TBPN - Arm Pumps CPUs, Social Media Addiction, Data Center Ban | Eric Goldman, Nima Jalali, Jon McNeill, Karri Saarinen, Dimi Kellari, Mikey Shulman, Aida Baradari, Zack Kanter, Nik Milanović, Zach Perret

Starting point is 00:00:01 Watchin TVPN. Today is Thursday, March 26th. We are live from the TBP and Ultridon. The Temple of Technology, the Fort Worth's Finance, the Capital of Capital. Let me tell you about ramp.com. Time is money, save both. Easy use corporate cards, bill pay, accounting, and a whole lot more. Let me also pull up the linear lineup because we have a monster show.

Starting point is 00:00:21 Jordy's back in the TBPN Ultradem. I know you missed him. We have Eric Goldman coming on to help break down the meta YouTube lawsuit. By the way, yesterday was the first time we've been live that I was not on the air. Yeah. And so I was watching in the third. How'd I do? Here, we can drop the linear line up. Linear, of course, is the system for mine and software development. 70% of enterprise workspaces on linear are using agents. Give me a review. How'd I do? I thought you did fantastic. I was texting you in real time. I probably sent you like 20-something messages of like, ask about this,

Starting point is 00:00:50 ask me about that. It was, yeah, somebody in the chat said I was free soloing TVVN. It was great. But we really bore down to our last few associates here. Tyler was out. Jordy was out. Who else? Nick was out. We were on, what do they call it, a shoe string or something like that? I don't know.

Starting point is 00:01:11 But it worked out. It was a fun show. It's not the same show without the soundboard. I was going to do this whole bit about like, oh, yeah, I got it, dialed. You can just, we don't need you on the show anymore. And then, of course, the fans would be like, no, bring back Jordan. I'd be like, yeah, okay, he's back. But I can't even joke about it because we need the soundboard.

Starting point is 00:01:30 It really is musical. It really is. Imagine if you were, I was waiting for you to just be spamming that. Just sitting there having a serious interview. Apparently, we have some audio issues. Okay, we will work. So fair with us. We're working on it.

Starting point is 00:01:44 But I can go through a bit of our guest lineup today. We have Nima. Some highlights. A friend of mine. He is a founder of Salt and Stone. Yeah. They recently exited the business as of this week, a massive, you know, multi-hundred-million-dollar deal. Very excited to get to understand the business better.

Starting point is 00:02:08 We have John McNeil coming on. He's an author to talk about Elon Musk's five-step algorithm for scaling Tesla. Then we have Kari from Linear on how linear is evolving in the AI age. And then we have a bunch of different founders, including. including Mikey from Suno coming on. And then we got back to back Zaks, Zach Cantor, Zach Perrae, going back to back Zaks. That's what I'd like to see.

Starting point is 00:02:34 Well, the big news of the day of the week, this has been going on all week, is that Arm, the intellectual property developer that creates intellectual property designs for CPUs, is now getting into the chip game. And they got a big arm pump in the stock market. So the company, company is up 15% over the last few days on the news that they will sell their own chips.

Starting point is 00:02:59 This is new for Arm. Arms is a very old company. Fascinating history. I actually made a 25-minute YouTube video all about the history of the company back in 2023. But we'll recap a little bit of it today. But they normally just license out their intellectual property. And that is a phenomenal business. 97% gross margins. 97% gross margins. Yeah, let's give it out. There we go. That's amazing. And, you know, it's a big business. Four billion in revenue last year, nearly 800 million of net income.

Starting point is 00:03:33 This new move, they're expecting to ramp revenue to $15 billion by 2031. So they're expanding the market significantly. Now margins will be different. But the market cap for Arm is now around $166 billion. So it's a big company. Treads at a very high multiple. Yeah, $4 billion last year currently trading. at 165 billion.

Starting point is 00:03:56 But very, very high gross margins. So this is a big shift in strategy. Arms not an AI loser by any means, but it hasn't gotten the attention that other GPU makers have received, like Nvidia. CPUs are far from dead though. In fact, we are currently in what seems like a little bit of a CPU crunch.

Starting point is 00:04:14 Intel can't make CPUs fast enough. Nvidia is starting to sell their grace CPU that goes with their hopper, so you get the H-100, and you pair it with the grace CPU. You get the GPU and the CPU all on one system. Well, now you can buy the CPU by itself if your CPU constraint. So you don't want to just be GPU rich and CPU poor. You've got to be rich in both camps. And a lot of companies are jumping in to fill this gap. So agents, and a lot of this is because of agents. Agents need CPUs. You need to fill the GPUs

Starting point is 00:04:47 constantly with new data and tasks. Also, all of the agents use CPUs to make web queries, search the web, run Python, spin up web servers, interact with anything. We've just seen, you know, we talked to some folks at semi-analysis about this. Like, uptime is going down for non-GPU accelerated workloads. Like, you go to a SaaS product that is basically just a web server that's running on a CPU somewhere in a data center and you're like, oh, this thing isn't loading today or like there's downtime. And a lot of that's just because we're writing more software, we're using more software as a society, as a country, and we need more CPUs as well as GPUs, even though GPUs are like the hot thing to talk about. So Arm has a very interesting

Starting point is 00:05:30 backstory. As I mentioned, you can go watch my 25 minute YouTube video about it to go all the way back and all the precursor companies. It's a really long story. But you can think about it basically as a joint venture between three groups, Apple, Acorn Computer, and VLSI. And so they needed to design a low-power CPU for mobile devices. Before phones, you know what was hot, Jordy? PDAs. And have you ever seen a PDA, Tyler? No.

Starting point is 00:06:01 You've never seen a PDA. Wow. Wow. Okay, so before the iPhone, you know, everyone had flipped phones, but before that. It's not a pager. It's not a pager. You don't know what this is either? No. Wow.

Starting point is 00:06:13 So there's something called a Palm Pilot. And basically it was like an iPhone-sized screen. and it has stylus and you could write on it and you could make notes and PDA stood for personal digital assistant and I feel like that brand is just itching to come back in 2026. Like that's what so many people are. Everyone is working on a PDA. Yeah, personal super intelligence assistants. There's a whole bunch of things.

Starting point is 00:06:40 We're building PDAs, folks. They just live in the cloud and it's not a physical device. But these PDAs back in the 90s were physical devices. This was post-Pager pre-smartphone, and it was the device that you carried to take notes and do things that you do today in apps you would do on your PDA. But it wasn't always on, internet-connected, none of that.

Starting point is 00:07:02 It was a Palm Pilot, and this was like a fantastic business for a while. But there were a lot of problems with this because for the first time, you needed a CPU that could live within a plastic shell, basically. These were like plastic enclosures. You need to run on a battery. It needed to be able to do some things, not crazy compute, but the CPU industry in the 90s was very focused on mainframes, servers, desktops.

Starting point is 00:07:30 There were a few laptops popping up, but it was not the mobile phone revolution that's happening now where you have Apple silicon chips, and those are, of course, based on arm architecture, but that's where all this came from. People said, okay, we need a lower power chip that can actually run off a battery, not overheat and melt the plastic, do all of this, and it can be somebody, can power a device that you carry with you as a personal digital assistant, a PDA. And so... Chicken in the chat says PayPal started on PDAs.

Starting point is 00:07:58 That's right. That's right. So PayPal started originally the idea was these PDAs had... They didn't have like tap to pay or anything like that, RFID. They had basically the same device that you'd see on a TV remote, so IR. and it would flash a light that could be seen by another sensor. And if you flash the light at a certain rate, you can send a message.

Starting point is 00:08:23 You can basically, it's like advanced. What's that SOS thing? Morse. Morse code. It's like a more advanced version of Morse code. And so you could send a specific packet of information from PDA to PDA. And this was the original idea for PayPal.

Starting point is 00:08:36 That's correct. That's a great, great piece of lore, tech lore. So, So, um, the, so, you know, you, uh, arm starts to, you know, build these. Uh, later there's, uh, Robin Saxby, who is the CEO of Arm at the time. Uh, he wanted Arm to become the global standard for CPUs. And so in the 90s, there were lots of different CPU makers, lots of different architectures.

Starting point is 00:09:01 There's this whole CISC versus Risk debate. There's the X86 architecture that, uh, that Intel pioneers. Um, and, uh, slight differences in architectures can limit interoperability, interoperability, interoperability. You see this with what's going on with Mac, where a whole bunch of applications have needed to be rewritten for Apple Silicon, because previously you would have an Intel Mac before we got to the M1, M2, M3, M4, M5 chips. Those are Apple Silicon, those are arm-based. And sometimes you'll go to a website and it'll be like, oh, do you want to download this for a Mac? Like, what do you have? Do you have an Intel Mac or do you have an Apple Silicon Mac? Well, it's important

Starting point is 00:09:35 because when you write the software that runs on the Mac, you need to use. You need to use, you know, specific instruction sets. Now there are ways to abstract that and run on either, but there are lots of pieces of software that interact with the CPU at a low enough level that they need to be aware of the instruction set. So Arm sets out to be the global standard for CPUs, and they create the ISA, the instruction set architecture, and that ultimately let Apple design their own chips, but within the architectural guidelines set forth by ARM. So Apple pays a license to ARM for every chip Apple sells. It's a very small license fee because Apple does a lot of design work. They do the manufacturing, TSM, fabs it, and like there's a million other pieces of the value chain. But for this one little

Starting point is 00:10:21 slice, they have to pay Arm, and Arm just takes that and says, thanks. Cool. You use our intellectual property successfully. You know who else says thanks? Who? Masayoshi Son. That's true. Because they own 90% roughly 90% of the company. It was a full buyout in 2016. They bought the entire company. for something around 25, 30 billion U.S.D. by the entire company. They still own 90% today. So their soft banks holdings, just in that one company, are somewhere in the range of 140 billion when I was looking at.

Starting point is 00:11:02 It's the... And of course, they've massively levered... Well, and they've massively levered up against that position. Yes, yes. they've raised debt against their holdings in arm. But certainly, Masa is somewhere out in the world, seeing it go up 15% just smashing a gong. I hope so. I hope so.

Starting point is 00:11:26 And although everyone knows Apple, my click page for my YouTube video was like, did you know the iPhone is secretly British? I think it's funny because it uses Arm deep inside. But Arm licenses to a ton of different tech companies. So Amazon uses Arm for the Graviton chips. A lot of Android phone makers have arm-based chips. Tons of other tech companies license arms technology to build chips.

Starting point is 00:11:51 But now Arm is going to be making the chips themselves, and they're going to be working with meta-platforms and OpenAI. This means a shift in the economics of the business. So 97% gross margins for just those licensing ISA contracts. This will be closer to 50%. But it should be offset by the huge gig. gains in market size and revenue potential. So the company has one of the highest multiples and semiconductors, roughly 90 times forward

Starting point is 00:12:16 earnings. So there's a lot to live up to. But there's a lot of value coming from AI agents that have access to plentiful CPU resources. The industry dynamics are also particularly interesting. Ben Thompson pointed this out in Stratory. So Nvidia sells an arm-based CPU, that grace CPU. And so they're, our, Nvidia is sort of competing with Arm.

Starting point is 00:12:37 Jensen showed up and gave like a remote talk at this arm event where they announced this chip. And so they're competing, but they're also in some ways working together because they're challenging X86 options from Intel and AMD that are still really popular. And so if Intel is constrained, it's like they're, like if Nvidia sells a bunch of chips for, you know, AI workloads, well then that actually makes Arm more likely to sell their chips as well because whatever. software is built for the Nvidia arm-based chips will probably run on the arm-based chips. So there's some sort of like integration there. And the X-86 moat is not as strong as the Kuda mode, but there's still this like dynamic of of, Nvidia and Arm are going up against Intel and AMD in the same way that, that different GPU makers are going up against the Kuda mode.

Starting point is 00:13:32 So there's like this, all these different interactions there. But it'll all be interesting to follow. Let's move on. The big news that drove this was, of course, meta, engineering at meta said, today we're announcing a new partnership with Arm to collaborate on the development of multiple generations of purpose-built CPUs to support compute and AI infrastructure. Arm called it the Arm AGI CPU. What a great name. We love it. Let me tell you about Labelbox, RL environments, voice, robotics, data, e-vals, and expert human data.

Starting point is 00:14:02 Labelbox is the data factory behind the world's least. leading AI teams. And let me also tell you about Century. Century shows developers what's broken and helps them fix it fast. That's why 150,000 organizations use it to keep their apps more than. So the Wall Street Journal has another good write-up of this story talking about how this, the timing is good. It is, there is a boom in CPUs right now, but the stock is already priced very highly,

Starting point is 00:14:28 and everything has to go perfectly because it trades at one of the highest multiples of all the semiconductor companies. So what else is going on in the timeline? Let's talk about this data center moratorium bill. Yes. I wrote in the newsletter today, yesterday Senator Bernie Sanders and AOC introduced a new bill, the AI data center moratorium Act of 2026, that if an active would require all current and planned data centers to halt construction slash production. It would even block upgrading existing data centers. So if you have an asset and you want to make changes to it in the as this bill is written today, it would be blocked.

Starting point is 00:15:09 They sort of like define data centers based on power demands, cooling capabilities, like how much power you can get to each individual rack. So they have been fairly specific, but trying to be like, it's very, very strong. I was thinking I was fine with this. I was thinking, like, I don't need any more AI data centers at this point. We can freeze those. I just want to build AGI data centers and ASI data centers. And so as long as I can just build tons of those,

Starting point is 00:15:37 like it should be fine, but it is interesting that they seem to have figured out the semantic loopholes that might happen if it's defined AI. Yeah, the bill would halt all new data center construction and upgrades until more legislation is put in place to guarantee the following. And these will be tough to guarantee. So from Sanders site,

Starting point is 00:15:57 they want AI to be safe and effective, preventing executives in the AI industry from releasing harmful products into the world that threaten the health, and well-being of working families are privacy and civil rights and the future of humanity. The economic gains of AI and robotics will benefit workers, not just the wealthy owners of big tech. And AI does not increase electricity or utility prices, harm communities or destroy the environment. So this stuff seems good.

Starting point is 00:16:24 Yeah, all generally good. But no one wants unsafe and ineffective AI. Well, yeah, and the bigger problem is anytime you're creating, I don't think we've created. a technology ever that didn't have some negative impact. Car crashes, a series example. I'm sure this will be rewritten and debated, and obviously it has a long way to go before becoming law, but this set of requirements seems completely impossible to actually achieve. It depends on how you define it. I mean, AI does not increase electricity or utility prices,

Starting point is 00:17:04 like the rate payer protection pledge and behind the meter stuff could actually control that. I'm more talking about number one. Number one, safe and effective. I mean, it's all in how you define that. Like some of the parental controls are a good example of like how to take that, that overarching thesis and then boil it down into something tractable. And when I hear that, I think like, oh, like I don't know how we are defining safe. I don't know how we're defining effective.

Starting point is 00:17:35 Like this feels like this could be like some sort of very vague thing where like if the government, if one particular administration likes this company, they just approve it or not or whatever. But then when we actually talk to lawmakers and you hear something like, like, oh, yeah, we're going to, you know, require parental controls. So if your, if your offspring has a, you know, an AI account, you can say, hey, like, they are this age. don't show them anything that's inappropriate for that age. That seems good. Yeah.

Starting point is 00:18:06 So, I don't know. Overall, at least this first bullet point, preventing executives in the AI industry from releasing harmful products in the world, that feels like you could end up having something like an FDA that's like every product you create needs to go through years of studies in order for the government. And it's like, hey, I just wanted to create like a slightly more AI-native version

Starting point is 00:18:31 of the SaaS tool. Yeah. Do I really? I just want to make SaaS. Yeah, at the same time, like the, like the, the, the bull case, I mean, I think we're, I think the FDA model would really slow things down based on how long the FDA takes to approve things. Yeah.

Starting point is 00:18:48 At the same time, what is the definition of harmful here? Is it net harmful products? Because that is the goal of the FDA. They release drugs all the time that have side effects. You take this, it cures of cancer, but it's going to make you throw up, or it's going to make you lose your hair. And people are like, yeah, I'll take that, I'll take that trade. And so, you know, if you went through the government, you said, okay, yeah, I'm going to give you this tool that can, like, write code, but sometimes it's going to hallucinate and, like, you might

Starting point is 00:19:12 get a code, you might get some code that doesn't pass tests. I'd be like, yeah, okay, like, it speeds me up on, on average, I'm, I'm in. Like, that's fine. And having some of those disclosures, and it's the same thing with knowledge retrieble. Like, I do a deep research report. I get something that's 99% of the way there. Maybe there's something in there that's like, oh, that's actually like misattributed or that numbers were, I know that that number is from this report online that was wrong and they, and the model doesn't. And so I need a fact check it. Like, I still see that as like net beneficial, but there are, of course, like, like flaws in every system. And so, you know, again, it's like where, how does this get defined over time that's like

Starting point is 00:19:50 important? One thing I noticed from the announcement was that they are using AI leaders' own statements against them. And it's easy to see how this would resonate with their concerns. This is really powerful. So on Sanders' websites, he included this quote. In December, Elon Musk, who leads XAI, said he had, quote, a lot of AI nightmares and would, quote, certainly slow down AI and robotics if he could. It's so interesting because Elon doesn't talk about that with like the rollout of electric cars or the rollout of space travel.

Starting point is 00:20:23 He's not saying like, oh, yeah, like, you know, 2030 is too soon to get to Mars. Like, we need to slow down on the race to the moon. like, let's really figure out the spacesuits first. You know, he's like, let's just go. Yeah. And then another one, in January Demas, the head of Google's DeepMind, said he would support an AI pause if he knew other countries and companies also paused development. In February, Dari Amadeh, the head of Anthropics, said he was absolutely in favor of trying to slow down AI development if other countries also slowed down. Yeah.

Starting point is 00:20:55 That was Davos, I believe. Both January, February. So continuing, I wrote, but the problem, of course, is that there is zero movement on getting other countries to slow down. I can imagine some companies that would be like, there's already comments in the chat about like, yeah, let China win. Yeah. I'm not going to name the countries that would be down to slow down, but I think we all know that that China, even if they agreed to something like this, wouldn't just automatically do anything about it. So, but the problem of course. Are there any countries that are like, yeah, we definitely should. We're ready to slow down. Like we're France. Well, I think if you're way behind, if you're way behind, there's kind of a benefit. There's a huge incentive. Elon had said, I think, in 2023 that he supported like a six-month pause. And at that moment, that would have been awesome.

Starting point is 00:21:41 Yeah. Because, hey, if I could just have six months to, like, get my, get my kind of team together. In the South of France or the Amalfi Coast, like, those folks would say we should just slow down generally. Like, AI, but also just slow down our lives, enjoy a glass of wine. head the boats. Yeah, or even like a summer break. Just a summer break. Like four weeks. Yeah. Or even like during the workday, like taking a break, taking an app, just slowing down generally. I think there's a lot of people that are just in favor of that.

Starting point is 00:22:10 But okay, Jordi, like, if you're saying, like, people who are behind should want to, like, slow down, like, doesn't that mean that China should be more in favor of slowing down? That is interesting. That is interesting. Well, I'm just saying I can imagine in the same way that, like, for as many chips as we give them advanced GPUs as we give them, you can assume they're still going to put an immense amount of pressure to kind of stimulate the local semiconductor industry in the same way here. I'm sure they would love for the United States to just pause all new data center construction. And I think it's possible that they would generally say, yeah, like, this seems good,

Starting point is 00:22:51 but then what would they actually do? They would just use that as an opportunity to catch up, right? So my question is like, where does China actually stand on this? I'd be very interested to know, maybe you could look it up. Like, has the Chinese Communist Party actually put out any statements about whether they want to accelerate or pause AI development? Because I think that they might refrain from taking that stance because it would discourage local, like, indigenous development. Like, if the government is coming out and saying, like, we want to slow down, then a lot of entrepreneurship. are going to be like, okay, I'll go back to e-commerce or I'll go back to manufacturing.

Starting point is 00:23:29 Like, I'm not going to work on this because the government doesn't want me to. And so I feel like there's this tug and, like, even though I agree with you, like, what we would be in their advantage to say, hey, we want to slow down, everyone should slow down, we're pro slowdown. If they actually said that, it would have an immediate slowdown effect on the local AI progress. Does that make sense? Yeah, like it would slow down. Yeah, I mean.

Starting point is 00:23:54 Yeah, because even if they, even if they, even if they, even. if they just take that stance because it's authoritarian country. Like this, like the Bernie Sanders comment stands in opposition to other politicians who are saying like, no, actually things are going well. And here's how we're going to, you know, like advance energy and to build more. And so, but if you don't have that and it comes down as like a dictate or, you know, like this is the stance from the government, it's much harder for local entrepreneurs and local AI labs to like push back against that because it feels like they're all of a sudden in opposition

Starting point is 00:24:25 to the government, I would imagine. I'm very interested to hear how China's actually reacting. Yeah, anyway, so just to kind of finish my thought, all these quotes must go extremely hard if you're not kind of acknowledging the full picture, which is that the AI leaders are saying, yeah, if you get other countries to agree to slow down, we'd be open to it.

Starting point is 00:24:48 But that is like the big elephant in the room. They don't mention any even conversations or dialogue with other countries around slowing down, and I don't think there's been any. So anyways, the act has a long way to go, and it seems like the odds of it getting into the law are low, but not zero. It's safe to say that as written, the requirements in the bill would be an incredible gift to America's adversaries and catastrophic for overall AI progress. Yeah. Could be popular, though. There are already some candidates who have made pausing AI or data center, like pausing data center buildouts, sort of like,

Starting point is 00:25:25 their main thing. And it does seem to be getting traction. I don't know how much of that's just on social media. We'll see how it shows up in the midterms. But Sager and Jetty was tracking this for a long time. Like it's going to be a like a political stump speech that hits. Like people are going to be like, yeah, I don't like this stuff. Yeah, the question becomes, if anything like this were to become law, what are the effects of that, right?

Starting point is 00:25:51 Space, right? The space data center people are saying like. Yeah, we were talking about it. Space data centers don't seem so silly now. Yeah. Taking that angle. Totally. Although I'm sure they would also be like, you can't put them up there either.

Starting point is 00:26:03 Yeah. We're going to try to come over the top. There's also just like the globalization process that happened based around environmentalism in like the 90s WTO ascension for China. Like the reason that a lot of the mining happened in China is because like we said like we don't want that here. Right. It's dirty. It's gross. There's chemicals.

Starting point is 00:26:22 There's pollution. And so like out of sight. out of mind, let's push it abroad. And we could do that again with data centers. We can just be like, they're all in Canada or Mexico, or they're all in some, you know, Australia or New Zealand or like, you know, there could be a receptive country out there that just says like, we would love, we are an ally now. And we'd love to get all these data centers.

Starting point is 00:26:43 And then you have to ask the question of like, what does that look like in 30 years? Data centers generate a, they don't create a lot of jobs, luckily. They create a meaningful amount of work during the ELM. process. And certainly some jobs. They continue to generate massive amounts of tax revenue. Local tax revenue. Yeah, I actually don't know how you tax the data center that was locked in New Jersey was going to be generating like tens of millions of dollars of local taxes. That seems pretty good. Yeah. Yeah. It seems great if real estate or I mean yeah like one one medium ground here is like just tax that and then have and then use the

Starting point is 00:27:20 tax revenue. Yeah. And the environmental concerns. Yeah. I think everybody should want to make sure that if we're investing hundreds of billions of dollars into these things, that we're not destroying our lovely Mother Earth. Yeah. But, and the energy costs, again, real concern, but we're making, we're making progress there. Yeah. Well, let me tell you about Crowdstrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. And let me also tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Do we want to talk about this meta lawsuit.

Starting point is 00:27:55 This minor headline on the front page of the Wall Street Journal it says meta, YouTube found addictive, harmful. It's like one of the hardest hitting headlines I've ever seen on the front of the Wall Street Journal. For two companies that are usually

Starting point is 00:28:11 relegated to the business and finance section, they made it to the front page because they were found guilty or, you know, by California jurors. California jurors say the tech companies designed their apps to cause injury to kids. Very, very bad.

Starting point is 00:28:27 But Brandon Gorell had a take and a write-up and some explanation of what's actually going on here. And then we are, of course, having Eric Goldman from Santa Clara University come on and break it down for us in more detail. Because there is a lot of debate about this. And it's been very interesting watching it play out. The total damages are, I think, 3 million each company, roughly, 6 million total. I had a friend who's a lawyer who texted me and sent me the number and was like, hey, I'm predicting that it'll be like 3M. And I didn't read the M and I was like, okay, three billion. Like, what a lot do?

Starting point is 00:29:03 This is not that big of a deal. And then it was three million. And I was like, that's extremely low compared to like the numbers that we normally see from big tech companies. But this has much broader implications because this is precedent setting and there will be a flood of other. And Zach's like, I did spend all of my free cash flow on data centers. but if you give me another two seconds, I will have the cash flow to cover this. So just give me like two seconds.

Starting point is 00:29:29 Yes. But it is a very important case, even though this particular ruling is not changing the cash flow structure of these businesses because it has a lot of ramifications and there's a lot more plaintiffs that are in the queue.

Starting point is 00:29:43 So this is what Brandon Gorell wrote in our newsletter today, which you can sign up for at tbPN.com. Yesterday, a Los Angeles jury found both Meta and YouTube. That's fantastic. I want a lot of soundboard for this. Both Meta and YouTube liable for a 20-year-old woman's mental health crisis

Starting point is 00:30:04 in a bellwether trial that treated platforms as, quote, defective products and potentially marks the end to the absolute immunity nature of Section 230. In the case, the plaintiff's lawyer, Mark Lanier, argued that meta and YouTube built, quote, digital casinos that use neurobiological techniques similar to those employed by slot machines. Fun fact about arm throwback, the first chip

Starting point is 00:30:28 that the company, the precursor company ever built was a chip that went into a slot machine. They call them fruit machines in England. Fruit machine? Fruit machines. They call them fruit machines because they have like the cherries and the strawberries and the bananas and you line them up. And they needed chips to run those. So the iPhone traces its lineage and Apple Silicon and all this This goes much deeper. It all goes back to literally gambling. Very fascinating. Anyway, so the jury found

Starting point is 00:30:57 that specific features of meta and YouTube are designed to be addictive. Infinite scroll creates an environment where there are no natural stopping points. Algorithmic recommendation feeds users highly engaging content.

Starting point is 00:31:13 Auto play removes users agency in choosing whether or not to watch the next video. Notifications pull users back in by exploiting their need for validation. Instagram beauty filters contributed to the plaintiff's body dysmorphia. Features like the like button exploit users biological need for societal approval. This is what the lawyer argued. The plaintiff's lawyer argued.

Starting point is 00:31:38 Shake Shack exploited my biological need for food. Yes. There is this question. There was Taylor Lorenzo had some great takes here. She said... So Taylor has come out in the last, like, 48 hours. I would say is, like, the number one defender of big technology. Yeah.

Starting point is 00:31:55 She does have one of the top technology podcasts in the world. She had a take that was like, so does Spotify, did Spotify addict you to music by playing, like, good songs for you on demand? And this DJ, this AI DJ is simply too good. It's basically, I mean, that's kind of the argument. They didn't obviously go after Spotify. They went after meta on YouTube, but, uh, Yeah, there's a question about like, you know, what UI features, what are dark patterns and how do we regulate those? And it's very interesting. But the decision has been made and these companies will have to pay $6 million to the plaintiff in total damages. This is obviously a trivial amount of money for these companies. But the bellwether nature of the outcome has significant implications for social media. There are over 10,000 individual personal injury cases, almost 800 school district claims and 40 state level cases.

Starting point is 00:32:47 pending nationwide that are similar to KGM versus meta and YouTube. More broadly, the social media industry's reliance in Section 230, which has up to now shielded them from liability for user-generated content, may no longer be enough to protect them from litigation like this. Now, to be clear, this case is not attacking Section 230 because it's not making the argument that someone uploaded a video to YouTube that said, you should be sad, you should be sad, you should be afraid, it's over. And that made someone sad. That is the content that is user generated.

Starting point is 00:33:24 That is protected under Section 230. You might be able to go after the individual creator of that video. If I make a video that says like, Jordy Hayes sucks and should be sad, and then you get sad, you might be able to sue me, I think? I don't know. But that's a little bit more defensible because it's like me on you, but you won't be able to sue YouTube for platforming that content,

Starting point is 00:33:44 for putting that up in just general cases. But this is different because they went after the like button, the infinite scroll, the recommendation feeds, the features that are built by the platforms themselves. So if the decision makes it through appeals, and this might go all the way to the Supreme Court, we'll see, platforms may be forced to redesign their user experiences and algorithms put up age verification, even deprecate infinite scroll. Obviously, changes like this would have an effect on both these platforms ad-based revenue models. Meta and Google plan to appeal the decision and it's not hard to imagine this one making it to the Supreme Court. Taylor's also been sort of sounding

Starting point is 00:34:23 the alarm bells around age verification. It sounds very good. I feel like I'm pro age verification based on like I have kids and I don't want them seeing adult content. But she was worried about the KYC and

Starting point is 00:34:39 needing to be tracked privacy tracking anywhere and that is a good argument to be made. Well, let me tell you about graphite. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. And let me also tell you about 11 labs. Build intelligent real-time conversational agents.

Starting point is 00:34:59 Reimagined human technology interaction with 11 labs. We have to start apologizing to the schizophrenic community. There is a surveillance drone, reportedly flown by infiltrator elements, and disguised as a natural bird such as an eagle that has been spotted. it in a round. This goes back to Taylor O'O.I.N.'s because I believe she worked with the folks behind the viral stunt, Birds Aren't Real, that was sort of a commentary on the conspiratorial nature of the internet. And in that stunt, they make the argument that birds need to be recharged and they're all spying on you and no birds are real. Of course, that is very satirical

Starting point is 00:35:38 and funny. But apparently someone made a drone, some, you know, organization made a drone. that looks like a bird so I can sneak behind enemy lines and spy during the conflict, which is remarkable. But do you think there will ever be video games that are effectively, you're just remote piloting something in the real world? Yes. Do you think there would be demand for? Yes.

Starting point is 00:36:06 So I have heard of this years and years ago that there was something along those lines that would allow you to hunt remotely. So you go to a website and you control a weapon that can hunt an animal, which is crazy. I don't know if it's real. That's crazy. But do they close the loop, like help you actually get meat? Yes. Yes.

Starting point is 00:36:29 So after you down the animal, they will go and ship it to you so you can mount it on your wall. Dang. A lot of people are not going to like that. I don't think Joe Rogan would approve. He's a bow hunter, you know? Yeah, he wants the connectivity with the animal. I think so.

Starting point is 00:36:44 I think so. It's destroying, just destroying the... Now I'm curious. Is it like a, is it like a, is it, is it a gun mounted to an ATV? Not an ATV, but sort of like a two-axis swivel. Like a turret. Yeah. Like a sniper rifle on a, on a turret with a webcam. Pretty crazy. I don't know if this is real. I heard about this like years and years ago. Anyway, the reactions to the meta and YouTube trial continue. Ariel Grivner says, or Gibner says, this is disgusting. wait for the appeals. The precedents set by YouTube being liable for screen time addiction is

Starting point is 00:37:19 kind of scary. Treating algorithms like a defective product opens the door to endless lawsuits over addictive tech. What's next? Books, video games, junk food. I mean, video games, we got to do something about. Those things are too, too fun, too fun. Truly, we got to make them, we got to make muscle. Except you, you ascended. You beat your addiction. Yeah. I definitely did. You don't, you don't game anymore. You actually did. I mean, it might be one of those things like you're still addicted, addicted. You just... Might have been playing a game earlier this week.

Starting point is 00:37:49 Got sneaky little 45 minutes. Really? Yeah. No. Yeah, it was good. No. Player Obscura. I'm gonna go, I'm gonna go and look...

Starting point is 00:37:56 You gotta pull me out. I'm addicted. No, I'm gonna go look back in our text and see, like, when did it take you 45 minutes to respond to something? It was like Tuesday night or something. Yeah, I'm gonna be coming after Eric Jorgensen. Oh, yeah? For the book of email.

Starting point is 00:38:08 Yes. Because that just came out, and Eric did a fantastic job. Yes. And I think it's highly a... We got to, we, can we sue this lawyer? Because this is one of the most interesting cases. And I, I actually can't pull myself away from it. And I feel like I'm just going to spend hours and hours reading about this lawsuit. Yeah. And, and, and I don't know, it's depressing. It's making me sad, thinking about these, these tech companies having to pay fines. And it's just, it's just ruining my

Starting point is 00:38:39 mood entirely. And it was like, you can tell that the, that the, the, the, the way the lawsuit was designed, was designed to take an emotional toll on me, suck me in, make me read all of the transcripts from the court, all the reporting, all the research, and eventually, you know, talk to Eric Goldman from Santa Clara University on my show about this, like, I just can't pull myself away from this. The doom loop. Yeah, I think, I think should he be held accountable for what he's doing? I don't know. We'll see. But there might be a loss. Meta, of course, trading down massively today, almost 9. percent off of this. And, you know, there's some real concerns, right? If there's new legal risk, there's thousands of other kind of lawsuits floating out there. You might get more copycat lawsuits,

Starting point is 00:39:28 class actions. And then the real question is like, do you, do they have to make any product level changes? Does that end up impacting time spent in the app, which will impact the advertising business. Such a weird one because certainly, certainly I don't think back throughout. NASDAQ is also down 2% today. So there's a general sell-off. Yeah, general sell-off, but like, you know, meta-down dramatically. That's a lot.

Starting point is 00:39:56 Hundreds of billions of dollars. Yeah, this is a weird one on a personal level, because on one hand, my kids, I'm going to keep away the infinite scroll machine as long as I possibly can. Yeah. Right? And I will, you know, I don't think back on the time that I've spent on social media and think, you know, well, I'm so glad I put in those long hours and I really put in the work. Yeah. It just doesn't seem that addictive to me. I can pull myself away at any time. It's not a big deal. It's just not a big deal. We lost it.

Starting point is 00:40:37 It just sounds like, it sounds. place. Enter picks our honeymoon. Okay, you just gotta get more. Ask you a question. If you follow me, I'll double your bank account. On Instagram, okay? I mean, this is good kind of.

Starting point is 00:40:48 Just follow me. This is the route you would have to take. If you wanted to go to. This is my subscriber. And this is my subscriber. This is such a good. This is a final mystery box. This is fine.

Starting point is 00:41:00 Yeah. It's fine. We're going to get back to the show in a little bit. It's not a big deal. I'm not surprised at college classroom. It's fine. We lost. He grabbed 100 people.

Starting point is 00:41:09 We lost it. He took people that are ages 1 all the way to 100, and he's having them taste test lunch late. I got to watch this. Okay, is the world's largest LED floor. Are you just scrolling Mr. Bees? No, this is just my normal feed. What's yours like? I am scrolling Mr. Bees.

Starting point is 00:41:27 It's so, it's so funny because it, um, I think, I think whatever that was was completely inverted from, you know, a meditation soundtrack, right? It's just like it. It's so insane. Anyway, let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just power AI. Don't just build AI.

Starting point is 00:41:50 Own the data platform that powers it. And let me also tell you about Cisco. Sorry. Critical infrastructure for the AI era. Unlocked seamless real-time experience. Never apologize. Never apologize. So the funny thing, the funny thing is how addictive are the apps themselves?

Starting point is 00:42:09 Can they argue that the apps themselves? Yeah. It's really not us. Yeah. Right? I've seen some people's channels not very addictive. Yeah. You know, like it takes a lot.

Starting point is 00:42:18 In many ways, like our content, right? We talk about niche subjects in technology and business. There's a lot of content on YouTube that is far, far, far more addictive. Yeah. But. Yeah. No, I've generally had a good experience on social media. You know what else is addicting?

Starting point is 00:42:36 What? High speed trains. Oh, you want to skip to high speed trains? You don't want to do... We can come back to that. Okay, we can come back to that one. What's going on with this? So in China, high-speed trains have become a sightseeing attraction.

Starting point is 00:42:49 This is a good... I would definitely go to this. I would 100% just go see the high-speed train rip through the countryside. That looks amazing. I love it. Also, this is the most incredible video of China that I've ever seen. It's so beautiful. What is this mountain range at sunset?

Starting point is 00:43:07 I think people are posted up there even if the train isn't there. Yeah, that might be, you think that secretly everyone there is like, boo, the train ruined my beautiful view. Because like, they could just be sitting there watching the amazing sunset and lands. That guy's leaning forward as the train goes by. I think they're cheering. I think they're cheering. That's great. Where else do you want to go?

Starting point is 00:43:29 We can go back to this article. Okay, okay. Because I need to know where everyone stands. I need to know where do you stand on shoplifting? Are you pro or anti? Are you pro or anti? I'm anti. You're anti-shopping.

Starting point is 00:43:42 What about you? There we go. I had one moment as a kid when I think I took a piece of candy and my parents immediately took me back. I'm going to put you on your citizens arrest right now. Yeah, it's time for citizens to rest. No, it took me back and I was like the most deeply embarrassing moment. That's like a core memory of telling them like. And I think it was at an age that I didn't really know that it was wrong.

Starting point is 00:44:07 But still. Well, that's not what's going. on, actually. So the Wall Street Journal wrote a piece about in free expression, Emma Camp wrote this op-ed. And there's a new generation of the Campinator. There's a new

Starting point is 00:44:22 generation of shoplifters who aren't children who have, who should have learned their lesson long time ago, but are actually fairly affluent and are just sort of sneaking out luxury good. I think that's a piece of it. But she makes a very compelling

Starting point is 00:44:37 argument for why this is a very bad We need to make skydiving more accessible. Okay. Like if skydiving was a dollar. For the thrill. A dollar a dive. Yeah. I think a lot of people might say, I'm just going to go skydiving today.

Starting point is 00:44:53 I'm not going to steal anything. Well, I mean, Ben on our team is working on a new weather report. Or jet ski racing. Or a tour of thrilling things to do. Yeah, if we could make jet skis more accessible, universal basic jet ski. I like that. I think a lot of people would say, I don't have time to steal. I'm getting ready for.

Starting point is 00:45:09 for the race. Yeah, my cortisol is super low. I don't need to spike it by sneaking something out. So at least once a week, as I begin my commute from home, from a midtown Manhattan subway station, I see someone in a suit and tie Dodge the Fair. Well, it isn't always a suit. Sometimes it's a chunky gray J-Crews sweater and ballet flats.

Starting point is 00:45:30 Each time I see the Fair Evader slip through an open emergency exit or casually hop over the turnstile. A wave of outrage bubbles within me, says, camp in the Wall Street Journal, free expression. And I consider shouting out after the shameless thief. You should do it. I am in favor of yelling at Fair Dodgers in this case. But before I can work up the courage, he's melted into the crowd.

Starting point is 00:45:54 It's tempting to give fair hoppers and shoplifters the benefit of the doubt and assume that they are all Jean Valjean's. Do you get that reference? No. Le Miz. You got to see Le Miz. Jean Valjean is the pinnacle of morality. He steals a loaf of bread for his family because they're starving, goes to jail.

Starting point is 00:46:09 Gats Revenge. It's a great story. You will love it. You should see it in a theater because it is, of course, a live stage production many times. But there's also a great movie with Liam Neeson. The Liam Neeson one is the one you want to see. The Liam Neeson-Lame is amazing. I think I have that right. But that's far from the truth. Well, according to one 2025 survey, and this was what was interesting about this article, the likelihood that someone would purposefully take an item at self-checkout without. out scanning actually increased with income. So the rich get richer. The rich are stealing from the ridge. A viral article incurbed, a site published by New York Times magazine, or by New York Magazine, paints a vivid picture of this kind of thief, a member of a certain subset of the city's wealthy-ish,

Starting point is 00:46:58 as writer Nora Delighter puts it, for whom a little shoplifting on your grocery run has become about as mundane as jaywalking. This isn't exactly surprising, A report from the Council on Criminal Justice released earlier this year found that while reported shoplifting decreased during the pandemic, rates have returned to roughly pre-pandemic levels. Wait, did they just decrease because people were ordering groceries online? I think so. I think so.

Starting point is 00:47:24 If you're not in the store, you can't steal anything. You got to hack the system or something. It becomes a cybercrime to steal from DoorDash. The rates have since returned roughly to pre-pandemic levels. this New York Magazine profile in Curbed, profiles several several shoplifters who were caught stealing from Whole Foods. None were acting out of necessity

Starting point is 00:47:48 and most stole what can act what can accurately be described as luxury goods. $30 eye cream, strip steak, fancy organic chocolate, none expressed guilt. And no one, and one explicitly justified her actions as being in a kind of artist's subsidy.

Starting point is 00:48:07 Petty theft is a vice for a certain kind of loser. Go off at a camp. I love this. Many of those profiles in this article are creative types, photographers, graphic designer, sculptors, and musicians. Presumably, these people are highly educated but downwardly mobile. They steal because they feel entitled to the kind of life where they can thoughtlessly drop $50 on French cheese and sushi rolls while paying Manhattan rent. that they can't indulge in such luxuries,

Starting point is 00:48:38 feels to them like a moral outrage, one that can be rectified in some small ways by taking what's owed to them. When shoplifters justify their actions online, they make themselves out to be Robin Hoods. They claim it's good to steal from large and therefore evil corporations. This is a teenager's leftism,

Starting point is 00:48:57 one in which fighting the man means ripping him off. It's a post hoc justification for a baser impulse, the belief that everything you want should be free. This motivation is made particularly clear when people justify fair evasion given that public transportation is inherently not a big private enterprise. It's not a megacorp.

Starting point is 00:49:18 It's, you know, taxpayer dollars that you're stealing from. Even when we grant the assumption that large companies are inherently evil, which, for the record, I don't, says Emma Camp in the Wall Street Journal, that doesn't justify stealing from them. If thou shalt not steal,

Starting point is 00:49:33 doesn't work for you, consider another argument. Petty theft damages the institutions and businesses in a community making them materially worse for your neighbors. You may think you aren't hurting anyone. Actually, you're hurting everyone. Businesses hike prices to make up for shoplifting losses. Have you heard of like loss, it's called like loss rates or something? Like every retail store just assumes that they're going to get 20% or 5% or some. Yeah, I don't think it's, it can be high. It can be high in some stores. Like significant amount of merchandise just like gets loss prevention is like the term that they focus on. But it's like a constant problem for these businesses. And they have thin margins. People don't realize, I think people think like grocery stores because like you go and check

Starting point is 00:50:16 out it's 100 bucks or something. It's like they're making a ton of money. But like the margins are very, very thin on those. It's not it's not it's not. It's not licensing IP to Apple. They may even close. A public transportation crumbles without sufficient revenue from riders. as journalist Kelsey Piper put it in a post on X. When you shoplift, you directly and unambiguously impoverish your community. That bar of chocolate you swiped isn't nothing. That little pot of eye cream you slipped into your purse is more than a rounding air on a corporate balance sheet.

Starting point is 00:50:47 What you're doing ultimately creates a worse, less functional, less trustworthy society, and even shoplifters need a place to get groceries. Yeah, the comment section is agreeing with Emma. They said, well, said, and I'll extend it by it beyond just shoplifting to include things like buying something with the intent of returning it after using it for a few days. I remember someone buying a grill at Lowe's with the intent of using it for the weekend and then returning it, which they did. Okay. Yeah, just didn't, stakes didn't really come out that well. I don't think it was me.

Starting point is 00:51:22 I think it was the grill. I'm not a big returns guy. Costco does have a huge return policy. Yeah, it's so, it's so. interesting the um the coogan or the hayes mind cannot comprehend the return like it's i i've maybe returned yeah two things yeah in the last 10 years it's just not an impulse that i have it's because you're deeply in touch with everyone um so funny anyways we can okay let let me tell you about turbopper, serverless vector in full-tech search, built from first principles on object storage, fast, 10x cheaper, and extremely scalable.

Starting point is 00:52:05 And let me also tell you about Gemini 3.1 Pro. With a more capable baseline, it's great for super complex tasks like visualizing difficult concepts, synthesizing data into a single view, and bringing creative projects to life. And thank you. The clapping in the studios at an all-time high now that we're back to full strength in the TBPN Ultrodome. So, Wilmanitis is giving some more context. around anti-AI backlash. He says, in case you're skeptical that anti-AI backlash

Starting point is 00:52:33 will become a central issue in the next election cycle, Sanders just introduced a bill to halt all-new data center construction and require the federal government to review and approve AI products before release. Interestingly, this idea of an AI FDA, the first time I heard about this concept was on the All-In podcast. I believe Chamath Polyhapitia was making the point that an AI FDA was something worth considering, I think he's evolved his position, but it was something that, you know, the first time you learn about like the possibility of a fast takeoff, the possibility of AI Doom, it seems

Starting point is 00:53:09 really rational to say, well, let's review everything beforehand. But then there's natural effects and there's limitations to the models and we can't even do a puzzle on ArcGi. So maybe there's a little bit more work to be done. Maybe there's a few more data centers to build before we actually get good things out of these models. Noah Smith wrote a piece that I think is relevant to the Data Center moratorium, which is AI has the worst sales pitch I've ever seen.

Starting point is 00:53:39 And his quote, our product will make you economically useless and possibly kill you. It's not, he says it's not a value proposition. AI leaders need to change their public messaging and fast. We don't need to read through all this. I need to read this quote. He opens in this quote. Hi. Do you have a moment?

Starting point is 00:53:54 I'm from the cursed microwave company. Our product is much better than a traditional microwave. Not only can it automatically and perfectly cook all your food, it also microwaves your whole body so you and your family are paralyzed and unable to work ever again. Don't worry, though, because when everyone has a cursed microwave, our society will probably implement universal basic income and you and your children can just go on welfare. Oh, by the way, we estimate that there's a 2 to 25% chance that our microwaves will put so much radiation, who will put out so much radiation that they destroy the entire human race.

Starting point is 00:54:25 If a door to door salesman came and gave me this pitch, I would gently see him out the door and then quickly call the FBI. But this is only a modestly exaggerated version that the pitch of the pitch that the big AI labs, Open A. Anthropic, are making to the world about their technology. And I completely agree with this. It's very, it's very important that AI lab leaders focus on the actual tangible benefits of the technology right now. Like, I think there's this, you keep, you keep identifying this disconnect between like, like, people are afraid of AI and there's so much fear-based marketing, but then like every single person, like a billion people are just using chat GPT to like get answers. And every person you talk to,

Starting point is 00:55:07 no matter how, they can, they can tell you for 20 minutes, lay out a very coherent, like, cogent thesis of AI, Doom, what might happen, Terminators, they can take you on this very, reasonable scenario. And then five minutes later, the topic changes, and they'll tell you how they use chat GPT to, like, you know, plan their vacation or something like that. And this disconnect just, like, cannot last. Yeah, I wrote January on January 9th. The phrase tech lash was originally coined by Adrian Woldridge and the economist in 2013. He correctly predicted that the big developments of 2014 will be the growing peasants revolt against the sovereigns of cyberspace. The Silicon elite will cease to be regarded as geeks who happen to be filthy rich and become filthy rich people who

Starting point is 00:55:50 happen to be geeks. Over the coming years, the world experienced the Cambridge Analytica scandal, fear around the mental health impacts of social media on young people, and growing concerns around monopoly power in our digital world. The internet and the platforms that dominated began to test the core foundations of our country and the free world, privacy, democracy, censorship, and more. The second tech clash has begun, this time because the average American believes that technology, specifically AI, is now a threat to their very way of life. Starting at the bottom of Maslow's hierarchy of needs, Americans have heard the day Data centers use a lot of water. They heard their power bill is probably going to go up because of it or already have. They've seen the movie Terminator and have imagined how that might go from science fiction to reality. Watch Terminator. You still haven't seen it, right? No, I have seen Terminator. You have? Have you seen Terminator? Have you seen Terminator? Have you seen Terminator? Have you seen? Probably not. John, it's enough to ask me to finish the squat movie. Now you're like, oh, you got to see this.

Starting point is 00:56:41 Two is two is the best one, I think. But the end of Terminator, it's a good ending. The humans win. We beat the robots. Yeah. It's a good outcome. You got to push back on that? No, I was going to add.

Starting point is 00:56:52 So earlier we were talking about, like, China and like, how is China thinking about some stuff? Oh, yeah, yeah. I found some. Okay, tell us. Tell us. Yeah. Okay.

Starting point is 00:56:57 So, um, Xi Jinping is like, if you basically compare, like, Chinese government to U.S. government, is probably like much more concerned about safety than the U.S. is. Okay. Like, there's all these things like, so is Zhiginginging Ping. We don't want to share this. We don't want other people to, to, be able to do surveillance as well as we have to do it. Yeah, there's always like the take, which is like, you know, if you're super concerned

Starting point is 00:57:19 about safety, well, what does that mean? You need this oversight over everything, right? Which is like, if you're trying to, you want to be a authoritarian, that's like the thing you're going to do. Yep. But basically, he was like, he chaired this, it was from time, a rare Politburo study session on AI warning of unprecedented risks. It's listed, AI safety is listed alongside pandemics and cyber attacks in their national emergency

Starting point is 00:57:41 response plan. He's also said he stressed the need for monitoring early risk warning and emergency response, right? So it's like, sure that's like about safety but also, you know, monitoring right? No, no, no. It's kind of I wonder, I wonder how this

Starting point is 00:57:57 interfaces with the Bernie Sanders position, like will there be some sort of like open discussion? You know, Bernie's going around doing a lot of different conversations. That would certainly be like the next step if he wants to get through the you know, the geopolitical pushback.

Starting point is 00:58:13 Even when you talk to a lot of like the pause AI people, very few of them are like ever really say the US needs to pause regardless of what China does. It's always like we need to have international, you know, agreement on it. Because otherwise like it obviously doesn't work. Totally. Totally. Yeah.

Starting point is 00:58:28 Yeah, if everyone could just give their GPUs to Tyler, he will watch after them. He can be trusted. He can be trusted. He can be trusted. He can be trusted. Anyways. Yeah. So this story.

Starting point is 00:58:41 will continue to evolve. That's good info. Thank you. Rune hit 300K. He says time to docks on TBPN. Okay, let's do it. Three hundred kind of now soon. Let's go. Congratulations.

Starting point is 00:58:58 Boom, boom, boom. I think we hit the gong at 252. Every time, every time there's a Rune milestone, we must celebrate it to the fullest. Really quickly, let me tell you about cognition. They're the makers of Devon, the AAS Software Engineer. backlog with your personal AI engineering team. And let me also tell you about console. Console builds AI agents that automate 70% of ITHR and finance support,

Starting point is 00:59:23 giving employees instant resolution to access requests and passive resets. Continue. Let's pull up one of the greatest videos created in the last year. Sporre says RIPSaur, you gave us the greatest AI video of all time. Let's play it. This was a great video. I did enjoy this one. Sound, please.

Starting point is 00:59:40 Not that. It's been fiddle tonight, got it? No more fiddle tonight. Go home. The door cam, the SORAM, I don't know what, what was in the training data, but it nailed this like doorbell footage. Like the grainyness really leans into the flaws and it hides the flaws in the model. When you try and do something that's photo reel, it looks a little waxy still, but this is just perfect. It's too, it's too low res to detect like, oh, the finger's perfect or whatever.

Starting point is 01:00:19 That's a good instrument. That's fun. She really hits the thing. cat with that door. It's absolutely insane. Yeah. Well, the didgeridoo? Oh.

Starting point is 01:00:32 Here's the thing. Here's the thing. Human creativity. You had to string all these together. This was not one shot. This is like, this is like, you know, 10 prompts.

Starting point is 01:00:42 I've done it. I've gone to chat to me and said, like, think of a funny prompt and it doesn't come up with something as novel as this. Otherwise, I would be the creator of that. Hey, that's Argon. That's literally our song. gong or former gong. Yeah. It's nice. We made it into the training data.

Starting point is 01:01:01 Aerobics? Okay. Volume down, pause off the neighbors. Silent disco. That's good. I love it. Yeah, the SORA, the SOR news is interesting. I mean, obviously good as a reflection on like, okay, era of focus. We heard that news from like a week ago. This is like a very clear step in like refocusing. There is a question about, like, the value of models. Like, SORA jumped ahead of meta vibes very quickly. Meta vibes launched, like, a week before. And when Sora came out, the consensus was like, oh, wow, this is, like, definitely a step above of what you can do with vibes, which was much more, like, an animated picture from mid-journey. It had cool, cool aesthetics. But it was way less, like, it was very constrained in terms of what you could do with Sora.

Starting point is 01:01:51 you could automatically insert different cuts, generate something that looked a lot more like a native reel, even if there were sort of rough edges. But the question with every model is, you know, you spend money to train it, and then it has ongoing inference costs, the cost of a video model. It feels immense,

Starting point is 01:02:11 because I went back and looked at some of the first SORA videos that I generated. I'm thinking of me in the orange and white suit. Yes. One of the greatest AI videos. have to play it at some point. But that one felt like it had about a thousand times as much compute allocated to it than the last one that I generated. Because I generated a SORA like a week before this announcement. And it does feel like they had shifted the GPU workloads to other, to maybe codex because that was the product that was taking off. What do you think,

Starting point is 01:02:43 there were some rumors where they were spending something like $10, $15 million a day on compute for just for SORA, which is like, you know, like $3.5 billion a year. or something in this range. Yeah. So it's like so much compute just on inference. And it's like, yeah, what's the actual value? Yeah, yeah. And if it's not monetizing with crazy ad rates immediately

Starting point is 01:03:00 or crazy API costs, like you're just in GPT2 territory where Greg Brockman came on and told us that, you know, I don't know, they spent probably millions of dollars training GPT2 and they were like, we had to pay people to use it. Like every dollar of inference was negative margin. We were losing money on every token. and generated. And then GPT3 was in a similar boat. It was like almost there, but they weren't really making any money for it. And then the GPT4 training run happens. And that, I mean, looking back,

Starting point is 01:03:31 that has to be an incredibly profitable model because I think it maybe cost $100 million to train. And then the inference cost, like they distilled the model pretty quickly, got to a place where I think that was very, very ROI positive based on the subscriptions during that time before they rolled out five. And then, you know, you're always facing this battle of like, you know, a little bit of a Red Queen's race, training the new model, you know, depreciating the model across whatever the inference margin you get during the period where you have the best model. Mitchell Green went on invest like the best.

Starting point is 01:04:07 And Patrick, Patrick pulled out one of Leage. He said Leadage is probably most famous for this letter. Mitchell calls it the hierarchy of BS. It's his way of distilling what he learned from cold calling 10,000. companies and I will go through it. If companies have good cash products profits, they report those. If companies don't have good cash profits, they report on adjusted profits. If companies don't have good adjusted profits, they report on gross profits. If companies don't have good gross profits, they report on revenue. If companies don't have good revenue, they report on adjusted

Starting point is 01:04:41 revenue indicators like GMV. If companies don't have good GMV, they report on monthly active users. If companies don't have good monthly active users, they report on subscribers. If companies don't have good subscribers, they report on downloads. If companies don't have good downloads, they report on page views. If companies don't have good page views, they report on what they were voted. The best place to work at XYZ city. Right now, this reminds me. It's very funny because the only news that we've shared from TVPN is that we're like the 42nd most innovative company recently, but we're not a public company. If you want to trade a public company, go over to public.com. Investing for those to do it seriously. Stocks, options, bonds, crypto, treasuries, and more with great customer service.

Starting point is 01:05:21 I want more of your take on this. People that flex, how many lines of code are writing? Oh, yeah. Like, if your product doesn't have any, if your product doesn't have any users or revenue, you just report on lines of code. Lines of code per year run rate is a crazy one I saw recently? L-O-C-R-R.

Starting point is 01:05:40 That's an insane stat. But we have the solution. It will be released soon. Do you have a general update time? Yeah, what's the timeline, Tyler? I know you're traveling. Did you, when you went on, When you went on the road, did you stop walking in?

Starting point is 01:05:53 Work? The project can be done today, tomorrow. Does it have sound effects yet? It does not yet. Okay, then it's not ready to sit. Yeah, in a day or two. Just one more problem. The fundamental mechanics, you know, is fine-tuning tomorrow at 1207 chat.

Starting point is 01:06:11 Jordi, it's not. Ask Tyler. The project is not done yet, but I talked to Tyler and he said he's generating 25,000 lines of code an hour in advancing of this project. So, I mean, he's doing, he's clearly putting out a lot of code and that will translate to a great product eventually. The best entrepreneurs I know are generating millions of lines of code daily just to keep their about page up and running and humming. Rough. Well, let me tell you about Restream. One live stream, 30 plus destinations. If you want to multistream. Go to Restream.com. Just do it. Gwen Shotwell is on the cover of time.

Starting point is 01:06:50 magazine. SpaceX is racing to build the most powerful rockets yet with the goal of returning humans to the moon. Gwen Shotwell is leading the charge alongside Elon Musk. This is a good deep dive. You should go check it out. My the first YouTube video I ever made that went viral or like broke out because when you was why is no one talking about Glenn Shotwell literally literally that was not exactly the title. So not literally but it was it was that that was the whole premise that was the whole premise. And And normally, I think I had a thousand subscribers, and so getting like a thousand views was like, okay, this is great. And if you can get more views than subscribers, that's like a banger.

Starting point is 01:07:28 What was it called? The title was the only reason SpaceX works. There we go. That might have been retitled at a few times, but you get the idea. Anyways, no surprise that Gwen shot well running a company that is shooting things. Shooting rockets into the atmosphere. No surprises. Well.

Starting point is 01:07:48 F.T. has some reporting on the SpaceX IPO. Bankers involved are toying with the idea of allowing existing shareholders to sell out of their positions on day one, two of the people said. Wow. That would do away with rules to prevent insiders cashing out or trading shares, which are typically imposed for 180 days after a company goes public. I would think there would be rolling lockups. A third person said SpaceX is considering a so-called staggered lockup that would allow, investors to slowly sell down their stakes over the course of several months. The deal is, quote, too big of an IPO to just unlock. Yeah. Musk's influence over the size and timing of the

Starting point is 01:08:28 listing has been highly unusual, said one investor close to a banker on the deal. It's kind of scary how Elon is setting the price. It's not being done formally. Oh, interesting. It's not a full auction format. He says, this is the price and you can either buy or not, and hopefully you buy. Yeah, interesting. The staggered lockup, it feels like it makes a lot of sense. You could just see, okay, this person's held these shares for 20 years. This person's holding it for 10 years. They get 180-day lock-up, a 90-day lock-up, a 270-day lock-up, whatever you want.

Starting point is 01:08:56 I don't know. Just imagine how much money the lawyers are going to make from unwinding all the different entities and the SPVs and the SPVs and the SPVs and the forward contracts with the SPVs and the forward. It's going to be. Full employment for lawyers, for sure.

Starting point is 01:09:13 XAI co-founder Crois. Crois. Australian now? Manuel Croix. It's departing the company, which is, I think, officially the last co-founder. Wow. Remaining outside of Elon, so.

Starting point is 01:09:30 That's remarkable. Well, it'll be interesting to see what the next run, the next version of Grock does. Is there a new 4.2 came out? Is that right? Yeah, I mean, that was a while ago. That was a while ago. So we're expecting like a 5 or 4.3 soon.

Starting point is 01:09:46 Yeah, I don't know if anyone, expect it super soon. Yeah. Right? Because they're kind of revamping the whole thing. Yeah. I wonder what they'll try to do with RKGIV3 because they were the fourth lab that tested and they were the only lab that got zero percent, although I don't know how much worse that is than getting 0.25 percent. But certainly it'll be interesting. Ryan Peterson had an idea for Elon Musk. He said, if Tesla makes a car with three rows of seats, each with its own pair of doors, so nobody has to climb over everybody else to get in their seat. They will create a baby boom, the likes of which we haven't seen in 80 years.

Starting point is 01:10:24 And Elon Musk says, noted. Would you buy a car with three sets of doors? It would look extremely odd. It wouldn't be the very iconic, but that sort of testless thing, and the cyber truck stands out on the road? Model Y, SL. Sle-S-L. S-L. Okay.

Starting point is 01:10:43 Yeah, so the Y-L has three rows. Yeah. But it has two sets of doors. Yeah. Four doors. I don't know. I don't know how big. I don't know.

Starting point is 01:10:52 Someone has to have done this at some point. A six door car. Having a kid jump in and just crawl to the back, we did that was when, back in my day. Back in my day. When you climbed in that door, it was uphill to the third row. Yep. Both and then and then uphill on the way up. Okay.

Starting point is 01:11:09 Yeah. So it was a nightmare. It was a nightmare. We did it. Yeah. But it made you who you are. It made me into the man I am today. Yeah.

Starting point is 01:11:14 And so you don't want, you don't want easy street. extra doors in the back. No way. No way. Your kids are going to be climbing. They're going to be climbing all over the seats. Yeah, it's interesting. It feels like Tesla's entire strategy from a merchandising standpoint has just been to make, like, more and as much as possible, just make the lowest number of cars. Yeah. And so he's getting all this feedback, but they already have like a six-seater coming out. Okay. Someone, someone, someone, shared an image. Yeah, this is the data that you were talking about yesterday.

Starting point is 01:11:51 The Ambruster Stageway, the Ambruster Stageway, the world's oldest and largest manufacturer of custom multi-passenger vehicles. And it's a suburban that was converted, and it comes with six or eight-door models. So you can have rows and rows. I don't know if you can scroll down and find it. It's from Talos Dreams in the replies there. But I don't know. Anyway, where do you want to go?

Starting point is 01:12:17 says I'm getting $250 for a tweet. Oh, interesting. I was fascinated because he's gone on like this big tear of like promoting AI. Yeah. Specifically Claude.

Starting point is 01:12:31 And so What does Nikita B are going to say about this if he's getting paid? Yeah. Is he basically just saying like I'm I'm doing undisclosed paid promotions? I don't know.

Starting point is 01:12:44 Because he's certainly getting more than 250. likes. Yeah, I don't know. He got about 250 retweets on this, 295. So I don't know. It's possible. Let me tell you about ACTA. Octa helps you assign every AI agent a trusted identity. So you get the power of AI without the risk. Secure every agent, secure any agent with Octa. And let me also tell you about Lambda. Lambda is the super intelligence cloud building AI supercomputers for training and influence that scale from one GPU to hundreds of thousands. And I believe we... Last thing before we go under our first guest.

Starting point is 01:13:18 Sure. We have to pull up this post from Peace Land. He says, I've seen some fire fits in China, but I've never seen a jacket this hard in my life. And the back of this guy's jacket just says, Mr. Enjoy de Money. M-E-D-M-E-D-M-E-M-D-M-E-M-E-M-D-M-M-E. Mr. Enjoyed the Money. Apparently, that's a legit brand. That is very tough.

Starting point is 01:13:41 I like it. This might be the new meta. this might be the puffer jacket with the stitching on the back is very nice uh there's a lot of fun examples of other other swag in the replies well without further ado let's bring in eric goldman the university is the associate dean for research and a professor there eric how are you doing what's going on i'm all right thanks how are you i'm good thanks so much for joining uh please since this is the first time on the show i'd love a little bit of an introduction and then of course i want to go into the case today

Starting point is 01:14:13 Sure. I'm Eric Goldman. I'm a professor of law and associate dean for research at Santa Clara University School of Law. I've been doing internet law for over 30 years, teaching, researching in the area. And my area of specialization includes how users talk to each other online. Okay. And when did you start tracking the meta- YouTube lawsuit? How long has this been going on? And then I want to hear about your expectations for the case, your interpretations of the case, how things played out. So I started tracking the cases when they were filed. I can set up electronic alerts to notify me of new filings in the cases. And I had to give that up after a while. These parties were just beating each other up in court with an enormous volume of very picayune filing. So I stopped tracking at that level a while ago.

Starting point is 01:15:06 It's hard to track the state court cases. There isn't an electronic tracker for that. So it's been a little bit harder to get the information that. case. And this has been going on for a couple of years and many millions of dollars have been spent by both sides in these cases. So take us through what actually happened, how we should be interpreting the verdict, and then we'll go into where we go from here. So we need to step back for a moment. And let me describe the landscape and then we'll see how this case fits into it. in California State Court in Los Angeles, there have been hundreds of plaintiffs who filed lawsuits against the social media services.

Starting point is 01:15:50 These cases have been joined together in a proceeding, but they're not a class action. So there's hundreds of parallel lawsuits all stay next to each other. A similar lawsuit is also pending in federal court in Northern California. It's called a multi-district litigation or an MDL. And there are thousands of plaintiffs in that case as well. Similar format, they're sitting next to each other. It's not a class action. That case also includes entities like school districts and Native America tribe.

Starting point is 01:16:23 So there's other entities in that as well. And then there have been individual filings across the country by state attorneys general and others in the lawsuits. So there's basically just a litigation, mania taking place across the United States. And what does it actually take to qualify a plaintiff? Do they just look at their screen time and say, like, oh, you use social media for five hours last week, you're addicted, and then they kind of figure out how to, how to kind of, you know,

Starting point is 01:16:54 turn to an actual suit? There is no screening for who gets named as a plaintiff. They just raised their hand and say, I think I qualify. Okay. And they've been joining these lawsuits. The lawyers, of course, are helping them and each lawyer is trying to add to their portfolio of plaintiffs that they have that they're representing. So, but whether they're actually going to get any recognition from the court or money, they'll have to make their case eventually. So that's part of why the trial was held that led to the verdict that came out this week.

Starting point is 01:17:30 What they did in the California State Court case is they said, we're going to pick three plaintiffs. And we're going to do what we're called bellwethered trials. We're going to let the parties make their case to the jury. And we're going to see what the jury thinks. The goal was to do three, not just one, with the idea that plaintiffs have so many different stories. The victims are each in their own unique situation that we wanted to get multiple data representations from the pool of plaintiffs to start to be able to estimate the overall value of the case. So the first one came out. And the jury agreed with the plaintiffs, did not agree with the defendants, and awarded $6 million of damages.

Starting point is 01:18:12 Now, this is just the first data point of what's expected to be three just in the state court case. There's lots of activity taking place throughout the country. So how should we think about the actual ruling? The Wall Street Journal has a headline meta and YouTube found addictive and harmful. How are you interpreting the nature of what the plaintiff? attorney proved? At the core, the plaintiff's lawyers had to make a number of novel arguments, both to the judge to get to the trial.

Starting point is 01:18:46 And then in front of the jury, they had to convince the jury to recognize the harms that the victim suffered and attribute them back to social media services. And the jury agreed with all of that. And so the way to, I think, to interpret this, uh, uh, our verdict. is that we've now heard from some ordinary Americans, I want to say, metaphorically picked off the street, and asked them, how do they feel about the accountability of social media services for the harm of their users? And the jury said, we think that the social media services should be responsible, and we should assign some pretty significant dollar values to that responsibility. Is that is is is six million seen as a A significant dollar value in the courts because these companies are so big

Starting point is 01:19:38 But again this could just be the well you have to multiply it by potentially thousands Yeah so so where does this go in terms of the the the the damages as they snowball will there be a class action some sort of master settlement That that goes way bigger just about the numbers for a moment $6 million is far less than what the plaintiffs requested. It's far more than I think the defendants had hoped. And as you were pointing out, if you multiply at times 3,000 potential plaintiffs, that are already in the queue. That translates into something on the order of like $20 billion.

Starting point is 01:20:15 Again, maybe numbers that Meta and Google have. But TikTok and Snap, if they're also going to be coming along for the ride on this, maybe they don't have that. Maybe that becomes un-economic. So the numbers grow, I think, really rapidly because not only it's that the people who've already filed, it's all the other potential users who will say, just like you were suggesting earlier, who will say, you know, I've been addicted for five hours on my site. There could be tens of thousands of more plaintiffs coming through.

Starting point is 01:20:47 The numbers on this could get extraordinary. Now, remember, this is only one data point. The other two Bellwether cases could establish no liability. or they could assign much larger damages. And so we'll see that $6 million is even the right number for the parties to start estimating the settlement. Sure. So will those other bellwether cases for sure resolve before this gets appealed? Do you anticipate that this ruling will get appealed all the way to the Supreme Court?

Starting point is 01:21:14 How do you think about the interaction between the bellwether cases and then other legal proceedings? So I believe that the appeals are going to be lodged. now. But I would expect that by the time that the appellate court is ready to hear the appeals, the other two cases will have been resolved. And ideally, they'll be all handled together. Whoever doesn't get the results they want in the other two bellwether trials would go ahead and appeal those as well. All these cases are going to be appealed until there's some kind of definitive resolution. And I would expect the appeals to go up all the way as high as the court will take them. The U.S. Supreme Court has discretionary review, so they may not take it,

Starting point is 01:21:56 but I expect the cases to be appealed to them. Unless there's a settlement, and you did ask about that, and let me just close the thought, the difficulty with the settlement is because they are not class actions, the defendants cannot settle against all the potential plaintiffs. They can only settle against the ones who've already expressed, who have already signed up to the case. And so one of the tricky aspects of this case is how could they price the settlement to pick up all these other potential plaintiffs who are waiting in the wings. Are there any other countries that have gone through this process of litigating social media addiction?

Starting point is 01:22:31 It feels like uncharted territory. When I see things like the effect of the like button or endless scroll or feeds, there's been a conversation about the effect of those technologies for a long time. But this is the first time I've seen them actually been, you know, in the course. of law. That's a great question. I don't actually know if there's been any trials on these questions in other countries. And other countries don't always have a jury system like we do. So I do think we are in some new ground here. Having said that, other countries often can regulate the specific mechanics of online publishers in ways that the First Amendment may not permit here.

Starting point is 01:23:15 So the other countries might very well have already dictated that certain things cannot be done that are part of the litigation now. Yeah. So do you think that there's a hope for sort of new federal regulation alongside what is going on with Section 230 that sort of sets the rules of the road at a national level that then if you're in compliance to, you can't be held guilty of, you know, all these lawsuits? it's possible that we could get some kind of federal legislation that provides some kind of security or safe harbor for the defendants that would also preempt any of the state laws that would conflict with that. I don't see that anywhere in the Overton window, the window of what's actually being debated today. But maybe if the services are feeling of pain, they would be willing to pursue that. The reality is today that states throughout the country are passing laws that, govern the same issues that are at an issue in the litigation.

Starting point is 01:24:18 And so unless there's some federal preemptive laws, the defendants, the social media service are going to have to navigate this every growing stack of state legislation. Do you think we get to a point where when you open a social media app, it has like an addiction warning, like you might see on a cigarette box? Is that where this is headed? or if this goes far enough, are the platforms running the risk of, you know, needing to remove the like button because it hurts people's mental well-being or, or

Starting point is 01:24:54 eliminating the infinite scroll or app-level usage limits? Like, what are kind of like the extreme sort of downside scenarios for the platform? So there have been some states that have enacted. mandatory warning labels like you're describing, those are going to be subject to constitutional and challenges. It's not clear to me that they're actually constitutionally permitted. For example, Texas's law has, I believe, been enjoined on that very point. So the warning label approach, I don't think is likely to be the final resolution in any of any of the disputes here. I think that that's going to be an effort that probably isn't going to either solve a problem or be constitutional.

Starting point is 01:25:38 It is already the case that states have passed laws that have done things like tried to ban auto scrolling or infinite scrolling or auto play or the like button or like counts or whatever. States are going to get to that level of granularity and they're already doing so. Many of the things that are already part of social media features today are regulated by state laws that are on the books but possibly being in the process of being changed. challenged. And I think the bigger question isn't, will we lose our light button or will we lose infant scrolling? I think we would consider that for those of us who are officinados of social media, to think that there's some value to them. We would consider that to be maybe the best possible outcome. I think the more serious outcome is what social media services drop out of the industry entirely, what social media services add barriers to user populations having access to social

Starting point is 01:26:37 media and how much we see the circumscription of social media conversations entirely. In other words, I don't think we should assume that social media will exist in its current form in the future. The question is whether we even has social media in the future. That, I think, are the states of the cases and the legislation. Yeah, yeah. Yeah, that's fascinating. What other industries have been through this type of pivotal moment and where should we

Starting point is 01:27:07 drawing analogies or where should we avoid drawing analogies? People have said social media is the new cigarettes. Jordi was making a point about the warning labels on cigarettes. It feels like that might not be the actual best analogy. I was talking to Tyler on our team about the risks associated with driving a motorcycle. And I was making the point that there's an instruction manual that you buy, that you get with a motorcycle that puts a lot of the risk on you if you choose to transport yourself. If this really progresses, like the precedent in it sets is like, okay, fast food companies shouldn't be able to use bright colors in their logo. There's a lot.

Starting point is 01:27:47 Yeah, there's a lot of different stuff. Musicians shouldn't be able to play hooks that are just too good. Maybe, I don't know. Yeah, but where do you think the best analogies are? I'm not a fan of analogies between online and offline activities. And in particular, I don't like the analogy to tobacco. And let me make clear why, and I think that I'll start to enlighten where the risks and opportunities are. Tobacco, we would generally say there are no health benefits to consuming tobacco.

Starting point is 01:28:18 Nobody is healthier because of that. It's just either neutral or negative. But social media consumption has many social benefits. There are many communities that are thriving online and who are, you know, I think, just of all I've been. that their benefits are at risk in this litigation without them even having a say in it. So unlike tobacco, social media is a mix of potentially very helpful things and things that could potentially be harmful for some of its consumers. And those kinds of mixed uses technology that have both benefits and potential detriments are really, I think, a better analogy than

Starting point is 01:29:01 tobacco. And I don't know that we have great circumstances where we can point to where mass tort litigation has targeted and potentially removed from the industry, these mixed use scenarios. And in the end, the things that people are being addicted to or they're allegedly causing an arm are people talking to each other. And that kind of speech-related theme is unlike almost any physical product that we might draw an analogy to. Yeah. It's a fascinating case. We really appreciate you taking the time to come chat with us about it. I hope you have a fantastic rest of your day. Yeah, come back on us.

Starting point is 01:29:40 There's more news. Yeah, we'd love to talk to you again in the future. This is just scratching the service. This is really helpful. It's been great talking to you. Thanks for the opportunity. Have a great rest of your day. We'll talk to you soon.

Starting point is 01:29:48 Our next guest is in the TB in Ultramm. First, let me tell you about Railway. Railway is the all-in-one intelligent cloud provider, user-favored agent to deploy web apps, service databases and more, while Railway automatically takes care of scaling, monitoring, and security. We've got to make it illegal. If I drop a good one-liner in a group chat,

Starting point is 01:30:05 it should be illegal for people. People not to chime in, react, hopefully get some laughs. Yeah. The light button is just going to be like a circle. Good to me. Nice to meet you. How you doing? Introduce yourself for those who are not familiar since it is your first time.

Starting point is 01:30:20 My name is Nima Jalali. I'm the founder of Sultan Stone. Okay. And it's founder and CEO. Yeah. Take us back. And I'll give some context. So I met, Nima recently moved into my area.

Starting point is 01:30:33 And I think we met within like a week of you moving in. And so I haven't even gotten like the full story, even though we've been hanging out the last couple weeks. Cool. Yeah, full story. Yeah, I was a pro snowboarder. I heard you're from Pasadena. Yeah. Is that right?

Starting point is 01:30:47 Yeah. So I'm from Lakaniana. No way. Yeah. That's awesome. And so grew up there. I was obsessed with skateboarding and then got into snowboarding and started going to those local mountains. Right.

Starting point is 01:30:55 Mountain High, Big Bear. No, like Mount Waterman. Yeah. It used to be called Cracker Ridge. Sure. Have you heard of that? Yeah. Yeah.

Starting point is 01:31:01 And so back in the day, you know, when I was in high school, we had, you know, El Nino, winters. There's like a ton of snow and they would actually operate. They don't operate anymore. And so I would just get out of school at 12 every day and go up there five days a week. And I got good and went off and turned into a pro snowboarder. What does that mean? Does that mean like speed competitions, trick competitions? What are you doing?

Starting point is 01:31:23 Because there are multiple ways to become a professional snowboarder, correct? More like freestyle. Yeah. There's basically like two paths. There's like think like a lifestyle guy. Just like going around making. movies all the time. Okay.

Starting point is 01:31:37 And then there's like the competition track. Yeah. And there's some crossover. But generally there's like you have sponsors in both departments. Yes. But one person is focused on like winning contests, going to the Olympics, going to the X games, doing things like that. And then there's the more like guys that might do backcountry or street or park,

Starting point is 01:31:56 but they're focused on producing like parts basically. Got it. I didn't know you knew so much about it. I know a lot. Yeah. Yeah. So I wasn't the contest guy. I was more in movies and in magazines and stuff.

Starting point is 01:32:07 Yeah. Okay. So I went off and did that. How long were you doing that? Pro for about 10 years, from about 20 to 30. 10 years. That's awesome. Yeah.

Starting point is 01:32:16 Yeah, it was amazing. I mean, that was like my college, really. Yeah, there must be so much fun. It was fun. What is the, what, I feel like entrepreneurs can probably resonate with what, like, a pro snowboarder is doing where your job is to basically produce, right, like a banger part, a season, potentially multiple, and there's like this, where you're basically

Starting point is 01:32:37 like... What is part? Like, that's like a five-minute video that might be released independently or as part of an entire movie. Okay. And so your job is to do enough tricks. Yeah, yeah, yeah. Stomp them. Yeah. As Nemo would probably stop them. It's a lot. Yeah, it's a lot. I mean, there's, there's, like, you pick out a song, you, you know,

Starting point is 01:32:55 that you want to have in your part. There's first part, and then the most prestigious is being in the last part, you know, in the video. Like, everyone... So it's like you got this video and everyone's supposed to be on the same, like, kind of like team to make this best video. There's like probably 10 snowboarders going after and doing it. Yeah. But there's a little competition within that because everybody wants to get last part. You know what I mean?

Starting point is 01:33:15 And so it's not a team sport. You know, you're really out for yourself. And like there are a lot of lessons that you learn, especially growing up skateboarding, you know, where it's like fail, fail, fail, fail. Like learning at a kickflip takes you six months of just failing and then you figure it out. And so, yeah, then the other thing is these parts come together, it might be like four or five minutes, right? It's just one trick after another, but you're missing, sometimes they'll include it, but they're missing like the blooper reel, which is like sometimes you have to fall really, really hard 20 times in a row to land the one that you make it look easy. And that gets cut out. So I feel like there's so many, there's so many lessons out of that.

Starting point is 01:33:58 You know, a lot of successful entrepreneurs would have, would have, you know, failed. miserably for years and then they have that breakthrough kind of like product or feature or whatever it is and snowboarding it's happening on like a day-to-day basis where you have like one season right to put together your part and you're kind of like racing against mother nature in some sense can you chase the winter into the southern hemisphere effectively yeah yeah yeah yeah so you would be how many days would you actually be snowboarding over a year i mean five days a week like i i ended I lived in Tahoe, Mammoth, Utah, and all that, but I ended up landing in Big Bear just because it was like, the weather's always good for, if you want to just snowboard every day and train.

Starting point is 01:34:43 The weather's always, you know, sunny and nice, and it's not, like, icy or cold. So I would just go there and snowboard every day and then fly out of LAX to wherever I needed to go. And Big Bear is, like, basically one lift that you're just going around and around, and there's, like, like, the best snowboard part. The best snowboard part. Yeah. Yeah. You can hit on one, so you like go, you might be hiking, like, a little bit on one feature.

Starting point is 01:35:04 Yeah, yeah. But you're basically lapping it. So people that, like, don't like park go there, and they're like, this is the worst mountain ever. Sure, sure. You're used to skiing in Mammoth, Tahoe or Colorado. But if you just want to ride park, Big Bear is incredible. Jordy, we're going to have to go, man. I know.

Starting point is 01:35:18 Yeah. I know. No, I went through, I did almost like 50 days, I think my junior year of college, a lot at Big Bear. I would just go up and lap the park. Nice. A lot of good memories. Yeah, so it's a project. It's a project that you're...

Starting point is 01:35:32 What's that? Where do you ski in the southern hemisphere? If it's summer here, I imagine that even Big Bear, there's no snow. And so you have to go to the southern hemisphere? The only time I snowboarded in the summer was going to Mount Hood where it was like there's a glacier. Oh, okay. Do you know about that? It's still snow.

Starting point is 01:35:47 I don't. There's still snow. So it's in Mount Hood and they have like the summer camp. Okay. And so all these kids go and a lot of pros go and stuff. But honestly, during the summer I would just skate. I would skateboard. Yeah.

Starting point is 01:35:57 Yeah. Yeah. Yeah. Okay. Okay. So the reason you're here is because you built Salt and Stone over the last eight years. Partially exited this week. I don't know.

Starting point is 01:36:08 I don't know which I know the numbers. I don't know what numbers you're disclosing. But yeah, take us through. What was the transition like? I'm assuming you didn't just like retire and immediately start Salt and Stone, or was it effectively instantly? So I had a couple of ventures within that industry. like the surf, skate, snow world. And then, you know, Salt and Stone was this idea that I had had.

Starting point is 01:36:34 Which is like, I don't know if you can give any context on that, but like brutal industry because every single pro and everybody adjacent also wants to start ventures within the industry. Yeah, yeah, that's true. But, I mean, there's just such a ceiling in that world, you know, unless you're like end up being a Burton or a Quicksilver or something like that, right? Yeah, and even those brands have struck. Totally. So I knew I wanted to do Salt and Stone and, you know, I wanted to do something on my own, to be honest with you. I had, you know, just, I had business partners and everything and I wanted to just see how far I could go if I just went like all in 100 percent, like, not have to, you know, worry about waking up at 2 in the morning and doing, you know, emails and just just going so hard and just, I could justify that if it's just like all me and I'm just like going for it. And so, yeah, and so transitioned over to that full time. And it's been just a ruck. it's been such a great, such a great day. Yeah, you guys did 165 million last year. Yeah.

Starting point is 01:37:33 Scaling still. What was the first product? The first product was sunscreen, actually. Yeah. So sunscreen was a, which again is like a brute is I would say like from my perspective, sunscreen's like a brutal category because like a lot of people use it throughout the year. But like much fewer people actually are using it enough to like need to even be on a subscription. And then oftentimes you're buying it like just in a random hotel like, you know, retail store because you're on vacation. Anyways, but yeah, I mean, I always wanted to do deodorant and sunscreen was the, it just, it just happened faster as far as searching for the perfect, you know, chemist contract manufacturer and all that stuff to bring it to life. And so sunscreen came out. The brand was profitable from day

Starting point is 01:38:16 one. And then when we launched deodorant. How did you sell, were you just selling it, D2C? So we had some retail on day one. So I have. had retailers lined up. We had, I think, about 40 to 50 of them. And so as soon as we were shipping orders, we were collecting payment. And so, you know, I funded it out of my own pocket to start, but I was able to pay myself back pretty quickly and, you know, the business was probably. Were those 40 and 50 stores? Were those individual stores or chains? They were individual stores for the most part. Yeah. Yeah. And then it was when we launched deodorant was really when it, you know, stores started come into us.

Starting point is 01:38:51 What's the, what are the economics of like getting one sunscreen product? It sounds like one skew into one of those stores. Are they buying like a $100 box or $1,000? There was a minimum, you know? Like, from my memory, I think it was like a case pack of 12 sunscreens. Okay. I came out to like $300 or something. Okay, yeah.

Starting point is 01:39:09 And then they can sell it at a markup and then SRP. That's right. Okay, that's right. How quickly did you realize that like my experience having invested, in CPG over the years is the number one factor that leads to success is not like operational excellence it's not always just the team it's just like how good is the product and I've seen a lot of like exceptional teams that have like all the operational chops that have all the experience come out with a product that might be fine or

Starting point is 01:39:44 pretty good but they just don't go anywhere they can never reach escape velocity because the product fundamentally, like, doesn't really sell itself. Like, you can sell it. It might cost a lot to acquire customers. The sell-through is not that great. Retailers don't really love it. And when I first tried your deodorant, after trying probably, like, 20 different, like, better-for-you deodorants, I was like, wow, this product is, like, incredible.

Starting point is 01:40:10 And I've, like, retained across years, even though I don't even know that I've maybe bought it on the website once, maybe bought it on different stores online, or I've, you know, I just buy it in the grocery store, but I'm like permanently retained because I tried everything else and this is just the best. It like goes on well. It smells good. And so I was just like sold off of that and you didn't need to be like the best at like email marketing to me or like have the best like retention flows because I was just like it's a good product. I've tried everything else. And so I'm wondering like how you how quickly you realize that from like a product development standpoint. How much of like what is your ethos around product development?

Starting point is 01:40:49 When is a product ready to actually go to market versus just still on that kind of testing phase? Yeah, that's why we launched sunscreen before deodorant because we were just trying to get everything perfect, right? And so we did something in deodorant that hadn't been done before, especially in clean deodorant. You know, what was deodorants before didn't smell the way I wanted to, right? Like they didn't have these sophisticated scents, and clean deodorants didn't work,

Starting point is 01:41:13 or they weren't really like a pleasurable experience to use, and they certainly didn't look good. Yeah, they'd be like mint. Yeah, yeah, exactly. I don't want to smell like toothpaste. Yeah, yeah, exactly. It's like, you know, why shouldn't it smell as good as your perfume or cologne, right?

Starting point is 01:41:26 And so just hitting it on all cylinders and making sure it's, you know, perfect. And for me, I was really making it for myself, right? Like, what do I want? And it turns out what I wanted was, like, what everybody else wanted, so. Yeah. Do the company ever almost die?

Starting point is 01:41:41 No. I love this story. It's been a dream come true, right, man. It's been fun. It's so funny, because, like, the classic philosophy and adventures, it's like, yeah, we almost, here's this time, we almost died, and in talking to you, like, getting to know you, just, just recently, it just kind of seemed like it was just, like, permanently up, up into the right, and you, you told me one story that was, like, not, like, kind of annoying around on the, on the capital side,

Starting point is 01:42:14 but nothing that was like, it didn't feel like you experienced that much hardship. You kind of just one-shotted entrepreneurship. And it's so crazy because I know, I know so many, you started the company at like the peak of the D-to-C boom. Like this was a time, this was 2017. 2017, right?

Starting point is 01:42:31 And so this was the time that like everyone was like, Red Antler, Gin Lane were just pumping out brands. There was so much capital flowing. There was, um, there was like a, there was a school on the East Coast. I forget the name of it, but they had like an MBA program that was like every single... Not Harvard. It was one...

Starting point is 01:42:53 No, there were a lot of... There were a lot of MBAs. Yeah, there was like... Every person in an MBA program would be like, I'm building a DDC brand, and they were just picking off all this categories. And there were some really good outcomes that people were tracking against, like Dollar Shave Club and Harry's, and there were a number of companies where it was like, oh, they did Warby Parker. They raised money. They did the VC playbook, and it's sort of penciled out for everyone. But then later people realize, like, oh, those were more like one-off exceptions to the rule where you get a Unilever who gets excited and buys a dollar shave club for a billion dollars and maybe doesn't wind up realizing a billion dollars of value because it's just a young company. So I mean, honestly, I feel like it's just the power of a founder who's just going to be relentless and go up against the big guys, right? Because I interview people from the big guys all the time.

Starting point is 01:43:40 And I'm shocked at like how sleepy some organization. are, right? And so if you even have a team of three people that are just relentless, and you guys know from like what you guys do, it's like you can't compete with that. I don't care how much money you have or what incubator you're in or what VC's starting you, it's if you have a founder who's just going to be relentless. How did the approach to funding evolve? Like, because you said you were like profitable from day one. You did raise at a couple different points, a little bit of money, but did you, did you care? about maintaining profitability or did you ever go through periods of growth where you thought,

Starting point is 01:44:18 okay, we can burn a little bit here to get to the next stage? We've always been profitable. That's always been important, right? I just want to make sure the bank balance is growing. The raises were secondary, right? It was me sort of taking chips off the table. The business has just been so profitable that we didn't really need to inject it with money, you know? And so it's a healthy business, man.

Starting point is 01:44:39 I'm blessed. Venture capital? Not really my cup of tea. It's just so crazy. I mean, it just goes back to you guys nailed so many different elements of the product. And yet I know people that started deodorant brands during that same period that just didn't, they just didn't go anywhere. What's the early team like? The early team?

Starting point is 01:45:02 Yeah. Yeah. So you have the idea, solo founder. And you mentioned Copack. Did you work with a formulator? Do you hire a salesperson first? Operations manager? somebody just to help you personal assistant?

Starting point is 01:45:14 Like, what was the stack? Yeah, so first two, first three years was myself, just myself, right? And then for that, it was really working with contract manufacturers chemists, but also, you know, bouncing off my internal network on like, hey, I got this deodorant sample. Like people I trusted their taste and what, you know, here's the goal. This is what I'm trying to achieve here. Like, let's test it. Yeah.

Starting point is 01:45:37 So that, myself, you know, my wife like constantly were, smelling each other's underarms, you know. Is it working in the lab? Yeah, you know, it was just relentless, man. It was like, we know what we want in a product. We see what else is out there. We have all the other products on our shelf, right? Like to just see what they're like.

Starting point is 01:45:54 Let's make something better. Right? And so, and then three years in, I hired, I hired somebody who really took on all the ops, all that stuff off my plate. That's not where I excel ops and, like, finance and like all that. I'm more brand product. Anything the customer sees, that's what I love.

Starting point is 01:46:11 And so when she took all that and she really excels at that stuff and it was me and her for like three years, four years after that. Wow. Or like two, three years after that. Still just a couple people. Wait, this is like 2020 and you're still two people? No, 2019. No, it was like, yeah, sorry, my years or, yeah. Three years of two people and six years.

Starting point is 01:46:33 No, then we started hiring. So she came on board and it really, I saw how it would really excel the business. And I got to focus on what I like to do. She came in and crushed it way better than I could do on the other stuff. Yeah. And then I saw power of team. And then from there, we just started hiring people, hiring people. And then just got the confidence to keep hiring.

Starting point is 01:46:52 Because the more we hired, you know, we hired the right people, then the business kept growing and growing and growing. And then all of a sudden it's $1006 and we're the best selling diodern on Amazon. How big is the team now? 50, 55. That's still really tight. It's really tight. We have a high bar for what we bring in.

Starting point is 01:47:07 Like it's, you know, we'll interview people and I'll know within five minutes. Are you in the office or remote? No, no office, all remote. All remote. All remote. This is like the most insane, the most insane story is it's like, you know, most most most most most battle-scarred founders. Telling you, man, we're blessed.

Starting point is 01:47:32 It's been a fun. Okay, so walk me through the product portfolio expansion, how that happened. and then are you subdividing sales reps by region or vertical or channel? We don't have sales reps. No. No. Sales reps never. So here's the thing.

Starting point is 01:47:54 Here's the thing. Like you got to create a brand that the retailer wants. Yeah. Right? Like you don't want to go and just like push something down a retailer's throat and have your sales guy knocking on the door and that stuff. And that was it. Like really focusing.

Starting point is 01:48:06 Like this wasn't all just like, oh, it's just happening. It's happening. It's like an obsession. Yeah. Like I got, I turned into an advertising expert for like six months. All I did was want us to have the best ads, the best digital presence, right? And I create a brand that the retailers needed to have, right? And then from there, then those retailers need to have you.

Starting point is 01:48:24 What was that, knocking on the door? What was that advertising process like? Were you looking, were you reading Ogilvy, looking at the grades, watching everything? Looking at all the competitors, seeing how they do, right? And really, it's like not looking at the other indie brands, like looking at the big brands, right? I always want to take inspiration from the brands, like the Nikes of the world that are going to be here in 100 years, because that's what I want this brand to be, right?

Starting point is 01:48:44 I don't want, this isn't some like influencer brand. I'm not an influencer, right? I'm not in front of the camera. Like, this is something that I want to be a legacy brand that's here long after I'm gone. So those are the brands I look at for inspiration. And then how are you actually instantiating your learnings? Like, are you directing photo shoots?

Starting point is 01:49:02 Are you casting models? Are you writing copy? No, no. Once you go through that six-month, brand exercise. You become the expert. Are you, are you like, you know, taking a project, a brand project from start to finish, or are you picking an agency or hiring people? It was start to finish. So there was a time where I was picking out models, picking out photographers, videographers, helping with the edit, like all that stuff. The edits here and then go in and work with that.

Starting point is 01:49:27 Yeah, yeah. And if there's static, like still photos, I would go in Figma, drop text overlay, figure out what to say, like all that stuff. And yeah, I mean, I just threw everything at it. And all I did, I gave up all, like everything, all my hobbies, like snowboarding, skateboarding, like, all that stuff. Like, I got into golf for a second. All of it ended. Like, it was just like, I'm going to go in on this. But like, when you get a signal that the thing is working, right? Yeah.

Starting point is 01:49:49 Then you want to. Because the bank balance is going up. Bank balance is going up. You're having fun. It's like really your purpose. It's just like nothing else I want. Like, I want to build. I want to build it.

Starting point is 01:49:59 What do you think about international expansion? What do I think about it? Yeah. How has your thinking evolved? What's the strategy? Is that something? that a lot of companies go through this moment where they're like, maybe it's so operationally complex

Starting point is 01:50:12 it'll change the business, so let's put it off, let's maybe wait until we're at a point where we can team up with a bigger company and through a merger acquisition and let them bring their operational force so that you don't need a person in every locality because they will bring that to bear and you're set up for success.

Starting point is 01:50:29 Yeah, no, so we've already expanded internationally and, you know, Sephora, Canada, Yes, Sephora, UK, Space and K in the UK, Sephora Europe, we just launched, Middle East, Southeast Asia, so on, so on. That being said, there's a lot more opportunity. And that's one of the reasons I chose Advent to be the partner here

Starting point is 01:50:49 is because they have a strong expertise in international. And I feel really great about them. I mean, look, my goal was never to just exit out fully and just put it in somebody's hands and let it go to shit. Like, that's not what I want. I want the brand to, I want my grandkids to look at this thing and be like, oh yeah that's what my grandfather built you know I wanted to be around I wanted to be you know what it was always meant to be and not turn into some you know discount brand so yeah what what was the how many did you have a bunch of opportunities to sell prior prior to this moment I'm assuming people were just like kind of seeing public metrics and sell through and all these things and hounding you at different points what was the process of like knowing when the time was was right we had a lot of private equity reaching out

Starting point is 01:51:35 A lot of people reaching out in general. And so I worked with Raymond James, who I love. And I would just forward it to them. And they told me when it was time. And it was like, let's go, let's go explore. Let's go explore the market. Yeah. So this was not a story where you met your acquirer like years and years ago?

Starting point is 01:51:51 We've been talking for about, you know, for several months, six plus months, you know. And I really, really like them. You know, and for me, it's when I did the deal with humble growth two years ago, you know, we had like 15 private equity funds to choose. from. And I like them because of who they, of who. No, we had a lot. We had a lot of bidders, you know. No, no. I think this is, you know, you know, if you were looking for, you know, the, the hero's journey of founder stories, this isn't it. You can turn it off. I mean, it is. It is, it is, it is, in a way. It's missing some plot points. There's a lot more to it. Yeah. But yeah, I mean, it's just,

Starting point is 01:52:31 choosing good people to work with, right? People who can do it with integrity. And, and that I want to work with and that like are aligned vision-wise on like what the brand is going to be in the future and let's go build that together. Yeah. What advice have you been giving to people that want to follow in your footsteps that this is like kind of what I feel like every CPG founder imagines is just like, yeah, I'm going to be building for like eight years and then I'm going to sell for, you know, half a billion to a billion to a strategic.

Starting point is 01:53:03 and yet, you know, the hit rate is obviously, you know, something probably like, you know, one percent, right? And over the last year, there's, I feel like there's actually been a dip in new brand formation. At least that's what Sean Frank was, was, I think, mentioning on, I think, at the end of last year. And his point of view, he's the founder or the CEO of Ridge. and he's like, okay, and two years are people going to want new brands to choose from? And his point of view is like 100%, right? Like there's constantly a desire for newness and that kind of founder-led product development approach that made salt and stone what it is today.

Starting point is 01:53:48 So, yeah, what advice are you giving? I mean, honestly, like, I didn't read any entrepreneurial books or really listen to any, like, entrepreneurial podcasts or anything until I just went off instinct. Like you got to fight. We're fighting for our life. My advice would be, would be to go all in. Like, you can't go and be like work life balance. And like, I want to, you know, check out at five.

Starting point is 01:54:08 Because, like, there's going to be someone right behind you that's going to come and take your place and be that brand that comes in and does what you want to do if you're going to just chill. Yeah. So it's like you got to make sure you love it. Because that's the way you're going to be able to do it, you know, basically around the clock from the moment you go to sleep to wake up. You know, it's something you've got to love to do. and it's got to be your passion, right? And so you got to just go relentlessly. And I would say, like, forget the work, life balance stuff.

Starting point is 01:54:33 You just got to go hard. You got to go all in and just use your instincts. You know, you just got to be competitive and go after the big guys and don't be afraid. And just go, you got to go for it. Go all in. Yeah, I like to focus on the actual incumbents. Like, a lot of people will focus too much on, like, okay, who are the other new brands in my category and just actually studying, like, okay, what makes the big players actually successful?

Starting point is 01:54:56 It's like, okay, massive retail distribution, like actual IP on the product side, all these things. Yeah. I mean, for us, it feels like in beauty there was such a playbook. Like every brand looked the same. All the content was the same. It was like pay the influencer, have the influencer talk about the product, post it on your social, like over and over again. And that's the playbook. And I didn't want to, I didn't even know anything about beauty, really.

Starting point is 01:55:20 Like I don't come to skateboarder, you know, I don't come from beauty. I like, I like fashion brands. I like, you know, lifestyle brands. coming into just being inspired by the Nikes of the world, the big brands instead of looking at beauty, I think played in our favor because we came out and it was like, oh, this is different, you know? Did you do any like community marketing?

Starting point is 01:55:39 Because sometimes there's a brand that I love. Let's maybe it's like, I would say like if a deodorant brand was putting together an event, I don't think I'd be like, I gotta be there, but did you do anything that like worked, that broke through that like was material to the business? this because I feel like sometimes it's very distracting for CPQ brands to like do IRL marketing early on because I'm like I usually will ask a founder like okay how many units have you sold in the last month and they're like a thousand a thousand I'm like okay then don't

Starting point is 01:56:11 spend $30,000 on like some activation like you should just like make a product that actually sells well and then you'll have opportunities to do things yeah I mean early on that was my philosophy too it's like why are you going to go waste money on something that you don't know is it's going to move the needle so it's like spend it like if our ads they're going well, like, let's just pour more money into that versus, like, doing some pop-ups somewhere. But now we're at the point where those IRL pop-ups, it's, I think it's good. It's good brand building, you know, and so we do that now. We do pop-ups. Yeah, but pop-ups are, I would say, different than, like, a lifestyle event that is just, like,

Starting point is 01:56:43 a bunch of people hanging out. Yeah. What about owned retail, like flagship store? Have you looked into that? We're looking into it. So, yeah, yeah, so we're looking at, we're looking right now. Yeah, yeah. But, I mean, it says a lot that you didn't jump into that in year two, for example. Yeah, I mean, it's, you know, it would be tough to do that and maintain profitability, right? And so it's like you're fighting for your life. You want to make sure it's profitable. Yeah, it's balancing. You need enough awareness that you're actually going to get upside, but then if you have complete awareness, it's probably like you're already stocked everywhere. So it needs to be in the sweet spot. Yeah.

Starting point is 01:57:13 Makes sense. Interesting. Such an amazing story. Honestly, it's like, it's like a very unique. It's amazing because it's like it's exactly what people set out to do. and yet it's so uncommon to just like go up into the right every month. It's very refreshing. It's like work hard and don't get caught up in a bunch of, you know, stuff that doesn't matter.

Starting point is 01:57:38 Do the things that matter, right? And you're going to be relieved. He's now a David Senra enjoyer. Oh, really? Love his podcast. He's fantastic. Yeah, yeah, yeah. So he's getting to enjoy David Senra after climbing the mountain.

Starting point is 01:57:48 That's amazing. That's funny. I hear that. It's like I hear the hustle stuff and like you got to do this and you got to go all in And I'm like, yeah, like, I naturally kind of do that, you know, it makes me. It works. But even, yeah, I mean, David talks about this a lot where, like, even, like, a lot of his audience members are not listening to it and saying, oh, I never considered working hard. They're saying, like, it's a reminder.

Starting point is 01:58:12 It's a, it's a meditation on their current philosophy. And then it's a bunch of other examples and just confidence to continue being different because there's a lot of people. As simple as like focus is, there's a lot of people that feel pressure to continue their golf game. Oh, I need to have this super complicated seven-part strategy. That, that. And then also just like the work-life balance thing, like there's a lot of pressure to not be that person who's not, who's turning down invites to the golf trip. And that's, and so the Founders podcast definitely like reinvigorates you to like add more confident that you're not crazy. You're not the only person doing this on earth.

Starting point is 01:58:48 100%. Yeah, I love his passion. It's great. I'm going to introduce. you guys, you guys are going to have a lot of fun. Yeah, this will be great. Brand wise, though, we're just getting started. Honestly, things like that, you know, and so this partnership's exciting and I can't wait to keep building this thing. Yeah, amazing, dude. Congratulations. Thank you. Yeah, thank you so much for taking the time to come to show.

Starting point is 01:59:07 See you back at the ranch. This is great. Let me tell you about Phantom Cash, fund your wallet without exchanges or middlemen and spend with the Phantom card. And let me also tell you about Vanta. Automate Compliance and Security Vanta is the leading AI trust management. platform. Let me get my headphones back in. Back to our guest. A lightning round. Yes. Yes. Yes. We have John McNeil, the author

Starting point is 01:59:31 of the algorithm in the Restream waiting room. Get a meeting watch. What's going on? My a.m.'s back on. How are you doing, John? Hi, guys. Hey, how are you? I need to adjust my headphones. Great to meet you.

Starting point is 01:59:45 Great to have you on the show. We're having a lot of fun over here. We just had a friend of mind, Nima, kind of tell a story. He just exited his company. He has sort of a one-step algorithm. Yeah. His algorithm was just like, focus, work hard, and he one-shot at entrepreneurship. He was like, I think I'm going to just be a solo founder. Then I think I'm going to build remote and then scaled to 165 million of revenue and eight years profitably. And then just asked him like, does the company ever die? He's like, no, we were all rightful. Not die. Did it ever almost die? Come close to dying.

Starting point is 02:00:17 He's like no, no death scares. It was like the opposite of Elon. Yeah, yeah. Yeah. But, you know, that's the beauty of the show. We go all over the place. We like to talk to, you know, entrepreneurs who have all sorts of different paths. And fortunately, we have someone here who can tell us about Elon Musk's journey, which has been much more tumultuous. But why don't you start with the introduction and how you got to a place where this was the book that you wanted to write? Yeah. I wanted to tell the story of how, like, Tesla and SpaceX to a certain extent work on the inside. Like there's, and I asked Walter Isaacson when he was writing his book on Elon, like, why don't you tell the story of like, how jobs runs Apple, because there's a really specific way jobs ran Apple and his other companies. It's the same with Elon. There's a really specific, like, operating system and way inside a test. So why don't you write about that? And Walter said, I don't write business books.

Starting point is 02:01:04 Yeah. And I write character books. So he turned to me and said, you've got to write that book. Yeah. And so that's the short answer. When Walter Isaacson tells you to write a book, you write a book, you read a book. You can be about to listen. Okay, so talk to me first about the process of distilling the,

Starting point is 02:01:21 work philosophy, how Elon works inside of Tesla. And then actually take me through the algorithm, the steps. Because people hear things like first principles, engineering mindset. But I think all of that is pretty vague. And I think you can concretize it for us pretty well. Yeah. So basically this framework came from two things. One was all the mistakes we made. So you talk about tumultuous. A lot of that was self-cost. And we would do like post-mortems and say like, how the heck did we get ourselves in this situation and let's not do this again. And so what's the principle that would keep us out of the ditch? And so that's how the algorithm got developed. And it was with the goal of pushing decision making out to the edge. And so we wanted two-way door decisions, make those at the edge,

Starting point is 02:02:07 and here's the framework you can use. And it turned out the framework drove innovation too. And so it starts with no surprise simplifying. And the first three steps of the algorithm basically, you've got to simplify. So the first one is you question every requirement you're given. Is it a requirement of physics? Is there a requirement of safety? Is it a requirement of law? And if you can't answer yes to those questions, then you got to consider deleting that requirement. So example of that is we're trying to sell $100,000 things online. Nobody had done that before, sight unseen. And it took 64 clicks to buy Tesla. And 44 of those clicks were in the auto loan and auto lease documents. And it turns out an out of loan documents,

Starting point is 02:02:50 12 pages of paragraph after paragraph after paragraph of how the bank's going to basically kill you if you don't pay. And so I asked the lawyers, can you come back to me and tell me how many of these paragraphs are a requirement of law or regulation? They came back not much longer,

Starting point is 02:03:08 not much time later, and they said, none. Whoa. And I said, what do you mean? They said, none. All of this stuff, all these paragraphs were inserted by well-meaning corporations, lawyers who are trying to save their companies next. And none of this is a requirement of law.

Starting point is 02:03:23 And I said, so literally I could get down to a one page or maybe a one paragraph loan that said, here's how much the car is, here's how much the interest rate is, here's the time period, here's the monthly payment. That's four sentences. And so, like, we did goofy stuff like that. We would question a loan doc. And it turns out that if you eliminate 44 clicks, you sell a lot more of these $100,000 things online.

Starting point is 02:03:45 And so that's the first step of the algorithm is just question every requirement. environment. Second is that you make the new thing or the new product as simple as possible, fewest steps, delete everything that the customer doesn't pay you for. And then you speed it up. Because speed reveals all kinds of warts. And if you can make something go fast, it's got to be simple and it's got to be really good. So good, fast, and cheap is actually false. You can get all three. And then this sounds nuts coming from a Silicon Valley perspective, but you automate last. And it's not so nuts when you consider. like how DoorDash started

Starting point is 02:04:21 five Stanford CS majors in a dorm room. They put up a PDF with a phone number so they could figure out the workflow of the business before they automated anything. Same with the Amazon guys. They put up a web page to order books, but they had no fulfillment capability, so they ran down the street to a bookseller,

Starting point is 02:04:38 bought the book you ordered, dropped it in a box so they could learn the business. And we found this time and time again. When we automated first, like the Model 3 production line, we automated, at first and it never worked. And so the only way we could save the company

Starting point is 02:04:52 was build a tent outside the factory and start building Model 3s by hand. And we learned automate last over and over and over again and it became religion. So that's the five steps to the algorithm. Yeah. There's been a lot of speculation

Starting point is 02:05:06 about the next Tesla vehicle. Somebody was proposing a three, a car with three sets of doors for big families. That doesn't sound simple. The roadster that flies. There's the cybertruck turned into a suburban. What's the product that you want? I do want the

Starting point is 02:05:27 cyberbine. Yeah. Here's why like like when you go to when you go to Tokyo or you go to China they have these like really tricked out minivans. Yeah. And they have every feature. It's like sitting in the best man cave ever. And I want that car. Yeah. I think that'd be a good one. Yeah. What do you think translates from a hardware company with very, very sleepy incumbents, thinking of the car industry, the space industry? What translates to software development, artificial intelligence app building, social networking? What's going to transfer of the algorithm of the Elon way of working? And what might not? That's a really good question.

Starting point is 02:06:10 I think what transfers, these principles transfer of like simplify and kind of go slow to go fast as you're developing like the software, basically your first, your first architecture, what the software is going to look like and what it's going to do. And really determine, like, what are the key features or value we're going to ship and just concentrate like heck on that. Like keep it simple first. And a lot of people have talked about this as a minimum viable product, but I think that's still really true. And then try to make the product as perfect as possible. And like you take Claude right now.

Starting point is 02:06:48 The reason Claude code is winning is because it is the best. And that came out of long discussions about how to simplify the architecture so it could actually do things that Codex can't do, that cursor can't do. And I think that's the piece that translates. It's like simplified down to the two or three things you absolutely have to crush and then literally go crush those.

Starting point is 02:07:12 Yeah, within Tesla, is there a noticeable bifurcation between the software engineering orgs and the hardware engineering orgs? You know, one of the things that Elon believes in is hiring what he calls orthogonally, which means basically that nobody has any experience in the industry because he doesn't want you coming in with a preconceived, like said, frameworks or preconceived notions. And so we were all software people. Like I was a six-time software serial entrepreneur. And we didn't know, I didn't know anything about hardware. I never been in it before. And so we approached every problem from a software first perspective. So an example of that is, like, if you say, okay, to your last question, like, what do we have to crush in the car business?

Starting point is 02:07:57 Well, we've got to get an autonomous car. Okay, to run software in an autonomous car, the requirement of that is we have a single chip. because if you have more than one chip, now you've introduced latency and sinking and all the sort of stuff you have to do. So we can only have one chip. And that's the software first kind of mentality. We're competing with people who are hardware first

Starting point is 02:08:16 who have 18 to 36 chips running in their car, which means they can never deliver autonomy because they're not thinking about software first. And so that software mentality gives Tesla an edge kind of every day of the week. A lot of people have been speculating about demotivation from SpaceX liquidity as the company goes out at a $1.5, maybe $2 trillion valuation. There's a lot of engineers who are great.

Starting point is 02:08:45 They're about to have a lot of liquidity, and maybe they will decide to retire is basically the thesis. But we've sort of run this experiment with Tesla. What was it like post-IPO? Do you have a read on how the culture changed? Did everyone remain interested in the mission? or were there some people that actually did choose to sort of step back? Yeah, I think the majority of people that were there for the mission,

Starting point is 02:09:10 their mission-oriented, and the size of their bank account over time grew, but it really didn't matter to them. They were showing up every day just to solve the next thing that was in the way. There were some people that cashed out along the way, but they were kind of the minority. Sure. And one of the things that Elon did was something that I had done in each one of my startups, and a lot of entrepreneurs do, which is you kind of starve the balance sheet.

Starting point is 02:09:32 raise only as much capital as you need because the first principle is you don't want your company go soft. And when people see a big number on the balance sheet, you're not close to death and people aren't like really, really moving as fast as they can, aren't as motivated. So even after we were public, we operated Tesla on a quarter's worth of cash, believe it or not. And I kept saying to Elon, like, I would like a little breathing room. He's like, no, no. Like, we got to think about this like when we're young entrepreneurs. Like, if you're close, if you're two steps from death, you operate differently. But I was like, man, we have a quarter's worth of cash, but we have 70 days of payables.

Starting point is 02:10:07 That means we have less than three weeks of cash. Like, this is tight. But that kept everybody sharp. And what we started to worry about was post like Model 3 and Model Y when we actually started to generate cash on the balance sheet, like how we could make sure the company stayed sharp. And SpaceX has had this advantage of that for. a long time and Gwen and Elon are going to have to manage this now post IPO. But my sense is most people are there for the experience of working in a must company is that you are literally on the

Starting point is 02:10:40 biggest challenge you've ever faced in your life with the best people. And you are, you're doing the best work of your life. And so that's what keeps most people engaged. It is not the balance in their bank account. How do people stay engaged and so laser focused on like a singular mission when Elon has like a new hot thing every six months, maybe? And there's like, it feels like if he were to share that cultural tenant of like, try and solve every problem that humanity faces with the rest of the organization, you would have a very scattered organization. But that's not what we see. So how does that dividing line happen? So like I started to get the entrepreneurial itch a few years in.

Starting point is 02:11:18 And so I went to him and say, hey, look, you know, you're starting open AI. You're starting Neurrelink. You're starting the boring company. Like, I've got to scratch the stitch too. Yeah. And he basically said you can't because because. because I got to have you focused so I can go do these things.

Starting point is 02:11:33 But then it was pretty cool. Like we designed this way that I could scratch my entrepreneurial it, which was just doing it inside of Tesla. So we invented mobile service. We invented insurance inside of Tesla, which now is the third of the cash flow. So I got to scratch those itches,

Starting point is 02:11:52 but you start to learn, like, Quinn's job is keeping SpaceX focused. My job was keeping Tesla focused So he could go exercise that Da Vinci side of his personality. Yeah, yeah, that makes sense. George, do you have anything else? Where are you investing mostly these days outside of the Elon orbit? Yeah, so we start companies from scratch at my venture firm,

Starting point is 02:12:18 and we're investing in, I would say, the intersection of AI in the real world. So what that means is, like, we pulled this amazing team out of Tesla that it did the supply chain automation and optimization. and they've created a business called Atomic that is just slaying it. We created this really cool platform for restaurant hospitality where at any restaurant you can get up and walk out without having to pay the check because it already knows who you are and what you eat. So every restaurant becomes like a London supper club. So we're deploying AI.

Starting point is 02:12:51 Which company is that? That's called Zumi. Okay. I know a friend of mine has another company competing in that category, same pitch. but I'm sure he'll be devastated to know that a busco-adjacent company is. Yeah, there's room for more than one of us. I like having competition. And that's a really tough technical solve, actually, to be able to pull that off. So it'll be protectable if your friend's company's working on it and there's room for both of us to swim in that big ocean.

Starting point is 02:13:22 What's your advice for American auto manufacturers? Because it feels like they're just, you know, They're behind in autonomy. They're behind even from a feature standpoint with a Tesla or a B.YD. I see these electric cars out of China where it's like it has 1,500 horsepower. It's as big as a suburban and it drives itself. And then you're like, and it'll cost $35,000. You're like, that is impossible. How can we possibly compete with that?

Starting point is 02:13:52 So, yeah, what should American automakers broadly do? Well, this is a real challenge that I, that I, that I, I'm a part of because I'm on the board of GM now trying to help them navigate this. And so like when I walk around the streets of Tel Aviv or Mexico City or Paris, you see all the BYDs, it's your point. These are not crappy cars. These are really good cars and at a really good price point. They're at that price point because the government subsidizes the heck out of that business in China. You get free factories, free labor, free parts, basically, so you can sell stuff super cheap.

Starting point is 02:14:23 But that is for real competition. What is their, to your knowledge, what is? the long-term thinking there? Is it effectively like an employment program where they just want? Or are they looking at it like cack where they're like, we'll lose money for a decade, but then we're going to make it money for four decades? Or like, what are the kind of pillars do you think of their strategy overall? It's a combination of both of what you guys just said. So on your point, Jordy, it is the way that you keep a single party system in power is you provide jobs. So job growth is the one metric that every level of government gets bonus on there.

Starting point is 02:14:59 Can you imagine like the American government, everybody gets a bonus that doubles their base salary? And that one metric is GDP growth. That's what you have in China. So they start with that framework and they say, we've got to provide jobs. And the way we're going to provide jobs is every five years, we're going to announce five industries that we're going to enter and dominate. And the second, well, the third pillar of that is then that they, subsidize a hundred market entrance to come in, and then they let evolutionary biology take its place, and may the best person win. And so they get down to the top three or five competitors

Starting point is 02:15:35 that are winning. So in this case, it's like B.YD, Gilly, Neo. And they say to those competitors, now we're going to consolidate all of the capacity that we've created with these hundred companies under U3. You get it for free. And your job now is to export and dominate these markets. So they've gotten subsidies to get started, subsidies to operate, and now they're getting capacity for free. And they've proven themselves as the winners in a hyper-competitive market. And now they go enter the rest of the world where the competitors aren't, are soft. And that's their formula. And they run this formula across all kinds of industries. They've run it in solar panels. They've run it in TVs. They've run it in bicycles. They've run it in electric cars.

Starting point is 02:16:22 And it's a very powerful flywheel they create. But those are the four pillars. They're also starting to buy legacy brands. Have you seen this? That's where it gets really interesting. They're feeling Volvo? Yeah. So, like, people talk about our Chinese cars coming to America,

Starting point is 02:16:39 and my answer is they already are. It's called Volvo. Yeah. Volvo is owned by Geli. And, yeah. And Zeker is providing now the new Waymos that are hitting the road, because Jaguar stopped the iPase production.

Starting point is 02:16:52 So the new cars you're going to see are Zekers. So we already have two Chinese cars that are on the roads in America. This is not like a theoretical. It's an actual thing that's happening. We interrupted you as you were explaining, like, you know, how you're kind of advising GM and what American manufacturers need to do to actually. Or even America broadly. Yeah.

Starting point is 02:17:16 Considering they're coming for every physical good. Like, should we fight back? Or is this like Happy Meal Toys? where it's like not that big of a deal that they're over there. I think it's a big deal. I think it's a big deal. So the auto industry is 5% of GDP in the U.S., but let's like consider you're in Germany

Starting point is 02:17:33 is 29% of GDP or it's close to that in Japan. Like you can't let your car business, your car industry go because there's so much GDP's tied up in it. So that means we got to compete. And competing means we got to have like super compelling product and we've got to have super low-cost manufacturing. And what's a little scary is like Amazon invented this thing called the lights out warehouse.

Starting point is 02:17:53 Yeah. And it's lights out because the warehouses are so automated, there's no humans, so therefore you don't have to turn on the lights. The Chinese already have lights out factories. So like Jomi has a lights out factory where raw materials come in one end of the factory. There are no humans in the factory and Finnish cell phones come out the other side. That's crazy. And there's like a couple of electricians and plumbers keeping the thing running.

Starting point is 02:18:15 But the plant manager is actually an AI that's running the plant. Yeah. That is something in America's. got to get ready for. And to get ready for it, we need a bunch of manufacturing engineers. And Tim Cook says this all the time. You could gather the best manufacturing engineers in the country and they would fit in the auditorium at Stanford. If you gather all the manufacturing engineers in China, they would fit in three Stanford football stadiums. Like we are so outgunned on the manufacturing engineering and that's where we've got to like shift this fast. But that's

Starting point is 02:18:48 got to be a demand pull from places like GM and Ford and others who are moving diligently in this direction. And is the answer, like literally Stanford? Like, does Stanford need to be training those folks specifically? Or is it more money for trade schools or online courses? I think it's all the above. Yeah, it's all the above. Like, Stanford needs to be training them. So does Purdue. So does Illinois. So does Michigan. So does Penn, et cetera. Like, we got to, like, we got to put a focus around this and really bring supply chains into the U.S. so that we can have a fighting chance of not only building super automated factories, but super efficient supply chains next to them.

Starting point is 02:19:25 Well, hopefully we can execute. Thank you so much for letting down the algorithm and showing people how it can be done. And we appreciate you taking the time. Yeah, fantastic to meet you, John. Feel free to pop on the show whenever you feel like it. Yeah, we'd love to talk to you more. Same guys, really good to talk to you. I'm a big fan.

Starting point is 02:19:43 So thanks for having me on. Thanks so much. We'll talk to you soon, John. Great hanging. Have a good one. Let me tell you about Plaid. Plad powers the apps you use to spend, save, borrow, and invest, securely connecting bank accounts to move money, fight fraud,

Starting point is 02:19:53 and improve lending now with AI. And without further review, we have Kari from Linear in the Restream waiting room. Let's bring them into the TV and Ultron. How are you doing? What's going on? I'm doing great. How are you guys? We're doing well.

Starting point is 02:20:05 You've been stirring up the internet this week. Cooking. It's my favorite hobby. It's definitely like something I like to do. Well, we're excited to talk about. about it. So yeah, take us through kind of the announcement this week, what led to it, all that stuff. Yeah, so this way we got linear. We kind of wanted to share more about like what is our thinking and kind of read on the market and in our category, which, which kind of historically has been this issue tracking project management. And like I wrote this essay that kind of like tries to like talk through some of these topics. And and it starts with this like somewhat like controversial.

Starting point is 02:20:46 statement saying, like, issue tracking is dead. And I think what I was trying to do with it is to really, like, shake the industries and everyone's thinking around this. And I think what still is happening is that how companies and software companies operate, they still are operating with these old assumptions and, like, kind of processes that are built around the old world, like the world before AI agents and that kind of development workflow. So I think, like, historically, Usually, issue tracking has been this ticketing task system for engineering. So basically engineer doesn't do anything unless there's a ticket. And then like you have to like create the ticket.

Starting point is 02:21:24 Someone else creates it. It goes to engineering. There's some negotiation happening. Eventually the engineer does something with it. And it's kind of like it's almost like this line cook system where it's like someone yells like, we need fries and steak and then in the kitchen they start cooking it. And it's kind of dumb. And like I always thought it was dumb.

Starting point is 02:21:43 but it's like how a lot of companies tend to operate. And the second problem, I think, is that these legacy platforms vendors have kind of, like, created this kind of idea that it should be complex and, like, they're going to encourage the complexity and the overhead of this process. So we have customers coming to us and, like, hey, we want to switch to linear. But then they say, like, oh, we have this, like, bug tracking process, which is 40 different states. And the buck report needs to have this 30 different. from custom fields.

Starting point is 02:22:15 And then they ask, like, can you do that? And our answer is like, I don't think we should or you shouldn't either. Like, the point of moving to linear is actually rethink some of this stuff. Like, is this still necessary? Yeah.

Starting point is 02:22:27 And I think like this becomes even more clear now is that if the agent can fix the bug in five minutes, but your bug reporting process or the process of running to that process takes a week, it starts to look pretty silly that like the actual work takes a lot less time than actually running through the whole process. You're sitting here being like, I don't want to be like part of the bottleneck. Yeah. And so I think like my thinking here is like I think we can start kind of compressing and

Starting point is 02:22:58 simplifying a lot of these workflows. And even I know that companies do need some process where it's like compliance or security or some other reasons that you just can't remove. I think like the agent can like really handle that. But this statement was really for us to say that I think we should all like kind of look into mirror. It's like, what are we doing here? And I'm like, why? And do we still need to do these things?

Starting point is 02:23:23 And from our perspective, our perspective, we don't. I think we should start looking into different problems. And the different problems is like, yeah, like how do you work with the agents? And I think the problems I noticed today is one is like the context problem. Like how does the agent know what to work on? Or like, how do you set up the agent to work on with? the right context. And we think like linear can be that or is already that context system for humans. So it can also be the context system for the agents. So linear collects, like user bugs.

Starting point is 02:23:55 It collects like user feedback or customer requests. There's also kind of all kinds of projects. You have a goals, initiatives. There's all a context of like what is your product, what is the state of your product and also like what is the future state of the product. And then if you can bring that into the agenda like workflow, I think the agents can work a lot better. So I think at linear,

Starting point is 02:24:17 we want to like look into that category of like context problems and try to like find solutions there. And then the second thing, second problem like I noticed is the agency part that a lot of the systems historically

Starting point is 02:24:30 has been quite static. Like it doesn't do anything unless you move the thing from one state to another. And we think like now the system should be with this right context an understanding of what you're doing and what your team or product is doing,

Starting point is 02:24:45 it could start moving the work on its own. It should become more self-driving. For example, this bug reporting example is like that if the bugs get reported in linear, they should just like the linear agents would look at it, like start debugging it, connect to other tools, make a fix, then eventually at the end, like tag in a human to like, hey, can you authorize or verify my fix? And so then this 40 state park tracking process is now like one state because the human only has to like verify it. And even if it's not correct solution, you still have the option to fix it and work with the agent.

Starting point is 02:25:21 So I don't think we can one-sought problems all the time. But that's like the direction we want to go. It's like, is there work that linear could do automatically that the humans don't even have to look at? And at least at the very beginning of the state and linear could start doing it for, you. And the last thing I'll say, like, I think that we are launching several things over the weeks that we launched this like linear agent, which it's an authentic surface for linear so you can ask things.

Starting point is 02:25:52 You can, like, how I use it is I get feature requests from people. Then I go there. It's like, I wonder what other customers are saying about this problem. And like, can I understand the underlying need? Because I think the problem today starts to become, if you can build anything fast, the problem is not building things anymore. The problem is deciding what to build and why and even understanding what is the problem.

Starting point is 02:26:16 So I think like linear can be a system like where you can understand the problem, shape the problems, and then pick a direction or solution and then start working on the, like have the agent work on it with that like correct context and direction. So and then like in the future we'll also like we're working on our own coding agent, which I think there was somewhat confusion about it. And I think the goal there is like, it's more like a wrapper around this existing coding agents.

Starting point is 02:26:44 And what do we do there is like we can like dog food our own platform, which we have this like agent platform that third parties like Codex and Devin and cursor have participated in. And like they have their agents in there. But like because we are building our own, we can kind of like create the capabilities and the tooling and the hooks or whatever we need better because we also notice the opportunities as we put. build these things. And we also just generally see that there is probably like situations where the linear scoring agent can be better than some of the like generalized coding agents. Yeah, I think I think it's I think it's really smart to, you know, if linear had been started, you know, 10 years prior, you would have been able to just like add, like do the legacy, the legacy SaaS playbook of like, let's just try to add a lot of seats every month and

Starting point is 02:27:34 compound forever. And that was a beautiful existence. and now our entire industry is like disrupting itself. And so you can choose, I think Toby Lutki on David Sender's show was talking about like every category is up for grabs. There's going to be an AI native company in every single category. You can wish that this wasn't happening or you can decide to be that company. And the mature, hard thing to do is like admit that things are changing, embrace it, rally the team around it, rally your customers around it.

Starting point is 02:28:06 I think it makes a lot of sense. How do you think taking a step back, what's your view on how, like, enterprise software categories are evolving? Because I think a lot of people are kind of like waking up to this idea of like everybody wants to be, at least in software development in the pipeline of tools, everybody now wants to be the same, kind of like the same thing. You want to be the place where people go to, you know, encourage. the machines to do things, right? And kind of do that. And so, and how do you see Linear's role evolving? You know, you've been very open to different agents leveraging the platform. I'm sure, you know, you'll continue to be. But, but yeah, how are, like, software categories evolving in this era of, like, you kind of need to be selling. Everyone's trying to sell work. Yeah, I don't, I don't think

Starting point is 02:29:05 I have the complete answer there. I think there's a lot of nuance and it's like depends on the market. I do think that feeling of everyone's building the same thing. I think partially comes from a lot of people are noticing the same primitives and from like the same kind of blocks or pieces of this puzzle. And then they're trying to like figure out like what is the right setup for that. Like what is the right order of those things? And like who is actually the best thing, the best one to like own part of that puzzle? And I think that's like the feeling probably there.

Starting point is 02:29:37 But I think my thinking is that it's similar to earlier software days too. It's like when people invented databases, now everyone's like, why is everyone making databases? Yeah. Like, well, everyone needs a database. Everyone wants to be a system of record. Yeah. So I think there is like a lot of, like, there can be a lot of shared primitives across products. It doesn't mean that every product still like has the same outcome or like the same advantage or something.

Starting point is 02:30:06 and I think like we don't know how this will all play out and I think the other ending on seeing is that there's this like idea of like let's throw everything out like no sass at all and I think that's an option but I think like you can do that

Starting point is 02:30:22 and then you start like inventing stuff back from the first principles and you maybe end up like in the same spot again and I think like that's what we've seen in our space is like everyone's running their agent and now they have 10 agents running so then they put them on a canband board, which

Starting point is 02:30:38 linear has. And then it's like, oh, now I invented the agent orchestration. Like, no, you invented the canpan board, which has been, like, around for, like, 30 years. But you just put the agents on a canpan board. So, like, kudos to, like, connecting those two topics, but, like,

Starting point is 02:30:53 it's not like that some things don't need to be reinvented. Like, some things can still work. But, like, if you just throw everything out, you kind of, like, start from the beginning. And then I think it's a long journey to like figure everything out again. Yeah, I got a I got an investor update last year that was just like workflows have been rebranded in the product as agents. And that was a funny moment because

Starting point is 02:31:18 I was like, okay, some of this stuff is is, you know, very new approach to software, but some of it is just kind of re-some of it is just repositioning. I have one more question, but first we got to give a shout out to Russell Smith from Y Combinator summer 2012. We're not beating the YCS12. We're not beating the YCS12. mafia allegations on this show, since I believe we all went through that one. But my last question is, you know, we talk about linear every day on the show. 75% of enterprise companies are using agents. Have you talked to the other 25%? Like, what is unique about those businesses that they haven't jumped in?

Starting point is 02:31:58 Are they just, like, asleep at the wheel? Or is there something unique about their business where they're sticky and for security, security reasons or some other reason. Or they're using agents but haven't integrated them into their human workflows. Yeah, it feels like this is such, everyone understands how powerful agents are. Why is it not 100%? That's always an interesting question. Yeah.

Starting point is 02:32:20 And to clear the stat is like 75, 77% of linear workspaces have cloud agents. Okay. So there's a difference between cloud agents and the local agents. So we don't track the local agents. So I think the couple things, like the cloud. agents are still somewhat like less developed today. There's like environment problems where like if you have a massive system or some kind of large company system, the environment starts to become kind of complicated and the industry hasn't fully solved it yet. I think it's a solvable problem

Starting point is 02:32:54 and many companies are kind of like solving it with the sandboxes of like you start a sandbox the agent has the right environment and can do the things. So there's like just like a timing piece. similar timing, not everyone has decided to do this and go into the cloud agents. The third piece, which is kind of

Starting point is 02:33:13 the stupid reason, is the policy. So companies are still procurement, IT and securities that will run a lot of decision making when it comes to tooling

Starting point is 02:33:27 in companies. And there's a lot of companies that, the employees ask, can I use the agent? And they say, no, you can't. And they don't have like a reason for it. Or like we have to evaluate it. And that

Starting point is 02:33:39 evaluation takes months. And I think like what the companies need to look into here is like what this has to change. Like you can't like like the industry is moving so fast. So you cannot have like a month long like many month long processes to evaluate every single new tool. Like I think like the security standpoint is like valid. But like you kind of have to like figure out a new way to think about the security and not like block. new tools. So I like want to hack to this I've seen in some companies. It's like they have this friction form. So engineers that want to use like feel friction and that they want to use new tools or AI. They form a fiction form, like file a fiction form. And then that escalates it to the higher

Starting point is 02:34:23 leadership. And then it makes an SLA that has to be resolved in a week or in 10 days or something. And so you force the hand of this like procurement, IT and security people to like do something about it. Because the incentive a lot of times for these jobs is like you don't want to rock the boat. So you don't want to change things if you don't have to. So then like the companies do, I think that leadership should recognize that like we do have to like allow people to use new tools. Otherwise we will kind of fall behind here. Well, thank you so much for taking the time to come. Give us the update.

Starting point is 02:34:57 Always good to hear from you. and we'll talk to you soon. Have a good rest of your day. Awesome. Awesome progress. We'll talk to you soon. Goodbye. Yeah, fine.

Starting point is 02:35:05 Let me tell you about Gusto, the unified platform for payroll benefits and HR built to evolve with small and medium-sized businesses. And without further ado, let's bring in our next guest. Sounds like a lightning round. Yes, this is the Lambda Lightning Round. Tell me, what's happening? Good to meet you.

Starting point is 02:35:21 You're here with us. The TVPN. Please, introduce yourself in the company. Because not only have we not heard of you, but I think you're coming out of stealth. No one's heard of you, or at least this company. No one has heard of us. I'm Dimmie Clarey.

Starting point is 02:35:34 I'm the co-founder and CEO of a company called Neon Bio. In a nutshell, what we do is we genetically engineer chickens to produce medicines inside their eggs. Wow. How did you get into this? What's your backstory? So I'm an aerospace engineer, so naturally I went into biotech. Yeah, chickens.

Starting point is 02:35:53 My co-founder is an evolutionary biologist as well. Okay. You know, I've always been involved in manufacturing of complex things. Plains are sort of one complex thing. These proteins, these medicines are also similarly complex in different ways. You know, as some of the problems facing drug pricing and sort of the onshoreing of manufacturing had come to bear over the last few years, seemed like a good place to hone my my skill set. So what do you think?

Starting point is 02:36:30 Yeah, where did the original kind of concept come from? Did it, did your, was your co-founder, you know, making an omelet, hanging out with chicken. You know, we, they're like, these chickens, they lay eggs every day. We've got to put something in them outside of. You're not far off. I mean, we all know chickens to be sort of incredible sources of edible proteins, you know, the ones that make your omelet.

Starting point is 02:36:57 Most new medicines today are complex molecules. They are proteins themselves. And so the way they're manufactured today, prior to neon bio, is, you know, it's expensive. It's sort of reliant on these complex, fragile global supply chains, and it sort of makes these drugs inaccessible to most people. But chickens happen to be the universe's best protein factory. You know, they've been honed by 250 million years of evolution to efficiently turn very simple inputs, grain and water, into complex outputs, these proteins inside their eggs. And so we harness that same system to produce, you know, some of the drugs you might see advertised on on TV like Humira or Ketruda.

Starting point is 02:37:44 How, so, I mean, how far away are you from actually doing a partnership with a biotech company, that owns intellectual property around a particular protein. It feels like there's this dance between like, you need to genetically engineer the chicken, make the chicken, get the eggs, extract the protein, actually get into the drug. That sounds like years, but then there's only, there's ticking clock on every drug that's out there

Starting point is 02:38:08 in the IP landscape. So how do you marry those two? Yeah, so one of the things we announced today really is this large commercial deal that we signed with a partner to bring up to three drugs to market. Up to three drugs. And the drugs that we're focusing on to start with are known as biosimilar. So they are drugs that have existed.

Starting point is 02:38:31 We know they work. They're on the market. They can cost in the thousands or tens of thousands per dose. That's super expensive. We are starting with those because they're known molecules. We're not taking on molecular risk there. Over time, we're developing technologies that will make this process way faster, much more efficient, increase the yields.

Starting point is 02:38:51 for now we have a very good market in the biosimilar space where there's huge demand for these drugs coupled to sort of the cost aspect, which is a sort of a big part of our value proposition is the fact that are. How many doses from an egg? Are we talking, is it a single shot or can you get potentially multiple doses? Because I'm just thinking at some point you're just scaling a facility that has chicken. Yeah, we scale by breeding chickens. That's one of the advantages here, right?

Starting point is 02:39:25 It's pretty linear, and we know how to do that to just give you a sense for scale, you know, with a few thousand birds. And to give you a sense of what that means, you know, a small farm is anything below 25,000 chickens. So with a few thousand, we can produce the global supply of a drug like Humira. So a chicken can treat, you know, depending on what the, what, what, what, what, what, what the medicine is anywhere between 10 to 100 people in a year. Wow. That is remarkable. That is insane.

Starting point is 02:39:57 Do you not have a chicken sound effect? I was just about to text the team. We need a chicken sound effect. Play the rest of the barnyard. We got the whole. Well, we'll ask, is there a plan to make horses work for us? They're goats for us, sheep. Are you staying in chickens forever or will there be other animals?

Starting point is 02:40:12 Okay. Eventually. Okay. We'll call us back. We need horses to save us from other ailments. There are actually drugs that come from horses as well. You know where my mind's gone? Partnership with Varda.

Starting point is 02:40:28 Varda, yes. Space chicken. I mean, I was thinking about that one. And you said aerospace to bio, there is an interesting overlap there. Well, thank you so much for today. Yeah. Yeah, we're having a lot of fun, but this is one of the craziest pitches. I think, I think, caffeinated capitals, I think an investor in both companies as well, right?

Starting point is 02:40:50 that's right okay Raymond Raymond loves making making drugs in difficult ways but potentially extremely valuable ways

Starting point is 02:40:58 that's very cool thank you so much for coming on thank you guys this is great we'll talk to you later let me tell you about vibe.com where DTC brands

Starting point is 02:41:07 B2B startups and AI companies advertise on streaming TV pick channels target audiences and measure sales just like on meta and without further ado our next guest

Starting point is 02:41:15 Mikey Shulman from Suno he is the co-founder and we cannot wait to talk to him about AI generated audio. Let's bring Mikey in from the Restream waiting room into the TBPL Ultradome. Mikey, good to see you again. Thank you so much for taking the time. Welcome back.

Starting point is 02:41:33 One of the most interesting, do you call yourself a NeoLab? Is that a fair characterization? Great to be back. Thanks for having me. We definitely do not think of ourselves as a Neo Lab. Okay. But you are training models. You're doing AI, but you're a

Starting point is 02:41:49 product company? Are you a consumer company? How do you think about yourself? We're a consumer company. We're an entertainment company. Consumer entertainment doesn't seem so hot right now. I'm not exactly sure why, but being entertained and fulfilled is like a basic part of being a person. And so often underlooked part of the market. Yeah, we're like the word we use here is creative entertainment. Sure. We are giving people the best, most fulfilling creative experiences of their lives. Yeah. I mean, that sounds maybe broader than music one day. Have you thought about video? Are you thinking about, I mean, I'm on Spotify. A lot of times a video will pop up alongside the music. Are you thinking about expanding or continuing to refine the music

Starting point is 02:42:37 model itself? It's a great question. I think there's a lot of reasons why this is going to work really, really well in music, least of which is we love music. This is like really the DNA of the company. But I think creative entertainment is coming everywhere. And I think about it like this, like I think even Claude Cod Code or all of its competitors are creative entertainment. I don't know how much you guys play around with it, but it's like really fun to build things. And it's really fun to use what you build. And there's a huge allegory there for music too. Sure. Yeah, yeah. That makes sense. The tinker mindset. Let's talk about progress since the last time you popped on. You guys growing revenue at all.

Starting point is 02:43:14 What metrics can you share? I had heard some rumors Yeah, so Growth has been great You know, a lot of things have compounded A lot of hard work from the team And kind of some big step changes And how people engage with the platform

Starting point is 02:43:28 So since our last model release Yeah, recently we kind of announced that we hit 2 million subscribers, 300 million million two And we're like one out And you got cut off a little bit But it's 300 million of ARR You said, right?

Starting point is 02:43:47 It's remarkable That's right. That's wild. Insane. How much of you appreciated, how much have you appreciated all the other, the labs just slugging it out while you guys just kind of stay in your niche focus and go after what clearly is a massive opportunity? But maybe stays kind of off the radar for some of these other labs long enough for you guys to just run away with it. truly, I wake up six days of the week, and I think this is great. We're the only ones really playing in consumer entertainment, and I'm really, really excited. And then the seventh day of the week, I wake up, and I said, like, we must be missing something that all these other giant companies know, you know.

Starting point is 02:44:29 But I think it's what I said before. Like, being fulfilled is a much elevated state than utility, and everybody is focused on utility because it's straightforward. But eventually, like, you need something more than that. This is like a basic part of what being a person is all about. So we love to focus on it. I love watching people slog it out in other domains where scale and compute and dollars are honestly bigger weapons than they are in music. Yeah.

Starting point is 02:45:00 Yeah, we've been, we've been, I've been enjoying Suno a lot throwing on making, making songs for the team. It's just an amazing thing to just like be joking. And in our use case, we're just like joking around about something. And I'm just like, all right, I'm going to turn it into a song. It's a lot of fun. But yeah, talk about the updates on the product side, the new voices, functionality, all that. Yeah, it's a really exciting launch. A couple hours ago, released a new model.

Starting point is 02:45:28 It's our best model yet. We'll make the best music. But I think most excitingly is really gets personal. So you can use your own voice to make music that sounds like you. And if you're not the best singer, it actually sounds like a better version of you. And so there's something beautiful about that. Autotune? Yes, yes.

Starting point is 02:45:51 And without sounding too artificially auto-tuning, go try it out. I've learned not to try to demo this for people in large groups. People don't like singing in front of their friends. So I'm not going to try that here. and then some other personalization features on the creation side about how you really kind of tailor the system to really know everything that you love. And then also really exciting is the ability to upload a bunch of tracks from off platform of your own that you can kind of inspire the model to be more like those. And we've seen some amazing things happen from everything from like musicians, film composers, producers to like uploading tracks. there and getting the model to really kind of follow their leads.

Starting point is 02:46:36 It's like an incredible way to fall in love with a particular thing that you already love. I'm super excited to play around with that, John. Yeah, is there, I'm interested in like top feature requests and what we can learn. Obviously, you don't want to spill your entire roadmap, but some of the interesting things that happened in image models where you could at a certain point, you know, take an image and basically just replace the background and it wouldn't sort of regenerate your face. And I feel like there's a, there's a lot of opportunity if artists opt in or I have music to say, okay, I want to keep the song exactly the same and just change out the lyrics to do sort of a remix.

Starting point is 02:47:19 Or keep the lyrics exactly the same and change out the style, style transfer. And I feel like all of those are maybe it's going to be more of a lift on like the business development side to figure out how to do that. But what are you excited about in terms of increasing the level of control from the creator or the user? A lot of what you said is coming soon. I think unlike other media, music has like a very rich history of basically derivatives from covers to samples to remixes to mashups. And people riffing off one another is a way to spark creativity. It is a way to keep old works alive. And so you'll see a lot of that come in the not so distant future.

Starting point is 02:48:08 Some of it's already on platform. Yeah, of course. Something people don't know is like almost a quarter of all songs made on platform are derivatives of other songs on platforms, like a lot of covers, basically. And so there's a kind of a social ecosystem around these things. What's the B2B side of the business like? We talked to a lot of AI video generation platforms, and it seems like, There's a lot of just ad creative, like ad agencies, basically, that are using the tool at volume

Starting point is 02:48:37 beyond the creativity and just the fun of making an AI video for themselves. They actually see it as a way to accelerate creative works on their ad side. And I'm wondering if you're seeing pull from ad agencies saying, hey, we need a new song for this campaign. We have some AI generated video, and we're going to partner with Suno on that. We've definitely had a lot of outreach. Honestly, it's just not a huge focus for us right now. We want to delight everyone, just regular people who love music.

Starting point is 02:49:11 And we're honestly, like, a lot of the company's DNA is not trying to do the same thing a little bit faster or a little bit easier, but actually to try to do something that is entirely new and that is changing how people entertain themselves. So there's probably a big business to build helping people make songs. for ads or jingles for companies. Maybe we can work together on a jingle as a side project. But for us, that'll be a side project.

Starting point is 02:49:38 What global superstar has embraced AI music the most? And is it meek, Mel? The most. Oh, I don't know. Because you kind of have to go on like a villain arc a little bit. Like there's, again, the last time we were here, I was telling you, somebody I know in the music industry

Starting point is 02:50:00 is like every artist is using the Suno, every artist thinks it's amazing, nobody wants to talk about it yet because they're kind of scared of the reaction from the world and the creative industry and all this stuff. And so it feels like the first one or two

Starting point is 02:50:16 people to go in a huge way will get some pushback and then over time it just is normal. I think it's slowly changing. I don't want to out anyone, but this is a quote that is a to me, but it's actually not mine. I'm not this clever of everything that you just said ascribing this is the the gLP one of music. It's like everyone's on it and no one wants to talk about it.

Starting point is 02:50:41 And I think these things just take time. So I'm not, I'm not going to, I'm not going to out anyone just yet. But it feels like things are changing. Final question from the chat. Are there deep cuts on Suno? I don't know. Deep cuts. What is? What is? Deep cut is. Yeah. Deep cut is like, deep cut is like, deeply underrated, like, from deep cuts in the vinyl. Like, everyone knows the hits. Yeah, yeah. No, I understand, but it's not, it's not for me to say, sure.

Starting point is 02:51:08 Like, what is good and not good? Like, we never want to be the arbiters of good music and bad good music. And, like, um, like, I have deep cuts of my own that you're going to hate, like, that I made. And I promise you'll hate them. I guess to quantify the question, it would be, like, do you think the listener, uh, the, the, the, the, the, the, the, the, the, the, the plays are less power law distributed than on, say, Spotify?

Starting point is 02:51:30 where Spotify probably has like Taylor Swift, Taylor Swift at the tall end that's driving a ton of consumption. Do you think that your curve of consumption is a little bit more even? For sure, for a couple of reasons. One is that the whole purpose of the platform is actually to enjoy creation. Yeah. And not necessarily to go and browse for other people's music. It's actually to get inspired to make your own music. And so we actually see people falling in love as much with their own music on platform as they do with other people's music,

Starting point is 02:51:59 which is amazing and new. So the answer is more deep cuts. It's all deep cuts. There's tons of deep cuts. Yeah, okay. But in that lens, it's all deep cuts on. I love it. I love it.

Starting point is 02:52:10 Yeah, I mean, obviously not to paint it into a corner. There's a million ways to think about this. But thank you so much for taking the time to come chat with us. Yeah, great to catch up. I'm excited to play around with the new model. Congrats on the progress. Congrats to the team. Thanks, guys.

Starting point is 02:52:21 Have a good one. Let me tell you about Figma agents. Meet the Canvas. Your AI agents can now create and modify your Figma files with design system context. It's in beta starting today. And our next guest is Ida Bardari from Devalence, the anti-surveillance company. I'm very excited to talk to you. Congrats on the viral sensation. But since it is your first time on the show, please introduce yourself in the company. Definitely. Thanks so much for having me. Hello, everyone. I'm Ida. I graduated with the

Starting point is 02:52:55 degree in physics from Harvard and now I'm building Devalence, a company that's protecting your freedom. How does it work? Great question. So basically we're building on top of existing ultrasonic jammer technology, but what we're integrating here is that we're making it a smart device, which takes in information from the nearby environment, and then targets or distortion signals into the direction of where we detect smart devices. And then simultaneously, we also have an AI algorithm that makes sure that the distortion signals that we send out use artificial tones and voices that make it hard to decode. Okay, let's take it one more step back.

Starting point is 02:53:36 What is the actual problem that people are experiencing today and may not even be aware of it? Yeah, no, I love the question. So at the beginning of 2024, we saw a huge rise in AI variables. I mean, I think everyone in the Valley probably knows about friend, about all me, all those, you know, promising technologies. the problem there becomes, well, when you have a conversation, and for example, you just forget to turn it off. A lot of confidential information and private information can be used to train AI models that you might not necessarily want to be trained on it.

Starting point is 02:54:06 And people already have this problem who deal with a lot of confidential information in their everyday professional lives, so that can be people working in jobs that deal with IP with other sensitive info. And this issue is way broader than just audio recordings, We also see this with meta raybans happening. There's a lot of unwanted recording happening there, a lot of freedom for people to just go out and do whatever they want. And simultaneously, of course, digital data collection has been a thing for a long time

Starting point is 02:54:39 and the way that it's used in recommendation algorithms, for example, is another thing. So cognitive security is also a big part of this. How do you not disable someone else's device? if you're okay with them using it. I was skiing and a friend had met a raybans and he was talking to them and it didn't, I was sort of eavesdropping on the questions he was asking. He was sending texts to friends and whatnot and he was fine with me hearing it. If I was wearing this device, wouldn't he just not be able to use his device?

Starting point is 02:55:15 In this particular case, I mean, if you don't mind, then you can just turn it off. Okay, that makes sense. So it's very easy, it's like an on-off thing for you to like genuinely be in full autonomy over it. Okay. And then what's, yeah, obviously it sounds like you launched pre-orders. Who has been buying? Is this corporations that want to make sure that they're, because you can imagine, you know, cell phone jammers exist and Faraday cages exist. Like there are ways to secure a property. Is this just privacy conscious individuals? Is this the direct consumer product mostly? So for the pre-orders, it's been mainly consumer-faced.

Starting point is 02:55:54 which means that a lot of people who have preordered it are in the range that the price point allows. But we are working to make it accessible and affordable to everyone. Because we really believe in the mission that everyone who wants autonomy, really, and agency over the data they should have it. But we also are working on a version that is for more organization-based because they usually have different requirements. So we're also working on that. Why is this?

Starting point is 02:56:21 We've got to get TJ one of these. Yeah. gift him. Our friend TJ Parker absolutely hates all the meeting, meeting recording and all these things that are just. Can you make it into a watch? That would be the killer. He's a watchman. I know.

Starting point is 02:56:36 There's a lot of cool stuff with the form factor that we're experimenting with. But are you going to be in a little bit of like an economic war here? Because $1,000 product to counteract something that costs $100. There's just a, there's a, so there's an economy here. that's sort of misaligned. I'm also interested to just hear about how on earth can a recording device cost $100 while an anti-recording device costs $1,000? I imagine that you think the price will drop over time, but what is in the device that is expensive? Yeah, there's a lot of processing that's going on because we have certain algorithms that require a lot of power

Starting point is 02:57:16 in order for it to, you know, work. So that is honestly a big component of the cost. So you need maybe even a more powerful chip than what would just be in a passive audio recorder? Yeah, I mean, passive audio recorders, they are usually not as complicated to build, right? You basically just need a mic and then you can just detect the stuff, right? But in this case, you want to, for example, you want to like find nearby devices. Then you also want to make sure that they're blocked. And then you also want to make sure that the way that you're blocking them is not just reconstructable in post-processing. So there's like three different tasks here.

Starting point is 02:57:54 that make it way more expensive, unfortunately. But we're working on it. What are the laws around this right now? I remember the backlash to Google Glass and then everyone had a phone and it just seemed like if you're out in public, people can just take pictures of you and record you. Is it legal to block someone from recording me?

Starting point is 02:58:16 I don't know anything about this. Yeah, that's a good question. In terms of recording, there's one party and two-party consent states. So in, but nobody really follows that I feel. Yeah. What's the two part? Is California two party? I believe it's two party, yes. Certainly doesn't feel like it when you walk around. No, definitely does not feel like it. Exactly. That's what I'm saying. Nobody really follows it or it's not really enforced by folks. And then regarding the blocking, so certain blocking is not

Starting point is 02:58:48 allowed. So, for example, blocking from RF jamming is not allowed because you can get in the way with emergency services, but unless you don't do that, there's certain areas in which we can work in. Okay. Yeah. Very interesting. Well, where can people find it? Where can people pre-order it if they're interested? Go on our website at steveilance.com. That's where you can find it. Otherwise, I mean, in general, we're going to be posting a bit more also about the development and process and the general vision and mission behind the company on our social media platforms. So on X, we're on B and Audible. And then my personal X account is just my name.

Starting point is 02:59:25 I need a little jammer for John's Mike. Sometimes he'll just keep talking, you know. And no, I'm kidding. Well, thank you so much for coming on. Yeah, great to be very, very cool. The chat is in a positive way saying that it feels very Harry Potter coded to have this sort of magic device that eliminates. Oh, that's a good one. That's an oddly high praise. Yeah, become invisible. It's the invisibility cloak for the modern era. Well, thanks so much. Congrats on

Starting point is 02:59:54 the progress. Thanks, I'll talk to you soon. Have a great one. Let me tell you about app loving. Profitable advertising made easy with axon.a.I. Get access to over one billion daily active users and grow your business today. And without further ado, we'll bring in Zach Cantor from Steady. Zach, how are you doing? What's going on? No audio. You look fantastic. You have many books. This lighting is fantastic and the bookshelf is fantastic. This is of course, Zach Cantor. He is the founder and CEO of Steady. How about now? Can you hear me now? How are you doing? Here we go, guys. Thanks for having me. Thanks for hopping on. I'm surprised. I feel like I've never met you in person, but I know you from the internet for so, so long. So good to finally meet. We're Twitter friends. You know, that's how I meet many of my reputable and disreputable friends. Exactly. But for those who haven't been following. following you in your journey, since it is the first appearance, please introduce yourself in the company.

Starting point is 03:00:47 Sure. I'm Zach Cantor. I'm the founder and CEO of Steady. That's spelled STEDI. We're a healthcare clearinghouse. So if you're not familiar with the world of healthcare, you know, we exchange the administrative transactions that power all of health care. You probably heard stats like this before that healthcare is 18% of US GDP, so it's a pretty

Starting point is 03:01:08 meaningful chunk of the ecosystem. But you know, you go into your doctor's office. ask you for your driver's license and your insurance card. And then they tell your co-pays $20 and you have three visits left and all those details. That's a transaction called a real-time eligibility check that happens under the hood. We process those. We process tens and tens of millions of those per month. And then when you finish the encounter, whether it's a surgery or a, you know, teeth cleaning, whatever it might be, they have to send a claim. There's a series of messages that come back. So it's an adjudication message that comes back, saying the claim is

Starting point is 03:01:43 rejected or accepted, and then the claim gets paid somehow. You know, you get those things in the mail that say, this is not a bill, explanation of benefits. Your doctor gets one of those as well. They can get them via paper, but they can also get them electronically. And basically, we process all these transactions back and forth. And why can't a registered nurse just vibe code a system to do this for them? I'm just kidding.

Starting point is 03:02:05 Well, it's funny question. Like, you know, it's interesting. So we primarily, you know, we think about our business as selling to other technology companies. Sure. It's like the stripe of health care. Yeah. The, but we've seen a surprising number of, of these small and medium-sized doctors and

Starting point is 03:02:21 dentists offices that are, that are signing up. And so we recently did an analysis and spoke with a bunch of these places. And it turns out that indeed, doctors are vibe coding. No way. Revenue cycle management systems. So, you know, it's not thousands of them, but it's dozens of them. It has happened. That's amazing.

Starting point is 03:02:37 That's very cool. Yeah. What have been the key milestones for the business? You're raising new money today. Your name is steady. John was saying how he's known you forever from the internet. I feel the same way. Just steadily chugging along.

Starting point is 03:02:53 But yeah, what is this milestone represent? What did it take to get here? Healthcare, every healthcare founder will tell you that obviously this big massive market, but it doesn't move as fast. And it can take years to make progress. that another industry might happen in a quarter or something like that. Yeah, it's interesting. So, you know, we didn't start in healthcare.

Starting point is 03:03:20 I don't come from a healthcare background. I previously started a brand of auto parts. So I manufactured auto parts in Taiwan and China. And, you know, follow the typical auto parts to healthcare pipeline, as many of the owners do. And in building that business, you know, I sold to O'Reilly Auto Parts in Amazon and these different retailers. And I had to, at some point, it was probably in like 2011, the transaction. volume got such that it wasn't feasible to have these things manually entered anymore, so before AI.

Starting point is 03:03:47 And so I reached out to all the different retailers that I was selling to and asked them to send me the API spec for their purchase order so I can automate the transactions. And, you know, over the next two weeks, they all wrote back and they said, what's an API? And so, you know, things got a little bit better since then. But what I found out at that point was that this whole world of retail, logistics, supply chain, transportation, et cetera, manufacturing is powered by a technology called X-12 EDI. And so if you see Steadies spelled S-D-E-D-I, it's because we started with this underlying EDI technology. And, you know, long story short, maybe long story long here, I got so frustrated

Starting point is 03:04:26 with the various EDI systems that were out there, said, like, look, what I want to do is I want to receive purchase orders in. I want to get them into NetSuite. I want to have those automatically sent to a warehouse. I want the warehouse to ship the order. I want the transaction to come back. I want when things come in via flex port, I want those things to, you know, get automatically push it into my system. This can't be that hard, kind of famous last words. And I was like, I got so sick of the solutions that were out there that I ended up having my own system built.

Starting point is 03:04:50 And then, you know, I ultimately sold the auto parts business to a private equity firm and I started to study. And, you know, I spent like 50 grand on, which first, you know, I was a bootstrap business, so spending 50 grand, a lot of money. 50 grand on building this homegrown platform. And I was like, you know, it's going to cost like 10 times as much to do this for everybody for all transactions. I was like, but to be safe, you know, there's margin of safety. I'll raise a million dollars instead of 500K.

Starting point is 03:05:17 And, you know, now we've raised $142 million total. And I think we, you know, still have more. It's gone time. It's gone time. What's your favorite car? Favorite car. You know, it's funny. Like I grew up, you look at, you know, the Porsche 9-11.

Starting point is 03:05:39 you say like that's like a car that old guys who don't know anything about cars buy. And then you go and you drive one. And it actually turns out that 9-11, you know, 60, 70 years of iterative design is pretty good. Yeah. What kind of auto parts were you selling? I'm in the market to pick up a straight pipe exhaust system.

Starting point is 03:05:57 I was a birthday present for Jordy. I'm hoping to give him some LED underlighting as well, maybe stance his car. Were you doing anything like that? I can hook you up. You can help. We're going to. That's fantastic.

Starting point is 03:06:08 It's going to be like, It's going to be like, you know, TBPN, P.M.R. Right edition. Yes. Yes. That's what I'm looking for. I want a horse. You like horses. We put a horse in your car. We put a gong in the passenger seat. You can't transport anyone, but it looks good. John has been trying to get me to go the Mansori route for years and he will be doing it until he, until you got to do it. Until you do it. Until you do it with the full sponsored livery wrap. car. You guys hiring, I'm assuming? Yeah. Oh, yeah. Engineers. Talk a little bit about the company culture.

Starting point is 03:06:44 Where are you based? Are you in person, remote? Like, what's the scale of the company right now? So we're about 125 people. We're distributed. We have a bunch of people in New York, but we've got people all over the place. I live in the Bay Area.

Starting point is 03:06:57 And look, I think, you know, with the talent wars, you know, look, there's obvious pros to being in person. At the same time, you're kind of making the implicit decision that you're going to exclude 99% of your potential hiring pool and saying we're not going to be able to hire those people. And for us, we think the tradeoff's worth it. So we're, yeah, we're all over the place.

Starting point is 03:07:16 That's amazing. Awesome. Well, so great to finally meet. Yeah, great to finally meet. Amazing progress. Yeah. Thanks so much. Thanks, guys.

Starting point is 03:07:22 Thanks for me on the show. We'll talk to you soon. Cheers. Have a good one. Let me tell you about fin.a.i agent for customer service. If you want AI to handle your customer support, go to fin. com. And let me also tell you about Shopify.

Starting point is 03:07:33 Shopify is the commerce platform that grows with your business and lets you sell in seconds online in store on mobile on social on marketplaces and now with AI agents and without further ado we're going back to back to back there he is oh we got Nick I thought we're having Zach great I was excited to go back to back Zach to Zach this plaid on plaid this is a beautiful background this is a beautiful outfit introduce yourself at plaid tell us how it's going this is where I'm living now it's good to see you guys good to see you too dude how you doing just let's just start with a gong start with a gong hit I don't want to wait I don't want to wait the anticipations

Starting point is 03:08:07 It was too high for the last one. Congratulations. You know how long I've dreamed at that moment. Oh, thank you. I take a big photo for my mom. Let's do. Got it. Fantastic.

Starting point is 03:08:18 Very fun. You can, of course, screenshot it. Yeah. But it's cooler. It's cooler. Later, you'll be able to screenshot yourself taking a picture, which is, and then say, look, Mom, I took this screenshot of me taking a picture for you. Give us some background.

Starting point is 03:08:34 Tell us the story of how you wound up in this particular. situation, just take us through it. Well, I'm excited to talk to you all about it because as pioneers of new media, I feel like you'll understand this more than most people. But, you know, we've been building this week in Fintech as what started as a Fintech newsletter and turned into more of a Fintech media company over the last six and a half years. And the Plaid team approached us about five months ago.

Starting point is 03:09:01 And I thought we were going to talk about a partnership. So I came in there ready to sell sponsorship. They're ready to sell a media deal. And they said, actually, you know, we've been thinking a lot about how we can improve the conversation around fintech. And we want to partner with you guys. And what that means is we want to acquire the business. And they won. They have negotiated me.

Starting point is 03:09:20 But here I am. Amazing. So what do you think stays the same? What do you think changes? Are you going to be working in their office? How does all this fit together? Yeah. I went and did a little office tour this morning and I got a badge.

Starting point is 03:09:33 So they haven't given me my gun yet, but they don't. did give me my badge. And so after six and a half years working out of a home office, just seeing another person and that having a conversation in an office was a transformative experience for me. Yeah. We are going to keep things mostly the same from now. And then we'll just keep adjusting as we go. I think probably the best comp for what we're looking to build is something similar to Bloomberg

Starting point is 03:09:55 with Bloomberg Business Week. Oh, sure. Or these are two really complementary properties. There's obviously a parent company. They share a name. But you can be a Bloomberg software customer without reading Business Week and vice versa. Yeah, that makes sense. What is the state of fintech?

Starting point is 03:10:10 What are you, I mean, you know, you've been six and a half years. You've seen the boom, the momentary bust, the comeback. During that time, there's been so many companies that have, you know, thrive throughout the entire period, even as the market was in turmoil overall. But what are you most excited about today? Well, I assume most of the half a billion TBPN watchers know Jordan's background, but Jordy's an exited FinTech founder who built party around in Capital. And so you also had a front row seat to kind of the change in the fintech ecosystem over that period.

Starting point is 03:10:53 Today, what I've noticed is you had this spike in fintech enthusiasm and funding in the venture community in 2021. A lot of companies got out over their skis because of capital. availability and I think there were sloppy decisions made. And a lot of them took tough medicine. Some of them didn't make it past the downturn in liquidity for fintech startups. But a lot of them said, look, we're going to build real businesses now. We're going to take the tough medicine and we're going to come out the other side stronger. And so if you look at the top right corner and see ramp, like that's a great example of a company that has been around for a long time, said, hey, we grew too quickly, downsize. And now they're better for it and are just kind of crushing

Starting point is 03:11:32 and shipping on a weekly cadence and, you know, really redefining this entire category. And so what we're seeing today is you have fintech companies. We've been talking about this for a long time. You have fintech companies that are actually taking market share from incumbents. I know fintech companies have wanted to say, hey, like, we're the challenges, but we're going to be, you know, the dominant providers of financial services one day. But now that's actually happening. And so, you know, thinking about this with my plaid hat on.

Starting point is 03:11:59 So much merch. I love how you brought you. You just came with the same, the same, you came prepared. Yeah. You understood the assignment, the same entertainment level as we bring. Put on your steel man, John. We noticed that, you know, the tech media conversation hasn't really caught up to how well some of these fintech companies you're doing. And it's tough.

Starting point is 03:12:27 Technology media is really stretched. And I think there are a lot of different. areas like AI, like crypto, that, you know, command a lot of attention. And so you have really well-run companies like Ramp that are doing generally interesting stuff and shipping at this crazy rate, but nobody's covering them other than TBPN. And so we're looking to really bring that kind even we're not, we're not covering it on a level where if you're a fintech industry insider or builder, you're actually getting alpha from our fintech coverage. And alpha comes into like, okay, what does infrastructure look like? What kind of, what, what bank partners are evolving with

Starting point is 03:13:07 the needs of these companies? Like, you know, you guys are going like 10, 10 layers deeper and have been for for so long. I think it's, it's, it's super important. Yeah. Last question for me. What, what media formats, where, like, how would you describe where you are now and then what excites you? Because, you know, obviously the, the newsletter list is over 200,000. subscribers, congratulations. Massive. How many newsletters do you want to send a year? Do you want that to increase? Do you want to do more events, video, interviews, audio? What's interesting to sort of like zoom out and think about the next couple years? Yeah, you know, our DNA has always been the community initiative. And so events are a big part

Starting point is 03:13:53 of what we do. International is a big part of what we do because there's so much interesting innovation happening. You know, American tech companies will go on stage, conferences in Mexico City and in, you know, Lagos, Nigeria and talk about what they're doing. But then they actually start talking to people who are operators in Lagos and Mexico City. And like the level of innovation there is often, you know, more advanced in FinTech than you'll see in the U.S. because these are areas that don't have the same level of financial services. And so you actually have to build a lot more there. And that's been a big part of our DNA too.

Starting point is 03:14:23 And so I think it's really doubled down the community focus, really deep, thoughtful writing and continuing to grow the pie, not just here, but internationally as well. That's awesome. Well, congratulations. Amazing. Thank you so much for taking the time. Match made in heaven. A true match between the background and the church. Truly.

Starting point is 03:14:44 It's fantastic. Come in person next time. It's great to finally have you on the show. We'll catch up soon. Have a good one. We'll talk to you soon. Goodbye. And up next, we have the co-founder and CEO plan.

Starting point is 03:14:55 Zach Bray in the stream waiting room. Let's bring him into the TV can Elfridl. Zach, how you doing? Very well. Thank you for having me. When did you first meet Nick? That's a great question. I think it was at a Monday, 2020.

Starting point is 03:15:09 I think it was maybe like six years ago, or something like that. It's been a long time, and we've long admired what Nick and team have built. Look, I feel so honored to get to work with them in this new way, and it's been pretty amazing to watch them go over the last few years. Yeah, yeah.

Starting point is 03:15:27 Talk about your experience as CEO at an event? What makes for a good event that you will say yes to attending, appearing at, etc? Like, what's the secret sauce? You're like, okay, that clicks into place and I'm going to say yes to that because I'm sure you get invites every day. Yeah, I think, oh man, this is a difficult one because my default answer is no. I have the conversation frequently of no new things. Yeah, there's a lot of stuff. I think it all comes down to who's there in the size of the event. Small things where I can meet people that are really high value are super interesting. And, you know, things that have content in an angle that's not covered all

Starting point is 03:16:10 the time in the same way are valuable. So I don't say yes to a lot of things, which feels fortunate. Also, I really like working. So it's hard to get up from. We're the same way. What outside of this this acquisition, what's on your mind this week? What's the business focused on? What are you focused on personally? Well, first, I don't want to skip over this week of PIN check. I mean, big deal

Starting point is 03:16:39 for us. We've been really excited to push this conversation forward over the past many weeks. We're excited to now finally have Nick and co as a part of the team. And the future together, I think, it's going to be super fun. Aside from that,

Starting point is 03:16:54 big focus is AIFI, everything. So you might have seen we did a launch of perplexity. This was, I think, a week and a half ago or so, where we can power the finance tab of the perplexity application. And it allows you to do things like see your stock portfolio in real time, get an update in the morning to understand, you know, what stocks you might want to trade in a given day, lots more that we're going to do with them to bring in more financial data into perplexity.

Starting point is 03:17:21 And I think this is the first step in a lot of consumer-facing AI experiences. So that's going to be one for us internally. Yeah, that's very cool. I mean, you think about people are using, they're going to AI tools for intelligence to help them understand the world, but then they lack all of the, you know, maybe you've put something into the context

Starting point is 03:17:45 or maybe that has some memory, but it's lacking like that real, time data on you individually and money being at the core of everyone's life just means that it's like very, very important for it to be in there. So that's very cool. Yeah, what is integration with AI tools look like?

Starting point is 03:18:03 How is it changing? Obviously, you're known for the API, which has had years and years of development. There's MCP now. There's skill.mD files. There's all these different ways to interact. The agents can obviously use APIs and write their own API integrations. Where do you see that going? Are there any changes that you need to make or you're in,

Starting point is 03:18:25 flight already making? Yeah. So, sure mystery is the core of Plaid doesn't change all that much, right? Yeah. We are a pipe to make accounts. We're then a data store on top

Starting point is 03:18:37 of that and then analytics that sit on top of that. So like that, that chain doesn't change all that much. But the entry point to that change does change a lot. So like we're doing a lot of work internally to say, how do we build like a one shot vibe coder like get started with a thing?

Starting point is 03:18:53 Yeah. So, you know, you can go home. and build your own personal financial management out. Now, you guys are nerds. You might do that. Most of the world is not quite as nerdy. I was literally just thinking about that. I was like, okay, so I'm going to go and tell Codex

Starting point is 03:19:08 to write a plat integration, pull all my bank accounts together, tell me exactly how much money I spent on everything, recategize it, using all the LAMs, basically like, rebuilding it for myself. And I'm like, maybe there's a tool for this, I don't know, but it would be more fun to build, so tinker mindset. You should probably just use perplexity or many of the other wonderful plot house

Starting point is 03:19:26 that are out there. I will say I have spent more hours than I would care to share building the totally most souped up personal financial management tool. Six monitors. Situation monitor.

Starting point is 03:19:43 Yeah. Not six, but you don't see this room. There are many. This app is like the perfect thing for me and my wife. It's like it has everything. I can like chat with like our legal docs from like purchasing a house and stuff like all sorts of stuff. Anyway, so some people are doing that and we would like to make it really easy for those people to do it.

Starting point is 03:20:02 I think we saw like in like two months, I think we saw like 200% increase in the number of like hobbyist developers that are building stuff on. Yeah. Yeah. Don't quote me on that stuff. I guess I'm on public TV now. But this is a number of going out. I'm just going to turn this into an article for sure. No.

Starting point is 03:20:21 We'll comment on a lot of it. But I was about to ask you like, yes, you are. actually seeing some sort of material increase in the number of like small indie developers, vibe coders, hackers, individuals. It's not just, you know, I'm sure there's a lot of excitement from the enterprise to deeper their integrations, but you are seeing your groundswell at the individual level, which is fascinating. It's that, yeah, so that's really big for a larger enterprises. They're like, how do I automate all of the support stuff and stuff with Cloud too, like support tools for them? And then, like, there's a lot of, a lot of consumers have questions

Starting point is 03:20:53 about like what data is going where. And so we're thinking about like, how can we smartly build intelligent permissions on top of the data permission so that, you know, as a consumer, you know, you might not want to link your Cal sheet spending, but you might want to be able to analyze your stocks.

Starting point is 03:21:09 Sure. Like, how do we create tools for that kind of thing? Yeah. Are you seeing, like, I guess the question is like, where are you seeing benefits when the frontier advances? Like, people are, you know, currently excited about GPD 5.4 or Gemini 3.1. And they see a model and they're like,

Starting point is 03:21:27 okay, this new release does this new benchmark better or it has a better smell or it feels better in this particular area. But as a business owner and business leader, you might have a system that's using an LLM or an API and it's already at 100%. And so are there systems that you're not upgrading and then there's some systems that you want to keep on the frontier like chat or,

Starting point is 03:21:52 I don't know, going around and doing fraud detection. Like, where are you hitting the newest, most expensive model button versus, okay, the system that we build is actually rock solid and, like, we're good there? Yeah. So there's a lot of layers of a stack, and it kind of varies based on the layer. So for coding, like, I want our engineers to be using cutting edge, possible, everything. Yeah. In almost all situations.

Starting point is 03:22:21 Now, at some point, we will get into like cost optimization and cost management. We're not in the face right now. We're going to get the best possible thing and go as fast as you can. Within the products, we don't want to actually upgrade our models too quickly. For example, like we've built a lot of stuff to improve transaction categorization. If transaction categorization changes quickly, our customers notice and they're like, oh, well, I built like, you know, you might say something's a restaurant and I want to say it's a food purchase. okay, great. But if you change it all the time,

Starting point is 03:22:52 that I'm not going to be able to map restaurant to food purchase as quickly as possible. So it's like different names for the same category. Those changes are hard. Where it flows into our anti-fraud models and like eventually into our credit models, you know, we don't want to be changing the models too quickly because we have to do a lot of back testing every time we make an upgrade. But then anything that's like, you know, customer facing like our improved support experience, so on and so forth, like there we can be quite iterative.

Starting point is 03:23:19 and oftentimes we're not using the cutting edge, we're maybe using a turn or two back because the value, it doesn't make any better responses, but the cost is not. There's so many different choices that we're making on this stuff. It's honestly really fun.

Starting point is 03:23:32 Yeah, it seems like it really... What is your thesis on how agents will use money? Because there's a number of companies that have sprung up, and their incentive is to tell you that agents will exclusively use stable coins and generate their own effectively like generate their own real-time payment rails on the fly because they

Starting point is 03:23:54 don't want to deal with fees. And I think we've generally, John and I have been pretty like neutral on this. Like we can imagine a scenario where an agent would use stable coins, but we can also imagine a scenario where an agent like hires a human to be a bad man and carry cash from one place to another. That's another possibility. That's another possibility. Or just use the existing existing rails that I, if an agent's acting on my behalf, maybe they use the existing, you know, set of financial products that I already use. Yeah. I mean, for as far as I can see, which in this environment is maybe a year or something like that, I think like agents using credit cards is going to be like the, but by far the primary thing that happens. The reason for that is the merchants accept credit cards, right? Merchants don't accept stable points for the most part for most of the things that the consumer wants to do.

Starting point is 03:24:42 Now, over time, certain types of merchants might start to accept incentives. Staplecoins, like certain terms of payments might move in that direction. The question is, like, will the companies that care about making credit cards really easy be able to make them sufficiently easy in the amount of time that, you know, the merchants actually start to shift to think about accepting stable coins? And my hunch is, like, you've seen, I think, I think, like, Ramp actually launched an agenda credit card, like one of our customers, Privacy.com. They have an agenda credit card.

Starting point is 03:25:11 I know there's a bunch of other agenda credit cards that are out there. And I can't, like, imagine that there will not be 5,000 YC companies that are launching Agentic-Focus credit cards soon. So, like, I think we will see more and more options pop up. But it's not to say I'm not a believer in stable coins. I think it'd be super cool. But I just don't think it's realistic in a short time frame. Yeah.

Starting point is 03:25:32 Yeah, that makes sense. What about what is your timeline or prediction around big institutional banks natively supporting stable coins? Like is there is there a point where like the default Chase account you want to make a payment and you have the option of you know a Zell, a wire or a stable coin payment? Or is that not coming ever or you know, what's your general read? I think it's probably coming. I don't know that it's coming fast. And I think there's like a lot of reasons for them to want to be slow.

Starting point is 03:26:11 but I certainly think some of that is coming. I think wires not working on weekends. One is actually structurally not true. There are many ways to create the effect that a wire has moved on weekend. So if a bank wanted to do that, they could do that. But ultimately, like, it is a thing that bothers enough people that some people will want to move money on weekends and we're going to have to give them ways to do that.

Starting point is 03:26:34 So stablepoint seem to be the most optimal way to do that, even though you can change the existing system. You wonder where that, where that maybe maybe there's not enough consumers that are even asking right now to be honest but it might actually come from industry first where like car dealerships

Starting point is 03:26:51 are like hey like we really want better ways to I just found a bit of a potential competitor for you you might need to watch out for in like the agentic future I went to brinks.com and there you can move money via a armored car

Starting point is 03:27:08 and the roads are open on the weekend so you can move a lot of cash you might want to watch out Zach you start a tool in the business plan because you're going to have to deal with uh hey codex dispatch the bring drop don't make mistakes this is going to happen you got to watch out you got to stay sharp uh what's on what's on what else is on the roadmap uh for plod this year that you can talk about now uh we've got effects coming up so effects is our our annual conference that'll happen uh here in a couple months, it's going to be awesome, super fun. Nick, we haven't figured out

Starting point is 03:27:42 what we're going to do together. I was thinking he could fit really well into that too. MC. Great. Exactly. If you guys want to come visit, we'd love to have you. But, yeah, so this is going to be a big one. We've got a bunch of launches lined up for that.

Starting point is 03:27:57 You know, I can't spill the beams on all of them, but there are going to be a lot of AI-related things, as you might imagine. And then, look, it's been a really fun year so far. I think just like even for me as a leader retooling the company to think about like how do we want to operate differently. If the average size of an engineering product and design pod was eight people, now it's four people. Like how can we parallelize things? So like honestly just as a leader, it's really fun right now to get to retool an entire organization around, you know, an improved shipping velocity. Yeah.

Starting point is 03:28:27 So yeah, I'm nerging out with it. That's great. I love it. I love it. Well, congratulations on the progress. Congratulations on the acquisition. And we'll talk to you soon. Have a great to see.

Starting point is 03:28:36 Yeah. Goodbye. The Daily Beast got a little bit of a scoop. Here's how they phrased it. They said the 75-year-old Disney executive who stepped down as CEO just last week has been busted for leading a secret double life on social media under a different name. And Taylor Lorenz is on a tear. She says, Bob Eiger had a private IG account for IRL friends and family where he shared kayaking photos with his wife. and this is how the Daily Beast framed it.

Starting point is 03:29:08 That is an absolutely deranged way. It's like, yeah, I guess he had a Finsta. He had a fake Instagram account where he would, you know, connect with friends. Not an uncommon tactic for someone who's probably the most scrutinized and watched public figure potentially in the business world.

Starting point is 03:29:25 Everyone wants to track and read into what is Bob Eiger doing. Is he, you know, is he in the office? Is he in Orlando? Is he at Disneyland? There's a lot of reasons why people, would want to report on everything that he does and he probably doesn't want to share all that. So he had to do the fake Instagram, the alternate, the private Instagram for friends.

Starting point is 03:29:44 We have a good place to end it. Please. John Palmer's wife's company was more innovative than TBPN and past company. Honestly fair. What is row seven? We got beat. Ro seven makes seeds. Seeds?

Starting point is 03:30:00 A vegetable company dedicated to deliciousness. This is more innovative. It is. They're inventing. vegetables. Returning. We reinvented business television. Well, it ain't over till it's over.

Starting point is 03:30:12 So stay vigilant row seven. Because we're coming for you. We're coming for you. It's personal now. It's personal now. We're not stopping until we get to number 41. Let's make it happen. Thank you for watching.

Starting point is 03:30:25 Thank you for watching today. Apple Podcast and Spotify. Sign up for a newsletter, tbp.com. And we'll see you tomorrow at 11 a.m. Pacific. See you tomorrow. Goodbye.

TBPN - Arm Pumps CPUs, Social Media Addiction, Data Center Ban | Eric Goldman, Nima Jalali, Jon McNeill, Karri Saarinen, Dimi Kellari, Mikey Shulman, Aida Baradari, Zack Kanter, Nik Milanović, Zach Perret

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.