← This Week in Startups
This Week in Startups
Archer buys an airport, Ramp’s huge raise, RIP KitKat, Bezos returns to the C-Suite, and more | E2210
01:14:15
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- [00:00]
Alex
All right, Jason. So perhaps the biggest news today in startup land is that Jeff Bezos is going to be CEO again.
- [00:06]
Jason
What?
- [00:06]
Alex
Not of Amazon. I know. Hear me out though. Not of Amazon. And it's going to help kind of bridge the difference between AI systems and the real world. The company has raised $6.2 billion. Just came out of stealth.
- [00:19]
Jason
What we're talking about is real world AI. Does that mean humanoid robotics? Does that mean robots? Bezos is now back in the CEO seat. This is extraordinary news. I thought for sure Bezos is going to come back to Amazon. I think there's two things left for Bezos. Number one is to go back to Amazon at some point. Possible, not probable. The second is to run for president. And that would be a bummer for his lifestyle, I think, because being so and he's still young, like this week.
- [00:55]
Alex
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- [01:43]
Jason
All right everybody, welcome back to this week in Startups. I'm your Host, Jet lagged JCal here on the program. I am back from one of the longest business trips I've ever been on in my life. I think the longest I ever did was like 15 or 16 days and this one was like 13 or 14. I left on a Saturday, came back on a Saturday. Man, the jet lag hit me hard last night. I was up till 3 or 4 in the morning, but I got some sleep and the night before I got 12 hours of sleep. I am just whipsawing around but. But man, did I have the trip of a lifetime.
- [02:14]
Alex
So I want to start there actually because I'm really curious what you're hearing. I mostly talk to people that are very much in the Silicon Valley, American startup technology mindset. But you were in Japan, you were over Mena. So what's the vibes out there, Jason? And what surprised you from founders and.
- [02:29]
Jason
Investors that you talk to I have the luxury at this point in my career to pursue opportunities that I think are either personally interesting or accretive to the returns of our funds. And in this case, I've been studying what's going on around the world. My whole career, I've been traveling, doing speaking gigs, covering as a journalist, you know, different regions. And for the last three or four years, I've been going to the Middle East. And I went with Brad Gerstner. He was going. I was sitting at a poker table. This is in the early days of all in, like maybe in the first 612 months. And he had started going there. But, you know, when I asked around the table, had anybody else gone there, I think almost nobody in my friend group had been to the Middle East. Now, I had been invited many times, Israel, Dubai, even to the FII conference and had declined. You know, had enough going on in America and had other things on my short list of places to go. But having watched the amount of money that was starting to be invested in startups from the region, specifically watching Uber Raise from the region, and I said, I need to get educated. So I started going. What I learned was, these are some of the great entrepreneurial families in the world. In Saudi, in Abu Dhabi, in Doha, in Dubai, in Bahrain, all these places. And they have been educated in the west. And we're now boomeranging back to their home countries and building businesses there. And people started to ask me, hey, do you have funds? Can we be LPs? And I started those discussions, but currently don't have LPs really from the region because I had just started going there and had just basically wrapped up the launch fund for. But one of the discussions that came there was, hey, we're trying to build a domestic Silicon Valley. Everybody in the world wants to replicate Silicon Valley. And I had some, some experience with that, having championed Silicon Alley with the Silicon Alley reporter in the 90s. And everybody told me, oh, Silicon Alley will never hold a candle to Silicon Valley. And at the time, Boston and Silicon Valley were basically, yeah, there were two centers. And Boston was actually taken very seriously at the time as the tech hub. But I watched the tech hub, up close and personal, grow from a couple of dozen people to the modern day Silicon Alley, which is thriving and has plenty of unicorns and venture capitalists. They asked me, would I bring Foundry University? As we've heard on this program before, it's had a profound impact on people's lives. They're thinking about starting a company. They come to Founder University, they're Not incorporated. We give them a 25k check just to get them started their first check in. And they learn all these different skills from the curriculum, product, market fit, how to set up your cap table, how to hire, how to do world class design. And so I was invited to bring Foundry University to Riyadh by Senabul. Sonobl is the venture arm of the pif, which is the sovereign wealth fund, which is, you know, to be sure, you know, quite a, quite an honor to be asked to do that. And I said, you know, this would be a very interesting thing to do, to take what I've learned over 30 years and bring it to that region and help build companies there. They're in decade zero of building technology companies there. We were going to have 25 companies. We had 60. I spent three days. I was able to bring Amanda Bradford from the League, which she sold to Barry Diller and iac, and my friend William Barnes, who was one of Travis's lieutenants at Uber, to be mentors. So the three of us went out there, a couple of people from our team were out there, Ismael and Bianca, and we did three days with these companies and I was really impressed. These are great entrepreneurs with great ideas. The companies are different, the needs are different. So I had to take our curriculum that was working in America really well and refined over 11 cohorts. And then I had to adapt it in real time, which was intellectually very rewarding for me and really great companies there. And then I headed on to Japan.
- [06:42]
Alex
And it sounds like basically the same enthusiasm and excitement for AI and fintech and the stuff we're seeing here in the States is replicated elsewhere or are there like entire different categories of startup focus, Jason, that we should be aware of that are bubbling up?
- [06:54]
Jason
Both. First, there's a lot of construction going on in the Middle East. They're investing in their society. So if you were to imagine, you know, China 10, 20 years ago, when they were starting to build out the infrastructure, that's what's happening in the Middle east right now. So you hear about these incredible projects, almost like science fiction projects in the Middle east where they're building the future. They're skipping building airports as we know them and building airports of the future with things like Joby. Joby is launching basically airports there. Pretty amazing in Abu Dhabi. And they started flights between Abu Dhabi and some other regions. Pretty interesting.
- [07:34]
Alex
Right here is the video, Jason.
- [07:36]
Jason
Oh, okay, great.
- [07:38]
Alex
The sound off. But if you're on the audio version, we are looking at a desert we are looking at a EVTOL aircraft taking off flying out. Joby in Dubai is the headline. Imagine a Cessna 172 stretch, but instead of one engine on the front, it's got four. That pivot.
- [07:56]
Jason
Six. Six blades.
- [07:57]
Alex
Yeah, six blades that pivot. I'm sorry. Yeah, but I would love. Oh, you're right, it is six. I can't count. It's gorgeous. And I love to see commercial progress. This is the real deal.
- [08:07]
Jason
There'll be flying passengers in 2026. They've been flying tons and tons of routes. So there's a lot of construction startups there. Another thing that's happened is finance in the region for various cultural reasons and just developmental reasons, hasn't been developed fully. So there's a ton of fintech. So you have two areas where they really need. Have a big need financing. A lot of these real estate projects, whether it's residential or it's commercial or it's infrastructure like we saw there. Roads and bridges and transportation. And then that requires tools. So marketplaces. We saw some marketplaces that were helping people procure cement and, you know, workers, et cetera. Then we saw some marketplaces for people who were selling different units in buildings that were under construction. So that was really encouraging to see. Now we had to look at the. We looked at which parts of the curriculum people needed help with. Turned out design in the Middle east is maybe behind places like Scandinavia or Germany or the US Kind of makes sense, right? Like it's. They're focused on infrastructure people building construction. Maybe they're not working on the logos of their app like com and uber might be 10 years into those programs. So we adapt. And then also there's not a lot of developers in the region. There's talent in the region, but there's just not enough developers to go around.
- [09:42]
Alex
Got it.
- [09:43]
Jason
So finding and recruiting developers is something in Saudi, in Abu Dhabi, Dubai, Doha, you know, in different places where we needed to build a module for that. A module is just like an educational module. My social media feed is filled with all these experts giving me stock tips, investment advice. But we know nobody's got the crystal ball. Everyone is just guessing. They're making their best guesstimate. But now you can take the guesswork out of your business planning and strategy when you use NetSuite by Oracle. NetSuite is the number one AI cloud enterprise resource planning software on the market today. That means every facet of your business comes together in a single easy to use, fluid platform, giving you a single source of truth and the data you need to make smart, informed decisions. And like all great businesses, NetSuite is constantly updating their product with great new features. For example, their new AI powered intelligent payment automation system allows you to not just automate, but optimize your payment process, which is going to lower your cost, accelerate your payments and it'll build stronger relationships with your vendors. So find out why over 43,000 businesses, including a number of my own portcos, have future proofed their operations with NetSuite by Oracle. Plus, our friends at NetSuite want to give you a free gift. Download the CFO's guide to AI and machine learning for free at netsuite.com twist that's netsuite.com twist so we're working really hard on changing the curriculum in real time. So we have this beautiful curriculum over 12 weeks. I said, hey, can we move these up? How to find a designer, how to find a developer. How to take your design from a 3, 4 or 5 out of 10 to a 6, 7 or 8 out of 10, which is kind of easy to do. It's when you get to the higher echelons, it's hard to do. So that was super rewarding. We're going to be doing two classes a year in Riyadh. It's open to anybody as long as you are willing to spend time in Riyadh. And there's a preference for people who are based in Riyadh and of course for citizens of Saudi Arabia first. So we were going to have 25 startups. We went to 50. And then I cut it off. I said, that's it, we doubled, I don't want any more. And then word got out and then all the lobbying starts. People are, you know, hey, can you just add one more game? One more. Okay, so we are at 60. And then I headed after a brief stint in Dubai, my friend Sammy had a great party for me. That was incredibly nice. I'll have him on the program shortly to to show off his water product, which I don't want to tell anybody about right now, but I got a friend in Dubai who's got a water product that's incredible that I'm going to try to invest in and promote when I get a chance. Brief stop in Dubai and then went on to Japan. In Japan, we're also launching Founder University there. We're doing it with Jetro, which is the Japanese economic trade association. All these countries have trade associations and they have a very robust economy and startup scene. However, it's different than the one in Saudi and it's different than the in Mena and it's different than the one in the United States. Design is really great. The entrepreneurs have great ux, they understand paid marketing really well. But they're going after Japanese customers. It turns out the Japanese customer base is extremely well served and deep pocketed. In other words, they understand great products, they like to try great products. They're tech first, they're tech forward. You know, they have an obsession with ux. Whether you're going to get pancakes or you're going to get ramen, they are obsessed with your experience as but one example, I went to stand up sushi there and I always tell founders go to Japan if you want to learn about product. There's a stand up. There are stand up sushi bars. Sushi started as like bar food. It used to be given out for free in bars. It wasn't like an elite. Yeah, the whole history of sushi, it's really interesting to think about product market fit. They used to put fish into rice with vinegar to preserve it. Then they would slice it and you would eat it, they would cook it. But then some people were like, hey, I don't need you to cook it. It's been preserved, it's you know, in vinegar with the rice and you can leave the rice on there. It kind of tastes interesting with the rice on it. That's the story. Anyway, they have these stand up sushi places you can go, you can gorge yourself on sushi for 20 bucks and eat every all the great pieces and toro, et cetera that you would normally pay 50, 60, 70 for dollars for a normal kase just on a design. You just walk up, you order from the counter, you point at things on the menu. They have a little hot water spigot at every station. There's a stand up sushi counter. Now that one I don't think has the hot water at each counter. But if you look at mine, I may have shared on mine. But they have a hot water spigot in in front of each one they have matcha powder and they have a tea glass there. You shake a little matcha powder into your glass, you push it in like a normal water fountain like you would use for soda pop in the movie theater. You push it in but hot water comes out. You make your own hot tea and you refresh your own hot tea. Now it's a stupid, silly little example, but if you're trying to turn over the stations here, letting people serve themselves hot tea is worth the time to put those hot Water spigots there because you eliminate a third of the experience that would slow it down. You want more hot tea in between pieces of sushi now you don't need a waiter there to provide it. They understand product market fit, but the challenge is maybe being outward facing as opposed to internal facing. So we're going to try to educate the founders there on the opportunity outside of Japan. Remember Sony and you know, many other Japanese products or services from movies to anime to toys. Used to be that they were very outward facing. You know, you buy a Toyota, we were obsessed in the 80s and 90s with Japanese products, 90s and 2000s with Japanese entertainment. But if you had all these really rich customers and you have the number three economy in the world, you know, you don't need to be outward facing. So that's one of the things we're going to work about, is how do you get English speaking customers building English products in parallel to building the Japanese product. So we're launching Founding University there in January and we will put a QR code here in the video.
- [16:00]
Alex
Next up at the docket, Jason ramp has raised $300 million more. This came out just before we went on air. The company is now worth $32 billion. The company's revenue doubled to $1 billion over the last year. So this is not a run rate metric, Jason, which is a little bit odd. I think it's a trailing number which is pretty baller frankly from them. And they see they're growing about 10x faster than the median public SaaS company. Super proud of their progress and they have a pitch about intelligent money. So I'm going to try to gist this down for you, but the idea is that in traditional companies, average public.
- [16:34]
Jason
SaaS company growing 16% year over year and the top 10 sasses are growing about 30% year over year. SaaS is a grinded out business and the AI startups in the market are growing much faster, faster than SaaS companies today. This is defined as companies with 500 million in annual gross profit and generating cash. So these are the profitable SaaS companies that are public and yeah, they are growing slow and steady. Ramp is ramping up 153% year over year. 16.2x.
- [17:13]
Alex
Super impressive stuff. I mean it's a company that's just been crushing it. Their pitch though is that their use of AI is turning money into essentially something more intelligent. I think their point was that for a long time spend costs and how money was moved around companies was kind of hidden behind static rules. And it was a little bit opaque and ossified. And so their pitch is that their AI agents, they have an agent for procurement, they have an agent for compliance and so forth, are turning money into something that's more intelligent and less stupid. And they have a couple of stats, Jason. They said that their policy agent prevented more than a half million out of policy transactions that saved $290 million. And their treasury, treasury agent is moving money into higher yielding accounts and that sort of thing. And I think that while this is clearly a marketing ploy to call money now intelligent, I think it actually has some merit because I do think that AI agents for specific policies and specific rules inside of a large corporation because they have a lot of time and money. So I think even though it's marketing, I buy it.
- [18:16]
Jason
It's definitely some PR person spent a lot of time on intelligent money. Let's just explain what they do. They do expense tracking, they do procurement and making sure that things are labeled properly. People will sometimes expense things they're not supposed to or they'll categorize things wrong. Why is this important? Well, if you're categorizing something that's a business product, like a laptop, well, it has a depreciation schedule. Can you expense it all in year one? Obviously not. But if you were buying like, I don't know, a headset, maybe you can if it's under a certain dollar amount. There's all different rules. There's all. And these are very important to get right. Humans were the people who would do this. It would be a $20 an hour job here in America, $30 an hour job for somebody who worked in bookkeeping. Then it went to offshoring for three, four dollars an hour. And now it's being done by AI. This is the trend right now. Just a chart of the amount of data centers being built versus the amount of office space being built. And it's about to flip. If anybody was wondering what's happening here. This chart is super illustrative and indicative of where the world is heading. We're making office space for robots at a faster growth rate than we're making office space for humans. Work faster. That's not just my personal motto, it's my number one piece of advice for founders. That's how you build a successful business. And when your startup is starting to attract those big enterprise clients, you're going to need a way to keep building and shipping products that they're asking you for and that your competitors might be already providing. But you got to do that without falling behind all of your security and compliance requirements. What do we do here? Well, what you do is you relax, you take a deep breath and you get a partner and that partner's vantive. Their AI and automation is going to make it easier than ever for you to get big deal ready. You're going to do that in days, not weeks. They're going to help you scale your company and continuously keep an eye on your compliance so you're always ready for the next big deal whenever it arrives. AI is here folks. It's changing all around us, all the rules and it's changing your customers expectations. So it's time to get secure with our friends at Vanta Twist listeners can get $1,000 off by going to vanta.comTWIST v a n t a dot com TWIST for $1,000 off. Thank you to Vanta.
- [20:54]
Alex
How does this make you feel about rto? Because I feel like we're eventually going to need more office space down the road. Does that chart indicate we're not going to go back to the office?
- [21:01]
Jason
We pro probably overbuilt office space if anybody with a job is probably going to come back to an office. Because if the things that are wrote are done offshore, if you can work at home as an American, then it can be sent offshore. Things that are sent offshore can be automated by AI. So you just kind of take that path down. Logically, if it can be done work from home, it can be done by somebody in a low cost market like the Philippines, like India, like South America, like Portugal. So that work is finding its way from the US to Canada, to Portugal to India and then onto the Philippines. Then it gets to $1 an hour or $2 an hour. So it would make sense that the next stop is AI. And in fact the companies that do business process outsourcing are the ones who are embracing AI work from home. Unless you're like super elite, it's probably going to be a thing of the past because people will want to have humans doing the thing that is uniquely human, which is brainstorming and collaborating and building cultures and all of those soft, touchy feely things around culture that work better when we're in person.
- [22:09]
Alex
Yes. What I'm curious about though is the valuation for this ramp round. Jason. Billion dollars in trailing revenue $32 billion valuation. 32x Fair enough. The thing is, Navon went public the other day and this is the rebranded Trip Actions. Mostly it's a platform that helps companies book travel, but they also have some kind of corporate spend work in There. So it's a bit of a loose comp to overseeing here from Ramp. It's struggled post ipo, it's just not done that well. And I thought that was going to take some of the, the enthusiasm for these products away for a bit. But now it seems that Ramp is just doing so well that it's transcending category concerns, which is impressive.
- [22:46]
Jason
The question for Navon is what's their growth rate? Because when people do make these investments and you get a really lofty value valuation, it's typically indicative of a high growth rate, which is exactly what Ramp was going on about here. And the whole news peg here is that they're growing 10 times faster than the public SaaS markets. So if they're trailing 1 billion, what's the forward looking like? If the forward is looking like they are going to double revenue next year and they're going to be 2 million, well then that multiple gets cut in half. If they're tripling, the multiple is a third of what it is.
- [23:24]
Alex
Naval is growing in the 30s, Jason, so not anything like as quick as we're seeing from, from Ramp itself, but still, that's the upper end of public SaaS, if you will.
- [23:33]
Jason
Yeah. So if you're growing at 30%, 32%, it looks like they're growing at. Yeah, they're a slow growth, they're a high growth. Amongst their contemporaries there'd be slow growth versus this category of AI startups. So what's happening is there's a changing of the guard. The, the revenue growth rate of AI startups is just whooping the SaaS companies. And so if you're going to put your dollar somewhere, would you want to bet on the future with an AI startup that's high growth or would you like to place in investors mind, public investors, a bet on the past. The only reason to bet on the past is if they were mispriced. So if the startups that are SaaS based are growing 30% and they're being priced, you know, extremely low, then they would be takeout targets. And we have seen their private equity.
- [24:25]
Alex
Exactly.
- [24:26]
Jason
Yeah. So we have seen a little bit of that on the margins and then you might be able to make a short term trade on buying them because they could get taken out. All of this is to say your growth rate matters. Whether you're a 2 year old startup or a 20 year old company, an established one, the growth rate matters and your profitability matters. And then in combination, eventually your valuation is weighed on a scale. So the famous quote is valuations are. And stock prices are a voting mechanism. And then they eventually become a weighing mechanism. The voting mechanism is what happens in private markets. Okay. Ramp is private. We're all voting on this is going to be a very important company. Okay. You know, Micro one in our portfolio has done exceptionally well. Okay. Everybody's voting that they're going to be a great public company someday. Oh, OpenAI people are voting that this is going to be a great public company someday.
- [25:24]
Alex
But then once it becomes public, then you get weighed based on your performance. And sometimes you can be the hottest company in the world, Jason, an absolute icon of the private markets. And then you can go public, and then after a certain amount of time, you can end up looking a little bit like Dropbox. The company shrank 0.7% in its most recent quarter. I don't think we talked about this, but this has been stuck in my head ever since it happened.
- [25:48]
Jason
Wait, Dropbox is shrinking?
- [25:50]
Alex
Dropbox. See? See? No one noticed. Dropbox is shrinking. Look at this. Total revenue was 634.4 million, a decrease of 0.7% from the same period last year. Even worse on constant currency. This is what you're fighting against. This is why Salesforce is so desperate to keep buying companies to stay above 10% growth, because they're just. You don't want to end up trying to yank more free cash flow out of flat revenues.
- [26:14]
Jason
Yeah. I wonder why Dropbox revenue declined. I guess that would be indicative of people unsubscribing from the business or somebody introduced a free product in the market that competes with them.
- [26:26]
Alex
Paying users totaled 18.07 million, as compared to 18.24 million in the same period last year. So exactly what you're saying, Jason. I just think that the problem with Dropbox and Box is that they ended up building a service that became a feature of other suites, and they never managed to build a service that could compete with G Suite or Office. And so they've kept trying to build intelligent tools on top of enterprise. File sync and storage. EFSS we talked about forever, and it's just tough. Now, in the case of Box, I know we're a little bit off topic here, but I think the reason why Aaron Levy has been so vocal about AI agents is that their data predicated. And so if you're Box and you hold of that corporate data and you sell to enterprises and you think agents of the future, then you can see a growth path down the road. But Dropbox is famous for serving designers, you know, and then Figma and Canva came along, so it's just, it's a tough place to be.
- [27:15]
Jason
Interestingly, Dropbox created a bunch of new products. They were trying to get into the application stack and then I think they stopped. So they bought a bunch of products, right?
- [27:27]
Alex
They bought a few. I went to their office back a thousand years ago and they bought or launched Mailboxing. They bought something.
- [27:31]
Jason
They bought mailbox, yeah. In 2013 we acquired mailbox because we believe the way it was making mobile email better, we believed in the way. In 2014 we launched Carousel to create a new way to experience and share photos. With both, we aspired to extend the simplicity of Dropbox to other parts of users live lives. Building new product is about learning as much as it about making. It's also tough choices. Over the past few months we've increased our team's focus on collaboration, supplying the way people work together. In light of that, we've made the difficulty decision to shut Carousel and Mailbox.
- [28:01]
Alex
I was in San Francisco at the time and I went to the launching event for Carousel and it was, I think this is the time when everyone was trying to replicate the Apple Keynotes that were like in person, you know, they would sit up there and talk about things and it was such an oddly packed room. But all the media knows each other because there's only like 20 of us. And so we could all tell that we were in a little area and that everyone else was like from the company or their PR teams. And there was so much AstroTurf clapping after every single pronouncement from the company's leadership that it was just kind of surreal. And then Carousel kind of flopped. But at that time, Dropbox was this absolute preeminent member of the technology scene. I mean Jason, it was worth like what, seven, $10 billion back before that was normal.
- [28:42]
Jason
Yeah. They launched a TechCrunch 40. So I remember coaching them at Sequoia's offices and they were incubated in Sequoia's offices. It didn't work at the time. I remember sitting with Drew and his co founder and they were having a hard time getting the little system tray to work. But boy did they learn a lot. These were really sharp cats. And they had learned that making it simple and putting it in the system tray on a Mac was the magic. At that time you had to go set up a server, get an FTP and it was just hard. And they just were the first and they had an offer to sell to. Steve Jobs famously pitched them hard on becoming the Backend there and that would have been I guess probably a good trade if they got all stock in Apple. But they also have a Docusign competitor and I guess that is something people don't understand. I think a decent part of what Dropbox does for people is did they buy HelloSign?
- [29:41]
Alex
I think they bought hello sign for. I think it was a low nine figures. I'll get the numbers for us.
- [29:44]
Jason
So this is, you know, one of the hard things to do is to compete with Apple, Google and Microsoft in the suite of products now competing with drop with DocuSign a little bit easier, right? But I just saw like Calendar ling the Calendly product where like it gives you hey, here are your open times. Gmail just added that. So Calendly was launched 10 plus years ago. A lot of people love that product.
- [30:16]
Alex
Yeah.
- [30:18]
Jason
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- [31:31]
Alex
Startups, that's your opportunity. That's how long it takes for Google to come after you. A decade.
- [31:36]
Jason
It's like a five to ten year window. I know. In all honesty, I think the time between which you make an innovation and a big company commoditizes it as part of their default product is between 5 and 10 years on average. So for Grammarly as an example, like when will that product be built into Apple or you know, Android like they do spell check in those products but they don't have like a true Grammarly competitive when would speechify a product I love when would that be abstracted into the platforms. I usually like 5 to 10 years is what I would say. And I don't think this is Google Docs have a signing platform yet. I wonder if Google Docs has.
- [32:17]
Alex
I don't think so. But Dropbox did acquire hello sign in 2019, as we thought. Jason and I was right. Low nine figures, $230 million in cash. And it brought also 80,000 customers over, which is great, but it just doesn't seem to have quite worked. And the thing is, I'm not trying to be rude here. If you're, if you're a Dropbox fan, employer, whatever, I think it's a cool company, smart people. It's just interesting to see how sometimes you can get public and then, and then struggle.
- [32:42]
Jason
If you follow me, x.comjason or instagram.com jason we do a thing called Bang Bang, which is you hit two restaurants for dinner or two restaurants for lunch, and you try different things, but you don't eat a full meal at either. And so for like two days I was out with my friends and we just, I had, I have lists that I keep for the year of the best places to eat. And instead of going and eating full meals, three people or two people will just order half and you just try everything and you just go to the next one. Man, I ate so much good food. Can't wait. That was like one of the reasons I wanted to do this founder university in Japan is I go there skiing once a year. So I go twice a year now. Bring the kids. It'd be great.
- [33:18]
Alex
You and I have talked a lot about how eventually this is going to come, a time when a Waymox hits somebody and kills them. And then we were curious what the reaction is going to be from the market, from regulators, from individuals out there. We kind of got that situation. So recently a Waymo in the Mission district of San Francisco ran over and killed a beloved bodega cat. Now, if you don't know what a bodega cat is, it's a cat that lives in the small corner markets that populate major metro areas here in the US and they often roam, roam around the neighborhood. This cat in question, KitKat, was a frequenter of the delirium dive bar area of the Mission, a place where I've spent a lot of time and drank a lot, frankly, and love it. And locals are pretty torn up because this was a character from their neighborhood. Waymo said, yes, we did kill the cat. It, quote, darted under our vehicle as it was pulling away. We send Our deepest sympathies to the cat's owner and the community who knew and loved him.
- [34:13]
Jason
Let me guess. The people in the mission are making the dying cat a reason to ban Waymos. Now they want to ban Waymos, Right? Is that what's, is that where this is all going?
- [34:23]
Alex
Not really. And that's why I wanted to talk about it on the show because San Francisco is a tale of two cities. It has got a bunch of OG San Francisco types who tend to be crunchy liberals, kind of the same group that I grew up with in Oregon. And they did kick up some fuss. There's shrines, there's complaints. There's one person in this city, it's a Kit Kat memorial and it's super cute and. But what matters here, we've reached a moment when something alive that was beloved was killed by a self driving car in a town full of crunchies. And based on all the coverage that I can read, the reaction is kind of like, well, that's not going to change much. So I think this is actually very positive for the progress of self driving cars because as we know, human drivers are much more dangerous and they kill a lot more animals. So I'm glad, Jason, that Kit Kat's untimely demise RIP is not going to preclude our ability to prevent future KitKat deaths.
- [35:13]
Jason
They should probably do a telethon with a tribute concert background. They should do a tribute concert and a telethon for KitKat quietly. And we talked about it here on the program. In Arizona, a motorcyclist died involving a Waymo near the Tempe campus. And here you see the headline breaking motorcycle is dead after accident involving a Waymox. Police investigating the accident which involved the Waymo motorcycle and third vehicle. So the journalists here are using what's called restraint and accuracy. The Waymo did not hit the motorcycle. A Waymo was involved in a car accident resulting in a death near Lemon street, according to police. 1:38pm 1:30am Waymo spokesman told AZ family that a motorcycle rear ended the Waymox before a second car struck the motorcyclist and continued to drive. This had nothing to do with the Waymo, obviously. So here they could have said motorcycle is dead after rear ending a Waymo. So I would give this the state press like a C in terms of headline accuracy here. They should have just said it rear ended. Instead they said involving. They didn't say Waymo killed. And so this is where like the press needs to just keep doing a little bit better.
- [36:40]
Alex
Jason, the Reason why they didn't do it that way is they're not ascribing blame because then you can get sued. And then if you're the. What is this? The state Press with their $4 legal budget. You want to get sued, you want to go out of business? No, you hedge. So they said what's accurate and entirely defensible in the headline. If you want to increase legal protection for media companies so they can be a little bit more funsies their headlines. Sure, but I'm not going to knock them for that one.
- [37:04]
Jason
Well, it says here that Waymo said it rear ended the. The Waymo. So they do have. They did take the time to get that quote. So I think they could have been more. I'm not saying they're completely inaccurate here. It's not like they said the Waymo killed. But I feel they could have been a little more accurate here. The main point here is this happened, by the way, September 14th.
- [37:27]
Alex
Yeah.
- [37:28]
Jason
So this was but two months ago and nobody knows about this. Waymo inadvertently killed the cat. People are not losing their mind that much. Except for you have to get the video of the local supervisor. This supervisor is bonkers. Wait till you hear the lunatic. And San Francisco is known for these like lunatic supervisors. The video of this supervisor is unbelievable. I thought this was performance art or AI or sora.
- [37:59]
Alex
All right, Jason, you want to see the video? This is Jackie Fielder from the San Francisco city government. And here she is outside of the bodega in question round is Mart talking with a bunch of teamsters from the union behind her.
- [38:10]
Jason
For any waymo other TNC lobbyists in the crowd. We are absolutely coming for your bottom doll. Price of power coming for you. And this would not have happened if we had this choice much earlier. Yes, again, it's about democracy. Yes. There's a quote by Justice Brandis who basically it said that we can either have wealth concentrated in the hands of a few or we can have democracy, but we cannot have both. That's right. We can either kill cats and have way MOs or billionaires can make more money. You can't have both.
- [38:55]
Alex
I mean, Louis Brandeis was the former Associate justice of the Supreme Court.
- [38:59]
Jason
Jason, what I'm questioning is like what, how does that, what does that quote have to do with an inadvertent killing of the cat?
- [39:06]
Alex
So I, I think what she's doing is she's connecting the inability of local communities to make decisions about their rights roads. And to be clear, I think this is a state level issue, not something you should do neighborhood by neighborhood with the growth of concentrated wealth in the hands of large technology companies. We celebrate the market cap expansion of the MAG7 here on the show. But for a lot of folks, it represents a risk to democracy as they have more and more power, they can more influence policy and so forth to the point to which you can end up with less local say in how things run. And I think city level people are always going to be very focused on their local community status.
- [39:40]
Jason
Number one, we don't celebrate it here. We report on it, but we don't celebrate it. I mean, so the market cap's. The market cap. I don't know if we celebrate it.
- [39:47]
Alex
I mean, we don't not celebrate it.
- [39:50]
Jason
I mean, celebrate's like a strong word. We report on it.
- [39:53]
Alex
Okay.
- [39:53]
Jason
Like, I mean, I, I'm pleased if some of my, my share prices go up in my retirement account, I suppose. But the question here is I think she's more concerned about the unions and the money being made and who gets the money? The union. That's why she's got the union people behind her and that she's talking about the dollars. I don't hear much talk about the cat. I think she's concerned about who gets the money, the unions, workers, or the big tech companies. There's an interesting question of who gets to decide what happens on their roads. There's a group of people who think it should be federal because we have federal speed limits. And if you want federal dollars, I think you have to reasonably have those speed limits. But some people have their own speed limits state by state. And should states have their own ability to choose? I had that debate with Chamath. I was like, yeah, you know, California's standards actually drove a lot of the clean air that we now breathe.
- [40:53]
Alex
Yes.
- [40:54]
Jason
So I was kind of in favor of California doing that. And if the car companies say, you know what, instead of making two versions of this truck, truck will just make the one that we can sell in California and other states. That's the choice of the company. They could also opt out of being in California and sell to the other 49 states, the dirty one. So I, I kind of like that the states can lead their own decisions. I am concerned if they make too many choices because we see that with gambling, if you want to play online poker, like each state has to make decision and then you have to have an IP address. So it is annoying to consumers.
- [41:34]
Alex
Yes.
- [41:36]
Jason
So I think the way to do this is to get consensus from states over time. And then if you get to the majority of states, 35, 40. There's a certain number where, hey, maybe going for the federal mandate makes sense.
- [41:52]
Alex
Sure. But individual states have shown, just in the case of AI regulation, Jason. And that this is a very popular thing to retain for themselves. I mean, Tennessee, famously lefty state. I'm kidding. Wanted to protect its music industry. Right. In the case of IP theft from AI companies, Texas passed AI regulation. I think it was earlier this year. We point to a lot of fingers at California for being a bit too regulatorily happy, but it's a, it's a pretty much Pan American issue now. The reason why I really wanted to talk about this though is I think it's, it's interesting because I was expecting frankly a bit more forceful public response to this because it seemed like the perfect San Francisco storm. Right. Bodega cat, mission, dive bars, Waymo. It's like the guy who got punched in the face in San Francisco for wearing the Google Glass. Like it was the perfect story for the perfect.
- [42:38]
Jason
I think it was actually a woman, by the way, who got punched.
- [42:40]
Alex
It was the woman who got punched in the face. But there is a growing buzz in the background of AI criticism. Not from the people who are like, oh, it's gonna take over the world. And not from the people who think that there's too much debt going into data center construction. But like the Sanders Warren wing of Democrats, the Hawley wing of the GOP are all very worried about job destruction. Right. And we're seeing a lot more pushback against data centers by local communities who think that there's not enough benefits for them to take on the power and water requirements. We're seeing more data center projects stall. And it seems like there's like a broad loose pushback against certain AI technologies. And I'm curious if we've crossed the hump in self driving that people are now kind of like, okay, this is coming, it's better, we'll get used to it. But I don't think we've reached that point in a lot of other places. And I think that as we discuss tech and startups in the next year, we should just keep our ear to the ground a little bit about what folks out there think, and not just the folks in our conversation.
- [43:42]
Jason
It's pretty clear that there is a growing tension around job displacement. You know, there's a group of people who believe it's like decel to think that it's coming to even bring it up. Some people don't want you to bring it up. I Have friends who are like, hey, can you stop talking about this? Literally, I have friends who are like, hey, you're making too big a deal out of of it. And I'm like, am I? Because math, you know, it's just pretty obvious to me. And I think there's a group of people who are saying, myself, Bernie Sanders, Elon Musk, this is going to be an issue. The founder of anthropic was on 60 Minutes last night.
- [44:22]
Alex
Dario Amadei. Yes.
- [44:24]
Jason
And Dario, I guess we have the clip here. We can play it if you have the clip of him.
- [44:29]
Alex
I was going to point out that even the Trump administration is saying that there may be a little bit of a, quote, quiet time in the labor market due to AI.
- [44:36]
Jason
Just quiet time defined as what?
- [44:38]
Alex
Lower levels of hiring due to AI adoption. So my point is, Jason, you're not being uniquely loud here. If the administration's aide has it, can say it, why can't you?
- [44:48]
Jason
There is definitely concern in the Trump White House for sure over this issue. In fact, I know there is because JD talked about it at the AI summit. And you know, at the AI summit everybody was like super excited about all this stuff. But you know, there were like, you know, in the background and you know, people talking, you know, in the lobby about, hey, yeah, we're going to have to think about this and what are the strategies. So I wrote a piece, I think just right before. I think I wrote the piece when I was in, I think I published it when I was in Saudi or Japan where I just went through Amazon. I think studying. Amazon is the company to study because you have to look at what technologists are doing, not what they're saying. What he said was, oh, the 30,000 layoffs we did, that was for efficiency. It wasn't really AI based. But before that, Jassy had said, hey, big AI things are coming. He said that in June. Then we had this leaked report from a year earlier that they were doing a PR campaign or doing communication strategies of calling the robots that were replacing jobs and displacing future jobs as cobots because they were trying to figure out a way to soften the blow of not hiring 600,000 people. And they are the company that has installed the largest number of robots, I think, of any American company. They're also the second largest employer in the country. So it's Walmart, then you have Amazon and then I think Uber, maybe collectively with all their drivers and doordash. If you put those two companies together and made those part time gig works into full time they would probably be bringing up third place position. All of those companies, two of those three are really focused on this. Uber and DoorDash are investing heavily in self driving technology. DoorDash in fact has their own speeder bike that goes, you know, and drives in the car lane to deliver. So they're going to get rid of dashers as quickly as possible. Uber is investing in multiple companies now. Do they want to get rid of their driver network? No, that's an asset they have. But they realize that the self driving technology is coming so maybe we'll have those people doing different jobs on the network and they've stopped recruiting drivers in the markets where there are waymos. So let that sink in.
- [47:07]
Alex
That is a sign of the times.
- [47:10]
Jason
So recruiting of drivers is like a key thing in the history of Uber, DoorDash and, and Lyft. It's expensive. They were in a dogfight to do it. The workforce was transient at times. They would last six months, they would last two years, then they would get a full time job. So you had this like revolving door thing and then whoever had the most drivers had the most liquidity. But to stop the outreach to get more drivers in a market tells you that they want the existing drivers to get the jobs, not putting new ones in there and then having everybody make 10, 20, 30% less as the self driving comes in. So again, you watch what companies do with their dollars, you watch what they do in terms of hiring. And what you get now is not quiet quitting, but quiet hiring. There's a quiet firing maybe, or quiet hiring. There's a quiet freeze. There's a quiet hiring freeze I guess would be the most accurate. Nobody's talking about it, but there's a hiring freeze that has very quietly been on and there's been quiet firing, quiet quitting, and now there's a quiet hiring freeze. Why is there a quiet hiring freeze? Why would I phrase it like that? Well, people realize, well, AI is going to have an impact. If I hire people this year and that impact is realized in the next two years, I'm going to be firing that same person. I just spent six months hiring a year training only to fire them. So the writing's on the wall folks. And that's what the Trump administration is referring to there. When they say quiet, what did they say?
- [48:51]
Alex
Quiet time. AI could be causing a quote, quiet time in the labor market, according to Hassett. But the thing is, if you go back to the AI summit, Jason, because I went through a bunch of quotes prepping for the show today, trying to find illustrative things. And JD said, the vice president, I'm sorry, said that if the robots were going to take our jobs, wouldn't they have already or something like that? He'd a very non concerned vibe that he put out about this. And that struck me as interesting and bullish for near term AI investment, but not what I kind of foresee happening in the labor market over the next 18, 24 months.
- [49:24]
Jason
Why would the greatest companies in the world, the most efficient companies in the world, take 40% of their profits, 50% of their profits and deploy the greatest infrastructure project in the history of humanity? Why would they do that if they didn't see an opportunity? So they do. They see a major opportunity. What is the major opportunity? It's to replace humans. So if it's to replace humans and make humans more efficient, will other jobs show up in time? That's what I don't know. That's what David Sachs doesn't know. That's what everybody in President Trump doesn't know. Bill Gates doesn't know. Larry and Sergey doesn't know. Nobody knows. Nobody knows that. What will happen over that timeframe? Will new jobs be created? We have the lowest unemployment of our lifetimes right now and we had massive immigration. So with massive immigration we have the lowest unemployment of our lifetime. Something good's happening in the labor market. Something's changing as well. This is what happens during a change. There is opportunity. The opportunity for startups right now is to build tools that make people superhuman. Not to shout out superhuman which is now coda Grammarly and the superhuman email product shout out. I'm a shareholder. Great job to the team over there. But making people superhuman is the trend. What happens when people become superhuman?
- [50:48]
Alex
You need fewer of them, Jason, or.
- [50:51]
Jason
You can create more startups and create more opportunities. So we're going to do this week in AI. Part of the reason we're going to do this week in AI is to take teach people the spin off show that we're going to do and we're doing demos and Oliver has been doing great demos. Yeah, Oliver, shout out to Oliver. We'll have some more on this program and you can look in our, you can look in our show notes for links to the this week in AI newsletter that we're just, you know, we're piloting right now. We're doing some sample demos but I charged my team with doing a couple of demos a week of how to use this and we had a demo on how to make music a Couple of weeks ago and we'll have more demos like that coming. Just how to use this technology to be better at your job. What that means is there'll be more startups, there'll be more podcasts. So will we be able to produce podcasts faster and launch more of them because of this technology or will we just say we need less people? Let's stop hiring. Because one video editor can do the work of two, one producer can do the work of three. Both of these things can be true. We'll see if people use it to make more profitable stuff or not.
- [52:04]
Alex
This week in AI or TWI. AI.substack.com Jason, I know we have to go in a second, but have you seen what's going on with crypto prices? This is not in the docket. This is just me freaking out a little bit.
- [52:16]
Jason
Yeah, Bitcoin had a surge because more regulations, a crypto friendly presidency and it went up to 125,000.
- [52:25]
Alex
I guess 118 is what I saw. Now it's down to just under 92. And I've just been checking this.
- [52:31]
Jason
Oh, it's under.
- [52:32]
Alex
Whoa. Yeah, you see? I mean this is, this is what I'm talking about. I wonder if this is indicative of anything else regarding sentiment. Is this part of the risk off vibes we're feeling or is this uncorrelated?
- [52:43]
Jason
Let's just check the high of bitcoin because I remember 120something in my book. So I'm on it. Okay, no problem. So bitcoin I think had 122, maybe 123, and it was 90K before President Trump came in and we were going to have crypto regulation as opposed to this sort of crypto winter.
- [53:07]
Alex
You are correct. According to Reuters, in early October, 1, 25.8 thousand dollars per coin, I was off by 7,000.
- [53:14]
Jason
So Bitcoin obviously is worth following since it is the gold standard, no pun intended. But if you look at the one year chart, you know, right at the pres. As. As it became clear that Trump was going to win, which I think was, you know, basically in the spring it was becoming clear that Biden wasn't up for the task. And you had sometime in the spring of 23, it was becoming clear to people then into 24.
- [53:46]
Alex
So yeah, this is the one year chart we're looking at here. And so you can see Trump gets sworn in around here. Bitcoin's about 100k. Had a rough summer, shot up to some absolute record record highs. And then we've had a pretty sharp decline. Now, bitcoin is basically flat on the year, the last 12 months, I should say.
- [54:03]
Jason
So I think in the spring of 2024 is when you got the sense that Trump was going to win. That is where crypto, the crypto intelligentsia realized, hey, he spoke at that crypto conference. I wonder what the date was. He keynoted that bitcoin conference. But at some point, Peter Thiel, whoever told him, like, go all in on bitcoin, go all in. And he did, he did a keynote at a bitcoin conference. Let's look up that date. It might have been June of 2024. And I think the first debate was in June of 2024. If you go to June of 2024.
- [54:41]
Alex
July 27, 2024 was at the bitcoin conference, Jason.
- [54:47]
Jason
So if it was July, it was 64,000. Bitcoin was trading roughly 64,000 when he spoke at that conference. And I think that that's when it started to really start to rip. So if you go July 13, 2024, it's trading at 59,000. You said, what date was he, did he give that keynote?
- [55:07]
Alex
July 27th.
- [55:08]
Jason
Perfect. So July 27th, it's trading at 67 or so. 66, 67. And then you go right to October, November, boom, 100K. So by December, it goes to 100K, he wins. That was the spike when you saw the time to make the trade. The time to go all in was when he gave the keynote at a bitcoin conference. Why? That means, you know, everybody around him was advising him, hey, crypto is going to be a big win. It's a constituency.
- [55:39]
Alex
He embraced it.
- [55:40]
Jason
This is why the Democrats are idiots. Literally could have done any embracing of technology, any embracing of crypto, they did the opposite. They said ban the billionaires, they said ban crypto. They didn't invite you on to the EV summit, whatever. Back in the day, all of that stuff stacked up in the technology community and the back channel technology community was, hey, Biden is like captured by Elizabeth Warren, Bernie Sanders, they hate tech, they hate billionaires, they hate crypto. That is why they part of why they lost this election. Trump did like two really smart things. They realized the working man and woman didn't appreciate the borders being open. Number two, the top half of the country wanted less regulation. They wanted a more favorable tech and crypto administration. Boom. They captured both of those groups. They captured both of those groups and that was when you should put the trade on. Now it peaked just correlates with how people feel about the economy.
- [56:38]
Alex
That's what I'm trying to get at. It feels like a sentiment shift. Yeah.
- [56:41]
Jason
So people right now see a soft, a soft labor market or softening still record lows of our lifetime. So it's not disastrous. But when they see that corporate quiet period happening in companies, the quiet hiring freeze, when they see the layoffs happening, people get a little shaky because we are in a consumer driven economy. Two thirds of every dollar spent is consumers. Then they see the layoffs businesses, okay. And then they just realize, hey, things got overheated. People were going all in on the AI trade, all in on the crypto trade, and maybe it's not going to be a great consumer market. So you have these like two conflicting factors that are happening at the same time. What that means is I don't know if this is, I guess this would be a correction, right? 20% is a correction.
- [57:33]
Alex
Technically, 10% is a correction. 20% is a bear market.
- [57:37]
Jason
So, you know, it is then a bear market pretty clearly for crypto. And then the stock market is in correction territory. So if you look at Nvidia stock stock or Robinhood or, you know, anybody in the AI space, we're probably, you know, in this schizophrenic market where it's topped out and we need a couple of little corrections. We need those 10% corrections. Yeah, it's just, it's too, the market's too, was too hot. That's all. By the way, there was a good question from the audience that came in. You know, we do this live, folks. YouTube.com if you go to thisweekinstartups.com YouTube will automatically subscribe you to the channel. You just got to hit the bell to get an alert. Or you follow x.com, twi startups, you'll get an alert every day when we go live and you can ask questions. Here's a question from Craig. From your experience, what do you see as a key strategy founders should consider when navigating the current funding landscape? Okay, yeah, great question. Current funding landscape is you're up against high growth companies that are raising money at high valuations. If you're not high growth VCs have high growth companies they can invest in. There's enough options on the menu to invest in high growth companies. Those founders are being very savvy and hiring two rounds, three rounds a year. So what should a savvy founder do if they find themselves tripling revenue year over year? They find themselves growing rev doubling revenue every six Months. They should raise into that. They should raise money into that growth even if they don't need it. They should take the dilution and take the money off the table because what if their growth slows? Well, they will regret not having raised money.
- [59:20]
Alex
Yes.
- [59:21]
Jason
So you make hay when the sun shines. If you're growing and you have a war chest. So let's say you raised $5 million in your seed round and you're growing and you haven't touched it, but you doubled revenue in the last five months. What should you do? Well, people would say, well, you have 5 million, you're doubling, you don't need the money, and you're at break even or slightly profitable, just keep growing. No, you should take your 5 million in cash you have and the $5 million, let's say in revenue you hit and you should tell people, listen, we doubled our revenue in four months. We're going to double it again. We'll be at 10 million. Therefore, we should be raising at a $30 million, a $300 million valuation. We should get 60 times our revenue. 60 times 5 is 300 million. You should raise 30 million at a $300 million valuation. Put it in the bank. Now you got 35 million in the bank. You start doing marketing, you hire, you know, more developers, you hire more marketers, you do more content marketing, you do a launch video for a million bucks. And let's say you do happen to get to that 10 million number, okay, now 60 times 10 million is 600 million. You should raise again. You should raise three times in a year and dilute another 10% and raise another 60 million. Now you got 60. Let's say you spent of the 35 million from the first two rounds, you spent 10 of it. Now you got 25 million. You're sitting there with 85 million. Let's say you get to next year and you hit 100 million, what should you do to raise again at a $6 million valuation? What does that mean for startups that are not growing? It means those investors have placed bets not on you, but on the momentum of those other companies. And you are sol. You're sugar out of luck. You've got to figure out a way to get high growth, which means, hey, go to an accelerator and figure out, you know, and just take the 125k, 250k, do a seed round with people who couldn't get into those other rounds or, and then raise a small amount of money and try to match that growth and try to get that growth going. And study those other companies. But if you're trying to sell based on a story right now, unless you got a track record, it's unlikely. That's the challenge. Some founders will try to raise Alex on a story that they're similar to those other companies. And what investors will do is say, okay, I believe you contact me in six months after the product launches and you have 10 weeks worth of data. Prove it. So then what you need to do is lower your valuation, raise a smaller amount of money and get the product to market and just start showing you're part of that cohort. I'm sorry that it seems unfair to people, but it's a marketplace and the marketplace is screaming, put money into the momentum stocks. The same thing happened in the public markets. Everybody started investing in the Max 7 and the Max 7 had higher growth than the, you know, not so magnificent 700 stocks. And those stocks are valued lower and people are less interested in them. Sorry, it's just the nature. People go for the momentum.
- [62:28]
Alex
All right, Jason, so perhaps the biggest news today in startup land is that Jeff Bezos is going to be CEO again.
- [62:33]
Jason
What?
- [62:34]
Alex
Not of Amazon. I know, hear me out though. Not of Amazon. Andy Jassy is still in charge over there. Instead he's going to be the co CEO of, of a company called Project Prometheus. He's going to found this company with Vic. I'm going to ruin his last name. Bajaj, who's a former Google X employee, former founder of Verily, former founder of Foresight Labs. The company has raised $6.2 billion. Just came out of stealth and it's going to help kind of bridge the difference between AI systems and the real world. Companies like Periodic Labs, Emerald Cloud Lab and Radical AI are also working in this area. But the idea is to help bits and bytes work together better and essentially make AI work for the automotive, aerospace and just physical industries. I think it's fantastic.
- [63:18]
Jason
What we're talking about is real world AI. Does that mean humanoid robotics? Does that mean robots?
- [63:25]
Alex
I think, I think does. I don't know if it's humanoid robots specifically. I think it's more like getting enough real world information into the system so that way the AIs can do some of the work for us. But you can't do reinforcement learning with just more words if you're trying to do stuff that works in the real world. So these companies want to, I think, create systems of like laboratories, for example, to bring real world information into AI models so that way they can learn from the actual world and therefore make predictions about the actual world.
- [63:54]
Jason
If the Emerald Cloud Lab and Radical AI are being pitched as the comparables, that means either a journalist or somebody inside of the company leaked that information. So either that was intentionally told the PR people told journalists that, or somebody internally made that comparison or somebody made that comparison to investors. So the way I would try to back into this is who made that comparison to Periodic Labs?
- [64:27]
Alex
So Periodic was New York Times and then Emerald Cloud Lab and Radical AI were for me trying to find more comps to the company to expand our convers conversation.
- [64:34]
Jason
Perfect. So Periodic Labs came from the New York Times. So then you have to ask yourself this is like a little media. I'm just giving you a little media savvy training for the audience.
- [64:44]
Alex
Yeah, yeah, yeah.
- [64:45]
Jason
The New York Times didn't come up with that idea themselves. In all likelihood it's a 10 chance that the journalist said when they heard stuff, oh that like Periodic Labs. And somebody said yeah, similar, but maybe a little different. What in all likelihood happened was the journalist doing a random act of journalism, talked to an investor who maybe invested, didn't invest and said oh yeah, so like are there contemporaries to this or is anybody else in the space? And they said this company is similar to, or what they're doing is similar to Periodic Labs. So let's pull up the Periodic Labs website and this is where we can start to really understand. And then what you would do is in terms of our diligence, look at Periodic Labs employees that have gone from LinkedIn on LinkedIn, periodic labs employees on LinkedIn and how many of those Periodic Labs people are now working at Prometheus? This is how I do diligence, right. This is how you can figure stuff out just from first principles. Looking at Vic's background, he, he worked at Zara Therapeutics. So this is how I do research into companies, you know, and this would be under the concept of competitive intelligence. So if we look here, here he was somebody who worked here, it's November, they announced. But he worked at Foresight Labs and he worked at Foresight Capital Management. We provide capital and support companies with transformative projects and services becoming healthcare leaders. So it's the healthcare space. And he worked at, was the co founder of Zaria, Zaria X A I R A Therapeutics. So obviously and he's a professor at Stanford of Medicine. So this is definitely doing something in Labs. So my guess is they're going to do something around LLMs that study and work in chemicals and biology to make.
- [66:51]
Alex
Better the way that I kind of tried to break this down because the company itself is pretty much under wraps. This was a time scoop and there's not a lot out there on them. So we're working with a couple of data points here. I think the crossover between the digital realm and meat space is going to be very, very important. We're getting good at rag, we're getting good at reinforcement learning. But if we're going to bring embodied AI to so many physical products, be it optimus, be it figure, be it Xpeng's humanoid robots, etc. Jason, we're going to need tons of data and I think we're going to have to go out there and get it. And so I don't know if this is, you know, wet labs en masse.
- [67:27]
Jason
Or it's going to be AI driven labs. I think it's not going to be going up against based on the founder, the, the, the other CEO and based on my deduction from Amazon, having a lot of bets in robotics. Yeah, Amazon doesn't need any bets. Bezos would be competing against Amazon. That would be no bueno. That would be read especially as CEO because then he'd be CEO against his company. So he can't be doing humanoid robotics. Can't be a figure competitor, can't be an optimist competitor. And then they drop Periodic Labs, which is doing AI driven autonomous laboratories. This is a thing taking the actual laboratory, then running more experience and having AI do the experiments, like literally the robotics in a robotic Laboratory. I remember 10 years ago we were pitched by a company that was doing robot arms to just make the literal running of an experiment faster because the people who run those experiments are humans and are fallible.
- [68:28]
Alex
It's a lot of pipetting often, yes.
- [68:30]
Jason
That drip dropping and all that stuff. It's inaccurate. They make mistakes, they get tired, they're fooling around in the office playing Candy Crush. And Periodic Labs is doing that. Periodic Labs was dropped. This is going to be a laboratory company. They're going to try to find new compounds and run experiments faster and then do drug discovery, et cetera, et cetera, et cetera. Great. I don't know why he's taking the co CEO title. He is he co CEO of Blue Origin as well. This might be a little Elon envy here of the CEO title.
- [69:06]
Alex
David Limp is the CEO of Blue Origin right now. Took over from Bob Smith.
- [69:11]
Jason
Does Bezos have a title at Blue Origin? I guess is the question. I wonder if he's going to start being a multi CEO. Multi CEO, multi co CEO.
- [69:21]
Alex
I don't think he has a LinkedIn.
- [69:24]
Jason
Yeah, he's just founder. He's just founder of Blue Origin. Is I. Is, according to Wikipedia, what they say. So interesting.
- [69:31]
Alex
Yeah, well.
- [69:32]
Jason
Well, this is a big deal. The fact that he's taking the CEO title is intentional. They know what they're doing. They know that's going to signal us freaking out that he's going to be in the office, he's going to get off the yacht, going to be a less fashion shows. I think what this says to me is Lauren Sanchez was like, you need to get a job.
- [69:55]
Alex
Yeah, you're. You're around too much.
- [69:57]
Jason
This is a little much like, how many fashion. Because he's had a lot of fashion shows. I think Lauren Sanchez said, listen, it's enough already. We went on a lot of vacations, we're going to a lot of fashion shows, we're going to a lot of Super Bowl, a lot of, you know, fundraisers. Y' all need to get a job. Bezos is now back in the CEO seat. This is extraordinary news. I thought for sure Bezos is going to come back to Amazon.
- [70:26]
Alex
Still good.
- [70:27]
Jason
Still could. I think there's two things left for Bezos. Number one is to go back to Amazon at some point. Possible, not probable. The second is to run for president. Him. And that would be a bummer for his lifestyle, I think, because being pre. So. And he's still young.
- [70:48]
Alex
Like, I think that after the Starbucks guy ran and got demolished, I think that didn't that kind of like, end some of the enthusiasm for running for president.
- [70:56]
Jason
Bezos would be such a great president. Bloomberg would have been a great president. Jamie Dimon would be a great president. Like, I. I do think somebody will want. I think Bob Iger definitely wants to run. Jamie Dimon definitely wants to run. And then Bezos. This would be post Trump era, one of the great things that could happen to America, because what box do you put them in? Like, are they Democrats? Are they Republicans? They're just.
- [71:23]
Alex
Well, it's interesting because JD and Ted are already geared up for 2028. Right. So that does leave half of the slots in the presidential tickets open on the Democratic side.
- [71:35]
Jason
JD Is definitely going to run. And then who. Who did you say?
- [71:39]
Alex
Ted Cruz is also gearing up, and they're on other sides of a couple of things. So there's going to be an interesting argument about folks like your friend Tucker.
- [71:48]
Jason
Yeah, Tucker might run.
- [71:50]
Alex
No, no. Well, listen, let's not get too far down that road.
- [71:54]
Jason
He might run. I think it's not out of the question. I think a lot of, A lot of what people have learned is if you're good on a podcast, you could run because you'll be good in a debate and you'll be good on other podcasts kind of explaining yourself and being entertaining. People want communicators now to run for office. And, you know, my daughters and my friends wanted me. My friends wanted me to run for mayor of San Francisco. And Dan Lori ran. I didn't run. And I was offered a couple of million dollars from friends of mine to run. I don't know if I've ever talked about that here. And I got the domain name mayorjason.com you can type in maryjason.com. given what's happened in New York City, my daughters were like, you should run for mayor of New York and we should move there. And I was like, huh? And if Mondami destroys my hometown, which.
- [72:46]
Alex
He won't, we'll see. I mean, we survived. Eric Adams, who was like the most corrupt man of all time. He was, I don't know.
- [72:52]
Jason
I mean, he was the upgrade of the. The upgrading of the, I mean, yeah, I mean, based on mayors is maybe not the most corrupt.
- [73:00]
Alex
There might be somebody in Providence, Rhode island, or Chicago who gets that title. Hey, hey, look, we're famous for a reason up here. I'm just saying, I think everyone's freaking out about Mondavia.
- [73:10]
Jason
We'll see. We'll see what happens.
- [73:12]
Alex
He's keeping the NYPD intact exactly as it is.
- [73:15]
Jason
We'll see. I mean, if they, I, I'm going to guess right now, crime will be up, taxes will be up.
- [73:23]
Alex
Yeah. All right.
- [73:24]
Jason
Budget deficit will be higher in four years. So we'll see. I mean, it's, he is definitely starting from a low point. You are correct in that the city is at a low point right now in terms of safety. Man, I was there. Every time I go to my hometown, I'm like, this place is dangerous. And just, yeah, something needs to change there. It's. It's pretty lawless. All right, everybody. Another amazing this week in startups is in the can. CautiousOptimism News Tharamahundi subscribe and get Alex every day in his email newsletter. I am, I think calacanis.substack.com if you care about my newsletter, I'm starting to write a little bit more. And most importantly, write a review or put a comment, screenshot it and send it to the team at thisweekinstartups.com team@thisweekinstartups.com or DM it to us and we will shout you out at the end of the episode. We'll see you next time. Bye Bye.