The Changelog: Software Development, Open Source - Open is the way (Interview)

Episode Date: July 31, 2024

Joseph Jacks (JJ) is back! We discuss the latest in COSS funding, his thesis for investing in commercial open source companies, the various rug pulls happening out there in open source licensing, and Zuck/Meta's generosity releasing Llama 3.1 as "open source."

Welcome back. This is the Change Log. We talk to the hackers, the leaders, and those who are funding the future of commercial open source software companies, some of which Jared and I have personally angel invested in. On today's show, we're joined by Joseph Jax, aka JJ, the founder and solo GP of OSS Capital. And we really came to this conversation with a lot of questions around the state of funding for commercial open source companies, JJ's thesis for how he invests into these companies, the various rug pulls out there and how they're just not cool, JJ's thoughts and opinions on OpenCore, and why Zuck and Meta was so generous recently

with the release of Lama 3.1 being free. Not quite open source free, but very free. A massive thank you to our friends and our partners over at fly.io. That is the home of changelog.com. Scalable, full stack, without the cortisol. We put our app where our users are, and that's everywhere. And you can too. Learn more and deploy your app in five minutes at fly.io.

Okay, let's do this. What's up, friends? I'm here with Firas Abugadije, founder and CEO of Socket. Socket helps to protect the best engineering teams out there with their developer-first security platform. And so Firas, speaking of developer-first, Socket is developer-first. What does that mean? What do you mean by being developer-first?

Most security software is typically sold to executives, so it tends to suck to actually use it. So the company, the vendor goes in and makes a sale. The executive thinks it looks good, but they don't actually care at all what the developer experience is of the tool. So I think that's where I would start. The first problem with security tools is they're sold to executives. In the best case, those tools get purchased and they just sit around on the shelf bothering nobody and protecting nobody. But in the worst case, they get rolled out and they prevent developers from getting things done. And they just get all up in your face with alerts and pointless noise that isn't actionable. And if you actually go and fix those alerts, you're not even improving security because a lot of the time those vulnerabilities are super low

impact. That's like the dirty secret of vulnerabilities is most of them are low impact. They're either in dev dependencies, so they're never going to run in production or they're really difficult to exploit. Or if you exploit them, there's nothing really there. It's like a denial of service in some random component. And in reality, like that's just such a low risk in terms of just your priorities

of things you need to work on as a developer. I would actually say probably 90 or 95% of the vulnerability alerts that developers are used to seeing from other tools are just completely pointless. They're just fake work. And fixing them doesn't even meaningfully improve security at all. Dang, tell it like it is for us. That's the status quo. We come in as Socket and we're like, look, there are real threats out there. We see packages getting hijacked, getting compromised every day. Like this happens on an hourly basis. If you go to the socket website, socket.dev, you can see,

we have a feed of packages that we've identified. And a lot of them are in the last couple hours, we've seen malicious code go up on NPM. So this is like a real threat. So the first thing we do is we just say, look, let's focus on those threats. Those are intentionally introduced attacks. Those are code that you never want to run even once on your system. You never want to ship that to production because you're going to lose customer data. You're going to lose, you know,

your personal data on your laptop. And you need to identify those threats before you install those packages. And in order to do that, you need to be proactive. And that's what Socket does. We're really trying to bring to light the real threats that matter. And that's the whole design behind Socket to be that way for developers.

There you have it. Protect yourself, your team, and your software from the threats that really matter. Don't do fake work. Use Socket. Socket.dev. That's S-O-C-K-E-T dot dev. Book a demo. Install the GitHub app.

Install the Socket CLI. Whatever it takes to take the next step, do it. Go to socket.dev. Again, socket.dev. JJ, it's literally been years since we've spoken. I'm so sad by that. Like, I love the conversation we had. Venture capital meets commercial open source software. We didn't even call it

cause then. It wasn't C-O-S-S, which has become the thing, right? But back then it was like the beginning, the budding of this idea that you've done with this fund. I think it was the earliest days basically we recorded, if this is accurate, October 17th, 2018. Wow. That was literally a month after the fund was started. I think you had just announced it. Yeah. Yeah. I want to give you guys the untold story of those days.

Okay. Which I may have told snippets of publicly, but. Drop it. Let's hear it. Let's get the dish. I had no money at that point. Really? What do you mean by no money?

Zero dollars? I was just coming off of a failed second startup where I basically ran out of money and the company died. And sort of leading up to October 2018, when we did that recording, I was doing blogging. I was blogging quite a bit about commercial open source, like open source companies, like why are they interesting? They're sort of different. They're kind of misunderstood. Lots of nuances about open open source, like open source companies, like why are they interesting, they're sort of different, they're kind of misunderstood. Lots of nuances about open

source itself, but also kind of like the intersection of open source and startups is kind of strange. So the blogging encouraged me to sort of learn more about the market and companies that were raising capital. And if you remember 2018, sort of, we did that podcast at the end of 2018, but 2018 was a super like eventful year for open source company sort of like outcomes, right? So that was the same year Red Hat was, they made the announcement, the transaction didn't close that year, but they announced that they were getting acquired by IBM. If you remember, GitHub was acquired by Microsoft that year as well. Cloudera and Hortonworks did a big merger, the two big Hadoop companies. I think the year started off with a company that I was sort of competing with a little bit in my first startup called CoreOS, which is like a minimal operating

system that they were acquired by Red Hat. I believe MuleSoft was acquired by Salesforce, which was another pretty big acquisition, sort of an open source enterprise service bus, middleware technology. And I'm friends with the founders of all these companies now, like years later, just kind of building the fund and kind of reaching out to these people and sort of telling them what I'm doing. So like, lucky to like have made a lot of progress. But yeah, I mean, I've been lucky enough to get to know like Bob Young, the founder of Red Hat, Tom Preston-Werner, the founder of GitHub,

Ross Mason, the founder of MuleSoft. I knew Alex Polvey from CoreOS previously, but a lot of those relationships happened as a result of starting OSS Capital and like kind of evangelizing our points of view to the world and like sort of explaining why we think open source companies are interesting. Like sort of this give it an acronym. sort of messy because it should be like cost capital, not OSS capital. Because a lot of people are like, oh, you're like funding open source projects, right? That sounds so awesome.

I'm like, no, we're not funding open source projects. We're funding companies that are built around open source projects. So, so much nuance to this. But yeah, it's pretty crazy. It's been going on five years of having the last conversation. And as I was saying i did not have any money then so my previous startup ran out of money i had no little savings but not enough to make make a big splash or anything so i tweeted the fund and i announced the fund

when we had i think no money under management and And then the following 30 days, I think I was able to raise like 500 K or something from, because the tweet, I actually have the launch tweet like framed in my office. It was like a pretty momentous, the tweet went crazy. I didn't really have any Twitter followers at the time, but like there was like hundreds of retweets and almost a thousand likes on

the tweet or whatever. And this was like the first time anything like that had happened to me and so i was like wow this is i i kind of had an intuition that was like a good idea to like do oss capital but like the the validation from the tweet was like oh shit like i have to actually like do this fund now yeah put it out there yeah do it yeah i mean it was very helpful just to kind of get feedback and stuff. But yeah, so our biggest investor in the fund, I'll give a shout out to for actually the better part of the first two years of the fund is a friend of mine who was an investor in my previous startup by the name of Clement Pang. And Clement has been an amazing supporter of the fund. And he was the founder

of a Sequoia backed company called Wavefront that was acquired by VMware for a few hundred million dollars. And so he had some liquidity from that. And so Clement, I don't know if I have his permission to share the specifics, but he was our, I'll say our largest LP in our first fund for the first more than two years of the fund, we only had like, you know, a few million dollars raised. And it actually took, I mean, I'm skipping a lot of history here, but it took close to three years to raise like our first, our first proper fund, which was our first fund and a $52 million fund uh the reason i think it took three years was the 2018 kind of ended and then 2019 2020 which is covid were really hard and then 2021 is when

we actually raised like most of the money in that first fund so like you know almost 50 million dollars of the 52 million dollar fund was raised in 2021. Unsurprisingly, 2021 was when money was falling out of trees. You're catching it, yeah. I was extremely lucky with timing. And the other thing I think very fortunate and lucky with timing too was if you zoom out in the last five years, which really seems like a decade or more,

so much stuff has happened in the last five years, which really seems like a decade or more, so much stuff has happened in the last five years. Our thesis really ended up becoming proven out and like really correct. Like there's a lot of data points. And I actually, it's kind of funny. I talked to people where like, yeah, I started this fund five years ago. It was a really weird kind of like super contrarian thing. Like people in the tech industry found it to be super interesting, especially people that were sort of coming from an open source kind of disposition or that are sort of developers or building infrastructure stuff. Like they really got it. But to say that like open source companies would be like a thing where there's going to be like tens of billions of dollars getting invested in that category sounded insane, like five years ago,

sounded like totally crazy. But for me, I was just very fortunate and lucky to have like, the experience I had with Kubernetes, in particular, going back a decade now, like 2014, 2015, learning about that community and getting to know how sort of great transformative open source projects are really built and just associating with the people that were in that ecosystem very early on and sort of seeing how the project grew and developed and kind of like also putting together different ideas around how you could create a company and how business models work and how business models are a little different and all that. I was just very, very fortunate.

And so now we're on our third fund. Our funds are all the same size. OSS Capital has remained a very small team. It's a solo GP fund. So I'm the solo GP. I kind of raise all the money and invest all the money. But I have a CFO now. So that's a big upgrade.

I hired a CFO about a year ago. And yeah, we manage, including a couple of SPVs, we manage a couple hundred million dollars now. And we have like 70 or so investments. We've led almost 40 rounds of funding at incorporation, meaning we're like the first investor, first check and price the company, first board member, I think more than 15 instances of that. We've had one exit, which is exciting. We sold a company not really correct to call it a a sort of next js competitor alternative it's a react ish sort of web development framework

and uses a lot of web fundamentals and has some really beautiful abstractions and so that was a company that we we uh we invested in and we sold it to Shopify, but we've been very lucky in a handful a thesis to, you know, attracting founders that, you know, honestly have had so many options and ability to take money from any fund out there that, that, that can see how, how special they are and like take a bet on me and our fund and what was this capital's thesis. Um, and so extremely lucky to have just the privilege of working with like Cal.com is doing incredibly well. We were their first investor.

Popscotch, which is like a kind of an API development platform. Millions of users. They're doing phenomenal. Plane, which is like a monday.com or kind of ClickUp. Also going after kind of Jira application company. We're very lucky to be the first investors in Parallel, which is actually a game studio building game experiences. And they're worth a few billion dollars now. We were the first investors in a company called Liquid AI,

which is building AI model architecture alternative to the transformer using some scientific kind of breakthrough work that came out of MIT and Austria Vienna and yeah I mean we've invested in a lot of different types of things mostly b2b oriented kind of software company technology companies but we've stayed true to our you know open source roots and core to everything we're doing. And yeah, very optimistic about the future. I'm curious about your thesis. I want to know the data points in the thesis. I don't think I know it for sure,

but I want to tangent back one step because I recall when we were working closely with the GopherCon folks that around this time, were you the person who created KubeCon? I believe you did, right? Yeah, that's right. I you the the person who created kubicon i believe you did yeah that's right like yeah i did i did the logo the name i organized the first two events yeah gopher con brian and eric were too busy but they were thinking of doing it and i knew i knew them and still do i haven't caught up with them in a while i should i should fix that but uh it was kind of kelsey and i and a couple of other people were sort of like, this is an obvious idea. Someone should just do this. And then I think I just like woke up at night and I was like,

look, here's the name. This is the thing, whatever. And then I just kind of got involved, but it was a very, it was a very obvious idea. I was just also fortunate and lucky with timing around that. But yeah. Settle the bet then, because I've been calling it KubeCon. Some people call it KubeCon. Obviously, it has a longer version now, which is KubeCon CloudNativeCon. That's a mouthful. But is it KubeCon or is it KubeCon? I like the diversity of pronunciation for different things. And I'm not going to pick one. He refuses. For my personal pronunciation,

I'm trying to remember what I would say. I think I would say kubicon. I don't know if I would say cubecon, like pronouncing the cube. I would say kubicon, like K-O-O-B. Right. That's probably how I would say it. That's probably how I still say it. But yeah, I think it's kind of, I mean, some people go kubicon. k-o-o-b right uh that's probably how i would say it that's that's probably how i still

say it but yeah i think it's kind of i mean some people go kubicon all right i've never heard that one i've never heard that one okay to each their own i guess i know i've argued both sides you know depending on whatever side adam's on i just pick the opposite and i tell him you're saying it wrong dude uh yeah because he has to i have to i'm all i'm all for diversity pronounce it how you like okay well let's go back then to the real meat here which i did want to talk about that because i'm like gosh you mentioned kubernetes i recall kubicon i recall you being the person who created it and now it's just massive it's a massive conference i mean you were very very early in this idea obviously and i know you didn't found the cncf but kubcon became their conference

it's the epicenter of the cncf and all they're doing so every year there's that's what's happening right that's the place to be and we were there recently uh this last year wasn't it jerry this last year not this calendar yeah kubcon north america right in chicago and it was the the expo hall floor was a circus it was so wild but anyways let's go into your thesis what is the thesis that you drive upon for this this fund this company so it actually took me probably so the the sort of the exoskeleton of the thesis has never changed. And it's kind of been like very consistent. I've been describing it in slightly different ways.

I would say about a year and a half in, maybe even a year in, I got to look at my tweets because I think, or zeats, how do we pronounce that? Posts. I think zeats just sounds kind of like perverse or like an std or something like it doesn't sound like some sort of a skim a skin abnormality or something yeah yeah some disease i'm just gonna say tweet i came up with one phrase because people ask me this question all the time like what is the thesis it's like so strange and the phrase i want to say probably late 2019 maybe even early 2020 is open source is eating software faster than software is eating the world so that's been the

phrase and that's kind of been the slogan and the whole like mantra or whatever and i think it does really well tightly kind of articulate what the fund is about, which is like, it's easy to explain things to people when you can kind of build on an existing, well-understood like dynamic or concept or whatever. It's sort of like reasoning from analogy, which I think often is like not that helpful because you're not really deeply understanding something

if you reason by analogy. But like Marc Andreessen is very famous for saying software's eating the world and this is kind of the you know the adresen horowitz thesis right and they're very known for that so people have a strong understanding so i was just kind of like trying to build on that to say like well actually we think instead of software in the world it's kind of true we think something more important and more kind of disruptive is actually happening, which is that open source, which really means something very specific. It's like a really like kind of specific phenomenon and important. Open source is eating

software itself at a rate that is faster than software is eating the world. You know, so I'm beating the drum on this for probably another year, two years go by. And then as I was raising our second fund, which was sort of like 2022, 2023, I started to visualize this. I started to kind of like write down, I think I was like having breakfast one day or something. I was just like trying to write down like two curves.

Like here's one curve, like two waves. There's a really big wave, which is like the software in the world wave. And then there's like a smaller wave, which is like open source eating software wave. So they overlap. They're like, they're sort of superimposed on each other. So the big wave is like this huge wave. And then if you look at the the horizontal axis, it's time. So number of years, number of decades or whatever. And then the vertical axis, like kind of up and down is the sort of the size of the market and how much money, how much industry size kind of has been to sort of like eaten, how much of software has eaten the world, right? So it's like like tens of trillions of dollars or whatever on the vertical axis.

Then on the horizontal axis, it starts around 1970, maybe 1960 or something. Then the wave goes, Oracle, Microsoft were founded. Then what other software companies and software industry were created. It's like this line that develops and you sort of put logos on it. And then the bottom wave is open source eating software. So how do you visualize that? But again, it's in the context of companies.

And so obviously, you know, I put Red Hat in there and I put like, you know, JBoss and whatever, a bunch of other companies. And then as time goes on, you know, you've got like, you know, MongoDB and Talent and MuleSoft and GitLab and HashiCorp and all these other companies. Databricks. And there's more and more.

Odoo, Grafana. There's a lot of these companies now. like image of the slogan, like the visualization of the slogan was that the rate of growth of the small wave, that small curve, the rate of growth is faster and like expanding at a faster rate than the rate of growth of the large wave. Because the rate of growth of the large wave has sort of hit this kind of like asymptote or sort of like scale in which you can continue to sort of like digitize more industries and sort of like software is eating more and more things. But it's almost pervasive at this point. It's like, yes, there's like software for so many parts of the world. And now if you really look at the fundamentals of software and sort of like

what it really means, like there's two ways of building and sort of releasing software to the world, you can build something that's proprietary, where the person who created the technology or the software is solely in control of the ability to make the software better and improve it and dictate, can you trust it or not? The other way is open source. And if you look at open source, in the context of Linux, there's so many reasons why Linux succeeded in basically becoming the dominant server-side operating system. By the same token, there's so many reasons the Android smartphone platform succeeded on smartphones, just in terms of the number of smartphones. There's many reasons why languages and databases are increasingly becoming like dominant as open source, open platforms. Now we see things like Lama, which is actually not technically open source. But I think

there's like, there's some forgiveness that we have to kind of offer there because neural networks are not source code. They're a different artifact. And we've blogged about this and stuff last year, actually. So like the idea, the principles of open source have remained unchanged. There's a lot of resistance to that in the world of capitalism and the world of business, particularly by financier types and VCs. I don't consider myself a VC. I consider myself something a little different, but technically my job is as a VC. But we have a philosophy, we have a view that the world across all technology categories, starting with software, but it'll eventually sort of like permeate across other things too, is moving more towards

transparency and systems that you can actually trust and verify that you can trust them. And systems that are user empowered, user owned, user controlled, and permissionless. And those things are totally orthogonal to any particular type of technology. You don't need to be a blockchain, you don't need to be crypto to have those properties. You do need to adhere to a certain set of principles, though. And so that's kind of structurally like what the fund is about, how we've been sort of prosecuting these views has kind of like been relegated to like software company startups and like open source companies largely with like a handful of exceptions but i plan on doing this for the rest of my life and

it's extremely fulfilling and comforting to see more and more evidence of the thesis actually playing out to be to be more more more and more correct i mean i can i can certainly imagine a world where like i wake up every day for years on end and the world is just more and more proprietary and more and more locked down and more and more you know centralized and uh there's like less hope of any of these ideas having any long lasting potential. That would be really depressing. But so far, I see a lot of evidence on the other side. So it's kind of cool. What's up, friends?

I'm here with two new friends of mine from Speakeasy, Sagar Bachu, co-founder and CEO, and George Hadar, founding engineer. So for the uninitiated, Speakeasy takes care of the entire SDK workflow to save you and your team significant time, delivering enterprise-grade SDKks to your customers in minutes you can generate best in class sdks in typescript python go java c sharp and even php so sangar what's your excitement level for apis and this api world we're living in. I'm super excited about APIs. I think we went to gen zero of the API first revolution. And I think we're actually going to a second one now with the tailwinds of the AI ecosystem kind of causing that to be invigorated. So yeah, super, super psyched to

be working in this space right now. I think it's everyone's at a point now where everyone knows about REST APIs and GraphQL APIs and gRPC APIs. And now I think we're actually getting into the second phase of that, which is how do people create developer experience in addition to the APIs? And how do we build truly best-in-class APIs that turn into the long-lived infrastructure? This is the vision I think that Stripe helped manifest for everyone in the fintech space, which is an API that really sets the bar for developer experience, but also it's something you can truly rely on.

It's true. If you make Stripe a dependency of your company, you can feel confident doing that. And I think that's the part of API developer that really excites me. I agree. That is exciting. So George, teams who leverage Speakeasy are those who have leaned all the way in on documenting a solid open API spec and mostly want to be hands off of effort into documenting your API and then you're trusting and relying on great quality tooling to turn that into code and documentation, which is what we're doing for you. You're not meant to change or edit the code because it will be regenerated the next time you

change your open API. So you ultimately put it in our hands. Once you've committed the changes to your open API, it's off to the races and you get a new release of your SDK. You'll get a pull request to review. You will have the opportunity to look at the contents of the code. But quite often you can let it hum along creating SDKs for you or new releases of your SDK every time you change your API. Very cool. Well, the thing that got me with Speakeasy that really helped me understand it was that, as George said, it is hands off. You can just focus on documenting your API via the open API spec and you still have pull requests.

You still have visibility. And in fact, they will even hop into pull requests with you to triage any sort of anomalies or issues that come from the SDK generation and improve the back end of Speakeasy to make future releases better for you. I think this is so cool for teams who want to just be hands-off of their SDKs and focus on their product, focus on the core documentation around the open API spec, but still have all that awesome visibility. Okay. So the next step is to go to speakeasyapi.dev. You can start off with one free SDK. That's so cool because you can go there right now and try it out completely free. One free SDK.

Let them know the changelog sent you. Let them know JSParty sent you. Once again, speakeasyapi.dev Are you a Silicon Valley to the TV show fan? Funny chance. I've watched a few of the episodes. I'm not like deeply immersed in it, but I know a lot of the references and stuff. Yeah. I'm going to give you a reference.

That's not going to be a plot issue for you if you decide to watch it. And don't be offended by this either. This is a crucial point. I think that we have to ask ourselves if we agree with that thesis is there's a moment in the show when there's a character named jin yang he is uh he's part of the the hacker hostel that earth bachman created in episode one season one that all the hackers that eventually became pied piper created like they were part of

this this place yeah and Jin Yang wanted these guys to be his friends he wanted to he was just like he wanted to be in it so badly and he tried to create his own startup a couple times he was never really about being the software creator and the startup maker but he wanted to be the friend he wanted to be in the crew right he wanted to be in the clique so that was his main thing and later in the show he's standing in front of this uh whiteboard and what he'd be gonna do i won't ruin any plot for you there's more in there and i'm gonna paraphrase it he was standing in front of this board that was that had a bunch of chinese writing on it i don't read chinese so i'm sorry i couldn't read it all It's probably Mandarin, as a matter of fact. And what it was was clones of U.S. companies that he would take and create into China. Jin Yang, are you copying all those companies for the Chinese markets?

Oh, no. And when I say this, I don't mean this offensive, so please don't be offensive. But, you know, I'm, full disclosure, Jared and I are both small angel investors in cow.com. We use cow.com. We use Cal.com. We like Cal.com. Prior to using Cal.com, I'm going to say it five more times, is we were users of, not investors of, of Calendly, the other most prominent. Yes. And so the reason why I bring this analogy up is Jin Yang was famously standing in front of this whiteboard, and his intention was to simply clone well-known companies

and just take them to China, right? Yes. So is part of this, not so much thesis, but part of this, are you a proponent of, let's take an idea of a monday.com, for example, or a calony.com and say, okay, let's find a way to create this as an open source way? 100% unabashedly, yes. And it's a brilliant strategy. By the way, there's a gentleman by

the name of Neil Shen, who recently broke off from Sequoia, who literally did that and made, I think, $50 billion bringing Western SaaS consumer internet companies to China and creating Sequoia China, which recently they had to split off from the mainland company for geopolitical reasons. Yes, but that's not the whole story. So I think that there is actually a lot of truth in that. That's a funny example of the Silicon Valley show. I should watch that episode.

It sounds entertaining. You should watch the whole entire thing just so you have the context of that one episode. So when you talk to Adam, he can tell you things with less words. And you say, yeah, I know exactly what you're talking about. We can catch up and have inner dialogue about it. I think that there's a ton of validity to that example. And I think that there's no shame in that at all.

So like, by the way, I want to kind of go back a little bit further in history and sort of say, SAS, so one other way I describe our thesis, but this has also been super helpful for me. There's been an evolution of the distribution models, let's say, or the innovation models in which you have ideas that manifest into technology in the sort of the software industry or the technology industry. In the beginning, you literally had to, you know, physically sell like, you know, carrying a pen here, but like, you know, maybe my unplugged keyboard is a better example. You had to like physically burn. I don't even think CDs existed then. You know, they didn't. They were sold on floppies. Oracle's first software was literally shipped in boxes

with like very large floppy disks. Five inch ones. Series. And in order to upgrade the software you would have to order and they would have to ship you a new series of floppies from which you would need to kind of like physically install and you would you would like own those physical like pieces of technology that would give you an upgrade and then the pricing model was all built around that too is perpetual licensing where you would like basically buy that version and then you'd have maintenance

that you pay for the version. And then in order to upgrade a new version of the software, you'd have to physically spend a new upfront amount for the new version and then do that over and over again. Most of the, I would say probably 99% with some interpolation, synthesis, mixing and matching of ideas.

Most of the categories in software, including SaaS, which have become a little bit more like fractal domain specific, like cal.com is like one, almost like one feature is like, wow, it's a billion dollar company. That just happens because of economies of scale and humans using more and more technology. But most of these ideas were implemented in the 70s, 80s, 80s, and 90s, even in the mainframe days, like scheduling booking things. I mean, this is like calendar functionality. Like I was recently watching the oral history of Mike Markkula, who was the first CEO of Apple. He was a guy that Sequoia founder Don Valentine introduced to Steve Wozniak and

Steve Jobs to basically help them with the business plan and like run the company. And Mike was also a really brilliant programmer. And he, you know, he wrote Fortran and basic programs that would actually run on the early Apple computers. And the collection of those programs came with a credit, sort of a copyright credit at the bottom, which was Johnny Appleseed. You might remember this from the early Apple computers. It's Johnny Appleseed name. So Johnny Appleseed was Mike Markkula, right? And Mike in the Computer History Museum, he describes this. It's on YouTube. You can watch it. It's a really great multi-hour oral history. Mike actually wrote, personally wrote the programs for the applications that would ship in the early Apple computers. So including the calculator, calendar app,

bookkeeping app, a lot of these basic, you know, very basic primitive word processor. And so I just think back to like the most fundamental basic things that humans do as part of their work or their lives have been re-implemented and re-implemented and re-implemented so many times in the history of technology, going back to literally the 50s and 60s, that when we have new ways of distributing and innovating in the core technology, what happens is you just reinvent and you re-implement what came before with shinier and newer, sexier, more sort of societally relevant and interesting abstractions. And then those things end up taking off. And oftentimes people are given a choice. There's sort of likeally relevant and interesting abstractions. And then those things end up taking off. And oftentimes people are given a choice.

There's sort of like, you know, there's like the free version of the thing. Maybe it's open source and it's like less sophisticated, but you can totally control it. Then there's like the proprietary version of the thing, which is like, you know, much more polished and sexy and packaged. This is so fascinatingly for the first time in sort of skipping to the AI stuff, we've seen this like incredibly shockingly surprising almost acceleration of equivalency where this actually happened this week. I mean, the latest Lama models are state of the art. And by all accounts, the benchmarks are pretty much indistinguishable. And the capital required to produce that is similar, right?

Like Mark Zuckerberg literally did an interview a couple of days ago saying they're spending tens of billions of dollars building Lama and they're giving it away completely. And in fact, they're making, Jan LeCun was just tweeting about this the other day, they're making their licensing even more permissive. You can do distillation, quantization. You can use the outputs from LAMA models to train other models. It's almost like Apache or MIT level permissiveness. The artifact is very different for a neural network that has a massive amount of information compression. Not in the Pied Piper sense, by the way, but in the neural network AI tokenization. At least you got some of it. Massive amounts of data. For sure.

And they're literally being super permissive because Meta doesn't actually have a need to monetize these AI models unlike Anthropic and OpenAI. They can just give it away. But there's actually a choice now in the industry where you can say, I'm going to use a proprietary AI model and all these

trade-offs. Or I can just take Lama and it's a few gigabytes and I can run it on some servers and get the same capability and it's 50 to a hundred percent less expensive. And I can't remember. And I obsess and spend all my time on this for like five plus years now, a lot more really thinking about it. Like I can't remember a time where there was this equivalency that happened

that fast. Cal.com is actually kind of one example. I think Cal.com reached and exceeded the Cal.com is actually kind of one example. I think Cal.com reached and exceeded the Cal.com, Calendly, like a sort of parity feature set maybe a year ago. And they've actually out-innovated and added a lot more things that Calendly hasn't been able to ship because they're sort of like a consumer-oriented, consumer-focused SaaS company primarily. And Cal.com is more like GitLab, where they're selling like on premise enterprise subscriptions, and it's much more customizable and extensible,

and so on. They're almost kind of two different businesses. But to your point, the sort of copycat dynamic is, is pretty is pretty clear. So I don't actually push back on that at all. I think there's a lot of validity to the sort of like, responsiveness to an existing proprietary incumbent, maybe not necessarily inventing the category, but sort of being first to market with that particular technology. And then over a pretty short window of time, you see a massive upswell of developers and interest in, look, we want to have something that we can control, that we know we can trust, and that we can extend and that we can use. And you have people just building it. I can't tell you how many times I see like, there's like some new, shiny, you know, SaaS thing that's proprietary. And then you see, you know, look at Hacker News, I look at Hacker

News every day, I find so much stuff on Hacker News. Basically, my life is basically Hacker News and Twitter. But you see something on hacker news, the open source alternative to this thing. And some of these projects are like really successful. They're taking off massively. They have huge amounts of users. And I think this whole wave of AI we're going through and

LLM is getting better with code generation and stuff. Probably only going to see an acceleration in open source alternatives. Just imagine, even Riverside is a good example. I don't want to pick on Riverside. I think it's a good company and the founders are talented and stuff. But this is a piece of software. If you wanted feature equivalency to this

and you use the existing AI models that generate code and are getting better every day, you can get to a state where you release an open alternative, probably 10 or 20 times faster than you would have been able to do even a year ago or two years ago. And so like, if my thesis, I could be totally wrong about this, only time will tell. My view is that the innate desire that people have to want freedom, to want control themselves, and to know that they can actually trust the thing that they're using, that deep kind of almost primal human desire to not be in a cage and trapped by something. As long as the

technologies that exist make it easier to like create those outcomes, we're going to see more of open alternatives and open platforms. That's just my view. Yeah, I mean, I think so too. I think that the hacker spirit is very much alive inside of the thought of, I like proprietary thing X. I would like it more if it was open source. Therefore, I'm going to go create an open source version of X. And whether you call that a clone or a copycat, those can be kind of diminutives. But a lot of work goes into that. A lot of talent goes into that. A lot of labor. And when you set it free, and it's probably not quite as good, but maybe eventually it gets there, maybe it doesn't, but it provides a different core set of values. I think there's no shame in that game whatsoever. Whether or not

you're 10 to 20 times faster or better with CodeGen, I don't know. I think the verdict is still out on that one. But there's certainly a lot of money being poured into making that a reality. And I certainly would appreciate a world in which I could build things 10 to 20 times faster with CodeGen. I'm just surprised that you can invest money in all of this and make money at the end of the day.

That's just kind of where I go back to. I'm with you on a lot of the stuff. And this goes all the way back. I looked it up, 2016, Nadia Ekbal first came on our show, talked about funding and open source. This was after she had written that post on Medium called How I Stumbled Upon the Internet's Biggest Blind Spot. And this is before her roads and bridges paper

and all this stuff. It's like the very beginning of her short career in open source, she's moved on to other areas of interest. But I remember her saying, wouldn't it be be cool vcs could just invest into this stuff and i remember telling her like that's nuts it's not gonna work like they want returns over everything like that's that's the vc way and i was interested when you said you consider yourself slightly different than a vc i think you probably are i'd love to hear what you how you consider yourself but it has been the hardest part of this, convincing people

there are sizable returns on the other side of these open source companies. I've learned a lot in the last five years of doing this full time. And I would say having enough capital to really properly test things in three and a half years. You can absolutely make huge returns investing systematically in open source companies. You will not make any returns investing in open source, but you have

to invest in companies. And I think this is an extremely important thing to clarify. Capitalism is fundamental to both a free market economy, a free and open and free loving society, and a productive global world market economy and all of that. And I think that, you know, there's a lot of arguments and debates, you know, well, what kind of capitalism, like what type of capitalism, you know, this and that type of capitalism i got caught up on that for a little bit for a while but like there's like stakeholder capitalism and shareholder capitalism and all this kind of stuff look it's just capitalism like build something great charge money for it make more than you spend keep doing that consistently it's not complicated my learning

in making a lot of investments and stuff over the last few years has been truly great founders who are skilled in a multifaceted way at selling, building, recruiting, hiring, setting priorities, leading and driving teams relentlessly are extremely rare people. Pair of Cal.com, by the way, is one of those people. We were very fortunate because that was the largest seed check that we wrote out of our first fund a six million dollar check by the way at the time i did mention this publicly the other day but i'll mention it again because my like fragments of comments on the internet at the time we invested in cal.com it was it was a little bit less than half of the fund because I was still raising the fund.

That's a big bet. Which by most accounts is bat crazy. But today has turned out to be not a bad investment. Still very early. The number of open source founders I've invested in. So the thing I was kind of trying to get you there. The number of founders I've invested in where we sort of like really heavily encouraged them to start a company and or they weren't really on the founder path themselves and didn't really have that kind of like innate, like the way I express my mission in my life is to be a capitalist and start a company. And I just so happen to be a really great open source developer as well.

Times in which we've kind of like over rotated on our thesis and been a little bit too intellectually obsessed with like, we want to fund so many open source companies, we might not do as well. We might actually lose our money, right? And I think the reason behind that is really capable, great founders are extremely rare people. And it is extremely hard to build a company that figures out a business model

and ends up sustainably charging money for something that solves a customer problem. And you have to keep continuing to do that. So I think part of our journey is really just going to be having better judgment and discernment over which founders are worthy of this venture capital rocket fuel thing, which I find really powerful and awesome in extremely small doses. When you do larger doses,

it is catastrophically harmful, toxic, and net bad for the world with extremely few exceptions. Literally, unless you're building some very complex material science, physics-intense type of company. When you're talking about the world of bits, raising tons of venture capital, in my opinion, is a scam.

I've actually said that publicly. And I think that if you were to just siphon the size of venture capital and focus it on the bits companies, not the ones that are doing hard atoms type stuff, but just bits. It should be 95% smaller of an asset class, a cottage industry, a service industry, very much focused on the absolute best possible founders. And you do not need a lot of capital to make a huge, huge, huge, huge impact. That's my, that's my learning. Can you make money with open source companies?

Absolutely. Will there be more of them in all these different categories? Yes. Will there be 10 or 20 false positives in each possible category? Probably. Perhaps because maybe we overhyped the category

because I've been doing a conference and blogging and tweeting about it. And there's more funding going into these companies now. And all the VCs VCs love it now too. And all this, that's overfunding, that's inefficient, that's bad. It's actually bad. In fact, open source companies, if they're again, focused on a pure bits business and not shipping a hardware product or something, they can be the most capital efficient companies you can imagine. Because like, if you have a huge open source community, that is like like this is kind of a bad way of saying it it's kind of distasteful or whatever but it's true like effectively subsidizing massive engineering costs that don't have to show

up on the balance sheet of the company and also subsidizing go-to-market uh marketing lead gen customer acquisition because the moment you flip the switch on a product that solves a customer problem, you have a huge amount of that user base that experiences the pain of that problem saying, look, sign me up. I love your product. And I've been using your open source thing for the last five or six years. And it solves a fundamental problem in our business. And we've been looking for the thing that you are selling for the last five years. We just discovered it. Please sell it to us. Take our money. That is an extremely efficient sales process that rivals any other type of sales process you see with proprietary

technology companies that have to spend a ton of money on advertising and sales, go to market and all this kind of stuff. And there's a lot of other aspects to it too that I didn't even talk about. But it is very hard, and it's very nuanced as well. One thing I think that is still very unsolved, frustratingly and painful, is that I continue to see people who are not philosophically aligned or remotely as interested in the essence of this stuff as I am,

who are very successful VCs, take the exact same playbook that we have. And then when the companies get to a point of 50, 100 million in revenue, a few hundred million in revenue, they really start to heavily encourage the founders to change the license of the core technology. I find that to be unnecessary, duplicitous, harmful, two-faced, and despicable, to say the least. I could probably talk a lot longer. We have a phrase, and you can take this if you like. You may have heard it. Rugpull, not cool. That's right.

Yes. It's also a good way of saying it. That's effectively what OpenAI and Sam Altman did, by the way. Yeah. AKA Scam Altcoin is my handle, OpenAI and Sam Altman did, by the way. Yeah. A.K.A. Scam Altcoin is my handle. Pen name for Sam Altman. So I was going to ask you your opinion on the license changers of the world,

but it sounds like you just laid that one out there. Yeah, I think it's just a bad thing to do because, look, here's a couple data points. Just a couple data points, right? When MongoDB went public, a couple years later they changed their license. When Elastic went public, a couple years later they, they changed their license. When Elastic went public, a couple of years later,

they changed their license. When HashiCorp went public, a couple of years later, they changed their license. Okay, there's a pattern there. These companies aren't doing it when they're at the most juicy, sensitive parts of the growth curve.

They're doing it when they're in the saturated part of the growth curve. Because the board, principally, I do not think this emanates from the founders, because I know a lot of those people. And I know what they care about. And they're actually fantastic founders, but they also happen to be like, really hardcore open source people. The board members come up with a narrative that says, look, we are deserving of having the right of exclusively capturing the value around this particular technology or this particular product.

That goes against the entire premise of open source, which is that anyone can capture the value permissionlessly. And so the board uses this kind of like weird kind of backwards justification of we've invested so much, we've given away so much. This is a huge ecosystem. Now is the right time to do this. And so the pattern is they've done it well after hundreds of millions in revenue after their public businesses, like really healthy, impressive businesses, like very impressive businesses. And they do that after they're very significant. And without exception, massive negative response from their communities. But if you look at their revenue numbers, the other data points that I would look at across those three examples, there are other examples too. The revenue numbers in terms of growth rate, acceleration, all the factors that you look at

when you kind of look at the quality of revenue and so on, completely unchanged. Like the trend lines, if you snapshot the prior six months or nine months of the license change and the post six months or nine months after the license change, and the post six months or nine months after the license change, or even a year or two, completely unchanged, trendline wise. And the justification on the part of the board of those companies was, look, we're going to accelerate revenue, we're going to have better conversion rates, we're going to be able to better monetize, and so on and so forth. And the data disagrees with those conclusions. There's a saying in science or in physics that when you have an opinion that data disagrees with it,

your opinion is it's wrong. Okay. So that's, that's the fact is like people who made those conclusions about the necessity or the justification of changing the licenses are actually technically wrong, but they're also morally wrong. Yeah. That's the way I look at it. And they torch their communities in the doing of it as well. I mean, they're setting a lot of stuff on fire. Yeah. Yeah.

Set a lot of stuff. It's really not. They recover from it because the thing is, like, the reason they recover from the massive negative response, Jared is like, and this is like pretty consistent across these companies. They have communities that are really huge for sure, right? Like millions of users and all this, but they, they, at that point of the saturation curve kind of thing that I was saying, they changed the license. At that point, they have, they have customer bases that are really huge.

They have thousands of customers, paying customers. And when the customers largely hear that about the license change, customers actually really don't care. Because the customers are already paying for the product. They're like, oh, the free thing is like, like slightly less permissive, but it doesn't affect us. Okay, nothing burger. It's like a nothing burger. So like, it doesn't matter to the businesses, but to your point, the communities are like, like they, it was like a breach of trust. I mean, it feels like you just got like stabbed in the heart, you know, like really bad. So yeah, I'm very against that. we we've actually put in our investment documents for our larger investments like three million plus kind of thing we've actually done this in

a couple of smaller investments too but like 20 plus companies at this point where we have meaningful investments we we literally put even if we're doing a safe which we're not really that into safes anymore like for equity documents, we put a clause, and all the founders love this, by the way, this is not something we have to like negotiate. And we don't have any other clauses is like literally one thing that we add in there on top of the standard stuff, that the companies need our permission, as long as we are shareholders, we could get diluted down to one share, they need our permission, in the perpetuity of our having any shares in their company, they need our permission if they ever want to change the license of the core technology. And I think people have been following me for a number of years. I plan on doing this for probably 10, 20 plus more

years of my life. We will absolutely not allow them to change the license. It's that simple. You know, AGPL is a good middle ground. A lot of our companies are AGPL. If you want to change to like a basically non-compete competitive type of license, we'll say no. It makes no sense to us. Yeah. So you wouldn't be investing in Lama? No, I wouldn't. Well, largely because we have... I don't think they need your money there, DJ.

We have other investments. But yeah, the thing with Lama is it's kind of, yeah, it's a brilliant, brilliant move by Jan and team and really his brainchild. But Zuck has been taking a lot of credit. It's going to go back, I think, in history as one of the most brilliant contributions to computing. And, you know, they can sue actually at this point more than a handful of companies for violating the user license. Really? Yeah, because there's quite a few clauses in the Lama license that they can prosecute people on. But they just relaxed the license terms.

I would not be surprised if they just made the whole thing full Apache or full some traditional conventional open source license in the next couple of releases. I would not be surprised. The reason is, and Zach literally just said this on Bloomberg yesterday, I believe Emily Chang interviewed him. He said like, you know, they have no need to monetize these models. They have a very strong advertising business, you know, and they're not selling, they're not licensing software. This is not a core business differentiating product. And they can give it away completely. And as a result of giving it away, they reap the same rewards as they did open sourcing PyTorch and open sourcing Open Compute, which is indirectly saving them, actually pretty

directly, many billions of dollars on building out their compute infrastructure for serving applications that support billions of people, which is what they do. And so it's actually quite a beautiful, like very aligned, you know, company to be embracing and investing so much in open source and open platforms. And you kind of think like, why isn't Google doing the same thing? They also print money with advertising. Why isn't, you know, X doing the same thing? I mean, Elon, maybe he doesn't quite as much print money with advertising, but he's lost a lot of advertisers. But, you know, the point still stands. If your business model is not in diametric opposition to your innovation model, you should be innovating like bananas, like crazy. And your business model,

you know, should be reasonably sound and protected. And you have different aspects that compound the value of an advertising business, which is collecting and generating more user data, which is what they do. And unfortunately, that's the trade. We use these free tools for free. We don't have to pay for them. And we happen to part ways with our very precious personal data. That kind of sucks. Like

I'm actually very anti that deleted my Facebook account many years ago. But like it is a very aligned kind of company in terms of acknowledging, look, we can invent and create crazy powerful technology, give it away, no problem. Because our business model doesn't need us to charge money for that technology, even if it's costing us billions or tens of billions of dollars to produce, because we get rewards and benefits elsewhere that show up elsewhere on the P&L, which is like compute efficiency, improvement, talent acquisition, whatever. So I think Meta is a really great example of, I think, frankly, a pretty incredible steward of this open source

kind of philosophy in the last few years. And I mean, it's been pretty surprising, like sort of rebranding almost from the previous years of like lots of drama and blow ups that Mark Zuckerberg has had to deal with. There's a lot of speculation there too, because even with the pivot to Meta, the name Metaverse, obviously it's short for Metaverse and that famously that's been going not so great pouring so much money into

another tale in Silicon Valley, VR. I was going to try and pull in something but I'm just going to skip it for now. Maybe I'll do it in post. If you guys want to feel worse check this out. Come join us for an epic gathering where we come together as one people, as visionaries, the most transformative technology event in the world, HooliCon. See you all at HooliCon. I hope you're excited. I know VR. Yeah, VR.

Can we talk about Zuck's hair real quick, Adam? Sure, please do. I love his hair. So we saw these recent round of publications he's doing and this tour he's on, and he has very much this surfer dude vibe now. Ab and I were just talking before you hopped on, JJ, that it looks like a character from Fraggle Rock at this point.

Very much like overly sunned stoner dude. And I think that that's very calculated. I think he's a very calculated person. I think he's trying to rebrand himself away from that robotic dude who was in front of Congress.

He could barely drink a glass of water. And it's something completely different. I think that it's all part of this whole... Wakeboarding with a flag and... Yeah, wakeboarding with the American flag. I mean, he's doing some stuff and it's just like, he's trying to change his brand for sure. I think it is calculated because he is an

extremely intentional person and very calculated. But at the same time, I also reserve the, you know, he's kind of coming in to his own comfort zone and just sort of like appreciating new styles and experimenting with different things but i actually totally acknowledge too that that's probably a very calculated thing i think it's a cool look for what it's worth i think he's like a lot more grounded and seems much more his head and shoulders over what he used to how how he used to portray himself, I think.

I mean, he was doing M&A or M&A. Probably that too, but M&A for a bit. M&A, yeah, yeah, yeah. Wasn't he going to like fight Elon or something like that? Anyways, I'm not trying to bring up the drama. There was like some sort of M&A thing. Yeah, that's right. And he was a pretty, you know, tough dude on the mat

that I can see him doing some cool stuff, at least what I saw. No, he's jacked. He's practicing for sure. He doesn't seem so jacked now, though. I wonder who got him into MMA. Do you guys know who got him into MMA? I think it was maybe Lex Friedman or something,

because he did a Lex Friedman interview a few years ago. Right. Maybe Joe Rogan. What's up, friends? I'm here with Todd Kaufman, CEO of Test Double. You may know Test Double from friend of the show, Justin Searles. So, Todd, on the homepage for Test Double, you say, great software is made by great teams. We build both. That's a bold statement.

Yes. We often are brought in to help clients by adding capacity to their teams or maybe solving a technical problem that they were, you know, didn't have the experience to solve. But we feel like we want to set up our clients for to make sure that they're in a great state, that they have clarity and expectations, healthy development practices, lean processes that allow them to really deliver value into production really quickly. So we started a lot of our engagements by just adding capacity or technical know-how. We end a lot of our engagements by really setting up client teams for success. I like that. So when you say to someone, you should hire Test Double for this reason, what is that promise? I'll throw out a couple of different promises.

I would say, one, we will leave your team in a better state than we found them. And that may be improving the code base. It may be improving some of the test suite. More often than not, it's sharing our experience and our perspectives with your team members so that they're accelerating along their own kind of career growth path. Maybe they're learning new tech by virtue of working with us. Maybe they are figuring out ways to build software with a higher level of quality or scale.

Or maybe they're even focusing on the more human side of the equation and figuring out how to better communicate with coworkers or stakeholders or whomever. So that's guarantee number one. The other one I would say is that we're going to deliver without being a weight on your organization. So by that, I mean, we're able to come in really quickly, acclimate, learn your systems, learn your processes, learn the right people and deliver features within our first days there. So our challenge to our team is to always be shipping a pull request in the first week of work. So we acclimate very quickly and we're very driven to get things done. That means we don't require a lot of supervision or management overhead or technical support

the way some companies envision working with a consulting firm. So we really challenge ourselves and guarantee to our clients that we're going to be very easy to work with. Very cool, Todd. I love it. So listeners, this is why Edward Kim, co-founder and head of technology at Gusto says, quote, give Test Double your hardest problems to solve, end quote. You can trust them.

They build great software. They build great teams. And they'll do it for you. You can learn more at testdouble.com. Again, testdouble.com. Well, Intel Innovation 2024 Accelerate the Future is right around the corner. It takes place September 24th and 25th in San Jose, California. This event is all about you, the developer, the community,

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What I was trying to say there, and I'm glad you mentioned the hair, Derek, because that is a funny point. Meme photo to LinkedIn and elsewhere coming soon, potentially. We'll see. Yes. Maybe in good taste We'll see. Yes. Maybe in good taste, maybe not. Maybe. But was just this transition from it being in this position seems strange. And I'm curious why you think it may be happening because they were a hardcore pivot away from

obviously the brand of Facebook, which was the brand for so long to the metaverse, this idea of VR that we'll be doing more business there and more things there in our personal lives to call the company met it's rebranding everything and that was famously going bad losing a lot of money there's a lot of headlines about that and and now thankfully they're able to give it away because their business model is so sound i'm just wondering like why is it just because they want to be generous to the world like what do you think motivated this seemingly generous thing but obviously it is generous to just give away you're talking about llama

specifically right like their their idea to be meta to go down to sort of, I mean, they have an amazing business still called Facebook and advertising, stuff like that, and it's going well, that's their business model, but they've given away this very expensive to create innovation. It seems strange, even though it's against their business. It's not strange at all. No, no, no.

It's not strange at all. Explain why you think it's not strange. I tried to articulate it earlier. It's extremely simple. And Zaka has been saying this publicly. So there's two examples, OpenCompute and PyTorch. OpenCompute is the open standard open source designs for top of rack switch, server, spec, chip design, like all the data center infrastructure stuff

that Meta does, okay? They open sourced that a number of years ago. My partner, Heather Meeker, helped them with the open sourcing. They have reaped billions of dollars in cost savings from open sourcing their designs for their data centers. Counterintuitively, you would think, oh wow, why are they doing this? They're sharing their hyperscale designs with the world.

If you all remember, Google was extremely proprietary and secretive with things like Borg and Omega Omega and like all of their networking, Andromeda stuff like that was like, top secret, you know, crazy, small group of people had all the details of how that stuff worked, maybe like 100 or 200 people at Google really knew all of the core inner workings of that. And again, this goes back to the view, the world is more efficient and better, the more transparent you share cutting edge designs, cutting edge research. For a company specifically, whose business model does not require monetizing a particular innovation that causes their business to be more efficient.

They are actually incentivized to be transparent and share that innovation with the world. They're incentivized. A couple of other examples would be Tesla basically saying, look, all of our patents belong to you. Microsoft also did that, by the way. This is also kind of shocking. People don't quite recall. Microsoft opened and said, we're giving away all of the patents in our entire, I think, 70,000 patents in the portfolio pretty recently. Like that's an even bigger head scratcher, to be honest, because Microsoft's monetization model is licensing their software. And they said, look, we're not going to go after anyone that infringes on our patents. That was a few years ago as well.

The second project that Meta released that created huge derivative results and benefits for them was PyTorch. React also, by the way. React is just this enormous ecosystem at this point. So PyTorch and React, I think we'll just focus on those two. PyTorch allows them to both manage, shape, and influence the trajectory of the way deep learning and neural network development, hyper-optimization, and shipping work. These are artifacts called neural networks because it's the industry standard, completely demolished and destroyed TensorFlow, if you remember TensorFlow.

PyTorch is the standard. It's not even a comparison at this point. And then what React did was allowed them to have a similar type of influence and trajectory over the talent base of people building front-end web experiences, which are largely part of the entire portfolio of products that Meta releases. And then, okay, so again, also hugely derivative, positive talent acquisition efficiency benefits for their business, probably measuring in the billions of dollars. And so how much money do they actually spend on open sourcing and releasing these things? Maybe a couple hundred million dollars for both of those projects, maybe a hundred million

or so for React, I would estimate, and probably a couple of few hundred million for PyTorch at this point. Okay, now your question on Lama. Okay, now we're talking about not just a human thing where you have Sumit and Jan and like, you know, a hundred or 200 people, you know, there's a decent payroll there, but we're talking tens of billions of dollars in hardware that they're buying, building, buying and building. And they're transparent about all these numbers. Like they're saying like what the numbers are is tens of billions of dollars per

year, probably something in the order of 30 to 40 billion this year and next year maybe even more so to your question how the hell how the hell is this justifiable okay does it make sense it's just as justifiable as the two other examples but in a slightly different way which is that not only do they get to shape the standard trajectory of how these llms are built because llama is an llm development framework effectively and it's coming with these different base sizes of models that people then fine tune and quantize and implement and deploy in all kinds of different ways. But what also happens is they are running different versions of LLM, both in the ones they're scaling internally before they release them, which would be like another dot release

for LLM, maybe LLM 3.2 or or Lama 3.3, which would maybe be trillion parameter models. We don't know. I mean, I would guess they would probably wait until 4.0 before they ship a trillion parameter Lama, which is probably not more than nine months away from that, maybe a year at most. They're running their internal applications, which are all getting transformed by these transformers, which I think the transformer architecture is like extremely inefficient,

but it's pretty powerful and amazing. And they're completely reshaping the way their core products that already print money to the tune of $150 billion a year in advertising can deliver even more compelling, contextual, personalized experiences to the users. I guarantee you that is going to make a very material impact on the efficiency, productivity, and growth of their business. And so there is an indirect benefit from saying, here's Lama. Both, it gives us a huge advantage in terms of the speed of innovation that increases the rate of improvement of this thing. Because there's a huge developer ecosystem around Lama. If you look at and compare it to some of the top open source projects, it's probably on the trajectory to be within the top 10 of all open source communities within the next couple of years. It's on that trajectory. What kind of engineering improvement and innovation

like acceleration efficiencies do you get out of that? It measures in the billions of dollars. And then if you're a company with a portfolio of products like Instagram, Facebook, WhatsApp, and other things that are all deeply, deeply getting infused with AI to transform the experience of these applications, and you want the absolute best industry standard model to be running those that you just so happen to create yourself, open sourcing is literally the only way. They can't go and say, here's proprietary Lama that you can run anywhere. It's compact, but it's totally proprietary closed weights. Trust us. Just trust us. You know, and maybe, maybe Zuck still looks like a stoner hippie, but he's like

saying, look, look, bro, trust me. Like, is that going to go down? Well, I really don't think that that would go down well. I don't think anybody trusts him as is. Probably people still don't trust the guy. I still don't fully trust the guy. That's why I asked the question. How does this make sense? I get the rationale that you've proposed here. It makes sense because it's verifiable.

It's verifiable. I mean, the paper, I encourage you guys to read the Lama 3 paper. It just came out. It's very detailed. I get it. I'm not arguing. My question was from a position of disbelief i suppose or or unaware are you a believer now did he make you a believer well here's what makes me a believer to some degree

is i am an instagram user by way of using the application not so much posting and i will say my experience with your lurker you lurk yeah i'm a lurker i will say that my experience with... You're a lurker. You lurk. Yeah, I'm a lurker. I will say that my experience on Instagram with advertising is by far my favorite experience with advertising. It's pretty good. It knows what I want. I'm always happy to even say... I have a folder called sponsored that I save ads in so I can go back and check them out. I think it's so cool. That's pretty impressive. I think it's so cool, really. and check. Wow. Like, I think it's pretty impressive.

I think it's so cool, really. And they're so relevant to me. That's a great example. That's a great example. Improves improves the advertising contextual relevancy. And so I trust Instagram more because I enjoy my experience there. Even if I'm not posting, I'm enjoying friends and family content. And while I'm there, I might be on there for Jared.

I've told you this before. I'm a up andand-coming chef who knows i'm there studying things i'm paying attention to recipes they're advertising things to me now i'm not going buying them marking sponsors but i'm definitely dropping it into my saved folder called sponsored or cool products or things like that like they get me and i dig that and i'm cool with that. Okay. I want to say a couple of things that balance out my, my massive bull case that I just laid out there. I personally think the transformer is extremely inefficient and like a brute force instrument for creating really powerful AI models. And I think this whole scale is all you need narrative and all we need to do is build a half a million or a million or 10 million GPU compute cluster

and we're going to get to AGI. I think all of that is utter horseshit and I think there's very diminishing returns that we're going to reach and I think the architecture is going to be viewed, the transformer thing is going to be viewed in a few years as today we view fortran or cobalt in comparison to rust or to you know um modern languages and modern modern compilers okay and so

with that view which is a very technical view i can elaborate more on that if you want but probably take a lot longer i think that what zuck is doing is actually totally insane okay because he's basically mirroring what the big labs are doing except he's like sitting on 100 billion dollars of cash and going ha ha ha you guys are trying to raise 100 billion from the middle east i have 100 billion right now and also i can do very effective liquidity transactions and leverage on my trillion dollar company by the way i think zuck is probably the most powerful technology founder in the world above Musk because he has a trillion dollar company today that he solely controls with his super shares. Not even Larry and Sergey from Google

actually kind of approximate or come close to that because Google's two, two and a half trillion or something. And it's two guys. And one's kind of like unknown, checked out where he is. And the other guy is sort of like bouncing around at AGI house and trying to help Google figure out how to build competitors to Lama, which is Sergey. So Zuck actually is playing the same game that Sam is playing, except he's like this proprietary stuff. It's going to create totalitarian communist future. Let's build in an open way, which is awesome. But I think the way in which he's going about doing is actually really

flawed. And so we could, we could see in a couple of years, even though I'm still fairly optimistic about what you actually just said, Adam, like, God damn, my advertising experience is so much better. It's like so relevant. It knows it's like, no knows what I want. That thing I was kind of thinking about over lunch or whatever. It's like, there's like an ad for it. And I was kind of thinking about that. My God, I'm going to go buy that thing later or whatever. Like that's the best possible advertising. It's not invasive. It's not creepy. It's like really, really specifically relevant to like what you want. That's AI. AI is making that happen. Like there aren't like, you know, programs that developers are writing. Like these are neural nets that are continuously learning based on all kinds of new inputs coming into the model, giving you a better recommendation for something.

So even if Meta loses 50 to 100 billion on super sloppy, crazy, inefficient transformer-based neural nets that are doing language model token generation, they could still recover those costs by producing a better advertising experience. However, if they don't actually have that much of a quantum differential and the cost that they're going to be putting in the ground, which is probably to the tune of $100 billion, and the improvement in their advertising business, in reflection, they will actually look dumb the moment a transformer architecture replacement comes to light and shows the world that actually look tweaks and optimizations can get you five or 10 or 20 times better performance on the transformer. But there's this new thing that's actually 500 times to a thousand times better at inference and at training time, maybe it's a hundred times better. You cannot compete with that. Everyone will switch and it's going to be like, wow, we actually only need

200 or 300 H100s to produce some unbelievably powerful system. We do not need 50,000 H100s, let alone B200s, which are also still fairly optimized around this transformer thing. And so the AI bubble house of cards moment at that point will basically reveal that whatever, the emperor has no clothes and NVIDIA stock price will correct rapidly. I'm not recommending to short NVIDIA, by the way. Why couldn't they be the ones to also create this other innovation you're talking about?

You know, if they can create- Startups, universities, labs, it'll come from a lot of different places. Unfortunately, I think the inertia at Meta and a lot of different places. Unfortunately, I think the inertia at meta and a lot of the big companies is such that they're not willing to run the kinds of like, I mean, Jan LeCun would say otherwise,

and, you know, talk to Jan a bunch. And I think he, he does actually know about the very specific technical views I have on this kind of stuff. You make a good point. I mean,

theoretically Jan should actually have some of his people building alternatives to this. And in fact, look, like, actually, Jan has been very critical and negative on what he calls autoregressive LLMs and this transformer architecture being super inefficient. But at the same time, like, look, like that's producing really powerful and transformative capabilities for them. And so like, they're going to continue, you know, continue investing. And as far as what we're hearing from zuck like dude is totally comfortable eviscerating tens of billions of dollars in cash yes he is and in order to build better models than anthropic and open ai which by the way are struggling really struggling to raise the capital and support the capital needed to compete with Lama. And so like what people were saying six, nine months ago about like Lama is going to take

forever to catch up. Lama is basically parity and will flip and maybe way accelerate. The open models may be way ahead of all the closed models by the end of the year, potentially, you know, we don't really know like what is GPT-5 going to look like? What is Cloud4 going to look like? You know, Anthropic's been beating OpenAI now for two months on the benchmarks and performance. And we don't really know what is GPT-5 going to look like, what is Cloud 4 going to look like. Anthropic's been beating OpenAI now for two months on the benchmarks and performance. So Anthropic is actually way ahead,

but even Anthropic doesn't have tens of billions in equivalent compute to scale. Meta's literally doing this. They have hundreds of thousands of H100s equivalent from the last report that Sumit put out, who's the PyTorch creator, kind of leading a lot of this stuff. And they're probably going to have half a million or a million more. And they're literally just getting started with scaling all this infrastructure. So I take two sides to it. One is I think it's justified and

it makes a lot of sense in the same way that releasing OpenCompute and React and PyTorch made a lot of sense to deliver massive derivative benefits to their business that were measurable, really huge benefits. ROI, very easy justification. On the side of Lama, though, you have tens of billions of dollars now you're spending. It's not a few hundred million dollars or maybe a billion dollars. It's like tens of billions. And so I still see some returns there. And you could see maybe a multiple of that if you look at the enterprise value of the business. But I don't see the transformer approach they're taking as the most efficient and effective

way of actually continuing to innovate and scale the capabilities of the models. I think we have much better techniques. I mean, you have to really understand, what is the transformer doing? The transformer is taking in tens of trillions to pretty soon hundreds of trillions of what are called tokens. Each token is a couple words and sort of split apart. And so token is like, you know, a few bits of information, basically, some tens of bits of information. And then you have hundreds of trillions of these things that you're compressing and training into a system. The human brain uses 10 to 30 watts of energy to compress what, you know, you could approximate as probably tens of exabytes of data by the time we're wobbling around and able to like string

together the first few coherent words. The amount of energy getting consumed by these transformer-based neural nets is gargantuan. We're talking about tens of megawatts. It's crazy. Human brain is like many, many, many, many orders of magnitude more energy efficient than the state-of-the-art neural nets that are getting produced today. And I do think the human brain resembles something probably roughly approximating a biological neural network of some kind with like, you know, electrical signals between our synapses and all that kind of stuff. Like that's, I think that's like kind of like the right architecture. But to do that in silicon at our current approaches is as if we were doing vacuum tubes in the 20s and 30s. That is our current state of the art, like sophistication in building neural nets.

It is, we are in vacuum tube days yeah we're trying to do like crazy advanced linear algebra and the ways in which the mechanisms we're using to do it are like vacuum tubes that's the sophistication of the current transformers and the reason that's important is obvious to some degree it's energy consumption right like yeah you want to consume less because energy consumption equals dollar bills or whatever currency you spend. Not only that, power is a huge component of data center design and cost structure, for sure.

The other part is the chips. Right. Just like literally buying and assembling and interconnecting with high-speed interconnect. The chips themselves. Holy shit. Extremely expensive to profit margins on the NVIDIA chips is like 80, 90% last I checked gross and net 50, 60% net profit on those chips that NVIDIA is selling.

Love it. Okay. These are software margins. These are literally software margins. We are not in an efficient market. I don't think efficient markets exist, but like competition causes things to come down quite a bit. And so, you know, I do think going back to meta, I think that there's just going to be innovation and things that come to light that will, in retrospect, make their current execution and eviscerating huge amounts of capital to create Lama, which I think is a net good and amazing for the world, even if it ultimately looks a little silly for their business,

it'll look really brilliant in retrospect. But if you just look at it selfishly from the standpoint of the P&L of meta, I think what they're doing is actually pretty wasteful. That's just generally my view. But I still defend it. I still defend it because the general contribution and the phenomena that Lama has created in this tech industry is kind of hard to measure. It's pretty incredible. It'll certainly be exciting if and when it flips the proprietary models here, like you said,

nine months to a year. That will be quite a moment. Leaving Zuck aside, but still talking business models and incentives, you're a fan of OpenCore, right? Yeah, OpenCore, yeah, for sure. I think it means different things to different people. So I have mixed feelings on OpenCore and I think that it can sometimes misalign incentives for the creator, for the founder, for the software maker

because they are constantly battling the question of where does this feature go? Does it go in the Open open core or the proprietary wrapper? And I feel like that's always a struggle and people sometimes make the wrong decision, make the right decision. And I think that can be problematic. I'm sure you've helped people through those decisions or a lot of your investments probably are open core companies, right?

For sure. Yes, they absolutely are. I'll kind of just summarize briefly what probably are open core companies, right? For sure, yes, they absolutely are. I'll kind of just summarize briefly what I think open core is. I think open core, it's not a licensed model. It's not a replacement for open source. It's not like, you know, antagonistic with open source. It is a business model and a business architecture, if you will, for commercial open source companies. Red Hat is open core.

When I say this to Red Hatters or people who are like the free software people, they lose their shit. The reason is they go, no, no, Red Hat does not have any proprietary software. It's all open source. Like you're crazy. Open core means something really toxic and bad. And look at all these blog posts. Reality is every business is open core that pursues this commercial open source approach because your core technology is like permissively licensed and open source. But the crust, the wrapping, the frosting kind of around it is where you have some thing that you're charging for, which you can call intellectual property. Some cases it can actually be open source, but you're charging for it because only you are uniquely able to deliver that to the customer and solve the

customer problem. And so that's my view of open core. Yeah. Open, open core can. So what you said around picking the features and like the trade-offs and the tensions, you know, this is also apparent in every single business ever created since the beginning of capitalism. Right. The difference is that you just don't see the differential. Like what you see as the customer is just this. I'm holding up an iPhone. You just see the final product. You just see the perfectly packaged thing that the company that created the product assembled, compiled and is selling to you. Right. that created the product assembled, compiled, and is selling to you, right? You didn't see

the massive avalanche long list of features and trade-offs that they had to think about on, do we leave this out? Do we put this in? What about the next version? Do we add that? Do we not? Okay. So that's, it's called information asymmetry. It's a concept in computer science called information, actually information theory, Claude Shannon style information theory. We basically have one person can see some of the picture. The other person can see all of the picture. Sure. When you have that dynamic in any type of system, there is inherent tension, frustration, and kind of confusion because like one person knows some of the stuff, the other person knows all the stuff. So that in open core companies or commercial open source companies, we have like the free open source project with very transparently, you can see literally everything.

And then you have the commercial product where you can only see the things that the company decided to implement in the commercial product, which are usually extensions and additions to the open source thing. Sometimes customers get frustrated with this, but oftentimes it's more developers. What I've noticed is like community people are like, look, like I'm not going to be a customer, but I really want this paid feature to it's more developers. What I've noticed is like community people are like, look, like I'm not going to be a customer, but I really want this paid feature to be in the thing. The best practice that we have advised our companies to sort of adopt is expectation setting at a very high, high rigorous level and very clear levels of communication. I think if you have those two things, you really manage to mitigate all of the potential issues that come from this frustration and this kind of like chaos

in the community. And so far, I haven't really seen any major issues. Now, I will say in the past, like 10, 15 years, maybe 20 years close to that now, there have been examples of companies that pursue this open core approach, but they view specifically the way in which they're building the open source project is as a diminutive crappy version. That's really limited and is like specific to this particular type of thing. I've never invested in a company like that. I don't support those companies. I think that is actually really duplicitous and not a good way to build a business. Because what it does is it subjects the core open source technology to a perception that it is lesser than and insignificant and is only meant for a couple of trial scenarios.

Honestly, kind of like indistinguishable from like freemium where you have the minimum thing is like sort of you can do a couple of things, but you can't do everything. And then if you really want the good stuff, you got to pay for the other. It's like a teaser for the product. Yeah, exactly. That's that's not a good dynamic in our portfolio. Dozens of companies. You can look at really all of them, I think, adhere to this.

The open core, the core open source thing is completely unlimited. You can do whatever you want with it. Yes, maybe it might be missing some features, but you can certainly add a few of those features if you want. But it's not like caged in for a specific type of use case, or a particular type of technical domain, you can do literally what you want with it, they tend to be more geared towards individual users, or a single computer or single workstation, they tend to be less geared towards like, here's all the features that you need for an enterprise or an organization or a team or a group of people or a large group of people. Because those features tend to be more complicated, you have more coordination complexity, there's more business logic that you

have to maintain, the code base becomes exponentially more complex. And so when you have a high degree of complexity in the logic of an application, it justifies charging for that logic, because it's hard to build that thing. In the same way that you guys, I'm sure, are happy paying customers of Riverside, there's probably a free version of Riverside for solo indie. You're outing us here twice this call.

Well, I think it's a good company. I've heard really good things about it. We've been happy customers for years now. We like Riverside. I've heard very good things about Riverside. By the way, one thing I forget and I neglect to say a lot when people hear me or whatever on the internet, they think, you know, I'm some weird guy. I'm not an open source, like zealot fanatic. Like I don't need the whole world to be open source. I have an iPhone,

you know, I'm a happy Apple customer. I use a lot of proprietary technology in my life. I just so happen to have a view that when you create systems, processes, and companies that accelerate and expand the universe of open source in a sustainable way, that is going to be a net good for the future and make the world better for my children, our children, and the future of humanity. That's really important. We're not going to be here that long. The world's probably going to stay around much longer than most people think. And we need to think positively about this. You mentioned Nadia. One of the things that I think is very counterintuitive as well is sustaining open source and open source

sustainability and open source funding. All of these arguments are nonsensical, in my opinion. They make no sense. I disagree with all of them. There is no such thing as the open source sustainability dilemma and open source needs more funding and all of this. I disagree with all of those. None of them make sense. Yes, there are a lot of maintainers and people who do not have jobs where they're not funded enough, but I think people fail to understand, and this is also related to enough. But I think people fail to understand, and this is also related to open core like expectation setting. People fail to understand that open source, not open core, any of these companies, which is also kind of true, is an opt-in system. You decide as a human to spend your time doing this thing. And if your technology becomes crazy,

super successful, you have massive amounts of users and people waking you up at 2 a.m. demanding that you do something, you owe them absolutely nothing. You should not respond. You should have no feeling of obligation because you just woke up and decided to create something beautiful for the world. That's great. Now, when we say open source sustainability problem, I think it is better framed as an open source expectation setting problem.

People are not creating boundary conditions for their time and their energy. And by the way, in terms of open core companies setting expectations, open source maintainers should do the exact same thing. I agree. I've created a hugely successful project. Wow. Amazing. Guess what?

Here's what I'm willing to do. Here's what I am doing. And here's what you should expect of me in the future. Anything that deviates from that, I will not respond. That is completely, not only reasonable, very admirable. And those people should be celebrated. There are so few of them, so few of them. And instead, what people do is they mistake and misunderstand, partially because I think of a lot of weird twisted framings that Richard Stallman actually proposed early on, because he had a much more ideological view of this, which I think is not helpful. In a pragmatic sense, when you create an open source technology,

you are opting into creating a permissionless innovation thing of some kind. And you shouldn't feel obligated to the world of your users and your people impacted by your technology that you should work for them and do anything for them. And in that type of world, there would be fewer instances of burnout, frustration, pain, suffering on the part of open source maintainers. And so for us, investing in open source companies is a way of creating a capitalist system and structure around sustaining an open source community while also creating a business model for it, which expands the universe for open source and creates the right incentive system. But what it also does is it says, look, you should be really, really good at setting expectations maintainer because you're going to work with a professional investor who also has other investors invest alongside

after that fund. Many of the best investors in the world, in fact, those people will help you and advise you. And as an open source maintainer, learning how to create a company gives you the skills of learning how to create and set expectations for many complex stakeholders, employees, customers, and investors to name a few that you didn't have before. And it gives you the ability to get really good at setting boundaries on what you are willing to do, what you will do, and what you, you know, are actively doing to the people that support you. And if you translate that, and you kind of like, reverse that into the way you run open source communities and projects, the world will be so much more efficient. I think a lot of forks happen because people are like, look, I disagree with the maintainer, or they're not doing this thing, or they're not doing that thing. Those things wouldn't

have happened if you said, look, you can always fork the project. That's the fundamental of open source. But this is why I'm doing what I'm doing. And this is this is the kind of the expectation you should have. So I think expectation setting is really fundamental and super critical for for people to kind of learn. It's hard. It's a very difficult skill to learn, but it's very, very important. Just marinating on this. We've talked about clarity and expectation a lot. I know I have, Jared. And I don't disagree with that premise because, yeah, if you're clear with what your boundaries are, what your constraints are, and somebody tries to violate those things, then they're not

your friend or they're not for you. Maybe they're trying to be helpful, but you don't owe them anything because you've set your boundary pretty clear. I think you owe them a non-response. That's an action. Inaction is inaction.

Sometimes inaction is the best action, actually. Not doing a thing. It's hard to tell from what you said if you feel like funding in open source is flawed. I couldn't recall which exactly. Like you said, you found me. No, I don't think funding in open source is a problem. Right. As an investor, it doesn't make sense because there's no capitalistic engine there to return the capital, right? That does make sense. But you can do it as generosity or altruistically, for example. Sure. I'm not against philanthropy or donations. I just think that they don't actually massively move the world forward and you know i think that like public good funding is important government funding into universities that's important and obviously like tuition to a certain extent maybe has its use but i actually think i mean you know kind of going on a rant here but like i think we get the gatekeeping for knowledge and education in modern academic

kind of world is very flawed and broken. And those institutions are basically hedge funds that are sitting on mountains of capital that they don't really know what to do with and investing in all kinds of asset classes and stuff. So I tend to think donations and philanthropy into open source in general are fine, but I don't, I don't think that, you know, they actually serve to solve the fundamental problem, which is that you need a sustainable, like, I don't think philanthropic donations are actually sustainable, you know, unless, unless we lived in a world where it was absolutely required that at the end of your

life or towards the latter very end of tail of your life last decade or last 15 years or something, you absolutely had to give away most of your wealth philanthropically. In that case, maybe. But that is not what all of the wealthiest people in the world do. Most of them keep it in their companies to compound for future generations. I would say, you know, some of the time there's large philanthropic programs, but like the reality is those philanthropic dollars wouldn't have been made without the engine of capitalism that came before it. So I still have a hard time really thinking about like, okay, is that the solution? It's not. We need more capitalism. More capitalism is a solution. Actually, in fact, more capitalism is necessary.

What about a scenario where a developer is creating something they find is valuable, and they put a call out to the community, they're making it open source, and maybe this is part of the clarity and expectations point that you made before, so that might be true. But they've said, I can only do this if i'm funded which is open source sustainability that's a sustainability effort right i can only do x if y'all care about what i'm doing and i'm from texas so i say y'all if y'all care enough about what i'm doing to support my effort they go on github sponsors and they spawn to that person yep is that open source sustainability to you no No, I think that that's a person

asking for help and getting some help. Okay. I don't think that that's open source sustainability. I think that's a person basically saying,

look, I don't have the ability and the wherewithal to do this. It sounds like everyone wants it and I have the unique capability to do it. By the way,

if it's that viable to the world and so many companies want it. Well, these aren't companies in this case. It was just people loving with the

individuals. Yeah. In this case, it was like not a company. I think if it's just individuals, then yeah. No, I would not. Yeah. Just to answer your question directly, I would not call that open source sustainability. I would call that someone who has a following of people that believe in them, offering help and willing to chip in and put some money in a hat and help that person. I don't think of that. So, the word sustainability means something specific to me.

That's what I was trying to, because you said it pretty stark in terms of your response to Jared's question. And so, I guess I'm trying to get to the lens of what you mean by sustainability. To concretize my view of what I think sustainability is, which, you know, again, human language is like so horrible and brute force. Everyone has different definitions of different words and stuff. My view of sustainability is that you have a system. It's like a system. And you have continuously more input going into the system relative to the outputs going out of the system. So the outputs will produce more and generate more inputs into the system. Okay. That is sustainability to me. I mean, it's kind of the same as saying, you know, you have a profitable business. Yeah.

More revenue than spending. This is really basic stuff. Many other examples that we can use. These projects are not many businesses, what you're saying. You don't think that these open source projects should transcend from communities to many businesses that aren't really businesses? Not necessarily disagreeing with that either, by the way. I think like, so the trend line, I think, for capitalism

right now is it's becoming more and more and more pervasive fractal and there are better tools and representations of value, one of which is crypto, by the way, that will allow people to participate in capitalism more easily and in a more fractional way in the future.

You can come up with some buzzword for all of that. I don't know what that would be. I do not think philanthropy donations, chipping something into a hat is sustainable. Nope, that is not sustainable because it is not a system that creates more inputs relative to the outputs. It's not. You have someone, so your example, the way I would describe your example is this person is respected by a community. They raised their hand and the community responded and said, look, you asked for this. We're going to, you know, we're going to chip in and there's what you asked for. Great. That is not sustainable though. That's like a one-off activity. How many more times could that individual make such a request? I mean, I guess

it would depend on the value of what they've done before. And, you know, so things are going to get, I think, pretty weird in the future, as these AI systems can produce very valuable technologies. And so how do you actually sustain the notion of value, and then connect a currency to that? I think that we're careening, not gradually, we are careening towards a world of completely repricing and reshaping the way value is represented, both in terms of basic standard goods and services in the economy, like bananas and bread, to digital products, and also the price of advertising,

which is the predominant business model of the internet still today. So I try to remain humble about like, I have no freaking clue, like how these things are going to get solved. But I deeply believe capitalism is a very sustainable thing. And you want to create a continuous stream of revenue and income and have your cost structure and your spend be less than that to me that's called sustainability that there are many other i'm just like a business person sort of so like i i kind of use the business example there's many other examples that you can use like in physics and systems that have inputs and outputs that are the same principle applies to me to me that's how i think about sustainability well the, even in business, when it comes to capitalism, for example, money exchanges hands when problems are solved. That's capitalism. Yep. That's why the bigger the problem that you solve, the more money that can exchange the hands or the value, however you want to term.

You know, currency bartering is how we began. Then it turned into things you can actually exchange. Those things became true currency backed by local governments and nation states etc yep yeah if you're solving a problem for somebody value gets exchanged typically in currency yeah typically typically but i mean it's kind of interesting like the degree to which you can solve problems with five people has dramatically changed relative to what you could have done 10 years or 20 years ago with five people. Well, JJ, you're giving us more time than you said you would. Yeah, I appreciate it, man. I'm really happy to chat, guys. It's been fun. It's been a lot of fun.

It has been fun. I appreciate the viewpoints you've shared. My initial question was just to provide a map to developers to listen to this podcast. Like, is open the way, right? Is open the way, whether it's capitalistically, like you had said, the crust, the frosting, the capitalism frosting around open source. Is it the way? And I think you've shared a lot of points that suggest that it might be. The last thing I'll say is capitalism is philanthropy. Capitalism is philanthropy. Because you are creating something that changes the world, makes the world better. And it just so happens to have a sustainability mechanism built into it. Whereas philanthropy might change the world, make the world better, do all this stuff.

But it relies on capitalism to exist. Which one's better? So philanthropy is a derivative of capitalism, obviously, right? You can't have or you probably couldn't have unless there was inherent wealth or whatever else correct but the fundamental the fundamental truth though is that capitalism done right done well is actually a great form of philanthropy i argue the ultimate and ideal form of philanthropy is actually capitalism so that's a super controversial thing to say for sure but like i'll just leave it at that let's leave there. Thanks for saying that here on the show. And thanks for sharing.

Let's do it again in five years, guys. Yeah, man. Hopefully sooner than that. Hopefully sooner than that. But JJ, always a pleasure. Thank you so much. Good to have you on. Thanks, guys, for your time.

So the question is, do you align with the thesis that JJ outlined? And do you align with his thoughts on OpenCore? And do you align with his thoughts on open core? And do you align with the way JJ thinks about funding open source? Let us know in the comments or in Slack. Head to changelog.com slash community everyone. I mean, yes, everyone, you, your friends, your co-workers, your teammates, your whomevers. Join our Slack. Call it home. Hang your hat. You are welcome. Once again, changelog.com slash community.

So I have a very fun, very special episode of Changelog and Friends this Friday. I'm joined by Adam Jacob. I went solo. We went deep. It was a mixture of Founders Talk meets the Change Log meets Change Log and Friends because, hey, Adam Jacob is a good friend. And that's what we do on Change Log and Friends. We talk to our friends or we make new friends. And I think this episode is really special and you should listen to it. So stay tuned for that on Friday. And I have to

mention it here because I'm in post and tomorrow is when I record it. I'm talking to Dennis E. Taylor. So exciting. If you know that name and you know that name because he's an amazing author, then I'm going to precursor that with a show I haven't recorded yet and say it's going to be amazing. I think it's going to be amazing because I have a good plan and I'm hoping that Dennis is an absolute blast to have on the show. I think he will be. And if you're a Bobaverse fan, I'm sure you'll love this episode. Stay tuned because that's next Wednesday. Okay. Fun show with JJ. Absolute blast. So awesome catching up again. Gotta give a massive thank you to our sponsors.

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We love them. Okay, that's it. The show's done. We'll see you on Friday.