This Week in Startups - TWiST News: Skydio's Drones, High-Skill immigration, and M&A Unleashed | E2040

Starting point is 00:00:00 Thank you for tuning in to this being start-ups today after the election. I know some of you are here to hide, some of we are here to celebrate, but everyone's welcome. We are going to talk to the CEO of Skydeo, Jason. They've been in the news for running afoul of sanctions in China. They're incredibly important American manufacturing company in the drone space. Lots to talk about there. Then we do have a quick look at what happened since the election results got called last night. We're going to talk about immigration and especially M&A and some other winners and losers

Starting point is 00:00:26 that relate to the startup world. And then Jason put me to the task and said, that Alex go out there and find a whole bunch of different ways that search works today to put the upcoming perplexity round up to $9 billion into context. So we've got a packed freaking show today. It's going to be great. This week in startups is brought to you by Oracle. Oracle Cloud Infrastructure or OCI is a single platform for your infrastructure,

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Starting point is 00:01:19 Get 100 free hours to start building at AssemblyaI.com slash twist. All right, everybody. Welcome back to this weekend startups. I'm your host, Jason Kalakannis. With me again is Alex Wilhelm. It is November 6th. It's the big day, Alex. It's the day after the big election.

Starting point is 00:01:36 How are you feeling, Alex, the day after? I'm doing processing, but I do think that it's good that the results were clear. Forgetting who won, I think it's very constructive that there was a clear victory in the popular scenes and electoral college vote. I think that diminishes acrimony tensions and argument. about the election itself and then we can get on to the policy questions. So that's good. That said, uh, I did not vote for president Trump. And I have concerns about him on a policy and personal level.

Starting point is 00:02:10 But here we are. And, um, yeah, I guess I'm still kind of just digesting all the numbers, expected policy positions. We have a lot of that on the show today, Jason, but I'm curious. Uh, how do you feel? I, uh, felt this was going to be a close race. I thought it would be closer, to be honest. Um, I had,

Starting point is 00:02:27 problems with both candidates. I made that very clear to everybody. Not a fan of socialism. I felt one candidate was pretty like much in the socialism camp, maybe moving to becoming a moderate. I don't like authoritarianism either. And so I was looking for a different candidate. But now that the country has picked their winner, I think it's critically important that everybody get behind that person and support them. And let's hope for the best that, you know, and that's where I'm really hoping that the people Trump listens to include our friends, Elon, Sacks, Shemath, etc., people around them, and that they actually do something productive, which would be to lower spending. I think there's, like, there were like two existential things I was actually

Starting point is 00:03:14 worried about. One is spending. That's by far my number one. And number two is like censorship and like overreach by the state. Whether it's like breaking it to somebody's home and confiscating their squirrel and euthanizing it or policing speech and going after freedom of speech. None of that stuff I like. But that was like a distant number two. And I feel like both those issues might get addressed by Trump in a positive way. And so I will hope for the best here. I'm very disturbed, though, about, you know, some of the deportation stuff just on a practical basis.

Starting point is 00:03:49 Yeah, we're going to get into that in a little bit. I'm super excited to get to work here. So let's do it. All right, Adam Brigh is the CEO and co-founder of Skydeo, a drone company, Jason, that was famous back in the day for building really cool consumer drones that followed you around and took video. They were awesome. My friend Kyle worked there. And now the company has pivoted more towards the enterprise,

Starting point is 00:04:10 working with governments in defense contexts and with corporations, and they've raised more than a half billion dollars. So please, welcome to the show, Adam. All right. Nice to see you, Adam. How are you doing? Doing well. Great to be here. So maybe for the audience, just explain what Skydeo does. and what's happened here? So we make autonomous drones.

Starting point is 00:04:30 They're basically flying sensor platforms, and we serve critical industries. So we sell to public safety, we sell the defense, we sell the critical infrastructure operators, energy utilities, and our products basically enable them to get a real-time digital picture

Starting point is 00:04:43 of things that they care about. So they're very easy to fly. You can deploy them in a few seconds. You can use them to inspect a cell tower or power plant, or you can use them to respond to 911 calls. and one of the things that I'm most excited about, and this is a market that's rapidly accelerating, is the use of drones in public safety,

Starting point is 00:05:01 where you have drones that live in network-connected charging base stations. We call them docks. They could be on top of a fire station, on top of a police station. You distribute them across the city, and then you can get on scene in a matter of seconds after there's an emergency or an incident, and the drone can provide better information to first responders. And we're seeing this really accelerate across the nation,

Starting point is 00:05:23 and it's transformative for public safety. It keeps community safer, it keeps officers safer, it increases transparency and accountability and policing. And I think it's one of these things where, drones, we started Skydeo in 2014, there was a huge wave of hype and excitement around the technology 10 years ago. It's kind of been this like 10-year overnight success

Starting point is 00:05:43 where there's been this steady bill for a long time, but we're finally at the moment where the autonomy technology is good enough, the hardware and the software is all there, and you can really start to deploy these things at scale. to in many ways transform the way the physical industries that we all depend on work. And there are a couple of things, Alex, I remember having been tracking Adams Company for a long time here. There are a couple of unique things about your solution. One is you need to have a housing for drones if they're going to be truly autonomous.

Starting point is 00:06:16 I have a drone. I've got a DGI on the shelf over here. I use it, but I have to set it up. I have to turn it on. I have to make sure it's charged. I have to swap the batteries out. There is a long list of things that I need to do before the drone goes out and does its work. If you're using Skydeo, you have a landing pad that does inductive charging that manages the drone on the roof of, say, a police station or a building like a Walmart or if there was a solar

Starting point is 00:06:46 array, there might be like a shed or something where this thing exists. and then it can take off and do autonomous flying. That is the product in terms of the key features, correct? That's exactly right. I mean, we sell drones without the dock, and there's all kinds of exciting uses that we can talk about there. I mean, these things are critical on the battlefield as well, where you're probably less likely to have docs.

Starting point is 00:07:12 But the dock is really the full automation. And one of the analogies that I use, it's kind of like a cloud server or something. Like all of us use cloud servers all the time, without thinking about it, right? They're just in the background doing useful work for us. And that's what docs do for drones. You can have these things existing.

Starting point is 00:07:27 They can be flying themselves on a schedule, automated missions, and you're just interacting with it through a phone or through the web browser. And so it becomes a purely software-defined experience, which is just incredibly powerful for all the different things you can do with drones. All the sort of physical friction is gone, and it's an automated device that just lives out there and does useful work. So, Adam, about that, your analogy to cloud services, I think is really great. But one thing that I like about cloud service is that,

Starting point is 00:07:50 I rent them. I don't have to own them. And so when you make that analogy to me, it implies a future in which we have Skydeo drones inside their little homes. Out and around the world that I can just effectively lease by the minute. Is that the direction you're going in? So it's a really interesting idea. It's certainly something we think about. And I think yes. I think that's a not unlikely future scenario. I mean, the instances where we're seeing this happen the fastest and the first is kind of shared infrastructure for cities where, you know, for a city, you can have a shared network. of drones that are responding to 911 calls. They're responding to fires, but they're also inspecting buildings and monitoring city infrastructure and monitoring coastline. And, you know, it's a really, really powerful tool. Could you tell me about the number of drones we need?

Starting point is 00:08:35 So I live in about a million person town. And I'm just curious, to have shared drones for just public services, fire, police, etc. Is that dozens? Is that hundreds? I don't have a good idea of how many we need to cover the city effectively. Yeah, well, it depends on, you know, know how many different kinds of incidents or events you want to respond to. What really drives it is volume. It's, you know, people sort of tend to think in terms of area of like one drone can

Starting point is 00:08:58 cover a few square miles, but what really drives it when you get into it is volume. So like in the context of policing, what, how many calls for service are you getting? So, you know, round numbers, the U.S. has 240 million calls for service per year. One drone annually can respond to something like 2,000 calls per service. So, you know, a city, like a city of population of a million people, people, you're talking about, you know, a couple hundred drones to cover it completely. You don't need to start there. You know, you can useful work smaller than that, but that's the sort of order of magnitude. All right, let's talk about AI, everybody. It's everywhere self-driving cars, breakthrough medical research, and of course, business tools that make everybody better and faster

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Starting point is 00:10:50 See if your company qualifies for this special offer at oracle.com slash twist. Oracle.com slash twist. For people who don't know, your firm is the largest producer of drones in the United States. Domestically, you are now the largest producer. Is that correct? That's correct, yeah. I mean, there's different categories. People are making toy drones.

Starting point is 00:11:11 But for this class of sort of like enterprise-grade flying sensor platform, were the largest producer by a pretty wide margin. And the drones consist of, obviously, the motors and the propellers. You have GPS. You've got a computer on it. There's a lot of different components there. Yeah. And most people are buying drones, like I did from a company called DGI.

Starting point is 00:11:33 Are they the 800-pound gorilla in the space? They are, yeah. And this is a Chinese-based company, from what I understand? It is, yeah. How should we feel about it? that in America, we're talking about drone warfare, and then I guess we'll dovetail or back into your issue. We have a company like DGI producing drones here in the United States. Should that, is that a healthy relationship for the United States to have given that people

Starting point is 00:12:01 believe now that drones are going to be a vector for terrorist attacks or just generally attacks? And they're being used in warfare, obviously, in Ukraine. Yeah. So there's a little bit of interesting historical content. context here. So drones, you called out the key components of drone. And one, a simple mental model to think about it is, is it's basically like the components that go into a cell phone smashed together with a quadcopter. So like four motor, that's, you know, high level, that's kind of what we're doing. You know, you've got compute, you've got wireless, you've got cameras, and then you've got this on, on the frame of a quadcopter. Historically, radio control toys

Starting point is 00:12:40 and bones are all made in China. And so China, from a hardware perspective, got out to a pretty substantial lead starting like 15 years ago. And the sort of first wave of predominantly manually flown drones were almost all made in China. And DGI was the big winning company there. What's happened over the last decade is that these things that started off looking like consumer toys have just become critical tools for all these critical industries. And as that has happened, it's become increasingly clear as the like the, The geopolitical tension with China has gotten them up. It's just, it's very risky to be depending on China for these products that are critical

Starting point is 00:13:23 to national security that, you know, are used for public safety, that are used on the battlefield. I mean, it's very much dual-use technology. You can see this super clearly in Ukraine, but the sort of civilian class quadcopter is being used at very, very high volumes on the battlefield. And ultimately, you know, you can see this in other categories of technology as well. the products that come out of China tend to align with Chinese foreign policy and Chinese national interests. Shockingly enough, I'm curious, though, about Skydeo and Chinese manufacturing just kind of going back in time. So I know you guys are now the largest manufacturer of drones in the U.S. for your class, but was that always the case?

Starting point is 00:14:01 Or was there a history at the company of using Chinese manufacturing lines that have now changed? So we, from the very early days, we did all of our manufacturing in the U.S. So we have a global supply chain, and we can talk about that. sure, we will. But from the very early days, we did all of our manufacturing in the U.S. from our first product onwards. And honestly, we didn't start doing that because of geopolitical concerns. We started doing that just because we felt like that was the way to build the best product. One of the things that people misunderstand about drones, it's much closer to building like a fighter jet or a spacecraft that people realize. I mean, this is like you've got aerodynamics

Starting point is 00:14:36 and thermals and vibration and very extreme mass constraints. It's a really extreme engineering challenge. And just like most aerospace companies tend to be pretty closely coupled with manufacturing, so it is with the most successful drone companies. So we started doing manufacturing in the U.S. basically so we could just have it down the street from where we were doing R&D. And we've kept doing it sense. And it's become a really important strategic advantage for us. I mean, the customers that we serve, especially the military, this is something that they care a great deal about. And we were, I mean, we were swimming way upstream in 2016. In 2016, people thought this was insane. Like, just go to China, find a factory there to build.

Starting point is 00:15:11 it. We didn't do it. We invested in building up the capacity in the U.S. And I'm very glad that we did. I think it's critical from a national security perspective. Well, it also dovetails with the news that caught my eye from a couple days ago that the Chinese Ministry of Foreign Affairs sanctioned three companies, edge autonomy operations, Huntington Ingalls Industries, and Adam, a little company called Skydeo. So on that point, any operational disruptions, I presume not given what you just said, but wanted to ask. And two, how shocked was the company that it was. singled out by the Chinese government for essentially getting out of China.

Starting point is 00:15:45 Yeah. So I should be clear. So we do all of our final assembly manufacturing in the U.S. We still have a network of global suppliers. All drone components come from China. Over the last two or three years, we've done an enormous amount of work to get our supply chain out of China because we anticipated this as a possibility. We still had one critical dependence, which was batteries.

Starting point is 00:16:06 And so our batteries for our latest drones were coming from China. So that is a disruption. to us. So we had, you know, we were bringing up parallel suppliers. We have now accelerated that work. And we anticipate being able to, um, to basically bridge the gap with inventory we have on hand. But, um, it'll be probably next spring before we have a new battery vendor. Well, China doesn't want you to sell drones into Chinese companies or to American companies in China. That's what this is about. Well, so the, the sanctions, the stated reason for the sanctions was selling drones to Taiwan. So we, now our first customer in Taiwan is the Taiwan

Starting point is 00:16:50 fire department. So you can, you know, you can judge for yourself what the ulterior motivations might be here. I mean, the other backdrop for this is that GI, the leading Chinese company, faces increased pressure in the U.S. You know, there's, there's legislation being considered that would, that would essentially ban them from introducing new products into the U.S. I think it's plausible that this was a retaliatory effort by the Chinese government against that. And we've also gotten big enough now that we're competing with DGI successfully. We're taking market share away from them. And we're really the first U.S. company to do so in the civilian markets.

Starting point is 00:17:31 And so I think there's kind of a trade war, national security backdrop to this whole thing. Well, this actually, I think, is a really interesting point. If you were to talk about, you know, networking equipment, Huawei comes to mind. We don't allow Huawei in the West because we know that it would have backdoors for the CCP to be able to look at data. And vice versa, I don't think they want Cisco equipment in China on their backbone looking at data. They understand it's a possible risk. Now we get to autonomous devices like self-driving cars and drones. We've already seen drones being used in this new battlefield in Ukraine and being highly

Starting point is 00:18:18 effective and you can make them yourself. If you were to go to instructables, you can basically build a quadcopter, right? This is like a hobbyist are doing this all the time. those quadcopters, they have no rules on them. There's no geo-fencing. So if you wanted to put an armament on it or bomb, whatever you wanted to do. So how, and then you have self-driving cars. Obviously with self-driving cars, somebody could take over a fleet and do bad things with them.

Starting point is 00:18:46 Like, God forbid, we've seen, you know, terrorist attacks where people drive cars through markets. You could do that with a fleet of them if they were hacked. So this is a new vector. How should we look at drones? Should we, in your mind, as Americans, as the West, just wholesale ban the use of or the importing of these drones from China because of the risk? What do you think the actual risk is here in terms of public safety? So I think the thing that's really important to understand is that the industry is still very early. You know, like most people are familiar with drones in the context of like consumers and videographers and cap frame cool video.

Starting point is 00:19:24 Yes. And I think that the, I don't want to say that there's no risk there. but I think the risks are pretty low. But if you think about a future, and this is like this is happening now where these things become infrastructure, right, where they're installed at like every power plant, every city has like hundreds of these things across the rooftop. They're all network connected. They're autonomous. They can be controlled remotely over the cloud. I mean, you know, I think it would be pretty insane to accept the future where all those things are Chinese products that are ultimately going to be, you know, tools of Chinese policy.

Starting point is 00:19:55 Like if you're concerned about Huawei routers, the idea of like, network-connected autonomous devices distributed across our critical infrastructure in U.S. cities, like they're not, you know, it just doesn't seem like a great idea. And so I think that's the, that's kind of the key distinction I would make is like, is looking towards the future, like, where is this technology going? And I think if you look at where it's going, it's just, it's untenable in my view to say that like, you know, we want all this stuff to be to be made in China. I want to ask more about that because one thing.

Starting point is 00:20:28 think I'm a little bit concerned about when it comes to an expansion of drones, something that in general, I'm very bullish on, is the cybersecurity element, because it's great if drones are made in the U.S., we can control the supply chain manufacturing, et cetera. But if they're still hackable, they're still in danger. So I'm kind of curious if you can tell me just a little bit about how Skydeo approaches the cybersecurity element to this to make sure that drones at power plants literally don't go rogue. Yeah, look, it's the two number one things for us are reliability and security. Those are the two things that make products useful for that kind of critical application. So, you know, we basically do everything you can imagine up and down the stack. I mean, we do like

Starting point is 00:21:05 secure food, secure signing of our software at the route that we like control in our factory. We have our drones authenticate to our cloud in a secure way. We have all the internal processes and controls. So, you know, we do everything that you need to do at every layer of the stack. Like the link is encrypted. I mean, all the different things. Yeah. To, uh, to, uh, to, to be as secure as you possibly can. Okay, well, more on the defense point. And then I promise we'll wrap up here. But drones in Ukraine have been used for a host of things from surveillance to

Starting point is 00:21:35 literal combat missions. And I'm just kind of curious, is Skydeo willing to make drone systems that are used for more than surveillance in conflict zones? Yeah, it's an interesting question. So we, I mean, the U.S. military is a major customer. We've delivered to Ukraine. You know, our identity. is a company is different from, say, a company like Andrew.

Starting point is 00:21:58 Like, Andrew is pretty clear that, like, their goal, they're like a pure play defense contractor. Yeah. We're building, you know, people call it like dual use technology. Like, we're building this flying sensor platform that's used for all these different kinds of industries and applications. But the military is an incredibly important customer of ours and we are deeply committed to their mission.

Starting point is 00:22:15 From a product perspective, I would say that we're focused on building flying sensor platforms. We know that you can attach payloads and other things to this. And we're supportive of whatever military customers need. to do to accomplish their mission and putting munitions on there, being able to drop these things is it's certainly part of the portfolio for them. And that's something that we, you know, our platforms can can support like the X-10, our latest flagship drone, has payload base, modular attachments. And I think this, I'm actually glad that you asked this. I think this is kind of like a, it's somewhat of a controversial topic in Silicon Valley, like, how's this technology

Starting point is 00:22:47 really going to be used? This is something we've thought deeply about as a company. And in my view, you, if you're going to sell to and support the military, you need to, you need to trust their judgment on how they're going to use these things. I mean, these are people who devote their lives to protecting our nation. They put their lives on the line. And I just don't think, like, us in Silicon Valley's technologists are in any position to say like, oh, sure, you can use this, but like, you know, no, you're not allowed to have to do it or something. Like, you know, and so, yeah, so that that's the way that we think about it. Like, we're not, there's a different category of drone that's basically like a kamikaze drone. It's like a, a

Starting point is 00:23:22 flying bomb, essentially. It's pretty different from a technology perspective. That's not what we build. We're focused on building best in class ISR systems. Yeah, yeah, yeah. But,

Starting point is 00:23:31 my brother's active duty, so I care a lot about this because, you know, he's been in war zones and so forth. But there's a difference between, like, you know, winking at the army and saying, yeah, we'll put bays on it

Starting point is 00:23:40 and kind of doing it yourself. And I'm just curious, why not take that next step and do the work to turn them into more andrial-style weapons platforms? I mean, to me, it just seems like you're right there, but you're not taking that last step.

Starting point is 00:23:50 But I'm just curious, why? I think it's, they're kind of different technologies. I mean, even the folks who are building munitions, you know, it's like there's a whole expertise in like building explosive devices and targeting systems and like how all that stuff works. And I think the product tradeouts are pretty different if you really want to build. I mean, like, I don't know.

Starting point is 00:24:10 The video that Andrew put out got a lot of plays. Like, they built this thing that's like a terminal flight quadcopter. Like there's a whole slew of product tradeouts that they made there that are pretty different. Our product is like better for what they call ISR intelligence surveillance. and reconnaissance. But X-10 was designed with payload bays for whatever missions customers need to do. And I would also say philosophically, I think it's a different, you know, waking up every

Starting point is 00:24:35 day, figuring out how you're going to make the thing like more lethal is like different from waking up every day to figure out how you're going to make the thing like better responding to 911 calls. Like I think, you know, the mindset of like building something that's like the express purpose of it is to be like a lethal machine is somewhat different. I think, you know, it's a little bit different from like R-Corp DNA as a company. Yeah, I think it makes total sense. And there are contractors who make Humvees and there are contractors who make 50 caliber guns that go on Humvees.

Starting point is 00:25:08 And yeah, there are different levels of expertise. And so, yeah, I see there are being. That's a good analogy. I love Notion. I love it. I use it all day long. I have built my company around Notion. And every startup claims that when you add AI to a product, it's going to change everything.

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Starting point is 00:25:58 of Notion and your other apps inside of Notion, and then you can generate docs in your style, right? They'll also analyze the PDFs and images that you upload to Notion, and it'll chat with you about anything. So imagine everybody in your organization, collecting knowledge, and then you have the ability, easy, peasy, lemon squeezy, to ask questions about that. It is brilliant. Notion is my favorite tool in the world right now, keeps everything in one place. It makes me feel like our organization is not losing knowledge. And you know what? Sometimes people retire.

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Starting point is 00:26:56 It is so magical. And you know what? I'm using it for everything. I have one for my personal family office. I have one for inside. We have one for all in. Everybody is using Notion. You don't want to lose data. You don't want to lose knowledge. Notion.com slash twist. And when you use our link, they know you're supporting the show. What do you think of Nova Sky Stories as we wrap here? My friend Kimball Musk has a company that brings art to the skies and we're seeing more and more of this. What are your thoughts on these drone shows and light shows? Do you guys participate in that?

Starting point is 00:27:29 Because it does seem like that is a perfect analogy to what war might look like in the future. It's like a thousand drones going out there. Yeah. So we don't do that ourselves. The way that most of that stuff works, I mean, basically all of it works. It's using GPS. So basically like all those drones have GPS on them. you can pre-script out the trajectory that all of them are going to fly.

Starting point is 00:27:51 They fly around, they turn on off the lights. GPS doesn't work at all on the battlefield. It's just always jam. This is one of the key lessons in which invalidates sort of the first layer of technology for most drones. So Skydeo drones have a visual navigation system so they don't need to rely on GPS. But I do think there is this fairly critical point here. I'm not the first person to make this observation. But every time that you see like a 10,

Starting point is 00:28:18 thousand drone light show in China. Yeah. There is sort of this element to that of like, it's a display of power, right? It's a display. I agree. That was my interpretation of it. Like, they're sending a message to Taiwan that like 10,000 of these things could co over your city, identify people with guns.

Starting point is 00:28:34 I also known as soldiers and just zip and kill, you know, 10,000 people with 10,000 drones. I think that is the future of warfare. I, you know, I think it's one of these things where you're getting a glimpse into like, oh boy, you know, this is really critical technology and we need to like, we need to step on it in the U.S. You know, we need to like, we need to have strong industry here. We need to have robust policies. We need to think about national security. And have to have the ability to make every component, right? I mean, I think that's one of the challenges here. You're only as good as your

Starting point is 00:29:08 slowest supplier. So if you've got like a component in these drones and you want to make 10,000 of them and you're getting your rotors from China or Vietnam and it's a Chinese manufacturer who has a factory in Vietnam, we could basically not be able to create drones and they can. Yeah. So supply chain security integrity is super critical. You know, I don't think it necessarily all needs to be made in the U.S., but it's certainly having it within our circle of really trusted close allies. Yes.

Starting point is 00:29:36 I think is very important. This has been amazing. Congratulations on the success of the company, doing great work. And in some ways, congratulations on the Chinese government being so concerned about you that, hey, sanctioned you for helping the fire department in Taiwan with putting our fires and helping. Yeah. Thank you guys for having me on. It's a conversation. We're proud to support Taiwan.

Starting point is 00:30:03 All right. And if you're an engineer, Skydeo is hiring. Amazing engineers I know. So go to the Skydeo webpage and apply. If you're a great engineer, right, you need some engineers. I think. Yeah, I'm not neutral on this, but I think we work on the most exciting stuff in the world. It's flying robots.

Starting point is 00:30:19 It helped people do their jobs better. It keeps them safer. And a lot of exciting stuff happening now, but it's still very early days. Yeah, it's early days and it's super awesome. I'm waiting for somebody to make one of these for homes or ranches and just keep track

Starting point is 00:30:35 of the cattle and the... Yeah, we get... So within our most requested feature with our investor community, which has something about investors, is the ranch use case. I think the number of target customers there might be. There's like five of us, six of us. Yeah.

Starting point is 00:30:50 So making, this is the crazy thing for poor founders who have, you know, VCs on their board. They're like, you know what? I need this. Can you make me a $50,000 drone for my ranch to go do, to those stories and count my sheep and my steer? It's pretty crazy. But it's super awesome.

Starting point is 00:31:11 and we'll get you some sheep counting groans for your ranch day out eventually it's going to be a thing where I think people will have these on the top of their homes right yeah I agree I think that it's like classic technology deployment like we're starting in the highest value highest impact scenarios like 911 call of life and death situation inspecting the energy grid but like you know our costs will keep coming down the technology keeps getting better and and yeah I think there's a very clear path to this becoming like a standard part of building security, standard part of armed security.

Starting point is 00:31:44 I mean, anywhere where you have to cover a large surface area and, you know, record what's going on, I was just thinking ski season's coming and I was just watching this incredible documentary on Netflix about this tragic avalanche that happened in Palisades. You know, the ski resort in Tahoe. It happened in the 80s. And it was just real tragedy. And we had another one happened in Avalanche where a couple of people passed away. just last season.

Starting point is 00:32:13 And one of the things you have to do is they literally shoot mortars, Alex, at the mountain, to start avalanches when there's too much. And this crazy documentary that I watched, it's well worth watching because there are these people who do the science of mountaineering and monitoring these mountains is something that started at this specific place in Tahoe. and sending drones out to test the snow, to monitor the snow, to know the differences in snow and where snow is building up, and then also to drop a grenade, essentially,

Starting point is 00:32:49 in certain areas to start avalanches means a person doesn't need to do that mission, and that's just going to be better for everybody. Yeah. I mean, it's pretty closely related, like any sort of natural disaster, like in the wake of the hurricanes, the two recent hurricanes, drones are like the most critical tools. Like we have a bunch of customers in Florida. And after Milton, I mean, they had drones in the air like multiple drones in the air 24-7.

Starting point is 00:33:14 Like initially it's search and rescue and then you're helping helping to like map and assess the damage. And I think it's another one of these sort of glimpses like you get in Ukraine where it's just like, oh my goodness, this technology can make such a big difference. Yeah. In the high-stakes scenarios. And it's, you know, it's exciting. Having been working on it for 10 years, it's exciting to be at a point now where it's like. And some of them have the ability with a payload. that you could actually rescue a human.

Starting point is 00:33:37 Oh, yeah. You can drop a flotation device. Yeah. Drop a battery. Actually, one of the most common, this is a little bit surprising to me, in search and rescue, one of the most common things they want to drop is a battery because people have their phone, but they ran out of battery. So you drop a battery charger down to them and they can get back online and communicate.

Starting point is 00:33:54 Fantastic. And some of them, I've seen people get lifted in a drone, right? Some of them are powerful enough that you could actually lift somebody out of a dangerous situation. I'm wondering when that will happen for lifeguards. Why would a lifeguard go out into, or a coast guard go out into this open ocean when they could send a drone with a buoy and just drag the person in? Yeah. I mean, there's really just a continuum from drones up to the like beetles. I was just about to say that. Yeah, absolutely. It's kind of the same ingredients. It's like electric propulsion, autonomy, autonomy, automation. And I think, I mean, unsurprisingly, like you're going to

Starting point is 00:34:31 see drones reach massive scale first, but there's non-trivial sort of technology crossover there, like basically to build a bigger drone. And yeah. Yeah, the drones to save, you know, the drone rescue swimmers are definitely coming. And the documentary buried, the 1982 Alpine Meadows avalanche, is the name of that one if you want to watch it. Alpine Meadows eventually became Palisades. And then what's called Squaw, I think, for a little while. All right. Great having you on the program, Adam, and continue to success. If you're an engineer, go apply at Skydea. Well done. All right. Thank you guys. It really is amazing, Alex, when you think about watching this technology, you and I have been watching drones, we've been watching VR. We're now watching AI. You watch these technologies and they go through a cycle, right, where they are in absolutely capture everybody's imagination. And then founders need to basically work a decade.

Starting point is 00:35:30 to make an actual use case exist. And what I love about what Adam's doing at Skydeo is, you heard in there a incredible piece of startup advice. I don't know if you heard it when he dropped it, but it is, what is the highest use of this technology? Where is the most acute situation? Paul Graham called it, I think,

Starting point is 00:35:48 hair on fire situation. Like, if you're selling buckets of water and somebody's hair is on fire, they really need it. Some people refer to this as the vitamin versus a painkiller. Vitamin's a big business, But like, yeah, you take your vitamins today, or if you don't, you might forget, it's no big deal.

Starting point is 00:36:05 But if you have pain and you broke your leg, man, that Vicodin, you're going to seek it out if you've, you know, really need it. And they just work backwards. Hey, we know people in the military need to assess situations. They may have to drop payload or pick up payload, whatever it is. The sending a burrito is already covered. You know, like getting your burrito by a drone is an $8. a $15 service charge,

Starting point is 00:36:33 it doesn't actually make sense. And so many times founders come to me, Alex, with like, I want to start with the masses. I want to start, and sometimes it's really good intentions. Like, I just think everybody should have this technology.

Starting point is 00:36:45 Go after the most expensive, highest margin business first. Why? Those customers are hair-on-fire customers who have money and they're willing to pay a premium, which then allows you to iterate on the software and then eventually get to the rescue swimmer,

Starting point is 00:37:01 which there might only be the need for a thousand rescue swimmer drones or 10,000. So you don't go after that first. And those people are, you know, comparing it to a $20 an hour lifeguard. It's not as much a stake as like a Black Hawk helicopter with Navy SEALs, which are, I think, valued by our military at about $10 to $25 million for each Navy SEAL. If you save a Navy SEAL from dying, the way the government looks at that, not just the human life,

Starting point is 00:37:30 but the cost of that asset, as my friends in the military would say, I had a friend who was a green beret. He's like, I'm worth $12 million currently. My friend's worth $22 million, depending on if you're a medic or, you know,

Starting point is 00:37:42 whatever you are. No, I really like to, I'm very optimistic about drones, writ large. I'm very optimistic about Skydia and have been watching technology for a long time, to your point.

Starting point is 00:37:53 It's just very exciting to see how things go, one, two, four, eight and then a thousand because drones were something that I think we all had too long in the consumer bucket and the number of military and corporate uses are so large. Frankly, I'm very excited about Skydeo. I'm a little surprised at Jason. They're valued like $2.3 billion in their last round, which just feels very small for a company with that large of a footprint and is already causing geopolitical waves, yeah? Hardware is hard. So, you know, I really always tip my hat off

Starting point is 00:38:22 to hardware founders because, you know, you have to inventory stuff. You have to prototype stuff. And with software, you know, there's no inventory in the software business. And if you make software and it's janky, okay, yeah, just rewrite the code. Start from scratch. Fire the developers, hire two new developers. Do it in parallel. Make three versions of the same feature with three different teams.

Starting point is 00:38:44 In hardware, you cannot do that. It's cost prohibitive. Absolutely. And you have to go through a very grinded-out process, as I learned with CafeX, with density. Dotio, which is doing people counting. I've made these bets and my lord any I have another one free drum which is like drumming sticks that teach you how to drum it's very cool you know these poor founders have to deal with the Kickstarter elements of what they do and then scaling it and man if you have a production problem you could be sitting on inventory you have customers who want to buy it and like one supplier screw something up and literally you're as fast as your slowest and least reliable a person this I think will dovetel nicely into the Trump discussion and our country and relationship with China. Yeah, yeah, that's why I'm so glad we had the CEO CEO on because we're literally looking at a situation in which there is a American company dealing with a geopolitical tension that is driven by decisions paid by administrations.

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Starting point is 00:41:10 to delight your customers. To let everyone understand what happened last night, Trump, former president, won the White House. His party took over the Senate and is looking pretty good in the House as we come here today. We don't actually know he's going to win the House, but it's looking GOP if you track

Starting point is 00:41:27 prediction markets and so forth. And as Jason said at the top of the show, I think it was about 51.5, 47 and a half, which in American terms is a shalacking. This was not... That is the technical term is a shalacking. Yes. So two points is normal. One points close.

Starting point is 00:41:42 Four points is a lot is how to kind of think about that. A reaming, yes. they got trounced. And so if we look at it, I think, you know, it does beg the question, why? Why was this such an incredible victory for Trump? And, you know, if I look at it, there's many layers here. I think a lot of this comes back to entrepreneurship. And maybe it's just the glasses I look at it.

Starting point is 00:42:10 But I do think there is an existential battle in America right now. And if you were to look at Europe, very soon. socialist-leaning, you know, maybe less entrepreneurial, less rabid capitalism, you know, is the version over there. And then here we have a capitalistic system, which is very hard driving, and it does create a polarization of wealth. And I think one party picked, we're going to go pro entrepreneur, we're going all in with Elon, with Sachs, with Chamath, with entrepreneurship, with venture capital. And they picked a venture capitalist as their number two. And they picked a billionaire, capitalist as their number one.

Starting point is 00:42:49 So putting aside how I personally feel about Trump, I have issues with character, which I think any, trust me, my friends who are the biggest Trump supporters in the world have problems with his character. And they've been public about the problems they have with this character. They put all that aside.

Starting point is 00:43:04 And if we just look, career politicians on one side and capitalists on the other, that's what happened here. And I think people, because the personalities are so large, Alex, people kind of get caught up. in that. But putting aside the personality issues and the style issues, which in some cases are

Starting point is 00:43:23 absolutely abhorrent on one side and that I'm not a fan of. I don't like the name calling, etc. But let's just pause for a second here. Billionaire, real estate tycoon, and venture capitalist beat a lifelong public serve, two lifelong public servants. That, I think is what. but we as the technology community, venture capital, and as Americans should really look at. And then they enlisted Elon, and he seems to have pushed a lot of young men to vote, a group that previously hadn't voted.

Starting point is 00:44:03 And I don't know if that's come out in the statistics yet, but that's what I was hearing, since I have a lot of friends on the inside, was that, hey, there's going to be a change here in the activation of young men who are capitalist, entrepreneurial, and not part of this previous group, you know, I'll say in the social side. So that's the argument that I think is worth considering.

Starting point is 00:44:26 What's your take, Alex? I think that is a very, that's one point of view you could take. I think it was inflation and a long period of spending in low interest rates across parties that caught up to us. And the party that was in office when inflation took off lost. that's my reason. You're talking about nuance and policy and such, and I just don't think that carries amongst the broader electorate the way it does amongst our highly educated, wealthy group of friends out there. Yeah, interesting. Average folks are pretty dumb and pretty poor. Yeah, there is that. But I do think they look at these folks as heroes. And I think they looked at one group as aspirational and one group maybe as not aspirational. That's just my gut. But I could be wrong.

Starting point is 00:45:17 I mean, I would like to wait until we have a little bit more data before I make any any strident kind of points about this. I mean, what is clear is that Trump did better amongst people of color in both genders. And young men did shoot to the right a little bit just as college-indicated women jumped into the left. It seems like everybody moved to the right. There was a very interesting image I tweeted. And Trump has increased his support across the last. electorate, Republican margin over Democrats, changed since 2020 by demographic group. And this just shows very simply what percentage shifted Republican versus shifted Democrat. And if you look at white

Starting point is 00:45:58 college, if you look at just the arrows here, what you'll see here is one, two, three, four, five, six, seven, eight, nine, ten, eleven, twelve, thirteen, I think it's fourteen, different demographics, age, ethnicity, and gender. There are two groups that shifted more Democrat. 65-year-olds and above. Yep. And white college women. And then the other 12 all shifted to varying degrees Republican.

Starting point is 00:46:33 And the size of the arrow is how far they shifted. And the three groups that shifted the most were Hispanic, Asian and 18 to 29 year olds. That is stunning. Those are the people who would normally associate with Democrats. They made the biggest move to the Republican Party along with 30 to 44 year olds. There are other groups that are de minimis. They could have gone either way.

Starting point is 00:47:00 So what are your thoughts on that now? I think a lot of people were surprised at the scale of this. Well, I mean, it's everyone, I've been reading a lot of Twitter, as you have been since, know, we started seeing results come in. And what I find very impressive is that everyone thinks that they were right about what should have been done or why they won or why they lost. So I don't think people are really learning a lot about this. I'm very curious to see later on some deeper polling about views on gender and how that may

Starting point is 00:47:27 have impacted this particular election. I think the divergence from Biden to Harris's results with not that much policy difference makes me wonder a little bit. But I also think the Democratic Party. needs a new set of leadership because clearly the Biden-Polosey era is over

Starting point is 00:47:48 and they're getting their ass kicked and it doesn't seem like they know what they're doing so I think it's time for a house clearing but I suppose I'm trying to sort out some dissonance Jason and I want you to help me with this because when the Trump

Starting point is 00:48:03 victory went from likely to okay this is happening and the stock market in the US began to pick up team. And so today, before we hit record, just for everyone knows, the Dow Jones Industrial average was up three points, new 52 week high, S&P, up two points, NASDAQ, up two points. Clearly, a lot of a bullions in the market about the next Trump administration. And Jason, we're going to talk about immigration in terms of high skill and emanate in a second. But the thing that I don't

Starting point is 00:48:29 understand, Jason, is the dissonance between everyone in the business community not wanting extreme tariffs on Mexico, China, and the world at large, and the Trump policy to do that. And so what I don't understand this, was Trump lying the whole time or do you have friends on the inside think that he's actually going to do these very inflationary tariff moves right away, as you promised? Yeah, absolutely. This is one of the things that breaks intelligent people's brains with Trump. I have now having so many people close to Trump and having interviewed J.D. Vance and spoken to folks, you know, in public and in private, Trump says insane things. He gets massive amounts of attention for saying things that are either, you know, is literally having a talk with a young

Starting point is 00:49:19 person about this. Like, they're like, is that, is what he said racist? I'm like, it's kind of like racist adjacent, you know, when he says Mexico sends all there are terrible people to America. Is that literally racist or is it factual that he sends, you know, that. Mexico sent criminals here because they don't want to have to deal with them and they didn't send like their CEOs over here across the border. And so when he says he's going to deport 15 million people and then Bannon says, yes, Bannon said on the all in live stream last night, confirming yes, that's like job number one. Now Bannon's not part of the Trump administration, nor do I think they're going to let him in again. But I do think that is part of what you're identifying here is Trump will say something that is absolutely outwe. blandish, impractical, and then it's up to people around him to execute on some version of it.

Starting point is 00:50:12 And I think the version that we'll see specifically with immigration, and we should start with that one, I think, and then we'll go to tariffs. I think with immigration, he's going to deport people who beat up police or who are fentanyl dealers or criminals, and then let the other 14.x million of the 15 stay here. So I just want to be clear, the people, because this is useful for me to know, Jason, because you have very different friends in terms of their political alignment than I do mostly. That's not a diss, by the way, just kind of a factual statement. They were almost all Democrats, you know, five years ago.

Starting point is 00:50:47 No, no, no, no. I said that and that it sounded like I was being pejorative. I was just trying to point out that you're hearing different things. So I want to double click on them. They think, based on their knowledge of Trump, his policies and the election and the campaign, that much of what he promised that you, you and I would consider to be bad for the economy. Tariffs, you know, a labor shortage, et cetera, won't happen.

Starting point is 00:51:12 They'll be cut down to a much smaller size, sounds like, with the, some deeper, okay. Okay, well, that's a bad. He exaggerates. So if you interpret Trump as lying or exaggerating, I think is the journey people go through. He is like some P.T. Barnum exaggerator in order to make points. We're going to smash them. I'm going to, or I'm going to go in there and I'm going to, the war in Ukraine will be over in, you know, the day I come into office. He will say something bombastic, maybe crazy, maybe people will interpret us a lie.

Starting point is 00:51:50 And basically, the way people who are in and around Trump interpret everything he says is he's going to put the goalposts and the target, you know, like, I'm going to shoot for the, the moon, I'm going to shoot for the stars and get the moon. kind of situation. And so I think we just, let's just meditate on immigration here. Yeah. We had him on All In. Here's the clip from All In where I asked President Trump about immigration and high school immigration specifically. Roll the tape. What I want to do and what I will do is you graduate from a college. I think you should get automatically as part of your diploma, a green card, to be able to stay in this country. And that includes junior colleges too. Anybody graduates from a college. You go in there for two years or four years, if you graduate or you get a doctorate degree from a college,

Starting point is 00:52:38 you should be able to stay in this country. Okay. So when he said that, the question is, is he pandering to me and to the business community by extension or not? And what happened was, after that quote,

Starting point is 00:52:54 his group of, you know, around him, backtracked a bit and said, this is only for high-skilled, only for PhD, this is not for people crossing the border, etc. But I do think

Starting point is 00:53:08 that the influence around him are going to say we need to get more high-skilled immigrants in here while shutting the border. Here's Steve Bannon, the architect of Maga, who literally put a bunch about it last night on the all-in live stream talking about specifically

Starting point is 00:53:25 when I asked him, hey, tell me about immigration. And you believe he should start deporting millions of illegal immigrants. All 15 million. I'm adamant about it. You can start with the quote unquote the same asylums. You can start with the you can start with the criminals. You can do all that. But eventually, because here's the thing, you either have a country or you don't. This is crushing opportunities for African American and Hispanic men. This is what that vote was about. Now the

Starting point is 00:53:57 Congressional Budget Office is telling us that if you deport them, you're going to knock off 1% of GDP. Well, I don't care about knocking off one percent of GDP. These people are taking opportunities from American citizens. All right. So there you have Trump saying to a business audience, hey, you know, we're going to get high-skilled immigrants in here. And then the other side, Steve Bannon, who doesn't work for the administration, just to be clear, I think they will disavow him. But I asked J.D. Vance, the same question about this issue, right, Alex? And he said, we're going to do it like a sandwich. We'll take a couple of bites and,

Starting point is 00:54:32 you know, we're not going to try to eat the sandwich in one bite. I think the reality is they're not going to deport 15 million people. That would not go well. What's your over under on the, on how many get deported? You had to like, you know,

Starting point is 00:54:43 Christopher five years. No, if we did a prediction market right now and I think the prediction markets is a really good topic for us today as well. Is just how great the prediction markets were at assessing what was going on here. Um, shout out to Polly Market, Robin Hood. And,

Starting point is 00:54:58 well, they were, think they did, they got it right. They were, I mean, in October, I looked this up this morning because there's been a lot of crowing about the accuracy of prediction markets. Like a week ago, the prediction markets gave Trump essentially no chance of winning the popular vote. So, right. I do think they're very good at incorporating real-time information, but they're not as good at prognostication. And that's the mistake people are making.

Starting point is 00:55:21 I bring it up because I don't people to not understand that point. They are a lot of fun. I wouldn't blindly find, I wouldn't blindly find any, but I do think they did a better job. job net net than let's say pollsters or pundits generally speaking i don't think any polser or pundant said trump's going to win the popular vote like that was like a way out way out there and and nor did they think he would sweep this i mean did he sweep the swing states i i know it's seven out of eight but by the way probably eight pretty close who what didn't he win which one didn't he win i'm curious if you know just to be clear polymarket as recently as like you know four weeks ago had comelow win in

Starting point is 00:55:58 So just... Oh, the popular. No, the election. Oh, really? Really? Dip down there? Okay. I, Polymarket, pulled up right here.

Starting point is 00:56:05 This is the thing. People are really obsessing about polymarket being about half an hour ahead of the networks calling the election. And to be clear, shout out. That's legitimate and useful. But they've been very wrong for a long period of time about the thing people are claiming they were always right about. And that's bothering me a little bit because I have the charts and I've been tracking them for months.

Starting point is 00:56:23 Oh, okay. Yeah, I mean, I'm trying to remember when Carmelah had a lead. I think it was like, right after she, the two weeks after she were, they hot swapped Biden, right? That was when she peaked for a lead. There was like this little, you know, honeymoon period and then it just went straight down.

Starting point is 00:56:40 I'm just going to pull it up to be everyone can see it here. Screen sharing, because there's two, this is the thing. There's actually two different times in which, um, this, uh, Conno was,

Starting point is 00:56:51 oh boy. Well, I mean, if in, yeah, when she did. So, there you go.

Starting point is 00:56:58 Right here, 53%. And also she took over again right there. I'm curious. This is September 22nd through the end of September and then there. And then just to be clear, the popular vote, which I think is important to see, as recently as September and October, Trump was, you know, not picked to win it. No, no chance. So this is useful, because it was ahead of the election, the rest of the world.

Starting point is 00:57:23 But as of, you know, 20 minutes ago, they weren't saying that. Yeah. So that is, I think, instructive as well. if these things are not going to be perfect, but they're part of the overall package. So the question, your question to me, though,

Starting point is 00:57:37 if I was going to set up a prediction market over under one million, right? So let's just say deportation over under one million. I'm taking under a million. What would you take? That whole deport under a million.

Starting point is 00:57:49 May I mean, going into my head, I'd say over? The thing that I struggle with. So you take it seriously, okay. Well, no, no, no, no. 15 million would be taking it seriously.

Starting point is 00:57:56 Listening. Don't Annan would be taking it seriously. The thing that I struggle with with Trump is that when people contextualize his behaviors, promises, and actions, it comes down to, I think that the people who know him will influence him in a certain direction. And while I do think that your friends Sachs and Schmath and so forth will have influence, so too will the more reactionary right, the less pro-business right.

Starting point is 00:58:24 Bannon said in that clip, he doesn't care about 1% GDP. 1% GDP is a lot of money. And so I'm curious to see who Trump will actually listen to. If it is your friends, I'm going to guess it's going to be the business people. But I could be wrong. I think this is a key thing. So who he puts into his cabinet will be the ultimate tell this time around.

Starting point is 00:58:44 And so if you want to understand if he's going to listen to Elon, Sacks, Chimov, Peter T.L., J.D. Vance. Like, because sometimes people don't even listen to their VP is, if it's going to be a tech-driven agenda, a pro-business agenda, or if it's going to be a pro-isolationist tariff agenda, I think is the thing we should be monitoring. And does you mean there's always been that dissonance between the two sides? And I have not been able to understand it unless the people who are very excited about Trump

Starting point is 00:59:14 and who are on the tech side of things think that they have more influence than the people who do want to do a 15 million person deportation. I don't know. I don't know Trump. I think he will yeah he likes to be liked he likes money and he likes not going to jail like I think him winning no I mean he got to remember he now gets to press a button and cancel you know a number of the legal actions against him so independent if you think it's law fair or fair law he needed to win in order to not go to jail or to erase the final I think he's got pre-k cases outstanding. So there's three cases plus one sentencing. I think all that he's going to be able to make disappear and use, you know, the presidency to either push those off or to cancel those actions against him. So he needed to win. So if we just think from first principles, I do think he likes business. He likes being liked. He likes building business relationships. And he doesn't need to win again. No, he doesn't need to win again. But let's do the over under again on high school immigration, because that.

Starting point is 01:00:22 clip, that was based off a question you asked Trump during an interview. And it was actually one of the very few times, which I was like, ah, I agree with Trump on a thing. Yeah, I was very excited about it. I was like, this is perfect. I would go a step further and give people citizenship, but hey, green cards are fine. So, Jason, high schooled immigration in the U.S. four years from the start of the next Trump administration, in percentage terms, how much does it go up or not? Going to go up high skilled immigration at least 25%. Okay. At least, yeah, I would say he's going to make good on that promise. I think he will make good on a series of business promises.

Starting point is 01:00:58 And this just sounds cutthroat, but I think he cares about money and business connections above anything else now that he's won. I think his motivation was to win, to prove that he could do it again, and to get rid of the lawfare or fair law, the lawsuits. So it was existential for him to win. Now that he's won, I bet he's playing for legacy. and money and power post getting out. In other words, he's a businessman.

Starting point is 01:01:26 So what would be in his best interest? To have incredible relationships with the business community. And I think the MAGA community, like I'll call the hard MAGA, like not financial MAGA, but Steve Bannon MAGA, like isolationist MAGA, I think that that's going to wane. I think that's going to be less his priority. I think he uses those people and that stick to get into office. just like he used the evangelicals, you know, in the abortion issue to, to win the primaries the first time around.

Starting point is 01:01:57 And then he soft stepped that back and said, listen, you know, I'm pro-iv-F. I'm pro these exceptions, right? So he... Well, what he did was was essentially reformed the Supreme Court to be incredibly conservative and especially the fact of people whose religious tradition is opposed to a lot of social issues that are important. So I think he did more than you're giving him credit for there in terms of fulfilling this. promises. But one place where there does seem to be consensus about what a second Trump administration will look like is Jason your favorite thing. It's the world of M&A. Oh, great. I thought you were to say crypto. I'm going to be fantastic. MNA is on. People were like, JCal, try more. And I'm like, I told you all I'm not voting for Kamala. I told you I'm not a fan of socialism and I wasn't a fan of how she was anointed. I am thrilled. Thrill.

Starting point is 01:02:51 with this aspect of the Trump second term, which is, um, M&A is going to be on like a donkey con. They might, and the, in the perfect situation, Alex might be, they don't let M&A with the top five companies,

Starting point is 01:03:04 which J.D. Vance and Trump don't like, Facebook, Amazon, Apple, they might give them a hard time while letting everybody else run a muck and do whatever they want,

Starting point is 01:03:15 which is exactly what I've been proposing. Whoa. Okay. But you just doesn't mean super illustrative, Jason. Yeah. You just said that Trump and J.D. Don't like them. And you just described their essentially antitrust policy based on who they like, which is very much not rule of law.

Starting point is 01:03:33 I don't think it's personal. They don't like the censorship and the power that Facebook has had in previous elections. Now, that's why you saw Zuckerberg say like, wow, man, you know, Trump was awesome when he, you know, got shot and got up and said, five, five, five. You remember that? Just magically all of a sudden came out that that was, what do you say, badass or something? Well, yes. Maybe all get our ears nicked.

Starting point is 01:03:58 I mean. No, that's why he came out and said badass. And that's why Bayesos this morning called Trump's election, like, astounding or whatever he did. They're all ass-kissing. I just, I just would prefer a world in which business leaders didn't feel the need to publicly bend the need to a political leader.

Starting point is 01:04:15 That's not the dynamic that I think is healthy. and I think if you go back to the first Trump administration, people forget this. There was a Time Warner AT&T merger in the book that they were trying to do and Trump was trying to kill it off because he didn't like CNN. The pettiness of these people will play into M&A and I do think it's going to be better,

Starting point is 01:04:36 but it's not going to be perfect. No, I think Lena Kahn's done and I think they will let anybody who supports them and supports the Republican Party do what they want. I think that they will be bought and paid for. Isn't that not good? I mean, no system is perfect.

Starting point is 01:04:58 I'm being a pragmatist. Yeah, but I mean, I think whoever supports you to get in office, whether it's with votes or with donations, is going to have an outsized voice in our political system. And we consider the spending part of freedom of speech, right? or political spending on PACs, super PACs,

Starting point is 01:05:19 or just support running fundraisers, whether you support Obama, Hillary, Kamala, or Trump is part of the entire package is trying to have influence, right? Yeah, but I just, I just don't, I don't like that.

Starting point is 01:05:35 I think influence in politics should not be predicated on net worth. I think it's, that is a, and that is a valid concern after what we saw this election. The Democrats spent a billion, I heard, on ads. And then obviously you had five or six folks on the Republican side, including Elon and Jeff Yass and everything, 50 to 150 million each. So yeah, I mean, we, I think as a society, need to think, should there be this much money involved?

Starting point is 01:06:05 And I liked your suggestion, which other countries do, which is they just give a budget to the final two or three candidates. Here's your budget to spend. That seems like a better idea to me. If you go through the Trump platform, actually public funding of elections is cited by name as something that he will reduce. Look at this. Harrison Trump spent nearly $10 billion on heads.

Starting point is 01:06:27 10 billion dollars for the U.S. presidency. I know. I saw some of these. That is problematic. Did you see the World Series, the baseball? No, I did not watch the World Series. One of my friends is a huge Yankees fan, so I got ripped into it.

Starting point is 01:06:41 So I sat down and watched live baseball for one of the games. and I saw more political ads than I thought was humanly possible. And I got to say, I don't think any of that money that was spent on me that evening was a good use of cash. And I really do think that buying blocks of broadcasting cable news to promote your candidate is just a very 2000 era strategy, Jason. It feels very archaic in this moment. But back to M&A, really quick. People are stoked about this. Everyone from UBS to merger market, they're raving.

Starting point is 01:07:11 Jason, I want to know which startups are front and line do you think to be picked up by a larger company once Selena Con is out of her spot. The media, you know, businesses that are struggling typically need consolidation. So most people would say media businesses from Discovery to NBC, Comcast, you know, all of that area is ripe for some consolidation and some trading of assets. because they're up against YouTube, they're up against TikTok, and the audiences have switched and, you know, it's not like that the cable providers

Starting point is 01:07:49 and the cable networks have any kind of monopoly on communication anymore. Therefore, they're struggling. And when you saw the Skydeo buying Paramount and Sher Redstone and all that, you know, that went down, there were just a lot of people who would have bid on those assets,

Starting point is 01:08:06 previously, who would not now, because of the M&A. Skydance. Skydance. I'm sorry. I got Skydio on my mind. Skydance. I just had to go verify that.

Starting point is 01:08:16 I'm like, I don't think it's a different company. Different company. So, you know, you don't have Amazon, Apple, Google,

Starting point is 01:08:23 U.S. YouTube bidding on entertainment assets in some major way. Yeah. You did have it happen with Amazon buying, they bought the folks

Starting point is 01:08:33 who owned James Bond, right? Oh, I know who you're talking about I can't remember the, it'll come to me in a moment, but there was, MGM? MGM, thank you. And so, you know, all of that consolidation needs to occur. These things are having a hard time living independently.

Starting point is 01:08:53 So we saw Disney buy Marvel, Pixar, Star Wars, and a collection there. I think these things are fine for them to trade like assets because they all are going to pal in comparison to the time spent on TikTok and YouTube. So let people bid and trade them like trading cards for $5, $10 billion each. It's not a big deal for those little things to get bought and sold because more of them will get made. And the same thing will happen with the long tail of SaaS startups. Why not have, you know, let people buy these SaaS startups, let them buy marketplaces. Yeah.

Starting point is 01:09:27 And, you know, in terms of for me, somebody's in the comment saying, well, Jason wants liquidity. Of course I do. you know, the whole venture industry and startups is based on the power law and hitting an Uber or an Airbnb and them going public and you distributing shares. The other piece of it is Airbnb and Uber and Apple being able to buy smaller startups and that's really hard to have happen. Uber bought Postmates. Yeah, for a couple billion, yeah. Yeah. So where is like why is Lyft and Instacart?

Starting point is 01:09:59 why are those still independent? They're only independent because Amazon, Tesla, Waymo can't buy them. But right now, in the autonomy space, why wouldn't Waymo Uber merge? Why wouldn't DoorDash and Uber merge? Why wouldn't any of these Amazon buy Uber?

Starting point is 01:10:19 I think there's two really obvious. There's three really obvious ones. Amazon, Tesla, Uber, and DoorDash. There's some common. combination there and Waymo of a deal to be had that would be unbelievable at unlocking value, not just for shareholders, but for society. Like if Amazon owned Waymo or Waymo and Uber were together or DoorDash Waymo and Uber became

Starting point is 01:10:46 a company, can you imagine? Or if Tesla and Uber teamed up, it's incredible. I think that there's a lot of fun combinations we could come up with. I think, you know, Uber and Amazon is very interesting. but we're talking again about these relatively large companies. You did mention smaller SaaS startups. My question is, is there a functioning market post-Lena Khan for a lot of series A, B, C startups at a price that acquirers are willing to pay?

Starting point is 01:11:13 Because I still think there's probably still going to be a gap between private market valuations and big tech willingness. And I'm curious how big of a gap that will be, how long it will take to unwind, and when we start seeing 50 to 100 million dollar acquisitions on MOTS. The great news is, you know, if you look, look at what a big company can do with the smaller company in terms of leveraging an asset, what Uber as a $150 billion company could do with Waymo as an example would be extraordinary because as many cars as Waymo could make, they could put out on the streets.

Starting point is 01:11:46 What Tesla as almost a trillion dollar company could do with the $150 billion Uber is extraordinary. Tesla could just make infinite cars and put them into the network, right? and the network is already there, so they wouldn't have to do that, you know, massive amount of work to build up a network of 150 paying customers a month or whatever Uber has right now.

Starting point is 01:12:07 So there's just so many amazing opportunities there for, to accelerate. And the valuations work themselves out because you have competition. And so, you know, we just take Elon and, you know, Dara looking at what's the opportunity here?

Starting point is 01:12:23 Or Dara and Sergey looking at looking at at what's the opportunity of Uber plus Waymo or Amazon, you know, looking at, uh, you know, is there anything with Lyft and DoorDash?

Starting point is 01:12:34 If we bought Lyft and DoorDash and made our own competitor, would that go faster and better and cheaper for customers? And man, it would be incredible. Oh my gosh. So not to be rude to Lyft, but it is interesting to see how a company that for a very long time was, much closer to Uber in terms of valuation,

Starting point is 01:12:53 has now fallen off so far because, you know, Uber's worth, Jason, I forget, 150, 160 billion. Something like that, yeah, 150 billion. I just pull up DoorDash 70. Yep. And then you pull up Lyft 5.8. Yeah. Like, Lyft is a dollar.

Starting point is 01:13:08 It's free, essentially. Yeah. So why wouldn't it get tucked in somewhere, just like, you know, postmates got tucked into Uber, etc? And so this kind of consolidation would be, I believe, good for the market. It would then create DPI. It would shower that money back to LPs, who would then invest in the next generation

Starting point is 01:13:26 and just stop the logjam and venture. I see it happening already. If I'm being honest, in the last six weeks, I've had maybe five or six offers for shares in companies we own. We didn't take advantage of, but the fact that people are even bidding, and they aren't bidding 75% off,

Starting point is 01:13:50 they're bidding 25% off. So we're starting to get to a place where secondary markets are showing some signs of life, I think that's directly correlated with the Trump presidency and the Biden, Kamala era, Lena Khan era ending. So tell me about which types of startups in the launch or Jason portfolio are seeing the most interest from secondary market investors right now.

Starting point is 01:14:13 I'm curious that are growing. So if you have growth in, and there are some companies that aren't growing, people are not buying shares in companies that are not growing, but there are companies that are either consumer or are SaaS companies that are growing and there is interest in them. So somebody believes

Starting point is 01:14:31 if I have some dry powder, it's easier for me to buy this company that's valued at a billion dollars and is doubling revenue year over year than it is for me to make an incremental bet on a public market company like Nvidia or a startup that doesn't have product market fit yet. So that's a very interesting

Starting point is 01:14:52 turn of events. That means people believe M&A will fire back up again. That's or IPL market will be very open. So people are starting to see that and they're like, you know what, I should bid on, you know, there are vibrant markets for Andrew Stripe, SpaceX and those kind of big names. Yeah. It's also starting to trickle down to the ones just a little bit smaller than those. Okay. Now, Jason, we need to get on to perplexity because we need to talk about search, but really quick for everyone else, crypto, looking pretty hot. Trump had made a lot of problems to the crypto world that may now come to fruition. Deregulation is a big point.

Starting point is 01:15:26 On the other side, Jason, I think climate policy, climate industry, not looking too good. Chinese stocks took a bit of a hit after it became good at Trump won. Companies that are dependent on the Affordable Care Act, like Oscar Health, got womped. And then I'll say housing stocks, concerns about tariffs

Starting point is 01:15:44 and rising labor costs. So Toll Brothers, et cetera, all pretty down sharply today. That's kind of mixed. Again, we're sorting this out. It's real time. Welcome to Jason and I chatting it through, but let's talk about perplexity.

Starting point is 01:15:56 Okay, really quick. Perplexity makes search software, and there's also, and they've raised a new round of funding at $9 billion. Well, it's closing. It's closing. Not quite done yet. Closing.

Starting point is 01:16:08 Okay. So this round has been talked about a whole bunch. I think people are really jumping the fence on this one, because I don't know how many paying customers they have. Has that number been whispered early, Alex? Yeah, so the Wells Your Journal in the reporting about this round, which is $500 at a $9 billion, said that last month, the company was on pace to generate around $50 million in annualized revenue. So that would put them at about a $4 million monthly run ranges.

Starting point is 01:16:36 Okay, $50 million times $100 million times $100 million times $200 billion times $200 is $10 billion. So this is almost $200X, correct? Yep. In terms of valuation. So that doesn't make a lot of logical sense. to anyone. So you're really making a deep bet that they can catch up to that valuation. I think that perplexity might have just hit its peak valuation.

Starting point is 01:17:03 It's a really interesting U.S. product. But I think that U.S. is something that Sam Altman has his sights on. And if you do searches, and I ask you to do some, if we just pull up you searching for something on perplexity or search GPT, which is Sam Altman and Open AI's new one. We can just look at this and you tell us which, maybe you could describe these three search results, Google 1.0 perplexity and Open AI and tell me what you think. Yeah, so Jason put me four different searches.

Starting point is 01:17:34 We're going to go through one today for the sake of time. So I ran a search for a travel-related query, which is flights from Rhode Island to Austin, just kind of keeping this in the Jason and Alex bucket. Google's search results were all ads above the fold when I was not logged in, which I thought was incredible. just abysmal, Jason, in terms of user experience.

Starting point is 01:17:53 Now, perplexity actually did a pretty good job citing some different sources, giving some options, and I'll say that I think they did a pretty okay job. But I think when I look at this, I think I prefer the OpenAI search GPT results, gave me a very simple table, gave me some numbers, very clean interface. And I think this just goes to show

Starting point is 01:18:12 that the perplexity evaluation is not predicated on its current worth, but instead the chance that it actually takes on and takes out a good. chunk of Google market share because every share, every percent share of search is worth what? $100 billion, Jason? Some very large number. You would take half of Google's market cap and you would attribute that as the 100% pie because half of it comes from search at least.

Starting point is 01:18:37 So if Google's worth, alphabet's worth $2 trillion, you have $1 trillion as the total market cap, which means $10 billion per percentage point. So I was off by a factor of $10, but the point is. It's a lot. So all they need to do, Jason, just get 1% of search and perplexity is all set. You know, this was my pitch when I did Mahalo and I was doing human-powered search. I do think probably a more fair search is this one, you know, flights from New York to Austin. So I just want to make this one point is that when you have a Google application, I'll call

Starting point is 01:19:09 these applications, some people might call them one box or whatever. Sure. When they do have an application and it comes up and they're not trying to intercept the click, so here is Google flights. that is something they've been working on for decades per category. So for shopping and for flights, and local, they have these kind of databases and pools that have unique data sources.

Starting point is 01:19:30 It will take the AI companies some amount of time to replicate that. Yes, I will say, one year, five years, I'm not sure. I will say, we're not going to go through the other three searches, but we ran one for shopping, one for research, one for a cooking query.

Starting point is 01:19:47 and I thought Google was the worst each time. Oh, okay. That doesn't look. Because of the ads above it. So it's pretty clear that the number of ads is the Achilles heel, I think, of Google. If you were to, because these new products don't have any ads in them. So if you, I think a way to test this. And we'll do a deeper dive on this.

Starting point is 01:20:09 I'm interested in the audience's opinion as well. If you were to take out the ads in Google and then do them side by side, what would your assessment be? might be a better way to frame the question. I'll just close with this. If I did that, I bet you lunch that I would still prefer what search GPT and perplexity have. Because if you start from scratch without the advertising technology underpinning of Google, I think you just end up with a better product.

Starting point is 01:20:35 But we'll keep that for another day. We have to go. We'll see everybody next time. Bye, bye.

This Week in Startups - TWiST News: Skydio's Drones, High-Skill immigration, and M&A Unleashed | E2040

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