Loading summary
Transcript76 lines
- [00:07]
A
You've had a dynamic where money's become freer than free. If you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where.
- [00:21]
B
Central bankers are tripping over themselves to devalue their currency, Bitcoin wins.
- [00:25]
A
In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitco. If you're not paying attention, you probably should be. Probably should be. Probably should be.
- [00:37]
B
Luke, this is a great pleasure for me. I've been waiting for this, this episode for, I think, years now.
- [00:45]
A
Well, I'm definitely excited to be here. And to all your listeners, I'm sorry, there'll be lots of rants, lots of. Lots of unhinged, maybe unhinged thoughts. But. But I'm really excited to be here.
- [01:00]
B
Well, you've had an open invite to the show for, I think, at least two years now. And you said you've been saying for two years. When the time's right, and I feel like I have something to say, I will let you know. And that happened a couple weeks ago. And here we are thinking of how to start off this episode. I think it's important for the audience to get context. Luke has been somebody who's helped me immensely behind the scenes here at tftc. Think a bit. Thinking about how to position the brand and how to increase our SEO. Not only that, how to lean into this AI revolution. And I think just to start off the conversations, get a little history of your career, what you've built, where you've worked, what you're working on now, and what people may. May learn if they stick around for the whole episode.
- [01:52]
A
Yeah, sure. So I'll do my best to keep it short. Yeah, yeah. So a little bit about me. I grew up in the middle of nowhere in Maine. Up until when I first went to college, I had always lived on a dirt road. I grew up in a small town in central Maine. It was about 800 people. I think half of the town was on some form of general assistance. I was homeschooled. Growing up, I attended a mixture of homeschooling, private schooling. In high school, I ended up getting into web design because I wanted to customize my MySpace profile. I thought it would be cool and maybe, maybe more girls would talk to me. And so that's what I did. I ended up basically devoting, call it half of day. So I would homeschool for half of the day and then for like the other half of the day I would go to what's called a vocational technical school. And, and I was in a class with a bunch of kids that wanted to create video games and I thought web design was cool and I thought maybe there's something there. Little did I know it would basically influence the rest of my life to date. And so yeah, in high school I kind of learned how to code. I wasn't very good at it, but I started creating websites for small businesses. I ended up graduating. I went to school one year in Boston because I thought sports management would be really fun. Turns out that spending tens of thousands of dollars a year for phys ed classes probably wasn't the best idea. So I ended up going to school for marketing and paid my way through school, kind of did the consulting thing, ended up graduating college and wanted to join the startup thing. And so long story short, my wife and I, the second we graduated, we moved to Boston. I started working in early stage tech companies. I originally joined as an engineer, quickly realized I wasn't good at writing code, but I always viewed writing code as a means to an end. For me it was like I loved to grow businesses and so I ended up kind of falling into this industry called like growth, which is how to think about marketing through a programmatic lens like a programmer would. And anyway, did that for a few years, learned SEO, learned a bunch of Internet marketing techniques and ended up falling down the product rabbit hole. Largely because when you're building a startup that is a digital product, a lot of the growth work, so to speak, that you do ends up actually being product work. It's like how can you create a product where these flywheels that help you grow at a low cost. So for those who, who are familiar with like Dropbox, right? It's like people sign up for Dropbox, they get free space. If you want more free space, you share it with a friend. I became very obsessed with that and ended up doing that for a while. In 2019, I decided to make the plunge. Decided to start a remote work software company. I saw a bunch of these fully distributed companies building their own, like intranet is the best way of describing it. Zapier and Stripe and all these kind of well known remote companies had kind of hand rolled their own system. So I started that and then six months later Covid hit and so we experienced a lot of growth. I did that for about two years, but I ended up shutting the business down because I didn't see a clear path to scaling on the revenue Side in particular, I ended up joining Zapier for about three years and went super deep there on AI and automation. And so, yeah, in many ways a culmination of what your listeners will probably hear is maybe a little bit more of a deeper dive on AI, what it looks like, how it's changing things. I also left about two months ago and I started a new company called Formable. We basically are making it easy for businesses to respond to inbound leads way faster. And so for a lot of businesses, you have a contact form on your website. When someone fills it out, they usually have a high level of intent. You want to get back to them as fast as you can. Well, we're building simple and easy to use tools that make it easy for businesses to get back to their potential customers way faster, using AI and automation and a better data collection or form experience. So long term, though, we want to build kind of a new school marketing automation platform, which is just like making it easy for businesses of all shapes and sizes to market in a way where you're leveraging AI as much as possible in new and we'll call it creative ways. We see a big opportunity there, and we don't think the people in the space are moving fast enough. So that's kind of the spiel. I live in the Nashville area and I have four kids, seven and under, so life is good. But I think this context is probably useful for whatever else I'm going to say over the next hour or so. So that's my story. And.
- [07:00]
B
Yeah, yeah, well, like I said, like, you've been helping me a lot behind the scenes, particularly as it pertains to how we grow this business. I think over the last year, through the conversations we've had, you've made it clear to me that you're. You strongly believe that the nature of businesses, how they are started, how they operate, how they scale, and how big their teams get specifically, is about to drastically change. And not only that, on the business side of things, like, you believe strongly that bitcoin is going to play a role in accelerating these businesses as well.
- [07:37]
A
Yeah, yeah. So the way I kind of think about it is the best way I can describe what I think is going on is kind of we live in an age where there's kind of this, like, concept of, like, unbounded leverage. Right. So before there were certain constraints that existed in a business. It could be, in particular, teams in the business. And we've entered a phase where one person can accomplish a lot more with AI in particular. And so I think there's this rise, at least how I view it, of these businesses that understand this reality and they work their way through their own companies trying to identify these areas of leverage and then implementing solutions or tools or processes to take full advantage of this kind of unbounded leverage idea. And so I think actually bitcoin really fits into this thesis quite a bit, right? Because if you think about it, in my world, if you're an early stage startup, especially if you're venture backed, you have to go out and you raise money, right? And usually I would say, usually it really depends on the strategy, but I would say in general, a business goes out and tries to raise at least 18 months of Runway. Oftentimes in some instances it can be years of Runway. You basically end up having a bunch of fiat sitting in your bank account. And so if you think about this idea of where are the areas where there's leverage, it's like your balance sheet is clearly an area where there needs to be some amount of leverage as well, right? If you're an early stage startup burning with a burn rate, right, like you're not making as much as you are spending, obviously you have to be a little bit more, we'll call it risk off. But for a profitable business in particular, I think the ability to be a bit more risk on here around your balance sheet in particular becomes much more interesting and compelling. But if you apply that principle of where can I tap into this? Almost like digital energy, as Saylor kind of puts it, right? Obviously the balance sheet is one area, but I think AI represents its own form of digital energy and that can be applied in other parts of the business. And so I think, like, as I survey the nature of where things are going, the businesses of the future will kind of understand this reality and we'll look for areas where they can implement this everywhere. I would say, to maybe take it a step further, I actually would argue we're not seeing nearly like we're not seeing that much yet. And I would argue the reason why is because existing businesses have a lot of, we'll call it baggage, right? They have, they made certain hires based on certain assumptions, they implemented certain tools based on other assumptions, and so they've created this system that is designed and aims to function in a particular way given certain assumptions. But with AI, it's literally coming in and it's like really rattling those assumptions. So if you're a business, it could mean that you need to change your pricing and packaging, right? And for a lot of like software companies, in particular, it could represent saying, hey, we're going to, like, literally ax a bunch of revenue to change our business model around to be more future proof. Most businesses will not do that. It could mean laying off people, right? And so I think we're. We're only starting to see the beginning of this shift. And I would argue that the tooling and the tech is far ahead of what is actually in use and in practice at these businesses. And so the constraint is not the tech, it's the existing structures in place. And I sought this firsthand, and I see this firsthand where it's like, businesses, we want to do things the way we want to do it. You can sprinkle AI on top of it, go for it, have fun. You can have a CEO mandate, but it doesn't drive the necessary change or the change that will be coming. I think we're entering an age of where there's unbounded leverage. Startups, when you start from scratch, or if you're building a business from scratch, you can start with a greenfield environment, but the existing business cannot. That's why you see a lot of these startups that are. They're shipping code way faster than others. They're moving way faster than others. It's because they're tapping into all that unbounded leverage where the existing business has the structures in place that just are not set up in that way. I'll give you one more analogy. I was maybe too young to experience this firsthand. I wasn't working in tech. But there was a season, I feel like it was maybe in the early or middle 2000s, where there was this concept of, like, software moves to the cloud, right? And so you had these like, you know, code that was on prem or it was like, you know, in the confines of the four walls of the business. And then, like, you know, Salesforce comes along, is like, hey, it's like an address book in the cloud, whatever the cloud means, you know, but, like, those old businesses had to make a decision around how serious they were about this new cloud thing, right? And I think the same is true now with existing, even software businesses. Like, are we gonna, like, fully embrace this AI thing? And I just think that you're gonna see a lot of, we'll call it a flippening that takes place over the next few years. Anyway, I digress, but that's kind of like the thesis in a nutshell.
- [13:46]
B
Sup, freaks? This rip was brought to you by our good friends at Obscura. If you've been listening to the show long enough. You know we care deeply about privacy, particularly as you peruse the web. It is important to be using a VPN and Obscura is our VPN of choice. That is because it is a VPN bu Bitcoiner. For Bitcoiners, it is the first VPN that can't log your activity and outsmarts Internet censorship. Obscura VPN works even in the most restrictive WI FI networks where other VPNs simply fail to connect with server locations across America and the globe. Obscura keeps your Internet access unrestricted wherever you are. I've been using it since it launched. I see no problems with speed. I can get on YouTube TV without any problems. It simply works. They can't log. You can pay in bitcoin. Go to obscura.net, use the code TFTC25 for 25% off an annual subscription. It's already a good deal, their annual deal. The TFTC25 code gets you 25% more off. Go check it out. Obscura.net, use the code TFTC25SUP FREAKS. This rip at TFTC was brought to you by our good friends at BitKey. BitKey makes Bitcoin easy to use and hard to lose. It is a hardware wallet that natively embeds into a two or three multisig. You have one key on the hardware wallet, one key on your mobile device, and block stores a key in the cloud for you. This is an incredible hardware device for your friends and family, or maybe yourself who have bitcoin on exchanges and have for a long time, but haven't taken the step to self custody because they're worried about the complications of setting up a private public key pair, securing that seed phrase, setting up a pin, setting up a passphrase. Again, BitKey makes it easy to use, hard to lose. It's the easiest zero to one step, your first step to self custody. If you have friends and family on the exchanges who haven't moved it off, tell them to pick up a bit key. Go to Bitkey World, use the key TFTC20 at checkout for 20% off your order. That's Bitkey World code TFTC20. Speaking of digressing, let's regress and do like a retrospective on the last one or two years, the evolution of AI. And let's get more specific. You're talking about this unbounded leverage that it provides. But what has happened since GPT3 launched? Like how good do the models get what specifically are they good at? And how are you and other founders leveraging them to outcompete incumbents? And then on the incumbent side of things, let's get into the, the specifics of what sort of confines them and makes them unable to make the necessary changes to compete.
- [16:04]
A
Yeah, sure. So I'll kind of walk you through my personal firsthand experience using AI. So it's kind of a funny story back actually at my previous startup, I think it was like, I don't know, it was maybe early 2022, late 2021. And I chatted with a fellow founder. He's kind of a bit of a brainiac and he's like, you gotta go get an invite. Email this guy. And I think it was Greg Brockman, I think one of the co founders of OpenAI. He's like, email him and ask him for access. So I emailed somebody at OpenAI and they gave me access to. I think it was either chatgpt or. It wasn't chatgpt, it was GPT 2 or 3. And I started playing around with it and it had a developer experience. And I'll just share my screen for a second. We'll come back to this later as well because there's some stuff I want to show you guys. But. But it looked something like this. It was a developer first experience. And you know, once again, like, nobody ever hired me, at least for a long period of time to write code. But like, I started playing around with it and at the time I was like, wow, this, this is kind of like autocomplete, you know, it's like autocomplete at the end of the day, like AI in many ways. Like, this is maybe a simplistic way of describing it, but at the end of the day it's like it uses math to determine what the next word or set of characters should be. That's how it works in a nutshell is it's like it makes guesses, it's trained on data, it makes guesses about what the next words or words should be. And so I was like, oh, this is pretty cool. And obviously, as someone coming from the content marketing and the SEO background, I'm like, I get my head of marketing, who's an amazing content marketer, right? He writes blog posts. They rank in Google. We got traffic. I think we were doing 15,000 signups a month with a $2,000 a month marketing budget. And I'm like, you gotta start using this to, to basically help scaffold up some blog posts. And so he Started using it. And we went from like, if it was like $200 a post, right? $200 a post. Like, we had, you know, people off in yonder land writing posts, and they were okay, but they weren't that great, right? And all of a sudden it's like, this is like 25, $30. It was like, wow, that's pretty cool. And so, you know, I used it, ended up shutting, you know, shutting the business down. Joined Zapier. And then I think it was maybe like six months later, ChatGPT comes out. One of the founders was going down the rabbit hole on AI. It's going down the rabbit hole, and all of a sudden it's like, hey, we need to care about this. This is like a big bang moment in the tech world. Everybody needs to care about this. And so they pulled this, what we looking back, called a code red, which is just like an internal. We'll call it fire drill. It's like, we need to care about this. And here's how we're thinking about this immediately. At the time, I was a product manager there, and I started playing around with it because I knew that it was powerful before, but it was like, how am I going to use it now? At the time, I would actually say I was a little bit of a skeptic. Even though I experienced the power in one particular area, I was like, what is. Like, what is the scope here? Like, what are we. What are we dealing with? How useful is it, especially with this new launch? And so at the time, I kind of had this fun little hobby, and I still do, where I would, like, read these old books written in old English. And. And I just like, I find that there's something cathartic about reading old books outside of the current moment that we're in. And I was like, I bet you. I bet you I could use this to update the text so that I can make sense of what the heck I'm reading right now. And so I ended up doing that. I was like, oh, it's good, but it's not great. Like, it would maybe make it a few sentences in a paragraph. It would update it, and then all of a sudden, it just kind of go off the rails. It's like, man, that's. That's kind of a bummer. But, like, cool. Well, three months later, they launched. I think it was like a new model. And so I returned to that problem, and it was like, oh, wow, I'm getting, like, full paragraphs now. So I decided to have a friend build me a Little tool where I could update like 20 pages of text at a time. And then I decided, oh, I'll just keep going down the rabbit hole. So I'm learning how to prompt, I'm learning how to use different models, I'm learning how to kind of adjust things, like how can I make it less creative and more, you know, based on like that original text with minor updates. And so I just kept going and going, going down the rabbit hole and. And then I ended up, wow, I'll just put it up on Amazon. Well, long story short, I think I've sold about 50,000 books in the past three years. But, but they, I modernized Old English and, and then all of a sudden it's like my world is AI. And then at work we launched a feature that used AI and it just took right off. It was this basic capability where you could ask questions. You could embed this widget on your website and ask questions. A business could put a widget on their website, people would ask questions and then they wouldn't have to ping you and ask you generic questions over and over again. I'm like, I'm way down the rabbit hole now, right? And then it's been one of those things where I just consistently, as a result of tinkering, just trying things, the models have just continued to get better and better. Some models aren't as game changing as others, but you just continue to see this improvement being made. Where before I could ask a question of a 10 page PDF and now I can ask a question of a 300 page PDF and get the right answer, or summarize this short text, summarize this long text. And so once again, I'm digressing. But as a result of tinkering and kind of building in the space, you're able to kind of monitor things and see the nature of the progression. And so as a founder, gosh, where do I even begin? Maybe I'll walk you through how. Yeah, like, where do I even begin? What's the best way of describing. Maybe I'll talk about agents for a couple minutes. Sounds good. Okay. So for those who, you know, you've probably seen the pieces in the news and all that, like, there's this whole kind of idea of like AI agents. What are AI agents? It's like, well, a lot of it's hype, but there is a reality underneath it. And it's basically that agents are, I view them as almost like literal digital coworkers, right? Where you can tell them what to do and they'll do something for you, and then they'll give you back a result. So the way I describe this is if you've ever used ChatGPT before, you give it an input, hands on keyboard, you type in something, the agent goes to work, and then it returns text for you to take a look at. Well, the chat experience is just one implementation of an agent, right? It takes an input, it does a thing, it gives you back an output, right? And this instance, it does it through a chat experience. Well, one of the big things that I guess learned is, well, that's cool. But when it's initiated by a human, there's only so like, you basically have to rely on human behavior change to get the result that you're looking for with AI, right? It's like, oh, I need to go to ChatGPT, I need to remember to use it. Like, that's actually really difficult. But there's no reason why you couldn't feed these little digital brains information behind the scenes where it does a thing and then it gives you back a result, and then you use it further down in some type of workflow. And so Zapier is a workflow automation product. It's been around for 10 years. And what we saw is like, people would build these automations, right? When this happens in this tool, I want to do something else in another tool. Well, what we saw people doing was they were saying, yeah, I want that to happen, but in the middle, I want to use basically ChatGPT to do a thing for me, right? So, oh yeah, when I get an email, I want to summarize the email and then I want insert that information into another tool. And so agents is kind of the big topic these days for startup founders. And once again, there's a decent amount of hype, but there is a very real reality, and it's that these digital employees kind of do work for you. In the old world, when you're building software, it's like you assemble tools in a toolbox, then they give you the toolbox, you pay for the tools in the toolbox, and then they say, have fun, we'll see you later, maybe we'll do a little training with you. But ultimately it's up to you, the human, to pick up the tools and use them. Well, with AI and with agents in particular, you can basically almost have this intermediary between you and the tool. So now there's like these little digital employees that can kind of start doing work for you. And so all of a sudden, the human labor that I would need to do Whatever I was doing before, I don't have to do as much of it because the agents are doing work. And so all these startups are looking for ways where agents or these little digital employees can basically be plopped into a workflow or injected into a business process. And so you're just seeing this explosion of startups looking for places where they can just stuff a little digital employee. And so every time though, that Grok or OpenAI or anthropic releases a new model, the digital employee gets smarter. Right? The digital employee couldn't do a thing before, but now it's like it received better training and it's able to do some new things now. And so every time a new thing is released, it gets smarter and smarter. So anyway, startups, I would say in general are looking for ways to use and kind of get these agents to do work, to augment human labor, to take work off people's plate. And the agent is really, really good at what it does. It can contain a bunch of information about your business. It can literally have libraries of content in its brain or in its memory, and it can reference that so that it does the job in many instances better than the human because the agent doesn't forget. The agent keeps all this stuff in mind. And so anyway, it's kind of nuts, honestly. Like I've never, in the decade plus I've been in tech, there's been some shifts and all this. This is easily the biggest shift I've ever seen. And it's like. And we're still really only in the beginning stages. And so if as a start, like this is part of the reason why I'm working on a new thing is because it's just like I can't sit by and watch this happen. Like, I want to build stuff, you know. So anyway, I don't know if that's useful, but that's how startups are using AI and what, what's happening in the market right now?
- [28:20]
B
Yeah, no, I'm thinking of. Because you, you've heard it. Startups or even more mature companies, there's always like one or two employees that know the code base extremely well. And they're like a, a key man risk. Like if they were to leave, they know how everything works. And now you can sort of automate that task. That risk doesn't, isn't as high as it was because you have these agents now that can just.
- [28:46]
A
I'll give you an example. So you know, we have a code base. The new product that we're building has a Code base. I don't go in and I don't really know the code base. I mean, I could like fiddle around to see what's going on and I can roughly read what's going on. But now I can just get the code on my machine. Point Claude code at it. Yesterday I was playing around and in a startup you need to create product documentation and help docs so that if someone needs to find their way around the product, there's a little repository or a series of web pages that you can go to to say, how do I do this, how do I do that? I pointed cloud code at this and said, hey, look at my code base and literally write the help docs for me. And it did it. And it did like five minutes. And so it, it wrote like 20 super comprehensive help docs and like literally walked people through how to access certain features because it has knowledge of the code. I will tell you, there are dedicated people in companies that literally do this all day. It's just like. That's just. That's just one example. That's just one example.
- [29:58]
B
Sup freaks? This rip is brought to you by good friends at Silent. Silent creates everyday Faraday gear that protects your hardware. We're in bitcoin. We have a lot of hardware that we need to secure your wallet. Emits signals that can leave you vulnerable. You want to pick up silence gear, put your hardware in that. I have a tap signer right here. I got the silent card holder replace my wallet. I was using Ridge wallet because it secured against RFID signal jacking silent. The cardholder does the same thing. It's much sleeker, fits in my pocket much easier. I also have the Faraday phone sleeve which you can put a hardware wallet in. We're actually using it for our keys at the house too. There's been a lot of robberies. They have essential Faraday slings, Faraday backpacks. It's a bitcoin company. They're running on a bitcoin standard. They have a bitcoin treasury. They accept bitcoin via strike. So go to slnt.comtftc to get 15% off anything or simply just use the code TFTC when shopping@slnt.com Patented technology Special operations approved. It has free shipping as well. So go check it out. Sup freaks? Bitcoin has crossed the Rubicon. This extended consolidation in bitcoin has led some to think the bull run is exhausted. But what if the on chain evidence tells Another story on September 30, James Check will break down how ETF flows and institutional allocation are reshaping the cycle and setting higher floors. He'll show why extended periods of chop solidation are just time pain. As heavy distributions of coins are absorbed by the market. Bitcoin has crossed the Rubicon into being a true institutional grade asset. This session is designed to help you understand what that means for this bull run and be. Register now for early access to a new on chain metrics report from Check on chain@ Unchained.com TFTC Shifting this towards the companies that already exist, have these code bases, have these teams and these processes. Like, let's dig into how they're about to get disrupted and how, if at all, they can reposition themselves to not get blown out of the water, actually survive.
- [31:45]
A
Yeah, yeah. So this is, this is a fun one. I'll walk you through what I'll call the roadblocks or the constraints are. The first is we'll maybe start with the people. I think there's two pieces. The first is there's a lot of people that are just like, I don't care about AI and I don't care to know, and I'm just going to keep collecting my paycheck and screw what the CEO says. You know, this mandate, I don't care. Like, I don't care. Right. And so I would say that is the fool. That is a foolish approach. And so you have, you know, you could have, I mean, depends on the company, right? But I mean, even in a tech company, you might have 20% of your employee base that thinks that way, right? Because if you just think about it, there's kind of this idea of these technological adoption curves. There's the innovator, the early majority, the late majority. Some percentage of your business is the late majority. They're at the tail end of adoption. They're not at the cutting edge. They are going to not necessarily fight the initiative, but they're definitely not going to look for ways to try to improve. And you know, they are, in some instances, they will kind of block things and be a naysayer. So that's part one. Part two is the organization itself is structured in particular way. Certain people have certain roles and responsibilities and they like that, right? People like having consistency. People don't generally like when their job description gets torn up and they're like, you're doing something new. So when it comes to some of these new tools, there are new tools that because you have these agents and AI doing more of the human labor, they rightfully notice that this is Disruptive to my job. Right. It's kind of like, you know, I see these stories on the Internet where, you know, you have these people in like it or whatever and they're like, they're training their replacement that's overseas. It's kind of like that they know and they're like, something's wrong here. And so they will fight, right? They'll stonewall things. They will say, we don't need this software. Once again, kind of be a naysayer. And for what it's worth, I have a certain degree of empathy for that situation. But I don't think the answer here is letting the big tidal wave smack you in the face. Don't go to the beach and let the big tsunami run over you. I just don't think that's wise. So that's just the people. That's just the people. Now we'll talk about the tech or the assets that the business has. So in my world, in software it's code, right? The asset is the code in the code base. Well, for a lot of businesses, unless they were started like recently, they have a lot of baggage. Tech debt, right? And so when someone wrote that code, they built it in a particular way based on certain assumptions, as I mentioned earlier. Well, if you, if you want to make a meaningful change and put AI deeply into an existing feature, you basically have to rewrite the thing from scratch. And you have to build it in a way where you're throwing out a lot of old code and you're making massive investments. And tech debt is not something that the companies generally want to invest in. They like revenue generating features, revenue generating code that's written. Right. And so it's easy to kick the can, kick the can, kick the can. So that's why if you look at a lot of these software providers, if they've done AI, it's very surface level. It's like, oh, here's a little copilot, right? Here's a little copilot on the side. You can load it and then you could talk to it and it will answer some questions, but it's kind of useless. But the whole rest of the experience is the same thing that gets into maybe part three design. When you onboard people and when you have been around for a long time, you have a user experience that has been built in a particular way and your customers are used to it, they might be a little bit of, I wouldn't say the naysayer, but let's call it the late majority. If you go in and you start Ripping like, you just start making huge changes to the user experience. They are going to just moan and complain because their workflow was disrupted once again, rightfully so. So it's like, wow, well, to do some type of change, like, let's just sprinkle a little bit of AI on top of what already exists. And that's from a design perspective. Moving on, pricing and packaging. Businesses love to sell features. They love to sell seats. Seats is probably my favorite example. Well, if a business, like in the markets that we play in, if a business sells, makes a ton of money selling seats and AI comes along and says you don't need as many employees, well, a, like, they literally, it's kind of. It competes with their own business model. And so are you going to cannibalize existing revenue for the ambiguity of the unknown? I don't think they will unless they're backed into a corner. And so in general, businesses like to grow. And AI is a big enough shift where you kind of have to rethink your pricing and packaging. You have to shift away from selling seats. I think you have to shift towards this concept of agents doing work. Right. And how do you bill based on the work and especially if the work is done well. Right. And so that's a pretty big shift. It's a huge shift. So that's on the pricing and packaging front. Trying to think of what else. I mean, it just works its way through basically every single department in the company. And so when you add it all up, it's like they're mired in the old world.
- [38:32]
B
Yeah, I think the other thing that we've discussed before too is just like the bureaucratic administrative layer that's been implanted into a lot of these businesses, particularly the larger ones.
- [38:43]
A
Oh, I mean, I could go on and on about that, but it's like this whole managerial class concept where you have these people steering the work that don't have any idea what they're doing, you know, at least on the practice. So, like, you have an engineer, let's say, who goes deep in AI and they're like trying to explain what the heck this new technology does. And the middle manager that's, you know, selling their, you know, RSU and making plenty of money off the old world is not going to really entertain this unless they're forced to. And so you just have this. The politics is crazy. It's absolutely insane. And so you put all of this stuff together. And this is why I say that the roadblock is around the existing structures, the AI, the tech itself, is way further ahead than how businesses have implemented it. And then you also have this whole kind of consultant class, we'll call it, where they come in and like, AI is changing the game. Pay us lots of money and we will recommend mediocre things. Like, you know, maybe. I mean, and I don't want to, like, be too facetious here, I guess, but like, we will make it so you can process your PDFs, right? They implement in some businesses, like, this is actually a game changer, but they kind of just sprinkle it in. Oh, AI transformation. Your entire company needs to be on ChatGPT. Okay, I will take my monthly retainer and I will come back next month and tell you some other basic, obvious thing that you need to do. And so that's why I think, I was reading recently. I think it's like an MIT study or something. 95% of AI initiatives fail. It's like, it's no wonder why after the last five minutes of explaining every part of a business where things could go wrong, it makes, it's like it just makes sense, right?
- [40:42]
B
Yeah, it makes total sense. And that's why, number one, I'm very happy that I met you and we've been having these conversations. Number two, I feel fortunate at TFTC and at 1031 that we have relatively small teams. TFTC, there's four of us and some contractors. 1031, there's five of us. And I feel like I've been able to adapt. I mean, not saying that we're on the cutting edge of AI in terms of implementing it on the business, but we have implemented it to a certain degree. Like we're making, I think we've got some automation on the back end. Very simple stuff. Just to get my head of gross and sort of my multi tool guy, Ed, give some more time on his plate. And then on the front end, like the AI generated videos, obviously opportunity costs, which you were the inspiration for, pivoting that from a mobile app to a browser extension. Like, we were able to build that in a month. And it's been fun implementing it in this business. But like, we're not an AI. We're not providing AI products. We're leveraging it to make our media business and our investment platform more efficient in many different ways. And I guess this gets to the question, like, it seems pretty obvious to me that there seems to be an arms race in Silicon Valley and in tech more broadly to figure this out. And there's been billions, hundreds of billions, probably over a trillion dollars now, at this point that's been thrown at this space and even though you just described that the advantages for startups are massive, I find it hard to believe that a lot of that capital is not being misallocated and people haven't really clued in on what they should build specifically and how this is actually going to change.
- [42:27]
A
Yeah, I mean, I certainly think there's quite a bit of that. And so I could kind of share some examples that kind of pop, you know, are top of mind. Actually, maybe I'll save it for a little bit. So I think the first thing is, in many ways I actually understand the rationale for why the money's sloshing around. And I think it's because the people that are pretty invested and are like in the weeds, they kind of understand that things are going to change in a meaningful way. And for all the reasons I mentioned earlier, there will be a meaningful amount of disruption in particular to these existing established businesses. And so I actually, I don't know if I, I understand the rationale for why investors and venture capitalists are plowing a bunch of money into the space. So, you know, I'll give an example. And this is happening, I would argue, like, it seems like just everywhere, right? So you see it in the late stage where OpenAI is valued at some large amount of money anthropic is raising. So you have that at the foundation model level. And that one feels honestly maybe a little bit, I don't know if I'd say riskier, but somebody's going to win and the revenues are scaling in a meaningful way. Profitability may be a different story, but the revenues are scaling massively. It makes its way throughout all stages of the tech sector. And so I'll give maybe my favorite example, so maybe a little bit of background before I do, though. These startups that latch on, right, because there's so many people out there saying, what is this AI thing? How do I use it? Like, I've never seen any time in technology where you could just basically walk up to anybody on the street and you could have like a conversation and they're going to have like questions and thoughts and curiosity around. I, like, I've just, I've never seen that before. Like, it's, it's like, it's very top of mind for a lot of people. Like, you know, I take my kids to the pool down the street and I'm like chatting with a neighbor about it. You know, it's like, it's just, it's everywhere. And so because there's so much attention there. You have these startups that come out of nowhere and like scale like super fast. So I think notable examples are like, you know, products like Lovable or Cursor. If you're a developer, there's kind of these stories, right, where it's like, hey, we went from 0 to 100 million in annual revenue in like eight months. And it's like no one's ever seen that before, ever. And so some of that's maybe because of the fiat debasement, but, but people have never seen that before. And so what that means is if you're a venture capitalist that is in the business of identifying 1 out of 10, 1 out of 20 companies where you think it could be a home run, your spreadsheets, you can make your spreadsheets make sense. If that one business, instead of scaling to 50 million in annual revenue, scales to 150 million in the same amount of time. The spreadsheet math I think actually kind of makes sense. So what they do is you have these bigger funds that have a billion dollars that they have to deploy. They'll still write checks into the open AIs of the world. And that's like stroke $100 million check or whatever. But they're also getting involved in the earlier stages too. And so it creates. It kind of reminds me of the COVID era, I dare say hysteria, where early stage businesses that had traction, people were ripping massive checks into these. And so I heard from one of my existing investors that a startup that graduated, this is not a rare occurrence, but a startup that graduates from the last Y Combinator batch, which is a big, really well known accelerator that fetches a premium for the startups that go through it. She was saying, oh yeah, this individual raised at a $45 million valuation after three weeks of work, barely had a product, it was raising at a $45 million valuation. And I have friends that have raised at 50, 60, and some of them didn't even have any paid customers. So there is a level of froth in the market. So what that means is if you're an early stage founder, you kind of need to know like, hey, the model is 9 out of 10 of us are going to fail, 1 out of 10 of us is going to make it work and that will return the fund for the venture capitalists. And that's the way that the game is played. And if you don't like it, don't raise vc. But I actually think that the money is in some instances probably not being allocated well But I understand the rationale. I do. I will say the thing that irks me is, and once again, I kind of understand this logic as well, but I think it's kind of, it's kind of a, maybe a sleight of hand is you have these startups. I think Cursor might be one of them. No, no. You know, not hating on Cursor because I think they built a good product, but they basically, it's a land grab. So they're competing with, you know, cloud code and Cursor and all these other, all these other like code tools. So what Cursor does is they give away a bunch of credits. So you sign up and they're like, here's $200 in free AI credits to use so that you can get up and running. It's a great idea. Right. Because people use those credits when they're writing code and then they learn to like your product and they learn how it works and then they're less likely to go try the other product down the street. Well, what happens is, you know, maybe if you're a cursor and I don't know the numbers, so I'm just using hypothetical examples. You might be doing 100, 150 million in annual revenue, but you might be spending 50 of that, 75 of it on literally your open air bill. Right. So in the old world, software margins might have been like 80%, 90%. In the new world, in land grab mode, you might actually have a negative, like a negative, your margin, like you may actually be losing money. And so, you know, in the old world they would still kind of do this with sales and marketing and other things. But I've never seen, I've never seen this maneuver that I'm seeing now where you're basically just paying the anthropics and the OpenAI's of the world, this monster bill. Right. And it's top line revenue, but you're paying massive input costs coming in the.
- [49:39]
B
Front door, going right out the back door.
- [49:41]
A
Yeah. So everybody goes, oh my gosh, they're killing it. My startup is not nearly like. And sure, maybe your startup isn't actually that successful. Sure. But what they're doing is they're kind of more like a 50 million ARR business, not 100 million doll, 100 billion AR business. When, when you think about it, but you know, Top Line's top line. So I, I get it. Once again, I understand why they're doing it. It's a competitive space. But these are some of the shenanigans that are currently happening in the market.
- [50:12]
B
Yeah. On the topic of hysteria, it is crazy how quickly people develop amnesia, like both on the investor side but on the founder side too because like raising at insane valuations. But a lot of pressure on you and sort of handcuffs you in the future if you don't get the traction that was expected of you.
- [50:29]
A
Yeah. And I think a lot of founders will basically, you know, a lot of founders look at it and say, you know, when I, when I take a VC check, this is the path that I am signing up for. Right. Some decide, you know, maybe part of the way through if they don't have the revenue and the traction, it's like switch to profitability, make the business profitable. It's not going to grow as fast, it's not going to return the fund like the VCs want. But you still at the end of the day have a business that employs people and you still delivering our product into the world, which is no shame on that. But when you get on the treadmill, you need to know you're getting on the treadmill.
- [51:13]
B
Yeah. I mean on that topic of bringing a product to the world, what effect is AI going to have on what products look like? Moving forward to my point earlier, not only does it seem like VCs are in this arms race and pouring a bunch of capital and a lot of that's being misallocated just because of just nature of spray and pray. But then on the execution of the startups, how many startups out there do you think have like the right idea of how to implement AI and bring AI products with new ux, new UI to market? Does that make sense?
- [51:50]
A
Yeah, definitely. So this is a really good question. I think maybe the, I think all of us are honestly figuring it out as we go. There are certain patterns that have been, we'll call it proven in some ways to work. Right. So like you know this idea of AI being a chat like experience, it's like for certain jobs to be done right, for certain use cases, that's a great, that's a great way of interacting with AI. I think we're going to see a lot of different approaches in the future and I actually think a meaningful feels like almost 50% of the innovation is actually on design. And so you know a startup when they hire like a product designer, someone who helps build out the ux, like I mean we just went through a hiring process, we brought on a product designer a few weeks ago, she's amazing but like there's a lot of people that have an old world like view and they haven't spent time playing around with products, they haven't spent time like learning AI for themselves to be able to kind of understand. Like at the end of the day I'm like building a user experience that sits on top of this core piece of technology that like has certain things that it needs to function. A lot of designers in particular just haven't spent the time, but the ones that do, I think will really kind of pave some interesting paths. And so I think the thing that I, and I'll kind of maybe like present like a high level way of thinking about this, but I mentioned earlier that these agents are kind of like little digital employees. Well, if that is true, right? Or even remotely close to true, the user experience may actually need to end up feeling a bit more like you are working with like a coworker, right? Maybe these agents. This sounds so cheesy and I can't believe I'm saying it, but like, maybe these little agents need to have little cheesy names, right? Maybe you need to be able to like tag that, the name of that agent. Like you tag them when you're like, you know, using Slack or Microsoft Teams, right? And so, you know, and like how do these agents or little employees interact with each other? Like when do they hand off data from one thing to the next? Like, let's make sure that this agent has enough information in its digital brain. And if one agent has different information and another agent has another set of information and they aren't sharing, well then you run into these issues. And then there's also this concept of like, oh, maybe an age, like maybe there's a boss agent too, right? That kind of like is scanning, right? And it's like, are these things working? Like maybe you need like little one on ones with your, with your little, with your little employees. Like let's check in, see how they're doing. So anyway, the reason why I bring this up is because that's kind of like those are almost like Lego building blocks, right? But there's like these user experiences on top of that that will need to be built. I just, I'm like, it's going to look different. And so that's why to get back to the original comment that I made, I think we're all just trying to figure this out.
- [55:24]
B
What have you seen that's been, have you seen like a. Oh, these guys are doing it, right? This makes sense. Ux.
- [55:34]
A
Yeah. You know, I think some of my favorite tools that I like playing around with are, you know, Replit. Replit's pretty great. I'm a big fan of replit. I like V0, which is another similar tool. I've been really having quite a bit of fun with Claude code, but that's more for like a developer like experience because it kind of sits in your terminal. Honestly, I feel like the number of products that do it poorly is significantly higher than the ones that do it well. I'm trying to think of this. There's this one product that I use for a little bit, it was called Howie and it was almost like this little meeting assistant, but it would interact only through email. It's almost like calendly, if you've ever used that before. But there was no user interface. I think we'll see more of that, but honestly, I'm constantly trying new tools just because I feel like once again we're all trying to figure this out.
- [56:36]
B
Yeah. How do you approach UX UI at formable?
- [56:43]
A
I think we, we definitely lean on the concept of. So there's a few things that we, that we talk a lot about. One is this concept of like a primitive or it's like a building block, right? And so in the world of, we'll call it marketing, like if you're trying to collect leads and get back to them, right, you may have a form and that's like a primitive, you may need to send an email, that's another primitive. And so there's these LEGO building blocks, so to speak, that you need to construct together. And I'm of the opinion that all of those primitives, there's an old world primitive and then there's a new world primitive. The new world primitive is like, they're still probably called the same thing, but they are actually an agent. So like the product that we're working on, the initial product, it literally looks like a multi step form. Like if you've ever used Typeform before. And so you fill it out almost like you're filling out a form, but it's actually an agent behind the scenes. And so because it's an agent, it is literally as you're filling it out, it's like it's kind of reasoning on the fly about what should we do, right? So someone enters their email, we're like, hey, we can enrich that information, right? So we can figure out a little bit more about you. You fill it out. Maybe we show you questions and we don't show you other questions and then at the end we can actually have like another agent that goes, is there Anything else that we need to ask, it's like, oh yeah, there might actually be because you have gave us this job that we need to do. So at the end it might ask you a couple final follow up optional questions. So as a result, if you're a business, you're able to collect this really rich information and then you can feed that really rich information into your follow up email. So your follow up email is way more personalized because you were able to collect this amount of information that helps you deliver a super personalized email. We talk a lot about these primitives. To get back to my point, these primitives are actually kind of like agents. So instead of trying to convince the world that you should be using agents, we're like, no, no, no, there's an existing pattern, there's forms, there's emails, there's these things. And we're just, we're infusing them with AI and rebuilding them as an agent first. So, you know, you still think about your world through this lens of these existing Lego building blocks that you're used to. So that kind of constructs things. But then you have this kind of coordination that needs to happen, like this intelligence layer above those primitives where maybe you have a world where in the future I can describe the funnel that I'm trying to build, Hey, I want to collect leads and I want to get back to them really quickly. And then I want to enroll them in some type of drip sequence where they get an email three days later or five days later. An agent should be able to construct those different primitives or building blocks, put them all together, connect them all, and you don't have to do it yourself. Even better, there can be another agent or another piece of your code, we'll call it, that has knowledge about your business, maybe it scraped your website and it understands your pricing and packaging, it understands the tone of voice that you're trying to use, it understands these things about your business, and it literally gives that information to every single one of those little agents. So all of a sudden your emails are smarter because it knows about your business. Your forms are smarter because it knows about the job that you're trying to do, but also it knows about your business. And so there's this intelligence layer on top of these primitives that we believe will be really transformational when it comes to assembling the Lego building blocks. And then there's almost like another level where you'll have another thing that sits above it and it will analyze everything, it'll analyze your entire marketing Funnel and go, hey, there's drop off rates here, this drop off rates here. You're not converting as well as you could be. Would you like us to make some changes? Like heck yeah, of course. Click right. It applies the change. I don't need to go in and click 18 buttons over and over again. And so it's like I honestly don't know exactly what the user experience for that looks like, but I feel like I have at least. Maybe I'm being foolish, but I feel like I kind of have an idea about what the world will look like in the future. And it's instead of humans being like the first thing that you plug in to solve a problem, it's going to be these little digital employees. Unless you need that extra. Unless the variance in the task is too high and sometimes you'll send a person in to learn more about it so that you can then build an agent to put it in there instead. Yeah, so it's almost like people are gap filling the work of the agents instead of agents gap filling the work of the humans. Right. But right now people are. It's like human plus agent or human plus AI. And I'm like, no, no, no, it's AI plus human.
- [61:41]
B
Yeah. No. This got me thinking, just like thinking about how I could use this at tftc. Just one just thinking of a meeting I had earlier this morning. One of our goals is newsletter has been word of mouth. Haven't really spent any time focusing on building that funnel and pushing people towards that. We've put a little bit more effort into it in recent months with a read at the end of a podcast or whatever. But we can make the newsletter experience, number one, much bigger by actually trying to grow it. And then number two, much more hopefully insightful by if we had a forum where people were getting onboarded to sign up for the newsletter. Like what interests you most about bitcoin? What topics do you. Are you most interested? If you've been reading what topics that we cover make you the happiest something Just thinking of examples here. That's something. If we could use your tool to implement that. I don't have to hire a marketing expert per se to build these funnels like formable could do it for, for us. And as I'm thinking through that, it's like okay, me as a business owner that really empowers me and allows me to do things for cheaper and hopefully increase our audience and ultimately revenues here at the media business. And I like to think I have agency and we're Trying to lean into these tools so it'd be good for our business. And the broader question I'm getting at is like, is this AI revolution truly a 10,000 flowers will bloom situation? Or you're going to have like a crazy, not even Pareto, but crazy distribution of companies that exist and succeed versus those that simply don't exist. And what's the nature of working going to be like?
- [63:32]
A
I think my short answer is it's almost like chaos is a ladder. We would sometimes, my co founder and I would say this a decent amount. You know, chaos is a ladder, it's an opportunity. Right. I think there's the first part, which is chaos. And I'm like, yeah, that's, that's, that's going to happen. Like, you know, you see it in every other part of our, our world, right? Just like total nonsensical. Like, you read the news and you're just like, I can't believe, like, if it was like, you know, maybe a few years ago, I never would have believed it. But now it's like, this is normal. This is, this is pure chaos. And, and so I think that in some ways it will apply here as well. Right. And so, you know, but, but with that chaos, there is opportunity. And I think I am of the opinion and I try to be an optimist. You know, I try to be realistic about the situation at hand. But I tend to envision a bright and interesting future. I think I just like to follow. I love to tinker, I love to try things, I love to learn new things. And so I think, yeah, being an optimist is kind of part of that job. Right? But also there is a reality that, like, things are going to look very different. And I don't necessarily think that change will happen all at once, gradually, then suddenly. Right? Or actually I think it'll be maybe a little bit more of a gradual change because those bigger businesses that are sitting on their hands right now, they won't lose all of their revenue overnight, but it'll just kind of go, right? It'll be this gradual decline. Unless you're chegg. And then if you sell, you know, if you do quizzes, online quizzes, you're totally cook. So, yeah, where am I going with this? So I think, like, here's what I would encourage you, like forever, whoever who is still listening to my diatribes. The way that I would encourage you all to think about it is maybe keep two things in mind. One is that these AI companies in particular are honestly in the business of Narrative. Like, they're in the narrative business, right? And so a year and a half ago, it was like, AGI is here, right? And it's like, that's wonderful if you're going out and trying to raise a mountain of cash, right? It's like, that's a great. That's a great idea. Say AGI is near. Turns out AGI. Yeah. Two weeks until AGI. Right? And so, on one hand, they will hype this, right? They will hype it. And then there are moments where you actually. I feel like you see their true colors where they will, like, in other areas, undersell it. So it's almost like they're kind of like they. They. It's almost like I can't parse these companies because one minute they're saying AGI is near, and then the next minute they're like, kind of almost like walking that back, and it's like, why is that? Right? And I think that there's, like, two things that are true, right? One is like, obviously it's changing the game. I think that AGI is not near unless you're fundraising, but on the other end, there is meaningful disruption that will take place that they are not going to tell you about, right? And so that organization that maybe had. I mean, this is happening in customer support right now, for sure, right? You have these chatbot products that have come out that are way better at answering questions than people because, once again, they have knowledge about the business and they can hold it in their little digital brains way better than a human can. And so, as a result, it's like customer support is one of the first things that's just going to be roasted by AI. And we're seeing it, but you don't see a lot of it in the news. You will see more of it. And that's like a huge amount of. Of, you know, there's a lot of people that are employed in customer support. Like, there are a lot of people that are out in, you know, rural America that work a remote customer support job. Well, you know, maybe there's fewer because of outsourcing, but, like, you know, and. And they, you know, they're working this job, and they're, for most part, you know, happy with the situation that they're in. It's like AI comes in, bang. It's almost like growing up in Maine, we had these mill towns, right? So you had these paper mills, and you had these paper mills, and they started outsourcing everything. And my grandfather, he. He would haul lumber and he would haul wood. Chips to these paper mills. And I remember being five, six years old and him complaining about outsourcing happening. I would go on trips with him in his tractor trailer truck. I would be in the back, take naps. And then he would take lumber from Maine, drive it across into Canada. They would process it. He'd bring a load back, and it infuriated him. And he would constantly talk about it with my dad. And so I think, like, there's going to be some element of that that happens, but it's going to happen in white collar work, which is, like, kind of wild to think about. Yeah, yeah.
- [69:21]
B
Oh, it's wild to think about because, I mean, there are. I mean, I think an overwhelming majority of people in these white collar jobs.
- [69:30]
A
Are.
- [69:32]
B
Asleep at the wheel when it comes to this stuff. I think they're. I don't know if it's definitely a form of cognitive dissonance where they don't want to believe. And especially for white collar workers around our age, millennials who've struggled enough to get to where they are, it's pop culture or popular culture right now. It's like the millennial trajectory. You go to school, you get a degree, you get a good high school, good college, right? Major, get a degree. And then that hasn't panned out. Well, a lot of the people who hasn't panned out as well as they expected are in these white collar jobs already, not very happy with their position in life and about to get a double whammy with this.
- [70:13]
A
I'll give you another example. So there's this guy that I follow on the Internet, and he basically built. I don't know exactly how he built it, but imagine like if AI was in Excel, right? So imagine all these financial analysts that are really good at writing. I don't know, I hate Excel. But like, macros, I guess. Yeah, Vlookups. Yeah, Vlookups, macros, whatever, right? It's like he built this tool and it's like the people that are using it are freaking out because it's like the analyst jobs. And so it's not only happening to, like, you know, the low end. It's like, you know, somebody who works in, like, I don't know, Goldman Sachs or whatever, you know, some financial business that I'm unaware of, right? It's like analysts buy. And so, you know, and right now we don't see the. I don't, you know, like, because the models are not perfect. Not everything can be solved by AI, obviously. And I think that even in the future like not everything will be solved with AI, but once again, if you think about it, AI first, then human. Just like the amount of labor when you go from human first, then AI to AI then human, it's like there's going to be a meaningful delta. And so I really think I'm an optimist and I am optimistic on the future and I'm a technologist for a reason, but that doesn't mean that there isn't some type of short term chaos.
- [71:51]
B
Yeah, but moving on from the chaos to the optimism, like for teams out there that are building, it's incredibly powerful, it's exciting, it's fun. We're having a ton of fun at tftc, implementing the stuff and working on particularly the videos. It's been something that we've really been somewhat addicted to over the last three months. And it's just getting better and easier for us as we get the process down. And the reception is still pretty, pretty remarkable once we get it out there.
- [72:23]
A
I was watching one earlier today and I, I'm gonna follow up with you after be like, tell me your secrets because I haven't, I haven't spent much time here, but I'm just like absolutely loving. I think you, you guys had one video to get like, you know, 20, 000 retweets or something crazy like that.
- [72:41]
B
Yeah, I think the, the 19, the going off the gold standard one that was the most fun so far.
- [72:48]
A
Amazing. Like such a. And it was such a great video. Obviously it's like, oh, it's a little AI generated in there. But it was like, the storytelling was amazing.
- [72:55]
B
Yeah, I think that's what we phoned in on is just using it to tell stories and really storyboarding, that's what most of the time is generating. You have to iterate through the generations. Thank God I don't have to do that. That's Trevor Elijah's job to do that. And I think they definitely have moments where they're beating their head on the table because the generation isn't what they need. But once the end product's there, it's like, holy crap. A lot of our time spent on storyboarding and deciding what story to tell, which is fun. I like to think I'm somewhat of a creative person, but I've never been able to manifest that outside of conversations and writing. I love movies and I like art, but I can't draw, I can't produce a movie. But now we can sort of start that process with AI.
- [73:47]
A
I mean, one of my favorite things to do and this is such a, like, easy example, right? Is, you know, I have a bunch of kids, right? I have four kids, seven and under. And you know, one of the favorite activities is to do coloring pages. And it's like I will generate coloring pages for the kids, right? And so I'll ask them, what do you want? They're like, I want a princess riding a pony, jumping over this thing. And it's like, it gets really wild really quickly. It's like it generates it. I print it off, I give it to them and they're like coloring. They're having a great time.
- [74:20]
B
Yeah. And we have in the car ride, We've been using ChatGPT voice. We named our GBT Darrel. And if the kids, the boys ever have a question in the back of the car, we just pop Darrel open, give them the context. Hey, Darrell, we've got a five and a three year old here. They're very curious and they're looking to learn. And my oldest son, two weeks ago, we were playing with Daryl. He's like, how long does it take to count to 100 trillion, Daddy? And I was like, I don't know, let's ask Daryl. And the answer blew my mind. I was like, ah. But then, like, it went from there. His cousin was in the car. And similar to the coloring pages, we asked Darrell to craft a story for my oldest boy and his cousin, who's a girl, like a heroic story of them traveling through a forest. And in ten seconds had a five minute story. And his parents in the car is like, oh, we get five minutes of relative silence. And it was fun. And they were, they were amazed, like the fact that they were the main characters in the story.
- [75:19]
A
It's like, it's so much fun. You know, I. My son loves insects. And so you'll turn on the little video mode and you'll like pull up an insect. He comes in, he's like, got this thing on his, you know, on his arm or whatever. What is it like? I don't know. Let's find out, right?
- [75:37]
B
And it's like untapped. And that's actually one thing. The school my boys go to now, they actually, I'm happy to see that they've put feelers out there to the parents, like we're looking to before we're thinking on AI, we're putting together like an AI board or committee to help us implement it in the school. I'm like, thank God you're thinking about this because that's like thinking positively, optimistically, like the Potential for this to really accelerate human knowledge is unbounded.
- [76:09]
A
It really is. It really is. You almost have to like teach yourself when, like, historically, you know, there would be these questions that I would have, or it'd be like, how do I do X right? Or is it possible to do X right? And before, if I were to Google it, right, it's like, I'm probably not going to get something interesting because it's such a particular thing, unless it's how do I change my door? Or something like a lot of people search for. But usually it's like this kind of longer tail thing, right? And now it's just like, you almost have to teach yourself. I should just ask that question, right? And then it will kind of prime my thinking with some ideas which I can then use to dig deeper. And I see it with kids, I see it with myself. You know, it's like, is it possible to even build this into my product? Like, ah, yeah, you could probably do it this way or that way or the other way. It's like, that's actually a great idea. I'm going to use that, right? So you almost kind of have to have like a. There's a level of, you know, people would always say in, in for software engineers in particular. Like, you should go Google, like, if you ever have a question about code, go Google it. And then if you can't figure it out, come back and ask me. It's almost like we've kind of entered this phase where it's not just for software engineers anymore. It's like you have a question, ask, you know, ask one of these AIs first to prime it and then if you still can't figure it out, you know, go another level deeper. You know, someone who's homeschooled. The world has just will massively change in education as well. And we homeschool our children and a lot of it was, we were kind of teetering on, like, should we do, you know, maybe like some private schooling or something versus homeschooling. And you know, at the time I was playing around with AI and I was like, timeout. No, we are homeschooling. Because when you have these superpowers in your, in your hands, obviously I don't want my kids to be playing around on screens all day. But like, if you selectively use it, it is a massive accelerant. And you know, the homeschooler, at least the homeschooled parent is always kind of trained or learns that the most important thing about homeschooling is the personalized instruction. And so if you apply that with AI, it's like it just makes it even more, you know, it's like personalization on steroids.
- [78:46]
B
Yeah. Especially with the memory, with the agentic brain that exists.
- [78:50]
A
Like. Yeah.
- [78:52]
B
And it is scary too. It's like how much information do we give these models? Can open source models and products like Maple get the parodies so you feel more comfortable doing all this. But that's why I think the big.
- [79:05]
A
Scary thing is really around like the training. You know, it's like I, if there's one area that I feel like some amount of, maybe the free, the free market. Maybe the free market figures it out. But the thing that I really think should exist and should be transparent is, you know, they basically have these. I guess I was listening to, I think it was Sam Altman chatting about it, but they basically have these big documents that have these very maybe convoluted rules around, like if this happens. Right. It's like it's kind of the teaching document for the foundation model. I want to know what that is. And I think we have, I think that there, those companies have a responsibility to tell us, you know, because, because the, you know, if we were, if, if anybody was concerned about social media censorship like this is that on this has the potential to be that on steroids. So publish how you like get that out in the open. Like, I think that that makes sense. I think you can keep some of these other trade secrets. Sure. But like that we, we should know how the algorithm works.
- [80:23]
B
Yeah. I have a feeling that's going to be hard to get unless you have the free market come and somebody position themselves as. We're going to be the company that does this and you should use us because of this. But tying the bow on the overarching conversation, like a lot of how we view at 10:31 and me personally as a bitcoin or businesses transforming is on the capital side, on the reserve asset side with bitcoin. Let's just expand on how you view bitcoin's role in not only business formation, but like how you run a business in the future, particularly if you're leveraging this unbounded leverage with AI.
- [81:05]
A
There's, there's a lot of places that I could go. Maybe I'll start with the, I'll start with the tech. Maybe the first is like the idea of agents exchanging some amount of currency between each other very quickly. I can see that happening. I was never like super bullish on this idea of like I get I pay per amount of minute I consume. Like, I was never a big fan of that but like with agents because like, I think humans kind of are always like, I'm paying more and I'm paying more. And, and there's a psychological roadblock, I.
- [81:43]
B
Think, to that model, Nick Saba, is the mental cost of microtransactions.
- [81:47]
A
Yeah, yeah. But when agents are doing it, they don't really care. Right. Because they're not like, I don't. I think maybe, maybe they will care. So, so I think that from a technological level, I think we can see more of that in the future or we will see more of that in the future. It feels like that's coming and you know, Stripe and all these other ones are doing it with, you know, different stablecoin, Rails and other things like that for, you know, I kind of, I'm a big fan of these bitcoin treasury companies. I think that they're kind of Bitcoin treasury maxis and so they recognize that there's an opportunity in the market. And so in some ways the actual business is the sideshow to the main show. And the main show is like intelligent leverage, et cetera. Right. Microstrategy has done an amazing job there and I'm a huge fan of what they've done. But I think most businesses will still maintain their normal business operations. They won't go public, but any profitable business will have an opportunity to store their energy or store their capital in a way where it's not debased. I think that that will be a wonderful thing for the world. I think that that will present new opportunities for startups, emit their growth journey. So like one of my friends who I will not mention his name, started a VC backed startup, grew it. I mean, the thing's profitable and over the past few years, like he's accumulated a war chest, like he's accumulated a lot of bitcoin and it's like absolutely thrilling. And it's changed the way that he thinks about how he grows his business. So like in the past you basically only had like maybe one option and it was, let's throw money at trying to reignite that growth in a more meaningful way. But it's like, but when you are able to store your capital in a better way, bitcoin's a hurdle rate. Are you going to hire that, are you going to hire that super senior leader that wants a ton of money and may not work out? Or you could just shovel that into bitcoin, shovel that extra profit into bitcoin. And play the long game. I think that it's going to be a wonderful thing for businesses. I think the big question mark is profitability, because I think if you're in my shoes, we hold a very small sliver in bitcoin and I'm happy about that and I'm proud of it. But the reality is we actually want to beat the hurdle rate. We want to beat the bitcoin appreciation rate. If we don't, we're cooked. Right? And so in some ways you kind of have to think about. There's a lot of areas that I feel like I can deploy the capital and, and beat the bitcoin hurdle rate. That may not always be true, but like, it's true now. But like, for certain capital that I wouldn't deploy, I should think about storing it in a way that is, is wise and thoughtful. You know, like I, I was in the, I was in the process of shutting my business down and I had a bank account at svb, Silicon Valley bank, and I had some money in it, and then that whole SVB thing blew up and it was like, huh, okay. You know, like this was never something I thought about before. Now you have to think about it a little bit, right? And like every entrepreneur is just like, I put my money in svb, I maybe put it in a savings account that yields. At the time, I think it was like, I don't know, 3% or 2% or something, but you know, that's what they did. And then all of a sudden the financial world kind of blew up. So anyway, I digress, but I think for businesses, especially profitable ones, Bitcoin is going to be an amazing recalibration moment. It will recalibrate how they think about businesses, how they think about capital allocation. And I think that that will be a wonderful thing for the world because, you know, there's nothing you just, when, when Fiat is melting, the. I just think you end up making stupid capital allocation decisions because you, you intuitively know that the ice cube is melting. And so, yeah, I'm really excited to see how things change and I hope to do a little bit of writing and kind of talk about it a little bit more for even like an early stage startup. Because I think that while we have to think about this different, it kind of feels weird that startups that are encouraged to embrace technology in every part of the business, like, well, that part's off limits. That doesn't make sense. It's like, no, this digital transformation exists everywhere and we should be thoughtful around how we do that. And that applies to your balance sheet as well.
- [87:23]
B
Yeah, completely agree. I mean, if we've seen it within the portfolio, 1031, the companies that have taken a portion of their raises use it to buy Bitcoin. The amount of companies that you were describing it earlier, you raise typically 18 months of Runway, in some cases 24 months, in extreme cases 36 months. But there's a number of companies that raise well beyond that sort of threshold, that typical threshold that's thrown out there and have not had to go back to market because the bitcoin treasury has worked in their favor and they're able to use that as working capital down the line. And not only that, we're investing in bitcoin companies run by bitcoiners who understand the hurdle rate. And so I think we have an anomalous portfolio in the sense that we have companies focused on profitability and growth alongside each other to make sure that they can stack as much bitcoin as possible.
- [88:19]
A
Yeah, I really think the number one benefit is not price appreciation over time. I actually think it's that it rewires how you think about building a business. And that will make you a better founder, it will make you a better operator. And then maybe the second is like, there's a little bit of a hedge. Like you can create a little bit of a hedge against debasement in particular. And then thirdly, think about price appreciation last.
- [88:50]
B
I like that. I like that framing. And I know you said that like a lot of particularly other VCs, that's the thing that blows my mind. They'll the. If we're like in a deal with a VC that's not focused on Bitcoin or quote unquote crypto, and the founder has to go to them, be like, yeah, we're going to take a portion of this raise and put it in Bitcoin. They get a lot of questions. And it blows my mind that to your point, we're in this digital transformation age and you're having a company focus on all areas of the business that are going to be disrupted by this digital transformation. Except for the balance sheet. Just, it doesn't make sense. But on that note, obviously you're well connected, know a lot of founders. Do you. Do you get the feeling that people are waking up to this?
- [89:43]
A
I think it's still super early. Yeah, I think it's super early. So, like, you know, if you look in the public markets, I think the public markets are kind of indicative of, of of the private markets. Right. So like you know, the most notable example as of late is you know, Figma, right. Figma went public. They had, I think it was like less 5% or less in bitcoin. And you know, I think Dylan Field, I think that's his name, the CEO like was super involved in like NFTs and all this stuff. Right. And obviously apparently as a bitcoin fan, right. I think that that's generally that feels like what will become a new de facto standard is like 5% or less for a business in kind of this fast growing venture backed world. I don't think it. Yeah, because you literally the game, the way that you grow is like you're okay being unprofitable, you're trying to beat the hurdle rate meaningfully. Right. So you just have to think about it differently. But like I said, if you're profitable. And I was at a bitcoin treasury conference last week and I stopped by and I met an individual and his father that run a self storage facility and it was like they're buying like I think he said, I mean this is public. So I think I saw it on Twitter. It's like 10 grand a week or 10 grand a month. And they just, you know, they run a, you know, a self storage facility and somewhere in the States and. But it's like that's awesome. That's absolutely fantastic. And there's going to be a lot more of those.
- [91:31]
B
And those who get on earlier are going to be very happy that they did. And that's what I think. You're an incredible advocate for it because everybody's going to be a bitcoin treasury company. Just like everybody is an Internet company to a certain extent at some point. And we're obviously in the early stages, the very early stages of that transition and obviously our core focus, my core focus here at this business at 1031 is on Bitcoin specific industry. But that's something at 1031 particularly we talk about a lot is like when do we sort of begin to cross that chasm? And I think advocates like you or bitcoiner building a business that really doesn't have anything to do with bitcoin and is on the cutting edge of this AI revolution. Like the more Luke Thomases that exist in the world that are really putting this message out there and sort of de risking it for others is extremely important.
- [92:29]
A
Yeah, it's going to be a fun time but you know we're, we're still obviously early innings and you know it's like I said before, I really think the number one unlock is that it rewires how you think about capital allocation. I've seen it with my friends. I have personally experienced this for myself. Right. So it's like a lot of bitcoiners experience this personally, and then they're like, would this actually work in a business context? It's like, absolutely, absolutely. And so I just think that that is the nugget is it's almost like if you were to. There's this concept of CEO coaching, founder coaching. Right. It's like holding a little bit of bitcoin on your balance sheet. Even a small amount is like hiring a coach. It teaches you to be more thoughtful. It's like, what is that worth? Priceless. It's priceless.
- [93:28]
B
It really is. I love you describing it that way. It's a founder coach.
- [93:34]
A
It's a founder coach. Yeah. Doesn't mean I'm not going to spend money, but it does mean that I'm going to view it through a different lens.
- [93:45]
B
You're going to think twice. Weigh the opportunity cost, if you will.
- [93:49]
A
The opportunity cost.
- [93:52]
B
Any final thoughts, final pieces of advice as we wrap up here?
- [93:58]
A
So many things I could probably say, but I think if you've made it this far. Thank you. If you have comments, shoot me an email, Luke formable AI or leave a comment on the YouTube video or whatever, and I will read it and weep. But I think if you. If you're skeptical about AI, I understand. And I think that the reason why you're skeptical is probably because you see a lot of hype. And that is true. But what is also is true is that there is substance. And if you want to learn. And the analogy I always use is I feel like sometimes I'm in a room and there's like $100 bills. To use the FIAT world as an example. It's like AI opens your eyes and you kind of realize that there's like a bunch of money lying on the floor and you're like, well, I guess I could pick it up. I guess I could pick it up because if I don't, maybe someone else will. And so AI kind of presents that opportunity, whether you're a small business or a bigger business. I think small businesses, per your comment earlier around how you're using it, actually have a way bigger advantage. There's just so much more that you can do. And I feel like the only way that to jump in is to just tinker, like, start playing around with ChatGPT for a little bit or grok or whatever your tool choice is. Then upgrade and start using AI in like workflow tools. Whether it's zapier, there's product called N8N Relay Gumloop, those ones where basically you can start building out business workflows that kind of consistently do things for you. That's like the next leg. And while you're playing with those tools, they will kind of introduce you some to some of the more advanced concepts as you're tuning the things. And then you'll be able to kind of build this worldview or mental model around how to use agents and how they can work for you. And then I think all of a sudden you'll start to notice more areas where things could be transformed. I will say the other last thing is that you can actually sounds so bad and weird. Ask ChatGPT how to use it if it has recommendations. Explain your business. Ask it if it has recommendations. Throw in images of like little whiteboard diagrams of your business process and stuff like that. Ask it. It'll probably come back with some ideas that will help you come up with some creative inspiration.
- [96:34]
B
Yeah, I will say, I mean, I know we're wrapping up, but I think it's important just to give an example of how we're leveraging it on the back end, business process side. But we use N8N for a couple things right now. For the newsletter, just a scaffold to get a scaffold of the newsletter every day we've used it. We're currently iterating on it. Should go live again next week. But Ed, when I write the newsletter, Ed, usually I'm like, all right, I'm ready to write a newsletter. And he goes in and manually creates a new post. Make sure the ads are there. And then we have the section which is basically a short summary of a section of a podcast that we recorded within the last week with a quote and a link back to the podcast. And it's been a manual process of. We'll record this on Riverside. We'll get the transcript, we'll put that in Dropbox. Then we'll take the transcript from Dropbox and put it in Claude code that we've built this prompt that we've been iterating on for months now at this point. And then we'll get a couple of podcast sections that we can choose from to put into the newsletter. And that's through the manual process. And AI is sprinkled in, obviously transcription and the prompt for clock code. But now with N8N, we can automate that. Like Logan can put the transcript in the Dropbox. And that triggers the flow where we just go in. It's like what section you want, click, and then you can even connect it to Ghost and it'll create the post for you. And, yeah, that will save ed, like, 15 minutes a day.
- [98:04]
A
Yep. Perfect example.
- [98:06]
B
Yeah. And it's. It works.
- [98:11]
A
And it's one that works. Like, the power is that you. You have this kind of digital brain thinking on your behalf, but you still have guardrails on it. Right. You're like, no, no, no. Like, after this happens, I want you to put it over here. Right. So you still feel like you have control, but you have a little bit of the magic sprinkled in parts of the process where it's most relevant. And that I think is the big nugget is that's why I always recommend play around with ChatGPT. Sure. Then upgrade these workflow tools because you'll still have some control, but you'll be able to infuse the magic, so to speak, at different parts of the workflow, but you'll still have the feeling of control. That's really important because that's where people go off the rails, is they think like, oh, if I have this agent talking to this other agent and like, all of a sudden, like, if it. One mistake, like, it makes one mistake, the whole thing blows up. Right. So with these, you have some level of control. And that control, like businesses want predictability. And so that's why infusing some element of control with the magic is kind of like the key that picks a lock, at least for step two. And whatever step three is, we'll figure out as AI gets better.
- [99:28]
B
Yeah, well, hopefully as AI gets better, we'll continue these conversations. I know you're a busy man and took you a couple years to let me know that you're ready to come on. So hopefully it doesn't take two more.
- [99:38]
A
Years, but I would be happy to come back on anytime. This is all. You know, I'm in the thick of it right now with the new business learning every day, and always happy to share what I'm learning. Hopefully it's right, but always happy to share my learnings.
- [99:59]
B
Well, I want to sincerely thank you because you've been extremely generous with sharing your learnings with me over the years, and it's helped me really think about how to approach this transformation as it's happening, and I think it's helped us improve our business. So thank you.
- [100:16]
A
Appreciate it.
- [100:18]
B
All right, we'll do it again. Let's go enjoy our Friday nights with our families. I can hear my boys playing downstairs and we're gonna win. It's gonna be okay.
- [100:27]
A
Absolutely never.
- [100:28]
B
Doom peace and love, freaks. Okay, thank you for listening to this episode of tftc. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there. Also, wherever you're listening, whether that's YouTube, Apple, Spotify, make sure you like and subscribe to the show. And if you can, leave a rating on the podcasting platforms, that goes a long way. Last but not least, if you want to get these episodes a day early and ad free, make sure you download the Fountain podcasting app. You can go to Fountain FM to find that $5 a month get you every episode a day early ad free helps. The show gives you incredible value, so please consider subscribing via Fountain as well. Thank you for your time and until next time.