This Week in Startups - TWIST News: xAI's massive $6B raise, the startups building our drone future & TWIST500 | E1957

Episode Date: May 29, 2024

This Week in Startups is brought to you by… LinkedIn Ads. To redeem a $100 LinkedIn ad credit and launch your first campaign, go to http://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 http://www.vanta.com/twist DevSquad. Most dev agencies only offer developers. Why? Because product management is hard. Get an entire product team for the cost of one US developer plus 10% off at http://devsquad.com/twist. * Todays show: Jason and Alex discuss xAI raising $6B (2:07), the TWiST500 (30:11), the startups building our drone future (39:55), North Korean tech talent taking American remote tech jobs (55:50), and more! * Timestamps: (0:00) Jason and Alex kick off the show (2:07) xAI raised $6B series B (10:03) LinkedIn Ads - Get a $100 LinkedIn ad credit at http://www.linkedin.com/thisweekinstartups (11:30) The evolution of smartphone adoption over time (19:08) Global Internet users from 2005-2023 (26:06) Vanta - Get $1000 off your SOC 2 at http://www.vanta.com/twist (26:57) The control over silicon and Apple’s move switch from Intel (30:11) TWiST500 announcement (38:24) DevSquad - Get an entire product team for the cost of one US developer plus 10% off at http://devsquad.com/twist (39:55) Armed robot dogs, drone warfare, and the startups building our drone future (55:50) North Korean nationals taking American remote tech jobs * Links and articles from show: https://x.ai/blog/series-b https://www.twz.com/sea/rifle-armed-robot-dogs-now-being-tested-by-marine-special-operatorshttps://news.crunchbase.com/ai/defense-military-ai-tech-startups-vc-funding-anduril-shield-ai/?utm_source=cb_daily&utm_medium=email&utm_campaign=20230703 https://www.axios.com/2024/05/21/north-korea-it-workers-us-hiring https://www.cnbc.com/2024/01/24/north-korea-crypto-hacking-activity-soars-to-record-high-in-2023-new-report-shows.html https://www.statista.com/statistics/273018/number-of-internet-users-worldwide https://www.axios.com/2024/05/26/china-robot-gun-dog-military-cambodia https://www.allencontrolsystems.com https://www.youtube.com/watch?v=YMnkqY98Cyo https://www.youtube.com/watch?v=8igjcW39T4k * Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp * 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: (10:03) LinkedIn Ads - Get a $100 LinkedIn ad credit at http://www.linkedin.com/thisweekinstartups (26:06) Vanta - Get $1000 off your SOC 2 at http://www.vanta.com/twist (38:24) DevSquad - Get an entire product team for the cost of one US developer plus 10% off at http://devsquad.com/twist * Great 2023 interviews: Steve Huffman, Brian Chesky, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland * Check out Jason’s suite of newsletters: https://substack.com/@calacanis * Follow TWiST: Substack: https://twistartups.substack.com Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups * Subscribe to the Founder University Podcast: https://www.founder.university/podcast

All right, everybody, welcome back to this week and startups. I'm your co-host now, Jason Kellikannish. You can follow me on Twitter at Jason. And with me is Alex Wilhelm. A great job on this week in tech this week. And I heard you on this week in tech. Twitter. Thank you, sir.

Leo Laporte show where I, if I'm being totally honest, got the idea for the name of this show. And took a lot of notes from Leo, who is, in fact, the world's greatest moderator. Welcome back to the show, Alex. Yeah. Actually, I think the first time you and I met was actually at This Week in Tech. about 17 decades ago. But Leo's been getting people together for a long time. The good news is we have this weekend startups.

We are going to be digging into our core topic. And on the show today, we have the new kid on the AI block. We shall talk about XAI's $6 billion funding round. I think they're calling you the series B. That seems to stretch the definition slightly, but we'll get into it. Then Jason wants to talk about robot dogs with guns.

And this is actually a conversation about drones, believe it or not, we'll get into to, tech, American dynamism, and what's good. And then I'm sure this will cause no one to get mad. North Korean tech talent taking American remote tech jobs. So nothing, nothing controversial about remote work coming up on this podcast today. No. This Weekend Startups is brought to you by LinkedIn Ads.

To redeem a $100 LinkedIn ad credit and launch your first campaign, go to LinkedIn.com slash this weekend startups. 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 a limited time at vanta.com slash twist. And dev squad. Most dev agencies only offer developers. Why?

Because product management is hard. get an entire product team for the cost of one U.S. developer plus 10% off at DevSquod.com slash twist. The biggest story, I think, of the last couple of days is just that XAI has raised $6 billion. And some of money that I'm either thinking is like brilliancy or absolute lunacy. And I'm kind of torn between dirt. Yeah. So just give my quick disclaimer up here. I am not involved in this raise.

I am not an investor. I am friends with a bunch of the folks who are involved. I see Sequoia and Valor. Two of the funds I'm very friendly with and involved with are also investors in this. So congratulations there. You know, $6 billion seems like a lot of money. But I think when we look at AI and large language models, because there is a significant cost to the talent and an even greater cost to the hardware infrastructure to compete now,

table stakes is, you know, essentially having a billion, two billion, three billion in compute. And this is why we've seen in Vida stock, you know, Skyrocket. We were talking about just how blown away you and I were about this story that just is incomprehensible in some ways, right, that a company could have this much revenue. Well, it's because there's so much at stake.

And we see it every day when we look at startups, both as investors and on the show, of just how impressed we are at the velocity at which technology and startups are embracing AI and just really making progress and making things that are useful and have use cases. So if you were going to place a bat on AI, there's probably 10 people who could make some noise here.

Elon is obviously one of them, what he's done in AI already with Tesla, you know, obviously, and he was the original co-founder of Open AI. Open AI is up there as well, meta, AWS, and Google. I think those are your top five folks. And I think it's a steep drop off. I do think the Falcon Project in the UAE also is pretty significant, the open source one. And I think we're going to be in a battle of, let's call it, 67, 8 large language models consolidating down to three winners. And I think those three winners and the prize here will be, you know, something in the

neighborhood of the next trillion dollar company. And it's a completely non-venture capital type investment here at this scale, right? This is a, this goes like growth equity, you know, I, this is kind of like an IPO in a way, right? This is kind of like what Masa was doing with Uber and DoorDash and other plays like that. And so if you put it in that context, you know, betting on the team Elon set up, it's kind of a no-brainer bet. There's, I'm sure, in all these late stage rounds, devices to protect that $6 billion. In other words, you know, they get their money out first. So if this company became worth $6 billion, those investors would get their $6 billion back. So there's kind of like a floor in there. We call those protective provisions in the business.

And I just love the fact that we're going to be in a dog fight for the next five years between six or seven great companies and whoever can make this be the cheapest possible technology that reaches the largest number of people. And man, it's going to be really interesting to see how cheap this can get because right now opening i i think they are on track consistently to lower their prices by 90% while it gets better so what that means is every two years Alex i'm not like a perfect mathematician here but i think it means like 99% of the cost plus are taken out of you know the system every two years that's phenomenal and like uber and doradesh and other companies that use capital as a weapon and then turned profitable, I predict a similar scenario

here. Okay. So, what's your take? We're going to go ahead and take a lot of money and we're going to build new foundation models and we're going to train them up and we're going to have a big dogfight to use your phrase across major companies to figure out who can make the best model with the best pricing, the best packaging, et cetera. Here's the thing.

If you go back to the cost of training GPT3, which is now, so. several generations behind, because there was GPD 3.5, GPT4, and GPT4O most recently. What's the value of GPT3 today versus? Yeah, trading the garbage. Right. So the depreciation of models here is huge. So my concern when I look at this huge amount of money, and I get the upside. Yeah.

If you win this market, this bet will look like the cheapest money ever spent on technology company. Right. But they're going to go ahead and take a billion, two billion, and they're going to train models. What's the shelf life on that investment? Is there a concern that they're going to essentially keep innovating so fast? They're deprecating their old investment so quickly that $6 billion is chump change versus a King's Ransom. That's my concern. Yeah.

I think you nailed it with the latter. I think your assessment is correct. It's chump change. You know, it's almost like, you know, what's the value of Windows 3.1, Windows 95, or like, you know, the Pentium chip versus a ship. Each of those is a building block to the next, right? So an iPhone 3G, if you took it out right now, might have some sentimental value, but I'm certain if we went on eBay right now, you can buy them for $10. Yes.

But it was a stepping stone to iPhone 15 and certainly to the glasses. And, you know, all those sensors becoming commoditized and, you know, all the downstream impact of accelerometers, batteries. I mean, what happened in smartphones impacted, you know, the EV story, which is now impacting home batteries. We just had a, or we're having a company that is putting batteries in homes to get them off grid. That's coming up, actually. I taped it already. So I do think they're all building blocks. I do think the velocity here is unlike things we've seen before.

It would be as if the iPhone 3, 4, 5, 6, and 7 came out in a two-year span, right? Right. Yeah. The difference, though, between the models and the iPhones. And I think, I can't tell if I'm splitting hairs here or actually noticing a difference. But the thing is, when the iPhone 3G, you. came out, when the iPhone 4 came out, where the iPhone 4S came out, each one of those had a full year of commercial availability, and I'm sure it made back its development costs and also

advance the tech that could be used later on. My question is, can models like, I presume GROC 2, when it comes out from XAI, can it earn back its full of costs before it also passed the baton to GROC 3? And I don't know, but I will say that not every company has sorted out how to monetize these foundation models yet. Open AI clearly is making a lot of money good for them. But I'm curious if that will pass along to... Here's a way to look at TAM, total addressable market. There's top down, there's bottom up, and then there is kind of like what I'll call,

you know, maybe the way Elon looks at the world or, you know, like a visionary person might look at it, right? Or a major risk taker who doesn't, you know, have a fear and just assumes, hey, this is what the world will become. So, yeah, it's going to be messy, get. there, but we know that it's going to be EVs, right? Or we know that we're going to have a base on Mars or we know that all the world's information is going to be indexed or you're going to have a store where you can buy anything,

right? So like a Bezos mentality or a Steve Jobs mentality. There'll be a computer or a Bill Gates. We'll have a computer on every desk. So let's do not the bottom up, not the top down, but the visionary risk takers tam. This is a new Tam that I just came up with in our conversation. Let me ask you a series of probing questions. Will every person on the planet be connected to the internet in our lifetime? Without eight people somewhere, yes. 99.9%.

Perfect. Okay. There might be people who opt out. So we both agree everybody will be on the internet. Great. And if everybody's on the internet, then that means everybody has access to AI. Navigating the B to B maze can feel really tough, huh? you're trying to hit the mark with all those top-tier executives.

You want them to pay attention to your enterprise product. But where can you find all those big fish, the whales? The ones who call the shots and make the buying decisions for corporations, for startups, and everybody in between. Well, here's where LinkedIn ads is going to solve that problem for you. And I've used this. It is one of my secret weapons. LinkedIn means business. Business equals LinkedIn in people's minds.

When you're on LinkedIn, you're in the business mindset. So you're going to really be thinking. about business products and services. You're open to those opportunities and LinkedIn recently passed a billion users. 180 million of those billion are senior executives, 18%. But hey, we all know about the 1%. 10 million C-suite executives. That's your CFO, CTO, CIO. These are the people who are always looking for a new product or service to make their organization run better. But they are on LinkedIn. That's why LinkedIn's ad platform delivers two to five times greater return on investment, compare it to other social media platforms.

So easy to understand why this is, because this is where all the business people are, and they're in that business mindset. Super easy, call to action. Make your B2B marketing, everything it can be, and get $100 credit on your next campaign. Go to LinkedIn.com slash this week in startups to claim your credit. That's LinkedIn.com slash this week in startups, no spaces, no dashes. Terms and conditions apply because they're giving you a hundee. So now we say seven billion people will have a device, smartphone,

is the most likely and then laptops, tablets, everything else. And actually, that's where it's trending, right? I know internet is probably five out of seven billion people, and I think smartphones are probably four or five out of seven billion. And something in that range is what my gut tells me. You know, I haven't looked at the stats in a couple years. And the reason we haven't looked at the stats is because we are both convinced. Everybody will have a smartphone.

Everybody will have internet access, which means everybody has access to AI. And then everybody will use AI. and they'll use it more than they use the web or music or YouTube. AI will be the primary use case of a smart device, is my belief. It'll be the primary interface. It'll be the primary use case is not you looking something at the web, but you interacting with an AI agent to solve your problem. So do you agree that the primary use of the internet will become

communicating and interfacing with an, an internet AI agent. You believe that. It's the last step in your chain that I'm the least confident in, because I'm not sure exactly what form the average person's interaction with AI will be. That said, small models at the edge, aka on your device, on your smartphone, do have the capability to bring this stuff to people's devices.

Strong connectivity or not? Like right now on this show, I have Gigabit, which is great. But I don't think we're going to see even 10% of the world on Gigabit in the next 10 years. but everyone's going to have a smartphone, which is going to have 3G minimum, hopefully, 4G, hopefully 5. So my question is just what is the use case for, you know, a shop owner in rural India for AI? I think helping them access information, certainly, but I don't know if it's going to be the principal thing they do with their device. So I want you to dig in more on that point. Yeah, so my double click on that is I believe the chat interface or the talking interface will be the majority use case of what people use their smartphones.

for. So you will, in the near future, and it will happen in the developed world, and then move to the emerging and frontier markets very quickly. And it turns out chat interfaces actually are low bandwidth, right? And what we'll see is that person in India will say, you know, hey, I need to fix this refrigerator that's having a problem that's giving an error 72 code. What does that mean? Or I'm to take a picture of the broken fuse box and say, how do I fix this, right? So just something simple and acute like that, which you can do now in chat, JPD. I literally did it. Last Christmas, I was in the ski chalet, and I had these bulbs that I couldn't find. And I just took a picture of them. And I said, what am I looking at here? And it, like, nailed it. This is the exact bulb.

This is what it's called. And then I just did a Google search for it. Now, in the future, that would just go get me that bulb, right? And I've done this now. countless times. I had an error code on the pool heater. Boom. Same thing. Instantly got me that sure. So that will be what they'll be doing, solving problems in their life, or it might be even, you know, they're learning something. How do I cook salmon? You know, whatever they're, you know, standard things that we all do here in the West and that they'll just eat up. So now let's say. Jason, please, hard past. Fish is disgusting. Yeah. Okay. I mean, whatever it is. You know, what's the, what's the proper temperature, you know, to eat chicken safely,

right? Sure. I didn't actually know that. And this weekend when I was I was actually cooking pork belly, I was smoking pork belly, and I needed to just understand how to do that. Normally, I would do Google, YouTube, or probably my stack would be like YouTube, then Google. And this time, I just asked chat GPT, and then I looked for confirmation of that,

and it actually cited some sites I know for barbecue. Okay. Got it. So then you believe, if we just follow this, I think 99% of the planet will be using AI. So then your total addressable market is everybody. Essentially like clean water and electricity, everybody on the planet, eventually it will reach in some form or another. So then the tam becomes everybody doing almost everything. This is a tam that is very hard to get the human mind around.

Now, the overwhelming majority of those things will be free. So knowing the cooking temperature of that pork belly or the light bulb, that I need to replace or the broken generator and how to solve this problem or tutoring my kids in math, I think all of that gets abstracted away to free. But there's going to be the next set of things, the next set of things that will be monetizable. And if you can make a dollar a year or for $2 a year off of, you know, billions of people and then $100 a year or $200 a year in the developed world for two billion people, man, the tam here is, let's call it $1 a year. year for four billion people and a hundred dollar a year for three billion people three billion people

hundred dollars a year like netflix price that's 300 billion in tam and then the other five billion at but one dollar years another five billion there you go i mean there is a lot of tam here and that's just for basic basic basic AI that's not your robot that's not your self-driving car it's not a factory so this is what i think visionary tam looks up Okay, and going back to your request about a chart. So in the U.S. through 2022, smartphone penetration reached 86%. And we also have a chart coming up in just a second that will show global internet penetration, which is also rising very, very quickly.

So the underlying element of your view about TAM holds up in that everyone's going to be connected. But if we can rephrase this as clean water, electricity, the internet, which is connectivity, and then AI is intelligence. And maybe what we're saying here is that the TAM for globally accessible intelligence on your mobile device is 100% of people. Hard to agree with that. Quibble about the monetization and exactly what it looks like, but that is going to work out, I think. And this goes back to why $6 billion is going into XAI, because if you do follow Jason's logic that there are only so many people who can pull this off, you're basically putting a wager down with, you know, downside protection to own a big chunk of that eventual future. I remain pretty AI bullish, so I can kind of see all that work together.

I just worry about the shelf life of these models and the cost there. Yeah. And I think looking at them in the traditional, if you look at them as like each individual products, I think what you have to look at them is as just versions of the same thing. Right. So it's just this little versioning. And it's just weird that in this technology, in this technology, in this. technology, you build a model, it's codified, and then you build another one, it's codified.

Like, I think they'll probably eventually figure out how these things are not codified. They're just organic and growing. And maybe there's like, you don't remember they sharded databases. We had like one big database and this database, Oracle database will like last forever. And they're like, yeah, and then everybody started recording every click on the internet and every interaction. I was like, oh, yeah, that's too much stuff. And oh, by the way, it's coming in in real time and we want to watch it in real time.

It's like, okay, we need to shard this database. You know, oh, there's a billion people on Facebook sharing, you know, 10 billion items a day. That's a different use case that we didn't anticipate. I think they'll shard these things. Yeah. So here's internet penetration from 2005 to 2020. Going up to 5.4 billion, which going to our idea of there's some folks who are going to opt out. There are also babies and there are people who are very, very senior who may not be interested.

You're getting pretty close to 90% of eligible books. I think I said $5 billion was my guess. So I think I'm pretty close. Yeah, I must have had that stored away somewhere. And, you know, listen, it looks like from this chart, you know, hundreds of millions of people are still getting on each year, but it will flatten out.

And so they're getting, if there's 5.4 billion people, internet users worldwide, that means there's that many computers and smartphones if you combine them and did some do de-duping or whatever. I mean, at some point, we'll just be counting the people who aren't online. And I think you're right. It's going to be old people, babies, and people who are hippie-dippies who are just going and homesteading and they're getting off the grid and they don't want to be on you. So those are the hippie-dippies and the preppers, which are oddly enough becoming besties

because I grew up amongst the hippies and I now know some of the preppers, and they share quite a lot. Here's where I'm thinking next to them in terms of vetting the spec. So we know that XAI put together Brock 1, November 23, GROC 1.5, March of this year. The open source, the first Brock. I played with Brock this morning in anticipation of talking to you. It is still a very chatty. Nacent. Nacent, you might say, assistant.

And so I'm curious, like, if you're an investor in XAI, you're part of the $6 billion round, let's say you put in $100 million of it, how fast do you expect to see XAI start dropping things that push other AI companies to increase their own cadence, to make them dance as SOTUSC. Yeah, I think, you know, maybe they're a year behind and they close, you know, three months every year. So in two or three years, they're at parity. And here's a way to play this. If we know AI is the greatest sea change and technological shift in our lifetime, and that now is the inflection point, the easiest way to play this, if you were a sovereign wealth fund, if you were a venture firm, if you were a high net worth individual, we need to place, you know,

seven bets on the top seven potential players, because there'll be three players that are the majority of, it'll probably wind up being, just like technology, you know, with the Fang and, you know, other variations there, you know, the four horsemen, whatever, you know, Jim Kramer dubs them, you know, this year, there's going to be, you know, like five winners, let's say. six winners, seven winners, and there'll be like two that are like a big winners. Where else would you put your place your bets? You're going to place your bets on McDonald's. You're going to place your bets on, you know, United Airlines, like you're going to

place your bet on Whole Foods. Well, actually, that's owned by Amazon. You're just going to, this is the place, I think, smart money is going to place its bets that the highest growth economically, the highest economic value will be created in AI. There's no other space that I think there'll be more economic value created in our lifetimes. or certainly in the rest of our lifetimes in AI. So I mean, I'm almost putting a J-trade in here. Like I think maybe when I rebalance my portfolio next year,

I'm going to kind of look at that with my family office. I think, you know, I might just put, you know, 80% of our net worth in the top five players and just call it a day and then have 20% in like dividend paying, whatever. Or maybe 50% in those five and 50% in dividend paying, you know, safe stuff. because I do think there's no there is no precedent for how big these can get.

Very similar in that there was no precedent for Apple and the smartphone revolution. Like that was something nobody saw. And I think like Amazon, nobody could kind of figure out that books would equal everything eventually. So I think this inflection point means, and this is not

investment advice, but I like to share my thinking on placing bets. I mean, what's going to outdo these things? Like, the gap? You know, like LVMH, like Disney. Like, I don't think so. I don't think any of those are going to provide as much value to humans. And we have a consumer-driven economy and a corporate-driven economy.

Consumer two-thirds, corporate government, maybe one-third. I think ballpark is how you break the economic value up in the world. You know, thinking a lot about what you just said, one of the cool things about, well, you can be this that's concerning or cool, is that if you buy, you know, just Microsoft, Alphabet, et cetera, you're getting essentially options on their investments in Anthropic, OpenAI, et cetera, et cetera, et cetera. And they pay dividends and they're dropping tens of billions of dollars a year to rebuy their shares. It's kind of hard to not not do that.

And if you want to know how much you invest in those companies, everybody, just go ahead and look at the breakdown of your index funds in your fidelity account. And you'll see that the top five holdings are, well, those companies. Yes, for a reason. Yeah, for a reason. And they've done well for a reason. Last question, then we're going to move on. If you're XAI, $6 billion in the bank, you're going to go hire a lot of people.

Do you invest in your own infrastructure, hardware, H-100s, Nvidia stuff? Or are you going to go cut a deal with AWS, Azure, whatever, to get a big bucket of GPU power? I think the answer to that is yes. You're going to get whatever compute you can get right now. And then I think the question you didn't ask was, are you going to make your own silicon? And I think you got to make your own silicon I think you have to look at this and say how do I not have an invidia dependency

and how so it's like how do I leverage invidia today and how do I not have an invidia limitation in the future and if you're going to be in an arms race you better make your own goddamn bullets I think you need to have a bullet factory

you need to have a munitions factory because the person who owns bullet town if you saw Mad Max this weekend, Futurosa. I loved it. I haven't yet because my child's too little. But as soon as I could, like, I was hoping to, but I can't wait. I took my 14-year-old, so if I'm a bad parent, let me know.

But she loved it. And, you know, there's just, there's bullet town. There's gasoline town. And then there's a Citadel where they have water and vegetables. And these, you know, three people are kind of moving stuff around. And that's the Fury Road between them to, you know, try to keep. civilization working. You know, in this case, I think, you know,

you don't want to be dependent on one of those towns. You need to have your own water supply. You need to have your own gasoline supply. In this case, that's CPUs, GPUs. So why not just buy a startup in the space or start, you know, your five-year plan is to have your own Silicon Roadmap like Apple did? Listen, a strong sales team can make all the difference for a B2B startup. But if you're going to hire sharks,

you need to let them hunt, and you can't slow them down with compliance hurdles like SOC2. What is SOC2? Well, any company that stores customer data in the cloud needs to be SOC2 compliant. If you don't have your sock too tight, your sales team can't close major deals. It's that simple. But thankfully, Vanta makes it really easy to get and renew your SOC2 compliance. On average, Vanta customers are compliant in just two to four weeks. Without Vanta, it takes three to five months.

Vanta can save you hundreds of hours of work and up to 85% on compliance compliance. And Vanta does more than just SOC2. They also automate up to 90% compliance for GDPR, HIPAA, and more. So here's your call to action. Stop slowing your sales team down and use Vanta. Get $1,000 off at vanta.com slash twist. That's vanta.com slash twist for $1,000 off your sock two. Remember when Apple kind of got off the Intel, you know, train?

They just, Steve Jobs realized, like, we're a computing company, and we're giving these folks $300 per laptop for their chips. $500 per desktop per chips? What if we made it ourselves? We took that margin. And when you buy an Apple computer, the M2 or the M3, that's like a massive competitive advantage they have. They designed that chip based on what they studied in our laptops.

And what they studied in our laptops was people keep a lot of browser windows open, which uses a lot of memory, which destroys your battery. So they optimize the M2 and M3 chips to last forever, the battery and it's optimized for browsing and video. It's like pretty slick. What people use them for. If they are going to make their own bullet factory, if they want to own own munitions pipeline by making chips, $6 billion is a down payment on this

company versus a conclusion of its fund rate. So in that case, my next, you know, I guess my question is, who's going to drop the $10 billion they need to build up their own? I mean, if they, and that's presuming they go fabless, right? And they just design their own chips. If they want to build a fab, I mean, they're going to need. there's an unlimited appetite to invest in these companies and to invest in that founder. I don't think funding is the limitation here.

I think talent and strategy are the most important things. You have to make very important strategic decisions right now. And even with Sam Altman and Open AI, they've made some brilliant strategic decisions and they've made some very stupid decisions that they've tried to unravel. And that just shows you and how important strategy is at this level. love the game. Zuckerberg's like, we're going to open source this and we're going to put a search box at the top of everything. A decade ago, Google was like we're going to buy deep mine and then open ads like, this thing's just worth too much money for it to not be a for

profit company. So let's have our cake and eat it too. We'll be able to virtue signal that we're doing this for, you know, great reason for humanity while we're selling two billion shares in the secondary market at 90 billion, 80 or 90 billion dollar valuation. Like, the most, like, incongruous behavior you've ever seen. And, you know, they figured out a way to thread the needle so far with that. I have a feeling the IRS and other folks are going to come down on Open AI like a ton of bricks. That is not based on inside information, but based on what we've seen with the drama, you may have seen this new AI Open General Hospital we did, well, in the bit.

Like, I mean, all that drama, I think the SEC is already looking at it. And I think IRS has at some point going to be like, wait a second, where are the taxes being paid under what shell? Yeah. You know the game with the shells? Oh, no. So here's the value. And then also the revenue round-tripping from major tech companies investing in these AI companies that are then spending it back on Azure GCP, etc. There's a lot of, yes, it's essentially that crazy guy with the whiteboard and the red strings, you know, that's what these companies.

companies look like. It's a mess. All right, but let's move on and talk about the Twist 500. Jason, this is a new brainchild from you that we're going to be working on here on the show, also in the Twist ticker over on Substack. And I think it's going to be a lot of fun. But I want to just tell people what we're doing by starting with the Genesis point from your mind. Yeah. So, you know, I have, you know, been in journalism for a long time like you.

And in my first magazine, Silicon Hour Reporter, we did an exercise. every year, the Silicon Alley 100. And it was pretty famous. First year, I could only find 60 people who worked in Silicon Alley. So I just asked those people working in New York and the internet, like, do you know anybody else who has the internet and they were like my lawyer or my headhunter? And we literally include lawyers, ad hunters, and be our people in the list. Just to get to 100.

The next year, we had a thousand people actively fighting to be on that list. And then the one thing that keeps happening over and over again in our industry is trying to make sense of the private markets, right? And you spent all this time at TechCrunch and at CrunchBase trying to get a handle on private markets. And we quote data from Carter, Pitchbook, CrunchBase, all the time. All of that's great. But there's too much noise in the data.

And the data also does not have a curator. And it doesn't have an Alex and a Jason saying, okay, we know there's 50,000 startups in crunch base that are active in some way, right? What is the CrunchBase database up to in terms of entities in there that are private? It's, it is now enormous. The question is how many are still active to your point? I don't know the ratio, but it's, it's a vast ocean of data. And so it is not helpful.

Crunchbase is not helpful in that way to understand, like, who are the most likely winners in each category, right? Yes. And so what I want to do is for my own understanding and for the topic of this show, for you and I each week to have a database of companies that we, rethink are notable enough to track. Now, we also have what I used to call the launch ticker, which is now the twist ticker. It's an email newsletter.

People are addicted to it. It's got subscribers. It makes a little bit of money. But news has become commodified, as you know, in many ways. You can get the headlines at TechMeme. You can get them on social media. AI companies are now abstracting them. I don't think the headlines are valuable anymore.

I sadly don't think people read the feature stories anymore. They just get the bullet point summary. They see people debating it on social media, whether it's thread, Mastodon, or Twitter X, and they're done, right? I think the majority of people are done, and they don't click through to the original sources anymore. You can debate all that tragedy. But we are in a unique position, you and I, with our finger on the pulse of this,

you as somebody who worked at Crunch Base and Tech Crunch, and then me as somebody who's an investor in this and been doing 2,000 episodes of this, to every week say, let's pick topic, military tech and weapons, right? Yeah. Now, everybody off the top of their head would say, Andrew. Okay, great. We know Andrews valuation. Great.

There's one of the 500. And if we were to say, who are the top 25 defense tech companies? You and I wouldn't be able to go that far. And then if you went to crunch base, you might get too much information. So what I want to do is you and I say, you know what, this month, we're going to work on the defense tech 25. the construction 25 or by stage, the Y Combinator 50, the Techstar is 50, or maybe the MENA, Middle East, North Africa region, these are the MENA 50. These are the Japan 25.

These are the Australia 25. And they would obviously overlap. So if we said, hey, these are the companies in AR that are important. We're going to keep 25 on the list. In order for, when we have those 25 fully done for the AR companies, in order to put another company on, one has to come off. You and I then have that dialogue.

Why is this one coming off? Why is this one going on? Now, I'm not doing this to tweak founders or investors. I'm doing this so we have a deeper understanding of who's doing the best work in the space. So we're going to have a website, twist 500.com. The reason I pick 500, thousands is too much and 100 is not enough.

I think that's absolutely right. Now, we're going to have this list to be public. So people can go and see this, and they can take a look at it if they want to, and that's going to hopefully invite some debate with readers, listeners and subscribers and critiques. The thing is, this is a great way to just get through, as you mentioned, the noise.

The struggle that I had at TechWorks, the struggle that I had at CrunchBased News was just the sheer number of companies out there right now. Every time YC does a class, there's a couple hundred of companies. You know, you want to love all your children the same, but when there's so many of them, you can't even shake a stick at them, it gets tough. And if you're external and you don't get to do this all day like you and I do, you probably want a little bit of a guy.

So I think this is a very good idea. And also, it made me think differently this morning when I was writing myself. I was like, what's the coolest company I'm seeing this morning? What company would I bring to the Twiss 500? So I think it's already changing how I'm thinking about things. And I think that's a great way to kind of keep an eye on startups. Because then it's not just news items and headlines. It's, is this the next standout company that we need to bring to this big and start?

startup's audience around the world. And I think it's a fun intellectual exercise. And it will force us all spreading to cast a wider net. So I don't see any downsides other than, I mean, it's going to be some work, but like, whatever, that's going to be fine. I mean, the way I look at large projects is I like building in public. I like having the debate in public. And I always, you know, just from my career, you know, if you told me you're going to be

hitting 2,000 episodes of this podcast, I believe, are you nuts? Yeah. But what happened over time was I looked at it and it's like, you know, there's 100 people every year. I'd love to have a lunch with it. And I have to eat lunch 365 days a year. So one out of, you know, 3.65 lunches, I'll record. That literally was my premise when I started this weekend startups was. It's not a bad one.

Yeah, you know, I got to have lunch. And instead of lunch, in that case, it was 50 a year. And then I was like, you know what? There's kind of more people I want to talk to. And then I like the discipline. enough talking about the news every day. What people don't see behind the curtain of what you and I are doing here and what you did at these other publications is, you know, when you're preparing a docket, I call it the docket when, you know, the people call it the show notes, but the docket

requires you to make editorial decisions. You know, I said, I'm interested in this weapon story. You said, hey, the XAI story is the big story of the week. I was like, oh, yeah, thanks for reminding me. And then we kind of negotiate back and forth and build a docket. The audience tells us, hey, you missed this. okay, great, you know, we'll get that on the next episode. So this is, if you think about it on a pace, if we can put 10 companies into the database, the Twist 500 per week, we'll be done in a year. It's one year's worth of work.

And we can just go back and forth and ask each other, because I want to do, you're here for three days a week, it was our deal. So if we do three new show programs a week together, which is what I'd like to get to by the fall, you know, just every show, hey, here's three or four companies I'm thinking about adding. And then we just have a little debate about them.

Or here's five that people are suggesting, okay, let's add them. And then the hard one's going to be keeping track of them and taking the way. But once the list is established, we will have somebody who says, hey, you've got these three companies on the list. And a venture capitalist will call me and say, listen, you have these on the energy list. You left off my portfolio company. And my portfolio company has 10 times the revenue of that company and half the number of employees.

Yeah. And then you and I will get smarter. Yes. And then we can share that with the crew. So if you want to follow along, um, the URL is ticker dot this week and startups. com. You can snagged newsletter there.

It's going to be showing up there. It's going to be on the show. It's going to be on its own website. So expect to hear and see a lot about this in the upcoming weeks. We'll remind you. Hey, take a moment. Picture the ultimate all-star team for your startup. You got that image?

Maybe you're thinking about the Avengers, huh? Maybe the X-Men? Wolverine, Cyclop. Ironman? Well, let's be realistic here. Until you've raised your series A or B, you're going to need help building this A team, right? You may not have all the resources to do it. Finding talent, managing all these timelines, and ensuring quality is a huge task for anybody building a product. And scouting for the perfect all in one 10x developer, it's going to take a lot of time. Well, there's somebody out there who does this for a living. Skip the hassle and power up with Dev Squad, okay? They're like Professor X from the X-Men. They just know where all those great mutant developers are, those really powerful ones. DevSquod offers a complete product team loaded with top-tier talent straight from Latin America. Same time zone as us, right? Your team is going to have two to six full-stack developers, depending on what you need, a technical product manager, keep everything tight, and a bunch of specialists. Maybe you need UI and UX design.

Maybe you need DevOps. How about quality assurance? They're all going to be synced up in your time zone, and it's going to cost 75% less than the equivalent team in the USA. We all know there's an incredible arbitrage. There's talent everywhere in the world. And now that we all work online, remote, hybrid, whatever it is, you know that you can integrate this amazing dev squad team into your team. If you're looking for seamless collaboration and the flexibility of monthly payments without long-term commitments, it's time to take action.

Head over to devsquad.com slash twist and snag an exclusive 10% off your engagement. That's dev squad, d-E-V-S-Q-U-A-D dot com slash twist. It's time to squad up and transform your startup with the all-star team you deserve. Let's talk about that defense story that you mentioned because I got to, while prepping for today's show, learn a hell of a lot about the world of defense tech. And it turns out it's way more interesting and monothematic than I thought. But the story, Jason,

is about a robot dog from China with a gun. So start there. All right. So here is a robotic dog. It looks like, yeah. What's that on top of it, Jason? It looks like a machine gun,

like an assault rifle. So it's an assault rifle. It's going into like a green, training exercise building that is made of wire mesh and you see like this, it goes in first basically, and it's firing live rounds

and the person who's controlling it has an Xbox controller. So this is terrifying and this will be the next terrorist attack in America sadly or somewhere else. So this is, you know, the thing of nightmares and China, I guess, is showing this and showing a drone. Whoa, I didn't see the drone ones.

I didn't do the drone with the gun. So there's a drone with a machine gun on it. I mean, it's super weird because you would think it would just build an integrated gun into these devices, but instead of strapping one on, which makes no sense to me. If you're listening to the audio version, when we say it has a gun on it, we mean they literally have like a human sized and set up gun on board. And it looks like a drone carrying a human's weapon versus a weapon made for the drone. or the dog in this case. Which is a strange way to go about it. But then again, we have figured out as a species,

how do you make handheld weapons? We are very good. So, you know, I can kind of, I can kind of see it. You went down the rabbit hole here. Somebody showed us Americans have this too. I've been watching YouTube videos of people putting paintball guns on drones for a long time. So I think it's illegal in the United States for you to put a gun on a robot. I don't, you know, we're kind of in a new area here.

Yeah. Where like, you know, should your kids be able to chat with chat GPT and should they have an unfiltered chat with GPT? Like this came up recently. I was talking to some parents like there are some spicy, you know, AIs out there and kids are talking to them. Should they be allowed to do that? Well, we are, some people think the models should be totally unfiltered and some people like anthropopic think they should be much more controlled. And I think we're having that debate right now. But I will say, when I was growing up, I grew up in rural-ish Oregon, gun safe, shooting guns off the back porch, paintball course, in the field type life.

I don't think we would have looked at the robot dog with a gun and worried about it much. But after living in large cities for a while, it does feel much more dystopian and dangerous because I'm now around folks in much closer groupings. And it makes me, it makes me fret, quite a lot, actually. Yeah, I wouldn't fret too much, but I wouldn't be naive to exactly how dangerous this could get. And, you know, the whole concept of terrorism is to scare you. It's built into the name. And so this is released by China to be scary for Americans. And one wonders if this is to amp up military spending or to be like a threat about.

Taiwan, who knows what the motivation of these being released at this moment of time. But look, here's a paintball gun. You know, when is this video from? Seven years ago, somebody mounted a, you know, a paintball gun on a drone. I mean, this is not like, it's not rocket science to do this. And then if you look at what's happening in Ukraine, you know, I was watching a video, came across my feed of them putting a grenade on a commercial drone, pulling the pin, and then they have this little plastic sleeve that goes over the grenade that kind of holds the pin in.

And then they just go over a person. And then I guess they have a mechanism to open the sleeve up and it just drops the grenade. Do you know what's really ironic about that exact setup? Yeah. Go back to World War I and the advent of plane-based reconnaissance in war zones. We had, you know, hot air balloons before. Yeah. But, you know, like small aircraft.

I think that was the way they started off doing bombings. was just dropping things off the side. Literally out the window. Yeah, and they had handguns. They would shoot at a job. This is before we learned how to shoot through propellers and so forth. Yeah. And now we are back to that just with a much smaller aircraft drones, if you will.

Yeah. And that's why, I think, when I was going through the, what are the hot defense tech companies out there? Yeah. They're almost all, as I can tell, focused on either drone warfare or drone warfare suppression. So everyone's trying to figure out a way to, like, essentially, neutral eyes. Yeah, exactly. And this is not a small thing.

So like Allen control systems, $12 million craft ventures, drone warfare. Shield AI, zero eyes, a pyrus, Fordham technologies. There's a bunch of people who are doing multiple different ways to approach getting rid of drones that could have guns or grenades on them because I think everyone's thinking about, you know, it's hard to send humans. They need to eat. Drones just need juice. Yeah.

And you don't need to recover. cover the drone if it gets captured. They just explode. It's not like a Navy, if somebody, one of our soldiers gets caught, we'll spend decades trying to get them release, right?

And we have. And so I guess my question to you is, what's more dystopian? Sending young people into war or sending a bunch of robots to kill each other on a beach somewhere. Oh, so as long as it's robots on robots, totally less dystopian.

In fact, at that point, it becomes nearly a video game. It would be great if international conflict came down to who's got the batter robots and we settle it far away from population centers. I think people get a little worried about the dystopian element of it that it allows warfare to be done against humans more cheaply without the lots of life on the attacking side in that construct. But I think looking at what Anderle is doing with both autonomous vehicles on the ground, in the water and in the air, we are moving towards a world in which carrier groups and, you know, amphibious landing squads of humans are posse. They're the cavalry charge of the modern era. So basically it'll be battle bots.

Like, wasn't there a TV show where you put a bunch of robots in a ring and they just had like chainsaws on them 20 years ago? So basically, modern warfare is going to be battlebots. What was the one that Kraft invested in, David's Axel's firm? I think it was Allen control systems, I believe. Yeah, I mean, this is the question going around Silicon Valley. Like, is it ethical, moral, noble, okay, writ large, pick your word. To invest in defense tech.

And I'm like, if you're an American and I mean, there is, there are personal decisions. If you were a pacifist, yeah, I could see you saying I don't ever want to be involved with that. I don't want to spend my time on it. I can get like a personal decision like that. But I would never say to another investor or entrepreneur, building defense tech is immoral. if I am benefiting from the security, the United States has, you know, helped establish globally.

And our borders, and as an entrepreneur, you are benefiting from democracy here and freedom, which is tenuous. So I don't want to be like all team America here, but I don't understand the argument, I understand the personal argument. I don't choose to spend my time on defense tech. I just, it's not my thing,

or I wouldn't be able to sleep well at night. But how do you look at that? I wonder. I'm curious. You're allowed to give your opinion now because you're not a tech ranch. You're not, you can really give your opinion here. In fact, I encourage you to get as based as you want. Yeah, Techwitz always had me on a relatively long leash.

Oh, now I have a leash nonetheless. A couple extra links in there. My brother's in the army. He's a major. I'm really proud of him. He was a tank commander, a couple tours in Iraq. And now he actually is a professor at West Point. finished his PhD in...

Amazing. What's his name? Andrew. Andrew, thank you for your service on behalf of the audience. Something physics. I don't know what he does. Lasers. Who knows?

I'm not good at that sort of stuff. Fantastic. But if someone came to me and said, look, there's two features ahead of your brother in the army, and one of which he is better protected because we built some cool stuff and one of which he's not. I know exactly which one I'm going to choose. Now, that is not carte blanche, though.

I do think that there are some companies that, for example, want to compromise smartphones. of dissidents and journalists and so forth. So to me, spy companies, they, okay, so yeah, there's a privacy thing where it's,

you would be okay hacking a terrorist phone, but you don't want Americans phones hacked. And so that is something I think most people would agree with. I think we need regulation on compromising devices remotely. I would say, even for the U.S. government, I don't think just because I'm part of this country,

that means that I don't care about anyone else. But if you want to look at how the technology is used, look at Mexico and Saudi Arabia and India and so forth. And you'll see how China is the number one, right? Well, China is almost a unique. Do they actually compromise zones in China or do they just like open them? Yeah, I mean, I think you're right. I think the expectation in China is there was a really interesting story in the New York Times this weekend about not just forget about the technological surveillance. They've actually reestablished like a Stasi level.

So elders in the community, like sit on the street corners and they visit apartment buildings and they ask people, you know, hey, who's arguing or is anybody talking about these topics? And then they go visit them. And they're not police. They're your neighbors. Yeah. They're, essentially the antics. Yeah. So China is a unique thing.

And I don't, I think this is called the, I'm trying to Google this. My Chinese is so bad. I'm not going to try. it's a system by which you have very much top-down government control. I'm thinking about free societies, democracies effectively, where you would hope that people could be a dissident, could be a reporter and so forth, and uncover this and not have their privacy compromised.

The Chinese model, the Russian model, a little bit different. You know, if you go to the UAE, I don't think you expect your phone not to be asked, for example. No, yeah, I mean, I think UAE is pretty advanced in these regards, because they want to be a safe having spent time there. They want to be a safe haven for international business. So they've taken a more American approach to it. You're totally free to do whatever you want.

Probably not a great idea to criticize the royal family or anything like that in those regions. And be respectful. Like it's almost like it's like a respect thing. And I don't think they're hacking everybody's phones. I think if you were doing something, then they would do it. and they wouldn't have a problem with it, just like our government. I also think,

you know, I give Tim Cook and Apple a lot of credit for, you know, saying, hey, listen, we're going to build the phone for privacy. Yes.

And we are doing that for humanity and for people who buy the phone. But when you come to us and you ask us to break that, we're sorry, but we don't have the keys. I'm going to have to talk to the person who owns the phone. And, you know,

also at the same time, Tim Cook gets to limit the ability for arch rival Android owner, Google's parent company, Alphabet, to invest even more information about us. So it is, it is one of those two firsts. It's good for the people and it's also good for the Apple shareholders. And yeah, last thing on this is then we'll talk about North Korea. I never got vice clauses for investment. Like, I mean, why can't you invest in a craft booze company or a craft weed company? Oh, yeah.

So what it turns out is a lot of the endowments and family offices, are old school. Old school. And so they don't ever want to be in a situation where there is an embarrassment potential because you might have at the top of the hierarchy, high net worth individuals, let's say a family office. So grandma and grandpa are like, we invested in weed,

we invested in psilocybin, you know, therapies. you know, and their grandkids are like, yeah, we're doing psilocybin therapies. Like, you know, your daughter and your cousin took it and they got rid of their PTSD doing some, you know, psychedelic therapy, you know, whatever. And so what they have is just these blanket things that are meant to protect the downside embarrassment or chaos that could ensue from Harvard's endowment invested in magic mushrooms. would be the headline, you know. And then some kid... I would love to read that. Pretty good, yeah.

I mean, I'm assuming in the 60s and 70s, I think there's probably been more magic mushrooms consumed on the Harvard campus than many other campuses. A lot of elite rich kids with a lot of time on there. Yeah, there's no cocaine at Harvard at all. There's never been cocaine in Harvard. It's been a dry campus forever.

But, yeah, they just don't want to have egg on their face. It's basically what it comes down to. That's limiting, though, to me, because there has been so much money to be made in all, beverages, for example, both alcoholic and non-alcoholic. And so it always seemed all be prude to me. You know, we're going to be investing venture capital, but only in these narrow areas.

You can't go outside and know having to be fun. Yeah. And the second piece that comes down is for VCs, those areas typically haven't had the highest returns. So it makes it really easy for them to be like, yeah, we don't touch gambling. We don't touch alcohol. We don't touch drugs. And we don't touch porn.

Sorry, we can't even take the meeting. We're done. And they can just move on with their lives, right? But now when the gambling regulations have changed, now you can start to look at that. And now also remember, some of the money might be coming from a sovereign wealth fund that has specific religious beliefs. It could be coming from, you know, a family with specific religious beliefs. So if there's a family, that's Catholic and they don't believe in certain reproductive sciences. And we have an investment in a company Contra Line, which is doing reversible vasectomy.

You shoot a gel into the Vaz deference. And for, you know, some period of time, five, seven, ten years, the swimmers can't get through. And then if you decide, hey, they want the swimmers to get through and I want to have the joy of being a parent, they just stick a little needle into your Vaz deference. You know, that is the hard part. Yeah. I think they, they numb it out. I would know. And then they give you another hydrogell that releases the blockage and allows the swimmers through.

So imagine you're a young person. and you say, you know what, I'm not going to be making babies in my 20s. I'm going to save that from a 30. And you could, on the way to college, your parents could get you a reversible vasectomy when you're 18 going off to college and then say, here's your doctor's information. Go here when you're 25, 30, 35, and you want to have kids. And then you, so, you know, that's one where if I had an LP who didn't want to be in reproductive science, I wouldn't be able to take it.

Yeah. I'm just trying to imagine that. conversation with my parents on my way to college when I was 18. I think I would rather just cut my head that I've had that with them. All right. Let's move on to North Korea. Last story. Last story.

So essentially the gist here is that there are people in the U.S. who are using American identities and VPNs to help North Korean nationals work for remote tech jobs to make money for the North Korean missile program. one more time. True statement. Okay. You gotta go slower on this one because this is crazy. There are people who have been charged in the United States.

Charged. Yes, the government has said you. Federal prosecutors charge an Arizona woman and four other people, according to Axios, while helping North Korean nationals use American IDs and VPNs to pretend to be Americans working remote tech jobs, and they got $6.8 million in revenue at a minimum from this program to help fund the North Korean missile program.

So, yes, some Fortune 500 money, some big tech money, has gone not to feeding North Koreans to a third-rate missile program from a 10-pod dictatorship. And this is the power of the connection power of the internet. All right. So let's see.

who will be the most outrage as everybody, I think. I think, yeah. So there's so many ways to respond to the story. I guess the first I have is how did they get the jobs without interviews or had to get through the interview process?

So they got somebody's credentials, some American person found credentials for them, and did that American person who spoke fluent, you know, not only English, but also Python or whatever the job they were going for, then hand the job off,

take the interviews for them, and then hand the job off. So I came on and I'm assuming it would be a Korean person, sort of some of Korean-Americans said, I am, you know, Jason Kim, and yeah, I went to MIT and I'd love to have this job.

I interviewed really well, I got the job, and then I gave it to you know, Bill Kim in North Korea. Is that what happened here? Is that what they're saying in these allegations? Because that, that to me seems like incredibly clever and insane.

Yeah. So Axios says that generative AI tools have also made it easier for North Korean IT hires to craft believable resumes. We also know that with generative AI, you can do lots of stuff with video. And then I love this anecdote. In one case, a worker created a resume

that claimed they had worked at Amazon and meta. They ace the interview process and technical test. The only red flag was the person would take about 30 seconds to answer a question. So essentially, you can't solve latency, but you could just say, hey, you know, I'm at the, I'm at the, I'm at the ski get together. So sorry, the internet's not great. I'm at Coachella.

Right, exactly. But I do think that remote work does depend a bit on trust. And we've talked about, you know, corporate culture at launch and so forth and how we handle that. But scammers are going to scam. And North Korea has been very effective at, you know, using cryptocurrency as a way to, you know, ransomware other companies. And so I'm not shocked to see this. The dollar amount isn't that large.

Six, seven million dollars is, it's money, but it's not like nation's statured fuel for your rocks, I guess. Couple of circuit boards. It'll get you a couple thousand feet in the air before it runs out. But I think it just goes to show that companies, when they are doing hiring, must be very careful. But again, back to my point about taxes. it's been hard as a U.S. citizen born and raised here to sign up to get paid here. So I'm impressed at the ability of these companies to actually, these people to pull this up. You know who the worst person in this story is?

The companies. I know everybody wants to blame the North Koreans. Everybody wants to blame this woman who set this all up. Maybe you want to blame remote work. Everybody's going to have a hot take on this one. These companies are asleep at the wheel. If you're going to have remote work at your company, there's a very simple way to make sure that people do work

and that you know who the person is doing the work. You could have a stand-up meeting every day like we do, and we do Zoom, and I tell people, hey, be camera ready to be on a half-hour call in the morning if you want to work here. I mean, you don't have to work here. You can find another job. and at the start of the day,

spend five minutes cataloging what you want to get done. At the end of the day, catalog what you got done. And put it in the general channel. And your co-workers see it, whatever. If you have questions, boom. And then at the end of the week, I just say, hey, if you want to be in the bonus program,

this is how, like, I'm, you know, just very simple. If you want to be in the bonus program, you have to do your end of week by Saturday, noon. You can do it on Friday in the afternoon. You can do it Friday night. You do whatever you want. But I just, need the end of the week report on what you got done. It's not a TPS report. It's just you

taking accountability for what you got done. And when I first instituted this years ago, because people were asking, you know, we had COVID, but then before that, people were asking to do more remote work. And I was trying to be like flexible about it. I just said, hey, listen, you know, trust in accountability, you know, like you would with any other relationship. You know, freedom and responsibility is the name of the game here. So you're free to work from home if you take the responsibility of getting stuff done. The end. Now, if these guys were on a call with Zoom every morning on camera,

that's why we do on camera. So, like, you just have to take a shower and be normal or at least be camera ready. Like, it's not too oppressive, folks. Like, you're getting paid a salary, half an hour to come on air with your coworkers and maybe build a modest amount of culture. I think it's like a huge payoff to be remote. Isn't it? Like, aren't the remote jobs going away right now?

I shave to record today for this. I changed. Well, you're an on-air talent. I changed shirts to be camera ready. But I would, you know, I'm totally fine. I've been on camera because to me, it is the thing that I will do in exchange for not commuting to Boston, which is what I would have to do in the old model of life. I would be every day leaving at 6.30 and getting home at 6.30 to get to and from Boston.

I would never see my kids, you know. So, yeah. Now you see him too much. that's what's going to happen. You're going to see you too much. Such a lie if you have children. Three days. Well, I mean, this is what's happened with remote work is a lot of people are like,

I'm losing my mind at home. I'm going to get a divorce. I'm going to like not. So a lot of, I don't want to make this gender specific. I've got some guy friends who have said like, I can't take my family anymore. I need to be in an office a couple days a week.

And they're opting into it. And, you know, like, listen, this is like a very heteronormal. kind of worldview, but this is what married men with kids have told me, I'm losing my mind at home. I got to be in an office a couple days a week so I can concentrate. There's a solution. Get yourself a he shed. I am currently in my backyard second building, and it's awesome because the house is

You're in a heeshad. I'm here. It's wired up. I got a mini split. I got, you know, I got, but you went for the heeshad, not the bro barn. It's actually. Not enough room for a bro barn. Not only for a brobunk, because I live in a city.

And also, my mother-in-law designed this. This is actually a spite shed. It's a long story. It's a spite shed. Oh, really? Like, curb your enthusiasm? Like, it's designed to piss off people behind us because they cut our trees down. It's like the whole thing.

But, oh, just have. Spicy. The backyard separation from my house and my work is enormous because I can literally, I finished work, I close the laptop, and then I have slack on my phone, but I go into the house. And then I'm me. And then here I'm at work. I think that's clutch for health.

very good for mental health, yes, to have that separation. And a commute used to signal that. But what you said is your he shed, your bro barn or a bro barn can actually serve that purpose. Bro barn evokes like, you know, pigeons in the rafters. And like this is what? No, no, it's a thing. It's a total thing. Literally in Texas, all my friends are having these bro barns or barn dominiums is the

barn dominiums, the term they use. I came up with Bro Barn. They used Barn Dominium here. In Texas, they let you build whatever you want. It's like the exact opposite of the Northeast or California. You want to build like a bathroom in the mission. I don't know if you saw that $1.7 million bathroom that took eight years. Yep.

Like literally in Texas, if you want to put a Bro Barn up there like, oh yeah, you can put a bro barn up. You don't have to get permission. You just put it up because it's a barn. and they're like, and then in your barn, you can build whatever you want. And you're like, wait a second. It sounds like a house. And they're like, nope, it's a barn.

It's made a melt. The reason why there is no bathroom in my backyard he shed or it's not really a bar. But anyways, it's because it's legally a shed because it doesn't have a bathroom. And our old neighbor complained. And he thought we were going to like Airbnb and out as like a separate house. And so we had to like prove to the city that it was in fact. a shed. So this is legally a shit. But

your mother, the Texas sound actually kind of cool and fun. Last thing on the North Korea in front. What was your take on it? You know, like this story, like and you have a hot take on it at all? The employers are completely insane here. I can't imagine how embarrassed I would be if someone

in my company had managed to have someone on their team who was a person in North Korea who is stealing our W-2 money for a missile. I would fire the entire HR department and start over. I think HR just has to go, period. I don't know if you saw a Chumat's discussion about it.

The HR group just screws everything up. Like they don't, especially in your startup, like don't have an HR department. Just you got a lawyer. You outsource to a PEO. You're using whoever. Sure. And like people have HR issues. Like they can go talk to those two people and just focus on work.

Check this out. I just want to show you Barn Demi. This looks like, right? You know, if I would show you this, you'd be like, okay, that's a barn, but it's got windows. You know, it's kind of got a deck, right? And then you go inside them. And it's like, wait a second.

That's not a barn. That's a house. It's like, nope, that's a metal barn. We just happen to have put some stuff in it. I love this because barns are often modular and therefore they're relatively cheap. Now, these that we're showing on video are not cheap because these are not barn barn. But I love the idea. I love open floor plans.

love big open spaces. I love windows. This works for me. Although I will say that this is definitely a Texas thing because there's a lot of room in Texas. Whereas up here in the Northeast, yeah, less room is available. Well, and also regulation. Like, if you build, you know, talking to my friends who live in Texas, they're like, yeah, you know, it's your land. You build stuff like, people don't come on your land. Like, why would people come on your land? And I'm like, like, inspectors. Like, when your neighbors complain. like 20 people show up from the city. They're like, yeah, we don't have that.

I'm like, why don't you have that? They're like, why would we want that? And I'm like, fair point. Well, this is, well, how many people showed up at your house after these complaints? Like, you must have been like, oh, I wasn't here. Did they have guns drawn? I was still, I was still 50-50, San Francisco Providence at that time. So my mother-in-law handled it.

By the way, she's fierce. So I feel sorry for the people from the city who ran into that bus saw. Yeah. But I think density is a point here. Like in tech, if I moved to Texas, I would buy a thousand acres. I would buy like a ranch.

You could do that. You could buy a ranch outside of Austin, like an hour outside of it. I think it's like 40K an acre. So, oh, 40K an acre. 40,000 per acre for like an hour outside.

Then you go two hours out of it would probably be 10K. So. I want 100 acres. There we go. By the way. Downsizing this pretty good one. By the way, The largest park in your town is four acres, I'm guessing.

Like, you have a park you take your kids to, it's two acres. The parks I take my child to are a 0.2 acres. Are you kidding me? Yeah. And they're walking. Big park with like, you know, three baseball diamonds. Like there's one of those, right? With the soccer field.

Like there is. That's like two acres or four acres. Yeah. Right. So, you know, but these barns are super cheap. They're just metal. You put them up for 10K, 20K. These are like the fancy ones I'm showing you.

The fit, well, I don't want to, I don't want to. Can you imagine if your friends have a fancy bro barn and you show up and then they come to your house and your bro barn sucks? It has like one mini fridge in the corner and it's all just sheet metal. You would be ashamed. How could you even hang your hats? How dare you? How dare you? How dare you?

How dare you? It's been an excellent episode. Yes. Yeah. All right. The Twist 500's coming. We don't take pitches for the podcast. If you are a PR person, don't email out.

Don't email me. We do not. accept pitches for the pot, period, full stop. So, don't send pitches. Do not contact us. When you contact us, I hit shift explanation point, and I block not only your email, but your entire domain. The only way you're going to get on the show is by doing great things in the world.

If a CEO directly emails Alex R.I. And talks to us about what they're building. That's different. We encourage that. That's fine. We love to talk to founders and CEOs. do never, this is a PR tip for founders, never hire a PR firm, never have them email important people in the world.

It's annoying AF. If you want to be on a show, all you have to do is listen to the show, interact with the host on social media and an intelligent fashion, play the long game and build something interesting, and eventually they'll invite you on the show. But having some PR dope said 500 emails to 500 people that's generic is only going to annoy us. So rule number one here is no PR pitches.

Sorry to PR people. Yeah, I thought we were wrong. I don't know your take on it. I didn't realize that we were going to go into the whole like how to handle comms game. That's probably a longer conversation that we have time. Well, no, I just, I'll tell you with the Twist 500 thing, like I know what's going to happen here.

Don't send your PR people. It's going to be a ship exclamation point for me. Maybe Alex has a little more temperament for it, But we don't like PR people a little bit more. Well, because I have friends who work in the world of comms and PR, and I'm sympathetic to them as humans. But I will say the model is, is not how I would go about it. And I do think that it's often very expensive for especially early.

It's 15th a month. It's annoying as a service. If you hire one of them on an hourly rate and they train you how to write emails or interact with journalists and podcast host, that's smart. Yeah. But like there's like now these. podcast. Do you know about these podcast agencies? No, tell me. So there's like

PR agencies or comms agencies that only do podcasts. So they email me all the time. Hey, would you like to be on more podcasts? And I'm like, hey, dumbass. I have two. I'm actually three now with liquidity. Like, I don't need to be on any podcast. Like, the world's got enough J-Cal. And then the podcast agency, four different people from the same company will email me two pitches each in the same two week, period. And I'm like,

you know. And then the Cision, do you know about the Cision or Vision? Oh, yeah, Cision. It's the database. Listen, I don't know how many times I got to tell the Cision people to take me out of their database. And then they're like, we got you out of the database. And then like, bink, I'm back in the database. Cision is pure evil.

If you are listening to my voice, never pay a penny for Cision. It's garbage. I hate this company. I hate the people who work there. I hate everything about them. They're spamming me constantly. Constantly, I have a global block on emails from Sision, like any other journalist or PR person, do not waste your money on Sision.

I was going to say you should drop your email so that way Sision can reach out to you and see how they can repair the relationship. There's no way to repair the end. Not from your Sision email. You may have to hit me from your Gmail, but get me the hell out of that database. All right. Alex's newsletter can be found at. Cautiousoptimism. News. That's very kind, Jason.

Caution optimism. What is he? You charging $20 a month? the Hyundai a year standard? I think 10 a Hyundai. I haven't actually turned that on yet. So go there and pledge. Do me a favor, everybody, if you're hearing your fan of the show, go put some pledges in.

Be a mensch. Put some pleasures in for Alex. He's a great writer. We need more Alex words in the world. Follow him X.com slash Alex. I'm X.com slash Jason. Follow us in the other places. YouTube.com.

All that good stuff. Twist 500 coming soon. We're going to try to do another news show this week. So we'll have two news this week and a couple of interviews coming up. We'll see you next time. Bye, everybody.