This Week in Startups - Woke Google Maps, how Wells Fargo is losing money on fintech, and the global AI race | E1967

Starting point is 00:00:00 All right, everybody, welcome back to this week in startups. He's Alex, I'm Jason at Alex at Jason on X.com, previously known as Twitter, full docket. Subscribe to our YouTube channel and just having this week in startups. And you will get a notification if you hit the bell when we go live. We're going to go live three days a week. We'll figure out if it's Monday, Wednesday, Friday, Monday, Tuesday, Thursday. It'll be what it is as we get through the summer and get our legs under us. But let's get started.

Starting point is 00:00:25 It's a full, full docket. Yeah. So today we have up top what Jason, is calling woke Google Maps, which I'm sure is going to be a great conversation for everybody. It's going to be fun. Then we're going to talk a little bit about a fintech company called Built and how they've managed to take Wells Fargo for about $120 million a year. It's my favorite story in tech today this week, maybe this month.

Starting point is 00:00:45 Then AI progress in China and Japan and who is building the fastest in and around the world, what's OpenAI really worth based off of yesterday's All In? And then new calls for social media regulation that could impact the next generation of startups, a.k.a. Jason's favorite issue today. This week in startups is brought to you by Squarespace. Turn your idea into a new website. Go to Squarespace.com slash Twist for a free trial. When you're ready to launch,

Starting point is 00:01:15 use offer code Twist to save 10% off your first purchase of a website or domain. LinkedIn ads. To redeem a $100 LinkedIn ad credit and launch your first campaign, go to LinkedIn.com slash this week in startups. And Mercury. With Mercury, you can simplify your financial operations with banking and software that power your critical financial workflows all within the one thing every business needs, a bank account.

Starting point is 00:01:47 And with new bill pay and accounting integrations, you can pay bills faster and stay in control of company spend. Apply in minutes at Mercury.com. First, woke Google Maps. You found this one. You brought it to the show. I have thoughts here, but why don't you start with what caught your eye? Yeah, so very simply, I, you know, I saw that somebody who worked at Google was tweeting and then subsequently deleted the tweets.

Starting point is 00:02:12 So, you know, X is a pretty full contact platform. I've been spending a little time on threads. I'm getting destroyed on threads. It's like the anti- Twitter, anti, you know, it's journalists and people on the left, right, basically, and Instagram folks. So it's kind of sad to me because we used to all be on one platform arguing. Now it's like two sets. But anytime I post over there, everybody's like, I hate you. And Sachs is terrible.

Starting point is 00:02:35 And this person is terrible. Your friends are terrible. Like, okay, whatever. But on X, you know, you get this Overton window is wide open. And what I thought was interesting about this was a Googler was talking about, as you can see there from the tweet, if you're watching the video. Why doesn't Google have a feature of the most. scenic route because, you know, like, let's say you're walking through San Francisco or New York or Brooklyn, and you might want to take the scenic route. That's something they could do. And so

Starting point is 00:03:04 somebody who worked as I think a product manager or something at Google was talking about how, you know, actually that came up a bunch. And so this person, Casey K.K. Limes, if they are, in fact, from Google, it's a very tantalizing idea. I did a lot of work and research on pedestrian navigation. This was among the top feature requests I heard from study participants. So it obviously is a great future. So you're like, okay, great, tell me more. And here comes the bomb. The next tweet was, yeah, we didn't do it because of equity, right?

Starting point is 00:03:38 And so because of its global scale, this is Casey again, who we will take in good faith as a Googler or was a Googler. Because of its global scale, even a small shift in maps routing from a seemingly innocuous and frankly very useful feature could create a reinforcing feedback. loop with spatial inequality. Spatial inequality. Now, obviously, it's very easy to mock spatial inequality and this whole, like, tone of everything has to do with gender, race, identity politics, income. But he goes on and says, inadvertently diverting foot traffic from low income streets to high income streets, takes revenue and potentially tax dollars from already struggling

Starting point is 00:04:21 communities and funnels it instead to richer communities, always remember, We live and build tools in complex systems for context. This idea was usually discussed with regard to walking navigation specifically. Okay. So what is your take? Because this is obviously, anytime we bring up DEI, merit, identity politics. Everyone gets along great and no one gets upset. And everybody listens fully to each other's perspectives and takes them to heart.

Starting point is 00:04:50 So, yeah, and that's actually quite why I wanted to put this on because as a twist of fate, I've actually seen a bit of what happens when routing is changed in a city and the economic impacts of it right here in Providence. So in Providence, we only have so many bridges. We're not a very big state. But there's a very critical bridge that goes out of Providence into East Providence and towards Massachusetts. Everyone goes across to commute.

Starting point is 00:05:14 And half of it broke. So quite literally, the number of lanes we have going across this river out of Providence went from two bridges to one that has to be shared. Traffic snarl, traffic jams, local investigations. a couple hundred million dollars to fix. This happened in the last couple of months. It's been a hot mess. Like all across the state traffic is not just crap.

Starting point is 00:05:31 And there's been a lot of economic damage that's come as a part of this. So, for example, a restaurant nearby I live, Noodles 102 says, look, our traffic has been decimated. We got to shut down. They're done. Other restaurants are closing and so forth. And so when I saw this, my first thought was, it seems a little bit silly. But then when I was just thinking about the economic impact,

Starting point is 00:05:50 I can kind of see the point. And here's my argument. Tell me if this is too, too woke or not. But if you said, everyone who walks wants to take scenic route, or I think they also said the nicest route was the initial point of the tweet. So nicest scenic, people are going to go to where there's the most expensive, best kept parts of town and not go through parts of town. That could probably use the foot traffic. And so my question is, who does Google really serve? Or do they have a customer that is the world, a.k. everyone out there.

Starting point is 00:06:17 Or is it just the person who's using the app that just wants to see the most trees? exactly and so this is a this is the ultimate raw shock test you can tell somebody's politics by how they would approach the story which is why i wanted to put it on the docket to kind of just think from first principles if you and you caught me off at the past i was going to tell you about a town there is a town in um north of san francisco i got the name of it but i was driving through it and um the highway used to go through the town so you've ever been on one of those highways and it slows down and then you're on Main Street and you hit three lights and then it says after the 25 miles or 35 miles an hour, now you're back on a highway, now you can go 65 or whatever your

Starting point is 00:07:02 choice is. It's like this in upstate New York as well. And I'm sure Providence. I've seen this in Austin where they have the 290 and the 290 slows down to go through certain towns and there's stoplights. Okay. So they build a highway and they stop going through the town. this town has a lot of through traffic going, you know, out of wine country, up to Portland and whatever. Town decimated. Nobody stops. They put billboards on it. Hey, get off here.

Starting point is 00:07:30 See our beautiful town. You know, go get. But the place is a is hollowed out compared to what it used to be. So there is actually impact to how you route and Google Maps is going to have an impact. So certainly a reasonable person of good faith would say, hey, let's think about the impact. here. On the other side, to your point, hey, I want to see more trees. I'm in Australia. I'm in Sydney. I would like to take this walk, but is there a way for me to walk along the harbor? I don't know, right? And when I try to do those walks, it's always like, here's the passes route.

Starting point is 00:08:04 And I would love for it to be able to pick the most scenic or perhaps the most populous. Maybe it's safer if it's the most populous or I want more energy, right? And so, and conversely, you might want the least populace. Maybe you're riding on a bike. You don't want to have a bunch of foot traffic or something. So there's all kinds of reasons. Giving the consumer the power here is great. And having a thoughtful discussion about it is great. Not everything is bad intent is I guess what I would say. That's the thing. So when I read these, you know, he says things, this Casey person, this got talked about a lot. And he says, well, I would love this feature and we can do it. Here's why I didn't think it was the right choice. So to me, this is describing a product team that is being as thoughtful as

Starting point is 00:08:46 they can about how to build the best stuff. They mentioned studies. They're talking to users and they want this to work out. I think we can easily say, we don't agree with the decision that they came to, but I don't think the intent here is bad. And that's why, like, with a lot of love, I do feel like we use the word woke a little bit too broadly. And I think it, much like liberal and conservative in this country, it gets used so much that

Starting point is 00:09:08 it kind of loses its definitional value. And so they're not saying you can't walk over there because you then would only go to the rich part of town. They're saying, we're trying to find the bright balance. And drawing that middle line, I think, is, is, there's not one answer, Jason, because back to your point about even a Roastrass test, what I think is not probably all the time what you think. And so we're going to end up different places. I do think that a system inside of Google maps that is purely safety oriented for pedestrians, especially at night, would make a lot of sense. Like, just, they say an anti-crime heat map, you know? Yeah.

Starting point is 00:09:43 One thing that drives me crazy is when I want to buy something on a website, but there's too much friction when I go to checkout. I want a smooth and easy payment experience. And of course, it's got to be safe and secure. And sometimes I like to have other ways to pay. Like through my digital wallet or even buy now, pay later. Which, by the way, is super popular these days with a lot of people. If you're a merchant, you've got to be able to offer alternative payment methods. So called APMs in the industry. And you know who's the best of this? That's right. right, Squarespace. Squarespace payments makes it easy for customers to make purchases, which equates to more revenue for your business. It's super easy to set up and will keep your MRR going up and to the right, which is what we're all looking for. So check out Squarespace.com slash Twist for a free trial, and when you're ready to launch, go to Squarespace.com slash twist to get 10% off

Starting point is 00:10:36 your first website or domain purchase. Once again, Squarespace.com slash T-W-I-S-T. there was that app that got very popular that kind of went the vigilante route. I think Sequoia had made a bet on it. I thought what it was called. You're not thinking about Ways, are you? Not Ways. Ways is just like, get there faster.

Starting point is 00:10:55 And if you've got to cut through somebody's backyard and run over there, Toulips, fuck it, we're doing it. We're getting you there quicker. I mean, I was talking to an Uber driver. I'm here in Southern California taking the kids to Disney and Universal and doing that little tour. You know, the driver's like, listen, I lived here my whole life. You're going to get killed in ways here. Like, it takes you on some crazy routes.

Starting point is 00:11:15 People are speeding. You know, whatever. Like, I know the routes. It's not worth it to save two minutes. And I was like, all right, interesting. There was another one. It was an app. And one of the producers is probably searching for it.

Starting point is 00:11:27 But there was a crime app that was specifically Citizen. Yeah, if you remember. And Citizen was awesome. But if you turned on, unless you turned on notifications and lived in San Francisco. Because literally, you'd be like, Like, there was a stabbing 0.6 miles from you. Like, there is a stabbing. Point six miles from you three times a day in San Francisco, tragically.

Starting point is 00:11:50 Point six miles, though, in a dense city is a lot. Like, point six miles. It's 12 blocks. Yeah. Where I grew up is halfway up my driveway. Yes. San Francisco in Manhattan and Shanghai. Ten blocks.

Starting point is 00:12:00 Yeah. That's 10 blocks can be a lot. I agree with you, though. It is a little bit unnerving to be constantly told about the crime in your area. But I can just see, like, for example, if I was a woman, if I was smaller, I can definitely see having personal safety be higher on my hierarchy. And then you could also just have people turn it off. But I just don't want to say that the intent was bad here because it's clear they tried

Starting point is 00:12:21 to find a solution that worked for people and also the world because Google is so big, Jason. I think it should keep in mind its responsibility to the people because we all use it. And Ways had to do this as well because Ways did start creating problems for neighborhoods where like, now listen, they're public streets. So we understand the argument. Everybody has a right to them. But it also kind of sucks if, you know, like, hey, the four or five is packed and they're like, hey, by the way, here's a great idea.

Starting point is 00:12:48 This street where all the kids used to play through a local neighborhood, we're going to just send people through. And that's why sometimes they put like no through traffic on the street or they put up a blocker and say, listen, there's kids at play here. And we're going to, you know, during rush hour, close this street to through traffic, right? And so they're, you know, you have to, it's a negotiation. And I think it's an interesting one. Not everything is a racist. sure. I think the word woke is also, I was listening to Sam Harris and Bill Maher. Yeah, good friend of mine, Sam Harris. Bill Moore, I didn't know you know, Sam. I love to spoke on moral philosophy. I convinced him to do a podcast. He had come to my studio, see when I was doing with this, during his, good startups. We have the same book agent. And he's like, tell me about podcasting. What do I need to do this? And I was like, a microphone and a guest. She said, tell me more. And I told them the specific microphones, we're at a dinner. I'm in a couple's dinner. I said, get this microphone, get this, get this. And I just went through it all with. And I just went through it all with. them. And yeah, and so I'm to blame, I think, partially to blame for his podcasting, which means he's

Starting point is 00:13:45 not writing any books. But they were having a good conversation about the word woke, actually. And like the word woke, I think, you know, in the 60s and 70s, the origin of it is, hey, if you're an African American in America, stay vigilant, eyes right open. Like, you might get pulled over by cops, you know, in the South or somewhere, like, stay woke. Be aware, be present of potential threats to your safety. That's what it meant. Now, woke has become like, okay, Karens and white women fighting for whatever and, you know, a way to drive people here. I just would put Google's behavior is in being thoughtful. And I'll take them on face value and good faith that they're being thoughtful.

Starting point is 00:14:26 You can make fun of them for the Gemini stuff. Yeah. So the Gem, God, yes. I guess that's my point because if we call out every, when I was growing up in the 90s, in the conservative Christian, church. Everything was politically correct. That was the stamp put on everything. Anything that wasn't aggressively racist or sexist was stamped politically correct. And to me, it ended up being a phrase that I viewed as a compliment. But I think woke is always used as a pejorative. There's no like positive case to be made today for its use. So it's spread a little bit. Anyways, we're a bit of topic. Great. Let's keep going. Glad you're working on this.

Starting point is 00:14:59 Maybe next time the better PR strategy. So that way one engineer does not end up engendering the entire collapse. So leading all their tweets and being like, oh my God, what have I done? Yeah, well, you've had those tweets. You tweet out something innocuous and then suddenly bam, bam, bam, bam, the whole world's on your door. You're like, whoa, I was just trying to talk about poodles and Mexican food. That's it. Or whatever the hell is. Yeah.

Starting point is 00:15:18 Yeah, it is. The human spirit and psyche is not designed to have thousands of people, if not millions, see your worst moment and then mock you for it for eternity. So. Eternity is a long time. But the cool thing about most social media is that you will become character of the day and then within a week, you've become positive. The half-life is pretty short.

Starting point is 00:15:43 It's pretty dramatic. Like the woman who had an incident on an airplane and she's like, that guy is not real, whatever that woman's name is, the guy's not real. Like, she, I think, has made like a whole persona of it. And I think she secured the bag. So congratulations to her. As long as she gets the bag, because otherwise, I think you will have a hard time shaking us at that level of national attention.

Starting point is 00:16:06 Yeah. Also, just don't have a meltdown on a plane because everyone there's a phone. Everyone's bored. What are you doing? The problem. Yeah. Yeah. Tiffany, shout out to Fini Gomez.

Starting point is 00:16:15 Here we are talking about her still, right? Yeah. I mean, I hope she's well. Okay. So now, the best story in technology today is, I think, built and Wells Fargo, built, if you're not familiar with it, it's B-I-L-T. Jason, it is a fintech service that allows people to pay their rent with a credit card to generate miles.

Starting point is 00:16:35 This was my dream. when I live in San Francisco. Sure. I paid so much rent and I got nothing for it. However, it turns out that people working to try to figure out how this works have finally figured out the answer. But to work everyone into this, we're going to pull up a clip from CNBC with the founder, Anchor Jane, trying to explain how this works and see if you can parse out, Jason, the gesture.

Starting point is 00:17:00 It increases the point. I'm going to go to Ken on this because I apologize. But, okay, you decided this company is worth three. billion based on some kind of mathematical formula about how much they're earning and what the future of this. Okay, I'm going to ask you to explain it because I, unfortunately, we still don't understand it. So is it, I'm, I know, let's just pretend I'm related. Okay, you come to me and you say, hey, we want to process for you. Yep. Okay. And I say to you, okay, I'd be very happy for you to process for me. How much are you charging? Related pays for payment processing today.

Starting point is 00:17:33 Right. ACH fees, they pay check-tashing fees, they pay card fees when you pay your rent. Instead of that being our core business, that we're trying to generate a huge margin on that, you can turn that into rewards for the customer that they can then use for airline miles. Somebody has to pay for those. That is already happening. Everybody else's business is just to keep that. So related is already paying for payment processing before built using legacy.

Starting point is 00:18:01 Right. Right. Which you think here at the end of the day is the building, right, everyone converts to the built payments platform. And they're paying a service fee for that. So the same way they used to pay for their legacy platform that gave none of that back to the renter. Right. They now pay those same fees. No, but if somebody wrote me a check, a personal check, there'd be no fee on that. Correct. So then you get less rewards on that check payment, right? Exactly. So when you pay electronically where there is a fee that pays for that.

Starting point is 00:18:30 Sounds like there's two businesses here. help me there's the platform fee so the software fee that i'm going to pay you to use right payment processing payment process a fee per transaction i'm not paying you some kind of other fee on top of that as a building correct okay what am i paying you as a building i'm a i'm a landlord we have a lot of landlords who are watching the show they may want to work with you or not how much are they are you charging the same that they currently pay for any other payment processing platform they use and that's different, just like every enterprise deal has slightly different. Most of them don't usually allow you to all the online.

Starting point is 00:19:06 Yep. This is, yeah, what's your take here? I'm confused, and you and I are both in the industry covering this for a combined 50 years. Not only that. We also know how credit cards work, how the financials work, how much swiping a card costs. And what I think is... Two to three percent, right? Depends on the card a little bit.

Starting point is 00:19:26 MX is higher, which is by some businesses don't take them, but corporate cards, and your safety, you know, if you check people's driver's licenses, you know, like what background you do if you wait to have it clear, all this stuff goes into your fees, right?

Starting point is 00:19:42 Absolutely. Yeah. And the reason why people don't get, I think, credit card points for paying for rent is that often's done via ACH. It's often done via cash or whatever, or just a check. And so there's not a lot of margin there. So people are trying to figure out,

Starting point is 00:19:57 CNBC in this case, how does Built manage to offer rewards on a thing that doesn't generate margin? And the entire clip is these two poor CNBC hosts chasing this founder around in a circle, trying to figure out what it is your selling, who is paying for, and how it works out economically. And we have since found out, Jason, that it turns out that the answer is Wells Fargo. Ah, yeah. Sugar daddy. Well, accidental Sugar Daddy. Oh, okay. Explain.

Starting point is 00:20:25 So the Wall Street Journal writes that essentially, Well, Fargo wanted to get more deeply into credit cards, struck a deal with built. It was super popular. Over a million people signed up in the first 18 months. Wow. And then the economics did not work out as they expected. People are not holding a balance. They are paying it off immediately.

Starting point is 00:20:46 They are not being upsold to new things. They arrived because there was a perk. They are taking that perk. And then they are effing off somewhere else. And so it turns out that built, which is not worth $3 billion, $3.1, I think, is losing Wells Fargo around $10 million a month, which is, even for a bank, serious, serious money. Yeah, so, you know, unit economics is a discussion that we had a lot,

Starting point is 00:21:11 maybe three times in my history in the industry. First, we had it with Webvan, which was Bill Gurley's investment in grocery delivery. We had it at that same time around Amazon, and could you deliver books? You know, was there a way for this to make sense to, like, actually ship a book to give, remember Amazon Prime free shipping?

Starting point is 00:21:29 How is free shipping ever going to work? Right? And so, and the answer in both those questions is it didn't work. And WebVam went out of business. And eventually Amazon raised prices to, I think right now, most people are paying for Amazon Prime $150 a year. So it is not as cheap as people thought it was. The introductory price of Amazon Prime was between, I think, 40 and 50 bucks.

Starting point is 00:21:54 So, you know, if you look at both of those, it didn't work. It destroyed one company and the other company had to raise their prices eventually. Okay, now let's fast forward. Uber and Lyft and DoorDash, negative unit economics on the lower price services. Like UberPool was losing money, UberX was losing money, driver incentives when they were in the war over drivers and trying to build out their infrastructure. And, you know, that took, what, five years for Uber and Lyft to turn a corner, stop trying to grow at all costs. And what made them do that? Wall Street.

Starting point is 00:22:33 Wall Street makes you do that because as I think Warren Buffett or Charlie Munger said, you know, it's eventually, you know, it's the stock market starts as a voting mechanism and then it becomes a weighing mechanism. It's a scam. And that's what you're seeing here. A startup was like growth at all costs. It's a ZERP startup, obviously. It was a zero interest rate phenomenon startup. And they came up with a way to sell $100 bills for $80. If you sell, if I went out onto the middle of Main Street and I said, here's a stack

Starting point is 00:23:05 $100. Anybody wanted it for $80, a smart person would say, how many are you selling? I'll take them all. Just give me the difference. And that's what we have here. And so, you know, it's if you're a founder, you have to understand your unit in economics. You have to understand when you're, You are trying to acquire customers and losing money in doing so, and if you would have the

Starting point is 00:23:27 ability to flip it. And I think the problem here is if the average rent was $3,000, right, just back of the envelope math, and let's say you had about $40,000 in rent a year, and you're getting all these miles and you're getting whatever, 2 or 3% back, I don't think, based on what you've said, there's a way to make that money back. Okay, so that's the thing that I'm absolutely stuck on is how was this ever supposed to actually work out? The only way it could function is if Wells Fargo's new customers were spending so much money and then letting those balances rest.

Starting point is 00:23:55 But I mean, I think those people, the less financially savvy probably aren't also the same people who are out there looking for new fintech products to put their money into to take advantage of. Do you know who does that? The points people. I'm not a points person. I respect people who have. We all got a points person in our life, though. You have to have one. I tend to invite them over only for very short lunches so that I can't talk to me about why Chase Sapp.

Starting point is 00:24:18 reserve platinum gold green is the way to go. I just don't. It's a lot of lift. It's a lot. It's a lot. That's a lot of squeeze for very little juice. Yeah. They're like,

Starting point is 00:24:30 it's 0.5% better. And I'm like, boy, I'll buy you two coffees and then you don't have to do the works. I've cleared a difference for you. But if it's a hobby, I get it. But the point is,

Starting point is 00:24:39 those people are not going to leave a fat balance on their built card from Wells Fargo to generate the margin to pay for the rent rewards. And the second you take, this away, that million will go down to half a million. Like literally, people will just start canceling and churning out of it immediately. Yes. There's a name for these people in the sweepstakes business. They're called like sweepstake, you know, some offensive word. And they're basically like sweep holes or something. Like there's an industry term for it because there was at some point people going around doing like group sweepstakes, like sign up for 10 newsletters and then

Starting point is 00:25:13 win a MacBook. And then all of a sudden you would do this for your email newsletter. and you know what would happen? You would get thousands of emails signing up, and none of them would. And your open rate would go from 50, 60% down to 40%, and down down to 30%. You're like, what happened? Those were dead emails. These people were creating thousands of emails to just join sweepstakes. They were doing it programmatically.

Starting point is 00:25:36 So same thing here. Unit Economics at some point become the truth and the truth shall make you free. This startup needs to just accept the truth that they did a hack. and the hack is not sustainable. Navigating the B2B 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?

Starting point is 00:26:03 The ones who call the shots 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.

Starting point is 00:26:31 180 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, 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 compared 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.

Starting point is 00:27:02 Make your B2B marketing everything it can be and get a $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 going to be. giving you a hundy. So in a normal world, everything you said, bang on. They have a deal with Wells Fargo through 2009, which they're currently renegotiating. And if I was built, I would not renegotiate all of my business away. I would, I might cut Wells Fargo a little break just so they

Starting point is 00:27:34 don't go apoplectic. But I don't think Wells Fargo is going to be able to walk out of this as easily as we might think. This is not a month to month rental contract as far as I understand it. So I honestly, normally I would be like, Bill, you know, okay, doesn't it going to work out. But given Wells Fargo's history of large settlements with the government over alleged criminal behavior, I don't mind someone else making money at their expense. It kind of brings me joy. So, Filt, shout out for me. Hope it the next model works out better than the first one, because this one's not going to be.

Starting point is 00:28:03 Just go back and look at the history of Amazon Prime. It's 15 bucks a month now, folks. The $15 a month is $180 a year. So if, you know, those UPS packages were costing $10, you know, they've got at least $18, deliveries, you know, one and a half deliveries a month to your house that they've got covered. And then they have to make the rest back on the margin of, you know, selling products, which is why the prices have gone up over time on Amazon. And it's not the cheapest place to buy stuff.

Starting point is 00:28:33 It's not even close, actually. What it is is the place where my credit card is always stored. And if I need a thing, they will have the thing. It's not my preferred place, though, just because. Oh, really? Say more. Well, the interface is trash. And it's hard to figure out.

Starting point is 00:28:46 anything. And what I would like to do is have them curate slightly more. So that way, I don't have to go through 19 Reddit threads to figure out which thing I need. And also, they're trying to generate lots of money from advertising. If you don't know, Amazon, like every major tech platform, makes hella bank off of advertising. I think they're up to 40 billion, by the way. Yeah. And I think they've pulled out 400 billion of customer surplus because using their service is now just waiting through SEO'd like, description. and all the pictures are fake or their AI generated. It's tough.

Starting point is 00:29:20 But if I need a book by Wednesday, they will always have it. And so they still have me. And honestly, Jason, I didn't even know what prime cost. We might actually have two prime accounts now that I think about it. You should probably not do that. But to me, it's like a Netflix. It's part of like electricity. Like, it's a thing that you just have and it costs a number and you pay it.

Starting point is 00:29:37 It's interesting that you call it a utility like that. The reason you call it a utility is because it's so goddamn reliable. And it gets more and more reliable. I'm here and like I said, I'm in SoCal. And like, if I forget something, it's just super easy for me to just go on Amazon, zip, zip. But if I just did like a search for a podcast microphone, just as like a joke and like literally the first row, three of the four are ads. They're sponsored. And then above it is rowdy and that's obviously sponsored.

Starting point is 00:30:08 So of the top five for our ads. And that in the next row, you know, you get like, the bestseller is the overall pick, a popular brand pick, all this other nonsense. Then you go to the next row, it's another row of paid. It's a carousel paid.

Starting point is 00:30:25 I would pay somebody, and I am not kidding here, if somebody builds me, I'll pay $500 for a toolbar. I literally pay $500 for the toolbar. That takes ads out of Amazon results. Just, does it exist?

Starting point is 00:30:39 Does it exist anybody? I mean, literally I'll pay four times as much as I'm paying on Prime to just stop the ad so I can just get a decision made quicker. Yes. Also, same thing for Google. Just Google search, not Google the company.

Starting point is 00:30:51 Just, I want to be able to search for something and be able to scroll all the way past the fold before I get to content. I want to get rid of that experience. I wanted to be inverted. That way it's good first, ads second or to the right, not for to the right ads. And then a result down there. Also, that Google thing of people also ask, good. I'm glad you know that.

Starting point is 00:31:12 Leave me alone. I don't need nine different ways to reframe. how do I cook a tortilla? Because if I wanted a different search for it, I do it because I'm not. Yes, because you're a power user. How do you cook a perfect tortilla? Yeah, got it.

Starting point is 00:31:24 I mean, I would actually love to learn that. That'd be fun. Yeah, sure. Someone pointed out in the comments as we're recording this, that the Amazon Prime credit card offers 5% cashback, which is apparently paid for by Chase. And the reason why those economics, I think, can work out is the average Amazon customer is not your average points guy.

Starting point is 00:31:40 And so they are probably carrying a balance, and therefore the economics are a little bit different and it can work out differently. Anyways, built. Shout out to you, Wells Fargo. Enjoy your next $3 billion. Fine. All right.

Starting point is 00:31:51 Let's talk about AI around the world because you had a couple of things here that you're excited about. The first one is about a Chinese investment group called High Flyer Capital Management, which was actually new to me. Apparently, they've 8 billion AUM. Has you heard of them? Yeah. Nope. Like a Chinese hedge fund, apparently.

Starting point is 00:32:08 They are using technology and AI to make better trades, but something happened along the way. Yeah, so they got into a lot of AI to crunch all the data to help them run this quant fund, as they call it. And so they ended up spinning some of that technology out. And now they have a model called DeepSeek v2, which is apparently a quite good LLM. And then the prices have come down so much that we're now actually seeing a price war inside of the Chinese AI market. So deep seek costs two yuan for every million output tokens. And then after that launched in May, Bight Dance cut its prices dramatically.

Starting point is 00:32:46 Alibaba cut prices dramatically and made some of its models free. So it seems that we're seeing an investment company accidentally subsidized an AI product that caused a price collapse in the value of AI technologies in China. But to me, Jason, the thing that sticks out the most is the pace here. This is moving fast. And people talk about China being behind an AI now. It doesn't feel that way when I read this story. Yeah.

Starting point is 00:33:10 What's interesting about this is, think, you know, building language models in other cultures and other languages is going to be slightly different, I think, and, you know, the pricing and the competitiveness here, I think, is moving all of these language models down to zero or close to zero. It reminds me of storage. Storage was such a blocker in our industry for so long. Google photos. And, you know, that's why the The product launch of Gmail was so special. For those of you were under the age of 40, when Gmail came out as the second product out of Google,

Starting point is 00:33:50 you were fighting. People were selling on eBay and Craigslist invites. It was the first service to really do like an invite system because they were trying to manage the storage. And the idea that you could have unlimited email storage broke people's brains. How is that possible? And it started with like five gig, 10 gig, you know,

Starting point is 00:34:08 and just you guys have, whatever it was, maybe it was 50 megs or something. You guys know how that story went. Once we cracked that open, then YouTube, Netflix, just photos. As another example, like the idea that you would save high-res photos, before you put photos into your backup storage, the first thing you did was downgrade them. Yes. You would use a piece of software to make them smaller and then you back them up.

Starting point is 00:34:33 Now it's like, do you want raw files? Go for it. And now that I'm in my AV phase, I'm in my audio file phase. J-File. I am super into this audio stuff. I'm using flax. These things are 20, 30, 40 times as big. And I'm storing them through a service called Cobas,

Starting point is 00:34:52 Q-O-B-U-Z, which has, it's basically like Spotify for nerds from France. And they take every album and they make a high-res flak version of it. So when you're using these special headphones, like the vocals I use, whatever, you know, in order to hear the sound, you don't want compressed audio files. like M3s or whatever. And so it's just extraordinary. Again, enabled by storage. So I think the trend here is going to be, as the cost per token go down, I think

Starting point is 00:35:18 2-1 is like, I think it's still 7-8-1 to the dollar, you know, basically. About 7-N-B, yeah, 7-ish. They basically control it. So it's been 7 for 20 years, I think. The Chinese are like, huh, seven. What's you trade to get today? So 2 yuan is worth about 14 cents, I believe. Okay.

Starting point is 00:35:38 No, sorry, 28 cents. The big liar. 28 cents. Yeah. So it's like, it's a quarter. Yeah. And they will just, you know, and if energy is going to become the constraint, well, you know, in China, there's a lot of nuclear power plants and hydro plants and you could just put

Starting point is 00:35:52 all the data centers there and pay somebody off to like the Bitcoin miners did. So it's going to be really interesting to see how different countries approach these language models for self-defense, you know, security, reaching superintelligence. you know, that's like one existential part of this. And then the other part is a very practical part. Like, how are we going to compete in efficiency when, I don't know, the producers of this podcast can use all these AI tools to make show notes faster? Or people who are transcribing and transcripts are faster. Or the average analyst that McKinsey can, you know, research stuff faster and faster.

Starting point is 00:36:31 These other countries and other languages, they are going to be like still doing things manually. that would be like they're still, you know, I don't know, using, like rocks. Yeah, they're doing steam engines and everybody moved to electricity. It's like, really? You're burning coal to run your factory? Like, there's electricity. You can use that.

Starting point is 00:36:51 And so this is existential on an efficiency basis and the efficiency of your populace and businesses. And then there's super intelligence, obviously. And that's where I dovetail this one with what's happening in Japan. Yes. So there's a company called, and Jason, budget is Sakana, Sakana AI. It's a Tokyo-based LLM developer.

Starting point is 00:37:12 It is built by some deep-minded alumni, so some Google heads have gone over to work on this. And according to the information, they're raising about $100 million at a $1 billion evaluation. I know we're all a little inured to large dollar AI investments, but here's another nine-figure round into a brand new unicorn, essentially. So worth keeping in mind. And the things that they do that matter are twofold. One is, yes, they are building Japanese.

Starting point is 00:37:37 language, large language models. So in Japanese language, most of the internet is English, I think about half. So that's very important. But also, they put out a paper talking about how to make LLNs, or train them, I suppose, for less. So back to your efficiency point, the actual model creation, according to Sakana AI, is going to become cheaper. So localized language and less expensive, that means we can do more models in more language at a higher quality point. And I think that means every single language is going to have their own best of breed, LLMs within the next 12 months, 18 months. Absolutely.

Starting point is 00:38:10 And you have the Falcon project out of the UAE. I think the sovereign wealth funds and countries are starting to realize, wait a second, America is running away with this. We need to be in the game. And do we want to be in the game with Sam Altman and Microsoft? Do we want to be in the game with, you know, Facebook or Google? Well, that means then we have an even bigger dependency on our country's sovereignty on another American company. And they already are looking at it like, whoa, how much of the EU's economy

Starting point is 00:38:43 is tied to Google and Facebook and they're trying to figure out how to manage that, right? And the impact those things have on elections, those things have on the economy, right? Okay. So I know we're thinking broadly here, but when we consider what we now call the decline of globalization, right, economies being a little bit more insular, every country wants to make their own food, energy, semiconductors, and AI models. I wonder if some of the decoupling that we're seeing actually is because of what you just said about the EU, in that some American companies have gotten so big, so powerful, and so global that other nations are like, hey, this is not like the old days when

Starting point is 00:39:24 there were 50 companies competing to ship us tuna, you know, or whatever. That was fine. One company powering this much of our economy is incredibly risky. So we need to be a little bit more local. So I wonder if essentially Microsoft and all of our big tech friends became so powerful that they broke globalization. Most startups have tight runways. So keeping your finances in order is critical. And we all know it can be really complicated.

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Starting point is 00:41:02 Mercury is a financial technology company, not a bank, banking services provided by choice financial group and evolved bank and trust members, FDIC. In a way, COVID, when people, COVID exposed all of the kind of lack of redundancy in the system. So when you saw COVID in like, wait a second, people can't get their Prozac or their Adderall, people can't get toilet paper,

Starting point is 00:41:26 where are batteries coming from? And what about chips? Oh, I can't buy a new car because the supply chain is defined by the weakest link in the supply chain. And if the weakest link is like a chip, there was, I don't know if people remember this, there was like a moment in time for two years when they were selling cars and like, you can buy this car, but it doesn't have these three features that we launched seven years ago. And I was like, yeah, we can't get that chip. I'm like, you put that chip back in my car and just get them.

Starting point is 00:41:50 Yeah, no, it's just no for you. No chip. Yeah, no adaptive cruise control for you. Keep going. And I was like, I literally was going to buy a Land Rover defender at one point when I was in my my J-Pow, my skiing phase, my J-Powder phase. And I was like, uh, wait, I can get the car and it's ankleed. So yeah, the more important thing is elections, I think, and then, and culture.

Starting point is 00:42:11 And so, you know, when you think about governments, they're looking at it going like, wait a second. Who has the most influence over France's elections or, you know, the UK's or Germany's or YouTube, TikTok, you know, Google and India is a great example of. of people who are like a government that's like, you know what, we're the most populous country now. We're on the ascent. No,

Starting point is 00:42:36 you can't have these apps in our country. We want to have our sovereignty. And so they take a, and it's a democracy. It's not the most perfect democracy. If you look at the statistics of like, you know, living in a free country and,

Starting point is 00:42:47 you know, there's work to do, but it's pretty much a democracy. And they're very smart about it. They're like, you know what? We're not giving you the benefit for the doubt.

Starting point is 00:42:57 TikTok. Whereas in the United States, we've got like, people are like, oh, I got a donation from, you know, Jeff Yas or whoever's like the big TikTok holder. Okay, yeah, I think we're cool with it. You know, like, they're making actual smart decisions in India. They're like, yeah, no bueno. You don't have this much influence. We're taking that out of contention. Even with that very, very clear eye perspective and the context here is that they did ban TikTok a couple years ago, much to the chagrin of a bunch of people in India, it's still hard to keep certain countries, sorry, certain companies out of the country. So you're familiar with UPI, which is the unified payment interface in India, kind of that payments backbone the government

Starting point is 00:43:34 built. Well, the two biggest users of that are a Google wallet. And if I recall correctly, Flipkart, which is mostly owned by Walmart. And they're trying to cap the max percentage of payments on UPI that can come from those two at like 65% or something, but they've had to push it back because there's no real next option. So even if you're smart, it can be hard to get away from the hegemony of American companies, which are astride the globe. And if you thought what happened with the ad networks and social was a big impact, it is going to be like a drop in the bucket, a flea on the butt of an elephant when compared

Starting point is 00:44:15 to what AI could do. AI could just totally change, you know, how some of these countries are operating and then they would be beholden to this frankin corporate structure of Open AI, which kind of is like saying you're owned by Microsoft or maybe they're going to have a public company. Like, do you really want the sovereignty of your country to be dependent on Open AI or Google Gemini? Of course you don't. And so this is existential. What this also means is I think this will move the race towards AGI, general intelligence, I think is going to happen faster than people anticipate because there's going to be so much competition for it. Yeah, no, so I agree with that wholeheartedly. I just, I'm curious what your definition of AGI is because I've heard, I mean, this is a thing that you buy into.

Starting point is 00:45:10 Yeah. I have a personal hunch that may not be particularly learned, but I'll give it to you anyway, since we're live. Why not? Yes, we'll just cut it out. No, we won't. The thing that I struggle with with current LLMs is that they are very good at taking

Starting point is 00:45:26 a corpus of information and doing things with it. What they cannot do is something that is kind of self-reinforcing or they can't expand past that as far as I understand it. So to me, an advanced generalized intelligence, if you will, would have to be able to look back at its, self and then edit what's underneath its decision-making process. And then it could become something that I would consider quasi-sensions and therefore generally intelligent.

Starting point is 00:45:51 And that may have sounded stupid, but I tried publicly. So there you go. Yeah. And so that is one of the definitions. There are many swings at bat for this. People have, you know, some people have said something like very simple, like the touring test. You can't tell it's not human, right?

Starting point is 00:46:07 And it can fool most people. I look at it from not just intelligence, because verticalized intelligence we've already adapted to. We know we're not going to beat, you know, a verticalized chest AI. We don't anticipate we would beat them, right? We don't anticipate we would beat a perfect factory robot in making perfect lattes from the CafeX machine, right?

Starting point is 00:46:29 Like, okay, no barista is going to beat the CafeX machine in the sheer number of perfect lattes. It's just, it has all that data. It's going to be perfect. I look at it as artificial super intelligence, which means it is smarter than any human who has ever existed in the history of humanity. So I came up with that one myself because I've heard other people say it's like smarter than everybody or smarter than the average is a lot of things. I just say, you know what, fuck it. Who's the smartest human that ever lived?

Starting point is 00:46:56 Is it Einstein? Whoever it's smarter than that person, which would mean it makes discoveries. It doesn't just do tasks, right? it can make novel discoveries in the world. And we're starting to see that with biotech companies. We're starting to see that with mathematics. People are starting to see the AI make discoveries that humans haven't gotten to yet. I don't know that there's been a super profound one that's changed everything, but, you know,

Starting point is 00:47:25 Freeberg always talks about the protein folding kind of stuff. So it's augmenting human intelligence, like getting us to these solutions. I think it's going to be like at some point, it's like, hey, by the way, you want to know what's wrong with the Big Bang theory? And we're like, yeah, tell us superintelligence. It's going to be like, it's wrong. Here, I've proven the Big Bang is wrong. Here's what actually, here's how the universe started.

Starting point is 00:47:49 By the way, you're living in a simulation. Like, it might actually figure something out that will just be like, what? It's like, yeah, by the way, there is extraterrestrial life. It's here, here, and here. Like, it might literally look at. the decorpus of all of what's in space and then be like, yeah, hey, dumbasses, Bing, Bing, Bing. These are the three closest things. And by the way, here's how you know what's there. And by the way, these civilizations have flamed out three times already. They're

Starting point is 00:48:19 on their fourth gen. You guys are right behind them. Like, it might actually be able to figure stuff out that a human mind is just not capable of. And certainly, we're about to move into the phase of this stuff becoming consistent, which was the other story I sent you that I wanted which get your perspective on, which is, you know, and I don't know if it made today's docket, but there was a story I had read about AI and McDonald's. I guess they were trying to figure out how to take orders with AI and I think they're using IBM's Watson, which is hilarious to think how early IBM was to all this. They were talking about Watson 10 years ago and in Silicon Valley.

Starting point is 00:48:56 And it didn't go that well, but now they're back with Watson X, I think, which is Gen X or in AI base. Here's the story. And you're right. I was actually going to conserve this for tomorrow show. So here's a preview. But the just here is that they put all these automated ordering systems into McDonald's locations. And now they're taking them out because they weren't doing that good of a job. And when you make a mistake with a new technology, everyone talks about it, self-driving cars, same thing from last week. So, you know, viral mistakes make it hard to maintain brand equity or brand strength. So actually, ironically, I think social media is to blame here because if no one could have tweeted or TikTok

Starting point is 00:49:33 their McDonald's mistake, it was probably good enough to keep, I would just guess. Yeah. You don't want to get locked all the time, you know? The idea that a human being is behind that little box in the drive-thru makes no sense.

Starting point is 00:49:45 Like, how is that a human's job? It makes no sense. Like, there should be an AI that's just like, you just say randomly what you want. It shows you on the screen. Please confirm. Please confirm. Please confirm.

Starting point is 00:49:55 We're done. And, you know, I am super excited about humanity, not having arduous painful jobs that do not fulfill people. And I think there's probably some people who were charming cashiers who used it as a platform for their own personal stand-up or being kind to people. It was like a vehicle for that. But, you know, like, I don't know.

Starting point is 00:50:21 Maybe some people also like digging ditches and, you know, picking corn in a field before we had it all automated away. So, um, I worry a little bit about the job like ladder. Like, okay, so I went to McDonald's the other day because I like to get an ice cream and cone from there when I'm sad. And their ice cream cones make me happy. Yeah, they're pretty, actually, I'm with you on that. I'm with you on the McDonald's ice cream.

Starting point is 00:50:43 I started hitting the McDonald's on the way to Tahoe when I change out my snow tires. Like, it's like on this back road of in Sacramento. Uh-huh. And the only place to eat is McDonald's. And it takes me an hour to swap the tires. I like to do it myself. I'm trying to, like, keep my blue collar thing going, you know, and just be a man of the people. Like, I like, you know.

Starting point is 00:51:05 You're the only guy with the family office who does his own tires. But it's fine. It's fine. It's fine. I kind of like it. I just told my sister, like, tell me, find me a place between here and here. And they found it. And I go.

Starting point is 00:51:14 I know the guy. He swaps it up. And it's good for the girls to see me changing the tires with the guy and, you know, doing these kind of like tasks. And there's a McDonald's there. And I don't go to McDonald's. My parents wouldn't let us go to fast food. That was a day.

Starting point is 00:51:26 man, when you go to a McDonald's and you order from that kiosk and they bring you, my kids eat those chicken nuggets, I get that filetal fish and that ice cream and their coffee's pretty good too. Coffee's actually remarkably okay. I'm like, wait a second. This coffee's as good as like most Pakistani delis where I would get them in New York. Like, you know, put the same amount of sugar as my Pakistani guys do. They're like, you want sugar?

Starting point is 00:51:52 One, two, three heaping teaspoons. I'm like, wow, it's different in Pakistan. And I love it. Maybe that's like the old school Red Bull. It's just coffee with a ton of sugar. Basically. Yeah. They have a whole different,

Starting point is 00:52:04 a whole different metric scale. So, okay, you go to McDonald's, you get your ice cream, get you out of your funk. Yeah. And then I feel better.

Starting point is 00:52:11 And now I've completely lost where we started this conversation because now I'm thinking about Turkish coffee. The ordering system. The ordering system. Oh, right. Anyways, I go there.

Starting point is 00:52:18 And thank you. That's perfect. The people who work there are fantastic. It's always kids. They're probably 18, 19. They look like they are in high school or just out of

Starting point is 00:52:26 it and they do a great job. They're lovely to interact with. They're quick and efficient. They're great. And it is back to your point about a platform, a first job. You get in there, you make some money. You get your first couple of W2 checks. You pay some tax.

Starting point is 00:52:39 You put some money in Social Security. You learn a lot. You're fired. You learn how not to be an idiot. You become a manager. You learn how much that's terrible. And you get a lot of these kind of like building block skills. And that's why a lot of people in the United States have their first job at McDonald's

Starting point is 00:52:52 or similar. You get rid of that. Society's going to be okay. But if we apply the same idea to a lot of entry-level jobs from both the most blue-collar all the way to the most white collar, I worry that we are just kind of sawing the bottom off of all the ladders. And it's going to be harder to even get senior talent later because we didn't have the junior talent that was doing the grunt work. Digging ditches sucks. I've done it. Pass.

Starting point is 00:53:15 Get me a machine. But I just don't want to be so quick to rip out all the jobs because I think some inefficiencies at the earlier career point are good for the economy net down there. Yes. You know what? This is such an important discussion. That's why I love having you as a co-host because we're kind of go off on this little tangent here, but we're figuring some things out here in real time. What's very interesting about this conversation is having, you know, a 14-year-old and, you know, she's got cousins who are all in the same age group and I've been hanging out with that group. And they are very interested in work. And so, like us, when we were kids, like, how much am I going to get paid per hour? It's like my daughter's doing a little babysitting here. I'll have her do a creative project. with the eight-year-olds and I did a funding list. And I was like, look, I'll give you $10 to do this creator project for an hour with your two siblings who are eight years old, the twins. And then they're going to give you a review, like a Yelp review. And if it's a good review, you get a $5, they can give you a $5 tip or not.

Starting point is 00:54:11 And she got the $5 tip. They really liked it, right? So I was just trying to teach them about tipping and gratuities and, you know, good service and all this stuff. Yeah. And then one of my friends who's a venture capitalist, his son is trading. in crypto. He's 12, 13, maybe.

Starting point is 00:54:28 Yeah. And he's trading stocks. And I told them about Kids Investment Club. So I started this, I mentioned on All In, I was going to start a kids investment club. I just give my daughter and her cousins like $100 a month. And then we get together twice a month and we're once a month. They pick what stock they want to do.

Starting point is 00:54:44 We have a talk about. They write a deal memo, boom, they buy the stock. So I bought the domain named Kids Investment Club.com. And I'm wondering, like, the time between like full adulthood and digging a ditch. Uh-huh. What we might actually be doing when you were explaining this, like the rungs, maybe we're compressing it a little bit and we just get them through it faster. So like, okay, one, you know, three months of digging a ditch, do some manual labor, like,

Starting point is 00:55:07 understand how hard this is. Yeah. And then, hey, you can go down being a plumber. By the way, millennials are suddenly, not millennial. Yeah, millennials, I've just read an article. There's a counter trend now. Some of them are going to this trad wife, trad, you know about that traditional wife? Oh, yeah.

Starting point is 00:55:21 I'm fully tradd wives. I saw this more as like they were just more interested in the tradwomenal. trades. Right. So there's trad wives and then there's tradesmen, which is obviously this is like a very gender or if you're triggered by gender discussions. Disclamer here. These are not my terms. It's just the terms they're adopting. They're kind of going back to like, you know what? This whole system's effed anyway. If I go work at Google, I'm going to spend three or four years. They're going to lay me off. Screw it. I want to be a trad wife. I want to be a trades person and vice versa. And I'm going to be a plumber and I'm going to make $150,000 a year as a plumber and run my own business.

Starting point is 00:55:57 And then I have two more plumbers and make a half million dollars a year. And I'm good. So I wonder if we're going to just compress the time that they get to adulthood and financial literacy, which is what I love about the gambling sites. Everybody's down on gambling. You know what? I can't wait for this. All right. Hit me.

Starting point is 00:56:14 I take the total opposite. I hope these kids lose all their money in high school. 100% of it. They all get burned, play. poker, crypto, whatever nonsense. Let them blow their $500 a month working at McDonald's and let them learn the hard lessons then and get their brains to understand like you're in a casino where you cannot win. There's no, you have no edge. The system is rigged against you and let's get that out of your system. Boom. Let's get on to the next thing. So this is like if you catch your kid smoking

Starting point is 00:56:47 in the old days, you lock them in their closet with a pack of cigarettes, make them smoke them all before they come out and then they never smoke again. Right. Or it's like you drank tequila in college and now you can't drink for anymore. Yeah, Jason's face, I believe it says it happened with. You happened with gin. Somebody started pouring shots of gym when I was 15 years old and I got the dry heaves for the first time. Shots of gin. You know that tankery green bottle?

Starting point is 00:57:09 Oh, yeah. That body look at you. You're like, oh yeah, I know that bottle. Quite familiar actually. I didn't get to rehab on merit. Sorry. Are you a G and T guys? Oh, I was an everything guy, but GED and T.

Starting point is 00:57:20 Oh, yes. I jeered and teed. Oh, yes. I mean, I know some G&T people, and man, they like it a little too much. So good. I did like four or five shots of G&T over, like they shaked it in ice and I drank. It went down so smooth. They had like an interesting flavor. Boom.

Starting point is 00:57:35 I lost the next three hours straw heaving. Yeah. At 14 or 15. And you turned out fine. So this goes back. All children should be given draft kings at 15. And fourth to, no, I mean, I joke. But on your kids investment club, I did.

Starting point is 00:57:50 When I was in elementary school, I joined the nascent stock market club, and that changed my life. So straight up. That I think was one of the first sparks of interest to me in business. And then it was biographies of Buffett, reading the journal. Then I found a book on startups, and then I ended up where I am now. But like, I think it was that first touch, the early touch of, here's the adult world of money. Ah, it's a substack.

Starting point is 00:58:13 Nice. I mean, I bought the domain of kids investment club. And I just, you know, this is when I have an idea. this is what's good when you have like a really qualified staff and a team. Now you're part of the team. Now you understand how I get so much stuff done. Yes. People are like,

Starting point is 00:58:28 how do you get so much stuff? Now you met the team. Like there's 20 people behind Jason doing all the work. So I just texted Heidi. I'm like, get me kids investment club because I just talked about it on all in. Dot com and have fresh set up a landing page. Over a thousand people signed up.

Starting point is 00:58:44 This is the second time I'm talking about it. I tweeted it once. I'm doing it now. And so I'm going to make, I may make this into a. product because I was talking to my friend who had this kid who, um, his son, that's who the kid is, was doing the crypto trading and stocks. And he's like, yeah, it's a pain in the neck because you can't have a kid's robin hood account. So I was like, ah, I was like, this is a business opportunity

Starting point is 00:59:06 for a startup. Here's a request for startup. You go to kids investment club, you download the app. They can put in their trades. The parent then sees the trade and either approves it and does it themselves. So you end up doing it for them. Got it. You approve every trade or you're doing, technically you're doing the trade. Right. But the kids, and you could have four kids in the app, each of the four kids, you know,

Starting point is 00:59:30 let's say you have four kids or you did it with your cousins. You have six kids in this app. Each of them you put in 50 bucks a month automatically, 100 bucks a month, whatever your jam is. And then you let them take out, you set rules. So my idea was to set the rule of at the end of the year, or at any time, maybe every six months, they can rebalance their portfolio and they can take out half the profits. I love that. So they have a motivation.

Starting point is 00:59:56 Half stays in, half comes out, they can spend it on whatever they want. The other, and if they're stuck, they can't take anything until they catch up. So they got to learn like hedge fund managers. They got to do the make good. And this would be like an incredible product. So if there is somebody out here who's a fintech founder, I will partner with them and incubate this company. any kids investment club.com. Go ahead and sign up.

Starting point is 01:00:19 I haven't done anything yet, but I'm going to do it this summer. I'm going to do the first one where I, maybe you'll come on with me. We'll do it as a live show. Oh, for sure. No, I love, I love kids because your kids will be doing it in eight years or something. But to your point, how inspired did you get? What was the first thing you said? Was it a startup book or was something else?

Starting point is 01:00:35 So for me, it was investing in stocks, getting interested in business, started read books about it. I was the only kid in middle school reading the journal in print because I was so cool. I was the coolest kid in middle school, as you can tell. And then I found a book called Eft startups at the Corvallus Public Library. Oh, my friend Phil Kaplan's book. Exactly. And I saw Phil this weekend at my friend Nick Jurek his wedding.

Starting point is 01:00:57 He's one of my best friends, Paul Kaplan. I'll have him on the show. He ran, can we say his old website on the show? Foxcompanty.com. Classic. Yes. And I read his book and I was blown away by the idea that you could do business, but silly business. And I was like, perfect.

Starting point is 01:01:14 This is business, but without. all the old fudgy rules. I was reading like, you know, bank earnings. And then all of a sudden, you read F companies about the 2000.com. Boom.

Starting point is 01:01:23 You're like, that's where I want to be. And so I was going to go into economics and go to Wall Street and do banking for tech companies, but I ended up with a philosophy degree and now I'm here. So yes,

Starting point is 01:01:32 this is back to Jason's point about not being politically correct. I think some of the language hasn't aged perfectly, but it is a wild and good read. I cannot recommend it highly enough. Yeah. And by the way,

Starting point is 01:01:45 uh, breaking, breaking news story here on the Zoom. Somebody just sent me a picture of you when you got the book. Here you are. Michael P. Keaton. Alex P. Keaton.

Starting point is 01:01:58 There you are. You remember family ties? There you are. Full head of hair. Great hair back then. Yeah, no. I used to be curly and lovely. And then I don't know.

Starting point is 01:02:09 My genetics reared their head. Literally. That's going to get so. Sheared my head, I guess. It's a good look. Anyway, I think it explains a lot. You have found your tribe here on this week. In startups, hey, tomorrow we're going to do another live show.

Starting point is 01:02:22 We'll have the Twist 500. Yes. Today, I would like to nominate both the Japanese and Chinese companies to go into the Twist 500 under LLMs. Any objections? Oh, zero. Zero objections. Okay. So we're adding those two today.

Starting point is 01:02:35 So producers, please add them. And we talked about, do we talk about any other startups today that we should consider? I don't think we talked about other startups to consider today. we do have a number of other entries. We also have two others that I'm going to keep under wraps. Okay. Coming in tomorrow that we're going to add and talk about. We could add built,

Starting point is 01:02:53 but I don't think either one of us are, I would, I decline to choose them. I, they have to be nominated because this is a $3 billion free IPO company. So the Twist 500, you know,

Starting point is 01:03:07 they're just, they're very significant. I'm going to nominate them. They're going on. Yeah. And if they come out in flames, you have to give $5 to the local cat and dog shelter. The idea is like they're worth monitoring.

Starting point is 01:03:19 These are companies that it's worth, this is a story worth monitoring. You would put we work in the Twist 500 before they went public too, even though it might have been a train wreck, you probably would have put, we definitely would have put Theranos in, right, to monitor that. Well, I mean, for sure. So much at stake, right?

Starting point is 01:03:34 I guess that's true. We're not endorsing them as here are the 500 startups that we think have the highest chance of delivering the best IRR to their backers. It's because some of those companies are very quiet and less, conversation driving. So this is visibility and importance, if you will, in the conversation and the market. So, okay, yeah, Bill fits that.

Starting point is 01:03:50 Yeah, worth tracking, right? Like, notable, might be the word. Like, yeah, doesn't mean we agree with, we're endorsing everything they do, but we're going to monitor them. And you, I think we'll have the twist 500.com domain up shortly. You can go to, what is the domain name now for signing up for the newsletter? Ticker dot this week is.

Starting point is 01:04:10 Yep. And I'm putting links to. the database of the Twist 500 in every issue that goes out. So if you get that newsletter and if you don't do it, it's free. You can get to it very easily and we'll have a better URL for all of that very soon. Hopefully this week. All right. Let's take one question from the audience as we wrap here.

Starting point is 01:04:27 Any other news stories I think we can just put into tomorrow's show? What do you see as the biggest challenges around the EU's AI Act? Will the uncertainty kneecap startups? Will this be a repeat of GDPR's impact on privacy laws from Christopher Wiseman, who's watching the show live on LinkedIn. So we are coming to you live on LinkedIn. Salute. What do you think about the,

Starting point is 01:04:49 we haven't taken apart that regulation here on the show, but knowing what I know about it, this regulation and pre-regulation of the industry is concerning to me. I think we are way too early for regulation. I might be in the minority of this, but what do you have thoughts generally? No, no, I don't think you're wrong at all.

Starting point is 01:05:10 What I find encouraging, because I do want there to be a third AI tent pole somewhere, thinking about China and India being smudged up together, being one, the U.S. is another. I think it'd be great if there was a couple of European champions in the conversation. The thing that has me heartened about the EU AI regulation is that the Mistral team, if I recall correctly, was involved in the crafting of the final set of regulations that are put together.

Starting point is 01:05:38 So they're listening to industry and not just industry, but the current AI champion of Europe, if you will. And so that's very encouraging. And I contrast that with what we're seeing in California when they're trying to set essentially a speed limit on model size, which I don't think is the right way to approach this at all. I don't know what's got we know. Well, to your point earlier in the show, didn't you say around the show? Like, everybody's making smaller models that are more efficient and you can string together

Starting point is 01:06:02 a hundred models of like a small size and then you would have routed around this rule. Well, that's one way to go about it for sure. but it's an unnecessary inefficiency, right? Like, I mean, it's kind of like deciding that cars, which are brand new, can't go over seven miles an hour because the horses are in danger. Well, the horses are going away. So that to me is very soon.

Starting point is 01:06:21 That's a really good analogy, right? Thank you. Look at us. On the show. The EU has me less worried than California, which is a hilarious statement about where we are today. I just think that AI engenders more dumerism than is reasonable, and climate change does not engender enough.

Starting point is 01:06:37 And so I think we're freaking out about the wrong thing. And we should build awesome models, advanced technology quickly because we all might need to live in the cloud one day because there won't be any land left. We definitely, you know, I had this discussion with Freeberg on the show, you know, to try to just get from him like on all in, like, just putting politics aside because I know it's like supercharged. Our ocean temperatures going up in recorded history. Yeah, big time. are severe weather events happening at a more frequent basis in recorded history? Absolutely. Okay.

Starting point is 01:07:14 Is the amount of carbon in the environment in recorded history, forget about even doing the previous carbon dating, just in modern? Is that going up? And it's like, yeah, it's, well, we're starting to even it out. We're actually kind of getting to less increasing. Great. So, you know, we just put it all together. I remember 20 years ago I was talking to Elon about this issue.

Starting point is 01:07:33 and he just said, you know what, Jason, this is a stupid experiment to run because we have one planet. So why would you, if it's a 1% chance, if it's a 0.1% chance, you would never run that type of experiment. So I just keep that in mind. This is a first principal thinker extraordinaire, you know, and he kind of, you know, did a good job with the EVs and backing up the biosphere to Mars. Oh, he does. He does my two favorite things. Yeah. He makes, he's getting as close to self-driving.

Starting point is 01:08:06 Yeah. And he makes big rockets as a science fiction nerd. That's my jam. I'll take a Starbase for a launch. I went to the first Starbase lunch and I sat next to him in the control room. And when I say that thing, shaped, I mean, we were miles away from it. I believe it. It shook the, it shook you through your core.

Starting point is 01:08:25 You could feel the vibration in your body. It was nuts. And I've been inside the starship. like the it is cavernous you could fit 300 people inside of it you could literally it's like taking a giant airplane to the other side of the planet so excited it's so exciting do you want to go to space interestingly enough uh i am going to go to space uh at some point with my friend so and a couple other friends so i i'm waiting for it to be super safe i have to get buy in from my three daughters and And I talked to my friend about it. And at some point, I think we're going to go up. I can lose enough weight. We're going to do a guy's trip.

Starting point is 01:09:07 I'll lose enough weight to fit in your backpack. Exactly. I don't think you get to bring a backpack. I think they can bring a word. Because my spouse thinks I'm nuts for wanting to go to space. But to me, it's like absolutely the next thing. Let's go. Totally.

Starting point is 01:09:19 I mean, come on, please. To not want to leave the planet Earth if you had the opportunity to is crazy. And I think in our lifetime, I can see in 30, 40, 50 years. it being accessible to people in the modern, you know, uh, world, the developed world. People with an above average salary will be able to afford to do this as a bucket list. Yes. If you do take me though to Starbase, just keep a little bit of duct tape in your advice. If politics ever come up, just slap it over me.

Starting point is 01:09:48 Uh, listen, with regard to politics, we can talk about it here. You and I are actually perfectly aligned on this because we're both first principal thinkers who were common sense thinkers. And like, I can't wait for this election to be over. This is like, I don't know if you saw, I was checking out judge report and they linked to an Axiotea on it. So I guess this is, I'll give Pew Data the credit for this. Sure.

Starting point is 01:10:13 The number of people, the percentage of people who hate both candidates is now above 25%. I saw your tweet about this. Double haters, they call them. I love it. It's like the Chappelle show and the haters of all. I have totally on the haters boss That's sketch

Starting point is 01:10:30 They nasty You are the nastiest Pampa ever saw Dave Shepal The DeVs show Remains to this day Underrated Which is hard

Starting point is 01:10:39 Given how much phrase It was given It's so great Well let's call it there And we'll be back to A lot more We went crazy We went crazy

Starting point is 01:10:45 Long show Everybody Do us a favor If you like the show Just email like a friend or two Like maybe just one Just email one friend And say

Starting point is 01:10:54 Check out Alex and Jason Breaking down the news Like, this really will catch you up and get you thinking about the future. That's all I ask. Just send it to one friend. That's it. Send the link to one friend and say, check it out. Three days a week, you're going to start getting your news.

Starting point is 01:11:07 So this is the place. Get your subscription tight. Keep it right. Alex, you're awesome. X.com slash Alex, cautiousoptimism. com. Dot news. Oh, cautious optimism.

Starting point is 01:11:19 Dot news. Yes. I have a fancy. I have my own URL too, Jason. It's not just the kids investment club. I like that. There you go. We'll see you all next time.

Starting point is 01:11:27 Thank you.

This Week in Startups - Woke Google Maps, how Wells Fargo is losing money on fintech, and the global AI race | E1967

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