TBPN - Crémieux, Tess Cameron, Eoghan McCabe, Pippa Lamb, Jack Dreifuss, David Tisch, TJ Parker, Surprise U.S.-China Trade Deal, Trump EO on Drug Prices, New Air Force One in 2025?, Perplexity Valuation Surge

Episode Date: May 12, 2025

TBPN.com is made possible by:Ramp - https://ramp.comVanta - https://vanta.comLinear - https://linear.appFigma - https://www.figma.comEight Sleep - https://eightsleep.com/tbpnWander - https://wander.com/tbpnPublic - https://public.comAdQuick - https://adquick.comBezel - https://getbezel.com Numeral - https://www.numeralhq.comPolymarket - https://polymarket.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(05:48) - Surprise U.S.-China Trade Deal. (22:17) - Trump EO on Drug Prices. (35:39) - New Air Force One in 2025? (43:04) - Perplexity Valuation Surge. (46:03) - Crémieux. Crémieux is a writer who explores genetics, econometrics, and demographics. His work blends data-driven analysis with cultural insight, earning him a loyal following in intellectually curious circles. (01:04:09) - Tess Cameron. Tess is an emerging voice in venture capital and technology commentary. She is known for her work analyzing trends in consumer tech and startups. (01:31:58) - Jack Dreifuss. Jack is a venture investor and entrepreneur involved in tech and finance circles. He is known for working at the intersection of emerging technologies and startup incubation. (01:45:04) - Pippa Lamb. Pippa is a partner at Sweet Capital, the investment firm founded by the creators of Candy Crush. She focuses on early-stage investments in consumer and wellness brands. (02:02:54) - Eoghan McCabe. Eoghan is the co-founder and Chairman of Intercom, a customer messaging platform. He previously served as CEO and is a vocal advocate for design-led product development. (02:32:04) - David Tisch. David is the Managing Partner at BoxGroup, an early-stage venture capital firm. He’s invested in companies like Warby Parker, Airtable, and Harry’s. (03:05:34) - TJ Parker. TJ is the co-founder of PillPack, an online pharmacy acquired by Amazon for nearly $1 billion. He is a trained pharmacist who helped modernize prescription delivery.

You're watching TVBN. Today is Monday, May 12th, 2025. We are live from the Temple of Technology, the Fortress of Finance, the Capital of Capital. We are wearing white suits. You know what that means? The market is ripping. The market is ripping. I never doubted it for a second.

Never doubted America for a second. Never doubted the market for a second. We were never gone. And yet we are so back. We are so back. And we got a great show for you today. We're diving into. We got a bunch of fun stuff.

We're talking U.S.-China trade deal. We're talking Trump EO on biotech. We have a few biotech folks coming on talking about drug prices. Talking about... T.J. Parker himself. T.J. Parker's coming on. Kermu is coming on. A couple other folks.

We have... Here's the full breakdown. We're going to dive through everything. We're going to give you a market recap. Break down the U.S. China trade deal. Break down the Trump E.O. on drug prices. Is there a new Air Force One coming in 2025? Polymarket has an analysis.

There's a whole bunch of rumors. There's a piece in the Wall Street Journal about it. And of course, perplexity is raising more money. They're in, they've advanced from regular talks to advanced talks. It's big news. It's a good success. It kind of is with perplexity. It's a young company.

Then we have a whole bunch of guests coming on. Kermude Tess, Jack, Pippa, Egan, and Gabriel. And then I think we got cut off at the end because we have even more people towards the back half of the show. We have maxed out the number of slots on our graphic, and we will have to advance and go deeper and get a better graphic in the future. Anyway, let's kick it off with this post

from Joe Wisenthal, the stalwart. He says recession odds are way down from the highs, though still up substantially from the start of the year. So things are looking better than they were a week ago, two weeks ago, three weeks ago. I think we got up to, what was it, 60%. 60% at one point? But we're pulling through.

We're doing okay. And Ray Dalio is probably has multiple holes in his wall this morning. He's just slamming, slamming it. There's a new order coming, but not today. Not today, Ray. Not today, Ray. Yeah, Joe Elizabeth Sondadop, he said the two biggest losers today are people hoping for a Trump-led economic catastrophe. Keep going.

Members of the big chess party who thought the terror announcement was some brilliant. strategic plan that would reshape the global economy in a way that was beneficial for the U.S. And so a huge win for the nothing ever happens, crew. Yes. We essentially round-tripped right back where we started. The market went down. The market went up, and we're back right where we started. Yeah, the nothing ever happens on Polymarket.

The nothing ever happens May Polymarket. is sitting at 78% right now. I can't tell them if you're joking. No, they actually have a market. That's where nothing ever happens. Yeah. How do they measure whether something happens? Well, I think we would know if something happened, you know.

Yeah, you'll definitely know if something happens. Here, I'm going to have the team, pull it up. Okay, pull that out. Guys, we have a screenshot. There's also macro podcasters. Yeah, yeah, yeah. It's wild. But you got to give us credit here a couple weeks ago when the

tariff news hit, we were very cautiously neutral. I guess we were kind of in the camp of nothing ever happens. But I was saying this feels, given the markets off, it feels like COVID. It feels like the interest rate hikes. It feels like 08 crisis. We could eventually, if this gets really bad, we could see thought leadership pieces from venture capitalists about this. But what did we say? We said that- Sequoia didn't, they didn't drop the memo. They didn't drop the memo. They didn't drop the memo. because the nature of this was different because it was self-inflicted and therefore it could always be pulled back and that's exactly what we've seen. And so we went there and back again and we're back where we started basically. But there's some good stuff in there.

There's some bad stuff. I think I have some opinions and Jordy has some opinions and we'll break through. But Q-CAP summed it up nicely said, come tell us about the U.S. empire collapsing, honey and Ray Dalio's in the attic. Very sad. It's a great, great past, great past. Anyway, the surprise U.S.-China trade deal gives global economy reprieve. Tariff reductions are bigger than expected, and Bessent says neither side wants to decouple.

So a few days ago, it would have seemed almost impossible. We're boys again. We're boys again. Did we just become boys again? Yes. Seems like it. When the announcement went out yesterday, I read it, the one that was on the White House website, I read it as very soft.

Like nowhere in that announcement was anyone taking any type of real victory lap if you actually read between the lines. Yeah, but it's soft in what way? Like soft like this is not a... We got some things that we wanted. Okay. But not anything specific. But anyways, we can go forward. That's weird because normally, I mean, I feel like the White House press release is always going to be different from the Trump Truth Social Post, which is probably going to be claiming victory.

in like the most aggressive fashion. But yeah, even that, I haven't seen very much aggressive, like we won from the Trump camp broadly. So I don't know. That's kind of weird. Because we're back. We started. We started. Close to where we started.

Yeah. And yeah, I mean, has anything changed? I don't even know. There's some tariffs that are sticking around, I guess. You, offline earlier, you made a good point, which is that even if nothing changed the mindset of the American, CEO executive team is that after this is that generally you can't bet on stability with China forever. And if you're not willing to think about alternatives. We haven't even talked about that hat.

It's so good. Just drop the hat. Just drop the hat. Just no comment. Yes. So anyway, my thesis here, I'm not trying to be like a shill for the history of the last three weeks. I think it is pretty chaotic. But the interesting takeaway is that in the intervening period,

you did see a lot of CEOs think seriously about what it would take to reshore, what it would take to build a new factory in America, shift to a contract manufacturer in America. Some of those deals probably got signed and will stick just because the immense pressure of the 145% tariff, meant that, okay, let's work a deal. And then enough of that happens. And then maybe some of those deals stick around where, yeah, sure, it's not as competitive as if we went back. It's not as cheap as if we went back on our move to, like we moved to America. We could move back now

because the tariff's kind of gone or it's dropping. But we always know that there's this risk that the tariff comes back. It made the idea of a really, really bad trade war very, very, very, I don't know, real. Like, it felt real. And so this happened at the end of Q1. There were a lot of Q1 board meetings that happened during that era, like the Trump trade war era. And it was short, it was short, but memorable.

But a lot of those people probably at least walked through the question of what would it take to decouple. And somebody could push back on that and say, Trump could have just said, hey, in 2026 we're going to be implementing you know 145% tariffs in these industries you have a year yeah to make changes so that your business survives and we can you know reshore yep the the industries that are strategically that would have been the lower volatility option yeah but if you like volatility yes yes then yeah if you're long vol you you hate that yeah but but I mean I mean seriously like like if if that

had been the plan, if it had been, hey, there's 145% tariffs coming in a year, do you think that the Q1 board meetings would have been that serious? Because a lot of people would have said, well, like, yeah, we probably should get started about thinking about finding a copacor in America or think about how we route our supply chain, et cetera, et cetera, as opposed to all hands on deck. Let's go and make this a priority. Let's go and see if there's an option here. So I don't necessarily think it's like a good outcome.

I don't really know, but I think there's some. something here. There's like a silver lining where at least most executives went through the mental exercise in the last month of what would it look like if we did decouple with China. And some of those CEOs will say, you know what? Let's actually just do that plan now. And I don't know that that's going to be a huge boom in reindustrialization or completely reshape the global economy or world order. But at least American companies are more prepared now. So I think that that's like maybe, I would call it a silver lining, not like this was how it was always planned to be and this is like the good outcome. Big chess.

Yeah, yeah. I'm not a member of big chess. But remember, we talked to Jordan Schneider at China Talk and I was like, Jordan, like you're all doom and gloom right now on this, on this trade war. Is it possible that in six years or we're talking about this like we talked about the first trade war during Trump won, which was like not great. and all the economists said that one was bad. But like we got through it and it was okay. I was kind of in the nothing ever happens camp. And he was like, no, no, no, this one's different.

It's so much worse. And I was like, but Trump can just roll it back, right? Like he could do that. I'm not saying you're predicting that he will, but like he could. And he was like, oh, but no, it's like this is different. This is way worse. And I think I'm right. I think I got him.

I don't know. We'll have to see. We'll have to roll the tape and get them back on and actually debate it. But it feels like this could be a win for team. nothing ever happens. Yeah, right now the market is certainly pricing that in John. But it's also just a 90-day pause. And so it's totally possible that things heat back up, right?

And then we could be talking about disaster and more trade war. But hopefully not, because we're buddies now. We're friends. Yeah, we're boys again. Yeah, we're boys. Benchmark, go forward with your management. Take it all back. Just do it.

That was crazy. That kind of came at the end of the week. But the Treasury Department is investigating? them. I'm interested to see how that works out. Yeah, you really saved Sonia when I asked her that question. Yeah, you really put her on the spot. I don't know. Why not? I'm like, I have to train myself that not every VC is as loose-lipped as Delian. Yeah. And some of them have decorum. Yeah. Yeah. They don't like to talk about other. I'm just so used to like, oh, well, yeah, Delian will talk about any deal, any company, any other VC. Most other VCs are

diplomatic, but not Delian. So that's why we have him on sometimes. That's why we have the diplomatic piece is on sometimes. Anyway, let's go through what actually happened with the U.S. China trade deal. The world's two biggest economies unwound for now. Most of the tariffs they had imposed on each other since April in a tit-for-tat battle that was threatening to stoke U.S. inflation, crash China's export engine and upend the global economy. Stock markets in the United States and elsewhere surged on the news. The dollar and bond yields rose, reflecting expectations for faster U.S. growth as trade tensions recede. Exporters breathe a Sive relief. I'm sure Ryan Peterson got his first sleep score above 50 in a month.

He deserves it. He does. Investors and analysts said the outcome was much better for the global economy than they had expected on Saturday when the U.S. and Chinese negotiators started two days of intensive talks at the Geneva residents of the Swiss ambassador to the United States. Great setting. Great setting. Probably some type of lake view, I would have to imagine.

It would be hard not to have a lake view in Switzerland, to be honest. Yeah, Switzerland's kind of set up to be this like neutral... The Switzerland of negotiation. Yeah, yeah. Yeah, it's kind of like the Switzerland of geopolitical. Yeah, it's kind of like the Switzerland of geopolitical negotiation. Yeah, exactly. That's right, John.

It's pretty sweet. The U.S. agreed to lower the base level of tariffs on most Chinese goods to 30% from 145% while China said it would cut its levy's on U.S. products to 10% from 125%. Wow, pretty good. The 30% rate imposed by the U.S. includes a levy. Levy. Levy. Related to China's alleged role in the fentanyl crisis plaguing the U.S. in the weekend's talks, the U.S. tariff on many Chinese products will be higher than 30%. U.S. duties on steel, aluminum, and autos remain in place, as do some earlier tariffs on certain Chinese goods imposed

during President Trump's first term in office and that of former President Joe Biden. Yeah. We're getting to the scalpel, not the sledgehammer. Everyone says, oh, you know, the precision doge is too much of a sledgehammer should be more of a scalpel there is there are things you need to cut same thing with these tariffs they need to be targeted on specific industries that are you know important and strategic well you know sometimes you got to use a use a sledgehammer before you get in there with the scalpel and clean things up I guess break things up a bit just smash it into pieces and then coming with a precision to kind of trim around the edges but uh Washington and Beijing agreed to keep the new tariff levels in place for 90s

days with the goal of working toward a broader deal on tariff on trade in further talks. China said it would cancel or suspend some non-tariff trade measures. It had imposed a hit back at the US potentially excluding including easing export restrictions on critical minerals used in batteries and other high-tech applications. Speaking of a news conference, the Treasury Secretary said it was seeking a long-lasting and durable trade deal. So it's just a negotiation and they're renegotiating everything. Neither side wants to decouple, he said. We're a couple. We're couple.

We're just a couple. I'm couple maxing. We're couple maxing. Just a couple. Yeah, U.S. said, Besson said the U.S. still had grave concerns about its unbalanced trading relationship with China, which is legitimate. He cited issues such as China's management of its currency and subsidies for manufacturing, which Washington believes are a major factor driving factory job losses in the United States.

Those and other issues will be discussed in talks over the next 90 days. the outcome for stalls for now what was shaping up to be a destructive clash between the world's two biggest economies with potential ripple effects across the globe very interesting yeah this was something that a lot of people in d to see were paying attention to but retailers in the u.s were warning of empty shelves if they couldn't get chinese products and some small businesses were worried they would go under without easy access to china's vast factory floor economists weren't higher prices and shortages risk uh reigniting inflation For China, an unrestrained trade deal with the U.S. would threaten millions of jobs tied to serving U.S. consumers and potentially worsen trade tensions with other countries wary of a surge in Chinese imports.

China was also worried about losing access to some U.S. products. It still needs, such as Boeing planes, aircraft parts, and certain chips. Yeah. The other thing here is this was sort of underreported last week, but the Chinese central bank was cutting rates in response to the tariffs. So they, you know, clearly were feeling the- did not. Yeah. So we were kind of ready to buckle down because the market was pretty resilient.

Like if the market had truly been in free fall and there was no, you know, buy the dip meme in America. The DGens saved us, you think? The American investor. The American DGens were just like, the prices are too low. I got to get in. I got to mortgage my house to go long. And the Fed and the Treasury Secretary of the Fed is just like, you know what?

Like we don't need to cut rates. Like the Americans are simply too bullish. They'll just never stop buying the debt. Yeah. It's great. But I mean, the one thing that I like about this is I think the fentanyl tariffs should be pretty bipartisan. Like that seems like something where truly no one wins. Like you can make the argument about like a free market around electric vehicles and like competition being good for the electric vehicle market.

I see a lot of stuff from Chinese EV companies. And I'm like, yes, I want American companies to win. But also I want those cars to be. here so that there's more pressure on American companies to make cooler and cheaper cars. Like there's that crazy car that has, it's a EV, but it has a gas engine that just charges the battery. So it has like on a single tank, you can go like 800 miles. It's like insane. There's a Chinese car that floats. There's those Chinese cars that have like the LED screens on the back so you can talk to the person behind you say like, hey, stop tailgating me basically.

Yeah. There's like all these cool. All these insane features that you, some of which are silly. Yeah. But I like, I like competition in the market. I like. free markets generally and I'd love to get there. I don't feel that way about fentanyl. Like I do think fentanyl is so bad that it should just be banned and China should do everything they can to stop exporting it. And so the Wall Street Journal writes, though the sides didn't come to an agreement over the fentanyl tariffs, the U.S. made clear in private meetings its views on the importance of combating the deadly drug. Trump has accused China playing a role in the illicit fentanyl trade, something Beijing denies. In a private meeting on Saturday, best

picked up a bit of sugar out of a dish on the table and told Chinese officials that the amount he was holding could kill a person if it were fentanyl. He said a person with direct knowledge of the exchange. That's pretty dramatic. He picked up a little more sugar and said that amount could kill people across Geneva. Then he picked up more and said that could kill people across Switzerland. So dramatic. It's good, though.

He's cooking. He's a showman. Trump likes a yapper, a talker, somebody who can present. Yeah, show. It's huge. Showbiz, baby. In a briefing with a small group of reporters, Besson said that although fentanyl wasn't the main focus of the trade talks, the Chinese delegation included a senior Chinese official

who was able to discuss the issue in detail with the U.S. officials. Such an official who at later press conference Besson identified as deputy minister isn't usually part of the trade team, Besson said, and that shows their responsiveness to our concerns. So China actually sent someone a deputy minister to say, hey, we're not, admitting guilt, but we're in the conversation. We're going to send somebody who can actually speak to this particular issue, which I think is good because, you know, it's way harder to steal man.

Like, yes, they should be able to just send as many drugs. Like, they shouldn't be responsible for that. And it's like, our DEA can't, like, the United States goes into Mexico and like hunts down drug traffickers, right? Yeah. A lot harder to do that in China. Like they do not want us sending our like DEA guys kicking down doors in Beijing if they're if they are doing fentany Yeah.

And to be clear that the cartels are the ones that are basically distributors for the fentanyl. Yeah. And their position is we wouldn't do this if there wasn't a buyer in America. Right. Yeah. And and so naturally I think you need to go. But normally. Upstream and put pressure on the source.

Yeah. Because that does have a cost. Like America has been waging a war. on drugs, there are negative externalities of that. There's a cost, right? We have to pay for DEA agent salaries. We have to do a lot of different things. We wind up locking people up in jails that cost money.

We have court systems that cost money. Like, it all is a tax on America when we fight the drug trafficking that happens in the United States. Yeah. We don't really have the ability or authority to do that abroad. So we have to ask China to say, hey, invest in preventing fentanyl. Yeah. You certainly invest in the local.

dissemination of it and you have drug policies there, but we want you to take that as seriously, even if they are just leaving your borders. So potentially a strong step forward. I'm optimistic that. Anyway, let's move on to the prescription drug executive order from Donald Trump. He posted on... He was like, he's like, yesterday's like, it's feeling like a slow news day. We only announced a potential trade deal. Let's fast follow, you know, with with, uh, you know, a little Sunday to just shake up the biotech. So I'll read a little bit about what Trump actually said. He said, for many years, the world, Capital W, has wondered why prescription drugs capitalized

and pharmaceuticals in the United States of America were all caps so much higher in price than they were in any other nation, sometimes being five to ten times more expensive than the same drug manufactured in the exact same laboratory or plant by the same company. Question mark, question mark, question mark. It is a good question. I think a lot of people have asked this both on the left and the right, and we'll go into Bernie Sanders' plan and how that maps to Trump's plan. And then we'll talk to some experts about, is this, are we should be cautiously optimistic here? Is this great?

Is this terrible? Price controls, usually pretty bad from an economics perspective. But this is something different with this most favored nation strategy. So it was always difficult to explain and very embarrassing because, in fact, there were no correct or rightful answer. the pharmaceutical drug companies would say for years that it was the research and development costs and that all of these costs were and would be for no reason whatsoever born by the suckers of America alone campaign contributions can do wonders but not with me not with the republican party we are going to do the right thing something that the democrats have fought for many years

therefore i am pleased to announce this that tomorrow morning i will be signing one of the most consequential executive orders in our competition history prescription drug and pharmaceutical prices will be reduced almost immediately by 30 to 80%. They will rise throughout the world. Of course, that's a prediction. We need to figure out if that's actually going to happen because the way this is structured, they don't actually have to reduce prices.

They might just raise prices elsewhere. And of course, this question. And the NASDAQ biotech index is up. Up 4% today. Insane. No one was expecting this. And we can go through some of these posts. But Deleon said biotech market.

are going to be a bloodbath on Monday, kicking the dog when it's already down. I thought this was a good take. I liked it. I posted something similar. I ended up deleting my post because I was like, I look stupid now. And Sharp Shark on the next post says, has the grim reber going from door to door, just killing biotech over and over and over again because biotech's had a hard go and seems to it seems that they can't catch a break.

And then Sheel, friend of the show says, this is a policy, this is policy that was proposed by Bernie Sanders in 2018, Horseshoe Theory, again. Again, Bernie Sanders' new plan to bring down drug prices, briefly explained the plan from Sanders and Rep Rochana. Let's see, Bernie and Trump love PJs. Bernie was getting flack recently because he was using a PJ on the campaign trail. And he said, you really expect me to sit at a united terminal when I'm kidding? Yeah, he said that.

It's crazy. So Bernie and Trump have, have, you know, far more in common in many ways than at least many people would think. Yeah, they're more alike than they are different. They're both Americans. They're both Americans. So T.J. Parker, who's coming out on the show later today, summed it up. He said, my initial take on the Trump drug pricing announcement, I could probably be convinced

that a global, most favored nation is a reasonable approach. The problem is even the federal government doesn't always know the actual net price of these drugs today. That's why I've always argued that you have to kill rebates first. It's the necessary precursor. The optimistic take, forget rebates, forget margin buried in GPUs. just mandate a global MFN on list price and pharma will be forced to unwind the entire web of rebates fees and other unnecessary complexity. My guess is that's the rough logic given the failed rebate

repeal attempt in Trump 1.0. It will be nearly impossible to implement cleanly, but if it worked, it could be a brilliant end run around the current system. Now, his pessimistic take, I still believe that the best long-term strategy is to let market forces do their jobs, put power in the hands of consumers, and let competition drive down price, like every other retail category, that's more consistent with our capitalist instincts and more American. But so far, that hasn't worked. It's been a disaster, so maybe I'm wrong. And so we'll have him unpack his takes a little bit more. And we're also bringing on Cremew in about 20 minutes at 1145 to talk about, answer this question. Like, does the U.S. actually overpay for drugs?

He says common knowledge, it says yes, but the real data says no, because the U.S. gets favorable prices for generic drugs, and it primarily consumes generic drugs. In fact, they're 91% of prescriptions. So I'm excited to talk to Kremu about some of his analysis here. He's a great accountant and author on X. So let's go through some of the Wall Street Journal analysis of the EO aimed at lowering drug prices and break it down for you all. The executive order seeks to institute a policy known as Most Favorite Nation.

You guys probably know about that. Seen this in a safe note. That's the first time anyone's interacting with an MFN. When you're in founder mode, you deal with MFNs and the safes. Well, now biotech companies will be dealing with the same clause globally. It was a big moment when YC added the MFN clause. You remember that? Yeah, maybe that's, maybe J.D. got in there.

It was like, hey, I've heard about these things, MFN clauses. It's working really well in Silicon Valley. Could be a thing. Could be a thing. So the U.S. government pays prices for, drugs that are tied to the prices paid by other countries. Many other countries pay lower prices for medications because their single-payer health care systems negotiate for deals.

Basically, what we're doing is equalizing, Trump said Monday, before signing the order at the White House. He also said it was unfair for the U.S. to shoulder the cost of research and development for pharmaceutical companies. American patients were effectively subsidizing socialist health care systems. Americans often pay higher sticker prices for drugs than people of other countries. For example, the list price of diabetes medication Jardians. I'm probably mispronouncing that was $611 for a 30-day supply last year,

according to health research nonprofit KFF, compared with $70 in Switzerland and $35 in Japan. That's a pretty big delta. You can see why this is an issue. So the EO directs the U.S. trade representatives and commerce department to take any appropriate action against unreasonable and discriminatory policies in foreign countries that support. press drug prices. It also gives RFK Jr. 30 days to work with pharmaceutical companies on how to lower prices. If the drug companies don't lower prices within 180 days, the order gives Kennedy and others authority to propose rules and restrictions on drug companies and imports. The order

doesn't specify whether pricing changes would apply to Medicare or Medicaid, suggesting that its impact could be broad and apply to commercial insurance. A White House official said that lowering the prices of drugs for those who use Medicare Part D would be a strong focus, it didn't specify which medications. Hopefully it's trend, D-Ball, Anavar, testosterone. Just the essentials.

Just the essentials. Just the basics. We are paying. Kremu actually posted like a post from the, from a bodybuilder saying that like he's actually, the bodybuilder is actually fine with the current structure because it, where is this? He's getting imported.

He said, I really like the status quo with pharmaceuticals where people with good insurance or lots of money get bilked hard to fund new research so that high agency people like me can buy cutting-edge experimental drugs from gray market websites for a fraction of the price. The broodcience, always ahead of the curve. It is. Yeah, one analysis I got that I don't think is public at this point. Sure. I think a number of people have had this reaction is that MFN pricing in general will likely face lawsuits on constitutional and administrative law grounds.

If Congress can pass a new law, this would change. But an MFN-like benchmark could be folded into legislation as part of some type of Medicare price negotiation, right? Which happens frequently or international reference pricing. and people are kind of theorizing that you could roll this idea into legislation in the reconciliation bill in the House, but then that's just going to be another factor that could potentially get that not passed in the first place. And so I think people were posting yesterday when this news rolled out, like drug prices are going to drop tomorrow.

And I don't see that happening. But I'm interested to talk to TJ later. and just get a sense of how real price drops are going to be, if they're going to happen, if they are, what is the actual schedule, things like that. Well, if you're trying to save money, switch your business to ramp.com. Time is money, save both. Easy to use corporate cards, bill payments, accounting, and a whole lot more,

all in one place. Thank you to ramp. Thank you to ramp. Switch your business to ramp. I mean, it is a controversial decision because it is government price setting. The Wall Street Journal has this quote from, Alex Shriverner, the senior vice president of pharmaceutical research and manufacturers of America, trade association representing major drug companies, government price setting in any form is bad for

American patients at a time when we are facing growing competition from China. Policymakers should focus on fixing the flaws in the U.S. system, not importing failed policies from abroad. Yeah, so an example here is rent controls. So rent control in many cities have, if anything, been detrimental to the poor, a meta-analysis of over 100 studies showed that rent control often leads to reduce supply of rental housing as it discourages new construction and investment. So the comp here would be if pharmaceuticals can't charge what they want to charge, they will invest less in R&D, whether or not that ends up being true. I'm sure it could be debated as well.

But a 2017 study by Stanford Economist found that after, rent control was expanded in San Francisco, landlords removed 30% of the newly controlled units from the rental market, leading to a 15% decrease in the city's total rent housing stocks. Property owners are more likely to neglect maintenance of their apartments. And a National Apartment Association study in 2024 found that doubling the number of rent controlled units in a metropolitan area correlated with a 16% increase in severely inadequate housing units, indicating a decline in housing quality. So again, just a good kind of reference

when thinking about price controls. I mean, one option is that they lower prices in America, but the other option is that they just raise prices everywhere else. And if they do that, they might sell less drugs overall because people can't afford them in other countries. Although, when the examples of like Switzerland and Japan, I feel like if Americans can afford $611, for diabetes medication like the Japanese should be able to as well because they have

similar cost of living and similar GDP per capita. So I wonder would they really see a drop off in consumption or would they just see higher overall revenues and ultimately higher profits? Well, it's possible. I mean, there's so many different factors. But one scenario is that there are alternative drugs in those countries that you can get that are generic that are very inexpensive. And so the only way these American drugs can compete that aren't generic is to just have massively reduced prices.

And so if you're a pharmaceutical company, you're going to say, well, we're making this for the American market. And then as a bonus, we'll sell it over here because even at $35 a dose, we still have amazing margins. Yeah. It is always odd when you run into something where it's like, you know, like you buy a car. It's a big vehicle. It has a lot of metal. So you kind of expect it to be like tens of thousands of dollars. You go to the gas station, like the gas costs money.

And it's very obvious that it's like, well, it costs money to pump it out of the ground, deliver it to you, or cost a certain amount of money. But people always said this with like Facebook where it's like, why don't they charge you? Like if you're not being charged, like you are the product. And with healthcare, it feels like sometimes it's the opposite where it's like, did it really cost $10,000 to drive me in the ambulance two miles? like how did that happen? And I get that my insurance paid for it,

but like something weird is going on here because it just doesn't track at all. Whereas with many other things that you buy, you're like, oh, $300 microphone. Okay, cost this much for this reason. If people were paying out of pocket, they would be like, wow, I'm getting scammed by this company. Exactly.

But they get the bill and the insurance covered it. And so they're like, oh, like, strange, but. It is very odd. Even with like, like, there's a lot of R&D that goes into the iPhone. and you buy it and it's $1,000, and you're like, okay, yeah, that actually kind of makes sense that, like, checks out.

Yeah, like, sure, you know, they can manufacture these for $300 and they're charging $900, but that margin goes into the R&D. And I get that. But it's weird when it's like, you know, something that's the cost two cents to make and they charge $10,000 for it. So, I mean, healthcare has always been like an odd quagmire. And clearly, I mean, everyone seems to agree on both sides of the aisle that like something's off. in America and that it's not particularly working well.

And maybe that's, you know, hey, we need to just be healthier and eat healthier. Maybe it's, we need different drug prices or different insurance policies. But I'm sure there'll be a lively discussion this week all about it. But if you are long biotech, your short biotech, you got to express your views on public.com investing for those who take it seriously. They got multi-acid investing, industry leading yields, trusted by millions. Let's hear it. Public.com.

Anyway, let's go. They have a big launch this week, which I'm excited for. Let's go into another Trump story. There's so many. This has been a busy weekend. Trump administration in talks to accept new Air Force One as gift from Qatar. The Qatar government says possible transfer a plane for temporary uses under consideration. Obviously, this is burning up the timeline.

People very very confused about this because apparently, America has two brand new 747s that they're actively retrofitting. Did you see this take? Yeah. That they're like actively working on getting up to par. And the plane is like the least expensive part of Air Force One. It's like all the military equipment and stuff on there. So this feels like it was designed just to cause chaos basically or something.

But it's like of all the different things. Anyway, the article here's they're in talks to the Qatari government into about accepting a luxury Qatari plane for his use as president and potentially beyond, according to people familiar with the matter. Under the potential arrangement, which is raising legal and ethical concerns, the plane owned by the Qatari royal family would be used as Air Force One while Trump is in office after being retrofitted by a U.S. defense contractor. The U.S. wouldn't pay for a luxury 747-style jumbo jet. It might then be gifted to the Trump presidential library for Trump to use after he leaves office. And so obviously people are very up in arms about this.

Sean McGuire said the mainstream media has been wrong about so many things over the last few years. So I hope this is just more fake news. But if it is accurate, it would be the first of Trump's actions in this term. I find unequivocally wrong. Qatar uses money to silence people and buy favor. And Josh Wolfe is quote tweeting, Sean saying, Qatar played him perfectly. We will get you the American hostage. We will get you a new shiny plane.

The best plane bigger than any other presidential plane, not just Air Force One. Air Force One mega supreme. And then you will retire to your library. library. No president will ever afford such a beautiful, huge plane. We will help you bring peace to the mid-east and help you win a Nobel Peace. A lot of that sounds good. I want peace in the Middle East. The Obama book deal, they could have gotten a private jet, but it would have been probably, you know, more in the, this one's complicated for me. Not flying international. Yeah, it's complicated for me because. Definitely flying through regional airports. Obviously, I think

foreign governments should not be trying to curry favor with our election officials, period. Yes. But I'm a huge, huge fan of giving your friends planes. Totally, totally. And we've actually put planes on our gift guides before. I realized that. So we're kind of to blame here because we advocated for this. I believe a 747 BBJ was on our Christmas gift guide. Probably what's a better gift to the right person?

I know. And so we kind of laid the playbook for this and then the guitar just picked it up. And they were like, oh, well, you know, TVPN saying this, like we should give it a try. But we'll see. I mean, the good news here is like... Yeah, when you think about the scale, right? It's like, well, this would be like me getting you like a red bull. You know, it's like literally like, hey, John, are you thirsty?

You want a little pick me up. Do you want a red bull, right? It's like from a balance sheet standpoint. I'll do anything for you now. Now that you got me the red bull, I'm in your pocket. Value of the gift in the context of the balance sheet. Yeah. It also is just so funny because it's not like, it would be one thing if like,

I've seen some supercars that have been made in like in like foreign countries that don't typically produce. They don't have like large auto manufacturing segments. And they look very cool. And it almost makes sense if you made a plane to gift one to America to be like, hey, like there's a, there's a, there's a Kenyan supercar company that looks very cool. I was like, this is interesting. It's mostly like a retrofitted Lambo.

But it has like a very unique design and it's and it has like, you know, all the, like the color way is designed to like mimic, like, I think it's from Morocco. And it's very, very cool. And gifting something like that to America would be cool just to say like, hey, we appreciate you America. You can put this in one of your museums. We're entering this industry and we're excited to partner with you. Hopefully we can distribute these in your country.

We can make these. That would be one thing, but it's really just like, it's an American company Boeing that makes the 747. We've lost a plane. And then you guys have to read. And then America has to retrofit it because Boeing has a contract. for $3.9 billion to deliver a bunch of planes to Air Force One. And then L3 Harris is a smaller defense contractor, an American company that has to overhaul

the Boeing 747 that was formerly used by the guitar. So it's like, I mean, the big thing here. The guitar is just like in the middle being like, hey, we put some nice leather seats in here. Yeah, I mean, the, where the plane gets retired to is a big question. Sure. It was given to the White House and it was going to be effectively, you know, a presidential plane on an ongoing basis. That would not be a lot of issues with it.

You could argue, okay, Trump's getting it when it's brand new or whatever. But yeah, we'll see how this one plays out. The other downstream thing about this is like, as we're talking about, okay, maybe we shouldn't accept this plane, is it time to give back the Statue of Liberty to France? I think France has had-

It's such an amazing monument. But every time you have to ask, like, are we making shrewd decisions with regard to France? Totally. are we being too nice to them because they've curried favor with us by sending us that monument. And so if we send it back and say, hey, we're done. It's going to be a clean relationship by the numbers from here on out.

Yeah, it's surprising you'd think that Trump would maybe try to draw attention towards that. Give the Statue of Liberty back to France. Build one that's, you know, potentially five, ten times as big in its place. I like that idea. Honestly, I mean, I would be. actually just Trump folding an American flag. I would be way more down for Qatar to give America a monument, like the Statue of Liberty. Like, we can have a Statue of Liberty all over the place.

There could be one in Florida. There could be one in Alcatraz. We've talked about this. Catalina Island. Put a ramp, put a ramp card in the Grand Canyon. A ramp card swiping the Grand Canyon. Swiping the Grand Canyon. That's a good idea.

That's actually genius. lifted by blimps, just cruising, swiping the entire American. That's good. America runs on ramp. That's a very, that's a very American thing. There's something there. And if Qatar could help finance that,

so ramp doesn't need to raise, you know, more growth equity for it. And that feels like something that, you know, it wouldn't be like, oh, like,

you know, Trump would have paid for that anyway. Like, like, because the whole thing with this plane is like, it takes something off of his personal balance sheet, right? Because he gets a free plane.

Yeah. But he was never going to buy, a ramp card that swipes the Grand Canyon. Yeah, even if you should. He should. Objectively should. So yeah, I mean, I think that's a great idea. Anyway, speaking of sponsors,

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Neurals, you know, all these. Oh, yeah, they're on the hat. They're getting that. Not yet. Not on the V1 hat. They came in later. But we got ramp on there. We got public. We got Wander, Bezell, ad quicks on there.

Even Roar right here. It's always in my vision. Yeah, you can see it, right? Yeah. It's kind of crazy. Anyway, speaking of news, AI startup, perplexities valuation surges to $14 billion in new funding around. You'd think this is from Arfer Rock, but it's in, the Wall Street Journal Berber Gin got the scoop.

Yep. And to be clear, they are in advanced talks for a new funding round. They've advanced from talks to advanced talks. So it's hard to know if this means they've signed a term sheet, if they've done any type of handshake deal. But venture capital firm Excel is set to lead the new round, which is expected to total 500 million. People familiar with the matter said. The raise underscores investor enthusiasm for general artificial intelligence companies, some of which have begun to challenge Google's longstanding dominance over search. Perplexity was valued at $9 billion last November.

It's fourth round that year. That was crazy. That's poor. It's crazy. It is one of a set of AI startups that have grown quickly after the launch of chat GPT three years ago. The San Francisco-based company sells an AI-powered search tool that provides summarized answer using information gathers in the web. Perplexity is launching its own web browser called Comet. Yep.

And that is that is what got, we were talking about Comet. about comment with Arvind on the show and he answered your hypothetical and got a hit piece of tech crunch for it. It's not a hit piece unless it comes from the hit piece region of the New York Times print edition. But it was close. And it's not a dox. It's not a docs.

It comes from the docks region of the Washington Post. But Eddie Q last week made news at Apple when he said that Google searches over Safari web browser fell over the past two months for the first time in more than 20 years. And he attributed that drop to more people using generative of AI services such as chat GPT and perplexity. And so Q said Apple has held conversations with perplexity, open AI and anthropic about adding AI search features into Safari. And so that would be a big deal if the iPhone kind of migrated away from Google.

But it's interesting to see where this goes. I'm excited that they have so much money. I like Arvind. It seems like a really, really tough market to compete. eat with. Even in this narrative of like the application layer will be what's valuable. It's like, that's true, but you still have to aggregate enough demand to drive so much traffic to your application and have a flywheel there. When you're in consumer search, it's not the same as, oh, like the bull case for Harvey is that they hire a bunch of great SDRs who can go sell into law firms.

That's something that they can just scale up, I feel like, versus changing consumer habits from Google.com or Google is my auto-complete, right? So huge challenge in a huge market. Yeah, the stuff that's interesting to me is they're doing these live earnings transcripts, which are cool. I saw that. But is that a $14 billion business, right? You know, sort of subscale providing the sort of type of information that's not necessarily

hyper relevant to the average. We'll have to get Samir Gandhi from Excel on the show because he's joining the board and we will see what he has to say about the deal once it closes hopefully and hopefully the rest of it goes smoothly. But we have Kermew in the studio here to break down drug prices. Welcome to the stream. How are you? Can you hear us again? Oh wow. Voice changer too. Wow. Okay. Let's go. We're honored. We're honored. What's new? Oh, I think I'm using a voice changer. We can't hear you at all with that thing. Is there any way we can turn this off?

Yeah, let me just check if I can use a pitch change. It's strong. It's a little too powerful. It's a little too powerful. You're being overpowered by the AI. Yeah. We wanted to read through some of your posts, see if there's anything that we could break down. That sounded a bit better. Let's hear. Gotcha. Can you hear me? This is amazing. This is way better. Thank you so much. Tremendous. Okay, great. So yes. What has been your take?

Yes. Absolutely shocking there. Anyway, thanks so much for joining. Can you break down the news, the Trump executive order? How are you interpreting the news? How would you explain it to a layperson? So the idea behind the executive order is that we are getting ripped off because other countries are paying far, far less for the same drugs that we buy in the U.S.

for huge amounts. We pay $1,000 for a Zimpik and Denmark pays $4. And that's just not fair. So the idea behind this is that we're banning geographic price discrimination. We're making it so you can only sell at, you know, the lowest rate that another developed country is willing to pay for a drug. And how real is that? Like, and what, what drives that? Like, with the OZPIC example, that's developed by Novo, a Denmark company. Are they just doing their friends a solid by discounting it in their home country? Or does this a to American companies selling abroad and is it just like trying to capture any possible market at whatever price the local market will bear or is there something else going on with the dynamics of like insurance companies? The latter is exactly right.

It is a group of largely American companies that are maximizing profits by selling at prices that allow them to, as I said, maximize profits. They're just selling at whatever the market will bear. And if a country will not bear American level prices, then they aren't going to be selling at those prices there just for the simple reason this is supply and demand. Why does America, like, why can America bear such high prices? We were looking at the Wall Street Journal article and they were saying that for a particular drug for diabetes, Americans were paying $611.

In Switzerland, it was $60 and in Japan, it was $35. But Japan has a similar, similar, you know, economy to America on a GDP per capita basis. They should be able to pay $600 in theory. What's going on there? So the thing is that GDP per capita is actually not a very great way of getting at consumption. The Japanese save more. They actually are quite unproductive in the service industry. Other countries tend to have far, far lower levels of consumption relative to GDP.

And this is especially true if they're a country like Ireland or Singapore, for which a lot of their GDP, they're exceptionally high GDP, seems to be driven by profit shifting, where companies bring money over and doesn't actually affect the incomes much of the people who live there. So you'll see that Ireland, for example, has very relatively low. gross national product relative to their GDP. They are able to consume considerably less than their GDP might indicate. But the US, on the other hand, consumes a lot more than you might expect because everybody else's GDP is kind of out of whack compared to ours. We are the world's consumers. And as such, we consume a lot more. And we are actually, the prices we pay are actually

quite in line with what you would predict, given our consumption. Just to say that prices grow a little slower than household income growth. And the U.S. has exceptionally high household household income. The high prices and the fact that they are relatively low, both are facts that stem from America just being really, really rich. Why do you think the market, the NASDAQ biotech index is up over 4% today? Why do you think that is? I was actually just about to do a differencing exercise with that to see if the biotex were up more or less than the rest of the market because they are benefiting from the fact that the tariff barriers are actually going down. as well today, which is wonderful news for them.

Yeah. They, however, might not be benefiting as much as the rest of the market, so I'll have to go check that afterwards. Another thing is, there is a considerable expectation that this will fail. This was attempted. There's actually a CFR entry for this from 2020, and it was shot down by courts, and then the Biden admin came in, and they ended the whole thing.

And there are a lot of people who believe that this will not be able to go anywhere because it will run into some sort of issue. I'm going to tell them, no, the opposite, it will actually succeed and it will have pernicious effects. Because this is totally legal. Yeah. Interesting. Can you talk a little bit about the U.S. as an early adopter and how that shapes drug pricing? Oh, yes. So a large portion of the reason that the U.S. pays so much for drugs is because our launch lag, the lag, the lag between, you know,

getting the drug developed and getting the drug to market is so, so much smaller than elsewhere. To take an extreme example, the U.S.'s launch lag for new drugs is about six months versus the U.K. which is about six years, which means that if there's some new therapeutic that you really need, they'll probably approve that one pretty soon. But if there's a thing that's like an improvement on insulin, it'll probably take them many, many years to actually get that drug to market because they're just not willing to pay for it. They have considerable cost controls because they are a more managed care system. They provide a lot less care.

And if there's something new that like rules, but it's like a slight improvement on something else, they're going to go for the thing that is less expensive. They're just going to, we are aiming to maximize our tech adoption, whereas they are aiming to constrain their prices and do as well as they can under a certain set of a certain budget. You talked about potential pernicious effects if this goes through. Are you using what happens when rent control is implemented in cities as a comp here? Do you think there's just going to be less R&D spend? less investment, what does that look like to you?

So two things. We actually have wonderful models of this now, and we know how this played out in 1991. I'll talk about the models first. The models suggest that this naive expectation that we're going to lower our drug spending by 50 to 80 percent just cannot happen. And because we're going to dynamically adjust prices, prices are determined in equilibrium, and we're probably going to get about a 10 percent reduction in the U.S., but we're going to see a very, very large increase in a bunch of our allied countries.

So, for example, Canada should be expected to see something like a 90% increase. They're a small market and they're going to be facing a lot higher prices. That's not going to be very good for them at all. The total farmer revenues as a result of this will fall considerably because this forces them in order to comply with the regulation to price above the profit maximizing level in most other countries. This is bad for their returns and it's bad for the health of those countries. Now, when this was attempted in 1991 with the most favorite consumer model for firms, The prices didn't change for drugs that were under patent with no generic competition because everybody's already paying those. And it's just that the reason that we pay more for those is because we're the ones actually buying them and the other countries aren't really buying them very much at all.

They don't do new drugs as quickly as we do. We do it way, way faster. Sometimes it's an order of magnitude faster. There also was no change for just generic drugs in general, but there was a backfiring effect. And prices rose about 4%, which is not huge, but it's something, for drugs facing generic competition. with because of the uniform pricing under MFN. The compliance costs were really bad. And there was an IRA shock such that the returns for the firms went down as a result.

It was just not good for anybody. No winners. There are, okay, some winners. I should say that back. There are some people who do win from this. There are a minority. And the future loses out because the returns to R&D go down and they're already very low. And if you get less R&D, then you get less improvement in the future.

Can you dive deeper into R&D? As I understand it, there's basically, science research that's done at universities, kind of the foundational research on DNA might come out of an academic lab that's funded as a nonprofit, maybe there's NAH grants that go in there. Then at a certain point a biotech company raises essentially venture capital, maybe gets acquired or IPOs and rolled into one of the big pharmaceutical companies. There's losses and losses and losses for years and years and years. And then at the last second there's a blockbuster drug that makes a billion dollars and the math works out but on a 10 year 20 year time

horizon. Is that in a good place? Should that change over time? Like what is your view on on how we as like humanity are paying for drug development right now? We are paying way too much for drug development. We are paying out the nose for something that is not nearly as efficient as it could be and we know it could be a lot more efficient and a lot better targeted and everything else because we know that other countries are doing it well. For example, China in 2016 introduced wonderful trial reforms that we should have had, I don't know why we'd ever even have had this, where you can recruit people from across the country to participate in your trial. In the U.S., if you want to do that, you're going to be constrained to one center. And if you are constrained

to like one hospital, you are probably going to be flying people in. That adds a lot of extra cost. You are going to probably be constraining your sample as much as you can. Yeah. That adds a lot of uncertainty that makes your trials less reliable. So you're more likely to have a trial that produces a false positive or a false negative. We have these reforms have been implemented in China and they've worked wonders. China is actually ahead of us as of this year in terms of the number of trials they have going and beyond that they have a higher number and they have a higher number of people in each individual trial. They are beating the hell out of the U.S. because of some simple reforms that the FDA could actually implement right now. They could go in, they could have a direct

final rule on a bunch of these things and change this overnight to make stuff less expensive. They could also reform GMP, the good manufacturing practices, in ways that take off a lot of the costs from, for example, gene therapies, like having to produce tons of placebo ahead of time is a very silly rule. We could actually mimic countries like Australia, or we could do, follow the WHO's, the World Health Organization's GMP guidelines and cut costs right away. The wonderful thing about the US though when it comes to R&D is that we have a good way of directing R&D funding. We have lots of connections between the public sector and and, well, I should say, the sort of quasi-public, private R&D drafts.

Like we have universities with a lot of industry directive, a lot of industry grants, a lot of knowledge of where they should be focusing and whatnot. And this leads to a situation where even our public funds are able to be allocated to things that have good returns. That's why it's going to be very difficult to replace whatever happens here with public funds, because you're going to have to figure out how are you going to distribute that money? How are you going to do what the industry does, which is to find areas with pretty good returns, pretty reliably? When we, the elasticity of research funding to the returns is very, very high.

It is very considerable. So we're going to see a very stark reduction in R&D, and that's going to have pretty major effects in the future. It's also going to lead to R&D outsourcing. it's going to move to other countries because of the cost angle. It'll very likely move to China because they have the best R&D environment right now for pharmaceuticals and because the U.S. is doing this. And additionally, the manufacturing is likely to move there too. Yeah.

As you work through the effects of this executive order, if it goes through, is that good for America? Is it good for humanity? Are we closer to a cure for cancer? Does this like accelerate or decelerate overall? biotechnology progress in one way or another in your opinion. Unfortunately, this is very likely to massively decelerate things. This is likely to be something that causes a lot of harm to research for many years to come. The IRR for biotech is, for pharma, is already below the average cost of capital.

And we've recently had a little bit of rebounding, but people were expecting it for many years to go basically to zero. A little bit of rebounding due to COVID. There was a blip, and that was okay. There was a lot of funding going into biotech for COVID reasons. And then there's been a GLP lead boom in returns as well. And that's been tremendous. But that has an expiration date because we know what's going to happen with the patents. And we know that people are very likely going to go for cheap, generic ozimic when it comes about in 2033 or whatever.

Rather than the better terseptitide or retichutide-based products, just because it's going to be so cheap. And at that point, the gLP boom will be over and we'll have to return to the state of what's going on with pharma. And what's going on is very, very low IRAs that are going to go even lower due to this regulation. So it's unclear if pharmaceutical research can actually survive in the U.S. given this, because we're already teetering on the brink and moving even lower is, well, it imperils the whole thing. Brutal. How much did you read into the timing of all of this? It felt initially it felt a little bit random because so much conversation had been on trade issues. but then once I sat with it a little bit, it felt conveniently timed given where, you know,

Trump has been polling and things happening, you know, in Congress that, you know, they would like to get through. Yeah, I actually don't know when I expected this to come out, but I did expect it to come out because it was an old thing. And they are trying to introduce a lot of the things that they try to run near the end of the previous admin. And this was just up there. They're basically going to redo the same thing. They're going to fight the legal battles and then implement this. And I don't know if there's anything in particular that prompted this right now, but I knew that it was coming and I didn't know exactly when,

but I expected it within a few months of the admin actually coming in. Anything else, Tori? Brutal. I was hoping for a white pill in there somewhere, but I didn't get it. I do have a white pill. Please. Just one, sir. I'll give you a few, actually.

So there are a lot of efforts going on right now. at the FDA and at HHS more generally to promote price transparency, which will help with the PBM-based Delta in price. They are looking to accelerate manufacturing and approvals for nearly generical drugs. They're going to be participating in generic drug user fee amendment reform, which is massive. I can go into that. There's GMP reform happening. And there are people looking to actually lower the costs of some of our most expensive drugs

in a way that is not bad for innovation by implementing Louisiana's purchasing model. across the whole country. There are a lot of really great things happening and it's likely the situation will be better in the long run, not because of this, but because of everything else that's going on. What would the Louisiana plan look like? I'm not familiar with that. Ah, so Louisiana did an amazing thing a few years ago. They basically went to every manufacturer of Epclusa, this wonderful drug for hepatitis C that is a cure. And it was super high cost. I think the cost is actually around $27,000 right now for 28 days. So it's not able to be done for Medicaid at a like meaningfully.

So what they did is they negotiated with a producer of it. And they said, you're going to be the exclusive provider for as much as we want. We're going to give you $30 million. And you just give us as much as we want. And they look for people and they said, okay, you look like you're going to produce it all. They agreed. And they just produce as much as they want. They could, wanted.

If the state demanded more, they would get more. That was part of the deal. So they started screening prisons. They started screening Medicaid patients. They started screening everyone in order to get as many people as possible this prescription for a formerly very high-cost drug that had to them zero marginal cost because of the deal. Lots of pharma companies are actually willing to engage in this deal. They're willing to provide zero marginal cost drugs if you give them just one big contract and exclusivity.

And this seems to be amazing. It worked really, really well. They reduced the rate of hep C in the state, the hep C death rate actually, by about a sixth in about a year, which is incredible. They actually saved a ton of money on it. They reduced the number of organ transplants people needed. They did just lots of really, really wonderful things. And all they had to do was ask a manufacturer, hey, will you provide as much as we want if we pay you a set amount and give you exclusive rights in our state? Yeah.

Yeah. Businesses not predictability, right? What's that? businesses love predictability, like it's predictable revenue. And so even if it's at a lower margin, it's more guaranteed and higher volume. And so all the math works out and the IRA increases. Yeah. And when that model goes national, it's going to basically make our high price drug problem a thing of the past if there's a generic.

That's fantastic. Well, that's a great white pill. Thank you. Thank you for that. This is great. We'd love to have you back. This is a fantastic. I'm so glad you were able to join really quickly.

Yeah. Thank you for making the time. A lot. Thanks so much. And we'll talk to you soon. All right. Have a good one, guys. Bye.

Cheers. Bye. We have our next guest hopping in the studio, but quickly, let me tell you about Vanta, automate compliance, manage risk, improve trust continuously. Vantas Trust Management platform makes the manual work, takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're using your first framework or managing a complex program. Go to Vanta.com.

Anyway, thank you to Vanta. So much. And welcome to the stream, Tess. We'd love to chat with you. If you're here, let's bring you in. Can you hear us? I sure can. Can you guys hear me okay?

Yeah, you sound great. Welcome to the show. Great to meet you. Thanks so much for hopping on on short notice. We're trying to make heads or tails out of the news. We were just talking to one guest about the latest executive order around drug pricing. And we'd love to just get a little bit of your introduction and then how you are processing the news today and what's going on in the market and just kind of your high level take. Absolutely.

So thanks so much for having me on. So my name is Tess Cameron. I'm a principal at RA Capital Management and R.A. is a leading life sciences investment fund. We make investments across all stages from seeding and building new companies all the way through to investing in later stage companies in the public markets.

And I think this whole concept of most favored nation for drug pricing, it is not something new. It is something that we saw in the first Trump administration actually several times in 2018, it came back in 2020, it first in one executive order, then in another executive order, and then in a rule from the Center for Medicare and Medicaid, a rule that ultimately did not get implemented because the rule was actually, you know, knocked down in court because they didn't follow, you know, certain procedures that were required from an Administrative Procedures Act standpoint in order to get the rule through.

So I think that broadly, there being some rumors among the, you know, biotech investment community that this is something that was coming back, right? Trump had made some statements about it's not fair, that we are paying, you know, so much more than these other countries. And so I think investors were, you know, anticipating that there might be something. Was it, and do you think it was- Oh, sorry, please jump in. Do you think it was priced in in some way?

because so right now the the NASDAQ biotech index is following the overall NASDAQ. Yeah. And everyone last night, at least the peanut gallery, myself included, were predicting bloodbath in the biotech markets. I know. Didn't happen. Are we just really stupid or do we get something wrong? I am totally with you. So, yeah, I think this just shows the value of predictions in this kind of market.

where, but I think it's, I think it's for fundamental reasons that, you know, biotech stocks were like, biotech and pharma stocks were like actually up this morning. So like, my goodness, like, why the heck is that? And I think the reason is because the executive order and particularly the administration's language around the executive order was actually much more positive than I think people were anticipating. This doesn't necessarily mean that it will be positive, right? But I think it's being interpreted positively. And I'd say that for a couple reasons. One is that, you know, I think Trump made it very clear, like the focuses on other countries that aren't paying, right? And the focus is more on those countries than the companies. And I have to say, as a biotech investor,

you know, I think all of us are like totally behind that statement, right? Like, you know, the fact that the UK and, you know, a lot of Europe, but I'm, from these like super low drug prices, like that isn't, you know, they should be paying a lot more. There's actually a study that came out just a couple days ago that looks at the ways that a lot of these European countries set price, which is through these health technology assessments where they basically, you know, say that patients' lives aren't worth particularly much and they very narrowly value, you know, the benefits of these drugs in a way that, you know, undervalues the societal benefit of medicines by like more than 90% right so um these are not uh you know i think i think

what was really positive to hear is uh you know hey the focus on getting other countries to pay more um you know someone said i i can't i think it was trump actually who said you know hey if you want to sell your cars here you have to buy you know our medicines that are you know at like market price right and in the u.s like we do have a competitive market um i think also it's So as a biotech investor, key thing is, like, we want to keep that market competition going in the U.S. That is what drives drug prices down over time. It's, like, generic entry. It's, like, more branded competition much, much, much better than, like, importing foreign price controls that essentially are based on math that, like, undervalues human life, right?

So good trade stuff, but, like, bad if it results in, like, importing foreign price controls. And I think the weight of those changed. based on the language that we heard this morning. Sure, sure. Are those, effectively, the price controls that they have already, are those happening at the EU level or country by country? It is country by country. And it's a very nuanced and very complicated process, but essentially, like, when a drug

gets approved, US is almost always the first launch, right? So 85% of new medicines launched anywhere in the world, those are available in the US. And then it's a question of what other markets do you go to? And it's really complicated because all of these different, many of the different countries, they reference price each other, right? So you don't want to like start in a country that like is reference pricing another country and it's like, oh no, like now like, you know, our pricing is all, you know, messed up. So typically what companies do is they start with Germany, right?

Maybe they consider Japan. And then, you know, after they get pricing in one of those markets, then they go to these other markets. So this is why like these countries are so staggress. and they don't get the benefit of these medicines, like, nearly as soon as the U.S. does. They're usually delayed several years, but it's a very country-by-country, you know, decision-making process. And it's not really a decision-making process. It's kind of a take it or leave it, right?

Like, drug company, do you want to launch in this market or not? If you do, like, here's your price, take it or leave it. And so actually having the U.S. government step in and say, like, hey, you're not just negotiating with the drug company. You're negotiating with the U.S. government now. And like, if you want to sell your cars in our country, you're going to have to pay the price that I want you to pay. Like, that becomes a more powerful statement where like now companies can actually be in a position where they can, you know, start, you know, seeing the benefit of, you know, more, you know, more deliberate, you know, trade negotiation by the U.S. in favor of, you know, getting other countries to pay their share of research and development. U.S. has been 75% of like, you know, drug, biopharma research and development is what the U.S. funds, which is just incredible. It's like defense, right? It's like similar to the NATO, similar to the NATO issue. Yeah. Interesting. Is there something at the political level that the biotech community broadly, both the large pharma companies and maybe even the more startup focused companies, agree on in terms of changing regulation or how.

the government interfaces with the biotech community. Like, for example, we, I mean, we cover tech a lot, and there's been a lot of rumblings about the government blocking acquisitions. In general, big tech companies want to acquire startups. Startups want to sell themselves to big tech, and so tech as a whole has been pretty against the blocking of acquisitions, but is there an analogy there to how the biotech community broadly thinks about their list of priorities in Washington? and is this anywhere on that list?

I would say, like, across the board for, you know, big pharma companies and, like, little biotech alike, it is all about, like, let us compete, right? Like, market competition is, like, such a great force for access and innovation and, you know, bringing prices down in the U.S., like, let us compete and, you know, enable that. And I think we have, you know, I think we see it in our access to medicines. It is because of the dynamic U.S. market and market competition that we have so much access. It's because of U.S. market competition that when generics come in, you know, prices will go down sometimes like 98 percent, right? Like Medicare pays 30 cents for like, you know, or even less.

I think it's three cents actually for like each like Lipitor pill. And so that's great, right? And so let us compete. Let us compete. You know, there should be government mechanisms, you know, we think for drugs to actually go generic on time, right? So like, yeah, you don't want, like, drugs hanging out for 20 years, like on patent. That isn't really, you know, part of the deal, right? But when we think about, like, you know, what makes the U.S. so dynamic and what brings patients a lot of benefit, it's like it's having that innovation and ensuring that that innovation is driven by market competition rather than government price controls actually helps like instill more

natural mechanisms for prices coming down, more branded competition, more generic competition. If the U.S. government just comes in and sets price, guess what's going to happen? You're not going to have, you know, a second to market branded product that's launching three years later, you know, coming to market and, you know, competing against this price set one because they're like, I'm not going to compete against the U.S. government, right? like U.S. government is going to get, you know, going to get what it wants. So I think that is somewhere where, you know, biopharma as a whole, big company, small company, I think all aligned on that.

We had the Inflation Reduction Act, right, which is essentially instituted price controls in the Medicare market. And, you know, the big inefficiency there was setting price for small molecule drugs at nine years. Biologics are at 13 years. Usually as investors, we're counting on like 14. years of exclusivity before a drug goes generic and drops off, obviously dependent on the quality of that patent. That's a price control that we don't want, you know, that's already had an impact, unfortunately, on small molecule innovation. So pills instead of, you know, shots. And, you know, we don't think that's good, you know, for Medicare beneficiaries. And we don't want to see more

price controls, you know, coming into this market because, you know, it could really cause something very special where, you know, America leads, which is biomedical innovation, to, you know, have a lot more, you know, challenges and less investment. So, in generally, the, our last guest was, was sort of disappointed with, with the EO. He thought it was going to have, you know, negative implications, but generally felt fair, you know, he seemed somewhat unfazed. Can you talk about investor sentiment in biotech right now? the industry has had, you know, a rough few years and in many ways, you know, you could kind of just shrug this off and just say, all right, you know, just got to get through it. But I'm curious, you know, from your point of view, are there what, what are the sort of positive outlooks right

now from your standpoint? And what should people be paying attention to outside of this EO? Yeah, absolutely. So, I mean, I think the reaction, you see it in the stocks, right? I think that, you know, there's optimism that the impact of this policy may be a lot lower than people thought. And indeed, I think some of that is just, hey, it looks like this is going to happen through rulemaking instead of through, you know, some other kind of implementation that might be more top down. And that, you know, may impact the probability of actually getting something that is like super broad. and like bringing pharma, you know, prices down across the board that that may lower the probability. So I think that's kind of what we're seeing in stocks. You know, I think in terms of

just the sector, there's a lot of like amazing stuff happening fundamentally, right? And that's why as investors, when we see periods of volatility like this, it's very exciting from an opportunity set perspective because you have companies that have made incredible scientific progress. You have companies that have, you know, that are launching, you know, transformative medicines that are making really good progress. And we're seeing some real disconnects, you know, across the board for many, you know, for many companies. And that, you know, that's a great set of opportunities for investors. And, you know, ultimately, I think America does really value biomedical innovation and, you know, we'll be rewarded for, you know, companies that make fundamental

progress. Can you talk a little bit about the life cycle of a new drug or new biotech company? Comparing it to tech again, it feels like there's companies older than us that are still private because the nature of the tech market is that there are venture capital firms that are set up to do five billion dollar injections at a hundred billion dollar valuation and yet it feels like in biotech there's been a long history of going public at a much lower market cap the the stock moving based on fda trials very early before revenue years on the market pre-revenue is there some sort of fundamental reason why companies in biotech go public earlier or is that life cycle changing do i even have that that characterization you are so right

No, you were absolutely right. So it is a very different life cycle. I mean, you know, it can take like, you know, 10 years for a drug to get to market. Like, you know, even when you've gotten into the clinic, 90% or more of, you know, what you're working on is going to fail. So it is a really, it is a really tough sector. You know, we're talking numbers in the billions like, you know, on a probability adjusted basis. It's like, you know, over two and a half billion to actually get a drug to market. So we're talking big investment.

very high risk. And as a result, yeah, so you're like, why is anyone doing this? You would think it would be the opposite. You would think high burn, high capbacks, high risk, leave that in the private markets, but then Stripe, which has been making tons of revenue for a decade, get them in the public markets. And yet it's the opposite in America. I'm curious, I'm curious if there's any type of disconnect between the public and the private

markets in the sense that, hey, you can buy shares of a private company that has zero dollars in revenue at X valuation, or you can buy shares of a company that's public that has drugs and that has, you know, that are in market that has revenue. Can you talk about that, you know, is that, is that correct, incorrect? Typically, what we see is that, you know, it's very unusual for any drug company that has a commercial product that is like, marketed, very rare for those companies to be private, right? It exists in a few spaces, but like very, very unusual. They're almost always public. And the reason that biotech companies tend to go public so early is because, you know, it takes so long to develop these drugs and the depth of the,

you know, capital markets for the, you know, biotech market, it's just deeper on the public side, right? There's a lot of investors who are like, hey, we do like public markets. investing and maybe they do like a little tiny bit of like private market investing but like the pools of capital on the public side are just much larger and so you see a lot of these companies going public very early and the private company valuations they tend to on a lagged basis follow the public markets somewhat you know curious of that also happens in tech but it might be that after you see like a real drawdown in the xbi like six months later later, if the XBI is still low, like private companies will be like, hmm, you know,

maybe that stuff up isn't going to be as big or like maybe I have to be like a little more flexible on like valuation. So it usually takes some time. But like everyone is usually looking at that because that is the exit typically before an M&A. There is, you know, certainly, you know, strategic M&A activity that happens for private companies. But usually it's after they've raised enough money to get to a point that, you know, a strategic is like, cool, like, I think this drug is going to work. I'm going to take that risk now. And usually the company would like to be public to be able to raise the money to get to that point where they can be bought. So, you know, it's an interesting dynamic and certainly different, I think, than the tech world. Can you talk about the

longevity market from your point of view? In our world, every single, once somebody has at least a billion dollars of paper returns. They become very obsessed with longevity, living forever. And so in tech, the companies that get attention, we had one of the co-founders of New Limit on last week, which was an exciting conversation. But I'm curious from your point of view, more at a high level, how, you know, give us kind of kind of a broad overview of the longevity market, which I'm sure is just one area that you guys invest. Absolutely. Yeah. So the longevity market can mean many, many different things. Every drug. Every drug is a long as a long as a drug to some degree.

Yeah, exactly. And also with many different levels of scientific validation. Sure. So R.A. Capital, we are like a very data-driven, like we're a very data-driven organization, right? A lot of the people who work at R.A. Capital are like PhDs or, you know, former physicians or sometimes even current physicians. And so very scientifically rigorous. But, you know, I think we're developing and, you know, have developed a lot of, like, really, really interesting research on, you know, scientifically oriented ways of extending, like, not just lifespan, but health span, right? So when we think about longevity, we tend to think about it not in terms of, like, hey, do you want to be, like, you know, hanging out on a couch, like, not really able to move, but you're like, I'm alive, I'm alive. Like, you know, ideally as my neuralink plugs in, I'm good. As long as I can use the internet at 150 as a vegetable, I'm good.

You're like, that's probably not my jam. Just being able to like use a, I mean, using a computer with your eyes at 150 would still be pretty cool. But like, if you could do more, that would be even more fantastic, right? And so our focus is actually being more on like the health span side of things. I'm really thinking through like, you know, we actually think that there's a lot of like existing technologies and existing, you know, it's also not just about like treatment. It's about, you know, prevention and how do you identify? How do you diagnose?

How do you kind of manage risk factors like very, very early? And so a lot of that involves having like algorithms for identification, having algorithms for like, you know, disease prevention and identifying where there's a lot of like existing stuff that you can put to work in combination with like, you know, novel, you know, novel agents to really improve health span. So that is an area that we're very excited about and certainly doing, you know, certainly doing a lot of work in. What does deal flow look like for you? I know a lot of the best biotech companies, it seems like they, there's some tech transfer point out of a university lab. And then I've seen like flagship pioneering is like incubating stuff. And Moderna came out of that. And there's just so many different formats. Yeah, yeah. There's so many different formats that you don't, you don't see a lot of like, oh, you know, kids.

in the garage said, you know what, I have a problem and I'm going to solve it myself. It's a very different pattern of entrepreneurship. So what does the life cycle look like for you these days? It is very different. I will tell you, I would actually love to see more like garage biotech because I think like there's, you know, some more like I think that there's actually you know, in some ways like the entrepreneurial process for biotech has been a little too like institutionalized. Sure. Right. But let's let's talk about it because, you know, the deal flow for biotech and like how companies get formed can be in a number of different ways. Academia, right? Ideas coming out of academia is like a big one. Ideas coming out of, you know,

venture funds is another big one, right? And then you have like, you know, business people, often people who've like, you know, they've worked for a company, that company got sold and they're like, hey, I want to come back and do another one. Here's like these other areas and other problems to solve, right? Or maybe someone's coming out of big pharma with like an idea that they couldn't prosecute in their big pharma company because they were too risk at first and they want to start something new. But because biotech is like so high risk and requires so much capital, that process for like getting a company started is often, you know, I'd say there's like a bit more like institutional like process around that than I think you see in tech because it just like

takes a lot of money to like go from, hey, I have this idea to like, oh, I even want to like test this in animal models and like try and get a drug out of this. Like that is like millions of dollars. So I think that is something that is actually a real challenge for the, and that we at R.A think is like a real challenge for like the biofarmine ecosystem is, you know, look, like we have to, you know, find ways that we can be more, you know, be more efficient and like try and get to. to some of these answers more quickly, because when, you know, when you look at, you know, when you look at the pace of innovation that is coming out of China, which is really, you know, pretty astonishing for biomedical innovation. It's like that is a fundamentally different cost base

and fundamentally different pace of iteration. And we, you know, there's a lot of work that I think we need to consider for our biotech ecosystem here to adapt. Can we do a quick round of like overrated, underrated. I'd love to know. Artificial intelligence broadly. Is it speeding up drug development? Is it overhyped? And Silicon Valley, everyone says, oh, we're just going to, you know, ask chat GPT to cure cancer. It's going to happen next year. It's a convenient line if you need to raise $30 billion yourself. But what is the mood in the real industry from the folks who know on AI? So I would say that AI is like it's overhyped in the sense that like AI itself is like, not like discovering and developing drugs.

It is underhyped in the sense that like, oh my gosh, like what a powerful tool. Like we absolutely use it. Every single company worth their salt is using AI in their drug discovery process. Right. So it's a little bit of both. Usually when someone is talking about themselves as an AI company, you should approach with like, how different is this really?

And like, but if a company is like, no, we don't use AI for anything, I would also be like, huh? What about MRNA broadly, Moderna? Stefan Bissell was on a TED Talk saying before COVID, saying MRNA is going to be a cancer cure. The stock's kind of gone up, gone back down. Is MRNA a technology that we're going to be seeing more of in the future in different applications? Or should we be thinking about Moderna really just as like a pandemic frontline defense firm? So let me talk about RNA therapeutics more broadly because actually MRNA therapeutics,

are like one flavor of RNA therapies. And I would say like RNA therapeutics overall, like huge, huge potential, right? Huge opportunity. I think that the challenge has been delivery, right? How do you actually get these to the right biological target? And there's a lot of really awesome work being done that can hopefully improve on that. Yeah, that makes it sense. What about GLP ones?

I feel like everyone has heralded them as like a key. cure for everything from diabetes to obesity to gambling to just anything being lazy, I guess. It seems to cure everything. Overhyped, underhyped, overrated, underrated. Underhaped, underhyped. Underhyped. Phenomenal drugs. Phenomenal drugs.

Lots of problems to solve, right? The market isn't rewarding a lot of that now, but I think the market will in future. So lots of problems to solve need to improve on accessibility, right? So how do we get like pills and patches? instead of needles and how do we improve tolerability, right, so that people are actually staying on these drugs and, you know, a big part of that is insurance coverage as well. Last one for me, are you worried pharma IRAs on average have been low? Our last guest was talking about how, if you look at average returns there below the cost

of capital today, are you worried about net new investment in early stage by? biotech funds, obviously, if there's less investment, you could imagine the returns actually going up because there's less competition for deals maybe. But what's your kind of high-level take on incremental investment in early stage biotech? You know, my take is that there is a lot of, you know, there's a lot of great work to be done from a fundamental standpoint, but we need the incentives in place, right? So we've got to have a functioning market. We've got to have a functioning market. we've got to have, you know, competition in order to incentivize that. So, you know, I think that's the best, that's the best thing that the government can do

is ensure that there's, you know, strong market competition for pharmaceuticals. And, you know, loved hearing this morning that there's a real appetite for trying to get other countries to incentivize that innovation as well. Do you think biotechnology process is overall accelerating or are we heading into a period of kind of rebuilding and stagnation. What's your overall optimism on the industry broadly? My view is accelerating because we have to, right? We have to and we have better tools too.

The thing that causes biotech to take such an enormous amount of time is clinical trials. And like the clinical trial system in the US is just like clogged, right? Everyone's trying to recruit the same patients at the same hospitals. So I think we need different ways of doing things. things, but I think that we have a lot of the tools to actually accelerate some of that innovation. That's exciting. Awesome. Well, thank you so much for joining us.

Yeah, yeah, leaving on a high note. Thank you so much for joining. This was really enjoyable. Thank you. Thank you, Tess. Well, the market's up, so we have to celebrate. Yeah. It's a white suit day.

Great to see you both. Yeah, thanks for going on. Cheers. Thanks so much. That was great. I feel like I'm learning a ton from these interviews. Yeah, we've been meaning to have a biotech day. This is kind of the informal biotech.

The EO. Yeah, kind of triggered it. But I'd love to go deeper here because it's such a, every answer is something where I'm like, I've never heard this particular take before. I'm learning a lot. It's interesting that Kermude what didn't bring up the price controls in the European market, right? Because that does feel like a factor.

He was saying that, you know, European country or that the pharma companies are selling at the rate in which the profit maximizing rate, and it sounds like there might be some other factor. play. We have Jack in the waiting room. Let's bring him in. Let's bring him in. Welcome to the stream, Jack. How you doing? There he is. There he is. I changed my shirt when I saw that you guys

When you went light today, I had a dark shirt on. Can we get some sound in? No suit, though. Hey. He's in the studio. Welcome to the stream. Let's go. Coming at the Ashton Hall. Yeah, one more. Let's go. We got Jack. He's got news today. He's got news. He's got news. What news do you have? What's going on? What's you got for us?

You guys are getting the first look at this. It's a pleasure to do it here. We are announcing Impatient Ventures Fund One. Let's go. Let's go. Another air horn. Another air horn. How big is it?

So we had set up to do 20 million. We'd sit up to do 20 million. We ended up over subscribing and doing 23 and a half million. So congratulations. You know, it's, it was a tough market to start in February, 2023. was basically the rock stone cold bottom adventure. Stone cold bottom. I'm grinding it out.

Have you thought of concentrating the entire fund into a single foundation model company? Just putting all 23 million in one deal? I basically was hoping that that would be the case. I was just waiting to Yolo in with Josh Kushner and is something. Next. Next fund. I mean, seriously, break down the portfolio. Maybe talk about eight.

Why don't you give people a little background? Talk about AUM too, because I don't think the first. fund tells the whole story. Yeah, so I was lucky enough to to start investing, honestly, during ZERP, when it was a little bit easier to raise capital. And so we did a series of SBBs while I was a founder in 2020, 21 and 22. First deal we did ended up being a CPG company. It might be the first and last CPG company, but it's my best investment, which is a high-protein oatmeal brand called oats overnight. I met the founder. He was a pro poker player. I was a pro poker player. I was a very serious poker player once in my life, which I think is an amazing skill set to have as a

founder, is that sort of decision tree between luck and what you actually did to impact an outcome. But, yeah, we did about 30 million bucks of SBBs before the first fund, and then along the fund we've done probably another 50 or 60 million. So AUM is north of nine figures, but we're definitely, we're definitely, as they like to say, in the industry just getting started just getting started that's great portfolio construction for the new fund what's the average check size how many deals are you trying to do are you leaving some on the table for pro rata and follow-ons will there be a growth fund an IPO a special situations fund debt fund are you getting into structured structured credit private credit at some point what's

going out i mean i mean you know import export you know it's like you know what do you have those friends where you ask them with their parents do and they don't know and they say import you just left wondering, but like everything's import, export to something. It's important. Sure. Import the capital, export it to the founders. Yeah, exactly. So we're a concentrated fund.

We're going to do probably about 20 to 22. We're actually at 20 right now. And so we're just deciding kind of the last few that the nice part about being a first fund is you can not only make a lot of mistakes. You don't have to be as kind of like letter to the law of how it's done. I think is you scale a U.M and you have institutional investors. We were fortunate to have an institutional investor. There was a top endowment I need permission to say publicly.

Unfortunately, I don't have that permission. But as I've been told, I can say it's a Boston-based endowment that's in the top quartile of investing. But so we have a generalist approach. How I think about it is I was reading summer the other day that somebody talked about how specialist funds actually outperform generalist funds for only Fund One. but then as soon as you escape Fund 1, you start just getting decimated. And basically the articulation was if you're focused,

it's because you're investing in whatever's of the time, right? Right now at the time, it's foundational models and deep tech. So everything from AI to robots. But, you know, three years ago, I saw a lot of people saying, we're Web 3 focused, and then they kind of like branded everything that way, and then slowly walked off stage and pivoted as that industry changed from where it was three years ago. So I like to think of us as a generalist fund that dynamically invests in what the best categories of today is. And so right now that is robotics, that is deep tech, that is advanced manufacturing and defense.

But we're also doing consumer. I think consumer is permanent. It's a permanent category. You know, I think we have yet to do a Web 3 deal. I don't want to write it off. We did some pre-fund staple coins that we're excited about. but, you know, I think it's still a sort of to be determined, you know, what's going to work in Web 3 because it's still just tokens with not a lot of value. How do you find there's been a number full disclosure. I'm an LP and impatient.

But how do you think about investing in companies before there's any heat on the deal? I can think of a few companies in the fund that were couldn't have been less hot at the time of investment and then a year later you've got you know tier ones uh you know leading and they become super competitive but um what what's your kind of what are you looking for in a founder uh to get a sense of their abilities oftentimes before there's any you know revenue or sometimes not even uh an actual product yet yeah yeah i mean that's a that basically is kind of where I think our edges isn't what we invest in, which is, you always hear it. It's about the people, but my line is, I can't underwrite a business if I can't underwrite the founder. And so it's those

characteristics of that founder that I feel like are a winning, you know, sort of profile. Because, you know, comically, the word pivot is so often used in startups because the beginning lifecycle of a company is one continuous pivot. And so I love the Mike Maples quote, 80% of his best investments were pivots. Mike Maples being the, you know, the floodgate founder. And, and I think that that couldn't be true about so many of our best deals were sort of the business change later. And so what I'm really looking for is that the founder has, there's a line that I like to use, which is never uncertain, often wrong. And so whatever they believe to be true at that point, they believe it with 110%. But as soon as new information enters their head that that might

change the way they, you know, go to market that might require them to need to shift their team. I'm looking for a founder's ability to be dynamic as the sort of the information changes. Break it out, John. Let's do it. I mean, I don't mind taking the suits to the dry cleaner after this. In the next studio, I think we will be a spokesperson. I wish about me. You remember, you guys remember there's like at least two or three COVID startups that were like, I think there's still one that does it where you can get like 10 minute delivery or something like that. Cigars? I mean, I may be the next great consumer business. Maybe. Maybe. Yeah. Go puff for cigars. What does your take on these like on these new zoomer companies, these young entrepreneurs who seem to be really good at like going viral on day one, vibreels, take over the internet? And then they kind of got to build the plane after they're already flying versus.

you know, the Dylan Field story of like Teal Fellow in kind of private beta for like three years raising money, then launches Spigma and goes on this like generational run. The fear and like the vibe is like, hey guys, like you're taking the marketing a little bit too seriously. Maybe you're too good at going viral before you really have any product. But are we just being like boomers if we're like, hey, you know, get in the garage and start coding? I love that question. One of the, companies that you know jordi knows is in our portfolio um and uh we're we're all big fans of in fact i think you both have the fish uh as shinkay oh yeah yeah yeah so i think they're they're they're they're at there they're they're at 40 michelin stars of sort of uh their fish uh being

distributed to restaurants i thought it only went up to three michelin stars but they got 40 they're hogging all the stars that's incredible really blew it off the one of the things i really appreciate about the CEO is quite young and you know We backed him, you know, when he had two roommates from college working on the idea with him. And actually, the original idea, he wanted to make autonomous fishing boats and he wanted to build the fish processing robots that kind of, you know, execute the fish when it's caught and then get it ready. The narrative, the narrative violation there is that Shinkay's a YC company that graduated YC and still had. And this is, this just goes to show how not hot robotic. were in any type of sort of more antiquated industries that they could that a founder of SAF's category

could get out of YC and just be out in the free market building in relative obscurity for I don't know how long it was exactly but if I remember it was it was a few years but but just to even finish John your question one of the things I like about the CEO is there's a lot of pressure for him now that he is a, you know, tier one-backed startup and has, you know, some of the best from SpaceX and Andrew are working there to really scale revenue. The thing that he's focused on is quality revenue. And I think in the age of AI being able to pump numbers up quickly, I don't know what that company was.

I don't want to say the wrong one. It was 11X or 11 labs or something that had like 10 million. Too wildly different companies. There was one that basically had like 10 million in revenue in like three weeks or something crazy. And it was just turns out it was like all. turned over like 90% churn. And so I think,

demos. Yeah, I think in this age of, of being able to scale as fast as we've ever been able to, quality revenue is really the most important thing I look for. And does that founder understand what that means? So understanding economics are still in right now.

And I think the founders that don't understand. Hot take. I mean, hot take, you know, margin profile, basic finance 101 stuff in conjunction with a market insight and the ability to scale and execute.

That's an important thing. that we underwrite is, I don't know what your ultimate business is going to be, but will you know it when you see it? Last question I have. Are you a long or short Burning Man? You've been a vocal proponent of Burning Man over the years. Every year that I've known you, you've gone. I'm short. I got to say, I'm short. I think it peaked a couple years ago. But what's your take? I got bad news for Burning Man. This will be my first year in which I do my hot VC summer in Europe. Ooh. Not a Burning Man. Okay. And so this is my first year taken off. Could be a definite. I think I will be back. I will say I have gotten deals and LPs out of Burning Man every year I've been there. So, you know, I have a good batting average and the productivity. But it definitely feels- Actions.

What's that? The actions are speaking louder than words here. You're sure. Yeah, the revealed preferences. The revealed preference is mega short. I'm currently, I'd say I'm currently, I'm currently, I'm staying in cash. I'm not long. Yeah. Staying in cash. Awesome.

Well, it's great to have you on. Congrats on the milestone. And, yeah, good luck to you. I'm looking forward to fun too announcement. I'm sure it'll be not too long. Around the corner. Not too far away. It'll be sometime after burning man.

which is great. Great. All right. We'll talk to you soon. All right, guys. Thank you. Thanks, Jack. See you.

Let's talk about eight sleep. Go to eightsleep.com. I'm going to keep the cheering guy. Five-year warranty, 30-night rice free trial, free returns, free shipping. It's clinically back. I got a 90. I'm back. Wow, you're back, John.

I think I actually put up a 90. 99 or 90 on the dot? No, actually a 90. Because we got Pippa from Sweet Capital coming in the studio in just a minute. Let me also tell you about ad quick. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only ad quick combines technology, out of home expertise and data to enable efficient, seamless ad buying across the globe. Pippa, are you here? Welcome to the show. Hey, John, how are you going? It's good. Would you

kick us off a little bit of an introduction on yourself for those who don't know you? Absolutely. It's great to be with you guys. I know we've been wanting to do this for a little while, so it's great to be with you. Yeah, somehow we missed you at Hill and Valley. It was a crazy But it was good seeing you guys. You guys were overrun. We were. The hottest spot at the conference. A tiny room in the corner.

Everyone was beating down the day to. It was good. It was a crazy day. Those guys did a great job. Yeah, fantastic. Yeah, so my name's Pippa Lam. I'm a partner at Sweet Capital. We are a private investment fund.

Clue is in the name. Sweet Capital. My colleague started gaming company, Candy Crush, most famously, king.com. which they sold to Activision and then subsequently Microsoft. I run a huge game. I run the private investment fund for those founders. And we sit between the US and Europe and invests sort of broadly multi-stage.

Again, we're private capital so we can sort of invest across a whole wide range of sectors. And I'd say we're about 70% US allocation at this point. My background, I actually started my career working for the British government. on trade relations between the West, UK, US and China, which obviously quite topical today. And I then sort of moved into equity research, covered large-cap, China Tech, US Tech, JPMorgan, for five years. So pretty much just doing Publix, covered a lot of macro,

which obviously is now, you know, increasingly relevant to sort of tech world and private investing now, but been in venture and private investing for about five, six years now. So, yeah, great to be here with you guys. Yeah. How are the founders thinking about investing in gaming technology? I feel like every successful founder, they sell their company and they're either like, I'm never doing that industry again. I know too much about what can go wrong, so I want to stay away from it.

Or they're like, I'm an expert and I'm going to dominate the next generation of generational companies that come up in the industry. I know so much about obviously there's a lot of value out there. So what's their feeling on gaming startups right now? And are you doing any deals in that area broadly? So I'd say it goes both ways. So there are five founders of King. So I'd say a couple of the founders are like,

send me back in. I'm ready for more gaming. In fact, one of our colleagues is actually started the new company. As soon as his, on compete, pretty much ended with Activision and Microsoft last year. So he's straight back in it.

He's operating sort of in stealth at the moment, but he's kind of straight back into operating. So very much. bullish on gaming. And I'd say on the other side, it's a little bit of a range between wanting to invest alongside more the gaming ecosystem, not so much purely on publishers. I think that obviously King and Candy Crush were such an incredible zeitgeist and breakout success. I think Match 3 and sort of casual gaming really rode the kind of mobile transition that we saw be so large for them and when they were coming up, I think obviously the gaming industry has moved a lot.

And of course, you know, my colleagues are still, you know, very interested in what's happening. I think a lot of what's happening, obviously, around AI and sort of the broader ecosystem, you know, it's still extremely tapped in. So we do look at gaming deals. But I'd say that, you know, it was partly the thing that you allude to about having, you know, knowing too much that has meant that we've, you know, with the private investing deal on the side, we really moved out of purely doing gaming. We did also have a non-compete for quite a long time with Activision.

So we were sort of forced in my earlier years to do sort of the gamification of adjacent sectors versus competing immediately with their former company. How did you guys react to the news last week around the App Store and the changes to the App Store's payment or the forced changes to the App Store's payment policies? Look, I think that, you know, I don't want to speak for them, but they certainly had an ongoing, very interesting relationship with Apple throughout the course of, I guess, as Candy Crush was coming up, I think also, you know, they really began at a time of sort of the internet portal. You know, they really had to deal with how, you know, they were dealing with, you know, Facebook at the time matter and also Apple. So I think that, you know, broadly, you know, we're hopeful around changes coming out. But I think that certainly the issues that we faced, you know, as operators, certainly are, you know, the world is drastically different now.

We're no longer really at the fight to try and win mobile, which is really, you know, how they were having to come up at the time. So I think it's too early to say. But it's certainly something that, you know, my colleagues are tracking very closely. And certainly Sebastian Knitson, who I mentioned who started his own new company, is actually facing now directly as they launched their first game. So let's see. Gaming is such an interesting venture category because I feel like over the last like five years, there's been a ton of breakout games.

But very few of them were like true venture-backed like seed series A from main funds. Like Fortnite came out of Epic games. It's like a 30-year-old company. Roblox had this venture story, but all the early back. They became rich off of Roblox. Roblox was kind of like their main win. Then Among Us and Balatro were these huge successes, but they were kind of just like random indie developers

who just kind of got lucky and weren't really like financialized in like the, oh, we bet we're building a team. And then a lot of the game companies like pivoted, like Slack was originally a game company. And so if you go into Silicon Valley, they eventually push you into B2B SaaS if you're a game company. But anyway, I mean, we can talk about gaming all day. But I want to hear your take on the UK-US trade deal.

that was the first one to fall last week. You had a great breakdown on X about it. I'd love you to take me through kind of like, what was your expectation? How did you process the news? And what do you see going forward with that particular trade deal? And maybe before you dive into that, even kind of the on the ground opinion in the UK,

how UK citizens have viewed this whole trade debacle, given that they have a, we have a, the U.S. has a trade surplus with the U.S. Right. Yeah, yeah, it's funny. I know a friend Ryan from Flexport tweeted, you know, the UK is the only country to have a trade surplus. Oh, the US have a trade surplus with the UK.

So it doesn't bode well for other countries, right? If we manage to like, you know, that is that is the beginning point. But I think, yeah, of the top 10 countries that the US has a trading partner with, the UK is the only one that they don't have a trade deficit with. So let's see. Yeah, look, I think it's a, I sort of find myself, of putting back my macro hat on again these days so much because we had finally this trade, first trade agreement between the US and the UK announced last week.

And of course, this morning with the news coming under Geneva of how the US and China are hopefully going to move towards closer bilateral trade dialogue. So I think first on the UK piece, I know that sort of from behind the scenes that this has really been something that has been in the minds of the UK government ever since mid-February, when we had, or end of February, when we had that very sort of, you know, very productive and positive meeting between Prime Minister Keir Stama and President Trump at the White House. I think that there has been on both sides a real determination to work towards a,

some sort of bilateral trade agreement that, you know, went beyond the Liberation Day board where I think we were, you know, at 10% with some of the lowest countries. So this has been in the works for weeks, certainly. I guess a few months since then. And I think the reception has been broadly positive. You know, I think that, of course, there are still talk to be had. I know Ambassador Peter Mandelson has said that this is not a still picture. I think he said it's a movie that the trade will continue.

The trade talks will continue. But if you look at the headlines, it brings down to the average, I think, tariff to somewhere between 1 and 2%. That is the aim, which of course is hugely beneficial. official for both when we were really sort of stuck at the 10%. So I'd say it's been broadly very positive. Obviously, markets reacted well to it. And it really hit some of the key points around sort of steel and autos,

which I think are in both sides' views, potentially a blueprint for how the US is going to engage with other trade partners. I think that where I would like to see things move next is really expect. landing this into a broader dialogue around UK and US tech partnerships. I think that that is certainly something that we should keep our eyes peeled on over the coming weeks and something that, you know, I think there's a lot of interest on the UK side about really firming up our relationship with, you know, US big tech. We already have a fantastic working relationship with many, you know, large tech companies in the US.

But I think we could really push the needle on some of the sectors that have become issues of national security. be it, you know, AI, defense, robotics and stuff like that. So yeah, broadly, broadly positive. And I think it's been interesting to watch how we've seen, you know, the UK public and also UK big industry react to, you know, the new administration and what the White House is doing. Do you think the UK will be kind of a net importer or exporter of venture capital over the next a few years, obviously, there's a lot of LPs there that would love to invest in American companies. There's also new projects to invest in UK-based entrepreneurs and new startups. So what is the trade balance look like from a venture capitalist perspective? I think it depends

who you ask. I think that traditionally we have struggled in the UK. And I say we, obviously, I'm British. I do. I have personally, as a microposome, it's spent about 70% of my AUM on the US. So I think it's clear sort of how I've voted. with our wallets. But I think certainly if you look at Europe, there has traditionally been an issue with getting scaled capital to the pre-IPO stage. So, you know, you had a lot of this homegrown seed capital and sort of, you know, of course, US counterparts setting up their UK offices, be it at Excel, who's done very well, they're an index, who are, you know, still big firms in the US, but they really found their footing in Europe. And then in recent years, you

had, you know, Sequoia come in, you had, you know, Andreessen Horowitz do a big crypto play, NEA and many others. So I think that there is certainly continued to be sort of a, well, you know, the UK has really wanted to welcome US venture capital, but of course it has also raised the question of to why isn't there more homegrown, you know, European and US funding at that later stage. So I think, you know, in some ways the industry is just more nascent there. So the law has taken time to scale up these these funds. But yeah, I mean, I personally think that we should continue to try and push for greater collaboration on the capital side at those latest stages as well. Do you think the UK is a good kind of launch pad for investing in the Nordics

broadly? Because the Nordics seem to be a little bit of violation of the narrative that Europe isn't producing generational companies. You have Spotify. Skype, there's tons of stuff out of Sweden and Estonia. And there seem to be pockets of like really entrepreneurial cultures there, even if it doesn't fit like the traditional Euro narrative. So is that an interesting angle to go set up in the UK and then deploy into the Nordics broadly? Okay, first of all, I want to know if my colleagues have been texting you because four of my founders are Swedish, the other is Italian.

So this is definitely like a setup. But yeah, look, I'm, I mean, we're a big. fan of obviously investing in the Nordics. I think that my general view and, John, I saw a lot of you lost at the end of last year when around the US election, I was on the ground in the US for a couple of months during that ramp up. And I think I remember on election night being at a sort of election watch party and a lot of people were saying to me, okay, well, this is great, you know, in many ways for the US tech scene, but how will this impact the UK and Europe? And I was the one going around saying, no, this is a fantastic chance for, you know, the UK and, you know, the US's closest

allies to also benefit from some of these, hopefully blockages that are moving, especially within the tech sector. So my view is that, you know, the UK is still a fantastic place from which to welcome, you know, tech companies as a gateway to broadly Europe. I do think the Nordics are definitely a sweet spot. So King obviously basically also being a part of that. The Nordic gaming community is huge. They didn't even make this list.

I'm looking at this list, cursor, kind of MySQL, Minecraft, Spotify, your Skype, or. Yeah, King. I mean, King invest listed on the New York Stock Exchange, but, you know, its headquarters were in London, but its co-founders were, a lot of them are Swedish. But certainly we, you know, our second office really is Stockholm. So, yeah, a big fan of that. And I think that it's proof that both in,

the Nordics and also in Eastern Europe, you've had some really breakout sectors, including gaming. So, yeah. What about, what about foundation models? Is there, has anybody kind of raised around like, we're the UK open AI, let's raise, this has got to be worth a billion, right? Got to be worth a least a billion. Yeah. So we haven't, so, yeah, we haven't had our own sort of foundation model in that sense.

I think that's, that's something that the UK is seriously considering. and as we think about this theme of sovereign capital and secure capital and how the UK is actually going to be able to compete at that level of this sort of AI ecosystem. Of course, across the channel in France, we have Mistral. And, you know, famously, we've had incredible generational AI talents on the engineering side in the UK for a long time. But, you know, DeepMind was started in the UK and obviously moved over to Google. So I think that certainly as the UK government thinks about this next generation of AI companies

and sort of technology companies in general, it's certainly something that is very top of mind for how both, you know, DEC, the Department of Science and Technology, the Foreign Office, and also number 10, thinking about these things. Have you thought specifically about like expatriating entrepreneurs? I mean, just go find the best entrepreneurs, set them up with the first. around, take a huge chunk of the company and then say, hey, go to San Francisco. That's where you need to be. Go build the company.

Because there is, the aperture widens when all of a sudden you're talking about, yes, American companies, but founded by European entrepreneurs, then you're in the trillions of dollars of market cap, right? Yeah. Sure. I mean, if we already look at companies that, that, then we get, we sort of, we can draw a line nowhere. I mean, Stripe, in theory, has British, like, you know, founders or, you know, Irish.

Irish. Let's not group them in. I know, I know. I'm a separatist personally. I am against reunification. I think what's important, no, is, you know, it's keeping, I think for the UK government would be also keeping its homegrown talent in the UK. I think that's obviously, you know, a very sore spot as to why deep mind, you know, did leave. And I think that the UK, in my view, needs to look at itself and consider what are the requirements that you really need to build, you know, multi-trillion dollar market companies in the UK and here are more broadly. But, you know, I think that there is, if you look at this current administration, there has been a lot of really encouraging signs.

Early at the beginning of this year, we had the AI, an AI Act that PM signed off on, where 20 new ideas around how to enable AI progress in the UK specifically were announced and adopted. And that really came from a lot of great work from, you know, collaborators in the venture capital industry in the UK. friend of mine, Matt Clifford, who has been advising number 10 on, you know, really the opportunity around AI and AI security. So yeah, let's see. But I think that my hope is stepping out more broadly that the conversation between the UK and the US can also start a bit of a blueprint for how the US starts to work with some of the other allies on tariffs and also on tech partnerships.

It's great. Well, thank you so much for joining. Well, you are our official UK correspondent. Let's get a sound effect for that. Let's get an air horn for you. We need the music. I'm honored to be that, guys. Yeah.

Thanks for coming on. We'll talk to you soon. Good to see you. Good to see you. Great. Awesome. Nice guys. Good see you.

Really quickly. Let me tell you about Bezell. You can shop over 25,500 luxury watches, fully authenticate in-house by Bezels team of experts. Go to get Bezell.com. Tell them, TBPN, sent you. And we have our next guest ready for us to join the show, the founder of Intercom. Welcome to the stream. Yo, yo.

Gentlemen, who are you? Look at that microphone. Look at that microphone. Look at the lag time. You were ready for this. Terrible? No, it's good. It's fantastic.

It's good. It's fantastic. I don't want to mispronounce your name. Can you pronounce it for me? Well, before I tell you, there are two types of people in this world that found out there are those who guess. And then there are the rare few fucking gentlemen. But thank you because you'll never guess.

It's pronounced. So kind of like O-H-N-O-N-O. Wait, you you lied right as you said it. So it's, oh. What is it? It's pronounced own. Basically, oh, own. So as if you, it's if you spelled it, oh, H, N, own.

Awesome. A lot of people say Owen, and I will accept that. Okay. Oh, well, thank you for joining us. It's great to have you. Would you mind just giving us a brief interview of kind of a brief intro to your kind of entrepreneurial journey and the company that you built and kind of then we can dive into a bunch of the hot topics.

I'm sure we'll be talking about AI, venture, all the top, all the typical topics. but I'd love to know kind of like your story. Yeah. In a nutshell, I moved from Dublin, Ireland in 2011, a long, long time ago to the Bay Area in San Francisco. And we started Intercom around then. Intercom at that time was a general purpose customer communication platform. We had a cute little messenger, the first of its type.

You put it on your website in your app. And it was great for sales, support, marketing use cases. and it blew up two or three years into intercom. We were the fastest growing software companies in Salesforce. Slack subsequently beat us, but that was our hot start. And yeah, it's been an incredible journey since. This is part of the whole snippet trend, right? Like you were able to boil down installation of your product to just like a few lines of HTML or JavaScript.

And so the integration all of a sudden went from get a four-deployed engineer, build on top of our API to drop this snippet into your website and you're good to go with some basic functionality. Is that correct? Yeah. Yeah, there was other people doing it. There was a company called O-LARC years ago that had like a kind of a live chat thing. We were a little different. We were a messenger. So it was a mix between live chat and kind of, you know, asynchronous. But what was different about our approach was that you'd install the JavaScript and it would start to learn about your customers. And so you had a really data rich customer experience. So in many ways, it was almost like a CRM for digital business.

but at core to it was all the communication stuff. How did the business model evolve? Were you on kind of just like a monthly plan for a little bit? Did you go to consumption based at some point? We tried approximately 14 trillion price plans. Most of them were unsuccessful. But we charged per seat and per message. The problem with a really horizontal product like ours was

was that you're trying to capture value in a dozen directions. So you have a super complex pricing model if you're already trying to do all the things. So we did that and then eventually we picked a line. So these days we're in customer service. Okay. So you've tried all these business models. I have to ask you about Salesforce.

They're moving to this like ticket completion pricing, getting away from seat pricing. Is that a reasonable strategy? Is that the future like Mark Benioff has kind of said? Are you testing that? Do you have any information on what we should expect from future pricing of these types of services in an AI-driven?

world. Yeah, I think it'll stick. We were the first charge per resolution. Salesforce came to me. Oh, there we go. Yeah. Hey, hey, we're going to hear. What do you guys think about this? Does it work? Yeah. And, you know, we like it. We like it because it's aligned with our customers. We don't charge you if we don't do work for you. And every time we do work, we charge you. And when we make our technology better at doing work, we earn more money. And right now, uh, forgive the plug, Finn, our AI agent is the highest performing agent in service. And so we earn more per customer, at least when you charge for resolutions than the other guys, because we just do more work.

Oh, interesting. So it's highest performing, not on a particular benchmark, but on just how much money it makes. No. Well, yes. Because I've been saying that's actually the real measure of AI is how much economic value can it create. And it's weird to say because we want to be like, oh, it's really good at math or whatever. But I'd much prefer like, no, it actually does a job.

It solves a real problem. And there's no better measure than that than economics. Yeah, absolutely. You know, work in some sense is a bit of a commodity to degree, right? And so, you know, if you can charge more for your work than others or if you earn more from doing work, it means that you're providing more value to the world. Yeah, totally. So yeah, we have more customers than anyone else in the AI service agent space. We have more revenue than anyone else.

That's very good. Yeah. We have an higher average resolution rate. Have you been in general? applying, applying AI to customer service makes a lot of sense. There's a lot of spend there. It's just a generally good application of LLMs. Were you surprised at how many companies came in to try to compete in the category, given that the intercom of AI, I imagine, is intercom? Right? Because I feel like a lot of companies came out and just said, like, oh, we're making

AI agents for CX or we're making, you know, more, more native experiences. But in this case, it feels like, you know, there's always been this debate, right? Is AI a disruptive innovation or is it an extending innovation? And I'm sure as the models have gotten better and better, you've just gotten more excited about their potential at InterGOM. So maybe talk about the kind of market dynamic. Yeah, it's been interesting. So in hindsight, I'm not at all surprised because it's a giant category. I mean, the space we're eventually going for is all customer experience, sales, marketing, success, service. There's certainly trillions of dollars spent on salaries globally doing all of that work. So, of course, many other people are going to chase it. I do think

that categories are going to be more, you know, they're going to be shared in a way that they weren't in the past. There's no way one company gets half of that trillions. It's just not the case. There's going to be many different players in the space. At the time, I was a little surprised. we were first out of the gate and we had so many different advantages. But I was only surprised because I had yet to realize that the times are changing. The technology world is just so much more competitive now. Like when we started in 2011, you'd pick your lane. You probably would have a direct competitor if you were doing something interesting,

but you wouldn't have 16. That just was not the case. And I don't have a hypothesis for why that is. I mean, if I had to guess, I guess I would say that AI is most likely the biggest innovation the world has seen since, you know, the internet, maybe way bigger than the internet. When there are new technology changes, opportunities open left and right. And opportunists come out of the woodwork. I mean, opportunists in the bus way, wonderful entrepreneurs. Yeah.

I come out of the woodwork to go and pounce on those on that moment. So I don't know. It's fascinating. It's incredibly competitive and not just our space. Every single category in AI. I mean, think of like note taking. Think of, you know, just make anything up. It's Gary Tan's fault.

Let's just say it. I mean, I love the guy, but, you know, we got to, we got to hold him accountable for all the competition. Wait, who is that? I was saying, I was saying I love Gary Tan, but it's clearly his fault. There's so many startups now. I mean, half the intercom competitors are at YC company. Yeah.

I mean, you know that like something like three or four of the top payroll companies all went through YC? Deal, Gusto, Rippling. There was this narrative of like, oh, C doesn't fund competitive companies. It's like, no, they fund a ton of competitive companies. Totally. But it's great. Yeah. I mean, competition breeds innovation and breeds, you know, these huge power outcomes.

It's all, it's all good stuff. But it is very, it is very competitive right now. I want to hear about your evolution with artificial intelligence. take me through, were you tinkering with the GPT3 Da Vinci API Playground, were you trying to implement that stuff? Were there times when it was unsuccessful and then it became successful? Is reinforcement learning and reasoning the critical turning point for you guys? Like, how have the different eras of AI over the past few years played out into your product strategy?

I will answer that question. I first do have to mention that I think you just heard of burp live on air. Did you hear that? No. You didn't hear that? Okay, good. All right, just a lot of Laquois. It was just like a good word of you.

I heard in my ears. I'm like, oh, my God. We're all getting carbonated. Yeah. Good thing we're going to cut this out, right? Yeah. Yeah, good thing it's not live. Yeah, good thing it's not live.

Thank goodness. We didn't randomly choose to live stream the show. So to your question. You know, so there hasn't been, for people in our space, major innovation at the model layer or within the model providers that has dramatically changed how it is that we function. So much for the innovation is in the orchestration around the models and a lot of ways in which we've got these massive performance gains over all of our competitors is that we've built a lot of our own AI to allow us to do more sophisticated

rag and use multiple models in different types of ways. We've needed to be very experimental and we've run something like 200 different AB tests to eke out different improvements along the way. Going forward, the next innovations will likely come by the way of these application layer companies starting to work in their own models. At least right now, this space is so dynamic, so I may have a different opinion in just weeks.

At least right now, it looks like the biggest leaps forward for the verticalized AI application companies will come by way of building verticalized. offerings where they have applications and models kind of working together and somehow leveraging that interconnection. Yeah, we need an application layer sound effect on the soundboard. Yeah, I wonder, I imagine that there was an era where you were effectively building AI agents or AI chat bots back during the chatbot boom that were defined much more like linear business logic if-than statements.

and you layer those up and that might be derided today, but it was value creative back then. I'm wondering if there is a world where having done that work results in a better product today because you can slot LLMs in to the business logic or train a model to interact with some of the business logic because I imagine customers and companies do want to enforce some rules and restrictions around the interactions. And so if you already have those those those bumper lanes on the on the metaphorical bowling alley, you're you're going to be able to deliver a better product. But can you talk to me about the evolution of that that rules based chat bot

development to modern. Oh, I just have an LLM that one shots it. Yeah. Well, you basically said all the smart things I could say, but I'll just repeat it. There was kind of three generations around the third generation now. The first generation was all the conditional stuff. And we had pretty sophisticated conditional stuff where you could build big, beautiful, graphical diagrams that showed exactly how the customer would flow through your machine.

Yeah, that was great. Generation two used machine learning, and it used various heuristics that learned from all the human data points we have about conversations that happened to try and route people, to the right answers in your knowledge base and it would pull out little snippets.

So we had a thing, we ended up calling a resolution bot because I can share exclusively here that Zendesk threatened to sue us because we had an offer called answer bot. And little did we know, apparently they also had an answer bot. Oh, no.

Yikes. Generation three now is LLAM power. And so that is one that uses, you know, AI as we know it today. and it does away what everything in generation wanted to, except, as you say, there are some companies like us that can leverage those innovations. So we sell to banks.

We sell to businesses with highly restricted operations in regulatory environments that don't allow them to make mistakes. You know, you get it. Our customers very much want confidence that the LLM is not going to just hiccup and bump. its way in the wrong direction, you know, hallucinate, even though, you know, we've managed to squash out pretty much all the classic. Classic example would be, you know, somebody gets the LLM to refund them a huge amount for

some purchase that they don't intend on. I heard about that at an airline. Yeah, I think a big question I have is at what point is your AI actually better than an agent that would use the platform, right? because right now, over the last few years, as AI got kind of good, but maybe not great, I would still find myself in that sort of cycle of being like, you know, kind of getting frustrated and just saying talk to a human, talk to a human. But you could eventually get to the point where somebody would actually just prefer to talk to an AI because it's instantaneous and you can really

potentially move a lot faster than an agent who's working across, you know, multiple open tickets. So I'm curious, like, what is the point where it kind of flips where the average user is, you know, is preferring to talk to artificial intelligence? Yeah, the world is coming to exactly that point for the average user, but it's there for a lot of people already. You know, we have multiple funny instances where we see people asking for the bot. We see requests increase when people realize that they can ask quick questions and get quick answers. we see resolution rates and kind of response times improved dramatically for certain categories of questions.

The dirty little truth in the era of AI is that well-applied AI is far better than humans. It is always available, you know, always stays on script, is never rude, you know, often gets the answer far more right than the humans. We've run a couple different studies where we've classified the answer. that human agents provided using internal, you know, LLM products that we've built.

We found that only 65% of the tickets that humans marked as resolved are actually resolved. So the humans are way worse than they think, way worse than they report, and just anecdotally, you will have far kind of mess your experiences that humans,

then you will with a very good AI agent. The problem is that still most AI agents are not very, good. Most of them are in fact cheap cheap t wrappers. And so there is a lot of kind of crappiness. The very big consumer products that already provide shit support don't really mind, but in the future won't be acceptable. But we are nearing that point. Yeah. How has it been a challenge figuring out the right way to message intercoms products given that many of your actual core DAUs on the customer side that the actual reps are people that over time, like,

They have to be using the software and realizing somewhat slowly or maybe quickly that they aren't as good as the underlying system. And that's kind of a difficult, very human question. Yeah. Look, the reality is, there's a couple realities. One reality is that those people on the ground and even the support leaders are often not those buying these technologies. You know, there's a vested interest in those two groups of people not adopting them. And so a lot of people adopt these technologies are CTOs, even CEOs that realize their operations and customer experiences could be dramatically improved by bringing these agents to the fore. I will say that often these agents are almost sugar on top.

They resolve at least right now some of the easier issues and the humans are still needed for the harder ones. They're serving on-met demand. So sometimes people will deploy Finn our agent to their free customers that they never gave support to before. but often when they deploy it like I mentioned earlier people will ask more questions and so it increases demand too so you're not really seeing we haven't seen big mass layoffs where the humans are just obsolete that said all of that said it will compete with human work and AI and robotics is simply going to compete with the most repetitive most of meaning least enjoyable least purposeful work out there And if you talk to customer support reps, very few of them want to be customer support reps long term.

Yeah. It's a great way to get into the tech world, earn a tech salary, learn what you want to do. But pretty much all tech people have their mind and eye on something else. Yeah. What are your high level thoughts on the AI sales agent market? You know, we've seen hundreds of companies at this point. And the face says it all. But yeah, I mean, you said earlier in the call that you guys will eventually get into

sales and marketing and so I'm sure you have a ton of opinions on it and great customer service is often a sales role yeah closing the customer as they ask questions and the best sale the best customer service reps I've ever worked with have always been able to turn a customer interaction into a sales interaction yeah and it's just a much different dynamic sort of taking inbound concerns totally back with the product trying to solve it with AI and then passing it to a human quickly versus spamming somebody with just nonsense my my favorite one was a sales agent that was like reaching out to somebody in New York. And it's like, hey, have you, what are you like doing in New York City? You should try to go to

the opera and Central Park. Yeah, the Big Apple. The city that never sleeps. I'm ready to close. Anyway, yeah, what's your take on the AI BDR race? I don't know. It's, it's, you know, the way they say marketers ruin all channels. You know, all channels get, you know, exploited and trashed and spammed and completely destroyed by marketers because the job of marketing is to find, you know, the frontier like white space where it's not flooded by other marketers. So all sales and marketing is really exploiting to death all opportunities until people are thoroughly fucking sick and sick of the teeth of them. So, so that's going to happen with AI, you know, unfortunately. And it's already happening. You know, I've gotten tricked a couple times with

some emails. I open them. Some of them are kind of on point and you're like, fuck you. you this is, I don't even know if I'm allowed to say this F word. I've said it three times. We're working on getting a bleeper, but you're good. We are a family-friendly show. We don't swear, but we won't hold it against you. Okay. Thank you for not holding against me. I will show my my very best to not use it one more time. But I don't know if it's going to work. But like you said, there's a full spectrum. There's a massive spectrum. And yeah, no, the challenge is the any tool that's decent will get such rapid adoption. Yep. Because of the internet being the best distribution channel ever and X even.

It used to be faster than apps. Yeah. So I think the issue is is any tool that's worth anything will just be used so much that it'll quickly. Yeah. Lose any type of real edge. I have a follow up on the cost side of things. Obviously, some of these API calls are quite expensive, especially if you're doing 03 level reasoning, test time inference. Like everyone knows that it'll get cheaper.

It'll get baked down. to A6 or there'll be specific chips that run these things really cheaply in even six months, even a few years. The cost per token is dropping. But at the same time, we've heard about startups that are like, yeah, I burned through 500k of open AI credits in a couple months testing this thing out. So is there a world where you've actually seen an impact on your cogs or your margins in the short term?

And have you had to work with the board or investors to kind of think through that cost-benefit analysis or have you always been able to kind of dance around it so that the business always feels like a software business and feels like it has very high gross margins like any other tech company? Or is the fundamental gravity and the laws of physics around building a software company changed or at least temporarily changed? I think it's too early to say and I think it's a really pertinent question, obviously. When we started and we launched Finn like four months after chat GPT came out, each resolution cost us $1.20-something

cent. We charged 99 cents, so we decided to take a loss on that. We don't share our margin at the moment but it's very, very healthy now. Yeah, of course. I think businesses that like ours build very deep applications on

top of these base level models will be able to extract plenty of value because of what makes them unique. Those that are simply GPT wrappers will need to charge something closer to GPT prices. model prices are just going to continue to come down. So in the same way that SaaS companies were able to make 80% margins on AWS,

in the future, pretty much Evan will be able to make 80% margins on OpenAI or AWS when they run their own model. So I actually will see, but I don't think it's going to net out where the margin structure is completely different. Yeah. How much have you followed the Clarnia CEO? every every every every one day he says oh we fired everyone now he says oh we rehired everyone next week I think he just found the the ultimate attention hack is we got to have on the show yeah got I'm on the show but it's you know basically just just flip-flop on risk off yeah risk off yes risk on nice I don't know yeah he's really good at marketing yeah yeah what has your kind of founder journey

been and where do you see the company going over the long term? Like, uh, from the outside, I, I think it's, you know, there's a lot of people that would see intercom and just think like, oh, like venture back, they're going to sell and get rolled into something else. It seems like you've been in founder mode for a long time. And it doesn't seem like the ratings on the wall for you to stop. You're enjoying what you're doing. Uh, what do you see your, the rest of the Yeah, in many ways, the company, the biggest opportunity is still ahead in terms of being perfectly positioned to roll out where we talk to a founder and we're like, wait, like, if he's really going to work on this for like 20 years like it's going to be insane so yeah i'm interested here like what do you

talk about your ambitions yeah yeah i mean i'm 14 years in now which is long you know most people are like oh there again well you know we wear an overnight success two years in and then we just did it for another 12 years that's great yeah maybe we mess maybe we messed that up you know there have definitely been periods um certainly near the tail end of our first chapter where, you know, we were all tired. I actually was off for two years. I was sick and tried to run away and ended up coming back. That's a whole other show, perhaps.

But the AI thing definitely reinvigorated us. Totally. And, you know, it's a, you know, I won't deny that I'm 41 now. I was 26 when I started Intercom. It's a different thing when you're a little older. An AI, give or take, is a young man's game. Certainly now that the world is so competitive, people are working their damn asses off.

And a lot of our competitors, they're in their 20s. They're working literally seven days a week, 12 hours a day. We don't do that. So we have to take advantage of the things that make us unique. But the thing that keeps us going, that keeps me going, is just to scale a potential. You know, our business is accelerating dramatically now. I think next year, our growth rate, our annual growth rate, will have double three years in a row. And these are very significant growth rates.

So for, yeah, thank you. That was all I was looking for. There we go. I mean, guys, chill. He's still talking. He's still talking. Come on. Thank you. Thank you. Thank you. Well, yeah, for a company at scale, you know, in the hundreds of millions to accelerate that that pace is just insane. And it's because of this AI stuff. And yet, very literally, we've just scratched the surface. I mean, if we're going to do the future of work, then we're only getting started. What do you think about the early stage AI market, the rapper market? People were very bearish on it. Then we saw Open AI acquire Winserve for $3 billion. And it felt like, you know, it's a very special company, very incredible team, but it felt like it could be game on for every big tech company needs a rapper or a startup in every single category.

And so all of a sudden you can see, sure, maybe some of these companies don't become massive public companies. But if a founder out there is building a narrow AI solution for something that can slot very neatly into AWS or Azure or Microsoft Office, you could see kind of game on in the MNA markets and some good outcomes for the founders and maybe even the VCs. What do you think? Yeah. I mean, from what I hear, their M&A activity is picking up. Certainly from our perspective, all sorts of bigger companies have started to ping us. It's kind of a thing. You know, what I respond to this general question is is, is I just ask. how big is this market really?

I mean, if we are doing the future of work, if, you know, oh, we lost. Oh, there we go. Sorry. If cursor or Wayne, surf, we're doing a big majority

of future development work, these things are insanely valuable. So all of this is just way bigger than software, like AI, A applications, wrappers, et cetera, maybe they're 100x

the total software market. Maybe there are a thousand X. Maybe that's way too much, but think about it. They're doing all of work. That's great. I really, VCs get, you know, so much shit, but I would love for all the VCs. Oh, swear jar, buddy.

Yeah, yeah, yeah, I got to put one in that's a swear jar. But, but I would love for all the VCs to just be right this time. Oh, yeah, for sure. All the perplexity of 14 billion. Like, if, you know, if they're just, what if it all works out, right? It would be amazing. What do you do before founding Intercom and would you do anything different or would you recommend that path to the next generation of entrepreneurs?

I was starting companies. I was doing consultants. thing. So after development design, I don't know. There's a dozen paths, maybe 100 paths into this. At this point, I wouldn't do anything differently. You get to a certain age in life where you love all your mistakes. Maybe you look at your younger self and you're like, wow, look at you. Look at you. Look what you did. But it made you who you are. So no, no regrets. And people should just follow their own paths. Follow their hearts. I love that. Follow your heart. Well, I am so excited for you in the whole team. I'm so bullish. I'm actually extremely bullish. I love this conversations.

like, oh my God. Yeah. No, I mean, you guys are, you guys basically, you know, 14-year overnight success in the exact perfect. Definitely in the conversation. Definitely in the conversation. But no, just in the perfect position to take advantage of a massive trend, but then also deliver that value back to all of your existing customers and all your new customers.

It's a great time. Let's hit the Ashton Hall effect and thank him for joining the show. Thank you for joining the show. Thank you. This is great. on again. Yeah, yeah, we'll have to have you back on soon. There's so much more to talk about. We'll talk to you soon. And I think we have David from Box Group in the waiting room. We'll bring him in, chat with him.

We love when a venture capitalist yaps about venture capital. It's one of our favorite activities. We got a plan. I would love to get his take on what are we going to do in August because I think August might be an existential crisis for the show. As all of you know, every venture capitalist takes all of August off. And so we won't have. nearly as many guests. I think we go to the south of France and just do man on the street interviews. Yeah, what do you do for a way? Hey, what do you do for living? Multi-stage venture capitalists. I think we have to. What about getting in a scuba diving suit and swimming up to boats and say, hey, what do you do for a living? Let's bring him in and we'll get his take. David, welcome to the

show. How are you doing? Why limit it to the south of France? There are a lot of destinations. You guys are being quite isolated. Okay, okay. So give us the full tour. How do you? How do you? do we make sure that the show doesn't implode in August when all the venture capitalists go on vacation and we have no one to yap with a show? I think you need a yacht. A yacht, okay. Yeah. Like you guys need a yacht and then you travel from port to port.

Bring the show to the VCs. Yes. Okay. And what ports are we- Take the show on the road? We go in Central Park. I mean, there's like Bay-level VC and then as they get more advanced, I feel like you can find new destinations. Antarctica for the really successful adventurous.

Yeah, if your yacht doesn't have an icebreaker, I'm sorry, you're not ready to read, you're not ready to lead the series Bs of 20, I agree. I think we should get into halo jumping. So when we get Intel, hey, there's a big VC in Antarctica, we're just pulling the parachute minutes before hitting the ground, seconds before hitting the ground, show up with the mic. What do you do for a living? And if this period, as you alluded to, works, I mean, the destinations were going to me into tremendous. I think so. There's something here. There's something here. We'll keep

noodling on it. Anyway, how are they going? Do they have a wander location in all the places you need to go? I mean, let's get the plugs going. We do need to wander. We do need to wander. We do need a wander in Antarctica. Yeah. They should definitely get some of those stunt locations on board, the Greenland location, the ones that just pop up purely for marketing mostly. But I would take them up on that for sure. Yeah. But yeah, how was your weekend? How are you proud? processing all the flurry of news and business and trade deals and biotech? Do you have any exposure in your portfolio? What are you excited about right now? I think we my wife makes clothes in China. Oh, okay. So that's my main exposure. So I live with exposure. Sure. If you will. And so

making clothes is not a good business for anybody. And then when you get tariffed aggressively, you start doing math and your math already doesn't work. Yeah. And you're like, oh, what if we make it worse? And so I think I live with her emotions, which impacted me. I think as a venture firm, we're generalists, we have exposure in all different categories. I think, you know, the TJ who's joining you after, I think we'll talk about the pharmaceutical side of this. I think there's, you're in a world where reading headlines reacting to them and then waiting until the news comes out, right? you read about the China deal. It's like, we made a deal. We'll let you know the details.

Yeah. Okay. No rush. Market immediately starts pricing it in. Zero rush. Just let us know whenever you get a chance and then we'll understand things better. And I feel like all of the news is getting rolled out like that where you're like, here's the headline, more to come. And I think reacting, again, reacting to that as an early stage VC is important for Twitter or what we call X. It's important. for podcasts and really unimportant for the actual job. So you have to balance these two stressors out, which is like, how do I get engaged and sound like this is really impactful to me?

And it matters and I have to overreact. And then on the same time, it just doesn't matter. Well, I think for you, if you're a true contrarian, which every VC should be, everybody's bearish biotech. You know, they've had a bunch of issues over the years. you should just invest in like 30 new biotech companies today, even without any sort of real insider edge. We probably did.

I was on an airplane today and then the chance that we did that today. Like 30 new deals. Yeah. We're investors in Zach Weinberg's Curie, which in fact does 30 new biotech deals regularly. So we have achieved your goal. Yeah. I think he's hopping on the show next week to give us his tape on all the biotech stuff. Yeah, there's going to be three more news cycles.

Came and chill. Yeah, I'm sure. Yeah, I mean, talk more about that idea of like patience and venture. There was this headline recently that Tiger Global, they got really stung during the ZERP era, but they're looking a lot better because they put a bunch of money in OpenAI, and that eventually seasoned. We saw the same thing with the FTX fund buying a big stake in Anthropic and the deal winding up looking great over time. what uh what and they invested in cursor too oh yeah cursor is a open a i invested in cursor right yeah

yeah uh you didn't ftx as well yeah they might have yeah but they sold that that got sold by yeah yeah yeah yeah i got sold in like the bankruptcy no one knows who bought it yeah that that that that that ftx's investment was not one of the best investments ever it was the person who bought it out of the cursor mouth on twitter that was shared made no sense yeah the 200 to 500 million. That's not how math works. Yeah. Like there's no equation that equals that.

Like you can't get there. So I was confused by that, but I didn't want to keep my mouth shut. Maybe they invested like a $50,000 post money. O3 is not very good at numbers yet. Yeah. We invested in the seed pre-seed of cursor and I, that math wasn't correct. Yeah. Okay.

I can tell you that. Otherwise you wouldn't be doing podcasts anymore. From a hotel room. Yeah. Yeah. I would be on my yacht. Yeah. Yeah.

I mean, speaking of like cursor and just like the AI application market broadly, how are you thinking about demand from the hyperscalers for finding a dance partner in the application layer companies? There was a big meme for a while that all these companies are just going to get steamrolled by the foundation model companies. Now we're seeing deals get done. And I've been, you know, arguing with Jordie about, you know, what if there is. is a world where every hyperscaler needs a dance partner in the AI application layer, and there's just a flurry of M&A deals that seems plausible, but Jordy's a little bit more hesitant about that. What's your take on how the how the M&A markets look for application layer AI companies

in big tech now in the new era? I think, you know, application layer companies is a catch-all of so much. many different behaviors and pass in. Does every application layer company look the same? No. I think what you're looking at is in many ways a brand. And there is like a speed momentum and scale advantage to not being first mover, but to being fastest mover. Is there a barrier to switching like there has been historically in software, probably not. But in many spaces, barriers haven't been the thing that defends winners. It has been brand and it has been sort of recognition. And I think that that piece has been under sort of underappreciated. And Open AI is the perfect example of that, right? Chat

GPT. The idea that that like name created, it became a household. It's like hard to say it's weird. I don't think technical people understand. Like, why is that the name? But yet, here it is. Yep. Household name. Yep. It's very hard to disrupt that on a better model.

Yeah. A better piece of technology isn't going to suddenly, like the same way Google won search by Google becoming the verb, not because Google's search engine necessarily was always the single best product, the single best tech, even though it was, for the most part, I think there's a brand value. And so at the app layer, I think, brand is equally going to be important here. If you can, and more users, more usage on your product,

it ideally improves because of, as you know, AI. And that's going to matter. There's a compounding value of scale that's different than just the initial momentum. And I think that that's underappreciated. In terms of M&A, I'm more interested to see if the big companies need to buy app layer companies, right? the fangs of the world or the big seven, if the government allows actual MNA to happen anymore,

I think that's the more intriguing unlock versus all the sort of foundation models buying a handful of app layer companies. I think there is a value of sort of buy users and by scale that you're probably looking at the beginning stages. Yeah, it's almost more like product. Like I feel like Google has, their destination website.

They can point Google.com to anything, and they can funnel a billion. I mean, Sundar recently said that Google has over a billion users of generative AI. And this is the same story with Lama, of getting stuffed into WhatsApp and Instagram. They have a billion users, but the product isn't thought of in the same conversation as ChatGBT, BT,

which is a destination, a front end, the front door to artificial intelligence. And so, yeah, there's something that, there's some still secret sauce to building really great products that happens kind of only in the startup ecosystem. And if you look at Facebook, now Meta on the way up, right? They were buying things every step of the way that felt either threatening or felt interesting. So if you go back to Friend Feed, they bought a CTO there, right? And so Brett stayed on and built a big chunk of the technology inside of Facebook. But Friend Feed was an interesting early momentum company. And then they

bought, you know, obviously Instagram and WhatsApp, totally sort of separate channels within this bigger ecosystem. It ties into the business model. I look at those acquisitions is how you historically build companies in tech. If you go to this like previous 10 year period when the government sort of stopped allowing it and valuations and founder expectations just became misaligned with acquirers, you saw so little M&A. in terms of companies growing and getting bigger. And I think you're coming back into an era where the valuations of the foundation model companies, the valuations of the big tech public companies are so large that you can actually hit a founder

expectation in terms of acquisitions and not make as big of a debt. You're not paying, you know, Twitter paid 10% of their equity for surmise back in the day. Which is crazy. What can venture as we know it today survive? even in a low M&A environment just because all that matters is the power laws, or does it make things a lot, you know, the power law? It has survived for 10 years because you got it, you had a period of ZERP and then you had, I think, well, 10 years is like one fun cycle. At that, right. If you're lucky. But I think it created momentum of liquidity for a moment. And I think

it saved this dearth of M&A. And so is this moment in. And so is this moment in, time where people were able to find liquidity after seven, eight years of very minimal M&A. Do I think VC needs M&A as a secondary channel for exits? Yes. I think 15 years into my career, that was like a bet I've been mostly wrong on, is that there would be a lot of old companies buying new companies. I think AI might be a catalyst for that forcing function, right? If you are not able to buy software, you might have to buy companies to modernize. Yeah, it's super interesting, like, playing back some of the other Facebook acquisitions. Like, they bought Control Labs.

Do you remember this? It's a wristband that could basically read your mind. And so if you pinch your fingers, it would pick up on the electrical signals and be able to put that into the computer and the VR face. They acquired Control Labs between 500 million and a billion. And this was, when was this? I guess. So it's been six years. They still haven't commercialized that technology, but they're going to in the new Orion smart glasses. And so just so much patience. They have, John. It's in the

iPhone when you squeeze it. It's like, give John more of this dopamine. He likes it. The iPhone is made by Apple. I just don't know that. I just want to clarify. But but but but but but but then uh, Facebook was trying to buy a VR fitness app and they got blocked and everyone was like it's so dumb because the FTC said that they were creating a monopoly in the VR fitness industry. And everyone was like, what are you talking about? There is no VR fitness industry. But at the same time, when you think about Facebook's really or met as really long-term horizon, if they can sit on control labs for six years before seeing any sort of economic return,

they're still not even close, what could that have team gone on to do? Maybe they could have done something cool. I don't know. Facebook from 2005 to 2015, 50 acquisitions. 50, wow. 50, right? These are real, and some of them were aqua hires or some of them were the version of aqua hire that was aligned to like future, you know, value at Facebook.

I think same lesson came in through an aqua hire too, right? There was hot potato, Justin Schaefer's early company. There was a bunch of early acquisitions that were team acquisitions when it made sense. And those people became important at Facebook. And I think when you look at today's modern companies, they were not. built off of that same talent acquisition, the same way to build a company, I think you might get back to that because not every one of these companies is going to succeed, but if the value of the ones that are succeeding skyrockets quick enough, your equity becomes attractive to a company

that is looking for a home. And I think that's a real alignment. You talked earlier about companies potentially buying brand from all the companies that you've invested in. Brand in the early days doesn't matter. You know, usually when you guys are writing a check, brand, if somebody's trying to sell you on how great their brand is, it probably means there's other fundamental issues with the company, like the team's not, you know, anyways, brands take a long time to build. I'm curious if you have any framework for evaluating whether or not a team has the capability of building a brand that is going to resonate over time, just because brand can originate from so many different places, right? You can build a great brand because you

ship quickly. You can build a great brand because you have good taste, you know, and your marketing assets are pretty... Yeah, I think brand is this big amorphous word that when applied to specific spaces means something totally different. The brand that cursor has built, their audience and how they've gone about building that is totally not related to a D to C, you know, we're early investors in like Warby Parker. Warby Parker is a version of a consumer. product brand. I think in software, capital helps. I think there's this two-sided thing. One is users and a community, however, that fills in within your company. A community can be like a B-to-B startup building customer momentum where the customers are telling other people to

sign up. But I think it's users and the community of users sort of spreading the word. And I think in this moment in time, capital helps. If you're telling this like every six months fundraising story, you're creating momentum for your company that is different than your competitive set. And so if you can go out into the market and say our valuation doubles up every six months, we're able to raise from top tier investors, you're able to hire differently. When you're going to pitch in a competitive hiring process, and you're able to show that this is the rocket chip,

that you're trying to tell that potential higher that it is, I think those things matter. And I think that a brand in all those components can compound to make you, you know, some version of, I don't want to say too big to fail, but sort of you're getting, you know, made the winner. Give a lot of people that care about your success. Yeah.

And you're getting made the winner. You're the default winner. You're at some point, you're not fired for picking that company if it gets to be that, you know, big of a name. No one's fired today for picking Salesforce. And I think when you're trying to challenge a company that no one's fired for picking, you have to really be a unique outlier to get somebody to risk their job, in essence, by picking your company. We're an investor in the eight-year overnight success of Clay. Can you do your sound effect, please?

Which one? I mean, we got a lot. of them. Just do them all. Thank you. Congratulations. Perfect. Overnight success. That one. But, you know, Clay today, eight years in, is starting to do a go-to-market motion that starts to compete with some of your entrenched software players. And I think that it takes a lot of product built. And that's been, in the past 10 years, something that's been hard to do as a startup because you're not funded for these.

five, seven year builds of software. And I think, as the Intercom founder said, if you can develop software automatically or through a combination of your engineers and AI, the scale of product that you can build will happen a lot more rapidly. Tell us a story of meeting and investing in TJ back in the day since he's coming on next.

Good one. TJ, yeah, I met TJ. You must have been a rascal back, I think Skype, to be fair. It wasn't Zoom. It wasn't like Google meets. It was pre all that. So it had to be Skype.

And I was in the room with, I believe, TJ's like first employee, not T.J. And not Elliott. So it's like their first employee was physically in the room and he Skype didn't luckily TJ. And T.J. And T. And, but we didn't meet for like. four or five months after, we Skype and I invested.

So it's been a journey. You know, we were the first investor in Pilpac in that original, he was in tech stars in Boston and, you know, so I met him. Thank you. It really feels good when you get the sound of that. You gotta work for it, you know? It just brings the energy level like way up.

Dopamine, you feel like, as a VC, it takes a long time to get feedback. And this is like, Immediately. Immediately. All you had to do is do something 10 years ago. Exactly. So I appreciate that.

12 years ago. It's a thankless job, VentureCAP. So, yeah, and then, you know, watching TJ's journey and then tricking TJ into becoming a VC, it's probably a point of, you know, pride in my career and watching them thrive, being able to ski, golf, and invest all at the same time, which is complicated. First to do it. First to do it. No, it's funny with TJ.

We got to ask him about this when he comes on, but it's like I don't know if I've met, I've met anyone who's a VC who hates VC broadly as much as TJ. Like he seems like he has like a disdain for it. Yeah, he has a pride in how much disdain he has for the profession. But I think part of it he gets some ability to kind of laugh at the industry, given that, you know, he got to a billion dollar outcome. He was a great founder.

Billion dollar outcome less than five years. He knows something about an industry that no one else knows about. And his company got to a billion dollars of revenue in less than 10 years. And so I think you get the ability to kind of just laugh at everybody. It's still powering Amazon's pharmacy. It's still a product in the world. And I think his ability to have seen the inside of one of the biggest companies in the world and then operate there, which he also found funny, I think gives him this unique insight as an investor

to really have a top-down look at the healthcare system and a bottoms up as you built a startup by competing against the world. And then sitting inside of Amazon, you got to see sort of the world operate at scale. I think it's a unique perspective. Did you see Business Insider's new list of the 100 best early stage venture capital list? It's my dream in 26 to be on that list. Do you feel like you got snubbed? They went to him and they said, David, we know,

you're really number one, but you got to pay us seven figures. Well, it was ultra competitive this year, as I don't know if you saw, but Peter Thiel just barely made the list. He's at 67. Mark Andreessen didn't make it at all. So you're in reasonable company. I mean, it's a data-driven list. Yes. And nothing is more truthful in venture than data. So it's hard to argue that, you know, random pitch book and crunch-based data isn't the correct outcome for rankings. Yes, yes, exactly. Yeah, a lot of snubs on here, but a lot of great people. It's sad because I got this inbound, I got this inbound spam emails saying that I could buy a plaque for being on the list.

And then I didn't make the list. Oh, you didn't make the list. But I bought the placar at me. Oh, damn. Yeah, I mean, I'll, I'll share this with you. This year we're thinking about doing our own version of the Midas list of the top 100 venture capitalists, not just seed across everything. On what? Just the top venture capitalist TBPN's version of the Midas list.

But what's the criteria vibe? Well, I mean, we're putting out a simple call if you want to be included in the list. Packages start at 100K and go up from there. So you can reach out to sales at tbPN.com. If you're interested in being included, if you're a venture capitalist and you're listening, we'd love to include you in the list of the best venture capitalists. We accept credit card and wire transfer. And everybody was worried about how you guys are going to monetize it.

Yeah, yeah, exactly. Yeah. We figured it out really quick. I mean, year one, you crack the code. Yeah, I mean, this is like the old, like, million dollar web page. Do you remember that where you pay $1 per pixel? What was that? You accept equity.

We'll take a stake in your management company. Yeah, give us. We'll take a stake in your life's work to be on the list for this year. This could be a new secondary market, too. Potentially. Potentially. Essentially. Anything else off of mine, Jordan?

Oh, I was going to go through the timeline. Let's do it. So I have a post here. I want you to react to it, David. I thought we were going to go through the top 100. No, yeah, the top will go. Yeah, and you can go long short every, you can go on the record and go long short every single,

the top hundred. That'd be great for your brand. It's a list of the best venture capitalists. And Mark Andreessen didn't make the list, but Mark Benioff did. I don't think anyone from Sequoia did either. Oh, no. I like pretty sure.

Not that I read it for anything and thought about it. Sean and Andrew, you got snowed. Alvard has never funded any. good seed companies to be notoriously bad at sea. Those guys just can't make a buck. Yeah. You know,

those guys just scraping pennies through the couch cushions to pay. I don't think anyone on at first round me. I was a great. It's great. It's great. Yeah. I mean, not bitter or anything. Okay.

I have a post. It's post from M. Stanfield. I'm just going to read it out loud to you. David. Me, I'd like to invest in this brewery. SEC,

no dummy. You're not an accredited investor. Me. Cool. I guess I'll just teach myself some double broken wing butterfly trades by watching TikTok. SEC.

Yeah, I mean, for sure. It's your money. Do whatever. What do you think about a... I have to react to that? Yeah, yeah. What do you think about accredited investor laws? Oh, I didn't know where this is.

I thought we were going to have to fund a brewery. We funded a nicotine company. Oh, yeah. Oh, yeah. Yeah, yeah. Similar. Yeah. Accredited investor.

Look, like, I, I, I, I think the challenge of accredited investor rules is that you have it in one area of like the country and not in everything. And that's the challenge to me, right? You have like scams left and right throughout the economy. And yet in this one area, it's like, no, there are a lot of rules here. And so I think that feels unfair. So to me, you're either going to sort of clean up the ability to invest in things. across the board or you should have sort of everybody operate at your own risk.

Just like a level playing field generally, right? Yeah. And so I feel like that's the issue. And then there's all these like gray areas of like getting around it, which feel like you're not holding the bar properly. So I don't know. What's your reaction to the new news that Elizabeth Holmes is advising her husband's AI medical testing startup, which can conduct diagnostic.

tests using a small sample of blood from prison. I mean, we were saying this when we, when we, when we, I think she's so due. When she was in the news, you're saying like the real way to be vindicated is not just get out of prison, it's to come back, run back the same product and actually win. It's real. Yeah. My first question is, what are we going to do with the blood? Right?

Like, where does it go? Like the collecting is step one, but then what? Yeah. I think send it to prison. She should be doing the titration in her prison. sell. Is this about like the young boy plasma thing? Yeah, yeah, yeah. Yeah. Anyway, what do you think? Clarnas CEO says his pursuit of cost cutting fueled by advancements in AI has gone too far when you have a port port co that's later stage that says they're

cutting everyone due to AI. Do you get, do you get worried? Are they? No, I think there's like a timing and sequencing here, right? When you overstate. the present, you may be also underestimating how soon the future will be here. And so it feels like a nice mid-cycle story for the eventual outcome, as you guys alluded to before. But it, like, does 90 plus percent of customer service get solved by AI? For sure. When you look at like e-com customer service generally, like 65 percent of the questions are when am I getting my item. That feels like you can automate that, right? And then you start going to the next chunk of things. And there's like three to 10 percent that feels like you actually need to think about how you

respond here. And even in those situations, it's typically some version of a save. And so I think as you get to customer service across most companies, that becomes relatively automatable sooner versus later, I just, the idea that we need to announce that we're going to let go of a lot of people, because AI is magic, today. It might be a stretch. You thoughtfully informed us that the iPhone is made by Apple. Do you have any reaction to the news of the new Apple products that are launching? They're potentially a curved iPhone without any cutouts in the display, new meta-raybans competitors, new Apple glasses, and then Apple intelligence developments. Are you the type of person that lines up to buy the latest Apple product? Do you drive it for a couple of weeks? Big line, big line guy

over here. I want to stay focused on being a VC. A smart home, right? You didn't mention the screen that goes in your house, which I think for every VC is just like a pipe dream to have screens everywhere. And so that is another one of the products that is rumored to be coming out a new Apple TV. We're at like six years later, new Apple TV. So there's a lot of, a lot of of opportunity here to spend a lot of money. The foldable phone confuses me. Yeah. I don't know. I don't need to fold it. Well, I feel like there's an iPhone. There's like a baby iPhone for little hands. Then there's the big iPhone for bigger hands. Then there's a little iPad and a big iPad. Yeah. So the foldable phone is like you have you seen the demos

in China where it's three phones stacked together to the size of one phone that you you unfold and you get a tablet. That's pretty cool, right? So then I have an iPad. Yeah, but in your pocket. I just want to be able to, you know, you can put a newspaper in your back pocket and you pull out the newspaper and you pull it out. That could be just kind of a cool bit to do. This is interesting.

They say the Apple's pushing into robotics, which will include a tabletop machine with a robotic arm. What does the arms do? I don't know. Assume it can like juggle for you or something. Yeah, or it gets you beverages. I feel like that's the other, you know, VC pipe dream. Beer me, Apple. It just brings you stuff.

Yeah, beer me, Siri. I like it. Anyway, this is a fantastic conversation. Thanks so much. He's going to hang out for a minute to say out of TJ. Okay. I just want to see what TJ's facial hair looks like today. I have one more, I have one more post from a former employee and a friend of mine, Josh Harris.

He says American oligarchs be like, this has over 100,000 likes, by the way. American oligarchs be like, oh, I founded Bluber. European oligarchs be like, yeah, my family owns the trees. Have you found much success on the LP side in Europe? Do you go there? Is this Josh Harris from Apollo? What's that? Is this Josh Harris from Apollo?

No, Josh Harris, he was at EIR at the paradigm. I was afraid of Apollo, so I don't understand anything. Just clarifying. You don't mess with private equity people ever. A real, real card, no role. We have a great mostly domestic LP base. Okay. Damn.

No tree. But T.J. Big tree. P.J. Matrix. Yeah. Never know. Big, big, big tree LP base. Yeah.

Big trees. I talked to a lot of D.C.s that are raising new money from LPs in Pyongyang. Get in North Korea. The final frontier. And Antarctica. That's why they're there. in the summer yeah yeah exactly exactly anyway let's bring in tj and uh and we can all chat uh hopefully the the layout works here tj how you do there we go he made it he finally made it let's hear it from the

crowd yay welcome to the stream tj how you good uh it's great to have you great to be here uh and uh david just had to join too he's just so proud of you uh Not only the company that you built, but your transition to venture capital, which is the highest and best use of any geniuses time. We were trying to assign credit for your success, and we kind of broke it down like 80% David, 20% you. Does that sound fair? Yeah, I mean, 7030. Yeah, I got to give yourself a little credit. How's your, what was your first impression of David back in the day? I got to ask. You know, it was pretty good. I taught, first time I met David.

it was a phone call where I'd already told like five investors the round was closed and somehow weasel was way into the round anyway so he must have been made a pretty good first impression i think it was Skype was it phone uh well i was like at some conference and we kind of met at Skype on a on a Skype but then we actually talked like the next day on the phone and that's when that you remember i do i feel like your memory is more shot than that yeah i know it's a rare it's a rare memory for me thanks for thanks for letting that stick is that important for Yeah. Very meaningful.

I've been here on drug prices to get this conversation started. I'm very exciting. Were you, my last question for David, were you worried that that TJ would, you know, sell secondary at the B and get too caught up in Porsches and that's in that whole world? Or did you know that it? I saw it at the B and I bought a new 63 wagon. There we go.

There we go. There we go. I was worried about TJ. It's still my daily driver, actually. I still drive that car. I was worried about TJ selling. drugs at the B. Honestly.

That was amazing. Thanks for having me on, guys. Awesome. Thanks for you. Great to see you. Cool. Yeah, TJ, take us through it. What was your reaction to the news?

How would you actually summarize what the proposal is? Because a lot of these press releases get written kind of aggressively and then the actual implementation is very different. How are you processing the news and what's your? And are you getting some of that context directly on true social or do you wait till it hits other parts of the internet? Wait for the delay for sure. I mean, I think maybe helpful to like level set, like lay of the land for folks that are kind of less familiar with the category. So, you know, I think probably

the problem I've been most focused on the beat a, you know, beat a dead horse on on Twitter is this rebate issue. And I think in many ways that's the most interesting part of the executive order is the thing I'm most excited about. So today, if you're a normal consumer, you go to the pharmacy, you need to fill a branded prescriptions, like a higher cost. Prescription, maybe you need an EpiPen and it's January and your deductible just reset, or you want to fill a GLP1 at the counter and it's not covered by your insurance. You end up paying something like three to four times order of magnitude what that drug actually cost in the U.S. So I'm not even talking about like what it costs.

you know, the country is no one of the cost net in the U.S. So for like in OZEPIC as an example, you're paying $1,000 or so, which is the list price, the gross price in the U.S. But the net price is actually $250. That's the price of the PBM, the pharmacy, benefit managers negotiated, and you effectively pay $750 more than that drug costs, and that money is getting captured by either the PBM, the insurance company or your employer, usually some combination of all of those things. And everyone's always bemoaned.

pharmacy benefit managers obviously, they're kind of everyone's favorite punching bag, the middleman in healthcare and they're catching all this margin. And to some degree, that's true. But no one has come up with a solution that could be an alternative path that could work better, right? That's the sort of fundamental issue is like you can hate how the mechanics work today, but without an alternative, without some alternative, it doesn't matter. And so I think what's most interesting about the EO is that there's a specific callout around

requiring that pharma companies have comparable direct-to-consumer prices to list prices in other countries, right? So you take that as an epic example. In the UK, that's a $150 to $250 drug, actually not that different from our net price, right? It's sort of similar. It's a little bit less, but it's like not that different. They're basically requiring pharma to have that sort of pricing available if the consumer is just paying cash, kind of paying out of pocket. And why I think this is so interesting is if you start having these things get priced in somewhat of a rational way for consumers, all of a sudden the need to negotiate these rebates and have all these kind of backdoor negotiations and these fees and all the stuff that creates the complexity effectively goes away because you have some version of rational pricing for consumers.

So there's a bunch of other stuff in the EO and I'm happy to get into some of the more nuanced complexities. But to me, that's pretty exciting if you actually had like normal, reasonable cash prices for the end customer. So just staying on prices, is this confounded by the fact that in other countries they have larger government-sponsored health care plans? So when we talk about Americans paying higher drug prices, are we saying American consumers versus European consumers? Or are we saying that the same pharmaceutical company actually makes more money from a single dose in America versus Europe?

Yeah. So both is the short answer. But I think what's happened in the press that has really been challenging is that everyone always talks about the list price as the price in the US, right? And so the narrative, if you listen to like the rhetoric over the last handful of years, is like we're paying 10 times as much for a Zempick or we're paying 10 times as much for insulin. We're not. The list price is 10 times as much as a list price in the UK.

We're paying, and it says this in the EO, this is definitely the truth. we're paying two to three times the net price. Yeah, the Wall Street Journal here said that the list price for diabetes medication Jardians was $611 for a 30A supply in the U.S. versus $70 in Switzerland and $35 in Japan. That's what you're talking about being not entirely accurate. That drug is probably actually like 100 bucks net in the U.S. $150.

Okay, got it. So yes, more expensive. Yeah, but not 20x. That's interesting. And so I think you're hearing, like, you know, I think you're hearing a lot of the dialogue be about, like, all the downstream implications of R&D and not going to be any investment. If these prices come down in the U.S. because they're the ones willing to pay. That's an interesting conversation. People should have that conversation.

It's pretty complicated and nuanced. But I think everyone can agree. Consumers shouldn't be paying 10 times as much when they get stuck with the full bill. Yeah. And certainly shouldn't be paying three times as much as the PBM is paying or their employer is paying. That to me is what's most interesting is you could come up with it. There's a real credible assault here potentially for that problem, which I think is much more, yes, compelling and interesting. Cool.

How have you, what are your thoughts on the markets reaction? I think everybody expected this massive sell-off in pharma and biotech. And maybe it's because there was other news announced this morning. We haven't seen that. But biotech markets went up by like 3%. Yeah, do you think people are processing this? We heard earlier was that it was kind of like the, like a really, really bad scenario was priced in and this was less bad.

So it popped. Do you buy that narrative or what are you taking away from the kind of the market reaction? Yeah. So the PBOs and pairs have gotten whacked, which makes sense if you think about the dynamic here. I think there's a lot of skepticism about how much this can actually be implemented in the success that they'll have. If you jump back to the last administration, they tried to repeal rebates, which is solving the problem I just described. It's sort of getting rid of this excess margin that's invisible to the consumer, and they failed. They got it pretty far along.

It was like an admirable effort, but ultimately, CBO shut it down because rebates do contribute to lowering premiums, and there's things that made it difficult to get rid of rebates. They also had an MFF approach on Medicare Part B drugs, so like drugs that are dispensed if you're in office, things like that. that and that failed in the last administration. So I think my sense is that some combination of if the real punchline here is that effect of this is a backdoor way to get rid of rebates, it doesn't that, it's actually not that big of a deal for pharma. Like they're still getting the net economics. It's just bad for the middleman, right? So that's like one interpretation from the market. And then there's probably also just some skepticism about

whether this will actually get implemented. And I think that's fair skepticism given the historical track record here. What does this mean for pharmaceutical R&D? the way it's done. We talked to Zach Weinberg a little bit about NIH funding getting cut. There's debates about how research gets done in the Ivy League universities that spin out a lot of drugs. There's so many moving parts to actually get us what we want, which is probably just like a cure for cancer or just great new drugs, right? How is the actual pipeline evolving through all these different changes when you stack them all up? Yeah. So if you jump to, to the other other components of this beyond the consumer implications.

That's where I think these questions become more relevant, right? So if there's really an MFN for the net price that we pay compared to other similar situated companies or countries that that would have potentially some of the impacts folks are concerned about on R&D, I think we're so far away from that and that's so difficult to imagine truly getting implemented on face value that I'm skeptical that's really the thrust of the CEO. I really think it's potentially a better way to eliminate rebates than historically. I do think if you kind of play out, let's assume that all of a sudden, OZEPIC does cost 200 bucks at the pharmacy counter, which I do think is a credible path here,

and it would be reflected on what the true net cost. And all of a sudden, consumers are sort of just paying for most of these products out of pocket versus like bothering to use their insurance. And then you have pharma companies competing on price to win the, to win the transaction, that's actually, I think, how net prices come down ultimately, not because there is going to end up being some true kind of dead net MFN that they're able to execute against. So I think the debate about R&D is sort of, you know, to me, just from a practicality standpoint, kind of two clicks away from where we are today, and I'm pretty focused on, can we just get to a place where consumers are choosing these products based on price

instead of PBMs and other middlemen trying to determine price? why why is the market for a Zempec so competitive on day one you hear this whole narrative around patents and you know the whole idea is like yeah you should be able to incentivize this like this heroic herculean research effort because you'll generate all this value over the long term and that certainly happened with Novo and their share price but at the same time it feels like the gLP ones came out there were like every major farmer company had one around the same time. Then there was compounding going on. There was so, it felt like they were already generic almost, but I know that they're not.

But why did the market play out in this way? It's just because it's such a dominant technology. Everyone was thinking the same idea or something. What happened there? Because it was originally for diabetes, not weight loss. And then weight loss was a byproduct that they figured out was a, was not a side effect, but also an effect of the products. So when it caught, you know, the,

public's eye was already much farther along and its life cycle than a traditional kind of new indication, new drug. Got it. That being said, like the price dynamics with GLP ones are not that anomalous. Like if there's a successful product and there's a known pathway, there's going to be other similar products that get developed. The current ecosystem, supply chain, current structure that does drive down net price. That's why these things don't cost $1,000 anymore.

And so their net price is $200, $300, $500, $500, depending on the current. how new the gop you want is so like the the system actually kind of works okay right now like the price does come down based on competition relatively quickly it just doesn't work particularly well for consumers in these instances where they're paying how to pocket so everyone else is wearing a hat so i want to put on how how can you comment at all on europe's existing solution they have some complex system of price controls where they tell u.s. drive makers what they can charge is what we heard from an earlier guess but yeah somebody else was saying that this e-o is like Bernie Sanders dream is that true at all are these like are we in like left wing or

right-wing territory I can't even tell anymore yeah I mean that's going to depend a lot on exactly what's being contemplated here right think if the extreme interpretation is these are literally price controls at the government setting like yes I think you're kind of in the Bernie Sanders extreme version of managing these prices. I think if you take the other extreme and it's really focused on consumers and they say, well, look, either you can set reasonable prices for consumers that are somewhat comparable to list prices in other countries or consumers can just buy these drugs from other countries and import them here. That's not a price control. That's just actually opening up the market to more competition. So really, I think it depends on the exact implementation

and what's being contemplated. Yeah. Where are you seeing opportunity in startups in healthcare to kind of carve out value or deliver value in healthcare broadly right now? I mean, as you can probably tell from my tweeting, I'm quite interested in how you pull forward shopping and pricing into healthcare. To me, that is the linchpin to make the category work better. That's a lot of the work we did at Amazon.

As far as I know, it was the first time you could actually see an insurance price for something before you bought it. Of care, which is pretty insane. And so, you know, I think being able as a consumer and understand what your options are, how much they cost, what's available, and ultimately, like, transact in a very seamless way, I think is the most interesting thing. Now, that could be like literally what feels like a marketplace, right? I think that's a very interesting opportunity in different categories. It could be utilities that make that possible. So like super clear like APIs for pricing. There's a bunch of permutations of things that enable that, but that's what I'm still

How are we talking about APIs in 2025? Like it's the age of AGI ASI, like how do the insurance companies not have APIs? This is insane. Yeah. I mean what's going to end up happening because, you know, similar to faxes, we still send faxes, but really it's just two digital interviews on both ends. You're not with all these like phone agents that are talking to each other, but it's basically, I swear to God, I don't know, this isn't hyperbole.

This is crazy. Insurance companies, you're like, okay, cool. Like, you want clear pricing and you're bombarding us with phone calls with your AI bots. We'll just give you, like, a dedicated AI bot. You guys can prosecute this and figure it out. Like, actually bullish for 11 labs. Yeah, this is going to be like voice agents win everything instead of just building an API. Are there any places where AI in healthcare makes sense or is exciting for you?

there's like the super frontier research going on a deep mind there's protein folding is solved now there's stuff like that but then at the same time i can imagine like the the use cases you described being very real business cases yeah the voice agent specifically feels like an area that's experiencing somewhat rapid growth but the nature of that also means that it's probably you know it is hyper competitive so i'm curious if you think categories like that are even in festival. It's tricky, right? I think I, so I buy that there's going to be a bunch of administrative efficiency in health care, right? Things like phone agents and prior authorizations and other kind of very laborious workstreet like workflows. It's much less clear to me where

that value accrues. I think that's the tricky bit. Like there's an argument that it actually accrues to the service businesses. Like that's historically where the value occurs in health care. And so maybe the most effective service companies can accrue that value as being good at implementing AI. The place where I'm pretty convicted, it will be valuable and will drive real venture returns is companies that are good at compounding those as differentiation for consumers. So as an example, before, it would have taken a human $40 to book you an appointment to see a specialist. If you can use an AI bought to do that for two bucks, that unlocks a new consumer experience. too, right? It's not just like an administrative efficiency, and there's lots of these examples. That's probably what I'm the most excited. You mentioned compounding. What's your take on drug

compounding? Oh, God. I'm quite vocally anti-drug compounding. Why? Is it a quality issue, or is it just a market dynamic issue? It feels like he's an IP respecter. I'm a lot of whatever the right nomenclature is. It's twofold. I mean, I didn't. I mean, I didn't. I'm a p. Respector's a respect to above the law and below whatever the right nomenclature is. It's twofold. I mean, I do think there are real safety concerns. Last time there was a prolific compound or compounding a commercially available product that scales and a compounding center.

They killed 100 people with meningitis, like, happened. Yeah. Like, not claiming that's going to happen here, but that is like the overhang from compounding. It also just, it did sort of outside of these temporary shortage. is very much violates IP law. And to the conversations before about whether there's any incentive to do R&D, well, if someone can immediately just copy it, there's certainly no incentive to do R&D.

It's much worse than some kind of price. Is it kind of a beneficiary? Like, is there a boom in compounding because of the internet? Or like, is there a market force that's driving the increase in compounding? Or is it just like, no one ever thought to do the least? loophole before. Well, the funny, the funny dynamic, what was that jury? I was just going to say, it's not like people are compounding and then, you know,

hey, we didn't have to do R&D. We're just sort of like going to compound to this. And then we're going to pass the savings onto you. That's been like a big part of like the messaging online. And it's like, no, like you're going to pay the same. And like, you're going to like it. And just like be happy that you're getting the drug has been seemingly. I think the market dynamic is rebates, right?

If Wigovie or a Zepic was the net price for consumers, because now are pocket drugs and there are 200 bucks, 300 bucks, is there like much of a market for compounding, which are also 200 bucks and 300 bucks? The reason that there was so much demand for is because of this disconnect between list prices and net price, right? And so if that dynamic goes away, all of a sudden, the opportunity for compounders to really gain share is minimized, right? because like I can understand why someone would really not be willing to or could afford paying a thousand dollars a month and they can get the compound product for 200 but if we're talking 200 versus 100 or 150 for a compounded product versus the real product is a very different calculus for the consumer. Yeah. What what percentage of doctors do you think are using chat GPT on a weekly basis and should there, is there a big wrapper to be built there just giving them a more HIPA compliant version of chat GPT? I can't imagine.

Shouldn't be legal. Yeah, I mean, I bet it's like using it at all on a weekly basis, like most doctors that would imagine this point. Using it like as part of their workflow all day, probably still a smaller subset, but definitely in the double digits. Is that? Is chat GPT HIPAA compliant? You're just asking them as obvious.

You don't want to be dropping like specific patient information into chat CPT, but like you can certainly do. Generalized? You can do generalize. There's other ways to do that, but certainly generalized workups and notes and, like, we're using it a bunch and one of the companies I'm involved with to help, you know, automate the questionnaires or the notes or things that happen downstream for efficiency. Like it makes tons of sense. It absolutely happens and looking to do that. Yeah.

Some of the biggest, you know, I think everybody has this idea in their head that you're going to be able to go to, it's like AI doctor. I don't know what that looks like, right? I don't know if it's embodied. I don't know if it's a screen. I don't know if it's a doctor is chat GPT roughly. Yeah, yeah, but I don't know. I don't necessarily know what the form factor is, but as an investor, are you, is that a category?

How do you think about that opportunity, right? You know, at a high level, is that one company that's just going to dominate? Yeah, we've seen it for lawyers. Is there going to be a, yeah, or is it more of like a co-pilot approach and it's just less excited? than it sounds. It's just more doctors can see more patients and deliver better service. But how do you see that category? Because I, I, it's just one of those areas that people

always bring it up in the context of, oh yeah, everybody's going to have like an AI doctor. Yeah. And it's like, okay, well, what does that actually look like? Yeah. I mean, I, you know, I think for sure the first step when we're trying to deal with symptoms and figure out what's going on is going to be going to chat GPT or another. similar CX, like pretty confident that's going to be the first step. It's not that dissimilar from the first step today, which is people were Googling symptoms and trying to figure out like what's going on and it was just much less efficient, but ultimately like a very similar kind of flow.

So I think that's for sure going to happen. I think the interesting question is, are the vertical players actually going to have a better differentiated product than the foundation models? That's a lot less clear to me. Like I still found like the cold. or foundation models in my personal experience are better at diagnosis and better at figuring these things out still, even though there are dedicated other models. Well, and that's the, that's a big issue, right? You could have a wrapper that's specific for

diagnostics, right, that you can message and say, hey, I have this like, you know, skin thing, like what's going on? But that's like so infrequent. You're not paying $20 a month for something like that if chat chabit can do it 80% as well and you know it can kind of get you on the right path and so i don't think chat chb t eats webmd yeah i think the the the more interesting problem to solve right is like at some point you get through most of that conversation you're pretty sure you figure out what's going on you still need an intervention of some sort if there's anything's moderately serious going on like you either need a prescription you need labs you might need some physical intervention,

and you need something, and that's where nothing in healthcare has actually been digitized, right? Like, if you think about this compared to other retail categories,

which I do think is the right mental model, like chatGBT is now implementing, you know, Shopify checkout right, in chat GPT, right? So you can go from that, what should I buy,

straight through to a checkout flow. No one's built that checkout flow in healthcare. Like, you don't have a product catalog, you don't know how much stuff costs, you don't know, like,

what's available, based in your insurance. I think that's actually a more interesting problem for startups to go wrestle through because chat TV is going to be pretty damn good at the things you used Google for before. And it's not going to deal with any of this stuff. And so the stuff I'm working on and spending a lot of time on is a much more and like, how do you build the equipment of product catalog in healthcare? How do you ultimately make it easy to transact?

How do you make it easy to shop? Because that infrastructure still has to get built regardless of where the kind of front door is into that experience. Shopify for health, something like that. Can we do overrated, underrated, telehealth broadly? How are you feeling about telehealth? I am bullish on the sort of usage of telehealth still. I'm probably bearish on most of the existing business models and monetization.

It's probably the short bit. What about overrated, underrated? Existing business models. have you been surprised to see like him's almost second act in the public markets do you think they would even have had a second act if it wasn't for gLP ones or is there some underlying unlock that they have uh i mean it's sort of like commenting on any mean stock right it's a tricky thing to to have a strong opinion on Well, that's enough commentary. Overrated, underrated, GLP ones. Underrated.

Underrated. Underrated. What about some of the foundational AI applications coming out of deep mind, protein folding, any of that stuff, moving the health care markets or how you think about health care? Not intelligent enough. Yeah. Too complicated. Too complicated. get out of it. Anything else?

Did you, when you were a pharmacist, did you, was there a world, did you imagine a world in which you retired as a pharmacist, you know, at 65, or did you like cars too much from a young age that you knew that you'd need to figure out another way to build a collection? I think it was pretty clear that the working behind the counter was going to be a short-lived endeavor for me. That's the question. Are you asking? Is that what you're asking?

Yeah, basically. Yeah, I think that was pretty clear from the job. How much do you love being a venture capitalist now? Is it just the best? I love it. The second I took the job, I think you were an expert at everything. It was so convenient. Yeah.

Yeah, maybe. It's almost instant. It really is almost. Take us in a little world tour of all the geopolitical conflicts, how we would resolve them really quickly. I'm just really happy that my first conversation on here was political in nature. that was what I was looking for. Yeah.

Yeah. The last question I have, just generally curious, given you guys are, I'm sure do multi-stage, but I imagine given, like, are you like trying to pick, like, are you investing in a couple companies a year? What's the goal for you? And I'm assuming you meet a lot of companies all the time that you like, but don't end up investing because you're not like, like, you just. just more of from a conflict standpoint if I do this deal and you know,

a better company comes around and in six months or a year I'll be conflicted out. Is that accurate? Yeah. I mean, certainly the first bit's accurate. We're, you know, doing concentrated early stage investing kind of classic venture. So I'll do two to three deals a year and any given years probably a pretty standard, standard year for, for me and for the other partners of matrix. I mean, I certainly think about the conflict thing.

I think that reassumes that I'm constantly liking things and wanting to do all of them. That's probably not the dynamic. It's really like finding like really interesting things that I want to spend a bunch of energy and a bunch of time on versus seeing like a lot of different things that I'd love to kind of be less involved in. So it's certainly a dynamic, but we're, you know, we're doing a couple deals a year. As you do deals, when do you start using the term we to describe how the company, works. That happened pretty quick too. It was like the same as my expertise.

Just immediately. I had some small check and it's we. We are building the future. Dropping a we as a venture capitalist, strong. Let's see now. Hey, I'm on the board. Yeah.

I'm part of the team. Don't be allowed for former operators otherwise you're not allowed to. What last thing before you take off, what should people be paying attention to in the days and weeks from now around the actual implementation of the of the EO.

What are you looking out for? I think it's obvious that you know, we're not going to walk up to a pharmacy after work today and and see lower prices. But, but what are you looking for? I personally would be focused most on how much this is really about the difference between gross and net prices, right? Which we talked a lot about or whether it's really about true competitive net

prices with other countries because it's a pretty different paths, right? And that's all sorts of different implications. So I think the more this feels like it's about solving the consumer problem and less about solving the kind of payer problem or the fairness problem, the better for me personally. And the more it feels like we're trying to do some true price setting kind of net MFN against other countries, the more I'd be a little bit nervous. So that's where it pivots for me is.

Is this about consumers? Is this about net MFN? Great. Do you think the missione makes it to production? Do you think Porsche goes a different direction with this next supercar? You know, I know so little about like new modern Porsches. I'm like the furthest from an expert, but. Good luck. I have no idea. It's the short answer. Ask me about something old and I'll talk about it for a long time. Yeah. Well, we'll be coming out your way. We're working on putting together the Amman rally. so more news to come there you'll be one of the first to know awesome thank you for coming on tj yeah thanks for much

this is great we'll talk to you later appreciate the insight cheers uh did you were you able to clock his watch uh aquanaut you know something on aquedot well if you're looking for an aquanaut like tj head over to bezzle your bezel concierge is now available to source any watch on the planet seriously any watch i think i already did that really actually and then of course we got to tell you about wander 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, Jordan. Hit me with some soundboard. What do you want, John? I got options. Ashton Hall. He knows my favorite. The movie trailer. The switch up.

We also have some polymarkets up that are tearing up the news. The odds of Donald Trump eliminating capital gains tax this year are surging. It's now looking more likely than not that they'll be. be eliminated. 57% chance. Unclear if that means they'll be taxed as income or not taxed at all.

But they will be eliminated. We eliminated capital gains tax. It's now 50%. Or 0%. Who knows? Also, the odds of Larry Ellison buying TikTok have doubled this morning one in five chance now

that he buys it before July. He's up at 18%. Someone knows something. Someone's going in with size. But of course, it's phrased as who will acquire TikTok. Big question about whether that's a whole co-acquisition or a minority investment from an American company. Could also be the data is hosted on Oracle's cloud. Their servers.

Could be that the algorithm is run on Oracle servers. But that doesn't necessarily mean that Oracle knows what all the weights do. Does know that they're involved in the training of the algorithm. And so that's a big question is that, hey, If, yeah, you're inferencing TikTok's algorithm, but the weights have been trained in China to, you know, be favorable to China. That still doesn't really resolve the issue, so I'm sure we'll be tracking that. Anyway, let's run through some timeline and then get out of here. We're doing four-hour shows now.

Have you noticed that it's just grown? It's crazy, John. We're just doing longer and longer shit. We're too addicted to podcasting. The Pope was chosen in two days. Your remote hire needs, doesn't need five rounds of interviews. I said what I said. so funny that this got 5,000 likes on threads and then 350,000 likes on X as a screenshot.

That's what's going on here in this screenshot. Do you see this? 350,000 likes. I haven't seen that on anything but an Elon post. And you would think for more higher about interviewing? That's not that big of, that's very, it seems niche, but five million views here, 31,000 repost. It's also funny. It's just banger god.

Yeah, I mean that the I should put that in Banger archive Seriously. Now the funny thing is The counterpoint here is that If you're meeting somebody for the first time It's not like the Cardinals were meeting the Pope For the first time

And they were just like You know Oh, we just decided in two days, right? There's a lot of past history there If you're talking to a remote hire Hiring the wrong person is just so Painful it really is the worst for everybody involved right the person who got the job who ended up not

being the right fit company who hired the person and has to invest all this time trying to ramp them and then unramp de-ramp let them go ramped up switch your business to work no it's just really painful and so if if you're if you're you know four interviews in and you're not confident do the fifth one you can avoid a lot of pain so what's the right number of interviews for a remote hire. 50. 50. Have each of your 50 interns.

As long as you get at least a few in-person workouts in that in that interview process, I think you're going to be good. Anyway, I want to highlight Jesse Peltin. Interesting new account. Hadn't seen this guy before. Elon Musk's been amplifying him a bunch, and he's been posting about solar energy and energy a lot and just has some great posts and seems like a newer account.

I don't know. You might be on there forever, but seems to be blowing up most recently. He said, wanted to build us a type one, if God wanted us to build a type one civilization, a Cartashev, type one civilization, he would have, one, put a giant fusion reactor in the sky emitting black body radiation around 5,800 Kelvin, which is exactly what we have. Two, made 28% of Earth's crust out of a semiconductor with a matching band gap, 1.1 EV or so, which is exactly what happened. And then three, filled the oceans with an alkaline

metal we could use to store limitless quantities of energy, sodium, or something similar. And he says, that would be a crazy coincidence. And he's basically a super long EV battery energy production. And I just think there's something about this account where I just saw a few of the posts. A lot of them were lightly technical, but coming from this very optimistic techno perspective that I thought it was interesting, hadn't seen the account before, so I wanted to highlight it here. I mean, we should honestly have them on the show at some point because it seems. seems like he knows his stuff, but I want to dig in deeper there. The other interesting post that I wanted to highlight was from Mike Noop, who's been on the show,

founder of Zapier and ARC AGI. And he said, we are targeting at least three orders of magnitude instead of 3X with ARC AGII3, but directionally a lot of useful insight on AI benchmark development in this thread. And so Ophir Press posts, I have a post where I talk about how to build good language model benchmarks. I've had to edit the part where I talk about how you should think. about making your benchmark hard multiple times now. And so the first time, he says, you have to make your benchmark challenging

to evaluate language models. If you drop your benchmark in the accuracy at launch with the best language model is 80%. People will see your benchmark is already being solved and they won't even try to build models to improve performance on it. So you should think about launching a benchmark at between 1 to 35% accuracy

for the best model in the game. So take Gemini or take OpenAI's best model and if you can get your benchmark to 1 to 35%, you're good to launch. Then he edits it in January of 2025. He says, due to the extremely fast development, I now say that you should do 0.1 to 9%. Take that way down.

Anything higher means that the benchmark is too easy. And then he says, May of 2020. Sorry, I have to make another edit. Due to the speed of development, I'm now asking people to think, you can't just think your benchmark has 0% at launch. You have to imagine that your models would achieve negative 200% at launch.

The smartest human ever should get a negative score on the test. Find benchmarks that are so hard, find questions that are so hard that even if the models improve 3x, they still get zero. Just building a benchmark where models get 0% today might not even be enough anymore. You have to look at how the models have been improving over the past three to six months, try and predict where they'll be in the future and build benchmarks that would not only make the current models fail, but benchmarks that would be. make the models of next year fail, anything easier than that might get saturated much more quickly

than you expect. So I just thought there was a funny interpretation. We've been talking about benchmark saturation and the death of the benchmark. But, you know, it's interesting to hear someone in the industry kind of put it in such hard terms there. Anyway, Palmer Lucky is advocating that the United States should immediately expand our naval base on Guantanamo Bay into Liberty City at American Singapore of the Caribbean, shipbuilding, arms manufacturing, near equator space launch, energy refining, and

more in beautiful paradise. Any Cuban who can escape there by running, swimming, boating, her biking gets asylum and a work permit to help build this mega project by robbing the communist of their workers, the communist party of their workers in critical areas like power generation and military might. We accelerate regime change.

Liberty City will be the first domino. I like how he's thinking outside of the box. Liberty City. Liberty City. GTA reference. Yeah. That's great. Anyway, we talked about Apple's new product launches.

It's going to be a big 2027 that they're lining up for and a bunch of new iPhones coming out. What else is interesting to talk about in the news orb? But what else? Yeah, this is interesting. The foldables thing is so funny. They got to do it.

But I mean, foldables, it was one of those things where, you know, like it was an interesting idea, but the first iterations, even from the top tech companies, not Apple. not named Apple were bad, and everyone kind of knew that they were bad. And so, funny that it used to be,

it really used to be much more of a thing to text like this, horizontal. So I was thinking that full little phone, you bring it back, but I think people just got pretty fast at typing. Yeah, is this one that? Oh, swap it and on. New hat.

You gotta do all the different hats. This one's a little tight. Anyway, World Coin launched the orb mini, designed to make human verification more accessible. It's transportable and seamlessly accommodates your lifestyle. The Orb Mini, it goes.

And I guess there's a bunch of world stores, showrooms throughout the U.S. now. We're going to hopefully have the founder of World on tomorrow, Alex. And anyways. So my take on this is like, I understand the main pitch, which they put out this infographic that said like 80% of gamers online say that their online gaming experiences are being ruined by bots.

And that makes sense. Like there's a cheater, there's a bot, there's AI. Like no one really wants to go and play chess against the hardest AI possible. That's just not fun. They want to play against humans, right? And so if you play against a cheater, it's just less fun, right? You want to play against real people. So like verification makes sense there.

But what's odd is like if you play out the AGI ASI thing really, really far, you would imagine that at some point the AGI figures out how to either steal or grow eyeballs, right? Yeah. like or assemble them. That's really dark. It's really dark. Stealing the eyeballs. I've hit a, I've hit a WorldCoin human verification checkpoint.

I should just get a human. Yeah. The future is the, the, the terminators keep us in cages and make us do arc AGI puzzles and then scan for the WorldCoin. And it's just like there's arc AGI puzzles all day long because we're just like being scanned. Brutal. Yeah. It's a final job.

UBI is just. offering your eyeballs today. If you believe in the nanobots and you believe in the paper clipping if you could turn me into a paper clip, you can turn a paper clip into an eyeball, right? And if you can turn a paper clip into an eyeball because it's just matter that you're reconstituting, right?

You're just assembling atoms and molecules. Matter reconstitution. Yeah. So, I mean, I guess that that's farther away. Like the bot crisis is here almost today, right? It is in the sense that like there's a lot of spam out there. We need a better version of CAPTCHA. RKGI is maybe like six months after being cooked.

And so the orb kind of makes sense in that case. But it is an interesting, like intermediate step. But I don't know. It's an interesting story to follow and interesting to see how it rolls out. And I'll be, I mean, I'm excited to see, you know, there will be gamers who sign up. They will test it and they will let us know if their cod lobbies are cleaner. You know, if they're on rust and they're having more fun, that's good. Isn't the bot problem something you can solve at the software layer?

Like obviously if you could get, you know, a device You can get a device that does that. I know exactly what you're saying. Yes, you can get a robotic arm to move a physical mouse and press buttons on the keyboards. Yes, and use computer vision just to look at the screen and you can cheat that way. It is possible.

It's not perfect there. It's obviously better to just go into the code at a lower level and then see, okay, I'm not even getting pixels. I'm getting more like screen view. Exactly, yeah. But screen view is a viable cheating strategy. Form of botting. Yes.

And so obviously it's much better to just interface with the net code that's coming across so you can see through walls and you can understand the full map and there's no fog of war all that type of stuff. But you can cheat just by camera at the screen. And that's almost impossible to detect until the front facing camera turns on. And it's constantly scanning your eyes to make sure that there's a human on the other end. which I mean face ID is pretty secure does kind of make sense that there's be something here you got to build it in the next Xbox I guess or something I don't know well before we go we should talk about Figma Figma is our latest partner we talked about this a little bit last week it is the design tool that we've used to build the TBPN brand every single asset that we create for the most part comes out of Figma and it's a tool that I've used for my entire career. So very excited to partner with them and be on the extended team. We were at

config. Config last week. They launched a bunch of new products. Our takeaway is the Figma for Figma is Figma. I've said it before. But the new product they launch is Figma sites, which is sounds simple, but is really exciting. Basically, you can turn whatever you make in Figma into a website. So if you're not using Figma already. Go check them out. And thank you to the whole Figma team for supporting the show. Fantastic. And thanks to you for watching and listening.

We'll see you tomorrow. And making it this far. Enjoy the whole market day.