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

Episode Date: October 4, 2024

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

There's like rumors about a fundraising round, a bunch of executives left. So it's kind of a chaotic moment. I saw somebody's take that I think was totally on point is the way that OpenAI's employment contracts are set up is if you talk poorly about OpenAI after you leave, they're just like, okay, this is our equity. You get your equity clawed back.

So if you wanted to make a statement about how fucked up things were while still holding on to your equity, you'd leave right in the middle of the fundraise, right? What sends a bigger message? Because if you're like, let's say we're running a- Well, that's not different than, but that's not the same as actually violating that clause.

No, that's what I'm saying. If you wanted to make a very large public dramatic statement about something being wrong at OpenAI, but you couldn't say that. Oh, but you couldn't say that because you would leave in the middle of a fundraise. But if you want the equity, why would you want to hurt the company? I mean, it's not, you know, you could argue that somebody could say, I want no part of this, but you still want to kind of keep the money. Yeah. I hate that. That pisses me off so much. That's like that fucking from from meta from facebook who like made this huge bag and then was in on netflix tristan you know this guy no he was in this documentary called like the social dilemma

yeah he's like oh yeah like it's so bad what instagram has done to this generation so bad it's like and he's just sitting there from montauk. Yeah, exactly. He made so much money. And it's just like, I actually love that clause. I think that clause is interesting because if you are seriously... Are we an Excel character right now? No, no, no. This is what I actually believe. I love that clause because if you were actually terrified of AGI and you were like,

holy shit, this stuff is going to kill everyone. Yeah. What the fuck is your equities worth zero? Your equity is worth nothing. So you're going to just be like, yeah, go for it. No, I think it's much more of a statement on Sam's character to leave during the fundraise, which is, I don't know. I mean, like I, I, I, I hear what you're saying, but it's, it's just weird because it's like, it's like, it's this half measure. Like, either you'd want to just be like, let me, like, I want the value of this stock to be as high as possible. Therefore, let's find the chillest place for me to get out because, like, I am tired, right? So I do want to leave, but I don't want to fuck over the company at all.

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

So they clearly know when the other things are happening. ALEXIS MOUSSINE- Has Lucy ever been approached by OpenAI? I mean, maybe she can't say that. Does she work with them? DAN COFFEY- Which Lucy? ALEXIS MOUSSINE- Sorry. DAN COFFEY- My company?

ALEXIS MOUSSINE- No, no, no. They've definitely worked at lucy of course massive shipments uh lulu lulu not lucy lulu i mean i think lulu is working with uh ssi ilia's company because she's on like the nat friedman daniel gross crew right um although she's you know like it has a bunch of different companies and stuff. But when I initially saw that all this was breaking right then, I was like, okay, maybe they're trying to kind of bury this news. I mean, obviously it didn't really work because it's on the front page of the business section.

Which every self-respecting person reads daily. Well, I mean, you know, like the meta platforms announce deals with celebrity actors to use their voices in a new artificial intelligence assistant. That's B4. And the open AI stuff is B1. So it did break through. That's the way I thought they were framing it initially. It was like, let's try and get this news out the same day that something else big is happening in tech.

We know that this facebook thing's happening and then but i mean then again like there is one narrative where it's like the whole company's falling apart and everyone's leaving but then there is another narrative which is like great great man theory of history maybe you just need one person executive teams turn over all the time they often turn over in the midst of financing rounds because it's like okay we're actually changing what the business is going to be doing. We're going a different direction. So like, yeah, we are wiping out a bunch of the staff. I don't know. I'm not ready to say like it's so over. No, it's the thing that makes it the most interesting is how opaque it all is.

Like nobody, even seemingly insiders, don't actually know what the fuck's going on. And to have that many billions of dollars in a company and nobody can figure out what's going on, and there's this broader public back, like Sam went, you know, a year ago it felt like Sam was, he was on top of the world, right? Like he was, everybody was like, was in his comments like worshiping him on every single

post, like, you know, this like sort of tech demigod. And now it feels like that has certainly snapped back. Like at least the X AI X community is deeply against him at this point. Yeah. And a lot of that has to do with the open sourcing and commitment to the developer community and a lot of different stuff.

Yeah, and it's funny. I feel like one of the first critiques of Sam was how he would give those interviews where it genuinely felt like he was just lying, but like with a very straight face. And he's like, I own no equity in OpenAI. And it's like, who knows what's actually true? I actually was curious and I tried to do some digging and people were like, yeah, from what I can tell, it's like legit. Yeah, yeah, no, it was legit, but there was always the soft power element.

The soft power element and then now in the for-profit shift there's this discussion of getting him what will effectively be like $10 billion of equity in the for-profit. And so to me, if you actually think about his sort of game theory is like, let me come in, sort of run the company, get so much control and power and influence and not have equity while it's still this nonprofit structure and then flip it into a for-profit structure and get equity then, right?

Like it almost is like, well, if you were always doing, like why is there even a discussion of you getting 7% of the company at $150 billion valuation if you never wanted it and it was never a motivation in the first place? Yeah. But it was kind of, if Sam had come in and taken a huge stake in the company in exchange for taking on the CEO role while cucking Elon out of, then there would have been like a lot of, you know, there would have been probably even more. Now he can make the argument where it's like, well,

the board just really wants me to be properly incentivized now that we're a for-profit structure. It's only right. And now the next time, you know, he's up in front of the Senate, what's, you know, getting grilled, they're going to be like, so what, you know, what changed? Like, I thought you just were doing this for humanity. And now all of a sudden you have your you know yeah it's interesting i i wonder like i i always wonder like how seriously people believe like super intelligence is right around the corner and the the revealed that's a few thousand days away it's a few thousand days away now it used to be a few quarters away it's's, like, it's kind of shifted so much. And, like, that informs your decision and, like, your actions, like, so much.

And there's, like, a lot of, like, revealed preferences versus stated preferences. A lot of the doomers are, like, you know, oh, 99% chance that AGI is going to, like, kill us all. But, like, yeah, I'm still, like, investing in, like, bonds because I want my 401K. Exactly. And it's, like, okay, well, like, you, okay, well, it doesn't seem like you believe that. It doesn't seem like you're really taking actions that are consistent with what your stated beliefs are. Maybe you're just trying to get attention.

But I do think even internally at these research organizations, they might have shifted their views. It's totally possible. I was talking to somebody about Jensen Wong and how NVIDIA has done a lot to kind of get around the chip bans and whether or not that was un-American. Because American companies will buy

100% of NVIDIA's supply right now. So the fact that they are taking any TSMC line time. Yeah, that's what he's saying, right, is we're still deeply supply constrained and we'll be for the next. Everyone is. Yeah. Like Nvidia could very clearly just make a statement saying,

like, we're only going to sell to American companies and I'm going to call up Oracle and Elon and Zuck and Google and all these people and just say, I have, you know, 100% of my supply, you guys better take it all, and they would. And so it's not an economic consideration. It's more like this long-term diversification. You want to be more of an international company.

And so if you really, really believe that ASI, AGI is around the corner, it's going to be this super bioweapon like, super critical geopolitical thing, then putting in the hands of the CCP is very dangerous. But if you deep down actually just believe that it's just like, it's just spellcheck, like it's just, it's just like a useful tool, like then, then as just like a libertarian normal person, it's like, yeah, like why would you respect the spirit of the law? Like you're only gonna go after the letter of the law and like the chip band says it can't have this much memory bandwidth and so you'll go one point under that and like that sounds treasonous if you believe that AGI God is coming

but it doesn't sound treasonous if you're just selling spell check, right? Yeah, yeah. So it was a very very interesting discussion and I think that's happening at a lot of these labs. I think that a lot of the labs are starting to change their view from like, okay, well, we thought we were just going to like nail the algorithm and get God, and we wouldn't even be able to process it or something. We got entry-level white-collar workers. Exactly.

And so, like, and not just that. It's like also God might be like decades away, right? Even a few thousand days, that's a full decade. And you've got to do a lot in between. And also just the scaling laws and all of the different things. We talked about this, but the few thousand days away sounds way better than 10 years. Than 10 years, which is exactly what it is. If you just assume a few is three, you just do the math and it's like, okay, that's a decade.

And we've been hearing about like self-driving cars a decade away and then you know it took like a little bit more than that took like two decades and so i'm still not even here and then and then the actual build out and roll out of these things is it takes forever to like yeah i was disappointed disappointed to see when you said you shared this earlier that tsmC is slandering Podcast Bros. Oh, yeah. They called Altman a Podcast Bro as if it was some type of attack. Yeah.

Which I had to reread it a few times to try to get their meaning. I was confused because that's kind of the highest food chain in the tech food chain. Podcast Bros. Podcast Bros. People that can navigate Excel without their mouse, venture capitalists after that. Then founders.

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

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

The question is just like, what process is it on? How small are the chips? Because we, I mean, America does have plenty of chip making capacity for the much larger, the stuff that goes in like a toaster and a washing machine like Global Foundries and a few other companies have like pretty big things there. Autonomous toasters are gonna be. Yeah, but it's when you get down to like

the really important like iPhone chips and stuff that's in the GPUs. It gets really, really difficult. But yeah, I don't know. Speaking of AI, there's been a lot of talk about, we can do this later, but there's been a lot of talk about the AI that Elon is applying to the X algorithm and whether or not it's good for the world or good for the user experience. And the question is,

is it actually AI or is it 300 people in a room just looking at videos and hitting a button that says degenerate or like, or like, or like good for society and they're just going like this. And, and then they're just like feeding those videos, right? Cause you, you, you remember early Tik then they're just like feeding those videos, right? Cause you remember early TikTok days

when TikTok, the algorithm was like getting good and you, I remember going on it, never, I don't think I've ever posted anything there, but I remember going on it and being like, wow, I'm like kind of shocked that they would feed me that video with how little I've used it. Like it was so on the nose.

Just pausing a little bit on like, oh there's a car in the background, the next video's a car video, then the next video's the deepest dive on a car you've ever seen. Yeah, yeah. It knows I'm a car guy, just like that. And I remember at the time there was footage

coming out of these effectively like farms, in algorithm farms is how I would describe them, right? Where there's just like people in rooms just like sorting like videos like manually. I mean, there's a little bit of that. Mostly it's just like how much time is spent on this particular thing, how much time are you hovering over it?

But yeah, it's like, no, of course. But it's funny to imagine Elon getting so, his dopamine rush is engagement, right? like he's all about like the metrics he wants to put points on the board and so you can see him just like dialing up the degeneracy to the point where he's like he walks into the room they're like sir we can't we can't go anymore like we were already showing the people fighting in the streets like and he's like more and it's like showing like like racial crimes yeah like he's just like more and they're like 11 put it to 11 i mean yeah yeah it's unbridled but i mean i think that's like the only thing that will turn the business around really like i think this yeah you were talking about garden that we had

in like tech twitter like it was truly like like the tech community was subsidizing that yeah yeah because like twitter was never particularly profitable the business never really worked that well and and but yeah and what's funny is like how much of the market cap was oriented around how much people love the product yeah like it was something when i discovered twitter yeah when i credit Twitter with massively accelerating my professional development from the lens of I was able as a 21 year old in a school, it was at UC Santa Barbara, it's not a tech school,

I didn't know, we had a technology management program that I was in, but it wasn't like everything we were studying in school was like 10 years behind, right? So it was like, I could go on Twitter and, and the biggest thing for me was like picking up the vocabulary of the industry so that when I would go meet somebody, I knew what they were talking about, even if I'd never done the thing. And so to me, I credit Twitter with accelerating my career like five years, something like that, because I just felt like I was a part of it

just because even though I was just kind of soaking it all in, I wasn't even a part of the conversations. And unfortunately, so I think that a lot of their market cap was just the fact that the technology industry and many other industries just love the product. It's like you don't want to short Twitter. It's kind of like this option value on the value of the network because it had world leaders there, the Pope, but then also every journalist who's posting every news story is breaking there. There was just something. Everyone felt like there was going to be some sort of value to come out of that yeah and the big critique was like you guys don't ship anything

everything's broken nothing like works like the dm suck and elon's like okay you guys want change like i'll give you some i'll give you some change yeah and then it's we're like oh actually like like i still type in twitter.com on my browser and every single time I get this pang of like sadness. But yeah, I mean, I think there's, there's something interesting where it's like, he clearly bought it because it was like the festering hive of scum and villainy in the sense that like every cancellation campaign started on Twitter. It would usually like the anatomy of a cancellation campaign would usually be like someone figures out that they don't like this tech CEO or whatever.

Then they go back, they dig up some tweet where they're like, capitalism is good. And then some tiny communist account quote tweets it as like, actually capitalism is bad and then gets like a thousand retweets. And then all of a sudden there's more people piling on, more people piling on, a real like back and forth fight. And then the low tier journalists can start reporting on the backlash on Twitter. And they can start saying, oh, well, like, you know, how are they going to respond? There's been this uproar on Twitter. This person needs to like talk about this.

And then once the low tier outlets are reporting, then like the New York Times and the Wall Street Journal and the Washington Post can like report on like the crisis that's happening and Elon just completely killed that by like taking a lot of people off de-amplifying thing community notes like there's so many different changes that he made just chaos yeah they got my blue checks like so there wasn't this moment where it's like oh well like a blue check person amplified this hate that like this hit piece on my company or like that was particularly devastating for me because i got my blue check and had it for like three months i had the same thing i had the same thing i was like really uh and then elon just gave it away yeah i gave it away yeah i think a

big i don't think that um i don't know how virtuous the decision was as much as it was, I believe there's a factor there, right? I'm not going to psychoanalyze Musk. Like, the logical decision to buy X is, one, there clearly was a lot, always a lot of potential right and if you're worth hundreds of billions of dollars if you want to make another hundred billion dollars like you have to take these like colossal bets right buying twitter and trying to make it a like as big as half as big as meta is like a pretty good way to try to do that right who knows if he'll be successful so there's the purely financial and like if you overpay for something, but then like make it 10 times more valuable,

you didn't overpay. Like you paid like a fair price, right? It was just risky. The other factor is it being like such a critical comms channel for all of what Elon's doing, specifically Tesla, right? Like the whole, there was years where people were like, Tesla doesn't spend money on marketing,

Tesla doesn't do this. And it's like, okay, they ended up like, like their marketing channel was Elon, spreading the gospel, being Elon. And there was a lot of value in making sure that that always stayed the same, right? Yeah, I think that makes sense. I think I'm a little bit more pilled

on the psychoanalysis side of like, if there was gonna be a communist revolution, it would have started on pre-Musk Twitter. That's right. And he would be the first one to go. And so there's a little bit of self-preservation there. No, and that's the thing, is that the real answer is probably not that he did it for one specific thing.

Yeah, probably a bunch of things. He made one of the smartest business minds, the smartest business mind probably of the 100 years-ish that we're on this earth, and he made like a very calculated decision across a bunch of different parameters parameters and he's fine if people think it's because of one of those reasons but really like you usually don't make a decision just for a single reason yeah yeah yeah and then i do think like he's he's been successful in kind of like just destroying the like cancel culture like boiling pot like it really served as like the kindling but everyone was

hoping that it gave other VCs a permission to yeah he kind of like canceled dystopia but I think everyone now is like we're waiting for utopia yeah and it's like maybe we're not gonna get that maybe Maybe it will, maybe the answer was just like, yeah. Maybe the town square is always gonna be chaos. Exactly, exactly. It's gonna be a lot more chaotic and maybe that means everyone uses it a little bit less or at least like the high signal,

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

There's a lot of people that are in that boat. And the people that are upset are, like, this very small niche, like, tech Twitter community that was very interested in, like, sharing links and, like, meeting new people and, like, amplifying small accounts and stuff. And, like stuff. Like the party around go-to-market strategy probably would have worked but been much less effective. Yeah. Where there was a time where if you understood the algo and you had the right people around you could dominate the timeline for an entire day. Yeah. Genuinely dominate it Yeah. Where, like, you could open, you could make sure that when people open the app, they would see your stuff three, four times in a single session.

And I miss those days. That's why we're creating our own channel here. Yeah, yeah, yeah. Yeah. I think there will continue to be hacks. Totally. Especially in... Like in Excel work.

Chaos is a ladder. Chaos is a ladder, right? And I see a is a ladder right and I see a lot of chaos and I see a lot of opportunity but yeah I mean there will be a lot of like sludge like the thread boys existed beforehand they've clearly amplified in the new era especially with the rev share stuff but then also just like the I think what's really thriving is like the the culture war politic it's also because we're going into an election, so it's even hotter than ever, but that type of stuff, I think there's a lot of people

that don't want to see that stuff at all. And so going back to the AI thing, what I would love is like, I don't want to go in there and every time there's a new trend, like there's this like hippo moo dang, have you seen this thing? I have no desire

to see any of that like and i could put in like a block on keyword but like what if somebody just shares a meme with a picture being like this is cute well then i'm seeing it anyway yeah and then and then you're kind of not in the in the in the meme sort of network but then daniel uh daniel shares like and then modong is left OpenAI. Yeah, exactly. It's like, okay, and then now it's back. I want to know a little bit. I basically just want to tell, I want to talk to the algorithm. And I think that that would be the most interesting thing.

The cool thing would be if, and who knows if this will happen, but if Elon could some, I invested in that company Farcaster, which is like a decentralized, you know, and their whole vision was like, hey, you build one network and then other people can build network, specific networks effectively on top of the network, right? Like, so if we could take the Twitter social graph and all the mechanics and build effectively our own service for that, like you could bring back og tech twitter to some degree right like it probably wouldn't be that hard like you know to i mean it would be hard but yeah if the social graph is still there all the users are there they're just not being coordinated in the same way yeah there's this theory of like the algorithm store like you should be able to pick your algorithm or whatever but i i actually would prefer to just basically talk to the talk to the llm like grok and tell it like hey like

cool it with the yeah that's why i don't the political social like like the the culture war stuff like i want to see less of that i know that it's grabbing my attention. And so you're getting this signal that that does retain. But I want you to push back on that in a way that basically... I found the not interested... Does that work? It doesn't work for me at all. It doesn't work at all. Like I've experimented with it where every single time I've seen something about Diddy,

I just click and say not interested in this post. And the next time I open the app, there's something else. So the only thing you can do is effectively mute that word. But then what if somebody posted a picture of baby oil? Exactly. You get it. It needs to actually. And that's the issue with Grok is it's a completely useless feature. It's completely separate. Like what I want to do is i want to every morning like have something scrape every tweet that would be in my for you page and my following

page and scrape all those tweets out and then run those through an llm that says would john like this based on the what we know about him and i've and i've told it a lot about what i like and express those opinions you can sometimes do this when they, like when you, when you initially onboard, they ask you like, are you interested in sports or technology? And then they tell you like, you should follow Cristiano Ronaldo or whatever. Yeah. But like, that's not enough. I like, I want to have a much more rich conversation and then have the LLM like kind of score each one based on my individual expression of that. I'm surprised that social networks haven't adopted that because every once in a while...

I think it's really expensive. Interesting. I think actually, like, right now, all it's doing is just, like, you know, this is recommended to, like, this tweet has high retention when someone sees this tweet they click on it they read the comments it's a good tweet the average time they spend on a tweet is a minute or 10 seconds if it's one second then don't show to anyone right and so they just they just blast this out and there's a little bit of like fit where it's like

okay we know that you like a little bit more of this that more like this but it's not it's not customizable in any way. Yeah. And really what I want to do is just print out all of them, have an AI do that, but until that becomes affordable, the next best thing is I just ask my secretary to print out tweets for me

and I just read it on paper. And so I have a bunch of these here that my secretary printed out for us to look through. Did you get a chance to look at any of these? Oh, you were talking about your favorite. You would have missed this tweet if you had your mute button on because it's about Diddy. Yeah, thank God I didn't mute it. Yeah, I think this tweet.

Read it out first put Diddy, SBF and Eric Adams in the same cell and make A16Z invest in whatever company they come up with this hurts because it's feels like there's a reality where one of these people would

raise from Andreessen well no it's more like looking at like the Adam Neumann thing. Like Adam Neumann, you know, came out probably a generational entrepreneur and like deserves to come back and raise a bunch of money because like even though he, you know, there were some issues with how WeWork was ran. Like that guy just willed something into existence. And I never understood the Adam Neumann critique in general because I'm like, all right, he took a bunch of ugly office buildings and used Miyoshi-san's money to make them beautiful and cheap

and available to everybody. Like, how could you hate this guy, right? These three, I think, are harder to defend. available to everybody like how could you hate this guy right these three these three i think yeah yeah harder to harder to defend i mean like the diddy story has become like he's like a murderer now it's a murderer rapist it's like insane um no he's i i actually haven't looked into the eric adams stuff i haven't looked at it enough either. What's funny is that it's not like A16Z invested in FTX. They didn't at all. They specifically didn't.

And it was because there were so many obvious conflicts, right? Like anybody that would look at, hey, the most prolific crypto hedge fund that does the most degenerate, crazy shit that is antithetical that is you know that is basically like manipulating all these markets also wants to own the biggest exchange yeah we should fund the exchange yeah like what could go wrong you know and so i think they don't get it right dan to me do you know who this is no so he works for morning brew he has a youtube channel oh he does some of those videos and he like, he's much more like a video creator than like an insider tech person. I don't think he's done a startup.

I think he kind of comes from like the comedy, stand up like video world. Now, he's done a lot of research and he actually understands things like really well. But it's just funny that like he frames it as like, oh, this is something Andreessen would do when like, I think it's just because like they're a big name or something it was kind of interesting like that's what he picked because like no i read

it as the oh you're kind of making a play on adam newman but like oh yeah okay well no because that's the most high profile company that andreessen they went back to after after founder who had had a fall from grace yeah um bizarre no but andresa doesn't get enough credit for not doing ftx right because you know they were pitched it of course over and over and over and over and over and had to have said no it's not like yeah it's not like it was an issue of price right yeah because that's not the and their fund was already so scaled like yeah um that was an intentional decision which is why from an investing standpoint you always have to ask yourself why am i the one that is doing this deal right like why are all these there's the market's not perfectly efficient but it's pretty efficient right and so And so anybody who is backing FTX,

well, Andreessen has their multi-billion dollar crypto fund and has a mandate to be in every important company. Why did they not do it at any point? Yeah, that's interesting. I don't think Founders Fund did it either, right? No. Yeah, I mean, the team always talks about, yeah, there were a bunch of red flags. But there was another thing.

I mean, some people passed. I mean, obviously, like, the best people passed just because they clocked SBF as, like, a fraud. But other people passed because either they were already in Coinbase or what's that? Binance. Binance. So if you're in those, you might be like, I don't want to do FTX as well. Yeah, but people always figure out how to do yoga.

Oh, he's building a finance super app. It's not an exchange. Yeah, it's true. And then, yeah, I mean, there's a bunch of stuff there. I think that this reminds me of another story that I don't think is printed out but is worth covering. It came out yesterday that the FBI is probing this group called Hone Capital for ties to the CCP. Yeah. And I think it was between 2016 and 2018, AngelList took $80 million in sort of direct investment from Hone under the conditions that Hone could get full visibility into every syndicate happening on the platform. Yeah.

And presumably all the data associated with those, which as you know, is decks, financials, you know, other, you know, basically. So like that to me, that to me is like the biggest story in tech right now. And there's, and there is enough, there's enough people that have vested interests in AngelList. I think it's generally great for the innovation ecosystem and is like a positive platform and force. But that to me is potentially one of the first stories of a series of stories around foreign money and venture that will just continue to drop.

I always wonder about the actual impact of that stuff, though. Totally. Because it's like, I was joking about like, imagine you're some spy and you work your way up and you know, you wheeze your way into a big venture firm. And you're like, oh, yeah, I'm with like the top dog. Like, I'm seeing everything. I'm seeing everything. And then the GP is just like, the future is NFTs. And you're like, God damn it. I will never bring honor to life. I want it to be weapons.

Yeah. Like, yeah, okay, so they steal the code to the monkey pictures. It's like, there are a lot of companies where actually the IP is not that valuable

and it's stolen. Yeah, but, I'll give you a story that is relevant. So Deterrence, defense tech startup, was speaking with a high-profile rolling fund GP on AngelList. And because Deterrence will be doing sort of stuff that's critical to national security, we need to know who your end LPs are. Sure.

And so we pressed said GP on who their LPs were, and he basically had to say, I don't know. I cannot verify that it's not Russian money, CCP money, et cetera. Yeah. And I independently verified with another, probably won't run this, but I independently, between you and me, I independently verified with somebody

who worked with the fund who was like, yeah, there's Russian money, like 100%. Yeah, I mean, at the same time, I get that it's a bad look, but I barely give the cap table to my own investors. No, but the problem is if that money gets invested into the company, it damages the company. Prospects, right? Purely brand and optical?

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

rights like maybe they get like a pnl yeah or like maybe they get a cap table once in a while but it's like they're never getting access to like the git repo they're never getting access like they don't they don't have any they don't they're not badged like the Git repo. They're never getting access. They don't have any, they're not badged. They don't get to go in the company. And so I get that it's a huge problem and a big thing in the abstract, but I feel like even if you found six degrees of separation,

there's some Russian or Chinese money in something, I don't know that that's as dangerous as we think it is, as opposed to the more obvious thing of just like there's an employee who's been compromised and just has access to the whole network right like that might be that might be actually need to be worried about like more I would say the other and then and then there's also like the the Chinese and Russian money there are expats there are people who are just rich kids over there who like want to play in this market.

They want to YOLO. They want to leave or they like America and they're just like not actually aligned. Of course they could be turned. Of course there could be spies. Like that definitely happens. And that is an issue. I would say that one, again,

all this information is possible to get in numerous different ways. If you want to find out about a company, almost any company, any tech startup that is pre-seed through Series B right now, you or I could get their most recent fundraising deck by the end of the day yes we actually wanted yeah right and we could probably find out of companies it's a bad idea to even copy it for you know for like the rest of the it's like for the next for the next like order or magnitude of company yeah and if they're it's like okay so you know maybe there is something there but like just having the deck isn't enough to really, like, create some sort of, like, geopolitical advantage. There's just a lot of steps to, like, actual, like, you know, shifting the geopolitical balance. I get it's going to blow up and it's going to be really, it's going to be a really big, like, brand issue.

And it's going to be something that people really have to fight through and, like, work through these questions. It's tough for AngelList because founders already are not generally super excited about their deal going on that platform because of the information issues. And Carta had a similar thing where they were like kind of selling data or something. They were trying to do secondary transactions, right? Private market, or cap tables should inherently be private and owned by the company. And Carta was leveraging that information to catalyze their secondary transaction. Their secondary market.

Which was the entire reason that they were going to be a $10 billion company. Because if they become like the NASDAQ for secondaries, that's bad. Yeah, like massively bad.

They can make 5% on every trade. They're huge blocks of trades. You could be facilitating billions of dollars of trades a year if it worked it would have been much more valuable than just a product yeah that the people that are like who's investing in card at an eight billion dollar valuation it's like well if you can be the platform for secondary transactions and get five percent rate on everything like you're such an unbelievably large business it's insane um but yeah i don't know do we know who like do we know who is running hone yet like who's Like, you're such an unbelievably large business. It's insane.

But, yeah, I don't know. Do we know who, like, do we know who is running Hone yet? Like, is this guy? There's some dude who's, like, running around, right, investing. He probably was very well loved. Because he's like, you get $2 million for your fund. You get $2 million for your fund. We're backing your next syndicate deal, right? Like, it's really, like, money is, like, a way to make fast friends in the valley right yeah that's true everybody loves a loose lp

um what else should we uh should we do this one uh oh yeah that's great i mean uh so it's funny. I have no idea. I actually don't know who's behind the account at all. I don't. And they seemingly came from like finance Twitter and like just inserted themselves because like. Yeah, it's one of these things where it's like it might not even be a girl. Totally, totally. Who knows?

But good, good posts. So Sophie says, I think we can do away with seed series a b etc either a round is a vibe round or an excel round and then matt turk says something like this with the midwit meme and the midwit meme is just at the early stages vibes in the midwit is excel it's all it's all vibes and i mean we're certainly seeing that with like vibe rounds getting done in the seed stage and then also vibe rounds getting done in you know tens of billions and beyond the tens of those are the real vibe rounds yeah do you think do you think it just all comes down to the founders of the ability to create a vibe round at any point

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

Somebody's like, okay, this is great momentum, this thing's working. If you have narrative market fit and like venture capitalists are sort of applying this lens to your business, which is like this is a crazy new market and a crazy team and they're just going to figure it out. You can also get the 60. Right. And so I often think whether it's truly like a PMF round or a vibe round, they get done in a similar range. If the founder of Cal, if the, if the caliber of founder is, is, you know, relatively, you know, equal, the real crazy multiples come when it's both. Right. When you have the product market fit and the narrative market fit. I'd give the example of that company, Harvey, which they're the legal AI company. And they have probably 10 million of ARR or tens of millions.

I don't actually know. I think people talk about their metrics, but it's sort of unclear. But the narrative market fit, which is that LLMs are going to dominate the legal industry is so strong that why would you not do this round at 800 million, right? Like just crazy multiple because yeah, they're the category winner and like the narrative tracks. And it's not like the early days of LLM development where, I mean, what OpenAI probably made no money for like eight years right it was incorporated in what 2016 or something right like as a nonprofit for that reason and like all of those labs didn't

really have products that anyone wanted to buy for a very long time right even GPT-1 GPT-2 like they had api's even the first GPT-3 it was like kind of cool but no one could figure out a way to really incorporate it in a product in a meaningful way. This company, Copy.ai, rocketed to like 20 million of ARR. Because they figured out how to actually make that. They figured out how to leverage the API, and it was great. And I think they had to completely pivot

because people just started using ChatGPT, right? Because it did exactly that for way less money. Yeah, there was another one too, some sort of writing assistant. I think it had like one of those personal names, like not Harvey, but it was like a human name. Yeah, so I think vibe rounds or Excel rounds is right, but the way to look at it is to say, is this a product market fit? You know, sort of like we're doubling down

on this like momentum, like actual business traction, or is it narrative or is it both? And that's the crazy stuff. Yeah, there does seem to be like a certain type of founder that you can just like will a vibe round into, like Adam Neumann to your point earlier. Well, it's category dependent, right? But right now if you're...

Because like, yeah, I mean like WeWork was not in some like AI mega trend, right? Like there was no if you're because like, yeah, I mean, like WeWork was not in some like AI megatrend. Right. Like there was no there was no like megatrend in like, oh, yeah, of course, real estate in 10 years is going to be completely different. Like whereas like the legal profession is pretty consensus that like like the tools are going to get better. Yeah. Who's going to be the winner? How what will the market structure be? There's a lot of questions there, but you can clearly build a thesis around that, whereas saying that the real estate market is going to be dramatically different in 10, 20 years,

that's not an optimal assumption. I think the WeWork was an incredible product, partially because it was venture subsidized. The fact that you could pay $300 a month to walk into a beautiful space and have a desk and have coffee and snacks, like they were just not charging enough, right? And then you combine that with incredible positioning around and storytelling from Adam around what has this actually become?

WeWork is, you know, a dominant brand within everyone's daily life right like something that is the whole vision of apartments and offices and yeah um you know it was easy to buy into that when he was adding a new rework every two days and i'm sure the retention when it was really cheap was great and you know people love the product and people you know i think think. So, again, that's him. He was forcing the narrative. Yeah. But the product market fit was real. Yeah.

He was able to, like, sprinkle the vibes on top. Yeah. I think it's funny as founders, really convincing founders, the most convincing founders convince themselves first, and then by nature of being 100% convicted, they, like Breslow is a good example, right? Breslow, when he goes out and pitches, is 110% convicted in what he's saying. So much so that other people are like, this sounds crazy, but like, this guy's convinced and he's gotten this far so like why would you not bet on him right yeah um i think that wears off eventually you think it wears off just because

you become jaded because like you're like as you get further in your career like you realize like wow i was 100 convicted about that particular thing and it didn't pan out therefore maybe i should be less convicted about the next thing i think it't pan out, therefore maybe I should be less convicted about the next thing. I think it wears off on a founder to founder level. Like nobody stopped believing in TK, right? Imagine what Uber would be today. It would probably be Waymo.

I think they have a partnership now or something. Yeah, yeah, yeah. I wonder if there's anything that you can do to upregulate conviction. Almost like the inverse ayahuasca thing. I mean, I guess for some of the psychedelics, it does seem... There was kind of that counteraction to... Well, Steve Jobs took psychedelics and he came back extremely...

Focused. Focused and probably more aggressive about, you know, I know the truth. I know that like this product is the right one. And he was like, you know, unwilling to accept a plastic, you know, like a plastic screen on the phone. Like it had to be glass because like that's what he like knew to be true. Meanwhile the Apple designers today are like, we're gonna put the camera offset from the back of the phone so that people have to buy a case which is gonna increase our AOV by 6%

and drive meaningful. Where it's like, oh you made a phone that like doesn't sit flat and the camera lens sits on the... Yeah, I think the topic of psychedelics is a funny one, because I do think that the technology industry has for a long time benefited from it, but it actually went too far, right? Yeah. far right yeah and yeah the whole ayahuasca by itself i think will be studied like to me that's

like the overdosing on lsd of our generation where like a lot of people use lsd and you know experience some range of benefits from it right the psychedelics might have just straight up been weaker back in the job totally yeah he might have just straight up been weaker back in the job totally yeah he might have been taking like one-tenth of the dose that like some tech middle manager takes on some ayahuasca retreat yeah like turbo fries their brain or whatever yeah the funny thing about the average i've always always avoided it had no interest in it and fundamentally like you know would have had had plenty of opportunities where I could have and opportunities where I could have chosen

to do something like that but once people understand the actual nature of an ayahuasca retreat most of them involve going with a hundred twenty to a hundred strangers and sitting in a room. And the stories I've heard of people saying, like, yeah, I was in a room with 100 people. Everybody's laying in a cot, throwing up, having an exorcism. The funny thing is people end up ultimately losing themselves so much that I've heard of men starting to masturbate in these sort of like group settings I know these two girls that run a popular health podcast in LA and they were approached by this they were approached by this company in Costa Rica that said hey come come down

and experience like you know it's it's on us it's comped and they were they were telling me the story they were like yeah a bunch of like half the room was throwing up 10 of the room was just masturbating and and i was like oh my god i'm so sorry and they were like no no it was incredible i was like and what did you get out of it? You come, these people come back and they're even more lost. Like it seems like it sends you down this turbo fry. I think, I think Mark called it turbo frying. Yeah.

It was a land shark who posted like the screenshot of land shark saying like, you know, you get your gigary, your brain, turbo normies get their, their brain gigafried because they're like, they're not settled spiritually. And then they go into this. And that's the thing with psychedelics. If you are incredibly mentally stable and fortified and you do these things, it can have a positive effect in terms of helping you see things in a new way. Yeah, you have to imagine that, I mean, I don't know exactly Jobs' timeline for this stuff, but it's possible that he had already created a billion dollars of value and created some of the greatest advances in computing history ever.

And so going into that, you're probably pretty confident. You're not like, where's my place in the world? Like he's going into that experience thinking my place in the world is to create great technology and I'm really fucking good at it. And so I'm just doubling down on that when I come out of this. And psychedelics help you see things from new angles. angles that's the best way that I think for somebody that hasn't ever tried them to look at it is like you're looking at an object like you're looking at a computer and your entire life you've looked at it one way and psychedelics help you view it from like this way and you're just like okay what if we you know made the whole back structure clear so

you could see into the machine right and it's like that becomes an iconic feature but it wasn't like steve went into a cave and then invented computing right like it was like he didn't come out with like the circuit board yeah it was more so i think he deserves credit for things like design and deeply prioritizing the user and coming and thinking about products in new ways and delivering elegant versions of that right I do have a friend who is already like one of the most aggressive people I know and has always been and he did acid one time and he can't and I was like oh yeah like stuff like we wiggled around but my number one takeaway was that i need to be more aggressive and i was like

it just makes you more of you yeah yeah and i was like that's the opposite of what you normally hear about where it's like oh i was like it's so at peace with the world like you know i need to like think completely different i need to be even more aggressive it's like yeah already one of the most aggressive guys okay should we talk we talk about Turner's tweet? I kind of like this one. Can you see this? Tech ecosystems right now. SF, our most important startup is imploding. NYC, our mayor just got indicted for corruption. Europe, we are banning AI. China, VCs are suing all the founders. Des Moines, Iowa. We'd like to buy 50% of your company for 50K. I think it's great.

I mean, it's pretty much... Did you see the chart of the Chinese startup formation? Oh, yeah. How it just fell off a cliff and no one's starting companies there? Yeah, because they can... So for those who didn't see it the basically if your company fails they can like come after all of your personal personal assets um which feels fairly communist which makes sense makes sense um but yeah i mean i think it's like that's why

that's what makes technology beautiful right it's not just like is people like try to blunt put tech in a single bucket and this and and even to people that aren't in the industry if i ask me what i do i say i'm in tech right and then they have an idea of what that means but tech is so different in different like you it's surprisingly like different in different locales right like it's still operating yeah if you the real alpha the real alpha is to go to the midwest and just start offering slightly better terms yeah i'll give you 60k i'll give you 50 on 500 yeah 55k yeah 50% yeah i mean the funny thing is that like these are these are framed as like they're all in chaos like it's all bad news everywhere like everything's falling apart but i read this as like you have to be in a major american city yeah yeah i would choose sf

in new york where one startup is employing and the mayor's getting indicted versus banning ai bc's suing founders or clearly clearly like, like, you know, capital markets that are just like, you know, defunct, basically. It's like,

yeah, like, SF, I don't even know if I buy the imploding narrative, but like, if it is, that's a lot of opportunity.

That's maybe creative destruction or creative disruption. Maybe there'll be, you know, time for us to go join OpenAI and climb the ladder. That's the long-term, what's, what's your long-term vision for Technology Brothers?

C-O-O, C-M-O of OpenAI. Yeah, a more hostile takeover. You know, they always talk about, like, the, you know, Sam Altman, and if you drop him on an island, he could become, like, the cannibal. It's like, no. I could even do it better. I could do it better. The knife.

Yeah. Yeah, who knows? But I do think that there's this tendency to latch on to headlines and just everything behind the headline in every single one of those cities, there's amazing companies that are hitting their stride, finding, you know, I don't know.

Except in Europe. Except in Europe. it seems in a lot of shambles it seems we it's time to colonize europe yeah they colonized america well i was colonize it but i was joking about like yeah like either in germany or or france like yeah france specifically like you know it just seems like authoritarianism is on the rise like they're banning free speech they're banning like they're arresting paul durov the telegram guy and it's like yeah every every 80 years like america has to go in and like cleans clean it out clean house clean house like we gotta go all right this was a fun social experiment there's only one form of government that actually works and we're here to sort of bring it back.

Let's reinvade. We've brought democracy. We've exported democracy. It's the greatest export. Free markets and democracy. But sometimes people forget that. Yeah. What else is on the docket today? What else do we have?

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

in cash flow yeah and i was like yeah yeah i mean that that's like cool story bro i was like i was like you're uh you're gonna go into one of the most cutthroat competitive industries seven to eight years behind lucy and then just think that you're gonna like ride to like cash flowing some asset yeah from zero as there's all this money coming in and like turmoil and it made me think of something that i think is a topic yeah that that more people need to understand is like there's this attitude within like the like startup founder of like I'm gonna try to find these like easier ideas and usually usually they land on ideas that are perceived to be easy for some reason which is like okay I get a plastic thing yeah put nicotine pouches in it yeah I just start selling

it yep and I'll get to like 40 50 50 mil and just cashflow it. It's not a venture thing, but like, and there's this idea too, that for some reason, cashflow businesses are easier to build when it's like, okay, would you have been able to get, you wouldn't have been, Lucy wouldn't have been able to survive without venture capital to get to the where. It'd be impossible. And so I think it's like, it's probably a topic that will, I mean, I just see it come up all the time where people are trying to find easy ideas. The exception in the tobacco category and the nicotine space is just straight up being

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

Not like, I mean, like puff bar cash flow for a while. All the vape businesses, yeah. Yeah, yeah, a lot of these vape businesses like popped up overnight, just like completely broke whatever rule was in place and it's like well you know big tobacco isn't going to break that rule jewel isn't going to break that rule any anymore like has been you know like if there's a flavor ban they can just like move around it or whatever but yeah it's it's yeah so that that was something that came up multiple times this week where founders were just searching for what they perceived to be an easy idea because it was very tangible.

Yeah, yeah, yeah. And then you're just like, no, well, you know that this is going to be extremely difficult on all these dimensions. And in that situation, I was like, best in class team with Lucy that's been executing on the same vision for almost closer to a decade first year and So that was funny and then the other thing that The other thing that came up that I think is funny I was the the text that I sent to buddy was real men raised pre-product because like I Have a friend who's starting a new

company and he's like hi he's done well previously he's like hiring engineers for the new company but he hasn't he hasn't raised yet and i was texting him wanting to invest and he's like yeah we're gonna wait till we get to like some revenue traction and i was like god like it's so soft just like you know like and that's again like the vibe round versus like the traction round is like i'll give you the valuation that you you will get when you have the traction i'll give it to you now yeah but like just fucking sit like send it send it yeah like be a man like a race like if you have conviction have some conviction in your idea, raise pre-products. Like it's soft to do anything otherwise.

Like the venture economy depends on people going full send. Yeah, yeah, yeah. You're hurting the economy. I always laugh thinking about this conversation that Mark Andrewson was having with Ken Griffin. And he's talking about like his earlier funds and how he was like kind of trading his own money. And then he like scaled up the fund, raised, got some LPs,

like got some meat on his bones so he could like size up the firm and like start going bigger and bigger. And now, you know, he still owns like a huge amount of it. But he was just like, you know, Mark, and obviously, as you know, like, you know, if you don't get some capital behind you, like you don't go very far. And he just said just like, you know, Mark, and obviously, as you know, like, you know, if you don't get some capital behind you, like, you don't go very far. And he just said it like it was just like such a truism.

And like it was just such a funny like disregard like anyone who's like, oh, bootstrapping. Like, yeah, it's like, no, no, no. Like, not if you want a good idea and are moving quickly and want to actually win and play some deeper, bigger game. But the myth of like, oh yeah, a lot of ventures burn out, therefore some sort of lifestyle business must be easier or something, I've never liked it. Yeah, the issue when people analyze bootstrap versus venture businesses is they'll be like, look at this business. It was bootstrapped and it sold for a billion dollars. Yeah. And they're like, look at this company.

This company had to raise $300 million to get to a billion dollars. Yeah. Discounting the fact that the bootstrap business took 30 years. You know, like they're like, look, they were able to bootstrap. And it's like, yeah yeah you'll be 70 years like uh um so anyways real men i'll just end this podcast by saying real real men raise pre-product indeed