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- [00:01]
Jordy
You're watching TVPN Tuesday, May 12, 2026 we are live from the TVPN Ultra of the temple of technology, the fortress of finance, the capital cap.
- [00:12]
John
I'm boycotting John's boycotting. The soundboard.
- [00:15]
Jordy
The soundboard. We have a great show for you today, folks. We have a bunch of guests and a bunch of news stories to go through. Of course the trial is ongoing. Did you say that this might be the last week of the trial? I thought it was a four week trial, but it sounds like it might wrap up.
- [00:30]
John
Are they ahead of Schedul?
- [00:33]
Tyler
Yeah, Mike Isaac said it might end this week. I assume just because they're getting through the like, you know, depositions, whatever, faster.
- [00:39]
Jordy
Yeah, I mean it seems like Ilya has gone, Mira's gone, deposition from Satire and Siobhan Zillis and then Sam's on the stand right now. I think Mike Isaac is live tweeting it. So we'll run through that. We will also run through the run of show and what Brandon Grell wrote in the newsletter this morning. Sam Altman took the stand in the OpenAI vs Elon Musk trial this morning. Just as a reminder, here's what's at ST per the Wall Street Journal, Musk is suing OpenAI and its leaders, Altman and Greg Brockman for allegedly manipulating him into giving tens of millions of dollars to a nonprofit organization only for them to turn the AI lab into a for profit venture. Musk is also suing Microsoft, OpenAI's largest investor, for aiding Brockman and Altman in their alleged deception. So a big point, big turning point in the trial was last Wednesday when former OpenAI CTO Mira Muradi and former board member Helen Toner gave testimonies about the events leading up to the November 2023 failed board coup that were critical of Sam Altman's leadership style. In candor, they call it the blip where Sam was out and then back very quickly with a couple other people stepping into CEO for just a few days. But last week, OpenAI's side also began to land some punches on Musk. Earlier testimony from Shivon Zillis and Greg Brockman also had already suggested Musk was not just defending a pure nonprofit vision. He had explored scenarios where OpenAI and might become a part of Tesla, where Altman might help lead Tesla AI and where Musk could retain deep control. Brockman also testified that Musk supported a for profit conversion if Musk could control it, including a version tied to raising money for his Mars ambitions. Yesterday, Microsoft CEO Satya Nadella and OpenAI co founder Ilya Sutskever took the stand. Satya largely buffed OpenAI's side, defending Microsoft's partnership with the company and saying that Musk never contacted him to complain about the deal, violating any agree Musk had with the with with with OpenAI's nonprofit despite Musk having Satya's number. Ilya testified that he spent a year compiling a 50 page document documenting Sam's manipulative behavior, but also said he never promised Musk that OpenAI would remain permanently nonprofit. Also, it came out in the trial that Sutskever's stake in OpenAI is probably worth around 7 billion, which probably complicated how the judge and jury feel about his own motivations. So the story is Since Marathi first, the trial became a referendum on Altman's trustworthiness. Then it became a referendum on whether the 2023 or the 2023 board was brave or incompetent. Then Microsoft came in and tried to make it look like it was the stabilizing partner. Now Altman has to personally answer the core questions hanging over the whole case, whether OpenAI's evolution was a necessary adaptation to build frontier AI or a betrayal of the nonprofit mission Musk says he funded. The trial is expected to conclude this
- [03:34]
John
week and you can Seth pulled out a quote from Ilya. This is explaining why OpenAI has a for profit and he's he I guess yeah was was playing and I don't think intentionally playing into the meme potential but certainly that's how it played out. Ilya said under oath in a federal court if there's no funding, there's no big computer. Max F says in the running for quote of the year if there's no
- [04:02]
Jordy
funding there's no big computer and you need big computer if you want big
- [04:05]
John
AI very scene says Bro walks around like he knows someone is going to make a movie about probably thinks of quotes that are going to sound good at movies to help Christopher Nolan in the future. In fact, I bet Christopher Nolan is messaging him quotes to say as an early investment.
- [04:22]
Jordy
Oh yes, the Iliad. That's what they're calling it. Well, Sam Altman takes a stand in Musk vs OpenAI. Mike Isaac has a live blog going on X under Rat King with lots and lots of side notes about his diet for the day. He seems to have continually be depending on a single banana for sustenance, which I'm surprised by. But let's run through some of what Mike Isaac is finding and saying. Where does this start in the coffee line. Now it's so confusing because he puts a butt pillow in the car. Okay, I'm gonna go back to the other one.
- [05:01]
John
Red. He forgot it.
- [05:02]
Jordy
No, I think he got it, but he's very upset. There's many twists and turns in the Mike Isaac saga.
- [05:08]
John
I mean, it's really the meta story happening around the trial.
- [05:12]
Jordy
Potentially bigger.
- [05:13]
John
Potentially bigger.
- [05:13]
Jordy
I wonder. Yeah. Is there a world where Mike Isaacs sues the court for having un. Uncomfortable chairs Sue. Sue the federal government. A federal courthouse. So OpenAI begins questioning Altman much in the same way that the plaintiff side had questioned Elon Musk, establishing that Altman, like Musk, has been enamored with AI for years and wanted to build inventive things with it. This is a very interesting tidbit from that. That original, like that viral quote from Sam where he's like, AI will probably destroy the world. Like, that was an. That would. That happened in 2015. And it was an answer to a question of, like, what do you think the key problems to solve are? And then the next sentence in that quote that always gets clipped out is like, and I'm starting a company. Oh, it's more of a nonprofit to work on this problem. Exactly. But that doesn't make it in. But. So they were clearly both very interested in building beneficial AI, although they ultimately butted heads. And they were also very worried about Google. Rat king. Mike Isaac says theme of the trial is basically everyone hates Google.
- [06:18]
John
Do we know the orig of the rat King? Nick sort of moniker?
- [06:23]
Jordy
You don't know what a rat king is? A rat king is where so many rats come together that they ball together into one single organism and become a rat king. I believe it's a reference to 30 Rock asking chat. It's a bit. Anyway, Altman email from 2015. Been thinking a lot whether it's possible to stop humanity from developing AI. I think the answer is almost definitely not. If it's going to happen anyway, it seems like it would be good for someone other than Google to do it first. And so this was what Elon and Sam were talking about back in 2015. Author status update. Hungry, Uncomfortable hit. Points taking, Tiredness, poison, damage. Dota mentioned again. And Sam had to explain the difference between Dota Dota 2 and the 5v5 player game. Just keep going back to Dota. Altman said Musk once said he would potentially pass control of OpenAI to his children upon his death. I would love to know more about what that means, because if you fractured into like 20 different children at a certain point like that can create a whole different dynamic of like, succession. Right.
- [07:31]
John
As opposed to, well, maybe he wants to set up a reality TV show where they compete, maybe, maybe take over the company.
- [07:39]
Jordy
So I think this is new. But there's an old email that says Altman might have joined the board of Tesla as part of old AI discussions. Also came with a nascent threat of Musk doing this AI work inside of Tesla.
- [07:52]
Kevin Hartz
Tesla very.
- [07:53]
Jordy
It would be a shame if you didn't accept my offer. Sort of moves the Tesla's off. The Tesla offer is interesting, says Mike Isaac. Musk's offer. Musk offers a board seat. Altman says it was something he felt was to assuage concerns that Altman would have no direction over the development of AI if it were folded into Tesla. But Altman also said it appeared to be a nascent threat if Altman had not accepted the idea. According to him, Musk hinted that it may have done that he may have done work developing AI on his own at Tesla regardless. And Mike Isaac gives some more context here. He says this sort of talk is fairly commonplace these days on the battlefield that is Silicon Valley. Mark Zuckerberg, Meta's CEO, has in the past made overtures two companies he's interested in acquiring, though he is often more explicit about his intentions. If you don't take the deal, we'll come for you. Tony Soprano vibes his back hurts. Continuing, Altman is criticizing stack ranking of engineers across AI labs, something Musk loves to do across his companies, apparently, and something very common across big codes like Meta and Amazon. And also Microsoft is known for the Stack ranking. They almost like invented it or certainly popularized it throughout the 90s and 2000s, I believe. But Altman says AI engineering labs need more psychological safety. You have to be willing to let a researcher go off and try something random in the corner. Very bottoms up. This is where the deep research project came from. And a bunch of other AI breakthroughs came from lmao. Altman says there was a meeting at Tesla during the evening about folding OpenAI into Tesla for AI research. And then a long, long period of time with Elon showing us memes on his phone. And apparently the court reporter asked Sam Altman to repeat memes on his phone loudly. I don't know why they didn't hear it the first time, but rat king Mike Isaac is laughing at this. I am going to have Sam Altman stating memes on his phone into a booming courtroom mic playing inside of my head on repeat for the week. Memes on his phone in all caps. Getting hungry. He only had a banana this morning. Mike Isaac is suffering. His stamina points are draining and he says lol. Email between Altman and Siobhan talking about how to handle Musk and Altman telling him about a Microsoft investment. So Microsoft's going to invest. How should we tell Elon? Altman narrates the email verbatim. Hopefully it's easy. Cross fingers emoji because you have to read it out. So really funny to hear cross fingers emoji in the court record. Altman is going through his real first postmortem of his firing. Appears to have gone through all five stages of grief multiple times over the course of five days. What are the five stages of grief? Stages of grief? Cope, seethe, cope seethe, mauled, Denial, anger, bargaining, depression and acceptance. Yeah, that is actually cope, seethe. The five day period is what is referred to internally at OpenAI as the blip, since it was a brief intermission, for what it's worth, he said. Altman said, I had poured the last years of my life into this. I was watching it about to be destroyed. There was something appealing about going to work at Microsoft. I was also very angry, hurt and upset. It felt like an incredible betrayal. It was definitely one of the hardest times of my life. Altman finally broaches the issue of his widely rumored untrustworthiness. Clearly there were misunderstandings and a breakdown of trust, he said, but with what comes of a bit of a practiced humility in his voice. Quote, I was not trying to deceive the board. I feel badly for the misunderstandings, but that was never my intent. This goes to the heart of how Musk's counsel has tried to portray Altman across the entirety of the trial. A fundamentally slippery operator who says one thing to one party and something else entirely to others. OpenAI's rebuttal to that line of thinking has been to depict a board of directors at OpenAI rife with this function and, as Microsoft Satya Nadella put it earlier in this week, directors who are operating from amateur city. Interesting. Taking shots of the board. Okay, Sam is giving the full jury Sam treatment again, trying to bat back against Musk's picture of Altman as a serious liar. If I knew how difficult and painful this was going to be, I never would have tried. But I'm very glad I did. Open AI is done. Cross examination begins. Stephen Molo, lead Musk counsel who has the flair for dramatic will probably give us fireworks and this is continuing, says, oh my God Molo, are you completely un. Are you completely trustworthy? Altman says, I believe so. Molo says, do you always tell the truth? Wow, this is getting heavy. It's all about Musk counsel painting Sam as a liar. Brutal. Altman is on the defensive, but taking more of a muted tone with some attempted humility in his voice is very clear contrast with how Musk appeared combative on the stand. Interesting cross examination is basically Musk's lawyer, Molo reading off a list of questions, saying, hey, bro, do you remember? Do you remember all this messed up stuff you did? And Altman saying, no, I don't know. Not true. No. Absolute chaos. Well, you can follow along ikeIsaac, he has a whole thread and he's live posting. And I believe that there's a New York Times live blog as well that you can follow along with. Although the live blog does not have nearly enough snack updates. But anyway, should we talk about SPVs? Cover this? Yes, let's move over to SPVs. The special vehicles posts are from Rocking the Valley. Right now. People are raking in the dough with SPVs. Not everyone's happy about it.
- [13:29]
John
So, yeah, we can actually go down a little bit and pull up this post, which has since been deleted.
- [13:36]
Jordy
Oh, really?
- [13:37]
John
The post said, a few days ago, simply brokering an anthropic secondary deal made me more money than my entire net worth from working in my twenties. This is insane. It is especially insane because this is not legal. It is insane to post.
- [13:55]
Jordy
Is it not legal?
- [13:56]
John
Yeah. So you need a broker dealer license to broker securities.
- [14:01]
Jordy
Yeah, that's right. That's right. Well, I mean, she didn't say that she doesn't have one.
- [14:04]
Roger Lynch
She might.
- [14:06]
John
Very, very unlikely. It's very burdensome. Just the compliance to actually get your own broker dealer. Yeah. Even there's people that I know that just do secondary transactions. They don't even have their broker dealer license. They work under a firm that does. They basically like contract with a firm. So they're kind of like an. Almost like a real estate agent working under a broke.
- [14:26]
Jordy
I'm smelling an intern challenge.
- [14:28]
John
Tyler, get your broker dealer license. Figure out a way to use AI to bring down the compliance burden.
- [14:34]
Jordy
Slash goal. Throw that slash goal down from me or from the X High xHigh 5.5. Codex.
- [14:41]
John
Yeah.
- [14:42]
Jordy
And try and try and get your broker.
- [14:44]
John
Yeah. So and so.
- [14:45]
Jordy
Let's see what it does.
- [14:46]
Tyler
Yeah.
- [14:47]
John
Turns out that if you want to broker securities transactions, it is. There's a big regulatory burden for good reason. Right. We're talking about, you know, Transactions that are at the scale of high end residential real estate. In this case. Yeah, you know, if this individual was maybe getting like a 5% fee on the deal paid in cash, who knows? It could have been.
- [15:16]
Jordy
Wait, there is another take here which is that there's the term brokering which requires the broker dealer license. But there is also the format where you set up an spv. The SPV takes in money from an investor and then buys secondary from someone who has the right to sell it. Maybe an investor who is not subject to the. The form that we saw anthropic put out. Right. And in that case we'll get to that. We'll get to that. But Hypothetically there are SPVs that they are not technically brokering the secondary deal but they are facilitating it and they do take a fee. Right. Because SPVs often have fees associated with them and that does not require a broker dealer license. Right. So it's possible.
- [16:03]
John
But the straightforward interpretation of the post was that they had some sort of side letter which was like. Or they just if I can find you. Yeah, I can find you a buyer. If I can find you a buyer for 100 million of your shares, you give me $5 million. Yeah, that happens a lot. But it usually and hopefully is happening through legal channels, dealers. So this seemingly prompted both anthropopia.
- [16:30]
Jordy
Oh yeah, I think this started it. Right. This must be what started because that
- [16:34]
John
post more specific language on their site saying anthropics at unauthorized anthropic st sales and investment scams and said, you know, basically saying any transfer or sale of anthropic stock or any interest in anthropic stock that has not been approved by our board of directors is void and will not be recognized on our books and records. And so yeah, typically, yeah, typically like these are. There's so many ways to like transact without influence forming the company. Sure. Right. A common one would be, you know, futures contract basically selling the right to. The right to the investment and the future performance.
- [17:20]
Jordy
Yeah. And so I think the futures, the economic exposure enthusiasts or the futures contracts teams would say that well, we didn't, there was no sale of the stock, we didn't transfer the stock and it's not a direct interest in the stock. And so it doesn't need to be approved by the board of directors. And the board of directors would say absolutely not, that doesn't count. You think you found a workaround and it doesn't count in this world. But that is going to be yes.
- [17:55]
John
The funny thing is there's these sort of digital asset equivalents, like people, some of them put out comments basically meme stocks around that are trying to track overall interest or the overall valuation of these companies they sold off. Which is funny because I don't believe they're actually tied to any real underlying equity.
- [18:16]
Jordy
Purely sentiment based. And even in the case that they were saying that they were tied, it was typically 1 to 5% of the fund in Anthropic or OpenAI or SpaceX and, and they were like already well disconnected from the fundamentals of the book value. Right?
- [18:32]
John
Yeah. So I'm trying to think through how this plays out and overall I think the reaction from the Internet was like being more dramatic than maybe is necessary because already like if you're, if you're, let's say an early investor in Anthropic and you at some point sold your shares, you didn't go to the board and get permission but you structured some deal to sell your shares, get your shares back. That is so, so when waiting, while waiting for, for that.
- [19:07]
Jordy
Yeah.
- [19:09]
John
On one hand neither party, if you bought the shares or you sold the shares, neither party is that incentivized to go to Anthropic board and be like hey, I'm really sorry, like we did this. It was against. Because on one hand there's probably some scenario where the investor or the anthropic employee could get their shares voided or reclaimed. In some scenarios they don't necessarily want to do that. The investor is like, well I bought these shares and now they're worth a lot more. So let's just be chill and let this play out and we'll all forget about it. But there is a scenario where the seller tries to then make the case of oh actually I'll just give you the money back because now the stock has appreciated so massively. There might be a weird. But what ends up happening is there's sort of this like legal tension, right. Tension between both these parties and then there could be some incentive. Again, the person that bought the shares at a lower valuation wants to just let it ride. But then somebody might be like, well I kind of would happily ride up another 20x or something like that. But then if this starts going, if once it goes into like an actual complaint or a lawsuit, then it becomes public and then you have this third party in there which is Anthropic, which is like gonna just be like, hey, like you guys have been messing around. Like this isn't, this isn't cool. This is against, against, you know, multiple sort of agreements and, and terms. So anyways, it's gonna be very messy, Right? There's already been.
- [20:43]
Jordy
These blog posts are not new rules. It's merely. They are publicizing rules that are probably already in the stock documents.
- [20:50]
John
Yeah. Because if you invested earlier, you an employee, you should know all this, which isn't a surprise, right?
- [20:56]
Jordy
Well, it's possible that very early investors don't have transfer restrictions for some reason. I don't think so. It's pretty standard.
- [21:02]
John
No, you always set this up as a company because imagine you have an early angel investor and your company does well and they just sell it to somebody who you don't like. Like, part of the reason to be private is every deal is unique and
- [21:17]
Jordy
every deal gets negotiated points. And there might be at some point when some investor and employee was like, I'm not joining unless you give me this. And they're like, okay, yeah, we'll get, we'll pay you less, but we'll give you this. Yeah, maybe there's always like horse trading, like double trigger, single trigger.
- [21:30]
John
Yeah, but it would be, it would be like, I agree with, I agree with the stock. I agree with you. But so anyways, who knows how many transactions there's actually been? Yeah, right. I would expect, like, certainly, like, I don't know, there could be like, when you actually look down through all the trees of SPVs and there could be what, what, a lot? 10 over.
- [21:55]
Jordy
Yeah.
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John
20,000.
- [21:56]
Jordy
It's not, it's not like taxi cab driver telling you about the SPV that they got into yet, but it's like close to it. I mean, there was the story of the guy who was like selling his house for anthropic secondary. Right. Like, there's a lot of examples of
- [22:09]
John
this like that too. Imagine, imagine the record updates. You'll be able to look at the deed or whatever like, oh, who's the new owner? Oh, you work. You're an early. So that transaction, that whole transaction doesn't really work.
- [22:27]
Jordy
Oh, yeah. And that's extremely public.
- [22:28]
John
Yeah, yeah.
- [22:29]
Jordy
Way more complicated. Yeah, yeah. Very odd. Well, let's break it down for the Frog and Toad fans, the children in the audience, because Frankie over at Paradigm put it in terms even a child could explain, potentially a four or five year old. So if you're familiar with just Frog and Toad, and you don't know anything about all the buzzwords we've been dropping for the last five minutes, you can think about it this way. Frog and Toad, the loved children's book. Frog put the shares of Anthropic or OpenAI in an SPV there. He said, now we can transfer these shares freely, but Anthropic can still exercise its transfer restrictions, said Toad. That is true, said Frog. The frog and Toad. It's a great one. It's a great one. Is there anything else we need to talk about there? Ankur says if Anthropic deems all secondary sales of Anthropic stock should be voided, does that mean the original buyer retains financial interest even after selling it away? Lawsuit territory? Yeah, there's going to be a messy thing. People have been Talking about unwinding SpaceX, AAA or SPVs for a long time.
- [23:32]
John
Yeah, that's going to be a billion dol. That's going to be almost a billion dollar industry.
- [23:35]
Jordy
Yeah, we need to get the Mac Graham clip up again. It goes viral every time we talk about SPVs. What does Mike Isaac say? He says, yeah, look, all the Privcos draft this language to scare employees who don't know better from trading on secondary markets and from buyers seeking those shares. And yet SPVs find a way. Funny to see the saber rattling in Twitter accounts. Doing hyperbolic posts though. And so it'll be interesting to see like how far does the legal implications. How far do they actually go? Well, over at a different AI lab, Mira Moradi, who is just. Was Mira on the stand? She was actually testifying in person or was she just video deposition.
- [24:19]
Tyler
When I saw her, which was last Wednesday, it was just deposition. I don't believe she actually has testified in the trial yet.
- [24:25]
Jordy
It was Siobhan that was on the stand.
- [24:26]
John
Correct.
- [24:27]
Jordy
Got it. Okay. Well, Mira is cooking. Over at thinking machines lab, TML launched interaction models with a delightfully concise YouTube video that we should play so that we can watch this. Mir Murati says on X Today we are sharing our work on interaction models, a new class of model trained from scratch to handle real time interaction natively instead of gluing it onto a turn based one. Let's play the video.
- [24:56]
Doomberg
Hey, I need your help with something today.
- [24:57]
Alex Shahn
You ready?
- [25:00]
Roger Lynch
Absolutely, I'm ready. What's up?
- [25:02]
Doomberg
Yeah, so we're giving an announcement today
- [25:04]
Jordy
and I've got two of my friends coming to help.
- [25:06]
Sahir
Every time one of them enters the
- [25:08]
Doomberg
frame, I need you to say friend.
- [25:10]
Jordy
Look at those speakers. Got it. Absolutely insane setup. Audio file.
- [25:16]
Doomberg
Cool.
- [25:16]
Jordy
So we've got a new system for
- [25:17]
Sahir
full duplex audio and video which means that you can stream input into it in real time and it can respond to you even while you're speaking to it.
- [25:26]
Doomberg
Simultaneously. How does that sound? Sounds like a solid setup.
- [25:31]
Jordy
Full duplex with real time interaction is super useful. It seems faster than the original voice mode, which was lamented by viral Instagram reel producers. Can you translate to in English in
- [25:49]
Sahir
real time for my friend and for audience?
- [25:53]
Roger Lynch
Absolutely. I'll translate as you go.
- [25:55]
Doomberg
Aaj Hum.
- [25:56]
Sahir
Amare preview model.
- [25:59]
Roger Lynch
Today we're taking a look at our preview model.
- [26:01]
Jordy
I saw or I heard about a version of this in China. That's a mask that you wear that translates everything you say out of a speaker on the front. And I was hearing this, and I was just like, why is this not in America? This seems so sick. We hear about the AirPods, but then you. So the example was a mom in China teaching her kids English. And so she basically wants to be talking to them in English constantly, but she doesn't know enough English to teach them. But she wants them to learn, and so she will, I think, wear.
- [26:33]
John
Put on the mask.
- [26:35]
Jordy
No, it's literally a Bane mask. It looks exactly a Bane mask. Yeah, yeah. You merely adopted English. She was born in it. Or born in the AI translation minds. So she wears this Bane mask that does the live translation out to her kids. Her kids speak back to her in English. Smart headphones. Translate that.
- [26:56]
John
Like metal that wraps around.
- [26:58]
Jordy
I don't know. I couldn't find it. I was listening to it on a podcast, so I didn't have any visuals. But we gotta find this thing and get a pair in America. Because in theory, we could do the whole show speaking Chinese to each other, and the audience would hear Chinese, but we would be hearing English, that we talk to each other. Isn't that cool? So I would be hearing English on a massive delay, probably, but I would be speaking Chinese as it comes out of my bay mask. And. And it was just a whole story. The whole. The whole thrust of the New York Times Daily was like, the optimism of. Of AI optimism in China around AI. Just tons and tons of examples of, you know, everyday people being like, oh, yeah, like, AI is amazing. I'm teaching my kids English. They're gonna have a great life. And, like, I would not be able to do this before, and now I can just do this. And there's, like, so many examples of that. And it's the exact opposite.
- [27:51]
John
David says, the moment Jordi gets a live translation button, it's over. We're not that far away from me being.
- [27:56]
Tyler
We're working on that right now, actually. Wait. Yeah.
- [27:59]
Jordy
Are you serious?
- [27:59]
Tyler
I guess. But.
- [28:00]
Jordy
Oh, yeah, for guests, for that mask,
- [28:02]
Tyler
I would Actually be very surprised if that's like real or at least if the audio sounds very good. Because, like, you can just look at like, okay, what are the best, like real time translation models? What are they, like API prices? They're like, not super cheap, so you can't do it locally, which means it's somehow in the cloud. Right. And just like even the best models are, there's still some delay and they're just basically now getting to a point where it like sounds like a real person and not like super computer. Nice audio.
- [28:28]
Jordy
It has a. It has a clanker dialect.
- [28:31]
Tyler
Okay, so yeah, maybe, but. But just like getting the latency down is like extremely difficult because people have been working on this for. I mean, you don't think you can
- [28:38]
Jordy
do it on device at all. What if you actually.
- [28:40]
Tyler
At some point you can, but I
- [28:41]
Jordy
think it's still like very bone asic for this one model. You take the Llama 3 version of it, you bake it down. Huge battery pack. You're wearing a whole jet pack full of batteries to power the H100 in the back. It's on device inference. But they didn't say how big the suit is. You have to wear the connects to the mask.
- [28:59]
John
Yeah.
- [29:00]
Tyler
You have to trail a whole rack.
- [29:01]
John
It's like the Nathan for you. No, it's like the Nathan for you,
- [29:03]
Jordy
the chili suit, but it's an NVL 72 that you're just like dragging behind you like a washing machine. Anyway, we have our first guest of the show, Doomberg, the anonymous poster and analyst with us in the waiting room. We'll bring in Doomberg to the TV theater film. Doomberg, how are you doing?
- [29:20]
John
Stunning.
- [29:21]
Doomberg
Hey guys. Doing great.
- [29:23]
Jordy
Thank you so much for taking the time. I love an animated avatar. What can you tell the audience about who you are, why you chose anonymity, pseudonymity, any of that? Just as a way of an introduction.
- [29:36]
Doomberg
Sure. Brief intro first. Thanks for having me. Great to be here.
- [29:40]
Jordy
Thank you.
- [29:41]
Doomberg
Yeah. We are a anonymous team of former industry executives that write about the energy markets. When we launched Doomberg five years ago this month, we had nothing. And so we decided to build Doomberg on Twitter. Back then, the choice came down between another middle aged white guy in a tie or a green chicken. And you can't be remembered if you don't stand out. And so that decision actually accelerated our early growth. And then once a brand kind of kind of blows up, we observed other. Other Twitter accounts de anonymizing and it kind of destroys the brand mystique. So it's nothing more than that, really. Just why is.
- [30:26]
Jordy
Why is the chicken green?
- [30:29]
Doomberg
Well, another master stroke of marketing by our co founder and editor in chief. So our ideal clients have Bloomberg terminals, and the colors on the Bloomberg keyboard are pretty iconic.
- [30:43]
Jordy
I get it.
- [30:44]
Doomberg
And the most dominant color on that keyboard is a close proximity to the green that we currently wear. So, yeah, a brand is the gut feeling you induce in people when they interact with your product. And if our ideal clients have a Bloomberg keyboard and they see the green chicken. Doomberg. Chicken Little gets a terminal was our first.
- [31:07]
Jordy
Yeah.
- [31:08]
Doomberg
First tagline. And they don't know why they like it. It's some combination of the colors and the stunted eyes, we think. Yeah, it works. And when you got a winner, you know, just keep riding it.
- [31:21]
John
I love it. I love. I love. I love combining this high low. Right. Which is like, you know, serious content with.
- [31:29]
Jordy
Sorry. Yeah. I want to talk about energy and AI, but I also want to talk about the workflow here because, like, am I just watching like a looping animated gif or mp4 file or. Can you actually puppeteer this like a vtuber, or.
- [31:44]
Doomberg
Have you considered that this is very low tech?
- [31:47]
Jordy
Okay.
- [31:48]
Doomberg
There's no new Coke yet in design.
- [31:50]
Jordy
Okay.
- [31:51]
Doomberg
This is a GIF animated as our background on Zoom.
- [31:56]
Jordy
Cool.
- [31:57]
Doomberg
And I'm speaking to you through a Roland VT4.
- [32:01]
Jordy
Oh.
- [32:02]
Doomberg
Slightly modified in real time.
- [32:04]
Jordy
Sure.
- [32:04]
Doomberg
The latency is perfect.
- [32:05]
Jordy
Yeah.
- [32:06]
Doomberg
To build on your last discussion.
- [32:08]
Glenn Wise
Yeah.
- [32:08]
Jordy
We've had a couple guests come on and want to do voice changers, and no one's landed the plane like you have, so congratulations and, Bob, for dialing it.
- [32:17]
Doomberg
Technology is one of the five pillars of any business, and we decided to invest in our technology plan to execute the vision of the green chicken. Come on. I mean, it works. Every time I see a advertisement of all these serious finance people in suits and ties speaking at a conference and then a green chicken sitting there. It makes me. Makes me laugh every time.
- [32:36]
John
That's so good.
- [32:38]
Jordy
Talk about the other four pillars.
- [32:40]
Doomberg
Brand channel technology, demand creation, and operations.
- [32:43]
Jordy
Okay. Makes sense.
- [32:44]
Doomberg
And we have a plan for each. One of the hallmarks of Doomberg's execution on Substack is that we openly shared how we built Doomberg from the beginning.
- [32:53]
Jordy
Sure.
- [32:54]
Doomberg
In a series of monthly pieces called the Work of My Life.
- [32:56]
Jordy
Yeah.
- [32:57]
Doomberg
And it's been fun. Been a fun ride. We've got almost like 400,000 email subscribers now.
- [33:03]
Jordy
That's amazing. Congratulations.
- [33:04]
Doomberg
Crazy. How big is the crazy run?
- [33:05]
Jordy
You said it's just a couple of people, right?
- [33:07]
Doomberg
Our official statement is that you could count them on one hand with a few fingers left over.
- [33:12]
Jordy
Sure. Okay. I like that.
- [33:16]
John
Leaving some ambiguity with a few is a few. Three.
- [33:22]
Jordy
Let's. Yeah, let's start with, let's start with energy markets. Let's start with the Strait of Hormuz. I've heard it's closed. Is that good? How bad are things? How serious is the situation in the, in the oil and gas markets? And then we can go through some of the knock on effects. But just in terms of like, like, you know, a lot of people have been tracking this, but where are we on the cutting edge right now in terms of where this all goes?
- [33:49]
Doomberg
Yeah, we're launching a piece tomorrow. Look, if you had given us this fact set in February and asked us to bet the over under of 150 on oil, we would be homeless because I would personally have mortgage the house to greedily bet more on the over.
- [34:03]
Roger Lynch
Right.
- [34:04]
Doomberg
And would have lost. And I think one of the great mysteries of this whole affair is why is oil still so cheap?
- [34:09]
Jordy
Yeah.
- [34:11]
Doomberg
And it's a really interesting. Mr. Go ahead.
- [34:13]
Jordy
Yeah, and that feels like that's true for also just like the broader market, like the market is not processing in the same way. And maybe it's like the AI narrative which we can get into, but it feels like there's a very, very big historically significant thing happening and everyone's just sort of like closing their eyes. I don't know, how do you explain it?
- [34:32]
Doomberg
So we've got a deep think on it. Nobody knows. So one of the things about the oil markets is everybody lies. That's the first thing. And one of the sort of theories I was bouncing around with a guy who traded oil for 50 years over the weekend was there was an enormous excess of oil all of last year. China bought most of it. They lied about it and they're bleeding that into the market now to keep a lid on prices.
- [34:53]
Jordy
Got it.
- [34:54]
Doomberg
That's one sort of conspiratorial look. Yeah.
- [34:58]
John
And sorry, just to double tap there, you're saying they were lying about the levels of their oil reserves. So saying like, you know, basically under. Underselling.
- [35:11]
Doomberg
Yeah. So there's a lot of dirty oil. There's a lot of dirty oil on the market and they were buying it, you know, sanctioned oil, shadow fleet, Russian oil, Iranian oil.
- [35:20]
Jordy
Sure.
- [35:21]
Doomberg
And. And so you.
- [35:23]
Kevin Hartz
Yeah.
- [35:24]
John
Because back at the beginning when it first closed, weren't people saying China has 40 days of oil or something like something?
- [35:30]
Doomberg
Oh, they have, they have 1.8 billion barrels is our best guess. They probably bought a million or to a million and a half barrels a day extra all of last year.
- [35:38]
Jordy
Wow.
- [35:39]
Doomberg
And they're using that for geopolitical leverage now. They're cutting refined fuel deals with Australia. They're helping out their neighbors, looking like the mature, stable people don't have a Truth Social account to post on during the day. You know, ascending power with Trump going there this week. Look, I just want to say, in a world where oil is more expensive, oil doesn't matter like it used to. It used to be 55% of global energy. Now it's 30 and change. And so the stock market, look, the AI revolution is powered by coal in China and natural gas in the US and natural gas in the US has been made cheaper by this war for reasons that we can explain. And coal is basically insulated from oil. And so I don't think it's all that crazy. Of course, with the benefit of hindsight, doesn't mean we would have predicted $100 oil, 60 days into the Strait of Hormuz being closed, or 75 days, whatever it's been. But anybody saying that they would have not predicted a calamity is lying.
- [36:40]
Jordy
Going back in time, are you learning any lessons or pulling any historical lessons from the previous wars in the Middle East? I grew up at a time when the war in Afghanistan, the war in Iraq were breaking out, and the protest signs said no blood for oil. Which is a completely reasonable thing to say. But I was surprised by the fact that if you look at the oil markets during that time, it feels like even if you took the cynical approach that the US Was going there to steal the oil, it didn't seem like that oil was successfully stolen and flooded the market. And I'm wondering what else you've learned from history and the various conflicts in the Middle east about oil prices that you can, like, draw on today, if anything.
- [37:28]
Doomberg
Well, for that war, James Baker went around the world and told all of our allies to start pumping to insulate the world from it. The real comparison everyone draws is the Iran embargo following the war in the Middle east in 1973. But the big difference between then and now, aside from the fact that oil just matters so much less, is that there's an organization called the IEA that exists, and they have worked with the developing world to ensure that countries have a stockpile of oil for this exact situation. And they flooded the markets shortly after the strait was closed with 400 million barrels. You know, there's. There's still. When you do the math. There's oil prices should be higher and they just aren't. So there will be lots of time for an after action report when this war is done. But for AI and for the tech world, natural gas in the US being cheap and coal and China being cheap means those data centers are humming and all is good.
- [38:32]
John
What's driving natural gas prices right now?
- [38:37]
Doomberg
Great question. So the shale revolution in the US not only made the US a net oil exporter, it twinned the production of natural gas and oil. It used to be that natural gas was drilled for on purpose, oil was drilled for on purpose. And now in the shale patch in the same well, you get natural gas and oil.
- [38:57]
Roger Lynch
Got it.
- [38:58]
Doomberg
Especially in the Permian. We're drowning in natural gas in the Permian. So when the strait is closed, oil spikes, drilling goes up and you've got all this natural gas to get rid of.
- [39:10]
John
Got it.
- [39:10]
Doomberg
It's co production economics, which is actually not widely understood. And that's like pulling on our industry days whenever you have to compete against a co producer, it's terrible because if either of the markets are hot, they're producing too much and they're flooding the market with the unwanted byproduct which happens to be what you make.
- [39:29]
Jordy
Yeah.
- [39:29]
Doomberg
And so when the war broke out, we correctly predicted that natural gas in the US despite a global energy shortage, would, would prices would go down. And in fact, as we're talking today, natural gas is trading in the US for like 3 bucks a million BTU, which is about $18 a barrel oil. And in the Permian Basin it's negative spot prices. They're giving it away. They're drilling for the oil. The natural gas is a nuisance and
- [39:57]
John
so it's possible there's a superintelligence that's already in control that wants to feed on natural gas. And so they're playing. Yeah, this 4D chest, this is the
- [40:06]
Doomberg
ultimate, you know, clod agent gone over. I am, yeah, yeah.
- [40:11]
Jordy
How is China? Is China potentially like the biggest loser here? Because I imagine that coal and oil cannot be co produced in the same way. And so you don't have that dynamic playing out. Are they being squeezed? Like who, who is suffering the worst from the closure of the Strait of Hormuz?
- [40:30]
Doomberg
I suppose Europe and Australia. China is going to come out the big winner in this.
- [40:34]
Jordy
Why?
- [40:35]
Doomberg
A variety of reasons. So first of all, China has been building out something we've chronicled to the tune of hundreds of billions of dollars. The ability to convert coal into oil products.
- [40:43]
Roger Lynch
Oh, interesting.
- [40:45]
Doomberg
The Only two regimes to have done this historically are the Nazis and apartheid South Africa. It's quite the exclusive club the Chinese have decided to join. You do that out of necessity when you're worried about losing access to oil. It's very expensive, very environmentally taxing. It's not something you would do spontaneously to create shareholder value. You do it for geopolitical insulation. But also China's sway in the Middle east is going to grow if Iran continues to resist the US Israeli strikes and controls the Strait of Hormuz because Iran is being backstopped by Russia and China. And so in a world where the US has lost some geopolitical leverage in a zero sum game, China benefits and we'll see what happens this week. I think this is going to be a historic summit.
- [41:40]
Jordy
Yeah, that's what I was going to ask you next. What are you expecting?
- [41:44]
John
Before we dive into that, I did want to one, one more question around oil. How are you forecasting whether we get high prices or massive shortages with, you know, oil, you know, everything from gasoline to other oil based products. Because I think they're, I think America, like a lot of people right now are kind of projecting, hey, we're just going to pay more at the pump. But then there is some scenario, depending on how things play out, where you actually have, you know, you can't just go to, you know, we were talking yesterday and, you know, maybe there's a scenario where depending on the last digit of your license plate, if it's an odd or an even number, you can only go on certain days.
- [42:30]
Roger Lynch
It's.
- [42:30]
John
And you get actual rationing.
- [42:32]
Doomberg
That's not going to happen in the US it depends where you are. So the US Is a net oil exporter. It's a bit complicated. We're detailing it all tomorrow. Trump is playing a careful game where he is allowing the export of gasoline, diesel and jet fuel to try to help the rest of the world. And the US Is still well supplied, but is paying more. So we see $5 gas, 6, $7 diesel. Trump could reverse that at any time just by limiting the exports of refined products. He's choosing not to yet. But if you're in Australia, you're already in a situation where you have to have urgent intervention by the government, who have done a great job, by the way. And Europe, when you don't make your own hydrocarbons and you're beholden to the rest of the world, well, if everybody turtles up and says we're not going to export until our domestic demands are met, then you will see real shortages and no amount of price will clear. And so North America is fine. If you draw a circle around Canada and the U.S. the two countries are self sufficient in oil, diesel, gasoline, jet fuel, fertilizers, wheat, corn, sulfur, helium, all the things that people are worried about globally. We have not yet instituted export controls. But before the stocks would run dry, especially with the midterms coming up, you would assume that Trump and Carney would collaborate on such an action.
- [44:02]
John
Have you been tracking the Diet Coke shortage?
- [44:05]
Doomberg
I have not been tracking the Diet coke shortage.
- [44:07]
Jordy
Apparently 8% of aluminum goes through the Strait of Hermoves. The cans are in short supply now.
- [44:14]
John
Yeah, and this is top of mind for us because John could run to the studio if he didn't have gas, but you know, this show wouldn't be possible without him going through three or four of these.
- [44:26]
Doomberg
Well, I got one word for you too. Plastics.
- [44:30]
Jordy
Plastics not going to be popular with some.
- [44:33]
John
Yeah, you technically can get a Diet Coke. You can get a DC.
- [44:36]
Jordy
You could just buy a 2 liter bottle or maybe fountain. Maybe fountain is the future.
- [44:42]
John
Fertilizer was my last, last question around. Yeah, how, you know, how are you? I don't know if you're covering future food prices, commodity pricing, etc.
- [44:54]
Doomberg
But we sure are. Again, North America, both in, well in nitrogen, in phosphorus, in potassium. The big three, Canada and the US are self sufficient. Canada has the world's biggest, most fantastic potassium deposit, potash deposit up in Saskatchewan. We wrote about this a couple of months ago before the war. The U.S. you know, ammonia is basically just a natural gas play and the US is drowning in natural gas. Oh sure, through the Haber process, you just take natural gas, long story, but you make ammonia that way. There will be shortages of fertilizer around the world. There will be food shortages and all that really means is it'll be more expensive for the rich countries and there won't be food in the poor countries. This is what we see historically is the market clears and the poorest countries in the world suffer and the rich countries complain.
- [45:50]
Jordy
Black pill. Do you have any white pills? Is there a good ending that you are guiding towards optimistic about? Is there anything that you're optimistic about right now?
- [45:59]
Doomberg
Yeah, I think a major deal is in the works between. Look, I don't think Trump would be going to Beijing. I know we wanted to talk about that. Trump wouldn't be going to Beijing if there wasn't a major deal. And the list of CEOs going with him is quite the tell. Broadly, you don't have the President of China and the President United States get together in such a high profile visit without a bunch of stuff worked out in advance. And I personally being vehemently anti war, would love to see a solution to Iran and Ukraine all tied up in a nice bow. And the US focus on its neighborhood here in the Western hemisphere and we get back to growing and computing and competing and drilling for energy and making money in stocks and let the president make all the money he wants in crypto. I don't care. But another war in the Middle east was not on the bingo card for us in 2026.
- [46:57]
Jordy
I don't think many people voted for it. Well, let's shift over to what's happening in America. If we can get back to domestic policy. What are you tracking on the AI Build out? How important is energy? Everyone's been going back and forth on the chip bottleneck. The energy bottleneck. The chip bottleneck. The energy bottleneck. Do you have a viewpoint? Has it evolved? Where do you see the build out going these days?
- [47:21]
Doomberg
Yeah, we're an energy newsletter. And so holding that hammer, all we see are energy nails around the air space. Look, I think natural gas is so cheap and abundant. So then, okay, what's the constraint downstream from being able to produce electricity from natural gas? That's gas turbines sold out.
- [47:41]
Jordy
Yep.
- [47:42]
Doomberg
So then, okay, can I make electricity with anything other than a gas turbine? All right, well, solid oxide fuel cells by Bloom Energy, their stock is booming. Okay. If I want to get sophisticated, half the energy used at a data center is for cooling. And boy, there's an awful lot of natural gas in British Columbia. And last I checked, it's colder up there than in Texas. And so maybe I might want to look at British Columbia, Alaska, Iceland, cold places to build my data centers. And you're seeing some of that. Yeah, but there's just so much fuel that has become almost taken for granted in the US that this is the fuel of choice. And now you're running into grid connection issues. And so one of the pieces we wrote again before the war changed everything was called irreconcilable differences. Where we predicted that most data centers would have to go off grid because like the clearing price for retail electricity is not what a data center is willing to pay for it. And no politician can absorb those increases for industry and for you and I at home. And so we sort of envision these buildings where natural gas goes in one end and data comes out the other.
- [48:53]
Jordy
Yeah.
- [48:53]
Doomberg
And everything happens under the same roof.
- [48:56]
John
So in your what's the what's. Sorry to interrupt, but what's the downside there? Hasn't it been in, in some instances generally beneficial to bring a bunch of new energy production onto the grid just due to yet the yet more supply.
- [49:12]
Doomberg
So overall prices are set at the margin and the rate of demand for electricity for data centers is growing faster than the bureaucratic ability to bring on new grid connected power. The way in which the grid is operated, managed and built out in this country would shock you and it is utterly incongruent with the Silicon Valley break it, you know, move fast and break it mindset and so little Freudian slip there.
- [49:41]
John
Sometimes just go, just break it.
- [49:44]
Jordy
Yeah, yeah, you might be moving slow, but you're still going to break it.
- [49:49]
John
That's trying to fix it.
- [49:51]
Doomberg
That's the master sun funded. I'll just pour money on the founder until they get it. Look, we wrote a piece called the Exception that Proves the Rule where we showed that, you know, Elon Musk built this major natural gas powered data center for Xai in Tennessee by breaking all the rules. Right. He just built his own natural gas power plant and it proved to us the exception that proves the rule that the current rules need to be broken for stuff like that to happen. And so since Microsoft and Google aren't ever going to behave like Elon, you need to do this stuff off grid. And so there's a hybrid solution where most of the power is off grid, but they still connect for backup. And you build these at old shut down coal plants. That's another trend that we're seeing in Appalachia near the big natural gas shale patches up there. So you have an old coal plant with all the connections there, it's shut down and you build new natural gas plants there powered by local natural gas and you use the connections to the grid for backup, but you're not leaning on the grid for most of the power. And that's kind of a win win.
- [50:56]
Jordy
Walk me through what off grid natural gas powered data center in Alaska would look like. I'm a big Alaska fan. But do they have natural gas deposits up there that you would need to go set up drillers and then wow. Yeah, like how would that work and what is the timeline for that versus something like nuclear?
- [51:16]
Doomberg
Much, much quicker depending on bureaucracy. One of our operating mental models is that the US has an infinite supply of natural gas. It's just a matter of going and getting it. And so if you made it, for example, if we made it a. Let me put it this way, if Trump Issued a nationwide price floor of $5amillion BTU for natural gas, the US would be the drilling stampede that would erupt, would blow the world's minds. The US Produces so much natural gas. I'll just give you some numbers. The entire European Union's dependence on Russia before the war was like 15 billion cubic feet per day. And the US alone produces 110 billion cubic feet per day. It's just this mammoth machine of fuel. And so, yes, there's plenty of natural gas in Alaska. You could build it in British Columbia next door, a little to the south.
- [52:11]
John
Infrastructure isn't part of the strategic importance of the strait that they have the infrastructure to. What is it? Liquefy the natural gas so it can be transported. Are we, Are we way behind on that structure?
- [52:26]
Doomberg
The US Is stampeding to the lead in this regard. So when I was in industry, Freeport LNG.
- [52:33]
John
But when did that stampede start?
- [52:36]
Doomberg
2015.
- [52:37]
John
Okay, so it's been in process.
- [52:39]
Doomberg
When I was in industry, Freeport LNG was meant to be an LNG import terminal. And then the share revolution happened. So just to go back to those same numbers, by the end of this decade, the US Plus a sprinkling from Canada, Mexico will have gone from zero LNG export capacity to 30 billion cubic feet per day. And in QATAR Today, about 15 to 20% of the world's LNG capacity sits at a place called Roslafen. And a couple of trains were blown up there, 2 out of 14. But LNG is still a small part of the global natural gas trade. So the Strait of Hormuz is not really a natural gas problem in the way that it's an oil, fertilizer, refined products problem. Qatar is, let's say, just to make the numbers round, Qatar's 20% of LNG and LNG is 20% of natural gas. That means Qatar is 4% of natural gas.
- [53:39]
Jordy
What has the environmental pushback been around natural gas? It feels very intuitive. It's burning fossil fuel. Sure, it's not scarce, but it feels like it could create global warming. And yet I've been shocked that there's been so much focus on the water that's consumed by data centers, because that feels much more plentiful and much, much easier.
- [54:02]
John
Yeah, there's a certain. There's a certain irony that fear around global warming has been replaced by fear around AI at least in the mainstream media narrative.
- [54:11]
Jordy
Yeah.
- [54:12]
John
Yet.
- [54:13]
Jordy
So, yeah,
- [54:16]
Doomberg
yeah, there's an always a fear campaign around whatever America's excelling at. That's sort of our mental Model like, hey, America's dominating with AI and data centers. We better whip up some fear.
- [54:28]
Jordy
Yeah. Sort of like a tall poppy syndrome in our culture.
- [54:30]
Doomberg
It's, well, who knows, foreign actors who don't necessarily want to see the US succeed.
- [54:35]
Jordy
Sure.
- [54:36]
Doomberg
So to your specific question, natural gas is super clean. Burning produces the least amount of CO2 per energy. In fact, well, you can cook with it in your homes with no ventilation. Nobody would say that you would bring your barbecue indoors.
- [54:49]
Jordy
Oh, yeah.
- [54:50]
Doomberg
Which is basically coal. Right. And so you have natural gas in your furnace and you have it on your stovetop, you have it in the restaurant and it's just burning away nice and cleanly. There is one made up problem with it. Well, I say made up. If natural gas leaks, it's considered a very potent greenhouse gas. Methane leaks. They've even launched satellites to try to track where industry is leaking methane directly into the Amsterdam.
- [55:21]
John
Yeah, we were talking with Will from Planet Labs. He was saying you can use sort of like real time satellite imagery to track natural gas leaks. And they've been pretty effective, I think, at helping countries and companies identify these leaks.
- [55:37]
Doomberg
This will blow your mind. Natural gas is so cheap historically and such a nuisance that they would just release it invented into the air to get the oil.
- [55:45]
Jordy
This is before the peaker plant, right
- [55:48]
Doomberg
before people cared about methane leaks, to be honest with you. And look, this is a much, much smaller problem in the us US is very regulated. Environmental permits and controls are tough. Where it's a big deal is places like the Middle East, Venezuela, where there's weaker governments, weaker environmental controls. But you can go online and find a bunch of people really hyperventilating about methane leaks.
- [56:13]
Jordy
Who else is big in natural gas across the world? Do you know what country is number two? Three, Something like that?
- [56:19]
Doomberg
Yep, I know them all. So US is by far the biggest. Russia is number two. Oh, is that some kind of.
- [56:30]
Jordy
It's an eagle.
- [56:30]
John
That was an eagle for us.
- [56:32]
Jordy
For America.
- [56:33]
Doomberg
Yeah. Chickens don't like eagles.
- [56:36]
Jordy
Oh, no, no.
- [56:39]
Tyler
Yeah.
- [56:39]
Doomberg
So you kind of get. You kind of triggering me over here. So Iran, Russia. Iran's a big natural gas player, obviously. Canada is a growing natural gas player because of the shale patch they have up there. Australia is a big LNG exporter, Qatar is a big LNG exporter, but Russia is the second biggest. They probably produce about half as much natural gas as the U.S. and then, you know, a sprinkling throughout the old Russian, the old Soviet Union, the Confederation of Independent States, I believe they're called.
- [57:12]
Jordy
Now, what are you tracking on the nuclear side? Every time we talk to a nuclear founder, they're ready to run through walls, they're well funded, they're ex SpaceX, ex rocket scientists, geniuses.
- [57:25]
John
And then they're like 2035.
- [57:27]
Jordy
Yep. Is there any optimistic scenario where we get nuclear a little bit earlier?
- [57:33]
Doomberg
So there's only one way to do it, which is not seductive and doesn't require any technology, which is just build a lot of the stuff we already know how to build. So that's AP1000 and Candu reactors up in Canada. And there's no like fusion is a fake solutions to problems that don't exist. Like we don't really have a nuclear waste problem and we don't have a meltdown risk problem with the latest designs. And so all we have to do is build what we have. But that's not sexy. And that's not a technology store. You can sell on Wall street and have your IPO and you know, so that's our scientist.
- [58:09]
John
There are some companies that are not trying to reinvent the wheel and are just saying like, let's just do more of what we already know. Whether or not they should be venture backed is another question.
- [58:20]
Doomberg
I think there's better use for venture money than nuclear. Yeah.
- [58:24]
John
Where is solar in all of this? How much out of all of your coverage, how much is dedicated to solar?
- [58:34]
Doomberg
I think that will we write about intermittent renewables from a pretty critical lens. Broadly speaking, there's an awful lot of misinformation and disinformation about solar. The biggest one is that the sun is free as though the price of a fuel is the only input into the cost to use it. As we're learning with natural gas, it's free in the Waha hub doesn't mean that you can buy your turbines and build your data centers. And the biggest challenge with solar is that sometimes the sun doesn't shine. And dealing with that intermittency is a real challenge. And the expenses associated with making room for solar when it's there and getting out of solar's way, you know, when it's really hot and the sun is really shining, but also standing in for solar when it decides not to show up for work, those expenses are never ascribed to solar. They're just piled on to all the other technologies that have to stand ready. And so historically, whenever you reach a certain threshold of solar on a grid, things start to break. I could explain technically where that breaking point is, but it's probably beyond today.
- [59:51]
Jordy
Doomberg is the name. Doomberg like reflective of your demeanor at all times.
- [59:58]
Doomberg
It's mostly tongue in cheek sarcasm. We're techno optimists and we are defensive pessimists. We spend a lot of time pondering worst case scenario risk and then once those are properly abated, we feel that we're in a position to take more risk. Personally. I'm personally a prepper, for example.
- [60:18]
John
That's good to know. I wouldn't have guessed that Doomberg was a prepper. Actually, maybe I would have. I had one question.
- [60:26]
Doomberg
Do you?
- [60:26]
John
One last question and then I know we're out of time. Would love to do this again soon. I enjoy talking with the chicken. Although your eyes do make me kind of go cross eyed myself, which is a challenge. Do you believe that? We've seen videos online of people filming data centers with generators outside them. They seem to be not exceptionally loud, but loud enough to be mildly annoying. Like, you know, lower decibel than sort of legal limits, but still. Maybe not something that someone wants in their 59.9. Yeah, maybe not something that someone wants in their backyard. Do you think there's any innovation on reducing overall like noise pollution on that front? Or is that to date, you know, at least we talked to somebody yesterday who was like that's the least of my issue, you know. But it feels like something that probably can and should be worked on. Unless we're in Alaska.
- [61:28]
Doomberg
NIMBYism is real and I don't think should be dismissed. And I think local concerns are always worth listening to, especially if you want to be durable as a good neighbor and as a, as an industry that has, you know, persistence.
- [61:43]
John
Yeah, historically like factories were very ugly, but they provided a lot of jobs. And so if you come through and you're like, hey, we're going to build a new factory but it's not going to create a lot of jobs, that's not a super compelling pitch.
- [61:59]
Doomberg
And it's going to be loud, you know. So I assume that the diesel generators are there for backup power predominantly.
- [62:05]
Jordy
Oh yeah, that's what we're looking at. Yeah, that's right.
- [62:08]
Doomberg
And I would suspect that there's all manner of venture backed companies pitching stationary batteries. You know, a stationary battery for backup at a data center is a different problem set than say a battery for an electric vehicle. Which gives you some more degrees of freedom in design than as you know, because with a car for example, you care a lot about gravimetric energy density, whereas you might have different CTQs for a battery set up to provide backup power for a data Center. And so there's lots of people working on it. I see some private deals floating around in our own personal lives. Look, the speed with which this revolution is unfolding means that you're going to break a few eggs, you know, like we were talking about earlier, you know, move fast and break stuff is happening. It's real. And you'll see local communities embrace it because there are jobs, construction jobs and, you know, so on that come with these things. And they're not all yet staffed by robots,
- [63:05]
Jordy
chicken, eagle eggs, or both. What are we breaking down?
- [63:08]
Doomberg
I'm in the egg business. You know, it's a renewable resource for where we are.
- [63:12]
Jordy
It is a renewable resource. It's an optimistic.
- [63:14]
John
Last, last question. Do you think California will be producing more or less oil in 10 years than it is today?
- [63:21]
Doomberg
Oh, way more. Yeah. They're heading for a big crisis and, you know, California needs to drill more, refine more, and connect pipelines to Texas. And I do think, I think one of the big laments of the Trump supporters is that this Warner End may have squandered the opportunity to get domestic energy projects like that over the line. Where he had political wind at his sails. We'll see. But I think. Let's put this. Well, I'll leave you with this, please. California has as much oil and gas as Texas. And the reason why Texas is a global energy superpower and California is a flaccid energy vassal is little more than politics. And you get a big enough energy crisis, politics is easy to wipe away.
- [64:06]
John
Yeah, I had the pleasure of having dinner with a guy who had basically like an oil drilling SMB in California for like a decade and then ended up shutting it down about a year ago because of some new regulations. And he was just sitting there being like, I don't know, you know, just kind of at, at a loss because he's like, we use so much oil. We, we depend on it. We should be making it here versus just importing it, so.
- [64:32]
Jordy
Well, thank you so much for coming on the show. This was a pleasure and we appreciate it. Guys, rest of your day. We'll talk to you soon.
- [64:39]
Doomberg
Awesome.
- [64:39]
John
Thank you so much.
- [64:39]
Sahir
Thanks, guys.
- [64:40]
Doomberg
Talk soon.
- [64:41]
Jordy
There's a good note for the listeners. If you're looking to build a diesel refinery out in Malibu, reach out to me. I'm happy to finance it. Won't be a problem. We'll build a massive diesel refinery. Right now. George is not paying attention. Westinghouse, they make nuclear reactors. We are in an AI boom. We are in an energy crisis. What do you think the stock's done over the last six months? Down completely flat, up 0.4%.
- [65:11]
John
Perfect store value.
- [65:12]
Jordy
Anyway, we have our next guest, Sahir from Porous. He is the co founder, the founder and CEO. Welcome to the show. How are you doing?
- [65:19]
John
Good.
- [65:19]
Sahir
Guys, how are you doing?
- [65:20]
Jordy
Fantastic. First time on the show. Please introduce yourself, tell us what you're building.
- [65:24]
Sahir
Yeah, thanks for having me. So today we are publicly announcing for the first time our company for us, which has raised $160 million from Thrive Capital, General Catalyst, etc.
- [65:36]
Jordy
This is out of the gate you have. They're coming out of stealth with a $1 billion valuation. Congratulations. That's amazing.
- [65:46]
John
I usually give this advice to founders. Don't talk about what you're doing until you're a unicorn. Just focus on the basics. Don't worry about the news, don't worry about the media. No, it's actually true underrated strategy if you can pull it off.
- [65:59]
Jordy
Yeah, but let's talk about what you're actually building. Talk about the business, talk about the development, maybe a little bit of the history that went into building the company, deciding to start the company.
- [66:09]
Sam Blonde
Yeah, sure.
- [66:10]
Sahir
So what we do today is we help people get access to medicine faster, easier, cheaper, most impactful for people with high costs and complex conditions. I think things like autoimmune diseases, COPD cancers, anything where the drugs are unaffordable without insurance coverage or financial assistance or complicated supply chains. We might take a doctor and patient, weeks of phone calls and research or paperwork, get their medicine on time affordably. What we're doing is using AI to take on all that complexity and abstract it from them so they have their medicine without any of the burden falling on their shoulders. But we do all of that entirely for free because it allows us to build a large network of doctors, patients and the data and systems between them. And we're then using that network on the other side of our business to partner with life science companies. Think companies like Pfizer, Lilly, Johnson and Johnson helping them develop and bring to market new drugs faster and more efficiently. So it's really a two sided model.
- [66:58]
Jordy
Okay, two sided model. I feel like every time I talk to health care it's like 10 sided model with like insurers and healthcare networks and doctors and then the hospitals have private equity back and they have a different set of incentives like who? Who are you? Are you cutting anyone out? Who are you not interfacing with? Are you interfacing with insurance or not? Is that a deliberate choice? Will that change over time, no, we.
- [67:20]
Sahir
So that's actually part of why this is such an impactful product for the core users. So we sell the doctor's offices as free product to help them automate all the complexity involved in dealing with all these other pieces. So think the insurance companies, the PBMs, the pharmacies, any other aspects. And really the goal is to automate every process that involves them working with those folks externally so they can focus on treating their patients and not have to worry about all that complexity under the hood. We interact with all those folks to kind of push things through the system, but it puts us in a position where we are kind of at the center of each individual transaction and have kind of a unique view into what's going on. And that's what sets us up. Then partner with these life science and biopharma companies to help them in a unique way on bringing to market new therapies.
- [68:02]
Jordy
Have you developed fax machine superintelligence yet?
- [68:07]
Sahir
I would bet that we have some of the best fax AI.
- [68:12]
Jordy
No way. And that's both on. Is that both on sending and then receiving and transcribing OCR and understanding and then putting in some sort of database? Like, are you bidirectional in your faxing?
- [68:24]
Sahir
We are bidirectional. There's like a pretty decent chunk of transactions that can only go through fax.
- [68:29]
Jordy
Yeah.
- [68:29]
Sahir
And reality fax is actually a considered HIPAA compliant, so you have a lot of leeway there as opposed to in other transactions. But it's also very reliable. If you can't get someone on the phone, you don't have their contact information, you can almost always find their fax number publicly. So despite the fact that it seems insane, it's a shockingly reliable form of communication in a system.
- [68:47]
Jordy
Yeah. And so what else is enabled or accelerated with AI? Because I can imagine you can use AI to build business logic and software. Like you can build SaaS faster for deterministic workflows, but then you can also do sort of agentic things. When I hear about like finding someone's fax number online, that sounds like, yeah, you could Google it, but that's usually a person. There's not a really, really an API, but with an agent, there sort of becomes an API. And so where are you doing agentic tasks on an ongoing basis versus using AI to develop sort of SaaS?
- [69:24]
John
Yeah.
- [69:25]
Sahir
So there's really two layers we think about and what makes the problems hard. The first is kind of what you're describing, a genuinely hard set of agent Problems, you're navigating this multi step path dependent process where there's almost never an obvious correct answer. And so it's usually not even cataloged anywhere what you're supposed to do or what the right answer is. Sure, you're working with imperfect information every turn. What insurance does someone have? What does it cover? What pharmacies work for this specific drug? What approval criteria exist? What medications have this person tried before? And you're interacting with all of that, like you mentioned, through faxes, phone calls, poorly designed websites, and scattered information. So that's kind of one huge piece of it. The second is a set of really complex ML problems where you're using dozens, sometimes hundreds of pages of medical records per person to answer very precise questions about someone's medical history across thousands of medications and diagnoses, dozens of subspecialties, and tens of thousands of doctors who all document and write notes about their patients and diagnose them and treat them differently. And so that same capability is what powers everything from navigating insurance authorizations to identifying whether a patient might be eligible for clinical research. That system kind of never stops evolving, right? New drugs, new guidelines, new insurance policies. And so as we're building and scaling, the complexity keeps increasing and you're kind of constantly regeneralizing everything you built in your platform.
- [70:44]
Jordy
Last question for me. Talk about the data side of the business. I imagine that there's, you know, you want every doctor's fax machine number that's a data problem. You might be able to scrape it, you might be able to buy it. There's also the data that goes into maybe fine tuning models, maybe just setting up models for success, giving them the correct context. Like what is the shape of the data problem and how is it evolving?
- [71:09]
Sahir
Yeah, I mean, it's kind of like what you described. It's through every single step in the process. You can imagine where we sit, we see this from end to end, right? So we see everything from the clinical information, how the doctor made their diagnostic decision all the way through to logistically what got stuck in the system and prevented someone from getting their medication or resulted in being late. All of that's really relevant in understanding, not just a how do we translate that into helping us automate more effectively and have more predictability in every step the process, but also in then informing decisions that our partners are making on how to kind of move therapies forward in the research and development process, how to think about launching them, where to allocate their resources so those medications can reach as many people as possible.
- [71:48]
Jordy
Got it?
- [71:49]
John
How big can the business be?
- [71:52]
Sahir
So I mean there's two parts, right? We think this can be the most important company in life sciences. Our goal number one is ubiquity, right? Every doctor's office and patient in the country should be using our product. That position doesn't obviously just let us eliminate friction for more people, but it puts us in a position to accelerate every step of bringing new therapies to market. On the other side, right, when a
- [72:10]
John
new molecule is ready, do you become basically just like is the legacy, like legacy version of this and maybe in another industry, like a distributor, is that
- [72:20]
Sahir
like the less distributors are like a partial analogy. But a lot of what we're going to do is not the actual physical supply chain, but really helping on all kinds of decision and actions around that. So think about when you have a new drug, right? There's a ton of stuff happening right now in AI drug discovery. All of that is translating into more and more hypothetical molecules. But how do we translate those molecules into production? Real life, mass market medicines? From the moment a new molecule is ready to test in people, all the way through all those steps, you have to figure out how do you identify the right clinical trial sites, which patients do you recruit are not contaminated by their medications? When a drug launches, which doctors are the most patients that look like the patients that did best in the phase three trials and therefore the right, you know, early adopters and can benefit the most. As it scales, how do you kind of use real world usage to identify where there are new conditions where the same drug can be effective or there are gaps in the market. That full loop from clinical development through mass market access hasn't really been possible for. And we think we can kind of be the main chassis through which that happens. Today we are, as you can imagine, growing in a ton of different specialties and the kind of first specialty we launched. We're already kind of approaching a third of the country. So you can imagine you really kind of can get really far along and become the best partner to facilitate all these decisions.
- [73:29]
Jordy
Well, congratulations on the progress and congratulations on the round. Thank you so much for coming on the show.
- [73:34]
John
Great, thanks for having me. First day of media seems very dialed. What were you doing before this?
- [73:40]
Sahir
So I used to work with this company called Oscar, if you're familiar with it. Was that technical?
- [73:43]
Jordy
That makes so much sense.
- [73:44]
John
I was thinking, I was wondering this whole time, I was thinking this whole time you must have been at Oscar.
- [73:48]
Sahir
Thrive Universe.
- [73:49]
John
Thrive Universe.
- [73:50]
Jordy
Thrive Universe.
- [73:50]
John
Cinematic Universe.
- [73:53]
Jordy
You and the SF giants, similar portfolios. Fantastic. We'll talk to you soon. Goodbye.
- [73:58]
John
Cheers. Thanks, guys.
- [73:58]
Sahir
Take care.
- [74:00]
John
Before our next guest.
- [74:01]
Jordy
What do you want here?
- [74:02]
John
We actually are running behind, so we're gonna bring in the legend, the living legend, Sam Blonde.
- [74:09]
Jordy
Let's bring him in from Monaco. Sam, company's Monaco, calling in from San Francisco, I assume, but get that cash
- [74:18]
John
register ready out a CRM. No, don't count it out, guys.
- [74:23]
Jordy
Yeah.
- [74:23]
John
Great seeing you.
- [74:25]
Sam Blonde
Thank you so much for having me.
- [74:26]
Jordy
Of course.
- [74:26]
Doomberg
Round two.
- [74:27]
Jordy
Round two.
- [74:28]
John
Do you wait by. By the way, do you leave?
- [74:31]
Sam Blonde
Did you guys want to hear the gong?
- [74:33]
Jordy
Yes.
- [74:33]
Sam Blonde
Are you under the gong?
- [74:34]
Jordy
You have a gong? Show us the gong. You have a gong?
- [74:37]
Sam Blonde
Hang on, let's see if we can.
- [74:38]
John
You have a bigger gong than us?
- [74:40]
Jordy
It's.
- [74:45]
John
This is amazing.
- [74:47]
Jordy
Hey, team, let's hit the golf.
- [74:49]
John
Congrats, everyone. Okay, I have a question for you. Do you leave up the whiteboard behind you to just kind of torture and mess with your competitors? So they're like screenshotting it and trying to.
- [75:02]
Jordy
People are trying to reverse engineer this right now.
- [75:04]
Alex Shahn
Gibberish.
- [75:04]
John
Like you just.
- [75:07]
Sam Blonde
It's mostly art at this point. It's kind of funny. It is a cool wall because it goes like all the way around. Yeah, it's big, like whiteboard wall. There is something up here that still has dates from last October.
- [75:20]
Jordy
Okay.
- [75:20]
Sam Blonde
So I don't know that it's like current, currently functional, but we use it
- [75:24]
Alex Shahn
every once in a while.
- [75:25]
Jordy
It's seen some more, but. Yes. Kick us off with the news. What happened?
- [75:30]
Sam Blonde
Let's see. Well, thank you for having me on round two. Great seeing you both. And we were so fortunate. We launched in February. Things are going really well. Jack Altman was an investor through Alt Capital, and so he receives the monthly updates. We've known each other for a long time now, and recently, you know, the businesses is performing, I think better than we would have anticipated. Last time we caught up, which was sort of like mid February, and Jack reached out and said, we're sort of interested in doing something with you and in the. The space. And we caught up and I think this is just sort of the dream round for us. You know, we did Founders Fund in the Series A. That's a firm that John, you and I have a lot of history with. Couldn't have ramped a better round for the Series A. And then we're. We're repeating it with the B, I think both with benchmark leading Founders Fund tripling down, Jack joining the board. It's awesome.
- [76:22]
Jordy
So I thought, I thought this was an EV Randall special. I thought you were just like, I got to make some money. My friends, former colleague. But interesting as Jack Altman. Makes sense though. I mean, Lattice, a lot of experience, like adjacent to this space. A lot of, lot of career lineage there. But take us through the product. How has the company evolved? What's traction like?
- [76:42]
Sam Blonde
Let's see. Launched in February. We entered February pre revenue. We had some design customers. It's tough to do this thing where you like predict how the first few months are going to go because you have no data history. On February 10th, literally no one knew who Monaco was because didn't have LinkedIns that were up, we didn't have a website was up. We went from sort of like this, this deliberate stealth mode with design customers where there are a small handful of people that we were partnering with to build the product, to trying to make as big of a splash as we possibly could. And I think like, you know, we sit here three months later in May, and we sort of blew past all of the sort of business performance, economic expectations that we had in that period of time measured by like, you know, number of customers, revenue, customer sentiment, which is, is maybe the most critical of those things. But, you know, just, just sort of couldn't have hoped for a better start to the business.
- [77:39]
Jordy
Okay, in, in go to market, in sales, I imagine that there's a ton of processes that you just want to make reliable, more efficient, all of that. And I'm sure you're executing on that. But I'm interested. Has anything stuck out to you that's sort of like the Studio Ghibli moment for this, for this sector. Like, you know, image generators came out. It was like, yeah, you can make a picture of a horse or a cat. But then like there was this thing where it was like, oh, no one really knew that that was coming. And then all of a sudden it was like this delightful new experience. Now you can like turn yourself into a cartoon if you want. Is there, is there some like, net new process or like your customers, when you see them use the product, you're like, oh, they're doing things a little bit differently. It's not just sending the email. It's not just the CRM management. It's not just all the other pieces. It's something that like, oh, this is uniquely enabled by AI.
- [78:31]
Sam Blonde
Yeah. I think there are three things that come to mind that differentiate Monaco relative to anything else in the market. And the third one is sort of
- [78:39]
John
the, like, it will shock us.
- [78:41]
Jordy
It will shock us.
- [78:42]
John
The third one will shock us.
- [78:43]
Jordy
This is good.
- [78:44]
Sam Blonde
It'll be the like Ghibli moment to use Coogan's language. The first two and I won't go like super deep on these things. I'll time box this to 30 or 40 seconds. The first two, we're an all in one. So we replace traditional or legacy CRM. These are your salesforces, HubSpot's adios. We also replace all the disparate tools that integrate to those traditional CRMs over APIs. Yeah, and so we're an end to end platform or an all in one maybe like the rippling version for go to market. So that's like the first category that in and of itself isn't like the Ghibli moment. The second category is that we are AI native. You know, just sort of definitionally we started, let's call it post chatgpt the way that we think about being AI native agents are the first line of defense. The things that historically speaking sales users like me, people In Rev Ops, SDRs, those workflows that we were doing with manual or human labor we now have agents doing. And you should think about the user of Monaco as having this like front row seat to all of the work that the agents are doing on their behalf. So that's number two, the third thing and this one is like a little bit contrarian like Peter ism. And it is maybe the thing that I think we have a unique competitive advantage in. It's very difficult for any of our competitors to get right or even be able to do. And that is, you know, there's this thing right now that's like the forward deployed, the four deployed engineer. The FD is like the most valuable asset in deploying AI successfully across enterprise. And you see these, you know, OpenAI and anthropic, investing billions of dollars in these almost like Accenture style consultant type type companies. Well, we sort of invented this concept of the forward deployed A and every customer that we have is paired with a startup sales expert, somebody that has deep experience doing startup go to market. And you should think about a lot of our customers. These are seed and series A startups that one don't have a lot of experience in go to market. A lot of technical founders and technical early teams. And so this is a very complimentary skill set. But to just definitionally they have no experience working with the platform and agents that we have in Monaco. And so that buffer that layer between the customer and the technology itself, that is Our forward deployed AE that is some of like the secret sauce for us in terms of making Monaco work better than any of the competitors that you try and just like deploy these agents and the technology in the wild without anybody making sure that you're successful
- [81:19]
Jordy
all in one compound startup rippling philosophy. I imagine that eventually you'll get to a point if you're not there already, where some big company will come to you and say, but we're not ripping out this thing and you have to build a connector. Do you have a strategy for that? Or is that a moment where someone comes to you and says, yeah, we have this weird niche B2B SaaS product for just our industry that we need to keep around. Is your philosophy. Agents will connect or you'll just go and rebuild that.
- [81:49]
Sam Blonde
We have an open API read write API ability to do Claude mcp. And so we will integrate and do integrate with third parties. Examples would be like we have a granola integration, we have a slack integration, we have a G suite integration and many more. We don't today have native sort of traditional CRM integrations. And think about the category of sales technology. The market leader today is Salesforce.
- [82:15]
Jordy
Yep.
- [82:16]
Sam Blonde
And Salesforce is a system of record. And then you think about other system of record companies. There are some large players that exist in the space. The other type of sales technology company is a point solution. These are tools that integrate into the system of record. And if you think about the outcomes, the terminal value use the sort of market caps of these point solution type companies. They are less interesting to us to sort of be like, I think this world's word is politically correct. Now. We don't want to be the tallest midget. We want to be the market leader in sales technology. And in order to be able to do that, we have to disrupt the system of record companies today, like the Salesforces of the world. But the space will become much larger than it is today because we are not just taking the IT budget away from companies that today are spending on platforms like Salesforce. We are taking the labor budget. And so Monaco is far more expensive than the traditional competitors that exist in the space. And it's because we're not a replacement for the traditional CRMs, which we're not just a replacement for the traditional CRMs. We were a replacement for you hobby, hiring a bunch of people to do this for you in a deeply integrated platform.
- [83:29]
Jordy
Okay, where can people go to get started? You're in public beta.
- [83:35]
Sam Blonde
We're in public beta. Ga in the next couple months, I Would love to come back, so that would be fun. We'll gong.
- [83:43]
John
Who's the best sales rep at Monaco? Who's selling the most guys?
- [83:49]
Sam Blonde
I can't do that.
- [83:49]
Jordy
You can't pick a favorite.
- [83:51]
John
No. Isn't it objective? Isn't it objective?
- [83:54]
Jordy
There is an objective truth. You can't leak it right now. They'll get poached. Mark Benioff will be flying him out to Hawaii.
- [83:59]
Sam Blonde
Yeah.
- [84:00]
John
It comes to him at the Dolphin.
- [84:02]
Jordy
Yeah.
- [84:02]
John
He'll do his little thing.
- [84:03]
Sam Blonde
We don't have a worst sales rep, but I should say that name. If we did, we don't want to be.
- [84:10]
Jordy
Yes.
- [84:10]
Kevin Hartz
Yes.
- [84:10]
Jordy
Yes.
- [84:11]
Sam Blonde
No, this is a little. This is maybe, like, philosophically against what I would recommend for folks. We are in the fortunate position that we are just inundated in demand.
- [84:21]
Jordy
Mm.
- [84:22]
Sam Blonde
We're still on team goals. The whole team is, like, really working with one another just to try and manage the demand that we have. And so we actually don't even yet. To your point on, like, isn't it objective if we don't have a leaderboard?
- [84:35]
Jordy
Yeah.
- [84:36]
Sam Blonde
It's just winning.
- [84:37]
Jordy
So what you're saying is Marc Benioff
- [84:38]
John
has to buy the whole company.
- [84:39]
Jordy
Got it.
- [84:40]
John
How has the billboard campaign gone?
- [84:44]
Sam Blonde
It's great. You know, I think these things we do. We do the launch videos and a bunch of the, like, you know, launch posts and those sort of things that hopefully get amplified. We do the billboards. Our billboard strategy. Right now, we're just doing like, a dollar symbol and then monaco.com a little provocative, and we have these big poker tournaments and a whole bunch more.
- [85:03]
John
Who won the. Who won the poker tournament?
- [85:06]
Sam Blonde
It was the CEO of Sendoso. His name's Chris Rudiger.
- [85:11]
John
Nice. Nice. Another sales.
- [85:13]
Jordy
All of these things.
- [85:14]
Sam Blonde
It's sort of like one plus one plus one plus one. It, like, equals 10. It's like the billboard. A poker tournament that compounds the post, that compounds the trucks that are driving today. We have a plane, a banner. A banner trailing Monaco behind it. I love this.
- [85:31]
Jordy
This is blimp adjacent. We're huge fans of this. Anyway, thank you so much for coming on the show.
- [85:37]
John
Congratulations on and always counting down the
- [85:41]
Jordy
days till GI Talk to you soon. Have a great day.
- [85:44]
Sam Blonde
You guys are the best.
- [85:45]
Jordy
Thank you.
- [85:45]
John
Great to hang, Sam. Goodbye.
- [85:47]
Jordy
Up next, we have Kevin Hartz from A Star. He's the co founder and general partner.
- [85:52]
John
He's a star.
- [85:52]
Jordy
He is a star. Is that why he named it a star? He's like. I think of myself as a bit of a Star Kevin Hartz. Welcome to the show. How are you doing?
- [86:02]
Kevin Hartz
Hey, guys. I'm doing great. So great to see the both of you. First time on the show.
- [86:06]
Jordy
Welcome to the show.
- [86:08]
John
That's crazy.
- [86:08]
Jordy
It is crazy. I feel like we've talked about so many. We've talked about so many of your investments and so many of the projects you worked on.
- [86:15]
Kevin Hartz
Well, it's funny you say that because I'm sandwiched between Sam in Monaco and Judgment Labs. And we have a. A star has a small check in each one of those. So very comfortable in this position.
- [86:28]
Jordy
The man behind the curtain with a curtain behind him, actually. But that's not. We're not here to talk about Judgment Labs or, or Monaco. We're here to talk about a star. Give us the latest news. What is the update we with the fund?
- [86:41]
Kevin Hartz
Well, we've, we've just announced today that, that we've raised our third fund. It's 450 million.
- [86:48]
Jordy
Let's do it. Okay, so seed fund, $450 million. So, like one AI lab, is that the plan? Or you're going to split this up between, like two companies these days? I mean, valuations are high, but what's the strategy?
- [87:04]
Kevin Hartz
It's a good point. It would be, you know, if it was a lab, it would probably be just about one company. No, we are, we are sticking to our knitting. We are generalists. So we're looking at all different, you know, all different types of businesses. Certainly in this super cycle that we're having right now, it's driven by AI and the application layer of AI and we're investing pretty aggressively in that space. But, you know, our checks tend to be 3 to 5 million, although we, we go higher up to 10 and so on. Now certainly there's a neo lab that will raise a big round, but that's really in the 1%. We're still in this core market.
- [87:46]
Jordy
Yeah. Where are you fishing? What lakes are stocked these days? Are you fans of the mafias or the universities or the dropouts? There's so many different pools of entrepreneurial talent. Where are you finding success? At sea need.
- [88:04]
Kevin Hartz
Yeah, that's the right question is, is how to source this talent, how to be in front of everyone else, how to meet these founders when they're still working in their gigs or still in college or in sometimes even high school. I will say ages have declined on average. You know, like you're now seeing more and more founders that are teenagers. And, you know, I like to think of it as having seem like we had Bill Gates and Steve jobs in the 70s when they were teenagers, they started their company and that was such an anomaly. And you fast forward to today and it's really dramatically changed. To answer your question, I think of folks like Corey Levy at Z Fellows, who's just terrific at finding dropouts. And more and more, they're high school dropouts as much as they are college dropouts.
- [88:59]
Jordy
Yeah, it's remarkable when you meet a founder and it's like, Corey did the deal like three years ago and you're like, just getting started.
- [89:06]
John
How are you thinking about incubations with this new vehicle? Is that going to be opportunistic? Do you expect to have it, or do you expect to have kind of a certain amount that you're aiming for? What's the philosophy?
- [89:18]
Kevin Hartz
Well, incubations are. I mean, I don't like the term incubation. It kind of sounds like this, like, kind of sort of contrived venture. We like to find founders and spend time with them and, and help them kind of develop ideas. And we've done this a couple of times. We did this with a mortgage AI business that's run by a founder named Michael White, who came out of block. And that business has grown substantially. And we've done that very recently with a company called Sauron, which is a physical security business. So starting in the high end of alarm systems or monitoring systems, that is really just a bet on. You know, you see all this stuff happening in Autonomy, autonomous cars and robotics, and a lot of money is invested in that space. And when we see that happen, you know, that usually means there's like dropping price of LiDAR, cheaper sensors and the like. And, you know, that means an opportunity in this case, in the home security space.
- [90:27]
Jordy
Wait, is there an application for LIDAR and home security that I'm not aware of?
- [90:32]
Kevin Hartz
Absolutely. You. If you have sensors around LiDAR, sensors, you can know exact distances. You can track objects more effectively in different weather. That doesn't become available when they're so expensive, but it absolutely becomes a very meaningful aid to understanding a scene when the price drops.
- [90:57]
Jordy
That's fascinating. You obviously have an incredible track record in Silicon Valley, but I'd love to know about the mood among LPs around a $450 million seed fund, because we talk to a lot of the mega funds and then we'll talk to Solo gps. We had one on the show last week that raised a $50 million fund. And I'm wondering about our LPs, looking for a particular strategy with that size of fund. What's the appetite. Like, how do you talk about, like where you're positioning for the long term? Just any of the dynamics around that particular fund size at this particular time in the market?
- [91:38]
Kevin Hartz
Yeah, great question. It was a step up. Our first two funds were about 300 million each and we went up to 450. But we do have five of us on the investment team and we're expanding the team. So if you look at, you know, kind of divide the amount of capital by the number of those putting that capital work over the period of time, over a couple of years, we've been successful and you know, our first two funds are in top 5%, you know, kind of category. Thank you. I've got it. I'm an, I'm a venture capitalist, so I have to brag a little bit. But you know, we've been very good at sharpshooting, like, meaning like we haven't plowed money and we've really waited for the right companies and spent the right amount of time with these companies and helping them grow. You know, it's kind of expressed in like we have an incredibly high conversion of seed to series A, which you know, if you would imagine, like typically most companies don't even make it past the seed stage, the zero to one phase. And so, you know, we don't want to disassemble our model by spraying capital out there. We think that's very different from the multi stages that have almost this incentive, you know, with, with the fees against very large capital bases. We, we're very opposite of that.
- [93:03]
John
How do you stay collaborative or are your elbows getting sharper with this fund? I mean, we have a mutual friend who has a similar size seed fund. I know you guys have collaborated a ton on deals in the past, but I know you guys are also both very competitive and want to put up top funds. And I'm sure it can get, you know, tempting at certain points of, hey, I could get 20% ownership in this company and I don't necessarily want my, my buddy, you know, it doesn't necessarily benefit my fund to give 10% to someone even if they're a great friend and could also help the company.
- [93:41]
Kevin Hartz
Yeah, it's challenging. Our partner, Gautam, his wife is Christina over at the GP over at Chemistry. And you know, if, if he steal, if he wins a deal over her, you know, like, I can only imagine what would happen. So you know, like, it's, it's tricky, but it is, you know, we see a lot of new funds. I spend a lot of time Backing new funds and helping you know, these fund managers kind of grow and then they get to a point where you can no longer kind of even collie deals, the funds get so big. So you know, in. And we're going into this massive super cycle of an incredible amount of fast paced and a lot of capital invested. I want to say that it's always on our shoulders to find the founders early enough and be the first ones there and just not be in those situations.
- [94:34]
Jordy
How are you thinking about services as a software, the AI economy as expanding beyond software and IT spend? I mean Sam Blond was just talking us, talk to us, talking to us about like the forward deployed account executive and we talked to Long Lake about buying companies that are heavily service oriented and infusing them with AI. And I'm just wondering if there's going to be a boom in de novo companies that are more services sector focused and, and what you're seeing in that category right now.
- [95:09]
Kevin Hartz
Yeah, well, you know, you really have to turn towards Palantir and just give them a nod because this Ford deploy engineer thing back in 2004 or five was like universally hated by the world and the investors and so on. And they really gave us 20 years of a look at how to, you know, make that incredibly effective. And generally though, I think that it's in the early stages that this kind of custom work is, is done and you know that that may lead to kind of automating things over time. And then the flip side that you know to, to critique it would be simply that, you know, if you look in other kind of boom eras, the consulting services really did well. When the markets pulled back, they were hit almost the hardest. So you know there's, there's certainly a trade off there. But to get new services into these old markets, you know, we're just going to have to get our hands dirty. I don't know but you know, I'm old. So I look at the services industry. Is this like really tough thing we want to replace by software?
- [96:20]
Jordy
That's tough. Second best city to invest in and I assume you'd say sf.
- [96:26]
Kevin Hartz
It has to be New York.
- [96:28]
Jordy
New York.
- [96:29]
Kevin Hartz
Yeah, I've been very impressed with New York. We have a number of companies there from company called WAP in the creator services side to Antioch, which is physical AI robotic infrastructure. And I'm just amazed every day. But I guess it makes sense that you're able to pull talent from the Northeast out of college and it's still a big financial center. There's a lot going On. So it very much in my mind is a number two. Nothing's even close. Not Austin or anything else.
- [97:06]
Jordy
Yeah, that makes sense.
- [97:09]
John
How often do you find yourself backing teams that are building things that you know or you expect could be on the roadmap of the labs? Because in certain instances, even if the labs care about a certain part of the application stack, that doesn't mean you just shouldn't still back a team. Right. It's just a new version of. What if Google does this or something along those lines.
- [97:34]
Kevin Hartz
I want to say that the startups, you've always got to hope and pray and expect that the startups are going to win. This is the big question of our era is do we go ahead and put all these apps forward or build all these applications only to be steamrolled by the big labs. We saw that happen in the 90s. Bill Gates and Microsoft would watch and see what people would build on Windows and then they build their own disk compressor and give it away for free. So, you know, this is like a pattern that. Are these monopolists? Do you know in this case? And you know, our companies need to show that they can stand on their own two legs. You know, we're bringing businesses like Decagon, which is a customer service. It is the best product in the market and they have to stay the best and. And we know they can do it.
- [98:36]
Jordy
Yeah, that makes no sense. Well, thank you so much for coming on the show. Congratulations on the round and we're honors
- [98:43]
John
that you got some more.
- [98:44]
Kevin Hartz
Great to see you.
- [98:45]
John
Yeah, great to see you.
- [98:46]
Jordy
Have a great rest of your day. We'll talk to you soon. Goodbye. Up next, we have Alex Shahn from Judgment Labs, an A star portfolio company, apparently. But here to talk about a new round from Lightspeed Venture Partners. Alex, how are you doing?
- [99:01]
Alex Shahn
Doing great, guys. Thanks so much for having me on board.
- [99:03]
Jordy
Thanks. Great.
- [99:04]
John
Also nice of him for him to open for you.
- [99:08]
Jordy
Yeah, exactly.
- [99:09]
Alex Shahn
Yeah, some nice guys over here.
- [99:11]
Jordy
He only gave us a little bit. So tell us a little bit about yourself and the company.
- [99:15]
Kevin Hartz
Yeah, happy to.
- [99:16]
Alex Shahn
And before I do that, we got
- [99:17]
Kevin Hartz
a little bit of a crowd here, which I'll take you guys out to
- [99:20]
Jordy
come and be with us in person
- [99:22]
Alex Shahn
here out in the office in Financial District.
- [99:27]
Doomberg
Whoa.
- [99:27]
John
Let's go. Great to have you here with us,
- [99:36]
Kevin Hartz
Team Financial District and the rest of sf.
- [99:39]
Alex Shahn
But thanks for having me.
- [99:40]
John
Amazing. Explain the orange suits.
- [99:43]
Alex Shahn
Yeah, you know, we are judgment orange. You know, it's the color of the company and we like to be proud about that. And so, you know, we wear it loud and proud. You'll catch us running the beta breakers race in sf, hopefully winning it with the whole team. So be on the lookout for the orange suit.
- [99:58]
John
It's still such a good strategy to pick a color that doesn't have a loud startup already kind of anchored around it. Just own it.
- [100:07]
Jordy
Good luck going up against Facebook blue or Coinbase blue. Much easier to stand out with a funny color, yellow. Anyways, please introduce the company. Tell us about the progress, the news, news, everything.
- [100:22]
Alex Shahn
Thanks a lot, guys. You know, Judgment Labs is the platform for improving Long Horizon agents from production data. We sort of started the company with this thought process that these autonomous Long Horizon agents are going to consume the vast, vast majority of the economic value that AI is set to create across the next decades in the economy. And you know, we're already seeing the first sets of those things happening. Developer productivity is skyrocketing at rates that I don't think anyone in including myself, coming from a research background, could have anticipated. And yet that sort of progress is also barbelled in the sense that in many industries we don't see the same progress on these Long Horizon agents. And so typically that's to do with a lot how verifiable or semi verifiable the outcomes are and therefore how easy it is to train those agents. But you know, we believe that regardless of what agents you're building, this single source of truth to improve them to get the to that point is going to be production data. You know, during the runtime of these agents, these Long Horizon agents emit so much production data, ranging from their reasoning tokens to the tools they call, to the retries and their memory and all the things more that are going to come out on these agents. And so that data just forms the cleanest record of how those agents behave with customers, software and their broader environments. And when, you know, you process that right, we can sort of find out what users actually ask for and struggle with which failures actually happen in production and where agents actually find breakthroughs to solutions that we could have never predicted. And so therefore the goal for us as developers and sort of people that are going to bring about this agent revolution is to operationalize that production data for all these agent companies out there to create these flywheels that convert distribution advantages of, you know, people like Sam into their product moats that are going to last them for a long time, time. And so we've been very lucky to partner with a lot of people across the journey of the company coming out of stealth. Today has been an amazing journey and you know, Nova backing us at the pre seed all the way to Lightspeed backing us at the seed and Lightspeed doubling down to co lead the series A with Green Oaks.
- [102:23]
Jordy
What's the sweet spot customer look like right now?
- [102:27]
Alex Shahn
So we love partnering with people who are building, you know, agent native companies and focusing on long horizon agents.
- [102:34]
Jordy
And so I can break down startups like scale ups like series B companies.
- [102:38]
Alex Shahn
Like what's the primarily agent native startups in that range of like Series A to Series B is our sweet spot. We focus on these companies that produce a lot of production data and want to figure out how to use it.
- [102:49]
Jordy
And is it particularly focused on knowledge work and sort of like the next iteration of AI agents or are you doing coding work as well?
- [102:58]
Alex Shahn
Both, definitely a lot of coding work. We actually serve agents across the stack. Sam and his company Monaco are customers of ours and so different vertical agents require different versions of improvement. And so we work across the stack, but mainly on these new age long horizon agents that sort of autonomously do tasks end to end.
- [103:19]
Jordy
Yeah. What are you helping with specifically? Because I imagine that if Monaco builds an AI SDR and an agent that goes and runs around and figures out everything about a customer and builds scripts and battle cards and all the stuff that they do, all of that's logged, they have it somewhere. Where's your value add? Like why are they a customer? Are you helping them actually change production designs or is it more about organizing and unifying data for them to go improve their own products?
- [103:52]
Alex Shahn
Great question. Mostly the latter. So if you think about in practice, improving those agents is really challenging for teams. And so like most teams with all those logs that you're saying that they store, have to sort of manually comb over these tables and tables of data. And so whenever they find a failure case, the question often the case is not just like, is this a problem? But it's, you know, how frequent does this happen? Are our most important customers affected? What task types are most affected? And so being able to chop up and parse this data using other agents, in fact to sort of pinpoint the exact failure modes and therefore the exact part of, you know, an agent framework or an agent harness is exactly what we help these companies do.
- [104:31]
Jordy
Interesting.
- [104:33]
John
Jordy, Next, breakout agent category use case. Yeah, coding.
- [104:38]
Jordy
Yeah.
- [104:39]
Alex Shahn
You know, we tend to believe here that at judgment we think that the domains that are going to get solved first are proportional to those that are most verifiable. Meaning that if you can check the answer you know, this is smallest feedback loop. Exactly. So I would say that a lot of these domains are going to be the ones that are quantitative. You know, these are things like, you know, you know, the coding agents are easy. You can imagine the site reliability and ticket resolution agents next and then the ones that do math. But you know, we are increasingly seeing a lot of progress in non verifiable domains, campaigns as well. Stuff that you would traditionally think is like not very easy to quantitatively measure, such as like finance and legal and even sales. To say what Sam's agents are doing are incredibly, you know, fast in terms of how the teams have been able to use their data to improve their agents.
- [105:26]
Jordy
Tax and accounting seems pretty verifiable and like closed loop versus, you know, like, I don't know, long horizon. How did this cancer drug respond to someone over over a decade? Like, it's very hard to close that loop. Well, congratulations on all the progress, Jordy. Any other questions?
- [105:41]
John
This was great.
- [105:42]
Jordy
Thank you so much for watching the show. Go orange. Great to talk to you, Alex.
- [105:45]
John
I'm sure you'll be back on. Sounds good. Congrats to the whole team.
- [105:47]
Jordy
Have a good day.
- [105:48]
John
Cheers.
- [105:49]
Jordy
Up next we have Glenn Wise from cinder. He's the co founder and CEO. Good. Nominative determinism. We got a wise man in the waiting room and here he is. How you doing, Glenn?
- [106:04]
Glenn Wise
What's going on, guys?
- [106:05]
Jordy
Good. Welcome to the show. Thank you so much for stopping by on such a big day. Introduce yourself, introduce the company, tell us the news.
- [106:13]
Glenn Wise
Yeah, I'm Glenn, the founder CEO of Cinder. We just raised 41 million.
- [106:19]
Jordy
Announcing it today.
- [106:20]
John
Whoa, whoa, whoa.
- [106:23]
Jordy
Cool guy. Good news.
- [106:24]
John
Right to it.
- [106:25]
Jordy
Yeah.
- [106:26]
Glenn Wise
Fantastic.
- [106:27]
Jordy
Radical ventures. I got a buddy, Rob Taves over there.
- [106:31]
Glenn Wise
Yeah, they're great guys over there. Yeah, really great team. But our focus is helping companies stop all of the AI powered abuse that's happening across the Internet today. Okay.
- [106:44]
Jordy
Yeah. What does that mean? Because there's like cyberbullying and like mean comments on YouTube videos or live streams and then there's like spam and hacking and cyber attacks and all sorts of crazy stuff.
- [106:55]
Glenn Wise
Yeah. And honestly it means the entire gambit of threats and that's really, I think like what gets missed in this conversation, which is the fact that like they're small, Right. There's small incidents such as bullying, there's large incidents such as like state sponsored espionage.
- [107:13]
Jordy
Sure.
- [107:14]
Glenn Wise
But companies need to respond to all of these. And we've never before seen kind of the scale of threats that we have today. And this was a problem before Jenny. I. But obviously Jenny has made this exponentially worse.
- [107:30]
Jordy
Sure. So it says customers include OpenAI, Spotify, Depop, Black Forest Labs. I'd love to know about how much of this is happening internal to a particular product. Like someone is effectively doing Internet graffiti on like the Spotify comments. We get comments on our Spotify sometimes. They're usually pretty positive, but I could imagine a state sponsored actor wanting to take us down and writing a bunch of mean comments versus and that would be something where you would go to Spotify and say, I can solve your problem internal to your product versus there's a misinformation campaign that's happening on X or Instagram about Spotify and you're notifying them, like what's the trade off there?
- [108:11]
Glenn Wise
Yeah, that's a really good distinction. So we sell directly to the customers themselves so they can combat if there's some horribly racist comment. Sure, that shouldn't be on there. So they can combat taking that off. And so how the platform actually works is that our customers set what policies they care about. So they say, hey, we really care about some of the really big ones. Now AI generated NCII is like AI generated deepfake for it. That's a huge one. A huge issue that a bunch of people see. Obviously anything child safety related anything, any egregious hate speech and things like that, they are able to set these policies on our platform and then we use AI to detect and mitigate it at whatever scale the platform is operating at.
- [109:00]
Jordy
Yeah, how, what has it been like ramping up to some of these bigger customers? I imagine that if you get the fire hose of like Spotify content, that's a lot. Was that a challenge? Like how did you solve that? Obviously there's a lot of off the off the shelf tools, but like how big is the company at this point? How are you able to take on those clients?
- [109:21]
Glenn Wise
Yeah, I mean we were really lucky in the sense that the whole team, the whole founding team came from Meta. And so like we saw a thing or two.
- [109:31]
Jordy
Yeah, we.
- [109:33]
Glenn Wise
And prior to that we were at the US government, so we've seen kind of what harm at scale looks like. And obviously that's kind of like an infrastructure challenge that we deal with, but inevitably it is one actually being able to process data as quickly as possible. That's a big one. Right. So how can we make a decision as fast as possible of whether or not something violates your policies? There's a bunch of techniques there as well as just like being able to handle that scale. Right. We have some customers that have a really large Gen Z audience that all log in at the same time. So that adds some really great kind of distributed computing challenges that the team is working on. That's all part of the fun of building this.
- [110:26]
John
Is there something about this problem that makes companies want to outsource this function? Because I'm assuming at Meta, if you were working on this problem at Meta, you were working on internal tooling and platforms at a certain scale, maybe they end up wanting to do this themselves. But is there themselves? But is there a certain part of this problem that makes it particularly suited for having a partner like Cinder?
- [110:52]
Glenn Wise
Yeah, I think there's a few. I think primarily it's taking the human expertise and really understanding the policy and understanding how to mitigate that policy. Every customer of ours can't be an expert in every single issue that they might face. That right there means that they need to bring people on. And yeah, Facebook, I was on the threat intelligence team there, they have an amazing threat intel capability or they're also Facebook. So they can spend on building out that threat intel capability, but not everyone can or should have to do that. So that's a big piece. And another one that we've been seeing more and more often actually is the third party credibility of going with a company that's also truly a set of experts.
- [111:38]
Doomberg
Right.
- [111:38]
Glenn Wise
And so you're not grading your own homework when you're trying to defend your platform. You have someone else that can bring that expertise in and do that for you.
- [111:48]
John
Totally.
- [111:50]
Jordy
How are you thinking about the actual model choice or just scaling? Because I imagine that there's so many of these TOS violations. You just ask is this TOS violation or threat of violence or something that doesn't conform to any of the frontier models and you're going to get a very accurate result. But that's, that's going to be slow and probably expensive if you're running it over every single Spotify comment or every single upload to the platform. And then you can go open source, cheaper models, faster models. You can also try and run models on Asics or more advanced chips like Cerebras is in the news this week because of the ipo, but there's obviously other providers. But how have you thought about the infrastructure trade offs? And as you scale the service,
- [112:44]
Doomberg
the
- [112:44]
Glenn Wise
thing that is most important for our customers, I talked about policy, it's really evals and ground truth data.
- [112:52]
Jordy
Okay.
- [112:53]
Glenn Wise
And so once our customers have within our platform set what does true look like, right. What does an actual violation look like? Because as you can imagine, these violations are incredibly nuanced.
- [113:03]
Doomberg
Yeah.
- [113:04]
Glenn Wise
And it really depends on what's the platform where they're based, how old are their users. A really classic example is like a gaming company could have two different games. One that is a first person shooter for adults, the other one that's a game for children. Obviously they're going to define a threat of violence very differently.
- [113:23]
Jordy
Oh sure. Even within the company.
- [113:25]
Glenn Wise
Right. And so you need to be able to set ground truth and really set these evals. So then from there you run evals on these models and it kind of depends on are you prioritizing cost or latency or accuracy. Those are basically the three trade offs that we see. You can get really great results now, especially around fine tuning some of these open source models. But what's funny is that obviously these are like these models themselves are trained to not be able to produce this content. And so you do start hitting limitations with these foundation models. And so you can do techniques like model obliteration where you can actually remove guardrails and host them yourself. You can do technique or you can do kind of traditional classification, again depending on what the policy area is. But that's why you need to.
- [114:22]
John
I've heard enough. Give him a billion dollar cluster.
- [114:26]
Jordy
Well, speaking of cluster, has there been any demand for on prem? We were talking to David Baszucki from Roblox about this and I was sort of saying, you know, he has a younger audience obviously on the platform and there's been a lot of pushback about the communication that happens between adults and children on the platform. And I was saying like, it feels like although this is a huge problem that obviously needs a lot of, of attention, like the technology is getting better and better to the point where you should be able to screen every single chat message that flows through the Roblox platform in real time with a very, very advanced LLM. But Roblox runs their own infrastructure. Is there an API call and I could imagine a situation where Roblox wants to run this like deeper in their stack and is that something that's on your roadmap or you you've heard customer pull from or do you think it will never be an issue?
- [115:17]
Glenn Wise
Yeah, we'd love an intro.
- [115:18]
Jordy
I really appreciate that.
- [115:22]
Glenn Wise
Yeah, I think for us, because of the proliferation of these foundation models, our customers have gotten really comfortable already utilizing
- [115:33]
Jordy
OpenAI because they're already pulling stuff from AWS or GCP or Azure and they are already have like a Fabric they can pull things into.
- [115:41]
Glenn Wise
Exactly. And we, because of our sort of security paranoia background, we've invested a lot and we even have run a full single tenancy architecture that our, our customers love because you know, they have, they know all of their data is theirs. And so, you know, customers have gotten more and more comfortable. But I could see the pendulum swinging, especially with open source models. I could see it going the other way where they want to self host Cinder, in which case it's built in a way where they can.
- [116:13]
Jordy
Yeah, that'd be really cool. Last question. Get me up to speed on your work with Black Forest Labs because I believe that that's a more unique relationship. They do benchmarking, it seems like they've shared some data. But can you get me up to speed on your work there?
- [116:27]
Glenn Wise
Yeah, we've been doing some really exciting red teaming work of these models. I think it's a really important job that these models are able to be tested before they're released, obviously, because once they're released in the wild, then they are subject to the rest of the world. And so that's a lot of the work that we do as well. Right. Is allow companies to set up those guardrails, but also allow them to not only test the guardrails, but test the models themselves. And that leads to just dramatically safer outcomes when they release these models out into the world. And I think that we're going to see standards coming out of the uk, the eu, the us on expectations around red teaming, especially as these models become more and more powerful and the attacks become more sophisticated.
- [117:11]
Jordy
Yeah, yeah, we're already seeing with that, with the who was wasn't Meta, but it was Google, Microsoft and maybe Xai joined OpenAI and Anthropic in, you know, delivering models to the government earlier to test. And this could be a logical place to test as well. But congratulations on the progress. Thank you so much.
- [117:33]
John
Fantastic to meet you. Thank you for doing this work. And the chat is concerned by your coworker's posture in the back there in the blue.
- [117:42]
Glenn Wise
We're going to get some ergonomic experts in here.
- [117:47]
John
Yeah, give him our best.
- [117:49]
Jordy
Yeah, well, I gotta tighten up the shit.
- [117:52]
John
No, no, it's good. He's locked in. That's actually a high performance posture.
- [117:55]
Jordy
That is, that is, you know, and the window open, you get some fresh air, CO2 levels. Probably not a problem.
- [118:00]
John
Doing some critical work.
- [118:01]
Jordy
Anyway, thank you so much for coming on the show.
- [118:03]
John
Great to meet you, Glenn.
- [118:04]
Jordy
Great to meet you. We'll talk to you soon. Bunch of updates really quickly. First, the chat has given a name to my next project. It's the Diesel. The Diesel Refinery Company of Malibu. Get ready, Jordy. We're going to be pumping diesel fumes all over Malibu. It's going to be a boom time also. Swatch.
- [118:24]
John
Yeah, pull it up.
- [118:26]
Jordy
We talked about the Swatch AP collab. The Swatch Audemars Piguet Royal pop collaboration. Well, the final design, or something close to the final design has finally hit the timeline and we can pull up this image because it's not a wristwatch, it's more of a pocket watch. It goes on a necklace, I guess, and it doesn't come with this.
- [118:47]
John
More of a charm. Like, I see people tying this to
- [118:50]
Jordy
like, I think this, this tells me that the. All of the fears that this would be confused with a stainless steel royal oak were probably misplaced. What do you think, Tyler? Yeah.
- [119:02]
Tyler
Well, okay, so it's based off like the Swatch Pop, right?
- [119:04]
Jordy
Yes.
- [119:05]
Tyler
So this is just like. I'm talking about, like, this is a long time ago they made the Swatch pop, which is like this little.
- [119:09]
Jordy
It is a watch and you can
- [119:11]
Tyler
pop in and out into a necklace, into like a little charm or onto like an actual bracelet, a stainless steel bracelet. There might be like. We haven't seen anyone actually buy this yet. It's just like been promo video. So there may actually still be bracelets that you can put it into a watch form.
- [119:23]
Jordy
That's true.
- [119:23]
Tyler
But so far everyone is up in arms.
- [119:26]
Jordy
Platinum. Platinum. Platinum wrist.
- [119:29]
John
Yeah, I'm trying to find pictures.
- [119:32]
Jordy
I don't know. Well, there's a release video that we do think is real. I think we verified this with Quaid over at Bezel and it's showing how they're building it, how they're putting it together, some cinematic music and they are making them. These are mass manufactured. They're showing them being mass manufactured, testing them, but they come in all sorts of colors and will be interesting to see what happens. This does not seem like an it's so over moment for the AP Royal Oak market. It seems like they have found.
- [120:06]
John
Over for the bears.
- [120:07]
Jordy
Yeah, so over for the bears. Everyone that sold yesterday needs to buy them back. Potentially.
- [120:12]
John
Yeah. Interesting. I think it's working to the degree that I see that and I'm like, I kind of want one of those.
- [120:21]
Jordy
Yeah, it's like a cute. I don't know, it's like it just fits a different.
- [120:25]
John
I have a. A guess as to what the hypebeasts will do. John do you know what they're gonna do?
- [120:31]
Jordy
What?
- [120:32]
John
They're gonna take those royal pops.
- [120:34]
Jordy
Yes.
- [120:34]
John
And they're gonna use them to tie their shoes. They're gonna use them as shoelace. So they'll have, like, you know, a bunch of swatch pops hanging off of, you know, some. Some like Nike dunks or something.
- [120:46]
Jordy
I could see that. I could see that. But why not just have the full stainless steel royal oak hanging off their shoes? There's levels to the game. Yeah, well, GameStop is going to need to level up if they want to successfully take over ebay. Because ebay has rejected GameStop's $55 billion takeover bid. The online marketplace, that's ebay, called the cash and stock proposal quote, neither credible nor attractive. The New York Times has a story here. The online marketplace rejected the proposal. Gamestop announced the proposal last week. We talked to Ryan Cohen on the show about this. Combined with ebay, which is a company nearly four times its size, the offer has confounded much of Wall street, in part over questions of how the company would afford it. GameStop's chief executive, Ryan Cohen, initially declined to elaborate on how he would finance the deal. And much of Wall street remains skeptical about the mechanics of the deal. Ebay has officially turned down its lopsided marriage proposal, said Don Bell, head of Event Driven Research. This news should surprise no one, since the odds it would accept GameStop's brash offer were infinitesimally remote. In a letter to GameStop, eBay's chairman, Paul Pressler, listed several concerns with the bid following a review of the offer with legal and financial advisors. The concerns include uncertainty about how it would be paid for and the amount of debt the deal would add to to the company. A cornerstone of the deal was a letter that GameStop secured from investment bank TD bank, saying it was highly confident it would raise 20 billion to fund the offer. That letter, which is not binding, stated that the confidence rested partly on the assumption that the combined company would be investment grade according to at least two of the three major credit rating agencies.
- [122:37]
John
So what does Ryan say?
- [122:41]
Jordy
He responded, I was confused because I saw a post by Paul Branham, and I thought, paul, that's the chairman of ebay. No, it's a different Paul. And this Paul is a major GameStop supporter, I believe. Who said, ryan, we got your unsolicited. Let me translate the ebay letter. We got your unsolicited bid. Our board thoroughly reviewed it. We're rejecting. Not because the math doesn't work, not because we're highly confident because the high. And so this person is very excited about this deal, I think. Anyway, there is another media deal going on right now. Byron Allen is buying BuzzFeed, investing $120 million in the digital media company and will become the CEO. This is a very interesting story because I don't know how familiar you are or the audience is with Byron Allen, but he had a fascinating career where he was originally he jumped straight into late night talk show host. He became a late night talk show host and then eventually had this very interesting business where he would buy zero to yap. Basically he would buy the rights to broadcast on TV in certain slots in certain hours and then he would independently go sell advertising against the programming that he would put together. And so the money would flow from the advertiser to him and then he would pay to air his content on traditional tv.
- [124:15]
Roger Lynch
Interesting.
- [124:16]
John
So he was on the hook for the airtime basically, but any difference?
- [124:21]
Jordy
But he was paying for the air time and then he eventually bought the Weather Channel and a number of other sort of traditional over the air TV stations and sort of grew. He's also will be taking over the time slot from I believe Stephen Colbert post that changeover with a show called what is it, Comics Unleashed. It's a roundtable conversation. It's sort of just a popular with a bunch of comics. And when I first saw it I was like, that's so weird that they're replacing Stephen Colbert with a show about comic books. But it's not, it's a bunch of comedians and Theo Vaughn's been on before and it'll be interesting to see how that, how that show does in that slot. I think the cost structure of that show will be much, much lower. I don't think it's a live band. It's sort of just a studio with a round table and a couple chairs. And so I imagine that the economic equation works much better. But that's not what is in the news today. What's in the news today is that he is buying BuzzFeed and will become the CEO of BuzzFeed. BuzzFeed had sort of changed hands a few times and now it is in the hands of Byron Allen. Jonah Peretti, who co founded Buzzfeed 15 years ago or so, will step, will step down as chief executive, but he will still serve as its president of AI. And if you love reading AI Listicles, you're probably going to get a lot more of them because I think that's part of the plan. But let's read through what the new York Times wrote about Byron Allen's acquisition of buzzfeed.
- [125:51]
John
It's time for Listicles to come back.
- [125:53]
Jordy
Yes. Here are five key things to know about Byron Allen buying buzzfeed. Number four will shock you. Byron Allen, the comedian turned entrepreneur, is buying a controlling stake in buzzfeed, the digital media company that pioneered virality on the Internet. Pioneered virality on the Internet. That's a bold claim. I think that's probably true, but David, after dentist would like a word. Allen Family Digital, a company associated with Mr. Allen, will pay $120 million for 52% stake. And this is a huge jump from where BuzzFeed was trading. I think BuzzFeed was trading around 40 to 80 million markets. So it's like almost a 3x premium. And we can get in the share price in a minute, but Mr. Allen will become the CEO. Jonah Peretti will become the president of artificial intelligence. Byron Allen, pictured there, is 65 years old. He will remain CEO of Allen Media Group, a news and entertainment company that owns local TV stations, as I mentioned, the Weather Channel and a TV production arm. He also produces comics Unleashed, not about comic books, but about comedians, which will replace Stephen Colbert's the Late show on CBS at the end of the month. And where did I lose this? I don't know, but it's an interesting story. Yeah. I'm sure there will be more developments on what happens with buzzfeed, as I'm
- [127:13]
John
so curious what the plan is. They had Q1 revenue of about $31 million. 31.6 million, to be precise, and a net loss of roughly 15 million. Revenue was down 12.4% year over year.
- [127:29]
Jordy
Yeah.
- [127:30]
John
So losing a bunch of money, revenues shrinking. I don't think the brand is. I don't think it's a good. Good brand at this point. Certainly has name recognition, but I don't know anybody that wakes up in the morning and homepage says, yeah, I got to know what BuzzFeed is about. Talking about today. Granted, there's probably a lot of people, and Byron is a media tycoon.
- [127:56]
Jordy
Yeah.
- [127:56]
John
So now that's why I'm curious. Like, what is. What's the play here? No, I think you see the opportunity, if you. If you had $120 million to just build a new media property. You wonder, hey, what. What could you actually do? So is it. Is there some massive audience that's still sneakily more engaged? Maybe he sees a pivot to prediction markets?
- [128:22]
Jordy
Oh, I don't know.
- [128:23]
John
I don't know.
- [128:24]
Jordy
BuzzFeed today, let's check it out. Buzzfeed.com 50. Why would you put that thing in writing photos that prove people are the worst. That's the number one trending article on Buzzfeed. 41 celebs people used to love and now can't even stand to look at 22. They really go, they love the listicle and they're getting longer. I was joking about five key reasons that would be that would never make the cut at Modern Buzzfeed. 22 stories about boy moms and their sons that will make you cringe into oblivion. I don't want to read that. 32 people confessed the secrets they been hiding and these would destroy multiple people if they ever came out. And there are reactions.
- [129:11]
John
Crazy.
- [129:12]
Jordy
I did. I was a fan of. I was never a fan of the buzzfeed quizzes, but I was a fan
- [129:16]
John
of yeah, there's an arcade, so maybe there's a gaming play.
- [129:19]
Jordy
They also had a bunch of different like CPG spin offs. various points I think they got into physical goods but a lot of the talent did go off and venture on their own. Like the try guys, I think famously left BuzzFeed and, and started a YouTube channel and, and there was always like a little bit of a talent management. Not always perfectly aligned.
- [129:41]
John
Anyway, we have the perfect guy to ask.
- [129:44]
Jordy
I don't know he's going to comment on any of this, but we can certainly try and ask him about it because we have Roger lynch, the CEO of Conde Nast with us here in the TVP in Ultradam. Roger, great to see you again. How you doing? I'm all right for those, I mean, we were hanging out last week, but for those who don't know, introduce yourself. Let's go a little bit back in time. Take us on your journey and then we can get into all the hot topics in media. Sure.
- [130:09]
Roger Lynch
Well, yeah, I've been CEO of CunningHast for seven years, but prior to that I spent my whole career really in technology.
- [130:17]
Jordy
And primarily a fantastic guitarist, thank you very much.
- [130:21]
Roger Lynch
That was my choice ambition.
- [130:23]
Jordy
That was an incredible performance. It's a little bit of just lore, I guess, but we can get into hobbies and things outside business. But yeah, take us back. What was the first job in media? How did you get to where you were?
- [130:36]
Roger Lynch
First job in media?
- [130:37]
Jordy
Yeah, maybe that's a good place to start.
- [130:39]
Roger Lynch
Well, I mean, it depends on how you define media really. I spent my career at the intersection of technology and media. So the first company that I ran was a broadband business. It was one of the first Broadband businesses in Europe going back to 1999. And literally one of the first things we did is we did a deal with the NFL to stream live NFL games in 1999. That's crazy.
- [131:03]
John
How much demand was there for NFL in Europe at that time?
- [131:07]
Roger Lynch
Well, the reason the NFL was interested in it, this is back when Paul Tagliabu was the commissioner. He came over to announce this crazy idea that we had was they were trying to build the NFL in Europe and they had.
- [131:20]
John
They're like, I hear people love football over there. Why aren't we making money?
- [131:23]
Roger Lynch
Why isn't it our football? They had. I think there was a team called the Amsterdam Admirals at the time. There's a European football league they were trying to promote. And, you know, broadband was a really interesting technology and I was really excited to see how it could be used to change how people consume content. And that's why we did that deal. And then I started an IPTV company. First Video on Demand IPTV and then Sling tv, streaming tv. So always sort of at the intersection of technology and meteor content. Then I ran Pandora, the first company I ran that I didn't start.
- [131:56]
Jordy
I loved Pandora.
- [131:58]
John
Yeah. Pandora is truly, when I think magical. When I think of magical.
- [132:03]
Jordy
Yeah.
- [132:04]
John
When I think of magical technology experiences in my childhood, I think of Pandora. I think of being in my garage with my dad or we'd be like playing pool, listening to music or working singer.
- [132:14]
Jordy
So many obscure songs on Pandora is amazing. Was there some sort of unique opportunity with Pandora around treating it like a radio station? Because it feels like there was some sort of licensing deal on the back end that was not the same as Spotify or itunes store at that time.
- [132:33]
Roger Lynch
Right.
- [132:33]
John
Because of the trade off. I remember I must have been. I must have been. And intuitively at the time, I was like, okay, this is a fair trade off. Like, I'm used to going to itunes, having to pay 99 cents. Or I can just kind of like roll the dice. Maybe I'll get my favorite song on Pandora. So I found myself on Pandora a lot.
- [132:52]
Roger Lynch
Pandora took advantage of some rights that allowed them compulsory rights, allowed them to stream all of that content. And. But one of the trade offs was you couldn't choose the song. And so they did launch a subscription long before I joined subscription service. But were late for that game. They were quite late for that game. By that time, Spotify already had a very strong presence and some of the other big tech companies were getting into it. But you mentioned AI to me, one of the key things with Pandora was the way it combined sort of human taste with AI. So we had a team of musicologists and one of the, you know, you mentioned, I've been a guitar player all my life. One of the best parts about that job is they were all fantastic musicians. So we do these company events and we'd play all the time. And these guys were so, and they were mostly men, were so good. But then we had the data scientists also and they would take the work that the musicologists did and create their machine learning algorithms around that. And each of the algorithms they had, I can't remember, 90 or so algorithms. Each one would get tuned for every individual listener. So it'd be weighted a little bit more. Jordy likes this, John's like this. And so it creates a personalized experience. And to me, you know, I still listen to Pandora. I also listen to Spotify, but when I want something just to put something on and let it play, I'll go to Pandora because I think those algorithms still outperform.
- [134:17]
Jordy
Yeah, I mean, we've talked to this new COSI of Spotify, but like that AI driven feature, the promptable playlist is just coming to Spotify like this year. And I'm sure it's souped up and powerful and stuff, but it is remarkable how long that like Internet radio lasted. These things have long. These things have long lives. I'm wondering about your view on durability in media generally. It feels like anytime that there's some platform shift, there's endless think pieces about legacy media is dead, linear TV is dead, this is dead. Everyone loves to talk about that. But in your experience, how does the media industry actually change as technology arrives?
- [135:08]
Roger Lynch
You know, the media industry has a history of, of not changing quickly enough. And you could start with the music industry. Recorded music industry peaked in 1999. And then Napster.
- [135:24]
John
And that sales revenue.
- [135:25]
Roger Lynch
Yeah. And recorded recorded music industry.
- [135:29]
Sahir
Yeah.
- [135:29]
John
We found out like last week or the week before that vinyl record sales are like something like 10% of streaming revenue, which sounds so vinyl records.
- [135:38]
Roger Lynch
So that's an interesting trend to talk about. But what the music industry did or didn't do is, and this is one of the big mistakes and like most lessons that you learn, you learn the biggest lessons from your mistakes. What the music industry didn't do is look at how their customers were behaving and say, okay, let me craft my business around that. They said, no, I don't like that behavior. I'm going to change the behavior.
- [136:04]
Doomberg
Behavior.
- [136:04]
Roger Lynch
Let me sue these teenagers in Iowa who are Downloading music or sue the ISPs or their parents or whatever. So I could change the behavior back because I really like it when they buy CDs. That's really good for my business. That was disastrous for the industry. So finally once they had embraced downloads and then streaming, it started growing again. It's only just gotten back to the size it was in 1999. 27 years later there's more people.
- [136:30]
Jordy
And people still like music just as much as they did before, of course.
- [136:34]
Roger Lynch
But they fought it for far too long and it's a mistake. Vinyl records have grown every year for the last 18 years. And sales of vinyl records, and it was, it used to be people my age buying vinyl records and collecting them. Now there are as many people in their 20s buying them as there are people in their 50s or 60s buying them. A lot of people in their 20s don't even own a record player. They buy into the vinyl records. There's an interesting trend that we, and we see it a bit in our industry too. Like young people buying physical magazines.
- [137:03]
Jordy
Yeah.
- [137:04]
John
Yep.
- [137:04]
Roger Lynch
It's like why? Well, I think it's a search for authenticity. I think when you have so much,
- [137:09]
Jordy
you got the paper right here, digital
- [137:11]
Roger Lynch
content that is in your pocket and it's all free or free to consume, it becomes less valuable and maybe less authentic to you.
- [137:20]
John
Yeah. And there's something that's always been missing from like part of the experience of being a music fan to never actually go and trade your dollars. Like I think people do like to vote with their dollars and express their interests and actually have this physical embodiment of their, of their taste.
- [137:38]
Roger Lynch
Well, they're doing it with live music now. That's where the money has gone. The money is, you know, really moved to live. It used to be, you know, in the 90s and 80s everything people would go on tour to support their record sales. And now it's the reverse. Release the record so you can go on tour and sell tickets.
- [137:53]
Jordy
And it feels like the in person events stadiums are getting like the Capex is just skyrocketing across the sphere. Sofi Stadium here in Los Angeles. There's like more and more ways to draw people in with like ever larger spectacles and these like shelling points where like did you see Taylor Swift in the eras tour? Like that was a key moment that even like the Captain casual fans needed to find.
- [138:15]
John
So after Pandora, talk about the journey into Conde Nast.
- [138:20]
Roger Lynch
Yeah, it was, you know, I wasn't at Pandora very long because we sold it to Siriusxm and you know, I was thinking about what I wanted to do next and I was fortunate enough to be in process on four different companies. Two were in New York, two in la, where we're from la. So LA had a lot of, of attractions for us. And I was flying back and forth between New York and LA and having trouble deciding what I wanted to do. And my wife was like, usually you're so decisive. It's like, I know it's really tough. And then I finally realized on one of these flights that when I'm sitting here, I had all the information on all these companies. Every time I'd go to the Conde Nast information I wanted to read about that. It was like, and that's literally how I made my decision. Like, that's the most intellectually interesting to me. I'm going to go do that. But there were a couple criteria I had for what I did next. One was I still like the intersection of content and technology and distribution models, but non exclusive content was going to be dominated by big tech companies. You know, music, sure. Films, tv, whatever, the stuff that I had been doing, it all been non exclusive. Like I wanted to go somewhere where we had our own content, we had our own brands, we could control our distribution more. And so that was certainly one of the criteria, but also still the opportunity to innovate around technology, how you use technology to create new business models, distribution models, and you know, Conde Nast really fit that well.
- [139:48]
John
Yeah, yeah, there is interesting. I mean we've talked about this a ton because, you know, thinking about all the new categories of media which we joked about, we put out this really like unhinged market map of media as a joke. And then unfortunately people we like called ourselves neo traditional media, which was a joke. And then now people will tell us and be like, you guys are a pioneer of neo trad media. We're like, we created that category as a joke. But something that we've come back to over and over is just the value of these legacy brands that have been built across decades and how, you know, take away like the business models and how those are evolving. Like it just seems like the value of a Vanity Fair or a Vogue or the New Yorker are, are shockingly durable because we're just, you can make more of these kind of properties, but you need decades. Right. And, and, and so, so I'm wondering your strategy around kind of how you think about counter positioning these brands against the content that is flowing so freely across.
- [141:04]
Jordy
You're referring to the trough.
- [141:06]
John
What's that. Oh, yeah, yeah, yeah. The trough of social media apps. But yeah, like even, you know, I've also talked about the challenges with Substack around certain stories. Substack, if you're an individual selling a subscription, it will reward people that publish multiple times a week that sell a subscription. And yet there's so many stories that take months to tell. There's great stories out there that you'd want somebody writing, spending a year on it.
- [141:35]
Jordy
Seymour Hirsch is not going to break the My Lai massacre on something.
- [141:38]
John
And so there's this opportunity of like the value of brands and curators that is maintained. And we're not creating, we are like, again, I would say we're creating new iconic media brands, but it'll take, you know, 20, 30 years. Right. It's just you cannot do it overnight. And then how these things can operate as platforms where there are a lot of super talented writers that shouldn't be trying to publish every single week because their calling is to publish maybe once a month or even once a quarter at different points. Right. And finding, finding those lanes. So I'm curious about how you're thinking about the role of the different brands under Conde Nas and counter positioning against platforms like traditional social media or Substack.
- [142:22]
Roger Lynch
Look, I think you bring up a really good point about Substack in particular, which is it is a great platform for certain creators and if you want to be on that bit of a hamster wheel, meaning, but it may not feel like a hamster wheel to a lot of people like that. They love to publish content multiple times a week. That's great. It's a great platform for that. If you want to spend 6 months, 12 months deeply researching something and Substack is not the medium for that, it won't reward that behavior. The New Yorker is. It really is. And we get rewarded for that by our subscribers. When we come out with these really deeply researched investigations pieces that, you know, we have a huge army of fact checkers at the New Yorker that comb through every single word in that so that when it is published, it has really, really been thoroughly fact checked. When we publish that, we see the numbers spike on subscriptions. Our subscribers reward us for that type of journalism in a way that I don't think works so well with Substack. Other things work really, really well with Substack.
- [143:26]
John
Yeah, yeah. That said, there's been, there's been. We cover tech primarily, so we've seen a lot of people from tech leave the sort of brands or platforms to go to Substack. And some of the times they come out and they're just scooping every single day and it's amazing. But more often than not I'm like, I actually wish that at least a few of you guys would go to one company and I could subscribe to you and you weren't feeling pressure. And I don't actually, like, for a lot of people, I'm like, I think selling ads is a waste of your time. You should just be writing. Right. And a lot of them feel that. And then the hamster wheel thing, I was talking to really big Substacker yesterday and they were feeling that, they were like, I don't want to publish every day. Right. But you built a business around that and then you're sort of like trapped to this business model. So anyways, I think we're going to, I've said it. I think in this age of AI, in this age of slop and sort of like ultra fast media, I believe that being a true journalist, being a reporter, being a writer is only going to, I think it was always relatively high status, but I think it will even go up and up and up
- [144:41]
Jordy
over and become more valuable.
- [144:43]
John
Yeah, and it's more valuable. It's like we want people that are doing original journalism, fact finding, it's so essential. And then also, yeah, just, just spending, spending the time. I mean, we're, we're sort of a symptom of the Internet, right? We make ultra fast content. Right. I don't expect people to watch most of any of the shows from last week, right. Maybe there's some interviews that are sort of durable, but the majority of the commentary, it's just, it comes and goes, right. We expect people to watch it in the 24, 48 hours that we create it. But there's so much content that I think about sitting down on a Saturday where I'm like, well, maybe I want to read, I have limited time. Maybe I want to read something that somebody put six months into.
- [145:26]
Roger Lynch
Look, I think it's important to know what you're good at and take advantage of that and not try to be something that you're not good at. And you guys are really good at exactly what you just described. And so you've made the most of that and you've attracted a really important audience. And it's really, really worked for you. In a business model, for us to try to chase that would be to move away from what we're really good at and try to become something different. And I agree with you. I think where, you know, with the amount of AI generated content or low quality content that is being flooded into the market, that only, I think accrues to the benefit of companies that can really stand out from that. And so don't try to be that. Like I always tell our, you know, we're going to always have human created content. First of all, I think it's what our. I know it's what our audiences expect and want. Secondly, we have no competitive advantage over just creating AI generated content. There's. That doesn't leverage any of the advantages we have. And so knowing what your advantages are competitive and really building upon that, I think is always important in any business and for the industry changes that are happening right now, I think there's real value in it because unfortunately there's to be going to be fewer places that can do that because the ones that are more marginal may not survive the changes that are happening. And our brands have been really thriving in it.
- [146:45]
John
How do you compare your philosophy of running a house of brands versus, let's say, an lvmh? Is there similarities, differences? What is the philosophy?
- [146:59]
Roger Lynch
Yeah, I mean, you know, I, when I first joined, I spent a lot of time talking to those companies to try to understand how they were organized. Because one of the things I had to figure out is what I wanted to do with the way we were structured, because we were structured very differently. We were really a loose collection of companies all around the world. Every country operated entirely independently from every other country.
- [147:20]
Jordy
Really?
- [147:20]
Roger Lynch
Oh, my God, it was crazy. There was no technology collaboration. There was no. They competed. Literally. I remember, literally three weeks into the job, I start traveling. I go to Milan. You know, I'm trying to visit all our different offices and I get a call from my assistant like, you know, some of the team in Milan is upset you're not visiting. I'm like, I'm in the office, I'm here visiting them. I found out we had seven offices. Conde Nast US had an office there. Khan. Yes. Russia had an office. France, all in Milan.
- [147:51]
Jordy
All different offices.
- [147:52]
Roger Lynch
Because of course, they couldn't be in the same office because they were competitors.
- [147:55]
Jordy
Yeah.
- [147:56]
Roger Lynch
So a lot of changes to make in that model. But look, actually it was a great strategy when the company was a print publication business. It worked by definition. Kanye Nas became very big, successful company following that strategy. But it was not the right strategy for the Internet age and a digital age. And you know how and how audiences have changed. Audiences move from, oh, I read my local newspaper, my local content to I want to see what's happening around the world. I want to consume content from Korea or China or Sweden or Israel or wherever. Much more cosmopolitan in their approach to how they consume content. And so really we use that as a guidepost to say, okay, how should we structure ourselves and just question everything about how we organize ourselves? And even the culture of the company, which was very, very territorial and fiefdom based to what it is today, which is much more collaborative.
- [148:54]
Jordy
So obviously plenty of efficiencies across the portfolio. Geographically, the brands are power law driven. You have a few brands that drive the vast majority of the revenue. Have you been in a portfolio expansion period or portfolio contraction period? Is there a benefit to going more focused around the tentpole brands or do you want to expand further? How are you seeing the.
- [149:21]
Roger Lynch
What we find is certainly our largest, most important brands have done very well in this. Vogue is our largest brand. Vogue has grown every year I've been at the company. It grows revenue, grows profitability every year.
- [149:38]
Jordy
Thank you.
- [149:41]
Roger Lynch
It is good news. And the New Yorker also. The New Yorker just had its most successful year ever by a long shot. Those brands, whatever's happening with search algorithms or AI, they seem to just be able to rise above it. Sure, we have smaller niche brands, Pitchfork and music brand, very small, it's 1% of our revenue, but it has a very strong loyal audience in the category that it covers. It's doing very well. And so there's this sort of barbell effect that's happening at least within our portfolio. And then we have some that are in the middle that are impacted more. Either they don't have as strong authority in the category or they're a little too, too broad that they don't go deep enough in a specific area.
- [150:26]
Jordy
Yeah, we were just talking about buzzfeed and it felt like for a long time it fell into that category of decent sized audience, but ultimately built on the shaky ground of another platform without that really strong core audience that would stick around through thick and thin.
- [150:41]
John
How do you think about talent identification? Going with sort of discovered talent, let's say a writer who's established that already has a following versus somebody who has a lot of potential but maybe hasn't had a breakout moment yet. And then the same thing with executives.
- [151:00]
Roger Lynch
Yeah, I think first of all, for writers, we're a great home for the best journalists in the world in part because I wouldn't have thought this was a necessary competitive advantage several years ago, but it is today. Which is. Which is that we're not impacted by political influence. We're not under the FCC's thumb, we don't have licenses that they need. We're not trying to buy Warner Discovery and need merger approval. And we're owned by a family zone. Cunning ass. For seven decades. I've been at the company now, seven years and not once have they ever called to interfere with anything we do. Therefore, I don't need to do that with our editor. We can just hire the best editors and stay out of their way and let them do their job the best. So that is very attractive to journalists because they know when they come to our company, they're not going to get a call from the CEO or the board or whatever about why did you say those things about this advertiser or whatever it is? No, the journalism comes first and will always come first. So that helps us attract very established writers. But at the same time, we also are a great place for people earlier in their career to learn because they can learn from the best. So we always try to make sure that we're recruiting really high potential new journalists into the company as well as, you know, the best external in terms of executives, you know, other than Anna Winter, every other executive has turned over since I joined the company. Every single one.
- [152:31]
John
Wow.
- [152:32]
Roger Lynch
And I did most of it immediately in two reasons. One, if you want to effect culture change, change people change people that don't reflect the culture that you want to have. And when I got to Conde Nast, I felt like this is not the culture. There were great things about the culture, the focus on excellence, really, really deep at the company. But there are other aspects of, but very internally competitive and political that I didn't like. And I just decided I want to create the culture of a company that I want to work in. So let me find people who think similarly about, about the importance of culture. And then secondly, because you know, we were going from like in the US it was had its own CEO as a separate company from the rest of the world. It was very focused on the US market. I wanted people who had much more global perspective and global experience. And so the skill set I wanted to be broader than what the company had traditionally had.
- [153:34]
John
Probably 2018, this idea of content to commerce got incredibly popular. And even by the time we were starting this show, you're thinking New Yorker protein powder.
- [153:44]
Jordy
When's the comment?
- [153:45]
John
Yeah, love that. But even when we were starting this show, a lot of people said, wow, you have this audience of entrepreneurs. Why don't you build your own software and spin out software companies or develop stuff internally? And we said, with what Hours in the day. Are we going to do that? And why would we deserve to win over a team that is entirely dedicated to a certain problem? Where has content to commerce worked within Conde Nast and where have you experimented or avoided it?
- [154:17]
Roger Lynch
You know, the, if you think about from an advertiser perspective, the reason advertisers have always come to Conde Nast is the influence that we have with audiences. Right. That, that, you know, whether it's fashion or travel or home, you know, it's, it's, it's the influence that we have now. You know that that was very, very true in the print era, it's very true today. But they also have many more avenues to reach audiences than they used to. So for us, when we look at commerce, we think that ability to influence audiences certainly exists even more than before because of how much larger our reach is. And so we can use that maybe not to create the New Yorker protein powder, but to sell fashion, to sell travel. So we've been investing in commerce, but not creating our own products per se.
- [155:13]
Jordy
Partnerships.
- [155:14]
Roger Lynch
Yeah, in partnerships. And that also has grown every year. And we announced it'll be launching soon an initiative we announced last year called Vet, which is really at the intersection of certainly e commerce growth, social commerce in particular, and the creator economy. And so we, what VET is we have relationships with all the luxury fashion companies. We're using those relationships, creating a marketplace commerce platform that then creators can use to connect with their audiences. And so we'll be working with initially a small number of real tastemakers in fashion and then using the relationships and the technology we built to create this creator marketplace called Vet.
- [156:01]
Jordy
How do you think about journalists becoming influencers? Can be great, develop their own audience and then that draws more people into their stories when they do have something to publish. Double edged sword. Because if they leave, they have an audience that might sign up on day one. They might say something that doesn't necessarily represent the views of the publication. There's sort of, you know, some, some organizations have gone back and forth on it either saying everyone needs to be posting on Instagram every day to you can never post on Instagram any day. How have you toyed with that or dealt with that tension throughout your career?
- [156:39]
Roger Lynch
You know, because we have, you know, as you said, a house of brands. Our brands are very different. So, you know, a journalist for the New Yorker may be very different than a journalist for Vogue in their approach to that question. So we don't have hard and fast rules that we would.
- [156:54]
Jordy
So no one size fits all.
- [156:56]
Roger Lynch
Definitely not one size fits all. But we do know that journalists that are able to build profiles for themselves tend to be good for business. So we certainly support that.
- [157:08]
Jordy
Got it. I want to talk about events. Are events more power, law driven? Do you want to, like, raise the long tail of events, do more events, and try and elevate to something where there's a Met Gala happening every week or something? I don't know. Where does the event strategy go?
- [157:28]
Roger Lynch
Events for us are one of the fastest growing parts of our business, but not because we're just doing more and more events. We're actually doing fewer events than when I started. We're doing fewer events, but we. We are focusing on events that really are what we call cultural moments. Met Gala is a great example of that. You know, Met Gala was last week. You know, last Monday.
- [157:50]
Jordy
Yeah.
- [157:51]
Roger Lynch
You know, in the first seven days. I just saw the numbers last night. We had 3.1 billion video views of the content we created.
- [157:59]
Jordy
That's remarkable.
- [157:59]
Roger Lynch
It is. It was up, I don't know, 60% over last year.
- [158:02]
Jordy
And isn't a lot of it, like, off the record? Like, there aren't necessarily. I've never seen, like, you can't just live stream it. You can't watch what happens inside, or, like, there aren't, like, microphones on the dinner tables.
- [158:12]
Roger Lynch
We do a live stream of the red carpet.
- [158:14]
Jordy
Yeah, yeah, yeah, exactly. So it's even eliminated in terms of what you're sharing.
- [158:17]
Roger Lynch
Livestream had 200 million tuned in to view it.
- [158:21]
Jordy
That's amazing.
- [158:22]
John
Wild.
- [158:23]
Roger Lynch
So every year we do the Met Gala, it just grows at a level that's hard to believe. And we finish it and we go, oh, my God, how are we ever going to exceed that next year? And then it grows 65% again the next year.
- [158:34]
Jordy
Wow.
- [158:34]
Roger Lynch
And it was the same thing for the Oscar party. Van de Bear Oscar party this year. 65% growth, year over year.
- [158:39]
Jordy
Remarkable.
- [158:39]
Roger Lynch
So I think we found a playbook on that. But it's not a playbook where you can say, oh, great, let's just do one a week.
- [158:45]
Jordy
Yeah.
- [158:45]
Roger Lynch
You can't create cultural moments like that. What you can do, we found, is doing fewer and doing them at very high quality.
- [158:52]
Jordy
Sure.
- [158:54]
Roger Lynch
And make them global. Events like the Met Gala is a global phenomenon now in a way that it wasn't, you know, seven years ago when I joined. It was an important, very important, you know, event that people in the US Knew about and, you know, people in the fashion community around the world knew. But by bringing the company together into one Organization now all of our brands globally promote it and promote the live stream and the content from it. And that's really helped elevate it to become now a global cultural moment.
- [159:23]
Jordy
Yeah, interesting.
- [159:27]
John
Help me. I don't know how much you'll be able to say here, but help me understand why BuzzFeed is worth something like 120 million.
- [159:35]
Jordy
No, 240. About half the company, for one.
- [159:38]
John
Oh, half the company, yeah.
- [159:39]
Jordy
240. What's the both case?
- [159:41]
John
Revenues declining. Decent, you know, run rating. 60 million a year of losses, I would guess. Aging audience. Do you have any idea where the value is?
- [159:55]
Roger Lynch
Well, look, the only thing I read about that is there was like $20 million going into it.
- [160:02]
Jordy
I thought it was 120.
- [160:03]
Roger Lynch
There's a valuation of that, but there's a stage you guys may have read.
- [160:07]
Jordy
Okay, okay. Yeah, yeah.
- [160:08]
Roger Lynch
But look, I can't speak specifics of that business. That was a business that did very well. They were very innovative around a different era, the Internet, when you could take search traffic and social media traffic and turn it into commerce dollars or other things. That era is gone.
- [160:25]
Jordy
Why? Yeah. What killed that era? Like, people are still spending time on social media, they're still searching on Google, and yet publishers have not been able to monetize traffic or generate traffic from the activity.
- [160:39]
John
My favorite thing is I look at buzzfeed as, like I look at, at Conde Nast. This is like luxury media. That is what that is. My personal view on it. It's like this is the LVMH of media. And buzzfeed was like a fast fashion.
- [160:52]
Jordy
Just say you've never been to the buzzfeed gala.
- [160:57]
Roger Lynch
Think about. It's really interesting. We did this for a board meeting about six months ago, took a snapshot of search results from, I don't know, seven or eight years ago, and what you saw were, you know, a few sponsored links and then the 10 blue, you know.
- [161:12]
Jordy
Yeah.
- [161:12]
Roger Lynch
The traditional search page.
- [161:13]
Jordy
Yep.
- [161:14]
Roger Lynch
Do the same search term today. You get an AI overview.
- [161:17]
Jordy
Yep.
- [161:17]
Roger Lynch
Then you get rows and rows and rows of commerce links.
- [161:20]
Jordy
Yep.
- [161:21]
Roger Lynch
And then you get.
- [161:22]
John
I was saying somebody, somebody last week was saying, how is search revenue up? I was like, have you, have you done a search recently? Yeah, I basically have to go to the second page to get an organic result.
- [161:33]
Roger Lynch
It's been good for Google.
- [161:34]
John
Yeah. It's been great for business.
- [161:37]
Roger Lynch
If you're a publisher, you've crammed down page.
- [161:39]
Jordy
Okay.
- [161:40]
Roger Lynch
So if you were. If you had a business that relied on that to arbitrage that traffic to sell Whatever that business got very, very difficult.
- [161:50]
Jordy
Yeah, yeah, yeah.
- [161:51]
Roger Lynch
So, you know, and look, the changes in search traffic have certainly impacted our business, but not to the point that we haven't been able to grow our revenues and grow our profitability. But it's a headwind. But last year, so each of the last three years we would do our budgets and we put some forecasts in of search traffic declining. Why? Just because we'd seen the pattern of algorithm changes and generally those algorithm changes were negative, they had negative impacts. So we're going to forecast it to be down and then every year it was down more than we forecast. So last year I told our teams, assume there's no search. You have to have your businesses planned as if search is zero. We don't expect it to be zero, but we, you know, don't bank on it. We expect it to be a single digit percentage of our traffic, very low. So we started working on plans for each of our brands around that and some of the brands we looked at said they don't really have a good plan for that. So we're going to reprioritize on the ones that do. And, but, but if you don't have those paths forward, if you don't have really strong authoritative brands or brands that have very strong niche in certain areas or direct audiences, then you're just going to be fighting that all the way down.
- [163:05]
Jordy
Talk about subscriptions, bundles, subscription pricing. In a time when we have little spurts of inflation here and there, how important has that been? How recent resilient has the subscriber model been? What are you seeing there?
- [163:21]
Roger Lynch
You know, it's, it's a, it's a very important part of our revenue stream. And what, you know, our Digital subscriptions grew 29% last year. Revenue.
- [163:31]
Doomberg
Wow.
- [163:31]
Roger Lynch
And you know, growing double digit percentages this year. So it's a really important growth area of our business. And we're launching more digital subscriptions for more brand like Pitchfork. Small brand just launched a subscription earlier this year. Tatler, another small brand in the UK launched it. But you know, our big brands, the New Yorker, you know, very, very strong growth vogue, is showing incredible growth in digital subscriptions. So that's, that's an area that's important to impress. And we think we've built up some really good capabilities both on the technology side, but then also on just the people capability side too.
- [164:04]
Doomberg
Yeah.
- [164:04]
Jordy
And then do subscribers get stuck in a mentality of I pay a certain amount and they're resistant to a price adjustment in a time of inflation? Or is there some price elasticity there?
- [164:15]
Roger Lynch
You know, we have, we have raised prices on subscriptions fairly materially over the last couple of years. And you know, each year we think, okay, we're raising the price, we're going to, the retention is going to go down and actually the retention has gone, gotten better every single year. So elasticity looks pretty good.
- [164:34]
Jordy
That's good for us far.
- [164:35]
John
Yeah, in some ways. And we're the biggest fans of independent creators on Substack and other newsletter platforms. We have a lot of them on the show, we subscribe to a lot of them. But in some ways they're helping your guys pricing dynamic. And they're like, Well, I want $20 a month for my newsletter that publishes twice a week and I just kind of write what I'm thinking. And you guys are like, well, we're gonna give you all these stories and all this like video and images and these deeply researched stories. And so your product or a subscription for one of the brands starts to look like incredible value. Because you're like the alternative, my dollars are gonna go way less far with an independent creator in terms of volume of stories. Now you don't get the same dynamic that they have which people just like to support independent writers and content creators. That's a part of it. Just you enjoy saying putting, you know, kind of helping somebody be in business. But I think that's an interesting dynamic.
- [165:40]
Jordy
Can you talk about the further niche ification of media? Architectural Digest, the New Yorker. These are already not niche publications but they have a category, Vogue, gq.
- [165:56]
Roger Lynch
Right.
- [165:57]
Jordy
There's a theme to the product and what we've been tracking over the last couple of years is that the Internet native media properties, the creators have been able to find even smaller niches. So we've talked to someone who just does car reviews or just does the car dealership. The car dealership guy was a good example of like that would not be a national magazine but he's made a business work there. And I'm wondering if there's opportunity for more niching or if there's value in not over niching a product and how you're thinking about. Because you see all these niches and you think okay, maybe there's a roll up strategy or maybe there's some sort of synergy between them. But that's already sort of playing out on the platform in the sense that YouTube is making money from both Doug DeMuro reviewing every car and the car dealership guy talking about the dealer side of the automotive industry. And these are Separate from an automotive magazine that might sort of in previous era, address both sides.
- [167:03]
Roger Lynch
You know, I think where publications can get hurt is if they're caught in the middle. Sure, if you try to be too broad, too large of an audience. This is not the era for that. Five years ago maybe that worked, but not today. You either need to be large and authoritative in a big category. Vogue is a good example.
- [167:26]
John
Or Architectural Digest.
- [167:27]
Roger Lynch
Yes. Or Cony Ash Traveler would be another one. Or you need to be really nailing a specific niche where you have a loyal audience that's willing to pay and ad supported. Only tough if you have a brand where you're investing in the journalism. If you have to make significant investments in journalism, supporting that just with advertising is a tough place to be. But if you've got really content that people are willing to pay for. But to do that, don't get caught in the middle place to be
- [168:05]
John
The Devil Wears Prada 2 box office hit. Do you expect that to be a pretty major catalyst for Vogue?
- [168:14]
Roger Lynch
You know, it's actually been a catalyst for Conde Nast broadly. You know, obviously the movie is based on Anna Wintour and the company is based on Conde Nast. But I was talking to our chief revenue officer a couple weeks ago and we had a really good first quarter. We exceeded budget and second quarter was looking strong. And I asked her what's driving the strength and she stopped for a minute. She said, the movie. I said, what? Wow, that's driving. Even other brands said, I think there's just more interest in Conde Nast in general. I think it's more than just that. But I think the movie has created a lot of intrigue and it's been fun.
- [168:55]
Jordy
I imagine it's good for hiring. But can you zoom out and talk a little bit about the hiring pipeline? There's so much uncertainty in the job market. Should you become a software engineer, are there going to be no software engineers? AI can write stuff, but can't really do investigative journalism. But there's still a lot of anxiety. How are you seeing the next crop of great journalists develop right now? Or advice that you give to new grads who want to work at Copy Nast?
- [169:21]
Roger Lynch
Well, you know, we hire journalists and we hire software engineers and it's difficult.
- [169:27]
Jordy
And everything in between business and finance.
- [169:30]
Roger Lynch
Look, you know, I remember my mom growing up, she always said there's always room at the top, right? And it was good advice. Like if you can be the best of what you're doing, there's always going to be room for you that's remarkable. Moms have the best.
- [169:44]
Jordy
So good.
- [169:46]
Roger Lynch
So for us journalists who really excel, I think they'll always have a home. In terms of software engineers, we brought in a new head of product and technology really fortuitously in December and December was really, you guys cover this very well. Agent moment, a step, function, change. And so when he started, I told him, you need to question everything we do. Start with a blank sheet of paper, rethink everything that we're doing, how we do it and how we can use AI. And the first thing he did is he started some small pilots, three or four people on a team, eliminating certain roles that would have been on a much bigger team to create new products. And he ran the pilot six or eight weeks and there was enough information already where we said, okay, let's go make big changes now. And so we just, you know, last month made big changes in that, in that org really centered around how we use AI at the core of not our content, but how we develop technology and products. So, you know, the result of that is there was whole departments that we no longer needed. Like we used to have a, you might be a team of 10 or 12 people on a big project. And when you have that big of a team, you need a technical project manager, you need QA engineers, you need product analysts and all these other things. Well, we just redesigned it and said, actually you have a product manager and they're going to be the product analyst. Also maybe there's a designer and there's an engineer and we're going to have AI create the software and also do the QA of it. And so these teams that were 10 or 12 people became three or four people and they moved at three times the speed. So what does that mean if you're software engineer? It means there's going to be fewer jobs. Without a doubt, fewer jobs for now. But like, if you're a product manager, you can do things that you could never do before because you can actually create the code yourself using AI.
- [171:51]
John
Well, yeah, and Conde Nas is a unique company because you guys don't sell technology, you sell content. And so you want to make great technology to serve the content, but it's not the core, that's not the thing that you sell. Whereas, yeah, we've noticed something, is that we basically we hired a full time software engineer early in the company. Tyler sitting over there.
- [172:14]
Jordy
Tyler.
- [172:15]
John
And we're the kind of employer that never would have hired a software engineer historically. Because for a small podcast at the time, why would you build software yeah. Why would you build custom software? And so there's job creation happening by companies that never made sense to hire software engineers, but now they can.
- [172:34]
Jordy
How are you thinking about. I imagine that at almost all the publications there's essentially no AI doing writing or creative work. But have you had to confront anything on the advertising? Like, I imagine if I flip over the back of the New Yorker, I'm sure I've seen a 3D render of a watch at some point. Will I be seeing an AI render of a watch? Does that matter? Does anyone care?
- [173:02]
Roger Lynch
It matters. Last June, there was an ad that was run in Vogue print magazine. And the ad used an AI generated model.
- [173:14]
Jordy
That's right.
- [173:15]
Roger Lynch
And it blew up. But people who were angry, they were angry a little bit at the advertiser. They're mostly angry at Vogue.
- [173:23]
Jordy
Interesting.
- [173:24]
Roger Lynch
And I loved it. I thought it was fantastic because it reaffirmed what I hoped was going to be the case, which is our audiences want human generated content. They want to know what they're reading and seeing is real and not AI generated.
- [173:37]
Jordy
Interesting.
- [173:38]
Roger Lynch
So to me, that was a really important indicator of frankly, our future, that our future strategy about using AI in many, many places to drive efficiency, to reach audiences faster, speed up the velocity of what we do, all to enable us to invest more in human generated content. That, that was a really.
- [173:57]
John
Especially clothing is really interesting. There's a slippery slope where let's say you generate, you know, you have a real piece of clothing and you say, put this on this, you know, even if it's a real model, but put this on this model. And then what happens if like, you know, you could just prompt it and say, make, make it fit, like slightly different. It's like, well, then now you're. That's not the product that you're selling. Selling a product that doesn't really exist anywhere. So there's certain, certain, certain categories that I think will.
- [174:25]
Jordy
Yeah.
- [174:26]
John
And just. Yeah, it'll be a brand decision. And I think ultimately that is why I think your brands will endure because there will be plenty that make the opposite decision. We're going to lean into it, but there's always room at each end of the barbell.
- [174:46]
Jordy
So lots of care with regard to AI advertising. Zooming out. Are ads a bug or a feature? If I open up a copy of Vogue.
- [174:55]
Roger Lynch
Well, in a print magazine, it's absolutely a feature. I think so, yeah, without a doubt. I think for digital it can be both.
- [175:03]
Jordy
Sure.
- [175:03]
Roger Lynch
You know, programmatic display ads may be more of a bug than a feature.
- [175:08]
John
Yeah.
- [175:09]
Roger Lynch
But you know, reality.
- [175:11]
John
It's just it really. It's mostly the visual disruption of like I'm reading this like beautiful story. I actually like it integrated, sort of a native ad from the publisher that was considered. But anything that becomes display ads, just the.
- [175:28]
Roger Lynch
So our biggest advertising category is branded content and it's great because it leverages a big competitive advantage. We have our brands, our audiences, but our creativity. That to me is a really great place to be in our business and to see the growth of that every year. You know, of course we have display ads, we have print ads, some of which can be branded content. A lot of video. Video ads.
- [175:56]
Jordy
Yeah.
- [175:56]
Doomberg
Yeah.
- [175:57]
Jordy
Anything else, Jordy?
- [175:58]
John
No, this is fantastic. Really glad you made this work.
- [176:01]
Jordy
We'll wrap the show right now. Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter tvpn.com and we will see you tomorrow at 11am Pacific Sharp. Goodbye.