TBPN - Chad Byers, Car Dealership Guy, Scott Wu, Soren Monroe, Joe Weisenthal, PepsiCo, Fooling Tesla FSD

Episode Date: March 19, 2025

TBPN.com is made possible by:Ramp - https://ramp.comEight Sleep - https://eightsleep.com/tbpnWander - https://wander.com/tbpnPublic - https://public.comAdQuick - https://adquick.comBezel - https://getbezel.comPolymarket - https://polymarket.comFollow TBPN: https://TBPN.comhttps://x.com/tbpnhttps://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235https://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV(00:00) - Why was John in DC? (34:26) - Fooling Tesla FSD (48:12) - The Solana Ad (59:59) - Soren Monroe (01:13:50) - Joe Weisenthal (01:42:28) - Scott Wu (02:14:30) - Car Dealership Guy (02:42:29) - Chad Byers

You're watching TBPN. It is Tuesday, March 18, 2025. We are live from the Temple of Technology, the Fortress of Finance, the Capital of Capital. This show starts now. We got a great show for you guys today, folks. And we're kicking up some listening to Q&A. I'm feeling pretty bad. I was on a flight for 12 out of the last 24 hours back.

And you were bummed because you didn't get any paparazzi shots. No, right? There was nobody. There was no one taking pictures. me. Yeah. I saw. Well, that you know up.

Yeah, that I know of. I saw some, some paparazzi shots hit the timeline, but not a me. I want to see a video leak from a, from a Delta, you know,

coast to coast flight where you're arguing about how could you not have Dom Perri on a flight? Just, just berating. Yeah. And then you get,

then you get exposed for not flying private. Oh, yeah. Yeah. It just destroys my entire career. Yeah. Just get laughed out of. the podcasting world. Hopefully it never happens. Well, we actually got some questions from viewers.

One of them was, what was John doing in Washington, D.C. yesterday? And I just want to address, you know, people have been saying, like, oh, maybe John's, like, a political power player or, like, a kingmaker. Many people have been saying that. He's, like, pulling the strings behind the scenes. And I just want to categorically deny those accusations. There's no evidence for that, and it's not true. The accusations have been very widespread. Yes. And seem to have a bunch of, you know, independent sources that have all been sort of saying the same thing in different ways.

Yeah, Teddy Schleffer at the New York Times has been sniffing around. Julia Black has been sniffing around at the information. But it's not true. I wasn't in D.C. pulling strings, although I was doing some lobbying.

Specifically, I mean, we've been podcasting for, you know, a couple months now. It's been going really well. But recently, I've been getting very, very worried and very scared. about the situation with podcasting, mainly about, you know, what happens if the power that accrues to podcasters just keeps accruing exponentially. Could we be in some sort of like podcasting doom scenario?

Yep. And I think we need the government to step in and regulate and create kind of a government sanction monopoly for podcasters. Yeah, that's right. You know, normally I'm a free market guy. You're normally against regulatory caption. Totally. Specifically in AI. A lot of the AI safety stuff was kind of overblown.

But podcasting is different. I mean, it's right access to your brain's neurons. It's so important. And so I was there on Capitol Hill calling for action saying, regulate us. Make sure that, you know, you need a government sanctioned license to have an RSS fee. It should cost, yeah, it should probably cost $5 million a year to have an RSS feed. Exactly.

You know, like really bring in. Yeah. And you should have a stamp. approval from a government organization like the FDA. They should look at your content and say, yes, this is not slop. This passes the bar. This is good for America and humanity. And that would stop a lot of people from, you know, doing these sort of part-time podcasts.

Exactly. We would get rid of all that, which would be great. And then also I've been very, very worried about, you know, just losing our domestic edge in podcasting in America. So I was also calling for a 10,000 percent tariff on international podcast. Exactly. If it's not made in America, it just doesn't make sense. We're non-ironically seeing this in the app store right now. A lot of the top entertainment apps are sort of sloped content from overseas.

And we need to put 10,000 percent tariffs on those as well as all foreign podcasts. I agree. We simultaneously need to protect the American podcast industry. 100%. Yet also protect consumers from the long-term potential damage. damage of, you know, certain, certain podcasters with unsavory content. Exactly. You know, getting out of control.

Yeah, yeah. It might have some short-term pain, but I think in the long-term America will be better off with a, with a podcast policy that's focused on America, putting America first. Who would be, and it's possible that David Sacks could also expand into being the podcast, czar. That would be great. The only challenge is he's historically been against monetization. which could handicap the industry.

Oh, well. Well, if you're planning a trip to D.C., it is beautiful right now. You should book a place on wander. Find your happy place. Find your happy place. Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, 24-7 concierge service. It's a vacation home but better folks.

And, yeah, I mean, D.C.'s, it's a beautiful city. And one of my favorite memories as a kid was going with my family and seeing all the different museums. It's a fantastic place. It's overlooked, I think, because people say, oh, I got to go to France. I got to go to Spain. I got to go to Japan.

We got it all right here, folks. Stay in America. Go to D.C. The national mall. Visit the Smithsonian. And potentially, we might be selling off some of these Smithsonian assets. Yeah. It was part of Doge.

It would be great. The take private of the Smithsonian is going to be great. So the take private of the national. You know, other countries are nationalizing their energy industries and sort of computing. We need to nationalize our relics. Yeah, yeah, yeah. Or denational commercial. Commercialize.

Privatize them. Yeah. Yeah. And there's going to be a huge, much like in Soviet Russia, you know, as all these sort of state-owned assets were privatized. You know, it's going to be a huge wealth creation event for the American oligarchs that can sort of take these treasured assets private. Exactly. And those are the future LPs of, you know, many venture capital. funds.

Yeah. Moon rocks, dinosaur bones, all of these things are up for sale in a more officially run government. Truly the Smithsonian

is, uh, the national air and space museum is like a core memory for me as a child because I just loved planes so much and, uh, was an avid, uh, flight simulator,

you know, and so to be able to go around and walk around and sit in the, sit in the cockpit. Yeah. And now you'd pretend. be able to own a piece of that if you bought part of the private equity firm. Fractionalize it. That took it private.

Yeah. Or say we're going to fractionalize each asset. I love that. I love where you're going with that. This is good. Add some leverage into the mix. This is perfect. This is more American than stuffing it all the way in a dusty Smithsonian Museum.

Let's leverage these assets up. The Smithsonian economy. Yeah. We need a market map. Exactly. Exactly. Anyway. Somewhere out there, somewhere out there's somebody listening to the show for the first time.

You're just like, what is going on? What are they talking about? We lost that. We lost them, but for the rest of you, we'll move on to something a little bit more practical. We got a call from a listener, a question from a listener. They say they currently work at one of the most profitable podcasts in the world. They're commuting in, and they need a car. And so they were deciding between a Tesla Model 3 or a Toyota Camry.

Yeah. And we were talking about this off mic. We were kind of recommending like, I mean, both those are great cars. Model 3 is great self-driving, which we're going to get into. later with the Mark Robber scandal, Toyota Camry, also very reliable, very affordable. Not going to lose a lot of money on that. But there is another way. Yeah, we were looking for deep value, looking for something where you could stand out,

really impress your potentially two bosses at this podcast that you work at. And our recommendation was go and get a Dodge Hellcat. Yeah, and you know where you should get it? Yeah, where? You know, some of the people are always saying, okay, what marketplaces can you get, you know, sort of the best bang for your buck with cars, right? because if you look on... Like cars and bids or bring a trailer.

Yeah, if you look on like DuPont registry, prices are typically high, they're more collector cars often. But if you go on Facebook marketplace and you just search for the term IYKYK. If you know you know. If you know, you know, you can find cars that usually aren't photographed super well.

They look like they're kind of like hidden away in some type of, you know, parking garage or something like that. It's a little bit of like a Tilean secret, like contrarian. thing is that a lot of people say, oh, you need the title. But really, to drive a car, you just need the keys. Yeah, they're usually priced 80% lower than market. Yeah, yeah.

And the one downside is that they don't typically come with a title. Yeah. And, uh, but for the, for the potential savings. But if you have a Dodge Hellcat, do you even need a title? I always say when you're committing to work, like your, your tire should be breaking loose at least like three times. Yeah. Yeah. But anyways, I think people are, you know, you could go out and get a model. Model Y long range for 50K on from the Tesla dealership.

Yep. You could go and get a McLaren. Yep. For 50K, you might have to pay cash and bring it in a duffel bag. You might not get a title. Yep. But who needs the title anyway?

As long as the wheels aren't falling off. Exactly. You're going to be in a pretty good spot. And so yeah, just go on Facebook marketplace, search if you know, you know, find it exotic.

and worry about the title later. I would say stick with your Dodge Charger. You want to search for blacked out. You want illegal tint on the front window. Yep. On the front windshield, for sure, for sure. Because you want to make a statement. If you're new in an organization, you're coming in

and you're trying to let people know where you stand in the organization. Yeah, there's actually... We hear the screaming engine of that health engine. There's actually an entire Facebook marketplace apparently called no title card if you know you know it has 44,000 members and I don't know what they're talking about but as long as the cars are in good condition yeah and uh you know it seems like seems like some potential opportunity there let us know in the comments if we're missing anything on this but seems like some great some great value for sure uh anyway if you we're going to be having

uh the car dealership guy today uh on the show later today. We can ask him. And we'll ask him what this is all about. Yeah. But he's going to be breaking down, you know, kind of what's happening today in the automotive industry. Fantastic. You know, and broadly how they're applying, you know, everything from from AI to fintech and a lot more. Cool. Well, if you are looking for something that is authenticated and does come with proper paperwork, Maybe you should get a luxury watch from Bezell. They have over 23,500 luxury watches, fully authenticated in-house by Bezell's team of experts.

Go to getbezzle.com and check something out. There's a bunch of fantastic options. And you know who's got to get on Bezell soon? The Wiz founders, because they just cashed out to the tune of $32 billion. 64x annualized, 32x projected 2025 revenue. They sold to Google. What was the purchase price? Daytonas.

I think it's probably I'm going to run the numbers really quick. Hundreds of thousands of Daytonas, something like that. It's a lot. I'm going to run the numbers. Wiz was founded in 2020. It's roughly one point,

young company. 1.5 million Daytona's. Okay. 1.5 million Daytonas. So it'd be hard to imagine, you know, the entire, you know,

maybe there's some stock considerations too, but definitely in the millions of Daytona's. That's great. That's a great outcome for them. So Google, acquired WIS and WIS was founded in 2020 in markets itself as a seamless cloud cloud security platform. Is this a smart move? Says Wasteland Capital. Google is a distant number three in cloud with 12% share. I don't know exactly how distant that is from AWS and Azure. I'm sure it's like far,

but not that bad. Google Cloud's pretty good. And in fact, they were they were supply constraint, right? This last year when we looked into their CAPEX. Everybody loves to say, oh, we're a supply. Yeah. And it needs to differentiate itself with unique USBs. So Google is a clear number three. AWS. This is as of Q4, 2024. 30% market share for AWS, 21% for Azure, 12% for Google Cloud.

And then Salesforce. That's not exactly a power law distribution. Salesforce has 2%. Oracle has 3%. Yeah. Alibaba is up there number four. Okay. In that context, this is a strategic,

very solid move. It gets a new standalone product that it can sell to anyone and also probably offer faster, cheaper, and better plug-in-play integration for its own cloud customers. Security is a preeminent importance and hard to manage. But the PR on the deal leaves a lot to be desired. It's not clear from the deal description on Google's site, how this is going to impact their growth, margin, or revenue profile. They gave us a lot of stupid platform buzzwords, nothing tangible. How did they value this at such a high multiple? Plus, with $50 billion in annual R&D, one wonders why Google is unable to boost cloud security on its own. Are they not able to release products effectively?

No, it doesn't look like it. Why can't they hire good people for all that cash? And was Google Cloud Security really bad before this? I don't know. They really need to work on this. I'd fire the PR team. The poor communication will cost shareholders a lot of money today. Also, considering the recent crash in Google's share price,

could this cash have been better spent on a buyback? Let's face it, $32 billion is only 1.6% of Google's market cap. Despite sounding like a lot of money, it's Google's largest deal ever for a strategic move, if that's what this is. It's not much as such. But some buyback support would have been nice. You need it now. Shareholders are bleeding. You have the lowest multiple among the Mag 7 and still choose to spend on M&A instead. And consider the struggles of their artificial intelligence let face it, Gemini sucks versus the competition. It feels like many investors would have rather seen capital allocated to a better

product in the AI space, like buying perplexity, for example. But instead of buybacks and AI, public shareholders, and Google product users get whiz. Okay, now give us accelerated cloud growth targets. Give us the public something. Now, for sure, this is an incredible exit for the VCs here. And I saw Andresen did one billion on 12 billion, like a year or two ago. And so they just made $2 billion. And I think Thrive was in that round as well.

And there was a small list of... The cap table is literally a Silicon Valley who's who. So yeah, we've got to ring the Sisegong. for, um, yeah. So, um, the day initially had a deal in 2024. WIS runs a secondary sale at 16, uh, which was double their previous valuation. Uh, and initially that the initial deal was somewhere in the $20 billion range. Um, and anyway, so they put in, uh, basically all the investors into the new, uh,

collectively, Sequoia, Cyber Starts, Index, Salesforce, Thrive Capital. Green Oaks and two dozen others got, yeah, basically, whoever invested at 16, got a clean 2x in less, almost less than a year, I think. What a cool, what a cool company story too. I mean, incredibly quick, five years, I guess, from 2020 to now. Founded by Assef Rapaport, the co-founders and the founder, Asaf, stand to make more than $3 billion each from the sale. it's the biggest exit for a private venture back company on record displacing meta's $19 billion acquisition of WhatsApp in 2014. So we had a real dry spell there for a decade.

We are so back. But we are so back. Yeah, and the market, it's hard to say the market didn't, I mean, it's actually not very hard to say. The market did not love this. They wanted buybacks. Basically in the last five days, it wiped out roughly. But it's hard to say because this deal leaked earlier.

There's a other factors, but there was a pretty meaningful drop in share price at the open today. And they've wiped off like, you know, $50, $60 billion in the last five days. Not great. So good point from Wasteland basically saying that, you know, if there was better messaging around this entire deal, it would be potentially bullish. People might like it, right? So we got some other news here from the. the history of the company. All of the co-founders are alumni of Unit 8200, part of the Israel Defense Forces, known for its cybersecurity savvy and intensity. Former Unit 8200 members, or

8,200, I'm not sure exactly how they say that, members have been able to attract clients and investment money from Silicon Valley in spades, and the Wiz team is now among the ranks of unit veterans that have founded highly valued cybersecurity companies such as Palo Alto Networks and Fireblocks. Rapport, a 41-year-old. old Tel Aviv native often dons a hoodie with Wizz's logo on it in keeping with the tech aesthetic or white t-shirt, joggers and sneakers. And you'll love this part. His shoes from the luxury Italian brand Golden Goose typically costs more than $500.

Fantastic. We love to see. We love to see some fine Italian goods. Even if you're going with the simple hoodie and jeans or joggers, you can still throw on some golden goose sneakers. You can still class it up a little bit. Let people know, hey, I'm running a $30 billion company. Well, the beauty of golden goose, too, is most of their shoes, at least the really popular ones with men, are intensely worn in.

You know, the red and white sneakers I wear. Those are golden goose? Yeah. Oh, there we go. And they look to the untrained eye, like a 10-year-old, like a 10-year-old pair of sneakers. Got it. Dirty, you know, scuffed up. And so he's, you know, he's very, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the.

Whoever wrote this article, the journal really put him on blast year because he was flying out of the radar prior to that. They'd let him know. Yeah. They did their research. They clocked those from a mile away probably. He often brought his border collie, Mika, dubbed Wizz's chief dog officer to work at the company's offices in New York and Tel Aviv and encouraged other employees to bring their dogs as well. Mika, who died late last year, had her own LinkedIn page. That's terrible.

I'm so sorry. It's unfortunate. Rappaport wrote when the dog died. Did your dog ever have a LinkedIn page? No, he had an Instagram. though it was popping. Yeah, but why? I should have gone on LinkedIn, really.

You didn't want them to link and build? Yeah, and create value. Seriously, do some thought leadership. Nothing happening on Instagram for dogs, right? They get enough attention in the real world. Yep.

Get him on LinkedIn. I made the wrong platform choice for sure, for sure. Robert wrote when the dog died that they were a power couple and called the dog the love of his life. Oh. Oh, that's sweet. Just a man's best friend. He can now take his billions and spend the rest of his life.

Cloning the dog. You know, cloning the dog. He needs to acquire. I don't know if he'd quite have the money to acquire. What's the woolly mammoth one? Oh, yeah. Why am I blanking on that? I forget.

Something. It's not mammoth. Mammoth. Colossal. Yeah. And just say, hey, look, cool tech. It seems. This is a pure play.

Dog reincarnation now. We're reincarnating. My dog. My dog. Love it. And we're going to. going to use the dog to do another $30 billion exit in five years and just sort of rinse and repeat.

It's fantastic. So talks between Google and Wiz fizzled last summer. Wiz started talking to bankers again in the fall about a fresh deal, a positive of IPOs this year prompted Rappaport and co-founders. Ami Lutwack, Yon Kostika, and Roy Resnick to explore deal conversations with several other parties, according to people familiar with the matter. None was willing to pay up as much as Google. The companies were ultimately able to improve the terms of.

of the deal again and gain confidence that the Google transaction could overcome regulatory hurdles. Google also views the Whiz deal as something that isn't in the best interest of America's national security. The increased role of AI and adoption of cloud services have dramatically changed the security landscape for customers. The acquisition is likely to test the Trump administration's antitrust appetite, but if it clears, WIS's security features could help Google attract more cloud customers. And we're having Joe Wisenthal on the show in about an hour or 45 minutes. And it was very interesting. I was listening to the latest episode of Odd Lots. And he had the new, the Lena Con replacement. I don't remember his name. FTC chief

Andrew Ferguson on the Trump vision for antitrust. And it was fascinating listening to this guy. He was incredibly eloquent and could just take you on these really long journeys in the history of antitrust. Like clearly had really understood the foundational texts and research. It was a very interesting conversation, but maybe we'll get Joe to chime in on where he thinks this goes. Overall, huge win for the Israeli tech ecosystem. Sean McGuire called this out earlier.

They went by the Wizards, which is a good name. Really? That's cool. Oftentimes startup, sort of team nicknames can be a little bit rough. A little bit rough, but this one works. And just good for venture broadly to get this type of outcome. Totally. We need our big asset managers to get some quick wins every now and then to just, you know, keep, keep the fire hose of capital coming. We were so close to just like an IPO historic run with the Trump pump and everyone was getting ready and the market was up.

All risk assets were way up. Everyone was like, well, everything's going public now. The door's open. And everyone's like, okay, like, I don't want to be the first one through, but like, let's do it. And then the market crashed and now everyone's like, let's stay private for another decade. When you look at, you know, I'm sure that WIS was pitched on going public by a bunch of different investment banks, and I'm sure it was an option for them. That being said, you know, selling to Google and, you know, it's probably a much better lifestyle post-IP than post-IP. Yeah.

So it makes sense and still a great way to return. Capital, you know, back ultimately into the ecosystem. I'd be curious to know some of those later stage rounds where they, you know, sort of made out of some of these funds, were they special purpose vehicles. If they were in funds with that kind of timeline, they would, you know, likely be recycled, you know, directly back in. But who does? Yeah, we'll have to ask one of the backers see what they think. Well, I'm sure all the founders at WIS are sleeping well, but they could be sleeping a lot better if they got an AetSleep.

Go to AteSleep.com. Nights that fuel your best day is turn. any bed into the ultimate sleeping experience, use code TBPN at 8Sleep.com. Go to 8Sleep.com. You get $350 off. TBPN. My 8Sleep did its absolute best last night. I got four and a half hours of sleep. Four and a half hours. It's telling me to, it's telling me the app to pay attention. I'm definitely paying attention to how four of my sleep was last night. I got a 67. I need to, yeah, I honestly need to, to, to, to, to, to, to, to, to, to, to, to, to sort of court-track tonight.

Just podcasting. Early to bed, early to rise, makes a man healthy, wealthy, and wise. Go to 8.com. They should update their website copy to that. Early to bed, early to rise, makes a man healthy, wealthy and wise. Healthy, wealthy and wise.

Well, let's stay on the topic of acquisitions and go over to Kiva Dickinson, who says, what's this $300 million tax benefit getting talked about? A Pepsiopopopi acquisition. You want to break down this. Just real quick, Pepsi. We do the Watsuch Journal article first.

Yeah, let's go through it. So PepsiCo announced yesterday they're acquiring prebiotic soda brand poppy for $1.95 billion. The soda make the Pepsi, the snacks, and soda maker said the deal includes $300 million of anticipated cash tax benefits. And really eye-popping number makes sense that sort of the big CPG brands would pay quite a lot to, ultimately buy the products that are displacing them on the shelves, right? I think Poppy and Olipop, these companies have very, you know, very quickly made a product that was, I would argue, close to as good, seemingly more healthy. And consumers love them. They killed it on, you know, the merchandising side, just delivering a bunch of different flavors,

iterating quickly. I saw somebody joking, you know, the backstory here. is that Olipop started. Poppy actually started before Oli Poppy. That's right. But was called something else. I think it was called Mother something. Oh yeah, they rebranded. And they were an apple cider vinegar sort of tonic.

Yeah. Ollipop comes out. And I guess Poppy allegedly was like, that's a good idea. And just immediately rebranded. And I remember at the time, I was living in Venice at the time, which Venice is the hub of, in many ways I feel like the hub of, you know, consumer package goods outside of Brooklyn maybe.

Yeah. And I remember this was, you know, drama in that moment because Poppy had come out and basically like almost one to one copied the Olipop Brown. Like I'm sure there, I don't know the whole sort of like legal backstory, but I'm sure letters were getting sent to them. Yeah, it was like similar, you know, very similar fonts. Yep. And very similar products. I think the main thing with at least Poppy is that they didn't go, like soda might be

over 100 calories a can. Obviously Diet Coke is calorie-free, zero calories. Poppy and Olypop always played in this like 25 calories per can, some calories, but low calorie, kind of just a different positioning. And it's interesting that PepsiCo is feeling the heat from the prebiotic soda more than they did from the seltzer because do you remember spin drift was really putting pressure on them and I saw a lot of people switching to just chugging seltzers because they have zero I mean you look at the ingredients on spin drift and it's just like lemon juice and water and salter there's like nothing there but but the sales

velocity for these prebiotic soda brands just ended up being orders of magnitude totally more than than the seltzer market people realize okay spin was hot, LaCroix was hot. Poppy and Olippot came. It just flooded the market. And one thing that's, you know, I won't say one way or another if Poppy was a direct, you know, copy of Ollipop. I just don't, I don't know enough of the backstory.

I just know the sort of rumors. Doesn't matter now. But really fantastic example of, it's rare that you see a company sort of get called out for copying someone else, especially in CPG, where the product is one thing. but it's really about the delivery and the branding, the packaging and all that stuff. But it's rare to see a copycat product do scale to a $2 billion outcome in such a short amount of time. So let's talk about why Pepsi did this deal and then let's talk about those cash tax benefits. First, soda is under more attack than it's ever been.

I mean, everyone knows that the big gulp at 7-Eleven is like a thousand calories and very pat for you. RFK Jr., the new Health and Human Secretary, Health and Human Services Secretary, has called soda poison. And sales of traditional soda have gone flat. A little bit of a pun there. PepsiCo and Coca-Cola have jumped into the market

dominated by Poppy and competitor, Oli-pop, with their own creations. Coke in February said it would launch a soda promoting digestive help called Simply Pop, while Pepsi is formulating. a version it aims to sell in the spring. They'll probably cancel that because they have poppy in the portfolio now. Unlike probiotic drinks such as kombucha and kifir, which introduced, is that how you pronounce it? I think so technically. Why? I've always said kiefer,

but maybe that's the. Kefir? I don't know. Cambocha and the other hippie one, which introduced new microbes to the gut. Prebiotic sodas can turn dietary fibers that feed the bacteria already living in our systems. Olipop and Poppy use inulin fiber, often naturally derived from agave or chickory roots. So that is why they're putting pressure on it. I'm not, we can go back to the previous post. Yeah, the Kiva, pretty prominent CPG investor says, what's this 300 million of tax benefit? Getting talked about in the Pepsi Co-Popi acquisition is the deal being done at 1.65 or 1.9 billion.

When you acquire an LLC, you get to step up the basis of the target. company's assets to account for the difference between what you pay for the company and the balance sheet assets, aka the book value. In situations like Poppy, where a lot of what PepsiCo is buying is brand, the step up can be quite large often in a majority of the value of the company. Pepsi here is saying, hey, people love this product. They're sort of in these retail stores. With our distribution network, we can get them in many more. We can get them global. We're really buying a product that people already love that has velocity. That's competing directly. with one of our core products, which is their Pepsi Cola, and I'm sure, like, Pepsi Zero or whatever they call it.

So Kiva says the acquirer can then amortize the value to step up over time in the same way they depreciate a capital asset they invest in. That amortization reduces their earnings before tax, thereby reducing their tax bill for years. These future tax savings can then be discounted to reflect a present value. Presumably then Pepsi is saying they would have paid $1.65 billion if Poppy was a C-Corp, but instead, said, they were willing to pay an extra 300 million for the tax savings that they will realize over time. Interesting. He has no inside information, but that's what he assumes is happening. So interesting.

Either way, really big numbers. Good for the CPG ecosystem broadly. This doesn't mean it's a good time to start a pre-biotic soda company, even though it's a very impressive outcome. The trap with CPG has always been that, you know, sort of these simple, tangible ideas, right? It's sort of, oh, I can make a beverage. I could put it in a can. I could get it in a store. And what you don't realize is that it takes just a monumental effort.

It takes a really ridiculous execution over a long period of time. Poppy also, Poppy had like pretty much a pretty ridiculous. They had done a sort of series of party rounds over the years that I think they pretty well-leverage. If you look at their investor list, it's kind of a very Hollywood- Yeah, it's extremely difficult to build distribution into the product. There's, there are very few network effects or flywheels that you can build. Everyone does like a referral friend program, but it just doesn't work the same way as something that's like Dropbox that has a referral friend program where you get something like tangible that's free, high margin.

So it just comes down to just grit and sales and distribution and advertising. And out-of-home advertising made easy and measurable. You have to go on ad-quick.com. You have to say goodbye to the headaches of out-of-home advertising. Only AdQQquick combines technology, out-of-home expertise, data to enable efficient, seamless ad buying across the globe. That's really what it takes to succeed. And so that's what I would recommend to the Poppy team and the folks of Pepsi.

you know, they're going to have a lot more money in their marketing budgets. And, you know, I'm sure you're listening, Pepsi CMO, like go to AdQuick right now and just just full set. Just send it all on adquick. Well, you know, they have a flavor called Pepsi Max. And so they could lead and, you know, literally buy every single billboard on AdQuick for Pepsi Max. Yes. And just max out.

Just max it out. Max it out. And if you're a founder that's working on a consumer good, go buy. a billboard go viral have some fun with it talk to the iqqq team they will get you set up they will i i have a buddy who really uh noticed that out of home demand uh in l a dropped dramatically after the fires oh really just bought up pretty much he has a you know a nine figure revenue cpg company he he bought up basically every yeah great a billboard in all of the the jeremy gifon of billboard buying yeah special situation

guy. I'm into it. And the amount of just like, like attention he received off of it was insane. I mean, every single day there was, you know, tons of people taking pictures. It's one of those things that's like really, really hard to measure because you'll get like text messages from people that just like your company feels more real. It's similar to PR and press where it's hard to measure. But that person who's considering joining your company, they see the billboard and they think like, okay, this is a more serious company. Yeah.

Or, you know, you know, potential. distributor, a potential investor. It just makes you feel more like you've broken out of just, oh, you exist in this hyper-targeted, you know, online flywheel that might be working. But the beauty of out-of-home versus traditional media is you don't have to talk to journalists. Yeah, you can say whatever you want. When you do out of ad quick, you know, you just sign up and do it. Anyway, should we talk about this, Mark?

Yes, we should. So Mark Rober put out a YouTube video, testing, can he fool Tesla's full? self-driving system. And I mean, it's a very funny idea. He built a wall that looks like the road, straight out of Roadrunner and Wiley Coyote. And of course, the Tesla, which is using a camera, is fooled and smashes through the wall. Completely, you know, impossible situation, not something that you should be worried about if you are purchasing a self-driving car.

But it was extremely controversial because... I don't know if you have any enemies, like... Like Wiley Coyote or I guess the roadrunner is the one who puts it up. Yeah, yeah. So if you're feuding with someone with roadrunner strategies and aesthetics, then yeah, maybe stay away from the Tesla. But if you're not, you're probably fine. Was there another, what was the other company that was? Luminar.

And so that's another interesting thing. Luminar founded by Austin Russell, a teal fellow, took the company public during the SPAC boom. I also believe Luminar's Austin Russell. At one point, he was trying to buy Forbes. And at another point, I think he bought the succession house that burned down during the fires. I think that was him, right? $100 million plus now. $100 million house or something like that.

And so the stock has been, it fell from its SPAC peaks. It's down at around $213 million now. And as a market cap, and I think the company was at one point valued in like the $4 billion range, like most of these SPACs. And so Luminar sells LIDAR for self-driving car companies. It was a very hot topic, very hot product during the self-driving car boom. There was a question, okay, if Waymo really takes off or something like it and Luminar is one of the providers, well, then Luminar is going to be a really key component in the supply chain.

They'll be a very successful company. Obviously, the stock is down. But since that Mark Rover video dropped, the stock's up 27%. And it's very interesting the way it's filmed because they actually, they're using a Lexus SUV for the LiDAR car, but they black out the logos. So you can't, like you can tell if you just know what the Lexus looks like. To be clear, Luminar has not really made progress on getting back towards its 2020. What was the peak? February 12th of 2021, it peaked at $565 a share. Wow. You're on public.com looking at that? Yeah, and it's at $6.6.0.70 right now.

Wow, it's down 99% still. So if you loved Luminar at $565 a share, you're going to love it. It's $6.42. Wow. No, but this seems like an interesting strategy to potentially get retail investors re-engaged with the stock. Totally, totally. And so it, so let's go through kind of the story here. Alex Finn breaks it down in what is a pretty controversial thread. I think pretty much every single one of these tweets that he posted got community noted.

But he does do a good job of just kind of laying out exactly what happened. He says, you know, Mark Rovers built one of the strongest reputation on social media. Absolutely true. I've talked to Mark briefly in a clubhouse room. Very nice guy. You know, Mark's background is he worked at NASA, just total science guru, like, you know, just science nerd. He just loves doing these little tests.

has grown this massive YouTube channel where he kind of tests different scientific ideas. And Alex Finn is claiming that today he obliterated it all with one 18-minute video. It's a story of greed, deception, and cowardice. And you can tell from the writing like that, this is, you know, this is as click-bady as a YouTube video. But it got 90K likes and 22 million views. So Mark is a longtime YouTuber who spent years occurring over 65 million subscribers. That is a massive, massive number. He was the Mr. Beast before there was a Mr. Beast.

And then he says, yesterday he let money, politics, and greed get in the way of all that. Mark put out a video called Can You Fool a self-driving car? The concept is simple. Drive a Tesla in full self-driving mode on a road where there's a wall painted like a road. There's actually six tests he does. One is just there's a mannequin with a kid in the road. Then they sprayed some water. Then they sprayed some fog.

Then they had the kid pop out at the last second. And they did a number of different tests to kind of show different scenarios. And basically the gist of the video is like, LiDAR succeeded in six out of six. And the Tesla succeeded in, I think, only three out of six. But the Tesla fanboys really came out strongly against this. And there are some reasonable critiques of this. So Alex Finn says, wrong. The video was filled with deception lies in illegal, undisclosed advertising.

In the video, Tesla does not detect a wall and goes right through it. On top of that, there's a mannequin that gets absolutely nailed. It is very funny. But there are a few things Mark doesn't tell you. First of all, he lied about full self-driving. He didn't even use FSD. He used autopilot, which even Tesla admits is an older, not as strong technology. And this is where it gets really confusing because obviously in the context of like a highly

edited YouTube video, Mark Rober's not giving you all of the details on like, this is the exact hardware I'm using, this is the exact software I'm using. I've updated the software. Here's how I'm engaging it. It's edited to be entertainment. And so it's pretty hard to tell exactly what's going on. There's actually an ongoing debate on whether or not he deactivated it by accident or on purpose before it hit the wall, as opposed to whether or not the system disengaged. And technically, if the system disengages, you have to be ready to step on the brakes.

And that's the car signaling to you. Hey, I need you to take over. It's time for you to press the brakes. And so if you don't press the brakes, when the car tells you to press the brakes, it's kind of on you. Kind of goes back and forth. Alex's writing is really funny saying he sold his soul. I know. He betrayed his country by attacking by the most American-made car company in the world.

He deceived his entire audience, all for a paycheck. It's so, it's so sensational. I love it. But, so in the description, they do, Mark Rober does mention, thanks to Luminar for allowing us to test their LIDAR equipped car. they provided the vehicle for testing purposes, but no compensation was given, and this is not a paid promotion. And so it turns out that I think Austin Russell and Luminar and Mark Rober are like independently

connected and like kind of friendly. And Russell had donated to one of Mark Rober's fundraising efforts. And it seems like they're just kind of like buddies more or less. And I think the other like subtext here is that Elon has just become such a lightning rod that if you are in the business of just getting attention and getting clicks, you can get millions and millions of views on YouTube right now with any video attacking Elon because the the audience is just so ravenous for something to push back against Elon's new kind of political arc. And so I saw a video by a live streamer who's just sitting there just talking about Tesla and what the stock's done, two million views. And he normally gets like 400K views on a video. But like the Tesla stock crash got like two million views showing that like there's super high demand for this type of like anti-Elon content on YouTube right now. Everyone who's a YouTuber can see that.

And even if you're not anti-Elon, like for a long time there was a whole sub-niche of like you put Elon with a clown nose on his. him and you say like Elon's tunnel company is stupid or it doesn't make any sense like or like Tesla just crashed. Why would you want to go under ground? Yeah. And then there was another genre of like Tesla glazing videos that got millions of views that were like Elon must just announce a nuclear reactor. It's confirmed.

Like this changes everything. And they would just produce completely fake videos but pro Elon because there were like pro Elon people that would just click on anything that was pro Elon. And so Elon's just become this like vortex of content nonsense. But even the big YouTubers are clearly feeling that. Johnny Harris, this video essayist, when Elon started getting political, wanted to do a deep dev on like, how did he get here? What's his evolution? Like you want to just address the things that are in the news and Elon is in the news.

And so very, very controversial. We have a post from Nick Carter here. I don't know if you want to read that. But he says, I'm not a big, I'm not a big. I'm not a big Mark Rober fan and not a Tesla fan boy at all. I've never owned the stock or the car, but Tesla's, but Tesla has a case if they want to sue him for this video.

It's clearly deceptive with the aim to disparage Tesla. And that was kind of the vibe on X. But overall, wild story. Yeah, it's an interesting position for Tesla to be in because suing a big creator is not going to necessarily get you more fans. Totally. It does feel like the right way to do it is to potentially have the engineers just do like an entire breakdown.

Like if you did a two hour breakdown of the video and we're pointing out, you know, here's, here's why this scenario, you know, we're not building these cars for the sort of road. Exactly that. It's literally just a trade off between do you want a cheap self-driving car that is susceptible to roadrunner scenarios or do you want an expensive car that is roadrunner proof? And most people will say, yeah, you know what? Like, I could wear a five-point racing harness and a helmet every time I drive. That would be safer.

But, like, I can also just wear a normal seat belt in an airbag and, like, try not to crash. Drive safer. That's right. Like, there's obviously a spectrum of capabilities with every one of these vehicles. The LIDAR thing, I mean, Elon's been beating that drum for years saying anyone who's using the LIDAR is doomed. Like, it has its own edge cases. I think it doesn't work in maybe the rain or something like that.

The rain confuses it. It has its own drawbacks, but it's also very expensive. And so unless you're running a Waymo-style business where it's fine if the car has a 500K cap-ax, it hasn't made sense. I've always heard that and been like, but can't we just make LIDAR cheaper over time? Like it has to be possible to make that cheaper. Like Starlink's making millions of satellites. Or is the right system to leverage both because you want to manage all the different edge cases

and be able to work in different environments? Yeah. I mean, George Hots. Yeah, I talked to him about this. And he just said like, look, how does a human drive? Two eyes, two ears, two hands, two feet. That's all you need. Yes. Yeah. No, he even said like it has like like the comma AI self-driving kit that you attach to your windshield that adds self-driving functionality to your car. It has a mouth because it breathes air to cool the CPU. He sees it as like a huge. human head. It's very funny. It's very cool. But yeah, he just says like fundamentally, like we don't have LiDAR and we can drive cars. Therefore software must be able to drive cars with just two eyes and two ears and, you know, a couple other things. And that's it. So it'll be interesting to see where this goes. It'll be interesting to see if any car companies see this demo and say,

yeah, let's roll that out. Because I think everyone wants more competition and no one wants less safe vehicles on the road. And so my most disappointing thing was that they used this, this Lexus SUV to demo the LiDR. And it seemed to be a good system, but you can't buy that car right now. Like if you're driving behind a Lexus, and they engage their autopilot,

like they're just as likely to crash into you as anyone else because they don't have these systems engaged yet. At least I don't think they have it on offer yet. There are some companies that are obviously working on it. But we got to talk to, Joe about Tesla. Oh, yeah? And the stock.

Okay. Where does it go from here? Okay. We had, I'm just curious to get his, just like, analysis on, obviously he's not a, you know, hedge fund manager, but it's such a stock that trades on the future. Elon's popularity. Yeah. You're talking about Joe Wisenthal, right? Yes.

Yeah. I mean, from what I know, I've only talked to him once, but it seems like he's a person that takes investing seriously and thinks about multi-asset investing. He prioritizes industry-leading yields. You know, he would only use a platform that's trusted by millions. And that's why, if I were talking to him, I would recommend that he sign up for public.com. That's right. Fantastic choice. Stocks, bonds, crypto, options, T-bills.

You can get it all. at public.com. And, yeah, we're, we're, we're, I'm excited to talk to them. We've got a video with, with public in the pipeline that I'm very excited about. Should we make that video over the top anti-woke, potentially kind of do like the salmala thing? One way to get a lot of attention with, with an ad in 2025 is to make it so anti-woke that people decide, oh, I'm actually woke. I'm actually, you're not in the little bit. now. So if you miss it yesterday, Solana put out an advertisement. What was it called, by the way?

The blockchain put out a lot of blockchain, the foundation. The foundation. Put out an ad and Sam lesson broke it out here. He was an early Solana investor and he says the Salana ad completely comically misunderstood the 2025 media assignment re-authenticity. I love Solana and I actually agree with a lot, but not all of the points of this video. Seed investor in Solana. Yeah, wow. But Let's be honest, it's a terrible ad. Hilariously terrible. The tone is completely wrong. They were right to take it down, even if the internet,

and of course the blockchain in particular, never forget. Loll, irony. The reason it doesn't work is isn't the content. It's that they used actors in a polished scripted scene. That is completely wrong in 2025. Interesting take. I don't know how much I agree with that, but I'm getting there. What people care about, what works in media's authenticity, warts and all,

is real people in raw form speaking their truth. I'm not suggesting it, but if the Salana leadership had made the exact same points in a speech on the street, like them or dislike them, the content would have worked when other tech leaders make these points in their own voice, it works. But this, these points packaged in pristine background

with scripted actors, it honestly just shows whoever made this completely misunderstands the moment and how media and comms works in 2025. It's the opposite of going to act. Your take on it was that they just seemingly planned the ad like when Trump was elected and it took a while. You remember when the Jaguar rebrand happened

and everyone was like, oh, they expected Kamala to win. And it felt like a very Kamala coded ad. This is kind of the same thing where it's like, oh, they green lit this as the day Trump won. And they didn't realize that there would be like kind of a re-evaluation of things post. And like there'd be a settling in period. But yeah, I mean, these ads, like if you go confined it,

because it's been somewhat taken down, but it's still up there. Yeah, everybody was saying, you, Salon had deleted it, but they're like, we will not let you forget this ad. Never forget. I wish, I'd want to have the actor on the show. Yeah. That'd be fun. But yeah, I mean, an ad like that, it's like clearly shot on cinema cameras, professional

lighting, makeup, hair, script, all this stuff. Like, it takes months to get something like that made. They didn't, they didn't use just some film school kid to whip it up, which they probably should have. It took a long time. And so by the time it got through all the reviews and all the post-processing and editing, color grading, and sound mixing, it was. was, it had missed the mark.

Like it might have been edgy. I mean, really, you got to go back to like Coinbase in 2020, one saying like, hey, we're mission oriented. And even that was different because the coin base, the Brian Armstrong piece about Coinbase was they were not saying we are anti-woke. They're just mission oriented. We're apolitical. Yeah.

We're not, it's not, they weren't saying, hey, we're right wing now. It was like, we're not left wing. We're not right wing. We're just crypto, apolitical, like, and we're going to. to donate where we need to just on crypto stuff. We're going to stay focused. And like I liked that and I think that was good. And they were dealing with internal sort of mutiny, you know, people similar to what happened to Google and a lot of big companies were experiencing that. Yeah. So they had to kind of do something. And I looked at Crusoe Energy launched a video yesterday,

kind of reintroducing themselves as a producer of energy and data center capacity for brother Justin Mayer's first angel. Oh yeah, that's right. That's right. Chase Lockmiller, the CEO over there. And on one hand, like you watch this, you watch this Crusoe energy video and it's like, it has like a very corporate vibe. It's somewhat stock footagey, but it's just very clear what they do and what they care about.

It's authentic. It's authentic. And I'm like, this is amazing. This is actually what business is about. Like they just care about their business. And you know what? I don't know what the political statement is. here because it doesn't need to be a political statement.

They're just saying, look, we want to build data centers. That's the business that we're in. We're going to do it. And we're excited about what people will do on top of those data centers, training AI. And they have some pictures of people in healthcare settings that could benefit from AI and financial settings that could benefit from AI and all these different things that could benefit from data centers. But at the end of the day, they just say, we're Crusoe and we're building the next generation

of data centers. And I'm like, I'm so here for this. This is so refreshing. And if you love big data, you're going to get excited. Yeah, and I actually do. You love energy. I love energy and I love big data.

So I was very happy with that. And you love leverage. Yes. And yeah, let's go to Dylan. Yeah, so I can break this down. So Dylan says this should have been the Accelerate America ad. Solana is about builders like a 22 year old dev born to Sri Lanka immigrants, putting real world assets on chain.

Still one of the projects I'm most proud of. So, and this is referencing a video. You can go watch it's capital.xy z slash founders. We made this video in 2022 highlighting Mary Gunnarate. And Mary has a very, very cool crypto company. She's been building on Solana from day one. She has this amazing story. And this ad sort of breaks it all down.

And not an actor. You don't even an actor. Yeah, like incredible story. You can just talk to a building. People are building. Yeah, very real story. Mary is not, you know, doesn't bring politics onto the blockchain, you know. Let's keep politics out of meme coins, folks. Delivering value.

And I'm proud to have, be an angel in her company. Let's keep politics out of the pump and dumps and out of the rug pulling and out of the meme coins and out of the pump. Don't funds. Let's just keep it clean. Except politics definitely got onto the chain through Trump coin, Melania coin. You remember Joe Bowden and all this other things. Just keep politics out of it. Keep politics out of everything.

I'm over it. Anyways, I'm sure Solana is already working on their next ad, the comeback ad. Yep. Cool opportunity. For what it's worth, like I've done a whole deep dive on the founders. and although their marketing seems to be missing the mark, like I think that they're really, really talented engineers and their whole story of working on wireless networking

and high performance computing. Like, I don't even know how much we could say about like, is it not decentralized enough? Like maybe that's a good argument for or against Solana. But I think like the founders are just interesting people, but they have so much attention on them because it's such, it's like it's not just a huge pool of capital, but it's also like where people make,

the huge wins and huge losses. Here's a play. Yeah. If you want to make a statement around innovation in the future, take the Smithsonian National Air and Space Museum. Private, put it on chain. Put all those planes on chain. Plains on chain. We need planes.

I mean, Colmerie, she's putting real world assets on chain, right? Yeah. This is, Mary takes over the CEO role. That's a lot of foundation. It becomes a private equity firm. And yeah. Yeah. kind of rip out all like the decentralized.

And I'm sure it would trade at like 400 X book value of the underlying planes. And that is a real financial innovation there. Well, we'll close the last comment on the, on the Salana thing. Joe Wisenthal, who's coming on the show in 15 minutes, he says he's sharing a post from 2020. I wonder how many Silicon Valley people are inspired by that Mark Andreessen post on now is the time to build to get working even harder on their next generation

decentralized stable coin protocol. And Joe Eisenthal said this is painful, but also exactly what I joked about five years ago, especially if you make it the final 45 seconds. Well, Solana could be in trouble. They need to control their costs. And so, you know, we recommend that they get on ramp if they're not already on ramp.

Time is money. Both easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place. Next time you see a bill coming through on a credit card charge for anti-woke, over the top marketing campaign, you can just be like, hey, that's out of policy. It's out of policy.

Not approved. We want to do mission-driven content here. That's right. We want to stick to the basics. John, do you have a battery real quick? You've got some extra batteries. I think we got Soren joining the team. He is crazy nominative determinism there.

He's soaring over the skies. Can you bring him in? Let's bring him in. Let's bring him in. Soren. Can you hear me? We got Sorin from Niros. We have his post here.

I'm thrilled to announce that Neros has raised a $35 million series A led by VY Capital, or VIE Capital, U.S. With Sequoia, Interlagos, D3, and Keller. This funding is going straight into mass manufacturing capacity that America desperately needs. My co-founder broke the news today in front of 800 DOD stakeholders and industry leaders at Manifest Demo Day in Washington. DC. We're going to try and bring him in in just a second. He should be here any minute. Okay. We're having an audio issue. We're working through it. Have you actually had a chance

to meet soren before? I have not. What's his co-founder's name? I met Olaf. Olaf. Hitchwa. I met Olaf. I don't know if I'm pronouncing that right. I just want to say they, I mean, we're going to get into some of this stuff. They only announced both their pre-seed and their seed less than a year ago back on May 20th of 2024. And so they've been absolutely crushing. I got a breakdown on Neros probably six or so months ago from one of the partners over at Long Journey, which are also having the show on tomorrow.

But crazy lineup of investors and the traction that they've seen is pretty crazy. I believe they're already deploying some of their early tech overseas. I went and toured his first office maybe, pretty small office in El Segundo. And I'd heard that he was a fantastic kind of like maybe the number one in the world or like world, renowned drone pilot.

And I was like, look, I've flown a DJI camera drone. Like how hard can this be? Like what am I really going to see here? And we go out, we're kind of walking, talking, and we get to this park, and he puts on the FPV goggles and takes off and is the most aggressive drum pilot I've ever seen. And like there's this tree and he's circling it like 50 times a second. And it's just the craziest like swoop swoop swoop swoop, swoop, swoop, swoop, swoop, swoop, swoop, swoop, swoop, swoop, swoop. It was really, really insane. Yeah, he's a fantastic drum pilot.

And what a great demo. Like as a high-stakes video game or a journalist or anything like that. It's really, really fun. Yeah, few founders have the advantage of being able to go and give a technical demo that can display that level of capability, right, both in the operator and in, you know, the tech, right? Yeah. So. Okay. Ben, how are we doing?

Okay. So you can hear us, yeah? Sorry? I got you guys. Fantastic. Okay, sorry for the lack of video. We're building the plane as we're flying it. You're building the drone as you're flying it.

Give us the update. How you doing? How was Manifest Demo Day? Well, yeah, my co-founder Olaf was out there. He crushed it. I mean, we had a big announcement, so we just closed our Series A funding round, $35 million, going straight into more American drone manufacturing. So really excited about that stuff.

We also a few weeks ago announced our 6,000 drone production contract. So we are now officially making over 1,000 drones a month, which I believe is the highest rate of any drone company in the United States. So our vision of mass is coming together, but there's still a long way to go. What's the main use case for these drones? Yeah, I mean, primarily we're building drones that are going to be putting warheads on foreheads. It's, you know, FPV precision strike is kind of all the rage right now. And, you know, we have kind of two systems, Archer and Archer Strike. Archer Strike is the one where we're actually the Warhead Integrator.

It's basically a modular warhead system. And then we have Archer, which is just the plain FPV drone. And you can basically mount whatever you want on there. How do you think about scale long term? I think that's probably the number one question. on, you know, people's mind that are following the industry. You see this sort of footage coming out of China, of, you know, not even drone-specific manufacturing capacity,

but when you just think of, you know, China's scale and that being, you know, one of our most obvious adversaries, you know, that's what you're up against. You're clearly not afraid. Otherwise, you probably wouldn't be doing this. How do we sort of reach and exceed China's manufacturing capacity over the next 10 years? given that they have a, you know, decades-long head start? I think the question we need to be asking ourselves is what would happen if the Chinese supply chain was completely cut off and we had to build, say, a million of these systems in a year.

What would we do? What would that look like? And right now, the answer is, you know, the entire American industrial base, I think, would be a disaster. And even the defense industrial base would be scrambling to make that happen. And we really need to do whatever we can to make manufacturing cool again and get people excited about working on this problem. I mean, we've been sanctioned multiple times by China. It seems like we're getting attention because we're doing something that is relevant. But there's a long way to go. You guys individually. We're 18 months into this very, very long journey.

So you're saying Neros has already been sanctioned by China? We have. Yeah, we were sanctioned a few months ago for the first time and then recently they, they re-upped it. I think we're in the list with general dynamics and a few others. It's more prestigious than being on the Forbes 30-30 to 30. Yeah. I see that as a huge both case. What about, can you give us a little idea, a little overview of like what's actually happening at various orders of magnitude of scale? You said you're doing a thousand a month, I think. When I, when I first met you and tour the facility, it seemed. like you were putting everything together by hand. The founders were welding or soldering or doing everything. Now it seems like you probably have some machinery in there, but what does the path to like the lights out factory look like? There was some debate on the timeline last week about,

you don't want to do too much automation too early, but obviously we want to get to high production numbers. So walking through that. Yeah. Automation is definitely the last step in the process. and the first step is designing the product around this, you know, this high-rate manufacturing. I think that's one of the big problems that a lot of the existing drone companies in the U.S. run into is because they're basing off of, one, these pretty exquisite components that are, you know, tough to source in high volumes, and they're really expensive. And then, two, they just didn't actually design the airframe around, you know, these really scalable manufacturing techniques or having low human labor.

to be able to put it together. So that was kind of the, you know, first thing we looked at when actually designing Archer, was how can we reduce the amount of human labor that goes into this thing? So even if we're not automating yet, because things are still in flux and we're not at crazy high volumes,

we're, you know, still spending, say, like less than an hour of human time per drone that goes together. So that's really, really critical. I mean, we've been in our current factory for about a year, and in that time, it's mainly been about optimizing the main assembly line. And it's still a very manual assembly line, but there's a lot of tooling in place

to make everything really repeatable and easy. And then just the design of the drone itself is very intentional. Yeah, it's one of those things that, you know, people might say, oh, like they're putting these together by hand, but that could actually be the right decision, given where you are. Can you tell me a little bit about supply chain? I've heard it's basically impossible to find an American-made drone motor. Is that still the case? Is there a change there? And are you leveraging any of the cool companies that we've talked to, like the Hadrians, the range views, the 3D printing companies? What do you see is like really beneficial to you?

Motors are still a big challenge in the U.S. I got asked on on X the other day, like, oh, are you guys winding your own motors? And the answer is no, we're not doing that yet. We definitely want to be part of solving that problem. And, you know, there are some things in the works. But, Motors have been historically really tough. A lot of U.S. companies are still using Chinese motors because it's not mandated by the government to avoid them. And same thing with cameras, especially low-cost sensors. We've seen they're primarily dominated by China. And in our world, in the FPV world, really everything is kind of built on top of architectures that use Chinese chips. So our, you know, long time challenge until we kind of finished the work and got onto the blue UAS list, was rebuilding all of these components from the kind of chip level,

because you'll look at these open source projects that a lot of drone racing technology is built off of, and oh, look at that. It's off of a Chinese microcontroller, or like every video receiver for analog FPV in the world uses this Chinese radio module. So you have to get rid of all that, do all the engineering up from a clean sheet,

which has been a big challenge, but we're getting there. And it's great to see these companies that are working on the kind of like fundamental manufacturing challenges. Like that's what I would put, you know, range view into the bucket of. Like, America needs investment castings where we're sort of one level up where we're, we have to be really smart on our component design, but we're not actually, you know, making the chips. Sure.

Do you think a lot of these suppliers over time can and should localize to a specific area, you know, China has a massive advantage, you know, with Shenzhen. and, you know, a lot of DGI being a lot of, being able to source a lot of, you know, components locally, do we need that or is it not necessary? What's your vision of how these things, you know, how we get to producing, you know, millions of drones per year? That's what else Segundo should be, baby. Let's make the American Shenzhen. Let's do it. Do you feel like, you know, you've been very successful at, you know, raising a significant amount of capital, you know, very quickly? how much, you know, is there enough private investment into drones broadly or do we need to,

you know, do a multiple more? I posted probably a couple months ago at this point that it felt like we needed a sort of project Stargate for domestic drone manufacturing. Like it seems like such a, you know, critical national security issue that, you know, potentially there needs to be an order magnitude, more investment in the category, or do you feel like there's an adequate amount of an investment yet. I'll say that, you know, the capital is available to, you know, two companies, but it has to be directed really well because both on the, you know, private capital side and the government side, like my main ask to the DoD is not to spend more money.

It's to spend money in a different way. It's to mandate higher volumes of systems that are lower cost. So it's not just about throwing money at the problem. I think we have to set the expectations, and those expectations might be an order of magnitude greater than, you know, like, billion dollars goes towards buying a thousand loitering munitions. That should probably be 100,000, you know, two orders of magnitude different. So it's not necessarily about spending more money. I do think there is private capital that is ready to go that's excited to get into this industry.

On the government side, I think there are really positive shifts happening in the direction I'm describing, but that's where a lot of this will be driven from. How's the transition gone from drone pilot to CEO? I know you were running a sort of drone oriented company in high school. So you had a little bit of experience, but does it feel like you're playing a video game when you're in Slack and you're, you know, just sort of manning the ship? Has it been pretty seamless? Yeah, do you use Slack in the FPV goggles?

That would be really locked in. Well, it's not, that's not Slack, it's ITAR compliant. He's on teams, I'm sure. Teams guy. We, we're actually, we do use Slack, but not in the goggles, I wish. But it's been an interesting transition. I mean, you know, sometimes I do kind of look around and I'm like, wow, I, you know, used to just be flying drones off my back porch and now I'm doing this.

But I think I've always had this, you know, really strong natural inclination to start a company. And I've been interested in startups for a really long time. So it feels very natural. Like I understand the exact progression of why I'm doing what I'm doing. But certainly a ton of learning. I mean, we're also just moving really quickly. And so that comes with, you know, at times a lot of pain and a lot of, a lot of lessons. But it's been a great journey.

I'm super grateful for what I get to do every day. That's amazing. Last tiny question, will we ever see a NEROS consumer product? I think DGI's number one haters over here. We've been trying to get on the sanction. We've been trying to have a sanction. We do a lot of cinematic things. We want to film them with drones, but we want to be American about it.

It's tough. Yeah. I think the market dynamic right now is in defense, and that's where the most critical need is. But our mission is to fix the American drone industrial base. So that doesn't just mean defense, right? I think way in the future, there's a very good possibility that we'll be able to replace DGI on the consumer shelves. I would love to. That would be great.

Well, thanks so much for stopping by. We'll have to have you back next. time there's a big announcement. We really appreciate you calling in. Thanks so much. Congrats on the milestone. Thanks, guys. See you. We'll talk to you soon. I want to go to Andrew Huberman for a bit. I mean, unless you have something to debrief on that. No, no. Because you got a shout out. Rora. So out of nowhere. Out of nowhere. On, it was Saturday, woke up. I guess, yeah, it was around noon. He says, I find it weird that most of all the countertop reverse osmosis water filters are made of plastic, the same industry that is built on

keep contaminants out of what you ingest. Ethos puts clean slash cleaned water into plastic glaring contradiction. I'm excited that Rora water is metal. So he's, of course, referencing to this product here. I don't know if you can see it on the camera now, but it's on the set here with us. Yeah, we developed this product extremely intentionally to eliminate as much plastic as possible from the system

because we saw that the vast majority of filters that were, supposedly filtering out microplastics had, you know, huge amounts of plastic used in the process. So unfortunate. I appreciate the shout out, Andrew. And yeah, we saw a massive pop in sales from this post alone, as you can imagine. And it was very cool to see it. That's fantastic. Well, there's other big news from Dan Premack.

He says, VCs always tell me they can't talk about. active fundraising on advice of lawyers, but that may be about to change. The SEC has issued new general solicitation guidance that makes the process much less onerous for private equity and venture capital. We may not see Times Square billboards advertising new funds, but we should, but at least it's theoretically possible, they say. Firms would also be able to discuss fundraising efforts with reporters. That's huge.

So next time you're doing your big fundraise, call into TVPN live. announced that you're raising a $10 billion micro fund to rip checks into a hundred million companies. Yeah, this has always been sort of done indirectly. You know, somebody will leave a fund and they'll be announced. I know. Oh, they're coming out. But yeah, we want to see one-on-one billboards of all the big asset managers. 100%.

I mean, we talked about scout funds. You know, you're a scouted a venture capital firm. You find a company, take some of their money, put it in there. I want to see scouts on the LP side. I get comped when I go and solicit a bunch of the rich friends to write LP checks to you. That's what I'm interested in. Anyway, we got the perfect person to talk about this. We got Joe Wisenthal from Bloomberg calling in.

Hi. Hey, Joe, how you doing? It's our financial brother. I'm thrilled to be here with my technology brothers. Thank you for having me. I'm so glad to have you on the show. Is this guy professional? I'm not used to this.

You know what? The last time I did any sort of like video call-in show, my producer, Kail, who is in the room with me, he scolded me because he's like, you look like garbage in that video that you did. Because I just went down to like the basement here at Bloomberg and I like propped up my phone and it was a weird angle.

So he said, next time you do anything, just let me know. And so he got me set up, shout out to Kale in this really nice studio here. It looks great. And I have like a proper ringlight and everything in front of me. So can we give the viewers a little background on you?

As I understand, your passion is for finance podcasting, but you have to make ends meet by playing in some sort of band. Is that right? That's right. You know, yeah, you can't really live on finance podcasting. Yeah.

Alone. And so I'm in a country music band called Light Sweet Crude. Yep. And, yeah, we passed a bucket of tips around after each show. Yep. And I think the last show, I probably, after netting it out with the opening act and the other members, I think I got about $10. Fantastic. Amazing.

That was the key. Hit the size gone, John. There we go. Boom. There we go. Yeah, there you go. gone. It's fantastic. Well, yeah, I mean, yeah, thanks for joining. I did odd lots a couple months ago. It was a great show. We had a bunch of stuff we wanted to talk about today. I mean, did you see this SEC news that VCs will be about to, they should be able to advertise their active fundraisings. This is an Axios today. Oh, did this? I missed that today, but I'm sure, I'm sure this will be wonderful. Many retail investors convinced that they're getting on getting in on the next big thing. This can only mean, good things. I'm sure that's more wired checks to you guys. Well, I think I think the idea is that if you can

put $100,000 into a fund or if you can put a million dollars into a fund, it sort of implies that you're accredited, right? I mean, it could be less risky than some SPACs, I guess. Like, you know, you're getting into some diversified fund that's professionally managed. Doesn't seem that crazy. I love that. Well, there are riskier things that are conceivable. So therefore, yeah, no, I get it. Yeah. You can advertise literally anything else, right? So, so I, so I, I, I, I, I, I, I, I, I, I want to know you got to break the news here. You posted yesterday. I have a good idea for something I want to write in the newsletter tomorrow.

I'm so tempted to just waste it as a pithy tweet right now. You put it in your newsletter. We're going to encourage people to go subscribe, but can you break us down? What was that good idea? I hated that Salana ad. Oh, yeah. I know everyone hated it, and I hate just like, if someone follows me on Twitter, I don't usually jump on the thing that everyone's jumping on.

Totally. I'm not really like my style, but I hated that ad. It had nothing to do with it being like, anti-woke or whatever. It was just like I hated the premise. Yep. That like investing in crypto, that like investing in meme coins, which is the primary use of Solana is somewhere along the land.

Space travel. Yeah, we built the railroads. We landed on the moon and we trade coins on Solana. It's like, no, I'm sorry. I don't accept that premise. It's not part of it. And I was going to make, you know, like there's this, the joke when I was going to, I could have just done it in a tweet.

which is the real set, which is, you know, it's like, what would your job be on the, you know, the Soviet commune and everyone imagines that they're the poet? It's like, what would your job be on the, you know, the Martian landscape? And probably your job is going to be miserable because it's miserable up on Mars. And it's cold and there's no climate. You're probably doing something with like trying to mine ice or something like that. But everyone imagines that they're the guy who's going to be like, oh, I'm going to like set up the decentralized payment platform. It's like everyone. The Martian meme coin artist.

Yeah, it's like I'm going to be the guy posting dink memes to like motivate the workers who are out on the, out on the Martian landscape. I hated that ad. I hate the whole premise. It could have been a tweet. Yeah. Because I have employed, because I have employed, because I need to make ends meet here at Bloomberg. I was like, you know what? I'm going to write it up in slightly longer than 280 characters for my newsletter today.

Yeah. I mean, you know, the steel man, the salon on Mars, we're going to need to fractionalize that ice, get it on chain, trade it. Like, this is going to be important, I think. Yeah, no. You know, like, who has the one token? You got to tokenize the ice. I get that. Exactly.

All right. Well, then I'm slightly open-minded to it. We've got a working theory. We want Doge to let us privatize the Smithsonian Air and Space Museum and put the planes on chain. We want planes on chains. Yeah. So that's our political platform. I'm curious what you think the whole play was with Mark and the Tesla video yesterday.

Do you have any sort of comments on that? It felt weirdly sort of conflicted in the sense that, you know, Luminar was... I don't know what the... I'm sorry. I'm so online and I'm embarrassed. I miss... Who is Mark? Mark Rober.

I totally missed it. Yeah, yeah. Anyway, Mark Rober put out a video testing the Tesla self-driving, which is camera-based, against the LIDAR system from a rival company. We're going to switch this interview. We're going to pretend like we're interviewing a country music superstar. Just ask me about country music. You asked me about like Tesla.

I don't know anything about this stuff. Well, what about your recent interview with Andrew Ferguson on the FTC antitrust thing? I like that. I thought, I mean, my takeaway from it was that he is very eloquent and a great storyteller. He did a really good job of kind of going back multiple decades talking about Trump One and and Lena Khan and stuff and like kind of just taking me on a tour of what's going on. But, and also he was very interesting that he kept coming back to like worker harm as well. That was kind of an interesting talking point.

But first, like, what was your read coming out of that in terms of like how things might change? Sure. You know, it's so interesting because obviously everybody remembers there was the huge market rally immediately after Trump won. And one of the narratives was that, you know, the FTC under Lena Khan had taken this really strict line on mergers and mergers weren't getting done and so it's like okay we're going to finally get this green light on merger wave i think there's two things here so one is like when markets are down and uh risk is off obviously that's it's that's a main driving force for

declining mergers right when people are uncertain etc so that's one factor why we haven't seen this big merger wave happen just because actually market volatility came fairly quickly as soon as the administration hit for various tariffs and reasons and we could talk about that or maybe the general economy even prior to tariffs but you know i think that like this expectation that the new administration was going to be sort of this like at least on the regulatory side or at least on the deal side that sort of like libertarian green light everything is not really uh panned out and so it's interesting we did a live show down in dc just last week and um it was a lot of fun we had uh the new f tc chair, Andrew Ferguson. And it's interesting because he's keeping Lena Kahn's merger guidelines

in place. He does have philosophical disagreements, as he puts it. And, you know, he did this like fantastic history of like what the consumer welfare standard was. It's actually funny because so early in the interview, he actually, there was a point, I forget exactly what the question was, but something about Trump or the rule of law, et cetera. And the whole audience like started laughing. started booing. You can hear it. It's in the audio. Well, you don't know.

And I was like, right. I was like, your producer like turned down the volume on that. So I just heard like a gap. And I was thought, I thought they might be booing him. And he's like, I get it. It's a DC audience. It got a little hostile. It was kind of crazy.

It was like, I was like, oh boy, like this is getting off the rails. It didn't go off the rails. And then to your point, yeah. In the next question, he sort of walked through the history of the consumer welfare standard. As it's been understood by like theorists and conservative jurisprudence over the year, And he did a very good job at that. And actually, the same crowd that had laughed at him before gave him a round of applause for that part. So the sort of like history of some of this stuff is really interesting.

But to your question itself, like I think his point was there is more to consumer welfare than just lower prices. We don't need to expand. You don't have to expand beyond consumer welfare. We just have to sort of have an expansive definition of the term. And so as he puts it, if there are issues that are going to slow. down innovation because something is anti-competitive regardless of the price, that could be a harm to consumer welfare. He did talk about the idea of harming workers is a harm to consumer welfare. So I think, like, I don't know yet. Like, it's really hard to say because the next time,

if we get a sustained market rally at some point, we might see a bunch of deals get announced until there's a bunch of deals announced and they actually have to go through and greenlight or red light them. I don't think we really know how tough this new cop on the beat is. But you know, he's made this point and now public and private. He's like, we're not, we take this idea of corporate power as a harm very seriously. And if you think this is going to be sort of like a Bush era FTC, you're mistaken, which I think is really interesting and probably relevant for investors, both in private and public markets. Yeah, it's interesting.

In terms of consumer harm, it almost feels like people are, they're not saying consumer harm, but people are frustrated with the pace of AI innovation at Apple and just the fact that Apple can kind of just sit there and Siri is free. They're not raising the price, but it feels like it's underperforming relative to if it was true. What do you think? I'm actually curious your take on that. Why do you think that is?

Because Apple must feel some angst about that. Or maybe they don't because no one is going to switch to the green. I think they feel angst after John Gruber's article last week because they got really taken to task. But this is what I don't get. I get the impression it's not that hard to build a pretty high quality LLM because everyone seems to be able to do it. So what is it just about like turning it into a Siri quality product? You just need seven million bucks.

So I think it comes down to, you know, Apple wants every, they have this insane standard for every interaction has to be perfect. You look at what's going on on Apple TV and they're having trouble getting through the like awkward stage of what Netflix did where there was a lot of just like, background laundry TV on Netflix, just reruns of, you know, sitcoms and stuff. And Apple, everything needs to be polished almost like award level. And so they, you know, they've gotten close, but they're kind of trying to play HBO's game. And I think with the AI summaries, yeah, they could easily just bend in an LLM, but then they're

going to get hallucinations. Those screenshots are going to go out on X and people are going to say, look at what Apple did. It's crazy. But this is why to me, it makes me wonder whether, like, Like, so much of this conversation has centered around the Apple question. Why can't Apple get this right? Yep. And I keep wondering, it's like maybe this is an AI thing, which is that like all of us who,

and I use LLMs every day for sometimes work, but sometimes just out of curiosity, I'm simultaneously every day blown away. And I'm also every day like, oh, this is the dumbest thing I've ever seen. And the idea that this is approaching human intelligence as a joke. Yep. And so the fact that it can't be productized to like a real like for a company that really is like takes the consumer experience very seriously as Apple does. Like I wonder if that's like a, oh, this is very small. Here's here's an angle.

It seems like LLMs are good at delivering sort of human intelligence, which is not always reliable, right? Sometimes you're working with somebody that's smart and they give you some work and you're like, this sucks. Do it again. And so people are used to that dynamic. Whereas with a machine, if you click on, you know, Chrome and it opens Spotify, you're like, what are you doing? Yeah. And so like that kind of seems like the challenge. We expect our system to be deterministic.

It's possible. Yeah, it's possible to be blown away by an LLM when you're using it as a co-pilot to write stuff. But then if you're using it to order an Uber, it just does, you know, it's not going to do it, right? Yeah. I mean, I had a great hallucination the other day. I was using perplexity to prepare for an interview. I was like, and I, you know, I find them useful. Anyway, we were interviewing some of the founders of dimensional funds.

And I said, what are some interesting aspects of dimensional lore that would be just sort of interesting to bring up? And it said, oh, ask them about their famous low volatility coffee that they serve at their headquarters where they claim to have, like, developed the perfect mix of caffeine and taste. Okay. Complete. It does not exist. It doesn't exist. Complete. And so I'm thinking, like, I'm not responsible journalist.

I'm not going to just like ask a question at an LLM. But somewhere, someday, some reporter you're going to see on TV is going to ask an insane question with an insane premise. And it's because someone along the lines, I gave them a list of questions generated from AI. And I'm just waiting for that moment. Because, God, if I just like ask that question, what's the deal with your low volatility coffee? And they're just like, what are you talking about? Yeah. It's like an offhand joke that the CEO made at that one point.

No, I could buy zero. Also, the clue was they say it said they serve it at their Santa Monica headquarters. They're headquartered in Austin, so I knew there was something off about it for the beginning. Yeah. Yeah. So going back a little bit to M&A, we're purely technology focused. We were covering the WIS acquisition today, which is obviously good for the private markets. It's good for everyone from the big asset managers that, you know, got a nice 2x and less than a year.

It's good for, you know, broadly, you know, SaaS broadly. You're less focused on that type of M&A and more focused. on stuff like the sort of Capital One and Discover. Like is that the M&A market that really, you know, if Capital One and Discover can happen, does that mean that MNA is really back on the menu? It's a really good question. And actually one of the things I regret,

we really had so much time with Ferguson is we actually, so much of it was talked about tech and tech power and concentration of tech power because like, you know, everyone on the right and the left is in some degree anxious about that. In retrospect, have we had more time? I wish we had actually spent more time on non-tech things because that matters too. It just doesn't get as much attention or people don't think about power to the same degree in some of these areas. But I do think that's interesting.

And if you look at that spread, my colleagues, I think flagged it yesterday. If you look at that spread on that deal, that's been a complete round trip since the election. So if you want to see like one chart that sort of encapsulates, the sort of changing moods since the euphoria in mid-November, mid-December, et cetera, and then the sort of turnaround essentially when Trump took office, which was basically the turn. You know, I think like the crypto high was literally the day he had that ball. That makes sense. Yeah, Trump meme coin.

The Trump is the top, followed by the Trump dumb. The top. The loser's perfect. I mean, it's so perfect, because of course it was. You want to start strong. But I think if you look at that spread chart for Capital One and Discover, you kind of just see the whole, like, oh, wait, the rethinking of, you know, how sort of markets friendly this administration is going to be. On economic data, I love following you on days that are like, you know, the jobs numbers and stuff.

Love jobs day. But I want to get kind of like a high level for someone who's maybe in tech and not as embedded in finance. Like what is the Super Bowl of finance? Like what are the important days to watch for? Because I know that there's data dripping out. There's, oh, preliminary CPI data. Then there's Fed funds data and stuff. Like what?

is the one day that like you can't miss or like what it what and what's kind of noise that you can kind of write off yeah well i'll say like the super bowl is always going to be jobs day because it's a really good high quality survey if you want to understand like our business is in a mood to invest yep and are they feeling good i mean there's no better measure than are they actually willing to like hire someone and take on new payroll so i think like just sort of like if you want to like understand the business climate that is got to be the goal it's And there's so much to chew on and there's so many ways to slice it. There's so many ways to analyze it.

Yep. There's a lot there. You know, it's what is? I guess the first Friday of every month typically. That's good. You know, the other things that I think are really worth watching right now, several of the regional feds have a monthly survey of the manufacturers in their, in their district. And I think right now you really want to be watching specific questions about are you, how are you, how are you feeling about investment right now, capital expansion plans, capital expenditure plans. To me,

that is like the sort of billion dollar question right here, which is there's this hope, right, that we're going to have this reindustrialization or further industrialization or, you know, that's kind of what the administration is banking on. The sentiment right now is that there's too much chaos to like make any big choices and no one really knows what the final tariff arrangements are going to be, et cetera. But I would say in terms of like the sort of second tier data beyond the jobs report. I'm really interested in those sort of like business surveys that sort of ask a bunch of different questions about are you, you know, what's happening with your costs, what's happening with your, you know, various, various business planning as they see it

out the next six months. Are you looking at any kind of like alternative data sources? Like we were talking to somebody who was looking at truflation data instead of kind of CPI or are you like a purist, you got to go straight to the source. Like, do you look at all of it? I look at all of it. Look, there's no, the truth of the matter is is that the government data is very good quality by and large. There are a bunch of other surveys. You know, it's like, I remember like during COVID, you know, looking at like those like measures of like dining out, et cetera. And when is that coming back? Or airplane sales, which were actually, that's another sort of like yellow flag or red flag for the market.

Some of the airlines, I think Delta last week or two weeks ago, they said they're already starting to see ticket sales. tail off. It could be because there were a lot of crashes travel incidents in the news. So it's not totally clear. I look, look, look at. I'm really, but I think right now, the question is like, is the sentiment data, the business sentiment data, the consumer sentiment data, going to translate into hard numbers? And I don't know if the answer is yes or no, to be honest, because we had pretty terrible sentiment data the last several years. You think back to 2022 when inflation peak, terrible sentiment numbers, consumers,

shopping and dining out. So for all they told surveyors that things were so bad, they were still active as consumers. It's the Kyla Scanlan vibe session. Yeah. It really like, it really did seem to be a disconnect between how awful everyone is saying things were and what they were doing, which was going on cruises and record numbers and all kinds of things like that. Question for you. People have joked about, you know, there used to be we had bowl markets and bear markets and now it seems like we have kangaroo markets, which is, which is, just like, you know, going going up and down like this, it's just sort of a fun, fun analogy. I was, I graduated, I graduated college in 2018, you know, very, we had, you know, very quickly,

it was COVID and then the COVID crash and then ZERP and then, you know, the interest rate hikes, and then, you know, everything, it's been this sort of kangaroo dynamic. Yeah. Is the, is a kangaroo market just a obvious byproduct of the internet? where just information is just traveling so quickly where, you know, sentiment can change so quickly and trade on, you know, you know, I joked historically, like now we have group chats where like friends are just, you know, from all over the world sometimes are just like talking about what's happening and trading against that information and trading against the sentiment in the group chat, right? Yeah.

And historically it would be like, oh, yeah, you go to your college reunion and you're hanging out with your buddies that, you know, maybe you got some got, you know, and everybody's like, oh, yeah, it's actually we should be really bearish. And then you sort of make these sort of long-term decisions. Yeah, you know, it's funny. Like, because I am a journalist in financial markets, people think I know something. You know, it's now a good time to refinance my house. I was like, I have no idea.

If I knew which way mortgage rates were going, I'd be maybe in a different business. But I do, you know, typically get a few texts after a, when the market's down. And people are like, hey, Joe, how you been? It's been a long time. What do you think about the market? And that's often like, okay, maybe we're getting close to a bottom here. So just for what it's worth, I haven't gotten any. But no old friends have reached out in the last several weeks.

So if you want to use that as an indicator of something, maybe that means we have more to go down. But I think, look, like markets are volatile because the world is volatile. I mean, there's a war going on. There are multiple wars that the U.S. is in some way connected to right now. Yeah, but isn't the argument that we directly, we feel like we're experiencing that volatility? Yeah. we're seeing it live, we're seeing the war in Ukraine, we're seeing something happen

in Syria or Libya or you can sort of like... Yeah, I mean, during the war on terror, like it was pretty smooth sailing until like a massive crash that lasted years and then a massive buildup for years and now it does feel more volatile. It's a

bull market in the fix. I think that's real. I mean, I think that like in terms of like the emotional vandalism that everyone experiences every day because they're just scrolling. how can it not be having an effect on things? Totally. Do you see a world in the, you know,

are SPACs doomed because they have such a bad reputation right now or could they be great? Could SPACs be great? You know what? Specs have come and gone multiple times in their history. So I would never bet against the return of the spec. It might take a while. I think, you know, it's like maybe even like every 15 or 20 years or whatever.

But I am confident that in my lifetime, there will be another spec. boom. I will, I will, I will make that prediction, whether it's a year or five years or 10 years. But like, you know, yeah, I believe that this idea of like, you're going to put money into a box and something magical is going to happen that will never stop being tantalizing to investors. I think we will, the spacks are not dead. Capital finds a way like sand through pebbles. It just needs to find its way. I want to talk to you about your like you post on X, but you also post on blue sky. And I see some posts do really well on X.

Some of them do on Blue Sky. Are you using other platforms? I mostly use X. Yeah. You know, when like the market's down, I post on Blue Sky. Yeah.

Crowd is like sickos for bad news under the Trump administration. So I'm going to throw, I'll throw them some chum about like how the NASDAQ is out two percent. I, you know, I love Twitter. I'm so addicted to it. I'll stay on, you know,

it's like Donald Trump and Diet Coke. Like I'll like keep like. But are you using any of the other platforms? Are you on threads? No, I went on Blue Sky. I think you're the only person that I don't. I don't use TikTok.

Okay. I don't use threads. I don't use TikTok. My Instagram is private. Yeah, yeah. But we have a Discord. And the Oblodge Discord, 10,000 members. Wow.

It's like a really, so I'm in there a lot. That's great. People are like posting book recommendations. Sure, sure. Like much higher signal, I imagine. So, yeah. And like, yeah, so it's mostly X, a little bit of, and then I'll my Discord.

Yeah, that's great. It's fun. That's awesome. What about prediction markets? Oh, yeah. Yeah. Can you just give me, like, how you're experiencing that? Sure.

Pros and cons values. This is like my co-host and I, Tracy, we have different perspectives on this, which is good. But look, the way I see prediction markets is like threefold, which is like, I think it's good to have a price on the news in many cases. Because people make a prediction to be like, oh, you know, I think AI is going to eliminate all white color labor within two years. I would like to see some like price on that. I would like to see people put their money where their mouth is rather than just that big said with tweet. I think what it's a good way of knowing what people are interested in at any given moment. And the other thing I'll say, and I've said this before, which is that the U.S. Treasury market is literally a prediction market because U.S. treasuries at any point in the curve are the ensemble prediction of what the Fed is expected to do over the course of any given time.

So a five-year treasury is what the next five years of Fed short-term rates are going to be. You could decompose it. And the Fed makes its decision on like, you know, whatever, 12 voting members. And so the treasury market is literally a prediction market on when 12 people at the Fed are going to do eight times a year over any given term. So the idea like that it's not like a prediction market. It is a prediction market. And so they are clearly validated as one of the core pillars of the financial system. So hopefully, I don't know, I'd be into it if they have more liquidity and people can have more specialized bets on things. I think it would be a cool thing.

Yeah, it does seem like they need to figure out how to do longer dated prediction markets. Yeah, right, because you don't want to tie your money up forever on some 2032 contracts. Exactly. I was talking about like the last election was so exciting. I was like, I'm ready to start betting on the next election. You don't want to make a bet that it's like you're like. Exactly. And they're just like, yeah, that's not a product that anyone wants.

It's, yeah, yeah, it's very funny. So I got to run, fellas. Yeah, this is great. I got to run to a recording. But I'd love to come back. Yeah, yeah, you got to come back with the technology brothers sometime. Be honest. Be honest.

You have to go get on the. Ted Cruz podcast. And I would love to go on the Ted Cruz podcast one day, too. It's between you guys and him. Fantastic. Well, thanks for stopping by. Thanks for having me. Take care.

Thank you. Have a good one. We'll talk to you soon. That's great. Okay. Up next, coming in two minutes. Joe's voice, by the way, makes me very nostalgic. Oh, yeah?

Yeah. It sounds like he could easily have been recording about you know, the Great Depression. You know, you can hear him chattering over the radio. He's a great podcaster. I love odd lots. That was like one of the first podcasts I listened to. I think he'd been doing it for almost like 10 years.

It's fantastic. And he's held the line on not going independent. I'm sure people have dangled a million dollar pre-seat over his head. Hey, why don't you come over here and, you know, but he reps Bloomberg. Yeah, reps Bloomberg. Loyal. That's great. Well, we got Scott Wu from Cognition coming on, the show in a,

couple minutes. So many questions for him, obviously, highly... We got to start with AI. What is AI? What is this whole thing? People have been talking about it. We want to know about it. I mean, whenever we were saying like the AI, like massive job displacement stuff, the bet I would try and formulate with people was over under 10% U.S. unemployment by 2030. And even that, it sounds like not that crazy. Like we've had unemployment higher than 10% in the past. But a lot of people who I would talk to say, oh, yeah, I was going to like take all the jobs. When I tried to get them to concretize it in 10% higher or lower than 10% unemployment in the United States in 2030.

It's like not that far out. It's not that high. We've had higher than 10% before. A lot of people would say, ah, like, I don't know, maybe we'll still, maybe it won't roll out that fast. And so, like, that's the prediction market that I want. You know, there was always that headline of, you know, humans will be having more sex with robots, you know, by 2025.

Do you remember that one? No. Oh, yes, yes. I see that go viral all the time. And then Tesla Optimist just did a campaign with, Kim Kardashian. That's right. It was very silly. Very, very scintillating.

Very, very silly. Yep. And it seems that fuels like that. a big campaign by Tesla to go and work with the Kardashian. That's sort of the final boss of influencer marketing. It is. And so I saw people speculating on that. It'll be interesting to see where it goes. Well, we got Scott in the Temple of Technology. Welcome to the show, Scott. There he is. I'm good, good to see you guys. How are you? We're great. How are you? Good, good, good. Busy a couple days for us. Oh, yeah? What's keeping you busy? Oh, there's always. I mean, there's always so much

stuff going on. I feel like there's there's there's new products that come out every week. There's new models that comes out every week. And then, you know, we obviously have a lot going on with that with Devon. Well, we appreciate you taking the time. Could you give us kind of just by the way, real quick, Scott and I talked on the phone. I think it was maybe 530 or 6 Friday night. And he was like, yeah, everybody will be here until probably what do you say? What's your normal? You guys have a pretty intense. We're usually still around past midnight. Yeah, yeah. Busy schedules for it. Hopefully it's fun. You clearly haven't put yourself out of a job. But can you give us the update on kind of like, where is cognition now? Obviously like massive launch, huge like going direct moment. Great launch video. And then, you know, you kind of went into build mode. We kind of haven't heard that much from the company. So can you give me an overview of where the products are, where the company is and kind of set some some ground rules for where you are? Yeah. Yeah, yeah, absolutely. So we had our initial announcement.

about a year ago actually at this point. And from then, a lot of it was basically just going through all the frictions of software engineering. You know, the truth is engineering is just so messy in the real world if you think about, you know, what has to get done. Obviously, there's some pretty hard logical problem solving type work that has to be done, but there's also a lot of practical stuff. And so, you know, figuring out how to have a clean experience that slots in, figuring out how to work with all these enterprise customer code bases, figuring out

the capabilities and working with logging and documentation and tooling and things like that. And so for a decent chunk of time, our main work actually was with larger enterprises. So we would work with a lot of these different groups, bigger tech companies, financial services, or things like that, and work with them on a lot of these bigger projects and more repetitive projects and have Devin basically come in and speed up the job for a lot of this stuff. And then in December, we rolled out our general availability. And it's a self-serve plan where you can just put down a credit card and get started and plug in your code base and have Devon.

And we were super, super excited about that, obviously, because it's really the chance for everyone to just get to try it out and see how it is. And it's been a fun last few months for us. It's been a lot of iteration and a lot of growth and so on. We've had users talking about how Devon's now quickly become the number one committer in their code base and so on. And so it's very cool to see. Yeah.

Can you talk to me a little bit about the decisions you made early on on where to kind of put your AI efforts? Like, as I understand it, you didn't train a foundation model. You didn't do one of the massive runs. You work with different model providers. But what considerations were made in the early stage? And are you still sticking with those or have those evolved over time? Yeah. Yeah, absolutely.

So we had, you know, I would say two major bets that we really started the company with. And I'd say the first one was, you know, that reasoning and this whole RL paradigm was going to work. And this is, you know, it was a pretty controversial thing, I think, around the end of 2023, because most of what, you know, the first generation of AI was, or, you know, the first generation of language models was, was more like imitation learning, right? It was basically like read all of the internet, you know, read every Reddit post and talk like somebody on the internet, right? And obviously, I mean, it was pretty incredible. Well, you know, we passed a turning test. ChatGy, but he was a massive, you know, and for a while, all of the work that was being

done and all of the products that happened in particular verticals were much more in that style, which was basically, you know, I'll call it text completion, basically, right? And so, you know, you had these, you had a product like that in marketing, right? You had a product like that for customer support. And similar things for code where it's kind of like, here's the code so far and just predict for me what line comes next, right? I think we had a strong view that, yeah, that this reasoning was really going to work and was going to enable a lot of new use cases.

And then the other thing that we felt really strongly about was that the product experience was going to shift from this kind of more Q&A, text completion style products to basically an agent. And practically, I think what that means is, honestly, I think a lot of folks today still think of AI as kind of a better Google, call it. Like you have a question and you want to go search it up,

you ask your AI and your AI has a better answer, which is big, obviously, I mean, Google's not a small company, right? But I think the actual vision that we're going towards with AI is actually even bigger than that, which is basically your buddy that does your choice for you. And the obvious difference between those two is the ability to actually interact with the real world and do real tasks and so on. And so there's a big difference between having a legal Q&A, for example, versus having a lawyer that can actually go submit things for you, that can go and, you know, interact with all these different surfaces. And the same is, is obviously the case in code, right? Where it's, you know, this is how we build software, right?

It's is you, you write code, you run the code, you see if it worked or not. You run, run the test. You look at the documentation. You know, you click around on the product yourself. And this is how we, this is how we iterate and build, right? And so the ability to do that is a big step function difference. Yeah. How do you think of getting Devin to go from sort of this reactive experience where you talk to Devin like you wouldn't uh you know a teammate or employee and say like hey can you help me sort of execute on this specific thing it goes and does it you know maybe it comes back to get you know feedback at different points to i imagine long term you want the sort of proactive sort of like high high agency agent and how you know i'm sure you guys are already

experimenting with that kind of thing internally but uh you know what are your plans along sort of that route. Yeah, yeah, for sure. And so, you know, the way that we kind of think about it is turning all the brick layers into architects is almost, you know, as how I would describe it. And, you know, I think the really beautiful part of software engineering, I would say, is getting to do this core, you know, problems of solving and decision making around what do you want to build, right? It's like, you know, let me understand the problem. Let me understand what's exactly, what exactly is going on. And then let me figure out, here's exactly the solution that I want to build for this, right? The thing is you only spend about 10% of your time doing that, you know,

as a software engineer in practice, you probably spend about 90% of your time, you know, dealing with your Kubernetes and fixing your unit tests and upgrading your thing to the new version and all of this other stuff, you know, fixing these bugs that come up, right? And so a lot of it is the way I would kind of describe it is working with Devin as as the implementer that allows you to be a really great architect, right? And so there's a lot of detail with that because naturally you have to be in, you know, all the same flows that humans use for software engineering if you want to do that, right? And so you have your logs on data docs. So like, you know, Devin's got to go look at those logs, right?

You're talking about issues on Slack. So Devin's got to be in Slack, right? And a lot of it is really kind of figuring out the workflow where it's very natural and very easy that as you're talking about this idea that you have or this new feature that you're trying to build or this bug that you're trying to fix or whatever. you're able to just tag Devin and just say, hey, at Devin, can you take a look at this and make this fix or do this thing? Yeah. Talk about specifically, I can imagine that Devin, because it's so embedded in these different workflows, you know, there's every single day we see, you know, conversation on the timeline from somebody that says, I'm switching from, you know, this code editor to that code editor or that code editor back to this code editor. How do you think about, you know, sort of long-term moats and sort of lock-in as, you know, you're, you're building Devin for yourself, but then you're also, you know, trying to build it, you know, you're already a billion-dollar company. Eventually, you know, I'm sure you have much, much bigger ambitions,

but how do you think about sort of long-term moats and, you know, around the sort of like software engineering agents? Sure. Yeah. You know, I think in the short and medium term, there's a lot of different experiences in code and, you know, I think a lot of folks building kind of different different product experience for different verticals or use cases within code. I think in the short and medium turns, you know, things are just changing so quickly that the natural thing is just whatever is able to help folks the most is what they're really excited to use, right?

And I think there's just, you know, when the pace of development and also the pace of progress in AI is as high as it is, I think that's going to be to continue to be the case for a while. You know, I think with that said in the long term, I think these things naturally do converge to a point. And there are a few particular pieces, I would say, that really kind of cause that. And one of the big ones that I'll just point out is, you know, there really is a lot of, in most spaces, you know, we would call this personalization or something of that sort. But there's a lot of it in code, right? I mean, if you imagine, you hire, you know, the smartest software engineer in the world and, you know, you get them to work on your code base day one. They're not

going to know a lot of these little details about, here's why we chose to do this architecture, here's what this function does and that function does, here's how you do this database migration or whatever it is. So, you know, they have to learn all these things from the ground up, as opposed to somebody who's, you know, just as smart but has been at the company for, you know, 10 years and built half the code by themselves and, you know, they wrote all of these files themselves and so on, right? Then, you know, you get to a point where you really just understand the code base, you're making the same decisions and tradeoffs and you're working with it very tightly. It's the kind of thing where, and we see this already, where it's, you know, as,

as folks start using Devin more and more, one of the really cool things is, you know, you can have one of your engineers ask Devin a question, and Devin is drawing on the knowledge that it has from all of the previous sessions it has with everyone on your team. Right. And it's able to learn all these things. And, you know, someone says, hey, you know, we got to, we have to go do this, this version upgrade. And Devin might say, oh, yeah, I remember this. I actually just did one just like this, like last week for this other part of you guys code base. And so let's figure out this one and let's do this, right? And so I think there's a lot of, that's kind of the shape, I think, of what we're going

to see a lot in AI actually over the next couple years where, you know, this is a bit of a hot take. But I would say a lot of the problem solving is actually good enough already. You know, a lot of the reasoning of the problem solving. I mean, AI has been shown to be capable solving some pretty hard stuff. I think actually what we have left to do is a lot more so just understanding the detail and the complexity of the real world, right? And you think about all these tasks that we spend our time on, you know, they, there's some amount of problem solving, but there's also a lot of just pulling in the relevant contacts and, you know, understanding what is the common sense, what are the common sense considerations you're working with. And that's a lot of what we spend our time working on with Devon's capabilities. Can you talk a little bit about, like, I have this take that we're almost in an AI winter.

for consumers, even though AI feels like it's moving so quickly, the chat GPT moment was so big because we passed the Turing test that for most average people, it's just Google search, as you mentioned. But over the last year, obviously, if you're following this stuff, there's been incredible breakthroughs. Inference costs has gone way down. Models have gotten bigger. Context windows have gotten way bigger? Have there been particular milestones in just AI research and development that have been more transformative to your business than others over the last year? Sure, sure. Yeah, you know, I think the, at a high level, you know, I think all the continued progress that we're seeing everywhere in AI actually is, is primarily due to essentially like reinforcement learning, RL,

that's really working. And it is a very different paradigm, right, where we were saying how in the past it was all just imitation learning and it's get as much of the internet as you could possibly scrape up and just train on all of it, you know, and hopefully you get something that that knows a lot of stuff, right? Whereas this is kind of, you know, this whole reinforcement learning paradigm is, you know, if you have a clear problem space where you can do the problem a hundred times and you know, this was right, this was wrong, this is right, this was wrong. You know, it's a little bit more like AlphaGo, you know, this self-play learning, but in a language

model, right? And I think that's the biggest paradigm. And, you know, folks like OpenAI, Anthropic and lots of, you know, Google X and so on, have shown a lot of real progress through this whole RL paradigm. To your point on consumer, you know, I actually think that I think that I think we'll probably see a resurgence actually in consumer over the next few months or so. And I think one of the big things I think that will actually flip that switch is, is like a really great consumer agent experience.

You know, there's a, I think, we haven't had the, we haven't had the moment of just chatting with, with this sort of generalized agent that can just book you a flight in a hotel. And it's like super seamless. And like that's like what I feel like we've all been waiting for.

We've had that preview since Siri 1.0 back in a decade ago. And it still isn't here. still waiting for it, but it feels like now it's actually just a couple months away. Yeah, yeah, exactly. It's like, I want to buy this pair of shoes and just go and look on all those websites and find which one delivers and which one is the best price for that and just go buy it for me, right? Like things like that where it's, I think that'll be, that'll be a pretty big moment for folks because you'll really feel, I think, the difference of how.

How did you process the deep seek moment? Obviously that took over the timeline earlier this year. It was, it was very controversial in a bunch of ways, but what was your, what was your deep seek take away from that development. Yeah. Yeah. No, I mean, I think at a high level, it's, it's, it's a competitive world out there. You know, I think there are a lot of, a lot of really smart folks going after this problem. And it's, it's, it's the kind of thing where it's, you know, if you think about like what, what, what people even, not just what was possible a year ago, but what even people even imagined could even work.

One year ago or two years ago or three years ago. I mean, every year, it's basically totally, it's totally flipped, right? And now it's kind of like, everyone in the space is talking about agents in the future of agents. You know, when we were doing this like here, no one really even believed that agents were like a thing, you know? And I think that, yeah, no, I mean, it's the case, I think, everywhere in the stack. And, you know, we'll see, you know, I mean, there's the GPU layer, there's the hardware layer, you know, there's the foundation models and so on.

But I think, I think all throughout the space, you know, you have these really, really smart folks and really smart teams that are going after the problems and basically pushing things forward. I think we're in a very high velocity period where it really does feel like every month in AI is like a year and a lot of these tech industries in the past. And so, so, yeah. How is how is AI adoption? What's been your takeaway from AI adoption within the Fortune 500, right? You see all these companies are spending billions of dollars on like Gen AI consulting contracts with Accenture. It feels like the consulting companies are probably doing.

more revenue from generative AI than like all of the software companies combined, maybe ignore, you know, uh, open AI. Um, is it happening sort of bottoms up? Like an engineer sort of comes to their team and they're like, you know, it's they're, they're in, uh, you know, not, not in San Francisco or New York and they're saying, hey guys, I got this like guy named Devin. He's 500 bucks a month. And like, I think he can do you know, what, what, you know, our next 10 junior engineers can do. Or is it happening more so top down where execs are super, you know, kind of clued in and following this stuff or both. Like we need an AI strategy.

Yeah. Yeah. Yeah. Yeah. I mean, I think the interesting thing with these times is there's a lot of both, you know, and executives, obviously, and boards, for example, I mean, everyone is thinking about how do we get AI needed and how do we make sure we're on top of this wave and how do we make sure we're ready to just accelerate as fast as possible and that we're ahead of the curve on

this rather than being too late on it, right? Because obviously these things are moving. quickly. And then at the same time, you know, it's like you have individual developers and folks like that who are just really excited to use these things. I mean, it's, you know, a lot of these painful tasks, I mean, if you're doing a full code-based migration and your, your code base is, you know, 50,000 files and you got to do the same migration on every single one. I mean, it's not a fun task, you know, and figuring out how to go quicker on those things so you can spend more time on, on the problems that you really care about and on, you know,

figuring out what to build is really exciting for folks as well. But yeah, I mean, I think it's an interesting time for us where it's you know it's it's it's bluntly I mean it's I think most of our waves in tech you know there's always been kind of a hype phase I'll call it and also you know a phase where basically you know this adoption really comes in and you saw the same thing with cloud you saw the same thing with mobile and you saw the same thing with the internet itself right and yeah I mean I think it's an exciting one for us because I think with AI I mean I think the I think of anything you know I think the capabilities and I think what will be possible in AI are just getting exponentially better and better every year.

But I think what I would say is, you know, I think there's a lot of different, there's a lot of different areas, you know, of generative AI where it seems very clear that's like, this is getting better by the month. This is, you know, this is clearly going to work soon and we want to be, you know, ahead of our time with this and get, get ready for this. And, you know, there are a few spaces, I would say, and code is one of those where it's, you know, this is actively working right now. I mean, if your team is not using any AI code tool, you are just heavily behind.

Right. And so it's kind of interesting. And I think we'll see each of these kind of come online at different points in time. And I think there are a few reasons why code is one of the first to really get there. But, but yeah, yeah, it's going to be an exciting few months for us. What advice would you give the young Scott Wu, you know, the younger version of you that's learning, that's just starting to learn to code? Yeah. And how do you sort of fast track to be kind of at the bleeding edge?

obviously you can learn from the models themselves. They're great sort of instructors. But I think we went from this period where maybe a year ago, everyone was like, oh, all the software engineers are cooked. They sort of like made their own replacement to now. It's very clear that if you're a software engineer today, you have a massive leverage than ever. You have more leverage than ever.

And you have this massive sort of edge because even if eventually all this work goes from code to natural language, you know, there's still this sort of. it's possible to be on the bleeding edge. But how would you, if somebody's sort of 22-year-old coming out of college today, what would your advice to them be? Yeah, for sure. No, I mean, I really think we're coming up on the golden age of software engineering here.

And I think the main thing, you know, as we're saying, I mean, I think it's always going to be up to us to decide what to build, obviously, right? And a lot of the core of computer sciences, I would just just say is that question of understanding and deciding what to build. And so if anything, I think the theory of computer science is going to be even more valuable, you know, understanding the layers of abstraction and knowing, you know, the basic model of how computer works and how to break down problems logically and how to reason with these systems is going to be, you know, even more valuable. The other side of it I would just say is there's no shortage of demand for software, you know, and one of the things that I think about all the time is like, you know, I think today even still, it feels so outlandish, but I think a couple years ago, a couple years from now this is going to be commonplace is. single use software actually, right? And, you know, you can imagine a world where it's like, hey, you know, I got to go look at these,

these 10 LinkedIn profiles today and I got to click through each of these and I'm looking for this and that and whatever. And, you know, I've got to go like research and get a bunch of data online and then put that into an Excel sheet and run some numbers. You know, a lot of these things are naturally code works just as well for these tasks, if not better, right? But obviously, it makes no sense at all to go hire some engineering team to go build you, you know, this massive script that you're only.

going to run one time for this use case that you have today. But I think we will get to a point where basically you can just ask Devin, hey, here's the thing that we need to do. Let's just go build this real quick. And software will do that for you and we'll solve that problem for you. And I think there's just, you know, there's there's so many more products out there to build. That's the main thing that I always index on. It's crazy to think about, but I think it's like, you know, you can imagine all these products out there that are niche products for a thousand people or 100 people or even just for you. But, you know, they have the level of quality of the level of execution as, you know, the biggest products in the world today, you know,

YouTube or Instagram or whatever it is. So. Yeah. Talk a little bit about, you know, there's been a bunch of these, sort of platforms, apps that have popped up lovable.com. I think bolt.bilt.bore. I forget what it is where, you know, these sort of products that allow you just generate an apps immediately and they're showing this tremendous revenue growth. you guys seem to have focused on the potentially much harder problem of sort of building durable software products. But is there a world in the future where Devin goes more downstream and is actually, you know, somebody comes on and creates their very first, you know, application ever with Devin because,

you know, I see a lot of these companies pop up and I have no idea what their long-term roadmap is. But I can see why it's easy to generate a lot of revenue quickly to just generate apps or generate websites. but then, you know, maybe that's not, you know, the, you know, it feels like potentially a good wedge, but not a super durable business necessarily, which is like, do I need to generate a new app every month? Like, probably not, but maybe, you know. Yeah. Yeah. No, I mean, I think a lot of different product experiences in the space for sure. I think the way that we've always thought about it is, you know, I kind of think of self-driving as the parallel where it's, you know, there was, first it was all manual and then eventually there was, you know, there's automatic

shift, right? And then there was cruise control, there was auto park. And basically, I guess, the kind of, the thing that I would point out here is, you know, up until the point where it was true, full, you know, it could do every single thing you wanted it to do, you still needed a driver's license for all of that middle era. Right. And, and, you know, there was a point at the end where it's kind of like, yeah, you could just sit in the backseat and just have the car do everything for you, right? And so I think we kind of have this similar paradigm, I'd say, in code, whereas maybe, maybe not so, maybe not as much of a kind of like single step function switch, but you kind of have this gradual spectrum where, you know, there are a lot of tasks, I think, where, you know,

like you said, building a cool website or something like that, where it's, yeah, you know, you don't have to have any experience with code at all. And now you can just do this, right? And then I think there are a lot of these kind of like larger and more complex tasks, you know, working on a big code base or figuring out things with your existing product or, you know, building, as you're saying, like a lot of this really kind of these bigger projects where, you know, you still want to be an engineer and you still want to be really deeply technical, I think, to be able to make the most out of these AI coding tools and to use that. But with that said, I mean, I think that every month the capabilities change, right? And I think there will be a time, I think,

where you're able to, it's just as easy as kind of looking at your product and talking in plain English about what you want. And that's it. Do you like the innovator's dilemma framework? And do you think AI is more in the sustaining innovation camp or disruptive innovation camp? There's been a lot of debate about this, people comparing it to mobile, where the really large companies were actually the best position to take advantage of mobile. A lot of people are saying Google, even though their product roadmap has been a little lumpy, they still have amazing talent, amazing hardware, amazing software, lots of talent to kind of reap the benefits of AI over the long term. Yeah, yeah, it's an interesting one. I mean, I think there's going to be a lot of interesting

second order effects. And, you know, one of the, maybe the most obvious ones to call out is, is basically A lot of these switching costs, you know, that exists, especially in these B2B businesses, are just going to go way down, you know, and I'm sure we could all think of these companies that, you know, they only really thrive today because it is so painful to switch off and to migrate off, right? And I think that's going to change a lot. I think on the other hand, I think a lot of, as we're saying, you know, this deep personalization and, you know, the ability to use data and to really build customer experiences for your users or your customers. I think that is going to only become more and more powerful.

And so I think long story short is, you know, I think that a lot of the existing great businesses are going to do very well in the age of AI. I think there will be, you know, in the neighborhood, I would say, of kind of like, you know, the 10 to 20 power law businesses of the new ones that come up from AI. You know, I mean, I think we already kind of see it's there's the foundation labs themselves and then there's some of the, you know, each of the big verticals of the application layer, right? code, there's law, there's customer support, there's sales and so on, right? There's image and video. And I think there'll be kind of like, yeah, like a handful of businesses kind of from each of those categories. I think that that really make it to the really massive outcomes. But yeah, I mean, as is always the case with these things, you know, a lot of it is, it's very hard to know in advance which ones will be the winners. I do think that, yeah, I mean, I do think with the richness,

I think of the space of AI, you know, I think one of the big differences is, is, There's just so much difference in technical execution, where it's, you know, you can, in AI, you can be doing things that other teams or other products just cannot do, right? And I think that difference kind of means that I think really great, really talented, new innovators will have a meaningful edge and the best ones will be able to create some. What's your take on the various walls? There's been this, you know, deep learnings hitting a wall. Scale might be not all you need.

Now it's everyone's pretty scale-pilled. then we got in the reinforcement learning paradigm, as you mentioned. Are you worried about a data wall or an energy wall or just some sort of wall where we hit and we kind of stagnate and we're not seeing the like the breakthroughs and the acceleration that I think people are kind of expecting if you're following AI closely. Are you worried about any of those walls? Yeah. So I actually had the opposite take, which is in some ways optimistic, some ways pessimistic.

But what I would say is how stagnation is actually the default, you know? By default, it's not the case that we're going to have this, you know, the next thing. And I think we've kind of like, we've felt it for so long at this point that it's like, yeah, the next model is going to be even better and the next product is going to be even better. And the next GPU is going to be even better. But I think more of what it speaks to actually is kind of the, just, yeah, how amazing the kind of the flow of innovation is. You know, it's like, and just to give simple examples, I mean, it's like, you know,

GPT3 wasn't just more of GPT2. like, you know, it was a step function different and there were a lot of things that had to be figured out. And GP4 wasn't just more of three. It was like, you know, and the same is true, I think, with reasoning. The same is true with the advancements that we're making in hardware. It's the same is true with the advancements that we're making the application there. So in some ways, it's kind of, you know, I'm saying it's like there's no single kind of like force of nature that we get to rely on where it's just like these things will get better all on their own. At the same time, it's, it's, it's truly remarkable, I think that over the last few years,

you know, we have, we, we, we, we, we, we, we, we, we, we, we, we haven't slowed down and, and, and the new innovations and, and the new categories that will get us there. So, what is, uh, what is, uh, one thing that you learn from Eric and Kareem, uh, from your, from your, from your, from your, sort of ramp days that you feel like you, you, you, you've really focused on, uh, making sure that you guys implement at cognition. Yeah. Yeah. You know, it's a, they, they've, I've, I've, I've, I've, I've, I've, I've given me a lot of incredible advice. I'll share one, which I think was hilarious. We were just getting started, and I called Eric, and I was like, hey, you know, we're starting this company. Obviously, like, ramp is incredible. I have so much respect for you and what you built and just want to get

your thoughts on basically, yeah, what is the thing that I should really, that I should really focus on today that I'm not thinking about right now? And Eric said, you know, take a lot of pictures. It was, I mean, it was actually great advice. It's funny because, you know, I would talk to these people and all the, you know, they would say, oh, you know, you got to really nail in on hiring and you got to really like figure out these. And all these things are also true, obviously. And Eric has helped with all these other things. But I found that funny that that was the first, you know, the day the company's found it,

don't forget to take those pictures. And it's like the, you know, it's only been, I don't know, 15 months for us, right? But it's, I am actually really grateful that that we have those and that we did that. And I think there's a lot of things where it's just, you know, just being in it and going through the experience and knowing what you miss and what you don't miss. I think Eric and Cream understand that better than anyone, honestly. Well, thanks for joining. It's 130. We won't take any more of your time. Where can people sign up and who should, who's kind of the wheelhouse client right now? Yeah, yeah, for sure. It's Devon.a.i. And anyone who's, you know, I'd say

engineering teams all over the world. So, you know, we have teams that range from one or two-person startups all the way to the biggest financial services firms in the world. And so, yeah, we would love to hear folks feedback on Devin as they're trying it out. Awesome. Thanks for joining. Thanks for coming on, Scott. Thank you guys so much for having me.

Have a good one. Have a good one. Very interesting. I always love talking to an AI founder. There's so many things that you can peel into. We didn't even get into AGI timelines, P-Dome, all the fun things that you can go from there. What? Oh, Charger. Here you go. And we're in, we're in demand today. There are multiple guests trying to call in right now.

We can only let one in at a time. Or maybe we could do a debate between. Do we have two guests scheduled? That would be cool. I think we have, yeah, should we do a VC and a car dealership guy at the same time? I think there might have been some confusion over scheduling. But let's try and let in. Well, there's two people in the waiting room right now. We're not sure who joined. we want to let in the car dealership guy because that's who is scheduled next. Hopefully we can get him in the temple of technology and pick his brain about what's going on

the car world. Should be a fun conversation. But we got to figure out some some Zoom details. Yeah. At this point I think that. The entire, entire like stream infrastructure right now is just melting down. Melting down. Yeah.

We're pushing this to the limit, folks. We're building the plane as we're flying it. But I think we're having good streams back to back. It's been a lot of fun. And I like these little conversations. Take us on a little tour. Go over into the finance land with Joe, drone land, defense tech with Soren, some AI with Scott Wu. Now, some car dealerships.

Hopefully. Ben, how we doing with the car dealership guy? Is he ready to come on down to the Temple of Technology? He left. He said, trying to join. Why? you send him another message and I will pull up some info on this on this card deal. Oh, he said he does a lot of these stuff.

So he says we didn't let in his main camera. Oh, he has two cameras. Okay, okay. Well, let's see. Nissan has a profitability problem that is determined to fix how a mix of product, pricing, and placement. Interesting. Honda is sidestepping some tariff,

uncertainties by reworking its battery sourcing strategy. Beginning in April, Honda will source hybrid batteries for nearly 400,000 vehicles from Toyota's $14 billion North Carolina plant. He's in. He's in. Hey, can you guys hear me? Yeah, we can. There he is. You look fantastic. You sound fantastic. Welcome to TVPN. Over here. That's the least I could do if this is what I do all day. This is fantastic. Great, great to have you here. Can you kick us off a little, introduction what do you do what's your name who are you well it's great to be on the on the fortress of finance thank you yes um no i'm so i'm the founder of car dealership guy you've probably seen me on twitter if you're listening to this right now uh we are the leading content news and insights

platform for car dealers cool uh didn't start that way we were very consumer based but it's been you know a couple years where i've really um just shifted to focusing on the industry and today you know we're pretty much, you know, offering anything for dealers to come and, you know, learn, kind of stay informed, get ahead, really just trying to make a better industry with the kind of ultimate vision that if we can, if we can create a better dealership experience and educated dealers and, you know, kind of democratized knowledge, then the consumer experience would be better and everybody wins. So that's kind of like the utopian vision. I know very little about car dealership.

So I bet my questions would be silly. Maybe give us the crash course history, your personal history in the industry leading up. to this because this is not not the kind of business that you start you know just because you had a good good ex account uh i imagine you you experienced a lot of the you know the the turmoil of the industry and the good and the bad yeah so it's quite the opposite but i'll give you the short version so i was a dealer i grew up in use car business uh father had a small use car dealership so that was where i spent most of my time in 2018 i got the bug i said there's no way that we're still selling this way, right? Everything's done online. Why do I have to, why do people have to come

my dealership? You know, why can't I expand virtually and whatnot? And so I took this traditional dealership and I said, we're going to build a better way to buy a car. We're going to do it 100% online. At the time, Carvana had just gone public, but it was still kind of like a nascent thing, you know, kind of selling cars online. And so I actually raised capital and we transformed to do a venture backed online auto retailer. You know, we started building out our own website, our technology, our platform. And I spent five years doing this. So we were completely vertically integrated this entire time.

So as we were building this business, you know, we were acquiring the warehouses, building up the logistics network, and actually retailing vehicles online from what was a small use car dealership. It was a crazy experience. I mean, you know, we raised lots of capital throughout the time and grew the business to close to like $100 million in annual sales. And end of, I like, I was a lot. I want to say it was 2021 when rates started rising.

You know, we kind of, things are really tough. We spend the next 18 months, you know, we couldn't raise more capital. Business was obviously, you know, the burn was accelerating. And we kind of had this like existential. We're facing this existential, existential point in our life. And the next 18 months were just brutal. We ended up shutting that business down. We tried to pivot to private equity.

We almost got acquired, but that didn't work out. And in the meantime, I sort of had this like, you know, anonymous Twitter account where I was just tweeting, you know, just trying to stay sane, be able. a little creative, but really just sharing kind of my thoughts. And it blew up like crazy, right? So I don't remember when I launched a Twitter account exactly. I think it was like early 22. For anybody just on audio, he's got almost half a million followers on X, which is the equivalent of 50 billion followers on Instagram. Pretty much. It's a big, big. Yeah, I mean, it was, it was definitely very like, you're right. It's, it's very difficult to, today it's completely much more

difficult, I would say even, unless you're putting out slop. But I mean, like high quality followers is a very tough thing to do. Right. You got to put an insight. But that's essentially what I was doing. I was just sharing my knowledge and experiences that I've gone through. And then after we ended up, we ended up closing down the business completely. This was like, you know, like I said, 18, 21, 24 months later, I said, I don't exactly know what's in store for my next thing, but I do know that there's a thirst for this knowledge. Right. When I launched this account, people didn't understand what the hell is going on with prices and inventory was all over the place. And it wasn't just consumers.

It was dealers themselves as well. And so I said, there's something here. And so I formed a B2B media company. And we can talk about like I went down to hold coal route and you know, all that stuff that Sean Puri spoke about on your podcast other day as well. We can talk, talk chat about that as well. But that was essentially how I fell into this business. So I went from like a traditional family business to a venture back to tech business, right, raised like, $60 million and all that hoopla.

And now we're like a bootstrapped media brand. It's completely different things, but it's been a fun, fun learning experience. Yeah. Yeah. So one of the reasons I wanted to have you on now is just to get a sense of, you know, really on the consumer side, how are, how are people behaving in the market? What are the, you know, you guys get a lot of data from dealers that are, you know, in your community.

And I think it's a good signal of sort of how consumers are feeling. It's obviously sort of this like shaky time broadly in the market. But how are dealers doing broadly? What is, you know, consumer sentiment looking like? And then I want to kind of get into some individual brands and, you know, potentially ask you about the EV market and some other stuff as well as later. I'd love to get your thoughts on the war between, you know, platforms like bring a trailer and cars and bids and all that stuff. But maybe start with kind of a market update.

what's happening sort of on the ground today? Yeah, so look, the market has been, I would say, very consistently improving and just becoming more pro-consumer, right? We're definitely in more of a buyer's market today, although it's still very divided. Like, if you go to a Toyota dealership, they are still at like 30 plus day supply, which is roughly half the level of supply they should have for, you know, current demand. And so Toyota and Lexus are sort of the anomaly here. I'd say the majority of the brands out there are oversupplied right now, which is simply a good thing for consumers.

Because it means you have more negotiation leverage and means that brands will put more incentives on these vehicles so that they'll sell them faster. And I would say they're roughly like 30% oversupplied. So it's not, you know, these numbers are not low. We're sort of in this phase right now where it's the incentives are only going to keep getting better because the reality is the inventory is out there and it needs to move. Now, it is spring season, which is typically a pretty good time of year for dealers, right? People get it most people are getting their tax refunds and whatnot and they're going shopping. So there has been a bump in business over the last couple of weeks. But, you know, other than that, I mean, I don't expect the spring bump to last that long and never really last that long.

And, you know, it's a very temporary thing. When is the best time to buy a car? Go ahead. Oh, yeah. When is the best time to buy a car if you're a consumer and like, are there any like tricks to get a good deal? It feels like a very opaque process. Everyone asks that question. Look, yes, you might get luck out if you go like, you know, end of month, end of quarter.

Because there's these things called stair step programs where, you know, it's like, hey, you sell, I'm just making it off 100 cars. You'll get an extra, you know, X amount of dollars as a dealer, right? So if I'm trying to get that stair step, you know, if I'm trying to unlock that, you know, that benefit from the deal from the automaker, then I'm going to maybe even sell a couple of cars at a loss at the end of the month because I want to hit my number. Now, many, many factors have moved away from those. Many dealers don't even participate in them. But yes, I mean, in theory, you could do that. I would honestly tell you that a better way would simply would be to simply see what brand right now is most oversupplied. Now, you might not like that answer because maybe you don't want to drive a, you know,

an infinity or whatever, you know, the most oversupplied at that current moment. But reality is, like that's where you will have the most negotiation leverage as a consumer. Yeah, that makes sense. That makes sense. What, you know, Tesla as a stock has been down tremendously over the last month even. I think it's down like 35%. As, you know, at the same time, we're seeing more than ever on the roads. But they're, they're obviously, you know, the stock pressures in part, there's probably a political angle. There's a, you know, broadly, the sort of moat they had around EVs has been eliminated as other manufacturers have entered. What do you see in store for, you know, Tesla? I know they're verticalized. You know, there's not like Tesla dealer owners on your platform,

but what is the future of the Tesla brand in the near term in your view? You see sales performance, you know, continuing to slide or is there, you know, John has joked a lot on the show, obviously, you know, completely joking that like they should come out with a gated manual transmission with a combustion engine. Naturally aspirated V12 ideally in the roadster. The roadster has been delayed so much. Let's just put a carbureated V12 in there. Let's get the Kuntash engine in there. Look, I think first if you look at E-Bs in general, right, the pendulum swung too far over the last couple of years. So these manufacturers had all these crazy proclamations, right? We're going to do X amount of EVs, you know, or whatever X percentage of our production will be EVs and sales.

And the problem was that EV demand simply was way behind. So like Ford was the prime example where they were kind of producing all these vehicles and people didn't want them, right? Now, demand has been growing very consistently and linearly. Like it hasn't gone exponential. Like, their demand is still growing if you look at simply, you know, how many EVs are being sold. But relative to the supply that was produced and what was out there didn't make any sense. So what happened? Well, all these crazy incentives started happening. And all the legacy automakers started to sell all their EVs. But again, they didn't sell them because there was the demand out there was, oh, why, this is such a great car.

I wanted. They sold it because, wow, the price is so incredible. This is all I can get. Or maybe this is simply the cheapest monthly payment in the market. I think we forget like how, you know, consumers are practical, right? Like I have a budget and I need to fit into my budget. And if an EV is going to get me within my budget, I will consider an EV. I don't care.

Like the average American doesn't care if it's an EV or a gas or it runs on freaking water, right? They need to be able to afford something. So I think that's kind of what happened in the big picture over the last couple of years. Now, look, there's no doubt about it that Tesla has some of the most incredible technology. I don't think the I don't think the actual interior is anything you know extravagant. It's actually pretty basic and in many cases so par, but the tech is incredible. The driving is amazing. I love driving Teslas.

And I know that many dealers that I personally know drive Tesla's themselves. Many do it just because they want to, you know, see what it's like. Others just do it because they genuinely enjoy it. And so I think that there's the EV market has been very volatile. You know, the swings have been very very. just very rough up and down. I can't say like I'm too concerned long term. I still think that it's going to continue rising very slowly. I think dealers that put focus on it and make the investments to serve more EV customers will do well. Obviously, it's market dependent. If you're in

the Midwest, it might be 10 meters behind because they simply don't drive as many EVs out there. But in general, I think it's still a smart investment. Tesla stock price is just, it's so hard to know, right? Because like what is even driving that? Is it like the Elon political like, you know, like overhang? I mean, there's so many factors going into that price, the price of that stock. And so it's really hard to tell what's next for it. But I would I would sort of kind of, you know, quiet out the noise and I still think that we're, EVs are going to continue rising, albeit a lot slower than anyone has predicted and expected because that's just how, you know, consumer adoption takes time.

outside of Tesla who's on a tear and who's in trouble in terms of the big car brands right now well you know i actually just had um one of nissan's top executives on my podcast today his name is um um i forget shahani is the last name i forget the first name but long story short is nissan is in trouble um or they've been in trouble recently right they've been really losing a lot of money veney shahani that's what it was so they basically nissan has sort of been the culprit here um and you have to understand the auto business is very it's you know it it just it cycles and it comes and goes so like if you look at 21 it was like Ford was in the spotlight like they were in the penalty box then the last couple of years it's sort of been stalantis right Chrysler Dodge Jeep RAM you know now

it's sort of Nissan because they oversupplied their vehicles dealers are not making any money on them there's way too many dealers for the market share that the brand has and on top of all that because they're oversupply because they put all because they've been selling these you know wholesale like rental car companies and whatnot. All the consumers are left with lower residual values, right? So now the Nissan that you purchase is worth a lot less. So you're pissed. You don't want to buy another Nissan. I think loses value very quickly. So they're probably, they're one of the brands that's really struggled recently. And all that, you know, is sort of accompanied by sales decline. But they are, you know, they have new leadership in place. And, you know, the hope is that they're

going to kind of come out of it. I, I think that their leaders are very convincing and have just because I haven't spoken to Vinay on the podcast. I mean, he sounded like he knows what he's doing. I mean, the guy's been around the block, worked at Toyota, very, very smart and sharp. But it's not an easy thing to get out of. I mean, do they have the resources to really get to get, to get, claw back a significant amount of market share so that the brand is sustainable? Or will they have to do some merger? Like they tried to do with Honda, which didn't really work out.

And because of that, they actually ended up switching CEOs at Nissan corporate. So that's one of the brands that's struggling pretty bad. You know, Infinity is included in that as well. It's infinity is under the umbrella. But for the most part, I would say like that, they're probably the biggest, the biggest corporate right now in the market. Talk about the durability of the dealership model. You know, your audience, a lot of people that are working in the industry, working at dealerships, obviously. But, you know, you had a, you know, S&B dealership, then you had a venture-backed, you know, online.

you know, car sales platform, something about cars, it feels like the sort of final boss of e-commerce and that, you know, with a car, you're going to spend a lot of money. It's one of the most expensive purchases outside of your home. And so it's really nice to just go to the deal. You know, I like going to a dealership, even if I'm not actually, you know, necessarily in market just because it's fun to look at cars and stuff like that. But, you know, do you see 50 years from now, are we still going to dealerships to buy cars? My personal bet is yes, because I would rather, even if, even if an online platform says, yeah, we'll send you the car, they'll put it up on a truck. You can drive it. You can buy it there

if you want it. I'd still like to go and just see more inventory, right? And experience, you know, more vehicles. So what's interesting is, I mean, I learned so much selling cars online, like strictly online. First of all, I learned that online car buyers by a large percentage, are subprime car buyers, right? Subprime consumers. They can't otherwise get approved anywhere else, and this is sort of their last resort. Carvana, CarMax, have built such a great mousetrap that it's attracted customers who are also not subprime, right? And I would bet you that if you looked at a graph from when they started till today and just how their customer mix evolved, I would guarantee that, you know, it started out a lot more subprime than it is today.

But, you know, that's an example of a brand that's involved. So look, the deal The dealership is evolving. There's no doubt about that. And if you're a dealer that doesn't think that, your head is in the same. People, what we learn through COVID and after COVID is that people still want to interact in person with a dealer. And it's not for the purpose is necessarily being with the dealer, but rather you might be making a large purchase. You know, you want to go in. You want to talk to someone. You maybe want to test drive that thing.

I mean, there's several things you want to do in person. And so the dealer is simply going to continue evolving just to meet the needs of the customer. There are certain things that the dealers are going to do, which I think are very durable, such as service. The service department is the highest margin profit center in a dealership because, you know, for those that don't know how dealerships work, right, you have many different profit centers. You have parts. You have new car sales, use car sales, service. Service is the highest margin, you know, revenue stream in a dealership. And that is simply something that, you know, won't go away.

You're always going to need to get the vehicle service somewhere, even if it becomes more fleets, right? If we have all these autonomous vehicles on the road, they're going to need to be service somewhere. Or if it's sort of like Turo where people are actually acquiring fleets, that will need to be service somewhere. So service is a very, I think it has crazy kind of staying power and it's not going to go anywhere. And the margins are strong. I think new cars is, it's tricky, right? Because if you look at supply levels right now with new cars in the market, we're not right. We're not quite at 2019 levels yet, but we're inching up.

Many dealers are already breaking even on new cars. you are depending on the brand. Some are taking losses. And so new cars has never been like a real profit center, right? It's a commoditized product. The good thing about new cars for dealers is that it brings the customers back. So if you lease a new vehicle, then they come back to you for service, right? Maybe they trade into a vehicle. Then you sell it as a used car, right? You get another client. And so the dealership is going to continue evolving. AI is completely shaking up things now. I would say for the better, if anything, for dealers, because they're simply able to offer a better experience, offer more targeted products and services for customers, waste less time.

Consumers are getting a more consistent experience. So AI has definitely been doing a lot of good, but it's just moving all so quickly. And we don't really know if dealers will become, you know, kind of new car fulfillment centers eventually. And just, you know, then you'll also do service there and maybe buy some use cars or what that future really looks like. I don't think the dealership model is going away other than the fact that lobbying is super strong and all that.

Like let's put that aside for a second, even though it's a super important. I simply think that manufacturers sometimes underestimate what it takes to be a successful retailer. You know, do they really want to carry all that balance sheet risk on our inventory risk on their balance sheet? I mean, there's many considerations and it's been, you know, tried many times. And frankly, Tesla is the only one that has really done a great job at it. Or sure, maybe Rivian as well. But there's been other plenty of examples on the legacy side that they simply have not been able to do it successfully with launching like a DDC or something,

direct consumer or something like that. On the service side, are there exciting robotics companies that you think are going to get meaningful traction in the service departments of these dealerships? I imagine, you know, we cover the robotics companies, the 1Xs, the figures, the Tesla Optimus, things like that. You know, I'm not convinced that humanoid robots are going to be the ones in the sort of service base doing the work, but maybe it's... They already are.

They are well, not doing the work. So I actually invested in a company called Robo Tire, which went out of business. So that wasn't a good one. But they were literally replacing tires on, they were replacing tires on vehicles in like, I think Firestones or something. I guess the economics didn't work out there. But there's a company now, a robotics company. And I shouldn't say now, I'm pretty sure they're public already.

They're part of a bigger company called Rich Tech, which I had them on my podcast. And they're literally transporting, they're literally transferring parts in a service. center right from the parts counter to the technician. And this is live. You can literally see rich tech robotics. It's pretty incredible. But again, saves a ton of time. Think about it. To technician, you know, these are skill trades. Maybe you're making like 50 bucks an hour. I don't know how much you're making. And to go each time grab the parts. I mean, it's it's extremely inefficient. And so these robots now are in service centers, transferring parts. I would say, you know, I'm a fan of like the whole, you know, vertically integrated kind of low NPS high margin.

I think I think Keith Rob Boy is the one that spoke about is I think. But, you know, asking yourself like what is the, you know, what part of the business has the lowest NPS and the highest margin? That's right for disruption. And it's pretty crazy how true that is because if you look at the car business, the lowest NPS in our business, you know, net promoters score is actually service, right? So the service department. And it's used car auctions. surprisingly. Now, auctions are dealer to dealer, right? And those are also extremely, both are high margin businesses. Now, if you look what's happening on those two fronts, we're seeing a lot of

just attempts at disrupting those two different businesses. So on the auction front, you're seeing all these kind of auction substitutes that have spawned up over the last couple of years. You actually mentioned a couple right there, bring a trailer, for example. Yeah, I wanted to get your kind of opinion. And by the way, that's not new bring a trail. They've been around for a while. No, no, I know. But they've gotten a lot bigger. Yeah. But just to kind of finish my thought there, so the point, bottom line is like you're also seeing a lot of disruption in service now, where all these AI companies are trying to create tech for dealership service departments to make them more efficient, more profitable, the better customer experience. And so I think that that's

going to kind of work itself out over the next couple of years. That makes sense. Talk about the used online, use car marketplace, specifically around collectibles. I don't have a good read right now on market share between, you know, I've had success on Bring a Trailer. Every, every car enthusiast, you know, looks at the platform and they're like, somebody needs to disrupt this, right? It's, it's got a great community and this sort of rich data and history, but the actual experience, yeah, it feels very dated. Cars and Bids has this sort of amazing YouTube driven marketing engine and Doug Demuro. What is, who's winning there right now? Do you feel like cars and bids? is gaining a real foothold.

It's once you actually get it working, it's like the best business ever because you don't have to hold inventory and you're just clipping fees over and over and over. But it's certainly highly competitive. You know, it's crazy that you said that. It feels like it's aging because I just spoke with a dealer maybe like three days ago

who just discovered selling on Bring a Trailer. Like let that sink in. Not like it's like it's crazy how adoption in this industry with, you know, these auctions. I mean, it just takes time. because people are, you know, how are centered away, things are working. And these auctions are like the original network effect, right? If you think about the auction is all about how many people can you get.

Can you get the highest concentration of the right type of dealers, right, the right buyers to purchase? Now, again, bring a trailer is consumer facing as well. So that's different. But you still need that really, you know, high concentration of the right shoppers to the buy. So look, my take is that I think, I don't know the specifics behind cars and bids today because it's evolving and bring a trailer. I can tell you like anecdotally I hear about it the most from dealers. Take it for what it's worth.

It just, you know, if I tell you what's the buzzed, it's, I always hear your dealers mention you bring a trailer, bring a trailer. I think that it's going to it like it's unclear to me how the these brands, not bring the trailer, but like the up in commerce that came after like cars and bids. It's just unclear to me how they, how they could maintain their margin long term and avoid really losing their business to the bigger players like the bring a trailer in the market. Because I just don't, like, you can only pump so much demand from your, you know, having a, having an audience is great because you're able to, you know, send over demand and community and all that to your product.

But that's not sustainable. At a certain point, you have to kind of, you know, the business has to stand on its own feet. And, you know, that might get you started. I don't know how far that takes you. So I think the real question is, you know, are they able to really solve a problem in the market in a unique way long term?

I don't know. Like I haven't bought on cars and bids. I've played around with the product. But I just, I don't know if there's enough, if there's enough demand for all of these. Because they're not the only ones. There's other ones that have popped up. It's sort of like,

yeah, and the real network effect would bring a trailer for those that aren't familiar is it has the longest standing. you know, most active community. And if you're a collector and you have a unique car, you want to get it in front of the biggest possible audience to get the best possible price. And Bring a Trailer has so much leverage

that people will sign up their car to sell and it won't even necessarily be slated for auction for months sometimes. And so Cars and Bids has an opportunity to say, hey, we'll list your car next week. But then the challenge is if they don't have the same level of, you know, collectors on the platform, you're just not going to get the best price. So they technically offer the same service, but they offer a worse service because they won't necessarily get the best price.

It's still just a fantastic go-to-market strategy to seed a marketplace with a huge YouTube audience. But yes, there's the question of like, how do you grow from there? You are kind of Tam constrained. He only has a few million viewers and only so many of those can actually convert out of the platform. But, I mean, he's done a great job just going full send and every single video. I would say the biggest physical auction or traditional auctions, what they've done, is, you know, they've integrated other businesses. Now, I'm not telling you here that they've kind of given up on margin on the sales front,

but, you know, they become, they become lenders, right? So they floor your cars as like a line of credit. They do other services as well, which helps you kind of, you know, build a mode around your business. But it's just, it feels like every automotive YouTuber that gets an audience, runs to like launch this, you know, auction marketplace. And I just don't know how many of those will really have staying power long term. Or if, you know, it's going to end up being kind of like a winner takes haul

our winner takes most. We will see. We'll have to check in with you in a couple months and see how it's held in. Yeah, anytime there's big car news, it'd be great to have you back on to break it down. This is fantastic. Thanks so much. Now, you guys are doing great work. Seriously, you guys are definitely cutting through the noise.

And I can tell you, it gave me a lot of like early CDG vibes when I, like, you put all that like breaking new stuff the other day. And like, that's how I got started. People just started sending me shit. They're like, oh, by the way, this dealer is out of business. And I just started posting that. People were calling me like the gossip girl of automotive, which I never wanted to be. But it's a it's, it's this thing where like all media in the future, in my opinion, or the winning media will be like expert led media, which is sort of what you're doing here.

You know, you're in the game. You're bringing people that are in the game to talk about things that are relevant to them. So I think it's really great. And it's exciting. Well, thank you so much for joining. Thanks for stopping by. Great to hang. Thanks, we'll talk soon.

We'll talk to you later. What a background. Very interesting. setting. Setting the bar on backgrounds. Totally. Oh, yeah, yeah. I mean, fantastic. Clearly. Him and Joe. Yeah, both. Both. Both. Both. Both. Both. Last week. Yep. You can tell, like, the early stage builders who aren't just on the podcast

circuit constantly, you know, you get a little bit more plain background, but they come with a different set of insights, you know? That's true. That's true. So we got, uh, we got a, we got, some breaking news. We got some breaking news, I believe. I got to pull this up, but we're going to get Chad buyers. Let's go. here he is um yeah so he should be in the waiting room any second hey how you doing chad what's up what's up welcome to the show welcome to the temple of technology how you doing doing fantastic that's great uh good to see you good to see you guys too i before before we dive into it i got to highlight some uh facts for you so uh until the 20th century chad was rarely used as a given name it first entered the top

thousand names for male children in 1945, ranking at 997, actually peaked in popularity in the 70s reaching rank 25. But now because, you know, it comes with so much symbolism, it's now 1600 on the U.S. birth charts. And I was telling John earlier, you're a Chad, like by sort of definition, right? You're, you're slinging checks, you're very grinding on the fitness front. You're sort of skiing an exotic destination. I feel like there's an incredible, we talk about nominative determinism on the show. And it's almost like your parents blessed you with that name. And now you're now there's not a lot of new chads entering the market. You almost have a monopoly on it. I just wanted to give you a little hat tip for that. So that was the best intro I've ever gotten to

something. Let me give you, let me give you a. funny data point though. Please. I'm named after two people. One is my great grandmother, who is Granny Chatham. Wow. And the other was a gay wallpaper salesman

that my mom fell in love with when she was pregnant with me. Wow. Wow. So talk about what I was supposed to be named after and then my fall from grace as, you know, Chad was dragged to mud as a derogatory name. Yes. Yeah.

And, you know, then gigacad and, you know, all these things kind of, like, came out. So it's not lost on me that I've unfortunately kind of like grown into the exact stereotype in a way. No, but you rode the, you know, it's like the Masa, you know, the Masa famous Mossa slide where like it's like the trough of disillusionment. Trough of disillusionment. And then you came out of it. Now you're, you just get to be a giga chat. But great to have you on the show. You've been a long, long, I feel like a long time supporter.

So thank you. And you got some news today here? Yeah, yeah. So big news. Like we just dropped this a couple minutes ago, but we are announcing Susaventures 5. So this is our fifth early stage fun. I'll talk a little about what we do as a firm and everything. But wanted to drop in here, new media.

You guys are. Hit the size gong. Boom. There we go. What if he says it's a $2 million fund? Oh, no. I got the scoop. We got the scoop.

We got the scoop. Okay. So preemptive size. See, only five. So really quickly, Susan started in 2013, and we've been an early stage venture fund based in San Francisco since then. Look, our general belief is that entrepreneurs are a lifeblood of progress broadly defined in the world. Like, they are the most important people in the world. And so we exist to serve them.

And we're 10 years into this. And, you know, fifth fund, 175 million. And it's a return to what we did at the very start. So only precede and seed. and I think that makes us probably one of the largest of this exact focus. And so in a moment when venture is changing a ton, and I'm sure we'll talk about that, we are kind of going back to specialists and try to do one thing. And this comes from my core belief in the world that I think you guys are embodying too,

which is like, if you want to be the best at anything, you just have to focus and try to do one thing super well. And so that's that's the big move on this new fund and excited to talk about. with you guys. Fantastic. No, it's amazing. One, I wish we had the data point on how many venture funds make it to fund five. It must be, it must be like harder to do than getting to your 50th podcast episode, you know, something like that. It's very, very challenging. So, so, you know, congratulations on the milestone. But yeah, maybe walk us through kind of your full journey, you know, it sounds like you went from super early stage to sort of expanding scope.

And now you're, you're sort of fully refocusing with this fund, but it'd be great for the audience to hear the backstory. 2013 started with 25 million. It was kind of a past the hat type fund, no institutions, all individuals, family offices, 75 LPs, like horrific to manage, wouldn't, wouldn't recommend that to literally anyone. 2016, we did 50 million fund too.

And that was really on the back of the two breakout companies we become known for, which was Robin Hood and Flexboard, and I can kind of go into those stories. And we got our first institution and fund, too. So Horsley Bridge, I still am grateful for them. We're like, we'll take a risk on you. You guys are not the shape and size of fund we typically do, but we'll put in 10 million of the 50 and then kind of the rest is history. LPs look for those types of signals, et cetera. In 2019, raised 90 million. And this is what you were alluding to in terms of like strategy. I think there's this general thing in venture, but it's true of the whole world, right? You guys.

get a little bit of success, start to think you're, you know, you're on to something. And then you get feature creep. And so feature creep in Ventures like, oh, maybe I'll do other stages or maybe I'll do these other things. I'm going to launch a program or I'm going to do this thing. And everybody, that's like the natural inclination of the world. So we started doing other stuff. And then we in 2021, raised 125 seed, 250 op fund. I looked around shortly after that and I was like, you know, so happy. We raised all this money that felt like a badge. And then I was like, wait a minute. my day is like materially different than what it used to be. I used to just meet seed stage founders, which I love, the stage I love. Our average dollar goes in after the seed. Like, we can call ourselves

a seed fund all the road, but we're not like just definitionally. Like, let's not lie to ourselves. And so that evolution of really just deciding like, what do I want my day to be like, what is a stage I love working at? And Fund Five is just a testament to like refocusing that entire realization back on what I think we're the best at, what I think I love. the most. And that's been our journey in evolution. And as I said, like the backdrop of that personal, you know, realization was what's happening in venture broadly. And that's bigger. You know, I call them buffet venture capital is my term now. Like all you can eat, right? You get any cuisine. There's three starters and limited bread sticks. You get like,

sweet, course desserts. And like you can go fill up on that. You can go fill up on that. You can go fill up on that. It's not the best individual dish of your life. But, you know, we're trying to be like the single Michelin Star. Like, we're not, you know, hovering over you. But, you know, hopefully if you know what you want, it's a, it's a good product, right? That's great. So you had, you had Flexport and Robin Hood in the first fund. So, you know, generalist from the start. What, what was the sort of tech trend since 2013 that you were closest to going all going, feeling like, you know, going all in on, We've seen a number of venture capitalists fall so get so excited about a trend that they make themselves. You know, we're a defense tech fund or we're a crypto fund or things like that.

And I feel just like the feature creep you're talking about, oh, let's add growth investing. Or there's that same thing of, oh, maybe we'd have an advantage if we were just doing this one thing. And that's historically, you know, it's worked out very well for some, but makes venture, I think, a lot harder given that this is a people game. Totally. We have yet to go all in on something, but that is not to say we haven't had a risk of potentially falling into that a hundred times in the last decade. We talked about going all in on crypto. We talked about going all in on AI. We talked about going in on all sorts of things at different moments. We talked about pivoting the whole fund to a program. We talked about all this shit. And as I said, like this applies to not just venture funds, but any business. It's as much as what you say, say no to doing and the decisions you decide not to do is what you do. And so we have, thankfully, I think, navigated to we don't try to opine too heavily on the thing. We are still led by people. So like at the end of the day, what I love about seed and what I was alluding to on my realization is partnering with people, which is seed, seed, there's nothing there, there's

nothing built, there's nothing to underrate is what I love. And I have found that other people are smarter than me and other people see the future better than I do. When I met, Vlad and Bajou, I hadn't thought about that opportunity, but when they told me their vision and showed me a demo of the product in 2013, it was the most beautiful mobile app I'd ever seen in my freaking life. And right when they said the narrative of changing the way our generation, I was 25 at the time, experienced the stock market. It was like, yeah, like 100%. Like, that's going to happen. And so it wasn't my brilliant idea, right? It was just, you know, I've, done a good job attaching myself to brilliant people. So that that's how we still operate as a firm.

And it'd be very easy right now to be all on the AI, but, you know, we're still, I think, honest with ourselves that we're still people first. So how do you think about pro rata and kind of maintaining a position, riding your winners, any of that? Is that kind of off the table or do you have a specific strategy for that now? So this goes to a broader thing that I've been thinking a lot about, which I think that venture is a pretty inefficient market. And if you, let me just take a step back and I'll answer the question, which is like public equities are pretty efficient, right? Like a bit as spread of a single stock is like really tight and you end up having a clearing

price. It's weird that, in my opinion, the most important industry in the world, which is the innovation industry of the world, which is technology, has a market, which is called venture capital, that is really efficient. If you're a founder and you're raising a B, you pitch like 20 firms and get a price. Like kind of crazy, right? And so what we're trying to do at Sousa is not force upon founders certain round constructions. Like, why is the A 20% dilutive no matter how much you raise? It's a construct of the venture business model. But what if a startup wants to raise four at 100?

What if they only need three? Like we should develop more products and venture to allow every type of founder to finance their business in that way. And so the way we think about is like we start the seed, but then we'll be creative. We'll be. partner with you however you want as you build your company. Do you think that the fundraising needs are changing over time? You're seeing more companies ramp to 100 million ARR faster than ever. They're more profitable. There's just more smaller teams doing stuff.

Is there, are capital constraints changing? 100%. Like that is for sure. The efficiency of companies is real. How much this early hype revenue, vibe revenue? I think a lot of new terms are so good. They're just like, they're golden. you know, how much is this durable? I don't know, right? Some of these are going to be blood

bass, but like what is empirically true as companies will be more efficient in the future than the past. Yep. So what I love about where we are our position in the market is in a world where companies are more efficient. Early stage is really like the place to do this business. It'll be the last entrenched alamo of venture. Yeah. Talk about FOMO right now. You're you're based in the I'm sure you experience it all the time. Everybody, you know, every time I see, you know, one of these sort of revenue charts, uh, where, where it's just like parabolic to a hundred million are, uh, I get, you know, I'm happy because, you know, uh, it's good for the ecosystem, but if I'm not in it, I'm angry, a little bit angry, uh, but, but on your side, what's the

general sense? Like, do you feel like a lot of investing right now? It's so unclear because it feels like we're early in AI adoption and understanding the potential of AI, but the market is so uncertain right now. What, what do you, do you think FOMO is still, sort of like, is a, is a dominant force in investment, sort of venture investment decision making right now, or is it, you know, still dominated by the sort of beautiful potential of the technology across all these different industries? I mean, FOMO's real. I have phone all every fucking day.

Like, to your point, I see these graphs. I'm like, I text my team. Why aren't my in that deal? You know, it's like, it's so real. And at the same time, like, I don't know, I'm not 50, but I, you know, like, if you were a venture in 21, you remember 21 and you remember 22 and 23 and suck. Like that vintage is going to be historically shitty. Yeah.

So it doesn't take, you don't have to be around that long ago to remember 21. And we're in for sure. some type of bubble. Now, how much of that will be enduring value or not is like, I have no clue, but like, this makes no sense what's going on. Like, it makes no sense. There's seat rounds at 70 with nothing and like four 19 year olds. Like, this is insane. And because Venture's power law, that individual deal can make sense if it's the right one. But as an industry, it's going to be a huge waste of capital. So the FOMO is real. But I think we do a good job to like temper our FOMO. and remind ourselves, like, let's just try to stick to our, you know, our guns here.

What are you doing for sourcing these days? And how did you meet Ryan Peterson for Flexport? How'd that deal come together? We met Ryan through Wesley Chan, who was at Google Ventures at the time. He's now at FPV, his own firm. Yeah. And Ryan pitched us on a call. There was a Zoom back then, really.

And we texted each other, YC Demo Day. Okay. Right before it, right before it. allowed people to talk to investors before down the day back then. Gary really locked that down. Or they're just not talking to us. It's one of the two. We committed to Ryan on the phone. Is the only time we've ever done that in Sousa history? We committed to the deal on the phone call. It's hit for 24 and a half minutes and we were like, yeah, we're in whatever, Pellasborder wire, you know, super irresponsible. It was our first one's like, I cannot tell the LPs this. This is insane.

This is like, you know, a bad idea. But, um, It was the most compelling pitch I'd ever heard. He's one of the best salespeople of all time. And he's become an incredible friend. Our families are friends. He and I even own like a business together outside of work now. You know, the cheesy thing about ventures. Like, it really is the friends we've made along the way.

He's the best. He's the best. Yeah, he was the best. He was our first guest on the show. Yeah, he was. It's a solid call in Texas. Out of your portfolio, maybe some more recent investments, what do you feel is the most under-hyped Portco,

the company that should be getting more headlines and attention, but isn't for one reason or another? I mean, one that flies relatively under the radar, but I'll tell you why it's not going to be under the radar for very long, is a company called Chapter, which is based in New York City. The founder's Kobe. Kobe worked at Palantir. back in the day. The reason it's not going to be under the radar for very long is up until two years

ago, Kobe had a very interesting board and a very interesting co-founder. So his co-founder was Vec. And his board was J.D. and Peter Thiel. So talk about going from like, oh, we have this great board dynamic to all of a sudden being like, my board member is the vice president of the United States and, you know, Peter's still very involved. And this company is doing really meaningful work. And AI is going to accelerate it. It is helping this very big problem of senior citizens in the U.S., like navigate the Medicare, Medicaid, healthcare system, pick the right plans. It is super hard to do. There's all these contingencies and other to understand the flows and prescriptions and what stuff are you on and what state are you in. And so they're making that process easier.

It should help healthcare costs a lot wrong. It should help patients. This is really important work. But just talk about up-leveling your connections in the world by the facet of who you chose to be investors. We were the lead the seed there and it'll be a many, many billion dollar company. Love it. Question on specifically around reindustrialization. Andresen had their American Dynamism Summit today. J.D. was speaking there. There's sort of this broad emphasis on bringing manufacturing back to the U.S. I'm curious to get your take on manufacturing, even robotics-led manufacturing as a category because from my senses there's going to be a lot of great businesses that come out of this that just aren't necessarily venture scale because they get to the point

where they're maybe you're doing 20 million dollars in EBTA and you you know maybe you're not hyper growth but you're just a good business and then you know people are going to look at that and say okay this we know what the market price is for a manufacturing business for this kind of widget and so how have you looked at that as a category and are you making are you making net new investments there out of the new fund. Yeah, well, shout out to my co-founder of Sousa Leah Polovets. He started a fund called Humba Ventures a couple of years ago that's only doing like manufacturing American Dynamism, hardware stuff. So he's primarily of the original OG Sousa founder guys. His fund is really what's doing that. Sousa primarily focused on software. But I think a couple

things you said are interesting trends into themselves. Like one, I think this question of like, what is venture backable and what is not is a good question in the next decade, which is there's going to be this camera explosion of like micro S&B and mid-sized company creation that AI enables that maybe shouldn't be venture backed or to my point earlier, there should be different products, different ways to finance a company, maybe different ways to not have it only be equity, but also have, you know, profit sharing or other long term. I think that's a reasonable point, whether it's hardware or really anything, like, that's a big question. Two is like the strategic value of on-inshoeing manufacturing is like obviously a very good idea, incredibly important.

We're doing less there. What we're doing more on is stuff back in our realm of, you know, we've led the seed of stored now over a billion, flex-port others. Like we're doing a lot in supply chain resilience in other. So obviously when stuff is manufactured, whether it's abroad or here, there's like a whole supply chain resilience of a company that has to happen, especially with terror to stuff going on, of like, where do we move stuff once it's already manufactured around the world? like that's probably what we spend a lot more time thinking about.

But like you guys have had Chris on, I think power from from Adrian others. Like these companies are insanely important and awesome. We don't spend a ton of time in and around it. Yeah, that makes sense. Have you made any investments out of the new fund? You're already doing deals? Yeah, yeah. We soft secretly started writing checks out of it in December.

So we're actually four in, which is a little hot for us. We're different than a lot of investors. We do relatively low volume. Each partner will only do two to three deal of the year. It's kind of like 90s venture capital. And but to your point on phomo, we're running a little hot right now. So we've done a couple. I think we're just excited to get going.

I have, I guess none of publicly announced, but they're all over the place. To give you, you know, what you asked earlier, like we're still founder led. So one is a stealth consumer gaming thing with, I'm partnering with this U.S. chess grandmaster to build. One is an AI personal kind of co-pilot that uses a bunch of cameras to collect first-party context about you yourself and then has like a has an app on the phone for a personal AI where we think the apples and others are going to have a little bit of innovators to one on this stuff. We've done one that's an AI co-pilot in hardware manufacturing. So like, you know, we're all over the place. Like we're we're just curious. Are you seeing more solo founders these days? We were at

YC Demo Day and we saw a couple teams come through where it was just a guy with no team because he's building it all himself because of AI stuff. And that kind of flies in the face of YC's like early advice of like you need a co-founder. It's going to be hard. You need someone early. But what do you see out there? Yeah. I mean literally the pitch right I had right before you guys. I was literally thing in our comments from here. This guy walks in. He's thinking about starting company. He's like, I really want a co-founder. We talked about it for 30 minutes. I was pushing to just start himself. And his actually entire product thesis, which is the irony of how he was thinking about his own co-founder thing was he wants, you know, his belief, without giving too much the idea around is like,

we are starting to extract away parts of building software, right? If you think about we had like cursors literally like, you know, code itself, then you have like the bolts of the world and you have you know, lovable, lovable in Europe, right? We're like, they're abstracting way, not just the code, but kind of like prompting entire parts of the system. You know, where we're obviously going in three years is like prompt to like company or like prompt to entire thing. And that's the company he's thinking about building and his entire argument is like,

could a software company of the future not have, and he's a world class CTO, sold a company to Apple, has built big companies. Could we not have a company where, instead of the engineering looking like 10, 20, 30 people, it's like three really good people. And they control front and back end, everything through like a series of agents that are responding to prompts. And understanding computer science, understanding technology is still useful. So I think that is a counter to like the Jensen and all the things. Like, you don't have to learn computer science anymore.

But like, I think that's where it's heading. I kind of buy that vision. Yeah. Have you had any AI tools that have particularly helped your job in venture? even just like scheduling or note taking or or put the deck in chat gbt say what do you think what do you think chat gbt rip it should i do it i feel deeply insecure about this question me too because lPs ask me this and i'm like not like not really like i should probably be doing more somebody asked me like oh how many chat gpt queries are you making per day i'm doing 20 and i was

like i think i'm doing like five i don't know if that's good or bad like I should be using it. Rookie numbers, John. You got to get those numbers up, I guess. I find it not that useful for what we do. I mean, to be honest, like, we don't do a ton of diligence. Like, what are we supposed to diligence? Yeah.

It's like, people and like themes. Yeah. So maybe like, yeah, if you're searching like, how big is this market, who are the major players? I want to get to know the industry. I don't ever search how big a market is. That's what you're already wrong. I've never done that work.

I actually think it's bad work to do it. seat. Yeah, no, that makes sense. It's seed. Yeah. That's very funny. There's nothing better. I mean, this is, this is, I just, it's so important to be authentic. And I believe that that is actually the dominant approach of, of most good early stage investors, yet still half of people want to be able to sort of claim credit and reverse and dress it up and say, well, look, you know, I had this memo and I knew exactly how the market was going to out. A lot of that's just window dressing for someone else, their boss. They're a window dressing for vibes.

It's not like we just had it. We tried this early on. I was like, I need to do the work. So I used to write limos. And then we looked back. We're like everything we did a lot of work on that we overthought and passed on, we were idiots about.

And all the things we ate didn't do like like flex port worked. And we're like, yeah. He's got an ape in his in his love. Oh yeah. Yeah. What's the origin of the ape? I'm curious.

Yeah. So we registered the, the, the firm in October 2013. and going into that, we had 10 names picked out that were all similar to like, we weren't very creative. We were like, oh, venture names are like trees and mountains and shit. So we had all these trees and mountains and shit names picked out. They were all taken in Delaware. And we had to register the firm because the next day we were doing our first close.

So we were like 1130 p.m. We're on the phone. We're scrambling. We're trying to think of names. Start just like, I don't know, we're like trying to get creative. We're like, just why don't we talk about trips we've all enjoyed? So someone's like, I went to Rwanda and did the trekking with the guerrillas. And then the other person was like, I also did that.

And another person was like I also did that all before we knew each other independently. That's awesome. We're like, that was the best trip of all our lives. Like it is truly a mind-blowing experience. Go see the grillas. It's insane. They're so human-like. So we looked up one of the family names of the gorillas and it's the Sousa family.

And we're like, this is this is so dumb that we're about to name our financial firm after like, A, a family and B with this little thought. The irony is like the only thing people remember about us is our logo. It's worked. Well, Venture Capital is just a game of trekking with guerrillas. Yes. It's about appreciating the entrepreneur. You know, you're going to be in their presence, but you're really just sort of admire the LP?

Yeah, yeah. The guerrilla or is the founder of the... The founder's the gorilla. The founder's the gorilla. I think the founder is the gorilla. The founder of the company become the hundred pound gorilla if they're big in. That makes sense. Yeah.

Last question. What's your breakdown the workout routine? I think you've been going pretty hard lately. You guys have to, like, people need to roast me way harder when I post this Twitter. No, we don't know. We work out as a team together every morning. I love it. Currently, I had a crazy list, did the half marathon, doing the try soon, doing a high rocks in April.

And then starting mid-year, I had this crazy goal that people have now told me who actually lift real heavy weights that the goal makes literally no sense. I'm trying to do the thousand club, which is like the bench, squad. Yeah, yeah, yeah. But I wrote five reps, which everyone's like, you're an idiot. One in five is like night and day. My plan in July is to go like full meat, all protein, no cardio, bulk phase and try to get as far as I can by end of year.

Meathead mode. I'm going lean to meathead and we're going to see what happens. Yeah, and then maybe John's been really wanting a venture capitalist to go for their IFBB Pro card. So maybe if you really fall in love with the sort of just the weights, maybe you go the bodybuilding route and you'd really be i'd love to see you become the sousa gorilla yes yes like next time next time i'd like next time we want to see your traps just in your in your in your back right here just full chat uh chat it's been fantastic having you congrats on

can i grab one other quick shout out oh yeah yeah of course um one other quick shout out so every great product eventually becomes a dating site sure and um i have a friend in sf who is definitely the most eligible Bafsorette I've ever met. She's beautiful, like smart ripping server, great skier, super hard worker, passionate about the environment, amazing human. So there's a guy out there that sounds like that would be of interest. DME, I'll set you up. Fantastic. It's funny you bring that up because I've had that thought recently. I want to run sort of anonymous, basically a non-you know, semi-anonymous ads because it's kind of cringe to post on X and be like, yeah, like I'm looking for the love of my life.

We can do it. This might be the first setup. You guys might get credit for the first setup on this. That'd be fantastic. We'll test it a little bit. We'll do this one for free and then maybe we'll get like some marriage contracts. Yeah. And if you get married, tell them the technology both.

You use code TBPN at the chapel. And good luck to you. Thanks for having you guys. Thanks so much for coming on. Congrats again. It's awesome. This is very. I hope someone, I hope the matchmaking works.

We might have a lucrative business. Maybe this is our cars and bids. It's a matchmaking service. That's what this is for. I mean, if you're an SF right now, if you're single, DM, DM Chad. But don't show up if you're not a rip and surfer, great skier. You got your life together.

Yeah. Your traps are eating your head. You're jacked already. You know, it seems like he's looking for someone who's got their stuff together. Definitely. But good luck out there, folks. And we will see you tomorrow. Great episode.

Thanks for tuning in. Appreciate you all. And have a great rest of your Tuesday. Go crush it. See ya.