This Week in Startups - YC brings on Garry Tan as President, Apple's AR plans, Bored Apes at the VMAs | E1547

Episode Date: August 30, 2022

First up, J+M break down YC announcing Garry Tan as its new President and CEO, and what this means for the industry. (11:44) Then, they break down Apple potentially showing its card for its AR goggles name (37:16), and they wrap with some commentary on Eminem and Snoop Dogg performing as their Bored Apes at the VMAs. (58:20) (0:00) J+M tee up today's topics (2:12) Catching up on the weekend (10:18) LinkedIn Marketing -  Get a $100 LinkedIn ad credit at https://linkedin.com/thisweekinstartups (11:44) Garry Tan is stepping back from Initialized to become YC's new CEO and President (25:05) TripActions - Go to https://tripactions.com/twist and get a $500 Amazon gift card after making your first travel booking OR paying off your first $1000 of liquid spend (26:34) Jason explains "no conflict, no interest" (35:46) WorkOS - Go to https://workos.com to learn how to make your app enterprise-ready. (37:16) Quick Jay Trading update, Apple files trademarks for potential AR goggles name (58:20) Eminem and Snoop Dogg performed as their Bored Apes over the weekend at the MTV VMAs

Hey, everybody, welcome back. It's Monday. We have big murder Monday energy today. Wow. Big news coming out of Y Combinator. I'm going to break down why Gary Tan is going to do great and initialize is going to do great as he becomes the fourth, I believe, CEO and president of Y Combinator and why maybe some VCs hate on Y Combinator a bit. And, you know, spoiler alerts because they're jelly. As always, such a great. It's going to be a great breakdown, though. Like, this is. the insight you want about this news and what it actually means for the venture industry and startups at large. Super great conversation. Then we're going to talk about some dishy Apple trademark filings when things might get a little real in the virtual reality. I might even make a J-trade. Who knows? Anything's possible. The glasses are coming on. Grandpa glasses at the helm. The specs are out. The specs are out. You got me. And then we're going to wrap with some thoughts on Eminem and Snoop,

Grifting the board abe yacht club on the MTV is absolutely gross. We'll break it down for you. Oh, my Lord. We meant to have a five-minute dunk session, and I'm just saying we got a little fired up about this one. It is going to be a great show. Stick with us. It's punk rock.

Punk rock! This Week in Startups is brought to you by LinkedIn Marketing. To redeem a free $100 LinkedIn ad credit and launch your first campaign, go to LinkedIn.com slash this week in startups. Tripactions was built to help businesses scale without travel and expenses being a pain point. It's the only all-in-one travel, corporate card, and expense management solution. Go to tripactions.com slash twist to sign up for free and get a $500 Amazon gift card after making your first travel booking or paying off your first $1,000 of liquid spend. And WorkOS is a developer platform to make your app enterprise ready.

With a few simple APIs, you can immediately add common enterprise features like single sign-on, multifactor authentication, and more. Go to workOS.com to learn how to make your app enterprise ready. Hey, Molly, happy Monday. How are you? How was your weekend? Uh, so good. So good.

So busy. Two brunches, not one, but two brunches. One all day brunch. I had an all day brunch situation. Wow. It was a lovely. Was it at a restaurant? or at a home?

I had one brunch at a restaurant and then I hosted a brunch that went to a brunch. All right. So let me, you know, it's very important to me. Brunch is my favorite,

one of my favorite meals, you know, for a long time, one's my favorite. What are you, what's your favorite brunch item? Let's go in the brunch draft here. What do you like?

Are you an eggs Florentine type? I'm a frittata. Frittata all the way. Frittata. Yep. I love to make, because a frittata like looks so fancy and you make it in the cast iron.

and it comes out and you put the little garnish on, like some chives or some parsley, a little fresh pursuit on top. Yeah, I don't mess around. You got to boil some potatoes, right? Do that right with unskinned potatoes and then throw those in or no? I'll do like a thin slice.

They'll usually, and then what I'll do is saute them in the cast iron. It's a one pan situation. So you like soften and saute your potato slices in the cast iron. With little butter or something. And then you eventually pour in the egg on top of it all. I like a potato. potato, asparagus, prosciutto with some goat cheese and chives. I'm a big fan of that one.

Wow. Yeah, I love, what's that? Munchiego. It's like a whole like, manchego. Excellent. Oh, man, when you were in Spain and that manchego and that's a chave. I like the shave of cheese on top and a manchego is perfect for that. Now, do you serve in the cast iron, you flip it over and serve it upside down?

I serve in the cast iron. Yeah, cast iron is like a more romantic kind of serving thing, you know. It's like so pretty. And then the key to my fruit salad is mint, fresh mint. Always great. Yeah, got to have that. Do you put a little juice on it? Your fruit salad?

You pour something on lemon or something. Or orange juice. Or some mango juice is a really good. Mm-hmm. A good punch-up for the fruit salad. You're not using the filler fruit, are you? You're not like putting a bunch of cantalope and melon in there. Gross.

I hate melancholy. Blackberries. You know some blueberries. Yeah. I have a friend who was cheap and he would always use the filler fruit. And I'm like, this thing's 90% filler. That's disgusting. And what's, you know, it's like all these melons.

I like a good. melon in the summer, but I like to eat it in a slice. My fruit salad, like, let's keep the melon silver fruit too, you know. Like, I can have a banana anytime. I don't know. I cannot point to a time in my life, I think, when I've ever actually purchased melon. Like, I don't, that's not a thing you buy in sort of people.

If it's very fresh and it's summer, you're out by the pool, you slice it, you eat it like a piece of watermelon can be delicious. Yeah. I'm just saying, when you're doing a fruit salad, you put it in a nice cup, it's kind of be some high quality, expensive stuff in there. I want a blackberry. Strawberry, blackberry, banana. Okay, a little banana's okay, but don't fill me up on a bananas.

No, just like a little. It's true. Just a little. Yeah. Anyway, I'm doing this week. Anyway, a brunch to hell out of the weekend. I love, love a good brunch. I have just been, you know, I love that eggs Benedict.

You know, I love that sauce and everything. But I always freestyle it. I'm like, do you have salmon? Do you have spinach? Okay, so I say, give me to the salmon and the spinach. Because I think of the Florenti. This egg Benedict with the ham. So good.

Then there's a. salmon Benedict and then there's Florentine with the spinach. I say, give me the Florentine and then put a little salmon on it too. And I just toast that English muffin up. I'll just kill that every time. Hey, do you want to enable me with a purchase idea that I'm on the fence about? What are you on the fence? I found, I know, I know, I know, we're a little off the rails, but we got to, we got to, you know, okay. Enter Mondays, a little Monday, then. In my house, I'm now almost two years in. In my house, I found the remains of what used to be the pool ladder. And the steps of the ladder are beautiful.

Like they're from the 60s. They have these starfish on the ends, really pretty carving. They're super cool. And I really want to make them into something like a table. So I went shopping with a friend this weekend to this place that sells like live edge wood pieces. And basically it was like, okay, I could buy this piece of maple with like the cool cracks in it, have it cut in half, make two benches with like two steps on each bench as supports. Nice. And then they could be these like beautiful plant benches.

Yeah. Which is awesome and would cost like a thousand dollars. And I was like, am I really going to spend a thousand dollars on benches for plants? Well, wait, what would cost the thousand bucks? The piece of wood is high end? To just have them custom made. Oh, the person who would do it for you. Yeah.

You would have a person do you not going to do it yourself. So you'd be hiring a crafts person. Yes. Do this. Yes. So it's not that much all in a thousand dollars, but it's also like, this is benches. Yeah, I would put it up against what you, to order. something so unique as a piece of art.

And then I would look at the delta. So if you were ordering something high quality, like two benches, it's got to be two and three hundred bucks, right, for a decent one. For sure. Each. So now, right, it's 600. So the delta between that and what you're getting is 400. So we have to ask yourself, this is why I would do is.

If this is going to be a signature piece in whatever area it is, is it worth the plus 400? I think you earned it, Molly. I'm going to, my judgment, official judgment for excessive spending. For excessive spending. Exactly. I was like, you're going to enable me, aren't you? I'm going to allow.

chat. The whole chat is like DIY and I was like, yeah, I could probably buy this. But the piece of wood is $250. So if I screw it up trying to DIY it, chat, which I would, it's not going to, yeah. I like the idea. I like the idea you're supporting your local craftspeople. I'm going to go ahead and set up. Okay. It's okay. Little trickle down is okay. I'm going to do it. You earned it. I mean, it's not like you're going out to brunch. Put it this way. You do two brunches at home. You're saving $200 each time. So if this makes you entertain a little bit more at You get two extra brunches in a lifetime of paid for itself. I did go out to brunches.

I would have to runch while it's a hell of expensive to go out. I will say it's also not worth it. Like brunch is not a meal I like to go out for you. Wait in line. You spend too much money when you cook a better meal at home. That problem is if there's a great brunch place, there's a place called Bubbies in New York, very famous in Tribeca. And luckily I had an end, but my lord, there would be a line around the block. I happen to know somebody, but it was just like, am I really on a Sunday getting in line for half an hour, an hour to eat French To eat French To

or whatever the hell we're getting. And the answer was... I don't know. It was just like wheat and syrup. Like, ugh. It just irritates me because I can cook a better brunch than I can get at a restaurant after waiting for an hour and then having all these like hipsters screaming all around me. I lived in Chelsea and there was the Empire Diner where they would make me a huge egg omelet.

I would always do a chew cheese omelet. I would get like cheddar and Swiss. Oh, my lord. If you put cheddar and Swiss in a giant omelet, it is delicious. And I always read my New York Times. I bring my dog with my dog, Toro, rest in peace, my favorite famous bulldog. I would give him half the omelet. And then other times I go to pastis, I order steak and eggs for, at the time, probably

20 bucks, 18 bucks, like a little breakfast steak at eggs. And then I'd order two, one in it to go container, one regular. And I would chop up the raw one and I'd give it to him. Oh. And we need a steak and eggs for breakfast. So that was my go-to moves until one guy, terrible. I was like doing this with my egg, my thing. And the guy next to me, his wife, girlfriend, whatever, is like, hey, you should get that

for our dog because, you know, people would have their dogs along the fences. the guy complained to the waiter that I had done this and the waiter came to listen, you can't feed your dog. I was like, well, he's done. He's like, yeah, just in the future,

you can't feed your dog, just so the other guy could hear it. Because he said, like, my dog eating it was making his dog go crazy. And I was like, dude, we both have our dogs that past these, like, are you like, come on.

Now, Nick and I are going to be team brunch. Yeah, we're team brunch. You guys really are defending brunch to the death. I mean, listen, Sunday was basically like, ice coffee, come on. brunch. Like, it was an all day mimosa situation, but at my house.

It's nice. It's nice to host your friends. All right. Brunch is not the worst. It's not the best. I love a great brunch. I like a two or three hour brunch. I get the New York Times. I get some friends.

You know, it's great. Life is good. I like sitting outside. I think the TLDR here is that we're saying life is good. Life is good. Enjoy your life. Okay, listen, we're eight minutes in. We haven't even discussed the first story.

Hey, Tom Eschbacher is here with us again. He's a senior sales manager at LinkedIn Marketing Solutions. And we're talking about their amazing report today in startup marketing, as well as how to use LinkedIn to grow your startup. What are some tactical things? Not big picture strategy. I'm talking tactics that founders can do today to figure out product market fit. One of the big tactics we see here is amplifying organic posting with paid advertising. You consider a startup that raises a seed round. They post a news on their LinkedIn page and see a bunch of likes, clicks, and follows come in.

They follow that then with some updates about product. And they see continued trends. with, for instance, HR benefit managers at tech companies that have fewer than 500 employees. That's a signal and it becomes important to then get a larger sample. And to increase confidence, we've made it super easy to identify which audiences are engaging with your organic content, your LinkedIn company page, your website, and then extend reach into those segments with our best in class B2B ad targeting. So for early stage startups who amplify organic with paid, we see a 13-7. X lift in unique reach.

And those are meaningful insights to help inform product and go to market strategies. Such a great strategy. Head to LinkedIn.com, such this week in startups and get the report now so you have an edge on your competitors. And as a little pot sweetener, $100 off your first marketing campaign thanks to Tom and the team at LinkedIn. Go get that report and get the hundy. Big news today.

I saw in my fee when I woke up. A new CEO of YC friend of this pod, Gary Tan. We'll certainly have them on. but Y Combinator has named, I guess, their fourth president, Gary Tan. Fill us in on what's going on here. Yeah, this is a big deal. It's a big deal partly because, yes, YC, of course, incredibly influential. And, you know, I've seen some tweets to the effect that like any drift that people

had maybe been sensing with YC, there have been some complaints. There always are complaints over the years that it's like the batches are too big or this or that or that or whatever. But people seem very excited that Gary Tan is going to reinvigorate it in as much as it even needs it. But also it's a big deal because he is stepping away from the VC fund that he co-founded initialized capital, which seems like a pretty big deal that I have questions for you about. Sure. I think, interestingly, the Forbes article about this move did not mention anything about YC's former CEO or about Tan becoming CEO. It only sort of mentioned that he would be taking over as

president, but then he tweeted like, oh no, yes, I will be CEO. He also, I guess, got his start there. So it's sort of a return to a place that he is comfortable with and super excited about. Also worth noting that just in December of 2021, initialized, announced they'd raise $700 million for two new funds. And then this morning, so lots happening here. And then that firm announced that Jen Wolf and Brett Gibson will become the new managing partners and lead the firm. Okay.

A lot to digest here. Yeah. I've come to the conclusion, you know, people complaining about Ycombin. Generally is people being jealous of the fact that Y Combinator gets to invest at a $2 million valuation and they get first bite of the Apple with a lot of great startups. So if you're a VC, somebody controlling the flow of startups, you know, you might get a little jealous of it. Sure.

People say this stuff about us. Exactly. So, you know, and that's part of what's informed it is when you look at how hard it, we've done 26 classes of our accelerator and looking at it, you know, having done it. And I wouldn't, we're nowhere near a Y Combinator competitor. Our class is a very like bespoke thing that's just for my enjoyment and the enjoyment of our team. So we only have seven people per class. Like it's very bespoke. And we do it because we love founders and supporting them. And we did take a lot of, we stole a lot of notes from Techstars and Ycombinator. And Tech stars and Ycombinators started at the same time. They both get equal credit for this revolution.

And really, if you look at Bill Gross, who did Idealab, he was sort of the grandfather of all of this. But he originated the ideas. I think the big innovation for Techstar. and for Paul Graham's Ycombinator, David Cohen's tech stars, was they didn't come up with the ideas and they took a very small percentage of it. When Bill Gross ran Idealab, they actually tried to recruit me to run a company and they were like, we'll give you 5% of the company. We own 80% and then the investors own 15%. You know, it's like a whole different world 20 years ago when people were doing this startup incubator model. Yeah. So you give him, I give Paul Graham a lot credit. He's in it for the right reasons, too. You see Paul Graham is like, I know he went off and raised

his kids for a little bit, I guess, and handed over Y Combinator, but he's suddenly very involved again. I think he's even in the Bay Area doing meetings constantly. So I applaud Paul's. Interesting, yeah. You know, resiliency here and just dedication to the brand he created. And then the totality of the number of startups we've done is essentially the size of but one of the two classes a year that they do. So, you know, we're in totally different transfer. We've had people go from one to the other. People come to ours, go there. People go to Ycomonator, come to ours. So I don't see them at competition at all. Although, like, people have said to us, like, hey, should I go to yours or YCs? And I was like, you know, YCs got a much more well-known brand.

Ours is more intimate. Flip a coin. We'll go to both. We'll see on the other side, whichever when you graduate from, we'll consider investing. But it has tweaked people because Paul has always been anti-VC overreach. I would say he's anti-VC, but he has been very vocal about, hey, VCs are the enemy, maintain control of your company, because he had a bad experience with VCs and he's been very upfront about that. And, you know, listen, I've been critical of VCs too. You know, on their worst days, you know, they have been not supportive. So the other thing is they've also, YC has been at times, not just anti-investor, but maybe a little, I say the most cynical thing I've heard people say is that they manipulate investors. And so how do you do that? Well, you have a

demo day. You put high pressure tactics on people. You have to sign or the valuations going up. They teach founders how to manipulate investors. That's the back channel for the since inception, the critique. And then every year you'd have some VC's, I'm not going to go to demo a day anymore, blah, blah, blah. And, you know, there is some truth to the fact that there are techniques that Y Combinator teaches of you have to put pressure on people, the handshake deal. Once they give you a handshake, have them sign.

Don't let anybody put in more than 50K. So the whole concept of a party round and these high valuations and the safe note, the whole arc of Y Combinator has been to empower Founder. founders and to take power away from investors. That has tweaked investors. Yeah. Some might argue it went too far. Some might argue it didn't go far enough that the industry was, you know, too anti-founder in the beginning. So it's a pendulum. I really don't care either way. You know, when we want to get on a cap table, we provide so much value. Founders 96 times out of 100 make room for us because we have demonstrated in the field that we provide massive value. So the people who generally complain about this are VCs,

who don't provide enough value. And they can easily be replaced in that early stage with a dentist putting in 50K or 250K. And sure enough, like I told the story before, I'm at Ycomitian. I'm asking this kid what he does. He's like, I'm an angel investor. I'm like, can I ask how old he? He had introduced himself to me.

You know, oh, nice things to say about my book or whatever. And I was like, oh, that's very nice. I said, what do you do? He's, oh, my dad's a dentist. He's giving me like a half million dollars to put to work every year. I'm, you know, I'm doing 10 investments of 50K each or whatever. And I was like, that's what VCs are up against. Dentists flying in from Boise.

right to you know take if these are a million dollar rounds take five percent of the rounds you get 20 of them you don't need a VC yeah and if the VC wants to negotiate a board seat information rights or whatever hey you can just do a party round and neuter every VC right so that's the totality of the criticism I think yeah and you're not going to hear any later this week we're going to actually have Sebastian Malibion to talk about the power law and he goes through a bunch of this history of the development of YC and then this entire idea that like there's lots of other places to get money and founders might just be like, no, thank you. We don't want this. And when in fact, you know, of course, the argument on the other side is that VCs could provide you with really good advice or a support

network or, you know, people to hire or, you know, whatever. And if you don't like it, Molly, go provide more value. And here's the hard truth. You see how much work Jackie puts into that accelerator. Yeah. Our managing director runs the accelerator for us. You see 16 weeks. you see 25 sessions. I mean, the amount of work that goes into that. And personal introductions to hundreds of BCs. We basically, every single person, we write out a handcrafted personal introduction on average to 50 to 100 investors at the end. We introduce the companies to maybe 750, either 500 people. Because we do maybe 15 to 25 investors come every week to meet the companies. You know, over 12 weeks. Yeah, it's like 500, right?

Anyway, you put all this together. We have like two online demo days at the end. You put all this together. YC does a ton of work, like a massive amount of work. They earn their 7% as far as I'm concerned. If you don't like it, compete and make a competing product. Which Sequoia made a product. That's now their accelerator.

It's, you know, it comes after. It's a million dollars. It's a million dollars, right? And it's at whatever the prevailing valuation is. And it's a small number of companies, but they do like their own two or three week training course. So it's not what Y Combinator does or techs or what we do. It's sort of like a graduate school that comes after it or a PA. I don't know what you would call it. But anyway, create new products for founders and compete. We created a new one called Founder University for people

who are not yet, you know, incorporated. That's how you compete, not complaining. So the investors who complain about YC like, just shut up and just make a better product. If you can't make a better product, well, then just go to YCs. Then just, you know, the price you pay is you have to pay 50% higher valuation because YACC has done a better job than you have and they work harder. Yeah. That's where I've got to do with it. Everybody complains about the winners. So let's talk about what this means for initialized. So, and the history here is that Gary Tan, as I mentioned, and Alexis Ohanian previously were at YC, they started investing as initialized while they were still there. And then eventually spun out this firm, which, you know, less than a year ago, I guess, December

for 2021 raised $700 million. How does that work when someone who is a co-founder and a managing partner leaves a firm? Alexis, of course, already left. And is that 6-67 or 677-7? 7-76, I think.

He started his own fund. He started his own fund. It's climate-heavy. Alexis, come on the show. Yeah, he's a friend of the show. He's been on a couple times. So what I would say is when you look at, they were two big personalities, right?

And I think, I don't know what the split up was exactly, but I think they're both proud of the work they did initialize, and they both went on to do. I think, you know, it seemed like to me, Alexis wanted, had his own vision for what he wanted to do, and they both had access to capital. And so sometimes it's better to be a solo dolo than it is to, you know, be in partnership and do the, you know, Batman Robin thing or whatever, Justice League.

So I, that's what I think happened there. Now, this is amazing for initialized LPs. Now you'd say, why? Why would it be great to lose your leader? Yes. So let's say you were a basketball team and Steve Kerr left. And Steve Kerr left to become the coach of the greatest, you know, college team, you know, with the greatest recruits. I don't know if that's Duke or Georgetown or whoever.

Well, now you've got a funnel of that great talent to the team. Right. And so that's what's happening here. Gary Tan is going to be able to whisper to the initialized founders and look over here. And look over here. And do the interest. Now, this is the other thing. No conflict, no interest.

There has been this thing that like YC is a level playing field and the VCs who come to demo day. Everybody gets first shot at the startups. Completely false. The truth is, I know this because I've seen it up close and personal. The best companies don't go to demo day. The best companies close their rounds before Demo Day. Now, Wycomber says, please don't close your rounds before Demo Day.

Please don't start raising funding until Demo Day. If you're a top company and you're in Week 2 and you meet Mark and Dries and a rule of both and they make you an offer, are you not taking it? Of course you're taking it. So the whole name of the game is to meet the YC founders before Demo Day. Who gets to do that? Who knows who's in it? The people in the orbit of YC. So it's been known for a long time that YC alumni, you know, founders, except.

said it like an Alexis or whoever, Justin Kahn, whoever, they get first shot at these companies. And, you know, Ron Conway, who's worked harder than any angel in the history of Silicon Valley, gets first shot at these companies. And they'll clay or, you know, Sam Walthman famously. So they cherry pick them. They'll say they don't. But, you know, of course they do. No conflict, no interest. And life is not fair. And certainly getting an edge in investing is the whole point of the game. So if you're going to Y Combinator, you're basically playing poker where the four aces have been taken out of the deck. So if there are 52 cards, I would say the top 5% of the companies, 10% of the companies have already been picked off. So if you're okay, sorting through the rest as your strategy, fine, but some people, that's why they also don't go.

It's because they feel like they've been cherry pick. Gary Tan will be able to cherry pick, as he should be able to. The great companies for initialized and he's an LP and initialized and he'll have his carry still. So it's freaking fantastic those LPs. If I was an LPI, I would be overjoyed. This would be as if imagine there was a position that was you're in charge of recruiting for the top 30 colleges. That's more of the analogy.

It's not even like one college. So he gets to see the sorting and who gets accepted and who did really well and then who progresses really well. And then all the people running the pods over there, he gets to read the reports of who the top companies are in each pod. And then he gets to say, introduce me the top, you know, if there's 200 people per class and there are 10 pods of 20. I'm just making those numbers up.

I don't know exactly how they, they separate the pods. You just say, yes, send me the, I want to meet on Tuesday with the top two from each pod. I want to meet those 40 on Monday and Tuesday. And then just pick up the phone and or he just tells them in the meeting, you should meet my partners over here. Would you like an intro? Great. So no conflict, no interest. Congrats, Gary.

I'm so glad that we're talking about this news on this show because that is the kind of like sort of context and awareness that is so fascinating. You can only get this by being a level to write. Exactly. Like, this is like there's the news headline and then there's the what this really means for this entire ecosystem. Yeah. That makes it an even bigger news headline. Listen, I have booked so many work trips in my day. I got to meet LPs.

I got to do sales. I got to meet founders, all that great stuff. And it's always a major headache. Think about all the time you're wasting, especially when you have a team and people got to do their receipts. They've got to get the approved vendors. There's reconciliations. It's absolutely exhausting. And it creates a lot of drama and tension inside your organization, doesn't it?

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What does this mean? if people who are taking some moral high ground are saying, well, wouldn't it be more fair if like nobody knew the companies and nobody had access to them before demo day? Like, sure. You know it would also be really fair? If everybody made the same salary in society. Yeah. Teachers, doctors, CEOs, cops, teachers.

Everybody makes the same salary, right? And then nobody can, every year, everybody's salary goes up 6%. And the more years you work, the more you get. And everybody has to come in at 9 and leave. or five. Like, that's not how a capitalist society works. A capitalist society works by you finding an edge and exploiting the edge. Welcome to reality, people. It's about edge. And if you're not getting an edge, then you're getting cut. Period, full stop. I'm always thinking, how do I sharpen this blade? How do I get another blade? How do I put a pistol in my back pocket?

How do I put a brass knuckles in my pocket? How do I put an extra knife in my ankle? I got weapons everywhere. Under this desk, I got a shotgun, I got a bat by the door. I'm going to find a way to win. And guess what? That's what you're up against. You're coming into this industry, everybody's got an edge. Everybody's looking to knife everybody to get that equity. And the earlier you get in, the more work it is and the more risk you take. And all these lazy VCs, you know what they want to do? They want to go to the market. And they want to have all the apples sorted. You know, you ever see like a, In Japan, where they sell a perfect pair for six bucks, and it's like in a little case,

and it's got a box around it and some cellophane wrap. You ever see that? That's what VCs want to do. They want somebody to hand them the perfect pair. They don't pay six, seven bucks for it. They want to overpay. You know what they don't want to do? They don't want to go out and prune the pear trees.

They don't want to dig up the stumps and plant another one. They don't want to put fertilizer and get their hands in the shit. They don't want to do that. They don't want to be out there on a cold, afternoon picking those apples and picking those pairs, preparing them for market. They don't want to do any of that. They don't want to fight the bugs. They don't want to fight the crows.

You just want to go to the market and just, oh, I just want to take that pair. And they want to go off to Italy or Aspen. So if you don't want to do any work, you don't want to put your hands in the dirt, then you're paying seven bucks for the pair. Now, us, we do it by the bushel. We put a lot of work in. We get seven pairs in that bushel, and we walk out with seven pairs for the price of one. Right?

Now, that means some of them might be dented or bruised or imperfect, and we've got to work with them to try to make something out of this, right? It's a little more raw. And what combinator's got the orchard? These idiots in Silicon Valley allow Paul Graham to take over the entire orchard. They let him. And they never came and said, like, I think that's our orchard. He was just like, oh, you guys don't want to do any of this work?

I'll just, okay, I'll work the orchard. I'll plant all these trees. I'll make sure they're pruned. So, you know, and VCs seem to be fine with it. They raised a bigger fund. and they pay a higher price. And they get the apples a little more polished, a little more,

you know, refined. It's so interesting, too, and they make it harder. By the way, this Monday energy is amazing. It's amazing. This Monday action movie energy is my jam. I've been watching the X-Men series.

Also, I started watching the series industry. Oh, so you got a lot of the mind. And so industry is basically euphoria, meets billions. That's so funny because I started watching paper girls, which you recommended to me, which is like, Buffy the Vampire Slayer meets like

awesome time travel, sci-fi action. Yeah, and I watched like three episodes, and I was like, yeah, it's amazing. It's fantastic. It's perfect for me. But I might have to watch industry also just to get like... The amount of drugs... Get back to my murder energy.

The amount of drugs, sex, backstabbing and debauching, on the trade desk is like nothing I've ever seen. I've seen a lot. So it's like Wolf of Wall Street also? It's basically Wolf of Wall Street with, you know, people graduating from HBS, you know, in their first year as a banker in London. Yeah. And my lord, the amount of, I mean, they kind of make this an ironic joke, but the amount of drugs these bankers are doing and the range of drugs they're doing is insane.

Makes you feel great about our financial system, doesn't everybody? I mean, Keith Richard watched the show and he's like, pump the brakes, people. He thought, whoa, whoa, whoa. Yeah, it was like, Russell Brad was like, my God, you people are off the rails. It's a great show, though. But it does have me thinking of just, you know, and this is what I always try to do. I try to make new products, right? I'm constantly trying to make new products that help our founders.

and then if we do that, we, you know, we're preparing to go out with launch fund for. And we're actually going to do a 506C. So we're going to publicly raise our next fund. And I just approve the final deck. I got the bank account, set up the legal, all that stuff. We can talk about it on a VC Sunday school. Let's do it. Yeah.

And so we'll start the fundraising process. And, you know, we'll be raising it not exactly in public, but we will be able to say publicly, we're raising a fund. If you're interested in raising the fund, go here. Right. So you have to be a qualified purchaser or accredited investor. obviously. But I've been thinking about our advantage a lot and, you know, trying to sharpen our

blade and just be super competitive in terms of deal flow. And it really is about deal flow. And that's why people get so bent out of shape about Y Combinator. They have control. They're locking up deal flow. You know, and that's it. And to be clear, it's working. They've invested in over 3,500 companies.

They've got eight unicorns, I think. I mean, it's, they're just. More, way more than eight. I think they may have eight public companies now. Oh, really? Well, Dropbox is public. Airbnb is public. Those are the two.

Coinbase. Those three are the big three. Yeah. I think. Stripe will be. I mean, in the early days, it was very easy to criticize why commentant. And I said this too, like zero public companies. So let's pump the breaks on like how important Ycombinator is until, you know,

they get some companies and some numbers on the board. And they have. You can't have 3,500 companies in the game we play and not have some big words. Now, we have 350 portfolio companies. So we have but 10% of theirs. We're a 20% team. There are 250 person team. So the numbers actually track.

And I'm not trying to do that many. That would be too much for me because I want to actually meet the founders. Yeah. But, you know, that's the other thing I was going to say is that here you've got YC and they've locked up the early part. We're picking off good chunks of the early part. And then you have all these BC funds saying, okay, fine. that's fine. We'll just keep raising bigger and bigger and bigger funds and pay higher prices. But at some point, as, you know, I think they even talk about this in venture deals,

at some point when a fund gets big enough, it's just really hard. It's diminishing returns, literally, right? It's really, really hard to return the multiples that investors are expecting from VC and you start to see all these extra machinations like, okay, now we also invest in public markets or we have an evergreen fund or, you know, it's like trying to come up with ways to make the returns match the size of the fund. Yes. The, The ultimate example, a manifestation of this is SoftBank, right? They had such a large fund. We did a calculation either here on Olin.

I can't remember. But I think that had to put $100 billion to work on Olin, yeah, in five years. They did 50 months. So they put $2 billion to week a month. And I think they did it in the last. So you're talking about $500 million a week. And so that means if you're buying 20% of a company, the company's got to be worth $2.5 billion.

So they were taking companies that were worth $2.5 billion and suddenly anointing them. It was just a crazy strategy. It's massively distorting. It's just distorting to marketplaces. And then you get insane outliers like Adam Newman and we work because it's enabled by an amount of money that just like makes everything go off the rails. Yeah. Right. If you were to look at these as like race cars and stuff like that, like you can only drive the car so fast.

It needs to have the right brakes. It needs to have the right tires. You know, and if you try to take a rocket ship or a car, and you make it go too fast, the thing will come apart. You have to really be thoughtful about how fast these things can go before you, and that's product market fit is what I'm talking about, right? So you try to like spend money on marketing before you have product market fit. There's that classic leaky bucket syndrome.

So you got all these companies coming into the top of the bucket, but there's two big holes in the bucket. So you're pouring customers in and they're just pouring right out where you're losing half the customers and keeping half. Well, yeah, that bucket is really, and you know, depending on how often you're losing them if you're losing 50% a year, you've got to really spend a lot of money to keep that company afloat. We saw that, right? If you're building an enterprise app, you need to offer SSO. What is SSO? That single sign on. It is what it says it is. Basically, the ability for enterprise users to log into your app that their existing credentials. So if you work at a company, a big company,

you know that they have an identity provider. And you say to yourself, well, I can build that myself, I can write all that code and put it into my app. That's fine, but that's hard. And you're going to be duplicating a bunch of work, just like you might want to do payments, but you don't want to duplicate all that work. And then you have to maintain all those integrations in your app with every single identity provider your customers might use. And new ones are coming out. The specs change. And then your login breaks. You don't know it's broken. Yada, yada, yada. It is a ton of technical overhead. Well, this is why you need to check out WorkOS. It's basically Stripe for all those important enterprise features. You know how people

wanted to put payments into their products and it was arduous and painful and then Stripe came out and just drop a little code snippet in and you're done. That's what WorkOS does. Simple API plugins that let you move faster, spend less time on developers, and you don't have to worry about maintaining all those integrations. They don't just have SSOs. They also have APIs for multifactor authentication and much more. WorkOS.com is going to teach you how to do it. It's app enterprise ready. And if you want to learn more about their different integrations, just go to their podcast. It's the WorkLess podcast. or just search for WorkOS podcast in your podcast player.

Welcome to the This Week in Startups Family WorkOS. You know, speaking of getting outside of your zone, the J-trading portfolio has been absolutely demolished. Oh, you're not alone here, though. You're not alone. This is not a, you know, this is not a poor choices situation except for maybe the one. So speaking of which, Molly, getting outside your comfort zone, I have invested, looks like $540,000 in eight companies.

I'm down 32,000 minus 6% or so on the original investments. Biggest win, only gain, I think right now is Disney. And Warner Brothers, I'm down a bit. But again, I said I would take a 10-week, a 10, I'm sorry, 10-year approach to this. Zazlov owes me 9 grand. General Zazlov. General Zazlov. Wow.

Why don't we think of that last time we talked about this? Zod's love. Incredible. But I'm really happy with my bets. I actually have two that are up. My original bet in Amazon is up. It's green. But, you know, it's a sea of red now.

So this is looking like a reverse Christmas tree here. A lot of blood in the streets. But I've been thinking a lot about Apple. And Apple is having the iPhone 14 launch, I believe, in a week or two. And we also have some speculation about trademarks. And I have some thoughts on this that I'll bring up in a moment. But why don't you take us through some of the trademark speculation? You know, this is always like a great way to figure out what big companies are doing.

Sometimes they embed code in their app and these hackers find the new code. And the other way is trademarks are filings. And then the other way is hiring, big hiring. Yes, definitely. And I will say that the finding code is probably the most. You know, if you have to look at the most reliable indicators, finding code is probably number one. Hires is probably number two. Tradmarks, they file all the time as a just-in case.

However, there is some interesting reporting from Bloomberg about some trademarks that Apple filed that's now causing speculation that it might be getting close to a name for its mixed reality headset, which of course suggests it might be close to launching its mixed reality headset. So the filings in the U.K., U.S.EU, U.K., Canada, Australia, New Zealand, Saudi Arabia, Costa Rica, and Uruguay are for the names. This is so Apple. Reality 1. Reality Pro and Reality Processor. Now, earlier this year, trademark filings for the name Reality OS were also found to be linked to Apple. So this all sort of suggests that something in the frame, you know, something in the realm of reality. is what they are going to call this super secret project, which is expected to use VR and AR,

but nobody knows very much else about it. Like we keep, you know, having Mark German, right, from Bloomberg on to go through the rumors, but we're still solidly in rumor phase, but maybe getting closer. All right. Number one, why wouldn't Apple create a subsidy with,

Why would they do that? Why would they get these domain? Why would they get these trademarks? Well, it's obviously because that's what they're going to call this thing. But I have another question. Why wouldn't they create a subsidy? A subsidiary, I'm sorry, a subsidiary that was an LLC that nobody knew. Well, they did.

Hilariously, they did. These new trademarks, that's so funny. I hadn't read this yet. You're so good at this. Sorry, I don't mean to be really good at my job. These new trademarks are registered to the Shell Corporation, Immersive Health Solutions LLC, which was incorporated in February. Okay.

No, wait. So then how did somebody tie it back? They found the law firm. Do they tie it back through the law firm? And then say the law firm is related to it. It's immersive health solutions LLC. This sounds to me like somebody is going through all of the trademarks and maybe somebody looked for reality or something or they know this address, where they know the law firm

that did it or something. So there must be some vector that the. journalists are doing. Matching law firms because it's a multiple shell. I'm like the greatest Columbo detective ever, but I was a pretty great investigative journalist. I'll leave it at that. You're like, wait a second. Yeah, this is a multiple Shell Corporation, by the way.

So there's Immersive Health Solutions LLC incorporated in February, according to records obtained by Bloomberg News. So Bloomberg seems to have been doing some good data journalism here. That company itself was registered by another Delaware Shell Corporation, the corporation Trust Co, which is typically used for filings by firms looking to avoid detection and the reality OS trademark used that same firm, the Corporation Trust Co. Shell Company. So now what they need to do is they need to hire a law firm. They've got to get better call Saul, Saul Goodman, to buy these trademarks on behalf of whatever

the real IP company that Apple usually uses. But congratulations for figuring this. Bloomberg. Shout out to our friends at Bloomberg. That's some good detective work. I mean, reality pro is so Apple. That is just so. Yeah, at approach.

Now, we should also note that these have not been granted. They've just been filed. FYI. I'm just saying, like, sometimes, you know, we tend to get, there's been years and decades. There have been decades of journalists getting very excited about Apple trademark filings that never go anywhere. Like, there's a, or that take a really long time.

Like, if this has been filed, but not yet granted, and it could take some time to be granted and then it could be appealed. This could still suggest, and I don't want to throw cold water, but I do want to like room temperature us a little bit. Yeah. This could still suggest products or even trademarks that are a couple of years away from being granted and then launched. All trademarks have various periods where people can object to them and fight the trademark.

So when you go for a trademark, you put it in, you have ones that are for future products and you have a certain amount of time to have that product in, you can file extensions. There are other trademarks that are for products that have already been in market, and maybe you trademark after you've had it in market. And so people have a period. So they do a preliminary publishing of your trademark, then people can come out and say, hey, I object to that. It's too close to mine. And all of this is like a grand negotiation. The trademark office does the best job it can at making sure it doesn't compete. And they'll look at general products and what vertical. So you can, if I said, gobbly gock for,

1400, and that was going to be my brand for my new clothing, they'd be like, I can't find anything gobbledy-goat 1400 in the world. Now, if I say, I want to create a new drinking glass, and it's a smart drinking glass, and I'm going to call it the apple glass. Now, okay, they would see Apple Music, as in the Beatles, Apple record label that existed before Apple existed, and all of these different apples out there that can get in trademarks, and those people would have a chance to file a grievance. Like the Beatles, Apple record label, did against Apple, and famously they did a settlement that Apple agreed never to go into music. And then Apple, when they did go into music, had to do some crazy settlement with them to have Apple music, literally the word Apple music and the iPod and all that stuff.

And then eventually they did get the Beatles onto that platform. So I'm very excited, actually. I've had a realization that Apple is going to win it all in AR. And it came to me because I was talking to some Facebook folks. or I should say former Facebook folks. Oh, former. Okay, that's the key. That's a key word there.

But I was talking to some former Facebook folks just socially. And I was, had this realization of, and then I was talking about Nest on social this week. I'm so frustrated. I'm just infuriated. They had this perfect app. I asked Sundar to fire the Nest team, whoever's running Google Home, because Google Home is the worst product ever created. NEST was the perfect product. And now they sell NEST cameras that force you.

The Ness cameras force you to use Google Home. So now I have Google Home for like four of my eight cameras. And they have Google Ness for four of my eight cameras. And the Nest app is perfect. Chef Kiff, Kiss, beautiful. But when they made new cameras, they said, you know what? We can make them backward compatible with the Nest and their Nest cameras. But we already have Google Home and we want people to use Google Home.

So I was like, oh my God, this is incredibly stupid. it would be like Apple being like, I don't know, there's like two app stores. And it's a separate app. I mean, this is so Google. This is why I never buy Google stuff. I never do because you cannot trust them. I didn't. I want Nest stuff.

They are not focused. Yeah, exactly. And so I'm literally going to rip out thousands of dollars worth of nest stuff and throw right in the freaking garbage. But I just don't environmentally feel like that would be the good thing to do. I know. I'm like, please recycle it. You could take it to Best Buy.

So I'm just like, okay. I'm just basically in one set of locations going with a new solution and then I'm going to deprecate these and maybe in a couple years when their lifespan is over and I'll replace them. But anyway, Google is so bad at hardware that I think Google's going to lose the race. Yeah. And then Facebook is so bad at partnering with developers and Lena Khan is not letting them buy but one app that in order to make this work, AR VR VR. And there's no doubt that that's going to be the next platform. To what extent people use it, I think AR, I can. could see the majority of people using the majority of days.

So let me just pause there for a second and make an X, Y, X, Y, axis for you. The frequency of use, right, and the number of people. So if you're making a four quadrant, the majority of people, the majority of days, you could put the smartphone up there, right? Yep. Every 80%, 90% of people use that every day. That's Chef's Kiss what you want in a product, right? Let's put aside profits for a second.

If majority of people are using a device, the majority of days, it's going to make money. Majority of people, majority of days are probably using a television, right? So televisions exist up there. Majority of people, majority of days are you going to use a vehicle. So these are like the best products in the world to participate in, you know, the majority of people and computers, laptops or desktops. Internet, yeah. Internet.

Perfect example. Streaming services, majority. people in which already days. Now, right now, the minority of people, on the minority of days, very few days, very few people are using VR. So you'd put the Oculus in that bottom left quadrant, kind of a bad place to be, right? Isn't it? Nobody's really, I mean, if it was a surgical equipment or something really expensive, okay, fine, you know, like an electric surfboard or a private jet, A very small number of people, not very often would be a private jet

or any plane or any boat. Now they have to have high margins and so, you know, it's a niche product. Google's not going to get it done. Yeah. Not as Sundar is running the company currently. Well, not as, to be fair, not as anybody has ever run Google.

Google has only ever been good at the one thing. And everything else has been distractions. And they've never committed. So anyway, yes, I agree with you. I think Ness was great hard. for a period. But of course, they bought it. Yeah.

Yep. So unlike YouTube, where they put the proper person in charge of Susan where Jackie before that's the law, they had the proper management, they let it be its own thing, and they did not interfere. With Ness, they interfered. Right? Nest interfered. They forced Google home down on Throats.

So they just let Ness be Nest. They would have proven the point that they could actually run a hardware company. Right. And YouTube has the same business model as Google. It's ads. It's not a hard integration. So anyway, yes. Uh-huh. Yep.

So I was just game-varying this. Apple, nobody makes better hardware than Apple, period, full stop. Nobody has done it consistently over time. Sorry, that's it. BMW, I don't know, some fancy German brand, a bit of banging Wolfson, I don't know who makes that stuff. You know, the fancy, fancy stuff that inspired Steve Jobs at a time. So we can complain, you know, on the margins about Apple, but nobody does hardware better.

Yeah. Who does the app store better? player or Apple? Who would you give the edge to? I mean, Apple. Of course. And developers would too. They make more money.

Like they can have more reach on Android, but they make more money on iOS. Okay, here we go. So what is going to define who wins VR AR? What are the? Hardware and experience. Okay. Yeah.

Google can't do hardware. Facebook can. Facebook can't do apps because they don't know how to share revenue and build an app ecosystem. And Google can. Mm-hmm. Who's the only person who can do both?

Mm-hmm. Who's the only person who can do both? Yep. It's Apple. Oh, shoot, the glasses are on. So I'm looking at this. Oh, snap. And I'm just thinking if we all know that this is going to happen.

When I said snap, by the way, notice I didn't mean snap snap. No. Snap can't do it either. No. So anyway, I'm just looking at Apple. A-A-P-L. A-A-P-L. I'm looking at where Apple is today.

I'm bringing at $161 a share. A good day to buy. So the J-trades then. J-Trade Alert. We made our biggest J-trade today. I have conviction. Now, I know I'm buying Apple when it's the most held, I believe it's the most held stock out there. I could be wrong.

It's one of the top holdings of all. I've been super critical of Apple on all the margins. But I've got to go with my analysis here. I'd sport a thousand shares, 161. Damn, mom. It's a big bet for me. That's a big bet. I'm making a big bet here.

And I'll tell you why. I'm holding these things for 10 years. I don't think that Apple's going to announce any of this stuff at the next keynote or the next, yeah, the next keynote, which is coming. I think that's the Apple. Yeah, it's like the next Wednesday or something. And definitely not. Definitely not. And they do three announcements a year on average.

Can somebody look that up for me? I think they usually do three or four of these things. They don't, they do more than two. Two to three, I think. Well, now there's usually the big fall announcement in WWDC, and then sometimes there's a rando, like laptop thing. So I think it's three. And so I don't think they're announcing it now.

But when they do announce this stuff, I think the stock's going to take off like a rocket because people are going to come to the same conclusion I just came to. Yeah. Which is Facebook sucks at apps. And Lena Kahn's not letting them buy anything. And no developer trusts up, nor should they have trust them. Yeah.

Google is a mess when it comes to hardware. Yeah. So we know they're not going to, in all likelihood, Molly, what year will they announce the headsets and the operating system? Yeah. Not this year, right? Oh, no. Definitely not.

I would say one percent chance this year. I mean, because this is what Apple will do is that they will wait for everybody to fall in their face. Yeah. And to have a consumer experience, I was looking at my Apple holdings to see if it is indeed my biggest single holding, which I think is. it is. Like, my financial advisor talks about Apple the way that, um, that, uh, micro strategy guy talks about Bitcoin. Yeah. He's like, sell your house, buy more Apple. I suspect that other companies will

fall on their faces for at least two years. Yeah. Before, if not longer, right? Because there has to be, because Apple does play it safe. They wait until there is demand, uh, pent up or otherwise. Yep. A proven business model and path forward. And then they, innovate and iterate on the thing that already exists and come out and make it way better. And to me, that's a two to three year arc, if not a little more. All right. So we know they're making it. That much we know.

One percent of a percent chance it gets launched this year. What percent chance launched in 23? Like a percentage. I have my own thoughts. And then your percentage for 24. I'm going to say 25 percent for 23. Okay. and 50% 24.

I think it's a 20-25 play. So that's 76% chance it's going to be launched in the next nine quarters. I think it's 50% next year. They announce it. I think they're going to announce

like the DevKit kind of situation and the developer goggles. I think there'll be, you know, like $3,000, $2,000 or $3,000. So developer can start building stuff. And then they'll announce the consumer thing in 24. So I think there's a 90% chance

I'm going to put it at 1% this year I agree for less than 1% chance. It's a little too soon. Yeah. I'll put it at 40% in 20, 23, 45% the year after. So that puts me at, I put 50% the year after. So 23, 40, 50% the year after. I'm at 91% it's coming in the next nine quarters. Perfect time to buy Apple as far as I'm concerned if I'm holding for more than two years.

Because my belief is when they show this shit, It's going to be so compelling. When you see iMessage turn into your iMessage group turn into a Facebook reality group and your FaceTime turns into a FaceTime call in VR, it's going to be super compelling. And when they have all of their app developers, com.com, I have no inside information. I still own 5% of com. But when com dot com now on the board, unfortunately, that would have been the dream. Imagine you put on, you have com.

You have com on your watch. You put on your calm headset, and now you're taking to a, you know, waterfall. And we all namaste at that waterfall, right? It's going to be pretty trippy. Now imagine Spotify, you put it on. And now you go to a Burning Man virtual Mayan warrior DJ set, and you're at a dance party. Okay? All of those apps understand how to build world-class apps on iOS.

Spotify and Com, FaceTime, pick another. And what's your favorite three most beautiful apps? Let's see if we can back into it. Imagine like Pinterest. I'm trying to do my both-low redesign and I'm just walking through it. Like I'm so excited about that. I can't even wait. Okay.

So now Pinterest and it's going to be just. Redfin. Redfin. Redfin. Oh. So, okay, let's just take these. Okay. We got Redfincom, Spotify and Pinterest.

Yep. Big four. Great examples. Notice, tell us an example of your favorite I-O. app that you think could have a life in VR. Those four app developers, what are they going to build for first? Right. Google, Facebook, Zuck.

What are they going to build for Apple? Like, there's no chance their building was like, and it's just going to be, remember like when Apple launched the iPad and then the developers were like, oh, geez, now we have to reformat all our apps. And then they were like, oh, I bet we could do an iPad version that would be a little more full featured and it would offer these things and da-da-da-da. And then we could sell it and then we can make money. And like, there will be shopping enabled through these apps.

And I will buy every GD thing that I see on Pinterest because it will look so beautiful because it's in my brain. They will be lining up. Like, Balmer, Steve Balmer was only ever right about one thing. And that thing was developers, developers, developers, developers, developers. Insert the video here. Developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers. Yeah. Yeah.

Developers, developers, developers, developers, developers. Developers, developers, developers. That would be amazing. I mean, the remix of that is so great. And there's like 90% of our audience has never seen that. I mean, this was... I know we are old. This was the viral video before YouTube existed.

I mean, this thing went viral. So great. You didn't even think he could. The sweatiest man of all time. I went there one time to interview him and was told that you couldn't, you were not allowed to look him and make eye contact when he walked through the halls. Like, people had to look down.

Really? Interesting guy. He's a cool cat. I love him. I interviewed him one time. We, now that we have pumped up so much, I feel like we should just take the last five to seven minutes of the show. Okay.

To just enjoy a good old-fashioned dunking. Imagine that we are at a kids' spring carnival at school. And this is the part where we get to wing beanbags at a teeny little target and drop a teacher in an ice cold tank. It's dunking time. It's dunking time. It's dunking time. This is a combination segment that we are calling,

We Live in the Future slash what the f f f. Ah, W-T-S. Because a W-L-I-T-F, W-T-F. A version of mixed reality did occur last night on TV. Uh-huh. At the MTV VMAs. No goggles required. You just.

had to sit there and enjoy this version of mixed reality wherein Eminem and Snoop Dog performed their song from the D to the LBC as their bored apes. Oh. Yeah, we're going to show this 50 second second video with no audio and we're going to narrate it for you. And what you have here is Eminem and Snoop Dog on a leather couch and Eminem appears to be getting like a really

big contact high from a blunt the size of a Volkswagen that Snoop Dog is smoking. It's basically like a cone that you would use in a cheerleading squad. Yes, exactly. Before they were, you know, boathorns, it's like one of those old, timely bohorns. It's a super blunt. Embarrassed even describing this. So Eminem gets high, Snoop Dog smoking this big cartoon blunt. Then they're transported to, because this is a combination, music video, and

add. They're transported to Yuga Lab's other side metaverse MMRP game where they become CGI characters. And the CGI characters, there we go, look like they're from 2004 about the time that Balmer was shouting developers, developers, developers, developers. And then they transform into their board ape characters as they keep... rapping the song. And then eventually they perform on this virtual stage that again is just a giant ad for this other side, kind of metaverse. Is this a real video game?

Thing of a Madoodle. That they're promoting or this is just like their idea of a clever video to do at MTV Music Awards? I mean, like, kind of. Like it technically launched already on April 30th and they sold these other D. And yeah, you may recall that there was a brief flurry on the internet of people buying like digital land. And they were like, oh, yeah, this is a thing. They sold those to the public. It doesn't, like, there's not very much available about it, like information related to the infrastructure.

The technology is so far it seems like a play to sell digital land or sell these various NFTs because you need to own one of these NFTs in order to play. And it's not just board apes. It's some other ones. That's your character. they literally are like, if it sounds really general and non-specific, it's because it is. There's not really a dedicated website. And then this was this big ad for this thing that only barely exists that was like, I don't know how else to say this, beyond cringe.

Yeah, I mean, it's goofy. You know, like these guys are now like the elder statesmen of rap. They're obviously legends, but they're 50 years old with a bunch of 19 to 25 year olds at the MTV Music Awards. and they're showing a video game that looks like it was on a Nintendo from 1999. They're like the elder sellouts is what it came off as, I think.

Well, this is a super grift. So remember, Yuga Labs raised $450 million at a $4 billion valuation from guess the VC firm that would make an insane bet like that. Of course.

So that was their quote unquote seed round. So the grift here, I'm going to take a guess. is somehow they grifted Eminem and Snoop Dog and gave them their maybe they gave them a crypto punk and an ape. And a board ape, yeah. They both own board apes, but I bet that they are getting looped in and getting some grift here.

They've been handed a bag of digital assets, I bet, to do this. They probably have some land. They got castles. They probably got castles. So now they're going to flip that to some bagholders in the public. I wonder if MTV got a bag for doing this. if MTV even knows that they're being grifted. I wonder if Eminem and Snoop just came to himself.

Like, hey, you know, we own these like cool NFTs. We'll, we'll perform if we can play our video, which is a giant commercial for this multi-level marketing scam known as like NFT play pay to play. I mean, I think that these things are going to get in trouble with, you know, FTC, SEC, etc. as being MLM-ish or adjacent. Yeah. When we look at this, you have to own. right, a character to get in here.

So now we're going to ask kids, instead of putting a quarter into a machine or buying a $60 video game or playing $10 a month, play World to Worker. This whole play to earn or pay to play or pay to win category of games I consider evil. I like a subscription, easy peasy, lemon squeasy, five, ten bucks a month. I like the game is free. You pay for if you want to dress your character, but I hate pay to win or pay to access like this. This is predatory against children playing games. It's gross in my mind if this is what's going on.

I suspect this is what's going on. You're going to have to come up with thousands of dollars to have access to these games. The people on the top have already bought their apes. And now we're going to dupe kids or young adults into having to spend $10,000, $30,000 on some dopey ape crypto pump to get peer pressured into playing one of these games. It's just as loathsome because when they tried to convince kids, they needed to have $400, $500, $600 sneakers to be able to go play basketball. That they would then get killed for at school.

But they would then get killed for it. This is the same predatory bullshit. I mean, it's always the same thing. And then the idea of, and then, you know, the idea that you've got these like influencers who are going to do it. But they're like, what I can't figure out, and we were talking about this before the show, is like, who on God's green earth is the target market for this? because anybody who's like Gen Z, Eminem and Snoop Dog are totally irrelevant.

The, if you care about things like video games and you look at these like year 2000 graphics, it's embarrassing and cringy. The board and then if you're mainstream, you've never even heard of a board ape. So none of this makes sense to you. You're all of a sudden just like, why are these two guys cartoon monkeys? I don't understand. So there's no, like I can't identify a single audience on whom this would work. And all of that is exemplified by like the Reddit comments.

Like if you went to R slash Eminem last night, that it was like somebody was like, this is the first time in years I've seen everyone on here agree on something. And that something is that everything about that was just a disaster. These are like some of the nicest. We can't really even show these, but this, like straight up ass was the response to this pretty much universally. And we can't even show you any other comments. It's just sad and weird and yes, grifty.

Like the VMAs, I'm not saying that everything about like a music industry show isn't some version of a giant ad. But like, what the? Come on. This is what I hate. Straight up ass. Straight up ass. I mean, that's got to stick.

Here's the thing. Here's the thing. You're influencing kids to get involved in a very gritty. grown-up dangerous game, which is spending money they don't have to be cool. And I, you know, Stefan Marbury, arguably greatest point card to come out of New York City. You know, he at the peak of his fame, created starberries with a local chain of stores, and he made $15 to $25 sneakers, kids. And he said, listen, these are as good.

They're made in the same factories in China as, you know, the $200 ones. And I would rather you buy these and save your money and put it towards other things in your life, your education, whatever, putting food on the table. I have tons of respect for him for doing that. They were cool as f*** those sneakers. You know what's not cool? Grifting on a bunch of kids and making them feel like they have to spend thousands of dollars on a stupid NFT to play a goddamn video game. It's gross, gross. And then trying to get them to – it's a bunch of adults.

trying to grift a bunch of kids to spend money to be cool by land, etc. If you want to make this cool, let kids make their own characters for $10. If Yuga Labs was cool, they would let you use your creativity

in a tool to make your own crypto punk. They wouldn't have scarcity. They would have abundance. Maybe sell it. Yes. And let them make them for $10. Right. Do what Roblox has done.

Yes. Just create a gigantic interactive platform. where people can create and develop apps and be a part of a real thing, which, by the way, to be clear is why, although everything you're saying is true, they are targeting kids and trying to influence them and whatever, none of this is going to work. No, it's going to crash and burn.

Actually, you can smell a scam a mile away when you are a Gen Z or a teenager or my kid or whatever. They're going to do Roblox instead. Because this is embarrassing for everyone involved. I agree. I mean, I hope we're not coming across as boomers, but here's the thing. I'm going to ask my son.

Well, I hear what my son has to say about Eminem all day every day. As artists, I respect both of them. They've made some of the great, you know, rap songs of all time. But I just, there's something about being predatory with our children that, you know, this feels like they're trying to get them on cigarettes or something. Get them addicted to something that's not good for them. Yeah. And I would much rather see these kids. if they want to play a game with $10,000, right?

Like, I would rather see them investing in stocks. Hell yeah. And doing j-trading and learning about stocks with it. Because if they buy the top 100 stocks by holdings, what's the chances that those top 100 stocks that they trade are going to be worth more and they're going to learn more putting that $10,000 worth, if there was $10,000 theoretically for them to spend. And this whole, it just feels profoundly unfair to me.

And it's gross. And I, uh, Ugal Labs. for the people who are running this thing, like, think about abundance as opposed to scarcity. And I think abundance will trump. I love your point about Molly, Roblox, Minecraft, etc. Somebody needs to create a video game

that people actually want to play where you create characters and your skill and your creativity is what to find the value of it, not how much you paid for it or how much of a celebrity or your grift and peer pressure. And just literally,

make a copy of this entire concept that Yugo Labs is going off, but make it so what your character has done in the virtual world and how cool it is, how many friends it has, how artistic it is, how many people voted up, some other mechanism for creating value, other than getting in early. And obviously, all these people on OpenC employees, whatever, Coinbase, front running the market. it's just gross you got you got a real burning man vibe going on today

sorry I don't I hate to share the art it's true though it's absolutely I'm a capitalist but you know capitalism on children is something that gets it has to be executed properly is what I'm saying and for kids you're right with respect it's not like you come in with integrity that's the better word

100% punch it up you made two great points there kids are not too savvy to fall for it that's the other great point you know I mean that's the great thing thank God here's my chart

people and days this is the people days X Y axis this is why I love my producers unbelievable making the graphics in real time I am the king of the X Y axis

bow before it's beautiful General Zod all people every day TV and Apple very few people, very few days. Oculus and Yuga Labs on the bottom left.

You could also put Losome to Awesome. You really could. Loosome to awesome. How accessible it is. Accessible to all people and awesome. What's accessible to all people? Roblox. What's awesome?

Roleblocks. You put roll blocks. So on the, forget about people days. Awesome to accessible or inclusive and awesome. lame and exclusionary. Yes. NFTs, Ugal Labs. Lame and exclusionary.

That's Yuga Labs. Cryptopunks, all this stuff. I mean this video. I hope it all goes to zero. I'll be totally honest. I'm not going to lie, I'm with you there. I don't need to, what are they, Sharden Freud? Shaden Freud.

Shaden Freud. I hate to have the Sharden Freud, but I feel like if you own one of these cryptos or cryptopunks or Yuga Labs nonsense, sell it now. Mm-hmm. And go build something inclusive. Because it's just going to turn you into a criminal over time. If you bought this thing for way too much money and you get increasingly desperate to try to recoup that money by getting other people in on your grift, that's how you turn into

a criminal. This is the slow road to made off. I mean, it's MLM. It's MLM. It's straight up. The whole point of crypto punks and all. these things is they're not going to produce too many of them, the people who got in early, convince other people to get in, and then that gets those people to basically, you know,

increase the value of it. And it's unfair. Think of abundance. That would be more in line with the crypto cyberpunk aesthetic anyway. Exactly. You know, having been... Instead of defending NFTs to the death, honestly, crypto people should be online being like, yeah, no, run them out of town. Like run them out of town because it is the, in theory, it is the exact opposite of what Bitcoin and the blockchain promised. Which came out of cyberpunk. And my original handle online from 1988 on was Cyber Surfer, Silver Surfer with Cyber. Like I was into this stuff like before these people were even more. The whole cyberpunk aesthetic, the whole cyber aesthetic was that your creativity, your own independence, your own voice is what

made you cool is what gave you cred, right? And your ability to help other people participate was what gave you cred, right? Your ability to teach other people to do what you had learned and to pass it on and to be radically inclusive and radically self-reliant and all those things that are part of the Burning Man sort of principles. That's what NFTs need is a set of principles. And the principles shouldn't be thou shalt grift on the next group of people. Thou shall pass the bag. Thou shall increase the value of a limited asset in a world of abundance. It should be thou shall be creative. Thou shall pass on what you have learned. Thou shall be more rad. Thou shall be more punk. The furthest thing from punk rock is MLM. Like that's the furthest thing on an aesthetic basis.

That's such a good t-shirt And literally I mean really The furthest thing from punk rock That has ever existed Is these two old guys Getting high on a couch And turning into board apes

As an ad Like can this be This is the end I think this is the moment That marks the end of this particular Whatever killed off ICOs This is its corollary Like this is the nadir

Put a bullet in as far as I'm concerned Seriously If NFTs can be created why not make a game? I would actually back this company. If somebody wants to make a platform where you can make these characters, but as making them,

you have to contribute your assets to the collective. So I make a cool set of glasses and I'm the first person to use the glasses. So that's how I get my cred. But that anybody else can take that graphic of the glasses, the 3D model of it, whatever, you're forced to put it into the library.

Anybody who uses it, like a Creative Commons license, has to attribute it back to me, even if they change it. So it says, I changed this. J-Cal made it first. Molly made a version of it that's even cooler. So she's version 2. And then she has her fork on my cool glasses that went on my 8.

And then somebody makes an even cooler version. They're cooler version number three, Nick version 3. And let that be. And then the coolest glasses in the game are the ones that the most people have evolved. Yep. But it costs nothing to evolve them. Right. And any creativity you do must be put into the collective.

That would be punk rock. And then it's unstoppable. So I took Kanye West $800 sneakers, put them in the game anonymously, ripped them apart, deconstructed them, and devalued the entire IP of them. That's punk rock. Yep. I like this kid who created the Yuga Labs. It's actually the ultimate.

It's the exact opposite of NFT, which is non-fungible, right? This is fungible, fungible creations. like fundamentally like mod them up. I mean, the whole idea is to have them evolve, right? They always do these evolutions of them. What do they call it when they evolve them? They put the serum or something. Anyway.

Are you talking about Pokemon now? No, they do a serum with these, with the board apes where they evolve and they drop. But then you own the drop. It'd be better if you could just evolve them. And so some guy created, I don't know if you heard about this. With work. With work. With work.

With creativity. Yes. Like buy a contribution to the, the game, you are able to mint an evolution. Yeah. Yeah. So there's an artist who created, his name is writer Rips. He's a conceptual artist, and he created a project called RR slash B-A-Y-C.

I thought, this is truly punk rock. This guy was like, you know what? It would be cool. I'm going to create my own version of Bored Apes. And this LA conceptual artist made it. And he said, I'm going to make an art project in response. to this board ape popularity. Guess how Yuga Labs responded.

Exactly. Guess what they did. Sued him. They sued him. I mean, it's so great, though. Take it out back. Take it all out back.

The other thing that I thought was kind of interesting about this is that it turns out that maybe the board ape yacht club's logo might be reminiscent of some other logos in history. Amazing. Now, I don't know if this is coincidental. You know, sometimes artists just, you know, do a Google search and then they, you know, find interesting things and they build upon it. But this guy, right, who rips, I got to have this guy on the pod. We got to have him on. Yeah.

Because respect. Yeah, but. Oh, yeah. No, there's a whole long thing. There's a whole long, like, 27-minute YouTube video or whatever about all the, like, racist tropes and dog whistles and weird things that are also embedded in the board ape, like, look and... Might be a little Nazi. Everything about it.

It might be like... There might be like some Nazi stuff in here. Like, it's all so dirty. It's all just so dirty. I don't think it's Nazi stuff. I think it's just some dipshit artist just found like some skater punk stuff and just did derivative works on it and never actually knew the source of it, right? Right.

And then it was like, oh, wait, it actually started with a Nazi helmet on my ape. Whoops. Yeah. It's just, just walk away. Like, just we're just going to walk away. this is just going to be the end. Anyway, if you guys want to do punk rock stuff, board apes are dead now.

I think parodying board apes, you know, there's a legal parity, there's protection for parity. There is, and transformative purposes, yeah. So I would just go crazy in just making better board apes. So do like a B,

board apes shot club or better board eight shot club and just make more parodies of it and devalue the whole thing. And then make open platforms where people can be creative and awesome and rat. And just screw these guys. Honestly, the whole thing to me is just a grift of epic proportion.

Here's my new accessibility to coolness craft. I bet the best producer is your new X, Y, X, Y, X, is to wrap this up, folks. I know we've been going on for a while here. All people punk rock, right? Some people, mid, MLM, very few people, very few people get to participate in board eight, yacht club, and it feels like an MLM to me. I don't know what all people get to do. That's punk rock.

Burning men. That's a tough one. Burning Man. Perfect. All people are not going to Burning Man. No, but they can is the point. Anybody can. Or Minecraft.

You have to know how to survive. I'm just saying. Okay, but it is theoretically, if you're willing to risk your life, you'll get saved. That's the other thing about Burning Man. If you screw up and you don't bring water and food, you'll be taking care of. Someone will save your dumbass. Somebody will save your dumb ass if you don't have, if you're too cold. They'll get you a blanket.

That's punk rock. I want somebody to use like AI like that. Dolly stuff. Yeah. To then look at the greatest to take every time an ape sells to make a hundred versions of it with Dolly and then remint it as an AI interpretation on 100 different vectors. So they program the AI and come up with different vectors. Okay, make me a, you know, a Matisse version of this.

make me an avant-garde version of this, make me a noir version of this ape. And then every time a bored ape or a crypto-prunk happens, this thing anonymously on a distributed computer network, makes 100 versions of it, and then lists it in 100 different places for sale.

So you're basically saying, like, every time you do commerce here, the AI is going to out-commerce you. How sick would that be? Love it. The derivative works AI. Like, do something pong up like that. Let's go.

And it gives them for free. It gives them for free to the first hundred people who buy them. Yep. For a dollar each, whatever. A dollar each that goes into programming the AI to be even better. Great. It'd be great. And this land grifting, that's the other thing that makes me sick.

It's this landgrifting. The landgifting, don't even get me started. Like, what? I mean. I mean, really, you can have any amount of land in Minecraft and Roblox, right? Do you have to pay to build a house? My kids are building houses and constructing things all day long in Minecraft and Roblox. I don't think they're paying anything.

It's just financialization. It's MLM. All right. Before we belabor this, even more, thank you for listening. That's it. That's it for our big Monday energy. We're ready to fight. We're ready to fight this week.

Let's go. We saddle up. We ride at dawn on Monday. But it's going to be a good week. It's going to be a good week. No, punk the shit, man. Like, if you're really a crypto punk, like, Cryptopunks are not worth a million dollars each.

Okay. If you're going to be a crypto punk, Be punk rock. Punk rock that shit. Seriously, people. Get it together. All right. We got a big week for you.

Molly's going to keep doing these amazing founder interviews. Thanks for doing that with the launch accelerator classes. And we're going to have the power law author, Sebastian Malaby, later this week. You got sick last week. Excused absence, but we'll interview him this week. We got all kinds of good stuff coming this week. It's going to be a great, a great one. We'll see you tomorrow.

See you tomorrow. And if you want to hear us live, YouTube.com, slash this week. begin, hit the subscribe, and then the bell, join the notie gang. Do it and join our This Weekend Startups Community on Twitter. It's super fun. This week at startups.com slash tc. Boom. See you tomorrow.

See you tomorrow. Everybody. Bye.