TBPN - Vibe Rounds, Tech Ecosystems, Foreign Money in US Venture Funds

Episode Date: October 4, 2024

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Welcome to Technology Brothers, the most profitable podcast in the world. You read the Wall Street Journal today? Of course. Yeah. Open AI. I need my copy. What are they, are they covering the departures? Not the first, yeah, it's interesting because Open AI, I mean, the chief technology officer quit yesterday.

There's like rumors about a fundraising round, a bunch of executives left. So it's like kind of a chaotic moment. I saw somebody's take that I think was totally on point is the way that OpenAI's employment contracts are set up is if you talk poorly about Open AI after you leave, they're just like, okay, like this is our equity card back. So if you wanted to make a statement about how fucked up things were while still holding on to your equity, you leave right in the middle of the fundraise. Right? What sends a bigger mess? Like, because if you're like, let's say we're running. That's not different than via.

But that's not the same as actually violating that clause. No, that's what I'm saying. If you wanted to make a very large public dramatic statement about something being wrong at Open AI, but you couldn't say that. Oh, but you couldn't say that because you would leave in the middle of a fundraise. But if you want the equity, why would you want to hurt the company? I mean, it's not, you know, you could argue that somebody could say, I want no part of this, but you still want to kind of keep.

Get the money. Yeah. I hate that. That pisses me off so much. That's like that fucking guy from meta, from Facebook. who made this huge bag and then was on Netflix. Tristan, you know this guy? No.

He was in this documentary called The Social Dilemma. He was like, oh, yeah, like, it's so bad what Instagram has done to this generation. It's so bad. And he's just sitting there from Montaigne. Yeah, exactly. He made so much money. And it's just like, I actually love that clause. I think that clause is interesting because if you are seriously...

Are we an Excel character right now? No, no, no. This is what I actually believe. I love that clause because if you were actually terrified of AGI and you were like, holy shit, this stuff is going to kill everyone. What the fuck is your equities worth zero? Your equity is worth nothing. So you're going to just be like, yeah, go for it. No, I think it's much more of a statement on Sam's character to leave during the fundraise.

I don't know. I mean, like I hear what you're saying, but it's just weird because it's like, it's, it's, like it's this half measure. Like either you'd want to just be like, let me, like, I want the value of this stock to be as high as possible. Therefore, let's find the chillest place for me to get out because like I am tired, right? Yeah. So I do want to leave, but I don't want to fuck over the company at all.

So let's figure out a way to get out. And I thought it was originally interesting that they launched this, like all this stuff broke the same day that Zuck had the big meta announcement. I think it was timed? Well, yeah, I mean, if you, it's like, you know, bury your news. Yeah, try and bury your news on, you know, a day when something else bigger is happening, right? And like, Open AI historically has been really, really good about releasing information, like, front running, like putting their AI announcement, like the day before Google's, right? So they clearly know when the other things are happening.

Has Lucy ever been approached by Open AI? I mean, maybe she can't say that. Does she work with them? Which Lucy? Sorry. My company? No, no, no, no. They've definitely worked at Lucy. Of course, of course.

Lulu, Lulu, not Lucy. Lulu, I mean, I think Lulu is working with SSI. I got it. Ilya's company. Because she's on like the Nat Friedman Daniel Gross crew. Right. Although she's, you know, like it has a bunch of different companies and stuff. But when I initially saw that all this was breaking right then, I was like, okay, maybe they're trying to kind of bury this news.

I mean, obviously it didn't really work because it's on the front page of the business section. Which every self-respecting person reads daily. Well, I mean, you know, like the meta platforms announced deals with celebrity actors to use their voices in a new artificial intelligence assistant. That's B4. And the open AI stuff is B1. So it did break through. That's the way I thought they were framing it initially. It was like, let's try and get this news out.

the same day that something else big is happening in tech. We know that this Facebook thing's happening. But then, I mean, then again, like, there is one narrative where it's like the whole company's falling apart and everyone's leaving. But then there is another narrative, which is, like, great man theory of history. Maybe you just need one person.

Executive teams turn over all the time. They often turn over in the midst of financing rounds because it's like, okay, we're actually changing what the business is going to be doing. We're going a different direction. So, like, yeah, we are wiping out a bunch of the staff. I don't know. I'm not, I'm not ready to say like, it's, it's, it's so over.

No, it's, it's, unclear that we're so back. The thing that's most, the thing that's most, uh, the thing that makes it the most interesting is how opaque it all is. Yeah. Nobody, nobody, even seemingly insiders don't actually know what the fuck's going on. Yeah, like, and to have that many, that many billions of dollars in a company and nobody can figure out what's going on. Yeah.

And there's this broader public back. Like, Sam went, you know, a year ago, it felt like Sam was, he was on top of the world, right? Like, he was, everybody was, like, was in his comments, like, worshipping him on every single post. Like, you know, this, like, sort of tech demigod. And now it feels like that has... Yeah, certainly, like, the... Certainly, like, the ex-AI-X community is deeply against him at this point. Yeah.

And a lot of that has to do with like the open sourcing. Right. And kind of commitment to the developer community and a lot of different stuff. Yeah, and it's funny. I feel like the first, one of the first critiques of Sam was how he would give those interviews where it genuinely felt like he was just lying, but like with a very straight face. And he's like, I own no equity in Open AI. And it's like, who knows what's actually true?

I actually was curious and I tried to do some digging and people were like, yeah, like, from what I can tell, it's like legit. Yeah, yeah, no, it was legit, but there was always the soft power element. The soft power element. And there was always the question of, like, could he get equity eventually? In the for-profit shift, there's this discussion of getting him, you know, what will effectively be like $10 billion of equity in the for-profit. And so to me, if you actually think about his sort of game theory is like, let me come in,

sort of run the company, get so much control and power and influence and not have equity while it's still this non-profit structure and then flip it into a for-profit structure and get equity then, right? Like it almost is like, well, if you were always doing, like, why is there even a discussion of you getting 7% of the company at a $150 billion valuation if you never wanted it and it was never a motivation in the first place? But it was kind of, if Sam had come in taken a huge stake in the company in exchange for taking on the CEO rule while cucking Elon out of, then there would have been like a lot of, you know, there would have been probably even more, now he can make the argument where it's like, well, the board just really wants me to

be properly incentivized now that we're a for-profit structure, it's only right. And now the next time, you know, he's up in front of the Senate, what's, you know, getting grilled? They're going to be like, so what, you know, what changed? Like, I thought you just were doing this for humanity. And now all of a sudden you have your, you know. Yeah, it's interesting. I wonder, like, I always wonder, like, how seriously people believe, like, super intelligence is right around the corner and the revealed press friends.

That's a few thousand days away. It's a few thousand days away now. It used to be a few quarters away. It's, like, it's kind of shifted so much. And, like, that informs your decision and, like, your actions, like, so much. And there's, like, a lot of, like, revealed preferences versus stated preferences.

a lot of the doomers are like, you know, oh, 99% chance that AGI is going to, like, kill us all. But, like, yeah, I'm still, like, investing in, like, bonds. My 401K. Exactly. And it's like, okay, well, like, you kind of don't, it doesn't seem like you believe that. It doesn't seem like you're really taking actions

that are consistent with what your stated beliefs are. Like, maybe you're just trying to, like, you know, get attention. But I do think, like, even internally at these research organizations, like, they might have shifted their views. Like, it's totally possible. I was talking to somebody about Jensen Wong and how NVIDIA has done a lot to, like, kind of get around the chip bands. And whether or not that was, like, un-American.

Because they're, like, American companies will buy 100% of NVIDIA's supply right now. Yeah. So the fact that they are taking any TSM line time. Yeah, that's what he's saying, right, is we're still deeply supply constrained and will be for the next... Everyone is. Yeah, like, yeah, like, like, Nvidia could very clearly just make a statement saying like we're only going to sell to American companies and I'm going to call up Oracle and Elon and Zuck and Google and all these people and just say I have you know

100% of my supply you guys better take it all and they would yeah and so so it's not an economic consideration it's it's more like this long-term diversification you want to be more of an international an international company and and so if you really really believe that like a asi AGI is around the corner it's going to be this super like you know bio weapon level like super critical geopolitical thing, then putting in the hands of the CCP is very dangerous. But if you deep down actually just believe that it's just like, it's just spell check. Like it's just like a useful tool. Like then then as just like a libertarian normal person, it's like yeah, like why would you respect

the spirit of the law? Like you're only going to go after the letter of the law. And like the chip ban says it can't have this much memory bandwidth. And so you'll go one point under that. And like that sounds treasonous. if you believe that AGI God is coming, but it doesn't sound treasonous if you're just selling spell check, right? Yeah, yeah.

And so it was a very, very interesting discussion. And I think that's happening at a lot of these labs. I think that a lot of the labs are starting to change their view from like, okay, well, we thought we were just going to, like, nail the algorithm and get God, and we wouldn't even be able to process it or something. But we got entry-level white-collar work. Exactly. And so, and so, like, and not just that, it's like, also God might be, like,

decades away, right? Even a few thousand days, that's a full decade. And you've got to do a lot in between and also just the scaling laws and all of the different things. Yeah, the few, we talked about this, but the few thousand days away sounds way better than 10 years. Than 10 years, which is exactly what it is. If you just assume a few is three and you just do the math and it's like, okay, that's a decade. And we've been hearing about like, self-driving cars a decade away and then, you know, it took like a little bit more than that, took like two decades and so I was even here and then and then the actual build out

and roll out of these things is it takes forever too like yeah I was disappointed disappointed to see when you said you shared this earlier that TSM is slandering podcast bros oh yeah called they called Altman a podcast bro as if it was some type of like attack yeah which I didn't I had to reread it a few times yeah to get their meaning I was confused because that's kind of the highest food chain in the tech food chain. Podcast pros, finance people that can navigate Excel without their mouse,

you know, venture capitalists after that. Yeah, then founders. Yeah, right. But yeah, it's sort of interesting if you would think that TSM knows what they're doing, right? Yeah. Do you think that they're, do you think that they're seeing through all the narratives and just being like, bullshit? Because that's kind of what it sounds like. Yeah, yeah.

In that one interview clip where they kind of talked about, I have fours too, if you want. I'll take four. Thank you, sir. Yeah, yeah, in that one interview clip, they are talking about, like, you know, Sam coming in and saying, like, we need like 35 more. plants and like, you know, if you go back to the history of Morris Chang and TSM, like, just getting that one plant up was like immense risk and required like massive government, you know, intervention to make it happen. I hadn't realized, but I guess the Arizona plan is actually put producing product. I didn't know that, but I mean, it makes sense. The question is

just like, what process is it on? How small are the chips? Like, like, because we, I mean, America does have plenty of chip-making capacity for, you know, the much larger, the stuff that goes in, like, a toaster and a washing machine. Global Foundries and a few other companies have, like, pretty deep-stores. Autonomous toasters are going to be. Yeah, but it's when you get down to, like, the really important, like, iPhone chips and stuff that's in the, yeah. In the GPUs, like, it's really, really difficult. But, yeah, I don't know. Speaking of AI, I, there's been a lot of talks about, we can do.

this later but there's been a lot of talk about like you know the the AI that Elon is applying to the X algorithm and whether or not it's good for the world or good for the user experience and the question is it is it actually AI or is it 300 people in a room just looking at videos and hitting a button that says degenerate or like or like good for society and they're just going like and then they're just like feeding those videos right Because you remember early TikTok days when TikTok the algorithm was like getting good. And I remember going on it. Never, never, I don't think I've ever posted anything there.

But I remember going on it and being like, wow, I'm like kind of shocked that they would feed me that video with how little I've used it. Like it was so on the nose. Just pausing a little bit on like, oh, there's a car in the background. The next video is a car video. Then the next video is the deepest dive on a car you've ever seen. Yeah, yeah. Yeah, it knows I'm a car guy. Yeah, yeah.

Just like that. And I remember at the time there was footage coming out of these effectively like farms in algorithm farms is how I would describe them, right? Where there's just like people in rooms just like sorting like videos like manually. I mean, there's a little bit of that. Yeah, yeah. Mostly it's just like how much time is spent on this particular thing. How much time are you hovering over it? But yeah, it's like, no, of course.

But it's funny to imagine Elon. getting so his dopamine rush is engagement, right? Like he's all about like the metrics. He wants to put points on the board. And so you can see him just like dialing up the degeneracy to the point where he's like, he walks into the room. They're like, sir, we can't, we can't go anymore. We were already showing the people fighting the streets.

Like he's like, more. And it's like showing like racial crimes. Yeah, pump fights. Like he's just like more. And they're like 11, put it to 11. I mean, yeah, it's unbridled. But, I mean, I think that's like the only thing that will turn the business around really. I think this nice little garden that we had in like tech Twitter, like it was truly like the tech community was subsidizing that.

Yeah, yeah, yeah. Because like Twitter was never particularly profitable. The business never really worked that well. And but it was like what's funny is like how much of the market cap was oriented around how much people love the product. Yeah, yeah. Like it was something when I discovered Twitter, when I credit Twitter with massively accelerating my professional development from the lens of I was able as a 21-year-old in the school, you know, it was at UC Santa Barbara. It's not a tech school. I didn't know.

We had a technology management program that I was in, but it wasn't like everything we were studying in school was like 10 years behind. Yeah. So it was like I could go on Twitter. And the biggest thing for me was like picking up the vocabulary of the industry so that when I would go meet somebody, I knew what they were talking about, even if I'd never done the thing.

And so to me, I credit Twitter with accelerating my career like five years, something like that. Because I just felt like I was, I felt like I was a part of it just because I was, even though I was just like kind of soaking it all in, I wasn't even a part of the conversations. And unfortunately, so I think that a lot of their, market cap was just the fact that the technology industry and many other industries just love

the product. It's like you don't want to short Twitter. It's kind of like this option value on like the value of the network because it had like world leaders there, the Pope, but then also every journalist who's posting every news story is breaking there. Like there was just like something, everyone felt like there was going to be some sort of value to come out of that. Yeah. And the big critique was like you guys don't chip anything. Everything's broken. Nothing like works. like the DMs suck. Yep. And Elon's like, okay, you guys want change?

Like, I'll give you some change. Yeah. And then it's, we're like, oh, actually like, like, I still type in Twitter.com on my browser and every single time I get this pang of like sadness. But yeah, I mean, I think there's something interesting where it's like he clearly bought it because it was like the festering hive of scum and villainy in the sense that like every cancellation campaign started on Twitter. Yeah.

It would usually, like the anatomy of a cancellation. campaign would usually be like someone figures out that they don't like this tech CEO or whatever. Yeah. Then they go back, they dig up some tweet where they're like, capitalism is good. And then some like tiny like communist account quote tweets is like actually capitalism is bad and then gets like a thousand retweets. Yeah.

And then all of a sudden there's like more people piling on, more people piling on a real like back and forth fight and then the low tier journalists can start reporting on the backlash on Twitter. And they can start saying, oh, well, like, you know, how are they going to respond? There's been this uproar on Twitter. This person needs to, like, talk about this. And then once the low-tier outlets are reporting, then, like, the New York Times and the Wall Street Journal and the Washington Post can, like, report on, like, the crisis

that's happening. And Elon just completely killed that by, like, kicking a lot of people off, de-amplifying thing, community notes. Like, there's so many different changes that he made, just chaos. Yeah, there's a bunch of blue checks. So there wasn't this moment where it's like, oh, well, like a blue check person amplified this hate, like this hit piece on my company or like that was a suit. That was particularly devastating for me because I got my blue check and had it for like three months. Me too.

I had the same thing. I had the same thing. I was like, really? And then Elon just gave it away. Yeah, gave it away. I was like, damn. Yeah, I think a big, I don't think that I don't know how virtuous the decision was as much as it was. I believe there's a factor there, right?

I'm not going to psychoanalyze Musk. Like the logical decision to buy X is one, there clearly was always a lot of potential, right? And if you're worth hundreds of billions of dollars, if you want to make another hundred billion dollars, like you have to take these like colossal bets, right? And buying Twitter and trying to make it a half as big as big as meta as like a pretty good way to try to do that, right?

Who knows if he'll be successful? So there's the purely financial, and like if you overpay for something, but then like make it 10 times more valuable, you didn't overpay. Like you paid like a fair price, right? It was just risky. The other factor is it being like such a critical comms channel for all of what Elon's doing, specifically Tesla, right?

Like the whole, there was years where people were like, Tesla doesn't spend money on marketing. Tesla doesn't do this. And it's like, okay, they ended up like, like their marketing channel was Elon, spreading the gospel, being Elon, and there was a lot of value in making sure that that always stayed the same, right?

Yeah, I think that makes sense. I think I'm a little bit more pilled on like the psychoanalysis side of like if there was going to be like a communist revolution, like it would have started on pre-Musk Twitter. That's right. And he would be the first one to go. And so there's a little bit of self-preservation there. Yeah, yeah.

No, and that's the thing, is that the real answer is probably not that he did it for one specific thing. Yeah, probably a bunch of the smartest business mind, the smartest business mind probably of the hundred years-ish that were on this earth. And he made like a very calculated decision across a bunch of different parameters. parameters and he's fine if people think it's because of one of those reasons but really like you usually don't make a decision just for a single reason yeah yeah yeah and then i do think like he's he's been successful and kind of like just destroying the like cancel culture like boiling pot like it really served as like the kindling but everyone was hoping that it's like and it gave other vCs and permission to so yeah he kind of like canceled dystopia

But I think everyone now is like, we're waiting for Utopia. And it's like, maybe we're not going to get that. Maybe it will, maybe the answer was just like, yeah. Maybe the town square is always going to be chaos. Exactly, exactly. It's going to be a lot more chaotic. And maybe that means everyone uses it a little bit less, or at least like the high signal.

Like the people that are having a really bad time right now are not the Normies on Twitter. Like the normies on Twitter are like, oh, I'm getting like even more entertaining junk. It's like that meme with the guy hitting the bong while these two people are fighting. Exactly. Yeah, yeah.

Getting high off the algo and just. There's a lot of people that are in that boat. And the people that are upset are like this very small niche, like, tech Twitter community that was very interested in, like, sharing links and, like, meeting new people and, like, amplifying small accounts and stuff. And, like, all that stuff is kind of going away. Party around go-to-market strategy probably would have worked that had been much less effective. Yeah.

Where there was a time where if you understood the Algae. and you had the right people around, you could dominate the timeline for an entire day, genuinely dominated, where, like, you could open, you could make sure that when people open the app, they would see your stuff three, four times in a single session. And I miss those days.

That's why we're creating our own channel here. Yeah, yeah, yeah. I think there will continue to be hacks. Totally. Especially in... Like an Excel work. Chaos is a ladder. Chaos is a ladder, right?

And I see a lot of chaos and I see a lot of opportunity. But yeah, I mean, there will be a lot of, like, sludge. Like, the Threadboys existed beforehand. They've clearly amplified in the new era, especially with the RevShare stuff. But then also just, like, the, I think what's really thriving is, like, the culture war political. It's also because we're going into an election, so it's even hotter than ever. But that type of stuff, like, I think there's a lot of people that don't want to see that stuff at all. And so going back to the AI thing, what I would love is, like,

I don't want to go in there and every time there's a new trend, like there's this like hippo mu dang. Have you seen this thing? Yeah, yeah, yeah. Like, I have no desire to see any of that. Like, and I could put in like a block keyword. But like, what if somebody just shares a meme with a picture being like, this is cute? Well, then I'm seeing it anyway.

Yeah, and then you're kind of not in the in the meme sort of network, but then Daniel shares like, Modong is left open AI. Yeah, exactly. It's like, okay, and then now it's back. I want to tell, I want to talk to the algorithm. And I think that that would be the most interesting thing. The cool thing would be if, and who knows if this will happen, but if Elon could sum, I invested in that company Farcaster,

which is like a decentralized, you know, and their whole vision was like, hey, you build one network and then other people can build network, specific networks, effectively on top of the network, right? So if we could take the Twitter social graph and all the mechanics and build effectively our own service for that, like you could bring back OG tech Twitter to some degree, right? It probably wouldn't be that hard, like, you know, to, I mean, it would be hard, but if the social graph is still there, all the users are there, they're just not being coordinated in the same way.

Yeah, there's this theory of like the algorithm store, like you should be able to pick your algorithm or whatever. but I actually would prefer to just basically talk to the LLM like GROC and tell it like, hey, like cool it with the political social, like the culture war stuff. Like I want to see less of that. I know that it's grabbing my attention. And so you're getting this signal that that does retain. But I want you to push back on that in the way that basically. I found the not interested. Does that work? It doesn't work for you all. Like, I've experimented with it where every single time I've seen something about Diddy,

I just click and say not interested in this post. And the next time I open the app, you still see it. There's something else about it. So the only thing you can do is effectively mute that word, but then what if somebody posted a picture of baby oil? Exactly, you get it. It needs to actually.

And that's the issue with Grock is, It's a completely use. It's completely separate. What I want to do is I want to every morning have something scrape every tweet that would be in my 4U page and my following page and scrape all those tweets out and then run those through an LLM that says, would John like this based on what we know about him?

And I've told it a lot about what I like and express those opinions. You can sometimes do this when they, like, when you initially on board, they ask you like, are you interested in sports or technology? and they tell you like, you should follow Cristiano Ronaldo or whatever. Yeah. But like that's not enough.

Like I want to have a much more rich conversation and then have the LLM like kind of score each one based on my individual expression of that. I'm surprised that social networks haven't adopted that because every once in a while. I think it's really expensive. Interesting. Like I think actually like like like right now, all it's doing is just like it's just like, it's just like, Like, you know, this is recommended to, like, this has, this tweet has high retention. When someone sees this tweet, they click on it, they read the comments, it's a good tweet. The average time they spend on a tweet is a minute or 10 seconds.

If it's one second, then don't show to anyone, right? And so they just, they just blast this out. And there's a little bit of, like, fit where it's like, okay, we know that you like a little bit more of this, that more like this. But it's not customizable in any way. Yeah. And really what I want to do is just, like, print out, all of them have an AI do that.

But until that becomes affordable, the next best thing is I just ask my secretary to print out tweets for me and I just read it on paper. And so I have a bunch of these here that my secretary printed out for us to look through. Did you get a chance to look at any of these? Oh, you were talking about your favorite. You would have missed this tweet

if you had your read button on because it's about Diddy. Thank, yeah, thank God I didn't mute it. Yeah, I think this tweet I'll read it out first. Put Diddy, SBF, and Eric Adams in the same cell and make A16Z invest in whatever company they come up with. This hurts because it feels like there's a reality where one of these people would raise from Andrescent.

Well, no, it's more like looking at like the Adam Newman thing. Adam Newman, you know, came out, probably a generational entrepreneur and, like, deserves to come back and raise a bunch of money. Because, like, even though he, you know, there were some issues with how we work was ran, like, that guy just willed something into existence that. And I never had a, I never understood that Adam Newman critique in general, because I'm like, all right, he took a bunch of ugly office buildings and used, you know, Miyoshi Son's money to make. them beautiful and cheap and like available to everybody like how could you hate this guy right these three these three I think harder to harder to defend I mean like the ditty story has become like he's like a murderer now a murderer rapist it's like insane no he's I actually haven't looked into the Eric Adams stuff I haven't looked at it enough either the what's funny is

that like it's not like A16 Z invested in FTX like they they They specifically didn't. And it was because there were so many obvious conflicts, right? Like anybody that would look at, hey, the most prolific crypto hedge fund that does the most degenerate, crazy shit that is antithetical, that is basically like manipulating all these markets also wants to own the biggest exchange. We should fund the exchange. Like, what could go wrong?

But you know what this is, right? Dan Toomey, do you know who this is? No. So he works for Morning Brew. He has a YouTube channel. Got it. Oh, he does some of those videos. And he's like, he's much more like a video creator than like an insider tech person.

I don't think he's done a startup. I think he kind of comes from like the comedy stand up like video world. Now, he's done a lot of research and he actually understands things like really well. But it's just funny that like he frames it as like, oh, this is something Andrewison would do when like I think it's just because like they're a big name or something. It was kind of interesting to like that's what he picked because like... No, I read it as the, oh, you're kind of making a play on Adam Newman, but like... Oh, yeah, okay. Well, no, because that's the most high profile company that Andresa...

They went back to after... Went back to the founder who had had a fall from grace, right? Bizarre. No, but Indrisen doesn't get enough credit for not doing FTX, right? Yeah, totally. Because you know they were pitched it. Of course. Over and over and over and over and over and had to have said no.

No. It's not like it's not like it was an issue of price, right? Yeah. Because that's not the... And their fund was already so scaled, right? Yeah. That was an intentional decision, which is why, from an investing standpoint, you always have to ask yourself, why am I the one that is doing this deal, right?

Like, why are all the... The market's not perfectly efficient, but it's pretty efficient, right? And so anybody who is backing FTX, I mean, well, and Dresen has... their multi-billion dollar crypto fund and has a mandate to be in every important company. Yeah, yeah. Why did they not do it at any point? That's, yeah, that's interesting. Found, I don't think Founders Fund did it either, right?

Yeah, I mean, the, the team always talks about, like, yeah, there were a bunch of red flags. But there's another. There was another thing. I mean, some people passed, I mean, obviously, like, the best people passed just because they clocked SBF is like a fraud. But other people passed because either they were already in Coinbase or what's that? Binance. So if you're in those, you might be like, I don't want to do FTX as well.

People always figure out how to do yoga. Oh, he's building the finance super app. Yeah, it's not an exchange. Yeah, it's true. And then, yeah, I mean, there's a bunch of stuff there. But I think that the, the, the, the, the, the, This reminds me of another story that I don't think is printed out, but is worth covering. Came out yesterday that the FBI is probing this group called Hone Capital for ties to the CCP.

Yeah. And I think it was between 2016 and 2018, Angelus took $80 million in sort of direct investment from Hone. Yeah. under the conditions that Hone could get full visibility into every syndicate happening on the platform. Yeah. And presumably all the data associated with those, which, as you know, is decks, financials, you know, other. You know, basically, so like that to me, that to me is like the biggest story in tech right now. And there's, and there is enough, there's enough people that have vested interests.

angelist. I think it's generally great for the innovation ecosystem and is like a positive platform and force. But that to me is potentially one of the first stories of a series of stories around foreign money and venture that will just continue to drop. I always, I always wonder about the actual impact of that stuff though. Totally. Because it's like I was joking about like imagine you're some spy and you work your way up and you know you wies you your way into a big venture firm and you're like oh yeah I'm with like the top dog like I'm seeing everything I'm seeing everything and then the GP is just like the future is NFTs and you're like god damn it I will never bring honor to be weapons yeah like yeah okay so they steal the code to the the monkey pictures it's like

it's like there are a lot of companies where actually the IP is not that valuable and it's stolen. Yeah, but I'll give you a story that is relevant. So deterrence, defense tech startup was speaking with a high profile rolling fund GP on Angelist. And because deterrence will be doing sort of stuff that's critical to national security, we need to know who your end LPs are. And so we pressed said, on who their LPs were and he basically had to say, I don't know.

I cannot verify that they're not, that it's not Russian money, CCP money, et cetera. And I independently verified with another, probably won't run this, but I independently, between you and me, I independently verified with somebody who work with the fund who was like, yeah, there's Russian money, like 100%. Yeah, I mean, at the same time, like, I get that it's a bad look, but like, I mean, I'm barely, You give the cap table to my own investors. No, but the problem is if that money gets invested into the company, it damages the company. Prospects, right?

Purely brand and optical? Or do you think there's actually a path to? No, USG being like, hey, we don't want to work with a company who's end investors. Sure, sure, sure. Yeah. That's just, that can damage the company. I just have trouble because, like, most investors, it's like you take a small check from them and you never hear from them again. And then a few of them, it's like, okay, they got some

information rights. Like, maybe they get like a PNL. Or like maybe they get a cap table once in a while. But it's like they're never getting access to like the Git repo. They're never getting access. Like they don't have any. They're not badged. Like they don't get to go in the company. And so like I get that it's like a huge problem in like a big thing in like the abstract. But I feel like like even if you found like six degrees of separation, there's some like, you know, Russian or Chinese money in something. I don't know that that's as dangerous as we think it is, as opposed to the more obvious thing of just like,

there's an employee who's been compromised and just has access to the whole network. Right. Like that might be what we actually need to be worrying about, like more. I would say the other... And then there's also like the Chinese and Russian money. There are expats. There are people who are just rich kids over there

who like want to play in this market. They want to leave. Or they like America. and they're just like not actually aligned. Of course they could be turned. Of course there could be spies. Like that definitely happens. And that is an issue.

I would say that, yeah. I would say one, again, all this information is possible to get in numerous different ways. Yeah. Like if you want to find out about a company, almost any company, any tech startup that is like precede through series B right? right now, you or I could get their most recent fundraising deck by the end of the day if we actually wanted to. Yeah. And for 99% of companies,

it's a bad idea to even copy it. For like the rest of the, it's like, for the next, for the next like order or magnitude of companies, it's like, okay, so, you know, maybe there is something there, but like just having the deck isn't enough to really like create some sort of like geopolitical advantage. There's just a lot of steps to like actual like, you know, shifting the geopolitical balance.

I get it's going to blow up and it's going to be really, it's going to be a really big, like, brand issue and it's going to be something that people really have to fight through and, like, work through these questions. It's tough for, it's tough for Angelus because founders already are not generally super excited about their deal going on that platform because of the information issues just getting a thousand. And Carter had a similar thing where they were like kind of selling data or something or like They were trying to do secondary transactions, right?

Private cap tables should inherently be private and owned by the company. And Cardo is leveraging that information to catalyze their secondary transaction market, which was the entire reason that they were going to be a $10 billion company. Because if they become like the NASDA. Because if you're, yeah, like massively that they can make 5% on every trade. They're huge blocks of trades. You could be facilitating billions of dollars of trades a year. If it worked, it would have been...

Much more valuable than just a SaaS product. Yeah, the people that are like, who's investing in Carter at an $8 billion valuation, it's like, well, if you can be the platform for secondary transactions and get 5% rate on everything, like you're such an unbelievably large business. It's insane. But yeah, I don't know. Do we know who was running home yet? Like, is this guy?

There's some dude who was running around, right, investing? He probably was very well-loved. because he's like, you get two million for your fund, you get two million for your fun, we're backing your next syndicate deal, right? It's really like money is like a way to make fast friends in the valley, right? Yep, yep, that's true.

Everybody loves a loose LP. What else should we do this one? Oh yeah, that's great. I mean, so it's funny. I've DM, I have no idea. I actually don't know who's behind the account at all. I don't. But they seemingly came from like finance Twitter

and like just inserted themselves because like, it's one of these things where it's like might not even be a girl. Totally, totally. Who knows? But good, good posts. So Sophie says, I think we can do away with seed series A, B, etc. Either a round is a vibe round or an Excel round. And then Matt Turk says something like this with the midwit meme.

And the midwit meme is just at the early stage it's vibes. In the midwit is XL. It's all vibes. And I mean, we're certainly seeing that with like vibe rounds getting done in the seed stage and then also vibrowns getting done in, you know, tens of billions and beyond. The tens of, those are the real vibe rounds. Yeah. Do you think it just all comes down to the founder's ability to create a vibe round at any point in time?

Is it always better to have a lower cost of capital through a Vibround? ViBron feels like inflated valuation, like higher multiple. When I hear 100x revenue multiple, like that sounds vibe. I think a better way to look at it is does a company have product market fit or narrative market fit? And you actually get crazier multiples for narrative market fit because it's all just. And so an example being if you have product market fit and you, you have two million of ARR and you're adding a million of ARR every three months, you could probably go out and raise it like 60, right?

Somebody's like, okay, like this is, you know, great momentum. This thing's working. If you have narrative market fit and like venture capitalists or sort of applying this lens to your business, which is like this is a crazy new market and a crazy team and they're just going to figure it out, you can also get the 60, right? And so I often think whether it's truly like a PMF round or a vibe round, they get done in a similar range. If the caliber of founder is, is, you know, relatively, you know, equal. The real crazy multiples come when it's both, right?

When you have the product market fit and the narrative market fit. And I would give you, I'd give the example of that company Harvey, which, like, has, they're the, the, legal AI company. And, you know, they have probably 10 million of error or tens of millions. I don't actually know. I think, like, people talk about their metrics, but it's sort of unclear. But the narrative market fit, which is that LLMs are going to dominate the legal industry is so strong that why would you not do this around at 800 million, right?

Like, just crazy multiple because, yeah, they're the category winner and, like, the narrative of tracks. And it's not like the early days of LLM development where, I mean, what, Open AI probably made no money for like eight years, right? It was incorporated in, what, 2016 or something like that, like, as a nonprofit for that reason. And, like, all of those labs didn't really have products that anyone wanted to buy for a very long time.

Right. Even GPT1, GPT2, like, they had APIs. Even the first GPT3, it was, like, kind of cool, but no one could figure out a way to, like, really incorporate it in a product. Yeah, there was a company. this company copied out AI rocketed to like 20 million of

ARRR. Because they kind of figured out how to actually make it. They figured out how to how to leverage the API and it was great. And I think they had to completely pivot because people just started using chat GPT. Right. Because it did exactly that for way less

money. Yeah, there was another one too. Some sort of writing assistant I think it had like one of those personal names like not Harvey but it was like a human's name. Yeah. So I think I think Vibram or Excel rounds is right, but the way to look at it is to say, is this a product market fit, you know, sort of like we're doubling down on this like momentum, like actual business traction, or is it narrative or is it both? And that's the crazy stuff. Yeah. There does seem to be like a certain

type of founder that you can just like will a vibe round into, like Adam Newman to your point. Well, it's category dependent, right? But right now if you're because like, yeah, I mean like we work was not in some like AI mega trend, right? Like, there was no, there was no like mega trend in like, oh yeah, of course real estate in 10 years is going to be completely different. Like, whereas, like, the legal profession is pretty consensus that like the tools are going to get better. Yeah. Who's going to be the winner? How, what will the market structure be? There's a lot of questions there. But you can clearly build a thesis around that. Whereas saying that, you know, the real estate market is going to be dramatically different in 10, 20 years. Like, that's not an

I think it was, the WeWork was incredible product, partially because it was venture subsidized, right? The fact that you could pay $300 a month to walk into a beautiful space and have a desk and have coffee and snacks, like they were just not charging enough, right? And then you combine that with incredible positioning around and storytelling from Adam around what has this actually become. and we work is, you know, a dominant brand within all, within everyone's daily life, right? Like something that is the whole vision of apartments and offices and, you know, it was easy to buy into that when he was adding a new we work every two days. And I'm sure the retention when it was really cheap was great. And, you know, people love the product. And, you know, I think.

So again, that's him. he was forcing the narrative. Yeah. But the product market fit was real. Yeah. He was able to like sprinkle the vibes on top. Yeah, I think it's funny as founders, really convincing founders. The most convincing founders convince themselves first.

And then by nature of being 100% convicted. Yeah. They, like Breslo is a good example, right? Breslo, when he goes out in pitches, is 110% convicted in what he's. saying so much so that other people are like this sounds crazy but like this guy's convinced and he's gotten this far so like why would you not bet on him right i think that wears off eventually you think it wears off just because you become jaded because like you're like as you get further in your career like you realize like wow i was 100% convicted about that particular thing and it didn't

pan out therefore maybe i should be less convicted about the next thing i think it wears off on a founder to founder level, right? Like nobody stopped believing in TK, right? Imagine what Uber would be today. It would probably be Waymo. You know, I think they have a partnership now or something. But, you know. I wonder if there's anything that you can do

to, like, upregulate conviction. Almost like the, it's like the inverse ayahuasca thing, you know? Yeah. I mean, I guess for some of the psychedelics, like, it does seem, you know, there was kind of that counteraction to, Well, like Steve Jobs took psychedelics, and he came back, like, extremely, you know, you know, focused, and probably more aggressive about, you know, I know the truth. I know that, like, this product is the right one.

And he was, like, you know, unwilling to accept a plastic, you know, like a plastic screen on the phone. Like, it had to be glass because, like, that's what he, like, knew to be true. Meanwhile, the Apple designers today are like, we're going to put the can. camera offset from the back of the phone so that people have to buy a case, which is going to increase our AOV by 6% and drive meaningful. Or it's like, oh, you made a phone that like doesn't sit flat and the camera lens sits on the, like, so, yeah, I think the topic of psychedelics is a, is a funny one because I do think that the technology industry has for a long.

time benefited from it, but it actually went too far, right? Yeah. And yeah, the whole ayahuasca by itself, I think, will be studied. Like, to me, that's like the overdosing on LSD of our generation. Yep. Where, like, a lot of people use LSD and, you know, experience some range of benefits from it, right? I mean, the psychedelics might have just straight up been weaker back in the job days. Yeah.

He might have been taking like one-tenth of the dose that like some tech middle manager takes on some ayahuasca retreat. Yeah. Turbo fries their brain or whatever. Yeah, the funny thing about the average, I've always, always avoided it, had no interest in it. And fundamentally, like, you know, would have had plenty of opportunities where I could have, and opportunities where I could have chosen to do something like that. But once people understand the actual nature of an eye. ayahuasca retreat, most of them involve going with 120 to 100 strangers and sitting in a room.

And the stories I've heard of people saying, like, yeah, I was in a room with 100 people, everybody's laying in a cot, throwing up, having an exorcism. The funny thing is, is people end up ultimately losing themselves so much that I've heard of men starting to masturbate in these sort of, like, group and things. I know these two girls that run a popular health podcast in L.A. and they were approached by this, they were approached by this company in Costa Rica that said, hey, come down and experience, like, you know, it's on us, it's comp. And they were telling me the story.

They were like, yeah, a bunch of, like, half the room was throwing up. 10% of the room was just masturbating. And I was like, oh, my God, I'm so sorry. and they were like, no, no, it was incredible. I was like, and what did you get out of it? These people come back and they're even more lost. Like it seems like it sends you down this turbo fry. I think Mark called it turbo frying.

Yeah, it was a Landshark who you posted like the screenshot of Landshark saying like, you know, you get your gigafri your brain. Turbo Normies get their brain gigafried because they're like they're not settled spiritually and they go into this very. And that's the thing with psychedelics. If you are incredibly mentally stable and fortified. Yeah. And you do these things.

It can have a positive effect in terms of helping you see things in a new way. Yeah. You have to imagine that, I mean, I don't know exactly jobs timeline for this stuff, but it's possible that like he had already created a billion dollars. of value and create some of the greatest like advances in computing history ever. And so going into that, you're probably like pretty confident. You're not like, where's my place in the world? Like he's going into that experience thinking my place in the world is to create great technology

and I'm really fucking good at it. And so I'm just doubling down on that when I come out of this. And psychedelics help you see things from new angles. That's the best way that I think for somebody, that hasn't ever tried them to look at it is like you're looking at an object, like you're looking at a computer, and your entire life you've looked at it one way.

Psychedelics help you view it from like this way. And you're just like, okay, what if we made the whole back structure clear so you could see into the machine, right? And it's like that becomes an iconic feature of the product. But it wasn't like Steve went into a cave and then invented computing. Yeah, right? Like it was like he didn't come out with like the circuit board.

Yeah, yeah, yeah. It was more so I think he deserves credit for things like design and deeply prioritizing the user and coming and thinking about products in new ways and delivering elegant versions of that. Yeah, I do have a friend who is already like one of the most aggressive people I now and has always been. And he did acid one time and he, and I was like, oh, what was that like? He's like, yeah, like stuff like, you know, wiggled around. But my number one takeaway was that I need to be more aggressive. It just makes you more of you.

Yeah, yeah. And I was like, that's the opposite of what you normally hear about, where it's like, oh, I was like, it's so at peace with the world. Like, you know, I need to like think completely different. I need to be even more aggressive. It's like already one of the most aggressive guys. Okay, should we talk about Turner's tweet? I kind of like this one.

Do you see this? Tech ecosystems right now. S.F. our most important startup is imploding NYC, our mayor just got indicted for corruption, Europe, we are banning AI, China, VCs are suing all the founders.

Des Moines, Iowa, we'd like to buy 50% of your company for 50K. I think it's great. I mean, it's pretty much do you see the chart of the Chinese startup formation, how it just fell off a cliff and like no one's starting companies there? Yeah, because they can clawing.

So for those who didn't see it, basically if your company fails, they can come after all of your personal assets, which feels fairly communist, which makes sense. Makes sense. But yeah, I mean, I think it's like that's why that's what makes technology beautiful, right? It's not just like people like try to blunt put tech in a single bucket and even to people that aren't in the industry. if I asked me what I do, I say I'm in tech, right? And then they have an idea of what that means. But tech is so different in different, like, it's surprisingly, like, different in different locales, right?

Like, it's still operating. Yeah, if you, the real alpha, the real alpha is to go to the Midwest and just start offering slightly better terms. Yeah, yeah, yeah, yeah, 60K. I'll give you 50 on 500. Yeah, 55K. Yeah. Yeah, I mean, the funny thing is that, like,

These are framed as like they're all in chaos. Like it's all bad news everywhere. Like everything's falling apart. But I read this as like you have to be in a major American city. Yeah, yeah, yeah, yeah. I would choose SF in New York where one startup is employing and the mayor is getting indicted versus banning AI, BC's suing founders or clearly like, like, you know, capital markets that are just like, you know, defunct, basically. It's like, yeah, like, SF, I don't even know if I buy the imploding narrative, but like, if it is, that's a lot of opportunity.

That's maybe creative destruction or creative disruption. Maybe there'll be, you know, other. Time pressing go join Open AI and climb the ladder. That's the long-term, what's your long-term vision for technology brothers? C-O-O-C-M-O of opening-I? Yeah, a more hostile takeover. You know, they always talk about like the, you know, Sam Alman, and if you drop him on the island, he could become like the can. It's like, no, I could even do it better.

I could do it better. The knife. Yeah. Yeah, who knows? But I do think that there's this tendency to latch on to headlines and just everything behind the headline in every single one of those cities, there's amazing companies that are hitting their stride, finding, you know. Except in Europe. Except in Europe.

Europe seems in a lot of shambles. Shambles. It seems. It's not. colonized Europe. They colonized America. It's time to colonize it back. I was joking about like, yeah, like either in Germany or France like, yeah, France specifically like, you know, it just seems like authoritarianism is on the rise. Like they're banning free speech. They're banning like they're arresting

Pavl Dura of the telegram guy. And it's like yeah, every 80 years like America has to go in and like clean it out. Clean house. Clean house. And so like we got to go. This was a fun social experiment. but there's only one form of government that actually works, and we're here to sort of bring it back. That's reinvades. We've brought democracy. We've exported democracy.

It's the greatest export, right? Free markets and democracy. Yeah. But sometimes people forget that. Yeah, yeah, yeah. What else was on the docket today? What else do we have? I had a funny moment today,

or a funny moment this week that you'll appreciate. Yeah. somebody asked me about Excel and blah, and they were like, yeah, I really thought that I've been working on a pouch concept. I think that it could be a really good business to just get to like 40 to 50 million in cash flow.

Yeah. And I was like, yeah, yeah. I mean, that's like cool story, bro. I was like, I was like, you're going to go into one of the most cutthroat competitive industries seven to eight years behind Lucy and then just think that you're going to like ride to like cash flowing some asset from zero as there's all this money coming in and like turmoil and like it made

me think of something that I think is a topic that that more people need to understand is like there's this attitude within like the like startup founder of like I'm going to try to find these like easier ideas and usually usually they land on ideas that are perceived to be easy for some reason which is like okay I get a plastic thing you put nicotine pouches in it I just start selling it yep and I'll get to like 40-50 mil and just cash flow it yeah it's not a venture thing but like yeah and there's this idea too that for some reason cash flow businesses are easier to build when it's like, okay, would you have been able to get, you wouldn't have, Lucy wouldn't have been able to survive

without venture capital to get to the world. Yeah, it'd be impossible. And so I think it's like, it's probably a topic that will, I mean, I just see it come up all the time where people are trying to find easy ideas. I mean, the exception in the tobacco category in the nicotine space is just straight up being illegal. Like, there are companies that cash flow a lot

because they just break all the laws and they just don't do anything. And so, but they're very short-lived. And there's no equity value. And it's not like, I think when people think like a cash-filling asset, it's like, oh, yeah, it'll cash flow for a long time.

Not like, I mean, like, puff bar cash flow for a while. All the vape businesses. Yeah, yeah. A lot of these, a lot of these vape businesses, like popped up overnight. Yeah. Just like completely broke whatever rule was in place. And it's like, well, you know,

big tobacco isn't going to break that rule. Jewel isn't going to break that rule anymore. has been, you know, like, if there's a flavor ban, they can just, like, move around it or whatever. But, yeah, it's, it's wild. Yeah, so that, that was something that came up multiple times this week where founders were just searching for what they perceived to be an easy idea because it was very tangible. Yeah, yeah, yeah. And then you're just like, no, well, you know, you know that this is, like, going to be

extremely difficult on all these dimensions. And you've had a, and in that situation, I was like, best in class team with Lucy that's been executing on this same vision for almost closer to a decade than the first year. And so that was funny. And then the other thing that came up that I think is funny, the text that I sent to, but he was real men raised pre-product because like I have a friend who's starting a new company. And he's like, he's done well previously.

He's like hiring engineers for the new company, but he hasn't raised yet. and I was texting him wanting to invest and he's like yeah we're gonna wait until we get to like some revenue traction and I was like God like it's so soft just like you know like

and that's again like the vibe round versus like the traction round is like I'll give you the valuation that you will get when you have the traction I'll give it to you now but like just fucking send it send it dude race like be a man

like race if you have conviction have some conviction in your idea raise pre-products. Like, it's soft to do anything otherwise. Like, the venture economy depends on people going full send. Yeah, yeah, yeah. You're hurting the economy.

I always laugh thinking about this conversation that Mark Andrewson was having with King Griffin. He's talking about, like, his earlier funds and how he was, like, kind of trading his own money. And then he, like, scaled up the fund, raised, got some LPs, like, got some meat on his so he could like size up the firm and like start going bigger and bigger. And now, you know, he still owns like a huge amount of it. But he was just like, you know, Mark, and obviously, as you know, like, you know, if you don't get some capital behind you, like, you don't go very far. And he just said it, like, it was just like such a truism.

And like, it was just such a funny, like disregard, like anyone who's like, oh, bootstrapping. Like, it's easier and stuff. It was like, no, no, not if you want to play in his league. Yeah, yeah. It was just like, it was just like. Yeah. Obviously you need capital if you have a good idea and are moving quickly and want to actually win and play some deeper, bigger game. But the myth of like, oh yeah, a lot of ventures burn out, therefore some sort of lifestyle business must be easier or something.

I've never liked it. Yeah, the issue when people analyze bootstrap versus venture businesses is they'll be like, look at this business. It was bootstrapped. And it sold for a billion dollars. And they're like, look at this company. this company had to raise $300 million to get to a billion dollars. Discounting the fact that the bootstrap business took 30 years. You know, like they're like, look, they were able to bootstrap,

and it's like, yeah, you'll be 70 years old. You'll be 70 years old. Like, so anyways, real men. I'll just end this podcast by saying real men raise pre-product. Indeed.