This Week in Startups - The AI Supercycle, California's AI Safety Bill Vetoed, and the Future of AR/VR | E2017

Episode Date: October 1, 2024

This Week in Startups is brought to you by… Vanta. Compliance and security shouldn't be a deal-breaker for startups to win new business. Vanta makes it easy for companies to get a SOC 2 report fast. TWiST listeners can get $1,000 off for a limited time at https://www.Vanta.com/twist CloudDevs. Building the best remote team is tough, but you don’t have to do it alone. Visit https://www.clouddevs.com/twist for an unbeatable offer on hiring elite LATAM talent today. Sprig. The Product Experience platform that generates AI-powered opportunities to continuously improve your product at scale. Visit https://www.sprig.com/twist to book a demo and get a $75 gift card. * Todays show: Alex Wilhelm joins Jason to discuss AI regulation bill SB 1047 (1:46), the biggest supercycle today (6:18), OpenAI’s growth trajectory (25:20), the AR and VR technology evolution (48:51), and more! * Timestamps: (0:00) Jason and Alex kick off the show (1:46) AI regulation bill SB 1047 (2:34) Defining the AI supercycle (6:18) Concurrent supercycles: Self-driving cars and fusion (8:03) Vanta - Get $1000 off your SOC 2 at https://www.vanta.com/twist (9:08) Detailed discussion on SB 1047's impact and reactions (17:14) AI regulation in California: A broader perspective (19:54) CloudDevs - Visit https://www.clouddevs.com/twist for an unbeatable offer on hiring elite LATAM talent today. (21:01) Industry leaders' reactions to SB 1047 veto and open source in AI (25:20) Rule-breaking in startup success and evaluating OpenAI's valuation (36:47) Sprig - Visit https://www.sprig.com/twist to book a demo and get a $75 gift card. (38:00) Infrastructure ownership for tech giants and the future of startups in AI (48:51) AR and VR technology evolution and market potential (55:38) AR glasses' impact on daily life and mental health (1:05:59) AR vs. VR applications and social implications (1:07:27) Audience Q&A * Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com * Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp * Mentioned on the show: https://x.com/martin_casado/status/1840490481777770850 https://x.com/AndrewYNg/status/1840497561821651069 https://www.gov.ca.gov/2024/09/29/governor-newsom-announces-new-initiatives-to-advance-safe-and-responsible-ai-protect-californians/ https://www.bloomberg.com/news/newsletters/2024-09-29/meta-steps-up-pressure-on-apple-vision-with-orion-ar-glasses-and-cheaper-quest-3-m1nkq76p https://www.youtube.com/watch?v=FKgJTJojVEw * Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm * Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis * Thank you to our partners: (8:03) Vanta - Get $1000 off your SOC 2 at https://www.vanta.com/twist (19:54) CloudDevs - Visit https://www.clouddevs.com/twist for an unbeatable offer on hiring elite LATAM talent today. (36:47) Sprig - Visit https://www.sprig.com/twist to book a demo and get a $75 gift card. * Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland * Check out Jason’s suite of newsletters: https://substack.com/@calacanis * Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com * Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

is now the time to create apps for AR. If you recall the Google Glass Days, they had the little translation app, and so you could look at a street sign, and it would auto-translate it for you. I got to play with that. Blew my mind. I also got to play with Microsoft HoloLens,

which was AR, blew my mind. And I never got to play with Magic Leap, but I'm sure I would have loved it. And so it's funny how so many things that I don't like to use, like concur, kind of just like stay alive in the world of technology,

and some things that were so great didn't quite make it. But I think we've now reached the point when the hardware's gotten good enough. There's enough good apps. Yeah, I think we're probably about the point when AR and VR are going to have enough consumer buy-in to be worth building on top of. This week in startups is brought to you by Vanta. Compliance and security shouldn't be a deal-breaker for startups to win new business. Vanta makes it easy for companies to get a SOC2 report fast. Twist listeners can get $1,000 off for a limited time at vanta.com slash twist. CloudDev's. Building the best remote team is tough, but you don't have to do it alone.

Visit clouddeves.com slash twist for an unbeatable offer on hiring elite Latam talent today. And Sprig. The product experience platform that generates AI-powered opportunities to continuously improve your product at scale. Visit sprig.com. slash twist to book a demo and get a $75 gift card. All right, everybody, welcome to this weekend startups. I'm Jason Cali Kahnis. He's Alex Wilhelm, and we're here to go through all the news that is important to startup founders,

venture capitalists and tech enthusiasts, I guess, more broadly. What do we got on the docket, Alex? A lot to talk about today. Yeah, so over the weekend, we saw SB 1047, the California AI regulation bill that everyone had an opinion about, got vetoed. We'll dig into why we care and why it matters. then we're going to talk a little bit about AR and VR headsets

and what Jason is calling the startup graveyard, then Swiggy's IPO and depending on time, a couple of notes on the open AI revenue trajectory and then a new Twist 500 company. So Jason, quite a lot to get into, but before we start, we had a request from the friends and family out there

listening to the show. I think this may have come from YouTube, but on an episode, a couple episodes ago, you said, we are on the precipice of the greatest super cycle in the history of business. And this person asked us to unpack that a little bit, so I figured, let's start there. Okay, so let's define what a super cycle is. A super cycle is a technology comes out, and it's so powerful, it's so transformative

that it will push a bunch of founders to be part of that wave of technology. Fairly obvious when I mentioned them what a super cycle might be. The PC Revolution, when people started having PCs at their offices, in the 80s, well, that meant they needed Lotus 1, 2, 3. They had something to do with this computer. So Lotus 1, 2, 3, Microsoft Word, all these products started coming out. Then we had the network revolution and connecting all these computers together. Now you could do, instead of just Microsoft Word, you could do document management.

You and I could work on versions of a document, which became super important for lawyers. And then eventually the idea that you had versions of a document is something that everybody, A college student, high school student might have the ability to understand. Other super cycles, obviously the internet. And then we have cloud computing, as you know, mobile. And then there were other things that didn't become super cycles. VR, AR, very famously, three or four times we've had to have tried to start that up. This transformative technology didn't work.

AI, we had it happen maybe 10 times in the last, I don't know, 50 years, really, like even the 70s and 80s. and now it's finally hitting. Batteries, sensors, the iPhone, smartphones, people would probably consider that a revolution. If you look at that super cycle of battery and sensor technology, enabled everything from smart glasses, which we'll talk about today, as well as electric cars, right? The battery packs on the original electric vehicles were literally like the battery packs, I think, from smartphones and laptops. So now here we are.

We've defined what a super cycle is. We're obviously in the AI super cycle. And what I think makes this the greatest super cycle of all is how much it will impact every aspect of our lives. The smartphone was the previous one that impacted every part of our lives. But the PC didn't, right? Cloud computing didn't. They affected a lot of our lives, but not every aspect of our lives. And people, you know, this would be the, I guess, the smartphone would be.

the one I'd say was the biggest super cycle along with internet of our lifetime. So we have those two and then this one, AI. What's going to happen, I believe in this super cycle is massive job displacement, the static team size, and then bionic, you know, augmented humans, you know, somebody with AI, being able to do the jobs of five or ten people, people who don't know how to use AI doing the jobs of instead of one person, one tenth of a person, right? So, okay, here we are. That's why I think this super cycle is the one to look out for it. Now, in a selfish way, as an investor, I'm looking at it saying,

if I can invest in and help, I don't know, 100 startups a year, maybe 200 even, if I get more ambitious and we have the quality there, over the next five years, if I can place a thousand startup bets, which I'd like to do in the next five years, I have to figure out how to ramp that up intelligently. In those thousand, I've got a good chance of catching, catching. In that debt, the next Amazon, Uber, Airbnb, Robin Hood, you know, let's call it a 10 billion, 100 billion, or maybe even a trillion dollar company. And so when investors look at a super cycle, that is what I think defines a super cycle.

And I think that's what makes this the greatest time ever to invest in technology companies, public or private, and the best time ever to start one. Yeah. So I agree with all of that. But to me, I think we're still underselling the point in time. Because everything you said is true, but I wonder if we're not going to see concurrent other super cycles. Like I think when self-driving cars give them three more years really reach a greater

level of market penetration, I think that could revolutionize how goods are moved, how people are moved, how friends move around, where we live, how we live. So I wonder if that couldn't also be a supercycle that could land at the same time as AI. And then, frankly, I would say fusion, if it works out. If we do get to net positive, you know? But I mean, can you imagine a world when AI is doing everything from robotics to, you know, AI SDRs? We have unlimited clean energy and the cars were driving themselves.

I mean, that's science fiction. I mean, it's science reality. Science fiction is always like the roadmap of technologists. And so here we are. I do think fusion would create a super cycle. Unlimited energy means unlimited clean water. Unlimited clean water. And heat means unlimited food because that's what photosynthesis is, is like, you know, light plus water.

So, okay. And so, and then robotics and AI combined. So I'd put AI as like a subsection of that would be free transportation or, you know, close to free transportation. And free fuel. Oh my lord, you're correct. There are super cycles coming that I think are going to, dare I say, change everything. And then the question is, how do you play a super cycle? Can you be too early or too late for it? The two stories I wanted to talk to you about today are to that really dovetail with the AI super cycle in a major way. Founders, do you want to sell to bigger customers? I know you do. You got to get that ACV trending up. And you want to push your turn down, right? Sounds good.

But to sell to those big buyers, you need to clear all of these compliance checks. You know that. That means you got to have things like SOC2 sorted out. What's SOC2? It's a standard and ensures that companies keep their customer data safe. And if you aren't SOC2 compliant, you can kiss those big deals goodbye. You're not going to land the lighthouse customers. You're not going to be able to operate at the highest end of the market.

But Vanta makes it really easy for you. To get and renew your SOC2 compliance, on average, Vanta customers are. compliant in just two to four weeks can take months without Vanta, and they automate compliance for GDPR, HIPAA, and more. So you could sell to bigger customers in whatever markup your startup is going after. Vanta's going to save you hundreds of hours of work and up to 85% on compliance costs. Stop slowing your sales, team down, and use Vanta. Get $1,000 off at vanta.com slash twist. That's Vanta.com slash twist for $1,000 off your sock, too. Yeah, let's start with SB1047. So if you have been under a rock for a long time,

character? That's a Star Wars character. I think it was in the Empire Strike by. Yes, it was green. It was shaped as three balls stacked on one on top of each other. No, it's a bill. It's entitled the Safe and Secure Innovation for Frontier Artificial Intelligence Models Act, because everyone knows that people who legislate are great at naming things. Jason, the news over the weekend is that SB 1047 in California was vetoed by Governor Gavin Newsom. And up went the fireworks. But take us behind the scenes. What was the reaction? on your group chats that we don't get access to? Basically nothing.

People have come to the conclusion that our government is captured here in the United States largely and that the winning hand is going to be no AI regulation. In Europe, probably be the opposite. There, you know, you have, if anything, business is captured by government in Europe and it'll go the opposite way. So I think it would be a tale of two cities. Yeah, I think that's right. So I want to go over a little bit of what happened, why we're afraid,

and then we're going to wrap the section with what it means for startups, so stick with us here. Jason, how much about SB 104-7 should we tell people? Should we give them a rundown of what it was going to do and the concerns about it, or do you want to be a little bit faster today? Well, I think we should explain maybe the top two or three concepts of how they were going to throttle, monitor, AI, because there are fears that people have.

And the fears should be real. The fear of job displacement is obvious. We're going to have on 1010, the Robo Taxi from Tesla. We have B.Y.D. Waymo and four other companies partnering with Uber on automation. So the idea of being a taxi driver or a truck driver is going to radically change in our lifetime. And it might change in, I would say, between five and 10 years, depending on the jurisdiction. So that's very real. Now, what the government should do about that, if anything?

I kind of wonder as a libertarian-leaning kind of person, like with coal workers, I kind of feel like it's a small number of people that drive a lot of votes. Maybe, you know, in society we just say, here's, you know, when these markets come apart, just here's some training maybe. And if you choose to take it, you know, here's $5, $10,000 worth of training. a nice thing, a mitzvah for the government to do. But otherwise, you have to be responsible for your own future and see that coming and make changes in your career choices and or spending as an individual, right?

Like, this is part of living in a free dynamic society. I suppose to a protectionist society. So anyway, let's go through the top two or three things. The fears are real. I don't think the fear of like, they're going to come and kill us is real. I think that's like the 1% science fiction 10, 20 years from now. but I do think the job displacement is the one that unions and individuals should actually realistically care about.

Well, that, I think, breakdown is why some people were opposed to SB 1047, because this is the bill all about catastrophic risk. And so what that means is what they call critical arms. It was talking about, like, avoiding AI systems, helping create WMDs that result in mass casualties or mass casualties and mass damage from cyber attacks. So essentially, this was the. bill that was thinking about the far future, the biggest models, and the biggest risks. And that is how it was set up. So one of the reasons why this bill was so controversial is that

it had a definition of essentially what models had to obey its rules. And those were ones that had computing that were built using computing power over 10 to the 26th integer or footing point operations or that cost $100 million or more to make. So Jason, you know, this bill wasn't about job protection. It wasn't about rescaling. It wasn't about UBI. It wasn't about the stuff that I think you and I really care about, which is people. It was about trying to put some guardrails in place to prevent AI from the future from becoming Terminator. And that's what I thought was kind of silly, because it felt like it was waving at a future that we should maybe be afraid of and then trying to harm the president to get us there. And the way it did that was essentially adding civil and

criminal penalties to companies that make AI models over a certain size, if they did not follow the rules, preventing misuse of cover models, building kill switches, filing lots of paperwork, showing code, listing where they got data and so forth. So there's a lot of regulations for these large models.

And now, no. Yeah. So if you were to regulate large models in California, and California is on the vanguard of creating regulations and creating new trend. So just having been a California resident for, I guess, maybe close to 20 years of my life, and a New Yorker for 30, and now coming from the proud hill country of Texas outside of Austin, what I'll say is, you know, California is beautiful in that, you know, yoga, crystals,

organic food, you know, a lot of trends start here. And you can goof on it, but that part of the freewheeling spirit that I loved about California. It accepted anybody, even to the point of absurdity. I want to be recognized as a puppy. You know, like, literally we'll have regulation that, like, people who think their furry animals need to be protected, right? It's, it's lunacy. You know, you might put it under woke. I thought it was kind of comical until maybe it wasn't. But, you know, it's great that we got yoga. It's great that we got meditation. And people would take that seriously and be part of the avant-garde. And then on the East what I found growing up, cynicism, right?

And then we just have to, and people would be cynical about yoga or whatever until they try it. And then 10 years after it's popular in the West Coast, it's popular in these guys. Putting that together, it's a long-winded way of saying, I think California likes to try, like, regulations and getting up in people's business in a very big way. Texas, Florida, live and let live, New Hampshire, live free or die. There's like lots of different flavors in our country. And so California's going to California. California. And this is obviously like kind of ridiculous to create all this regulation. I know some people like probably Sam

Waltman and Open AI or Microsoft might actually want this because it creates $100 million a year in legal fees or $10 million a year in legal fees that will stifle other companies. So or make it impossible for startups to compete because the legal bill would be greater than their team size. There's that big bill. So anyway, good wins to this one. Europe will probably have 10 times worse. And really the focus, I think, that the government needs to look at is what are we going to do if we have cataclysmic job displacement? And you know what? We had cataclysmic job displacement multiple times in our history. Wars, COVID, stock market crashes.

And we have this concept of unemployment. We have this concept of stimulus that we drop people. you know, $1,000 on people's heads like three or four times. So I'm not worried about it. If we have cataclysmic job displacement, we're a strong country with the ability to manage it. I do think it could create civil unrest, though.

I'll leave it up there. There's always a risk of that in the near term. And you know, it's what's funny is talking about this stuff. It's how broad the impacts of AI could be and therefore that's how scattershot the AI regulations are. So when Gavin Newsom vetoed

SB 1047, he also kind of flexed that he had signed a lot of AI bills. I'm not going to go through them all by name and number here, Jason, to save everybody. But they were working on things in California like not using AI to create child sexual abuse material. Good. You know what I mean? No cloning dead people without permission.

Pretty reasonable. Disclosing that an ad was AI edited. Reasonable. So there have been in California some nibbles at AI regulation, but to me, they land on the side of use. Do not misuse this technology that has been built. because that is the risk versus looking at the models themselves. And that, to me, was always the mismatch with this bill versus everything else.

Because we can sit down and say, hey, let's not let teens make sexual deepfakes of one another. For about 8,000 different reasons, right? No one's really going to be posted. Except for the most hardcore libertarian, but there's like seven of those. So we don't need to worry about it too much. But to me, the idea of regulating at the model level was a big mistake. I think, by the way, that's like a really great point that I didn't even get to, which is, you know, Esther Dyson,

who was like a mentor of mine when I started in publication, she had a publication release 1.0. She always made time for me. Thank you, Esther, for that. And, you know, it really informed a lot of how I think about technology reading, Release 1.0 that she did with Jerry McCalsky and her. And, you know, she said, you don't have to use this technology. You could opt out of it.

If you disagree with what the company's doing, and you could not buy their product. So if you disagree with Ced Oil Hills, or you disagree with Microsoft and, how they're running things. There are alternatives vote with your dollar. And then the second thing she had said to me at some point was, are we going to blame Volvo when a bank robber steals a Volvo and robs a bank?

Or is there like another place to put the blame as opposed to Volvo? And so, you know, that analogy is a really good one until it isn't. You know, if somebody makes an AI drone specifically designed to target a person by photo and murder them by attaching a gun to them, you know, okay, slightly different. But the drone and the gun, you know, that you use for hunting or they use for making pictures, those people maybe shouldn't be at fault if a lunatic puts a gun on a drone. I'll just, you know, end my TED talk there.

But I do think you're right. And it is one of the arguments I had with Lena Kahn. I love when Lena Kahn takes action against specific things. Like, I don't know, the app stores are a good example, the tax and apps. stores or bundling, those seem like really interesting tactical things to go after. Philosophical things, I think you get yourself in trouble, right? Because now you're kind of like philosophically, I want to stop technology and progress or philosophically, I don't believe people should be able to own a firearm. Like, it just kind of shuts the discussion down.

And that's why I wanted you to just break down tactically like you did wonderfully here. Are you looking for an unbeatable deal on senior talent? Well, if so, You need to look outside of your borders. According to G2, cloud devs is the best place to hire top Latam talent. That's Latin America, a market with millions of developers. Cloud Devs is the largest pool of Latin American talent with over 10,000 senior engineers who are rigorously vetted for communication and problem solving skills. And now Latire by cloud devs can even fill non-technical roles.

Very interesting, from accounting to graphic design, with elite Latam talent. Giants like Coinbase are choosing CloudDev's because its talent is matched with your time zone, and it's up to 80% cheaper than a local hire with the same Silicon Valley standards. So here's your call to action. Because they're such big fans of the show, CloudDev's offering Twist listeners an exclusive pay-what's-fair deal. Instead of their usual fee, only pay what you feel the talent is worth for a limited time only and exclusively for our listeners. just go to clouddeves.com slash twist to pay what's fair for your next five-star hire. Let me grab just a couple of quick things before I move on.

First of all, we have a tweet from Martin Casato from Anderson Horowitz. I just want to show this to point out the tone of many VCs who were very public about this bill. And of course, Andrews and Horowitz, major investor in AI companies. So Martin says, unbelievably grateful to Gavin Newsom for doing the right thing and vetoing SB 1047. This is the path to sensible AI policy and maintaining California's global leadership. I liked that. And then I'm going to grab one more. AI funds, Andrew Ng, he also the co-founder of Coursera, made a very important point, Jason.

He said, looking ahead, let's keep on protecting AI open source and innovation. And one concern that people had was, okay, so these rules that SB 1047 would have put into place with penalties and regulations and boards, all we were aimed at for-profit companies, it felt like. So what do you do if it's you and I passing, you know, code back and forth on GitLab or GitHub? Who's in charge there? Who has to report? Yeah, who's responsible? Yeah. And people were worried that it was going to chill the heck out of open source AI development.

Well, now we don't have to worry about that. And I think that's good for startups because it means they don't have to go pay open AI for access. They can just fire up a llama model and then run it themselves and off to the races. Which I encourage them to do, by the way. Finish your thought there. Well, finish your thought, and then I'll tell you why. Well, I'll just say that we now have a competition in the market between the for-profit AI companies and the open source market.

And what happens with more competition? More good products. So we're going to have greater vision, greater tension, more competition. I just love it. I think this isn't that good. But why do you recommend open source? Yeah, I was going to say it would be really great for the startup community to build everything with the ability to unplug and plug into the open source community.

and that's what I heard from a lot of folks building startups. We're using chat chippy T, but we expect to be screwed by them. This is like the private chat. So we don't trust certain people at OpenAI to be reliable and in the way that people don't trust Zuckerberg, right? And if you look at Zinga, you know, Mark Pinkis had his business destroyed by his quote-unquote friend, Mark Zuckerberg, who was like, like, yeah, you know what? I'm just going to destroy Zincapok or Farmville. And then they have to pay us if they want people to play that game. And then you had Mark Zuckerberg talk about how bummed out he was about the Apple changes and how he had to be subservient to the platform of the iPhone. And I tweeted like how ironic that was considering he destroyed Zing and countless other startups to which Mark Biggers was like, how does it feel Zuck to be Zuck? And so you don't want to get Zuck.

which rhymes with another word. And you don't want to get Altman, I think. And that doesn't mean I, you know, think Altman is not trustworthy, but a lot of people have said to me, I don't trust Sam Holman with my business. And I wouldn't limit that to Sam Altman. I think any platform you should not trust

if it's a closed platform. And that's why about 60, 70% of the people who are building with ChatGPT in a study recently that was shared with me said they were planning, on moving to open source when open source catches up. The way open source is going to catch up up is when brave people say, you know what, I'm going to give up the six-month lead that I get with Chad GPT and I start investing in the open source project. So this is a great mitzv that Zuckerberg has done for the world in taking a very powerful model and making it open source. So please support

that and then make sure he doesn't put any cuffs on it, right? Like these open source projects, so it was a little flare up between WP Engine and WordPress this weekend. There can be some kerfuffles here. There's another kerfuffle going on with a YC-backed company that forked an open source project and got funded for it and was like, it's our project now, bitches, basically. So there can be little kerfuffles in the open-sess world, but generally you can fork your way out of them

if you don't like what the, you know, the leaders are doing in those process. project. So please support open source. I think I saw this. Was that the company in the latter case, Pair AI, which is being built by the guy frying pan on Twitter? Correct. And I guess it, you know, he basically, YC funded the project. They forked it. And I guess there's like a smoking gun of a tweet where he says it's like, this project's ours now. We're funded. We're in YC. So it's just like, listen, we pick founders because of their effervescent nature. That's a, that's a, that's a, that's a,

kind way of saying they're lunatics. In the best instances, there are lunatics who will do whatever it takes to win. That's what we're self-selecting for folks. I'm sorry, I have no Fs left to give. I made my money. I'm more famous and have more influence than I ever thought I would ever have in my life. I'm just going to tell it to you straight here. Founders are selected by Y Combinator, by their ability to break rules.

And I don't want to say commit crimes. But being a rebel is the goal of coming to YC or even our programs. Now, that doesn't mean we endorse breaking the law. No. But it does mean that there's a reason why they put Sam Altman in charge of Ycombinator. Y Combinator and Paul Graham specifically likes the rule breakers who you have to go clean up after. And in my personal experience, when I knock stuff over, sometimes Sequoia had to come. and clean up stuff that I did in the market.

And I think we kind of like people like that to back because the people who are trying to be like or follow the rules generally do not go as far as the rule breakers. I think Steve Jobs made a commercial. Thanks for coming to my tent. Yeah, yeah. Well, also, it reminds me of a really nice quote

that, you know, I think has been shared widely, which is well-behaved women rarely make history. And I think that point is definitely made in a feminist context, but it applies very specifically here. If you are well-behaved, the best you can become is a VP at McKinsey. There you go. I mean, you know, Airbnb's like, okay, you can't have a hotel out of your house, but nothing says you can't take a donation from a friend for renting them your couch.

There you go. Okay. Let's take it to court and find out. And that's how society moves forward. So I have a high tolerance for the rule breakers, benders. Yeah. I don't want people doing unethical fraud. That's like where I draw the line.

and I deal with that one out of a hundred. I probably had four instances in my entire career. I put one or two of them in the book angel. I'll put three or four of them as composites. You know, I make a composite like here's a little storytelling time. Yeah. Of those. But man, I see people like literally commit what I would consider and the SEC would consider

or attempt to do things that I would consider just outright fraud. like fraud in Delaware court system, fraud by the SEC. And when you're a shareholder in those situations, you've got to extract yourself, right? So important discussion to have with your mentors in the space of, are you bending rules, are you reinterpreting rules, are you committing fraud? And generally, the people committing fraud are just bad actors who know they are.

The people who are bending rules are trying to move society forward. And if you can always tell, you can always tell by what's that a term? It's a Latin term, like, key benefit, who benefits? Quabono. Quabono. That's my Italian Latin, C-O-C-U-I, space, bono. Who benefits? Yes. Who benefits?

If the public benefits, because Lyft got you a cheaper ride and they created the category of ride sharing and sidecar, those two really get credit for it, not Uber. They created it first. Uber reacted to it, actually, when I interviewed Travel. at the All In Summit, he actually talked about that. And the second is like Airbnb, who benefits? The homeowner and the guest benefit. And then you're like, oh, I guess there's a little marketplace fee for Uber and a marketplace

fee for Airbnb. But in context, it feels like they benefit last. And the consumer and the seller benefit first and foremost. Yeah. I think we can do a naval-based summary of your point about founders. So no one wants to back someone in the Navy because they're process old-fashioned top-down, blah, blah, blah. And you don't want to do a full pirate because they don't care about the rules and they'll just sink your ship. Maybe like an aggressive privateer, you know, like right, right down there, you know, definitely out there for the gold, but knows that it'll follow a rule or two and therefore you won't end up in a fraud situation.

Boba Fett. Boba Fett is not taking on the empire. He's not taking on the rebellion. He's picking up packages. He's delivering them to the highest bidder, whether it's Java, whether it's North Vader. And that's it. And he's done. He's going to do a couple of jobs.

I need to watch the band, Lord. I still need to watch that show. Can we just do a quick sidebar on OpenAI? Because you brought up Sam Alden and all that. So I have a little argument that I want to throw at you. I think it can be argued that Open AI is cheap at $150 billion. And the reason why is Reuters reported that. that the company, now at a $3.7 billion run rate,

expected to have $3.4 billion in actual earned revenue this year, not as a run-mate calculation. The company says that it expects, and this is per their reporting, $11.6 billion in 2025 revenue, which against a $150 billion valuation is only about a $13x next year's revenues, which isn't that expensive. I don't think for a company that's going to grow by over 200% in the next year

if it hits its targets. So to me, I kind of get the number now, Jason. The thing that I'm confused about is how do they expect to grow by like, what, $8 billion next year if you and I both think that open source AI models have as much traction as they do and will have in the future. So if they hit their numbers, cheap, if they don't. Yeah. So I'll give them a node quote. Those are just details. He said that like last year was all in some.

When we interviewed him, when I was asking him about the nonprofit versus It's like, those are just details. Well, details are what matter. I think I'll give you the bull bear case, according to me. The bear case, I think is that Siri, Google search, Android, and browsers, and social media apps are going to intercept 90% of queries, 95% of queries. And that the only people who are going to go to a dedicated AI at, like Chat ChbTs, which you and I are addicted to and I use all day, are, you know, just really high-end users. And that those products will be free by big iron. Amazon, Meta, Microsoft, and Google can afford to give those products out for free.

and what they said about the user base of chat GPT is that when they allowed people to use it without logging in, their user base went bonkers. Which is Google, right? You don't have to log in to use Google. So they follow Google there. I think what's going to happen is we might experience peak consumer usage of chat GPT during this time period. and then people will say, why am I paying

$20, $30, $40 a month for this when it's built into my iPhone now. You and I will not. Because $500 a year to do our jobs better and corporations might not seems like a pretty good deal. And I actually pay for the professional version for everybody on our team.

So we're paying $20 times, I don't know what the corporate is. Maybe it's $30 a month, $600. I'm probably given $7,000 a year for our small firm to use Chatshap. and I would never stop if it was but 10% better than the other products out there. Mass consumers, however, do not pay for calendar apps.

It's true. Or email. They don't pay for calculators or flashlights. They don't. They don't pay for notepad apps. So when people pitch us those, we're like, what's your plan here? And they're like, well, we're going to be like Evernote. And it's like, okay, you, Evernote had its window.

But, you know, people saw like an easy-to-use. use notepad in the cloud, and then notepad on your phone became part of the cloud, and everything else became free. So yeah, I think the API calls for OpenAI are going to, are 70% of the revenue, 80% of the revenue according to reports, and the consumer fees are 20 or 30%. Yeah.

So I think they're an enterprise company, and their partner is Microsoft for Enterprise. And Oracle, Apple are not going to give their business to Sam Altman. And I think you're starting to seek cracks in the Sam Altman dealmaking, which, let's be honest, you might be the Barry Della of our generation right now. He might be the Mike Ovitz of our generation to the point at which it's almost comical, right? Like, people are like, my God, is there anything this person can't convince somebody to do he convinced Elon must to give him $50 million for a nonprofit?

He had absolutely no problem flipping it into a poor profit. He has no problem going to the Middle East and saying it's going to be $7 trillion. He apparently went to T. SMC and all these incredible people and said, yeah, I just need like $7 trillion to build 30 fabs. And they're like, who's this podcast, bro? It's become like almost like a meme. Like, hey, this guy could come in and just literally take your shirt off your back and you would give him 20 bucks and get sunburned.

And then he would charge you for like sunburn lotion cream after doing that. So shout out, Sam. He's incredible. But that can only take you so far, I think. And I think we might see the limit of that. Apple is not participating. in the Open AI funding, I read, and then Apple had chat GPT and their Apple intelligence.

Yep. Okay. I think Tim Cook came to his senses. We'll use you. We won't give you money. We'll use you. We'll learn from you. We'll use it as a bridge.

But ain't no way we trust in Open AI. You lose that many team members. You do all this Fugazi behavior. These big, iron providers are going to, I think, rethink their relationship with specifically Sam. Yeah. Because I don't think they trust him. And I know the startups don't trust them.

So, wait. I mean, trust matters. Yeah. Jason, is this the bull case or the bear case? I don't know where I was. I think it's the, I think it's like the bull case for Sam's like the greatest dealmaker of the century and the bear case for when you can take that too far on life. Okay.

I do think they'll be one of the top three. players, but I do think Microsoft, Google, and Apple, and Amazon, and Oracle are not going to empower Open AI any further. I think they're realizing they may have created a monster. Okay, we all want to build products that users love, and we all understand in the startup game, it's product market fit. That is the goal. But increasing conversions and boosting engagement, well, you've got to really understand your users in order to do that, right? And that's something you're not going to get just from analytics. Well, let me tell you about Sprigg. It's a product experience platform that generates AI-powered opportunities to continuously improve your product

at scale. Here's how it works. Sprig captures your product experience in real time, and they do this with heat maps, replay, surveys, and feedback studies. So you put all that together, right? You're seeing where people are clicking, you're watching how they're using your app or your product. Then Sprig's industry-leading AI instantly analyzing. all of your product experience data to generate real-time insights, providing actionable product recommendations. That's going to allow you to drive revenue, increase retention, whatever your goals are, and most of all, improve user satisfaction with your product.

So, see why top product teams at Figma and Notion are already using Spriggs AI to unlock new opportunities at scale. Visit sprig.com slash twist to book a demo and get a $75 gift card. That's sprig.com slash twist. I want to ask this question, flipping around kind of what you're saying, is it possible to build the next trillion dollar technology company

without owning your own iron? Can you build a trillion dollar company based off of someone else's data centers? Not in the short term, because all the iron's been accounted for. So in this window, in this game of Thrones, you have to have the coin

to buy the most dragons end-or scorpion, you know, things that shoot the dragons down, right? This is a game of dragons, a game of tanks, a game of, pick the arena. You know, you either need to have the best gladiators, the best battleships, the best fighter planes, whatever it is. And in this battlefield, that happens to be data centers. And so whoever has the energy, the nuclear power plant, the Nvidia chips or other chips wins.

And I think the key thing to look at here is, I think Sam might get outgun because if you, they're losing $5 billion a year and they're making $3.5 billion. Now, that's according to reports. Yes. Sometimes people get burn rate and spend confused. All right. There's three numbers when you're looking at a startup. Revenue. Spend.

You do the math on those two numbers and you get to your burn rate. they're saying they're burning $5 billion and they're making $3.6 billion. Am I correct? In what the press reports are? 3.7, but let's not fight about that. But yes, you're in the exact ballpark. Okay.

And they say the burn is $5 billion. Yep. Burning per year, $5 billion. They're raising $6 billion or so, $5 to $6 billion. I don't know how much cash they got on them. This startup might have a less than a year of runway. Is that what I'm reading into this,

that they have three months of runway? six months of runway, and they need another $6 billion to make it through the next year? Is that what's happening here with Open AI? Depends a lot on how fast the revenue ramps. And we are dealing with run rate numbers and we are also dealing with expected end of year totals. Okay. So we've confirmed 3.7 million run rate. We've confirmed losing $5 billion, according to press reports.

We've confirmed this is going to be a $5 or $6 billion raise. yes how much cash is left in the bank would be the the question you want to ask and if they're burning let's say five six billion they're burning holy cow 500 million a month just under that's a lot of money so if you're burning 400 million a month and they have a thousand employees those thousand employees or two they have a thousand employees i think is the number the last i heard was 17 hundred okay so two thousand at 500,000 apiece, you know, you start doing some math here for the first billion. That means $4 billion in data center, electric, legal, whatever, but let's just call it for. Maybe a billion in salaries and comp for that team. They were incredibly highly paid, which I think they are. And then you put $4 billion for, you know, a big iron, which makes sense because what's Nvidia's revenue back in video's revenue into, you know, one of their,

biggest customers, XAI, Microsoft, Google, Apple, these are all the big customers. So I think there's like an exit, I'm not going to say an existential crisis here, but they're having a hard time keeping up, I think. So I would read these numbers slightly

less worriedly. And here's why. The company was so much smaller at the start of the year in revenue terms that presuming they had a similar amount of compute costs, they were burning way more capital in January than they were in July. So I think their pace of losses should decelerate. And given their expected growth, I think also we could see them become on an operating margin basis quite a lot less unprofitable.

That said, even if they cut their burn in half, burning $2.5 billion a year is still $200 million a month or what is that, like $6, $7 million a day. It's still an enormous amount of money. So I don't want to diminish the burn. I just, I would be shocked if they're still at that pace of burn at the end of this calendar year. And with that much money in the bank, they have probably more than 12 months of runway. But I wouldn't say it's more than two years. Unless they need to increase their spend to keep up with

Amazon, Microsoft and Apple and Google, I have a feeling that they need to increase their spend. So your theory would be correct. Yes. If they didn't, you know, that the revenue is increasing and they're not going to spend as much on data center, right? So you have these two lines, revenues increasing, right? And then the cost of the data centers, which is the cost of this business, right? It's not the 2,000 employees, really. It's the

data center cost, which is a new experience here for startups. And this isn't really a startup if they're making this much money. So, you know, I think this could be a serious challenge. Let's say they do have to invest another 10, 20 billion in data centers, which I think they do at a minimum. If they've got to invest another 20 billion in data centers and they're at 150 billion, the $6 billion they're raising right now is only diluting them 4%, 5%. If they raise $20 billion at $200 billion, now they're diluting 10%. Yeah, I don't, this cap table is going to be fascinating to look at. But this is a lot of chaos for one startup.

to be dealing with concurrently. All these people leaving, lawsuits, competitors, cash crunch or massive investment, one of the other, you know, or both. And open source. This is high stakes. This is a high. I would not make this investment. Yeah.

No, you said that before. Which is why I wanted to bring up the new revenue projection for next year. But it's interesting because we were talking about. you know, can you build the next trillion dollar company without owning essentially your own mass network of data centers and several nuclear power plants? The answer kind of feels like no. And to me, what that means is that the ownership of digital brains, data centers and power, which is just heat, essentially, boils water, makes steam, spend stuff around, but it's always the same process. It's basically heat and smart sand. If you don't have mass capacity for those, you're kind of DOA.

And that makes me kind of worried about startups, because a lot of them are their cloud dependent from day one. So how can they really challenge the big iron companies if Big Iron itself is so big? The answer to the question is they're not going to compete with them on this battlefield. This is not the arena that they will compete with them. Just like you don't see startups competing in the arena of hard disks or storage or cloud computing. Like when's the last time we had a cloud computing startup? of like the last volley was like

rack space 20 years ago, right? So the arena is not going to be storage or data centers. It's going to be verticalized apps.

And if it's true that the open source movement is working, taking open source and having proprietary data and building something very niche and bespoke,

I think, is where startups win. Just like YouTube and Dropbox did not win based on their hard drives. And Dropbox tried, right? Dropbox built their own data centers. They thought that would be a

technological advantage and they could never use Amazon's S3 or whatever. And they wound up, I think, doing exactly that and getting rid of their own data centers eventually. So there was an argument. This argument reminds me of like owning fiber, like Google was going to own all this fiber. Google was going to own, you know, and other purple people felt they needed to own the hard disk space. YouTube didn't, Dropbox did. So, yeah, I think this all gets abstracted away and commodified very quickly. And that's the other

danger for Open AI, is they need to make money off of these products and services. Microsoft and Google do not, and Apple certainly doesn't. So Apple could take all the margin

and Apple intelligence is free and they use Lama and they join forces with Facebook or they buy some small anthropic-like company, and they start their own open-source project. And all Apple needs to do is make Siri work for what they said it would work for for the last 10 years. And I think they intercept half of all AI queries.

Right. And then the question becomes, do they build a competing search engine to what Google has put together? Because why would you share when you can have it for yourself? I know there's a lot of money involved, but long term, I think you'd rather own more of the consumer. then own a near-term portion of Google's cash flows. And to add to that, there's a legal case that the default that Google has, you know, is an antitrust issue.

And that was my prediction here on the program was eventually Apple will have a lightweight search engine. I believe they should just buy the brave search engine or duck, dot go, or both. And those are tiny little tuck-in, you know, under a billion dollar acquisition. that would be transformative and they would be good for competition. So if you're listening, Lena Khan in your last 90 days, oh wait, you're out of here.

Your last six months. I hope she gets a job in the next administration just because I want to see the blood vein your forehead explode on camera. She's going to be a guest on here. I guarantee she's working for Indreason Horowitz. I'm calling it now. She will be accepting a job at Indrisen or Founders Fund

or I'll give you the here's my odds. Why? Combinator and Drison founders fund. One of those three she'll work out. I would, uh, 80% YC, 10% and Dresen, 5% founders funded and then after that, but I think it's going to YC. A law firm.

Hasn't she gone to YC twice already? Yeah, she's, she's getting up in YC. I think she wants to be a partner. She's young. She's in her 30s. She hasn't made money yet. I love when you say that. I love when you say young in your 30s.

No, no, no. You're closer to 40. She's closer to 30. So you're very old. Very old. And look at yourself. Look in the mirror. I mean, you're a dad.

I saw the pictures of you running around with that baby strap to your chest. It's super cute. You should have seen how much baby spit I had on this part of my body in the last 24 hours. It's been. Nothing like dealing with baby liquids all over your body, all the same. Dude, yeah. We don't have time to go off topic about it. I've had way too much baby liquid in my life.

So Bloomberg has a story talking about AR and VR and VR and headsets and efforts, Jason. I'm a long-term bull on AR and VR, but a short-term. term pessimist, but it seems that the winds might be changing. So we have some clips coming up, but start with why this story is buzzing in your bonnet. Well, false starts, as we've talked about, are part of technology. And so we've had a false start on AR and VR. And I thought I would take folks to the graveyard of startups because there is an important thing with timing. When you are going to be part of a platform revolution, whether it's AI or its augmented reality, event or virtual reality, consumers have to be ready for it.

The platform has to be ready. So if we were to look at, for example, AI, there were AI startups four years ago using chat GPT like 1.5 to 2.5. And some of those didn't survive to get to chat GPT 3.5 and consumers embracing this technology and the technology not spitting out garbage. And so here we are. You can do something like tax GPT. or any number of generative AI startups or co-pilots,

and they actually work well enough that people are willing to pay for them. Congratulations. The timing of that from inception and the platform being built out seems like it was about 36 months. Okay, let's compare and contrast that to ARVR. Augmented Reality. I used to do a conference with TechRunch called TechRunch 50. Here is a company called TonchiDot that made a camera.

And when the first iPhone added a camera, they demoed this demo. If you haven't seen it, we'll just gonna play the video here. And we'll go into the startup graveyard. It's very scary. Ooh, insert scary graphic here. And so here we go.

We'll play this video. And what you'll see is this video is really low-res because it was done, I think, 20 years ago at TechCrunch 50, the event I used to co-host, and I created with Mike Arrington at TechCrunch. He was a bombastic writer who we don't know anymore. if you're a young person, but here's the iPhone.

I'm sure. Original? That's the original, I think. That's the original, yeah, with the hard thing. So you can see the original iPhone was the pack, was the size of a pack of cigarettes or an iPod. And let's just hit play here, and we'll pause it when I say pause, but you got somebody going down with the Sikii camera,

and this was ToneShed. This is from TechCrunch 50 in 2009, 15 years ago. And you see he's clicking on items. on the menu in a restaurant and getting like a Yelp-like experience. Yep. And it's augmented reality without glasses. And then, you know, he's looking at things in a museum

and seeing the details that would normally, you know, be on the Wikipedia page for a piece of artwork with his phone. And so, and then here the great example of like, I'm at the subway and I'm trying to get information. So this startup, 16 years ago, 2009, 15 years ago, and they're talking about like how the technology for shopping would work, et cetera. And the really cool feature was you could post an audio comment on anything in the real world. So if you saw, I don't know, let's say you were at a monument, you're at

the Eiffel Tower and you want to just leave a message. You can leave a message there for your friend was the idea. When your friend comes and they would get an alert, hey, I left this for, you my friend at the Apple Tower. Really weird idea. But here we are. This is from the startup graveyard. You would leave messages. So remember,

this is during the social revolution when messaging was like a big deal. Like Twitter was a, had just emerged in 2009, Facebook, etc. And so no keywords, no search. You just watch the world

was what they were saying at the event. And you could leave messages for your friends. That was a weird one. Or you could leave items for your friends like a a little teddy bear almost like an emoji. So that was seek AI, seek AI camera,

see the AI in there. And it was by a company Tonchi dot. And this video of them presenting brought the house down because it was so revolutionary. Were you there by chance? I actually was there because I remember Red Beacon winning and they had the cupcake delivery during the finals pitching. And I think this is the one that Bing sponsored all the bars and didn't card me and I

blacked out on the way home. Oh, okay. Anyways, to be young and stupid again. It's a different era. Oh, for me, especially. Yes. A little baby, dumb Alex, don't take him seriously. But the point is, I remember this demo line.

And I do remember it bringing down the house and people were so excited about it because it was a way that melded the digital and the real. And it felt like finally there was going to be a stitch between them and your phone was going to, I guess, mediate this, we'd say now. Yes. But it was a fusion of two things that had been distinct before and people were hype. And then we never talked about it again. And then we never talked about again.

And then Google Glass came out shortly after this. We'll show a picture of Google Glass at a moment. And then we had this demo at LeWeb. Leweb was a conference my friend Luique Lumer used to do. It was originally called LeBlogs, and it was in France. And then it became Leweb, which became like the TechRange 50 of Europe. And so here we'll play. And this is ARNAV, an augmented,

reality started from the web in 2011. What you see is a tablet. These Android tablets became a thing. And the concept was you would hold up your tablet. And here it's showing you in Hipp light, walking through little squares as if you were in a Tron light cycle. And it's giving you augmented instructions of Google Maps. And, you know, the dialogue here is kind of funny

because they're just talking about all the technological limitations. what's the processor speed in there? How does it work in this demo? But you can see the things that we now have on Apple watches or in Google Maps. And this is where they started, a long-winded way, again, of saying, you've got to time your startup correct. And so the question I'm going to put up here, Alex, is, these chunky glasses, Apple goggles, are now, you know,

the chunky AR glasses, that Apple showed are not available. They're outrageously expensive. The ones, the spectacles that are made, here's Google Glass, and you see Mark and Drieson, John Doar, and the guy in the middle is from Google Ventures. You come to me in a second. Yeah, I know him as that guy from GVAs to talk to.

Bill Maris, I believe. Somebody will fact check me there. And here they are. Google created a $100 million venture fund, and this was the announcement of it. And they all wore these glasses. These glasses just had that little thing that a little object on the top right, as you can see, that would project into one of your eyes some like alerts. So just imagine like the notification window being there.

So you can leave these on and it would give you notifications in the real world, like Google directions. So this was a stop along the way. Google got it right. Tonchi Doc got it right. This navigation, they all got it right, but they're no longer here. And so a big part of running a startup is having the run. runway, the fortitude as the founders, to survive long enough for the revolution to arrive, or to be smart enough to sell your company and cash out before, you know, you run out of money,

which Oculus actually did that, my good friend Palmer Lucky, a friend of the pot. Palmer sold Oculus, you know, really for a couple billion dollars. Would that company have survived on its own? Well, Magic Leap? No. Did Magic Leap survive? I don't know. No. Okay. So this is back to the the big boy and the big girl game, right? The big table. This is the big poker table. You're going to have to have $50 billion, which is what I think Metis spent on these things so far. And I'm sure that's what

Apple spent 10 or 20 billion on their goggles. And we're still five years away from it being a reality. So the question for you, Alex, is, and I'll just get your general reaction on the story. brave your concept here in your memories of it is now the time to create apps for AR. I want a three-month mulligan on that question to see how the new Quest 3S headset sells. So this is the new meta headset. And the reason why I care is it's $300. Which is finally at that kind of like high quality, low price combination that I think the

AR VR world has been waiting for. And now, Oculus definitely more VR than AR. but it's funny how much of stuff that is amazing isn't always a great business and if you recall the Google Glass Days they had the little translation app and so you could look at a street sign and it would auto-translate it for you.

I got to play with that. blew my mind. I also got to play with the Microsoft HoloLens, which was AR, blew my mind. And I never got to play with Magic Leap, but I'm sure I would have loved it. And so it's funny how so many things

that I don't like to use, like concur, kind of just like stay alive in the world of technology and some things that were so great didn't quite make it. But I think we've now reached the point when the hardware has gotten good enough, there's enough good apps. I don't want to shoot myself in the footness.

I'm going to clip this in five years and mock me. But yeah, I think we're probably about the point when AR and VR are going to have enough consumer buy-in to be worth building on top. Yeah. So here we are. And, you know,

there was a little mini VR revolution when Oculus got bought by Facebook and everybody thought, well, now that's part of Facebook. and he's gone all in on it, there's going to be a billion people with these headsets, and therefore,

if I capture 1% of a billion, I got 10 million people paying me, whatever, $10 a year, a month, whatever. And, you know, that's obviously not happened, but there are some number of people using this technology every day. It's nowhere near smartphone penetration.

So then I guess the next question for you, Alex, is, do you want AR glasses? Do you want, when we're talking here, notes coming up, instant messages coming in, your door dash order, your Amazon arrivals,

all kinds of notifications, the Nix trading for Carl Anthony Towns coming in on your glasses all the time. Do you want that future? Do you want to be with your baby wearing your glasses and having, ding, ding, ding, ding, ding, ding,

while you're looking at your baby. So look at my wrists. There's no longer an Apple watch on them. I didn't charge it one day and I took it off and I just said, this is better. Because do you know what I got was every single slap

you sent me would ping my watch. And it was so, so annoying. But I was, I was a new employee. So I was trying to make sure that I was super engaged and responsive and all that. But what it did was just make me anxious all the time because my watch would do like substack notifications and emails and Slack and back. Too much. Go away.

I think that if we allow the notification creep of the current mobile world to persist into AR and VR, it's going to be a garbage technology. I don't think we should take the existing model and put it over there. But when it comes to unlocking the world for me as someone who only speaks a couple languages, awesome. As someone who likes to game and wants to have a better, bigger screen, awesome. There's a lot of things that have worked there. I just don't want it to become another slate for notifications, which becomes essentially an advertising vector as anyone who uses Uber Eats knows. I think it's really well said.

I do not want these glasses in society. Oh. And I've given it a lot of thought. That's a big statement. Come on. It's a big statement. I think the reason I object to these most is that right now, we are just trying to come to a reasonable amount of manners for looking at your phone.

So I was at dinner, and I was at the Mineta Tavern, very nice place. And when I went to New York for a couple days to see my dad, shout out my dad. and I was, my friend, I had my phone on the table. And my friend said, would you put the phone in your pocket? And I said, okay, he said, it's not you. When I see your phone, it triggers that I should check my phone. And I was like, fair enough. And I put my phone away.

And then I am on the cusp. Now that I'm like really focused on my sleep with my eight sleep, I get my score every day. I'm really focusing on my sleep. because when I find I don't sleep well, and I get a low sleep score, 40, 50, 60, even 70. I'm just not as good on air. I'm not as good on email. I'm not as crisp.

When I get 80 or 90, man, I really feel the difference. So the eight sleep is keeping me accountable. And I took the dogs out of the bed. I took eating late at night out of the bed. I had a little more discipline with caffeine after three or four o'clock. And I'm getting in the bed earlier. And then the smartphone's the last piece.

and I'm actually thinking I'm going to do a weak trial of leaving the smartphone out of the room or in the draw or on the stand. My typical nighttime thing is to just listen to a podcast or an audiobook and it helps me go to sleep, but I'm going to try something else. My point being, these things are going to start this whole cycle over. It's going to be another 10 years of us being at dinner or being at the playground or being at a concert and everybody holding up their phones and recording each other. not just being in the moment. I want to be in the moment. There are specific situations like translating. There are specific situations like taking a picture of my kids.

There are situations like skiing where I want to know my speed and what the trails are. Or walking around Tokyo. I could see specific applications, but I literally don't want to live in a society where these glasses have a camera on them. I think they should be banned and the pendant should be banned in public spaces where people don't want them the same way, are. And I think that's where society will get to. If you're a bar, if you're a restaurant, um, if you're a school, phones should go in the bags on the way into school, just like they do

concerts, like in comedy halls. And I think these pendants and glasses, if you put them on, because if you take your phone out and you take a picture in a private club, so, uh, so whatever, you lose your membership. It's that simple. None of that. And then they also have like a time period where you can use your devices and you can't. So at the private club in the battery in San Francisco, their rule was that 530 laptops and phones could not be out in the bar area of the restaurant. Couldn't have them out. If you had to take it, there were phone booths you could go to. And it just made the place awesome to hang out at. And so anyway, that's what I hope. I've been to some parties with high profile people in my life where they collect everybody's phones at the door.

best parties I've been And so these glasses are going to destroy another generation's ability to communicate with each other and they're going to make everything miserable again.

We're going to have another live news show on, I think it's Wednesday, Jason, because there's a lot of stuff that we're not going to be able to get to.

But here's a hypothesis based on what you just said because I agree and I wonder if it's going to become the new way of determining class. Because if you think

about old clubs, You know, you had to be a certain person, certain lost name, certain socioeconomic status. Gender, ethnicity, caste system. Famously, what's the club in top of San Francisco on top of the hill? There were one that no one can join. No idea. By Grace Cathedral. It's like the-

They never let me join. Well, yeah, they said, no women, no Democrats, no journalists, which I thought was the funniest. Like, yeah, in that order? I don't recall if it was that order, but that's how clubs used to be, right? Now, though, you mentioned Soho House, you mentioned the battery. I would say slightly less impossible to get into, but with stricter rules about how you act kind of once you're inside. And I wonder if we're going to look at clubs as.

Oh, Bohemian Club. Thank you. Like digital deserts as a feature, as a purport. And there's a club nearby where I live called the Hope Club. And I was just trying to find the rules for it, but I couldn't find it in time. But I'm pretty sure they probably have a low phone policy at a minimum. And I wonder if that's going to become the thing people seek out. and really invest in because I don't want more pictures.

I know we're on YouTube right now, so ha, ha, ha. But like, I don't want more pictures of me and my family taken. I don't mind my face being out there because whatever. But, you know, I'm with you on this. And I think we will need new rules about it. But I want to make one last distinction. You're talking a lot about Google Glass style spectacles, what, you know, Snap is working on.

Metas more Raybonds. That stuff I am less bullish on than VR as a concept and a platform. And so I think I'm more bullish on immersive experiences versus augmented experiences. I'm the opposite. I think the VR stuff is for like a very subset of people who like almost like hardcore gamers. I think there'll be something that will emerge like hardcore gaming where you have a PC and you care about the weight of your mouse. I think that's VR. And I think AR is the version of casual games.

So I think VR is call of duty. AR is angry birds, plants and zombies. Okay, well, by, you know, Call of Duty famously has made billions and billions of dollars. So I'll take... Yeah, both are great businesses. Yeah. One of them attracts tens of millions of people.

One of them attracts billions. That's all. It's just different. It's just different. You slap an ARPU on that and we'll see who wins this argument, Jason. I don't know. Are casual games or... That's a great question because I haven't kept up with it.

I just made... Casual games or... what do they call them title A games or a title A is like your big games. I play a lot of indie games, but I think I actually made your point for you because casual games can make so much money that I wonder if their RPU isn't actually higher than hardcore gamers. And so that kind of makes your point. Arguing against myself here.

All right, we're going to wrap everybody. We're going to take one audience cue if we have any more. Fusion at HM asks, does Jason have horses now? Very important question. No horses. we are getting chickens. It's, we, we did plants and a compost pile. And now we're going to do chickens, donkeys, goats.

And then if the girls take to horseback riding, we have a, we have two horse barns on the property because there was a horse ranch before I bought it. So yeah. That's the one thing I've banned from my children is horses. Because I don't want to have to take care of them. I'm Sebastian Jason. Given the current hype around AI, what key characteristics should startups focus on to build a sustainable moat? I said unique data, but I'm curious what you have to throw in there.

I think data and user experience and brand are going to be the things that will define it. You can use an Excel spreadsheet or a Google sheet to do all kinds of project management, CRM, etc. Right? And so there are templates for Google Sheets or Excel that do project management and that do CRM. And then there's Salesforce and HubSpot. There's Notion. and there's Coda and there's Asana and all these incredible tools this 37 signals

what's their famous project map base camp so you know you can win by having verticalized software and I think luxury software which is superhuman kind of define the category is going to increasingly become a thing so if there was a version of Zoom

that was the elite bespoke version of Zoom. That had, let's say, 10 times the bandwidth per person in redundancy and, you know, just allowed for a crisper experience. And, you know, I don't know

if that would be the vector under which the speed or just had better quick keys and better features and better recording. You know, people might go to that. For example, there's something called Descript that a lot of podcasters are using now to build a transcript and edit stuff. Now you don't need that for,

transcription. You can use the YouTube transcript, but the Descript one's better. You can use editing software, audio editing software, whatever. But people seem to like to pay for Descript, which I would put in the luxury software category, even if the price isn't luxurious right now. So, I think brand matters. And I think U.X and design matters. And I think training data to your point really matters. And you don't need to, you don't need to be that much better than what's available for free. You need to build trust in your brand. I think a really good example of that might be some of the website builders. Squarespace is the perfect example. I've used Squarespace for over 10 years. They're a partner in the program as well because they knew I used it. When you use the Squarespace website,

like every year they gift you 20 new features. It doesn't change the price. They're just like, oh, by the way, you can sell content and memberships now. And I was like, oh, that's interesting. So you've added like a version of Patreon's, you know, software or whatever, you know. And at some point, you know, people just add features like this and you're like, ah, I trust that this is not going away and that they'll keep adding features if I need them. That's a really interesting concept, I think, for startups to think about. It's a really good question. So trust in the brand. I think it's also a question that every VC in the world is trying to answer right now.

and I don't think anyone has the absolute, you know, be all end all answer. All right, but we got to go. Friends, we got to get live news quite often. So if you're not following us on YouTube, like us,

subscribe us, hit the bell, I believe. If you're listening on a podcast app, we love you just the same. You're all fantastic. I'm Alex. That's Jason.

At Alex, at Jason over on X slash Twitter. We'll see you all soon. Bye.