens to take over more control of the economy, emergency response and everything else I I chair the largest volunteer organization is there's actually wildfires going on right now in Israel. They've been set on fire by terrorists There's 20 places that the fires are This my civilian organization that I chair called the the new guardians is out there with thousands of volunteers

Stopping the fire the fires and stopping people from lighting more And so the lesson from Israeli society is how you leverage technology and civic society to take over more capabilities from the government. Now you can't defend people like that that still requires the government and policing should be done by the government. But the Israeli government I think is like every government right now which is there's lower trust in institutions they're still very very slow and they're kind of coming around to this very late, but because of the force of the public I think it'll get there faster than most other governments. Yeah

What do you think about? different Geos to invest in Benchmarkers obviously in the news for the mannus investment, which is kind of controversial But you could see a world where hey, they're just great founders They want to get out and so, you know, American capitalism is like the path out. What are there more? Are there other geos that are you think are interesting or more on this continuum of like, East versus West narrative? I'm pretty bearish on Europe. Yeah, broadly, I've said that Harry Stebbins podcasts and

other places. I'm super bullish on the US and Israel. You went on the King of Europe's podcast. I did. By the way, I should say I'm an LP of Harry Stebings. But he feels the need to disprove me right now if I'm super bearish on Europe. He's going all in. He's all in.

He's all in. He's dying on the hill. He's got to make it work. It's good to be young and ambitious like Harry is and do it. I think there's interesting things going on in pockets, but still Mecca is it's by the way It's not the United States per se it's Silicon Valley. Yep, and New York Yep, and maybe Austin a little bit of Miami and Tel Aviv its cities around the world They may be the southern London. I think the most interesting thing going on right now is it actually in Abu Dhabi and Dubai Yeah, they're becoming massive magnet for the talent fleeing Russia in Ukraine

It was really easy to come there more and more companies are setting up facilities here just here I met three people who've set up in Abu Dhabi. Yeah, and so well they have a lot of incentives, too I've heard that they'll basically say free space free energy There's a lot of you know, they'll basically like massively reduce the cost my understanding of operating things like manufacturing any type of like hard tech you know projects they're also really good at building big projects and they have low-cost energy so they're gonna build big data centers they're building big data centers for the US Giants and Microsoft has a partnership you know an MGX yeah with Muballa and Abu Dhabi I think there's

interesting things going on in the Emirates more broadly, not as much entrepreneurship coming out of there, but places where you can kind of build infrastructure and deploy. I think the really, really big question facing the West right now, and I'm a fan of Alex, I think we're here to defend the West, is how do we create a secure and resilient supply chain for the infrastructure we need to stay ahead in AI and not just in AI, AI robotics, defense, whatever the next generation of bio is and chemicals as we've talked about. That requires real infrastructure and a secure supply chain for the West to win and we got to focus

on that. Yeah. What is your post-mortem on the bricks narrative that I don't know. I grew up with Brazil, Russia, India, China. Goldman was calling these the next major markets and the way that's bifurcated if you invested in Russia and China, it's really rough, but Brazil and India they've developed but not fully. Are there still like jump balls on the geopolitical like play of chessboard that can be pulled towards like the broader definition of the West even if India is not in What we traditionally think of as the West it's funny You should ask this question is just remarking as somebody a couple of days ago. There was bricks and now there's I make I like what's that ah the India Middle East corridor? Okay, so we assume that India would go with Brazil China and Russia, But if you look

at China and Russia, in particular, on some level, Brazil, these aren't real democracies in India, is a democracy. I think it turns out, by the way, if you invest in a non-democracy, you actually don't own what you think you own. They take it from you. You know, free markets is, as Freeman said, create free societies. Yes. It turns out the opposite is also true. If you don't have a free society, you actually don't have a free market. You don't own what you think you own. And I never thought India was actually a part of that, but this IMEC thing, what's the IMEC corridor? India Middle East corridor. Yep.

It's the alternative to the Belt and Road Initiative. And this, you know, people don't understand this, find you a political point. So Turkey, which is kind of on the side now, Turkey, Pakistan, which is now warring with India are part of the Belt and Road initiative. The China initiative that China has initiated to try to get to Europe via land. I make Indian Middle East corridor in general, turn that where you go via India via the sea to Dubai, Abu Dhabi. You cross through, you know, Saudi Arabia, Jordan, Israel, and out to the Mediterranean and then in there. And this is,

I think is a big, the same bricks fell apart because, uh, democracy, and out to the Mediterranean, and then in there. And this, I think, is a big deal. So I think bricks fell apart because democracy doesn't belong with these people, but I think there's a giant opportunity for the West and for the United States if we can bring India on board and make them a core part of the supply chain across the Middle East and into Israel and Europe. We're starting to see a level looking into it,

and more and more companies testing the waters there. But these things take more time. It takes a long time. These things take more time than anyone believes. The supply chain created in Shenzhen, in China, and Taiwan is 30 years in the making. It's not going to happen overnight. Yep.

Well, thank you so much, Sean. Sean McGuire's out there waiting. Can you go grab him? I'm like a warm-up for Sean McGuire. That's like, you know, life goal unlocked. Yeah, there we go. Yeah, yeah. Opening for Sean McGuire.

That's great. Hey, thank you so much. Yeah, great to meet you. Thanks so much, Sean. go. Opening with Sean McGuire. That's great. Hey, thank you, Josh. Yeah, good to meet you. Thanks so much for serving by. Fantastic. I think Jordy has to send a tweet or post promoting the feed. We're going to bring in Sean McGuire from Sequoia Capital. Welcome to the stream.

Third time appearance on TBPN. Wow, in the su. How are you doing? Let's go. I think we have a question. By the way, he's leaning down. These guys are much taller in first and then you. Oh, yeah, yeah, yeah.

Yeah, yeah, one. Yeah, we'll do six minutes, then we'll bring him in. Great. Great to see you. Who's the VIP at one? Josh Wolfe is coming on in six minutes. Oh, dude, legend. Great guy.

Good buddy. You guys can do that. You guys can share a mic for a bit. Yeah. How does that be entertaining? Yeah. What's the initial reaction? Is this your third Hill and Valley, fourth Hill and Valley? Something like that. Third. I actually met you for the first time at the last Hill and Valley. Yeah, yeah's the initial reaction? Is this your third Hill and Valley for feeling?

Valley something like that third. I actually met you for the first time at the last time. Yeah, I miss I miss the first one It's a big mistake. I got the invite. I think I got food poison. Oh, no Yeah, yeah thing is grown every year. It just gets crazier and crazier. Yeah. Yeah Are you do you like the framing of like? Reindustrialization being the focus last year year was a lot of like TikTok stuff. Is there something else we should be focused on or is reindustrialization really the heart and soul of the agenda with Hill and Valley now?

Whatever the agenda is, I think the conference is focused on how tech meets Washington and like how we play nice together in the future. And I think that's the right focus and it's you know what technologies are gonna matter in the future what policies can happen that will help us get there and I think like reindustrialization is critical but I'm already hearing you know there's a lot of talk of a lot of other things too. Yeah yeah. Like energy you know all sorts of things.

Yeah, yeah. Yeah, it does feel like even defense tech, if defense tech ends up being involved in anything, it ends up overshadowing it because it's just exciting. You have these planes and drones and they just dominate. Like great videos. Even better demos. Yeah, yeah. Yeah, the nearest demo is wild.

It's pretty good. I got that one early on. Soren's a champion drone pilot. So it's a great drone. Great demo. In terms of energy, should every venture capitalist be on the hunt for the Elon of energy? It feels like there is a power loss CEO. I think the Elon of energy might end up being Elon.

You think he's going to go into it? I can't read his mind, but if he does, it's telling me where to wire the money. Is there any limit? I mean, it's like you on his you on it. We're talking about that's kind of my reassuring, reassuring semis, but like there has to be an upper limit to like, you know, how much industrial work he can do at some point. I mean, look, so there have been to the credit of the tech industry. Yeah, there have been probably 10 to 20 pretty promising

vision startups in the last five, six years, and probably five to 10 fusion startups. I haven't invested in any of those, which means I'm not doing my part to just raise the tide of all. And the challenge for me is, Ben, it's even though I believe so much in the category, I believe in the macro, I have to get the micro right. I made that comment before. And it's been hard for me to pick who's going to win in that category.

And I think this is something that we can't struggle with. And I think some sectors, there should be a lot of government support. For all these, if one ends up as, number 10 in the space, but it's still a public good, and is a positive payback for the government, anyways, I think we need more government support. I just feel like there's an opportunity for a startup

that's like, yeah, SMRs are cool, people are building those, there's new designs that are great, but our startup is just copy pasting Diablo Canyon. We're gonna copy paste it a hundred times. 500 times, exactly. But that does seem hard to get done. We've had a lot of people on from the valley side of Hill and Valley.

Who on the hillside have you been excited about talking with that you think really gets it? I mean, I was just on a panel with Senator Todd Young, and I think he deeply gets it. And for example, one comment he just made was, like, he doesn't want to, like, re-onshort everything, only, like, a small number of very strategic industries. He doesn't want to onshore garments.

And he's fine with things that are not There's different levels of like how strategic something is and you know, it's fine if the medium strategic things go to Friendly nations. Yeah, and so anyways, I think Todd has had very nuanced Opinions, I think up right now or next is Richie Torres who is someone on the left who I I've generally admired and felt like has very even though I disagree with him a lot of times I think he's a very principled person who really deeply cares about America and is willing to say unpopular things that he believes in and for me anyone that is willing to be bipartisan, not just purely tribal, but take on some topic

that is core dogma of their party and they're willing to go against that dogma, that's someone that I generally admire. Yeah. I mean, that should be a good fit for Silicon Valley. The whole search for contrarianism is pervasive in Silicon Valley, right? Yeah. Pervasive in Silicon Valley, a little less pervasive in Washington. Yeah, but it still exists and there's pockets of it

that you have to seek out. So you got, what is your read on the new defense budget? We're hearing this $150 billion number. For a while, it seemed like there was gonna be a freeze, maybe very bad for challenger defense tech companies. Then it seemed like the floodgates open and there's all these huge numbers for even just small series a companies are throwing out

Oh, there's a billion dollars hanging out for my thing How optimistic are you about that and how optimistic are you about? Not just like the SpaceX's of the world, but the actual up-and-comers the next generation of defense tech Unpopular opinion I Unpopular opinion. I simultaneously believe that defense tech is one of the most important categories in the world. But I also believe that there's going to be a very small number of winners. Call it in the West, this is including Europe and Israel and America, roughly 10 companies

that go on to be really big next generation companies, call it companies with 10 billion plus market caps. And I think there'll be multiple with greater than a hundred billion dollar market cap. And I think that the defense tech companies of the next generation are going to be way better businesses than the last generation. So I think it's kind of- So focus on efficiency. Focus on efficiency, focus on vertical integration.

If you go look at, like I think one of the core things people got wrong about Tesla in the public markets going back to like 2017-2018 is they were comping it to auto companies yeah and they're coming to GM or Ford or whatever and people didn't realize that GM and Ford don't really make anything anymore. They basically design cars and our you know customer acquisition channels and maybe some financing, but they subcontract out everything. And so they would look at, oh, GM or Ford have these market caps and Tesla's already here, but they would ignore NXP and ignore all these supply chain companies.

And I think we've kind of been doing the same with the defense prime. Interesting. And I think we've kind of been doing the same with the Defense Prime. Boeing, Lockheed, they subcontract out almost everything that goes into their finished product. You're only getting a slice of the market cap. And I think these next generation companies are going to have way more vertical integration, higher margin. I actually think that we're going to see a change with how procurement happens to move away from Cost Plus. I think we're already starting to see that. But basically the reason it's unpopular is I think there's going to be a very small number of winners that win mega hard and then a lot of you know losers or companies get rolled up into the big you know the big winners.

Were you surprised that I think the number was 500 million dollars was earmarked for autonomous systems and when you compared that to some of the other categories it felt pretty low Do you have any insight into into into how they got around to that number or you know general reaction? so Like it's different philosophies I think one philosophy would be that like we're trying to push a boulder up a hill in terms of like changing the defense budget and moving

budget towards next generation emerging industries. And if that's something worth like every year is predictably getting bigger and bigger and bigger and if 10 years from now, already 50% of the budget is going towards kind of next generation strategic technologies, then I'll be very happy. What would be very bad is if it was like 500 this year and then zero next year. And then six. That's a really great take.

It's like if a company raises $100 million in VC and they have to spend it all in the first year, they're gonna probably spend it really inefficiently versus like, hey, let's stage this out based on certain milestones. And so, yeah, I think that's a great take. And this has been, look, I learned this lesson the hard way with my cybersecurity company that focused on defense.

Our first big contract, we got awarded a $10.5 million contract, and then government sequestration happened, like they couldn't pass a congressional bill. And we basically got told, like either we accept the contract with 60 cents on the dollar or no contract at all so obviously we took the 60 cents on the dollar but and we were lucky this was actually our first big contract because it taught us from day

one how unpredictable government funding can be but is that predictability like if it's if you know it's gonna be 500 this year and a billion next year, et cetera, you can invest strategically. If you have no idea what it's gonna be in the future, it's just very hard to plan. Totally. Yeah, you guys get Josh. Last question, 60 seconds.

Do you have a take on this idea of whether we're in an AI race, but is it an infinite game? Is it just sort of a perpetual game, or is it, is an AI war even the right framing, right? I feel like this is a bit of a debate. Oh man, I'm so glad you asked this. I've been obsessing over this for a couple years.

I have a pretty strong opinion that the foundation model companies are gonna capture way more value than people realize. I think it's a combination of operating systems plus cloud Which means this would be incredible businesses. Let me just make this point. So Like if you think on the operating system level, there's windows. There's Apple. There's Android by Google there's you know Linux and open source. And these companies, the value capture of Microsoft or Apple,

it's not on the operating system. It's on all the applications that they control and build on top, and same with Android. But I think that the operating system are going to be the foundation models themselves. I think there's incredible kind of capex and development to get to the point where you are the, like, one of the top operating systems that has eyeballs.

But then I think the lock-in and the value capture will be with the applications that are kind of verticalized on top. And I think there will be an additional moat, which will be, like, the moat of cloud. Cloud has done a very poor job of the application lock-in the way the operating systems did, but they've done a very good job of having a hardware mode

and a CapEx mode and I think these AI foundation model commons are going to have both. They're going to have like a CapEx lock-in mode and they're going to have like the usage and application mode plus value. And then just the last thing I'll say on this, and if you look at Linux, Linux probably has five times as many installs

as Windows, but the value capture of Linux is like 1-100th of Microsoft. But Red Hat's still a big business. Red Hat's still a great business, but I personally think this is where we're going to go with AI, is that the open source deep-seek and all that stuff will be great and it'll be there'll be more open source models used in the world. I think the value capture will be lower by that than XAI, OpenAI, Anthropic, some Chinese, etc. Get Josh Wolf on here. You guys are the best.

Let's go. Yeah, we gotta do a whole deep dive on that. We'll see you back in here. You guys are the best. Let's go. Yeah. We got to do a whole deep dive on that. Have fun out there. We'll see you back in LA. Peace, guys. Let's bring in Josh Wolf, and I got a post that we are live. So much to dig into. 60-second question, Jordy. You hit him with the deepest possible question.

The deepest possible question. I wanted to take more on this idea of, you know, should we be investing in Chinese AI companies? Yes, yes, yes. Well, we have Josh Wolf, the man himself. What's going on? Great to see you. Welcome to the stream. How you doing? We've been wanting to have you on for a while.

Yeah, I've been wanting to be on for a while. Yeah, yeah. Yeah, I'm glad you can make it. I'm going to disagree with everything that Sean said. OK, perfect. Perfect. Line by line, line by line. Yeah, he said glad you could make it. I'm going to disagree with everything that Sean said. OK. Perfect. Perfect. Line by line. Love Sean. Yeah, he said AI is valuable.

What about that? You're in front of a camera. Can you? I think you're good right there. Yeah, you should be good there. Yeah, that's great. How's it going? I'm wearing a tie.

I love it. You're wearing a tie. You look sharp. Has it been exactly one year since you put on the suit and tie for Hill and Valley last year? Break down your first business trip to Washington because I feel like you've been coming to DC for a very long time.

I feel like you've been banging the public-private partnership drum for a long time. A long time. And many of the companies, I feel like, oftentimes I see a new fundraise announcement from a new sort of hard-tech company and I'm like I feel like Josh invested in like this exact company like six years ago or something like that. Hopefully it's the same company and they raise a lot more money.

Yeah no we've been in this for a long time I think we really started with a lot of like Intel community-facing things so most of that was sort of software maybe sensor, SIGINT, data collection that was a lot easier to work with then we started working with soft special operations which basically had rapid fielding so they could deploy stuff and it wasn't at the scale that you need to like win a big army contract. Sure. We started doing stuff in space with satellites and then I would say like really the first pure play non quote-unquote dual use thing which was unapologetic was first round of Andral. Yeah. And you know I wish that there was

like some sophisticated analysis we did for that but it really was me and Trey at Balthazar in New York. He's like I'm gonna start this company with Palmer Lucky. I'm like I'm in. That was the diligence. How have you found, you know, you do a first round in Anderil and then you're like okay this category is gonna be really important. You want to more? But then there's this issue where the anderol of anderol is probably an actual right? Yeah, it is. And so and so have you had to hold back in a lot of instances where you're there? There are venture funds and we compete with them and we partner with them that are sort of a little bit more

polymerous and they're doing lots of deals with lots of different people. We try to be really monogamous. And so there was one company in particular, I'll say it out loud, but it was Dive Technologies, and they came to pitch us, and they were doing Subsea, which is sort of complementary to our company, Sail Drone, which is doing autonomous flights of Onsea. And I said, you know, I think you would really be better off

as a part of a platform that has the muscle and the mechanisms to be able to win contracts and scale and manufacturing and think about this as part of a portfolio. And so at first I think they were a little bit hesitant but then they ended up going to Androl and I gotta say I think it was like 60 or 90 days.

We then won the big OSUK deal. And that to me is just like proof positive of high tech, in the right platform, able to execute. Matt Grimm, credit and props to him. I mean he picked up his family, moved to Australia, set up this operation, 60 plus people, billion dollar plus contract, like very, but clear sign of winning, so we love that.

But yes, it is harder to do something that is in a category as Anderil expands, because we really want Anderil to just be, you know. Is there a different type of underwriting that investors could be thinking about, not necessarily, hey, I'm trying to back the next Anderil and I'm underwriting to a 1% chance of a hundred billion dollar outcome. Or is there a world where, yes, we're building something that might get acquired

or might go through an M&A process. And is that even the, is that even the purview of venture at that point? You go back to Sequoia, Sequoia fund in Cisco, you know, Cisco, yeah, that's quite made a fortune selling company after company Cisco. So if Anderol, you know, ends up being a 50, 80, 100, 200 billion dollar business, the ability for them to buy a company for a billion is venture making for a lot of funds. So I think that the ecosystem is growing the right way that it should. We will have a bubble in aerospace and defense.

It will happen. And it will happen in part because of capital formation, which is really interesting. So you've got venture funds like us and Sequoia and founders and KP and Coastland, a handful of people that are doing these kinds of investments. Then you got dedicated specialist funds. And then you got fund-to-funds. And the fund-to-funds are interesting

because you have a bunch of universities and endowments and hospitals that are like, we won't invest in the defense category because we are not comfortable being part of the kill chain. We as a partnership are, right? But they might not be. But we would invest in a fund of funds that is investing in a venture fund that is investing

in a company. So you have this moral remove that is going to provoke more formation of capital, but there won't be enough companies in the first few years. So you're going to get a bubble. There's going to be a bunch of frauds. There's going to be a bunch of crashes and disasters. Is that an argument against building

a dedicated defense tech fund? Have you ever done a segmented fund? I know a lot of big VC funds have. No, we we we have like a little opportunity fund for some of our best defense companies but not a carve out. We are generalists. We like to have one pocket, one pool. You can do a hundred thousand dollar check, you do a hundred million dollar check. That's great. And you can go sort of all sectors but I don't think there's anything wrong with it. If somebody's a specialist and super passionate about it like go for it. Yeah, Gordy? What was your kind of DC playbook, what advice would you give to your portfolio

maybe five years ago and how is it different than today? You know, five years ago, I think you were working with a lot of lobbyists to try to get meetings on the Hill. You'd be lucky if you can get a center, you were mostly getting congressmen or staffers, you know, if that. Today, I think everybody wants to be in the conversation because they don't wanna be ignorant.

You have a lot more alliances between red and blue, Republicans and Dems on things like shared adversaries. China, you know, that's a question that everybody converged upon. So American competitiveness, thinking about the scientists, the engineering, people are going to debate some of the policy stuff. Should we be cutting science funding? Should we be partnering with South Korea or Japan or UK and these kinds of things? But everybody wants to be in the conversation. So your access today is evidenced by this conference

I mean what Jacob and delian and Christian have done here is just really amazing because it started as this napkin sketch It became a crowd now the crowd has become sort of a movement But the caliber of the people that you're getting is both extraordinary and the politicians sort of keep getting older But the people that are doing the tech companies that we're looking to fund keep getting younger. And I think that's a beautiful thing. Are you taking, would you say you're taking more, a lot more pitches today? I mean, I imagine in the halls here, no, no, no, just in the context of, uh, I know you guys have all, you know, been focused for a long time on like, you know, finding like

researchers that were developing, you know, things that could be commercialized. Uh, but I imagine like just the scale of inbound as hard tech, manufacturing, defense tech, all these categories like became like hot. Oh, the numbers are getting heated. I'm assuming like the number of pitches just gone through the roof. I mean, the number of entrepreneurs and by the way, the best entrepreneurs, frankly, are the people that we backed at Anderle. We've done two people that have vested and, you know, sort of with blessing have gone

and left and started their own company. And so being able to find these fountains of talent that have seen success, have seen rapid scaling, have seen valuations, they understand the venture game, they can raise money, they can attract technologists, they can in-license IP or develop it themselves, those are the people that you can back time and time again. So I think we have a decade long run

of amazing talent in this ecosystem that isn't going to be just Silicon Valley right it's going to be SoCal yeah and it's gonna be other parts of the US down in Texas and and and maybe in Florida how do you think about and by the way sorry we're an international too we had our first two ever Israel investments both are defense companies yeah we did a company in Japan company in the UK so we're interested in not just American defense also, but American allied defense. Totally. How do you think about VCs as a conduit to DC? It feels like potentially low-hanging fruit for some sort of value

add. You know, a lot of VCs would say, oh, we'll help you find your first, you know, VP of engineering or we'll help you with some comms puzzle. But like almost like light lobbyist, just making some introductions to the senators and congresspeople that you might know. Is that a more modern form of value add that's coming out of venture funds these days? I think partners at firms like ours and others

have relationships and they're authentic relationships and you spend time with these folks and you admire them. There's congressmen who I deeply admire and I think are the future leaders, both Republicans and Democrats yeah people like Richie Torres and Jake Aachencloss and on the Senate side young and Slotkin I mean these are like real patriotic Americans that are smart and savvy might have been in the CIA might have been a Marine but quite savvy and they

are tech savvy and they're young and they want to know these companies yeah and and you know they want a future donor base to their own self-interest as Ben Franklin said would you persuade appeal to interest? Not reason yep But I think understanding that game and also understanding tech moves at this crazy velocity that is hard to compete with it's why tech wins Because they out compete because they move faster. Yeah government does not move that fast You have to be a realist government is moving faster than it has in the past particularly in defense You know this appropriation bill this reconciliation bill billion $47 billion plus gonna be going towards shipbuilding, autonomous systems,

like that's gonna be a big boon for Anderil, for Hadrian, for Varta, for Saildrone. How do you think about founders that are trying to time some of these broader structural changes if you were in, if you're in shipbuilding at all, the best time if you want to take advantage of this new bill to start your company was maybe a decade ago, because you're sort of ramped and you've failed and you have a great team and you have some credibility. But how do you think, what's your advice to kind of early stage founders

that are seeing the world change and trying to kind of navigate and see opportunities? You know, an example being like, you know, I'm not convinced that like every manufacturing, you know, automation company is like gonna do, is the right time to start it is now because we don't know very, the future is like murky, right? Like a lot of these things are unfolding.

How do you help founders kind of understand market timing when there's so much in flux? The honest answer, a lot of it is luck. I mean, honestly, like I always say that there's a five year psychological bias that you want to be invested today. Yeah, it should have been five years ago. Yeah. Yeah, okay, but I'll just give you a few quick examples. You think about the people that were doing modular reactors. Oh, yeah. I'm not a personal great believer, and I think it's great for society. We're not invested in them. I did a lot of nuclear and nuclear waste cleanup. You agree with Sean on that. You guys

I hope it happens. It's more solar bull or? It's happening and it's getting cheaper like I'm not crapping on solar bowl or it's happening and it's getting cheaper like I'm not crap it on solar but it's just it's not super exciting but but but I'm a huge nuclear boom you know I've renamed it elemental energy yeah but but if you were developing modular reactors you might have been like okay it's large baseload power it's better than any reminiscence but you weren't anticipating that there was gonna be this data center build-up yep which is at least part of the narrative now not this gigawatt

scale correct and whether or not that things. And now you need gigawatt scale. Correct, and whether or not that will actually see the light of day today, they're able to capitalize and draft off the hype of that, so that's number one. They're thinking about bringing back Three Mile Island, Diablo Canyon potentially, there's a lot of big opportunities for a large scale nuclear. You look at people that are doing minerals and mining,

which is not a really sexy area, but suddenly you're thinking about supply chain geopolitical conflict with China, you're thinking about robots and magnets and things that have to go into Materials general matter question is like, you know If you're in if you're doing anything in mining or rare earths Obviously great if you started the company three years ago and then you get to capture this momentum But no, we see do you see potentially enough? explosion of sort of demand

And and new markets that you could still start something today and have success. You can always start something today, but you've got to remember that I think some of the best successes are not just like execution, you follow this playbook, but it's luck. 15 years ago we started a high-tech nuclear waste cleanup company to go after the defense nuclear waste from pre and post-colonial lawmaking. All of a sudden, earthquakes, tsunami, Fukushima disaster, we become the only U.S. company picked for the cleanup to clean up this nuclear disaster right

that became a boon for this company it was a total black swan for Japan a negative one of total positive blacks want for this company today sail drone autonomous fleets of boats they started oceanographic research and all this kind of stuff bright orange ships guy that's here I don't know if you've seen him Honda Gertz he's a big hulking guy okay two of us are together looks like the old poster of Schwarzenegger and Deondo Gertz, he's a big hulking guy. The two of us are together, it looks like the old poster of Schwarzenegger and DeVito. And he's like, you know, I got a big strategic idea for you. What if you paint these things gray? Yeah. Get a bright orange. And all of a sudden you open up to this

defense market. But that wasn't in their founding thesis of we are going to make a fleet of autonomous systems for Task Force 59 in Bahrain and expand to the rest of the world. Yeah What what do you think? I mean you mentioned some of the other countries that you're investing in Japan, I think you mentioned Australia What do you think the future of partnership between the United States and Middle East allies looks like huge explain? You know, we call this sci-tech diplomacy. We brought onto our team maybe six, seven years ago, Tony Thomas, T2, head of SOCOM, 90 countries, 90,000, all special operations, incredible guy, great entree into aerospace

defense. A guy that was on the board of one of our early Intel companies that we were focused on in the intelligence community was Brett McGurk. Brett just left the administration. He was in Bush White House, Obama White House, Trump White House, left the Trump White House because he had put together the counter-ISIS coalition. And when Trump surreptitiously sort of pulled out from Syria, he abandoned the Kurds, and he had built that allied nation with the Kurds and said that that allied force with the Kurds

and said, we're going to supply you militarily. He then resigned, came back in for Biden. His capstone deal was the Gaza Hamas Israel hostage deal. John 20th left, joined us a few weeks later, Company Middle East. We met with MBS, we've met with Tanoon and ABZ, Abdul Bin Zayed. I am so bullish about UAE.

UAE is so ideologically righteous on being coexistence. All three major religions, the Abraham Accords, Major Siney, Tech Forward, Cleveland Clinic, NYU, Johns Hopkins, Guggenheim, the Louvre, make your cultural institutions. It's incredible. And they're building it super fast, but they're building it thoughtfully. And the ability to make a decision very quickly. High tech, you think about G42 and some of these other things, they've decided we're

not going to cast our light with China, we're going with the US, we're going to build data centers, we're going to partner with the US and it's going to be at like gigascale hundreds of billions of dollars super bullish about UAE Saudi I think is next both for normalization with Israel they want to be in the defensive umbrella of the US they are going to spend a lot of money on AI infrastructure and compute Falcon 9b huge yeah so UAE Bahrain Saudi next I think in the, but of course Israel. I mean, it has a Tech Mecca. Many of those countries realize it's really far to fly to Silicon Valley, but if you can

go to Israel, it's a big deal. Tel Aviv is right there short of flight. Our first two deals, like I said, defense focused. Hamut Al-Meridor, who ran Palantir in Israel, we backed her with Sean in a company called Kela. So Lux and Sequoia teamed on that, and just really bullish on the region. How do you think about how quickly information spreads today?

It feels like a category, you know, a decade ago you'd have a category that could be under-hyped for a long time. Now, somebody enters a space, they release a video, and suddenly, like, a bunch of new people are pouring in. Where are you looking at this point, just besides your own network, for the next founder that you're gonna fund so I have this as a flaw in my personality Which is you know I want to know everything that everybody else is talking about but then I need to understand

What's the white space like Sherlock Holmes? What's the curious incident in the dog in the night the thing that people aren't talking about? I'll give you one because it's unsexy and I've talked about it publicly maintenance Yeah, maintenance is the most boring thing you can think about but here's the the simple logic that I had. It wasn't reactive to a quarter or even a year. It was the basic idea that the cost of capital is gonna rise. Yep. Okay, if the cost of capital rises and you're not funding low interest rate stuff, yeah, if you think about CAPEX on a financial statement, you've got growth and you've got maintenance. Yep. Everybody's been fending growth. New data centers, new

satellites, new military installations, new HVAC systems, equipment, yeah, yeah now if you're CFO or your capital allocation committee Or you're a board and you're like do we really need to spend another hundred or billion on that do we need another data center? Or can we maintain the stuff we have so I think that there's gonna be a demand shift from buy the new shit To how do we maintain the old shit and that is gonna be demand for? Preventive maintenance early maintenance detection robots that can go out into certain things and repair them. So all of that, I think is going to be a big wave. That's the kind of thinking at locks that we're thinking about orthogonally. Everybody else might be tacking here, but how do you find something?

Start making some bets and then three, four or five years, everybody wants to be in that space. Fantastic. Well, thanks so much for joining us. This is great. Triple J. Triple J. Love to see you. Hey, come on the show again. Yeah, yeah. We'd love to go way deeper on a proper interview. So much to talk about.

Thank you so much. And we're bringing in Delian Asperruhoff from Founders Fund, a co-host and co-creator, co-founder of Hill and Valley Forum. Very excited to have him on the show for the seventh time. So let's bring him in. Jordi is posting, amplifying the stream, pumping it up, pump up the numbers. How we

doing Ben? Can we get a little review of the stream is up, the internet's working. It was a fascinating, I'll give you a little inside baseball here. We brought in something called pop-up Wi-Fi to do this stream. And it does not look like something that would normally get through security at the Capitol. It's locked and only the TSA can unlock it. Capitol security police do not have the key that TSA has. And so it was very tricky to get in. They had to X-ray it a bunch. We couldn't get into this locked Pelican case

that has a wifi router and a bunch of cell phone like modems in there, but we got it through and we are live streaming and we're very excited to have Delian coming in later. We also have Christian Garrett hopping on to break down the other third co-founder of the Hill and Valley Forum 2025. And Geordi is tagging madly all of our guests, getting us into the timeline promoting the stream and we have we have an absolutely stacked line But lineup we got delian and Christian coming on then Eric Lyman Lulu should be coming on a lot of repeat guests

Breaking down what's going on in DC? Today at Hill and Valley and here he is delian welcome to the stream Let's fucking go How are you doing good? You know be sure to arrive here on Monday got a little custom to the East Coast realize having you know Switch time zones in like three months. It's tricky It's hard is it nearly the most brutal time. Yeah, it is. Yeah, it's rough. It's tough Oh, you know we started off the day strong. Yep Hamas protesters from the get-go that's why you know

You've made it as a conference. This is the first time you've been protested, right? Journalists. First time, yeah. And that's when you know you really made it. If somebody is disguising themselves as a journalist to sneak into your conference and protest on behalf of a terrorist.

Yeah. What was Harp actually saying? Was he being particularly controversial? I think he said anything. He hadn't said anything? Yeah, literally he was like, he was like talking about his book. And they were like, oh, you're killing Palestinians.

OK, OK. Yeah. As Trump was like, oh. Oh. No. No. But other than that, how's the reaction been? What are the most important messages been?

Obviously, reindustrialization is the theme. But what else is popping up today? Yeah, I mean, I think what's cool is like this is a week where we talked about this in a couple prior segments around the, you know, continuing resolution. So this week, the big bill in Congress is the reconciliation. Yes. Transferring it from basically, you know, sort of leadership into now, you know, congressional language that actually goes gets appropriated to individual program offices. And so I think it's like a really fascinating week to have this conference because, you know, a significant portion of that bill was around shipbuilding. And then today we have panels on shipbuilding with some of the appropriators that are literally, by the way, on the other side.

I've been bopping back and forth between Capitol Hill briefing congressmen and then Congress. That's awesome. And so it's just like, there's something magical about it where this stuff is happening on the perfect week. And then the other thing that's been fun is even for congressmen that weren't aware or not even attending the event, they've been like, so do you know what's going on? Like I have like a lot more Silicon Valley tech companies on like my briefing calendar this week than like I've ever before. And I was like, well, sir, like I'd like to describe to you about this thing

called the Hill and Valley Forum. We'd love to have you the following year. So I don't know, it just feels like an institution. And then the other piece of feedback that's been fun is like, congressmen have even said that like this is a place where they get far more casual time and especially on a bipartisan basis like tonight's dinner yeah 17 Republicans 17 17 Democrats Wow and it's extremely bipartisan and it's totally off the record completely casual if one person misses the dinner somebody will write an article right down the middle. Like sorry you can't come in and somebody bailed from the other side. It's going to be equal. We guarantee it's 17 and 17.

It's going to be equal. On the $150 billion appropriation, is that an update to what we talked about I think the first or second time you were on the show where you said, hey, maybe there's not more money coming. Maybe it's not going to be a jump ball for a bunch of startups. Has this updated your thinking? Yeah. I mean, I think it was sort of, you know, the February bills were clearly like a pause.

I was just like, look, we're not just going forward with what the prior administration did. And even though we're very late in the game on passing this year's budget, we're just going to pass a continued resolution to put everything on pause. And then, Letson said, you know, sort of set it from the top. So, it's definitely, you know,

sort of a step in the right direction. Obviously, you know, so SecDef is talking about the first trillion dollar, you know, sort of defense budget. Since we last chatted also, they pushed out the executive order on basically analyzing all the contracts and programs that are behind schedule and behind budget, you know, sort of looking at canceling those. So yeah, I think generally trending, you know, sort of all in the right direction, but I'll always continuously reiterate of just like this doesn't mean that there needs to be like unbridled optimism.

All of this is default going to Silicon Valley companies. Like a significant amount of that reconciliation package has a bunch of line items that are currently only possibly be served by traditional defense contractors Yeah, like the primes and so yeah Is there anything to read into when you see a really round number versus a very precise number? um The round numbers are when leadership are doing it the precise numbers is when the program office is actually saying like okay Is one more bullish than the other?

If I see a very precise number and I'm like, oh, that's definitely happening versus the round numbers just like, oh, they just threw something out and they're going to figure it out later. Oh yeah, the precise number is going to be more bullish on it. The reconciliation package is like great, but it's leadership saying like, there should be approximately $150 million sort of sent towards this package. And it's like, okay, but like, is that really the right number?

Like it happened to be exactly $150 million. Exactly, I'm not, it's like, what's necessary? So there'll be some fines. Early in my career, VC was like, oh, we had our whole team run like a DCF. We know exactly. And the value of your company came back at $100 million. And I was like,

there's no way that you actually have a spreadsheet that's been out perfectly seven zeros or whatever. No way. Well, you know, according to leadership, it happens. It happens. It happens sometimes. How do you think about sort of forecasting government demand?

One of the things that was top of mind this week was $500 million allocated for autonomous systems broadly. Felt low for a lot of people when you compared it to other categories yet Sean McGuire's point was like if you kind of just as long as that number is gonna go up over time maybe it's good and it's more efficient way to kind of deploy budget where because if you're like you spent five billion dollars this year it's gonna be spent pretty poorly but how do you think about kind of like forecasting government demand and how should teams think about it, I think you can sort of use the reconciliation package as you're sort of like

Combination of tam and keger right? Yeah, it gives you a sense of like what the current tam is But they're clearly indicating also what the keger of that is going to be and so I think in some ways for defense startups and startups In general, you know to go back to like the Peter Thiel's year to wonder floss You want to monopolize a small market first and then grow from there over time. And so in some ways if they were forced to spend five billion dollars in a single year, probably inefficiently and probably zero chance that happens to be one provider. There's no way that any startup, no matter how great you are, is ready to spend five billion dollars in a single year. So by default it's super disparate, there'd be a bunch of different players which you might not necessarily want.

15 shipbuilding players. Like, you know, probably what's best for the country is like, probably not one, probably not 15, but probably like three that are constantly competing against one another, right? I think that's probably what happens in like the launch provider world, right? If you look at last week, they announced the latest phase of national security, basically, you know, so launch contracts and, you know, SpaceX, you know, ULA won as per, you know, sort of usual, but they did introduce Stokespace and Rocket Lab. And so it's like, yeah, I think that's probably like an appropriate

sized pool and the equivalent on like you know sort of shipbuilding. So I think you can think of it as a TAM but it's not guaranteed just like in any TAM in technology you're not necessarily immediately going to capture it. So like you know Varda had equivalent you know sort of areas where there was some language around nuclear weapons monetization, reentry testing, etc. of you know sort of budgets that were in that same you know sort of dollar range but again that's just like literally the first step of, okay, now that's going towards that program office.

Now you have to start thinking about what do the contract look like? What are the actual missions that you're gonna be providing for them, the hardware that you're providing for them? But yeah, I think generally, you know, bull for Defense Tech, that there's a whole set of, you know, sort of budgets now

that in particular are very uniquely tech forward, right? So if you look at like the concept of like unmanned fighter jets and unmanned surface vessels this reconciliation package is by far the biggest budgets that you've ever seen for those types of activities and obviously that is a particular area there's some in there that's like ammunition and like you know army barracks like you know refurbishment things like that I'm not sure they like and rolls great at like army barracks refurbishment sure but like I think they'll probably be pretty great at some of this like unmanned

surface vessel activity. And so it's really exciting to see like some of these Tams be pretty big that are very clearly only servable by like, you know, this next generation of tech companies. Yeah. We got to get to Christian. So last question or we want to let you know, this is great. Yeah, just congratulations. Yeah, this is it. I said

this is the highest density of absolute killers that I've that I've you know set foot in in a long time. I'm glad after I saw you guys YC thing I just like texted to get afterwards and I was like this at Hill and Valley it's gonna be sick. We don't need any more part-time podcasters. Yeah. That's great. Let's bring in Christian Garrett from Hill and Valley 137. How you doing?

Let's break it down. How's the day going? What's the latest with you? Is that your third or fourth coffee? Or are you on tea now? Cause you're losing your voice. I'm a tea guy. You're a tea guy.

I'm half European. Okay. And any way that I can dig at Deleon by showing how strong Europeans are, I think one way I can do that is by drinking a lot of tea. And you're also wearing a European watch today. We got the Cartier Santos on. I can neither confirm nor deny anything that you're saying. It looks fantastic. How's the day so far? I'm sure it's been a blur. Yeah, it's been awesome.

I'm sure you've heard from folks all day. You'll hear from more from founders, investors, folks in office. I know you guys will have elected reps in and out over the next few days and today. The enthusiasm and excitement is really, really special. This is the fourth year, and just to see how big it is, is a testament to how much our ecosystem has changed.

I talked about earlier, it was less than a decade, nine years ago, that Palantir sued the Army for commercial preference and violating Title 10 US 2377. And today, Palantir is seen as one of the greatest partners in the army, particularly seen as one of the greatest partners to Palantir into our ecosystem. It's incredible. Apparently SpaceX sued as well and they use the same lawyers as Palantir. Yeah, yeah. There's a lesson in that. Yeah, he's got a good business going. I know that the theme is reindustrialization.

What are the other conversations that are happening here? What are the other subtopics that people are digging into? Yeah, yeah, I think within that, right, you can go all the way down the supply chain or value chain to rare earth elements and minerals. Sure. We just had a panel recently with James Latinsky from MP Materials, Ray Scully from Lyraq.

Talk about right place, right time with MP Materials. Right time. He's awesome. Crazy. He's awesome. When did that company start? Years ago, right? Years ago.

Oh, the company's around for decades. Decades. It's one of the oldest minds. And they took it over. And it's a great turnaround story. Oh, wow. One of our partners, Lower Carbon Capital, and Clay Doomis moderated that.

Congressman Richard Torres is in that. That was incredible. We then went all the way up to, we had a panel with Friedberg and Sean McGuire, Senator Todd Young on manufacturing, which we hit on everything. We actually talked about how energy and education are the key unlocks there.

And then you go up to defense, right? And Andrew obviously has hit on this, and you'll see more talks from Saronic and others talking about the work that all these defense tech companies and the existing primes are doing to show up our industrial capacity. So I think you've just seen the full gambit. I know Jensen hit on semiconductors as well. Jensen's interesting because he's, I was asking this question of like is he a customer of reindustrialization or is he truly a reindustrializer? Oh he's both.

Yeah I think you see where Nvidia is going right. They're now selling full systems right. I mean they're moving away from systems, right? I mean, they're moving. Yeah, they're manufacturing that, right? From Jess to GPU. I mean, they're doing the networking, the pooling. Yep. So if you extrapolate where that company is going, and you look at where they are today, 100% you're right. They're on both sides. Yeah, you can't really be a trillion dollar company with just, hey, we just designed some stuff and then let TSMC handle the rest. There's so much more about that company. Yeah, yeah fascinating Jordi Yeah, I'm interested more on who who on the on the on the hillside really gets it Richie Torres his names

Yeah, come up quite a bit How many people like that does the valley need to or in order to you know? Continue to be successful right because I feel like feel like a big part of what's exciting about this event is because it's bipartisan, it's not about this admin, right? It's about the next 10 years, it's about the next 15 years, the next 20 years, and so how many people are, we talk about this in Silicon Valley,

it doesn't take that many great CEOs to transform an industry. Sometimes it just takes one. And so how many true allies do you think we need and are those people today or are you hoping next year we get more? Well, I mean, one piece of that, which is more of a meta point,

but I think it would be great for government to have its own version of founder mode. We need to get back to that within government. Sean Sankar talks a lot about this and how that's something that's been missing. And if you look historically, when we've had success, when we were really great at building, it was because we empowered individuals within government

to own these programs and see them through. So I think that's a meta point. And no one knows the name of the person who's responsible for high-speed rail at all. It's just hard. Sean always talks about Admiral Rickover, right? He's a great example of this person, right? We need these people again.

Now, I will say today, Congress, there's a lot of champions in Congress, there's a lot of people that get it. They provide support, they obviously draft policy, they provide cover, but what you really need more of are these kind of founders at the individual level, from the program officers, to the folks running these departments.

And so, I think that will be a big unlock. And then starting back on your question, within Congress, you look at the folks here today. You have Senator Shaheen, you have Congressman Richie Torres, you have Congressman Gabe Amo, you have Senator Todd Young, and then you have House Speaker Mike Johnson speaking later.

I mean, you really see across the board, both Democrats and Republicans, there are folks that understand the importance of this. And, you know, the last panel said this, like, this is as bipartisan as it gets. Like, we want to have a critical mineral and rare element dependence. We want to get rid of our dependency on China there. We want to have redundancy there and a strong supply chain. We want to have energy abundance. Right? And we want to have a strong deterrent strategy and a strong military.

And so Democrats and Republicans align on that and the tech industry is preaching something that is in of itself aligning and unifying and so I think that puts us in a very good spot to try to build bridges and be successful. Yeah, can you, I know you work with a lot of later stage companies, but can you share some best practices for government relations, lobbying, that you're seeing tech companies get it right? What are they doing? Yeah, you know, I think what's interesting is, and I've talked a lot about this, Marc

Andres has a lot of great stuff on this, you know, tech doesn't have a trade association, and that's actually a very good thing. So it is on the onus of individuals, founders, entrepreneurs, operators, the companies, and the investors, I think, as well, to spend time within government educating policymakers on various subjects where they're experts in. A lot of the work that you see here are from folks that do not sell to the government, right? There's no revenue to be had here, right?

There's just educating and making sure that their industry is a recipient of good policy, good regulation, and good support. And I think that from the first part, I think the best thing is making sure you have these relationships with folks. They are willing to take the meetings. It's incredible. And so I think that would be the first step.

I think the second is also figuring out where's the highest leverage thing that you want to focus on. You don't want to come here and just take meetings for the sake of meetings either. You want to be focused on something very specific. You want to care about something very specific. And that makes it easier for folks to digest.

And so I think that's the other piece is like figuring out where your business should be focused on, whether it's a potential contracting opportunity or something you want in a budget, or whether it's just a specific policy or regulation that you care about. So I think it's like first, go build relationships, go rely on your investors, go do this directly,

like that's the way to do it. And that's how our ecosystem is going to do and always has done it. And then number two is figure out what the high leverage thing is, and quite frankly, don't go take the time in DC until you have that. Interesting.

Okay, cool. Well, we'll let you get back to it. Thank you guys. I'm sure you have a million weddings and panels. See you guys later. Yeah, we'll see you later. And let's bring in Eric from Ramp. Welcome to the stream.

Let's hear it for Eric Gleiman. Has your panel already happened or is it coming up? It happened this morning. It happened this morning. It was a ton of fun. We were locked into the stream. Yeah. But give us the overview.

Ravoy was fired up. Yeah, give us the high level. What is the pitch and how did it go? It was fantastic. Look, I think for private companies, startups, whatever it is for a lot of years, getting more from every dollar spent is just obvious, right? A dollar saved is not a dollar earned. The average American business has an 8.5% profit margin, so a dollar saved is 12 earned. The government is thinking about this.

Of course there's a lot of tax dollars in but the deficit is growing every year and so whether it's Doge and the folks there or other parts of government everyone is starting to think about how can we start to apply modern tools to drive savings. And in many ways ramp is at the forefront of it. A lot of the payment systems that are used by the government from the Treasury, which doesn't require, at least in the past, who was sending the payment, why did we send it, what was the purpose and attestation of repayment, now that's starting to get put into credit cards, they're still using old antiquated

designs where you have one system for cards, but your actual expense policy doesn't drive how these cards behave. So there's people who are able to go and use cards for purposes that are not really advancing taxpayer interests. And so we talked about this both at a high level, so Senator Joni Ernst talked about how she's approaching it, how the Doge team is approaching this, and then Keith and I shared a little bit from the ramp context how we work with private companies. Is there a story that you're particularly drawing from of a more recent tech company

selling into the government that's not in the defense tech? Obviously we all know the SpaceX Palantir and their old stories, but at a certain point Microsoft must have said, hey, we're gonna try and sell Windows into the government, or we're gonna try and sell Outlook, or Excel into the government. But that's a long time ago, it's a huge company. Are there other companies that aren't maybe government first, but have developed best in class government sales functions

that you look to, or as like interesting anecdotes, are there other case studies that you've heard about that are interesting is there anyone out there it's I mean I just think I mean a couple things I don't think people realize the scale of how large the US government is yeah between federal state local education yeah one of those mind blowing that I learned is one in six Americans who work work for the US government. Yeah, it is huge Yeah, and I think it's some scale if you want to go and be a you know It's scale technology provider financial service provider health care provider. Yeah, you're gonna work with the government Yeah, I just think so and so one of the openers this morning was the Secretary of the Interior to Burkina. Yep

Who? You know, who had started an accounting software company called Great Plains. He sold it to Microsoft. I think Microsoft is a great example of it. Yeah, totally. Yeah. That's probably the best example that I can give. Yeah, yeah.

In terms of a government contractor. And interesting, they're one of the big tech companies that never really blinked in their support of the government when there was that era in 2015, 2014, where a lot of tech companies were saying, hey, maybe we want to stay away from the US government for a variety of reasons. So it's good to see that there's a resurgence here. In terms of technically, or not even technically, but just the sales process, is that wildly different than a normal sales process or is it somewhat like just selling to a Fortune 500 company? I look at it, I mean, not to interrupt,

but I think the dynamic, if you're a scaled up, you know, fintech company and you plan to be in business in 50 years, like you said, you know you're gonna be working with the government at some point. Yeah, one way. So it's more about figuring out the right ways to do it early on and also not being, you know, understanding like always having urgency because I think that every American can get behind and get behind efficiency, right?

It became political over the last, you know, 90 days due to Doge and stuff like that. And like you said, one out of every six people works in some way for the government then obviously that's gonna get political but when I when I look at it you know it's just about how do you defense if you're if you're dual use or you're you know primarily serving the private market or private companies it you can you can think I feel like a lot more long-term versus the defense you know defense tech companies that are here and they're like if I don't get their government this year I'm done you know and I feel like a lot more long-term versus the defense, you know, defense tech companies that are here and they're like, if I don't get their government this year, I'm done. You know, and I think like having that, I'm sure that sort of like long-term thinking around partnership with the government

has driven a lot of your decision-making. Oh for sure. I mean look, it's um, I mean maybe a couple things. I mean first, I actually just think there's like a very, I think some of the story of technology, I think about Steve Jobs' old famous quote of, you know, a computer is almost like a bicycle for the mind. It allows you to go faster, do more, think at an accelerated rate, and ultimately achieve more. And so I think it's not,

well, it's great that people are trying to modernize defense. I think that there's a lot of people doing many types of great work. There are departments of veteran affairs, departments of whether it's education, there's people doing important work. And I think one of the examples that often I think just makes clear and connects with people is there are I think about a million folks connects with people is, you know, there are, I think, about a million folks serving in armed services, and they're doing expense reports too.

Yep. Yeah. And you take, you know, some of America's most courageous people who are serving, sacrificing a lot to do this, and then you say, you know what, I'm gonna make you do hours of expense reports. I had a look at a nuclear submarine for years. And I was like, what was that like?

He was like, a lot of paperwork. A lot of paperwork. I was like, I can't believe you're 30,000 leagues under the sea doing paperwork. But he was like, yeah, that was my life. Don't get me wrong. It's important work. You should explain why.

But actually, it would be great if a lot more of the work was to defending the country, going in the VA, serving our veterans, whatever it may be. So I think that there's a human and moral side to it. But to the other question you asked of working with the government, in some ways, this was all pretty organic. I mean, there was a tweet put out, I think, in February that I think there was 4.7 million credit cards

issued for I think there's about half the number of federal employees and people were running where all these extra cards yeah yeah so a lot of cards were turned off and at the time you know we reached out to someone who was a former customer put us in touch and so it's early we're involved in the same process as everyone and I think no matter who does it, I just think that the way I would almost describe it is people would find it ludicrous if our Air Force is flying with propeller planes in a jet age and yet that's kind of what's happening with the tools we use to make expenses, do our accounting,

make sure attestation is clear. These are old disparate systems that I think private industry has adopted tools like Ramp leading the forefront of. It's integrated, your expense policy drives it, you can buy it, does your expense report, your accounting, and so however it goes, I just think countries are gonna be a lot better off using modern technology.

Yeah, I mean the thing that I thought was fascinating is they couldn't actually turn extra cards fully off. There was a dollar limit. Which is like... Textbook and Twitter system. Yeah. And even speaking of that, you'd think, okay, let's go and turn a limit to zero or one dollar or whatever it can be.

I've heard stories of individual people because of the way the portal was designed spent four days going one by one. Oh they couldn't even run a cron job. No way. No one has done something like this but it's like when you look into these things that you think should be trivial are very hard

when you hold systems like this. It's amazing. Well we'll let you go. This is great founder Financial system welcome to the stream cream So we yeah We get all these supplies, it's fantastic. Yes, we do. So obviously we're talking about getting the entire government on ramp and then getting every country in the Western world on ramp, one at a time. I was talking to the Anderil guys about some of the integrations that they have to do into these antiquated systems just to do communications, because they want their drones to play into the modern systems. Have you started even digging into like what the technical standards are that are running? We've talked to folks about like the Swift system and you know

stable coins but then there's also like the overnight payments thing. Like where do you even start with that? Is it a GPT query or do you start talking to people? Like how do you build your your knowledge as a technical mind in how the government? Runs because I was telling Jordy I want to talk about the the running the government on rant more just because like I don't think most people know how expense reports Work in the government. I don't think it makes sense So yeah, what was your journey to kind of digging into this is seeing like is it technically feasible? Yeah I mean, it was crazy even Even yesterday, I was hearing a story

of someone who spent three years in the government and filed an expense report on their first week and only got the check back after they left. So, it's kind of crazy. I mean, think about it in the, you're at a company and you file an expense report and the company says, yeah, we're gonna pay you back for this, and you don't get it for three years.

You would be, yeah, yeah, yeah, interest, but also it's just offensive, right? It's not nice to an employee who's, you know, to basically take their funds for such an egregious amount of time. So it's kind of crazy. It's basically companies and government in some cases using their employees as a bank.

That's kind of what a bank is supposed to do. Like front the cash so they can do your business and eventually you pay them back. To your point on the complexity of those systems, I mean one of the first things I did when we started on Ramp is try to understand how ACH works. And it is absolutely mind-blowing. It really boils down to very basic CSV files, Excel files almost, that every single entity puts together, constructs, and at the end of the day they get shared through some system and there's some computer sitting somewhere that's reconciling these files together.

That's why it takes so long to send money. It's like all these systems run in batch, take a full day to get access to that, to get access to information and be able to reconcile it. And you got about eight of those, right? You got one for like bank to bank payments, you got some for, I mean, really the way people used to file expenses is they used to submit their credit card statement that doesn't connect at all to the receipts that they have in their

inbox and then you have to wait an extra day before you find out that you actually forgot to submit the receipt that you wanted to submit for the restaurant that you were at. I mean I think if you connect these systems obviously you can move a lot faster. Talking to people in the government I don't think they even know what they're supposed to do, so a lot of them just end up either not filing expenses or they get a card with no controls and they're lucky if they have it

and they share it with their friends and who knows what the money's being spent on, but yeah, one step at a time. Do you know much about the counterparty, obviously Palantir pioneered like the forward deployed engineer because Shamsankar was telling us the first time they sold Palantir for on-prem installation the team on the other side a software developer tech person IT person that worked for the government Installed Palantir on a box with like four gigs of RAM and they needed 16, something like that.

And we've seen with Doge, folks like Luke Ferator are going in, you could see Luke Ferator in another world like working at RAMP or working at Palantir or working at any of the high growth, very strong engineering culture companies. Do you think that there's a need for America's best and brightest to kind of do a tour of duty as maybe just an

insane IMO level software developer in the government, even if that takes away from your pipeline, I'm sure. A hundred percent. That would be great. I mean, this is a company that we all have a stake in. Yeah, of course. The equivalent would be that. Yeah, that's a good point.

We're all American, right? Yeah, yeah. You get an equity stake in the government. Yeah, we do. Like, you want the government to run well. We all win if we're operating more efficiently, we're making better decisions, and we all pay less in taxes.

No, it's funny, efficient spending, which, you know, Ramp is focused on non-payroll spend, right? And so, payroll spend gets political really quickly, right? We talked about this with Eric briefly, where, yeah, if you're on the government's payroll, most people don't wanna be off it, right? Like they have a job, they've maybe been doing it

a long time, but non-payroll spend should be the least political thing ever, right? It should be like, we should spend as little as possible, and the dollars that we do spend should, every single one, down to the penny, should be spent efficiently. What what are your other kind of reactions? How much are you spending time here at the event versus you know meetings around town? Yeah I mean the event is

taking another form this year it seems it's a lot bigger than it used to be and level of excitement is incredible. I think it's the first time that I felt that government is really trying hard to modernize, build bridges with companies in Silicon Valley, New York, and other places. I think people are on the same page that, yes, we need to spend less, we do need to introduce technology to help us. And look, with a lot of the advancements in AI, some of the problems that seem too intractable, now you could just throw all your massive database into an LLM and you can wrangle it that way.

So we got better tools now to do the work. A lot of people are excited about it, so we'll see what we can do. I mean, frankly, we're here to help. There are a lot of founders that are here thinking about very specific regulation or deregulation. Obviously, like nuclear energy is the biggest one that is very concrete may speed up the time to get a new

reactor design approved. Is there anything like that in finance? What is it give us some of the history? What's the good and what's bad? It's I mean, it's everywhere like money, transmitter licenses is the most basic one today to Move money around. Yeah, you need a license, but you're not only need a license in an American license You need a license in every single state. Yeah, which is kind of crazy Yeah, yeah

Cuz they're all looking at this same things and making sure that you're abiding by the rules and like the rules are quite similar But it's kind of crazy. I remember having to sit down in a room with quite similar but it's kind of crazy. I remember having to sit down in a room with Chor and I on our team who helped us do a lot of that work and there was a stack of papers this thick and I just had to sign one at a time. No way. I read the first one, I know what this is about, I read the second one, they're very similar and at some point I'm just like, I'm already all in. You're trapped in a room, there's a cup of coffee, and you say, go, sign. How has it been when you look at sort of incumbent financial services companies, a lot of them have had, I imagine, a large presence in Washington for a long time.

You imagine Ramp ends up with a fairly big office here at some point. How do you look at that? I imagine you've been taking trips here. I know you've been coming to Hill and Valley But is this a place that you you and the team expect to be a lot more? We'd love to. I mean, we're great to put our best resources forward and try to help But I honestly think about it the same way I thought about a lot of the products that we build I think it'd be a win if people spent as little time as possible in them

Yeah, and more of the work is being automated. I think part of the problem that we build. I think it would be a win if people spent as little time as possible in them and more of the work is being automated. I think part of the problem that you have in and around Washington right now is the incentives are so misaligned that you have incentives to drag projects on, they cost massive amounts of money. Any little change that you want to do is also another another massive bell and like our hope is to build great technology and hopefully if we do that well we don't need massive sort of like time and people investments to get them to work. Yeah. Technology is just doing the job. Yeah, I was talking to Eric too that the thing that stands out to me is is Ramp is playing in

decades and there's a lot of founders here that are like, if I don't get a program of record in the next two years, like I'm done. Yeah. And I think ramp's position is being able to think long-term. There's very pressing problems that we have right now, you know, spending being, being one of the biggest, but how do you kind of zoom out and be like, you know, you know, uh, in, in the fullness of time, I imagine ramp and, and the government will have a very meaningful partnership. And it's about finding the kind of right ways to do it in the fullness of time, I imagine Ramp and the government will have a very meaningful partnership

and it's about finding the kind of right ways to do it in the beginning without understanding that you have tens of thousands of happy customers and you gotta make sure that they're continuing to get resources and attention. Well that's fantastic, we'll let you get back to the conference. Thank you so much for coming on. Thanks for coming on.

Come on again soon. We'll have ARA on probably next week at this point. Hell yes. Great. The rotation. And let's bring in Josh Steinman. You got a minute? Come on down.

Josh Steinman. There he is. Look at that. Look at that. He's back in his seat from 1A. What's up? Yeah, so Steinman, we ended up on the same flight. Yeah, it was fantastic. And Steinman we ended up on the same flight yeah

and Simon spotted us yeah, because I had a huge ramp logo on my Outstanding it's fantastic. Yeah, it's great to see you. Yeah, great to see you, too Where'd you get that though? Oh, we made it This is a one-of-one right now, but we will be multiplying them soon. You'll get our people will talk to your people. Every guest will get one for sure. That's the thing people understand the LA street wear scene. Yes. Like so far away from tech.

Yes. You can get super high quality stuff very well made. Totally. So I saw that and I was just like, perfect. Yeah. Yeah. That's awesome. So yeah, how's the conference been?

You're probably one of the few tech founders here with real DC experience. When did you first go to DC? When did you first get into politics? Take me through your journey a little bit. Yeah, so I started my career doing expeditionary stuff as a military officer. So two tours in Iraq. One, my first tour, I was at a unit down in Virginia, in southern Virginia. And then my second I came up here to an intelligence agency here in DC. And honestly, it was 20, I think I showed up in like 2011. And it was like peak Obama. And as a military officer in DC, you kind of of you were definitely the help yeah

you'd like go out to a bar and like girls would be like oh what do you do oh you're not some like staff director on the hill like you know thanks yeah but it worked out you have family now someone liked you yeah it's great it's true no it's good so did that got out went to Silicon Valley. And then yeah, got a phone call from an old boss after President Trump won election the first time during the transition. He's like, come help me out on transition White House transition. And I came and just didn't leave. He asked me to stay as a National Security Council staffer in the White House for four years.

Fantastic. What were the top? What were the top issues then and how have they evolved? Yeah, so I think the biggest issue in the unclassified space was telecom technology. This is the Huawei, I assume, 5G. So 5G, so this was like one of the big issues that I owned for four years. So yeah, think of it like if you were in the middle of the Cold War to go to the Russians and be like, hey, can you build out the electrical grid?

Yeah, yeah, yeah. Oh, of course. Of course, no problem. Electrical grid for you. That's a fantastic Russian. Don't worry. Yeah. And, you know, it's very clear that like, and there's there's Wall Street Journal Journal articles about this. Yeah. Like the Chinese in Africa with Huawei, they just use it as a spying tool. Yeah, yeah. So it's like,ying tool. Yeah. Yeah. Yeah.

So it's like, why would we have those people build the American telecom infrastructure? Yeah. Why would we have them build the telecom infrastructure of our five eyes partner? Yeah. Like London, Australia, other places. But yeah, I think that was probably the biggest. And where do we, where do we stand today with 5G? I see a 5G icon on my phone sometimes.

Is it real 5G or are we behind? So interesting you should say that. A bunch of the companies kind of raced to brand 5G as like here when actually the infrastructure. It wasn't quite there, right? I think a lot of that stuff's been rolled out and being rolled out. The big challenge is that America is a big landmass.

Yeah, yeah, totally. So I'm guessing we're probably mid-rollout. You'd have to talk to, actually, you guys should have Brandon Carr, the FCC chairman. Oh. Yeah, yeah, totally. So I'm guessing we're probably mid rollout. You'd have to talk to, actually, you guys should have Brandon Carr, the FCC chairman. Oh yeah, yeah, yeah. I've met him a few times. Yeah, that'd be great. He's great.

So he'd be able to tell you what percentage, if you put a gun on my head and you're like, take a guess, I'd say like 65% or something. Because it's a race. So the theme's reindustrialization, but in terms of what you do, what are the more interesting sub themes going on? I'm sure you're excited about reshoring manufacturing, but there's other stuff

top of mind. Yeah. Spain power outage and explosion of Northrop Grumman missile, you know, manufacturing and testing facility in the past week. Okay. So like there's this. Oh yeah. You think that was an attack. So here's the thing. Do I think it's an attack? I'd say it's like we got a tin foil hat. Yeah. Here's the problem. Yeah. No, I you look at the top five like you you list out like the top 10 facilities that the United States and our allies use to manufacture weapons. Yeah. Half of them have had catastrophic events in the past two years.

So I don't know, does that seem like a coincidence to you? In the military we used to say like, once is a tragedy, twice is a coincidence, yeah, three times is enemy action. So like, the number's big. And yeah, they're like, oh, these things go boom. But like, let me tell you, like it is 10 plus years old, un unclassified you have cyber actors going out and

Modifying safety systems. Yep. Yeah, tell operators that things are operating within the right parameters. Yep, so they blow up Yeah, it's well. It's well established at Western, you know Groups have tried to metal with bronze Uranium enrichment. Exactly. Why would they why would the advers adversaries not wanna do the same thing back? It's just common sense. This is what warfare looks like. And the fact that we don't know, and I'm not saying it is or it isn't.

What I will say is every single person out there building these types of facilities today or running them now needs to have the capacity to monitor them 24 seven. Otherwise you're not gonna know. And so it's like, what are you actually building for? Like you're building so that on the day that things actually kick off,

you'll finally figure out if you built a defense company if it survives. I wanna talk a little bit more about the shape of your business today. I embarrassed myself as a podcaster. We try to be experts in everything, but I completely botched the understanding of your company. And so how much of it is consulting driven?

How much of it is product driven? How much of it is SBIR, program of record, the stuff we hear in Defense Tech? Give us a rundown of where you are today and where you want to go. Zero consulting, zero government, 100% private sector. Interesting.

It's a SaaS offering. We come in and protect an industrial facility against cyber attacks. So we do that by installing sensors in the facility. And then we've got a software layer that's collecting essentially anything that generates data. Got it. These things are already generating data

on a big, like, public admin. You're looking for patterns, right? We're looking for patterns. We're looking for the absence of certain things. We're seeing, like, hey, what process is running in this place? What's talking to what? And we're basically the first company

to actually take every single thing that's generating data on an industrial infrastructure and take that information and look for threats. Yeah, we talked to the founder of Chain Guard, looking at maybe supply chain attacks. Is that something that's completely complimentary or in some ways competitive to what you do? Oh yeah, we're trying to do a deal with them, right?

Okay, cool. Yeah, we're live, by the way. It's all good. But we're trying to do a deal with them right now. Okay, cool. Yeah, we're live by the way. It's all good. But we'd love to see it. We love companies working together. I literally think my co-founder's meeting with them like right now. Fantastic. So, hey guys.

Switching gears a little bit, how important is it that Hail and Valley is bipartisan? That's been something that, you know, we're, uh, Delian and Christian have been- Your feed typically isn't really bipartisan. No, but in the context of if you're a serious technology company and you want to be around crushing it the next four years and the four years after that

and then the 10 years after that, right? Totally right. I feel like, and you I'm sure got to experience the sort of back and forth nature of Washington, but when it comes to, you know, talk about how you think Hill and Valley can kind of evolve from here from your perspective as somebody who's spent so much time in Washington. Yeah, here's the reality is that obviously, like, I spent four years, first day to last day in the first Trump admin, and was never going to be befriended by people

on the left just because of that. They didn't have to know me. All they had to know was that piece of information. And I was just never going to have an opportunity to even talk to them. I do have friends. I wouldn't dare mention who they are that are on the other side of the aisle.

I wouldn't want to put them in a spot. In the crosshairs. Yeah, exactly. But there's good people on both sides. And I've done a lot of good work with folks in the Democrat Party. And so I think that you want to find people that want to solve the problem that you're solving. And that can be any number of reasons.

It's because you're going to put a factory in their district. It's because they care about an issue, because they're on a subcommittee. And like you hope, and I would encourage folks to just look for those folks. They'll be on both sides. Obviously, part of it is just like the brand that I've built coming out of the place that I came. I'm talking to folks that I know,

and that's what my feed looks like for that reason. But yeah, I mean, part of it is just, that's how you know, so yeah, you I mean, you mentioned you're entirely b2b, no b2g yet, or are we properly resourced on the cybersecurity government? Huge fight. Because, you know, we know about Palantir, we know about some, I mean, Microsoft sells to the government, but is there a cybersecurity champion that sells to the government right now who who should we be looking to? Yeah, not really I mean some of the solutions in the space are okay

They're not great turn you buy them and then you have to like put a bunch of people on top of them sure sure sure But yeah, look we're in some talks with some interesting folks I'm hoping they'll be able to announce something soon announce something soon with some of the folks here in this space about building secure facilities, secure factories. And I just think that that's probably the most critical thing for us to think about from a security perspective because I want us to be able to sustain operations on day one or day two or day 10 or day 50 of a conflict

because that's gonna make it more likely that we're gonna be able to stay in the fight and win. And if we can't, like it's a huge problem. Yep. Yep, that makes sense. Well, should we let him know? That's been great. That's been great.

Fantastic. Thanks for jumping on. Thank you. See you back on the floor. See you back on the floor. Yeah. Bill, come on, give us an update. You haven't been on the show in weeks.

It's been far too long. We got Phil from Dirac in the studio Bill, come on, give us an update. You haven't been on the show in weeks. It's been far too long. We got Phil from Dirac in the studio in the Temple of Technology in the capital of the capital. Great tie, by the way. Is that a unicorn? Yeah, fantastic tie. What's on there?

No, no, no. I thought it was a unicorn. Actually, it is Moogle Conquerors. I was recently in London. Took a trip down Salo Roe, walked into Drake's, and said, you know what? That six of six yes only six made tie Oh, you gotta have one

You gotta meet the other five guys who wear the same tie so true Let's get a group check Patrick Bateman style you know let's see Bateman's card yep popular in the 90s. I'm thinking we're gonna be bringing back ties I love it Let's see Bateman's card. Popular in the 90s, I'm thinking we're gonna be bringing back ties. Let's see Bateman's. Let's see Bateman's. We've talked about your business before. It feels like mostly B2B selling into defense tech companies, selling into hard tech companies.

What is top of mind for you here? Obviously it's a great event, good to meet people, but is there a particular agenda item that you think is important to highlight at Halon Valley this year? Absolutely. So yes, we sell into airspace and defense, automotive, ag and construction, maritime recently. Could be announced soon, but closed the maritime deal, which is very exciting. Congratulations.

There is a very, very critical lack of discussion around the American worker. You know, the average age of the American manufacturer is 55. Yes, five, 10 years, we're losing a lot of those folks. And with that critical tribal knowledge, yes, that without writing down institutionalizing, capturing in some way, we are going to see an immense loss of our ability as a nation to produce. Yes. And so there, you know, I've said this before, I'll say it again.

You know, we have spent billions of dollars on environmental conservation. We have spent zero dollars on tribal knowledge conservation country This is something I'm advocating from a policy perspective. You have a hot take on AI Not disrupting your business or not really disrupting The I guess like the American worker. Can you unpack it a little bit and take me through how you see AI? changing the way we design and manufacture things in America? So, a little bit of a complex perspective, I guess. When you look at what LLMs are useful for, generally, people will throw them at generative tasks,

but when you look at what LLMs have been trained on, it's more broadly like the internet. The internet, full of forums and all of this context, and context is key, right? What you do not have in those LLMs is the context of what you need made, the specs of it, and how to actually do it, because, kind of like what I mentioned earlier,

it's tribal knowledge, and by that virtue, it means it wasn't written down anywhere. And even if it was written down, your scan is probably private, it's not just out on the internet, not callable, some sort of private database, interesting. Exactly, and so while LLMs are useful as a technology, you need to put them in a position to aggregate,

contextualize, and then leverage critical information that is not in a LLM that OpenAI might have been able to train on. So I think if you were ever going to see AI actually disrupt manufacturing, you're going to have to have a way to embed it within the workflow and infrastructure of an existing manufacturing facility and make sure that you are able to well integrate it

into the flow of folks who are not super tech savvy. Where are you bullish in terms of AI and manufacturing? I can imagine you've seen those reports that like, oh I emailed a Chinese manufacturer, a European manufacturer, and an American manufacturer, and the Americans and the Europeans didn't even get back to me for a week. That feels like at the very least you could just have a chatbot that takes your order and gives you some data. That specific problem is the problem of quoting. Complex, not really AI but it feels like at the very least you could just have a chatbot that takes your order and gives you some data. That specific problem is the problem of quoting.

Complex, not really AI LLME. People have been doing quoting software for a while. It's really computational geometry intensive, generally pretty complex. And so companies like Paperless Parts or Xometry will help you with this. What we're describing there isn't really like an AI problem It's a like work culture problem. Generally like we as Americans work very very hard

Yeah, but the the Chinese have the underdog mentality. Yeah, they've been hungry for 30 years. They've been on the come-up, you know What we're running into is that 1991 was a 1776 moment for China. What specifically in 1901? So basically for 50, 60 years from 1945 to 1991, we were in the Cold War. And so we have this global battle of the West versus communism. But is 91 different than 89, follow the Berlin wall? Why 91? I say 91 generally, either one is just sort of like that marker of when we basically said,

the West is one, global American hegemony has won, we can sort of like rest on our laurels. Very similar to- The beginning of the Clinton era. Yeah, exactly, NAFTA and all that stuff. We basically said, let's pick a couple of nations to offshore our production to, globalism is gonna win, let's pick China, Japan, Korea,

offshore oil production, you know, fund all that infrastructure and then you know, just trust they'll have our best interest in mind. Very much like this industrial colonialism like our own version of it. So if you look at historically, you know, you have the global power, do that set of colonies, and then get very, you know, comfortable and think, you know, it's the end of history. We've won What's happening with China is exactly what happened in 1776 now where we you know have basically seen China say, you know what?

You know Japan and Korea you want to play with the US fine, you know, just like Australia and Canada You know pay ties to the vassal state or to the to the mothership fine, right? But China is now saying you know what we're not gonna play ball. We are gonna go, you know, 1776 We are on the come-up So there's that underdog mentality of one generation two generations of 30 years of that baked into the culture of the Chinese manufacturer That's what we're fighting against not talk about Do you think there's enough conversation at Hill and Valley around just labor in general? Because I imagine part of your thinking is like, who's going to be using my product in

20 years? Right? That's a big question. And it's one that's interesting because it actually does feel like there's less direct ways for private companies to develop the next labor force for manufacturing. It's like, yeah, individual companies can train people. You can try to poach people from legacy firms, but it does feel like an area that the government

can have a tremendous impact. Are you hearing conversation so far throughout the event on that, or should? Certainly a little bit, but I would like to see more. A lot of technology brings the top up, and so you see this distribution of technology at manufacturing companies, this has always been the case.

So the companies with the most money, all the enterprises, the Lockheed's, the Toyotas, the Fords, all the big guys can just dump money on the fanciest, shmanciest AI LM stuff. But the key to saving the American industrial base isn't just making the top most wealthy companies have more and more advanced technologies and having like a 99%-1% split of that distribution technology. It's bringing the bottom up.

And so when you talk about the labor base, what I'm starting to hear folks get is, this is something that I deeply agree with, we don't want cheap labor. We don't want bug man cheap labor. We want smart labor. And so that's why tools like us, tools like a bunch of other things out there are geared towards saying, hey, we are not just going to radically improve quality of life for the modern manufacturer. We're going to build something that makes people want to go into this job because of

how cool and modern it is. People love building software engineers, love building tools for other software engineers. And there's this flywheel effect and positively reinforcing feedback loop of cool tool, cool tool, cool tool. When you start doing that for production, you end up having younger folks saying, that looks super cool, SpaceX has all these cool tools,

that sounds awesome, let me go work in that facility. And so government. Yeah, SpaceX is an interesting example, because didn't their warehouse management system spin out as its independent company or something? No, not exactly. It is, people have, it is very, very common for somebody to work in this 1,000 plus

software engineering org. They have this internal software they call Warp Speed. Warp Speed, Warp Drive. It is fairly sophisticated, and you'll often have somebody who was at SpaceX fairly early on that team say like I'm gonna do this and productionize it And then they like it's been like yeah, yeah, there's been a couple of this They're fine, but you know yeah anyway, Jordy any other questions now. There's been great to this conference. Thank you so man I'm by if Aaron's out there you want to send him in I think I just saw him. Okay, great

Yeah, yeah grab him because I think he was hanging out for a little bit and we got to bring him on we got four more People maybe five more people on the guest list Ben is sweating. He needs a bathroom break. Should we take five? Can we go to can we go to a break? We are gonna take a five minute break folks. Thank you for watching I'm gonna break back in five minutes. Have a good one. We're live. We just took a quick break, got another coffee. We are in the capital of America today. This room is the capital of the capital today. That's right. Today. That's right. It's the center of the American universe. And we're here with Aaron. Been on the show before. Great to have you in person. The camera was a little shakier last time. So yeah

You're walking around your factory for camera a little bit as we walk around the floor to simulate what it's like to be in the trenches Yeah, there we go But everyone's familiar big moment big moment for you. You've been banging the reindustrialized drum for years And it's the theme of the entire Event why don't we start with your reaction to Jensen's? It's the theme today. It's the theme of the entire event. Why don't we start with your reaction to Jensen's speech earlier on high level AI, but then AI factories and how you're thinking about that. I mean, it's amazing, right?

He's obviously holding the mic. Do a little holding. Yeah, just as close as possible. Okay. There we go. No a little holding. All right, how's that? Yeah, just as close as possible. Okay. There we go. No, it's amazing, right? You have the most powerful man in AI sitting up there talking about bringing American manufacturing back, right?

And the role of AI converting electricity to now tokens for everything. It's a really phenomenal way to wrap the story, I think. now tokens for everything. for manufacturing, break that down. So, all right, yeah. When people get a chance to go through the transcript, watch him talk or whatever, right? There are key things that he kinda mentions that you can pick up on, right?

We can do this stuff in anything that has to do with text and images today, right? You might not wanna diagnose a disease because there's no room for error there. Manufacturing and all of his talking about getting to physics faster. This is kinda like how we do these things eventually. It's a matter of computing accurate real-time physics

for something, not just a bottle falling, but if I'm trying to design a mold for mass production, I need that thing to be five micron tolerant or better. And right now, there's no way to do that with current architectures and models and stuff like that. This is why, not blackpilled on it, but like the horizon is longer. Yeah.

So a lot of work to do. Can you talk a little bit about some of the work you're doing with reindustrialize? Yeah, so last year, you know, incredible show of force from this community, right? It grew from like, wait, was last year the first year? Yeah. It grew from like an idea to like a massive, massive conference.

What, give me the stats. So last year we had about like 4,000 RSVPs and like 800 attended. Wow, that's a lot. Yeah, I mean, it snowballed from like I wrote that techno industrial man manifesto I threw together like two and a half months. Yeah, and It was crazy. It just all came together magically, but you know it was obviously so going back to Detroit For this one yeah, DC. Yeah, so We're gonna be back in Detroit

We have an amazing benefactor who, you know, was pretty impressed, I guess, by the first one. That's great. And they're giving us a brand new skyscraper that they just built. There it has a beautiful... I'd hit the size gong for that. Beautiful, beautiful convention center attached to it. And yeah, it's gonna be wild.

It'll be very, very high quality. More than 800 this time? What does it take to get off the guest list then? That's hard. Just DM me. Okay, yeah, yeah, yeah. But yeah, it'll probably be around the same. And is it a similar Hill and Valley mix,

founders, politicians, or are there other folks? Is this a place where someone could go and just find a job or talent, everything in between? This is like a, it's a good champagne problem to have because you want all these different facets from everywhere to be there, but at the same time, I think ultimately what we're going to struggle with and need to refine over the years when we do this is,

we want high quality decision makers there, right? Because the whole community has to move forward somehow. So that might just be day one eventually. And then day two, we can kind of go into like startups and like, you know, maybe a trade show kind of thing like that. So there's, you know, it's all in motion, but we'll take all the feedback.

When is it, how can people learn more? Give us the plug. Is there a TBPN coupon code yet? If not, can we get one set up? Yes, we will have a TBPN coupon code yet? If not, can we get one set up? Yes, we will have a TBPN coupon Thank you I want to kick back on every sale it happened. Golfstream 50, Golfstream 50 will be yeah. Yeah, just send the jet. That's all Yeah, July 16th

July 16th in Detroit. Yeah, we're super excited for Reindustrialize. Yeah, we'll be out there Yeah, how where where do you think? industrialize. Yeah, we'll be on. Yeah, how where where do you think? Where do you what do you think people are missing this week around re industrialize when you look at kind of like the guest lineup and everything like that? Are there areas we were talking to Phil, one area that I kind of identified as something that doesn't feel like it's a huge part of the conversation is labor, right? It's like who's going to even if we're building

automated factories, we still you to up-skill just due to how many people within manufacturing are retiring. Education technology's always been hard. No, it's insane, right, because in Jensen's talk, he was talking about trades, like elevating trades. If we want to be able to accelerate these things faster just because the gap has grown so large and we don't have time, we don't have another 20 years to accelerate these things faster, they've taken people, you know, forklift operator

and pretty soon he's like just CNC-ing stuff. It's cool. So yeah, how can you, can you break down? I'll give you an example. I saw somebody take, they were working on their irrigation in their backyard, seemingly the very complicated system that like one person had kind of designed a long time ago.

They were able to take a picture of it, plug it into Grok or 4.0, and the model was able to spit out like a completely on-point analysis of the situation. Aaron's about to put you in the truth zone. He thinks it's impossible. And so is that, you know, clearly for a simple consumer application, it works. Are we going to see that in manufacturing in the same way where an individual might not have that, you're talking about ingraining tribal manufacturing knowledge into AI, how bullish are you on that, or what's the timeline?

So again, just go back to the mental model of like, how much precision and accuracy do you need to accomplish the end task, right? So like in manufacturing, there's some room for error depending on the process. So ultimately, I'm super bullish on this, but factories have to be rebuilt, literally from the ground up with a software nervous system.

And AI will play a huge part, not in just the SG&A kind of stuff, doing invoicing or whatever, get rid of that. The actual skill encoding is the thing that becomes this weird, physics-driven, deterministic model. If you need to engineer something, that's a really out of distribution problem.

You need to understand the physics behind it. I mean, does a tradesperson? No, but they sit there and do it for 20 years. They've done it 10,000 times. So like their brain is a physics simulator. So it's just like, how close are we getting there? You know, with like each task as it gets more and more refined and like accurate, I think.

Yeah, fantastic. Well, we'll let you get back to it. Thanks so much for stopping by. Thank you. Very excited for Reindustrial industrialize and yeah, good. Good work on being ahead of a massive wave for sure. Sure. Awesome. Well, we have some pretty coming on from Navier.

Would you mind grabbing her? Have you were talking about time roboticist. She was formerly at NASA. Okay. And she also was working on sub-critical nuclear reactors at Fermilab. And fun fact, I filmed a two-person podcast with Jason Carmen, where Jason Carmen

was on one of your boats. Welcome. Sit down, sit down. Welcome. Here you go. Great to have you. I'd love to start with you. I was just reading off your bio, absolutely cracked.

MIT, mechanical engineering, PhD. You're screwed in so you can be as close as possible. Yeah, and you can grab the microphone. It's a little bit heavy, but you can hold it. Okay. Great to have you on. Yeah, this will be fantastic. How's your Hill and Valley been so far?

It's been great. It's really incredible people. Is this the first one? This is my first one, yeah. Are you hoping to be a beneficiary of all the momentum around shipbuilding broadly, or is this more just about meeting folks in Silicon Valley and the Hill as well?

I think this is an incredible time to build hard things. I mean, something that I feel like for years people were holding back, and suddenly you see the momentum everywhere and you feel it here. Yeah. Yeah. I've done an incredible job. I don't think I've, you know, been in any conference where you're seeing builders, policymakers, everyone coming together and just saying, let's build, let's do it now.

And it's, it's awesome to see that energy. Speaking of building what, uh, can you describe exactly what you're building? What design trade-offs you made that put your product, uh, standing out from the pack? Right. So, you know, the, the foundation behind building Navier is, um, building next generation maritime vessels. And, you know, when we are thinking of next generation marine vessels, you have

to think about like, you know, why, thinking of next generation marine vessels you have to think about like you know why why suddenly now right so america is number 11 in maritime and you know very small number of vessels china's putting out putting out thousands of them so the goal is just not to think about okay how do we outnumber china to really win you have to out-innovate China. So that means, when you think of building marine vessels, what does out-innovating mean? Means that how do you build vessels that are just not a little bit better, but a step function better? What that means is not just automation, software,

and all that, how do you reduce per unit mile, per unit payload cost of moving things on water? The world moves, the whole world, right? Per unit payload cost of moving things on water. The world moves, the whole world, right? It moves on the terms of, you know, what is the cost and speed at which goods and people move. If you tap into that economy, if you tap into that problem, suddenly you're controlling how the world economy moves. That's a trillion dollar market.

And functionally in terms of the actual design of the vehicle, is it a hydrofoil that makes you stand out? It's an electric hydrofoil. Yes. Yes. So unpack that a little bit. The one that is out in the market is electric. We build more than just electric.

So yeah, what were some of the design trade-offs? What are the specs and how do you pitch that to the eventual customer? Who is the customer? Well, so the focus, as I say, is to build a maritime company. When I started this company, we were in the Scoville, actually, right?

And, you know, no VC was interested in maritime, and there was no excitement around it. I'm just going around and saying, I'm going to build a maritime. And it's like, what? That's not venture backable. And then the first application, when you think about goods and people,

and you're thinking electric, the first application is moving people in coastal cities. I mean, that's a good demonstration of the use case, operational efficiency and cost, right? But this COVID, everybody is like, no one's traveling. Yeah. And no VC would believe that people will ever, ever take a ride and go to work. But people have commuted across the Bay for years.

Yeah, but suddenly during COVID people know that no one, again, remote work is forever. So to do that, but for me, it was important, let's get the tech out, and let's get money to get the tech out. So what we did is that, well, you know what? The first problem we had, water doesn't have a brand. Let's build something that gives that awe-inspiring magic, that emotion, and put it out in the water,

like you feel when you see a rocket. Yeah, yeah, yeah. So that's why we started with like this super cool, sexy, high deck Navier 30 and 30 Pioneer edition. And the initial customers who backed us are like, you know, tech entrepreneurs and whatnot. I mean, they bought recreational boat buyers bought these boats. Then we also had like, you know, hospitality and so on.

But now we have, you know, the recreation part is a small segment. Our major customers are defense and control. So we work with our control systems, our technologies with US Navy vessels right now. How does the DoD think about maritime fuel sources long term, are EVs a part of how they're thinking or is it more traditional fuel sources long-term, are EVs a part of like how they're thinking or is it more traditional sort of fuel sources? It all depends on your use case right? So EV when you make it all electric boat it has certain use

cases so some of when you're thinking of low heat signature, that in kind of like noise and there are certain applications where you're looking at electric, all electric application. But you know the other ones where you're looking at electric, all electric application. But you know the other ones that you're really looking I mean what is the pros of a hydrofoiling boat right? Forget electric or a gas like compared to a conventional piling hull you're taking out the hydrodynamic drag as a result you're getting like three times longer the range. When you're thinking of long-range, they will platform so will platform, so you're putting a payload

that you don't want to be like, you know, bouncing around. You want a steady platform, so so far you would need like large platform, gimbals and whatnot, right? So that's for payload, but also for crew, because crew, you know, CTB, crew transfer vessels, people can get injured when you're always slamming against them. Yeah, makes sense.

That kind of... Last question, or should we move on to Jared? I know he's waiting out there. No, I'm just curious how, like, talk about the rea... you know, what it's like being in Washington, you know, today versus even a couple years ago. I imagine the response has just been completely different in so many ways. It feels like, ocean is becoming, I think in a year it'll be overheated.

Right now it seems like it's getting the right amount of investment. It's 70% of the world and I hope there are more and more maritime company we need to build. It's a huge economy. All of this talks about jobs getting taken over and we want jobs and I'm thinking wow, we are going to unlock a whole new kind of economic opportunity.

I mean there will be so much jobs, so many things that will spin out and the secondary effects of it. That to me is exciting. I mean there's a whole industrial revolution that will happen around maritime and I think it's awesome to be a part of it. Amazing. Amazing. Well thank you so much for coming on the show. Yeah. Thank you. We have to record a stream from the boat.

Yeah. Jason already filmed on one. It was extremely cinematic. Yeah we can be nice and stable. Yeah. No he actually was really stable. He was on the phone and we recorded the whole thing. It was amazing. We did 20 degrees cranking turn and the champagne doesn't spill. That's amazing. If you if you don't mind can you grab Jared he's out there in the in the suit with the Marlboro pin I think but yes fantastic Jared welcome to the stream. Look at that normally in a racing jacket but look fantastic dressed up first time since last Hill and Valley or you throw on the suit every once a while? I wore a tux at the inauguration. Okay that's about it that's great. Well what's top of mind for

you? I want to hear about stable coins I want to hear about the stuff that's less about re-industrialization of manufacturing maybe more on the crypto side. What is what's the most interesting to you today? Yeah, so the crypto industry obviously showed out extremely heavy for, extremely heavy for the, You can hold it. For the incoming, yeah, the current administration. So effectively there,

Crypto ball, and like, 250 million dollars donated. Lots of crazy stuff, but also lots of reasonable stuff. Yep, so since then we effectively have a few pieces of legislation that is going to be delivered. Yeah, so there's currently two stable coin bills one in the Congress and one in the Senate one in the house one in the Senate Yep, one is called stable. That's the one in the house. Okay, and Genius is the one in the Senate. So the main difference between the two

Yes appears to be the treatment of non US issuers. Okay. Now there's only one Significant non-us is that finance tether It's Tether. Tether, okay. So Tether has roughly, God, I'm going to book sure the number, it's over 150 billion issued. Circle is number two. Isn't it the most profitable on a per employee basis? Something like that?

Yeah, I mean, I don't know how many people work on the Medallion Fund at Rentek, but it's not that. This has got to be it. They claim they've made over $20 billion in profit over the past two years. It's an absolute monster of a company. It's crazy that monster of a company.

It's crazy that you can make, I mean, Medallion Fund makes sense because they're doing such complex stuff, but stable coins seem simple to me. I don't know. Maybe I'm underselling them. I need to talk to the founder. Look, if you're someone in a country like Nigeria, you have double digit inflation rates. Your country desperately does not want you to be able to access US capital markets or even like, you know, things to hedge against inflation.

You want dollars. And so the demand for dollars has been so strong that, you know, things to hedge against inflation, you want dollars. And so the demand for dollars has been so strong that, you know, people all over the world go through a bunch of extremely complicated UI processes. You know, they use random blockchains. Who will use a bunch of these swapping functions? Who would possibly do this?

Not an American consumer. Well, it doesn't matter. And it's like most stable coins from Tether are issued on a blockchain called Tron. Those people here have probably never heard of Tron. So it's a very international user base the pull of the market You know, we talked about product market fit product market fit of stable coins is so insane And the fact that there's a debate between you know The sections of the house on should we write legislation that potentially kneecaps?

The other the one group that is doing the most to export the dollar abroad. I think is extremely interesting Yes, interesting and this is on the heels heels of Circles trying to IPO right now. We saw that prospectus. So compared to the $20 billion profit over the past few years, I believe the EBIT on Circles' $62 billion issuance was like $258 million. People did not like the S1. It was not.

It just felt like they were leaning along on the table. Their distribution costs are high due to the Coinbase relationship, I think. But yeah, that makes sense. It's like the T-bill is arguably America's greatest export, right? If you count the T-bill into trade deficits, it would be a much very generalized way of looking at it. Different story at that point. But yeah I think your point on hey we're you know Tether, regardless of your opinion of them, is exporting the dollar and getting more people on ramp to the dollar which does have some

benefits. Yeah so we'll see who ends up winning out in the reconciliation progress. I think enough people are gonna recognize that Tether's probably doing that good for the US. True, sure. Mike Genius will probably win out a little bit overstable, but I mean, it's still the early days. We'll see. Who on the Hill are the biggest proponents of crypto? Who are the names that crypto founders need to be following? Who's that guy? Who's the one politician with the laser eyes?

Is that based Mike Lee? Yeah, yeah. Mike... That's his account, I think. Yeah, no, based Mike Lee is Yeah, yeah. That's his account, I think. Yeah, no. Based Mike Lee. But he goes by online. Extremely based.

Ted Cruz was one of the first guys to understand how Bitcoin mining can actually help secure energy grids. Sure. He was extremely early to that. Of course, Gillenbrand alumnus in the house, French Hill, the chair of the financial services committee. These are all people you need to pay attention to.

And then there's a whole crop of new freshmen, congressmen and senators. Richie Torres is extremely on the money, and he's not even on the right. So this is very much a bipartisan issue. Almost every single person has brought up Richie Torres. Yeah, yeah, lots of people. Lots of people like him.

That's great. Have you been spending a lot of time in Washington the last few months? I've been spending a little bit of time in Washington Look so much money was given by so many different groups in crypto that there are a lot of us on the ground So the people actually writing the language working with the White House that is extremely Saturated where I have been spending a bit of my time is I'll meet with junior staffers You know, I don't have any face to lose. So I'm happy to sit down with you know, the lowest of the low

Everyone's actually really fantastic. But no I'll go I'll go and I'll make sure that everyone around a certain elected official Knows at least what what are the the range of opinions that they probably have? I'm not gonna say hey, you should think this but it's you know, these are the arguments for one thing These are the arguments against it is the crypto industry and somewhat of a what was the example you gave? With with tech it's like the dog that caught the car. Yeah, is that is that is that a good analogy here? That's the very negative take on on tax relationship with DC right now Is that like tech kind of came in, you know made a lot of connections, but now doesn't really know what to do Yeah, look

I think you're seeing a lot of headlines saying things like Coinbase is trying to tank the stablecoin regulation to forge the market structure bill. I think it's of course gonna be more nuanced than that. I think that there are groups that say, hey, we've won huge, we want to be able to go really hard, let's get everything we asked for, and then there's others that want incremental wins. I will say that Sachs and Bo Hines, who is kind of his deputy helping run many of the crypto operations of the White House They're incredible like Sachs was a direct crypto investor He was an LP in a bunch of crypto funds founders that know him love him and Bo Heinz

Not a lot of people knew him from before but I mean he like in law school He wrote I believe you know one of his theses on crypto regulation and he he was a big investor He worked with a lot of companies so So they're really on the money. And yes, maybe the dog caught the car, caught its own tail, but I'm actually extremely optimistic. And then, you know, out of treasury, Basant and Commerce, Lutnik, you know,

both these guys are extremely pro Bitcoin, pro crypto. So yeah. What are you seeing in terms of US based crypto or sort of crypto companies generally feeling more comfortable coming back to America? Are we seeing that now? Are we seeing more offices being spun up? Or is it a little bit more like, well, we already did the work to set up infrastructure internationally. We want to wait to see how this stuff plays out. Yeah, there's a few things. So the first is if companies don't come back, the founders are starting to.

There was a class founders that wouldn't step foot in the US yeah it's like Paulo the CEO of tether yeah he literally would not come to the US because he didn't know like yeah maybe he just get seized at the airport yeah so the fact that one they're coming back they're being public about it and they're showing their face they're meeting with people that's big other things that like you might not think of crypto conferences companies would be scared to sponsor US based crypto conferences wow wow because they scared to sponsor US-based crypto conferences. Because they're like, oh, if we sponsor this conference in New York, maybe we'll get the

attention of the wrong regulator. That's over if you talk to the conference organizers, they'll be like, okay, no, our business is back better than ever. So I think the next stage is offices open up, headquarters open up, and the market structure bill that hopefully will come later this year will be a real catalyst for that. And the other thing that's really important is a lot of trading activity has moved to the international offerings of these exchanges. When you look at spot volume, which is just,

if I buy a Bitcoin directly versus perpetual futures volumes, which are derivative products, the majority of crypto trading volume is all in perps. And perps are not really clear if they're legal in the US. There's some guidance that will hopefully come from the CFTC, they just did a request for information a few days ago, earlier this month. CoinBase has said that they plan to offer futures contracts

with a settlement date very far in the future. So you could theoretically do like a hundred year future contract, and live rebalances, and it fills the role of the perps with that new regulation. It's illegal for futures contracts not to have settlement dates in the US. So hopefully that all gets addressed,

and we can move the liquidity back to the US because every US-based crypto hedge fund has to set up offshore accounts to be able to trade their products. Yes. Are you expecting any legislation around real-world assets? I mean, stablecoins in some way are taking a real-world asset, even if it's a number in a database and bringing them on chain,

what do you expect on that front over the next couple years? A lot of people get really excited about real world assets, RWA is, it's a horrible name for something. I mean, RWA is in finance is another thing. But I think that the way that the stable coin bill is written is that if something is directly redeemable

as a receipt, you might be able to issue a tokenized version of it. Yeah. There's some specific language around okay if it's a you know a payment coin or a payment dollar issuer these are the reserve requirements but you can extrapolate that and issue smaller things. Interesting. Most of the time when people talk about real-world assets they they talk about it in the lens of either A we want to bring more liquidity to an asset class or we want to be able to use something as collateral. I am far more interested in something being used as collateral, which in a sense is bringing

liquidity to it. The problem is if I was to tokenize a share of, if we start a company tomorrow, we raise a 10 at 50 round, and I want to tokenize that and say, oh, I want this to trade at 50, there's no buyer for that. Right? Right. You need a buyer of last resort, right? No, and that's the interesting thing. I think the lending aspect is fascinating,

but illiquidity is such a feature of private markets and everybody's realized that at this point, right? You don't want a company to be on chain. They have a bad news cycle, then suddenly it's trading at like 90% less. Yeah, totally. And I think there's some companies that I imagine will get tokenized in some form.

Maybe it's out of trust in Switzerland, or maybe UAE, or maybe even in the US. And the ones to expect are, did you see that Yahoo Finance has secondaries tickers? No. Yeah, they have charts now where they show where secondary transactions are reported to have traded.

We need to add that. We do. Well, this has been fantastic. Thanks so much for stopping by. It are reported to have traded. We need to add that. We do. Well, this has been fantastic. Thanks so much for stopping by. It's great to see you. Come on the show again. Yeah, yeah, we'll have to have you back for a deep dive. Crypto day.

Yeah, we're doing crypto day. Can we bring in Cesar Yunis when we have a second? How are you doing, Christian? Okay, yeah, yeah, yeah. Yeah, let's bring you in next. If you don't mind waiting 10 minutes. Thank you so much for stopping by. I know you have a crazy schedule,

so we really appreciate it. Thanks for coming on. What's going on? Thank you, and congratulations on all the success. First off, would you mind introducing yourself for those who might not be familiar with you? I'm a short man. You can actually hold the mic.

It'll be more comfortable if you do. Whatever works. I'll look at this. Some people are just doing this. Is there pros? Whatever is best for you. I am clearly not. So my name is Kassar Younis.

I'm the co-founder and CEO of a company called Applied Intuition, Lake stage company based in Silicon Valley. Yeah We do vehicle intelligence broadly speaking. Let me explain a little bit of what that is Sometimes people think we only do autonomy But as I was just talking on stage at Hill and Valley like imagine you work on a mine And there's these you know giant dirt movers that move like, you know, their size of a house Yeah, yeah mining operator you go up to it, you know, that machine should be intelligent enough

to understand who you are, what you're trying to do. As you get in, you talk to it, this is teaming concept. So we think about AI is like on, you know, in your screen, but literally on your phone, maybe you talk in chat box. We were the next kind of generation of AI, which is this AI that's all around you, but specifically on moving machines. Cars, trucks, tanks, planes, and that human AI teaming,

that's the company. Can you talk about the path to full autonomy and what AI means in the context of, just I guess vehicles broadly, we've seen teleoperation. Full autonomy, even the right thing to be aiming for when teaming is clearly like you know like the more natural way to collaborate. So within vehicle intelligence broad umbrella there's sub group is autonomy. Within autonomy you can break that up into kind of two

subgroups in itself just for a simplification because you guys are not autonomy engineers right? No. Broadcasters. We won't bust out any any software tests for you. But most of the audience they're they're much better than we are. Okay. Dumb it down for us not them. Exactly exactly. So so instead of talking about like society of automotive engineers like autonomy levels just think about autonomy as is there a person in the driver's seat or not? Sure. Yeah. The Waymo there's nobody in the driver's seat. Yep. In a Tesla there's somebody in the driver's seat or not? Sure. The Waymo, there's nobody in the driver's seat. In a Tesla, there's somebody in the driver's seat. And that rough analogy applies all the way to

tanks, to planes, to drones, whatever. Is there a human sitting there, a human not sitting there? So in the human sitting there, that's the assistance version. And really in the in the warfighter example, that can be one to many machines. It's collaborative autonomy, it's multi-mode. In the, there's no human, in the Waymo example, then it's a pure level four autonomous system and that's the RoboTaxi. Both of those things exist.

So then the question is, well why would you use one versus the other? The Waymo version, broadly speaking, is way more expensive. Tesla is already a functioning business model. You can go buy a production Tesla that has FSD and it works pretty damn well. And it's profitable. Yeah, it's profitable. Waymo hasn't figured that out and it will. And just the nature of the actual machine, it's more expensive, the compute is way more expensive, the sensors are more, the entire operations are more expensive. But what you get is you get

that last 5% of scenarios that Waymo will take care of that the Tesla requires your intervention because I can't do this. And so then you can take that into other domains like let's say construction. To get that last 5% is generally not possible right now because in those domains they're more let's say open

than something like a road. And so then you need a human teaming take for example you're in a fighter jet yeah in a tank and you have to make a lethal decision yeah that's where teaming becomes really totally these are the beauty of a car is a car can just stop it's not like moving something that's playing can't very heavy and could be damaging. How much has your... The answer to the question, autonomy is here. It is here.

And it's just like, a lot of times people ask us like, oh, when is self-driving going to be a thing? It exists. It's just now, it's like mobile phones. When did mobile phones happen? Well, that's a simple question. Between the 80s and 2007 when we had the iPhone moment. Even then, like the iPhone, it's not like the iPhone, everyone got an iPhone.

It was really expensive. It took a long time. Even then the iPhone actually isn't the thing that consumers care about. They care about the Instagram. Yeah, the App Store. They care about Uber. And like if you try to think about like an Instagram, like you can't even think about Instagram on an iPhone. But the first iPhone by the way, no App Store, no front-facing camera. Yeah. You couldn't even, there's no such thing as Instagram. No selfies. So the macro point is, autonomy is the spectrum. So you should think about autonomy as like, it's going to come in drips and it's going

to be, it's unevenly like the old Peter Thiel saying, technology is unevenly distributed. How much has your vision expanded, right? I imagine early on, even in the last few years, I'm assuming that people came out seeing your success being like, we're gonna do applied intuition for XYZ. And then you're probably sitting there being like, well applied intuition is applied intuition. But has your vision always been the same? I pity our competitors. We're not a meek company.

We're like street fighters. How long have you been doing this? Don't let the suit... I come from Detroit. You're a brawler. Eight years. Overnight success. I'm assuming your vision always was massive, but now seeing the technological advancement,

are you discovering new markets every month? Yeah, I think the core hypothesis that we had, the core quantum of idea that we had was, we saw Tesla emerging, this is 2016, 2017, and it was like, oh, the car is gonna be a software thing. And we just don't know what that means, but we ultimately want to participate in that. So I grew up in Detroit, my co-founder grew up in Detroit.

We're a family of automotive folks. My parents in factories, his parents as engineers. I went to the General Motors Institute. So we saw, I worked in factories for a bunch of years. And so you just see the car business, and you're like, this business is going to change. I think that was the very vague, rough idea. And then the product strategy over eight years

has been, let's build all these products to make cars more intelligent. We got into defense about a year after we started, so now it's seven years. Oh, OK, so early. It's not random. General Dynamics and General Motors, their technical headquarters are like five minutes from each other. That's not random, like General Dynamics and General Motors, their technical headquarters are like,

you know, five minutes from each other. That's not random. You were dual use from almost early. How worried do you get for founders that are here that aren't dual use, given your experience working with the government? I'm just trying to eat. I don't know about their businesses, man.

Yeah, yeah, yeah. No, no, but I'm really Yeah, yeah, yeah. Good luck. But I imagine if you had started out and you were just doing defense and you was autonomy and it was whatever, eight years ago, you may not have made it. Yeah, we're doing just automotive. I think there's our company values, these values that run the company, but they can all be reduced to two words, radical pragmatism. Automotive specifically and defense are anti-cyclical. So it helps, that's not random. So I think it's positive.

I think just for us the problem space in a car and a tank are actually surprisingly similar. They're both human operated, they both are large machines that are electromechanical and then now are becoming more software. I think if I'm a defense only company I think it's I think it might be easier to be a commercial company to come in defense than a defense company got to commercial Sure, the main reason is in the commercial ecosystem. You got to fight

the globe you Everybody and it's not about I know the DOD procurement methodology and therefore I get a big contract It's like I have to have the best product as we price the cheapest that it can be bought Globally. Yeah, because otherwise I'm not gonna I'm not gonna win. I think for us the transition into defense Being from Michigan. I mean take home, you know, the the tank and automotive the where they build tanks Yeah, the Detroit Arsenal. Yeah, literally a mile from where I grew up. General Dynamics, three, four miles. I mean, Detroit is a defense ecosystem. It's the building of this stuff.

So you're clearly much more focused on existing form factors, right? Cars, tanks, things like that. Drones. Drones. When, I'm sure you've been approached by humanoid robotic companies. Yeah, we have.

Look at this, this guy. Are you a plant by one of our investors? No, I just said. Who is it, one of our investors? No, I just... Who is it, Josh Wolf or who is it? No, but I'm curious to hear about how you're thinking about these new form factors. We don't know at all how they're going to play out. So we have been approached by, I would say, by three humanoid companies now who said, hey, can we use the tooling, Can we use some of the technology?

I think for us, we like to enter markets where there's a bit stability and maturity, because you don't want to build a bespoke thing for company A, and then it's, you know, it's a bespoke company B. We're a product company. We're going to serve as a company. Humanoids will get to that.

The macro thing that you're tugging on is actually this abstraction from hardware software. There is a company actually that's like applied in the past, which is Microsoft. Microsoft started as a tooling company, then got into operating systems, then it got into applications. But they did it all on the PC in the 80s.

We're doing it on the vehicles in the 2020s, but it's the same thing. You're abstracting away from the hardware that exists in a car or whatever, truck, commercial truck. The humanoid is similar. There's a hardware software bifurcation that's gonna happen. And there's other things that happen.

How do you balance that wanting to be a part of the sort of evolution of these new form factors but not over invest too early? It's like that's the challenge, right? That's a billion dollar question. I think I think most companies that we have mark and reasons are our first investor and our larger shareholder and he's our sole official board member so so marks have been with the company a long time and mark has this great line which is companies are almost always too early yeah and that's super counter

intuitive because you always think don't be late, don't be late. Actually the mantra everyone should be saying is don't be early. Don't be too early. Don't be early. And so I think that I say like right now is the best time to get into self-driving. Interesting. Interesting. Yeah. Because all the technology is kind of figured out. So now you're going to enter against a Waymo or against a Tesla with none of the cost of the 15 years and you have to take all of these engineers who are at cruise and Argo and Waymo and a Tesla and you recruit them and you build some drugs.

Zooks and cruise, there's so many different parts. All the tribal knowledge of what works, what doesn't work and they get to work with you. Yeah, and the tribal knowledge, it's like actual hard tech. And so they now know, it's like building the first web application in the mid-90s, that's a miracle. Today, junior high kids build web apps

as a part of their class project. Autonomy is going to be the same way, human and robots are going to be the same way, is just the time factor we're in. So if you're trying to monetize, that's the business we're in, that's what commercial world is, private business, you have to find where's that meniscus line,

and as soon as something becomes mature enough, because you also can't be too late. If you're too late, then there's a bunch of players in the ecosystem. Actually, you know, you talk about defense tech. My actual fear for a young defense tech company isn't can you make it a commercial? I think you can build a very viable,

vibrant defense-only company. It's just there's a lot of defense only companies now. And suddenly the pricing pressure goes down because you're the fourth company that's doing the same thing. I can't wait for the next season of BattleBots. I'm sure kids will be building all sorts of crazy autonomous solutions because there's so many open source packages that they can piece together.

Were you surprised by the way that the new spending bill allowed for like $500 million of autonomous systems. A lot of people said that felt low. But we had Sean McGuire on the show earlier and he was like, well, it's not low if that's the starting point and we go up from there, which is what people imagine. Yeah, I don't generally use dollars as a proxy for importance. The DeepSeek outcome is a very clear example that you can do a lot with limited resources. I think the more important

message broadly speaking is autonomy is where AI meets the warfighter. I keep saying that again and again, trademark copyright. But the point being is like, it's the thing, the teaming aspect of the war fighter with the machine, that's the future. How we get there, that's all details. But we all have to agree that that's what we got to get to. If we agree to it, then we can figure out the, you know,

reconciliation, this specific bit. Well, all that'll get shaken up. I don't think enough people still agree that that of that vision of the future it really does feel like of the other there's probably 20 other line items that where autonomy will be stuffed in but it won't be headline autonomy spent yeah yeah so yeah and I think like you know even applied yeah for our company we don't cast ourselves as an autonomy company we cast ourselves as an intelligence company sure sure sure a vehicle intelligence company. Sure, sure, sure. Vehicle intelligence company, right? And so why do we do that?

Autonomy is a component. It's a component. Yeah, of course. It's kind of like saying, is the government funding enough engines? It's like, well, the car business that we're really talking about. The engine is a very important aspect of the car.

But you're funding, actually, the larger industry. Well, thanks so much for stopping by. We'll let you guys know the next thing. I know you got to run. This is a lot of fun. We'd love to have you back for a much deeper dive on the company. This was great. We'll reach out. Cheers. We'll talk to you soon. Bring in our next guest. Welcome to the TVP and livestream. How are you doing? How is your, how is your Hill and Valley experience been? Hey what's going Hey, what's going on? Hey, what's going on? Welcome to the show. Nice to meet you. John, pleasure.

Would you mind introducing yourself for the stream, for the viewers who are watching? Justin Fischer-Wolfe, one of the founders of 137 Ventures. Fantastic. How would you describe your fund, what you do for anyone at home? So, I mean, we started the business back in 2011. I used to be a founder's fund.

Yep. Left when we sort of had this belief I used to be a founders fund. Yep. Left when we sort of had this belief that companies were going to stay private longer. Yep. And that if that happened, you know, founders, executives, all the early employees, we're going to end up wanting some liquidity. Yeah. Because, you know, your life is different when you're 35, when you're 25. Yep. Yep.

When you're 45, like, people's needs change. Yep. And so we kind of built the business on that premise and we've continued to expand. Once you've got great relationships with the founders, you can do some primary investing, help people run tender processes for all the employees and kind of where we built it.

Hot take is a... It's finance with a deep understanding of venture and the founder. Absolutely, right? I mean, venture's finance. I mean, I'm not sure all the venture people necessarily. But it's not, it's sort of, it's a different product in the sense of like, okay, we're gonna give this

entrepreneur money, set and forget, you know, kind of bet on them versus like running like a firm and like built like it's financial services at the end of the day in some way. I think you're right. Like we're trying to build long-term relationships with people, right? Like we are early investors in SpaceX and like we've continued to build long-term relationships with people right like we are early investors in

SpaceX and like we've continued to invest with them for the last 15 years right I mean We've done something similar with and roll right like we're just we're trying to build long-term relationships with great companies and Continue to invest in whatever way we can yeah, so Bit of a hot take is is the Lina Khan effect on M&A markets good for your firm because it leads to companies staying private longer because they don't get acquired? I think, well, so I think there's this misperception that US government policy is the thing that drives the M&A markets.

It definitely is part of it, but like, go back to the- It was a good excuse for the last few years. But like, that wasn't what blocked the Figma deal, right? That was the Europeans, right? So like, just because America's like, great, anyone can buy anything. The companies that are buying other companies are global, and they're regulated globally.

And so just solving it in the US is not going to actually solve the M&A problem that you're describing. So do I think less M&A is sort of good for us? On the market, sure. I mean, even the ideal market's kind of closed. So, companies staying private ultimately means they end up taking more investment in the private markets.

And I think at some point, the great companies, they mean they get cash flow positive, they don't need primary capital anymore. Yeah, right. So that leads you to these liquidity events, tender events for employees, and like that's how we've scaled over time. Do you buy that idea that like, Elon Musk kind of ran the A-B test with Tesla and SpaceX,

had a great experience with SpaceX, didn't have a really great experience in the public markets as Tesla? I mean, fantastic stock performance, but like headaches. And so the takeaway was, hey, maybe stay private longer. And then other founders kind of learned that lesson as well. Is that reasonable? I mean, I certainly think Elon had a better experience in the private markets than the public markets.

But I mean, personally, I think, I don't want to speak for him, but I get the impression that he really appreciated all of the retail investors who supported him and the company and his vision of where the company could come from. That's actually an incredible thing. There's so many small investors across the country

who believed in the company and then because of that actually made huge sums of money by being an investor. So like I think he actually really does care about those people because they were there for him when in Summer Sex other people weren't. In the private market. In many ways your guys's model is not you're not like oh I'm so annoyed this company that was in our portfolio went public. It's like you win in kind of either situation Yeah, I mean look ultimately I think LPs do need dollars back Really? Yeah

You can't have a system where like all you do is take money from people give it to other people and then like it's worth A lot more but no one ever gets any money back like that that system will ultimately break Yeah, but you know, I think if you're right about the companies and you're compounding over a long period of time Like that's that's ultimately the goal. So you get a little more leeway when that happens. Yeah, yeah. Do you have a take on the new permanent capital vehicle that Thrive put together? It's kind of an interesting story

that we haven't seen a lot of VCs do that, but obviously Warren Buffett's famous for it. There's a lot of other folks that have built these holding companies. We've seen more just different strategies in venture, I would say. You have continuation vehicles, you have growth stage, almost private equity type deals happening. What is exciting about the new era of VC in 2025? We've looked at some of these permanent capital vehicles. I think they're interesting. I think

they solve certain problems. I think they create other problems. Going back to liquidity point, it's permanent capital. It makes it hard to get the money out. But they do solve certain issues and I think it's really nice as an investor to be able to take a really long-term view on things and not get caught up in the market cycles. The trick is like just, even your conversation about applied intuition, it's like if you can just be in this company for a really long period of time, who cares what multiples are today? I care whether or not the fundamentals of the business,

100X over the next 10 years, who cares? Even the multiples are terrible then, it won't matter. Right, so that's the key. It does seem like there's a shift. I don't know who came up with the idea of a 10 year life cycle for a fund. It seems arbitrary, it seems like they were just like, make it double digits, make it a nice round number. But now it does feel like VCs are

starting to think, oh, well, like there's extension periods, there's continuation vehicles. Maybe we should be thinking in 20 year cycles, 25. Look, it turns out everything is historical and structural. The reason it was 10 years is that the, so you go back to like when we started the business in 2011, right? The first company that really kind of stayed private for a really long time was like Facebook. Yeah. Like that was sort of the, that was sort of the-

That wasn't even that long. It wasn't, but like- Yeah, it wasn't the time. But back then, right, the average time to- But you look at like Sequoia with Google and like these companies went public so fast. Time to liquidity was like, you know, I think probably four or five years back then.

When we started 137 and 11, it was like six or seven years. It's now like 12 or 13 at this point. So people pick 10 because they couldn't conceptualize the company would still be private 10. And they like doubled it and rounded it up. And so now what's happening is like, No way this company is going to be private 10 years. This is super safe.

Exactly. And then, and that obviously, that broke the system. How early do you try to identify these companies? Because once you have a generational company in the portfolio and you plan to help support all the shareholders over numerous years, it doesn't matter exactly when you get in. But I'm assuming that other now even growth stage investors are looking for you guys for Signal in some way or another to kind of

just give in the track record of 137. And for us, I think we're looking at companies that are kind of post-product market fit and that are scaling the business. And the thing that's sort of changed, if you look at the last 20 years or so, is that there's really no cap, right? It used to be that a billion dollar company

was like an incredibly huge outcome, and honestly, there's hundreds of those companies in the private markets now. And so for us, it's really just this question about can the investment hit our cost of capital? And if you have an opportunity to invest, even take SpaceX at 350, it's like, if you can believe that's a trillion dollar company,

that can still be a great investment. Sure, it's a big number or whatever, but it doesn't really matter where you are, it matters where you're going. And that's, I think, the thing that is different in the private markets, or really even look at the public markets. I mean, look at the valuations on Nvidia.

I mean, that's an incredible growth story in the public markets. Yeah, you don't see that at that scale usually but I mean look at Google look at Apple right I mean like yeah look at all of the all of the tech companies like it's yeah it the opportunity is much bigger than people imagined yeah that's true any other questions? No this is fantastic. We'll let you get out of here. Thank you so much for starting the night. We're happy to help help make this thing possible yeah you guys have done quite the job this year I hope I hope you make it back next year oh absolutely back perfect thank you this is great cheers thanks so much let's let's get Ryan Peterson in yeah well yeah we have

a zellerfeld we I think we should bring in Cornelius really quickly do five minutes we need to go into lightning round folks we got a bunch of people yeah what's up yeah yeah lightning round Cornelelius we gotta talk about let's let's talk about the chain real quick and the fit because it is one of every time I see him he's dressed fantastically here pull pull this this is happening Zellerfeld thanks yeah obviously as I'm from Jennifer you can put your shoes on the desk if you want if you want to put it up for the audience and since you are in the shoe business there we go there we go right on the desk look you want, if you want to put it up for the audience since you are in the shoe business. There we go. There we go. Right on the desk. Look at this. Made it. 3D printed

shoes. Yes. In the US. So far we have done most of our production in Hamburg, Germany. So that's where we started. But obviously a huge part of our market right now is US. So we are just bringing that back. We had 200 printers in Hamburg, Germany, and now we are bringing 2,000 printers here to the US, printing millions of pairs a year. Amazing. Insane. Insane.

Where is the demand coming from outside of the tech community? It's mostly fashion guys. Yeah, sure. So I don't know if you have seen, but we are printing shoes now for Nike, for Louis Vuitton, for Claire, even like lots of celebrities are wearing our shoes all the time. Drake did a huge cowboy boot with us because he just bought a Texas in Texas, a ranch. He made some cowboy boots. Just naked.

What have you learned from, I mean, we read a story in the Wall Street Journal recently that Nike was having trouble, Nike was having trouble using robotic automation to assemble shoes and meld the upper with the soles because there's so many different sizes. It feels like a unique case for 3D printing but is there any hope to iterate on your product to a point where there are multiple materials? Yes, also multiple colors. I think previous experiments often failed mostly because everybody is trying to make

the same product as before, just assembled by robots kind of. You need to think about it from first principles. A hundred percent. That makes sense. And then you can do even crazier stuff that traditionally wasn't done in performance football. So all of a sudden with 3D printing, every shoe can be custom made.

So when you think of performance, everybody talks about, I don't know, I think Nike's mission statement goes something like, making every athlete's dream come true. But if you think about it, lots of those brands, they have custom-fit shoes for those performance athletes, but what about the kid on the schoolyard that just wants to kick some soccer, for example?

And all of a sudden with 3D printing, you can get those kids the same custom-fitted experience like a pro soccer player. And when you think of not just performance footwear but even anyone I think what will happen is I mean I wear this this is happening cap because printed shoes will be on every foot yes yeah and a big reason is because all of a sudden you can do stuff like I don't know every shoe fits whatever design so right now So talk about the time today,

shoes are made in factories, far away from the end consumer. They get made, they get sent, eventually they get to the consumer, whether it's through retail or online. Talk about kind of like, what is the actual activity, where is the printing gonna happen long term?

Could we get to a point where Nike- It's fully decentralized. Yeah, could Nike in a retail store, could somebody design a shoe and print it in real time? Is that where we're going? Where is the printing going to happen long term? Could we get to a point where Nike... It's fully decentralized. Yeah. Could Nike in a retail store, could somebody design a shoe and print it in real time? Is that where we're going? Yeah. So basically, what's going to happen is you will have farms all over the world, maybe a little bit like Coca-Cola has bottling plants all over the world.

And then what's going to happen is you buy a shoe, for example, on zellerfeld.com, and depending on where the end consumer is, that's where the production job is going to get and then what I fucking love is that people are now buying shoes on zellerfeld.com and like basically like few seconds later the printer starts printing and you can have a custom fitted shoe I don't know two days later yeah and that is completely changing the game and without, you know, usually in footwear you have cycles, production cycles and marketing cycles of 18 months and longer. Yeah. So you need to make the commitment in the factory in Asia 18

months before, but you don't even know how many will sell. So what's great here is that on-demand production basically changes that completely and it can still be as quick as Amazon. Yeah. No, it's such an interesting story just given, you know, we've studied how Nike just struggled to bring back shoe production with one of the most advanced manufacturers in the world. But again, it was because they were just taking the traditional way. Shoes has like 14 parts or something like that. Trying to make it with a robot.

And I think what you're doing with shoes, we can apply to so many other categories in terms of... Thank you for stopping by. We'll let you go back out there. Come back on the show soon. Should we bring in Augustus, Ryan Peterson? Let's do Ryan Peterson because I told, unless Augustus was on the schedule... Augustus, do you have to go or can we do Ryan for five minutes?

Okay, hold on for a minute. We got Ryan, because I think he has another call. We'll bring you in in 10. Man. Sorry. Yeah, yeah, we're still live. Ryan Peterson, welcome back to the show. Third time.

He was treated like cattle. Yes, I know. It's really rough. Sorry about that. We're not A plus in the scheduling. We're iterating, we're learning, but how has your Hill and Valley experience been? How's your time in DC been? That's great.

It's great to be in the Capitol. I haven't been here since January 6th. No, I'm just kidding. Bad joke. But yeah, I mean, you're in a very interesting business. Obviously in the news, everyone has called you. You've done mad money. Wall Street Journal's calling you the most boring business that we need to know about

or something like that. What is top of mind? What are you telling lawmakers that could change or could, you know, improve to like, what does a great outcome here look like in the next couple of years? Well, like what's your stump speech right now? Oh, a couple of years. I'm worried about that a couple of years. You worry about the next couple of weeks.

What's on your mind? I don't think anyone cares what I think. I told them tariffs should come way down. Okay. Yeah. Yeah, yeah, I mean, once we get to the case, you worry about the next couple weeks. What's on your mind? I don't think anyone cares what I think. I told them tariffs should come way down. Okay, yeah, yeah. What we've seen in our data is a 60% decline in freight from China to the US. Yeah, can you unpack that?

I heard something about like, the freight rates are actually high because their ships aren't even moving. Is that right? No, rates are pretty reasonably low right now. There's a risk of it going higher. Like, I think it'll be a first class problem. If they undo the tariffs and a lot of volume comes through,

then it goes high. Then you'll see this spike. But if you're willing to pay the tariff, you have a really high margin, you can get stuff out of China right now. Yeah, it's a little bit, so like, so you've had a 60% decline in bookings of ocean freight from China to the US.

That's resulted in a 25% decline of sailings. Ocean carriers pull 25% of the ships, they're not sailing. It's a little bit harder to get service, because ships are getting canceled. It's actually made by export more valuable, because if you're booking directly with an ocean carrier, they might cancel the sailing. We'll find you a different one on a different carrier.

Of course. We'll solve your problems. That's the value. So on some level, some of this helps us a little bit. But I'm very worried for our customers that those are their businesses. 60% decline is a lot of companies just deciding, opting out of the system.

Yeah, and they can't necessarily move to a new manufacturer immediately. What about the small business? They didn't spend enough at the inauguration to get the exemption. Yeah, yeah, yeah. What have you been hearing on the ground in China? It's hard to, 60% reduction in freight coming out of China

is very bad for China, right? Like the sort of, the party can kind of spin that however they want. They have a lot of control over. Very bad for China you're saying. Yeah, yeah, very bad. Very bad for China. And in an economy that was already bad,

in an economy that had extremely high youth unemployment, have you heard anything from the, you know, I, you know, all the different groups that you interact with on that side of the pond? Definitely bad. I mean, it's bad for both parties. You know, you kind of have a game of chicken and there is an outcome where the cars crash and everybody dies. And so you hope somebody swerves and gets solved. I my view of it, I don't have a lot of like inside intel here. It's certainly bad for factories.

I just think China can withstand a lot more pain than America. Just due to the way that it's like the last hundred years of Chinese history. They like they would have a couple percent of GDP decline like oh my god look at the history they've been through. They're ready for the warlord era. Like all these different famines and things that like pain is built into the culture. These are kind of, yeah, this would be a pretty small amount of pain for them to bear. American side were kind of soft. There's a lot more feedback mechanisms here.

Yeah. Trump, I had to say, is like an iron will. Unlike, you know, I don't like any of the policy. I don't like any of the tariff policy. There's other policies, you know, not what we're gonna talk about right now, but I don't like any of the tariff policy. There's other policies, not what we're going to talk about right now, but I don't like anything about the tariff policy, and yet, you've got to have respect for this guy,

who's like, the whole world is, it's everyone against Trump. And he doesn't care. I would have this power. We've heard rumors that there's obviously just been a constant rumor mill, rumors moving the market, trillions of dollars in seconds, but is there any sense of optimism on the ground with the politicians that you've been seeing this week? Let's just say there's a sentiment thatiff with China at 145 is not sustainable.

It's not where they meant to be, not where they want to be. That it will come down. But there needs to be renegotiation around that. Unclear to me what they think the triggers are, so therefore the timeline for when it would come down or what it comes down to. Because on the day of the reciprocal tariffs on April 2nd

when it was announced that China was at 54%. And that was already a shocker. That was the top of the list and the worst. And that's on top of the prior Trump administration with the oil stuff that you mentioned. Venezuela. So now that seems queen. You're like, oh, let's get to 54.

But 54 was also really bad for companies. If we play this out and there does wind up being a reindustrialization, more American manufacturing, maybe it's in automated facilities, what does the future of flexport and logistics look like? Is it more trucks and trains and automated trucking? What are you thinking about in like five, 10 years just to power a more efficient logistic system

in the domestic lower 48? Oh, in the domestic side, yeah. I mean, we acquired Convoy. Sure. So we have a truckload business. We do about 200,000 truckloads a year. Yeah. That is 98% automated.

Really? It's amazing tech. Wow. 98% of the loads, nobody does anything on the inside. Wow, that's insane. 2% need to loads, nobody does anything on the inside. 2% need to have an exception managed. So that is probably going to scale that thing like crazy. But by the way, the truckload business, if the tariffs keep going where they are, that's going to collapse too.

I mean, it's not really a counter. Because yeah, what are you trucking? You're trucking stuff that came off a boat. Yeah, exactly. And not this idea that it's gonna lead to this manufacturing boom is kind of fake. Like, I heard from a senator yesterday that said they have a lot of auto manufacturing

in their state. That all the auto manufacturers have told them that if they don't get an exemption on parts, they're gonna go under. Well, they got an exemption on parts this morning. Or yesterday. So, hopefully these feedback loops are working and we don't just like kill.

I knew that was going to happen because you're like they're not going to let all the auto manufacturers. Yeah. Yeah. Yeah. I mean it's a bad situation. If you have your team in Washington you can get get stuff done and if and if you're you know even if you employ a hundred people you can't it's hard to get your that you're, even if you employ 100 people, you can't, it's hard to get your, that you're still a tiny business in the eyes of everyone else. I mean, we were talking, Sean Frank had an interesting kind of policy recommendation or idea,

which was like, basically take what I would have to pay in tariffs and make me invest it here in the US so I can basically buy some time, don't just come down with a you know just absolute hammer because I can't think I can't set up a factory in Three months even if I wanted to spend you know a billion dollars. Yeah, they announced today that they would do The allow you to expense a hundred percent of capex if you're building a factory This could be really big like first first year, straight line to appreciate the entire amount of the build out.

So you know, more policies like that might get industrialization. Can you paint me a picture of who the major power players are in DC? Are there trade organizations that are doing stuff here? We've seen some of the different, like the Longshoremen's Union, do they have a view on this?

Are there different organizations and leaders who are championing these causes? I mean, even this, yeah, it seems like you are honestly one of the champions of like the e-commerce community. In many ways. Trying to do that on behalf of our customers, for sure. Yeah, on behalf of your customers, but are there other more official organizations?

I'm sure there are. NRF, National Retail Federation, is typically the main channel for this. There's a few others I'm not that familiar with. The big CEOs are going direct. I mean, you've seen they say they were all at the White House. Yeah, yeah, yeah. But yeah, not really much of a voice for small business

out there. So we're trying to do that. I'm sure there's all kinds of lobbyists. You mentioned a long storm. And so the I L W U is the West Coast Sports Union. They came out a post of tariffs last week. OK, I L A endorsed Trump. Yeah. And they have not come out. OK, yes. Yeah.

I L A is the East and Gulf Coast Sports. Yeah. Yeah. Once it went on strike last September. Yeah. But much less effective. The guy. Yeah, but isn't there Yeah. But much less affected. With the guy who had the crippling. Yeah, yeah, yeah. But aren't they much less affected because it's not trade with the trade? A lot of trade. No, a lot of the East Coast trade

comes through the Panama Canal. Or it used to be through the Suez, but around the Cape of Africa right now. So yeah, I mean, they've got to be opposed to this. It's bad for their business. But Trump helped them get there.'s the talk around the Panama Canal Beneficial to trade long term if that happens whatever Trump was talking about like taking more control there not letting China grab it that is so

It felt like it kind of fell out of the news because the tariffs are so everything The crazy thing about Trump is that a lot of these stories of things that he's done or said or actions would be like the story of the year. Yeah. For like a normal presidency. Jamming so many current. And they can't last two days before the next one. No, no, no. Yeah, we have 20 current things at once.

Yep. The media can't keep up. Democrats definitely can't keep up. None of us can keep up. Yeah, it's wild. The Panama one was, they're trying to get them to, the two ports, the ports on either end, it's not the canal itself, but the ports on either end owned by Lee Kexing,

sure, Hong Kong based billionaire, British man in Hong Kong. He went to sell it, the Chinese blocked the sale. Interesting. Which I think I've seen that the Trump administration argued that the very act of the Chinese being able to block the sale is a potential violation of the treaty by which the US handed over the canal zone to Panama. Now they're threatening maybe we'll invade Panama again and take it over. I don't think anyone wants to see that happen.

Okay, that's interesting. I don't think from an efficiency standard that's really relevant. We don't need another current thing. I'm sure there's national security stuff's going through What have you heard about? Even I saw a story about iPhone suppliers not being able to get equipment out of China Did you see anything about that? Oh, is that is that is that not even surprised? I didn't follow it very closely Yeah, I'm not sure. Yeah. No, just kind of an inch, you know There's there's you know the idea that we would decouple even the iPhone supply chain from China without

fresh sort of inward pressure from couple things I heard here in DC is that they like senior people shall not be names have said that 145 percent is a decoupling rate names have said that 145% is a decoupling rate. If they understand that, that at that tariff level, these economies will decouple. And that's evidence now with the 60% decline in bookings basically instantly, and that that's not where they want to be. They do not intend to do a decoupling.

It's more strategic decoupling. In a dramatic fashion on such a short time scale, et cetera. So I think that that speaks to, and Trump has said as much that they're gonna lower the tariff rates. It's just a question of when and how low do they go. Those are massive variables. My view is that when it needs to happen almost right away,

if they wait a couple months, I think you're gonna have huge fallout and damage to the economy and small business getting wiped out and employment and all that stuff, inflation. How low, I don't really have a good read on that. At what level is, no one's going to tell you honestly. Yeah, of course. Bloomberg asked me this morning, what level?

I'm like, 0%. 0%. Don't ask me, I'm a free drink guy. You know my business. So I don't know what level it needs to be for business. I don't think anyone really knows, though. Like, these models are super complex. Yeah, totally.

And there's only second and third order of facts. Yeah, like, it's really hard to predict. We'll have to keep tracking it. And then you have, like, what's the dynamic by which Trump can walk this back? Sure. Yeah. Like, I think he needs a scapegoat.

Yeah. He needs to find someone and blame them. Blame them. We should find somebody from the event. There's got to be one guy. There's got to be one guy. There's gotta be one guy. There's gotta be one guy. They're probably here.

Yeah. Delian, Delian? It's your fault. You gotta do something for the country right now. Delian's like, I'm only interested in space, actually. I didn't. Anyway, thank you so much for coming on. This was fantastic.

I'm, I want the tariffs to end so you can get a good night's sleep. Yes, yes. You deserve it. Preachers, by the way. Anyway, let's bring in Augustus Dorico. Welcome to the stream, Augustus. Third time, another third timer on the show, Augustus.

How's it going, Doug? Welcome, how you doing? First off, thank you for the weather. It's fantastic. Not too hot, not too cold. I feel like you pulled some strings. The pleasure's mine. Yes, exactly.

We got here and we were like, I was making a joke. I was like, wow, our politicians, the swamp would set up in one of the nicest climates I've been in in a while. I was like, it's normally terrible. We're here on like the one nice week. Yeah, yeah, yeah. With big fluffy cumulus clouds, beautiful cumulus clouds. Yeah. The clouds are seated should we want? Yeah. Have you been here in DC a lot less than random state legislature capitals? Yeah I mean for those that don't know there were up to 33 states opposed to weather modification. Wow. However 18 of those bills were either dropped amended

to carve out cloud seeding, and still ban chemtrails, which is gonna be crazy, because those bills will pass and then people will still see chemtrails. Sure, yeah, yeah, yeah. Or, Montana, great case, we showed up there, we're like, hey, cloud seeding's pretty cool, huh? And then they funded a program.

Oh, that's great. So yeah, we'll be expanding there. But the folks in DC that we met with, they all are way more level-headed and just say, hey, we're not going to concern ourselves with the whole QAnon thing. Cloud seeding seems like a great water supply tool. We'd love to start working on report language, et cetera, et cetera.

Yeah, that makes sense. How much is water scarcity a factor in re-industrialization? I mean, even last week we were talking about how the water demands of oil production and just how absolutely insane they are. Not to mention they end up with a bunch of water that they don't really know what to do with, trying to evaporate. But how much is that kind of a factor and what kind of conversations have you been having here at the event? Yeah, you know Jensen gave his speech earlier today, right? And I think a lot of people intuitively, yeah sorry, a lot of people intuitively talk about how

energy is this like fundamental primitive in all industrialization, so are critical minerals, so is now intelligence and human capital. Water, because nobody has ever had any ability to work on it and provide new supply, has kind of just been this assumed limitation. It's going to be necessary to produce more should we want to build up this industrial base, should we want to increase ag production. Particularly the TSMC plant in Arizona, nobody knows where the water for that's gonna come from. Yeah, yeah, like you need it to come from either the mountains in Flagstaff or the Colorado River. And the only way to get it, there's cloud seeding.

There are crazy stories about the water at TSMC. If it's slightly saltier, it affects like the yield of chips and stuff. It's like total alchemy. Oh yeah, no, that's magic. It's like there's all these aerospace parts. CP talks about this all the time. Like, yeah, like there's all these aerospace parts CP talks about this all the time like yeah Like there's some parts made in Michigan. Yeah, okay

Anyway, and it's like yeah, there's like a little bit more of whatever in the water in Michigan and without it Then you can't make like the lubricant thing with the tap in New York. Makes the good pizza and bagels, right? Exactly. Isn't that the rumor? Jordy won't touch it, but it makes it great. Oh, the tap water in DC is rough. Yeah, he's not a fan. Not a fan.

He's not a fan. Anyway. Yeah, bring us into some of the other conversations that you've been having here at the event. What's exciting? Yeah, walk us through that. Yeah, I mean, I think for one, deepening our collaboration with the Middle East, right? Like it's no secret people talk about the Trump admin and how close they are to MBS,

to the Emirates and otherwise. I think that because that country is very seriously like enacting this vision for a crazy future, for greening Saudi Arabia, for billions and billions poured into AI. One, they're a great capital partner for a lot of the tech ecosystem that wants to grow out of its nasancy and deploy, but also I think they make us look in the mirror about what's possible. So talking to people that have been doing work there,

that's exciting. Talking about how we're collaborating in the Middle East, that's a big deal. What the name of that like regulatory portal you like submit a paragraph and it's like get rid of this regulation please oh no no no it's like the it's like the FTC and you just go like I get rid of this and if they accept your just tweeted Elon, actually, if you want to. Yeah, yeah, yeah. Please fix. Gary Tan. Please fix. Add Gary Tan. Yeah, yeah, yeah. That does it usually.

Exactly. If you get it approved, they name the new regulation after you. After you? OK, so you want to do that. That's good. Speaking of national regulation, is there any, obviously, the first time we met, you talked about China

planting trees and terraforming the Gobi Desert. Is there any world where that becomes like a national policy or do you still do you need to go state by state? No dude, so Secretary Burgum gave these great remarks this morning about how all of our federal lands should be considered a national asset. That makes sense. Totally makes sense. And we probably have, I think of federal lands

as like the forests and like Yosemite, but there's probably federal land that's desert, right? Yeah, no, there's tons of them. Tons, tons. Yeah, millions upon millions of acres. Why don't we just convert this into the next Yellowstone? Exactly. Create a Yellowstone club.

Dude, like next Yellowstone, which would be sweet, or also more timberlands, which you can harvest. Or farmland. Yeah, exactly. So like all of that, or just give it to Teddy and have him tear it all up and strip mine it or something That's also fine with me as long as you have a proportionate amount of new Yellowstone's wait who's Teddy Feldman? Oh, okay Yeah, yeah from during that makes sorry gundo brain. Yeah Everyone's on first

Yeah, yeah, really not doing a lot for the listeners at home might not be familiar with the inner workings of the gundo policy Where you headed next back to the gundo I get on a midnight flight back to gondola Okay, I'm gonna interview a bunch of scientists and then I get on a midnight flight tomorrow to Florida and then on Sunday I go by the way most brutal flying midnight It's the worst and then you're back on an overnight And the overnight to Florida is terrible because only five hours sleep. You can't even get a full night's sleep. You get cooked. Well, I did Salt Lake to DC this morning.

First of all, flew into Dallas. Huge mistake. But on the flip side, my row was empty. So I laid down, slept like a baby. That's great. Okay, good. Well, hopefully you can get some sleep. Hopefully you can make it through those flights.

We appreciate you stopping by. Thanks so much. This is great. Always good to have you on. Can I have the couch for the road? Sure, of course. Thank you. You can take this whole tin.

There you go. What a guy. What a guy. I saw that. Excellent. Anyway, so we bring in the next guest. Who do we have? I know we got a couple folks here.

Let's bring him down. How you doing? I met you the last Hill and Valley. Welcome, welcome to the stream. Would you mind doing an intro for the viewers? Introduce yourself, the company, what do you do? How are you doing? Hill and Valley.

Yeah, grab it like this and then just hold it like you're giving a speech at the most important event at Hill and Valley. Awesome, well thanks again for having me. Good to see you again. You've given a speech at the most important event at Hill and Valley. Awesome. Well, thanks again for having me. Good to see you again. Of course. So I'm JC Ptace.

I'm the founder and CEO of Fuse, our fusion company working to accelerate the world's transition to fusion energy while also safeguarding humankind. So it turns out if you try to create an artificial sun on earth in a bottle and use a lightning bolt to implode a pellet of fuel, that's really useful also to ensuring the safety reliability of our nuclear arsenal yep and so we're you know very committed to continuing to help the US modernize its nuclear arsenal and being offering radiation yeah as a service yep yeah when we talked it was fascinating because you were much more commercialized than most other nuclear founders

You talked to who are more in the let's get all these approvals. Let's build a big thing What has that commercialization been like and can you concretize the actual product that you're selling and to who yeah. Yeah, so We have customers both in the US government and to you know public companies sure and We've built two machines that are operating today. One is the world's highest power energy delivery system. We call it Titan and we publish. It's one terawatt, but for billions of seconds. One terawatt, wow.

But for billions of a second, it's 20% of the whole world power production. But it's just for billions of a second. And it's not a fusion machine. it's just an energy delivery system. But it creates pulses of radiation that are so intense, and then you can expose electronics or materials and see how they behave. So you're creating hostile environments similar to what would happen in human-made hostile environments

and expose electronics, materials to those types of radiation, whether it's x-ray, neutrons, and see how they would behave. That's really critical to ensuring reliability, safety of critical assets in space, as well as now conventional systems. And I don't know if you saw last week, but there was an announcement that the US will be spending $946 billion over the next 10 years to modernize the arsenal and it's 25% increase in budget since 2023. So it's a big deal.

And by producing this radiation and reducing the dollar per rad and the availability of radiation, we can save taxpayers billions of dollars while offering radiation as a service. Talk about the energy requirements of reindustrialization, which is the theme of Hill and Valley. I think a big question is like, okay, where's the power going to come from, even if you're not looking at AI? Or a lot of the conversations that you're having here around with some of these bigger companies that want to come back to the US,

but want to make sure that they're able to have the energy and the structure to actually thrive here. Yeah, it's a really challenging problem. I love the quote from Jensen today where one gigawatt is like $60 billion dollars and it's the annual revenue of Boeing Yeah, yeah, that's really not gonna work out very well. Yeah, good thing about fusion You know the first thing I'll say which may be a bit controversial but fusion is still like we're still far from Commercializing it. So yeah, it's still probably gonna take a decade or two to actually put electrons on the grid

Yeah, but it's still really important and we can't afford for another country to get there first. But the good thing about fusion is that it's location independent. So you can put it anywhere you want. The fuel is hydrogen, which can be found in seawater. So you can literally take a data center and build a fusion plant right next to it and not have to integrate with the grid. And I think fusion being safe, clean, abundant, on-demand makes a really appealing case for industrials because you can build a power plant right next to your industrial plant whether it's data center, steel factory, glass factory, etc. But and when you think about the changes that have happened over industrialization,

there's been no new nuclear facility built in decades. So the workforce actually knows how to build, it's gone. Whereas China is building dozens of plants and we've seen satellite imagery recently that's become open source on exactly our footprint of our facility being built. And so we just cannot afford for China to become for Fusion, what Saudi Arabia has become for oil. Yeah. And that's a really critical.

So is that the long-term business plan for you? Like find commercial applications today that advances the R&D pipeline for ultimately Q greater than one Fusion production that can be grid scale. Yeah, great. So you know Q greater than one all this stuff. It's great like Pat on the bag. Good for you. You may do it, but ultimately it's how much does it cost? Yes. Q engineering or... Yeah, well Q commercial. Q commercial, I guess. Right and also reliability. Like if fusion is not a baseload power, which means it's running

99.9% of the time, how is it really competitive as other sources? So you're doing one billionth of a second now and you need to get to 24 seven. Yeah. You're just 10 doubles away, I guess. Well, we just need to increase the rep rate. So we'll still be pulse, but just increasing the repetition rate. And that's the thing with fusion because even healing on is like pulsed, right? That's the idea.

And our pulser today actually operates at 0.1 hertz frequency, but we still blow up the chamber and that's still something to work on. But the good thing is, the way we say it is, radiation as a service, is we're getting paid today to produce more radiation. The cheaper the radiation, the higher our margins, and the more we fire, the more money we make.

So we're getting paid to optimize our radiation service, and radiation is ultimately energy. So we're building a sustainable business to get to the sustainable future that we all want. And there's a massive multi-billion dollar business to be built along the way, which is what a lot of our investors on the road to get this business going. Where is the business now? How many employees? How big? Yeah. Yeah, where is the business now? How many employees, how big?

Yeah, so we have around 50 people now. We've got a couple millions in revenue. Awesome. We're on active contract supporting. This is very rare for Fusion companies, congrats. Yeah, thank you. It's very cool. Yeah, thinking outside the box.

And yeah, so we're still humming. Well, good luck to you. Thank you so much for stopping by. I hope you have a fantastic rest of Hill and Valley. We'll see you out on the floor. Yeah, we'll see you. We'll see you later. You got anyone else?

Yeah, Eric Torenberg wants to stop by. Eric, get over here. Get over here. I have a bone to pick with you. I saw you. You posted that you started a new group chat, and I'm not in it. Oh, don't worry.

I was so looking forward to getting added to something where a bunch of people are yapping and I have to put it on mute. Because I wanted to be one of the smart people. Yeah, no, I learned my lesson. The next one, I'm yapping so egregiously that I definitely get in the hit piece. You will be invited.

They can kill Chatham House, but they can't kill the idea. It's going to resurge again. Of course, it's still running. Even if the world had a nuclear war, Mark Cuban and Brian Goldberg would still Yeah, it's going to resurge again. Of course, it's still running. Even if the world had a nuclear war, Mark Cuban and Brian Goldberg would still be there every day. Yes, yes, yes. To get it out.

To get it out. Have we gotten to the bottom of who Ben Smith is? It sounds like a generic name. Sounds like a fake alias. It's something that you see on a lot of fake IDs from high school students that are trying to buy beer I'd love I don't want I'm not a big fan of doxing But I'd love to get to the bottom this man really is Ben Smith who you know docks the group chat

Yeah, he is that doesn't mean that we should dox him, but I want to know first. I'm not gonna share it Who is who is Ben Smith really? I think he's saying a non for now. Okay. I want to respect that yeah I want to know you know he's very kind. I follow the paradoxical commandments You know even if people don't, even if people dox you, don't dox them. Don't dox them back. That's smart. We'll keep his identity private,

but I do know that as an anon, he did publish the Steele dossier while he was at Buzzfeed. And I also know that he apologizes, or he almost regrets it. Okay, okay. Which to me is as good as an apology, and I believe that people can grow and change,

and so I'm proud of him Okay, because yeah Yeah, any other lessons from the from the story from group chats. Where's the future? What's next? Well, I think you know, I got a lot of people emailing me being like, you know People like I play a pickup basketball with you don't even know being like how could you platform Tucker Carlson? Oh, yeah, how could you do it? Yeah Like how? And I'm like, I'm sorry. You know, first off, I regret to inform you that Tucker Carlson is pretty big already. And also it's a private group chat. So I'm not sure exactly how I'm platforming Tucker Carlson. But so a lot of

people are angry that people are getting together and having conversations. But you know, we're going to keep doing it. We're going to keep doing it. Yeah, we're gonna keep doing it The goal was to have a left-right exchange and we're gonna keep there was the original we're gonna keep trying to to make it together I invite more of my friends. Yeah on the left and the right to to be a part of it and You haven't gotten any emails. Well, how could you platform Mike? Cuban, but no, I think I didn't get emails that but I got DMS every day Yeah, while Chetlin house was going of like why is Mark Cuban? I didn't get emails that, but I got DMs every day while Che the House was going of like, why is Mark Cuban here?

It's good, it's an anti-echo chamber. And how does he have so much time to chat every day? And my theory is that the pinnacle of Maslow's hierarchy of needs is being a poster. Once you've truly made it, then you could just post all day. We have this ongoing fight with Antonio Garcia Martinez, who now we should call Antonio Gracias, the Valor guy, because he's always getting mistaken for him.

Oh, yeah. I know. It is funny. He should just own it. Oh, yeah. Just rename him Antonio Gracias. Because they're like, great speech today when he did the Doge thing.

Oh, and he's like, what? Talk to him? That's hilarious. Yeah, you should have him on and just talk about that. Yeah, we should have them both on. I'm thinking about doing, you get both of the, both of the Balagies on, both of the Sri Ram's on. There's four Kevin Jang's, we're gonna get all them on.

So we have this bit with Antonio where he's like, as soon as I'm rich, I'm getting out of this. Like, as soon as I'm richer, and he just loves company. As soon as I'm much richer, I'm getting out of group chats, I'm getting out of Twitter, and of course, Mark Catrice is in the group, all these other people who have done phenomenally well and are just posting all day and they're like, you'll never leave.

This is the best. In fact, you'll step it up. You'll step it up. So I think the demand is there, I think the supply is there, and we're gonna keep doing it. Do you think these groups? It's so, I have to say, I think people don't realize how much work everybody, whatever, four years ago,

it was like everybody should have a community and then you had companies making Slack, some discords or things like that. And it just takes a massive amount of work to sustain that. We talked about last time you were on the show, this sort of admin lift. There's a software solution,

but then there's cultivating and there's selecting who should be in a group and all these different things. And it's actually makes so much sense to have a third party like do that, not have it just be on one member. One day they might wake up and they don't want to do it anymore, but should the group die? It's like, no, the group should be able to live on. And so having a-

What's the ideal size? Are you, Dave Morin had path, it was 150. What's that Dunbar's number, I think Chatterhouse got up to like 330. What are your best practices? Chaterhouse got too big, I think dozens of spin-off groups have formed and it's like 10, 20, 30, I think it's a good question.

I will say I'm a bit of a street group chatter. Shriram and ACC, these are academics. They have a rigorous operation. They have community managers. I'm excited to co-lead this operation with Anish now that Shriram has left. And so I'm excited to get support on the moderation side and to come back out.

This is a blow to Chatham House, but we will be back. We will rebuild. We will rebuild. No, it's still there. It's still there. You still see Mark. You still see Mark. You still see Brian. They pop up.

They pop up. I'm doing the show. I'm like, what are they fighting about? We should probably talk about it on the show. Exactly. I'm willing to say publicly that nobody kill, except this a non-guy, Ben Smith, who I... We got to the bottom of the match. Exactly.

We got to the bottom at some point. Outside of that, but I will say even before that of it at some point. But outside of that, you know, but I will say even before that, it was getting too big. And I will also say that on the record that nobody killed Chatham House, but Brian Goldberg did kill Chatham House. A little bit. I love Brian Goldberg.

But he's very active. I actually learned a lot from him kind of sharing his business experience. And I was unaware of him as a founder or a business operator before. And the other names were kind of, okay, I already know their bit and I know unaware of him as a founder or a business operator before and the other names were kind of, okay, I already know their bit and I know their shtick. No, no.

So it was interesting. I love how outspoken he is. He's also a media tycoon. Exactly. Yeah. In the women's space. Yeah, I own fashion magazines. I own fashion magazines.

I don't know. I was like, how to tire respect your business? He's like, well, we have some advertisers. I'm like, oh yeah. Yeah, yeah, yeah. He broke that down very easily. He's brought a lot to it. And yeah. Very cool.

Anything else? What does this top line? What's exciting so far about Hill and Valley? It must be nice to be in an event or a social community thing that you didn't put together yourself. Yeah, yeah. And I was just at the American Dynamics Summit last month. And that was fantastic, too.

And this is also fantastic. I think it's just amazing how big this space is. I will say it's like, and you guys have covered it on the show, but it's like, this is like the new Silicon Valley, and I feel like when Paul Graham made that Palantir tweet, it was like a clash between sort of old Silicon Valley and new Silicon Valley, and it's interesting to just sort of

see not just the new people that have emerged, but sort of the new ideas around building companies. Like it's not just sort of make something people want and just talk to customers and just build something today. And I feel like maybe he's right. Maybe there'll be a cracked founding team, ex-Andral ex-Palantir digital ads, digital ad startup. One thing that comes to mind,

we had Mike Solana earlier on the show and he was basically talking about how like Ezra Klein's whole abundance theory and ideas like a lot of the stuff that he had you know was like these were silicon valley ideas ago like this idea of charter cities and you know energy production and all these things so I think we're all on the same team that's what I just appreciate about Hill and Valley. The number one person on the Hill side of the event that gets brought up is Richie Torres. He's a great Democrat, and I think people associate

a lot of these different characters with the right, but so many of these issues are just American issues. 100%. All together. Matt Iglesias, who was a Chatham House member for I think a week before he decided to leave, and I'm a fan of him, he tweeted a platform for the Democratic Party and David Sachs co-tweeted and said, this is conservatism. So there does seem to be a lot of convergence.

I love what Derek and Ezra are doing with abundance, sort of bringing free market economics to the left in a way that is palatable and accessible. It's more nuanced than that, of course. But yeah, there seems to be a convergence happening. And if we have sort of both parties being more moderate, moving to the middle, you know, that all of that. I think the future of American politics is something I'm calling like far centrism or

alt center. I like that. Just the most extreme centrism. This is the future. Yeah. Just the most extreme centrism. This is the future. Just being really extreme about it. Unless there's representation by both houses, we have a split house and Senate, I'm not happy. Anyway.

It is really interesting. It's a fun time. How much time are you expecting personally to stay in Washington? You have a lot of places you could be spending time at as an area that. It's my second week on the job. We have a robust DC operation,

and I want us to tell that story a bit more and help. So we're gonna do a policy podcast, and so I wanna spend more time here, and also bring on people who are really at the intersection of DC and tech. It does seem like it fits really, like we were talking about this lobbying adjacent VC activity, introductions to people on Capitol Hill,

that feels like it definitely fits into the injuries in machinery. Totally. Of like, hey, if you're doing enterprise sales, they'll set you up with a bunch of people. PR was something they were very, very good at. Even hiring, find your VP of engineering. Doing some light lobbying,

maybe not being a lobbying firm, but introducing the right things. Making sure if there's a government relations organization, you know how to build it. And I love that we're also collaborative on this because it just moves the whole industry forward. Like we have sane crypto policy, sane AI policy, sane policy across, it just helps everybody.

So that's a place where we all get to bring them together. One thing I also just want to say is, Gavin Newsom's another example of somebody trying to move to the center and bringing on Charlie Kirk and other people on this podcast. Let's make that a thing. Bar Center. Bar Centrist. And I hope that it works out. I hope that it helps him in the primary.

Yeah, it seems like it's better off for every American if there's more unity across the aisle. I just want to know what ACI is doing. that it helps him in the primary. Yeah, it seems like it's better off for every American if there's more unity across the aisle. I just want to know what ACP is pointing next. Yeah, the next coinage. Leak it. Announce it on TVPN. Always be pointing.

Always be pointing. Fugin's Law is very important. No, but I mean, I think American dynamism is no longer contrarian. We saw this. I remember Hereticon this year was like the longer contrarian. We saw this, I remember Hereticon this year was like, the least contrarian person I saw was wearing a, like a Make America Greater get a hat.

Yeah, yeah, yeah. And beyond that, everybody was doing nuclear. That was like no longer contrarian. So it's just like a big thing I'm trying to figure out while we're here is like, you know, what is the thing that nobody's talking about today that will be maybe the entire subject matter of the Hill and Valley or the next American Dynamism Summit

in a couple years? 100%. Well, just chat with yourself. Group chat dynamism. Exactly. Well, whenever Catherine or whoever on the team has it, we'll be on TVN. Fantastic.

My last thought here is it feels like group chats with people that you don't know that have differing beliefs are the antidote to GPT-4.0. 100%. Agreeing to whatever you're gonna say. Totally, totally. It's like you go on chat, GPT, it's like, you know what, boss, you're 100% right.

Everyone else is wrong, you are right. You go on a group chat and it's a way to get like fuck you yeah you're wrong no no yeah make disagreements great again and yeah hopefully we can continue to be in these spaces yeah that's a great place to end the show thank you for watching thank you for tuning in we hope you enjoyed the stream we'll be posting a ton of clips and we will see you tomorrow or Friday depending on when we get back to LA. Talk to you soon. Bye.