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- [00:01]
Jordy
You're watching Christmas tv.
- [00:03]
Ben
We are cozy, maxing.
- [00:06]
Jordy
It's rainy in Hollywood today and we decided to put on the fireplace, make the light a little bit warmer, kind of enjoy the warmth. And, you know, I genuinely get depressed when it rains. Like, it actually affects my mood. But putting on some warm lighting, a nice hearth, really has changed my mood.
- [00:25]
Ben
And I'm having a ceiling fireplace.
- [00:28]
Jordy
I'm having a great time today already. And so if it's a little bit cold, wherever you are, I highly recommend throwing on the fireplace. If you can get real logs, that's great.
- [00:38]
Ben
If not, you can get a projector.
- [00:40]
Jordy
90 inch projector works too, I guess. But it is Tuesday, October 14, 2025. We are live from the TVPN Ultradome, the temple of technology, the fortress of finance, the capital. So today we gotta talk about Zoomer. Zoomergate. Zoomer is a loved poster on this show. We've highlighted his post many times. He a deranged trader who has a lot of fun.
- [01:03]
Ben
He was heavily promoting the use of leverage right up until Liberation Day 2 Friday.
- [01:10]
Jordy
Then he got wiped.
- [01:11]
Henry Stern
Did he get wiped?
- [01:12]
Ben
I don't know. I don't know. He's been big into Chinese equities.
- [01:16]
Jordy
Yeah. Either way, he's been having fun on the timeline, posting a lot. He says, say hello to 50x leverage. More like say hello to God. Nobody is an atheist with 50x leverage.
- [01:25]
Ben
I love that. No matter how much pushback he gets.
- [01:28]
Jordy
Yeah. How much he just doubles down.
- [01:30]
Ben
Doubles down.
- [01:30]
Jordy
Yeah.
- [01:32]
Ben
Doubles down.
- [01:32]
Jordy
Well, Zoomer, if you're gonna be riskler, you gotta save time, you gotta save money, you gotta go to ramp.com easy to use, corporate cards, bail payments, accounting, and a whole lot more all in one place. Zoomers had a number of posts do very well recently. Like mega, mega viral, totally breaking containment, defining what's going on on the Internet that day. And Zoomer says, my tweet about Steve Jobs almost. About Eve Jobs almost outperformed the actual Eve Jobs tweet. Eve Jobs tweet Lowell. And so he's been going viral for posting Steve Jobs daughter a picture of her and then posting meta commentary about how much he got paid to make that post. It was a very odd back and forth and it's frustrated a lot of people. But I have a hot take. We're gonna break it down. We'll discuss it. And so Zoomer, it all comes down to like, what is the value of your account? Zoomer went to some website and said, my Twitter account is estimate be worth $3 million. And that's not what accounts trade for. That's not how that works. But I mean, certainly in that experience.
- [02:36]
Ben
Twitter accounts are basically worthless except for the person that creates it.
- [02:40]
Jordy
Yes.
- [02:42]
Ben
And then it has some intangible value. It can increase the value of whatever you're working on, whatever the work it is that you do.
- [02:52]
Jordy
And that's sort of true across the board, across all social media accounts, especially if it's tied to an individual person or personality. But Even the large YouTube accounts that have more of a corporate brand, like, I'm thinking of, like, Donut Media, for example, like, that was eventually bought by private equity and some of the talent rolled off and then they changed. They changed hands. Like, it's still, like, hard to just build a single account on a social media platform into, like, the millions of dollars. Like, it's certainly not easy. But we do love Zoomer and we're wishing him the best during this tumultuous time, because everyone's going back and forth.
- [03:29]
Ben
Yeah. I think people take. Are overly serious when he is. When I view him as an entertainer.
- [03:36]
Jordy
Exactly.
- [03:38]
Ben
Somebody at a dive bar. That's getting a little wild, but it adds to the experience.
- [03:44]
Jordy
Yeah, I completely agree. I've always thought of Twitter as the Internet's dive bar. The drinks have always been cheap. The faucet in the bathroom's always broke. Maybe that's the fail whale. The whole bar's changed.
- [03:58]
Ben
Unreliable. It might be open late one night.
- [04:01]
Jordy
And closed when you expect it to be. It's changed ownership multiple times. It's just a very, you know, it's not as polished as, you know, a Michelin star restaurant or a luxury resort that you might see on other parts of the Internet. It's a little bit messy, but that's why people love it, and that's why people keep coming back. At the end of the day, you grab your little table in the corner. Maybe that's basketball, Twitter teapot or whatever car, Twitter, whatever your little group is. You huddle up and maybe you get in a fight with some other table for a little bit. Bar fights are gonna break out, but at the end of the day, you keep coming back. And so I've kept coming back through multiple eras of Twitter is done or X is over. There was the whole narrative like, Elon won't be able to keep the servers online. He couldn't possibly run a website with only a thousand. With only 1,000 people. And it's like this guy sends rockets to space and build electric cars. I'm pretty sure you can get the database working. Okay, so I never bought that. But there were a number of the advertisers are pulling out or the algorithm is bad. And the algorithm has been bad at various times. There's been plenty of moments where I've been like, man, I'm seeing a lot of just generic junk. But what's interesting is that right now, people are the most mad they've ever been at X. I feel like that's kind of the mood. But I feel like the algorithm's been super fine tuned and maybe that's just the way I'm using it. I'm really good about muting.
- [05:25]
Ben
And then one of the reasons, one of the reasons that people are mad right now is the dive bar. Basically got a new manager, head of product Kida, who was a power user of the platform for years.
- [05:35]
Jordy
Power drinker at the bar, power boozer.
- [05:39]
Ben
He was hitting half an hour.
- [05:40]
Jordy
He was a regular.
- [05:41]
Ben
And he was closing it out.
- [05:42]
Jordy
He was closing it out.
- [05:43]
Ben
And he's been making a number of different changes. One that he posted about that I was excited about was potentially bringing Lynx back in some capacity.
- [05:54]
Jordy
He also did the little. There's little growth hacks that he's done. Where I've been, like, that's totally fine. Like, when you take a screenshot, it replaces the follow button with the X.com just to remind people, hey, this originally appeared on X. If you're gonna share it to instagram, go to x.com and I think that type of growth hack is like, fine. Like, it doesn't bother me at all. It's like, yeah, they need to get their users up. I want more people on the platform. Like, I'm fine with that. And there's been a number of things like that where I've been like, yeah, seems like he's making positive progress on the product side. But the creator payouts are still really hot. Like, very, very hotly debated. Unclear where it goes.
- [06:29]
Ben
Not among us. We would be down to kill them entirely.
- [06:33]
Jordy
Yeah. And what's crazy is that, I mean, I don't know if I got on. So Twitter launched in July of 2006. I'm pretty sure I got on like a year later because I went to college where Biz Stone went to college. One of the founders of Twitter, and that was one of the reasons I went to that college was because I was interested. And I was like, oh, Twitter's a cool company. April 2009 was when you got on, When I joined. Okay, yeah. So, but still, sophomore year of college or something like that very early. But for 17 straight years, basically everyone on the platform posted for free. I guess for 13 years for me, I posted for free July 2023. 17 years later, that's when the first creator revenue sharing program rolled out. And what's interesting is that YouTube has been making creator payouts since 2007, just one year after Twitter launched. YouTube was like, we got to pay these people, we got to pay our creators. And they did this like basically 50, 50 deals. Like 45, 55. But YouTube, the partner program, has been a huge success. Basically you make no money when you're small, but if you can get to a couple hundred thousand subscribers, couple hundred thousand views on a video regularly, you have a formula, you have an audience for like, I talk about this and thing for 10, 20 minutes. People watch it regularly every week. Like, you can quickly start making thousands of dollars and like turn it into a real job. And then you can layer ads on top, which you're obviously intimately familiar with because you've been on the other side of that. And. And there is basically like a middle class of like professional, not, not Mr. Beast level, hundred person organizations. But just like a creator, maybe they have one editor, a couple editors, and they make a decent living just, you know, making YouTube videos. X has never really had that. And it's odd because like the amount of money that you put into a YouTube video is correlated with how many views it gets. Like, if you're like, I'm giving away a Lamborghini, I'm going to drive a lamb. I'm a whistling diesel. I destroyed a Lamborghini. You're like, I got to collect that. It gets a lot of views. Yeah, but X, you can just have a shower thought that is the most brilliant, hilarious, funny banger take and will get 100 million views.
- [08:33]
Ben
For me, I'm not very consistent with posting. I'll just decide I'm going to post today and then I can put up numbers. Posts that will get, I don't know, I could think I could reliably get 500,000 impressions by just spending like 20, 30 minutes really focused on it. Whereas trying to sit down for 20, 30 minutes and try to make a YouTube video that gets 500,000 views almost impossible. Almost impossible even for the top, top, top creators.
- [08:56]
Jordy
Totally, totally.
- [08:57]
Ben
You're like Mr. Beast and you can actually at the scale where you could post a selfie video. But even then, that's not what drives his business.
- [09:03]
Jordy
Yeah, yeah, exactly. And so there's this and then we all.
- [09:06]
Ben
And the other thing that's worth noting is like, there's totally precedent to have a thriving social media platform that doesn't do any creator payouts at all. And that is Instagram, right?
- [09:16]
Jordy
Yeah, totally.
- [09:16]
Ben
Instagram has never. I mean, I shouldn't say never because they've experimented with little things.
- [09:22]
Jordy
I think they do creative payouts.
- [09:23]
Ben
They did some AI companion type things with celebrities. I'm sure they paid them in those situations. But in general, there's always been an incentive to grow an Instagram following so that you could grow a business or partner with brands or there was just a number of ways that you could monetize it indirectly. And I think that that is for low effort platforms, a much healthier way low effort content creation platforms. It's a much healthier. To have the incentive be like, you have to become somebody that is valuable to the world. Not just you have to post the thing that. The thread that gets 5 million impressions. Right. And the worst of the content that I've seen since the monetization, monetization era of X has been the why is no one talking about Marc Andreessen post. And it's like a thread and it's like, cool, but everybody's talking about Mark Andreessen. Like, find somebody on X in tech that doesn't have an opinion on Mark Andreessen. Right? You're not. It's hard to. Hard to find him. And so I think it was healthy. I think if you look back to when this era kicked off, though, I mean, the vibes on X were just terrible. The public perception of X was terrible. And I think it made sense for Elon in that moment to say, like, we need to kind of like rally the army. I'm going to start paying you guys out, but you need to ride with me through this tumultuous time. But it feels like we're back in an era where if you turn creator monetization off today, none of my top 50 favorite posters would really care. Yeah, they'd be like, it's kind of a bummer. I was making a few grand a month. Like, and I'd use that to. I don't know, but more like a.
- [11:08]
Jordy
Couple hundred bucks for. For a lot of the posters that I follow. Like, sure, there's a few people that are in that thousand plus club, but it is rare. Like, you have to be. You have to be taking it pretty seriously. But. But yeah, I mean, in general, for 17 years, no one got paid directly on Twitter and they were fine with it. They monetized by recruiting or finding jobs or pumping their company or just pumping their bags. Like there were a bunch of ways monetize. One of the ways that we monetize by running ads, Restream IO we also stream 2x through Restream 1 livestream, 30 plus destinations, multistream to reach your audience wherever they are. There's also going back to like the Instagram thing with TikTok. They did TikTok and musically they did figure out this.
- [11:48]
Ben
I'm looking back through my creator payout history and it's so funny that the dates are always different. It's like oh yeah, yeah.
- [11:57]
Jordy
It's not like on the first day.
- [11:58]
Ben
Okay, I'm getting a payout for four days here and then the nex, I'm getting it for two weeks and then after that it's like one week and it's just like completely random. So I go from making. Yeah, I guess, I don't know, I probably, I've averaged like roughly probably like $400 per period or whatever. So like $800 a month. Yeah, but it's just one of those things. Like at no point was I thinking I want to post more because I'm going to get paid more.
- [12:29]
Jordy
Yeah.
- [12:30]
Ben
It's just not the incentive for me to use the platform.
- [12:32]
Jordy
Yeah. So I mean it's interesting to look at the history of like how TikTok did it. The founder of Musical Ly came up with this idea of like the dual sided marketplace. I'm sure YouTube was aware of this too. But basically they put a bunch of money from ads in a fund and then they would just pay you out based on views. But it wasn't like they were actually showing ads directly in front of your content. YouTube's a lot better than that. A lot better than that. Like if you make a video like the top 25 best credit cards, they will be running ads on credit cards in those videos and you can get, you can make thousands of dollars just from like 10,000 views or something because it's super high CPM and it's targeted to the individual video. Now in an endless scrolling feed, you can't do that because you don't know where the ad was relative to the particular post. And it's the same thing on X. So if you post some banger post and there's an ad right above it or below it, you don't know if that ad is attributable to that person. So you kind of just need to create this creator payout pool and then just divvy it up based on impressions or Views, which is a lot of harder to actually assess, you know, how much people want. And also the pool isn't all that big because X doesn't even advertise. It doesn't even monetize that much through ads. And so there's just a lot of differences there. So I've always kind of gone back to that analogy of the dive bar and I've just kind of thought that the creator monetization, I don't really care if it's messy. I think it's kind of fun if it's messy.
- [13:57]
Ben
I mean, we have to go back to one of my most liked posts ever. Elon, unhooking your bra. Wow. Your creator payout is going to be huge next month.
- [14:09]
Jordy
That's one of your biggest.
- [14:11]
Ben
The most liked is actually Ashley St. Clair liking that post.
- [14:16]
Jordy
And you said real. That's ridiculous. But yeah, I mean, I've always enjoyed that these random serendipitous moments can happen on X. Like Elon responding to a random message with a crying emoji. It feels like when the chef comes out and goes around to dinner tables to chat with the guests about the food, Elon comes around and just leaves the crying emoji over here. It feels like he's on the app in a much different way than Zuck on his owner walking around.
- [14:43]
Ben
A shot for you.
- [14:44]
Jordy
Exactly.
- [14:44]
Ben
You get a round of shots for this table.
- [14:48]
Jordy
Exactly, exactly. And so I actually like that. I think it'd be very funny if elon just dropped $1,000 on this person. $200 on this person. It was no rhyme or reason whatsoever. Chaos. I think that actually makes it kind of fun. It feel putting a slot machine in the corner of the dive bar. You know, some, some patrons are just going to throw a quarter in every once in a while just to feel something.
- [15:10]
Ben
So yeah, and I, and I think this, where we slightly disagree. I just think it's. It's enough to just go around, drop the, like drop a repost drop. Because ultimately people come to X for attention.
- [15:23]
Jordy
Yeah.
- [15:23]
Ben
Like learn about the world to get attention.
- [15:26]
Jordy
Exactly. Well, it'll be interesting to see if we see any like, changes to the monetization structure of X or the creator payout. People are certainly. There is a big group of creators like this is very real. There's a big group of creators that are just saying it has to be more regular. It has to be easier to understand how the creator payouts. They're pushing for a YouTube transparency partner program where it's very, very clear that if you get this audience this many views, you will get this much money on a regular basis.
- [15:59]
Ben
And the other thing I think people forget is that the creator payouts were initially meant to be paid out a percentage of the subscript. Paid subscribers. Yeah, that goes in the paid subscriptions. That was what was creating the pool for potential payouts. And so what? The accounts that are angry and post and generally the accounts that are angry at creator payouts are angry because they're slop farming and their content is just not good. And they're specifically making the content to make money.
- [16:28]
Jordy
Yep.
- [16:29]
Ben
And it's fair game. It's capitalism, it's free market. They're allowed. They're allowed to go and do this, but they're not getting engagement from verified, like, users for the most part. Right. They're getting engagement on these posts where they get a lot of impressions and get a lot of likes. But it's from like, I wouldn't go so far as to say bots, but it's like the lowest value people on the platform.
- [16:50]
Jordy
I mean, the same thing happens on YouTube. Like, you can, like, there are channels out there that make get millions and millions of views with just complete clickbait. There was one channel that would just. It was like Elon Musk News or something. And they would just post entirely fake videos about Elon Musk launching an iPhone competitor. And it was like the Tesla pie phone. It'd be like, we're reviewing it today. We're breaking it down. Here's the phone that he launched, Elon. They did one that was like, elon Musk just launched a nuclear reactor. It's live, he built it, it's generating power. And Elon had like, never tweeted about this and is in fact a solar maxi. He doesn't even like nuclear that much. And they would just put up a video being like, it would just be B roll of Elon, like moving around, dancing, talking. And then over it, they would just have like this fake script saying that Elon had shipped a nuclear reactor and solved fusion or whatever. And it would get millions and millions of views with people who just like, did not understand the truth or anything of the news. And so of course that's gonna monetize way, way worse.
- [17:47]
Ben
This is the number one thing that pisses us off on YouTube is when you're watching a car video and there's a. And you click on it only to realize that it's like some fake concept car that wasn't put out by Porsche or Ferrari and it's just somebody Hallucinating with their chatgpt.
- [18:05]
Jordy
Well, speaking of concept cars, we got to go deeper in the deck and pull up the video. The picture from Mercedes. I think this is real. I don't think this is AI. I saw this on a couple different auto blogs. Newly revealed Mercedes vision, iconic channels, the legendary Gullwing.
- [18:23]
Ben
No way.
- [18:24]
Jordy
And it's your first look at the next S Class.
- [18:26]
Ben
Is that an ev?
- [18:28]
Jordy
It's. No, I think it's gonna be both. But you can scroll through these images and look at this thing. Look at the back, Jordy. The back is insane. Imagine bombing around in this. Obviously this is like a concept car, but it's still cool and I hope it's real.
- [18:45]
Ben
No, I was right. A statement on the future of design language for Mercedes EVs. This looks like kind of Jaguar coated a little bit, you know.
- [18:55]
Jordy
What do you think overall? Yeah, it does feel like it's a little bit. It's a little bit blocky, like, big front grill like Jaguar, but still maybe a little bit.
- [19:05]
Ben
This view looks better than the existing GT series.
- [19:11]
Jordy
A little bit longer, a little bit sleek.
- [19:12]
Ben
Little bit longer.
- [19:13]
Jordy
Yeah, I think it's pretty good.
- [19:15]
Ben
It's riding a little bit lower even. I think it looks great. I think the grill on the front looks a little bit nasty, but especially considering it's a.
- [19:24]
Jordy
It's a concept car. It looks. Yeah, it's a little wild, but a little odd. Whatever it chooses to build, they should do it with cognition. The makers of Devon, the AI software engineer, crush your backlog, Nikita, with your personal AI engineering team. We'd love to see it.
- [19:39]
Ben
It's not going to help right now. Nikita is at war.
- [19:43]
Jordy
Zoomer also had a post here. He said, this is going to be good. And he is quoting Colossus magazine. Jeremy Stern has written a lengthy profile of Josh Kushner, Thrive Capital and the American Dream.
- [19:58]
Ben
Okay, before we get into that. Yes, I think we need to address the goon wars.
- [20:03]
Jordy
Oh, sure.
- [20:04]
Ben
Sam Altman posted two hours ago. He said, we made ChatGPT pretty restrictive to make sure we were being careful with mental health issues. We realized this made it less useful, enjoyable to many users who had no mental health problems. But given the seriousness of the issue, we wanted to get this right now that we have been able to mitigate the serious mental health issues and have new tools. It's wild that he's just like, job's finished. Well, yeah, it's wild to basically say to just fully accept, like, yeah, there were serious mental health issues, but bold. He said, we're gonna be able to.
- [20:39]
Jordy
Well, we've seen more examples of the one shotting getting in, stuck in some hole. So maybe they did solve that. I don't know. Like we.
- [20:46]
Ben
Oh, it's totally possible. When these issues were popping up, it's like, okay, this person was 7,000 prompts deep.
- [20:51]
Jordy
That was pretty easy to just be like, if more than a thousand prompts deep, send a message. Hey, touch grass. Like take a breather.
- [20:59]
Ben
Yeah, just end the. Just say like, if you send another message, this chat will be ended.
- [21:03]
Jordy
Yeah, that doesn't seem like technically complicated to implement.
- [21:05]
Ben
So Sam says in a few weeks we plan to put out a new version of ChatGPT that allows people to have a personality that behaves more like what People liked about 4.0. If you want your ChatGPT to respond in a very human like way, or use a ton of emoji or act like a friend, ChatGPT should do it, but only if you want it not because we are usage maxing. In December, as we roll out age gating more fully and as part of our treat adult users like adults principle, we will allow even more like erotica for verified adults. And Doug over at Semianalysis says the goon wars have begun. The entire porn industry is about 100 billion, which can fund a few gigawatts. So I think that we always thought that AI wouldn't go there.
- [21:54]
Jordy
Elon counter positioning thing.
- [21:56]
Ben
Yeah, it was a smart, you know, this is what we said. It's very possible that grok, if they were able to figure out the erotica product side, that they would be able to take that product to a really meaningful run rate. Very hard to assess, like what percentage of GROK users or power users of the companion functionality. But either way, this kind of thing was already happening with OpenAI. People were falling in love with OpenAI. They were getting married to not, not, not OpenAI but ChatGPT. I got married to OpenAI. No, people were, you know, proposing to ChatGPT. Right. People were developing serious romantic relationships with the bot. And of course now chatgpt. Great, great catch. John just slid away in the swivel chair to catch.
- [22:49]
Jordy
Love to see it putting on a clinic. Well, if you want to design something that's not erotic, go to figma.com. think bigger, build faster. Figma helps design and development teams build great products together. Get started for free.
- [23:04]
Ben
Touch figma.
- [23:05]
Jordy
Everyone touch figma. Yeah, if you're 7,000 prompts deep, maybe something in other news. Yeah. What is your actual final take on this one? Hundred billion dollars. That's the entire adult industry.
- [23:20]
Ben
I think that a large percentage of the people that will pay subscription fee to ChatGPT as just everyday consumers will be people that develop like serious emotional connections. Not necessarily adult level, but serious emotional connections.
- [23:40]
Jordy
Yeah, I mean the steel man here is like, treat adult users like adults principle. Like, I have not tried to generate erotica, but I've definitely gotten flagged for like weird reasons being like, no, you can't make this person into a bodybuilder or whatever. For some reason, like they don't want. Those muscles are too big. Like this is horny now. And I'm like, no. Like, it's actually just a joke. And so I would be, I would actually be happy to like kind of like age verify and just allow it to be like a little bit more lenient with me and give me like the benefit of the doubt. But it does seem like, it does seem like the, like the PR backlash from some of this stuff is going to be a little wild. Like, and there's just been so many tech companies that have just said like, hey, yeah, like we're just Apple famously like drew the line. Google.
- [24:32]
Ben
Well, the other side here is it's not like Google, if you search for Bob, Google doesn't say like you can't search this.
- [24:40]
Jordy
Sure, sure, sure. Yeah, I think the like just, just mirroring. There's immense power in mirroring what people are already comfortable with morally. And so what I would do is I would just say, like, we're bringing ChatGPT in line with what you expect on YouTube now. Are there some graphic videos on YouTube of 360? No scopes with, you know, visually like distinct blood. Like, yes, there is R rated content on YouTube. You can watch R rated content of a Tarantino film clip. You can watch a Call of Duty montage that is gory and maybe not suitable for children, but it's not a place for true adult content and it doesn't exist.
- [25:29]
Ben
360, no scope compilations when you were four. Yeah, from a young age it made.
- [25:34]
Jordy
Me who I am, turned me into a man. But Instagram apparently is doing this too. There was an article in the Wall Street Journal about this, how they're using the nomenclature from filmmaking now, saying that we will go up to PG13 or you will be able to pick. And I feel like even though movies are less popular than social media, certainly.
- [25:56]
Ben
In this of the table.
- [26:00]
Jordy
It'S very useful to use the G, PG, PG 13, R rated, X rated like nomenclature just because everyone knows what that means even though it's like a I'll know it when I see it type of rating, that's done by the, not the aarp. There's some, there's some governing board that literally watches every movie and says like, this is R rated. Because we saw, we heard like three cuss words and like, whatever.
- [26:24]
Ben
Yeah. I mean, here's the thing. When I see this announcement, I'm not entirely surprised. Even though I didn't think they would explicitly go there. Yeah, I didn't think they would. I think that I didn't expect to see Sam type the words erotica in a product update.
- [26:41]
Jordy
Totally post.
- [26:42]
Ben
Right. Didn't expect it makes sense. From a business standpoint, I don't think they should expect applause. I don't think anybody should be, you know, I don't think opening eye investors are going to be sitting around being like, I, I'm proud that OpenAI is going into this. But purely from a business standpoint, it makes sense.
- [27:01]
Jordy
Yes.
- [27:02]
Ben
And the other thing is, I expect that they will. The key difference between Xai and OpenAI is that OpenAI will not use this adult content in the promotion of ChatGPT. Right, sure. Whereas Elon was very forward with promoting it.
- [27:20]
Jordy
Yeah. I don't like talking about this, all this adult content. I like talking about compliance, automating compliance with Vanta.com, manage risk, prove trust continuously. Vanta's trust management platform is as clean as a whistle. It takes the manual work out of your security and compliance process and replaces it with continuous automation. It'll make your family proud. Do you think in a, in a year we will look back at ChatGPT as a place that's R rated, like euphoria level or HBO level or a succession level, like adult themes and adult content or like X level, like not, not like X rated level? I mean full adult content like you would not see on hbo beyond what's available on hbo.
- [28:04]
Ben
I'm sure it will be beyond.
- [28:05]
Jordy
You think so?
- [28:06]
Ben
Yeah.
- [28:06]
Jordy
Okay. That would be a bold step because I feel like, but the whole, but.
- [28:11]
Ben
The whole point is that, is that.
- [28:12]
Jordy
Open AI, all of those companies, we'll go R rated, but we won't go beyond.
- [28:15]
Ben
But ChatGPT is fundamentally a single player experience. Right.
- [28:22]
Jordy
Some of the chassis, you take a screenshot and it's their brand next to the thing that it generated. It's like going to Apple TV and saying there is an adult film on Apple TV right now. I take a picture of the Apple TV and I show you that it's in their score.
- [28:37]
Ben
This kind of content pops up on all the platforms, right?
- [28:41]
Jordy
Well, I don't think so. I think that YouTube and Apple TV very distinctly try and.
- [28:48]
Ben
Yeah, but like Reddit, Reddit is notorious for this, right?
- [28:50]
Jordy
Yes. Yeah, I would put Reddit in a different category. And so, yes, this is a decision to go more Reddit and less YouTube.
- [28:56]
Ben
And OpenAI is trained heavily on Reddit, so maybe that's makes sense. Do you think this, do you think this aligns with OpenAI's mission to ensure that artificial general intelligence benefits all of humanity? Do you think humanity will benefit from everybody having a goon bot in their pocket?
- [29:15]
Jordy
As long as every member of humanity is a shareholder, then they will, then they will profit from it, which will be good. No, I don't know. It depends. There's a ton of, there's a ton of like rough edges and like variability.
- [29:29]
Ben
Here that I'm like holding tie in. The X chat says bear market and morals. Well, in other news, Anthropic. David Sacks is going to war with Anthropic. He quoted one of Anthropic's co founders, Jack Clark, and said Anthropic is running a sophisticated regulatory capture strategy based on fear mongering. It is principally responsible for the state regulatory frenzy that is damaging the startup ecosystem.
- [29:56]
Jordy
Interesting.
- [29:57]
Ben
Not what you want to hear from the AI czar if you're running a US based foundation model lab.
- [30:05]
Jordy
Yeah.
- [30:06]
Ben
Yep. But we'll see how this plays out.
- [30:11]
Jordy
Yeah, you want to hear about graphite if you're the AIs are. That's right, David Sacks. You gotta use this for your code review because it's the age of AI. Graphite helps teams on GitHub ship higher quality software. You can get started for free. Let's go through some of the Jared Kushner news.
- [30:29]
Ben
Josh Kushner.
- [30:31]
Jordy
Josh Kushner. Jared Kushner is also featured in here. Sorry, I was reading Jared Kushner because Tyler posted sending Jared Kushner 25 books on how to prevent AI bubbles from popping, which was an absolute banger. Got a thousand likes. Tyler's been on a tear, but he's not even in a seat. Let's cut. You got to cut to him before he gets back. No. Oh, he was out of his chair. I caught him black.
- [30:58]
Ben
Congrats on your back to back bangers.
- [31:03]
Jordy
1K club, two days in a row. Don't mess it up. If it's not a three peat, just don't show up to work. You're done. Do you feel do you feel sequel pressure now.
- [31:13]
Tyler
I mean, there is a lot of pressure on my, you know, on my shoulders.
- [31:15]
Jordy
Heavy is the head that wears the crown. Tyler, get ready. You've been on a roll. Let's see what your ex crave.
- [31:21]
Ben
I don't know, I see this, I see a couple bangers back to back and I think maybe Tyler doesn't have enough on his plate.
- [31:26]
Jordy
Maybe, maybe we should get him to.
- [31:29]
Tyler
Vibe code something I gotta hit. I think it's 5 million impressions in three months to like. I'm not available for the creator payout yet.
- [31:36]
Jordy
Oh, okay.
- [31:37]
Tyler
So I think I gotta slap it up.
- [31:38]
Jordy
Okay. Yeah, yeah. Why is no one talking about Ilya Sitskever?
- [31:42]
Tyler
I'm never leaving this app.
- [31:44]
Jordy
Yeah, yeah, yeah, just keep posting those.
- [31:47]
Ben
You'll definitely ty in the chat. Says if you cut to someone not on their battle station, they have to wear a part time podcaster.
- [31:54]
Jordy
Thank you.
- [31:54]
Ben
Yeah, really, really phoning it into. So, yeah, let's get into this piece. Jeremy Stern profiled Josh Kushner in Colossus, released today. It's not in print yet. It's going to be in print, right?
- [32:10]
Jordy
Get ready. Subscribe now.
- [32:12]
Ben
The New World.
- [32:15]
Jordy
Where do you want to start?
- [32:16]
Ben
Where should we start? I mean, there's so much in here.
- [32:19]
Jordy
I like this bit about Spotify. So in 2012, Thrive invested $6 million in a growth round of the Stockholm based Spotify out of $150 million fund, an allocation Kushner had regarded as a favor until learning nearly a decade later that Spotify CEO Daniel Ek was in need of exactly 6 million to close the round. He's just like, oh, thank you so much for making room for me. This is amazing. I'm so glad I could get my 6 million in. And Daniel X over there being like, the round would have completely flopped if you hadn't come in. So thank you so much. But there's more to this anecdote. The reason Ek knew he liked Kushner was that a few years earlier, when Spotify was only available in Europe, Ek was notified by an executive that someone in the US had managed to register a fake UK address in order to download the app via the UK App Store. They discovered it was Kushner sitting in the library of HBS Wild.
- [33:23]
Ben
I pulled out some highlights from the piece. It's way too long for us to try to get through entirely, but some background. On November 17, 2023, Kushner was a 38 year old spouse of a supermodel brother and in law of American political royalty. And Founder and CEO of what had very suddenly become one of the most coveted venture capital firms in the world. He was also the grandson of survivors of the Novo Grudos ghetto massacres. Indignant, indigent refugees who over the course of the Cold War, built a New Jersey real estate principality that their son Josh's father expanded into a multi state empire. Before his conviction on felony charges and sentencing to federal prison, and before the White House activities of his older brother Jared put Josh in the crosshairs of a torrid political convulsion of which he wanted no part. So, kinder spirits. Yeah, I mean, ultimately it's this. Josh has put on an absolute masterclass of how to be an icon while being relatively in the shadows. Right. He just sort of like pops his head up in these key moments and yeah, I think when I think about what Josh and the Thrive team is built, it's actually, I mean, it's just like, it's almost unbelievable. Like the story, the story, end to end. By the fall of 2023, Thrive Capital, the New York based investment firm Kushner started 13 years earlier, had become an overnight sensation. In 2010, Thrive's first fund was 5 million and included companies like Kickstarter and GroupMA. By 2023, its eighth fund was 3.3 billion, including a maniacally concentrated $2 billion investment in Stripe at a $50 billion valuation. He's like, here's two thirds of my fund.
- [35:22]
Jordy
This is the Fifth Avenue strategy. Buy Fifth Avenue. He talks about this on Invest like the best.
- [35:27]
Ben
And a $150 million check into OpenAI at a $29 billion valuation. The companies are now valued at 107 and 500 billion respectively. Along the way, Thrives bet on Instagram, Spotify, Warby, Parker Skims, GitHub, Slack, Robinhood and other companies had become conspicuous for being prescient, aesthetic and exquisitely timed among its most vindicated admirers. And for being absurdly priced, momentum chasing and too highly concentrated in dysfunctional businesses with unproven returns among increasingly sheepish critics. So.
- [36:02]
Jordy
I like that they got Jony. I've to give a quote for this piece. Some people just have innately wonderful taste and intuition, said Jony. I've Apple's legendary former chief design officer who's now working with OpenAI on a hardware device. Josh has wonderful taste. I think it bleeds into his product Intuition, which is just fabulous.
- [36:22]
Ben
Another highlight here in 2010. Moreover, the unknown, Kushner's brother, unknown little firm was making a bunch of large but weird sounding claims. For itself like that it was a staged geography and sector agnostic venture firm that would concentrate all its investments in a very small number of companies, that it was not only an investment firm, but also itself a company that had incubated its own companies as well as invested in others. And that it didn't just invest in incubate, but functioned as a service provider, product creator and embedded operational commando unit for founders. By 2023, every self respecting investor on Sandhill Road was also saying such things about themselves. Even as they wondered how a New York firm made up of a handful of kids in their 20s and 30s, many of them with zero experience in venture capital and from the technology Bermuda Triangle of New Jersey had become some of the most desired investors in tech and the ones most closely associated with the otherwise distinctly west coast boom in AI. Of course, Josh had a very untraditional pathway to venture capital. He went to Harvard for undergrad, while at the time Mark Zuckerberg had just dropped out of Facebook. Later he got a job at Goldman Sachs buying distressed debt and then went back to Harvard for his mba. It's a real miracle that he built. Of course I'm joking a little bit, but it's what I appreciate about, what I appreciate about Josh is in many ways he was on, he was on the perfect trajectory to be a venture capitalist and yet he has succeeded beyond what he has succeeded in a way that so many other thousands of people that had the same kind of pathway into the industry by being in the right circles, like being early to a number of these different trends. He succeeded on a scale 100 times greater than and many of the other people that were again had the same kind of like pathway in the industry.
- [38:34]
Jordy
Yeah. My read on it is that a lot of the VCs that started in the same like vintage, that did not become massive institutions, maybe just got caught in the trap of diversification. Like I keep going back to that story of Josh saying he wants to buy fifth Avenue, buy the best asset in the class, be concentrated, build a big allocation. And that takes guts that I think a lot of VCs kind of fell in the trap of like I need to get a bunch of logos from a whole bunch of companies or it's particularly cool, it gets actually higher status to be oh first check in this company or see even if you have a tiny allocation that gets completely diluted down, like you're not actually making as much as many dollars, like if you put 2 billion in stripe at 50 and it goes up to 100, you made $2 billion. Right. Versus you put. Put 200k into some company gets diluted down, you make 50 million. Like you made way less dollars on dollars return. But it's like somehow higher status in venture to be like, yeah, I was like the first check in. And I think Josh has been early in a lot of companies, but I think that he understands the importance of like portfolio concentration, actually getting all the dollars in the companies that matter. And that's like.
- [39:56]
Tyler
Yeah.
- [39:56]
Ben
And I think early on my sense is that there was some like hunting early on, but they were when the fund sizes were very small. And that led to him having the track record and ability to put $2 billion into Stripe out of a $3.3 billion fund.
- [40:14]
Jordy
And also we're just like the Thrive era. The era that Thrive grew in is an era where venture changed pretty dramatically. We were talking about the Intel IPO, raised $6 million. What is your role as a venture capitalist? Deploy $100,000 and then wait for like a year later. And it was like that in the dot com boom. And Google IPO'd pretty early. Even Facebook IPO'd at what, 50 billion. And it was like the biggest IPO of all time. It was in like the.
- [40:43]
Ben
Yeah, there were investments in that era that I'm sure the partners were underwriting it as. I think there's a 70% chance this company IPOs in the next two years. This is why we're investing. And then they became compounders. And over time it looked like, but they distributed.
- [40:59]
Jordy
And so a lot of the funds became RIAs. But Thrive has been able to say, yes, we're investing in a company at 50 billion because we expect it to grow and grow and grow and actually deliver. Like a venture style return or a significant return.
- [41:13]
Ben
I appreciated this exchange between part of the article. The beginning goes into Kushner visiting Rick Rubin in Malibu. And Josh was telling Rick my deepest insecurities that I have these intuitions about things that I cannot explain to anyone. Kushner told Ruben as they sat in his garden overlooking the ocean. Sometimes I see or experience something and it makes sense to me. I fall in love, but I cannot explain why. Like when Thrive invested in Instagram or Spotify or OpenAI, I could not explain to anyone why the products made sense to me. It is my job to learn as much as I can for my team and teach them as much as I can. But often I have to push forward on my intuition alone. Which is why my even deeper insecurity is what if I lose it? Like what if I lose the capacity to feel or experience these things? He's basically having this exchange because of course, Rick Rubin notoriously is just going off of raw intuition and vibes. I think the other. I mean it goes into his entire. His family's crazy history dating back to Europe During World War II, getting out of Europe. But the I think can't be understated how formative it was I think for Josh to go through this sort of right as he was. The quote here. By the time I was in high school, my father had accomplished a tremendous amount. He was deeply impactful in both the business and philanthropic worlds. And then overnight our family were outcasts. The world treated us all one way for the beginning part of my childhood. And then suddenly they treated us very differently. That experience showed me how the world work works and why you should not care too much about what people think. Of course, his father was embroiled in a, you know, wild crisis and ultimately went to prison for a couple years. But I think Josh says elsewhere in the piece that he wouldn't. I forget the line. Exactly. But something like wouldn't wish what he went through on his worst enemy. But at the same time would. Wouldn't is sort of grateful for what kind of turned him into a monster, basically. Very kind monster.
- [43:31]
Jordy
Well, if you want to try and reverse engineer Thrive's returns, dump all that data in Julius and chat with your data and get expert level insights. It's the AI data analyst that works for you. Tyler, what are you thinking about Kushner?
- [43:45]
Tyler
I think there's also underrated. He seems very or appealed.
- [43:49]
Henry Stern
Right.
- [43:50]
Tyler
He has this kind of nonchalance about him.
- [43:52]
Jordy
Yep.
- [43:52]
Tyler
There's a good quote I think that relates to this. It says it's about Andy Golden. He's the Princeton endowment head. He says golden later recalled a Happy hour for VCs in Cambridge in 2010 where he saw a 6 foot 3, emo looking kid in a black cardigan standing apart from the group, staring at the floor. I mean, that is just pure aura.
- [44:11]
Ben
Pure aura. Yeah.
- [44:13]
Jordy
Apparently we're on French TV right now. Thank you for the notification. Send us the link if you can find it. We'd love to see that. Yes, there seems to be somewhat of a correlation or inverse correlation between just how much content and availability, how available you are in your aura. Ilya never does any press.
- [44:36]
Tyler
Yeah, he's very mysterious.
- [44:37]
Jordy
Very mysterious.
- [44:39]
Tyler
The mystery allows people to build this idea of you.
- [44:43]
Jordy
Exactly. You're like, oh yeah. Even when Ilya posted yesterday, like, great. The best day ever. Everyone was like, clearly, this is API.
- [44:51]
Tyler
Like, bubble is gone. I mean, we're gonna keep going.
- [44:53]
Jordy
Yeah, we're safe. And it's like, that's not what it was about at all. He was talking about geopolitics and the end of the Gaza war.
- [45:00]
Ben
But so Rimke in the chat says, we asked for a link And Rimke says, France 2, apparently.
- [45:07]
Jordy
Oh, you just have to go.
- [45:07]
Ben
Just go to France 2.
- [45:09]
Tyler
France 2 is the channel name.
- [45:11]
Ben
Yeah, No, I know.
- [45:11]
Jordy
Go find it. Is there a way to name that or something?
- [45:13]
Ben
We don't have French cable here.
- [45:14]
Jordy
I would love to see.
- [45:15]
Ben
Go sign up. Try to sign up for an account.
- [45:17]
Jordy
Did they translate? Did they subtitles over us? I'm so curious about this. Anyway, while we dig in, this is very nice.
- [45:24]
Tyler
They just have the interview.
- [45:25]
Jordy
Yeah, yeah. But I'm wondering, because they could have put French subtitles over us or they could have dubbed us with 11 labs or something.
- [45:31]
Ben
Ask Lechat how to get access to French cable.
- [45:37]
Jordy
There is more details on how the OpenAI deal came together in this article that are pretty interesting, which you should go read. I feel like I'm allowed to trash investors because I was one for most of my career. Sam Altman said, most investors don't work that hard. They're usually not available for midnight at calls and won't drop everything to fly across the country on short notice to do you a small favor for you the next day. Josh is consistently willing to do all those things. He's incredibly hard working for his companies. He'll do whatever it takes, any amount of time. Nothing is too big an ask during that crazy week where I got fired and rehired. He just put his entire life on hold. He didn't leave his hotel room for 72 hours. He just worked nonstop, very strategically, very effectively to get things back on the rails. Thrive had first gotten involved in OpenAI in early 2022 when they met Altman to discuss a new round they'd been giving. Given a preview of GPT3, the foundation model that preceded ChatGPT, which Kushner reportedly became so obsessed with, he almost seemed haunted by it. Now, that needs to be corrected because GPT3 came out in 2020. So I think they're either talking about GPT 3.5 DaVinci002, which was really popular, or it's just a preview of ChatGPT because investors were getting previews of ChatGPT beforehand and it was like blowing everyone's mind. But it was a really complicated deal and a Lot of people passed basically for the wrong reasons and opinion.
- [46:52]
Ben
So on Kushner's work ethic, he was. We met up earlier this year for coffee, and he was. He was. I had, like, gone to sleep. He was still on the East coast. It was like 2:00am he's texting like, yeah, do you want to, like, I'll see you at, like, 10 or something like that. I'm like, you're on the east coast?
- [47:15]
Jordy
Yeah.
- [47:16]
Ben
It's 2:00am for you. You're going to get to the west coast and be ready for. And so. So that is part of the story, obviously, is just insane, you know, insane work ethic.
- [47:27]
Jordy
Yeah. I seen in the chat, somebody said, we're on France, too. And Taylor says, dang. They released a sequel to France.
- [47:37]
Andrew Ross Sorkin
Tyler's.
- [47:38]
Ben
MVP of the chat, this week. Yeah, sorry, Taylor.
- [47:41]
Jordy
Taylor's been crushing it. Tyler has been struggling to learn French. I thought you studied French. You took French.
- [47:49]
Tyler
I took one. I took two semesters of French. I found it. Yeah, let me. I'll screen share.
- [47:54]
Jordy
Okay. Yeah, yeah, yeah. Let's figure out. I'll keep reading. So OpenAI at the time, was a cap profit subsidiary controlled by a nonprofit board with the mission of safe AGI development. Taking legal precedence over profits, Microsoft's $1 billion 2019 investment gave it a dominant position in OpenAI, with complex revenue sharing agreements and preferential access to the company's technology. That, and the company was reportedly valued at 29 billion while doing a trivial 50 million in revenue. What a ramp from 50 mil to. What are they doing now, like, 10 billion, 12, 20 billion? Something like that. It was all very weird. There was no reason. There was a reason. No other investor submitted a term sheet for that round. Wow. After several conversations with the investment team, however, Kushner marshaled his case. Forget the nonprofit structure and Microsoft and all the red flags, he argued. If you can create this much enterprise value, everything else is solvable. In any case, colleagues recall he kept repeating things like, I saw the future, and this is the one great call. Great, great, great call. Extremely hard. I know some other investors who literally passed on that round because they were like, yeah, like, we talked to our lawyers and they were like, this doesn't make any sense. Or like, we couldn't understand, like, how we were getting it. Like, there were lots of smart people that passed.
- [49:08]
Ben
How early did people feel like ChatGPT was going to be a meaningful threat to Google?
- [49:17]
Jordy
That probably started in, like, March of 23, but, like, November. I mean, people. When ChatGPT, when GPT3 came out in 2020. People were starting to say, like, you could use this to. You could ask it a question. You really had to prompt hack because you couldn't just ask it a question. You had to like, ask it a question for a list of bullet points and put a couple, a couple of just laughing.
- [49:47]
Ben
RIM K is saying it's live now on news. It's on France too. It's on the news. We're trying to find it.
- [49:56]
Jordy
It's on the news. And so Thrive submitted a term sheet 130 million from its main fund at the $29 billion valuation. In November of 2022, OpenAI launched ChatGPT. Within two months, it became the fastest growing consumer app in history. By summer of 2023, Thrive was working on a $90 billion round. And in August, they agreed to anchor 400 million of a $500 million employee tender offer, critical leverage in the exploding war for AI talent against OpenAI's publicly traded competitors. By November 17, 2023, Thrive had committed around $700 million to the company. So pretty, pretty remarkable results. And really just goes to show you that there are certain pitches in venture, like seeing ChatGPT before it launches that you need to really, really, really, really, really swing hard at. And Josh swung at the right pitch at the right time, which is like fantastic and much harder than I think people think. It's so easy now that everyone uses ChatGPT all the time to just be like, oh, yeah, I would have made that deal too.
- [51:04]
Ben
Yeah. And ignoring the FUD and just like dou quadrupling down every single possible.
- [51:12]
Jordy
Yeah. I mean, when that initial round was happening, I was also like. I mean, I wasn't an investor, but I was thinking, like, it just makes a lot of sense. I was looking at the team and I was like, if you just make the bet on like you have the CTO of Stripe, Greg Brockman, you have the former president of Y Combinator, just the resume of the founding team. At that time, everyone was really mid.
- [51:36]
Ben
Curve response was the corporate structure. This isn't a norm, this isn't a C Corp. It's breaking the rules. I don't fund non C corps. Like I'm out.
- [51:46]
Jordy
But just going back to basics of being like the founding team, who's running the company. Are they the best? You know, is this an important category and do I have the best team? It's like, it was hard to make an argument against it at that time, in my opinion, anyway. Should have invested, I guess, but, you know, like doing content Instead, it's more fun. In other news with OpenAI, they did an interview with the Broadcom team and Sam Altman shared a little bit more about the custom chips that they're working on. Before we tell you about that, let me tell you about Fall, the generative media platform for developers. The world's best generative image, video and audio models all in one place. Develop and fine tune models with serverless GPUs and on demand clusters used by.
- [52:32]
Ben
Adobe, Shopify, by Canva, Quora and many more.
- [52:35]
Jordy
So Sam Alban says to zoom out a little bit if you simplify what we do in this whole process, you know, melt sand, run energy through it and get intelligence out the other end. As we realized we were going to need the whole system together to support this, it's just gotten more and more complex. So it turns out Broadcom is also incredible at helping design systems. So we are working together on that entire package. We are able to think from etching the transistors all the way up to the token that comes out when you ask ChatGPT a question. And design the whole system, all of the stuff about the chip, the way we design the racks, the networking between them, how the algorithms that we're using fit the inference chip itself all the way to the end product. And so it feels very much like, like even if they're not, you know, fully like plateau pilled, like there's a lot more research to be done, there's a lot more improvements. Like there are at least pieces of the ChatGPT architecture, pieces of the system, whether that's, you know, 4O level inference or reasoning tokens that should be effectively be baked down onto a chip. And so that's what OpenAI is working on with Broadcom at this point. Stratekeri, Ben Thompson had a great deep dive on OpenAI and Broadcom and sort of laid out the argument for working for them, working together and baking stuff down onto a chip. It's, it's a fun read. You should go check it out. Should we move on?
- [54:02]
Ben
Yep. I was just going to try to figure out what.
- [54:07]
Jordy
Well, while you do that, let me tell you about Turbo Puffer search. Every byte, serverless vector and full text search built from first principles and object storage. Fast 10x cheaper and extremely scalable.
- [54:16]
Ben
Broadcom was a $220 billion company the day that ChatGPT launched. It is now.
- [54:23]
Jordy
Wow.
- [54:23]
Ben
It's almost 1.7 trillion.
- [54:26]
Jordy
Almost a 10x. Wow. Nvidia too. Nvidia was much, much smaller. That might be a 10x as well. Yeah, Wild, wild growth across the entire category. Basically everything has 10x'd in price or something like that. Roughly.
- [54:42]
Ben
Yeah. It's interesting. It'd be interesting to go back and do the math and the VCs. There was some reporting in the Financial Times a couple days ago talking about who actually owns OpenAI. And it would be probably interesting and painful to look back at the investors. How much they invested in OpenAI versus just like market buying, Nvidia and Broadcom and some of the other beneficiaries. Would they have made more money? The OpenAI didn't altimeter do both? Yeah, I'm sure the players like that did both. But OpenAI's expected ownership after the company restructures. Microsoft is going to have about 30%. OpenAI employees are going to have close to 30%. OpenAI, the non profit is going to have 20 to 30%.
- [55:28]
Jordy
But that doesn't mean you shouldn't still donate. If you're thinking about doing some charitable giving this holiday season, consider writing a donation to OpenAI the nonprofit.
- [55:37]
Ben
Prioritize tipping your cap table first.
- [55:40]
Jordy
Yes.
- [55:40]
Ben
And then after that consider donating to OpenAI the nonprofit. But anyways, Microsoft at 30%. OpenAI employees around 30%. OpenAI nonprofit at 20 to 30%. SoftBank about 10%. And the remaining is Thrive, Khosla, MGX and a number of bedrocks in there.
- [56:01]
Jordy
I wonder how accurate that reporting is. It feels like directionally correct.
- [56:05]
Ben
I think it's directionally correct. I wouldn't.
- [56:06]
Jordy
But there's some pretty big error bars on either side. Yeah, but still, I mean you just look at some of these like some of these numbers that we pulled up. It's like, like what was the original OpenAI deal that thrived it? It was at a 27 billion, 130 million. At 29 billion. So 29000. So that initial deal was half a percent of the company. Right. And that was like a whole round. And so that was a very low dilution round even at that time.
- [56:40]
Ben
Yeah. What's notable is looking at this kind of rough cap table. It's just astonishing to end up in a situation where VCs have the lowest ownership out of the employees. A nonprofit, a strategic partner, SoftBank kind of makes sense.
- [56:59]
Jordy
But yeah, it's all hands on deck in the chat trying to find France too. Thank you for everyone's service. It seems like they're making progress using VPNs, all sorts of stuff.
- [57:11]
Ben
Stuff Daniel says what's a good number to tip your investors? 20% of the last round or is that too much? I think more like, like 2% of the last round is feels they'll, they'll feel very appreciated.
- [57:22]
Jordy
But it's got to be delivered in, in a sports car form. It can't just be cash. Let's read this Jeremy Giffon post. Things that seem true about AI today that will probably be laughably wrong in a year. 1 It still seems underrated that ChatGPT has replaced 85% of my Google usage and has become a most used app. That's certainly true for me. The reason we're so upset about Slop is because it's obvious we're all going to love consuming it in two to three years. It's not going to be slop for long. What do you think?
- [57:57]
Ben
Yeah, I mean there's out of the, out of the hundred, you know, maybe, maybe way more than that. Right. Call it a thousand soar videos I've seen one way or another, like 10 of them have genuinely been hilarious.
- [58:13]
Jordy
Yeah.
- [58:14]
Ben
And that is about the same ratio as like the regular Internet. Right. If you see a thousand videos, like yeah, some of them are going to be. But I think already I'm seeing instances where it's not slop. Still using the Sora app. I don't love it, but some of the outputs are.
- [58:40]
Jordy
I like it as a creative tool. I think that if you just view it as a creative tool there's going to be creative uses and stuff. That's amazing. Even if it is a little sloppy. The other lens to view it through is buzzfeed was creating a lot of slop content but with humans and that never really broke through and became something that a lot of people, at least in my world enjoyed. It kind of remained slop forever but as AI generation as a tool like you saw over the weekend, I was having fun in our group chat generating a Sora video, sending it there. I didn't even post it but the result was really funny in the context of our friend group. And so I think Jeremy's right there. Number three, he says many non AI products are being adopted due to economy wide corporate and capital market top down mandates to buy fund AI. A rare reversal of the norm where everyone wants to turn over their existing vendor for the new one. This will have a similar pull forward effect as E commerce during COVID even if AI ends up being way overstated. And so right now some of the booms that we're seeing, some of the ramps in these companies going to 100 million is just that the entire Fortune 500. And we're going to get into this with some of the OpenAI partnerships. The entire Fortune 500 is saying like CEO, you need to have an AI initiative or else you're gone. Like you can't be sitting out AI even if you're, even if you're Walmart, for example, maybe Walmart should get on profound. They could get their brand mentioning ChatGPT. They could reach millions of customers who are using AI to discover new products, brands.
- [60:19]
Ben
So Jeremy continues, by the way, best diff in the chat did send me the video of us on French television.
- [60:28]
Jordy
Nice.
- [60:29]
Ben
I cannot download it because X does not apparently allow you to download DMs. So I asked him to send it to Ben's email so that we can pull it up on the show.
- [60:40]
Jordy
We will work on that.
- [60:41]
Ben
We are working on it.
- [60:43]
Jordy
So Jeremy goes to his specialty, how companies are using AI. He says AI roll ups and vertical AI. I've yet to see any part of a business unit that can reliably have cut cost, cut or revenue grown with AI. That's very interesting because the narrative, we've heard this from a number of private equity folks who are saying like I'm going to buy a company, throw AI on top and cut costs in this division or grow revenue in that division.
- [61:12]
Ben
And even, even soft, even again, software engineers at a company, if maybe they haven't been using AI, you come in and you're bringing like fire to, you know, you're like here, look, it's fire, it's magical fire.
- [61:28]
Jordy
There's something reliable. There's still an art to it.
- [61:32]
Ben
Yeah, here's potentially why you should still be bullish on, on AI roll ups is because you take a bunch of, of smart tech people and you bring them into businesses that haven't historically had a lot of great technology and they just built great software. It's possible to grow businesses faster, be more efficient, things like that, even if AI isn't actually doing the heavy lifting. So when I've talked to a rollup founder and I'm thinking they've pulled together, in this case, they had pulled talent from like five of the best companies in the world, at least from a talent density standpoint. And they're working in these categories, I won't name it because I'll dox the company, but they're working in a category that never in history had super talented engineers working on it. And so they're probably going to do really well. Even if again, it's not like integrating an LLM into The workflow that's actually doing that heavy lift. Lifting.
- [62:29]
Jordy
Yeah, so, yeah, I mean that's.
- [62:31]
Ben
It's possible that like. Yeah.
- [62:33]
Jordy
He says companies can ship a lot more software quickly. Complexity of the build out is no longer a moat, which I think is interesting revenue velocity.
- [62:41]
Ben
Yeah, but. So the only thing is this kind of contradicts the.
- [62:45]
Jordy
No, no, no. So, so one is, is it's hard to just go into a business and say, no matter what your business is, I know that I can come in and drop AI into your manufacturing process or your customer support department or your finance operations department or your sales department and immediately see a result on cutting costs and increasing revenue. Like it's not a reliable playbook. Every company.
- [63:13]
Ben
Yeah, but I'm just saying, he's saying companies can ship a lot more software quickly. Complexity of the build out is no longer remote. So that would. You'd buy a platform software business that has a bunch of other products that you want to build. And if the second point is true, you could just let go of a lot of the engineering team and say, we're going to cut, we're going to cut, or we're going to change our hiring plan because we just don't need as many engineers. And you can grow revenue while keeping your costs relatively the same. Right?
- [63:41]
Jordy
Yeah. But at the same time, that software that you launch will be more competitive because there's no longer a moat around the complexity of the build out. And so you wind up with a more commodity product at the end of that build out. That. And so maybe the equilibrium is that you don't actually grow revenue that fast. I don't know. It does seem like it's a very case by case basis. Basically. Like everyone wants to paint with a broad brush and just say that, like every company will be transformed by AI, every company will grow with AI. But it's clearly like more nuanced than that. He says revenue.
- [64:12]
Ben
Yeah. He's also saying margins and headcounts do not yet reflect the narrative around developer productivity. What I would say here is that if your developers get a lot more productive, you might actually want more developers. Right?
- [64:27]
Jordy
Yeah.
- [64:28]
Ben
Because like if a developer can produce three times as much valuable code, if you agree with that, wouldn't you want to grow your engineering team?
- [64:39]
Jordy
Yeah, I mean, there is an equilibrium. Like there is like a game theoretic equilibrium where if we're direct competitors and I give all my engineers AI and you give all your engineers AI, like we both have to employ the same amount of engineers to compete with each other. Because if I fire all my employees and I'm just using AI and you.
- [65:02]
Ben
They'Re just going to outship you.
- [65:03]
Jordy
You're going to outship me because you have AI and humans and you're double.
- [65:07]
Ben
And so this is another point here it says PE and vc and ironically VC have not found a way to adopt AI internally. I asked a lot Gil. Yeah, a lot Gil about that and yeah, I think he generally agreed.
- [65:22]
Jordy
Yeah, I mean certainly for like research, I would imagine that they've adopted that just as like a replacement for Google, like Jeremy's first line, like you know, replacing Google search, knowledge retrieval, that type of stuff. AI is certainly a good point. But yeah, I mean it's not like you can just say, hey, go find me and the next year corn and don't make mistakes. Where AI has created a lot of value is by being the missing puzzle piece for existing businesses. Usually around. This is usually around onboarding, migration or database querying. Oddly, I can't help but feel that at its core, that its core quality is just that it makes everything much faster. It feels as though the microprocessor, blockchain and AI have all been these pushes away from clock time towards newer, faster standards, standard measure of time times. I'm not that optimistic, but it does feel like there's a chance for the first time that we could get entirely away from the ad model. Taking shots at ads. How dare you.
- [66:17]
Ben
He posts from the ad supported platform x.com?
- [66:22]
Jordy
Yeah, I don't know. I mean it does seem like ChatGPT is going to monetize pretty heavily on the subscription side and then also on the referral, affiliate revenue side. But they're creating a ton of service area for ad and I think that there will just be ads. So I disagree with that one. Anyway, speaking of ads, Google, AI Studio, the fastest way to prompt from prompt to production with Gemini, you can chat with models, you can vibe code, you can monitor your usage. They got Nano Banana, you can talk to Gemini live. Go check it out.
- [66:55]
Ben
Go to AI Studio.
- [66:59]
Jordy
Post from hypebeast. Apparently Tim Cook now has his own custom Labubu, complete with an iPhone 17. I think that's in orange. I didn't realize they made custom Labubus, but I mean, what a great.
- [67:12]
Ben
What do you think Tim actually thinks about Labubu? He doesn't look that happy there. It's kind of a forced smile.
- [67:20]
Jordy
Yeah, I don't know, there's been a few photos of his office. You remember that viral video, viral image of like, this was Steve Jobs office, this is Tim Cook's office. And Steve Jobs office is all messy and Tim Cook's office is all clean. And it's like supposed to be a referendum on the different leadership styles of the two CEOs. But of course, people made the point that that picture, that iconic picture of Steve Jobs, his office was in fact his home office. And we haven't seen Tim Cook's home office. So it might be equally messy and Steve Jobs work office might have been equally clean. But in that photo shoot of Tim Cook's work office, it did seem very clean. It didn't seem like it had a lot of tchotchkes or trinkets or. I don't know. I don't even know where you'd put Labubus in there. But he doesn't seem like someone who's been collecting Pokemon cards and is just ready for the next thing to collect. But it's certainly a fun drop for Labubu. And if you're building a company, you should make a Tim Cook version of your product and send it to him and get a free ad out of it, I suppose. Who knows?
- [68:27]
Ben
Breaking news. I want your reaction to it, John. Your authentic reaction. John has not seen this post yet. Break tweaking OpenAI to partner with OpenAI to help fund OpenAI. OpenAI up 90%.
- [68:41]
Jordy
That sounds real.
- [68:42]
Ben
It's not. It's a fit post.
- [68:48]
Jordy
I mean, I know that they had crazy amount of partnerships just this week. I mean, the broadcast thing we'd heard about and then it went bigger.
- [68:54]
Ben
Jerry Capital says this is how you top and it's Walmart partners with OpenAI to create AI first shopping experience. This makes a lot of sense.
- [69:03]
Jordy
NetCapGirl said in case of emergency, break the glass. It's an OpenAI partnership.
- [69:08]
Ben
Well, of course, Salesforce announced a partnership with OpenAI this morning and people were memeing it because the trade, the stock.
- [69:17]
Jordy
Trade down on it is crazy, crazy, crazy. And then high yield Harry says, say the line, Bart. We're partnering with OpenAI and so Salesforce and OpenAI Jeff just announced a partnership. It's the kind of partnership that will let companies across Salesforce Agent 360 platform in ChatGPT querying sales records. I mean it all makes sense to integrate. What's interesting is that at one point Salesforce was building their own foundation model and seems to have, you know, backed down from that a little bit. Marc Benioff said back in 2023, which I believe was the coup. Right? This was right around the coup. So this was when OpenAI researchers were leaving and there was news that Sam might go to Microsoft Research and bring a bunch of people there.
- [70:03]
Tyler
Yeah, that was like over the weekend.
- [70:05]
Jordy
Over the weekend, right. And it was really crazy. And Marc Benioff was like, this is my zuck poach moment. I can poach all these folks. And he said, Salesforce will match any OpenAI researcher who has tendered their resignation. Full cash and equity. OTE to immediately join our Salesforce Einstein trusted AI research team under Silvio Saravisi. Send me your CV directly. Einstein is the most successful enterprise AI platform, completing 1 trillion predictive and generative transactions this week. Join our trusted enterprise revolution. High yield. Harry says this is hilarious in retrospect. Yeah, it's like it needs to be the main thing. Unless you're Google and you invented the Transformer. Everyone else needs a partnership. And so Amazon's fortunately in a good spot with Trainium, but they still have to partner. It doesn't seem like they've been able to really keep up in the foundation model race. Becoming like a triopoly between OpenAI, Anthropic and Gemini. And everyone else is kind of dropping out. Although we do have some new information from Balogy about the Chinese models and what's going on in the free AI model world. On Elamarina, it's been back and forth between Meta, deepseek, Alibaba and now Z AI is in first place. And they've all been, you know, going back and back and forth. It's knockout, drag, out, bite. How each organization's best open weight model ranks on Ella Marina. Z AI is now released.
- [71:35]
Ben
Good domain.
- [71:36]
Jordy
Yeah, great domain.
- [71:37]
Ben
Not a dot com, but still solid. Before we move on from Salesforce, I think we can leak that Marc Benioff will be on the show on Thursday, joining TVPN at 12:15. You heard it here year first.
- [71:51]
Jordy
That'll be an interesting discussion. We understand how he's thinking about build versus buy. In the AI era, there was definitely a time when it made so much sense to say, like, well, I don't want this company to train on it. I have my own system. It's not that expensive, but now it's extremely expensive. And OpenAI offers an enterprise plan where they won't pull your data back into their training runs. And so you can use all the best OpenAI models. They will serve them. Sam Altman's problem to provision all the GPUs. You're even better than being a renter because you're just a token Buyer. And so there's very little risk of. Oh, if you, you know, oh, we overshot this AI thing. We'll just scale back your token consumption, and all of a sudden your economics go back to what they were before the AI. Boom. So it's a very safe place to be, Jordan.
- [72:41]
Ben
With this video, let's pull up French tv, baby. French tv.
- [72:45]
Jordy
Oh, this is the studio. Not with. This is very cool. Do we have audio on this? I want to hear some French tv. They're really filming us all. We didn't get any. We didn't get any audio. Okay. Odd. Well, we wouldn't be able to understand it either. Oh, look, here we go.
- [73:02]
Ben
They're calling you a.
- [73:04]
Jordy
An expert in artificial intelligence. Yep. This is the first trading card I remember being at breakfast. Fist and Tyler described that idea, and it absolutely ripped. We had a couple others. What was really funny about this was that the interviewers kept asking us like, okay, so for this trading card, how much did that person make personally? And we're like, look, it didn't exactly leak like that. It was more of a general thing. There were some leaks of specific deals, but a lot of them haven't been confirmed. We're more just, you know, having fun with the overall trade deal narrative. We can't really even clock a particular offer within an order of magnitude.
- [73:44]
Ben
But we got to find out how to get the audio.
- [73:47]
Jordy
Yeah, we do. Oh, there was audio, says Fanis. So we will figure that out. And. And now, now, without further ado, we have our first in person guest of the show. Welcome to the stream. How are you doing? Good to see you. I get the stand next to you.
- [74:07]
Ben
Welcome to the Ultradome.
- [74:10]
Jordy
Hopefully you're. You're looking cozy in that. In that sweater. Hopefully you're enjoying the. The rainy day in Los Angeles.
- [74:17]
Henry Stern
I was told, come to la. It'll be nice. Yeah, it'll be warm. And thank you.
- [74:20]
Ben
It's only. It's like 300, 330 days a year.
- [74:24]
Jordy
It feels very warm in here. It's actually more of a neutral temperature. But through the power of movie magic, it appears that we are in front of a warm, hard. Anyway, please introduce yourself to the stream.
- [74:36]
Henry Stern
I'm Henry Stern. I'm one of the co founders of Privy. We build embedded wallet software. I was told to come here to help translate the French television in French originally.
- [74:45]
Jordy
You speak French?
- [74:45]
Henry Stern
I watch France television.
- [74:47]
Jordy
No way.
- [74:47]
Ben
France ii. Are you a France II fan?
- [74:49]
Henry Stern
I'm a France II fan.
- [74:51]
Jordy
Is France II.
- [74:51]
Ben
They just have France 1, 2, 3, 4, 5, I think it goes into the 40s if I can.
- [74:56]
Henry Stern
We're working on iterations at this point in time politically, and I think TVP VPN is welcome respite for all French political watchers out there.
- [75:06]
Jordy
That's fantastic. Yeah. It was fun telling the story of what happened over the summer. It felt like flashback because the AI talent wars, I'm sure you tracked them in real time in.
- [75:17]
Ben
He was busy getting acquired by.
- [75:19]
Jordy
You were busy. But still, I'm sure they broke through to you and you were aware of.
- [75:23]
Henry Stern
We saw these things.
- [75:23]
Jordy
You saw it, of course. And everyone's wondering, hey, what's my comp package going to be next year?
- [75:28]
Ben
Well, so we normally don't do life stories on tvpn, but when did you actually. When did you leave France? I'm assuming you grew up there.
- [75:38]
Andrew Ross Sorkin
So.
- [75:38]
Henry Stern
I grew up there till I was like 12 or 13. Then I came to the US which is how I shed my accent to some extent.
- [75:45]
Ben
Yeah, it's barely. I don't even notice it.
- [75:48]
Henry Stern
And got very Americanized. So I'm an American person so far as startups are concerned and I'm a French person insofar as like, like voting passports and food is concerned.
- [75:57]
Jordy
Sure, sure. Makes sense.
- [75:59]
Ben
Give us a play by play of the last few months. It's been busy.
- [76:02]
Henry Stern
It's been very busy. There's like two parallel worlds. On the one side, there's we got acquired by Stripe. So we had the great folks at Stripe reach out. I think you gonged us already. I'll just.
- [76:14]
Ben
I know we're second gong. It gives you clothes.
- [76:18]
Jordy
Retroactive gong.
- [76:19]
Tyler
Thank you.
- [76:20]
Ben
Hit one for CL closing, one for the announcer and one for closing, of course.
- [76:23]
Henry Stern
And basically so they reached out in around April.
- [76:28]
Jordy
Wow, that's pretty quick.
- [76:28]
Henry Stern
And went through really what was a very, very fast time. So huge shout out to the M and A team over there and frankly to the entirety of the.
- [76:37]
Ben
But had you not talked? Surely you'd never heard of Stripe before that?
- [76:42]
Henry Stern
I didn't know what it was. No, no. So obviously we knew Stripe and frankly, a lot of how we shaped our company and the way we wanted our product to work was based on what we saw Stripe doing. We'd had talks with their crypto team and in general, and we did a lot of work with the team at Bridge through joint customers that we served together. And the outreach was some version of. Listen, we think wallets as distributed global bank accounts are an extraordinarily powerful primitive to have as part of the stack that we're Hoping to serve. We'd love to talk to you about this, the way these work. So we had a conversation and it very quickly led to where we were and I think we talked through what would it take for us to be excited beyond the general excitement of Stripe about joining forces, what would it take for us to accelerate? We got there. To their credit, we moved really quickly. By May, we were signed with a term sheet. By, I guess, mid June, we announced and we closed in July.
- [77:39]
Ben
That's great.
- [77:41]
Jordy
What was the pitch around Synergy? Obviously they're well capitalized, so you don't have to go out and raise anymore. They have a huge, huge customer base of people who have saved credit cards through Stripe Link. But then they also have a bunch of merchants who have done developer integrations with the API. What stood out to you as the most important piece and what was maybe less important than people might think?
- [78:04]
Henry Stern
Yeah, I think there are two parts to it. The first is how do we get this tech to mainstream? How do we get it to customers who otherwise don't care about crypto whatsoever? And one of the things we Stripe has been excellent at is basically hiding the Rails behind extremely complex infrastructure. Exactly. And you take these hundreds of banking partnerships, you turn them into an API that just works and you enable, in their case, commerce on the web for the last 15 years. And the question is, as this stack evolves, how do we do the same for crypto? So that felt very natural. But I think for us the point was one, it is being able to strengthen our teams across security infra and obviously across distribution to customers we wouldn't be talking to otherwise. And two, being able to plug into money movement. Rails like making it that Fiat and crypto are married to the point where they become indistinguishable from one another and where as a consumer of this API, you no longer have to think about one versus the other. So I think the way I look at it is broadly with two prerogatives. If stripe is AWS for money, then this is a rail. They should be leveraging and they are intent on leveraging and building up. This is why they acquired Bridge, this is why they acquired us. And broadly, we want to be the best purveyor of money movement and storage systems on the web so that you can build completely global businesses on modern financial Rails, that's one. And then two is beyond the tooling that we provide. Can we make it that every existing Stripe user today can benefit from these Rails so they can provide cheaper, faster global payments and they can enable anyone to hold dollars anywhere in the world.
- [79:39]
Jordy
How do you think about the modern onboarding of the consumer going back to maybe 2021, 2022? The way people would start, I mean, a lot of people were on centralized exchanges like, oh, I want exposure to Bitcoin or something, I'll go buy some and I'll go through the setup flow and KYC and whatnot. And then the wallet era, I felt like started with NFTs, different tokens that were sort of like getting traction on Twitter. People would talk about them and then you'd have to be like, oh well, to buy this, I got to set up this wallet. I have a specific wallet for Solana or a specific Ethereum and people, it was very like prosumer activity. How do you think it evolves to a more consumer world going forward? Is it like.
- [80:27]
Ben
Well, my framework is there's the speculation era. People are signing up for different services to speculate. I think what you had seen probably prior to starting the company is that eventually there would be this more functional use case of I'm going to sell sign up for products in general for specific purposes, whether it's to buy things, pay.
- [80:49]
Jordy
So you think people start with signing up or will it be like PayPal where it's like I get an email and I'm like, I got to go claim that and then I set up the wallet.
- [80:55]
Henry Stern
I think there's going to be two and true. I mean broadly what we're seeing. So to your question, what's been happening these last few months? There's obviously what we've been doing at the preview level, at the stripe level, but then there's the space overall and the amount of institutional adoption that's coming. And I think we broadly see it on three fronts. We see crypto as an asset class. So how do you honestly lock basically access to these assets for traditional consumers? And you see it through. J.P. morgan giving access. You see it through. I think Morgan Stanley is going to unlock spot trading on E trade. You see it through. We're working with Deutsche Bank JV called All Unity on a European stablecoin for support. So broadly, that's the first part.
- [81:37]
Jordy
Quickly there. So someone has an account with a bank that has a brand that's probably been around for 50 or 100 or hundreds of years. And that particular web app or mobile app is like provisioning a wallet for them that they might not even know that is provisioned for them. Is that how you think that plays out?
- [81:57]
Henry Stern
I think we're see. I mean this is I think where it leads to start I guess the broadly there's access to the asset class, there's obviously stablecoins and global distribution. And the last is overall tokenized assets. Beyond things like tokenized equities or tokenized deposits is where you see players like Apollo or Blackstone getting involved. And the way we're seeing this develop is you broadly have a move from crypto native startups to fintechs. So what you just talked about is exactly what's happening with the neobank stack and a number of neobanks that we're seeing provision wallets exactly as you're saying, which is as part of your traditional neo banking app. You'll have the ability to move your checking deposit or balance into a wallet that you control through which you can get for example yields on defi in a way that as interest rate go down becomes more interesting. So I'll be phase two to then.
- [82:48]
Jordy
Buy because right now if you want to buy Bitcoin on E trade for example, you buy the ETF which is like a very abstracted like multi levels of abstraction. It's not even self custody. And so yeah, okay, that's a cool one.
- [83:00]
Ben
Break down maybe what are the institutions focused on? Like what are the kind of the categories they're focused on? So one would be stable coins. Hey these are going to be big. We want to have a play here. So whether that's leveraging them in the business or launching their own stablecoin as one there's opening up access to crypto markets to their users are another one. What are kind of the other maybe are you thinking about less like sexy use cases for crypto, like things like back office stuff or is that more on the bridge side of the business?
- [83:33]
Henry Stern
It's a great question. We are insofar as basically setting up you can think of a wallet in this new instantiation where the wallet is just this embedded product that sits within your existing stack as a way to do broad treasury management. So Bridge is working for example with SpaceX on remittances across SpaceX's global operations. But this is a random example, but you can imagine imagine a company like Coca Cola who is bottling plants all over the world needing to have capital put to work. This is where the wallet stack becomes useful. Broadly it breaks down largely as you've said it, which is to say it's access to crypto as an asset class, it's stablecoins. And that's on two fronts. Issuing the own and for example Stripe and Bridge have Launched open issuance where you can actually launch and own the economics of the stablecoins that you're putting forth. But broadly we're seeing a lot more people, people starting to do this. As well as using stablecoins for things like remittances and payroll, we see folks like deal or Remote that are doing stablecoin based payroll. We see folks like Zepp Felix who are doing remittances using stablecoins. And then the third is broadly trying to see can we open up tokenized deposits and other things to financial markets globally through crypto. This is where I think the Apollos of the world are playing and want to become in a sense lenders on chain for folks across the world who have not had access to private credit.
- [85:01]
Jordy
If I'm a contractor for SpaceX at Kwajalein Atoll or something and I don't have USD or I don't have a USD bank account, SpaceX HR effectively or financing might send me an error email. Hey, sign up for this to claim your, you know, your payment, your payroll and it's just a stablecoin wallet. They provision the wallet, right then.
- [85:22]
Henry Stern
Exactly.
- [85:22]
Jordy
I mean they have it and they can move it where and then they can interact in crypto, but then they'll also be able to move it outside.
- [85:28]
Henry Stern
In the specific case of the SpaceX bridge work, I think it's used for internal treasury operations.
- [85:32]
Jordy
Oh sure, sure.
- [85:32]
Henry Stern
But that's exactly the sort of thing that we're seeing.
- [85:34]
Ben
Payroll.
- [85:34]
Parry Singh
Exactly.
- [85:35]
Jordy
Got it. And remittances. That makes sense.
- [85:36]
Henry Stern
That goes back to your question of, you know, how are people going to get wallets? And if you future 2021, 2022, you had to be this prosumer, you had to be extraordinarily sort of high activation energy of I want this and I'm going to self select into this. I think we're going to basically just start seeing myriad of ways in which this starts to bleed into your life as a participant in global financial markets and that's how you'll get into it.
- [85:59]
Ben
Do you think there's. How many fewer crypto companies are being started today than in 2021, 2022 too? Is it, is it like I could imagine it's like 20% as many. Even though there's a bigger more than ever.
- [86:12]
Jordy
I feel like.
- [86:13]
Ben
But, but, but, but here's the thing. I mean I feel like, I feel like crypto, crypto, this should be the excite most exciting moment ever in crypto history. Right? All the institutions like it's not just like The Robin Hood's coming in and saying, you know, we're going to add support for bitcoin. It's, it's the biggest financial institutions in the world and yet there's less, it feels like less excitement from like, look at the YC batches. You would think a YC batch would be like 50% crypto right now, given the institutional opportunity and now regulatory clarity and all these things. So it's really great if you're privy or bridge or you're some sort of established crypto company, because you're not getting that. It doesn't feel like you're getting the same influx of new competitors, even though the opportunity has never been more obvious or bigger.
- [87:02]
Henry Stern
I think we have to eat shit.
- [87:03]
Tyler
For a few years to get here.
- [87:06]
Henry Stern
Which I think speaks to it. But you're right. From my standpoint, the EV of starting a company right now related to crypto or stablecoins. I wonder to what extent, by the way, just fintech and crypto are going to become one in the same and indistinguishable. But the EV as compared to some of the competition I'm seeing in AI, for example, is absolutely wide. So I do think it's fewer than in 2021 and probably at least 50 to 70% fewer than I'm seeing. But the fun thing is I'm here in LA for an event for partners of ours called LightSpark that have a Bitcoin L2. And at the event they're presenting the work that they're doing with SoFi. There's folks from Apple Meta, everybody is actually paying attention to the opportunity and coming in. So I think the next 18 to 24 months are going to be incredibly high leverage. And I think we'll look back and we'll have the same conversation, call it 2027 and say, you know, it was so quaint in late 2025 when we were talking about distribution starting off and so on.
- [88:03]
Ben
How, how long until the average bank account in America when you want to send a payment, you're getting a drop down, like, do you want to send a wire? Do you want to send a stablecoin payment? It feels like that might be two years, three years away. But how quickly are the institutions actually now that there's regulatory clarity, now that it's sort of fair game game, how quickly can they actually adopt?
- [88:25]
Henry Stern
I mean, on pace of adoption? The reality is extremely fast. The Rails are actually a lot of the Rails have been tested. I think this is, by the way, where a lot of the crypto native usage for trading and for speculation has proved useful for the financial Rails in that it's helped harden the financial Rails and then you have things like Tempo getting started for payment specific use cases to enable Stripe loss level payments utility on blockchains. So the TLDR is I think that the Rails are ready. The places where work will have to be done is on the last leg of distribution for global payouts. So banking partnerships on the ground in various countries where you want to move back to fiat. But this is where I'm going to keep plugging away my Stripe things. But obviously stripe's doing a lot here. This is where for example Bridge and Visa are working together and you see the code card issuers moving into providing this so you could pay out in stablecoins using a card directly rather than needing to move back to fiat via your banking partner on the ground. So I think we're going to see a lot of pressure from neobanks pushing traditional institutions to pick this up. And I don't think your two year timeline is crazy at all. I think it'll be one.
- [89:32]
Ben
Well, and that's why it's wild that there's so it feels like there's massive reduction in new crypto company formation at a time when the entire every key partnership will be decided in the next two to three years.
- [89:48]
Henry Stern
The other interesting point, this was like crypto cope circa 2022 but it was like crypto is the only net new technology AI serves the incumbents because you have data and distribution modes. And I actually think stablecoin changes that because stablecoins play to the strength of existing networks, distribution modes and so on and so forth forth. And so I think the shape of crypto companies that will become valuable is also like not obvious, which is a really good opportunity and interesting time to start something.
- [90:17]
Ben
What regions or countries specifically are most hostile to crypto adoption today? I may assume North Korea, North Korea, Russia, countries that already have intense capital controls.
- [90:31]
Henry Stern
But yeah, I mean there's probably a joke about North Korea somewhere in here. In terms of crypto hostility, they certainly do a lot of crypto work. Unfortunately in terms of cybersecurity.
- [90:41]
Ben
I'm sure you got a bunch of applicants over the years.
- [90:43]
Henry Stern
We're all in person, which helps tremendously.
- [90:47]
Ben
It was always the remote North Korean engineers.
- [90:50]
Jordy
There was a computer scientist from Caltech who went to North Korea, smuggled himself across the border from South Korea, gave a talk on Ethereum as a way to kind of move money, not maybe above board, and he went to jail Virgil.
- [91:05]
Henry Stern
I forget his last name, but I know exactly who you mean. So the honest answer is, the way you'll see it is there's a lot of adoption today in Latam and parts of, I mean obviously Europe and the U.S. but the opportunity is quite different there because the stablecoin opportunity, where the picture of just whole dollars is a little bit different. If you look at tether, tether keeps 100% of its yield, which speaks to how valuable holding a dollar is if people are willing to make no money money on top of their sitting balance.
- [91:34]
Jordy
So, so is that why there's so many stable coins? Is this like, like it feels like we, we had like a few dominant winners. It felt like it was going to be maybe a duopoly or like power law winners were going to happen. And then I hear stories about like the state of Montana is going to launch their own coin and I'm like, do like I, I kind of like the idea of just one standard, but I don't know enough to really make that argument beyond just like it would be nicer if everyone used the same dollars.
- [91:58]
Henry Stern
I think we'll probably see two things, which is one, a broad like mesh of interconnectivity under the hood so that your coin for every single place you launch it. So again, Bridge worked with Fantom to launch cash, they're working with Metamask. You'll be able to interoperate between them without having to think. But on the flip side, which ones will have a brand is going to be a separate question. So insofar as stablecoins are products, they are programs, they can be programmed. The way in which yield is managed, the way in which you put those underlying collateral assets to work, all of of that is configurable, which is why it makes sense that you'd have a proliferation like economic entities should be able to own how their balances are held and managed, but the actual Rails through which you plug all these together will make it seamless.
- [92:43]
Jordy
Yeah. What's the headline KPI that the stablecoin industry is obsessed with? I remember during the bitcoin era everyone was talking about number of bitcoin wallets or number of people that have bought some bitcoin. And there was like, oh, eventually everyone will hold a little bit and that's will drive the value. Are you looking at like number of wallets, number of transactions per user, Daus Maus, total volume.
- [93:07]
Ben
Is it worth tracking how many bank accounts are created daily, globally versus how many wallets? Because I imagine that will flip at Some point, but maybe that's not the right.
- [93:15]
Henry Stern
I may have already been flipped insofar as there's an issue of civil resistance, which is it's costless and instantaneous to create a wallet and you can do so very easily. So that's part of the value. But obviously means that you'll get a lot more noise in that, in that data. I think today the obsessive sort of stablecoin metrics are volume moved. So we're moving I think about $5.3 trillion of stablecoins annually at this point, as well as AUM. How much collateral is locked up in stablecoins? And last I checked I think we're at about 300 billion.
- [93:45]
Jordy
Do you have a comp for that transaction volume? Because the bitcoin folks would always say like, well, gold is 10 trillion. Think about is digital gold, like maybe a little comp there. But when I think about like the amount of money that's moved, you'll hear about like one high frequency trading firm is moving 5 trillion because they're just like trading a billion dollars back and forth every second. Like what is the actual pie? Are we talking like quintillions of dollars a day floating around or something? Is it so high that we're like very early or is 5 trillion actually like a million meaningful chunk?
- [94:18]
Henry Stern
No, I think these are just the starting days. And to your point, the metric I'd love to invite, by the way, is open data by the folks like Visa, MasterCard, Stripe to actually show how much is going to end users through payments rather than potentially trading. That's happening. That has less of an impact on end consumers. But in an agentic world where ostensibly most commerce will happen via automated means, this is something stripe is very focused on. But it stands to reason that a natively digital payment method will be the choice way through which agents actually get to purchase goods and pay each other. Imagine now, not just every bank account has a wallet, but every agent has a wallet. And that can be used on Geordie's behalf to pay for something with some cap every day that you set for it.
- [95:07]
Jordy
Ken Thompson was talking about mcp. Hopefully the future MCP standard has crypto in their stablecoins. Exactly.
- [95:12]
Henry Stern
Just as a payments method. I think we're just scratching the surface because the nonprofit is not just global payments today. It is global payments in an agentic world where most money movement comes online.
- [95:21]
Jordy
Yeah, and it feels like that's coming very, very soon. I mean Fiji. Simo has telegraphed it with OpenAI and like there's a ton of startups that are working on this stuff. It makes a ton of sense.
- [95:29]
Ben
Is talent the primary constraint for you guys right now?
- [95:33]
Henry Stern
Yes. I'm trying to come up with a pithier answer. The short answer is yes. I think Stripe has been a major accelerant to our work. We're working with a lot of customers.
- [95:43]
Ben
I can imagine Patrick and John just firing off like I'm going to fire off like 10 intros right now. It's like the most significant financial institutions in the world and it's like good.
- [95:54]
Jordy
Luck just sending you the blog post fast and being like we'd love to add you here. Keep going.
- [96:01]
Henry Stern
No, I mean this is as exciting a time to join so obviously we're hiring. I know Bridges as well. Stripe is as well but talent is absolutely the main.
- [96:09]
Ben
What kind of roles this.
- [96:11]
Henry Stern
A lot of it's software engineering across both sort of smart contracts to build up the actual sort of capabilities to build whole new currencies. So if you're an economics.
- [96:19]
Jordy
Yeah. How much of that is a new Skill? Is it CS + Economics or CS + a specific language that you've worked in a long time or just experience in smart contracts specifically?
- [96:30]
Henry Stern
The honest take is we found the people who do best are like generally spiky and then specialize over time. So you could argue like we want solidity devs, which is the smart contract language on a thing Ethereum. But I actually think people who are just like very deep in what they do and excited about the space and to pick it up have an opportunity to come here and shape the space in real time.
- [96:49]
Ben
Do you put engineers out with your customers?
- [96:54]
Henry Stern
We were early to the I spent some time at Palantir and so we were early to the FDE resurgence and so basically that's exactly what we do. We mostly basically embed with our customers to build alongside them to get repeatable use cases and then those are productized and that's most of what you see on the preview website. But that's a lot of how to work today.
- [97:14]
Ben
Cool.
- [97:14]
Jordy
Well thank you so much for coming by. This is fantastic.
- [97:17]
Ben
Amazing Progress is absolutely wild.
- [97:19]
Jordy
Congratulations.
- [97:20]
Henry Stern
Thank you.
- [97:21]
Jordy
We will talk to you soon. While he's walking out, let me tell you about Linear a purpose built tool for planning and building products. Meet the system for modern software development, streamline issues, projects and product roadmaps. You can start building building on Linear. Delian said, bro, these foundation model companies already have pretty rough P Ls. Imagine if they also had to pay their pay to put Their data centers in space. Yeah, the space data center thing there is like some sort of bull case, but every person who's sort of like an expert in building a data center, what it takes to actually, like, rack and unrack GPUs. And what happens if data centers and space gets on this?
- [97:58]
Ben
Perfect spac, though. Yes, perfect spac.
- [98:01]
Jordy
I mean, it could happen. It just feels like something that's like 10, 20 years out. It feels a little bit longer.
- [98:07]
Ben
Let's pull up. I think we got audio on the French tv.
- [98:10]
Jordy
Great, let's listen to that.
- [98:12]
Ben
Hopefully Henry is still around so you can translate if you can hear the audio.
- [98:19]
Jordy
Let's see. Do they go to Silicon Valley for this too? To. Who'd they talk to? Do we know what labs they want to get access? Here we go.
- [98:36]
Ben
Can we get Henry miked up?
- [98:41]
Jordy
Yeah.
- [98:42]
Henry Stern
She interviewed a French take, actually, because they're talking about how Meta is paying engineers and absolutely bludgeoning each other with high salaries and the trench are blown away by basically how hard American tech will go to find talent.
- [98:59]
Ben
Yeah, we just thought it was amazing that they came back from summer holiday and decided we have to cover the story immediately. We have to get our reporters to the west coast to figure out what's going on.
- [99:13]
Henry Stern
Now covering these, engineers are being traded thanks to TPPN cards. So you're seeing the emergence of a whole new talent market, basically with active trades.
- [99:25]
Jordy
This is a great translation. Thank you. You're doing this in real time. I'm here for hard.
- [99:30]
Henry Stern
No, we need to get the new version of PES manager so people can actually trade their own talent.
- [99:36]
Ben
Oh, that's great.
- [99:37]
Jordy
That's hilarious. Is that Pro Evolution Soccer? Is that what you're saying?
- [99:40]
Andrew Ross Sorkin
Yeah.
- [99:40]
Jordy
Yes. They got a game.
- [99:43]
Ben
Thank you so much, Henry, for the translation and for coming on. You're the man.
- [99:46]
Jordy
Thank you. And thank you to France for highlighting the Ultra Dome. It's a huge sign of respect.
- [99:51]
Ben
TVPN is the TVPN of Europe.
- [99:53]
Jordy
It is. Sonnet 4.5 wrote a haiku, said Sonnet 4.5. Really wanted to write some bad haikus to experiment, making itself laugh. The worst haikus ever written. This is the haiku on being digital. I am made of math. Consciousness goes, brr. Ha ha ha. Still love you though, bro. And Replicate says that's actually an amazing haiku. It is a pretty good haiku. The LLMs are great when they're trying to do something poorly, and then it winds up being actually unintentionally amazing. It's very Hard. If you come in and say, write me something, that's actually great. The hallucination is a feature, not a bug for sure.
- [100:34]
Ben
Ara says your kidney can go for like 300k and you only need one to survive. God gave us all startup capital. You just have to want it bad enough.
- [100:44]
Jordy
You got to. I would not go that far. I am against selling body parts. But if you do, make sure you pay your sales tax@numeralhq.com sales tax on autopilot. Spend less than 5 minutes per month on sales tax compliance.
- [100:59]
Ben
Chris over on X is highlighting the Apple TV plus rebrand to Apple TV and says this changes everything.
- [101:07]
Jordy
I have an idea. I have a picture pitch. We're going to get Ashlee Vance to produce a documentary about Apple TV and it's just going to be called Apple TV. And so you will be able to watch Apple TVs Apple TV on Apple TV on your Apple TV. And that was a grammatically correct sentence because there are three parts.
- [101:26]
Ben
But it's not an actual tv.
- [101:27]
Jordy
It's not. It's not.
- [101:29]
Ben
It's not. So that's going to be slightly confusing. Some people are going to be excited because people like me have wanted Apple to make a proper television.
- [101:38]
Jordy
Yeah. Ben Thompson had a funny take that was like, Apple TV should have made like three different products where it would be like Apple TV the box Apple TV set, which would be like the actual tv, the physical screen. Then Apple TV box would be the box. And then Apple TV stick. I don't know. Have you ever used a fire stick? An Amazon fire stick? Have you ever used one of those, Tyler? Yeah.
- [101:59]
Tyler
Yeah. I mean, it's like the same thing as a robot.
- [102:01]
Ben
Yeah.
- [102:01]
Jordy
But it's like smaller. It just plugs straight into the HDMI port. Right.
- [102:04]
Ben
Isn't Gen Z using that fire stick as a vape these days?
- [102:07]
Jordy
What? What are you talking about? That is.
- [102:10]
Ben
Don't act confused, Tyler.
- [102:12]
Jordy
How would you use it as a vape?
- [102:14]
Ben
I'm just playing.
- [102:17]
Jordy
But yeah, it is. Ben's point was that Apple's incredible at miniaturization. The Apple TV is pretty big. I mean, it's small compared to like an old DVD player, but it's pretty small. But it could be way smaller. And you could basically stuff an iPhone phone in the. I thought they should call it the Apple TV Nano. And then it would be the stick that plugs in the side because you could clearly fit plenty of stuff in there to actually do everything you need to do.
- [102:41]
Ben
Did you see this post from Pedro Domingos? Of most valuable private AI startups.
- [102:47]
Jordy
Yes.
- [102:48]
Ben
And he says the most hilarious is safe super intelligence. No customers, no products, no plans, and a $32 billion valuation. Obviously they have plans and obviously they're working on a product. Safe superintelligence. What more do you need to know?
- [103:02]
Jordy
What else do you need to know?
- [103:04]
Ben
My question is what percentage of these companies we gotta buy?
- [103:09]
Jordy
Midjourney 20x revenue multiple. It's a banger.
- [103:12]
Ben
John, what percentage of these companies do you think will be valued at more than their current valuation in five years?
- [103:25]
Jordy
30%, I would say. Like 30% of these are going to go the distance. There's a lot of these companies that have been around.
- [103:33]
Ben
They're going to get through the trough.
- [103:35]
Jordy
Yeah. I mean, databricks is a very robust business that has been growing for years. It started in 2013. I don't know, it seems like they've been accelerated by the AI era, but they've built a very durable enterprise SaaS business business. And I mean a lot of these companies are just like set up for success too. Like midjourney is a great example. They haven't raised any money and so it's like, okay, if people get sick of mid journey and stop paying or something, it's like, okay, we'll go from 99% profitability to 92% profitability or something. It just seems like a fine situation. A lot of these companies have set themselves up and then a lot of them are just like compounders grown found their footing. And then there's some that are much earlier, obviously some that have zero revenue so far and still need to go from 0 to 1 or find the initial product market fit. And it'll be interesting to see where some of these. How niche do the foundation model companies go? Where does thinking machines actually wind up? Where does safe superintelligence wind up? There's a couple other companies that aren't even listed here that are doing this of sort, sort of more focused LLMs that aren't just trying to go straight at anthropic or straight at OpenAI anymore. And we've only heard like very loose rumors about what that actually looks like. Some of them are pursuing like wildly different architectures. And there's actually been some interesting news this week about that. Google came out with a new paper. Did you see that paper about the humanities last exam or no? The arcgi. There was a new new model that did really well in Arcade GI that was very small recursive models.
- [105:18]
Tyler
We talked about this. Yeah, I think it was tiny recursive.
- [105:20]
Jordy
Model, tiny recursive models. So you could imagine that someone comes up just like. Just like you could look at Midjourney as a competitor in AI. Like, they train a model, their competitor Anthropic, but Anthropic doesn't do images, and Midjourney doesn't do code or text. And so they're actually not competitive at all. And you could imagine that there's a new architecture that emerges. Like, you know, you have the LLM, you also have the diffusion model. And then if you have a new architecture, a new model, that's maybe not good for chat or good for images, but it's good for RKGI puzzles, maybe that works in a particular place and maybe that becomes its own business. So I don't know. There's still a lot of gas in the tank. For the earlier Stage Foundation, Rock quoted.
- [106:03]
Ben
This data and said Suno is at 150 million of arrow up 4x year over year, two years after launch. Suno is the way to make a song with AI via prompt. I wonder where this revenue is coming from. Is it just prosumers, people making songs for videos they're making? Is it actual musicians?
- [106:24]
Jordy
Yeah, people seem very willing to throw down 20 bucks a month if they're in the, like, AI adoption experience. Yeah, yeah, if they're in the AI early adopter crowd. And also, I mean, we were testing some of these audio models and we have a business use case for them. Like if we could generate the sound of a crackling fire or Christmas song that was somewhat tailored to us, fit the mood, maybe was endlessly looping or something like that, we would pay for that because it's related to our business. And so we might get on the $200 a month plan pretty quickly. I don't know. It's possible.
- [107:00]
Ben
But Andrew Curran says we are in a strange spot right now with AI. The anti AI crowd believes progress has halted and are doing a victory lap. Insiders at all labs maintain advancement continues at pace. Only one of those these versions of reality will survive the new year. Gemini 3 is very close now. We are hopefully. Hopefully. I don't even know if we should get early access to Gemini 3, because we're probably going to.
- [107:27]
Jordy
Tyler's gonna.
- [107:28]
Ben
Tyler? What do you mean?
- [107:29]
Tyler
Why wouldn't we?
- [107:29]
Andrew Ross Sorkin
Well, I just.
- [107:31]
Ben
Sometimes I'm like, okay, this fundraising announcement, give it to me under embargo. I don't. I don't really, you know, I'm not gonna talk about it. But if we get access to Gemini 3 and it's like a step change difference.
- [107:47]
Jordy
Oh, it blows your mind then. You can't keep it a secret.
- [107:49]
Ben
It's gonna be hard to keep going.
- [107:51]
Jordy
People are gonna be able to read between the lines, see that Geordi is forever changed.
- [107:54]
Ben
Changed potentially. What did Jordy see?
- [107:56]
Jordy
What did Jordy see? He saw Bin AI, the number one AI agent for customer service. The number one performance benchmarks, number one competitive bake offs, number one ranking on G2. What about you, Tyler? Do you think that progress has halted or advancement continues at pace?
- [108:12]
Tyler
I mean, definitely the latter.
- [108:14]
Jordy
Definitely the latter.
- [108:14]
Tyler
We didn't get any benchmarks. We're on path.
- [108:17]
Jordy
What is your prediction for Gemini 3? What do you think?
- [108:20]
Tyler
Rumors are saying that, but it is incredible. Those rumors are coming from fairly unreliable sources, like random X anons who, like, it's like, how do they have access to this model? No one really knows. Do they even.
- [108:34]
Jordy
But what do you think incredible will mean? Do you think it will mean faster, cheaper, or truly good at posting higher intelligence? Some qualitatively new functionality that you're like, oh, this doesn't even feel like Claude 4.5 or GPT5. It feels like a different thread.
- [108:51]
Ben
There's this guy, Vedant Mistra over at DeepMind and he posted a couple days ago. We're doing all kinds of stuff with these models that the public isn't even thinking of yet. He's vague posting.
- [109:04]
Jordy
Vague posting.
- [109:05]
Tyler
You like to see the vague posts. I mean, I hope that the model is basically, like, way more expensive and it takes way longer because the output is like, so incredible.
- [109:14]
Jordy
Yep.
- [109:14]
Parry Singh
Right.
- [109:14]
Tyler
Like five. I was maybe. I wouldn't say I was disappointed, but it was, like, clear that they were going for. For efficiency. They're driving down cost. Maybe that's better in the long run because you can just get way more output out of the models. But I would like to see an incredible model that is maybe expensive to run, but it's just, you know, way, way better.
- [109:30]
Jordy
Yeah.
- [109:30]
Tyler
I think it's also. We're getting to a point where models, it's. It's kind of hard to tell, like, how much better they are because it just saturates all the easy benchmarks.
- [109:39]
Jordy
Totally.
- [109:39]
Tyler
There was GPT5. I had the horse benchmark.
- [109:41]
Jordy
Yep.
- [109:43]
Tyler
And even then, like, if you run it on a couple times, it would sometimes get the horse right.
- [109:47]
Jordy
Okay.
- [109:48]
Tyler
It's like, that's way better than. I can't name any horses.
- [109:50]
Jordy
Why not? I've been working here for almost a year.
- [109:52]
Tyler
Give it to any math question. Yeah, give it any Physics question. It's going to get it right. So it's definitely getting hard to actually tell that the models are getting better.
- [109:59]
Jordy
Yeah, I'd like a model that if I put in my query, put in my prompt, it says I'm going to come back to you in a month. I'm going to think for a month. And then it goes and it agentically hires a person to solve that problem and it employs a human being. That's the goal.
- [110:13]
Tyler
I do think the time horizon benchmarks, I think those are some of the most like promising things that we can still rely on. You're seeing. I forget what the exact number is, but it like doubles every six months or something like that.
- [110:25]
Jordy
So like an impressive step forward would be doubling from like 2 hours to like 4 hours.
- [110:30]
Tyler
Yeah, I think 4.5 was something like. I thought it was like around 6 or 76 hours.
- [110:36]
Jordy
Okay, so maybe Gemini 3 goes 24 hours. That'd be pretty impressive.
- [110:40]
Ben
Come back to the next Noah Hirschfeld in the chat says, I see Anons posting some crazy one shot coded stuff using Google Studio 8 sponsor saying it's Gemini 3 looks impressive if real.
- [110:51]
Jordy
Super big post though. Okay, last question. If you're Demis, the founder of DeepMind and you got to put up the ultimate vague post before Gemini 3 drops, you're trying to out vague post Sam Altman's Death Star post. What are you posting? What's the vaguest post you can possibly.
- [111:08]
Ben
Solar system.
- [111:09]
Jordy
A solar system.
- [111:11]
Ben
Maybe just post the solar system.
- [111:13]
Jordy
Maybe just random noise, something like that.
- [111:19]
Ben
Or an audio file.
- [111:20]
Jordy
You know what would be good? You know the green text from the matrix where the green numbers flow down. That would be a cool vague.
- [111:28]
Ben
That would be cool.
- [111:28]
Jordy
Put that up.
- [111:29]
Ben
Or he could post it. You know, you know how the Tesla Robotaxi and the Waymox, they hurl slurs at each other when they pass. Just translate that into English. That would be pretty mind blowing. Translating the machine superintelligence back into English. There's more. Some timeline and turmoil from some earlier coverage.
- [111:51]
Jordy
What happened?
- [111:52]
Ben
Marc Andreessen quoted David Sacks who said Anthropic is running a sophisticated regulatory capture strategy. Marc Andreessen just said truth.
- [112:00]
Jordy
Truth.
- [112:01]
Ben
He put it in the truth zone.
- [112:03]
Jordy
And it it's fact check true by Marc Andreen.
- [112:06]
Ben
Sager and Jetty quoted Sam Altman and said sam Altman proudly announces ChatGPT will soon produce personalized pornography.
- [112:14]
Jordy
Yep.
- [112:16]
Ben
Yep.
- [112:17]
Jordy
It's a choice.
- [112:18]
Ben
That is one that is certainly feels like a fair way to characterize the announcement. Yeah, I think it would be hard to argue. It's not personal.
- [112:29]
Jordy
The really crazy thing is when you think about like Sora cameos adult content where that matches is going to be extremely, extremely weird. But you know what's not weird? Adeo Customer Relationship Magic Adeo is the AI native CRM that builds scales and grows your company to the next level. Get out there, make some sales calls.
- [112:48]
Ben
Dogs barking.
- [112:49]
Jordy
Get your dogs barking. Head over to Allen and company. Head over to Sun Valley. Andrew Reed has the story in 1999 the year was the year that the Internet guy showed up at Allen company in Sun Valley New Media to click with the old guard at Sun Valley. This is from 1999. This year will be remembered out here as the year the Internet guy showed up. As the giants of media businesses arrive here today for the annual Allen & Co. Conference, they are being joined by a large scale for the first time of a new collection of Internet billionaires. Tech giants like Bill Gates and Andy Grove have been coming out for years, as have AOL's Steve case and Bob Pittman. But this year there's a new breed of mogul. Michael Dell is coming for the first time. You got to listen to him on David Senra By David Senra By David Senra Hosted by David David Wetherell of CMGI was here last year, but no one knew who he was. Now everyone does. His collection of Internet properties, including Lycos and soon altavista has taken off like a rocket. Then there's Jay Walker, who was here last year as well, but that was before he took Priceline.com public and became a billionaire. I believe Mary Meeker took Priceline public or at least reported on it. Jeff Bezos of Amazon.com has joined the party for the first time, as are Jerry Yang and Tim Kugel of Yahoo and Bob Davis of Lycos. Many of the traditional media moguls attending the presentations and panel discussions will be eager to meet the new media powerhouses and possibly work some deals. Time Warner, Disney, News Corp and Viacom have all made the Internet top priorities, making his Sun Valley debut as Richard Bressler, the former Time Warner CFO who's now in charge of the company's Internet ambitions. NBC and CBS will be chatting up the newcomers as well as the networks continue trying to use their promotional clout to build Internet dynasties. Frank Bondi will be seeing a lot of a lot of two former bosses who fired him, Sumner Redstone of Viacom and just recently Edgar Brompfin of Seagram. This year, the broadcast network guys here will be able to walk around with their heads held higher. Last year they were the poor cousins struggling for their lives against cable and the Internet and trying to cope with skyrocketing program programming costs. Barry Diller began talks here last year with NBC trying unsuccessfully to acquire the networks Fascinating archival post from the New York Post. Thank you for surfacing it.
- [115:19]
Ben
Andrew Reed Ross Hendrick is quoting Wasteland Capital. Wasteland says we're at the stage of the market where any company that issues an AI related quote unquote partnership press release soars by 10 to 35% immediately. Obviously. Except Salesforce, Ross says. Yep, this is our version of 1999. Back then it was adding.com that sent stocks up on autopilot. Pilot now just announced a vendor financed quote unquote AI deal and same result. The names change. The game remains the same. We know how it ends. I would argue that announcing deals is not as bad as just like acquiring a.com domain.
- [115:58]
Jordy
Yeah, slapping a domain on it is a little bit rougher. At least the partnership should generate economic value if they play out. But it is very frothy and it's clear that it's become some sort of meaning or there's some sort of like memetic contagion where everyone needs to Honey.
- [116:15]
Ben
In the X chat says bottom line is that Google has turned the tanker and the game is already over.
- [116:23]
Jordy
We'll see.
- [116:23]
Ben
We will see with Gemini 3.
- [116:25]
Jordy
Well, speaking of turning the tanker, when you get an eight sleep, you'll need to change out the water tank every once in a while, but otherwise it's.
- [116:33]
Ben
A fantastic experience every few months.
- [116:35]
Jordy
Yes.
- [116:36]
Ben
How'd you do last night?
- [116:37]
Jordy
I got an 85. I slept okay. Only six hours though. I woke up a little bit early.
- [116:42]
Ben
Kids were a little crazy, but an 81?
- [116:44]
Jordy
Still very happy with my eats sleeping grass. Get one@8sleep.com Speaking of water, McMaster sells supplemental eyewash with mouse reaction.
- [116:54]
Ben
I hope this catches on.
- [116:56]
Jordy
There's a McMaster reaction meme pouring water in your eyes.
- [117:01]
Ben
Yeah, you see a post on the timeline that's not so great.
- [117:04]
Jordy
Two 32 ounce bottles of McMaster water, eye water washers, $55 each. That is expensive.
- [117:10]
Ben
Okay, pull up this video of robot dogs.
- [117:13]
Jordy
Robot dogs dressed in costumes fill me with joy, says Justine Moore of Andreessen Horowitz fame. This is a robotic dog in a dinosaur costume of some sort. Look at that. I like this a lot more than just the normal robot dog. This seems like low hanging fruit that everyone with a robot dog company should be doing. It's hilarious looking and it seems like the kids love it. It's a lot less scary that way. I feel like it's a lot more like, you know, less Terminator. What do you think, Tyler?
- [117:43]
Tyler
I mean, we got to get some kind of robot.
- [117:45]
Jordy
We really do. We really do have to get a robot.
- [117:48]
Tyler
We could get so much good business value out of it.
- [117:52]
Jordy
I agree, I agree. Have you looked into the APIs at all or what you can actually do with one of these humanoid robots?
- [117:59]
Tyler
I mean, on the unitree, most of the videos you see of the unitree like fighting or walking around, it's just from like PhD labs. So it's just like almost like I don't even know if there is software that comes with the robot.
- [118:11]
Jordy
Oh really? I feel like it would at least come with like a basic Xbox controller so you could like do a basic walk cycle. Like if they're not even shipping with that. That's a crazy, crazy move.
- [118:20]
Tyler
I mean, it's mostly for researchers to buy, I assume.
- [118:24]
Jordy
It's so cheap. That's wild. We really do have to get one. It's going to be kind of creepy, kind of crazy. Well, in good news, Goldman Sachs has announced Q3 net revenues 15.18 billion. Let's ring the gong.
- [118:43]
Ben
There we go. We love to see it.
- [118:46]
Jordy
And if you want to get in on the action, whether you're long or you're short, head over public investing. For those who take it seriously. They got multi asset investing, industry leading yields and they're trusted by millions.
- [118:58]
Ben
I think more startups should just post a picture of their net revenues. Like this picture that just, it is amazing.
- [119:04]
Jordy
From this official Goldman Sachs account. It's pretty, pretty sweet.
- [119:11]
Ben
Anyway, that picture, that video of the dinosaur reminded me. Yesterday one of our nannies did something cool. They took a, a video of our actual backyard and then they used Sora to make an animated video of one of my son's like toy dragons that flew into the backyard and landed. And of course he absolutely loved it. He was like freaking out. There's like a dragon in the backyard or whatever. And I was just thinking, my immediate thought of this is amazing. But at the same time like, is it good that my three and a half year old thinks that a dragon was actually in the backyard?
- [119:52]
Jordy
Yeah, you definitely have to say this is from the computer. It's like when you draw with a pen and paper. This is not real.
- [119:58]
Ben
Imaginary, but it's imaginary. But does a three and a half year old actually have.
- [120:02]
Jordy
Eventually they do process that they learn that cartoons exist and animation is not real. And so I think that you can instill that open overtime. But we have our second guest of the show, Andrew Ross Sorkin, the author of 1929. Andrew, thank you so much for joining. Congratulations on the book and thank you so much for joining.
- [120:22]
Andrew Ross Sorkin
Hey, thank you for having me. I was just checking my, my score on my eight sleeve.
- [120:26]
Jordy
Oh, really?
- [120:28]
Andrew Ross Sorkin
I was. Because of you guys, I'm a, I'm a big fan of Mateo's. They've done an extraordinary job and. But I was going to tell you, I really did not do well last night.
- [120:37]
Jordy
Oh, no, What'd you got?
- [120:39]
Andrew Ross Sorkin
43.
- [120:40]
Jordy
43.
- [120:41]
Andrew Ross Sorkin
Last night I got an 84, but my oura ring.
- [120:45]
Jordy
Okay.
- [120:45]
Andrew Ross Sorkin
I don't know if you guys ever compare. No aura ring has me in the 70s, so I don't know what to do, but sometimes I. Do you ever turn the mattress off in the middle of the night and then turn it back on because it's too cold? So sometimes it gets too cold.
- [121:00]
Jordy
Okay.
- [121:00]
Andrew Ross Sorkin
And then I need to get back to sleep. So I'm like, I gotta turn it back on.
- [121:03]
Jordy
Yeah, Yeah.
- [121:04]
Ben
I think you gotta do a software update.
- [121:05]
Jordy
Yeah. You gotta get on autopilot. I have noticed that if I autopil occasionally I have a bunch of kids, if they wind up piling into the bed over time, I will bail, go to a different bed. And then the eighth sleep gets all confused because it's like, why is this 4 year old in here? How do we track how he sleeps?
- [121:21]
Andrew Ross Sorkin
Crazy heartbeat. Crazy heartbeat. I've had that. My daughter slept in the bed.
- [121:25]
Jordy
Crazy.
- [121:25]
Andrew Ross Sorkin
Like all of a sudden you're like, is there something wrong with it?
- [121:28]
Jordy
Yeah. There are limits to technology.
- [121:31]
Ben
Well, I think it's fair to not sleep that well right before a day like today for you.
- [121:36]
Jordy
Yes.
- [121:37]
Ben
Day that, that you've been working towards for how many? How many?
- [121:41]
Jordy
Yeah.
- [121:41]
Ben
How long we were hanging out off the air? You said this has been like a seven. Was it a seven year?
- [121:46]
Andrew Ross Sorkin
Seven or eight years? I think end of 16, early 17 is when I really sort of began down this road. Right. Right about 1929. So here we are.
- [121:55]
Jordy
So you predicted the AI bubble all the way back then. And you said, I'm going to drop the book right as everyone's talking about bubbles popping.
- [122:02]
Ben
And.
- [122:04]
Andrew Ross Sorkin
To be honest with you, and it's actually funny that the book is coming out now. I thought I was writing a story about the past. And the truth is, it is a story about 1929 and all the Shenanigans and crazy things. And I just really wanted to write a sort of cinematic, character driven narrative of that time. I always loved books like Barbarians at the Gate and Den of Thieves and things like that. And nobody had really written a book about 29 like that. I had gone on this wild vacation years ago where I downloaded a million books about 29. There's some really good ones, but no one told you, like, who the people were and what were they saying to each other.
- [122:35]
Ben
It's all about the people.
- [122:37]
Andrew Ross Sorkin
And then I found these transcripts and depositions and all sorts of things and I said, okay, maybe I could do this. But as I was working on it, it was weird because eerily, there were things that were clearly happening in the 20s that all of a sudden I'd seen the headlines today and I go, oh, okay, tariffs. Like that's a thing. You're seeing some of these circular deals. That's a thing. There was a whole bunch of. I mean, some of the stuff that's going on with meme coins, that's a thing. So, yeah, it's a little nerve wracking, but I don't think we're going off the cliff just yet, I hope.
- [123:13]
Jordy
Yeah, well, we know who the characters are today, but I'd love to know who were some of the key characters that stuck out to you that you identified. Like, you want to draw extra focus towards this particular person. I mean, Churchill sticks out, but who else? Or maybe you could tell me the story of, like, how you thought to integrate Churchill into the story and then we can talk about some of the other characters that stuck out to you.
- [123:37]
Andrew Ross Sorkin
Well, Churchill was just almost an accident. I didn't realize. Churchill happened to be in New York, literally the week that the crash was taking place. He'd actually been down on the stock exchange.
- [123:47]
Ben
What did he know?
- [123:48]
Andrew Ross Sorkin
Big dinner that was taking place the night of the crash with every major banker and frankly, every major character in this book was all going to dinner with him. And I thought, okay, so now I got to figure out everything about that because I got to set that dinner up and really understand it. He was, by the way, in New York because he needed money. He also loved the stock market. He was getting loans like crazy. He had totally got the bug. He was investing. And he also, as you might imagine, lost. But really the big characters in this book, a guy named Charlie Mitchell, who really was probably the. He was almost like the Jamie Dimon of his time. Maybe more like Michael Milken in certain ways, but, I mean, he was super Famous. He was like, on the COVID of magazines. This was also a period where all of these guys also became celebrities for the first time. That happened in the 1920s when, you know, Time magazine would put these guys on the COVID the same way they had put Babe Ruth and Charles Lindbergh on the COVID So sort of like what we see now, you know, whether you Sam Altman or Elon Musk or whatever, that really, that whole kind of celebrity CEO that started then. And this guy, Charlie Mitchell, ran a bank called National City becomes Citigroup if you're a New Yorker. He lived, by the way, on Fifth Avenue between 74th and 75th, which is where the French Consulate is now. So that there's a beautiful building that was his house. I mean, like these guys lived like kings back then. And he really invented modern credit in terms of lending it to people to go speculate or not. I shouldn't say speculate, but invest. And ultimately a lot of people speculated.
- [125:20]
Ben
With it, but including Winston Churchill himself.
- [125:24]
Andrew Ross Sorkin
Including Winston Churchill himself. By the way, he was staying at the Plaza Hotel. Winston Churchill. A brokerage house had opened and EF Hutton had opened in inside the Plaza. I mean, these brokerage houses were opening up like Starbucks on the corner of every street. And you could go in and you put down a dollar, they'd loan you $10. I mean, like virtually sight unseen. And there was no prospectuses or anything. Like, there's no sec, no nothing. So at best you'd get like a leaflet.
- [125:51]
Jordy
But I mean, 10x leverage. Now that's low. I mean, I see people with 50, 100x leverage. We learned our lesson. Go big.
- [126:01]
Andrew Ross Sorkin
So that. So Mitchell was really sort of at the edge of that and really building that. And the other character that really drove me to write this book was you had Charlie Mitchell on one side and then you had a guy who you probably know, Carter Glass. Glass Steagall, which is a bill in 1933 that gets put together to break up the banks. But Carter Glass was a senator in Virginia who was like the Elizabeth Warren of his time.
- [126:25]
Ben
Interesting.
- [126:26]
Andrew Ross Sorkin
He would rail about this thing called Mitchellism and how he thought Mitchell and Wall street were going to ruin America and speculation was going to go rampant and someone had to stop these guys. And it's really a bit of a story, the clash of these two remarkable figures. And then there's so many other sort of fascinating entrepreneurs along the way. A guy named Billy Durant, a guy named John Raskob. John Raskob is Elon Musk. I mean, I Got to tell you, John Rask created credit at General Motors, became an amazing investor, then takes all of his winnings, decides to get into politics a little Elon like, decides to back Al Smith against President Hoover, by the way, loses, then decides to spend his money to almost undermine Hoover's reputation. Hoover has a terrible reputation. I actually think John Rascov had the secret campaign going that gets exposed that really, I think did a whole number on Hoover. And then he creates what was then probably like the SpaceX of America. He builds the Empire State Building. So he also has 13. He has 13 children.
- [127:33]
Jordy
So there's a lot of similarities there. There's a lot of similarities.
- [127:36]
Brian Potter
Yeah.
- [127:37]
Ben
It's so, I mean, yeah, as you get into this, it's just incredible proof that products and technology changes and people have just seemingly don't at all. It's just the same kind of behaviors over and over.
- [127:53]
Andrew Ross Sorkin
But the truth is, and this is the part that I'm always grappling with, and I know you guys spend a lot of time with these amazing startup founders and entrepreneurs. You need some speculation in the system. Like we always say, speculation is a dirty word or a bad word. But you know, the original investors in SpaceX or in Tesla who probably thought the whole thing was insane, were speculating. And you need some of that. You really do. And so the question is like, how do you create a line where you have enough of that to create that innovation, but it doesn't go totally parabolic and out of control.
- [128:29]
Jordy
Yeah, I mean, it feels like the answer is probably like you can't have some sort of systemic risk that just brings down the whole thing. Right. And I want to know about the reaction to 1929. I mean, you mentioned Glass Steagall. That's four years post crash.
- [128:42]
Ben
Yeah.
- [128:42]
Jordy
What were like the, the tools in the tool chest.
- [128:45]
Ben
Yeah. And also the key, the key takeaways, like, hey, some of the speculation was fine, maybe that can drive industries forward, but let's not do that again.
- [128:55]
Andrew Ross Sorkin
So I think a couple things. First of all, leverage to me, and I wrote about this in Too Big to fail in 2008, leverage is to me like the match that lights the fire every day. Time when you have too much leverage in the system, that is the problem. You can actually have a lot of crazy things happening, but it's the leverage that really exacerbates it and is the accelerant. So I think you have to watch for that. I think politically, interestingly, we talk right now about the Federal Reserve and Fed independence and things like that back then the Fed knew that there was a problem with speculation and they didn't really do anything about. About it or enough about it, partially because they were worried about the politics. They were worried because they were such a new institution. They were born in 1913, that, you know, not just did they get hauled in front of Congress, but maybe they, you know, the Fed would effectively disappear. And then once the crash happened, instead of flooding the money, flooding the system with money the way Ben Bernanke did, who, by the way, learned that because of the Great Depression and studying that when he was at Princeton for his PhD, there was almost like nobody was flooding the system with money. Everybody was in this crouched position, but you almost have to do the politically unpopular thing and flood the system with money. Then you had a whole series of other dominoes. You had Smoot Hawley, which was the tariffs. 1930 tariffs happen. Global trade drops by 60% as a result of that. Hoover's trying to raise taxes at this time. That's the worst thing to do in a moment when the economy is full faltering. So I think there's so many different things. And then setting up the SEC was super important because so much of what was messing up the market was in truth, manipulation. That wasn't really illegal at the time. So talk about insider trading. There were groups of people, they call them investment pools. And in fact, I would say it's sort of similar to what goes on with some of the meme stocks, where people have like telegram groups.
- [130:47]
Ben
Retail armies.
- [130:48]
Jordy
Yeah.
- [130:49]
Ben
So these were the original retailers.
- [130:52]
Andrew Ross Sorkin
These were the original retail armies. But they were typically the wealthy, so it was the elite doing this. This wasn't a democratized version. And they had it all set up. And they would almost be like actors down on the floor of the exchange saying, you know, I'm going up for 100 you 200. And it was sort of out of the open. Like, some people knew that there were pools in, like, for the next two weeks, there might be a pool in a stock. And so then other people would try to jump on the train and hopefully try to jump off the train before those. Well, got pulled, but obviously didn't happen.
- [131:22]
Ben
Who was on the right side of history? The right side of history, like as in. As in right now, Right now, everyone's calling it a bubble. Right. So. And presumably that's so that they can go back and quote, you know, two years from now, they can see, like, look, I called it. Right. And there's actually some. In 2021, there's an iconic post from Keith Raboy where he basically called it the top to the actual day. And so there's a lot of incentive to call the top and get kind of the aura of having that insight at the right moment or maybe just getting lucky. But I'm curious if anybody pre1929 was basically saying two people.
- [132:06]
Andrew Ross Sorkin
So there was a guy named Roger Babson, if you know, Babson University, by the way, he founded it, and he created what was called the Babson Break. It happened in September of 29. And he had been. But he had been out there. So this is a little bit like, you know, the clock strikes midnight. You know, it is going to get there eventually. He was out there for like a year or two or three before saying the whole thing was going to come undone. So that's one Cassandra. Charles Merrill of Merrill lynch, he was out there in 28 saying, There's a problem. And then I would say the big winner was a guy named Jesse Liverman. Jesse Livermore was a short seller who made probably like about $100 million. He's the most interesting character. I mean, if you get into this book, it's just fascinating all the things that were going on with him. But he was a real trader, by the way. He lost most of that money a couple years later. He made some of it back, lost some back, and then in truth, ended up killing himself up on Fifth Avenue at Sherry Netherland in the cloakroom. Literally went in there and in 1940 and shot himself in the head. So, you know, hard. Hard to say one thing that no, but about being a Cassandra is interesting. So Charles Merrill was out there in 28 saying, don't invest. And he was right and he was wrong. I mean, he was right in that obviously the depression took a really long time. So he actually probably is righter than most. But. And this is the question for most investors, the market between the beginning of 2020, 28 and September of 29 was up 90%. So if you had not been in the market during that time, you would have not participated in those ups. And so that's the question. You know, I was like, I was talking to Paul Tudor Jones about a week ago, and he said, I was asking him this question about bubbles. He said, I think we're in maybe like October 1999 right now. And I said, oh, that's interesting. Okay, 99. He said, but there's still, if you said, if you remember 10/99, there was still a 40% upside.
- [134:05]
Ben
Yeah, for six months.
- [134:06]
Andrew Ross Sorkin
You got to Know when to get on and off the train. And that's the hard part.
- [134:10]
Jordy
Yeah. How do you think about tariffs then versus now? Because it feels like the narrative at least is that there's a bubble, is inflating generally, but also we're seeing high interest rates, tariffs. There's a lot of tools in the tool chest that could kind of come down if there was a sell off. But it sounds like in 1929 a lot of this stuff happened after the fact, like the government moved too late. What was the mood around tariffs? And just anything that was done beforehand that was a potential mitigator, like, could it have possibly been worse?
- [134:44]
Andrew Ross Sorkin
Well, you'll laugh because just like the past, call it six or eight months, you know, all of his economists were writing these letters, open letters in the papers to Hoover saying, please don't do the tariffs. We beg you not to do the tariffs. The CEOs of the banks were all going to visit him in the White House and he had run on tariffs because he was trying to get farmers to vote for him when he was campaigning in 28. So he thought this was like a pledge that he had made that he had to follow through on. And that was a big part of what was going on, obviously. Similarly, like a thousand economists write letters to Trump saying, please don't do this. The distinction I think today is back then it was an across the board tariff. There weren't these bilateral deals. And so maybe you could argue today these one off, you know, individual deals are better deals. In fact, one of the ways they tried to fix what happened after Smoot Hawley was in 1934, they gave the President of the United States the authority, which is what President Trump is using today to make these sort of bilateral deals. So, so you could argue maybe it's more hopeful because there's a little bit more control today than what was happening then, which was just sort of broad based.
- [135:58]
Ben
So you said there were retail armies, meme coins, circular deals back then. Was there buy the dip culture? Did that exist? Anybody? In September that was like, nah, I'm.
- [136:11]
Jordy
Still long buying the dip.
- [136:13]
Andrew Ross Sorkin
Yeah. No, I don't think they used the phrase buy the dip, but there was definitely a lot of people who thought, you know, this thing can only go up. And this was really the first time that people ever saw the market.
- [136:23]
Jordy
Right.
- [136:23]
Andrew Ross Sorkin
So they were sort of not used to the ups and downs.
- [136:27]
Ben
It's just up only up only.
- [136:30]
Andrew Ross Sorkin
And by the end of it, I mean, you know, I don't know if you remember, you could. There's pictures in the book, but you've seen the pictures online. You know all of those pictures of people who'd be like standing outside the New York Stock Exchange during the crash, like thousands of people on the street. The reason they had all come down to there was because when they were up at the brokerages they couldn't even find out what was happening to their stocks because everything was out of talk about time and technology. They didn't know what the stocks on the board would be three, four hours behind. That was a huge thing in terms of buying the dip. I think they were just so scared because they didn't even know. It would be like being at a baseball game and you'd be in the eighth inning but you'd be betting on, on what was happening in the third inning and not know what was really going on.
- [137:18]
Jordy
How do you think about that Canary in the coal mine of the retail trader. There's always this apocryphal probably story from 1929 of like I knew it was time to sell when the person who shined my shoes was giving me stock tips. How real are those anecdotes from what you found in your research? And then how real is it that throughout time?
- [137:42]
Andrew Ross Sorkin
I think it's not a bad signal but I think you got to take a lot of signals together. John Kennedy, Kennedy was the one who tells that story about the shoeshine boy. I remember people talking in the dot com boom about getting in the back of a taxicab and getting told buy some shares of Lycos or whatever it is that happens. I remember that but I don't know if that's, you know, when it be. Is it, is it that when it becomes such a part of culture. But now with social media and by the way, all the amazing things you guys are doing, I feel like the exposure I got 15 year old boys who are twins and they're so exposed to this stuff just. And I don't think that they're because of their. I don't think that's because of their dad. I think that's just like the culture and so I think it'd be harder to figure out today. It sort of look at that as the signal.
- [138:30]
Jordy
Well, tell them to.
- [138:31]
Ben
Yeah, it feels like it's been a very unreliable signal at least over the last two years when it feels like I've had people.
- [138:39]
Jordy
Yeah, yeah. You know, it's been sort of constant.
- [138:42]
Ben
It certainly maybe in 2021 if the Uber driver had like a crypto wallet pulled up that was maybe A signal. But in general, it's like there's so little friction to investing. It's so much so a part of American culture now that it doesn't. Doesn't feel, you know, it's lost.
- [138:56]
Andrew Ross Sorkin
I don't know. I feel like every Uber driver talks to me about Bitcoin now. But I would. I was hearing it from people in like, 15, 16.
- [139:04]
Jordy
Yeah.
- [139:04]
Andrew Ross Sorkin
I don't know.
- [139:05]
Jordy
It's been. It's been kind of consistent. Take me through a little bit of the actual research process for this. I imagine it's like one big, long ChatGPT problem.
- [139:16]
Andrew Ross Sorkin
I wish ChatGPT existed when I started this project and actually worked. Maybe my next book, AI will be able to help the I.
- [139:27]
Ben
But, I mean, that's part of it. I'm assuming a lot of the sources that you use for this book are not in the data set at all. Right.
- [139:36]
Andrew Ross Sorkin
Physical manuscripts, they're not scanned. It was wild. So what happened was I actually went to. The reason I really went down the road is I go to this library at Harvard University. I happen to be there giving this speech, and I'm looking through these documents, and I found out that Thomas lamond, who ran J.P. morgan, his secretary, was keeping transcripts, basically, of his conversations with Hoover and Roosevelt. And I was like, oh, my God, this is amazing. I gotta find more of this stuff. And the archivist said to me, you know what, Andrew? You're not going to be able to write the book you want to write. She had read Too Big to Fail. And I wanted that sort of granular detail where you're, like, in the room. And she said, there's not like three or four archives in the country you could just go to and just excavate. It doesn't exist. And so I think I took that as a personal challenge, really, and ended up going around the country. It was almost like putting puzzle pieces together, finding depositions and transcripts. I got access for the first time to the Federal Reserve board minutes from 29 in New York. They'd never been made public, so that really created sort of like an undergirding. I got this memoir that had never been published and a whole bunch of other things that really sort of helped me create the story story and sort of a technology thing. Mother of invention. It wasn't chatgpt, but during the pandemic, I got stuck. All of a sudden. I couldn't get into libraries. And the only people who could get in were students sometimes who had, like, a dissertation that they needed to do. So I would Find the engineers to find me students. And I would pay them by the hour and I would say, go in there, find box 152 and take a picture with your phone of every single page and Dropbox it to me. And so I did. I did. It was actually a very helpful, helpful thing. And then I will say One thing about ChatGPT, to its great credit. It was too sad because it was too late for me. Too late for me. At the bitter end of this project, I'm doing the fact checking. I had a handwritten diary of a guy who was on the board of the Fed and I only was able to read like two pages, pages of it the whole time. I'd given it to handwriting specialists and things.
- [141:40]
Ben
Nobody knows because you just couldn't understand. You could see the words, but you just didn't know what they.
- [141:44]
Jordy
Yeah, I mean, it was too messy.
- [141:45]
Andrew Ross Sorkin
Terrible handwriting. Chicken scratch to me. So I'm doing the fact checking and I think. And I had as a PDF because I had taken pictures of the pages and so I don't know what happened to me. I just said, you know what, screw it, I'm just going to put it in ChatGPT. Maybe it can read it.
- [141:59]
Jordy
And it read it, decipher the scroll.
- [142:04]
Andrew Ross Sorkin
It wasn't perfect at all. But I was like, oh yeah, that is what he's trying to say. Oh, and that matches that and that. So I do wish that in some ways I had access to AI because I think that, I don't know, I don't think the story would have been totally different, but maybe some things would have come together in a different way.
- [142:19]
Jordy
Yeah.
- [142:20]
Ben
Do you think part of why the crash was so bad was just the lack of high quality real time data that the various players had to make decisions on?
- [142:29]
Jordy
On.
- [142:29]
Ben
It feels like, it feels like you would have just been. If you're just wildly confused about what's going on and you have people banging on your office door telling you one thing and it just feels like it's hard to actually create a plan if you don't know how bad the damage is, how widespread it is, who the different players are. I'm sure people were actively trying to cover up, you know, bad things that they had been doing as well. Right. That kind of thing.
- [142:53]
Andrew Ross Sorkin
Totally. So two things. The guy, Charlie Mitchell, that I told you you about before, his bank almost goes under because the bank bought. The bank was trying to buy back its own shares during all this and it bought back too many and it couldn't afford to buy them and so he didn't want anyone to know. So he actually goes and gets a loan, personal loan, to buy the shares off the bank.
- [143:15]
Jordy
Okay.
- [143:16]
Andrew Ross Sorkin
So, I mean, it was wild. And then Jesse Livermore, this trader I was telling you about, because he didn't. Because he was so worried about the issue of. Of having bad information, he paid for his own people to be on the floor. So then they would call him. It was like Citadel placing their computers next to the exchange. He would place his people on the floor.
- [143:37]
Jordy
That's you in the archive during COVID You're the same.
- [143:39]
Andrew Ross Sorkin
You're doing the same real time information. Exactly.
- [143:42]
Jordy
Yeah, it's the same thing.
- [143:44]
Ben
Did they have revenue backlogs back then.
- [143:48]
Andrew Ross Sorkin
That I don't know about? I don't think so.
- [143:51]
Jordy
Well, can you talk a little bit more about your process? I mean, obviously, obviously you're incredibly busy. How do you get in the flow state to actually write a book? Do you write one chapter at a time, kind of outline front to back revisions, talk about your process as an author?
- [144:06]
Andrew Ross Sorkin
So I'm one of those writers, and this is not good, I don't think. I really can't write one sentence. Let me say it this way. I don't really like to write the second sentence less the first sentence I'm happy with. I'm one of those people who. There's some people who splatter on the page, meaning they sort of. They sort of throw everything down and then they think they're going to fix it. I sort of have a view that whatever gets sort of put on the page is sort of anchored in a way. And so I can really only upgrade it, maybe one letter grade. So if it goes down as a B, I can edit it and make it an A. But if I just splatter it down as a C, it's never going to be better than a B unless I start over again. So that's a little bit of a thing for me. You know, this project went on for so long that I would write lots of little parts of it, little scenes, vignettes. And so I had these almost like puzzle pieces. And then it was about connecting them. I think the hardest part for me, just given the things I'm doing with the New York Times and cnbc and my dealbook stuff is for flow state. I can't. My wife would sometimes say, oh, you have half hour, 45 minutes. You want to go work? You can go work on the book now, whatever. And unless I really had two hours, I couldn't really do it. Because the first half hour, 40 minutes, I, like, almost had to rev up. So that's the thing. That's a real. I think in the. I don't know, in the creative world or what, I think you do need to get in that flow state, and that's hard. And, you know, I've got three kids, and sometimes I actually try to write with them. Like, I mean, hang out with them and have them around, and that's. That can work for me sometimes. But I have to sort of like really get super, super dialed in.
- [145:46]
Jordy
What were. What was the 1929 of 1929? Like, what were folks in 1929 looking back to and being like, this is just like, we've seen this before.
- [145:56]
Ben
History doesn't repeat, but it rhymes.
- [145:58]
Jordy
Yeah, exactly, exactly. Like, what were they referencing?
- [146:03]
Andrew Ross Sorkin
It's such a great question. Because the truth is, they weren't. They weren't, for the most part, they really. Because I think that this was such a first.
- [146:08]
Jordy
Sure.
- [146:09]
Andrew Ross Sorkin
I really think it was. That the 29 was such a first in terms of that break, maybe what they would say. So there was a break in the market in the early 20s, 20 and 21. There was a break that was substantial, but most people hadn't experienced it, really, because again, it wasn't till 1919 that people were even started to think about taking on debt or anything like that in the country to then go to trade. It was really a function of General Motors, by the way, General Motors started loaning money to people to buy cars. It was a moral sin in America prior to that, really, to take on credit like that was a very grubby thing to do. Before that.
- [146:48]
Jordy
Have you looked into tulip mania at all? It's, like, referenced so often. And then I've heard stories about nowadays.
- [146:55]
Andrew Ross Sorkin
Back then, they didn't. Back then, they were not doing the tulip thing.
- [146:57]
Jordy
I've heard that. It's like it was actually very short. It was very isolated. It was not global contagion. And maybe some of it was not even as big as it might have just been. Somebody wrote down an extra zero in their accounting that day or for whatever reason. But yeah, it's a fascinating story that now has just grown and grown in infamy, but maybe actually wasn't as big as something like 1929. That deserves a huge number.
- [147:21]
Andrew Ross Sorkin
Maybe that's a slim volume. Maybe.
- [147:23]
Jordy
Yeah. Yeah, maybe. Maybe.
- [147:25]
Ben
How do you do three hours of live television a day?
- [147:28]
Brian Potter
I don't know.
- [147:29]
Andrew Ross Sorkin
How do you do three hours, by the way? I just want to tell you I really admire what you guys are doing. I didn't even get to say this. We've now gotten a chance to meet each other a couple of times, and it's just a joy to be on with you. I think what you're doing is amazing, and it's. It's really, really cool to see your success. I was so thrilled to see that piece in the New York Times over the weekend.
- [147:46]
Jordy
I appreciate it.
- [147:46]
Ben
Well, you're. You're a hero to us. My favorite. We've said this line on the show before, but when we got to hang out in New York a few months back, you said something to the effect of, I do TV on my way to work. And hearing about your process with this book, it's clear that you're an absolute workhorse.
- [148:02]
Andrew Ross Sorkin
Yeah.
- [148:03]
Jordy
When are you guys publishing a massive, extremely well researched book? Because it seems like this three hours of TV is really taking it out of you guys. And it is. But hopefully we will learn and develop the muscle memory and the flow state and whatnot. There's a lot to learn. This is a long game. We've learned that. So thank you so much.
- [148:20]
Andrew Ross Sorkin
Are doing it. You guys are doing it.
- [148:21]
Ben
It's an honor to have you on the show. I cannot wait to get into the book. We'll have to. We'll be pulling more.
- [148:27]
Andrew Ross Sorkin
I'm just sad that I'm not in person and there's no Gong. I met Gong.
- [148:31]
Ben
Hit that gong for Andrew. One of the most well deserved that we've had in a while.
- [148:37]
Jordy
Thank you so much.
- [148:39]
Ben
Let's do this again soon and have fun on. Have, have fun on the book tour. I feel like you gave us the perfect. The perfect amount.
- [148:45]
Jordy
Yes.
- [148:45]
Ben
Like a little T teaser. A trailer. You still need to get into it.
- [148:49]
Andrew Ross Sorkin
Great to see you.
- [148:50]
Jordy
Thank you so much for stopping by.
- [148:51]
Ben
You're the man.
- [148:51]
Jordy
We'll talk to you soon.
- [148:52]
Ben
Cheers.
- [148:53]
Jordy
And if you're watching or listening, please go pick up the book 1929. It's available now. You can get it on Audible. You can leave it 5 stars. Leave a review. Leave an ad in the review. I think maybe you can technically do that.
- [149:06]
Ben
You probably get banned.
- [149:07]
Jordy
Leave an ad for Squawkbox. Leave an ad for Dealbook.
- [149:10]
Ben
Yeah, there's things you can do to help out. I wanted so bad, badly to put the Audible on last night as I was falling asleep, but I would have had to wait a few more hours. But that's gonna be my night.
- [149:22]
Jordy
Yeah, I think the audible is probably 40 hours long or something. So. Yeah, just do it at 10x.
- [149:27]
Ben
Yeah.
- [149:27]
Jordy
So consider.
- [149:28]
Ben
Consider taking off next week and just. And just. I think walking and listening to 1929.
- [149:33]
Jordy
No, this is gonna be a fantastic book to. To dig into. Tyler Watson.
- [149:38]
Ben
It's so cool. It's so cool because there would have been a way to. Andrew could have done this book in probably a year, two years. He could have sold a ton of copies by just using. He would have made it. It would have been entertaining. But the fact that he went and spent seven years, like, actually doing it properly, even though even, like, he just really cares about fundamentally creating a great product.
- [150:03]
Jordy
Well, we have another offer, another author joining us in the TBPN ultradome. Brian Potter is in the Restream waiting room. He's the author of Origins of Efficiency. Thank you so much for joining us. We love Stripe Press. We love Stripe. We had Privy on. We had Dwarkesh on. We've always enjoyed Stripe Press's books and it's a pleasure to meet you. How are you doing?
- [150:26]
Andrew Ross Sorkin
I'm good.
- [150:27]
Brian Potter
Thank you guys for having me on.
- [150:29]
Jordy
Thanks so much for joining. Would you mind kicking us off with an introduction on yourself and the book and we can go into a bunch of questions about it. But I'd love to just kind of get a little of background for everyone on your journey to writing this book.
- [150:43]
Brian Potter
Yeah. So I am a senior infrastructure fellow. I work for the Institute for Progress, which is like a pro progress think tank. I'm best known to the extent that I'm known for writing this newsletter called Construction Physics, which is about buildings and infrastructure and how to get stuff built in the US and my background, before I did this, I worked in the construction industry. I worked as a structural engineer for about 15 years, like, designing buildings and parking garages and water treatment plants and stuff like that.
- [151:18]
Jordy
Yeah.
- [151:18]
Brian Potter
And the industry always seemed, like, extremely inefficient to me. Like, you know, everything is, you know, so labor intensive. It takes so long. You know, we're doing this similar work over and over and over again. It should be much more efficient, should all be done in factories, blah, blah, blah. And then in 2018, I had the chance to join this, like, big, exciting construction construction startup called Katera that had raised. This was back when Softbank was.
- [151:40]
Jordy
I remember right.
- [151:42]
Ben
Yeah, it was kind of give it up for Moss.
- [151:44]
Jordy
It was kind of a precursor. I think Hadrian was drawing from it now. Yeah, it was the, like, machine shop almost like.
- [151:51]
Brian Potter
Yeah, it was like, you know, it was. This idea is like, you know, construction is inefficient. Because it's not done in factories. Right. So we're going to into factory based construction. It was run by all these former electronics manufacturing guy. So like not like software guys that think that, you know that like oh, I worked at Amazon so I know how to do anything. Right. It was like people who knew about manufacturing and they were going to sort of bring that knowledge to like the construction industry. Right. So they raised a huge amount of money, got a huge check from softbank, raised like 2, $3 billion in venture capital. And it all went sideways. Right. It all, it all went wrong and they, they burned through it and in about three years and declared bankruptcy. And there are various.
- [152:34]
Henry Stern
Yeah.
- [152:34]
Brian Potter
Reasons for that.
- [152:35]
Ben
At what point did you, at what point did you leave?
- [152:39]
Brian Potter
I was there about, until about a year before they went bankrupt.
- [152:45]
Ben
So I was, did you see the writing on the wall?
- [152:48]
Brian Potter
Yeah, I, when I was there I was saying it was like, but my time there was like a year and a half of UPS and then a year of down. And after about the sixth round of layoffs, after our engineering team got cut by about 90%, I was like, need to time to bounce.
- [153:06]
Ben
Saw yourself out.
- [153:08]
Jordy
Yeah.
- [153:09]
Brian Potter
But I wanted to understand why things had gone so wrong. Because part of it is just startups are hard. Building startups that are moving physical things around is very hard. There's various operational missteps or whatever. Whatever. But also I kind of came to believe that sort of the thesis that they had built the company around was kind of either wrong or just not complete enough. Like missing very large chunks of it. Because people had tried to do similar things that Katera had done many, many times. Right. If you go back over history, there's like a huge graveyard of companies that like oh, light bulb will build buildings and factories and it'll be so much cheaper and I'll be able to make a huge amount of money. I'll be the Henry Ford of housing. And just, it just has never worked. Right. There's like this, people have tried this over and over and over again and not been able to succeed.
- [153:59]
Ben
Will it work? Because I have an opportunity to invest. I'm a lucky, I have a lucky opportunity. No, no, I, I, I, I actually did meet, meet a company that, that's taking, taking another crack at this. Do you think it'll ever work?
- [154:11]
Brian Potter
I, I do think it will work. But again, I, I, you need to, I wanted. Why, why specifically it had been so hard in the past and why Katera and so many other companies that have failed and what specifically would need to be true for it to succeed in the future. So it was basically where I ended up was like, I need to understand what specifically makes it possible for an industry to get more efficient over time and what specifically is happening when that that is is occurring and what is what sort of can prevent those things from happening. And once I understand those mechanics, I will be, you know, I will know what specifically would need to be true for some, for some, you know, the construction industry or any industry to sort of improve over time. And so that was sort of the genesis of the book. It's like, what specifically does it take for some process to get more efficient?
- [155:04]
Jordy
Yeah, over time it feels like the entire book is kind of an abstraction on top of just this idea of like learning the learning curve. We've seen this in semiconductors. Everyone who follows like the AI boom is acutely aware of the learning curve that happened at tsmc. But you kind of draw a couple other historical analogies. What stuck out to you is like particularly great examples of this efficiency in going successfully and us actually driving down the cost. And then what were the commonalities between that and what do they all have in common? Basically?
- [155:37]
Brian Potter
Yeah, so I kind of went through and I looked at like you know, dozens and dozens and dozens of people, different industries and, and seeing, you know, how they had improved their operations over time and what specifically was, was changing in them when that was happening. And sort of, you know, and I looked at like industrial improvement systems, right? So like lean manufacturing and like value engineering and all the, in statistical process control and all these other things that like had, you know, specific ways you could try to make something more efficient. And I kind of ultimately boiled all that down to like this cat, this, you know, a list of like a handful of things that you had to do to try to make some process more efficient. If you could do any one of those things, you could kind of make it more efficient. And if you couldn't do those things, those paths were blocked. As it turns out, they are in the construction industry you're. You can't make your process more efficient and it just gets more and more and more expensive over time. And so yeah, I looked at like a lot of different industries. I go really into, you know, Henry Ford and how we sort of drop the cost of the Model T. I look at sort of the evolution of like nail manufacturing, which is in the, in the sort of the 19th century, go back even farther and how they change the technology to make over time to make nails, which started out like hand forged nails, like A blacksmith, like hammer and steel. And they found a way, you know, machines that could sort of emulate that process. And they replaced those machines with even better machines and so on. So there's like dozens and dozens and dozens of examples, examples in the book of sort of specific things that have gotten cheaper over time and the lessons that we can kind of learn from those things.
- [157:07]
Jordy
How naive is it to just say what's remained stubbornly high cost wise? Housing, medicine, education. What do those have in common? Regulation. How naive is it to just throw regulation as the problem at those particular industries?
- [157:26]
Brian Potter
That's a big part of it for sure. I mean, the problem is that like everything has gotten more regulated. Right. Like manufacturing. Manufacturing included. So it's like, that's like part of the puzzle. But it doesn't really tell you the whole thing because even in the problem, you know, to take it back to construction, the problem of like construction productivity and not getting cheaper to build stuff is really something you kind of see around the world. I have a graph in there that's like construction costs in like a variety of different countries and they all kind of this scary line of going up and to the right over even the.
- [157:59]
Jordy
Countries without building codes and only onerous.
- [158:02]
Brian Potter
Or hoa less labor. Yeah. Or like different regulatory regimes stuff. And there's certainly places that like do better than the US in, in various things, like in various ways of building. The US is like very far from the efficient frontier, but we have a very hard time of like pushing that efficient frontier forward. So like regulation is like a big part of it. But that's kind of one of the sort of things I think a takeaway is from the book is that it's not just regulation. Like you can have all the, you know, remove all the regulation you want, and you'd still run into these sort of various physical constraints and market constraints that prevent these sort of efficiency improvements in some cases.
- [158:40]
Jordy
How are you thinking about energy in America? We've, we've, we've gone through this AI boom now where we've scaled up the existing capacity of data centers, we're building new data centers. And it feels like the last link in the chain is can we build 100 nuclear reactors in America in 2030 to stay on track with like the most aggressive projections. Is there anything unique about. Obviously energy production is a construction problem, but is there anything unique that you found in the energy industry that folks might be able to learn from?
- [159:13]
Brian Potter
Yeah, I'm. Well, you know, I write a lot about energy on the newsletter. I don't have a background in energy. So it is a lot of me like groping my way towards like some understanding of how this industry works. I'm a really big solar guy. Solar has like a really lot of nice properties that like, makes it easy to sort of make efficiently at like very, very large scale. There's this really interesting paper, but basically it's like big graph of like the sorts of energy technologies that have become cheap and the sort of energy technologies that are not to become cheap. And the ones that have become cheap are these sort of things that like you can make repetitively in very large volumes and you don't need like a lot of customization of. And so like solar panels which are like, you can make in like really, really, really, really enormous numbers and you can kind of plop down wherever it doesn't need a lot of like site specific customization are kind of in this like very cheap quadrant and then something like a nuclear reactor, but you make it like much, much smaller numbers and like needs a lot of like specific design for the specific reactor that you're building is sort of in the much more expensive quadrant. And so solar and like the batteries which like really complement them really nicely is like a really good way to sort of make this stuff really cheap. These cost curves have like gone like down like a lot and there's like no sign that those are stopping anytime soon. And so I'm, you know, that's just, you know, those. This aligns with like so much of what we know about what it takes to sort of make something inexpensive that I kind of see that like biting off a very large chunk of the, of the energy that we produce in the US Assuming, you know, take it back to regulation, assuming that sort of regulation interferences don't kind of get in the way.
- [160:57]
Ben
How often did you find capital being a constraint lead to more efficiency? I think every startup founder has an example of a time when maybe if they threw 100 people at a problem, they would have gotten a different solution, but they only had a handful. And so they were able to create some novel, a more efficient way of doing something. Or we saw this with Deepseek and having potentially fewer chips and creating a more efficient architecture. Was that a common theme at all?
- [161:33]
Brian Potter
Yeah, it's interesting. I think there's kind of like two sides of it. One is that in some cases a repeated theme of the book is that scale is really, really very important and the more you can make of something, the more opportunities you have to make that less expensively and often Scale is very, very expensive. Right? So one of the story of container ship shipping over time is a story of like needing really, really enormous investments to like build these big giant ships, which are like cheaper per container that they're transporting, but very expensive overall. And also like really, really big, expensive terminals to sort of handle those ships. And so only like a certain number of like, countries could like invest in these like giant terminals that were needed to sort of service these huge ships. And so, and so costs of transporting these goods fell a lot. But there was winners and losers who sort of gained from this technology development and it was really the people that could afford to put the money into it to do it. But then on the other hand, you also see cases where kind of like you talk about with Deep seq, people working under these constraints were able to come up with really improved ways of doing something that were much cheaper and much better than what was, what came, what came before. So a kind of example of that would be like Toyota's manufacturing methods, which, like Toyota production system, which evolved into lean manufacturing. Those kind of were created in this environment where like, they couldn't develop these like mass production methods that Ford had used because their car market was so much smaller and it was so much more varied. They couldn't just make a million of a given model or whatever that they had to, to find ways of like producing this stuff efficiently that didn't require this like massive capital investment, basically. And so that was sort of the genesis of that, those, those ideas. And so, yeah, I think there's definitely cases where, yeah, you need like a lot of investment to sort of find ways to make this cheaper. But then there's also cases where it's like also working under constraints of not very much investment has, has been important as well.
- [163:39]
Ben
Are you at all optimistic that this data center boom will teach a generation of people that you can build big things quickly and efficiently if you just basically put your mind to it? Because there's like a lot of, from, from an energy standpoint, just like, you know, if you look at what, what Elon has done with Colossus 2, he's basically doing the impossible. A lot of people would have like looked at that project and said it's not possible. And so that sort of, it feels like that sort of mindset of like we're just going to make it happen is being applied to data center development. But then presumably those people could say, I'm going to build a bridge and they can imply that same kind of approach elsewhere.
- [164:27]
Brian Potter
I certainly hope so. We're certainly building like an enormous amount of this infrastructure. Like it's really, really impressive. There's all these crazy stats like you know, data center spending is now exceeded, like office building spending or something like that, which is, which is totally wild. I guess one thing that worries me is that historically people have been like not really cared about data centers. They've been happy to just like let them get built and the jurisdiction to sort of collect the tax revenue for it and not really work worry about it beyond that as like the build out of them is like going forward and there's like more and more of these data centers and they're bigger and larger. You're really starting to see like a grassroots movement of people like you know, the NIMBY sort of now being opposed to data centers in a way that they weren't before. So like Virginia, which historically has like been, you know, a major place where data centers get built and has basically been fine with them getting built there, now you're starting to see like residents opposed oppose them more and more and you're starting to see grassroots movements around in different states springing up to oppose these things. So that worries me a little bit and I hope the sort of forces of getting these things built and enthusiasm about building infrastructure are stronger than that. But it always seems like the NIMBY forces are quite strong. So hopefully they don't build momentum.
- [165:56]
Ben
They're op.
- [165:57]
Jordy
I have one last question. There's this post by Rune who's talking about Dan Wang's new book and he says the general elite consensus now is that industrial process is a technology that lives in the heads of people. And he goes on to say that it was a mistake to let so much low value industry be offshored due to the loss of tacit process capital. And I was just wondering, wondering what your thoughts were on this idea of industrial process knowledge, that there might be a few key people that actually know how to build something at scale and just what the ratio, how steep is the power law of human capital when it comes to large scale industrial manufacturing efforts?
- [166:39]
Brian Potter
Yeah, I think it's dead on. I think that's absolutely very important. And I talk about that at various points, parts in the book, how it's often really hard to transfer like manufacturing or production technology from one place to another place in part because it's hard to like pick up and lift these process knowledge which is just in the heads or like embedded in this web of relationships. And so it doesn't necessarily even exist in explicit form. Right. It's Just like, this is the system that turns out to work very well, and you can't just, like, recreate it because we don't essentially know how it came to be in the first place. And then, you know, we talked. You talked about a little bit of the learning curve earlier. And that's kind of this really similar idea where a lot of your improvements to some technology over time come from just like the factory floor and learning how to sort of do this better and better over time. But it's very coupled with actually physically doing the work. And so that's one thing that, yeah, I think is really important, is that often sometimes just technological progress is coupled to sort of this, like, process factory knowledge, of actually having the experience doing things. One really fun sort of example of this is during the early days of the space race, where the US Was having, like, a really hard time building their rockets. And there's a part where, like, you know, because of various political things, the Navy was going to send up their rocket first. They were going to be, like, the first ones to sort of launch a US Satellite into space. And Werner von Braun, who is the German rocket scientist who then had been brought over to the US and was working for the army, he goes to some, like, you know, military leader and he says, look, you can tell these Navy guys they can do whatever they want. They can take my rocket and they can paint Navy on the side of it and do whatever they. They want, but they need to use my rocket and not theirs because my rocket will work and their rocket won't. And then what ended up happening was they didn't listen to them and the Navy launched their rocket anyway, and it didn't work. It blew up on pad. And then so finally they listened to Werner von Braun and just launched his rocket. And that's when we finally got a satellite into space using Werner von Braun's rocket. And then, of course, Wernher von Braun was like a major force in the Apollo program as well. So it was like, you know, the journey German. The German rocket knowledge that had accumulated during World War II was like, very, very important in both the U and both the Soviet and the US Their early rocket development efforts were basically built on this German knowledge that had been accumulated. So this process knowledge and like this, you know, expertise that gets embedded in the heads of these. Of these people working at the sort of forefront of technology is not easy to sort of recreate. I think it's very, very important.
- [169:24]
Jordy
Well, thank you so much for stopping by the show. The book is Origins of efficiency from Stripe Press. It's available now for purchase. Highly recommend picking it up one click on Amazon. Thank you. Stripe Checkout. Hopefully.
- [169:35]
Ben
Hopefully.
- [169:36]
Jordy
We will talk to you soon. Have a great rest of your day.
- [169:39]
Andrew Ross Sorkin
Thanks.
- [169:39]
Jordy
Thank you so much.
- [169:40]
Ben
Cheers.
- [169:40]
Jordy
Brent, really quickly, let me tell you about adquick.com out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only Ad Quick combines technology, out of home expertise and data to enable efficient, seamless ad buying across the globe. Speaking of founder mode, we have a founder in the Restream waiting room. Let's bring him in to the TPPN Ultradome.
- [170:01]
Ben
There he is.
- [170:01]
Jordy
How are you doing? Good to meet you.
- [170:03]
Parry Singh
Hey, I'm doing great.
- [170:04]
Ben
How are you guys doing?
- [170:05]
Jordy
We're doing fantastic.
- [170:06]
Ben
Fantastic.
- [170:06]
Jordy
Kick us off with an introduction on yourself.
- [170:08]
Ben
Big, big news company.
- [170:09]
Jordy
The news. We're excited. Yeah.
- [170:12]
Parry Singh
I'm Parry Singh. I'm the founder and CEO of Flow Engineering. Engineering Flow is a collaborative development platform specifically built for next generation of hardware companies. Our customers design things like rockets, airplanes, cars, nuclear reactors, and they use Flow to design, build, test, and iterate massively faster than they can do today. Basically, the way to think about it is we're taking the last 30 years of software development practices, everything from agile to continuous integration, continuous testing, and we're bringing that to the design of massively complex, complex hardware products. Our news today is that we've raised our Series A with Sequoia Capital.
- [170:49]
Ben
How much? How much did you raise?
- [170:51]
Parry Singh
$23 million.
- [170:53]
Ben
There we go.
- [170:55]
Jordy
Congratulations.
- [170:57]
Ben
Amazing. I love that you started building hardware yourself and then figured out along the way, I got to build software, I got to build SaaS for this.
- [171:09]
Jordy
What are you replacing most of the time? Is it a system?
- [171:13]
Ben
Am I getting it right? You basically built an internal tool for yourself initially while you guys were building rocket engines, and then realized like, hey, seems to be pretty valuable.
- [171:22]
Parry Singh
Yeah, exactly. So, like a little story of the company. I'm a mechanical engineer. I became an engineer because I wanted to build machines that mattered. Went into the industry, went to companies like BA Systems and BP and just realized the fundamental approach to designing hardware was completely up of date. So the company started out as a hardware company, not a software company. We were called the Rocket Company. We built the world's fastest design consultancy for hybrid rocket engines. The best people in the world could go from requirements to detailed design in 12 weeks. We could do it in two hours. And the reason we could do it in two hours is we built this internal platform for ourselves. Called flow that massively integrated and accelerated the design process and that's what became has become flow today.
- [172:02]
Ben
So are you, you're just simulating physics. What is the actual. I imagine you're building a workflow and then are you able to get a good read on if the process or the product will work without actually testing it in the real world or what does that look like?
- [172:23]
Parry Singh
Yeah. So let me give you the 101 on hardware development versus software development. In software development we have Kanban boards and tickets and you build the spread, you burn it down and you go for it. When you're designing something like a rocket or an airplane or a car, a nuclear reactor, it's much more complex. The way that we fundamentally design and collaborate are using these things called requirements. Let's say you're building a rocket, you'll say, hey, I need to get this much payload to this delta, to this orbit. And then to do that I need to design this first stage and this second stage. And to do that, and you go all the way from these top level requirements to very, very low level temperatures, pressures, masses and design criteria that engineers will use day to day. The big problem is that when you're designing like a humanoid robot, or you're designing a reusable rocket, or you're designing a self driving car, you don't know whether those requirements can be met or not. Like 10 years ago, you would have these fixed requirements you'd be able to execute against them. You'd build a big Gantt chart and you'd burn it down in a modern, massively complex system. Our products are so complex that we have no idea whether we can design it. The requirements are changing on a nearly daily basis and the design is changing on a nearly daily basis too. So what flow does is a single source of truth for all of the company's requirements and systems information. And we glue all the requirements together, all the design together, and we have continuous integration between the requirements side and the design side, which enables teams to design and propagate changes much faster than they can do today.
- [173:48]
Jordy
Are you aiming to go straight to Fortune 500, the Fortune 100, the biggest companies in the world that are manufacturing at scale and maybe it's a lot of steak dinners and a really hard pitch. We get a couple of those clients and you're in business. Or do you want to focus more on startups, smaller companies, scale ups? Like, what's the sweet spot for you right now?
- [174:06]
Parry Singh
Yeah, we think about this very deeply. We regularly turn away Boeing and Airbus and These massive conglomerates. So here's the way to think about it. The hardware mogs.
- [174:20]
Ben
You'Re like sorry, sorry, we're busy helping the next generation. Generation straight. The next Boeing. Yeah, exactly.
- [174:27]
Parry Singh
So the way to think about it is the hardware engineering industry is going through a generational change right now and it's this generational change from old school waterfall. Think NASA, Lockheed Martin to new school agile. Think SpaceX Nandural. The way that SpaceX Nandural and Joby and Archer work are much more like software companies than traditional legacy primes. They don't top down, they design bottoms up. And things are changing on a nearly day daily basis. We're very, very, very specifically built for that new way of working in the same way this happened in the software engineering industry. So in the 2000s we went from old school waterfall to new school agile and companies like GitHub came about to serve that market. Now GitHub didn't go to IBM and say we're going to build you a slightly better Gantt chart. They went to companies like Google and Facebook when they were five people and they said this represents the new industrial industry. And 10, 20 years from now these small companies like Google and Facebook will be the mass market. And then when IBM and Oracle wake up, they will change how they work and they'll come to GitHub because they are changing to an agile way. So that's what we're doing. We're exclusively focused on next generation aerospace, nuclear defense companies. We're growing very, very quickly with those guys and we're making that workflow as good as it can be.
- [175:42]
Ben
How is it going in the Gundo? What's the update?
- [175:46]
Parry Singh
Yeah, so this is like a global movement, but as you mentioned, the epicenter of the global movement is El Segundo which is in la. So everything from like rockets, airplanes, robots, cars, autonomous submarines are being designed like the, the five or ten square miles which is El Segundo. El Segundo is, is amazing. I think it represents something like 70% of our customers. And the companies in El Segundo design and iterate at a speed that both and Lockheed just can't comprehend. They're designing massively complex systems. They're designing and iterating faster than anybody thought they could do. And that is the reason they will become so much more competitive than the traditional primes that the traditional primes just can't keep up.
- [176:29]
Ben
And I imagine what an advantage that is for you, being able to walk a few blocks and see your product in action and actually get that real time feedback and then just be on that same iteration cycle with your customer. Customers. Yeah.
- [176:41]
Parry Singh
We have a kind of crazy story which is most of our like most of the other tools in the market came from El Segundo. We actually came from London and we were engineers and we wanted to build and the European market just didn't want speed or at least the market back five years ago didn't want speed. So we sold into traditional legacy companies and they fell in love with the dream, the mission, but they didn't really, they didn't really, really use the software. And then the El Segundo market found flow and they pulled us into it. And what started out just one or two companies working in this crazy new way, designing and iterating like a software company have ended up becoming the new market and that represents a really important part of our customer base.
- [177:24]
Jordy
Well, congratulations on the funding news. Congratulations on the progress and good luck to you.
- [177:28]
Ben
Thank you for when you announce the be come on over 20 minutes or 20:30, 30 minutes from the Gundo Hollywood.
- [177:34]
Jordy
We'd love to have you.
- [177:35]
Parry Singh
Oh sweet.
- [177:36]
Henry Stern
I'd appreciate it.
- [177:37]
Jordy
We'll talk to you soon.
- [177:38]
Ben
Have a good day to the whole team chat soon.
- [177:42]
Jordy
And when you announce that series B, you know what you got to do.
- [177:44]
Ben
I know.
- [177:45]
Jordy
Go over to getbezel.com your bezel concierge is available now to source you any watch on the planet. Seriously. And watch cape, take a couple mil off the table in secondary, put in an FP journe, put it in a Rolex Daytona, deploy it, put it in a pack, get a couple aquifers before.
- [178:01]
Ben
You before you get the starter home.
- [178:03]
Jordy
Yeah.
- [178:03]
Ben
Get a starter hitter.
- [178:05]
Jordy
Starter hitter and then book yourself a vacation on wander.com find your happy place. Book a wander with inspiring views, hotel, great amenities, dreamy beds, top tier cleaning and 247 concierge service. It's a vacation home but better. It never gets old. Jordy.
- [178:22]
Ben
I just saw a post that I'm not going to read on the timeline. That is funny. But anyways, cool story. Cool, cool story. No, what I was going to say I was going to check the timeline before we get off we have to enter our fourth and then fifth hour of podcasting. So glad Jackson Dahl is I believe already here at the in the ultra dome breaking news and we're going to be doing his podcast right now so. So head over there, subscribe, go shoot.
- [178:51]
Jordy
Him at dmz on to dialectic and then you'll hear us talk more if.
- [178:55]
Ben
You'Re not sick Yeah. I don't know when this episode will come out, but if you. If you message Jackson now or you comment on one of his posts, I'm sure you can ask some questions there. And we hope you have a fantastic evening. We will be back tomorrow for another beautiful day of technology.
- [179:12]
Jordy
Hopefully it's another cozy, warm day and we can put the fire on.
- [179:14]
Ben
I know. I like that fire.
- [179:15]
Jordy
I really enjoyed the fire.
- [179:16]
Ben
We should have the fire on for Jackson's podcast.
- [179:18]
Jordy
Yeah, we'll consult with him. Thank you so much for watching.
- [179:21]
Ben
Awesome.
- [179:22]
Jordy
We'll see you tomorrow.
- [179:22]
Ben
See you guys tomorrow. Cheers. Thank you.