This Week in Startups - TWiST News: Reddit Earnings, Apple Intelligence, and more AI money | E2041

Episode Date: November 8, 2024

This Week in Startups is brought to you by… Runway. Looking to up-level your financial planning Runway is the modern and intuitive way to model, plan, and align your business for everyone on your team. Sign up at https://www.runway.com/twist to get your first 3 months free. LinkedIn Ads. To redeem a $100 LinkedIn ad credit and launch your first campaign, go to https://www.linkedin.com/thisweekinstartups⁠⁠ 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 * Todays show: Alex Wilhelm joins Jason to discuss Apple’s on-device AI and its privacy implications, Reddit’s earnings, and Amazon’s multi-billion dollar investment interest in Anthropic with strategic chip conditions. They also discuss economic indicators like inflation’s impact on voter sentiment and what metrics will define success for the next administration. Finally, they explore how product velocity has been key to Toast’s SaaS success and share valuable lessons for startup growth. * Timestamps: (0:00) Jason and Alex kick off the show (3:29) Discussion Apple Intelligence and privacy concerns (10:32) Runway - Sign up at https://www.runway.com/twist to get your first 3 months free. (12:12) Trust in tech companies and privacy (17:20) Trends on AI topics and ChatGPT (17:20) Trends and tech product comparisons (20:59) OpenAI's Chat.com acquisition (22:45) Mac mini unboxing experience wrap-up (24:40) LinkedIn Ads - Get a $100 LinkedIn ad credit at https://www.linkedin.com/thisweekinstartups⁠⁠ (26:12) Analysis of Toast's business and growth (36:25) Vanta - Get $1000 off your SOC 2 at https://www.vanta.com/twist (37:30) Reddit's growth, user engagement, and moderation challenges (47:36) Social media incentives and reputation systems (52:07) Reddit's AI translations and community management strategies (57:25) Reddit's potential for creating a search engine (1:00:38) OpenAI's citation challenges (1:05:30) Amazon's interest in Anthropic and AI regulation (1:07:37) US immigration and AI regulation under Trump administration (1:11:43) TikTok's role in US-China relations (1:15:42) Major IPOs and market potential (1:17:19) Economic topics and inflation's impact on consumer spending * 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://security.apple.com/blog/private-cloud-compute/ * 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: (10:32) Runway - Sign up at https://www.runway.com/twist to get your first 3 months free. (24:40) LinkedIn Ads - Get a $100 LinkedIn ad credit at https://www.linkedin.com/thisweekinstartups⁠⁠ (36:25) Vanta - Get $1000 off your SOC 2 at https://www.vanta.com/twist * 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

This is the new... Oh, you got it! I got the Mac Mini, because I've always loved Mac Minis. Isn't it satisfying when you open a Mac product? They make this... I don't know if you know this, but they work on that sound that you just heard. So that was the sound of me opening, that box that the Mini came in, and that sound. When you open it, it is designed to let that Puffa there out.

And then this is supposed to be another, this paper that they put on top of your device or the film they'll put on top of it. That's also designed in the unboxing experience to have a sound associated with it. Do you hear that? Yeah, it's so satisfying. This weekend startups is brought to you by Runway. Looking to uplevel your financial planning? Runway is the modern and intuitive way to model, plan, and align your business for everyone on your team. Sign up at runway.com slash twist to get your first three months free. LinkedIn ads. To redeem a one $100 LinkedIn ad credit and launch your first campaign, go to LinkedIn.com slash this week in startups.

And 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 sock to report fast. Twist listeners can get $1,000 off for limited time at vanta.com slash twist. Hey, everybody. Welcome back to this week in startups. I'm here with my co-host Alex Wilhelm. Alex on Twitter or X.com. I am at Jason.

X.com slash Jason. X.com slash Alex. He writes a newsletter. It's called cautious optimism. Cautiously optimistic. What? Tell me out. Hey, this branding is always getting me. I'm going to get a sign behind me that it says it out of bad idea. I wouldn't be a bad idea. Cautiously optimistic. Cautious optimism. Cautious optimism. Because I, the problem is I'm used to saying I'm cautiously optimistic. But it's cautious optimism. dot news is your newsletter. Yes, sir.

People can sign up for this. And it's great because Alex is researching the industry every day with his daily email. If you get it, you're kind of getting either what we talked about on yesterday's show mentioned or perhaps a peek at what will be on the next day's show. So it's a nice compliment to the pod. We have a big docket today. This big docket energy. Let's just, I mean, we could sit here and talk about Trump, we could talk about the election, or we can just get back to tech news.

I say we just get back to it. I'm totally, totally here for that. Yeah. But, Jason, my question is, where do you want to start? We have a feast in front of us, so pick the course. You give me some choices here. Let's tell the audience what's on the docket and then we'll pick. And then, hey, audience, you can tell us always in the YouTube.

If you don't subscribe to this week and startups on YouTube, go to this week in startups. Hit subscribe, hit the bell. Monday, Wednesday, Fridays, we're locking it in news at 12 p.m. Texas time, which is 10 a.m. Pacific time, Silicon Valley time. And of course, New York, East Coast time. That's 1 p.m. So you look for us right around that time. Today was 1230 because I wanted to get a little extra into the docket. But we're trying to lock into three days a week, Monday, Wednesday, Friday. And yeah, at that standard time. Yeah, absolutely. So on the show today, Jason, we have Apple Intelligence, Signal and Consumer Privacy in the era of AI. Then we have notes on Reddit and toast earnings from a product perspective. I love both of those. And Amazon might put more money into Anthropic. I have the information there. And also some notes about the future of AI regulation.

And I know you just said no Trump, but if we have time, we can talk about TikTok and what might happen to the social media phenomenon in the new administration. Of course, that's a great subject. I think starting with this signal discussion, obviously a lot of people are using Signal to protect their privacy. Previously, people use things like Telegram or, you know, other messaging platforms, but they generally don't have disappearing messages, point-to-point encryption. So Signal is one of those great products that I think people trust. Now, should you trust anything? I don't trust anything. I assume all my tweets, all my texts will become tweets eventually. And if you go through life like

that, you'll be in pretty good shape. Nothing I say in private group chats, that's spicier, maybe on the margins 10% spicier than what I say publicly. It's a pretty good way to live. But what I've heard on the back channels is on signal groups and other places, people are saying, hey, Apple Intelligence

has been reading me, my messages. If you use AirPods, do you have the latest AirPods, Alex? I don't have the latest AirPods, but I am now on iOS 18.1. Perfect. So you have Apple Intelligence.

The latest AirPods are amazing. I've gone from PixelBud, back to the AirPods because of this reason. For when I'm doing podcasts or listening, otherwise I like to use my fancy focal batis, you know, really cool headphones that I have. Putting that aside, I do like listen to my podcast

and doing phone calls with these Apple AirPods 4s. They will read you your messages, and it asks you, Alex sent to Slack, would you like to read it? So instead of just reading it, it asks you. And the way you can fire it off

is you just nod or you go like this. So when I'm with my kids, if I'm like, you know, I don't know, I'm kind of chaperoning and they're playing with their friends or something. I might have an AirPods in, just one, sometimes two, and they're playing and they don't want me on or just, you know, I'm hovering or on the periphery, and I'll just nod. And then I hear your message to me. It started doing that for signal messages. And so then people were like, wait a second, Apple is listening on an operating system basis, on your local phone to this.

and then people are now sharing the train Apple intelligence screen. So we should show people where this is on the phone. Hopefully we have that in the notes of which screen you go to to show how to turn this off. But it was turned on by default is the claim of many people. I can't remember if this is being turned on or turned off. But let's pull up that screen that everybody's sharing. So if we look at this, Alex, it says learn from this app. And then it says, very tiny, allow Siri to learn from how you use.

use signal to make suggestions across apps. So it's studying your behavior of what you do in there. Okay, you send to your group chat of your fraternity or sorority or your kids group, a lot of kids groups in here, you know, for schools. And then it says suggestions. Show on home screen, suggest app, suggest suggestion notifications. Allow suggestions and content from signal and shortcuts for the app to appear in search and in widgets. These suggestions and shortcuts are based on how you use the app. So this is a long-winded way of saying Apple is now studying your use. Apple, I think, anticipated this, but it has not stopped people from thinking this is a leak.

So take us through what the media coverage has been of this, Alex, and Apple's response to it, because if I'm hearing about it in group chats over and over multiple times, and I'm seeing it on Reddit threads in cybersecurity forums. And then Apple has released a security paper on it. There's something here, and it's worth us meditating. Yeah, absolutely. So people might recall, we talked about this. Actually, I think about a month ago, Jason, this idea that Apple intelligence was going

to learn from you as you went through things and we were concerned about the privacy of it, taught people how to turn it off. I think the concern that people had here is that Apple was turning this on automatically for signal if you turned on Apple intelligence. and I think that's a mistake from a design perspective. The other thing that came out when I was preparing for the show is that a lot of people think that Apple has offered a reasonable set of privacy guidelines for their use of AI, which is on-screen learning and so forth,

they're on-device learning. But people are still very concerned that some AI processing, if you will, some of this learning that Apple Intelligence wants to do will be done off device. Now, this kind of boils down to how much do you trust Apple and how much do you trust their private cloud compute setup? Going through privacy-minded forums, talking people about this, my impression is that Apple's setup is the gold standard for this type of technology. And I think that's where the media commentary has come from that you're asking about.

And I think the media has been very positive about Apple's work here. But I don't think that general media, privacy, educational awareness is particularly high. And so I think Apple's getting a lot of credit from the media for saying, hey, we're going to take a look at this, we're going to be serious about it. I don't think that's convinced the actual privacy advocates. And I think that's why it's showing up in your group texts and also over on, you know, the DefCon side of credit, for example. Okay. So, uh, what that means net net is Apple has said.

So to translate a little bit of this into plain English, if I'm understanding correctly, there is a private cloud that Apple is using. And then there's your phone. they are contending Apple that all of this processing is happening primarily on your phone so if it's learning about how you use Signal and it's reading to you your messages from Signal

that's occurring on your phone which is yours which is encrypted which even Apple can't get to yes but but there might be times when they have to go to the cloud and when they go to the cloud, they are claiming that they have a private cloud to do this.

And they've released the paper. We'll put that paper in the show notes. So, to your point, this comes down to do you trust Apple and their approach to AI? I would not trust, as but one example, Google,

I wouldn't trust, because I think they've used, data before to kind of market ads. So I would be very concerned with Google because of what happened with incognito mode as well. Sure. Where people at Google used to joke like incognito mode is not incognito. And then I wouldn't trust Open AI as well because I think they're kind of cutthroat reputation-wise. But I might actually trust Apple.

Hey, founders, let me ask you a question. Do you know how much money your startup has at this very moment? Or do you know how next year's hiring is going to impact your burn rate? If not, you're stuck in spreadsheet how. I know it. I've been there and it's super risky. So let me tell you about this amazing software I just discovered called Runway. Runway.

Like how much runway do you have for your startup? It connects all your data sources, obviously your bank, obviously your accounting, but also your HR software, your CRM, all of it. And then once you have all that data, it's going to help you model your finances in plain English so you always know where your business. the stands, and you can just crush those board meetings. You never look foolish, trying to find information. You're the pilot of this startup, and when you go in to the cockpit, you want the pilot to be able to tell you the airspeed, they want to tell you your altitude, etc. It's complicated,

but runway makes it all super simple. It's not just finance and a bunch of P&Ls. It's actually data you can use, and customers like Superhuman Angelist 818 Tequila and Revenue Cat love this product. So just because you're a startup, does it mean you can run your accounting on the back of an app. If you want to personalize demo, I want you to head over to runway.com. What a great domain name. Runway.com slash twist. And they're going to give you three months free right now. It's an awesome product. I wish all of my startups used it honestly, because then we would know exactly how much runway we have. If you know your runway and you know all your data cold, you can just make better decisions. And that's what we all want to do is make the best decisions we can with the best.

software and the best information we have. Go visit runway.com slash twist. So I think the delineation between advertising focus companies, i.e. Google meta, for example, makes a lot of sense. I agree with you on OpenAI. Apple has made such a push, though, about being the privacy first provider for mobile operating systems and hardware for so long that they should have pretty good consumer crust here, but I don't think that's enough to make us feel good. So I guess the way that I'm going to approach this, Jason, after going through by settings today and tinkering with it is that for all my messaging apps, I'm just going to have Apple intelligence turned off, period.

But I don't actually care if Apple intelligence knows what I use in Google Maps because it might help me get places faster. So I think that's where I'm willing to give up a little bit of my privacy ethos, if you will, for convenience. But if you're going to use Signal, which is, as you said, end in encrypted and very well known for that, I just don't understand why you would want to give any technology company, even one as high-minded as Apple might be, access to that information. It just doesn't feel right.

Well, and I think the hacker community is maybe they're going to fall on the side of turning this off. And there was one interesting comment on hacker news. Hacker News. News. At Ycombinator.com. Sometimes you'll get some really thoughtful people who either work at Apple or have work there or work at these big tech companies or compete against them. And there were some commentary about it's not.

transparent or the person said it's in transparent. Nobody knows what Apple is doing in terms of sending stuff up to the cloud or processing it local. So I think that would actually be interesting if it actually told you, hey, we're sending this up to the cloud to actually work on it, we're not. Or if there was a way to say, I don't want to, you know, as great as computing can be, I just don't want to send my stuff up to the cloud. and I think this is going to be the major vector

that now people are going to have to contend with. If you have an AI on your phone built into the operating system or built into your desktop as Microsoft and Apple are doing as well and you can download Chat ChapT's Mac app and it will watch your screen and we've seen Claude can take over your browser,

it's going to know everything you're doing on your computer and sending some amount of that up to a cloud which means it could be intercepted. So it's almost like we've all got a T-stroke logger watching us now. And the idea is the, I mean, I'm starting to sound like conspiracy theorist, but in order for AI to do its job, it's going to have to study you on your computer. And so you should be thinking, everything I do on my computer is now being watched by AI. If you turn it on, you can turn Apple Intelligence off, for example, and you can even turn off Siri.

So you can kind of go back to a phone if you want, but I think it's pretty. clear from the trajectory of these products that they are going to get built into the browser at every level and your phone and your desktop OS and so forth. What I would like here, Jason, is if Apple would allow me to have my own private cloud compute setup. Like, if there was an Alex version of that that I could pay for, I could approve queries going up and down, I'd feel okay-ish about that, but a nebulous, quote, private cloud somewhere else, some of my AI work going off device just doesn't sit well with me. But I wonder how much. is of this is just you and I and people that we know in the technology world thinking about this versus the average person.

I pulled just some fun data and I looked at Google Trends. And if you think about, if you look at searches for Apple intelligence and perplexity, this smaller AI search engine that's a startup, they're actually about even in terms of total searches right now in the US. And by that, I mean people aren't searching for Apple intelligence. They're not really looking for it. So I think the average consumer is going to turn it on and forget about it. So interest over time, there was a spike in Apple intelligence.

That must have been the keynote. Everybody must have Googled it, and then it came back down. And perplexity, yeah, slowly, I guess people are interested in it. But this shows the two consumer products have no, these two consumer products have no traction. I guess putting it up against ChatGPT would be another interesting vector. I bet you chat GPT is going to spike against this, which means they are the leading consumer brand. Oh, for sure. But what's amazing to me is Apple has the hardware. And Apple has such an enormous megaphone in the press. They have enormous ad budget.

They're talking about Apple intelligence. And it's getting the search volume of perplexity, which is just a startup. One that's growing quickly. Shout out to them. Not trying to dis. But there's a difference in scale between perplexity and Apple. And so I was shocked to see how little interest Apple intelligence is getting. But I do think as well, one last thing. If Apple's going to be serious about AI, it's going to have to resolve these tensions because the technologists are the power users. They buy the expensive phones, expensive laptops, and they don't want to give up on privacy

or even give a little bit. And so I think this is going to be a recurring topic for consumer and enterprise hardware for the next 10 years, probably, frankly. Yeah. So what you can see is let me do 10 months. Yeah, 12 months.

As you can see, chat GPT has massive interest over time and these two are just a little blip. The best part of that chart, Jason, is you can see summer. You can literally see students leaving school and then you can see going back to school. Fascinating. If you put it at five years, we'll see like the inception of chat GPT. There it is.

Wow. Yeah. It's like nobody's interested in it. Also, all time high. Look at right now. That is not a lower peak. That is a higher peak. Yeah.

That is impressive. And that's why Open AIs were the hundred and four. 57 billion and perplexity is worth possibly nine. Yeah. Interesting. Yeah. That is pretty amazing.

I've never seen a consumer product like grow that violently. If I were to remove these two and then add another product that consumers love like Bitcoin. Oh, okay. See. Yeah.

So this is super interesting. This is an interesting for people to understand technology trends is with Google trends. You see this massive spike. If you remember, maybe in the 2020s, people, like,

forgot about Bitcoin that had that big rally. Yeah. And peak Zerp came back down. And, you know, it's kind of locked into a small group of people. And then you could add to this, uh,

something like Airbnb. And it'd be interesting to see like on a consumer, product basically. Wow. Yeah. That is not bullish for Airbnb. I'm not going to lie. That is not.

This is people searching for research. So I think what happens with certain trends is like you understand what Airbnb is. Hmm. So this is only five years. And when Airbnb came out, it probably spikes. So in fairness, Airbnb, I think everything kind of settles in to most people know about a technology and then it doesn't come up as a trending topic anymore. Okay.

Throw an Uber then. Because I'm curious if that, if that is a, similar dynamic to it because, I mean, people use Uber and Airbnb, you know, all the time. So let's see. See, it's like super steady. Yeah. The last five years, people know about these products. So when something becomes a standard, because this isn't showing searches, just raw searches.

It's people searching for that term. If you have Uber on your phone, you're not searching for Uber anymore. If you have an Airbnb account, you're not searching for it anymore. What I think people are searching Google for is things that they've heard. about from a friend that they want to download and try. Oh, okay, okay. So this is people that either downloading the app for the first time or downloading it, say, again, if they got a new device and had to replace their applications.

I think that's probably what's happening. Like, when's the last time you search Google for Uber or Airbnb or Bitcoin, you know, probably you don't do those searches too often because you already, you know, have those products or services and have made a decision about them. typically people are Googling stuff and coming up in Google trends when they're investigating something. And so... So by that logic then, Chad GPT, given its enormous search share,

is still reaching a lot of net new people who are therefore doing early research about it. That's crazy. That's crazy. I think that's what that shows. Yeah, if you were to look at it on its own is people are still looking at it. Also, over time, as people know about it, have it bookmark, type it directly in. and this relates to another story, Darmesh from HubSpot,

the co-founder, have bought Chat.com. And you've been pretty public about spending like 10 million on it. And then Sam Altman just tweeted chat.com and it resolved to J.GPT. And I had said,

I think here are an all-in, Sergei should just buy chat.com and build a separate brand for their AI efforts or by genie.com or something. But I just thought like, get chat.com and buy it. And I guess Sam Malman heard that news and did it himself.

What do you think he paid? You have a guess? Oh, I mean, I would bet you a dollar. It was a structure set up in some capacity. I wonder if Darmash is trying to milk this for like equity down the road because he's a smart guy. I've met him. We all know HubSpot. Would he rather have a check or some stock?

So that's, that's why I come down. He's already made a ton of money. I would think he wants upside. I would take it all. I would take it all in like low cost warrants or margin or something. But what a great purchase. And also,

I wanted to show you, I just got something. Unboxing videos, now coming to Twist. This is the new... Oh, you got it! I got the Mac Mini, because I've always loved Mac Minis, and the fastest Mac you can buy is now... Isn't it satisfying when you open a Mac product? They make this...

I don't know if you know this, but... They work on that sound that you just heard. So that was the sound of me opening, you know, the case of that box that the Mini came in, and that sound. When you open it, is designed. to let that popper there out. And then this is supposed to be another,

this paper that they put on top of your device or the film they'll put on top of it. That's also designed in the unboxing experience to have a sound associated with it. Do you hear that? Yeah. It's so satisfying. Yeah.

But supposedly this 5 inch, I think it's 5 inch by 5 inch by 2 inch is now the most powerful Mac you can buy. That is insane to me. and so impressive. Also, it's just a gorgeous, okay,

I love the brushed aluminum look to it. I love the shape of it. I've always been a Mac Mini fan, and I'm very jealous that you have one, and I do not. They start at $599, which makes it,

I think, the cheapest way to get into MacOS now, and you can put it on any monitor. So, you know, that's, I think, one of the magical things about this is Dell makes much better monitors

than Apple makes at a much better value. You can buy a 50-inch Dell for the same price as a 27. an inch Apple monitor and the Dell one's much better in my experience. So I'm going to put this on the Dell 50 inch and then see how it plays. But I do think this could be Apple's best product of the last couple years. That's pretty mean to the Apple Vision Pro, Jason.

Yeah, I think Apple needs to get more entry-level computing products in the market. So I think that's a way for them to just sweep up more users and tip over into a, you know, a significant amount of desktops from Windows. And lower price entry points for college kids, for families. It's just such a good idea. Hard agree there. Also, I just want to say that I recently experienced the Apple unboxing setup because I had to buy a new iPhone because I knew Apple intelligence was going to come up on the show again. So I went out and got myself a 16 pro max. You leaf progged me.

Yeah. So here it is. I'm back on top. And I was so thankful because today you're like Apple Intelligence. And I was like, see, I bought a phone because I knew it was going to be back on the show. And I didn't want to tell you twice that I was running an iPhone 11. So yeah. Have you built something awesome?

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LinkedIn.com slash this week in startups to claim that credit. That's LinkedIn.com slash this week in startups. Terms and conditions do apply. All right. Let's keep going through the docket. I know we have Reddit and Toast. I am very fascinated by the company Toast. Okay.

Let's talk about Toast. So Boston-based company, everybody, you may recall from its 2020, kind of like, oh, God, COVID hit restaurant business to 2021 IPO. Jason, what I find great about this company, though, is how multi-part it is. And this is one of my favorite parts of its S-1 through to today. So if you don't know, Toast doesn't just offer swipes. It doesn't just offer payment, what are they called? POS is a point-of-sale terminals. It offers a suite of software products.

It offers payments, other fintech offerings like loans, and it also makes hardware as well. So it's a really cool kind of multi-part business, and it's crushing the world right now. It's a very cool product, and I always like to think about, you know, what are the product lessons here? Toast has $189 million in services and subscriptions up from 131 million in Q3 of 2020. So they're cruising into, you know, they'll be at a billion at some point, right? They'll hit $250 million next year and they'll be at a billion dollar run rate. And it's a really interesting SaaS product because you have point of sell as a category, pretty well-known category, right?

But once you have a restaurant, then you have to think, well, what do I do next? What do I do next? So people come to the counter, but people also sit at tables. So if you've ever been to a table during COVID, toast lets you scan the menu, order an individual item, and then open or close your tab. And so there was a great in San Mateo I used to go to when I lived in the valley, I would go to this awesome beer garden. And, you know, I could order a schnitzel, you know, or fries or whatever for my daughters. But if they wanted more, I could just order that one dish without having to talk to the waiter. And I said, wow, this is an incredible company.

I got to go invest in it. wound up going public. I never invested in it. Yeah. But then I started drilling down into it and they found another use case. One is managing online menus and you start thinking about like all the places your menu signs up now. So they do menu management as a vertical. Then you have employees and employees get tips as we all know. And Europeans make fun of us like they flip over, you know, the device in their hands when you're paying by tap and they say, oh, it's going to ask you a couple of questions. Yes.

you know, that awkward moment where now your tip, the person is standing over you, watching you give the tip. I mean, this is like one of the weirdest manners and morals and, you know, weird U.X decisions ever. I wonder if tipping's gone up or not. I have a story about that, actually. So on the tipping front, a well-known venture capitalist, Jason, who you would probably be on a first name basis with, I was talking to them. I'm just going to keep them anonymous because they were just talking to me about this.

Their daughter works over the summer at an ice cream stand, one of those seasonal things that they pop up. And he told me that they switched from cash to cards and people then switched from paying from cash to cards. And they have the same terminals. They turn them around. You can tip.

And this guy told me that his daughter has seen her tips fall apart. And that blew my eyes. I did so much more with my card because I just, tap and then I hit 20% and I move on with my life. But that story shocked me. So I would have said, I bet tips are way up, but I'm not sure it's true in every case. Well, what this point of cell system does is it also manages HR and it manages splitting of tips. And so the reason I bring all this up and I thought it would be an interesting discussion for us is SaaS companies have this major problem, right?

Headwinds, et cetera. and then there's a really interesting concept here that founders have to deal with all the time. Do I build the next adjacency or do I make the current product better? And the answer is yes. Yes. And just how often do you add an extra product and what's your product velocity? And this is why as investors, I've trained our team at launch to really look at product velocity. How quickly do products get shipped?

And then what quality do they get shipped at? And if you can ship reasonably good products and features at a really good cadence, you're going to beat everybody around you. And I think this company is doing pretty well. It's got a $21 billion evaluation, right? Yeah. Am I ballpark correct? Yep.

Now, they are at ballpark $750 million a year in revenue. So this is a really, really juicy valuation. am I correct? Oh, you're a little bit low because that's just their subscription revenue. That's the software side of it. On the, on the fintech side, Jason, which is payments and so forth, they did over a billion in revenue in Q3 alone. So they get a percentage of that?

Yeah. So they take a fee and a cut of payments that they facilitate through their terminal. Now, it's hard to chase down the exact pricing I try to for us, but I believe it's set at a custom rate for each individual company that they work with. So it's hard to tell exactly what that costs. But the fintech side of the business is the majority revenue driver. Got it. But it's a much lower margin than software revenue.

Right. So I'm guessing that billion is their take. So that makes more sense to me. And then they have 50 million in hardware sales this quarter. So if you were to put those three numbers together, then their valuation is if they're at $1.25 billion, they're making, what is that? $6 billion a year? $5 billion a year, run rate.

$5 billion a year. Yeah, they're doing four times top line revenue. and that makes much more sense to me. And I'm guessing they're profitable or close to it. Yeah. Just a DPS was a little bit low in their most recent quarter, but the company is profitable enough that no one's worried about it, given its growth rate. I don't think they're enormously profitable on a gap basis, Jason,

but I don't think they're being judged on a gap basis, just to be clear. The thing that blows my mind, though, is toast business is growing very, very quickly. It added 7,000 restaurants last quarter. They're expanding not just into things like menus and so forth. was Jason, but into a capital program. They have now set up to help you handle your payroll if you're a restaurant. So they are going very, very deep on this vertical and adding adjacent verticals like hotels and so forth.

Wow. All of that, gross payment volume about 24%. Revenue growth was very, very solid. And they're worth four X revenue. I'm such an idiot because I was talking about this company when it was at, you know, $15 a share. Now it's 36. I really have to do more public market trading.

I don't know if this is a good deal or not. not right now, but, and I don't want to give any financial advice, but I think this company is a really good example of relentlessly adding features that delight customers that lock them in. So there's multiple reasons to add additional features. One of the reasons is if you keep adding features, it's hard to rip a system out. And so once you use Slack as an example, and Slack costs, I don't know, 15 bucks a month per person, 10 bucks a month per person, depending on which program you got. You got a 30-person company.

you're spending $4,000 a year, it's like not that much money. There's free versions or there's $100 version you could download or a $99 one you can pay one time for. There's plenty of competitors to it. But if you're getting enough value and it's got enough hooks into it where you've got enough things feeding into it

and you like to use huddles or you like to use their, I don't know, remind you features. Ripping all that stuff out becomes very expensive. So there's two really important piece of advice. here. One, you have to nail your core product, which for them is the point of sale system. But once you have, you have to get really good at having multiple teams attack other verticals. And then you can look at your competitors and whatever they're charging for, you can just abstract and put into your product for free.

In Zoom, another perfect example of doing this, they added transcripts and they added chat rooms like Slack. they edit automatic transcripts and automatic summaries. And so doing that over time makes your product more defensible. And if you have, it all comes down to product velocity. So one of the key, key aspects of being a great startup, and we're here on this week in startups, and we're talking about a large public company is can you go fast? Can you go into demon mode? As Elon says, can you hit speed and iteration and just release new products?

are solid, at a regular cadence. And if you do, venture capital is really like that. And of course, you have to turn them off sometimes if they actually don't. But when you look at Toast's offering now, they also allow you to manage into Toast all of the orders from DoorDash and Uber Eats. So, again, one system of record, and they just keep adding those features. Squarespace, a product I love, does this as well. They keep adding features. So they edit e-commerce and selling subscriptions on their product.

SEO metrics, so you don't have to buy the second, third, third, product. And these platform companies always do better than vertical companies, but vertical companies and having a beachhead where you can be awesome and better than anybody is how that process starts. Yeah. So anyway, there's the lessons, I think, from Toast. I just want to underscore one thing you said about the hooks that they have into companies. They just put out a new feature in the last quarter or two called branded apps that helps individual small restaurants or very small chains have their own application, which they said in their earnings call boosts return orders. So essentially not only can having hooks in your customers

help keep them with you, if you help them do more business, it'll drive more payment volume, for example, back into toes. So it works out for everybody and it's very efficient. I'm very impressed with this company, Jason. It's very different than it was when it went public in just a couple years, and that's product velocity. So, yeah, awesome. I think you're dead on there. 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 churn 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,

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that's vanguard.com slash twist for $1,000 off your sock, too. Do you want to talk about Reddit really quick? I do because my understanding is they figured something out. And that's really interesting since this company has been around for 20 years almost. It's been around for so long. I forget what it was like to not use Reddit daily. It was so long ago that Reddit took off that its old competitor was Dig. Yeah. June 23rd, 2005 was when Reddit launched.

Wow. So it will be next June a 20 years old. Oh, and by the way, Digg launched December 2004. So dig was six months before. Yeah. Long, long time ago. But the story with Reddit is that it has seen insane user growth. And I think the reason why we talk about Reddit so much now is that it has reached real mass scale.

In fact, Reddit is, I think now, Jason, just mainstream media. In their most recent quarter, they said the Daily Act, if users were up 47%, which is very, very close to half in the last year to just under 100 million, which is 100 million daily people? That's absolutely insane. Also, who would have thought 50% growth this late in the company's history? It's pretty crazy. Right now, the stock is at $133.33. Market cap of $23 billion. This is another one I was considering putting a j-trade in, and I, you know, I stopped j-trading because I was too busy, and I'm an idiot because I really do have some insights here.

The reason I know Reddit was a good buy, and I don't know that it's good by now, that it's tripled in value. It was trading a year ago at 40, so it's now triple that price or more, 3.5 times more, is because I was seeing all of my searches wind up directing me back to Reddit.

So if I was looking for headphones or I was looking for music to play on my headphones, or I was wanted to talk about barbecue in Texas or I was looking at hiring people in Texas and Austin, I just found myself winding up on a subreddit. Yeah. And I think this has something to do with a counter to what's happening in AI.

Yeah, to a large degree. So one thing Reddit pointed out in its most recent earnings was that in 2004, and I'm quoting here, so far the word Reddit was the sixth most Googled word in the U.S. And that's because people have been appending Reddit to their search queries. to essentially get around Google trying to offer them up stuff. They just want the human stuff.

They want the actual stuff from people. And so ironically, I think Reddit backwards built Mahalo, because you wanted to do human-powered search, Reddit built human-powered answers, and then Google is the mechanism by which people reach them. So it's kind of the same thing. Yeah. And I think that's like really the lesson here.

Reddit has not changed in 19 years. So back to startup lessons. We talked about product velocity and adding features. What Reddit did really well is they focused on that core feature, which was community. Now, I'm not saying they didn't add features, but the UX has stayed remarkably the same. And they learned this because Dig famously released a version 4.0 or something that changed everything and made it feel more like Facebook. And Kevin Rose essentially left the company after that, I believe, and the whole thing just started to come apart. Yeah.

If you have something that's working and growing more than, I don't know, in the early days of the start up 3x year over year. You want to keep doing that. If you're growing double digit percentages per month, 10 to 20% per month, carry on. Keep doing what you're doing because it's so rare for something to grow 20% month over a month or even 10%. And that means that 10% every 7.2 months, you will double your size. Very few things double every year.

And to double every year for Reddit was just an extraordinary thing. Now, they did add a lot of extra features, and there were a lot of things that were going to kill Reddit, obviously. It almost got killed by, like, a lot of the dark stuff that was going on there, misogynist stuff, violent stuff. They kind of got the community under control, and that's where 4chan came out, where they were like, hey, anything really crazy we'll do over at 4chan. We don't want that level of crazy. Like, trolling okay. Sure. Violence, not okay.

Real world swatting, not okay. you know, telling somebody they're fat or stupid or mocking them okay, right? They kind of found an okay place for an anonymous message board to operate. And it's pseudo-anonymous. And I think this really relates to what we're seeing with freedom of speech. You have so many people complaining about X, right? And oh my God, there's misinformation, et cetera. But you don't hear people saying that about Reddit.

And I think part of that is the expectation was that Twitter was going to be, you know, more real names and super moderated. But Reddit, nobody has that expectation. When I look at a Reddit thread, I assume there's marketers cloaking themselves. I assume there's people with multiple accounts. But that overall, the community sorts through it enough that it's an okay place to start my information journey. I wouldn't do anything blindly on it.

Yeah. But if people were talking about their favorite songs to listen to on high fidelity headphones, I'd be cool with it. So maybe what do you think about pseudonyms? Because it's not anonymous in that every post you make is anonymous. They're pseudonyms. So you can look at the history and you can build up reputation. So maybe you could unpack what your thoughts are as a long-term community member on the internet.

I've been on Reddit for an incredibly long time. So I've seen its various permutations. And one thing that I think is under discussed is how important moderators are of individual subredits. time, yeah. So the reason why I think X is more a conversation and in a political football to some degree about how it handles moderation is that it's a company versus a collection of individual communities. And so if I'm on the progressive metal subreddit, which I love, there's a couple of diehard fans who moderate it. They set the rules. You don't like it. Make your own forum. But if you're going to be on their collection of digital spaces, that's the rule set. So I think they kind of federated out the responsibility for moderation in a way. that has up and down worked pretty well. They did have the API kerfuffle sometime in the last year. They were going to change the rules and people were mad about that and Reddit got into a fight with its moderators, but that is mostly calmed down.

And I also just think that because it is pseudo anonymous to your point, people have a simply lower expectation of informational fidelity because as people, I think it's people ship post more, Jason, when they're behind a pseudonym versus the real name. Yeah. I think you can see that on X. if I see someone whose name is clearly an allusion to anime or historical figure or random whatever, it's never the smartest person that I get mostly. Well, and you also have to worry with pseudonyms, combining pseudonyms,

and this is one of the concerns I have about X and Reddit is if there's a financial incentive and you have pseudonyms, then people can anonymously make money. Okay, why is that a problem for some of it? to anonymously make money. Most people would say, Alex, well, it's great. You know, people don't have to worry about losing their job because they have a left wing or a right wing or a particular passion that would get them, you know, I don't know, we're in their privacy.

But what it also does is it can create a very cynical approach where I think people on X, a lot of these anonymous accounts and the anonymous accounts on Reddit, you can build up reputation and then sell it to the highest bidder. And this happens in all systems, whether it's the Russians paying off podcasters covertly or just revenue sharing where you get a piece of the advertising or affiliate revenue, where somebody could build up a reputation in your metal forum. Then they go over to another one and say they love these headphones, but they work for that headphone company, right? And so I do worry a little bit that the incentives are now perverse. in its perverse in an Alex Jones kind of way. Alex Jones, his stock and trade was to go after conspiracy theorists.

Now, I like a good conspiracy theory like anybody, right? There used to be this great show that Leonard Nimoy was the voiceover for. God, what was the name of that show? Do you remember? I've never seen the show you're talking about. It was a syndicated show where it was like mysteries. Leonard Nimoy mystery show. In search of, thank you, producer, Stuart.

coming in hot with a great edition. In Search of. And it was so awesome. You can, we'll throw up the In Search of screen or something or an episode guide here to show you what it was and like some of the topics. But In Search of was such a great conspiracy show where Leonard Neumoy would talk about aliens or Loch Nist monster, you know, all these things. And as a kid, I loved it. I thought it was awesome that like maybe there were these mysteries that were unsolved mysteries. and in search of, you know, kind of did that.

I think that's like what Alex Jones did too, right? He was like, let's go in search of these things. That is some 1997 word art style graphics there. You could tell that's not a recent image. You know, Jason, I'm curious and I'm not trying to prime you to criticize a friend of yours here. So this is not me kicking up dust. But yeah, on Reddit, if you go around making posts that are really, posts or stealing something from a different, you know,

suburbid to put it somewhere else. It's called karma-horing and it's looked down on because karma is the Reddit kind of like on-site currency, if you will. That's the reputation that you earn and then people will trust you or not by karma. It'd be a great idea for X or Twitter to have karma or a reputation like that. And they could do it actually really easily via community notes.

And community notes has been awesome. Like I get community noted sometimes. Other people get community noted. and I find it's pretty accurate. And attaching your community notes record to your profile page is a brilliant idea. And that's literally what karma does, right? Yeah. People can literally go see what you've posted,

how it's done, your overall results, both for comments and posts. But over on X, where you and I have spent the majority of the last 15 years, you can be anonymous and you can post and you can get paid for it. And I think that combination leads to people post

I would say even shriller stuff than they otherwise might have. The spicer it is, the more engagement it gets. If it bleeds, it leads. Yeah. Correct. And so just like Fox News or MSNBC can go with, you know, a spicy headline that may not be exactly attached to reality or just an opinion. And how do you wind up on those shows?

It's by having a spicy opinion. And so it's a long way of sort of, I know this because I get invited to them. Yeah. And the Republican. like Jesse Waters, they invite me on every week. They're really kind. I love doing it. I just haven't had the time.

I'm going to do it again. I like going on there and being a little adversarial and talking about my criticism of, say, Trump or, you know, Kamala or the Democratic Party. I kind of like it because I'm independent. But they love me because they like having somebody on who's not 100% in the bag for Trump and not 100% DNC. Yep. They kind of love that moderate coming in with a little nuance.

But my point about Alex Jones was. if you follow this thread, eventually what people do is they just make stuff up. And then you become a fictional author. And that's my fear with what's happening on X with people getting paid or, you know, anonymous accounts on Reddit pseudonym accounts, is that, or Wikipedia now is having this, where in order to get your Wikipedia page changed, and everybody thinks you can trust Wikipedia, trust me, I have a page on Wikipedia. It is run by my haters and people I've beaten in business or people I fired with, you know,

enthusiasm, let's say, from a company. They're motivated to edit that page. And then I have to hire people. I mean, if I wanted to make changes, I haven't. But I've had people pitch me on it. And they're like, here's our approach to how we would change your page. We have these 50 editors who are on payroll, who are making edits across these four accounts for the past 12 years. on VPNs to protect their privacy

and we can start a discussion about five issues on your page and then slip in three or four things you want that have nothing to do with that but that come from a story that we write on another news source

and you're like, really? And they're like, yeah, we're going to release a press release. Then we're going to pay a blogger to write the story. Then we're going to have,

you know, a discussion about it on Reddit. Then we're going to put it on, your Wikipedia page and we're going to cite like two of those sources or whatever. And I'm like, wow, you can't trust anything. And Alex Jones eventually created the fabrication that the parents that Sandy Hook who lost their children were actors and that they never had kids to begin with. That's kind of where this madness eventually winds up if you don't put protections in place. So the good news is if you're sharing revenue on X, they know the person's name. They have to send

the check to a bank account. You have to put your driver's license in. So although you're pseudo, they kind of know who you are. Elon knows your followers might not. Yeah, exactly. And so this is where I think if you have, you know, my belief is if you make over a certain amount of money in any of these systems or you have a certain number of followers, I think it's kind of, I prefer that people use their real names and own their words. I do understand there could be repercussions. And I do understand the founding fathers wrote some papers anonymously. Yeah, absolutely.

But I think it's something to be acutely aware of as a consumer of content is that there's massive manipulation going on and people taking sides. You have to make your own decisions. Yeah. And that's why I really like having a personal blog. Like I think a lot of people just have like their own, you know, first last dot com. Because here's my thoughts without any filters, without any pseudonyms, without any platforms. I love that. But looping back to Reddit really quick and talking about product, Reddit has not changed visually.

much, but they have made some interesting changes. One thing that really struck me was the impact of their use of AI translations. They said they've been working on essentially translating all of Reddit into other languages, and there's some pretty positive results. Really? Yeah, so they want to grow their international

user base. You need to get off the English-speaking internet at some point in time and expand out to the broader world. So why not use machine translations across the site to turn the whole dang thing into Pick a language? Suddenly your Tam goes up, more people can hit you via search, and I think they can keep the user growth going for some time.

They're also doing stuff like AMA changes and so forth, but it was the translations that really caught my eye, Jason. So they are going to automatically translate more than 35 new locales in Europe, Asia, and Latin America. I'm reading from TechCrunch here. Wow. So those are not going to be perfect, but they're better than nothing. Oh, yeah.

And so here's how it works, folks. apparently you pick a post and if you're in the app, this is brilliant. So here you can look at the original or you can hit the sliders, I guess, and click translate and pick a different translation. Yeah. And read it in your native language.

So this occurs on a case-by-case basis, not, they're not reprinting the entire index in another language. But that would actually be really interesting to do and would previously have been not possible. Yes. Or very expensive to do. Very expensive to do. This would actually be interesting how this would work in the real world in terms of SEO.

If you took the entire corpus, or let's just say you took the top thousand subredits. You took their top 1,000 posts in the past year, and you just used AI to republish them, put them into the Google search index. I wonder if Google would index translations automatically in those conversations. And then how would you deal with people in France taking a thread like we just had about toast? Let's say toast goes to France. Now they want to reply to the Americans who've had their post translated. Then the Americans would see a French post, but on the English subreddit, you would then translate the French reply into English and then say show original. then you can have a conversation going on in one thread between Japanese, French, and American

consumers of whatever rock band you're in. Think about how that would make the world a lot smaller, wouldn't it? Well, did you ever read any Douglas Adams, the science fiction author? You know, I don't know if I've read it. I think I started Hitchhiker's Guide to the Galaxy at some point, but I don't know if I ever finished it. Oh, well, I know what I'm going to get you for Christmas then. Douglas Adams had a little part in his story called the Babelfish. It's a little fish. You put it in your ear and you understand all languages. It really does feel like we're getting very close to just the internet being understandable in that way.

I use a lot of translation to read like, I don't know, Chinese Communist Party meeting notes and so forth. But the thing that you're describing inside of Reddit as a way to auto translate and a lot of people to converse across languages, I don't think I've seen yet, but I would freaking love to use that. That would just be awesome. I would love to talk to more people. Why not?

Why not? I, it feels like we're right there. and this is an interesting product discussion. And, you know, when you start getting resources as a founder, I think this is what makes founders really dangerous. And this is why profitability is such a great thing for a company to hit. Because then you can start taking swings at the bat and try different concepts. See if they work as experiments and then use them or lose them.

And so as we talk today about, you know, making a really great UX and understanding, hey, this is our beachhead market conversations and tools for the community leaders who are moderating those. Then moving on to the next piece, which is, can you get the other stuff right of adding new features?

They never really, they have not, they've seemed to drive, even though Discord has been constantly nipping at the heels of Reddit. It's almost like it's two different use cases. And I see so many of the Reddits having a Discord associated with them.

And then I see them having their own internal chat. I wonder how that battle is going on, because that's an example of like Discord has been built off the backs of Reddit. And Reddit is kind of, I wonder how worried they are about Discord. So I would say not too worried right now. And I do track a lot of indie video games, Jason. So I'm on their subreddits and their Discord.

So I've actually kind of spent time across this device. And the discords tend to be way more moderated. Because they're often run by a corporation or a fanatical group of diehard fans of a thing. And I think the reason why they're more heavily moderated is because they're chat versus forum postings. And you can much more easily moderate a flow of forum posts than real-time conversations. And so I think Reddit ends up being a lot more freewheeling, if more public. So there's a tradeoff there. But I don't think Reddit's that worried because they're growing faster than Discord is and they're much larger.

the thing that I would be concerned about is what if Reddit decides it doesn't want Google's pittly, 50 or 100 million dollars a year, builds an actually good search engine on top of itself, cuts Google off, and then rides away into the sunset with the world's best search product. I think that's probably, if you were to look at the valuation of Reddit,

$20 billion plus versus the open AI or perplexity valuations, $9 billion and $160 billion for open AI. Yeah. You have to think, if I'm Reddit, I would not let anybody use our data. I would build a search engine right at the top, and I would go right at them. And that would be, you know, if Reddit really was ambitious and wanted to go for it, I would cut off all people using it. I would put the entire site behind a paywall at some point, which is going to screw up your Google traffic,

and they have a lot of flow-true traffic, obviously, with putting them in there. so they have to be delicate with Google there. But I think, you know, figuring out how to not piss off Google and add AI features. Now, I'm curious,

when you go to Reddit, it never summarizes a thread. No, I never didn't do that. And that is the feature I really want. Like, why doesn't Reddit, when you're at the top of a really good thread,

okay? write a really good summary. Superhuman does that. I use Speechify. When I go to a web page, it does that automatically. I didn't realize Speechify was doing that, but whatever page you're on,

if I'm logged into an FT or an economist, they write me a little summary of it. It's really cool. That would be the TLDR. Thank you, Campbell, in the chat room for mentioning that. What a great feature that would be. Let's look at the numbers here.

They broke a billion dollars in ad revenue a year. So Q3 revenue was $348 million, Jason. And I believe $315 of that was advertising. So yes, they're over the billion dollar run rate. And that's the thing. Their revenue from data partnerships in the quarter was $33 million. Amazing. I mean, that's not that much compared to their ad.

$33 million in data revenue is pretty significant. And if you times that by four, it's $120. and they have $1.2 billion. So it's 1%. No, it's 10% already. It's already 10% of their revenue. Okay, so that's an interesting decision that Steve's going to have to make at Reddit.

Does he keep allowing people to use their data with certain conditions like a link back, or does he go for it and compete against them? What's very interesting about that is that I have recently, started asking interesting questions like, if I were to go to chat GPT, I could ask, give me the top 10, um, headphones for hi-fi music as per discussions on Reddit.com. Let's see if it, because I know they have a deal, right?

I don't think Chad GPD has a deal with Reddit. I think it's Google specific. I don't think they have a, I don't think they have a, I don't think they have the same transaction. But I will double check that while you search. Okay. So I'm going to do two things here. Remember I said if Reddit wants to, I'm sorry, if Sam Waltman wants to start ending his problems with the use of other people's data without permission, he needs to go all in on citations, right?

Yes. I've been saying this over and over again and pull yours up and let's see it. Yeah. Let's see what you got. Let me screen share here. So this is like really interesting to see that they're starting to cite Reddit and they'll put it at the top level. But sometimes they ask you to click it. I think it needs to be at the top level.

Barying attribution seems like a bad idea to me. But here, let's see what it shows here. So you asked it, what are the top rated headphones across categories? And it did give you the source. Yes. So I ran your search again for high five. I know that's what you wanted. And to me,

like, this is what I was looking for in terms of, of sources, but I don't see a Reddit. So put in here, um, uh,

link to related Reddit discussions. And let's see what happens. Uh, because if they are into the API, they, and if they've indexed it, they should be able to do this.

So here we have, that's awesome. Yeah. And so click it and let's see if it actually takes you to a Reddit thread. let's see if it opens it and it opened a completely random link that's I had that happen myself where it wouldn't give me the link

so if you say to Chan Chipt show me the URLs of those it will actually show you the URLs but in some reason it gets hyperlinks wrong all the time it's so strange can you see this Jason can you see my screen yep okay so if I click on this it's taking me to my roommates always come in my room to hang out while I'm trying to write.

Okay. So there's work to be done. Somebody send this clip for Sam Altman and the Open Eye Quality team. I mean, you found interesting discussions. You got the links wrong. But if you say at the bottom here, show the links. Show me the actual URLs of those links. It might actually show you the actual URLs.

And if it does it properly, yes, it's not showing you the actual URLs. If we click on sources. We get... It's supposed to show you the sources on the right. They don't get that right. It's so weird. And you did a web search there, so you're using the new search functionality. So lots of work to be here, but you see where they're trying to get to.

Yes. And Open AI is building in public, so it doesn't work. But Sam Waltman learned this a long time ago at Reddit watching and Sequoia, you know, scouts, like watching all these companies just, you know, make progress like this. It's really great. I want to make one more point, though, because do you recall the search off that we did? I think it was on Wednesday comparing perplexity and open AI search and Google.

One of those four queries, we didn't get to it, but it was an open AI query and it just failed several times. I could not get it to answer a question that Perplexity and Google were both willing to. And it wasn't it trying to like mother hen me. It just, the back end just couldn't do it. And so I think it's interesting.

Do you remember what topic it was? Was it flights or travel? I can't. One second. I just need to quickly pull back out my notes here. I know that when I asked it about election security. Ah. It was like, yeah,

you should go to this website. So for me, it was how to help a colicky baby was the search that I was trying for. And Google was okay. Perplexity was okay. Chat, GPT, search said, unable to display this message due to an error.

And then I got that repeatedly trying that search because I didn't want to just cop out and, you know, dress and crap. But there's some weird bugs in there. I wonder who's running QA. Yeah, it's going to be a little bit more work. But this is one of the things that's great about Open AI's philosophy is they put

this stuff out there. They test it. You know, they're willing to have it break in public. I think we're kind of entering a YOLO kind of environment for these LLMs. And I'm okay with it, actually. I think if you take any of the responses at face value, I mean, you're dumb. It's kind of like listening to politicians or the media, you know, the opinion media. I want to separate like actual journalism from opinion media.

But when you like look at like all the feedback we're getting, you know, you have to go do your own research. You have to come to your own conclusions, even with these tools. But man, these tools are making things so much faster. So you really have to use. And what else do we have on the docket here? I want to talk really quickly about kind of what we just got towards, which is AI regulation and then also anthropic. So just news first, Jason. Amazon might invest more in Anthropic.

They're an open AI competitor. The news item here is that billions of dollars are potentially on the table, but Amazon wants Anthropic to train on its own tranium chips and not invidia's chips. And to me, my read is this. If Amazon is able to set terms for the anthropic investment, that means that it has more leverage, which means that Anthropic is not doing as well as it might have hoped to, because you don't get bullied around by your investor unless they have,

something over you. Yeah. Okay. And then on the AI regulation front, there's a lot of commentary right now. And I think a lot of people are kind of curious what the new administration will mean for AI regulation. And I'm curious what you think here,

because I'm reading a lot of competing things. On one hand, we know that the technology advisors to Trump are pretty pro-tech. For example, Michael Kratios is one of the people that are working on Trump's technology transition team, and he used to work for Tile Capital, so there you go. But on the other hand, J.D. Vance has been skeptical of some major tech companies and also Elon Musk,

who is in Trump's ear, was in favor of California's controversial AI bill that eventually got vetoed. So it's not as simple as you might think to kind of figure out where AI regulation might come down in the current administration. And so I just kind of wanted to get your take on this. guess is they're going to be, they're ultimately going to be the party of less regulations and removing regulations. So in almost everything, I think they're going to be get out of the way of business. It's not the government's job to take care of citizens, you know, and which products and services they purchase. And I just think they're going to try to, on the margins, remove existing regulations and certainly not add regulations. what they say they're going to do. Once in a while, you know, Trump will say bombastic things.

Well, I'm using the term once in a while generously. Yeah. The entire discussion right now, I did a tweet about it, around immigration is a really interesting, illustrative example. For the next four years, we're going to be having the same conversation on repeat, which Peter Thiel summarized as, take Trump seriously, don't take him literally. So when we look at immigration, Steve Bannon said very clearly, like, we're going to export 15 million people. Trump said that at his rallies.

J.D. Vance said something different at all in Summit where he said, like, we're going to do it like a sandwich. We're not going to try to eat it in one bite. We're going to take small bites. The first bite's going to be people who are committing crimes, right? Violent gangs. Great. Nobody wants violent people in the country illegally. Easy. So then the question is, after they get the 500,000, let's say that's the number. Some people say it's a million. I'll just say 500,000, like super violent people who never should have been let in. Then you have 15 million supposedly who were let in over the last four years. I don't doubt that number is not directionally correct. Maybe it's 7 million, maybe it's 15, who knows, let's just say it's 12.

So what happens with those 10 million people? Are they actually going to drive them out of their homes? Literally on social media have a family or a kid in public school be dragged out with their mom who's working, you know, in an entry level. job or a dad who's working in construction illegally, you know, laying bricks. We're literally going to drag them out of the country, family of three, with a bunch of people and their phones taking video. It would be chaotic. It would also be absurdly expensive.

Like, it's going to cost tens of thousands of dollars to arrest each group. Then it's going to cost $100,000 per person to, like, house them for a year as you try to adjudicate where they're going to go. So I think we're going to see a lot of proposals like, we're breaking. making up big tech. And then it's going to actually manifest itself as we saber rattled at Meta and told them, we don't want you, you know, taking Republican voices or conservative voices off the platform. And then Zuck will bend the knee and say, okay, fine. We're not going to take proud boys or oathkeepers off the platform. You know, if people want to speculate about the election and was it rigged or not, you don't lose your account anymore, right? So you can now on YouTube, you used to, lose your account if you talked about election, if you claim the election was stolen in 2020. They would say that you were spreading election lies and they would suspend your account. It was against the terms of service.

Now it's not. They changed their mind over at YouTube. So that's, I think, the reality of what they're going to do. So in this case, my guess is there will be no AI regulation from the Trump administration. Zero. Yeah. Well, the only real question then is what happens to the Biden executive? order that was signed.

And I was just, yes, or one particular founder told Forbes, May Habib, the CEO and founder of a writer, they said that it was so weak that they may not even bother to repeal the EO because who cares?

Ah, which I thought was a really hysterical. Like, we tried something in AI regulation once and we're done with that entirely. It's going to be interesting. But I do think there's competing voices inside the Trump camp. And I will be curious to see who wins, who wins when, and which groups

win the most often inside of his... What has happened historically, I guess, is the question you have to ask herself. So I always encourage people to just look at the history of things and then ask yourself, what happened last time? And last time, there was going to be a big deportation. There wasn't. But the border was shut, right? And it was kind of shut in a controversial way. You know, people were separated, all this kind of stuff. But Americans want that, right? And so, or the majority of Americans seem to want that. So I think, you know, if we look at TikTok, that'll be the really interesting example for me.

Trump was against TikTok. Then he got a big donation from Jeffrey Yas, who has a big ownership position. And but, you know, they've been public about this, you know, anti-China position and China's influence here. So what is Trump going to do? I don't know, but I'll tell you that the big. That's the one I'm watching. The bill in the House and the Senate was very bipartisan. A lot of his party were vehemently opposed to TikTok.

And it's already on a timer to get banned. So something will have to happen to save it, essentially. And I think that the best commentary that I read on TikTok and the Trump administration 2.0 was that he just might not care now that the election's over and might just do nothing and just let his party's previous decision earlier to stand, which would be bad for Jeffrey Yoss. but it would be too bad if one person can write a large enough check and change American foreign policy. Right? I think that's always been the case is that big money interests can have massive influence. The fact that Biden didn't ban it during his term,

I think was because there were probably big money influences on the Democrats as well to not ban it. And also banning it on a pragmatic basis was untenable if you're running for office. office and you think TikTok is going to help you get elected. So if you are going to ban, they kind of quieted down on the TikTok stuff I noticed and Kamala really embraced using TikTok. She was like really posting many videos a day. Yeah. Because if you were to ban TikTok, I think they had a fear, a reasonable fear, they would lose young people before the election because it's so popular. Probably, I have a conspiracy theory here. Sure. I think Jeff Yoss wants. secretly for it to have the pressure.

And this is a very nuanced position here. But I think he wants the pressure on TikTok to go public so that he can liquidate his position as any reasonable investor would want to with such a huge hit or liquidate some large portion of it without the valuation being crushed. So the very delicate dance, if I was a shareholder, would be, well, we don't want to ban it. But we probably do want to make sure it's secure. And you would want to keep that pressure going so that the CCP releases it to go public and you can cash your shares in.

And the CCP doesn't say, you know what, this is an asset for us. We cannot give it up. It's too valuable of an asset. The fact that the CCP hasn't left the board, the Chinese Communist Party, has not left the board and they have not let it divest, proves to me that it's an intelligence asset. that is the conclusion I would come to because any other reasonable person would take the chips. This company goes public. It becomes a $500 billion company, $250, $500 billion like out of the gate.

And the excitement level would be unbelievable. Oh, huge. I mean, we're talking about Reddit right now. I mean, a TikTok scale and the addiction of that platform, when those numbers come out, man, people are going to buy that stock up like crazy. It would be the hottest IPO. the only hotter IPO I can think of would be SpaceX. I would say it's like SpaceX and then

TikTok and then it, you know, Stripe or the top three. I was just about to say Stripe, exactly. Yeah. But the Stripe is like compared to TikTok, like it's, TikTok's a consumer brand. It's got global potential. It's super addicting. It's super innovative.

All due respect to Stripe. It's a finance back end company that, you know, nobody really uses every day. It's not like you have a billion people using that product every day as like, oh, did you stripe it? Nobody's saying that, like on the consumer basis. You know, people are building it. So I'm looking at this first example.

There's going to be like a little scorecard and we should actually keep a scorecard here. Actually, let's do a scorecard. We can make a punch list here. We're into scorecards. Let's keep a scorecard. Immigration, a high skilled immigration. We'll do ones that are related to tech. High-skilled immigration is one.

We'll track TikTok divestiture. We'll track the Starlink broadband, rural broadband. We'll track that one. We'll track tips and no taxing of tips and no taxing of overtime. Those are all promises made by the Trump campaign that we should just track and see if they actually happen. How many days after they come in office and we can just track how many days till this happens? If at all. And, you know, that's, Kamala was promising $25,000 in startup funding for black Americans and $25,000 for first-time homeowners. Like, I would in good faith be tracking those as

well if they were going to give startup financing or they were going to give $25,000 for homebuyers. I would track that in relation to Zillow or Redfin. So this isn't a partisan exercise. This is a holding this new administration accountable to the promises they made that are related to business and finance. Are there any other ones? that you would add to that list? Yes, but I want to think about it for a minute before I, before I say it out loud, but I will be very curious to see about the taxes on tips because that is a very, very expensive proposition for the,

from like the federal budget level. And it's not the constituency of people that donate a lot of money. So I'm curious to see if that one gets jettisoned, back to our point about cynicism. But Jason, we know who would benefit in a major way from no taxes on tips would be the people who used to. toast and the POS people because they would be like, yeah, I now know that this barista is making, they were making $5 an hour in tips.

So when I paid them 20 an hour to be a barista, I know it was 25. And they were netting 75 cents of that. So net net, they were making, you know, call it $17 an hour after taxes, right? 75% of $20 would be 15. And then, yeah, maybe they. get, give, you know, a little bit up in their tips. So you'd be at like $18 and change. Now, in that same form, you'll be at $20 because there'd be no tax on that last $5. So the 15 would get taxed at 75% net, 25% to the government or maybe 70, maybe it's 70%, 30% would go to

local and depending on what state you're in. So maybe they're getting $14 plus 5 is 19 versus 2, which would be 16. Yeah, that's a major difference. Um, It's a major difference. Those are all Republicans or a large percentage of those would be Republicans or Trump voters, right? When we say Trump voters now, what we're really saying is the majority of the country. When you say Trump voters, we're saying 55, 60% of the country. So if that's the case, GOP members, they're going to benefit most from it. Where are you getting the 60% number?

Well, if half the country voted for, if Trump won the, I'm taking into account GOP members who didn't vote for Trump plus the people who did vote for Trump. So what did Trump win in the... 51%? 51. That was lost on our song.

So I'll be curious to say what approval numbers are. Because your point there implies that they're going to be very high. I mean, his approval number, what will Trump's approval numbers be based on? Because if it's 60% in GOP, Trump,

then it should be 60%. I think probably 60% of the country is either a conservative Republican or a Trump voter. Because I'm taking in the 51% who voted explicitly for Trump. And then giving him a little extra credit on the margins for having some number of people who didn't vote for him or didn't vote who are also Republican. Okay. I could be wrong. I just, I just, the number of moderates and a lot of Democrats voted for Trump this time, right? non-Republicans voted for him.

Well, it'll be interesting to see, and we'll get the data starting in January on how popular he is, and that'll help us understand. What do you think is popularity would be based on? I have an answer, but I'm curious you. Based on,

or where does it start in the opinion polls? Yeah, I don't know. Not where it starts, but just if you judge the next four years, what do you think at the end of the four years, the average American will vote, we'll judge him on? Oh, what will he be judged on?

Oh, yeah. Yeah, yeah. Like what would be, which is another way of saying, like, what would the Republican Party tell him to focus on in order for J.D. Vance to win as president, you know, in 2028, right? Like, so what would be the T up to a successful term? What would a successful term look like? In terms of the border? Yeah.

Would be one, I would think. That's something that seems to be on everybody's mind. inflation going down and the wars in Ukraine and the Middle East, maybe those would be three things I can think of off the top of my head. Inflation, economy. Yeah. You know, your pocketbook, foreign wars. Those seem to be two big ones and then the border.

Those three, I think, will be how they'll judge in. Am I missing something? What do you think those are the most important ones? I was just going to say inflation, GDP growth and the unemployment rate. I was going to be more narrow down onto the economic issues. If you were to look at those economic indicators, rank them, what would be the most? Yeah, I would say inflation first, job creation second to GDP third. In terms of importance to verse.

Yeah. Job data, then GDP. Yeah. I'm going to agree with you. I think the most, when I look back on this election and I was having this discussion on all in yesterday, which will drop this afternoon, we were like sort of doing the handicapping of everything. And I come to the conclusion, you know,

there seems to be three different buckets you could put into why one party, one candidate, one over the other. The candidate, the campaign, how the campaign was run, I think, are, you know, they kind of, the platform, like what they were running on, what issues, is kind of separate from how they run their campaign, in a tactical decision.

So if we were to put those into three buckets, you have the personality of Kamala and Waltz versus the personality of Trump in Vance. That's one, the candidates themselves. Then you have their platforms, and then you have tactically how they ran their campaign. In one case, you know, doing podcasts and one case not doing podcasts, right?

Or doing a lot of long-form podcasts, et cetera, versus not doing them. in one case running, you know, these rallies and, you know, maybe on the margins a little bit of hate speech or, you know, xenophobic stuff. Just, you know, spark the fires or flames a little bit in one case trying to be maybe above the fray. So if you look at those three, what do you think we're the most important? If you rank them. Candidates? For Trump's victory, you know, the real answer is, I could spit out a ranking for it.

you and tell you, you know, and answer the question, but I wouldn't have a lot of conviction behind it because one thing that's very interesting about Trump is his, he doesn't seem to fit into normal political physics. Like the normal was of gravity don't seem to apply to him in the same way that they do to other candidates. Uh, and so I don't know. I really don't know. The thing about Trump is that he's been consistently a surprise to himself, to the market, to voters, to myself. to party officials, two pundits. So I don't, I don't think I fully understand that well enough to give you a good answer. Yes, I've come to the conclusion. Please. That candidates matter, right?

I think Kamlo was the wrong choice. I think they should have done a bake-off. If they had done a speed run primary, I don't think she would have come in the top five. I think there's like five better candidates, Shapiro, Dean Phillips, you know, Gavin Newsom.

I think there was a bunch of people. So I put first that. But I think on the second thing, is really this tweet I did today, which I'll share here. Because I think this is something that we are underestimating. No, I'm curious. The price of a cheeseburger and fries at McDonald's.

Ah, if that doubles during your term, how do you think Americans are going to look at their last four years? And here, end of 2019 price of French fries at McDonald's, buck 79, mid-2020-4 price 419 chicken sandwich buck 29 then 389. Yep. Big Mac 399 to 749. Those are increases of 134, 287% respectively. So if you and a cheeseburger went from a buck on the, I guess the dollar menu to 315,

you know, I don't know exactly how perfect this is. This is from the poverty finance community on Reddit, as you see there. but I looked it up in like 10 different places and it's directionally correct. I don't think anyone on a gravitational basis can win if the price of McDonald's doubles. The number of people who go to

Americans who go to McDonald's, I was asking this question as well. According to Chad GPT, which gave me some sources, 87% of American households visited McDonald's at least once between June 30th, 2023, in June 30th, 2024. In other words, like in the past year,

87% of Americans visited McDonald's. Did you go to McDonald's in the last year? Hell, yes. I did too. Dude, sometimes I get sad. I need fries. Fries are incredible.

Flee of fish, outstanding. That is your worst. That is your worst opinion. I have to say, like, I just don't like the burgers at McDonald's.

I mean, why would you ever get a McDonald's burger if you could get in and out, five guys, or Shake Shack. I think, Like, there are just tremendous burgers out there. No, I understand $1.7 for a Big Mac and the other ones might be 12.

So if you're saying the reason you're doing it is because you can't afford the $12 burger at shake shack or $10 burger or whatever it is, I get it. But the fries is a whole different story. McDonald's fries and the flaya fish just unbelievable, unbelievable sandwich. We have to wrap. We'll talk more about these issues coming on, but I'll say that I don't think it's possible to win an election, like you said, with inflation the way it is, with prices like that. But this also underscores why I never understood gas prices.

Because people would talk about gas prices, like they were this existential cost in their family budget, and they never were for me. And so I never got it. But then I realized that people are often pretty broke. And so if gas goes up, they have to drive the same distance to work. It's how you feel. And like, how does it feel to pay fine? Did you ever pay over $5 a gallon for gasoline?

I never drove in California, so no. Yeah. I remember filling up at close to $6. Like before going to Tahoe, I had to get some gas, whatever. I was in the city. Yeah, whatever. Like, I'm rich. I don't care.

Like, I'm just going to fill out. But I saw it. And then my credit card, I couldn't fill the tank. And I'm like, why can't I fill a tank? It's like, oh, it went over 100. I have a gasoline powered car. I have a suburban, which is the largest. safest car you can buy, I believe.

So I got one of those to have my go car and to like, you know, drive in Tahoe in the snow. Because you can fit a lot of people in it, three rows. The reason was there was a limit at the gas station of $100.

So I had to then take a different credit card if I wanted to fill up the last third of the tank. Right. And do that because $6 times, I guess, a $20 gallon tank or maybe it's a 25 gallon tank is over 100. And that was when I first realized, oh my lord, like this emotionally had an effect on me. Now imagine you actually are living pay tech to paycheck, which I have in my life. Yeah, same. And that happens. And now it's like, I can remember

going to the gas station and putting in $10 worth of gas because I needed the other $10 or $20 in the 80s or 90s to go do something else. Yep. Yeah. I did a log of that with my brother and his Jeep Wrangler. We would get to the guys with like $1.37. They were like, sweet, gas. We can get a whole gallon.

I'll let's be young again. What a great episode. Thank you to everybody in the comments. I didn't see any questions here, but Fusion H.D. Fusioned HM says Jason wants liquidity. You're damn right. I do. I love liquidity.

I named a conference after it. liquidity is a great thing. I do want to see liquidity for a lot of founders and for LPs so they can invest in the next generation of companies. And were there, mani, any other questions we should answer here? Anything interesting come in?

Not that I saw, but I will just say everyone, we do have some notes on a couple of startup deals. And I'm trying to get the, the CEO of Command Bar, which just sold the amplitude to come on the show to talk about how that deal came together, lessons learned,

and getting everyone ready for what is supposed to be M&A Paloza in 2025. That's, I think, a topic we should talk about on Monday is just what we think is going to happen in M&A and the return of the SPAC zombie companies. Two trends that we should talk about on Monday, M&A and the SPAC attack. A lot of the SPACs that washed out, some of them turned out to be great companies and are staging massive rallies. I have so much to say about that, especially in the case of root insurance. but we'll keep it for Monday. Please.

I'm Alex over on X. He's Jason. This is Twist. If you're not subscribed to us on YouTube or your podcast app, you're making a mistake. We're back on Monday. We'll see you guys then.