TBPN Live - Insurance Companies Deep Dive, Wanted Fugitives, Run On Mahogany, Yearling Lot 1007

Episode Date: January 13, 2025

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Welcome to Technology Brothers, the most profitable podcast in the world. Jordy, why are you wearing a mask? You know, Taylor Lorenz might say my culture is not a costume. But to that, I would say I'm wearing this mask to draw attention to the very real fact that the air in L.A., even though the AQI is a a decent spot is still deeply toxic a lot of the buildings have burned this last week were created at a time when we had very different building codes and so a lot of the materials that were used and uh in some group chats locally that i was in people were i'm actually dying uh no so people were basically saying that that a lot of this stuff is you know if you're

breathing in these toxins uh health issues can oftentimes show up like years and years decades down the line so uh dude you know what blew my mind got these masks for us to record i think i'll take it off yeah we do have we are inside ventilation here but everybody should be wearing masks it's annoying. It was cringe. And when the experts told us to wear a mask last time, maybe it wasn't based purely on... I probably shouldn't...

If we say experts, the YouTube algorithm will probably flag us. Who knows? I think we're already flagged. Anyways, wear a mask if you're around. You know what really makes me kind of terrified is you see these tours of the burned down houses and you'll see the chimney is still there

in most of these houses because the chimney is made out of bricks, but there's nothing else standing. And I'm like, where did the refrigerators go? The refrigerators are made of metal and plastic and they literally just melted and that went up in the air. So you're just breathing a refrigerator if you're breathing the air it's crazy did you see the there were cars

that had i think aluminum uh that melted wheels that just melted crazy patterns um but anyways wild so uh i mean if you want to hear some crazy stuff we should start with this first we're going to do a couple deep dives give you a little bit of history on the insurance industry. We're going to move on. We're going to still be talking about tech this week, but we thought this was an interesting opportunity to kind of break down some founders, investors, entrepreneurs who have had a major impact in insurance, construction, home development, real estate. So we're going to be taking you on a little bit tour of, you know, we always like to ask the question, even in a disaster, like who's making money,

who's losing money. And you heard it on a previous episode, we did a whole deep dive on Rick Caruso, learned about his career, but there are a lot of other people that, you know, their innovations will be important to getting LA back to where it was before the disaster. And there'll be a lot of people

that come in with new businesses. And so we want to deep dive all that and use that as kind of like the theme for the week, more or less. Yeah, and for, I guess, for some context, because we're here in LA, so we've been sort of pretty fixated on everything going on.

But as of right now, they're projecting that these fires will have cost somewhere in the range of $150 billion is the official number. As of now, everybody expects that to tick up over 200 at some point. I believe that Hurricane Katrina was somewhere around 200. Yep. So this will be more damaging than Hurricane Katrina. And then even to put it further into context, the previous most costly wildfire in U.S. history was a campfire, which happened near Chico up in Northern California. And prior to that, and another more recent event was the Lahaina fire, which was $6 billion.

And then under that is the Woolsey fire, which actually burned down the house that I bought last year. It had to be completely rebuilt from the ground up. So just to put this into perspective, Lahaina fire was devastating, but it will be a tiny, tiny, tiny, tiny fraction in comparison to the damage caused by the L.A. fires or the Newsom fires, as I think we're calling them, or the Bass fires. Simon was putting the word out to ask, you know, what we should call them. But without further ado, why don't we, we want to kind of get I got to read about a historical fire first. Because it's I mean, this, like the real definitive story of the Palisades fire has not been told yet. um two years ago there was a massive fire wildfire in australia and the economist wrote a really really eloquent and interesting deep dive on what happened and how they're changing things going forward and i think there's a lot that you can learn

about it say australia is the most is the world's most fire prone continent when temp when temperatures rise and the hot winds blow a lightning strike or cigarette butt tossed thoughtlessly out of a car window can spark a flame that rapidly burgeons into a panorama of hell. I love this writer. He's so good. Temperatures at the heart of the blaze rise to 1,600 degrees Celsius, hot enough to melt steel. These hurl dry lightning and bursts of hot air earthward, stoking the conflagration further. Hundreds of these fires burned across Australia in the Antipodean summer of late 2019 and early 2020. There were a bunch of volunteer firefighters described being caught inside fire tornadoes, their engines overturned by vortexes of scalding wind um as residents engines overturned is insane yeah as as residents made their escape they saw the aluminum wheels of parked cars melt and run down the gutter like water um by the end of summer australia lost 34

people and approximately 1 billion animals isn't that that an insane stat? It's crazy. And then, uh, they go on to talk about how the smoke was so large, it reached the North pole, possibly for the first time. And, and, and the question is how do we survive this age of fire, the pyro scene. And they go into talking about some of the uh uh the original people who settled australia have a whole bunch of uh firefighting techniques uh and it all starts with just being able to under look at a mountain and understand is it ready for a controlled burn is the ground wet enough so you're supposed to burn when the ground is wet. So just the top burns and it doesn't get as hot. Uh, and he has a bunch of this dude, they interview is like such a bad-ass, a tall, broad shouldered, 48 year old Australian, uh, Victor Stephenson believes the solution to

Australia. Yeah. Uh, victory. Yeah. Um, believes the solution to Australia's blazes lies in his people's ancient understandings of their lands. Australia's native flora evolved to thrive in fire. Banksia, a type of evergreen bush, holds their seeds in woody capsules. And these open like cooked mussels when they're scorched by flames. And the seeds are released onto the cleared ash. So that's a big issue. That was a big issue this last week is eucalyptus trees, which we imported.

Apparently, when they burn, they have this sort of toxic oil that gets released that's super flammable. And so it's been very clear that the landscaping that you use, the vegetation, it's a good argument to say we should just eliminate all eucalyptus trees. Yeah, I mean, here it says some eucalyptus species require burning to make new shoots sprout like you're supposed to burn them regularly and so they're not if they're in an area where there's enough fire prevention to not have regular fires they're just going to build up and then it's just a tinderbox yeah really really bad um so yeah so it's so wild too because all this stuff was super top of mind because I just went through the process of getting home insurance and I almost had to use the California Fair Plan. And I ended up finding another provider. But the California Fair Plan, which we'll get into at the end of this episode, is probably bankrupt I mean it's bet definitely it's kind of this weird public-private group but it's probably do do a yeah but anyways this guy is

such a Chad he says if you can't burn barefoot you're probably doing it wrong just like yeah I'll go out and do a controlled burn barefoot because I'm so confident in the way that I can burn that the ground's not going to heat up and I'm going to be able to get out. No problem. Just like really into like he's almost like it's like he's farming. Yeah. Yeah. Reading the country.

This involves he says there's a central principle of fire management. Read the country. This involves examining the distribution of trees, bushes, and natural fire breaks, the thickness of undergrowth, and the amount of moisture in the ground to ascertain whether a fire will remain cool and under control. Every landscape is different. Each burn requires a fresh analysis. And so this dude just goes out there and burns stuff. It's pretty wild. But we should move on to the insurance industry, which is, as you mentioned, likely bankrupt in the sense of the state-backed one. And there's a bunch of interesting verses of that. I think we should do the history of State Farm and some of the insurance agencies as well as talk about the government's depth in.

Yeah, we'll start with some of the history. Yeah, let's start with the history and then we'll go into kind of what's happening on the ground now. So I found this short transcript from Warren Buffett at the- Camry driver? Yeah, Camry driver. At a shareholders meeting.

And he says, the history of insurance is quite interesting. It's not studied at business schools, but it should be because the great insurance companies of the early 1900s, Aetna, Hartford, Travelers, they had agency forces nationwide and primarily wrote businesses back then, wrote property business back then. So property insurance, they wrote a lot of fire insurance. Of course, the automobile emerged in the early 1900s. So their focus was on property insurance.

They had huge agency forces throughout the United States. Property insurance agents represented these big companies across the country, and they had plenty of capital. If you look at the business in 1997, well, over 20%, probably close to 25% of personal auto and homeowner's insurance was written by State Farm. It began, I believe, in the 1920s with a fellow in Bloomington, Illinois, who we'll discuss, George McCurl. Yeah, Bloomington, Illinois. It had no agency force initially and started as a mutual company with no stock options or capital that could make someone a billionaire if they built the business. So this company began without the usual capitalist incentives that we are taught, that we are taught are essential for growth.

And in a huge industry, it became a dominant player. So it's questions like, how did this happen? We'll talk about this later, but there's an emerging company in the home insurance space called Kin that has this structure set up where the premiums are paid into this sort of non-profit group and like structure to to put it sort of plainly and then that non-profit pays a licensing fee to the technology company but like really they're so it's trying to align incentives so history of insurance is like finding these it's it's finance it's finance so it's finding these like weird creative structures

in order to deliver the end thing, which is protection against, you know, catastrophic risk. I mean, he'll go into more of this, but it's a great question. It's like, how did this company get so big and dominant without the usual capitalist incentives? But what's funny is like, you already know this is just going to like

tie socialists in knots because there's already so much misinformation about like, oh, like Fidelity owns every company. It's the most powerful company in the world. And it's like BlackRock, BlackRock, same thing. And, and, and this is one of those things where it's like, well, you know, or like, like State Farm is owned by the policy holders. Like it's a mutual company. So like, it's going to be much, it should be much harder to make the like

evil capitalist argument, but they're definitely not going to like look that deep into this. But we will. We'll put it, we'll keep in the truth zone as much as we can.

So State Farm has more than twice the market share of Allstate, the second player. It became the dominant company against deeply entrenched competitors with strong distribution systems

and ample capital. Incidentally, on the Fortune 500 list, State Farm has the third largest net worth of any company in the United States. This was a couple of years ago. All from Bloomington, Illinois, started by someone who had no money in it. How does that happen? That's a subject worth studying in business schools. Darwin once said he wrote down any evidence that conflicted with his convictions within 30 minutes because the mind quickly rejects contrary evidence to cherished beliefs. Isn't that cool? I think that's a great, I think that's a great,

like just thing to do. Like when you find evidence that violates your, your, your strongly held beliefs, you just have to write it down because otherwise you're, you'll just be, Oh, I can't even deal with that data point because it violates my current worldview. I love that one. And so

he says, this is Warren Buffett going on. There are some long held beliefs in business schools that could be challenged by studying how a company becomes the third largest in net worth with no apparent advantage at the start. Another company in Texas, USAA, the United Services Automobile Association, has also been- By net worth, do they mean- He means market cap. Market cap.

Yeah, he means market cap. He's just using net worth, which is also kind of badass. They're the same. Corporations are people. Corporations are people. Great people. So USAA has been enormously successful with billions in

net worth again and highly satisfied policyholders it has the highest renewal ratio in the country nobody studies that to my knowledge geico's founders leo goodwin and his wife left usaa in 1936 and started geico with almost no capital now we have about 2.7 percent of the auto market and we'll probably write 3.5 billion in voluntary auto insurance this year. Catching State Farm will be very difficult, so I won't predict that. However, I do predict we'll gain substantial market share over the next 10 years, including this year. We have a good mousetrap.

And then this is the best part of this. He basically goes into an ad read for his company Geico. Listen to this. Where was this again? This was at the Berkshireico. Listen to this. He says, I mentioned- Wait, where was this again? This was at the Berkshire shareholders meeting. The main meeting. Yeah, the main meeting.

So he's talking about- All the people that are a hundred. So this is an example. This is founders. You can never over-promote. Yeah. And investors. Yep.

You can never over-promote your bags. Never, never. So he's literally at the Berkshire Hathaway shareholder meeting. You have to be a shareholder to be in that room. To go there. And he's still, I want to take a quick second to talk about Geico. Basically, he says, I mentioned in the report that 40% of you would save money by insuring with us.

Literally, that's what he says. Not 100% or 80% because there are certain areas or professions where someone else can offer a lower price. But across the country and for all classes of drivers will often have the lowest price we can do that because we have low costs and those costs are getting even lower we have a virtuous cycle feeding on itself so geico will grow significantly still state farm is very tough i'm not going to predict catching state farm or all state but we'll catch somebody charlie you want to add anything isn't that It's just like 40% of you guys could save money by searching the Geico. That reminds me of when we did a ramp ad during our talk at Hereticon.

Yeah, exactly. It was a great ad. Yeah, yeah. Yeah, I mean, honestly, advertising to the targeted audience is... Anytime you have a captive audience, it's your duty to promote. You got to. You got to run an ad. And so Charlie says, I love your example of

State Farm. The idea of picking an extreme case and asking what in the world is going on here is the path to wisdom. It's too bad many mutual companies are trying to demutualize, spurred on by consultants instead of looking at State Farm. Of course, not everyone can be State Farm, but that place embedded fundamental values into its operations, the way it selected its personnel, the way it selected and discarded agents. It requires enormous discipline. Wouldn't you agree? Warren says, yeah, somebody obviously did something very right. Charlie goes back to say, exactly.

But I don't see anyone explaining what that something was. Maybe they don't want to because it didn't fit the conventional pattern. When a company like State Farm emerges, you should try to understand it. When a company like Geico emerges, you should do the same. Back in 1948, I believe two-thirds of Geico was for sale because the original backers who came from USAA had died. So they put the money in because the Geico founders came from USAA. They put in so much money that they own two-thirds of the company.

And they were like, let's sell it. So they were selling that stock, but nobody wanted it. And apparently, State Farm had the opportunity to buy two-thirds of Geico for like a million dollars. Crazy. They didn't buy it. And so Ben Graham bought it. Ben Graham, of course, Warren Buffett's mentor or wrote the father of investing, value investing. He spent six months trying to sell it.

What Senra is to podcasting. Exactly. Ben Graham is. Yeah. We're kind of like the Charlie and Warren of podcasting. He's the Ben Graham. Exactly. Let's canonize that immediately uh uh so uh he spent six months trying to sell it to the major insurance companies they all passed even though they could see geico offering a much cheaper product on a small scale and making money with it so they had this like geico had this early traction this product market fit basically yeah like they were

doing something that was cheaper and better and they scaled up i i still use geico for auto and um every time i go to agents to get alternative quotes i'm like do you have like did you add a comma here it's like oftentimes like four like five times more expensive yeah is this a joke so they could have bought the entire company for 1.2 million. Instead, they stuck to their old distribution systems and got beaten up over the years by these new ideas. You have to look hard at what's really happening. This is a great ending. He says, as Yogi Berra said, you can observe a lot just by looking. I love that.

So the question is, who started State Farm? And how did he build such a great business and such a massive business without this economic incentive? And I have a theory, which I will tell you. So this is a great one. We'll go through the Wikipedia and we'll go through some of the details on George. I got to pronounce this.

McCurl? McCurl. George McCurl. McCurl. I think it's McCurl. We'll work on that, but we'll just call him George. He's a friend.

If somebody wants to build a rapper that just helps us pronounce exotic names, we would use it all day long. Okay. So I'm going to call him George, founder of State Farm. George was a second generation farmer in central Illinois whose family migrated to the United States from Germany. As an early owner of automobiles, he became concerned with high cost of auto insurance charged by all stock insurance companies at the time. And so this is from an amazing website. It is the Insurance Hall of Fame. Which everyone listening to this

should aspire to. If you're in the insurance business, you got to go. Even if you're not, even if you're not, I mean, I mean, you have a better chance of getting into this Hall of Fame than most. Yeah. I would imagine. And there's's a there's a great thing about like why he started this so he was upset he was upset with the high cost of auto insurance and what he realized was he was he was a rural guy he was out in central illinois and what he realized was that the the uh insurance rates were being set by companies that were based in urban settings. So it was like a Manhattan company. And they were like, well, in Manhattan,

you get in car accidents all the time. So this is the rate we need to charge. And he was like, you're screwing my boys out in the farmland. We're subsidizing your crazy. Exactly, exactly. And so, and I also, I found something else. I don't know where it is, but it was like, he was obsessed with, yeah, okay.

So after returning to Illinois, he sold tractors and discovered that he had a skill for selling to farmers, believing that city insurance companies were rooking farmers with high premiums based upon city driving accident rates. He became obsessed with the idea of starting his own insurance company an honest insurance company was the phrase he used great line um and and they talk about it was something i read where he was talking about his time as a uh a farmer and he was just like obsessed over like the yield of like his beans and stuff and everything about this just reads wait giga autist that's my theory one of our listeners, all the brothers are obsessed with maximizing the yield on their beans. Exactly.

The beans are just different at different times. Yes. He was just, he was clearly autist. Clearly. Clearly. Just grinder. Grinder. And it's amazing.

So he starts, so he starts this company in the spring of 1921. Tazewell County Farm Bureau organized a township mutual insurance company, which was the idea George used. He'd been considering a mutual insurance company, which is owned by those who are insured through a membership. The Tazewell company was set up to insure property, including automobiles. He attended a meeting of the Federation of Mutual Fire Insurance Companies in the summer of 1921 in St. Louis. He spoke with the president and those discussions helped crystallize his idea of starting an honest insurance company. Eventually, his idea started to take shape and he opened his first office in late 1921 in Bloomington. In 1922, he developed a prospectus and presented it to the Illinois State Association of Mutual Insurance Companies. And his plan called for his company to sell automobile insurance. The

association enthusiastically endorsed the plan. He proceeded to get the state license he needed to operate on his 45th birthday. State Farm Mutual Automobile Insurance Company was in business in 1920, 2020, 1922. So yeah, deeper into his career, still made a major play, made it work. Common, very common story. He attempted to adopt programs that gave financial strength to his growing

company while providing unique benefits to policy holders beyond what was offered at the time. For example, he adopted a strict no drinking and driving provision to reduce accidents because it was legal back then isn't that amazing he's like this is innovation if we can just get our members to stop boozing at the wheel no hey he's giving he sends a pr newswire unfortunately i have to announce that we will not no longer be allowing road sodas for our policy it's so funny because like now you know there's like those like chips that you can

put in the car it goes in the odb2 port and like it tracks your driving and if you're like breaking really heavily like raising rates or like you know all sorts of things oh it's a red sports car you're more likely to get pulled over that stuff yeah yeah all sorts of stuff and like check your phone. There's Metro Mile where if you drive less, you pay less insurance. There's like all these different schemes that like are trying to squeeze like the last 5% of productivity out of the auto insurance industry. And he's just like, what if we didn't drink and drive? Metro Mile is Chamath.

Dave Friedberg. Chamath. And Chamath took it. Oh, yeah. They're one. He said it was their Geico. Yeah, yeah. That's what he described it as. That's cool. Wait, Friedberg and Chamath took it. Oh, yeah. Their one. He said it was their Geico. Yeah, yeah, yeah. That's what he described it as.

Yeah. That's cool. Wait, Friedberg was it? Yeah, Friedberg founded it. He co-founded the company. Yeah. And Chamath SPAC'd it. Yeah.

And cool idea. I think the stock's way down, but I don't know. It might have popped. All these SPACs are coming back, baby. SPACs are back. A lot of them. A lot of them have gone up like five x i i bet i i bet you if friedberg friedberg is the founder there's probably a like some fundamental like

good quality i remember talking about that yeah um uh that's cool yeah um so he also it's actually interesting i bet you there will be a bunch not a a bunch, but at least a handful of Chamath SPACs where if you buy them now, they'll be like a 50 bagger. Yeah. And then Chamath and however long will be like, see, like another like. Yeah. I mean, also a lot of these like they became such memes, like the whole meme of like, oh, everything Chamath SPAC is bad. It's like a lot of these got just oversold because I mean, I had a buddy who SPACed his company. I think it was four billion is the default SPAC it went down to under a hundred million dollars They had two hundred million dollars in cash on the balance sheet. Yeah, it's like okay at that point like the book value should be

high same way so the Close friends business partners Brian and Druva yeah parents they had latch which moths backed and then Brian and Druva had a deterrence. They had Latch, which Moth specced. And then at one point it was trading for less than their balance sheet. But there was no interest. Everyone was doomer on it. He also instituted the first installment payment program

for premiums. This allowed farmers to pay their premiums when they received payments for crops so he's like financializing things figuring out it's like buy now pay later this guy is the epitome of of excellent capitalism built a super massive impactful company but clearly at every point was trying to find these win-win-wins for the company, the team, the policyholders, the customers, and ultimately people out on the roads with that auto policy. There's a good quote in here. So eventually, his company became the largest property and casualty insurer in the United States and one

of the 20 largest corporations in the Fortune 500. What a badass um let me pull this up george so he had this great quote they asked him like you know what is your uh what is your secret to success and he says you know hard work is important but he put it this way he says a man has to live and sleep with his business if he wants to make a go of it you have to take it home with you at night so you can lie there in the darkness and figure out what you can do to improve it that's amazing isn't that so true it's so real it's so imagine imagine having to build companies pre-cell phone yeah just think about after like after 6 p.m every night how many messages we send back and forth yeah on a given night it's probably like a hundred yeah so from year to year we are learning that service carries

with it its own reward and to the extent and manner in which our service is dispensed compensation in every form will flow and so i'm sure he wound up you know fabulously wealthy just through a little bit of a different uh different path than usual uh also interesting is uh he um there's like this trend that uh charlie munger mentioned which was like demutualization like a lot of these mutual companies are are demutualized demutualizing demutualizing um like breaking and just becoming like default for profits and uh it's interesting because uh everyone's looking at the open ai uh for profit transition is like it's never been done it's so crazy it's like i don't know like there's a lot, it had never been done. It's so crazy. And it's like, I don't know. Like there's a lot of companies that have been through this.

It's not that, it's not that unprecedented. You start a company one way. It's hard to do it with a guy with the biggest megaphone in the world. It doesn't want you to do it. It's a little rough when you're getting the crying emoji under every time you pose. It's gotta be a little rough.

Mogged, mogged, mogged. But yeah, and there's a bunch of other stuff about State Farm in here. Now they employ 70,000 employees. They have 19,000 agents, offices. I'll get into it later why the agent model ends up being, makes insurance pretty hard. Yeah. So 80 billion in revenue, six billion in net income, total assets, 300 billion and total equity, 100 billion.

But that that total assets is is is important because when something like the Palisades fire happens, You need to be able to absorb that. Yeah, I mean, there was a lot of news about State Farm like stopping to, like canceling policies basically in the lead up to this. But, you know, I think, what did Warren Buffett say? They have like 40% of the market or something like that at State Farm, maybe a little bit less. State Farm was especially, I mean, the challenge was that they had 1600

policyholders in the palace oh it's lots of concentration so huge concentration there i mean i doubt it was even concentrated for them it's more so that that 1600 homes is billions of dollars yeah yeah and so i uh i i wonder like you know how even i i wonder how the ability of the company. The house in succession that Kendall Roy is posted up in when he's going through his summer arc at one point. I haven't seen that season. I just watched the first season, I think. Weird, but okay.

But anyways. But I'm familiar with the house because the TFL bought it. $125 million home. Wow. Obviously takes a special insurance relationship to insure something like that, but burn to the ground. Wow.

Um, from a guy who teal fellow who specced his company, Luminar, Austin Russell. Um, anyway, uh, is there more stuff that we should move on to there?

Should we talk about how insurance underwriting works and how these natural disasters are categorized? Start there. And then I'll get into some of the more detailed stuff. So I've been doing more of a deep dive on this. I listened to an Odd Lots episode where they talk to someone who works, who maintains a database of catastrophes and hazards uh for the government so this is melanie gall she's a co-director of the center for emergency management and homeland

security at arizona state university and i don't think about like wildfires as homeland security but it makes so much sense uh and she manages a database called SHELDIS, the Spatial Hazard Events and Losses Database. So she's not an economist or a policymaker. She's a geographer. And she wants to just collect as much field data with GPS after a massive flood event, put it all into these databases, and then that is used for underwriting and actually calculating what is the right level of investment. And so Tracy Alloway on Odd Lots says,

I read that the National Climactic Data Center estimates Hurricane Katrina losses at around $125 billion, while Sheldon says around $80 billion. How do we end up with such big discrepancies? And I'm sure we're going to see this with the Palisades fire. We already are. There's numbers out there for Katrina that are around 200.

Yeah. So who knows? And so Melanie says it can matter when a community needs to justify a mitigation investment and must do a cost benefit analysis. Different entities measure losses differently, whether it's direct versus indigrect or insured versus uninsured. NOAA's billion-dollar events estimates often exceed ours because they rely heavily on insured losses. We only look at direct losses. In the Palisades, I think there's 20 billion of insured losses, and then there's a bunch of other losses that just weren't covered for one reason or another. This particular database, SHELDIS, is a more conservative approach. If we see competing estimates, we use the lower one to avoid overestimation, which can further understate the real burden. And that's just kind of like by

design of this particular database. Obviously, all the insurers know about the different databases and can adjust accordingly. And so Joe Weisenthal asks, like the big question is, are natural disaster costs going up? Is it really getting worse or is there just more media attention? And Melanie says, yes, it is getting worse. The risk is going up. We see more frequent and more severe events, but it's complicated. Our loss is higher because there are more events or because more people and property are concentrated in risky areas. Maybe society doesn't invest enough in mitigation or our infrastructure isn't resilient enough. It could also be that we have more socially vulnerable populations

who struggle to recover. So yeah, if you go and build like the most insane billion dollar mansion out of birch wood in the most fire prone area, like that's kind of a choice on us. And it's not necessarily like climate change that's causing that higher loss. It's the choice that we made to build into the wildfire area. And this is a lot of what we're ha what's happening as Los Angeles expands is that people move deeper and deeper into the woods and into the mountains and all of that is much more risky. Well, to be clear, some of the nicest areas of la are in these canyons and up on hills and it's uh the places

that are some of the most desirable places are you know dhh's like malibu lookout right yeah yeah so uh tracy asks if a hurricane hits florida how does a typical homeowner expect to be reimbursed? My understanding is that there are many layers, private insurers, federal support, and reinsurers behind them. And Melanie says it's complex and varies by state. In Florida, you'd usually have homeowner's insurance, flood insurance from the state, from the federal government, though purchased through local agents. So you actually go to your local agent and they act like a normal insurance agent, but they're just selling you a federally backed policy. And sometimes you might have separate wind insurance in Florida. Different policies might

kick in depending on whether damage is classified as wind or flood. After Katrina, some neighbors saw their wind policies pay out while others were told it was flood damage, which wasn't covered. It's not straightforward. And so the big question is why are insurance rates skyrocketing now? Homeowners, Florida homeowners insurance premiums rose 42%. Why are companies leaving instead of just charging more? So insurance companies explain that they face higher risk, wildfires in California, hurricanes in Florida, plus higher building costs and higher premiums for their reinsurance. So there's basically two big reinsurance companies, Swiss Re and I forget the other one, but they wind up insuring. And to define it, reinsurance is insurance that insurance companies have to get. So you got insurance,

what's that exhibit meme that's like a 20-year-old meme at this point? It's like, I got insurance for my insurance for my insurance. Basically. And so what's interesting about California is that legally the insurance companies were never allowed to pass on the reinsurance costs

to the end customer. And again, like, you know, nobody really likes their insurance company. Every time they have to interact with an insurance company, the NPS score actually goes down because you always are going to be like somewhat disappoint. You just had this loss and then you're dealing with this company that that's trying to, there's sort of this misaligned incentive and that the insurance company basically wants to give you the lowest amount of money possible to not really piss you off as a customer. Right. But the more money they give you as a payout, the less profits that they

have. Right. So it's this delicate balance. And that means that pricing is, is the number one thing in insurance. And if you misprice these things it ends up uh but the thing in california that is um fascinating is everybody's like oh all the insurance are pulling out of california because of the wildfire risk uh the reason that they're they were actually pulling out is that there was structurally a number of laws in place one couldn't pass on reinsurance costs uh there, there was, there was, um, measures to prevent like the rate at which you could increase the cost. And so if inflation over the last few years has been insane. So if you can't accelerate insurance to, to keep up for that, to keep up with that, like you're going to have a tough time. One thing that was interesting as of last year, I got this on odd lots as well.

Policies in California were only $30 higher than the national average home insurance policies. In Florida, they're $2,000 higher. So Florida markets like really much more efficient and sort of caught up and said, this is a high risk area. We need to price this this higher um but uh statistically the the insurance providers in california have and and analysts have said that insurance providers are six they basically need to catch up like they're 60 behind on pricing so everyone knew that california home insurance rates even though they're already expensive were were too cheap. And the regulators had introduced something called Prop 23 a long, long time ago that did not allow the insurance providers to use catastrophe modeling and climate science to set premiums.

So it's basically, so our California lawmakers were saying, hey, we just don't want you to charge a lot for insurance. So what we're going to do is say you can only set your insurance premiums based on how much you paid out over the last 20 years.

And that works when the future looks exactly like the past. But in a scenario where maybe the government is under investing in wildfire mitigation. Maybe we have we've had more wind the last 20 years, 10 years than we've had for the past 50 years on average. Right. Yeah. And so these insurance companies pulled out because the government literally was not allowing them to raise rates to a level that they were comfortable with. Right. And going back to an earlier point, insurance is all about, you know, accurately pricing risk. Right. And finding that middle ground so the insurance company can make money so that they deserve to exist.

And the consumer can and the consumer can, you know, get get sort of payouts as needed. Yeah, they've been kind of getting squeezed on both sides because it's not just that the risk of the houses getting destroyed or burned down is going up, but also because of inflation in both raw materials and labor, the actual cost to rebuild is increasing. And so if you just see the price of wood double, you need a high, like it's more expensive.

Your insurance should be more expensive. Yeah. And so one of the other interesting things is there's this dynamic in the insurance market where, uh, the, the, the, there's a first mover disadvantage. So if you're the first, uh, home insurance provider to increase your rates, well, I don't care who insures my home as long as I believe there'll be able to pay out in a disaster or some type of adverse situation and so if i'm with all state and then state farm you know if i'm if i'm with all state and and whenever my term is coming up i think they're annually typically and they go okay we're raising you know 20 and then state farm is saying well like we'll give you this rate you'll just switch because it doesn't, you don't really, it's not like top, it's not even like,

like picking furniture in your house. Furniture you have to live with every single day. Insurance you don't have to think about unless there's an issue. And so because the contracts are not, you know, very long, switching costs is low and everybody works with agents, the agents will just be like, oh, you don't, you're not happy with this new price. I'll give you this new price. And so there's this weird dynamic where nobody really wants to raise rates, but you have to. And so what that led to is saying, hey, if we raise rates the way that we need to, we're going to lose. We won legally can't. If we could, we'd lose a lot of our customers. So we're just going to pull out entirely. And for State Farm, it was obviously the right right decision and now we're in the situation

part of the crisis is that there's just this um there's not a there's not enough people insuring homes in this area of southern california right when i ran this process last year i was only able to get to the fair plan which was a state provide state, uh, California state program. That's a insurer of last resort and some random other group that I ended up going with. And, um, and so I think it was 20% of the, um, the worst areas affected by the fires in the last week, 20% of those homes were on the fair plan. And so that now needs to be figured out. And it's, again, it's state sponsored and theoretically state backstopped, but then it's sort of provided by these private companies. But so we're going to

see how that plays out. Yeah. There's an interesting discussion in here about how can, like once the insurers actually pull out and say, it's just interesting discussion in here about how can like once the insurers actually pull out and say it's just not economical for us to participate in this market, how can states get insurers back? And there's this interesting example because you don't think of, you know, California falling behind Louisiana, but Louisiana gets cited often for good policy choices. Here's the example. The state helps cover certain levels of risk and they have an insurer of last resort called Citizens. Unlike Florida, Louisiana's Citizens must offer premium slightly higher than the private market. So it doesn't undercut private insurers.

Yeah, because it's this weird dynamic where you're like, wait, is the state competing with us? The state doesn't want to compete because they don't want to really be in insurance yep and so here's the crazy thing so uh the california insurance commissioner is this guy ricardo lara and his task his primary task has been how do we win back home insurance you know how do we uh uh, providers to California. And so he actually released a new regulation in December of 2024. You can find all of these, um, wires that were going out in mid-December and literally on December 31st, about a week before the fire started. And he was creating, you know, this new regulation would allow insurance providers to use catastrophe modeling and climate science to set premium prices. And the timing of this is just devastating because, you know, he basically, you know, he probably, that probably would have needed to happen like a year ago for the changes

to go into effect for people to get proper insurance. But there was basically a weak gap between that new regulation and the fires hitting. So just not enough time to respond. I have a bit more on how. Yeah, keep going. So, you know, one thing, the other pressure on insurance providers over the last few years. And basically, they were talking about this on odd lots, but, but basically, uh, insurance is finance, but it's like the least sexy part of finance, right? Like nobody's like, I want to go into finance. Yeah. I,

everybody's like, I want to be a finance size sachs investment lord i'd rather sell you know insurance or i'd rather work for one of these big um insurance brokers or or you know providers and uh one of the challenges from the last few years is uh as we there's been two factors so um there's been a capital supply shock, which is interest rates have gone up. And so these mutuals and insurance providers, they hold a lot of bonds on their balance sheet. And so as interest rates have gone up, the value of those bonds have gone down. Second is anybody that is financing these insurance companies is effectively getting paid for taking on climate risk, which is appealing when rates are near zero or 2% or whatever, but then because climate risk is not associated with, you know, it's disconnected from the Fed. But as rates have shot up, everybody's

like, well, if my risk-free rate five and a half percent, why do I want to take on all this climate risk in a time when climate catastrophes have been accelerating? When, uh, it just starts to not, um, make sense. And so people will just look for other places to, uh, park their cash. Yeah. I thought this other piece in the New Yorker breaking down Hurricane Milton was pretty instructive in terms of what we could see going forward. So for those who don't remember, Milton came in the wake of Helene. This was back in October of 2024. We saw some crazy Wi-Fi money kids setting up Starlinks to continue sports betting. No, not even just sports betting, selling courses on how to sports bet. Courses. Using the hurricane to sell courses on sports betting. He's like, I don't have power. I don't have internet.

Definitely a hustler. But I'm committed to the hustle. But after the disaster in Florida, Joe Biden toured the damage, and the unofficial death toll rose to more than 20 and more than a million Floridians were reported to be without power impacted by the storm, although major was less severe than some forecasters had feared. But with Milton coming in the wake of Hurricane Helene, which has devastated parts of Florida, North Carolina, and other states, the 2024 hurricane season represents a threshold crossing of sorts. It

became this massive political issue. Trump said Kamala spent all her FEMA money, billions of dollars on housing for illegal immigrants. And yeah, that's another crazy stat, by the way. I've been asking people. So we spent $3 billion on wildfire prevention last year. How much in California, how much do you think we spent on benefits for illegal immigrants

oh yeah it's like 50 right 30 30 billion so we spent we spent 10 times as much on benefits for illegal immigrants as we spent on protecting uh you know citizens from and taxpayers from wildfire so yeah seems like that that could uh shift and uh hilariously in the new yorker they reference marjorie taylor green saying yes they can control the weather and this became i think she was quote tweeting augustus i think this was like a whole augustus arc uh because there was uh there was a whole like this it's pretty it's pretty cool that anytime somebody talks about the weather they have to quote tweet augustus now he basically runs the weather yeah yeah anytime it rains or it doesn't rain you have to talk to augustus um but it became a massive culture

war issue uh a lot of republicans were saying like the democrats planned the hurricane um but then afterwards it was all about um the disaster relief fund and uh the although you know there's like a question about like the FEMA money technically is a different account than the housing for illegal immigrants money. Um, but the disaster fund was empty and so Congress needed to replenish it. And, um, and, uh, the, the government was like out of session. And so, uh, house speaker mike johnson had to bring the congress back into session and uh and that was kind of like slowing down the topping up of that fund but again it's just like there's just more and more pots of money that just go in and once they go in how much of it

actually goes to helping people um in the degraded political environment making sure that fema was added has adequate funding and that effective policies are in place is far from a trivial matter. Definitely agree with that. And there's some interesting context on what's happening in the insurance market. Broadly, as major insurers pull back from areas of high risk of any climate disaster in states like Florida, California, and Colorado, finding affordable home insurance policies is becoming more difficult in many other areas. Two, according to the Consumer Federation of America, from 2017 to 2022, just five years, average premiums rose about 40% faster than inflation, not even inflation adjusted, still 40%. And government figures show they've continued to rise rapidly since then.

With effects of climate change intensifying, the risks and insurance problems associated with them are no longer just coastal. They affect everyone. Yeah, part of it, there was, I saw something about how in Tampa, insurance rates were steadily going up like 10% a year, and everybody's freaking out, right? Because they're like, what are these insurance companies are gouging us yeah simultaneously property values we're also doing almost exactly the same thing so yeah it's not like the whole uh as i my you know as a as an entrepreneur when i

anytime i get to know insurance businesses obviously warren buffett and uh people have done very well in insurance. But when you study these businesses, you're not thinking to yourself, I'd like to get into the insurance business, right? Because there's been periods where an insurance company has done billions of dollars in profit and then over a decade and then had it all nuked in one event. There's some good quotes in here from CEOs of big insurance companies. John Neal, the CEO of Lloyd's of London, says, you'll never find an insurer saying,

I don't believe in climate change. The frequency and severity of weather-related losses are exponential. And then Eric Anderson, the president of Aon, the world's largest reinsurance intermediary, said, just as the US economy was overexposed to mortgage risk in 2008, thes economy was overexposed to mortgage risk in 2008 the economy today is overexposed to climate risk wow and so yeah it's one of those things

where it's like when you can debate you know when that was this uh this was uh last year so 2023 yeah before this and uh it's yeah it's interesting because like there's a lot of debate over like you know is climate change real? How bad is it? Where did it come from? And then what do we do about it? And a lot of smart people will tell you, oh, it's real, but it's not. It's slower than everybody talks about because we have been told over decades, oh, like the sea level is going to take over.

It's been very like AI doomer, like fast takeoff, like, you know, you know like greta thunberg but yeah it's like we're all dead in 20 in 2018 slow and then all at once yeah this l you know the la exactly and so uh uh yeah very very very interesting that like like it kind of doesn't matter what you think about climate change or the it's like you can see it in the market you can just look at the reinsurance market and understand that like clearly the market is pricing significant climate change disasters and so we have to do something about that whether that's yeah it's interesting that the difference of you look at fires yeah fires and hurricanes get the most attention. Earthquakes are very damaging, but seem to be, you know, we've built buildings in a way now that seemingly are, you know, they're sturdier, there's less, whatever. We're seemingly better prepared for them.

Knock on mahogany. But hurricanes are not very preventable, right? They sort of emerge and they have a path and you hope you're not in the path and batten down the hatches, but it's going to be nasty kind of thing. And then fires are sort of different dynamic and why this has become so politicized, which we won't cover any of the political elements

of the fires because we don't discuss politics um even though i did think it was funny that that crooked newsome went on crooked media during uh he went on pod save america like during the fires to like try to set his record straight but uh we don't discuss politics but um uh it is it is the the reason that there's so much anger in la right now is there's there's a bunch of evidence that we could have done more we could have spent more yeah we could have you know this 17 million dollar budget cut that turned into 200 billion dollars damages seems a bit silly in hindsight the fire chief had been on record saying we need 50 more stations in la county like all the stuff that's just super damning like we you know our you know government did not take

this seriously enough and there's again these communist policies around price controls of people in sacramento telling insurance companies you can't you can't use climate like the same people that are saying like you know don't use water because of climate change or telling the left wing might say we need to curb consumption and the right wing might say we need to do nuclear and more forest fire prevention and yeah fortify our homes against hurricanes and be proactive and and then that gets shouted down it's like you don't believe in it yeah and that's very problematic because it's like there are plenty of things that we can do that actually result in more energy production and consumption,

but still alleviate climate. One thing is for sure. Living in these areas is just going to continue to get more expensive. Yep. And one interesting anecdotal bit, uh, a family friend's house burned down in the Woolsey fires in 2018, which the Woolsey fires was the same fire that took,

took out my house before I owned it. So they did $5 billion worth of damages. And when, after the dust settled, he went to, to rebuild his house and he couldn't get, even though he had this insurance payout, he couldn't get a construction loan to build a place because it was all the quotes he was getting were for 60 K a year. And this is for like a tiny, like three bedroom home in the mountains of Santa Monica. And he's like, well, I'm not going to pay 60 grand. He's in his sixties. He's like, I'm not going to pay 60 grand. He's, you know, in his sixties, he's like, I'm not going to pay 60 grand a year for the rest of my life

to live in like a three bedroom house, not including property taxes, not including any other, like it just financially wasn't. And so what he ended up doing is he has like, basically like nice RVs set up on the property that he still like uses, but he cannot build structures because he can't get the insurance to. And maybe that will change with some of this just because again, if we were doing, you know, it's, it's interesting. I have, I pitched a brother, Justin Mayers on this idea back in Q4 saying,

how can we apply drone technology for wildfire detection and, um, you know, real-time mitigation and then also around home defense, right? Because one of the challenges is when people, uh, one already insurance providers will give you a lower rate. If you have like fire sprinklers, they'll give you a lower rate. If you have like a newer roof that has more fire protected, they'll give you a lower rate. If you're like houses newer roof that has is more fire protected they'll give you a lower rate if your like house is constructed in a specific way and but one of the challenges is when everybody evacuates and then an ember falls like in your backyard like let's say it lands in

the wrong spot and it starts this little fire and you're not there and so i was thinking you could apply have a drone basically stationed on your roof that would just use would patrol yeah your you know effectively your house while you were away and so i think i do think there's a mix of high level my contractor showed me a house that he built where it's just it's just a sprinkler on the roof that's it it just spits out a ton of water everywhere if you turn it on yeah yeah it's like low tech and so yeah there's a guy showing uh images from japan there's like some crazy automated turret that comes out if they have yeah yeah and it goes back to like there are two ways to deal with climate change one is don't build the house in the first place live in the cave and live in squalor and the other way is build the firefighting technology and and clear the fields and build

robots to clear fields and send up the goats and do the controlled burns and do all this stuff. And that's the more, uh, techno optimist pro acceleration, like path that I want to take. And, uh,

the, uh, the New Yorker and the insurance reinsurance brokers in, uh, Switzerland and Germany agree with me. They say one thing that virtually those guys always, they, they just like that you're 6'8". Yeah, yeah. Chad.

They agree with everything you say. One thing that virtually all sides agree on from the senior brass at Swiss Re and Munich Re on down is the importance of investing more resources towards adapting our natural and human environments, including homes and other structures, to make them more resilient to climate change. That's easy to say.

Affecting real change would involve making big decisions at different levels of government about contentious issues, including public spending, zoning, building codes, and taxation. Heller conceded that getting consensus for reform is a formidable task and noted that the economic fallout from climate change is affecting districts regardless of their political affiliation. And that's like super true here because you have the palisades and altadena probably very different political alignments and and kind of just average net worth but uh there should be both aligned the hope is that they all get aligned around let's be more proactive let's do more positive stuff let's build as opposed to let's cut back and let's restrict which is rough anyway i think

that wraps up our deep dive for today a lot of rough stuff out there but tragic pretty interesting to dig into hopefully we're learning some things let's go to some dms i got a good dm from frank he said he recommends a new segment uh on the show called forward deployed technology brother of the week uh he's recommending pic submissions picture submissions from brothers in the field test sites on the road offshore etc scenery aesthetics grit and grind sunsets sunrise coffee and nicotine not group photos would be a gold mine for the gundo guys more american terrain on the timeline not less more redacted desert locations not less segments sponsored by ramp for enabling travel and

logistics or palantir who has popularized who has popularized the forward deployed phraseology creative liberties loose interpretations of forward deployed could basically mean anything off-site like zuck venturing into texas for jre i love this i love this great idea frank recommendations if you want to be featured as a forward deployed technology brother of the week. And we'll just put it out there right now. Until further notice, every time you tag, you know, say I'm forward deployed and tag us, we will feature it on the show. Yep. We have a request from Brandon Jacoby, who's been featured on the show under some personnel news. Brandon, hopefully.

Jacoby? Jacoby. Hopefully I can share this. Apparently he's now the only designer employed at X. One designer at X. If you have any issues with X at all, DM Brandon. He's the only one. And tell him the technology brother sent you.

He was just texting me like two minutes ago. That's good. Yeah, just flood his DMs like hundreds of messages. If we flood his DMs enough, the DM's product will get better. You know, I think I actually, I don't know if it was him or Yaxine, but I actually DM someone that there was this weird feature when you press and hold on a video, it speeds it up to 2x. It's a great feature. But for a while while it would put this big 2x icon like right in the middle of the video and i was like i don't need

to know that a and b like just throw that in the corner up at the top and i sent it in and then i was like ah these and one of the guys was like yeah i'll fix it today and i was like cool you move so fast and then a couple days later was still up and was like, nah, they were probably just messing with me. But then it did get fixed. And so I love it. So yeah, you can affect real change. But the reason Brandon Jacoby is asking us to react to this picture that Sarah Hess posted is that she posted a picture of a watch and says, when the SpaceX secondary finally hits.

And it's a Audemars Piguet Royal Oak chronograph. Beautiful piece. I can't really tell. It's black and white. I don't know. Beautiful looking watch. 85 likes already. People like the watch.

Sarah just mogs the entire deep tech, defense tech community. The other day she was posting a- What was that? The other day she was posting her in, I think, a G-Wagon 6 was posting her and I think a G wagon six by six being like, this is a good daily sex. So all you guys out there need to get on Sarah's level. That caused a little bit of a stir. A lot of, a lot of defense tech bros were like, no, it's the high locks, the raptor,

the raptor. But you know, you can't go wrong with the six by six. I think, I think the cool thing is if you're in defense tech manufacturing or whatever and you're just on the road you're a forward deployed technology brother yeah it's just so there's you're you find yourself in such fantastical situations that it doesn't matter what you're driving and it's still cool exactly you could have warren buffett's old camry and you have it's just covered in dust and sand and you know it's old Camry and you have, it's just covered in dust and sand. And, you know, it's got like a bunch of, uh,

Lucy cans in the back. It just looks cool. If you're in a six by six, great. The real question is, would Augustus Dorico have gotten stuck in the mud if he was driving the six by six? No, absolutely.

I don't think so. I don't think so. And also it's six wheel drive. Rainmakers should have a tank. Like they've raised enough capital at this point. They should have a tank that launches drones out of it and has the threads. But anyways, all you technology brothers out there, stop getting mogged by Sarah. Step it up.

She's posting the proof daily on the timeline. Let's go to Civilization Enjoyer. Another question for us says, I love you, Tech Bros Pod. Thank you. We love you too civilization civilization we love civilization um can you recommend a time piece for me in my budget range and there's some sort of like foreign symbol here i don't know what that means but uh so it's 56.34 is this european money i think it's european money and so in european the europeans they use periods instead of commas, right?

Anytime I go to Europe, I just use dollars the whole time. They're just so liquid. I just deal with it. So is this $56,340? Yeah. Because at that, I mean,

you could get the Royal Oak Chronograph probably. That's around 50K, right? Yeah. You're not going to be in Nautilus territory. I mean, you're close. But you could get a vacheron overseas you can get a daytona probably yeah easily a daytona the other option here the other option here with a with a budget like that is is you could have you know your father grandfather you know, your father, grandfather, you know, some family member give, give you a watch, you know, as like a family heirloom and then use your budget on getting it tuned up a little bit,

taking it to somebody to get it serviced and then buy like half a Bitcoin with the other 50 grand. Yeah. Um, but on the off chance that he's saying $56 and 34 cents, what, what, what would you recommend that? I think you got to go used Casio or G-Shock, something on eBay, something that's respectable to the watch guys. Maybe something, you know, a Navy SEAL, an operator has used and is all banged up. G-Shock, something like that.

Buy Jocko Willink's old cracked G-Shock. That's something you can get for 50 bucks. He might just send it to you for free. I mean, you're in territory where you might just want to do a little bit of e-begging and just and just beg for someone to send you an old watch yeah yeah but something with a story i'm sure anybody any so anybody anybody out there that's listening if you have an old cool watch that's gathering dust please give give it to Civilization Enjoyer. We're happy to help intermediate it.

We'd love to get him a watch. Yeah. First of many. Yeah. Get him started. I mean, it's already a bad sign that he's dealing with the foreign money. It's rough. Anyway, let's go to Miles.

Funny to be saying you enjoy Civilization from Europe. Yeah. Considering that they've been sliding backwards. Miles Snyder asks us, I feel like these $4,500 Rick Rubin approved headphones are the perfect podcasting accessory for a self-respecting technology brother. It's the LCD5 flagship headphones.

Highly recommend going and picking these up. I think they're open back. Have you seen that? So they're actually loud to other people. You know about this? That's great. Open back headphones. Yeah.

They play the music. It creates this real sound stage so you can hear the music all over the place, but they don't isolate it to the outside world. So you're just mogging everyone else with your noisy headphones. Last night I was fucking with sarah and i uh i usually will listen to like an audiobook or video whatever go to bed without the screen off and i took my

headphones and i just threw them over my like towards her side of the bed and i just started putting on like this like educational like kids kids song she just like took her like 10 seconds she's like what the fuck are you watching i was watching like i've watched a video with roman on on how oil rigs work nice i didn't know this but a lot of them are actually pontoon boats oh yeah they're where they are sunken yeah underneath the water should do deep dive on oil rigs hyundai heavy industries i believe it's one of them that makes it uh they make the the uh electric cars and oil rigs uh grant says getting bucket pulled on tech bros pod is the teapot equivalent of getting bucket pulled on kill tony salute that's correct we were inspired by kill tony uh we we've been doing a lot lot of post reactions and we wanted to mix it up,

make sure that we got to the real bangers from the brothers, from the friends of the show, the really key stories, but we wanted to mix in some random stuff. So we printed a bunch more posts, threw them in this bucket. We're really building up a thing. And these are random. We have such a backlog, we might have to move the two episodes to 10. I think we have to if we want to get through these. And so we'll do some bucket pulls later in the show. A little bit more random, some friends, some randoms in here, a lot of timeless stuff, and a little bit more focused just on good text posts. Not something that we need to necessarily make sure we're

hitting in a timely fashion, but it's more of just a random way to make sure anyone has a chance to get out on the show. Let's go to a question that I got from a friend. Says, pod is crushing, by the way. Also, question, do you think it's a good idea to work for Doge? Well, what do you want? And I answered, and we went, we chatted for a little bit. I said, uh, well, what do you want out of life? What's your long-term goal? And so question is like, uh, this guy has been working in tech. He's been, you know, an associated venture capital firm worked at a kind of series, a series B startup that was kind of pre-product market fit, done some stuff, product manager style. Um, and he's now thinking about joining Doge. What do you think? So there's a range of ways that you can

work on doge i don't know how much of it's public or private yet but uh at a high level you can go and actually have a long-term like role within a job a job like a long-term job and then there's also these sort of rotating groups that are rotating in for 90-day sprints to work on specific projects. That's what Vinay Hiramath did. Yeah. And so it's hard to know. I think he's thinking full-time, like this will be the next couple of years. Yeah.

I think Doge is an incredible opportunity if you don't have your thing yet. Yeah. Right. Or if you're working a job that you just don't care about that much, which I doubt any of the brothers do because they are, uh, corporate athletes and they'll find a way to care about anything. But, um, uh, yeah, just, I think it's honestly the 90 day route and taking a sabbatical from your job and doing that in school, the like longterm, you know you know in it there's actually a recent study on our audience and they found that we have the highest percentage of listeners who are doing their life's work of any podcast in the world i thought it was exciting so um yeah yeah yeah the

the i my thought for him was like you should think about what your life's goal is. Um, because if you're going into the government, that can be a great track for the right type of person. Um, and, but if you stay in finance, that can be the right track for a different type of person starting a company and, and building it.

I almost like the Doge as, as great as, as it is that there's all these technology entrepreneurs that, and people within tech, uh, that are going and joining doge we also need people from that have histories in washington to join yeah because they actually understand how people how washington works and how government works yeah complicated stuff you know yeah it's not for the faint of heart so so i hope that we're pulling in people yeah from washington to to participate in this because I think they'll be much stronger if they're collaborating. Yeah.

I imagine the correct formulation is like a blend like what happened with Anderle, where it was like three Palantir guys, Palmer Luckey, who had no experience in defense but is like this crazy engineer. Hardware guy. And then Chris Brose joins, who's beenain's chief of staff and like the swampiest dude in the world i say that lovely but but but it really is important that they have someone like that who's been on the hill for so long uh really really add add to the um add to the information uh okay let's see okay we got all these we're good i got a let's do a promoted post so uh today this promoted post is from the department of state and the and the dea actually the drug enforcement agency and the uh the u.s department the u.s department of justice so we actually today we

have a promoted post uh from the feds from the narc Narcotics Rewards Program, saying that the reward for information leading to the arrest and or conviction of Nicolas Maduro, Venezuela, has increased up to $25 million. So this is like, you know, typical. This is like basically like getting a pre-seed round for like an AI company. It's more like a mango seed. It's like a mango seed for your ai company or like if you're a good wise if you're a good yc company you might come out of demo day skip the

seed round and go straight to the you know 25 on 100 yep and uh but anyways this would go straight into your pocket uh so nicholas uh has uh been at uh nick has had some issues with narco-terrorism. He had a run-in with the feds. He's had a rough go. He's accused of narco-terrorism. Yeah, okay. He hasn't innocent until proven guilty. Yeah, yeah. Allegedly. Allegedly, Nick has done some narco-terrorism. Yeah, okay. He hasn't been innocent until proven guilty. Yeah, yeah. Allegedly.

Allegedly, Nick has done some narco-terrorism. So, narco-terrorism, cocaine importation, conspiracy to use and carry machine guns and destructive devices in furtherance of a drug crime.

So, anyways, no coupon code this time, but you can send tips to the Drug Enforcement Agency by email at cartelsolestips.com. on code this time but you can send tips to the drug enforcement agency by email at cartel s-o-l-e as tips at dea.gov i know and for the for the folks who might be trying to track him down can you give me some overview of who nicholas maduro is and what he might look like if i see him on

the street nicholas maduro moros is a venezuelan politician who has served as president of Venezuela since 2013. He began his working life as a bus driver. He's clearly got vision, even though he may have had some issues with the law. Maduro rose to become a trade union leader. Ouch, that was his first problem, clearly, before being elected to the National Assembly in 2000. He's got a wife that he married in 2013 celia flores if you know celia you could ask her um he's six three chad okay um like that and uh yeah basically 63 62 years old normally i guess he hangs out in caracas okay venezuela so anyways just a great opportunity

i i don't think enough passport bro passport bros will often talk about oh i have this e-commerce business or i have this course business i think there's a big opportunity to just like start contracting with the dea going after some of these bounties and this 25 million could fund quite a long stint in south america if that's what you want in life so uh go get after it yeah and if you're if you're more of like a course bro which i don't think a lot of our listeners are you could create courses on how to go after dea bounties um and how how you could track down a narco uh terrorist like a lot of great a lot of opportunity these days so anyways we'd love to check it out we'll try to promote as many of these on the show yeah as possible and if you do tell

the tell the dea technology brother sent you tell him you heard about the the opportunity on the pod yes really key we get all your we don't need any of the payout we just want we just want the credit okay all right this is back to the show so back to the show max passion and fury at passion and fury go give them a go by the way thank you to the lone ranger for putting this oh this is fantastic thank you roadmap i didn't know that i didn't know the increase yeah so it's a lot of money. Yeah. Uh, so Max, uh, listener of the pod says new technology for the technology brothers. He built a tool to quit quickly,

grab all clips, referencing every mentioned X post on the pod. All you need is a YouTube URL, uh, at Jordy Hayes, at Jack Coogan. It would this be helpful? He just said,

Jack, Jack, Jack, Jack, that's my, that's my goal is to just become the jocko willink of tech um and it's amazing you you dump in one of our our show urls and this is actually slices it up this is amazing this is a live product yeah it's techbrosclips.com yeah and you can punch in oh if everyone goes there it's to blow up the site probably. Well, it'll be a good test. But yeah, get a, get a content delivery network up buddy, because

the traffic's coming. It's been super helpful to us already, slices everything up. We're working on a slight iteration, but I think this would really speed up the flow of the show so that as soon as we wrap, boom, we put it in there. The editors can punch some of this stuff up and it can go out on X, which has been a huge, huge growth hack for us. And if we catch you stealing our growth hack, you're going to hear from us. Let's go to Megan Niveld. She says, yeah, I'll be going now

and takes a picture of her purse where she has put a piece of fried chicken in there. And what's that? A beautiful tin of Lucy patches in her purse. I love it. Megan also mogs the timeline. Totally. A lot of the other brothers with just like constantly living that sort of

loud, opulent, loud, opulence, he be lifestyle, Corona, the Aquapana, the French fry,

probably truffle fries. Fantastic lifestyle. It's great. enjoy go megan thanks for supporting my company thanks for supporting the pro nicotine pouch community and uh helping evangelize thank you for supporting iq yes yes uh should we do a bucket pool we've been we've been talking it up maybe we're talking about it let's see okay this one's gonna be truly random this time because we have two champagne buckets by the way because the next dom episode we might have to just throw the dom in with the buckets i can't believe i pulled this one oh my god okay tokyo sunbather

says carl marx failed to consider how dripped out i look walking out of the Polo Ralph Lauren store. There is a man riding a horse on top of my chest, you communist retard. Well, we don't use the R word on this show. Because it's low class and vulgar, but I'm quoting him. So that is an acceptable use. I don't use it as a pejorative. If ever we were to use that word, it would be in reference to Karl Marx. Following the communism. But that is an acceptable use. I don't use it as a pejorative. If ever we were to use that word, it would be in reference to Karl Marx. Following the communism.

But that is a hilarious post. Yeah, I probably read that a few times. Really enjoyed it. Dripped out. Yeah, that's non-ironically why capitalism is so great. Yeah. Because you can get dripped out. Yeah.

Which is exceedingly so. So back in the Soviet Union, Jeans. Yeah, jeans were a big thing. If you traveled through the Soviet Union wearing jeans, people would come up to you relentlessly making you offers, and they wouldn't even have anything to offer in the trade. They'd be like,

hey, I have this exotic melon that I grew in my backyard. I'll give you three of them if you give me your jeans and you're like i'll keep my jeans wild great post great post hilarious uh let's go to jason liu he says do it scared i believe many people struggle with the insecurity of being intelligent they often feel the need to prove their intelligence by overthinking, excessively planning, and acquiring knowledge before taking action. However, this approach is a waste of time. The more you research, the more you realize

how little you actually know. Instead, you just have to do it even if you're scared. Literature is the most agreeable way of ignoring life. Yeah, there's a lot of that hustle porn. I need more mental models. I need more frameworks before I go and build the thing. And nine times out of 10, it's just like,

just go give a shot. And this is like the whole YC thing is like, you show up, it's like demo days, ticking clock, 90 days. You got to put something on stage, got to grow,

got to build the business. Like if you go into a office hours and you're like, I'm thinking about a frame, I'll be like, shut up, like go code. Yeah. What meeting structure should I use?

Yeah. all that stuff doesn't matter yeah the other thing will will was posting recently about how if you are gonna read a ton of books instead of doing the actual thing which at points in your life is worth doing uh don't read the same books as everyone else yeah So don't read the same. One, don't read founder biographies. Just listen to founders podcasts. Two, don't read the same like business-y self-help books. Go read weird, strange stuff from the crazy perimeter. The biggest bull signal is when you're searching someone on a Wikipedia page.

You go to the sources. It's some ISBN number. You go to the sources, it's some ISBN number. You go to Amazon, $2,000 book won't ship to you in a month because it's out of stock. You got to find some library that has it in stock, not digitized. There's no Kindle version. There's no audio book version. That's what the alpha is. Do you know, you know that book there, there's no anti-mimetics division. Yeah. It's like trading at like $3,000. I have a copy and it's like yeah they went out of print it's literally mooned yeah hilarious nobody knows what the book's even about but library cards deeply underrated yeah uh when when ben and i were doing

uh some video essays i would we would just go over to the library and just pick up like every book on whatever topic it was like i was doing something on GTA and the history of Grand Theft Auto. And there's one really good book that serves as the backbone of the story. But there are 20 other books that have paragraphs mentioning it or talk about the development of the industry. Yeah, you can talk to a librarian.

Put it all together, yeah. And they'll help you find all of that. I mean, even just walking around in the library, you'll find there like the Trump section. We got 20 books about the history of Donald Trump and 20 books about the history of Joe Biden. We were doing those video essays about this is really, really cool. And so, yeah, you want to learn about insurance like you can go on Twitter and listen to podcasts. And but just like it's called like I think of it like the shotgun method.

Like when I'm trying to learn something new, it's like, I'll find like, you know, a textbook on it, but then also a biography of someone who built something in there. Listen to a podcast on it. What does odd lot say about it? Read a wiki, go to hacker news, search Twitter, and then also just stroll the library until you've kind of like sprayed and

prayed all over the place and just gotten a bunch of different information that you can put together. Cause like, that's probably not baked into the LLMs yet. So you need like random sources to put together. Then you get the alpha. Let's go to Hunter. Gronk Wiz, love the name.

He says, just spent $60,000 buying a Stripe car. Women won't leave me alone now. Best investment I've ever made. And Jacob Martin asks us and asks, at Tech Rose Pod found someone almost as committed to Stripe as you guys are to Ramp. Do you think this is real? Do you think he actually

bought the car? It looks just like a taxi cab. I think he's joking. He's joking, but I wish he wasn't. Yeah. The Stripe car... Dripped.

Very drippy. It says... Very drippy. It says a lot about the kind of person you are. He says you value literature, independent publishing,

smooth, sad. Irish nationalism. Irish nationalism. Mafia. Easy incorporation tools like Stripe Atlas. It says a lot with a little. It says a lot more than like a martini racing Porsche. I'm a huge Porsche fan.

The Stripe livery goes hard. I would just like to see it on something with a little more horsepower a couple more cylinders get the stripe livery on a v10 next time yeah yeah i'd like to see somebody apply the stripe livery on you know what you know what it should be going on bmw i8 most undervalued car right now 40k you have doors that go like this it's not under i just will say it's not undervalued it's undervalued it's properly it's undervalued car right now 40k you have doors that go like this it's not under I just will say it's not undervalued undervalued properly undervalued I know I know it's not a great driver's car just saying it's properly value because it's worth 40k today it'll be worth no no it is undervalued because once associates at VC firms realize that they can have doors that go like this for the

price of a Model 3, it's over. It's over. Get that, wrap it in the American flag. Oh, you're on the American dynamism team? Get an i8, wrap it in the American flag. Oh, you're working at Stripe? i8, wrap it in the Stripe logo. That car really... Half of them have already been wrapped. Eight years ago, eight years ago, I guess I hadn't moved to LA. Isn't it a three-cylinder? It was very hot for a second. It was like a very cool car. It looks cool and it's from a big brand. Yeah.

It drives like trash, but that doesn't matter. It has doors that go like this, Jordy. The doors go up. The doors go up. I do want to go to the BMW driving experience center in Palm Springs, by the way. Where would you drive there?

What's your go-to BMW? I actually like the way that BMWs drive. The modern ones? I would go manual M2. Yeah, yeah, yeah. Powder blue. Yeah, yeah, that's a great option.

That's a good one. Still pretty light. But I would like to just go... Not the M5 that weighs 7,000 pounds. I would like to get a good remote setup, dash cam, Starlink headsets, we're just we record the pod just while racing have you ever gotten into the old bmws like the e36 m3 if you know the numbers that go in front of the m3s it's my uh car sherpa uh michael yeah lives here in la not not far from the studio uh he's big into that

world but um but not not me let's do promoted post another bucket promoted post uh this this promoted post is from mahogany uh mahogany is the official wood of business fantastic uh we just wanted to draw some attention to mahogany. It's a great wood. They've got great grains. You can get it from all over the world, a bunch of different sort of varietals. And I just can't stress enough,

every business should run on ramp and every business should run on mahogany. Get mahogany around your office, your home. Ideally, it's in your car in certain places if you're buying the right um manufacturers and you're getting them specced out properly but uh get the i8 replace all the dash with mahogany now we're talking see i can win you over on the side the side panels on the guard swap swap an f40 engine in there get the turbocharged v8 and the i8. Yeah. Anyways, fantastic wood.

Yeah. Can't recommend it enough. And thank you to Mahogany for supporting the show. One last one. i8 Storado. That slaps. Yeah. You throw some off-road tires on there, roof rack.

The doors still go like this. Doors still go up. You're good. You can't charge the car anywhere, so you got to stay close to home. But if you live at a ski resort. You don't need to charge it. It's not electric. It's a hybrid. still go up you're good you can't charge the car anywhere so you got to stay close to home but uh you know if you live at a ski resort you don't need to charge it it's not electric it's a hybrid it's not it's not a plug it's not it might be plug-in but it doesn't matter you can just put gas in cool okay i'm you're on board i'm on board we're getting to we're getting tonight crashing when i crashing an i8 was like kind of the it thing to do

the supply there's probably only like 40 left yeah they've all been crashed and wrapped by that's actually the case for i8 yeah is that it's an iconic car it's the halo car from like one of the most iconic brands bmw okay put your it's not some put your money where your mouth is gonna pick one up uh this is stupid we already talked about that. Bucket pull something else. Brutal bucket pull. Let's do that.

Oh, this is good. Nikita Beer, he says, the three jobs after AGI actually. One, AI researcher. Two, influencer. Three, looter slash prisoner. What do you think? Feels pretty real after this last week. Yeah. Not listen to tyler cowan on door cash he says it's going to be very slow for ai to take over some of these more entrenched industries the non-profit people will still have jobs the the farmers and if you talk to

brad jacobs he when he set up his new fund, he specifically was looking for AI-resistant industries. Where did he land? He landed in construction materials. He's rolling up construction materials companies, making it easy to order construction materials if you're a builder. Obviously, great timing, and I'm sure there'll be a bunch of interesting stories that come out of that company. His second most interesting choice, he surveyed all the different industries for ai resistance and also just economic opportunity uh the one that he wanted to go with was oil and gas but he couldn't but the esg thing was too overbearing i have a thesis around it used to be young people would see the oil and gas industry

as the same level of opportunity as technology and wall street. Yeah. Yeah. Wall street where it's maybe you're in Texas. It's like, well, I'm going to stay close to home and go into oil and gas. And for a very long time,

it just was not even on the radar of a lot of talented young people of going because it was so demonized. Then it's like, okay, well we need this stuff for everything. So maybe it's not so bad yeah you gotta watch that movie the only thing i would add to nikita's list is guys that repeatedly launch the same app and repeatedly sell it to large corporations because they want your time

and attention universal employment for nikita for sure and uh i mean i guess he's influencer on uh what's that intro.com yeah yeah. Yeah. He'll be fine. Yeah. People will pay just to hang out. Yeah. Even if they're not, there's nothing left to build. I just want to talk to Nikita generally. Yeah.

Tell me some more stories, buddy. Yeah. John Chu at Coastal Ventures says, why a $40 million pre-seed? You can prove your research direction with $5 million. Founder Somith Chintala told me Vcs are willing to light dollars on fire for my pre-training so i'm not going low lower the spend plan includes his yearly multi-million dollar meta salary in cash we are deaf not in a bubble i didn't really understand the format of this but i do think that uh that whatever the high level

$40 million pre-seed for an AI company was cool. I just my only problem with it is if you could raise $15 million, spend a little bit of money tracking down Nicholas Maduro. Yeah. And you could get this $25 million non-dilutive, basically, basically just, you know, straight cash of the balance sheet and then use this for all your pre-training, you know, use this to buy a compute, spend this on an NVIDIA. And so, and, and, you know, I'd like to see this well transfer from the DEA to NVIDIA.

Yeah. I wonder what the, what the stories are, like, what is the biggest reward that's ever actually been paid out by the federal government for a bounty like that and who got it what did they do with the money like did it go to like blackwater or did it go to just some random citizen who like called it in i believe that there was a theory that there was a whistleblower in the osama bin laden case that was retconned out and not told in the main story have you heard heard this? The Seymour Hersh theory. Seymour Hersh claims that the Zero Dark Thirty narrative, that it was like the CIA figured out where he was and then they're sending the Blackhawks

and they were stealth helicopters and they got through the Iranian defenses, was it? Or Pakistani defenses. That is kind of a story that we tell to sound a little bit more heroic, which based, I like it. But the Seymour Hersh theory is that there was actually a whistleblower

in the Pakistani government who called America and was like, I know where he is. I ran into bin Laden's driver. This is the location. And it could have been. Get me out and get me my $10 million for the bounty and I will give you the direct access.

And then apparently America went to the Pakistani government, said, we know where he is. We're either sending a missile tonight or you're going to turn off your air defenses and our Black Hawk helicopters are going to fly in. And they're like, okay, fine, you got us. We've been hiding him. Like,

we'll let you go in. So it's not like a national incident. And then the, the narrative globally turned into, oh yeah, like we snuck in, we broke through their air defenses and like they weren't complicit in it. So then there's not as much like global,

like aggression towards Pakistan because they weren't part of it. Caught. Yeah, exactly. Yeah, exactly. Yeah. What were you about to say? Anyways, back to $40 million pre-seed. How did we get on Bin Laden?

Podcaster moment right there. Do we want to do Zuck? This one I feel like it's kind of played out. I mean, we didn't really talk about it yet. I don't have a lot of you know the old phrase if you don't have anything nice to say don't say it i'm glad he came around but i'm not i haven't listened to the full episode yet so i'll withhold my my take let's go to jasmine's son she says ins and outs for 2025 predictions are not endorsements and the top one is lifted straight from our show

in ostentatious wealth out quiet luxury there we have been firmly in favor of that uh in open water swimming out run clubs i would say we were we've been in favor of loud opulence which you can actually enjoy regardless of whatever wealth you have, you can door dash all day long, spend that on a bottle of Dom Perignon and pop it off to celebrate a hard day's work. So anybody can do it. So in are Mob Wives, Nietzsche, the Western canon, going to the movies, Aper Tiefs and Digestiefs.

Russia is in and China is out. I don't know. In 996, out quiet quitting. In email romance, out dating apps. In cocaine, out weed. In secrets, out transparency. In fey water. That would actually be cool.

A new dating app built around email is weird enough that you could probably get a number of users uh that's actually how tinder started they they would do it all manually so they would have uh it was based on this thing that happened at harvard where at the end of the year everyone would submit names of people that they were like attracted to but never actually had a chance to really go on a date with and then if there was a mutual swipe right, essentially both people put down the same name,

they would make an intro. And then they appified. I never knew that. Yeah. In Manning Up and Moving On, Out is Yearning. In Ball Up Top, I like that. Out, Self-Reflection.

Yes. In Traveling. Never Reflect. Never Look in the Past. In Sketch Comedy. Out Stand-Up Sets. A lot of good stuff in there. Thanks for posting that. I think that's a fun list.

Do you want to do your own post? Newsom's Reign of Terror. I'll read it. Yeah, go through it. I, you know, Jeff Lewis and people like Josh Steinman have talked over the last, basically the last week, in saying, hey, most natural disasters aren't political, but it's actually important to make this one political because there were a number of failures by the state to address this problem before it started. And it's been interesting to watch Gavin Newsom.

The vast majority of the communications that he's been putting out are all centered around correcting his image. So this guy, I think, is one of the most disgusting, despicable, evil political leaders that I've ever... I'd probably rather get a beer with Nicolas Maduro than Gavin Newsom. But anyway, so I had to share this i shared this i think on saturday i was um pretty frustrated and it definitely resonated but

i said newsom's reign of terror will finally come to an end in 2026 that's when his term is up hopefully he gets recalled i think there's a bunch of petitions happening now. Years of zero leadership and degeneracy. I put that in there because he has a history of cheating on his wife with his staff, and he also cheated on his wife with his best friend's wife, among other incidents. We now have dramatic visual evidence of his incredible incompetency, and it's on full display for the nation and the world. Very, very, he couldn't have had a more high profile, the campfire, which was, you know, one of the most damaging fires was in an area of the state that frankly does

not have a lot of influential people or attention. This one is the crown jewel of California, Los Angeles. And, uh, it's just on full display, very clear that the world now knows that he is incompetent. The fires will cost him any hope of winning the presidency, which he so desperately wanted, and you can see with his communication strategy this week, he's entirely fixated on yelling at Elon Musk for spreading lies when he is the biggest liar, the most lying politician that I've ever seen. His track record was always terrible, but his smooth talking kept the dream alive. I will give him credit. He always dresses well and he's good at yapping. Not anymore as

these images will follow the rest of his sad career and be placed next to his name in the history books. And this is one of those things i literally think if there's going to be a history book on california on uh this century you'll have the newsome era and the fires these these pictures will be placed next to his name because this is uh his handiwork los angeles will rebuild but newsome won't have anything to do with it so i don't think this guy i don't think this guy will be able to walk around los angeles for the rest of his life without being yelled at and he deserves it i mean like absolute scum uh and i i make a uh we make a strong effort on the show to never be negative um or put people down because everybody's doing their best. But in Newsom's case, his best is not where it needs to be. So please resign, Newsom.

So who you got? Because Rick Caruso seems like the obvious pick for L.A. mayor. Who should step in as governor? Man, I'm not a – my opinions on newsom have only been from spending my entire life in california and getting to become an adult as his reign of terror um you know was going on and so i'm not a political i don't have a lot of uh i don't follow the, the, the, the sort of people in the stable closely enough. I don't think that Caruso after the bass election wanted, I prior to the fires,

I don't think he would have run the next time he wasn't like, now people are like demanding it from him. Yeah. And I think Caruso is incredible. He has the only structures basically in the palisades that are touching each other that are still standing so if that's not proof that he's competent i don't know what is but he's getting up there i don't know if he wants to do a four-year term um but he would be a good pick but um i don't we just need new leadership across the board uh it also i also had another post um karen it can't be shared widely enough

but um uh if there's one thing that will publicly um you know sort of state that we do not uh uh support it is um communist karen bass spent the first half of her career literally traveling to cuba when it was illegal to travel to Cuba. So breaking the law, taking multiple trips, coordinating with the Cuban government to spread communism in the United States. She was praised by the biggest newspaper of the communist movement in the 70s as being the leader of the communists. And the group that she was involved with is like a violent extremist group. And this woman failed upward into congress she was a

represent not not uh she was in the house of representatives representing california came back decided to become mayor and even people close to her have said that she had no plan for her you know uh for her rule over los angeles she just was the pick that would win, was the right person. And anyways, so, and Max Meyer posted this video. During, in a video on Sunday, she was talking about how we're going to rebuild Los Angeles and she was smiling through the whole video. Yeah, that was really weird.

It's like, how do you and lulu was just ripping her apart because there's a science to addressing yeah people in that situation and and just couldn't so like clearly has no business running the city anymore she needs to be recalled to gavin newsom needs to be recalled to my pick and governor duane the rock johnson see that's a good option we had a great run with you don't actually yeah yeah we had a great run with put the la yeah and and bass had no no insights or knowledge of how entertainment works right like she it's like somebody in detroit not understanding manufacturing put the rock in i mean so he's a tequila entrepreneur yeah he's an entertainment mogul yeah he's the highest paid he has a huge neck he's a tequila entrepreneur. He's an entertainment mogul. He has a huge neck.

He's a mass monster. Mass monster. Crazy output. Crazy workouts. Yeah, it's clear that he understands the WWE wrestling style of politics to be able to go up and give a rousing speech when that's needed.

If he was called upon to make a speech after this, he is another front runner for me i mean i i you saw his you saw his son is a buddy is a buddy of mine a neighbor actually you saw you saw his comment it was like his house burned down and he was like i'm free of my material things like just no and he's he's He's actually stoic. Yeah, that's great. I've met him before at a birthday party, and I think he's a good dude with good intentions. And anyway, so I'm very much looking forward to not ever having to talk about politics on this podcast again. Let's move on to Tyler.

He says a wild conversation with the public company CEO. He says they have a $10 billion plus market cap. And they say our top of funnel is getting completely crushed because we were so reliant on Google, but a ton of people have switched to AI search and we aren't there yet. One anecdote, but wow. I wonder what industry this is because I feel like for a lot of consumer products, the AI search hasn't really taken off and the AI search has mostly been replacing more like informational stuff where you would land on Wikipedia. I go to AI for, but if I'm

shopping for like a new suit or something i'm not going to go to chat gpt because it's going to like tell me about the suits generally and i want to like be able to click and buy or something like that so i wonder what i don't know i wonder what industry that is this goes uh ann skates was talking last week about this sort of ai becoming these recommenders and how much I think a massive amount of purchasing decisions will be driven by these sort of AI assistants that deeply understand you and your taste and get to disintermediate, you know, basically Google ads and random searches. And this is already happening. So you can, can there's a there's something called um you can

go on delphi and like talk to somebody's clone and be like what magnesium supplement do you recommend it'll recommend that based on who that clone is is made around there's another company called dexa that that does like an ai chat bot just based on podcast podcast transcripts you can be like what you know what-and-so think about this? And then it'll recommend the right product. Seems like, yeah, good, even more important than ever to switch from SEO to influencer marketing. Because you want to be baked into the LLM

in a conversational way. That's true. Not necessarily in just like, oh, keyword search showed up. That's interesting. I never thought about that. I mean, my first company branded native runs hundreds of influencer ads a month for um various consumer brands and that's kind of an interesting thing of like you're building up this basically base of recommendations from all that will get baked in the llms much more so than some optimized seo landing page yeah so if if you want to optimize your results in LLMs,

go to brandednative.com. It's a company I started when I was 22 and spend a bunch of money through our ad network. There we go. Let's do a promoted post. Promoted post. This is a fantastic post. I mean-

This is our first horse post. Horse post. This is a fantastic post. I mean, this is our first horse post. Horse post. And there's been sort of some ideas and thoughts out there that we don't, you know, we're always, you know, we support horse girls. We like the idea of horse girls. My daughter will be a horse girl, and we are horse enthusiasts. Yes, equestrians. Yeah, exactly. So this promoted post is from our friend Tom Wilson,

at Tom Wilson Horses, and he says, this is what AA-rated 3.2 million yearling looks like, lot 1007. He's got home affairs crossed with sunlight sunlight and he has an entire video here just breaking down the incredible ergonomics and muscle structure of this fine stallion he says the damn nordic charm uh second page the damn nordic charm is by charge forward a group one winning sprinter and established broad mare sire although nordic charm herself was unraced she hails from a distinguished family she is a half sister to liberator the champion stayer in hong kong for 2011 to 2012 and pink cyrus who produced group two winner etna the family traces back to the illustrious miss helga a listed race winner

and producer of quality offspring like alexis which is a group three winner and freshwater pearl and uh so anyways he's got a number of um and and another one in here just just while we're at it lot 396 i am invincible crossed with fiery vista um this uh is from uh tom magnier it's only 1.1 million. So if you've got a couple million bucks burning a hole in your pocket, maybe you just sold a company to Atlassian, go pick up one of these horses and tell them the Technology Brothers sent you. This might be our favorite colt

in the sale. He's just a biomechanic and a geometric scorer. Fantastic. And people will say it's a lot of money, but I mean, look at it. It's a lot of horse. i mean look at it it's a lot of horse they're giving this they're giving this uh sire away fantastic so thank you to tom uh wilson and uh get back to the show bucket poll oh this is a good one paul bukite uh yc powder creator of gmail yc partner says x should stop demoting links and instead use Grok to attach a short summary of the linked content. It would achieve the same goal of keeping people on site but be less annoying.

And yeah, the demotion of links is really wild. We had a banger post that was completely silenced. The built different Google.com post. One of our greatest of all time. And it was destroyed by the fact that links are true. The post was real posters, post links, and still do numbers. Built different. Google.com.

Google.com. Built different. And it had some early traction. It just died off completely. And the reason I was inspired by that, to be honest, is that Mark Andreessen is just not afraid to post links and just rip a link and still do numbers. I think it helps to have millions of followers.

You can still do numbers off of a big base, even with the algo. But post links, don't let the algorithm rule your life. Rule the algorithm. I completely disagree. I say it is disrespectful to elon's culture to post links on x he's very politely asked through some very clear subtle messaging that you should not post links um but seriously if you're a founder and you're trying to promote anything just don't have the website in mind at all like it needs to be fully x native and that's why why

do five reels go viral? Why do threads and long posts go viral? When Lulu launched her company, what did she do? She posted a long post, the going direct manifesto, this one, her brother of the year. And she understands that, you know, why try and fight with one hand tied behind your back with a link down in the comments and all that stuff. Like just tag your company, have your company have in your company's profile,

have the link in the profile. Or just appeal to smart people who can figure it out. Like just say, people don't need the handhold. From a pure conversion rate optimization standpoint, one click to your company profile, your project profile, or whatever you're trying to promote, link in that bio.

Shut down your company your company is now your x account your monetization is your revenue your x check is a million dollars there's a lot of founders making more money from x monetization than their companies this is the future everyone's an influencer ai has taken all the other jobs so you don't need to link out you just need to post yeah get that check that check. Post better. Engagement bait. And you're good. I do like that idea, though. Let's go to Noah Smith.

This is some good news. We're winning the war on cancer. in significantly from a peak for both sexes, around 220, 210 per 100,000 people down to sub 150. What do you think? I thought this was good. Good news. I mean, it's hard for me to even think about that, even though it's great news when Noah is doing absolute numbers on subsect. Yeah. Absolute suback size lord. I mean, at this point, he doesn't even need health care. He can just pay out of pocket if he gets cancer. That's dark, but true.

The guy's doing crazy numbers, has a bunch of paid subs. And it's because all the best journalists in the world are growing independent. And it's a death sentence for traditional media. It is. Yeah, he's done well. Should we wrap it up there? Yeah. That's a good place to end the show.

This was a fun show. Thanks for watching. Looking forward to tomorrow. Thank you.