This Week in Startups - WeRide IPO, Polymarket + Perplexity, the Trump Bump and more! | E1992

Starting point is 00:00:00 If they do but one bump of Trump, they will become addicted. But one bump, Trump of bump. Now, if you think about the Trump bump and doing Trump bumps, what happens is it rewires your brain. It creates a sense of euphoria. Now, it'll create a hangover the next day and you will feel brutalized. But what happens after this bump is your ratings go up. And it's going to lean your coverage to positive because you want.

Starting point is 00:00:30 more Trump bumps. And he brings the bumps. You know, he comes, you know, there's going to be five bumps per, you know, every half hour. Are you going to be doing 10 bumps an hour? It's pretty intense, you know, like this is going to make Keith Richards and Kate Moss jealous. Like, this is a lot of bumps. Elton John is going, whoa. This week in startups is brought to you by Google for Startups. Accelerate your startup journey with the Google for Startups Cloud program. Get up to 200k in Google cloud credits or up to 350k for AI startups plus training and guidance apply at startups.govs.com slash twist. 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

Starting point is 00:01:18 time at vanta.com slash twist. And assembly AI. Get maximum value from voice data with assembly A.I. Build powerful products and features for your end users on the industry's leading speech-to-text models. Get 100 free hours to start building at assemblyaI.com slash twist. All right, everybody, welcome back to this week in startups. I'm back, Alex. As you know, I got COVID. Yes. Pretty brutal. Luckily, we had a lot of banked episodes. We always banged three or four episodes. And you did a great episode where you interviewed three members of the Twist 500, the 500 most important private company. in the world. Well done. Yeah, Huntress, Sayera, and Tollbit.

Starting point is 00:02:01 So a couple cybersecurity companies and one company that wants to aggregate, essentially media companies to kind of put their data together and license that out to AI. Really a lot of fun. I love talking to founders. It was actually four different TwisterFundered interviews over two shows. Because we also had the gusto chat with Josh Reeves. Nice. He's interesting.

Starting point is 00:02:20 You know, we have a lot of folks on the show, kind of show up. You can tell they're caffeinated, who where you're like, you know, fighting kick it up. His style is so much more like, I'm building for 20 years. We're going to go, that's our direction. We're going to roll. And so you almost want to like nudge him into saying something a little bit spicier. But he's like, no, man, my model works. We're a $10 billion company.

Starting point is 00:02:40 Yeah. Yeah. So. Gusto is amazing. I mean, we, I've used it now in, of my own companies, a couple. And just great product. You know, that whole space of payroll combined with HR. It's just such a great category.

Starting point is 00:02:55 I can tell you 20, 30 years ago when you started a company, it was just a pain in the neck because you had to have an office manager, an HR person, real estate, signing a real estate lease for three, four, five years, putting down one year of rent and what's called a letter of credit. All of this equaled about a half million dollars, you know, when you were starting out, right? In an accounting department. So it was very strange. Now, the idea that you would hire an accountant in-house, an HR person in-house, house, have real estate holdings, have leases. It's just all been abstracted. And that means more

Starting point is 00:03:31 people can start companies and get to product and focus on product more. So it's just great change. Just to throw in one more point about that, I love going back and reading books about startups in the 90s because they say things like, well, we had to raise a bunch of money to go buy servers. And I'm like, oh, right. And then they pay co-location fees and worry about their like their uptime. And, you know, you never hear of a founder who's just woken up like 3 a.m. to go fix the servers because Amazon's on it or Azure's on it, you know. It would be interesting to see how many different expenses that a 1996 internet startup had that have now been completely abstracted to the point of being either an API or a managed service.

Starting point is 00:04:07 The half? Yeah, it's definitely a half million to a million dollars per year of operating spend in dollars from the 90s and 2000s less. So you're correct. The first company we had, we wanted to do email and we had the Silicon Alley Daily newsletter. This is before there was substack and MailChimp. So what we did is we set up a bunch of Qmail servers in the closet. And it was about $40,000 worth of them. We got a dedicated T1.

Starting point is 00:04:33 That was $15,000 per month. But I put all that together. And it was probably, and then we had a sysadmin, my friend Brian Alvey, set it all up for us. So you're talking about $150,000 a year to maintain this probably between people and costs, et cetera, or more, no, maybe $200,000. And, but we said, we're going to make $10,000 a week in advertising. that's a half million dollars. So we'll break even, you know, when we get to the 20th week of the year,

Starting point is 00:04:58 30th week of the year, everything else could potentially be profit. So it's just fantastic that you can go faster. And it's so cheap. Like MailCham, cheap, substack, free. I really think that deep in my brain stem, that software is too cheap, by a factor of 10, compared to like the productivity people get out of it. I think you're right. I mean, if you were to just look at the power of email,

Starting point is 00:05:23 We use Beehive now for the Twist 500, which used to be called the ticker. And we use Coda for the database. And if you were to do this in another era, you know, it would have been a quarter million dollars in, you know, software developers to build that platform or in the client server era, you know, $50,000 to buy the server software and you would sign a five-year deal. So a quarter million dollars for five years. And now, you know, you talk about hundreds of dollars. And even, you know, MailChimp, I loved MailCham. We used it for a long time. But, you know, for newsletters, which are free, Beehive became and SubSack became better options, I think, for people because they're free.

Starting point is 00:06:01 And free is a pretty good price or close to free, you know, essentially free. Even the paid version of Pehive or what you pay in 10% of your, you know, paid subs to Substack, it's such an affordable fee that more people will use those products, therefore they make up for it in volume. So good on technology. Yeah, okay. So we didn't mean to start here. We have other stuff that we actually have notes on and plans for. We haven't talked in two weeks. So you had a nice break.

Starting point is 00:06:26 I take it, a little vacation. I did. I went up to North Massachusetts to a lake and a cabin and a golf cart. My first time ever with a golf cart. Nice. It's just an adult goat cart. It's amazing. It would so much fun.

Starting point is 00:06:39 My daughter loved it and it was just a blast. I now have decided that we need to redraw all American cities, strip out all the roads, replace them all with golf cart tracks. And we should all just be cruising with, one foot out the, you know, out the side, I'd like 11 miles an hour old drinking coffee or a margarita. It's great. I love it. I love a certain speed. And the speed I love is somewhere between 15 and 30 miles an hour. This is what an electric bicycle goes. When I had my Vespa in New York, you know, it was topped off at 35. I had a little small one. And I do like that. I like that

Starting point is 00:07:14 speed for cruising because you can take things in. You get where you're going. You're not like zip, zip, zipping, but you're kind of zipping. And it's a nice feeling. I'm a fan of that middle, that mid-speed. Yeah, no, I'm with you on this. This is why I think when you're on the highway going 75, it's so boring because you can't actually focus on anything so you see nothing. But if you're going 15 or 20, you can see every single squirrel, rabbit, dog, you know, it's all it's with you. So what we're saying, friends, is go out there and touch grass. But on the show today, Lots of good stuff. Lots of good stuff.

Starting point is 00:07:49 Jason's Unified Media Strategy slash the Trump bump, then we rides IPO, polymarket and perplexity, everyone's two hottest companies out there today to chat about. A bunch of money going to Europe and venture capital. I don't know how to enter this other than saying that something happened last night that a great many people tuned into. And you had a thought or two about it. Well, Elon did an interesting conversation with Trump, and he pitched it as a conversation as opposed to an interview,

Starting point is 00:08:18 which I think is similar to what we do on All In as well, which is it's a conversation as opposed to an interview where one person is preparing questions and knocking the other person off face kind of thing. But they went for two hours. There was a lot of like hand-wringing and prognostication afterwards, and people are wondering why there was such a strong reaction to it. Okay.

Starting point is 00:08:44 I'm sure you have feelings. You and I are both. media guys, and tech guys. So we have a lot of opinions on these things. I just want to point out, you know, what I've experienced firsthand with Trump and that I've been talking about for a couple years, which is the Trump bump. I believe anybody who has a media property, if they do but one bump of Trump, they will become addicted. But one bump, Trump of bump. Now, if you think about the Trump bump and doing Trump bumps, what happens is it rewires your brain. It creates a sense of euphoria. Now, it'll create a hangover the next day and you will feel brutalized. But what happens

Starting point is 00:09:22 after this bump is your ratings go up. So when we had Trump on All In, you can just look at it statistically. They could probably add it 50,000 subs. In other words, 10% more subs to the YouTube channel. Those episodes went straight to the top. And you can see the Trump bump for weeks afterwards where people are still coming back to that episode. It, you know, it kind of lingers. I think it's probably got a million or two million views on YouTube alone. So then your mind as a person with a media property is, well, when can we have Trump on again? And this is the, yeah, there's the Trump interview. I don't know. What does it say there in terms of how many million views? Okay, 3.1 million views. And it's a month old. The average all in episode, I think, on YouTube,

Starting point is 00:10:05 just the YouTube portion is 4, 5, 600,000. So it's roughly five times. All right, everybody, you know, being at a startup is a team sport. You're not going to get there alone, man. You got your founders, you got the early team members, of course investors, most importantly, that first couple of customers, right? And you all work together to get your company off the ground. And I have great news for you and your team. Google for Startups Cloud program is now a partner here at this week in startups. And listen, you all just want to know the number. Here's the number. 200,000, 350,000. These are the two numbers. What are these two numbers?

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Starting point is 00:11:36 com slash twist. All right. Let's get back to this amazing program. So when you see everybody doing this, there's two ways to go. You can either, if you have an avenue to engage Trump like Fox does or Tucker Carlson with his new independent show, Megan Kelly, if you can get him, you're going to be nice to him. You're going to be engaging with him. And it's going to lean your coverage to positive because you want more Trump bumps. And he brings the bumps. You know, he comes, you know, there's going to be five bumps per. you know, every half hour, are you going to be doing 10 bumps an hour? It's pretty intense, you know, like this is going to make Keith Richards and Kate Moss jealous. Like, this is a lot of bumps. Elton John is going, whoa. Now, you go on the other side, you're Rachel Maddo, your anti-Trump, you consider him a threat to democracy, whatever, you're on the other side of the spectrum. You can't

Starting point is 00:12:31 get him on your program, obviously. He's not going to sit. And in all likelihood, maybe one out of a hundred times. But you're going to get excited to, you know, if you write something critical, boom, all of a sudden your ratings go up. Now, MSNBC, Fox would be the two perfect examples or maybe New York Times and Wall Street Journal, but I believe the media is so obsessed with Trumpumps. They're so addicted to the Trump bumps that there is a unconscious emergent behavior,

Starting point is 00:12:56 which is he fills so much of the room and you get so many ratings. You get paid subs on the New York Times Guardian and Washington Post. Remember, they were actually saying, if you want more coverage of Trump's crimes, like literally that was their pitch, subscribe, help us cover Trump's crimes more.

Starting point is 00:13:14 Like literally was in the marketing. So I think both groups are going to be responsible if he does get elected again for playing a big part in this. One group for engaging him, the other group for attacking him. Anyway, it's an underreported story, I think,

Starting point is 00:13:30 and that's a lot of what happened last night because the media business is a little bit threatened by the fact that sources are, you know, giving interviews, maybe not to mainstream media and going around it to more direct, you know, the direct aspect of it. It's a little threatening, but I think it's the bumps.

Starting point is 00:13:45 That's the major issue. What is your take on it? So the last thing you said, a lot of people view the media world to their own personal lens, which is kind of grievance forward, that the media hates substack because blah, blah, blah, blah. The media hates, first of all, the media is the least cohesive, coordinated thing ever. So there is no media. Right.

Starting point is 00:14:07 The other thing, though, is I think a lot of what you're saying about the Trump bump is correct, but I think it's more of an example of something that's a little bit broader and more common, which is the sheer power of celebrity. And I would say that the Trump bump that you're describing is similar to coverage of Taylor Swift, for example. Sure. I think also coverage of Elon himself. If you put Elon Musk in a headline, you will get a lot more people paying attention to you. Yes. This becomes a thing that the media could better ignore or not pander to if they were in better financial straits. But right now, with social media no longer being an effective driver of traffic and attention, everyone's fighting for the same four boxes in a Google search window.

Starting point is 00:14:56 Yeah. And so if all the people in the world are searching for Musk Trump or iPhone 17 or, I don't know, Musk Tesla or pick your thing or Taylor's. concert, then you almost can't not do some of that because that's where the people's attention is going. So I put the Trump bump under that kind of like broader umbrella. Sure. There is an example, though, to your point about people joking about wanting Trump to come back to be reelected because it'll help them.

Starting point is 00:15:26 And the only example I can find of this was Axel Springer's CEO a couple of years back. He said this. And then he was like, oh, I was kidding. I was kidding. That and da-da-da-da-da. And everyone was like, We know you guys. We know you actually want him back because it would be good for your business.

Starting point is 00:15:41 But as a last note, the average journalist is, I think, concerned about having something that can do stable employment much more so than setting media policy on this level. But I'll cop to it. If four people got in trouble and three of them were well known and one of them was not, I know which one I put me at the end of the headline because I would like people to read my story. Which is, but I think that's become a relatively cheap and low rent attack of trying to cover things that people care about. And I think that the media should do a combination of things people care about

Starting point is 00:16:17 and also things that they don't care about yet. And that's why I read the economists, totally well said. Yeah, totally well said. And I think, you know, the, you know, a lot of things in life are financial. It's resource based. And when you have competition like the media does now, And it's a, it's death by a thousand podcasts and substacks and beehives and, you know, Twitter handles and TikTok, you know, personalities. You know, it's literally death by a thousand cuts, just like the networks experience when cable came out. And that is at the core of this. They can't afford to keep the lights on in many cases.

Starting point is 00:16:52 That's why independent media is doing so well. Because if you do happen to find your niche in independent media and you keep your cost structure low. Like, you know, this week in startups has nine, eight employees, I think, three in sales, five in production, me and you. I think it's nine of us. You know, it's a pretty big team, nine people, but it's not 900, you know, it's not 500 miles to feed. One third sales and 25% producers. I mean, that's literally like bringing money in, keeping everything going, getting it edited, getting into the lives. And two us. I mean, honestly, I think we're, couldn't be more bootstrapped. Right. I think you are the least important.

Starting point is 00:17:29 parts of the show, to be totally honest, because without the other people, no show happens. I want to talk about the actual interview, though. I tuned in for a little bit. Yeah, I heard some of it. Yeah. What do you think? Well, I'm just... Or the conversation. Remember, it's not an interview. It's conversation. Sorry. Okay. So, depending on your framing, yeah. I just want to say that Elon's level of patience was greater than I expected. I tuned in during the nuclear power, climate change thing. Yeah. And the former president said something along, I'm going to paraphrase gently here, that the sea level is only going to rise. by an eighth of an inch in 400 years,

Starting point is 00:18:02 which is wrong by a factor from, I don't know, 50 or something, farcical. And Musk, in his infinite patience, kept dragging him back to nuclear power, like, no, nuclear power is good. And Trump's like, well, I heard that Fukushima is actually now on Mars. And Elon was like,

Starting point is 00:18:17 I just not as bad as you think. And I, he kept just, yeah, it was very patient. I am. I think, you know, Elon is not obviously an interviewer by trade, but, you know, he's a friend of mine and we've had countless conversations.

Starting point is 00:18:31 He's a great conversationalist. And I think when you're interviewing the president and specifically that president, right, 45, having also had the privilege of doing it, one and only president I probably will ever interview, but you never know. I haven't really tried. He is got a playbook like a medium, right? And one of his great skills is his ability with these anecdotes and comedy and a little bit timing is like a routine. He got it from Howard Stern, actually, which was like a major media

Starting point is 00:19:04 influence in the 80s and 90s and into the 2000s in New York City. I was there for it. I grew up on Stern. Trump was a regular on CERN and Trump loved Stern, like at his wedding type level of love for him. Yeah. You know, it was really into him. And there's a famous moment inside of the movie Private Parts where pig vomit, who he named his producer, played by Paul Giamatti is like, what's going on? And he's like, the ratings are up. He's like, how could the ratings be up? What are they saying?

Starting point is 00:19:35 They're like, well, the people who love them listen for 70 minutes on average. And, you know, the average commutes 40. And he's like, why? Why do they listen? He's like, well, number one reason given, want to see what he's going to say next. Yeah. And he's like, okay, tell me about the people who don't listen. He's like, yeah, they listen for 95 minutes.

Starting point is 00:19:51 He's like, what? They listen for 25 minutes longer? It's like, yeah. He's like, well, why do they listen? He's like, number one reason given, they want to see what he's going to say next. Right. Trump took that playbook and it is why people listen. What will he say next? All right, founders, do you want to sell to bigger customers? Of course you do. You want to get that ACV trending up, up, up and to the right average customer value. And you want to lower your turn,

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Starting point is 00:21:08 And Vanta is such a big supporter of this program that they're going to give you $1,000 off at vanta.com slash twist. That's vanta.com slash twist for $1,000 off your sock, too. And it is effective because I was watching political Twitter. I was also taking care of the baby. My wife had a thing, so I was solo carrying for Ado's sleep schedule. But he called Gavin Newsom, Gavin Newsom. And that is such, exactly. That is such a teddy, small-minded, unprisoned,

Starting point is 00:21:39 hilarious thing that everyone loved. The flip side, though, is he does have an exposure problem. Because he's been going out there on the campaign trail for so long now. When I tune in, I kind of, it's almost like you're going to like see the same comedy set for the third time. It gets a little flat at times. You know what? If you do see a comedian do their schick or, and I see this with old people, old people kind of run out of life experiences. So they tell the same 17 stories.

Starting point is 00:22:11 You go see your grandfather and he was like, oh, you know, can I tell you about the fire that I rent to? And I'm like, yeah, grandpa. And he's like, let me tell you. We were there. He doesn't even hear you say that you heard the story 17 times. He's going. My dad is also in his 70s, and I have heard the story of how they redid their cherry cabinets in their kitchen. Probably four times.

Starting point is 00:22:32 I'm probably going to get it four more times. What I do like about that, though, is that it was something new. It was casual. And you have to ask Trump two or three times to get through his stick, his bit, his anecdote, whatever it is. And I did that successfully. I think twice in the interview. And, you know, I was, I only had 15 minutes of the 60 minutes we had with him or something. Yeah, yeah, yeah.

Starting point is 00:22:56 You know, but you saw when I got him to, I nailed him on, down on abortion, and I nailed him down on immigration. And then I was going to go January 6th, but we ran out of time. And I was firing off the last couple of questions trying to get him in. And, you know, I would have got him on January 6 as well. But you have to ask him three follow questions. And Elon did that last night. And I didn't talk to Elon about techniques or anything.

Starting point is 00:23:16 But he did a very good job of bringing him back and kind of. But spaces is peculiar because you also don't see the person in their reaction. In a normal conversation, we know when we're going to move on to the next thing. And because, you know, the person's like, okay, got it. You know, you have all kinds of techniques as an interviewer to, you know, move the conversation forward. In other words, to interrupt the person, to stop them. And you'll hear me on all in when I have to deal with three, my three partners who are, you know, like they all want to talk for five minutes each.

Starting point is 00:23:46 And if they all talk for five minutes each, and now we've got three, five minute monologues. And it really is a terrible experience for the audience when people do that. So I interrupt and I try to move the conversation, get the ball to move around. So one person is not Carmelo Anthony, you know, the ball. And they dribble the ball for 21 of the 24 second shot clock, which is just not good basketball. You want the- I understood that reference. So, you know, on the margin of some people will get mad at me because they're Sax fans and I interrupt the sax or they're Freiburg fans. Sure.

Starting point is 00:24:14 But when they get to two, three, four minutes, you know, like, okay, we should move the ball here. There was a little bit of that going on, which is very hard. Spaces is a little bit like a CB, and you don't see the person, so you're like, okay, tell me about your thoughts on the border, over, but people don't say over. And so you could kind of step on each other a little bit with that kind of talk radio format. Yeah. What's great about it is you can pop it up. It's freewheeling.

Starting point is 00:24:40 The limitation of it is you don't have visual cues, and it has a little bit of a CB radio. And I don't think either party were using headsets. So I got to talk to Elon. It has to be optimized for headsets. As much as people don't like to wear headphones or whatever, it would really help if they put in ear pieces or had a stick microphone of some type. But anyway, those are technical issues. Overall, go in your child's room, find an iPhone case that's just laying there somewhere.

Starting point is 00:25:06 Find the headphones that they never took out because they want to be cool and I have AirPods. Plug those suckers in. Oh, the old school ones. It's free and it's actually B-plus audio quality. and it's the cheapest and best way to simply go from talking to your phone like this, which I saw Trump doing pictures of him doing this space. And I wanted to be like, dude, come. It's the worst.

Starting point is 00:25:27 It's the worst for AV quality. When I saw that, I fringed. I was like, oh, my God, he's on an open air microphone in a, you know, giant room. Yes. That's going to create distortions. And that's why I think it sounded a little bit like he had a lisp. Did you notice that? And people were talking about this Lisp thing.

Starting point is 00:25:42 And I was trying to figure out, is this like dentures, a Lisp or a LISP or a LISP? little echoy in the room or some combination of it. I never got the definitive. Yeah, if Trump drank, I would have said he had a scratch or two, but he doesn't drink. So it wasn't that. He doesn't a, he, it does sound a little bit like that as well, like as if you were on drunk history and just a little bit. Just a little, like 5%.

Starting point is 00:26:04 If it sounds like me after I've been to the dentist and they've numb part of my face. So I'm, I'm going to put a dollar on dentures, which is a perfectly reasonable thing to have if you were elderly. I'm not too judging. Um, but also if you are going to go. on a space with a million people and the richest man in the world and you're trying to run for the biggest office in the world, but on some damn headphones and fix your teeth. Like, I mean, come on if that was what it was. But I didn't, I thought maybe I was hearing things or was my phone

Starting point is 00:26:29 connection and then I saw the headlines and there was a large number of headlines that mentioned it as well. So anyway, overall, there's a lot of other news today. You know, where do you want to go in terms of the big news? I'm really fascinated with self-driving and there's some EV company. You and I love public companies. I'm fascinated with the tipping story. I'm fascinated with Uber's earnings and what's going on and self-driving. Where do you want to go today? We're doing Wii ride.

Starting point is 00:26:54 I never heard of this company. What is this? Well, Jason's great. So Jason texts me yesterday. He's like, hey, who the hell is we ride? Why are they going in public? What do we know about them? And I was like, well, I have the F1 filing up.

Starting point is 00:27:03 I haven't read it. So I promise I go through it and take a look for us. We ride, it turns out, is a unicorn, Chinese self-driving company, raised $1.1 billion, And $5 billion valuation is going public in the U.S. this week. We haven't seen a lot of IPOs, Jason. We've been struggling, suffering from a lock of filings and kind of good listing. So we care a lot. And the company in this case is going to be raising a lot of money.

Starting point is 00:27:29 The actual IPO itself is going to be about $100, $110 million, depending on underwriting shares and so forth. As you can see on the screen, they do quite a lot of different autonomous driving stuff from robo taxis up to Robo Street Sweepers. Which love it. Yeah, as long as they don't run off my dog, I don't know. Yeah. No running over dogs. That would be bad. Yes.

Starting point is 00:27:50 But also, there's a concurrent placement of like 340, 380. So this is going to be a serious offering in terms of capital rates. Okay. So we've never heard of this company. This leads into my theory about ride chairing. Now, I'm obviously still a big shareholder at Uber and believe in the company. I'm obviously a big Tesla fan. I don't own shares in Tesla.

Starting point is 00:28:09 Full disclosure. Very complicated for me if your friend is. to see you over that company and you have shares. You could get dragged in all kinds of craziness. So I just, it's not that I don't believe in the company, but... You own enough Tesla's that everyone knows you like them. I have four.

Starting point is 00:28:24 That's the most of anyone I ever met. Two collectors editions that I don't drive. Number 16 of the Roadster, number one of the signature Model S is the first Model S ever available to the public. And then I have a Y and an X. And when I've had the Y and the X is they both came out to the very old. When you do your will, though, can you leave me

Starting point is 00:28:41 the Roadster, the first one. Okay, I just have to, let me just change the will because I gave that to my oldest daughter, but I'll just switch that over to Alex. Yeah, thank you. That's the one that's based on the Lotus Exche. Yes. Yeah.

Starting point is 00:28:54 It's the orange one. It's amazing. So putting all that aside, there's a big question, you know, Waymo's impact on Uber and Lyft, Tesla having the Robo taxi event, I think in October or November, they pushed it back two months. My theory has always been,

Starting point is 00:29:09 there's going to be five players to pick a number that I think figure all this out at the same time. And by same time, I mean within an 18 month window. In other words, they all get there in the same window to exploit the opportunity. Right. If you if you get there three, four years after Waymo, maybe you're going to be too far behind. But if you get there in the same 18 months of Waymo, I think you're good. And Waymo is there. Right? And Waymo has been there for maybe a year. of like really good solid, no crashes. Thank God, nobody's died. No major, you know, except for the hippies in San Francisco being like, it blocked, you know, an emergency vehicle. Then you look and it's like, it didn't block the emergency vehicle. Anyway, I see you like, I think. No, no, I agree with you on the hippies.

Starting point is 00:29:58 I agree with you on the hippies. I grew up in Oregon. I am familiar with the hippies. You could smell them coming. Oh, my Lord, podcasts, audiobooks, virtual meetings. Endless videos. We're producing and consuming more voice data than we ever have. And if your startup is building a product that uses voice data, you need to check out Assembly AI. Assembly AI builds speech-to-text AI models that can turn your voice data into new product

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Starting point is 00:31:09 and join over 200,000 developers who are building amazing apps with voice data. Go to assemblyaI.com slash twist headday. But this is just one of the places where I have no patience. I honestly try to love pretty much everybody, but people who are opposed to nuclear power and people who are opposed to self-driving are my mortal enemies, along with the Dutch.

Starting point is 00:31:29 These are the three categories I can't take. And so I just, it makes me so mad. You can say it. They're the R word. Reductionists. I was like, well, Jason, that's an interesting place. We're going to move on now from that comment. Reductionists, we'll take it.

Starting point is 00:31:45 I saw like some people are trying to bring the R word back. Ignore my friend here. Just ignore. You don't need to. You don't need to bring the R word back. Reductionists, yes. They are slow-downers, if you will. Yes, they're decalers.

Starting point is 00:31:55 De-sals. You know, and so I believe this Weirai, which is an obvious Waymo knockoff. It looks exactly like the waymo. It's got the same exact design. This is proof positive, I think, that this technology is going to be a commodity. at a very, very fast freight. Yes. And I was driving my Tesla in Austin.

Starting point is 00:32:14 I shipped it to Austin. And I was doing some 30 to 45 minute ride. So I said, okay, you know, let me just see if I can get the whole way there. Yeah. The pickup and the drop off is super challenged when you're not in a contained space like San Francisco or city because driveways, parking lots. Like, these things are hard to navigate, you know. And people have gates at their houses or you're getting to the airport.

Starting point is 00:32:38 it's super complicated. So I think self-driving's got a lot of work to do. I won't call it the last mile. I'll call it the last 100 yards. Yeah. The 100-yard problem is real. Putting that aside, I would say one intervention, and I'm on the 12-3 software, so I got to get 12-4 and 5. I don't know why I'm not upgraded yet. But I think, you know, and watching the things online, it seems like you're going to have one or two interventions every hour or something, which means they're getting very close. Yeah. So then it becomes a deployment problem. And then if five people do get, there, already Uber did a deal for 100,000 BID electric vehicles with self-drive. 100,000 of them, like already.

Starting point is 00:33:17 And now BYD might have big tariffs coming into the U.S., but around the world globally, they don't have that. So, you know, you can have BYD, Waymo, Waymo already has to deal with Uber. I don't know if Cruz is going to get back into it. You have this company that we just found out about. That's a knockoff company. And there could be maybe seven to ten people who get there. And then whoever wants to win is either going to have to build an at-scale competitor to Uber and Lyft and DoorDash or sell to DoorDash Uber and Lyft.

Starting point is 00:33:44 I think half of them are going to do the latter, which means the real impact we're going to see, Alex, is going to be the number of rides in ride-charing, autonomous and regular, is going to boom. And the idea of owning a car is going to become kind of silly. Yes. Like, and right now, I think the total number of rides in the United States, I'd say the ones that are done by Uber or Lyft versus private citizens, you know, or other means in cars, it's probably one or two percent. Yeah, I was going to say one to a hundred, you know, but I mean, once you have self-driving, even if it just doubles it, that takes us to two out of 100. So there's going to be a couple of fun tipping points. One is, when is the majority of Uber's domestic rides done autonomously versus with the human driver? and then when is self-driving the majority of all rides in the U.S.

Starting point is 00:34:35 That's going to be much longer. But both of the things I'm very excited about. You nailed it, though. The point about these companies are, is when can they build up a fleet that uses their technology to really try to capture a bunch of the market before someone else does? So, We Ride is not a great company financially. They actually had less revenues last year than in the year before, and in the first half of this year, they shrank again.

Starting point is 00:34:58 So why is everyone piling it in to give? give them, you know, $5, 600 million in this IPO. I think it's because they want to build out their massive robotaxy fleet. I think this IPO is literally a fundraise to put the cars on the road because their tech goes from L2, level two, self-driving two, level four, which in theory actually gets beyond even occasional human intervention. Now, that's what their prospectus says. I'm not endorsing that, but that's the claim.

Starting point is 00:35:23 So you take an L4 level company that has self-driving revenues, but, sorry, autonomous Robotaxi revenues that are minimal, put a pile of capital behind it. To me, it smells like a buildout. And that's why I think they're going to try to win. But as we've discussed, the Chinese market is relatively self-contained. So, you know, Waymo in the U.S., Tesla in the U.S., brews in the U.S. Jason, I'm so excited. It's going to be so much fun. And, you know, right now, the number of people dying in car accidents, 30, $40,000 a year has stayed static. So you wonder, why is that staying static when people are drinking and driving less. Turns out, still a ton of people drinking driving. There's also distracted driving.

Starting point is 00:36:04 And so distracted driving, I think, is keeping our death toll high while drinking and driving might have gone down a bit because people who are drunk are like, you know what, unless I'm Justin Timberlake and I'm really smashed in the Hamptons, I'm going to call an Uber. You know, Justin Timberlake's suffering. I don't think he can afford an Uber at this point. He would much rather get pulled over by the cops and get arrested and loses license and cause a massive PR thing, then God forbid, one of his friends pulls him aside and says, hey, dummy. Right. No need to kill anybody in your car.

Starting point is 00:36:36 There's this new Uber thing and Lyft. You could just press a button. Yep. Or you're Justin Frickin Timberlake. Anybody at the club will drive you home in your own car. And then they'll take an Uber and you take a selfie with him. Wake up, dude. Wake up, dude.

Starting point is 00:36:49 Well, I mean, the other side of that is once you reach a level of fame and success and wealth, pick a category or power, you do begin to think that you are in fact different. different rules apply. And I think keeping your head is the hardest part of that. And Justin Timberlick's been a name for what feels like my entire life. Well, he screwed up. He did give us a good meme, though, with the, this is going to ruin the tour, what tour, the world tour? I've seen that repeated on the internet. I really enjoyed that. Just put some numbers on it. Federal Highway Administration says Americans take over a billion trips a day in a car's, 400 billion trips annually. And Uber reported it's $7.6 billion trips.

Starting point is 00:37:28 This is 2022 data, so it's much higher. But anyway, about 2 billion rides in the U.S. a couple years ago. So maybe they're at 3 or 4 billion rides in the U.S., which is exactly 1%. You nailed it, Alex. Well, you and I are both very close. It's funny to me because I bet you for some people, it's 0-0-0-0-0. And for some people, it's 85%. So there's a class of folks out there who don't like driving, like myself, who will take an Uber when it's

Starting point is 00:37:52 raining because I'm not going to walk or my wife's gone or whatever. And I bet, you know, for me, I will go more places. So this is not just a replacement. It's also, it's going to boost the total TAM for Uber. So I guess if Uber nails the self-driving use case, this feels like a 2014 conversation. If Uber nails the self-driving use case, man, their market's huge. Just astoundingly large. 2007, I think, is when that DARPA, you know, self-driving contest was kind of going on and everybody was sort of laughing about the cars driving off the side of the road. where you're 15 years later, and I just took a ride from like the lake in Austin, Lake Travis,

Starting point is 00:38:28 to the airport with one intervention. And now the pickup and the drop off would not have worked in either of these cases. So the last 100 yards have to be solved, which I think is going to be brute force like, okay, this is how this airport works. Exactly what Uber wound up doing. They had to like define each airport manually, send somebody there, take pictures of things, explaining to you where you go kind of thing. On highways, I wish people were forced to use level two.

Starting point is 00:38:52 on all highways. I think level two, which is the car takes over two functions for you, should be required on highways, which is lane assist. It keeps you in your lane. And then adaptive cruise control, which means it doesn't let you plow into the first and in front of you. Those two things,

Starting point is 00:39:07 I don't know why those aren't by default turned on in all cars. So, Jason, do you ever drive a manual transmission? Sure. I learned to drive on Oregon logging roads. My dad's F-250. you know, great car to learn to drive on because it had enough torque that you really couldn't kill it. And so you could really learn to shift on it. It was great. My dad will probably never stop driving stick.

Starting point is 00:39:31 And so when I think about L2 and how just obvious it is for you and I that everyone should have this, I think we just got to keep in mind that that car culture is so core to the identity of so many folks, and they're just not going to let go of it. Like, it doesn't matter to me. I don't derive any of myself worth from it, but I'm just one person. So I'm sympathetic to the other side. of that, but you're correct. But I'm going to move us along, talk about two of your favorite things, Generation Bet and also the world of AI, because Polymarket and perplexity are teaming up.

Starting point is 00:40:03 And did you know, Mr. Galganis, that Polymarket is built on Ethereum? I did not know that. So people are placing real money bets on this prediction market. On, you know, is Biden going to drop out or is JD VATs going to get replaced or who's going to be the? the VP pick, all these kind of real world events. Politics comes to mine now, but other things can come up like sports and stock markets and all

Starting point is 00:40:28 kinds of other profits. But they use Ethereum as the ledger, is what you're saying? So this was news to me. I was prepping some notes on perplexity, the AI search engine, Polymarket, the prediction market. They have a partnership. So I was just digging in. And I saw that they're based on Ethereum. So I went to Dune, which is the blockchain analytic service that we all know and used.

Starting point is 00:40:47 And I pulled a graph of how much people are using Polymarket over. time and then also the total transaction volume that's flowing through it. This is the Polymarket daily volume chart. But Jason, isn't it cool to see a startup that's raised a bunch of money and have public data of how it's doing? This is the coolest thing because now I can see the inside information. And as you can tell, doing quite well lately, total volume has absolutely gone through the roof.

Starting point is 00:41:13 And if you look at daily active traders, it's also showing quite a lot of just very strong performance. Amazing. I love it. Yeah. It's not quite a hockey state. but it's getting close. I think this is really interesting.

Starting point is 00:41:26 I love the idea of people placing bets. They'll get things wrong. You know, people thought Shapiro was going to be the VP candidate, not walls. Yes. So why? Well, it turns out, like,

Starting point is 00:41:40 it's a very personal pick that an individual made, it's like somebody picking what dessert they want to have. Like, this could be the best dessert at the restaurant, but the person might have a preference for, you know, Tiramisu over the sorbet. Exactly. You know, everybody could say like, hey, this sorbet, they're known for it. It's world class.

Starting point is 00:41:59 They buy their tiramisu from the bakery down the street. It's mid. Doesn't matter. Kamala Harris wants to have the tiramisu. She's going to have it. So that was a perfect learning moment for the markets, which is, even though this person is the consensus, this is a choice that is not based on the consensus or what makes the most sense necessarily.

Starting point is 00:42:20 what makes the most sense for an individual. And so that's good to learn. And this is the Generation Bet concept, which I'll debut here for the first time. You helped me. I gave a talk at KPMG last week and was in Park City. They asked me to do it. I don't do a lot of these folks.

Starting point is 00:42:36 I get paid a ton of money to do them, but I only do them for friends like once or twice a year. But I asked Alex to help me out on it. Thank you for the help. And one of the themes that we've been working on here on the show, static team size, where teams stay the same. size. We talked about that a whole bunch. We're trying to codify them. One of the ones I want to

Starting point is 00:42:55 codify here is generation, like Generation X or Generation Y, Generation Bet. What is Gen Bet? It's the people who grew up on Robin Hood buying crypto, NFTs, and prediction markets, end price picks, you know, and what's the other one that's... Sports betting. Draft Kings and Sports betting and all this. This group of individuals, and I was interacting with some people in the audience, this is like serious people, 200 really senior executive, like CEO, VC, leaders of public company and so comes to stuff. And I said, listen, how many of you have a child who is wagering a bunch? They're in their 20s or 30s, and you're a little bit concerned about their stock trading, options trading, NFT trading, crypto trading, sports betting, or prediction markets. Man, a lot of people in

Starting point is 00:43:39 the room came up. So I did like a little, I did a little audience work. And I was talking to this one woman. And I said, well, why are you concerned? And she said, well, you know, it's like he's really into it. And I said, is he up or? down. He said, well, so he was down, but now he's way up. And I said, okay, what you've experienced with your 27-year-old or something is this individual is now a financial, like, it's almost like they went to World War II and they came back as vets. This is a financial vetting. Like, they have scar tissue. They have trauma. They have PTSD. They bet on the jets or the nets or some horrible sports franchise. They bought, you know, NFTs that went to zero. This is what makes

Starting point is 00:44:22 a great investor later in life. The people who become great poker players are the ones who examine their play and have made stupid plays and are grinding their teeth at night, staring at the ceiling saying, why did I shove it all in with my set when there were four hearts on the board? I overvalued my set. It's obviously in a four-handed hand or three-handed hand, somebody had to have a heart. Yeah, somebody's got that flush. You bet. into a textured board because you got, you know, too attached to your set of sevens, like, dummy, that's generation bet. And this group, when they become 50 years old in 20 years, Marron, they're going to be able to place bets and wagers and investments. And I don't know

Starting point is 00:45:01 what percentage of the population it is who does, let's say, three or more of these things, like they do crypto stocks and prediction markets. They do prediction markets, stocks, and sports. somebody who does, I would say, three of the four that we've outlined here, you will have a brain design place bets. You'll be, in other words, it should be a venture capitals or entrepreneur. Yes. And I'm just going to throw in a comma because some folks don't learn and they don't turn it into a skill. And they end up not a, well, broke. And then also like, gambling addiction is not a joke.

Starting point is 00:45:39 That said, in the same way that I, even I, a skill. a recovering alcoholic, don't want to ban everyone else from drinking. I think we can discuss the harms and the benefits in the same sentence without being contradictory. So I agree with you at the same time, if you do find yourself sports betting away your entire paycheck, help get some friends, go to a meeting, take care of yourself. But I do think, though, that the financialization of everything is changing culture. And it's also, I think, changing or it's being changed by people who are younger at the lower

Starting point is 00:46:09 socioeconomic strata who don't see a way to, traditionally grind their way up and are looking for a way to short circuit things. A quick thing. Well, I mean, I don't want to be dismissive of it because, you know, if you're a 10, but yeah. Yeah. If you're a trader and you get a 10 bagger, you know, are we saying that's a quick fix to your career?

Starting point is 00:46:26 Nah. But I think people just look at the prices of houses that have gone up, what, 50% in the last like five years, whatever it is. Yeah. And they're like, well, my paycheck's going to buy 4%. I'm getting owned by inflation. There's no way I'm going to grind my student loans out and then grind up a deposit, then grind out a house.

Starting point is 00:46:41 So I'm going to go buy a, what NFTs are cool these days? Do we still like punks? Punks? I think they're all going to zeros. Oh, well, fine. I'm going to bet on Tim Walls being the next, you know, Democratic VP candidate or whatever it is.

Starting point is 00:46:55 And I'm going to, you know, lay it out there and hopefully get a way forward. People used to make fun of people who are poor betting on the lottery. But if you go back to Colin Powell's autobiography and his parents' discussion of their, I think lottery went there to let him buy a house. Yeah. It was a way to essentially have an option on a different future that was very, very different from their trajectory. And I, I hear it. I get it. It makes sense to me. I do it. Well, and also this kind of thinking leads people, and you're right, listen, some people are going

Starting point is 00:47:24 to get addicted, they're going to do stupid things, and there's the risk of ruin. And, you know, if you do it with the wrong individuals, you could wind up, you know, with your legs broken. Yes. Not good, right? And so people can take it too far. But, you know, I think this type of financial literacy is leading people to discover really interesting things. And I think there is another, and I don't know if we've given in a name yet, but I think opting out of capitalism, opt out, capitalism opt out. I need to come up with a name for this, but it's basically individuals opting out of capitalism or hijacking or hacking capitalism. Hacking capitalism. Hacking capitalism. Hacking. Cap. Yeah. So hack capping is like looking at capitalism,

Starting point is 00:48:08 looking at this ecosystem and saying, well, you know, how do I break out of the matrix? And one of the most interesting one is called fire. It's an acronym. It stands for financial independence, retire early. It's a movement defined by people, as you can see here on Investopedia, a really good side for technical definitions of financial terms. Yeah, they do a good job. Essentially, what you want to do is save up some multiple of the money you have, and the fire number is 25 times annual expenses. So let's say you're living off of 10k a month. Let's say it's 100,000 a year, 8K a month, something like that. 8K a month, 100,000 a year. 25 times that annual expense, you know, is 2.5 million. Now you can retire comfortably off that if you withdraw three to four percent during that time. So let's just take a million dollars as a number. A million dollars as a number. If you took 4% of your principal out every year and you made 7% in the market, it'd still be

Starting point is 00:49:02 topping off like 3% in the average year, but you'd be taking out 4. So your million goes down, by 40K, but it goes up 30K, or in a good year it might go up 10%. Bad year, you might make nothing in the market, so it just goes down that 4%. You go from a million to 960. But you will then taper off after some number of years with, you know, a little bit of money maybe to give to your kids or to donate to charity, but essentially get to a certain number. It's a million to two million for most people living not in a major city with private school. and this kind of like financial literacy is to me indicative of gen bet and hacking capitalism.

Starting point is 00:49:45 Yeah, yeah. I'm a big fan of the fire community. There's also lean fire. If people want to do a lower number, there's fat fire. If people like to have a larger total asset base. Yeah, I'm team fat fire. Oh, dude, me too. I'm team fat fired because it turns out that I spent $6 on a croissant this morning.

Starting point is 00:50:01 How was it? Chocolate or just regular? No, it's plain. But you squeezed in the butter. came out. My daughter kept coming up up from the slide at the park we were at and like stealing my, honey, this is my breakfast. You can't. She's like, Ma, Ma, Ma. So you got to, yeah, you're going to have to learn

Starting point is 00:50:15 that you got to double down. And, you know, these kids will just keep you got, they'll eat it later. For two croissants? I mean, dude, I'm going to go broke. That is nuts. It's so good, though. Let it sink in, though. Six dollars for a croissant. I mean, croissant is like what's peasant food. I mean, I know it's a stick of butter, but, I mean, it should cost a lot. used to be food for prisoners. And now, do you know what I pay for a lobster roll for my wife?

Starting point is 00:50:37 Like $30. I was about to say in New England, $30 in New York or L.A., 40 or 50. No. Yeah, I went to New England lobster company in San Mateo, and it used to be like, I remember when it was like in high 20s, then it was in the 30s. I went the last time, it was like $42 or something. And I was like, whoa. So $40 for Seabug slathered in cow fat wrapped in a,

Starting point is 00:51:02 mid-roll. Like, I mean, it's just not. Makes no sense. We've lost the script. Oh, right. But you're right. There's lean fire, fat-fire. And then there's also half-fire.

Starting point is 00:51:13 So I think, like, really interesting one is you could have a sub-stack. Let's say your substack makes 50K a year. And you have a million. Okay, we have the 50K coming in. You pay some tax. So you got 35K. Plus, you got 4% off the million. That's 40.

Starting point is 00:51:30 Now you have 75K. So people are, and then, like, your brain kind of active. So you're working two hours a day, three hours a day on your substack, three hours on your substack, you make some little bit of money. And so I encourage people to start thinking about this because I think if capitalism is cutthroat the way it is, and employees are dispensable and employees are not loyal, then you have to protect yourself. And I think GenBet plus hacking capitalism and this fire movement and some of these other things living off-grid, being a homesteader, you know, and having your own chickens and eggs and

Starting point is 00:52:05 removing expenses. Like, I think this is a natural reaction to capitalism moving into its next phase, which I think is going to be a level of efficiency in capitalism that's going to be disturbing to experience for people who participate in it on all sides. Where we're seeing this in a lot of places, there was the idea of lying flat in China. There's also the use of the phrase garbage time from the NBA has been used in China to describe the garbage years. People who are just thinking there's not a upside to grinding for 20 years. Like they won't be able to make a better, you know, space for their children to do better than they did. And I think a lot of the things we're describing are actually pretty anti-birth rate now that I think about it.

Starting point is 00:52:48 Because if you're trying to structure your life to not need more, you're not having children. And, you know, you were talking about, you know, part-time fire. and I was like, oh, I could have done that now if I didn't have a second child. Yeah. So you should be really glad that I'm having too because my second child is brought us together. Absolutely. You need this job. I do need this job because that's an extra three more years of nanny and that's like 12 more years of private school.

Starting point is 00:53:14 Oh. Yeah. It's something to consider. I'm bringing us back. So this start off with Polymarketing and Perplexity teamed up. Just quickly wrapping this up. Polymarker has raised $74 million. dollars. Perplexity is raised 165 million. It's a billion dollar company. And the things that I wanted

Starting point is 00:53:29 to throw out there for people who are tracking the AI startups and I guess the GenBeth startups, I think we'll just call them that, is the amount of deals they're doing. So in the last couple months, just this year, Arc and Perplexity, January, SK Telecom and Perplexity, February. Perplexity and it's worked with nonprofits, June. Perplexity and publisher deals, July, Uber and Perplexity, August. And then also this year, Polymarket Plus Substack, Polymarket Plus Moonpay. And then most recently, polymarket plus perplexity. These companies are wheeling and dealing for distribution.

Starting point is 00:54:00 And I think just generally build mine share. I think it's brilliant. I don't know if they're going to become the next $10 billion companies, but I do like the pace of which they're shipping and the pace of which they're signing contact with other companies. I think just smart. Yeah, I think perplexity has got a serious problem.

Starting point is 00:54:16 I think, I don't know if you saw, but chat cheap ET, Open AI, Open AI has a perplexity. killer they're playing with and they're going to have their own search engine. And I know that's a big part of Sam Altman's plan historically because he was really enamored by what I did with Mahalo. He always talked to me about it. Like he was really into search engines. Like anybody in,

Starting point is 00:54:38 because if you think about the total amount of search revenue, like a point of search revenue is probably worth $10 billion right now in market cap, right? Oh, more. Yeah. Yeah. So if you take Google's total market cap and they have 90% search share, 90% of their market cap equals 90% of search. Maybe you take out a couple of points for YouTube and other things, but essentially 80% of their market cap is 80 is 90% of the value of search. So you just add 10% onto that. And you get kind of what search market cap is worth. So 1.6 trillion divided by my, stupid microphone's in the way of my keyboard. Because I don't usually need it for this. I'm just going to a wall from all for this. But your point, you know what? Your point stands. It's an

Starting point is 00:55:20 incredibly valuable thing. Forplexity got some early buzz. My, my question is, my question, is can they're built on top of chat gpte and i saw the ceo was like uh this is like that whole chat gpti wrapper issue that they people were criticizing yeah like if you don't own the l lm and the llm decides that your business is cool and they're going to do it which you know if you haven't been paying attention sam oman's a bit savvy you know like pretty strategic guy perhaps uh some people might say cut the throat. Some people might say. Some people are even saying, yes, who? I don't know. Well, no, I mean, Ari Emanuel said like, everybody, everybody says that. Something like even worse, like, does she shangali or something like, really? You're trustworthy

Starting point is 00:56:07 kind of comments. But, you know, it's, I think that they got a serious problem because I don't think their search is like that much better than using chat chad chpd and then chat chad d is going to have a search interface. So, man, the difference between asking a question, which how the default behavior of chat chp t works right now and just typing a keyword right now if you go to chat chpt i have it open right now and i were to open a window um and i just typed in the word um uh Tokyo Tokyo it now says like Tokyo the capital of japan and it some key highlights about Tokyo include and it's just giving me like i didn't say a query right and when you used to type things in, it used to be like, what would you like to know about Tokyo?

Starting point is 00:56:54 So already in 4.0, it's assuming I wanted this information, culture, landmarks, etc., you know. Give me a search result for Tokyo vacation. See what it does. I wonder if it would like give me like a bunch of links, but, you know, I think they're going to start, you know, giving you like an actual search result, which would be a comprehensive. search result, which is what Naver would do. There was a search engine in Korea called Navor.

Starting point is 00:57:28 There's only three markets where, and this was part of my inspiration for Mahalo back in the day. So if I were to type in Tokyo vacation in Naver, Navor did something called Comprehensive Search, which was, not only would they give you the blue links, but they would then have a video section, which you can see here.

Starting point is 00:57:44 They would have a hotel section. And they called this, I called a comprehensive search when I met with them, because he said, well, we want to give you results that give you everything. And I said, so it's like comprehensive. We said, yeah. So I called the comprehensive search when I raised money from Sequoia and everything to do Mahalo. And my idea was to do this manually. So take the search results out there and use Wikipedia-style software to do it manually. And, you know, we got a little bit of the way there. We got the $10 million in revenue and search revenue. And then Google just cut off

Starting point is 00:58:11 our search traffic. So they wouldn't send any referers. We lost 90% of our traffic in the panda. They did this deliberately. There were a bunch of companies that were like ehow how to.com. There's a bunch of people who were starting to do really good. Demand Media was the company that kind of taunted Google and I got really pissed off at the founder of that company because he was like, we figured out how to game the Google algorithm and Google was like, what? Excuse me? And they just

Starting point is 00:58:38 and he became public company and then Google was like literally six months later they did the Panda Update and cut 80% of the traffic to all these sites. And it was just brutal for everybody. But I think Perplex release toast. Yeah, but if you know to rob any bank in the world, the last thing you do is get on Twitter or X and say,

Starting point is 00:58:55 I know how to rob every bank in the world. You shut up. You don't, you don't. Come on, it's game one or one. No, come on, people. No. It's literally the scene from Goodfellas where they do the heist,

Starting point is 00:59:05 and then one guy shows up with his wife in a fur coat, another guy shows up in a new Cadillac, and he's like, I told you guys not to buy anything. And then they all wake up in the trash compactor. Exactly. I want to go back to the

Starting point is 00:59:16 Will Perplexity, get open A. with search GPT thing. Because we just posted a couple interviews on the Twist Channel, one from Antonio Ogrosius, Valor Equity Partners, one from Gavin Baker from Atretees management. At trades, yeah. Yeah, I was there for this. I've loved him. Had been waiting for those to go up because they had two nuggets that I wanted to really

Starting point is 00:59:40 talk about. And they were about the value of AI models that don't have underlying proprietary data. Gavin said they're the fastest depreciating asset in human history. and Antonio said, and I'm speaking about him describing his firm, not anyone else in any capacity, but he said his firm thinks that if you don't have proprietary data, you're a zero. Yeah. And that applies to Open AI as well, right? Because they're doing licensing deals, yeah, they don't have proprietary.

Starting point is 01:00:10 Right. So I wonder then if the entire like investment into Open AI is going to yield a search company at the end. almost more than an AI model company. Well, you know, if you, depends on if you believe what they say. Like, the idea was be that they're going to cap their returns and they just want to get to general AI and then give it to the world is kind of the idea.

Starting point is 01:00:33 So, but I don't believe that. I think it's going to become a commercial, I think it's a commercial endeavor always has been, always will be. So as a commercial endeavor, I do think providing an API is one revenue source. Providing a consumer product is another one. search could be part of that consumer product.

Starting point is 01:00:50 Sure. That will either monetize through advertising or the, um, uh, the ability to pay for it. I do think open source wins and I do think the large data sources win. And I think that's where like Reddit is a good pivot here. Reddit had, um, a heck of a quarter. I know their stock was down. But, um, I have seen a bunch of people talking about Reddit having surging traffic, which I thought was like, uh, fascinating.

Starting point is 01:01:15 And I think they're having a hard time. I think they're having a very hard time monetizing. They're advertising because the amount of traffic has gone up so much. I also think they have a peculiar, cynical, sophisticated user base that doesn't click on ads as much. They do not. Yes, that's correct. As opposed to like a Google search group, which, you know, or Facebook where you might have like the more dopey users who don't know what's an ad and what's not. Whereas like, yeah, Reddit users are going to be the first ones to put ad blockers on to be cynical about stuff.

Starting point is 01:01:47 but their market cap still cruising around $8, $9 billion. Which I think that's fair. Yeah, if they have a billion in revenue nine times, revenue is pretty good. That's kind of where we are. Is that right? So tell us about the traffic, too. Yeah, so there was an ad week story that was discussing essentially, you know, what's going on with Reddit, two data points.

Starting point is 01:02:07 One, publishers are talking about an influx in traffic from Reddit. And the context here, Jason, is that the Reddit CEO, Steve Hoffman, has said that it's a real pain in the and backside to keep people who don't pay Reddit for access to its data from scraping it as much as they can. And Google has a deal with Reddit, so it's not a huge shock to see quite a lot of Google traffic and Reddit traffic intermingling and so forth. But Reddit is getting very large because users learned over the last couple of years to type in a Google search and then append Reddit to it. Yes. Then we take you to a human written result as opposed to an SEO slop bucket and today an AI generated SEO slop bucket or eight sponsored links.

Starting point is 01:02:51 So I'm not shocked to see this from Reddit. I think the company is insanely valuable, but unlocking that value is going to be very tough. I wonder if really you subsidize the users for using it by just letting them play and then you just make money off of AI deals in the back end. But everyone wants Reddit and most of them don't want to pay it right now, which I think is poor form from companies that have, last time I checked. effectively unlimited money. If you have any Reddit content in your LLM,

Starting point is 01:03:19 you know, and you're commercializing it, yeah, yeah, I think you need to pay. I mean, if you had like a couple of, you know,

Starting point is 01:03:27 the hack around this is if a user had an LLM on their desktop, and they do a search, and their computer then loads 10 Reddit pages and gives them an answer. That's totally illegal,

Starting point is 01:03:38 by the one. What you do on your desktop, you're a business. So I do think the way, the way they're going to try to defend this is, Hey, we didn't scrape Reddit, but this user initiated a search where they said, tell me the 10 blessed places to go in Tokyo, and maybe you can point me to do some Reddit conversations, and then it goes and searches the web, scrap those pages.

Starting point is 01:03:59 Now, if they do it on their server, that's one thing. If they do it on the desktop of the user, that's another. So it's going to get very granular here. But I do think Reddit is an incredible asset, and I've been thinking about putting a J-trade on for it, because I do think it could get bought for maybe three times what it's worth right now. Oh, yeah. There's no way you could pick it up for 15, right? Reddit would never sell because I think they know what they're sitting on. And in that same ad week story that we were talking about a second ago, according to data from SCM Rush, which we've all heard of over the years,

Starting point is 01:04:26 between August 23 and April 24, readership on Reddit effectively tripled going from 132 million visitors to 346 million monthly visitors. Now, that is, Jason, for the world of online, a hell of a lot of people. 120 millions a lot, 132 million's more. 346 is a bonkers number of total people. So I think that it just shows that the Reddit Google partnership

Starting point is 01:04:54 is going to be very lucrative on both sides. And frankly, now that I'm just talking out loud with you, why the hell wouldn't Google buy Reddit? Oh, maybe they can't, you know, Lena Con. But like, yeah, I mean,

Starting point is 01:05:06 but when the next administration, it seems like Reid Hoffman told the world like and told Kamala listen Lena Khan got to go and then everybody on the right is like

Starting point is 01:05:20 Lena Khan got to go there's not that many Lena Khan supporters J.D. Vance is like the only one that I can think of that's a super hyper weird bedfellows yeah he he I do understand like the monopolistic like we talked about this like

Starting point is 01:05:34 there should be a three tiered structure over a trillion dollar company you can't buy nothing or it's very very restricted uh you can't something like if it had very small market share. You know, mid-tier, you get some scrutiny and maybe some rules. And then under 250, I'm for free-for-all.

Starting point is 01:05:52 Woo, yeah. I agree with that. Like, literally like, what do they call it when you play Fortnite? Battle Royale. Battle Royale, yes. Battle Royale under $250 billion. So, like, if, you know, Uber's at 140 and Airbnb's at $100 billion, they can F around. Free for all, Battle Royale, they want to merge.

Starting point is 01:06:12 They want to buy DoorDash, lift, this, that, the other thing, go for it. Have fun, mausletop. If Reddit and Uber want to combine forces, who cares? That would be a hell of the time. Who cares? Reddit and Instacart. I don't care. Lift an Instacart.

Starting point is 01:06:25 Let them go sync their ships together. Quantum computing. Let's just throw us in real beer. Yeah, blue apron and Reddit. Whatever. It does it, it does not matter. Right. It's not material.

Starting point is 01:06:35 So, Battle Royal. And then everybody, because who knows? What if, like, a Reddit and a DoorDash? What if Uber, Reddit, and Airbnb and DoorDash became one company? Now you got like all these hundreds of millions of users. You've got all this on-demand activity. And the combined companies worth $200 billion, $250 billion. Okay, now they have to stop buying stuff.

Starting point is 01:06:58 Now they get a little scrutiny. But now I've got this juggernaut with a common user base. It's like, whoa, you know, could be interesting. Yeah. Yeah. I mean, you would have some interesting synergies with the integration of Uber Eats and Doors. or dash. That would actually be pretty fascinating from a, from a, I mean, Lyft could never get into deliveries at that point. That'd be brutal. Yeah. Sorry. Whenever we do corporate combination bingo,

Starting point is 01:07:22 it's always a very fun experiment because you start to imagine these really weird companies that you could, if you want to do, in fact, built. All right. I want to, for everyone out there who's like, Jason Alex, stop talking about other things and talk about venture capital. I have some data for us. I want to talk briefly, Jason, about Europe. We were all watching the other. Olympics. Everyone's seen beautiful, beautiful Paris. Europe's much larger than just the city of lights. And there was a fundraise that really caught my eye. So how much interaction have you had with Balderton, the venture capital firm over the years? Zero. Zero. Okay. They just put together $1.3 billion for two funds. $615 early stage, 685 growth. Sift.com. EU said it was

Starting point is 01:08:04 quote, the largest ever combined early stage and growth fund raise dedicated to European startups. And I just kind of want to get, what's your gut reaction to hearing that? Does it matter? Does it not matter? It's big number, small number? Listen, a billion dollars is a big number. And the European consumers have money. They're well healed. These are, you know, the challenge, of course, is if these are European companies going after a European market, is it's a fragmented, you know, market. And so it's like South America in that, you know, you got 100 million German speakers, you got 50 million people in Paris and Paris speakers, you got 5 million in Norway, 20 million in Sweden, five million in Ireland. I mean, these are very disparate, disparate, interesting, different cultures.

Starting point is 01:08:49 So, can you make, you know, Uber or Airbnb work across all of them? You can, but it's certainly not as efficient as making Uber work for 350 million Americans, you know, or a billion people in India or China. So there are challenges to that space. Obviously, we've talked about regulation is the other big challenge. So it's really hard to get a big outcome in Europe. And Europe is stopping a lot of the big outcomes. So I think there's probably less competition for venture there, which means you know, having an Andreessen Horowitz of that area, somebody with a billion dollars or two billion dollars to go do some big deals. Yeah. Could be a good bet because I think a lot of people are dismissive of that market because of the restrictions and the fact that it's not a monoculture.

Starting point is 01:09:36 It's many different cultures. Right. But that is like essentially the conventional wisdom is that there's too much regulation, it's too fragmented, et cetera, the things you just said. And I think all those are valid. That's why when I saw the Baldurton number, I'm like, huh? That's not what I heard. So I pulled some data for us, Jason.

Starting point is 01:09:53 This is showing total venture capital disbursed, invested in Europe over time. clearly 2001, 2021, 2022, just bonkers ears, cut them out. If you look at the pace of this year, this is through Q2, we're actually going to surpass 2020 in Europe this year.

Starting point is 01:10:14 That is more bullish than I anticipated. And it's not going to be quite as big as as 2023 by current norms, but we are seeing a lot of money still flown to European companies. And the thing that I can kind of point to is, one, France and AI is doing thing, but like Spotify is worth 60, 70 billion.

Starting point is 01:10:32 Clan is going to go public soon. Yeah. I think that there is juice in those legs. I think there's more than we give them credit for sitting in the United States. And I wonder what we're getting wrong because the conventional wisdom versus the data, to me, there's a dissonance there. And I don't know what part of our analysis is, is not nailing it. It's a very weird market because if you look at the unicorns, uh, they were centralized

Starting point is 01:10:59 in the Nordics. Very strange, right? Like, why is that? I've heard a lot of different theories of why in Europe they're clustered in Sweden, you know, Denmark, etc. I don't have an exact answer for that. What people have told me is that people are the education system, the focus level, the design skills, like product design skills are very high there,

Starting point is 01:11:25 and people are very industrious. and it's cold and dark and people work more and they stay in offices longer. Now, I know this sounds crazy, but if you've been to Spain or Italy, pretty great place to be outside and go have a drink and get some food and hit the beach, you've been to Norway and Sweden, freaking cold.

Starting point is 01:11:46 Yeah. And you want to go in and get some suit. So I do think climate as crazy as that sounds and lifestyle is a driver. Now, you know, when you look and you talk about San Francisco versus New York and Miami specifically, one of the thing I've heard from venture capitalists in my career, and remember I started in New York as a Silicon Valley reporter covering a trade, I started a trade publication specifically about that market. Yeah.

Starting point is 01:12:15 Was New York just too much damn fun? And, you know, there's a reason to leave the office at six or seven o'clock because you could go to a really great restaurant and go to a club after and then show up for work at 10 o'clock, as opposed to working from 9 until 11 p.m. In San Francisco in the Bay Area, as you know, if you're in Palo Alto and you try to get food at 10 o'clock, you're going, I mean, in an out burger closes at 10 o'clock. Like the fast food restaurants are closed by 11 o'clock. By 9. I mean, Palo Alto rolls up the sidewalks at 7.30 p.m.

Starting point is 01:12:48 You're done. Sunnyvale, downtown Sunnyvale is like nine buildings on one street. Yes. I've spent a lot of time there. There's nothing going on. It is work or sit on your couch. Basically. Right.

Starting point is 01:13:01 You can just either you're going to go do fentanyl on Turk or you're going to work at Google. To one or the other. Very similar life trajectories in terms of intellectual output. Yes. I do want to. Sorry, I couldn't resist. But anyway, I do think that I do think that's part of it in Europe is, you know, if you are trying to get, and this is one of the themes that you and I have been working on related to this sort of hacking capitalism is like, who actually. she wants to work hard. Who values lifestyle? Who lives to work and who works to live? I can tell you the

Starting point is 01:13:30 assistance that we have in Manila, in a, you know, from Athena, go to Athenawow.com, get a month off or something like that. You know, you go to work with those folks. Yeah. They are like, Nikki and rage on our team are like, I need more work. Can I do more work? Thank you, sir. Yes, sir. I mean, it's like literally being in the 1950s, like, in terms of like as an employer where people are like, thrilled to have the job. Now you juxtapose that with Canadians, U.S. workers, European workers, people in Europe are like, I need eight weeks off. I need six weeks off. Like I'm, I'm not, and I don't want to check my email after five o'clock. Like there's a law in Europe. And I don't know which countries are actually doing this if it never got passed in the EU. But there were

Starting point is 01:14:14 passing laws. And I believe France is the first country to do it. Employers cannot require employees to check their email on the weekend or answer the phones or whatever. In other words, when you're off the clock, you're off the clock. It's reasonable, but it's also reasonable that people who want to advance their career could work on the weekends, which is what I told one of our researchers recently. I was like, do you take this job seriously? And if you do, if I was you, I'd do two hours every Saturday or Sunday checking your email and checking in with all the founders who are in your portfolio because you only have 25 and in two hours you could email, you know, half of them this weekend and half the next weekend, and that's how you would have an edge

Starting point is 01:14:52 on other venture capitalists in our firm and other, our firm would have an advantage over other firms. And now on Sunday's high leverage output, you can get so much done. Just on the, we have to go away in a second, but I'm going to just squeeze this in. On your point about climate and culture, the reason why in the United States coffee culture has such a Seattle basis to it is because it sucks to live there. it's raining all the time and you need a mid-grade stimulant to do anything. And I say this as a guy from the Pacific Northwest, I say it with love.

Starting point is 01:15:27 And then going back to your point about the Nordics and their blistering climate in the cold versus hot direction, why is there so much amazing, heavy and death metal from that area? It's because they are sad and they are drunk and they are in the base and they have a guitar. And good music flows out of it. So you can see connections. I'll just say, though, again, talk about France. it is the AI hub of Europe and I have some other data from Pittsburgh in front of me here

Starting point is 01:15:51 that it is raising far more than even Israeli companies in terms of the total AI focused capital flowing into it. So on continental Europe, making Israel in there as a Pishbook does, it's the leader. So something's going on. You know,

Starting point is 01:16:07 someone's going to be slightly wrong here and I'm curious. But we got to go away. Friends and family, we are back. We are doing news. We have lots to talk about. The world is so interesting. And now we'll take one question from the audience, maybe two. Bobby V is a question for Jason. I'm going to just paraphrase this for you a little bit.

Starting point is 01:16:24 Given the AI conversation that we had, would you invest any of your own personal money into an AI model-ish company? And if so, which one is your favorite? I definitely would not. I think because they're overvalued. And I think the winner is going to be open source. I would invest in a company like Hugging Face

Starting point is 01:16:41 or somebody who built support tools and a stack around an open source project. So if somebody took Lama from Facebook and they said, Hey, J-Cal, I want to come to the accelerator. Here's my idea. I take Lama and I'm going to fine-tune it and build a collection of tools around it for people who are working in audio and video or people who are working with accounting or, you know, and build some sort of open source extension to it and a hosting product or whatever.

Starting point is 01:17:13 Yeah, sure, maybe something that was picks and tools and shovels. based upon an open source product in a language model, I would do something like that. I also think consulting firms, like if you, there's two ways to make money in the world. Equity value, Alex,

Starting point is 01:17:27 you know, and we talk about stocks going public and getting bought and Lena Kahn's reign of terror on the venture industry. But then there's another thing. It's called cash flow, cash flowing businesses.

Starting point is 01:17:37 If you're three really smart cats in, you know, and have the ability to find two in a language model, et cetera, starting a services firm where you charge, ungodly amounts of money. And you have 10 developers in Ukraine, India, offshore, wherever. That costs you $35,000 a year each and they're crushing it and you're paying them twice but they got paid at their job locally. You could go charging, you know, for a multi-million

Starting point is 01:18:01 dollar engagements to work with companies that are trying to figure out how to deploy and implement the software. And that's picks and shovels. There was a company called Razorfish, my friend Jeff and Craig started in New York. And there was another one, agency.com. Those companies for five years, agency businesses, they wound up being bought by the larger agencies like BBDO or whatever, like those giant roll-ups are in the advertising business. Those companies were charging $250,000 to plan people's websites, and then they would charge $5 to $25 million to build their websites. Philip Kaplan talked about this in F companies, yeah. Yes. So there's just a huge, huge opportunity there. The thing I'm going to throw in there is that if you ever get tired of me

Starting point is 01:18:43 and ask me to not keep coming on the show. I'm just going to go ghostwrite for VCs. That's my version of that. You could do it, yeah. I think they would pay a lot of money. I always wonder who writes Aaron from Aaron Levy box his tweets and he told me he does. And I was like, no way.

Starting point is 01:18:58 I believe that because... Nah, he's got to have a team. There's some group of people in a room helping him brainstorm them. He's just too good. Either that or he should quit and be a comedian. Anyone else, I would agree with you. But Aaron Levy, I think he's actually...

Starting point is 01:19:11 I think he's that guy. I just think he's smart and nice. And I think that combination plays well on social media. All right, we got to get out of here. We got to go.

Starting point is 01:19:19 We'll be back, everybody. More news coming. Bye-bye.

This Week in Startups - WeRide IPO, Polymarket + Perplexity, the Trump Bump and more! | E1992

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