TBPN Live - Warner Bros. Discovery Split, Defense Tech Update | David Senra, Katie Haun, Justine Moore, Anish Agarwal, John Lee, Connor Zwick, Trey Holterman, James Cadwallader, Jordan Black, Ayush Sharma

Episode Date: June 18, 2025

(02:20) - Timeline (27:07) - History of Warner Bros Discovery (01:14:16) - David Senra, host of the "Founders" podcast, is renowned for his in-depth explorations of entrepreneurial biographies, offering insights into the lives and strategies of history's greatest business leaders. In this conversation, he delves into the career of music industry titan Jimmy Iovine, highlighting Iovine's relentless drive, exceptional talent recognition, and innovative marketing strategies that propelled artists like Dr. Dre and Eminem to global fame. Senra emphasizes Iovine's unwavering commitment to excellence and his ability to harness controversy as a tool for business success. (01:47:46) - Katie Haun, founder and CEO of Haun Ventures and former federal prosecutor, discusses the recent bipartisan passage of the GENIUS Act in the U.S. Senate, which establishes a regulatory framework for stablecoins. She emphasizes the importance of also advancing the market structure bill to provide comprehensive regulatory clarity for the crypto industry, highlighting the need to address questions surrounding securities and commodities classifications. Haun advocates for pursuing both legislative measures simultaneously to foster innovation and protect consumers in the evolving digital asset landscape. (02:06:49) - Justine Moore, an Investment Partner at Andreessen Horowitz, focuses on AI companies within the consumer sector. In the conversation, she discusses the rapid advancements in AI video models, highlighting the emergence of foundation model companies like VO3 and Cling, as well as multimodal apps such as Crea and Flora, which enable creators to generate videos using various AI models. She also explores the integration of speech and talking avatars in AI-generated videos, noting the development of tools that create talking avatars from images and those that apply lip-syncing to existing videos. (02:31:39) - Anish Agarwal, co-founder and CEO of Traversal, discusses the development of an AI-powered site reliability engineer to automate troubleshooting in complex software systems. He highlights the limitations of current observability tools, which require manual analysis, and emphasizes the need for AI agents to manage increasing system complexities. Agarwal also notes the challenges in hiring skilled site reliability engineers and the potential of AI to alleviate this shortage. (02:39:52) - John Lee, CEO of Safire Technology Group, discusses his background in defense contracting and his company's focus on accelerating electrification within the defense sector. He highlights challenges in military electrification, such as supply chain shortages and the need for advanced, interoperable battery systems, and introduces Safire's development of a tactical electric dirt bike designed for military use. Lee also emphasizes the importance of integrating safety into battery design, referencing Safire's patented SAFIRE technology, a shear thickening electrolyte that prevents fires upon impact, enhancing battery safety and performance. (02:59:39) - Connor Zwick, co-founder of Speak Language Learning Program, discusses the company's mission to create an AI-powered language tutor that offers personalized, on-demand instruction. He shares their strategic focus on the South Korean market, noting the country's significant investment in English education and the prevalence of English learning academies. Zwick also addresses the potential impact of real-time AI translation technologies, expressing confidence that the desire for genuine human connection and the aspiration to learn languages will continue to drive demand for language learning solutions. (02:59:39) - Trey Holterman, CEO and co-founder of Tennr, a New York-based company specializing in automating healthcare document processing, discusses how Tennr addresses the inefficiencies in patient referrals caused by reliance on e-fax documentation. He explains that over 90% of patient visits originate via e-fax, leading to delays and lost revenue due to incomplete documentation. By automating the processing of these documents, Tennr ensures timely patient contact and complete records, thereby improving patient care and provider revenue. (03:09:26) - James Cadwallader, co-founder and CEO of Profound, discusses the company's recent $3.5 million seed funding led by Kleiner Perkins, with participation from Khosla Ventures, Nvidia Ventures, and others. He highlights the shift from traditional search to AI-driven platforms like ChatGPT, emphasizing the need for brands to manage their visibility in AI-generated responses. Cadwallader also notes that Profound's platform has attracted clients such as MongoDB, Indeed, and DocuSign, underscoring its growing influence in the evolving digital marketing landscape. (03:17:38) - Ayush Sharma, founder and CEO of Warp, a modern payroll and compliance platform for startups, discusses how Warp automates payroll processes, including tax compliance and employee benefits, to alleviate administrative burdens for founders. He highlights the company's recent $18 million Series A funding led by Sound Ventures, with participation from notable investors like Drew Houston and Kyle Vogt. Sharma emphasizes the importance of building exceptional products in large markets, noting that even in crowded sectors, delivering superior user experiences can drive significant demand. (03:28:04) - Jordan Black is the CEO of Senra Systems, a company specializing in designing and manufacturing complex wire harnesses for industries like aerospace and defense. In the conversation, he explains that wire harnesses are essential components connecting electrical systems in vehicles and machinery, yet their design and production have remained largely manual and unchanged since the Cold War. To modernize this process, Senra Systems is developing a software tool called Amp to standardize wire harness design and implementing automation to streamline manufacturing, aiming to improve quality and efficiency in the industry. 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You're watching TV today's Wednesday June 18 2025 we are live from the TBPN Ultradome the Temple of Technology the fortress of finance the capital of capital The home of the golden retriever. We are so back Deleon sums it up. Well, he says we thought it was so over But in fact we are so back because Chamath Pali. How Patea is launching a SPAC or he's exploring He's exploring the idea and he's having conversations Advanced talks. I think I'm gonna vote. Yes Reason for that is that 99 percent 99 percent of SPAC sponsors quit right before they're about to hit it big

Yes, and so I think that this could be the one. And I think everybody should be open to the idea, right? It's not the vehicle is not the problem. It's the asset that becomes a part of it. And so let's keep an open mind. I agree. He could very well be backing Stripe. I've never wanted a polymarket on something more. We need a polymarket on whether or not this back happens before the end of the year ASAP ASAP immediately

Also, I mean if the SPAC gets out, you know where to go public comm investing for those who take it seriously Multi-asset investing industry leading yields the trusted by millions go check it out Let's read through some of the news that we want to cover today. Give you a little bit overview of the show. The big news is more development in the story around Time Warner. Look at that lineup. Wow, that is a stacked lineup. It's getting to the point. It's actually a little hard for me to read.

It's a little hard to read. Yeah, we might have to come dense some of this down, figure out a way to kind of roll up working on a lightning round product, something where we can go back to back to back. We did it with the Teal Fellows, worked out really well. We've been doing it at YC Demo Day. I think we're gonna do it more frequently because there's so much news.

Have you been following how many funding raising announcements have been going out? Like the timeline is just like six companies raising legitimate like seed series, series A, series Bs every single day. Yep. Narrative violation. The venture capitalists do not appear to be on vacation.

Somehow. They're here. We'll see. These might be deals that got done before the private jets left for Europe. But. That's right. They're just getting announced now. But we'll be here covering it, talking to the founders who are raising big dollars

from big name BCs and we have some news about who's joining what team and There's a lot of movement amongst the tier lot of action So there's an update to the David Zaslav story about Time Warner will will dig into a little bit of the split of what's going On this is of course HBO HBO Max they went to HBO. They went to Max They went to HBO they went back and forth with the brand. Eventually, now they're splitting up the company entirely. And big news, Warner's chief to receive pay cut after split,

this is David Zaslov, and so he will be making less money now as he's only overseeing kind of half of the organization. Kraft Heinz is also removing all artificial dyes on the back of the Maha movement and a lot of stuff that RFK Jr. has been pushing, right, Bobby Kennedy? I've been surprised at how quickly some of these players have been willing to give up their sacred artificial dyes.

At the same time, with the artificial dye story, I don't know, I still don't have a firm idea of exactly how dangerous they are, exactly the impact. It seems like there's a study that shows that might. You've never been afraid of them. I've never been afraid, I'm still not afraid of them. Just go out and say it. But it seems like right now the narrative is that

they might lead to slight increases in ADHD symptoms Amongst kids and so if that's true, that's obviously something we want to avoid It seems like you know a lot of the rationality John who they don't have you're taking the side of big food I'm just saying like like the the the actual narrative The commute the science communication I think has been lacking on the food guys It's been a lot of like it's scary But it hasn't been concretized in the sense of like, it takes two years off your life. It raises your chance of cancer by 5%.

Like we're not there yet, and we've been there with other products, and I think that there is more, there's like, we need more from the scientific community or from the actual thought leaders in Maha, anywhere else, to really make it clear, like what are we getting when we remove this it seems like something that like we could do without because apparently food does they just make stuff more enticing basically. Yeah and there's plenty there well well the more important thing is there's plenty of natural alternatives are already used in Europe and other places around the world that we can just not in. So it's kind of like a why not conversation,

which is fine, but it would be cool if we actually knew to a point exactly how bad it was for you. I would always like to see that if possible. Other news, obviously the war between Israel and Iran is raging, now there's a more interesting dynamic of merging in the oil markets. We're gonna have a founder on to talk about oil markets soon, but China will pay if Iran's oil is cut off.

The country's refineries have become hooked on cheap imports of sanctioned Iranian crude. So there's a very interesting dynamic between Russia, China, and Iran as they all are kind of going to various levels of conflict with neighboring countries, neighboring areas. As they get cut off, they kind of drive each other towards one another, and so it'll be interesting. They would be unlikely bedfellows because of the difference in religion between China and Iran, but certainly likely trade partners

if they need to keep the oil flowing and Iran obviously needs to keep the money flowing as they fund their war effort. So interesting story there. Andy Jassy from Amazon is also talking about AI potentially cutting the size of their big workforce, which is interesting. We've heard this from Klarna.

We're gonna have the CEO of Klarna on the show soon and dig into how much of that is real, where exactly is generative AI agent stuff like actually affecting hiring, where can you actually? Get leverage. Get leverage, but the thing with leverage is like the game theoretic outcome is usually like,

I can do X with 10 employees plus AI, you can do X, you can do the same amount of output with 10 employees plus AI, you can do X, you can do the same amount of output with 10 employees and AI, and so we both wind up using the maximum amount of employees and AI. It doesn't always play out that there's an advantage to be gained by cutting your workforce. Especially if we're in this more Centaur era where we're not fully delegating entirely

and it's more like we want these AI enhanced employees and we need lots of them. So, but it is interesting, he says, about 41% of employers said that they would downsize their workforce due to AI, a World Economic Forum survey found. And so lots of people are talking about this, it's unclear if it's just a signal to the market that hey we're gonna be more

profitable going forward. It would be interesting to think about what type of messaging there was from CEOs in the dot-com era hey we're gonna be able to. All the fax machine employees are going away. Yeah. Eli Lilly is buying a gene editing startup they're paying 1.3 billion for Verve Therapeutics. It's on the cover of the business and finance section today. So I'm not super familiar with this. We need to have some more biotech people on to really dig into this, but they're paying $1 billion

upfront adding potential treatment for cardiovascular disease to its portfolio. Under the agreement, the company has said Eli Lilly will buy all of the gene editing startup shares outstanding for about $10.50. The stock was at around $6 beforehand. There's another $300 million contingent on the company's lead treatment

achieving certain clinical milestones. The treatment is being evaluated in phase 1B clinical trial study and has been granted fast track designation by the Food and Drug Administration. There's a lot of excitement about Marty over at the idea. Some quick notes on.com era CEOs and how they thought about workforce expansion or contraction because of the internet.

So during the.com era, many CEOs and founders of internet companies believed that the internet would enable them to operate with leaner workforces compared to traditional businesses. This belief was rooted in the idea that the Internet could bypass established distribution channels, automate processes, and reduce the need for large numbers of employees to deliver products and services. The Web was seen as a killer app that could connect buyers and sellers in seamless, low-cost ways, fueling optimism about efficiency and scalability. However, this vision did not always materialize

as expected while some companies did achieve efficiencies. Many dot-com firms rapidly expanded their workforces in pursuit of growth and market share, often hiring hundreds of employees within months. So when the bubble burst, these companies faced quite a lot of pressure with layoffs and it did lead to a glut in the job market but it was ultimately driven by that desire to compete and

capture market share so many of these CEOs they they aspire to say hey we're gonna have these much leaner sort of workforces but the reality was that it was a lot more complicated than that and and there was some over-hiring. So anyways, I think we will probably see some of that, right? There's this pressure to just compete and just access the best talent and scale headcount in order to win market share. And I'm sure that will lead to layoffs

at different points that might be blamed on AI. Because right now, AI is this great scapegoat. If you want to downsize, you can be like, we're 10 times more efficient than we were last year. And if you want to upsize, you can be like, this stuff's too dangerous, or it's too big of an opportunity, or you want to spend more on CapEx,

we have to go after it. Yeah, it is the dominant narrative, it drives everything. It even drives the FDA, because the FDA, reporting to the Wall Street Journal here, says the FDA chief to fast track some drugs, this is what Eli Lilly is banking on, and tap AI. And so artificial intelligence top mind, even for the government,

embracing artificial intelligence, taking on companies that make ultra processed foods, and offering a fast track to approve drugs the Trump administration views as a priority. Welcome to the new FDA as envisioned by Dr. Marty Mokery, who is leading the agency under health secretary RFK Jr. Both men have said they want to overhaul the agency, citing what they see as FDA's reputation for coziness

with the pharmaceutical companies. Makery's goal is to deliver more transparency, unleash innovation, eliminate conflicts, and lower drug pricing," said Callie Means, a White House advisor and ally. And former guest of the show. Of course. That's here for Callie. Very interesting, the changes.

And so I'm not exactly sure how they're planning on implementing AI, but it actually does make a ton of sense because FDA officials said about 6,000 people at the FDA are using AI weekly. AI can modernize the FDA and radically increase efficiency in the review process. I mean, that is huge because you wind up sending in like 100,000-page document citing all this stuff

and a lot of the early FDA trials are just fact checking that you actually filled out the form properly, or fact checking that you even have scientific data, like did you do the test at all? And then if you did the test, then we will evaluate the results and put the scientists on it. But there's a lot of folks in the FDA

where their job is not actually to understand the efficacy or the results of the trial, but just to understand that the trial happened at all. And that is something that AI could probably jump into pretty quickly so that's exciting. Other news the Senate is set to pass a bill regulating stable coins this was on the front page of the Wall Street Journal. The Senate was poised to pass legislation to regulate a widely used type of cryptocurrency a key victory for the digital asset industry after it

poured money into last year's election. The bill, the first of its kind, put federal guardrails on digital currencies, would set up oversight of stablecoins, a popular crypto asset typically pegged to a fiat currency like the US dollar. The peg keeps their price steady, making them attractive to traders looking for a store value while they buy and sell more volatile cryptocurrencies. And stablecoins can also be used for cross border payments we've covered the genius act a few times we are having Katherine Hahn come on the show to talk about exactly what's going on break it down it'd be fun we've

talked plenty about unstable coins as well as stable coins yes but yeah her analysis should be spot-on so excited get that. In other news there is a shake-up at Renault is that right? Caring. Renault's star boss tests his skills at caring. DeMeo revived the car maker's fortune at Renault as CEO but views are split on whether he can do the same for the luxury group. Luca DeMeo was among French business elite celebrating the opening of the 2024 Olympic Games at a party hosted by luxury group LVMH at its five star Cheval Blanc hotel in Paris last July. Let's hear it for luxury group LVMH.

The Renault chief executive joined LVMH patriarch Bernard Ar Arnault, and top executives such as Louis Vuitton chief Pietro Bacari, but few expected that within a year, the motor industry veteran would end up with the top job at LVMH's longtime rival, Caring. And so he's hanging out at the LVMH party, little do they know, there's a trade deal in the works and he's gonna go over the direct competitor at caring The Italian is set to leave Renault next month and become the boss of caring the struggling owner of Gucci and Saint Laurent

From mid September while de Mayo has spent his entire career in the car industry. He has been making Discreet overtures to the luxury sector from some for some time according to two people with knowledge of the situation He cemented his reputation by leading a turnaround of a no, which he took over in 2020 when it was reeling from the exit of Carlos Ghosn. Do you remember this? No. He escaped in a suitcase.

Do you remember this whole story? No. Oh, it's amazing. Yeah, the Carlos Ghosn story is insane. Ghosn had been ousted after his arrest in Japan on charges he denies, later making a daredevil escape to Lebanon in a musical instrument box. That's what happened. So he-

In a plane? In a private jet. So he chartered a private jet under someone else's name and then basically was sleeping in a large guitar case or something like that. Or you know one of those roadie cases that has like speakers in it and stuff? basically was sleeping in a large guitar case or something like that. You know one of those roadie cases that has speakers in it and stuff? So he goes in there and then he gets out

and he can't be extradited because he's in his home country. And he claims that the Japanese government was accusing him of, was basically being anti-competitive with him because he was dominating the Japanese market and they were like, you're cooking the books, it's unclear. And like, we'll never really know, I guess,

who did the right thing. But Dumeo came in and was like, okay, I'm gonna turn this around, be a little bit more by the book maybe, maybe don't get, you know, charges pressed. You don't wanna end up in a situation where you're just getting snuck in a private jet in a musical instrument case.

You just wanna avoid that. Yeah, you wanna be musical instrument case. You just want to avoid that. Yeah, you want to be on the couch. Life's not about what you should do, it's about what you shouldn't do. It's about avoiding things. So DeMaio took over in July of 2020. Renault shares price has almost doubled, let's hear it for that.

While Volkswagen has fallen by a third, and Stellantis has been almost flat, Stellantis is also in trouble. Renault's operating margin improved from a loss in 2020 to a record 7.6% last year as he moves from one top French group to another and prepares to steer another turnaround. The question is whether DeMeo's lack of experience selling handbags and high heels will help or hinder his bid to revive caring.

Luxury is a bit different from carmakers said one luxury executive who said DeMeo was a big captain of industry and a real star who could still succeed in his new role. Caring isn't lacking in creativity but in structure and discipline. A combination of strategic missteps and global slowdown in demand for high-end handbags

and watches has left caring in a difficult position. Flavio Creta, fund manager and luxury specialist at GAM, said caring had to do something big to address the situation. Caring slowdown follows years of struggle. The caring LVMH dynamic is interesting. Caring has Gucci, Saint Laurent, Fitega Veneta, Balenciaga, Brioni, a bunch of other brands.

LVMH has pretty much every other one, besides Hermes, which is obviously an independent company. I thought they were investing, or they own a stake of Hermes. Is that right? They have some ownership, and it was always the goal to just kind of buy up and eventually take control, but that didn't happen.

But the power law dynamics that we see in venture clearly playing out here. Caring is a 22 billion euro market cap group. Down over 60% in the past five years. LVMH is an order of magnitude bigger, $270 billion company that's up 27% over the past five years, so if you remember not Too long ago bernard arnaud was richest man in the world yep still up there. He said

This is people weren't exactly excited about that except for us Why are you excited wait no I think that I think the pushback was like okay the Instagram era sure so that the Is not exactly cancer. Yeah, is that that criticism was not the criticism was that he wasn't a technologist and But anyways, he's an honorary technologist Anyway in other news dog. This is there are two crazy deals happening today. Dillon Field is leading a round into Senra Systems, which is a wire harness company.

Is that named after David Senra? I think so, we'll have to ask. We have both of them on today, so we can figure that out. And then Spotify Daniel Ek is leading a $600 million round into drone maker Helsing at a $12 billion valuation. And so, I mean, Spotify and Vigma, they're in different categories, but I see them both as like, you know, like consumerish internet,

like they design heavy, like not hardware stuff. Everyone should aspire to be an angel investor that leads $600 million round. Yes, or $600 million rounds. Yes, or $25 million rounds in the case of center. Yeah, I mean, there's a range. Yeah, there's a range. You can do a lot.

But yeah, stop. Don't aim so small and think, oh, I just want to write 100k flyers. Shoot for the 25k lead. Or sorry, 25 mil lead check or $600 million, depending on the opportunity. So we can dig into this more when we get to that. Also you know the $5 million US investor visa, the gold card?

People were joking that like Khamenei is going to apply for one and just be a citizen even though he's like you know public enemy number one in the war for Iran. Well 70,000 people have applied for it. That's a lot. How many of those are real? I don't know, but yeah, is it like you put down a $5, you know, placeholder? The Tesla model, you know, 100 bucks.

I mean, I believe that there are that many people that would be willing to pay. For sure, for sure. I mean, like, just look at demand for luxury apartments in tier one American cities. There's so much international demand. And that's just to have an asset in America that feels more durable than something in your country.

In your local currency. Local currency, exactly. So the number seems staggering, but also maybe believable. We'll have to dig into where it goes from this. We can read into this article more, but I thought it was an interesting headline. Yeah, apparently there's 59 million millionaires. Many of those wouldn't be able to just, you know,

slam five million down for a gold card, but many of them I'm sure would be able to. There's also an interesting article in the Financial Times today breaking down the weapons that are being used. Obviously we know some defense tech founders that are playing in this world generally mostly on the smaller drone side but the Financial Times has a good breakdown showing the different missile types of systems. There's ballistic missiles, cruise missiles,

and then UAVs, and you can kind of see the different arcs that they take. We were talking about this with regard to hypersonics, but Iran has four different kind of ranges and different classes of ICBMs that they've been sending over. One is the Hajj Qassem, solid propellant missile named after the IRGC commander, that's Qassem Soleimani,

who was assassinated by the United States in 2020 there and immortalizing him in the name of this rocket. It has a maneuverable warhead and according to Iran, was used Saturday night and might have struck the Haifa refinery. There's the Fata 1, theorum shara and the Ahmad and there's a few different chain the trade-offs between range and payload and It'll be interesting to talk to some defense tech founders over the next few weeks about interesting what's actually on the ground and then how do

You counter this stuff an interesting electronic? warfare or propaganda happening right now. Apparently, the satellite signal for Iran's state-run television channel has been hacked. So every channel is now playing anti-regime messaging, which are calling for freedom and revolution against the regime. So interesting side of the party.

I think that's the biggest question to answer, is how popular is the actual, how popular is the current regime? Because there's obviously, it's very advantageous to someone who's attacking, if I'm attacking your country, I'm gonna say, Jordy's really unpopular. Everyone who says Jordy's popular is lying.

And you never really know But something that shows that there is at least enough. We gotta get Shervin on the show. Yeah. Oh, yeah, that'd be great he he's According to X very excited to be to be able to go home Yeah, he wants to go home and there's a lot of folks that are in that in that camp the other news, Musk's XAI nears a $9.3 billion fundraising. You highlighted this later on the show yesterday. Investors shrug off White House spat. Makes sense.

They're closing $9.3 billion in debt and equity. And the burn rate is over a billion dollars a month, right? Yeah. I think that was the stat. Burn in a B. Investors have placed orders on more than $5 billion in a bond and loan offer and giving the company's bankers at Morgan Stanley confidence that they

can finalize the financing round. I know the bankers are on this too. So Tesla is down 5% in the last month. Is that the number that you would think if this is a fan? No, the narrative would be it's 75% down like based on the news and like the drama I don't think many people could pull this off though if you're a you know series C founder don't make wild accusations about the president yeah expect you know a little bit of a hit a bit bigger hit than than you know

five percent yeah yeah it's wild well people know naturally aspirated v12 is coming in the next Tesla they're moving on there this is if they can if they can do that this is a 10 trillion dollars I think maybe a hundred trillion dollar stock maybe even bigger they can why not really hit the right engine why not one quad yeah one quad let's do it must company told investors that it also expects to complete a four4.3 billion equity raise alongside the debt package, giving it the firepower to build the data centers it needs to expand.

It is competing with OpenAI, Anthropic, Google, and others to develop and commercialize AI tools. Musk's group launched Chatbot Grok as an irreverent alternative to ChatGPT and Google's Gemini, claiming that it would seek truth rather than a politically correct narrative. Musk combined XAI with his social media company X in March in a deal that valued the combined entity at $113 billion.

That's up there. TPG's in the deal, there's a couple other folks in the deal. Anyway, let's move on to some timeline. What's going on in the timeline? Let's cover it. Get into it. I think we should go deeper. What's going on in the timeline? Let's get into it. I think we should go deeper on what's going on at Warner Brothers because this is an

interesting story that we didn't really get to. Somewhat in the tech in the tech world because of course they interface with Netflix. Former Fang, current Fang I guess, but Fang has just fallen out of style. But the news today that's driving the the story is Warners the chief executive David Zaslav will take a pay cut after the company splits And so the news is that Zaslav could receive over 150 million dollars in stock by exercising options if share price targets are met post split Gunnar Winden Weidenfels will become the CEO of the Cable Networks company receiving a 15 million

stock and options grant and so we'll go into this into this split. The new pay package goes into effect only if the split happens by the end of 2026. We need a polymarket on this to be tracking it but Zaslav already received options for nearly 21 million shares last week the underlying stock was valued at more than 200 million at the time the board gave priority to retaining Zaslav and giving him strong incentives by tying pay to performance. He will head the streaming and studios business after the split and is often he's often one of the highest paid CEOs in the S&P 500s. Last year he received a pay package of 51.9 million.

Up there with Tim Cook, pretty big. Pretty big. Feeling criticism amongst shareholders. Yeah, a lot of folks have been kind of saying that his strategy has been misdirected. A lot of focus on the brand, which we'll go into with the HBO stuff, but interesting to see how this dynamic's playing out. At the new company he would keep his three million

dollars a year in salary his target bonus would fall to six million with a cap of 12 million from a target of 22 million and a payout of 24 million last year. The contract promises Zaslav a target of 15.5 million in equity awards the first year and seven and a half million annually that. The amount could rise or fall with performance. He's gonna invest. And they kinda go into the, this is like an incredible amount of detail, but I guess they had to share this with the board,

and so it's in the journal now. I'm kind of interested in like how this actually plays out. But anyway, I don't know, we could do a little bit of a backstory on Warner Brothers' discovery to kind of set things up to take us up to speed. I mean, it's a really, really old company. Literally started by brothers, like Harry, Albert, Sam,

Jack Warner began screening motion pictures in mining towns across Ohio and Pennsylvania in 1903. Wow. You don't see many brothers companies anymore. We've completely lost the user last name as the name of the company. Yeah. Meme, that's completely gone.

I do think Chris Amidon is bringing this back. Oh, he's doing it? Amidon Heavy Industries. Oh, there you go. That's good. I like that. But so that's a good start. I do think that could be the next meta, because it allows

you to quickly, you know, it attaches some meaning. Yep. As an investor, it's like, I want to invest in the company that the founder attaches their name to, right? Yep. I'm putting it all online. I'm not just going to dip on this company,

because then what I'm going to do is start another company. Oh, yeah, that'm putting it all online. What's I'm not just gonna like dip on this company because then we're like, oh, yeah That company named after me, you know fail. Yeah, exactly Yeah, it's good I think it could could become a meme just like the the browser company of San Francisco or new of New York and the compute Company of San Francisco and American manufacturing company of America like there's a whole bunch of those And and and and we're maybe reaching the end of that meta and a new meta shall emerge. That meta is over.

You think so? Do not name yourself the blank. The media company of Hollywood. The media company of Hollywood, although you did throw that out at one point as a good name for a C Corp. It'd be disrespectful to the folks who are actually using that name.

So in 1923, not far from here in Hollywood, California, they incorporated Warner Brothers Pictures in 1923. So they were grinding for 20 years, just showing motion pictures in mining towns, just showing up to some mining town in Ohio or Pennsylvania and saying, you guys want to see a movie? You guys like Flix? Yeah. There's like not even incorporated really as like a proper company 1927 they released the jazz singer popularizes the synchronized sound

talkies this was the the generative AI the vo3 moment of the day when you could hear sound synchronized with the with the. And this propelled them to major player status. And then you jump forward, 40 years, 1967, Jack Warner sells his remaining shares, Seven Arts by the studio, and the firm is briefly renamed Warner Brothers Seven Arts. In the next three years, parking and services conglomerate Kinley National acquires Warner Brothers.

It just like changed hands a bunch. The Discovery Channel launches in 1985. In 1990, there's a $14 billion merger of Time incorporated with Warner. This creates Time Warner. And we're going to get to Time Warner in 1996 acquires Turner Broadcasting Systems, Ted Turner's company. That's CNN, TNTNT and Cartoon Network for 7.6 7.5 billion and so now it has a cable portfolio and then in the dot-com boom

You got to get in the internet action and of course you get to America online Announces it it closed a hundred and one of the best of all time. It really is a great name America online. Yeah, fantastic. And I think I think the I think that the IP Is like kind of floating around it's like the n-run IP you can just like like a well calm still exists But but like does it really exist? Yeah So I mean this was the I think this is the biggest merger of all time. I go to a wall calm I got a ramp ad. Oh, yeah. So that's cool.

Well, time is money. Save both. Easy to use corporate cards, bill payments, accounting and a whole lot more all in one place. Go to ramp.com. The official corporate card of the golden retriever. Exactly. So AOL announces a $165 billion merger with Time Warner, forming AOL Time Warner, later judged

one of the least successful mega deals in US history. Over the next 10 years, the early 2000s, AOL has dropped from the corporate name. Time Warner ultimately spins AOL off as a standalone company. In 2018, Discovery Communication closes its $14.6 billion purchase of Scripps Network Interactive for HGTV

and Food Network rebrands Discovery Inc. So they have like a package of cable assets there. Warner Brothers, so in 2018, AT&T completes its $85 billion takeover of Time Warner and renames its division Warner Media. And so Comcast has Universal and AT&T has Time Warner and kind of like the pipes of distribution are also owning the networks of distribution which also own the shows, which own the content

and this is the nature of the TV media era, basically pre-internet. We haven't seen this with the nature of the of the the the TV media era. Yeah, basically pre Pre-internet we haven't seen this with the social networks that much We've seen like a couple big deals from like Spotify, you know doing like one-offs But there there aren't as many like okay the social the social network bought Like a creator organization that's operating on top of it. It just doesn't really happen But maybe in the future who knows? in 2020 WarnerMedia debuts direct-to-consumer streaming service HBO Max in the United States and HBO has a fascinating history, too Disney at one point bought

Maker Studios. Yep. You remember that for for did that go? Do you remember that for almost 700 million? I wonder if they kept pumping stuff, because it feels like the core Disney IP portfolio is what's so valuable. Maker at one point had tens of thousands of creators. And I don't know if. This is a true network. I wonder if they were thinking about it, like the new,

what's that farm team that Disney has, where Justin Timberlake came up from, and Britney Spears was part of it, it was like Mouseketeers. What's that farm team that Disney has where they, where Justin Timberlake came up from and Britney Spears was part of it, it was like Mouseketeers, are you familiar with this? I don't even know. There was some sort of child actor farm team that Disney had for a while.

They would put different child actors on for little bits to audition and they'd get some screen time but it wouldn't be like they're starring in their own show. And if they did well, they would wind up getting music deals and movie deals and kind of rolling from there. So I could imagine them thinking about that as being like a, like an arm into the next generation of talent, but unclear if they actually do that.

So Maker Studios was absorbed by Disney digital network in 2017 this was a couple years after the acquisition and It effectively is no longer operating so not under on be interesting to talk to them and get the post-mortem see what they're up to now So yeah HBO Max AT&T agrees to spin off WarnerMedia. These assets change hands so much, but they merged with Discovery in a $43 billion reverse Morris Trust transaction. Discovery CEO David Zaslav is tapped to run the combined entity.

This is in 2021. Deal closes. Warner Brothers, Discovery, or everyone calls it WBD, begins trading on NASDAQ under the ticker WBD. They consolidate HBO Max and Discovery in 2023 into a single streaming platform branded Max. And then responding to brand recognition concerns in 2025, this is May 14th,

Warner Brothers Discovery announces Max will revert to the HBO Max name in summer of 2025. And that was like, everyone was saying it's a massive L to what dropped the HBO brand name because they've spent decades building HBO home box office like the Sopranos sex in the city you used to mean something on don't mean something it meant it meant good for quality quality television yeah and you turn it on you're gonna get movie quality content the entire time and they built that it was such a premium brand and then they

just like yeah we're not gonna use it, it was such a premium brand. And then they just were like, yeah, we're not gonna use it anymore. It was a mess. I mean, there is the counterfactual, which is like, they wanted to put discovery assets on an app. And so if they put that on HBO, and all of a sudden you're going to HBO

and seeing like home and garden content, or I don't know exactly what's on Discovery these days, but food network, you might be like, ah, this doesn't feel like HBO. It's like diluting the HBO brand, but still it was a little bit of a mess. And so facing debt and strategic pressures, Warner Brothers Discovery unveils a plan

to split the two publicly traded companies into two publicly traded companies by mid-2026. Streaming in studios will be headed by Zaslav, and global networks will be headed by CFO Gunnar Weidenfelds. And so this was the big news last week, June 9th or the week before. Yep. They're gonna split into two different companies.

There will be global networks, which will be home to CNN, TNT, TBS, and Warner's, dozens of cable channels, as well as international holdings. Global networks will hold 20% stake in the second entity, which Warner is referring to as streaming in studios, which they're gonna give a different name to, and it plans to use earnings from that stake

to pay off debt. And so it's still a little bit of kiretsu happening, but they are drifting apart. I mean, it'll be interesting to see how these two entities trade once they're independent, right? There could be more of a growth story around HBO Max. If they continue to want to compete with Apple and Netflix and the many other players, Prime, et cetera,

the cable division will, it's hard to see what the long-term growth story there, but I'm sure they'll continue to find a way to make money. I mean, the weird thing about this is that, like, the Wall Street Journal has this little infographic about what's in global networks and what's in streaming studios. And in global networks, it's Bleacher Report,

cable channels, CNN's plan streaming service, that's I believe CNN, oh yeah, they're not calling it, is it, was that ESPN, where they're pro streaming services, just called ESPN, what is CNN gonna do? Are they gonna do CNN plus? This is the chart, Jordy. So global networks has Discovery Plus, which I believe is a streaming service.

And then Streaming and Studios has HBO, in addition to HBO Max, I believe HBO is just a channel because they're still selling HBO to cable subscribers as a premium channel. And so even though they are like separating these things out based on whether or not it's streaming or a cable network, it's really more of like a separation around the brands and the IP.

And what I'm seeing is that CNN and Discovery are more like news, reality TV, more ephemeral, less durable franchises, less long lived IP. And over in streaming services, I'm seeing DC, you have Superman, Batman, HBO, there are real assets, Westworld, and Sopranos, and Game of Thrones, right? Like Game of Thrones could become its own whole world and they do more spin-offs and more movies and stuff.

And so it feels more like they divided it along IP lines than really along like technology and distribution lines, but I don't know. Yeah. We'll see. We'll see. We are empowering these iconic brands with the sharper focus and strategic flexibility. technology and distribution lines, but I don't know. Yeah. We'll see. We'll see. We'll see. We are empowering these iconic brands

with the sharper focus and strategic flexibility. They need to compete most effectively in today's evolving media landscape, Zaslav said in a statement. Riveting. Zaslav is under increasing pressure to boost the company's sagging stock price, which before Monday had dropped about 59% since the company was created

from the merger of AT&T's Warner Media and Discovery Communications. Shares closed down 3% Monday. S&P global ratings, friend of the show, downgraded Warner's debt to junk status earlier this month. It's really such a dig that they just have, you know, it's like, it's kind of like how if you're in school, you know, it goes like A, B, C, D,

and then they skip E and just do F, right? It's like they needed to give you that extra, like you did really bad. And so, as they could just do like triple A debt, double A debt, A, B, C, D, E, F, G, H, I, they could have it be much more, you know, random or just just linear. Instead, it's like you go from AAA, sounds amazing,

sounds really safe, like I'm not gonna lose my money in AAA, and then junk sounds extremely risky to me. Junk. Anyway, they're going into his pay package again. Significant portion of Warner's roughly $34 billion of debt will live on the balance sheet of global networks, which currently generates more revenue and has stronger cash flow than streaming in the studio. So maybe this is more of like a CFO play, figuring out the finances, kind of like

the reverse version of what X and XAI did. Warner said it secured a $17.5 billion bridge loan from JP Morgan to buy back a chunk of its debt. Yeah, if you're, this is the big leagues. You from JP Morgan to buy back a chunk of its debt. Yeah, this is the big leagues. You don't go to that VC for, oh, I need $2 million bridge loan to get me to series A. You go to JP Morgan and ask for 18 bill. Yeah, it is interesting.

People love to poke fun over the HBO Max, and Max now back to HBO Max over the last few years. But if you actually look at the full corporate history of these assets, it's always been constantly renaming, changing things around, et cetera. So in many ways, it's just a continuation of decades of rebrands and restructuring and mergers and reverse mergers.

Lots of fodder for the journal, maybe. That's what we're here for. My key issue is getting rehearsal renewed for another eight seasons. For sure. 10 seasons. Yeah, that's so good. I don't know how you top flying a commercial aircraft. He has been like changing the direction of that. Maybe. Oh, here's how it goes full circle.

So Nathan Fielder becomes the CEO of HBO Max. Or the CFI. Yeah, he gets the CPI. And he actually convinces management and gets sort of a critical mass of shareholders aligned to become just to sort of sell off all the legacy IP and just focus on him. And really just become a personality-led media company

that's just centered around Nathan Fielder. And maybe they could go into consulting. You could see other media companies, like Netflix coming to Nathan Fielder saying How do we you know, we already have subscribers in every household in America, how do we grow? and um, you know, I imagine he'd have some wild ideas around around how to Catalyze, uh growth. Yeah, I like that. He's been able to

basically like Do be incredibly impactful at a global scale like as a bit He's like wouldn't it be funny if we fixed serious problems with the FAA And then he like goes and like kind of makes it funny but mostly is just actually doing like investigative journalism and like a documentary about Aircraft safety and yes, there's like a layer of comedy over it, but mostly it's just like impactful work and insightful analysis. And yes, I would love to see him do that

at Warner Brothers Discovery come in and as a bit, just make it a high performing growth stock. Give it a growth story. In your face of investors. Yeah, I mean, he could potentially double, he could potentially double HBO Max's revenue. You remember when he did this gas rebate? Yes, yes.

It was $1.75 gas, but you had to take the rebate up a mountain. So he could do something like that with HBO Max, which is, you can actually, we'll give you a, you have to sign up for $50 a month. But once you've been a member for a few months, if you hike up Mount Everest and you actually put this rebate in the box, it will offer you a free subscription.

And so there could be a lot of different strategies I could see him rolling out. I'd be more interested in his investor relations strategy as CEO. I want to see him like, as a joke, go to Sun Valley. As a joke, go on Squawk Box regularly. As a joke, tell a really convincing story during earnings that excites retail.

Turn it into a meme stock as a joke. Yeah, he could do something like, blow out the shorts. He could live stream and day trade with the company balance sheet as a way to kind of just drive retail engagement. Yes, yes, yes. I think you've got to put him in the boardroom at this point.

Put him in the boardroom. For sure. He deserves a board seat after the rehearsal. We should buy, since apparently after the whole Tesla pay CEO compensation saga, if you own like seven shares of a company, you could sue. So it's possible we could buy some shares of Warner Brothers and start, or sorry, HBO Max,

and start actually lobbying to get Nathan in the boardroom. I've been saying this for our buddies who wind up selling companies to public companies, and we always tell them our advice for anyone who does some sort of like aquire, or like sells their company to a bigger company. Like your job is not to rest invest. Your job is to become the CEO, put the company back in founder mode. We're half joking,

but oftentimes the company that's acquiring you is acquiring you because they're not in founder mode. And you are, and you are more agentic and more aggressive and more creative. And so you should actually Try and get into the boardroom. You should actually try what the CEO that bought your company actually wants exactly And I very likely you know better than they do and I think we as we as we as friends should potentially Buy some shares in the acquiring company

Fire up a shareholder lawsuit and say hey hey, put our friend who you just acquired for a couple of mil in the boardroom. You got an MVP that's basically benched right now. Exactly. Because they're not in the boardroom. That's the perfect metaphor. Perfect metaphor. Well, speaking of MVPs, Ben Thompson,

MVP of Strutechery has a breakdown on his reaction to the news. He says he feels compelled to cover this because as much as he likes celebrating when he gets things right, he also needs to own his L's. And I'm taking a big one here. He says, I was very optimistic about the idea of combining Warner Brothers and Discovery.

And this is what I love about Ben. He's like, he really holds himself accountable. He gets a lot of things incredibly right. I mean, Nvidia and Meta, when they were down, he was laying out really, really detailed bull cases, but he does it in a way that's not, he doesn't issue like a buy rating, you know? He just walks through the strategy,

but he still holds himself accountable, even though he's like, you know, he's kind of like the opposite of Kramer. Like Kramer's like riffing, offering like buy and sell ratings like all the time. And then like, cause like, yeah, exactly. Cause he's just going, going, going on the daily basis. Uh, Ben's obviously much more detailed than his analysis. Uh, but then also revisits what he said before. So back when Warner Brothers and discovery were in the process of that merger,

Ben Thompson said there would be increasing bargaining power with MVPD providers. I think that's Netflix. I don't even know, do you know what MVPD stands for? This is like industry jargon. A streaming package that appealed to the entire household with a combination of prestige content and top notch filler. MVPD is multi-channel video programming distributor

which is traditional okay TV providers like cable satellite fiber optic got it okay so so so if they if they go to Comcast and say hey in the bundle that you're offering to Comcast subscribers yeah you know there's usually like the base here the premium tier and then like every channel possible and like sports package. Yeah. They would have leverage to say, we want you to push HBO harder and get the upsell for that and give us more of that because we otherwise you don't get, you know, discovery reality TV shows or something like that, theoretically. And so yeah, that's what he's saying, is that the streaming package could appeal to the entire household,

because you get the prestige content, Game of Thrones on the weekends, but then you also get filler content, which he calls his affectionate term for discovery style reality shows. And so I don't actually know what the top, what the top discovery reality shows are, because there's so many different ones.

And I know Bravo, I believe is owned by NBC and they have a whole bunch of reality shows. I'd love to know what Discovery is working with, but there's clearly stuff on HGTV and other Discovery channels. I imagine they do, doesn't Discovery do like Shark Week? Isn't that the big one? I imagine like that's a Discovery thing.

I don't know, they have so many. Yeah, they have Deadliest Catch, Mythbusters, Alaskan Bush People. I haven't heard about that have so many. Yeah, they have Deadliest Catch, Mythbusters, that's classic. Alaskan Bush people. I haven't heard about that one. Dirty Jobs. Dirty Jobs might grow, okay. Yeah, so that kind of content is something

that you'd be putting on the background. Naked and afraid. Never heard of that, not interested. That's where, no, no, no. It's not as bad as it sounds. It's contestants are dropped into remote wilderness locations with no clothes, no clothes, no, no, no. It's not as bad as it sounds. Contestants are dropped into remote wilderness locations with no clothes, no clothes, no water, and must survive for 21 days.

This would be great if we could get venture capitalists to do it. I think they could, it's a high risk move for them to say, I'm going to take my August instead of going to Europe. I'm going to be dropped into the Alaskan wilderness and forced to survive for 21 days on camera. But they have some grit coming out of that.

They have some grit and some credibility to be able to say, I've pushed through. I've faced the darkness. I'm in the trenches. I'm in the trenches with you. You might be in a literal trench, muddy and naked and afraid. Anyway, Ben Thompson also laid out Reason for Optimism,

a better advertising offering that extended across linear TV and streaming. But he says his biggest mistake in his analysis, which was not properly accounting for the debt, which the new Warner Brothers discovery was taking on, a mistake that was greatly amplified by the significant rise in interest rates that occurred over the past few years.

Interesting. Although Warner Brothers' discovery of debt is still fairly cheap and is going down, S&P Global downgraded them to junk, thanks in large part to declining linear TV revenues. Interesting. It's important to acknowledge, however, that my reasons for optimism were overstated as well.

First, there were serious questions about WBD's MVPD leverage going forward, particularly now that TNT has lost the NBA. Second, there's no evidence that Max's breath does anything to mitigate chart mitigate churn, which remains among the highest of any of the streaming services. Is that just because it's so expensive? And it's like, either there's a takeover the world moment with the Game of Thrones, like you

got to be subscribed or else it's like, nah, I can skip it. I feel like HBO is something that like once a year, I'm open for a few days. They don't have it in them to slop it up. Yeah, I'm not like going to a concert. Netflix is down to slop. They're down to just throw mud at the wall. I mean, although I can never watch Netflix,

I don't even have it installed because like I just don't, there's very little stuff on there. Really? Like you can't get to Netflix on your TV? No. Wow. I can't get to Netflix on your TV? No. Wow. I can't get to it on my phone either.

The last one. Hey, Netflix. No. I got a guy for you. To be clear, I pay. They're going to be banging on the door? OK, OK. I pay for it.

And I'm probably on the most premium tier. Very un-American to not support a great American tech company like Netflix. So unlike you, I do enjoy the current thing when it comes to cinema and television, but it needs to be take over the world, everyone is talking about it, and then I watch it. So White Lotus, the last thing I watched on Netflix

was Squid Game, season one. Really? Yeah, because it was like so important to see it and everyone, and it was good, I liked it. But like, what was the biggest show on Netflix this year so far? Like it's all just background TV to me. I feel like I mean I guess f1 Drive to survive is pretty good But I just haven't had a chance though. Yeah, but even drive to survive

I don't I would be fascinated to understand their viewership in Late in these later seasons for some of the initial ones. Yeah, you know what they should do? They should have it designed to survive. Kind of some Figma SponCon on Netflix, all about designers fighting for their lives. Mobile app, enterprise, SaaS. Exactly, go to figma.com, think bigger, build faster.

Figma helps design and develop teams. Build great products together. Dylan, consider it. Absolutely. Designed to survive. figment helps design and develop here build great products together and Consider absolutely designed to survive If we don't increase the conversion rate on this button by five percent we get thrown into this pit of sharks Yeah, yeah, yeah, and then you would be this pit of snakes That's actually not the steak with drives to survive like like the stakes It's not just like all like you know, but I would like deals. I would yeah, it would be like, oh who's poaching who? Yeah, oh this person coinbase coin reach out each out one of oh, yeah

We know we we know the story the US Army's designers. Yes, and yeah They're pulling them in that is trying to pull designers in, it's a hot market. Meta just offered $200 million. No. Or too much. The number's 100 and that's not confirmed, by the way. It's not confirmed. Speculation. Yeah, and then of course they dropped the HBO name

and they went back and forth on that. There was a funny thing. Compare that to Netflix. Certainly the streaming service is investing tons of money in having differentiated content with a long-term goal, and by extension, the ultimate value proposition for consumers is offering something for everyone all of the time, to be TV, in other words,

but freed from the constraints of geography and time. One subscribes to Netflix not to get a particular show, but simply because that is what one does. Just as one once subscribed to cable. Can you see the difference? Just think of the tagline. It's not TV, it's HBO. That's not simply a slogan.

At least it wasn't, but it will be if AT&T sees the brand's ultimate value as a consumer front end for a de facto Netflix competitor, that is to say TV. More broadly, if my interpretation of these comments is correct and AT&T plans to build a streaming service to rival Netflix, well first good luck and second that is quite a bit higher level of ambition for the Time Warner acquisition than I anticipated was what he said. Okay, maybe I can take the W on this analysis. He says it holds up pretty well. In the end, the mistake was not so much about combining Warner Brothers and Discovery as it was trying to take pretty well in the end the mistake was not so much about

combining Warner Brothers and Discovery as it was trying to take on Netflix in the first place my instincts were right about that I just wish I'd stayed anchored on that point all the way through and if you look at the I saw somebody being like oh whatever happened to Fang we I think we covered this in the show and it's like it was like why was Netflix ever in Fang it was kind of a good question because like Netflix doesn't have the same just intense power of the hyperscalers and the other trillion dollar tech companies, but you look at the stock chart

and yeah, it went way, way down for a little bit, but it's back up and it's been on absolute tear and for a long time, it was the best performing stock in the stock market and I think it's been on absolute terror and for a long time It was the best performing stock in the stock market And I think it's up like millions of percent or something like that like the numbers are insane is trading at a 57x Earnings yeah, what's the market cap? 520 billion not bad half a trillion like that's pretty pretty big for something that, the narrative was like, it's just a streaming service, so it's not as dominant as Google,

which has the Google search and YouTube, which competes with Netflix and the cloud platform, or Apple, which is the iPhone, and it's the gate to Netflix, like, or Tesla with the car and the humanoids and the self-driving and all this different stuff. Netflix was always just an app that you watch stuff on and there were a lot of them for a while and so there was a question about like

how solid would their lead be long-term? But they have solidified it anyway. Hopefully they're on Vanta, automated compliance, manage risk, prove trust continuously. Vanta's trust management platform takes the work out of your security and compliance process and replaces it with continuous automation whether you're pursuing your first framework or managing a complex program get on there intercom is on there and you know

I said intercom because Spec sponsors are reaching out to own and intercom no way and so I Highly doubt he would entertain any of that it seemed like a sort of boilerplate email that they were just blasting out We did he did he post this he posted he said we are so effing back And he posted a screenshot and Anyways, I'm sure you know part of being ready to get spacked at any time You got to get on Vanta got to get spacked at any time, you gotta get on Vanta, you gotta get your compliance dialed.

Gotta do it. And so, Buco Capital bloke, this was actually two years ago, back in 2023, he talks about Warner Brothers discovery and talks to license HBO original series to Netflix, Zaslav strikes again, corporate financial decisions won out, selling the future for money today. The HBO streamings, a walled garden is coming down it seems. You

can already watch HBO on Hulu somehow, you can like pay through Hulu and so that's been a thing for a while. Hulu is a weird place. It's a weird place. Hulu is an odd story because there's like this crazy joint venture between all the different platforms and then eventually Disney acquired most of it but like it had like all sorts of content. Never been big into that whole world In a hugely surprising move

Deadline understands that Warner Brothers Discovery is shopping some of its HBO library titles to rival Netflix And this was kind of the Ben Thompson takeaway which was that? When you have a fixed priced asset it is often better to Auction that off to the highest bidder and not need to sell it to yourself in the form of your own streaming service. Which then if Max already has some of the highest churn of any of these subscription platforms and then you can get some of the best content from HBO on other platforms, what's going to keep people on HBO? Yeah. HBO Max. So it's a good question.

But the cash flow should flow directly to them, and it should be most efficient. Because whatever service can monetize it the best could potentially just pay them upfront for that. And again, yes, Netflix has a lot of original productions, Netflix originals and whatnot. But a lot of that is just stuff that they purchased right or purchase exclusive exclusive rights to

They're not necessarily producing everything there So Warner Brothers Discovery has been an absolute Roller coaster ride the stock was up at seventy five dollars a share in mid 2021 sort of a top tick of the ZerP era, and then the debt kicked in, and the streaming wars took off, and the rest is history. So the stock's been kind of languishing between 10 and 15 bucks for the last two years,

and hopefully they're on to greener pastures now. But whatever they're planning, if you're planning to manage a debt schedule, you're planning to manage a complex de-merger, you got to get on a linear. It's a purpose-built tool for planning and building products. Meet the system. They're building products, not reverse mergers. I am determined to use linear for everything.

Linear should eat everything. It should be the one-stop shop for any planning. It's very adaptable. You can do a lot with it. It's very adaptable. You can do a lot with it. It's a system from modern software development. You can streamline issues, projects, and product roadmaps, and they got linear for agents.

Of course, they could use it for the development of their streaming platform. They have software engineering to do, and linear's the perfect tool for them to do that. Hopefully your agents, your various agents are smart enough to ask, hey, I'd really appreciate, you know, I don't ask for much, but I'd like to be orchestrated on linear. If you could just get me on there. I just don't know why you're holding back

Zaslaw from getting a linear installation going to run his office day to day. Well, if they're, if they want to compete with Netflix and other, you know, the primes of the world, the hyperscalers, you know, on streaming and real technology, they should absolutely get on Linear Drugs. Anyway, there is this fascinating kind of like, I mean, it's a Nathan Fielder style stunt almost. So, Pierre Richelson, who's from cal.com, is fake suing a former employee.

Have you seen this whole thing? Have you dug into this, Geordi? This is a wild, wild thing. Yeah, I'm trying to figure it out. So it seemed really real, but then he posted this joke Google Doc that made it clear that it was a joke. He says, today we are suing Nizzi Abiy,

zero dot email in the court of Malefornia for secretly building an actual, an actually pretty good email client while getting paid by cal.com. Read the full case below and you can kind of dig into it. And, but it does seem weird because when you dig into it, it's like, uh, Amrit who's the founder says happy to announce I will be joining zero dot email as a full-time engineer came across this app some months ago, literally saw it grow up from day zero and and peer says that cal.com to zero pipeline is two for two and so two people have left Cal to go build this

new company that can be very rough that can be sometimes looked down upon to leave the organization to build something new but it seems like maybe it's good so Shams Twally says so I need to work on Cal first. And then Pierre says, well, the best people don't leave Cal, so it depends, are you good? And then Nizzi says, didn't cal.com want to acquire zero.email before I left? And then Pierre quote tweets that and says,

hey, Oreck at Grok, what happens if you build a new startup on a company device during work hours? peer quote tweet that and says, hey, Oreck at Grok, what happens if you build a new startup on company, on a company device during work hours? Which to me looked like he was serious. And Josh Sharotis says, ooh, shots fired. But then- They're just joshing around. It seems like they're just messing around, right?

The lawyer that submitted the complaint is named Chad Esquire. Love it. And the amount that they asked for is like $420,000 and 69 cents, something like that. But it's weird, it's this weird fake stunt to draw attention. It's working, it got my attention.

It was confusing. And you've wanted somebody to build an AI powered email. Maybe I'm gonna wind up checking this out. They got me. out they got me they definitely got me with all this nonsense but it really is like the new era of like you know content marketing and like going crazy like a fake lawsuit is what is the stakes now to break through you can't just say hey like you know this new company is going through but it seems like they went through YC and they

work together and they're probably friends. And I mean, that does happen all the time. That's always like the good ending when someone spins up. They say, hey, I was here for a while. I had a good experience, but I want to go build my own thing, and they get the blessing of the CEO. And usually the founder's like, well, angel invest or something like that.

So hopefully it really is that narrative. It's a little unclear, but I think that's part of the joke that's going on here. Anyway, whatever they wind up doing, they gotta get on Numeral, sales tax on autopilot, spend less than five minutes per month on sales tax compliance. Go to numeralhq.com.

Sales tax, AGI. Love it. Sam Altman's been on a podcast tour. He's firing shots at Elon Musk. He says, I didn't think Elon was going to abuse his power in the government to unfairly complete. I regret to say I was wrong about that. I genuinely thought he wasn't going to. I really, I think it's really unfortunate for the country that he would do these things. I wish Elon

would be less zero-sum or negative-sum. So the battle between the AGI Giga-Chads is raging still. Although it feels like maybe that like this is coming to a close. They now just have to duke it out in the app layer, win in the store. Is there that much more to do? If you remember, it felt like the big winner of the blow-up between Elon and Trump was Sam

and people that had bought a Tesla before Elon went crazy. So there were two winners coming out of that. So hopefully. But again, I'm sure there'll be more updates coming down the pipeline around the active lawsuit between both parties. Well, either way, they gotta get on Adio. Customer relationship magic.

Adio is the AI native CRM that builds scales and grows your company the next level Newcomer is on sub stack. He's an investor in sub stack. He's also leaking information about sub stack on sub stack It's the it's the pimp my ride of sub stack scoops He's the he's the exhibitimp My Ride of Substack Scoops. He's the exhibit, right? So he's generated $400,000 a year from newcomer paid subscriptions. He's paid Substack $50,000.

He sells his own sponsorships and Substack doesn't get a cut of that revenue. He also invested $5,000 in Substax crowdfunding round in 2023 as a show of support and he's a fair weather friend constantly agonizing about the huge chunk of subscription revenue that we fork over to Substack to friendly tech newsletters platformer and garbage day decamped from Substack over a year ago to Ghost and Beehive respectively executives from rival newsletter platforms like Beehive and Kit regularly try to get us

to consider jumping ship. Substack's app-oriented strategy has at times annoyed me as it sometimes asks newsletters to do that. Ultimately, he stayed. What's interesting is that now he got the scoop that Substack might be out raising new funding on the back of a bunch of growth. Scoop.

And so it's just a funny dynamic that is, it's just unique to the new era of these independent journalists. Like, newcomer really is a scoop machine. The thing I have to call out, and Eric should come on the show and talk about this dynamic, but he's generating,

he's netting $400,000 a year and paying sub-stack $50,000, fraction of that. They take like 10%, I guess, or I guess it's a little bit more, 12%. And this is the backbone of his business, which you would imagine being on Substack, I would guess, helps him generate an incremental $50,000 a year of revenue

and would probably pay for itself. Yeah, certainly. I mean, yeah, there's two ways to look at that cost. an incremental $50,000 a year revenue and would probably pay for itself? Yeah, certainly. I mean, yeah, there's two ways to look at that cost. One is, so if you went to a more DIY platform like Ghost that has a lot of the features, but you still have to customize it yourself and you're not getting the substack team of engineers

constantly releasing new products, well then you're probably gonna wind up paying someone maybe more than 50 K a year to, you know, enhance your ghost installation or like optimize it and get the most out of it. So there's like the cost side of that. You can probably do more and more now with AI and get more leverage out of a someone around 50 K, probably not right there,

but maybe a hundred K starts to get interesting. If he winds up paying substack You know two million in a few years. Maybe it makes more sense But this is kind of one of the interesting, you know problems that substack has to play ball with but they can probably Negotiate at a certain point because there is there is some element of like hey, you've gotten really big We'd love to keep you Why don't we give you a little bit discount on on our take rates that you don't? Question a balling effect though where all the top, you know creators which talk amongst themselves. I'm sure

Yeah, totally, but ultimately he says that he does get recommended. He gets a large number of free signups Yep, through recommendations though. That seems good. Those readers convert to paid subscribers at low rates. Anyways, interesting. It'll be interesting to see where Substacks new round gets priced. I wouldn't be surprised if it was fairly close to their peak valuation, but that would actually be great to see them kind of growing

into that, whatever their 2021 valuation was. I think it was like 750 million. 750? What's up there? They raised a Series B in April 28 of 2021 at 650 million. Pre or post? Probably post? Post.

OK. So they sold 10%. Oh, not bad. Yeah. Yeah. Yeah, I mean, the business seems to be like very much sustainable at this point. It seems like it's accidentally profitable. Remember that reporting in the information

and talking to Chris, it seems like things are going really well. Yeah, just, I guess there is this question of like, how can you quantify the impact of sub stacks features on growth? Yeah. Because, yeah, the question is like, they're driving free signups for newcomer,

but is it actually driving an incremental 50K in profit for him? Yeah, who knows? I mean, he's selling ads against the newsletter, which he's able to, he's monetizing those free subscribers, so. Yeah. Who knows? Who knows, who knows?

Promoted posts from public, we haven't done one of these in a while. We're hosting a private screening of one of the summer's most anticipated films, starring Brad Pitt, and set at 200 miles per hour. If you're a New York based public member, you can access the exclusive experience and be there on opening night, June 25th.

Reply Aston for your chance to win tickets. So if you are in New York and you're on public, reply Aston to this post and head over to the movie. Hit him up. It'll be great. Hit him up. Over in defense tech world, Anderol has partnered with Rheinmetall, the German defense tech

company, Leprime really, to manufacture Barracuda and Fury over there. That's very exciting. And then we also touched on Spotify founder Daniel Ack. Guess when Rheinmetall was founded. The way you're saying that makes me think it's like 1650. I'm putting you on the spot like putting on the spot like Tucker put yeah How can you possibly report on the news if you don't know when it was founded this is this is the best bit earlier

Yeah, you read it out Tucker do you know the muffin man? Muff Ted goes the muffin man the muffin man muffin man. No, I don't know him personally How can you know anything about Drury Lane if you've never met the Muffin Man, John? This is a post from Zach Stewart. This is a real gotcha. Really, really good.

Anyways, you can still, I give you permission to comment on Riemmental. Even though you don't know. 1889. I knew it was really old. 1889? Dusseldorf. OK, I was pretty far off with 1650, but over 100 years.

Yeah, that's the same, General Atomic is part of this roll-up and it came out of I think General Dynamics at some point and the company that, the founder of the company that competes with Fury for that autonomous program that they're competing for right now was like the designer of a submarine in the Civil War

or something like that. Like I'm pretty sure that he died more than 100 years before Palmer Lucky was born. That's the cultural difference between the two companies that are competing for this one contract. It's like a fascinating dynamic about how legacy they are. Like it's not just like 50s. If you're in the game for a while,

decades after you start the company, your greatest enemy will be born. And then they'll have to grow up a little bit, they'll have to learn the game, and then they're gonna come for you. Wild. So yeah, Spotify founder, Daniel Eck, is leading a $600 million funding round

into the German defense startup, Helsing. This is kind of more of an Anderil equivalent over in Europe, valuing that four-year-old company at 12 billion the business makes battlefield AI drone submarines and robo fighter pilots it's now one of Europe's most valuable startups and They're using some renders here John renders image their render maxing their render Happens is a cool render. Yeah, look at the water there. It's definitely a render.

Who knows? It's hard to tell these days. It's so, we're beyond the uncanny valley. And so, Helsing is expanding from its origins in artificial intelligence to produce its own drones, aircraft and submarines as part of a bigger push for locally made and owned defense products for European countries and really companies all over the world.

Crazy. It was founded in 2021 by Torsten Reil, a video game entrepreneur, Gunbert Scherff, a former German defense ministry official, and Nicholas Kohler, an AI researcher. And they have partnerships with Saab already, as well as Mistral. Yeah, and tons of American venture capitalists in the deal. You got Lightspeed, Excel, and General Catalyst.

Connors cooking. They've raised over $1.37 billion. Connor's cooking. They've raised over 1.37 billion. Daniel X said, the world is being tested in more ways than ever before. That has sped up the timeline for Helsing's financing. X said, pointing in particular to the conflict between Russia and Ukraine, where drones

and other AI-powered systems have been deployed at scale for the first time. There's an enormous realization that it is now really AI mass and autonomy that is driving the new battlefield. And so, yeah, exciting, exciting deal. If they want to get more attention, want to do some hiring, they should get on AdQuick, out of home advertising made easy and measurable.

Say goodbye to the headaches of out of home advertising. Only AdQuick combines technology, out of home expertise and data to enable efficient, seamless ad buying across the globe. They make it just about as easy as launching a campaign on Meta or any other ad platform. I love it. Get over there, check it out, adquick.com.

We have David Senra coming in the studio in just a minute. In the meantime, if you're looking to go deeper in AI, there's AI startup school has been going on for the last two days up at Y Combinator and Andre Carpathy gave a banger talk and Swicks friend of the show grabbed pictures of every slide from his talk and reconstituted it into a full, into a full, like slide deck so you can go and read the full talk if you want and so go check that out on Leighton.space

if you're interested. And we have David Sentra in the studio. How you doing David? ["The Star-Spangled Banner"] Brother, welcome to the show. Now I can hear you, what's going on? What's going on? I can hear you.

It's great to see you. How much, how are you guys? Great to see you again. Long time hear you. What's going on? Well, it's going on. I can hear you. It's great to see you. How much, how are you guys? Great to see you again. Long time no talk. Long time no talk. Did we talk yesterday or the day before? Yeah, yesterday. It sounds like that.

Always. It's too long. I need every few hours. Yeah. Yeah, honestly, between the show and then the hour that we typically talk with you afterward, at some point we should just start streaming it live, get up to five hours a day.

This scratches the itch a little bit. Yeah. You guys haven't announced our month long extreme podcasting summit in Malibu yet. I was gonna wonder if you wanted to talk about that. I'm super down to talk about it. I've been inviting other podcasts. I was like, you need to fly out.

It's gonna be the summer of podcasting. The entire month. Rob. No, you have to have a podcast to go. Yeah, the summer of extreme podcasting in Malibu, California. I want to create the center for extreme podcasting. I think we're gonna tip it in Malibu though.

Oh yeah? With the people that are coming, yeah, for sure. The weather in Malibu. It's a lot better, come on, no one's like, hey, come visit Austin in the summer We need a fresh start. We need a fresh start. Yeah, you know There's something about the mothership where like I think austin works because you need to have like all the cross-pollination kiltonian random people coming in

Malibu's for monk mode podcasting Yeah, but it's for yeah, if you're a comedian and you're friends with Joe Rogan, yeah, obviously you moved to Austin. I swear you're really good for your career. But that doesn't apply to us, so. Yeah, there's been a good crew amassing out there. Break it down for us, what's top of mind for you? Before, I have something, so James from Profound

announced their round today. He's coming on the show later today David and I are both investors in profound They announced a 20 million dollar series a led by Kleiner with participation from Nvidia saga South Park Commons and SV angel and Of course, it's hilarious. It's hilarious the lineup of Vessar and it's like Jordy and David. Yeah. Yeah.

It's Guillermo from Versel, Jordy and David, and Jordan Singer, a friend of mine, snuck in there as well. So stacked. They're building an answer engine, helping teams optimize. But we'll get into that later. But maybe we'll break down. Actually, there's a perfect

like ramp crossover. I don't know if you guys have heard of this little company called ramp. Heard of them. But so I was actually in New York with James yesterday. And every time the last few times I go there for a few weeks and the last few times I've been there, I've made sure to like spend time with him, James Perpo Frayland.

And there's actually a funny way that I met him. So, Kareem, obviously co-founder and CTO of Ramp, is a good friend of mine. And the reason I think that Kareem is such a great founder is because he has this divine discontent with everything that he does. So, nothing's ever good enough. The product's not good enough. The go-to-market's not good enough. The sales isn't good enough like everything can be improved. And I was at dinner at his house like, I don't know, maybe like two months ago. And this was going on and on about all the things that like need to be improved and things that he thought like he hated or whatever. And I was like, all right, enough of this. Tell me like what you actually like, like who are the

founders of the products that you think are great? And one of them was Profound and James. And so I went up looking James up on Twitter and I found that he followed me. And so I actually followed him back and then we went up DMing and I was like, hey, are you in New York? He's like, yeah, I was like, I'll be there tomorrow. He's like, come by the office.

And so yeah, I just thought it was hilarious that, Kareem, his bar for excellence is excessively high for people and products. And James of Profound have exceeded that. So that's actually how I met James and why I was invited to invest in that round. Awesome. Awesome. Should we move on to Jimmy? Let's talk Jimmy. Break it down for us.

How did you originally land on Jimmy Iveen as someone to profile? That's a question I had for you guys, because you guys both grew up or like lived in LA for a long time. So my interpretation of Jimmy Iveen is like every single person in the music business knows who he is, but the average person doesn't. Were you guys familiar with him at all? Yeah, I was loosely through.

But I think part of it when I actually think back, it's like the tech angle, beats, and Apple is probably my out about it but also like reading stories about Dr. Dre because I was a fan and kind of like the the Interscope mafia like that was that was in the news when dr. Dre was like the one of the leading artists at that time so Jimmy I'veine is easily like top three people that I wanna meet. And when people ask me like out of all the living entrepreneurs

who you wanna meet, that usually wanna say that the surprising, many people don't know him. I've been fortunate enough to have dinner with two people. One was mentored by Jimmy and worked with him for a very long time. Another person competed directly with him. And the way that people speak about him,

there's like an unbelievable level of respect and just the guy is unbelievably driven, really like relentless. And one of my favorite documentaries, so like you know this because I read the same books over and over again, I like read the same quotes over and over again, but I also watch the same documentaries over and over again. And so my favorite documentaries to the last dance, obviously you see what comes up when I text you guys. It's Jordan from The Last Dance. But the second one would be The Defiant Ones, which I probably watched at least 10 times. And everybody's like, oh, what's the documentary about? And if you go and like look it up, it'll say, oh, it's about

the long-term friendship and partnership between Jimmy Iveen and Dr. Dre that goes back, you know, three decades. It's like, yeah, it's about that. But really, it's a documentary about entrepreneurship. This is like, if you think of founder mentality, think of like the way entrepreneurs think, the way they act. It's like in that documentary. And I've been wanting to do an episode on him forever, but there's just not, there's no books about him. He's never written an autobiography or anything like that.

So I was like, you know what? Fuck it. I'm just going to watch the documentary again. I'm going to take notes on the documentary and build an outline just like I would for a normal episode. And then I found every single good interview he'd ever done and then transcribe that and then essentially combined all that to use that as like my own book. But I think it's I'm really interested in these people that are not well known to like the general population, but everybody in their industry. There's a great line from Warren Buffett where

he's like, hey, if you want to learn about an industry, he's like interview every single like top CEO, top executive in the industry. You might have to talk to 20 different companies. And then you always ask him like if you had to eliminate one of your competitors, I think he uses the example, like if I gave you a gun and you only had one bullet and you could take out any of your competitors, who would it be? And he's like, and Warren's point is like, that's all you're going to ask all these people usually they're going to arrive at the same question. He goes, that's the guy. That's the guy in his case, you should invest in. Jimmy is very much so that in the music industry. And I just find

his I mean, there's there's a line in he's been like really good friends with Bruce Springsteen for like, I don't know, six decades, five decades, something like that. And there's a line that's in the documentary. It's also in Bruce Springsteen's book, where Bruce was talking about and Jimmy has this mentality. He was like, I didn't want to be rich. I didn't want to be famous. I didn't want to be happy. I wanted to be great.

And I think that's what really attracts me to Jimmy I've been in particular, people like him is just this relentless drive where he started out with nothing. He started sweeping the floor in a recording studio to working with John Lennon, Bruce Springsteen, Tom Petty, Dr. Dre, Eminem, founding one of the most successful record companies of all time, then saying, hey, I got bored of that, what am I gonna do next? I'm gonna start Beats, you know,

growing that, starting a streaming service, and then selling that to Apple for billions of dollars. Like, he's just an incredible person. Insane. Did you get much into his his he has a program at USC Have you covered that at all my buddy Ben? Yeah after is on the board there. That's at the end of the documentary That's like it funny the the least interesting parts of biographies because everybody can understand like the struggle, right? It's like you start it out talk about family life all that trying to figure out your your path in your early career

Then you you might hit on something and then it's going well And then you take another step back. And there's just a whole climb that everybody can empathize with. One of the things that I think should be cut out of it completely is the end where they're like, I bought a building. I'm so rich. I donated a building named after me. It's like, that's just not relatable. It's just not interesting. So yeah, it is covered in the documentary. I of course, I'm not going to put that on the podcast, but they probably want to talk about that too. No, that's no, like, there's a great line.

Actually, let me read this to you, because here's the funny part. Jimmy is a great storyteller too, which I think is really important. And I think above and beyond, like, yes, we're studying these great entrepreneurs to learn how to build a big business and to take ideas from them. So like, hey, that idea work from them, we can use it for us. But like more important, it's like building a business is just part of our lives. It's a huge part of our lives. I'm interested in having like an interesting, fun, unique life. Like I want my kids or, you know, my friends after long time from gone to like read the life story of mine and be like, oh,

it's a page turner. This is actually interesting. That is Jimmy has incredible stories, you know, for five decade long career in music. And what I like is he intersects with all the other greats. So David Geffen, who is, you know, one of the greatest, I think entrepreneurs and investors of all time. And somebody it's like really reclusive now. And I really wish wasn't, I would love to read his autobiography,

but David Geffen started this huge like gold rush because he wind up selling his, uh, his record label for like $500 million. And I think with stock going up being, you know, six or seven or $800 million. And so when that happened, all the other people that were record producers, just like Geffen and Jimmy, I mean, we're like, Oh shit, I needed to start my own record label. And so Jimmy goes and David was his mentor. And he goes, Hey, we kind of do the same thing, but you just made a lot more money than I did. Should I start

a record company? And David goes, You should definitely do it. There's a lot of people in the record industry way dumber than you are. And Jimmy talks about like that actually giving him inspiration. It's like like, Oh wait, okay, this guy's succeeding, not Gavin, obviously, but other people are succeeding. And you know, it's not just a test of intelligence. But there was, there's all these different record labels start at the exact same time as Interscope. And somebody in the documentary says this great thing, where it says the reason that Interscope was successful versus a lot of other startups at the time was Jimmy was an animal, the most driven and brilliant person at the same time.

He was never off and he didn't understand why everybody else wasn't the same way. And so like that, these are the kinds of people that like, I like to study. These are like kind of people, these are the kinds of friends I like to make. These are the kinds of people I like to be around. Just like they're fully alive and completely committed to what they're doing Into how he transitioned from sweeping the floor to actually engineering and contributing to studio sessions like You told us that story about I think it was Jim Cameron like reading textbooks while he was driving was that Jim Cameron?

I think like there's usually- James Cameron. James Cameron, yeah. There's usually like an arc where there's, go to where the heat is, get in the room with the grates, and it seems like he was able to do that by like sweeping the floors and showing up and just being like, I will do anything to be in the important place.

But then there's also this second step of like, learn to contribute beyond just floor sweeping. You just fucking nailed it. That's exactly what happened. So his first two jobs in working in a record studio, he got fired, okay? The third one, he gets set up. This is amazing, a very pro getting fired.

Yeah, well, cause he's a college dropout. I'll just like give you like the 15 minute, interrupt me whenever you want of those hour-long episode Hey, because it's like and especially because we're all fathers I think this is like really important like the one of the most important relationships So she father and son and like if you really think about all the work that I'm doing I'm gonna hit you know, the 400th biography read in like three weeks or four weeks from now It's like all daddy issues all the way down I think you just stack on top of each other. You either want to be like your dad or you fucking hate them and

like you're trying to like, yeah, we got it ready for please. I'll come on. And it's going to be about the vacuum cleaner guy who I'm obsessed with. Somebody just pulled up this guy. Most people would be like, Oh, for 400, you're going to do like Steve jobs. Like Elon Musk, you're like somebody really, really powerful. No, let's give it up for vacuums. Vacuums. That's why he's a goat. You tell me another guy that has been running in this company for 40 years, owns 100% of it.

Highly likely. We're talking about Dyson, right? I have a friend of mine, a guy I know actually tried to give, tried to, I'm gonna take a tangent real quick cause this is a funny story. Please. You know, Dyson is a hundred percent of this company. I've heard the rumors that he's taken out.

Everybody's like, oh, he's worth $20 billion. No bullshit. I've heard he's taken out like five plus billion a year in cash and has for a very long time. No. That's amazing. And so it's like the- Wow, that makes Mark Benny off like a chump.

Mark Benny also has $2 million of sales force every single day. So he's making like $600 million a year in liquidity. But that sounds like D that he's gotta- Wait, he's selling? Or is this, I didn't do the first part. So Mark Bennev has a- No, no, no.

Nice and retains the equity. Yeah, yeah, yeah, no, I know, I know. This is fucking cash. Yeah, yeah, yeah, yeah. No, no, no, don't give me that shit. And so the funny part is, this guy I know told me this story where he's managing ever larger pools of capital

and has to keep buying more and more private businesses And so you can't buy a five million dollar business anymore or two two billion dollars business Just doesn't move the needle and so he gave a very friendly like hey, would you guys be interested to Dyson? to to sell and Again, I like highly disagreeable people. I like people that are obsessed with their product. They do forever It's just like people like us. Yeah, and That you can't buy. It's just no fucking number. It's just like I'm not for sale. Thank you very much And so they approached Dyson and I'm paraphrasing their response was fuck you. This is a family heirloom

This is the paraphrase family heirloom Let me go back to Jimmy though Dyson forever somebody just pulled a tweet. They're like, this guy's been tweeting about the vacuum cleaner guy since 2018. And I was like, yeah. You went too. I saw that post.

I mean, this is great David Lore. But in 2019, you got like four likes on a post. You said like, I just read my 83rd biography. Yeah. Yeah, I've slipped some of those in. Isn't it like Jay Gould or something? It's like, this is a person that only you know about, basically, and you've done multiple episodes.

No, so we, I have very few entrepreneurs living knew about Jay Gould. But the reason you should study him is because, again, I'm always interested in who's influencing the influencers. Oh, yeah, yeah, yeah. Who is the one that influenced Steve Jobs, right? Edwin Land. Edwin Land.

How dare you don't have him. I'm sending you Edwin Land shirts, by the way. I'll bring it with me. Thank you, I'm excited. No, but the Jay Gold thing is interesting. And then let me get to Jimmy if you want. I mean, sure, sure, you can do whatever the fuck you want. But the reason I studied Jay Gold

and I've read a bunch of old books about him is because I'm reading biographies of Rockefeller and he was asked like, who's the best businessman you know? And he said that without hesitation, Jay Gold. I'm like, well, that's interesting. And then Cornelius Vanderbilt, keep in mind when Cornelius Vanderbilt died, okay, he owned 5% of the money supply.

That's like the GDP metric for Stripe. They're like, we want to power 1% of the GDP. Founders need to be more ambitious. They put up the page in the deck power 1% of the GDP. Founders need to be more ambitious. They put up the page in the deck. 1% of the TAM. TAM, yeah, no. No, try to get 1% of the money supply. 5%, 5%.

5% of the money supply. Well, you've got to start somewhere. 1% of the money supply. And so when Cornelius Vanderbilt was in his 70s, and he was by far the richest person on the planet, he said the smartest man in America was Jay Gold. Jay Gold was like 33. And he had said that because they just went head to head to compete over the control of a railroad and J. Gold smoked them. And then you want to interesting thing. Then Cornelius

Vanderbilt actually sent hired hitmen to kill J. Gold's partner. It didn't succeed. Yeah, that kind of business is completely different than it is now. But yeah, there's all these interesting stories in these books that nobody reads. That's why I love what I do. And I try to highlight that for people because I'm like, these guys had interesting lives. They ride. They worked on something for 56 years. What's the chance that they built a wonderful business for six decades? They didn't come up with any idea that you could use. Like that's ridiculous. So going back to Jimmy Iveen, it's just like, so he gets fired.

I forgot the first reason he got fired the first time. But the second time was they just gave him a 90 day trial and they just didn't think he was good enough. They, on day 89, he gets fired. And they're just like, hey. Your sweeps aren't smooth, you know, you're missing. There's dust all over the floor. The response they said to him was like,

this just isn't for you. Working in the music business isn't for you. And this happens over and over again. Like Sam Walton, you know, his first manager when he was working at GC Penn, he said, hey guy, I know you're interested in retail. Sorry to tell you, you don't have a future here. And Sam's like, okay, how about if I become

the most successful retail person in history and I'll build a $400 billion fortune? How about that? Like, so I find like, I love when people, you know, doubt other people and they don't know what they're talking about and they're proven wrong. But Jimmy Winsett, being fired first time is really important because then he goes to the record plant.

The record plant is owned and run by Roy Ciccola, who is a legendary engineer. The reason this is important exactly, you just said John, is John Lennon, after he was a Beatle, wanted to work with Roy Ciccola. So nobody will come into the studio on Easter Sunday. And Jimmy Ivey is from Brooklyn. He's this old school Italian family.

He gets Roy calls and he's like, Hey, we need help with the studio. No one else is coming in. You got to come in on Easter Sunday. And Jimmy's mom's like, you're fucking crazy. You know, we're having a feast. This is church. You can't do this. And Jimmy says, he's 19, he goes, I will do anything,

anything to make this work. Shows up to the studio, Roy says, good, I'm glad you're here, I was testing you. In the room is Jimmy, Roy Ciccola and John Lennon. Oh, so he didn't even know John Lennon was gonna be there. He showed up anyway and that was like the reward, wow. Bingo. And so he said, he goes, listen, I would do,

there's a really interesting idea. So I actually talked to Daniel Act, the founder of Spotify about this. And his whole point was just like, he's completely like, he'll do anything it takes to get information that he feels is helpful. So when Spotify was going through a lot of rough trouble, he reached out to other tech, his peers,

other tech company CEOs. He says, hey, can I just like shadow you because like you say you can run meetings with like 30 people. When I run a meeting 30 people not like it's I don't even understand how you do this. And Daniel's like, there's no ego involved. So he did this with like Mark Zuckerberg, he spent like, I think a few weeks shadowing because I got Mark's fucking coffee. I don't care. Like I'm there to learn. And so

Jimmy I've been was exact same way. He says, I did everything they did. Like I'm there to learn. And so Jimmy Ivey was exact same way. He says, I did everything they did. Like I took care, I cleaned the equipment, I set up the wiring. I eventually learned how to be an engineer. He goes, I figured out the way that John Lennon was, if you're trying to, he's from Britain. He's very particular about how he likes his tea. So I memorized exactly how he wanted his tea. He goes, the way I was about his fucking tea was the way I was about everything he got so good at making John Lennon's tea that John wouldn't let anybody else make his tea so his point was like man you're these guys are your legends are letting you in the room just be useful sometimes

it's running an errand sometimes making tea sometimes it's fixing the drum sound and then John just felt he could trust them and so John starts sending him to he he he just takes him everywhere They go to LA together. They're recording in London or in New York together And like it's exactly what you just said John's just like you get in the room and you do whatever you can to stay in that room Yeah, that makes a ton of sense. I want to talk about his his picking ability and how he Became immediately successful. Tom Petty, Stevie Nicks, you two, the list goes on. How much of that do you think was a function

of just like his innate taste and ability to spot greatness versus just drive and relentlessness and just listening to every single possible artist out there? What is the comp to the venture world where you can be a great venture investor even if your hit rate is like 5% because it just matters in getting, actually getting into the companies that matter

and move the needle and people will kind of forget about a bunch of misses and companies that didn't go anywhere. Okay, you guys know I don't give a shit about venture so I'm definitely not gonna talk about that but I will talk about how this relates to founders building great products. How about that? Because that's the only thing that's actually interesting and matters. So Jimmy's idea was, the example I

used in the podcast where his thing is like okay producers, which you know he was an engineer in the interest of producing, he goes producers are always like I did this and I did that. He's like this is the analogy for venture and founders. He's like, would be producer and musical artist. He's like, I'll read this to you. He goes, you're only as good as the artist that you're working with. You're only as good as the founder that you're investing in. Right. Any producer or any venture capitalist who says, I did this and I did that is full of shit. 99% of what's going on in the studio is the artist. And so his point was, I don't have, he wasn't the founder, right. In this situation, he says, I don't have the talent.

I'm there to do whatever I can. I'm in service of them. And so his whole point is like, if I want to be successful, that I'm going to pick the best possible talent. How do you ride with that? Well, the thing about excellence and greatness is like, people don't actually know what it is until they like get close to it.

And so part of this is luck and randomness because Bruce Springsteen's most important album that he ever makes is Born to Run. Okay, that's his third album, right? Bruce is still doing it. He's one of the top selling artists. He winds up becoming a billionaire off his career and everything else. But before then, his first two albums were not doing well.

He was not doing well. And so Jimmy is the engineer on that album and he sees firsthand the level of work ethic and dedication that Bruce Springsteen will have to this. And so the way that Bruce was about like a drum sound is the same way that like a Steve Jobs was about every single pixel that's on any device that he's making. And so Jimmy tells the story where it's like,

Bruce would stand over me and say one word over and over and he said, stick, stick, stick. And what that means is like, we're hit the hit the drum again, because it's not producing the actual sound that I want. It took them three weeks of just in the studio every day, hitting that over and over and over and over again, until Bruce got what he wanted. And so once you see it's like, oh, and then what happens? Born to Run comes out once it being the one of the best selling albums of all time. It's like oh and then what happens born to run comes out winds up being the one of the best selling art Albums of all time. It's just a complete phenomenon So now he sees the level of craft that John Lennon puts on his work then and Bruce Springsteen Then he starts working with Stevie Nicks who just came out of Fleetwood Mac who was a fucking legend Tom Petty

Then he gets in the room with dr. Dre 15 years later. You just know it when you see it How much do you think it was driven by like like? Casting a wide net and meeting lots of people? I'm thinking about like as a founder, there's a very different approach to hiring talent. If you can think about this in the sense of like hiring talent, knowing who to work with, then like the Bill Gates mindset versus the Jim Simons mindset. Like I think Jimmy's more of a Jim's that that's exactly what I was thinking of. Jim Simons, his whole thing, and I just didn't episode on him too, right? Ransom's technology is a Jim's that that's exactly what I think of Jim Simons his whole thing and I just didn't episode in him to Right Ransom's technologies keep people to know since you just had some money printing machine. Yeah, and and

for this Renaissance technologies hasn't is isn't a business of hiring thousands of people and firing the bottom 20% every year Microsoft fucking over years. There's yeah, exactly. There's no turn. There's no turn over because if there's a Microsoft is notoriously high churn and that's by design It's a very different thing if you leave yourself is notoriously high churn and that's by design It's a very different thing If you leave Renaissance technologies you your money your personal money comes out of the medallion fund and the medallion fund is a magic Money-making machine so you do not want whatever you want to do in life You don't want your money out of the medallion fund so you will stay there So when you go and read Jim simon's biography, it's a that's great knowledge John. Thank you

It's very similar to how Jimmy picked his talent where he's like This is the most talented person I could possibly work with and it may take me years to recruit him, but I will do anything. I will go to, I will go to his house. I'll meet his kids. I'll spend, I'll do whatever possible. And then what happens is then you read up on the people, which I just did for the Jim Simmons episode on who he recruited. And it's like, they weren't like normal mathematicians or PhDs. Every single person was a mathematician or physicists or PhD working results. They have like theorems named after them or they like, they discovered person was a mathematician or physicist or PhD working results. They have like theorems named after them or they discovered something in mathematics.

They were literally the best of the best. And so like Bono, and again, I think some part of this is like pattern recognition. You saw the edge that Bruce Springsteen had and then he gets introduced to Bono when at the very early days of YouTube and he sees him perform, he's like, oh, he's got the edge. And so he's like, let's work together.

Bono's like, no, let's work together. Bono he's like, let's work together. Bono's like, no, let's work together. Bono says, no, let's work together. Bono says no. And he says that he chased us around the world until we agreed to come to the studio with him. He would not take no for an answer. He happens to you. He is like a virus and he takes over your organs and brains.

He just knows that this is going to work out well for both of you. I don't think there's a person alive that won't listen to this Jimmy Iveen episode and get something out of it. And it's just like this relentless pursuit of what you wanna do. And his whole thing is like, he wasn't a big fan of how the music industry, their metric of success was like total records sold.

His was like, did you make a great album? He's like, great is success. A lot of people sell a lot of albums and they suck. If you can make something great first, then you'll be able to get more customers, more listeners and more everything out. But the primary thing was great. And there's a great example of this, which I think is really important too. And you see this all the time.

Where at the end of the documentary, towards the end, Dr. Dre had all these issues. He searched his own record label for the end. Dr. Dre, he had all these issues. He starts his own record label for the very first time. His first two albums he puts out completely flop. And Jimmy's his partner and Jimmy has corporate partners. They're like, hey, you need a fire Dre. And Jimmy, this is another thing I admire about him. He has these lifelong relationships. We have been friends for years.

I hope we're friends for decades. You know, this is really important to me, like these compounding relationships. And so they're like, you need to fire Dre. He goes, yeah, we could do that. And we'll save on my salary too, because I'm going with him. And so what happens?

They try to fucking fire Dre, because these idiots that can't do what the artists can do, don't know what they're talking about. This guy's a generational talent. You're like, get them off the payroll. And what happens? Jimmy is spending day after day after day

doing these listening sessions with Dr. Dre. Dr. Dre would come over to Jimmy's house every day. They'd listen and try to find an artist for Dr. Dre to work with. Jimmy gets this tape of Eminem at the Rap Olympics, gives it to Dre. Dre's like, what is this? And then Dre starts working Eminem.

He becomes one of the top 10 selling records artists of all time. But more important than that, Jimmy says something that was great because at the very beginning, his first two albums were super controversial. There was like protests, there was congressional hearings about Eminem's lyrics. And he goes, we weren't looking for like a white controversial rapper. We were looking for great. He's so consistent from day one from when he's 19 till when he retired at close to 70. Great can come from anywhere. You just have to find great. He's so consistent from day one from when he's 19 till when he retired at close to 70. Great can come from anywhere.

You just have to find great. Congressional hearings are such a success metric. Palmer Lucky told me that. He said the thing he learned from Zuck was that you're not getting dragged in front of Congress because you did something bad. It's because you're being crowned as the victor, essentially.

I do want to ask about that. What was Jimmy's approach to financing different deals? How did he think about control? Was it possible to, I understand in the record industry there can often be like a parent label and then you can have a new label under it. Did you get anything there? Did that not come up?

He, no, he actually does like a really interesting deal. I mean, he may keep in mind. So like my metric of success is not like he wind up being a billionaire, but that came way after. Even if he never did beats, to me, he'd be unbelievably successful just with the life he lived and the experience. He probably made hundreds of millions, but with beats, he made billions. One of the things was like, especially with like a tech focus, is like when he sells, I think he sells like 50% of his inner scope,

I forgot, maybe to MCA, and it was like for like $150 million. So it's like, it's fantastic outcome, but when you were talking about $3 trillion market cap tech companies that look small. But no, finance was not like a focus on any of the interviews or anything in documentary other than like mentioning random dollar amounts with like taking in partners and stuff.

Yeah. On the protest and congressional hearings, it feels like there is something there where when a founder is successful enough, eventually they have to put on the suit and go to Washington and start lobbying and do something that, uh, did you dig into any stuff that he was able to do or apply his methodology to even trying to smooth over that situation? Because it did seem like an existential risk to the rap industry at that time,

if they were really going gonna clamp down on explicit lyrics beyond just the content warning. He doesn't state it. That's part of the reason he had to sell, he went with one partner to another, because I forgot the company he was with, but they were like, hey, I think it was underneath, it was a bigger conglomerate that owned another label,

and then under that label was endoscope kind of thing. And they're like, we have fucking senators calling. Like we this is such a small part of our business. Like you have to go elsewhere because like I'm not I have a, you know, 200 billion dollar cable company or something. Sure. Sure. Sure. But I but I think the interesting part here is I think he he's a phenomenal marketer and that's what everybody would keep down. Like a relentless salesperson. I think that's a phenomenal marketer, and that's what everybody would keep, like a relentless salesperson.

I think that's one of his gifts. But I think he understood that, remember, he signed Marilyn Manson, Trent Reznor, Eminem, Tupac, he death rowed records. Literally, people were, the rappers were killing each other. That was under Interscope. And obviously, he didn't want them to shoot each other, but his point was with all of this,

with this congressional protests, and the media saying that he's like a smart peddler and everything else like it's good for business. And like it's all this outrage because what happens when we were kids remember i was listening to eminem was like a huge influence on me cuz i had this like all this like pent up anger about like my early life and like. like all this like pent up anger about like my early life. And like, I felt I was born into an environment that I didn't belong in and I was better than and like Eminem was kind of a soundtrack of like, yeah. Like you, I feel that way too. And so like music is very much like a young person's game. So you have like 60 year old congressman or Bob Dole saying

like, you shouldn't listen to this. Well, as a kid, you remember was like being a teenager. Oh, that makes me more interested. I want more of that. And he does this too, like with beats. So the idea before the streaming service, he had the headphones. He's like, it doesn't make sense for Dr. Dre to endorse anything. He had like sneaker endorsement offers and all this stuff for stuff. And he said, Hey, there's a great line in documentary goes Dre fuck sneakers, speakers, you should

do speakers. He's got that like, you know, high pitched Italian twang voice, which I absolutely love. And so they're like, Bo, the leading, at the time in 2006 or whenever this was happening, the time the leading headphone product was Bo's. He's like, headphones to put you to sleep? I don't wanna put you to sleep. I wanna make you move. I want you to get off your ass.

And so what happens is they made them distinctive so you could tell with the big logo on the on the on the ears What they were right and then he's like our idea my marketing idea is very simple I'm gonna put them it with the best musicians on the planet That's gonna get everybody to try them and then once you try them you'll stay because the sounds good And then he expanded out to athletes, but what he did is he wind up spreading it to the 2008 NBA Olympic team, or US Olympic team, the men's basketball team. And it got banned and there was all this coverage because Beats wasn't an official sponsor, right?

And so you can't wear them. And so they wore them anyways, and they wound up getting fined and everything else. And Jimmy's like, this is the best thing that ever happened to us. Makes sense. I mean, that's fantastic. We could do this all day. This is Yeah, see you soon

Yeah Next next time we do this might be a person here. We got some play. How are you guys doing? How are you guys? Are you have you are you gonna but if people drop in you like okay guys This is the end of the segment now you have to get up and leave. We can do that. We have some ideas we'll share with you. But it's gonna be- You can just do a whole show with us. It's gonna be you. No, I can't do three hours of this.

I can do three hours alone with you guys, but not- You can do it. You can do it. You'll work up to it. You know how I talk, in three hours, if it's live and not edited, I'm gonna get canceled. I'll get in trouble. You'll be fine, you'll be fine.

You're good, you're good. We'll bleep out all the swear words. We'll work up to it. We'll do 30 minutes, then 45, then an hour, then two. You'll be good. What did they used to do on TV? There was like a two minute, like, remember there was like a delay, like a tape delay? Yeah.

Yeah. We'll need a tape delay for you. You're already swearing like a sailor. So we got to clean that up. We'll work on that. We're going to have to. We're going to go do the Porsche Experience Center. That'll be fun.

And we'll have to get're gonna we're gonna go do the Porsche experience center, that'd be fun and We'll have to get Cannot wait to see podcasting Senra in a gt3 rs. You know just just Track what was the Ferrari that I sent you guys a 12? competition competition Competition competition we got to do that one All right guys talk to you next we have Katherine Hahn from Han ventures coming in the studio to talk about the stable coin bill The genius bill is slated to pass on the front of the Wall Street Journal today And is the guiding and establishing national innovation for us stable coins. We had her on the show and Yeah, we're excited to talk to her.

So welcome to the show. How are you doing, Catherine? What's going on? Hi, how are you guys? We are great. Big 24 hours. Congratulations, I think, are in order. But please get us up to speed on what's actually happening

and where things are in Washington. And I love that you called me Catherine. That was my Washington name. I haven't been called that since I used to appear in court. But Katie. Let's update the Chiron. Katie Hahn. Oh, thanks for having me on, guys.

Actually, I literally just walked off a plane. I was down at the COTU conference. Oh, wow. Nice. Where I was talking to a lot of founders, Crypto and Non, and everyone loves your show. So I'm happy to be here. Well, thanks for taking the time. Yeah, thanks.

I think congratulations are in order. I don't know if I would say that yet. I mean, first of all, the bill passed through the Senate. Great news, obviously. It's another signal, I think. I feel like I did when ETFs were approved. By the way, not really by the SEC, although that was the body that formally approved it. But as I said last time I was on your show, guys, make no mistake, the DC circuit, that Article

3, that other branch of our government left the SEC no choice. The courts don't always get it right, but sometimes they do. And the courts unanimously in that case said that the SEC had acted arbitrarily and capriciously. So to my mind, the court system is the reason we have ETFs in this country today for Bitcoin and for ETH. And I think of this as a bit a similar thing. Now, here we have another branch of government stepping in. In this case, you have the Senate passing this, introducing this legislation, passing

this legislation. passing this legislation, now of course the House has to vote on it, and then the President has to sign it into law. So if those two things happen, you can say congratulations are in order for the industry. But I think one thing that is not really being discussed, and I hope we can discuss today, is there's another very important bill.

And I'm not gonna slap a percentage on and say which bill is more important, but that's another very important bill. And I'm not gonna slap a percentage on and say which bill is more important, but that's the market structure bill. And to me, that's really the transformational bill for the crypto industry. Okay, so break that down for us. Yeah, so there's one bill, stablecoin bill, as you just mentioned that the Senate passed.

And one of the things that I loved to see about that is the bipartisan support for that bill. Because I think we used to be as an industry pre-political. Brian Armstrong always talked about the industry being pre-political. And I think I don't want it to be the case that this industry is too political on one side or the other. So I really love to see these moments like we saw yesterday in the Senate, where you have a number of Senate Democrats voting in favor of sensible rules of the road. And I think this is a classic example of that. So I'm delighted and I hope the House passes it.

But I don't see why we have to choose between just a stable coin bill and the market structure bill. And the stable coin bill obviously paves the way for a regulatory framework for stablecoins in this country. So that's that. Then there's another bill the market structure bill and that kind of will answer or attempt to answer the question of what's a security. What's a commodity.

And I know you guys have been covering crypto for long enough. You know this is kind of an age old debate. And you know where can there be an enforcement action? Well, the big question is, well, what's the security and what's not? And I think the market structure really goes a long way in answering that question. And that's why I think it's so fundamental.

And we've seen courts across the country weigh in on that question. And that's because we don't have legislation. And Gary Kessler said it was all so clear. And of course, it wasn't all so clear. Yeah, so what's the timeline there? What are the different players? What do people want out of it?

What is the core crypto industry, both on the investor side and company side, want out of it? And who would not want it to go through at least how the crypto side has it in mind. Look I think I think everyone in the crypto industry wants the stablecoin bill to go through and become law. I don't think there's really any question about that. The question is do you go for both? Yeah. Someone just described it to me as in a sports analogy and I'll probably fumble that one. But it was like, do you go for the field goal or do you go for the touchdown?

And the thing about after a field goal, the other side gets the ball back. And I think Congress really operates in kind of six to 10 year windows. And it's on their mind, reform, regulatory clarity for crypto right now. And I think the transformational bill for crypto right now is very much that market structure bill. We also want that stable coin bill and we have this unique moment in time where we have bipartisan support for both bills. So personally, I say go for both of them and worst case, you end up getting the stablecoin bill only. But I do think that's not the most desirable outcome for the crypto industry. I think the crypto industry deserves, especially after years of uncertainty, both a clear message

from Congress. I think Congress ought to do its job and pass both bills. And I especially think that because after the Supreme Court last summer, in a case I said that this was the most important case for technology policy not for just crypto but for tech policy in decades was the overturning of the Chevron doctrine and that takes power kind of away at a high level away from regulatory agencies and puts it back more in the hands of the courts and do we want to have another ten years of litigation percolating up from the district to the appellate court to the Supreme Court on what's the security or what's a commodity and a patchwork of different

answers throughout the country? Or do we want Congress to answer that question for us now? And I think it's incumbent for Congress to answer that question now. You asked who, what does the industry want? I think people, this is a big industry. We say crypto is not a monolith. It's a broad new asset class. And stable coins are a very big important piece of that asset class and a growing piece. As you guys saw, I shared with you the stats,

you know, almost a quarter of a trillion dollars. I think you banged the gong for that stat locked in supply, growing enterprises across the world, integrating stable coins. You probably saw those announcements from some of the big tech companies in the last few weeks. And I think one thing that everyone's wondering is, those ones that haven't yet dived in for stable coins is, well, what are the rules?

So this bill that was passed yesterday on the Senate, the genius act so important for that. It's like, here you go. And so what kind of institutional interest will be unleashed once that bill becomes law? I think that's really exciting. How would you, how do you think about big companies getting excited about stable coins and thinking or institutions and being like, there's a lot of potential here, we should create our own stable coin versus we should just figure out how to leverage this technology. Where do you see the kind of line and opportunities? Well, look, we already have two very dominant stable coins already today, Tether, USDT,

and then we have USDC. So clearly, it's not winner take all. I mean, those two are both growing and they both have market share. So we it's not winner take all. I mean, those two are both growing and they both have market share. So we think there will be stable coins like those that will have network effects. But we also think at the same time, there are some businesses that are just so big and just so important.

And if they launch their own stable coin, we could also see that too. I don't think we see a world where everyone, I think we get asked this question all the time, is there going to be a world where every company has their own stable coins? We don't think so. We could be wrong, but that's not the view of how we see this evolving.

We do see that. We had Aaron Frank from Lightspeed on earlier, and he was comparing certain companies would launch a stable coin, and it maybe would feel like coal's cash, where it's like, do we actually really- Yeah, yeah, good point. I don't have any of that, nor do I, I don't have any of that.

And that's the thing, if I did, would you wanna use it on other platforms, right? Yeah, I mean, every bank could launch a Visa network competitor theoretically, but that doesn't necessarily make sense. Yeah, so in your mind, is the broader market structure bill the kind of thing that could catalyze a massive amount of new activity?

And from my view, stablecoins have been getting adoption. There are a bunch of exciting use cases. We have a public American stablecoin issuer in circle now. It feels like, yes, regulatory clarity is important there, but having broader clarity around how tokens are treated by, you know, how the government actually views tokens feels like it could catalyze, you know, much more of an explosion in investment activity and new company formation and new use cases for tokens.

Is that the right framework? I think that is the right framework because like I said stable coins a big important piece of the pie and very low hanging fruit by the way to my mind. But crypto as an asset class is much broader. So when you say where do the industry players, where do the crypto investors, where do we want to see it? I don't think it's a monolith. I think crypto as it grows to a multi-trillion dollar asset class, like any multi-trillion

dollar asset class, like any multi-trillion dollar asset class, you have different factions. And I think some fairly, and some really smart people think, just take this, take this win and move on, and don't worry about the rest. And I think that's a little, I see why they might think that if they think that it's this or nothing, but I don't,

I think that's a false choice. I think that we can have both, and this is a really opportune moment to have both. And I think the question that has beleaguered the industry really has been the question over securities, commodities, which agencies are going to have jurisdiction. I think that's a bigger question. And I think it would be a real shame if we let this moment go to waste. You know, the irony too, so you have some stable coins or only stable coin companies who are like, yep, genius act and move on. They don't want to get dragged into this broader kind of a more omnibus package, right? With

the market structural legislation. But I think that's a missed opportunity. And I think we'll be sorry as an industry if we don't go for both now. Again, go for the touchdown. And, you know, I think all of the, like I told you, all of the fundamentals are kind of working all at once together now when I last talked to you guys. And that's very much part of it. So why would we not go for that? So I think some folks who don't maybe have an appreciation for how, sometimes sorry to say it, slow Congress operates. They've been trying to update the money laundering laws for two decades. And it's like, out of sight, out of mind sometimes. And I think we have a really unique moment to press for both here. And the irony is some Democrats who were opposed to market structure, you know, because of potential abuses, who are opposed to the crypto industry. They cite abuses, they cite fraud,

they cite speculation, they cite Trump coin, and I get all of those criticisms, but I'll tell you what, had the market structure bill been passed, that would have answered a lot of those questions. The irony is if you would have had the market structure bill, you wouldn't have had a lot of the blowups that you had

in the past several years in this industry. Is crypto truly coming home to America? We went through a period where crypto is being pushed offshore. We've heard over the last year that some crypto founders feel like they can come back to the States now, maybe actually have an office stateside. Are you seeing more and more momentum there

with some of this positive regulatory movement? Or are you still seeing momentum around places offshore, Singapore, et cetera? I think, look, everywhere that you're going to want to develop does is going to have some rules that you're going to have to follow. When I hear founders who say there is no regularity, it's often not a good thing for that there is no regulatory

regime whatsoever. Sorry, Balaji, if you're watching. But I am seeing that on shoring a bit. We were kind of seeing the offshoring in an unfortunate way, but it's not only regulation that matters. It's hiring top talent. And certainly there's top talent right here in Silicon Valley and other places in the world. I mean, you mentioned Singapore. Singapore has top talent, to be sure. But, you know, there's a lot going for the U.S.

So we're still very optimistic. And I don't think it. But we were getting to a very dangerous point with the crypto industry. Had the likes of Gensler and others like him been left kind of to just do this now? Fortunately, the courts were pushing back. So it wasn't a partisan issue. It was just the courts were starting to say, no, you've gone too far. I mean, I lost track now. I literally lost track of how many federal courts of all political persuasions and appointments ruled against Gensler's regime and not just Gensler, but

others like it where you had very activist regulators who were really far out of their lane and you saw courts curbing back on that. So I think that was already, we're at a dangerous spot, but the courts were maybe going to save us, but you don't only want to rely on litigation to save you, of course, because then you've already lost. But I think hiring talent is important. I think access to capital and traditional venture, maybe that's a little different in the crypto asset class.

But I think also fundamentally what you have going on right here now with AI, particularly in Silicon Valley, and we've talked a little bit at the early stage about some of the synergies between AI and crypto, because of course AI creates digital abundance and blockchains are good at enforcing digital scarcity. And I think you're going to see more and more synergies emerge and use cases over time. And I'm not going to say what they are because, you know, we've seen that before in crypto, a lot of over promising under delivering on use cases. So let's just stick to right now.

We see synergies. There's a lot happening in Silicon Valley, obviously with AI. We think that's going to benefit the crypto industry. And so in addition to regulatory clarity, if you're a founder, you want access to great talent, you want your visa situations sorted out for your employees, you want access to other founders, depending on what type of company you are,

you want access to capital. So I am optimistic about the state of crypto in the US, but also elsewhere, and we invest in companies. We invested in squads, we've announced that. And I know Steppen, one of the founders of squads, watches your show, but Steppen's based right now overseas. And I was just having a conversation with him about how do we get you to come and bring squads to the US? Awesome, awesome. I want to talk about

the longer tail of regulation because it seems like the stablecoin bill is very straightforward, like the least ambiguity there. Then you have the the Market Structure Act and there's a lot more to do there but I'm sure that there's like riders getting pitched and all sorts of long-tail things like how much are we actually like? Where does the line end between what we're actually trying to define versus what we're still in the exploration fear Phase of because you have NFTs crypto gaming. There's you know Prediction markets there's prediction markets, there's so many different crypto applications

that trying to kind of do them all at once, maybe that's the right approach, maybe these need to be handled like after we've done the technological exploration, but what's your view on kind of the long tail? My view on that is no, because we can't just, we can't have an NFT bill, a bill for bank contracts, or we can't have specific bills bell, a bill for event contracts or

we can't have specific bills. And if you saw, if you think back to the advent of internet, that's not what we had. You know, we had section 230, it applied broadly to platforms. And I think we need something similar here. So on the one hand, I would say it can't be so specific that it's like, okay, if you're a, you know, events contract platform, it's this rule. And if you're an NFT player, because again, we don't even know yet what will be created really, at the end of the day, we've seen some early use cases with product market fit. Obviously, chief example of that is Bitcoin. But what if we had had this conversation, guys, back in 2010, and you said, okay, we've got Satoshi's white paper, and there's this thing called Bitcoin.

Let's pass some crypto regulation. It would have just been for Bitcoin and that would have been a mistake because then a couple of years later on the scene we have ETH and a few years later we have Solana. So I think what we need to do so you don't wait for the end state to have any regulation, right? You don't do regulation by enforcement. I can tell you what we don't do. We don't do regulation by enforcement. I can tell you what we don't do. We don't do regulation by enforcement. You don't wait till the end state of things, but nor do you want to get so with such specificity today

and do the current state of regulation by the end state of regulation. That you can't do either. And so I think what you have are some guiding principles, some generic rules of the road, and really that's all the market structure bill is. And there's enough clarity that you had Democrats vote for it last time it came up.

So it's not like it's so specific. It talks about, and I think, look, I think you have people like Hester Peirce, who is SEC commissioner, has written and given speeches on this of what that ought to look like. What is a decentralization test? And those are some guiding principles that you can kind of look at and apply as you think given speeches on this of what that ought to look like. What is a decentralization test? And those are some guiding principles that you can kind of look at and apply as you think through this legislation.

You know, what body ought to regulate it? And sure, you're gonna have some outliers and new technologies emerge that you're like, okay, does this fit neatly in the bill? No, but we have laws for everything in this country with technologies that develop that don't fit neatly in a particular bill And that's why we have that's why we actually have we don't do regulation by enforcement Uh, we do notice and comment we do things like advisory opinions certain bodies by the way do do advisory opinions

not uh judges and then if if all else fails, uh, You do go and sometimes seek Article 3, seek a judicial interpretation. But I think that's, like I said, that's kind of the failure state if you're having to go to the courts. But indeed, that's what was happening because we were getting no rules of the road and we were only getting unfair regulation by enforcement. And I say unfair because Gary Gensler basically picked what should have been the best companies

in crypto, the poster children for compliance, and brought enforcement actions against them, and then the complete spectacular disasters didn't bring anything. So, until after the fact. And so I think regulation vines. We gotta have you and Gary on the show to hash it out. I'm sure you guys have had some funny conversations. Thank you so much for helping out. Thank you for joining. Thanks guys for having me. Great having you. Have a good rest of your day.

Cheers. Okay, bye bye. Up next we have Justine Moore from Andreessen Horowitz. Incredible map knowledge dropped a fantastic market map all around AI image, AI video models. We're gonna have her take us through it. Welcome to the show. How are you doing? Can you hear us can you hear us

Hello. Oh, I can hear you guys now. Sorry. There we go. Hey, I was saying to John when you dropped your new market map I was saying, you know, it's a great sign of respect Yeah our culture to drop a new market map and come on the show. So we're honored. I've been incredibly bullish on market maps. I find them extremely interesting and I think they got a bad rep a couple of years ago, but I'm glad you've stayed the course. We are pro, strongly pro market map.

Yes. The people love market maps. It's like you can guarantee a popular tweet if it has a market map in it. Absolutely. And I think people got kind of sick of like, oh, like we know the playbook. We've seen it, but there's a playbook for a reason. It works. Yeah.

So yeah, take us through the latest market map. What are you tracking? How did you decide what to divide it up into and and what what kind of inspired this moment specifically? Yes. So I mostly do AI creative tools here at a 16 Z. So I spend like all my time testing all of the image, video, audio, et cetera.

And obviously the past few months in particular, video has been the thing. There's been VO3, obviously, which was a massive moment with adding the audio for the generations, Hydra around the talking characters, the new Minimax model, the new ByteDance model, SeedDance, which is in the arena already outperforming VO3. So it just felt like a good time to refresh sort of what's going on in the video space. And I kind of formatted this market map just thinking about more from the perspective of a creator, like less in terms of the go-to-market of the company, more just like if you're a person trying to create a video with AI, where would you go for these different use cases?

So there's first sort of the model, like the foundation model companies where it's either text to video or image to video. Most places do both where they actually take your input, have their own proprietary model that generates the video for you. So that's the VOs, the clings, the runways, the PICAs. And then there's also now this emergence of what I call like multi-model apps, places like CREA and Flora and Visual Electric

that enable you to run a bunch of models in one place. So if you want to take a single prompt or a single image and see what it looks like in five different models super easily, you can do it somewhere like that. And then the other side of this market map is what happens when you add speech and talking characters. And so some folks do that by generating a talking avatar from an image where you can eventually have the person move and other folks do that by taking like a video of a person and then applying lip sync over it and then syncing the audio. So that's sort of the distinction between talking avatars, for example. Are you seeing a lot of that? Or like, I guess how, how rigorous or stringent are founders about like, Hey, we are trying to build a consumer app, or we're just building a cool technology and

it might land as a consumer product, but it also might land as a B2B play. Um, most people are not at all rigorous and often don't even know at the beginning. So what we actually saw with the first generation of AI video was it was only researchers making these like magical models and they had no idea what the use cases were going to be. They all just put like a text prompt box in front of the model and then you got an output and like a big company and an individual were using the exact same prompt box in front of the model, Maybe an example of that is all of the standalone video ad creation products. So things like Create-ify or Captions, or HeyGen has a product for this too, where you can literally just paste in a link to your Amazon or Shopify store.

It will pull all of the info about your product, your logo, your brand, and it will generate a talking head avatar holding your product and describing it. And that's something that a VO VO three or cling the general video model companies won't do today. Yeah. Um, where are you seeing the strongest, like low churn adoption of these tools? Because just personally, like VO three was the thing that got me to subscribe to Google pro max 25, which we can go into the names and how difficult this

access these. But but other than that, they're they're having I haven't seen that many where like we've seen the ASMR stormtroopers or something. But but it hasn't been clear to me that someone's building like the next Pixar and they're actually thinking about it like Mr. Beast and they're like, I'm building a studio. This is a business, I have ad integrations and I have a content schedule. It's very much in the testing phase. We see the Studio Ghibli moments go viral. So where is the true long-term value playing out right now? Okay, on the content creation side,

where we are at right now is actually there's a bunch of content agencies. Like, there's a bunch of content agencies like, you know, there's a bunch of Wunder Studios, Dream Studios, there's probably like 20 of them now. One called Paracosm, that's really cool. And these are people who are just early adopters of the tools and they're getting hired by brands and ad agencies and entertainment companies to use the tools for them and make content. I think the problem now in what you're describing

is the people at Pixar would have to know how to use the AI video tools and how to set up the workflow in order to create their next movie using AI. And we're not yet at the tools aren't mature enough, and we don't have enough people who are working at those entertainment companies who know how to use the tools, that it's primarily

being done with these external AI native agencies or contractors today. I think like one of the first AI IP we've seen is the Italian Brain Rot characters. I don't know if you guys know, I don't know this. Italian Brain Rot characters are huge. So I can't even say the names here because they will sound ridiculous, but it's people basically making images of like an animated talking baseball bat and like a ballerina whose head is like a

cup of cappuccino. Okay. Okay. And a shark who wears sneakers. Okay. But they're starting to build like a cinematic universe. Oh, it's massive. Yeah. Accounts have like millions of followers. The world isn't ready for Italian brain. Right. So is it, is it, uh,

is it like decentralized in the sense that I could just go and participate in this broader trend? So yes and no. I would say there were a couple of accounts that originated the first few characters, and then other people started participating using the hashtags remixing.

And then the characters that were good that came out of that sort of bubbled up to become part of the cinematic universe They have bomba deary bombadero crocodile crocodile Crocodile plane that he shoots bombs. This sounds like yeah. Yeah super super viral. Yes, the kids probably love it. It's wild Before we go into more of the consumer side, talk to me about some of the more niche B2B use cases.

Because I remember when GPT 3.5 and we got 4, GPT 4 dropped, there were still a lot of hallucinations. But you saw companies that were just like, yeah, sure, it's not incredible at writing poetry, but it's amazing. It just like converting this messy text to Jason. And they were all of a sudden just running tons and tons of queries. And so I would imagine that in a, in a, in a, in a video workflow, things like what runway was doing in the old days of just like green screening or

the stuff that like artists aren't going to really get upset about because it just feels like a better, more advanced tool. Are a lot of these companies building tools like that, or is all the focus just on like let's one shot the next Oscar film? Yeah, it's a great question. There's a decent amount of vertical focus. I think also like it's very hard for the first startups, like if you're not a Google or an OpenAI or whoever, to play in the game of let's train the largest,

one-shot, best video model. So a lot of them are focusing on verticals. Luma, which is a company we've invested in, did this really cool tool where you can upload a 9 by 16 iPhone-style video, and you can just say extend. And it just basically outpaints around the existing video and makes it look like, so you can just change the dimensions of your video really fast.

Yeah, yeah. Or there's companies like- More of just like a practical tool, but super useful for a bunch of creators that are filming vertical content probably, and they wanna distribute in a horizontal format, so they just do that. Yes, exactly.

That makes a ton of sense. Or something like Higgs Field that has all these really special effects like motion lores essentially. So you can take like an image of a car and just say like, this is like here's a template of what a car explosion looks like, make this specific car explode. And then on the B2B side, we've seen a lot around like, how do you scale marketing or L& D or like executive presence type content? So like, you know, tools like Descript now allow you

to take a video of someone talking and then change the word that they're saying by changing, like cloning their voice, having them, the voice say the new word and then doing a new lip dub. So you could have your CEO sending what looks like a personalized holiday message to every single customer or something like that. Yep, or maybe something worse with a phishing scam, but I'm sure we'll get into safety at some point. What do you think the long-term ambitions of companies like Google with VO and ByteDance with their model,

what do you think they want out of this category? They obviously have a massive edge. I saw Anish was posting about YouTube's edge around IP with VO. You can generate basic Disney perfect. What was going on there? It's crazy. The Disney thing.

Is that a real deal, or is that just a beneficiary of some sort of relationship? Yeah, then I want to get a sense of do Google and ByteDance. Do they want to be developer tools that just a beneficiary of some sort of relationship? Yeah, then I want to get a sense of, do Google and ByteDance, do they want to be developer tools that just vend into a bunch of these platforms? Do they actually want to own the end customer? What is this market? Is there a generalized market in the long run

of just generating funny videos for the average consumer? Or is it going to all be verticalized out where I want to generate ads? I maybe want to generate customized messages. But I want to understand, this is a good overview of all the ways that you can generate content. But how does the market structure evolve? Yes.

OK, on the IP question, I have not talked to Google's IP lawyers. And I'm not an IP lawyer. But my understanding is Google. But this is legal'm not an IP lawyer, but my understanding is Google But this is legal advice Our compliance team is gonna love this Sarcasm you can I I think my sense is basically, you know when YouTube came about it was suddenly like all this IP content Is on the internet and Google cut deals with a bunch of the IP owners about essentially what

what can be posted on various Google properties and if that content gets monetized, how it ends up going to the end rights holder. And so that's sort of the theory, the working theory right now about like why VO3 can generate IP content and not get sued when a lot of other people are struggling with that. In terms of the market dynamics, it's so fascinating the question around Google and ByteDance and eventually, I think Facebook, I hear is going to do more in video soon as well, why they're doing it and what their strategy is. I think first of all, if I'm one of those huge consumer giants, AI is such a massive shift in consumer behavior that if you want to own the interface to consumers,

you probably want to own text, image, and video generation as well. And they have the resources in terms of data, like YouTube, for example, is a perfect example of this. They have a ton of compute. They have a ton of money. And they can hire the best researchers to build the best models.

I think the question, as you sort of alluded to, is, like, do they sell those models via API and let other people build the consumer experience on top of them, or do they own the end-to-end consumer experience? My honest take on it so far has been like, it takes so long in the big company product teams to get stuff done and get new products out

that like the model teams are just shipping the models in like pretty basic interfaces like Google Flow. And then the product teams are gonna figure out if in pretty basic interfaces, like Google Flow. And then the product teams are going to figure out if they can catch up with some kind of cool new consumer app later. Yeah. Yeah, I mean, I saw that. My question is, what will the market actually

look like for the average consumer wanting to generate images and video? Or will it just be something that people default to Chat GPT, because maybe they already have a subscription, or they're fine with the free tier, and it doesn't end up, there ends up being a bunch of different applications on the enterprise, B2B side, but then not so many core consumer subscriptions on just like cool videos, pictures, et cetera.

I mean, it seems like it's a killer, killer moat for Google Cloud Platform to have VO3 as an API, even if Google can't figure out how to productize it fully. It's like, they do seem to have a real moat. I wanna get into that about YouTube is obviously an incredible training data resource. You mentioned that there was another company

that just surpassed them. Was it Tencent you said? By dance. By dance. That's right. So I have a question about that because obviously with code gen, GitHub has a lot of public repos that people can probably just scrape. It's also just not that much data. You can probably fit it on a couple of hard drives,

maybe sneak it out the back and go ahead a flight And and train somewhere in Malaysia or something You can't do that with YouTube like it's just too much data. And so my question is Is how durable how much should we be thinking about a durable data moat in video generation for? YouTube because it seems like something that they could really Like clamp down on and would give them a durable advantage. But I don't know, there's so many other ways to attack any of these model developments

that there's a lot of different options. So there's a couple parts of the data question. The first part is like, what do you own versus what do you scrape? We've seen companies like OpenAI will scrape YouTube as well to train their models. I think ByteDance also like, you know, here we think of YouTube and Facebook and whatever here in the US, I mean, as being the big host of content.

But like, there's all these massive companies in China, like ByteDance, who have their own user generated content on like their version of TikTok and their version of YouTube and their version of all these. And I'm sure there's reposts of American videos over there. So it's not like even has a unique flavor probably can generalize pretty well, right? Totally though. Yeah. Like I was one of the very early users of all the Chinese video models when you still had to access them on Chinese apps with Chinese phone numbers and they were definitely very good at things that were more China oriented than the US models. That makes sense.

Oh, okay. The other, the other thing that's important to mention on data is in video in particular, it's not just the volume of data. It's also the quality of data and the quality of data labeling, because essentially you can't just feed a video into a video model and assume it can understand what's going on and pull out the relevant info, you have to have really sort of dense labels is what we call them or super detailed captions

about like, this is this style shot, shot from this sort of camera, the camera is coming from this angle, this is the sort of character, this is how the character is interacting with the background. And that quality data is what drives quality in the video models. And China has really benefited there because there are so many more PhDs than there are here,

and it's much cheaper for these companies to hire them to do these dense labels for the video data. Yeah. Well, how does Mid Journey fit into all of this now? It's such an interesting company because no venture dollars, this like behemoth kind of quietly hiding in a Discord server still. I saw some examples of video. It looks fantastic. Seemed like they hadn't added audio yet, but how do they fit into the whole piece? Because it seemed like early on they developed a really great feedback loop for the data that maybe wasn't happening with some of the other model providers. Yeah. So the mid journey model came out this morning, um,

really conveniently, like 10 minutes after I put out my market map without the journey video because it was not yet available. Um, I was just playing around with it too. It's, it's really cool. They do image to video. Um, and they, and so they don't do text, the video, which is actually sort of easier. They can start with their, the super high quality images that they generate on the platform and then animate those.

I think they have like a low motion and a high motion setting. From what I've tested so far, it's better as sort of like a low motion, scenery environment, light interaction type thing. Like you have a photo of a person and you can then animate sort of rain and wind and them walking slowly. And it's not as good at like what I call physics heavy world model type things, like two cars

running into each other and exploding. That sort of thing requires a very, very large and costly, usually like text to video model that is more difficult to train. Whereas Mid Journey, I mean, I have no idea how they did it. It's a great model. They could have taken one of the open source image to video models and fine tune it on all their own data. Yeah. Yeah. I've noticed VO3 is really, really good with some of that physics stuff, but it still gets confused. Like if a car is driving away, all of a sudden you'll be looking at

the front of the car and then the back of the car, and it'll get kind of mixed up. Yes. But yeah. Are you, as all these different models have progressed, I always remember Brad and Trevor McFedries and just how early he was to what I think will be this new wave of a- Is that Lil Micaela?

Yeah, Lil Micaela, which was basically a CGI influencer. So very early. I think we're going to see a lot more of this. And we've seen some of this to date, but do you expect that to be kind of like a new, like, how bullish are you on sort of entirely AI creators getting real adoption, following, following is turning into real businesses. I'm sure you follow a bunch of them already.

Yeah, I'm personally super excited about it because it kind of separates the content from the character. Like now, before AI, if you were on Instagram, you were both the character and the person coming out with the content. And so you had to look in a way and present yourself in a way and talk in a way that was interesting to the Instagram algorithm. And now it's like anyone with a good idea can create a compelling character. And so I think some of those are human characters. I've already seen

way too many examples in my Reels feed of OnlyFans models who promote themselves with AI avatars of themselves now, which works shockingly well. There's some photorealistic human influencers, but honestly, some of the more interesting ones are things that could never be influencers before AI. So there's one called like Raccoon Stole My iPhone, and it's an AI raccoon influencer. There's AI capybara influencers. There's mystical creatures. All of these things that just come out

of people's imagination. Competing for Mindshare with Instagram pet pages, dog pages, things like that. Did you have a reaction to Fountainhead? It was the, or sorry, Mountainhead, not Fountainhead. Mountainhead, the movie, the core overarching theme was that basically deep fakes or AI-generated content had gotten so good that it was causing global unrest.

Did it resonate at all? It does feel like I now have multiple times a day, I'm seeing content online. And we're both in the Community Notes program, so it's like you see content getting Community Note. It's one person says, it's not real. Look at this link.

It was this image. They redid it. Another person says, it's real. Look at this. So it's like, I just assume that everything's fake and made up unless I see it with my own eyes. But I'm curious if it resonated at all with you. So I largely consume AI slop, so I have not seen it.

I should watch it soon. You should watch the movie, the motion picture on slop. Yeah. Once they have that, I will watch the full film. But it's so interesting. We talked about this a lot, actually, with audio models, with the last election cycle. Because video, I think, wasn't there yet to have convincing deepfakes.

But audio, there were way less cases of, even though you could make really realistic voices cloning candidates and saying things that weren't true, there were way less examples than we thought of that actually impacting any election in any sort of meaningful way. And I think part of it is things like you mentioned, the community notes program, election in any sort of meaningful way. And I think part of it is like things like you mentioned, the community notes program where like you have sort of citizen watchdogs on

various platforms saying this is real, this isn't real, running them through various sort of AI detectors. But I also think like people are starting to develop more skepticism around everything they see online and whether or not it is real, which is probably not a terrible thing. Yeah. I had this take that after effects would be more impactful on the election than AI video because like you can just show a clip of a burning building

from 2020 and it's real video, but you recontextualize it and say, Oh, you know, the, the, the, the capital's burning or something. And it's from years ago or, or just, you know, speed up's burning or something and it's from years ago or just, you know, speed up a video, slow it down, edit it out. They would do this with various politicians, you know, cut out the ums and uhs and they'll sound sharper, add a bunch of gaps and all of a sudden they sound like they're slower.

Yeah, it even, you know, we're here in LA and when all the imagery was coming out of the protests from a couple weeks ago, it was like burning Waymo's. Kind of looks like something you'd generate with VO3. Just because it was so symbolic and just such a crazy image. And then like make an image of a guy with a Mexican flag, riding it, doing burnouts around a car that's on fire. And it's like, that looks like, you know.

And even just the way that was photographed, there was like, it looked like all of Los Angeles was engulfed in flames But it was really like one crazy block with a bunch of different angles Yeah, and then a bunch of different posts and and you drive around That's the other interesting thing is like even real footage can be manipulated Like any kind of story can be manipulated in a way like AI. Yeah, are you? Are you seeing I think I think, there's exciting companies like WorldCoin doing proof of human.

Are you seeing any infrastructure players trying to do anything on content verification side and trying to create some sort of mechanism to prove whether something was actually shot on an iPhone, right? Proving through the metadata in some type of public setting. Is there any pitches from that side? Yeah, so largely, honestly, today, that has come in two places.

One is the model companies themselves will often watermark the content in some way. Like the VO3 generations has a little VO3. 11 Labs, which is the audio. They actually have a site where you can upload any audio, and it will tell you if it was generated with 11 Labs or not. That's cool. Which is pretty cool.

The other place we've seen development there is for prominent individuals, like celebrities or someone who there's value behind their brands and who potentially even might want to monetize it in the age of AI. Like if you're an actor and you suddenly don't have to, you know, film, go fly back to LA when you're filming a movie in Australia to tape like five ads for some cell phone brand and you can have your AI avatar generated to do it instead and it looks just as good. Like you might actually want to, you know, have some licensing company that owns your AI licensing rights, whether it's your traditional talent agency or not, who can manage that

for you. Yeah, totally. Very cool. Well, thank you so much for talking about it. We can talk for another hour. I have so many more questions in our doc, but we'll have to have you back. Awesome. Thanks guys. Thanks, Justine.

We'll talk to you soon. Great chatting. Have a good one. Up next, we have Anish from Traversal coming in the studio, kicking off our lightning round. It's our new lightning round. We're getting to every single financing. 1, 2, 3, 4, 5, 6, 7.

Every single important startup update. Founders back to back. Welcome to the stream. How are you doing? Doing super well. Thank you for having me. Great to have you. Can you kick us off with an introduction? What do you doing? Thank you for having me Off with an introduction. What do you do? Hi. Yes, my name is Anish I'm one of the co-founders and the CEO of traversal where we are basically trying to build an AI site reliability engineer

So when you have software systems, they break and we try to help troubleshoot why they broke and how to fix that Is the current status of the market entirely? Is the current status of the market entirely human site reliability engineers or are there like a suite of tools that are just not AI enabled enough and you can kind of piggyback on? Yeah, so I'd say the current state of observability, I call it observability 1.0, has been putting a lot of eyeballs in your data. So essentially the great iconic companies now like Datadog and Splunk and Grafana and Dynatrace. And what they basically did is help the store your data

and then help you visualize it through, you know, numerous dashboards. But the toil of actually figuring out for an on-call engineer what happened is, what I call dashboard dumpster diving, that's what they still have to do, right? And there isn't that intelligence layer of actually helping you search through this petabytes

of data. I think that's what they still have to do. Right. And there isn't that intelligence layer of actually helping you search through this petabytes of data. I think that's what this new generation of AI agents and LLMs and some of the research we have done now, PhDs, uh, unlocks now. Yeah. Have you been tracking? I mean, it feels like site reliability engineering should be benefit a beneficiary of AI. And yet it feels like we've been seeing more and more outages like cloud flare went down. Google went down. We had another outage while we were doing the show, the whole internet went down. It feels like it's been seeing more and more outages like Cloud Flare went down, Google went down, we had another outage while

we were doing the show, the whole internet went down. It feels like it's happening more and more. Is that just me being more sensitive to it or more news or I'm just online more? Or are these systems actually getting more fragile? Yeah, I think two things are happening. One is, as humans, we like to push the limits of everything we can do. And so we're always going to be pushing the limits of software systems and they're getting more complex, there's more microservices and that was happening before

the age of LLM powered code agents. Right. And now with everything happening in the world of AI software engineering with Cursor and get a co-pilot and windsurf and so on and so forth. I think the amount of code that's being written is there's going to be like a Cambrian explosion. Right. I think most of it is going to be written by AI systems. And so this isn't going to get even more complex and less of it is going to be written by AI systems. And so this is going to get even more complex and less and less is going to be understood by us who are as engineers. And so I think it's going to be even harder to debug things

because we don't actually understand what's written and it's more complex. And so I think that's actually going to throttle the use of AI software engineering tools and mission critical systems because if I'm ahead of infrastructure, I'm like, I don't trust this. I'm not gonna allow this to affect my core infrastructure. And so I think you need tools, Observability 2.0,

to help actually be in line with it, I guess. I feel like finding truly great SREs is like a massive challenge. Like, how do you, like, you know, if you can deliver on the product side, how much bigger do you even think the market demand for great basic? Effectively, it sounds like you're

wanting to offer productized SRE talent. How much demand is out there for what you're building? Yeah, so first of all, we've been trying to hire an excellent SRE and we still haven't been able to. So there's a massive labor market discontinuity where it's impossible to find fantastic SREs. But I think if I think of the role of an SRE,

the way I think about it is it's all about the health of software systems. And I think of it as the master hierarchy of needs. So in your level one, you have a heart attack, you gotta deal with it right now. And I think that's what having a production incident feels like. And that's where SREs have to spend a lot of time

where everything else, nothing else matters. Level two is when you have these like constant stream of alerts happening, that's the equivalent of having like some sort of like chronic condition that you have to deal with all the time. And you can't think like a year in advance. And only when you can deal with these things, you can start thinking about like your long-term health and like life hacking and Optimizing your sleep and that's where I think you can think about the long-term health of a software system

How you would architect it over the next four or five ten years? And so I think all of the time right now for SREs is being spent in like having a heart attack and a debilitating condition What I think they should be doing in the best R series is thinking about the long term health of a system. How do I architect the system for the next five years so that it's robust? And I think that's what they want to be doing, but they're forced to be on call all the time. And so I think that's what we want to stop them from having to do and they can spend their time on the more meaningful aspects of their jobs.

Talk about the trade off between fully agentic systems here versus more of a co-pilot dynamic. Yeah. So I think if I think about it, there's, there's, I think it was a two by two. So think of the Y axis as the severity of the, of the issue. So you can have alerts that are happening all the time to really complex incidents. And then on the other hand, you have how agentic is it? So on the close to zero would be you have a run book. You have some sort of playbook that exists

and you have humans or engineers go execute those runbooks. And on the other end, you have a, you know, where you really don't know what to do. And so you have 50 people in an incident war room trying to figure out what happened, right? So if I think about for low value alerts, typically you have a playbook or run book that engineers can go execute.

That's I'd say less agentic because the meta workflow is always the same, which is like look at this dashboard, then look at this logs and correlate between them or something. On the fully agentic side is when even teams of engineers have no idea how to solve it a priori. And that's where you need to come up with architectures that are truly novel, where it doesn't fall into a pre-existing run book.

So that's, I think, the type of architecture you have to build to deal with the most visible incidents that an enterprise faces. I think that's really been our focus of the company. Last question. I was going to say, are you the first assistant professor at Columbia to raise $48 million in the first two financings of a startup?

Is there anybody that's got you beat there? I don't know. But Columbia's been an absolutely wonderful partner. I think they've been very supportive. I think they understand the importance of AI and how, in my opinion, this is the industrial age of AI. So if you want to be a good researcher, you have to be in the weeds learning how these systems work.

You can't just be theorizing in a vacuum. And I think everyone, myself and Columbia, understands that they've been an incredibly supportive institution. And yeah, I hope that I continue my relationship with them over a long time. That's awesome. Talk about the traction to date.

You guys have been in stealth. I'm sure you're gonna get a flood of inbound interest today, but yeah, who are you guys building and working with so far that you can share? Yeah. So we've been, I can talk about a few that I'm allowed to speak with and some I can't. But they've all been some of the largest enterprises

in the world who, basically any company that cares about downtime. So those turn out to be companies like infrastructure companies, payments, streaming, financial institutions. Because if you go down, your customers feel it immediately. Those have been the customers that we have typically focused on, or they've been attracted to us as well. And we found that actually as you go to the larger enterprises,

two things happen. One is they actually have all the data, because if you don't have the data, we can't do anything. And so the instrumentation is mature, but at the same time it's fragmented. You have so many teams, so many different services. And so I think that's where an AI agent that can talk to all of these different systems at the same time adds a lot of value.

So we have found ourselves more and more pulled towards the enterprise. And yeah, it's deployed in a number of, you know, mission critical environments. People are using it every day to help them troubleshoot pretty complex incidents. I think that's what we feel proud of, I'd say. It's great that this product sort of self-selects

for really high quality customers that are gonna like, once they onboard and they're getting value we'll probably be customers for years and years and years. So very, very exciting. John, I think it's time to hit the gong. Absolutely. He's not gonna come on the show. And here we go.

$48 million. Congratulations. Fantastic lineup of investors. Sequoia, Kleiner, great group. Yeah, fantastic. Thank you for coming on. Thank you for having me. When you have news, and congratulations

on the milestone. Have a great rest of your day. Up next, we have John Lee from Sapphire building electric mobility. Very excited to talk to him. John, are you there? Welcome to the stream. How are you doing?

Hey, how are you guys doing? Doing great. What's going on? Would you mind kicking us off with a little bit of introduction on yourself and the company? Yeah, absolutely. Just quick background on me. I was a former contracting officer in civilian side

at Naval C-6 System Command headquarters where I was in procurement for different systems from NATO C-12 missiles to submarine solar sensor systems, counter ID jammers to energy upgrade systems on the Indian Navy ships. Left-handed volunteer as head of contracts for the US government where I helped to increase their revenue in, you know,

then some of the large contracts there in the three over the large contracts there in the over energy, million dollar contracts there. And then went off to do a lot of other helping startups, most of them are ex-palantir friends, and are trying to get contracts from the US government helping them to go to market side. And then I've met with my co founders to start Sapphire, and we're celebrating electrification for defense, starting with some of the

deepest IP from the US government, where our first IP is out of Oak Ridge National Land. It's great to meet you. Yeah, what's the, what is the main gating factor in electrification in the military? Is it on the supply side? Is it just on the deployment side? Like, can you give us some concrete examples of where electric systems can be leveraged for the warfighter?

Yeah, absolutely. So right now, absolutely for sure on the supply chain side, there is an absolute shortage of, if there is a surge capacity need for us to be able to produce in the US from the cathode to the anode and up, and have the vertical integration to be able to do it on our own, there is a lack. So there is a huge push from

US government to make sure we onshore or re-industrialize from ground up in terms of that production capacity, especially when it comes to surge capacity. If and when we need it, we need it. And we're lacking behind in their production side. But also we're just behind in the advancement of how the battery cells are evolving and how we need more energy power on the battlefield. It's not interoperable. It's not interchangeable. And there's not enough of it, especially when there's no grid. What are some of the most important weapons systems or just defense systems that are impacted by that? Yeah, absolutely. So it actually goes all the way down from handheld for soldiers and up.

So we're talking to an Air Force research program manager and there was an actual case where there was a soldier that's doing an airstrike call halfway through loses battery and the coordinates are still on him and because of that battery loss it was a friendly friendly airstrike fire and that just is not acceptable uh that is such a easy elementary fix to be able to have a battery management system software that allows us to reserve that extra percent is an advancement that we have not been focused on is something that we need to do. But on top of that is the grid is to be able to provide a tactical

microgrid out at the edge where hey, if all the power goes out, bring it in. And now we've got a tactical microgrid out at the edge where, hey, if all the power goes out, bring it in. And now we've got a tactical microgrid that's solar powered, self-sustaining, that provides an interoperable also energy source to mobile systems as well as standing systems. And that network availability also does not exist today well. What's, oh, sorry. Talk about the decision to be dual use. I'm sure there was a lot of thinking that that went into that it'd be interesting to get your insight. Yeah, absolutely. That's certainly Amazing question. There was something we've been learning a lot from since the company started

so the our core IP technology is out of Oak Ridge National Lab where some of the nuclear materials were invented and technology is out of Oak Ridge National Lab where some of the nuclear materials were invented. And our CTO has been there for over 20 years and he's got funded by R by E to work on a silica nanoparticle that we're going to lift in my own batteries. Essentially, if you ever play with water and cornstarch, it creates this thing called a uble. It's a very fun project for the kids. It's a non-Newtonian fluid, but we're doing that shear thickening effect in the battery cell. And that happens immediately upon a bullet hitting the battery or a car crash hitting it. Then it solidifies from liquid to solid, preventing it from crunching up and providing extra structural strength for added safety. And so we started

having conversations. We kicked off the company three years ago, raised friends and family around and kicked off the company and we were talking to electric vehicles and defense at the same time. And what we really wanted to really understand, like what I'm really passionate about is protecting and saving lives. Like I could care less if it's, you know, 10, 10 technologies or 100 technologies do it, like I'm going to protect and save lives. That's where my passion is. When I was working on the counter IED jammers to put into our vehicles in Centcom so that the enemies cannot blow up the IEDs under our vehicles as a contracting officer, then it was just kind of a moment where I was like, I couldn't do anything unless what I'm doing is impacting and hoping to protect

and save lives. And so we talked to EV companies and they wanted more safety, but they also wanted to increase performance and decrease cost. They want it all, right? And so we are, so we went to really focus on how do we decrease the cost. So now we're really focused on, we went back to the drawing board on the EV side to say, okay, with our product goals, it's a lower cost than the aluminum and steel that's surrounding the battery packs. And so we're looking at how do we decrease the weight

to increase performance while having same, if not higher safety on the EV side. But that sales cycle is actually, I've been working with the government, you know, pretty much my life in defense, and I think government was slow, but EV could be slower. And I was just kind of like, wow, if I wait until we have, you know, this technology and we keep building it, it's not like people will just come and buy it. It's just not how it's going to work. That's not how we did at Palantir.. It's just not how it's going to work. No, that's not how, how we did it.

I volunteer. Like we, we have a playbook here. Don't recreate your playbook. We're going to go to the end user and figure out what they need. And then we're going to give them what they need. And however, it doesn't this model fits that is what we're going to create. And so that's the approach we took. On the defense side, um, is this something that you could actually go and build a whole program record around,

or do you just need to be a sub prime contractor and invent into some of the larger primes as they build out new systems? Yeah. So we really flipped, um, uh, the entire business model in his head from the beginning where we say, Hey, we've got a core IP. How do we create this? And then, you know, it, in the traditional sense, you would say, hey, we've got a core IP, how do we create this? And then, in the traditional sense, you would say, let's build it, let's sell it to another supplier

who then supplies it to another system, and the system will sell it to a customer. Instead, we just went straight to the customer, we say, what do you need? And they say, we need an electrical tactical dirt bike that can be deployed out of air, deconfigurable, reconfigurable, and can be parachuted down.

When it lands, I don't want it to blow up from that impact. And it has to go X amount of miles and it has to carry 350 pounds because we have gear. It's not a 180 pound type of bike. And that just didn't exist. And so we partnered up with the subcontractor with the top dirt bike company and we newly designed a electric dirt bike

tactical for Afsoc, air combat controllers, us as a prime. And that was the most important thing we said, we're not gonna wait for somebody else to sell. We're gonna own the customer, we're gonna own the supply chain for the gaining rate and become that next next gen systems in here 2.0 that we all know is in a dire need. Electric dirt bike for the military

just sounds like something straight out of like a Cod side mission or something. It's incredible. We're down to test. Yeah, yeah, yes. At least send us one. I do not have a motorcycle. I will be burning out around the gong here.

Yes, yeah, it sounds amazing. But yeah, thank you so much for stopping by and telling us about the business. This is fantastic. We'll talk to you soon. Awesome, well thanks so much for having me. We really appreciate it. Of course.

Cheers, John. Thanks for coming on. Up next we have Connor from Speak, language learning program. Let's talk to Connor. Welcome to the stream. How are you doing today, Connor? Hello, hello.

Welcome. Thanks for having me. I was expecting you to come on and say, just start talking in a variety of different languages. Yeah, because English is, you're not impressing us. Drop some foreign languages on us. Do you speak any foreign languages? Wow, great question.

Just getting right into it. I mean, I should be able to speak Spanish because I took five years of it in high school and college. And I have the classic story of, I learned everything except how to speak, which segues into what we're trying to do. And sure, we finally have Spanish. So, you know, I'm working on it. I'm getting better very quickly. Yeah, break down a little bit of history of the company because

it's interesting, go to market interesting history. Interesting strategy. Sure. Yeah, I mean, for context for everyone, we are trying to build the world's best language teacher using AI. So imagine, you know, a really good tutor, but they're in your pocket available whenever, wherever thinking about how best to teach you. And it's speaking first. But yeah, the kind of interesting and weird thing about our history is we started this company a while ago, we've been working on it for like eight years. At this point, the first few years are really just like AI research into how we could use AI to build the technology.

And then we realized that we need to go focus on one market. So we spent the next four years or so focusing on a single market, a market that I had literally never been to in my life before, which was South Korea, a market where there's not really How'd you pick that? So we kind of did a bunch of different market analyses. We built a free app and we like released it in a bunch of countries and saw what kind of traction we had. But ultimately the thing that was the most convincing to me was I went to South Korea to talk

to some of our earlier users. And I saw like literal skyscrapers that were filled with English classrooms. Interesting. And it was just very clear that the country was obsessed over learning English but there was also way more competition and solutions there than anywhere else in the world so we we really thought like the only way we were going to build something interesting is if we actually build something substantially

like structurally better using technology like a 10x solution and that market was going to be the market where we get the most signal because the only way it would work is if we actually built something unique and you know today we are the clear number one leader we've got about 80% brand awareness we've had double digit percentage of all South Koreans try our product and yeah it's Air Horns what's the universal universal yeah, it's. Airhorns. What's the universal? Universal.

Just the universal language of celebration. It's a real universal language. It's the boo-hoo-zay-la of celebration. Walk me through how much value you're trying to deliver in the product. Am I benchmarking this more towards a fun app to noodle on from time to time or you know a college level curriculum that actually will you know almost guarantee fluency

if I work through it. It's really the second like like people do become fluent if they use our method and and really the benchmark is these you know cram schools in Korea that people are spending hundreds of dollars per month on, or there's private tutors that cost 40 to $80 per hour to study with. And that's really like the thing that we're benchmarking against and really trying to surpass

in terms of efficacy and enjoyment. I'm trying to think you guys have raised a lot of money from a bunch of great investors. I was trying to think, you guys have raised a lot of money from a bunch of great investors. I was trying to think through how they might think about risk factors to the business. And one of those I could imagine would be real-time translation with AI gets so good that maybe people don't feel the same drive to learn languages. Now the counterfactual or counterpoint would be something like you know robots being much better at chess than humans yet you know humans still love to play chess and so I I'm curious how you think of that

or if that's something that's kind of come up at all and and how you would address something like that. It comes up all the time. One term that is in some sci-fi books is the idea of like a babble fish, you put something in your ear, which by the way I think will be launched by many companies this year. I mean Google kind of released that with Google I.O. last month as well.

Apple too with AirPods a little bit, they teased it at WWDC. Yeah, exactly. So that's gonna happen. I mean we're already seeing this bidirectional real-time audio, speech-to speech to speech technology proliferating. And my response is always, you know, what we're ultimately doing is we're building something that is all about human connection and aspiration. Like the reason people learn languages is because they actually

want to be able to connect with other people and they aspire to, to, to, to, to be someone that speaks multiple languages. And that's the fundamental behavior we're helping with. And so if you think about like the world's greatest translator, like the UN translator that's like highly paid and stakes are high, there's still an immense amount of friction in that interaction. And so especially when you're learning a, because it's, you know, for example, English, and it's the language that will allow you to

travel the world and talk to anyone. Or really, frankly, any language, I think that people will still want to do that in the era of really great live translation. And in fact, my contrarian bet, acknowledging I'm extremely biased here is more people will learn languages, not less, because it will become erratically more enjoyable and easy. Imagine you just have your best friend who's teaching you every single day and that person is funny and knows all about you

and can talk about whatever you want and make it extremely personalized. I think a lot more people will do that. Yeah, it's humans like challenges. It's very challenging, it's fun, it's stimulating. Look at chess.com. Yeah. Business. Yeah. Business is ripping.

And Chess has been completely solved by AI for years. Yeah. And yet people do. Talk to me about what's working on the customer acquisition side. I want to hear about the footprint of the business internationally and domestically, and then just kind of like the pricing model

and how customers think about actually paying you for the service. Yeah, so I mean, the business model right now is quite simple. It's just a consumer subscription business. We have multiple tiers. And that idea is we can build tiers for the people that are really dedicated and want all of the power tools and intelligence behind it. Um, and we do charge a premium. Like it's, it's a little bit more expensive than most other, uh, you know,

consumer subscription businesses where we're talking,'re talking, depending on the market, somewhere around $100 a year to over $200 a year. There's a lot more room there to play and we're just getting started. But the, yeah, I think size of business and where we're at today. So I mentioned South Korea is kind of our bread and butter. That's where we've been up until relatively recently,

trying to stay under the radar and just work on building the best possible product. And then we've really started to expand in the last two years or so. And so we're now becoming a very popular brand in Japan and in Taiwan. And we've actually now expanded coverage to over 40 countries around the world

in the last few quarters. And just yesterday, we have now gone from an English language learning app to a language learning app with the launch of learning Spanish, Italian, French, Korean, and Japanese and more languages on the way. A large part of why we're even able to do that is because of all the like agentic AI content creation. Sure. Like localization has to be like, completely one-shot-able by most modern LLMs. Like you can just, like, this is the transformer. It's really good at transforming stuff.

It transforms things from one language to another. It's like the best, the most bread and butter. Yeah. Anything else, George? Very cool, very cool. It's fantastic. We gotta get on there. My Chinese is a little rusty.

I know how to say it. What do you know? Yeah, what is it? Wuhun shi wan pi zhou. Wuhun shi wan pi zhou. Which is not even factually correct, but it generally means I really enjoy beer. But it's a good line to have if you're ever.

I don't think we should go to China. But it's a good line to have in your back pocket. Totally. Totally. I just know bu back pocket. Totally, totally. I just know booyao don't want if somebody comes up to you on the street. I don't want it. I know.

Ni de yan qing han mei. What's that mean? Your eyes are very beautiful. Oh, there you go. Wow. That's a good one. Honestly, between the three of us, we could. I think we're going to clean up out there.

We could establish a beachhead. Tell the people to go away. Compliment some people. And some nice compliments. So it'd be fantastic. We would, we would thrive. Yeah. Come back on when you have news. Yeah. We'll talk to you soon.

Okay. Have a good one. Thanks guys. Bye. Cheers. Really quickly. Let's tell you about Wander. Find your happy place. Find your happy place. Book a Wander with inspiring views, hotel, great amenities, dreamy beds, top tier cleaning cleaning 24 7 concierge service It's a vacation home, but better folks. It's summer next up. We had summer get on wander studio

and Before we get to Trey a tenor Let's tell you about bezel go to get bezel comm your bezel concierge is available now to source you any watch on the planet Seriously any watch get on there Yeah, you can see how Jordy knows the beats of the delivery seriously any any watch watch. How did you sleep last night? I got destroyed. I had a rough. I had a very rough night. I had a very rough night It was honestly I got a little cocky. I slept really well Monday night. Yeah last night. I night I got six hours, 17 minutes.

Whoa, 62. The tides have really turned, John. That was truly a generational run. I got to make it all back tonight. I'm sleeping 10 hours. Make it all back in one sleep. In one sleep. Nobody out sleeps me.

It's the best. Sleeping 10 hours is actually surprisingly challenging. Yeah. It's almost too much time. 25 kids. It's brutal. In other fundraising news, Applied Intuition closed their series F round of fundraising

at $15 billion valuation. We had Kacer Younis on the show at Hill and Valley. An absolute dog. He's going to be running out of a, running out of letters soon. Yeah. I mean, he's got quite a, quite a few to go. I wonder what the latest series letter we've ever that has ever been done in venture history.

Like has, I know people have done F but have we seen a series K? Have we seen a series S like how far down the, far down the alphabet has anyone gone ever? I could see someone like a Cluley just raising like one dollar round, speed running it to get to the Series Z. That would be an interesting strategy. I could definitely see Stripe being deep in the alphabet. They've been going for what, almost 20 years now,

that business, 2007, 2010? I guess 15 years they've been in business. So they could be deep into the alphabet. SpaceX, I don't even know if they are numbering or lettering their rounds anymore, because some of them are so like, yeah, it's a tender offer, it's a preferred sale, it's a common stock sale, kind of just moves around.

What were you laughing at? There's always stuff to laugh about. Looking at the timeline? Looking at the timeline. What else we got? We have our next guest, Trey, from Tender. There we go. Here we go.

He's FaxMaxing. Hey, Trey, how you doing? The Fax Man. We're well, guys. Yeah, doing well. B did that. Blaring to see myself on that screen. Reverse. You know, you never picture yourself in mirror image. It's horrible.

Yeah, it is confusing. Well, thank you so much for joining us. Can you kick us off with an introduction of the company? We've heard TJ Parker teasing and educating us a little bit about this market, but I want to hear from you. Yeah, 100%. I mean, our solution, we work with providers

that receive patients. Those patients get sent from other providers, typically via what's known referrals, scripts. Doctors. Doctors, right? And those doctors, when they send a patient, they'll describe it as like sending a patient into a black hole.

The patient doesn't get contacted. They don't know where they're at. And it loses a ton of money actually to those receiving providers that are trying to convert those patients into real visits that end up getting denied if they don't have complete documentation. So it's a whole mess, it's a real problem,

and it turns out it all starts at e-facts documentation. Over 90% of these visits originate via e-facts documentation, and if you can solve the facts, you can really Drive a great outcome for those providers. So that's what we do. So I Like I hurt my knee I go into my general doctor and they refer me to a knee specialist and at some point There needs to be a whole bunch of faxes going on. Is that just for insurance or for everything? Yeah, so I mean imagine you get sent to that knee specialist and then the knee specialist says, hey, I really want to send you to a surgical center.

Now the surgical center has to go collect all this documentation to say, OK, Kugen, are you, maybe they don't address you by that name. But they're going to say, do I have enough basically to get past an authorization? Is the payer, the insurance company going to pay for this? Or do I need to basically say, hey, sorry, we don't have complete documentation.

I have to send you to PT. In that time. Weeks go by and you have no idea what the hell's going on. It's super frustrating. Um, I mean, you mentioned e-facts. We've heard a lot about faxes driving the medical industry broadly. What is actually the state of the art in the facts medical world right now? This conversation usually is like, it's like a misnomer, really. When we talk about what most times you hear people talking about facts, you should really think like emailed PDFs.

You should think e-facts, right? It's actually very rare nowadays, at least as well, what we see that people are literally going in and like putting the pieces of paper. It's, it's actually, um, you know, it's more like if you wanted to send, um, you know, you want to send a patient? I'm just gonna right-click download the whole chart, and then I have to send it somehow It's as easy as sending an email it just happens to actually travel on fax wires like that's the actual mechanism the protocol It's not SMTP. It's fax line interesting and that's important from like a regulatory perspective right that's right and to be honest

It's actually even that is a little bit overblown in many cases. It's very possible to have a secure email inbox, which we see a lot of as well. It's just kind of a legacy network and that's the one they use. It has network. Yeah, that's right. Interesting. How'd you get into this? It seems like this is bizarre.

Yeah, when did you realize you wanted to drive efficiency in healthcare business process? I, to be honest, I have no, like, I view like automation is kind of this like also sort of this like a false profit it's I learned about this from my mom who's sending patients out and she'd say trade it's like It's like sending patients into a black hole and it's not really like automation just so happens to be one piece of the component And the other big thing is nobody knows how much it costs, right? So if I tell you look it's gonna's going to be if I say, look, it's going to be three hundred dollars and you know that right off the bat,

you're actually way more likely to show up than if I tell you, look, we're going to have to determine your costs once you show up, which is what most people do today. And the reason they do that is because then they also have to go and run a check and make sure they understand how much your insurance is going to cover and pay for in the process. So really, we exist to solve the black hole problem. I don't really give a crap about solving the facts.

It's just like if you say you're going to solve a problem and the first sort of hurdle is, OK, there's a bunch of unstructured PDF flow. And if we can structure that, we get like a good chance at it. That's sort of how we approached it. No, not that much of a student in the game. Talk to me about the scale of the customer that you can sell to.

Is this something where if you go to a few networks and you win really, really big, it's kind of like game over? Or do you need to go to every single doctor in a local neighborhood and get them on board? Yeah, so I mean, somewhere in between, to be honest, right? Like there's, you have so much private equity in health care that you could if you think about the size of their markets, they're often

consolidating. So those consolidated entities, those are really our ideal, you know, customer profile. We do work with a number of health systems. But like to be like if we're just being honest, right, it's like if you want to centralize an inbox and a really a sales funnel When you think about the patient funnels really a sales funnel you still have to go do it department by department, so There's not like 20 deals to be done. There's probably more like 200,000 when you look at like the size of

Providers because we unfortunately can't work with like two provider shops, but yeah, what's the scale of the business like today? So we're processing we have 20,000 providers sending right so they're sending faxes sending emails We've got hundreds of providers using tenor to process and then we've got millions of patients Millions of patients let's go. Oh, thank you fucking yeah so Billions of patients let's go thank you fucking yeah so yeah man how much did you raise today we raised a hundred one million dollars there we go that's fantastic who how did the round come together what was that process like was it preemptive? Did you guys go out for it?

Who'd you get on board? All right. Who was the last one million? It was just a little bit of background. I literally got lost. So I'm in the Lincoln Center. We hadn't like completely unrelated to the fundraising that we had a big prospect customer event

in the Lincoln Center tonight. I get lost five minutes before because I wanted to grab some food, some nuts and I get lost. I'm sprinting to the door and I found it so I'm like running hot but so to answer your question like I Feel I sound really salesy right now to be honest I'm usually a horrible fundraiser historically horrible fundraiser this came together in like four days. It was like

The the business it was 25 mil a day Good run, right? You should have just kept going, why not? Most of our rounds have been, so we had a partner at Andreessen, I mean this is kind of like some of the fun shop talk, but you have a GP partner on most deals at Andreessen, so we had a GP and a partner.

Now a partner at Andreessen goes and actually becomes a GP over at IBP. Oh and what is what does he do he was just bored observing us for two quarters we said we're gonna hit the thing and he just calls me up after the quarter ends is like so did you do the thing and I said yeah we did the thing and so we did the round and then there were a couple of other firms that we just like really respected that were that were just like yeah we're doing the thing let's doing the thing. Let's do the thing.

And we did it. That's amazing. What's the use of funds like? Is this R&D heavy, spending a lot on engineering? Are there hard costs in the business? Is it hiring a lot of sales reps? Is there some sort of crazy payback period where you have to go and install, win a customer,

and then you get paid back over like a really long time. Because I imagine like this seems like a pretty low churn product if you can get it installed, but it might be expensive to do that. That's a great, yeah. It's really, it's an expensive deployment period. And so you're looking at an expensive first year, typically speaking.

So yes, the traditional, hey, we're going to keep growing the sales team. That's just been growing off of growth anyways. But get way ahead of the engineering team. We're launching this product. So we have these millions of patients, right? And I'll give you one quick example. It's kind of interesting.

You think about the fact that you got sent over to a, let's say you're sort of having trouble sleeping. It turns out you get diagnosed with sleep apnea. You now are going to get a CPAP. Now you might actually qualify based on all the clinicals you've done because you've been to a sleep doctor, you've been processed through a DME,

you've been processed through diagnostics. We have all your clinicals, we have your insurance, we can actually suggest to you all these other services basically that you qualify, you're eligible for to go and get, and whether that's additional consults, behavioral treatment, pharmaceuticals, things like that. And so we're launching this big network product and it's a huge lift on

the engineering team. And so we've been growing that team really aggressively as well. That makes a ton of sense. It's been an honor to hit the gong for you. It has been an honor. Chad, thank you for coming on. Congratulations on the milestone. I have a feeling you'll be back here in the temple with us very soon with how you're talking. So congratulations to you and the team. I was hoping I'd get some credit. It's like I see all these guests come on. I saw the jacket I was gonna say. Honestly, you wear it, it looks natural.

A lot of people put it on, it looks performative. It's like stolen valor. Yeah, so we don't want to draw too much attention if that's your daily, but we appreciate you dressing up for the occasion. You look sharp. You look sharp. And just do us a favor and never wear casual clothing in the workplace ever again.

Just make this a part of your daily. You're a health care technologist. You should dress as part of your business man. Yep. We got Fit Fridays. Fridays is the opposite of casual Fridays You have to dress really really nice going into the office here. There we go We're doing our part man. We're doing our part Great to see great to see a great chatting. Congratulations. Yeah up next. We got James from profound coming in the studio Oh, is there another gong hit coming in? Let's hear it

James is what's going on break down the news. What's going on? I got the mallet ready What's happening? How you doing guys? Great Well, we've already covered your raise. Yeah, we've talked with David Sendra We've got the backstory on how David Sendra met you and invested. But super excited to have you on to break down the news yourself. Yeah, thanks for having me.

Yeah, and congrats on all the TBP interaction as well. It's inspiring just to see your story continue to take the main stage. Thank you. Thank you. We had you on recently. What's happened since? Talk about the main stage. Thank you. Thank you. We had you on recently. What's happened since? Talk about the new round.

And then I want to hear about traction and kind of what you're seeing on the product side as well. For sure. Yeah, I guess since we last spoke, it's just been a lot of days in the office. We moved office. We moved across the other side of Union Square, New York City. The entire team is here in person, working very hard. We're in office six days a week. I'd love to hear that as an investor. I'm not going to pretend I don't.

Yeah. I think, you know, it's very exciting. I think the tailwinds are mind blowing. This is a clear platform shift, maybe one of the biggest platform shifts in the history of marketing as hundreds of millions, billions of consumers turn away from Blue Link search and instead talk to platforms like Chat chat GPT and get a response. How your brand shows up, how your products show up, how your services show up in these AI responses is becoming like boardroom level discussion for every brand on the planet. So yeah, we're building Profound as a new age marketing platform to guide marketers,

every brand on the planet to this new generative internet and internet where you can talk to it and it talks back to you. I think the closest heuristic would be SEO for AI. But once you start to look underneath the hood, there's a lot of fundamental differences here. These models are opining. They give, you know, once you start to look underneath the hood, there's a lot of fundamental differences here. These models are opining. They give, you know, they have sentiment. They give opinions. You know, the kids are using chat these days

and, you know, more like an operating system. And yeah, how your brand shows up there is P zero. What are some of the big struggles that maybe legacy brands are facing in terms of shaping their, you can imagine. It's not something. Are there any canonical horror stories yet? I feel like it's not pretty good stuff.

Most of the time I see examples of this, it's always somebody screenshotting like, oh, I nailed it. Like the ChatGPT recommended my brand. But I imagine that there's probably some people that are having rougher experiences. Well, the models are probabilistic. So, you know, you ask the same question 10 times in a row and get 10 different sponsors. So that's kind of, you know, that's one of the

main upsides of using technology like profound as you get the kind of aggregate response across all of the major platforms. I mean, yeah, we, with Ramp as an example. They're an example customer and, you know, we 7x'd their visibility in a category where they didn't have much visibility. And the way that you do that is by you understand through lots of prompting, you understand how the models are talking about your brand, your products, your industry, your competitor, and where they're going in order to answer

those questions. And then you strategically start creating content for bot. And yeah, it's pretty tractable. Amazing. Talk about the round, who participated. It's a pretty great list. I'm biased, but David Sentra does not really angel invest. Yeah, yeah. It's very, very rare.

So you got him. Yeah, thanks. Yeah, it's cool. It's a real kind of like pinch me moment. We, thanks. Um, yeah, it's cool. It's a, you know, it's a real kind of like pinch me moment. Um, we're, we're working so Kleiner Perkins led the round. Um, so Ilya Fishman's taking a seat on the board. Um, in addition, we have, uh, coastal adventures. That's with Keith Raboy, uh, Nvidia, Nvidia, Saga Ventures. Sorry, sorry, didn't let you finish, but I had to go. Continue, continue. Saga Ventures, so yeah, that's Max Altman, Ben Braverman, Thompson Nguyen, South Park

Commons, SV Angel, and then a bunch of really great angels. Obviously the most important being a guy called Judy Hayes. Too kind, too kind. But yeah, give us an update on, almost like an investor update, which I won't share, but give us an update on kind of the, like, what is, I'm curious what the sales cycle is

right now with companies that you're talking to. I imagine this is like a kind of a hair on fire issue where they realize like, hey, we don't know what's going on or things are happening. What does that look like with some of these bigger multinational brands and companies that you guys are working with? Yeah, I think, you know think what they're realizing is true

is that this platform shift is so big that they need dedicated technology to understand and control how they show up in answer engine outputs. They can't rely on existing marketing technology, if anything, just purely because the space is moving and evolving so quickly, which I think is really evidenced by the fact that we are able to work. We're working with Fortune 10 brands. So literally some of the biggest brands in the world are using Profound. There's thousands of marketers on the platform now. It's hard to mention logos, you know,

as we all know, it's tricky, but some of the logos that we are able to mention are, so we have brands like MongoDB, Indeed, Mercury, DocuSign, Zapier, Ramp, Plaid, Rowe, Workport, Instinct, Absolute Squad, Che, what the hell? Absolute squad. Yeah. Uh, chime, us bank clay, uh, recent. Uh, so yeah, we're working with, you know, that's just the ones we can mention.

Um, and yeah, I think, you know, we're, these brands are coming to us because we've built the ubiquitous technology in this new category that, you know, we've, we've, we're sucking the oxygen out of the room and we're building a better product. And yeah, I think that's a function of a very talented engineering team here in New York. Basically. Category leader, working six days a week.

The only option would be to try to work seven days a week, but then you risk some major burnout. So better just not compete at all and just let James cook. Just be a customer. Well, thank you for coming on, James. Awesome milestone. And I have no doubt we'll have you back on again soon. Yeah, thanks for having me, guys.

Appreciate that. Cheers. Amazing. We'll talk to you soon. Bye. We got back-to-back guests coming in the studio next. We got warp and Senra systems. We're going to figure out who's joining first.

Senra is coming on first. Okay. We got Senra not David Senra, not David Senra. We already talked to him. We got Jordan, Jordan founder of Senra systems. Let's bring him. He is an emerging wire harness manufacturer. We're're gonna try and get Senra in the meantime I think we have warp. Okay, let's do warp Welcome to the stream. How you doing ready? There is sorry. Sorry for the chaos. I told you

You're here we're live on TVPN in the ultradome. Yeah, it's great to have you We're live on TVPN in the Ultra Dome. Yes. It's great to have you. Great to be here. Exciting, exciting day. Give everybody some background on you and the company and then we can talk about the news. Yeah, yes.

My name is Ayush. I'm the founder and CEO of Warp. And as some of you may have seen, we are the best way for startups to run payroll, handle compliance, hire people, and do all those fun things. We just also announced our 18 million series A. Let's go.

It's not the goal. John, I'll let you do the honors. Let's go wide. Boom. Boom. I have a feeling we'll need a bigger gong for Warp. Hopefully, we can get in here before the next round. Yeah, talk about competing in a big but crowded category.

And maybe kind of a little bit of the origin stories of the business as well because you're relatively new but clearly making waves. Yeah, totally. I mean, Jordy, you've known us from the very early days, I think. And we've been friends and kind of working on this from the very start. So I think you've seen that journey. But really, what I think about is, there's almost like such a high bar today for building incredible products, right? I think, it obviously comes to mind where, you know, you start out in this in this huge market and you see an incredible opportunity and maybe it looks like there's all these players, but if you can build an

amazing product, if you can give startups, companies the best product experience, that actually has a lot of demand. So I think on our end, we also saw that there's all these different tools that people kind of pieced together for running their company, for running payroll, handling compliance. It's very disjoint, it's very manual still today, especially for startups. And if there's one thing that startups hate, like I've done this before myself,

is stare at a piece of paperwork from government, like New York Department of Taxation, whatever, and have to do it themselves. And that's just so, so annoying. So we're kind of automating all of that for once, using tons of kind of automation, the behind the scenes to kind of accomplish that. And also just building a really, really amazing product.

So I think one of our customers told us this the other day is that using all these other providers feels like you're using like Bank of America to pay somebody or like TD Bank. But then if you use VORP, it feels like you're using Bank of America to pay somebody or TD Bank. But then if you use VORP, it feels like you're using Brex or Ramp or Venmo to pay your friend. And that's the qualitative product-like difference that we think about. How much are you thinking about agentic workflows and features versus traditional bread, you know, sass, bread and butter, crud, you know, traditional fintech, all that kind of stuff.

Yeah, it's a huge part. And I think we're being thoughtful about it. Like, I think there's a lot of players that are just like waking up to it and their approach is well, we're just going to jam like some AI kind of buzzwords kind of sound cool. But I think we have the luxury that we're starting in this, almost in this time where all these advancements are happening very, very quickly. So maybe you guys don't know, but like my personal background actually is in computer science,

specifically focusing on AI back at MIT. And so it was very cool to see some of these things early on right before this started taking off. And now we have the opportunity to build this in a way that is from the ground up. We can actually like architect this in the right way. So a lot of these manual paperwork, like maybe the customer doesn't even know about them or think about them. I know they're completely abstracted away from them.

All the PDF filing paperwork, taxation that would typically be their responsibility or their accountants or controllers, whatnot not. We can absorb them for the first time and there's no like middle ground that we have to cross where they're kind of doing it and then it's slightly automated and they're asking some chat UI no it's just like fully in the background automated. Where's the growth coming from?

I know you guys are growing quickly. You don't have to give us like, you know, the full secret sauce, but how and why are you winning customers over? I think the biggest thing is we have seen tons of founders just telling their friends about us. So if customers are using us, we target a lot of our startups, founders, a lot of the

folks that you would have known, like Rahul from JuliSI and Izaya fromland. And I think tons of these really cool startups that are building all these amazing products, they have lots of like Twitter presence, very online, and they'll tell their friends or tweet about us or say something positive. And I think that's been a huge driver. So first and foremost, just like building incredible product, people will tell their friends but also targeting these like very awesome companies that will spread the word. Why is payroll so oligopolistic? I feel like there's ADP, Paylocity, Paycom,

Pay something else in the public markets. Then YC has three unicorns in payroll. Yeah, do you look at it? I get that there's a lot of money. Yeah, I get that there's a lot of money where the money is, but why is there not more of a compounding advantage? Like what's the market dynamic is that expected to change or is it just like you can go and win even if you get 1% Of the market and that's like fine. I

Think it's definitely more of the latter. But at the same time It's almost like banking right like if you think about banking broadly How many different banks exist and fintechs exist and they all kind of can win big. Even some of the biggest players that are obviously like, in the ground steam of things, the market is so, so large that even a small portion of that can be huge. And every five to 10 years,

it seems like there's some new wave of technology where the consumer behavior shifts enough. So like one thing I think about a lot is the founder expectations have shifted a ton. They're used to using tools like superhuman and linear for running their teams and then they go log into like a Salesforce junk, like HR hefty thing. And I just kind of hate that. So I think there's some consumer behavior shift. There's also the fact that you can reinvent these things from first principles every five, 10 years. And then it has a big piece of that puzzle too. It almost feels like the opposite. Like it feels like, like payroll. It's such,

it's so cumbersome to rip it out that that it's actually a slower turnover. And so if it, as opposed to some of these tools, where it's easy to rip them out you if there's really really great Product that's actually better. You're gonna take over the market and get everyone to rip it out and replace it Yeah, very quickly, but payroll system. It's like pulling teeth to get it out of the system And so like yeah, I don't like the one that I have but I'm not I'm not gonna change or anything I don't know. It's interesting. Are you thinking about stablecoins at all?

They've been in the news in the last 24 hours. People have talked about the potential of stables helping. Maybe just like saving you money or earning you more float or something. It seems like most of the payroll companies are pretty mature in terms of like squeezing every penny out of the dollars that they transfer around. But is it a bull case at all? Or does it change the economics at all? I, from where we sit, I mean,

we haven't seen a ton of requests coming from customers directly, which is the main thing that I try to track. Right. But I think more macro level, it seems like the moment for stable coins is definitely happening. So I, I, I'm bullish overall, but I haven't seen a direct uptick into like payroll, especially because I think if you, especially for US focused use cases, which is where we are, we do global contractors, obviously. And that's a smaller part of like what we're doing. But for those players, it's probably a bigger thing than you think about for international. But I think the one one maybe like take that the U S uh, banking system gets more shit than it actually deserves. It's actually like quite good. Uh, the AC is the fed wires, even though they're

kind of old and we're stuck with them in some ways that they could be better. They're better than what people realize or give them credit for at least. Is that just because they've been wrapped in API so many times that like they're actually pretty easy to develop on or is the actual underlying system evolved and actually gotten better? It's both. I think the rise of fintechs and API's obviously make a lot of them very easy. But the one like the interesting thing is like if you look at India and I grew up in India, my family's still there, UPI, which is mobile wallet, they're actually a huge thing in India. And they basically around from 2015 or so, there was a period where mobile wallets just went vertical, almost within like a one year period. And the reason

that took off is India was largely a cash based society. So the Delta between going from like cash and change and like counting all of that immediately to phone wallets and QRs was massive. But in the US, you'll never get mobile wallets. Not in a true sense. What we do have is credit cards and Apple Pay because there's not enough of a delta. So like it's one of those things where the US figured out ACH rails and Fedwire rails and credit card rails earlier than all these other countries that are now just catching

up. So they get to kind of leapfrog and go to the next level. But we have like some of these things that have actually worked for a while, all these like legacy layers of technologies that are built around it, that we don't get to like immediately cross over because there's not enough of a Delta.

So we will be on like ACHs and FedWires for a long time, but they work pretty well. They're Lindy. Lindy. I think Gong Hit is in order. Oh, let's do it. Talk about the round. 18 million, Series A. 18 million, Series A.

Boom. Left by SoundVentures. We've got Drew Houston, Arash, Kyle Vogt as part of the round. Those are all MIT engineer founders. So, YC crew, we tried all the technical folks, some great people joining, and we're super excited and very thrilled. Did you graduate at MIT, right?

That's right. Air signal. No, no, no, no, that's the new bull signal. Yeah, yeah, yeah, that's the contrarian move. The contrarian thing is you actually graduate. Don't drop out, yeah, that's right. That's for all the new bull signal. Oh yeah, yeah, yeah, yeah, that's the contrarian move. The contrarian thing is you can actually graduate. Don't drop out, don't drop out. Yeah, that's right. That's for all the new outfits.

Congratulations. Yeah, put that club on your wall. Congratulations. It's been amazing to watch you execute over the years and excited for the next chapter. We'll talk to you soon. Awesome, yeah. Likewise. Cheers.

Next up, we have Jordan from Sentra Systems, not David Sentra's systems. These are high quality wire harnesses. Welcome to the stream Jordan. Hopefully we can bring you in. I know we had some back and forth juggling, but great to have you on the show. There he is. We did it.

Welcome to the stream. We did it. Welcome. I love when a plan comes together. Would you mind introducing yourself, the company, and what is a wire harness for those who don't know? Yeah, absolutely. I'm Jordan Black.

I'm the CEO of Center Systems. You probably don't know what the hell wire harness is, and that's totally fine. Just think of it as like an iPhone charger, but like a lot more complex. Like when you lift up the hood of your car, you see a bunch of electrical wiring. It just connects any two or more components together. And everybody hates it because it's entirely manual process to design it, entirely manual process to manufacture it.

And it's just a very like bespoke thing that hasn't changed since the Cold War. Top applications. I mean, you see it in the car. I seem to remember like the cyber truck changed their wire harnessing and reduced it by like, you know, it went from like 10,000 feet of wires to like 1,000 feet or so. Is that roughly like the right story or like, give me a more concrete example. Yeah, I

think the thing with wire harnessing, the more you have, the more expensive it's gonna be. So you've got more sensors and computers and things around your car jigs around your car or rockets or drones, uh, you're gonna have more wiring and it's become more expensive. So what Tesla did was really kind of minimize the amount of signals they had to go through. And there's a little more complexity that goes into that too. Um, but it's, it's in everything. Like that's the way you power your coffee maker, your rocket drone, missile, everything else. Because if you need to connect this thing that needs to send signal or power to this thing over here, the only way you're going to really do it is through copper wire.

Yeah. So cars, rockets, drones, planes, like what, what is the most common product that you're selling your, your wire harnesses into? Is it everything or do you have a specific focus right now? We do a little bit of everything, but right now it's mainly aerospace and defense. And the reason why is because it's very hard to get a high quality wire harness in the space, like not to get super morbid, but like the reason why I like the astronaut side of the Apollo mission was there was like a Nick on the cable jacket and there was a flammable gas and the whole thing sparked or, uh, there's a lot of launch failures or launch delays that happen

cause like they can't get a wire harness on time. And it's this hard thing because if you put a wiring in a car, it's kind of like it sits there, it goes through some bad winters sometimes, but when you put it into a rocket or a drone, it meets withstand crazy environments, get beat the hell up and it goes to space, it's in a vacuum, it's all over the place. And it has to be very precise on the ways it gets built because it's all done by hand today. So there's a lot of like inspection. And so that's kind of where this like bespoke process on top of the complexity and top of like it being something really niche that nobody really knows about

besides myself and the people who work at center on a very few people in the U S this is where we're trying to like take all that tribal knowledge, take all that processing and really kind of make a structured output of it too. So yeah. What, what is the key innovation here? Is it automation? Is it robotics? Better software, better, just skilled, just caring about it 10 times more than the next person. Giving a damn as you say on your website. I like the high level is like if any of us ran like TSA tomorrow,

we just do a way better job than like it is and so they're just like caring and just make like kind of just Getting rid of all the bullshit that's going into it But what we're doing from like fundamental portion is like the way Large companies today design wire harnesses and they use like Excel spreadsheets and PowerPoint sides No one's really trained on this thing and the way it it gets built is with hand tools and on a wooden table. And so the software aspect of it is we're creating this industry standard for how wire harnesses should be designed in our tool called AMP, where we can take the tribal knowledge we have and tell people this is how you should design it.

Because every time I get a wire harness, I go back and forth to the customer. I'm like, you did this thing wrong, I can't find this part, yada, yada, yada. And then to build it, we're actually using automation and we're using a lot of software processes to make it a really streamlined effects. Like you both can come to my factory tomorrow and start building a wire harness because it's not the most difficult thing to do in the world. The hardest part is just knowing exactly what steps to do and where to actually perform the process as well.

Talk about how the round came together. Did Dylan feel left some sharp elbows, elbowing out the platform? You don't want to get on the wrong side of board table with him. Yeah. Board rooms can be rough. But how did you guys meet and break down the round for us?

Yeah, absolutely. I got introduced to Dylan through one of our investors. And I FaceTimed him. I was, I think a weekend in Laguna and all of a sudden we just started hanging out a ton. And I been pitching that we were creating a wire harness design tool, which is the Figma of wire harnessing.

No way, yeah. Just to kind of explain what we were doing. Did he scare you and say, well, actually, Figma is the Figma for wire harnesses, and I'm going to eat you alive. Stay out of my territory. It's a little bit different. Yeah, a little bit different.

I've yet to get a Figma-designed wire harness to this date, but maybe one day we'll get it. And we spent a lot of time together. And I'll be frank, I'm obsessed with the guy. I think he's just so intelligent the way he thinks from a product standpoint, hiring his company, where taking something so bespoke, like a design tool as well and breaking into this industry that hasn't been changed in a while too, it kind of just really resonated with me.

Then we were chatting one day and I was like, I'm going to go out and fundraise. He's like, I'd like to put a check in. I'm like, oh, okay, like, classic made it in Silicon Valley, he's gonna write the check. And he's like, Oh, I like to, you know, own a substantial amount of the company in the round. And I was like, Oh, my gosh. And so it was kind of about a sort of taking out the fundraise and doing that. And I don't know, just, it, it really thought to

me of like, we have really great investors on the cap table. And I'm just super thankful about that too. But I'm excited to have someone who can be in the weeds with it and just like actually help grow this company, be this kind of like mentor, but also just like this company that we want to grow into as well too. And it's ultimately really exciting. And so I was like, let's do it. No one else can really understand the struggles and also the missions or the obstacles we have to overcome.

Then Dylan and we just kind of get each other. So that's amazing. What was the final round size? Twenty five million is the ground. Let's go. There we go. There we go. It's great news. Well, I feel like you'll be back here in the Ultra Dome very soon. Very soon.

We might need some custom wire harnesses. We're wiring up lights all over the place. There's actually, yeah, we got extension cords taped to the ground right now. Probably not your ICP, but we got a lot of. We'll figure out a way to integrate, for sure. Perfect. If you ever need anything, electrical wiring,

I'm your guy. So. Fantastic. What's the, before you go, how are the vibes in the Gundo? You guys are technically in Redondo. So I don't know if you claim Gundo. I'm calling it the Dondo.

No one's calling it. The Dondo. The Dondo. The Dondo, yeah, that's good. I've heard that before. That seems so obvious now that I think about it. Yeah. Yeah.

I think the vibes are very high. I think everyone's just so excited to build. It makes complete sense. It's not only a center up, but just even the companies in the space too. There's a time to build, a time to move fast, a time to build things correctly. And I think it's our turn to kind of start changing this entire industry, which is in the hard tech space.

And I think it's, yeah. What percentage of your customers are in Southern California right now versus other states, international, et cetera? I'd say most of our, I'd say probably about 80% of our customers are in the US, or is it any of us in Southern California? Southern California, yeah. All of customers are in the U S or is not any of us in the Southern California. Um, all of them are in the U S. Um,

but that's because they like kind of having this supplier, this, uh, face of just like I can come next year, drive over next door and just be able to support them and talk to them as well too. So it's old fashioned. I love it. Yeah. Love it. Well, congratulations. Thank you for coming on. This is fantastic. Very exciting. And we'll talk to you soon. Awesome.

Have a great rest of your day. Take care. Cheers. Bye. Well, that is our show today, folks. We hope you enjoyed the lightning round, the deep dives, the chat with David Cedra and Center Systems. Visualizing that conversation or getting dropped in there.

And Dylan's like, yeah, I'll throw in a check. Yeah, it's great. And he's like, cool. 50k, 100k. He's like, how about eight figures? I love it. Very cool. It's fantastic.

Hopefully we see more of it. It seems cool. Yeah, it makes sense. You get a founder on your board. It's about the different timeline. Everything's different about it. It's great. It's not about the fund or the vehicle that gives you the money.

It's about the person. It's about the investor. It's always about the person. And it seems like they have an awesome partnership. Yeah. Very cool. Well, anyway, leave us five stars on Apple and Spotify, and we will talk to you tomorrow.

Thank you for watching. We will. Thank you for tuning in. Have a great afternoon. Have a great afternoon. Goodbye.