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- [00:01]
Jordi
You're watching TBPN.
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John
Today is Monday, December 15, 2025. We are live from the TBPN Ultradome. The temple of technology, the fortress of finance, the capital of capital. It's Christmas week, baby. And the Christmas decorations continue to grow in the TVPN UltraDome. Our good friend Tyler Cosgrove over there is feeling the holiday spirit. He's looking fantastic. And if you're wondering if he has shoes and socks and puts.
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Jordi
Tom, put the shoes up on the table. Put the shoes.
- [00:33]
John
It's a full costume. Yes, that is fantastic. Almost as fantastic as ramp time is. Money save, both easy to use, corporate cards, bill pay, accounting, a whole lot more all in one place. Get started@ramp.com so Tim Sweeney was taking a victory lap. I sort of missed this. This was last Thursday. Basically, the ninth Circuit struck down Apple trying to do something else. And the Apple tax battle with Epic Games. So a quick, quick refresher. Tim Sweeney says the Apple tax is dead in the United States. This particular nail in the coffin comes from the ninth Circuit. These things are never fully over, I've learned. There's a class action lawsuit, then there's another lawsuit, then there's this one, then there's appeals, then they go to the Supreme Court, then they go back to the Supreme Court. It's always up and down. That's just the nature of these things because the stakes are so, so high. Exposure seems a little hot on that. What's going on there? But basically, the court had said that Apple could not charge 30% if a developer routed an app customer to their own payment page. And so Apple was like, yeah, totally, we're cool with that. How about 27% plus 3% for payments and 27% for like IP licensing. And so the end result was exactly the same. It was literally 30%. It was just like structured slightly differently. They just changed the language. And so they were, you know, this was contempt. Like, you know, it's like, we told you not to do this and you're still doing it. Apple. And so now they're not supposed to, of course. Like, the weird takeaway here is like these big momentous things happen and then the stock moves, like, not at all. Because of course, you know, my conclusion from digging into this was that the fundamentally, like, consumer behavior has built up over almost two decades now. I mean, the App Store launched, I believe, in 2007. This 30% fee, this initial, this whole saga starts in 2011. This guy, Robert Pepper, he sues Apple along with three other plane. Mr. Pepper, Mr. Pepper alleging that he was overcharged for iOS apps. Imagine. I mean, that's not exactly what happened because it's like a class action lawsuit. It's much bigger stakes. But it's funny to imagine a guy.
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Jordi
Just saying, I'm coming for you, Apple.
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John
You know what, flappy bird? I was charged $2 for. It should have been $1.70 or something like that. A dollar twenty and taking it all the way to the Supreme Court.
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Jordi
I mean, if he's a flapper of whale and he spent millions, tens of millions of dollars in the app. But yeah, yeah, the economics are a bit, you know, you wouldn't normally see it in somebody like that suing Apple because they're like, you overcharged me by $2,000 across the lifetime and I'm suing you for damages. And it's like a lawsuit that will.
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John
You know, with class action lawsuit, obviously you get a couple plaintiffs who are exemplary of the problem. And then when the settlement happens, it's like billions of dollars paid to everyone who ever purchased an app.
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Jordi
Right.
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John
And you see these things before, like, did you use Facebook between 2016, 2017? You may be entitled to sense.
- [03:56]
Colin
Right?
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John
Class action settlements happen all the time. Obviously, massive economic incentives for the, for the lawyers who fight them. Anyway, before I continue, let me tell you about linear Meet the software. Meet the system for modern software development. Linear streamlines work across the entire development cycle from roadmap to release. So basically the, you know, Apple's gonna work to. So now the court ruled that Apple can't do that anymore. They can only collect fees that are in line with actual cost. Costs of facilitating links out to other payment processors.
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Jordi
Costs for one link.
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John
I know, I know, it's crazy. And the intellectual.
- [04:39]
Jordi
Actually, we need to use AI for this and we need to.
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John
No, no, no. That's actually what's gonna happen. So basically right now it's like the, like, if I'm the App Store, I'm Apple, I have the App Store. You have your own app and you have your own stripe account and you want to accept payments your way. Apple says, well, even though, yes, you are checking out on your payment Rails, it's your app. Like I created the link and the technology that creates links within iOS and that is helping you. So you got to pay me an IP licensing fee. And typically it was like 27% of whatever you make, which doesn't make any sense because obviously my. As Apple, my, my costs don't scale proportionally to your revenue. It's. It's linear with regard to My cost. So, like, yes, if Apple probably.
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Jordi
These are pricey links, John. These are pricey links.
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John
Like, you're laughing, but like, like, realistically, like the iOS team that has been working on just, just links, like, there's. There's code there, there's code there. Like, they get paid a lot. It's probably in the millions. It might be, you know, across all of the different amortized.
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Jordi
I know. But if you're, if you're a.
- [05:54]
John
Is a lot.
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Jordi
If you're a successful mo, You've been paying millions of dollars to Apple forever. And you're talking about millions, like relatively fixed opex for Apple. That again, doesn't.
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John
And they make 30 billion a year or something. So it's like they have paid for the R and D fully. But basically the idea is justifiable. Costs should be like 10 bucks, maybe like a hundred bucks for reviewing an app and just saying, okay, we ran our software. We understand. Is this violating any rules? We maybe had a human pop by and look at it for a couple minutes, make sure that this is compliant with the App Store. And then there will obviously be other costs. But should it be millions of dollars? Should it be proportional to revenue? Should it be 30% of revenue? A lot of people have been arguing no, but of course this will go back and forth and Apple will probably try and make the fee as high as possible, of course, because they have every incentive to. But what else is interesting about this? So, oh, the other interesting thing is in Pepper versus Apple, there was this question of where in the chain is the monopoly pricing having an effect? Where is it increasing the price of the good? And so this all goes back. Ben Thompson's like the best chronicler of this whole saga, of course, and he goes back to this. Illinois Brick Co. Vs. Illinois, the state of Illinois. And so this was in 1977, and the Supreme Court held that only direct purchases of direct purchasers of illegally priced goods had standing to sue. So the Illinois Brick case, this is pretty interesting. He says the Value chain was very straightforward. Concrete block makers, including the eponymous Illinois Brick Company. Great name for a company that makes concrete blocks.
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Jordi
Illinois.
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John
They were accused of colluding, colluding to fixed prices of concrete blocks, which were bought by masonry contractors. Masonry contractors, in turn, submitted bids to general contractors for construction projects, which were ultimately paid for by the state of Illinois. And so the state of Illinois sued for damages, alleging that the higher prices resulting from the price fixing had been passed through to the state of Illinois. So even though the masonry contractors were like, okay, yeah, like the Illinois Brick Company is with all the other brick companies, they're jacking up prices. It doesn't really matter because they just passed that through. And so there's a question about like, well, you didn't actually pay the higher price directly, State of Illinois, but it was passed through. And so that, that harm gets passed through. And so, you know, he says, in this value chain, it is obvious who the direct purchasers were. Masonry contractors. To the extent the state of Illinois suffered harm, it was indirect pass through harm. Thus the Supreme Court ruled that the state of Illinois did not have standing. So the state of Illinois could not sue. Then if every party in the value chain were to sue, the infringing party could be the subject of duplicative recovery for damages. And parsing out the share of damages would be extremely difficult. So it's the masonry contractors that have to sue. Now in Apple vs Pepper, there's this question of who is harmed by Apple's alleged monopolistic practices. According to the plaintiffs, the value chain looks the same as the concrete block manufacturers. Basically there's developers who sell their apps to Apple who sell those apps to consumers. But Apple said, whoa, whoa, no, we're not a retail store. Even though it's called the App Store, it's not a real store. We don't buy inventory and sell them. Exactly. We're more, we're an agent. And so the company argued, Apple does not buy and resell apps. Instead, Apple acts as an agent for developers and says, as respondents note, this is from the actual court case. The developer agreement confirms that Apple acts as an agent for app providers in providing the App Store and is not a party to the sales contract or user agreement between the user and the app provider. Thus, respondents concede that the direct sale is actually between developers and consumers, facilitated by Apple as an agent and conduit. And that sort of makes sense. You know, you go to a grocery store, they buy the apples from the farmer, they sell them to the customer, they take possession. A real estate agent facilitates a transaction.
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Jordi
Takes a fee, takes a fee, takes.
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John
A fee, takes a fee.
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Jordi
If Apple, if Apple was actually going and like buying licenses and then reselling them, you know, they'd be negotiating like crazy too, and be like, we'll give you a dollar and then we're going to sell it for $10, you could. Would be even worse for developers in that situation.
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John
Yeah. And so the interesting thing about this whole case is just how much the reality of the shape of the App Store and the business of the services narrative changed the entire financial story of Apple over the last, I guess, decade and a half. If you want to look at Apple stock, you should head over to public.com, investing. For those who take it seriously, they got multi asset investing. They're trusted by millions. But what you should do if you go and you look at Apple is look at the price to earnings ratio. Because back in 2011 it was 9.7, let's call it 10x price to earnings. Today it's 37x. So obviously the business has grown, but the value of the earnings is so much higher. Why is that? It's because it's so much stickier. And it's because they've developed this services monopoly, essentially where they have aggregated, you know, it's the Ben Thompson aggregation toll.
- [11:38]
Jordi
Road for your life.
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John
It's not a toll road. That's a great thing. There is a difference between a toll and a tax. And a toll is something that you pay that is directly linked to the service that you're getting.
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Jordi
Okay, so your toll road would be more like a toll road now.
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John
Now, yes, now it will be a toll road. And we should celebrate that. Or developers should celebrate that. Tim Sweeney should be celebrating that. Because a toll road is something where it's like, it's like, I'm paying $5 to drive down this road. That money goes directly towards this road.
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Jordi
Yeah. The tax structure applied to a toll road is like, what economic value are you creating by driving down the road?
- [12:17]
John
Exactly.
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Jordi
We're going to charge 30% of that.
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John
Exactly. Oh, you're, oh, you're, you're transporting a shipment of televisions on this road. Those are high margin. Or, oh, you're, you know, oh, you're a rich person driving.
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Jordi
You have some GPUs, you're hiding your truck. You have some GPUs on your truck, are you not? Yeah, yeah.
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John
Oh, oh. You can certainly break us off more as opposed to saying, you know, every time someone drives on this road, it takes a dollar of depreciation. We need a million dollars to repave it every year. And so we need to link the cost of using the service with the actual underlying cost of operating that service.
- [12:52]
Jordi
My question with these changes is what is the consumer experience going to be when trying to cancel subscriptions? Because the one aspect of the App Store that I've always appreciated is the ability to one click cancel from within the App Store and not having to go to individual apps or services and cancel. And so I do wonder, as soon as you let payments live outside of the App Store. Everyone has experienced any type of software retailer making it hard to figure out how to cancel a subscription. And so will Apple keep that kind of one click cancellation ability within the app or will they actually have to let.
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John
I mean this already exists because like you can go put your credit card down in Fortnite. The thing is that I think the subscription revenue is not as much as you think. It's not as much of a driver like the in app payments. The one off clicks like those are much bigger. It's a much bigger driver of overall economic activity. But I don't know on the subscription side it would be interesting if there's some sort of reaggregation at the stripe level or something like that. I don't really know. But in general the interesting thing is that so Apple's price to earnings goes from 10 to 40 basically massive run up. And this is all on the back of the services narrative that Luca Maestri, the CFO sort of outlined in I think 2016. He said each quarter we report for our services category, which includes revenue from itunes, the App Store, Apple Care, icloud, Apple Pay, licensing and some other items. Today we would like to highlight the major drivers of growth in this category which we have summarized on page three of our supplemental materials. The vast majority of the services that we provide to our customers, for instance apps, movies, TV shows, are tied to to our install base of devices rather than to current quarter sales. And so he's saying like you need to stop thinking about our financial performance as driven by how many phones did we sell this quarter. You need to think about just how many users we have broadly and start valuing us more like Google, more like Facebook. If you're an iPhone user, it doesn't really matter if you bought a new one this quarter. Obviously that's sort of continuing. But the big game is better monetization on top of the user base.
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Jordi
We should try to get Justin Kahn on to talk about his company Stash, because Stash is effectively payments built for game developers.
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John
Interesting.
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Jordi
Circumnavigate the App Store and so they're very well positioned here.
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John
Yeah. So Luca Maestri went on to say for some of these services such as content, we recognize revenue based on transaction value. For some of these services, such as App Store, we share a portion of the value of each transaction with the app developer and we only recognize revenue on the portion that we keep. To fully comprehend the scale of the services that we are delivering to our installed base and how fast this business is Growing. We look at purchases in addition to revenue. When we aggregate the purchase value of all the services tied to our install base during fiscal 2015, it adds up to more than 31 billion. That's an increase of 23% over 2014. So he's like. And so Ben Thompson has some funny quotes here. He says like, first off, it's striking that when Apple was facing one of the most challenging years in the stock market, its first response was basically to make the plaintiffs point in Apple versus Pepper. Suddenly the company wanted to recognize all of the app revenue, a portion of which is shared with developers. Sounds like a company in the middle. Sounds like a tax.
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Jordi
And then secondly, wait, repeat that original line. You said they've grown 34%, $31 billion.
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John
They increased 23% over fiscal 2014 was the historical growth. So basically what's going on is Luca Maestri is the CFO of Apple and he's having trouble in the market because it's 2015 and what's happening? Well, you're eight years into the iPhone. 2007, the iPhone comes out. It's expensive, it doesn't have 3G. It's got a lot of rough edges.
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Jordi
That don't have copy and paste.
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John
But it's cool and it's interesting and there's lines out the door for them and people at the higher end. Like a cell phone back then was like a hundred bucks or you'd get it for free. You get it as part of a bundle. Yeah, yeah, yeah. Every two years you'd get, you get a new phone and it was free. Basically. Then the iPhone comes in, it's $600, very expensive, very upmarket. Then a year or two in, they start figuring out how to bring down the price. It comes down to like 300, 400. There's these incentives for signing up for a year long plan. There's a whole variety of things that make it, you know, the App Store comes out, there's just more functionality. You don't, you no longer are like, well my BlackBerry still does this, but Apple doesn't. It's like, no, they do the enterprise stuff. They checked all the boxes and so it's growing, growing, growing. But eight years in, everyone who has one, they won the game. And so device like actual, the device install base device sales are starting to flatline and so then they need sort of a new narrative for the stock because it's sort of getting beat up because Apple's basically winning the sold everyone an iPhone, but it's over. Like the trade's over, right? It's like, yeah, we get it. Everyone has smartphones now. So the, the, the iPhone iPhone revenue is basically or unit sales are slowing significantly. Of course they're able to raise prices still because people are locked in like, it's a good business, but it's not this like incredibly high growth thing anymore. So Luca Maestri needs to come in with a new narrative and that's the services narrative. And so the services narrative is saying, hey, for a long time you've been looking at this bucket of basically like other revenue. We have device sales, which you've been obsessed with as the investor, as the Wall Street. You've been obsessed with how many iPhones we're selling, how much we're selling them for our margins on those iPhones, how many we can make, all of that. And then we've had this other bucket, which is like iTunes, App Store, AppleCare, iCloud, Apple Pay license.
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Jordi
There's a bunch of stuff treating it like the storage feature on the iPhone where it's like, hey, you have like fol photos and these other things that are taking in apps. And then like, don't worry about other.
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John
Yeah, don't worry about other. Don't worry about other.
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Jordi
We're just gonna throw everything in there.
- [19:18]
John
Don't worry about other. Because we don't really know how it's growing. Is it that high margin? We don't know. Then all of a sudden it became like, don't just not worry about other. Like, in fact, focus entirely on, focus on it exclusively because it is the best revenue. That's super high margin. And it's growing really fast. And oh, by the way, if you zoom out and you look at the economic activity that is driving on top of the App Store, that's, you know, yes, our take rate is 30%, but on top of it, just in 2015, it's $31 billion of economic activity in that ecosystem. And so this is like an admission of like the economic power that they have. But Ben Thompson was not a fan of it. I mean, I mean, he was a fan from the stock price perspective, but he had some really, really harsh words he said at the time. It seems incredibly worrisome to me anytime a company predicates its growth story on rent seeking, it's not that the growth isn't real, but rather the pursuit is corrosive on whatever it was that made the company great in the first place. It's like, whoa, it's sort of like, okay, they're going like private equity mode like the beautiful art. The creativity is gone at this point.
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Jordi
And Tim Cook has effectively done exactly that.
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Colin
Yeah.
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John
And he says that is a particular. Again, this is from 2018. That is a particularly large concern for Apple. The company has always succeeded by being the best. How does the company maintain that edge when its executives are more concerned with harvesting the profits from other companies innovations? So going forward, the growth story of Apple has been someone else innovates, someone else creates an app and we'll take 30% and we don't need to do the innovation. The innovation that doesn't need to happen here. And that's a big shift in the narrative. Whereas before all through 70s, 80s, 90s, 2000s, it was like the innovation comes from app.
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Jordi
They're like we're going to make the iPhone 1700, it's going to be newer, lighter, better, faster, stronger and they're going to buy it and then we're going to take our cut from everything on top of it.
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John
Exactly, exactly.
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Jordi
Anyways, should we. Yeah, we continue.
- [21:28]
John
Yeah, we can move on. Let me tell you about Apple's newest partner, Gemini. Gemini 3 Pro. Google's most intelligent model yet. State of the art reasoning, next level vibe coding and deep multimodal understanding.
- [21:41]
Jordi
Megan. Megan in the Wall Street Journal has a scoop. OpenAI ended a policy earlier this week that required employees to work at the company for six months before their equity vested.
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John
They only had a six month cliff.
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Jordi
Yeah, it was already. Already short a few months ago. XAI shortened their waiting period, known as a vesting cliff, from 12 months to six. And then there's been. I don't know if you want to start reading through it at all, but.
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John
Change to the vesting cliff announced by applications chief Fiji Simo came on our show last week. Is designed to encourage new employees to take risks without fear of being let go go before accessing the first chunk of equity. Interesting. So, so they had a problem where people would come in and say okay, I gotta just do politics for the first six months because I don't want to get fired before. That's like, that's a crazy culture.
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Jordi
I feel like, I think this has to be more reactionary to meta.
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John
Yeah.
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Jordi
And I don't know.
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John
Yeah, let's.
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Jordi
And obviously some of the other OpenAI.
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John
Short companies has shortened its vesting period for new employees to six months from the industry standard to 12 months in April. We have to, we have to ask Evan Spiegel about how he thinks about vesting periods and running a public company where your, your employees can, you know, sell the stock that they get. He's the perfect person to ask about this. This exact article. Let's see. Elon Musk's X AI and OpenAI competitor made a similar change in late summer, people familiar with the matter with the matter said. Xai didn't respond to a request for comment. Of course, the decision to loosen or do away with restrictions meant to ensure new hires stick around reflects the frenzied competition for top tier technical talent within AI. Within the AI industry, tech companies typically have a one year vesting cliff. That's what I'm certainly familiar with for new employees, preventing them from having to give away stock to hires who leave quickly or don't work out. But with AI companies, including meta platforms, Google Anthropic wooing top researchers with pay packages that can be worth $100 million or more, researchers and engineers have been able to hold out for the most attractive terms and in many cases have been quick to leave jobs they have found not to their liking. Yeah, I think that this is just like a sort of a red queen's race, just a if you give a mouse a cookie sort of situation where.
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Jordi
Competitive market employees end up benefiting. I also could see it them trying to kind of rehab their employer brand. You remember there was a bunch of. This was probably six, eight months ago at this point. OpenAI had a bunch there. There were some articles surrounding they, they had some like really restrictive exit agreements. That's right, that's right.
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Colin
Yeah.
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Jordi
A lot of people pretty frustrated.
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John
I feel like that was over a year ago. That was maybe, maybe a year and a half ago. About a year and a half ago. Yeah. That story broke that if you left and did maybe didn't sign a non disparagement agreement or NDA.
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Jordi
Yeah. If you didn't sign it they could claw back, claw back your equity. And then they were saying that was.
- [24:50]
Samir
Important during the whole like Ilya ousting thing.
- [24:52]
John
Yes.
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Samir
A lot of the employees left after that, but then they couldn't talk about it.
- [24:55]
John
Yeah, that's interesting. I always thought that like the bull case for that was well if you're going to be whistleblowing on something that's like a true AI doom scenario, well then money doesn't matter so you shouldn't matter about them clawing back your equity. But of course there are more like mundane reasons why, you know, you might want to talk about your previous competitor.
- [25:17]
Jordi
Previous there was another line that some people zoomed in on here. Connor Sen over at Bloomberg Opinion says the company expects to spend 6 billion this year on stock based comp, almost half of its projected revenue. And I saw this post going viral in a few different areas. But a company that creates however many hundreds of billions of dollars in value in a year and then has 6 billion of a non cash expense, it doesn't seem that crazy.
- [25:49]
John
Yeah, no, not at all. It seems fairly low for, I mean it's a 500 billion dollar company so it's 1% of the market cap that's going out to employees and also they have to be in like an incredible talent war. They're growing. There's just so much to do there. The number that was shocking to me was that you remember last week how there's the rumored SpaceX IPO that is apparently continuing. So SpaceX schedules bank pitches for IPO is in the Wall Street Journal. But the SpaceX IPO if they raise 30 billion will be lower than the 40 billion that OpenAI.
- [26:31]
Jordi
Yeah, in this private market.
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John
In the private markets. And so there's been this big question about are the private markets tapped? It appears it's the David Goggins thesis market.
- [26:41]
Jordi
The David Goggins thesis for life.
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John
I mean if you went back, you know, I don't know, five years and you were like yeah, like do you think you could raise $40 billion in the private markets or would you have to go public for that? They're like, you know the Saudi Aramco level funding, like yes, you'd have to be public but turns out you do not have to be public because in fact 40 billion is available in the private markets if you're open AI. Let me tell you about numeral compliance. Handled numeral worries about sales tax and VAT compliance so you can focus on growth. Let me continue with this. Tech investors have privately complained they're complaining. What do they have to complain about? We're in a bull market. They privately complained about the ballooning stock based compensation associated with fast growing AI startups, arguing that it eats into shareholder returns. Companies that are needing to be more competitive are dropping the traditional first year vesting. Cliff co founder of Levels FYI says in August after Meta chief executive Mark Zuckerberg launched that full scale raid on OpenAI staff and offered giant pay packages. OpenAI gave some of its top researchers and engineers a one time bonus with some employees receiving millions of dollars. The Journal previously reported. Yeah, I was thinking about that with Mark Chen went on Ashley Vance and was like I don't compete with neta dollar to dollar. Like I won't match their offers.
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Jordi
He won't go ban for ban.
- [28:03]
John
He won't go ban for ban. But it doesn't mean that he won't.
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Jordi
He'll go cliff for cliff.
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John
He'll go clifford cliff for sure. And also he'll go like one time bonus during a crazy raid if the time calls for it. So it's not like he's not participating in the war at all. He is a little bit, but I think it's the right move. Yeah, I do think that there's been this, I don't know, is it hedonic treadmill? What is the correct metaphor for what's going on with these offers? But it's very clear that like, you know, whoever, like the details of the packages are leaking at least through internal like back channels. And so the next person that gets hired wants something a little sweeter, like something a little bit extra, little cherry on top. And so you go from, you know, four year vest one year cliff to three year six months to no cliff to, you know, add more zeros on the pay package, more guaranteed, more upfront. But at the same time there is something to, I mean the reason I would argue in favor of no vesting cliffs here is that it does feel like the value that you can get from a new engineer joining from a, from a competitor at least is on day one. Like day one, okay, you were, you just left anthropic.
- [29:25]
Jordi
We're going to plug your brain, we're going to.
- [29:26]
John
You just left open AI. You just left meta. What's going on there? Just take us through it.
- [29:32]
Colin
Right?
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John
Like that's going to be the day one orientation. And so are they adding value on day one, like basically right? I would imagine so to be capturing a little bit of that value, that seems like a win for the AI researcher. At the same time, it is just another sign of the froth in the AI market.
- [29:50]
Jordi
Finbarr says, okay, but seriously, why is everyone leaving meta? People are speculating in the comments. Jane says vest. Finn says, but if you stay longer, you vest more. True. Someone else says no direction for the company. Several major unannounced RL project canceled. The 100 million boys reportedly do zero work because they know that if Zuck fires them, he'll look foolish. I don't know. I think some of these $100 million men and women just that do they are about that life. They do want to pursue greatness. They do want to do the biggest run. So who knows? I'm sure there's some instances of that. Andrew says behind state of the art on their Models. Of course, that's why Zuck, you know, overpaid for talent is to try to catch up.
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John
Yeah.
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Jordi
No PMF on their consumer AI products, even though they forced everyone on Instagram to see it. I think we got to wait a little bit for the Christmas season to come and go and see how, see how these things are selling. They don't even use Llama models internally to code. That makes sense.
- [31:04]
John
It is a tough position to be in because they don't have a public cloud. They don't have a cloud service even though they are hyperscaler. So. With Google, even if Google gets completely smoked by OpenAI and ChatGPT, and ChatGPT winds up being like truly like the Facebook of chat apps. And it's like 99% people use it captures 99% of the consumer AI value. It's like. Well, having a Gemini API is still extremely valuable because you have cloud services. It would be odd for Meta to wind up trying to build a public cloud service around the Llama models. I mean, even if they went close.
- [31:50]
Jordi
Did say at one point though that they would be open to reselling capacity.
- [31:55]
John
Yeah, but then you're going up against Anthropic directly. It feels very, very tricky. I don't know. Anyway, let me tell you about Cognition, the team behind the AI software engineer Devin. Crush your backlog with your personal AI engineering team. What else is going on? VCs funded OpenAI and in return OpenAI automated them. This is GPT 5.2 thinking is able to construct a cap table accurately in spreadsheets. This is what Fiji SEMA was talking to us about about emerging capabilities. Seems like they might have RL'd on some spreadsheets. That's pretty cool. Truly, everyone is going after spreadsheets at this point. There's everyone from our sponsor Ramp to Microsoft to a number of startups that have been on this show talking about Excel agents, Excel plugins, Google Docs plugins.
- [32:49]
Jordi
I'm so interested to see how that market actually shapes out because there's so many AI for Excel plays. Some full stack, some plugins.
- [33:00]
John
Yeah. And it's like, it's not that Harvey was pitched as like a word plugin. Like, even though lawyers do a lot of work in Word, that was not the instantiation of that product. It was much more or just like full service product. It was interesting. Anyway, there's a clip of Sergei making a joke about automating away vc. Should we play this video?
- [33:23]
Evan Spiegel
Pull it up.
- [33:23]
John
We have the ability to pull this up. Let's do it. What does he say?
- [33:31]
Jordi
No audio on our side yet, folks.
- [33:36]
John
Can you look. Well, in the meantime, let me tell you about. Here we go.
- [33:42]
Colin
Can do that Human majority of jobs that we know today, like more than.
- [33:48]
Jordi
50% might be replaced by machines that.
- [33:51]
Colin
Can do that human judgment piece better.
- [33:55]
John
Well, we've been working on the venture investment. Machine learning. No, I'm just kidding. It's kind of true, actually.
- [34:03]
Jordi
As long as I can buy one, I'm good.
- [34:06]
John
You think you'll do it? That is kind of what Google Ventures does. No, they started that way. I don't know if they're actually doing that.
- [34:14]
Colin
I don't know.
- [34:14]
John
They keep hiring partners for whatever reason. This is actually hilarious. Where was this?
- [34:20]
Jordi
Extremely candid.
- [34:21]
John
This is very fun.
- [34:22]
Colin
Love it.
- [34:22]
John
Anyway, let me tell you about Adeo, the AI native CRM. Adeo builds scales and grows your company to the next level. What is up with this? The CIA lost a nuclear device in the Himalayas. Did you read this article? Apparently. This is not new.
- [34:39]
Jordi
It's not a new story, but there's some new reporting in here.
- [34:42]
John
Okay. What happened? How do you. How do you lose nuclear device in the Himalayas?
- [34:46]
Jordi
I want to go through this. My only concern is that it's going to potentially take like an hour to read through.
- [34:52]
John
Let's do it another day then.
- [34:54]
Jordi
Yeah, we can do it. Let's do it. Let's do it tomorrow.
- [34:56]
John
Let's summarize it and put it. Let's put a link to it in our newsletter where you can get tech analysis and news. Get our daily op ed, top headlines and more. Sign up@tvpn.com oh yeah. You want to go to someplace? Take us wherever.
- [35:12]
Jordi
I was going to take us to Brett Adcock.
- [35:16]
John
Okay.
- [35:16]
Jordi
What's going on with Brett Adcock? We had a party over the weekend. Deadmau5.
- [35:20]
John
Okay.
- [35:21]
Jordi
And let's play this video. So I. He posted earlier today that that figure is looking quite cheap. Yes. In comparison to SpaceX.
- [35:32]
John
Okay.
- [35:32]
Evan Spiegel
Right.
- [35:32]
Jordi
Because there's a. There's a new biggest line on the private markets chart drinking on here.
- [35:37]
John
What is he drinking?
- [35:39]
Jordi
I think he's having a. I think he's cracking open some cold ones.
- [35:43]
John
This is my crazy.
- [35:44]
Jordi
So my theory is that they have done billions of dollars in sales.
- [35:49]
John
Okay.
- [35:49]
Jordi
And this is kind of their way of signaling if, you know. You know, because of course, it would be absolutely insane to have a party like this if you still hadn't shipped a product. If you still were kind of a sort of. I don't know if they're pre revenue but certainly being valued on vibe. So there's no way they would throw a party like this because SpaceX has.
- [36:10]
John
30 billion in revenue, right?
- [36:12]
Jordi
Yeah.
- [36:13]
John
And it's going out at 1.5 trillion. So it's at like 50x revenue. So to be cheap he probably trading at like what, 20x revenue, something like that.
- [36:26]
Jordi
That was my theory. That was my theory at least. And then so they're at around 40.
- [36:30]
John
That's their 40 billion.
- [36:31]
Jordi
They're at around 40 billion.
- [36:32]
John
So yeah, they could be doing like 2 or 2 to 4 billion in revenue potentially. Yeah, if it's cheap on a dollar per revenue.
- [36:38]
Jordi
I think this is, this is very.
- [36:39]
John
Much a, on a price to sales.
- [36:41]
Jordi
Ratio, a wink wink moment. Because seriously, you know. No, no, I don't think any CEO would throw this crazy of a party if you weren't, if you weren't really, really printing. So expect an announcement soon. I would, I would expect an announcement on, on the revenue side over figure anyway, that's wild.
- [37:03]
John
Astro Compute Pranav, Are we getting him on the show? Have we tagged?
- [37:06]
Samir
Yeah, I think he's coming on tomorrow.
- [37:07]
John
Okay, fantastic. So we. Pranavish has done the math. He sat down and did the math on the data centers in space. He said everyone and their mother has something to say about Space Compute. But no one has comprehensively broken down the physics, energy, cooling, economics and the real work involved. So I built a first principles model to show you guys myself. Tyler, what was his conclusion?
- [37:37]
Samir
Yeah, so I mean you can go through it, you can change all the different parameters and stuff and then you can run the simulation then and kind of see where it lands. I think the conclusion was that there are a lot of scenarios where it does make sense today. Right now if we use current technology, probably not. But if you kind of use the trend line where things are going, I think it's pretty reasonable to say that there's a scenario where it does work.
- [38:03]
Scott Kapoor
Okay.
- [38:04]
Colin
Yeah.
- [38:05]
John
What are you laughing at?
- [38:07]
Jordi
Fiber. Fiberglass is clearly an og. He says that was some OG dry humor, rage baiting like from day one. Tvp we certainly. A year ago, A year ago that was certainly like 50% of the show's content.
- [38:22]
John
For sure. For sure.
- [38:25]
Jordi
Viber, it's great, it's great to have you here. Thank you for, for being a day one.
- [38:30]
John
Andrew McAllen who's building spacecraft over at Varda Space, he's going to put data centers on a boat potentially. He has a boat project that's very fun. He says data centers in space it might not be economically rational, but it might be physically possible. Is he breaking rank from his. From the co founder of his company Varda Delian. He says I'm trying to bring some quantitative structure to a conversation that's been mostly big number vibes. So we have sort of dueling math equations at this point. What is he. This is vibe coded from public from. So maybe we need to have a debate. Maybe we need to have them both on. But he says tldr the analysis is actually far more favorable than I thought. It's a close thing. I desperately want a Kardashev level civilization, but we've got a lot of work ahead of us. Interesting. So he. So I mean, Delian's been saying like it's impossible. It's not gonna happen anytime soon. It's not gonna. It's not gonna. Not gonna be a thing. But Andrew McCallop says there just might be a chance. Who else is talking about this?
- [39:37]
Jordi
This post from Goth Goth says my dealer. I got some straight gas. This train called space data centers. You are gonna effing fry. Lol me? Yeah, whatever. 20 minutes later dude, wtf? We just need to radiate the heat and then we can totally bypass terrestrial regulations, my friend. Pacing. I should buy magnet stocks to get ahead of all the rail guns.
- [39:58]
John
What is.
- [39:59]
Jordi
There's smoke in space data centers, John.
- [40:01]
John
I don't get it. This is all over the place. Theo was happy about the EPIC thing. Props to Epic for seeing it through to the end. This is an incredible win for developers. Quoting.
- [40:16]
Jordi
EZ in the chat says data centers in a volcano.
- [40:19]
Samir
That.
- [40:20]
Jordi
That might think of that. Nobody's talking about that.
- [40:23]
John
That does seem like free energy.
- [40:25]
Samir
Isn't that just like geothermal? I feel like that's like.
- [40:28]
Jordi
I know, but that doesn't spack.
- [40:30]
John
That doesn't spac. Yeah, that's terrible vibes.
- [40:33]
Jordi
Data center in a volcano spacks immediately for sure.
- [40:37]
John
Well, let me tell you about Privy. Privy makes it easy to build on crypto rails, securely spin up white label wallets, sign transactions and integrate on chain infrastructure all through one simple API. Anthropic has ordered $21 billion worth of TPUs to train large claws. Is that really what they're calling it? Texas. From yesterday's Broadcom's earnings call. The scale at which we see this happening could be significant. As you're aware, last quarter Q3 we received a $10 billion order to sell the latest TPU Ironwood racks to Anthropic. This was our fourth custom that we mentioned in this Quarter, we received an additional 11 billion order from the same customer for delivery in late 2026. But that does not mean our other two Kaiju fights are the best kind of fights. From October. This is from Andrew Curran. He says Anthropic is in discussions with Alphabets Google about a deal that would provide the artificial intelligence company with additional computing power valued in the high tens of billions of dollars, according to people familiar with the matter. The plan, which has not been finalized, involves Google providing cloud computing services to Anthropic, according to people familiar with the matter, who asked not to be named Google's previous investor and cloud provider for Anthropic Large, Claude was just me having fun with words and is not anything official. I also considered Fat Claude. I'm saving Colossal Claude and gargantuan Claude for 2020 Giga Claude Fast Claude.
- [42:00]
Jordi
In other news, Fermi, which is the energy company that went public at a $20 billion valuation, they. They talked about getting. Getting their kind of facilities online I think in the2030s, and people were a little bit bearish about that. They've. They've traded down almost 75% since their IPO. So it seems like, yeah, we've basically seen this kind of rolling correction across every single AI. Pure play.
- [42:36]
John
You could even say that.
- [42:37]
Jordi
But nobody's done volcano data centers.
- [42:39]
John
No one has done those.
- [42:40]
Jordi
Where are you going? To where the chat's asking, where do you put the heat? Just shoot it up into the air. That's what.
- [42:46]
John
Yeah, volcano data centers is funny because immediately like. But don't you want the chips to be cold? You want that? You need cooling, not heating.
- [42:54]
Jordi
Yeah, the heat dissipates with the lava.
- [42:56]
John
It would be great to just hard light. But the heat's free. Heat's free. Data centers are hot. And in this one, we're getting the heat for free. Now what happens after a correction? You're corrected. I think we're corrected. I think it's possible that the market is cracked. It's perfectly valued.
- [43:13]
Jordi
I saw somebody saying that. The BG2 interview with Sam, they were claiming, like, it's very possibly helped us avoid a 2000, 2001 style scenario.
- [43:26]
John
Yeah, things could have gotten a lot crazier.
- [43:28]
Jordi
So maybe that was Brad's play. The whole time he was like, hey, we just need a little reset.
- [43:32]
John
He's a hero. He's a hero.
- [43:33]
Jordi
I'm gonna look like. I'm gonna look like. I might, you know, I'm gonna look like a. Maybe a bad guy for two weeks. But now he looks Like a hero.
- [43:41]
John
I mean, even. Even in the moment. He didn't look like a bad guy.
- [43:44]
Jordi
No, no. He asked the question. If he didn't ask that question.
- [43:47]
John
Yeah.
- [43:47]
Jordi
He would have been. It would have. It would have. There would have been, I think, some rightful criticism.
- [43:53]
John
Was wondering.
- [43:54]
Jordi
It was an important question to ask.
- [43:55]
John
Yeah. What I really like young macro. This guy's a great poster. Nick Land proclaims, may coldness be my God. What normies think he means, you know, techno accelerationism, techno capitalism. I like that. The circular AI deals made it in here as well. Just the stock charts. What it really means. He means Christmas. He means Coca Cola. He means a nice wintry retreat. Yes, exactly. Play some music. This is. This is what may coldness be my God means. It means cozy up by the fire and get festive. I love it.
- [44:35]
Jordi
Did you see this reporting on Jim Carrey in Grinch?
- [44:39]
John
No.
- [44:39]
Jordi
Jim Carrey offered to return his $20 million Grinch salary and was going to quit the movie amid panic attacks over the makeup. Then a guy who trained the military on enduring torture was hired to help him. Richard Marcinko was a gentleman that trained CIA officers and special ops people how to endure torture. Kerry told Vulture. He gave me a litany of things that I could go, that I could do when I began to spiral, like, punch myself in the leg as hard as I can. Have a friend that I trust and punch him in the arm. Eat everything in sight. Changing patterns in the room. If there's a TV on when you start to spiral, turn it off and turn the radio on. Smoke cigarettes as much as possible. There are pictures of me as the Grinch sitting in a director's chair with a long cigarette holder. I had to have the holder because the yak hair would catch on fire if I got too close. Later on, I found out that gentleman had trained me to endure. The Grinch also founded.
- [45:31]
John
You founded SEAL Team.
- [45:33]
Jordi
So the only. My only kind of question here is I feel like all these things, if you're being tortured, they wouldn't exactly be like, let him turn the TV off and on again. Let him turn the radio on.
- [45:43]
John
Oh, yeah, that is interesting.
- [45:45]
Jordi
So I think. I think these are probably great things to do if you're not getting tortured and you're just developing an anxiety attack.
- [45:51]
Colin
Yeah.
- [45:52]
Jordi
I did resonate with this because when we had the Halloween makeup, I mean.
- [45:56]
John
To be fair, it could be like metaphorically being tortured in a foxhole. As a member of Steel Team six, if you have, like, you know, oh, you're staking out someplace and you're in a muddy pit and it's a hole and you're not being directly tortured by like an enemy, but you have to deal with a really hard situation. And so you sit there chain smoking and I don't know why you have a TV in this scenario. Again, I didn't land, I didn't land on that one.
- [46:22]
Jordi
But yeah, this just resonated because when we had, when we were three hours into our Halloween episode and I started to realize didn't resonate for me, I was like, I am fully. It felt like very suffocating having, you know, I was fine with it 2cm surrounding everywhere. And it was a very weird feeling, I think.
- [46:42]
Samir
I mean, he was doing like nine hours a day of makeup.
- [46:44]
Jordi
Can we get the, can we get the, can we get the Gigachad filter.
- [46:47]
John
On Tyler that makes us look like, you know, wimps compared to him. We were only doing three hours of makeup. Nine hours is really, really heroic.
- [46:56]
Scott Kapoor
Wow.
- [46:56]
John
Well, totally worth it. If you aren't watching the Grinch this Christmas, go watch something that's being restreamed. Restream One livestream 30 plus destinations. If you want to multi stream, go.
- [47:07]
Jordi
To restream.com Christmas Will Brown says ChatGPT is the only consumer app with regular pop ups asking if I want to downgrade my subscription.
- [47:15]
John
This was hilarious. 3,000 likes. I mean, it's a testament to the.
- [47:22]
Jordi
They're running this as a B test. They're like, we tell people they can pay less and they don't. They enjoy giving us money.
- [47:29]
John
Hey, maybe, maybe, maybe the pro plan results in more permanent churn. And so this is actually ltv. A downgrade is actually LTV positive. No way to prove that that's true. But it'd be very funny if that was the case. No, the polish around the product is potentially like the way you win consumer. I really think we're in the era of productization more than the latest model.
- [47:58]
Jordi
The product managers are the heroes. Now I want to see a product manager getting a four year, $1 billion package.
- [48:05]
John
It's not completely over for the AI researchers, the models are important. They do get better and there's functionality under the hood that's research driven, that's valuable. But if you believe in the Ilia, we're in the age of research, Then what is the AI researcher doing? They are doing experiments that you have no idea the timeline. You're not just doing engineering. You can't just put one foot in front of the other and get easy wins. It's actually going and doing science and discovering new ideas, new ways to create new capabilities. And so in the age of research, the researchers should be off doing research and the user experience designers are the heroes basically. I mean the product managers are going to be more important as the apps fight for market share. What do you think Tyler? You agree with that?
- [48:59]
Samir
Yeah, that makes sense. It's fun to think about. Like Elon and Ilya are like perfectly counter positioned. Right. Like Elon is like we don't have any researchers. They're all engineers.
- [49:07]
Colin
Yeah.
- [49:08]
Samir
They're going to make small improvements and then you see like, like GROK is like. Yeah, it's largely undifferentiated from all the other alarms. They don't have like a like anthropic has code. OpenAI has like the actual consumer. GROK is like still kind of undetermined.
- [49:23]
John
Yeah. I wouldn't say that they're counter position. They actually agree like they're consistent. I think they are opposites but they both embrace a fundamental reality about the world which is that you should either be doing pure research or pure engineering. And it's sort of hard to mix the two or just that research won't immediately have, won't translate to faster times on the racetrack which is like what's happening right now in the real world.
- [49:51]
Samir
Yeah, but I mean Elon is like very AGI pilled.
- [49:53]
Colin
Right.
- [49:53]
Samir
But he still doesn't think about like doing pursuing AGI as like a research thing in engineering.
- [49:58]
John
Oh, interesting. Okay. Okay.
- [49:59]
Colin
Yeah.
- [50:00]
John
Maybe they are a little bit more different than I considered. I don't know. I mean how do you interpret the fact that the ARC AGI scores are going through the roof and yet qualitatively like people are not shocked by the interaction of talking to 5.2 or the.
- [50:19]
Samir
Latest Claude 4.5 or I think it's just like, it's just about like the spikiness thing.
- [50:25]
John
They just created a new spike.
- [50:27]
Samir
I mean the spike just got longer.
- [50:29]
Colin
Right.
- [50:29]
Samir
It's like the coding ability of the model I'm sure is much better but the actual ability to write pros is not that much better because it's just like not what they're pursuing. But it is bullish. Like this has been my take for a while where like if they can, even if it's just benchmaxing on, if.
- [50:44]
John
You can create a spike in any direction, you can solve any economic problem.
- [50:48]
Jordi
Yeah.
- [50:49]
Samir
Then the real problem just create every.
- [50:51]
John
Possible spike and eventually it no longer looks like spiky intelligence, it looks like smooth.
- [50:56]
Colin
Yeah.
- [50:56]
Samir
Like the engineering task is to find the RL environment that makes the model better at writing, which is like what they're doing. Like you see all these RL environment startups that basically just make these things that models that labs train on that specifically do things.
- [51:09]
Jordi
Suspended cap says OpenAI could probably save 25% on their compute if they just taught the model to give me the answer and then shut the F up a bit wild. This one resonated.
- [51:21]
John
Figma Think bigger, build faster. Figma helps design and development teams build great products together. Get started.
- [51:28]
Jordi
Figma.com of course Jason Freed has a note here. He says one of the best upgrades to ChatGPT is simply changing the base style and tone to efficient and giving it a simple get right to the point, be practical. Above all instruction. No more praise, no more flourishes, just the answers.
- [51:45]
John
Everyone appreciates Tyler Jolly maxing. He really is in the Christmas spirit. It's fantastic. Hey, are you a miner? No, I'm here to sell shovels. Everyone's selling shovels. 20,000 likes just for different shovels. Some people are mining, some people are mining, some people are in the trenches, but it is just a few people that are not selling it.
- [52:12]
Jordi
Big change from a year ago when everyone was just talking about how wrappers were cooked and people were talking somewhat negatively about wrappers.
- [52:21]
Colin
Yeah.
- [52:21]
John
It's interesting. Are wrappers selling shovels during.
- [52:26]
Jordi
No, no, they're mining.
- [52:27]
John
Mining. It's actually mining in like a very small side mine, not the main mine but like a smaller side mine I guess. What do you think?
- [52:34]
Samir
I would think of mining as being like if you are actually using the models to do like a roll up or something. I think that's much more in the.
- [52:45]
John
AI shovels mining analogy. The mining, I feel like it's like it's Elon and it's Sam and Demis that are doing the mining.
- [52:54]
Jordi
Right.
- [52:55]
John
They're doing the core thing and then everyone else is like, I'm drafting off of them, I'm supporting them with shovels. Like there is a gold mine that's being mined and if I'm just like riding the coattails of that, then I'm coming along.
- [53:10]
Samir
I think of the gold as being the output that you can get with the models when you use the models. The models are the shovels.
- [53:18]
John
The models are the shovels.
- [53:19]
Samir
Yeah.
- [53:21]
John
That is actually funny.
- [53:22]
Samir
Like if you're doing a roll up of some whatever companies and you're using AI to just. Yeah, you're not like it's an AI company but you're Using AI a lot.
- [53:31]
John
Typically. Typically the way, typically the way the whole shovels analogy is levied at startups is, oh, you don't have it in you to create a great mobile app, so you're going to build a developer tool that helps people ship mobile apps. That was the original like the Shovels critique. And it's the same thing with AI is the idea of like, like, why don't you solve a cool problem with AI, actually create some sort of like, you know, system that solves a particular problem versus saying like we're a platform for running AI agents on top of it. Like we don't know what the agents will do, but we know that they need a database or something like that. That critique has never been. It's never hit that hard with me. Because they're both valuable. We need all of that.
- [54:19]
Jordi
Yeah. That being said though, yc, I think it was a spring YC batch. There was a lot of people selling shovels. A lot of like, very specific. I'm creating a full stack solution for end customers or as I'm creating AI agents to help you manage your AI agent infrastructure company. And it was like, well, what about. I think we need more actual end state agent companies that are selling to everyday consumers.
- [54:45]
John
Everyone talks about selling shovels during a gold rush. No one talks about selling just the wood shaft that goes into the shovel. I don't even sell the shovel. I'm a particular slice of the supply chain in the shovel supply chain. I'm so deep in the shovel supply chain. I sell the screwdriver that makes the screws that go that assemble the shovel. That's my business. I'm seven layers of abstraction away from the gold.
- [55:11]
Samir
I sell the shovel making machine.
- [55:13]
John
Yes, the shovel making machine. That's where you want to be.
- [55:17]
Jordi
I wonder if anybody's building a wrapper company to help people wrap presents. I'm assuming that all the different LLMs can do this pretty well. You take a picture of an item. They can.
- [55:29]
John
I think they do that. That's sort of like your Rubik's Cube benchmark because it requires shape rotation, which the models have been notoriously bad at. I wonder, can they actually give you instructions on arbitrary size present? The best way to wrap the. The present you should.
- [55:45]
Samir
That would be an excellent.
- [55:45]
Jordi
Well, speaking of holiday gifts, we did a snap. We did a snap demo.
- [55:48]
John
We did.
- [55:48]
Jordi
Today I was wearing the specs. We're about to have Evan on Yes. And I asked my specs. I said, can you count the presents under the Christmas tree? And nailed It.
- [55:56]
John
Yes. Fantastic.
- [55:58]
Jordi
These are the important problems. I think it's about time.
- [56:00]
John
Yes. Let's bring in Evan from Snapchat. Welcome to the stream. We're going to walk him in. Let me tell you about Fall, a general media platform for developers. Develop and fine tune models of serverless GPUs and on demand clusters. I've been. Great to see you.
- [56:18]
Jordi
No way.
- [56:18]
John
Go for the tree.
- [56:20]
Jordi
Thank you. Great to have you in the show.
- [56:23]
John
Please have a seat.
- [56:24]
Jordi
Suit it up.
- [56:25]
Colin
Look at this.
- [56:25]
John
You look fantastic.
- [56:28]
Evan Spiegel
My wife told me to wear a suit. Like it's part of the.
- [56:31]
John
It is, it is. You know, we put on these suits sort of as a joke. It was sort of a. I mean, you're one of the many tech people who maybe popularized the T shirt. And I wore the T shirt for my entire career in technology. And we were like, we want to stand out. Everyone else in tech podcasting wears the T shirt. Everyone wears the T shirt. Whether you're CEO of a public company or a podcaster, you wear a T shirt. We're like, how do we stand out? Let's do the opposite. Let's wear the suit.
- [56:57]
Evan Spiegel
It's like instant credibility, too.
- [56:59]
Jordi
Well, so the funny thing, when some of our videos end up going viral in parts of the Internet that aren't kind of familiar with what we're doing, there'll be comments of people like, look at these guys in suits. They don't know how. Are they talking about software. They don't know anything about tech. Not getting the bit. Anyway, super excited to have you on today. There's so much to talk about and I don't even necessarily know where we should start.
- [57:24]
John
I mean, I'd love to start with a demo that we got just an hour or two ago. SPACs. How are you thinking about hardware these days? What's the state of the organization? How much of your time are you spending on it? Because you have a monster business to manage. You have earnings calls. There's so much going on. How do you. How are you splitting your time? What does that team look like? What are your ambitions for hardware these days?
- [57:48]
Evan Spiegel
Yeah, I mean, it's a really exciting moment for snap because in 2026, we're releasing the first consumer version.
- [57:53]
Jordi
That's right.
- [57:53]
Evan Spiegel
Of our glasses. Obviously back, you know, maybe now, more than 10 years ago, we released camera glasses. You know, we kind of stepped our way into building out what was the.
- [58:01]
Jordi
Actual first release of that public release.
- [58:04]
Evan Spiegel
Must have probably 2016. Broadly to the public spectacles. Yeah.
- [58:09]
John
Weren't they yellow?
- [58:10]
Evan Spiegel
The Original, they had a little yellow accent, yellow flag the camera.
- [58:14]
John
Yeah.
- [58:14]
Evan Spiegel
Back in the day, people were, you know, and I think this is still a concern. People were very, you know, worried about privacy. So big, you know, yellow ring around the camera and a light to let.
- [58:22]
John
People know there were a bunch of really cool, like, little touches. Like I remember the ability to film. It was basically a square sensor so you could film horizontal or vertical. And just those little touches. I'm wondering, like, do you think those like small little wins are what help us break through to, you know, a world where everyone's daily driving some sort of augmented reality device? Is it a game of inches on the product feature side or is it just like more deeper in the supply chain? Once they're 50 bucks, everyone's going to be doing it. What's critical path to getting to bone level prevalence in face wearables?
- [59:06]
Evan Spiegel
Yeah, I think they're going to have to be major breakthroughs in terms of the utility people get out of the product. I think the biggest challenge, and we learned this very early on with camera glasses, it's just not that much better than taking a photo with your phone. Right. Maybe you're rock climbing, you're on a jet ski, you want to make a video hands free. I think that's a totally reasonable use case. But that's not an everyday, all the time use case. And so a lot of what we did, taking those early learnings, we sort of proved out people were willing to wear a camera, they were willing to wear glasses that had a computer inside. But then we just shifted our focus entirely to the platform and to driving more utility. So I think the latest version we put out in 2024 that you got to try for developers, which is very focused on all those platform components, so the developers could build all sorts of amazing. Now developers have built hundreds of these lenses. You probably have to try a couple of them. And so I think it's really about driving utility.
- [59:56]
John
Yeah, yeah, that makes a lot of sense. It's always frustrating when you're in. You're in like a technological platform shift. And I've seen this with virtual reality where it's like so amazing. And then the demo is like, well, it's really good on a plane. And you're like, I'm just not on the plane that much. It's sort of the same thing where like if the demo is really good.
- [60:18]
Jordi
If you're watching a movie alone.
- [60:19]
John
Yeah, exactly. It's like, well, actually I want to watch a movie with people. And so the theater does work or the TV works. I'm wondering about how much AI is an accelerant in delivering value in the wearables context, because I imagine it's useful for developers to write software faster now. But also do you think that that's going to be a relevant precursor to mass adoption is the AI?
- [60:50]
Jordi
I'll give you an example. The live translation functionality and what's very cool about specs is having basically the heads up display centered. So I can be talking to you and be getting live translation, which to me is like the kind of thing that feels very sci fi. And to be able to get it in a demo today, that feels like the kind of thing that AI is a real accelerant for. And you can imagine being in a situation where you actually have multiple, effectively like subtitling happening all the time. But maybe on that note, I guess from my understanding you guys are not saying we're going to build the hardware platform and we're going to build a foundation model lab and maybe if you could talk more about that, because I think that's obviously quite a bit different than some other hardware players.
- [61:42]
Evan Spiegel
Yeah, so far we just haven't seen a need to build foundational models outside of this sort of image and video and 3D areas where we think we can really differentiate and where there aren't as compelling open source solutions. So we also are very focused on being able to offer our experiences to our entire community. So nearly a billion people around the world, if you do that with backend inference, it's just too expensive to be able to offer it. So a lot of our innovation starting several years ago was to be able to run models on device or with a hybrid solution where we can do some on the back end, some on the device. And so that's really where our foundational work has happened. I think as you look at the glasses, near term I wouldn't expect AI to be a major accelerant because again, I don't think it's meaningfully better than your phone.
- [62:24]
Colin
Right.
- [62:25]
Evan Spiegel
And I think that's really the bar that we have to clear. These experiences have to be 10 times better than what's possible on your, your phone. And, and I do think over the long term though, AI will be very, very meaningful and less because of the, you know, sort of chatbot style use cases today, but more in terms of the way that like we change how we use computers. So if you think about today, we're spending what on average seven hours a day in front of screens, we're spending a huge amount of time operating computers to get work done. So like physically getting the work done ourselves. And I think what AI enables is a change in the way we relate to computers, where we're going to spend less time operating computers and more time supervising AI. And in that transition, the glasses form factor I think is going to be really compelling because it, it essentially gets you away from this operational paradigm into the supervisory.
- [63:10]
Jordi
Yeah. Or another, I mean, potentially more near term example is like you're working on your car and you have this like AI assistant running permanently and so you have full ability to use your hands and make changes. And it's kind of reasoning on the fly with you in a way that, you know, everyone's experience. Like, you know, watching a YouTube video and like pausing it and trying to do something and then, you know, playing it again. And I feel like, I feel like there are some very near term.
- [63:35]
John
How is that shift like manifesting itself in your daily life as a CEO? Like, I found that since the dawn of ChatGPT, there's been this like urge for folks to like send ChatGPT written stuff to me. And I've always said, like, just send me the prompt and I can kind of rework it in my brain. Like, just send me the bullet points. I don't need to turn it into a paragraph. But I'm wondering if you can give me some color on how you're seeing AI change your workflow or the folks that you work with on a daily basis.
- [64:06]
Evan Spiegel
I think it's a really great thought partner. I love to test ideas or try ideas or I love to run simulated focus groups with AI, which is really fun. What do you think different types of people will say or respond to in terms of a product or idea that we're working on? I love it as a, you know, of course, for all the visual and, you know, visual stuff, video generation, I can test out ideas really, really quickly. I, I haven't actually found it yet to be particularly creative, but as a creative thought partner, it's, it's fantastic.
- [64:35]
John
Yeah. Yeah. How do you think about the, the instantiation of AI features within the core Snap product? It feels like there's an immense amount of energy all over AI with like super intelligent. It's going to do everything. It's going to make the full video, it's going to make the video and the audio. And then when I see, it's like, yeah, you get like one or two viral videos out of one of those generators. But the much cooler thing is, I think when there's AI riding alongside the rest of the Creative Suite. How are you thinking about setting up creators for unique experiences that are like AI enabled, but there's still a lot of that creativity that's coming from them.
- [65:13]
Evan Spiegel
Yeah, I mean, I think AI has been a core of the Snapchat experience for such a long time, but we've never described it as that.
- [65:18]
Samir
Right.
- [65:19]
John
Like the original, like actual, like location mapping, the AR stuff, and even all.
- [65:23]
Evan Spiegel
The transformations that are happening in our camera.
- [65:25]
Samir
Right.
- [65:25]
Evan Spiegel
A lot of the real time on device generative transformations and these sorts of things. People just laugh and have fun with their friends doing it. They're not thinking like, oh, this is some AI enabled.
- [65:36]
John
Face tracking has been in there for so long and that's always been AI, I'm sure.
- [65:41]
Evan Spiegel
Yeah. And I think there is a lot of opportunity to rethink the way that people build lenses. So that's been really, really powerful, you know, in the past. Developer, it would take a really, really long time. You had to build the 3D assets yourself. I think there's a huge democratization that's happening right now because anyone you know, we have a tool called Easy Lens. You can, with a prompt, build all sorts of amazing experiences in ar.
- [66:03]
John
Yeah. What is the, like the economic flywheel there? How do you think about allowing folks to monetize that build businesses like come like, what is your current mental model for the economy that's occurring on the platform?
- [66:18]
Evan Spiegel
Well, one of the things we've thought a lot about is that there are a ton of models that are being created, but very few people actually have customers. We have a ton of customers. And so what we've done is created a service called Lens. So if you're a developer, you can publish your lens to Lens. That means it's behind our paywall. People get free generations, they can use some lenses for free for a certain amount of time, and then they convert to paying customers and we revenue share with those developers. So I think interestingly, Snapchat's become a bit of a front door. Right. For folks who want to deploy their models or deploy a specific lens or sometimes people are even building more advanced game experiences inside of Snapchat. And with Lens plus, they get all that monetization for free, essentially. We do that for them.
- [66:58]
John
Yeah. How do you process the whole metaverse? Boom and bust. And maybe it's going to boom again. Just this idea of just adding more and more functionality until you're effectively in a game world. Unlimited content. Do you think that is the primary driver of giving people the Ability to make games just better AI tools. Are there other things that you are actually thinking about integrating there or do you think that just partnering with all the models will eventually give people the ability to build whole game experiences?
- [67:40]
Evan Spiegel
Well, it's interesting. The reason why we love games actually the same reasons why we hate VR, right. Which is games actually bring people together in really interesting ways. And we see that on Snapchat all the time. It can be a conversation starter or a way of. For, you know, a way for two friends. You know, I play putt putt with my wife on Snapchat. Right. And we just send them back and forth. It's fun, right. It's a way to connect. And so I think for us, games on Snapchat are really about, you know, that like, spark of connection between people. We've invested $0 into VR, right. Because we essentially think that it takes people out of the real world and away from the places, the people, you know, everything that they love. And so our view is that VR has a very, very limited and low use future because people love the real world. And so our bet for the last 11 years has been exclusively on augmented reality, on trying to enhance the human experience rather than replace it with VR.
- [68:29]
John
Yeah. Is there anywhere where you think VR does make sense? Are there specific B2B use cases or some sort of, I don't know, maybe Enterprise is aware all this stuff goes to die. But I'm wondering if there's any, if there's any place.
- [68:45]
Jordi
But I guess the question is like, I think people assume that VR eventually will be good enough, that a huge swath of the planet will be engaging in it a lot. Like at least that. At least like that. My personal theory. And maybe you believe differently. It sounds like you're even okay with a scenario where even if it does work, you're like, other people can kind of play in that and we're happy to kind of exist in this hybrid world.
- [69:12]
Colin
Yeah.
- [69:12]
Evan Spiegel
Just philosophically, like that's not a world that we want to support in any way, shape or form. You know, I think what's really important is actually trying to create products that foster that human connection. Right. And in doing so in person, I think we're in a moment where people are really valuing that. Right. And they want more of that and they're thinking about how to get, get more. And I think AR is coming about it at a really important time when people are saying, actually I'm spending a lot of time in front of a screen, I'd like to spend More time together with my friends. I'd love to do that in a way that's more fun or entertaining. Our kids, even our kids are. At least three of them are still pretty little. But when I see them playing around with those specs, even though they're clunky and heavy or whatever, they're outside running around, playing together and you're like, that's a different vision for computing.
- [69:52]
Jordi
Yeah. You should see us doing the demo this morning. I was running lab drawing. I was playing this drawing game that you guys have where I was drawing. And the ability to have this shared space and have permanence in the different visuals that you're creating on a scene is just really cool.
- [70:14]
John
Do you think AR specifically means pass through or. If I'm doing reprojection, I have cameras on the outside of a VR headset and I'm reprojecting that and it's indistinguishable for the user. Does that count in your mind? Is it a meaningful distinction?
- [70:31]
Evan Spiegel
In our mind, it doesn't count. So you're describing pass through on VR, where the cameras in very high fidelity.
- [70:37]
John
There was this quote from Palmer Luckey where he was saying, why would you ever try and recycle photons? Just create new photons, take a video of the outside world, reproject it inside. And the benefit of that is that if you're in a very bright world or you're in a bright space, you can dim that and put something brighter on top of it. And there's certain the additive nature of physics around light make it so that it does seem like there's limitations to pass through augmented reality, even though the latency is zero and it's the real world and there is something that's better. I just know that you might be grappling with it.
- [71:14]
Evan Spiegel
Yeah, we've definitely seen some real challenges there. So the big difference obviously is between pass through and then see through, see through glasses that we're working on. I think Snapchat is actually a really good example of pass through. So it's a screen, right. And we do have, I think, the best pass through AR technology in the world. Right. So we are able to real time render out those experiences through the phone. I think the question is, do people really want to wear a screen on their face in front of their eyes? And then, you know, if you think about the compute that's necessary to reproject the world. Right. And the power required to, you know, power all of those pixels. Right.
- [71:47]
Jordi
And it has to be like real.
- [71:48]
Evan Spiegel
Time and it's got to be real time.
- [71:49]
Jordi
You can't have like a half second of lag, otherwise you're just stumbling around.
- [71:53]
Evan Spiegel
Exactly. So when you put that all together, you're just stuck in headset land. And I think it's just very clear that people don't want to wear giant headsets all day long.
- [72:00]
John
I think that's in terms of stuff that they do want to wear. Obviously everyone wants something light, but in a world where field of view is somewhat restricted in the short term, I'm sure it'll get better wider and wider. What's the trade off between center of field, center view versus like Call of Duty minimap, like locked in the corner?
- [72:23]
Evan Spiegel
Well, I think what's really important is that you're actually able to control where objects are showing up in the world around you. So the big problem with this sort of heads up display style products, I mean, I don't love that if you're looking at the screen, you're looking at somebody's crotch too. It doesn't make any sense. But the exciting thing about specs and as it sounds like you saw earlier today, is you can decide where to place things in the world where you want to draw. And I think that's a very big difference from these heads up display products.
- [72:49]
John
That makes sense. How do you think about, like when the iPhone came out, there was sort of, it was a little bit expensive. We were talking about the 700 bucks. You could compare it to the price of a phone, you could compare it to the price of an ipod. Steve Jobs called it Internet communicator. Right. So you kind of bundle these few different products together and you're like, well, I'm getting $700 worth of value or later $400 worth of value. Do you think that there's an important sort of anchoring point for augmented reality glasses where consumers need to underwrite it against an external monitor for their computer or a TV at home? Is there some sort of like economic trade off point where, hey, I'm going to college and instead of getting a 42 inch TV and an external Apple display for my MacBook that I'm going to plug in, I'm just going to go with augmented reality glasses because it just makes more sense economically. Is that an important point?
- [73:52]
Evan Spiegel
I think that's one way to think about it for sure. And the iPhone, when you add in the carrier subscription, was way more than that. So I think they were able to, to sort of have a $700 sticker price, but then I think some of the initial plans were like $50 a month and that kind of thing. Two or three years. I'm not sure that was a really meaningful outlay for that product. To me, I think the iPhone is maybe not the best reference point here. I think this feels to me a lot more like the Macintosh or like early computers with the smartphone. Steve essentially said, hey, everyone else is doing the phone wrong, right? You had a BlackBerry already, or you had a flip phone or this kind of thing. And Steve was like, hey, y' all are doing it wrong. This is like what a phone should look like. And I think glasses are a little bit different because, you know, we have some similarities in the sense that, like, on one hand, you have these VR headsets, right, that are very capable, but that are essentially unwearable. And then you have the, you know, really lightweight glasses that are very wearable but do nothing. And, you know, our vision with specs is to have a very lightweight pair of glasses that's incredibly capable, right? So VR sort of level of immersion and capability, but in a see through, lightweight pair of glasses. So I think this is a little bit more of the Macintosh style moment where it's a new way to look at computing rather than a better version of something people are already familiar with. And that's a bigger challenge. So I do think, to your point, anchoring to, hey, a giant flat screen display cost $2500, cost $2500, or a laptop costs, you know, 1500 bucks, or whatever it is is an interesting way to think about it, but I think actually describing the utility of the product will be the biggest challenge.
- [75:31]
John
Interesting.
- [75:32]
Jordi
Yeah, there's something. There's something to be said for if you just create a product that is incredibly fun and entertaining, like, consumers will find, like, they're not saying, like, oh, I'm not going to get the laptop anymore because I can type on this thing. It's like, I have a device that is creating value in my life purely through fun and function, and it doesn't need to replace anything.
- [75:58]
John
Who do you think the earliest adopters will be? Do you think young people will drive the ultimate breakthrough adoption of augmented reality?
- [76:06]
Evan Spiegel
I think the earliest adopters will be our developer community. So we already have hundreds of thousands of developers who are building lenses for. For our platform. There are already tons of developers using specs today building all of these sorts of experiences. And so our strategy is actually to start with that core of folks who are super passionate about this product. And I think they'll be able to Tell stories about all the amazing things that they're building, which can then help us transition to more like mass market style adoption. So when a developer's building a lens, you can pop these on in Stargaze, or hey, you can pop these on and play lawn games with your kids, or hey, pop them on and watch streaming video on a giant screen while you're in a plane or whatever you want to do without having to shut out the world. I think those sorts of stories are really.
- [76:52]
John
Yeah, I feel like Snap has been able to be remarkably resilient with young people in a way that a lot of other platforms, they just kind of like they get their initial bucket of users, then they grow with them forever, and then they're monetizing when they get older. Is that, do you think that there's some sort of benefit of having a young cohort that potentially could drive just the product being seen as cool?
- [77:20]
Evan Spiegel
You know, I joke around with my wife all the time, you know, it's cool to be uncool. We're not aiming for cool, we're really aiming for value. Right. And I think ultimately like that value cuts across all sorts of demographics. So I actually think companies, yeah, look.
- [77:34]
Jordi
At AirPods I think are a perfect example of this. They were mocked early on. It was like, oh, look at this guy with his little earbuds in. What a bozo. And then all of a sudden it was like $20 billion a year revenue line and it just becomes totally normalized and it was just because the function was there.
- [77:51]
John
Yeah, yeah.
- [77:51]
Evan Spiegel
And I think being unapologetic about the value is what's so important. And so that's why, again, starting with our community that loves it, believes in it, and has wanted a product like this now for decades. I mean, some of the folks on our team have been working on glasses based augmented reality for. For 25 years. You've only been working on it for 11 years. So the community of people who have wanted this product for a super long time are going to be the most excited about it. And that's really who we.
- [78:15]
Jordi
How do you and the team think about timing out these bets? Because obviously you've been at it for 11 years. And to me it seems from the outside that it's like trying to pull the future into the present, but at the same time being patient and not betting the company on like, hey, we need to make, you know, 10x the progress in the next 12 months, otherwise we're killing this product. Like, it feels like more, quite a bit more like steady and being. Being open to again, like, not being. Being impatient, but patient at the same time. Is that accurate?
- [78:50]
Evan Spiegel
I really love that question because I think that is exactly what has killed a lot of Glass's efforts to date.
- [78:55]
John
Right?
- [78:55]
Jordi
Like, we're gonna raise $200 million, spend it all in two years, and then you're sitting there and being like, okay, we made progress, but it's not commercial.
- [79:03]
John
It feels like we're in an age of research for vision, broadly, VR, AR, the entire category. There's just a lot of. There's a lot of experiments that need to be run, and there's no guarantee that it's going to be, oh, next year's the year, or five years, we don't know.
- [79:19]
Evan Spiegel
This is one of the reasons why we thought it was so interesting to play in this space because we have this huge advantage of being able to, to invest consistently over the long term, right? And that is a unique advantage, especially when we're talking about this amount of capital, right? We've invested more than $3 billion in glasses over 11 years, and we've been able to do that very, very consistently. And so at the same time, we've seen companies both large and small start a Glass initiative, shut it down, start a new one, fire the team, hire a new team. And just the whole time, we have built a team of incredibly talented folks with a very, very singular and focused vision. And we've done that over the last.
- [79:53]
Jordi
Is that part of the pitch? I mean, over the summer we saw insane talent wars. Snap is in a unique position, like somewhat isolated down here in Southern California, which I think helps, but is part of your pitch to talent? Like, hey, this is not a program that we just started up and we're going to work on for 3 years and then the budget might get cut by XYZ. Is durability and longevity a part of a part of your pitch?
- [80:21]
Evan Spiegel
I think that's definitely a part of it. But the most talented folks, like, they want to create the future, not copy the future, right? And I think, you know, we have a reputation now for leading in terms of innovation in this space. And, you know, the folks who are really deeply in this space and who are experts in this space know that what we're doing is leading, right? I mean, what you experience with specs today, there's no other product that you can. That a developer can just sign up for today and have that type of experience doesn't exist. So I think folks who are really deep in this space understand our leadership here, and that's really helped.
- [80:51]
Jordi
Yeah. The pure depth of different experiences in the product, too. I mean, we only had 20 minutes or so, but there were, like, so many different pages that we didn't even get to. And experiences, which is very cool.
- [81:03]
John
We got to talk about copying because, I mean, we didn't invent this, we didn't invent television, but. But we've had a lot of success with it this year. You clearly innovated part of this. Thank you. Yeah, exactly. There's, like, a little bit of innovation here, and then there's been a lot of copying, and it's driven us various levels of insane.
- [81:23]
Jordi
It drives me more insane.
- [81:24]
John
It drives him more insane than it drives me. But at the same time, like, there's no law that someone's breaking if they want to just, like, you know, do exactly what we do. That's the way it works. So how. How do you stay sane when people are copying what you're doing?
- [81:40]
Evan Spiegel
Yeah, well, you know, in the early days, we had no choice but to just innovate as quickly as humanly possible because we were late to the social space. Right. And Snapchat is not social media. We literally built the business as a response to social media. So messaging, Facebook came first and Instagram came first, and Twitter came first. And we were using all these products and we were like, these are not very fun. Right? Like, this is not actually a great way to communicate with your friends. It's awesome. If you're into, like, status and building your profile and collecting followers, it's not a great way to just have fun with your friends. And so we started building Snapchat, and I think there was just really a gravitation towards a service that is actually fun to use with your real friends. But as part of that, because we're competing with such giant companies, we just had to innovate as fast as we possibly could in a category that is essentially owned by other players, essentially owned by Meta. And I think part of that is understanding that one of the most important things you can do in that position is go and build a new category that's outside of the one that you're currently in. And that's what we identified with glasses 11 years ago, that we wanted to help power this massive transformation in the way that people use computing. And then that if we invested over a very long period of time in very, very difficult things and things that are incredibly challenging technically, and then built of a lot platform, as you saw, with lenses, all those different lens experiences, that those sorts of things are incredibly difficult to replicate. And so while I think app features are easy to replicate, the work that we've been doing over the last 11 years and where we're going with glasses is incredibly.
- [83:13]
Jordi
The example for us is like, people see the overlay, so they'll copy the overlay and not realize that that's not what. Overlays have existed for decades. Right. So, like you, I find oftentimes when people copy, they don't actually fully understand what they're copying. So they take an element out of it, not realizing that it's not necessarily that element that makes the other platform successful. How have you thought about partnering with different AI companies and labs? You recently announced the Perplexity Partnership, which is. Which I thought people were excited about. And then I feel like all this year, people have been, as some of the labs have added hundreds of billions of dollars of value. There's been speculation on, saw people speculating on. You could imagine Sam Altman trying to buy Snapchat because he sees your user base, and I can see a lot of reasons why there's no price that would make that appealing. But how have you thought about partnerships with different AI providers broadly?
- [84:20]
Evan Spiegel
Yeah, well, I think one of the things that's been really interesting, obviously Snapchat is so focused on messaging, and right now, the primary way people are interacting with AI is messaging. So we saw a huge opportunity to help bring more of these AI services into Snapchat, into our messaging platform. Because, as I mentioned, whether it's the foundation companies or tons of businesses have built, agents now have built chatbots, but they don't have any distribution for them. And earlier this year, we launched Sponsored Snaps, which is a killer ad product for us. It shows up in the chat inbox. Highly effective. But the vision is to transition the Sponsored Snap from being something that you just view to now something you can interact with and chat with. And so part of that was opening up the platform, starting with Perplexity with an exclusive deal with them, but then over time adding more businesses who are bringing their chatbots and their services to Snapchat.
- [85:12]
John
Can you give me a little bit more of an example of that? Like, if I'm Diet Coke and I and I want to advertise as Sponsored Snap, but then you can chat with it. And so is it more like Q and A on an faq? You could ask questions about the product, or is there something more gamified than that?
- [85:27]
Evan Spiegel
Yeah, if you think about someone like, you know, Walmart, they've spent a lot of time building out a service called Sparky. Right. That you can use to learn about products or buy products. So what they could do is send you an offer directly to your inbox, ideally highly relevant to, to something you've already been looking for at Walmart or based on how you've been engaging with Walmart, and then you can follow up, have a conversation, potentially even convert in the chat.
- [85:48]
John
Oh, and that's uniquely good in a chat app because you're used to that functionality, I suppose, as opposed to just kicking you out to some webpage where the UI is a little bit more foreign or abstract to you.
- [86:00]
Evan Spiegel
Yeah, exactly. I mean, Snapchat's one of the largest, maybe after imessage, the largest messenger, certainly bigger than WhatsApp, for example, in the United States. So I think in terms of people who are familiar with our messaging interface, that's where they go to have their conversations. Being able to have those conversations not just with your best friend, but also with agents like Sparky, I think is an interesting opportunity.
- [86:19]
John
That's very cool. There's a whole bunch of news. OpenAI Today shortened their vesting period. How do you think about aligning talent, aligning incentives for talent? This transition, now you're a public company, how do you think about whether or not a vesting cliff makes sense? We were going back and forth on it. I was saying that I'm so used to a one year clef growing up.
- [86:42]
Jordi
Coming from the private markets.
- [86:43]
John
Private markets. At the same time, there's a lot of people that show up and on day one, they're creating a lot of value. So how have you thought about incentivizing employees with stock?
- [86:52]
Evan Spiegel
Our perspective on this has really evolved over the years and we learned a ton. Actually, in the early days, we did something really different. We had a 10, 20, 30, 40 vesting schedule. So you would only vest 10% of your grant the first year, 20%, the second, 30%, 40%. And the idea, and we were in LA at the time, the idea was to really make sure if you were joining Snap, that you were joining it because you loved it, you wanted to be there for the long term. It was very popular at the time. I think it's still very popular in the Valley to kind of hop spend one year.
- [87:18]
Jordi
Yeah. Why do four years when you can build a basket of.
- [87:21]
Evan Spiegel
Exactly, yeah. And I think that can put a lot of pressure on the culture, especially in a startup where you really. I think it's so important that the team is all in on what you're building. But I think over the time, our view has just been to take as much friction out of the compensation conversation, you know, as, as possible. I think like a lot of this stuff is really, frankly, frankly, like irrelevant.
- [87:44]
Guest Creator
Right.
- [87:44]
Evan Spiegel
Like what really matters? Obviously if you look at retention and building a team, it's your, your leader. Right. The people that you're working with, obviously what you're working on, the culture, you know, and that long term orientation. So I think a lot of this compensation stuff is sort of like details and the less complicated it is and the less time you spend talking about or thinking about it, the better.
- [88:02]
John
Yeah. What about other. Just lessons from becoming a public company? We like to joke with Eric Lyman at Ramp, one of our buddies that, you know, he's maybe about to go out. What is he preparing to do? What are your recommendations for CEOs that you counsel about the process and the transition that the company goes through in the IPO process?
- [88:21]
Evan Spiegel
Just culturally, I mean, the most substantive change is that people's compensation changes on like a minute by minute basis. Right. And like that can be varied, distracting for people, especially in the early days. And when companies are newly public, there tends to be a lot of volatility.
- [88:37]
Jordi
Right.
- [88:37]
Evan Spiegel
And so I think it's just really important again to create a company culture that's not focused on that, especially if you want to build something meaningful over the long.
- [88:45]
John
I remember hearing a story about Enron putting the stock price in the elevator. So like the exact opposite of what you said, like literally orient the entire company culture around the stock price. So you come in, stock price is up, everyone's having a good day, stock price is down.
- [88:58]
Jordi
How did that, how did that work out?
- [89:00]
John
I don't think it worked out well. I don't think.
- [89:02]
Jordi
What about, what about setting? What about setting? You seem like, you know, through this conversation, you seem like very clear on your values, willing to say, like, yeah, we don't want to do VR specifically. There might be money to be made there, but we don't. We wouldn't even do it on a, on a principles basis. How do you think about kind of setting vision internally with the team and externally with shareholders? There's been so many companies this year that specifically in AI that kind of like to talk about a vision around, let's say like curing cancer. But then you look at what they're actually doing in practice and there's not always incredible. There can be like kind of a disconnect between those two things. And I feel like that, you know, it's confusing for people that are just users, spectators, shareholders and then team as well. So how do you find that kind of alignment in vision?
- [89:56]
Evan Spiegel
What a great question. So I think for us, one of the things we always remind our team is that as we look at leadership at Snap, a lot of people think about leadership in this traditional hierarchy where you have leaders and then the team we have at Snap inverted that. So if you're a leader at Snap, you're at the bottom of the pyramid in an upside down pyramid, and then you have the team that you're responsible for, and then you have our community more broadly. Right. And that includes our partners. And so that's also how we think a lot about communication. So when we're communicating to the world, when we're communicating to investors, we always try to remind our team that, like, our investors are a subset of our community. Right. And so it's really, really important that we speak in, you know, language that people actually understand. Right. And instead of talking about, you know, we can talk all day in fancy AI terms. Right. But that doesn't really matter when it comes to communicating to your customer and the customer experience that they're having. And in fact, sometimes it can be more confusing. So I think as long as we put everything through that lens of putting our community first and foremost and then communicating, making sure that we're always talking to our community first, even if it's some investor update or something like that.
- [91:01]
John
Yeah, yeah, yeah. That's interesting. Do you have any book recommendations? Did you read any good books this year?
- [91:09]
Evan Spiegel
Oh, my gosh.
- [91:10]
John
Christmas gifts for people.
- [91:11]
Evan Spiegel
What's there? I'm like, I know it's a really wild question. What's highly relevant? I think for. For this form, there's like a. There's a great book that I read on. I'll have to find the name for you. But it's something about like, you know, it's very academic, but it's sort of like the economic impacts of technological disruption.
- [91:28]
John
Sure.
- [91:28]
Evan Spiegel
And it really. Textbooks. Yeah. Like textbook style. But what's great is that it just shows like, you know, from the railroads to semiconductors, et cetera, like the patterns that emerged, these sorts of large technological. And I think it's so important because I think we just need to be reminding folks that, like, these sorts of changes have happened before. There's actually quite a consistent rhyme and reason to what happens. And that means that all of us should be able to kind of think ahead and manage ahead, you know, through some of the consequences of, I think what's going to happen through, you know, what will be quite A disruptive period of time.
- [92:03]
John
Do you think, do you think it's underrated that AI can potentially really help with moderation on big platforms, like scale platforms, where for the first time you might be able to effectively review every message that's going everywhere? Or is that a negative thing? Is that a positive thing? We were just talking to Dave Buzzucki at Roblox and obviously the potential of screening every message seems like a really great opportunity for him. And I'm just wondering if there's so many opportunities, but also, like, risks with this stuff. Like, how have you processed this idea of like, AI as a moderation tool sort of under the hood?
- [92:45]
Evan Spiegel
So. So first of all, I do think AI moderation is already, like, very widespread. Like, I think that's already best practice. I think virtually everyone's already doing that, at least, obviously we're, we've embraced that at snap. I think it's very important. And I also think it's a really powerful tool again, for customers if they want to fact check something even if their friend told them.
- [93:04]
Colin
Right.
- [93:04]
Evan Spiegel
The ability to fact check using AI today is pretty compelling compared to what it was in the past. So when people are talking about concerns about misinformation and this sort of thing, I think AI is a pretty powerful counterbalance to that. What I'm more interested in, though, is the use of sequence models to find bad actors and to stop them before something bad happens. So that, to me, is what I think the frontier of, like, Internet safety is currently. It's certainly an area of research for us and something that we're really excited about because we have a lot of information about what bad actors try to do on our platform. We catch a lot of them.
- [93:38]
Scott Kapoor
Right.
- [93:38]
Evan Spiegel
But with almost a billion people, it's hard to catch all of them. But we're trying. But what's really interesting is we can train sequence models based on those patterns. What sequence of events are bad actors engaging in? How are they using the platform so that we can predict when someone is about to do something that is against our terms? And so to me, I think that's a lot of, like, the paradigm that we're going to see in Internet safety over the next couple years. I think right now there's a big focus on features and trying to tease apart what sort of different features different platforms have. I think there's just going to be a massive shift to being able to identify bad actors even before bad things happen using tools like sequence models.
- [94:14]
John
Yeah, yeah. Are you seeing like, the level of like, bot activity or at least people trying stuff increasing. We've been talking to a lot of, like, cybersecurity folks, and it feels like they, you know, all the bad guys on the Internet, all the black hat hackers have more tools, but then also the white hat hackers have more tools. And so it's sort of like a cold war. But I'm wondering if, like, do you feel like you're spending more time, just more headaches focused on, you know, defending against, like, endless bot armies, or has that just been like a drone throughout the entire process, the entire career?
- [94:51]
Evan Spiegel
I think for us, like, if you look at cybersecurity, some of the, like, most significant threats are actually, you know, are human vulnerabilities.
- [95:01]
John
Sure.
- [95:01]
Evan Spiegel
And I think that's where I actually is, is almost the most dangerous. Because today, right. Our team members can get phone calls from Evan.
- [95:10]
Colin
Yep.
- [95:11]
Evan Spiegel
Hey, I really need your help. I got to investigate this thing.
- [95:13]
Jordi
Hey, I need 200 bucks.
- [95:14]
Evan Spiegel
Wire me 200 bucks or buy some gift cards really quickly for this creator event we're doing. Right. Like, and I think the ability for bad actors to use AI to exploit our human vulnerabilities is something that we really worry about and think a lot about.
- [95:28]
John
I mean, there were so many times when the phishing email was clockable just by bad grammar or spelling mistakes. And it was like, that was enough of a tell and one pass through any LLM and you get rid of all of those.
- [95:42]
Evan Spiegel
I think another thing that's going to become increasingly important, important as we look at cybersecurity is the interconnectedness of all of these services. Right. Like, a lot of companies today, especially young companies who aren't investing a ton in cybersecurity, are using a huge number of vendors. And what's really interesting is, you know, today compromising a vendor and then using that vendor to compromise the. You know, that's the sort of stuff that's really concerning, especially with phishing. Right. So we saw an interesting one recently where one of our vendors was compromised. I received an email that looked like it was from the vendor. Right. But it was actually a phishing email. And it's again, very hard to tease apart. So I think the interconnectedness in terms of cybersecurity is something that folks just don't talk about as much as maybe we need to.
- [96:27]
Jordi
We joked about some news organization acquiring paperless posts and then just understanding where all the different people going to events. I do have one kind of more broad question, and then I know you gotta jump, but Snapchat, I think of as like, country scale or it's the size of a nation state. You're basically the governor of a. Basically the governor of a state or a country. And California specifically has gone through a really wild year. You grew up in the Palisades. I'm wondering if you were. If you were, like, what would you do? Like, how do you kind of, like, how do you feel California is today as a state, Even Southern California more specifically? I think, you know, we. I live in Malibu and John lives in Pasadena. We weren't affected by the fires, but there was this, like, extreme frustration during that moment because it felt like in many ways, the government had had kind of failed the citizens. So I'm curious if there's anything that. Like how you're thinking about the future of the state and how we can make positive change.
- [97:39]
Evan Spiegel
Okay, well, we could spend another hour on this. So I love California so much. Obviously, I was born and raised here. I think it's an incredible state and it's so important to the future of U.S. competitiveness. Right. So I think people talk a lot about the competition between us and China. I don't think people talk enough about the competition between China and California.
- [97:56]
Colin
Right.
- [97:56]
Evan Spiegel
Which is a really, really interesting relationship because both China and California are deeply interconnected at the same time that we're competing a ton. So I think California is just unbelievably important to the future trajectory of the United States. I think if you look at California today, I mean, you know, you obviously know all the stats, but, like, highest unemployment rate, highest poverty rate, most homelessness.
- [98:16]
Jordi
Housing, housing crisis, massive housing crisis, people moving, saying, I'm moving to Austin for quality of life. I love Texas. Texas is amazing. But it can be like. Well, it can be like, I mean, it's very cold in the winter. It's very hot in the summer. If you're moving somewhere like that for quality of life, it just means that housing is. I mean, housing affordability is like, top of mind for a huge percentage of people. And of course, here that's, you know, most elevated.
- [98:45]
Evan Spiegel
Yeah. I think the affordability crisis here is. Is incredibly concerning. I think one of the things, if we look historically at the way that our government has operated, we tend to fall in this pattern, it seems like, of very heavily regulating our industries, which, by the way, to some degree is important. One of the reasons why we love California, it's beautiful, it's clean, all these sorts of things we really love about California. But at the same time, we also then layer a ton of subsidy on top of that so you dramatically restrict supply with very, very heavy regulation. And then, you know, we've got a very large economy. We've got the highest. One of the highest tax rates here in California. We put a ton of subsidy into that economy after dramatically restricting supply. And as a result, in all these areas, you know, especially things like housing, I think you have massive increases in pricing. And I am optimistic in the sense that I think the legislature this year is really starting to pay attention to it. Right. There's some progress on CEQA form, for example. There's more attention being paid to, you know, how expensive is to building affordable housing here. When the government pays for affordable housing, it's about 30 or 40% more expensive than just market rate affordable housing. And so I think, you know, people are starting to pay attention to it. But another thing that's fascinating is I'm just not sure Californians are aware of how problematic things are right now, especially because our politics are so partisan. And I think if you look at the California voter base, they're saying, oh, well, at least it doesn't look like the federal government. So we're doing better here than, you know, than they're doing in D.C. so I'm okay with that totally. But so I think to me, part of the, you know, the journey over the next couple years is California is really. Californians really waking up to the fact we can do a lot better here in our state. And in fact, we've got to do a lot better. You know, the US Wants to continue to compete.
- [100:32]
Jordi
No. And I went. Growing up in the Bay Area and living in Southern California my adult life, I went through brief moment during 2020 where I started looking on Zillow outside of the state because it was like they shut down the beach. I was like, I'm living like, half a mile from the beach and I can't go there. And I made the very specific decision. I was like, no, I'm not gonna leave this. This place is too beautiful. I've had family roots here going back to the early 1900s. We need to stay, and people need to focus on making it better. It's the greatest place on earth that I've been to, and it's worth continuing to invest in and steward. And I felt like the fires were so symbolic, too, at the Palisades of, like, you know, everything burning to the ground except Rick Caruso, the guy we couldn't elect as mayor, even though I believe, you know, again, I believe he genuinely loves this city and wants to see it shine. So, anyways, can we open this present? We should.
- [101:34]
John
Because we could talk about politics for the rest of the show. What is in here?
- [101:38]
Jordi
We don't talk about. We don't talk about.
- [101:41]
John
Oh, is this an ornament for the tree?
- [101:43]
Jordi
No way.
- [101:43]
John
This is incredible.
- [101:44]
Guest Creator 2
Ooh.
- [101:45]
John
I think this is going to be a new tradition. I like this. Yeah. We. Oh, this is amazing.
- [101:51]
Jordi
There we go.
- [101:53]
John
How perfect. Thank you. This is remarkable.
- [101:58]
Jordi
2025.
- [101:59]
John
Would you mind signing this? Love collecting autographs. We love. We're building a. A museum of business.
- [102:06]
Jordi
And then.
- [102:08]
John
But I think you got a chance to hang out.
- [102:10]
Jordi
We're putting. We got to put that up at the very top. For sure. So. For sure. So.
- [102:14]
John
Thank you.
- [102:15]
Evan Spiegel
My pleasure.
- [102:16]
John
Fantastic. We'll let. That looks fantastic.
- [102:19]
Colin
Yeah.
- [102:19]
John
Congratulations.
- [102:20]
Evan Spiegel
Thanks so much for having me.
- [102:20]
John
One.
- [102:21]
Colin
One.
- [102:21]
John
Almost one billion global snapchatters. Can we have you hit the gong?
- [102:24]
Jordi
You got to hit the gong.
- [102:26]
John
If you come to the. If you come to the Ultra Dome, please pick up this mallet here.
- [102:32]
Jordi
Hit it as hard as you want.
- [102:34]
Evan Spiegel
Glad you labeled it too.
- [102:36]
Jordi
Just in case.
- [102:37]
John
That's our interview. In case you. Thank you so much.
- [102:50]
Jordi
Fantastic.
- [102:51]
Evan Spiegel
Than hanging.
- [102:52]
John
Love to have you back on.
- [102:52]
Evan Spiegel
Thank you.
- [102:53]
Jordi
Anytime.
- [102:54]
John
I really love the ornaments. I didn't even realize that that would be something that could happen given that we have a tree. Like this is going to be a thing now. We're going to grow an ornament collection as merch. It's amazing. I love it. Well, that was a fantastic conversation. Thank you for everyone for listening. And let me tell you about Vanta Automate Compliance and Security AI that powers everything from evidence collection and continuous monitoring to security reviews and vendor risk. There is some Oracle news. What else is going on? I've just pulled up this hilarious video of Oracle pivoting to AI. I don't know if we should flip back to this. We have RJ from Rivian coming on.
- [103:39]
Jordi
Just play this video while we wait for RJ to join.
- [103:43]
John
This is perfectly on brand.
- [103:45]
Jordi
I put this in there for you, John.
- [103:47]
John
So the news here is that Oracle. Oracle bondholders now sit on 9% of unrealized losses on 18 billion of debt.
- [103:54]
Jordi
Okay, well, don't focus on that, John. Focus on this video. Matt Turk says Oracle after pivoted.
- [103:59]
John
After pivoting to AI 80 years young. This guy looks great.
- [104:03]
Jordi
This makes me want to own the stock because this really does feel extremely bullish. This really does feel like the current state of Oracle.
- [104:10]
John
I mean, Larry Ellison looks fantastic. He's been on a tear. And this is.
- [104:16]
Colin
This is.
- [104:16]
Jordi
This is this is your future, John. After we're gonna. We'll probably retire somewhere around 70. So we got. We got a good. We got a good run ahead of us still. But then you're gonna go and go back and. And hire an elite team and really make a run at the. At the Arnold Classic. Yeah, in the. In the. In the vintage division.
- [104:36]
John
Yeah. Well, let's head over to Keller Clifton and Andrew Cote. Keller says next gen infra. And the drone tower is really remarkable. Like, what is that? 4, 8, 12 drones in one tower, all charging. These are, of course, the zipline drones that deliver everything from Chipotle burritos to, I think, blood transfusions and all sorts of stuff, saving lives. And Andrew Cote says we are not mentally prepared for just how cheap everything is about to become as robotics of all kinds explode into the market. And Elon chimed in. He says harnessing even a millionth of the sun's energy would make every human a billionaire in purchasing power.
- [105:24]
Colin
Wow.
- [105:25]
Jordi
I'm not sure deadmau5 concerts are going to get any cheaper, given that some of these robotics companies are hiring in order for their.
- [105:35]
John
Keller is locked in. Keller. Keller is locked in.
- [105:37]
Jordi
He's not hiring deadmau5.
- [105:39]
John
Yeah, maybe we should see. I mean, we don't know that he didn't. It's possible he did.
- [105:44]
Jordi
It's possible. Anything's possible.
- [105:47]
John
Anyway, FIN AI, the number one AI agent for customer service. Automate the most complex customer service queries for every channel.
- [105:57]
Jordi
Joe Longsale, older friend I admire. I'm having a real. I'm having real liquidity trouble, me. You own over 45 million of shares in a private company. X. I started. You backed us early. Take 10 million off. Not sure. I don't like to sell stuff, me. Okay. FYI, it's QSPs. I'll think about it.
- [106:16]
John
Yeah. In the chat, Ryan asks, are we going to cover Roomba? Somewhere in the chat, did you hear the news about Roomba finally filed for bankruptcy? Very upsetting because of course they were going to sell to.
- [106:32]
Jordi
Chinese companies are buying up the assets at auction.
- [106:35]
John
I'm sure it does seem like they are. I don't know. Is GoPro in the same bucket? I don't know. How's GoPro doing these days? But yeah, Roomba. So GoPro is down to 150 million. Market cap up, of course, it was in the billions at one point. And Roomba, you know, you just get really heavy competition from international players. It compounds and compounds and eventually there's nothing to do. But ideally, Hang out with the good folks over at Amazon, but that was of course blocked. And so they had to go their own way. And their own way led to doom, unfortunately. But fortunately we have an American company that's bringing it back. This is not an intro to rj. This is an intro to Matic, the Roomba competitor or new company that came on the show. And you have one at home. You have the Phoenix rising from the ashes.
- [107:42]
Jordi
Okay, you want to know why you.
- [107:43]
John
Have the reincarnation of.
- [107:44]
Jordi
You want to know why I believe Matic is really going to go all the way? Why is because my children, specifically my one year old is constantly messing with it and it still works.
- [107:57]
John
Really? That's impressive.
- [107:58]
Jordi
My one year old is just constantly sitting on it, moving it, taking it apart, putting it back together and not in a very any type of more specific way. She's just kind of messing with it and it still works. It still runs every day. I don't some of these things. A device like that, the concern is always okay, it works. But do I have to spend a bunch of time thinking about it and kind of like managing this new robot and then at that point should I just have a vacuum and just use that? This thing has just been running perpetually on a schedule, reliably. I've had it running for at least six months now and it's really fantastic.
- [108:45]
John
I have an idea. Okay, so you turn your kids loose on Julius AI. We see if that still works. Once your kids have gone crazy all over the AI data analyst that works for you, join millions who use Julius to connect their data, ask questions and get insights in seconds. If it holds up, you know, I think it's a good sign. I think it's built for.
- [109:08]
Jordi
Goldrock says I won Radio Shacks innovation of the month in like 2009 for making an Arduino Roomba. That is cool.
- [109:16]
John
Early, I was hanging out with some, some mutual friends of my kids last night, some parents and you know what they had in the driveway?
- [109:26]
Jordi
Did you just call the parents of your kids mutual friends?
- [109:29]
John
Sorry.
- [109:30]
Jordi
No, I think it's fine.
- [109:32]
Colin
Parents.
- [109:33]
John
What do you say? Play date? I went on a play date. Okay, shoot me. I went on a play date and the parents of my kids friends. Yeah, the parents of my kids friends. They had a Rivian R1S in the driveway and they're very happy with it. And I'm very happy that we get to talk to RJ from Rivian here in the studio. Welcome to the show.
- [109:55]
Jordi
Welcome to the show.
- [109:56]
John
How are you doing? Thanks so much for taking the time to come chat with us today.
- [110:01]
Jordi
It's great to have you.
- [110:03]
Colin
Yeah, nice to be on.
- [110:04]
John
Yeah, I would love to, I mean first set the table on, you know, like how the year went, where the business is. And then of course I want to go into the new chip and just self driving broadly. But how are you describing the scale of Rivian at this point in time?
- [110:26]
Colin
Well, I mean we've launched, as you just referenced, we launched a set of flagship products. We have an R1S which is the best selling premium SUV in the US and then electric SUV in the US and then we have a truck, R1T and make commercial vehicles. But we haven't launched our mass market product yet which is coming in the form of what we call R2.
- [110:45]
John
R2.
- [110:46]
Colin
And so that will dramatically expand the scale of the business. And I think a lot of the, in some ways challenge we've had is we're investing to be a very large business. So investing in vertically integrated technology to enable us to be a, you know, multimillion vehicle year business. And the technology investment has to happen before the products come. And so we have, you know, huge fixed costs to develop all this tech, whether it's, you referenced it already, whether it's in house silicon or all of our compute platforms, our operating system, you know, of course all the high voltage work. But that all comes together really nicely with the launch of R2, which is what really gives us this scale to.
- [111:30]
John
Support all this R and D. Let's start with R1T. Electric truck felt very contrarian. It feels still a little contrarian. Truck buyers, not to generalize, but it's a very much like I like my truck reliable with gas. I don't like this new thing. Did it seem like a risk to you at the time when you said, okay, we're going to do the truck first, we're going to do that so early. What, what gave you confidence that it would deliver and you could actually win that market over?
- [112:07]
Colin
You mean the truck? The truck market specifically is such a, it's such a large market and it's, and I think we often think of it as like one singular type of buyer which is like the person who's loading up 2,000 pounds of concrete in the back.
- [112:20]
John
Yep.
- [112:21]
Colin
Vast majority of trucks used in the United States are actually used more like cars. So they're, you know, they're used as a daily driver. The, the, the bed is used more for lifestyle activities. So you know, put a dirt bike in the back or got it, you Know, kids, toys in the back, that kind of thing. And so we said we're not as a company trying to address the contractor use case. So if you're, if you want to load concrete and cement blocks in the back of the truck, this is probably not the vehicle you want to do it in. It could do that it's capable of, but that's not the brand aspiration and it was one of the reasons. We also made it really clear that we had both the truck and then the sibling vehicle, the suv. And there's so much shared content between the two. But the other thing we wanted to do is just eliminate any questions of whether or not it was capable. You know, you'll laugh, but in 20, I guess 2019, I would get questions like, well, what if it gets wet? Can it drive through deep puddles? And like. So it's just like a very, very low level of understanding, I'd say, generally around electric electrification, what that can do in terms of off road and capabilities. And so with R1, we made it really capable. So it's, you know, it can go extreme rock crawling. It can go drive through three feet of water. It can, you know, it can accelerate faster than, you know, most hypercars. So our, our current quad does 0 to 60 in like and a half seconds. It's sort of unnecessarily silly in terms of its capabilities, but it's a flagship product, so it's there to make a statement. It's there for building the brand.
- [113:50]
John
Yeah. On the SUV side, have you been surprised by how much Runway you've had in that market for full size SUVs? Because it feels like a lot of people went after trucks very quickly, but the fast followers haven't really come after the R1s and from. I mean, I grew up in a family with a Ford Explorer and I've always been full size.
- [114:19]
Jordi
Yeah, it feels like one of those things that in 20 years people will look back at this window of time that Rivian had to just dominate that full size SUV category and feel like this was the biggest possible blessing that you guys couldn't necessarily plan for. But it kind of worked out nicely.
- [114:39]
Colin
Yeah, I mean, it's to your point. I mean, in the space of electric vehicles priced over $70,000, these are all depending on how you draw the boundary background. Where we look at it, we have about 35% market share. And so it's the best selling electric premium SUV in the United States by a significant degree, significantly outselling something like a Model X, which is also in that same category. But interestingly, in the state of California, it's the best selling premium suv, electric or non electric, really? For those that are spending time in California, if you're driving around the Bay Area, SoCal. Yeah, they're just everywhere. Our hope is that with R2, it's a price point that starts at 45. It captures a lot of the magic and the essence that's in R1, but at a much lower price point. So if we can have even a fraction of the market share that we have with R1, with R2, yeah, we'll be very, very, very happy.
- [115:34]
John
Where did the headlight design come from? When I first saw it, I was like, it looks like cartoon eyes. It was not for me. And now it's completely grown on me and it's just completely been like, oh, that's just like it's become not only like, I think of it as cool, I don't think of it as like cartoony or childish, but also it's simultaneously become iconic. Because I see it from a mile away and I'm like, oh, that Rivian. And I feel like that's exactly what you. How you wanted it to play out. But what was the thinking with that? Because it does feel bold and different.
- [116:07]
Colin
Yeah, definitely. And, you know, getting to something that starts to feel iconic, it's always hard because you can't design something and it immediately becomes iconic. So I think it has to start with a really strong point of view and a strong conviction around a certain direction. So in the case of the front end, I mean, in 2018, 2019, no one knew what a Rivian looked like. We didn't know what a Rivian looked like. So we were figuring out. So there's lots of different faces of the vehicle. And one of the things we arrived at was the realization we wanted it to look technically capable, but also friendly. And so often if you go friendly, it starts to look like nice but not tough. And so we wanted nice but still tough. So it was a really hard balance.
- [116:51]
John
The original waymos from Google were like a little bit too nice and they're like these goofy things and then they finally. Yeah, but, yeah, continue.
- [116:59]
Colin
So it was like, it was a lot of iteration and one of the. I grew up a car enthusiast and so I've always been drawn to cars that now we would consider be iconic. But if you look at the history of those cars, often in the beginning they're made fun of. And so, you know, if you look at the Volkswagen Beetle as an example, that was thought of as heck, even Volkswagen called it ugly. They leaned into it.
- [117:21]
Jordi
Well, even on the. On the other end of the spectrum, the F40 was controversial.
- [117:26]
John
Yeah.
- [117:27]
Jordi
And now it's obviously, you know, a car that a lot of.
- [117:30]
John
Yeah. I mean, a lot of supercars start out, like, kind of mocked, and then we're not being daring enough or something. Yeah, yeah.
- [117:36]
Colin
So we wanted to push the boundaries, but we also wanted it to use really clean forms. And the benefit of a clean form, like, you know, like primitive shapes. In this case, like half circles with, you know, like a stadium. It doesn't age, it doesn't. You know, it's a form that has been around for ages. And so it feels very timeless. And the way we integrated it very seamlessly, the hope was, is that it would become something that's very recognizable. You see, down the road, you say it's a Rivian, and then that it could scale to different sized vehicles, different vehicle segments. So, yeah, there's still people that don't love it, but I'd say the vast majority of people who have been around it start. Have you've liked it from the beginning or as you just described, have grown to really like it.
- [118:20]
John
I want to talk about R2, but first I want to ask you about R0. Are we going bigger? I mean, if the numbers go. When the numbers go up, the vehicles get smaller, what do I have to do to get something that competes with like a Cadillac Escalade ESV out of you? Because I have a big family, I have two huge dogs, and I want the absolute monster land yacht. And I'm just. My serious question is, is there something about the physics of electric vehicles where it gets harder to make something that's really, really long or huge or big, or is it more just like. That's more of a niche thing. And maybe you'll get to it or the market will get to it eventually, but it's not the highest priority right now.
- [119:02]
Colin
Yeah, yeah. Well, I love this question because we as a company have so many different ideas. And so you can imagine there's 50 different concepts or ideas we might have for a vehicle. We have to pick a few things to do. And so when you then look at the electrified space and you say, what's going to sell at volume for a flagship product? We started with something that was larger, but as we move into mass market, the size of the market that exists for these very, very large vehicles, things that are bigger than R1 is, is very, very small. So there's not a lot of customers, you know, it's like maybe 10,000 units a year if that. And then you look at just the biggest segment by far is a two row five passenger suv. And I'd say there's probably like one highly compelling Choice today under $50,000, hence the Tesla Model Y. So it's like wildly underserved. You imagine there's 300 different choices in the combustion world and you've got like maybe one. There's many choices, but there's one that's highly compelling.
- [120:04]
Jordi
Which how molded? Like how people wake up every day and they tell themselves they're buying the car that they want, but in reality there's like a regulatory environment that forces manufacturers to make certain decisions and trade offs and push different vehicles.
- [120:25]
John
Don't want seat belts in your car, right?
- [120:28]
Jordi
No inside joke. But with the new CAFE CAFE regulations going away, people are talking about America being flooded with these mini trucks. I'm not convinced that there's actually that many buyers of those vehicles in the U.S. maybe there is, maybe there isn't. But how much do you feel like the popularity of different vehicles is really just downstream of choices that manufacturers have had to make because of for various regulatory reasons?
- [121:04]
Colin
Boy, we have this discussion all the time. The causality of demand is interesting because you don't have an infinite set of choices. So therefore demand starts to look like what supply looks like. And we see this, we believe this is going to happen with R2 where there's very few choices in. I'll take, let's talk about it in detail. So Tesla launch Model Y, very, very successful. It's a, it's a non traditional form factor in terms of a midsize suv. It's more, it's very car like. Yeah, that has its advantages. But you've found a lot of people that are coming out of more traditional SUV form factors into that, but they don't have another choice. And so what we saw happen is a bunch of other manufacturers create their own version of a Tesla Model Y. So the form factor is very similar to a Model Y. You know, if you look at the side view of it and draw a line over the profile of it, it looks, you know, it's a Model Y. It's like different OEMS versions of that. Which was actually the wrong conclusion to draw because you didn't provide customers with better diversity of choice, but rather you gave them a less good version of a Tesla Model Y. If you want a Model Y, buy the Model Y, not some other company's version of it. And so we were very Clear on the need to have a very different point of view and not fall into that trap of thinking everyone is going to want that exact vehicle form factor and profile package. And so I think that that happens all the time in automotive and it's sort of shocking. But if you were to think about, take like the sedan space, you have the BMW 3 series, the Mercedes C class, the Audi A4, they're all like dimensionally very, very similar. And then you have, you know, the BMW 5 Series and the Mercedes E Class and the Audi A6. And so you have like these interesting segments that are like, very much because of this, like, hard to trace causality. You just have a lot of people building very similar things with different fronts, different rears, maybe slightly different surfacing. But the specs of the vehicle are highly aligned. And so I think there is an opportunity with electrification to reset some of those expectations and to reset segments, sizes, performance characteristics, some of the attributes. One of the things we worked on really hard in R2 was the rear seat, like comfort or space is completely unlike anything else in a segment. So it's a lot of space. And then you look at all the cars in space and they're all like within 15 to 25 millimeters of each other for rear seat legroom. And you're like, why is, why are there 30 cars that have almost identical rear seat configurations?
- [123:49]
Jordi
Well, yeah, when the, when the team sees something like that, or are they like, are we missing some sort of like regulation that like requires like you ever. And then, and then you kind of trying to figure out, wait, do we actually have flexibility? You know, I always, you end up wondering, like, are we missing something? And then you realize, well, the mechanical.
- [124:08]
Colin
Nature of a car means that everybody can buy everybody's products. So every company, like Rivians, are owned by every car company and they take them apart and they own all the other, you know, all the other things they're competing against. And so as a result, a lot of like the mechanical innovations, let's say welding techniques or casting techniques, they sort of very quickly become state of the art. But the downside of that ability to buy each other's products and so easily observe them is you do have this funneling towards like consensus around different segments. And so we sort of lose some of the uniqueness between the different vehicles. And see, like, for car enthusiasts, you find a lot of times car enthusiasts will say, cars today, they all look the same, they all feel the same. And so we try hard to change that. But there are certain expectations. I'll give you a really good example. On our R1T, we did a ton of research, and we looked at what people put into the bed of the vehicle. And if you're using it for lifestyle, you want to be able to fit it in your garage. And if you're putting anything other than a motorcycle, which, in which case. Or dirt bike, where you'd have the tailgate down, the bed length doesn't need to be longer than four and a half feet. Just doesn't. There's nothing that goes in that requires. Unless you're doing, like, construction and you need to put some place. And so we made the bed shorter with this articulating tailgate that goosenecks out, so it gives you. It's actually longer with the tailgate down. So it fits a really long motorcycle. But when it's up, everything fits in the. You know, it fits in the garage more easily. And so we look at most. If you drive through a neighborhood, you know how you know who has a truck in your neighborhood? It's because it's parked in the driveway. Most trucks don't. In the garage.
- [125:53]
Jordi
Yep.
- [125:54]
Colin
And so we wanted to fit in 95% of the garage in the United States. So we went through all this thought process. We built it, and the standard size is 5 foot. And the amount of times I've been asked, why didn't you make the bed five feet long? I said, well, of course we could have. It was just a decision. We made the decision. We wanted the truck to more easily fit in a garage. So those are like, you sort of sometimes if you break the mold of, like, what's expected for dimensions, because customers, media, car journalists are so trained on a certain size.
- [126:20]
John
Sure.
- [126:21]
Colin
The battle may not be worth it.
- [126:22]
John
Yeah. And also there's like, there's the decision to purchase a car, and you might just be looking at specs, and you're like, five is better than four and a half. But then you live with a car for four years, and you're like, oh, well, this is actually way better. I never needed that extra half foot. Yeah.
- [126:37]
Jordi
Where do you think Chinese EVs are? Overhyped or under hyped?
- [126:43]
John
No. Give us a white pill.
- [126:46]
Jordi
So recently there's been a lot of excitement around them. And fortunately, we're not letting them flood our country with them. But we had a guest on the show recently that had said he was in China a few weeks ago, and there was one of the. I forget which manufacturer, but one of them were just caught, like, side of the road burning on fire. He felt like they were potentially overhyped because they do have some features that are kind of scroll stopping. I'm thinking of the one that can.
- [127:13]
John
Jump the Yongwang U9.
- [127:16]
Jordi
Yeah. But given that every manufacturer's free to assemble, I mean, disassemble any other vehicle and learn from it, what do you think American manufacturers can learn from what they're doing?
- [127:30]
Colin
Yeah, I do think it's important to sort of pull the, pull the curtain back on what sometimes I think gets presented as if it's magic, particularly on cost. So I think there's two things to take away from the Chinese electric vehicle space. First, there's over 100 different brands and manufacturers in China and there's only a small fraction of those that I would consider to be in the category. What I'm going to talk about leading in technology and having really robust architectures. But the two things with that said. So if you say there's more than five, less than 10 manufacturers that fall into the categories I'm about to describe, you have an interesting phenomena where a lot of these newer companies in China, for the same reasons that Rivian or Tesla have very different software architectures, electronics architectures and incumbent OEMs is they started with a clean sheet. And when you start with a clean sheet, you would very quickly arrive at a completely different technology topology than what evolved into cars over the last 50 or 60 years. And what I mean by that is prior to like 19, early 1960s, cars were 100% analog. So there are no computers in a car. And the first computer to make its way into a car was ironically was for the fuel injection system. And so for any of the car enthusiasts out there, this is like those original, like Bosch K Tronic fuel injection systems that we started to see emerge 1960s and early 70s and car companies at the time said, boy, we build engines, we design vehicle bodies, we assemble the cars, we don't need to make these little electronic modules. And so they pushed that work to suppliers. Companies like Bosch or Continental would make these little computers that would run the fuel injection system. Then subsequent to that, over the current of the last 50 years, a bunch of other things started to have a need for computers. And your seats suddenly became smart and there was a computer that went with the seat, your air conditioning became intelligent, there was a computer that went that your sunroof had a computer. Before you knew it, the vehicle architecture was this proliferation of, you know, in some cars, 100 to 150 little mini, what we call electronic control units or computers that run These specific domains like the domain of an engine or the domain of a door or the domain of a seat. And it's precisely the opposite of what you would architect. If you were thinking about it as a clean sheet, you would never say, I'm going to build a network architecture and software platform. Platform. There's 150 different software code bases running. 150 different little mini computers which communicate through this sort of klutzy can architecture.
- [130:13]
Jordi
That might all be need to be independently updated at various points in the car's life cycle.
- [130:19]
Colin
It's just like it's a total disaster. So what you'd say is I'd have as few computers as possible doing as much as they can. And so the fancy way we describe that now is it's a zonal architecture, it's like computer that controls a whole zone. And so Tesla of course developed their architecture like that. We of course developed our architecture like that and a couple of the Chinese did as well. And this, the real benefit of this, besides just taking a lot of cost and complexity out, is that you can make updates really easily. And so if I want to change, let's say the sequence of events that occur when you unlock the car, I don't have to coordinate amongst 15 different suppliers. The supplier for the horn ECU, the supplier for the door lock ECU, the supplier for the, you know, the interior lighting issue. I can do all of that in like a matter of minutes internally because it's running on our own software platform and it's all of our own code. And so just the emergence of regular updates, improved features, features that respond to dynamic customer needs I think is a really big shift. And in the west there's two companies that have that, Rivian and Tesla. And then in China there's, as I said, more than five, less than 10 companies that have that. And if you don't do a software defined architecture well, the ability to do like AI integrated into the vehicle or an AI defined vehicle is enormously hard. So you have to have all these ingredients to be able to do like the broader architecture. Well anyway, so that's one big difference and that actually underpins we did a $5.8 billion software licensing deal with Volkswagen that that technology I just described for network architecture, software OS is what we license as part of a big partnership with Volkswagen Group. But the other is that the Chinese companies have just fundamentally lower cost structure. They have much lower labor costs, their cost of capital is often free or more than free, meaning they get paid to build a plant or they get enormous government subsidies. And so you can just build a spreadsheet to look at this. It's not magic. They're building the cars. They're not using some new type of material from outer space. It's using very consistent materials. What we use in the United States, consistent joining and performing techniques. And they're putting the cars together very similar. They just have labor costs and capital costs are much, much lower than the United States.
- [132:38]
John
If you had to pick a gimmick that you do, like, what's your favorite gimmick? Because the jumping car is a pretty good one. I showed that to my 4 year old and he was like, I need to, I need.
- [132:48]
Jordi
I don't think, I don't think it's good unless. Unless they're jumping a humano where they jump a human. Otherwise just a cheap trick. Yeah, I don't need to jump. I don't need to jump a paperclip.
- [132:59]
John
Okay. Yeah. Or a pothole. Hey, you do need to jump a pothole. You got a, you got a flat tire. You blew out a tire this weekend. Anyway, favorite gimmick, if, like, if you had to pick one, what do you like? You know, there's like, there's a tank turn, there's, you know, a whole bunch of these different gimmicks. Is there, are there any gimmicks that you think are fun or maybe retro gimmick?
- [133:21]
Colin
Yeah, I don't know. I mean they're just fun to watch. I don't know if I. We haven't, again, we haven't decided to put any of them in there. But in vehicles, we do have something called kick steer in our vehicles, which when you're off roading, because we have a quad motor, you can turn the vehicle on its axis.
- [133:36]
John
That's good.
- [133:36]
Colin
Yeah, sort of cool. But yeah, I mean even to some.
- [133:42]
John
Degree like stood out. It was like the gear tunnel when that launched, that was definitely like a, like, oh, this is different than normal. This is not something I normally. And I feel like there's a balance. Like you don't want to be all gimmick all the time, but you need a little bit of style and a little bit of substance. You need some.
- [133:58]
Jordi
We got to talk about, please. We clearly needed an hour, 90 minutes.
- [134:03]
John
I know, I know. I don't know if you want to.
- [134:04]
Jordi
We gotta talk about some of your guys new releases, the chip and some of the new technical decisions that you guys are making around self driving.
- [134:13]
Colin
Sure, yeah, sure. Yeah. So last week we actually finally announced it. Amazingly it didn't leak. We've been working on this since 2020, early 2022. But we, we've re architected our whole self driving platform around we call an end to end train model. So the model is using the millions and millions of miles are being accumulated through our deployed fleet of our Gen 2 vehicles which launched a little more than a year ago to build effectively a neural net or a foundation model for how to drive. And on our Gen 2 hardware stack it's using an Nvidia platform. It's got around 200 tops of compute, we've got 55 megapixels of cameras, a nice array of radars. But it's a great platform for building a data flywheel and for delivering ultimately this will be able to deliver point to point autonomy. So you can put the address in the vehicle drive there. But to get to higher levels of autonomy, we've developed an in house processor. Look at the timing, you guys did that perfectly. But the in house processor is a, it's a significant step up. So it's a 800 tops. It's got 35 billion transistors on the silicon, the neural nets capable of processing 5 billion pixels per second. So this is like an incredibly powerful platform and we brought it in house just to given the importance of vision. This is a vision based robot the vehicle. But we have other things we're doing in the vision based robotics space as well. And so we came to the view that having our own inference was going to be really valuable. But it took the better part of almost four years to build the team develop it. These are things that take a tremendous amount of capital. We're working with TSMC on making it. But yes, we're excited about that. And then we also include upgraded cameras and we have a new lidar which is another sensing modality that sits at the top of the windshield, which will help us raise the capability of the vehicle ultimately to what we call level four, which is think of it as the vehicle can operate empty or without anybody in the driver's seat. So it could pick your kids up from school or drop you at the airport, these kinds of things.
- [136:25]
John
Is lidar dangerous? I was telling Jordy that there was a lidar system that if you pointed your phone at it, it would damage the phone. And of course he said, well if it's damaging the phone can't be good for your eyes. How do you tell customers that, okay, our lidar is safe? What are the, the parameters to optimize around?
- [136:47]
Colin
Yeah, I mean that was a Poorly designed LIDAR system that was doing that. Our LIDAR is they don't burn out your phones and they certainly don't burn out your eyes.
- [136:57]
John
Yeah. Okay.
- [136:58]
Colin
As you're. Boy, this is great. You're showing the image here. So the beauty of something a lot of LIDAR is we can use the LIDAR and the radar array to help train our cameras. Because again, this is a. Think of this as we're building a brain. We're building a neural net on driving the vehicle. And it has the ability to see very, very far distances, much further than the human eye or a camera could see, but also see in perfectly dark conditions or perfectly bright conditions.
- [137:25]
Jordi
So and it, I imagine it helps with weather, like extreme weather as well.
- [137:31]
Colin
Yeah, well, the radar does particularly well where you have optical occlusion. Yeah. Like heavy fog or heavy rain or snow.
- [137:39]
John
Sure.
- [137:40]
Colin
And then the LIDAR does need line of sight because it is a laser. So the LIDAR is very helpful for training the cameras and training the radar system, but it's also very helpful for long range.
- [137:55]
John
So I mean it seems like you've solved the inference problem. Like you're like the vehicle is ready to rock. Are you worried about or is it a challenge to accumulate enough data, are you getting enough data off the current fleet that you feel like you're competitive there? Are you GPU rich or GPU poor in the, in the training phase? Are there, Is it, is it about the algorithms? Like do you need more AI researchers? Like what is the most, what is the rate limiting factor to actually delivering like something really top notch?
- [138:31]
Colin
Yeah. So I mean the first is building this, when you say data Flywheel. Yeah, every vehicle that we, every Gen 2. So we launched in end of 2021 and that was what we call our Gen 1 vehicle. In the summer of 2024, we updated it with a complete new set of hardware under the skin, but really most importantly changed the self driving platform. And that's the beginning of this data accumulation platform. And what this is being used for is there's a whole host of trigger events that we identify interesting or, or important information from the vehicles driving that gets back up through the cloud and then we process them, as you said, on a large, you know, a large pool of GPUs. And yeah, this is, you know, we're talking like Many thousands of GPUs, you know, enormous amount of investment in GPU spend here. But, but ultimately that's being used to train the model. And so we create this very large model that runs offline and Then we distill it into something that's a little bit tighter and smaller, that runs real time in the vehicle on inference. And the beauty of expanding the inference capability with our Gen 3 platform is it allows us to run bigger models. And so as the model becomes larger and larger to understand all the nuances and sort of intricacies of driving, the need to compress that, to run real time, I should say the ceiling of what it can run and therefore the need to compress it is reduced. We don't have to compress it as much.
- [140:02]
John
Sure, sure, yeah, that makes sense.
- [140:04]
Colin
But this is by far biggest investment category. It's been interesting because when we first launched a lot of the investment was going into the fundamentals of the business of ECUs based software, high voltage architectures, things like DC, DC converters, all this stuff to make the car real. Now those platforms are pretty stable and we're now shifting a lot of those R and D dollars are going really almost entirely towards AI and our self driving platform.
- [140:36]
Jordi
We saw Luminar went bankrupt today. What do you think happens with that asset with their technology from here? Do you think there's. Do you think there's. I imagine there's a number, I can imagine a number of different types of businesses that would be interested in the technology and what they built. But what's your read?
- [141:04]
Colin
It's hard for me to comment. It's not something we're looking at, but I can't comment on others. There may be folks out there looking to buy it out of bankruptcy. I don't know.
- [141:14]
Jordi
Yeah, we'll see.
- [141:16]
John
Convertibles.
- [141:19]
Colin
Are we. You're selling My dad. My dad really wants a convertible review.
- [141:23]
John
No, I mean, correct me if I'm wrong, the number one best selling convertible in the United States, Jeep Wrangler.
- [141:33]
Colin
Yeah, Jeep Wrangler is very popular.
- [141:35]
John
Is it possible?
- [141:36]
Colin
So why don't we do it?
- [141:37]
John
Why don't you do it?
- [141:38]
Colin
So it's so funny you ask this because we. I don't think I've ever said this before, but why not say it here? On R1 we had a version of the roof that was removable early on and we actually tooled it and we decided not to launch it because it was just a lot of complexity. But in the fullness of time, at some point in Rivian's life, I'd love to have a version that has a top come off. If nothing else, just so that my dad will be satisfied.
- [142:06]
John
Amazing.
- [142:07]
Colin
I'll.
- [142:08]
Jordi
I'll buy, I'll buy, I'll buy One too. I'll buy one too.
- [142:12]
John
Within the long arc of history, we are. We are launching a convertible. No, thank you so much for coming on.
- [142:18]
Jordi
I'm excited to see, like, how you guys would approach the removable top.
- [142:22]
John
I think it would be very interesting.
- [142:26]
Jordi
I don't like a lot of convertible designs specifically, but if you guys were thinking about it and saying, like, well, what's the actual technology we have today? What's the best way to make it? So anyways, this was a super fun conversation and please come on again soon. Yeah, we'll definitely reach out and have your team reach out as well whenever you have news.
- [142:47]
John
Yeah, thanks so much for hopping on. This is a lot of fun. We'll talk to you soon.
- [142:49]
Jordi
Cheers.
- [142:51]
John
Goodbye. Let me tell you about profound. Get your brand mentioned in chat. GPT. Reach many millions of consumers who use AI to discover new products and brands. Let me also tell you about this post from Nihilism Disrespector, who says, so is the US economic plan really just build the machine? God, Tyler, what do you think? Is the US's current economic plan really just build the machine? God. Yes, I would agree. I think it is. I think that is basically the plan.
- [143:25]
Samir
We need to nationalize the labs.
- [143:27]
Jordi
Nationalize the labs?
- [143:29]
John
Why are we nationalizing the labs?
- [143:31]
Samir
That's the only way we can get. We can marshal the capital soon enough. It seems easy right now. Everyone's like, oh, it's so, you know, you can raise so easily.
- [143:39]
John
Give me three years when you need 10 trillion or even, what is it, the $10 trillion training run, $10 trillion cluster.
- [143:46]
Samir
There's only a couple ways you can get that.
- [143:47]
John
Yeah, I don't know. I feel like there's a way that the government can. Can foot the bill while not fully nationalizing.
- [143:54]
Colin
Right?
- [143:55]
John
There's gotta be a way.
- [143:56]
Samir
Yeah, but I mean, certainly, you know, maybe not nationalized, but there's a lot of ways where it's like, it probably does make sense in some sense to subsidize intel, stuff like that.
- [144:04]
John
Well, react to this. The fact that Sergei Karaev says it's the annual reminder, the years left to escape the permanent underclass. It was infinity in 2020. It was infinity years to escape the permanent underclass in 2021. And for the last four years, it's been exactly two years to escape the permanent underclass. Feels like this AI thing isn't actually creating a permanent underclass like it was supposed to.
- [144:30]
Samir
Just two more years, bro.
- [144:31]
John
Then just two more years. Time.
- [144:32]
Samir
It's actually different.
- [144:33]
John
Yeah, just two more years. Anyway, let me tell you about TurboPuffer, serverless vector and full text search. Built from first principles on object storage. Fast 10x cheaper and extremely scalable.
- [144:45]
Samir
Okay, so John, actually I had a question.
- [144:47]
John
Please.
- [144:48]
Jordi
So.
- [144:48]
Samir
So I'm always curious, like it seems like in self driving there's like Tesla and then there's comma.
- [144:54]
John
Yeah.
- [144:54]
Samir
And I think of those as kind of the leaders, right? Yes, but you know, comma, there's like the open source, there's Open Pilot.
- [145:00]
John
Yes.
- [145:00]
Samir
So why. It seems like there just aren't that many manufacturers that are, that are using Open Pilot. Is there like a reason? Are they, is it like George Hodge, he just like hates big manufacturers and he wants to keep it.
- [145:11]
John
Well, so. So I mean, I'm not exactly sure. The open source license. I imagine that the open source license says you can't resell this. Now the question is if you bake it into a car. I would imagine most companies like Tesla sells self driving as an upsell. So you buy a Tesla, it doesn't just give you the Tesla's full self driving system for free, you have to pay an upgrade. I would imagine that Rivian matches that pricing model eventually. And so if you build on open source software that says you can reuse it, you can use this open source software, but you cannot sell it. I believe that. Isn't that the Apache license? Yeah, there's a few different licenses.
- [145:50]
Samir
MIT.
- [145:53]
John
I think MIT license, you can do whatever you want with. But there's one license that says you can use it, but you can't resell it.
- [146:00]
Samir
And not for commercial use.
- [146:01]
John
Exactly, exactly. The license transfers down the chain. And so if you're giving it away, if they give it to you, you have to give it to your customer. So you can't monetize that way. So there's that. There's also the possibility, again this is just off the top of my head, but I would imagine that is it the nhtsa, National Highway Transport Authority? I believe that if it's coming from an oem, from a vehicle manufacturer and it's making claims about. This is a level two system, the level three system, you can take your eyes off the road, you can take your hands off the wheel, that probably has to go through a certification that comma doesn't necessarily have to go through certification for. So you're in this scenario where if you're effectively white labeling comma, maybe you don't like, you would be subject to a higher level of regulation because you're not a third party product. So I would imagine that you still take a peek at the Open Pilot repo and see how they're doing it, but then ultimately you go and build your own sort of. Of proprietary stack.
- [147:08]
Samir
Yeah, I guess also for, I mean, rivian, they're using LiDAR, so it's like just not compatible.
- [147:13]
John
Yeah, yeah. LiDAR also just like way more cameras too. Like the open Pilot system is built on two cameras on the front of the device and then one on the back that looks at the driver's face and so you have a wide angle and then sort of a telephoto that will show you the road far away and then the full surroundings. But most cars, Tesla, I'm sure the Rivian will typically have cameras on both. Both side mirrors. They'll also have cameras on the back. Cameras, you know, multiple on the front. So you just get way more data. And that's why I think he was pushing this concept of like the. The Autonomy Compute Module 3 ACM3 is capable of processing 5 billion pixels per second. It's like, why do you need so many pixels? Because you have multiple cameras that are feeding you 30 frames a second, 60 frames a second, and so you need to be processing all of that. Whereas OpenPilot's not designed for a camera that's mounted on the bumper because it doesn't have a wire that goes to the bumper. It's just a phone that's stuck to the windshield, effectively.
- [148:22]
Jordi
One more note. I believe Rivian uses Luminar as a supplier.
- [148:26]
John
Oh, interesting.
- [148:27]
Jordi
And so hence why he couldn't comment.
- [148:30]
John
But he said he wasn't looking at buying.
- [148:32]
Jordi
Yeah, which is. But I mean, they supply for volume.
- [148:35]
John
They might be using a different one.
- [148:37]
Jordi
Going forward, who knows. But they just made that announcement, so potentially. But I'm sure they have a variety of vendors that they're speaking with, but.
- [148:46]
John
Interesting. Oh, well. Well, let me tell you about graphite.dev. code review for the age of AI. Graphite helps teams on on GitHub ship higher quality software faster. How did you sleep last night? Are you back in the game? Fully. Holiday season's upon us.
- [149:01]
Jordi
I slept.
- [149:02]
John
Holiday parties here.
- [149:04]
Jordi
Brutal.
- [149:04]
John
I got a 93 though. Caught up. Saturday was rough. The holiday party came through. I made it out with a 69. Not good. Avoid them. Avoid the VC holiday party entirely. If you care about your sleep, go to eight sleep.com exceptional sleep. Without exception.
- [149:20]
Jordi
I got a 54.
- [149:21]
John
54 on the night of the D.C. holiday party. Rough.
- [149:24]
Jordi
Bearish. Brutal.
- [149:26]
John
Fall asleep faster. Sleep deeper. Wake up. Energized. @eightsleep.com well, we have our next guest in the Restream waiting room, Scott Kapoor. Ho ho, ho. Merry Christmas, Scott, how are you doing? Great to see you again. Thanks so much for hopping back on the show.
- [149:42]
Scott Kapoor
I did not wear my elf outfit for today, but no.
- [149:47]
John
We were this just to do a little inside baseball. We were this close to putting on full Santa suits. And then the team said, you know, we're talking to a U.S. government official.
- [149:59]
Scott Kapoor
You guys, I was gonna say, I thought I was being aggressive. I went sans jacket today.
- [150:03]
Jordi
I'm like, I took my very, very casual, very casual. But you're a serious guy. You're a serious guy.
- [150:10]
John
Yeah, yeah, yeah. So you're bridging the gap. But anyway, give us an update on what's new in your world.
- [150:17]
Scott Kapoor
Yeah, so we just announced a really exciting new program today that I'd love to tell you and your listeners about. Of course, it's called U.S. tech Force. So what this is all right, this is a two year program where we are recruiting 1,000 engineers, product managers, data scientists, AI specialists into government. You'll work in government for two years. Literally every agency in the government basically is participating in this. So if you want to work at Department of War or Health and Human Services or State Department or irs, whatever you want to do, we've got opportunities. And the whole idea is how do we modernize the entire federal government infrastructure? So we've got a real challenge in government. Number one is just obviously we need more smart people who've got modern software development, modern AI expertise. And then we're also really have not done a good job of recruiting early career people. So if you look at people earlier in their career, only about 7% of the federal workforce is early career. And at all the companies that you guys talk to on a daily basis, I bet you that number is like 25 or 30%. So we are by at least a factor of three to one in a real world of hurt in terms of being able to recruit and retain early career people. So this is a two year program. We're doing this in partnership with about 25 of the tech companies that you all know and love. So, you know, Coinbase, Robinhood, Databricks, Snowflake, Nvidia, Xai, OpenAI. And what those companies are doing is they're going to help us kind of create a program around this. So in addition to working in your day job in government, we will have a speaker series with, you know, we'll get Sam Altman to come. You know talk to you and tell you about what it's like to work at OpenAI. We're going to do career development. And then at the end of the two years, these private companies have all agreed to kind of participate in a job fair where we're going to showcase all the work that these guys are done. And you know what, if you want to go in the private sector, God bless you. Go do that. If you want to stay in government, we'll find a job for you. But we're not asking you to make a 40 year commitment. We're asking people to do good for their country for two years, solve some of the world's biggest and toughest problems, and then we will gladly help you in terms of your private sector career opportunities.
- [152:17]
Jordi
1000 people, assuming this goes well, it feels extremely critical in this moment. Is this something you want to 10x for the next 2 year period? Where does this go?
- [152:31]
Scott Kapoor
Yeah, no, you're absolutely right. So I think there's two big opportunities here. One is just look, there's way more demand than for a thousand engineers in government. So yes, if this is 5,000, 10,000, I think we'll still be barely scratching the surface of what the needs are. And then more importantly, what we're trying to do is we're trying to do a more efficient way of hiring by centralizing a lot of the hiring. So at my department, opm, we're going to do all the outbound recruitment, we're going to do all the initial screening, we're going to do all the initial assessments for people, and then we're going to hand the agencies a list of, you know, here's a thousand people who have passed, like the technical qualifications you told us were necessary for the job. Now you all, quite frankly compete against one another and convince these people why they should work at HHS vs Department of War or others. And if this works, I think this is going to be a model for how we do kind of centralized hiring going forward in the government. So we hire a ton of program managers, HR people, financial analysts. Like, there's no reason why an applicant should have to know that 40 different agencies are hiring for a program manager. All that person should need to know is like, my skills are in demand by the US Government. I'm going to centrally apply to this, to opm, and then my resume is going to basically get circulated to all the interested agencies. And then I basically kind of have my pick of the litter of figuring out which one is best aligned with my career objectives.
- [153:43]
John
Okay, walk me through how someone in one of these roles, in part of the tech force could actually have an impact. I worked at the Census Bureau maybe 15 years ago. You heard that? Yeah. And I would have been like a tech force person. Like, I came in and they gave me a stack of papers and a pencil and they were like, we do stuff on pen and paper here.
- [154:09]
Jordi
And I was like, John worked his way to managing a team of like 100 people very quickly as a college student.
- [154:15]
John
It was a very funny story.
- [154:16]
Jordi
He made the most of it.
- [154:18]
John
But our job was to go around on a map and, and interview people in different houses. I was like, we should use Google Maps. Google just put all of the. Put all the addresses that you need to go to into Google Maps and then you know exactly where you need to go that day. And of course they were like, no, no, no, we don't have a deal.
- [154:34]
Scott Kapoor
That's heresy, my child.
- [154:35]
John
Exactly, exactly. So, like, I didn't necessarily have the authority to just tell the entire organization, hey, we're using Google now. Also, there's probably some sort of privacy thing. There's a whole bunch of reasons why you can't just fire it up. But how do you empower the tech force folks to actually have a positive impact that reverberates throughout the organization?
- [154:57]
Scott Kapoor
Yeah. So you are 100% right. And this is why a lot of these programs traditionally have not accomplished what we'd hoped they'd accomplish. Because what happens is someone like you, a smart guy, let's assume that for a second, a smart guy gets dropped into the blob that is the US Government, basically. Right? So you're right. Like you will just. You basically have no authority. You have no ability to get things done. So what we're doing here is there's two critical differences we're doing here. Number one is if you are one of these thousand folks, you are going to go over as a team to an agency. So I'll give you an example. For example, at irs, they probably could hire several hundred of these people. I don't know. So there are going to be several hundred people who will be part of this team. So, number one, you're going to be part of that group. Number two, as I mentioned, we're going to create a programmatic piece around this. So your buddies who are at HHS or your buddies who are at State Department, you're going to see them once a month, twice a month at a speaker series, at dinners and stuff like that. So you're going to get real good networking across pollinization and then thirdly, to avoid the problem you're talking about is we're not going to drop you into the blob. We're basically going to have you as a full unit, basically reporting into kind of senior political leadership in those organizations and they're going to decide what you do. So you're not going to come in here and manage a contractor, which is unfortunately a lot of what does happen inside these organizations. But we're going to create basically a separate team that can do a lot of the bespoke development that has cover from the most senior political people in the organization. So you're totally right. And your experience is not unusual, by the way. That's a lot of what I've heard from people as we try to figure.
- [156:25]
Samir
Out what to do.
- [156:26]
Scott Kapoor
And so our hope is that by accommodation of those things, we can avoid that problem. Because look, for this to work, what I'm trying to test is two things. One is can we actually solve the modernization problem in government, which I'm quite convinced with smart people we can. And then two is we demonstrate that the work you do here is valuable not just to the government, but valuable to the private sector, such that if you want to go get a private sector job, the private sector looks at what you did and says, wow, like those skills are generalizable to whatever Google, Facebook, Coinbase, you name your favorite company. And so we've got to make sure that the people here are successful.
- [156:59]
Jordi
What do you think are the most overlooked agencies? Interesting kind of corners of the government that are going to be hiring through tech force? I think the guy from Gumroad, I saw him at the irs. We've seen DOGE people over at the Treasury. But what are some kind of overlooked opportunities?
- [157:23]
Scott Kapoor
Yeah, there are really good people, quite frankly, across the board. But yes, look, the obvious ones of course are Department of War. It's really cool to do drone stuff and that's awesome. And some people want to do that. But like Interior is doing a bunch of actually very cool stuff, energy. So if you're interested in energy, they're doing a bunch of supercomputer like stuff to basically make sure that they can have quantum computing work and stuff like that. They've got to solve the broad energy problems. That's pretty cool. CMS. So Dr. Oz over at CMS is trying to redesign kind of how consumers interact with cms. So something like for example, an integrated position directory, which I know sounds like very commonplace these days, but like that doesn't exist. So there's Kind of a combination of what I would call like back end infrastructure stuff. And then the other part of this that's going to be really cool is, you know, my friend and yours, I think you guys know Joe Jebbia, who's one of the co founders of Airbnb, who's been sitting literally just behind me in the office here at OPM helping us redesign our retirement services application. He's now starting this whole thing called Design for America, Right, which is basically this very broad, like, you know, design oriented relook at all the applications that are customer facing in government. So you can think of this as an opportunity to take the work he's doing on the front end, coupled with a lot of the modernization stuff that has to happen on the back end. And collectively, I think we can really transform kind of the way government services are delivered and quite frankly provide a much better service to the American people.
- [158:49]
John
Fantastic.
- [158:50]
Jordi
Very, very cool.
- [158:51]
John
Where can people go to get started? Is there just a web form to apply?
- [158:55]
Scott Kapoor
Yes, there is. Yes, it turns out we have a web form.
- [158:57]
Jordi
So you can go Joe Gebb, designed by Joe himself. By Gebia.
- [159:03]
Scott Kapoor
Exactly, actually. Exactly.
- [159:06]
Evan Spiegel
There we go.
- [159:07]
Scott Kapoor
By the way, I just learned it's Jebia, not Gibbia. So unless he's pulling a fast one on me, we'll have to correct our pronunciation. So you go to techforce, you can go to either ustechforce, which is our X handle, or you can go to techforce.gov or you can go to my Twitter Kupor. All those places will point you to the right one. Apply, tell your friends, tell your family. This will be a great dinner conversation over the Christmas table to say that you're now coming out of the closet in terms of working in the basement and you're ready to kind of get a real job.
- [159:45]
John
I love it.
- [159:47]
Jordi
I'm very excited about this. I mean, I can see, I'm excited for people all over the career kind of spectrum, people that have done 20 years in industry and see an opportunity to come back and serve the country in this way. And in the future, young people coming out of college that are highly motivated, have a skill set and can apply it across all these different touch points. So very exciting.
- [160:15]
John
Well, thank you so much for coming.
- [160:16]
Scott Kapoor
Thank you guys so much.
- [160:17]
Colin
Yeah.
- [160:17]
Scott Kapoor
Have a great holiday season.
- [160:18]
Jordi
Yeah. Great to get the update. Cheers.
- [160:20]
John
Goodbye. Let me tell you about getbezel.com, shop over 26 6,500 luxury watches fully authenticated in house by Bezel's team of experts. And let me also tell you about wander.com book of Wander with inspiring views. What a great place to go for that. We're getting to the holiday ad reads. Hotel grade amenities. Dreaming beds, top tier cleaning, 247 concierge service. You know the other really good gift this holiday season?
- [160:45]
Jordi
Hit me a billboard.
- [160:47]
John
Adquick.com out of home advertising made easy and measurable plan. Buy and measure out of home.
- [160:52]
Jordi
Get your put a billboard under the Christmas tree. Or at least a credit for a billboard.
- [160:56]
John
Yes, absolutely. Well, we have our next guests. Colin and Samir from, of course, the Colin and Samir Show. Welcome, legends, to the show. They're gonna come and sit down here. Good to see you guys. Welcome, welcome. We're live.
- [161:13]
Guest Creator 2
How are you?
- [161:14]
John
Good to see you in ultra dome. Good to see you. How you doing?
- [161:20]
Jordi
Great to have you guys in person.
- [161:21]
John
Yeah, man. Finally.
- [161:23]
Guest Creator
Can I raise this? Because everyone just became very aware of my height when you shook my head.
- [161:29]
Jordi
How do I do this person here?
- [161:30]
John
I have the worst brain.
- [161:32]
Guest Creator
I look like I'm under the desk right now. How do I raise?
- [161:36]
Guest Creator 2
Do you lean back?
- [161:37]
Jordi
Stay off the wide, Stay on the.
- [161:40]
John
Tight, Stay on the tight, stay on the tight.
- [161:42]
Guest Creator
You read my rider.
- [161:45]
Samir
For a while.
- [161:46]
John
That wide was a 15 millimeter or something and it looked insane. I looked way bigger than the ghost. Now it's like evening out.
- [161:53]
Guest Creator 2
What an incredible holiday vibe here.
- [161:56]
Jordi
Look at this. Look at this signed.
- [161:58]
John
We got a sign.
- [161:59]
Colin
Holiday ghost.
- [162:01]
Jordi
That's going straight to the top. Straight to the top.
- [162:04]
John
We were very, very close to being in full Santa suits. I had Christmas week.
- [162:08]
Jordi
You can see our.
- [162:10]
John
Of course he's in it.
- [162:11]
Colin
Yeah.
- [162:11]
Jordi
With the belt.
- [162:12]
John
I think we will be. I do think we will be doing the Santa outfits tomorrow.
- [162:19]
Jordi
This is maybe the last time we wear suits this year.
- [162:21]
John
Maybe, maybe.
- [162:22]
Jordi
Maybe the rest is.
- [162:23]
John
Anyway, it's been. It's been a wild year for us. It's been a wild year for you. What have been the standout moments for you this year as you look back on it as two creators?
- [162:33]
Guest Creator
I actually think we're in a standout moment right now in everything that's happening with Netflix and Warner and like, the conversation around that, I actually think has a lot to do with YouTube creators and what has happened with YouTube. And I think between that and then what we just saw with Disney and Sora, I think these are two topics that it's worth getting into and giving our perspective as creators of what's going on.
- [162:56]
Colin
Yeah.
- [162:56]
Jordi
I feel like the notable thing is in all the antitrust debate and conversation, everyone's like, look, look at YouTube.
- [163:03]
John
YouTube's.
- [163:03]
Jordi
Look at all that watch time. Look at all that watch time.
- [163:05]
John
Do you buy that? Do you buy the YouTube? Because there is a narrative in Hollywood that Warner Brothers and Netflix are too powerful together. It's too crazy. And then a lot of people are saying, hey, YouTube's like running away with the whole game. This is a sideshow. Where do you stand on it?
- [163:23]
Guest Creator
Yeah, I mean, look, Greg Peter said that as a quote, right? That like, even if you put these two together, it's still smaller than YouTube, which is such an interesting justification of why the deal should go through. But I think the reality is Neil Mohan was just named Time CEO of the year. And I think his positioning and what YouTube has done really well. Two guys who've been on the platform for 15 years, his positioning is they build the best stage, essentially evaluate it like an open mic night for the Internet. It's just anyone can go on there and see. You literally don't know. We don't know if like the greatest piece of content could be uploaded today. YouTube has no idea. And I don't think you can compete with that. The fact that they don't pay for content.
- [164:06]
Colin
Yeah.
- [164:08]
Guest Creator 2
The fact that people will upload with the chance of getting distribution and not even looking for the economics. The economics are there. Like, if you can create content, obviously that gets millions of views. There are many ways to monetize, but that's pretty dangerous in a good way for YouTube to sit in that place where like, someone can just. There's a guy who spent two years making a documentary about bird watching and was like, I'll just put it on YouTube for free. And it's incredible.
- [164:33]
John
Wait, who's this?
- [164:34]
Guest Creator
His name's Owen Reiser. It's an amazing documentary. It's called Listers. It has like almost 3 million views now. And he didn't know how he wanted to monetize it. He had offers from streamers, but just didn't want to do it. Put it on YouTube and put his Venmo link in the description.
- [164:49]
Jordi
No way.
- [164:50]
Guest Creator
And the time we talked to him, which was like two, three weeks after, after he put out the doc, he had been venmoed. $75,000.
- [164:56]
Scott Kapoor
Incredible.
- [164:57]
John
That's amazing.
- [164:58]
Guest Creator
Which is unbelievable. But this model of just kind of like. I don't think we talk enough about the fact that you can just upload a video or what we're doing right now is just being live.
- [165:10]
Scott Kapoor
Right.
- [165:10]
Guest Creator
And to do that 20 years ago was impossible. And so I think it's Gonna be really challenging when you're Netflix and you're spending money on something like Stranger Things and you're placing a bet. You're placing a bet that you think the audience will like it based on historical data or based on packaging actors and old school Hollywood technique, whereas YouTube's like, yeah, I think you'll like this. And if you don't, I'll just get data to figure out what you'll like next.
- [165:39]
Jordi
Well, and I think that's why Netflix and Paramount value this IP to such an extreme degree. Because that's the one thing I feel like YouTube has done because, like, creating really valuable IP, I think takes decades. Like, you have to build it up.
- [165:55]
John
It seems like no amount of money can just create a new superman or a new Spider Man. And it feels like we would have gotten that out of YouTube, just the broad economic forces, or we certainly would have got it out of Netflix. And we have it a little bit with Squid Game and Stranger Things, to your point. But it just. With all the tech money, all the money, there's so much of incentive, but there's just no shortcut for, okay, this has been. My. My dad watched this, and I watched it with my dad, and then I watched it with my kids.
- [166:22]
Jordi
And, like, I'm going to think about YouTube IP. I think of, like, Ms. Rachel, which is like, I think at some point she could trade herself out.
- [166:33]
John
Okay.
- [166:34]
Jordi
And have an actor like, I think about.
- [166:37]
Guest Creator
Dude, Perfect. And Good Mythical Morning.
- [166:39]
John
Yeah.
- [166:39]
Guest Creator
So Rhett and Link with Good Mythical morning. They're on 3,000 episodes right now of a morning show that people have grown up on. It's been around for near two decades now. It's daily. I think there's a lot of value to what they've built. They've built a big company with writers, and they could either someone else could take over that show, or they can sell this catalog of relatively evergreen content. Dude, Perfect is expanding right now. They've been around also for almost two decades. They just launched Dude Perfect Outdoors. They launched a new podcast. They can expand that universe pretty well. So I do think really good IP is building on YouTube. It's all gonna take time, but again, the amazing thing about the platform that is YouTube is that.
- [167:22]
John
I guess the question is, you pointed this out to me the first time you were on the show was that there are. I forget exactly the stat, but it was something like, there's a ton of young kids where their favorite person is someone no one else knows. And it's sort of a referendum on, like, the Nimsell phenomenon that you can be niche huge in that niche. Like you are getting stopped for a signature by that fan or never heard of them. Like, like, you know, just a bunch of people that are like.
- [167:51]
Guest Creator
I mean the four of us could walk down the street here.
- [167:53]
John
Exactly.
- [167:53]
Guest Creator
And there could be people who are like, holy shit, it's John Jordy.
- [167:56]
John
And then, and then have to explain who everything about what you do and then the opposite. Whereas that's not true for Spider man, that's not true for Star Wars. There's certain things that have broken through to its, its household name level And I think Mr. Beast has done that for sure. Dude, perfect. Yes. To some degree. But it just feels like it's a function. It's not saying that it can't happen. It's just a function of time more than money or anything else. And I think if. Dude, perfect. 20 years, super impressive, incredible. But it takes 50 to be a 50 year old property. Like there's just no. We had the acquired guys on the show and we were talking about like, why should we ring the gong for you? What is it? And the metric that I was the most like envious of was they've been doing it for 10 years.
- [168:39]
Evan Spiegel
Yeah.
- [168:39]
John
And it's like, it's like, yeah.
- [168:40]
Jordi
I wonder if it's actually a function of you need like three generations to grow up on the content in order for it to be durable. Ip.
- [168:50]
Guest Creator 2
That is true. We're just getting to the point where there are creators like Rhett and Link or Dude, Perfect. That are, are going towards 20 years. Right. So we're seeing these creators do this for the first time. Totally.
- [169:00]
Guest Creator
Well, I think on this, like on the point of Netflix, YouTube, Warner, like, we'll see what happens. But I do think it's interesting that Netflix, in order to compete, needs to acquire a bigger catalog. And maybe, maybe, maybe with what they're doing, they're starting to also offer deals to podcasters.
- [169:15]
Jordi
Yeah. At what point do they just open up the platform and say here's an upload button.
- [169:20]
Guest Creator 2
2026.
- [169:21]
John
Really?
- [169:21]
Guest Creator 2
Yeah.
- [169:22]
Colin
Whoa.
- [169:23]
Guest Creator 2
I think there's gonna be a creator program of some sort.
- [169:25]
Guest Creator
Because even if you think that's more.
- [169:27]
Jordi
Curated, but I've heard you can do.
- [169:29]
John
That on Amazon Prime. I'm pretty sure if you have, you can just upload and say yes, cool.
- [169:35]
Guest Creator
You can do that.
- [169:35]
Guest Creator 2
I think if you look what Netflix did with Mark Rober, massive YouTube creator, they took his top 10 basically greatest hits from YouTube, repackaged them. They're on Netflix right now and it was a top ten show on Netflix. Number one kids show.
- [169:48]
Colin
Wow.
- [169:48]
Guest Creator 2
They also signed a deal with him to make a new series, a reality show.
- [169:52]
Guest Creator
He also did a Christmas special with Elmo directed by another creator, Daniel Thrasher. So very cool, Very cool.
- [169:57]
Guest Creator 2
But that shows me that they have an openness to content that I don't think they would have been open to a couple of years ago that maybe they wouldn't have deemed premium enough.
- [170:06]
John
Sure, sure, sure. But I mean, at a certain point, like just, Even just the AdSense is. If you just took the AdSense from a MrBeast video, like that's enough to go shoot a Hollywood. That is the budget of a Hollywood 20 minute production.
- [170:18]
Jordi
Here's the other.
- [170:19]
Guest Creator
Yeah, maybe I think it just feels.
- [170:21]
Colin
Like there's enough money.
- [170:22]
Guest Creator
Jimmy's adsense is very different than other people's adsense. I think what you guys have probably experienced is sponsorship dollars are gonna drive the majority of production. But my concern with the Netflix and as they move into podcasting is their appetite for niche communities. Because they tried this with fitness at one point. Point they did a partnership with Nike where they were trying to compete essentially with Peloton. They're like, maybe people come here to work out. The audience was too small and like they don't do well with niche. And our world, like we just talked about is like it's choose your own adventure from a media perspective. And YouTube is great at that.
- [170:57]
John
Here's. Here's what, here's what, like taking K Pop Demon Hunters and making it a national conversation, making Squid Game a national conversation.
- [171:05]
Jordi
That's the game that, that Netflix is missing. And maybe their opportunity to grow watch time is there's nothing real time on Netflix at all. So much of the time that I want to watch content, it's like I'll watch some geopolitical like creator on YouTube. I'll watch like what happened F1 commentary reaction. Right. Netflix does. Has nothing for me if I want to kind of understand what happened in the last 24 or 48 hours.
- [171:31]
John
Right.
- [171:32]
Jordi
And. And I just feel like a lot of watch time on the Internet is that kind of more real time. There's like evergreen entertainment content that Netflix is dominant in, but YouTube has both. And so I think that can explain some of the differentials.
- [171:46]
Guest Creator
I think this actually the conversation moves nicely into the Disney Sora thing and.
- [171:52]
Jordi
Largely because what was your immediate reaction to the news to Disney Sora?
- [171:57]
Guest Creator
Yeah, it's like it was gonna happen. I'm surprised they're the ones who did it. But I think what Colin I have been kicking around is like the video gamification of everything, where even if you look at prediction markets, right? So like you guys obviously have a partnership with polymarket and you look at Kalshi polymarket, everything is a video game, right? And if we look at the early origins of YouTube, it was video games. Look at the early origins of Twitch, it was video games. And I think our expectation as audience members is that all of our media is interactive. We can play with it, we can touch and feel it. And it's only getting increasingly more interactive. So the Disney SORA conversation, especially like as generative AI has come into the picture, it's like generative AI itself is entertainment. So me generating images and videos is time I'm spending entertaining myself.
- [172:45]
Jordi
Right?
- [172:46]
Guest Creator
It's not just utility, it's entertainment. And I think obviously if you have this IP, you guys just talked about, like it takes 50 years to build IP. You look at Disney's IP, it's hundreds of years. You have this IP, how do you monetize it? Well, what's really interesting, my assumption, I haven't read into this, if this is what's happening, but with Sora, is that if you use one of the 200 characters that's licensed to Sora over the next three years, there's likely some fraction micro payment going back to Disney. And if it's not, I think that will be the model where essentially, yeah, I'll give you Mickey Mouse. Just give me a fraction of a penny every time someone uses Mickey Mouse. Now, like from an audience perspective, it's interactive media. It's more fun for me to prompt and generate Mickey Mouse in the context that I want him. And then for Disney, they have this IP that can be generating very small amounts of money. But you scale that out to like 30 million people using it or 20 million people using it, it's like that gets pretty significant.
- [173:40]
Guest Creator 2
It's kind of move towards UGC in the same way that Netflix needs to open up a creator model. Let's open up our IP for a lot of creators. And like they said, some of it's going to come to Disney plus.
- [173:49]
Jordi
Yeah, I just, I think it's. I thought it was smart for a lot of reasons. I think, I think OpenAI specifically needed some competitive edge around. I think people were. Nano Banana has like really broken through. I have two account. I have account. I have an account that I just have free models for the different labs. So I did the same prompt yesterday with Gemini and ChatGPT for an image generation. And Gemini was like 10 seconds. ChatGPT on the free plan takes like, I didn't even come back. I didn't actually go back and see it, but it took like multiple minutes. And so having something that gives them a reason to drive a bunch of new paid subscriptions, I think and like specifically get the next generation. Disney products are like a drug for children. They're addicted, right. And, and I think it's like adding a personalization layer that didn't really exist for Disney. Like you go to the parks and you could have a meal with a character or whatever and that was personalized or take a picture or something like that. But I think if you're Disney and you're trying to drive more signups to Disney, plus more retention, more park visits, I think it's actually smart. Because if you put the only thing my three year old knows about AI, and he doesn't even call it AI, but he's like, make a Dino picture. He just. That's like stuck in his head because it's such a fun experience of like we take a picture, we take a selfie and then we just make it make us look like dinosaurs or whatever. He loves it, right? So Disney doing that and getting, you know, I'm sure a lot of people will say this is like terrible and shouldn't happen, but getting a bunch of young people to have that experience of like making a Disney part of their like everyday experience in life I think is going to be, have like powerful downstream effects.
- [175:35]
Guest Creator 2
I feel like Sora was a bit of a Napster moment for visuals. Like, Sora came out and sort of broke the mold of what we would expect. And a lot of people started using the IP anyway. And we were like, wait, you're supposed to pay for this stuff. And then like a new model of streaming has emerged. And I don't think artists are particularly super excited about that model, but they've adjusted, right? And I think this is another moment where it's like, oh, okay. The way that we monetize this art has shifted because of technology. Technology. And it has just happened. And Disney in a way is now, I think, just coming over me like, this is already happening. People are already using our IP in ways we didn't want them to on Sora. So let's just get involved and create the new model. Let's come up with the new model for how we monetize.
- [176:17]
Guest Creator
I actually think even if you look at what you guys are doing with this show, like I always think about a live show like yours as like your open source. You're giving open source material to the Internet in a way.
- [176:26]
John
Right.
- [176:27]
Guest Creator
People can clip this and play with it and interact with it and talk about it and retweet it and it's like it's a playable medium. And I would assume that there's some clips of this show that have extremely high viewership that no one in this building made.
- [176:42]
John
For sure.
- [176:43]
Colin
For sure.
- [176:43]
Guest Creator
Right.
- [176:43]
Jordi
And so that some of the clips with the best performer, if you probably took like individual assets that got the most views, probably at least 5 out of the top 10 were posted by other people that were just the most viewed.
- [176:57]
Guest Creator
Clips of the Colin and Samir show are not made by our team.
- [177:00]
Colin
Wow.
- [177:00]
Guest Creator
For sure. If you go on TikTok, search Colin and Samir show, you search some other interviews like they are all clipped by other people in ways that we wouldn't have.
- [177:07]
John
Or it's even reframed.
- [177:08]
Guest Creator
Yeah, or it's reframed and it's reframed around your show. It's reframed totally.
- [177:12]
Guest Creator 2
We can't even compete with our own clips. You know, we tried doing like, oh man, that person already put it out.
- [177:16]
Guest Creator
Yeah, we tried to compete with the Internet for our own clips of our own show and we couldn't compete. And that's where I think the perspective of like Disney and Sora is like, yeah, just like here's material content ID.
- [177:30]
John
Type system will come for clips and.
- [177:32]
Guest Creator
From AI, I think it has to. I mean I think YouTube has precedent with content ID. I think we'll all as creators live in the world where we're like, yeah, you can use my. The same way that Sora kind of showed it. It's like, yeah, you can use my face. But I think there will be, there have to be a revenue share model. Like I think for this to work properly and maybe nobody cares about this.
- [177:54]
John
But it's not just revenue, so it's like multi share because it can't just be what it is. I don't know exactly if it is this way currently, but there's the thing about like I could be using some clips from your show and clips from this show and this. But as soon as I put Mariah Carey's like, you know, Christmas song in there, like she's getting 100% of the revenue. She owns it. Right. And there's like only one claimant right now. But they'll need to be like slices where it's like your face was on screen for this.
- [178:21]
Guest Creator
I don't want to Say it, but I'll say it. It feels like Web3 was starting to get onto this with fractional ownership. That's where you can tokenize yourself in a way of like, yeah, if this token is used, I receive X percent.
- [178:33]
John
You may or may not actually need the blockchain underlying this idea of fractional.
- [178:37]
Guest Creator
But there was an idea of that where Grimes gave her voice out, right. And it was like a 5050 rev sheriff used her voice and I think that maybe will happen, but I also think just the Internet and YouTube specifically I think will look pretty different in that not only will we say you can use my IP and my face, but I think you'll take the full length episode of your guys show or let's say our show and I think you'll just type in I got seven minutes. Can you just give this to me in seven minutes? Like you can use their voice and like their style of animation, but just like give me the, give me the seven minute version of this. Yeah, I think if you've ever played with NotebookLM you start to see like how like manufacturing your own entertainment, where I could go, give me tbbn, give me Colin and Samir and give me acquired last episode. But like summarize it all for my 21 minute drive. Right. Connected to Google Maps.
- [179:29]
John
Yeah, I've always interested in where that lives. Like does that live in the consumer side or on the platform side or on the creator side? Because like we literally do that. We have a 20, 20 to 30 minute cut down of the three hour show.
- [179:43]
Guest Creator
Right.
- [179:43]
John
That we cut down. We edit diet tpp, diet tbp.
- [179:46]
Jordi
Very familiar.
- [179:47]
John
It's very, yeah, we, it's been, it's.
- [179:49]
Jordi
So funny because I've created other people create like diet versions of their show now and when, when we were first like conceptualizing the show based on people's feedback of like I want the show in 20, 30 minutes, I was like, oh, we'll just call it Diet TVPN. It's like all of the flavor, like way less calories. And John was like diet. Like does that make, does that make any sense? But it is a good, it's like.
- [180:16]
John
Not an industry term.
- [180:17]
Jordi
It's not an industry term but it.
- [180:18]
Guest Creator
Makes more sense in universal sense. But anyway, I think you'll be able to make your own version of diet. Right. But you'll have to say yes to that. And again there will have to be some new way of like yes, so long as I'm compensated when that happens. But if it is us, Ben and David and you Guys in one episode. Also the question is who's weighted heavier? Is it acquired because they're the luxury brand, they're the Rolex of the space.
- [180:48]
Guest Creator 2
Yeah.
- [180:48]
John
I don't know. Yeah, that's funny.
- [180:49]
Guest Creator 2
You may not even have to ask the platform to do it. From an audience perspective.
- [180:53]
Guest Creator
I think the platform just does it.
- [180:54]
Guest Creator 2
I think at some point.
- [180:54]
John
Yeah.
- [180:55]
Guest Creator 2
They're like, no, we know better than you based off of what you've already told us in your behavior.
- [181:00]
John
Potentially. But what's odd is that the AI models, they're really good at a lot of things, but they have not yet been good at clipping. You don't want to go up against the Internet. But I would say if there's five mega viral call and some ear clips that, that, that you guys didn't clip. There was. Those were clipped by humans though.
- [181:16]
Guest Creator
Those are humans.
- [181:17]
John
Those were not 100% because as soon as someone could do it, they would definitely run. Oh yeah. Run the prompt over all their content. Let me put it out. I'll.
- [181:25]
Guest Creator
I'll try and monetize decent platforms that can get you like 65 of the way there. But yeah, you're right.
- [181:31]
John
They're good as tools. They're good as tools alongside the human. But the editorial, it's an editorial.
- [181:36]
Guest Creator
There could be this show generated by AI. Right. Like I'm just saying, if you just look at the technology, like we could ingest news and figure out how to give it in like an audio.
- [181:49]
John
Yeah.
- [181:49]
Guest Creator
Form, contextualize. But it's not as fun. It's like that has. No, I'm not.
- [181:53]
Guest Creator 2
It's also nowhere near as special. Like there is something very special about what happens here day to day.
- [181:58]
John
It's hard to put your finger on.
- [181:59]
Guest Creator 2
Changing and feeling like you're here in the moment.
- [182:02]
Guest Creator
Yeah. I think to clarify, like if anyone's listening to this being like, oh my God, they're like this is the dystopian world of content. There is no world where I see your guys show as an example is like there is more room for interesting creative now than ever. If you are thinking about what is. This is maybe a bizarre way to put it, but what is like a uniquely human format. It's why we've invested more in live events. Like we did our first big live event in New York in September and.
- [182:31]
John
That was with Google.
- [182:32]
Jordi
Right.
- [182:32]
Guest Creator
They were a sponsor. Yeah. And it was super fun and it was great. And there's 500 people in a room and I think you feel like that is there's going to Be a rise in live events for sure. Obviously, I imagine you guys are gonna do some version.
- [182:44]
John
We haven't cracked it, but you'll do.
- [182:46]
Guest Creator
Something where people can show up and people will die to show up to it. Sounds fun. Yeah. Acquired. Obviously had people in the chase center. Like, I think good creative will always win. But I do think back to the Netflix conversation. The. The question is, who is the arbiter of taste in all of this? And I think the old Hollywood world is like, Hollywood is the arbiter of taste. We're gonna show you what good is. And Netflix is that right? They're gonna curate stuff editorially. I think that still matters. I don't wanna suggest. It doesn't matter. I enjoy that. The other side is that the audience is the arbiter of taste and the curators of what's good. And that's the.
- [183:22]
Jordi
I would, as Netflix subscriber, I would be excited for them to have a corner of Netflix that's just history. Content from independent creators. Just like effectively, like providing Johnny Harris. Yeah, stuff like that. Because I've been on YouTube to fall asleep at night, I can't watch anything tech or business related because it just.
- [183:42]
Guest Creator
Kind of riles you up. I get it.
- [183:44]
Jordi
A bunch of ideas. So I have to just like, it's gotta be like 30 years old. Like, it's gotta be like, history. And something I've noticed recently is like, there's a bunch of channels getting a lot of views that are getting served in the algorithm that are clear. And I only clock that it's AI because they'll use images and then there'll be like a talk track and there's a bunch of creators that have just nailed this format over the years. But I'm starting to hear like, this battle wasn't just a fight. It was a turning point in history. And like, very clockable as AI. And so now, like, in the same way on Amazon, as a consumer, you're like, I just want to buy stuff on Amazon that's from brands that are over 50 years old. Because then I know that it's totally. I know that it's not like somebody just, you know, that's how I feel about dropshipping Shop.
- [184:31]
Guest Creator
I sometimes will get caught with a product that I'm like, maybe I want that. But if it's on TikTok shop, I'm like, I don't.
- [184:37]
John
Rough.
- [184:38]
Scott Kapoor
Yeah.
- [184:39]
John
Blanket dis. Endorsement, is that not?
- [184:41]
Guest Creator
But, like, do you guys not.
- [184:42]
Jordi
I've not sponsored.
- [184:45]
John
No, no, no. I don't even have like, Real. I don't even have TikTok installed.
- [184:49]
Guest Creator
These guys are in deep negotiation with TikTok right now.
- [184:53]
Scott Kapoor
I've never been met with.
- [184:55]
Jordi
It's the opposite. I actually said, we're the hardest digs this year.
- [184:58]
Colin
No, we're.
- [184:59]
Jordi
We're bad creators. We don't have TikTok on our phones. We get some there. We have one friend that sends us TikTok links, and I've never watched any of them. Yeah, not a single one. I gotta. We got. When Larry comes out and says, like, I fully control TikTok now. It's mine. I've got it here on my phone. Yeah, I trust it. You can trust it. Then I'll give it a spins.
- [185:20]
Scott Kapoor
You know what is.
- [185:20]
Guest Creator
You guys don't have TikTok. So we'll tell you about this. There is, like, AI creators now, and that is very bizarre and dystopian to me because they even me. And maybe I'm getting to that age where I'm part of the cohort that can't tell, but I can't tell.
- [185:36]
John
Okay. Oh, so you're not talking about, like, there is a creator that creates various animals being pulled over at DUI checkpoints and, like, that's their shtick.
- [185:44]
Guest Creator
I'm talking about like an. An AI generated human creator who looks human.
- [185:48]
John
Okay.
- [185:49]
Guest Creator
There's this.
- [185:50]
John
Are people in on the joke or not?
- [185:51]
Guest Creator 2
It's just the pace. They're not. They're not in on the pace. And the tools really have opened up a world where it is easy to create. I mean, I've like, yeah, I've seen these and I've been like, let's see.
- [185:59]
Guest Creator
Can we pull up one?
- [186:00]
John
Is that sort of the biggest. Is that sort of the biggest trend of 25, you think? Or. I'm super interested, like, at a more tactical level, what's changing on YouTube, like, because obviously we've been through, like, the 8 minute shift and the 20 minute shift and then clickbait to, like, the counter switching to avd and all these different little moments have happened. Were there any. Is it fair to say that AI is like the biggest change in 25, or was there another kind of meta shift that you sort of noticed?
- [186:31]
Guest Creator 2
I'd say one that we talk a lot about is the shift from podcasts being the meta. When you think about the last presidential election to obviously podcasts played a major part. If you look at the amount of podcast appearances and viewership that Trump got versus Kamala Harris, like, it's just. The graph is unbelievable.
- [186:49]
Scott Kapoor
Yeah.
- [186:49]
John
And I Had this whole take during the election that it was about watch time too. Because the crazy thing is that she not only would. She would come and go on like a smaller show with a smaller audience, but she would only do a 45 minute hit and Trump would be there for three hours. And I'm like, we know AVD watch time is important.
- [187:07]
Guest Creator
We actually clocked and we wrote down how much time. And I think for Trump it was like 16 hours available or maybe more. And for Kamala it was like under two.
- [187:16]
John
And it's just like as a voter, if you want to just sit and be like, I want five hours of content from this person to make my decision, I'm going to listen to five hours of both and there's not five hours of one. That's a tough sell anyway. That looks extremely real. I would never get to the point.
- [187:33]
Guest Creator
I don't know if I can show a camera. I don't even know what camera is looking at me right now.
- [187:37]
John
Oh, there you go.
- [187:38]
Guest Creator
There you go. I don't know if you can tell, but like, well, so here's the thing.
- [187:42]
Jordi
That'S going to happen is people are. People are going to start to realize if this person has didn't post at all before 2025, they're not real. Because I feel like this year the model got.
- [187:53]
John
In 2019.
- [187:55]
Jordi
Check the early Instagram.
- [187:57]
Guest Creator
My understanding of how things have changed on YouTube is that if I was to zoom back to when I first got on the Internet, I think the amazing thing was it was all information. We could access information in a crazy way. At least when I was a kid, we would go to the library and go to the librarian and try and find a book about something. And that changed when we could search Ask Jeeves or Google or AOL or Yahoo, and we could just find out things. And that was crazy. And I think the information era was capped with the rise of social media. And like Facebook specifically. When Facebook came about, it wasn't just information about the world or fun facts. It was information about people. And information about people was like really interesting and had gossip connected to it and had like voyeurism connected to it. It was just like this fascinating world that mirrored celebrity culture and that then ushered in the next era, which was the attention era. And the attention era was kind of brought all the way forward by someone like Mr. Beast Jimmy, who was like, here's human psychology and here's how these algorithms, what they favor, what are the incentives of the Internet, and let's push that forward. And that's like we got to that point with the meta of YouTube being all about information and attention. And I think this next era that we're in and the biggest shift that's happened in YouTube over the past year has been a shift towards perspectives. Information and attention, void of perspective is just completely uninteresting. And I think that actually wasn't the case. If you talk about history youtubers, we were talking to this car creator, James Pumphrey, who used to work at Donut Media, and he was telling us at Donut they could get a million views of the entire history of Volkswagen. But he can't do that anymore. He has to add perspective to it. The title has to be or How.
- [189:42]
Jordi
Volkswagen why Volkswagen is cooked.
- [189:44]
Guest Creator
Yeah. Or How Volkswagen turned their back on us.
- [189:47]
Colin
Right.
- [189:48]
Guest Creator
And that has perspective suggested. And I think we can access information now very easily through LLMs, through search through anything. We can actually also access, like attention driving things, meaning like scrolling TikTok captures my attention. I don't think I'll like, remember any of it, or it just won't matter, but it can fill my need for something to capture my attention. But perspective, I think, is the thing that makes it stick in your brain of like, I'm coming to these guys, to Jordi and John for their perspective. I can get this information at other places. And so I think we actually saw that quite a bit on YouTube where the Mr. Beastification, the kind of like big idea that drives a ton of attention, is like, still kind of interesting, but it's not as interesting as it used to be.
- [190:35]
John
It's in a growth area.
- [190:36]
Guest Creator
Someone like Marques Brownlee, who does the smart phone Awards, you're like dying for his perspective on what was the best phone of the year. And I think he has a lot of longevity because his content is rooted in perspective. Emily Sundberg's another great example. That's perspective. And so I think perspective has always mattered, but it feels like that era has really been pushed.
- [190:56]
John
Using Marques as an example, do you think that which offers more perspective or waveform Podcast. His podcast, where he can kind of riff. It's unscripted versus a review where he has the requirements to tell you the price, the value, the specs. Does he have more. A longer leash to give more perspective in the unscripted format, or is there an equal amount of perspective because he is who he is and he brings his perspective everywhere.
- [191:25]
Guest Creator
I think Marques in the face to camera is the. Is the best perspective. Marques and people had problems with that like last year with humane.
- [191:34]
John
Oh yeah.
- [191:35]
Guest Creator
People felt like his perspective carried so much weight that it could bankrupt a company.
- [191:40]
Guest Creator 2
Same with Fisker.
- [191:41]
Guest Creator
Same with Fisker, the car. But I think that also goes to show, like how much his perspective matters and how much someone like that.
- [191:50]
Guest Creator 2
I remember he said, he said a bad. He told us a bad review doesn't tank a company. A bad product tanks a company.
- [191:57]
Scott Kapoor
Of course.
- [191:57]
Guest Creator
But yeah, I mean, all that to say again, like, I think if you're.
- [192:00]
Jordi
I would be wearing a humane pin.
- [192:02]
Guest Creator 2
If it were not for the review.
- [192:04]
John
I mean, it can accelerate.
- [192:07]
Guest Creator
Even if you look at like Ryan Trahan and like his videos, they. They lead with like something like a really fun idea of like, I stayed in one star hotels or something. But then his perspective gets layered within 30 seconds on top where he's like, his, his job is to leave a five star review at this one star place because, like he wants to find the good in the world. And even that is like perspective.
- [192:27]
John
Yeah, that's right.
- [192:27]
Guest Creator
And so I think POV is like, that's the era we're in on the Internet. Like, if you're just delivering me information.
- [192:36]
Guest Creator 2
And POV can be style, it can be tone. Like, I think you guys are a great example. There are a lot of people talking about what you're talking about. They're not talking about it in the style that you're talking about it with the same tone.
- [192:46]
John
Yeah. When I think about the Mr. Beast copy cats, I think like, there's distinctly a lack of perspective and a lack of view. It is just like, okay, yes, like if Mr. Beast does this and you clone it and rotate that piece like you have a slight iteration, that's enough to get the views. But it wasn't actually something that was like inspired or trying to push me.
- [193:05]
Guest Creator
You can navigate how to get views right now. Like, you can navigate how to get attention on the Internet. If you study, if you study it enough, you know, you can navigate, but it doesn't mean people remember you.
- [193:15]
John
What's the state of the thumbnail industry? The thumbnail sub industry?
- [193:19]
Jordi
Well, on that note, I feel like there's this emergence of the creator. With short form video being so powerful for discovery, there's an emergence of a content creator that might have 200,000 followers and no viable business or even path to a viable business, because they have a bit that they run that's really funny. And so they can get attention in a certain audience, but then like the pathway to monetizing it. You see this with like certain kind of accounts on Instagram, where it's like your pathway to monetizing is like, online casino advertising.
- [193:54]
Guest Creator
Exactly.
- [193:55]
Jordi
And so that's kind of like. That's kind of like UBI for people that are funny online. It's just like, you can.
- [194:00]
Guest Creator
That is a hilarious take. That's unbelievable. And I. I totally agree with you, but that's.
- [194:06]
Jordi
And I actually somewhat appreciate it because there's this guy that.
- [194:09]
John
There's a guy who's actually sponsored by steak, and he's hilarious.
- [194:11]
Jordi
There's a guy who is so funny, I just want him to. It's like, get a better sponsor agent, something. Well, I don't care what sponsor he has. Really. I'm not. I'm not. I don't. I don't buy products based on, like, some guy that I see for 10 seconds, but I do. Yeah. This, like, sort of UBI for people that are funny online right now is like gambling and it's dark, but at the same time, there's a dark side to it. But it is.
- [194:40]
Guest Creator
What's the light side to it? Just that people are making money.
- [194:43]
Jordi
Well, the light side is that on a personal level, I get enjoyment out of it. And I'm like, he's providing it. It's effectively a free market.
- [194:49]
John
I mean, the same thing happened with sports podcasting. There was like a massive bubble in sportscasting. The white pill is that, like, there's a lot of people that have jobs podcasting, and that's a pretty fun job.
- [194:59]
Guest Creator
The Chinese microdramas, right? Like, Chinese microdramas. Like, real short. Actually, on the drive over here, saw ads for real short. Like, big billboards for real short. If you're unfamiliar, it's like, it's if soap operas were on TikTok, you know, it's a swipeable feed.
- [195:13]
Jordi
But, yeah, the crazy thing is those have been so successful, and it's, to me, very much the same idea as Katzenberg's, like, short, short form play.
- [195:22]
Guest Creator
No, it's not the same idea. That was when we went into. I never forget walking into the Quibi pitch meeting where they invited a bunch of creators to come pitch shows. When we walked into their office, like, the play, there was like, spend a ton of money on content. Like, they were like, we have a Spielberg movie and an Aaron Sorkin movie.
- [195:39]
Guest Creator 2
It's like $100,000aminute for some show.
- [195:43]
John
And what is short? It's higher than TikTok, right?
- [195:46]
Guest Creator
Yeah. I don't want to totally discount what you said. Right, Jordy? That, like, what they said in the meeting. I Remember, I'll never forget it. They were like, I was like, when does someone watch this? And they said, when someone is waiting for the bathroom, like in line for the bathroom, they'll flip it on and watch like a seven minute increment of a show. And I remember being like, but people watch, people look at Instagram during that time. Like, how are you gonna pull me into.
- [196:10]
Jordi
Well, so yeah, I guess it's hyper. It's hyper, it's hyper competitive for that time. But, but I think there's something to be said for content that's made in a slow format, which is like, with production. I've been thinking about like fast and slow content. We make fast content from a production standpoint. From a production standpoint, like there's people that make content. John's content on tech historically was slow content. He would spend two, three weeks making a video. You put it out, you'd get a bunch of views. We're the opposite. Very fast. We're making three hours of content a day with like three hours of prep a day. And I think like taking the, taking a form factor, like short form video, and then putting a different type of content through it, which is this more cinematic, highly produced content. It works in the form of like real, real short. Yeah, but they're spending, fundamentally they're spending a lot less.
- [197:09]
Guest Creator
They're spending way less.
- [197:10]
Guest Creator 2
But also they're, they're formulating it in a way where they're earning your attention every 60 to 90 seconds, there is a hook every 60 to 90 seconds to get you to keep watching.
- [197:17]
Guest Creator
You guys know how the economics works?
- [197:19]
John
No.
- [197:19]
Guest Creator
Okay, so how it works is like if you download reelshort or drama box, basically they're spending like typically $200,000 for a 90 minute show, right? And that's cut into like a hundred slices. And what's happening is when you download real short, you're getting like tokens. So it's kind of like robust Roblox money, like Robux, right? So you're getting these tokens and you have to buy more. And the first 11 swipes are free. You go past the 11th, you gotta make a payment. You gotta spend tokens to keep watching. Every swipe, you're spending tokens.
- [197:51]
John
Interesting.
- [197:52]
Guest Creator
And we interviewed a director on our show who's directed 20 of these and he is acutely aware of the fact that some of his content has been viewed by 30 million people. And when you're making micropayments, again at.
- [198:05]
Guest Creator 2
That scale, making 30 to 40 bucks.
- [198:07]
Guest Creator
If someone finishes and it can be upwards of 30 to $40 if someone finishes the movie.
- [198:11]
John
Huge.
- [198:11]
Guest Creator
So these, and the max budget is 200,000 to make these. Now the content itself is like, you know, it's not, it's soap opera content. It's not, you know, it all speaks to like the most aggressive, you know, just versions of what people want on the Internet. But the silver lining, the reason I brought this up, the silver lining is that people in Hollywood are working. People who are directors, writers, cinematographers. This is where they're working.
- [198:40]
Guest Creator 2
I mean, it's by no means a perfect model in terms of like compensating actors and people working, but they are working.
- [198:45]
John
Yeah.
- [198:46]
Guest Creator 2
There are opportunities.
- [198:47]
Guest Creator
So I can unlock coins right now on realshow. If you want to read, if you want to read some of the titles.
- [198:51]
John
On realshow, I'll read a bunch. American Sniper, the last round. Okay. I was actually gonna ask like, you know, is it all romantasy romance?
- [198:57]
Guest Creator
I think it's mostly romance.
- [198:58]
John
American Sniper. That's the last round. That does seem like something I would watch. I'm down for that. Step aside. I'm the king of capital. That also seems directly targeted.
- [199:08]
Jordi
John gets shot.
- [199:09]
John
You prep this for me?
- [199:10]
Guest Creator
It might have a geotag on it.
- [199:11]
Jordi
It seems like it does.
- [199:13]
Guest Creator 2
Maybe John, you get into acting in these?
- [199:15]
John
Yeah, some of these are a little scantily clad. Maybe this Christmas, the billionaire married a homeless girl. Didn't China just, they just banned that.
- [199:28]
Guest Creator
Yeah, they did.
- [199:28]
John
That's right.
- [199:28]
Jordi
And the format, there was a ton of, there's, there's a very popular type like format for a show.
- [199:36]
John
Basically the Hallmark movie.
- [199:38]
Jordi
Yeah, like very successful guy marries or falls in love with like a very normal, a normal woman. And apparently China is like, has a top down mandate to like not do this kind of content because it's creating unrealistic expectations.
- [199:59]
John
Oh, I'll be, I will definitely just be randomly plucked from obscurity by a billionaire.
- [200:03]
Guest Creator
Interesting.
- [200:04]
John
And, and it's like, well like statistically that's not gonna happen. So maybe like marry your high school crush and have kids and build a family instead of just waiting around for a billionaire to come pluck you out of obscurity because you've seen so many of those stories, which is like a fascinating process problem to have.
- [200:19]
Guest Creator 2
Yeah. Amazing that stories are that popular that.
- [200:21]
John
It'S gotten to that point. Oh, totally, totally. Yeah, I, I, I do wonder, like, I mean we've had so many discussions about the like the downstream effects of TikTok iFication or YouTube or whatever. Mr. Beastification. I. I wonder if we're going to be having that discussion in a year or two because it feels like people are just learning what real short even is. Yeah, for sure.
- [200:40]
Guest Creator
It's early. It's early.
- [200:41]
John
Obviously the business is working now.
- [200:44]
Colin
What.
- [200:44]
John
What happened to a generation raised on it?
- [200:46]
Colin
Is it good?
- [200:47]
John
Is it bad? I don't know.
- [200:48]
Guest Creator
The last thing I'll say, just to close the loop on what I think big metas that have changed on YouTube. Another one is length of content and serialization, meaning creators are approaching YouTube as if they're making a show like a series that you can binge. Cleo Abrams, a great example, huge if true, is a show. It has a format to it. It has an intro card that could, similar to Mark Robert, be pulled onto Netflix as an explainer show that explains cool science formats. And from the era. Even when I was watching you as a YouTuber, we all weren't looking. We knew we were making content that fit a format that should have been repeatable. If we were at our best, we weren't making a show. And now people are making a show. And a YouTube channel is a TV show largely because it's watched on connected TVs. Right. Even our show, over 50% of our watch time comes from a connected TV and our average view duration is 48 minutes on TVs. But you look at like Mark Robert. Thank you guys.
- [201:46]
Jordi
Hit the gong. Hit the gong.
- [201:47]
John
Hit the gong for that. For the obscure YouTube metric that only the real ones recognize. Hit the gong.
- [201:54]
Jordi
Whoa. See that? That's how you hit the gong.
- [201:57]
John
That's a great hit.
- [201:58]
Jordi
That was the hit of the day. Hit of the day.
- [202:00]
Guest Creator
Yeah. But like Michelle Carre, challenged, accepted. If you guys are unfamiliar with that, it's a show about taking on big challenges. She hung out outside of a military airplane, recreated Tom Cruise's stunt. But that's one of many episodes that follow the same format that are 30 plus minutes in length.
- [202:16]
Samir
Yeah.
- [202:17]
John
So help me, help me square that with what I regard as YouTube's sort of organ rejection to overly serialized content. I'll give you an example. Johnny Harris. We're all fans here. Bunch of really great. It is a show, there's a bunch of great content. But then when he goes and does, you know, I'm doing a three part series, it seems like YouTube's like, we don't want your three part series, we don't want your four part series. And it feels like part two is the death knell of a YouTube title and you should never put part three, part four. And they say, hey, we have playlists for you. I don't want to.
- [202:52]
Guest Creator
My suggestion is not doing, you know, part one, part two, part two, three. Although a creator named Preston goes, did an amazing series about building a mini truck for abandoned railroad. That's three parts and it worked. It's great.
- [203:04]
John
But you agree with me that it does count.
- [203:06]
Guest Creator
You should not counter part two in the title.
- [203:08]
Guest Creator 2
It speaks to a packaging problem. Obviously on Netflix, the show has title art.
- [203:15]
John
Yes, Right.
- [203:16]
Guest Creator 2
And that's what gets me into it. That's where I get the recommendation from. And then once you get in, I don't really care what the artwork is for every individual episode.
- [203:22]
John
It's like, it's almost. It would almost be better if you're. If you're doing like a four part series, four 40 minute episodes or something. Just drop a four hour YouTube video. I saw somebody watch a 10 hour video just on Star Wars Episode 1.
- [203:35]
Guest Creator
You've seen that one, right?
- [203:36]
Guest Creator 2
I think you'll see though, UI changes come to YouTube Studio.
- [203:39]
John
So it'll be a UI thing, I think. So that makes sense. Like super chapters almost where it's like. But it needs to live in one place because it feels like if the algorithm even has a bad day and it serves you part three before it serves you part two and you're on part two, you're like, what am I doing? I'm not clicking.
- [203:56]
Guest Creator 2
I know this can seem minor, but they're either testing it or it's rolled out. Where you can now upload 4K thumbnails to YouTube and I think just higher resolution thumbnails.
- [204:07]
John
I think a lot of that is.
- [204:07]
Guest Creator 2
Because now people are sitting and they're watching on their TVs and if it looks like crap when you click on it, they are ushering this move across the platform to be ready for consumers to be sitting on their sofas and.
- [204:19]
John
Choosing what to watch.
- [204:20]
Guest Creator
I'd imagine someone listening would be like, but didn't you just say that anyone could upload to YouTube and anything could happen? This feels like a high lift to make like a show, right? And it is, but these creators have all been on the platform for a decade. So the suggestion for me is that like this is happening if you watch like Hot Ones is a TV show, right? So I think you've seen it. It's happened over a decade, but it is like if you're exploring what is the now of YouTube. That is the now like it is. People are making premium shows that are watched on TV and then the question.
- [204:51]
Guest Creator 2
Is, does Netflix come in and repackage and license those episodes?
- [204:55]
Scott Kapoor
Yeah.
- [204:55]
Guest Creator
Or open the doors to a creator program, which I do think is a very, very realistic path. It's not gonna be anyone can upload, but it's probably gonna happen.
- [205:05]
John
So what's the state of the thumbnail artist today? Is it all AI? Are there people that have graduated from YouTube thumbnail artists and now they're doing Netflix thumbnails? Because I imagine thumbnails on Netflix too, right?
- [205:17]
Guest Creator
Oh, they're insanely important. I mean, every time you. If all of us logged into Netflix right now, we might have different versions of the same thumbnail. No, I mean, I said it last time I was on the show. It's like they're the gatekeepers to viewership. But I think thumbnail artists are more like strategists now than pure, like designers. Right. Because it's more of thinking through the strategy of what will pique someone's curiosity enough to click. I don't think we need to be hyper hyper designed all the time, but there's some really great artists out there. When I think about this, there's a thumbnail that comes to mind which is.
- [205:59]
Jordi
Stuck in your brain.
- [206:00]
Guest Creator
Yeah, it's stuck in my brain. It's a really good thumbnail from a basketball YouTuber named Jesser.
- [206:05]
John
Oh, I know Jesse.
- [206:06]
Guest Creator
And he went to go tour the new LeBron Nike facility. And it's like kind of a similar thumbnail to MrBeast where he's like hanging out of a helicopter and you can see this like gold LeBron statue.
- [206:16]
John
That's iconic.
- [206:17]
Guest Creator
Yeah, it's like a classic two pixels and it has 6.3 million views. But I mean, I don't. I watch some of Jester's videos. I like his like, guess the NBA player videos. Those are awesome. But I looked at that and caught my eye and I clicked it. But what was amazing is that it pays off in the first second you watch it and you're like, oh, yeah, There's a gold LeBron statue and this is a brand new Nike facility.
- [206:37]
John
And so AI could create that thumbnail for someone else. But unless you actually did it.
- [206:42]
Guest Creator 2
Yeah, you gotta do it.
- [206:43]
Guest Creator
But unless you're a Jesser and you pay it off upon hover, because it's also like things autoplay on YouTube. It's not. The hover is a very big deal. That it's why that now you can't clickbait someone because a thumbnail is proven over a hover before you even click. It's like, did this really happen? What does the video look like?
- [207:02]
John
Yeah, yeah, yeah.
- [207:03]
Guest Creator
And the fact that he's standing there, that's a strategic of being like, if I'm gonna make this thumbnail and design it like this, it can't be so hyperbolic. It has to be pretty real that.
- [207:13]
Guest Creator 2
You gotta set the expectation with the thumbnail and then match it.
- [207:16]
Scott Kapoor
Right.
- [207:17]
Guest Creator 2
The bird watching doc Listers. The thumbnail looks like a movie. It's like very lo fi, but there's text on it that reads very much like a movie that was shown at Sundance or something. And then you click on it and you're like, I had no idea this was gonna be so incredible.
- [207:29]
Guest Creator
There's a very distinct smell in here. It's not a bad smell, it's a good smell, but it's a very distinct smell.
- [207:34]
Jordi
People say that it smells like rubber.
- [207:36]
Scott Kapoor
Rubber.
- [207:37]
Guest Creator
I would say if anybody in this room has ever been to India, it smells like rubber. When you get off the plane in India, this is kind of what it smells like.
- [207:46]
Jordi
Let's go.
- [207:46]
John
So, you know, there's someone in the technology world that just got fired for saying that exact thing. No, really? This is a whole drama.
- [207:53]
Scott Kapoor
Who?
- [207:54]
Guest Creator 2
Very recently.
- [207:55]
John
Yeah. The CTO of Klein was. Was talking about a hackathon and it was. It was a lot of men in the room and went all back and forth and it turned into.
- [208:03]
Guest Creator
Oh, that's a different thing. I'm talking about like a childhood nostalgia for me of landing in the. Yeah, that. Should I. Go ahead. George.
- [208:12]
Jordi
As much as I would love to continue this conversation, the good news is we are.
- [208:16]
John
Yes, we are. It's true.
- [208:18]
Scott Kapoor
Yeah.
- [208:18]
Jordi
I'm not sure when it's going to release, but we should wrap up.
- [208:21]
Guest Creator
Slow content.
- [208:22]
Jordi
Slow content, Slow content. Slow content. Slow. But thank you so much for coming on.
- [208:27]
Guest Creator
Thanks for having us.
- [208:27]
Jordi
Close it out. And we'll be back tomorrow.
- [208:30]
John
We'll be back tomorrow. Thank you for tuning in today.
- [208:32]
Jordi
We'll be in properly dressed for the season.
- [208:36]
John
We will, finally.
- [208:38]
Jordi
So thank you for tuning in with us today.
- [208:40]
John
Goodbye.
- [208:40]
Jordi
We love you. See you tomorrow.
- [208:41]
John
Goodbye.
- [208:42]
Guest Creator
See you guys.
- [208:42]
Jordi
Cheers.