This Week in Startups - Netflix buys WB + why Jason should run Disney | E2219

Episode Date: December 6, 2025

This Week In Startups is made possible by:Sentry - http://sentry.io/twistLinkedIn Ads - http://linkedin.com/thisweekinstartupsPipedrive - pipedrive.com/twistToday’s show:Netflix wants to gobble up Warner Bros. Do they just want to own Batman and Harry Potter, or is this secretly about destroying movie theaters?Sure, this is usually a startup show, but news THIS BIG warrants attention! So Lon stops by to tell Jason and Alex about the big Netflix acquisition news, why so many theatrical movie fans are terrified for the future, and why this might face particular regulatory scrutiny both at home and abroad.PLUS… are Googlers gaming Polymarket? This is one scenario in which prediction markets are NOT exactly like stocks.THEN we’re looking at some of our favorite startups from the Fall ‘25 Y Combinator cohort (and asking Producer Claude for his picks)… Considering why Perplexity keeps getting sued and how they can stop it… and doing a victory lap for Jason’s early investment in breakout AI training project Micro1.Timestamps:(02:05) Netflix buying Warner Bros! Jason, Lon and Alex react.(05:04) Jaytrade Update: J kind of missed the boat on this one(05:36) What does this mean for theatrical cinema?(08:42) Sentry - New users get 3 months free of the Business plan (covers 150k errors). Go to http://sentry.io/twist and use code TWIST(09:52) Jason’s pitch to Disney CEO Bob Iger (please send this to him!)(19:36) LinkedIn Ads: Start converting your B2B audience into high quality leads today. Launch your first campaign and get $250 FREE when you spend at least $250. Go to http://linkedin.com/thisweekinstartups to claim your credit.(23:29) Is this deal going to get approval, at home and abroad?(25:52) Are Googlers gaming Polymarket?(28:02) Can you do “insider trading” on a prediction market?(29:23) Pipedrive - Bring your entire sales process into one elegant space. Get started with a 30 day free trial at pipedrive.com/twist(37:00) How accelerators like Y Combinator serve as “finishing schools” for startups(37:52) A Quick Look at some of our fav companies from YC’s Fall ’25 cohort(39:01) Why startups need to “skate to where the puck is going”(40:08) Why sometimes old ideas (like solar-powered aircraft) are often worth revisiting(45:29) Jason’s advice for founders (and investors) in the “feel good” or activist space(50:48) Why Lon, Alex, and Claude ALL thought Hyperspell sounds like a hot startup(52:58) Perplexity getting sued again! Why can’t they make friends!(57:51) Meanwhile, Meta’s signing AI deals with news publications.(59:21) Micro1, which Jason helped to fund, has hit $100M ARR! Why do AI companies need so many experts?Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.comCheck out the TWIST500: https://www.twist500.comSubscribe to This Week in Startups on Apple: https://rb.gy/v19fcpFollow Lon:X: https://x.com/lonsFollow Alex:X: https://x.com/alexLinkedIn: ⁠https://www.linkedin.com/in/alexwilhelmFollow Jason:X: https://twitter.com/JasonLinkedIn: https://www.linkedin.com/in/jasoncalacanisThank you to our partners:(8:42) Sentry - New users get 3 months free of the Business plan (covers 150k errors). Go to http://sentry.io/twist and use code TWIST(19:36) LinkedIn Ads: Start converting your B2B audience into high quality leads today. Launch your first campaign and get $250 FREE when you spend at least $250. Go to http://linkedin.com/thisweekinstartups to claim your credit.(29:23) Pipedrive - Bring your entire sales process into one elegant space. Get started with a 30 day free trial at pipedrive.com/twist

bidding process is over. Netflix has won the bidding war to obtain Warner Brothers now, the film and TV studio and all of the Warner Brothers IP, Harry Potter, HBO shows, Barbie, DC Comics. That's all on its way to Netflix. Should this deal get past the next level of regulatory scrutiny, which is going to be, I suspect, very intense. But I would also say internationally is the huge concern,

I think, here for regulators. Netflix plus HBO Max is going to be a dominant player in a lot of international markets. Netflix already has been really tough for a lot of international marketplaces. Like, they're already dominating. So that's like the real next thing we have to look out for. The deal, as of now, $72 billion, so $82.7 billion in total enterprise value. That's for the film and TV assets. What's the market cap now of Netflix?

If this is a $70 billion deal, what does this represent in terms of the percentage of Netflix. This week in startups is brought to you by PipeDrive. Bring clarity and control to your sales process with Pipe Drive, the number one CRM for small and medium sized businesses. Supercharge your sales today. Start with a 30-day free trial, PipDrive.com slash twist. LinkedIn ads. Start converting your B2B audience into high-quality leads today. Launch your first campaign and get $250 free when you spend at least 250. Go to LinkedIn.com slash this week. in startups to claim your credit. And 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. Hey, everybody, welcome back to this week in startups. I'm your host, Jason Kelloggannis, with me, of course, Alex, Wilhelm. How you doing, Alex? Fantastic. And if you see Lonnie-Donnie, our editorial director, Ron Harris is here. That means there's something big happening in entertainment and media at lawn. What is it? Could not be bigger. So the bidding process is over.

Netflix has won the bidding war to obtain Warner Brothers. Now, Paramount wanted all of Warner Brothers Discovery. They wanted the cable networks. They wanted CNN. They wanted everything. This deal is going to be for the Warner Brothers TV and film studio. So the cable network, CNN, all those Discovery, HGTV, food network, they will get spun out as a separate company and remain independent or get swallowed

up by somebody else most likely. But the film and TV studio and all of the Warner Brothers IP, Harry Potter, HBO shows, Barbie, DC Comics, that's all on its way to Netflix. Should this deal get past the next level of regulatory scrutiny, which is going to be, I suspect, very intense. I think that people are sort of focusing on the Trump administration, the FCC will American regulatory agencies let this through? Obviously, the Ellison's from Paramount semi-aligned with the Trump administration. We sort of thought they would kind of sail through

the regulatory process here. Netflix might be a very different story. But I would also say internationally is the huge concern, I think, here for regulators. Netflix plus HBO Max is going to be a dominant player in a lot of international markets. Netflix already has been really tough for a lot of international marketplaces. Like, they're already dominating. Combine that with the power of HBO Max, and I feel like Europe is going to be a really hard nut to crack for this deal. They're already pretty anti-netflix in terms of theatrical windows.

So that's like the real next thing we have to look out for. The deal, as of now, $72 billion, so $82.7 billion in total enterprise value. That's for the film and TV assets. That's the long and the short of it. Alex, any data points behind all this that we should know, I give my take. Yeah, I want to go ahead and just show the original breakdown of revenue here. I think Lon makes a great point about international. We think quite a lot about Netflix as an American company, but when you take a look at it, you can see that its EMA revenues are nearly as large as

its U.S. Canada revenues, and it's doing quite well in both Latin America and the Asia Pacific. Wait, what is EMA? EMA. Europe and the Middle East and Africa. Oh, they put that together. So, Mina is the Middle East, North Africa, but they say EMEA. And if you'll know, Jason, these are all enormous companies and they're growing quite well, but the growth, largest growth rates are actually in the APAC region. So something to keep in mind, that's Asia Pacific. Asia Pacific, yes. Yeah. And the amount of money here is enormous. Netflix does not have this much cash that it can just throw around. What's the market cap now of Netflix? If this is a $70 billion deal, what does this represent in terms of the percentage of Netflix? $423 billion, Jason. So this works out to about 17%.

WB shareholders are going to get $23.25 in cash and $4.50 in shares of Netflix stock for each of their WBBD share. I'm an idiot. I made a j-trade on Warner Brothers years ago. I thought, hey, Zazlov's a killer. You were on the show. You remember me talking about this. I do. I'm an idiot because I sold it because I was very frustrated with Disney and Warner Brothers not moving. All my other things were moving. And I knew there was a possibility they would divest this and some of the parts would be worth more. But they had this crazy overhang. And I was like, you know, I just don't want to sit around here anymore. So I took the loss against. some wins on some other shares I had. It probably would have been a 50% game for me in four years. But, you know, when you're sitting on three to five X gains, I guess sometimes you got to make some mistakes. Yeah. Who for J-Cal. What's important about this is when I saw Ted Sarando speak and I asked him a couple questions in a private event, I asked him about movie theaters. And he said, we'll never be in that business. He doesn't like movie news. I said, but I'm a member.

I have a family. We love the movies and we love Netflix. And we would like nothing more than to go to a Netflix movie theater and watch some of these things in the movie there because my daughters love to go to a movie theater with other kids and have that communal experience. So why wouldn't you? And he's like, yeah, it's just not what we do? And he was pretty adamant about it. So what happens now, Lon? Because I was listening to, you know, I listened to some of the ringer shows.

They have a really good show, the big picture. They have the watch. I love the watch. I don't really listen to Big Picture regularly, but I listen to The Watch regularly. I really like that. The Watch is a great podcast for TV shows. Putting it aside. You know, everybody's kind of lamenting.

If you took Warner Brothers out of the mix and they stopped making theatrical, theatrical would actually collapse because they have the DC franchise and all the stuff. So explain to us if they sell the lots, if they stop making theater releases or they do what Netflix does, which is like the token minimum to get Oscar consideration, what happens to the movie business? Oh, collapse. The very dark, cynical take on this would be that is why Netflix wants Warner Brothers so bad. it could slowly strangle the remaining life out of their major competitor for your entertainment

dollar so let's consider border brother slate for this year sinners one battle after another a minecraft movie weapons final destination bloodlines the conjuring four superman you're talking about a lot of this year's biggest hits add in barbie the number one theatrical film of all time was a Warner Brothers release. I mean, they are a major, significant tent pull, one of the big five, but along with maybe Disney and Universal, like one of the key players that is driving the movie theater business. And if they suddenly pulled all of their films out of theaters, it would be, I think, a shock to the system for the regals of the world and the AMCs of the world that they might not

be able to recover. I'm not saying that is the goal. You could read it that way. If they strangle the theaters, then they increase the habit of people watching at home on 83-inch, $400 television. Of course. I mean, Netflix has always said they don't see any one particular entertainment company as their rival. They see time. People spending time on other things is what hurts Netflix.

And so this would be a chance to snipe one of the biggest leisure time activities cleanly. There is a cynical take. I'm not saying that's necessarily what they're going to do. Ted Sarandos has sort of already discussed this. People have already sort of asked about it. They're saying for now they plan to keep WB movies in theaters, but they want to make... Sorandos is calling it more consumer-friendly.

What everybody is reading that to mean is shorten these windows. So movie, WB movies will still come out in theaters, but maybe it'll only be a few weeks before those movies are on Netflix instead of a few months like it is now. I've been working with and investing in founders for so long. I've got super... natural startup powers. For example, I know your team is spending too much time on debugging. Your engineers are chasing down bugs at 1 a.m., 8 a.m. and every time in between, instead of building

amazing new features or pushing fresh code. Just admit it, you'll feel better. The reality is, from time to time, your code is going to break. We all know that, but it doesn't have to be the end of the world. Now there's Century. They're the one-stop application monitoring platform that's not just going to tell you, hey, something's broke. But what specifically happened? Where and most importantly why. Plus, they've added Century logs. So now when something goes wrong, you get a complete report. No more random jobs that just don't run.

No more tab hopping, just actionable information with tons of context. And that means faster fixes. And we want to give you three months free of Century's team plan. That's right, F-R-E, just for being a loyal twist listener. That covers 150,000 errors. Just go to Century.io and use the code Twist. That's S-E-N-T-R-Y. dot io and make sure you use that code twist so they know we sent you i am going to tell you what should

happen here we tell you about the chessboard everything's a war business is a war especially in a complex space like this as you know i in another lifetime was a studio head this was my dream job okay and i saw this movie this tv show the studio the studio with set rogetture incredible and it convinced me even more that i made the wrong decisions in my career i should have just been a studio head like the kid stays in the picture or Barry Diller. I was born in the wrong generation. I missed it by one generation. I should have been a goddamn boomer

and I should have ran a studio. Robert Evans is the kid's days. I should have been Bob Evans. Bob and been Barry Diller. Somewhere between the two of them. This is what has to happen. When I become the studio head and I run Disney and put me in charge.

Yeah, take over for I hear. He's looking. I will take over for I agree. I am going to quit everything I'm doing in my life and I'm going to run Disney Plus or Disney. and I will run it for Bob Iger for two years. And if I do a great job, then he hands me the baton. And I just jumped the line for everybody else.

You got to audition for two years, yeah. I'll do it. I'll do it. Because put me in the game. Here's what I think should happen. Disney now has a clear path. Disney should buy the movie theaters. Disney.

Anybody who owns Disney Plus should be able to go for $1 per seat. to any Disney film and for $100 per theater, just $100 to rent a theater with your kids, and watch anything on Disney Plus or Hulu that they own. So if I've got my kids and they love Ashoka, I can rent a movie theater for 20 kids, praying my kids, the cousins, some friends. Sure.

With five or 15 is up to me. And we get to watch the new Ashoka there. And by having it, all the new series get a one-week preview window in all the movie theaters. Oh, that's brilliant. Disney, when I am in charge, is going to buy the movie theaters or buy out the movie theaters. Your Disney Plus membership, you get a card. Your kids get a Disney Plus card with their name on it and member since. The people who have the longest memberships get priority at the parks for merch, limited run merch and there. And kids, if they're on Disney Plus since, you know, they were five years old in 20 years, they're a 20-year-long member.

That means they get to the Disney parks ahead of the line. They get to go there. They get to watch all the things ahead of time. They get to rent the theaters. And the theaters, by the way, to get into the theater, you bring your Disney Plus card with your membership. You buzz yourself in. Yeah. You can walk into any theater at any time.

You swipe yourself in for a dollar. Disney adults are going to love this. You keep saying for kids, this is going to be a Disney adult thing. I mean, for Jen Xers like you, yes. And you and I could say, you know, with a bunch of our friends, hey, you know, what's a great Disney Plus series or a Hulu series that they have the IP for them? Secret Lives of Mormon Wives, baby.

Perfect. Okay, sure. Sounds great. We can go and just watch two or three episodes. This would change the dynamics of everything. And then this would make Disney Plus catch up and then exceed Netflix. And then you do it internationally.

And you create micro-theaters. Disney owns several movie theaters in Los Angeles. The Crest in Westwood and most famous is the El Capitan in Hollywood. They do special events there all the time. Sometimes like Ariel or Moana comes out. out to greet the crowd and say hi to the kids. So Disney already in the movie theater business. So if Netflix is going to strangle, Disney Plus is going to enable. Now, what this will do when I'm the studio head is when I call Mr. Spielberg and Mr. Cruz and Mr. Tarantino, and I say

Mr. Tarantino, Mr. Cruz, Mr. Spielberg, may I, may I come see you for 15 minutes to just explain to you our goals to support artists and artistry in the theater? Because this is what we believe in. We believe theater should be preserved. May I come meet with you for about 15 minutes? I'll meet you any way you want. If you're in Maui, if you're in the Maldives, I'll come. Yeah, I got a G6, 700, whatever. I'll just go.

Your studio head now. I'm a studio head now. I go. Listen, it's not Bob Evans time. I'm not going to show up with a kilo of cocaine. I'm going to show up with the promise of theatrical. And I will say to Mr. Tarantino, we're going to dedicate, you know, 100 screens to you to curate your films, your favorite films.

your friend films. Here is, here are the hundred, you know, who was just on Brett Easton Ellis's podcast, and he went through his top 20 films. Black Hawk Down was his number one. I agree with him. Black Hawk Down is one of the best films ever. I say to Mr. Tarantino and to Mr. Ellis, Brett Easton Ellis, I'd like the two of you. They both love the cinema. I'd like you to program these and you put whatever you want in them. We trust your judgment. You're incredible curators. And when you do your film, when you do once upon a time in Hollywood, you can keep it in in that theater for as long as you damn well want to, because you're Mr. Quinton Tarantino. You want it in for a year? It's in for a year. You want it in for six months? It's in for six months.

And you can make that decision in real time. All we ask humbly here at the Disney Corporation is that if you do have another project, you at least give us the chance to support you any way we can. How am I as a studio head? Come on, I got the cigar. You would get a lot of the the De Niveville News and the James Cameron's and the Christopher Nolan's, like the people who are still very dedicated to the theatrical experience. They are all going to flee for whoever is going to promise them at theatrical release. Tom Cruise, too, for sure. If I have to put a bright side or find the sunny side of this,

I do think that freeing up movie theaters from chasing this, like, diminishing pool of first-run releases to do more creative things, just like you're saying. So the theaters that remain can become sort of half-reveyor. revival houses, half new things, screen older stuff that there's an audience for. Even better. Mr. Tarantino, you have this incredible video podcast. May we, Mr. Tarantino and Mr. Brad Eastonel. May we debut each episode in the theaters and then play a movie after.

Double feature. Video Archives podcast. And then whatever you talked to on the video archives, we play that after. So it's a four-hour experience. We'll sell the tickets for a dollar each. Or if you want to put a price on it and then we'll give everybody a video archives t-shirt. As part of the package, it's $25. This is my pitch.

please, I'm being sincere here. Will somebody please clip this and get this into Bob Eiger's email and say, Jake Hal, at the height of his creative ability and career and energy, popped up on Alps and nicotine patches, wants to take over the studio. Please, give him a shot. Put him in the game. That's it. That's my pitch.

AMC is worth $1.2 billion. They're the largest U.S. chain by screens. And Disney's worth about $190.190. Jason, so this would actually be a tiny deal that would be very easy to afford. I can finance that. Let's go. I was actually kind of curious, why don't you just get three friends together and buy AMC yourself and just do it?

I mean, that's not a bad idea. Not a bad idea. It's super cheap. You have to own the IP as the reason. You have to have the IP as the reason. I think a lot of the reaction to this is like, oh my God, Netflix is going to murder the film industry.

Theatrical is dead. And I think the more realistic scenario is they're accelerating a process that we all see has already begun. I got an idea. I'm the master at, you know, having work with so many startups. Forget about the tape private for AMC.

I got any better idea. We can do this two different ways. I got the checkbooks. I got the friends who have the checkbooks who like to put them to work. Let's put that on the side for a second. If we were to think about this as a minimum viable product, right, an MVP, this is this week in startups. This is my speciality. I was just meeting with all the accelerator classes.

After this, I'm going to our demo, dim sum demo day. I always talk to founders, but what's the smallest way we could do this? Smallest way we could do this is to buy a movie theater in Austin. which I've talked to you about already long, or build a 200-seat theater, 100 to 200. So much land. You could do that anywhere. But, I mean, a good one. Or buy a classic one and just put a great projector. So I want to find that. So anybody listening, please find me a theater or figure out how I can build 100, 200-seat theater. Okay, put that on the side. Then we start modeling this where I'll go to Brett Easton Ellis.

I'll go to Tarantino and the team, Mr. Tarantino, I apologize. And I'll find the video archives producer, which I believe is Avery's daughter, who's really spectacular on that show, by the way. She's a great, like, moderator. I mean, from the world's greatest, I can tell you, she's, she's on her way. I'm not sure what Avery Jr.'s name is, but she's quite good, actually. Looks like Gala, Avery. Yes, Gala. I would say, Gala. You're doing a great job. May we debut the episodes for video archives a week or, you know, a day before they come out in person at this theater. Boom. And we could do a Zoom with whoever's available. You, the crew, etc. We can actually model this and show that there's a line outside the door, which there would be.

Sure. It'd be a line out the door. So anyway, there we go. To me, this is like the possible bright side of all this is that, well, if we do kind of give up this dream of first-run movie theaters, tons of movie theaters in every city that are showing whatever came out that weekend, like a real revival cinema culture could emerge in its wake where people don't go to theaters just to see whatever the new thing is, but they purposefully go to theaters to see old stuff, rare stuff, offbeat stuff, personal stuff, stuff that means something to them.

You know, there's a wide variety of the kinds of programming we could put. We are also already seeing this with anime. Like a few years ago, Japanese anime films never really came out in theaters in America. You would catch up with them on physical media or TV or whatever. And now those are some of the biggest box office draws, like the new Demon Slayer or My Hero Academia. So we are already seeing this start to happen where all this kind of alternate content that wouldn't have gotten to see the light of day 10, 20 years ago now can get into theater. If you're selling a business to business product, you're looking to reach professional

customers who are doing business. And the question you have to ask yourself is where do those business leaders spend their time? And the answer is obvious, LinkedIn. And these are the real decision makers. So when you advertise on LinkedIn, you're not wasting your money. You're going to target your ads based on job title, based on industry, based on on skills. Maybe you want a CFO in the technology space who has been in their job for five years, right? You want to zero in on those demographics and behaviors. LinkedIn has over a billion members and 10 million of them are C-suite executives. They're going to help you reach exactly the right person with the authority to pay for your product, right? Go right to the top. Use LinkedIn.

And we've got a special offer just for Twist listeners. Launch your first campaign and get $250 free when you spend at least $250. Go to LinkedIn.com slash this weekend startups to claim your credit. If these young folks are addicted to shorts and junk food, at some point, they look down at some point and say,

I feel vapid. I'm having whipped cream. I like a steak. I'm eating these empty calorie Cheetos. I want the O-Toro. I'm going to go see Antonioni's Red Desert this weekend. Damn it. Get some class.

Yeah, but know what. They're going to want to. And these kids are now doing a thing when they go out. They're all buying point and shoot cameras. I saw one of my friends, she's an influencer. There's like a like a point shoot. I don't know what it costs, but this recent one is trending all over the socials. I'm assuming they're doing like an influencer campaign.

But this is something that's happening already. People are buying old ones of these for 50 bucks, $150, basically the Gen X parents old camera that they put on eBay or was in a draw. They get a memory card. They take it out. They're like, I prefer shooting on this and leaving my phone at home. And they bring a flip phone and that. So they basically are unbundled.

and leaning into acoustic, real experiences. So as a founder, you got to think, well, there is a counter to everything. And this will happen. People will be self-driving. At some point, there is going to be a movement where people say, I don't want self-driving anymore. I want a stick shift. So with the Corvette series, they stopped in the C-8 making stick shifts because these tiptronics and everything was just so good.

Like, why would you ever do that? Because it actually slows you down. You got to learn how to do it. The C-7, the last generation that had the stick shift of the C-7 corvettes. You can pull one up and that engine in the front, which was considered not the best performance because the computer could do a better job shifting gears. And putting the engine, mid-engine like a Ferrari, et cetera, is a better driving experience. The C-7s now, the C-7s like Z-51, Z-0-6, they're the coveted ones.

They're the ones that people are trying to buy. And there's too many of these other ones. Jason? That's a C-7. Because see the engines in the front? You see how big it is? And it's gorgeous. Now, that is the last stick shift they made and the last front engine, which is what the

Corvette was known for. But the performance went way out when you put the engine in the back. And if you look at a C8, this is the hypercar. The engine's in the mid, so it's like right behind you. And it's got the Tiptronic. So now for five years, you haven't been able to get a stick shift in this gorgeous corvette. And people are like begging them, bring back the stick shift.

You realize with the stick shift, the idea of you texting and driving is out of the question. Yeah, that's not going to work. Yeah, it's not going to work. So this is the one I'm getting. by the way. I'm going to get one of these. This is gorgeous. I will say the stick shifts are a dying breed and we'll all going to miss them when they're gone. But I think as we moved to EVs in general, Jason, the idea of having variable set gears just starting his super arcade. This though. Now imagine, like, let's get back to my fantasy here. The studio head. I got the Corvette C, uh, ZRX one. I got the cigar. I got the theater chain. I'm calling Mr. Tarantino, Mr. PTA. And I'm bringing it back, baby. Okay. Any final thoughts? I mean, because Trump's a little, I'm sorry, are amazing, fantastic, astute, insightful president Trump, even Jason realizes that he's going to probably want to have a say here. And Paramount was the company, I believe, he wanted to win because Oracle, et cetera, are kind of his guys.

Exactly. I mean, he's a friendly relationship with the Ellison's that they sort of they took over CBS and now Barry Weiss is running CBS news. And I think the Trump administration really likes how that is going. I was kind of hoping. oh, maybe these allies would take over yet another major news network. The key thing to notice here. CNN, you mean? CNN, not part of the Netflix deal, not going to Netflix. I think clearly that would have faced regulatory hurdles that Netflix would not have overcome. Like, can they take over a TV, major TV news network?

I said this on a previous episode, man, them having a 24-hour news channel globally on Netflix would have been. It would have been a game changer, but I think international regulatory approval of that kind the deal was going to be like probably a non-starter for them. On that note, though, Lon, the EU is expected to pass this through. Everything that I read said that the EU is going to be fine. So it's going to be interesting to see if it's the American regulators that actually are the sticking point here. I don't think so. I think they're going to let it fly. I'll be honest. We're going into the golden age of MNA. We've talked about it here. We're seeing a lot of tiki-tacky singles and doubles

and acquisitions. I told you I'm predicting it now. There's going to be a $10 billion to $50 billion acquisition in 2026. And by 2027, there'll be $100 billion company gets acquired. But my thought, though, is that in the wake of the meta-FTC deal that we said was going to be a starting gun, because it said that meta didn't have a monopoly in personal social networking because of competition and changing technology, it's hard to prove. I think that applies directly here, Jason. How can you say that Netflix is going to be anti-competitive here when they still have Disney Plus on the side and they're up against YouTube and they're up against... Peacock. I just signed up for Peacock. I had no choice. There are certainly in the U.S. market, there are certainly other players in remaining options.

And also, I think the fact that CNN is not part of this deal and is going to get. get spun off and could still be acquired by a more Trump-friendly voice means there really isn't as big a win in shutting this one down. Like, I feel like, I feel like that there's no clear win for the Trump FCC and putting a stop to this. It's not like they're, they're letting a news network go into the hands of hated enemies or anything. I don't feel like it may raise that much scrutiny as people are thinking.

I wager, major to think. that polymarket is in the news. They are indeed in the news. And they're in the news because someone is particularly good at making bets over on polymarket. There's one user, went by the name Alpha Raccoon, now rebranded to Zero AXF-E, that made about a million dollars, Jason,

in 24 hours making very granular bets on Google happenings. Now, people are calling this person an insider. Forbes is covering it. It's viral all over Reddit. And I got to say, it looks pretty damn suspicious. I presume you've already, you've seen this in the news. I mean, I saw the headline. I'll be honest, I've been pretty busy here.

I'm on the road. I'm in San Francisco for the All-in Holiday Spectacular on Saturday night and my demo day, which I'm going to go right to after this Friday afternoon. So I have not been following the details of the story. But I do know that Alpha Raccoon has been betting on Google and some of their markets. Correct? Am I correct? Yes.

So there's been a couple of major things that they've done. First off, they made a series of yes and no bets about when Gemini 3, Google's recently released AI model, would come out. They correctly predicted the day and bet against all the other days. This led them to making a $424,000 gain, betting that Gemini would not be released by November 15th. They bet no, that it wouldn't come out by October 31st, $114,000. And they bet, yes, that it would come out on November 18th, netting them $91,000.

But that's just the start. They also made a series of yes and no bets on will certain people be in the Google? top five most searched people. They bet yes for Pope Leo, 174K profit. They bet no on Zoramandami, the mayor elect of New York City, plus 45K. They bet no, Donald Trump plus 171. And they bet yes on Jimmy Kimmel plus 15K. And this was all in a pretty short time window. And when you're 22 out 23, as Forbes reported, it looks pretty gosh darn suspicious. I think it's the polite way to say that. Let's be clear here. Prediction markets are distinct. different than trading public stocks or betting on sports.

There are going to be different sets of rules here. The reason prediction markets are unique is that there is no concept of insider trading in prediction markets. There is insider trading. If you worked for Google and you made bets on the stock price of Google based on the release of Gemini 3.0, that would get you in big trouble. And by big trouble, I mean jail. And inside of trading, Martha Stewart, plenty of examples. And that one was probably a little ticky-tacky.

And, you know, they went after obviously as a celebrity. It's just a bit unfair, but, you know, everybody has to face the music, I guess. I don't know the details of that one. But it did seem a little bit harsh for, you know, a tiny gain. I think they probably shouldn't need to go to jail. They could just give her a big fine and made her do a commercial. But anyway, putting it aside, these prediction markets are different. And if you're on the Warriors or the NICs, as we just saw, with the Justice Department going after people who might have been placing what are called prop bets over unders on the number of rebents, that also is illegal. So I think this is where the market is going to learn what's allowed and what's not. So where does this one sit? And how are people

framing it in the press? Are the prediction markets giving any guidance here or, you know, Polymarket, Cal She, other prediction markets, obviously, is going to be a whole bunch of these with the success of Polymarket, which I have a partnership with, and I'm a shareholder in. Full disclosure. You can't have an effective sales team without an effective and above all organized sales process. Trust me on this one, I've seen thousands of startups basically fail because they had messy, chaotic systems in the sales department. It's one of the biggest red flags there is.

This week in startups, it's about helping founders. So I want to tell you about the tool we use. use to stay organized here on this week in startups. It's called pipe drive. They bring your entire sales process together in one clear, easy to understand and centralized space, giving you just one place to check for all the customers and deal information you need. I'm a big fan of data, right? Especially here at this week in startup. So teams that use pipe drive close an average of three times more deals every month. It could be you. Join over 100,000 companies using pipe drive. And when you use our link, you're going to get a 30-day free trial.

No credit card or payment is needed. Just go to pipedrive.com slash twist to get started. That's pipe drive.com slash twist. The media commentary about the legality here follows what you're saying, that the SEC is not involved. This is not equities based insider trading. But the CFTC, which does regulate the prediction market world, does ban market manipulation?

Now, what's not clear yet, and I don't know if we actually have a legal foundation here to stand on, is does it count as market manipulation if you are an insider and you make a bet as part of a prediction market, does that action change the market enough to constitute manipulation? The consensus appears to be no, which means that enforcement here is going to come down to individual companies trying to protect their own information and not letting their employees trade on it.

Because once someone finds out, Jason, that an insider from, say, Google is making a bet about a product release, then they can take that information as a third party and trade on it themselves. Or change their own release schedule. I'm sure Open AI is going to pay a lot of attention to this person when they bet on future Gemini release schedules because it's going to tell them exactly what's going on. So just as I think sports teams and sports leagues want to ensure that their players are not corrupting the league's performance, I think that companies are not going to have to be super clear about what their employees are allowed to do

because they don't want to accidentally leak secrets through this loophole. And it may be that this particular user is not a Google employee. People seem very convinced that they are. But when they do get found out by Google, if they are an employee, they're going to get canned. Because one, they're making Google look really gross. And two, they're effectively telling the market ahead of time when they're going to drop market-defining products that Google wanted to keep under route. Yeah, there are rules about this inside of companies already. Apple is very famous, as well as Tesla and anybody who releases products on some cadence of explaining this explicitly to employees.

And also, they all have security departments. So the security at Apple, security of executives. I'm talking about security of corporate security of secrets. This is like one of the most lockdown organizations. And when the person lost the iPhone 4 and Gawker, not Gizmoto bought it and committed essentially what I believe is a felony to buy stolen stuff. I don't know where that ever hashed out. But I remember the Engadgette team coming to me. And we're like, hey, we got offered this too.

And I was like, we're not going to commit felonies. Thanks, guys. but we'll take a pass. I mean, I'm being serious here. I remember them saying, like, can we buy stolen secrets? And I was like, absolutely not. That's a felony. Like, can't commit corporate espionage. Now, Nick Denton had a different position on it, which was, let's see what happens. I believe, was his interpretation. How did Gawker fare long term there, Jason? Yeah, I think, yeah, you got to be thoughtful about these things because they can be what we call in the gambling business, the risk of ruin. You don't whatever get to that point. But employees need to know, if you're putting aside the prediction

markets putting aside the CFTC, your employer, you've already signed documents that you're not going to share information. In a way, this is sharing information. And you're not allowed to use this information. So this is just going to be in everybody's employee contract. They're going to explicitly put in corporate documents, you are not allowed to participate in any prediction markets related to our work or the information you're exposed to. This will be in documents very soon. And you're not allowed to share it either, because this is going to be a bummer in some ways, because what makes the prediction market so powerful is that people participate in them. This is the thing, right?

This is the idea that the sharps, the people that have more information than the average person can essentially tell the world what's going to happen. But if you take that out, Jason, and I don't mean to talk ill as an artist they're doing very well, but I wonder what the value of the predictions will be if you take out insider information because then it's just reaction to market news. You know what people have? Friends. So what's going to happen?

Friends, friends of friends. here's what typically happens is a person on a sports team is like talking to their friends in group chat and they're like, oh yeah, don't bother coming to the game tonight. LeBron's injured and the injury report hasn't come out yet. And they're like, yeah, no, don't come to another game. Don't buy tickets to this one. I mean, LeBron's not even playing. Then they're talking about like, oh, yeah, LeBron's not playing. And then a friend of a friend places the bet that LeBron is not going to hit their 32 points and they win or like the Lakers aren't going to win and all of a sudden, you know, you're in the money. So that's kind of the danger. Those kind of things will have.

and people talk, people chit-chat, et cetera. If you're a journalist, you have great inside information, and you're one of those old-school journalists as a network, I suggest you quit your job and you just go full-time Polymarket. And there was a guy that was trending. I don't know if you saw this, but there's somebody who's just doing very small bets and making a fortune on Polymarket. Did you see this? I did not see the small bet guy. Yeah, there's a story that's been trending or buzzing around about somebody who's pretty sharp. I'm surprised we didn't pick them up as our, like, interesting person of the day. But there are a number of people who are full-time I'm on these prediction markets. And they were when there was in trade. There was a kind of called

in trade in the 2000s, early 2000s. People became like addicted to doing that. And it was, I think it was in London, but it got shut down or closed. But there are people who were going to do this full time. I think there's also a startup opportunity here. Like all jokes aside, if you can figure out who the traders are on polymarket that do events and information, you can aggregate that and sell it to hedge funds. You can make a lot of money. I mean, and all this stuff I believe is on the blockchain for these companies. So that's why when this trader in question, Alpha Raccoon, whatever, or change their name, we knew exactly who they were. And then I, because it's all in the blockchain, you can't, you can't scrub that out,

which is the power of, you know, decentralizing and so forth. But it's, it's interesting. All right, let's move on. Let's talk about a couple of companies from the recent Y Combinator fall 2025. Class, a couple of stats for folks out there who are curious, where is YC getting companies from these days? Well, out of 156 launched companies, 130 of them are from the U.S. and Canada. 22 are remote, Jason, four from Europe and one from Southeast Asia.

That's it. So essentially, it's San Francisco in the cloud or nowhere. I think you're not shocked by that. Yeah, exactly. Okay. Yeah, I mean, it makes sense. What I'll say is, you know, these are finishing schools. YC is the most notable of them. I'm not necessarily saying I say the best because I think there's five of them now that are competing to be the best, where one of them watch Accelerator. A16Z has speed run, Pervici, Marr, and Pejmon, Ark from Sequoia. Yes. Antler has a great reputation.

Tech stars. Cohen's back running it and rebuilding it. And I saw him when I was in Tokyo. They're doing a great job. You should consider applying there. So there's five or six that I would say are the best. And I think they're probably all equally good if you are a founder, not in Silicon Valley, first time founder or a second time founder in your first project, you know, never became like venture backed or had, you know, serious backing. And what these programs do at their core is their sorting function. For every 100 people that apply one get in, where in our case, I think it's like one in 150 or one in 200. I think YC is pretty upfront that it's one in a hundred. So they don't do a perfect job picking companies,

obviously, like most unicorn companies don't go to Y Combinator, but they do hit unicorns on a pretty regular basis, you know, probably a couple of year. Historically, VCs love the sorting function they provide and they love to draft off of that. And so that's what we're going to do right here. We're going to talk about the companies I see here, 100 B to B startups, 7.5.5. consumer, 14 in industrials. That makes sense. You know, business to business software. People like to accept those to programs.

Why? They very quickly get to revenue, as opposed to consumers, which take years. Consumers are lightning in a bottle, one in a thousand work out, B2B startups, one in 50 work out. So you have a higher hit rate with B2B, but you have more outliers with consumer. But tell me about the top couple companies and what they do. Yeah. So one that Long and I both really likes called Lightberry, called the Social Brain for Robots.

And the idea here is if you have a humanoid robot, if you have a robot in your house, you want to program it. What if you could just talk to it and then teach it just from voice? So think of it as the no code for voice AI for at-home robotics. It's a very nascent idea. Clearly, the market for this isn't there yet because we don't have enough robots in our homes. But I love where they're looking.

They're looking a couple of years ahead, and that's probably where you need to start in robotics. A company called Dome, Jason, is super cool. It's a unified API for prediction markets because there's polymarket, there's Kalshi, there's opinion. There's a lot of these now. And so what if you want to have all that information? What if you want to use it? What if you're going to learn from it? They're building one single web hook for that. So, Dome, a unified API for prediction markets, great idea. They're going to need to have, if the information is public, they're going to be able to not scrape it, but they'll be able to collect it.

But they're going to need probably permission from these markets if they want to have API access. But a lot of times small ideas, you know, things start as small ideas and it's a wedge and it opens up into. something bigger. So I kind of like the idea, actually. They're skating to where the puck is going. That's what I was thinking. Kind of looking ahead a couple of years. Speaking of looking ahead a bit into the distance, Zephyr fusion wants to take fusion power, Jason, and put it in space. Now, you're saying we don't have functional net positive fusion power on the planet, correct, but we are going to need it eventually up in space. If we're going to have the in space economy that we'll expect because solar power will only get us so far. Love that. Again, sometimes with the startup, you want to skate to where the puck is going and you have a,

have five years of build time because this opportunity seems super crazy. But if you can raise the money to do something super crazy like this, as long as you don't run out of money. So a startup like this needs to keep their burn low and have the right investors. So you need to have like a Steve Jervitsen. And I think his fund is future fun now. And I think he told LPs be prepared for a 20 year whole period as opposed to the classic 10 to 15 years. So you just need to match the investor to the window. And that would be what Zephard used to do here. reminds me of StarCloud. Previously, they had a different name, but they're building the data centers up in space, Jason. Sure. Also going to be a very patient process. You're going to let long-term

capital for that. A couple more of my absolute favorites, Icarus. This is high-flying solar planes for defense context. So not satellites, not normal flight heights, much higher solar power. It's stay up in the air for weeks, months, on end. Really cool idea. People have done this before. This was done 20 years ago. There was a plane that used solar that went around the world. So this is a startup doing that idea. I think the gist here is even though we have SpaceX bringing down launch costs dramatically, even though Blue Origin is getting the new Glenn to launch and then land its first stage, it's still really expensive to get space.

So what can we do high stratosphere that is similar to low worth orbit satellites and what's the value tradeoff there? I think it's a fun place to be. And people are betting, I think, a lot more on launch costs coming down, Jason, than on the ability to use planes up with the javasphere. What's really interesting about this lesson is when people do, experimental things in the world decades ago. So there was a project called Solar Impulse. This happened like in 2011. It was a Swiss long range experimental solar powered aircraft project. The goals were to be the first to circumnavig the earth by a piloted fixed wing aircraft using only solar power

and to bring attention to clean technology. Here's one of the images of the first iteration, Jason, of this. Clearly a stripped down lightweight, high efficiency looking design. What's really interesting about this, if you think, by the way, it was Bertrand Picard. He created that project and he was very famous, like, who was like an environmentalist, etc. Anyway, this was all done under the auspices of like clean energy, like as a proof of concept. But as time goes on, and you think about the efficiency of solar panels, how much they've changed in 15 years, efficiency of batteries, how much they've changed.

And then autonomy and chip technology and AI. These things are going to be able to fly extremely high without pilots, without oxygen, without a bathroom, without safety concerns. You can just fly these things, you know, 50, 60,000 feet where there's less atmosphere, and they could be real game changers, and they can be flying all the time. If these, they could be flying in perpetuity. So I think the interesting thing is how, not can it circled front the globe, how long can one of these stay up there?

And what could they do up there while they're up there? really interesting technology. I like that one a lot. Two more from us, and then I'm going to bring up one from producer Claude. Play Health. This is all about pari menopause care for women.

There's been a lot of talk, I think, in the, I don't know, the U.S. community about pari menopause as a thing to pay more attention to, to provide more accurate care or just better care for women. So I love that there's a startup working on that. It seems like a pretty good market

that's not oversaturated. No, there's been a lot of this data. A lot of these apps, actually, women's self-haps. The challenge with these is people aren't willing to, pay for them. So, you know, with all of these, you're going to really need to make sure that insurance companies are willing to pay for this kind of stuff. And they tend to be a bit niche.

So while it does impact everybody, the key to the success of this company is will insurance pay for it? What will they pay for it? And is it defensible? All that great stuff. So it does seem, looking at their website, they do have a page about providers and they understand this. So that's good. somebody who advised the company or the founders are very smart and they understand like, hey, to make this work, it's not just about building the app. Because a lot of people build a meditation app. A lot of people build a fitness app, period tracker, pre-men and pause tracker, all this stuff. You have to be able to figure out a sustainable, profitable business model. So it has to provide enough value that an insurance company will pay for it or enough value that consumers will pay for it.

And then you have to ask yourself, both of those things are hard, right? So if you're going to do these kind of healthcare things. Again, find an investor who understands working with, and this would be my counsel to them, and, you know, YCs fell with smart people. So I'm sure Gary Tan and his team said to them, like, the first question you're going to get with investors, how does this scale and who's paying for it and how profitable? What are the gross margins? And so it's going to be challenging, but if you figure it out, what if it works? So I like it. Another one that might have a hard time monetizing, Jason, is sunflower, but I like this idea. It's using an app to help. people form new habits to break away from addiction.

Have seen this many times, but you went through this kind of thing. And did you use one or how appealing with this BDU as somebody who quit alcohol? So what people don't know is that rehab is mostly just AA with a rapper around it. And so I think that what we don't have is a variety of options for folks out there for whom the main most popular method doesn't work. And so to me, as a person who also believes in harm reduction and helping people just live better lives. If sunflower is effective and it claims that it is, and if it can get into hands of more people, then the amount of human misery that it could potentially take out of society is huge. So I'm just

very optimistic about them taking this approach. I don't know if this is going to be the company that cracks it or if it's going to monetize super well. But you're exactly correct. And what I'm going to point out here is with what happens with the venture capital is a very important lesson for founders. If you're doing something that is feel good. And on all these lists, like we When I asked my team to put a list together, the press puts a list together, they will pick a couple of the feel-good ones. And it was climate for a while. It could be DEI.

It could be women's health. It could be sobriety. All these things make you feel good, right? Oh, great. Helping society. You just said it. Like, if there's like multiple options, reduce suffering. Please understand.

You're going to get 100% of your VC meetings. And they're going to lie to you. Venture capitalist are going to lie to you. And they're going to say, I couldn't get my partners around the investment. However, I'm going to be as supportive as I can. Please let me know how I can help. And it's like, well, the way you can help is by making an investment for a venture capitalist. I don't need a high five from you.

You know, like I need money. So be prepared. And I told my team internally because what was happening is we were accepting a lot of feel-good startups because the team wants to make the world better. I said, I don't, we're not here to make the world feel better. We're here to get returns. And it's, like, venture capital is really hard right now. And that's what we're seeing.

A lot of venture firms are going out of business. They're in like a stasis mode. They haven't been able to raise a new fund. So they're just living off of management fees and managing these. a single portfolio while slowly getting rid of partners. That's like these, you know, you're talking about zombie companies. There are zombie VC firms right now. So as the management fees taper off, you go from four partners to three to two to one and there's just somebody like, you know, wrapping up the fun halftime. That's what happens if you make too many of these feel good bets.

That's why it's really hard right now. So how do you counter that? You have to be a cutthroat capitalist. And the people who are attracted to these opportunities tend to be the feel good people who want a virtue signal, or historically, and who want the social credit for it. So when Molly was here and we were working on climate, the big problem I had was the valuation expectation was really high. The majority of the entrepreneurs, I would say, were not cut-throw killers who were business builders, who wanted to build profitable businesses. They kind of were kind of activist-e, and they wanted to save the world. They wanted to save the wells. I would put it in the Save the Wells category. So you had a high price and the wrong type of

founders, and that's why climate became such a toxic space for returns for LPs. LPs know that. They quietly have moved away from DEI, quietly moved away from that. And these will have that same thing. So I'm not saying this because it's how I feel about it. I'm trying to explain the game on the field to those founders. Yeah. The game on the field is don't give yourself credit for any kind of high fives or getting included in a list here because we want to have like, oh, you know, when lists are built like this. Oh, let's have some of the future tech. Let's have some of the feel good. Let's have some of the, like, obvious business things. People put lists together. You put list together. You put list together at Tech Crunch. We're there. I put it together when I was setting gadgets. Slok and I reporter.

You have like a little diversity list. Don't give yourself credit for them. Give yourself credit for a customer being addicted to your product and being willing to pay for it and having a high gross margin. Because these founders get led astray. Yes. The VCs are not helping them by saying, oh, great idea, oh, great idea. So when I meet with them, I say, respectfully, love the mission, love that this exists in the world. What's the way you're going to print money and have a defensible monopoly here and be cutthroat and kill your competitors and, and, and end, and a lot of times the founders, they're virtual signaling founders, their status-seeking founders who want to be the CEO of the company that saves the wells and put in the same of those. They want the personal glory for themselves,

I see. Correct. And so VCs, this. This is the inside discussion that happens at the poker table, at the, you know, post-YC drinks, post-tech stars drinks, you know, in the decision-making room at YC or A16 Z speed run. Oh, it's a feel-good company. We're not here to feel good. How do we let them down easy? Take two meetings. Give them some advice. Introduce them to a friend, some university professor, whatever.

Tell them your spouse is going to use the product, whatever. Tweet for them. retweet them, but don't put our money in it. So just understand, you have a 10 times higher bar. That's reality. If you're in a feel good space, you're going to win all the startup pitch competitions. And man, I've seen it over and over again. These founders, Alex, they start to believe that they're great, but not because they have a great business with great margins, with great virality, with great go-to market strategies, the great team, with great technology. No, because they want a startup competition. And they won because the person on stage is like, oh my God. Oh, it's so

precious. You're saving the fucking whales. So this is to save the whale trap. Don't get caught in the saving the whales trail. Man, the whales are doomed. I think the wells do pretty good, actually. I think since we stopped polluting the oceans and people stopped hunting them as much, well's doing better. We're no longer using whale oil, which is, I think, a really great thing for the whales. Isn't that, just as a total aside, you guys, two guys from the Northeast, isn't it incredible that the Northeast and Nantucket and like that whole corridor was the Saudi Arabia, the Qatar of the eight, whatever, 17th, 18th century for Blubber converted into oil to run lamps so people could read books at night. They literally caught whales, cut them up into big pieces, and then rendered the fact down on a boat, brought the oil back and then you put it in your lamps. Think about the air quality in your house, Jason, if you're burning whale fat. Now, I will say my house in Providence, a historical old town, was initially owned by a sailing captain.

So a little fun bit of history there. Now, before we move on, Jason, we ask producer Claude to also take a look at the YC fall 2025 list. And I want to highlight a company that both Lawn, myself, and producer Claude all liked at the same time. So right here we have the top list from Claude. claw.aI is exceptional. So we said here, rank the most promising companies from the full 2025 Y Combinator cohort. Shout out to my guy Gary Tan. Come back on the program anytime. You haven't been on the program in 12 years. He's on which you think are most likely to pull through and get additional funding and growth in the future. Oh, I love the prompt. And he says,

I'll search for the information about it, gets all the results. Let me search for more specific information about the class. Great. Let me fetch more specific details about F25 companies from the line, oh, from the directory, and here it is. Top tier, most likely to break out multi-factor security infrastructure. So the one I wanted to highlight from this list that I just had on the screen is hyperspell, because both Law and myself also, that's coming to, it's very interesting. So I thought the three of us all together worth highlighting. Hyperspell creates essentially a separate memory layer that it caches that sits between the user

and AI. So if you think about AI is just as an engine or a brain and you as the person using it, you want to make sure that it has access to your stuff. But what you don't want to do is sit there and wait all the time for it. to go read your email again. So HyperSpel pulls in your email and your calendar and your context, all of that and provides a contextual blob that then you can use as your own kind of like quick Twitch information source for AI usage, which I think makes AI both more personal and faster and therefore better twice over. Other people are working on memory Jason in LLMs, but I think this is a

particularly cool idea and a good place for a startup to build. Great idea. AI infrastructure. Always a big winner. And what I see here is it didn't think. say how it's making its decision here, but it has founded by, you know, for the multi-factor company, ex-CIA officer and NASA scientists with PhDs, solving critical AI agent security with post-quantam cryptography, already has a strong investor backing. So it knows some of the signals that we use here in Silicon Valley. So great job to our friends at Anthropic and producer Claude is amazing. All right, Jason, the New York Times is suing perplexity because they're mad about copyright. Now the people in that of Perplexity include New York Times, Chicago Tribune,

Amazon, the cease and desist, Reddit, saying that they're scraping all their content, cloudflare, alleging that they're going around all the robots.TXT norms. Forbes gone out of them. Dow Jones sued them. The question for you is really simple. Is Perplexity doing the smart thing here by trying to just go forward and ignore the legal threats, or would you tell them that it's time to slow down and maybe make some friends? There is a legal framework that is going to emerge. And I love the comment browser and I use it. And I'm trying to use some other ones. Nobody's got as good as one as comment right now, but I love these agentic ones. Now, if I'm looking at a webpage on my computer and I cut and paste it, I edit it, I can do whatever I want on my computer.

And perplexity as a tool can do whatever it wants. Now, there is a gray area here, which is if a user looks at 100 LinkedIn pages, 100 pages of the Wall Street Journal, New York Times that are behind a paywall. Does a large language model, et cetera, have the ability to put that into their training or to use that or to scrape it in some way? The answer is obviously no, because that would break the terms of service. But if a user uses it, yes. So we're in the middle of this dance, specifically, I believe, around this, because it does feel fair to users that they should be able to, if I paid for the New York Times, summarize in New York Times with the assistant you know, that I could have from chat GPT, GROC or anything.

And I can certainly cut and paste a New York Times story and post it and tell you this and say, summarize this. Now, am I breaking the law by doing that? No. When you're a user, you have the ability to remix and use content that you buy on your desktop, generally speaking. That's not for commercial output and user. But are these things actually benefiting from it?

And that's where there's going to be, need to be some rules on the road. And so perplexity is the first out there. And I think that they're probably on the margins being very aggressive about it. New York Times, as I said, is not going to be fooled this time around. When they had Google scraping them and search engine scraping them, they made a mistake. Rupert Murdoch said, somebody can go find the quote, that, you know, Google was a parasite or something to that effect. And, you know, if we all just blocked Google and made them pay, you know, the industry would do much better. Because Rupert Murdoch was right, Google would be nothing if they couldn't index

all this stuff. But Google was fair for some period of time. in the minds of publishers because they sent traffic and they didn't take too much content. Now, that's all done. People are summarizing these stories. There needs to be a licensing deal for these. Back in 2009, Murdox said he might block Google searches entirely from his properties. And he said that they have kleptomania and is acting as a quote parasite for including news script content inside of Google News pages. Right.

And he had said stuff like this earlier. So they're not going to wait because remember France, Canada and Australia all had rules around Google News and having to pay a license fee. And then Google said, well, we just won't have Google News in the country. It's not sweat off our back. We don't make any money of Google News. Long story short here, people need to sit down around a table and come up with a reasonable licensing fee. And there needs to be a tag on the New York Times that, you know, perplexity proposes. And they should just say, hey, we will give you $1,000 per story.

You produce 100 stories a day. So we're going to give you $100,000 a day. We're going to give you $3 million a month, $36 million a year to have the New York Times in perplexity. And the New York Times will say, $36 million a year, we'll take it. Yep. Now, if they said, we want to give you $100 per story and we're going to give you $3.6 million, the New York Times is going to say F off, like Logan Roy said to me on my birthday a couple years ago. Shout out of Prash. Did you see that, Logan Roy? I did not. We'll play it at the end of the show.

F off is the right answer and the right thing for New York Times to say to open AI and everybody else perplexity. And that's what's happening here. And I advise them on this very show. Don't back down this time. Hold all the LLMs accountable equally. And just for the LLMs, you can't have a 500 billion. billion dollar company like chat GPT or a 300 billion dollar company like Claude, which we just mentioned, a partner of the program. You can't have a 20 billion dollar company like perplexity without paying for the content that's going to make it great. So just make that decision to say 10 percent. I think minimum 10 percent of the revenue of these should go to content providers. A minimum. I might even say 50 percent, like 55 is what YouTube gives providers. So they should just give a

percentage of it. It's a benefit to those programs to have those partnerships. And And I showed on this with my Nostr-chanis, you know, ideas, log in with your New York Times account to perplexity, authenticate, authenticate with chat GPT to your Disney Plus account. Just have an authentication process. And if people have a subscription, you can then access New York Times data and have it represented there in a very proper way. That would be so amazing. You would have a competitive advantage.

People are paying Reddit now, right? They pay Reddit. On that point, Meta just announced a number of deals with media properties for its own AI product. This includes CNN, Fox News, Lamon, people, Daily Collider, Washington Examiner at USA Today. Wow. More coming, and they're going to pay when they cite those articles in their AI products. This is a great model. Microsoft also signed a deal with Business Insider recently.

We're starting to see this kind of shake out. The worry, though, is if I want to put on the other hat, if you will, steel man this a little bit, It seems to be that the companies who are making these deals are the ones most able to afford them. Meta, Google with Reddit, et cetera. Perplexity has less profitability to play with, but at the same time, that doesn't mean theft is okay. Now, Jason, I do have your, your Logan Roy clip. Do you want to see that? Sure.

Play it for fans. Here it is. If you're a succession fan, you'll know who this is. Hey, everybody. It's your boy, Logan Roy. Today on the pod. Yes. I'm telling you all to full.

fuck off. I'm not doing this. Jason, you wish you could be as rich as me, but you won't be because you don't fly in helicopters. But your team at launch wants us to wish you a very, very happy birthday and a big fuck off to you. I love it. That was a great birthday you from Prej. Shout out to Mark. Mark, I know, Prash. Who works for me and now is a great company. Micro One reached a $100 million ARR threshold. I think you're an investor in this company, Jason? We did the seed round. We were the seed investors in this company. I wrote this up and then remembered that so it does pass editorial guidelines. The reason why this stood out to me, Jason, is that it's another company in the world of connecting experts to AI companies who want to have their knowledge to help them train and tune

their models, doing incredibly well. Micro one started this year at a $7 million run rate. Now it's over 100. It was at $50 million when it raised a series A in September. And it fits into a broader category. Mercore, which you've had on the show, episode 2159, is reported to be about a $450, $500 million run rate. Same idea. We've also seen scale AI before meta, half bought it, half to capitated it, grow incredibly quickly. They were on the show episode 1005 and search AI also in the space profitable growing very quickly over a billion in trailing revenue.

My question here is not to be a Debbie Dano because this is insanely impressive. Yeah. Is this a long-term business? Are they going to need these experts forever? Yeah, because the world changes over time. And we're out of data to put into these. LLMs. Everything that could have been scraped is scraped. We're now fighting over the scraping of it to, you know, per the last story. So what's left? Get some experts in here and say, hey, experts,

there's a deal with Warner Brothers, our first deal. You're a media expert lawn. Walk us through the deal. Oh, there's a 10Q interpreted for us, Alex. Oh, there's a startup here. Interpret it. And for experts, there is going to be a new job category. So we talk about job displacement, which I've talked out a bunch. There'll be new jobs created. The new job that's going to be created is, experts, training LLMs, and then there are these intermediary companies like Micro 1 that do a great job of managing that process because you need to have these independent contractors accumulated, tested, paid, all this stuff, and it's going to, I would say it's the second inning of these businesses. This is the future of AI. The future of AI is not scraping

data anymore, all been done. It's not synthetic data because synthetic data only works in certain is like making a simulation of roads. You can't make a simulation of like people analyzing M&A, like fake M&A deals. That doesn't make any sense. So what you need is to have experts who were maybe journalists, teachers, PhDs, developers, whatever it is, come in, give their expertise and then look at the searches that are occurring, look at where things are breaking down, where people give the thumbs down to a physics question. Oh, that was a bad response. Hey, now train the LM to fix it. There's a war going on for who can have the best LLLLL. When we talk about the ranking, switching on all these leaderboards, how do you think you move up the

leaderboards? Expert at this. Very proud to have seated this company. They're doing great. I think they have a bright future. I think it's probably going to go 20x from here. And I think it's a great category. And there's going to be a half dozen important players in it.

And we got lucky enough to bet on one of the top three. So here we go. Very impressive. Curious to see where the revenue goes next year. If they keep growing at this pace, they're going to be doing about a trillion dollars in revenue in about six quarters. Okay. All right, well, from your words to God's ears.

All right, everybody, another amazing episode of this week in startups. We'll see you next time. Bye, bye, bye, everybody.