TBPN - Karri Saarinen, Sean Frank, Semil Shah, Dan Lorenc, Google's Earnings Power Holding Up Well, Intel Says Layoffs are in Store, The Relationship Between Netflix and The NFL, Elon's Friends Sell Access to Stakes in Private Companies

Episode Date: April 25, 2025

Karri Saarinen is the co-founder and CEO of Linear, a popular issue tracking and project management tool. Previously, he was a design lead at Airbnb, focusing on design systems and product development. @karrisaarinenSean Frank is the CEO of Ridge, best known for the Ridge Wallet and expanding the brand into a broader EDC (everyday carry) company. He has a background in e-commerce and performance marketing. @SeanEcomSemil Shah is the founder of Haystack, a venture capital firm that has backed companies like DoorDash and Instacart early on. He is a seasoned investor and writer with deep roots in Silicon Valley. @semilDan Lorenc is the founder and CEO of Chainguard, a startup focused on software supply chain security. Before founding Chainguard, he worked at Google, contributing to critical security projects like Sigstore and Kubernetes. @lorenc_danTBPN.com is made possible by:Ramp - https://ramp.comEight Sleep - https://eightsleep.com/tbpnWander - https://wander.com/tbpnPublic - https://public.comAdQuick - https://adquick.comBezel - https://getbezel.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(01:30) - Google's Earnings Power Holding Up Well (14:14) - Intel Says Layoffs are in Store (47:14) - The Relationship Between Netflix and The NFL (56:09) - Elon's Friends Sell Access to Stakes in Private Companies (01:06:29) - TBPN Reacts to Tech Polymarkets (01:13:42) - Karri Saarinen (01:34:22) - Sean Frank (02:03:51) - Semil Shah (02:32:02) - Dan Lorenc

You're watching at TVPN. Today is Friday, April 25th, 2025. We are live from the Temple of Technology, the Fortress of Finance, the Capital of Capital. Oh, I was in a particularly brutal board meeting with a venture capitalist got ugly. We've talked about how board meetings should be more confrontational. There should be a threat of physical violence. That's right. It brings out the best in people. It really does. It really does. Oh, you want me to pull forward my revenue projections? Are you willing to die? for that, let's duke it out. Let's go. Put it to the test. Let's go to a foreign country that allows duels and let's duel to the death. This is the future of technology. Technology is not for the week. Big opportunity for praxis is enabling duels. Yes. Yes. Many people would like to duel. I completely agree. But they don't have the legal framework to really do it here in America. There are, I have looked this up before. There are countries where you can go and duel to the

death legally. It's a little complicated. You got to fly out there. You have to get some permits. but you can do it. It does exist. And maybe we should bring it back. You never know. It would certainly make tech more interesting. It would make our job reporting on tech more interesting. But nothing's more interesting than earnings season, baby. Can I get a sound effect for earnings season? Google's earnings power holds up in global turbulence.

Google Tarrant Alphabet reports solid earnings, but tariff impact on second quarter results is still unclear from the Wall Street Journal. Google's earnings power is holding up while they're making money. They're printing. They reported operating income of $30.6 billion for the first quarter on Thursday, solidly being Wall Street forecasts of $28.7 billion. Revenue rose across the company's business units but was largely in line with analyst estimates. Capital expenditures reached a record $17.2 billion in the quarter.

Let's hear it for CAPEX. We're going to be training bigger models. Manager mode. Manager mode. For sure. Sundar might be goaded. He might be goaded. He might be goaded.

He doesn't do a lot of shows, doesn't do a lot of media. He's starting to go direct. He's starting to post on next a little bit more. People were saying if he resigns, does the stock pop. He did it while staying in place. Yep. And he deserves all the credit for it. He does.

So congratulations to everyone at Google, all the shareholders, all the employees, the founders. And this was breaking news yesterday. We announced that we are joining the war against Big Tech on the side of Big Tech. Yes. We are joining the war on Big Tech. on the side of being tech. And yeah. It must be protected.

Big tech must be protected at all costs. Just because we want to turn little technology companies into big tech. Yes. We still support big tech. Yes. Yes. We have a reverence. A reverence for beat.

Be very clear about that. So the stronger bottom line showed Google's resilience in a quarter that was marked by fears of an impending trade war and the effect that could have on the global economy. Alphabet share price rose 5% in after hours trading. Again, this is like a trillion dollar company. That's $50 billion. That'll get you 100 of Sergey Brin's yachts, which cost $500 million.

So he could buy 100 of those if he owned all of Alphabet. And Alphabet should. They should get 500 corporate yachts, in my opinion, 500 foot yachts. But those worries remain. One for every VP. If their VPs are anywhere as good as Ben, they all deserve half a billion dollar yachts. Yeah, everyone talks about. perks of working at Google, you get the sleep pods, you get the nap room, you get the free lunches.

Like, let's take it up a notch. All that stuff's old. Avoiding the only perk that matters, which is yacht. Yacht. Yes. Really, I mean, it's so played out. They've hit what feels like the logical conclusion of perks, right? Yeah.

Oh, yeah, free lunch. Oh, we'll walk your dog for you. Oh, there's yoga classes. Oh, there's a Google bus. I told you I spent a summer just eating at the Google cafeteria. Yeah? one of my fraternity brothers. Worked at Google for a summer,

and he spent the entire summer trading crypto. Fantastic. And when he would take a break while working for Google, to be clear. And oftentimes around dinner, he'd say, hey, do you want to come have lunch? And I enjoyed every salmon dinner that I had on Google's time. You know, people were upset about the Google bus that took, Google employees from San Francisco down to the Google headquarters in Silicon Valley, should have just cut out the whole street issue with the Google yacht that takes you from,

because it could take you down the bay. The Google yacht would be so much better. And the whole thing where they were vandalizing the Google buses, but it's so much harder to piracy. Maybe they could have hit some of their climate goals by using a sailboat. I love this. Yeah. A 500 foot sailboat, just sailing to work.

There are some people that actually sail across the bay if they live in Moran. which is pretty sweet. They ride their bike and then take the boat. It's not a sailboat. Yeah, yeah, yeah. It's nice. That's very. Anyway, people are still worried.

People don't think Sundar can do it. Google doesn't issue financial projections with its quarterly reports, which leaves it unclear how, just how, just how its business was affected by President Trump's April 2nd announcement of high tariffs, but the turbulence that has followed amid the ever-changing status of those tariffs. And the company's earnings on chief business officer, Google's chief business officer, Google's Chief Business Officer said it's too early to comment on trends for the current quarter. Now, Google doesn't manufacture a lot of stuff generally.

Of course, they have consumer products. They have Google Home devices. Those might be made in China. They have Google Android phones generally. They have a merch store too. Andrew Reed showed that Google has merch. And so I'm sure they have operations in China, but they seem much less exposed to Chinese tariffs than Apple. Yeah.

And so if Apple is hurting, the iPhone does wind up going to. $2,000 a phone, $3,000 a phone because of tariffs, well, that will probably drive even more people to buy Android phones, even if the Android phones are more expensive, because on a relative basis, they would be cheaper. And also, the phones seem to have been unaffected. Ben Thompson was talking about Tim Cook, and there's kind of dancing around this issue of, is Tim Cook the right CEO for Apple? He's 64 years old, so he's getting close to reasonable retirement age. I was going to say close to hitting his prime. Hitting his prime.

I agree. And I actually, I think I disagree with Ben Thompson on this. He was very shaken by the, there's something rotten in Cupertino report by his co-host of, what is this other podcast? Yeah, Daring Fireball. And so there's this big question about the big miss on Apple intelligence. Should that be serious calls? for concern that if Apple's not getting AI correct, do you need new leadership if AI is the most important thing in the world? But I think we learned from the tariff situation that in fact

supply chain is maybe the most important thing in the world and Tim Cook is world class at supply chain. And so it makes sense that he is at the helm. And I think any discussion of Tim Cook stepping out of Apple is too premature. I think maybe getting new product leaders to push Apple intelligence more aggressively makes sense. Supply chain expert at a point in time where we're dealing with really complex, you know, tariff policy and uncertainty. He's the perfect guy.

Yep. To be at the helm right now. Yep. Maybe not the perfect guy for five years from now. Yep. But we can just, you know, center on the press. And which would affect more, which would affect Apple worse?

If they truly lose the edge of, AI agent, Siri, you know, AI assistant landscape to the point where they need to open it up and they need to say, you can map your Siri button to any app and we're actually auctioning it off. And Google's going to bid, just like they did for the default search in Safari. And Open AI is going to bid. They'd probably make a ton of money from that. Maybe not capture all of it, but they'd capture a lot of value from that. And that might be a loss strategically for them that they wouldn't own consumer AI in the future. obviously consumer AI is something that you want to own.

So if they lost that, it wouldn't be good. But compare that to getting the tariff issue wrong, getting the supply chain wrong, not being able to deliver the product, delivering the product at three times the price. That is actually catastrophic versus, hey, there's this massively incremental technology and we have to partner with other big tech companies on it

like we did in search. I don't think it's that big of a deal. And so I'm pro Tim Cook in this case, at least for now. We'll see. But it's fun to watch it unfold. So Alphabet's operating income per quarter, just a hair off of peak. Of course, the Q4 season, I believe, is always strong. But they are rocketing towards over $30 billion in operating income every single quarter.

You love to see it. Their advertising revenue rose 8% to 66 billion, while cloud revenue jumped 28% year over year to 12.3. billion. Let's hear it for them. Congratulations everyone at Google. Both were declarations from the deceleration from the growth rates seen in the fourth quarter, but Google isn't blinking in its plans to invest aggressively in generative AI. The company maintained its plan to put $75 billion towards CAPEX this year more than double its annual average over the past five years. Of course, there's an acceleration there. The business is grown up and their risk on. Correct. A plus work on

the soundboard today, Jordy. The natural evolution of this is that I have a soundboard with thousands of effects and I just don't say any words. You don't say anything. You just, you just move from front office to back office. I'm just wearing an Apple Vision Pro and I'm just like hitting the reactions. That's great. So the Google didn't exactly face a high bar coming into Thursday's results. Alphabet stock has been flat over the past 12 months, lagging most of its mega cap tech peers on worries about its position in AI and the loss of two federal antitrust cases that could ultimately result in the company's breakup. Of course, everyone was saying Open AI is the disruptor to Google search. Maybe perplexity is going to take a run at Google. But people are still Googling stuff.

They're Googling stuff and then they're doing deep research reports separately and maybe that's chipping away, but it doesn't seem to be chipping away at earnings. Google seems to be Lindy in this case. So Alphabet also commands the lowest valuation multiple of the major tech giants with the stock trading at just 18 times projected earnings for the next four quarters compared to Microsoft at 28 times. The company said Thursday that it would boost its quarterly dividend to 5% to 21 cents a share, which comes a year after it initiated the payout. This, of course, was the famous criticism that Peter Thiel levied at Eric Schmidt on stage at that Fortune conference years ago. Do you remember this?

I had another thought jump into my head that's relevant, which is Netflix trading at a PE ratio around 50. 50. How frustrated you have to be as Google management when you look at Netflix and you're like intense competition from a bunch of different players. Totally. Obviously, you know, they basically own the entire market where they have everybody signed up. And the strategy now is just to just increase prices and reduce. costs or keep costs as is. But ultimately, when you look at the sort of underlying quality of these businesses, it just really says that the markets firmly believes that Google is at

extreme risk disruption of the core business model. But when we talk to people like Logan, which, who we had on the show Monday, who runs Google's AI studio, it's hard not to be generally bullish on what Google is doing an AI. Yeah, no, I agree. It's interesting the Netflix comparison, because by all accounts, you would have to assume that YouTube is just a better business. It is the final form of, you know,

all the best content goes there, the algorithm sorts it all out, sifts the wheat from the chaff, the really low effort videos get a couple views. They make a couple dollars, but the Mr. Beast videos get a hundred, million, 500 million views and generate millions of dollars in ad revenue. And it's all decentralized. It doesn't have any oversight. So there's no overhead there. There's no negotiation. Oh, we lost

this particular video. The videos go up. The clockwork and they have a subscription plus ad-based business model. They do. It's the same as the same. The other thing that I think is worth noting on Google is yes, chat GPT is a threat. Yes, there are people that are, chatting with chat GPT as an alternative to, you know, punching something into the Google search bar. But I look at it much more in the context of, you know, TikTok and Instagram. Yes, TikTok, you know, has taken away sort of usage from Instagram

and other meta products, but it certainly didn't kill either of them and they've still been able to find growth there. Well, speaking of Google's ad business, they're making tons of money, running ads. We're making money running ads and you can make money running ads on AdQuick. Out of home advertising made easy and measurable. Go to adquick.com. Let's kick it over to Intel. Intel cuts outlook says layoffs are in store. You hate to see it. The company posted a quarterly

loss on Thursday. They are the old guard. I think Intel and Google both raised money from Clare Perkins. I'm pretty sure. Maybe Sequoia is in both. those, but similar venture capitalists, very different stages of life as big tech companies. The company posted quarterly loss on Thursday and gave a weak revenue outlook, said it would lower its operating expense target this year by $500 million and would reduce it by a further $1 billion next year. This is on the tale of new chief executive officer, Lip Bhutan, beginning a turnaround effort, and we are excited to see what he does and how many pages he takes out.

of Straterey printouts because Ben Thompson has been playing armchair quarterback for the last decade, and maybe it's time for Intel to implement some of the Ben Thompson playbook. Not a bad idea at this point. Tan said in a letter to employees that layoffs would start this quarter and continue over several months, although he didn't quantify how many employees would be affected. That's pretty rough. That's brutal for the team. Some people are doing.

Yeah, we're going to be doing layoffs over a few months. I mean, I guess it's like no surprises and, hey, this is going to happen. and maybe you telegraph it early. They're also reducing capital spending by $2 billion down to $18 billion in total CAPEX. They're getting into, for this entire year. I mean, now they're spending less on CAPEX than Google is spending per quarter.

They spend less than a year than Google spends in a quarter. And it's like their whole business should be CAPEX, in my opinion, since they should be a fab, mostly. But of course, they also invest in design of semiconductors as well. And so there's been a slowdown in a job. gigantic manufacturing expansion undertaken by TAN's predecessor, Pat Gelsinger. Finance chief said tariffs were affecting the company in two ways. Customers rushed to buy electronics in anticipation of the tariffs, contributing to higher than expected revenue for the quarter. But looking

ahead, he said costs would increase and the market would contract as consumers and businesses face an uncertain economy. And Intel stock dropped by that 7% in after hours trading. The revenue is flat. We are so far from the rumors. last year that Elon was in the mix to actually buy Intel that felt like it would have been such a great timeline to be on. I still think it would have been so cool if the Chips Act was basically just, you know, structured as a, as a, you know, debt financing for an LBO and takeover, take private of Intel with Elon at the helm. I think that could have been a really, really great ending. And it would be so much less, it would be very easy for people to rally around

from an American perspective because it's so much less controversial than oh what's going on on X, it's the public square, is it left wing, is it right wing? This culture war effort is regardless of where you stand on the issue, it's clearly causing friction between Americans. Whereas if you get Elon

and he's just off making semiconductors and the semiconductors are getting cheaper. It's like, is this a left wing or right wing issue? We don't even know. It's like, yeah, he's cutting some jobs there, probably making it run more efficiently, but ultimately the goal is cheaper semiconductors. I think that's something everyone can get behind. Well, he made cheap cars.

Yeah. And then those got politicized. So, yeah, maybe anything's possible. Who knows? Anyway, sales rose 8% in the division that sells chips for data centers and AI, obviously, a rare bright spot amid the gloom, sales in its personal, computer chip division, its largest segment fell 8% to 7.6 billion. Its contract chip making business reported 4.7 billion of revenue up 7%. Intel also gave a forecast of roughly 11.8 billion

in revenue for its current quarter, lower than Wall Street's forecasts of around 12.8 billion. And so a lot of uncertainty. They are signaling to the market, hey, we're going through a transformation. We're going to be cutting costs. Revenue might dip, but hopefully we will emerge stronger. and we're rooting for you over at Intel. We would love to see Intel become a fantastic tech company as it has been throughout American history. It might need a new name, the American Super Computer SuperCorp. SuperCorp. I like that.

It really needs to follow the modern branding. Some of our new hard tech companies. Well, we'll see what Lip Bhutan winds up doing. Maybe he'll need to take out some ads to make the company. I wonder if he'll be at Leland. If he does a rebrand, he's going to have to buy a bunch of ads and we got to do an ad. What's our next ad for? Bezell.

Oh, fantastic. We've done some risk checks on various and various semiconductor CEOs. We've seen Lisa Sue over at AMD, rocking a Rolex. She is a collector. Lip Bhutan, I know you're listening. Get on Bezell. Pick up a watch. Go to getbezzle.com.

They got a bezel concierge for you, Lip. If Lip is not at Hill and Valley, that is bearish. Yeah, he should get out there to D.C. Hopefully he's there. We'll talk to him. He should be wearing an F.P. Jean. Yeah.

Or Richard Mill. That's right. A one of one. A one of one. A piece unique, ideally. Peace unique with a semiconductor right in there. That's right. That's right.

Anyway, we're moving on to. Nobody did a Blackwell watch. I know. It's like, I don't need the time. My phone tells the time, but I just want you to know that I have a, you know, I have a black well on my wrist. Blackwell on my wrist. That's really good.

I mean, did you see the Nvidia purse? That was pretty cool. Yeah, that was cool. That was great. And so someone took an Nvidia GPU and turned it into a purse that you can purchase for the technology sister, for technology girlfriend or wife. Great gift. Absolutely. Anyway, we're moving on to probably an even more important story in the tech world.

Yeah, this is big. A story about a man who built a house with room for 21 of his Porsches. Yep. He actually had one house. I can't tell you how many people sent this to us. Yeah, are in this scenario. This is great. Well, sent us his article and said, one, you have to cover this.

Yes, yes, yes. And the show wouldn't be complete without it. That's right. It wouldn't be a Friday show without something like this. Exactly, exactly. Here we are. So he wanted room for 21 of his Porsches. So he built a second house across.

the street as one does. Near Palm Springs, California, architect Stephen Harris spent millions designing a modern house equipped with an underground garage of his sports cars. He's a highly successful architect of houses and apartments and his husband, Lucian Rees Roberts, a prodigious interior designer, which we'll get into later. The interior design game is fascinating. There's trade deals happening all over the place. Big deals.

Big deals. They spend most week nights. And the lifestyle of these two bros is, top-notch. So they spend most weeknights in an elegantly appointed loft in Manhattan's Tribeca neighborhood. For weekends, they have a house called Galloway Hill. Always a good sign when your house has a name. You should always be naming your house.

That's in Kinderhook, New York. For vacations, there's a compound on an island in Croatia and a restored mid-century modern house in Rancho Mirage, California, eight miles southeast of Palm Springs. So they got, they got, you know, their fingers in every single. pie. Croatia is very underrated. Have you been? I haven't been. I've been to Greece. I would like a compound there at some point. I feel like Croatia is kind of knock off Greece. Is that the case? I don't know. Our two Croatian size lords are going to be giving you death threats. I don't know. I don't really leave the United States. I don't go to any of these like backwater developing nations regardless

of how scenic and luxurious they are. But good luck to them. I'm glad they built a compound on an island out there. For years, they were happy with those options, especially. Harris says because Rancho Mirage and their part of Croatia have perfectly reciprocal climates. That's pretty smart. Meaning that if it's the wrong time to visit, if it's the wrong time a year to visit one, it's the right time at the other, which is really smart. But there was more real estate to come. In 2016, a one acre lot directly across the street from the Rancho Mirage house came up for sale.

They purchased it for 800K with no plan, Harris says, other than to prevent someone else from building something hideous. I love it. It's like, how bad could it? have been like it's probably just going to be a normal house but they're like no it needs to be a real issue beautiful you're really design driven yeah i mean they don't necessarily control your neighbor's yard and so they're like we're not going to let you build some mcmansion up there we're not going to put the fake fake uh fake blinds on the outside so they found themselves wanting to spend more time in california

where their neighbors include theater folks like john robin bates and joe montello and television personalities kelly rippa and mark consuelos and they had solved one of the logistical problems of being bicostal. And this is the art of the deal, folks. If you're not doing deals like this, you are going to be left behind in the modern economy. This is Golden Retriever Max saying literally, taken literally. So you want to break it down, Jordi?

These two guys designed a client's private jet for free. Many of our listeners know and have gone through the process. When you buy a Gold Stream, you're not going to sort of necessarily take this sort of stock. interior. So they designed a client's jet for free in exchange for a promise to fly their yellow Labrador retriever Zoe between New York and California for the rest of her life. And one of the two guys always travel with her. And so this is why in the modern economy, you don't just want to be golden retriever maxing. You actually want to be a Labrador retriever. You need to be working out deals that allow your dog to fly private, fly private whenever they want the rest of their life.

exchange for a one-time service. One-time service. That really has no cost because you're just designing it. Yeah. So you're just like picking things. It's really just your time. It's just your time. So you swap your time. So I think this is potentially one of the greatest investment. It's one of the greatest investments of all time. Services based investment. Yes. We were talking about this. So with companies like Loyal, Celine, who we've talked about on the show, Loyal is working on life extension for dogs. And so, you know, how do you underwrite the price of private flights for a Labrador Retriever for the rest of their life? Well, you probably pull out an actuarial table like you're doing life insurance, right? And you say Labrador Retriever, how old is Zoe?

You know, five years old, probably lives to 10, 15. But with modern advances in science and artificial intelligence, dogs could be living hundreds of years. Yeah. Thousands of years. And so this could add up to billions of dollars of value. This could be the greatest The most interior design project ever. Of all time. Of all time. 100%. From a value capture standpoint.

It's genius. But it's also going to be incredibly inconvenient for whoever's private jet that is. Because imagine that the dog wants to get from New York to California on Tuesday. You're trying to take a meeting in D.C. Now you take off from LaGuardia and you're heading to L.A.X. Just to get to Reagan International. The dog basically runs your life.

The dog runs your life. I don't know who agreed. do this. It's absolutely insane. Yeah. They basically said this interior design service that I, that I'm a billionaire and I could just pay for is so priceless to me that I'm going to offer up my jet to the end of my days. I would expect the dog at this point to outlive the client himself. So anyways, going back to the house situation. Yes, yes, because the cars are equally important. important. There's 21 of these vintage Porsches. They bought the house they had bought is historically important so they couldn't modify it. And there are the pictures of the Porsches. And I love this because

so this garage is specifically designed 21 Porsches in the collection. You don't have to move a single car to select any of them. None of them are double parked. And so if you want to take the 1980s air cooled 9-11 out, you just grab those keys, you're good to go. Good to go. If you want to take the GC3RS, you're good to go. You don't have to shuffle them around. You don't need your personal valet. There's all good to go.

There's no stacking. There's a lot of people, Hoovie's garage. Have you ever seen Hoovee on YouTube? He has his garage stacked three high, basically. He's clearly not doing it right. He should have just built a 21-car garage where you can pull out any of them in any time. And so the new house would have two things. The old house didn't have a studio complete with skylight.

Rees Roberts is a third generation painter, and he would be painting in the studio with the skylight. And an underground garage where Harris, a serious collector of vintage Porsches, could store 21 of his favorites, all 9-11 RS models made by the company from 1973 to 2024. Wow. So it's the 9-11, I guess it's the 9-11 R.S.

every single year. So, wow. Unreal. Incredible. And such dedication. I mean, Steve Jobs had the same dedication where he would buy a new 9-11 every single year.

Right. And there's, but I mean, I guess he would like rotate that. I was in the Middle East once and got to see a private collection. And the collector had basically around 10 full-scale warehouses on his property.

And he would not just get, you know, a range rover every year. He would get every color that they made it from the manufacturer in that year. So it was literally like a rainbow collection where you'd walk into one of the warehouses. And it's just every single color of car in that year. And then you would do it for...

The next year. You'd do it for Ranger River. You'd do it for Land Rover. Wow. You do it for Ferrari. So that's true wealth because the depreciation on a Range Rover is insane, unlike some of these Porsches. Some of the vintage.

Some of them do pop. But so in the new house, he can slip away. to a studio when he wants, and Harris is able to keep more of his 50 prized vehicles in California where he likes to take them out for early morning jaunts. He said he drives every one of his Porsches. We'd love to see a car collector who puts miles on the cars, doesn't just keep them in the plastic. You've got to be dalying your kuntosh, your LM O2. It is a funny dynamic. Daily your super cars. If you have 50 cars in your collection, it's actually hard to put a meaningful amount of miles

Oh, totally. Spreading the love. Of course. And I mean, it's not like he's taking them to LA. He's probably just driving them around the neighborhood. You basically need a whole-time mechanic. Like having a collection once you get into that range and above. Yep.

You talk to anybody that. Jay Leno has like a whole team just for registration because there's new registration. Like every year, well, you have 50 cars that every single week you're doing registration and stuff. It's crazy. So even just one of his Porsche's, the 1984 9-11 SCRS, he's been offered more than $3 million for. He said, no. He said, I'm daily. way it. Yep. So they have no plans to live in the Palm Springs area until they

helped a couple, they had no plans to live there until a couple of friends, until they helped a couple of friends locate and renovate a house at a country club. And then in 2015, they heard about a house for sale and decided to buy it after a, after admiring its mid-century modern forms on Google Earth. They later learned it was designed by the prominent Palm Springs architect Donald Wexler. When they renovated the 1957 house, they returned it as closely as possible to the original appearance, a reverence for the classics. This guy seems like the man. The new house across the street is more than just luxury for the two men. It embodies everything Harris has learned in more than 40 years of designing gracious modern residences. Everything Rees Roberts

has learned from furnishing them almost always with a mix of important vintage pieces. And items of his own design. The two men work together on about three quarters of their projects. Each also accepts separate commissions. I love that. It's like, we'll work together, but you're paying us both. It's not a package deal. And also our dog's going to fly private forever.

I love it. It's the best. I love the journal for profiling these people. You just, you know, where else would you find this story? From the outside, the house is deliberately unimposing. There's no fence. The pool doesn't require one because the whole country club is fend. Harris explains.

Breeze Roberts and his landscape design partner, David Kelly, added topography to the previously flat site to match that of the golf course. They even gave the pool the shape of one of the courses nearby water hazards. The result is that the adjoining fairway seems to continue right to their front door. The club thinks of it more as a golf course, and we think we have more lawn. The club thinks of it as more golf course. We think of it as we have more lawn. Just don't do a long, you know, sort of,

phone call pacing around the backyard. Yeah, you might get smacked in the head. I like this. He calls it visual borrowing. And so when you blend your backyard into the golf course, it just feels like your backyard extends endlessly. Very, very cool. Inside, the house is light filled,

thanks to the oversized windows. To complete the landscaping, they splurged on over 100 palm olive and fruit trees at the cost of more than 300K. You'd love to see it. He's 72 years old, and he designed a lot of the furniture himself. Fantastic. Cool little backstory here.

Harris says, I don't think of myself as rich during his childhood in Northeastern Florida. He says it was hard for his parents to scrape together his high school tuition of $700. Some nights were spent flounder gigging, a method of fishing that involves waiting in need deep water with a car battery in a wash tub. This is amazing. And you're building a chat, GBT rapper, and you think you're scrappy. Yeah, this is different. level from flounder gigging to every single Porsche 9-11 he says i gotta repeat this a method of fishing that involves waiting in knee-deep water with a car battery and a wash tub attached to a tractor

headlight on a pole can we get the founder mode sound found it's so good uh so he went to architecture school at Princeton on a full scholarship and then 34 years he lived in a rent-stabilized loft on Harrison Street and Tribeca where the rent never went above $300. That's so insane to be pulling in like millions of dollars collecting like, oh yes, every single new Porsche 9-11 RS I buy and my rent is $300 a month. The landlord eventually asked him to leave but also hired him to convert the building into condos. He created a brand new penthouse that sold for over $18 million. Wow. Rees Roberts grew up in England and spent summers in the Spanish artist colony where he was fascinated by the work of Peter Harndon, an American architect who was modernizing old fisherman cottages for expats. He had undergraduate and graduate degrees from University of Cambridge. The two men working together in 1985. They married in 2013 together. Stephen Harris, architects, and Rees Roberts and partners have about 40 employees. What a small organization to create such a fantastic outcome. That's how many can fit in their Manhattan office buildings on Chamber Street, which is right across from the street, right across the street from their loft.

So the men don't plan on letting their firms get any bigger. While pouring millions into the new Rancho Mirage house, Harris says, my biggest fear is that we would like the old house better. But according to both men, that hasn't happened. The new house owes a lot to the old one, but it works much better for us. You'll love to see it. Fantastic. And, you know, in that house,

what type of bed should they be sleeping on? I think they should be sleeping on an eight sleep. Nights that fuel your best days. Every eight sleep guarantees an overnight success. They have an overnight success guarantee. So go to eightsleep.com, clinically backed sleep fitness. Let me guess, John.

You don't even want to look at your sleep. Oh, have you seen the new app? By the way, they shipped it. The new eight sleep app is actually incredible. You should download it. If you have an eight sleep, make sure you're updated. I think it's a way better design. I got a 91 last night, not bad.

I got a 96. 96, of course. And we were just texting with Brian, Brian Johnson. Brian Johnson. He's coming on the show in a little bit. And I sent him my sleep score from yesterday, and he said great job. Do you, Brian Johnson, is that the liver king? No, that's the other.

That's the other Brian Johnson. Yes. Oh, that's right. That's right. Well, we should have the both on. The sleep king. I would love to have the liver king on. Yeah, you would love to have the liver king on.

Yeah. But telling, having Brian. Johnson. When you posted that, I was like, this is the most dangerous post you've ever shared because he is normally so critical. And I was like, he's going to roast you for not being at 100. I mean, I hit it for work. Was it 100? It was 100. Oh, it's a hundred. But I had a feeling that he would dig into. Yeah. Yeah. That's like, that's like, that's not like, I thought, I thought he would dig into one of the submetrics and be like, secretly you're going to die tomorrow unless you change everything. Because he's normally just like so on top of it. He can just rip us.

shreds once he's on the show. I bet it'll be entertainment. Good. Yeah. Anyway, let's move on to another story in the mansion section of the Wall Street Journal. This is John's favorite section, by the way. This is the highlight of my week. Gene Simmons of Kiss lists his Beverly Hills house for $13.995 million. It's giving it away. But this is why it's funny. So he says he listed the house, but he's not going to sell to just anyone. He said, you have such wonderful times there. You don't want some schmuck in the place you call home. No drugs.

This is his quote. No drugs. No alcoholics. I don't want anybody coming in here who's going to destroy the place. Yes. I love he's selling it, but he's not letting go of control. Yes, yes. And I think we should enforce the exact same rule.

If you're an alcoholic, if you're on drugs, do not listen to TVPN. Unsubscribe. That's a little bit hard. If you are any of those things, as I chug Celsius, get help, and you're still welcome to listen to the show while you get on the right path. Yes, yes, yes. We're rooting for you. But don't try and bid on Gene Simmons' house because he wants you to clean it up before you spend $14 million. It is hilarious because it could be an awesome arc if you are.

Who is in, how can you have $14 million to buy a house and also be a schmuck? Like, it's very weird. You'd have to be a very, very high functioning alcoholic, right? I got to push back there. There's a lot of high functioning drug abusers in the world, John. I suppose. I hate to break your golden retriever mindset. It's been said I have the mind of a golden retriever.

And maybe I got this one wrong. Anyway, the house is beautiful. Four bedrooms, roughly 7,740 square foot home sits on a hill with views of Coldwater Canyon, Century City, and the Pacific Ocean. And so if you're in the market and you're, going to join us in Los Angeles. We are super bullish on Los Angeles. We think it's the future of media. We think it's potentially, if things go right, the Silicon Valley of media. Could be the home of entertainment. Could be the home of entertainment when we're done. And so check it out. Fantastic.

Simmons says, I'm the most blessed human being on the planet. These hard times, you don't want to say, I have too many houses, but we have too many properties, said Simmons. They have a house in Whistler, Canada, two homes in Malibu, two houses for their children, and they will be spending more time at their additional properties. Visiting, quote, whatever wife he wants, certainly, certainly, happy wife, happy life. Gene Simmons just sending it talking to a Wall Street Journal report. Just yapping. It's home, you know, outdoorsy.

Amenities include an art gallery space where he hangs his own artwork and a soundproofed home theater where Simmons said he screens movies for his production. company Simmons Hamilton Productions, which released the movie Deep Water in 2022. The home is outfitted with high-end smart home devices. It's like a 22nd century house, said Simmons. He's truly living in the future. I had to go out and buy a simple microwave so that I could press one button and heat things up because the coffee maker, the cappuccino maker, the time machine, all that stuff

was built into the wall. Voice activated, I might add. It was so complex. I couldn't make it work. He was like, yeah, just like get the nicest stuff. It was too complicated for them. This is what I've been saying about smart homes. Yes.

We want dumb homes. I would invest in a dumb home startup. Dumb homes. A bunch of knobs. Knobes. Yeah. Get teenage engineering in there. Yeah,

I want to be able to set the temperature in my home. That would be super cool. You know, like an odometer style thing. For sure. For sure. Yeah. Outside the half acre lot,

it has a solar paneled 40 foot black lined infinity pool and 1800 square feet of patio space. He said he likes sitting outside with his children and significant others. They eat popcorn and hot dogs and play the, adult card game cards against humanity. Of course we laugh our heads off, he said. It's amazing. I love this. They're describing his career. They say, the Kiss co-founder. He's the co-founder of the Kiss.

He's not just like in the band. Also known as the demon. He's known for wearing black and white makeup, spitting blood on stage. In addition to his work as a magician, he has a restaurant chain, a record label, a reality show, and other ventures. In the fourth quarter, luxury single family homes.

He really beat the allegations that like, you know, a metal, rock enthusiast, you know, become consumed by the devil. He's just like, I have a really blessed life. Yeah, I'm going to go wear some crazy makeup and spit some blood on stage and rock out. Yeah, they call me the demon. They call me the demon. But I really just want to play cards against humanity with my kids and eat hot dogs. And laugh my freaking head off.

It's amazing. Anyway, last, let's do one more ad. And then we'll move on to another ad for a Mississippi home. It's selling for $14 million. So let's tell you about, Numeral. We've called it before we called it AGI sales tax, God, magical sales tax intelligence from the heavens.

Let's take a moment to say thank you to Numeral, get on Numeral. And my company, Lucy, is officially a Numeral customer. I can't recommend it enough. We're dog fooding it here, golden retriever style. So anyway, the $14 million home in Mississippi that you probably have your eyes on, it's being listed by Brett Farr of the legendary quarterback, Green Bay Packers. And if you're looking for acreage, this is the spot. They have 465 acres for only $14 million.

Yeah. And, you know, there's a lot of, there's a lot of hubbub about new cities, new startup, startup cities across the globe. You don't have to go across the globe to build your 500-acre compound. You can just buy this one for 14 million. Yeah. Honestly, that's the strategy. Head to Silicon Valley, head to Sandhill Road. Hey, we need 20 mil.

We're going to build a new city. And then buy this and then just go live in it and be like, mission accomplished. We did our job. Well, we built the new town. Get residents to come in and pay you, you know, $5,000 a month to be part of the city. Yes, yes, yes. Citizenship flat tax. So just like throw parties?

No, basically get your ARR up. Okay. You know, into well into the seven figures. So it's not a complete fraud. Yeah. And then I imagine you could do a lot of other things. So Brett Farr was 55 years old now. He's the star quarterback.

He played 16 seasons of the Green Bay Packers, followed by one with the New York Jets and two with the Minnesota Vikings. Wow, 19 seasons in the NFL. He was definitely sleeping on an eight sleep. Oh, yeah, for sure. Early prototype, I would have. He retired in 2010 with one Super Bowl ring, and he joined the Pro Football Hall of Fame.

in 2016, just shortly after retiring. Pretty great. I grew up in Mississippi, and they used this roughly 465 acre property called Black Creek Farm, another named house. We love named houses on this show as a primary residence since the late 1990s, and there's a little bit of interesting history here about how they built this up over the last 20 years. And so the parcel was undeveloped when Favre bought it, said Callahan, among the first things they've. built was a structure with horse stables. We've been seeing a lot of folks in the technology journalism industry get into building horse stables because of all the generational wealth. And then a lot of post-exit founders also now following in the footsteps of the technology journalists getting

into equestrian dressage, et cetera. And so he built a structure with a horse stables on the first level and guest house on the second level. So smart. Yeah, I mean, this is this is top tier. This is the Playbook, exactly. He's run top-tier plays for Green Bay. Now he's running top-tier plays in the real estate market. And so they lived in the guest house while building the gated main home. That was 20,000 square feet, a very reasonable number. That was completed in 2002. And then they build another house, 5,000 square feet for the mother-in-law. You'll love to see it shown love to the rest of the family. Do you think this ends up getting a premium? I mean, to put this, to put the price $14 million for the 465 acre estate.

That's only 329 Tesla Model 3, which just feels very low to buy the home of a former Hall of Fame. Yeah, but for the same price, you could also get the Demon's House. You can get the Demon's House. Can we get the Ashton Hall sound? The Demon's House is available. But also this. I mean, these are really. But also, Brett Farv's house is.

Somewhere out there, somewhere out there, somebody's going to, like, just, you know, basically make a call. All right, I have 14 million to spend on a home. Yeah, which one are you going with? I'm either going to the demon or going to Mississippi. Yeah. Brett Farve has a nickname, but Pat McAfee got in a lot of trouble for calling him this. Do you remember this story? He called him the Sticky Finger Bandit.

Because of some legal trouble that Brett Farv got into, but Brett Farv denied any wrongdoing and the case is ongoing. So we will not be calling Brett. Farr of the Sticky Finger Bandit. But I love these nicknames. I love that we can say the demon. I don't know if I want to call Brett Farb the Sticky Finger Bandit because I don't know anything about the case.

I don't know if he's guilty. You don't know anything about sports, John. I don't know anything about sports, honestly. You thought UFC took place in a circle. I did, I did. But I've learned a lot more, and I love the United Fistakuff Championship now. I'm a huge fan.

I like the punching. I like the kicking. I like everything else that goes on in the hexagon. Anyway, moving on. The property has two ponds. Bo Nichols is going to be calling into the show early next week. He's got a big fight on May 3rd.

I already have my questions ready. I'm going to be like, which one was better? UFC 375 or UFC 524. You know, I've been doing the deep dives. I'm going to get the answer from him. I'm going to have him break down the greatest moments of the last thousand UFC's and tell us how it all works. So this house has two ponds,

one spanning roughly 3.5 acres and the other spanning two acres. Those are pretty big ponds. Farve enjoys recreational hunting on the property. That's pretty cool. It has an array of wildlife, including white-tailed deer, wild turkey and dove.

It's so easy to tell when you get so into a story that you're like, okay, actually we need to go back. You can't just leave us hanging here. You can't talk about this home and not talk about the ponds. Anyway, speaking of Favv,

let's do an ad and then we'll tell you more about the NFL. We'll bring it back to Netflix. So, Polymarket, get on Polymarket. We're going to be doing a Polymarket deep dive later in the show. Stay tuned for that. We're reviewing the top eight polymarket markets that we are tracking in technology. Anyway, the information has a deep dive. The big read. When I think of the information, I think of sports. And so that's why we're going to be talking about this article today. I'm very excited. Yeah, people often call the information like the, it's like the tech crunch of sports, right? Yeah. The NFL loves Netflix, but does Netflix want to love the NFL?

The assumption has been that the streamers will need sports as much as the leagues need the streamers. The reality is more complicated. We talked about F1, U.S. Same thing. Trying to sell the U.S. television rights to Netflix. Netflix kind of balking at the price and saying not interested. who knows a deal could still happen but it seems like there's a mismatch between the league's expectation from a pricing standpoint and what the streaming platforms are willing to pay given again that they're sort of at like peak

market saturation there's you know babies are being born that will someday sign up for Netflix yeah yeah we covered this on Netflix earnings yeah like Netflix has great penetration and sports are important, but sports historically have been the thing that keeps people from cutting the cord. And if you just include it in Netflix, it's not that additive. And so there's a big question of what is the true value of live sports for Netflix. Now, Hulu went really big into live sports. They have a whole campaign around that. Of course, owned by Disney now. But Disney also owns ESPN. So there's a whole flywheel there. So there was a gathering at the Breaker's Hotel in Palm Beach, Florida, where the NFL was hosting its annual owners meeting. The conclave is a big deal

for the league, an occasion for it to hash out its multi-billion dollar business deals and discuss what the future may hold. The latest gathering, which lasted over four days, had a notable first-time guest. Ted Sarandos, the co-CEO of Netflix, an absolute dog. Is there another tech company anywhere near the size of Netflix that has co-CEOs? It's very rare. It's very, very rare. Public, but they're private. Yeah, exactly. But I would put them in the same league is Netflix in terms of just overall amazing. Market dominance. Exactly.

He came for a panel discussion about sports on streaming video services like Netflix and the league revealed that Netflix would air two Christmas games, two Christmas Day games in 2025, just as it did in 2024. Everyone knew Netflix would do at least one Christmas game as part of a three-year deal that began with a pair of Christmas matches last year. the first NFL games ever broadcast on Netflix, but the deal requires Netflix to air one game per year. So now they're doing two.

So they're going a little bit deeper. The media world saw the decision to have two games as Netflix's acknowledgement that it's interested in nurturing its nascent relationship with the league after decades of resisting live sports. For the league's part, it couldn't be happier. We're now in a world where there are some platforms that are doing one deal, that are doing one deal you tap into global scale. the NFL's chief media and business officer said,

Netflix is one of them. Amazon is certainly becoming that, and YouTube is certainly becoming that. Right now, the league is trying to find a marquee home for an opening week game on September 5th in Brazil. And while it might go to a TV network,

a streamer like Netflix is probably more likely, since those companies have greater interest in international audiences. We talked about this with Netflix, adding users internationally and more money to spend. And that's, that is a change. in the sports world, in the sports world that is upon us.

And for us, it comes at a good time as we think about global distribution. And so it'll be interesting to follow what happens with all of these different sports leagues and where they end up. I do think that eventually they have to each, each sports league has to find a home on a streamer just because I don't see young people ever going back

and uncutting the cord and getting on cable, right? Traditional cable, yeah. And so it will either be the, the Gen Z kids never get into sports, really, or the league's figure out of the distribution. Well, their testosterone has been cut by 80%. Yeah, Cali Nienes is really not mincing words of the younger generation. Gen Alpha is not so alpha as it stands.

Yep. Anyway, is there anything else you want to cover on the NFL and Netflix? No, I'm interested to see how this plays out. I mean, right now it feels like a pretty bad fan experience. if you're having to kind of like bounce around. Yep. And Netflix has a lot of really cool. I mean, Netflix has a lot of really cool technology.

Did you ever watch, what was that called, Balder Dash or something? Baldr snatch or something? They had a choose-your-own-adventure video. It was kind of Black Mirror. I think it was directed by the Black Mirror team or something. So you're saying Netflix should allow sort of create AI-generated fan fiction of games where you can create a reality where your team wins every time. Is that what you're about to say, yeah, yeah, exactly, exactly.

No, I mean, on a serious note, there are... Your team's just losing and it's like, do you want to see the final five minutes where they win? And then, yes. That would save a lot of households, you know. It would. It would. Oh, like, yeah. Husbands not.

Dad's going to be in a bad mood unless the Packers win. Let's just put on the good ending. No, I mean, I do think Netflix has embraced technology in obviously a very, you know, unique way. And there are interesting things that you can do over a streaming platform. that you can't do over the air. And so that's things like letting the user choose the camera angle, letting the user choose, you know, even subtitles, dubbing these different things.

I made a YouTube video a couple of years ago about how with the advances in artificial intelligence and wave to lip, which is an AI model that remaps the lips to a waveform, I think this is what Tyler used to make Delian speak Chinese yesterday. Can we pull that video out? Yeah, can we pull up the Delian speaking Chinese on TBPN? And, yeah, drop it in the bangers tab.

But I was very bullish on Netflix, in particular, being able to redub every single piece of content with matching lip movements, because I'd watched a German show about time travel called Dark on Netflix, and I was just too Golden Retriever-Brained. I couldn't get into it, because I didn't want to read the subtitles,

but the dubs didn't match up with the lips, and so it was very jarring. And so there's always this big debate about dubs versus subs. Are you dubbing the words over, or are you using subtitles? Let's see Dallian. The shan-

The last year's history is the first of the y'clock. But then, then, the first time, it was a number of years. I think the first one-euvre map up really well. And then from that period, he just went on the key stoolemen.

This is so insane. Wannionion's way way way And then The end It's very Ponged They're going to

Wow, we're here There's a very good Okay, that's enough of this. I think It's really funny

when he gets to like the chat GPT thing too because he keeps like not trit It doesn't translate those words All I have to say

Delian Well huns she won Pizio Let the audience figure out what that means Yeah and so I was really bullish on

Netflix basically doing exactly that what Tyler was able to do probably in an hour. I doubt knowing how crack Tyler is. It's probably five minutes, honestly. But doing that for every Netflix show.

And Mr. Beast has been doing this with localization of all of his content. Netflix is in a unique position to do that for all of their content and make it even more accessible internationally. That's obviously an incremental source of revenue for them. And then there's a whole bunch of other things that you can imagine Netflix offering unique

experiences to NFL fans, whether that's the ability to switch between different games very quickly. Have you ever watched NFL Red Zone? There was a specific channel that would switch from one game to it. It's all the channel. So it would switch from any game that has an exciting moment. It would just cut over to that. And that's something that they were able to do. It's just a team managing all the streams. But you can imagine a whole bunch of different versions of that. Members of the community that are huge NFL fans are going to be like, oh, great. So John's explaining red zone. Yeah.

This is just great. Anyway, why don't we move on to an ad and then we'll move on to explaining how SPVs work. So before, after the SPVs happen, the companies go public. Oh, I hear the sound of F1. Oh, is that public dot com? The latest sponsor of Aston Martin, F1 team? Love to see it.

Go to public.com. Go to the website, create an account, transfer some money in, get set up, and then start hunting for those Aston Martin cars. They're not easy to find, but if you dig around, you can definitely find them and you can enter to win. And so get on public.com. Anyway, before companies go public, they are private and they're doing a lot of SBVs. And the Wall Street Journal has a little piece about a side hustle for friends of Elon Musk selling access to stakes in his private companies. Lucrative stock deals have allowed SpaceX to avoid public scrutiny, even as it has grown into one of the largest companies in the United States.

And we might have to put this in the truth zone. But let's break it down. Truth zone. Interesting things here. So Antonio Gracios and Elon Musk go way back. The Valor Equity Partners founder and family. And his family spend their Christmases with Musk and vacation with him in the Bahamas and Jackson Hole, Wyoming for Grosios.

It has been a lucrative relationship. He has become a multi-billionaire in part by investing in nearly all of Musk's companies over the years according to public filings and court documents. Now, Gracias and his firm have found another way to cash in on his status in Musk's inner circle by selling wealthy outsiders access to tightly controlled shares in Musk's privately held company. Jordi, do you want to give us a little 101 on how SPV hustling goes down? I've heard it's very much like club promotion. Is that an apt analogy?

Yeah. So the average SPV promoter is similar to a club promoter. where they hit you up and they say, hey, coming around later? You want a bottle? You want a table? What's going on? No, I think that analogy is accurate for some SPV leads, but certainly for not all. Not for all.

And yeah, I just thought this, the attacks are, you know, continuing to rain down on Elon from all over the internet. Yes. And I thought the idea that, you know, the dynamic that's happening here is a very similar dynamic to what happens at pretty much every single private company. Yep. In which management teams and CEOs prefer to fundraise from people that they have longstanding relationships with, oftentimes personal relationships with. And so nothing about this article should be surprising. I mean, I think that, again, over time, people have. have joked about the idea of, I'm an investor in SpaceX and your investor in sort of like layers

SPVs with high fees. And ultimately, the SpaceX has performed so well that you're still up massively unless you were really, really layered. And so I think investors have done fine in this. And I think that in general, this is just a function of there being so much demand for SpaceX shares that these types of fee structures work. The only thing that stood out that was interesting is that Valor was sort of bundling SpaceX and XAI shares in a single vehicle offering, you know, basically doing a $1 billion raise.

About 25% of that was XAI. So I think that could be more of a function of they're just being outsized demand for SpaceX and less. and basically forcing people to say, like, you don't really have an option. Interesting. You're buying both. That's at least the way I read it. Don't have any inside information.

I think there's kind of two points on SPVs that are interesting. One is that at the ultra-growth stage centicorn level, the fundraisers are the same size as large venture capital fund. And so you might go raise a $2 billion growth fund, and that might be a huge size-gong moment, and you deploy that over a number of years. It's a 10-year fund, and you're expected to have a diverse range of investments across the portfolio.

But when you're talking about raising $2 billion, you're talking to LPs that are writing huge checks, and those LPs might be fine making effectively a direct investment into SPV, and they treat it just like a growth fund. And they're just saying, yes, I'm writing a billion-dollar check. I'm writing $100 million check, but instead of going into a growth fund,

just going into SpaceX with this. So that makes sense. On the flip side, I think why SBVs get a bad rep sometimes is that they're assigned at the lower level. If you're doing a $1 million SPV into a $10 million raise, there's just a question about like, wait, there are so many venture capital firms that could just fill out this entire $10 million round. Like, why do we need an SPV?

Yeah. It makes sense why you need an SPV for SpaceX if they're raising $10 billion or something that, you know, you don't want to suck up an entire growth fund. And to be clear, Valor and some of the other firms that do this are providing a service in a way to SpaceX because SpaceX doesn't want to have tons of individual shareholders that are going to say, hey, like, what's the update, however things are going. It's not just that. It's also legal. So one of the ways SpaceX has been able to maintain its private status is by limiting its investor-based. Once there are 2,000 holders of record, not including employees who own shares through stock compensation packages, a company is legally responsible.

required to disclose financial information similar to a public company. And so there was always a fear that if you raised money from a VC and then you ran your company for 10 years, they distribute the shares out and they have more than 2,000 LPs. I think this number might have been lower earlier too. But if they distribute their LPs and you wind up with 2,000 holders of record because you've done so many different raises and so many different party rounds that you wind up at 2,000 holder of record, you could be running a small company. that now has to disclose financial information similar to a public company.

That could be very problematic. And so SPVs have always been a way to kind of tie a bow around a group of holders and layer these structures. And I think that it's overall fine and doesn't seem like a big deal. But obviously it's of interest and newsworthy because SpaceX is an interesting company. Elon Musk is an interesting founder. And these deals often don't get exposed. Yeah, what the journal doesn't mention is that even if these investors

were just investing directly, SpaceX can't do general solicitation as a private company. Yep. And the other factors, you still have to be an accredited investor even to invest in these SPVs. And in fact, I think these SVVs probably have much more firm accreditation checks than other SPVs that might be investing into figure as an example. Yep. So, yeah, there's some little bit behind the scenes. text from the Twitter deal. Venture capitalist David Sacks texted Musk in 2022 after Musk asked if he

would invest in Twitter. I am personally in and will raise an SPV2 if that works for you. And so good, good communication there from the investor saying, hey, I'm open to doing an SPV. I would love to do that for you, but only if it's helpful. And then on the flip side of that, Musk accused Twitter investor Jason Calicanis of marketing a SPV to Randos during the first Twitter fundraise. SPVs are how everyone is doing these deals now. Calacanus responded, but tensions were flaring at that moment, but it seems like they have resolved. And so the sale of these SBVs generates fees, of course, and UBS is also getting in on the action because UBS, Swiss Bank, marketing of a deal through its wealth management.

if the article was UBS and Valor Equity offer shares in SpaceX to their client base. Yeah, it's not even tied to a new mark, which would be more interesting to hear about, oh, well, like, you know, there's new revenue numbers or there's new, new, on the back of some change in the business, the company's worth more. It's more just like, hey, SpaceX does these a couple times a year. Yeah. Right. Yeah.

Yeah. Yeah. I mean, Elon's been a master of, uh, of, uh, of ensuring, liquidity to early employees because we've talked to a lot of the early SpaceX employees and investors and they've been in the company for 20 years now it's a 2005 company and so even if you're totally bought it on SpaceX and you work there for a decade from 2005 to 2015 you took immense risk you got comped for that in in stock at some point you're gonna want to put your kids through

college or buy a house and so having some liquidity makes a ton of sense or start a 3D printing company yes I love that. Let's recycle the capital and let all the SpaceX alumni go build fantastic companies. They're very, very interesting. Let's do it. They also profile. Luke Nosek, a SpaceX board member who worked with Musk at PayPal before joining Peter Thiel's Founders Fund in 2006.

He and Musk remained close, sometimes attending game nights in Austin where they played Werewolf, which pits villagers against monsters, according to a person who knows them. Someone leaked to the journal that they're playing, essentially, board games. Very fun. NOSIC founded Gigafund in 2017 and has purchased roughly $1 billion in secondary sales of SpaceX shares. Probably a great fund in that case. It's pretty good. Gigafund.

Best name so far. Gigafund is a great name. It's a great name. This is interesting. MySpace co-founder, Berman, is getting in on the action. You don't hear about the MySpace mafia very often, but he frequently gets slugs of shares when SpaceX sells them on behalf of employees and earlier investors. His firm Troy Capital invested part of a $47 million fund in secondary sales in SpaceX stock in 2022, when the company was valued at roughly $127 billion.

And so that investment is probably doing very well. Fisner Wolfson, an early investor in SpaceX and a friend of Founders Fund founder Peter Thiel, another close associate of Musk also often gets SpaceX shares for his fund, 137 Ventures Management. And so fantastic to see the boys ripping some SVVs. you love to see it, and you love some capital flowing into important companies that are doing great things in space and beyond. Love it. Should we talk about some markets? Yes, let's go to our polymarket analysis for the day and debate some of these. The first one is the largest company

at the end of April, and Apple seems to be running away with it. It's April 25th. Only five more days if Microsoft wants to catch up, but it was a knockout, drag out fight. Mid-month, month on April 10th, Microsoft was actually expected to be the number one biggest company. And what did Tim do? He cooked. He cooked. He cooked. And so everyone else is left behind the options are Apple, Microsoft, Nvidia, and Amazon.

What would it take for Microsoft, Nvidia, or Amazon to flip Apple next month? I think you've got to see crazy tariffs on Apple that actually stick and hurt iPhone prices and sales. And you need to see increased AI demand for Nvidia to do it, something with Amazon. I'm not exactly sure what would be the catalyst there. Nvidia is the one that could pop,

I feel like, if all of a sudden there's a news of a GPT5 where the whole rumor about the pre-training scaling wall and GPT 4.5 not being that great. If all of a sudden the game's back on, scale is all you need, bitter lesson comes back in the meme, in the meta,

and all of a sudden it says, no, you actually do need to build a $500 billion data center. You need to build a $5 trillion data center, and everyone is taking it seriously. Everyone is scale-pilled, a GI-pilled. You could see NVIDO maybe pop. But this is not financial advice. We're just debating the markets.

I don't know. Anyway, the next-news. The next market is, what will Michael Sayler say during strategy Q1, 20, 25 earnings call. And I like this because it's not just that he'll say Bitcoin, it's that he will say Bitcoin more than 100 times in a single earnings call. They know he's going to say Bitcoin, but will he say Bitcoin 100 times? And there's a 20% chance, according to the Polymarket,

that Michael Saylor will say Bitcoin 100 times or more. Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin. But he's also got a lot of Bitcoin. Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin. There is a 9% chance that he will say, a billion, 50 times or more. Crypto at 7 plus. I've actually, have you ever listened to a sailor call? Strategy. We should, uh, oh, is it no longer micro strategy? Is it just strategy? Drop the micro. Drop the micro. Drop the micro. It's a large. It's a giga strategy. China is at 50%. Inflation is at 56%. Invidia is at 34%.

percent, lots of, lots of people getting on the action. Some of these are very low volume. Interest rate is just $374.00. But like if you go to strategy, you got dot com, by the way. Yep. It's just a bunch of basically, it's basically a big ticker that shows their market cap, their share price, their six-month or three-month return. As it should be. And, yeah, it is interesting that he's stuck with it in the face of Bitcoin ETFs and why, Bitcoin availability. There was a big discussion for a long time of like, how do the public markets get access to Bitcoin? Maybe micro strategy is just a wrapper around that. It's okay. But he's stuck with it. And so it'll be fun to see what happens with the, with his earnings call. The next market is

asked by us, actually, TBPN. Will chat GPT reach one billion monthly active users in 2025? The volume started small. It's climbing. It's now at $76,000. You can go on polymarket and express your view. Yeah, the numbers have been kind of all over the board. Sometimes they talk about weekly actives. A lot of people like to look at similar web and other data sources for information.

But ultimately, I think this will be such a significant milestone that they will come out and announce it themselves. And I would like to hopefully this market gets, it matures. And then hopefully people who interview Sam towards the end of the year will just ask him. Like, hey, are you over or under a billion MAUs in 2025? Did you hit this milestone? And this does seem like a milestone that might get up. Yeah. And he said, I think he said recently that somewhere around 10% of the world uses chat GPT on a monthly basis.

Yep, that's 800 million. Right there. So we're getting close. We're in a hair's breadth. And this is just such an impossible number almost. Yeah, but you add another studio Ghibli moment where it onboards a bunch of people. You just add more viral loops of sharing. Maybe they do the social network thing.

And we actually do have more OpenAI news that we're tracking here. Will OpenAI acquire windsurf before August? It's at a 52% chance now. 50% than I would have thought. Yeah. headline that was initially reported was not a confirmed deal that was a publication kind of like front running something and this happens before yep it's very common for uh media outlets to basically get word that a deal is in the works and then just announce it yep and it's not necessarily a dumb deal

sometimes a term sheet hasn't even been signed um and so it can actually put a lot of it we saw this with Whiz, where there was rumors of an acquisition that happened earlier and they denied it and it wound up not happening. And there's been other times when companies have, it feels like they've maybe deliberately leaked news to kick off a fundraising round. There's a bunch of different things that can go on. Staying in the AI model race, which company has the best AI model by the end of June 30th? Google is at 45%. Open AI is at just 25%. And it's a little bit odd because, the reviews of of GPT-O3, 4.5 have been remarkably good. Well, this is June 30th, to be clear, not April 30th.

Yeah, yeah, sure. So we're two months out. And you get a little bit of like a yield curve when you compare these different, these different time periods. And so a lot of it's driven by when developer conferences happen, when new releases are expected to happen. So if Google, for example, has Google I.O. in mid-June and you know that they're going to drop something then, well, it might be a new model. Well, they might just blow out the benchmarks. Meta is sitting at 2% right now and you know that Zuck is just absolutely fuming every single day if not having the best model.

Especially since this is based mostly on benchmarks. I don't think this is based on vibes. It's certainly not based on vibes. Although some of the benchmarks are kind of vibe-based, like L.M. Arena seems to be like a measure of vibes, kind of. But it's a big market, over almost one and a half million dollars in volume on the polymarket for which company has the best AI model on J. Yeah, it's interesting to just watch the graph and just see like, okay, on a longer time horizon, it just becomes very unpredictable, you know, who's going to actually be in the best spot. Well, we have the CEO of Linear coming in. Let's bring him in.

Who is our most recent partner? What's going on? How you doing? Okay, thanks for having me shows on the show. Of course. It's great to have you. It's great to have you a partner on the show as well. It's fantastic. Yeah, I've been like following you guys along from the very beginning. I think like you really have a kind of interesting concept. And like I think like some people are going for that three hour podcast. But I think like I like you guys are going for them more like shorter content as well. Three hours a day. There's something for everybody. Yeah. It's fantastic.

Well, yeah, there's tons of stuff to talk about. I think we'll probably see you up in. in SF next week, potentially. The week after, the week after for Figma's event. But yeah, why don't you give a quick introduction for everybody that's not familiar that maybe hasn't used linear in the past like us, and then we'll go from there. Sure. So yeah, I'm Karis Arnan. I'm the CEO of Linear.

And Linear is basically this purpose-built tool for planning and building software or products. And we've been building this the last five years. and what we're really doing for the product organizations and companies is that we're helping them with the end-to-end workflow from like going from customer discovery like collecting customer requests into planning roadmaps planning projects then executing on those projects and tasks so we're trying to like be this like really understand the customer's workflow here that what it takes for these different people in the organization to do their job well and how can we streamline it or make it make it easier for them And today we have about over 10,000 companies as customers. And like these can be anything from like ambitious startups to major enterprises. And I think like if you think anyone building something cool today, they're probably building it with linear. So open AI scale, your sponsor, ramp, I think Mercury,

probably a lot of logos that you see at the bottom on the screen. There are our customers as well. So I think like for me, or for us, it's been really excellent. like working with this very forward-looking companies. And like they're always like thinking like how they can do things better. And I think like you probably talk about this a lot on a show that I think AI is the topic that like AI is changing the way we do work or how we like how people do it. Their personal work, but also like how the organization should operate. And I think like a lot of XX and CEOs and CTOs are now pushing it to their companies that, hey, we need to use more AI.

Because we do believe that it can make us more productive and more efficient. When did you know you wanted to start linear, you were founding designer at Coinbase, and then you're over at Airbnb. I imagine you were pretty frustrated with the tools at the time and had a kind of concept for what you wanted to build, but I'm curious at what point it really clicked. I mean, in the end, it clicked with my co-founders.

I think we're all kind of frustrated at the same time. So I think we had this, like a time where we all worked on in our companies for like four years or so. And we're like, well, what do we do next? And I think like we're also frustrated that each of the companies we ever worked at these tools never felt that good. And especially it didn't feel, feel good for builders like us. Like when we like maybe that the tools were okay for the management and,

and like the some of the other people in the company or but like for designers and engineers. Yeah, it's very different if you're just kind of like looking at a dashboard as an exact and you're just kind of like monitoring the situation. But when you're the person that has to you sort of like use the tool constantly and sort of be generating the content in the tool, it's just a dramatically different experience. I remember my last company, when our first employee joined, this guy branded Jacoby who had been at Cash App and Square and joined to lead design and product, he literally set up a linear account on the first day because he was just like, we're never, we're not going to use anything else. It would just be insane.

So I'm curious, we talk a lot about venture markets broadly. I think you guys have taken a pretty unique approach and sort of like building, you know, being a sort of default tool, and I'm sure over time getting an immense amount of pressure from investors to take on more and more and more capital. Yet I feel like you guys have had kind of like a efficiency ethos from day one. Can you talk about your kind of just like mindset when it came to when the right moments were to raise and what went into that? Yeah. So, so I think the ethos of the company is like what we really try to do is like we want to be the best tool for this purpose and this market. And I think that's the way we win and that's kind of like the strategy we have. And for me, being a best tool

means that you also need to be a quality tool, like a high quality tool. I don't think like you can be the best tool if it's like that the quality is kind of low. So to do that, I think like sometimes companies get themselves or startups get themselves into this stage where it's like you just have to like work on the growth metrics because you need to raise the next round. Like we were fortunate that we didn't have to do that. Like we could hit the we hit the market pretty well and like we got like companies starting to use us like in the first year. And and we started getting revenue pretty quickly. And And then given that we also had this quality mindset, like we always saw that we worked at the Airbnb and Uber and Coinbase that like, and the amount of people doesn't necessarily generate the quality. A lot of times when we are actually trying to build something new or something really like good is it was a small team.

And so we took that lesson that like, hey, can we just build better with the smaller team? So that's great. So like situations like our costs are lower. But then also like we were able to like start generating a revenue so that we actually started. we became profitable the second year and we've been profitable ever since. So then the last like four years or so. And so what it creates is like we can have a little more control of our destiny of like we don't have to work for the round.

All of the rounds have happened because we felt that like there's now like a good moment of bringing someone new in like we are in this new. I think with the seed, I think obviously there's some like. well, we should like, let's say, go ahead our C. So I think there's some like a brand aspect of that. Like, hey, we are like a real company now and we have like real backers. And then some of the other like serious A and B has been about, hey, we are now like entering this new segment.

It's a little bit uncertain like what's going to happen. We're getting this larger customers and maybe we need to invest more into sales. So like I don't, I don't, the profitability is not like the number one goal of the company. Like still the growth is. but what it allows us is like it gives us a little more like flexibility. How do we go after it versus like, well, I'm running out of money like in six months. Now I have to like go figure out how do we put the numbers up so I can like raise a good round.

One unique part of your company in that it feels very core to the culture. You guys are remote, remote only. And then you simultaneously, I think probably one of the reasons that works so well, you guys focus on hiring very, very senior people. Do those two things go hand in hand, or are they sort of separate and both have their own reasons? Yeah, I would say, like, there's some link there. And I think, like, kind of like from the perspective, we wanted to have more, like, kind of like a talent density. So you have smaller team and like better talent.

So I think that talks about like that kind of goes into this more like senior people. I think remote, it is a type of mode of working where you have to trust the employees to like figure things out on their own. And usually that develops a little bit later in the career. It doesn't mean that like junior people wouldn't have that, but it's like just more, just happens more. And like as you get more experience. I think it's, today we are like hiring more more juniors. And I think the in the end, like the remote to me is, that there's a lot more focus on the actual work.

I think when you're in a company in an office, there's all kinds of things going on. And people have like crazy ideas all the time. Some of those ideas maybe are very good, but sometimes people end up or startup might end up kind of tacking a lot. Like they're like constantly changing the direction versus remote. It's a little bit, the management is a little harder. Like it's harder to like, it's almost like hurting people to the direction.

So you have to do it more like, this is the plan. and this strategy. And then you need to let the people to execute on that. And so you're going to have to trust people's judgment. So that's what we try to hire for is like hire people in all positions that like, if we if we get no instructions from us directly, then like could you figure this out and could you like make something good? About a decade ago, I was running an engineering organization. I think we were using Trello or Asana. I'd love to know kind of like what is what What does your battle card look like today? And what was the feature or pitch to get organizations that maybe already had some sort of product in place to switch over?

Like, what was the killer go-to-market motion? I think part of it not to jump in is that if a designer or a product manager moves to a company that doesn't use linear, the first thing they tell the hiring manager, I won't join unless you can have to. to switching the linear, but, uh, car, go for it. Yeah. I mean, that's, I think that in the end, that's kind of like it. Like it's the word of mouth. So I like, I think obviously that doesn't happen and just automatically. Yeah.

So like it's, it's been like interesting that there hasn't been necessarily like just one thing, but there's some, some kind of these kind of tools are in some ways simple and some ways complex. There's like a lot of things that people do different things people do in a product, different roles use it. So like a lot of things needs to go right. And I think our lessons like using these tools for a long time is like one, it's like speed. It's like it's really annoying if things are slow. Like if you're trying to like do a little task and it takes like every time it takes like a minute to do it or you're confused or even how to do it, that means like you probably won't use the tool

that much. Like engineer will just well whatever. I'll go there once a week to update my status. It's the worst. Having like dead project management software, product management software that's like, hey, we paid for this. We have it. It's my dashboard into what's going on and no one's updating and you got to go around and be like, everyone, you got to update. Yeah, bad. Jordi, you got a question. You guys had an agent-focused launch recently. I'm curious to, you guys are a company that historically is less fixated on sort of chasing trends, right? Like you know what you're building, the best platform to plan. and build products. And so when a new trend pops up, you're not sort of automatically piling into it at the same time. So in that context, I think, you know, having this new focus on agents is probably a reaction to what you're seeing from customers, what you guys are doing internally. I'm curious how you kind of, to get your thoughts on where agents are today in a sort of workplace environment and kind of how you see them evolving over time just because you guys are in a position again where you're not, you know, trying to raise a billion dollars

selling, you know, a dream around agents. You're just trying to build great products. And so I think it's more real grounded context. Yeah, I think like we definitely have followed the like AI what's been happening and experimenting on things. But we like a lot of times we we do talk to the customers. And that's kind of like what we see now that they're, a lot more interest and demand for this. And then also, I think the last couple of years, the models have gotten better. And we're now like starting to see like this like agent,

like companies building agents and like agents. I think people are fighting like what the actual definition is. But I think to me what it means is that this kind of AI model or system can take some kind of form and or like a shape in this tools and or outside of the tools. And they, you can start. delegating things to them. And so like in our context, it could be like, obviously there's a bug being reported. Maybe the agent can see that this is a bug that can, they can solve pretty confidently. And they could just say, like, hey, I can solve this. And then someone, some human like,

approves that. Or like, as an engineer, like an ICA individual contributor can, can just look at their task and say, like, hey, I'm going to try to delegate some of this task to the agent and then I go work on my own task like whatever is the most complicated one so yeah oh yeah i was wondering if you could talk a little bit about uh the trends in uh management philosophy i remember agile con bond uh Toyota management all these different uh terms there's books written on these uh what's the latest and greatest and is there i remember a lot of companies were kind of aligned with one strategy or the other. What are you long? What are you short now in terms of like management philosophy? Yeah, I think the I think a lot of this like systems are like agile or safe or some

of this like other like frameworks. I think I generally short frameworks when it comes to any kind of management like systems. So I'm more like I'm long on like the first principles of like I think like in the end it's like what any kind of organization is about is like like how do you generate the output? It's like, it doesn't really matter how do you get there. And so with linear, I think that idea was being like, can we make it simpler? And I do see like, like if you like,

Brian Chesky and Airbnb, they have this founder mode idea. And then I think prex had like a similar shift that like, hey, let's try to simplify the system like the framework. So I think like that the simplification kind of, I think why it helps is that like it makes the, makes the real things more visible. Like it's easy to like, if you have this like very complicated framework or system,

it's easy to hide in the corners of like, yeah, we're kind of like moving things around, but nothing is actually happening. But I don't know, it's interesting questions. What does the agent system does? I think in some ways it's, it's one thing I think like it's like, interestingly each individual contributor kind of like maybe becomes more like a manager

because they have this like almost like by our legals working for them. Yeah, you have to imagine that there's more focus on like CI and less like waterfall monolithic mono repos in the age of AI, but I don't know what you think about that. Does that track? I think it could track in a way that it's, it's if building things, implementing the code becomes a lot cheaper and faster, you can. I think like today we have this waterfall processes partly because the engineering is expensive.

do the thinking and the design before you start building because the building part is kind of like the bottleneck or expensive. But if that equation changes, so now we can just start like what we see with a lot of this like website builders or something is like you can just try something out and see if it's that that's like actually like useful. So I think that's it does flip the system, but I think like you still probably need to go back to the planning a little. little bit, like think why are you doing these things, but you can maybe like start experimenting more internally, directly with code and not, not like, try to have this like very waterfall process. How are you thinking about partnership, partnerships in the context of your agent, you know, support?

I imagine you got, you guys have your own sort of agentic workflows, but then over time, I imagine some, you know, coding agent will come to you and say, hey, can we get sort of plugged in so that, you know, instead of delegating a specific issue to an engineer, you just delegate it to us. But then that introduces kind of a vector where I feel like linear is about like surgical sort of precision and perfection with product. And so adding this sort of external agent who's now sort of becoming a part of the product, even though they're sort of in some way mirroring what, what, an external engineer might look like. But I'm curious how you think about that. Yeah. I mean, our view is that there's going to be like hundreds of agents, maybe like thousands.

And I don't think we can we can hold it back. And like I don't think we should. So what we're doing is like we're kind of fully leaning into that, hey, linear is a platform for agents. So this might be like third party companies building agents. Maybe we build our own agents. Maybe our customers built their own internal agents and they want to bring them on. And our job there is to like figure out like what is the right way to like what is the kind of interaction layer like how do you actually use these things like use these agents.

How do you delegate the work? How do you monitor it? How do you review the work or how do you as an organization kind of just generally monitor the security or the usage or the cost for example? So we just think that like there will be a lot of at least in a short medium term, there will be like a lot of. different agents and we should just like support that. And so, so that's like we already have to at least two that people are using like devine and co-gen that they that exist on a platform. You can assign issues to them today and they will try to fix them. And we actually seen like a lot of like other developers and we are launching something in a couple of weeks. So I think

there will be like more launch barterings there. That's awesome. Yeah. Actually, I mean, it just gets me really excited because historically using linear, there's just so many sort of the issues that you create that are assigned to a junior engineer. They take a crack at it. Hopefully they get it right. Sometimes they don't. And then you bring in other people to actually get it resolved. And so it's just like such a natural workflow, but it's also exciting because even more junior engineers will learn sort of how to manage engineers just by managing agents. I'm excited to run the show on linear. Project one, ticket bigger gong bigger gong yeah we're going to need more tinfoil hats more soundboard effects can we get a founder mode sound effect to kick it off in talking with your team i mean one of the one of the like

everybody that that watches the show knows this we're trying to make the show you know one one percent better every single day that sometimes it's in different ways but we really do have so many projects new studio new lighting like i have 20 pot projects in my mind and and like they don't perfectly map to the product you know a lot of people think of content is like, you know, it's a camera and a microphone. But if you're not improving it, and you're editing, but it's more so like the show is an ever-evolving product.

Totally, totally. So anyways, excited to hang. Yeah, this is fantastic. Thanks for coming in. Always welcome. And yeah, we'll talk to you soon. Yeah, thanks for having me. Bye.

Cheers. See yeah. And next up, we got Sean Frank. Coming in the studio. The wallet man himself. But we're going to tell you about ramp in the meantime. Time is money. Save both.

Get on. ramp.com. Switch your business to ramp.com. Also, find your happy place. Go to wander.com. Book a Wander with inspiring views. Hotel-grade amenities. What does Wander always say? Find your happy place. Find your happy place. Thank you. Thank you. Thank you. Well, we got Sean Frank in the studio, the wallet salesman here, here to break it down, talks tariffs. Great to have you on the show. Sean, how you doing? Dude, I'm excited to be here. You know, I typically watch a 2x speed and I got like two or three screens going.

So, you know, I feel a little bit ahead of the curve here. I think I know what you guys are going to say next. Oh, yeah? What's that? Yeah. What are we going to say next? I mean, you guys are going to compliment my suit, I assume. It's a fantastic suit.

There we go. He's got a suit. He's got a suit. Let's go. Looking great. Looking great. I wouldn't run through a bunch of stuff. Yeah, there's so much to cover.

How are you doing, first of all? How was the private equity conference at Jeffries? I thought it was a little derivative of the TBPN format. You said you spent the day talking to 14 different firms, 30-minute meetings, speed-dating style. We do 30-minute segments on this show. What's going on? Are you copying us? What's happening?

Dude, it wasn't me, but Vinay, the senior vice president of Jeffries is a huge TBPN fan. He's like, he's like, dude, I'm a day one listener. I'm in chat. I stole this from them. Don't tell them about it. Okay, well, maybe we can have a truce then. That's great.

He can borrow from us the official creator of the 30-minute segment over here. Totally good. But yeah, how was it? What did you learn? Who did you talk to? Can you break it down for us? Yeah. So it was a mid-market consumer conference.

So to break it down for the audience, I'm sure everyone here knows what that means. are probably a lot of LPs and funds, but mid-market is like $100 million to like $500 million in revenue. They're typically deploying checks of like $25 to $100 million. That's on that equity side, right? Obviously not the total round. So businesses are doing between $100,500 million. Is that right? Yeah.

Typically, that's the valuations that they target, right? And then their equity checks in are, you know, 25 to 150 million, something like that. These are smaller private equity funds. They're typically a billion dollars raised and deployed. And this is like the first professional layer for private equity, right? Like small market private equity is very scrappy. It is like guys who look like us, like out there grinding it out trying to find deals where these people are professional bankers through and through. So they're going to go to good schools.

going to have, you know, five to 10 years in the industry. And yeah, so like this is not your your mega funds. These people are not deploying five billion dollars, right? The fund size will be under $5 billion. And they're very targeted on consumer. So anything consumer discretionary. What we've seen is that that segment of the market has been destroyed probably since 2022. It got really, really hot in 2021. There was a bunch of specs in the space, right? Famously you have like, you know, Warby Parker, but then you also have Solo Stove that just got delisted on on Monday. So, I mean, there's a lot of great smart people, and there's people who are on the Solo

Stove deal. So Solo got taken public by Summit, but Summit's like a little bit bigger than a mid-market fund. The first check into Summit was Bertram. So Bertram Capital, really great firm based in the Bay. So they found Solo when Solo was doing $60 million in Top Line, right? They put a check in at like $100 million valuation. they probably owned 40% of the business, maybe more, and then they sell it to a different fund.

So that's typically how mid-market works. You're going to be selling to a different fund to take them public. So Bertram made a ton of money. They sold all of their shares to summit, right? Maybe they had a little bit more that they sold in the IPO. But then, you know, a larger cap fund is going to take a company public. So what's happened in the space? They are cold on consumer.

And the only categories that are interesting for them are services. So, like, talk to a lot of funds who are buying, like, roofing roll-ups and, you know, they're trying to buy plumbers, like, that type of shit. Like, because it's non-discretionary spend. If your roof fucks up, like, you're going to get a new roof. And they're really into the pet space. Like, pet is still really hot. I have a friend Bill who just announced today. He sold his company to Morgan Stanley in the pet space.

And it's on Twitter. You guys can engage with it. So check out, Bill. He's crushing it. Yeah, I saw that. He's been grinding for a long time. So that was great to see. Yeah. It's funny. There's there's a guy who works in in midmarket PE who knew that I was friends and and and and associates with Sean and he basically would email me once a week for like three years asking for an intro.

I want to stay on solo stove. You broke down. What happened? Is it a casualty of tariffs? Is it mismanagement? We've talked about it a little bit before, but can you give you? us the full post-mortem post-NYC suspension, which we hate to see here. We want to see more IPOs, not more de-listings. Yeah, yeah. It's a lot market activity in the wrong way. So what's happening with Solo? So there's like the bigger third thing. And actually, I mean, I'll break some news. I talked to the corporate dev buyer at Yeti, who was at the conference yesterday. And I asked her, I'm like, oh, so are you going to buy Solo? And she's like, even if you gave it to me for free. I don't know what I'd do with it. She's like, why is that? Isn't it making like 500 million? We looked in the numbers recently. It seemed like it was like even if revenues are declining,

even if there's tariffs, like there are people buying stoves. There must be a way to make some money out of that company, right? Am I crazy? Yeah, there's a lot of debt. Okay. And people, there's there's two main problems. One, it was like the biggest COVID trend of all time. Right. There was a there's a two-year period where all of us were stuck inside, couldn't travel. We all discovered the great outdoors, they sold a lot of stoves, and there's a negative flywheel for that business. If you sell one stove, you're never going to buy a second stove. Like it actually, it removes a buyer from the market. So now it's harder to sell the second stove. So it's a horrible problem with that business. The second is massive tariff risk. They are 100% sourced in China.

They are very tight with the manufacturer there, and you just cannot get stoves right now. So you have a situation where they have, their growth solution the past two years, has been to go to mass market retail. They're in Costco. They're in, you know, Home Depot, whatever. And then those retailers won't let you raise prices. So you have a contract to sell it to whatever price. You're direct importing from China. You have stuff on the water. And now your inventory is essentially toxic, right? Like, are you going to, they cost 75 bucks to make? Are you going to give the government $125? Like, probably not. So, okay. So casualty of tariffs then or mismanagement or I mean, we talked about this months ago. Remember, we were kind of looking, and at first it was a debt issue, and that issue was

looming regardless of tariffs happening or not. It seemed like it was... So it seemed like this was predictable from day one, if you were really clear-eyed about that inverse flywheel you mentioned, and then also like the COVID dynamic going away. How about Chubbies, though? Chubbies has to have some broader. That has a positive flywheel. You buy one pair of shorts. You like them. You buy more, and then you're replacing those shorts every year, right? Yeah, look, and I love all these guys. So Kyle, the founder of Chubbies, is awesome. He's building a software product.

Won't plug them. They got to pay for that. But really, really smart founder. And Chubbies is a good business. Like, Chubbies does $100 million a year top line. They do $10 million in EBITDA. Like, that business is worth something to somebody. But John Maris was the CEO of Solo.

And his idea to solve the negative flywheel was to bolt on acquisitions. He's like, I'm going to, you know, I'll fix my company-wide LTV by having solo customers buy Chubby Shorts. And that just didn't happen, right? Like they could never integrate it. Because somebody likes the outdoors doesn't make them more likely to be a Chubby's customer, right? Yeah, it would make more sense if Chubby's, I don't know, started selling beer pong equipment

or something, right? Like, there could be some sort of like, you know, positive flywheel there. But their solution was to broad. in the overall product offering with just like very distinct businesses that have no cross-sellability. So yeah, can you talk about, I, I, people have this idea that, oh, I'm in, like, I feel like everybody's in love with the idea of a consumer product holding company because like people just like consumer goods and they're like, oh, we have, we're good at selling this. We'll be good at selling that. But then when you, when I, you know, understanding, you know, that your focus and

Connor's focus over the last, you know, coming up on a decade in not too long. The idea that somebody could compete in the wallet space with you guys while being part-time is just like insane, right? Because you guys are best in the world of what you do and you're just able to put more time into it than anyone else. Is the idea, is the consumer product holding company model just like generally flawed? Is it is it not something that people should be going after or is it just more about actually having like distinct businesses and ultra-competent management in place in each of them? So it's just really fallen out of vogue, right? So very famously in the past two weeks, Hermes became the largest, most valuable company in the consumer space, right? There were 300 whatever

billion. And they surpassed LVMH. So LVMH is the hold co model, right? And, that was like everyone wanted to be a hold code because LVH was and then Curing became a holdco right they have Gucci, they have much of assets well Gucci just put out their earnings they're down 25% year over a year that came out on Monday right so like the hold co model

is just falling out of favor in favor of Hermes single standalone band super valuable Lulu Lemon set the trend Lulu Lemon is worth more than Honda so Lulu Lemon makes awesome leggings that we all love they trade more than with the best car company or one of

best car companies. And then on running is also, I broke this trend, right? So on running's worth $10 billion today, single brand just making shoes. So right now, the markets are valuing, beautiful brand, super clean focus, owning a category. That'll change again, right? Someone, there's really great holdcoes out there. You know, the people behind Crocs, Crocs owns, hey dude, they're becoming a great holdco. Decker's is another shoe company. they're crushing it in the hold co space but isn't there something about even the way that lvmh has approached their holdco which is like we never share kind of creative resources across brands like there's very distinct kind of like firewalls in place uh is there something to that is that

what you think you know is does decker sort of benefit from scale as just being like a massive shoe manufacturer and then it's like when it when it comes to the kind of individual brand level like let's just make sure that people are ultra focused on the sort of the purity of the brand and sort of scaling that. What I think LVMH does beautifully, LVMH calls them houses, right? So they're houses, but they're in the same neighborhood, right? And what they're able to do is they have L. Catterton, which is like they're picking up, like, imagine this is like basketball. There's like amazing high school players, right? El Catterton is signing those high school players. El Catterton is their private equity arm, very much owned and controlled by the Arnault family.

So, you know, Chrome Hearts is the greatest American accessory brand. That's in the L. Catterton portfolio. At some point, they get called up to the major leagues, and then they get integrated into LVMH, and that LVMH has the spotlight-light approach. So, of course, Louis Vuitton is always going to be the best branded in the spotlight. But when there's a challenger, like off-white, they can put that in the spotlight for a little bit. And then that becomes their star player. and they cycle out to somebody else.

They just got caught flat footed that they don't have a good star player right now. So, like, that's the challenge of LVMH. Curing tried to do that, right? Richmond is the other big holdco in the European fashion space. Richmond's crushing it because they own Van Cleef and they own Cartier. Those brands are very, very hot right now.

So LVMH is trying to take over Richmont because they want to be in the spotlight. So that is the inside baseball, the inside basketball, if you will, of the luxury space. You need to have recruits and you need to have a star player you can cycle out. And LVMH just doesn't have a hot brand right now. I like this idea of the pure play.

It aligns with like the founder mode, the life's work entrepreneur, just not getting too scatterbrained and focusing on one thing. What is the post-mortem on some of the pure play companies in the fashion space that weren't able to reach escape velocity? I'm thinking of all birds and a few other brands in that space. is it just doing too much too early, or is it just like missing some fundamental insight? Or is it more of like a market segment?

And this maybe works in the high end luxury market, but it doesn't work when you're more in that $100 range competing directly with Nike. What's your take on that? Well, you can't be cool forever. So that's like, that's the biggest challenge. Albert was really cool, but San Francisco famously horribly dressed people, right? They have no sense of fashion. Why do we think they're going to tell us what's cool, right? And they were betting on a sustainability wave, right?

So like Nike is able to, like they just benefited from people caring about athleticism, right? That was, that took them from a billion dollar stock in the 80s to 180 billion today or whatever, right? But they were caught flat footed by wellness, right? in that effectively Nike was the brand for sports enthusiasts, everything from fans to athletes, but then wellness kind of came out of nowhere, took the alo, you know, the aloe crowd whenever there on running in many ways, Lulu Lemon, obviously. So it seems like Nike missed the wellness trend, and that was, again, probably the biggest miss. What's your take?

Well, and their stock suffered for it, right? I mean, like Nike is down massively from all-time highs. They're down from their five-year mark. And it's because they missed that trend and they didn't pivot in fast enough. The other thing that's happening is that's happening in beauty right now. So if you go to Sephora, you're either a celebrity brand or you're a wellness brand. That's all the newness going into Sephora. So, Sephora and beauty in general is going through this wellness craze right.

now as well, like skincare is taking over everything. So we're going to watch more of those waves happen. Consumer trends change over time. You can't be cool forever. So the whole thing, like, and this is the biggest problem with venture capital coming into the consumer space. Coca-Cola is the most popular drink in America, and it doesn't even have 20% market share because people like different drinks, right? Now, Uber is a service that is just great for everybody, they'll have 100% of like the ride healing market, right? Google, it's just the best. So I'm going to Google everything. There's no second player. In consumer taste is just how old outcomes. There's no monopoly outcomes. They're just inherently oligopolistic markets. Interesting. So if you,

if you go back to the founders who do, they focus on the pure plays. Oh, I have a good example. It's something you brought up before. I mean, Chrome hearts needs to be studied. And one of the reasons why, you know, Right now, it's like they've never been hotter, but they've gone through periods where they certainly weren't nearly as hot. And I'm curious what you think they've done right. I think to my knowledge, they've stayed mostly family owned or certainly majority family owned. And is that, you think, allowed them to kind of like ride different waves and not,

if at any point they were overly fixated on just pure scale, you know, maybe they would have not been able to. to kind of come back in the way that they have. But I'm curious what your take is. Yeah. I mean, the creative minds behind Chrome Hearts, they're artists.

They're going to do what they're going to do with or without you. If you think it's cool, if you don't think it's cool. Like, Cher was wearing Chrome Hearts in the 90s, bro. Like, they're owned by the Sinatra family. Like,

they're going to do what they're going to do. And it'll come in and out of vote, but they don't care, right? So that that's true authenticityism. Like, they've never chased revenue. Like, they'll make pants. that are like $112,000 because that's what they want that's what they choose to do that day and then you know who buys them Drake it's like well I've heard they I've heard they they basically

they'll mock Drake too they'll be like Drake like Drake like Drake will be like I want some new pants and they'll be like cool like get in line like other people want the pants too and then Drake has to like you know try to cozy up with the you know the essay but that's hilarious yeah so it's it's It's just like a commitment to the craft that like, I mean, this is the reason why the Europeans are so good at fashion is because they will do it for 50 years making no fucking money, right? Or Goyard. Goyard's another like amazing brand. They just don't have a website. You can't buy on their website.

Now, it'd be awesome. They would make way more money. And if private equity owned them, they would open a website immediately. But then they're like, no, we want you to remember where you bought the bag. That's important to us. So like you have to go wait in line and you have to, you can only buy what we have that day. And it just creates like a very personal relationship with the products that is people are longing for in the internet age. So yeah, the Europeans are the best at this.

I talk a lot of shit about Europe, but they do have this figured out. Yeah. I want to go to tariffs. I saw a viral thread yesterday by Ramon Van Meir. He says, everyone says they'd pay more for made in the U.S. I tested it. We make a $129 filtered shower head manufactured in China with tariff surging to 170%. We explored reshoring. We found a U.S. supplier. Our costs nearly tripled. I ran a clean A-B test. You had two options. There were 25,000 users that did this, the exact same landing page.

You can choose made in China for $129 or made in the USA for $239. And they had zero conversions on the U.S. The add-to-cart rate for the US version was less than 1%. And over 3,500 people bought the Asia-made version. How did you process that news? There's some community notes on it. I want to know what you think. Yeah, I think overall it was a flawed experiment, but it's a good story. But what do you got, Sean?

It's a good viral post. Yeah, we've seen this play out with sustainability, right? So people had two options on their website, like sustainable packaging and we'll buy carbon credits versus not. And like people won't pay more than 5% for that. So it ends up being, there's tons of cheap goods in the marketplace and there's tons of substitute goods in the marketplace. And what you need, you need value props to stand out. So like Ridge has, you know, best materials. We have a great warranty. We have tons of reviews. We have social proof. These are just value props. Made in the USA can or cannot be a value prop, right? And if he ran that experiment with

a Japanese audience, what you'd see is the Japanese audience is more willing to pay for made America goods. And if you go to Japan, there's entire stores built around made in the USA, right? If you go to Dubai, it's the same thing. Let's hear it for the Japanese. Showing some love for the Americans. Yeah. And so paint me a broader picture about how the tariffs are affecting e-commerce. Is it a bloodbath? Are people figuring out ways around it? Is it going to put companies out of business? Are people going to lose jobs? without a doubt it's the most challenging self-imposed regulation we've ever seen right like we went

through COVID that was hard for a lot of reasons that that was external forces right we went through iOS 14 we're peons in that we have no idea we can't control that consumer demand has been up and down for fucking years at this point I have a lot of friends who will go out of business because of the tariffs right and a lot of people on the internet you know are celebrating that they're like well them for buying for China. But here's the thing. A year ago, it was encouraged. It's like it's very hard to actually produce things in America. I've tried for years. I've put millions of dollars into it. So like the government basically gave you a free pass to, you know, buy international goods and then import them. And then all of a sudden, it's became very, very difficult to get anything in from

China. And I don't think small independent businesses should suffer for that. I've publicly appealed to J.D. Vance. I'm like, look, I totally get you want to incentivize made in the USA stuff. Like, don't just steal our money in like a massive tax. I have shit on the water. You're just making me give you money. Like, this is the government getting more revenue and getting bigger. Let's put it into a fund where if, like, I owe you that money unless I invest in American business. Yeah. I thought this. I thought this was a really good take and a really good kind of concept, especially to kind of basically extending out the timelines, the policy as it stands today is just like pure pain now, like you're being like, you know, punished versus what you laid out. So maybe

extrapolate on that a little bit. Yeah, like look, I mean, I understand the goals. And this, this is hurting China more than America. Like I think, I think people in America are wanting and complaining because like TN shipments or T-Mu shipments are more expensive. I'm like, look, I do business in China, I talk to Chinese people, factories are shutting down. And you have youth unemployment of 25% in China. Like, it's going to hurt them way harder, way faster. We'll feel it in 30, 60, 90 days when shit in Walmart is more expensive. They're feeling it right now, right? And there is ports that are just shut down. And it hasn't been good in China for like five years. Like it's been a very difficult economic situation over there. So it will hurt them way more. But the flip side is we don't want to also

bankrupt a bunch of American businesses, right? Like what we want to do is incentivize them to either near shore or onshore production capacity. That takes three to five years and takes millions of dollars. So look, charge me tariffs, but give me an out. If I take that money and I bring it to American manufacturing and I hire workers, I open factories, I don't have to give you the money, right? So it's like a one-to-one duty deferral to incentivize U.S. investment. I mean, do you guys want the government to get more money or do you guys want fucking more investment and factories built or whatever, right?

So that's what's my pitch to everybody. Makes sense. I want to get your reaction to this Slate Auto launch. Have you seen this truck? T.J. Parker was talking about it. Finally, someone built a simple, cheap, utilitarian truck. 20K made in the USA. No touchscreen.

Lots of people are talking about it. Did you see the launch? Did you watch the video? Hell yeah, man. That guy's been working on it for a long time. I think he's been documenting on YouTube. So hell yeah, brother. I love to see that. And I was in China a year ago and I was at a big electric vehicle, like, you know, essentially sales summit. They have 50, 100 brands all competing to sell little tiny electric vehicles. And those actually can't pass U.S. safety standards. So they're only sold to Africa. So it was me and a bunch of African buyers walking around. like, you know, they sell for $5, $10, $15,000 or whatever. Now, if he can actually hit American safety standards and ship a $25,000 truck, I mean, this guy's, I mean, he'll do $10 billion the first year, maybe more, right? Like, it's a sales gone.

Let's do it. What do we got? Oh, the sound effects board is down. Brutal, brutal. Let's hear it for a founder and founder mode. Brutal. I want to talk about the ad. People were very happy with that.

Dynamic first second, clear initial framing in the first five. seconds curiosity gap in the first eight seconds frunk disarming anti-ad humor founder CEO curiosity gap uh in term you you obviously make a lot of ads you buy a lot of ads um what did you think of the actual launch video look people are saying inside that frunk there's actually ridge carry-ons so i'm not going to confirm or deny but there could be a cameo from rich carriands i did see that yep those are rich trunks i love to see it i love to see it fantastic yeah how do you uh What would your complete guess on what their margin profile could look like on a $20,000 made in America truck? I know the $20,000 is like allegedly due to some EV incentives, but ultimately, how much are they actually going to make on something like that?

Yeah, so I think they said it's $27,000 and then you get a $7,000 credit if you buy an EV from a new manufacturer. I think they're going to lose about three grand for the first million of them they make. And that's just how auto manufacturing works, right? Like the cost to set them up, you have all these fucking machines. You have to depreciate them over time. Rivian still loses $20,000 in every Rivian they sell. So it's a different model to a higher price point, right? They're going to lose three to 10 grand for each one they sell.

But if you guys ever said to the auto market, the amazing thing about Tesla is every car manufacturer loses money on every car they sell. They only make money off of the parts and repairs. Tesla found out a way to not do that, right? Tesla found a way to actually turn a profit on the actual purchase of vehicles. Ferrari makes $80,000 per car they sell. Tesla makes, I don't know, I think it's like, it's like five grand or whatever. Every other car manufacturer breaks even or loses money on the actual purchase of the vehicle. It's all about financing. It's all about parts. It's all about service. So it'd be crazy to think they're making any money on these things. But the demand shows that they could make money over time.

I think they'll have trouble because if you have $20,000 burning a hole in your pocket, you could get 200 Ridge wallets or something, right? That's true. Yeah. So I mean, it's like a tough tradeoff. 200 Ridge wallets are a little truck. Yeah, you could buy every product on the Ridge website. For sure.

Well, yeah, it's an interesting dynamic where it's like, He has to show so much demand that he can justify, you know, potentially raising lots of money. Five to $10 billion over time in order to just, like, actually get these to scale. But I think the thing looks awesome. And I might, I'll reserve one just to support it. He's also in Rivian. I'm surprised.

I'm actually surprised they didn't go with a slightly higher reservation price point, just given the history of Tesla charging a hundred bucks. What is the reservation? It's 50 bucks. bucks. Tesla charged a hundred bucks, you know, had this big demand signal. And then obviously, like, you know, a lot of people didn't show up. It's expensive. It's a much different price point. Yeah. And I think this is a car that people would just buy as like, I would just get one and park it outside of my house and maybe do coffee runs in it, go surfing. I would put the $20,000 deposit down today. Like if they, if they made skip the line, give us $20,000 today, I would totally do it.

Well, I would do it if they put a naturally aspirated V8 in it. I don't know about the electric. stuff but I would I would be very pro this vehicle if it had a really loud exhaust note it was kind of like a more affordable raptor that's what I'm looking for yeah man well you know today I'll publicly announce if you buy a slate I'll have a partnership with them free ridge wallets for every slate customer we can get one to one let's go thank you for coming on hey it's great to have you Sean we'll talk to you soon I love you you're looking great in suit don't take it off after this call i'm gonna we're gonna we're gonna we're gonna have our paparazzi you know outside your house confirming oh sean frank just puts on a suit to go on tbpn make it a part of your

brand okay dude it's custom too so you guys didn't even ask you this is custom all right see you guys later made me mr too bye later thank you that was fantastic always a great time having sean on the show Sean is one of my favorite wallet salesman he's one of my favorite wallet salesman He's up there with the best wall. Definitely up there with the best. The world. Next up, we got Semmel Shah coming in from Haystack. Semmel, welcome to the show.

Good to have you here. How are you doing? Doing great. I'm really excited about this because I've had like 100 friends telling me that they love this podcast. That's amazing to hear. Yeah. I'm so glad. I'm so glad that we're breaking through it.

We've been spamming the timeline, spamming everything on X. We've learned that Slop is the future. and volume wins, pace wins, speed kills, and we've been trying to do all of the above. Also in a previous life, you know, I used to work in the podcast industry, and I love the medium. This is way before it really took off.

Yeah. And I love media and I love TV shows, and I always felt like there should be like a live tech VC segment. You know, so I just thought to pulling it off. Yeah, it's kind of a crazy idea to do a live daily show. show just for technology, but it's been a lot of fun. It's been working out. Did you ever look at Cheddar? Yeah, we actually talked to the CEO earlier this week. I was familiar with it. Where they took that business was much more. I mean, they actually wound up

owning Rate My Professor.com. That was interesting. They also owned TVs on college campuses. And I do think we have a bunch of college students in the audience, but definitely we, we We have focused more on, you know, insider baseball in Silicon Valley and stuff that's not quite as general audience. But who knows where it goes. You know, this is still an early project. It's involved a few times. And, you know, we'll see.

Anything's possible. I love it. Well, thank you again. Yeah. Well, I actually would love to start with your experience in the podcasting industry and what you were doing and kind of what lessons you learned just because I'm curious. Yeah, just real briefly, it was kind of in the 2012, 13, 14 timeframe. And the entrepreneur at the time, who was a repeat entrepreneur, who's a technologist and a mentor of mine from Stanford and was on the faculty, had this idea of like a personalized audio.

So if you, you know, I don't want to date myself here, but imagine you, 10 years ago or so, you opened Pandora on your phone and you're going in the car. What would the AM version of Pandora be? That was kind of the vision. And so we really spent a lot of time curating the initials. set of things that would come on to the platform. You know, the big categories for commute were news, spirituality or philosophy, comedy was probably the biggest one on the nighttime drive. And then it was like giving the person the opportunity to skip.

So now if you're in the Spotify playlist, for example, we just take for granted that we can just skip to the next song or in an Instagram, we can flip to the next reel. But users didn't really have that amount of control back then. But ultimately, the cost of acquisition at that time, you know, was really, really difficult. And there wasn't as much podcast content. It was mostly kind of radio or TV content being ported over. You know, this is pre-Joe Rogan and all that kind of stuff.

So eventually it was acquired by Apple, primarily for the technology of streaming, the ability to stream from server across different telecom networks. Interesting. I'd love to know your kind of venture origin story. One fun question is like what was the deal where you caught the venture bug? What were some of the early deals that stuck out to you as, hey, maybe I want to turn this into a real career? Well, it really started because I was working as a consultant for a lot of different firms. I was working in industry and I was writing a lot online and doing lots of media stuff just for fun.

and a lot of people who happened to be investors in LPs, Reddit. And I thought, oh, I was helping a lot of friends raise capital. I thought, of course, one of these funds that is employing me as a consultant will give me a job. That did not work out. And so Haystock was born literally out of desperation of having nothing else to do. And so it started with a $1 million fund. And then the first eight months wrote seed checks into Incicart, Envoy, DoorDash, and HashiCorp. Wow.

Oh, banger after banger, after banger, after a banger, who loved to hear it. And I knew in the first two funds, which took about three years, I knew that I would enjoy it because I had been around it a lot, and so it was a lot of fun. I did not realize how much I would love it. And then the other component, I was called Luck and Love, like Mike Maples has a great line, which is like,

you've got to get hit by the lucky truck. you know and um i got hit by the lucky truck a bunch in the first three years so it was um it was very fortunate you know but it was um it was a different era like i could never raise as much as i wanted to for for funds and i would have to beg borrow and steal to make um sort of ends meet at home uh you know so yeah do you yeah imagine you're not eating uh foie gras on the one million dollar uh fees structure yeah it's 200 k over 10 years over 10 years. Pretty brutal. I didn't take any fees really in the first three funds. And yeah. That's great. Are you surprised today when you see managers without much of a track? I mean, you know, you listed off a few of the companies that you invested in the first fund. You would think that that kind of portfolio would get you a, you know, if you had that today, it would probably get you a $500 million, you know, fund two type of thing. Are you, when you talk to, you know,

upcoming managers today and they're they're sort of complaining about sort of the challenges of raising money yet they're still raising you know 50 plus million dollar funds do you I'm assuming you don't have a ton of I mean you have empathy but you're also well it's a it's a very astute question you're asking especially since we don't really know each other because that that is that is a very astute question for two reasons one one is that the rational answer to your question is that it kind of makes sense because, you know, back when I started, people didn't really know how big Uber could be or Palantir could be. It was like, well, I'll just wait to see what happens. I mean, a lot of VCs just passed on Palantir for rounds and rounds and rounds and rounds.

And Uber was like, you know, just kind of blew people's mind of how fast it grew. So now I think a lot of LPs and a lot of people around the world are like, hey, the tech startup ecosystem is a place where I need to have some money at play because, you know, people who come on your show, like, I mean, Carrey, I have a great story about Carrey, by the way. So we think we got to jam that in. Yeah, let's say that. Yeah, people like Carrey are like coming here from, you know, Europe and like doing amazing things and like you find one Carrey in a career, you know, or in a portfolio. It's amazing. So I kind of understand that more LP dollars are coming here. America is a more attractive. The American entrepreneurial ecosystem is an attractive place to

park some money and put it in the ground. It totally makes sense. And when your choices are billion dollar plus funds charging you 30% carry and they're going in a little bit later, it's kind of like, well, okay, do I, you know, which burning building do I want to fall off? You know, now the more micro answer and why I thought that was an astute question is that a lot of people come to me and ask for advice or help with LP andros or how to like design their fund or do stuff. And I've learned, you know, from like, I had amazing access to people and that cannot be shortchanged. Like I was very lucky to have access to like incredible, incredible BC people, you know, BC creators and fund creators that you would all know by name. I had direct access to them

and still do. So I try to pay it forward by helping with LP intros and doing all that stuff. But occasionally I do get that. Oh, my God, like, you know, I need to raise a fund of the size to pay myself. And I always come back with who says you need a, who owes you a salary to deploy the money. And that's really the line I always come back to, which is it's a little bit unfair because you could have a really qualified person who doesn't have access to capital. And part of the game of a VC is to aggregate capital for the entrepreneur. That's part of a game. Yeah.

So if you have an unfair capital relationship or an asymmetric relationship where you can aggregate capital, all of a sudden you're in the game, but then you have to access the founders. So it's that you got to aggregate supply on both sides, high quality supply on both sides. But this idea that like the fund should start paying you is a luxury in my mind. And of course, if you have access to capital and willing to pay the fees, like you can get paid. Yeah, isn't today though, I feel like El-Burie. from my understanding, if you go to LPs and you're trying to raise a small fund, let's say 10, 20 million bucks and you say, I'm not going to have any fees or maybe a very small admin fee to cover the cost. Isn't that given that they're just so used to paying fees everywhere,

is that even like a selling point or does that send the wrong message to that's a fair, that's a fair question. I think that LPs are happy to have their GPs. If they want to work with them, pay them in some fees. I think the point is that when you're starting and you're trying to hit a target or you're spending a year or two trying to fundraise, the idea that like you're owed a salary philosophically to me is kind of bankrupt.

And that like you can say you're going to do that. But at the same time, it is a market and LPs vote with their feet. And sometimes they make smart decisions and sometimes they don't. But yeah, I would say that somebody going,

into market with that $30 million fund should have a budget for how they want to pay themselves. But also, like, sometimes you have to cut deals when you start. Like, you know, a lot of people who want to raise a $100 million fund, maybe the market only gives them six or eight, you know? And it's like, that's where you should start. But a lot of people don't want to start there. And it's a little bit unfortunate because Angelist, which kind of came up when I was coming up created a whole new pathway for me too. Like that's available to you now, you know. And so

a lot of people do use it, but I think a lot of people want to aggregate more and more capital before the market's ready for it. What angelist products were you leveraging most aggressively on the come up? Oh, yeah. This could be its own, this could be its own pod, deep dive pod. I mean, I went, I mean, first of all, of all genius, you know, and really was helpful to me But essentially there were a couple of like public products and a couple of off book products. The public products were that you could do these kind of like software, click and subscribe SPVs, you know, where if you could aggregate from your following or people who were following you and say, okay, I have overcapacity in a deal, you know, I've got a 50K allocation in a series A that I did a seed and I don't even have the money, right?

Sure. You could do that and then set the carry. You could even do little things like portion out the carry based on, you know, people who are helping you on the deal or other people you want to give a little gravy to. Then it turned into like these rolling funds or angelist funds, which are very popular, you know, 18, 19, 20, 21 and are kind of industry standard today. And then the, I hope Naval does in mind, but like the off book thing, he did me a solid for it because I had known him for a long time.

And he is just incredibly helpful and savvy. But he had raised a private pool of capital in an SMA from a, I can't really disclose who, but let's just say a large sovereign that wanted to basically pump a lot of money into the ecosystem. And he picked four, you know, early managers to kind of whitelist. And he chose me and told them just do whatever he does. When you're, I'm curious, how long should, someone wait to get hit by the lucky bus before they should, you know, hang up the cleats.

Because I really do feel like in my personal experience, if you're in venture seriously and you don't get a true banger in the first five years, like this, your job just becomes infinitely more difficult in every conversation you have from LPs to entrepreneurs to other managers that you might be co-investing with. But I'm curious how, if you've seen examples, where like, you know, year eight, they finally get the banger. This is a very, very good question. I mean, I should be back on this pot at some point because you guys asking like the right awesome detailed questions.

It kind of depends, I think, to answer your question based on what fund you're at and what stage you're investing in. So let's say you're at a larger fund and you're doing kind of like a classic series A where you're joining a board or you're putting $7,8 million plus in a deal. maybe you're doing Bs of 2025. You can only do, in a high quality sense, maybe two to four of those per year. And everyone that's your partner or who's around you

or the bigger heads in the fund, they'll ask you to report on your portfolio in a monthly quarterly basis. And they'll have a sense of an underlying like what's happening there. sort of like a few times a year. They're now, obviously, the boards are going to be using AI. Sorry, the funds are going to be using AI to like track the board.

So it's not just about the relationship with that investor. But like sometimes the investor in the old days could say everything's going fine, but underneath the hood it's on fire. They'll have more of a record of what's happening. And so generally the people who are running the funds will watch and see like, what are the underlying metrics, who's going to follow your deals, right, as a proxy for quality. And so all those things are under a microscope. I think when you're a seed investor, like myself, where you're in that early part of the ecosystem where you're not investing

$7 million per deal, but it might be $200K, $500K, $100K, $1 million. You can take a lot more shots on gold. And people suspect that some of those things are not going to work. And you only need a couple to work, right? So you have more surface area to get hit by the lucky truck early. the trade-off is that you don't own as much as you would if you did a rifle shot later. But yes, I think five years is actually too long. And there's a couple of heuristics here. Like it used to be in venture when you would join like a really good fund. They would hand you a later stage deal that already had a board in place and already had some momentum underneath it.

So you could learn the ropes and have like a good kind of chip to put on the mantle to start. But if you think back, I don't know if you have come across Matt Kohler, but Matt Kohler was a GP at a benchmark for 12 years. And this guy's hit rate at Series A was incredible. And even he doesn't even get credit for certain deals that he sourced, but he just doesn't care, you know? But, you know, very few people are going to have that rifle shot selection that Matt did.

You know, someone today who I would mention would be like Mamoon, at KP. I mean, you look at the guy's track record, it's absolutely insane to pick off the money round. How common is it for you? Because I'm assuming your LP in a ton of different funds at this point. How often do you see like a $50 million fund these days that's fully deployed in a lot of winners, but just not, you know, kind of a dud of a fund just because of concentration issues,

pricing, et cetera? Well, I do lots of small investments and friends and like other people to support them when they're starting funds. So it's relatively small. The funds are relatively small. And when the funds are a little bit bigger, those managers have already had experience around portfolio construction. Yeah. So so you can get away with kind of shittier portfolio construction when it's a smaller fund because you're just really chasing the alpha in that. But I would say the broader point I would make here is that the idea of portfolio construction and the math around it, it's no more complicated than basic algebra.

And I would say I probably spent a lot of time trying to learn it and around a lot of other investors to deeply understand it. And it was still probably the hardest topic for me to like grok or, you know, years for me to grow. for me to grok. And I think that's why a lot of LPs like to fund people who come out of these bigger funds because you serve that every week when people are doing partner meetings and portfolio reviews and the people running these funds know it.

So it's very hard to learn from scratch. Totally. I want to follow up on a talk we had with Sam Lesson yesterday. He was saying that the unicorn factory is broken. And it sounded a little bit like he was complaining that just like the big funds, you know, the crossovers have squeezed, growth investors, the growth investors mess up all the early stage markets because they're just

like, oh, $10 million Series A, it doesn't really matter. And then the Series A investors mess up, the seed markets and the seed markets mess up, the angel investors. How real is that dynamic? Are you feeling pressure? Are you optimistic? What's your takeaway on the broken unicorn factor? I got to watch the Sam episode.

That guy's full of amazing thoughts. He's a hot takesman. He is a hot takesman. Very artful. I think Sam's exactly right. You know, everyone is on everyone else. long, you know. And so, yeah, it's definitely a concern. I still feel at the end of the day, and maybe this sounds like Pollyanna, but like the game is can you meet great entrepreneurs

every week, every month, and you're not bogged down by other BS that your partners throw on you or that you go to stupid conferences? Like, we all have like a ton of time every week. and we should all be meeting awesome founders as much as we can. And like, can you connect with them? Can you get to know them? Can you take a bet on them? And I still think you can because a lot of investors have ADHD and they go to stupid conferences and they go to stupid meetings.

And so that's my kind of view is that like you're not going to catch everybody. There's no way to meet everybody. But like there's plenty of people here that you can take a bet on. And you can get paid, you know, if you're only chasing hot deals and everything's price of perfection, we all know where that goes. So the other thing I will say is I've been seed investing, you know, in this part of the market for 12 years now. And every single year, with the exception of like a few six month periods of like COVID or dislocation or something, every year people complain, there's too many smart people starting companies. There's too much money in the early stage market and the round sizes in the bell. are too high. I hear that every single year. So I just don't know when that's going to stop.

Like maybe a meteor or we'll hit the earth. I don't know. No, I got to Silicon Valley in 2012 and I got a big sit down speech. We are in a bubble. And it was like, yeah, we were for another decade. Yeah, I mean, one of the things that makes me so bullish on America is just we spend every single day talking to bright entrepreneurs and at a macro level it's obvious that there's bubbles in different you know kind of sectors and industries right people say oh manufacturing is an investable and then you talk to an entrepreneur who's like to spend six years developing like a proprietary method for manufacturing metal and you're like yeah you're going to sell billions of dollars of this product uh i want to ask you about two archetypes of new fund managers

And I want to get maybe the advice that you kind of like give them as they think about raising. So the first one is the angel investor who's sort of casually lucked into maybe investing in a bunch of winners while they weren't taking investing seriously. And I think this is fairly common. Somebody's like working at a great company or they're a founder and they just happen to invest in, let's say they invest in 15 companies. A couple of them end up being unicorns. and they decide they want to become a fund manager. And then the second archetype is somebody who's at a big fund, gets hit by the lucky bus maybe,

but doesn't really realize the kind of dynamic in which enabled that investment, which might have been the fund's brand, or it might have just a variety of factors. So I'm curious how you talk to those types of managers, both of which believe that they deserve a $50 million seed fund, and deserve they should be, you know, able to kind of like win deals and they very possibly can. But it's not necessarily a walk in the park.

The, for the angel archetype, I mean, let's not forget, like, Elad Gill was like a super angel and then turned into like his own growth fund as a brand. I mean, it still amazes me to see like the entrepreneurs, you know, when they create their Coachella banners for their huge fundraisers. It's just a lot gil. In Driesen Horowitz, Elad Gill. A lot of good. Okay, that's pretty awesome.

It's awesome. So, you know, he was born from that. I think that, like, the pattern going back to your question is, you know, hey, you've been doing this as a founder or stuff. I would think about a couple things. One is, like, when you have a founder, especially a founder who's like, or operator who's, like, very, very connected and just kind of angel investing for fun, a sophisticated LP. Now, the problem is here to do a $20 million fund. That person could just call his or her friends. You know, but let's say if you're going to like a sophisticated family office or institutional investor or fund of funds and all these managing merging programs or managing manager programs are popping up.

That LP knows that they're trading off access that this person may have that's unique for that portfolio construction and discipline of building the basket. And so that person I would advise to say like two things to watch out for is, how are you going to get smart on the portfolio construction and build a model that works and kind of stick to it? You can deviate from it a little bit, but you want to show consistency, right? Because as you build up your track record, literally when we raise funds, you know, we may or may not be in the middle of that right now. They take your whole bank ledger. Like every dollar that comes in from an LP and every dollar that's wired to a company is just in an Excel spreadsheet. Yeah.

And so everything is recorded. And so, you know, you go to wild by a second or third fun when an LP is really looking at you, they may say, like, love to see this smooth out a little bit, you know? The other thing is just what I say, network atrophy, which happens to everybody, which is like if you're not constantly replenishing your networks. Not everybody are the Colson brothers. I mean, the big thing, the big red flag for me on the angel side is, you know, as an. angel I have 50 plus companies that I've put various checks in both of my you know true banger unicorns I would not I got 25k into if I tried to do 50k they would have said sorry like you know we have a bunch of people on the round access but not that much access yeah yeah I had

access and I was intelligent enough to just give the founder money but and and and so and and And so if I were to go out and raise a fund, it wouldn't be authentic to say like, oh, yeah, if I had a seat fund at that point, I would have, you know, been co-leading the round or whatever. You're talking about like what happens with check size escalation. So like I'll give you a couple of things to noodle on. So for me, I had no choice but to crawl, walk, run. So I was incrementally increasing my check sizes and the same kind of round. So the same rounds I was doing 12 years ago were doing today. Now, most people will just say, oh, I can go a little bit more. I tend to think, if you talk to other seed investors, that kind of line is around somewhere between when you're asking for 250 to 500K starts to get tight. Yeah. So you could have an aggressive, you know, one model is you could have an aggressive angel

who gets that right away and starts firing the million dollars instead of 25. And they still have a hot hand. They still have a good network. They still have good judgment and knows. Like that can work. The problem is like, you're going to. you're probably going to light a lot of money on fire too because the deals are moving too fast and they don't have like that deal judgment going. But the broader point you're making

is a very good one, which is around like what check size can you really write in the competition set? Yeah, in the one in the companies that matter. This is fantastic. We definitely do have to have you back on. I can talk for another five hours. I got to ask one more question. Can you kit, how how do you think X is today in comparison to the good old days of Twitter. I think you were one of the first people I ever followed on tech Twitter. I didn't get, I got on like somewhat

late. I was in college. I mean, five letter username. It's no four letter username like at TBPN, but it's pretty good. I'll see new people follow me and like usually it's just bots or people with like a, you know, an animated the anime profile

pictures, there's alpha in those. Some of those folks are really great at AI engineers. But like recently a bunch of people have like followed me and I'll look at like recent followers and it'll be like Barack Obama. That's awesome. What's so funny? Yeah, if Elon, if you're listening, I love X, I love Twitter. I've been on it for, I don't know, over 15 years. I just want tweet deck back. Because I think tweet deck being removed has disrupted my flow and I've never, I haven't been able to like find my footing again. But I think the content on there is great. It's just, it's harder to find

right now, and I tend to get the best tweets in my social chats, in my group chats. Yeah. And to me, that's a sign that, like, the interface is too much. Yeah, we talked about this with Eric Torrenberg a little bit. A lot of the alpha has shifted to these big group chats, and there is a little bit of that's lost. I mean, Twitter originally was, like, the global group chat for the world and for tech, and you had NFL Twitter and all the different Twitters. There's still a little bit of that, and we're bringing it back with this.

I think Elon and them can make more money by going back to TweetDeck, redesigning it. And then in each stream, you can have different ads just at top. It's like such low-hanging fruit. Yeah. Well, this is awesome. Thank you for coming on. Let's see again soon. Thank you.

Great to you. Yeah, we'll talk to you. Yeah. Take care. Cheers. Let's bring in Dan from Chain Guard. Boom. announcing a pretty, really medium-sized round.

I think it's just a couple hundred million dollars. By the way, did our three o'clock? meeting, it moved to... Oh, did it get moved? To 230. So we got even less time. Wow, okay. Well, we might have to reconfigure some of the agenda

because it's a big meeting just got moved up. And it's all the way across town in L.A. traffic on a Friday. We are going to be in trouble. We will figure that out. But we will first have a chat with Dan from Chained Guard. Welcome to the stream. Thanks for having me on. Yeah, thanks so much.

much for joining. Congratulations on the hefty $356 million series D. We'd love for you to introduce yourself, break it down, give us the news, tell us what's up. Oh man, I was just on my roof 10 minutes ago trying to get my Starlink to work because my internet was down for two hours and it came back on five minutes before this. So I'm so happy to be. It's a miracle. It's meant to be. Yeah, where are you right now? Yeah, yeah. I'm in my basement in Rhode Island. Oh, nice. Nice. Very cool.

Yeah, we're an all remote company. Yeah, we're about three and a half years old at Chainguard. We got started during the pandemic, so there were no offices, and we've kept it that way as we've grown. But we're building a safe source for open source software. Cool. Open source is this kind of like hippie software movement that's been around for like 30 or 40 years, but it's like anyone writes code and puts it on the internet for free and people use it. And everyone kind of gives back and trusts it.

And it mostly works. It's awesome. It's like 90 to 98% of the code that people use when they're writing their own applications. But when you're using code that's written by anyone on the internet, it turns out not everyone on the internet is a nice or responsible person. And that leads to security issues. What was the single? I was about to say, yeah, what's the inciting story?

Is it solar wins? What do you go back to as like the foundational story that we will be able to prevent in the future? Sure. Yeah. Solar Wins was like one of those eye-opening moments. It's something I've been paranoid about for a while, though. There's actually this paper that was like written in the 70s by Ken Thompson called Reflections on Trusting Trust. And it was like a Turing Award winning paper. Like it was his paper after he won an award.

And he kind of proved by pranking all of his coworkers at Bell Labs that if like there's a backdoor and a compiler, a compiler is a thing that turn source code into like, you know, the thing you're actually going to run. Then you can't really trust any of the programs that are ever. built with that or any of the things that are built with those things. And it's an awesome paper. And then everyone just kind of blocked this out for like the next 40 or 50 years until SolarWinds happened basically where somebody actually spent the time and did something like that and then had dramatic consequences as a result to all of those kind of downstream

customers. But my co-founders and I've been working on this stuff for a while at Google and SolarWinds was kind of the kickstart to actually get this company going. Got it. So talk to me about, I mean, the ramp on this company is crazy. what was the first customer, what was the go-to-market, how did you scale? I wanted to hear all that. Yeah, we spent a while in the beginning trying to figure out what we wanted to do from a product side.

Software supply chain security, open-source security. It's a whole bunch of problems. It's not just one problem. And it took a while to figure out which one people actually wanted to solve first. It was this topic everybody knew about after solar wins. There was an executive order from the Biden administration, that kind of thing. But nobody was really ready to take action yet. They were all just paying attention to and learning about the space.

So we tried a bunch of different things. But this product that we have now, our chain guard images product, we started on it pretty early, and it took a while to get going. Because there was a lot of software that we had to build to get to this point where people could come to us and get whatever they wanted to run from us. We first started selling it like, oh, sorry, go ahead. Oh, yeah, I just wanted to finish that story and then I'll ask the other question about, you know. Yeah, we really first started selling it about halfway through calendar year, 2023. We got the first couple of customers on board. We had a couple sales reps at the time.

They reported directly to me. After it really started selling, no, and we had a feeling it was repeatable. We brought in a VP of sales. We really started to scale that. But we've kind of been perpetually behind, you know, growing our sales team as a result. The demand has been, you know, more than we can handle.

It seems like you're doing great. Talk about, I want to ask you more potentially just a fun question, not so serious. Talk about the brand. I think if you said 20 years ago that, like a. security software company would have such a fun, delightful brand. They would have kind of laughed at you. Is it just an extension of the team and your guys' internal culture? Or how did that come together? And what's been the customer response to that? Because I imagine at this point, many of your customers

are not just cool ex-native startups. They're really scaled enterprises. Yeah, I think it's a reflection of, in some ways, our internal culture. Like security is really serious work. The type of security we do is really tedious work. It can be boring. It can be hard stuff. Nobody really wants to do. And we try to keep it fun.

One of our core values is we do serious work, but we don't take ourselves too seriously. And we spend a lot of time on that one. We have fun in all hands. We have crazy stuff. It's that kind of thing. And it helps keep the culture light. You know, when you're about to go spend eight hours trying to fix some tiny bugs somewhere in some piece of software you don't understand.

It helps to laugh every once in a while. It keeps everybody engaged, keeps everybody having a good time, especially when things get tough. And we try to reflect that in our social media and our branding and the events and all of that stuff we do. I get cold called all the time. There's all these brands out there. And just some personality and authenticity really goes a long way in this.

Totally. What are the general risks in cybersecurity risks around software that, that kind of like keep you up at night that aren't related to chain guard directly and what you guys are doing. So kind of like more at a macro level. I mean, this one's sort of related to us, but it really is the one that keeps me up at night. But we don't have a perfect solution to it either. So I don't feel too unfair. But it's the XZ Utils attack at the start of last year, if you remember that one.

I think that's the one that probably should be keeping the entire industry up at night. It was this piece of open source software that had been around for like 30 years. It's this compression library that's used every. everywhere across the internet, you know, as you upload, download things, it all gets compressed and decompressed, just like from Silicon Valley, you know, the middle app compression kind of thing. It's everyone. You don't even think about it. And it was maintained by just one person, like a lot of projects are for, you know, like a decade. And somebody else just showed up and started helping. And they were like fixing bugs, doing good stuff, cleaning up the old code, nobody else got around to for like a year or two. And then the original person was like, you know what? I've been doing this for a long time. You're doing a good job. Why don't you just take over? And the original person, just kind of left.

And then three months later, this malware gets slipped in that was incredibly sophisticated. And it turned out it wasn't even a real person. It was just like a made up name on an email list. The name was Gia tan. Yeah, Gia tan. That's not even a real person. Like there are people with that name and they had a terrible week getting arrested. But none of those were that Gia tan.

And it was luckily detected at the last minute and it was a really close call. but that's not the first time that's happened, I'm sure. It's just the first time we've noticed, and that's definitely not the last time that type of thing is going to happen. It's about trust in the end. You have to trust the people that are doing this, and you don't know if they're a nice person on the internet. What's that old meme?

You don't know if someone on the internet is a dog, right? Yeah, a dog. On the internet, no one knows you're a dog. Yeah, a dog, Russian or North Korean hacker. Nobody on the internet knows these things. So it's kind of related to what we do, but it's a hard one. It's impossible to solve unless you know the identity of every single

person and all their entire life history. Yeah, this is somewhat related. I can imagine there's a world where this is handled by the government. And if there's critical software that's identified, it's like, we're going to find this person and verify who they are and basically do a background check. On the other side, the more futuristic Silicon Valley tech approach might be, hey, we have incredible software LLMs. We have AI agents.

What if we just run an LLM over every piece of public code constantly, review every, review every get push or every poll request, right? How are AI agents effective? Is it just going to be a like a cold war of both sides using AI to sneak ever, ever more complex hacks in and catch them as a cat and mouse? How are you seeing AI and AI agents helping or hurting in the future? I'm scanning the internet right now while we're talking. Yeah, I'm vibe scanning the internet. Yeah, no, it's in arms race, like everything in security. Attackers get better. They move around and find different ways in, and defenders have to have to keep up.

Right now, I think we're losing that war, right? We're getting a lot better at finding vulnerabilities and software and finding ways to exploit than we are at keeping up with that. I hope that changes. You know, AI adoption and security has been pretty slow. And for a good reason, it's kind of scary. You don't want to just run these things with direct access to all of your systems, but attackers aren't slowed down by that.

They're running this stuff every day and every week as it changes. So it's going to be a kind of wake-up call and catch-up period as the defenders figure out how to use it as well as the attackers are. What's the vibe in the security community right now? Just is it, I remember I accidentally landed in Vegas during DefCon or Black Hat and it was kind of out of my element one year. But what does it take for somebody to bring? break into the industry. Where are the key pipelines? Are people even like are universities relevant

here anymore? I know there's a lot of hackers that just kind of do CTFs and then become famous. But what are the typical pipelines into either career at your company or just the industry broadly? Yeah, security is both really easy to break into and hard at the same time. Like you mentioned, universities aren't terribly relevant. There's no college that you get a degree in cybersecurity security from, even programming in general, right? You can learn this stuff on your own. I learned it on my own. I did mechanical engineering.

I never took a programming class. But it's also hard because there's so much esoteric stuff. Like, there is no curriculum. You kind of just have to spend all that time on those forums and reading hacker news and reading all these different sources. So I'd say there's not a lot of credentialism, but there is still this like kind of obscure, dark knowledge base that you do kind of have to pick up on on your own. But it is incredibly welcoming.

Hopefully you had a good experience when you landed there in the desert. at DefCon. It's always a fun crowd. Yeah, totally. Yeah. It's a way more fun than RSA. You never know what you're going to get in Vegas. It might be the plumbers, you know, annual conference or an arms dealer conference. Yeah.

It's always different. Yeah, I remember people were joking like, oh, like, don't even go near the DefCon folks. Like, they'll hack your phone in two seconds while you're not even looking. No one takes a shower. Yeah. Oh, yeah. That too.

That too. Yeah. So what's next for the company? I mean, you have a new war chest. You mentioned hiring salespeople scaling that up. What are the new challenges? What are the goals for the coming 12 to 18 months? Yeah, we're trying to be the safe source for all open source.

You know, up until today, it's been pretty limited with just our container images. We're adding new products. We just announced a few a month or two ago. Virtual machines, language level of libraries. We've really just on the tip of the iceberg when it comes to open source. So we're scaling up our investments a lot in R&D, our automation, making this stuff easier for us to do, is we continue. can you grow and scale, you know, the amount of open source that we have.

It's moving even faster. You asked about this about AI. Open source is accelerating. You can crank out code even faster now. Today, it's more people writing more code. All code has bugs. We haven't really made an improvement dramatically that way. And like, you know, the number of bugs per line of code written.

In fact, it'll probably go up as more inexperienced people start writing more and more of this. So the security gap is getting wider and we have to get even faster at it. Yep, that makes sense. One more question on AI and we'll let you get out of here. Dario over at Anthropic just published a piece, The Urgency of Interoperability. Jordy and I were talking a few months ago about Deep Seek and this idea that even if it's open source,

there could potentially, it's a little sci-fi, but there could potentially be a Manchurian candidate buried in the weights of one of those models. Is that something you're thinking about? Is this pure sci-fi? Is this a year two, five, ten out? How should we think about auditing the output of open source LLMs? Because that seems like a really valuable target if I'm a hacker.

Yeah, I've seen studies not even just recently, you know, in the last couple of years, where if you could taint a percentage of the training data going into a model, you can control some of the output. This stuff is not possible to reverse engineer. Code is hard enough to reverse engineer, and this is that scaled up by like 1,000X. Open source models, you know, there is an open source definition for models. and these wastes, but you know, you can read source code. It's hard, but you can't read these ones and zeros in a, you know, a 40-gagabyte file.

It would not shock me if it's in there, not even just deep-seek in any of these models intentionally or intentionally. We like to think that we can review stuff line by line and catch these bugs, but there's no possible way to do that with LMS. The whole explainability piece is scary. Totally. Well, thank you so much for stopping by. We have to cut it short because we have to run to a meeting.

But this was fantastic. love to have you back on the show. Hopefully, there's never a big security incident, but if there is one, we'll be calling you. And we'll be playing this sound effect. Oh, no. You know where to find me. Thank you so much.

Thanks for coming on. Have a great weekend. Cheers. We'll talk to you later. Bye. See you, Dan. Fantastic. Well, we have to wrap up.

We have one last ad, linear. You heard from the CEO directly. It's the new standard for modern product development. go check out linear. Build with Focus, ship with care, linear. Dot app. And thank you. We will wrap up there.

Simply the best. And we'll be back Monday. Yeah, we're sorry. We have to run. It's going to be a massive week next week. Massive week. We're going to be on the ground at Hillen Valley in D.C. We have a lot more planned, a lot more timeline, a lot more top stories, a lot more real estate

stories, hopefully. That's right. I'd love to break down some more mansions. We'll see. Anyway, thank you for watching. We'll see you soon. Have a fantastic weekend. weekend.

Bye. Cheers.