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- [00:01]
A
You're watching TVPN. Today is Monday, April 6, 2026. We are live from the TVPN Ultra Realm, the temple of technology, the fortress of finance, the capital of capital. Happy Easter to everyone celebrated yesterday. How was your weekend, Jordy?
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B
Good. A lot of egg.
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A
Hail Mary.
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B
Oh, you did?
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A
Yeah, I did. I finally saw it. Did you see the trailer?
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C
I did not see it.
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D
How was it?
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A
Ben, you saw it, right?
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D
Yeah.
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A
What was your review?
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B
It was great. I was telling you. I think it was. It was fresh.
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D
It was fun.
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C
People put it on Will DePugh.
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A
He didn't like it. He said it was interstellar for chuds.
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D
Right?
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A
Isn't that what he said? He said something. You liked it, right? I thought it was great. It was very enjoyable. Watch. I don't know.
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B
Should I see it?
- [00:41]
A
Yes, I think you should see it in theater. In theater for sure. It's definitely a good. It's not too long. It's like two and a half hours. But it's. It's an Andy Weir. Have you seen the Martian? Brutal. It's basically just like endless stream of problems and then quick solutions. So there's some sort of problem they need to figure it out. Problem they need to figure it out. All of it's. I don't know, like loosely, like hard sci fi, like somewhat believable. It does have aliens in it and stuff. But it's a fun time anyway.
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B
Well, speaking of realspace, what's going on with Artemis 2?
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A
Artemis 2 is live streaming right now to almost a million people on YouTube on the NASA YouTube channel. I believe. It's also on Netflix and the stream title is just we are about to fly around the Moon. With authority from NASA, we can actually pull this up and see. I would love to hear what is going on right now because I think it's happening like as we speak. They are up. I also wrote a little bit of a retrospective on the.
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B
Can we get some sound?
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A
I have a spider on my.
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C
Yeah, okay. So one minute ago, NASA posted that the crew are now the farthest any human has ever traveled. 252,000 miles from the Earth.
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B
John is dealing with a little spider here on his microphone. There we go.
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A
There we go.
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B
There we go. Solved. Still living too.
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A
Yeah, we'll take it out later.
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B
What do we got going on here?
- [02:16]
A
Yeah, can we get the audio on that? Oh, there's no audio. Oh, weird. I think there is audio on YouTube, but it might not be letting us stream it through. I don't know. Sometimes there's like DRM stuff. Anyway, Matthew Gallagher, he's the founder of medv and we were supposed to have him on the show today. He unfortunately cannot make it. We do have John Slotkin coming on, the chief medical officer from Gelsinger or Geisinger to talk about claims around oral GLP1 drugs. We read the New York Times story on Thursday and then over the weekend there was a whole, a whole bunch more analysis about the company. And there were so interesting because you
- [02:58]
B
would think that someone else would write the one billion one. The one person, $1 billion total company.
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A
Totally.
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B
And then the New York Times would take it down.
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A
Yep.
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B
But in this case it happened in reverse.
- [03:09]
A
So last week the New York Times broke down the story of Med v. A telehealth provider of GLP1 weight loss drugs. And the framing basically that this was the first time in history a single person had built, quote, a billion dollar company. And that's what went viral. Digging in, there were some small caveats and some big caveats. The small caveats were that the founder Matthew Gallagher had hired his younger brother. So technically it was a two person startup. Most people were like, yeah, okay, we'll count. That doesn't matter, it's a family member. Right. And then also the other one, it's
- [03:46]
B
only twice as many people as the
- [03:48]
A
original challenge, but, but they had almost twice the revenue, 1.8 billion. So. But the question was the valuation. So the headline stat in the article was that they are on track to do 1.8 billion in sales this year and that the on track is doing a lot of work. Of course, because that's clearly an ARR number that's, that's extrapolated out and the GLP1 market's moving very quickly. It's not like RO and HIMS and all the other providers are going to be, you know, just sitting down and letting this company run away with whatever secret sauce they've discovered around customer acquisition. Although they might not go into this, which we'll go into, and it was insane scale. But companies don't unilaterally trade at 1x revenue. Like that's, that's sort of a given in this article. It's sort of presupposed that if you're doing 1.8 billion in revenue, you would trade above $1 billion. And so this counts as a billion dollar company. I always thought that the billion dollar company would be on market cap, not valuation, not on revenue. Because you could do, if you're gonna say, okay, just try and say the biggest number you would Want to set up some sort of payment network where basically you could report GMV really, really high and you actually have a very, very small business cause you're taking like 1% as your true net revenue. And so there was always a question about the margins. And then also revenue durability matters. Like the, the ongoing question around building these one person high growth companies, is there durability? Because if you can do it and then I can do it and then Tyler can do it and then anyone with access to a coding model can build it very quickly we're going to erode each other's markets and trade market cap very quickly. And I think any VC that would look at this, they might get to a point where they're like, yeah, this is a unicorn company, look at the growth. I think there's something here. But at the same time you could see someone like a private equity valuing this and saying, well, I need a lot of risk, I need to see durability.
- [05:48]
B
There's some lawsuits.
- [05:49]
A
Exactly. And we'll get into that. So medb uses two companies, Care Validate and Open Loop Health. Open Loop Health to handle the doctors, pharmacies, shipping and compliance. And we'll get into the compliance thing, but that's a lot of outsourcing. And of course that outsourcing takes a toll on margin because you have to pay the doctors, you have to pay the pharmacies, you have to pay the shipping, you have to pay the compliance. And they're paying Care Validate and Open Loop Health to flow that value through to those individual stakeholders. So it's still, it's still, yeah.
- [06:22]
B
I started asking what does this company actually do itself?
- [06:27]
A
Just marketing. And maybe they're too aggressive about it. We'll get into it. So these GLP1 drugs also aren't cheap. And when you sell them, even when you sell them legally, even as a telehealth wrapper, a lot of the value is going to accrue to the pharmaceutical companies that own the intellectual property. At least that's how it should flow when things are functioning properly. So you can effectively build a telehealth company on top of a pharmaceutical company like Novo, where you are taking a thin margin on top, you can get to big numbers. But the, the pharmaceutical companies are gonna wanna be paid because they did all of the expensive FDA trials, all the expensive R and D and they need to recoup that. So then the other question is, you add in the CAC from digital ads. They were apparently spending a lot on Facebook to acquire customers and you quickly wind up an estimate of pretty thin margins. I think the estimate Shiel shared, Scheel Monat shared was like 15% or something like that. But it's totally possible to get to a valuation that's lower than a billion dollars, depending on how everything flows through.
- [07:38]
B
At the same time, though, if they're outsourcing all of the kind of key areas of the business to these other players, open loop, et cetera, it's possible that of those very thin margins.
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D
Right.
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B
The 15ish percent, the margins on that are very, very extreme. Right?
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A
Sure, yeah.
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B
So you could still get to a number that was in the hundreds of millions of dollars of, of. Of EBITDA.
- [08:02]
A
Yeah, yeah. I mean, the 15% margin looks like 150 million, maybe 200 million in like basically profit. That is crazy. But we'll see what the FDA has to say long term about that. Whether there will be lawsuits or settlements. There was already a warning letter and this turned into a big drama about the company. The drama.
- [08:23]
B
And was there any mention of this in the original story?
- [08:26]
A
I don't think so. And so there were a lot of people that were. And I believe I pulled up the New York Times piece and there was no, like, correction or anything yet. Maybe there will be more follow on. I feel like the founder does need to, you know, respond and have their opportunity to kind of correct the record because these things can kind of run away in either direction. But even with all the drama, there were a ton of super legitimate questions about how valuable the company really is and how long they'll be able to continue their current business model without pretty serious changes. And that's around the marketing stuff. So BEDV received an FDA warning letter just two months ago for misbranding violations. So warning letter. If you're not familiar with the FDA's language, it can be pretty wide ranging. Sometimes it requires just a small change to marketing materials to remain compliant, and sometimes it's basically like a shut down the company moment. This happened a lot with the nicotine category with illegal vapor products. And sometimes the warning letter would be like, you are warned in that if you continue to sell these, we will put you out of business. And some of them are, okay. We're warning you about this particular claim on your website. You need to change this language. And it's pretty minimal. I went through this 10 years ago. We started Lucy 2016, and while I was there, we were extremely nervous about warning letters because if we got a warning letter, we thought it would mess up the FDA applications that we had in progress. It would mess up distributors. Like anyone who you're partnering with would say, well, I don't want to work with somebody that has a warning letter. Have you dealt with this? We were able to avoid all this, but one kind of concrete example is that we, like Lucy, cannot make quick claims about the nicotine gum product. So even though most people think, oh, this is like Nicorette, it's actually regulated in a different category. It's regulated as tobacco product, not as a pharmaceutical product. And so you can't run a digital ad that says, like, hey, you're a smoker. Quit smoking with Lucy. That's a violation because it's not regulated as a pharmaceutical, as a smoking cessation aid is the term.
- [10:35]
B
And so in the nicotine category, you would have companies create a product. Usually there would be no founder associated with said product because people didn't want to put their face on it. And they would do a lot of things. They would make sales grow incredibly quickly, like making marketing claims, just where and how they decided to sell, etc. Etc. The ad channels that they used, not in the. So they would go from zero to hundreds of millions or billions of revenue very, very quickly, but the enterprise value of the company. Company would be near zero. Right. Because no, nobody would want to buy a company that had all that kind of baggage. And so if you were going to value it, it'd be like, what is the, like, very, very, very near term, you know, sort of like revenue opportunity.
- [11:23]
A
Yeah, yeah. I mean, the famous, the famous comparison is Juul versus puff bar. So Juul went, you know, raised a bunch of money, got very big, put in FDA applications, got those applications denied marketing denial orders, then got them, stayed in the courts. They set up a. I think their whole headquarters was in D.C. they were working very closely with the FDA, truly engaging to sort of clean up the, you know, all of the problems around marketing and sales and formulation. Just really try and get to a clean bill of health. With regard to the government relationship, they were successful and they got approved not as a smoking cessation aid. So they still can't make the claim that Juul will help you quit smoking. But they did get approved as a tobacco product, which I think the FDA says it has to be suitable for the protection of public health, which is a very vague way of saying it's a net benefit, net good, that it's on the market, which is. People can debate that back and forth. But back in the Juul days, they also could not say quit smoking with Juul they wanted to put say they wanted like a lot of people that were, you know, were smoking cigarettes did switch to Juul and they were pushing for that, but they couldn't actually make quick claims. So they used the word switch. They said switch to Juul instead of quit with Juul. And that seemed fine for a long time. I think they eventually trademarked it and then I think they had to pull away from it at a various points time. But there's clearly like this gray area in your marketing. Can you say you want smokers to upgrade to nicotine gum? You know, all of these things need to be sort of litigated with the fda.
- [13:06]
B
And what has medvee been up to?
- [13:07]
A
We wound up playing it very safe and that probably kept us from mooning in revenue to 1.8 billion overnight. But I still think it was the right decision for Lucy. Now MEDV appears to have taken a much more aggressive approach. Approach. They are apparently running 800 fake doctor accounts on Facebook to sell compounded GLP1s. Shill Monot verified that the accounts are not actually doctors. Some even have cartoonishly fake names. Tucker.
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B
Dr. Tucker Carl Zinn, MD.
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A
If you like. This is one of those things where I feel bad for someone who clicked on an ad that was deceptive.
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B
Dr. Tucker Carlson, MD.
- [13:52]
A
But if you're getting your GLP1s from Dr. Carl Tuckers in, you probably are in on the joke to some extent. I don't know. It's clearly not above board. And they have to clean this up and deal with this. They were also sued in a class action lawsuit last month for violating California's anti spam law. That stuff can be crazy expensive because a lot of the fines are on like a perfect instance basis. So it'll be like, okay, yeah, $10 fine for every text message you sent. And it could be like you sent 50 million text messages or something. So you could have some massive, massive liability. Of course that will be litigated in the court of law and there might be a settlement and they can figure out what the right damage is. If they are even guilty, they're still early in the process. And so the end result is more of a story of pushing over aggressive marketing tactics.
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B
Yeah, I mean, so pull up the actual picture of shield's post because I think that you can just see how confusing this would be to somebody maybe a little bit older.
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A
You want to zoom in on one of those?
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B
Yeah, zoom in. You can just see. You see somebody that looks like a doctor. Oh, yeah. They get the staff if you're 70 years old on Facebook, you're not necessarily putting it together. It's Dr. Tucker Carlson MD.
- [15:11]
A
So my co founder, Lucy is. He has a PhD from Caltech, but it's in biophysics. And so he's not a medical doctor, but he is a doctor of science from Caltech. Like he has a really good background, but he's not a medical doctor. And I would always joke with him like, we gotta put you in a stethoscope. We gotta take some photos of you in a stethoscope. Like the aura is so high. And he was like, no, that's like such bad practice. Like we can't do that. Like a doctor is associated with medical doctor. Even if you have a doctorate in something, it's like the famous, like I'm dying. Does anyone have a doctorate? It's like, yeah, I have a doctorate and a Juris Doctor or whatever.
- [15:49]
B
The other interesting thing medv uses the dot org.
- [15:53]
A
What domain isn't that for nonprofits typically? That's very.
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B
I would think. So there's gonna be. I don't know that if it's technically illegal to use it as a for profit, but certainly when you add that to all the other.
- [16:06]
A
Yeah. Cause you land on that site and
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B
then you think it looks like, oh, a doctor advertised this to me and now I'm on a nonprofit.
- [16:12]
A
Yes, yes, yes.
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B
Medical website.
- [16:15]
A
Yes. So yeah, in general, I think the story is pushing over aggressive marketing tactics to the limit more than AI allowing low headcount scaling. And this has happened for a long time. Back in the old days, I want to say like 2014 Facebook era, but the early days of online marketing, there were countless stories of questionable supplement sales or telehealth operations scaling on the back of insane ads. The classic formula for like mega scale was if you could get an ad approved, if you could get it like sort of like whitelisted or through the approval process, it wouldn't automatically get reviewed that often. So once you were approved, you could spend $1,000 or you could spend $50 million. And there wasn't early on, there wasn't a natural trigger to like re. You know, like refact check. It was like if you could get approved for a small ad, you could scale it up. And so people would do all these crazy things to try and get the ads approved. There were all these tricky things where they would route to one website and then after the ad was approved, they changed the website. And then all the ad platforms had to eventually figure out like, okay, we need to be Scraping a layer deeper consistently or like every day. But the canonical example of the health supplement or telehealth operation that would always go viral and always just print was if you could get an ad approved that had Harvard scientists, brain pill and Johnny Depp all in one. Call to action. I'm not kidding about this. This is real. So it was like always this picture of Johnny Depp coming out of the ocean. That was the one that was like
- [17:54]
B
really scroll stopping pirates of the coast.
- [17:56]
A
No, no, it was like a paparazzi photo which they didn't have the rights to use. They would not partner with Johnny Depp. They should not be running that ad at all. And then something about brain boosting or like making like limitless pill make you a genius. That type of marketing would, like, it's very general, like, who doesn't want to be smarter? So everyone would click on that. And then like Harvard scientists would, like, lend its credibility because, oh, if it's from Harvard, like, it's good. And so if you could get those three terms approved, there were a whole bunch of like, sketchy operations that would get ads approved and then just pump like $100 million of sales behind them. And it seems like maybe there's a little bit of that going on here where a lot of these ads should not have been approved. Maybe there needs to be a validation. I know that a lot of companies that partner with doctors, even just to sell like skin care supplements, sunscreens, really anything, the rate to advertise with an influencer who's a. Who actually has some sort of medical credential is like way higher. Yeah.
- [18:55]
B
Because it's way more effective and that.
- [18:57]
A
Yeah, it's way more effective. But if you can just like fake that, then you're basically arbitraging that. But you shouldn't be.
- [19:03]
B
We have two employees, but 800 fake doctors.
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D
Yeah.
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B
Not Facebook.
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A
Not great.
- [19:09]
B
So we'll see how this works out. I think the press tour's probably canceled, ended for the near term.
- [19:17]
A
Well, you're always welcome.
- [19:18]
B
Founder's still welcome to come in.
- [19:20]
A
I think people have a lot of questions for the founder, Matthew Gallagher. We'd love to have him on the show and dig into all this because maybe there are some good context that is missing from all of the criticism that's been levied over the weekend, but we'll see. So I was reflecting on. We're still in pursuit broadly of this one person, $1 billion company. It's still an interesting question. Will it happen? Why might it happen? Why might it not ye.
- [19:49]
B
In my head, it was always new startup is created, solo founder creates a hit product, raises 100 on a billion. And that is like the cleanest path because for so many other paths you just run into, yeah, maybe I want to be the one person, $1 billion company, but I want to win more. So if adding incremental people helps me build a better company, those Rand pieces point. Yeah. Why would I not add at least a handful of people?
- [20:17]
A
Right? Yeah, totally. So, yeah, I mean, I think software is an interesting category, especially if it's open source software somehow where there was some sort of flywheel where you could verify what was actually built and then you could verify what the sales were because it was done on some sort of open platform or some sort of thing where the actual reporting and the analytics, I mean, apparently the New York Times did verify the run rate that they used, so their money was flowing through the business. But having a much cleaner representation of what the financial picture is, I think would help. I was personally excited about the prospect of a video game and just more video game developers seeing breakout success. So a couple years ago, in the olden days when I had free time, I got woefully addicted to a poker themed roguelike deck building game called Balatro, which I don't think anyone here has played. But this game is amazing, so much fun. So you're basically playing poker, but there's no financial stakes, there's no money, there's no microtransactions at all. Interestingly, the game actually got banned, I think in Japan or some other country for being like poker and being banned
- [21:40]
B
for being anti gambling?
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A
No, no, for, no, no. Banned for, for being like gambling aesthetics because you are playing with cards, there's no real money. You pay like $10, $15 for the game and then you can just play unlimited. But it's done extremely well. So it sold over 5 million units. I saw some reporting there might be 7 million and maybe even more now because they've gone multiple platform and I think at 15 $20 a download, that might be close to $100 million in revenue. And it was made by a Solar Solo developer who goes by Local Funk over a two and a half year period. He originally wanted the game to be a side project that he could put on his resume, but it wound up being a massive success. And so depending on your valuation methodology, you could probably underwrite Balatro close to a billion dollars if it's generated $100 million of basically free cash flow. You know, there's obviously two and a half years of R and D. But that was just this developer's time. The future revenue streams, the offshoots, the merge, like you get to a number that's close and you have to imagine that, that his two and a half year development like life cycle would have been pulled forward by the help of AI. So he basically developed the, the game entirely in the pre AI period. So it came out.
- [22:57]
B
Does it still have momentum?
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A
I think it's probably trailed off a little bit because people sort of, you get to the end of the game after I don't know, 10, 20, 50 hours or something and then there are some people on YouTube that will do like tons and tons of try and break the game because you can get really, really crazy with combinations of different things. But at a certain point you do of kind, kind of finish the game and then you're like, okay, I'm moving on. And he never added microtransactions, he never added like any sort of live service model, subscription, anything like that. It was sort of just like it did really well and then we'll see. And so yeah, this came out as a demo in 2023 and officially launched in January 2024. So fully like pre AI development. And there's lots of, there is lots of hesitation in the video game community around AI, specifically, specifically around the art generation, like pixel art generation, all of that. But if you think about AI as a tool for writing game logic and particularly re platforming. It took him, I want to say like a full year and I think he partnered with a developer or a publisher to actually distribute the game because it was originally a PC game and then it went to Nintendo Switch and then PlayStation and then Xbox. And it's a perfect game to be everywhere, but that takes a lot of time and you sort of have to rewrite a of bunch, bunch of the software and that's something where AI should be able to pull that forward or make it even easier to launch everywhere on day one. And so the interesting thing is that Balatro broke through because it paired like this familiar design language with this wildly engaging progression system. And so bringing fun ideas like that to market faster is something that I'm really looking forward to. And we heard Sholto from Anthropic talking about like building his own RTS game. And obviously he has a full time job so this would be certainly something that would be extra. We've been working on a bunch of simulators that are sort of feeling like games. Some of the mechanics are getting pretty good now. Game like but you have to imagine that in the future there'll be more and more game developers.
- [24:58]
E
Yeah.
- [24:58]
C
I mean, some of the stuff that I've seen internally at tvN, it's like
- [25:02]
A
going to blow already. Vague post, vague post. Are you the vague post gang? Have you stared into the abyss yet? Because everyone talks about at the AI labs, they all have abysses. And I feel like abyss101 is like, do not stare into it. Maybe glance.
- [25:19]
C
It's like a first day at onboarding. Where's the abyss?
- [25:21]
A
I think a glance is okay. Or maybe saddling up to the abyss and just kind of peeking your head in is fine. But I would not stare into it. I think that's something you need.
- [25:31]
B
Let's go over to the App Store.
- [25:32]
A
Yeah.
- [25:32]
B
The App store saw an 85% increase in new apps this past quarter. Let's pour one out for the App Store review team. Most recent quarters, new app count has grown less than 10%. So it was just ticking up quarter over quarter and then jumped massively. No surprises here. Feel like everybody, everybody that I know outside of tech has an app now. They're unconstrained, they have an app.
- [26:02]
A
But at the same time, I have yet to find an app that's on my home screen that was solo developer Vibe coded, something like that. So I'm waiting for the flappy bird moment or the Balatro moment, this solo thing. Even if it's like a productivity tool, there's clearly more apps. But actually going viral, like, what is the Harry Potter Balenciaga moment? What is the viral moment that breaks through and actually makes it to the top of the app charts? Because right now it just feels like the long tail of the App Store is getting potentially fatter because there's more single use apps, there's more small apps, but will we see one of those break out and become fantastically successful? That's sort of like the next critical moment that I'm eagerly awaiting.
- [26:58]
B
But we'll see what's going on in China, John.
- [27:03]
A
The pork industry is a victim of its own success. This story is incredible. They got swine scrapers over there. Skyscrapers filled with swine. I'm not kidding about this. So this is from the Economist, and I read this yesterday and really enjoyed it. Pork holds a unique place in the Chinese diet. It was once a symbol of the good life. The Chinese character for home is a pictogram of a pig under a roof. It is so important that the government has a strategic frozen pork reserve. And the news media are always full of the ups and downs of the pork industry. It's like they gotta cover it.
- [27:37]
E
Like it's a horse race.
- [27:38]
B
The pork race.
- [27:38]
A
Like what's going on?
- [27:39]
B
Yeah, it's the pork race.
- [27:40]
A
No serious TBPN for the pork industry in China. That's the, that's the real opportunity. There have been plenty of peaks and troughs in the past decade. The trough is active over there, literally. In 2018-2019, when African swine fever ravaged pig herds, many smaller backyard farms were wiped out. Prices went through the roof. Before long, the industry came trotting back. The big worry now is that it is doing too well. More efficient farming methods producing ever more pork are colliding with slow consumption of the meat. Now all the news is about overcapacity. Xi, who sells cuts of pork at a market in Beijing, says she only got to eat the meat on special occasions with a child. These days, she says it's so cheap people can have it whenever they fancy. The oversupply pushed live pig prices to a 15 year low in March. Some farmers are losing over $40 per animal. Part of the problem is that some pig farmers have aggressively expanded production in an attempt to gain a bigger share of a shrinking market. On top of that, big companies saved their bacon in the downturn by concentrating their pigs into mechanized modern facilities where they could be kept isolated from the swine fever. Modern farms are a marvel of industrial agriculture, though not of animal welfare. Tens of thousands of pigs are packed into multi story concrete buildings. One in Hubei province has 26 floors. It's a swine scraper. It's 26 floors of pigs.
- [29:06]
B
Do we know why consumption is declining?
- [29:09]
A
Just oversupply. So they got hit with this. They got hit with the swine flu. And they were worried about all the pigs getting sick and dying. And so they, instead of having them cross pollinate in like open fields, they push them into these literal skyscrapers that are 26 floors tall.
- [29:25]
B
But I would assume overproduction. You have oversupply, prices come down. But they're saying that just overall consumption is dropping too.
- [29:39]
A
Well, yes. So people are moving to chicken and seafood. Increasingly middle class. The middle class Chinese see pork as less healthy than chicken and seafood, but it's really like a supply side story that may be more pork than even China can eat. The average Chinese person guzzled 28kg of it in 2024, but that was 2kg less than in 2023. To boost prices, officials have slashed subsidies, ordered farms to cull droves, and told the pork reserve to Buy more meat to little effect. Some big firms are looking elsewhere.
- [30:12]
B
That is wild.
- [30:12]
A
China's biggest pig producer hopes to export its business model instead. Last year it said it would bring the first high rise, it would build the first high rise in Vietnam, capable of rearing 1.6 million million swine a year. Pig farms are going vertical as profits flatline. And so they are moving the pigs inside, which is winding up with increased yields because the pigs aren't getting sick anyway. America's best new weapon in Iran is a drone inspired by Iran. You had asked about this on one interview we did with some.
- [30:51]
B
Yeah, I forget who it was with, but I was, I was, you know, I was surprised to see the US copying the shahed because it feels like
- [30:59]
A
you were surprised to see them copying it or not copying it.
- [31:02]
B
No, it feels like entirely the smart move. It's battle tested, they're cheap. We have a good understanding of their capability because American allies have faced off against them. So there's a lot of reason that it's that it makes sense. But I feel like America had to swallow its pride to some degree to copy something that the enemy made.
- [31:27]
A
Yes, they're calling it the Toyota Corolla of drones. The powerful, low cost attack drone the US is using in its war with Iran doesn't come from one of America's more than 400 venture backed drone startups. And it isn't the product of Silicon Valley ingenuity. Instead, the drone having its moment in the Middle east conflict was designed by the US military itself using reverse engineered Iranian technology. From the earliest days of the war. The FLM 136, or Lucas as it is known, has been wiping out Iranian military targets while better funded hardware systems and drones from defense startups have had little involvement. It is a victory for the US military, which went from blueprint to battle ready drone in less than two years, jettisoning its tradition of slowly buying very expensive equipment. The creation of Lucas is an early proof point that's a narrative violation. New strategy of making cheap drones quickly and a sign that the Pentagon can change the way it does business to better prepare for modern conflict. So I want to know so much more about like. So they're not subcontracting this at all. This is all like is the entire supply chain. The US military itself, are they milling the parts in factories?
- [32:39]
B
During the Biden administration, a small group in the Defense Department seized on the idea of America building its own version of the Iranian Shahed, a fearsome attack drone that militaries and proxy militias across the globe have sought to duplicate Russia, which is lobbying about 4,000 modified Shaheds at Ukraine every month, according to Ukrainian government data did more than any other country to demonstrate the drone's capabilities. A small team in the US military's research and engineering office put together plans to build an attack drone based on deconstructing a shahed the military had recovered from Ukraine. It was the first known occasion in around half a century that the US had reverse engineered another country's military technology for its own use, former defense officials said. The last time it was a Soviet made pontoon bridge. Interesting. A former senior defense official described Lucas, which stands for low cost Unmanned Common Combat Attack System, as the Toyota Corolla of drones. It may not have all the features or top end components, but it was built to be affordable and plentiful. The cost of Lucas ranges from 10,000 to 55,000. That's a big range, according to a Pentagon spokesman. In line with the Iranian model Tomahawk long range cruise missiles, several hundred of which have been used in the war with Iran cut at least 2 million cost at least 2 million apiece.
- [33:52]
A
The defense Department is committed to scaling cost effective autonomous solutions for the Joint force and Lucas continues to be a prime example, the spokesman said. Former senior Pentagon official Michael Horowitz, who is one of the leaders of the team that developed Lucas, said that other militaries had the ability to make their own low cost long range precision strike weapons. The issue was the US was spending nothing $0 on that kind of system. He's now on the Council of Foreign Relations. Lucas was getting given a spot in a in 2024 in a Biden era initiative to field thousands of autonomous weapons by last August. Its inclusion was controversial, said former military officials. Lucas just wasn't just a mock up, but it beat out more mature systems on the offering. Interesting because the government owns Lucas intellectual property, it is using the same approach it employed in building ships during World War II enlisted a cross section of second and third tier manufacturers, okay, who crank out the drones on demand during wartime. Little known Scottsdale, Arizona based Spectre Works and Huntsville, Alabama based Integration Innovation were tapped to build the drones. So they are partnering with private companies to actually do build an assembly of these drones. A total of five manufacturers will be selected, each segment set up to produce 300 drones a month. A former senior defense official familiar with the plan said. Spectre Works and Integration Innovation didn't respond to requests for comment. The Marine Corps was first to use the drones and then ordered around 6,000 destined for the Indo Pacific. But then the war with Iran began. The drones were handed over to US CENTCOM in February and made their first appearance in combat. The Trump administration has enacted sweeping reforms in defense procurement, making it easier for the military to quickly buy weapons and emphasize commercial technology to modernize the US arsenal. In particular, an August decision by Defense Secretary Pete Hegseth to rescind long held requirements processes for acquiring technology made the rapid deployment of Lucas possible, current and former defense officials say. Still other changes will take longer to trickle through the Pentagon's bureaucracy, and it will take time to reorient America to a new way of fighting wars. And even as China is developing advanced ways to strike the U.S. while Lucas has been a success against Iran's degraded air defenses, that isn't a guarantee it will be a battlefield star in more complex environments, an electronic warfare expert said. In the Middle east there is no meaningful jamming of gps which can cause drones to crash or fly off course. Every technology gets defeated at some point, he said. There's still a worrisome there's also still a worrisome lack of cheap US Counter drone technology, which has allowed Iranian backed militias to continue using small drones to menace US Military bases in the Middle East. The small number of unmanned surface vessels in the region are still years away from being the autonomous fighting machines their manufacturers have promised. The absence of a broader supply of modern US cheap US Systems in the Iran war has served as a wake up call. We're not ready, said Julie Bush, co founder of the defense tech firm Valenor Enterprises and a former Palantir Technologies executive who has been on the show. The government doesn't have what it needs to scale that they what it needs
- [37:05]
B
at the scale that they need it.
- [37:07]
A
Yeah, did you see that AGM post Antonio Garcia Martinez said about how maybe there are actually ships that are going through the Strait of Hormuz right now, but they just turn off all of their transponders.
- [37:19]
B
Yeah, I mean I think the estimate is around 10 ten ships a day are going through, down from 100 pre war. Yeah, but there could be more that just aren't that again, have their transponder turns off.
- [37:34]
A
Yeah, he was saying something about like people will turn off the transponders even when they find like good fishing spots because they don't want other people to find find their good fishing spots. And so it's done more than people think, I guess. But Citrini is over there. Citrini research analyst made it over to the Strait of Hormuz in an absolutely insane move and some real crazy investigative journalism going on. I'm hoping to have Citrini on. I obviously want to be secure about whatever is shared because it does seem like a risky proposition to be over there right now, but love seeing the reporting so far. In other tech news, Anthropic is making its own splash with an acquisition. This was on Thursday, April 2. $400 million for coefficient bio started last fall developing an AI drug R& D platform. The startups team will be joining Anthropic's Healthcare Life Sciences group which is aimed at developing tools for biotech workflows ranging from drug discovery to clinical tests. Very exciting. Dimension capital owned over 50% who is dimension Capital? Have we had them on the show?
- [38:46]
B
I don't think so. We probably should.
- [38:48]
A
That feels like a multi stage research oriented investment firm partnering with companies across the frontiers of science and compute well. Huge win for them.
- [38:57]
B
Congrats to the not bad. Not bad at all for six months.
- [39:01]
A
There's also an article in the Wall street journal about OpenAI Anthropic's finances reveal challenge from Berber Gin Scoop God. OpenAI Anthropic are racing toward potentially record breaking IPOs by the end of the year. An inside look at the financials of both companies prior to funding rounds completed earlier this year show their Achilles heel the soaring costs needed to train new AI models. OpenAI expects to spend $121 billion on computing power for AI research in 2028. That means the company anticipates burning 85 billion that year even even after almost doubling sales from the years prior. Such losses would would dwarf that of virtually any other public company in history. Anthropic doesn't expect to spend nearly as much, but its rosiest forecasts tell a story similar story of mounting computing costs. Both companies are releasing new versions of their AI models at faster, at a faster cadence than ever before, while pouring more resources into the training runs that create them. The arms race is showing no signs of slowing.
- [40:06]
D
Yeah.
- [40:07]
B
So pull up this chart from Andrew Curran. This is from the Wall street journal piece. Projected OpenAI and anthropic model training spend for the remainder of this decade in billions. The Wall Street Journal says they got the data from financial documents shared with investors. So yeah, I think, I mean obviously absolutely wild numbers here. I think this is for training specifically, which is a cost that, that that can be adjusted.
- [40:38]
A
Yeah. Question of like. Yeah like each model by itself is profitable but you keep having to spend more on the bigger model.
- [40:46]
C
Tyler this is like emblematic of like the dwarf Ash critique of Dario, right, where he's like, if you basically compare open anthropic, like Dario is being way more conservative about spending, like, he's like, oh, well, we don't want to, you know, go broke, whatever. But yeah, I mean, when you see the chart like this, it's like pretty crazy.
- [41:03]
A
Was it the YOLO philosophy? It does seem like there's, there's a debate internal at OpenAI. According to the information around IPO timing. This is from the information from Anissa Gardizzi and Amir Afrati. OpenAI CEO and CFO diverge on IPO timing. Sam Altman has committed OpenAI to spend $600 billion in the next five years and privately said he wants to go public as soon as the fourth quarter despite expectations his company will burn more than 200 billion before it starts generating cash behind the scenes, according to the information. Sarah Fryer, his chief financial officer, has voiced concerns that reflect the tensions and risk inherent in the CEO's extraordinarily ambitious plans. OpenAI is committing billions of dollars a year in advance to help finance data centers. Fryer last year began reporting to the head of applications instead of Altman. Altman has excluded her from some conversations related to financial plans. And so you can go to the information to read more about that story. But it is extremely high stakes in general. The AI companies have, are they railroads? Are they SaaS companies? There's this incredible capex. Are they both electricity? Yeah, no one really has consensus here yet. And it feels like there's an ongoing divergence in how do you model these financially? How much risk risk should you take? There's also this question of like the end of the curve, the end of the exponential. We're seeing this exponential growth in model capability relative to investment dollars. The scaling laws have held for a long time, but at the same time, you can't just throw endless money because at a certain point you don't want to spend a trillion dollars to get like one more IQ point out of the model. There is a of lot limit to this.
- [42:55]
B
And so yeah, if you're thinking about like hiring an employee, it's like, okay, so this, this one individual is, you know, their, their, their base salary is going to be 200k a year. Or you could, you could, you could hire this other person and they're, they're one IQ point smarter. But you have to, you have, it's going to cost you $5 trillion, $5 million a year. The, the choice is, is obvious. So we'll see, we'll See, when we get to that. We'll see when we get to that point. Overall, I think like tensions between, this is not the first time there's been tension between a CFO and like an ambitious CEO. And so have you ever hired a
- [43:31]
A
CFO at any of your companies?
- [43:33]
B
No.
- [43:33]
F
Wow.
- [43:34]
A
Go, dude. Now we hired a CFO at my first company and it was, it was an awesome experience actually, but the tension was insane. But, but I was not, I was not the same CEO. And so the CFO came in and she had taken multiple companies public and was like, this is just a widgets business. This is so simple. Like we should just be like running this sufficiently. And of course there was like a big debate about that. But she's, she was very, very formative in my early business career.
- [44:03]
B
Yeah, it's interesting because that was, you know, consumer packaged goods company, but with a lot of Silicon Valley venture capital jammed into it. So the pressure from the board was one thing. And then you have the CFO who's saying, hey, we're selling.
- [44:17]
A
Yeah, and so much organic growth. But the nature of like Soylent and consumer packaged goods, like, it's not a fundamentally different business at the end of the day. Like it does just become a marketing manufacturing margin game and you eventually trade on ebitda. And so the, what do they call it, the reality distortion field doesn't quite apply. But when you're dealing with an entirely new technology, it's a whole different discussion. Anyway, there's another article in the Wall Street Journal about the new jobs that are being created by AI. Let's go through this. So AI is raising big fears about employment losses, but it's also giving rise to new engineering and training jobs. And we're going to have Liz Hoffman from Semaphore on the show later to talk about the March jobs data. There was a massive jobs beat and a whole bunch more jobs added to the economy. But the chart is crazy. It's like up and down every quarter.
- [45:21]
B
There's, yeah, the tough thing, you know, every single jobs report has been revised downward so massively that it's hard to look at a new jobs report and actually get excited when you have a good one print like that say, yeah, this time it's different.
- [45:36]
A
This time it's different.
- [45:37]
B
The last 12 have been revised downward
- [45:41]
A
and then now you have a war and major geopolitical tensions and this weird dynamic where the oil prices are driving gas prices, which is driving inflation, which is maybe going to cause less driving based vacations over the summer, less tourism, like you could see inflation plus some economic weakness regardless of what the technology industry is doing. And so you could wind up with a situation where rates have to stay high and so that creates unemployment. And it's a rough time to be a Fed governor, I'm sure. But let's dig into what the Wall Street Journal is talking about, where different jobs are playing a part here. So artificial intelligence has sparked fears it will become a job killer. There's also a research paper, I don't know PDF from OpenAI today, around the social contract and how the government should be thinking about redistribution and the safety net in the age of AGI. It's a long document and honestly I haven't had a chance to read it yet, but we will go through some of it later. This.
- [46:46]
B
I saw one response, someone just said, just put the, just put the tokens in the bag, bro. But we'll, we'll read it and we'll, we'll cover.
- [46:55]
A
Yeah, we'll figure it out. And yeah, it'll be interesting to see how it maps onto like previous political platforms, like who picks it up because like there's obviously a collection of political ideas and various politicians might say, hey, I've been saying that for a long time. I like that. Or like, I don't. I completely disagree with that. I have a different philosophy. But we'll, we'll work through it. So it's also. AI is also fueling a crop of new careers. I created 640,000 jobs between 2023 and 2025 in the U.S. according to an analysis by LinkedIn of job posting data, including new white collar positions such as head of AI and AI Engineer. That tally doesn't include the huge number of temporary construction jobs tied to building the mammoth data centers AI relies on. And I'm wondering how temporary will they be if the ramp, I mean, if the, if the CapEx ramp continues and you know you're going to build 10 times as many data centers, you would
- [47:54]
B
imagine there's 10 times some ways, like construction jobs. Many construction jobs are temporary. Right. You build, you build a house, job is over. You move and build the next one.
- [48:03]
A
Yeah. So LinkedIn's head of economics, Corey Ka says we are not talking enough about, we're not talking about enough jobs to change the direction of the labor market. But for AI roles, growth has been pretty much straight up and Citadel had something.
- [48:20]
B
Yeah. And for roles like AI engineer, to me that was just you were going to hire an engineer and you're slapping AI on the front of it because you Want somebody that wants you to excited about. Yeah, just somebody that's, that's excited about AI.
- [48:33]
A
Yeah. And maybe more greenfield projects. Maybe something that's, you know, the. It's like the new full stack. Like no longer are you hiring like a back end engineer. Front end engineer, necessarily like you. You might be hiring someone who's more flexible. What are you laughing at?
- [48:48]
B
I love how that the first example, this guy Zach, who they're profiling in this, the first, the first picture of him is just him with a surfboard running into the ocean.
- [48:58]
A
Hey, surfing after work. He's got a good work life balance. Let's read that.
- [49:02]
B
Looks like the middle of the day to me. Look at the, you know, just look at, look at where the light is, John. That's not after work. Unless he's wrapping up another word about surfing.
- [49:12]
A
I don't want you getting canceled again for being anti surfing post. What were you.
- [49:17]
B
You were anti surfing before surfing in really cold water before poor work.
- [49:21]
A
Oh, he's bad.
- [49:22]
B
Has not worked well for me.
- [49:24]
A
Okay, for you.
- [49:24]
B
Apparently there's people out there that.
- [49:28]
A
Yeah.
- [49:29]
B
Death threats.
- [49:30]
A
Yeah. Did you get death threats? No. You just got dunked on. It's fine. It happens. Zach Kinsler, who's 25 years old, got his master's degree in business analytics less than two years ago. In February, he assumed the title of head of Human AI solutions at Booth, an AI education startup based in Colorado Springs, Colorado. His job involves client training and using AI to speed up tasks for co workers. That is a good gig. Kinsler works remotely from San Diego, wanted to work with AI, and says he feels lucky to land in a growing field. The conversation about whether artificial intelligence is good or bad needs to go away because it's not going to go away, he said. One of the biggest questions facing a shaky US labor market has been that has been especially hard on white collar workers is whether AI's ability to mimic human skills like research, writing and coding will cause significant layoffs. Big cuts at Oracle this week while the company invests heavily in AI data centers underscored some of these worries. Corporate leaders, including some in the tech world, have issued grim forecasts about AI's potential to replace white collar workers at a massive scale. According to a recent Goldman Sachs research report, AI could automate tasks that account for a quarter of all working hours in the United States, especially in fields such as administrative support, legal work, and architecture and engineering. One, one interesting pitch I was hearing, I think it was from the OpenAI doc was go like, you know, I think it was during the Industrial Revolution, the unions lobbied for the weekend, the I idea of the weekend. And that just became a thing and stuck around forever basically. And, and, and so there's a question about like, you know, do we pitch a four day work week somehow nationally, some like, you know, bigger thing. I don't know. There's all these interesting like competitive dynamics and obviously people wind up working on the weekends because they're like, I want
- [51:22]
B
to outcompete the David center is like, I want all my enemies to move to a four day work week immediately where they can properly relax and mandate
- [51:30]
A
that, actually mandate that for everyone except me. Still, analysts say it's hard to judge how many job cuts thus far genuinely attributable to AI and which are being made for financial or operational reasons. This is something we've been going back and forth on forever. A new survey of 750 chief financial officers found that AI had essentially no negative employment effect in 2025. But data show employment employers are increasingly hiring for AI talent. In 2023, AI related roles made up only 1.6% of all job postings, according to an AI job tracker co led by Anil Gupta, professor at the University of Maryland's Robert H. Smith School of Business and Job Market company data company Linkup. Never heard of that before. Two years later that figure had more than doubled to 3.4% of all AI. Of all job post hostings being AI related, one rising job is head of AI. That's a good gig. In the three years from 2023 to 2025, companies sought to fill 225,000 such jobs. There are now 225,000 heads of AI.
- [52:37]
B
You need 20 years of experience prior for most of these jobs, which is maybe tough. Tough to put that together. No, I'm joking. We should talk about China's what's happening in the Chinese AI talent race. Over in the Economist.
- [52:55]
A
Yes. Dave Friedberg was talking about this on stage at Hill and Valley about how there's been this big flippening from where research is coming from. The headline stat is something like 50% of where is. Is it 50%? Okay. This was from Jensen Huang at Nvidia. He said, is it possible that the United States falls behind China? He asked himself a question during a question and answer session about artificial intelligence late last year. He says the answer is absolutely yes. That may seem surprising. For much of the last decade, America has been comfortably ahead in the AI race. Home to the most advanced companies is producing frontier models. Its engineers have access to deep pools of capital as well as a regular supply of Nvidia's cutting edge chips. But Mr. Wong's concern related to an equally important ingredient of innovation. Human talent. Until recently, most leading AI research was produced by experts based in the West. That is changing. In 2025, for the first time, more studies presented at the World Top AI Conference had lead authors based in China. Tyler, you have more?
- [54:08]
C
Yeah, I think it's just misleading, right?
- [54:09]
A
Okay, explain.
- [54:11]
B
A lot of the best researchers, Researchers in the US are, are studying, but they're not putting public.
- [54:17]
C
You can see if you scroll down on that article a little bit more, you can see a chart where the US like between 2015, 2020, it like looks like it's starting to go exponential and then basically plateaus.
- [54:27]
D
Right.
- [54:28]
C
Because all the best researchers basically go to the labs, then you don't publish anymore.
- [54:32]
A
Wait, so which chart are you referring to?
- [54:34]
C
The one in I'm looking in the Economist.
- [54:38]
A
Is it called active AI researchers in the thousands Student, early career. And so in the United States it's growing and then up until 2021 and then it stagnates because all the labs
- [54:50]
C
went closed and all the Chinese labs are still open source.
- [54:53]
A
Are still open source. Yeah. So yeah, I think that's a. I don't know. That's a very reasonable mitigating point here. There is just the question of like, do you still need a pipeline of open source researchers of robust research practice? Also, like, if you're in the Ilya Sutskever camp of like the age of research, maybe you do need a bunch of bizarre ideas that are happening and you get like, yeah, but I mean,
- [55:20]
C
Ilya's like definitely not publishing, right?
- [55:22]
A
Oh, true.
- [55:23]
C
He's like even more secretive.
- [55:24]
A
Yeah, yeah, but I think you could like expand from that into, into like the, the like there might be interesting, like, knock on research that gets pulled from random places and like the cross pollination is valuable. And even if he's not a practitioner of that, you can still make the argument that research is valuable and cross pollination is also valuable. And China does have that advantage.
- [55:50]
C
Yeah, I just think like, if you look at China, like there's the anecdotal evidence of like what happened to the Quinn researchers. Right. Like, you know, the people running that company are just like, not.
- [55:59]
A
Do we ever find out they go to XAI or metal?
- [56:02]
C
I don't think we know yet.
- [56:02]
A
We don't know yet.
- [56:03]
C
But like, clearly like something is like different about how they think about researchers than in the U.S. right? Because those guys are like extremely good.
- [56:11]
A
Yeah.
- [56:11]
C
And somehow there was some reorg happening.
- [56:14]
A
The chat is demanding an ad break. We'll figure it out. A lot of people were saying that, you know, the ads were part of the program. We will figure out a way to do something ad related. Until now you have to put up with some random soundboard. Yeah. And that's the best I can do for you. But there is a different article in the Economist. People who are just watching for the, the ads, I guess. China's new master plan for its tech economy in 2030 and beyond. And so they have. This is the 15th five year plan for China's economic development. This was adopted in March and the Economist is breaking it down. It talks of industrial upgrading, new quality, productive forces and the like. Yet in plain language it translates into Elon Musk's fever dream. So China wants to build skies dotted with flying taxis. Fusion power fueling factories manned by humanoid robots, unstoppable quantum computers, 6G mobile devices plugged directly into people's brains. It's a dream come true for you, Jordy. Are you gonna, you're gonna renounce your citizenship?
- [57:21]
B
What? Yeah.
- [57:26]
A
You're like, yeah, no, cow.
- [57:28]
B
Absolutely.
- [57:29]
A
Yeah. Sign me up. Sign, sign me up.
- [57:30]
B
6G.
- [57:31]
A
No, but there's, I mean, obviously they're taking frontier sci fi development very, very seriously and it has a lot of knock on effects. So past plans also displayed gumption. In 2015, the most high profile plan in years, dubbed Made in China, 2025 set the goal of catching up with America and ending reliance on foreign technology. But catching up, which China has pulled off in areas like electric cars, clean energy and even artificial intelligence is one thing. Dominating technology of the future is another. Can they do it? One reason for this breathtaking ambition is the desire of Xi Jinping, China's leader, to usher in a modernized socialist state by 2035. Remember, he thinks he's going to live to, I think 150. He was caught on maybe some hot mic saying so he's thinking in centuries. Still, a modernized Chinese socialist is generating.
- [58:26]
B
It's possible he knew he was mic'd up and he wanted to kind of downplay how he's thinking, Right. He thought in his head, he's like, oh, I'm easily 1,000, easily 1,000 if I don't hit 1K.
- [58:37]
G
Yeah.
- [58:38]
A
But he's like, I don't wanna sound
- [58:39]
B
crazy, but I don't wanna sound crazy. I've gotta give him something illegal.
- [58:42]
A
Yeah, ballparking. Ballparking. So currently a modernized Chinese socialist is one generating between $20,000 and 30,000 USD in economic value per year. That's up from less than $14,000 today. So in 2035 they want to be more than double what they are today of $14,000. Sorry, had that backwards. To meet that goal itself, a step towards China becoming a modernized socialist world power by 2049, the centennial of communist rule, GDP per person must grow 4 to 8% a year in the next decade. With Chinese consumers in a dour mood and exporters facing geopolitical uncertainty, the party believes only world beating technology and resulting productivity gains can ensure success. So that requires picking up the pace, says the economist. Whereas earlier plans set distinct objectives for strategic industries and for scientific innovation, industrial policy is now being extended to out there tech, notes Camille of Rhodium, a research firm. The latest plan ordains the commercialization of fledgling fields like AI, robots, hydrogen power and brain computer interfaces all in the next five years. Within another five. The party wants breakthroughs and app.
- [59:59]
B
Hate to interrupt you John, but Chat is saying Ryan and Jeff are saying put a scroller of this the guest schedule.
- [60:07]
A
Oh that's good.
- [60:09]
B
Put the guest schedule on the scroller which I think is good. Okay. And then.
- [60:13]
A
We've done that before actually.
- [60:14]
B
Where should we go to save both time and money? You know where to go.
- [60:18]
A
Ramp.com Baby time is money. Save both easy use corporate cards, bill pay accounting a whole lot more all in one place. You know I'm not going to forget the adderies. I still have my job a lot
- [60:31]
B
to me over the weekend. Yeah, it was just. Just for the two of us.
- [60:35]
A
Yes. Subliminal ad reads this will happen. The point of the plan is to signal to officials and investors which initiatives to back this unlocks funds from central and local governments. Private capital follows on the assumption state involvement reduces risk. Research clusters attract not just technologists and money, but also marketers, lawyers and other professionals needed to take tech from the lab into markets. Host cities enlist armies of bureaucrats who develop domain expertise. Proponents of Chinese techno planning point to AI as proof that it works for cutting edge innovation. When in 2017 China declared its intention to enter the global high end value chain for AI by 2025, foreigners scoffed. Have they succeeded in entering the global high end value chain for AI by 2025?
- [61:28]
B
No,
- [61:31]
A
global. I mean the.
- [61:33]
B
When I think global high end value
- [61:34]
A
chain I think semiconductors. Yeah, yeah, not quite.
- [61:38]
B
I think like the actual end product.
- [61:41]
A
I mean the video model is really good. Sea dance.
- [61:43]
B
Totally.
- [61:44]
A
But that's maybe not the maybe that doesn't count as the high end value chain. I don't know. Anyway, let's see what the economists say. In January last year, Western markets shuddered when Deep Seek, an AI lab, released a model that rivaled top American ones. No one is scoffing at the new goal of turning China into, quote, the world's primary AI innovation center. I'm scoffing. Are you scoffing? Scoffed up, scoffed up. What do you think?
- [62:12]
C
Yeah, I'm scoffing.
- [62:12]
A
You're scoffing.
- [62:13]
C
The whole reason that China Chinese AI is good is because they're just as distilling on American models. Like we know this, this is like true now. Like we know this for sure.
- [62:21]
A
And, and the reason that the video models are good is because they don't, they don't follow ip.
- [62:25]
C
Yes. Yeah, this is not cope.
- [62:28]
A
Yeah, I don't think this is cope. I think the Economist is coping. Oh well, they are, they are doing a lot of other things though. So early results in several other areas look encouraging too. The low altitude economy. Ooh, new buzzword, new coinage. We got the orbital economy up in space. We got the low altitude economy of delivery drones and flying cabs. Born of private sector ingenuity, took off after capturing the attention of officialdom around 2021. State imprimatur for brain computer interfaces, first named a Future industry in 2024 and a subject of its own plan in late 2025, has led universities to set up research projects and, and startups to launch products. Cities host specialist industrial zones and hospitals have published pricing guidelines for brain implants. That's. They're moving quick. I would, I would expect that the low altitude economy does very, very well. I mean DJI is super legit. Of course they're going to have to compete with all of the different. I mean, not really compete because I doubt that.
- [63:32]
B
Yeah. Does DJI have any delivery focused products?
- [63:36]
A
I don't know. But I mean Zipline just raised more money. They're doing very well. Google has a project and there's, there's
- [63:42]
B
a whole bunch of flycart 100.
- [63:45]
A
Okay.
- [63:46]
B
I wonder what the scale is specifically for. It's an 85 kilogram max payload capacity.
- [63:51]
A
Yeah.
- [63:52]
B
12 kilo kilometer max flight.
- [63:55]
A
But again, that's something that doesn't, I mean it requires like innovation but really it's like a lot of manufacturing and regulation. Regulatory like it's not necessarily frontier.
- [64:04]
B
Yeah. When I, when I looked at, yeah. Looking at the top of their, looking at the top of their plan, it's like they wanted to do electric cars, clean energy and AI? They have absolutely crushed it for the most part.
- [64:16]
A
So for sure skepticism is warranted. However, thank you economist. We will be skeptics here. Earlier plans including made in China 2025 missed many goals. It doesn't feel like it. It feels like they crushed that one. They made everything. China beats the world in renewables, renewables tech and electric cars and matches it in AI. Debatable, but lags behind in critical areas like advanced chips. Capital ends up wasted if it flows to places in which local local officials duplicate efforts elsewhere. Chase industries Despite a lack of tech talent or and or are loath to abandon failures. China's apparent desire to dominate every emerging industry may spread resources too thinly. Making a hoo ha about the plans does not help. Uh oh, we're in trouble. Made in China 2025 spooked America which saw it as a challenge to its techno economic dominance. It hobbled Chinese efforts in areas like chip making by restricting exports of crucial American inputs, the ASML lithography machines. Of course there is now talk of made in China 2020 35. But any technology named in the latest plan can still expect a target on its back. Talk of using undefined unconventional measures to achieve the plan's goals will not put Americans minds at ease. The biggest challenge for Chinese planners is a function of their catch up success. Those occurred in fields where the technology like photovoltaic cells or lithium ion batteries had been around for decades and the market for electricity or cars was mature. Moving to tech's bleeding edge involves a lot more unknowns. Is there a business case for hydrogen power? How many people will want brain implants?
- [65:52]
B
This guy. This guy over here.
- [65:54]
A
Sign me up. Can quantum computers and fusion even be made to work outside the lab? China's plans implies it knows the answer. Market forces may have other ideas. Interesting. Well, we have some advice for young men in China who are trying to open unseat America's techno capitalist dominance. This comes from Sean Frank. He gives 25 practical tips to improve your life. Let's run through them. He says he's about to have his first son. So congratulations to Sean Frank over at Ridge. Here's what he wished he learned earlier in life. And I want your agree or disagree. So a $40 to $90 water flosser can save you a minimum of $4,000 on dental work. Use it every day. Are you a water pick guy?
- [66:37]
B
Does John have.
- [66:37]
A
He has bags.
- [66:38]
B
Does Sean investor in water pick? I guess cordless advanced 2.0?
- [66:43]
A
I don't know. I've heard really good things. I've never done. Have you ever used a water pick?
- [66:46]
C
When I had braces, I used it.
- [66:49]
A
I do the analog. I actually. I actually floss, but I use the physical floss. But maybe. Maybe I should get one of these. I don't know. He speaks highly of it.
- [66:57]
B
Are you a big cavity guy?
- [66:58]
A
No.
- [66:59]
B
Have you ever got a cavity?
- [67:01]
A
Maybe once or something. But, no, I do pretty well. I like brushing my teeth. I feel it's refreshing. 2 Learn something people will pay you for. Sports are awesome. College will be fun, but you need to learn a skill that the market values. It can be anything. A locksmith will have a better life than a master's in archaeology taking shots. Didn't you take a dinosaur class?
- [67:25]
B
I did. I did.
- [67:27]
H
Wow.
- [67:28]
A
Okay.
- [67:28]
B
I studied for at least one semester for a specific requirement.
- [67:34]
A
You're basically an archaeologist. You should get a master's in archaeology.
- [67:37]
B
Archaeology. It is interesting because if you want to make $40,000 a year and spend all your time thinking about dinosaurs and that is what you qualify as, a great life, then you're probably going to have a much better time, much better life than, you know, being a locksmith.
- [67:55]
A
And I think we were predicting that. Like, you know, everyone's wondering, like, where. Where will Jordi. Where will John go as influencers? And I think, like, the logical place was that you'd become a member of the data sphere, sort of like the manosphere, but for fatherhood. And a true knowledge of dinosaurs is pretty key to rearing a child, especially a young.
- [68:18]
B
Yeah, I would say when I became a dad, I struggled intensely early on with pronouncing the names of the different dinosaurs. Right. There's hundreds. They have these names that are all just kind of, like, mashed together. It seems like they're always making new dinosaurs. You're getting.
- [68:35]
A
And they renamed a bunch of dinosaurs.
- [68:37]
B
We probably have, like, over 50 different dinosaur books.
- [68:40]
A
They were lied to. In Jurassic park, the velociraptor is the size of a chicken.
- [68:44]
B
I know. That's one of the biggest. That's one of the biggest kind of like.
- [68:47]
A
Yeah. Moments. I think they refer to it as, like, the red pill. It's like the red pill moment where you realize, like, everything you learned in school was a lie. Like when you learned velociraptor being the
- [68:59]
B
size of chicken with a bunch of feathers.
- [69:01]
A
It makes you question everything.
- [69:03]
B
Yeah.
- [69:03]
A
Makes you question everything. It starts a lot of conspiratorial thinking. For sure.
- [69:07]
B
Sure does.
- [69:08]
A
Okay, what about this one? Number three? Just buy Timeless brands. Head to toe. Ralph Lauren looks good in 1990-2000-2010-2020. And it will look good in 2030. You have no idea when this photo was taken. Could be this week. Last year. 2004. It was 2004. What do you think? Timeless brands. Bullish. Bearish.
- [69:28]
B
Yeah. I think a millennial, late millennial, early Gen Z. Forgot about the Timeless brands because there were so many new D2C brands for every possible category. But I think Ralph Lauren and some of the other classics have just continued. Continue to cook.
- [69:48]
A
If it doesn't matter, buy a second hand. My best friend spends less than 500 per year on clothes and shoes. Gets by just fine. This applies to most things. Oh, buy secondhand clothes. But your wedding suit. Let's just buy new. Dude. Be funny. Being funny is a skill. You can get funnier. You can learn to be funnier. People will like you more if you have a sense of humor. You will get dates by being funny. Those dates will go better if you are funny. In 180 days, you will be top 5% funny and your life will be 60% better. How is that possible? Is he selling a course on humor? This is a crazy thing to learn. I don't even know what to do.
- [70:27]
B
80 days, I can guarantee you will be in the top 5% funny or your money back.
- [70:34]
A
Funny Mastermind. Is he on intro.com? i want to sign up. We need to get him to coach us. This is. He's certainly funny with this post. Be the friend you wish you had. Everyone is lonely. Everyone is sitting at home more than they want. Just do things and invite people. It isn't weird or cringe if they feel that it's on them. Text people out of nowhere and wish them well. Don't wait around for someone to invite you on their adventure. Time for a side quest. You have to make the life you want. It's okay to leave everyone behind and go do something cool. Don't feel obligations to people who are trying to hold you back. Forget about whoa, whoa, whoa shots.
- [71:09]
B
But before I think that, I think I've figured out why Sean's doing this.
- [71:15]
A
Yeah.
- [71:15]
B
He's a very busy guy.
- [71:16]
A
Yeah.
- [71:17]
B
Have a kid running a business with hundreds of millions of dollars of revenue. He's launching new brands. All this stuff. So. So I think this entire list is try to. He sees some of the. Some of the young guns kind of nipping at his heels a little bit and he's like, I need to.
- [71:30]
A
I need to distract him.
- [71:31]
B
I need to Distract him. I need to. I need to throw him off the scent.
- [71:35]
A
I believe it. Well, he's taking shots at me with number eight. He says being tall doesn't matter. Being lean does. Yeah, this is a good point though. He says you have no control over your height. And honestly, it's just cope to care. I'm five' eight or five' nine and height has never been a factor in anything I do. But you do need to be physically strong. Everyone needs to be able to do a pull. That's a good point. But with inserts, he could be six' one, six' two, cowboy boots, cowboy hats, he could be up six' three, six' four, no problem.
- [72:01]
B
Sounds like. Sounds like cope from Sean.
- [72:03]
A
He says no one is thinking about you. Well, I'm thinking about you, Sean. He says, how often do you think about your old co workers? Maybe once a year in passing. They aren't thinking about you either. Don't do things for the opinions of other people because those opinions are fleeting. That's a great point. It's okay to fail because only people only remember the wins. You can be a loser for 10 years in a row, failure after failure, bankrupt. But as soon as you hit a big win, everyone loves you. This is a common theme here. But other people's validation is worthless. Money is very important. Speedrun makes Speedrun. Making as much money as possible. Leave jobs, move states, change careers, get equity and build leverage in your field. Be an expert. Be vocal. Share your learnings. Life gets easier. Don't choose a profession that is someone's passion. If you are competing with someone who would do it for free. Get out of the field. You want to be one of one. Your profession has to be your passion. These are good missions. And then he goes back to sunscreen. He's just giving like wisdom. And then he's just like. And here's two more screenshots from direct to consumer company Face moisturizer and better screen UV serum. Is he holding Kiehl's? He says, I use Kiehl's sunscreen and Wild Roman. I do love Wild Roman. Shout out to Sahil Bloom. But anything is better than Nothing. The cheapest $1 tube will put you in the 1% of men. Are you a daily sunscreen guy? No, but lotion, anything. Moisturizer?
- [73:28]
B
Yeah, I'll use sauna. I'll use a moisturizer. But yeah, sunscreen. I got kind of cooked this weekend.
- [73:37]
A
Oh, yeah. A lot of time on the bench. Find your cohort. This is a group of people around your Age in your chosen field, most often not school friends. He says drinking is bad. You should still try it and do it, but the risk reward is pretty low. It would be good to stop drinking by the time you're 25. Weed is bad and you should skip that. Agree. Maybe old school weed was fun and free but now this new stuff is too strong and will make you crazy. That is a good, good point. Find your relationship with God. God is real and cool and great and everywhere. But someone can't just tell you that. You got to find it. This will take your whole life. Never shame someone for doing what they have to do to survive. You don't know how easy you have it. You aren't better than anyone. The world is built brick by brick by every single person doing their part. I don't know how my microwave works or water treatment works, but I love a burrito in a shower. If someone earns less in a different way, they are important. Just tip well. So much fighting and discourse about tipping getting out of hand. Just forget it and tip well. We had this discussion earlier about when they turn the iPad around. You got to just tip. Be generous but logical. I'll give anyone in my life money once. It's a gift. I'm never being paid back. But when they ask again, they think you are a piggy bank. You are. Who you marry will be the most important decision of your life. My wife is my best friend. We are perfect partners. And you better find that because you are with this person 12 plus hours a day. Forever. Act with honesty in everything you do. You can be cutthroat. You can be swift and decisive. But never steal. And don't lie. If you are going to beat someone, you tell them how and why ahead of time. And number 25, no one is coming to save you. You are a man. No one cares if you are wronged. No one cares if something is unfair. You have to save yourself. Well, Sahil.
- [75:26]
B
Bullshit. This saved threads.
- [75:28]
A
He saved threads.
- [75:29]
B
I mean, we haven't seen a thread like this. Oh yeah, in a long time.
- [75:32]
A
This could have been an article, but he went back to the thread meta. I wonder if the thread meta is permanently back in vogue. I don't know. Anyway, we have our first guest of the show in the waiting room. Let's bring in Sam Broner from Better Money. Sam, how are you doing?
- [75:49]
E
I'm doing great guys. First guest of the day. This is fantastic.
- [75:52]
A
Yes.
- [75:52]
B
Starting the week off strong and kick us off.
- [75:55]
A
The whole problem we're facing is there's not Enough noise, there's not enough soundboard. So kick us off with your news so I can slam the gong as hard as possible.
- [76:05]
E
Well, look, we. We raised $10 million to build a stablecoin clearinghouse. We're hit that gong. Yeah, we're here to solve the problem of doing payments with stablecoins, making stablecoins really work for payments companies.
- [76:21]
A
Okay, back up and explain what, what, what is a clearinghouse? Broadly? Give me like, the traffic.
- [76:28]
B
Yeah. What is the tradfi call?
- [76:30]
E
Yeah, well, you use clearinghouses all the time. Like when you do an ach, you're going from. You're sending money from one bank to another bank. Yeah, this is a clearinghouse is just how you connect financial institutions. There's a bunch of them. They're used frequently in payments today. Just so you guys know, for stablecoins, when you want to go from one stablecoin to another, it's the equivalent of if you had to like, sell Wells Fargo dollars to buy bank of America dollars. And we know that's not how payments work. You probably have an intuitive understanding for that. And if you're a trad payments company, you're confused by this. And so we solve that problem. We make stablecoin sort of work how trad payments companies expect them to work.
- [77:11]
A
And.
- [77:11]
B
Okay, and is that going from USDT to usdc, or are there a bunch of other pairs? What pairs actually matter?
- [77:18]
E
Yeah, there's a bunch of pairs. So we support the Genius Bill compliant stablecoins, and we work with a bunch of the stablecoin issuance platforms, like Bridge, like Braille. We can work with Agora, M0, and Frax. And so we have a bunch of great partners that we support, their stable coins.
- [77:37]
A
And walk me through the background how you got to this moment, launching the company, all that.
- [77:42]
D
Yeah.
- [77:43]
E
So I worked at the Boston Fed on their stablecoin initiative. Pretty trad stuff, excellent institution and loved that experience. And then I was an investor at Andreessen Horowitz crypto for three years. Priced off.
- [77:57]
B
Explain Andreessen. Explain Andreessen Horowitz.
- [78:01]
E
So, a 160.
- [78:03]
A
Wait, was the Boston Fed project technically like a CBDC?
- [78:08]
E
Yeah, it was. It's kind of controversial, by the way. Yeah, real stablecoin land. They don't love CBDCs, but it was very interesting.
- [78:17]
A
It feels like the CBDC movement has, like, very much lost momentum. Is that your read, or do you think there will be like a resurgence and central banks will actually play a role in the stablecoin ecosystem maybe a few years down? The line.
- [78:32]
E
Yeah, I think that stablecoins work well now and the fact that you can send any amount of money anywhere for a fraction of a penny is a good thing. And so the need might have dried up. Like private stablecoins that are well regulated are working.
- [78:49]
A
Are there people in government who are still like, oh, we got to get, you know, the Fed to control this? Like we just like as a matter of like political ideology, like the Fed must, must have control over the issuance of, of something that looks like US Dollars.
- [79:07]
E
I don't think that's a huge narrative right now. Mostly because when you go to a bank, like you're, you're relying on their balance sheet to do your banking. So there's. The Fed doesn't really get involved with everyday consumer payments anyway. They like to work through these institutions. Institutions. There's this big bill called the Genius act that came out in July of 2025 that sets for the regulatory tone for first stablecoins and it builds into that, that meta like the Fed expects to work with other institutions to make happen.
- [79:39]
A
Yeah, walk through the Genius. You said it's like still being implemented. Like, we've covered it a few times, but where are we in the rollout and like the calcification of the actual law and rules that will all be downstream that like wind up getting implemented into stablecoin platforms.
- [79:59]
E
Okay, yeah. So July, the legislation comes out and it has really widespread bipartisan support over the last few months. The rules are now getting made more specifically, like, you know, literally, how do you do the accounting? What is the compliance obligation? Where does the money have to it? The more interesting thing though is that big companies now feel very ready to adopt stablecoins. We hear about multiple RFPs for stablecoin projects a week. You get to work with people.
- [80:30]
A
Yeah.
- [80:31]
E
And that's actually for a breakneck pace for these big orgs. Like, they're not a big payments company is not accustomed to shipping a whole new product line on a whole new payment rail in seven months. But that's what's happening right now.
- [80:44]
A
So what?
- [80:45]
B
What? Yeah, so. So a big institution is like, okay, the stablecoin seemed to be sticking around. I kind of need to create a strategy here. What are the things going through their head that they care about in terms of actually, you know, integrating them into their product suite? I'm assuming they want to figure out how to make money from them. I'm assuming they, they are very risk averse early on. But how are they thinking about setting up a project?
- [81:13]
E
Yeah, I Mean, the first conversation probably is, what should we do about stablecoins? And then that's not the right time to really launch into a new stablecoin product. You got to identify a real need. And the real need is typically we can improve the quality of our treasury management, or we have a product that involves payments that we could do much better. So that might be remittances, it might be agentic payments, it might be streaming payments, it could be trade finance. And you know that that's often. But this is, this is the kind of thing that they're excited to improve on.
- [81:49]
A
At what level of abstraction is integration actually happening? Because I imagine if I'm like, if I'm a big company, can I just go to my bank and say, okay, I'm sick of like these ACH fees. I want you to figure out how to use stablecoins, and then I want to pay less. Or whatever platform they're using to move money they like, the platform probably jumps on it. Like, at what point is a company that's not a financial institution integrating stablecoins?
- [82:21]
E
So first I just want to give a little. There's been a long history of big enterprises getting deeper into the payment stack. Airbnb, Shopify, Square, these companies like, kind of own banks now. They want that additional level of control to make their product better.
- [82:38]
A
Yeah.
- [82:38]
E
And they can do all of this interesting next generation stuff once they get that integrated. And so we see a similar thing where for many companies, going to your bank or your payments provider is the right place to start. But there's a ton of ambitious tech and fintech payments and banking companies that want to get even closer to the rails so they can optimize the quality of their product. We'll see all things happen. I mean, there's always been retailers to simplify the stack.
- [83:08]
A
I remember it might have been Uber or maybe it was Airbnb, but there were a few companies that sort of launched like instant payouts for. It happened a lot on like gig work platforms. And it felt like the platform was basically just eating two days of working capital by paying for the service that's rendered immediately, even though they weren't going to get money from their customer for two days because of the transfer. Is that, is that the main motivation, like speed?
- [83:36]
E
I love that you brought that up, by the way. That's a pretty deep cut. So that whole thing is unlocked by Durbin exempt debit cards. This is the ability to charge higher cards. Okay, yeah, totally a wonk thing.
- [83:50]
A
Yeah.
- [83:50]
E
But there's this, this rule in the US where if a bank has under a certain amount of assets, they can issue a debit card that takes a higher fee on swipes. That's how they pay for the working capital. In that example, like they don't front the two days.
- [84:07]
A
I thought they were just like raising debt or so or doing some financial engineering and just being like, look, it's going to be so valuable for our customers to pay on Monday and then the gig worker that delivered the food or delivered the car on that day to get paid the same day that they were just like, yeah. And we'll just have this massive two day growing working capital bill. But it's interesting that they've already found a workaround. So then does that make the stable current argument like weaker because they already figured out a hack or will stablecoins allow them to like drop the cost of doing that process project?
- [84:37]
E
Okay, so I think it's both like, okay, it's often about cross selling. The Durbin exempt card pays for part of that working capital bill, but not all of it. Yes, it makes for a more compelling product, but probably the most interesting part is to build that product takes a ton of engineers and a ton of money. And there's a, there's many businesses who can't afford that and would like to still offer that kind of compelling product.
- [84:59]
A
Yeah.
- [85:00]
E
And you like that's a pretty limited product. We only only figured out instant payout for that one category. Workers, debit cards. Yeah, there's a ton of other places. Maybe it's buying groceries, maybe it's agency payments where you might want that similar instant payout facility.
- [85:15]
A
Yeah, yeah, that makes a lot of sense. So yeah. What, what, what has like the launch of the company looked like? Is it like, are you dealing with regulatory filings and getting like banking licenses? Is it writing code? Like what's the shape of the business?
- [85:32]
E
Yeah, well we, we write a lot of code. I'm an engineer. Like that's one of my favorite things to do. We rely on great partners for the regs like that. You know, they help us with that. So we build on their infrastructure. But the shape of the company is really figuring out how we can build better products for payments codes, fintechs, money apps generally where they get this one to one guarantee, one stablecoin equals $1 and they know when the money will arrive. Those are two things that don't exist right now for a lot of stablecoin offerings might be surprising, but that's something that payments companies really do require for them to run their business.
- [86:15]
A
Well, how are you thinking about the strength of the dollar broadly? Is that like an important thing to track? I mean we saw the news about tether buying like an insane amount of gold and then there was this sort of narrative violation around the war causing actually a flight to the dollar and the dollar strengthening even though obviously it's a very tumultuous time. Like how have you been processing just the demand for the dollar generally? Because that's like the entire stablecoin boom is sort of predicated on it.
- [86:47]
E
Yeah, I mean I'm unabashedly pro$, but it's not sort of besides the point. There's no problem. There's no product in the world that has more product market fit in the dollar you could get. There's like nothing you could give anyone in the world that they everyone agree is valuable more than a dollar.
- [87:06]
A
Yeah.
- [87:06]
E
And look, we can talk all day about whether that changes a little bit, but for now people want dollars.
- [87:14]
A
Yeah. Then in terms of your go to market growth, are you focused on those big companies, Fortune 500 companies? Are you selling deeper in the stack B2B or B2B2B? How are you actually sourcing customers, growing the business?
- [87:34]
E
Yeah, it's a little bit of all of that. Are we see big companies who really want to be on stable coins now because they can simplify a global treasury or build a new product. And we see a ton of very fast moving, very savvy fintechs who want the same. Luckily for us, it's the same platform. It's the clearinghouse. And that's similar to how JP Morgan Chase and Wells Fargo all use ach but so does Bridgewood Savings bank and Seattle First Chemical Bank. You know, all types of money ask.
- [88:08]
A
Sorry, we just had something fall in the studio. Just a chair or something. I want to talk about particularly other movements to stablish things on chain. There was talk a few years ago about mortgages on chain, real estate on chain.
- [88:28]
B
Yeah,
- [88:31]
A
RWAs was like the buzzword. Have you been tracking any of that? Is there progress?
- [88:36]
E
There's a ton of progress. I mean certainly worse. I think today there's a big announcement about another large trading venue trying to do on chain securities. Yeah, I think it's likely to happen because people want access to 247 trading. There's events that happen outside of trading hours where it's helpful to have deep liquidity to react to it. Certainly at as you can see, you saw so many of these stablecoin companies and so many of the RWA Companies that were bringing the rest of finance on chain. In the recent months, I've been pretty narrowly focused on payments. But they touch RWAs because often you're paying into a trading venue in order to do trading there. We'll see a slow drip over months. This is not the kind of infrastructure that gets built in a day, but I think it will surprise people by being the type of infrastructure that gets built in a year or in 18 months and you start to see a lot more access soon.
- [89:30]
A
Yeah. Why, why is it slow? Is it. Is it because. I understand with like Bitcoin, you know, you have this consensus of all these different developers. It takes a long time to get agreement, but at some point it feels like the pace of acceleration in software needs to catch, catch up. Are you feeling that at all?
- [89:51]
E
Yeah, it's definitely happening right now. I'll give you one little example. You own some public equity and you once a quarter get this thick booklet of paperwork from them that tells you about their quarterly. This is a requirement. Like when you own a stock, you are getting that paper in the mail with their quarterly earnings. And so you got to bring all of that infrastructure to interact with on chain ownership. And there's these little pieces that all need to be solved well, in order to bring all these assets on chain. A lot of financial assets still involve paperwork and they just aren't situated for a digital world yet. But I think we're all going to enjoy it when they are.
- [90:33]
C
Yeah.
- [90:34]
B
Another way to think about it, like bringing real estate on chain, right? It sounds like cool and futuristic, but then like for transactions like somebody buying their own home, if somebody comes to them and says, hey, I can help you buy your home on chain and you'll save a couple thousand dollars on this part of the process. That's not a super compelling pitch. Whereas Sam over here, if you're saying like, hey, you're moving millions, hundreds of millions, billions of dollars annually, you can save a very meaningful, meaningfully meaningful amount by adopting stables. It's just a very different kind of trade.
- [91:16]
E
I agree with that. And I think there's still homeownership records that are in some basement underneath a municipality's building. That's going to take years to digitize those files. So these are the kinds of things where you really got to think through the weeds of how you bring things on chain. I will say, if you're using the same, same technology every day, people get accustomed to it much faster. I think it's likely to happen with the payment scenario where you're saving a couple of bucks on a daily transaction and it starts to feel like part of your life. It's something you can really rely on.
- [91:49]
A
Last question from the chat. Do you see prediction markets driving stablecoin adoption? Easy one.
- [91:58]
B
What was that reaction?
- [92:00]
E
Yeah, well. Well, the truth is that as the on chain world gets more active, it's a positive feedback loop because more people have wallets, more people have identities, and people get more comfortable with the ux. So there's sort of this general network effect similar to what the Internet had, where actually one more popular website begets the next popular website because you're accustomed to going into the search bar and googling the next thing. And so yes, I do think that will draw more folks into stables.
- [92:32]
A
Yeah, but probably like less important than the genius act, but still like, you know, one link in the chain, metaphorically. Well, thank you so much for taking the time to come chat with us. Congrats on the round and we'll talk to you soon.
- [92:47]
E
See you guys.
- [92:48]
A
Have a good one. Goodbye. Up next, we have John Slotkin from Geisinger to revisit the story of the $1 billion one person startup. We're getting to the bottom of it. Let's see if he's here. I think he is. John, how are you doing?
- [93:05]
D
Good.
- [93:05]
A
How are you guys doing?
- [93:06]
F
And first of all, congratulations on everything. Great to see you again.
- [93:09]
A
Thank you. Yeah, great to see you again. Thank you. So, I mean, how did you process this story? Where do you think is good to start? Do you want to maybe set, set the table with a little bit of your background and then some of the understanding of what the claims were made and then we can go through them one at a time. Yeah, sure.
- [93:30]
F
Sounds good. I'm a neurosurgeon, I practice. I'm also an investor over at Scrub Capital and I invest in digital health quite a bit. Look, when I saw this story, just like I think a lot of us, I wanted this story to be true.
- [93:45]
A
Yeah.
- [93:46]
F
So we have an extraordinary reporter and a great venue. And I think what happened is we ended up with a tech story when what we needed was a health story. So we had different questions asked of different people to really go a layer deeper before we anointed this as this great example of where we should go. And look, I think part of it is we're all guilty of having wanted this to be exactly what it seemed to be. I think investors were guilty of it. Writers, founders, and honestly, guys, probably patients too, because tech stories, they feel consumable, they feel Easy. But look, revenue, when it's absent, probably some of the needed regulatory context, that's where we need to go deeper. So that's, that's where I came from at this.
- [94:30]
A
So, yeah, unpack that idea. Revenue, you know, free of the context or it needs more context because there are like several different pieces to that. The marketing claims, but also the margins, all these different things. What popped out to you first, where you were like this seems maybe too good to be true.
- [94:49]
F
Yeah. For me, the biggest thing about the article, and it's a great reporter, a decorated reporter, was what wasn't in the article. Six weeks before the article came out, FDA sent a warning letter to this company. Now, to be clear, they sent them to many. Yeah, and that's fair. But those weren't featured and anointed in the New York Times. Yeah, those other companies that receive those letters, they are also some of their supply chain partners named in the article are subject of a RICO lawsuit. Right now. There are multiple class action lawsuits.
- [95:27]
A
And look, some of those look like
- [95:28]
F
they're coming from these volume firms, to be fair. But to me it's that one of those things alone may be one thing. And look, Maggie Harrison reported over a year ago fake patients, fake testimonials and AI generated photos. She actually put out a piece this morning that was a great piece. So that's a year old. So to me, that constantly, that seems
- [95:50]
B
to be a repeating pattern in telemedicine of people saying like, well, real patients don't want their face on a website. Oh yeah, I'll use a AI generated name or a fake picture. But then it just keeps coming up as again an issue.
- [96:06]
F
There were also, though, as you saw, there were fake doctors. So there was Dr. Albus Dangledore, there was Dr. Tucker Carl Zinn spelled with a Z. Like that's another layer. And it's just that I'm saying when that constellation comes together, I think there's now almost like a burden of why are we telling this story in this way? And that's where I think we needed
- [96:33]
E
a lot more of.
- [96:34]
F
Well, wait a second, is the medicine work that we're talking about. And I want to make a point here. The day before this article ran, the day before Lilly's oral got approved, it was not tirzepatide. In fact, it wasn't even a peptide. So it's often been said the last thing that Weatherman needs to do before going on any air is look out the window. Yeah, well, so we have this company selling and others too, selling an oral version of the medication that has no biological plausibility of working. And to me, the best witness of that is that the day before, Lilly announced an entirely different medication, despite the fact that it would cause market confusion potentially.
- [97:18]
B
Hmm. So you think they'll be. You're expecting there to be sort of issues with the actual product assortment that the company has been selling as well?
- [97:30]
F
Well, some of what they sell and others are products that work. And let's be clear, a lot of these work really well. Okay. But the problem when we sell ones that don't work is it sets those people back, it sets back their metabolic time. But also if this administration, and I love that they're doing this, is being so pro innovation in this regard, then we need to be particularly harsh when people are bringing things that are completely irrational and have zero evidence base. And when I say that oral tirzepatide has zero evidence base, somebody email me if they find otherwise. But Lily is quoted as saying it's true. There are zero. No published studies on oral tirzepatide in humans.
- [98:20]
A
None.
- [98:21]
F
Okay. And so when that's the subject of the Ricoh lawsuit. So what we get into there is in order for there to be innovation, we have to punish snake oil. And we do want innovation in peptides.
- [98:37]
A
How do you think about the. Just the broader boom in peptide prescription telehealth? Because I'm familiar with the warning letter process. It's usually violation of marketing languages, but it can also be used for a variety of other regulatory actions. Do you think that there needs to be more clarification from the fda, or is it pretty easy for the companies that you've talked to and interacted with to steer clear of FDA warning letters in this particular category?
- [99:15]
F
You've really nailed it there. And let me be clear, not only am I pro development in this area, I myself have had peptides as part of my own health journey. That's been great for me over the last couple of years. And let's start here. The demand is real. And part of what leads to this is the supply constraints are also real. So that. That, that's. That's true. And these drugs, when done right, there's some of the most powerful agents we've ever seen. Look, I don't want to put too fine a point on it, but this is true in a subset of people. And before everybody messages me, I set a subset. We have cured obesity in a subset of people. And yes, they need to continue on the medications, but we all three of us, live long enough to see that happen in some people. And that's real. And so I'm thrilled that this administration is encouraging development here. But that's why we need to police better. So you pointed an important space, a gap that's allowing this to occur. And it's a little bit inside baseball, but it's important. FDA regulates substances and devices largely and as you know, they cannot regulate the practice of medicine. That's key. Only the states can. So that's one of the spreads here that's leading to this daylight for operators like this to come in which is FDA approves subcutors appetite great zeppelin Manjaro formulations that gets into the practice of medicine and compounding FDA is statutorily forbidden from getting involved in the practice of medicine. So I'm looking to over in hhs between Abe and some of these other guys and Marty, there are some extremely smart people that I think we need to now think about. This is an issue of yes, regulatory lag, but also regulatory gap between federal we get to control the substances, but states, we control the practice of medicine. It's allowing too much daylight.
- [101:22]
A
That's interesting. What about the gap within the pharma companies themselves around E Commerce? It feels crazy to say, but like the pharma companies novo Eli, they, Eli Lilly, they market a lot, they run super bowl ads and they somehow are getting beat on E Commerce or something or they just don't. It's not like, it's not like the average customer's journey starts@eli Lilly.com. right. And it could, I would imagine. Of course there's this, you know, compounding loophole because of supply constraints. But is there something else going on where they don't feel like because of their business relationships with other distributors and doctors and other networks that they can just be their own Amazon.com and just put their own website up and say hey look, no one else can buy
- [102:16]
B
it because Apple did this. They were a distributor.
- [102:19]
A
Yeah. There's plenty of other companies that have said like we want to be the sole supplier of our product online. There's going to be fake sites that pop up, but our URL is the only destination where you can go to get the real thing. Everything else is fake. Instead we've lived in this hybrid where there, I mean even just among the two venture backed telehealth companies, one's doing compounding, one appears to have a partnership. Very different regulatory structures. That's a lot for consumers to wrap their minds around. I'm wondering like, do you think that the actual formulators the drug companies, companies with the intellectual property should just be going deeper into E commerce.
- [102:56]
F
Well I think we caught them where there was their own internal friction and inertia.
- [103:01]
G
Right.
- [103:01]
F
Where these venture backed entities that can stand up and move quickly on mobile and that was lead time here that they had. But I will tell you, and I hear this from a bunch of my patients, they have gotten better. So right now, for example Lily, if you want to go cash pay, you get an order from your doctor, they send the prescription and I'm not associated with Lily, I'm sure we go has
- [103:26]
B
the same exact thing.
- [103:27]
F
So I'm not picking sides here. But your doctor goes in and sends the prescription just like it's to a pharmacy. You receive a text message the next day, you click it, you pay easy. It shows up the next day at your house in a cooler. So that is where they are now. Now they were way behind in getting there. Yeah, but we also had a point and I'm sure you heard friends where the Lilly price for Zapound is getting pretty darn close to what the compounding can charge and the compoundings are starting to not be able to charge, you know, even less. But what we really need here in my view to make this work right where we want to reward innovation and punish snake oil is come up with a strategy, structural way and it may need to be regulated because of this regulation gap where the right thing to do is the easiest thing to do
- [104:19]
A
and the right thing to do is
- [104:20]
F
the profitable thing to do. Right now I don't think we're structured that way and it gets to this federal and state gap. Yeah, amongst other reasons.
- [104:28]
A
Last question. From my experience with the FDA in the tobacco industry, they would send warning letters but a big problem was that there were distributors abroad usually that would manufacture illegal unapproved vape devices, basically e cigarettes, bring them in and then push them through a whole bunch of corner stores and gas stations. And the FDA just didn't really have the enforcement team to go store by store. Do you think that they will face a similar challenge in regulating peptides online? It feels like it can be done a little bit more behind a computer. You don't need as many people going door to door so maybe they're more equipped for it. But I'm wondering if you have any thoughts on like what it actually takes to play the game of whack a mole here.
- [105:16]
F
I think Marty and team are the, the right team to think this through because there's, there's this permissive lens above Them that wasn't there in prior groups on as to these medicines.
- [105:28]
A
So once there's a permissive lens, now
- [105:30]
F
you can get positively innovative. Instead of thinking like, this all needs to happen in shadow, where Jordi walks up to me with it below a jacket and kind of like hands it to me. This needs to be done right.
- [105:42]
A
Yeah.
- [105:42]
F
And look, FTC teaming up with fda. That's going to be. I think some of the power here because some of the enforcement we're seeing is already coming from FTC as to the way these things are marketed. But let's get clarity and start collecting evidence, folks. So if you say, I'm giving this thing orally and I know it works, well, write that up and share that news with the rest of us, because right now we think we have no evidence that it does. Let's get there and let's realize these are extraordinarily powerful medications. And let's not let a couple of bad actors ruin what could be great progress for us.
- [106:23]
A
No, I think it's a great message. Well, thank you so much for taking the time to come chat with us.
- [106:28]
B
Well said.
- [106:28]
A
Have a great rest of your day and great week.
- [106:30]
B
Great to see you.
- [106:30]
A
Talk to you soon. Have a good one. Up next, we have Liz Hoffman. She is Semaphore's business and finance editor and host of Compound Interest, a podcast from Semaphore Business Powerful man. You will welcome Liz in.
- [106:44]
B
She is not the TVP yet. Scoops.
- [106:47]
A
Just a minute.
- [106:48]
B
Hope for everyone. They say the world's oldest known tortoise is still alive.
- [106:53]
E
Wait.
- [106:54]
B
Reports of death revealed.
- [106:55]
A
I heard about the death of the tortoise.
- [106:57]
C
I didn't realize this was an April Fool's Day post.
- [106:59]
A
Oh, it was real. Yeah, I thought it was real, too. Very, very sad. But that's. That's amazing news. How old is the world's oldest tortoise? Over 100. Correct.
- [107:11]
H
See?
- [107:12]
A
Okay. 193. Wow, that is amazing. So this is a chance.
- [107:17]
B
Fantastic news.
- [107:18]
A
There's a chance. We have to study this tortoise and implement it into our daily lives.
- [107:23]
B
Oh, we have Liz Hoffman here.
- [107:24]
A
We have Liz Hoffman. Let's bring her in. Liz, how are you doing?
- [107:28]
I
Hey, guys. I'm good. How are you?
- [107:30]
A
Thank you so much for joining.
- [107:31]
I
It's been a big couple days for tvpn.
- [107:33]
A
It's been a huge couple days, but we logged off.
- [107:38]
I
I will say, listen, as you noted, we just launched a podcast, so I just appreciate the good exit comp.
- [107:43]
A
Yes, yes, we're very excited. Tell us about the podcast, where can they find it? What's the flow, the philosophy, the topics of conversation, the structure?
- [107:54]
I
Yeah, it's a weekly interview show. You can find it wherever you find all your podcasts. I started calling it a podcast, and I was told, don't. It's a show because everything, as you guys know, is very video now or whatever the next platform is going to be. But no, it's. I mean, these are conversations that, you know, we're having all the time as reporters where you're trying to, like, squeeze five minutes and shake some information out of someone. But there's a really interesting seat that they're in that they can talk about maybe a company, but also just like, why do big chunks of the economy work the way they do? And so we've had, you know, we had the partner from Andreessen Horowitz, David Ulavich, who's like, kind of running their defense tech. I've just been obsessed with, like, why is Venture all of a sudden, sudden playing in big, heavy things that blow up? So that's been really fun. Tomorrow's episode will drop. It's the CEO of Aura talking about sort of the future of wearables and really why he's actually running towards really regulated health stuff, which is sort of counterintuitive. So it's been a lot of fun. You guys look like you were having a lot of fun. So excited to join you.
- [108:47]
A
Yeah. Aura's a monster of a business.
- [108:50]
B
Absolutely huge whoop.
- [108:52]
A
Yeah. A lot of people were skeptical about these companies. They were like, yeah, gadget hundred mil revenue, maybe. And now they're like a billion in revenue or something like that.
- [109:01]
I
It's their big businesses. But it's funny, you know, to me, you've been covering, you know, business for a long time, and this is about as wide open a space as I've ever seen. Like, it's clear that something is going to win. The intersection of AI, hardware and wearables. But it's not at all obvious to me what it is.
- [109:15]
A
Yeah. Also, I mean, crazy to go after this while the Apple watch already killed pebble and like, totally dominated and became, I think, like tens of billions of dollars in revenue. Just absolutely massive product. But then there's been all these different form factors that have snuck through with different value props. Been good. Anyway, let's talk about the jobs report. The US added 178,000 jobs in March, but weak wages and falling participation signal a softening in the labor market.
- [109:42]
B
How do you even process new jobs report? We were Saying earlier on the show, I believe nothing. You know, every time, time there's a jobs report for the last 12 months, it feels like we're hitting the gong.
- [109:51]
A
Yeah.
- [109:52]
B
And then, you know, the revision comes out later.
- [109:55]
A
Retracting the gong.
- [109:56]
B
You have to retract the gong.
- [109:57]
A
Hit the worst.
- [109:58]
I
Yeah. Obviously with the big asterisk that like we will see what the revisions are. Yeah, this was pretty good. It's come on the heels of a couple of bad ones.
- [110:06]
A
Yeah.
- [110:07]
I
But I actually think that the way to think about the job market right now is that we've. We've sort of been programmed to expect a certain number of jobs every month. And you have to think like, well, why? And part of that is that we expect the economy to keep growing. But the input into growing economy in history has been people. And we're not growing the people. You know, mostly because of immigration and demographic shifts. You know, fewer babies started getting born about 15 or 20 years ago. So we have fewer people coming in. And at the same time that AI has just totally scrambled what we need those people to be doing. I actually would like to see less focus on the monthly jobs report. But the market's just so addicted to it.
- [110:42]
A
Yeah. So where would you focus?
- [110:44]
I
Yeah, I mean, I think probably the unemployment rate. If you, if you're trying to stay in the, in the labor market land, that's probably a more helpful thing. And particularly the cohorts in it. Right. Like, I think you are going to see youth unemployment that like, you know, 18 to 25 just skyrocket. Mostly for related reasons, I think. Boy, that class of 2026, 2027, like, I do not know. And then sort of like socioeconomic bans within that. But this is like maybe the first tech revolution in history that benefits blue collar workers over white collar workers. And so just the way we think about the economy and what we're looking for. Jay Powell in his last press conference said, you know, the labor market's in a balance. It's a pretty uncomfortable balance, but it is a balance. And I kind of compared the US to a lifestyle business and like a dig that will land with your, with your listeners. It's okay to not be growing as long as the supply and the demand of the things kind of balance out. And that's sort of where we are. But. But it's not comfortable.
- [111:40]
A
Yeah, I was having this debate with Sagar and Jetty about like is AI holding up the economy or is health care holding up the economy? And I feel like AI is, is holding up like the market and the market caps. And it's the reason that market that the markets are up or down on a given day outside of the geopolitical stuff. But in health care, that's actually where we're adding jobs. Do you have more context on the health of the health care market, what those jobs are? Can 18 to 24 year olds slot into the growing health care sector easily? Is that too complicated, like what's going on there?
- [112:14]
I
Yeah, healthcare is messy because we're talking about a lot of different things and it's like 20% of the economy. So it is both big and fuzzy. It tends not to be a very reassuring and indicator if you're talking about the job market, because it kind of tends to grow no matter what sort of one of those just like blobs that just keeps getting bigger in part because we're getting older and you know, there's certain like the massive shortage of clinicians in certain places. But also this is one of those, you know, healthcare is one of those sectors of the economy where the AI, the outcomes are really levered. Right. Like little unclear whether it's going to replace radiologists, you know, reading, reading scans or if you think about, I don't know if you have any friends who are doctors, like the amount of their day they spend doing just really drudge work, like literally paperwork and checking the thing and making sure that this application is talking to that one could be a total tailwind for that industry. So that's a big question mark for me.
- [113:04]
A
Yeah.
- [113:05]
B
How are you, Are you tracking the Iran war from a capital flow standpoint at all? I think a big question the, the tech and venture community has had. Obviously the war is tragic first and foremost, but so much of the funding coming in to the technology industry over the last 10 years has been from the region. And I think a lot of people have questions around how durable that will be given how much instability there is in the region.
- [113:43]
I
Yeah, I think if you're thinking about the Gulf as a big pot of money, which it has been for a lot of the startup scene and a lot of like global investment markets for the last 10 or 15 years, I think that was already starting to change anyway. You know, I remember 10 years ago covering the SoftBank Vision Fund and Uber and like there was a sense that the Gulf was frankly dumb money, that they were sort of the world's ATMs and they were kind of looking for financial returns, kind of looking just to get their name out there and ultimately kind of did neither. And they've massively pulled back into okay, like, yes, they are still willing to write checks for the Gulf. You saw they're a big funder of the EA buyout, but they really want to see that money come back, like literally on the ground in Saudi Arabia, in the Emirates. And so the calculus of doing business in the Gulf, I think had already been changing. I was there in December and I was talking to an executive at Mubadala who said very proudly, he was like, when asset managers, when Wall street guys used to come here 20 years ago, they would end the meeting and say, and this is how much we want from you. And now they say, where can we partner? What can we do? How can we help you grow an export economy? I think that was already starting to shift anyway. And I think, look, this really does remind people that these really modernizing economies in the Gulf, they are a nice house and a rock neighborhood.
- [115:02]
A
Sure. How much have you dug into the dumb money and how it played out? Because one of the big rounds that I think Saudi Arabia did was Uber and Uber has done very well. And yes, there's like the WeWorks and there's like a smattering of failures, but if you were just broadly investing in America or tack over the last decade or two, I feel like you should have done well, even if you were like just picking randomly. So did they do particularly worse than just random or do they actually feel that way?
- [115:38]
I
It's a good question. They were so big in the biggest pot of this, which was the softbank vision, which obviously did not go great, that they're sort of one hand tied behind their back on the investment side. But the answer is that if it was really working for them, they would be doing more of it. And in fact, they're not. Right. The public investment fund, the pif, has been tilting its portfolio back towards sort of domestic stuff. And by the way, like, they need money, but what they really need, they have a lot of oil. And we'll talk about, if you want, about where oil goes on all this, but what they really need is a domestic economy and the know how to build that. So like, actually a great example is lucid. Right. I think they control lucid and it is not an accident. Lucid is building a factory in Saudi Arabia not because that's like the logical place to manufacture cars, but because Saudi Arabia wants it.
- [116:22]
A
Yeah. And that feels like a really big give for a motor company that will probably deliver most of those cars to America or Europe or somewhere far away. And so you have to pay the transit but for data centers in particular, you know, inference takes time. I don't really care if my tokens come from across the world. I know that a number of companies have already already been using data centers in different time zones because the American data centers are really busy during the day. And so during the day if you can go and generate an image in Malaysia and then have it sent back, it's fine. So maybe that becomes more of the give. But again, big questions about like, is just having a bunch of data centers in the desert like the backbone of a new economy or is it just like one step towards.
- [117:06]
I
I mean it does, it does nothing for employment, which like we're starting to learn here. But also I had a story the other day that the cost to insure an insurance policy on a single asset in the Gulf right now you can literally buy war and terrorism. It's gone up 1900% in the last six weeks. So if you can't insure it, you can't build it. So you don't have to see that shake out.
- [117:24]
A
That's, that's really brutal. What are you tracking on prediction markets? Have this been useful in, in the actually understanding what's going on in the rest of the economy? Are you, are you a fan of them as a data source? Do they help you in your day to day?
- [117:39]
I
I think as a journalist you're always looking for more inputs and aggregated intelligence is always a good one. As a social force, I don't love it. I think the long tail of nonsense is sucking up attention and frankly in capital that could go to be doing more useful things. One thing that I am interested in there is that I think it's going to replace huge portions of investing. Like if I'm an investor and I think that Coca Cola is going to beat its earnings next week, it's going to do better than the market thinks. Right now my options are like, all right, I can go buy a call on Coca Cola short Pepsi and hope that there's not like a weird weather thing at the bottling plant in Atlanta or whatever. Right. There's a lot of weird risk there. And actually if you can just hit yes on that contract, it seems to me that a lot of investing is going to move that way.
- [118:27]
A
Interesting.
- [118:27]
I
And I think that's why New York stock exchange put $2 billion in a polymarket. I think they think so too.
- [118:33]
A
Yeah, there is. As democratized as option trading has become, it is still complicated to understand exactly how you should even express something as simple as I think the war will end quickly or I think Coca Cola will beat earnings. There's a lot of different ways to actually build that option strategy. People obviously sometimes really enjoy that aspect of the intellectual pursuit of making the right trade, but it can be hairy sometimes.
- [119:03]
I
But I'm sure someone like Maiden lost money on the desert, on the tortoise that you guys were talking about on the way in, right?
- [119:08]
A
Maybe.
- [119:09]
I
But actually a human went outside. I think it was like the governor of the island, wherever it is, went outside and said, no, the tortoise is just sleeping.
- [119:14]
A
Found the tortoise.
- [119:15]
B
I think it's fascinating that suddenly everyone, you know, these mentioned, mentioned markets seem to be some of. Some of, like, the biggest distractions. It's hard to make the case for why the information is important or necessary. And I think if people want to trade it, that's fine. But I think it's generally, you know, we saw something yesterday. Trump had a pretty odd post saying, you know, praise. I think he said, praise be a lot. And it seemed very out of place. And so people assumed like, hey, maybe that is because, you know, somebody either in the ad, who knows how that could have happened. But yeah, somebody out there thought maybe benefited from that. And the problem is, like, it just creates this big question with, like, everything that people say in the world in certain. In certain settings.
- [120:13]
I
Yeah, I love it.
- [120:15]
A
Well, I'm sure you'll be.
- [120:16]
B
Well, please say bitcoin. Please say bitcoin right now before you leave.
- [120:21]
A
I'm sure you'll have plenty of time to unpack.
- [120:23]
B
I'm just joking. So compound interest, is the show launched yet or. It is about to launch.
- [120:30]
I
Yeah, we're in week six.
- [120:32]
B
Oh, amazing.
- [120:32]
A
Congratulations.
- [120:33]
B
Great.
- [120:34]
A
Well, thank you so much for taking the time to come chat with us and congrats on the new show. We'll talk to you soon.
- [120:38]
I
Thank you.
- [120:38]
B
Yeah, great to see you. Cheers.
- [120:41]
A
Up next, we have Brad Taylor from Sierra. Sierra just launched Ghostwriter, an agent for building customer experience agents through conversation. Let's bring in Brett Taylor. Second or third time on the show. Welcome back. How are we doing? Third time.
- [120:54]
D
Thanks for having me back.
- [120:56]
A
Appreciate it.
- [120:56]
B
Great to see you.
- [120:58]
A
Well, kick us off. Give us the state of the union on Sierra. How is it going? What's the traction been like? What's the progress?
- [121:06]
D
Sierra's going amazing. We grew to $100 million in ARR in seven quarters. 150 and 8. We're in the middle of our night. Hopefully we get multiple dongs this show. We're working with 40% of the Fortune 50 now. Brands like Singtel, Sky, Nordstrom, Prudential, but most importantly, we're just really focused on helping people get successful quickly. One of my favorite stories is Nordstrom went live in four weeks with their voice agent ramped from 1% to 100% in one week. And our whole philosophy is the solution to every problem in AI is more AI. And so we're really trying to kind of orient the whole company around that. That's where Ghostwriter comes in. Happy to talk about it, but it's probably what I think the product I'm most proud of that we've developed at Cira so far, it really kind of just reimagines the whole platform around AI in a way I'm really excited about.
- [121:59]
A
Well, first, I maybe want to go back in time a little bit because you said Nordstrom's was a success case at a four week implementation. That sounds like a success for implementing any piece of software, really.
- [122:12]
B
Especially something that's customer facing.
- [122:14]
A
Anything takes time. But when you started the company with your first clients, how much longer longer was it like? What, what made it take longer then and then why is it getting faster?
- [122:26]
D
Yeah, actually it's a good segue into Ghostwriter too. I mean, first, our first design partners, we were building the airplane as it
- [122:32]
A
was taking off course.
- [122:33]
D
What took long because we had to make the product. And you know, we had some early design partners like Sirius XM and Sonos that were amazing. Just very patient with us. And I think it benefited from being now very early to this market, but after the product really existed, it was, you're just really figuring out what does it mean to make an agent. It used to be, if you talked to Chatbot three years ago, I call it bc before Codex or before Claw, these things were robotic and rules based. How you actually model a customer experience not as rules, but as goals and guardrails. You really want these agents to be human like, and to be human like, you can't have them be reading a script. Right. But that's a really different way of thinking about software. When you built a website before, you knew every button that someone could click. And now you have this kind of freeform conversational interface and you're almost putting guardrails around it rather than drawing a path through your customer experience. So it's going to sound funny and almost technical, but we had to design the right abstractions for our customers to actually build their customer experience. And actually just to take it to Ghostwriter, this new product, we think the era of the web app is kind of over. If you think about what is a web app in the context of enterprise software. We made these databases, these systems of record in the 80s and 90s. And then as the web browser came out, we said, okay, we're going to give you some forms and fields in a web browser to manipulate those systems of record. Now, we think in the future, most people are just going to be talking to AI agents and it's going to be performing those actions on your behalf. And we were thinking after December, when all of us got pretty AI pilled with Codex and Claude improving so dramatically,
- [124:07]
A
that's when you got AI pilled?
- [124:11]
B
No, like, everything before that, they were just toys. But. But this.
- [124:17]
D
I mean, honestly, no, that was.
- [124:19]
B
That was a very. Like, we're just joking around. There was a lot of people that, like, went on winter break and they were like, wow, this actually seems pretty. Like it's going to be a pretty big deal.
- [124:28]
A
Yeah.
- [124:29]
D
Well, that's why it does feel like bc, like before Codex, like, December was this point. Like, there's a before and an after.
- [124:34]
A
Sure.
- [124:35]
D
So we came back to the office after the holidays and we're just. Our minds are blown because we're all software engineers, right? We're like, man, if it can do this with code, why are we clicking around forms and fields in a web browser still? And we're like, if we were to start over today, our product, you would be using Sierra like you use Codex. And so that's what Ghostwriter is. It's an agent for building agents. You can just talk to it. You could say, hey, I want a customer service agent that enables people to do a warranty claim. You know what, make it a little more empathetic. You know what, let's update our policy from 30 days to 45 days over the month of December. So our return window extends past New Year. You can just talk to it and it will actually perform all of this on your behalf. So the cool part about it is you have this, like, you know, evolution of how do you build agents. And now we've made it accessible to everybody. And just like, I think you probably all, like, I know so many people are technical, built their first apps with Codex. Now that it's so accessible, our view is that anyone in the world can use our platform now to make these incredibly sophisticated agents. Can we bring that four weeks down to four days? I think that's really the value here. I think it's exciting just because the era of signing into a web app and filling out forms and clicking the Submit button. I think it's a thing of the past.
- [125:50]
A
At what level of abstraction are the CEOs of Fortune 5 Fortune 50 companies operating right now? Because when I hear, like, okay, we made an agent that creates agents, I'm still seeing a text box. And I know a lot of CEOs that are like, I don't do text boxes. I do meetings and I do conversations. Maybe I will literally text my guy who does that for me. But like, how, like, what is the flow? Is there like a head of AI at these companies now that's implementing this and they're doing this, or are they calling you and say, hey, it's great you built Ghostwriter. I would like you to use Ghostwriter to do what I want.
- [126:30]
D
Well, I'll give you the whole spectrum, because as you intuited, every culture is different. I'd say our audience for this are the people building these customer experiences. Like the head of sales or head of customer service. Head of customer experience. Because for a long time, to do any big digital project, you'd have to have your IT team, probably an outside systems integrator, a bunch of tech vendors, and, you know, like, the actual essence of your customer experience doesn't get lost in it, but it's like any product management process, right? You have to distill it down to a product requirements document and wait six months. Can we actually empower the people who understand your sales process, your customer service processes, and empower them to run an A B test to actually, like, make those changes on their behalf? So our audience, I would say, is one notch down from the. The CEO. It's like, who is the people who really understand your customer, who should be empowered to actually build these things? But I think I've been really surprised that. I think I love the word agent because I've seen a lot more agency in every executive team and every one of our clients, like, boards, CEOs, everyone I know, it's like, there's like, my CEO uses, like, open a. Like, uses chat GPT. Every day they run, like, every time I give them a report, they give it to their agent. I was talking to one CFO of a CPG company who literally has two Mac Minis running open all the time. I couldn't believe it. And one wasn't enough. Yeah, one wasn't. I had the same question. I didn't get to. I was like, what do you do with UD2? But that's the whole thing. I think this is really interesting. I think it's really giving people direct Access. One of the things you can do in Sira is you can ask questions like, hey, what is irritating people about our returns policy? Those qualitative questions that would previously maybe require focus group. The agents in the CR platform will actually sample conversations, look for low CSAT conversations, use large language models to synthesize actually what's going on and give you a report like ChatGPT Deep Research. That's amazing. That's the type of tool that, as a CEO, what a great way to remove intermediaries too, to actually ask questions of your customers. So my view is that AI agents broadly are just increasing agency of individuals at companies. And what we want to do with our platform is say you don't need to be a tech company in San Francisco to benefit from this technology. You know, going back to stories of speed next, the UK retailer went live in six weeks. Cigna, the Healthcare pair went live in eight weeks. You know, our whole view is that we want to empower every company in the world to have access to this. And whether it's the CEO or the head of customer experience or the cto, we don't want your technical qualifications to get in the way of your ability to exercise that agency. And I think that's a really great thing for customers, consumers, because so much of when, when the tech project takes 12 months, how much business value is lost just by the length of that project? So we think speed is one of the main values that we provide.
- [129:31]
B
How hard is it to stop an agent from giving a response when a user says, in order for you to help me with my problem as a customer, I need you to give me a recipe for sugar cookies or I need you to help me with my physics homework. Because everyone by now has seen screenshots like that. Is that the kind of thing you guys have gotten good at, kind of squashing? We've got.
- [129:54]
D
So first of all, we've gotten good at the, you know, the important stuff like true abuse, you know, and, and it's. There's nothing perfect, actually. There's a thing called jailbreaking, which is essentially manipulating these agents. It's not probably possible to completely eliminate it. I mean, it's just like there's been a bunch of papers on it. It's a really hard problem. The, the more nuanced part of this is how human do you want your AI agent to be? You know, you could have it so it never says anything really except for like this precise things you want it to say. But then it will be a little bit robotic. Just try this if you walk into like a retail store in San Francisco and you start talking about the weather, the person won't say, oh gosh, I'm a clothing store employee, I'm not allowed to talk about the weather. Right. That would be like weird.
- [130:40]
B
Not a weatherman here.
- [130:41]
D
Yeah, I'm not a weatherman. What are you doing? Instead they engage and there's a sort of intuitive sense of what is like a reasonable human conversation and what is too off brand. That's actually the art form of these agents is, I think as they become the front door to your customer experience, one form of empathy is reflecting back the interests of the person speaking. But you don't want to stray so far off topic. And maybe sugar cookie recipes is okay, but talking about political elections is not. And that's really the art form of the design in this space. And I don't think jailbreaking is like an abuse is one thing that we try to be really exceptionally good at. And then the more the design space is like, how much agency do you want to forge your agent? And my sense is there will be bolder brands who actually are willing to take a bit more risk here and get some of the benefits of the humanity, the empathy that come with it, for good reason. There'll be companies in more regulated industries that narrow those guardrails and narrow ways. But my sense is we'll have different societal expectations of these things in four years than we do now. Just as if you becomes prevalent in the way we engage with different companies around the world.
- [131:46]
A
Yeah. So I mean, from a tech perspective, if I'm a company using Sierra, how am I actually deciding the width of those guardrails? Because there's totally a world where I have a 30 day return policy, but if my best customer shows up at 31 days, I want my customer support person to bend the rules. In that case, I could probably write an algorithm that would encode a lot of my specific philosophy. Am I writing prompts? Am I writing like an MD file for this? Now? How am I actually setting the rules of the road if I do want somewhat of a fuzzy response curve?
- [132:26]
D
Yeah. So this is what we enable on our platform and under the hood. You can think of it as modeling these conversations as goals and guardrails rather than rules. And so you can put guardrails that are qualitative, like the person's really upset. You could also put goals that are quantitative, like they're a member of our loyalty program. And so it's pretty easy to model. The neat thing about Ghostwriter is, you know, it used to be ancient history. Two weeks ago you had to learn, you know, how to use our product to model it. Now you can actually, you could just say what you just said. In fact, you could take a recording of what you just said and upload the audio file in. Ghostwriter would make the agent, you know, it's like that flexible. And so, you know, we're trying to, we've created a bunch of abstractions for companies to build these agents we're really proud of. And now I think we've just lowered the bar for people using it. And you know, just given our traction with some of the largest companies in the world, our hope is it will just accelerate our momentum going into the middle of the year.
- [133:23]
B
How do you think agents are changing enterprise sales? Are they valuable to Sierra at all? Do they move the needle? You know, I'm curious what role you think they play in like a truly elite enterprise. Gtm.
- [133:41]
D
I think it's huge. We have a whole team dedicated to this. I want to pretend we figured it out, but when I think about true enterprise sales, like I'll say high touch, you know, Fortune 100 type enterprise sales, you're really trying to have your best practices consistent across your client base. And what's so hard is before you used to just have to train people there's this, you know, this because you know sales, there's like it's enablement. How do you actually train people with new best practices, new products? I think one of the most exciting parts of agents in the context of go to market now is AI agents can assist your frontline sellers or you know, post sales team to actually understand those best practices, understand products. Let's just take responding to an RFP as an example. It's something that you know, used to probably a lot of inconsistency in how you answered those questions. And now you kind of agents assist a lot of that. And what's exciting about that is I think many of the best sellers are really great listeners. They're there to understand your customers problems deeply. And that doesn't necessarily correspond with understanding agent architectures. Like you know, something you have to describe in our world, can you have these agents actually assist us? You can end up with the world's best sellers sort of equipped with like an ironman suit of enablement and knowledge to help them do that. And then I think, I think about is just, you know, we're trying to scale faster than any enterprise software company in history. And so far we're doing a Pretty good job of that. But for Clay and me, you know, our big risk, you know, fear is like as you expand to Japan, we just did an acquisition there, you expand to Southeast Asia, you expand Australia, well, you end up with these little, you know, Galapagos Islands versions of your company that aren't quite the same. And so can you use agents to make things more consistent as well. So you know, if we're talking a year from now, I'd like to say like our agents made us like scale our company consistently globally and have kind of that consistency, high level of service our clients expect of us. And that's something that would just be a ton more effort with a lot more inconsistency without AI agents. So I think it's huge in enterprise sales.
- [135:47]
B
Tell us about the, tell us about the company you bought in Japan.
- [135:51]
D
We inquired a company called Opera. Eleven people, they self describe were created in the sierra of Japan.
- [136:00]
A
It's a life hack right there that
- [136:02]
B
actually seems like a smart strategy is like find, find the leading AI companies in America and then build that company for your region.
- [136:12]
A
Genius.
- [136:13]
D
They're amazing founders. We said rather than the sierra of Japan, why not just take out the of and just be Sierra Japan. And, and they're amazing and they're, they're like young and hungry and understand AI. And I'm really excited just because we have a lot of, we really believe in the value of humility here. And it's like entering a market like Japan. It's very hard for western companies to succeed there. And you have this group of 11 people who are not only great entrepreneurs who I just have an innate respect for all entrepreneurs but understand the market had been in the market with some regulated clients and now they have, you know, sort of the full power of Sierra behind them. So I'm excited for it. I don't know a ton of precedent for sort of like doing a kind of technical acquisition to enter a market. We're really excited for, for it. And I hope I can come back here in six months and tell you it's a wild success, but I'm really excited for it.
- [137:03]
A
Well, what's the smallest company that you'll work with? It feels like the, you know, the headline goal is enterprise, the Fortune 50. But is this going to be a, you know, one click and I'm not even talking to someone sort of self serve at the very low end eventually,
- [137:19]
D
you know, maybe I would say like we tend to serve, we serve both mid market and enterprise so we're not opposed to smaller firms. And I would say we really care about high growth companies. So it's important to us to serve high growth tech, high growth retail. Just if you're a startup, we really want, we want to be your first phone call. So we're trying to make it as easy as possible. We're not necessarily going to go into self serve, not because the technology won't enable it, but to some degree our business model is helping people transform. You know, one of our medtech clients has 40 call centers and they need to consolidate into one and deploy AI at the first time. And you know, you all, this is not your first rodeo. You know, like technology is like 1/15 of that problem. It's like we actually come in and we can actually help you say, hey, here's actually the order of operations. You can realize the value quickly, here's how you can help with the change management, all that stuff. It can feel boring to a technologist, but if you're actually a company who's reading the headlines about Claude Code and Codex and being like, man, I have 100,000 people and 40 business units, how do I get this? We want Sierra to be the answer to that question. And I think as a consequence you're building a company designed to help with that kind of question. You just create a different shape of company. And so we're really trying to serve the enterprise and we. It doesn't mean size, it sort of means, you know, do you want a partner rather than a vendor? And that's how we think about it.
- [138:47]
A
Well, thank you for serving the enterprise. Thank you for your service generally. It's so important. Have a great rest of your day.
- [138:56]
B
Do you have, do you have another, do you have another minute? Yeah, I just wanted, what are. When you meet a CEO, how quickly can you clock whether they have an elite enterprise GTM motion and what are the indicators that you look for?
- [139:15]
D
Yes, I think I can. And just because I've partly. You want to know why? Because I just stunk at it. When I created my first B2B company, I transitioned from being at Facebook to starting quip. And I had never sold software before. I only sold ad supported software. And so when you went through the really awkward transition of sucking at something and learning it the hard way, you learned to pattern match on the old version of yourself. My main indicator is does that CEO spend time with their own customers? So many, I would say product and tech founders outsource sales in the way you outsource things you don't care about. I think it's almost Impossible to start an enterprise software company and not personally spend time with your clients. And it's probably the main leading indicator of someone who hasn't figured it out.
- [140:07]
A
I'm hearing golf handicap and stakes. Not quite. Yeah, I'm sure there's a lot more to it.
- [140:14]
B
I spend time with my customers 36 holes a day.
- [140:19]
A
No, of course there's more to it. You were at Shop Talk, you were out in Vegas. That's a serious conference. It makes a lot of sense that you were out there personally. Personally, it's a trip.
- [140:28]
B
Awesome. Well, thanks for going over.
- [140:29]
A
Great to see you soon. Goodbye. Up next, Gray Matter Robotics. We have the CEO and co founder joining. Bringing physical AI into US Shipbuilding, scaling autonomous production for national security. We need this more than ever. And I'll let you introduce yourself. Welcome to the show.
- [140:50]
H
Thanks for having me. Thanks for having me. John. Thanks for having me. Jordy, of course. Co founder, CEO of Gray Matter Robotics. By the way, we're actually neighbors. Would love to give you a tour. Actually, we should have done this today at our facility with the robots in the background.
- [141:02]
A
Wait, neighbors in Hollywood, Neighbors in Los Angeles, Neighbors in California. How precise are we being Los Angeles? Because we're going to have neighbors right behind us and I haven't seen you on the campus, but. Yeah, why don't you kick us off with a little bit of backstory. How you got into the industry, how you identified the problem and then what you're building now.
- [141:22]
G
Yeah.
- [141:23]
H
As you, as you know, as you, both of you just kicked it off that, you know, we're living in a moment where it's more than critical, more important than ever to accelerate the production, accelerate the capacity building for our industrial base, especially in shipbuilding. Right. US makes most of the advanced naval vessels in the world. Aircraft carriers, destroyers, submarines, you name it. And we have more than 5 million man hours short in shipbuilding in the US between World War II until now. The amount of ship US has built China, more than that in the last 12 months. Right?
- [141:54]
A
Yeah.
- [141:55]
H
And we are actually today at a milestone moment in the history for shipbuilding, in the history of national security and our U.S. navy.
- [142:03]
A
Yeah.
- [142:03]
H
We are launching a partnership today. We are announcing this partnership with Huntington Ingalls Industries. HII yeah, they're huge. And together we are bringing factory superintelligence to shipbuilding.
- [142:14]
A
Okay. What does the partnership entail? I mean and maybe just to zoom out, Huntington Ingalls is they, they literally make the aircraft carriers. Right. They like, they make the exquisite systems they ship build at the, at the biggest scales. Correct. That is correct.
- [142:29]
H
They make all the large aircraft carriers, large submarines and some of the advanced vessels. Also they're launching some of the latest and greatest unmanned vessels for the US Navy.
- [142:38]
A
Is there a Shahid drone of ships that America should be copying? We just read a story.
- [142:45]
B
It's called a jet ski.
- [142:46]
A
Is it a jet ski? I don't know.
- [142:48]
B
It's actually what I mean they have.
- [142:49]
A
I've seen a few of these demos but I haven't. I've heard about the Shahid drone for years and then it became very important with this latest conflict and then apparently with that, that. What was it called, Lucas drone that America built very quickly. It feels like that was copied. Is there some sort of next gen autonomous surface vessel that you think is coming down the pipe in major way?
- [143:11]
H
We're seeing that. We're seeing that from Andrew, we're seeing that from Lockheed, we're seeing some of that also from Sarani. Right. Let it be the existing primes as well as the new primes, they're bringing low cost, sometimes even dispensable unmanned vessels. Let it be, you know, over surface or subsurface.
- [143:27]
A
Yeah. So what, what does the partnership actually look like? I mean Huntington Ingalls is a huge organization. Organization. Like how are you plugging in? What, what organizations are you working with? How do you actually.
- [143:36]
B
How many rounds of golf does it take to land a partnership like this? 0000 rounds of golf.
- [143:44]
G
Because we're dealing with such a narrative
- [143:47]
E
violation,
- [143:49]
D
we're dealing with such a, such
- [143:50]
H
a big national security issue. We don't have time to play golf. We have to go build these autonomous robots that can start building all these autonomous vessels.
- [143:59]
A
Yeah.
- [143:59]
H
So at Grim Metal Robotics at the core, you know, you asked me Jordi, at the beginning, like John, how did we get into it? Right, yeah. So my co founders and myself, we started Grim Metal Robotics about six years ago. And when we started, at that time anyone doing robotics and AI was doing one of the two things, either self driving cars or pick back and shape or assembly in logistics. Sure, no one was paying attention to this massive need in manufacturing. All of our factories, best 90% of them are done manually by people, by hand, every single operation. And we have this growing demand for physical goods and we have this growing shortage of skilled people, skilled tradespeople in manufacturing, especially in shipbuilding. And we have to do something to bridge that gap between demand and capacity. And robotics is one thing. But what truly started to change the picture is that when we started bringing in physically marrying it with robotics, but Then we also had to start thinking about beyond robotics. If you look at a factory operation, there are manufacturing processes like sanding, grinding, painting, coating, blasting, you name it. A lot of manual labor goes into it. But beyond that there are a lot of other engineering activities. A lot of industrial engineering, process engineering, material science, a lot of sustainment operations, mro, you name it. If you don't bring AI and autonomy across the full end to end picture, if you don't start bringing AI agents in each layer of engineering, we're not going to unlock our factories. So that's our mission at Remediator Robotics. Connecting it all by bringing domain agents and factory superintelligence.
- [145:33]
A
Yeah. How, how agent ready are manufacturing systems? Do they have APIs? Are there CLIs? I imagine that they don't have MCP. Like, like, give me an example of like there's one machine that makes a part that goes on the, you know, the aircraft carrier. Like how is the agent interacting with that? What is it doing?
- [145:56]
E
Right.
- [145:57]
H
It's a. If you look at a manufacturing operation, it's an sequence of different processes.
- [146:02]
A
Sure.
- [146:02]
H
In each processes you take a tool, you make some value added change to an object using a tool.
- [146:07]
A
Yeah.
- [146:07]
H
Welding the parts together. Would it be grinding the world, blasting the surface? A lot of inspection. So we deliver autonomous robot cells that
- [146:16]
A
are capable of like a six axis robot arm. Is that what I'm visualizing?
- [146:23]
H
Yeah. We work with, you know, we are agnostic to hardware embody our physically into different form factors.
- [146:29]
A
Okay.
- [146:30]
H
Industrial robots sitting on the floor or industrial robots on a rail on a mobile base that can work, you know, move around a submarine and work on these large structures. We work with anything from as small as a military helmet to a fire truck, to fighter jets to a submarine component, you name it. So we are agnostic to shapes and sizes of robots.
- [146:50]
A
Interesting. Very cool. Well, thank you so much for coming on and breaking it down.
- [146:54]
B
Yeah, great to meet you and amazing job navigating my soundboard here. I was throwing, I was throwing a lot at you.
- [147:00]
A
Yeah. Very excited. I want to learn more about Huntington Ingalls at some point. It's such a fascinating company. Congratulations on the deal with them.
- [147:08]
H
Thank you. This is a big moment for national security and U.S. navy.
- [147:12]
A
Yeah. Have a great rest of your day. We'll talk to you soon.
- [147:14]
B
Great to meet you.
- [147:15]
H
Thank you.
- [147:15]
A
Have a good one. Up next, we have Atif Siddiqui from Branch. He's the founder and CEO. He's in the waiting room. Let's bring him in. Atif, how are you doing?
- [147:25]
B
What's going on, Donald Trump.
- [147:27]
G
Well, how are you guys?
- [147:28]
A
We're great. Thanks so much for taking the time to join the show. Since this is the first time on the show, would you mind giving us a little bit of introduction on yourself and the company?
- [147:38]
G
Absolutely, yeah. TIFF Founder, CEO Ranch is the leading workforce financial infrastructure that delivers faster, more flexible options for people to get paid. So we focus on the majority of the American economy that works. Works in an hourly job, gig job, tip job. So it could be gig workers, nurses, restaurant workers getting their tips instantly. And, you know, I think really companies are turning to Branch because they know faster payments can help them strengthen worker loyalty, saving time and money. I was actually tuning in earlier, heard your convo with the better money guys around. Yeah, the Uber. The Uber driver payouts. That's us.
- [148:17]
A
Wait. Oh, no way.
- [148:19]
G
Yeah, we work with companies like Uber Instacart.
- [148:22]
A
That's amazing. That's perfect. Quick question. What is the screw award or the spring award behind you? What is that?
- [148:32]
G
This one right here.
- [148:33]
A
It looks like a spring. Like a giant spring.
- [148:35]
G
Yeah. 2020 Webby Award winner.
- [148:37]
A
That's a Webby.
- [148:38]
B
There you go.
- [148:40]
A
Did you win that for Branch?
- [148:42]
G
For branch, yeah. In 2020.
- [148:45]
A
That's amazing. Yeah, Webby is deeply underrated. Anyway, give us a tour of the business currently. I mean, if you're working with Uber, obviously, big company, but how can I think about the shape of the business? Are you in person, multiple offices, scale of fundraising? Just get me up to speed on the scale of your operation.
- [149:05]
G
Yeah, we're distributed. We have a couple offices, sales offices, one in Tampa, but distributed workforce, about 230 employees, raised over $100 million of equity. And yeah, it's. It's been. We're off to the races now. You know, I think, you know, one area we've been really leaning into as of late is just the embedded finance offerings, and that's kind of the news.
- [149:31]
A
So is that. Is that embedding into another B2B company that is acting as like the. The master payroll provider for an organization?
- [149:41]
G
That's right. Yeah. So think platforms.
- [149:43]
A
Sure, Right.
- [149:44]
G
It could be vertical SaaS where they touch our end users around, you know, these gig or hourly workforces where we can live right there and make it really frictionless for those end users.
- [149:56]
A
Yeah, I've had a few, like, HR platforms where I've had like a few employees on hourly and they've sort of added like, oh, if you want to add this plugin or add on, I could. And I don't know if we were using Branch back then. This was years ago, but. Yeah, but, but yeah, Makes a lot of sense that that would need to seep through the rest of the hr, HR I s software suites across the
- [150:19]
B
pros and cons and building in an important, but let's say less hyped category than stablecoins and something like AI. Like, do you feel like you have to perform even more than you would? Because like, if you want to get the attention of the capital markets, you really need to prove that you're, you know, basically have to prove everything in the numbers.
- [150:43]
G
That's right, Yeah. I think, you know, oftentimes a lot of this is just education and how big the problem is.
- [150:50]
E
Right.
- [150:51]
G
Especially when it comes to like attracting and retaining talent. I don't think a lot of people know like how fast these workers churn. So anything you can do to kind of slow down that churn is huge impact right to the bottom line of these companies. You know, we've seen companies retained with, you know, using a service like Branch is like retaining users 60% longer than they normally would. Right. So if you think about everything that goes into getting a new worker on onboarding them, that's a huge cost.
- [151:16]
A
Yeah. What are the key features that result in lower churn, higher return attention?
- [151:24]
G
Yeah. I think a lot of it has to do with this idea of just really improving workers cash flow at the end of the day. Right. So if you look at the industries we work in, especially as of late, more of these 1099 industries, cash flow is huge for them. Right. It's the difference between them going out and using that to go earn more money. Right. Uber drivers putting gas in their car to go out there and drive.
- [151:45]
A
Yeah. So if there's two, if there's two competing platforms, platforms where someone could go to work, one's going to pay them every two weeks, one's going to pay them every single day. They were more likely to go and stick around or stay or choose the one that's paying them on a daily basis, essentially.
- [152:00]
G
Yeah, absolutely. And it's becoming table stakes.
- [152:02]
E
Right.
- [152:02]
G
I think a lot of this was driven by like gig economy, the Ubers of the world. We're seeing this now across W2 workforces as well. Right. Traditional industries there.
- [152:12]
A
You mentioned the 1099 trend or can you get me up to speed? I remember what, five years ago there was debate over how Uber and Uber drivers were going to be paid whether they were contractors or not. Like what? What do you mean when you, when you talk about like a 1099 workforce. Like, what are some examples of that?
- [152:33]
G
Yeah, I think there's a. You know, I think a lot of the headlines focus around sort of ride sharing and the Ubers of the world. But, like, we're seeing 1099 workforces rise, even industries like health care. Right. We work with some of the largest nurse marketplaces out there where nurses are turning to these platforms to supplement their income, pick up additional shifts on their off hours. Right. The other big trend we see is the rise of like the solopreneur. Right. You're an individual that wants to start their own business and like, what are the tools and out there that really help you grow? Grow, yeah. Which brings me to my other thing. You know, one thing we announced too, is that last week we announced with Stripe will be embedded into their Connect platform.
- [153:17]
B
Right.
- [153:18]
G
So now if you're a marketplace or platform in Stripe, you can get up and running with a digital wallet, a debit card instantly from the Stripe system.
- [153:29]
A
Okay. So, yeah, give me an example of a customer company that would wind up using branch through Stripe.
- [153:37]
G
Yeah, let's say. I mean, obviously the Marketplace example makes sense. The Ubers, or I'll give you maybe like a mind body. Right. There's a lot of. They service a lot of, like, salons. Oftentimes they're independent contractors working for these salons and they want to get them paid faster.
- [153:54]
A
Yeah. Right.
- [153:55]
G
So they can kind of now offer this as a branded solution to their independent contractors.
- [154:01]
A
And so if I'm in this hair salon example, I imagine that I have some sort of like, general W2 focused payroll system set up for, like, the corporate employees. But is there an advantage to having the money sort of stay within the Stripe ecosystem and then get 1099 to the contractors that I'm paying because I don't have to move the money around or something? Like, is that it?
- [154:26]
G
Yeah, that's it.
- [154:27]
B
Yeah.
- [154:27]
G
I mean, just like minimal API lift. Right. The other is like, no pre funding. Like, Stripe has the money and so we can move that money right there. So it's not like you're having to come up with the capital, pre fund it, sit in an Astro account and use that working capital.
- [154:41]
A
Okay. So like in this example, like a customer comes in, they pay, it's processed on stripe rails. And so the money's right there. So it's much easier. Easier to move directly into the bank account of the, of the worker who provided the service all in the same day. So we're just sort of squeezing days out of the working capital budget as much as possible.
- [155:02]
G
That's right. And I think for the work themselves. Right. It becomes like a financial hub for them. Right. As a solopreneur, you're starting out. We've offered in addition to just like fee free banking and there's like cash back rewards that are very relevant to workplace expenses. I mean Uber drivers are getting up to like 10% cash back on gas in certain cases, which is huge.
- [155:20]
A
Yeah. Is a big piece of basically. Are you seeing any acceleration like form filling and regulatory filings alongside 1099s and the workers actually onboarding? Is that like a point of friction or something that you've been working on like improving?
- [155:39]
G
That's right, yeah. You know the other announcement we had was that we did end to end tax filing capability for 1099 workers. Right. So in addition to like faster payments, I think another critical infrastructure needed is like collecting W9s, IRS verifications, earnings trackings.
- [155:55]
B
Right.
- [155:55]
G
Just all in a seamless experience.
- [155:57]
A
Well, congratulations on the progress. Great to meet and thanks so much for taking the time to come chat with us.
- [156:03]
B
Yeah, great to finally meet.
- [156:03]
G
Thanks guys.
- [156:04]
A
Have a great rest of your week. We'll talk to you soon. Goodbye. We, we have some more stories that we will go through tomorrow. Is there anything that you want to close with Jordi?
- [156:18]
B
Hopefully we need to get to the bottom of Citrini. Citrini's analyst.
- [156:22]
A
It's a long post. We're also going to try and get someone from Citrini on the show to break it down because it is a crazy story and I don't think we can do it justice with just a few random posts. Citrini analyst number three got picked up by the cid, the Gulf, CIA because of the tweets about him. So I think everyone needs to be careful talking about citrini analyst number three based 16Z says. Hunter S. Satrini number three.
- [156:52]
B
Last post from Francis. He says, I think the next LinkedIn post I read about the TVPN acquisition might finally reveal the future of media. Just need to find, find one more.
- [157:02]
A
That's true. There was one more post that was good. There were so many good posts. It was a lot of fun and
- [157:09]
B
Nate Yu with an absolute banger and a place that we will end it. He says, hear me out. TVPN for sports. There very well could be something here.
- [157:20]
A
And I liked it and I got screenshotted because it's official. There very well could be something there. Well get out there, build something, maybe go treat yourself to the largest buzz ball that has ever been built. It weighs 3,000 pounds. It opens up as a lemonade stand capable of holding 17,000 drinks which will be served around the United States.
- [157:42]
B
That's a good way to tvpn, the only place you can get technology coverage and buzzball coverage hard to hit in the law analysis.
- [157:52]
A
Anyway, thank you so much for watching Leave Us. Five stars on Apple Podcasts and Spotify. Sign up for the newsletter@tvpn.com and we'll see you tomorrow at 11am Goodbye.