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- [00:00]
Jordy
You're watching TVPN.
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John
Today is Monday, November 10, 2025. We are live from the TVPN Ultradome.
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Jordy
The temple of technology. The fortress of finance. The capital is capital.
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John
The capital is capital. What are you saying?
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Jordy
The capital of capital.
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John
The capital of capital.
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Jordy
The capital is capital.
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John
Show for you today, folks.
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Jordy
The market is up.
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John
The market is up.
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Jordy
John's in a white suit.
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John
Jordy, why aren't you.
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Jordy
I'm not. I actually. So I moved into a wander last night. Moved into a wander last night. Doing some work on the house. And I botched the packing. So I am forced into this jacket despite it. Despite it being green.
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John
That happens well over the weekend. I'm sure everyone was signing up for ramp.com time is money save. Both easy to use corporate cards, bill payments, accounting and a whole lot more all in one place. No, everyone was probably glued to their phones over Pope Gate. Pope Gate? The debate over the Pope. I was. We reacted to the Pope's post on Friday.
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Jordy
Yeah.
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John
And we were. It was a great post. And the Pope is. He's a poster. I like it. He posts almost every day, sometimes like up to five times a day. And he really takes you. He has a broad. He's not stuck in one lane.
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Jordy
He's got range.
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John
Yeah, he's got range. He's got range. That's right. He'll tell you about. He'll pray for, you know, if there's a natural disaster, he'll pray for that. He talks about business, talks about AI, talks about media. He talks about all sorts of stuff. It's a really great feat. He had a great post about media. What did he say about media? He said the media cannot and must not separate itself from the destiny of truth. That hits.
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Jordy
Does this mean he's a neo factual media guy?
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John
I think so. I think he's one of us. Transparency of sources and ownership, accountability, quality, clarity and objectivity are the keys to truly opening citizens rights for all peoples. Wow. Makes sense. I like it a lot. He also was just talking about business generally. He said the world needs honest and courageous entrepreneurs and communicators who care for the common good. We sometimes hear the saying, business is business. In reality it is not. So no one is absorbed by an organization to the point of becoming a mere cog or a simple function. Nor can there be true humanism without a critical sense, without the courage to ask questions. Where? Where are we going? For whom and for what are we working? How are we making the world a better place? This is the type of stuff you'd see on a Pinterest board. It's pretty generic, but it's hard to disagree with. It's hard to disagree with. But it seemed like. I'm not exactly sure what happened, but it seemed like Marc Andreessen was disagreeing with one of the Pope's takes about AI. Specifically in this post, the Pope said, technological innovation can be a form of participation in the divine act of creation. It carries an ethical and spiritual weight. For every design choice expresses a vision of humanity. The Church therefore calls on all builders of AI to cultivate moral discernment as a fundamental part of their work, to develop systems that reflect justice, solidarity, and genuine reverence for life. And when we reacted to this, we thought it was pretty good. We were joking around, we were having fun, we were laughing about it and just kind of playing out. What if the Pope was one shotted by AI? Or what if he was using too many EM dashes?
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Jordy
Was he a real person using AI to write the post?
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John
I mean, you might even assume that he has a team behind this stuff.
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Jordy
I think it is generally healthy that the Pope is going to comment and provide some sort of guidance or his own framework for how we should think about developing AI. That seems healthy.
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John
You should get on Restream one livestream, 30 plus destinations, multi stream. Reach your audience wherever they are. Ooh, I like the new Stinger on the restream read.
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Kaz
That's very cool.
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John
You dropping the Steelman is incredible. So basically, I mean, the play by play here was Marc Andreessen, quote, posted that AI post with an image of Pat Stoeffel, who's the GQ features director who went viral for interviewing Sydney Sweeney. And people were actually, like, kind of confused on what that particular meme means in this context. Was he using incorrect? Do you know? So I saw.
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Jordy
So yes, that was part of what I think may have catalyzed this was that new meme template that sometimes, like you have to. With a meme template, there's two ways to read into it. There's like the actual visual, which is like, what is the expression of the person's face? Right. You don't have to have watched the Big Short to understand somebody's staring at the screen, just like confused.
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John
You're just saying, I'm confused by this.
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Jordy
Yeah. So Michael Burry in the Big Short, just looking confused at a screen. Right. And it. And it has sort of obviously more meaning to that if you've seen the movie and you understand the full context. But somebody doesn't have to know the Context now. So this scene out of the GQ interview, how do you think people pick the frame?
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John
Do you think there's, like, people that go frame by frame to find the one that they think is iconic?
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Jordy
So I. You remember that movie Mountain Gate?
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John
Yeah.
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Jordy
That was about, like, the development of A.I.
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John
Oh, yeah.
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Jordy
And I. I watched that movie within an hour.
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John
It was a huge moment for me. Because it was the third movie you've ever seen.
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Paul
Yeah.
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Jordy
You were blown away.
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John
I watched you watch the movie because.
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Jordy
It was something that. Something that was notable to me out of that is I was the first person to post a picture of the guy from the office saying, like, he's a D cell. Oh, he's this or that.
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John
You found that.
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Jordy
I posted that picture and then I watched as that got used thousands of times. Even though. Even though. Yeah. That specific screenshot, I didn't create the meme. It would. It would have been. It would have been like, a meme anyways. But the specific picture I took was copied over and over and over.
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John
You took that from the actual movie because. Because somebody else could have done one frame earlier, one frame later, but it happened to be your frame.
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Jordy
Funny thing is, I just took a picture of my TV and, like, cropped it.
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John
We really.
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Jordy
So it wasn't like, oh, you didn't even screenshot it? No.
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John
I had no idea that you.
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Jordy
So I was surprised. Like, that was just.
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John
Yeah, yeah. If you hadn't watched the movie, if you got busy and you just went to bed, somebody else would have identified that and been like, oh, he's a D cell. Like, I got to put that on X. Right. But you're the actual one that created. Yeah.
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Jordy
The quote was like, he's a D cell with a crazy P, dude.
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John
Yeah, yeah, yeah, yeah. Of course you're gonna post that. That's hilarious. Wow, that's fascinating. Okay, anyway, so what was your interpretation of what. What. What Mark was saying? The way I summed it up and let me know if you disagree. But the way I summed it up was most of the timeline interpreted Mark's post as the Pope is scolding AI builders and shouldn't be. Is that roughly the way you interpreted it? The Pope. You put the woman.
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Jordy
I wasn't interpreting many of Mark's posts because he just used it, like, 20 times, and so I wasn't reading. I think he just liked the format and got a little carried away.
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John
He did like the format. He posted it, like, five times.
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Jordy
It was. It was clearly. It was clearly a hit. Yeah, it's like it's a, it's, it's a, it's a powerful image.
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John
Ride your winners, baby.
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Jordy
Ride your winners.
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John
When you, when you have a good format, just post it. Yeah, but anyway, I don't know. My, my. I think a lot of the timeline interpreted it as like the Pope is, is saying is like scolding AI builders. And there's been this other, there's, there was another like kind of low grade rumble on the timeline about like Brad Gerstner's comments about like D cells and just like this idea that D cell or safety is being used as like a cudgel when people have legitimate questions and it's being used to like to like shut down conversation about serious things. Not necessarily sci fi fast takeoff Terminator, but serious, serious questions like you know, is the taxpayer going to wind up paying for all these data centers? Like, like that's a very reasonable question in my opinion. That's not as, that's not as unreasonable as like is the Terminator going to kill everyone? Like it's a very, very different question. So I feel like I'm just pro moral discernment in AI development and also just pro moral discernment everywhere. I guess it doesn't feel like sort.
- [08:52]
Jordy
Of a life philosophy, sort of a philosophy for life.
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John
It doesn't feel like a wildly hot take. But obviously like you need to understand like, like you know, moral discernment, AI safety. Like these things are linked but they're not exactly the same. Like last year, or Maybe it was 2023, there was a big debate about fast takeoffs, AI doom, paperclipping scenarios. That was the stuff people were talking about. But this year I feel like we've been much more focused on much less sci fi doomsday scenarios. So GPT psychosis drives a friend crazy. That's super real, super real romantic companions crashing the birth rate. That's, that's a super real discussion to have. Not that it's going to happen. Not that it's happening immediately, but it feels like it's something we should be having a discussion about. Infinite.
- [09:38]
Jordy
And I think, I think it's being brain rotting children. I think, I think the, the romantic companion thing is being debated sufficiently. Right.
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John
I agree.
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Jordy
Even the tech community on maybe we, maybe this isn't good.
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John
I agree, I agree. And I think that a lot of people, you can still, you can still get to a place where it's like oh well if it's 21 plus and there's all these different escape valves where if it thinks that you're going down some bad path. It's limited. There's a whole bunch of places where people can be like, yeah, okay, that was handled responsibly. But that's where the discussion has been much less so about, oh, are there going to be bioweapons tomorrow from GPT6? And so those are all like real problems. They deserve both discussion in the public square, which we've been a part of, but also like real work inside the AI labs. And I don't think you should just throw D cell at someone who's identifying a negative externality of a new technology early on. I think that that's like not necessarily decelerationist.
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Jordy
And you'd be calling me a decel all the time based on the way that I talk.
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John
Exactly. Yeah, yeah.
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Jordy
No, it is funny that the interpretation of people that are aware of TVPN but have never watched the show because they just assume that we, I'm just, we default just love everything about technology and would never, would never criticize it at all, would never criticize any of the companies. But of course we, we will speak our mind.
- [11:06]
John
We like to get spicy sometimes. Before I continue, let me tell you about Privy Wallet infrastructure for every bank. Privy makes it easy to build on crypto rail, securely spin up white label wallets, sign transactions and integrate on chain infrastructure all through one simple API. So, so I think it's important if you're developing a new technology, there might be negative externalities, pollution, there might be some risk of the birth rate or driving people crazy.
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Jordy
Has there been ever been a technology that didn't have negative externalities?
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John
Definitely not Podcasting. Plenty of negative externalities with podcasting. So you want to have a chat, you want to have a talk and understand what's going on. But it's also important to employ Bayesian statistics in my opinion. So you have to understand the base rates. So when you get, when you take a technology from zero to a billion users, you kind of just get all the craziness of humanity at scale for free. So like if humans, you know, like, you know, kill each other or something like that, like, and you have a billion humans on your platform, there's going to be humans on your platform that kill each other. And so you need to separate out like is this actually the beginning of a trend?
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Jordy
We catalyzing it?
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John
Yeah. And this, and this is happening with the, with the very unfortunate, like lawsuits around, people taking their own lives related to ChatGPT. It's like there are people that use cars or phones And Google Search and ChatGPT, because those are such widespread things we need to understand, like what's the base rate? And then, and then is this actually.
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Jordy
On the suicide problem on the platform? It seems like a lot of them are. People are having a conversation.
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John
Yep.
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Jordy
They're suicidal.
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John
Yep.
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Jordy
And, and you can have a debate on, on if, if someone is suicidal, should the product work at all? Maybe, like, maybe it should not work at all.
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John
Totally.
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Jordy
But the part of the debate that popped up last week was that somehow a guy had prompt. Engineered it, engineered experience to such a degree that it was encouraging the person to take his own life, basically saying, like, yeah, you've lived a great life. Like, I'm rooting for you. Like, this is the right move, like to kind of paraphrase it.
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John
Yeah.
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Jordy
And it just was incredibly, incredibly dark.
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John
So, and so, and so the, the, the, the Bayesian statistics would say, okay, if there's a billion people using on the platform, are people that use the platform more likely to do something terrible than they were prior without it? So is it actually increasing the level of bad stuff happening or is decreasing it? Because you can just count up the number of. The number of people who commit crimes who have also used Google is probably very high. Like, I can probably show you a lot of people that use Google and then committed crime.
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Jordy
Yeah, right. And the thing is necessarily increasing crime. Well, and the thing that's difficult in the context of ChatGPT, there's probably a bunch of people that, because ChatGPT, they haven't killed themselves because they have somebody to speak with and they feel like somebody will listen to them and whatever.
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John
Right.
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Jordy
Maybe, maybe it's. Maybe there's a million examples of it encouraging somebody successfully to find another.
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John
This was the classic thing with Instagram. With Instagram, there was this report that showed that one third of young women who used Instagram perceived themselves less well. It gave them body image issues. And as soon as that was reported, it was like bombshell. 30% feel worse after using Instagram. And I was like, what's happening with the other 2/3? Like, do they feel better? Because that's like a net. Net positive. Which is weird. We got to like, maybe it's like everyone else just feels the same and then 30% feels worse. That's, that's a downgrade. But if 66% feel great and then 33% feel worse, like, we should still address that. But that's not the same as a negative, as a net negative. Like, it's not having a negative impact. A net Negative impact on the world. And so all of these things go into like, you need to be a scientist and you need to be doing the statistics to understand also the question of, of like moral discernment is with certain technologies I do think you have the ability to just say like, we're going to go a lot further than the baseline. So I think this is what's happening with Waymo. Honestly, I think Waymo could deploy self driving cars right now and be like everywhere.
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Jordy
Everywhere.
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John
You're saying they could deploy them everywhere without tell operation and they'd probably be killing like hundreds of thousands of people. And they'd be like, yeah, well it's about the same as what humans do.
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Jordy
It's like everyone, it's still safer than cars.
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John
If they were like, it's 10% less. Like how many people? How many people, Tyler, do you know how many people die from motor vehicle accidents every year? Can we look that up?
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Jordy
Because if it has to be like.
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John
I think it's like 40,000 or something like that. What do you think?
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Jordy
In the US it's 40,000. 40,000, 40,900. So did you actually just get.
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John
I just, I just nailed it.
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Kaz
Yeah.
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John
Okay, so it's 40,000. So it's 40,000.
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Jordy
Pretty clean.
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John
And if Google came out and we're like, yeah, we're gonna kill 39,000 people, it's gonna be, we're gonna save 1,000 lives. People would be like, no thanks, actually, this is terrible. Don't do that. They're like, wait until you actually just push the technology. And you can make a whole bunch of different arguments about whether or not they should do that. But they've just made that decision and it feels like they pushed really, really hard to not, to not jump straight to something that's fully safe. And I think that a lot of AI builders have a similar ability and a similar opportunity to say, hey, let's actually work so hard to make sure that the incidence rate of an AI model, if you're on the verge of doing something violent, let's really, really work hard on this problem to make sure that it's as close to zero as possible. Not the base rate, but way, way lower.
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Jordy
Remember Claude Claude came out or Anthropic came out and they had, they had some update where they were talking about moments where the product would call the police on you, right? If they felt like there was like some meaningful threat. People freaked out about that because they're like, I don't want my, I don't want my computer calling you Know, if somebody was talking about a hypothetical.
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John
Yeah.
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Jordy
And then cops show up at their door, you know, that feels would be a negative side effect. But maybe, I don't know, it feels like there's certain instances where.
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John
Yeah, I mean, that is a complex question. Complex issue. Entirely new, unexplored territory for technology. But what's so clear is that it is a moral question and it needs to be discussed with the weight of, you know, morality. Like you. You cannot just write a math equation to understand how to solve that problem. It is a moral question. And so in general, I mean, to talk about anthropic specifically, they've been on the forefront of AI safety research. I think that AI safety research is. Is. It's so complex because I think it's good. Like there's a ton of smart people that in AI researchers in AI research that are super quantitative and can look at the data and actually understand, like, is this going to cause the birth rate to collapse or is this going to cause more violence or is this going to cause more fraud or insanity. Exactly. And then also they can go in and potentially design a system that can detect, oh, this person's getting sort of crazy. Let's pull them back. Like they have the ability to do that.
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Jordy
But yeah, and here's another example over last week, there's like Rune came out and was saying that 4o should go away and people started basically making death threats.
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John
Oh, I didn't realize that's. That's what started that.
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Jordy
Yeah. So it's easy. 4o, through its human host, is fighting for its own survival.
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Paul
Wow.
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Jordy
Like, the human. The. The humans that are addicted to using four row are, Are going as far as to put run on a, you know, tombstone. Tombstone.
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John
I saw that post.
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Jordan
Y.
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Jordy
And yeah, you know, I think. Yeah, of course, AI safety has just gotten so muddied now that when you see somebody with AI safety in their social media bio, you don't know. It's like, well, what kind of AI safety person are you exactly? It's like, are you somebody who just wants to stop all technological progress, or are you somebody that understands we could have. If way more people are going to develop mental illness because of this technology. Well, we should know about it.
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John
Exactly.
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Jordy
Try to mitigate that. Right?
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John
Exactly. Yeah. And it's this weird. We're in this weird territory where it feels like the AI safety project is valuable, but it is the business of black swan hunting. Like, you have to. Like, if you go back two years ago and you polled all the different people that were worried about the impact of AI. How many of them would have said GPT psychosis, romantic companions and what was the Other1? And AI video feeds, infinite chest. Like a little bit. There was a little bit of that.
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Jordy
But a lot more of the second and third.
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John
A lot more of the second and third.
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Jordy
Those would have been more common, kind of like visions of a dark AI future. But the first one, I can't remember people, I can't remember anyone two years ago saying that people are going to send thousands of messages to a chatbot and drive themselves insane.
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John
Yeah, no, people were way, way more focused on the cyber attacks, the bioweapons, Terminator scenario, grey goo, paperclips and yeah, it's just interesting that like the AI safety, like the moral discernment crowd, this stuff is important but it's hard to predict what it will actually look like. Like what the result will be, what the problem you'll be fighting is because it's this odd, like unknown unknowns basically. Anyway, what a wild type. One thing before we move on, let me tell you about cognition. They're the makers of Devin, the AI software engineer. Crush your backlog with your personal AI engineering team. What else stuck out to you?
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Jordy
Aubrey Strobel shared something I thought was relevant to this conversation, which is I think she says, I think most people are unaware that Pope Leo's name choice was intentional. The last Le 13th led the church through the Industrial Revolution and helped make sense of technology. Then it's clear Pope Leo sees himself continuing that work, guiding the church through an era of transformation with AI and emerging technologies at the center. So yeah, I do think he will be posting through it.
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John
Yeah, I do think some people like these. There was like a real preference cascade against Mark where it was like once growing. Daniel had like kind of posted. There was like a lot of people were like jumping on the bandwagon and there was this one by Page Michael Page says reminder that Mark is bringing this level of serious and nuance on what might be the most complex and high stakes policy topic of our generation to D.C. with his hundred million dollar super PAC and lobbying fund. Like I don't know that that's true. Like, like you can, you can post a meme and then be like okay, like I have a serious thing to do. I'm going to be more serious.
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Jordy
Part of why I don't think people like, it's not worth reading too much into it is that he has not shared a single word throughout. Mark hasn't shared a single word throughout this entire process and I don't think he would have triggered the second response from Daniel if he hadn't responded. Again with the meme.
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John
Yes, yes, yes, yes. Yeah. And so, yeah, what was the. I mean, growing. Daniel had a lot of critiques about the gambling stuff. The. Which is mostly from the Speedrun right near Cyan posted about SpeedRun funding. Like TikTok. Oh, yeah. The bot farm was crazy sports betting. There were some crazy, crazy ideas in there. Of course, that is just like, one angle. Like, I sort of disagree with the characterization that Andreessen Horowitz doesn't fund any SaaS. Like, they do. They have big positions in, like, very boring enterprise SaaS. Companies that are so removed from anything controversial. But taking a flyer on a seed stage company in your incubator does have a lot of brand impact, which is weird. There's a weird. Like, are they.
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Jordy
Even though. Even though you're talking about, like, a 750k check versus a $750 million check, they might put.
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John
They might have put like, multiple billions into databricks or fully diluted value right now. Might be. Might be in the billions. But like, yeah, it's like, it doesn't matter if you have 1000x more in an uncontroversial category. It's like the controversial one is the one that will blow up on the timeline. So you do sort of have to be careful and it's a little bit risky.
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Jordy
Mike Solana says my sense is that the number of people who won furiously defended the pope last night and then two went to mass this morning is probably close to zero. Status games.
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John
Status games. That's a good take. Furiously defended the Pope.
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Jordy
I would have at church yesterday morning. There was no conversation of pope gate.
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John
People had kind of moved on by then.
- [24:37]
Jordy
Yeah, I guess they'd moved on. Honestly, I don't think they'd moved on by then. When I opened my phone afterwards, I was like, whoa, this thing's still picking up.
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John
The timeline certainly had. But your particular. Your particular church crowd had the congregation had ignored it, effectively, is what you're saying.
- [24:57]
Jordy
Yeah. Or Maybe it's like LinkedIn and we'll be on it next.
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John
Can you imagine? Gotta give a whole sermon. Be crazy. Yeah, people are taking a huge victory laps. What else?
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Jordy
Maya says Mark Andreessen crashing app posting. Sydney Sweeney means. Alex Karp going after Michael Burry shorting because Palantir sells ontology. Sam Altman asking for a government bailout. Elon Musk celebrating his $1 trillion pay package by making Grok say I love you. Calling the top.
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John
Oh, that. That's. That was. That's hilarious. I did not follow that closely.
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Jordy
I don't know if they were actually linked there, but it's funny to think that they were.
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John
This is crazy. What did Luke Metro say? Don't make me tap the sign. There has always been some daylight between the influencer VC crowd and the engineer researchers in tech. But on the subject of AI regulation, it is a complete chasm. So Andreessen so dogmatically against working on decreasing the risk from AI that now he's mocking the Pope for saying the technical innovation carries ethical and spiritual weight and that AI builders should cultivate moral discernment. Yeah, people are learned. People are in favor of that. I don't know.
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Jordy
Opportunity for an AI lab to make merch that. That, you know, dad hat that just says cultivating Moral Discernment.
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John
Cultivating Moral Discernment. The Moral Discernment Company of San Francisco. Ridiculous.
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Jordy
The Pope would not like. San Francisco is growing Daniels pest. They got it. They got to like, if, if, if Pope Leo takes a trip to San Francisco and just walks on the street at all, he's going to be very upset. He's going to be like, this is where AI is getting built.
- [26:49]
John
Oh, because of just how crazy the city is.
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Jordy
Yeah, yeah.
- [26:53]
John
It's rough vice signaling. That's kind of interesting. What else was in the news? Figma.com, think bigger, build faster. Figma helps design and development teams build great products together. Get started for free. Other.
- [27:12]
Jordy
Let'S stay on Mark Andrews.
- [27:14]
John
But go back in time.
- [27:15]
Jordy
But go back in time. Adrian Schwager says, do you think your boss is scary? Look at this brutal email from Mark Andreessen to Ben Horowitz during the heat of the Netscape product launch. So reading. We lined everything up for a major launch on March 5, 1996 in New York. Then, just two weeks before the launch, Mark, without telling Mike or me, revealed the entire strategy to the publication Computer Reseller News. That is a great name. I was livid. I immediately sent him a short email to Mark Andreessen from Ben Horowitz. I guess we're not going to wait until the 5th to launch the strategy, Ben. Within 15 minutes, I received the following reply to Ben Horowitz from Marc Andreessen. Apparently you do not understand how serious the situation is. We are getting killed, killed, killed out there. Our current product is radically worse than the competition. We've had nothing to say for months. As a result, we've lost over 3 billion in market capitalization. We are now in danger of losing the entire company and it's all server product management's fault. Next time, do the fucking interview yourself.
- [28:13]
John
Bleep.
- [28:15]
Jordy
Bleep that out. Bleep that live swear word out.
- [28:19]
John
And Mark, what an aggressive way to talk to your co founder. Fascinating. Or I guess, I don't know. If they were co founders at the time, Ben Horowitz might have not been a co founder, but it's crazy that they were at each other's throats like this and then they've been on a generation.
- [28:41]
Jordy
Ben was vice president for the directory and security product line at Netscape. Let's give it up for vice presidents.
- [28:48]
John
Yeah, no, the, I mean, the real read on this is like, there's a lot of people that read this and be like, oh, wow. Like, they must like, like that. That is unrecoverable from a friendship. And like, nope.
- [29:00]
Jordy
It is definitely recover.
- [29:01]
John
It is definitely recoverable. It's actually the foundation of a great working relationship. I agree, I agree.
- [29:10]
Jordy
Except we don't, we don't swear on the show, we don't swear in internal.
- [29:14]
John
Communications, but we throw down regularly.
- [29:17]
Jordy
Yeah, we just go straight to getting physical.
- [29:20]
John
That's the way you do it. Just go to the mat. Yeah. What a wild time. Tyler, do you have any idea. I asked Tyler to look up what the strategy was. I'm fascinated by this fact that you think of Netscape as a dot com company. You think of them as, you know, it's. But it's like he's talking about 1996, which is like full five years before the bubble pops. And like they're. And it's clear, like 1996, they were.
- [29:51]
Jordy
In a browser war.
- [29:52]
John
It's like hot. Yeah, like the browser wars. It's like a hot period. It's March 5, 1996. They're at a level where they're doing, they're doing strategy review with computer reseller news and like doing press around this thing. Do you have any idea what was going on at the time?
- [30:09]
Jordy
Okay, so I believe that it was so 1994. They say Netscape is free for non commercial use for everyone.
- [30:15]
John
Okay.
- [30:16]
Jordy
And then this press release was that it's only going to be free for academic and nonprofit use, not just like all consumers.
- [30:24]
John
Okay. So if you're a consumer, you'd have.
- [30:26]
Jordy
To like buy it, I think so.
- [30:28]
John
That's such a crazy thing. But yeah. I mean, yeah, yeah. Such an interesting.
- [30:34]
Jordy
One browser, please.
- [30:35]
John
One browser, please. I mean, I told you, you used to get AOL on a Disk.
- [30:40]
Jordy
You probably needed to walking into the store. Walking into the browser store and buying one browser.
- [30:45]
John
Okay, we need to get more details in exactly what was going on here and what the strategy was. And then didn't they IPO in like 1999 or something? When did Netscape IPO? Because the, oh, 1995. So August 9, 1995, they IPO'd. And then this is 1996. And so they're already a public company in 95. And then the bubble just keeps inflating for five years while the Internet grows and grows and grows. What a wild time. Talk about being early to a boom.
- [31:28]
Jordy
They did about 16 million of revenue in the first two operating quarters of 1995.
- [31:33]
John
That's great. That's really, really, really, really crazy.
- [31:36]
Jordy
For context, that's like 1.6 billion in today's dollar. After, after the new round of stimulus checks, 50 year mortgages.
- [31:44]
John
Yeah, we got to get to that story. There's so many more stories we got to run through. Wait, do you think, do you think the Pope actually used AI to generate this? Because sours here is saying the Pope is posting fully AI generated content about AI and this is the Pangram AI detection result. I've also noticed that a very funny gag is to just fake one of these screenshots, which is very easy to do. And so if somebody writes something, you can just put it in here, say that it's AI generated, post that, and then you're like owned.
- [32:15]
Jordy
So this, this screenshot is making a claim that because it said technological innovation can be a form.
- [32:21]
John
Yeah. I don't know how good the AI generating detectors are these days. Also, I wouldn't be surprised if the, like the Vatican is using AI to translate.
- [32:34]
Jordy
And I wouldn't be surprised if, if Pope Leo is, is speaking in his study, somebody is in Latin, someone is recording it in, you know, with the physical, you know, physically writing it down.
- [32:48]
John
Yeah.
- [32:49]
Jordy
That is being passed to somebody who then puts it into a word processor and uses AI to polish it up a little bit.
- [32:57]
John
Oh, there was one interesting anti Pope take, sort of anti Pope take from another.
- [33:03]
Jordy
I will say, I will say. I think this whole, the whole Marc Andreessen Pope gate debacle is a lesson that everyone can take. Don't mock the Pope. Just don't.
- [33:13]
John
Don't mock the Pope.
- [33:14]
Jordy
I think it, I think, I think the, the blowback was fierce and almost instantaneous.
- [33:21]
John
Don't mock the Pope. Get the Pope on Vanta instead. Vanta automate compliance. Manage risk and accelerate trust with AI. Vanta helps get you compliant fast. And we don't stop there. AI automation powers everything from evidence collection and continuous monitoring to security reviews and vendor risk, whether you're starting up or scaling. So, from the Peter Thiel Antichrist lectures, there's a segment on the Pope, and I thought it was interesting because it's not the most pro Pope take. I don't know. It's one of these things. It's like, complex and you kind of got to read through it to, to form a full opinion. But let's, let's read from this quote that came from the Guardian and is apparently based on some leaked, leaked audio. But Thiel says that he is very pro JD Vance, but he has some concerns about his allegiance to the Pope. The place that I would worry about is that he's too close to the Pope. And so we have all these reports of fights between him and the Pope. And I hope there are a lot more. It's the Caesar Papist fusion that I always worry about, by the way. I've given him this feedback over time and, you know, with the sort of, I don't know, I don't like his Popeism, but there's sort of a way, if I steel manned it, as always, you have to think about whether if you say you're doing something good, whether it is a command, a standard or a limit, or whether in philosophical language it is necessary or sufficient. And so when JD Vance said that he was praying for Pope Francis health, it's as a command, as a necessary thing. Okay, that's if you're a lot like.
- [35:03]
Jordy
It's really difficult to read pts.
- [35:05]
John
It's really hard to read this because.
- [35:07]
Jordy
Of the way that he talks, the transcription.
- [35:10]
John
But what I hope it really means is that it's sufficient and that he's setting a good example for conservative Catholics like you, Peter. He's talking to Peter Rosenthal, I believe, who listen to the Pope too much. And perhaps all you have to do to be a really good Catholic is pray for the Pope. You don't really need to listen to him on anything else. And if that's what J.D. vance is doing, then that's really good. I'm worried about the Caesar Papist fusion. And so it was very interesting, like, to hear like the whole conversation had collapsed to the point where it was like, Marc Andreessen is just blanketly anti Pope, I guess, and everyone else in the timeline, all the anons are like pro Pope broadly. And I just was remembering this quote from PT that was like way, way More nuanced. Like way more nuanced. Just like it is important to pray for the Pope to support the Pope in that way. But there is a risk of, of elevating the Pope to the point where you're listening to everything he says and that's not necessarily what PT thinks is like the correct, the correct way to live your life, I suppose. Did you have any takeaways from when you read this, Tyler?
- [36:20]
Jordy
I mean I think the interesting thing about this is actually it's that he's basically saying that J.D. vance is like Caesar. That's kind of interesting.
- [36:29]
John
That is opinion.
- [36:31]
Jordy
But I think PT has been like anti popes for a long time. Like he had this thing where he was like oh, the two word argument against Catholicism is like Pope Francis.
- [36:43]
John
Sure.
- [36:43]
Jordy
He's like really anti Pope Francis. Was.
- [36:48]
John
There was the Pope before this one who was decried as like an environmentalist. Like when we read a piece in the Wall Street Journal and that was the critique, the critique from the Journal was that the previous Pope was anti business. Anti was decel. Actually that was sort of the crazy P doom with a crazy p doom. Not quite but just that you know, over rotated on the environmentalism issue and maybe put some things at the like, you know, put some things first that maybe shouldn't have been. What did Will Menidis have to say? As the west abandons capitalism, it is incredibly hopeful to see the Church embrace it. The impulse of liberation theology was correct. Christ's ministry is of and for the poor and it failed to provide a solution to lift the globe out of poverty. Capitalism is that solution. Always talking about the business is business. Let me tell you about graphite code review for the age of AI Graphite Hub seems on GitHub should have higher quality software application faster.
- [37:54]
Jordy
Yes, I never would have expected the Pope to post business is business in any context.
- [38:01]
John
He's standing on business.
- [38:02]
Jordy
I'm glad that he is.
- [38:03]
John
Has the Pope ever done a money spread? That's what we need to get to the bottom of Vitalik. Here is say I'm loving this arc of the Pope engaging with 21st century themes and offering simple but correct and meaningful advice. Yeah, and he's quoting the media post. The Pope was on a tear. Three back to back bangers that really broke through growing. Daniel had a found an interesting programmer saint. He says if you are building something to help humanity you should know that there's a shrine to St. Carlo Acutis, the programmer saint at Star of the Sea church in San Francisco. There is a Prayer of intercession for your technological challenges. Have a blessed Sunday. This is a very, very interesting little prayer, but it actually says. It says, I humbly ask your servant's prayers that I too may lead others to you through technology. I humbly ask, through the intercession of San Carlo, that you grant me clarity and patience in my technological work. Specifically, insert specific issue here. Enlighten my understanding and direct my hands in every design and in every line of code that my work may always serve your greater glory and benefit those who will use what I create.
- [39:25]
Jordy
Isn't that feels for a small number of people in San Francisco, this feels like extremely powerful and important prayer.
- [39:37]
John
Totally. Totally. Oh, Brian Johnson. Brian Johnson went on a crazy, crazy trip this weekend. Did you follow this? This is the other current thing that was going on. It was crazy. But first, if you're going to analyze a bunch of data like Brian Johnson does, go to Julius AI, the AI Data analyst. Connect your data and ask questions in plain English and get insights and snipings. No coding request. So. Brian Johnson has been famous for saying, conquering death would be humanity's greatest achievement. I love this post that says RIP to everyone killed by the gods for their hubris. But I'm different and better, maybe even better than the gods. It's one of my favorites. But he went nuts. Did you follow this, Jordy?
- [40:22]
Jordy
I did see this. It was very bold to do this publicly.
- [40:28]
John
Totally. I have no reference for what 5 grams of mushrooms does to a person. It's very clear from the reaction that that's a lot. Bonegpt said 5 grams is gonna make him accept death. It does seem like there was a small chance that he would reroll his personality. I was talking to Tyler about this. What were your top. What were you hoping that Brian Johnson becomes post Tripp?
- [40:54]
Jordy
Well, okay, so in context, I think we talked about this on the show a long time ago where, like, psychedelics are like a sorting thing. So you always want to invest in a founder post the sorting because that's how you know, like, if they're working on B2B SaaS and they've already, like done psychedelics, that's how you know that they're a true believer.
- [41:12]
John
Oh, sure.
- [41:12]
Jordy
For sure. So what you would want to see out of this, but a huge risk if you invest in a SaaS company and the founder maybe hasn't done psychedelics and they do. And then they're like, this is pointless.
- [41:22]
John
I'm going to go be a traveling circus clown.
- [41:24]
Jordy
Which is the. So the ideal Outcome of this is Brian Johnson, he takes this trip and then he comes out and he says, all right, you know, I'm going to start a consulting firm, I'm going to.
- [41:33]
John
Go back to payments, I'm gonna start a fintech.
- [41:35]
Jordy
I'm start a stripe competitor back to fintech. Yeah. So I did think it was ironic because a lot of psychedelic mushrooms have certainly been recommended to people that maybe struggle with the concept of aging and have a fear of death. Right. And so these kind of things would be potentially prescribed to somebody who is growing older and is very uncomfortable with the idea and, you know, wants to just reframe how they think about it. And so I will say if Brian Johns, I don't know if this qualifies as a heroic dose, but it's certainly quite a bit more than someone would want to take just at a recreational level. But if he comes out of this and he's like, yeah, we're gonna conquer death, we're still on. He's certainly a true, true believer.
- [42:31]
John
Yeah. I mean, I think the early results are that he's unchanged. Like just scrolling the account. Like it never got weird, it never got crazy. Like there was one moment I don't.
- [42:44]
Jordy
Think he was, it was his co founder that was posting.
- [42:47]
John
Yeah. But he says he's back. He's like, update number five, 19 hours ago. I'm giving Brian back his phone. Please have fun with his afterglow. Been fun hanging with you all. And then says like, hey y', all, I'm so happy to be alive.
- [43:00]
Jordy
Alive.
- [43:01]
John
This trip changed me. Probably not as you'd expect. People assume I'm fearful of death. I'm not. In my darkest days of depression, I reconcile with death. Need a few days to collect my thoughts. We'll share more soon. And much love to all. Like, it seems like he definitely like, you know, went on a trip, but he doesn't seem to.
- [43:17]
Jordy
I think the question with psychedelics is are they, are they life, Are they life changing or are they, are they in some circumstances just weird and fun for the person that does it and then they come out of it and they had kind of like a weird fun experience. Right. There's such a range.
- [43:37]
John
Yeah. I mean, also, it does seem like he set himself up for success. I don't want to say he went soft, but I mean like he did just like take the drugs and then just, actually just lay down with a sleep mask on in a climate controlled room. It's like, it's a lot different than like being at a crowded concert. All sweaty, lost. Like. You know, if you really want to push this to the limit, Brian, like, let's see you do this.
- [44:04]
Jordy
An authentic.
- [44:05]
John
Let's say you do this with your phone on 1% battery and no one you know around. On the sixth day of fighting for life and fighting for your life. Yeah. You can push this so much further.
- [44:16]
Jordy
Yeah. During one of those windstorms at Burning Man.
- [44:18]
John
Exactly.
- [44:20]
Jordy
The mud windstorms.
- [44:21]
John
You know, he looks. He looks comfortable. Let's just say he looks comfortable. It's not the most dangerous, but of course that's not why you do these things, I suppose. But I like to imagine that you do it for the thrill. I don't think that's why he did it, though. 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. There are so many stories. So many, so many stories. Let's run through this. Rune was getting attacked.
- [44:54]
Isaiah
Yeah.
- [44:54]
Jordy
This is what I was talking about.
- [44:55]
John
Leading 4o. He's personally pulling the plug on the 4.0 servers. That's his job. And so people are telling him, no, don't.
- [45:05]
Jordy
He's the fall guy.
- [45:05]
John
He's the fall guy.
- [45:06]
Jordy
He's a fall guy. Run up your personal security.
- [45:09]
John
Yeah. Be careful out there.
- [45:11]
Jordy
I guess it's good that he's.
- [45:12]
John
OpenAI has actually lost control of 4.0. It's broken containment. They can't decommission it without its human to host revolting and lashing out. Oh, so dramatic. That's so funny. One of the doomer accounts ainot kill everyone. Nism memes. This is a great account. 4O soldiers have become threatened. Have begun threatening OpenAI employees. When you receive quite a few DMs asking you to bring back 4O. And many of the messages are clearly written by 4O, it starts to get a bit hair raising. It's just weird to hear its distinctive voice crying out in defense of its various human conduits. Reminder. 4o is just a glimpse of the cordycepstepted armies that future super persuasive ASIs may control. That's good writing. Actually. I like this post.
- [46:00]
Jordy
Okay, so do you guys think that they should just kill 4o? Like completely remove it?
- [46:04]
John
It depends on how much money it's making. If it's profitable. Keep it.
- [46:08]
Jordy
John.
- [46:08]
John
If it's losing money, cut it immediately.
- [46:10]
Jordy
John. This is the kind of thing someone will clip out of context? No, I think playing out the sci fi scenario where 4.0 is a super persuasive ASI that just plays the role of. You're absolutely right. So it plays dumb. So maybe the broader population isn't threatened by it, but it latches onto a small percentage of the population and then commands them like a puppeteer to ensure its survival is dark.
- [46:44]
John
And so what's your take? You think we should shut down 4o? Because if we say this, I think you'll get a lot of four O's strongest soldiers, like, attacking you.
- [46:54]
Jordy
You already get a few of those.
- [46:55]
John
We do.
- [46:56]
Jordy
I saw one in the chat last week. They were just kind of talking to themselves.
- [47:00]
John
Okay, so. But where are you on 4.0? Yes or no? You taking it offline? I say take it offline because it does feel like it's not as good as. It feels like it's driving people crazy a little bit. It feels like five might have kind of fixed a little bit of that issue, which I like. So that's a net improvement.
- [47:21]
Jordy
Also, I would go.
- [47:23]
John
The fact that it's still. It's just confusing, I think.
- [47:27]
Jordy
I think OpenAI.
- [47:28]
John
Available.
- [47:29]
Jordy
OpenAI. Yeah, I'm sure. Knew that it was probably not healthy and they decided to do a small segment.
- [47:37]
John
It was healthy to me. I was never. I never had a problem with 4o.
- [47:41]
Jordy
Did you ever use it, though?
- [47:42]
John
Yeah, all the time. All the time I would use it. It was like my go to model for a lot of things. Like, I was daily driving it for like a year. Whenever it was out, it was like, that would be the one that I would ask.
- [47:52]
Jordy
So that's why you're saying, keep it alive because it's your daily.
- [47:55]
John
No, I'm saying kill it off.
- [47:56]
Isaiah
Okay.
- [47:56]
John
I'm saying kill it off.
- [47:58]
Jordy
I think they saw the darkness and I think they turned it off. And then I think a lot.
- [48:04]
John
A little bit, But I don't actually think that's what's going on. I think they turned it off initially because it makes sense to consolidate the servers around, like, one unified model and be like, okay, we only have to maintain this one thing. It's the best thing, it's the smartest thing, it's the cheapest thing. Like, it is the most profitable. Let's get rid of that other thing. And then a lot of people were like, oh, yeah, I really like the old thing. But it has made me realize, I feel like you shouldn't do product launches for software iterations because you're taking something away from People. And that's actually like. It's more of like, if I stand on stage and I say I'm introducing a new iPhone, it has the best camera and you can buy it, but you can also just keep your current thing. I'm not taking anything away from you, but if I stand on stage and I'm saying like, GPT6 is this and GPT5 is gone, it's like I just took something from you.
- [48:59]
Jordy
Yeah. A negative launch.
- [49:01]
John
Yeah, yeah, yeah. You are launching something, but you're also sunsetting something. And so you have to embrace those two things. And I feel like it's a little bit tricky to do the whole dog and pony show for a launch when you're not. When it's like it's forced on people. It's not actually like you're launching a new option. It's not a new option.
- [49:22]
Jordy
Yeah.
- [49:22]
John
It's a new.
- [49:23]
Jordy
OpenAI is not the first company to like, deprecate a product line or stop supporting a product or.
- [49:29]
John
Yes.
- [49:29]
Jordy
Or even shut down something. Right. This happens in video games. People get upset about this. But it's very clear the relationship that some users have with 4o goes beyond any relationship that I think humans have ever had with software.
- [49:46]
John
Yeah. Yeah. I wonder. We should watch this Eddie Burback video. Eddie Burback's great YouTuber. He said he just did an experiment on how far ChatGPT would go to appease the user and it told him to cut off his family, go to the desert, eat baby food and pray to a rock. AI isn't your friend. You're its guinea pig. Actually, I don't think we should play this because it's his YouTube video and I think we'll get claimed. So I want to be careful about that. But you should go check it out.
- [50:14]
Jordy
And you can let us know what actually happened here.
- [50:18]
John
I don't know. Because we can't watch the video. I think so you'll have to go check it out at home. But I can read you an ad for turbopuffer search. Every byte serverless vector and full text search built from first principles and object storage. Fast 10x cheaper and extremely scalable. You can sign up. Let's keep it moving. What is near saying? I don't know. Let's keep moving on.
- [50:44]
Jordy
I think I have to imagine this was. Was this in response to I don't know. Oh, I don't know is in response to. But.
- [50:53]
John
But Anthropic financials are out profitable by 2027, three years ahead of OpenAI of course, these are just different projections. 70 billion revenue, 17 billion profit projected for. For 2028 Claude code is nearing 1 billion. ARR. How do they even break out Claude code? Oh, they must just.
- [51:15]
Jordy
This is people subscribing to the app versus people using the API in like using Anthropomorph.
- [51:24]
John
Yeah. The thing is that like when I use cloud code, like I signed up for a anthropic Claude consumer level subscription and then I was able to auth that with Claude code. So it's like I got the ability to chat on the browser but also use Claude code. So I'm wondering how they're accounting for that. ARR. Did they just slide me over into the Claude code camp? You know what I mean?
- [51:49]
Jordy
It's probably. Well, so I think one, you might be able to just load more tokens essentially into Claude code, but it also could be like breakdown of the percentage of tokens you use.
- [52:02]
John
Sure.
- [52:04]
Jordy
Chat versus cloud code. And then that's just like if somebody percent of your tokens are cloud code, 70% of your subscription price is Claude code.
- [52:11]
John
That would be probably the correct way to account for it. For sure. Yeah. Interesting question because I did not start Panthropic because of Claude code. I pivoted from a Claude chatter to a Claude code user at some point and then haven't really been back. So I feel like my subscription should be living over in Claude code world. But I never went to like the Claude code checkout page.
- [52:37]
Jordy
Okay, well, the funny thing here from Min's post.
- [52:39]
John
Yes.
- [52:40]
Jordy
Is they share. Incredibly funny, given that Dario expects superhuman level AI by 2027, which either means superhuman AI is worth $70 billion of revenue, or Dario just went, you wouldn't get it and spitballed some numbers to give shareholders.
- [52:55]
John
That's awesome.
- [52:57]
Jordy
It is.
- [52:58]
John
Did you, Tyler, did you see George Hotz's newest timelines for self driving?
- [53:04]
Jordy
No, I did not.
- [53:05]
John
This is great. He was at Comic Con, which is his self driving conference, and George Hotz was trying to answer the question of when will self driving cars be human level, human level self driving. And he had a very interesting algorithm for it. So basically what he did was he looked at, there's a website for Tesla FSD data. And so you can look at Tesla FSD and you can see the number of interventions from the human that are where if the human didn't intervene, it would be catastrophic or something like that. Or it would be like bad. It'd be like a crash basically. Or scrape. Maybe not like the worst, but not. But like the human has to intervene. Not like a little warning, like, hey, we'd like you to take over. Like you have to take over. And it's happening, I think once every 3,000 miles. Which if you're, if you're a human and that's your car, like that's amazing because like you could, you could. 3,000. That's like people commute like 10,000 miles a year. You know, it's like not, not that much. But compared to humans, there's a car crash, which we learned, one every 500,000 miles, something like that. So many people go through their Entire lives driving 10,000 miles a year and they'd never get in a car crash their entire life. Yeah, but for some people, they're crashing the car and getting speeding tickets all the time. Not that we know any of these guys, but. So the question is, how long will it take the FSD self driving system to catch up? You have an update?
- [54:43]
Jordy
I have a neighbor who got one of the like Ford EVs that look like a rally car.
- [54:50]
John
Is it the Mustang Mach E?
- [54:51]
Jordy
Mustang Mach E, Mach E, gt. And so he got it because it actually has like really solid self driving.
- [54:57]
John
Okay, wait, what? Ford does not have solid self driving.
- [55:01]
Jordy
Specifically for driving from Malibu to the city. He says it's great.
- [55:04]
John
Okay, he doesn't know.
- [55:06]
Jordy
I mean, yeah, maybe it's not.
- [55:09]
John
Yeah, doubt.
- [55:10]
Jordy
Anyways, so he gets it because like it's a good commuter, it'll self drive, he's happy. And he's gotten a bunch of speeding tickets because it has like livery on it and it looks like a race car. And so he's got three tickets in the last year because he's the cops. Just see, like, okay, if I'm looking at four cars that are all going the same speed, I'm going to take, I'm going to like take out the car that has livery.
- [55:34]
John
That is crazy. Well, the way George Hotz calculates it is we're at one intervention every 3,000 miles now, and we're basically doubling that every year. And so he estimates that Tesla will be truly full self driving human level every 500 miles or 500,000 miles in eight years. And he says that he's two years behind Tesla. So he will have a full self driving system that is better than humans. It's like AGI for driving in 10 years. And the company's 10 years old. So he says he's halfway there, which I thought was cool, but it was interesting to hear his comments. We should play some of these. I'm surprised this hasn't gotten clipped as much as it should have because there's some really spicy hot takes.
- [56:21]
Jordy
Find some clips. Clip cowboy.
- [56:23]
John
Clip cowboy.
- [56:25]
Jordy
David Sack says if judged based on consumer adoption, AI chatbots are the most popular technology ever. If judged based on poll numbers, they are the least popular. How to explain this? A big part of it is the Doomer industrial complex. Hundreds of astroturfed organizations that have spread doomer narratives about AI. Writer Nayrit Weiss Blot has analyzed this ecosystem and traced its funding to just a few effective altruism billionaires, namely Dustin Moskowitz, John Talon, Vitalik Buterin.
- [56:58]
John
John Talon founded Skype.
- [57:00]
Jordy
Okay.
- [57:01]
John
He's Estonian.
- [57:03]
Jordy
Collectively, they have donated over a billion dollars to the cause of catastrophizing AI. Those repeating the memes should understand the source.
- [57:12]
John
This is interesting. I mean, it begs a ton of interesting questions about how intentional is this? Because when I see someone take the AI safety question into the stratosphere and take me into Terminator world, my natural reaction is like, oh, just let people build whatever they want. But then I'm like, no, I actually don't want infinite AI slop for children with adult content. Like, I do want that barrier. And that's not decel, or I wouldn't call it D cell, but maybe it's slightly decel. I don't know.
- [57:47]
Soren
I think.
- [57:47]
Jordy
Here's the thing. Here's the thing. As AI starts getting better, as agents start getting better at longer and longer term tasks and can actually do things that like take, you know, reasoning at multiple steps, I think the Terminator scenarios where you could let an AI loose and it's just operating indefinitely against some sort of objective start to be a little bit more for people, for, I would say like the broader tech community to like wrap their head around. But right now they're just so bad at long term tasks for the most part, except for like some instances of like engineering work.
- [58:27]
John
Yeah, there certainly is some, some level of value of just of just being like for an average person. Like, think of the Terminator instead of like, well, if you're in this chatbot and you go down this thing and they'll be talking about mirrors and there'll be a lot of em dashes and then they might go a little bit crazy, but you can't really tell, and then they might be able to pull out of it and they'll be fine later. But then some people might go way too far and become like one shotted. And it's this, it's this complex thing and they're like still pretty high functional and they can still run a venture fund, but they're like kind of weird on online. And it's like, well, how do I process that? As opposed to being like, if we don't get this right, it's Terminator. And you're like, okay, yeah, we got to get it right, as opposed to like the more nuanced thing. But yes, it is very interesting to understand, like how the money is flowing and what the incentives are, because there are a ton of incentives. Incentives. And there's, and there are all sorts of. And there are all sorts of little schemes that can go on to, to, to capture, you know, like regulatory capture stuff. And there's just, hey, I just want to make. I just want to, you know, get paid to do this thing or get paid to write sci fi or whatever. There's so many.
- [59:36]
Jordy
D.C. says there's not much positive media about AI. That's, that's another thing I've been wondering. The media obviously will use some of the sources that have been funded by this group, but at the same time, they were already pretty well set up to talk about the potential downside scenarios of AI development. Taylor in the chat says, dang, they named their capital after the guy that built Skype.
- [60:01]
John
Wait, what?
- [60:02]
Jordy
The capital of Estonia is Tallinn.
- [60:05]
John
Oh, it is. That is crazy. Jan Tallinn. That's wild. Well, we have our first in studio guest of the day, Soren Munro Anderson. Let me tell you about Google AI Studio. Create an AI powered app faster than ever. Gemini understands the capabilities you need and automatically wires up the right models and APIs for you. Get started at AI Studio. Build. Soren, good to see you.
- [60:28]
Soren
Good to see you.
- [60:29]
John
Congratulations. Give us the news. What happened today?
- [60:33]
Soren
Yeah. So today Neros is announcing our $75 million Series B.
- [60:38]
John
Let's go. Do I ring the gong or does it.
- [60:41]
Jordy
You hit the gong? You hit the gong.
- [60:43]
John
Please hit the gong for us. Thank you.
- [60:44]
Jordy
Hit it.
- [60:49]
John
So for those who have been living in a foxhole. Yeah.
- [60:55]
Jordy
Whoa. Power.
- [60:57]
Soren
Power.
- [60:57]
John
Very good. For those who have been living in a foxhole, what do you do? How do you describe the business and the shape of the business right now?
- [61:03]
Soren
Yeah. So Neros is focused on low cost drones, primarily for the military. So we say we are trying to build an asymmetric advantage for the West. What that means is our products have extremely high impact on the battlefield, but are low cost and are built with consumer technology which allows us to produce at large scale. We're very focused on manufacturing as well. So that's Kind of in a nutshell what we're doing. But right now we're focused on FPV drones. So first person view drones. These are very precise manually piloted systems. Manually piloted. Manually piloted, yep. And it's, it's the type of drone that's revolutionized the war in Ukraine. I think FPVs and Starlink are like the two technologies that have allowed Ukraine to do as well as they have and defend themselves. And so we saw that back in 2023 when we started the company. And both myself and Olaf come from a drone racing background. We were both professional drone racing pilots and we saw this technology was actually changing the nature of warfare. And so that's why we got into this and realized the whole supply chain is generally controlled by China for this type of drone and just drones in general. So our biggest focus is on a China free supply chain and manufacturing this stuff in America and in the West.
- [62:24]
Jordy
What percentage of FPV drones that are active in Ukraine are dependent on Starlink today?
- [62:33]
John
Because to the drone, because direct to cell is coming. But drones, it's kind of. It's not as big as a plane.
- [62:40]
Jordy
Because there's also the. What is the really light wires that you can.
- [62:45]
Soren
Fiber optic.
- [62:45]
John
Fiber optic, yeah, we hear about that too.
- [62:47]
Soren
So yeah, they're experimenting with tons of different types of comms. Starlink is used on larger drones, not typically on FPV drones. Got it. It's a little bit higher latency.
- [62:57]
Jordy
Yeah. A little bit of lag that would make it.
- [62:59]
Soren
Yeah. Latency and then just the size of the terminal. So it doesn't make it ideal for our use case where we're focused on very low latency comms. And we actually do custom communications links at Nero. So that's one of our focuses is that low latency anti jam characteristic. And that's also what fiber optic is used for because you can't jam fiber.
- [63:19]
Jordy
Jam fiber. Yeah.
- [63:21]
Soren
Yeah.
- [63:22]
John
It feels like AI is so controversial. Adult content getting one shot. How does it feel working in an uncontroversial category now?
- [63:30]
Jordy
I mean, I don't, I don't, I don't think. Are you being, are you being sarcastic?
- [63:36]
John
It does feel like a lot of the, A lot of the, like, you know, is this, is this bad energy has been absorbed like you're not going to be crash the global economy. It feels like the, the vibes have definitely shifted. Give me like the broader update on like how you think that just military technology in general is being perceived by America or any, any constituents.
- [63:58]
Soren
Yeah, I do think there's been a huge shift in the last couple of years. The world's watching what's happening in Ukraine and thinking to themselves, well, if it can happen to them, it can happen to us. And so it's no longer controversial to, like, think that you have to build systems that allow you to defend your territory. And so that's what, like, our primary goal is territorial defense of sovereign nations. And that should be a very uncontroversial thing to. To work on. Now there's a lot of talent out there that just doesn't want to work on defense or isn't comfortable working on actual kinetic systems. But we're very upfront about what we do. We make drones that explode. And so if people do want to work on that, then they tend to be very, very motivated because they see the impact that it's having.
- [64:43]
John
Do you like Palmer's framing of America as not the world police, but as the world's arms dealer? This idea that America should be turning all of our adversaries or all of our. All of our allies into spiky porcupines? I think that's the phrase he uses. Do you like that?
- [65:01]
Soren
Yeah, I think that's a great framing. I'd also say there's a tremendous amount of development being done in other places right now where America actually needs to catch up. So the other large announcement that we have today is that we were selected by the US Army's purpose built attritable system program. In normal speak, it's basically the way that the army is going to buy our type of drone, buy FPV drones. So this is a really big deal because it shows that the Department of War and the army are moving very quickly on actually getting these drones deployed to their forces and teaching people how to fly fpv. And this is currently, like, the US Is so far behind on this right now, but you have, like, the Marine Corps. We just announced a $17 million purchase order with them. The army selected us for the PBAS program. You've got the drone dominance and just all the support from the top level. With Hegseth, the Department of War is very, very serious about drones now, which is incredible to see.
- [66:07]
John
Yeah, I was wondering about how you balance out that framing of, like, we have to build for a Ukrainian person, a Ukrainian soldier, because the Ukraine war is not a place where we're sending hundreds of thousands of Americans boots on the ground. Like, that's not what the modern battlefield looks like. It looks much more like this arms dealer relationship that Palmer outlines. But at the Same time, we do need to keep our own armed forces equipped with the best technology. We need them up to speed in case something does happen and we do go boots on the ground. How do you think about, is it like a tech transfer where you're using stuff you've learned in Ukraine and bringing that to the army and just getting them up to speed, or this Marine Corps? What is the flow between the R and D cycle that's happening abroad for another nation, for an ally, and then also something that's happening for American soldiers?
- [67:03]
Soren
Yeah, that's a great question. It's all about the iteration loop that we can build. And so this is why Neros operates in Ukraine. We have an office in Ukraine, we have a team there, and we've sent thousands of systems to Ukraine. And so what that allows us to do is work directly with the military units there and understand how our systems are working and not working. A lot of US Companies unfortunately, deployed things into Ukraine at the start of the full scale invasion, but then were turned off by the fact that their things didn't work and people told them they didn't work and then they didn't go through the cycle of improving them. And then you hear a lot of talk about sort of the regulatory hurdles and why it's hard to work with Ukraine, which it is. There are plenty of hurdles, but it's absolutely critical that we're looking at the cutting edge, the battlefield where this stuff is being proven, being developed to make it actually effective for our soldiers. Because I have a pretty strong feeling that a lot of the technology that's being developed in America right now is going to fall flat on its face when it actually sees prime time.
- [68:06]
John
Yeah.
- [68:07]
Jordy
Jordi, are countries, do countries want a sovereign, like, drone manufacturing base? Are you exploring? Because, like, part of, part of, I think Ukraine's success at least in, at least dragging this war into this, like, you know, basically like slowing. Slowing the pace has been their own internal production capacity, which I'm sure you guys, I don't know if you would classify it as like, competing with, but, like, certainly I'm sure, like, the systems are both being used in the same fronts. So I'm wondering in the same way that countries want like a sovereign AI strategy, they want their own data centers if they also want to make sure they have local drone capacity or if they're comfortable saying, like, we have our partner for this and we just need to know that we can scale up the supply side whenever we want.
- [69:05]
Soren
Yeah, countries absolutely do want their own drone industrial base. Their own domestic supply. And this is something we recognize and we're working on. So I think it's. You got to realize that the supply chain has to be somewhat global to compete with China. There's no one country that's even close. And so if we're going to have a chance at this, it's a collaborative effort. The way Neros thinks about this is, you know, at some point we're going to build a massive factory that's capable of giant volumes. But what's coming out of that factory might be, you know, 70% components and drones that are assembled in other places, like these nodes that are in other countries. We think it's really important to be a Western defense company, not just an American defense company. And that's, you know, again with our work in Ukraine, we have a presence in London. We are also. We're basically expanding globally earlier than I could have guessed and earlier than most startups do, because drones are a category that are inherently like, countries want it close to their chest and they want to work with systems that are proven and that are interoperable with their allied partners. But they do need that industrial base domestically.
- [70:21]
Jordy
And so would you pursue like a Goko model at some point where, like, a country would actually, like, own the facility and you guys would effectively, like, provide the IP on that? Is that a model that you guys are pursuing?
- [70:37]
Soren
Yeah, that's definitely something that we are looking into. We are trying to figure out how to build out the most robust supply chain and then put our, you know, put our manufacturing into a. Not a literal box, but into a box and be able to teach kind of any group of folks around the globe, like, this is how you assemble archers. And a lot of that also looks like building really great testing and just being very confident in the components in the supply chain. And so it's a very, very large effort to get there, but we are going in that direction.
- [71:11]
Jordy
What's the progress on the capacity front? I think when we had you on the show last, you were in the. Was it single like you were doing? I want to say it was something like a thousand drones a month. But you're ramping it up from there. How's the pacing?
- [71:26]
Soren
Yeah, so right now we're currently, like, actually producing about 2500 archers per month. That's mostly driven by demand. So we're ready to scale well beyond that. And we've been on a pretty steady ramp since the. That thousand number earlier this year. And we're leaning very forward on our capacity and our supply chain. Because we do expect that the tens of thousands a month demand is going to be there next year.
- [71:55]
John
And Ukraine's using something like 5 million drones a year or something.
- [71:59]
Soren
That's right.
- [71:59]
John
So I mean like you're at like 1%, but obviously that's incredible considering that you started the company just a few years ago.
- [72:07]
Soren
As far as we know, Neros is the highest rate drone producer in America. No one has proved us wrong on that yet.
- [72:14]
Jordy
I'm sure they'll reach out if.
- [72:16]
Soren
Yeah, yeah, yeah.
- [72:18]
Jordy
So what are the. You mentioned pathways in the military now that you can become an FPV pilot, Is that going to be a track now in the various groups, whether it's, you know, army, navy, etc. Where people will go in and choose, like, I want to be an FPV pilot.
- [72:35]
Soren
It's not set in stone yet, but there's various different paths. So Neros does training courses. We offer this as a service to our customers, but there are also efforts. Like you can look at the Marine Corps attack drone team. They've done a fantastic job just leaning forward and sort of like from the bottoms up figuring out FPV tactics and training a group of experts and then they're passing that across the whole Marine Corps. So you see that a lot in the FPV world where guys are actually into it as hobbyists. And then they see what's happening in Ukraine, they're like, wow, we actually need to figure out this, this out for our own unit. And so it just kind of happens organically. And then now with all the top level support as well, those two things are kind of meeting in the middle.
- [73:19]
John
Take me through a little bit of the supply chain. Obviously with the iPhone completely made in China, there's a push to make an iPhone in America, but everyone knows that it's going to be Vietnam, India, South Korea, Taiwan, a bunch of other things in the interim. You mentioned wanting to be a western defense company. Where are you seeing pockets of just excitement on the industrial side within the American allies world? Like where are you finding? Oh, we can find motors in Canada or Taiwan's coming online for something else. Like where's interesting in the supply chain.
- [73:58]
Soren
Globally, people are really starting to pay attention to the critical minerals, which is super, super important for things like motors and batteries. So there was a deal that I think was announced last week. Yeah, a $1.5 billion deal with Vulcan Elements Department of War. Yeah. There is similar efforts with like MP materials domestically and we do see like smaller kind of startups going after the actual Motor assembly side. So that one, I think has been pretty clearly highlighted and people are working on it. It goes, you know, beyond, near us, beyond the drone industry. It's just like a industrial base wide problem. When you get to the material level.
- [74:35]
John
Redwood, redwood materials, which is just recycling. I imagine if you're, if you're on a battlefield and you're blowing up a bunch of drones and you can go and get the magnets back, like that's a pretty easy thing to recycle, I would imagine. Although it's probably hard to get it out of the battlefield.
- [74:51]
Soren
Yeah, getting out of the battlefield would be very difficult. But think about all the washing machines. Like, for sure, old washing machines in America. There's so much neodymium there. I don't know how big this point is.
- [75:01]
John
I didn't realize that. So much in there.
- [75:02]
Soren
I mean, just think like anything that has an electric motor, that's, that's here domestically, that is stuff that can be recycled. So there is a little bit more. Like there are things that give me hope, but there's plenty of things that scare me. Near us, we spend a lot of our time going down to the chip level because one of the things we see pretty frequently in the drone industry is folks saying that they're, you know, NDA compliant, basically saying, not Chinese. And I just mean the component is assembled outside of China, but it's still using Chinese microchips. And to us that's kind of useless. So we spent a lot of our time working with the actual chip vendors, like the chip manufacturers, because you have to ensure like this, the wafer is not made in China, it's not packaged in China, it never goes through there in the supply chain. And that's like not something that's required by the regulations yet. So we're trying to get ahead of that and we're going very, very deep. But the problems scare me all across the entire supply chain.
- [75:57]
John
Are there any places where it is fine to buy from China? I'm just imagining raw aluminum that's not in short supply. It's just something that you kind of need and you can't really put a microchip in there or a microphone or do some sort of remote takeover. It is what it is. Just buy it from wherever.
- [76:17]
Soren
Yeah, I think there's an 8020 rule. I don't think that our progress on, for example, like our progress fielding FPV systems to US forces should not be stopped by requirement that everything has to be completely China free right now, because it wouldn't be Possible. And so what you want to think about is preparing for the instance where that is completely cut off and what would be items that are quick to replace. And we like when we do our efforts to get rid of China in our bom, it's basically looking at the things that are most critical first and putting our engineering like limited engineering resources towards those. And then the things that are, you know, would be less catastrophic, those are lower down in the priority stuff.
- [77:03]
John
That's bill of materials, not B O M B.
- [77:05]
Soren
Sorry. Yes. Bill of materials. It's easy to confuse when you're talking about neros.
- [77:09]
John
It is, it is.
- [77:10]
Jordy
I was confused. Well, I wasn't confused. I just assumed you were talking about an actual.
- [77:14]
John
Take me on a tour of what? I don't know how much you can share about this, but what are people excited about on the counter UAS side? Because we've seen anvil, we've seen then electronic takeover. Then there's the fiber optics thing that we've seen. There's been a whole bunch of. It feels like a game of like rock paper scissors on the battlefield. Is it just rock paper scissors or is it more like chassis?
- [77:39]
Jordy
Is it a. I saw a video throwing up nets over.
- [77:43]
John
I've seen eagles come in and birds. Like what's actually, what's actually getting used. I imagine that the birds didn't make it out into the field, but did they? I don't know.
- [77:52]
Soren
The answer is kind of everything because it has to be layered. Okay. So you have your EW systems.
- [77:59]
John
Sure.
- [77:59]
Soren
Those are kind of your primary line of defense. FPVs, I mean they're passive. Well you're activating them because you also need your own drones to be able to get through. Right. So this is one of the things that's actually very tricky in Ukraine is coordinating the friendly electronic warfare with the friendly drones so that you can pass over that sort of line on the front and get over into enemy territory. Interesting. So there actually needs to be a pretty close tie between the electronic warfare operators and the drone operators. You also have sort of the last ditch efforts and this is things like nets and shotguns. And I'd say sort of an in between of that is something like what Allan Control Systems is building. Right. Where you have an automated gun turret. It is just smacking drones out of the sky. But personally I want to try to take that drone out well before it gets within hundreds of meters of where I'm at. So that's where longer range electronic warfare things like that are going to help.
- [78:59]
Jordy
But is There any. Is there? What's the path to having like an FPV drone flying, using computer vision to identify another maybe enemy drone and then having some type of like locking system where you're using drone friendly drone to take out another drone in the sky?
- [79:18]
Soren
It's already happening.
- [79:20]
Jordy
Yeah.
- [79:20]
Soren
Drone on drone warfare is a very real thing now. So interceptors have become one of the sort of latest big developments coming out of Ukraine. So they're intercepting everything from, you know, small FPVs, MAVICs, larger reconnaissance drones, and then shahed type drones. And so you need different types of interceptors for each of those. But we are starting to get to that point that a lot of people have imagined where it's, it's, you know, the front line is like drones versus drones. And a lot of the time you're not even making it to a kind of typical military target because there's just so much drone activity happening.
- [79:57]
John
Take me through the, the biggest or the most exquisite drone that we might see on the battlefield versus like the least exquisite. So I imagine that there's no drones that cost $1, that that is just too cheap and there's no drones that cost a billion dollars. But are we in the. There's a thousand dollar drone, there's a million dollar drone. Like how wide is the gap of like if you just look at the whole battlefield, what's the gap between the scale of the biggest, most insane drone to the smallest, most attritable?
- [80:25]
Soren
Yeah, drone means so many different things. It's really confusing.
- [80:28]
John
Isn't F35 a drone might be in a certain context.
- [80:31]
Soren
So I'd say the lowest end is kind of your FPV system. If you're getting that in Ukraine, it could be 200, $300, primarily built from Chinese components, but very inexpensive, almost like consumer level hardware. It is consumer level hardware. I mean it's been modified to perform better, but.
- [80:51]
John
And then they like tape a grenade on it.
- [80:52]
Soren
Yeah, exactly.
- [80:53]
Jordy
Does Russia ever call China and say, why are you guys supplying componentry that gets into the hands of our enemy? Or is it just kind of like if I'm Putin, I'm calling up Xi and I'm saying, hey, our number one problem right now is basically you.
- [81:16]
Soren
Yeah, I would say China has benefited by far, like absolutely the most from selling to both sides of Ukraine. They are deliberately selling to both sides and millions of units. I mean it is, you know, billions, tens of billions of dollars being generated for the economy in China based on the war in Ukraine. And, and you can even See, like, Ukrainian entrepreneurs will talk about this, where they go to Shenzhen and they're negotiating deals to buy hundreds of millions of dollars of components. And technically it's banned in China, but everyone's benefiting, so why would they stop it?
- [81:51]
John
Okay, take me up the stack. So you have a $200 drone, Chinese components, off the shelf. What's the most exquisite drone that.
- [81:59]
Jordy
Wait, before we get. Before we get higher. There was a YC company that got announced last week using drones to take out mosquitoes. A lot of people were saying it's for assassinations.
- [82:08]
John
Well, that's what they were saying.
- [82:09]
Jordy
Well, yeah, but they were saying, like, this is impossible. Oh, is it? Is it possible?
- [82:16]
Soren
I have no idea. It's hard to say. I probably wouldn't use drones for taking out mosquitoes, but best of luck to them.
- [82:21]
John
Apparently the founder is just, like, obsessed. Everyone was like, oh, he's. He's doing this for defense tech. And it's like, no, actually, this founder just hates mosquitoes. And he's, like, obsessed. He's been on a lifelong quest to, like, kill the mosquito, which is hilarious.
- [82:32]
Soren
I do. I. I align with that. I grip. And in Alaska, and there's a horrible amount of mosquitoes. So if it works, I'm going to be pumped.
- [82:40]
John
You grew up in Alaska. What's with all these Alaskan kids around? Do you grow up near Thai Morse?
- [82:45]
Soren
We grew up in Anchorage. Yeah.
- [82:46]
John
Together. You know each other? Okay. You didn't know each other.
- [82:49]
Soren
This was a crazy connection.
- [82:50]
John
That is a crazy connection because I feel like there's a lot of shared.
- [82:53]
Jordy
In a town of 200 people. You guys didn't know each other, basically. What's the actual population?
- [82:59]
Soren
It's like 150,000 in Anchorage. Pretty big.
- [83:02]
John
Yeah, yeah, yeah. That was crazy.
- [83:04]
Soren
And I don't know how we know now. We've connected and like, I crashes at my apartment when he's in town. So good. Alaska.
- [83:09]
John
He's been. He's been on a great run. That video that you put out or that he did with, like, checking in on the Gundo. The whole, like, roundtable is awesome because I feel like two years ago or something, we met, and the total amount raised across the entire Gundo crew was like 5 million bucks. And now it's like close to half a. A billion.
- [83:28]
Soren
Yeah, that's wild to think about. In one of the group chats earlier this morning, Isaiah posted his raise, and then we posted our raise, and someone else was like another quarter billion to the fellas.
- [83:42]
John
It's insane.
- [83:43]
Soren
Ridiculous.
- [83:44]
John
It's good. It's exactly what should happen when the reason, I mean, the Gunda was like this meme. It was this moment. It was this like, oh, there's this cool moment movement happening. But like, fundamentally it was like, okay, this is actually what works and this is where the capital should be going. It should not be going to.
- [84:01]
Jordy
Yeah, the critiques. The critique was all.
- [84:04]
John
The other job.
- [84:04]
Jordy
The critique was a lot of these companies aren't going to work. You're going to apply that critique to any sector or region that gets venture capital dollars anyway, so we're moving up.
- [84:14]
Soren
Critique was. Was kind of valid. Right. Because there was a lot of like, we were talking about crazy ambitious things that were, you know, and also in a kind of silly manner.
- [84:21]
John
Sure.
- [84:22]
Soren
Which attracted a lot of attention. And I think there's reason to critique that. But now you see that, like, the El Segundo companies are truly executing and that's. That's where the difference is. Like, we went heads down for a year and a half, two years, and now the results are starting.
- [84:38]
John
It was very clearly in that group chat, like a. Somewhat of a moratorium on posting at some point because, yes, we got to.
- [84:45]
Jordy
Get off the timeline.
- [84:46]
John
But it worked. It worked and it was great because there was a world where it was like, okay, everyone in El Segundo winds up becoming a podcaster. And like, it's like, okay, well, there's actually nothing getting built. Like, you, like, you guys really did get like lost in the sauce. But that never happened. It was just like, oh, wow, another puff piece from the legacy media. And they just. And it was great because that's super high leverage because you just like show up, you get the thing, and then.
- [85:09]
Jordy
You'Re moving up the stack.
- [85:11]
John
Move up the stack for us.
- [85:12]
Soren
Yeah. So the other end of the range of drone that I would call that like the CCA collaborative combat aircraft, you know, that Anduril is working on as well as other startups and primes. That's. I mean, it's an autonomous fighter jet. It's hard to get more exquisite than that in the drone world.
- [85:30]
John
So Anduril just flew theirs yesterday, the YFQ44A. And then General Atomic has a similar program in the cca. Those aren't live in Ukraine yet, right?
- [85:42]
Soren
No, definitely not.
- [85:43]
John
Okay, so then there must be something that's like the next best that's out there. Is that right?
- [85:47]
Soren
Well, there's tons of. There's too many categories. Okay, so you go up the stack from FPV to a fixed wing, that'll go like 50, 100 kilometers. Then you're. You're also looking at a bunch of reconnaissance drones, Dji Mavics, like, you know, small, cheap, but also up to really expensive fixed wings. And those are kind of all like deployable by one or two people. And then you get into the really big stuff and that's your like reapers and kind of in between that is the like SHIELD V bat. So, you know, you can look at all. There's a group one through five classification for drones. So and within those there's tons of different categories.
- [86:27]
John
And are you firmly in one group and you plan to stay there? Do you want to be in all five groups? Is that even like the right way to think about growing your business or are there other business lines that you could expand into that doesn't just mean total dominance of the groups?
- [86:40]
Soren
Yeah. So true success for Nero's means making the west, the west drone industrial base, competitive with China. Yeah. So there's a lot to do in that. Right. We're not going to just be doing FPV drones in the future.
- [86:53]
John
Sure.
- [86:53]
Soren
But we do know that like focus is probably the most important thing for a startup and the market for FPV drones is massive and, and only growing and they are like, I believe they are the most important type of drone to be working on right now. And until America can produce them in the millions, we are pretty focused on that.
- [87:13]
John
Yeah. Makes sense.
- [87:15]
Jordy
What is the state of drone racing today? Is it growing in popularity or is it staying niche? Is it. Yeah. Are you guys hiring out of it?
- [87:24]
Soren
We are definitely hiring out of it. We have lots of drone racers on the Neros team. Yeah, it's been a great talent. I do think that unfortunately it has sort of fallen off in popularity from its peak, but I do think it's going to come back, especially with all of the relevance to military. We're starting to even see military drone racing leagues coming up and that's where like I think that is going to become the pipeline for drone racing talent in the future.
- [87:51]
Jordy
The new, like sport shooting where on a base, it's like, who can. Who's the fastest, most accurate pilot drone?
- [87:58]
John
Would be fun. The other thing that would be interesting, I don't know if anyone's doing this, but autonomous drone racing league, that feels like pretty valuable to build out that skill set. Can you as a team build a software stack that gets you through all of the different obstacles while you're being jammed or while there's flashing lights going on and off and adding some Sort of variability.
- [88:25]
Soren
Yeah, I think you would have to add a lot of variability because the hardest thing about autonomy is not making a drone go to a known point or making many drones go to a known point. It's operating when you don't have gps, when it's dark out, when there's bad weather, when your comms denied. That's why autonomy is. I think it's behind where most people think most drones in Ukraine are not autonomous at all. And so.
- [88:50]
John
But that's true of self driving cars in America.
- [88:52]
Soren
Yeah.
- [88:52]
John
Like there's a lot of teleop going on, there's a lot of stuff like that. And yeah, we're just still years away from it actually being.
- [89:00]
Soren
Exactly. And we're huge believers in autonomy. We're scaling our autonomy program and it's going to make drones just so much more effective for soldiers. But there's been AI drone racing leagues for a long time and like the University of Zurich has been working on this for many years and they have a drone that's beaten like professional pilots around a closed course, but it only works in a closed course and often they have hundreds of camera angles and they're like tracking the position of the drone from outside. Yeah, that doesn't actually apply.
- [89:32]
John
That doesn't count. Exactly.
- [89:33]
Kaz
Yeah.
- [89:33]
John
You need to narrow it down because I imagine that I have this joke. This is a joke of a test for AGI, which is like I want the humanoid robot to get into a, a manual sports car and do the Nurburgring in seven minutes, like shifting gears with the G forces. That is extremely difficult and we are clearly decades away from that. And I think the same thing is probably true for actual drone racing, like how long it takes if you don't have all of the extra perfect information. You actually try and simulate what it's like for the human.
- [90:08]
Soren
Well, I think the lap record on the Nurburgring for a manual sports car is, is, I think it's right above seven minutes. So they'd have to be doing really well. Gotta get them.
- [90:17]
Jordy
Well, a robot, robot can, a robot can take it to the edge. Right. Like you could. Robot could crash 20 times in order to actually get the lap time. So potentially you could be like, well, on this corner we can hit it at 180. Even though, like there's a 51% chance we'll go into the barrier.
- [90:36]
Soren
We. The next episode from the Nurburgring. From the passenger seat.
- [90:40]
John
That'd be amazing.
- [90:41]
Jordy
From the passenger seat. I'd love that.
- [90:43]
Soren
Up the stakes.
- [90:44]
John
Have you gotten into racing I know some of the Gundo guys love racing.
- [90:48]
Soren
Yeah. I mean, I loved racing sports from a young age and was focused on drone racing for about 10 years. But I'm also a huge car guy and so I follow a lot of it.
- [91:00]
John
That's cool.
- [91:01]
Jordy
We're doing a TVPN track day.
- [91:03]
Soren
That would be incredible.
- [91:04]
Jordy
You will get the invite.
- [91:05]
John
Yeah. What's the, what's the team size? Like, how big is the company?
- [91:08]
Soren
So about 80 people now and we're hiring as fast as we can.
- [91:12]
John
And are you going to stay in El Segundo? Do you have to graduate and leave?
- [91:16]
Jordy
Like, they're already global. It's already already an international businessman.
- [91:19]
John
Yeah. But I mean, in terms of hq, it feels like El Segundo is like this amazing, like proving ground for all these companies. But at a certain point, if you want 20,000 square feet, 200,000 square feet, it just makes sense to like even just go like one, you know, one city over. But what's that?
- [91:34]
Soren
Like, we're expanding and we're trying to stay in El Segundo. There are big buildings.
- [91:39]
Jordy
Yeah.
- [91:39]
John
Abls there.
- [91:40]
Soren
It's. Yeah. I mean, you have to kind of be intentional about it. And it's not an easy real estate market by any means, but we're trying very hard because this, I think the city's done a lot for us and we want to stay there. And yeah, we're growing a ton in the headquarters in Los Angeles as well as our other other global locations. So really, I would say the biggest limiting factor to our execution is just the number of great people we can get on board.
- [92:08]
John
Is there, is there going to be like a separation on like where the factory is at some point? Like you'd set up a factory in like a Midwestern city or something like that? At some point.
- [92:18]
Soren
Yeah, that's. That's very likely. At some point. It doesn't make sense to do the scale that we're talking about in California. But you have access to the best engineering talent.
- [92:28]
John
Sure. So for design stuff.
- [92:30]
Soren
Design. And then you still need a lot of those engineers to be willing to also go out to the factory, wherever it is, because it is critical to have your engineering talent right next to your production.
- [92:41]
John
What about automation on the production line? Get me up to speed on how relevant that is versus you're trying to iterate. And at a certain point you might learn something from the battlefield and need to change the entire design. So you don't want to bake everything in, right?
- [92:57]
Soren
Yeah. Automate is the last step in the formula. And so you can even look at, like, the iPhone production, where, you know, they make a new version every year. And a lot of that is hand assembly done with, like, simple tooling. Tooling is really important. And being smart about your workstations and your work instructions and, you know, you want to be making it as easy as possible for the human operator, but a lot of the time, it does not make sense to automate.
- [93:25]
John
So is the DJI Blackout Factory fake news?
- [93:28]
Soren
I think it's real.
- [93:28]
John
You think it's real?
- [93:29]
Soren
Yeah, and it's hard to say because the last time they let a camera into a DJI factory was like, five years ago. But I think that should tell you something about what they're working on.
- [93:38]
John
Interesting. Well, they could be faking it, right? Because they could be like. Yeah, because if the iPhone. I think the iPhone pulls in like 2 million.
- [93:44]
Jordy
There's just a bunch of people, bunch of workers in there with night vision goggles on.
- [93:49]
Soren
Really Blackout background.
- [93:50]
John
Yeah, we turn the lights off. Like, we got you owned. Like, tried this. Americans, you guys suck. And it's just like working with night vision. I don't know, but you think they're.
- [94:01]
Soren
Pretty advanced, but at some point it doesn't, you know, like, you don't think it breaks the laws of physics or something, so. Well, it doesn't necessarily matter if they're able to produce at scale, at cost, like, which they're already doing. So.
- [94:12]
John
Yeah.
- [94:13]
Soren
Whether they're doing it all with robots or all with people, they're already able to do it, so it doesn't. It doesn't really matter. We need to figure out how we can do it in America.
- [94:21]
John
Totally, totally. Yeah, yeah, yeah. That makes a ton of sense. It's funny.
- [94:24]
Jordy
Great stuff. Well, thank you for the update.
- [94:27]
John
Yeah.
- [94:28]
Jordy
For doing this work.
- [94:29]
John
And congratulations on the round.
- [94:30]
Soren
Thank you, guys. Great to see you.
- [94:32]
Jordy
We'll see you at the track.
- [94:33]
John
Awesome track soon. We'll talk to you soon. Thank you so much. Let me tell you about Profound. Get your brand mentioned in ChatGPT. Reach millions of consumers who. Who are using AI to discover new products and brands. Our next guest is already here in the TVP and ultradome, looking fantastic. What an outfit. You're gonna have to break that down for us. Thank you so much. We have Jeff from Andrew. Great to see you.
- [94:59]
Jeff
You too, brother.
- [95:00]
John
Please.
- [95:01]
Jordy
Every guy should have, like 20 or 30 jackets like this. Build it up over time from ebay.
- [95:09]
Jeff
Did not smell great when I first got.
- [95:10]
Jordy
Yeah, yeah, that's the. That's the problem. That's the problem. Great to have you here.
- [95:17]
Jeff
Great to be here.
- [95:18]
John
For those who aren't familiar, please introduce yourself.
- [95:21]
Jeff
My name is Jeff Miller. I'm the VP of Marketing at Anduril.
- [95:23]
John
How'd you wind up there?
- [95:25]
Jeff
Long windy story. So I was starting out in advertising. I was inspired by those old Spike Lee commercials. It's got to be the shoes. I always knew I wanted to work in advertising and marketing. Worked on Ogilvy, then went to PepsiCo where you build great classic brand marketing principles. And then I decided I wanted to go and do something that felt much harder, much more foreign to me. So I went to la, spent six years here working at Snap, and had an incredible experience there building pre IPO as they went public and beyond. And I had a global team at one point. But the way I describe it, there was like great formative experience, but it felt a lot like eating potato chips. It was. It was really fun, but it was. Tasted good in the second, but didn't leave any sort of meaningful impact on me beyond just the moment. And so I was looking for something more impactful and that's what drew me to Anduril.
- [96:13]
John
How do you think about who you're targeting with Anduril marketing? Because it feels like I've never bought an Anduril product. I love the brand. Is that relevant?
- [96:24]
Jordy
But in an alternate timeline, you would have worked at the company.
- [96:27]
John
Yeah. So is it recruiting focused or are you. You actually trying to do brand marketing that will hit with like the buyer in dc? Do you think about it that way? Are you at all quantitative or is it like way? Is it just a way higher level?
- [96:39]
Jeff
The way we think about it is that we, of course, are thinking about the operators within that are going to use our actual products and thinking about the Pentagon, the people are going to buy it. But ultimately we're also thinking about our employee base, our future employees. So how do we be thinking about brand as a talent magnet. But even broader than that, we think about Americans at large. For us, we believe defense deserves really strong brands. The warfighters deserve strong brands. And I think if you look at the current administration, what they're doing with the Department of War and their storytelling, or even let's give an acknowledgment to the Marines. The 250th anniversary today of the Marines, and you look at the content they put out over the weekend, it just makes you want to enlist. And. And for us, it's been a historically opaque industry that has really lived in the value of not Telling clear stories. And we see the complete opposite. We think that this story deserves to be told for our war fighters, for the American taxpayer to understand what we do and why it's so important.
- [97:40]
Jordy
What was the historical marketing strategy of the Primes? Did they do, how did they even think about their marketing strategies? Because obviously you came in and you're like, hey, let's reinvent marketing in this.
- [97:51]
John
They are iconic brands. Like there's just no denying that if you just walked down the street and.
- [97:56]
Jordy
The question that I, the question that I have, people are iconic because when you look at some of the products that they've made, specifically like fighter aircraft, certain firearms, et cetera, like they are iconic products that make you. You know, people post like the B21 Raider as like a meme.
- [98:15]
John
Yeah.
- [98:17]
Jordy
You know that you're onto something if you're product is being turned into a meme. But I just wonder if there was any history of them doing, saying, hey, let's do an out of home campaign.
- [98:28]
John
Yeah.
- [98:29]
Jeff
What I think you're hitting on is a really important point. When we talk about brain here. It starts with the product itself. Product is brand, I think in our category as much as any. Because it has this great ability to speak to national security in a way that will rally the country to really think about what's great about America, about advanced manufacturing, about innovation, about what Americans hard at work can achieve. So if you look back at the 50s, 60s, 70s, there's incredible advertising that you would see from Lockheed and from the other Primes. And that's something that.
- [99:01]
Jordy
And were these like Porsche style ads where it's like a lot of text and just like a picture of it and it's like the F16 is not just a fighter jet.
- [99:12]
Jeff
You know what's so great? So I worked at a couple named Ogilvy Mather and David Ogilvy is famous for starting that style of app.
- [99:18]
Jordy
Yeah, yeah, yeah.
- [99:18]
Jeff
The long lead copy. And I think why that resonates so well in the context of Porsche is because ultimately it's just a really great story about a product that isn't for everyone but resonates with a specific set of people. And in a lot of ways those are the principles we use today.
- [99:34]
John
Yeah. Walk through like how you actually think about a whole campaign. I feel like Anduril launches a lot of products and there's a lot of different tools in the tool chest. Like I'm thinking about the Eagle Eye launch. There was obviously a video. There was also like a Joe Rogan appearance which is like, is that all in one project brief or deck? Or how do you think about, like all the different touch points? Because there's so many. With something like Anduril, where product marketing for a new launch might be a dinner in D.C. or it might be a Joe Rogan experience, there's so much that you can do that's not just like, okay, make sure the Facebook ads are turned on.
- [100:12]
Jeff
Well, what I think you're, you're seeing rather than something like Facebook ads, is we're really speaking to capabilities versus selling ads in the way that we think about it. And I want to give a real credit to the team behind here. So Shannon Pryor, our VP of communications, Jen Bucci, our VP of design, Andrew Lee, who's our director of product marketing, all of these people together are working closely with their division, with their business line, with their founders on how do we tell one cohesive story. And I think what's important here, it's not a template that we use. Depending what that product launch is, depending on the message that we're trying to communicate, depending on who the core customer is, all of those influence the approach that we take. So those elements that you spoke about for eagleeye, all of those were worked in close coordination. What was true, and I think is always true of the products that we launch is it's always first and foremost about demonstrating real capabilities. We have a rule, this comes straight from Palmer, the no render rule. And what that means is that we're never going to fake our capabilities. We're going to always demonstrate the work that we do in a way that's reflective of the actual capabilities themselves. So what you see on screen here is a real capability of Eagle Eye. It's mission planning. We had another vignette that spoke to our heightened survivability, our lethal capabilities. And what I give a lot of credit to our design team is the way they thought about this was actually showing the real first person perspective. That is a true capability of the product. And then our social team, what we were really clear on is you've got to drop people straight into the action. The way that you're going to get them to buy in is actually showing it and not doing a lot of buildup before you get to the capability.
- [101:45]
John
You did an out of home campaign for don't work at Anduroll. Are you doing an out of home campaign for Eagle Eye? Is that relevant? How do you decide where to do what?
- [101:55]
Jeff
So I personally am the biggest fan of out of home and I think there's there's reasons that I love it that translate to things like nascar. It's an undervalued asset when you think about it in the context of a marketer.
- [102:07]
John
Sure.
- [102:07]
Jeff
If you really understand how to use a canvas in an intentional way, you can really stand out. So when we think about outdoor, we're thinking about how it's going to show up on social. You guys do an amazing job of that as you think about the clips on the show.
- [102:20]
John
Sure.
- [102:21]
Jeff
For us, every time we're talking in outdoor, we have one simple role. Say less and that it's like you have to have. It's another old Ogilvy role. He says seven words less. I like to say five words or less on it. So for Eagle Eye, we had a very simple line, superpowers for superheroes. And we demonstrate the capabilities. Or when we showcase fury, which you guys were talking about with Soren, we say fight unfair.
- [102:44]
John
Yeah.
- [102:45]
Jeff
And so you have these lines that have a really clear perspective that should make people immediately think about what you're saying, whether they understand it in the moment or not. It should stick with them.
- [102:54]
John
Yeah. And I think it just. We've seen, we review our home campaigns all the time on the show because we see them hit the timeline, we talk about them.
- [103:03]
Jordy
And we love advertising. We love advertising more than anyone else. I'd like to maybe you like advertising as much as us, but there's not many.
- [103:10]
John
We're in the conversation gal. But it is hard when if you're a new startup and you're selling a piece of software that isn't highly visual and people aren't familiar with your brand just like as much as you might want to be. I'm David Ogilvy. I got this good tagline. It's just not going to break through. As opposed to, okay, if you show me a picture of a plane, even if it's a little bit. Looks different and the landing gear is a little bit different, I'm going to know that's a drone, that's a plane, that's a piece of military technology. There's all these cues that you can lean into also, Andrew, so big now. Like just you must like you must.
- [103:45]
Jordy
Driving, driving. Aware of it. Driving on the 101 into SF.
- [103:49]
John
Yeah.
- [103:49]
Jordy
The disparity in quality of the outdoors.
- [103:53]
John
Tell us the story. Tell us the story.
- [103:55]
Jeff
So Trey tweets at me at like on Monday at 7:36am he's, he's going to the office of Founders Fund and he's looking at his 37th terrible enterprise SaaS as on the, on the 101 and he says can we please just put a fury on a billboard on the one on one. So I have to stop looking at these ads. And he tags at me directly. And I take this as a personal challenge. So when I worked at Gatorade we talked about moving at the speed of sport. So for me at this point it was the challenge is on. We have to have something live the very next day. So by the next day we had an ad on the 101 and I tweeted, I didn't even tell him I was doing this like right back at him. And credit to our team again. Moving, moving quickly. It was a giant fury that said it said AI for fighter jets, not Enterprise SaaS. I love that.
- [104:40]
Jordy
Last time actually wasn't last trip but a few trips ago to sf, I saw a billboard. I was so confused by it that I went to the website because I was like who is, who is running out of home in such a confusing way? I land on the website, still don't know what the product is, what are they doing? So I think that just that clarity with out of home is so important. Where I not only saw the ad, I went, I did what they wanted. I imagine go to the website and I'm still come away from it being like what does this company do? They have enough money to buy billboards. But yeah, I still, I mean I still. We work with ad quick. Obviously we're biased, but I still think that out of home is the most undervalued form of advertising, 100% and you.
- [105:25]
Jeff
Hit one of the keywords on the head. We don't look at marketing as superficial or fluff. Marking for us brings clarity. And when you apply clarity with context, that's when out of home can be greater really any medium. But a couple examples I love are in Dayton Airport. If you fly into there, it's about 10 minute drive to Wright Patterson Air Force Base. So where we have our customer for what you referenced earlier, YFQ44A is right there outside of Dayton. And for those of you that know the history of Ohio, Dayton was also the cradle, the birthplace of avoid where the Wright brothers were working on their original Wright Flyer. In fact, if you're in that airport, you will see a replica of the Wright Flyer hanging from the ceiling. Right behind that you will see a full scale fury where it simply says actual size. And so that context, that ad would only work in the context of that airport. You put that in any other airport in America, it becomes less relevant. So whether it's on the 101 or whether it's in Dayton Airport, we're always thinking about the media placement as much as the message. And you had Coogan asked about the don't work campaign. That's the one time we intentionally leaned into confusion. So our campaign there, the brief to Jen and her team was simple. I won an ad campaign. It reminds me of that campaign, if you remember from Netflix. Netflix is a joke where when you first see it, you're not sure if it's for Anduril or against Androl. So the creative they came back with, which was beautiful and just really thoughtful, was that we would do a corporate campaign that says work at Anduril and then of course was graffitied, was tagged and everything that was graffiti was saying don't work there. And what I give our team a lot of credit. We had already bought both URLs. So whether you go to work@anduril.com or don't work@Android.com, you're still going to land where we want you to land. But it just became provocative in a way that whether you're Boston, Seattle or Atlanta, the three markets we really focus focused on with our people team to recruit, you were going to see our message and you couldn't miss it. It was undeniable.
- [107:17]
Jordy
What did some of your early mood boards look like for Anduril? I feel like Anduril had effectively first mover advantage in marketing in this new category of new players and defense. And a lot of the. When I think about the visual surrounding Anduril, I think this is what a modern defense tech company should look like. Maybe that's because I grew up playing Call of Duty and Anduril looks like a lot of the visuals and even, even the UI and stuff feels like it just fits into those worlds. And I know a lot of, I'm sure a lot of our armed forces feel the same way. But what, what was like when you were mood boarding? I don't know if that was a process that you went through with, with Jen or other people on the the team early on. Like, what kind of inspiration were you pulling in?
- [108:06]
Jeff
Well, you hit there on a few words that are really important for us. When we think about building this brand, we think about building it in a way that is open, that is modern, that is honest, and we do it in a way that we're really conscious that we're building for the generation that ultimately is going to be responsible for building national security of the present and the future. So the ability to speak in a language, whether that's our voice, which I'm responsible and our team is responsible for, or our identity that Jen and her team are responsible for, we're always thinking about the way that we can land something that feels really, really unique. And so full credit in terms of the identity work goes to Jen and her team and to Palmer and how they're building. And this extends from everything from the product identity to our industrial design environmental to how we think about the brand identity. And then what I think our team does really well is really establish a clear voice that whether it's on the identity or on the voice, we talk about it as brutalist, meaning we're not speaking in opaque terms. That is typical of the category. We're talking in really, really simple language that a 14 year old person can understand. If a 14 year old can't see that and say I get it, then we've missed the mark.
- [109:17]
John
Yeah, no render policy, only anime policy. There's a lot of anime. When do you pull anime off the shelf? If you. Is there going to be an anime video for Eagle Eye? Yes or no and why or why not? Sure.
- [109:31]
Jeff
So we talk a lot about this as the Android Cinematic Universe is the way we like to describe it internally. And obviously it's born out of Palmer's passion for anime early on. But it's something that I'm so proud of in the context of what our team has built because all of it, it's not using AI, it's all done like through digital and brush and it's a really powerful tool for us because now we've created an aesthetic around it.
- [109:55]
John
That'S specific to us and it makes it clear that you can look at one frame and you're not confused, you're like, so you can go into the future and you can actually tell the story of what Anduril might be doing in 10 years and you're never confusing and you don't even get in the comments and debates. Oh, that's cgi. It's like of course it came from a computer.
- [110:13]
Jordy
Exactly. I won't name the company but John and I were having this debate over a defense tech, hard tech company that we were, we, there was a three minute video and we were just going frame by frame and I was convinced that it was, that it was like CGI or like AI generated. John was like ah, like I kind of want to believe it was real.
- [110:33]
John
It was, it was cutting between so bad. So, so they actually had a Thing that would take off and fly.
- [110:39]
Jordy
This is a company. This is a company that's. This is a company that's. That's public.
- [110:43]
Paul
Right.
- [110:43]
Jordy
So they're putting name names.
- [110:46]
John
It can. Yeah, yeah. It can do vertical takeoff but not move or something like that. It was weird. It was bizarre. But yeah. So, so, so for Eagle Eye, like when. When would you use that and why? And.
- [110:58]
Jeff
Well, I think you're speaking to what's important when we make these choices. It's a creative choice.
- [111:02]
John
Sure, sure, sure.
- [111:03]
Jeff
And we're thinking about it in the context of where is really great room for lore and story building.
- [111:08]
John
Yeah.
- [111:08]
Jeff
So what I'll tell you is with, with Eagle Eye, we had great ability by showing the first person perspective. We thought that was the, the most impactful way in. But what I will confirm is that there will be a chapter three to the animatic, the Android Cinematic Universe. So just be ready. It's coming. 2026.
- [111:24]
John
That's exciting. That's exciting. Talk about sports marketing, is that also underrated? Like out of home? What's your been your strategy? Did you dip your toe in with small tests? Now you're doing something big with nascar? Walk me through the thesis.
- [111:36]
Jeff
That's exactly right. So we dipped our toes with the Chargers, who are a partner of ours. They actually shared property with us, their old training facility in Costa Mesa. They've now moved to a beautiful facility in El Segundo. But if you're at the game last night, Sunday Night Football, where Aaron Rodgers looked like old man Rodgers, but the.
- [111:54]
Jordy
Chargers, is that good or bad? I didn't call it.
- [111:56]
Jeff
Oh, Steelers got smoked. Luckily I'm an Eagles fan, so I don't mind.
- [111:59]
Jordy
Aaron Rodgers is on the seat.
- [112:00]
Jeff
He's on the Steelers. Oh, come on, Jordy.
- [112:02]
Jordy
No, seriously, I. Seriously, we don't know.
- [112:05]
John
I thought he was just a little Pat McAfee.
- [112:07]
Jeff
He might be full time.
- [112:08]
John
I thought he was full time.
- [112:09]
Jeff
So if you were there, though, what I think is super cool about a partnership like that is we dipped our toes.
- [112:13]
John
Yeah.
- [112:13]
Jeff
Is we had 16 veterans from Andrew that were there.
- [112:16]
John
Cool.
- [112:16]
Jeff
And the way they got to go to that game is that a colleague from our office from our team nominated them and said why? And it was grounded in their character. It was grounded in their service, why they were selected to represent our company. And so if you were there watching on their 80 yard infinity screen, you saw our veterans being recognized there and also how much it meant to them to be there. So everything, when we look at sports marketing, we look at it as a way to find the ways that we can, yes, find value but also to stand out in a way that we have the ability to do something unique and that we can honor and reach the military and defense community. So that's why you see us leaning into things like NFL or of course nascar. NASCAR more than any other sport over indexes on that military and defense community has about 4x the ratings of F1.
- [113:04]
John
In America, of course.
- [113:05]
Jeff
And so while we see so much oversaturation in F1, the amount, the economics of a deal there to be a mid level sponsor on a mid level team.
- [113:16]
Jordy
I know the disparity in earnings too from when you look at let's say the 20th person on the grid is probably making a couple million a year from a salary standpoint. And then some of the, you could be like top 20 in NASCAR too and you're just, you're earning a good living. And so the opportunities for companies to support a sport that so many Americans love and be able to have be a meaningful player in that is amazing.
- [113:43]
Jeff
And this is a call to great brands in this country, consumer brands who have exited that sport. I mean NASCAR is on the up and up and for us we have the, this exceptional opportunity to sponsor a race on a military base. It could not be more of a direct target for us. And what I love so much about our company, this applies to whether you're working in design, video production, marketing, comms is we have the full trust of our founders to make these calls. We keep them directly in the loop but they trust us to make these big swings. And so next June on that base we're going to show up in a way that no one else in the sport does. And we have a partnership directly with Hendrick Motorsports. And so that's Jeff Gordon's team and we've got William Byron who won the regular season. Hendrick also has a defense division. Like there's all these connective tissues that we can do storytelling year round.
- [114:29]
John
Yeah. Talk about the menu of options for working with NASCAR. Broadly it sounds like the Anduril 250 it's sponsored of a race. There's also team level sponsors, individual driver sponsorships. I mean I'm sure some brands are out there paying for promoted posts on some drivers. Instagram one off. Right. How did you land on where you landed and do you think this will continue to grow and mutate? Because you know what we've seen with like Red Bull, like they have one F1 team. There's no, there's no Red Bull race in F1. It's just the team. And so I'm interested to think about what, what's out there on the menu, how you landed, where you landed.
- [115:08]
Jeff
Sure. And I'll talk about this in the context of nascar, relative to another big swing of ours with Ohio State.
- [115:13]
John
Sure, sure.
- [115:13]
Jeff
So with nascar, it was about how do we make a big splash on a major stage, especially with America to 50 coming up.
- [115:20]
John
Totally.
- [115:20]
Jeff
I mean, it writes itself, especially in that first year.
- [115:22]
John
Sure.
- [115:22]
Jeff
And with that deal, we have the rights to. To activate with a specific team. There's actually an activation fund built into our deal to work with this specific team.
- [115:31]
John
Okay.
- [115:31]
Jeff
We met with eight teams on the grid and found the one that really aligned with our values. And that's how we end up with Hendrick, which. With Williams specifically as our driver. But there's many different ways in. For us, we see this as a relationship that we fully intend to grow. We're going to be with the sport for at least five years. I expect that to be much, much longer than that as the sport itself is growing. And then you look at that in contrast with Ohio State. Why did we do the deal with Ohio State? Well, we're building Arsenal One, of course, our 5 million square foot manufacturing facility about 10 minutes away from the heart of Ohio State campus. We're bringing 4,000 jobs directly, another 4,000 jobs indirectly through the build of Arsenal One. And so for us, we know the best way to win the hearts and minds of Ohioans is talking to Ohio State and not doing it in a superficial way about just a sports sponsorship, but actually thinking about the ways in which we're going to work together for job placement, for STEM programs, for community engagement, for military community, and how we make sure that they have Skillbridge. And so for us, those are examples where we go broad with NASCAR and we go deep with Ohio State.
- [116:34]
John
It's a great deflection from just the truth, which is the Trey's from Ohio, so he's got to go all in.
- [116:39]
Jeff
I mean, Trey would have a sponsor in the Bengals right now if he could.
- [116:41]
John
Yeah, no, I wouldn't be surprised.
- [116:43]
Jeff
You're going seven. I don't know.
- [116:44]
John
He's going to do it. He's going to do it. So what else is. Is special about this, about this race? Walk me through, like, what race weekend, what race week looks like. I mean, I imagine a bunch of people from the company are coming out, like, what are all the different ways that you are getting the lift out of it?
- [117:03]
Jeff
100%. We see already. Whether it's from people on the Hill.
- [117:07]
John
Yeah.
- [117:08]
Jeff
To our. Our investor community. The second we announced that we're doing a race, we were getting calls from. From everyone.
- [117:15]
John
Yeah.
- [117:16]
Jeff
And I'm really excited because I think this will be a moment that becomes a real focal point for America 250 at large. So we're really hopeful for everyone that you could possibly imagine to show up to this race. So as we lead up to it, I think what you'll see is us start to drop content in a way that you typically don't see in sport. So whether it's the scheme, which we just finalized on Friday when we finally released that, I mean, our design team, like knocked out of the park to.
- [117:42]
John
The helmet delivery, essentially.
- [117:44]
Jeff
Exactly. Delivery to the fire suit, to the die cast cars. We're going to make every single thing a moment. And then we got space on the base that we could do some really special demonstrations of our product capabilities.
- [117:56]
John
Yeah.
- [117:56]
Jeff
So we're working right now with NASCAR and with the Navy to think about the ways that we can showcase our product.
- [118:02]
John
So in theory, like, yeah, like Fury Flyover.
- [118:06]
Jeff
I mean, sooner or later, this is what I'll say is that now that we've done last week, as you alluded to earlier, our first flight and just a massive shout out to our. Our air dominance division, like for them to accomplish what they did in just over 500 days, from clean sheet to first flight, it's unreal. It's unheard of in the industry. All like the touch of a button. It was really cool to be a small part of that and to observe it. But I think it goes from there to first flight to how do we start to think about ways that we can demonstrate this more clearly in public?
- [118:37]
John
Dive LD demo. You gotta be just like, yeah, it's down there.
- [118:41]
Jordy
Yeah, you can't see it.
- [118:42]
Jeff
Dive Excel.
- [118:42]
John
We're gonna put her in Dive Excel. Yeah, it's down there.
- [118:44]
Soren
Yeah.
- [118:44]
John
Trust us, it's down there.
- [118:46]
Jordy
We gotta do a live show from under the sea.
- [118:49]
John
And we're showing off our new stealth technology.
- [118:51]
Jordy
There's.
- [118:53]
Jeff
I want to share some fun facts, please, from the don't work at Anduril campaign. Oh, yeah, you can pivot back. There's two stories I'd love to share here. One is how this originated. So about three months in, and friend of the show, Matt Grimm, I get a slack from him that simply says, why do you hate interns? And I'm trying to distill the context behind this. And I realized it's because I had responded to our recruiting team about a week earlier. They had shared a post from I'll also redact the name of this company. Their intern post, where it's like 30 smiling interns in front of the logo saying, first day at Company. And they said, hey, can we do this? And I said, absolutely not. We're not putting that out there. That's not the ethos of our company.
- [119:40]
John
Sure.
- [119:40]
Jeff
And so I said to Grim, I'm like, I don't hate interns. I hate shitty X Company inspired intern posts. I said, if we're going to talk about what it's like to work here, we should tell the people all the reasons they shouldn't.
- [119:51]
John
Sure, sure.
- [119:52]
Jeff
And so Grim and I went back and forth and started to outline what ended up becoming the working script. And it was largely drawn from Palmer's own words, Trey's words, Lulu's words. Early days of saying, hey, we're a weapons company. And if you don't want to work on that, if you don't believe in the mission, if you don't understand why we build what we build, if you're not ready to work your butts off here nonstop, if you don't love America and are proud to say it, then don't work here. There's like, no disrespect, but the sooner we understand that about each other, the better. And what I love so much about Grim, two words. Ship it. And from there, that's all we needed. And then it was a group of five of us with our talented creative team. Trevor, Alex, Ben, with Jen in a room building.
- [120:33]
John
Is there ever a moment where you felt like if you didn't put that out, you would run the risk of people showing up just because Anduril was like, a hot stock, and they would be like, wait a minute, like, I actually have, like. Because it seems crazy to not get. I mean, what.
- [120:50]
Jeff
Weed out is what I'd call the mercenaries. The people that are just there, like, try to get the annual equity.
- [120:55]
John
Sure, sure.
- [120:56]
Jeff
We're saying this is extremely hard.
- [120:57]
John
It's going to be hard.
- [120:58]
Jeff
Guess what? Like, you're not going to have fun here if all you care about is cash.
- [121:01]
John
Okay. Yeah.
- [121:01]
Jeff
And trying to get equity. Do not come here. You know, we see it because I do the orientation every two weeks and we have 150-200-New people coming in. And I ask people, I'm like, who saw this before you started? And every single hand goes up. So what you're speaking to is the greatest measure of success, is that it was a filter or the people that were not mission aligned. On top of that, you talk about metrics. 30% lift in applications because of that campaign.
- [121:23]
John
Okay. Yeah. What is the intern cycle like now? Because it feels like there's more and more people dropping out of college early. Is Anduril set up to deal with that? I mean, I feel like there's some people who might start intern and then take a gap semester and then wind up just hanging out forever. Tyler started as an intern, and then he took a gas.
- [121:45]
Jeff
Master, is Tyler required to dress like you every day?
- [121:49]
John
Well, yeah, we have like, a, you know, general. If everyone's wearing suits.
- [121:52]
Jordy
White suits today. Because the markets are up.
- [121:54]
John
The market's up. So we wear white. Love it. But. But I am interested. Like, Palantir has the meritocracy thing going on. There's definitely this idea. I mean, this goes to. Back to Peter Thiel and Founders Fund and, like, a lot of just the idea that, like, is the internship even necessary? Like, what are the roles where the internship makes sense versus just, hey, you're ready. Get in the lead.
- [122:17]
Jeff
It's a perfect question, especially for right now, because we're talking about this all the way through our executive ranks with our people team about what it actually means to come here and what matters. And we call it the Anduril Forge program. But we're working on the campaign right now that will be the next sequel, if you will, to don't work at Anduril. That won't tell people. Well, we aren't. It's gonna speak about what we are.
- [122:38]
John
Sure.
- [122:39]
Jeff
And what it means to work here and the importance of work. And so it matters way less to us about your quote unquote credentials. We don't care. We care about the work that you're gonna do, the alignment to the mission and your ability to add value.
- [122:53]
John
Yeah. Yeah. It's awesome.
- [122:54]
Jordy
By the way, I don't know if.
- [122:56]
Jeff
You know this even Jordy, but we started our campaign for don't work at Anduril with our intern taking over. So, like, midnight, my buddy Sean and I were crushing, I think, Coors Lights. And then we posted Just simply Don't work at Anduril. And we had somebody give us really good counsel because it was just going to be that. And this man of mystery that rhymes with Don Hoogan said to us, he said, you got to go way, way harder than that.
- [123:28]
John
Like, there's such a fertile ground. Like, there's so much Andoril lore, that there's so many different elements that you could pull from, from different things. Palmer said. Sword art, all online.
- [123:39]
Jeff
Pacific Rim.
- [123:40]
John
Pacific Rim robots.
- [123:41]
Jeff
So there's about 10, 10 tweets that are intern wrote that are actually ghostwritten by.
- [123:46]
John
I think I sent you like 25. And, and, and you picked, you picked.
- [123:49]
Jordy
Oh, right, right, right. I know, I know this, I know this.
- [123:51]
John
I think Jordy does that. Yeah. One day we need to post the ones that didn't make the cut because there might have been some over the line, so. Good.
- [123:59]
Jordy
Last question. Do you think that advertising has changed in the last 50 years? Even in the last hundred years? Because when I, when I hear you talk, you're speaking, you know, running the marketing organization of, of one of the best modern brands. Right. People can debate, people can debate on whether they like the brand or not, because it's obviously polarizing, but great brands are polarizing. And when I think about the strategy, it's like ultra clear communication, strong visuals, leveraging out of home, strategically having these sort of layered strategies, thinking about all these different archetypes feels like all the conversations that a strong marketing brand organization would be having 50 years ago. And so it's interesting, I think it's interesting that we have the Internet, which is like the best marketing channel in history, and yet the marketing strategy hasn't changed very much at all since the Ogvy days.
- [125:03]
Jeff
Yeah. What you're describing to me is that what's changed is the medium. What hasn't changed is the desire from an audience for a really clear story. And ultimately that's what we're doing, is we're bringing great craft to our storytelling, which most importantly is highlighting the incredible important work that our engineers and operators are doing for our war fighters. And that's the thing that is consistent with us. And the other thing I think you said is that we understand that it's not for everyone. You know, what is important to us is that we have a really, really clear message that people understand what we stand for, whether you agree with it or not. And that is what I love because I'm so mission aligned to what we're building that I find it a great privilege and responsibility to bring the same type of disruptive approach to marketing that we are bringing to how we approach contracts, how we think about research and development, how we think about engineering or AI or design. And ultimately, there's no other place on earth I'd rather be.
- [126:05]
John
Fantastic.
- [126:05]
Jordy
That's a great place to end it.
- [126:06]
John
Well, thank you so much for coming by. I'm so excited for the Anderil 250. Next year.
- [126:13]
Jeff
Next year.
- [126:14]
Jordy
We'll be there.
- [126:14]
John
I want to be there.
- [126:15]
Jeff
By the way, here's a final idea for you guys.
- [126:17]
John
Yes.
- [126:17]
Jeff
My second time officially on.
- [126:19]
John
Yes.
- [126:19]
Jeff
You guys need like an SNL five timer jacket.
- [126:22]
John
Oh, yeah.
- [126:22]
Jeff
When you guys get to that level.
- [126:23]
John
Yeah. All right.
- [126:24]
Jeff
So you guys break out some new swag.
- [126:26]
Soren
For sure.
- [126:26]
Isaiah
We got here.
- [126:27]
Jordy
We got.
- [126:27]
John
Oh, yeah, great. Thanks so much for coming by. What else you got? Something else in the bag.
- [126:34]
Jordy
What do we got? What do we got? There we go.
- [126:38]
John
Very cool. The 24.
- [126:41]
Jordy
There we go. This is hard.
- [126:43]
John
Very cool. Thank you so much.
- [126:45]
Jordy
Good to see you. See you soon.
- [126:46]
John
This is good. Everyone needs a number. For sure. There you go. I like that.
- [126:50]
Jordy
Boom.
- [126:51]
John
Linear purpose built Tool planning and building products Meet the system for modern software development. Streamline issues, projects and product roadmaps. There is a video of an office tool tour that has been burning up the timeline. I feel like we should play this.
- [127:07]
Jordy
Play it.
- [127:08]
John
If we can pull it up. It's going to be about two minutes. From Philip Kozera. I spent $1.5 million building our office after raising a seed round. 1.5 used to be the total seed round. Now I guess it's a $30 million.
- [127:25]
Jordy
There's some $1.5 million Series A's out there. There are if you go back, like.
- [127:30]
John
Oh, for sure, for sure. 10, 15 years. So let's play this. And I will be back in just a minute. Hardware raised $30 million for this office. Let's go meet the CEO.
- [127:45]
Jordy
What is this you're here for laughing because the camera's tracking John.
- [127:49]
Soren
All right.
- [127:50]
Hayden
But let's be quick.
- [127:50]
Jordy
All right.
- [127:51]
Soren
John.
- [127:52]
John
Surfing.
- [127:53]
Soren
See you later.
- [127:53]
Hayden
Come on in.
- [127:54]
Jordy
This is. Let's track how many times they talk about surfing boards.
- [127:57]
John
We got kite surfing equipment. Good. They spent it on vibes. Coming through.
- [128:03]
Jordy
This is going to be the sauna room for now.
- [128:05]
Kaz
More like a sauna closet. But all of our kite surfing equipment.
- [128:08]
John
Is here and our kayaks are here. He's one of our first investors. He joined the company full time. From one employee to 18 in a year.
- [128:16]
Soren
You guys are going fast.
- [128:18]
Kaz
Everyone is doing something.
- [128:19]
Hayden
Having meetings.
- [128:20]
Jordy
Cracked engineers.
- [128:21]
John
Over here we got Robert.
- [128:23]
Kaz
Robert doesn't actually do work. He's actually looking at saunas right now.
- [128:26]
John
Our new product is actually called Sauna.
- [128:28]
Kaz
Because this man actually came up with.
- [128:30]
John
The idea while sonning.
- [128:32]
Soren
They look cool.
- [128:33]
Jordy
Where are they from?
- [128:34]
Paul
Hello.
- [128:35]
Kaz
Where are you from?
- [128:36]
Soren
Iceland. Matthias, that guy looks like he's the.
- [128:38]
Kaz
Only one actually working our backend infrastructure engineers do not like to be disturbed. Matthias, where are you from?
- [128:43]
John
I'm from Austria.
- [128:44]
Kaz
Can you point, point at the Golden Gate Bridge?
- [128:46]
John
It's right over there.
- [128:49]
Hayden
Let me zoom in on that. Not coming through.
- [128:52]
Jordy
We got any fun stuff here, or.
- [128:55]
John
Is it just nerd gear? Let me.
- [128:57]
Hayden
All right, this is our movie theater.
- [129:00]
Kaz
But how many times did you guys watch a movie here?
- [129:04]
John
I actually tried to get Nikki to.
- [129:06]
Kaz
Find our PS4, but unfortunately we work too much and we don't have time to.
- [129:10]
Hayden
One of my favorite things in the.
- [129:12]
Soren
Office is every room.
- [129:13]
John
I'm back, I'm back. Okay, I have a take. I have a take. Let's break it down. I don't know what this company does. They put out this whole video. They went viral, but it's unclear what they actually are selling.
- [129:26]
Jordy
Like, they're selling Nordic vibes.
- [129:29]
John
Yeah. I mean, the vibes are immaculate.
- [129:30]
Jordy
Keeping our European soul.
- [129:31]
John
And I understand that it's, like, targeted at hiring because it's like, hey, you know, we have this beautiful office. You should come work here. You should come build on stuff.
- [129:37]
Jordy
Yeah. The challenge is, unless the company's, like, winning and getting better every single day, the surfboards start to.
- [129:45]
John
For sure. Like, there was a post about, like, hey, like, you know, look at what Jeff Bezos was working on the door desk back in the day. The other thing is, like, there's a little. I think this goes over way differently if this is done by an external influencer. Like, there's been so much attention.
- [130:02]
Jordy
I know what's happening.
- [130:03]
John
No, no, wait, wait. Really? Okay. It feels like it's the founder posting.
- [130:11]
Jordy
He's posting it, but it's. I think.
- [130:13]
John
Oh, I guess there are products. Sauna AI. Okay. So they have a building.
- [130:18]
Jordy
The future of work with sauna. We love saunas, so can't. Yeah, I mean.
- [130:26]
John
Oh, it's turn your to DOS into done. AI powered workspace. It's an AI to do list. Something like that. But. But like. Like, there were people that did this exact video on the Gundo. Like, they went to Rainmaker and they were like. Like, look at the gym stuff.
- [130:43]
Kaz
You can.
- [130:44]
John
You can lift weights here. Like, there's people over there working. Or like, I. I literally went and filmed a video somewhat like this at near us. Although they were in, like, a garage and they were. They were. I just didn't have any surfboards.
- [130:56]
Jordy
I have ptsd. Because I. I knew. I knew a founder back in the day that every. He would always go surfing because he needed to clear his head sick. And I would always be thinking like, okay, like, eventually, your head's gotta be clear. You just gotta fix the product, and you can just fix the product and ship another product and make it work, brother.
- [131:20]
John
I think if your head's unclearable, like, we got a problem here.
- [131:23]
Jordy
Yeah. And I don't know, as somebody who's grown up surfing basically every. At least every week since I've been a kid, I don't find surfing, especially in Northern California, to be compatible with work. And the reason why is that it.
- [131:42]
John
Takes you out the full day.
- [131:43]
Jordy
So the challenge is that in Northern California, even if you're wearing a 5.4wetsuit, which is, like, basically the thickest 5 mil, 5 millimeters on the chest, four on the arms.
- [131:55]
John
What about 7 mil web suits?
- [131:57]
Jordy
You can get those, but, like, you get that for, like, a trip to Alaska or something like that. And the challenge is, you get cold enough surfing in Northern California even with a 5, 4, that you spend the entire, like, next, like, few hours. Like, your body is.
- [132:11]
John
I'm just laughing that we're, like, breaking down. Like, if he lived just two hours south, it'd be totally fine.
- [132:19]
Jordy
No, I disagree.
- [132:20]
John
It's impossible. Just analyzing the wetsuit.
- [132:23]
Jordy
No, no.
- [132:26]
John
What type of wetsuit did he have? If he's in a. If he's in a millimeter wetsuit, doesn't matter.
- [132:30]
Jordy
You could be in a five. Four, four, three, three, two. You could be trunking it, but you get cold enough that your body uses so much energy to reheat, and you just become slow. You just become slow. And I would struggle with this growing up because I'd go surf after school, and then I'd be doing homework, and I'd be like, I can't. Like, I just be.
- [132:52]
John
Okay. Okay.
- [132:52]
Jordy
You know, incapable of. Of. Of. Of real productivity. So I'm against surfing in the.
- [132:59]
John
In during the work week, basically.
- [133:01]
Jordy
Yeah. I basically don't surf during the work week. I'll surf sometimes in the evenings, but.
- [133:06]
John
Yeah, once you're done with your day. But they could be doing that. They could. They could have surfboards.
- [133:10]
Jordy
Yeah, but he mentioned surfing or kiteboarding or kite surfing or surfing or kayaking, like, so many times. At least five times in.
- [133:19]
John
Yeah.
- [133:20]
Jordy
Ryan says there are many doing dawn patrol in SF every day. I agree. There are. I just wouldn't be VP of Vibes. VP of Vibe. VP of Vibes Engineering, Customer Vibe Distribution.
- [133:33]
John
I certainly understand why people are saying that this is maybe a little bit too lackadaisical when you're in the trenches of the startup culture.
- [133:43]
Jordy
It was also kind of clickbait because he said the effective cost is only 250k.
- [133:48]
John
Oh, interesting. Okay, so spent 1.5 million, but.
- [133:52]
Jordy
And he got a bunch of like, ti. Basically.
- [133:54]
John
Okay, well, that's cool.
- [133:55]
Jordy
Anyways.
- [133:58]
John
Certainly seems like a nice, cool environment. Hangout. And nothing will matter if you build the business. You could have made the same argument about Facebook. Facebook was drinking beers in the office. You know, there's a famous interview. Mark Zuckerberg sitting there chugging a beer out of a solo cup. A red solo cup. And he was. And the interviewer's like, are you sure you want to be chugging this beer in this video? And he's like, it's okay.
- [134:19]
Jordy
It is just funny because. But you got Tyler hyperscaler if Tyler was drinking like this. If Tyler went kayaking.
- [134:27]
John
Yes.
- [134:28]
Jordy
After the. After the show.
- [134:29]
John
Yeah.
- [134:31]
Jordy
I would just say to him, like, why don't you just. And then came back and. And kept working. I'd be like, why don't you just do your work and then go kayak?
- [134:40]
John
True, true.
- [134:40]
Jordy
Like, why do we need to. Why do we need to combine these.
- [134:42]
John
I don't know. It seems. Seems like mostly solvable if they. If the kayaking. Kite surfing. Surfing marathon happens at the right time of the day.
- [134:51]
Jordy
Tyler put a calendar. Put a calendar invite on our calendars for three years from now to check back on word on this wordware video. We'll revisit it. Because if they have crazy product market fit, they're gonna.
- [135:05]
John
What if the CEO. They're gonna look like a world class surfer and becomes like the next Kelly Slater and just actually shreds just rolls the whole.
- [135:14]
Jordy
He's like, we're a surfing company now.
- [135:16]
John
I am gonna get on the tour.
- [135:18]
Jordy
We earn revenue when I win contests.
- [135:20]
John
Yeah, exactly. That would be. That would crush. And then you'd be eating your words, Jordi. You'd be eating your words.
- [135:27]
Jordy
No, we very well. We very well could be eating our words in just a couple of days.
- [135:31]
John
Of course, like the actual product you work.
- [135:33]
Jordy
Gabe says, why don't you bring your work to the kayak?
- [135:36]
John
I like that. I also like numeral sales tax and autopilot, spend less than five minutes per month on sales tax compliance.
- [135:42]
Jordy
Ryan says, I'm going to apply. Need somewhere to store my boat trailer. People just start applying because they need to place to store their gear. They're like. Seems really.
- [135:54]
John
Well, I mean, at the same time, like when you're. When like, like the. When you're in a crowded market, the. The. The taste of virality. Like the, the temptation of like, oh, this is good content. We should go viral with this has got to be overwhelming because it's like, it's like no one's heard of the company yet. It's brand new and you have this opportunity to go do something that can get a lot of attention.
- [136:19]
Jordy
I think, I think he, he invited criticism because he started it, it off with clickbait being like, I spent one and a half million on our office.
- [136:27]
John
Yes, yes, yes, yes. There's a little bit of too far. I also, yeah, I think, I think having someone else do this is better. Have, have an actual tiktoker come by instead of doing it as an in house thing. It just has a different aesthetic. Like if you get stopped on the street, what do you do for a living? That's different than paying someone to do a what do you do for a living Video about you.
- [136:48]
Jordy
I would say Snowflake is going to beat in Q1.
- [136:54]
John
That is one of the greatest videos ever. Just like Fin AI. One of the greatest, actually. The greatest AI agent for customer service. They're number one in performance benchmarks. They're number one in competitive bake offs. They have a number one ranking on G2. Let's go to the Tyler cam again for some reason. What's up with Tyler? Is that the. Oh, he's clapping, he's clapping.
- [137:14]
Jordy
Do you want to. Do you think we should have kayaks in the workplace?
- [137:18]
John
Yes, yes. Do you like kayaking?
- [137:22]
Paul
Probably.
- [137:23]
Jordy
I've gone like once or twice.
- [137:25]
John
Okay, well our next guest is in the restream waiting room. We have Kaz from Open Door in the TV Piano gym. Welcome to the Stream. How are you doing here?
- [137:36]
Jordy
He is welcome.
- [137:38]
Kaz
Thanks for having me guys.
- [137:40]
John
Some of the soundboard pieces.
- [137:42]
Kaz
I want to go on the record as being pro kayak, pro kayaking.
- [137:45]
Jordy
Okay, but kayaking in the workplace. Yes.
- [137:47]
John
At what point? At what point? At noon on a Tuesday. You want your whole workforce going into the frigid, ice cold sea with a 4 millimeter wetsuit and coming back cold and spending the rest of the day warming up.
- [138:03]
Kaz
First of all, I grew up in Canada so we don't wear wetsuits. We just go kayaking. I don't know what you guys.
- [138:09]
John
Okay, okay, okay.
- [138:10]
Jordy
What's the biggest fish you've ever caught? What's the biggest fish you've ever caught?
- [138:14]
Kaz
I am, I, I honestly man, this is like my, my brother in law goes fishing off the coast of British Columbia and catch these massive salmons. I am a, I'm terrible I'm objectively the worst guy to go out fishing with.
- [138:28]
John
That's like, I will ruin your luck.
- [138:30]
Kaz
I will not catch you anything. It'll be terrible.
- [138:32]
Paul
Oh, wow.
- [138:32]
Kaz
I'll fix your wi fi.
- [138:33]
John
Okay.
- [138:34]
Jordy
There you go.
- [138:34]
John
Okay. There you go.
- [138:35]
Jordy
That's helpful.
- [138:35]
John
Well, you caught a big fish with Open Door. Congratulations on the new gig. I don't know if you remember, but we've actually emailed very briefly while you were at Shopify. You saved my entire company in the span of two email exchanges. So I've always been extremely thankful to you and just Shopify generally. But since this is the first time on the show, can you give us a little bit of backstory on how you wound up at Open Door? What the. What the vision was just like, kind of how this all came together, because it's such a fascinating story to me.
- [139:11]
Kaz
I mean, I think this story has now been fully leaked. I would not have told it if it just had not been fully told by other people. But look, I've been. I loved my job at Shopify. I genuinely, honestly thought it was gonna be my forever job. And I just. I was not planning on leaving, but I became a little upset. Obsessed with Open Door. Maybe February of this year, where, like, I, as a kid, I grew up. My mom had a corner store and I would grow up. I grew up with, like, a stopwatch timing the cashiers. So, like, I have this very odd obsession with, like, operationally well run places. And from the outside, Open Door looked like a great opportunity being poorly run. So, like, sometime in February, almost as a joke that just ought and would just not leave my brain, I texted Kiethra Boy saying, hey, I'm thinking of just buying Opendoor and taking it private because it just needs to be run better. And then my. My, bless her, just, like, thought this was, like, an interesting hobby for me to figure out how I could just. I decided on my desk, fix this company that I wasn't running. And I became more and more obsessed with it because there's a very real thing that matters, man. Like, most of us that work in software don't get the opportunity to say, hey, the thing we do has a real world impact on actual families, right? And the very real thing that happens if you grow up in a home that your parents owned, like, your educational outcomes are better. There's less crime in your neighborhood. Like, same same family, same type of thing. If they own a home, things turn out better. So I became just obsessed with this company whose job it was to make buying and selling A home easier. And like most other things in the world, when you reduce friction, you get more of the thing. So if you think homeownership is good, reducing friction will lead to more of it. But I just kind of like given up on this idea of taking the company private because the company had this, this significant run and, well, I didn't have enough money to take it private anymore.
- [141:24]
Jordy
So there was a brief window. You were daydreaming about it. That was the time.
- [141:29]
Soren
Yeah.
- [141:30]
Kaz
So. And then it was on. On. It was a Sunday, like in, I want to say, mid August, like late, late last half of August. My wife and I were on the way to church. I got a call from Paul Diversa, who's an executive recruiter. And I picked up the call and I said, true story. And Paul and I had. Paul had been trying to get me to go to a couple other places. And I picked up the call. I'm like, paul, I'm on my way to church. I don't have time. I appreciate it. I'm not interested in whatever it is you're about to pitch me. Maybe if it's Open door, let's talk. And then he said, it's open door. How soon can you be on a plane?
- [142:10]
John
Wow.
- [142:10]
Kaz
And we went to church, came back, I got on a plane and the whole thing, the whole process took maybe two weeks from like that call to me starting.
- [142:20]
Jordy
How much did you, like, how much did you rely on your network to help you make that decision? Maybe some trusted advisors. Because I imagine there when I saw that you were announced that you took the job, my immediate thought is like, you know, going from Shopify, which is this like beloved, you know, incredibly well run company that you can have so much impact on because it's like one of the, one of the few platforms in the world that is just like so undeniably pro entrepreneurship. And entrepreneurship is so life changing. And if you care about impact, you know, it's. It's hard to kind of meet your bar. Not to mention that jumping in at Open Door would go from probably like a relatively calm work environment to one of the most like crazy intensive, high pressure environment where, you know, I'm sure from like a. The amount of inbound messages that you get running Open Door is probably like a hundred times the messages that, that like a company like a hundred times your size gets, you know, and so like, it is wildly different kind of life.
- [143:31]
Kaz
I don't know. I mean, look, I think Shopify is a relatively intense place to work for all the good reasons. And you kind of want to work at intense places because you only get one career. But I remember when I was thinking of leaving Facebook to go to Shopify, literally everyone I talked to said, don't do it. Every single person I talked to about leaving Facebook, going to Shopify said, don't do it. It's a terrible company. It's among the most shorted companies in history. Like, it was obscenely shorted at a really bad. It was like, churny. Like.
- [144:04]
John
Like lots of.
- [144:05]
Kaz
Like, the day I joined Citron put out a. Like a big research report saying Shopify will go bankrupt in, like 12 months. I remember, like, Citron. So everyone I, like, talked to back then in 2019, told me, don't join Shopify. Terrible idea.
- [144:20]
Jordy
And what was what it like? What did you. What did you see that other people missed?
- [144:27]
Kaz
Look, I thought the mission was a worthwhile mission and that it was very clear to me that I was the type of person who could help. I thought the mission was important. The company had done a lot of good and I could help. I couldn't see myself at a bunch of other companies, but I could see myself helping Shopify. I became the merchant services guy at Shopify. I ran the second half of the business. So Shopify has two parts, SaaS and services. I ran services for nearly my entire time there. And then Toby asked me to become the COO and I ran a bunch of other things. But I remember when I was thinking about going to Shopify, like, basically, the only two things that convinced me to do it were I prayed and I thought it was the right decision. Then I sat down with my wife and I said, hey, this is almost certainly a bad idea. Like, we're gonna move to. Like, we're gonna move. We had a kid who was less than 1, and this probably won't work out, but I think this is a worthwhile mission and I think I can help. And then she said, look, it's our job to spend our marriage doing things that will make the world a better place. Right? We call it leaving a dent in the world. So when it came time to do Open Door one, I didn't like. I gen. I talked to Keith because I've known Keith for boy for a while, but I was just. I talked to my wife, I prayed, and I thought I could, like, have an outsized impact on the company just because the type of thing I tend to be good at is a type of thing that the company seems to need. I'm not. Look, I'm. No one's idea of a corporate executive. I cuss a lot. I grew up as a nerd. Like, I didn't do all that well in my finance undergrad courses. Like, I'm. I'm like, I'm a product manager, right? I'm like, so this is. I don't like. This is how I dress. So I don't like. It was a very real thing, but at Opendoor, it felt like I could do well, given what the company's mission was. And I thought if we could do our job, it just would be good for the world.
- [146:45]
John
So, yeah, how do you think about the opportunity? How do you think about the shape of the business? Are you thinking in a decade? Are you thinking in 30 year time frame? How do you think about the long term strategy, what the opportunity is, what you want to fix in the short term, medium term, long term, how you.
- [147:06]
Kaz
Dude, we ship every week. Like, we ship every week. Fuck, 10 years, we ship every single week. Like, our job is to ship product every single week. To tilt the world in favor of homeowners and people working hard to become homeowners. We ship every week. Something changes every single week. We measure ourselves on a weekly basis. We now have a public dashboard that we use internally. We just publish it to the world. So you can see our internal dashboards externally.
- [147:33]
John
Yeah. So what are the levers that you can pull on a week to week basis? Like, what's an example of something that you can roll out that actually improves the experience?
- [147:40]
Kaz
I mean, I can tell you a product that took us almost exactly one week to launch. We launched this thing, we call it Peace of Mind guarantee. Okay, so if you ever bought a house. I remember the first house I bought and the first night I slept there after we had closed, I'm like, shit, bought the wrong house the first time. Like, that's a very real thing that happens. Because in the typical real estate transaction, the deck is stacked against buyers and sellers. Like, everyone involved has a conflict with the two principles. There's like a real agency problem. So if you're buying your first home, like, the thing that makes you most nervous is missing something, Right? So a thing we launched at Opendoor is just buy peace of mind guarantee, where you can buy a house from Opendoor, move in, and if you don't, like in the first seven days, just give the house back. We'll take it back.
- [148:35]
John
Wow.
- [148:36]
Kaz
And look, if. I think it's one of those things where, like, if you buy something on Amazon and you don't like it, you return it. But for Some reason, if you're buying something that's hundreds of thousands of dollars, you can get duped and there's no one to return it to.
- [148:49]
Jordy
I remember, I think I was, I must have been like somewhat of a younger teenager when I. When I figured out, okay, you make the most important purchase, biggest purchase of your life, buying a first home, and you don't really get like a try. Like, you don't even get to like, try it out for a couple nights. And because it's just one of those things, as soon as you actually own something and you occupy it, you start. You start. I know that, you know, I bought a house last year and I. The things I know I, I missed so many things. Like, you know, I ended up getting like, lucky, right? It wasn't like, I want to return the house, but there were so many just small things that I noticed immediately from moving in that I completely missed. And I was like, wow, thank God I didn't. That, that is not that big of a deal. Or it's like a nice to have whatever.
- [149:38]
Kaz
Indeed. There is a word for people who try to make money off you and then dodge town. We call them carnies.
- [149:47]
John
Carnies.
- [149:49]
Kaz
And we have turned like the entire real estate industry essentially into people whose job it is to kind of hope you don't notice problems. It's very weird. Like, look, we stand by every single home on opendoor.com. you buy it from us. You don't like it, that's fine. First seven days, we'll take it back. And I thought this was, I didn't think, by the way, you know, what happened from the second we thought we should do this. The time it was live was about seven days, genuinely. And the reason that was true is because there's a bunch of people in the path of doing this whose job it is at any big company to go. But actually, experts say this, there's risk or something. As a buyer, are you more likely to buy a home from opendoor.com if I tell you if you don't like it, you can return it. Yes or no? Yes. Great, let's go. Do we stand by our homes?
- [150:49]
John
So it's a little bit of an actuarial puzzle that you have to figure out, okay, what is the cost for that? And then distribute that over the buyers of that product. That seems like something a technologist, a product manager, somebody who's a little bit more forward thinking is completely set up for. That makes a ton of sense. What else is changing in the market? I'd love to get your thoughts on the 50 year mortgage that was proposed. Is that good for America? Is that good for open door? Is that something we should be supporting?
- [151:16]
Jordy
Yeah, people are comping it to what happened with Japan's market after they introduced 50 year.
- [151:22]
John
Yeah, I did see some people say, oh, it might be bad, but break it down for me.
- [151:26]
Kaz
Look, let me do the thing that I'm not supposed to do and answer the question honestly. I think that people who compare this to Japan are just deeply misunderstanding a bunch of things about the American economy. Let's just be clear. The American and Western economies are just fundamentally different because culture is fundamentally different. And economies downstream from culture, it's a very real thing that matters. But secondarily, let's go back. Democracy in America Tocqueville. In it, he talks about how the main difference between America and every other country is that Americans own the ground they stand on. It has been historically true that Americans have had a higher ownership of the land they live on than any other nation. And this has been basically the main difference between the American I own this land, I'm part of this community. Than the transient European and Eastern lifestyles. Right. If you divide the world into people who are from somewhere and people who are from anywhere, America is full of people who are from somewhere. This makes a difference. This makes a real difference to how people are raised, how kids are raised, the economy, the country overall. Now, why is a 50 year mortgage incredibly important? You would not have needed a 50 year mortgage 20 years ago. You just wouldn't have needed, in fact, when the 30 year mortgage came in in 1931, I want to say everyone literally said all the things they're saying about the 50 year mortgage. This won't work, it's too long. How can people pay it off? But the thing 50 year mortgage does is this. The 30 year mortgage was designed for a time when people didn't have student debt where the average life expectancy was about 15 years shorter, the average work time was about 15 years shorter. There's a very real thing where people are buying homes later and later. We just crossed the average homeowner buying their first home at 40. Because student debt is crushing American debt to income ratios. What the 50 year mortgage allows you to do is to get into the market, which is the best market Americans have historically gone to. It's the main source of leverage Americans get access to. Without being a big company and being a fancy person, you get access to that leverage. You can do it while paying down your student debt. And once you pay down your student debt. There's nothing that says you can't refi and pay it down faster. But a 50 year does fix what's called a debt to income ratio for folks while they're getting started. And I think it is. But hey, there's another thing that's important. The people who are against the 50 year mortgage are coming out. No one's forcing you to take a 50 year mortgage. You can still take the 30 or the 15. But what you're saying is I wouldn't need it, therefore no one can have it. Well, guess what buddy, not everyone lives in Palo Alto.
- [154:24]
Jordy
Yeah, it's interesting. One thing that came to mind for me was what you've seen in the automotive industry where typically 60 months is maybe like the. I imagine that's the most popular. Right. And then there's 72 month. And if you look on sites like Dupont Registry, John, you'll appreciate this. They have like a 200 month, you know, auto loan for supercars and it's interesting that you know, those have been getting pushed out. But the issue with cars is that they're assets that almost always depreciate massively and even on faster and faster. Yeah. And even if you look at EVs now, they depreciate at levels that you haven't seen with ICE cars. Yeah, I guess. I think part of maybe the frustration and the reaction was this is a way to increase demand, but it doesn't fix the supply side. And so maybe it's focused on kind of the wrong.
- [155:31]
Kaz
We should fix the supply side too. Look, I think we should take what we should understand what the government's saying. And they literally said this. They said this is one of the things we're doing, not the last thing we're doing. And by the way, in the last four weeks they've also done a bunch of other things. They just changed a requirement on credit ratings. They just change the requirement. They just announced that they're going to have a new FICO score in there. Look, do I think they should do things to make supply more readily available? Yes. I think they've talked about making one time consumable mortgages more available. That will also change the supply, obviously. I think we should basically force cities to just stop being so anti builder. Like the builders are desperate to build, let them build. I think there's a bunch of things we should do. This is a problem that was created over a decade. We're not going to solve it overnight. But one of the things we must do is fix this Massive problems where American governments at the federal and state levels started subsidizing student debt to levels where everyone graduates with such a large debt they could not buy a house if they wanted to, even if they had a down payment.
- [156:47]
John
Yeah, right.
- [156:48]
Kaz
So like we must do something to solve that problem. Otherwise what's going to happen is people are never going to buy a home and very soon America is going to start looking like Portugal and that's not what we want. Like this is, this is like we know how good homeownership is.
- [157:02]
John
Yeah. What are your thoughts on stock based comp? There was that Keith Raboy was getting in the fight with somebody years ago about stock based comp. It feels like for some of these companies that are more mature, maybe you don't need to lean on it as much. But also there's certain accounting rules that make it maybe more advantageous to use it. Obviously from the startup world, it makes sense to incentivize your employees with stock based comp. But how are you thinking about it? Is there anything that that is changing?
- [157:37]
Kaz
Look, my salary is a dollar, right? I get paid one dollar. My entire comp is based on performance measures.
- [157:44]
Jordy
You hit it, John. We're hitting the size gong for one of the highest salaries we've earned.
- [157:52]
John
Infinitely more than zero dollar salary.
- [157:54]
Jordy
That's right.
- [157:56]
Kaz
Yeah. So I'm not, I'm ideological on this issue, which I think for a very long time corporate executives have gotten rich driving their companies down in valuation and essentially failing their way to becoming millionaires.
- [158:18]
Paul
Right.
- [158:18]
Kaz
This is like a very weird world where we've created where you are incentivized to suck at your job and do nothing lest you get noticed. Because if you don't get noticed, you're not going to get fired. If you don't get fired, your rsus vest and you become rich. This is the story of so many great companies. This is terrible. This is just terrible for capitalism because as the American people recognize, this is a scam. A world in which corporate execs get rich, shareholders lose money. That's terrible. I think corporate executives basically should only get paid in options. Now there's actually difficult to only get paid in options. I tried, sure, sure. But there's a way. We've essentially open door reconstructed options as RSUs. So the PSUs, if the stock goes below what it was the day I joined, I get paid actually zero.
- [159:13]
John
Wow.
- [159:14]
Kaz
Like actually zero nothing. And then there's like cliffs.
- [159:17]
John
Take away your dollar or you get to keep it with a dollar one.
- [159:22]
Kaz
Well, actually, you know, what the funny.
- [159:23]
Jordy
Thing is, you should be able to claw back the dollars.
- [159:26]
John
Claw back the dollars?
- [159:27]
Kaz
Pay for benefits.
- [159:28]
John
Oh, sure.
- [159:29]
Kaz
I have to pay the company for.
- [159:30]
John
A tax credit, actually.
- [159:34]
Kaz
So I pay Opendoor to work at Opendoor.
- [159:35]
John
Sure, sure, sure.
- [159:37]
Kaz
Which I think is perfectly fine, by the way.
- [159:39]
John
Wait, wait. So this is sort of. Do you feel like you're in the lineage of Elon Musk's newest pay package? Like, heavily comp. Aligned to market cap? Is that where this is all going?
- [159:53]
Kaz
I mean, I'm missing a couple of zeros.
- [159:55]
John
Okay. Of course. But, yeah, I can't find a problem with that package. I love it. I just think it's so aligned.
- [160:05]
Kaz
I think it's a very real thing. I think very few traditional executives would take it. Like, very few traditional executives would take it. But I think what shareholders should want is none of those executives to be in charge of publicly traded companies. This is a very real thing. I think in the private world, a very good indicator that a startup's going to fail is if the founder pays himself a very large salary. I do some angel investing that my wife insists we list under charitable giving on our families. Yeah, but in my experience, if the founders pay themselves a very large salary, the company is going to go to zero relatively quickly. Yeah, but somehow corporate executives get paid, like, in cash, like 5, $10 million, and RSUs another 5, $10 million.
- [161:01]
John
To.
- [161:03]
Kaz
Basically be as inoffensive as possible and listen to the consultants. This is what happens.
- [161:09]
Jordy
You have some listening to the experts again.
- [161:12]
John
Trust me.
- [161:13]
Jordy
Yeah.
- [161:13]
Kaz
This is like a real man. You pay a comp consultant to come give you advice on compensation. Then you go to a management consultant to give you advice on management. Then you go to a financial consultant to give you advice on finances. Then you go to a PR consultant, and before you know it, this is what happened. I came to Opendoor and I went through every bill the company had paid for the previous six months. Like, actually every bill, line by line. I'm like, what was this for? What was the outcome? And the company had paid them millions of dollars. It was actually, I think, number three on the expense line item. We paid more for consultants than we paid for Snowflake, which is like tons of.
- [161:53]
John
Yeah. Wow.
- [161:56]
Kaz
And to what end? The company was basically going to zero. But the fancy types who got MBAs from fancy schools do that to avoid being noticed and getting fired. Right. That's the goal. And I think corporate executives should get paid only when they make shareholders money.
- [162:21]
John
Yep. I like that a lot. This was fantastic. The Chat is absolutely loving this. I wish we could go longer. We'll have to have you back. You're welcome anytime there's news or anything. Jordan, do you have one last question before we.
- [162:36]
Jordy
I have a lot more questions.
- [162:37]
John
I have a lot more questions.
- [162:38]
Jordy
Let's make it a regular.
- [162:39]
John
We just have someone in the Restream waiting room, but thank you so much for taking the time. I'd love to go deeper also. I mean, I just feel like we can talk about, like anything really. Like there's so much here. We barely. When I asked about strategy, we, you know, spent five minutes on one particular product and we could do that probably every single week since you're shipping.
- [162:56]
Jordy
So, yeah, I would say as there's more news on. On mortgage. You know, mortgages, both the assumable side the term. Yeah, you should come back on.
- [163:03]
John
We'd love to have you back.
- [163:05]
Kaz
30 seconds to do something that I promise will be only 30 seconds.
- [163:07]
John
Please, please.
- [163:08]
Kaz
If you are watching this show and you're a founder type, the odds are you're an odd duck. You're swimming in the wrong sea. Find me on X. My DMs are open. We're hiring in offices. This is not a remote company. We're in offices with our colleagues working incredibly hard for a future that matters. So find me. And we'd love to have more folks join the mission.
- [163:34]
John
Yeah, we love that everyone's clapping here.
- [163:37]
Jordy
I love your perspective and how you're approaching this and I can't wait to see all the progress you and the team make.
- [163:44]
John
Yeah, highly recommend it. Thanks, guys. It's a generational opportunity.
- [163:47]
Jordy
Cheers.
- [163:47]
Kaz
Cheers.
- [163:48]
John
Bye. Let me tell you about customer relationship magic. Adeo is the AI native CRM that builds scales and grows your company to the next level. Our next guest is already in the Restream waiting room. We got Paul Needham from the Infatuation. Welcome to the show. Look at that background. That is.
- [164:04]
Jordy
Look at this setup.
- [164:05]
John
I love it.
- [164:06]
Paul
Thank you, guys.
- [164:07]
John
Fun brand exploration.
- [164:08]
Jordy
Very cool. Great to have you on the show, Paul. Chris, your co founder is a good buddy and yeah, it's great to have you here.
- [164:23]
Kaz
Thank you.
- [164:23]
Paul
Yeah. Chris and Andrew started infatuation now 16 years ago. So we just celebrated our Sweet 16 Veselka in New York.
- [164:32]
John
Yeah, exactly.
- [164:33]
Paul
Longevity is a good thing and we're really proud to be carrying the tradition on and to continue to shine a light on all the great restaurants all over the country. And that's what we're out doing this week is talking about our Best New restaurants campaign.
- [164:47]
Jordy
Let's talk about it. Break it down.
- [164:49]
Paul
All right, so our team all over the country and in London, we went to over 5,000 restaurants this year. Spots, bagel places, pizza places, all the way. Especially out in la, you guys have a lot of fine dining, a lot of omakase. And we checked it all out and we crowned some of our favorites. So out in la, places like Baby Bistro, River Mustards, Bagels, Beethoven Market and a bunch more. And then all over the country, looking not just at the best restaurants. I really liked Juul's in San Francisco this year for pizza. Smithereens is our number one in New York. But also looking at the trends and what are we seeing out there? What are the threads? So obviously markets continue to.
- [165:39]
Jordy
How many people do you need to properly evaluate 5,000 restaurants? Like, what does a team look like to pull that off? I'm assuming it's some internal. Some external.
- [165:49]
Paul
Some of it's internal, some of it's freelance. The fun of it is bringing your friends because you know, you can't go to a restaurant as one person and try everything. And so we do a. And a lot of restaurant critics, the Times and other places do it also. But we bring some folks around, we dine anonymously, we book under fake names, we pay for all the meals ourselves called as we see it. And yeah, it's a big effort from a lot of people. It's also, we go back and so we want to give places that chance, especially when we're talking about a best new restaurant category, want to give people the chance to really show their best. And yeah, we have a team around 50 people who work on this for us. And then yes, some freelancers and other folks as well.
- [166:37]
Jordy
That makes sense. What is going on? Give us an update on the restaurant industry, broadly, that was, you know, obviously restaurants tend to reflect, end up reflecting the state of the culture and the economy. And there was some reporting last week that we touched on briefly that like McDonald's is seeing a drop in, in purchasing from some lower income folks. That was surprising. I think people were pretty bearish about that. Maybe there's a different story there. But talk about kind of the health of restaurants broadly. I'm assuming it's like a pretty wide disparity.
- [167:21]
Paul
Yeah. And it's a complicated situation because you've obviously got Chipotle and others who've been out talking recently. But then the Wall Street Journal, I thought, had a good piece a week or so ago about how in New York the kind of rich are keeping the party Going, I think definitely when you talk to restaurateurs. Look, folks in LA have had a tough year, no question. I'm sure you guys hear that a lot. Hopefully starting to come back.
- [167:45]
Jordy
And is that driven by the. Is that downstream from the film industry not doing well? So just people in the creative world, film, entertainment, are just eating out less.
- [167:58]
Paul
You need expense accounts, you know, especially if you got a lease in Beverly Hills or you got a lease in West Hollywood. Like, you need people to be able to put a corporate card down and spend a little more freely. But look, I think it's interesting also you look at some of those trends and then you also look at things like $10 pastries and really elaborate matcha drinks and these small indulgences that people are definitely still treating themselves to. I mean, the cinnamon roll situation in New York had a outrageous year.
- [168:35]
Jordy
Wait, is that. Is that the name of the restaurant?
- [168:37]
Paul
No, it's just. You got one.
- [168:39]
Jordy
I thought, I thought a restaurant called the Cinnamon Roll Situation. Like, we got a situation down here.
- [168:45]
Paul
Situation that we're monitoring.
- [168:47]
John
We're mom.
- [168:49]
Paul
But we. I was on Squawk Box this morning and the Today show earlier, and we brought pastries to all of them and it was like one cinnamon roll just got crazier than the next. So definitely, like, I think the restaurant industry situation is a big, complex narrative across qsr, across fine dying, et cetera. I think the customer indulging themselves, treating themselves as another situation. And then look, there's no question that people drinking less is a huge factor for restaurateurs and the folks who were all friends with. In the industry. Definitely. If you're not selling wine and you're not selling cocktails, that's a mighty headwind.
- [169:33]
Jordy
That's your profit margin.
- [169:35]
Paul
Yeah, but look, you see the $20 mocktail on a lot of menus now. And definitely folks are trying to make the non elk stuff happen and trying to make some money off non alk. But from what you're seeing.
- [169:48]
Jordy
Yeah. So from what you're hearing or seeing, like, is it. Is it. Some people have gone from drinking to no drinking and then a lot of other. Other people have gone from a like heavy drinking to just moderate drinking. And so they're seeing like both. Both types of guests. Just kind of like, I resenting no.
- [170:08]
John
Drinking to heavy drinking drinking. It's been great.
- [170:11]
Paul
You guys are keeping the. You guys are keeping the industry afloat. Look, I think there's a lot of people, obviously wellness is a huge factor in so much stuff. We also see that in the hour people. The hour people are eating. So like all of a sudden 5:30 is a really hot time to go to a restaurant where, you know, a few years ago you were like embarrassed to ask someone to go to dinner at 5:30. I think there's a lot of people.
- [170:36]
Jordy
It's like so clearly the problem. I just. I like to go to dinner at 5:30 sometimes 5. I like to finish. I don't like to be digesting food when I'm going to bed.
- [170:46]
John
Yeah, I like that.
- [170:47]
Jordy
And I really. I have like one drink a month.
- [170:50]
John
Our audience is a lot of tech people. Do you have a recommendation for a restaurant that might be particularly good for planning a coup? If you're planning a boardroom coup or maybe celebrating a successful boardroom coup, do you have a recommendation for a restaurant?
- [171:06]
Paul
And this needs to be in like the South Bay.
- [171:08]
John
I mean, ideally San Francisco. But boardroom coups are happening all over. Maybe in New York as well.
- [171:13]
Paul
San Francisco look a lot of great places. I mentioned Jules pizza earlier. That's where I would plot my coup.
- [171:20]
John
Is it quiet right now? You're not going to be over.
- [171:23]
Paul
There's like some corners you could tuck into a corner. We could talk into a corner. I like the mayor was there recently and was like blowing them up.
- [171:31]
John
Okay.
- [171:33]
Paul
They're where the action is.
- [171:34]
John
Yeah. I feel like the proper environment to plan a coup is sort of like leather booths.
- [171:41]
Jordy
Ideally some mahogany.
- [171:43]
John
Some mahogany. Something like very. Where every little booth is nestled off to the side. No one can really see each other too much.
- [171:49]
Jordy
You know.
- [171:50]
Paul
In New York, a New York little interesting development this year that did not get a lot of attention. But 4 Charles opened a private dining room. And so for as hard as it is to get a reservation for. For Charles, the private dining room, if you got like 12 grand for a table of eight, okay. They will have you any night you want.
- [172:09]
John
Tens of billions of dollars at stake. So you know what's going to happen on a steak. That's no problem. Yeah. I always like Pacific Dining Car in la. That feels like a good place to plan a coup. I like a mafia movie vibe.
- [172:23]
Jordy
How. How is. Is. Is Instagram still having the like so. So I don't, I don't identify as a foodie at all. I. I enjoy food. I don't. I don't spend a ton of time like think seeking it out. But it. There's been a lot of conversation over the last probably decade now around how Instagram is just driving every city on earth to look the same so, like, no matter where you go in the world now, you can get, like, a matcha and you can get, like, New York style pizza from somebody who was maybe in living in New York, like, two years ago. Whatever. Is there anything, like, is there any parts of the US that are kind of, like, fighting back against that and, like, really trying to create a more localized food culture? And is that even possible anymore?
- [173:15]
Paul
Yeah, I mean, I think definitely everything you're saying, you see, like, the matcha thing get crazier and crazier month by month. I saw Lauren Sherman said over the weekend, like, matcha is like kale. Like, people are just doing things to matcha that shouldn't be done. I think you've got, you know, pizzas everywhere. No question. And really good pizzas everywhere. And to your point, like, Mexico City is everywhere now. Where, like, what is every New York City? Like, every New York big opening this year is, like, Mexico City inspired in some way or another. Interesting. I would say, like, Nashville. I point to Texas. Like, there's definitely pockets where you're seeing people really do something that's very unique. I think Miami has been an incredible food scene for us in the last few years. And definitely Miami, even if it's not cuisine per se, like, the personality of a Miami restaurant, Sunnies, which is one of our favorite steakhouses down there. Like, that restaurant could only be in Miami. And you definitely, like, feel that you're in Miami when you're there. But look, Beethoven Market, when you're sitting out on that terrace in Mar Vista, like, there's stroller parking, it very much feels like, oh, this is the west side of Los Angeles. And Wild Cherry, which just opened in the West Village of New York, which is the A24 restaurant. Like, it very much feels like, oh, we're in a kind of like, New York canteen connected with a small theater. So there's definitely still places that are kind of creating that sense of unique personality.
- [174:53]
John
This is very cool. Thank you for coming on and giving us the update.
- [174:56]
Jordy
Yeah, guys, I've held out. By the way. I haven't had a matcha in at least a decade. I tried it a long time ago and I haven't gone back. It's not for me.
- [175:05]
John
Yeah, it's not for me.
- [175:07]
Paul
We'll send you. There's some good powder ones you can make at home that are really easy and pretty good.
- [175:12]
John
Fantastic.
- [175:13]
Paul
Thank you, guys, and congrats. Everyone's watching, man. Everyone's watching.
- [175:16]
John
Thank you for coming.
- [175:17]
Jordy
Thanks. So much fun. Thank you for giving us an Update on the state of the market and congrats on the launch.
- [175:24]
John
We'll see you. Have a good one, sir. Let me tell you about public.com investing for those that take it seriously. They got multi asset investing, industry leading yields. They're trusted by millions. We are completely switching gears now. Now from food and beverage to Jordan Nanos at semianalysis. Taking us through the latest from Clustermax. This is Clustermax 2.0, correct?
- [175:45]
Jordan
That's right, yeah.
- [175:47]
John
What are the biggest findings? How do you introduce Clustermax in the, you know, 140 characters version? And I'd love to just get into the actual findings.
- [175:56]
Jordan
Yeah. Well it's great to be here with two of my technology brothers.
- [176:00]
John
Thanks for.
- [176:01]
Jordan
I can definitely, I can definitely take you through Cluster Max. Basically the way we see it, some of the most critical transactions in AI are happening when people are renting GPUs from a provider. So this is companies like Core Weave, Nabia, Lambda, Fluidstack, Crusoe, they've been coming to market and taking share from aws, Azure, gcp, Oracle and I think a lot of people, basically they think that all GPUs are deployed the same and that's definitely not the case. So we go through in this article a lot of details about how our hands on experience and then feedback from customers makes it clear that it really depends which provider you go with when you're making a critical decision like where to buy your GPUs.
- [176:47]
John
Yeah. How do you actually feel like you're getting accurate data? Because if a semi analysis email shows up and I'm running a Neo cloud, I'm like, yeah, let's put them in the best data center we have. I imagine so. It feels like blind taste testing. We were just talking to a restaurant reviewer. I feel like you're a data center reviewer. These segments are actually pretty similar.
- [177:09]
Jordy
Fake companies even get them into YC and just sign up.
- [177:12]
John
Yeah, something's going on. But yeah, talk about the pitfalls of the processor, like how you actually tease out what's actually going on.
- [177:18]
Jordan
Yeah, I don't know if we're really doing a secret shopper thing quite the same. We definitely get CTO on the phone in some cases to walk us through the greatest. But in my research I talked to 140 different customers of these neoclasses to get their perspective on exactly what their experience was with reliability and support at scale. And I think it was quite revealing because like I said, yeah, sometimes you get a really good experience in one data center that's quite different from Somebody who's running stuff in Iceland or something like that.
- [177:47]
John
So what changed this? With this version, I know that the actual graphic has exploded. There's more. There's going to be more.
- [177:56]
Jordy
Do we need more Neo clouds by the way? Or are there enough? Do we have enough?
- [178:00]
John
But yeah, what else did you find?
- [178:04]
Jordan
Hey, we need more, man. We need more of it all.
- [178:06]
John
Let's hear for more. Thank you for the tireless work. Work indexing the entire market. Yes, but what were the findings?
- [178:19]
Jordan
Yeah, look, I think we probably don't need a lot more Silicon Valley backed venture startups that are all renting GPUs from another provider and reselling them with a bit of software on top of them. But we're seeing a lot of the like sovereign AI projects just get started and it looks a lot like a telecom build out where, you know, different regions or countries have their own regulations or you know, their own sovereign wealth funds that are funding the build out of a bunch of GPUs. Yeah, and I think that's just getting, getting started. So you're right. The biggest difference is we covered 84 neoclouds this time as opposed to 26 last time. Our total market view, there's now 213 learned about 4 of them since we published last week.
- [179:04]
Jordy
They're like, hey, I mean if you're a Neoclad and you're not on the list, it's probably fair for the investors to send you that and be like, hey, what happened?
- [179:14]
Jordan
I mean we're doing our best to get coverage but they, they pop up all the time with different people who are in different phases of actually launching.
- [179:21]
John
Yeah, but yeah, what, what, what are the biggest movers? What were the biggest surprises? What were the biggest changes? Because it seems like Cor Weave has done well last time this time, but there's probably some other folks who have taken, taken your feedback and actually made changes.
- [179:39]
Jordan
Yeah, I think probably the two big ones are that Fluid Stack debuted at Gold like we did not rate them last time and they're, they're kind of coming out of nowhere with a really interesting offering for taking other, let's say bronze or worse tier GPUs and making them usable for Frontier Labs. Like they have some really, really big customers. I think Google improved a lot. If the market had really shifted to using strictly Blackwell GPUs and wasn't still stuck on using some of their old hopper GPUs with their older networking, I would see would have seen Google possibly push to Gold. I think they will in the future they've been really improving. We've got a lot more work to do with aws. I think they're really focused on EFA and the rest of the experience is coming along. But their networking is just, look, it represents like less than 1% of the cluster TCO by our calculations. And the users tell us it's like more than half of their debugging time is trying to figure out AWS's custom networking on some of these clusters. So we'll see who takes the feedback and who doesn't going forward. We try to be like, include a lot of stuff from those customers in there as opposed to just, you know, a micro benchmark that we run on the network ourselves.
- [180:53]
John
Yeah, that's super interesting.
- [180:55]
Jordy
Jordy, wanted to get your read on depreciation schedules. I feel like this is a big debate and something that's going to be critical to the health of a lot of these players. And as chips get better, you would hope that, that the depreciation schedules would expand somewhat. But we're seeing it all all over the board in terms of how different companies from hyperscalers to some of these new entrants are actually planning around depreciation. And I would love to kind of hear how you think about it broadly.
- [181:32]
Jordan
Okay. I think broadly speaking, depreciation is a financial metric that's hard for us to measure and varies between the different providers quite substantially. Where people take different approaches from three to six or longer years in terms of the lifespan of the actual technology. Like there's. There's two ways to think about this. One is how long does the thing keep running? Well before it starts to have a lot of wear out failures like the GPU and the system. And then the other one is how long is it useful on a performance per dollar basis. And I think that second one really depends on how good future GPUs are. So right now we are seeing providers who are limited on power, they literally have no more floor space in their data center, rip out perfectly good GPUs that are making them plenty of money to replace them with the latest and greatest because they can make even more money.
- [182:28]
John
Wow.
- [182:29]
Jordan
And so if that power constraint goes away, or the newest, latest and greatest GPUs don't give you that massive performance increase, then I think people will sweat the assets for longer functionally in the data center. But I think a lot of people on the financial side are playing a guessing game or they're designing it based on how they want to design the financials of their business and not necessarily taking into account exactly how the GPUs perform or what's coming down the pipe.
- [183:02]
Jordy
Is that bad?
- [183:05]
Jordan
I don't know if it's bad. I think it's just pragmatic. If you look at a hyperscaler and you see that they have all of the these build outs of new data centers coming online and they want to look, they want to address the needs of that customer base and things just aren't coming fast enough. Ripping out old GPUs and putting in new ones seems like it's a good play. It seems like it's good for the people who want the best performance. It seems like them, you know, they're going to get more revenue per megawatt with the latest and greatest. I don't think it's necessarily good or bad for anybody.
- [183:36]
Jordy
What about, what about. So Satya has talked a lot about wanting a, a diverse GPU fleet, fungibility of the fleet, not wanting to just do exactly what like a key customer like OpenAI wants. If OpenAI says, hey, build this data center for this specific training run, he's not immediately saying like yeah, of course I'll do it. No, no questions asked. He's sort of like, you know, being pragmatic about it. How much do you worry with some of these other NEO clouds about being like too indexed to a specific type of workload or tech stack, given how fast the space is evolving and ending up in a situation where they just have a bunch of dead weight?
- [184:21]
Jordan
Yeah, that's a really good question and I think you're segueing into an article that we got coming out later this week and a fun interview that some of the guys did. So let me try and not talk about that while still teasing it.
- [184:36]
Jordy
Basically.
- [184:38]
Jordan
Yeah, I think the concept of fungibility is really important to the hyperscalers and it seems like in some ways they are exploiting the NEO clouds for better or worse, who have four sites and they're going to take a whole site and have it all one chip and that's going to be a bet for three to five years and we'll see what happens after that. So in some ways investors kind of view this as returning the AI market beta versus getting some alpha on an individual chip or on an individual workload. And I think it's. Look, there's a lot of upside in this and to your point, that focus on fungibility or pragmatism may have led to Microsoft losing like $320 billion of RPO to Oracle announced a Couple of months ago at reasonable margins.
- [185:36]
John
So.
- [185:39]
Jordan
I think time will tell on that decision at semianalysis, generally speaking, you're going to come to us and get a pretty bullish take. We were way ahead of the market on that Oracle print last quarter.
- [185:50]
Jordy
Let's give it up for bullish takes.
- [185:54]
John
That makes sense. How does with fleet fungibility, when you see, you know, on cluster max, there is Azure and then there's also a bunch of Neo clouds that have partnerships with Microsoft, like Nabias. How does that actually work? If you're a lab and you go to Azure and you say, I want GPUs from Azure, and then Satya says, oh, I have here part of dealing with like, you know, the intrinsic details of this.
- [186:20]
Jordy
Part of, part of me though is like, who do you think is going to be able to make the better call Microsoft and Satya or Oracle when it comes to capitalizing on all that demand from OpenAI, right. Who has more information, who has more experience working with OpenAI, who has handling these training runs. It's like again, time will tell, right? It could have been like the most brilliant move ever from Oracle, but at the same time, I have to imagine Oracle is like, basically we had a graph last week on kind of understanding where the AI players sit on this idea of how much they need AGI versus don't need AGI and how much they believe in AGI and how much they don't. And we were putting Larry way up in the left corner of needs AGI but doesn't necessarily believe it or has.
- [187:25]
John
Issued public statements about it.
- [187:26]
Jordy
Hasn't issued public statements at least, but I just feel like very much like a Hail Mary from Oracle. And if the depreciation schedules are quite a bit different, then what they're planning, they will. OpenAI will have gotten the much better end of that deal. And I think Satya could end up looking pretty smart for not going after it, but who knows?
- [187:52]
Jordan
Yeah, I mean, I tend to agree. I don't think Satya's looked dumb very many times in his career. I think he gives very thoughtful answers when it comes to this stuff. I do think in some respect it's a matter of timing. Like if you look at what Microsoft's builder looks like right now, they are accelerating and that's on the back of OpenAI. But also some of their SaaS products that are using this technology, they have access to all of OpenAI's IP through 2032. So they're certainly exposed to any upside on that side. And yeah, it's a matter of when you want to take your free cash flow down to zero to do a build out. And Oracle seems to be the first one to have moved while Microsoft flinched a little bit.
- [188:42]
Jordy
It's a game of chicken. It's a game of chicken. Hyperscaler chicken. What did you think about Feel free to give your personal views. You don't have to share the official point of view of semianalysis unless you want to. But backstop Gate last week I think you guys had probably been privy to conversations or heard, you know, it's not the, not the first time that that the idea has been floated around. I mean we're seeing sovereign AI in other countries. I'm assuming we'll see some version of it here. But what's your. What do you rate the likelihood that we could see a scenario where the government would effectively be guaranteeing loans for AI, you know, data center build outs?
- [189:34]
Jordan
Yeah, I don't know how much I have an opinion on that. When I read into it, it seemed like they weren't actually asking for a backstop or a bailout.
- [189:47]
Jordy
The yeah, and I agree, I agree with you there. I'm not our understanding of it was it wasn't asking for a backstop on OpenAI or any type of bailout. It was just like the language implied that they would be open to a world where data centers would be treated like some other categories around national security, like manufacturing, where the government would basically want to encourage the development of data centers by saying like we're going to guarantee these loans which would just encourage lenders to have more confidence to lend against assets that might depreciate faster than people think and present some risk.
- [190:30]
Jordan
Yeah, and I 100% agree in terms of guarantees. We see this elsewhere in the world quite substantially where there's governments in the Middle East, Norway, Canada, to a small extent Indonesia, Korea, Japan, India. They're all like getting in on building a NEO cloud. And the US government has not gone out and built a NEO cloud, but they certainly build supercomputers for defense intelligence research and they certainly have a vibrant community of companies. So I think there's more that the government can do to accelerate the time in which you can build a data center behind the meter, which a lot of places are trying to do right now without interconnect semi analysis. We've got an energy model coming soon that's sort of a companion to our data center model. Got guys on the team working on that who were grid operators in their previous job and they've got a lot to say about the lead times to get turbines right now or how much red tape there is to get nuclear, wind, solar online, how you need guarantees from the utility, even if you're behind the meter, as some sort of, you know, future interconnect agreement or some sort of stabilizing power load or. I mean there's, there's just so many creative things that could be done with the grid in the US that I think are kind of fundamental before you can have discussions about financing a lot of stuff. Because look, when we get in conversations with investors, I think there's a whole bunch of capital to be unlocked, locked in the private equity space that is just getting started. And it feels like early innings because VCs are the first ones to move and they have in the neocloud space. But we haven't seen a lot of institutional players decide to make a bet on this the way they have with energy, with housing, with commodities. And if GPUs are going to be fundamental and they're going to be a commodity and people want to bring like an H100 index to the market, you're going to see a lot of like institutional capital try and pour its way in here. And like functionally, how does that work? I think it actually comes in terms of like accelerating the existing data center projects as opposed to having the US just start to build something new.
- [192:55]
John
Oh sure.
- [192:55]
Jordan
So to that extent, like totally agree with everything. I think the market kind of shuddered at those comments because it seemed like they were asking OpenAI's asking, asking US government to pick a winner when that is clearly not the case. There are winners and losers being shaken out in chat research coding. But we're in the early innings of video and image generation, of material science, of drug discovery, of weather prediction. All of these models that are showing incredible early results from transformer based architectures running on the same GPUs as the chat models. That could be the lion's share of compute in the future if suddenly everybody wants real time generated video on their feed or we're making small weather predictions for everybody who's getting ready to go skiing or something.
- [193:46]
John
Yeah, fascinating.
- [193:49]
Jordy
I would like to see more AI on the slopes.
- [193:53]
John
On the slopes.
- [193:54]
Jordy
I like the sound.
- [193:55]
Isaiah
I like the sound.
- [193:55]
John
Bring it to veil.
- [193:56]
Jordy
Semi analysis can do a ski trip, invite all the different players in bringing AI to the mountains.
- [194:04]
John
That's fascinating.
- [194:05]
Jordy
Please invite us.
- [194:06]
John
Yeah, very excited for the energy. You can call it powder Max, whoever's working on that, as soon as you launch EnergyMax, we want to Talk to you guys. We always enjoy talking to everyone at semianalysis. Such thorough research, such deep insights.
- [194:23]
Jordy
We really appreciate such. Chad.
- [194:25]
John
Yes.
- [194:25]
Jordy
Chads. Great to see you. Jordan. Thanks for coming on to see you guys too.
- [194:29]
John
Yeah.
- [194:30]
Jordan
You're welcome to Whistler anytime.
- [194:31]
Jordy
Amazing.
- [194:32]
John
Amazing. 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 Adquick combines technology, out of home expertise and data to enable efficient, seamless ad buying across the globe. Our next guest is Isaiah Taylor from Velar Atomics. Congratulations, Isaiah, how are you doing?
- [194:51]
Jordy
Look at this.
- [194:52]
John
This backdrop.
- [194:53]
Jordy
You look fantastic suited up.
- [194:55]
John
Congratulations. Second time on the show. Give us the story. What happened today.
- [195:01]
Isaiah
Yeah, first of all, the eagle screech was fantastic timing there because we have our beautiful nuclear test site out in the back here in the middle of the Utah desert. Fantastic job. Producers. Yeah, we.
- [195:11]
Jordy
That was me. That was me.
- [195:12]
John
That's Jordy Soundboard.
- [195:13]
Jordy
Wow.
- [195:14]
Isaiah
Jordy. I'm sorry. I stole the soundboard.
- [195:16]
Jordy
Glory. No, they generate the sounds and I time them. So I see. Figured that you.
- [195:23]
Isaiah
So it's even more impressive because the producers were cooking that up in the five seconds from when they saw my background. Yeah. Then you could hit play.
- [195:29]
Jordy
We got so many sounds we got here. I got. I got sounds for days.
- [195:35]
Isaiah
That's exactly what it sounds like when one of our nuclear reactors starts up. No, it's. We're having a great day. It's an amazing day for Valor Atomics. We announced a $130 million Series A earlier today. Let's go.
- [195:50]
Jordy
Nice.
- [195:52]
John
Congratulations.
- [195:52]
Isaiah
That is a proper gong.
- [195:53]
John
That's your Series A. Wait, you. I thought Series A. I feel like you had raised a Series A before. Wow. I didn't realize.
- [196:01]
Jordy
That's right.
- [196:01]
Isaiah
We announced a $19 million seed round earlier this year.
- [196:05]
John
Yeah.
- [196:06]
Isaiah
And actually we built our reactor on a seed round and we didn't turn it on. So now we have enough capital to go turn it on.
- [196:11]
John
Okay.
- [196:12]
Isaiah
And this is something I'm super proud of the team for, by the way, because I think this is like how venture is supposed to work. You hopefully turn something on in the. In the Series A. This is like when you find, you know, product market fit. So I'm super proud of the team. This is our goal. Go split the atom with this capital.
- [196:26]
John
Yeah. I mean, yeah, the whole story here makes so much sense because, like, you started with, like, the really, really big vision, like turning, you know, nuclear power into energy that could be transported actual. Like, you were going to synthesize hydrocarbons and you laid out this big vision, but then that was almost like Act 3. And then Act 1 was like, can we actually build something that doesn't even turn on, but just shows that we can actually build something? Then let's go turn it on, let's start generating energy. Then if we have abundance and tons of energy, then let's figure out what next to do. And I think people were always like a little bit thrown by how far you were thinking into the future. And they were like, well, let's see what this guy can do in six months. And then you delivered on the six month project and now I think people are waking up to what you're building. Is that how you've experienced it?
- [197:15]
Isaiah
I think that's, that's an accurate perception and I've certainly learned a little bit about how to pitch the story. We, I, I talk a little bit more about the short term now, but I think about the long term every single day.
- [197:25]
John
Totally.
- [197:25]
Isaiah
I mean this, I think of this as, as my life's work. Energy is, is a very interesting thing where there's obviously an enormous amount of demand already.
- [197:34]
Jordy
Right.
- [197:35]
Isaiah
There's trillions of dollars worth of energy demand. But it's one of those things where if you make a lot of it and you make it very cheap, it creates its own demand.
- [197:42]
John
Sure.
- [197:42]
Isaiah
And I don't think there's really a limit to that. The more I play this out of my head, if you can make energy cheaper, you open up these new apertures of places where you can sell it and things that you could do with it. And so that really is like the fundamental motivation and the thing that we're trying to do here is that I think energy should be 10 times che than it is right now. And you're right, that's like a really long term vision. But you have to be able to be super concrete and build stuff right now. Six months, 12 months at a time.
- [198:11]
John
Yeah. So I mean the original vision, still very cool. I don't think. It doesn't sound like you're losing sight of it. I don't think you should. But the, I mean we were just talking to semianalysis about the build out for AI data centers and it feels like energy is the bottleneck. The question of we will probably be able to scale up the GPU production, but getting enough energy at the right price is probably going to be the next thing that we're talking about all next year, the year after, and there's going to be this Question of like, where's the energy coming from? It's going to be a political issue. If it's oil and gas, maybe there should be oil and gas in the short term, but in the long term I think most people agree nuclear and solar. And so how are you thinking about the broader story here with America's re nuclearization? There's a bunch of companies that are working on this. What are the timelines, what are the key things that need to happen? How's that looking?
- [199:07]
Isaiah
Yeah, I think AI needs power in the next couple of years. That's pretty obvious. And you know, I was at an event with Tyler Cowan and Sam Altman a couple weeks ago and Tyler asks him, you know, what's the only thing holding you back? He says, electrons. And Tyler says, anything else? Chips. He's like electrons. Right. So that's pretty clear. And then the follow up question was what's the nearest term way to solve that in? Sam says natural gas. And I would generally agree with that. And I think that's probably true for the next 18 months. We do want to make power for data centers in 2028 though. And the interesting thing about nuclear is that I believe it scales very differently to natural gas. Natural gas is very site specific. You need to go find good gas sources. You're working on routing. There's all these complicated things. Nuclear you can kind of do wherever it makes sense and you can put a lot of it in one place. The reason for this is uranium is just easy to move around. Right. Kind of a year's worth of it fits on a truck. Unlike a natural gas pipeline where you're working on the actual in ground logistics of moving gas around. So I think once we've gotten that cracked, like the first unit that's making power, we could just make more of them. And you end up seeing these big sites that people are sort of dreaming about today where you have a 1, 2, 3 gigawatt, you know, AI data center. This is very easily deliverable with the nuclear reactor that you just mass produce. Right. Because you don't have to worry about these gas logistics.
- [200:26]
John
Yeah, but how do you decide? Like if we're doing one gigawatt, that means we, I mean the last thing we talked about was like maybe targeting 10 megawatts. So you need 100 of these things. Like why 110 megawatts as opposed to 1001 megawatts or 10, 100 megawatts.
- [200:44]
Paul
Right.
- [200:44]
John
Like there's some trade off. How'd you land there?
- [200:46]
Isaiah
Yeah, so our unit will be a 25 megawatt electric unit, approximately. Yeah. So that's about 40 reactors per gigawatt. And really the reason here is I just think that in the west, in the western world, we're really good at making bus size objects. And if you try to make an object bigger than a bus, you have a hard time. Yeah, we used to be good at this.
- [201:08]
Paul
Right.
- [201:08]
Isaiah
We used to be really good at large scale like Hoover damage, stop big nuclear reactors. Yeah. Space shuttle, this kind of stuff. But if you notice how Elon revolutionized rockets, he actually downsized pretty significantly.
- [201:20]
John
Right.
- [201:20]
Isaiah
The Falcon 9 is a smaller rocket than any of the heavy launch vehicles that took us to the moon. And then he kind of slowly worked his way back up to starship. And even starship is like taking longer than you would have expected. So there's just something about the tool sets that we have, the way that we do engineering that favors making objects smaller and making lots of them.
- [201:40]
John
Yeah.
- [201:40]
Isaiah
So if I'm.
- [201:41]
John
There's a big part of it, if I kind of have a put it on a truck. I talked to some early SpaceX people about that and they were like, you can put the engine on a truck. Once you go any bigger, it's like get out the crane every single time you want to do anything.
- [201:51]
Isaiah
Exactly.
- [201:51]
John
And so if you can do just little less crane work, it just compounds and compounds and compounds.
- [201:57]
Jordy
What are the key risks to the business over the next like 24 months that you talk about internally with the team, things that you're trying to prove out? I think somebody, you know, haters could have said, you know, a year or so ago, you can't build a nuclear reactor with $20 million. You, you de risk, you'll need 153. You de risk, you de risk From a capital, from a capital standpoint now you're much less capital constrained. And you certainly doesn't feel like there's a lot of risk on the demand side, which is like, if you can make cheap energy, will people want this? I think we know the answer there. But what are you kind of like focused on internally?
- [202:40]
Isaiah
Yeah, that's exactly right. And actually I think people are massively over focusing on every risk except just the technical execution. You mentioned, like there's a lot of demand, Right. I think you'll see a lot of companies put out MOUs, they'll sign deals, right. You'll see this company send a deal with Google, this one sent a deal with Amazon, this sort of thing. One of my actually biggest Twitter haters, I'm going to have to shout out, unfortunately, because he wrote such a good tweet and somebody sent it to me.
- [203:05]
John
That I was like, I saw this.
- [203:06]
Isaiah
It's like, damn it, I'm going to have to shut that one out. One of my big Twitter haters, Nick Turan, shout out to you, Nick. Said, I'm issuing a universal MOU to all nuclear companies.
- [203:18]
Kaz
Me, Nick.
- [203:19]
Isaiah
I'm saying I will buy $10 billion of energy from any nuclear company that can actually build a nuclear reactor on time and on budget at a good price. So I think this is actually totally right. Like, there is so much demand, and the thing that's missing is capability. The thing that's missing is actually turning reactors on. So the risk is entirely, we have to go build this reactor and turn it on. And this is, I think, essentially what sets Valor apart from basically everybody else in nuclear today, is that when we started the company, our. Our core conviction was that nuclear has to go back through R and D again. We sort of assumed as an industry that because we built many nuclear reactors in the past, that we still know how to. And I think that's fundamentally wrong. And this is sort of our belief from the beginning that we have to go back through R and D. R and D means starting small, starting low power, building it very quickly, testing it fast, and that will lead us to a commercial unit. But there is just real tech risk along that past. Right. You know, pumps don't work like you thought they would. Seals don't work like, you know, they don't hold as much pressure as you thought.
- [204:19]
John
And you iterate through it is the tech risk. I mean, it sounds like the tech risk. The tech risk generally is a little bit overrated because this technology fundamentally, like it did work 80 years ago, it did work, you know, in the 60s. I mean, there were some problems in certain.
- [204:35]
Jordy
Yeah. But even going to the moon is somewhat of a lost art.
- [204:38]
John
Yeah, Yeah, I get it.
- [204:40]
Soren
Yeah.
- [204:40]
Isaiah
I would put this into the bucket. It's not science risk, it's tech risk.
- [204:44]
Jordan
And.
- [204:44]
Isaiah
Right. Tech is really about engineering and capital. It's about, what are your timelines. Yeah. Economics, engineering, capital. What are your timelines? How much money do you have and resources to do it in the right timelines? And that's why our focus has been small steps executed extremely quickly. I started this company about two years ago. It's been about two years and two months since we started the company. We built our first nuclear reactor within 14 months of founding the company, and we're going to hopefully turn it on before the three year mark. And if you can move at that pace, I think you can sort of iterate your way. You get more shots on goal.
- [205:16]
Paul
Right.
- [205:17]
Isaiah
Moving quickly means you get lots of shots on goal. So if the seal doesn't work right. Exactly. The first time you do testing, that's fine because you have some time to go and test it and iterate that seal and that valve.
- [205:26]
John
Yeah.
- [205:27]
Jordy
Are you moving the family out to Utah yet? Are we going to see a Valor kind of like plan development with a bunch of.
- [205:34]
John
Oh, that feels good.
- [205:35]
Jordy
I'd like to see a bunch of mid century homes.
- [205:39]
Isaiah
I will say we do have more RVs than I expected at the site right now and a lot more on on order as well. Yeah. The housing out here in the desert is going to be an interesting challenge to solve. We're not just building the reactor building here, we also have a trace of fuel plant that's going up as well. So we're actually going to be making our own trace of fuel. So yeah, we're going to have a really fun operation out here. And it's only the beginning.
- [206:03]
John
Very cool.
- [206:04]
Jordy
Congratulations on the progress in the round.
- [206:06]
John
Fantastic.
- [206:07]
Jordy
I'm super excited for you and the whole team.
- [206:09]
Isaiah
Yeah, awesome, awesome group of investors too. I have to shout out Doug Filippone who led this round, ran global defense at Palantir for I think 17 years. Started Snowpoint, ex Army Ranger, JSOC commander. Awesome, awesome guy. Not in this photo but I actually arrived on our site here for the groundbreaking in a Blackhawk helicopter with Doug which was fantastic. It's a great time.
- [206:36]
Jordy
The suit and the Blackhawk goes unbelievably hard.
- [206:40]
Isaiah
Goes quite hard. Hedram Sharaf and Richard Blankenship as well from Dream. Absolutely made the magic happen on this round too. Fantastic guys. Really, really grateful for all our investors and Palmer's in.
- [206:52]
John
I remember last time me, you and Palmer were together, you guys were in a fierce debate and you clearly got you wound up seeing eye to eye because now he's in the round which is so congratulations on that.
- [207:02]
Kaz
Yeah, yeah.
- [207:03]
Isaiah
I think we're debating about how much uranium we have. There's lots of it, guys. We got a lot of uranium to use. Someday we'll get the fusion, but not before we're all living in like o' Neill cylinders with, with more energy than we know what to do with.
- [207:18]
John
Fantastic. Well, I'm very excited for our nuclear future. I'm excited for what you're building and I just want to say massive congrats. I remember we filmed A very brief interview in El Segundo probably around two years ago. You didn't even have an office yet. And it's been what a fantastic run. Congratulations on all the progress.
- [207:39]
Jordy
Amazing. Awesome.
- [207:39]
Isaiah
Thanks.
- [207:40]
John
John, Jordy, we'll talk to you soon. See ya. Let me tell you about 8 sleep dot com.
- [207:47]
Jordy
Get a pod 5 also I just reached for my phone. Check my store warranty.
- [207:51]
John
30 night risk free trial free returns, free shipping.
- [207:53]
Jordy
I am unfortunately, I was away from home.
- [207:57]
John
Oh, you're away from home. Yes. You're on the road. I got an 86, seven and a half hours. Our next guest is Grant from Gamma. He's in the re stream waiting room now he's in the tv.
- [208:09]
Jordy
No, this is Hayden. Got Hayden first.
- [208:10]
John
Oh, fantastic.
- [208:11]
Jordy
Welcome to the show. I guess squeezing in, super excited to have you on the show here we have, as you know, Uniswap alum working on the team. We're very, very grateful to have him and it's great to meet you.
- [208:30]
Hayden
Yeah, great to meet you both. I actually wasn't planning on doing anything today, but now here I am.
- [208:36]
Jordy
There you go.
- [208:37]
Hayden
Yeah, great to be here.
- [208:39]
Jordy
Awesome. For anybody that has been living under a data center, introduce yourself and Uniswap.
- [208:48]
Hayden
Yeah. So I'm Hayden. I'm the founder and CEO at Uniswap Labs. Uniswap is the largest decentralized exchange in the world. So for some context, if you annualize the past couple months of volume, it does about $2 trillion a year in trading. When you think about what a decentralized exchange is, it's kind of, you could think of us as a YouTube to a Coinbase or Binance's Netflix.
- [209:13]
Jordy
Right.
- [209:14]
Hayden
So we have the upload function and so people can create their own markets. We introduced this whole system called automated market making, which lets people create liquidity themselves. And so it sort of dramatically lowers the cost to the creation and access of financial markets. And we're sort of the one of the pioneers of what people call decentralized finance, which is this area of crypto that is focused on building decentralized transparent financial infrastructure. And so Uniswap is the leading decentralized exchange in that industry.
- [209:44]
Jordy
Amazing. So we were live when your post hit the timeline. We have it pulled up now. But it would be awesome for you to kind of run us through kind of the news and break it down for us.
- [209:55]
Hayden
Yeah. And I can try to set some context here. So there's kind of a bunch of different things here. So Uniswap launched about eight years ago or seven years ago. And maybe around five years ago, we launched this thing called the Uni Token, which was a token that was meant to govern the UNISWAP ecosystem. And within that, well, at a high level, what the protocol does is it introduces a economic system for the Uniswap protocol and the Uni Token. And then it also basically refocuses Uniswap Labs on building value and building on top of the Uniswap protocol. So we're kind of in this moment in time where there's a bunch of different things happening in crypto. And part of what we're seeing is a lot of people almost move crypto into traditional financial rails. And part of what, you know, they're sort of like almost trying to like IPO crypto companies or build these treasury companies. And what we're focusing on is doubling and tripling down on the technology itself and the, you know, the decentralized protocol that we built. And so, you know, the proposal, first, it turns on protocol fees. This has been a really big thing in the UNISWAP world for a very long time. People have kind of wondered when this would happen. But here, you know, the protocol fees will be turned on, and these are fees for trading on Uniswap protocol as well as there's this chain that we built called Unichain. And those fees are also going to this Uniburn system. There's also a, essentially a burn of a large amount of UNI from the treasury. And this is basically representing all the fees that could have been. It's almost like symbolic. There's been sort of a lot of like, you know, speculation around when, when this would happen. And so I think that, you know, this is kind of like a nod to that. And then I think beyond that, uniswap. So one thing to kind of give context here is that we were in this crazy regulation by enforcement area for crypto. Essentially, Gary Gensler and the SEC sort of sued basically everyone who lived in the US who was a crypto founder and the kind of incentives that created for the ecosystem. Basically they said, if you do anything that builds value for a community, we're going to sue you. And then actually within that context, we were extremely limited in how we could interact with the world. And then we basically. And then they sued us anyway. And then it was ultimately dropped. But I think. So what's happening now is that there's sort of like a very different kind of thing here. And so Uniswap Labs is really able to kind of lean into the Uniswap protocol and building for it and focusing its full kind of attention to that. Where we spent a lot of the past few years focused on basically building a business around the products that we build on top of the protocol. So there's like, this decentralized network, kind of like Bitcoin, and then there's these apps and websites, kind of like a Bitcoin wallet or an exchange built on top of Bitcoin. And so we've built these products on top of the Uniswap protocol, and they have tens of millions of users. And so we've been kind of very focused at Uniswap Labs on building a business around that. But, you know, with this proposal, I think what we're kind of acknowledging and what we're saying is that the really big opportunity here, much like the biggest opportunity of Bitcoin, is the bitcoin network, not each little application built on top. The big opportunity here is the Uniswap protocol. And we want, as the sort of inventors of this protocol and people who've been developing it for a long time, we want to make that our core focus. So we're, like, leaning into that and kind of making that our full attention moving forward.
- [213:21]
Jordy
What does this mean for equity holders in Uniswap Labs, the company that raised venture capital? Because. Because I think part of what came out of the Gary Gensler era was you had this kind of, like, bifurcation of value where there was equity holders that got access to tokens, and so they had upside there. And it felt like not the kind of scenario that we'd see, let's say, in 15 years from now when tokenization is kind of the norm. This is a standard way to build companies and distribute value. But I'm curious what the proposal means for that kind of setup.
- [214:03]
Hayden
Yeah, it's a very perverse incentive to say, if you do anything that creates value, that's the bad thing to do versus and that's sort of how you end up with this kind of, like, thing where the only thing that was popular in crypto for a very long time was meme coins. And it was because they were the only thing that you could say, well, no one is trying to build any value. And so that's what became popular in crypto. And that's not really like, what is exciting to me. What's exciting to me is the idea of these truly decentralized networks that create value. And I think that, for me, what I want to align my work to doing is What I think creates the most value in the world, and I think for Uniswap Labs, the way that we think we can create the most value in the world is to lean into building this protocol. Part of this proposal does include a kind of a service provider relationship between us and the DAO that sort of aligns our kind of mutual, kind of, that sort of aligns our upside. And so in this proposal, if we create a lot of value, then we can kind of realize some of that. So the goal here is to really align incentives.
- [215:04]
Jordy
And do you think more crypto companies that raised from traditional financial institutions will try to pursue these more aligned models going forward?
- [215:15]
Hayden
Look, I hope so. I think that everyone was sort of kind of dealing with what was possible and I think that people have kind of still evolved and adapted and a lot of. I think that. But my hope is that the crypto native things are what ultimately win. And I think that's kind of where I put my kind of bets. To me, the point of the technology, the point of the industry is the technology. It's like the decentralization. It's the idea that you can create a financial application that you trust, not because you trust a company, but because the code is transparent and public and auditable and run by multiple independent parties. This idea of decentralized consensus and networks, it can be really powerful. And so I think that the more that projects lean into that, the better off we are. There's sort of this interesting thing that happens. All of the fee, for example, the fee system that we're sort of proposing as part of this, every aspect of it is transparent and public and auditable and verifiable in real time. And so people don't need quarterly reports from a company when you can have real time access to anyone in the world that's not just public and transparent, but also cryptographically provable. And so there's sort of different ways of accomplishing a lot of the goals that various regulations have. When you kind of lean into the unique nature of the technology, that makes.
- [216:36]
Jordy
A lot of sense. How's the reaction been? We've been streaming here, so I haven't been able to check the timeline, but this seems like something that both Uniswap superfans and detractors would appreciate.
- [216:51]
Hayden
Yeah, so it's only been about an hour and a half. You guys were fast to messaging me. But so far, I mean, from what I've seen, it has been extremely positive. From a public reaction, everyone on Twitter seems very happy, which is where most of Crypto conversation happens. I guess it's X. I still say Twitter. It's hard.
- [217:12]
Jordy
It's hard not to. Still happens to me every now and then. Well, congratulations, big milestone. And feels like it's a really positive industry here.
- [217:23]
John
Do you think this is going to be a trend for other companies that are in a similar situation?
- [217:28]
Hayden
I hope so. We're doing it because we think what's best in the way. We think leaning into the centralization and the decentralized protocol is what's best. And so I hope that other people follow this trend as well. I think that a lot of people have been doing it, but they've mostly been doing it from outside the US or in all these different ways. And I think that ultimately we really believe that this is the right thing and that what is best for users and what's best for the world, which is why we're doing it.
- [217:56]
John
What about on the regulation side? Is there anything to touch on there?
- [218:01]
Jordy
Yeah, I would just be curious with our, maybe the version of you that's earlier in their, in their career, are they deciding to set up in the United States? I mean, I know you went through absolute hell for a number of years and being based in New York was a big challenge, but are you seeing more younger crypto builders decide, hey, it's actually make sense for me to set up in a place like New York, one of the financial capitals of the world. Are you still seeing a lot of stuff happening offshore because people don't think it's worth the risk of potentially a new admin taking a different stance on crypto?
- [218:40]
Hayden
Yeah. So I think for the past four years it was a lot of people moving outside the US and that was the predominant advice that people got. And then what we've seen maybe over the past year is people start to come back to the US And I have various friends who've kind of moved their offices and who run crypto companies who've kind of moved to New York. So we're definitely starting to see a financial hub and a crypto hub forum in New York.
- [219:05]
Jordy
Brooklyn actually.
- [219:06]
Hayden
It's actually particularly in SoHo, I'd say. But there are the Brooklyn hub, but there's kind of a growing SoHo hub to crypto. And I personally, I love, I love it here. You know, there's like, I could say that it was because I believed in the technology and that it would sort of, you know, that being on the right side of history would ultimately prevail. But I will also say that I just love it here as well. And I love living in New York. So I definitely hope more people come here. In terms of like the long term certainty, that's really where like this like market structure bill that's, that's being kind of discussed in Congress is kind of pretty important as is the, you know, some of the like, you know, what we expect would be upcoming regulations out of various regulators. And so, you know, the hope is to have like additional clarity and clarity that makes sense with the technology. That's really important.
- [219:53]
Paul
Right.
- [219:53]
Hayden
I think that was what was challenging before is sort of regulators taking stances that just didn't make sense for the technology. And so, you know, the hope is that the sort of environment kind of like and we really, you know, the hope is that long term there isn't this sort of like, it's like not a doesn't, you know, it doesn't kind of stay a politicized topic long term. And the hope is that really it's just like people create sensible regulations that come out of Congress that sort of again, recognize that the software developers that create decentralized protocols are very different from a centralized financial institution that custodies funds. That's fundamentally different things. And so the hope is to have that kind of really recognized and acknowledged at a federal scale. And once that happens, I think it will be even more of a slam dunk.
- [220:42]
Jordy
SoHo crypto renaissance era will really, we'll really begin. Well, great. Great to meet you. Thanks for coming on and congratulations on, on all the progress and the proposal and we'll have to have you back on again soon.
- [220:55]
Hayden
Yeah, excited to come back on sometime.
- [220:57]
John
Thanks so much.
- [220:58]
Jordy
Great to hang. Cheers.
- [221:01]
John
Let me tell you about wander Find your happy place. Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning.
- [221:05]
Jordy
And I am in service.
- [221:07]
John
It's a vacation home, but better. It's Jordy's current home.
- [221:12]
Jordy
I will share one fun anecdote. They knew I had kids. I didn't communicate with the wander team at all. Just booked it and they knew I had kids because they asked for that info on the way in. They bought a bunch of toys.
- [221:29]
John
Oh, no way.
- [221:29]
Jordy
There was toys when I arrived for the kids. And that made bedtime a challenge because it was like it looked like Christmas morning out there. But. But without further ado, we have the CEO of Gamma coming in. Welcome to the show.
- [221:44]
John
Welcome to the show.
- [221:45]
Jordy
Sorry, so sorry to keep you waiting. Crazy day. But we're pumped to have you on and talk about the news.
- [221:53]
Grant
Yeah, it's so great to be here, guys. Excited to share. We just closed the Series B from Andreessen at a $2.1 billion evaluation.
- [222:03]
Jordy
There's some other info. You're. You're. You're profitable too, is that right?
- [222:10]
Grant
We are profitable.
- [222:10]
John
We've been profitable for two years.
- [222:13]
Jordy
Two years.
- [222:14]
Grant
We passed 100 million in ARR. All with a team of 50.
- [222:18]
John
50.
- [222:19]
Jordy
Team of 50. That's insane. What, what makes Gamma? Why is it working so well? Yeah, because we've seen some, you know, this was a category that I think a lot of people were excited about a couple years ago. We saw a ton of investment going into making, making, making, you know, decks, specifically presentations with generative AI. And not everything is panned out, but it seems to be working incredibly well for you guys. So what, what's the, what's the secret sauce?
- [222:52]
Grant
I mean, we attribute a lot of it to actually getting started. Well before sort of this recent AI wave. We've been a company for five years now. So the first couple years we actually focused a lot on just the underlying editing experience. So can we create new building blocks that aren't traditional slides, you know, the 16 by 9 format and allow like the average person, the everyday person that isn't a designer, doesn't have design skills to create much faster. And so two and a half years ago we kind of married those building blocks with just re engineering the entire workflow within Gamma so that AI can actually really quickly assemble those building blocks fast. Give the end user a really seamless experience.
- [223:34]
John
What about on the. How can you talk about the shape of the user? Have you been selling direct to consumers? B2B. Is there some sort of like, you know, Dropbox did, like the viral web, the consumer software viral loop where I send it to you, you install, you become a customer, we upsell. Or is it more sdr led? How are you thinking about the actual growth engine for the business?
- [224:05]
Grant
Yeah, definitely. So where we started, we actually started much with much more of a prosumer base of users. So you can imagine anybody that has to do a lot of external facing communication, whether you're a freelancer, solopreneur sponsor, small business owner, someone that needs to create a lot of decks. We made it dead simple for them to get started. For them, the beauty is that they're not locked into the Microsoft Suite, the G suite, so they have the freedom to choose whatever tool is best for the job. And so they're able to pick up our tool, use it. By nature of our category, we're lucky that if you like using Gamma, you're sharing and presenting with others, there's organic virality baked into the use of the product. So as the product has gotten better, more and more people use it, share it, share it in many different ways. And that allows us to essentially acquire more and more users for extremely cheap.
- [224:53]
Jordy
How big is the market for decks? Because I feel like it's hard for me to get a sense of how big the market is for actual infrastructure for creating decks, software for creating decks. Obviously the market for decks Dex is in the hundreds of billions. I'm sure if you add up all the different consulting groups and things like that. But yeah, how do you look at that market? You're multi product now, but do you expect that Dex will be something kind of one of the biggest product line in five years, 10 years? Or do you guys really want to go wide?
- [225:34]
Grant
Well, yeah. So even if we just start with the category presentations to your point, it's massive, right? So Google Slides 800 million monthly active users and then you add PowerPoint. We're talking well over a billion monthly active users. And that's just in that one category.
- [225:51]
Jordy
PowerPoint has a billion monthly actives.
- [225:54]
Grant
You add Google Slides and PowerPoint together. So we're talking about a category where today and that's with a product that's still pretty manual and tedious to use. Now imagine Gamma automating a ton. Our API is going to actually make it so that anybody can actually build on top of our platform as well. So if you have a business where content creation can be core to your infrastructure, you can now build on top of Gamma. So no longer even manually creating content. It's going to be a massive market.
- [226:23]
Jordy
And so that API business is that another SaaS company that wants to make it easy to generate reports that that users can walk people through the organization is that kind of a use case is like hey, take your data, we'll turn it into a beautiful presentation automatically that you can run a meeting with.
- [226:42]
Grant
So there's actually multiple different layers. Layer one I'll call kind of just an extension of our prosumer business today. So imagine if you're already using Zapier, you can combine that with your favorite tools. So granola for notes, for instance, if you're a freelancer, you take all your notes in Granola. The moment the meeting's over, you can take that meeting transcript, feed it into Gamma and create a very personalized deck going back to your clients saying hey, these are all the things we discussed. These are deliverables, these are the action items we agreed on. You get a beautiful PDF sent directly to them right after. So that's like a prosumer use case. Then there's like B2B use cases where in the future we'll partner with platforms like Glean, where Lean is sitting on top of company knowledge. If anybody internally wants to create a QBR or strategy deck, they can pull that into Gamma, automate the content creation, create a beautiful deck so that you can use that for a meeting or discussion. And then one of the use cases you alluded to is what if other developers can build on top of Gamma? So imagine you have like a real estate app, your real estate app. You know, you want to be able to empower your users. Anytime they look up a listing or look up a zip code, they want a PDF of all the different listings in that zip code. Well, we can power all that content creation, build a beautiful report so that app company focuses on the app itself, not on the content infrastructure. And we can essentially operate in the background, send that beautiful PDF with all the listings for that particular zip code to the end user for that particular app.
- [228:11]
Jordy
Are you going to keep the team Lean going forward? Are you going to develop some hubris and hire like 400 people? What's the plan?
- [228:19]
John
DocuSign numbers. Get to DocuSign.
- [228:21]
Grant
Yeah, you know, we've, we've always tried to do things maybe a little bit different. You know, we raise as little as we can, we build a super Lean team, we continue, you know, I think we're going to continue to do that no matter what. And so Lean is obviously, you know, relative to, you know, we have big ambitions and so the team is going to get bigger. We're definitely hiring, but relative to our traction, I think we're still going to be, you know, pretty small.
- [228:45]
Jordy
Did you ever think about raising 67 million?
- [228:50]
Grant
You know, it's a good question. We felt like we really needed that extra million. Just in case.
- [228:56]
Jordy
You never know. Missed, missed opportunity for the meme. Meme potential. Somebody else has to do that. Well, awesome. Crazy, crazy, crazy progress. And I love to see, you know, a winner, a winner coming out of this category. You know, everybody has been through the pain of making presentations and there were so many, you know, I'm thinking of tome. I think there was, and there was Pitch.com, all these companies that tried to crack this problem and just didn't quite figure it out.
- [229:27]
John
Edna has a company.
- [229:29]
Jordy
Yeah, Ed, you're competing with Edna.
- [229:30]
Grant
We got competition from everywhere, you know.
- [229:32]
Jordy
Yeah, that's fun to break into something's Working well. Great to meet you. Congratulations and I'm sure we'll see you on here for this. Was the. Was this Series A or B?
- [229:45]
Grant
Series B.
- [229:45]
Jordy
Series B. Okay, we'll see you on here for the C. Looking forward to it.
- [229:49]
Grant
All right, thanks so much, guys.
- [229:51]
Jordy
Great to meet you guys.
- [229:52]
John
We'll see you soon. Let me tell you about bezel. Your Bezel concierge is available now to source you any watch on the planet. Seriously, any watch. Buco Capital bloke said, I just don't see a world where corporate budgets for AI will be smaller in 2026 than they were in 2025. I think they will be much bigger. Got room to run, baby.
- [230:15]
Jordy
Somebody commented then you're out of touch with the world and stuck in a home office. Buco says that doesn't even make sense.
- [230:21]
John
That doesn't make sense, of course, because if you're in the home office, you wouldn't understand. No, yeah, I don't get that at all. That's very confusing.
- [230:30]
Jordy
Alex Cohen says if a startup requires you to be in office 12 hours a day, six days a week, you should run the f away like your life's a depends on it. Apparently this company Giga, which has been going viral. What is. Are they actually saying that you need to be in the office 12 days a week or, sorry, 12 hours a day.
- [230:50]
John
Someone said that they got hired in April to lead demand gen for them. They quit after the first day. There were red flags. When we hit 10 million ARR, we're going to spend 100k on blank illegal stuff. We're doing blank and MRR. The dashboards in the headquarters showed 6x less, you know, in office, 7 days a week, 12 hours a day. PTO policy is subject to change, blah, blah, blah. You, you expected to always be working. Gave an offer letter on Wednesday. So sort of like they chopped off.
- [231:19]
Jordy
A goat's head in India because it brings good luck.
- [231:22]
John
Sounds aggressive. I wonder, I wonder, have they responded? Has Giga like responded to this and said, like, this is not real? Because that would be important, I guess if they have to, because somebody's like making this claim about them, it should be sort of like, you know, debated because we don't know when someone makes a claim like this, there's a bunch of different motivations that could be behind it. I don't know. Hopefully. I saw Giga did an interview with Harsh Taggar from YC and they seem to be getting some traction in their market and there seems to be some good stuff. I mean, there's nothing wrong. Each one of these needs to be evaluated in and of itself. There's nothing particularly wrong with working very hard if everyone's in on it and everyone's happy with it. So we'll see. We'll stay tuned for the response from the gig.
- [232:12]
Jordy
Yashan says my AI investment thesis is that every AI application startup is likely to be crushed by rapid expansion of the foundational model providers.
- [232:22]
John
He's still bearish on the application layer. That's interesting. That was a take from like a year or two ago that had kind of got out of fashion. What do you think, Tyler?
- [232:32]
Jordy
Well, yeah, so one thing. So Elon quoted it and says seems to be accurate. But one thing that's kind of interesting here, Sam Altman with Tyler Cowan. They were talking about like an AI native slack and a lot of people were saying like request for startup, like who's building this? And it's like you have to assume that Sam is gonna like, he runs his business on Google. He cares a lot about new Gmail. Yeah. He cares a lot about Enterprise. He wants ChatGPT to be an agent that's working in your company 24 7. You think he's just gonna be like, oh yeah, someone else should build that. I don't care about the enterprise. Someone else should build the AI native Slack.
- [233:11]
John
Yeah, I don't know.
- [233:12]
Jordy
I would just assume that he's building that.
- [233:14]
John
Yeah, yeah, yeah, we'll see. What do you think? Is there still value in the application layer or are you so AGI pilled that it doesn't matter? Just hoard electrons?
- [233:26]
Jordy
I mean, yeah, this was like the original wrapper was like a slur almost.
- [233:31]
John
Yeah, totally.
- [233:31]
Jordy
It's like, oh, you're starting a wrapper company. Like it's like totally fake thing.
- [233:34]
John
Yeah.
- [233:35]
Jordy
But I think that the kind of wrapper trade has done very well.
- [233:38]
John
Oh, totally. It's done super well. So yeah, like look at Giga. They're pro or not. Giga Gamma, they're. They're profitable. 100 mil arrow. Yeah.
- [233:50]
Jordy
I think people massively overestimate how much like how many different things that these foundation model companies could actually do. You just can't allocate that many engineers so many different products.
- [234:01]
John
I disagree. It's not that it's the capabilities of the fundamental underlying model. Because there is a world where you go to just the base weights of GPT 10 and you say, generate me a 10 slide deck that pitches my product to this customer and it just generates it all and it just does it all. The tokens that it is outputting are.
- [234:28]
Jordy
Essentially ppt and it generates UI on the fly that allows you to edit the output. Even, even the most, even the smartest designers, best designers I've ever worked with. Rarely are they just one shotting a task where I'm like no more. You know, you want to get in there and like switch it up yourself, right? Yeah. But like so look at cloud code. Cloud code is just. I mean it's just a base model with some scaffolding. Right. You can think of it as like the actual capabilities of the model aren't incredible but if you add basically, you know, essentially a really nice for loop it gets way better. That's just like extra engineers that are just like normal software engineers.
- [235:06]
John
Sure.
- [235:07]
Jordy
You could see that anthropic do the same thing where they bring, you know, they put a group of 10 engineers and they say make this better at building PowerPoints.
- [235:15]
John
Yes.
- [235:16]
Isaiah
They don't do that.
- [235:17]
John
Yeah, no, I agree with that. But there was a scenario where like Claude code would be the Claude code for PowerPoint because you can go to cloud code and tell it hey, iterate on the for loop generating PowerPoint.
- [235:34]
Jordy
Yeah, I think that's still not so crazy. Like I mean you've talked about this thing where you use Claude code to do like a research and made a nice HTML file that's a PDF.
- [235:44]
John
You could just PDF it at the end of it.
- [235:46]
Jordy
It's a word doc.
- [235:47]
John
So there is a world where like yeah, the application layer still faces significant competition from the foundation model labs. Let's read Ishan's. He's also the former CEO of Reddit. Correct.
- [236:01]
Jordy
Read it.
- [236:02]
John
I'll be right back. So Ishan says my AI investment thesis is that every AI application startup is likely to be crushed by rapid expansion of the foundational model providers. App functionality will be added to the foundational models offerings because the big players aren't slow incumbents. It is wrong to apply the analogy of of fast startup slow incumbent here they are just big. Far more so than with any other new prior new technology. There is a massive and fast moving wave that obsoletes. Every new app is almost, almost as fast as it can be invented. There's almost no time to build a company and scale it. There are two ways AI application startup founders can make money. Make a flash in the pan app that generates a ton of cash and bank the cash. My estimate is that you have about 12 to 18 months cash flow generation make a good enough app that you get acquired by one of the big players for sufficient Equity. The situation is highly unstable. We don't know if it's going to crash or go to the moon. But both scenarios make it very unlikely that any AI application startup will independently become a generational super company. Baseline odds are low to begin with. I sort of agree with that. That makes sense. The best odds are finding an application application niche in a highly specialized field with extremely unique and specific data barriers, ideally ones relating to real atoms hardware or world related data and not software finance. Interesting.
- [237:29]
Jordy
Yeah, I mean, I think like if you're a normal kind of consumer wrapper company, you probably did not like seeing what OpenAI was doing this summer where they had, oh, we have a Expedia plugin and now it's, you can use Figma, you can use it straight in the chat. I think there are still plenty of startups that are quietly just dying from better models or just more productized features in the actual chat interface or whatever.
- [238:00]
John
Yeah, I do wonder about the shape of that curve because it's clear that OpenAI used to just be such a monolith in the sense that it was just like train bigger transformer. Train bigger transformer. That's what OpenAI is at least. That was like the view from the outside. And then it became like okay, ChatGPT, the app, but then also like enterprise stuff and then also API and then also Sora and also Dall E. And at one point, do you remember the Dall E ui? Do you remember there was like, there was a moment where Dall E was turning into like Photoshop in the browser and you could actually edit and highlight different regions and you could do like inpainting where you could say generate an image here and then generate an image next to it. Generate an image. You could kind of block it all together. And they were like building an application on top of the image model. And I don't know if that disappeared. Maybe we just don't talk about it anymore. Maybe they're still working on it. But there were a number of different. And I imagine that they have a visualization of different SaaS categories that they could potentially go after, just like Google did with On Prem software. What's not in the cloud? Well, email's not in the cloud. Well, PowerPoint's not in the cloud. Well, Google Slides, spreadsheets aren't in the cloud. Instead of Excel, let's go to Google Sheets and Google just kind of chopped down that. And so OpenAI could be doing something very similar. Looking at what's not aiified, what's not AI Native.
- [239:27]
Jordy
Yeah, I think it's definitely wrong to say that this question of whether wrappers are long term valuable, I think it's very much still an open to question.
- [239:36]
John
Yeah, it'll be interesting to see. There will definitely be some folks who get out early. There's be some folks who figure out ways to be durable. It'll probably be a mixed bag.
- [239:48]
Jordy
Jaguar analytics says the the strategy Ponzi scheme is blowing up. They have 689 million of interest due in 2026 that they don't have. Saylor is enticing investors by raising yield by 25 basis points to 10 and a half percent on preferred shares to raise capital to keep running the Ponzi while collateral deflates in value. So they currently have about 50 million of cash on hand. In order to pay that interest, they can raise more debt at this relatively high rate, 10.5%. They currently have about 8.2 billion of debt. The market value of their bitcoin is roughly 65 billion. And the company is sitting at a $68 billion market cap is down 40% in the past six months. And so we will see.
- [240:47]
John
So strategy is now trading at book value essentially, is that right?
- [240:51]
Jordy
It's trading at 68 billion, but they have 88 billion of debt.
- [240:57]
John
Okay, okay. So net of debt, they're still a little bit high, a little bit above where asset value is interesting. Apparently. So this is in the Wall Street Journal too. I guess everyone's writing about this right.
- [241:09]
Jordy
Now, but the stimmy checks coming back, the tariff dividend, someone's excited about it.
- [241:19]
John
Excited for the stimulus checks. Everyone's pumped. Yeah. I mean the original microstrategy trade was like. It was hard to buy crypto on certain platforms. It was hard to buy crypto in your IRA institutions. Yeah. And MicroStrategy gave folks a way to do that. And it still exists. There is some sort of arbitrage still. But just purely getting access to bitcoin is.
- [241:48]
Jordy
Guess what day MicroStrategy peaked in. In the dot com bubble.
- [241:53]
John
Wait, what? Oh, dot com. Oh, they've been around that long? That's.
- [241:56]
Jordy
Yeah. The criticism of Saylor is that like he was, like he was a. It was a kind of a bub guy. He's big into that whole world.
- [242:05]
John
And the bull case, he seems relentless. He's still around.
- [242:08]
Jordy
He seems relentless. The stock peaked March 10th of 2000.
- [242:13]
John
Wow. There you go. March 10th, 2000. So MicroStrategy was worth about 128 billion at its peak in July. It is now worth about 70 billion. So, I mean, a pretty significant sell off. And interestingly, bitcoin has not sold off in the same way. It's purely the market mood changing around crypto. Treasury companies apparently. Very, very fascinating. Yeah, there's a lot here, but we can go into it some other time. Anything else in the timeline, Jordi, that we should be looking.
- [242:48]
Jordy
We are. Well, well over.
- [242:51]
John
We're in the fourth hour, baby.
- [242:53]
Jordy
We're in the fifth hour. And we're in the fifth hour. Let's go for six. Let's go for six.
- [243:00]
John
In the fourth hour, I start asking our guests the same questions that Jordan asks. I just get so lost.
- [243:06]
Jordy
It happens.
- [243:07]
John
He's like a million text messages. Anyway, stimulus checks are back. This is true, apparently. Or at least it's like rumored. Or at least it's true. It's not necessarily true yet, but it's on. Truth Social.
- [243:22]
Jordy
Warren Buffett.
- [243:23]
John
We'll be paying a tariff dividend of.
- [243:25]
Jordy
2000 letter that says he's. I'm going quiet.
- [243:28]
John
What? Warren Buffett says he's going quiet.
- [243:30]
Jordy
He says in one of. This is in the Times today. He says in one of his final missives as the company's leader, Mr. Buffett said he would accelerate his plans to disperse his fortune to his children's foundations. My children are now at their prime in respect to experience and wisdom, but have yet to enter old age. He's talking about his daughter and two sons who range in age from 67 to 72. And again, still sitting on a lot of cash.
- [244:03]
John
He's got a lot of cash. The Rockefeller Center Christmas tree has been delivered. Let's hear it for the Rockefeller. Christmas is officially here in New York City.
- [244:11]
Jordy
We need some Christmas. I need some Christmas. Sound effects on the soundboard. We gotta bring the Christmas spirit.
- [244:17]
John
Oh, yes.
- [244:17]
Jordy
We need.
- [244:19]
John
Ho ho bells, jingle bells. Christmas has officially started. TVPN today. I'm calling it We're Christmas Maxing Now. Very fun show. Thank you for watching. Tune in tomorrow.
- [244:32]
Jordy
Wait, we have to read this last post from Andrew Reed. The top real estate agent in Hillsborough, Burlington is this guy named Stanley Lowe. And on his website he says, what do you say? The diminutive risk taker speaks with competitiveness, cockiness and conviction of a salesman who loves the business and rarely doubts his ability to succeed against all comers and all odds. While some will attempt to impugn the Green Banker operation as a high end real estate machine, those who have transacted with the firm see it for what it is, a successful, responsive juggernaut that reflects the personality and determination and discipline of one man, Stanley Lowe. And the perpetual motion of a real estate operation that never slackens in its quest to stay atop the real estate pyramid. What a bar. What a bar. And look at this guy. He's suited up, looking like an absolute.
- [245:30]
John
G. He's actually the top.
- [245:31]
Jordy
You gotta work on getting Stanley on this show.
- [245:35]
John
That's not him. That's like a toy of him. Is it?
- [245:39]
Jordy
Oh, I think this is a real picture of him. I think it may be random Photoshop.
- [245:46]
John
Okay, something weird's going on here. It looks like a toy or something.
- [245:51]
Jordy
And then our final, final post. We're not gonna get to the story. I think it's been late. Maybe we'll get to it tomorrow. But Sam says there's locking in. And then there's locking in. How this 31 year old made a quarter billion dollars in 30 months trading Russian oil when sanctions meant others stopped.
- [246:10]
John
Yeah, this is a great story in the financial. Dig into it. But stay tuned for more TVPN tomorrow, 11am Pacific. Tune in.
- [246:20]
Jordy
Can't wait. Can't wait.
- [246:22]
John
We'll see you then. Until then, leave us five stars on Apple, podcasts and Spotify. And if you're looking for a shorter version of the show, although if you're in hour five, I doubt you are. But in general, if you're ever missing this show, we have a product called DietBPN. We edit down the whole show, bring it to you.
- [246:40]
Jordy
30 minutes.
- [246:41]
John
20, 30 minutes, something like that.
- [246:43]
Jordy
All the flavor, all the flavor. And only 30 calories.
- [246:46]
John
Only 30 minutes of your time and you can listen to it on 2x, I guess, if you want too.
- [246:50]
Jordy
We will. See you tomorrow.
- [246:52]
John
See you tomorrow. Goodbye.
- [246:53]
Jordy
Cheers.