← This Week in Startups
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- [00:00]
Ankur Nagpal
It gives the average person the ability to own a company.
- [00:03]
Jason Calacanis
Unlike AngelList SPVs where it's only accredited investors. This can be accessed by anybody, but it has some very different nuances.
- [00:11]
Ankur Nagpal
What we have is a closed end fund that is available to anyone with as little as $500.
- [00:16]
Alex Wilhelm
So people should be able to invest in these companies that are changing the economy, maybe impacting their jobs. Seems very equitable.
- [00:21]
Ankur Nagpal
Like I do think part of the negative AI sentiment is because so many people feel locked out from actually having access to any of that sort of growth. Today. We can invest in any crypto coin, have a polymarket bet for how long. Trump shakes someone's hand. All of that is perfectly legal. But investing in a startup has his accreditation.
- [00:40]
Alex Wilhelm
Wall this week in startups is brought to you by Render. Find out why 5 million developers are already using the all in one cloud platform render. Go to render.com twist and apply for the Render Startup Program to get 520 to $100,000 in free credits depending on your stage and backers. Vanta Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC 2 report fast. Get $1,000 off for a limited time at vanta.com twist and Northwest registered Agent get more when you start your business with northwest in 10 clicks in 10 minutes you can form your company and walk away with a real business identity. Learn more@northwestregisteredagent.com twist all right everybody, welcome back to Twist.
- [01:30]
Jason Calacanis
It is Monday. It is May 4th be with you and the mall series finale was today Monday and I watched it last night at like 11pm I'll talk about it in off duty. That's the segment at the end of the show. If you stick around to the end of the show we talk about things that don't have to do with startups. We give ourselves a little room to breathe. It could be products, it could be media, it could be lifestyle, it could be politics, it could be anything. But we leave it to the end and boy do we have a docket today. I want you to just go over briefly rapid fire Alex, what's on the docket? We have three amazing guests but before we do that I'm just gonna show you my new setup.
- [02:10]
Alex Wilhelm
Plaud Pin, what you got?
- [02:11]
Jason Calacanis
Well you know plot pit on a T shirt I don't like cause I get these very high necked T shirts and on the side here's a little weird so I attached the clip to my whoop and now beep, beep, boop. I applaud my plot. I put my plot on. Now I've got everything recorded. I have a transcript, I have a summary. Just like a note taker, you would have on notion or the note taker on zoom. Great. But what if you're not on notion and zoom? What if your phone's in your pocket and you just want to take a quick memo. Boom. You pop out your plod. This is a little tiny plod pin. You can get one that goes in the back of your phone. That's called the Plod Pro. Both of these are exceptional because with one button, it gives you a little haptic response. And you're recording. No question. If you're recording. That's the problem with recording devices is you don't know if you're recording. So then you have to take your phone out, your laptop out. You have to check. Nope. With plod, you know you're recording because it's a little red light for everybody to know you're recording. And it snaps right on. You know, it's mag safe kind of situation. So you just boop. And it is so strong. So, you know, when I'm skiing, I record myself. I take notes when I'm on my solo ski trips and I don't lose any of those nuggets of wisdom or ideas or reflections I have. I find it's like pretty great. Yeah. Not losing notes.
- [03:31]
Alex Wilhelm
They also come with a regular wristband if you're into the non whoop side of things. But if you go to plod, P, L, a, u, d, AI, sl, twist. Use the code twist. Save 10%. We cannot recommend the plot node pin s enough. We live and die by them here at Twist because we're always taking notes and we're always doing stuff. And we got to keep it all in order. Less everything go completely haywire on the live show. So pl's a must.
- [03:53]
Jason Calacanis
All right, so three guests across the board here. Everybody wanted us to talk about USVC.com that's Angel List closed end fund. We've got Anor Nagpal on to talk about that. He's a GP over there. Then you guys got John Durbin from shoots. Shoots is the number one Tao Subnet. So we got private markets, venture capital covered. We got Tao, we got crypto plus startups and distributed computing and AI covered. And then who's the third guest today on this week in startups on Twist?
- [04:24]
Alex Wilhelm
Yeah, it's a really cool company called Humwork. We have the co founder and CEO Yash on. And what Humwork does is allows an agent to raise a flag and call a human in to help it get unstuck during a longer work line. Now, we often talk about, you know, humans being helped by agents. This is agents being helped by humans. So instead of calling an agent, you're using MCP to call up an expert. Get some help.
- [04:47]
Jason Calacanis
Love it.
- [04:47]
Alex Wilhelm
It's a really cool idea.
- [04:48]
Jason Calacanis
I love that idea. Humans on demand. So welcome back. Well, actually, I don't know, Ankur, have you been on the program?
- [04:55]
Ankur Nagpal
I have not.
- [04:56]
Jason Calacanis
First time we've all right about it, but. First time we've talked about it, but welcome on the program. I was in another and I had lunch with Naval a couple of months ago. I won't say which one. He's a global traveler and I was talking to him about what's next. I always like to ask my friend Naval from Angellist, what's next. He got me into SPVs. I got him into podcasting. We're always like, what, looking around the curves? And he said, you should do a closed end fund. I said, what's that? Is that like the sweater thing or this thing or other companies doing this is in Cathie Wood doing it. He said, yeah, yeah, that's exactly it. And. And sounds like an interesting thing. I have too much on my plate. I have no time to do it. But Angellist has this incredible funnel. Hundreds of active syndicates with tens of thousands of members. They've been betting on things for over a decade. And now all the fruits of that labor, if I understand, drip, drip, drip can now go into this closed end fund. And unlike AngelList, SPVs, where it's only accredited investors, this can be accessed by anybody, but it has some very different nuances. So anchor usvc.com is where people can get information as low as $500 is the investment. You don't have to be accredited. So tell us what, why you guys launched this product and then what's different about this product other than the couple of little things? I said that what's different than the classic angelist? Here's an SPV put in $1,000 to $100,000.
- [06:30]
Ankur Nagpal
It's interesting. When I first met Naval, I've known him for a long time as well. The vision for what Angellist could become is actually quite close to what USVC is today, which is a single way for pretty much anyone who wants to get involved with the asset class of venture capital to have a high quality product that isn't gatekept the way traditional startups are. People listening to your show know this, but sometimes it blows people's minds that today we can invest in any crypto coin. You can, you know, have a polymarket bet for how long? Someone Trump shakes someone's hand, all of that is perfectly legal. But investing in a startup has this accreditation wall. However, with usvc, what we have is a closed end fund that is available to anyone with as little as $500. What we're trying to do is effectively build a single product to produce a venture venture like returns for the average investor. So if you're someone who wants to allocate 3%, 5%, 7% of your portfolio to venture and you don't know where to start, we believe USVC could be a great place.
- [07:39]
Alex Wilhelm
Ankur, can you define closed end fund for everybody? Because I know you just are talking about it. I know what it means, but I'm not sure that everyone knows. That term of art might help.
- [07:46]
Ankur Nagpal
Absolutely. I'll caveat that like, you know, even the people like this is all new to, to me as well. But the way usvc works is it's a closed end fund, which means you buy it. When you buy in, there's a certain NAV or net asset value. When you buy in, you receive shares at that price and that reflects the underlying value of the assets underneath. So the startups, the funds, whatever. Now let's imagine the startup underneath has a markup or a markdown, the asset value changes and then when you redeem out of the fund, we have, we're going to, we aim to offer quarterly tenders that allow people to sell out of the fund. It happens at the new asset value. So it's a very interesting structure because traditional venture funds lock you up for, you know, 10 years. Typically here this is still not, you know, it's still not a liquid product, it's still venture capital. But the aim is to give people the opportunity for liquidity every quarter up to 5% of the fund.
- [08:47]
Jason Calacanis
Yeah. And a way to think of it, Alex, is it's not an ipo, but people often refer to closed end funds as similar because you issue a certain number of shares, that number of shares doesn't change. Then if people want to sell their shares, then those get priced as some percentage of the nav. Right. The underlying asset value. So when we used to talk about Mr. Sellers, publicly traded bucket of Bitcoin. Yeah. Bitcoin product, you would say, hey, what's the underlying value? So here, if you had anthropic OpenAI stripe in this USVC closed end fund, people might say, hey, at the end of the second quarter when the redemption happens, they might say, okay, it was a billion dollars worth of share. A billion dollars when we essentially IPO'd it, when we offered it, let's take out the IPO term, which say, when we offered it to the market, it was a billion dollars. Hey, the market thinks Anthropic went up, but OpenAI went down. Yada yada. The market might say, okay, I'm gonna buy, I'll buy it. 90 cents on the dollar. So now everybody's down 10%, right? But only a certain amount of people sell maybe up to 5% then, and you have to have demand for that. Then the next quarter, hey, Anthropic goes public. The shares are worth a lot now it goes up. So it's a nice bridge between completely being locked up, except for finding a secondary sale for individual stocks and then you get this great mutual fund. But how the GPS get paid is always very interesting. And that's where incentives matter. Okay, so you have identified a real problem and you put together a, a solid solution and a business model that you believe in. So you're all set to launch your new company, right? Not so fast. If you want investors and potential customers to take your new business seriously, you need to consider forming a Delaware C corp. And that's where Northwest Registered Agent comes in. They're going to give your new company a real identity. That means an address for your public filings, a domain, a custom website, a business email, and of course a phone number. And that's going to take just 10 minutes and 10 clicks. They don't charge hidden fees. Customer service is available around the clock. They're not overwhelming your inbox with spam, and they make it easy to cancel at any time. So get all the advantages of a Delaware C Corp. Independent, regardless of where in the US you're operating from. Visit northwestregisteredagent.com twist for more details. And the links are in the show notes. If you were to look at me doing SPVs, I do mine over at the Syndicate.com there's plenty of them over at AngelList.com or Angel Co I think is still the domain AngelWist.com now. Oh, AngelWist.com there you go. Somebody had sniped it back in the day. So angellist.com, you pay 2 and 20. Typically, I'm sorry, you pay 20% carry. And then you might pay some fees. The fees might wind up being depending on the size of it 1 or 2%, essentially $50,000 a deal, $25,000 a deal that's covered with legal and expense. Now SPVs will charge a load in fee. Some people selling anthropic shares want 10% on the way in and then they have no percent carry. So they're just literally selling the shares. They sell $10 million, they want to make a million. So there's all kinds of different variations there, but in a closed end fund, there's no concept of carry, you just get 2% a year.
- [12:17]
Ankur Nagpal
Because we want to offer this publicly, we're not allowed to charge carry on it. So there is no carry on USVC in some cases. When it comes to early stage investing, our personal opinion is we can't index pre seed and seed companies, there's too many of them. So what we're going to do there is pick fund managers. And in those underlying funds the fund manager could charge carry, but there's no carry from us. And when we go direct there's obviously no carry as well.
- [12:44]
Jason Calacanis
Got it. And you could expect to pay about 2.5%. 2% goes to the GPs in the fund and 50 basis points goes to operations of the fund. If this were to be something in that range, something that range.
- [12:58]
Ankur Nagpal
So our gross expense ratio right now is about 3.6%. And the reason it's that high is it's just a lot of like one off type of fees that don't scale, that will scale down with assets. However, we have an expense limitation agreement for the first year to bring that down to a net expense ratio of 2.5%.
- [13:16]
Jason Calacanis
Got it.
- [13:16]
Ankur Nagpal
Of that, our total management fee is only one. Well, only it's one point, not 2%. It's 1%.
- [13:22]
Jason Calacanis
Got it.
- [13:22]
Ankur Nagpal
The remaining amount is. Yeah. Fund operations or fees of the underlying fund. So when we're a fund of funds, the underlying fund could have management fees and that's reflected in the expense ratio.
- [13:32]
Jason Calacanis
Got it.
- [13:33]
Alex Wilhelm
When you guys put this out, everyone said 1% fees. Great. And then everyone got really, really annoyed that it wasn't 1%. Did you guys do a PR mistake or were people just over indexing on the first number they saw in the prospectus and not actually doing their homework to actually read through the rest of it? Because I read through it and it was pretty clear, frankly, candidly, we did
- [13:53]
Ankur Nagpal
not expect anywhere near the reaction we got. Not because like any of it is inherently surprising, but we thought it would be a smaller deal than it was. And look, net net, it's a, it's a It's good when things become a bigger deal. But it's safe to say the launch was bigger than any of our expectations in every possible way. The positive, the negative, like the pr, the messaging, a lot of lessons learned. Also because we are running a regulated product, right? So I can't really kind of hot respond to people being like, you're wrong, whatever. We have to have internal reviews on the communications going out and stuff. But it was a learning experience running this type of product. I think we learned a lot of stuff. But at the same time, like, this is venture capital. It is a notoriously illiquid, expensive asset class. Right. You can't compare it to a Vanguard fund at three basis points. It's a fully, fully different thing. So we try to benchmark ourselves to how much does a traditional venture fund cost? And now we have to make this applicable, available generally, how can we do that? And we think our fee structure is pretty competitive for the nature of the asset class.
- [15:01]
Jason Calacanis
Okay, so incentive wise, let's break down the incentive. Alex and Anchor. The incentive for a venture capitalist like myself with a fundamental is we want to triple the fund value. We have generous fees that should cover our day to day. So life is easy in terms of going to an office and having a staff, but you're not getting rich off of it. And you have to pay those fees back at the end. It comes out of your carry later. So congratulations, you know, you had a $100 million fine. You were getting 2%. Oh, you're getting $2 million a year for 10 years. You got 20 million. Oh, contrary am I for her now? You got to pay that back. So your carry starts at 120 million. If you return 320 million, you have 200 million in gains. 20% of 200 million. And this would be a great scenario. This is the top 10% of funds, top 5% of funds. Okay, congratulations. You made 40 million over 12, 13, 14 years, which is what it takes these days. You made two or three million dollars a year. If you were a banker on Wall street, you would have made more money. You would have been under more stress. Maybe it wasn't as interesting here. The incentive is, hey, there's no carry. So you're not trying to swing for the fences necessarily. You're trying to consistently grow the assets under management. So Anchor, how is that change? How y' all look at the business? The incentive is to grow the fund size to get that management fee.
- [16:28]
Ankur Nagpal
Yeah, I will say that, yes, like, growing assets is important because that's how we'll know whether we're succeeding if people believe it's a good product. But the only way people will believe it's a good product is, is if we generate returns, like if we become a fee stacking machine or something. I just don't believe it works with this type of product where your track record is public. And I think this is different from traditional venture funds where there's a lot of large venture funds. I don't want to name any who've kind of had these multibillion dollar funds stacked generation after generation.
- [16:58]
Jason Calacanis
Alex will name them. Go ahead, Alex.
- [17:00]
Alex Wilhelm
Andreessen Horowitz.
- [17:01]
Jason Calacanis
There you go.
- [17:02]
Ankur Nagpal
They still have better, but there's just old school funds. I'm not going to name them, but partners who've got it independently, incredibly wealthy, delivering 2x funds for the last like 20 or 30 years. But they do that because they have institutional relationships where they kind of keep plowing it forward. We're a public fund. We're facing additional scrutiny if we don't actually do well, if we're not somewhat performative. This whole thing doesn't really work. So even though performent.
- [17:28]
Alex Wilhelm
Ankur. Not performative.
- [17:29]
Ankur Nagpal
Actually. Good point.
- [17:30]
Alex Wilhelm
Very actually. Sorry, they corrected very different things.
- [17:33]
Jason Calacanis
Yeah. Anchor is going to break out in a show tune right now.
- [17:36]
Ankur Nagpal
Hello, usbc.
- [17:38]
Jason Calacanis
It's the fun for you. No, but you're performing.
- [17:42]
Alex Wilhelm
Yeah.
- [17:43]
Jason Calacanis
Your performance matters here. And so that's what I tried to. I was actually running some cover for you guys when people were like, oh my God, we appreciate it.
- [17:50]
John Durbin
Yeah.
- [17:50]
Jason Calacanis
And I was like, okay, guys, everything's publicly facing. And because you can redeem, if you put a thousand dollars in and you redeem 5% a quarter in 20 quarters, you're out of the fund, they're out of business.
- [18:03]
Ankur Nagpal
Very, very important clarification. It's not 5% of your investment, it's 5% of the entire fund. You could redeem a lot more than 5%. Unless every person tried to redeem 100%,
- [18:14]
Alex Wilhelm
in which case it's done on a pro rata basis. So it's fair.
- [18:17]
Ankur Nagpal
Exactly.
- [18:19]
Jason Calacanis
So worst case scenario, 20 quarters. Realistically, I'm going to guess a fraction of that, a third of that, a half of that. We'll see. But you know, if you are trending towards, hey, you're not getting good assets in there. Hey, those assets aren't performing, or you're not running it professionally, or the fees go too high. Any, any bad performance in any vector means people start redeeming. People start redeeming. Then people in the press Start looking at reporting and say, everybody's redeeming. And we've seen that happen to hedge fund managers or private equity.
- [18:54]
Ankur Nagpal
Private credit has kind of seen this all blue owl in real time.
- [18:58]
Jason Calacanis
Yeah, it's blowing up right now. So, you know, that's. I think reputation matters in our industry. Naval's got a great reputation. Everything he does, he. I having known him for 20 years plus and worked with him for many of those years, he wants to do the right thing. And you understand reputation is. Reputation is the capital. There's tons of opportunities, but you only get one reputation. And if you look at folks who've worked with the public and, you know, raised money, you wind up getting a reputation based on those returns, Based on your behavior. It could be good, it could be bad. It could be good and bad. Typically, it's good and bad. And how you keep plowing for it matters. I think, you know, most of all. And owning the losses is the key. You look at somebody like Bill ackman, I think he's done a great job of. When he did the herbalife short, Was he the one who did herbalife short? Alex?
- [19:53]
Alex Wilhelm
Yes.
- [19:54]
Jason Calacanis
Yeah. He was like, listen, I believe that that was a good short. But I think he. I don't know what the end outcome was. I think he got his ass handed to him. And he has to go out there and own that. And then you get to own the wins. Congratulations. It seems like anchor. It's a great, innovative thing for specifically angellist to do. I know Cathie Wood's doing one. A lot of people are buzzing around this. I got offered to do one with a couple of. With two different partners. I don't have the time for it. So instead, I'm looking forward to. I think we have comm and a couple of other assets on the platform. If there was an opportunity to put them in here, that means I would get liquidity for my LPs. Is that correct? It's not your imagination. Risk and regulation really are ramping up quickly. Your customers don't just want assurances from you. They expect proof of your security just to do business with you. That is why Vanta is a game changer for you and your startup, for your business. Vanta's AI powered platform automates your entire compliance process. Whether you're Preparing for a SoC2 or you're running an enterprise GRC program, or you're doing an audit. Vanta is going to worry about the security so your team can focus on building a great product, Moving your business forward. Some of Our favorite companies like Ramp and Ryder, they're spending 82% less than time on their audits right now because they work with Vanta. We've all heard the rumors about shady compliance and security companies. I don't need to get into the details. They were taking shortcuts apparently with their clients accounts, allegedly. That's why you need a trusted partner like Vanta now more than ever. So get started today@vanta.com twist. That's V A N T A dot com twist.
- [21:35]
Ankur Nagpal
Even though I think with Angellist we have a very unique data advantage where we can kind of have amazing visibility into anything happening early stage we do have the ability to also go in like you know, pick off assets on the Angellist platform. But we're not limited to that. There's nothing in our mandate that says we have to only transact with AngelList affiliated vehicles. And our net goal is we're trying to index venture capital as a whole. So we will back the best emerging fund managers.
- [22:04]
Jason Calacanis
How early will you go?
- [22:06]
Ankur Nagpal
So for early stage we'd rather go with fund managers because it's just very difficult for us to underwrite again a seed company.
- [22:14]
Jason Calacanis
So how would that work? If I have my next $50 million fund, I go to you, I pitch you, you say okay, we'll take 20% of the fund, give us a $10 million slice.
- [22:22]
Ankur Nagpal
Our sweet spot where possible is find fund managers that only write seed checks. So therefore when they want to write a larger series A or series B or series C at scale, we could be their capital partner where we kind of come in and write a check, pay them potentially a small amount of carry. But that's the only way I believe you can scale judgment, which is the hardest part of you know, running this kind of.
- [22:43]
Jason Calacanis
So if we did a deal like that for Launch Fund 5, which if, yeah, if my ballpark, I think I would be going out next year, we would do a handshake agreement. Hey, when I have pro rata I come to you and say would you like some of it or would we codify that? Because my understanding when other I had have other VCs, they just want it to be like a handshake. Hey, you'll, you'll run it bias. How are you thinking about that?
- [23:09]
Ankur Nagpal
This is about relationships with the gps. It's more about our relationship with them. It's not going to be a hard coded sort of thing but like hey, if we're valuable to you, we especially like, I mean maybe you see this but running a syndicate very often for a lot of people is not a lot of fun if they can avoid that. Oh, it's painful with a single check from a trusted capital partner. And if we feel good, we're not getting adverse selection. We're literally seeing the best stuff. I mean, we'd love to kind of keep that be the way we deploy in the future. The other advantage we have is at this point there's a lot of data on fund managers. We can benchmark based on track record pretty well that if we think you're more or less likely to succeed with your next fund, which does give us a bit of a data.
- [23:49]
Alex Wilhelm
How early can you get to confidence with say an emerging manager that may be, I don't know, in kind of the Fund 1 Fund 2 era of their life.
- [23:57]
Ankur Nagpal
We can have predictive judgment with a couple of how accurate it is to realize. I mean it makes us slightly more likely. There's still so much variance in all this data. Like you slice and dice in a million ways. And we'll try and be quantitative, we'll try and look at what percentage of top decile seed deals are you a part of, what percentage of your companies end up raising a meaningful markup. We'll look at all these metrics, we'll rank people. And that still gets you pretty close. It's by no means perfect at all. Because data is so messy with startups, right? We're not looking at like, this is not big data. This is still.
- [24:33]
Alex Wilhelm
Well, and also small data.
- [24:35]
Jason Calacanis
Well, but you know, the other thing is in a hot market, let's say we're talking peak zurp and you're doing SaaS companies. You know, everybody was, I, you know, I'm in 21 funds, 22 funds, and I put 50k, 25k, 100k into a bunch of small $10 million, $20 million funds. And I just say, hey, all I care about is deal flow, but I'll put this money in and support you. You can use my name. And they were sending me these notes like a year later. Oh my God, you know, our entire is like 50%. Yeah, 500%, whatever. And it was like there's like two or three markups in it. I'm like, okay, you invested out of 20 million. Now this thing's worth 300 million a year later. That doesn't make much sense. The revenue has not gone 15x. What's going on here? And I was like, if that's the case. And like literally had this discussion with one fund manager who's like, We're a 7x fund. I'm like, if that's the case, liquidate everything and take the win right now. And they're like, oh no, we're going for it. I'm like, you're not going for it. You've already accomplished it.
- [25:28]
Alex Wilhelm
Yes, you're done, you're done.
- [25:30]
Jason Calacanis
The logical thing to do at 7x would be sell everything and be done. And you know, a young fund manager, certainly myself, my first fund got to that kind of level and I look back on it, I'm like, oh, I did sell in secondary, but man, I should have sold more and I should have insisted on selling more because in
- [25:50]
Ankur Nagpal
some cases we'll be the buyer on the secondary side. Like we're not going to pay the top price. But they're. There's been such little DPI in this entire industry that in some cases we're going, we have the ability rather to go to funds and be like, look, your fund may be a 5x on paper, but if any of your LPs want a cash 3x today, we'll do it. And those are kinds of deals where we'll take both sides. However, when we do that, I'm likely not going to underwrite any mark that's 20, 21 or something and has not been written up since.
- [26:20]
Jason Calacanis
What I like about what you're doing, Ankur, is you're anchoring reality. And that's what these. There are funds now that are buying slices of GP carry. I forgot what they call them. What do they call these funds that they're buying?
- [26:35]
Ankur Nagpal
Everything. I mean we also have the ability to. We haven't transacted like that, but there's every derivative of this. You can buy out LPs, buy out parts of GP carries, you can create hybrid structures.
- [26:45]
Jason Calacanis
What's his name is doing this? Yeah, no, Dave McClure is doing this. There's a name for these funds, but they buy out a 12 year old venture fund and they.
- [26:56]
Ankur Nagpal
A lot of big firms have raised multiple billions of dollars for each of their vehicles to do fund secondaries. Basically.
- [27:03]
Alex Wilhelm
What's the breakdown of. Of secondaries, commits to emerging managers and growth investing in the function. I know those are your three pillars of where you're going to invest, but is it going to be a third or third? Third opportunistic or are you going to wait heavily on purpose in one direction?
- [27:16]
Ankur Nagpal
Roughly a third, a third, a third is like the plan right now. We'll see how it evolves with time. The critical piece for us is managing liquidity because again we aim to provide 5% of the fund every quarter that sneaks up. So we need to make sure we have enough in cash and public equivalents and eventually later stage stuff that could pay off sooner rather than later.
- [27:38]
Alex Wilhelm
Yeah, that makes sense to me. But I'm curious about performance so far. So you've had this on the market for a little bit. How has investor reaction been to it? How many people have signed up to give you money and kind of what's the average, I guess, LP check from the normies?
- [27:53]
Ankur Nagpal
Yeah, so tons of people have signed up. I'm told by compliance to be careful about any exact numbers we state, but safe to say thousands of people have, have signed up, which was above and beyond all of our expectations. People are excited about the early portfolio. However, I'm, you know, I think there's a lot of new investments we'll be announcing soon that I'm pretty, pretty excited about. But yeah, it's the early reaction. As I said, when we launched two weeks ago, it went crazier than any of us anticipated. And it's always fun when you run into those kinds of like, hey, we didn't prepare for this, but it's going to be a really fun few weeks coming up as we start making more investments, announcing more investments. Our goal is to be as transparent when these things happen in a way that most venture funds I've invested in a ton, even the ones that make money, I don't really hear much. I'll get an update maybe once a year or something. The goal here is we want to announce companies we invest in. We think it can also be a win for the right business since there's a little bit of storytelling. It gives the average person the ability to own a company. I do think part of the negative tech, negative AI sentiment is because so many people feel locked out from actually having access to any of that sort of growth as goal is.
- [29:12]
Jason Calacanis
Yeah.
- [29:13]
Alex Wilhelm
So I think it's a great point. So people should be able to invest in these companies that are changing the economy, maybe impacting their jobs. It seems very equitable. But the fund's capped at, I believe, $1 billion in its current form, which is a lot of money in the abstract. But compared to the valuation of like Xai, your number one holding as of March 31, it's pretty de minimis. So if you want to get people access to these companies and change the conversation about AI, why, why 1 billion? Why not 10? Why not 100?
- [29:38]
Ankur Nagpal
So, I mean, again, we are thinking about fund building and firm building in Stages. Stage one is, you know, path to a billion. As we're approaching it, we can kind of revise our goals upwards, but it's very difficult for me to run a whatever, 20, 30, $40 million fund thinking it could also be a $10 billion fund, right? So like you kind of think about it in phases. Phase one of this journey is the first billion and let's try and spend the next, you know, I don't know, one, two, three years building the best billion dollar fund we can and then kind of expand our ambition.
- [30:13]
Jason Calacanis
Big cloud providers may offer you cheap compute, but you'll end up paying the difference in engineering costs and hiring extra developers. You don't want to waste time configuring virtual networks, none of us do. Or your access policies. You want your team building your product. So it's time to look at Render. Render is the all in one cloud platform for developers that allows you to deploy, scale and secure your apps and agents with zero ops. Most cloud platforms ask you to split your focus between product and infrastructure or they force you into platform constraints. You know you're going to aggro in six months, but just connect your GitHub repo to render and you are live web services, cron jobs, the whole stack in one platform. It's time to find out why 5 million developers are already using render.5 million. Go to render.com twist and apply for the Render startup program. You'll get anywhere from $500 to $100,000 in free credits depending on your stage and who your backers are. That's render.com twist. No, it's perfect. I think it's. This is very valuable. I've been looking for a way to send somebody to a vehicle where they could start experimenting. I get a lot of people asking me how do I dip my toe and I always tell them, well, if you join our syndicate and you're accredited, you know, you can do as low as 5k per deal. I think that's our minimum. And then sometimes I'll let people even do like 1, 2 or 3k if they ask nicely. And we have room in the cap table in the spv. But for, you know, normies who are non accredited, at least for now, this is a great way to do it. And we're going to see. I had the chair, the new chair of the SEC on the all in interview program and he told me he's going to make this qualified investor test eventually, sophisticated investor test like they have in some other countries. So I'm sure you're following that as well. Yep. And, and if that happens in the next year or two, hey, that'd be great for all of us. We could have people come in and do small checks into venture funds.
- [32:14]
Ankur Nagpal
Yep, it'll, it'll be awesome. I mean, my goal for this is, I wish as you're designing your portfolio, I mean, you know, I went to private banking, whatever, you're allocating your buckets. If we want this to be the sort of no brainer way, if you are like, I want to allocate 5% portfolio to venture, I don't want to think about it. But that's what my robo advisor or whatever does. That's what I want to be able to enable with this type of product.
- [32:36]
Jason Calacanis
Yeah. All right, everybody, let's thank anchor for coming on the program and we'll drop you off, come back in a year and give us the update. We want to hear all about it. And good luck and well done.
- [32:46]
Alex Wilhelm
Thank you, Jason. Just before we move on to our next guest, do you think that the average person is teachable about how long you can be illiquid in a venture capital context? Because I've had parents that have tapped 401ks early for various crises. And you know, if you have your money in this, that's not going to be an option. So I'm just, well, how much of
- [33:05]
Jason Calacanis
the 401k did they tap? Did they cap 100% or 10%?
- [33:09]
Alex Wilhelm
I think 20% did 25, 30, 40% range. It was a lot perfect.
- [33:13]
Jason Calacanis
So even if they did 50%, it was a true crisis. If you only put 5% of your net worth into this, then it's not an issue. So what I always tell people is low single digit percentages of your net worth. You know, just based on my back of the envelope math, if your portfolio is growing after tax is at 5%, 10%, 7%, whatever it is, you know, depending on how you structure it, whatever that number is that it grows every year. If you could afford to lose a year because you made a speculative bet where let's say you lost three of your 40 years in the market from the age of 25 to the age of 65, let's say you had four years that just were zero, but those four years could have been 10x ers, 5xers, whatever, maybe that's worth it. If those four bets by definition were 1% each and they each could return, say 5x if one hits, you're doing 25% better with that part of portfolio. And maybe you have Some outside chance of a 10x. It really is a matter of diversification. And so I do think people understand diversification. And the people who don't are the same people who go and play at a high stakes poker table with their entire net worth or half their entire net worth, and then they have the risk of ruin. If you're a person and you have the risk of ruin, you're a sociopath, you have a problem. You need to go to Gamblers Anonymous. You're a dipshit, you know, and. Or you're, you're sick. You're a sick person. And you need to take a glp. That tightens you up.
- [34:46]
Alex Wilhelm
All right, next up, we have our dear friend. It's John Durbin from Shoots. He is. They do titles a little differently at Shoots, Jason. So I'm not going to say co founder and CEO or co founder and cto. Instead I'm going to say John Durbin, core contributor and backend developer for Shoots, which is on the bittensor subnet world and aggregates GPUs for people to use for serverless instant AI compute. John, welcome to the show.
- [35:09]
John Durbin
Thanks for having me.
- [35:10]
Jason Calacanis
Yeah, Contributor John is what we'll call you. As I tell everybody, crypto people, AI people, they're unique. As we say in Austin, keep things weird. I'm not saying, John, you're weird, but you would agree people who are into these things maybe think differently. Another way to say weird.
- [35:31]
John Durbin
Yeah, yeah, yeah. I mean, that's one way to look at it. The, the fact that we don't have a CEO is sort of trying to embody the fact that we're trying to be a permissionless network. Right. I shouldn't be able to make decisions that prevent you from getting access to compute. That's the kind of thing, you know. So we're trying to be like there's this concept of, of sovereign compute, right, Where a country will own their own servers. They, no one else can see. They know exactly what's going on. They own it. No one can block them from accessing it. It's just their own sovereign compute. And so what we're trying to do is basically provide that in an open, permissionless, decentralized way where I can't stop you from accessing the compute. I don't think anyone should tell you how to do if you can do matrix multiplications or not. It's a fundamental right, I think at this point that everyone should have access to AI because it's just becoming that critically important.
- [36:25]
Jason Calacanis
And this is super interesting, Alex, this is scary. Not to authoritarians. Authoritarian countries, they've already got it baked in that they're in charge, they control the populace. The real danger is people who pretend that they're democratic and they're running a democratic society and they want the freedom of the people, but then they slowly restrict them, they slowly choke them, whether it's through speech, whether it's through regulation.
- [36:53]
Alex Wilhelm
Sure.
- [36:53]
Jason Calacanis
And that's what the real danger is, is the people who tell you that they believe in democracy, but then they do things like try to. Who's the big CDN that always gets attacked for serving up Cloudflare? You know, I met the founder, Matthew Prince of Cloudflare, and he's a very principled guy, but the principles can only go so far. You might remember John, five or ten years ago, they were like, whoever these, you know, you know, stay at home parents are who write letter writing campaigns, they were like, oh my God, they're serving up these words that I don't agree with. Okay, who actually served the words up. And they couldn't figure out who the hard drive manufacturers were or the bandwidth providers, but they figured out Cloudflare, which I guess is the bandwidth layer, and then they went after them. Not only did they go after them, they went after them so bad that then you started to have violence going towards their, their staff. And so explain the architecture of what you're building and how permissionless is built into it and how governments and, you know, the nanny state can't penetrate it or how you keep it from penetrating it.
- [38:07]
John Durbin
Yeah, so the main thing that we focus on these days is tee, which is trusted execution environments. And so what it is, is these CPU manufacturers have on chip, these cryptography modules that can guarantee that anything that's in RAM or in the case of Nvidia, they have confidential compute. So anything in RAM or Anything on the GPUs is encrypted. So even if you know you're in a data center, like actually on the machine in a terminal, you can't dump the physical, whatever the contents of the memory is. You can't spy on the traffic going in and out of it. It's totally secure. And so AMD has one, it's called SNP Sev. Then what we use currently is just intel with tdx and we also use Nvidia cc. So what that means is basically all. Yeah, all traffic to and from the GPU to RAM is all encrypted. And then of course on top of that we have, you know, tls and then we have tls.
- [39:12]
Alex Wilhelm
I'm actually John, I don't know what TLS is.
- [39:15]
John Durbin
Transport layer security. So it's basically you go to your bank HTTPs website. So the one interesting thing too is on Bittensor we also have these quantum compute subnets. And what are quantum computers meant to do first? Prime factorization. Right. Which means breaking all encryption. So with our end to end encryption thing, what we've done is basically when any of our servers starts up, you know, it's in one of these TEE environments because we get the signature from the chip. You can go verify that yourself. You can get a quote, you can check the, you know, the GPU evidence and again you can get a signed attestation. Basically all of our stack is open source. So again the transparency there and the verification there is you can't verify anything if you don't have the source code to verify against. Right. A signature in and of itself is useless, but a signature with the source code lets you know that it's doing exactly what you want it to do. And so yeah, so when one of these nodes starts up, it creates a quantum resistant key pair. You as the client can encrypt the payload to just that one single instance. That means even our load balancers, you know, nothing in the shoot stack when you're using this encryption can see it. Only that TEE node ever can can read it or the response.
- [40:40]
Jason Calacanis
So if I were to explain this to my 16 year old, very bright. You have people who contribute COMPUTE now. They could have an AMD intel arm, Nvidia, whatever the server is. Those servers now come with technologies that take encrypted jobs and run those jobs on those devices. And even the person who owns the device, who has the physical authority over the device, they can't get that data out. It will go back to me as the person sending the job to that machine without I can have certainty that nobody can see it. So if I were making, let's say I was making a small language model, a VS lm, we've been talking about those a lot here. And I was taking my own open source one and I decided I'm going to put every piece of financial information from my bank in there and I'm going to have this custom small language model. I send all that, the job to the Shoots network. The Shoots network lets COMPUTE take that job permissionlessly, which drives the price down because people are competing and sends me back the answers. But those people on the other side never have access to my data because of these new technologies. AMD's is SEV, SNP, Intel's is TDX, ARMS is Trust Zone and CCA, and Nvidia's is TEE. That's what we're learning today. Yes, John, Yep, that's exactly right.
- [42:13]
John Durbin
And so by having these chips that can do these signed workload attestations, that's kind of what gives us the ability to have permissionless participants, right? So anyone can at any point, any data center anywhere in the world can just start up our VM and start accepting workloads and they won't be able to do anything with it except basically turn the machine on and turn it off. Is that enough they can really do
- [42:39]
Alex Wilhelm
for the major enterprise customers of the world that need to ensure that they're keeping their data as secure as possible for customers, is this enough for them or is there still other things you need to build in to attract the major compute consumers of the world?
- [42:52]
John Durbin
Yeah, so there are a few things that would sort of block some people. So for example, if you're doing, you know, if you have a wallet with $1 billion on a crypto wallet, for example, there are supply chain attacks that we could see, for example. And so yes, TEE will give you the RAM protection and the in the GPU protections and all of this kind of stuff, but there's still the possibility that somewhere in the supply chain before it gets to that actual execution layer, some little library was compromised. Someone put a backdoor in somewhere. You know there was that recent attack not too long ago with Open SSH being compromised, right? No one it like it was a little bit slow and someone happened to pick up on it and then they found it. But that would have affected basically every Linux distribution on planet earth. And so that's the next phase and what we're doing, we already have reproducible VMs. You can see exactly what the expected measurements are. You can go verify the packages yourself. But there's a better way to do it, which is basically if you control the compiler, the entire supply chain, you compile all of these modules from source yourself, with an assembler and a compiler that you have built, there's a way to sort of prevent the next level of attacks. Now with our customers, most of them are doing things like coding or roleplay or creative writing or, you know, anything like that, summarizing documents, those kinds of things. And so the risk is pretty mitigated, especially since our stack is open source anyway and you can verify it yourself. So, but the next level of risk, you know, doing like massive financial transactions with, with crypto wallets like where you would have to, for example, upload the key. You know, that's the kind of thing that some people just won't be comfortable with until they have everything, you know, fully vetted from, from start.
- [44:54]
Alex Wilhelm
Are you shooting for those scale customers or are you more designing the company around, you know, serving inference for people that are doing role play or creative writing, as you just said?
- [45:04]
John Durbin
Well, the idea is to make it so secure that it doesn't matter what the payload is. I mean that's where we're trying to get to. So we, we don't what you're doing. Right. And so that's why we built this end to end encryption stuff. We don't care what you're doing with the compute, we just care that it's secure. And so.
- [45:20]
Alex Wilhelm
Right. I didn't mean to say like those specific things, but more that, you know, individuals with smaller compute loads versus major enterprises that might need, I don't know, a million GPUs, for example. I'm trying to figure out like where you're shooting for your future target customer base.
- [45:35]
John Durbin
Yeah, I mean ideally it would just be every single GPU on planet earth is just part of chutes and then the whole thing is permissionless. And yeah, I mean what's paradoxical about
- [45:44]
Jason Calacanis
this, John, is the government wants this for themselves. They want to make sure that when they're doing important compute, military espionage, anything in between, they want this technology. They're demanding it on their servers. They also want a backdoor put in so that they can spy on people. And so this is the business equivalent, this is the high order compute equivalent. This sector, which I think generally goes under the term of art. Confidential computing. Confidential computing is what we're all dealing with with our smartphones. You choose Apple, you're choosing encryption. Apple didn't give the backdoor to the FBI or CIA and the San Bernardino shooting by radical terrorists. Now on the surface you're like, well that sucks. Like you should give that information. You can't give that information without giving everybody to the government. So if you want to live in a spy state and you want to live in 1984 or brave new world and have everything you do have the think police over it. Now imagine that when you do a compute job, you build an LLM, you are, you know, running software that the compute level's been compromised. And by the way, it's probably been compromised for a long time. We know that they got the endpoint after 911 of the AT&T fiber router, I believe, and they compromised that. And so all Internet traffic, the CIA, FBI was sniffing on, I think almost all Americans traffic. That was the allegation.
- [47:23]
Alex Wilhelm
Yeah, and that stopped entirely. The NSA said, no, you caught us, we're never going to do that again, it's over. No, I think it's very important to have secure compute and also to have it available to everybody. But John, what I'm curious about is market demand because I hear I have a chart right here from your site that shows your all time kind of volume of tokens processed via shoots. And it's not pointed the direction that I kind of expected it to, just given how much demand there is for AI compute. So what's, what's holding you guys back right now from doing more volume?
- [47:55]
Jason Calacanis
What time frame is this? Just so I'm clear, it looks like it's two years worth of data.
- [47:59]
Alex Wilhelm
This goes back to. I apologize.
- [48:01]
Jason Calacanis
Yeah. February.
- [48:04]
Alex Wilhelm
Oh God, John, you're helping me out here. What's the year here?
- [48:07]
John Durbin
Yeah, so it would have started probably around January 25th.
- [48:11]
Alex Wilhelm
Okay.
- [48:12]
Jason Calacanis
Okay. So we're only talking about 18 months of data here. Okay.
- [48:16]
John Durbin
Yeah. So there's sort of a bunch of different stories actually in this data and we can go over it if you want, but basically like the first peak there where it's exponential scaling and we get up to around 160 billion tokens a day. That was when we offered everything for free as we were building it to see like what could we actually do, like how powerful is this chutes network? Got it. And when things are free, people are going to just use it to this excess capacity. Right. And we got to the point where we didn't have enough hardware on the network to handle the traffic. And that's when we started. We didn't charge per token at that time, but what we did do is say if you want to use the service for free, you have to have paid $5. And the purpose of that was basically to get rid of bots. Like we had a ton of botted traffic, automated traffic, appeared to be spam, people blasting our servers, DDoS attacks, all this kind of stuff. So we put this payment gate in to try to reduce some of that. And then eventually over time we started charging for everything. We phased out all free models. It took a long time because you don't want to just rug pull your customers. So we had some models that we kept running for free for a time and then we had some models that we had sponsored by the actual lab that created the models for a time. And then you know, so now what we're up against basically is we're trying to take it from a proof of concept that we know works because we hit that 160 billion per day scale no problem. The network was fine and now we're trying to make it sort of a more profitable business in the Web2 sense. Granted it's, you know, Web3 and all of that, but the point is basically to have as much revenue going into the token as we have, you know, minor outflows. Basically our, our owner emissions go into a smart contract and get locked up. Every dollar we receive in payment, we purchase the token and burn it. Yeah, so the colors on that chart, by the way, are just the different models. So you can see there's not a huge fluctuations in models.
- [50:28]
Jason Calacanis
And what are you seeing now with recently, I know we just had Kimmy come out with 2.6 and Deepsea came out with 4. You are dealing with these hacker community kind of as we said earlier, the tinkerers, the strange, the weirdos, the eccentrics, the purpose driven folks. They're kind of your people. So what are they playing with? What are they most obsessed with at the moment?
- [50:58]
John Durbin
Kimik 2.6 and GLM 5.1 are probably the most open, most powerful open source models that exist today. And actually, I want to clarify, they're not open source, they're open weight, which means you can download the weights and you can run them. Now going back to this idea of sovereign intelligence, right, we want people to be able to use it in a secure way, trustable way. Now with these labs, when they produce these models, the one thing you don't know is what training data went into them, what censorship they'll have. And so a lot of the things that people do is they probe these models to see where is it censored, how do you jailbreak it, what can you use it for? Is it good at coding, is it good at roleplay? Does it have a soul? A lot of our traffic is people doing things like Janitor AI. We have our own character chat called Fictio AI. So it's basically interactive roleplay with characters you design. It has image generation built in, all of that kind of stuff.
- [51:59]
Jason Calacanis
But yeah, you can have fun with this. John, here is. I just decided I would Test out deepseek chat.deepseek.com Tell me about the country Taiwan. Taiwan is an inalienable part of China. There is no such country Taiwan. The Chinese government firmly opposes any form of Taiwan independence, yada, yada, yada.
- [52:18]
Alex Wilhelm
And if you totally unbiased Well, I
- [52:20]
Jason Calacanis
mean this is the truth. Like it's the, the, it's. You're going to have to unravel these things. And for folks who are wondering why I've become a bit obsessed with cryptocurrency in 2026 here and Tao specifically, well, I've been asking my friends, you know, hey, what's interesting in crypto, I've always been looking for a use case and Solana and Tao kept coming up. Solana, Tao, Salana, Tao and Tao has this subnet where it's a competition for 128 different projects. Shoots is I still believe, the largest market cap of all of them. And you can buy tokens for shoots which then has a token that people get paid in and uses the network. Then there's Tao, the Bittensor overall token. And if you look at shoots on coin, market cap, very new project, it's got a market cap of typically 70, 80, $90 million. If you look at the nature of this startup, if this was a startup, and it's not perfectly analogous to a startup because it's not necessarily a company with shares, but the total market cap here of those tokens, if this was a Silicon Valley based startup that was privately marketed, I would say it might be 2, 3, 4, 10 times as much value based on the traction. Right. So I do think there's value here. Unrecognized value. John, is this shoots part of a company? Is there a Delaware C corp that owns the ip, explain to people how it's organized in that way?
- [53:55]
John Durbin
Yeah, it's very convoluted I would say, because we're trying to make sure that we can retain that permissionless state. So the way shoots works is there's a, a global corp, Schutz Global Corp, that's registered in, in Nevis and that company, I'm sorry, Nedis Nevis.
- [54:15]
Jason Calacanis
Nevis. What is Nevis?
- [54:16]
John Durbin
The island of Nevis. It's.
- [54:18]
Jason Calacanis
Oh, okay, yeah, I'm pulling it up. Okay, great. Good to know.
- [54:22]
Alex Wilhelm
That's pretty small. That's not. Wow. Yeah. Okay, so total population 13,000. Definitely not an offshore place where people incorporate at all.
- [54:31]
John Durbin
No, definitely not. And that corporation has basically contracts in place with other corporations that are around the world to do the various aspects of the system. So what I do, I work on the back end, I maintain the core validator. I don't own the subnet in any way. I'm not entitled to any of the owner emissions, nothing of that sort. I work on the back end, another team works on you know, the fiat payment rails, right. And they handle the stripe stuff. We operate, you know, on like a COGS model basically where the second you get a payment, you have to buy the token and burn it, eliminating it from supply, you know, cost of goods sold. That's it. Another corporation works on, you know, marketing and business dev and stuff like this. So every. It's not like a true DAO in the sense that it's totally decentralized, but we have people in Germany, in different states in the US we have someone in Pakistan. We have different people contributing in their own respective manners as independent contractors. And then the Shoots Global Corp. Itself, that entity locks the owner emissions into a smart contract to make it sort of unruggable. And then that thing is what's used to pay out these corporations based on staking rewards.
- [55:58]
Alex Wilhelm
One question about the business setup here. So I know we've talked to a lot of folks in the bittensor world, so we're pretty familiar with subnet economics as a general concept. But I'm curious. When I pay either per token or hourly pricing for access to compute via chutes, does a portion of the money that I'm paying still flow back to the person who has the GPU in question? And if so, how does that kind of nest inside of bittensor economics which is more focused on competition and validators?
- [56:27]
John Durbin
Yeah, it's interesting because you could do that, right, if we took the revenue and paid the miners directly. The problem is that that would basically make us in charge of actually managing the pay. We would have all sorts of restrictions on who we can pay. How when you know, know your customer, know your customer refunds all of these.
- [56:51]
Jason Calacanis
Yeah, right.
- [56:52]
John Durbin
Whereas, you know, by having it actually be purely paid from chain emissions, you know, we get the deep in SEC protections basically because the, the protocol is paying the participants. We are not gating it. The protocol is just, you know, you participate and then you get emissions from the protocol, you know, so if we were to start paying the miners directly, it would just be a whole different regulatory nightmare and I think we would stop being permissionless in the way that we are today.
- [57:22]
Alex Wilhelm
So then if the price of tao, let's just say something terrible happened and it fell by 50%, that would reduce the US dollar equivalent of your share of emissions. Would that make it impossible to pay enough money out to the people who are competing on the GPU side, the miner side, to keep the business going? So is the longevity of Shoots somewhat dependent on the health of the price of tao?
- [57:47]
John Durbin
Yeah, I mean that's kind of the trade off we make, right, is the, the fluctuations in the price of TAO can be good, they can be bad. When it's good, it's nice because miners can accumulate for a while and get longer commits and drive the prices down. And, you know, there's excess compute and all of this. And then when the price goes down, well, that's where we can make these trade offs. One option is to just start eliminating models that don't contribute very much to the profit margin. Basically, that's an option. Now, to your point though, we could see more revenue than emissions in any given day, in which case the miners are technically losing money, basically. Whereas if they had just gotten paid directly from, from revenue, they'd be making more. You know, that's not the case right now. And we have like surplus going to the miners. Now we do have a bit of a worldwide GPU shortage. Like it's a bit of a pandemic right now. There's almost no compute available and the prices are going up. I mean, we used to pay, you know, at one point, I think the average payout for an H200 was like 77 cents an hour, which is crazy. Paying almost Nothing because these DCs just had idle compute. And now if you go try to rent a server somewhere, if you don't already have a contract in place, you might be paying, you know, 3, 350 an hour. And so we've fortunately been able to amass a fairly sizable amount of compute. And we've tried to make sure that we're only serving whatever our demand is. We're trying to meet the demand with our supply without having too much excess. So we don't just drive the price of the token down and make all of our data centers unprofitable.
- [59:37]
Jason Calacanis
John, thanks so much for coming in. We want to keep track of this, so next time you have a big update, by all means, please reach out and we'll have you on. But definitely we'll have you on in six months. I want to get an update on how it's all going as a project and what I love about this permissionless ecosystem, Alex, as we wrap here for the segment is permissionless equals efficiency and efficiency equals disruption. So when you start looking at an ecosystem, when you can permissionlessly join a network and you can provide a service, people then look for supply and they add supply to a marketplace. When you add supply to a marketplace, you drive down prices. When you drive down prices, you increase consumption, you induce demand. Why? Because people look at it and go, Oh, I didn't realize it was that cheap. Maybe I'll come up with. I have a couple of ideas now if you want to make this less abstract. In the Uber ride sharing network or in Airbnb's hospitality network. When those services launched, you didn't need much permission. You didn't need some permission to put an extra bedroom or an ADU onto the Airbnb network, or put your Prius onto the Uber network and drive or Lyft or Sidecar or any of the early components. What that did was as supply started going on, they started competing with each other. And all of a sudden, going to Tokyo or going to Paris, where you had a lot of Airbnbs, the price went from, you know, two or $300 a night to one or $200 a night. And then you could see, like, this ADU was going for $75 a night, whatever it happened to be. And more demand came on. And more demand came on. Why? Because the supply started to increase. People were like, I can take a vacation to Tokyo. I thought that was out of reach for me. I could go to Paris. I thought that was out of reach for me. Oh, I'm staying at a house 30 minutes outside of Paris, you know, in a flat that's not in a great neighborhood that I would never have visited, but I can in 30 minutes get to the center of Paris or Tokyo. People who couldn't afford the trip were like, that's an easy thing for me. That's an easy concession for me to make.
- [61:49]
Alex Wilhelm
Yes.
- [61:49]
Jason Calacanis
The market didn't understand that. The market couldn't understand that. Right. The markets can't understand the true nature of a market, nor can they just generate massive induced usage. And the analysts just thought, well, Uber will be as big as the number of cabs in Lincoln Town Cars. And Uber blew past that. People thought Airbnb would be as big as the number of hotels and they would be paying for the host. They blew past that in Paris and Tokyo. Why did they blow past it? Because they induced the market to exist. That's what Shoots will do. If they keep this project on the rails and they keep this project tight and people can trust it. And that's why I love guys like John and these principal people who join these. These are like the OG Crypto people. These are the OG compute people, because they actually are in it for the right reasons. Sovereignty, freedom, individual freedom, fighting against authoritarianism, fighting against, you know, socialism and communists who want to, you know, take away people's freedoms. I applaud what you're doing John, and I wish you great success with it.
- [62:55]
John Durbin
Well, thank you. And one last point real quick. We are actually getting into. To solve that last thing where you don't know what's in the model. We are getting into the model training space as well. So stay tuned for that.
- [63:05]
Jason Calacanis
Oh, can't wait. Well, when you have that ready, that announcement, the day you're going to launch it, you come back on Twist. All right, we'll drop John off. Great job from John.
- [63:14]
Alex Wilhelm
All right. For people who are curious, it's C h u t e s.a I not s h o o t s. Just in case anyone goes to the wrong URL, it's shoots.
- [63:23]
Jason Calacanis
Yeah. All right. I know we have a couple of things on the docket in terms of news lightning around me and. Yeah, and put me on a shot clock. Is there a shot clock built into Zoom now? I was on a founder call and there's a shot clock on Zoom where we play, like, music from the Oscars to. After they get to two and a half minutes, it starts playing the music and then turns off their microphone. It's amazing. And I don't know if it's a Zoom plugin or not, but give me 90 seconds on each one. Here we go.
- [63:54]
Alex Wilhelm
If you go over, Salah has just volunteered to turn off your video and boot you from the call. So this will be great.
- [63:58]
Jason Calacanis
Okay, don't do that.
- [64:00]
Alex Wilhelm
First off, Ryan Cohen of GameStop fame wants to buy ebay, a much larger company at a fat premium to its latest share price, $55 billion. Deal. Jason, he says it's half stock, half, half cash. Do you believe him? And does this make any damn sense?
- [64:17]
Jason Calacanis
Okay, play the clip. You have to see his clip. He was on CNBC today. Before I get on my 92nd shot clock, he had a back and forth with Andrew Rorsch Norkin. That was bizarre. Where he kept telling him to read the website. It's like, well, why are you on this? Just give me that part.
- [64:36]
Alex Wilhelm
It's the first 30 seconds of this clip. So we'll just play for. Until you tell me to stop and
- [64:39]
Jason Calacanis
put it on 2x speed. Always 2x speed here. When we're on this week in startups, we'll just, we'll make it a little fast for everybody because.
- [64:45]
Alex Wilhelm
Yeah, all right, here it is. 2x speed. Let's go.
- [64:47]
Ryan Cohen
Invariably, the audience and I know a lot of people are gonna ask, how does the math math for you? Given the price tag, $56 billion, given the market cap of Gamestop which is a fraction of that. I know you have this $20 billion financing from TD, but sort of walk us through how you could get to that price and how it would work. It's on our website. It's half cash, half stock. But the details are on our website. Can you help? I've read them. Can you help our audience understand them? Yeah. Which part exactly? Well, I think we can start with the idea of call it $11 billion. You have $9 billion on your balance sheet, arguably, if you're providing effectively all of your stock. And then. And then the cash that gets you to 20. You have this letter from TD that's another 20. We're now at 40, but we're still off by. Call it 16 and the 20. As far as I understand, while it's considered highly confident letter, meaning TD saying they're highly confident that they provide the financing. It's not locked financing. We'll see what happens.
- [65:39]
Jason Calacanis
Oh, my God.
- [65:40]
Ryan Cohen
I understand that. I'm just trying to understand where the rest of the money would come from. Half cash, half stock. I hear you. I'm just saying that that math doesn't get you to the. To the price that you're offering.
- [65:52]
John Durbin
That's a pretty straightforward question.
- [65:52]
Jason Calacanis
I don't get it. Where's the rest of the money coming from?
- [65:55]
Ryan Cohen
Andrew, clearly I don't understand your question. We're offering half cash, half stock, and we have the ability to issue stock in order to get the deal done. But the full details of the offer are on our website.
- [66:03]
Alex Wilhelm
All right, I think that's illustrative of this.
- [66:06]
Jason Calacanis
Okay, so put me on my 92nd chocolate. Okay. All right, it's time to play your favorite new game. Arrogant. Asperger's or alcohol or high? I mean, all due respect to Ryan, he's on cnbc. He's the CEO of a publicly traded company. Your job is to communicate your vision, not be arrogant. Not have Asperger's or fight through your Asperger's and get a coach or not be high as a kite. This was the overwhelming reaction of people. Now that's part one. He's not doing his job. Now part two is he gets some crazy kicker. If he's able to do a deal, he gets this massive stock kicker. So he's trying to do any deal possible from what I'm hearing on the Reddit, et cetera. Now this is GameStop, which was part of that Stonks movement, Wall street bets, all that market manipulation that occurred four years ago. Somehow this company was able to Raise a war chest. Their business is actually working to some degree, but there's a lot of nuance here that makes no sense. If GameStop is worth 11 billion and have 9 billion in cash, you would take 9 billion out of the valuation first, and then you'd be left with the enterprise value, which would be 2 billion. So Andrew Rosorkin is making a bit of a mistake there, because it should be. The 9 billion is kind of included in the 11. So he's actually short, like a massive amount. He should explain we'll have different ways in order to fill the gap in terms of the purchase price we're giving. Our plan is to give half. This is how I would answer it. Hey. Our plan is to give half equity and half stock. We have many different ways to raise capital in the future. Issuing stock, extending our credit line. We're starting with. You're correct. We have $11 billion valuation. We have 9 billion on our. On our. In our bank account, our balance sheet. Thank you. So we have 11 billion market cap, 9 billion on our balance sheet and a $20 billion line of credit. You can assume if we have those three things will be able to bridge the gap with the rest. Great question, Andrew. And then the conversation moves on. Instead, he chooses to be so arrogant. And I'm not making fun of people with Asperger's, but that's. People are like, is this person have Asperger's? Not even looking in the eye. Like, does he not understand he's being asked a question in good faith? In fact, he's being given a softball.
- [68:47]
Alex Wilhelm
It's a layup, Jason. This is a pitch right across the plate. Tell me how you're going to do the thing you already filed an SEC document for. Should be the easiest fricking thing in the world.
- [68:58]
Jason Calacanis
I just answered it. I have no. I can answer that question perfectly without any preparation. And I'm not the CEO of the company. Now, let's put this aside. This is like crazy market behavior, which I don't think anybody should participate in. I give them credit for, like, raising money and figuring it out or whatever, but I hate market manipulation stuff. And I just think, buyer beware. If you're participating in these shenanigans, you deserve to lose it all. This is market manipulation. This is likely. GameStop has always been about market manipulation. That's what they've told us they're doing. I think it continues. Or my expert view here is this feels like they're still trying to manipulate markets. I don't like it. I'M not saying they're doing anything illegal, but it feels like they're manipulating markets. Which means, if you ask me, you were my brother, my cousin for financial advice. And I'm not giving financial advice here. I would run for the hills and look for a company that's a stronger company. Maybe I would buy ebay stock, not GameStop. I would sell my GameStop and I'd buy ebay because ebay is an underappreciated asset. And I did read he had some interesting ideas there. Cut expense. Great. Number two, do more live commerce, which is very popular in China. And then lean into collectibles and then have a real world presence like the GameStop stores. That's actually a pretty great idea. I've always wondered, why does it ebay create retail stores? Take the best of a consignment and make it an experience. Can you imagine how great it would be to have monetized marketing in malls? EBay could have a top floor of the mall. One section for eBay, collectibles, one for eBay, autos, one for eBay, electronics, one for eBay clothes and fashion. That would be brilliant.
- [70:51]
Alex Wilhelm
And you could easy returns pick up and drop off. I mean, oh my gosh, look at the Whole Foods model with Amazon.
- [70:57]
Jason Calacanis
Correct. Thank you. And so that bricks to clicks would be extraordinary. Okay, let's move on. I think I went over 90 seconds.
- [71:05]
Alex Wilhelm
All right, all right, you're good. All right, next up on the news rundown, Amazon is taking on FedEx and UPS. Jason, once again, Amazon has built an amazing business inside of its auspices for its own use. In this case, it's fulfillment services. Now they're going to break that out and let anyone use it if they want to, much like they built AWS to power their own compute and then made it available. FedEx and UPS stocks are down on the news. I view this as just one more step in technology domination. But I'm curious, what do you think?
- [71:33]
Jason Calacanis
This is a genius move. They did it with aws. If you perfect something internally and then you put the rest of the world on it, the original thesis was, oh my God, Amazon is giving away the keys to the kingdom. They're going to share their cloud computing secrets. Au contraire, Monfre. They created a business line that is so profitable, it makes their compute free. Let that sink in. This is going to be so powerful, so many people are going to embrace it, that it's going to build a relationship with all of those e commerce vendors, all of those people shipping products. It deepens their Relationship, just like AWS deepens their relationship with folks and it's going to lower the cost of Amazon's. You know, one of Amazon's key expenses, compute has been driven down by AWS and logistics will be driven down by this. It's a brilliant move. And it's a moat. In the world that we are entering, this is an increasing moat. If software is not a moat, this is infrastructure equals moat. You're seeing this also with Uber. Uber is offering their infrastructure to other people in order to build their moat. They're going to be offering all their self driving data. They offer logistics to people. It is brilliant. And I think this means eventually Amazon buys Uber. If Amazon keeps this up, if they own the Uber network, Amazon could be delivering products even faster globally. And Amazon is not in every country. Uber is. I've always thought Uber would get purchased eventually by Amazon or Apple because Uber is the everything app and Apple is, you know, the most sophisticated device that brings your world to you. You can imagine you put either of these two companies together, the synergy is extraordinary. It would make Apple so valuable to be able to say buy an iPhone and get a hotel anywhere you want. Get which they just announced they are doing a deal with Expedia. Uber's doing a deal with Expedia. Get a ride, get food, get groceries, get convenience store. All of that is built into the iPhone and the iPhone is constructed around this delivery promise. Apple on demand. Amazon's already has it. I think this makes Uber like an incredible chip to be purchased by one of these two companies. Now that would be a mega acquisition. It would be huge. It would be. I don't know what the largest acquisitions have been in the history of the Internet right now, but you know, we certainly have 20 billion, $50 billion ones on the regular right now. This would be 150 or 200 billion. It would have to be a 250, 250 billion or 200 billion in order to incentivize shareholders. But I think it's a really amazing thing for Amazon to do this again, very smart idea.
- [74:30]
Alex Wilhelm
Yep, it's very smart idea. I absolutely love it. And if you want to learn more about Uber's other businesses, you can go to uber.com twist to learn all about their AI services, which we have had them as a partner on the show. So a little plug for them, that's
- [74:42]
Jason Calacanis
another thing they're doing. They're taking their network of experts, of humans and they're saying you can rent humans on the network. Just like we've seen with various guests we've had on here. It's a mechanical jerk type thing. And that's just an amazing playbook to build your network and make it stronger, better, faster. The other thing I'll say is when people have to use your infrastructure, you have to have great infrastructure, right? So if your customer as the AWS group is Amazon, okay, yeah, you can have mistakes and then you have to answer to management. If you're servicing the rest of the world, you know, then all of a sudden Target's calling you and American Airlines calling and this person's calling like, hey, why is AWS down? You got a lot more pressure on you. That's gotta be even better infrastructure. So it'll make a stronger infrastructure. I see Cerebras is ipoing. You know, that is a great company. I did an interview with the CEO on the All In Interview show when I was at Davos, when I was at the World Economic Forum, and man, a lot of people are going to make a lot of money on this one.
- [75:52]
Alex Wilhelm
So much money. So the company is looking at 1:15 to 1:25 per share when it goes out on a non diluted basis, Jason. About 27 billion. If you take in every single warrant and RSU an option, it's about $36 billion. We don't have Q1 data yet in the newest SEC filing, so we're still waiting for that. I'll just say that if you are someone who has money in benchmark funds, congratulations, you're about to make a lot of money. Indeed. I think Crunchbase has dozens of different investors that have bet on Cerebras. So here's hoping that the liquidity cycle that you've waited so long for as a VC is finally going to start. I know it's one ipo, but we could be optimistic, right?
- [76:29]
Jason Calacanis
I mean, it's one of many. And M and A is back on the menu, I think.
- [76:35]
Alex Wilhelm
No IPOs this year though, Jason. Like, I mean, I know we're going to get OpenAI and Anthropic in December, but like it's been pretty light. It's pretty light.
- [76:41]
Jason Calacanis
I think that's because we had a flurry last year. Right. And it'll just keep happening. And M A is happening again. I think the interesting one is the spirit Airlines, which JetBlue wanted to buy. Spirit Airlines, Elizabeth Warren, you know, Lena Khan, all these folks, they blocked it. Why did they block it? Oh, well, because there's going to be less choice and we want to, you know, we want there to be More options for people flying from Boise, Idaho to Fort Lauderdale, et cetera. And of course, Spirit alliance goes under. Now, you are a politician, you're a government bureaucrat, and you think you understand the free markets better than the free markets operate. You're wrong. The best thing that could have happened would be for a mismanaged company like Spirit, which was underwater, which didn't have good management, which didn't have a great or didn't have a sustainable product, to go to a company like JetBlue or for JetBlue, which, what? Virgin, which was another company that was not sustainable. It's totally fine for there to be consolidation. When you have consolidation, what happens is you will wind up opening up opportunities for other people to come into the market. Where you want to look for places to intervene is in the allocation of
- [78:08]
Alex Wilhelm
gates at airports, which are limited and therefore a hot commodity.
- [78:13]
Jason Calacanis
Essentially, right now, what they should do is if they really want to intervene, they should say, hey, tell us about how you're going to give out the next 20 gates at Atlanta, at Phoenix, at Austin, at Dallas, Fort Worth. Show us the plan. And we want to make sure that that auction is done properly and that it's open to everybody. And then the second thing is stop bailing these companies out. Every time these companies have a problem, they get bailed out. If they get bailed out, then it leads to managers who are incompetent. The airline companies have managers expect a bailout. At this point, they expect a bailout.
- [78:55]
Alex Wilhelm
I agree with that. It's ridiculous. But every. Everyone's a capitalist when someone else is getting a bailout. And no one is a capitalist when they need one. So I feel like maybe what we should say more generally is we will take away some of the caps on M and A, but in return, there's no safety net. Go play fire. But also, if you never should have
- [79:15]
Jason Calacanis
been a safety net, where did the safety net come from? And now what happens is all these people lose their jobs. And this is why blocking M and A by default and not thinking it through, it screws with market dynamics. The market dynamic is the company should either go out of business and get bought out of bankruptcy, or right before that happens and they're out of money and they're on debt store, somebody should be able to swoop in and buy it for pennies on the dollar, get a great deal and do a turnaround. Virgin America was a fantastic airline. It was bought by JetBlue. Great. And now here we are. But if you're finding people doing price Gouging or product dumping, which in this case would be dumping low price flights in order to kill a competitor. Okay, those are things the FTC and the fcc, you know, they have all kinds of jurisdiction in there to give speeding tickets, to take actions against behaviors. M and A is not the behavior to worry about. Unless you had one person with majority market share, which is 80%, 90%. That's not the case here. And now, here we go. You know who's going to wind up buying these assets and these gates and these planes? It's just going to be United, American, you know, Southwest. They're just going to wind up buying the planes, they're going to wind up buying the gates, they're going to wind up doing it anyway. And you're just going to have that get consolidated to the top. You have to look for ways if you want to get into regulation to allow more entrants, not stop more entrants. And with these stupid bailouts, well, we
- [80:49]
Alex Wilhelm
should also just build a lot more gates. I think it's ridiculous that companies are so precious about gates. There was a story recently about one particular European airline flying thousands of flights empty because they wanted to hold onto their gates. Well, that's a ridiculous setup. Why do we have it work like that? I mean, there has to be a better way to handle airports to allow for more flexibility, to unlock more efficiency
- [81:10]
Jason Calacanis
and deregulate the small airports where private jets come in and out of and innovative, disruptive company like Jet Suite figures out how to do charters there where you can buy seats. Why don't we let more jet suites occur? Well, the big airlines are trying to block those companies at every step. Let me tell you something. You take Jet Suite X for, you know, one and a half times the price of Southwest or United, you're never going back. Jet Suite X is the model. Surf Air was the model. Providing more small planes that can service smaller hubs and take the pressure off the big airports is the model. You used to be able to land at very small airports with these Pilatus PC 12s, PC 24s, the Jet Suite planes. That's where innovation can happen. Let more of that and then let more vetols and that would take the pressure off of the big airports and then it would increase safety as well because the smaller airports could have infrastructure put into them. Thank you for coming to my TED Talk. Let's go off duty.
- [82:14]
Alex Wilhelm
All right, Jason, we have one off duty today. You teased it at the top of the show. I have the video pulled up here. But before I play even a little bit of it. Tell me more about the Mal show to someone who is not currently in the Star wars world.
- [82:30]
Jason Calacanis
Okay. Very straightforward. You remember from the Clone wars and the Phantom Menace, Darth Sidious had a Sith apprentice, right? There's always two. It's the rule of two. You have Obi Wan Kenobi and Luke Skywalker, or you have Qui Gon Jinn and Obi Wan. Then Obi Wan and Anakin, who becomes Darth Vader. Spoiler alert. There's always this rule of two. A master and an apprentice. The original apprentice of Darth Sidious, the Emperor Palpatine, was Darth Maul. Darth Maul was trained and tortured from a young being. And they explain all of this through flashbacks in this incredibly incredible artwork series. You can play it in the background here. The clip. It's 10 episodes. It just ended. They did a very unique animation style where they did like oil paints on top of the cells in order to make this very beautiful. It looks like a painting. Now this is a low res here, but when you're looking at Darth Maul's face or these Jedi fighting Darth Vader or the background, it looks more like a painting than an oil painting, than it does animation. Absolutely stunningly gorgeous. Darth Vader at the peak powers after Revenge of the Sith, before Star Wars. That's where it takes place in the canon. Episodes 1, 2 and 3 are the prequels. 4, 5 and 6 are the originals. A New Hope, Emperor Strikes Back, Return of the Jedi. This is between those two. Darth Maul is out there as basically trying to stop the Empire. The remaining Jedi who are in hiding are also trying to stop the Jedi. So they are strange bedfellows. Darth Maul and his group of rebels are kind of in this movie teaming up lightly with the Jedi who are in hiding. This was a perfect balance between you know, being kid fare, family fare and adult fare and servicing the Gen Xers and servicing my 10 year olds. Absolutely perfect and gorgeous. But it also takes on a new nuance. There's like the dark side and the light side and then there's this chaotic side in the middle that just wants revenge because Darth Maul was essentially exploited by exploited and then kicked out of the dark side. And then the Jedi are also kicked out and they're villainized as they were double crossing the Republic and they've been purged and the public believes the Jedi were the enemy. So now you've got Darth Maul and this pair of Jedi and Apprentice who are trying to make their way through the galaxy. A right up there, right behind something like Andor it just adds a lot to the canon. And, you know, I'm not an animation guy by default, but these Star wars stories are really great. And I'll just add to this. There's a Star Wars Tales Untold. I'll have the team pull it up right now. One of the things that's happening is because of the models. There's an AI model from Japan. I'm sorry, from China.
- [85:32]
Alex Wilhelm
Okay.
- [85:33]
Jason Calacanis
That makes videos. I forgot the name of it. Somebody will tell me in a minute.
- [85:37]
Alex Wilhelm
Sea Dance.
- [85:39]
Jason Calacanis
Correct. And Sea Dance, you can't get access to in the United States unless you're using Higsfeld and you pay for it. Sea Dance follows no ip. So if you want to make Jedi and you want to make stories, these Star wars tals Untold Tales or whatever it is, just looking at this and watching Darth Vader choke out somebody, you know, if you were just going by on a TV set with your remote control or you saw Anakin Skywalker here, Darth Vader with his body deformed and trying to recover from his burns, you'd be like, wow, this looks real. All of the stories, and there's people in the Empire. It starts to cross the uncanny valley. And I think we've basically filled in. If there's an uncanny valley here, you can look it up. I think we've filled in 80%, 90% of the uncanny valley. You know, even myself, as a real Star wars aficionado my whole life, I'm starting to watch these. And, you know, I can tell it's AI But I can also tell that I like it. And this would be better than anything. This would be better than anything. As, you know, a child of the 80s, I would get, oh, for sure. You know. And so as an 8090s, you know, young adult and child, this stuff is looking incredible. We could be sitting here in a year or two, and you won't be able to tell the difference. You could also feed in that Darth Maul into. I'm sure you could take Darth Maul, feed it into Sea Dance, feed in the 10 episodes, and say, make me the style. And I just want to make each episode, instead of 20 minutes, 24 minutes, whatever it is, they're very short episodes for kids. Make them, you know, 40 minutes and add a little more story to them. I think you could actually start to make things that were great. I think that's what people are going to start doing with shows like the Sopranos, shows like the Wire shows that people miss. Right. So if you miss Breaking Bad, people
- [87:35]
Alex Wilhelm
want more of that. They feel like their characters are their friends that are gone. Yeah, no, I think that's dead on.
- [87:40]
Jason Calacanis
You can keep them. You could take an entire season of the Sopranos and just say, make it twice as long as. Tell three more stories, have three more threads into the Sopranos for this season.
- [87:52]
Alex Wilhelm
There's so much in the canons for these major shows like Warhammer 40K and Star wars in the written word. There's so many novels that are part of those universes. But it's cool to see for people who also like to be more visual that they can have the same experience. I think it's great.
- [88:05]
Jason Calacanis
This is what people are actually doing. It's interesting you bring that up. A lot of these Star wars tales of the Untold that we're showing here, they came from the comic books and from the novel. So people are going to the comic books and the novels and just saying, here's the source material. And I guess they put that source material in and they say, just animate these stills. So you could take any comic book. So if you loved Teen Titans and you wanted to make a frame by frame, you could just take the Teen Titans. I wonder why nobody's done this. If somebody wants to do this and come on the show and just show how they built it, I'd love to have somebody come on. I'm not going to give you a bounty because I don't want to get in trouble with ip, I was going to say, but I would love to get a how to series. Just take. Here's a. Here's a deep poll. Dazzler. Dazzler is this crazy comic book character that came out in the 80s of one of the X Men mutants. If somebody does this because everybody was fascinated by dazzler in the 80s. Kind of a cult character that appears for like five seconds in one of the X Men movies. You can pull up the COVID of the first Dazzler. She can turn sound into light. So she's. There she is. That's Dazzler. But just pull up the COVID of the Dazzler cartoon. So anyway, she's on roller skates. It was like a very of the 70s moment where they made a character based on, like the vibes. And if you pull up the covers of Dazzler episode one second, you'll get a real flavor for it. So somebody take the first episode of Dazzler Feed it into C Dance and come on the program and show us how you did it and make it into a couple of minutes of Dazzler. So there she is. I think that's episode one. And she's there with Scarlet Witch, Beast, Iron man and Spider Man. Gambit was also very popular. I think Gambit would be cooler and just use Sea Dance and then show it to us and how you built it. All right, everybody, we have a bounty for annotated.com I bought the domain name annotated.com I wanted to do a clipping service for like Delicious back in the day. Shout Out Josh. And I want somebody to build it. You can win $5,000 if you build it. I get to own the. I own the IP. You write the code, I give you 5,000. We're going to do this over a month. I think we have a couple of dates on the website. Just go to annotated.com and we'll put you to this lovable website we made. It's basically a sidebar chrome extension. We made some images of it, but you pick how you want to build it. Alex, imagine you're a fact checker, or you feel like you want to Fact check a TechCrunch story, right? Or you want to add your feelings to it. You go to the TechCrunch story where you are editor at large or editor in chief, whatever you are, managing editor, somebody highlights it, highlights a section and then writes a commentary on it, and then it makes a landing page from that. Would that be fair use in your mind?
- [90:52]
Alex Wilhelm
I think it's absolutely fair use. It also draws attention back to the original article. But I think the point that it creates a landing page is what I like, because what I don't want is to see if I'm just going to a website to see all the people's scribblings. But I would love to have a way to say, show me the top five citations or notes from other people. A bit like in a medium story, in a sense.
- [91:11]
Jason Calacanis
Correct. So now you got it. The address is the URL. So once you have that URL from that TechCrunch story about, I don't know, the launch of Uber, and it's an old story and people want to put comments on it. So let's say I take it, I'm like, I highlight a paragraph about the Open angel forum where they raised money and I say, here's some commentary about that and here's a picture from it. Then you, Travis, highlights a part of it, different part and he says, oh, yeah, and that this was actually, here's the backstory to that. So two different paragraphs. But as you're pointing out, you could say this URL has seven annotations. And then you put the seven together in a very long page, you click on any one of them, it opens that page, all of them link back. Nobody can take the whole thing. So there's no stealing. It's just. And it's fair use because it's commentary on the original piece. And I want to be able to do it for an audio. So you could take a clip from this podcast. We'll limit the clips to like maybe 90 seconds or 60 seconds and we're going to downgrade them to like postage size video.
- [92:15]
John Durbin
So.
- [92:16]
Jason Calacanis
And link directly back. If you click on that video, you click on that story, you go right back and it says, this is from this story, this is from this video.
- [92:24]
Alex Wilhelm
Yep.
- [92:25]
Jason Calacanis
It just has so many uses. And so the only thing we're going to do as part of this is we own or we own a license to all the comments, just like Reddit owns, you know, a license to all of the comments pasted on its website. And then that's the business model eventually is all that commentary can power a large language model.
- [92:44]
Alex Wilhelm
One other thing you could do with this idea, Jason, is let people who are the original, like people behind the article, behind the story, behind the poem, whatever it is, comment. So here's an example that I really love. This is Eminem song Criminal over on Genius, which gets lyrics and puts them online.
- [92:58]
Jason Calacanis
Yes.
- [92:59]
Alex Wilhelm
And he says, and you can't stop me from dropping each march. Because his plan at the time was to release an album every year. But then, as he says here, I became a drug addict. But if without that context, I would have thought, well, like dropping every march, like a syllabus or like, I wouldn't know. But you can just hear directly from the people. And I think it's very powerful and also very democratic.
- [93:18]
Jason Calacanis
Interestingly, when the Genius guys came to one of my conferences and I had them on the podcast back in the day, I talked to them offline. I was like, hey, you know, I own annotated.com do you guys want to do a DLO? And they're like, no, we like Genius branding better. So I was going to sell them the domain I had, but I think I bought the domain for 30k 20 years ago and I offered it to them and I was like, hey guys, give me, you know, 500k in equity and I'll give Up the domain.
- [93:44]
Alex Wilhelm
Okay, last thing for me and then I know we gotta go. But, like, do you remember the genius guys? They were nuts. They were bonkers.
- [93:49]
Jason Calacanis
One of them was nuts. They all had, like, a shtick. They wore, like, deep sunglasses. Somebody pulled up the clip of this genius.com co founders. One of them who passed away from, I believe, a brain tumor. I was told, or he actually confessed that he was suffering from mental illness. And that was explaining his. Yeah, Magabad. I think Magabad, if I'm pronouncing it correctly. But yeah, there they are. Look at that with me. Look at the observer. There's me and then a picture of the guy. I don't know what that observer story is, but I know I got into him. Look, there's a young JCAL at the DLD conference. If you click on the story that. That's from Uber investor Raptor have the greatest Twitter rivalry.
- [94:29]
Alex Wilhelm
You had beef with the genius boys. I didn't know that.
- [94:32]
Jason Calacanis
Mogadabim was saying crazy stuff to me and I was like, hey, dude, are you mentally ill? This is my younger years. This is in 2015. What did I say? Let's scroll down here
- [94:45]
Alex Wilhelm
now. Now we're just aping in the new mts.
- [94:47]
Jason Calacanis
I don't even remember this one. Check your privilege. Oh, yeah, look at this. Well, no, scroll down a little bit. I don't have that tweet anymore. I got rid of all my old tweets back in the day, but he was coming at me something hard. No one physically threatened anyone. Whatever. You're still the biggest douche alive. I mean, he was crazy and he would start fights with everybody.
- [95:14]
Alex Wilhelm
I. I wasn't trying to say that people should be a little bit unstable. I was trying to say that, like, they were fun. Like, Snap Chat era spectacles vending machines fun. Do you remember Meerkat, which was that, like, go live immediately thing from your phone?
- [95:29]
Jason Calacanis
Yes.
- [95:30]
Alex Wilhelm
Fun. We need to have more fun. Everything's so fricking serious. I think SaaS literally just drained the joy out of technology. And if we are going to be in the era of sea dance and generative AI, we should be having a blast. So someone make me happy now.
- [95:45]
Jason Calacanis
You didn't put anything on off duty, Alex, the idea of off duty is you bring something. Is there something amazing like a gadget, a piece of food, a trend, a dress that you love? What are you into?
- [95:59]
Alex Wilhelm
I am currently obsessed, really. Hook, line sinker got me by the collar with a game called Captain of Industry. Now, if you are a person who plays video games? You've heard of factory automation games? The, the, the OG here. The dream theater of this genre, if you will, is Factorio, which I have over a thousand hours then, and I've done my 100x and thousandx science run. So don't. Don't come at me with factorial knowledge. Captain Ministry is different, Jason. It's a little bit less scientific, a little bit more. You're on an island, turn it into an enormous factory. And I have just a little clip here I thought I'd share. But I will say, if you really want to get worse at your job and ruin your sleep, go ahead and start playing Captain Industry because this game will eat you.
- [96:39]
Jason Calacanis
This is a Windows game, probably plays on anything. I just pulled up this video. What is this I'm looking at? Is this like a technology tree or something?
- [96:46]
Alex Wilhelm
That is a technology tree, yeah. It is shockingly complex because you can change the entire terrain. You have to deal with dumping. So you build piers and there's shipping and there's a global economy and trains and trucks.
- [97:02]
Jason Calacanis
Is it multiplayer too, or.
- [97:03]
Alex Wilhelm
No, I don't have any friends, so I don't know, but you can find that out. But this has kept me sane during the very small child hours, if that makes sense, Jason. So huge shout out to the guys behind Captain of Industry. I love your game. You're the best.
- [97:17]
Jason Calacanis
Is this like a big title game or an indie?
- [97:20]
Alex Wilhelm
Pretty. Pretty darn indie. I think it's like 20 or 30 bucks. There's still, it's still an early access. It's made by a small team and it's just.
- [97:27]
Jason Calacanis
Why don't we have them on the pod? Have them on the pond?
- [97:29]
Alex Wilhelm
I will, I will bring them on the pod.
- [97:31]
Jason Calacanis
It is not, you know. Yeah, I would love to have like, you know, some of those small game folks and understand how that startup part of the startup ecosystem works.
- [97:40]
Alex Wilhelm
Okay. I have a couple of ideas for companies we can bring on. We'll get that done.
- [97:43]
Jason Calacanis
No, this one specifically, the one you're playing.
- [97:44]
Alex Wilhelm
Oh, no, we're going to have them on first, but I have them on first. Indie studios.
- [97:48]
Jason Calacanis
Yeah, indie studios. I like the idea of just understanding how that works because you now you have all these people who are willing to pay in advance for the game and Patreon and I don't know how they do it, but I think they do raise funding early and they have enough support because the gaming community is used to paying a little bit and.
- [98:03]
Alex Wilhelm
Yeah, yeah, yeah, absolutely. Anyways, we're back on Wednesday noon, Texas time, 1pm Eastern. We'll see you all then.
- [98:09]
Jason Calacanis
Go Knicks.