TBPN - Daniel P. Driscoll, General Randy A. George, Gary Vaynerchuk, Harley Finkelstein, Delian Asparouhov, Will Ahmed, Adam Porter-Price, Jack Altman, David Haber, Alex at Hallow

Episode Date: May 8, 2025

TBPN.com is made possible by:Ramp - https://ramp.comFigma - https://figma.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(14:34) - Daniel P. Driscoll, Secretary of the Army (35:36) - General Randy A. George, Chief of Staff of the Army (46:49) - Adam Porter-Price (59:44) - Delian Asparouhov (01:27:44) - Harley Finkelstein (01:56:37) - Jack Altman (02:24:56) - David Haber (02:57:02) - Alex at Hallow (03:11:43) - Gary Vaynerchuk (03:35:35) - Will Ahmed

You're watching TVPN. Today is Thursday, May 8th, 2025. We are live back in the Temple of Technology. The Fortress of Finance. The Capitol of Capital. We have an amazing lineup today. Absolutely stacked roster. We have our... The diversity. Yeah, we have the Secretary of the Army, the Chief Staff of the Army coming on. We're doing a post game on Anderil's acquisition in the private markets. And then we're doing a post game on Shopify's earnings in the public markets. And then we got venture capitalists coming on from Founders Fund, Alt Capital, Andreson Horowitz. We got Gary Vaynerchuk coming on from Gary Vee. himself. Super excited about that.

We had a conversation with Gary off stream a little while back and excited to make that one happen. Yeah, very excited for it. But we do have to take you through the news. And of course, we have to take you through some ads. So switch your business to ramp.com. Switch your business to ramp. Time is money. Save both.

Easy use corporate cards, bill payments, accounting and a whole lot more. one place. I love that sound effect. It's really, it's really, it's just the best. The best. John turned up his, oh yeah, I turned it up because I want to hear it more. I'm so locked in with it. Anyway, we didn't have the sound more.com. Switch your business. But the big news shaking up the tech industry today is, of course, the CEO of Instacart, Fiji Simo is going to join Open AI as the CEO of applications. So now they have, maxed out contracts, separate CEOs within, as is. As is, if it couldn't get more complicated over at Open AI. They heard us talk Tuesday.

They said we've got people confused. Let's make them even more confused. Yeah. Let's keep it guessing. Keep you guessing. Yeah. I mean, there's so many, it's funny, there's a lot of different entities. You could have CEOs at different entities.

Yep. That's certainly, it's very clear they're not calling it a co-CEO role. No. But she is an absolute legend. She was one of the top executives at Facebook. She founded the Medudora Institute Health Clinic. She's been, she's on the board of directors of Shopify, who of course we're talking to today. And she's also, she's also been on the board of Open AI for a while, but now she's stepping into an executive role.

She worked at eBay as well as Facebook and Instagram. And if you pull up this, her post, it's very interesting because May 6th, she was posting about working at Instacart saying, this is Fizz, our new group ordering app for drinks and snacks launching today. Very cute. Yeah, which was a cool lunch. a great product, but doesn't quite have the weight as we're building machine God and intelligence is too cheap to meet her, you know. Well, she's going to be focused on products, right? Yeah, maybe this is the future.

I saw the FIS launch and I was like, this is a cool, fun consumer product built on. Totally on Instagram. And it also has a part of integration so everyone can kind of say what they want as they're, as they're, you know, planning their party. And then things got real. She moved over to Open Act, which I just feel like, you know, obviously it's a fun company. I was noodling on opening eye chat GPT all yesterday making charts and last night, making images and stuff. It's a fun app, but it has a weight. You were sleep deprived and spent

like 45 minutes working on one chart. It was so fun. Vibe, vibe creating a chart. Yeah, basically. Yeah, it was great. Anyway, Dan Primack has a big question. When is the last time the CEO of a very successful company quit to join another company in a non-CEO role? Well, I can't one. I bet opening I've been O3 can if you search that unusual on so many dimensions and this is an unusual move. Yeah and yeah it's interesting because the narrative with open AI for a long time has been the the old opening I was this insane lineup right because you had Ilya you had Andre Carpathie you had Greg obviously who's still there but then you also had Dario and and everyone who's gone on to found a foundation model company

at one point seemed to have worked at Open AI. And there was this question of like brain drain almost. Like is it just say him now? But he's put together a new team of founders and executives that are kind of in the same realm as the previous team. And so when you think about bringing up Kevin Wheel to work on product, like he is a founder CEO that took up company public. Like he's a very accomplished business person.

And so yeah, it's been interesting to see how this works. But I mean, it makes sense. Like it is like what? the most exciting technology didn't since fire or electricity or something like that. Like it's a big deal. It's a lot of fun. And you're at the center of something very important. And I'm sure there's a lot of amazing work to be done.

And so Open AI CEO Sam Altman said he would continue in his role overseeing verticals like research computes and applications. CMO will report directly to Altman, which is very interesting because you would think you would just do like chief applications officer. But CEO of applications is a new term that we haven't seen before. Yeah, it's interesting. as Matt Turk shared earlier, if OpenAI is mostly staying out of the application layer,

a promise made to AI application developers as long as they don't compete on what core models can do natively, why do they need a CEO of applications? Interesting question. I don't know. But, you know, OpenAI already has applications, right? Of course. And they're buying.

They have several companies. I mean, yes, yes, they try and centralize everything in chat GPT, but they also have, what's the video model, SORA. SORA is its own application. It's a web app, but it is its own application. And now Winsurf will be its own application. And you could imagine many of those also.

The real interesting thing is, is there some 4D chess tinfoil hat conspiracy that Instacart rolls into Open AI at some point? That's very interesting. I don't know. I mean, I think that's a crazy idea. But it is kind of interesting to think about it. That's a very fascinating idea, John. Yes.

Yes, it's all a plan for Sam to control delivery. Well, but I don't know. I mean, you could imagine some world where, you know, you want to instantiate something in the real world and you need a human to do that until there's humanoid robots and Instacart has a huge workforce of humans that can do things. And so you're on operator and you say, I need somebody to go do something for me and they use the Instacart workforce. I don't know.

AI, you know, the sort of consumer agent, the AI, the AI, you know, the sort of consumer agent, the AI, assistant that can do everything has been you know one of the most exciting promises yeah and yet there's still a lot of things that you know o3 is amazing at something hey put together a reporter and an analysis on you know this new law great it can do that well if you wanted to pick up your laundry or something like that yeah i think more more likely she's just an amazing operator and they're scaling up and that that conspiracy theory is just what i said it is uh But she has years of experience in product management and monetization. A bit of a generational run.

She spent more than a decade at meta, leading the launch of ads on the news feed, heading monetization for the Facebook app, overseeing product development for Facebook video. That was huge. And then helping build its advertising business, of course, like all the foundational stuff that they do. That, to me, feels like it's not getting enough attention. Yeah, yeah, yeah. And then she took Instagram public, too. Right.

It's amazing. So she's going to stay on as chair of the Instacart board in a letter to Instacart employees. She said a current member of the company's management would replace her as CEO and an announcement would be made soon. And so congratulations to Open AI and to, you know, everyone involved in this deal. I'm sure it's a maxed out contract, Jordy. What do you think?

Maxed out. Probably. Probably, you know, four-year best, one-year cliff. You know, don't want to speculate too much. Don't want to speculate too much. I would go out on a limit and make that guess. Yeah. We got another, I mean, the other story that's basically in the news is the death of the Google search.

Google traded down showing that there are a decline in actual search volume. This has been predicted for probably like two years now. I remember using the very first GPT3 playground and thinking like, oh, this is a search. because that was the thing that it could do kind of well. You had to kind of massage it and write the query in a particular way because it wasn't RLH-DF in the way to be like a friendly, helpful thing. It would just kind of continue.

But what you could do is you could say, you know, let's say you're searching for headphones or something. You could say, list of best headphones. One, Apple, AirPods, two, bows, three, space. and then it would continue writing and it would just guess and fill it in. So you had to do a little bit to set it up to be thinking in that way.

It was a lot of prompt engineering. But I could see even from that very early stage that search was going to be a thing, but these trends take a long time. I mean the fall in the share price yesterday was extremely dramatic. It was kicked off by Apple's VP of Services who came out and said that for the first time,

it was specifically in Safari, right? So it's important to note that that doesn't necessarily count what's happening over on people using the Chrome browser on iPhone, which is obviously quite a lot of people. I think the Safari browser has always been relatively underwhelming, even though it's the default. And it's interesting, I mean, the brutal irony of the situation that Google's in

in that they have leading AI models, yet those, that technology set, and it's a technology that they have played a massive role in, you know, creating is the same technology that is, you know, just going to slaughter their golden goose. Yeah. And, you know, it's like, yes, of course, LLMs can drive a massive amount of revenue

across the Google ecosystem over time, but they have a, you know, $200 billion, dollar cash cow in search and you know there's going to be a wide gap between the question is how quickly how fast is that revenue shrink versus how fast does sort of generative AI revenue grow and there could be a very rocky middle period I think it's it's hard not to be bullish on big tech broadly right they have so many advantages with this new sort of like yeah this new sort of But yeah. But yeah, it might mean a slight change for the for their strategy overall. I have a take, but first let me tell you about public.com investing for those who take it seriously.

They got multi-asset investing, industry leading yields. They're trusted by millions. Hit that. Soundboard, Jordy. John never knows what I'm going to hit. Yeah, I was expecting national. Expect the unexpected. Anyway. Thank you to public for supporting my. Yeah. So I there's I wonder how real this dynamic is, but I feel like there's a little bit of Google where you start using Google for research and to find answers and you use it as this answer engine. And then when you go to buy insurance,

you wind up Googling that too out of habit. Whereas right now what's going on is that a lot of those knowledge queries, those non-shopping queries that are probably less valuable to Google because I would normally just land on a Wikipedia page or some sort of blog post explaining the concept that I'm asking about.

Instead of taking that to Google, I wind up on chatypti. And then I'm still doing my shopping queries. Like I bet my ARPU at Google is still similar because I'm still clicking the ads when I do go and buy something. But the fear is that once Jad GPD launches shopping and I have that more, it's more the default behavior,

then they really do lose me as a customer. And so maybe like user monetization is a lagging indicator for Google, which would be. Yeah, yeah, it was interesting. You worry some. Interesting. I mean, these are sort of different business models. The thing that's just sorted around LLMs right now is people are paying for them, right?

People are paying $200 a year to use perplexity. They can get the same information from Google. You can get a lot of the same information from free LLMs. The question becomes, is are, you know, chat GPT and chat GPT-like products going to monetize as well as search? I don't know. They don't monetize better. You think they'll monetize better? Almost certainly.

The question is it will have to get to a blend of SaaS and ads, I imagine, right? Oh, totally. For you to Google. To Google search right now, I was talking to Daniel. But not even just that. Also, also essentially like affiliate fees. Yeah. Because you could imagine that if they cut out an affiliate and you just go to Chachyipati

and you say, order me the best shoes possible and it just does it. Yeah. Like you've cut out seven. seven different steps. And so they're going to be able to advertise. There's a whole bunch of ways that they could capture value. I just think it's going to take a while, but I don't see a reason why more data, more knowledge on the interaction.

Like even the chat GPT memory thing, I was working on like an image poster. And I had said the name of the title of like the movie poster. I was like, take the Pulp Fiction poster and replace it with a different name. And then I was like, I was not really getting what I wanted. So I started an entirely new chat. And then randomly it was like, hey, do you want me use a different name? Because it remembered from the other chat that I was working on the same thing. And it was like, okay, yeah, you opened a new chat, but you didn't really open like a new instance of me.

And so like you could imagine so many different ways to have just way, way, way more context aware search. Totally. We'll monetize in terms of ads and everything else. First, let me tell you about linear. linear is a purpose-built tool for planning and building products meet the system for modern software development streamline issues projects and product roadmaps linear dot app it is the tool that we use to run tbPN and you should use it too thank you to linear and i believe we have our first guest is here welcome to the stream hello welcome can you hear me okay hey can you hear me yes yes we can hear you

welcome to the show thanks so much for taking the time uh i'd love to start with kind of an introduction and an overview of what modernization is, what this project is, and what you've been just talking about in the media most recently? You're all happy to. So the United States Army is 250 years old. It's older than our country. We're celebrating our birthday this upcoming June. And the last 30 or 40 years, one of the problems is that the Pentagon has contorted decision making in on itself. And it's optimized for all sorts of crazy things that have nothing to do with. soldiers in war fighting.

It's optimized for parochial interests around the country, lobbyist led, donor-driven, non-war fighting outcomes have driven what we've done for a couple of decades. And so what we tried to do in the last kind of 75 days is work with army leadership under the leadership of President Trump and Secretary Hexat and put together a plan that is just rational. And so the plan essentially does four things.

The first one is cut, and a lot of these will seem so preposterous to you that this is even a big thing. But it is. And so the first bucket was just to cut obsolete systems that we don't even want anymore and soldiers haven't wanted. And this is the part that would should kill your soul for decades sometimes. I mean, we have been buying these things because they just lacked political will to stop. So mechanistically, what would occur is we just, the, the army would say, hey, we want this. And then Congress would come in on top of it and say, you have to keep buying these things. for these other reasons.

So to cut that is to then take the dollars that have been saved and fund the things that we actually do want. So if you thought about what modern warfare will look like, you need drones, you need autonomous systems, you need a data layer. We have to pay for that with something. So we're going to use the dollars to do that. There's a third bucket of actions, which was basically we, the Army,

have been a terrible customer to ourselves oftentimes. And so we've given away the right to repair our own equipment. So as General George, the four-star in charge of the Army, you know, with 12 bases, you'd see this exquisite, these exquisite platforms sitting on a sidelines for nine or 12 months at a time where we could 3D print a $2 to $20 part and we weren't able to do that for ourselves.

And so we banned that. And the poor thing is essentially we just allowed this preposterous amount of leadership to grow in our own formations. And so soldiers join the army because they wanna wear a helmet, they wanna get out there and they wanna fight. And we put them in headquarters passing around paper. And so we said,

we've got to start with ourselves. We're going to push a thousand people back out. We're going to get rid of the jobs. And then we're going to repeat these four sets of exercises again and again and again until we get closer to the right. What have you learned from history and kind of the root causes of these problems? Is it just the end of the Cold War? Is there something about technology and the digital transition? Like what should we take from the past to inform the future as we look to, you know, it's not enough to modernize now. We want to stay modern, right? I think one of the things we, the Army, have not gotten right historically, at least in the last couple of decades, is looking to the private sector, what Silicon Valley does and our venture-back

startups and just our small and medium businesses around the country, what they do incredibly well is they go find product market fit, they have an innovative feedback loop where they take their minimum viable product, they get in the hand of customers. And small and medium businesses and the heartlands might not call up this, but they practically do it. And then they learn from it and they iterate and they change. What the Army has historically done the last couple of decades is we lay out these big grand schemes. We put a wish list together of all the things we could possibly want.

And then we go out to the market and we say, hey, build us this and we may buy it. The problem with that model, as you might guess, is only a couple of incredibly well-funded companies can do it, which we call the primes. And then they end up doing it terribly. And they've done it terribly for a long time. but we held ourselves hostage with our bad processes. And so I think one of the lessons we're learning is the Army does best when it is synced with American enterprise and when it synced with American ingenuity. And we are trying to return to those routes.

Can you talk a little bit about the breakdown of modernization strategies across hardware, software, people, there's so many different, I mean, it's a massive organization. How are you thinking about decomposing the problem and where can Silicon Valley fit in? So, optimistically, a lot of the things we need are very basic tools that already exist in medium and large-sized businesses in the country. I think Silicon Valley, the chief of staff and I did, one of the first things we did is we went to the West Coast and we hit Microsoft in Seattle. And we went to Silicon Valley and did Open AI and Meta and Google. And then we went down to Los Angeles and did Palantir and Andrew. And some other autonomous software companies.

and it's incredible what they've built. And so when we are trying to build something to compete, on a hardware side especially, it's generally going to be a bad outcome for us. But I think what we are trying to do is we're defining our current short-term goal for modernization. The number one thing we have to do is create a data layer. So we need our people to be able to sync with each other over the horizon and then sync with our things and our sensors.

And all of this has to happen in near real time. and it has to be able to be updated constantly with new software as we've received inbound attacks. But what that data layer will do is it will allow us to start to do things like apply generative AI to our targeting. It will allow us to start to think of our vehicles and these exquisite tools that we build as really just the manifestation of software in the world through this hardware. But that's how wars are going to be fought going forward. I mean, it's hard to understate, or excuse me, overstate. War and the way humans have fought for the last couple of millennia has changed in the last three years.

This is an inflection point. And if we don't move quickly, we're going to be left behind. Yeah, I'm charging. Can you talk about the force itself? I was talking with Catherine Boyle over at Andresen, friend of the show. And she was saying that the force today is just so much more technical, right? This is a generation that has grown up, you know, online. you know, very sort of internet native.

How do you look at, you know, you know, kind of upskilling within the force today and taking somebody from good to great or, you know, technical to, you know, truly an expert? This is going to sound sycophantic. And so I commit to you that when I hear people say these kinds of comments, I always think they're full of shit. I actually believe what I'm about to say, which is the most remarkable part of these last 70 days of returning back to the Army and getting to spend time with soldiers is in the intervening 15 years since I've been gone, I went to an Ivy League law school. I've worked in VC back companies and I've fed a fund.

I've worked in PE back companies. I've seen big amazing law firms and consultants. And I would put the average American soldier against any of those people as far as their intellectual curiosity, their ability to problem solve, their ability to get to an end state of success. Like the American soldier is incredible and especially what you're pointing at, our younger ones, when we hand them this technology, when we hand them these new drones, when we empower them with tools, I mean, they figure it out in two or three days. It's mind-blowing. They don't need a manual. They just get it. They put in their hands. They put it up in the air and they've started to innovate

on it. And what we're trying to do is, like if we look at basic training, I was at Fort Jackson last week, which is one of the bases we put through a lot of our new soldiers, these soldiers, were civilians five weeks ago, and we're running them through drills where we're putting up drones, they're learning how to think about top cover, and then when they finish this exercise, they go and review the drone footage to see what could a drone see. And I mean, it has been amazing the kind of lessons and what we're taking away from somebody who has five weeks of experience, much less the other one million soldiers that we have. It is a group of people that are just ready for the challenges of head.

How are things changing on the recruiting side? The Army has obviously struggled over the past, call it, I don't know, five, 10 years around recruiting. And I can imagine, you know, showing how you guys are monetizing is a great first step to be like, there's changes happening, we're innovating. This is a place to come and be part of an organization with real positive momentum that's adopting technology? I mean, it's such a massive change. Is that an intentional part of revitalizing, you know, and strengthening the recruiting process? Absolutely. And so there's a couple

ways I would talk about recruiting. And we talk about retention, too. So how many soldiers decide to stay in. So the first thing I would say, and again, very sincerely, the leadership of President Trump and Secretary Haguezschev has created a culture that is a return to excellence and a return to lethality that was kind of the vast majority of the Army's experience or existence. And people want to be part of that. They want it to be harder. Like it's not about the stuff that they get for joining the Army.

It's about what the Army can make them. But then quantitative, so this qualitative remark, quantitatively, what we've seen is kind of on the front end demand to join. We are killing it. We're up in nearly every category and nearly every geography across the country. Male and female were up this year. And so we're really excited. And we think a lot of that, to your point, it's the story colony.

But our retention is incredibly helpful for us to look at, too. Because to us, that's the trailing indicator of how we're doing. And it is the soldiers that actually see us and are part of this and are reading what we're doing and are living this life. How are we doing there? And we're excited to announce that we hit our 12-month goals, six months into this year. And so all of that makes us pretty optimistic. On the topic of kind of the actual fighting force, is progress in technology or artificial intelligence playing into how you think about the scale and size of the actual humans in the army over the next few, I don't know, years or decades?

Because in Silicon Valley, we're hearing stuff about job displacement or, you know, a single company run by one person because they're so augmented by artificial intelligence. I imagine that a lot of folks in the Army are just excited to use these tools to be able to do more faster. But what has the response been on the ground? So I think about the Army, we think about it, General George and I, the rest of the leadership team is two kind of fundamentally different things. One is a large enterprise system. It's a large enterprise business. The other is a war fighting killing machine. On the large business side, one of the things we've been able to do is like our recruiting command.

this may seem very basic to you, but it's hard to overstate how important this is for us. Instead of building proprietary software, hiring some developers, creating a new tool for how we, the Army existed in the past, and then having to maintain that in the future with a bunch of other silo tools. What our recruiting command did is they moved onto Salesforce,

and then they changed how we recruit people to match what Salesforce already had and that's out-in-box solution. And so, and then we've tweaked it a bit. Yeah, of course. we're seeing just these incredible leaps forward as how we manage the Army as a business. And then to your question about the war fighting function,

I think what ends up happening a lot of times is people are trying to be intellectually weak, let's say, in answering that type of question. And so what they focus on is things like end strength. And so they'll say, we're gonna go to battle for the number of soldiers that you have. And the Army will say we need more and Congress may say we need less

and the Navy might say we need more. And that's not actually the right way to think about it. The right way to think about it is, how many soldiers do we have with helmets on that can go be the fighting force that we as a nation need? And so one of the things we focus on a lot is, what can we outsource to technology?

Once we create this data layer, what can be done by generative AI? And then what can we do with those soldiers to push them forward? And then how many of those soldiers do we actually need that can squeeze triggers or push buttons and kill on our behalf. And so the long-winded answer is,

I think what General George would echo to is, we don't know what the exact number is. We think we're at about the right number. We probably wouldn't cut a lot. But our goal is to push more people from doing kind of like the useless shit in the office and push them back out to the field. Makes sense.

How would you grade just, you know, a lot of our listeners are in the technology and venture capital community, Silicon Valley broadly. How are we doing? as an organization, as a community. Are we stepping up enough? Obviously, there has been this massive vibe shift, Anderol part of that,

Palantir part of that, American dynamism at Andrews and Horowitz, part of that. But are you seeing what you want to see from the technologists in Silicon Valley? Is there more that we could be doing? If so, what? I think what you should see is by General George and I coming on your show,

we want you and need you. We are inviting you in. We are inviting that community to come help us. One of the things that we've seen with Doge, aside from just the cuts and the headlines and everything that kind of people want to write about more often, what's actually really valuable about having Elon and his team here is they push us to think, is that a first principle problem?

Is that a problem of gravity? Or is that a human-created problem? And taking that lens to a lot of these, what you realize is, I, the Secretary of the Army, my 10-stroke can fix a lot of things. Secretary of Defense, Hexas, Pentrook can fix a lot of things. We need the right mindset. And General George and his leadership team have been waiting for us to come in and give them the top cover to do what they know is right.

And so I guess to grade Silicon Valley right now I would say we can't give a score. I think a lot of the Palantiers and the Andrews had to take a beating over a number of years just to get in. We were trying to open the door up to get more in. And what I would say is what we need from Silicon Valley and the VC world and private equity, if it's already starting to scale, we need you to look at what we need in our future wars, and we need you to help us build it. And it's got to be cheap, and it's got to be scalable, and it's got to be not exquisite in nearly every instance. And despite our tendency, what we're going to need is we're going to be pushback every time we put another requirement in.

We need that community to say, well, wait a second, why are you doing this? Like it we created this RCV so it's a robotic combat vehicle. It's awesome the thing as cool as can be But it's three million dollars per copy and an eight hundred dollar drone to take it out We're one of the wealthiest nations in the history of the world that the math doesn't work Yeah how much do you feel like You know the the West Coast and you know in general the defense tech community broadly takes feedback well a lot of people get fixated on a single solution or an idea to a problem and, you know, maybe they'll go, they'll head over to Washington and start

talking about it and get pushback. And sometimes founders can get so much conviction in an idea. And they think they, they think exactly what they're doing is right. Have you found the, the defense tech community to be as receptive to kind of feedback as they should be? Or are some of us a little too hardheaded still? I think if you take the most hard-headed founder you've ever met and the person who's most entrenched in their belief set, and then you compare that person to the defense industrial complex and the primes, your vision of entrenchment wouldn't even get you into the game with how these primes have thought and acted in the systems that they've created. One of the things I say very often now is I will measure it as success if in the next two years, One of the primes is no longer in business, and the rest of them have all gotten stronger. We desperately need the thinking from middle America, small and medium businesses,

innovators and garages, venture back businesses and not, to come into the Pentagon with us and push us on everything because that's where American ingenuity thrage the best. And so, again, the reason we're here is we are welcoming you in. Yeah, that's fantastic. That's fantastic. I mean, I have one last question that we'll switch over. Are you seeing enough from the parts of the financial market outside of Silicon Valley for a long time, certain large pension funds couldn't invest in defense technology? Obviously, we are very excited about the venture-backed defense tech ecosystem, but there are transformations that should happen maybe in the public markets.

Maybe even though I'm rooting for the startups here, let's make our prime. great also. Are you seeing movement there? Is there the same type of energy in the public markets with the really big companies that maybe you're seeing in Silicon Valley? I would say that they will be slower followers, as my guess. I think that they have typically been able to withstand these little bursts of energy that happen at the transition of an administration. Their incentive structure, I think, has been in these moments when you have General George on We just testified yesterday at the House, and we get yelled at by whomever the Congress man or woman is about whatever the pro quo interest is. I think that the primes have had that tendency to double down on lobbyists.

They've had the tendency to pull down the hatches and basically say we're going to weather the storm. And so what I think they're misunderstanding about this moment in time is President Trump's and Secretary Higgs says tolerance for pain to do the right thing on behalf of the American soldier, I truly believe. is different and unique. And my best guess is that they will start to realize in the coming days, weeks, and months that they are going to have to adapt and change or die. And we are not going to come bail them out again as a nation. And we want them to succeed. Those remaining ones that can sell to the Army in a couple of years, they're going to

be incredible because we won't buy it unless they are. And so I think what it is going to take to change them is the realization that the, the, ways that they have delivered value to their shareholders for the last couple of decades are no longer going to work in the new security environment with the leadership of the president. Well, Secretary Disgril, thank you so much for joining. This was a fantastic conversation. I learned a ton. Really appreciate you hopping on. This is fantastic. Come back on. Yeah, whenever you have more news, we'd love to have you. Love to have you. I appreciate it. Hey, thank you for having us. Thank you for doing what you're doing. And General George should be joining

in just a second. I'm excited to go deeper on this topic. And then hopefully carry these conversations into some of the other folks we have on the show. Michael, I don't know if you want to pull up the guest list as well while we're bringing in General George, but we can give you the rundown of the show. We have General George coming in now, and then we're going to jump over to Adam Porta Price at Ann Aral. And then Delian at Varda can also give some context

on what's happening in Defense Tech on the smaller side of things. But I still think the proof is in the speed of XSXA, to go from a tweet that I posted that was, you know, almost half joking. Hey, TBPN. Hey, Army, do you want to come on TBPN? To actually making it happen in two days. They're going to wreck. It's just speed of execution.

And you can tell that, I mean, there are some, there are some startups that can't get a CEO on our show in two days. Yeah. Because they're like, oh, we got to talk about what they're going to talk about. Or a solo GP that needs to schedule a month up. Yeah. Like how many, are you going on four vacations in a row? Yeah. It's crazy.

No, but just the mindset, the focus, the sort of urgency, the commitment is amazing to see it. Yeah, totally. Anyway, let's take a second to tell you about numeral sales tax on autopilot. Sales tax, and it's per month on sales tax compliance. It is AGI for your sales tax. Sales tax on autopilot. Numeralhq.com. Go check it out.

We should also build on. We should also build some poly markets around Army transformation. I wonder if there's a market for recruitment goals. Yeah, well, anyway, we have our next guest. Thank you so much for hopping on. General George, welcome to the stream. Thank you. Great.

So we were just talking about modernization. I'd love to hear a little bit more about what that means for you, what your goals are, and how would you describe the overall process to our audience, which is mostly folks in Silicon venture capital and technology companies. Yeah, I think we're seeing, we're watching what's changing around the world on the modern battlefield. I think a lot of people are seeing it and reading about it. And what you get with a lot of this dual-use technology

is changing drones, for example, autonomous systems. What we have been doing over the last year or so is actually transforming our units. We're going to have to change how we train and operate. The big thing, and I think our secretary was just talking about that, talk about how we buy things, how we get products that we know we're going to work into our soldiers' hands and doing it quickly. I think the biggest change that we're trying to do is actually getting, you know, the engineers that you guys are familiar with out inside

of our formations, talking, seeing the problems that we're trying to solve and help us solve those problems directly. So we're trying to get rid of all the middlemen that we have normally have had in our process. I was reading Mike Gallagher's Wall Street Journal op-ed, bring warriors back to the U.S. military. He advocated for something he called shifting tail to tooth, talking about urging the Pentagon to redirect money and manpower from headquarters bureaucracy to actual combat units. Is that an important shift? And what does that actually look like empowering the warfighter to make a decision to buy something? That seems like antithetical to the way we've been operating. Yeah, well, you know, we always put things in terms of,

you know, we have a budget. It's our job to get the biggest value out of that. Yep. Headquarters aren't going to win. You know, it's our soldiers that are out there, you know, fighting and we need to put every resource that we can into those. So we're cutting higher headquarters. We're cutting geo positions. We're, you know, closing some of that down so that we can really focus. And I know our secretary and I talk a lot about getting helmets back out inside of our formations. And that's what we're really focused on.

So we're cutting our headquarters here in D.C., you know, whatever we can do to thicken our formations, make sure that we're growing the capability that we know we need. Can you talk about how you're thinking around planning and urgency as you guys have a sort of monumental task to modernize the force? And you guys are making great progress against that. But at the same time, you know, this is a multi-year project. How do you think around, kind of pacing and pushing your leadership as well as, you know, the force to move as quickly as possible. Yeah, well, the biggest, you know, our soldiers have no problem moving at speed.

We've shown that. You get that out there. You know, they can adopt this technology. They can do it quickly. You know, the problem we have is the closer you get to D.C., that's where the challenges. And so, again, I think cutting some of that out, You know, the secretary talked about being data-centric and what we're doing to understand, you know, what's happening inside of our formations, automating our business systems. There's just a lot of things we can do.

We can go fast, and there's a lot of things that we can do to adopt commercial tech out there. We're buying things that are modular, open-system architecture that work with us. We have bought drones for the most recent brigade that were updated from the very first. unit that we fielded some of the drones. So I think we have to buy things differently, and I think we can go faster, and that's our focus. Can you talk a little bit more about that digital backbone? I'm sure there's incredibly advanced things that you can do with artificial intelligence once data's in one kind of centralized location, but are there still systems that we're moving off of paper? And just like, can you talk about the balance of working on the

the latest and greatest while still, you know, tackling the nuts and bolts of just a version one of a digital transformation. So one of the things for us is we're calling it next, next generation command and control. And you can envision we have a bunch of these disparate systems. Each of them have a vehicle. There are several different radios. And we're collapsing all of that.

You're basically, you know, leaders are going to be out there with a tablet and apps. So you've got an application that does airspace management. You got an application that can help you with lethal targeting. And that's where we're moving towards. That's on the tactical side. We're doing the same thing on our business side. And really we need to collapse all that together. I mean, I don't ask for, you know, the days I think of asking for information papers

and asking for information are over. I mean, I have a smart board in my office. I've every, you know, I just don't do that anymore. I can go click on anything that I need to know. know inside the army and have that, you know, I have that data at my fingertips. And we just got to train all of our leaders. Like I said, that has to be business from top to bottom. Our soldiers have no issue. That's, you know, that's how they've grown up. And they are very comfortable in that space. And we got to make sure the whole process from top to bottom is operating like that.

Is this modernization effort, I imagine that it will have knock on effects in recruitment. But what, what are the other messages that you're sending going forward around recruitment specifically? Well, we're doing great. I think we're closing in on like 95% of our recruiting mission. We have some of our biggest months that are coming up. You know, what I enlisted in the Army right out of high school, you know, what people come into the Army, they want to come in and do their jobs. And again, that gets to, you know, cutting out the excess and, you know, folks at headquarters. and doing those things. And so we're trying to eliminate anything that doesn't allow them to completely focus on their jobs.

The other thing that I consistently hear from soldiers when I'm out there is that they know we need to transform. They want to transform faster. And so I think we owe on that. And that will make a difference, too. They want to come in to a modern, transformed army, and we can do that quickly. I'm confident of that. What kind of, you know, historically people, you know, on the West Coast in San Francisco

are working in the tech industry generally think about, you know, serving the country by maybe joining a defense tech company. And if they're an engineer, particularly they want to oftentimes work on, you know, technology in the private markets. What kind of opportunities do you guys have in the force that you're really excited about recruiting for that maybe people within the tech community aren't, aren't thinking about as opportunities today. So we are reaching out, and I hope here next month, we got a bunch of folks that we want to bring in. You know, there's so much talent out there, you know, that they have

an opportunity to serve. We have some of them that on the Army birthday, we're going to swear them in that are engineers, technologists that can serve in the Army Reserve. They can help us and still be a part of their companies. On the other side, you know, we want to be very open. I mentioned the transforming in contact. We're having engineers that are coming out with our units, seeing how are, you know, seeing the problems that our soldiers are trying to solve in the conditions they're trying to solve it,

whether that's, you know, the heat out in the Indo-Pacific. You know, we had engineers with us over in Europe. And I just think we need to be more open and inviting and getting those folks in because we got a lot of energy. innovation out there and we need to just make sure that we're tapping into all of it. Last question, we'll let you go. A lot of early stage defense tech companies, they don't always have the opportunity to go run a large scale pilot with the Department of Defense or the U.S. Army on day one. Some of them are getting experience in Ukraine, for example. Has that been,

is that an effective path to pull some data from a Ukraine experience as a startup and then use that as a case study to make the case that the U.S. Army should at least demo what they're building? Yeah, I mean, that has. We've taken a lot of that. We're collecting a lot of that. And again, we are creating our own environments. If you go to any of our combat training centers, sure. We have that out there where we have jamming. You know, they're going to have to face the electromagnetic environment that we can replicate to do that. So we're doing that at our combat training centers. We're doing that at home station training.

So again, just getting these companies, and that's what we want to do. We want to invite them in, and we're doing that. Next week, I'll be down at our joint readiness training center, and we got a whole bunch of new companies that are coming in there, showing us the systems that we have. And again, this gets back to be an agile and our funding. And the secretary and I talk a lot about we want these

small companies that are very innovative involved in what we're doing and building products for our soldiers that's fantastic thank you so much for taking the time we really appreciate and thank you for what you do yeah thanks for having us on appreciate it cheers your day cheers bye talk soon um super helpful perspective yeah very interesting and honestly uh it's makes i mean it's always a bull signal to me me when people in any type of leadership position are willing to go out and be on the media, you know, the front lines of the media telling their story. You know, we've seen, you know, no, I want to go ask every drone company we've talked to. Like, hey, have you actually taking the army up on their offer? They have electronic warfare test sites. Are you there? Are you

there? Or are you just, are you just building CGI renders? What's going on? Are you actually out there on the test sites getting shot down by the U.S. Army. I imagine you built something, you raised some money and the VCs are like, yeah, this sounds great. And then you take it out there, the Army just destroys you. It's like, this is one percent of the way there. People are nervous. People are nervous to do the Sequoia partner. Yeah, no, no, no. People are nervous to go, you know, do a demo for VCs, but for SaaS. Doing it for a, the one customer that you need to make your business a reality. Yeah. Well, we have Adam Porter Price from, uh, Anderil joining next, and I'm sure we can ask him about these demos because they've been on an absolute tear, launching different missions, different programmers' record.

They just made an acquisition that we'll ask them about. So welcome to the stream, Adam. Great to have you here. Great to have you. I'm excited to be here. Thanks so much. Can you introduce yourself and then give us the breakdown of the news from this week? Yeah, so I'm Adam Porter-Price and the head of M&A at Anderl.

I also look after some of our strategic partnerships as well. And this week we announced that we acquired a class, which is a, ruggedized computer company. They're based all over the world. They've got locations in in the US as well as Ireland and they've been making sales to US and allied governments. So what's important about ruggedized, ruggedized computing in the modern warfare context? So every robot, every annual robot has a computer in it. And it turns out that like actually making a computer that can go into places that is hot, dirty, it's going to get dropped a lot, like that is actually kind of hard. And we have tested, we have tested other people's computers.

Like we have taken computers out into the desert and like tried to make them work on the back of a JLTV and run program, run lattice our operating system. And like basically nothing works, right? Like it's, it is a difficult and very demanding environment. And the only computer that we've seen consistently work when you're out in that environment where a warfighter has to be able to do something when they're out in the field is the class is the class computer. So we, we, we, We use a lot of their computers today, but we have visions for what we want to do with them in the future. And like the number one thing that is extremely likely to happen is that there are going to be more computers out in the world. And they need to make decisions.

Like our AI needs to be able to do stuff without being able to phone home and ask for permission. Like there's decisions that have to be made and literally can't happen fast enough over the internet or over whatever networks. The speed of light is not fast enough. And so, like, you actually have to make these decisions on the device. Yeah, I imagine, like, the device gets hot. You want a fan to blow that out. Now water flows in. Like, there's just, like, a constant trade-offs, right?

I was thinking, you know, maybe another bitter in the process would have been Sonos, because I can't even get my Sonos speakers to work and my, you know. Don't get Jordy started on Sonos. I'm with you guys. I love my Sonos and then they messed up the app and, like, nothing works anymore. It's so, so bad. Anyway, quickly, can you benchmark what one of these computers feels like relative to, you know, a phone, a laptop, a desktop versus, like, server rack of H100? How powerful does the system roughly need to be if that's not classified?

So the reason why we acquired this company is because the team can actually make lots of different types of computers. Like when we buy a company, we're really, they often have a product that we like a lot, but really what we're doing is we're getting an amazing team. Sure. And what we love about this company is that already they were sprinting with us on building a new product that we did, I think we announced this week, Menace T, right? Yep. But like we have, we have a lot of grand designs for different types of computers that we think need to exist in the world.

And so they have, they have a very popular computer called Voyager. And it's like, it's about this big. Like it's probably the size of a really thick, hard, hardcover book. But the team is extremely capable of building lots of different types. of computers. And then the other thing that they do, which is for some people, like a little bit boring, but actually extremely valuable, is that they will build the chassis that's ruggedized. Like, you can drop it off of a C-130 and like it's going to hit the ground and like, it's going to be fine. It's still going to work, right? It has all of the cooling in it that you need. It can carry a

lot of different radios, right? So you can plug in a sylvis and a persistent systems and a whatever radio into it. And so like you actually can go do the stuff you need to do out in the field. You can run lattice. You can talk to lots of different people that are using lots of different radios. And this is just like an absolutely invaluable capability that we have to have. Okay. Talk to me about the anatomy of the deal. Is there like an investment banker involved?

When did you guys meet? I've heard this story like, oh, if you're going to get acquired, you'll meet your acquirer a decade before the deal happens. You don't just cold call and say, hey, I'm ready to get out and take my stock off me. I mean, if you're a good, if you're a good acquirer, you are out in the market and you are talking to two to three hundred companies a year. And you just like, you know everybody, right? Like there's not that many companies in the world. And there's not that many good companies. And so the chances are pretty good that in fact, like every single company that we've bought,

we've known them for a while, right? We've watched them. We've talked to them for years in advance. And like, we've been buying class computers for for years. We knew that they were really, really talented. And we realized last year that not only is our demand for computers just insatiable, But the things that we would like to do, if we had this team working for us, we could go build products that as two separate companies we would never be able to do, right? It would just be too hard to make the incentives work. And we never buy a company that's for sale. Like we always make them for sale.

We go find them and we ask them, like, will you, we think that there's, there's two paths, right? There's a path where we're separate companies and we do things arm's length, or there's a path where we are one company and we are able to move much faster together. And in every company we've bought, that's the route that they've chosen, right? And so we've been working on this since last July or August. And yeah, this is how long it takes. It takes nine to 12 months to buy a company like this. The line that stood out is that we don't buy companies that are for sale.

And I wanted to highlight that because I believe there's a sentiment in the defense tech community that's, you know, it's all kind of butchering. Who cares by raise $200 million? No, it's like shoot to be a new prime. And even if I miss, I'll just run a process and I'm so talented or, you know. So I want to know what is the state of like the market, the M&A market broadly. And the thing I wanted to specifically highlight was a lot of teams look talented on paper. But if you've been, if you've raised and been working on products, even if you don't care that much about the products they built in the past, you're still going to be hypercritical

because the real resume is like, well, what have you built with $10 million? What have you built with $50 million? What have you done? And because that says a lot more than who your investors were or, you know, anything else. We often, it's really hard to buy a company that has raised venture capital because the pref stack is, I mean, you guys know this, right? The pref stack is really, really high. And our expectations when we buy a company is that we can like 5 to 10x revenue in three to four years. years, right? So you really have to have conviction that when you're paying, when you're paying

what we would pay for a company. And we pay in market multiples. Like, we can lean in on some things. We can, we can, we can be flexible in a way that I wasn't able to do when I was doing this in, in more traditional companies. But like, we still, we're not crazy, right? We pay like what you would, what, what a fair value is for a good company. And so we, we can lean in a bit, but if somebody goes out and raises a couple hundred million dollars, like the, the outcome that they have to have in order for their investors to be happy and for the common to have a good outcome is really, really high. And I actually think that the ceiling on like a YOLO, like let's just do this and be legends acquisition is like three or four hundred million dollars. Like when Boeing acquired liquid

robotics a couple of years ago, that was a company that they had invested in. They were a little bit bailing out the venture capital arm because the VC arm had had invested in it. And so like big Boeing was like, all right, well, we're going to, we want to own this. And I'm, I'm certain that they, I think they paid about $300 million for it. I'm certain that that was 10x forward revenue. I don't believe that they ever hit that 10x forward revenue number. But like, I actually think that that is basically the ceiling that a traditional buyer can be like, yeah, let's just rip it, right? Above that, the board gets involved. There's actual valuation math. Like, people start to look pretty critical at it. And so for like a traditional buyer, I actually think that that's the

ceiling. And like, we're not stupid, right? We don't make dumb decisions about acquisitions. We don't just like rip it because it's it would be cool. Uh, and we're, we're helping somebody out, right? Like we are, we're, we're pretty careful with how we value companies. Yeah. So you've talked to, you know, two or three hundred companies in the defense tech space. I'm sure some of those every year, every year, every year, how are these companies being built without venture capital? That seems very, uh, counter to the narrative. Everyone says, oh, I need to raise so much money,

because everything's so expensive. We got to hire all the engineers and pay for all the drones. I'm going to blow up. But yet companies are doing it. So something must be, you know, unspoken. It takes them, it takes them longer time, right? Sure. And, and, and, but what you'll find is though that they just make decisions that you make when you are, when, when you, you have to be cheap and cheerful, right? You have to like, hustle and you have to figure out a way to do it.

And so like, a lot of times when we find companies, they've just found a really clever way of doing something that allows them to get their product out. And like, all of these guys are hustlers too. All these men and women who run these companies, like, they move. They're hustlers. they are good at running their companies. And like that's why we want to own them. That's awesome.

Do you expect more competition from Primes on the M&A side in, call it two, three years? Like it seems like right now they're asleep at the wheel. And to be honest, I don't think a lot of talent would be like, oh, I want to be the talented team to go join the non-talented team. And then, you know,

it's not that fun, you know, to be like the best team at a company, right? And, you know, in many ways. Yeah, you want to be in a group of all A players. In some ways, that's what the money is for, right? Like, if you pay enough, right, that's what the money is for. But yeah, I'm with you. Well, yeah.

And so that's what I'm kind of getting at. Do you expect you guys come in three years from now and say, this is a, you know, we believe this is a fair price. And then, you know, some other prime comes over the top and it's like, we're going to pay double just because we're getting killed over here. And that happens. they'll ever pay double. I don't think they'll ever do that. I often am in deals and like there are other people in this ecosystem that are smart, like other more traditional but not super traditional,

but other acquires. And the problem is that like they are just, you have to do like a hundred things right to buy a company like this and to win. Right. And if you do some of those things wrong and like a traditional incumbent is just, it's just they have so many impediments in their way of keeping them from doing this. It's not just like finding a good company. It's not just showing up and saying, like, we want to pay a lot for you. There's so many other things that you have to do right in terms of taking care of the team, committing to investing in additional products in the future. And so, like, I think it's actually pretty hard for them to do. And I used to work in a more traditional acquisition environment, like M&A environment. I know what this is like. It's really hard

for them to do. Yeah. Well, this is awesome. I know you have to get out of here. It's 1129. We will talk to you soon. I'd love to have you back. We could go way deeper. I'm sure there's tons of people that would learn a lot from what you have to say. So thank you so much for joining. Thanks guys. We'll talk you. Cheers. Bye. In the meantime, let me tell you about Vanta automate compliance, manage risk, improve trust continuously. Vantza's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation. You don't get air horns and security. No, not in your average Vanta read. You've probably heard them on other podcasts, but only our Vanta reads have the Airhorn.

Whether you're pursuing your first framework or managing a complex program, go to vanta.com. Anyway, we got Delian coming in to the studio, Delta V with Delian. He's not here yet, so let's do an ad for one of his companies in his portfolio, AteSleep. What's new in Pod4 Ultra? Pod4 Ultra has all the signature features. You love about the pod, plus new groundbreaking upgrades.

How'd you sleep last night? Jordi. I put up an 89, only six hours, 508 minutes. Did I beat you? The new app is so good. That would be three. Seventy-three. I got roasted.

So your new milestone, John, is three nights. How did I get so little sleep? I know, yeah, I got to do three nights. We thought we were going to have a real, like, battle back and forth, and Jordie just ran away with it in the first quarter. I take it seriously. Anyway. Take it seriously. Oh, and we're having, we're having Mateo from eight sleep on.

Oh, fantastic. We're going to sleep day. We're going to get a bunch of sleep people, Brian Johnson will be joining as well. We should have the WOOP CEO back as well. Yeah. Talk about that. Sleep tracking.

Go back on. Anyway, until Delian gets here, he's almost here. I'll 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 ad, seamless ad buying across the globe.

And I'm excited to bring Delian into the studio. We have a yellow light, which I think means like, He's kind of here. I don't actually know what that means. He's green. He's here. Welcome.

Welcome to the stream, Delian. How you doing? Yo, what's up? You guys are getting real commercial. I like it. Oh, yeah, yeah. The ads never stop. The ads never stop.

Thank you to the sponsors. You see the ticker down there. The best companies are hyper-commercial. We just didn't need sleep read. I know. So you're welcome. You should have, by the way, like, you know, come up on stage when I was, you know, interviewing senators last week at Hill and the Lallyflower room.

You should have said, Senator, we sell ads. Yeah. You remember we ran it, we ran it, we did a talk at Hereticon. Oh, yeah. Ran a ramp ad during the talk. Wow. Yeah, I think they paid us a couple hundred bucks, which was the highest CPM ever paid for any ad ever, I think, because there were like 50 people in the room. But, you know, it's like a $2,000, $10,000 CPM.

But it's a lot of fun. Anyway, let's talk about modernization, Army modernization. What are you reading into what's being put? put out from the army, from the DoD, from the government. And are there any companies that are taking advantage of this? It seems like they're very much welcoming Silicon Valley. I mean, they're on the stream two days after we tweeted. It's crazy.

But what's your take? Yeah, I mean, huge cultural shift. If you look at the, you know, sort of various branches and how they're known for, you know, sort of adopting next generation technologies at like the tippiest, tippiest of the spear is basically like the space force, you know, sort of subpart of the Air Force. then next year traditionally, you know, sort of thought of as the Air Force, then Navy. And then typically Army is more of, you know, thought of, I guess, is like a, you know, sort of laggard in terms of, you know, really, you know, sort of pushing the fold on tech. And so, you know, sort of clearly they're starting to, you know, so shift that culture from within.

And like, I do think it's like a very bullish signal that SEC Army goes from, you know, you know, seeing that, you know, you guys, you know, are irrelevant to the tech ecosystem and the Catherine Boyle thing. And obviously the comm team there being like, sir, like, you have to, you just go get on this. And like, to do that in 48 hours is like very not trivial. Like, I don't even know how they got my email. Like I tweeted US Army come on TVPN. And they just emailed me five minutes later. It was crazy. No way.

Yeah, it was wild. They emailed me directly. Yeah. Yeah. I mean, look, I think there's, you know, sort of a lot of, you know, sort of changes in chaos from the new admin. Yeah. You know, like, I've been seeing this at a very tactical level with like, you know,

sort of portfolio companies where it's like, you know, they're going from, you know, when we talked to this plenty of times. but like continuing resolution, reduce budgets to, okay, there's now this reconciliation bill that's, you know, sort of coming in, but then, like, Congress has to go bought out. And there's already talk of like, well, maybe they're not going to be super pleased with that reconciliation package in Congress and pass at all. And they're maybe already talking about a fiscal year, 26 continuing resolution. So to extend the, you know, sort of current budgetary environment. And so you're seeing that, you know, sort of volatility, either should show up within individual program offices where there is a little bit of like, you know, sort of retreat to safety of the, you know, sort of programs, preexisting. contractors, et cetera. And so to have, you know, sort of U.S. Army talking about, hey, you know, even in

this budgetary environment, even with all this volatility, that we're, you know, sort of leaning in, you know, sort of on, you know, sort of net new, you know, sort of players and net new technologies, I think it's a real, you know, sort of bull signal for the cultural shift that's happening, you know, sort of within the Army. You're seeing that, you know, sort of some amount within other, you know, sort of branches, but like there's sometimes pushback to. I'll give an example that I thought was really interesting yesterday. I'm forgetting the exact official. I think he was like a major general, I want to say,

within the sort of space forest. I'd have to sort of look up the headline. But he basically, you know, sort of went on stage at a space conference, not space symposium, but another one. And it was like, look, I have a lot of people that keep pitching me on like orbital refueling. We've even funded some orbital refueling companies. I don't think that this gives us any significant advantage anytime soon. The time where this will be relevant to the warfighter is when there's probably a significantly

larger number of, you know, sort of Space Force satellites up in orbit to justify this, but that's not going to be anytime soon and is probably a decade away. And so, you know, it's kind of interesting, you know, to see these like, you know, some ways, like counter to what you'd expect. You think Space Force, like, bleeding edge, adopting the, you know, sort of new technologies, and you have, like, a major general saying, like, we don't think refueling technologies are particular, you know, sort of relevant. And so indicating, hey, maybe the tech ecosystem is, like, pushing too hard on next generation's abilities before it's relevant. And then you of the army, which is thought of as being a little size.

You're being like, we want next generation capabilities. People aren't pitching us enough on, you know, sort of this type of stuff. So, yeah, those are two. I feel like, you know, people are reversing seats. Yeah, I mean, at the same time, I feel like the story with the army was interesting because it wasn't just like IVAS, which is obviously this like debacle that took 30 years, never really got anywhere. Now it's in the hand of Anderl, you could imagine that when Anderall shows up and is like,

hey, we're ready for you to buy this. It's going to be pretty good because it's in Palmer Lucky's DNA. And I think he's just like, you know, the ego of. messing that up would not allow, he would never ship something that doesn't work, right? But then we also heard that he was like, oh yeah, one of the tech companies that we visited was just Microsoft because of course we need databases,

we need email, we need Excel sheets probably, all these things. And I'm wondering if there will be a next generation, Open AI was one that he called out as, hey, we get all this data, we can drop LLMs on top of it. And I wonder if there will be kind of a second wave of defense tech where enterprise SaaS companies, as much as we like to joke about like,

let's put the government on ramp, like it really might happen. And there's all the, there's going to be all the people. Yeah, that was something I wanted to ask. Yeah, that was something I wanted to ask, but we didn't get a chance

because we only, we only had it like 10 minutes or so with each. But is there, is there not enough founders in defense tech doing non-kinetic, non-ci-fi, sort of boring, you know, just like effectively,

you know, the modern CRM for XYZ, you know, who was the founder we had on that was doing supply chain, logistics, management. Roon? Roon. Roon. Yeah. That's one. Yeah. So Delian, what are you seeing in terms of non-defense tech startups start exploring working with the government in one way or another? I imagine

that it's very, it's easy to like slap that on. It's like, oh, yeah, we're cool. We have an American flag on the wall. At the same time, there is a real need and it does seem like there's been some neglect here. I'm going to do the classic media thing where you ask me a question and I'm going to answer what I want to answer. Please. Just do whatever. All blend together. It's a bit of a ramp ad. Today, Stripe and Ramp announced that they're going to be partnering together to issue stablecoin-backed in Latin America. Now, it's interesting to think about, okay, so why Latam? Why aren't they launching this? It doesn't necessarily U.S., Europe, et cetera.

You can make the arguments on like, hey, we have more currency stability here, so it's not as relevant. There, the value proposition is a lot stronger. But I think it's always interesting to study. If you look at, let's say, next generation sort of payment systems, how much. much has done to be like mobile QR codes, tap to pay, et cetera. You actually see that some of the more modern infrastructure is actually in more of the laggard countries because they don't have this sort of pre-existing, let's say, ACH, wire systems, et cetera, that have been built up over the course of a century. So it makes it harder to fully adopt and switch over versus like in Africa,

if you look at like mobile payments, you know, QR codes, et cetera, the like speed of transaction. It's actually like faster and better and lower fee there. But it's because there was no, sort of pre-existing, you know, sort of infrastructure or innovation there, they sort of leapfrogged us. You know, you can kind of make this green field, you know, sort of China, too, is like it was more of a greenfield. It's why they have the like super apps like we chat. It's because like they didn't have all these individual apps that existed before. And so one can come onto the scene with a super app.

And so to tie this, you know, sort of into DOD, is you know to think about perhaps the places that are going to, in general, gov, let's say, not DOD alone. Perhaps the places that are going to be able to, you know, sort of leapfrog are going to be some of the places that have been the least innovative over the past 20 or 30 years because they don't have any pre-existing infrastructure or concepts for how do we adopt next generation technologies, right? Within the Air Force, there is the like Air Force research laboratory AFWorks, which is meant to basically, you know, sort of be one of the early funding mechanisms for these next generation technologies. In the Army, you kind of have like Army Futures Command, but it's much less

built out of an infrastructure of like how do we adopt next generation user technologies. There isn't like a pre-existing pattern and so maybe it can be a bit of a leapfrog in it just a greenfield and then the equivalent on the like OMB smart card etc side of things like no I don't think there's been like an rify for you know next generation payment systems for like the Fed and like the corporate card system in the United States in like 30 years and so in some ways they don't have any like pre-existing bi-season circuit set or they can be like yeah we're just going to like completely radically rethink you know the entire way that we do it and adopt this stuff from scratch On the VC side, am I seeing tons of people working on this?

I don't think so. Like, it still feels like it's a little bit of an under-explored trend. I think the biggest thing is more like some of these incumbent companies realizing that there is a real, you know, sort of Gov opportunity. So I don't think that you're going to see like next-gen corporate card company start that are focused on the Gov. I think where your community is like ramping like, oh, I didn't even think about the idea that the government could be an adopter of my technology.

Because the whole point of commercial off the shelf is that it's commercial. off the shelf. Like if you build it just for the government, yeah, you have one buyer and that's a problem. But also it's not going to be as good of a solution as if like, yeah, also every Fortune 500 company uses it and you're under immense pressure to deliver the best possible product. Totally. Like, yeah, the reason that Ramp is most relevant for them is because it also has all these commercial customers where you can adopt the like best in class basically like, you know, sort of patterns and like, you know, I think they talked about, you know, I forget if we talked about this when I went on TBPN during, you know, HVF. I think it was before this panel.

but just like Senator Ernst and, you know, Eric panel was phenomenal. Just from the perspective of Eric talking about the like cost savings and efficiencies, they were able to improve with an annual. It's like APB, you know, it just was on the show, Brian, Chip, et cetera, all super, super brilliant people. These are like the best technologists that have like tackled this field. And even for them, Ramp was able to, you know, sort of create significant efficiencies. Imagine what that happens when you get, you know, get it adopted into the government. Yeah, well, speaking of Adam Porter Price, he just came on the show.

was breaking down their acquisition of class gave us some interesting anecdotes about how the M&A markets work in defense tech. He's not buying a lot of companies that are for sale. He's also not buying a lot of venture back companies. What do you think, what are you reading into Anderl's M&A strategy as far as a venture capitalist perspective? Yeah, I mean, look, I think, you know, APB is a very intelligent acquirer, right? When, you know, I was listening into the last seat of sort of five, ten minutes of his, you sort of talk. And it's like, look, he goes out to, and buys things where like there's a clear ability to like go five, 10 X their revenues. There's a one plus one equals three in that like they can build products together within

and roll that the two companies weren't able to apart. And it's somebody that's like known for years, not something that like when there's a fire sale because the VCs are starting to run out of money, like, you know, then he finally starts to take them seriously. And so yeah, I do think there's a subset of investors that are investing in these defense tech outcomes that think that there is a potential, you know, sort of acquisition. option at the end of it. And I don't think there is the equivalent of like, you know,

there's definitely these like massive mergers that happen, you know, within, you know, within, you know, sort of the primes. But you don't see the equivalent of the like, I don't know, like Adobe Figma offer, the Google, you know, sort of Wix, you know, or SIS offer. Like there's not the equivalent. WhatsApp. Yeah, all of these. Yeah, where, yeah, no, like, looking at it, there was, there was like roughly three billion

of defense tech funding in 2024. Like, there has to be a bunch of other exit. past. It's not like Anderl is going to be like, oh, yeah, you know, we know your funds coming to a close in 10 years. We're going to, we're going to acquire $9 billion with venture companies that are at the end of it. Just so we want you guys to get a nice 3x. Yeah, yeah. And I mean, the other thing is that, like, I think that it's easy to look at a headline number on some sort of acquisition that happened and think, like, oh, well, like, they were acquired for 3x revenue. So, you know, we could probably, that's probably our base case. But when he actually dug into it, he was like, oh, there was this deal.

but it was because like Boeing ventures had invested in this company and then Boeing bought it. And so there was like total like cyclicality of the deal and like all these special things going on. And it wasn't necessarily just like an open fair price, all financial investors really setting a price in the market. And so there seems to be a lot of distortions in the M&A markets. Yeah. I mean, I'll give an example that was just announced today in the like aerospace field that sort of matches the negative pattern that APB was suggesting. So this company is a compel space. It was one of the leaders in the synthetic aperture radar satellite.

Think of this as basically like a different spectrum than like planet labs that, you know, largely focuses on like visual spectrum. This is more like radar base so you can see through clouds, et cetera. They raised like, you know, 320 million dollars total. So right in that ballpark where APB was saying, once you raise hundreds of millions, it's really hard to, you know, sort of go to an M&A outcome. The company was around for like 12, you know, sort of 13 years. And in 2022 or 23 suffered a handful of setbacks,

both like they had propulsion issues that made some of their satellites end up deorbiting a little more quickly. They unfortunately went on a rocket lab rocket that ended up having a launch failure. And so that basically satellite went down. Founding CEO ends up having to resign. And company just sold for what looks like, you know, sort of 320 million, even though they basically, you know, sort of preferred stack was 315. And it sold to this like, I forget the name of it, but it's like quantum fund or quant. It was like some quantum related hedge fund that it's going to start using their data for, you know, sort of hedge fund trading and then try and develop some solutions. on it. And so it's like, interesting.

Look, that it basically turns into effectively like a, you know, sort of one-x outcome for all the investors if you're selling for your, you know, sort of press stack. And that's sort of like truly the best best case outcome that you can, you know, sort of get when you're, you know, call, you have seven years in, probably, I assume flatlining in revenue, still significant, you know, sort of burn. There aren't any obvious, like, large DOD programs that they were, you know, sort of scaling into. And then you have this, like, counter example that one of their competitors in the, you know, Los Angeles area, Umbra that has, you know, sort of raised less, but I think has taken this much more, yeah,

I don't know deeply the company's numbers, et cetera, but my just sense is like they've just been way more, you know, sort of capital efficient and they're taking, you know, a longer time to, you know, sort of build up, but they're doing it in the way that, you know, sort of gives them an outcome on the other side where I do think if, you know, need be, they could get acquired and if not, I think they can probably run it for a pretty long period of time just on, you know, revenues and cash flows. And so I look at, like, the defense tech ecosystem, I'm like, man, people are raising large amounts of money and they think like, oh, if I take the Silicon Valley approach of like

burn fast, grow fast, et cetera, there will be like a whizlike outcome on the other side potentially. And it's like, no, like the, you know, some M&A space here is like way, way, way, way more constrained because unlike Google or like, let's say like, you know, Facebook acquiring Instagram back in the day, there's much less of this like competitive threat by next generation players that grow really, really fast. There's just like not that equivalent dynamic where like you're going to get, you know, sort of bought out even with like relatively limited progress.

you're only going to get bought by like these very, very, you know, rational buyers. Not to say that like Facebook's, you know, sort of acquisition of Instagram was irrational in the long term. But in that moment, it looked very irrational, right? Like it was a deeply, deeply irrational purchase according to like traditional purchasing, you know, sort of frameworks. I don't think like APB said, there's going to be that in like the defense, you know, tech ecosystem. They're only going to be very rational purchasers. Yeah. Staying on, I don't know, cameras in space.

I was talking to Kevin Wheel from OpenAI, formerly Planet Labs, about observation in V Leo. And he was saying one of the challenges is that orbital refueling and maybe the fact that it's farther away than we think. What is your take? I mean, obviously you're one of the new Leo beneficiaries. What's your take on timelines for doing interesting stuff in very low Earth orbit? Yeah, I do think there's a real challenge of, you know, if your business case is predicated on a certain mission timeline of like how long you're up there to take photos and generate you know sort of revenue yeah there's definitely some interesting folks that you know albedo

space is trying to build these very like dense and somewhat aerodynamic you know sort of satellites where they're trying to you know sort of close this gap between like hey if we're lower we like have slightly better you know sort of imaging quality and if we make this thing somewhat aerodynamic then we don't you know have as bad out of like a you know sort of deorbit timeline It just feels like it's used to so many technical risks and hurdles where you're trying to like, you know, the way that I feel like Trace sometimes talks about it is like companies typically should only really rely on like one miracle. One miracle companies. One miracle companies. These like multi-miracle companies are somewhat difficult.

Now I'm saying that like also, you know, maybe Varta is also a multi-miracle company. It's not trivial. But, you know, maybe you're allowed to take a, you know, sort of multi-miracle stab. Well, we have an American Pope now. Yeah, exactly. Exactly. You're going to bless all of us. What's your thesis around, you know, Fury is super exciting. You can imagine they scale it up to be bigger, carry bigger payloads, faster, more

competitive with, you know, something like an F-35 or an F-47. But does Anderil advance so quickly from an autonomy standpoint that they're, that they never have to do a sort of human-rated human-enabled? platform is that is that you know just from your personal standpoint does that feel like a possibility you just make them for tom cruise and the next cop gun that's it they make exactly one plane it has the iMac's cameras already baked into it it feels like there's just a such a strong religion within you know sort of the air force around you know sort of human pilots and yes cca was like a you know sort of significant step towards getting them comfortable with like autonomous

wing bin, but like fully, fully, you know, sort of decoupling for some of these, like, larger, more capable, more expensive platforms from having, like, a human operator that, again, I think what happens is, like, the ratio of autonomous jets to human jets just significantly, you know, sort of increases, I guess, over time, where it's, you know, right now they talk about as, like, three to four to one. And then over time, I think that gets to, like, a hundred to one. But I think they're still going to want this, like, human orchestrator that literally just probably has, like, a literal ball of furies that are, like, you know, operating around the, like, you know, sort of fighter, you know, debt pilot.

But I would probably bet on, you know, sort of five to one odds that it's more likely than not, you know, and again, it's hard to, you know, sort of gauge whether or not they win it. You know, I think, you know, train others have talked about, you know, how recently some the feedback that they get from the department is like they're winning too much. And so, you know, maybe they're not able to win because they're such big winners. But, you know, I put like five to one odds that they definitely like, you know, sort of bid or, you know, architect some human-rated, you know, sort of fighter jet system, you know, in the next, you'll call it five years.

Yeah. Yeah. Is that personal perspective? This is not, you know, internal information. Of course. Or speaking on the half of founders. Well, while we're on FFF portfolio companies in the news today,

Fiji Semo going to join OpenAI from Instacart. CEO of applications. The CEO, now they have two CEOs and running different divisions. Do you, do you have a take about that? Not co-CEOs. Not co-CEOs. Are you worried that Will Brewy is going to be poached at some point? And Sam just seems to steal the CEO.

from all over the market. Head of space, head of space. I know. What are you thinking on the CEO planet, now CPO there? Yeah, exactly. I mean, underrated, right, that like the old Open AI team was incredible

and they all kind of scattered to the wind and started 25 different foundation model companies, but now he's putting together the Avengers again. It's great. You know, I, you know, not to be rude to the prior, you know, V1 Avengers, but I think the V2 Avengers are a little more sane, commercially focused and a little more stable.

You know, I think the V1 was probably right for like the research lab days. Totally. It would be a little crazy. Totally. You know, it's a commercial company, probably a little different. I don't know what I mean. You know, there's so much news that I feel like has come out of opening eye over the past week that I do think fundamentally changes how you should like underwrite the company over the next, you know, sort of five years where, you know, it seems like, you know, they're sort of abandoning the full for profit conversion. It seems like Microsoft is not necessarily fully willing to give up their like rev share and percent of, you know, you know, the revenue they get at these like,

larger scales that they were originally promised. And so that negotiation is clearly not done. And then in Samma's announcement, either sort of tweet, he was like, by the way, I am staying on a CEO of OpenAI, even though this person is CEO of applications. It's like, well, nobody was asking that question. But like, given that you're clarifying, maybe we should be asking that. You know, it's a question. Well, it made me think is it, I mean, we, we had 03 explain Chad GPD's entity structure the other day. Like, yeah, opening eyes. And it and it and it could not. It was like It was very difficult. And it was extremely botched.

You came away even more confused. So we don't, we don't have, we haven't passed that to real. The real age is when it's going to explain the structure. Being able to explain your own corporate structure. Yeah. But,

but I just read into that as like, maybe Sam is CEO of one entity in the stack and then, you know, Open AI global LLC is has a, you know, because they're not like co-CEOs. Sure. At no point did it say that.

So, yeah, I mean, you've been, you've been a little bit, uh, negative on, on wrappers, on companies building on top of, on foundation models. And yet another FF portfolio company, WinServe, acquired by Open AI, $3 billion outcome.

It seems like it's... I don't think WinServe is a portfolio company, by the way. Maybe it is. So it's publicly reported. It's publicly reported. I don't know how that would be the case. We missed that when we saw that. I found it on three different platforms.

Maybe it's fake news. Who knows? But the big thing is, is it game on for application layer companies now, given that you can go and raise a very traditional venture path. And the narrative of like, oh, you're just going to get steamrolled might not be there because $3 billion is $3 billion is a pretty good outcome, right? I mean, look, this is that perfect example of the delta between, you know, sort of defense tech and AI tech, you know, sort of companies.

Like one, there is the like, hey, I'm the big company with lots of cash. I feel slightly threatened. The like exponential growth of these things can sometimes be inescapable. And so I need to buy this and have like a player in the race. And then on the defense-ex side of things, there is no such thing as like uncontrolled exponential either sort of growth in some ways the government explicitly like meters your progress where they want you to see see you accomplish XYZ thing on a smaller program is a lily pad to the larger program, larger program, et cetera.

So it's like, yes, you know, Anderl has done super well. But if you compare them to the like exponential revenue growths of the like open AIs, the ramps, etc of the world, I don't think it's that. It still is like super linear. but, you know, there is some, like, you know, natural cap on, like, you know, true, you know, sort of growth rate. And so I do think it then makes it more rational for investors to be piling into some of these AI application companies. Like, look, I still, you know, probably not a, you know, bowl on things like Harvey is an example. Not to, like, overly pick on them.

But when I think about, like, you know, again, not to pick overly on another company. But if I were to think about, like, the irrationality of some of, like, you know, Harvey, you know, prices versus the seronic prices, at least Harvey you can rationalize, hey, there are these like multi-billion-dollar acquisition outcomes that are, you know, almost certainly going to happen quite regularly. I don't know, like, who buys Serronic, right? Like, I don't think that like, you know, electric boat, you know, the general atomic subsidiary or et cetera is buying, you know, Serronic for their shipyards for $3 billion. Yeah, yeah, yeah, yeah.

It's totally possible that the windsurf thing causes this cascade of like every hyperscaler needs an IDE company. And it's just like, boom, boom, boom. And they all have $10 billion to spend. So, you know, oh, is $10 billion too much? maybe two billion happens, but like multi-billion dollar outcomes, we could see a whole bunch of those. Same thing with, you know, image generation. Same thing with, you know, different agent models.

Like there's a way that like a lot of these could be baked into things. I think the other question I'd be interested to get your point of view on. So we were at config yesterday. Figma came out with, uh, make, sites, buzz, like a bunch of like very, you know, things that could be by themselves, their own kind of businesses, right? And I saw some commentary online that, was basically saying that like every app is just like basically converging on the same feature set right now it feels like in some ways where it's just like make anything you know and and so like

what like in your point of view obviously you you went you very clearly took a uh you shifted away from looking at a lot of software pure software opportunities but how do you think vCs will change in kind of underwriting some of these opportunities where where for some businesses that have been started in the last year, they're moving towards a place where everyone is weirdly competing over the same kind of like core use case at the end of the day, make an app, make, you know, X, Y, Z, you know, thing. Yeah, I'll use a, like, example from more like backend, you know, sort of cloud infrastructure that was related to AI.

There was all this hype in like 21 and 22 around. And I may butcher this because, again, not my field, but I believe is, you know, the term was basically these vector, you know, sort of databases that were a way of basically storing a lot of the, you sort of model weights, uh, that you know, pre-training, you know, sort of data that you were, you know, sort of working with. Um, and, you know, you're fine tuned basically models on top of the, you know, sort of base foundation models. Um, there was a whole set investors that plowed, like, hundreds of millions of dollars into these companies. They had crazy revenue growth. And then like within 12 months, AWS made it a feature, Google Cloud made it a feature,

Azure made it a feature. Yeah. And the completely, you just dropped off to zero. Because it was like, yeah, this is just a natural cloud feature. I think so much for pointing it out. Thank you VCs for like funding hundreds of millions of dollars to like, you know, make, you know, our customers very aware that this was necessary. But it turns out like people just like having things in a single platform that they already have a relationship with. And so, yeah, I think like, you know, if I were sort of, you know, dealing the CEO of Figma, I would just be like studying, Figma, I would just be like, you know, what all these VCs are funding? And I'm like, great, I don't even need to buy this. This is so easy for my internal team to build that I will just go all the best applications. And then it turns out the CFO is like, well, why would we have two design software contracts? You know, we already use It's already rolled out to everybody, everybody knows how to do it. Let's just kill this AI thing and just like, you know, use the AI up within Figma. And so I think that like, you know, I don't know if you guys remember this term Sherlocking. It was, you know, this is for the, you know, sort of viewers on the show that are, you know, below the age of 30. Back in the day, there was this app on the Mac App Store called Sherlock.

It was very popular. Some VCs fund today. It was getting like millions of use of revenue. All that it did was if you hit command space, it pulled up a little search bar and allowed you to search all your applications that's etc on your Mac app. And then one day at WWDC, Apple was like, hey, that's a cool idea. We're just making it like an OS feature.

And so it was known as getting sherlocked when a big tech company just is your entire company as a free feature in the software that they already have all the distribution on. And so I mean, I always looked at a lot of these generate an app companies. And looking at their revenue ramps, It's just, it's always, it's always, it's, it should be nerve-wracking if your revenue is

ramping that quickly and there are founder mode incumbents that are in the same category because usually means you can build said thing very quickly. But yeah, anyways, this is fantastic. Thank you so much for having on. We'll talk to you soon. Delta Ville. That's the end of that. Godspeed.

Next up we've Harley coming in from Shopify. We need a bunch of size gong because it's earnings day and we're pleased to run. that Shopify delivered Q1 2025 revenue rose 27% year over year, 2.36 billion edging past the 2.33 billion consensus. They beat the analyst estimates. And we're excited to have Harley here in the studio. Welcome to the show, Harley. I'm so glad to be here. Can you guys hear me okay? Yeah. Oh yeah. You sound great. Loud and clear. So run us through it. Give us the breakdown. How are you processing today? How are things going? These are going really well. I mean, I think, Q1. I mean, remember, obviously, Shopify is a bit of a seasonal business, meaning Q4 is always

like, we're ultimately in retail. So Q4 is always a big quarter for us. But Q1 was amazing. Revenue was up 27%. We had 2.4 billion. Free cash in the margin hit 15%. So about $363 million. And then it was our seventh consecutive quarter of GMV growth above 20%. It was about 70, almost 75 billion, which GMB is always important because it speaks to how well merchants are doing on the platform. So I'm, I'm, I'm. When Shopify does well, I'm obviously very proud. I'm especially proud now because I think this is, you know, just to say the thing, this is a very unpredictable market.

And I think Shopify's superpower of agility really comes into play here. I actually mentioned somebody on the call that didn't really get picked up, but because you guys are interesting people, I'll share with you. We've been public now for almost 10 years to the day. We had our IPO May 21st, 2015. And if you look back on the last 39 quarters, so 39 cohorts of merchants that have come on, 38 or 39 cohorts of merchants on Shopify have outperformed the greater e-commerce market. So one of the things I'm very, very proud of is that merchants on Shopify seem to be doing really, really well. But I'm excited to be on your show.

I mean, this is a – Yeah, thank you. This is a flex. I canceled mainstream media to do this. There we go. We are the mainstream now. We are the corporate funded media. That has some connotations.

I think this is better than mainstream because it's all more thoughtful. Yeah, yeah, no, no, we love it. So, yeah, I mean, you talked about the tumultuous market. There's a lot of headlines at the same time. Stock market went way down. Stock markets kind of back up. What should people be reading into new business formations, just broader entrepreneurship trends and the data from Shopify about the health of the American entrepreneur?

Yeah, I mean, look, let me talk about macro. a little bit first. Sure. We were around in 2008. We were a tiny little company, but I spent, I spent, you know, almost a third of my life. Was this a snowboard shop originally?

Well, we were a snowboard shop in like four, but yeah, like we started a snowboard shop and then actually when I was in law school, or if you guys know this story, but I, when I was in law school, I was born in Canada, grew up in South Florida, ended up in college in Montreal, McGill, and then I went to law school in Ottawa,

and I became one of the first merchants to you Shopify. Oh, cool. That's when I met Toby. Yeah. But 2008 happened. And actually, one of the things we saw during the great financial crisis was that a lot of people turned to entrepreneurship, either as a way to replace their job, their income, or as a way to supplement their income if they had reduced hours if they were working at a restaurant or a retail shop. During the pandemic as well, we sort of saw during the pandemic, all these physical retailers that some of them were laggards that had not really moved online yet began to move online at this amazing clip.

So in many ways, this is sort of, you know, Shopify kind of does well in these periods of uncertainty. But from our merchant perspective, we're not, you know, we're not seeing any changes in our merchants so far. Our data actually through April, so beyond just the quarter, but through April does not suggest any slowdown. It's still obviously fairly early to assess some of these impacts. But, you know, I think from a consumer perspective, one of the things that also happens is in times of disruption, it does feel like consumers and retailers, they kind of lean into brands that they know and they trust. And you think about your favorite brands, you know, for me, it's like Viori and Allo Yoga and James Purse.

Like all those brands are all on Shopify. So things have been really good for us. And I think that I'll continue. Talk about, I want you to talk about for a second, the power of shop pay just because as a consumer, I'm probably a DAU at this point. It's truly truly. truly, I mean, it's truly life-changing. I want to, I would love to get your sense of kind of, like, what is making Shopify so dominant today? I mean, we talk to a lot of entrepreneurs and obviously,

like the core platform, but can you talk about how kind of the sort of like flywheel that, that, you know, shop pay is, is kind of creating in the ecosystem? Yeah. I mean, shop pay is really interesting for two reasons. One is, historically, we've, we've really been a merchant facing product, merchant facing brand. So people kind of knew Shopify if you were a merchant, an entrepreneur, but for most people, like we were the brand behind the brand you didn't really know us. And both the shop app and more specifically, to your point, shop pay, is really the first time that I think people are seeing the Shopify brand in the wild. And actually for the quarter, shop pay facilitated like $22 billion of GMV. That was a 57% year on year. If you look

at the entirety of cumulative GM. We launched Shoppe in 2017, and we've done about $225 billion on Shopping so far. Part of it is that I think companies, I mean, Amazon is in a really good job of this, actually. They've sort of reset consumer expectations for how commerce is done. And I think for a lot of consumers, because of that, they want, you know, they want their products either ship fast or they want it, you know, ship cheap to them, or they want to be able to do one-click checkout. And so this idea of You know, we are not obviously a retail, we're a platform. But if you were to pretend for a moment that Shopify was a single retailer,

we would be the second largest online retailer in America after Amazon. We have millions of stores where about 12% market share in terms of all e-com in the U.S. I think Amazon somewhere in the 40s or something like that. So one of the things that we're able to do is even though everyone on Shopify is an individual merchant with independent business and an independent brand, we're able to give them economies a scale as if they were the second largest retailer in America. And one of those, obviously, is shop pay.

But shop pay is done incredibly well. And not just that, but we're also seeing that brands are now coming to Shopify specifically for shop pay. So we have something called ShopPay Commerce Components, which allows merchants just to use shop pay. And the way we kind of think about it is that if you're a big, coach is actually a good example of this, Kate Spade as well, if you're these brands that have your own platform,

maybe you're using a legacy platform or you have your own your own in home you know homegrown system you can actually use that component and we sort of look at that as our way of starting a relationship with these very very large brands um but shop pay has been been incredible in terms of the flywheel question if you think you know historically about how shop if i started 20 years ago really the focus for us was just e-commerce for smbs and then some of those smbs got really really big. Jim Shark got big. You know, Viori got big, Fashion Nova got big, bombus, all birds. These stores that start their mom's kitchen table became billion dollar companies. And so one of the first changes was we sort of moved from just focusing only on SMBs to focusing on larger merchants as well.

And especially those that sort of grew up on us. And that allowed, you know, established brands, Hunter Douglas, Mattel on running that had their own systems to come and migrate. entirely to Shopify. But the second thing that also happened was we began to think about like, you know, what is the future retail? Where is this thing going? And it became really obvious that the future retail was not just going to be this like false dichotomy of online versus offline. It's going to be retail everywhere. And that if you were going to be the entrepreneurship company, the retail operating system for the most important brands, you have to make it easy to sell on every surface area. And so we began to introduce things like point of sale and B2B and

you know, embedding our checkout into places like Instagram and, you know, X and, you know, every social media platform. Obviously, YouTube is another one. We have an integration to Roblox now. So if you have a toy company on Shopify or a company where your consumer spending time in Roblox, now you can actually transact directly in Roblox powered by Shopify. So the way that we kind of think about it is more of like a bunch of these different, you know, channels where commerce happens, AI shopping on, you know, AI shopping will likely

be one of the yeah so that's an area that that's an area I wanted to to get to next is basically LLMs I think you guys have made some early meaningful moves here how how excited did you get about the intersection of shopping and LLMs as you started you know using some of these products just as a consumer right I think a lot of people just early on start using it maybe as an alternative to a Google search and it was more for information it wasn't purchase driven and then we've had we even had an employee from OpenAI on the show. And he was like, oh, every time I want to buy a product now, I just get a deep research, even if it's for something like bathroom towels or something like that. Because he's like, why wouldn't I want, you know, the equivalent of three hours

of research on the right product to buy? Yeah. It feels a little bit like where social commerce sort of started, where it starts with discovery, doing research, finding you brands. You get serve some like, I don't know, I think actually, one of my favorite stores on Shopify is Ember, you guys know. Oh, yeah. Yeah, I actually know the founder. Great company. Yeah, good company.

He's on Shopify. Please tell the founder that I'm incredibly, I use it every single day. Yeah. Here in Montreal, my office. But, you know, we start with Discover. I think I was, I think I saw an ad or I saw some sort of real for Ember a couple years ago. It was like, my coffee or my tea can stay warm longer.

That sounds really good. But I didn't necessarily go to complete the purchase on Instagram. I then went to, you know, I went to probably Google typed in Ember found the website went on shop by store and bought it. So I think sort of the the trajectory of these new commerce channels starts with discovery and research first and then eventually migrates into like full on checkout. So I think this idea that more people are going to discover and shop on these AI tools, whether it's a wrapper or it's something like open AI or perplexity, I think that is an amazing thing. The way that we kind of think about it is anywhere where

commerce is taking place, Shopify has the greatest product catalog in the world, because we have the best stores in the world, we want to power those as well. So I'm not going to, you know, front run product roadmap, but you should expect to see Shopify merchants selling wherever their customers are. And if their customers are spending time on places, on AI tools and LM model and models, you should expect that we'll be there as well. But what's really interesting, I think, about that is that it means that all these. these like, what's a good example? Let me, let me use Spotify, for example. Like, weird thing to say out loud, but like Shopify has an integration for Spotify.

Why do we have that? Most merchants don't have Spotify artist profiles. But if you're Beyonce and you, who owns Sacred, which is a great cosmetic company on Shopify, you have a huge artist profile. It makes so much sense for you to also have an embedded store inside your artist's profile in the same way that if you're Jim, if you're Mr. Beast and you have a huge Shopify store with Feastables, you should also sell directly on your YouTube channel, like right there embedded checkout. So that's kind of how we think about the future of retail, that like where are these surface

areas new or old that transactions should be taking place that they're not? And then what we do is we go to these companies and say, look, let us help power that both discovery of great products, but also checkout in some cases even shop pay. Yep, that makes sense. I want to do a little bit of a deep dive on AI. It's such a big topic. I'd like to break it up and understand how is Shopify thinking about using AI tools internally as a company? And then I'd like to go through some of the different technologies from diffusion to text generation to agents on how the merchants can benefit from those.

But maybe let's start with just culturally what is the average Shopify employee using in their day-to-day now. Yeah. So I don't know if you've seen, you saw Toby's now. email. Oh yeah. Which at the time having it leaked, I wasn't sure. I mean, I think now actually there's probably more benefits to downside to it because it does, it feel, I feel like it's getting referenced a lot. And I think it also, I don't know, from an employee brand, employer brand perspective, it's kind of nice to know that like that's how we think about things. Totally. But this idea of like, I think every technology company has AI, you know,

they'll say that it's being utilized as either company. I think there's a big difference between utilization and it being reflexive. And part of the reason why, you know, this email was really important was we want to make this reflexive. We want to push the boundaries of how our team thinks about it. So this idea that even a simple friction point that before you go and ask, hey, I want to add some headcount to my team, okay, well, like, substantiate why AI cannot do that. That small friction point may seem annoying, but actually what it really provides for is a much more reflexive process of like, you're right, I actually don't need this person, I can go do it then. We also built roughly

about a dozen MCP servers that make pretty much every corner of Shopify's work legible. So now everyone can now find out about kind of everything else happening in the company. I'll give you the best example because I'm in kind of an earnings mode right now. Our earnings today is today, as you guys know, which is why I'm here. I often will go to different teams and different product leaders or technology leaders and say, hey, I want to talk more about, you know, I don't know, B to B in Europe. And they'll be like, okay, well, here's what's going on and they'll give me a, you know, they'll give me the brief. Whereas I felt for this particular earning cycle relative to previous ones, again, we've had

40 now, or 39, so we have 40 coming up. I didn't have to do the nearly as much. I was able to go into the vault, which is sort of our internal wiki, and I was able to pull far more information on my own, even to the extent that I can see at what stage different projects are at. So I think that is making company operations legible, I think is, I don't know, to me that's like the gold standard. It means that I'm not bothering anyone. I also, you know, if I'm working at 6 o'clock in the morning and like I need to get this one thing on B2B, I don't need to wait to someone is that they're on Slack to ask them. I can just figure it on my own. And I think the other piece of it that I think is on the developer side, which maybe is less, maybe is more obvious.

but we actually launch MCB server for, we're called dev assistants. So effectively it allows developers to like use cursor chat, windsurf, claw desktop, in a very, in a very simple way. It's just part of their daily workflow. So that's part of it. The other part of it maybe is less sexy, but it's on the support side. We think about like our support organization, how they deal with these millions of merchants, how they work with our merchants.

In many cases, there's two types of conversations. one conversation is really more like more of a low quality conversation, things like configuration of a domain name, you know, like username and password, picking a theme or how do I pick a theme? Then there's like high quality conversations, which almost looks like more like business coaching. And that's like, hey, I'm noticing that I'm getting traffic from Pinterest, what should I do next? Well, you should actually be the Pinterest channel. Or I'm not getting any sales at all. What should I do? or this theme, I'm not able to configure it properly, maybe I have the wrong theme.

So one of the other things we're able to do is by giving our support organization that's a lot more of these tools, now they're able to just simply focus more on these high-quality conversations versus low-quality conversations. And it just means that when you're speaking to, you know, if you're speaking to a human at Shopify, we're able to ensure that you're having high-quality conversations and you're not taking up time from them because you need a password reset. So what I'm hearing is like barely using AI at all. It seems like you stuff to ever.

Yeah. It's like we're using three different coding agents. We have agents everywhere. Well, I like the, I like how deep you guys are going because we've seen, we've seen other kind of like leaks, which is clearly just a CEO wanting to signal.

It's purely PR. You should map that against, again, this is why it's fun to go on this show. It's something I can't talk about this yet. Okay, you should map that against technical founder-led companies. Because I bet you, you know, I bet you, you know, dinner, like a dinner somewhere, that if you map that, you will see that generally technical founder-led companies at scale. So it's not that many of them.

Yeah, yeah. Yeah. You won't hear these sort of, you know, superficial kind of statements. You will see actual building. And, you know, I mean, Toby's our CEO and Mikhail from Microsoft is our CTO. There's no room for that superficiality at Shopify. It is like, like, this is the way to go. And maybe there's a whole topic about this sort of era of founder-led companies at scale, which I think is like the best era ever. Yeah, it's amazing. It just means very different.

If it's coming from a founder-led technical CEO, if they're saying we need to be AI-native, that means we're going to leverage AI and actually use it to develop workflows and processes and all these things. And then the other side is we're going to be AI-native means we're going to buy $100 million of AI tool pilots. Yeah. Turn in six months. It's like very different. A lot of decks from McKinsey. Yeah.

You guys were at the Figma Conference, right, yesterday? Yeah, yeah, yeah. Right? So, like, I mean, I've known Dillet for a while. Like, you know, like there's a group of people like Dylan and Toby and Patrick and Zuck. Like, they're just operating at a different level. Totally. Yeah.

And the fact that like we're in an era now where these incredible people, these incredible leaders can lead over a long period of time. Because that wasn't the case. Go back 20 years ago. You didn't see that. No, we need the gray hairs in. That's right. And even the fact that they called the grayhairs,

or adult supervision was almost pejorative. Yeah, totally. This is a better era with better run companies. And there's no better person on the planets are on shopper than Toby. Yeah, of course. Just on the AI, just before we get off the eye, I think one thing I do want to say also on the merchant side.

Yeah. One thing that I think people miss is like, yeah, like all these great tools that all of our companies are building, you know, I saw some of the stuff that Figma rolled out yesterday around, you know, like effectively, you can fire your agency because Vigma can, ironically, there's all these agencies in the room probably thinking like our unique value proposition

is now going to be somewhat disrupted by the stuff that I'm watching on at the keynote. But it's actually small businesses that I think actually will benefit far more from a lot of this tooling. Yeah, big business can as well. This is a bit of an aside, but I'm not a sports guy, but on weekends, I have this small podcast called Big Shot. I'm creating an archive of the greatest Jewish entrepreneurs the last 50 years. So people like Izzy Sharp who created The Four Seasons and Linda Resnick who created Fiji Water.

I just did Bobby Kodick and Michael Milken. But I interviewed this guy, Mickey Drexler, a couple weeks ago. And Mickey Drexler is about as close as you get to retail royalty. He ran the gap. He was the CEO of the Gap for 20 years on the board of Apple. He created Old Navy. He quasi-created Jay Crew, at least, made Jake Brew what it is, which was a household brand. But he talked about in the old days of the Gap.

sort of the heyday of the gap in San Francisco, they have hundreds of people doing merchandising, product photography, product descriptions, you know, layouts. And as he's sort of saying this to me, I didn't want to obviously say this to him on the podcast, but I can say it here. I was like, Mickey, like today, like literally, like the thing you get from Shopify for $39 for free, we call Shopify Magic can do a better job of your 300 people at the gap. And I'm, I think actually, like people talk about this term like democratization of entrepreneurship and level in the playing field. It's all just these like random, you know, platitudes. But actually what we're talking about here is, is that very thing that 20 years ago, a team of 300 people were able to produce

merchandising results that today for $39 a month on Shopify, you get for free, like you get included in your subscription. And I think when you think about like product descriptions and product that's part of it, but even things like, you know, like we've something called Shopify inbox or email marketing tool. Like the idea of automatic responses to every customer you have with highly contextualized replies, you used to have a team that would do that. And if you were a big company, you had a team. If you were a small business, you did not. Or even downstream of that, though, right? Before somebody's signing up for Shopify, you know, a lot of them need to get some type of entity, right, to like, you know, how is their business? And before now that somebody that doesn't have any

business expertise can go and even asking a simple question like should I set up an LLC or a C corp, right? Which is like a classic thing. A lot of people botch it. And it is insane to for a lot of, if somebody's getting on their entrepreneurial journey and they're going and you should get advice on it. It's not even that complicated of advice, right? A lawyer is just going to regurgitate, well, like, here's the benefits of this and like here's the benefits of that. And like, given where you want to take the business, maybe you should use this. And the fact that you can now get that advice like contextualized for free from an LLM. And yeah, in many ways you shouldn't get legal advice from an LLM.

It might hallucinate. But for a decision like that, it's certainly better than just guessing. And then the other stuff that I'm, the other stuff I'm excited about is, you know, specifically I can imagine a world in the future where an entrepreneur makes a product. And the product's like, you know, maybe it's a physical product. And it's slow to change something like that. Maybe you're making it overseas.

You're making it here, but it's a slow process. But I can imagine a world in the future where Shopify lets you generate an entirely new kind of brand web world around that product. And you might see conversion rate go up by 15% for something like that for like a one-time action. And in that world, it's like the incremental benefit of like a change that could happen almost instantly is insane. So I think the implications of shopping in LLMs is exciting. But at the actual business level, the impact of Gen AI, I just think is really underpriced right now. I also think one of the things that is missing is a little bit like this, like we sort of think about

our AI tools as very practical, like goal oriented, meaning like what, like how they operate their business. Rather than simply just rolling at random sort of features, like what actually is this going to do? Is this particular tool going to help them pick a better theme? Well, great, but why? Like, what does that even matter? Well, a better theme may mean better navigation, maybe higher checkout rates, maybe more customers end up buying.

And when you sort of think about that in contrast to, you know, the cost of failure in entrepreneurship now is about as low as it's ever been in the history of the world, truly. I mean, you think about like Ben Francis creating Jim Shark, I think he's the youngest billionaire ever in UK history. The fact that he was able to create this thing from his college dorm room and turn this into a multi-billion dollar company and he himself is now a billionaire, the prerequisite for that type of journey years ago would have been capital. It's not anymore. The other thing is, if he failed, he could have, like, it didn't really matter because he wasn't leveraging his house and taking out loans and stuff. So when you layer on all these new pieces of technology, plus this, you know, this idea that the cost of failure is treading so close to zero, what you end up with is more people

trying their hand in entrepreneurship. And that's obviously good for Shopify, but it's also just, it's a great, I mean, look what you guys have done, right? What you've built. You've built a modern media, you know, giants out of sheer will. and hustle and incredible insights around what's wrong with traditional media. Having more of these things, I think actually makes everything better. Yeah, 100%. How do you think about messaging to the Shopify developer ecosystem? I can imagine LLMs could write new liquid templates.

You can generate text. You can generate images. There's agentic workflows. There's so many things that could be the domain of plugins. You want to message that to create a, really, really vibrant plug-in ecosystem. But also there's certain things that you want to do internally because you have a unique position or advantage there. Is it just about communication? How do you think about that trade-off and keeping everyone happy while you're responsible

to customers, shareholders, and the developer community? Well, look, it's the, I think it's called the Bill Gates line. Like, a real platform is when you create more value for others and you capture for yourself. And that obviously is the case for us for our, our merchants, but also for our developers. And there's currently 16,000 apps in the Shopify App Store. In 2024, we paid it a billion dollars with a B in RevShare.

So like a huge part of Shopify success is our developer ecosystem. So that's the first thing. The second thing, though, is that we, I think communication is part of it, but frankly, I think communication is often just a proxy for trust, a lack thereof or like the trust battery, right? When you say like there's been a lack of communication issue,

It's obviously, it's usually a trust issue. We've been really clear with the developer community for the last 15 years or so that, okay, here's what you can expect. Shopify's core offering, then we build ourselves, will be what for most people need most of the time on the platform. And that definition, that philosophy is dynamic, meaning it's going to change. So years ago, 2012, there were apps in the app store that would take your desktop Shopify store and make it mobile optimized.

It was like, I don't know how many there was probably five of them, maybe more. At some point, it was obvious that, okay, this is not, like, this is something that Shopify's core offering should do, because this is what, like, most merchants most of the time need will expect that they're paying us to do. Like, how would you, like, how are you even thinking about building a desktop store or a web-based browser store in a desktop that's not mobile optimized? So eventually we basically went to those developers and said, hey, look, this is something we're going to do.

But here's sort of the balance. Here are the limits of what we're doing. doing, you can build everything beyond that. And you can look at companies, for example, like Clavio. We have Shopify email. Clavio is built, you know, Andrew, A.B. has built a multi, a billion dollar company on Shopify, which is now publicly traded, doing email marketing. Because we're just clear about here's the bounds of what Shopify email will do. Beyond that, we're not going to touch. You can continue to roll that across pretty much every product category. So one is, to your point, good communication. But the other point is like, we have, you know,

We have 15 years of reps of building with this community to the extent that now, if you are building an app or a piece of a product for the commerce and retail space, Shopify's App Store and our APIs are probably the best go-to-market way to get access to millions of businesses. And that trust relationship, that ecosystem of reciprocity is not something that we take. It's actually the first thing I did when I got to Shopify 16 years ago has helped to build that that ecosystem and I we cherish it but we're also very clear of what's coming and what's not 16 years we love an overnight success on this show thank you so much for joining I have so many more I have so many more questions but we'll have to have you back we'll have you back next quarter

I'd like to I'd like to come back one day we can bring some Shopify merchants absolutely let's do it let's do a whole shopify day we'll get Jim 12 hour 12 hour stream back to back let's do it know what we could do something but we can do BFC we can do BFC on like Black Friday's Cyber Monday. Here we go. Yeah. We did $11.5 billion in four days and we can actually stream and then bring different merchants on to say, like, tell us what's happening.

QVC, QVC mode. Let's turn, let's turn TBPN into QVC on. I'm excited for that. You guys are already going for the affiliate model. It always happens. Yeah, it's great. Well, thank you so much.

Great talking, we'll talk to you soon. We're going to bring in Jack Altman, but first let me tell you about getbezzle.com. Your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. I noticed Harley wasn't wearing a watch. We got to send him to Bezell, get him a hitter. Just send him one. Yeah, just send him one to commemorate 16 years in the game.

He needs... $225 billion on shopping. I love the scale. 1% of your AUM or 0.1% of your GMV into your watch for sure. Let people know. It's only right. It's only right. Anyway, we got Jack Alton coming in the studio.

Welcome to the show, Jack. How you doing? That's up, guys. Very happy to be here. Thanks so much for joining. Yeah, I hope you can hear the soundboard because George had a lot of fun with it. Anyway, what's the latest with you? Would you mind introducing yourself a little bit for the stream? Yeah, I'm Jack.

I'm a long-time listener of your show. You guys are doing amazing. Thank you. I've been waiting for somebody to do something like this, and you guys are just crushing it. Fantastic. Thank you. Your Kairon right now says rival podcaster Squashes B. because yesterday you tweeted that you can either be collaborative or competitive.

And just to be clear, we see this is direct competition. And so you're on this. This is not a collaboration. I'm super angry every time I see you. Exactly. Every time I see you pop up with another cinematic. It's upsetting. I'm like,

who that person should have been in my show. I love how strong you've come out specifically where the average, it seems like the average net worth of an Alton guest is like $2 billion, something like that. Absolutely hitters. No, it's great. It's great to have you on. Yeah. So, yeah, I mean, obviously the podcast is something that you're working on, but also you're running this fund.

Tell me about the fund, how to come together. What are you excited to invest in? Do you have any bounds on it? Or is it just anything that interests you on the day to do? Yeah, so I've been doing the fund for like 15 months. I had been doing a lot of investing before. I was like a, I was running lattice, which I started in 2015 up through the beginning of last year. And I did a bunch of angel investing.

I did some institutional investing. I sort of fell in love with it, realized it was what I wanted to do, and then started this fund 15 months ago. It's like an early stage pretty generalist fund. So it's a $150 million fund. We've seen in Series A, we're like pretty concentrated. And there's no technical bounds on it, but we've mostly been doing like B2B, a little bit of hard tech, just kind of trying to do stuff that we either know or think can be hugely impactful to the future. Are you worried about your brother poaching your best CEOs?

I mean, he hired Fiji Simo. He hired Kevin Walsh. from Planet Labs. He seems to be hoovering up entrepreneurial talent. It's unbelievable. That was an incredible, I mean, Fiji is, incredible, right? It's amazing.

Yeah, it's really, really good. So yeah, probably, that'd be a good outcome. Amazing. Well, what else are you taking away from the current AI market? We've been talking to a lot of folks about this like, don't build a rapper meme now when surf is going into open AI. And it seems like it might be a best time, better time than ever to build in the application layer.

Is it too late or what are you seeing that's exciting you on kind of the AI front since most of the, it seems like most of the foundation models have left the harbor, but there's still obviously a ton of opportunity. Yeah. I mean, first caveat is like, what do I know? But I've always thought that like the rapper thing is like a bit of like it, you know, it's a slightly cheaper mark to me. I think like most companies are always built on the shoulders of technology that came before. There's a bunch of stuff to do with the underlying intelligence, just like there was stuff to do with, like, cloud infrastructure. So I don't think of it that way. I think there are probably cases where you're flying close to the sun in a way where, like, what you do is just going to be obviated by, like, the, you know, sort of big labs directly.

But I think in a lot of these cases, like the difference between a thin wrapper and then something that becomes like a specialized workflow, I think, you know, there's a real gap there. And so I'm much more in the camp of like thousands of blooming flowers and the underlying intelligence is going to create a bunch of specialized things that like opening I is not going to go do everything. And so I think you have to be thoughtful about it as a founder. But I don't, I've never thought the thin wrapper thing is, you know, it's it's a concept that is worth knowing, but it doesn't like discredit the whole idea of application software. Switching gears slightly. How do you think about opportunities to build companies in. categories that that are established but potentially stale and I want to bring up an example which is fill out I I recently used fill out which is a portfolio company of yours yep and when I used the product I was so relieved to be using a form product that was beautiful easy to use and I looked back at their founding date which was in 2002 right not not very long ago, right? And I think that most of the time, I think a lot of ECs would would sort of look at a

category like that. Maybe they get a pitch and they're just thinking like, okay, forms, like we've had these for, you know, forever now. There's type form and Google forms and all the, all these different players. How did you kind of, how do you underwrite opportunities where it's clearly a big, you know, market, but it feels like, you know, there's no obvious why now other than in, you know, my view, typically, it's like a super talented team that's just committed to like craft and just building this exceptional product. Yeah, totally. And so I guess maybe two answers to that. First is, you know, I think you can always bet on Giro, like Giro Dreams of Sushi style approaches where really great teams are building important products that a lot of people need. Even without a why now,

I always believe that you can bet on teams, particularly at the early stages. And like that can work out. But I actually think that there is, for this particular example, and then I can share a couple of others. I think there is potential for there to be a really important why now around AI, which is, and they just released this new product called Zite, which is like still in beta. But basically you can take all of this user data and then you can build things around it. And so now they have also like an application builder. And so you can release these forms. You can like get all this data in a seamless way, but then that can become like the baseline for a bunch of internal applications or other things that you'd want to do with that with that user data.

And so to me, I think a lot of times, particularly when you're betting behind great teams, there's a lot of adjacencies that come up over time and great teams figure those out and like find the next thing. But to me, you know, it looked, you know, it's a big enough market that for me, betting on a great team always is a good thing to do. You should. Has anyone else coined the, the Gero method? Because like super, superhuman is like another example of like Jiro in many ways where it's like email everybody was like this is a finished market everybody has an email product most of them are free and then you just come in with sort of like craft and there's there's an entire list of you know really successful companies

I mean just speaking of like talented teams are where are you seeing new pockets of kind of young talent emerge there used to be like the Stanford industrial complex now it feels like You go to Stanford, you just walk onto Sand Hill Road. You get a term sheet. Then there was like the Waterloo. We've talked to Sequoia partners who are pulling people from Talpeo now in Israel. Where are you seeing interesting groups of entrepreneurial talent emerge these days? There's a lot of good pockets.

And also now as a bunch of these companies start to, I mean, there's obvious ones. Like you could talk about like an open AI or something like that. Stripe previously. Yeah, Stripe, of course. I mean, I think Palantir has some incredible talent. And I think outside of AI, one of the most interesting to me areas is like hard tech, defense, there's a lot more appetite for people to fund harder problems. Like I had Sean McGuire on, you know, our podcast, and he's talking a ton about like why that

matters so much. And I think people who have seen those kinds of companies, someone who's been at a Palantir or an Anderel or a SpaceX, I think those are really interesting pockets for that. So, you know, I think there's a lot of these companies now that have gotten to such scale so quickly that you have people who have seen what greatness looks like from the inside. And I think like I always think there's like more ways to fail than there are to really succeed. And so people who have seen a big success, I think those create obvious pockets. So there's a bunch. Yeah. Have you felt any of the the squeeze from the mega funds and the crossover funds kind of

pushing downwards? We talked to Sam Lesson at slow about this where you get the hedge funds crossover into growth and the growth funds crossover to venture. The venture guys are like, yeah, I can do a seed check. It doesn't really matter. And then the seed guys are doing the angel stuff. And at each stage, they take the previous round like less seriously because it's like free money for them. But it puts pressure on the people where that's my business. What's your experience, Ben? So here's my perspective. In 2021 in ZERP, the big funds at the latest stages, which I was a customer of, were the crossovers. And it was dominated at that point by all these crossover funds coming into venture with humongous amounts of money. But they were like always going to leave. You know, like that group was

always going to come and go. That's just, they weren't designed for it. Now you have really smart money doing really big funds. There are like brilliant managers. There's like Josh it thrive. There's obviously founders fund is exceptional. Like there's just like really good groups out there with large funds. And this group is not going to go away. And they do have different incentives at the early stage and they're, you know, extremely clever about how they're positioning themselves and, you know, they're they're making a very intelligent moves. And that does include in many cases coming down to seed. And like you said, they don't need to make the same economic decisions at a seed as a $50 million seed fund because they don't have to make most of their money from the seats.

So the rules that game do change. And I think it has a huge impact. Positive. Well, your reaction, your reaction to that, I imagine, is take much more. concentrated positions but and use that as a lever I imagine with entrepreneur to be like I'm gonna put a meaningful amount of my fund into you and I'm gonna you know this is not like doesn't in a hundred and fifty million dollar fund if you're participating in any Cedar a today it's not a flyer for you with the kind of concentration that you have how much is that resonated with with entrepreneurs on on their side knowing that yeah Jack's not

just kind of tossing a check in and and maybe he'll respond to every third investor update, you're like going to do everything in your power to help the company win. The way I think about this is in order to do well in any competitive environment, you basically just have to have like an incredible amount of self-awareness and know what you are, what you're not, what things you can provide, what things you can't provide. There are a lot of shapes where I couldn't look somebody in the eye and say it makes more sense to do a deal that makes sense for me than a deal that's going to make sense for another firm. And by the way, there's like, you think about the things that a VC can provide to a founder, not all of them require blood, sweat, and tears.

Having a great brand and then not doing anything else might be a lot more valuable to a founder than having no brand and doing a lot. It just like depends on the situation. Yeah. And so I think, I don't think that there is like a tweet length answer to sort of figuring out where you can play and what situations you look at. You have to look at each of these differently. and then you have to find the situations where what you can offer and what you think can be meaningful to you as a fund manager matches what's going to be valuable to the founder and like good deals happen when it's an actually correct transaction for both sides. So that's how I think about it, which is a bit of like a it depends kind of answer, but I think it's the truth. Can you talk about your personal AI stack? What are you daily driving? What has been helpful in your job either with the show or with the fund? you know, deep research.

There's all these different tools. And I think everyone's always interested in know, like, how people are getting the most out of the tools that are available. I feel like everyone feels like, like, I'm not doing enough with AI. Like, I know it's powerful, but I just need to know that one secret prompt or something. But what do you use these days? I mean, I think I could use it more. But, I mean, I've moved most of my searching to chat GPT.

And I, like, instead of texting, like, my group of friends, sometimes I'll just, like, say the same question to, like, chat GPT. And so I kind of am like this is like an always on friend that I can like ask stuff to. And I like my usage just kind of goes up over time now. I think I don't consume like that many software products for it. So that's also, you know, the nature of what I'm doing. I think like the companies that I'm investing in are consuming a lot of AI. But I think it depends on the area.

Like I will say that outside of maybe we can, you know, talk about companies when specifically, but like outside of prompting, there are certain specific domains where it's proven to be incredibly valuable and there's somewhere it's not there yet. And so like I don't think it's working in every category yet. Yeah, totally. You invested in rogo, which these recently announced pretty big upround. Have you have, have, have you seen any products like that in applied more specifically to venture? I mean, I'm sure you could potentially. leverage what they're doing, but venture such a small, you know, market in comparison to potentially kind of Rogo's core market. Maybe it's not a focus. And for reference,

Rogo is an analyst. Secure AI for finance professionals. So you're working at a hedge fund or Tiger Global, you know. Yeah. This to me is a, I think there is a market, but it's easy to forget in San Francisco what little fish we are compared to like New York and like real finance. hedge funds and private equity and the big banks and the numbers are like super different. And, you know, for all of the talk, which I think is accurate talk about how there's too many dollars in venture, it's like still kind of pales in comparison. So the total span, you know, you look at things like, you know, a Bloomberg or something like, like there's not an equivalently big business to Bloomberg for venture.

And I don't think that's because the products aren't useful. It's because like the market is a lot smaller in my opinion. How do you think about it? Oh, yeah. Yeah. How do you think about the difference between going after these, like, the Mag 7 companies that maybe have lost a step. We're seeing, you know, little crack start to show, whether it's Apple Intelligence or the co-pilot rollout, versus taking AI into these niche markets that haven't even maybe seen the SaaS transformation yet.

And maybe AI is the one that unlocks it. Is there one area that excites you more? How do you think about each one? Is there a certain type of founder that needs to kind of fit with a specific market? How do you think about those different areas? I think for the most part, it's a lot easier to take on the niches, which are still not so niche. You know, like some of these niches that we're going after, you know, and, you know, what we're talking about in application companies, the leading company in the niche is

10 or 20 or 40 billion dollars might not be two trillion, but they're big niches. But I think this is, there's two reasons. One, I think it's much easier to just win a small market and expand from there. That's like a Peter Thiel point is like monopolize something, expand, and that's much easier to do in small, less competitive markets than going up against Amazon or something like that. The other reason is what I've seen a lot of is companies are able to crack old industries with AI in a way that hasn't happened in the last software wave. And so you're seeing in education and healthcare and legal and accounting and finance and all these places where they were kind of hesitant before are suddenly buying things without even knowing for sure what it is. They just know that they want to buy AI.

And that's like a completely new paradigm. And it's not even, you know, that's professional services I just mentioned, but you could even go to restaurants or, you know, like home services companies or, you know, mom and pop accounting. and you're like leapfrogging and you show them AI and it's much easier to use them last generation of software. And so the value that they're getting is actually much steeper relative to what stack they were on than a tech company. Yeah, the examples you gave, it seems like there's obviously

huge opportunity to go after those small markets, whether it's mom and pop accounting firms or home services, any of those markets with essentially a SaaS product. There's also been a recent boom in folks in venture crossing over into kind of the private equity roll up strategy? Have you looked at any of those deals? Do you have, are you cautiously optimistic? There's some people that have been saying like every time venture steps into that,

it can't go well. But what is your take? The fund's probably not really set up for that, but you could probably participate in some way. Yeah. I think all of that is right. Well, I'm, I'm directionally optimistic about it. And like you said, like we're not an appropriate size for that to be the right

strategy. But I think it's a very good idea. I mean, like the sort of, you know, one, one lens on this is at some point, it is too hard to sell, you know, a great product into an industry that it doesn't want to receive it. And so just become that industry and then receive this great product. The other lens is if it's so valuable, why are you going to give that away? I think that's the point that like Keith Rabewe has made before is like if you've got this thing that's transformative for, you know, an accounting firm or, you know, you know, a law firm or whatever, why should you sell them some software for 200K that they're going to go make $100 million off of? Like, is that the right part of this? Yeah, just get a hundred

times more customers, you know? Yeah, exactly. No, that makes no sense. Do you think the jobs finished with the founder-friendly meme in venture? It was it was controversial 20 years ago, but now it feels like it's baked into most venture brands. And it seems like it's, more real than ever. I talked to founders that are set up from day one with super voting and seven board seats and stuff. Is that still an issue in B.C? Or is it still a differentiator for venture brands as new managers build their firms? I think it is here to stay. I think it is basically it's it is table stakes in at least positioning. And then I think it's maybe more than table stakes in actuality and I think people can sort of like go through and do the real work to see who's

positioning it versus who's really doing it. I think in most cases it's the right thing to do by the way. So I think the like industry converge to the right place where most of the time it's the right thing. But I guess a new thought. So I'm not positive if this is right. But it feels on some level like over time it is becoming a bet like it's a better and better proposition to be a founder as like the decades go on. And sort of the, um, the margin in this whole ecosystem has kind of probably moved from LPs to GPs to founders where like I think that is the directional flow of where like extra sort of leverage is moving. And so I think that's probably just going to continue rather than recede. Do you think any of that's due to the work of Y Combinator?

I've often thought of YC almost as like a union for founders in the sense that like if you're you see and you screw over one YC founder, then it goes out to the entire network and you maybe lose access to the entire community potentially. Is that a reasonable narrative or is it more like just the writing and the memes of all the folks in tech broadly? No, I think it is reasonable. I think there's probably a constellation of inputs and I think that's probably a big one and I don't underweight how important YC's footprint is and it's so founder friendly and it's so dominant that going against that is hugely expensive. I also just think that there's, there's an extent to which everything about tech has become public. And like to a, to a crazy degree, we know all the, you know,

we know all these stories and the ins and outs and people have a good feel for how hard it is to be a founder. And I think even on that note, it's like, you know, all of the, you know, in the story, in the narrative of who do you want to win between the founder or the D.C. It's like obvious. And so, So, you know, I think even that kind of thing, it's just like, that's rightly the champion. And, you know, having gone through it, I'm like, it's, it's like, in order, like, part of what makes this whole industry work is that there is so much respect and support for founders because it is so hard. And so I actually think part of why Silicon Valley works is because the whole industry supports

people in a way that otherwise you don't sort of get that. And I think that is actually critical. So where do you go to get perspective and get out of the bubble, right? If you walk outside of your house, you see billboards for companies that you've invested in or competing portfolio companies or you run into another and then you go to Thanksgiving and you're not, you're not, you know, that doesn't work either. I'm curious how you try to, you know, kind of break out of the bubble and get perspective on our industry. and the work that you do.

It's a problem. I'm steeped in it. And like all my best friends are also in tech. And so I don't have a lot. But the obvious thing I have is like my family. Like I have three kids. My wife's in medicine. And so I do have that in a huge way.

And I think that that's that's the only reprieve, but it's enough, I think. Can you talk about lessons from lattice? How did you kind of grow as an executive? What in a founder? what skills did you pick up? And what did you develop like kind of, I don't know, like top to your talents in? Well, I think, you know,

so on this point I was just making about how like, it's good that the industry supports founders so much because it's so hard. Yeah. Which is true. Like the flip side of it is that I think like one of the things that is, that you just like can't believe till you do it is like how much you get to grow as a person being a founder and just getting constantly just like bashed every day

for years by a million things. It's like the things from the early days that stress you out. It's like you still are equally stressed the whole way through. It's just like the two by fours that hit you have gotten stronger. And so the little stuff doesn't get you as much.

And so I think there's a lot of that growth that happens. But I think, you know, one of the criticisms of consultants, which is the far other end of the spectrum from being a founder is when you're a consultant, you are not actually, you're not tethered to the results of your recommendations. You are, you know, the criticism is you're fully dissociated. You make a recommendation, you get paid, you're out. Who cares what happens five years later?

You're like long gone. Versus as a founder, every decision you make, you're living with forever, and you're just completely connected to it. And so I do think that that experience of everything I do is like making the bed for, you know, years to come. I think that creates a that creates like a sense of autonomy, personal responsibility, everything is my fault. Like all of those kinds of characteristics, I think are things that you build and then you never let go of. And I think this is a big part of why people like love hiring other founders. Like, you know, so many founders I talk to are constantly trying to recruit other founders to join

their company because they have that DNA that gets built into them that just like doesn't go away. So I think that's the biggest thing that's like, you know, an intangible. What do you have to say to pro natalists in tech that don't have kids? You've got three. You've crossed the replacement rate. We always joke. This is the Palmer lucky number. He wants everyone to have 2.1 kids at least.

It's the best. I mean, honestly, it's like, you know, with all this stuff, with so much of tech stuff, it's so easy to get lost in like the sauce of, you know, deals and new markets and AI's going crazy. And it's all just, it's all, it's all awesome, but it is so far from the most important thing. And like, you know, the, you know, the, the, the most important things in life are relationships and like kids are the best relationship you ever get to have. And so it's like a really awesome special thing. And so, yeah, I'm like, you know, there's, there's tradeoff to everything, but it's been the best. Yeah, I have one last question.

We'll let you go. I want to know, yeah, I mean, you mentioned, that idea of like founders hiring other founders and there's a bit of a debate in Silicon Valley. I think broadly about, you know, first job out of college. Should you try and go work for a really successful scale up, series B, product market fit company, go work with the best founders beyond that hyper growth trajectory, experience growth, feel it, and then go start your company versus, hey, you know, some people see Y C now as like a summer internship almost. like, oh, yeah, I'll go, maybe I'll drop out. Maybe I'll go raise a little bit of money, try something, have one startup under my belt,

and then go do the next thing? How do you counsel kind of the next generation between not necessarily like there's a one-size-fits-all answer, but how do they know which one's right for them? For me, so I worked at a startup before doing lattice, and I was there for a couple years, and it grew a ton, and that was really helpful to me. Because, like, when you start a company, there's like 30 things you have to, like, be reasonably good at, which is ridiculous. And at least you learned like 14 of them by like working in a fast growing startup.

So you only got to learn 16. You know, it's like it's that kind of thing. And it does help a lot. But, you know, there's a lot of great examples we could name of people who just went right from college to building iconic companies. And in fact, the very most iconic companies were built by people who dropped out of college or did it right out of college. And so it's like, you know, your mileage may vary. And I don't think that there's like one story and it's easy to over rotate. I think.

for most people getting experience helps not hurts and it's not like by the time you're 26 instead of 21 you're too old to do it but you know there's a lot of great people who have not needed it and so yeah it's kind of like that that quote uh Mozart didn't go around asking people how to write symphonies like the folks who are destined to go start power law companies in their they can't stop in their teens you can't stop them right but but if you're asking yourself the question maybe be, you know, you should go build up the skills first. Anyway, this has been fantastic. Thank you so much for stopping Bell.

Thank you. Thank you guys for having me. Yeah, we'll talk to you soon. Cheers, Jack. Have a great rest of your day. And in the meantime, let's tell you about Wander. Go to Wander.com. Find your happy place.

Find your happy place. Book of Wander with inspiring views, hotel great amenities, dreamy beds, top tier cleaning, and 24-7 concierge service. It's a vacation home, but better. It's better than a vacation home. We are having... Vacation homes are on notice.

We are having John. Andrew, the founder, CEO of Wander on the show very soon. Finally, long overdue, it's been grinding. They've been putting up crazy numbers, as everyone knows, adding multiple homes a day, it seems, to the platform, which is just wild. But, uh, very excited for that. Congrats to Wander.

They're growing super fast. Um, growing so fast that stuff's leaking. By the way, we're adding. So, yeah, we are a new American Pope. And, uh, we are going to be adding Alex. That's great. From Hollow. Can't we?

I've been meaning to invite him. I'm really glad we got a month. So the timing is good. Shout out to Catherine Boyle for suggesting that. That's fantastic. And right now we have David Haber from Andrews and Horowitz coming into the studio. I believe he was at Goldman Sachs previously. Where he was the head of firm-wide strategy, which I always thought was an interesting description.

because it feels like the CEO would be the one to do the firm-wide strategy, but I'm excited to talk to him about his career and then what he's doing at Andrewison. So welcome to the show, David. How are you doing? Boom. Good, great to be here. Big fan of your show. Thanks for having me.

Thank you. Thank you. I was channeling the Army earlier and, you know, Captain Boyle, you know, on the other day. It's fantastic. Yeah, that's awesome. Yeah, I mean, I'd love to start with just kind of like your background introduction and kind of how you, your path to Andreessen, because I, I've been following you for like over a decade on Twitter. And I think this is the first time we ever met in person or on. You had to be, you had to be

in one of my first hundred follows. For sure. Back when I was in college, just being like, this is, this guy looks like a chat. Let's throw him a follow. Still, still chat, I guess. Um, no, obviously. Yeah, it's been, it's been stercutus. I, um, let's see, well, I studied biochemistry as an undergrad. So I actually thought I was going to be a doctor. Um, worked for a super successful serial entrepreneur out of school, a guy named Rory Riggs, who had started a bunch of biotech companies, ran a railroad, and started a giant private equity firm called Royalty Pharma, which we can get into. It's a fascinating business. And then I joined Spark, actually, back in 2011, up in Boston. Essentially, it's like the one non-GP at the firm.

I was like a 23-year-old analyst associate. And it was an amazing experience. We were investing out of Fund 3 at the time. You know, the firm had already been pretty successful at that point. You know, they had ceded Tumblr and put a bunch of money into Twitter when there were 10 people. We wrote the first check in Oculus when I was there. Wow. So, you know, great pickers. It's kind of where I learned, I would say, like, the craft adventure, you know, ended up going deep into fintech at the time.

And, you know, in some ways getting lucky. I helped, you know, source and seed plaid back in 2013 and a bunch of other companies when I was there. I always thought of myself more as a founder than an investor. And so I ended up leaving and starting a fintech company in 2013 called Bond Street with a good friend of mine named Peyton Sherwood who had been running engineering at Venmo. They ended up getting acquired by Braintree and PayPal in 2013. I pulled them out to go start that business, which was in the small business lending space, which was challenging. But we built a great team, which is what I'm most proud of. And it ended up selling business to Goldman.

And that's kind of how I ended up joining the firm. We came in kind of through the side door. Yeah. Yeah. You know, and got merged it ultimately to what became Marcus, which was their consumer business. Oh, that's right. You know, Payton ended up inheriting, he had a real job.

He had like 70 engineers to manage. I had a more amorphous. Off the org chart. Yeah. I remember when I was following you, it said, a firm-wide strategy. And that sounds like something that would normally be like the CEO's job. So can you actually explain like that sounds extremely. important firm one strategy at Goldman. But yeah, what I mean what what decisions were you making?

What was the culture like at Goldman back then? It was fascinating. You know, I thought I was going to go there candidly and get like suffocated and micromanaged because that's what my friends did, you know, 10 years before in banking. And yeah, yeah, you know, fortunately that wasn't my experience. I think in part because, you know, I had no fear. We need this DCF yesterday. We're not working on Sundays. That's good. You know, I, yeah, I just started firing off emails when I got there, honestly, to like, you know, Marty Chavez, who's the CFO and the heads of banking and asset management, just kind of running around and trying to be helpful to people and really just like mapping the place. You know, you realize that even people had been there for for a decade

or longer didn't know kind of what all the different component parts of that firm did. Yeah. And it was fascinating because it's not a normal kind of operating business, like, I don't know, an American Express that has a big consumer commercial business. It's really a confederation of a lot of little businesses who sort of fight for collective resources under these common kind of divisional umbrellas. But it's also really fascinating because if there's something interesting to do on the outside world, there's probably somewhere to put it. Meaning you could be an equity investor, a debt investor, an advisor, a customer, and acquireer. So it was fascinating to kind of bridge, you know, the world that I primarily lived in, like the

tech ecosystem, you know, and then try to help, you know, Goldman navigate that too. To be clear, I wasn't the head of Fermat strategy. I worked for a woman named Stephanie Cohen who reported to David Solomon. But I was the weird kind of startup entrepreneur guy kind of running around and trying to help her, frankly, you know, get connected in the tech world. And she's now at Cloudflare and doing a great job there. Yeah, it's still a really cool role. How much of Goldman's structure is a function of either like legal firewalls between different teams or just the idea that if you have a specific desk, you need to be able to manage their own P&L and kind of account for their business independently and then align incentives towards how that

team is doing? Or is it more just like sclerotic because it's an old company? I think it's a little bit of both. I mean, there's definitely some, you know, kind of regulatory bridge between like the public and private side and what can be shared legally. But I think the more interesting history, and there's a great book called The Partnership, which I think is a great kind of business history book, even if you didn't work at Golden Sacks. I think for 140 years, it was one of the most entrepreneurial places in the world, right? It was, it was not, it was a firm that had to scrap, you know, it started like by Jewish immigrants, basically. It was not sort of J.P. Morgan or a lot of these other, you know, kind of white,

shoe firms. And they started basically in like the factoring business. And then, you know, entrepreneurial people would raise their hand. It was a partnership. They'd give them a little bit of money and they'd say, I want to go build a new business. So somebody started the merchant bank. Somebody started the wealth management division. Somebody started, you know, Europe. And it was not a business built through M&A. It was a business really built organically brick by brick by enterprising people. And I think it's just such a fascinating history. And so part of that is, the culture, right? It really was a partnership. And I think that Confederation is kind of the evolution of that, which was like, you know, you want to feel like a CEO, right, of your own kind of individual

business, even that is like a trading business within, you know, a much larger, you know, division. I think the last like 10, 15 years has been, it has required an evolution from that in some ways, right? I think, you know, the firm went public. Then you had, you know, the tech bubble, the financial crisis, The financial crisis, I think, was like a terrible experience for Goldman Sachs. If you remember the vampire squid and the blood funnel, like, that was the brand, unfortunately, for a long time. They actually did pretty well during the financial crisis, like the best of the worst performers, which was like somehow terrible even more because then all the negative attention came on the firm. It did amazing. And part of that was they had really talented people.

Part of that was actually technology. They built their own kind of unified core risk systems. So they understood across every division, kind of what their exposure was to the housing market. And they were able to hedge basically that exposure. And they didn't lose money. And then they made a ton of money, you know, kind of coming out of that crisis, which again, didn't hurt the brand to your point. Yeah, yeah. Or didn't help, you know, the perception of the market, unfortunately.

But I think ultimately, like more recently, you know, we can, I just find their history, fascinating. Yeah, it is. It's so fascinating. You know, I think they become more of a of a company than a partnership, right? And I think to do that, you kind of need operating leverage and, and therefore, kind of, it's a bit tighter kind of at the top. And I think it's, my perception is that it's made it a less entrepreneurial place over time, right? Instead of sort of giving an individual person, the agency to make their own individual decisions, especially from a technology perspective, you need more centrality, you need more leverage, you need more kind of command and control. And I think you've seen that actually benefit their share price.

If you look at Goldman's market cap even in the past few years, it's actually done really well. I think a lot of that is through that kind of centralization to some degree. But I think it does come at the expense to some degree of the entrepreneurial dynamism that existed, you know, for again, 140 years. It used to be one of the, you know, most lucrative places in the world to work. and nobody's crying for Goldman Sachs employees, to be clear. But I think it's a different culture. And it's going to look more, in my opinion, like a normal bank than it was previously, which was a broker-dealer in a partnership.

When you catch up with old, you know, peers, colleagues, et cetera, how do you feel like Goldman and other firms of that caliber are reacting? How would you rate their kind of reaction to, AI specifically, are they just buying a lot of it so that they can kind of say like, look, we're doing AI or is it like, you know, truly organic sort of ground up movement or some of both? I think it's changing very quickly, you know, and I think, again, not to pick on them, but historically, like, there were, and I think in a lot of banks, there was this culture of like, if it wasn't built here, we're not interested. And I think that was like the wrong decision for a very

long period of time because the world, you know, kind of changed, you know, around them in a lot of ways. But I think actually Marcus, you know, despite its challenges, was actually a good cultural kind of catalyst in this point. They leverage a lot of third-party technology because the consumer business, you know, hadn't existed, you know, previously. And I think many the CIOs and the CTOs at these firms are just understanding that, like, there are some things that we should build internally, If it's core to our competitive advantage, fine. We should own it ourselves. But almost everything else we should outsource to third parties and leverage the best of what exists, right?

And it's actually informed a lot of how I spend my time here, in part because, you know, as a founder, it was very challenging navigating these big institutions to understand, you know, who is the decision maker. And then you get inside these firms and you realize that if you're a division head running, you know, a 10,000 person, 20,000 person organization, it's not your job to know what's happening on the front of you. year, right? You know, certainly not at the seed in Series A stage. And I think one of the things we've done explicitly and part of what's been useful to do, you know, from New York City, you know, where I said is be a bridge between those ecosystems, right, and kind of convene the CEOs and the CEOs and the leadership teams of every kind of major financial institution in America and then curate, you know, a group of 20, 30, you know, portfolio companies, non-portfolio companies that align with whatever their strategic priorities are.

And, you know, it's kind of a win-win-win. You can accelerate the go-to-market for the seed stage business. You help this sort of incumbent, you know, understand what's coming. And it's helped us come to conviction, you know, on investments and just feel like everybody's sort of winning in that dynamic. But the rate of adoption is happening very quickly, just to answer your question more specifically. And I think this is true in financial services.

I think it's true broadly in enterprise, both because there's bottoms-up adoption, like engineers are, you know, using whether it's going to co-filot or cursor, or big investors, obviously. But then there's top-down pressure, right? I think any CEO, any board member can plug a prompt into any of these models and understand intuitively the impact

that it's gonna have on their business. And I think financial services in particular are so human capital intensive. You know, at Goldman they call the basically the back office, the Federation. And it's largely, it's kind of a Star Wars reference. But, yeah. You know, it's it's still humans sitting in Excel, not even using enterprise software necessarily, right?

And across legal compliance, risk, vendor onboarding, and so much of that should be AI. And I think they're recognizing that and beginning to adopt it a lot more aggressively than I've ever seen, which is exciting. Do you get a sense that there's been innovation happening in some of these more traditional financial firms or even hedge funds and things like that that is potentially groundbreaking but not being released as products right like jim simmons didn't you know discover an algorithm that could you know make 60% a year forever uh and then he he was like yeah we shouldn't just like productize this and let anyone use it james streets had gpt 6th for like a decade we should just use it so so yeah how do you um i'm curious if you have any kind of insight there uh because if you discover something like you know if you

discover a machine that just makes money, you should just, you know. I mean, there was a rumor a while ago that Google's just their treasury management system was so advanced. They were like, we could just become a hedge fund, but that wouldn't align with our mission. Totally. I mean, look, there are a bunch of like, you know, quant hedge funds that I'm sure have, I mean, they have to have had, you know, great kind of proprietary technology that have given them an edge, whether it's Renaissance, as you mentioned, or, you know, 2 Sigma or Jane Street. It's hard to know exactly what's in there. I think it purposely keep it out.

So secret. And I was listening to your conversation with Jack earlier. I forget if it was him or you guys who had said it, like if you found something that is actually money printing, like don't go sell it to a bunch of other people, just like raise a giant fund and do it yourself. Yeah. Well, can you talk about the transition to Andreessen?

How did that happen? You know, you see people crossover from Goldman into Venture every once in a while, but it does seem like you had a somewhat uncons. conventional path. So how did that conversation start first spin up and then what's the experience been like over the last couple of years as the fund has scaled? Yeah, it's been, it's been awesome. I mean, I've known actually Alex Rampel. So he was the one who kind of recruited me to the firm back in 2021. But I've known him for over a decade. So I met him, I think, originally through plaid. We've done the seat at Spark. He had led it later around. I pitched him Bond Street when he first

joined the firm in like 2015, 2016. He passed. We stayed friends. Many such cases. And then when I was at Goldman, I, you know, ended up helping them put a bunch of money to Carter alongside Meritech and alongside Indrice and he and Mark had worked on that investment. And then in PPP, like during COVID, I was trying to figure out ways to help the firm plug our balance sheet into the economy, right? I'd run a small business lender and I was afraid that, you know, small businesses weren't going to be able to get the capital. They needed to actually survive and we could pledge unlimited assets to the Fed window and and yet tech I thought technology and FinTech in particular was the kind of the right distribution channel so he and I were chatting a bunch

in that moment as well um actually left Goldman in October 2020 went to go do this kind of weird thing with a hedge fund guy to buy a stake in Sotheby's we can come back to you very cool that's amazing I I love that. And he pinged me in March of 21. He's like, you know, how's Goldman? I'm like, one, no, haven't been there for six months. He's like, what are you talking about? Like, yeah, I never updated my LinkedIn.

Here's this kind of weird thing I'm doing with Sotheby's. And he's like, can I put you in front of Mark? And I'm like, we'll twist my arm. I've never met Mark and Dresen. And that sort of precipitated a bunch of conversations. And, you know, fortunately, they wanted to open up a New York office. And it was just a, I mean, I had always admired, you know, Dresen from a distance.

It really is a firm kind of run by by entrepreneurs. And yeah, it was a unique opportunity to kind of plant the flag here in New York City. And, you know, that was almost four years ago. We're 100 people full time in New York now. Wow. Yeah. Can you map and Dresen a little bit for us maybe compared to Goldman, obviously a lot of entrepreneurial energy, but then, you know,

there's specific funds, there's specific offices. It is a unique firm in so many ways. How has it changed? How would you describe it now? Eric Torrenberg was on the show and said, it's very specialized. And I think a lot of people in the audience were like, what are you talking about? They do everything. And it's like, well, they're specialized within the firm.

And there are specialists at the firm. And so what's that been like? And what's the, how have you experienced the last couple of years as Andrews and scale? Yeah, it's fun. I mean, I think actually, you know, before Goldman, you know, Bond Street had been the biggest business that I ever worked at, which was, you know, several dozen people. Goldman was 40,000 people. So I think that scale has actually helped because Indrisen doesn't feel that big to me.

I think in venture it's still big, but it's not. Yeah, just to give you a sense for kind of how the firm is organized today. So, you know, last year we split the early stage venture business into three. We raised three separate funds. So there's an infrastructure fund, which, you know, my partner, Martine Casado leads with, with Ange, Jennifer, and Zane. We have American Dynamism, obviously, which David Ullivich, Catherine and Aaron help lead.

We have an AI Apps Fund, which Rampel, myself, and a niche help run, which is basically anything consumer, anything B2B. Fintic kind of being a horizontal across either. And then there's a separate buy-owned healthcare business, a games business, obviously a large crypto business. And then a growth fund that kind of sits across all of it,

and we'll invest in things that are kind of inflecting. And then, you know, uniquely, I think, you know, the firm is 600 people, the vast majority of our headcount is a large operating platform, right, across a bunch of functional different, you know, kind of areas, whether it's go to market or, you know, marketing or people practices, you know, an internal kind of capital network team. And these are resources that we, you know, help make available to our entrepreneurs and really

to try to tilt the board in their favors, right, to help them build great businesses. And that was kind of the ethos of the firm from the very beginning. You know, I think Mark and Ben were sort of customers of the best venture firms as entrepreneurs. and it was like, you know, five people on the checkbook and their view was like, we're going to take no salary. We're going to reinvest 100% of our management fees back into building this operating platform. And that sort of benefited from economies of scale, you know, over time. That makes a lot of sense. Can you talk about how the kind of platform teams have evolved over the last, I mean, as long as you know, I was actually in the portfolio back in like 2012

and they did these like seminars for B2B sales and marketing and PR. But now, you're seeing new value add pieces of the platform, whether it's introductions on Capitol Hill now, almost like a lobbying light version. But how is that evolved and how are you thinking about that going forward? Yeah, I think part of what has happened is kind of, yeah, it has further decentralized in some ways. So, you know, in some ways it does kind of remind me of Goldman where each fund is almost its, its own division that can kind of allocate, you know, management fees in talent at will, you know, to some degree. And as a result, ultimately, like, we think about each fund almost as a product to serve the entrepreneur. And so, you know, I suspect that, you know, as David and Catherine

are thinking about the American Dynamism business, it's how do I leverage these management fees to build the right capabilities that are unique for that, you know, specific customer, right? Which might be, you know, more of a presence in D.C., for example. Martine might think about it differently on the infar side than on the app side. Same thing in the bio and healthcare business. Like having a deep relationship with all the, you know, payers and the big hospital systems, you know, to help again accelerate the go to market of the bio and healthcare,

you know, portfolio companies super valuable. And so it has sort of further decentralized, further specialized over time. But I think the same ethos is the same. It's, you know, how do we, you know, come with capital, but also help, you know, help these businesses grow and scale and, you know, take what often was a first time founder and give them all,

all the kind of super bowers and capabilities of being like a scaled CEO. Like that was sort of the mental model. I think that that Mark and Ben started with. I want to switch gears for a second and ask you about, uh, something that I feel like is kind of potentially on the horizons. I've been hearing various teams or working on, uh, putting, uh, secondaries on chain, which I think is going to be potentially, uh, hilarious and,

and potentially disaster. We'll see. We'll see. I'm cautiously optimistic, but on the, on the topic of secondaries in you know, just just just liquidity and in the private markets, it feels like this has been this like perpetual like promise. Like the whole industry is very excited about it. And I don't feel like at any point despite so much the sort of broad growth of the private market over the last 10 years, it doesn't feel like we've made that much sort of meaningful progress. Can Silicon Valley learn at all from, you know, Wall Street is notorious for creating new financial products that can actually be, you know, successful and scale and become big markets of themselves. Do you expect

secondaries to get there at any point in venture? Do you spend time thinking about that at all? it feels somewhat inevitable, but then at the same time, we've all seen how illiquidity can be, you know, such a feature and not just a bug like some people would have us believe. And are you talking specifically about like kind of employee secondaries or just like broadly, like, well, there's a public fund right now. There's a public. Yeah, and I was going to be by next. A number of SPVs and look through exposure into various assets. Yeah, it's more so bringing, bringing, bringing, at the same time exposure uh liquidity i'm just i'm interested to see if you have any type of thesis here the other thing we saw recently was co2 coming out with a new fund that's a smaller fund

with like a 50 000 minimum check size and i i didn't fully understand that move outside of wanting to create a product for maybe the next generation of you know family offices and things like that but I'm curious if you have kind of any type of vision on the next 10 years of I don't you know it's it's interesting like I think there's been yeah I think there's a couple of big secular trends that are sort of happening like one certainly companies are staying private longer and I think that's driven the scale of the venture business right you can put more dollars into your winners over over long periods of time so it kind of makes sense to be able to capture the economics there yeah the other kind of of secular trend has been bringing, and we're still early, I think, in that kind of way of bringing

alternative investments to wealth, to the kind of mass affluent kind of wealth management channels, which, you know, historically have largely been funded by kind of institutional investors and and they're like. And I think, you know, the big private equity firms with reed structures and credit products have done that much more aggressively. Venture is still relatively speaking of a small asset class and a small business and historically hasn't, I think, needed in large part to tap the kind of wealth ecosystem. And, you know, time will tell how, you know, how aggressively you can scale a venture business. I don't know that that's sort of the, that's not the goal necessarily, right? But I think if you're Apollo or Blackstone, you know, trying to raise hundreds of billions

of dollars, you know, in real estate funds, wrapping it in a re-product and distributing it through retail makes sense. And to do that, you need liquidity, right? As an individual investor doesn't have the same sort of like time horizon. Time horizon. They need access to cash for various reasons. So you need to give them outs. And so the KOTU fund, I think, was a crossover kind of public and private fund with some liquidity gates. You know, more power to them. We haven't, you know, done something like that. Can you talk about the application layer in artificial intelligence? There was this meme for a while. Every rapper is going to get steamrolled by the foundation models. I imagine you've been invested throughout that process, but has your thinking evolved and have any of the recent milestones that

we've seen, you know, windsurf going into Open AI, that feels like, okay, maybe it opens the floodgates to every foundation model needs some dance partners here, and maybe that's an opportunity for liquidity at the early stage investing side. How are you, have you evolved your thinking on the application layer and the opportunity there, whether in B2B or consumer? Yeah, I know. I mean, I think you're right. Like, you know, I don't know, 18 months ago. I feel like the pejorative was everything's a GPT wrapper and the fear was every, you know, state of the art model company was going to eat every workflow. I think that hasn't been the case.

And I think the, you know, like declining cost basically of like intelligence has benefited the application layer. And not just in like text and reasoning, but across kind of every modality, whether it's voice or video or image. And so, you know, both I think you're the quality of entrepreneurs has kind of, you know, I would say increased dramatically of it in the past. last year, I think people building specific products for, you know, with a deep understanding of the industry and the specific workflow that they're targeting, you know, has, has changed, you know, again, in the last like six months. And I think what you're seeing now is also not the sort of bottoms up. You're also seeing top down. You're seeing companies sort of own the end customer, own the end workflow, and then begin to build their own models, right? And I think the fear was sort of the inverse for a long period of time. But it's been easier to kind of route, you know, prompts to different.

models and maybe capture, you know, the highest margin, you know, queries in your own model, right? Or, you know, improve your own economics by owning some of that, you know, that workflow internally. And I guess, like, my hot take is that, you know, moats still matter. And there are a lot of them are largely the same, at least in my mind, right? Like, I think AI is an incredible tool for differentiation, right? The idea that a voice agent can do the workflow, you know, in some cases, a thousand times better than the human. It's amazing. But the technology, I think, is an ephemeral advantage. I think it's an amazing tool for differentiation, not necessarily the source of defensibility. And I think a lot of the defensibility in my mind resides in the things that have

kind of always been true, right? Owning the workflow end-to-end, deeply embedding yourselves within your customers, right, becoming a system record, having a network effect, being a platform. And I think these were all the heuristics you would always kind of look for when evaluating software company's I don't know that this time is that different. I think the impact and the idea that the software can actually do the work is radically different. And if you can capture labor budgets more than just IT spend, the TAM is radically different, you know, much larger. But that's at least been kind of my own, you know, mental model, you know, over the past, you know, several months. How are you thinking about open source? Mark's obviously been very outspoken about open source. I've always

wondered, will there be a red hat of this generation with AI? Stable Diffusion was kind of thinking about that. And you could imagine that some company crops up that's like a for-profit, very successful company, but built on top of open source. Are you looking at that? Are you optimistic about that? Or is it more just like philosophically open source is a good thing for the ecosystem more broadly? Yeah. Honestly, it's a better question for Martine. Sure. You know, they spend more of their time on the infra side, you know, in that community. But, you know, we are big believers and investors behind open source. I mean, we're big investors in Mestral, for example. Yeah. You know, in Europe, which is, you know, one of the leading open source players, Marks obviously on the board of Facebook.

And I think what they're doing with Lama is amazing. So I think there's opportunity for both. And, you know, I think in many ways, open source is a great kind of, you know, competitive force, which is also kind of drive down the cost of a lot of the, you know, intelligence, which, again, it can be great in its own business and I think is also benefiting the application layer. Jordy, last question? Last question. How much do you expect the adoption of AI to mirror what we've seen in fintech? Right.

It feels like fintech's, you know, been so transformative over the last decade plus, yet at the same time every once in a while. I still need to, you know, write a check or, you know, use any number of different things. Does that provide any type of mental model for you on how to think about, you know, how people and companies and countries adopt AI? It's an interesting question. I haven't thought about kind of the throughline there. I mean, I think AI, this may not be shocking, but I think it's going to, it sounds cliche, but it's going to change everything. It's going to be everywhere.

And, you know, even the kind of intersection of fintech and AI is just, I think, incredibly interesting. I think my bias for the past several years has been to invest in fintic companies that lead with software, you know, as opposed to financial products. And it's part why we built that incumbent network. It's in part because of the culture of these firms are changing. But, you know, again, the ability to do the work within these organizations is so radically different. There's just massive labor budgets to be able to capture. And so, again, I think we're going to see the adoption of AI probably proliferate even faster than we did, you know, into products. Although that happened quickly as well.

Yeah. Makes sense. Well, thank you so much for stopping by. My pleasure. We have to have you back and talk more that we could go on forever. Yeah. We'll let you get back to your day. I'm sure you've got going on.

Awesome. Thanks, guys. Catch up. See ya. Fantastic. We are pretty much done with our ad reads. We did a lot of them, but we still need to tell you. We mentioned Figma.

It failed everyone. I know. I know you want more ad reads. Remember, we are 100% corporate backed here at TBPN. That's right. And we're all. also sponsored by Figma. Think Faster. Think bigger, build faster. Figma helps design and development teams build great products together. We were at Figma config.

The new products are so exciting. You can now, I mean, my favorite is Figma. Figma sites. It's a, it's a product that I've wanted since the very first day. I use Figma. Real quick. So we have Alex joining from HALO. Yeah. To talk about the new. American Pope. They're very excited about it. That's amazing. Timely. He's going to give some perspective. Catherine Boyle. Also, did this happen while we were live? Yeah, it happened while we were live. Okay, because you keep referring to this and I'm like, I'm still seeing, I haven't gotten the update. So this is, the Pope has been decided. So Holo is based in Chicago. Okay. And the new American Pope is from Chicago. Wow. New Pope elected. I have credit to Catherine for thinking about this. On May 8th, 2025, the Catholic Church announced the election of a new Pope signaled by White Smoke, Rise from the Sistine Chapel.

This event, marking a significant transition in the church's leadership was celebrated widely. The new elected Pope was expected to address the public from the central window of the St. Peter's Basilica. Many people learned about this historic event through various online posts, with some humorously noting the unconventional ways they discovered the news.

A lot of people posting memes. Very fun. Well, I'm excited to invite Alex to the show. I'm so glad he could hop on the same day. That's amazing. He's not here yet. So we can go through some other posts and talk about what else is going on. I like this post for you.

I got a post for you. Will Brown has joined Prime Intellect. Oh, wait, really? Yeah. That's amazing. I know. I mean, huge pickup for Prime Intellect. That's some personnel news for you.

That's some personnel news. You're not familiar with Prime Intellect. Fascinating company. They do, I mean, it's technically a crypto company, but they do decentralized training of AI models. and yeah will's a great poster and obviously very sharp in AI so congratulations to will that's excellent rollout of this announcement yeah yeah he just was teasing it for days I was sitting on the edge of my chair yeah very excited anyway congrats to him and welcome to Alex to the stream good to have you

here thanks for having me thanks so much yeah that was that was fun how that came together this is amazing I'm so glad you could jump on the same day with Harley from shop by and coordinating but made it happen Busy day, busy day for you, I imagine. Yeah, it's pretty exciting day for us. I mean, it's like a one in a million chance that the Pope happened to be American, and then that he happened to be from Chicago. It was crazy. That's where I am today.

So, yeah, it's been a fun day for us. It's been a fun day for us. That's amazing. Would you mind kicking us off with just a brief introduction on yourself and the company? It's just for so everyone knows. Yeah, I'm Alex, the CEO and co-founder of Hallow, which is a prayer and meditation app that we're Catholic, but we hope to be a resource for anybody interested.

and grown in Christian spirituality. We've been working on it for five or six years now. We're a Series C startup. So, very cool. Talk about, talk about what it was like kind of starting the company at that point in time. It still felt like an era where people in SV didn't really talk about faith. It was kind of a, didn't feel like it was a top. It wasn't a market that people interfaced with very frequently, so they didn't think of it as a big market.

It was almost like Silicon Valley had gone so far towards atheism. Atheism, effectively, that it was, that religion was like taboo. Yeah. For a long time, religion was seen as like anti-science and technology was science, and therefore you couldn't be religious and build a tech company, even though now that's been massively disproven and has been disproven forever. But anyway, what was your experience starting the company? Yeah, I mean, for me, it was my own.

We started, I started it for myself. I'd fallen away from my faith and discovered a relationship with Jesus, a relationship with God through prayer. And like really learning about what it meant, not just to talk to God, but to really listen to them, to really sit in silence and to spend time and contemplation and meditation. And I had no idea that those things were, that there was a Christian spirituality tradition of those things. I thought it was just, you know, hey, ask for stuff and repeat the things you heard as a kid or memorized as a kid. So it had changed my own life. But yeah, I was in Stanford and working on this thing in Silicon Valley and pitching

a Jesus startup and it was certainly not the, not what people were used to hearing. Honestly, it was fun for me because I got to go to all these VCs and, you know, my story is just my own relationship with Jesus and how he's changed my life and how he's brought me this peace and this love and this joy and I just get to go into these boardrooms and just pitch my own faith, which is fun, but it's certainly the vast majority of people thought it was a stupid idea. I mean, 99%. But that's true for any startup. But yeah, I mean, it's like people don't pray anymore. They meditate. Prayer is a dying thing. You know, it's been dying for a while. It's going to continue to die. And it's funny because Hallow is not,

Hallow is a contrarian idea really only in like Silicon Valley in New York. If you go to, you know, at the middle of the country, even if you come out here to Chicago and you're like, hey, do you want a meditation app or do you, versus do you want something to help you grow in your faith? you know, the latter is much more. It's like, no, 75% of Americans are praying every week. It's a really important part of people's lives and it's a huge, nobody's trying to do anything to help people. But so in Silicon Valley, though, it's fun because it's a contrarian idea. So it was always fun to, always fun to pitch. It's honestly the best of both worlds. You have contrarian here, which everybody's trying to be

contrarian and then non-contrarian in the market, which is where you're growing. Have you seen a big surge of downloads around the conclave and the, I mean, like religion is the national, the global news story this week. Does that drive growth for the business? Yeah, we take it really seriously to try to help. You know, this is different than like it. We talk about it often as like a political thing, but it's very different for Christians and for Catholics,

especially than, you know, a presidential election in the U.S. And the most important part for us is, and this is true also for political elections, but certainly for this, the most important part is prayer. And so the thing for us is just to make sure that we're spending time praying for the church, praying for the, you know, repose of the soul of Pope Francis after he passed. And so we tried to create some content to help people journey through that. And then also to pray for the Cardinals as they were choosing the Pope and then now to pray for

the new Pope and to get to know him a little bit and learn about his writings and his homilies and what he's trying to do for the church. And so yeah, for us trying to help grow deeper in prayer and use this as an opportunity to let God work in our hearts was we thought a big opportunity. So certainly, certainly pretty busy for us. And we got, like today was one of our biggest bikes and downloads of all time because, you know, you send out a little push notification that's like white smoke. There's a new pope. So let's pray for them, you know. But for us, we just try to use it as an invitation to, you know, let God in a little bit more. Yeah. How do you think about design of the app? I feel like the app store is so competitive and there's so many dark patterns when it comes to,

you know, mobile games. I'm sure you're trying to use best practices, but you're, you're, you're you probably have a moral framework that you're following the lines that you don't cross. Have you thought about actually building the app to be something that can grow and be a fantastic business while still like satisfying the core mission of the company? I certainly hope we have a moral framework. I care a lot more about getting into heaven than our retention rates. But retention is important. Actually, it's funny because retention is a great example.

We work a lot on retention. You want to drive great retention. And for us, what that means is we measure retention based off of whether you're start in a prayer, whether you're praying on the app. And so a retention rate is just, okay, if you download the app, you're looking to grow deeper in your faith, you're looking to try prayer and meditation and growing in your spirituality, how successfully did we help you to build a daily habit of prayer? And that's a really, you know, that's the core of our mission.

But it also, you know, as a subscription business, which there's a free version of Hallow and then a subscription version. But as a subscription, that's also all you care about is trying to get new subscribers in at low-cax and then try to keep retention, which for us is just adding value to people. You know, for, there's a lot of people who have a lot of very strong opinions on this, but like Christianity and the church especially has always had a very clear stance, which is like business and economics and certainly entrepreneurship can be forces for real good. They can be used for evil and most of the time they are. And that's the same with technology. Like most of the

stuff on the internet is bad. It's at least if not bad, distracting and noise and awful for like your soul. But God can still use it. So just because we screw it up the vast majority of the time doesn't mean that God can't use it for his own good to try to bring joy and love into people's lives. And it's the same thing with, you know, startups, which is, and even Pope Francis was really clear on this. Like, Pope, startups in business can be a tremendous force for good as long as they are, you're doing them with a spirit of service aligned with, you know, the right values, treating your employees well, trying to serve your customers, not trying to do dark patterns or anything, and doing it in a way where money is a tool and never

the object. If it's the object, you're always going to leave. unfulfilled. It's always going to be sad. It's, you know, it's never going to be the end-all-be-all. You're trying to make it your God. But if you use it as a tool, then it can be a great tool to help, you know, serve your brothers and sisters around you. Can you share a little bit more around the news today and around Pope Leo? We were live when the news was announced and we've had like eight guests so far today. So certainly haven't been able to get to you into it. So for our own curiosity. Or even at a meta level, like how can someone get to know the new Pope? Like what is the correct process to even digest that information?

Yeah. Well, in a self-serving spirit, we have a challenge launching that is to get to know the new Pope and to pray and to try to spend some time in silence, but also to get to understand the new Pope. And most of the time it's through homilies. So these are cardinals that are chosen who were then priests and then bishops and then they're cardinals. And so they've given a lot of homilies. They've given a lot of sermons. And you can tell a lot about where a person's heart is at, what they're trying to do in the world and what they think the world needs and what you know they've heard from folks in terms of what they need from their homilies but you know at a at a super high level for the folks who haven't been following the news the a new pope was chosen pope francis passed away

this was the monday after easter sunday which is beautiful like his last day was Easter Sunday which is just such a it's such a beautiful time but then there's a period of morning and then the cardinals get together in this like super old school in the Sistine Chapel beautiful place and they vote on for a new pope and And it's been, it started yesterday, so it's been two days. So it's relatively quick, but they go through these rounds of voting each day, and you have to get to two-thirds, and then that's the new pope that's chosen. And today the new pope was chosen, and it's Pope Leo the 14th, which is the name that you choose the name as a pope.

And he is a cardinal from, he was a cardinal from Chicago who lived in Peru for about 20 years trying to serve, especially the poor and act as a missionary. But then he worked in the Vatican for a while and got familiar with all that. all the Vatican stuff and was was a very good was a very worked very closely with Pope Francis you know it's crazy because he's the first American Pope in the history of the papacy which is insane I mean it's not that crazy because the church has been around for 2,000 years and America's only been around for a couple hundred but a few hundred but what is the first American Pope which is

huge from Chicago which I live in Chicago currently with my wife and kids and Hallow is based out of Chicago so that's just insane I mean the he was like people kind of thought maybe he was in some sort of list of front runners, I guess, but like certainly not top five. Nobody would have thought he was, you know, the top three or four or five. You know, for me, it's, and then he comes out and he blesses the city of Rome and then the whole world. So it's this picture where he's out on the balcony, blessing everybody. And he gave this really beautiful speech of, you know, just how God loves each of us and he just wants to enter each of our hearts and that we shouldn't be afraid and we should

go forward with faith and with hope and, you know, with the protection of Mary and the angels and all the fun Catholic stuff, but really just to let God into our hearts. And so he gave this beautiful speech. It'll be fun. But he's 69 years old, so he'll be the Pope for like, you know, probably 20 years or it'll be a long, he's a relatively young Pope.

So it's a cool thing to get to witness. That's very cool. Are people already reading into like the political implications of this? I know the Wall Street Journal was a little bit critical of Pope Francis for some environmental decisions he made. what are people expecting from the Pope in terms of like political leadership or shifting the culture around the politics of the church? Yeah, you know, we always, and especially as Christians, we run into this all the time. And honestly, it's what happens in the gospel. Like you read the

gospels and you read the Bible. And what they tried to do to Jesus was they tried to, they tried to bucket them into these political things. And they were like, oh, you say you're the Messiah. So aren't you supposed to overthrow Rome? That's the current like operating power. And he's like, guys, guys, guys, I'm not folks. on your like right left fights I'm not focused on your little disagreements with your politics I am trying to build a kingdom but it's not this kingdom where it's uh you know I'm gonna like fight a war it's a kingdom like it's your heart I want your heart that's what I want your life I want your soul I want your heart like I want you to live a life of love and so what we tend

to do is the same thing we've done it for 2,000 years but what we tend to do as Christians is we like we bucket these church leaders into these political category categories and oftentimes it's It's appropriate because they speak very politically, but especially as the Pope, it's such a funny role because American politics are such a small portion. I mean, you're the Pope of the world, but certainly the billion and a half Catholics, which are spread up, you know, there's a small minority are in the United States. And so even just thinking, you know, for me with Hallow, we have a global population now. And thinking of politics in different countries, it's just like you can't really compute

it. But you know what he seemed, what Francis was really focused on, I think, was this. was trying to share the love and the mercy of Jesus with people, especially people who are the most marginalized, who are in the toughest places. Honestly, it's a lot of what we try to do at Hallow. And I think this is what Pope Leo will continue. Pope Leo the 14th will continue to try to do it. He spoke a bunch of it about that in his first kind of blessing.

He's spoken about it before. I mean, one of his quotes that I looked up that I loved was like, we spend so much time as Christians focused on teaching and on theology, which is important. is a beautiful part of the faith, but we forget that the first thing that we're supposed to teach is just like, hey, there's this dude that I know that's awesome, that I love, and I want to share them with you. Now, he said it much more beautifully than that. He said, you know, the first thing we have to teach is that is to know and love Jesus Christ. But it's the person. It's not, it's not like

this set of facts or ideologies or politics or whatever. It's like, no, I just have this guy I want to share with you, this relationship that I want to share with you. That's all. And I think that's what he'll try to continue. Politically, actually, you know, on some of the more sensitive topics, he's been very reserved. So like there's not a, there's not a lot that you can tell on, on his stances other than the things that the church has always stood very clear on. So he stands very clear for pro-life. I mean, he's got a very pro-life message, which is the same as Pope Francis, both for the unborn and for elderly. He's got a very clear stance on protecting the environment. God gave us the environment and, you know, the church's job and us, our job as Christians is to

inspire us to take care of what the gifts that God has given us. And so, you know, he pushes for a lot of the same things. But Leo actually is a really interesting name, because Pope Leo the 13th was the one who really fought against this socialism, like this rise of socialism, also unbridled capitalism. And he was like, look, you can't just exploit people for money. That's, you know, we shouldn't do that. But also there is private property, and it was really fighting against this rise in communism. And so choosing the name Pope Leo does actually say a lot of really interesting things about what he's hoping for for the church.

But we'll see. We've got 20 years to figure it out. So we've got some time. Alex, thank you so much for joining. This is fantastic. It's a blast. Thanks for having me guys. much.

We'll talk soon. Good luck today. Bye. That's fascinating. We're going to have a busy evening. For sure. For sure. We got Gary in the waiting room.

Let's bring him in. We're excited to have him on board. Yeah, what a great topical update. I'm excited to dive more into the Pope and kind of understand where he lands on everything. Pope someone who's like kind of, you know, drops out of consciousness, but then pops everyone once a while. Back in a big way. Bang or homily.

Did you got a new homily. Really shake up the tech industry. Yeah. The banger homily, hopefully. Anyway, we got Gary Vaynerchak coming in to the studio to the show. Excited to talk about the creator economy, what we're doing, what he's doing, how they intersect. And I want to ask him about this Walt Disney corporate chart. Have you seen this?

The famous chart. Yes. Of like how everything interconnects. And I have an interesting hot take I want to get his reaction to because this chart, everyone cites this is like, oh, it's okay to build this really complex business where everything interacts with each other. Disney created this chart 10 years before he died. He was 50 and had spent 30 years building the Disney Empire.

This was a reflection on his life and his career. And we got Gary in the studio. So welcome to the stream, Gary. How are you doing? There we go. There we go. Where are you? Where are you going?

Wait, wait. How was Bloomberg? You were over on Bloomberg TV? I was on Bloomberg to you a few minutes ago and now I'm upgrading to the most important business show in the world. Thank you. First of all, men, you guys look very sharp.

Thank you. Yeah, we try and dress up. We take it professionally. We are the media. You guys look good. I am in New York City, headed back to the office. I'm like in the thick of this major launch of my B-Friends trading cards.

But I'm really, really humbled to be on this show. And you guys, obviously we've spoken. a couple times off screen, but I'm going to give the flowers while I'm on it so other people hear it. I love what you guys are doing. I'm proud of you guys. Thank you. I'm sure for you guys and I'm thrilled to be on the show. Thank you. Thank you so much for coming on. Tell us about the launch today to start. I have to imagine this has been in the works for years now. So tell us about what you're launching and the significance. Look, knowing how high caliber the audience is here, let me say it this way. The direct answer is we have.

have a Topps trading card launched nationally, globally actually, which is if you pay very close attention to the narrow sports card world is a big deal. The only other IPs that are on Topps Chrome are Disney. Disney itself, Star Wars, Marvel. So it's a big head nod to this tiny young intellectual property that I'm building that has the ambition of Pokemon, Marvel, Disney.

But I mean, year four, and back to, you know, you were just mentioning Walt Disney, He was doing that 110%. Travis from Uber and I used to invest a lot together. When he took over and was the day-to-day CEO of Uber, he's like, I would hit him up about random things. He's like, I can't. I'm 100% focused on this.

I'm four years into be friends and I'm in the process of getting to a place where I can focus 100% on it. But I'm not there yet. But yesterday was a great day, especially for me. I grew up a baseball card kid, Tops is the apex. But at a higher level, back to the audience that's here, I really think that intellectual property is going to be a very big topic of conversation over the next 20 years. I think as we go into this AI era, I think people will understand the value of IP more and more and more.

And I'm grateful that, you know, my belief of what the blockchain means, which is what I started BeFriends on as an NFT project, and my understanding of storytelling and brand building around comic books and cards. cartoons and all that stuff. I'm pretty excited, man, to be on it. And so directly yesterday was a big day, but it's a tiny, tiny little pebble in this boulder I'd like to build over the next three or four decades. Yeah, talk about, you know, one of the, you know, creating iconic IP takes time. There's no, there's no way to shortcut. There's no way to shortcut. Yet at the same time, crypto is known for just being ruthless in terms of expecting things, you know, now, yes, yesterday, things like that. How have you found? And obviously, I don't think there's very few people

in the world that work harder than you, right? So you're like working on, on delivering that, you know, and growing the value of the IP day over day over day. How have you found the pace? Pretty easy if you're willing to deal with pushback. Meaning to your point, you know, If you go talk to hardcore NFT collectors, that small group, right, in the scheme of a billion people in the world, a lot of them will tell you that over the last 18, 24 months, I've not been the darling of the ball. Because I just refused to do things that were going to create short-term economics. Yeah. And so I had to take my bumps and bruises on some of the DGens, and I was empathetic. Like when you are running a marathon, sprinters make fun of you.

Yeah. So, you know, have I dealt with it? I'm grown, meaning I've been running businesses for 30 years in my life day to day. So I've also been a public figure for almost two decades. It wasn't hard for me to deal with the cynical tweets. I have a fucking vision. I'm focused on what I'm building. And over the last 24 months, building the infrastructure.

of trading cards and comic books and cartoons, my Moonbug collaboration, my Tops collaboration, us becoming a leader in live social shopping on whatnot. These are the pieces that are being put in place. And when you look at the NFT values, because people are falling in love with patient panda and fearless fairy,

you know, I know why people buy Spider-Man comic books. I know why people buy Mickey Mantle rookie carts. I need the storytelling. while there was uncertainty in the market, especially with the prior regime's SEC. I've just focused on building incredible community and collectability and infrastructure

and building out my team. And so to answer your question, it was quite easy and quite hard. It was easy because I am who I am as a human and an operator. It was hard because even if you're a gangster and focused and I like to be all those things, I'm a human.

And, you know, when you get that pushback and people like, where what, what's the value, what, this, that, or like, where did Gary Vigo? You know, you got to eat it. But the reality is, I've been very clear about what I've been doing from day one. You can go look at my CNBC or podcast interviews in 2021. I said I'm building a 30, 40-year IP. 99% of NFTs are going to go to zero. I see a path to not being part of that 99%. It is going to involve the real world, not just digital.

I will stay on top of my Web 3 understanding, my Web 2 understanding. And, you know, I've spent six months on understanding AI creation is going to matter for this IP, you know, because I'm required to. Or the updates on new blockchain or what Coinbase is doing with base as a layer 2 or what's going on with YouTube kids dynamics. And I mean, I'm just in my traffic, bro. And so I'm, I've handled it easily. How do you think about value transfer for intellectual property going forward. I mean, we were in the dark ages for a while where you couldn't even use a song on social media without getting the thing taken down. Now it feels like most of the

platforms have figured out how to funnel the ad revenue around to the correct creator. Imagine that gets better with AI, but it's going to get better with AI and a lot better with AI on top of blockchain where you could really, really layer it all together. So what do I think? I think people in the intellectual property business are big winners of the next half century. And I'm grateful that between Gary V, the personal brand and V friends, the intellectual property that has obnoxious ambitions, that I'm going to be in the game. What does the next one to two years look like? You've been laying out your master plan, giving us updates. But what is, yeah, what's the immediate future look like?

social media creative at scale believe it or not this is analog but the comic books are monstrous for me but it's a modern twist we're selling comic books in packs so it has like a baseball card feel so different covers different variations and we're selling it on

on whatnot and TikTok shop so we're doing commerce tainment which is something I believe very deeply in yeah so right now I'm going into the chapter of here's how I look at it I don't know if you knows this, but Harry Potter's original book is a very sought-after collectible and very valuable. Yeah.

But Pokemon and Star Wars' first books are not that sought after. Spider-Man's rookie card in 1966 Donrus, I think an undervalued collectible, but is not super sought at because when you're a comic book collector, or, more importantly, the first time Spider-Man appeared in the world, it came in comic book form, Harry Potter came in book form, trading, you know, Pokemon came in trading card form. The form factor of the collectible when it first appears becomes the alpha, becomes the real central focus.

And then the IPs expanded to everything, from pajamas to cereal to vitamins, to movies, to video games. What I'm focused on right now is getting people to fall in love with my characters. So animation, social media content, comic books, stories on the back. I'm very focused on that. What that's doing is it's leading people when they

fall in love to get into the ecosystem. And then that brings them back to wanting to own V-Friends Series 1 NFT because that is the original origin of the IP. So next 24 months is keep my eye on macro technology, make sure I'm utilizing AI and everything that it brings to the table for me to expand and the output of my creative, both in volume and quality, pay deep attention to the new blockchains and the layer twos and the innovations that are happening in NFT land, because obviously, you know, this is at the end of the day, a digital collectible first and everything else second. And then most of all, figure out more ways for people to fall in love with ambitious angel and balanced fetal and the very lucky black cat. You said you're one of the most active sellers on whatnot.

Are VCs still underrating live shopping? It feels like one of those things that took off in Asia, but there haven't been that many power law comes in America. It's taken off in certain subgroups and for certain product types here and certain demos. But I'm curious as a seller, how do you view it today? I view the QVCification of social media as one of the most. significant micro emerging trends in the community of venture capital, private equity business, opportunities for entrepreneurs and humans. I think it is incredibly real. I wouldn't call that

VCs are underrating it. I think whatnot got an obnoxious valuation, but I think that's the macro infrastructure. To your point, DT, I think small businesses and entrepreneurs and startup founders are underestimating it. If you sell something physical, if you sell something and live social shopping is not part of your daily debate strategy and then ultimately execution, you're misplaying spring of 2025. If you sell vitamins, if you sell underwear, if you sell racketball, if you sell something. And this is not part of your repertoire, you're basically similar to someone who's not using social media at all in 2008-9, which means you're not going to go out of business. It's not like you're a doofus and you're dead.

It means that you're leaving an obnoxious amount of opportunity on the table. Yeah. That's a good framework. We'll get on there and we'll start selling 2026 ad slot right next to you. Yeah, I know we got a hard stop. Anything else you want to share while you want to? I want to say thank you and I want to say commerce tainment.

You may not sell ad slots because that's a different form factor but if you don't think that you guys could sell and I don't think this is the right move for the tone and ten or what you're doing. However, there are general business items that this show could sell at scale even passively while people are watching

with shop for a briefcase or these are the best travel shoes or fucking I don't know fountain pens I don't give a shit. You guys can. of Dominate. Love it. I love domination. I want to dominate and everything we do. We'll discuss our master plan together. I want standing desk floating across the screen and we're saying by now, by now, three left. Great to see you, Gary. Fantastic. How to go on. Safe travels. We'll talk to you

soon. Anyway, let's do some timeline. We got 15 minutes until Will from Woop is coming on. The amazing thing about GV. He's the same person always. Oh yeah, totally. Every interaction, talking with him. It's great. He's in the car just doing business. Yep. I love it. It's great. It's great.

Totally authentic. And I like the clear dedication to V friends. I mean, he is on an absolute mission. Trenches. Yeah. I love to see it. Anyway, let's go through some timeline. First up from Harsh.

He says, windsurf sold for $3 billion. Cursor is now valued at $9 billion. WinSurf bought by OpenAI. Open AI is an existing investor of Cursor. Both are VS code forks. VS code is owned by Microsoft. Microsoft, it's 49% of Open AI. And it's the big short photo.

Hey, there's a bubble. And I mean, a little silly, but it makes sense that everyone's getting into this. This one from Leo Gow, if we can pull it up, is one of my favorites. From Frog and Toad said, Frog put the profits in a box. There, he said, now we will not be motivated by profits above the cap, but we can open the box, said Toad. That is true, said frog. Just a timeless children's tale of obviously referencing the Open AI profit cap. Nick Carter also had an interesting post about AI, the K-shaped reaction to artificial intelligence.

For people who are naturally curious and love to learn, AI vastly improves their pace of information and gestion. For people who hate reading, writing, and see knowledge work as pointless busy work, AI will atrophy their cognitive functions. I couldn't agree more. If you're curious, you'll just be tinkering with chat GPT all day long. I was trying to pull a list of the fastest companies. I mean, I'm sure everyone's seen that chart. The fastest company is to 100 million of ARR. I wanted to see the big boy version of that fastest to one billion in revenue.

Obviously, Google, Facebook, all these companies have done it very, very quickly. And I was able to just do one deep research report, then have, you know, turn it into a cycle. hit learn or I forget I forget exactly what map plot lib chart all within one one chat GPD chat interface and I was just going back and forth for probably like 30 minutes while Jordy was just watching me. You fully voice mode too. Yeah, it was great. Just talk to it and say, hey, do you have to change this title, make this bold, make this

spot bigger. Analyst in my pocket. It was great. I'm not going to say the name of this account, but I will say I will read the post. it says there is a phenomenon on TikTok where businesses will exploit their young female employees to do an informal ad for their establishment. You heard about this? I don't.

Oh, we have like a junior employee. I don't call this exploitation. I call this shareholder value creation. Being on a team and being willing to do things that aren't necessarily directly listed on your. Yeah, but I mean, if it's not within your purview and you're like, you know, forcing your employees to post about your stupid business or something. Gun to your head. Make a TikTok ad, John.

Yeah. I mean, I don't know. It seems kind of silly. But yeah, I mean, you got to negotiate that in your employment contract. Hey, this isn't part of my job if I don't want to be doing TikTok for you. Anyway. You can always say no to TikTok ads. There's this video that went out from frothless.

The money isn't real. I don't know if you saw this video, but it has a very cool, like, retro vibe. I don't even know if we can play it. Yeah, that's fun. It has this very cool, like, retro VHS vibe. And it's making all these points about, like, you know, crypto's the future. Money isn't real. Gold standard dropped.

And the whole time I was watching it, I was just like, this feels like an ad for buying gold. Like, you can still just buy gold. And yet it's funny that like 90% of this is just an ad for gold. And then at the last second, it's just like, oh, actually buy Bitcoin or some. It's actually don't even buy Bitcoin. It's like buy dollar sign crypto on Solana or something. something like that. It was like a very odd pitch. You're getting a meme coin ad. Yeah, it was a meme coin ad. And I was like, I feel like a lot of the statements you're making are just, you know,

gold bug talking points basically. Anyway, uh, Rohit says, uh, this image is unironically worth $100 billion in annual revenues. Did you see this? Gemini advanced. You ask it, uh, what are the best headphones in the world? It says, it's a classic question with a delightfully complex answer. There's no single best pair of headphones in the world. Let's dive into it. It gives you this big, long text response. And then on the other side, you go to Google and you click and you search world's best headphones and it just immediately shows you exactly what you can buy.

And what was your interpretation of this post? Like what do you think Rohit's trying to say with this? Well, I mean, first, this just goes back to what I was saying earlier. It's like the Google dilemma is just will be a, a HBS case study within probably five years around disrupting yourself. Yeah. But not in necessarily a great way, right? There's some businesses that like,

we're going to disrupt ourselves. And they sort of launch an iteration of what they're doing, but don't kill their golden goose. I mean, I mean, I think this is, you know, the funny thing here is I think that a lot of consumers, the right side, just getting shown the pretty picture. I completely agree. I completely agree.

I don't think the LLM response is better here. I don't want to see a wall of text. I think people make with headphones, headphones specifically are not necessarily the best example because it's emotional. It's like part of your outfit. It's highly, you know, personality driven.

It's not necessarily like. I want a visual response. And also I want like the data can be presented in UI better than just a big long text block. So you look at the bows over here and it has the price, the brand, which is important. The star rating.

That's also important. But I mean, Gemini could easily just add those. sponsored modules. Yes. But in terms of like big block of text like you know 4,000 words on the best headphones, like that's cool. But I and I'm okay with the LLM kind of noodling on the question. But I do still think that a lot of people would prefer just to have a visual representation of like here are here's what we think are the best. Here's five others that are potentially in the running in the conversation.

And here's images, prices, you know, just. just basically write an entire wirecutter report, but instead of just being so, this highlighted to me just like the gap between the current UI for some of these, yeah, some of these use cases, and then text, yes, text is the universal interface to quote, we ruin, but there still is a lot of benefit

that comes from just UI and imagery. Yeah, the interesting thing here is, I mean, very easy for Google to just like move the sponsored module into the, LLM. Yeah. But then the bigger issue for them is, you know, Chad GPT being the preferred consumer LLM.

Yeah. And growing astronomically. Yeah. And I mean, you imagine that, I mean, Google has a decent image generation. I think they have actually a great one,

especially with VO, the new video module. So, but there really is integration challenge in putting all of these together. Like we've been joking about, like the PDF upload, like all these different models you have to choose from, everything's buried in drop downs and menus. It really would be better, like actually integrating all of the different AI models

into one unified search box. Like that's what Google has done over the past 20 years, right? Like you search for a flight, it knows, hey, let's go to the flight UI and it has different, it instantiates a UI that's not developed on the fly. It's not coded on the fly. AI certainly has that promise of that. there's still plenty of, you know, business logic routing that can happen in the LLM. Like, you know, every once in a while I'll ask it, like generate an image or make an image of this.

And it'll just describe the prompt. And then it'll say, like, hey, do you want me to actually generate this? I kind of got confused. Did you want text or image? And so clearly within Chat ChaptuPT, there are multiple routes that it can go down. Like, do you want me to write code? And then if you say yes, it writes some code. Do you just want text?

Do you want me to go out to the web and search? Do you want me to generate an image? There's kind of like four or five. like tool usage is yeah um google when you search has like 10 or 50 i don't know hundreds because there's like the wikipedia knowledge box there's also the flights there's images there's videos there's all these different things that it can search and and and turn up in the ui and the gap between that and where the lLMs are today especially for some of the some of the less productized uh i products um really is uh it's clearly like a path that that open a is marching down but it's

going to take a while. Yeah. Anyway, speaking of AI, Sonya Wang from Sequoia is coming on the show tomorrow, but she was recapping the third annual Sequoia AI Ascent. Absolutely banger lineup. Jensen Wong from from Nvidia talked about token generating AI factories as the new industrial infrastructure. We were talking to her partner yesterday and Andrew Reed. And we were, and I have this big question of like, when will we see the first data center build out for? for humanoid robotics because it seems like until that happens, we're not really on the scaling curve of that technology. We've seen that for LLMs.

We are starting to see it with self-driving cars, but we are definitely, you know, there's a lot of noise in humanoid robotics, but we're not actually seeing like the satellite images of the 100,000 H-100s all go into one facility. Jim Fan from NVIDIA was actually Addison talking on about why simulation is key to robots passing the physical Turing test.

And you would, so you would think you'd be simulating on a huge scale. You'd be doing a massive data center buildout. And that's something that it can't just be a talking point for a humanoid robotic CEO. It has to actually be, it has to be the domain of Dylan Patel in the semi-analysis. Until I see the satellite photo of your build-out, I'm not fully convinced that we're there. But Brett Taylor becoming CTO at age, Facebook CTO at age 29 was there. Jeff Dean, one of the most legendary programmers at all time. is over at Google.

Sam Altman was there. Chase Lockmiller from Crusoe. Really insane lineup. Stacked. Well, we'll have to get more of her takeaways from that. Yeah. There's this other poster for moving to Europe. Your student debt will not follow you here.

And so Andre says, we can weaponize American AI against them. And Byrne Hobart says, sending Europe a bunch of people who have credentials indicating that they're suitable for office work, none of whom understand compound interest should be considered an act of sabotage similar to the Nord Stream attack, just sending our most indebted college grads to Europe. Anyway, we have our next guest.

Let's bring him into the studio. We're excited to talk about whoop, break down fitness trackers, and everything that's going on today. Welcome to the stream. How are you doing? What's going on? Hey, what's up, guys? How we doing? We're good.

Great. Big day for you today. Yeah, congratulations. Yeah, bring it down for us. No, it's great to be on with you. It's an exciting day for Woop. Obviously, we build wearable technology designed to improve health and performance. I've been building this company for 13 years. Wow. And I think if you chart kind of the history of the company, it started really around, you know, high-end athletic performance.

And I think for the past decade, you've slowly seen the company evolve from being focused. on, you know, the world's best athletes to being focused on a much more general population. And in a lot of ways, our launch today, I think, crystallizes that. We came out with two new hardwheres, the WOOP 5.0 and the Woop MG, 14-day battery life, a whole set of new health sensing, a battery pack that, you know, gives the sensor up to a month of charge without needing another charge. And then we've come out with a whole suite of new features. So we came out with health span with whoop age, which will tell you essentially how old you are.

I think it's going to be a fairly addictive feature based on people's response to it already. We came out with a heart screener with ECG, so you'll be able to screen your heart with a medically cleared feature. That's cleared by the FDA, so you can do ECG monitoring. see if you have AFIB, which affects about 1 to 2% of the population. We came out with a whole new suite of women's health features, which is pretty exciting. Menstru cycle coaching. And then, of course, like all sorts of new bands and apparel. We announced that we're going to be doing blood testing soon.

So, you know, what started as... Wait, you skipped over that, but I'm curious to dive deeper. that's is that blood testing in you know people can visit labs or or have somebody come to them or or how far away from from my whoop being able to take your blood while you're wearing it just give me a little prick you know the original uh yeah the hardware itself won't get won't be giving you the prick but we are going to enable you know clinical lab blood tests uh which will then be integrated into your whoop data. I think a challenge that everyone feels as a consumer who cares about their health is

I've got some data over here. I've got some data at a doctor's office. I've got my whoop. I've got, you know, wearable data. And none of that information is connected. And we're trying to bring more of that under the same umbrella. So, you know, we went from having strain, sleep, recovery, health monitoring, stress monitoring. We've now added things like, you know, ECG metrics. We came out with blood pressure

today, which is a huge deal. And then, you know, on top of that, we're now going to be introducing things like blood testing. So when you start putting all of this data under the same roof and you can layer in coaching and analysis, different forms of artificial intelligence, it's pretty powerful what you're going to be able to tell people that's amazing how how uh how competitive are you you in the team and how much does that impact your kind of product development cycle i mean i have to imagine like you know obviously there's a variety of fitness and health trackers out there but you guys seem to be very clearly at the at the edge with this new launch uh and i imagine already working on you know the next iteration but what's what's the culture like internally

You know, I wouldn't say we spend a lot of time thinking about or talking about the competition, in part because the space for wearables went from actually being incredibly competitive to now having maybe the fewest players it's ever had. If we were to talk about competition 10 years ago, right, I started the company in 2012, but let's say like 2015, we'd be talking about Nike and Adidas and Under Armour and, you know, Fitbit and Java. and, you know, Intel and Microsoft and Samsung and Google, and here are all the other companies that are going to enter the space

and Amazon's coming and Facebook's coming. And of course, Apple has been in the space. So today, you know, it's really only like three or four companies that I think are playing a big role in pushing health monitoring. And I think we got this far by having our own. own point of view on the space. We've done things a little differently. We built a device that doesn't have a screen. You know, it really just focuses on health monitoring. It doesn't do a bunch of other things. It's not, you know, it's not a tool that you can get emails with or call in Uber

with. It's really focused on health monitoring. So, you know, I think competition's real. I think you want to be paying attention to the market. But I wouldn't say that we spend a lot of time talking about competition. Now, that doesn't exactly answer your question because you asked if we're competitive. And I would say we are competitive. You know, we like to win. When Amazon knocked us off,

and so Amazon met with us in like 2018 to invest in the company, never invested, came out with a copycat product in 2020 called the Amazon Halo. And we were so competitive then towards them that their forwards on, every circuit board we manufactured we wrote don't bother copying us we will win and we literally we that message was actually directed directly at amazon because we knew they were going to reverse

engineer it right yeah we knew they were taking our product apart and so there was sort of like an inside joke that of course they were going to have to see that message that's hilarious that's so that's so demoralizing you know you're like one product manager of 300 you know working on halo and you just like discover this. Like guys, I have some bad news. We're being, you know, we're being sent messages. Can you talk about the,

I'm particularly interested in the, in the health span feature. You know, I've tried a variety of different, various, you know, testing companies over the years. I'm an investor in, famously your biological age is like,

what, five years old? Yeah, yeah, yeah. This is our joke. Like there's this kind of like competitive dynamic if you're doing anything related to biomarkers that you would just drive it down eventually like they're going to tell me I'm actually negative one like I'm still in the womb biologically. But how do you guys kind of work? What does that product actually look like in practice and what was what was important to get right there? Yeah, it's a feature we've worked on for a few years now.

And it's called HealthSPAN with Whoop Age and it really has two key numbers. The first is, your whoop age, which is essentially what we define as your real biological age, which is obviously different than your chronological age. And then it's got your pace of aging, which ranges from negative 1x to 3x. And the lower, the better for that. And those two numbers kind of play off one another. The age itself is based on six months of data. And the pace of aging is looking at your last 30 days. So you kind of get a sense for. have my recent behavior has been positively affecting my, you know, my overall health. And we developed this feature in partnership with the Buck Institute, which is one of the top institutes for longevity

in the world. And in particular, we worked with an expert named Dr. Eric Verdon. And we looked at a universe of all the different variables that are related with all-cause mortality. And, you know, we looked at a pretty large universe of different metrics, but ultimately we settled on nine that most closely correlated with all-cause mortality, or were leading indicators of all-cause mortality. And those include the hours of sleep you get, your sleep consistency, exercise as measured as like the time you spend in heart rate zones, your steps throughout the day, your V-O-Sys, to max, which is a huge one, the amount of time you spend strength training, and your resting heart rate. And so lean body mass. So we took, you know, we took each of these metrics. We actually show some

of the research that is related to each one of them. And when you get the feature, you can go down every single of those nine metrics and see the degree to which it's adding or subtracting from your age. And in a lot of ways, this is, it's probably one of the first times whoop has been really explicit on how good you are at a specific metric relative to your age and, and, you know, your gender. And so people have found it very actionable because, you know, maybe you're great at these five things and these four things are making you older. And so now you know what you have to work on. Yeah, very cool. I have a question about meta Raybans, partner with Luxotica, Raybans, have you ever thought about partnering?

Jordi was joking that you should partner with Patek Philippe or potentially Vacheron-Constant or maybe Adomar Paget. But have you ever explored that? Do you see it in the future? What do you think on the partnership side? We're certainly open to different partnerships. We haven't done a lot of them today. I think there's a few different categories of partnerships.

So, you know, one would be around just like, the whole universe of accessories and apparel that Woop has. Actually, one of the things that's quite unique to Woop is it's the most customizable, wearable on the market. So you can create 70,000 different types of bands and looks and feels for the product. I mean, for your, for your audience that's watching this, that's not familiar with the product, like I'm just showing it right now, but, you know, these bands come off very easily. And you can swap in and out all sorts of different colors and looks and feels.

We've got, you know, everything from leather to cashmere to, you know, an everyday silicone. And so we are looking at different partners in that category where maybe we'll do specific band developments with someone. The sensor can also be worn in different locations on your body, which is something that's unique to woo. So you can wear it on your upper arm. You can wear it in your boxers. You can wear it in shorts, women's bra, underwear.

and so today, Woop makes all of our own apparel as well. But that's, as you can imagine, another area for potential partnership. Another category, I would say, if partnerships is around data. And so, you know, Woop obviously has a unique set of data.

And then, look, there's other products on the market that have unique sets of data. A very simple example of this was we partnered with Withings, you know, about nine months ago. And, you know, everyone who has a certain whitting scale, when they step on it, it goes straight into the

Woop app, it updates their profile, the weight, the lean body mass would feed into your health span. So things like that that just feel really seamless. You know, you asked about like meta and Raybans and those sorts of things. I think from like a data display standpoint, you know, we'll go where the eyeballs go, right? Obviously today everyone's got a smartphone. So as a consequence, once we have an iPhone app and an Android app, right? If one of those platforms emerges as being really popular, you know, one of these AR platforms, I could certainly imagine whoop data appearing there.

I think at the end of the day, we view ourselves as a tool for collecting this data and helping explain it, but we are open-minded to like what the platform is that you analyze it on. It makes a lot of sense, George. Last question on my side. And then I need to go get one of the new ones.

Yeah. Very curious now. How I'm assuming since I imagine the majority of your revenue is really on the software side, does that mean that the terror like, and I imagine a lot of your manufacturing is in, is in Asia. My, my uninformed assumption is that you guys aren't terribly impacted by this, given that I, um, I, imagine, you know, the real value that people are getting is from sort of the ongoing sort of membership. But talk about that and maybe how you're kind of planning around around the tariffs. Look, I mean, we are impacted by it. No question. We manufacture some products in China. We also do some manufacturing in Mexico. We've got accessories and apparel that we source around the world.

So, yeah, look, the tariffs have impacted us. You know, I think for now we're taking it on the chin rather than passing it to consumers. And, you know, my expectation is that some of this will evolve. And look, our standpoint as well is, all right, we have to have a manufacturing policy that adapts to where the U.S. is and U.S. relations with China and all of these different things. So I would say we're looking at a few different options in that category, but we haven't done anything yet that directly affects the consumer in a negative way. And at least I'm happy with that.

Yeah, that makes sense. Well, this is exciting. Yeah, congratulations. Congratulations. Where can people get it? Whoop.com. Whoop.com. Let's go.

Whoop. And I just want to say congrats to you guys. I think on creating a cool new category in this show. I've enjoyed seeing snippets on the internet and listening to you guys. I appreciate what you do. Thank you. Thank you. Well, come back on whenever you have news. Yeah, we'll see you soon. Yeah, we might start, we might have to start flashing our health spans on the Chiron so that it works well. We track our eight sleep scores daily with the audience to sort of keep the, ourselves accountable, but just we want to add. The audience wants that. Yeah, yeah. We're going to add every single health metric because we want to do this for decades. You can't, you can't stream for three hours a day without taking your health very seriously. Yeah, I think like every 30 days, just kind of a live update on your age, your health.

That's what the people need. Yeah. We're doing the show three hours a day aged you 10 years and three months. What happened, Jordy? Yeah. Hopefully not. Awesome. Well, congrats to you and the team on the launch.

and we'll talk more soon. We'll talk more soon. Thanks so much. Bye. Cheers. Fantastic. Gigastream. I think we're over four hours now,

getting close to four hours. Actually, right on the dot. So thank you if you watch the whole thing. Thank you if you watch some clips. Thank you. If you bought from any of our sponsors. We have another great show tomorrow.

I'm looking forward to it. It's going to be Friday. And that means it's rough. It's the worst day of the week. It's our last day of podcasting for the week. Yeah. but we got it we we get another week next and then another week and then Monday always comes around yeah thanks folks thank you for watching we'll see you

soon have a great day