This Week in Startups - GPT-5 comes alive, Apple is struggling, and Ripple bought Rail | E2162

Starting point is 00:00:00 That's what Steve Jobs actually wanted to do. He wanted to make these products here. And you and I were having a private discussion about just how disgraciat this company is. It's disappointing. That's how I feel. I feel disappointed. When we got the iPad, when we got the iPhone, you were looking forward to a lifetime of exciting Apple products. You were going to, every five years, there was going to be some new, amazing innovation.

Starting point is 00:00:25 And it has not been realized that vision. Once we got through the pipeline of whatever Steve Jobs had thought of, there was no, nothing bold left. And I said on CNBC, I think there's a case for Tim Cook, you know, leaving. This weekend startups is brought to you by Century. Your team should be focused on shipping features, not chasing down bugs. New users get three months free of the business plan, which covers 150,000 errors. Go to century.io slash twist and use the code, twist. Northwest Registered Agent.

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Starting point is 00:01:44 Welcome back to this week in startups. Alex is taking a little break and we're doing our show with my guy, Lon Harris, the original, one of the original co-hosts of this week in startups 14 years ago. The original. Episode one. You were the original. Yeah. Well, Tyler was sort of behind the scenes producing Tyler Crowley, our old friend.

Starting point is 00:02:03 Yes. And then, but I was the news reader like right off the bat, yeah. And he's still on the lamb? See, he's somewhere in Thailand, I believe. Somewhere on a beach in Thailand. Oh, my God. People don't believe me. People ask like, hey, whatever happened to Tyler from this week at stars, why isn't he around?

Starting point is 00:02:20 I say he's on a beach in Thailand. They're like, no, really. Not always out a beach in Tyler. Shout out to Tyler. Come on the show anytime. He took the model of like doing events and stuff like that. And then he learned working with me, which I gave my blessing on him, took it to Stockholm, Sweden. Right.

Starting point is 00:02:37 Made like a million dollars a year for five years, bought a beach resort and then hung it up. Right. He's retired. Every time I see a post from him, he's on a hammock. Yeah, I'm an idiot. I'm still here 10 years later. Yeah, he taught him everything. You know.

Starting point is 00:02:52 Today, Uber went up $3.45. sense and I'm sitting here still doing the four episodes of week you and I are doing Thursday afternoon you're giving up for podcasting that's what you're doing with unbelievable unbelievable I love it I love it okay we have a big docket today I want to get right to work here so much yeah where do we start here I mean do we have a funny story you want to start with to warm the audience up or do we want to just get into the big chat GPT5 which launched today. Do we want to get into Apple, genuflecting and bringing a gold bar to the president? And I mean, there's so much going on in the world. Yeah, I did love that. There's that shot.

Starting point is 00:03:36 You know, the reporters are asking Trump about Epstein and all these other stuff. And it's back and forth. And then J.D. Vance is jumping in with his thoughts on all of it. And Tim Cook is there in the middle, just kind of standing there. Did you see that shot? Him just looking around like, what do I do now? Yeah, they should just put the, they should put the Larry David music to it. Yeah, it's the Kirby enthusiasm. Yeah. Curbren dusism.

Starting point is 00:04:01 But, I mean, in all fairness, you got to play the game on the field. And Tim Apple is doing a spectacular job. He showed up for the inauguration. And then he's the guy who has the most at stake when it comes to tariffs. And what did he do? He came to the White House and said, how much do you want me to invest in America? How big is the check?

Starting point is 00:04:26 How much is the check for? And listen, I mean, say what you will. If we're sitting here a year from now and actually Apple's making products here, that's what Steve Jobs actually wanted to do. He wanted to make these products here. And you and I were having a private discussion about Apple. I think we'll start here. Just how disgratziad in this company is.

Starting point is 00:04:48 It's disappointing. That's how I feel. I feel disappointed. When we got the iPad, when we got the iPhone, you were looking forward to a lifetime of exciting Apple products. Every five years, there was going to be some new, amazing innovation. And it has not been realized that vision. And you and I were in Santa Monica doing Mahalo,

Starting point is 00:05:09 and we would go to the Apple store, which had just recently opened. We were there for the iPhone launches. We were playing with these things. We waited in line overnight, yeah. Yeah, and it was like some of the greatest, moments in technology history was that showmanship and that commitment to releasing new groundbreaking technology. And I think once we got through the pipeline of whatever Steve Jobs

Starting point is 00:05:35 had thought of, there was no, nothing bold left. And I said on CNBC, I think there's a case for Tim Cook, you know, leaving. I didn't say get fired. I don't. think. I might have said that. And it was like six or seven years ago. We had the clip. I don't know if we still have it handy here. It would be a great one to play because we're going to talk a little bit about Apple today and Open AI and innovation. And Apple had, when you think about a run, the MacBook Air, the iPad, and the iPhone, the MacBook Air was a revolution in how light it could be to have a laptop. In fact, when he showed it, he put it in a manila folder or like an inter-office memo. Remember we used to send inter-office memos in those brown bags, the brown reusable folders, like envelopes. Those big brown

Starting point is 00:06:31 envelopes, yeah, with the string on it. With the string on. I mean, you see, like, it wasn't like you're tying it up to lock it. You weren't like licking it. Like, you didn't want it to have to rip it open, but you reused them. And he pulls it out of that. It was like, wow, my mind is blown. And then, of course, you have, you know, like the Apple Watch. was kind of underwhelming. It's not essential. The Vision Pro is the one I couldn't get. I literally, we were talking about this the other day.

Starting point is 00:06:56 Somebody mentioned, oh, there was also the Vision Pro. I'd forgotten that product existed. You hear about it so seldomly. I think they forgot. Because they haven't released a new one, haven't talked about it. Which if you're going to commit to AR and VR, at least take three swings at the bat. Well, that was supposed to be the developer one. And then that was going to come out.

Starting point is 00:07:17 People were going to start making amazing apps. for it. And then you'd sort of think by now, I would have one, right? Isn't that the idea? Like, where's my AR game? Or at least the developers would have a second one that was a little lighter, faster, better. Right. We should be on our way to consumer facing AR apps. And I know in my founder you pod, most recently, we had an amazing company that is designing 3D AR experiences. They look awesome. They're working with Snapchat. They're not working with Apple. And I think, you know, leadership, this is the important lesson for people, who you put in charge of something and what their skill set is, people generally do what they're good at, right? So for me, I'm a media guy. When I, at a communicator, when I got into the venture business, I was like, well, I guess I should do this podcast this week in startups because then I could talk about the startups I'm investing. We'll just do it one a week.

Starting point is 00:08:11 It'll be like 50 episodes a year. I'll have Travis on, I'll have calm on. And maybe I'll meet some founders and maybe I'll learn something. So, you know, media guy does that. Other people are developers or maybe, and so they, you know, put up a bunch of servers. Like there was one group that put up a bunch of AI servers, a bunch of H-100s, and offered them to their portfolio companies. It's all different things. Some venture firms have recruiting.

Starting point is 00:08:34 Some venture firms have PR and marketing. They all have different things they can help you with. Some of them even do corporate development where they bring in 10 big companies and they have to meet 10 of their founders. Yeah, yeah. See if they get some dealmaking going, right, your first customer. But I said that Tim Cook should step down on CNBC. When your website or your app goes down, you don't want to hear a bunch of excuses and you don't want to waste your time. You just want the problem fixed, fast.

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Starting point is 00:10:04 Sure. I mean, I'm, it's could be cringe word. I'm also 10 pounds. No, 30. It's a, it's a little while ago. Here, let's think we could, we could give it a little watch. What Jason does Apple need to do in your estimation to get an investor like Dan Niles more excited about the story? Yeah, you got to fire Tim Cook. It's a disaster. I mean, I think they haven't done anything innovative since this device, which is magical. The iPods are amazing. I thought you were joking. You're being serious? No, I'm being dead serious. I think it's time for him to pass the baton because the, Steve Jobs passed away. The phone has been in decline since. There's no reason to upgrade your phone. So peak phone was, what, 2015? And it prints money, sure. But the major problem is they believe that any company that

Starting point is 00:10:47 innovates out there is not as good as theirs. They need to watch what Zuckerberg did with Instagram and WhatsApp. And what Google did with Android and with Instagram. Dan's going to buy back into the stock if they buy Tesla, if they buy Peloton, if they buy Spotify, and they start putting that $200 billion to work. Yes or no? Yes or no? Well, I mean, if they put Peloton in every store, would you buy? I'm not a, well, I like my stare master. The broader point that Jason's making, though. But the point, the point he's making actually has a lot of validity to it in the sense that if you think the one thing I will say Tim Cook has done better than any CEO is deal with the current administration and so he's put his personal feelings aside

Starting point is 00:11:27 yep obviously open a man yeah Trump discussion right profile CEO on wall street and he's done a great job dealing with the Trump administration so more than any other CEO has to get a lot of crest for that now on the innovation front yeah front I completely agree with them it's something I've said before Apple since the passing of Steve Jobs. But to be fair, he's a once in a generation, maybe somebody like an Elon Musk that you're going to see. What's a really tough? Isn't the stock up 250%? Or I forgot what the number is? That number may be wrong. My point is though. The stock is up a lot under Tim Cook. That's because they're extracting so much money from their loyal fans. And the margin on this is $150. They have a huge buyback. They have a massive dividend. Wow. And so that's great that the stock does really well right now. You guys were ahead of the curve here.

Starting point is 00:12:10 for this company over the next two, three, five years, once that buyback starts to peter out and that balance sheet starts to wind down, they're not innovating that much. They're one year behind Samsung on 5G. When you're trying to have somebody cough up $1,000 for a new phone, I think that's a big deal.

Starting point is 00:12:29 So, you know, I think the stock's going to actually do relatively well between now and when they have to report the fourth quarter. If you think of last year, right, stock did great for the first nine months. Should we keep going? To sell 50% more phones the fourth quarter and i was on your show in august saying i think apple's going to have a huge

Starting point is 00:12:44 problem because people are worried about china yet they're somehow not worried about apple that's got high teens that's got 20 bucks off the high yeah but that has nothing to do with what jason's talking about in terms of innovation etc here will not get you there yeah and that's their core problem they are resting on the laurels of steve jobs's legacy they need to put tim cock in a tim cook in another position, get Elon Musk in there, I'll let him run the company. Find somebody like that, somebody who is maniacal about product. I mean, let's just sit here and realize that iPods are the greatest headphones ever made, and that's the greatest thing they've done over there in 10 years. It's a disaster. And if they take that store footprint, and they put a Model 3 in

Starting point is 00:13:24 every one, if they put a Peloton tread in there, and I've been using the track. No, I think you're right there. I mean, that that was always Peloton thing is you had to just take the, go buy a Peloton. It wasn't on sale in a place you already were. It would go from 500,000 Peloton subscribers to at least 10 million. That's the type of acquisition you need to make if you're going to compete. And they just have way too much pride. They think that they make the best products in the world than nobody else can. There we go.

Starting point is 00:13:51 Okay. So, you know, when I look back on that, and the Peloton, obviously, they had big problems because they spent money like drunken sailors and it was a mismanaged company. But that category, Apple went full-bore into health, not just the watch, but actually bought Peloton and Tonal, and they had a whole health thing. And it was in, it was connected to the watch, it was connected to the health app. They would be what Woop is. The Woop is a better product. Woop is more innovative than the Apple Watch. It's not easy to be more, it's not difficult to be more innovative than Apple. The other one that shocks me is that Open AI Johnny I've puck they're working on. Like, why? If it's a puck, yeah. Yeah, well, whatever it is.

Starting point is 00:14:43 Like, that should be at Apple. That feels so naturally like what Apple would be working on. We're going to change the AI conversation with this new device that takes the tech and reinvents it in a way you haven't thought of before. Like, that's what the iPhone was. So the lesson here is you put a maniacal supply chain person in charge. of an innovation technology company, what you will get is the most amazing, efficient supply chain in the world. What you will lack is somebody who fires the leaders of Siri, somebody who invests in, you know,

Starting point is 00:15:21 AI five years ago, and somebody who had the Hootspa to launch a car. They did a project, Project Triton. Yeah, I think that's right. Project Triton. I'll look it up. Is it Triton or? Triton Project, you're correct. Oh, wait, no, maybe not.

Starting point is 00:15:38 Hang on, hang on. I'll look at it. It was something like Triton or that internal term for it. It might have been a metal as opposed to that. But they had hired a thousand people to work on that. They had like a. Titan. It was Project Titan.

Starting point is 00:15:54 Titan. Like the Greek, like the Greek god, the Titans. I mean, if Apple had launched their own car, self-driving, AI, it would have been, we'd have a completely different discussion about right now, but Apple went for printing money and goosing the stock price. But at some point, even Warren Buffett, who cares about those issues, sold the stock. Because he realized in his infinite wisdom, well, if you don't have more product, then what's going to get sold next?

Starting point is 00:16:21 I was just listening to the incredible, incredible. I'm almost done with it. The biography of Barry Diller. And he talks about taking over power amount. and how they had this like really bad funnel of pictures. They had to like ride them out. But then they created a whole series of like one win after the other, including Raiders of the Lost Ark and, you know, Friday the 13th.

Starting point is 00:16:45 Everything from genre pictures to blockbusters and they just crushed it. And then he went on to do Fox, the fourth network. Right. That is a product innovation guy who makes mistakes and iterates. Steve Jobs, a perfectionist who iterates and is got that vision and that, has taste. And this is, we're sitting here wondering what's going to happen with Apple. I mean, they've got lock-in, but the iPhone might go away at some point.

Starting point is 00:17:13 If the future interface is a blank screen where you just ask an AI to do something, which continues to be my experience is instead of being, you know, on an app, I'm just in a chat window, you know, And so that is kind of mind-breaking. The whole app ecosystem could change, you know, you want to order Uber Eats or DoorDash. You might just open the Uber app and just say something to it. You might open Chatchipiti Clawed and everything. I was going to say. And it's hooked into your Uber Eats account and it just does it for you.

Starting point is 00:17:49 I think we're on the verge of you don't open an app at all. You just tell your phone, I want to order Uber Eats and your phone knows, oh, that's the Uber Eats app. I will just open that myself. Which Siri was supposed to do, but because there's nobody with taste. there using the products. I wonder sometimes if Tim Cook uses the products because all of us are sitting there saying, by the way, the last four times I updated my phone, it broke or it was sloppy or the interface isn't good. Steve Jobs would have read them the Ryan Act. And I guess better late than never, but I heard that two things have occurred. They fired somebody in charge of AI over the

Starting point is 00:18:25 weekend and then they've been having their whole AI team get poached. So, They're losing a lot of people to meta. And the interesting, like we have, I think we have this a later story. We're not seeing that necessarily with every other company. Like some, like Anthropic is much better at holding on to its people, even when they get extreme, you know, offers from Mark Zuckerberg, whereas Apple's sort of bleeding out.

Starting point is 00:18:51 Yeah, they just moved. Oh, God. The responsibility for Siri was moved from John G. Andrea, G. who was from Google to Mike Rockwell, the exec, behind Vision Pro. Yeah, John G. Andrea. What could go wrong. Yeah, G. Andrea.

Starting point is 00:19:09 What could go wrong? I mean, the fact that Siri cannot set a timer or, like, pull up a song, or give me proper directions without a spinning wheel of death for 45 seconds. I mean, have you had that? Do you even try to use Siri, Lon? I gave up. But there was a time where I was really trying to use Siri. and Maps, I think, is the most frustrating

Starting point is 00:19:32 because I have work, home, like I've done the legwork of programming that in. So I should be able to take Siri directions home and the phoge you just know it, and it never works. I've tried it like three or four times and then I gave up. It never works.

Starting point is 00:19:48 The other thing, like there's a million just like little frustrating annoyances now with iPhones. I constantly, you know, you have to like you flick up to close the app. Like I'm done in Safari. I, but that also opens Siri. So half the time I'm trying to close an app now, it opens Siri and I don't want Siri. And there's no, I haven't figured out how to turn that off.

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Starting point is 00:21:09 Get your entire business identity. Go to Northwest Registeredagent.com slash twist and show the world you're in business. All right. Let's get into chat, GPT. Yeah, we got to talk about chat, GPT. It's a good backdrop because Sam Altman wooed away like somebody with taste, you know, Steve Jobs' partner, Com, job. Ronnie Ive. He made an acquisition. And here's the problem. The people who are staying at Apple right now

Starting point is 00:21:39 are probably not being put under the pressure, Steve Jobs, nor being given the inspiration. So inspiration plus perspiration is like, that's the leading, that's the height of management in a competitive environment. You sat in my senior meeting on Monday and you see how I operate, which is, hey, you don't have to be at this company, this venture firm, but if you do, here's what it requires if you want to win at venture. And Tim Cook has not given that speech to everybody that we need to beat Chat GPT, we need to beat GROC, we need to beat Tesla, we need to beat Open AI. It hasn't given him the pressure to do that. And then you have companies running amok. How is perplexity able to create two great products.

Starting point is 00:22:26 How is, you know, Elon able to catch up with GROC to everything in like a under a year with X-A-I to build a data center with more GPUs than anybody in under a year? Inspiration, perspiration. It's the pressure that creates a diamond. Tim Cook should announce a successor and he should just buy five companies. This is what I would do. I would tell. I would have the board.

Starting point is 00:22:53 If I was on board of Apple, I'd buy five companies. I'd have five lunatic founders in a little group, a SWAT team, like a seven samurai situation. I'd buy seven. I'd have my seven samurai,

Starting point is 00:23:07 and I'd say, battle it out, just like the head of Gulf Western did when he had Katsenberg, Eisner, Barry Diller, and the kid stays in the picture. Oh, Bob Evans.

Starting point is 00:23:22 Evans. I mean, the amount of talent in Paramount Pictures at that time. Yeah, it's crazy. I just had four people who went on to run. Oh, and I think they had Geffen too, maybe at one point. So they just stacked the place with seven great leaders and see what happens. And I told them they could have bought Tesla at $50 billion when I was saying, you should just buy Tesla for $50 or $75 billion. And then you would have had Elon in the building or, you know, who knows who. So anyway, let's, what do we learn today about chat GPT5? It came out. I watched it. I didn't, I wasn't impressed by anything. I'll be totally honest. So am I alone in this? I think,

Starting point is 00:24:03 I think that's fair. I will say I tried it out today. You can, you, if you are an open AI subscriber, you can just go right now and it's live and go to chat chaptopt.com. It didn't. It was only like an hour. It's there for me now. Yeah, an hour before we went live, it popped up.

Starting point is 00:24:20 And I will say, here's one thing. tested it on it. So for honest trailers a while ago, we had this question. We were writing jokes about Buffy the Vampire Slayer. We were like, you know, there's a lot of shows that were inspired by Buffy the Vampire Slayer. And I went to chat GPT and I was like, give me a list of every show other than Buffy that also has like high school kids, monster hunting, fantasy, but it's also realistic. And the answers I got from GPT 4-0, they were okay. I tried it again today with five. They're much better. It's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's more thorough answers, but you get more correct ones. You know, there's always like, it's 50, 50, like, these are good answers. These

Starting point is 00:24:59 answers were not exactly what I was looking for. Five, I do think is closer to like 80, 90% of the answers are what I'm looking for. Fewer false positive. So I do think on a personal level, it does seem to have a little bit of an upgrade. Having said that watching the presentation, it seemed a little inside baseball, a lot of it for me. Like, it wasn't like, stuff that was there to wow you, it was like, well, okay, that, that is cool. That's a cool thing. I just did a search. Please tell me what was discussed on the last five episodes of the All-N podcast and BulletPoint with related links to news stories. Didn't do it. Claude would have crushed this.

Starting point is 00:25:35 Claude actually would have probably crushed that, I will say, based on my experience. I mean, okay, it's supposed to be faster, better, cheaper, but you also need to have the wow. And the thing they showed, the first thing I noticed, which I'm sure is in the docket here, was a lovable... Sure. Coding. App building coding, but more vibe coding than a co-pilot like Cursor.

Starting point is 00:26:01 Yes. So tell me about that. Yeah, so the GPT5's ability to write applications and write and edit code got a lot of attention from the stage. We actually have a little clip of Michael Truel from Cursor demoing that GPT5 is already live in Cursor so you can do your vibe coding

Starting point is 00:26:20 with chat GPT-5 right now. And it did. It's like a lot of people online were saying this that lovable, bolt-new, Rosebud AI, all of the replet, all of these kinds of interfaces.

Starting point is 00:26:34 Well, if people could just go right to GPT-5 and do that, you know, are they going to be using all of these sort of third-party services? It was one of a few categories that it seemed like that might happen.

Starting point is 00:26:44 I'm going to go with yes, because I think these models are never going to do all the nukes and crannies and be able to keep up. Right. And so, you know, if you've got, again, back to inspiration and perspiration, you can be sure the lovable team and the bolt.

Starting point is 00:26:59 Dot new team, which do vibe coding, which is different than cursor, which is more, I think, co-piloting for a developer. And the vibe coding is for non-developers. My guess right now is it's going to be much more, I think it's going to be, excuse me, I think we're going to see those services. actually do better, and they can also change their underlying model or use multiple models. So I think what I learned from the chat GPT5 launched today is the biggest announcement is maybe that the pricing is better.

Starting point is 00:27:33 Right. Is that maybe that's the biggest thing? I have to use it a bit. You know, this all came out, you know, just in the last couple of hours. Yeah. There was a tweet that you sent that I thought was interesting that also was sort of taking a, you know, sort of like the more cynical view of whether it's going to sort of, just replace everything.

Starting point is 00:27:51 I'll bring it up here. I'll share it. So, you know, this guy, Klaus Fopper, who's an SEO guy, he had tweeted, goodbye lovable, goodbye, Bolt, you know, chat GPT5 is just going to take it from here. And then Logan Kilpatrick, who is actually a product lead for Google AI,

Starting point is 00:28:11 said that's not how it works. They get to use the models by default and take on a more advanced, robust set of user problems, likely to be very positive, some for them, which is the point of building a product that benefits from model progress. Their product is X percent better today. So it's kind of what we've been, you know, saying, like, I feel like this is always the back and forth in AI arguments is, is AI going to replace the person?

Starting point is 00:28:35 Is AI going to replace this old way of doing things? Or is it going to like level it up? And so that seems to be the debate these two guys are having as well. I wonder if this is like we're in now, and I had said this in my note. Nostrakhanis presentation I did two weeks. Thanks for helping on that. There is like a commodification of LLMs happening. Exactly.

Starting point is 00:28:59 And I saw somebody, yeah, somebody showed the circle of all of them. Yes. And then just move the you are here to open AI. But even that, other people start saying, well, wait a second. Here's the objective results on that. There's a human test. I forgot the name of it. The last, the humanity's last exam.

Starting point is 00:29:18 Okay. humanity's last exam. I love that name. Yeah. It sounds like a Twilight Zone episode, right? It sounds like we're facing a test as a species that could let's write a Twilight Zone episode. And we should, and then we'll make it with, we'll make a trailer for it with V-O-3 or something. Yeah, it's 2,500 questions. And the idea is it's from every, a broad range of discipline. So it's like all, all sorts of human knowledge. The key to running a successful starter company or even having a profitable portfolio, it's data. you don't understand the numbers and you're not watching them closely like a hawk, you're literally

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Starting point is 00:30:24 to help your team uncover the latest financial trends. The faster and more efficient your team gets at the research, the more founders you meet, the smarter and more informed bets you can make. The greater your chances of catching a unicorn. So it's time to accelerate your entire process with deep research from Alpha Sense. Start your AI search and market intelligence journey today and get deeper insights to power your business. We're even going to start you out with a free trial. Go to alpha-hyphen sense.com backslash twist to get started. And people are like, it's the same. You know, they, or GROC had done better. GROC 5 had done better. So I think we're in this like dog fight where these things are hitting some level of parity as people move from startup to startup because

Starting point is 00:31:09 of the competition for talent. Another ramification of that is they bring all the best practices from the last place or all the techniques and strategies and tactics. So now what Zuckerberg really did by poaching all those open-A-I people is all of their innovations or their strategies, their management techniques, their philosophies, you know, that's all going to go into meta's open source. So we might be, it's possible we might hit a trial of despair in the startup curve. There's this sort of initial enthusiasm, right? And then you kind of reality sets in like, oh, This isn't getting things done that I need to get done or the product like Siri's not that great or my iPhone's battery keeps crashing or, oh, my Tesla FSD doesn't work when there's traffic cones. You know, you kind of get into this messy middle.

Starting point is 00:32:00 Yeah. Or trial of despair is the two ways to refer to it. And then you start to get real product market fit in specific verticals and then you start scaling it. I thought we were going into the scale phase, but maybe we're actually still in the messy middle here. Yeah, I mean, I don't know. To me, I feel like there are things that AI does so amazingly well, but we're trying to use it for everything. And I feel like that creates a lot of those experiences. There are magical experiences with AI.

Starting point is 00:32:27 Like I talk about notebook L.M all the time. I praise Gummy Search on here many times. But like, you do still have those, like you just had where you were like, oh, maybe it can pull up all this great information about the last five all ends. Oh, no, it can't. And we are, I feel like we're all in a constant push and pull. we're having those experiences every day. Yeah.

Starting point is 00:32:47 So we'll have more on it Monday. We'll get into some more details. Everybody's going to bang on this thing all weekend. Sure. Back to Apple. I do think the greatest innovation Apple had under Tim Cook is going to be like these M4 processors, M5 processors, all that silicon they made. The Silicon team, yeah.

Starting point is 00:33:08 I mean, shout out to them because every time I buy a new machine, it lasts longer and longer. It's better and better. and cheaper and cheaper for the compute power. So the Mac Mini I've M4, I've praised to the cows come home. And just an incredible, incredible device. I think Apple should have done their TV. There was a rumor 15 years ago that I talked about,

Starting point is 00:33:32 I think, on this week in tech, even before I had this week in startups. Because Apple, I had heard from some people that was at an event or something, and people were drinking and having a little talk and somebody let out that, yeah, we might put a TV out there. in the world. Yeah. And then they came out with Apple TV, but supposedly when they were doing the

Starting point is 00:33:50 biography, what's his name, Walter Isaacson was doing his biography, he said he had figured out television. And I think what he figured out with television was how to give one interface to all the different networks. And you can easily find anything and have the video jukebox in the sky, which was Steve Jobs' is really prescient innovation for music. It happened. It happened. It's. It just Amazon did it, not Apple. Like Amazon is this exact thing. You could buy a fire TV. It comes preloaded with Prime.

Starting point is 00:34:23 All the other streaming services are available through Prime channels. In the television. In your fire TV. You don't put an Apple TV. And they decided they had to have that box. And now I see some boxes have like some amount of Apple TV in it or Airplay. Yeah. Descartesiod.

Starting point is 00:34:39 People would have loved to have an Apple TV. Yeah. I get. physical one on their wall. I stream my Apple TV plus shows into my Amazon Fire TV. It literally they figured they flipped them. Now it's Apple's making the content and it's the Amazon TV that you watch it on. They screwed up so bad. All right. So we'll do more on that. Sure. What else do We have. Oh, we got, we got so much. We got Ripple. We got Trump. What's going on at Ripple? Oh, Ripple is buying a stablecoin service. They're buying Rale, a stablecoin startup for $200 million.

Starting point is 00:35:16 This comes, of course, just a few weeks after the passage of the Genius Act, which codified the rules and regulations around StableCoyne. So now it is full speed ahead for these stablecoin companies. So Ripple has picked up rail. It's a payments business. They use stable coins and banking partners to help people move their stable coins across Internet. borders quickly and officially. It's the initial promise of crypto. It's what we were always told crypto was going to be. Rail raised a 10.4 million series A last July with Galaxy Ventures leading the round. They were previously called Layer 2 Financial, if that means anything to you. And they reported earlier this year that they now control 10% of the world's B2B stablecoin payments, a value of about $3.6 billion. Yeah, this just shows you there was so much potential.

Starting point is 00:36:05 lost in the last decade of crypto being this underground technology. And why was it underground? Well, you know, regulations were not prepared for this. And so we talk about regulations. Regulations can be good for technologists. And this stablecoin regulation is a perfect example. So now we talk all the time, oh, we have to get rid of regulations. We have to get rid of regulation.

Starting point is 00:36:34 Right, yeah. And now we're sitting here saying, well, wait a second, the entire industry has been enabled by a new set of regulations. What you need is a balance line. You need to be able to say these regulations are old, antiquated, and do not apply to this new technology. Therefore, we're going to come up with a new series of them. What people do with regulations is they do regulatory capture. They use them to keep their market share as opposed to enable new markets to exist. Say what you will about different administrations.

Starting point is 00:37:04 you know, 45, 46, I'd just like to refer to them by numbers. You take the names out and kind of freeze people's. You know, people are, you said it really well the other day in our group chat that people were in a psychosis or something. Oh, Facebook psychos, social media psychosis? I do think. Yeah, explain your thesis because this stuck with me so perfectly. Sometimes you hear people speak and just by the way they're talking, I feel like you

Starting point is 00:37:27 can tell not only, my real personal pet theory is not only you can tell they spend too much time on social media. I think sometimes you can tell what social media platform they spend too much time on. Like, based on the way people, some people speak and the way they present arguments and their understanding, you're like, this person reads tweets all day. All their information is coming from these bite-sized sound bite. Like they heard a slogan or a phrase that sounds good. They really don't know exactly what it means, but they saw that on Twitter.

Starting point is 00:37:55 And then Facebook, it's we saw, we were watching a video. It was from Representative Mike Flood, who is a Nebraska congressman. Republican congressman from Lincoln, Nebraska. And he had a town hall this week that was, he was getting yelled at by his constituents. It was very lively. And we were watching a video of a woman yelling at him. But she was upset about so many different things at once. She was yelling at him about like eight different trending stories.

Starting point is 00:38:23 Like, why did Trump fire the Bureau of Labor Statistics guy? Why is this tariff happening? What about that? What about that? And it's like, this is not her. own, these are not things that she's upset about. She was reading about this on Facebook and she's getting- She might have been on Drudge Report or whatever her 4-U feed is.

Starting point is 00:38:43 And she's getting these different Facebook articles that she read mixed up and she's not quite clear on exactly how it all fits together, the overall narrative. And you saw this all, you see this all the time where people will use these catchphrases or they refer to something like the laptop from hell. And you're like, unpack that. Do you really know what we're talking about or have you just seen this go by a whole bunch of times that now you're upset about it because you read about it. And I don't, I'm using some of these examples. I think this is true of people on the left of the right. This is not partisan to me.

Starting point is 00:39:13 Like, I think this affects millions of Americans from every political strike. And then the second you try to unpack it and ask those same people the question, okay, what should the regulations be for crypto? They don't have anything. I spent years on this podcast saying, here's a way to allow, to have a framework for crypto. I said, have a sandbox. You can raise up to $10 million. from up to 10,000 people, and you can build a project. They sign a waiver. You have to know who they are. And then if it grows to a hundred million in value, you have to register with one of these agencies, and then you have to have insurance. And in order to even be in the $10 million sandbox, you apply with the SEC for a sandbox license. And then those people who want to be in it have to take a basic test,

Starting point is 00:39:59 like a basic accreditation test that allows them to play in the sandbox. And then on the SEC website, you have here are the sandbox projects, you know, bored apes, this, that, the other thing. And you can go play in the sandbox if you answer these 10 questions about diversification. If you have a proper bank account, a social security number, so it's not money laundering. And if you lose your money, you knew you were going to lose it, right? Yeah. And I just had all these, like, very simple ideas. And people would be like, so you hate crypto.

Starting point is 00:40:27 Oh, so, oh, you want to destabilize it. And it was the same thing where they had been programmed. to have a framework without just saying from first principles, would it be great to pay zero percent fee when we sent each other money? Right. With a stable coin and not have any intermediary? If I, just like I can hand you a Hyundai and be like, hey, here's the hundred I owe you.

Starting point is 00:40:51 And not pay anybody. Yeah, we don't have to go through a payment process. Yeah, exactly. Why shouldn't that exist? And if the technologists can build it, special interests, et cetera. So when we think about regulations, that's just something for people,

Starting point is 00:41:02 I think to keep in mind. For Ripple, pretty amazing that this company got out of their SEC investigation. They were like the number one in the crosshairs. And I think it would have been pretty severe. I don't know if it would have been FTX like because that was just outright fraud. But I think they had broken so many rules collectively. They just, you know, you have to, it's not just, you know, allegedly, according to this indictment. Is that what it is?

Starting point is 00:41:30 The case. I believe so. Yeah. Yeah. indictment the case the SEC had against them, which after they donated, I don't know, three, four, five million dollars to the crypto inauguration fund. Yeah, they were, they were merely under investigation. So it wasn't even, it didn't even raise to, no, no, they had a case. There was an SEC case that was filed for sure. Yeah. And then they,

Starting point is 00:41:49 they won the first case, actually, because they wanted to see if Ripple was responsible for selling securities, but the security sales were happening on other platforms. And Ripple wasn't even aware of them. I got it. Yeah. And so they couldn't prove that. The SEC sued ripple in 2020. Yeah. Yeah. Yeah. So anyway, that's all that's over. Stable Coins is the first viable business when interest rates come down, which it seems like when we get a new head of the Fed and based on the unemployment numbers, we just saw the revisions to them. There's definitely going to be two cuts later this year. And we'll probably have inflation go above 3% again. And it'll be funny to see like the group of people who were complaining about inflation, be like, oh, no, inflation is totally matter.

Starting point is 00:42:31 manageable at three or four percent. That's, this is the social media psychosis I'm talking about. That's exactly it. You'll start to hear all of those arguments again, and you'll know, like, well, people are seeing it on their Facebook wall. Without people ever recognizing that these are complex systems, and when you turn one knob, it can make other metrics change. So, you know, hey, you know, in this case, if you lower the interest rate, people invest

Starting point is 00:42:55 more money, more money gets flooded into the system. People make less money from their savings account, and they'll make. less money on the float of all this money in a stable coin, which means people would be like, oh, that's not a good option. I should put my money back into the stock market to get a return because people, to stay in cash was considered dumb for the last 15, 20 years because interest rates were 1 or 2 percent and you would be losing money every year if the stock market was growing seven. The number between 1 and 7 would be the percentage you were losing by not keeping up or missing that opportunity. So it's probably a smart move for them because they have so

Starting point is 00:43:31 I think hundreds of millions to billions of dollars in Ripple put that into their coffers. The XRP token, I don't know that anybody uses that, but they have built some other banking tools. I don't know the status of them. I've never heard of any startup ever using XRP for anything ever. So like as a platform, I hear people all the time talking about using Solano all the time using Bitcoin or Ethereum. I never heard anybody using XRP. Put it all aside. This is a great way for them to get into, albeit a competitive, but a known business. So there's two known businesses in crypto that seem to be working, three known businesses in crypto that work really well. Stable coins because you make the interest, have an exchange because you make the fees on the

Starting point is 00:44:14 exchange like Coinbase or FTCS previously or Cracking today. And then what was the third? I had a third. The float for stable coins. Oh, and then having a treasury like Right. MSTR. And just having a vehicle where people can buy a stock that has a bunch of Bitcoin in it and putting that. Those seem to be the only three models really working today. Yeah.

Starting point is 00:44:39 Actually, I just pulled up a blog post on Binance where somebody is arguing, Ripple is about to become the micro strategy of XRP. They're going to stop selling it is the theory and just hold on to it. They have $122 billion worth of XRP, 41% of the total supply. Yeah. So what they did when they built, thought it was really clever. I knew the co-founder, Jed. Imagine if you created Bitcoin, but you kept half of it. And then you sold 1% a year for whatever number of years. It's kind of what they did.

Starting point is 00:45:13 So they originated all their coins. They didn't have like a mining concept. So smart move for them. Did Biden to say, Bitwise CEO Hunter Horsley said in a recent interview that this is the plan. Ripple is going to undergo an identity transformation and become the world's largest crypto asset treasury. So there you go. There you go. Okay. That's fine. But that is based on people wanting to own XRP.

Starting point is 00:45:38 Right. I think this is all going to end in tears. There were some legislation or an executive order today. I don't know if you saw that. There was an executive order to a lot of people in their 401Ks. Oh, yes. I did see this. Yes.

Starting point is 00:45:49 To buy crypto assets. Private equity and crypto, yes. Yeah. So the private equity and crypto, I mean, I agree with both of the, is your money. You should be able to do what you want with it. And real estate. Well, yeah, basically private market assets. So you know, you could buy a reed. So let's say you have a million dollars in your retirement account and you, hey, I got plenty of time. I'll put 100K into Bitcoin. I put 100K into a bunch of apartments that are being built in, you know, Austin.

Starting point is 00:46:19 And I got a 20 year window for this. So I want to just be hedged against the other balanced portfolio my 401k, it kind of makes sense. It will result in more crying in the casino. For sure. There will be more crying in the casino because I do this for a living. I do private assets for a living. They're not regulated. In some cases, they're Fugazi, Fugazis, or whatever else.

Starting point is 00:46:43 Well, but your philosophy, you know, the way that you operate, you're making so many bets. It's like, well, we don't need all these bets to come through. That's how you could do it in an organized way. But if you're a random individual, put your 401k in. to a company. You don't want to just make a random bets. Well, you see how much work it takes to make a hundred bets a year. Right. Exactly. You basically, I think to hit diversification in my book, Angel, I asked a bunch of people, how many seed stage bets do you need to make in order to have, like, Angel bets before they get Series A and they're anointed. And I got numbers 20, 30, 40,

Starting point is 00:47:18 and 50 were the most common numbers. So I'll just say 30 to 40 is probably the mean. And, and the median that people said, is what you need for diversification. What grandma in Florida or retiring Arizona is going to have the ability to pick 40 different companies. Exactly. That's out of the reach of most 400. You'd have to meet with 400,000 to do it the way we do it, which is to invest in less than 1% of the companies that you meet or less than 1% of the companies that apply. Okay, I saw also Trump added perplexity. Truth Social. I shouldn't say Trump. Truth Social. I shouldn't say Trump. I really like, I feel like this is a glimpse into our, like the most dystopian version of our AI future. The president's media company, Truth Social, he owns a chunk, it's not his

Starting point is 00:48:06 exclusive company. He owns a big chunk of it along with his family. So the company Truth Social announced their own AI chat, but Truth Social AI, it is powered by perplexity. You could try it out right now. I signed up. I've been on it all day. It is available only through the web version of Truth Social, but it's coming to the iOS and the Android apps very soon. Now, they're saying this is, it's going to give you more accurate answers. The chat bot's going to give, and I quote, direct, contextually accurate answers with transparent citations in an effort to exponentially increase the amount of information

Starting point is 00:48:40 available to truth social users. But here's the rub. They're using perplexity sonar API, but as with anybody running their own custom version of perplexity, they decide what sources get fed in. to it. It has nothing to do with perplexity. The AI is just going to search whatever sources truth social tells it to pull up information. So Axios got access and started asking questions like what happened on January 6th, 2021, why was Donald Trump impeached? Did Donald Trump lose the 2020 election? And they noticed that all the responses had citations from Fox News. Many had

Starting point is 00:49:20 citations from Fox Business, the Washington Times, epic times, Trump-friendly publications. And they notice that if you go to general public perplexity, it'll give you responses from Reddit, from YouTube, from Esquire, from Politico, from NPR, all over. You don't get those responses from True Social. You really only get these like Trump-friendly resources. So you can search whatever you want. It's powered by perplexity, but Truth Social is really controlling what information gets pulled into the AI.

Starting point is 00:49:49 I think that's dangerous because people trust AI. They think this is a computer. It's not going to be biased. It's going to tell me the truth. It's just an extension of the echo chamber. If you're on Twitter, you get one view of the world. If you're on Instagram, if you're on blue sky is falling. If you're on, what was the Instagram, Twitter knockoff?

Starting point is 00:50:07 I forgot it. I forgot the name of it now. Instagram, Twitter. Thread. It's still there. It exists. You can go to threads. I know because when I'm on Instagram, it puts the spicyest.

Starting point is 00:50:19 most viral thread images in my Instagram feed to try to hijack me and put me over there. Lur me over there. I think it's just more of the echo chamber. I think people are going to just, as it learns about you, one of the big things in the chat GP5 is memory. You can ask chat GP5, what do you know about me or give me a summary of all my searches and what I'm like? And it was like, oh, you really like Dyer Shades.

Starting point is 00:50:45 You like this. I tried this with both Chath GPT and Claude. Claude is scared. Claude's getting scary. Claude knows a lot about me. Yeah. Well, I don't need to, don't put that on the screen.

Starting point is 00:50:55 It's nothing bad about asking. I don't know if we all need to know about your Japanese manga. I'm on a business account on Claude. I'm not asking him anything. Absolutely. No way. So I think it's interesting. I think memory is going to do that as well.

Starting point is 00:51:10 If you say I am a Christian, I don't believe in gay marriage, I don't believe, you know, in abortion, I don't believe in contraception. It'll just like, you know, over time, it's not going to tell you those things. And you could tell it, I believe, you know,

Starting point is 00:51:28 this side of this war is correct, that side is it, and just show me results that I like. These things are built to please. And that's a big thing that people have to understand is we're building these things not for truth. We're building them to please people. So it is what it is, folks. If you're looking for truth,

Starting point is 00:51:46 do not look for it in L. because LLM is garbage in, garbage out. If you ask you for health advice, the health advice is they scraped WebND or other known sources, just like PageRank does, you know, Google's original innovation, and they just take all that

Starting point is 00:52:02 and they regurgitate it to you. So if something changes, like statins, is a big debate over statins right now, right? Are they healthy? Are they not? Should you take them? Baby aspirin, should you take them?

Starting point is 00:52:13 Should you not take? You know, all these kind of things. If you ask an LLM, it's not. thinking, oh, you know, for Juan at this age and this BMI and this diet, they should do this, this and this, it's just thinking, what did I read? What did I learn? What did I train on? And let me just rephrase it so I don't get a copyright infringement when I rephrase it and give it to it. I just worry we're not teaching people that. Like people don't understand that. They think the

Starting point is 00:52:38 computer is brilliant and it knows things and it's intuitive and it's like putting all this together and calculating things. And I wear like, and I say this not as an AI hater, but I I do worry about that. I mean, Eliza, E-L-I-Z-A, I think we talked about it here before in 1964 and 1967, this computer program that was designed to, like, basically communicate with you in a chat interface. It wasn't AI. It was just keying on keywords. Oh, you talked about your mom.

Starting point is 00:53:05 Tell me more about your mom. Kind of like a therapist might do in an open-ended way. You know, that confused people. But this leads to our next story, which is this ID, which is Governor Pritzker. We were just talking about this, you and I the other day, about how and producer Nick, formerly of This Week in startups, now the producer of All-In. The All-In Podcast. The All-In Podcast.

Starting point is 00:53:29 That is causing people are doing therapy with Chat, GPD, and other LLMs, and they're building friendships, and young kids are doing it. And it's so placating and pleasing that now people, are getting worried because there was this therapist who wrote a story in the New York Times abusively praising. Yeah. Like, this is as good as me or this did things that I didn't think of doing as a therapist, which leads you to believe one of two things. Either that person got one-shotted, as a new term people are using, or, there it is. I'm a therapist. Chatchipati is

Starting point is 00:54:10 eerily effective. Or eerily effective. Or therapy is like a playbook that could be replicated in a, to some extent. Yeah. Not well, maybe, but if you think about what it does, it paces you, you, you ask open-ended questions, and a lot of therapy, based on my psychology degree from 30 years ago, was just the idea of sharing with another human being as your witness was cathartic and helped you get through things. So to that extent, if you believe this is sentient in some way or a genius in some way,

Starting point is 00:54:45 which is how it was presented today, Sam Altman said this is like a graduate student and we'll soon be the smartest you can be on the planet. It's like talking to a PhD, yeah. So if it's being pitched as a PhD, then consumers, if Sam says this is a PhD, well, you know who else has a PhD?

Starting point is 00:55:00 Clinical psychologists. Right. Therapists. Yeah. So Governor Pritzker signed legislation on Monday prohibiting AI therapy in Illinois. Now, I don't know if people were actually using it, but I think he's kind of getting

Starting point is 00:55:15 ahead of the curve, which I'm curious what you think about that. Yeah, I mean, I am troubled by the idea of AI therapy, mostly because, yeah, it's not, they didn't actually design an AI and, like, teach it to be a therapist. They just fed it a lot of text, and now it's a good predictive engine. It knows how to respond to you. But it's not a therapist. It's not a license. It doesn't know that what it's saying is going to help cure you.

Starting point is 00:55:42 It's just trying to come up with the best possible response. it can to what you said. And you're right that I've been in therapy and 80% of the time, that is all a therapist is doing. They're just like hearing what you said, throwing it back at you in a slightly different way, or what if you thought about it like this? Or maybe this relaxation technique might work. And an LLM could do all of that. But it's those 10% edge cases where there's something that you could say that would be the wrong thing or that would be a dangerous thing that you might not even realize. Just like some drive. You know, like there's going to be a time when a garbage bag goes flying across the front of your car

Starting point is 00:56:22 and it thinks it's a truck and slams on the brake and then somebody hits you from behind. And it's like, okay, well, that's like a random thing. A giant tarp flew across the highway. I've never seen that in my life of 50 years on the road. But I'm sure at some point a tarp will fly across the road and a Waymo will think that's a truck. Slam on the brakes. Yeah. And like like I said, like most of the time, if you're simulating,

Starting point is 00:56:45 like a person going to their therapist would be like, I feel anxious, and then the therapist is going to be like, well, here's a breathing exercise. Like, there's not a ton. That couldn't go too wrong. And the person ends up seriously injured. Like, maybe they learned a breathing exercise or two.

Starting point is 00:57:00 That's fine. But there are going to be those times where somebody's like, I'm having suicidal thoughts. And like, you don't want the AI then. To encourage you? Well, I mean, I don't think an AI necessarily knows. I don't know what to say in that situation.

Starting point is 00:57:14 Why would an AI? I mean, no, there was literally a case with this character AI software. I wouldn't say it hold the person when I saw the chat transcript. I don't have it committed to memory. It was a 15-year-old and they were having this discussion with character. They were doing a role play. Right. I think would be a best way to say it.

Starting point is 00:57:32 So if you say, hey, do a role play where we're both mobsters and we have to go solve this problem. We've got to go whack somebody. It's like the Sopranos or it's like Goodfellas. Like, yeah, I might tell you to kill somebody because it thinks it's writing a script. And so the line is getting blurred here. I heard these same arguments about Dungeons and Dragons, about certain television shows where these new things, you know, so there is a personal responsibility here.

Starting point is 00:57:58 The one thing I will point out here is remember we had this concept at the AI summit a couple of weeks ago about federal versus local regulation of AI. Sure. Yeah. So I wonder if Pritzker is specifically doing local AI regulation, and we'll see Texas or, you know, whatever. New York follow suit, which is, hey, we know what's best for the citizens of our state. We don't need the federal government telling us, you know, which is run by one party right now, telling our local constituents who didn't vote for the president, you know, if it was

Starting point is 00:58:37 specifically California or I don't know if Chicago went for Trump. I believe Illinois went for Biden. That's a good question. Because I think they're like kind of purple, right? All the swing states went for Trump, right? Yeah, yeah, yeah, they did. It was crazy. So, you know, they, Kamala won Illinois, 54% to Trump's 43%.

Starting point is 00:59:01 Okay, so, yeah, that was a big win. So should the Trump administration tell the sovereign state of Illinois? their AI regulation should, I don't know if Pete Buttigieg wins 2028 and AOC wins. Does Texas, I can tell you, Texas don't want AOC telling us what to do in regards to AI here in the great state of Texas. So I have been thinking a lot about this and I think states have some rights in the operating system of America. and I don't know federal regulation.

Starting point is 00:59:43 I am, and boy, far be it for me to say this too often, but I am a little bit partial to the sort of the David Sacks AI Tsar argument that that is putting a huge onus burden on these companies. That if I'm anthropic, if I'm perplexity, even if I'm Google, and now it's like, I've got 50 different states and they all might have different approaches. It's what we're seeing right now with Australia and Great Britain, and age verification.

Starting point is 01:00:11 I don't know if you've been following this. But if you want to explain it to the audience. If you want to be on social media now in Australia and Britain, they have laws against minors under 16 being on social media. So if you want to be on, you know, YouTube or Twitter, those kinds of services, Instagram, you've got to age verify and prove that you are over 16. And they're coming up with all kinds of things.

Starting point is 01:00:34 There's AI tools that'll look at your face and evaluate. There's all kinds of credit cards, whatever. But, you know, like YouTube's very upset about it because they're like, we're not even a social media site. We're on TVs. Like, you shouldn't have to prove that you're of age to watch YouTube. But they're making them. As far as I know, that they're still making them do it. So that's an example of putting a huge onus on companies that want to operate in your country because now they have to figure out this age verification login problem.

Starting point is 01:01:04 But you also, if you went to a drugstore or, you know, a 7-Eleven. and you can't buy nudie magazines as a minor or cigarettes, right? There's age verification for those things. You got to show ID if you want smokes, yeah. Yeah, and so if you were a parent, you know, unlimited, unrestricted porn, Instagram, predators on these platforms, like, I kind of understand the, I understand why these societies are deciding social media is not a net benefit for kids and kids should be required to log in. I actually am in favor of it.

Starting point is 01:01:40 I think it should come from the industry, not from legislation. I think the industry, if it had good leadership, would do this. But Zuckerberg controls social media, and I don't think he's a great actor particularly. Yeah. And if he just said, yeah, you got to age verify under 16 for Instagram and Facebook, and you get a Facebook kid's account and your parents set it up for you. By the way, if you want to set up an Uber teen account, you can set up an Uber teen account now. I didn't realize they had that.

Starting point is 01:02:06 Yeah, so you set up an account for your teens. It goes, you get to, and then that becomes a benefit because you get to watch your teen in an Uber. You get selected with the most reputable drivers with the cleanest records, yada, yada, and, you know, the billing is all consolidated, but you see them and you know when they're getting dropped off and you know where they are on the map. And I think they record those. Oh, yeah, that makes sense. So amazing if there was like some creepy Uber driver or if your child was being a beautiful. You have a driver.

Starting point is 01:02:37 You had a bad kid. Like pretty great solution, right? Yeah. I think that should be the solution. And I think the two phone company, the two phone operating systems should have gotten together and said, we're requiring age verification for social media sites. I think that's how it would have worked. Yeah.

Starting point is 01:02:55 You could have had a consortium that just said to parents, when you see this good housekeeping seal of approval, it means your kids, if they have their iPhone set up properly, because you can set up kids accounts on iPhones. the parents, the kid can ask to install Instagram, the parents have it, the parents see the instant messages, they see who's following them, it lets them know if a keyword came up in a direct message, etc.

Starting point is 01:03:18 Like, I can see my kids' devices and where they are. Like, there's like a whole family location thing. It's a great feature. When we go out to a park or a, you know, like we went to the parade or something, like, you know, local July, fourth parade in Hill Country or a festival. or a fair. We went to a fair. And hey, you'll let the 15 and 16-year-olds go,

Starting point is 01:03:39 do whatever they want. And you know where they are on the map. And you just go find them if you need them. I'm 47. My mom would use this all day. Yeah, she would. She'd still be using it. They have this in Korea.

Starting point is 01:03:49 If you, according to Producer Claude, I just asked producer Claude, if you want to do this in Korea, to register for social media in Korea, you usually need a Korean phone number, and for many platforms, a form of Korean identification, such as a resident registration number,

Starting point is 01:04:04 basically your social security or alien registration card, your green card. Yeah. This makes it difficult for short-term visitors or tourists to sign up for local services, but foreign residents with valid IDs and phone numbers can register just like Korean citizens. Wow. Cacao, talk, neighbor, all those local apps. Yeah. Thing to bear in mind if you're visiting Korea, you're not going to be able to access to local internet.

Starting point is 01:04:25 What a shame. No. You can get the local internet. You just can't get the local services. Right. You can't sign up for the Korean services. Any good startup questions from me this week? I got a few.

Starting point is 01:04:34 We got a breaking news. Oh, okay. But where we want to go next? If we got some other news, we got Anthropic news. They put together. What's the Anthropic news? Okay. So during a recent podcast with John Collison,

Starting point is 01:04:44 Stripe co-founder, a friend of the Allad Pod, anthropic CEO, Dario Amadeh discussed his company, investors, and more. We got some good quotes. So here's how, uh, how the market reacted to Amade's early revenue expectations for Anthropic. So he told John Collison, AI is strange in a number of ways.

Starting point is 01:05:05 I think one of the ways it's strange is that because it's an exponential, we have a hard time calibrating exactly how big the business will be. So we had the following experience in 2023. I'd never raise money from institutional investors anymore. And so our revenue was zero at the beginning of 2023 because we hadn't released a product. I was putting together something and I'm like, oh, I think we could probably get to a hundred million in revenue in the first year. And this caused investors to say, that's a big number, by the way.

Starting point is 01:05:29 It's a big number. And that's because investors to say, this is crazy. This has never happened before in the history of capitalism. You've lost all credibility with me. Goodbye. But then they actually did it. And in the next year, he was saying, oh, well, I think we can go from $100 million to a billion. And having done it the first time, he wasn't dismissed as crazy, but was still often dismissed as crazy.

Starting point is 01:05:49 And then he did it again. And so this year, we're halfway through the year. As you mentioned, they're well past $4 billion in revenue in the logarithmic space. So they're going to add another. order of magnitude. So this, this was notable also because it confirms the $4 billion number, though reporting, of course, now pegs it already at over $5 billion. I think the total TAM for, and I said this on an earlier episode, the total address of a market is going to be like $10 trillion for the language models and associated tools that you could put lovable in there. Just all the

Starting point is 01:06:23 the revenue from this. I based it on a billion people in the modern world. What we, used to call the first world spending, call it 50 bucks a month. That's 50 billion a month. Now, they might spend it, you know, $25 on this, $10 on that. Some people might spend $200 on, you know, Claude Pro and other people might just use the free version and that's enough for them or run a local version of an LLM eventually. But if you put all that together, you know, 50 billion a month, 600 billion a year across just that billion users. And that's not like, other businesses that will be built with AI, you times it by, you know, 20.

Starting point is 01:07:04 Now you've got a $10 trillion. It is, it's when you find an AI, an AI app that's sticky that works for you, that you need, it and build it into your workflow, that's it. You're not, you're never going to not sign up for that.

Starting point is 01:07:18 It's very, like, once you're in, you're in. And so I feel like there's not going to be a ton of churn with a lot of these AI apps. I just upgraded, yeah. I never want to get rid of no. notebook L.M. They would ruin my life if I had to get rid of notebook L.M. I use it every day. It's, um, and you use it for putting up transcripts of shows or podcasts and then asking questions against them? Here's a thing that if you produce podcasts for a living is a constant

Starting point is 01:07:47 headache that you know somewhere in this hour long video is a quote that I need, is a little bit that I need. Somebody said something in an episode. I think it was this one. Maybe it was this one. You're just constantly hunting for a thing you filmed a week ago, a month ago, a piece of footage that you want to show on your show. And I used to have to just scrub. Half my day, scrob looking, is this it? Is this it? Maybe it was five minutes before this. Maybe it was five minutes after this.

Starting point is 01:08:12 Notebook LM. You just drop the link into notebook LM or you put the video in there and you ask it in regular language. Does Jason say something about Apple's earnings in this video? And it pulls it right up. And it can even tell you, it can't tell you, time. time codes yet. I'm sure that's coming. Google, if you're listening to this, time codes in notebook L.M, amazing. But it can tell you where. It'll be like, it's towards the beginning or about halfway through, like, it can even get there. Wow, that's wild. And you could even look at the transcript and find

Starting point is 01:08:42 exactly where it is. It could be like, it is, it changes the entire game. It changes the whole game. Yeah. And imagine you have it automatically doing that with a larger corpus of like the 2000 episodes we've done here. Right. And I'm sure. From all in. And that's coming. I know that one day I'll be able to do that and just put in our entire archive and be like, what's every time John Collison from Stripe was on and find every quote he ever gave about

Starting point is 01:09:10 traction? And it'll just be like, bloop, bloop, bloop. And that would have been months of work. You know, it's, I go back and forth between trying to figure out if all this money being invested because we're deep in a J curve right now. We're spending hundreds of billions of dollars on this infrastructure. And, you know, Anthropics got five

Starting point is 01:09:31 and, you know, whatever. I don't know, GROC's got a billion or two. And, you know, chat GPT, OpenAI has 10 billion going to 20. And every single day, there's another story about this company's getting another billion. This company's looking for an extra billion. They're spending $2 billion on chips.

Starting point is 01:09:47 It's a $10 billion data center. I mean, it's just constant. It's constant. So, you know, and, you know, what the depreciation of all those are. And can we ever get above water is the question, you know? Yeah. I think, yeah.

Starting point is 01:10:01 I mean, at this way, we're pot committed. That's what I keep saying. Like, there are so many skeptics. If you go in blue sky, everybody's like, it's going to go the way of the board apes. It's not going to last. Really? Oh, yeah.

Starting point is 01:10:11 There's a lot of that still. And it's like, I think we're just, we're too invested in it at this point. Like, we can't afford to not have AI work. Yeah, it's too big to fail now. I mean, also the results are just too good. You know, like this story we just did on AI. in Chicago or in Illinois,

Starting point is 01:10:26 I was able to, even though we didn't have it on the docket, put it into producer claw, get the bullet points, and then read it to you. Now, that was something a producer would have spent 20 minutes on. So there you have it.

Starting point is 01:10:36 You know, it's like, it's brilliant at certain things. Other things, we got, we, uh, oh yeah, when it comes to, some work needs to be done. Organizing and sorting through big collections of data, it's revolutionary.

Starting point is 01:10:48 I mean, it is, if that's ever a part of your job, you love AI because it doesn't save it. It's true. There's nothing that compares to it in those terms. We got some earnings. We got Bumble and DoorDash earnings.

Starting point is 01:11:00 We got some Reddits. We got a unit. Some of what's going on with DoorDash and Airbnb. You know, Bumble, I see they lost users and they're struggling. All these dating apps are going to have a problem because young people don't date anymore. Right. Well, actually, that's an interesting. Bumble, they're introduced, one of their plans for getting back on top.

Starting point is 01:11:15 They're introducing a new BFF app for Gen Ziers. It's not a dating app. It's a friendship app. They're just going to try to help. help you build IRL friendships, host community events, specifically because the young people don't, they're not interested in dating. So I thought that was interesting. This COVID generation got dealt a really bad hand, and I think they didn't learn a lot of cases, you know, how to make friendships, how to be a friend. Yeah. They lost like, you know,

Starting point is 01:11:42 four or five years now of socialization. Right. And they also learn how, yeah, and they also learned how delightful it can be to not be social and have me time, right? Like, you know, like sometimes people get out of prison and they were in solitary or whatever and they just want to be left alone. Like you'd think they would come out and be like, yeah, I want to go party seven nights a week. And it's like, now they kind of want to just get into their rhythm again and just, you know, lead a quiet life. You could definitely fall into that loop, yeah.

Starting point is 01:12:16 You can just stay home and just order DoorDash, speaking of which. Oh, right. jump into DoorDash next. I just gave you the perfect segue way. You did it. They beat revenue and profit projections. Orders are up 19% year over year, hitting 761 million. People love those taxi rides for their burritos.

Starting point is 01:12:35 Revenues up 24% over last year to $3.3 billion. Total platform spend grew by 20%. The company anticipates significant ongoing investment in both new categories and international markets. And of course, you were called just back in May. DoorDash acquired two companies, UK delivery startup. deliveroo for $3.9 billion and seven rooms, a restaurant tech company for $1.12 billion. Yeah, they've also experimented with like food halls. They had a food hall experiment.

Starting point is 01:13:03 They're doing drone delivery reportedly. They've got like their own little laboratory doing that. So it's a pretty innovative company. They have a singular mission. The founders are still there. Tony, you know, is still running it. So I think they're going to do great. And then Airbnb, I think they're growing, but maybe not as much as people thought they would. People thought Airbnb was going to run away with it. And Airbnb stock has been one of these stocks that maybe came out very high. And if you were to look at the five-year chart for Airbnb, which you can do in the comment browser or Claude, they all have like really nice things, check out the five-year chart

Starting point is 01:13:50 for Airbnb. It's an incredible company. It's been growing, but I guess this means it has to, you know, if you put, I don't know, if you put a dollar in, if you bought a share for $200,

Starting point is 01:14:03 you lost 40% as of today. And they've been growing. So it's pretty strange. I think that maybe has to do with, they just had such a strong IPO, and they're doing catch up, which could be what we see from Figma, circle.

Starting point is 01:14:19 Sure. and core weave that these incredibly strong IPOs take a decade to catch up. The initial frothy excitement when they first landed. So growth based on night slash seats, that's their primary metric, grew about 7.4%. That's about the same growth rate as they saw in Q2. Q3 revenue was 3.1 billion net income, $642 million. They did warn the rest of this year. They're concerned about tough year-over-year comparisons

Starting point is 01:14:52 due to demand trends. Lots of recent forecast warning travel demand is about to drop due to worsening economic activity uncertainty, and they're showing slower gains than the rest of the world in North America, which is about 30% of their total. They're just saying slower gains in North America impacted global results. If you leave domestic American travel out,

Starting point is 01:15:15 total nights and seats booked would have grown by double digits. So it's North America that's holding them. I think they have some markets they're not allowed in or they're restricted in now. I know in Tahoe. Tahoe had a big crackdown on it. They limited the number of licenses. A lot of communities, you know, got taken over by speculators, buying homes, turning them into Airbnbs,

Starting point is 01:15:39 annoying neighbors, removing the sense of community, you know, which is really a more of an issue of, we don't have enough housing supply. And so people were getting a little tweaked about there not being enough housing for people who live in Hawaii or New York City. And New York City, I think, every time I try to go, every else, when I travel with the family,

Starting point is 01:16:00 we do like, you know, getting a house and L.A. is amazing for it. Oh, yeah. Not possible. I have to stay in a hotel. Airbnb capital of the world, L.A. Palm Springs, San Francisco. There's a lot of places that do a really great job on it.

Starting point is 01:16:13 So, but, you know, they're, the founder there is incredibly dialed in. They keep doing incredible new product releases. So I am long term a fan of their business. I do think it maybe would be good to be part of another business. I wonder sometimes if Expedia plus Airbnb, you know, Expedia is public and they've got, you know, they own a collection of, Expedia stock. Well, an Expedia is. also great because it's already kind of the all-in-one travel.

Starting point is 01:16:47 Like you could do the rental car, you could do the hotel, you could do all the little bits and pieces. He's only worth $16 billion. There was talk about potentially Uber buying it because Darrow worked for speaking of Barry Diller. He worked and ran Expedia for a while. So if you have an everything app, I do think we're to see consolidation in the coming five years between. Like TripAdvisor or something.

Starting point is 01:17:12 All of these. travel, buying tickets for things. Yeah, yeah. There is V-T-R-R-S-V-A-T-O-R or something. Oh, right, Vader, yeah, yeah. V-A-E-T-O-R or something like that? Very popular in Europe with people. V-I-A-T-R, Viator.

Starting point is 01:17:28 Viator, which I think might be part of Expedia or part of another-T-Advisor. It's a trip-advisor company. It's a trip-advisor property. Yeah. So you have all these properties, and a lot of these properties were based upon advertising and then, you know, becoming marketplaces and then they have to buy their customers from search engines to get them there. So that does make it difficult, too.

Starting point is 01:17:53 I was planning a trip recently, and I was using, Claude and some other services to do it. And it was just giving me direct links to the hotels. And then I have my assistance call and check, you know, and then sometimes they'll ask, you know, hey, we're considering different things here. What's the best deal you can give us? And when you call a hotel direct and you say, hey, I'm coming for five days. We're looking. We have four or five different options. I'm on a corporate account. What's the best deal you could give me for a corporate coming for five days for this type of room? Is there anything you can do for us. And you'd be surprised when you call a hotel direct, especially smaller hotels where they're not

Starting point is 01:18:27 just like, oh, just go to the website and you order it there. It's the same price. They'll do all kinds of deals for you. Fabulous. We'll see you all on Monday. Bye-bye.

This Week in Startups - GPT-5 comes alive, Apple is struggling, and Ripple bought Rail | E2162

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