Loading summary
Transcript299 lines
- [00:00]
A
We have this podcast called My First Million where we're coming with all these complicated schemes of how somebody can make their first million. Meanwhile, in their relationship, Sarah made her first million before Sam with the simplest scheme of all. I feel like I could rule the world. I know I could be what I want to. I put my all in it. Like no days off on a road like. So we invited our buddies from tvpn, John and Jordy, here to do one of our favorite episodes that we do every year called, called Sarah's List. And it's called Sarah's List in honor of the queen herself, Sam's wife, Sarah. You know, it's a classic story, really. She just joined a great company that was clearly already great as like Employee 3000. And the math was like this. She got a job at Airbnb. And I think it was, you know, her numbers aside, the general math is you get a job and they'll offer you maybe like a 40 or 50k a year stock package in addition to your salary. So you get your salary, you get your healthcare. They got a kitchen where they're serving you lunch. They got oat milk in the fridge. So you're not sacrificing anything. She didn't have to come up with the idea of Airbnb. She joined it. She wasn't the first employee grinding like crazy. She was Employee 3000. But that stock package, which over a four year period is, you know, you're granted about $200,000 worth of stock 5X and she made a million bucks before either me or Sam. And so we kind of wanted to honor the brilliance that is joining companies that are already clear winners, especially in tech, because the winners can run so far. And so every. Every few years, me and Sam have done this where we come up with our list, we call it Sarah's List, which is the 10 companies you would join right now. Because as a person, your time is essentially your investment, right? You're. When you join a company, that's an act of an investment.
- [01:43]
B
It's funny because I know some investors who did, who made an investment in that unicorn round. And they had the exact same logic. They were like complete par market fid, obvious runner, like just put. Just pile money into this, like, easy investment. And then it worked.
- [01:58]
C
She joined, I think, at the $18 million valuation, something like that.
- [02:02]
A
Okay.
- [02:02]
C
And then Covid happened and we were like, well, sure, shit, that was a good idea. Sucks it didn't work. And then obviously everything changed in six months. And then I think IPO'd around a hundred billion dollars. And you guys remember that famous interview with Brian Chesky where he's told on air, he's like, the share price is this and it's worth a hundred billion dollars. He's like, I, I, I didn't know that until just now because back then in 20, 19 or 18, when it was $18 million, we were like, this could be worth like $30 billion. Like, you know, like if, yeah, like if everything works. And so anyway, that was her story and it worked out great because she worked a normal amount, had great maternity paternity package, had great benefits, all that stuff. And so we've done this for a few years. But you want to, you know something? We've actually, haven't actually done this in like 18 months because it's been so hard these last 20 or 24 months with everything going on with AI. And so you guys are pretty cool to have because I think you'll know a lot more about some of the latest and greatest.
- [03:02]
A
Yeah, we wanted you guys on because not only, not only do you guys, are you guys super smart, but you guys part of your show as you're Talking to the CEOs of these companies in these like 15 minute interviews every single day. And so you're getting a good sense for kind of like who's, who's doing well, who do you believe, what, what companies excite you. So we wanted to hear what you guys have. By the way, last time, Sam, I went back and checked, I think of the 10 companies that we did in our last round, which was something like 18 months ago or 2 years. 18 months, 2 years ago, something like that. I think we got 6 out of 10 that are like already either there or pacing to be there. So for example, like when we did OpenAI, and we were laughing, we were like, hey, here's a shocker. OpenAI, it was $100 billion valuation at the time. It's now like, you know, close to 800 billion now. And so. And we even said like, look, there's no bonus points for difficulty in life, in the game of business. Like, sometimes the best companies are just hidden in plain sight. They're right in front of you. And so I think we've done pretty well.
- [03:58]
C
The biggest one was Anduril. We did Anduril in 21, I think, and that was 4 billion at the time. And I think it's 90 or 50, I don't remember.
- [04:08]
B
And a lot of those companies stay on the list, honestly, I think, you know, even, even if you just done and Last year, like, the valuation has increased so much that it still makes sense to include in the list.
- [04:17]
D
Yeah. The. The biggest mistake that people make is not going with an obvious winner because it's already in the multiple billions. And it just looks like, okay, what. What's the potential upside from here? And. And that's just been wrong so many times in the last 10 years.
- [04:33]
C
Do you guys ever take shares or equity instead of dollars for advertising?
- [04:40]
A
We.
- [04:40]
D
We have, but it's more just. Just over the last year. We're super young business, and it's made sense to. To optimize more cash flow for, like, actual real revenue. John and I.
- [04:53]
A
The suits don't buy themselves.
- [04:55]
C
Yeah. But landlord don't take Monopoly money. All right, shall we jump in? Wait. Let me tell you one quick story, Sean. I saw. I was at Ramp's office, and I saw the pitch that Jordy, or I think both of you guys.
- [05:10]
B
This is great.
- [05:10]
C
Both of you guys sent, and I saw one line, and Eric said that Jordy wrote it or something like that, where he was like, the beginning of the pitch, it said, if you advertise with us, you'll get so big that you are going to be dragged in front of Congress because they're going to accuse you of having a monopoly.
- [05:28]
D
I think this was John's line. This was yours, right? Yeah.
- [05:31]
A
That's so good.
- [05:32]
B
There's.
- [05:33]
A
I don't know if you guys are always fans of It's Always Sunny in Philadelphia, but the Dennis system. Dennis has this thing where he's basically talks about the implication.
- [05:41]
B
Yeah.
- [05:41]
A
And so he's like, it's not that they're in danger, but it's the implication of danger. And there's this famous line in advertising that Craig Clemons told us when he was on the podcast and he talked about how there was this one. I don't know if it was a supplement or like a perfume or something like that that was having trouble selling. And then they switched the copywriting to. To say, you know, that the founder swears. She swears that this does not contain any illegal stimulants. And it's like she swears there's nothing illegal in this. It's just that damn good. And it's the implication that works.
- [06:17]
B
Yeah. Yeah. I mean, it's so funny because, yeah, we want to win super hard with our. With our sponsors. And like, the hardest you can win in tech is like, you know that Mark Zuckerberg moment when he goes on Capitol Hill and it's senator, okay.
- [06:30]
C
Wow.
- [06:30]
B
He's Actually, at that level, that.
- [06:32]
A
Senator.
- [06:32]
B
Thank you, Senator. We run ads, right?
- [06:36]
A
That's like with my fitness campaign. No one's accusing me of taking anything yet, which means it's not working.
- [06:42]
B
Yeah, yeah, yeah, yeah.
- [06:43]
A
Why does everybody think I'm all natty? This is.
- [06:49]
B
That's hilarious.
- [06:52]
A
I've talked before about the way that I know how to make money, about how build a money making skill, about how to leverage your time and energy. And the team at HubSpot actually went through the video where I explained all that and turn it into a free downloadable cheat sheet on my four rules of how to make money. Now, this is not, you know, get rich quick advice. It's just core principles, foundational principles about building wealth. Things that I wish I knew when I was, you know, just getting started. And so if you want to download it, it's in the description below. It's totally free. You can go get it. Thanks to the folks at HubSpot for doing the research, making this document and making it available to all you guys. All right, back to this episode. All right, so let's jump in. We each have roughly three each. We're going to try to get 12, maybe some bonus, some honorable mentions.
- [07:34]
B
Cool.
- [07:34]
A
My first pick. This is a company you guys might not even know about, which I like. I like to surprise you, but I'm coming in strong here. Zuru Tech, okay. Zuru Tech is a company that's based out of New Zealand and they're the third biggest toy company in the world. So they make, if you've ever seen mini brands. Sam's a big mini, mini food collector. He likes the little mini toys. They make some of the most popular toys in the world. The bunch of balloons where you can fill up 30 water balloons at once. You know that type of stuff.
- [08:03]
B
Yeah.
- [08:03]
A
So the founder, Nick, came on the podcast. He's the wealthiest man in New Zealand and his story is insane. Like, probably the craziest grind story I've ever heard. By the end of the episode, I told him, I go, I think you're the closest thing to Elon Musk that I've ever seen. People just don't know about you because you live on the other side of the world and you were in the toy industry. So kind of people overlook you. So he's got a new company and his new company, or it's actually based in there. It's. They're building homes with a factory. Basically. Here's what you do. He's got a three, you know, it's like chat GPT you just described, you drop a pin where you're going to put the home, it automatically, no matter where in the world, any country in the world, any city in the world, any neighborhood in the world you put it, it automatically downloads all, it has all of the building codes and the permitting and the terrain. So it knows if you're on an incline or if there's a hill there or whatever. Right. It has all of that already built in. And it's called Dream Catcher. So you basically describe the home you want. You're like, oh, I want this, like kind of minimalist, blah, blah, blah, 5,000 square feet, make it cool, blah blah blah. So you basically describe like chat GPT the home you want, and it renders it all using like Unreal Engine. So it renders the whole thing in front of you. It creates like an AI video of like a home walkthrough for you using kind of like a, you know, mid journey type of thing. And then you literally like build the home. You click it. And he's got a factory in China that's like the iPhone building factory, but it actually builds all of the sub components for this home. And it's insane. Like they went and bought like when the Palisades fire happened and people needed to sell their lots, they bought like $80 million worth of lots in LA. And he's building, he's basically going to print these. I say print, just it's building with a Robot.
- [09:43]
C
Yeah.
- [09:44]
A
Like $50 million homes in LA. And so this guy, it was the most impressive demo I've ever seen. Seeing the homes that they're building. And it's real. Like this guy is, he's basically like, you know, manufacturing genius. Him and his brother, they have huge factories in China to be able to do this stuff. And the crazy thing about homes is homes is a space that's really never been touched by, by definitely not AI, but really, even most technology doesn't really go into construction and home construction. And when you're selling homes that are multimillion dollar homes, you don't have to sell that many of them to be doing billions in revenue. And so if there was one company that I could kind of empty the tank of my life savings into, I would be pouring it into this. Which means it's a contender for Sarah's list for me. Love it.
- [10:28]
D
Great case. Did he talk at all about why previous attempts in this category haven't worked? Because there's been, there's been a number. There's kind of like a. I like this, I like this bet because there's actually like a graveyard of Silicon Valley companies that have like made efforts.
- [10:47]
A
Yeah, because he's not a Silicon Valley company, he's the guy. Him and his brother have basically been building factories in China for like the last 20 years. So they're a manufacturing powerhouse. So for example, they were in the toy space and they became the third largest toy company in the world. They do like over $1 billion of pure profit a year just into the two brothers pockets. Like it's crazy. Then they went into the diaper space. They're like, oh you know what, let's go compete in one of the most like difficult to compete with things against Procter and Gamble. And he built the fastest growing. And now I think, I think it's. If it's not the number one, it's basically right up there with Huggies and Pampers now. Even though it's brand new diapers company, you know, they're selling in Target, Walmart like crazy. And they manufactured their own diapers. And the reason why was he found that in China there was like a different style of diaper manufacturing, different materials and he basically brought that to market in the US and so he built the largest that then they did the same thing in hair care and they did it with, they have the fastest growing brand on TikTok for hair care and now they're doing it for homes. And so I think the big difference is like Elon hardware is hard and most software founders, you know, go in for a rude awakening when they go into hardware. Whereas these guys have been doing literally like not just hardware but like the, the building of the factory is the hard part. The factory that makes the product is sort of secondary to it. But building a highly automated factory is the number one one thing. And they've been building factories for a very, very long time. It's actually hilarious. When they went to China to start their toy company, they built like he went there because he heard, oh, all the manufacturing happens in China. But what that usually means is you go find a manufacturer, you tell, you tell them what you want to make and they make it. He went to China, didn't realize that like a naive mistake, and built his own factory there like on the side of a river.
- [12:29]
B
That's crazy.
- [12:30]
A
Like did it all from scratch because he didn like, oh, when people say they manufacture in China, it doesn't mean they go manufacture in China. They find an existing manufacturer. He missed that part and just went the hard way from the beginning.
- [12:41]
B
That's funny.
- [12:42]
D
That's great.
- [12:42]
C
Sean, sounds like you don't like this guy at all.
- [12:47]
A
Did I say I'm a fan? I'm a fan of this guy.
- [12:50]
C
What do you guys think?
- [12:51]
B
Will this actually work as the bear case? Unpack that a little bit.
- [12:56]
A
Well, the demo is so insane that you just have to ask the question, like, is this, like, many AI products that demo? Well, but production shots.
- [13:05]
B
Sure, sure, sure.
- [13:06]
A
And so basically, the demo was so good that, you know, you just kind of got to see a home first before you, you know, you fully believe.
- [13:14]
B
Well, I mean, I would put, like, tariffs as more of the bear case. Like, if. If China America relations degrade further, then it's going to be harder to get stuff across the border. It's going to get hard.
- [13:27]
A
Well, here. Here's the craziest part of the whole thing. Y try to find cost savings when you do stuff, whether you do it in China or you're using new technology. And so the question was, is it 10%, is it 20%? How much is it? It's basically like, like more than an order of magnitude. So it's more than 10 times cheaper to build the homes this way, which I think is the kind of the exciting part, because if you can build, the cost of build. If you can bring the cost of building down, you know, that's actually like, very, very meaningful for, like, I don't know, progress in the world.
- [13:55]
C
But this breaks the whole point of the list. This is not sound. I don't want to work with a person that sounds like Elon.
- [14:00]
A
There was no caveat that said the founder saying. I didn't. We didn't add that. We just said, you join a company that's already got an existing. These guys have a hugely successful business already, but it has a chance to 5x because there's a. There's a pathway there.
- [14:13]
C
All right, what's the next.
- [14:14]
A
That was my first company. Let's switch to somebody else.
- [14:16]
C
Yeah, let our guests go first.
- [14:17]
A
Let the guests go first. Let's be good.
- [14:20]
D
Okay, quick caveat. So we were under the impression that we had to be picking companies under $1 billion valuation. It's a good kind of exercise. And actually, like, understand that early stage today still means sub 1 billion, basically.
- [14:35]
C
Are you carrying, like, a $5,000 handbag in that, in that photo?
- [14:41]
D
It's not. It's a duffel bag.
- [14:43]
A
Can we do the origin of this?
- [14:45]
D
Well, well, so, so, so the, I mean, the bit.
- [14:48]
C
The, the.
- [14:48]
D
The, you know, origin of TVPN is other people have described it as, you know, ESPN for tech and business. What's funny is that John and I do not watch any of the traditional American sports, football, basketball, baseball, et cetera.
- [15:07]
B
Anyway, first one, Varda Space Industries helmed by none other than Delian Asperuhov and will Brewery, former SpaceX. Valuation 726 million. But like one of those multi decade projects that could have really, really large tam, really, really large expectations.
- [15:30]
C
What do they do?
- [15:31]
B
So they manufacture things in space, so they do not build the rockets. They partner with SpaceX to launch a capsule and then inside that capsule they effectively have created a manufacturing environment where gravity is an off switch. And so for certain things, imagine you're trying to grow a crystal, or you're trying to grow a drug or heart tissue, or there's applications for certain types of fiber. They're doing a lot of bio biomedical work right now. And then there's also defense applications. If you can get things up into space and get them down, there's a whole bunch of interesting things you can do there. And so the company's maybe 4 or 5 years old at this point, 150 employees based in Los Angeles. Obviously, you know, very hard working environment. But especially with the new NASA administration, things are moving much faster. SpaceX, there was a lot of uncertainty last year they started landing the starships and launch costs are starting to tick down again. And so it gets easier and easier. And when they first put up their first capsule in space, this is the real question with a space company is like, how long will it take them to actually do something in space? It used to be five, 10 years. They got their first capsule up in just a few years. They're already on their fifth or sixth capsule people.
- [16:53]
D
It's so important. They got it back.
- [16:54]
B
They got it back.
- [16:55]
D
A lot of space companies put stuff up into space, but that's kind of the end of the story. And so I think our kind of framework for Varda is like if you get a group of ultra talented people together, ultra hard working people together, that can develop the capability of simply putting stuff up in space and bringing it back down, it's going to have a really wide range of applications over the long run.
- [17:18]
C
What's the founder like?
- [17:20]
B
Will Brewing is like completely like super sharp, by the book. SpaceX engineer, background, who has been able to talk to big pharma CEOs and get them to sign up and then Delian's, you know, Delian, Delian who's like
- [17:37]
D
obviously quite a character, very, very loud, has. But the company in general has been very like anti Hype. So there's a lot of companies in space that are just hype businesses. They will get all the way to the public markets with without having accomplished much, if anything at all. And Varda has been, doesn't chase the hype. They weren't coming out this last year having like a new pitch around data centers just because that would have gotten them. And so for being a space company, they're extremely, I would say grounded, focused on developing capabilities that are going to be like John said, very valuable in a wide variety of applications.
- [18:19]
B
There's like one. It's a very difficult space, capital intensive. There are not a lot of, there's some. There are a decent amount of companies that are sending stuff up to space. There are many fewer that are bringing stuff back down. And it's, and it hasn't been a huge, hugely competitive space where there's like 10 players.
- [18:39]
C
We had someone, Sean, on the pod, I think like last year explain this company and they went through this huge thing about why it was cool. And we were like, why do pharmaceutical companies need to make drugs in space? Like why, like we like, they forgot to explain.
- [18:55]
A
They didn't explain that part. They were like, oh, it's great because you can like, you know, no, no
- [18:59]
B
manufacturing like a thousand times more expensive than doing on Earth. But there's just specific chemicals, like very rare things. But, but again, you have to view this as, as, you know, multi decade thing. If you believe in space, if you believe that, you know, launch costs are going to continue to fall, it's going to get cheaper and cheaper. Then there's like this interesting trend that you're on the frontier of. And the company's been very good at weathering storms. Whether there's like some slight, you know, sell off in the market or the narrative changes like the, the company's well managed. And so if you can just keep getting through those and just always be the best space, the best company that like does stuff in space, basically like that's good.
- [19:38]
A
You know, I do like, so I do like that you're riding the wave of basically like, is Elon going to get better at doing rockets?
- [19:46]
B
Yep.
- [19:47]
A
And if he does, the cost per whatever cost per gram to take something up into space is going to keep falling and you just keep, you get to keep your business keeps getting better.
- [19:56]
C
Yep.
- [19:56]
A
The more hard work Elon does. I kind of like that in general as a, as a thesis.
- [20:00]
B
So last year Blue Origin landed their heavy rocket and so now there's actual, there's actually two companies and so that means real pricing pressure, which is like
- [20:10]
A
very, very good, by the way. I was. This is. I have two. Two tangents.
- [20:14]
B
Yeah.
- [20:14]
A
I was reading the Elon biography, which I'm late to, but I kind of like it because, you know, everybody is out on. Everybody's done with it, and I'm the only guy, you know, still in there poking around. There's an amazing section. I don't know if you guys have read this, but it's about the tweets back and forth between Elon and Bezos. The sort of rival, the passive aggressive rivalry around the launch thing. Sam, I don't know. Have you seen this?
- [20:35]
B
Well, there's no recent ones. Bezos just posted the Tortoise.
- [20:38]
D
Tortoise.
- [20:38]
B
I'm the tortoise mode. He's going tortoise mode. Slow and steady.
- [20:42]
C
Who's the passive aggressive one?
- [20:44]
A
Both of them. So first. So Blue Origin was like the first to do a reusable launch, which they. Elon wanted badly.
- [20:51]
B
Right.
- [20:51]
A
But Blue Origin up. But he was basically like, they didn't go up very high.
- [20:55]
B
Yep.
- [20:55]
A
So they. And so he was just like. He's like, bezos, post a picture. Be like, oh, my God, we did it. I'm standing next to one of the. The. Perhaps the rarest item on Earth. A reusable rocket or a reused rocket. A reused rocket. He's saying, basically, that's so rare. You never see a reused rocket. And then Elon goes, congratulations, but perhaps not the rarest, because SpaceX has done that six times, if we're counting suborbital hops. And then it was just like, kind of like your rocket doesn't go high enough. And then when Elon did it like a month later, Bezos like, congratulations to Elon. A really excellent suborbital launch. One of the best suborbital launches. And Elon was like, you, dude. It was so high. But technically, yes, was still suborbital. And they've been basically going back and forth with these, like, congratulations, but. And I just kind of love it. I love it. I love the pettiness. Yeah. Today's episode is brought to you by HubSpot. Did you know that most businesses only use 20% of their data? That's like reading a book but then tearing out 4/5 of the pages. Point is, you miss a lot. And unless you're using HubSpot, the customer platform that gives you access to the data you need to grow your business, the insights that are trapped in emails, call logs, transcripts, all that unstructured data makes all the difference, because when you know more, you grow more. And so if you want to read the whole book instead of just reading part of it, visit HubSpot.com all right, let's move on to the next one. What do we got?
- [22:17]
B
Back to you, I think.
- [22:19]
A
Okay, I'll do one. Okay. My next one is Suno. Okay. I've talked about before, if you don't know, Suno is basically a app or website you go to and you can make music even if you've got no musical talent. Right. So you can just go on there, describe the type of song you want. Maybe you bring your lyrics, maybe you don't. Maybe you just give it a vibe, and you basically are vibe coding music. It's amazing. I'm addicted to the app. I use it all the time. I've probably made, I don't know, 40 or 50 songs. I've burned tens of thousands of credits on this thing. It's crazy how addictive it is, how fun it is to do. And I just think this company has a long way to run. So right now, valued at two, two and a half billion, something like that, they have 200 million in ARR. So it's not like an AI app.
- [23:02]
B
That's like 300 million in ARR now.
- [23:04]
A
300 million. All right, crazy. Breaking news. We got 300 million now already. And so I met the founder. You know, I really like kind of what they're all about. Yeah. And they. They also just struck a deal with a licensing company with a musical music label, which is important. Basically, here's the upside, because I was like, okay, this is already at two, two and a half billion. Does this have that 5x potential? And I was doing some math. And basically SoundCloud has 40 million music creators. Okay. So that's 40 million people who, around the world who actually have musical talent that are publishing on the platform. Suno's only at 2 million users on their platform. So they still, they. And that's. That's people who don't have to have the musical talent part, the skill. And so the, The. The market for number of people who will make music that don't know how to make music is gonna be something like 10, 20, possibly more than that, possibly 50x the number of actual musicians who create music. So I just think. I think this thing has an incredible long way to run. I would not be surprised if there were hundreds of millions of weekly active users of people who are making music on this thing. And when you do the math of what that turns into. Because people are willing to pay, right? Like, imagine not having to, like, practice or do music lessons or any of that shit. You just pay 15 bucks and boom, you're a musician, right? Like, it's kind of an amazing trade to make. So I think this thing has a long way to run. I think suno becomes a $50 billion plus company. It'd be also a really fun company to join if you joined right now, because you'd be doing something that's both on the frontier, but it's not like manufacturing in space. It's not like actual rocket science. And you're just a part of culture. It's going to become a big part of culture, which is always fun if you're going to work.
- [24:39]
C
What do you guys think about these companies that are. We were laughing. I think we said they were launched two years ago and they're at 300 million in revenue. Does that have longevity?
- [24:47]
A
You have to ask a couple questions. One is, is it a fad? Right? Do I think this is just like. Is it like, I don't know, whatever, dub smash or like, you know, one of these things where it's like everyone's gonna try it once, like the yearbook photo thing, and then there's really no reason to come back in? I don't think this is a fad. I think people are gonna want to keep creating stuff. The second thing is it's gonna have too much competition. And I do think that they're kind of on an island where all the big model companies are probably not going to. This isn't the kind of primary war front, and they have so many bigger battles that they're fighting right now. I kind of think Suna's gonna go uncontested for a little while longer where it's not the main thing that OpenAI or Anthropic is gonna try to roll out and make mainstream. And so I think by focusing and specializing, you know, they have a lot of other stuff built in. Like, if you make the song, they have like an editor where you get the stems and you can actually remix the song. And they have, like a discovery platform. Like, there's a lot more depth that they can go into. So I think that why it would be around is because it's not in the crosshairs of all the, you know, the highest ELO battle in the world, the genius battle, which is like, you know what OpenAI and, you know, Grok and Anthropic are all doing.
- [25:53]
C
What are the bros?
- [25:53]
D
Yeah, I think. I think what you're getting at is basically like, Suno is the front door to AI music in the way that ChatGPT has been the front door to large language models. That has a lot of value. I made. I made a pretty similar case to a friend who had worked in the music industry for the last decade. He's a. He's a real musician, you know, has gone on tour all over the world. He had the opportunity to join Suno at around the same valuation. And I said, you know, I think, like, you've worked in the music industry your whole career. Where's the growth going to be in the industry over the next 10 years? It's going to be in AI, whether or not people like it. And I think what Suno's tapped into is the same thing that the vibe coding tools have tapped into, where billions of people have an idea for an app, but, like, very, very few people relatively, can actually build an app. And now with vibe coding, anybody can build an app. Same thing with music. Everybody's had an idea for a song or could come up with an idea for a song that would, you know, create, even in the most simple way, you know, creating. We've heard stories from people that, you know, every single night they make a new bedtime song with their kids, right? To kind of like motivate the kids to. To settle down or go to sleep or whatever. And so there's so many magical moments. It's the kind of thing that can have these sort of viral moments where people, like, realize it's available, create all these songs or there's, like, memes that could form, but it has this, like, kind of like. I think. I think people will continue to come back to it. So I'm with you.
- [27:25]
C
What happens to Spotify's market cap then?
- [27:30]
B
Spotify's market cap should be resistant to this because it's a tool for creating music, and music will be distributed on Spotify. And so Spotify never created an Ableton competitor or Fruity Loops competitor. They never sold guitars, they never sold any tools to create music. They might wind up launching some competitor.
- [27:49]
D
But Spotify is in kind of a tough spot if you think about it. What would all the biggest artists on Spotify think of Spotify coming out with an AI tool that is competing for listening time with those artists? So it's like, it's. They're kind of in a position where Spotify can't jump into this without infuriating a lot of the artists on the platform. So I think it's possible that Suno could eat into the listening time of Spotify. But it's hard to imagine a world where I subscribe to Suno and I don't subscribe.
- [28:23]
B
I would just see it similar to Sora and Instagram Reels or VO3 from Google and YouTube shorts. Like people will be scrolling these feeds. Most people don't want any AI. Some people are okay with just like the best AI and so they want one out of a hundred reels to be actually great AI, funny, inspired. And people on Spotify will want to listen to the hits and the songs that everyone knows and then they might want to listen to that one breakout AI generated song. But it's just going to take one minute for, for whoever creates that banger on Suno to export it, upload it to Spotify and Spotify will be able to instantly monetize it. So I wouldn't see it as like a major threat to Spotify. There's also some interesting like downside protection here that it just. If you, if you think about Suno at two and a half billion, who could possibly acquire them if they don't make it to Escape Velocity? And like Spotify has the market cap, but also Amazon could put in Amazon Echoes. It could be an Apple thing, it could be a Google thing, it could be an OpenAI thing. Like there's so many other, other companies that have the market cap and scale to just pick this up and make
- [29:30]
D
it a good outcome for the other. The other thing is I know the industry, like the traditional music industry is using Suno, but they don't want to talk about it because it's still controversial. I heard from a friend that their friend was a backup vocalist for different artists. So like a studio vocalist, their job would be to go into that. Somebody would write a song, their job would be to go into the studio and sing the song and then that, that sample would be taken around to artists that would effectively like bid on it. And so the vocalist would like sing it in the style of one artist, sing it in the style of another artist to give people a feel for it. And they said that that person's revenue went from, you know, humming along for the last, you know, 20 years and did like effectively to zero because you can now just generate any, you take the lyrics, you generate it in the style of any artist. And so the challenge for that individual in their career is nobody, people that don't hire backup, a backup, like a backup guitarist can go and tour with a band, right? Because people are there to see like the front man or whatever. But a backup vocalist, there's not really like touring demand because imagine you get a ticket to your favorite artist and then there's just like someone else singing. You're like not really getting, getting your, getting your money's worth. So certain like already disrupting certain corners of the Internet. And I think that part of what's holding Suno back right now is just that the main artists will not talk about it because they know they're going to get blowback but that'll eventually suck.
- [31:04]
B
Works. Yeah. Interesting.
- [31:05]
C
All right, you guys want to do one next pick?
- [31:07]
B
Yeah. Let's move on to True Med because I think it relates to hone health. Interestingly we have a couple other hard tech stuff but True Med is fintech company founded by Justin Mares. I think we all know him, former
- [31:19]
D
guest of the show.
- [31:20]
C
I think we all have a. Well, I don't want to speak for you guys but he's in the man crush category.
- [31:25]
B
He's kind of. Yeah, he's a killer.
- [31:28]
D
Chad.
- [31:29]
B
So True Med adds a compliant pay with HSA health savings account or FSA button to online checkouts by handling eligibility through embedded telehealth. So when you go to whether it's peptides that are going to be popular or eight sleeps or supplements or whatever you're doing to improve your health, if you're going to do it online, there's an, there's an economic advantage, a tax savings from paying for it with pre tax dollars through your HSA or fsa. And so True Med is this like layer on all of that so you don't have as much like individual trend risk like oh is protein more popular than creatine this, this month or this year? Like as long as health continues to be a trend, you're sort of like the rise.
- [32:15]
D
This is like buying like investing in an index fund for wellness, Right?
- [32:19]
B
Exactly.
- [32:19]
D
They're going to be taking a cut of a huge amount of the volume going towards wellness products in the U.S. we, I started a company called Rora with my friends Brian and Charlie and we're, we're a happy True Med customer. True Med has a very meaningful take rate, a bigger take rate than a traditional kind of payment provider. But it's a great trade because you're able to sell incremental product because people are able to buy it in a tax advantage way. And I'm just like an incredibly firm believer in the entire mission. Yeah of the company. I think that prevention, we know, we know that running is going to increase your health span increase your lifespan. You should be able to let people purchase products like this as a form of, as a form of preventative treatment. So incredible founder like very, very strong tailwinds and great experience as, as a customer.
- [33:20]
C
What's your company?
- [33:21]
D
Joy Rora R o r r a dot com@ the water water filter. So Huberman Andrew Heumann's kind of been an early partner there which is, which is awesome. And that, that was, I didn't know
- [33:36]
A
you helped start that.
- [33:37]
D
Yeah, so I, I stumbled into kind of the kind of water crisis years ago at this point and started looking at, started looking at all the solutions in the category and, and kind of ultimately felt like there needed to be kind of like a Dyson type brand in the categories. A brand that was like incredibly focused on R D and making products in a variety of different form factors because you're constantly interacting with water in your day to day life whether it's in your shower bath, drinking water, whole home filters, et cetera. And yeah, the market is, was quite exciting and it was like something I was personally motivated by because my son kept getting eczema. I had a six month old getting eczema and I was trying to track down where like why it was happening and it ultimately was like tap water baths that we clocked. And so like solving that and then realizing there was an opportunity and partnered with Charlie and Brian to bring it to life and they've absolutely crushed it.
- [34:45]
C
Are you sort of joy the you know I follow you online. I've followed your work for years before I think even party round. Are you the design of the two or the design guy of the two? Because you seem like you've, you've had an eye for aesthetics like for a while.
- [35:02]
D
Yeah, I would, I would, I would generally say so. I mean John, John has great taste and, and instinct around this stuff. But I've, I've just loved like advertising, marketing, product design. I've been obsessed with it since I was, since I was a boy basically. I was super into like skateboarding and surfing and snowboarding growing up. And so I, I, I had this sort of like I was trying to figure out from a very young age like why there was like a snowboard available for a hundred dollars but I really wanted the one that was $800. And so kind of working backwards from that and understanding design and brand and advertising and all these things and so bringing that in, I mean that's the success of TVPN is due in part to our obsession with brand which is I think something that podcasts historically would think about. Okay, let's design our cover art.
- [35:57]
B
That was the first thing Sean's told me when we launched Technology Brothers, the original podcast. I was like, you sent me a really nice message. You were like, I think this is going to work. I think this is the thing. You got to go full time on this. Do it, do it. And I was like, yeah, like, it seems like the numbers are pretty good. I was being very wonky. And you're like, no, no, no. Like, this is a brand that like, like you've actually broken through and created something that feels, it has feeling around it, like brand. I was like, yeah, that's like a lot. That's almost all Jordy. I help as I could with it, but just the idea to actually create this world and this brand we had a lot of fun with.
- [36:28]
D
Yeah. And the funny, the thing that's addicting about media is you're doing like basically product development, but the feedback loops are so rapid. Every day with Rora, it's like we have this idea to build a water filter company, but then the R and D process was like 18 months or something between like, idea to actually shipping a product.
- [36:45]
B
Yeah.
- [36:45]
D
And then with media, it's like idea to product, like in like these really rapid, you know, hour long, 24 hour cycles. And that's like something that I think we love because we'll be sitting here, you know, we'll be sitting there on a Friday and be like, okay, we
- [37:00]
B
should have a stock ticker on the bottom.
- [37:01]
D
Boom. Monday, same day. Yeah.
- [37:03]
C
So are you guys disciplined with sticking within your brand parameters or sometimes like, because that could be hard and require. It does require discipline.
- [37:11]
D
No, I think, I think, I think it's gotta constantly be. It's gotta constantly be evolving. And I mean, look, look back to like the skate and surf and snowboard brands. Like any brand that was just like stuck in their way and didn't kind of expand and evolve and reflect culture ultimately just didn't make it right. These are brands that now you could go back and buy and bring back into the modern era. But yeah, it has to be flexible. I mean, the transition from being called Technology Brothers to TVPN was like a big moment for us. A lot of people would have said, like, technology Brothers is a great brand. We had already kind of like saturated X at the time, so we were small, but, but people knew about us and so we, we knew that that was going to be necessary to evolve into becoming the kind of media company that, that we wanted to be but yeah, I think you need a commitment to evolving and I think the Internet, the Internet allows you a lot of, a lot of like the ideas that people have had around like brand and advertising were created in a world where you're doing like long term planning around like print and television marketing and catalogs and things like that. And now with the Internet you can just like iterate on ideas so rapidly and evolve your brand so rapidly and it's like a few clicks to like fully update yourself. And so I think the only consistent thing for our company is like the feeling that we're trying to create kind of like what, what we want people to feel when interacting with the brand. And I think that that has to, that's, that has to stay consistent because like that is, that is the brand. It's not necessarily like whatever, whatever logo, whatever your logo is at any one given point.
- [38:58]
C
Dude, that's great. You guys are.
- [38:59]
A
We get back to the list, let's do it.
- [39:01]
D
But Sam, last thing I would say my first, my first ever company was, was a skateboard company. And this was like, this was like the pivotal moment for me. At 12 years old, I realized I found somebody in the Midwest that would manufacture skateboard decks for me. So that was like, that wasn't my first million, but that was my first hundred making. My first time making a hundred dollars from building a product. And that was such an insane moment. I was like, you'll make this and then I get to put my logo on it and sell it. Like this is the most amazing thing ever. And so that was like my first experience building any type of brand was J Man designs. I still have a board in my home office. And I think that once I realized like, hey, you can just. That was my moment of like, you can just make things like everything you see in the world is a business and there's no reason that you can't build it yourself.
- [39:56]
C
We have to shred the gnar sometimes. I still skate.
- [39:58]
B
Yeah, I've seen you are incredible at skating those videos on the service.
- [40:03]
D
I realized by like a teenager I was like, this is a hobby that, that destroys your body. So I switched to surfing.
- [40:09]
B
I can't believe still do that. It's every time I see that video it's like insane.
- [40:13]
C
Anyway, yeah, I still like to get after I want to be a 40 year old man doing handrails still.
- [40:18]
B
It's crazy.
- [40:20]
C
What do you do with the money once you've already made it? This is a question Sean and I ask our successful guests all the time. And the reason we ask it is because if you are successful, if you do have a little bit of money, information on how to spend or invest your money, it's actually really hard to come by. And I know this because inside of Hampton, which is my community of founders, people ask this question all the time. People have made 10 or $50 million. How do you spend it? How do you invest it? And so to help solve this problem and answer this question, I actually interviewed 80 plus founders. Guys like Scott Galloway, Alex Hermosi, Brian Johnson, people who are worth fifty, a hundred, even billions of dollars. And we got them to reveal everything. So their net worths, how much they pay themselves, their monthly expenses, their portfolio, things like that. And we turned these 80 interviews into one document. And I don't think you can find this type of information literally anywhere on the Internet. And it's completely free. So if you want to see behind the net worth of people who are worth billions of dollars and their portfolios, their expenses, everything, you go to joinhampton.com reveal again. Joinhampton.com reveal. Check it out. All right. All right. Should I do mine? You guys are going to make fun of me. My next one is self promoting.
- [41:25]
B
I love this. No, this is amazing.
- [41:27]
A
Is this okay?
- [41:27]
B
I'm so into it.
- [41:28]
A
Oh, my.
- [41:29]
C
Listen, guys, here's the deal.
- [41:31]
A
I thought, I thought you might do this. I was going to make fun of you, but hey.
- [41:35]
C
But it just makes sense. Okay, So I picked HubSpot. But the reality is, is there's probably 30 or 50 or 100 companies that could go, in this case here. The SaaS apocalypse. Was that what we're calling it?
- [41:47]
B
Yep.
- [41:47]
C
Insane. Insane to me. So HubSpot, I think they peaked around 900, 850 a share went down. I think the low recently was 200 bucks. I think that is insane. HubSpot. And again, sub this out. With so many different companies, it's probably the same story. HubSpot does $3 billion in revenue with a $14 billion market cap. Okay, I think that is insane. They're projecting to do 3.7 billion in 26. So you're buying a. A subscription software company that I don't think people are going to tear out of their. Of their business at something like 3x revenue. Like everyone talks about, like all the nerds on Twitter, which I'm one of them, are talking about, like building their own CRMs. Maybe, maybe the nerds are doing that. A roofing company with 20 employees in Tennessee, they ain't going to be doing it anytime soon. And So I do think that there's a lot of, I think this is overblown with them. Plus however many companies I think I saw Monday.com I think it was, yeah, I think they do a billion in revenue at a $2 billion market cap. Something like that. I forget. Exactly. And I think that's insane. The bear case with some of these SaaS companies is I do think the seat model is a little bit insane because like do you guys remember just the other day that substack article went live where it was basically a guy telling a story about how like AI is going to be so good that people aren't going to work and if they aren't going to work they're not going to buy stuff. And so it does kind of like beg the question if like software companies do pay per seat. If you have less employees square just laid off however many people, 40% their staff or whatever, like do they need to continue buying software at the same rate that they were because of the seat model? That's like the bear case. But I just think the SaaS apocalypse, totally overblown.
- [43:32]
A
Overreaction.
- [43:33]
C
Yeah.
- [43:34]
D
I mean one, one going back to this Sarah's list concept, the amazing thing about HubSpot Equity is that it is liquid. Right? And so, and so you, uh, it's, it's very real. There's a lot of companies in our, in our industry where you might get a massive grant but you have no, you're, you're fully locked up.
- [43:54]
B
And I think, I think to the tune of like can you get the 3, 4, 5x. Well if the narrative flips and people are like wait, actually like HubSpot has some real significant moat and that thing that we thought was going to kill them isn't going to kill them. Well it just pops right back up. And so that's sort of the option value. I see.
- [44:13]
D
I would, yeah, I would say like
- [44:15]
B
more pressure from like, like maybe startups that are, that are not doing the seat based model, they're doing more outcome based model. But a lot of those companies are just getting started and it's going to be years until there's ever like some real disruptive pressure.
- [44:29]
D
So yeah, my general framework is that it's going to even like HubSpot will need to evolve in a way that it hasn't since inception, just naturally. And so great leadership. I don't believe that SaaS is going away but it's going to require great leadership to help evolve and help the company like actually build a lot of momentum in this New era. So I'm with you. I don't think the local roofing company is going to just be vibe code and kind of maintain their own software stack but leadership is going to have to like actually it's going from like hey we can just compound at this rate annually, forever. And like this is just easy mode SaaS that we saw.
- [45:13]
B
If they're in a bake off with a company that has some really crazy agentic features and basically the CRM's cleaning itself up and adding stuff and lead scoring even better then they're going to need to invest a lot more. But in general, very, very strong position to be in system of record.
- [45:28]
C
What say you Sean? You don't. It doesn't even have to be HubSpot. It could be any, it could be the dozens of companies.
- [45:33]
A
I've been looking at this, I mean I've been looking at it actually just as an investor to say like okay, definitely seems like a overreaction. You know Mohnish Parai came on the podcast and he said a great thing which is that risk and uncertainty are two different words and most investors don't understand that. And he was explaining how the stock market responds to uncertainty more than it does to risk. And so if, which is what's happening right now, there's just uncertainty. And uncertainty is very different than saying something bad is actually gonna happen. It's just that we don't know what the future cash flows look like, we don't know what the future growth rates look like. So you get this discount just for uncertainty. And so I've been looking at all these SaaS stocks and I've been trying to decide like okay Figma and you have Salesforce and you have HubSpot, you have like all of these on sale. And I'm like do I wanna stock up while these are all on sale? I think these are pretty good companies here but they do have some level of uncertainty. So I've definitely been looking at this. I was joking groaning at your pick but I actually think it's a pretty good, good pick. Especially because the way John said it like you're going to be liquid the whole time. If you Sarah's list this company you're going to be working at like a, well a company with 20 years of success under its belt, you know, systems and all this good stuff and then it's like at this all time low basically for where it's at.
- [46:49]
D
The one thing you have to be aware of is like AI there's not going to be some Announcement by the labs. It's like, hey guys, AI is actually reversed in progress, and it's getting way worse. We think it's going to be much worse in the future. And then the stock's gonna rock it up. It's like the AI is only gonna get more capable. There's gonna be new capabilities unlocked. And so you have to be making this thesis with that in mind. And I think there's a way to do it, which is that HubSpot serves an incredible amount of small businesses. They're in a great position to actually deliver the value of AI to all those people. But that's what I'm saying. It's like it's all gonna come down to management and their ability to not just build a story around AI as a tailwind for the business, but actually show that, like, we are delivering the power of AI to our customer base and they're giving us more money every single month than they were the last month.
- [47:39]
A
In your bull case, Sam, I think you wrote AI features still suck, which is a funny bull case, but it's true. I think there's been a few companies like this, like Intercom, Zendesk, where they added AI to their existing thing and they're like, oh yeah, our. I think Zendesk was at 200 million or something in ARR off of their AI feature. Intercom was over 100 million on their AI. Intercom has been around with customer support and you would think, oh, they're going to get disrupted by AI. And they're like, well, actually the harder part is getting all these customer relationships. It's actually much easier to integrate an AI feature than it is to go get hundred thousand small businesses to trust you and use you and integrate you. And so the question is like, can they do that? If they do that, then the narrative is not just like, oh, they're not getting disrupted, but actually, oh my God, look at all this extra growth they're getting.
- [48:23]
C
Because they have the thesis that I have been buying into for the past two or three years, since I got really popular, was there are going to be a lot of new entrants, but the vast majority, I think Jordy, Jordi or one of you guys made this joke, but it's not a joke. The vast majority of value creation is going to be by big companies just getting bigger. I just think that it's. It's much easier for a salesforce to get more efficient and launch new features than it is a new company, or at least picking those new companies very hard. But like Picking a company that works already and it's going to get just a little bit better. It just, it makes so much more money.
- [48:58]
A
Right.
- [48:59]
C
Love it.
- [49:00]
A
All right, let's move to the next pick. Let's get one from the TPPN guys. What do we got?
- [49:04]
B
We should do semi analysis. This is an interesting one. So semi analysis looks like a substack. Like if you go to the website, it might even be hosted on substack. They have a website, they break down semiconductor and AI infrastructure build outs. They have a model for how data centers are progressing, how much it costs to inference different AI models, how the different chips are doing. They'll do a review of the latest Google tpu. They'll, they'll explain to you how the latest Nvidia chip works. They're doing. It's a great business. Because
- [49:39]
C
wire cutter, it's like a, it's just like a, it's like a publication.
- [49:42]
B
But, but wire cutter for the richest people in the world because they run trillion dollar companies.
- [49:49]
D
Yeah. Institutions.
- [49:50]
B
Institutions. So hedge funds, banks, also the actual hyperscalers themselves. So if you're amd, you want to know what Nvidia is doing. If you're Nvidia, you want to know what AMD is doing. And semianalysis is going to talk to everyone, do a ton of research, put together a whole bunch of data into a cleanly organized spreadsheet that you can import into your valuation model for whether or not Microsoft is going to beat earnings. And so they sell those models.
- [50:16]
C
It's a publication or it's a, it's
- [50:18]
B
like the Hustle dude.
- [50:20]
A
Right?
- [50:20]
B
It's a publication.
- [50:21]
D
So think of it, Think of it
- [50:22]
B
as you can subscribe, you can subscribe
- [50:24]
C
to like, like subscribe like as a.
- [50:26]
B
But you could also buy models that are pre built, like Excel models with data in them and those are very expensive. And then. Yes.
- [50:36]
A
Sam, have you seen this guy, Dylan Patel?
- [50:39]
C
No. This is great though.
- [50:41]
A
Never met an Indian guy named Dylan, but love it, love it. So he, he is, when he goes on podcasts.
- [50:47]
C
Yeah.
- [50:47]
A
This guy is so knowledgeable. Yeah. About what's going on with GPUs. Yep. I don't know if you've ever seen the, the Louis CK bit where he talks about like how he likes to somehow sometimes use the N word but in a positive way. And he talks about like if he goes to a coffee shop and orders a coffee and the guy just like fully like foams it and froths it and like makes it perfect, he'll be like that N Word made the shit out of my coffee. It's like, that's how I feel watching DILIPATEL Talk about GPUs and infrastructure. He'll be talking about the new Colossus thing and he knows the megawatts under the flops, everything, what cables they're using,
- [51:21]
D
and he knows everything.
- [51:22]
A
He's like, we got satellites watching the parking lots and we figured out this is how bad they're scaling. This guy knows, he knows so much. It's incredible how much this one person is knowledgeable about GPUs and is he
- [51:34]
C
writing all of this? It looks like an AI blog.
- [51:37]
B
So it's so. So they use AI imagery, but all the, all the text is, is written by their staff of analysts. So they have about 50 people working there. And on a particular deep dive, they might have five to six authors attached. Dylan might write something, other folks might write something. Doug o' Laughlin is also over there.
- [51:54]
A
And how much money are they making? Do you guys have? Is this like a $5 million company? 50 500. Like, what's going on with this?
- [52:00]
D
I would put in tens of millions.
- [52:01]
B
I would put it in tens of millions. But this is the interesting, like, bull case is that right now they have like a very respected analysis group, but they're also launching a fund, allegedly according to the information, to invest in both semiconductor stocks and startups. And they're already doing angel investing. And then also they're going to do credit ratings. And so the real model to think about this, the comp is Moody's. So if you're familiar with Moody's, they do credit ratings. And Moody's got started during the railroad build out because the railroad build that was so capitally capital intensive that there was a huge, there was a huge secondary market for like, okay, is this person that's going to build this railroad from, from Chicago to Atlanta, like, are they good for it? Do they have the money? And so Moody's is now an $80 billion business. And I. And if you look at the stock like it. Moody's has not moved during the sell off. Like, it's doing fine. And yes, this is very indexed to the AI boom, but the, the actual business can be very, very stable, very high margin and very big, like much bigger than people think when they think of just like publishing analysis.
- [53:09]
C
This one's, this is the best one. This is the best find. This is super cool.
- [53:14]
D
Yeah. One of our, one of our teammates, his brother just got a job here and John and I were so excited for him. Yeah, because if you want to, if you're, if you're excited about, if you're excited about AI and you're not like a researcher or a product designer or product manager or a founder, but you want to be at the center of the action and actually understand what's happening. This is a fantastic, super interesting job
- [53:38]
B
with a lot of upside.
- [53:40]
C
Do they have offices? It looks like the founder lives in sf. Is it like an, in real life?
- [53:44]
D
Yes, they have a west coast and east coast.
- [53:47]
B
Yeah. But it's a lot of time with like hedge funds and banks and managers. And also Dylan Patel is very young. I believe he's in his 20s. And so I, I like your, your, your, your description of his, you know, encyclopedic knowledge of the semiconductor industry is correct. And I think if you just look at what that compounds, like over two decades, I think you're gonna, you're, you're already seeing one of the most important voices in the most important industry, but it just compounds.
- [54:15]
C
Have you guys ever read this book called how to Get Rich? It's by an author called Felix Dennis. Felix Dennis.
- [54:22]
D
You guys have a magazine guy, right?
- [54:24]
C
The magazine guy. You should Google Felix Dennis. So Felix Dennis, he was, he was like a combination of Richard Branson and Mick Jagger. He was kind of vulgar. He had this like British aristocrat vibe. He was really funny. He's very funny. He died from cancer and he used to joke that he, he, he, he was a crackhead. Like he was literally a cocaine and crack addict. And he spent a lot of his money doing it. And he wrote about it. He was. But he's like funny. He wrote about it. Anyway, he got rich because he created this thing called Dennis Publications. And Dennis Publications was a computer magazine started in the late 70s, early 80s and it made him a fortune. When he passed away, he was probably worth 8 or 900 million dollars. And this is like in 08, 2008. So it was very, very wealthy. And there's like been like 10 different guys. There's this guy named Pat McGovern who was a multi billionaire because of computer magazines in the 1990s. There's Ziff Davis. Have you guys heard of that? Bill Ziff. There's been so many of these. And what you are explaining right now by what Dylan Patel does, it's this exact same B2B publication in a technology boom, owning a very small niche and just kicking ass and doing the same playbook of research media events. And it has created many billionaires.
- [55:32]
D
Yeah, one, one way to look at Semianalysis is like what they're doing to like, sell side research firms, which is like, hey, wait, like, you're a substack. You can't do. You can't do like advanced research on semis, you know, or you can't, like, compete with us. You guys are just.
- [55:47]
B
Yeah, you have the aesthetics of like a Goldman Sachs equity research or Morgan Stanley report, but the data is just as good, if not better.
- [55:55]
D
And, and with tvpn, it's like, wait, you guys aren't. You don't. You don't have a cable network. Like, you guys can interview this person on the day that they're ipoing. And it's like, you can just.
- [56:06]
C
You can just.
- [56:06]
D
You can just do things.
- [56:07]
C
This is the same thing we've. As someone. I'm a little bit of a media historian nerd. It's the same story over and over and over again. And this is a great find. Sean, you want to bring us home? What do you got?
- [56:19]
A
All right, I got one for you guys. This is a name a lot of people know, but I hadn't really put too much thought into it. So Harvey. Harvey is basically very simple. It's a AI lawyer. It's AI software for law firms, more specifically. And I think right now they've just been. I mean, they're raising rounds. So, like, you know, if I did this episode six months ago, it would have been like, oh, they're whatever, $2 billion company. 5 billion. Now they're an $8 billion company. So am I getting. I might be getting priced out here as it's. As it goes, but I do love the space. So There are about 200 million in revenue off of just like a thousand customers. I think, like, half of the, like, top hundred law firms in America are using them in some. Some capacity. And I was just kind of, again, I like to do kind of bottoms up math to. To make up, make my own case for these things. So I think in the US there's about half a million law firms that's just in the US and right now, Harvey's average contract value is like 190,000, which means they're basically getting paid like they're a lawyer who works at the firm. And so I don't think that will be there for smaller law firms. I think they'll obviously be a lower price point. But just in general, legal work is a perfect candidate for AI work because it's mostly text documents. It's mostly writing and reading and summarizing. And then there's all these really bespoke workflows that a law firm needs. There's compliance, there's security, there's validation. There's all these like things that you gotta build that's like for a law firm versus like would a lawyer rather just upload into chat GPT? I don't think so. I think there's actually gonna be like purpose built tools for, for law firms. So Harvey's one, Legora is another. They're both companies in the same exact space kind of competing for this. And I think the cool part about this is that if you can add leverage into the legal system, you, you know, that'll kind of transform the economics of how these law firms work. Law firms work, right, because they currently they bill. There's billable hours. You put more bodies, there's sort of this incentive to spend more time on something. I think that's going to change. I think, you know, more and more law firms are going to use this and realize like, we don't need to have as many people to be able to do the same amount of work. And I think their billing model is going to change. But anyways, I think, I think Harvey is a perfect example of like as AI happen, as AI happens right now, there's going to be these winners for the decade. Like oh, remember all those companies that got started when the AI happened? Like yeah, there's the big ones, OpenAI and Anthropic and others. And then I think there's going to be these like vertical ones. And to me the legal one is like a clear cut, obvious in your face. Vertical one that will be, is pretty big. If you do the math by the way of like, you know, every law firm is going to use AI. I don't think there's going to be any law firms that are not using AI. Depending on how much market share you think they're going to capture. You sort of multiply that times $100,000 per firm and you very quickly get into the tens of billions in revenue available to.
- [59:10]
D
Yeah, the thesis for Harvey has, there, there hasn't been a lot of big outcomes of building software for lawyers. So when investors have backed Harvey, it's been a general thesis that they're going to capture some of the current like labor spend. Right. Which is, which is a much, much bigger market than enterprise software. I had a, I've got a friend who is at one of the big law firms. He got an early demo of Harvey. When I first talked to him about it, he was like, oh, it's like, like it's cool. And then a year later, somewhere in like, early Q4 of last year, his, like, eyes were, like, wide open and he's like, I, I'm like, it's, it's the real, real deal now. So they've made a lot of progress. The, the product gets better as the models get better. The question is, like, how much do the labs actually care to build out the kind of more enterprise functionality that, that Harvey's already built out? And, and so they'll, they'll naturally be some competition there over time. But we had John. We had John Quinn from Quinn Emanuel on, on our show today, the most feared lawyer in the world. Really, really cool guy. You guys would have a fun conversation with that.
- [60:22]
A
Elon's lawyer.
- [60:23]
D
Yeah, yeah. And I was, I asked, was he nice, do you think?
- [60:28]
B
Super nice.
- [60:28]
D
Oh, he's, he's a, he's a sweetheart, but. But not the kind you'd want on your, on your bad side. But, but I asked him. So. So AI is really good at generating legal docs already. It might make some errors, but it can make them really fast. I was like, do you think we'll potentially have 100x more litigation? And he was like, yeah, possibly. Right. But he also said that that's kind of like the bull case for lawyers. Still being at full employment is like, we, yeah, you might. A lawyer might be way more effective, but there could just be way more cases. So that would be kind of a very American outcome.
- [61:04]
A
It's like, what's that story like in India where they were like, there's too many pythons and they put a bounty. Like, if you bring us a dead python, you get like, you know, whatever. And then the python population boomed because people just started breeding pythons. That's basically what you're saying is going to happen. We're just going to breed more just like useless litigation. Love it.
- [61:20]
B
Well, this already happened in legal. There was a piece of software that would help lawyers write down their billable hours, and it would sort of pad it out. And then. So there was software on the client side that would automatically scan it and say, that's not work. I'm paying for. Get that out of there. Get that out of there. And it became like bot on, bot war. Very fun.
- [61:41]
C
Did you guys see the episode we did with John Morgan? No.
- [61:44]
B
Oh, for Morgan and Morgan.
- [61:46]
C
Yeah. So we had John Morgan on. So for the listener, Jordy, I don't know if you would see his. I don't know if he's in California or not. I've seen John Morgan. I think it might be the largest type of his law firm. What is he? He is a injury law.
- [62:01]
B
Yeah, Yeah, I think so.
- [62:01]
C
He has commercials everywhere. And he comes off like a sweet. He's older, he's in his 70s. He almost comes off like a grandpa. Like, you want to trust him. So he comes off like a very like, you know, PC soft guy. But, you know, whatever. He's a lawyer. So we had him on the pod. I swear to God, the very first sentence that he says to us, I say to him, john, I hear that you own a museum on crime and punishment. That's really unique. Verbatim. Oh, that thing, that thing prints. That's the first line I swear to God that he said to us word for word.
- [62:41]
B
Makes a lot of money.
- [62:43]
C
He owns, he owns an amusement park business and he owned seven museums called the Alcatraz of the East, I think he calls it. Okay. And we were like, how do you
- [62:57]
A
have time to do this? You have a five billion dollar law firm.
- [63:00]
C
Yeah.
- [63:00]
A
And he was like, I don't hunt deer. I hunt money. We're like, this guy's incredible.
- [63:07]
B
That's wild.
- [63:07]
A
I'm from John Morgan.
- [63:10]
C
It was one of the craziest interviews I think that we've ever done. It was the most different of the commercial versus the reality was like way different.
- [63:19]
D
There's a number of Harveys for personal injury people that are making. Working on that software specifically to qualify these types of cases and will naturally be controversial because some people don't like the whole, the whole category. But that's just an area. There's going to be like vertical Harveys.
- [63:40]
A
Terrible. Just send me your deck. I just got to take a look. I can't believe you guys are doing that, but just send it over.
- [63:47]
D
Uh, we got one more for you guys that I, that I think you'll. That I think you'll like. Uh, have you guys heard of send, cut, send?
- [63:55]
C
No. What is that?
- [63:56]
A
What is that?
- [63:56]
D
Okay, so fun name for a pretty serious company. They let engineers upload CAD files and quickly get custom parts made using software automation to make quoting and production fast and frictionless.
- [64:08]
C
So dumb it down a little bit.
- [64:11]
A
What's a CAD file?
- [64:12]
B
Yeah, you send in like a, like a 3D file that says I want, you know, a cube milled out of aluminum and it's got to have a cylinder.
- [64:23]
D
In skateboard terms.
- [64:24]
B
Yeah.
- [64:24]
D
So let's say you want to design your own pair of trucks.
- [64:26]
B
Yeah, your own truck.
- [64:27]
D
You design the trucks on a computer.
- [64:29]
B
Trucks.
- [64:30]
D
And then you take this file and you send it to them, they cut
- [64:33]
B
it and then they send it to
- [64:34]
D
you send them the file, they cut it up, they cut up the metal, they send it back to you. So this one's cool because it's, it's fully aligned with like everything you hear about reindustrialization, the kind of things that America used to do but forgot how to do that we ship these capabilities overseas. But Send Cut Send is a bootstrapped company. The founder Jim has been on our show, scaled over 100 million in annualized revenue, you know, completely independently and have thousands and thousands of happy customers all over the US Doing something that again you would. You know, people talk about the why entrepreneurs end up manufacturing in Asia. One reason is because of, of costs, but another thing is just like speed. Like the, you know, every, every person that's manufactured something here will tell you. I reached out to this shop, I asked them to make a part. They didn't get back to me for a week. When they got back to me, they said they could do it in two months. And so Send Cut Send is really focused on speed and ease of use and they've scaled up organically and the founder Jim is just amazing. And so how'd you guys find this?
- [65:50]
C
This does not appear to be in your wheelhouse.
- [65:53]
D
Well, yeah, we love having companies come on the show that don't, you know, every single day. There's probably half a million to a billion dollars worth of, of fundraising rounds that get announced on tvpn. But we love having founders on that have never raised a dollar.
- [66:10]
B
I met him through Jason Carman because Jason Carman profiles a lot of hard tech companies and he is a supplier to a lot of those hard tech companies. So you can kind of think of him as the index on all of those somewhat more risky re industrialization bets. Where is this drone company going to work? Or is that drone company going to work? Well, they're both going to be buying parts from Send Cuts.
- [66:32]
C
Wow, great find, man. This is a really cool one. He used to. So this guy owns. I, when you described it, I was thinking like a more of a blue collar looking guy. He owned a landing page company and then went into.
- [66:45]
D
Yeah, he's just, he's like a, he's like a, just a hacker that decided to make stuff in the real world.
- [66:52]
B
Yeah, but he's very, I mean the, the bootstrap thing is I think important because like it's a capital intensive business. But, but he's been you know, thinking about profitability, thinking about scalability from day one. Set up a very healthy business that's. That's not going to collapse at any point in time.
- [67:08]
D
Yeah, we joked with him when he was on our show. We said if you were venture backed, you'd be valued at 5 to 10 billion. He'd be getting some insane multiple. But he's happy to just build a great business and compound every single year. And we hope that he scales up dramatically and enters a bunch of different verticals over time, because Lord knows we need it.
- [67:32]
C
Dude, there's been so many times where Sean and I talked to someone and I'm like, what am I doing podcasting? Like, this sounds so much cooler. Do you. Do you guys. Do you guys feel like that all the time by talking to all these amazing people?
- [67:43]
D
I think most of the people we talk to, we know we have no business being in their business.
- [67:48]
B
Yeah.
- [67:49]
D
And so I feel like we want
- [67:51]
B
to compete with them.
- [67:53]
D
Like, I wouldn't want to compete with, like, Peter Rahal in selling protein bars, even though I could go make a protein bar. Right?
- [68:00]
B
Yeah.
- [68:00]
C
Yeah.
- [68:01]
A
I think I'm missing that common sense, because every time I talk to these guys, I'm like, we're so similar, me and you. I was like, I should be just doing what you're doing. This is great. And I somehow think I can do
- [68:11]
C
all of those things. Halfway through the interview, Sean, like, acts like I'm interviewing him. He gets on. Sean's like, you know, like, Sam, guys like us, we're just here to, like, do amazing things and, like, build great products. And he'll sign off by saying, thanks for. Thanks for having us.
- [68:23]
B
Sam, just become the guest on your own show.
- [68:27]
C
That's elite.
- [68:28]
A
I do like the bootstrap side because, I mean, one of the things with Sarah's list is you don't want to be taking a ton of dilution. Right. Because even if the stock price is going up, you don't want this company that keeps requiring more and more capital, has a bigger prep stack, all that stuff. I had one on mine that was. We don't have to go into it too much, but it's Column bank, that's kind of like this. I don't know if you guys saw the story that came out just the other day. So the founder of Plaid, his new company called Column, is basically like, It's a fintech company. It's a bank. He actually bought a bank for, I think, $60 million of his own money, and then he started this, and he basically uses it as the underlying bank Under Mercury, under Ramp, under Brex, under all these companies. And so he, and I think they're doing this number's out of date in 2026, they're doing 200 million in revenue. He owns all of it. He never raised any money.
- [69:17]
C
Wow.
- [69:18]
A
And it's, it's like you said, it's an index. So it's an index into all the new fintech shit. Yeah, it's like great. If you think ramp's going to keep growing and you think Mercury's going to keep growing, well, guess what? Column will keep doing well, that's great. And they're, they're doing extremely well. And here you got a founder who owns the whole thing. And so, you know, you go work there, you're not going to take dilution in the same way because it's a profitable company.
- [69:36]
B
That's awesome.
- [69:36]
D
Yeah. And they're competing with all the banking as a service providers because historically you'd have the fintech, like a Neobank, like a Mercury, and then there'd be like a banking as a service provider and then there would be the actual like chartered bank underneath it. And so column is like eating up the bottom two layers of the stack and saying, hey, build the consumer facing financial services company, but we'll handle
- [70:03]
C
all
- [70:03]
D
the different, you know, the API layer down to the actual bank.
- [70:06]
C
So I'm just browsing it looks. So we started. I feel embarrassed. Platter plate. I know what it is. Yeah, it's one of these words where
- [70:16]
D
I read, I never say column was started due to his experience building plaid.
- [70:21]
C
Right.
- [70:21]
D
Because plaid is like the rails allows, you know, is basically created in large part help create the overall fintech boom. And so that's a good example of like when you're picking these companies, there's like this, you know, in Silicon Valley we all want to believe that the founder with no experience can just come in and just, just dominate the industry just based on, you know, sheer willpower. But sometimes just going, going and, and attaching yourself to a team led by somebody who has deep, deep, deep experience and has vision that is grounded around having worked in the industry for a long time is like, sometimes you don't need to overthink it. Just like if you're going to join a company, go work for somebody that has done it before at massive scale.
- [71:10]
A
What an unfair advantage. Not only do you see the problem, like you said, but how many meetings can you get with fintech companies if you're like, oh, by the way, I started plaid. Right. You get, you can get Every single meeting you walk in with incredible credibility and then you own the underlying bank. And then for whatever reason, I'm not a developer, but like, for whatever reason, like, having great, Easy to use APIs is like a really big competitive advantage that seems like every company should do because it sounds like handwriting. You know, it sounds like something so simple. It's like, well, a well documented, well designed API. But apparently it's a pretty big competitive advantage when you go into a space that historically didn't have that. And, you know, it's no surprise that a company like this is kicking ass.
- [71:51]
C
What a boss. We got to get him on. Amazing person. Looks like he's only 35, 36 years old. Hey, the bros. You guys are the best, man. Thank you so much for doing this.
- [72:03]
A
Of course, we're not the technology brothers anymore.
- [72:05]
B
We're not.
- [72:06]
A
By the way, John, I was wrong. I texted you when you changed the name to tvpn and I was like, oh, no, not going to work. Technology brothers. That's the one.
- [72:13]
B
Yep.
- [72:13]
A
But I was wrong. You guys, you guys made TVPN work in an incredible way.
- [72:17]
B
No, I mean, it still is a mouthful, but online people just type it out and having four letter domain, four letter handles.
- [72:24]
D
Like, you know, the other reason, you know, the other reason we did it is at that point we were shifting from just being the two of us talking about to doing guests. And we wanted the aesthetics of being like a cable network because we wanted to go and get these like public company CEOs on. If you're trying to get a public company CEO, some of them, the really founder mode ones, you just talk DM with text and to jump on. But a lot of them, there's like layers of people in the communications department that you're kind of like needing to gain their trust. And so by having the optics of being a network, even though we are just a podcast, we were able to, you know, end up getting a lot of those guests. And, and that's a funny nuance.
- [73:06]
A
Yeah, it's like, oh, yeah, the folks from TVPN have reached out. Feels very different than you want to come hang with the technology brothers.
- [73:16]
C
It's like Jordan Belfort calling it Stratman. Oakmont.
- [73:20]
B
Oakmont. There we go.
- [73:21]
C
He's like, it's just a made up name. It just sounded official. Thank you guys. This is awesome. You're welcome anytime and we appreciate you.
- [73:29]
D
Thanks for having us.
- [73:30]
A
We did theirs, we did their sign on. Maybe we should let them do our sign off. So we, we basically ask you Is that it? That's it. And then you say, that's the pod. So can you give us a. We'll set you up. Is that it?
- [73:40]
C
We done?
- [73:41]
A
That's the pod.
- [73:42]
D
That's the pod.
- [73:43]
A
I feel like I could rule the world. I know I could be what I want to. I put my all in it. Like no days off on the road, let's travel, never looking back.
- [73:53]
C
If you made it this far, then you're gonna love what I'm about to tell you. So there's this amazing entrepreneur. His name's Neil Patel. He's been on mfm. He's one of our favorite guests and he has a podcast. It's called Marketing School and it's brought to you by the HubSpot Podcast Network. Marketing School brings you daily actionable digital marketing lessons learned from years and years of being in the trenches. They have over a hundred million Downloads and over 2,500 episodes. Marketing School gives you bite sized marketing wisdom that you can implement immediately. Whether you have a new website or you already have this huge established business. You're gonna learn about the latest SEO, content marketing, social media, email marketing, conversion optimization and general online marketing strategies that work today. You can get Marketing School wherever you get your podcasts.