Netflix buys WB + why Jason should run Disney | E2219

Summary

This Week in Startups – Episode E2219 Summary

Date: December 6, 2025
Host: Jason Calacanis
Guests: Alex Wilhelm, Lon Harris

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Episode Overview

This episode dives into the seismic news of Netflix acquiring Warner Brothers’ film and TV assets, making industry predictions around streaming, the fate of movie theaters, and regulatory challenges. Jason also outlines his vision for revitalizing Disney and theatrical experiences. In the back half, the panel discusses prediction markets, insider trading scandals, legal battles involving AI platforms, and promising startups from the latest Y Combinator cohort.

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Main Discussion Topics & Insights

1. Netflix Acquires Warner Brothers – Industry Impact

[00:00–08:42]

• Deal Details: Netflix wins the bidding war for Warner Brothers’ film and TV assets, including Harry Potter, HBO shows, DC Comics, and Barbie IP. The $72 billion deal ($82.7B enterprise value) excludes CNN and cable networks, which will spin out independently.
• Regulatory Concerns: Intense scrutiny expected, especially in international (EMEA) markets where Netflix + HBO Max will dominate.
• Market Growth: Netflix revenues in EMEA nearly match U.S./Canada; APAC is their highest-growth region.
• Deal Size: The deal represents about 17% of Netflix’s $423B market cap.

Quote:
"Netflix plus HBO Max is going to be a dominant player in a lot of international markets. Netflix already has been really tough for a lot of international marketplaces. Combine that with the power of HBO Max, and I feel like Europe is going to be a really hard nut to crack." – Lon Harris [02:25]

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2. The Future of Theatrical Releases

[05:35–08:42]

• Theatrical Collapse Concerns: If Netflix pulls Warner Bros. releases from theaters or shortens theatrical windows, "the theatrical business would collapse."
• Netflix’s Intentions: Ted Sarandos reportedly plans to keep WB movies in theaters but with much shorter exclusivity windows.
• Strategic Play: Speculation that Netflix could intentionally “strangle” theaters to push at-home viewing.

Quote:
"The very dark, cynical take on this would be, that is why Netflix wants Warner Brothers so bad, because it could slowly strangle the remaining life out of their major competitor for your entertainment dollar." – Lon Harris [06:47]

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3. Jason Calacanis’ Disney Takeover Plan & Theaters Revamp

[09:53–16:41]

• Jason’s Vision: Proposes that Disney should buy out major theater chains, offering perks to Disney+ members (e.g., $1 movie tickets, theater rentals, exclusive previews).
• Artist-First Approach: Promises theatrical freedom and dedicated screens to big directors (e.g., Tarantino, Spielberg, Nolan) to keep them loyal to Disney.
• Innovation: Envisions a hybrid experience where theaters become community hubs for watching both new releases and curated classic films or podcast events.

Memorable Pitch:
"Disney should buy the movie theaters. Anybody who owns Disney should be able to go for $1 per seat to any Disney film and for $100 per theater... You get to watch the new Ashoka there." – Jason Calacanis [11:00, paraphrased]

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4. Revival & ‘Microtheater’ Movement

[17:02–19:37]

• Microtheaters: Advocates for minimum viable product by owning/building a single, small high-end theater in cities like Austin to showcase curated content and live podcast debuts.
• Changing Habits: Predicts a renaissance for revival houses, anime, and special-interest screenings as mainstream theatrical declines.

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5. Broader Consumer Shifts & the Return of ‘Real’ Experiences

[20:41–23:15]

• Gen Z Nostalgia: Observes a trend toward unplugging from digital ‘junk food’ (short-form, vapid content) in favor of enriching, in-person experiences—even predicting a return of manual stick-shift cars as a symbol.
• Cultural Cycle: Philosophizes that every digital trend will have an analog backlash.

Quote:
"At some point there is going to be a movement where people say, I don’t want self driving anymore. I want a stick shift." – Jason Calacanis [21:52]

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6. Prediction Markets & Insider Bets Controversy

[26:02–34:53]

• Polymarket Scandal: A user named “Alpha Raccoon” (now 0axfeed) made ~$1M on inside bets about Google’s Gemini AI release and search trends, raising questions about insider trading in prediction markets.
• Regulation Nuances: While the SEC doesn’t regulate this space, CFTC bans market manipulation but not insider information—highlighting an evolving legal gray area.
• Corporate Policy Response: Expect companies to explicitly ban employees from betting on work-related markets.

Quote:
"In prediction markets there is insider trading....once someone finds out an insider from Google is making a bet..., they could take that information as a third party and trade on it themselves." – Alex Wilhelm [30:26]

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7. Startup Accelerators & the 2025 YC Batch

[36:09–44:17]

• Trends: Most YC startups remain U.S./Canada based; strong focus on B2B, fewer consumer companies.
• Top Picks:
  • Lightberry: “Social brain for robots”—no-code, voice-programming for robotics.
  • Dome: Unified API for prediction markets data.
  • Zephyr Fusion: Fusion power for space (future market bet).
  • Icarus: High-flying, solar planes for persistent defense surveillance.
  • Play Health: Perimenopause care.
  • Sunflower: App for breaking addiction habits.
• Advice: Feel-good (e.g. health, sobriety, climate) startups face a much higher bar with VCs, who want proven business models and clear returns.

Quote:
"Don’t give yourself credit for that [press/features]. Give yourself credit for a customer being addicted to your product and being willing to pay for it and having a high gross margin." – Jason Calacanis [47:48]

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8. AI Copyright Wars: Perplexity vs. Publishers

[53:00–58:34]

• Context: Perplexity (an AI-powered search/chat tool) is being sued by the NY Times and other outlets for allegedly scraping and summarizing content.
• Industry Precedent: Recalls Rupert Murdoch’s early warnings about Google as a “parasite.”
• Solution: Predicts that deals will formalize soon (e.g., paying $/story, licensing percentages); cites Meta, Microsoft already paying for news content.
• User Fair Use: Draws distinction between individual user rights to remix content versus companies training LLMs on third-party content en masse.

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9. Rise of Expert-Driven AI Trainers

[59:09–62:20]

• Company Spotlight: Micro One – connects domain experts with AI shops to help train and refine models, now at $100M+ ARR.
• Jason’s Take: Predicts the “future of AI is expert training, not scraping,” and expects the sector to balloon.

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Notable Quotes & Memorable Moments

• “Everything's a war. Business is a war. Especially in a complex space like this.” – Jason Calacanis [09:53]
• “If they strangle the theaters, then they increase the habit of people watching at home on 83 inch, $400 television.” – Jason Calacanis [07:47]
• “If you are a founder...the game on the field is, don't give yourself credit for any kind of high fives or getting included in the list here... Give yourself credit for a customer being addicted to your product...” – Jason Calacanis [47:48]
• "The whales are doomed." – Alex Wilhelm, on optimism about “feel-good” startups [49:57]
• “You should just have an authentication process and if people have a subscription, you can then access New York Times data and have it represented there in a very proper way.” – Jason Calacanis [57:25]
• “The future of AI is not scraping data anymore... It’s not synthetic data... What you need is to have experts...” – Jason Calacanis [60:14]

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Key Timestamps

• 00:00–04:49 – Breaking down the Netflix-WB deal, global implications
• 05:35–08:42 – The ripple effect on theaters and the film industry
• 09:53–16:41 – Jason’s Disney/Revival theater vision & industry pitch
• 17:02–19:37 – Microtheater concept and evolving movie-going habits
• 26:02–34:53 – Prediction markets, Polymarket insider trading saga
• 36:09–44:17 – YC 2025 batch trends and candid startup/VC advice
• 53:00–58:34 – Perplexity/AI copyright clash, licensing solutions
• 59:09–62:20 – Rise of expert-trained AI and promising SaaS businesses

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Summary

This charged TWIST episode covers a new era in streaming as Netflix nabs Warner Bros., shaking global entertainment. Jason, in vintage form, reimagines the future of theaters and proposes bold moves for Disney. The conversation expands to legal gray zones in prediction markets, the startup accelerator ecosystem, and copyright battles reshaping AI. This episode is a must-listen primer on how media, technology, and venture capital’s cutting edge are converging in 2025—and who the likely winners will be.

Transcript

[Lon Harris]

Bidding process is over. Netflix has won the bidding war to obtain Warner Brothers. Now the film and TV studio and all of the Warner Brothers ip, Harry Potter, HBO shows, Barbie, DC comics, that's all on its way to Netflix. Should this deal get past the next level of regulatory scrutiny, which is going to be, I suspect, very intense, but I would also say internationally is the huge concern I think here for regulators. Netflix plus HBO Max is going to be a dominant player in a lot of international markets. Netflix already has been really tough for a lot of international marketplaces. Like they're already dominating. So that's like the real next thing. We have to look out for the deal as of now, 72 billion, so 82.7 billion in total enterprise value. That's for the film and TV assets.

[Jason Calacanis]

What's the market cap now of Netflix? If this is a $70 billion deal, what does this represent in terms of the percentage of Netflix?

[Alex Wilhelm]

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[Jason Calacanis]

Hey everybody. Welcome back to this week in startups. I'm your host, Jason Calacanis. With me of course, Alex Wilhelm. How you doing, Alex?

[Alex Wilhelm]

Fantastic.

[Jason Calacanis]

And if you see Lonnie Donnie, our editorial director, Lon Harris is here. That means there's something big happening in entertainment and media. Lon, what is it?

[Lon Harris]

Could not be bigger? So the bidding process is over. Netflix has won the bidding war to obtain Warner Brothers. Now Paramount wanted all of Warner Brothers Discovery. They wanted the cable networks, they wanted cnn, they wanted everything. This deal is going to be for the Warner Brothers TV and film studio. So the cable network, cnn, all those Discovery, hgtv, Food Network, they will get spun out as a separate company and remain independent or get swallowed up by somebody else most likely. But the film and TV studio and all of the Warner Brothers ip, Harry Potter, HBO shows, Barbie, DC comics, that's all on its way to Netflix. Should this deal get past the next level of regulatory scrutiny, which is going to be, I suspect, very intense. I think that people are sort of focusing on the Trump administration, the fcc. Will American regulatory agencies let this through? Obviously, the Ellisons from Paramount semi aligned with the Trump administration. We sort of thought they would kind of sail through the regulatory process here. Netflix might be a very different story, but I would also say internationally is the huge concern, I think, here for regulators. Netflix + HBO Max is going to be a dominant player in a lot of international markets. Netflix already has been really tough for a lot of international marketplaces. Like, they're already dominating. Combine that with the power of HBO Max, and I feel like Europe is going to be a really hard nut to crack for this. They're already pretty anti Netflix in terms of theatrical windows. So that's like the real next thing we have to look out for the deal as of now, 72 billion. So 82.7 billion in total enterprise value. That's for the film and TV assets. That's the long and the short of it.

[Jason Calacanis]

Alex, any data points behind all this that we should know before I give my take?

[Alex Wilhelm]

Yeah, I want to go ahead and just show the original breakdown of revenue here. I think Lon makes a great point about international. We think quite a lot about Netflix as an American company, but when you take a look at it, you can see that its EMEA revenues are nearly as large as its U.S. canada revenues, and it's doing quite well in both Latin America and the Asia Pacific.

[Jason Calacanis]

So, wait, what is ema? E M A E?

[Lon Harris]

Europe.

[Alex Wilhelm]

Europe and the Middle East. And Africa.

[Jason Calacanis]

Oh, they put that together. So MENA is the Middle East, North Africa, but they say emea.

[Alex Wilhelm]

And if you don't know, Jason, these are all enormous companies and they're growing quite well. But the growth, largest growth rates are actually in the APAC region.

[Jason Calacanis]

So something to keep in mind, that's Asia Pacific.

[Alex Wilhelm]

Asia Pacific, yes.

[Jason Calacanis]

Yeah.

[Alex Wilhelm]

And the amount of money here is enormous. Netflix does not have this much cash that it can just throw around.

[Jason Calacanis]

What's the market cap now of Netflix? If this is a $70 billion deal, what does this represent in terms of the percentage of Netflix?

[Alex Wilhelm]

$423 billion, Jason. So this works out to about 17%.

[Lon Harris]

WB shareholders are going to get $23 and 25 cents in cash and $4.50 in shares of Netflix stock for each of their WBD.

[Jason Calacanis]

I'm an idiot. I made a J trade on Warner Brothers years ago. I thought, hey, Zaslav's a killer. You were on the show. You remember me talking about this?

[Lon Harris]

I do.

[Jason Calacanis]

I'm an idiot because I sold it. Because I was very frustrated with Disney and Warner Brothers not moving. All my other things were moving, and I knew there was a possibility they would divest this and some of the parts would be worth more, but they had this crazy overhang, and I was like, you know, I just don't want to sit around here anymore. So I took the loss against some wins on some other shares I had. It probably would have been a 50% gain for me in four years. But, you know, when you. When you're sitting on 3 to 5x gains, I guess sometimes you gotta. You gotta make some mistakes.

[Lon Harris]

Yeah.

[Jason Calacanis]

For jcal, what's important about this is when I saw Ted Sarando speak and I asked him a couple questions in a private event, I asked him about movie theaters, and he said, we'll never be in that business. He doesn't like movie theaters. I said, but I'm a member. I have a family. We love the movies and we love Netflix, and we would like nothing more than to go to a Netflix movie theater and watch some of these things in the movie there, because my daughters love to go to a movie theater with other kids and have that communal experience. So why wouldn't you? And he's like, yeah, it's just not what we do. And he was pretty adamant about it. So what happens now, Lon? Because I was listening to, you know, I listened to some of the ringer shows. They have a really good show, the Big Picture. They have the Watch. I love the Watch. I don't listen to Big Picture regularly, but I listen to the Watch regularly. I really like that. The Watch is a great podcast for TV shows. Putting it aside, you know, everybody's kind of lamenting, if you took Warner Brothers out of the mix and they stopped making theatrical, Theatrical would actually collapse because they have the DC franchise and all this stuff. So explain to us, if they sell the lot, if they stop making theater releases or they do what Netflix does, which is like the token, you know, minimum to get Oscar consideration, what happens to the movie business?

[Lon Harris]

Oh, collapse. The very dark, cynical take on this would be, that is why Netflix wants Warner Brothers so bad, because it could slowly strangle the remaining life out of their major competitor for your entertainment dollar. So let's consider Warner Brothers slate for this year. Sinners. One Battle after Another. A Minecraft movie. Weapons, Final destination, bloodlines, the Conjuring 4, Superman. You're talking about a lot of this year's biggest Hits. Add in Barbie, the number one theatrical film of all time was a Warner Brothers release. I mean, they are a major significant tentpole, one of the big five, but along with maybe Disney, Universal, like one of the key players that is driving the movie theater business. And if they suddenly pulled all of their films out of theaters, it would be, I think, a shock to the system for the regals of the world and the AMC of the world that they might not be able to recover. I'm not saying that is the goal. You could read it that way.

[Jason Calacanis]

If they strangle the theaters, then they increase the habit of people watching at home on 83 inch, $400 television.

[Lon Harris]

Of course, I mean, Netflix has always said they don't see any one particular entertainment company as their rival. They see time. People spending time on other things is what hurts Netflix. And so this would be a chance to snap one of the biggest leisure time activities cleanly. There is a cynical take. I'm not saying that's necessarily what they're going to do. And Ted Sarandez has sort of already discussed this. People have already sort of asked about it. They're saying for now they plan to keep WB movies in theaters, but they want to make Sarandos is calling it more consumer friendly. What everybody is reading that to mean is shorten these windows so movies, WB movies will still come out in theaters, but maybe it'll only be a few weeks before those movies are on Netflix instead of a few months like it is now.

[Jason Calacanis]

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I am going to tell you what should happen here. Let me tell you about the chessboard. Everything's a war. Business is a war. Especially in a complex space like this. As you know, I, in another lifetime was a studio head. This was my dream job. Okay. And I saw this, this TV show, the Studio.

[Lon Harris]

The Studio with Seth Rogen.

[Jason Calacanis]

Sure. Incredible. And it convinced me even more that I made the wrong decisions in my career. I should have just been a studio head like the Kid Stays in the Picture or Barry Diller. I was born in the wrong generation. I missed it by one generation. I should have been a goddamn boomer and I should have ran a studio.

[Lon Harris]

Robert Evans is the kid states.

[Jason Calacanis]

I should have been Bob Evans.

[Lon Harris]

Bob Evans should have been Barry.

[Jason Calacanis]

Somewhere between the two of them. This is what has to happen when I become the studio head and I run Disney and put me in charge.

[Lon Harris]

Yeah, take over for Iger.

[Alex Wilhelm]

He's. He's looking.

[Jason Calacanis]

I will. I am going to quit everything I'm doing in my life and I'm going to run Disney plus or Disney and I will run it for Bob Iger for two years. And if I do a great job, then he hands me the baton and I just jump the line for everybody.

[Lon Harris]

Audition for two years. Yeah, I'll do.

[Jason Calacanis]

I'll do. I'll do it. Because put me in the game.

Here's what I think should happen. Disney now has a clear path. Disney should buy the movie theaters. Disney. Anybody who owns Disney should be able to go for $1 per seat to any Disney film and for $100 per theater. Just a hundred dollars to rent a theater with your kids and watch anything on Disney or Hulu that they own. So if I've got my kids and they love Ashoka, I can rent a movie theater for 20 kids, bring my kids, the cousins, some friends with five or 15 is up to me. And we get to watch the new Ashoka there. And by having it all the new series get a one week preview window in all the movie theaters. So.

[Alex Wilhelm]

Oh, that's brilliant.

[Jason Calacanis]

Disney, when I am in charge, is going to buy the movie theaters or buy out the movie theaters. Your Disney plus membership, you get a card. Your kids get a Disney plus card with their name on it and member since the people who have the longest memberships get priority at the parks. For merch. Limited run merch and there. So. And kids, if they're on Disney plus since, you know, they were five years old in 20 years, they're a 20 year long member. That means they get to the Disney parks ahead of the line. They get to go there, they get to watch all the things ahead of time. They get to rent the theaters and the theaters, by the way, to get into the theater, you bring your Disney plus card with your membership. You buzz yourself in.

[Alex Wilhelm]

Yeah.

[Jason Calacanis]

You can walk into any theater at any time. You swipe yourself in for a dollar.

[Lon Harris]

Disney adults are going to love this. You keep saying for kids, this is going to be a Disney adult.

[Jason Calacanis]

I mean, for Gen Xers like you. Yes. And you and I could say, you know, with a bunch of our friends, hey, you know what's, what's a great Disney plus series or a Hulu series?

[Lon Harris]

That Secret Lives of Mormon Wives, baby.

[Jason Calacanis]

Perfect. Okay, sure. Sounds great. We can go and just watch two or three episodes. This would change the dynamics of everything. And then this would make Disney plus catch up and then exceed Netflix. And then you do it internationally and you create micro theaters.

[Lon Harris]

Disney owns several movie theaters in Los Angeles. The Crest in Westwood, and most famous is the El Capitan in Hollywood. They do special events there all the time. Sometimes like Ariel or Moana comes out to greet the crowd and say hi to the kids. So Disney already in the movie theater business.

[Jason Calacanis]

So if Netflix is going to strangle, Disney plus is going to enable. Now, what this will do when I'm the studio head is when I call Mr. Spielberg and Mr. Cruise and Mr. Tarantino and I say, Mr. Tarantino, Mr. Cruise, Mr. Spielberg. May I, may I come see you for 15 minutes to just explain to you our goals to support artists and artistry in the theater. Because this is what we believe in. We believe theater should be preserved. May I come meet with you for about 15 minutes? I'll meet you anywhere you want. If you're in Maui, if you're in the Maldives, I'll come. Yeah, I gotta. I got a G6,700. Whatever, I'll just go.

[Lon Harris]

You're studio head now.

[Jason Calacanis]

I'm a studio head now. I go.

Listen, it's not Bob Evans time. I'm not gonna show up with a kilo of cocaine. I'm gonna show up with the promise of theatrical. And I will say to Mr. Tarantino, we're going to dedicate, you know, 100 screens to you, to curate your films, your favorite films, your friend films. Here is, here are the hundred. You know he was just on Brett Easton Ellis's podcast and he went through his top 20 films. Blackhawk down was his number one. I agree with him. Blackhawk down is one of the best films ever. I say to Mr. Tarantino and to Mr. Ellis, Brad Easton Ellis, I'd like the two of you. They both love the cinema. I'd like you to program these and you can put whatever you want in them. We trust your judgment. You're incredible curators. And when you do your film, when you do Once Upon a Time in Hollywood, you can keep it in that theater for as long as you damn well want to because you're Mr. Quentin Tarantino. You want it in for a year, it's in for a year. You want it in for six months, it's in for six months. And you can make that decision in real time. All we ask, humbly here at the Disney Corporation, is that if you do have another project, you at least give us the chance to support you any way we can. How am I as a studio head? Come on, I got the cigar.

[Lon Harris]

You would get a lot of the Denis Villeneuve's and the James Cameron and the Christopher Nolan's. Like, the people are still very dedicated to the theatrical experience. They are all going to flee for whoever is going to promise them a theatrical release. Tom Cruise too, for sure. If I have to put a bright side or find the sunny side of this, I do think that freeing up movie theaters from chasing this like diminishing pool of first run releases to do more creative things, just like you're saying. So the theaters that remain can become sort of half revival houses, half new things, screen older stuff that there's an audience for.

[Jason Calacanis]

Even better. Mr. Tarantino, you have this incredible video podcast. May we, Mr. Tarantino and Mr. Brad Eason Ellis, may we debut each episode in the theaters and then play a movie after? Double feature, video archives, podcast, and then whatever you talked on the video archives, we play that after. So it's a, it's a four hour experience. We'll sell the tickets for a dollar each or if you want to put a price on it, and then we'll give everybody a video archives T shirt as part of the package. It's $25. This is my pitch. Please. I'm being sincere here. Will somebody please clip this and get this into Bob Iger's email and say Jake Howe, at the height of his creative ability and career and energy, popped up on Alps and Nicotine Patches, wants to take over the studio. Please give him a shot. Put him in the game. That's it. That's my pitch.

[Alex Wilhelm]

AMC is worth $1.2 billion. They're the largest US chain by screens, and Disney's worth about 190 billion. Jason. So this would actually be a tiny deal that would be very easy to afford.

[Jason Calacanis]

I can finance that. Let's go.

[Alex Wilhelm]

I was actually kind of curious. Why don't you just get three friends together and buy AMC yourself and just do.

[Jason Calacanis]

I mean, that's not a bad idea. Not a bad idea.

[Alex Wilhelm]

It's.

[Jason Calacanis]

You have to own the IP is the reason. You have to have the IP is the reason.

[Lon Harris]

I think a lot of the reaction to this is like, oh, my God, Netflix is going to murder the film industry. Theatrical is dead. And I think the more realistic scenario is they're accelerating a process that we all see has already begun.

[Jason Calacanis]

I got an idea. I'm the master at, you know, having worked with so many startups. Forget about the tape. Private for amc. I got a better idea. We can do this two different ways because I got the checkbooks, I got the friends who have the checkbooks who like to put them to work. Let's put that on the side for a second. If we were to think about this as a minimum viable product, right? An mvp. This is this week in startups. This is my specialty. I was just meeting with all the accelerator classes. After this, I'm going to our demo dim sum demo day. I always talk to founders, but what's the smallest way we could do? The smallest way we could do this is to buy a movie theater in Austin, which I've talked to you about already. Or build a 200 seat theater. 100 to 200.

[Lon Harris]

So much land. You could do that anywhere.

[Jason Calacanis]

But I mean a good one. Or buy a classic one and just put a great projector in. So I want to find that. So anybody listening, please find me at theater or figure out how I can build 100, 200 seat theater. Okay, put that on the side. Then we start modeling this. Where we go, I'll go to Bret Easton Ellis. I'll go to Tarantino and the team. Mr. Tarantino, I apologize. And I'll find the video archives producer, which I believe is Avery's daughter, who's really spectacular on that show, by the way. She's a great, like, moderator. I mean, from the World's greatest. I can tell you she's. She's on her way. I'm not sure what Avery Jr's name is, but she's quite good, actually.

[Lon Harris]

Looks like Gala.

[Jason Calacanis]

Avery. Yes, Gala. I would say Gala. You're doing a great job. May we debut the episodes for video archives a week or, you know, a day before they come out in person at this theater? Boom. And we could do a zoom with whoever's available, you, the crew, etc, we can actually model this and show that there's a line outside the door, which there would be. Sure there'd be a line out the door. So anyway, there we go.

[Lon Harris]

To me, this is like the possible bright side of all this is that, well, if we do kind of give up this dream of first run movie theaters, tons of movie theaters in every city that are showing whatever came out that weekend, like a real revival cinema culture could emerge in its wake where people don't go to theaters just to see whatever the new thing is, but they purposefully go to theaters to see old stuff, rare stuff, offbeat stuff, personal stuff, stuff that means something to them. You know, there's a wide variety of the kinds of programing we could put. We are also already seeing this with anime. Like a few years ago, Japanese anime films never really came out in theaters in America. You would catch up with them on physical media or TV or whatever. And now those are some of the biggest box office draws like the New Demon Slayer or My Hero Academia. So we are already seeing this start to happen where all this kind of alternate content that wouldn't have gotten to see the light of day 10, 20 years ago now can get into theaters.

[Jason Calacanis]

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If these young folks are addicted to shorts and Junk food at some point. They look down at some point and say, I feel vapid. I'm having whipped cream. I'd like a steak. I'm eating these empty calorie Cheetos. I want the otoro.

[Lon Harris]

I'm going to go see Antonioni's red Desert this weekend. Damn it. Get some class.

[Jason Calacanis]

Yeah, but no, what they're going to want to. And these kids are now doing a thing. When they go out, they're all buying point and shoot cameras. I saw one of my friends, she's an influencer. There's like a Leica point shoot. I don't know what it costs, but this recent one is trending all over the socials. I'm assuming they're doing like an influencer campaign, but. But this is something that's happening already. People are buying old ones of these for 50 bucks. 150 bucks. Basically the Gen X parents old camera that they put on ebay or is in a draw, they get a memory card, they take it out. They're like, I like. I prefer shooting on this and leaving my phone at home. And they bring a flip phone and that. So they basically are unbundling and leaning into acoustic real experiences. So as a founder, you gotta think, well, there is a counter to everything. And this will happen. People will be self driving. At some point there is going to be a movement where people say, I don't want self driving anymore. I want a stick shift. So with the Corvette series, they stopped in the C8 making stick shifts because these tiptronics and everything was just so good. Like why would you ever do that? Because it actually slows you down. You got to learn how to do it. The C7, the last generation that had the stick shift of the C7 Corvette, you can pull one up and that engine in the front, which was considered not the best performance because the computer can do a better job shifting gears and putting the engine mid engine like a Ferrari, et cetera, is a better driving experience. The C7s, now the C7s, like Z51 Z06s, they're. They're the coveted ones. They're the ones that people are trying to buy. And there's too many of these other ones. Jason, that's a C7 because see the engines in the front, you see how big it is and it's gorgeous. Now that is the last stick shift they made and the last front engine, which is what the Corvette was known for. But the performance went way up when you put the engine in the back. And if you look at a C8. This is the hypercar. The engine's in the mid, so it's like right behind you and it's got the tiptronic. And so now for five years you haven't been able to get a stick shift in this like gorgeous Corvette and people are like begging to bring back the stick shift. You realize with the stick shift the idea of you texting and driving is out of the question.

[Lon Harris]

Yeah, that's not gonna work.

[Jason Calacanis]

Yeah, it's not gonna work. So this is the one I'm getting, by the way. I'm gonna get one of these.

[Alex Wilhelm]

This is gorgeous. I, I will say the stick shifts are a dying breed and we're all going to miss them when they're gone. But I think as we move to EVs in general, Jason, the idea of having variable set gears just strikes me as super archaic. This though, now imagine like let's get.

[Jason Calacanis]

Back to my fantasy here. The studio head. I got the Corvette C ZRX1, I got the cigar, I got the theater chain calling Mr. Tarantino Mr. PTA and I'm bringing it back, baby. Okay, any final thoughts? I mean because Trump's a little. Are amazing, fantastic, astute, insightful. President Trump. Even Jason realizes that he's going to probably want to have a say here in Paramount was the company I believe he wanted to win because Oracle, etc. Are kind of his guys.

[Lon Harris]

Exactly. I mean he's a friendly relationship with the Ellison's. They sort of, they took over CBS and now Barry Weiss is running CBS News. And I think the Trump administration really likes how that is going. I was kind of hoping, oh maybe these, these allies would take over yet another major news network. The key thing to notice, cnn. You mean cnn not part of the Netflix deal. Not going to Netflix. I think clearly that would have faced regulatory hurdles that Netflix would not have overcome. Like can they take over a tv, major TV show.

[Jason Calacanis]

They should have been able to. I said this on a previous episode, man, them having a 24 hour news channel globally on Netflix would have been.

[Lon Harris]

It would have been a game changer. But I think international regulatory approval of that kind of deal was going to be like a probably a no non starter for them.

[Alex Wilhelm]

On that note though, Lon, the EU is expected to pass this through. Everything that I read to the EU is going to be fine. So it's going to be interesting to see if it's the American regulators that actually are the sticking point here.

[Jason Calacanis]

I don't think so. I think they're going to let it Fly. I'll be honest, we're going into the golden age of M and A. We've talked about it here. We're seeing a lot of ticky, tacky singles and doubles and acquisitions. I told you, I'm predicting it now. There's going to be a 10 billion to $50 billion acquisition in 2026 and by 2027 there'll be $100 billion company gets acquired.

[Alex Wilhelm]

My thought though is that in the wake of the Meta FTC deal that we said was going to be a starting gun because it said that Meta didn't have a monopoly in personal social networking because of competition and changing technology, it was hard to prove. I think that applies directly here. Jason, how can you say that Netflix is going to be anti competitive here when they still have Disney plus on the side and they're up against YouTube and they're up against Peacock.

[Jason Calacanis]

Peacock. I just signed up for Peacock. I had no choice.

[Lon Harris]

The there are certainly in the US market, there are certainly other players and remaining options. And also I think the fact that CNN is not part of this deal and is going to get spun off and could still be acquired by a more Trump friendly voice means there really isn't as big a win in shutting this one down. Like I feel like, I feel like there's no clear win for the Trump FCC and putting a stop to this. It's not like they're, they're letting a news network go into the hands of hated enemies or anything. I don't feel like it may raise that much scrutiny as people are thinking.

[Jason Calacanis]

I wager, I wager to think that Poly Market is in the news.

[Alex Wilhelm]

They are indeed in the news and they're in the news because someone is particularly good at making bets. Over on Polymarket, there's one user went by the name Alpha Raccoon, now rebranded to 0axfeed, that made about $1 million, Jason, in 24 hours making very granular bets on Google happenings. Now people are calling this person an insider. Forbes is covering it, it's viral all over Reddit and I gotta say it looks pretty damn suspicious. I presume you've already, you've seen this in the news.

[Jason Calacanis]

I mean, I saw the headline. I'll be honest, I've been pretty busy here. I'm on the road. I'm in San Francisco for the all in Holiday Spectacular on Saturday night and my demo day, which I'm going to go right to after this Friday afternoon. So I have not been following the details of the story, but I do know that Alpha Raccoon has been betting on Google and some of their markets, correct? Am I correct?

[Alex Wilhelm]

Yes. So there's been a couple of major things that they've done. First off, they made a series of yes and no bets about when Gemini 3, Google's recently released AI model would come out. They correctly predicted the day and bet against all the other days. This led them to making a $424,000 gain, betting that Gemini would not be released by November 15th. They bet no that it wouldn't come out by October 31st, $114,000. And they bet yes that it would come out on November 18, netting them $91,000. But that's just the start. They also made a series of yes and no bets on will certain people be in the Google top five most searched people? They bet yes for Pope Leo, 174k profit. They bet no on Zoran Mandami, the Mayor elect of New York City plus 45K plus they bet no Donald Trump plus 171 and they bet yes on Jimmy Kimmel plus 15K. And this resulted in a pretty short time window. And when you're 22 out of 23, as Forbes reported, it looks pretty gosh darn suspicious. I think it's the polite way to say that.

[Jason Calacanis]

Let's be clear here, prediction markets are distinctly different than trading public stocks or betting on sports. There are going to be different sets of rules here. The reason prediction marks markets are unique is that there is no concept of insider trading.

In prediction markets. There is insider trading. If you worked for Google and you made bets on the stock price of Google based on the release of Gemini 3.0, that would get you in big trouble. And by big trouble I mean jail and insider trading. Martha Stewart, plenty of examples and that one was probably a little ticky tacky. And you know, they went after obviously as a celebrity this is a bit unfair but you know, everybody has to face the music I guess. I don't know the details of that one, but it did seem a little bit harsh for, you know, a tiny gain. I think they probably shouldn't need to go to jail. They could just given her a big fine and made her do a commercial. But anyway, putting it aside.

These prediction markets are different and if you're on the warriors or the Knicks, as we just saw with the Justice Department going after people who might have been placing what are called prop bets over unders on the number of rebounds, that also is illegal. So I think this is where the market is going to learn what's allowed and what's not. So where does this one sit and how are people framing it in the press? Are the prediction markets giving any guidance here? Or you know, Polymarket, Kalshi, other prediction markets? Obviously there's going to be a whole bunch of these with the success of Polymarket, which I have a partnership with and I'm a shareholder in full disclosure, you can't have an effective sales team without an effective and above all organized sales process. Trust me on this one. I've seen thousands of startups basically fail because they had messy, chaotic systems in the sales department. It's one of the biggest red flags there is this week in startups. It's about helping founders. So I want to tell you about the tool we use to stay organized here on this week in startups. It's called Pipe Drive. They bring your entire sales process together in one clear, easy to understand and centralized space, giving you just one place to check for all the customers and deal information you need. I'm a big fan of data, right? Especially here at this Week in Startups. So teams that use pipedrive close an average of three times more deals every month. It could be you join over a hundred thousand companies using pipedrive and when you use our link you're going to get a 30 day free free trial. No credit card or payment is needed. Just go to pipedrive.com twist to get started. That's pipedrive.com twist.

[Alex Wilhelm]

The media commentary about the legality here follows what you're saying that the SEC is not involved. This is not equities based insider trading, but the cftc, which does regulate the prediction market world, does ban market manipulation. Now what's not clear yet, and I don't know if we actually have a legal foundation here to stand on, is does it count as market manipulation? If you are an insider and you make a bet as part of a prediction market, does that action change the market enough to constitute manipulation? The consensus appears to be no. Which means that enforcement here is going to come down to individual companies trying to protect their own information and not letting their employees trade on it. Because once someone finds out, Jason, that an insider from say Google is making a bet about a project release, then they could take that information as a third party and trade on it themselves or change their own release schedule. I'm sure OpenAI is going to pay a lot of attention to this person when they bet on future Gemini release schedules because it's going to tell them exactly what's going on. So just as I think sports teams and sports leagues want to ensure that their players are not corrupting the league's performance. I think that companies are now going to have to be super clear about what their employees are allowed to do because they don't want to accidentally leak secrets through this loophole. And it may be that this particular user is not a Google employee. People seem very convinced that they are. But when they do get found out by Google, if they are an employee, they're going to get canned because one, they're making Google look really gross and two, they're effectively telling the market ahead of time when they're going to drop market defining products that Google wanted to keep under.

[Jason Calacanis]

Yeah, there are rules about this inside of companies already. Apple is very famous as well as Tesla and anybody who releases products on some cadence of explaining this explicitly to employees. And also they all have security departments. So the security at Apple, security of executives, I'm talking about security of corporate, security of secrets. This is like one of the most locked down organizations. And when the person lost the iPhone4 and Gawker bought and Gizmodo bought it and committed essentially what I believe is a felony to buy stolen stuff. I don't know where that ever hashed out. But I, you know, I remember the Engadget team coming to me and we're like, hey, we got to offer this too. And I was like, we're not going to commit felonies, thanks guys, but we'll take a pass. I mean, I'm being serious here. I remember them saying like, can we buy stolen secrets? And I was like, absolutely not. That's a felony. Like you can't commit corporate espionage. Now Nick Denton had a different position on it which was, let's see what happens. I believe was his interpretation.

[Alex Wilhelm]

How did Gawker fare long term there, Jason?

[Jason Calacanis]

Yeah, I think, yeah, you got to be thoughtful about these things because they can be what we call in the gambling business the risk of ruin. You don't want to ever get to that point. But employees need to know if you, putting aside the prediction markets, putting aside the cftc, your employer, you've already signed documents that you're not going to share information. In a way, this is sharing information and you're not allowed to use this information. So this is just going to be in everybody's employee contract. They're going to explicitly put in corporate documents. You are not allowed to participate in any prediction markets related to our work or the information you're exposed to. This will, this will be in documents very soon and you're not allowed to share it either. Because this is going to be a bummer in some ways, because what makes the prediction market so powerful is that people participate in them.

[Alex Wilhelm]

This is the thing, right? This is the idea that the Sharps, the people that have more information than the average person, can essentially tell the world what's going to happen. But if you take that out, Jason, and I don't mean to talk talk illness in startups that are doing very well, but I wonder what the value of the predictions will be if you take out insider information. Because then it's just reaction to market news.

[Jason Calacanis]

You know what? People have friends. So what's going to happen? Friends, cousins, friends of friends. Here's what typically happens is a person on a sports team is like talking to their friends in group chat and they're like, oh yeah, don't bother coming to the game tonight. LeBron's injured and the injury report hasn't come out yet. And they're like, yeah, no, don't come to another game, don't buy tickets to this one. And LeBron's not even playing. Then they're talking about like, yeah, LeBron's not playing. And then a friend of a friend places the bet that LeBron is not going to hit their 32 points and they win. Or like the Lakers aren't going to win. And all of a sudden, you know, you're in the money. So that's kind of the danger. Those kind of things will happen. People talk, people chit chat, et cetera. If you're a journalist, you have great inside information and like you're one of those like old school journalists who has a network. I suggest you quit your job and you just go full time polymarket. And there was a guy that was trending. I don't know if you saw this, but there's somebody who's just doing very small bets and making a fortune on polymarket. Did you see this?

[Alex Wilhelm]

I did not see the small bet guy.

[Jason Calacanis]

Yeah, there's a story that's been trending or buzzing around about somebody who's pretty sharp. I'm surprised we didn't pick him up as our, like, interesting person of the day. But there are a number of people who are full time on these prediction markets and they were. When there was In Trade, there was a company called in trade in the 2000s, early 2000s, people became like addicted to doing that. And it was, I think it was in London, but it got shut down or closed. But there are people who are going to do this full time.

[Alex Wilhelm]

I think there's also a startup opportunity here. Like all jokes aside, if you can figure out who the traders are on polymarket that do events and information, you can aggregate that and sell it to hedge funds. You can make a lot of money.

[Jason Calacanis]

I mean, all this stuff I believe is on the blockchain for these companies.

[Alex Wilhelm]

So that's why when this trader in question, Alpha Raccoon, whatever, changed their name, we knew exactly who they were. And that I. Because it's all in the blockchain. You can't, you can't scrub that out, which is the power of, you know, decentralized and so forth. But it's, it's, it's interesting. All right, let's move on. Let's talk about a couple of companies from the recent Y Combinator Fall 2025 class. A couple of stats for folks out there who are curious. Where is YEC getting companies from these days? Well, out of 156 launched companies, 130 of them are from the US and Canada, 22 are remote. Jason, four from Europe and one from Southeast Asia. And that's it. So essentially it's San Francisco in the cloud or nowhere. I'm not shocked by that.

[Jason Calacanis]

Yeah, exactly. Okay. Yeah, I mean, it makes sense. What I'll say is, you know, these are finishing schools. YC is the most notable of them. I'm not necessarily going to say the best because I think there's five of them now that are competing to be the best. Where one of them, launch accelerator A16Z has speedrun, pair VC MAR and Pejmon Ark from Sequoia. Yes, Antler has a great reputation. Techstars. Dave Cohen's back running it and rebuilding it and I saw him when I was in Tokyo. They're doing a great job. You should consider applying there. So there's five or six that I would say are the best and I think they're probably all equally good. If you are a founder, not in Silicon Valley, first time founder or a second time founder and your first project, you know, never became like venture backed or had, you know, serious backing. And what these programs do at their core is they're a sorting function. For every 100 people that apply, one get in. Or in our case, I think it's like 1 in 150 or 1 in 200. I think YC is pretty upfront that it's 1 in 100. So they don't do a perfect job picking companies. Obviously, like most unicorn companies don't go to Y Combinator, but they do hit unicorns on a pretty Regular basis, you know, probably a couple of year. Historically, VCs love the sorting function they provide and they love to draft off of that. And so that's what we're going to do right here. We're going to talk about the companies I see here. 100 B2B startups, 17 consumer, 14 in industrials. That makes sense, you know, business to business. Software people like to accept those to programs. Why? They very quickly get to revenue as opposed to consumers, which take years. Consumers are lightning in a bottle. One in a thousand work out B2B startups, one in 50 workouts. So you have a higher hit rate with B2B but you have more outliers with consumer. But tell me about the top couple companies and what they do.

[Alex Wilhelm]

Yeah, so one that Lon and I both really liked is called Lightberry, called the social brain for robots. And, and the idea here is if you have a humanoid robot, if you have a robot in your house, you want to program it. What if you could just talk to it and then teach it just from voice. So think of it as the no code for voice AI for at home robotics. It's a very nascent idea. Clearly the market for this isn't there yet because we don't have enough robots in our homes. But I love where they're looking. They're looking a couple of years ahead and that's probably where you need to start in robotics. A company called Dome Jason is super cool. It's a unified API for prediction markets because there's Polymarket, there's Kalshi, there's opinion, there's a lot of these now. And so what if you want to have all that information? What if you want to use it, what if you want to learn from it? They're building one single web hook for that.

[Jason Calacanis]

So Dome, a unified API for prediction marks. Great idea. They're going to need to have, if the information is public, they're going to be able to not scrape it, but they'll be able to collect it. But they're going to need probably permission from these markets if they want to have API access. But a lot of times small ideas, you know, things start as small ideas and it's a wedge and it opens up into something bigger. So I kind of like the idea actually. They're skating to where the puck is going.

[Alex Wilhelm]

That's what I was thinking. Kind of looking ahead a couple of years. Speaking of looking ahead a bit into the distance. Zephyr Fusion wants to take fusion power, Jason, and put it in space. Now you're saying we don't have functional net positive fusion power on the planet. Correct. But we are going to need it eventually up in space if we're going to have the in space economy that we all expect. Because solar power will only get us so far.

[Jason Calacanis]

Love that Again, sometimes with the startup you want to skate to where the puck is going and you have five years of build time because this opportunity seems super crazy. But if you can raise the money to do something super crazy like this, as long as you don't run out of money. So a startup like this needs to keep their burn low and have the right investors. So you need to have like a Steve Jurvetson and I think his fund is Future Fund now and I think he told LPs be prepared for a 20 year hold period as opposed to the classic 10 to 15 years. So you just need to match the investor to the window and that would be what Zephyr used to do here.

[Alex Wilhelm]

Also reminds me of Star Cloud. Previously they had a different name, but they're building the data centers up in space. Jason.

[Jason Calacanis]

Sure.

[Alex Wilhelm]

Also going to be a very patient process. You're going to want long term capital for that. A couple more of my absolute favorites. Icarus. This is high flying solar planes for defense context. So not satellites, not normal flight heights. Much higher solar powered stay up in the air for for weeks, months on end. Really cool idea.

[Jason Calacanis]

People have done this before. This was done 20 years ago. There was a plane that used solar that went around the world. So this is a startup doing that idea.

[Alex Wilhelm]

I think that the gist here is even though we have SpaceX bringing down launch costs dramatically, even though Blue Origin is getting the new Glenn to launch and then land its first stage, it's still really expensive to get to space. So what can we do? High stratosphere that is similar to low earth orbit satellites. And what's the value trade off there? I think it's a fun place to be and people are betting, I think a lot more on launch costs coming down Jason than on the ability to use planes up at the stratosphere.

[Jason Calacanis]

What's really interesting about this lesson is when people do experimental things in the world. Decades ago. So there was a project called Solar Impulse. This happened like in 2011. It was a Swiss long range experimental solar powered aircraft project. The goals were to be the first to circumnavigate the earth by a piloted fixed wing aircraft using only solar power and to bring attention to clean technology.

[Alex Wilhelm]

Here's one of the images of the first iteration, Jason of This clearly a stripped down, lightweight, high efficiency looking design.

[Jason Calacanis]

What's really interesting about this, if you think, by the way, it was Bertrand Picard, he created that project and he was very famous, like who was like an environmentalist, etc. Anyway, this was all done under the auspices of like clean energy, like as a proof of concept. But as time goes on and you think about the efficiency of solar panels, how much they've changed in 15 years, efficiency of batteries, how much they've changed and then autonomy and chip technology and AI, these things are going to be able to fly extremely high without pilots, without oxygen, without a bathroom, without safety concerns. You can just fly these things, you know, 50, 60,000ft where there's less atmosphere and they could be real game changers and they could be flying all the time. If these, they could be flying in perpetuity. So I think the interesting thing is how not can it circumvent the globe? How long can one of these stay up there and what could they do up there while they're up there? Really interesting technology. I like that one a lot.

[Alex Wilhelm]

Two more from us and then I'm going to bring up one from producer Claude Play Health. This is all about perimenopause care for women. There's been a lot of talk, I think in the, in the, the U.S. community about perimenopause as a thing to pay more attention to, to provide more accurate care or just better care for women. So I love that there's a startup working on that seems like a pretty good market that's not oversaturated.

[Jason Calacanis]

No, there's been a lot of this data, a lot of these apps, actually women's health apps. The challenge with these is people aren't willing to pay for them. So you know, with all of these you're going to really need to make sure that insurance companies are willing to pay for this kind of stuff. And they tend to be a bit niche. So while it does impact everybody, the key to the success of this company is will insurance pay for it, what will they pay for it and is it defensible, all that great stuff. So it does seem looking at their website, they do have a page about providers and they understand this, so that's good. Somebody who advised the company or the founders are very smart and they understand like, hey, to make this work are it's not just about building the app because a lot of people build a meditation app, a lot of people build a fitness app, period tracker, pre menopause tracker, all this stuff you have to be able to figure out a sustainable, profitable business model. So it has to provide enough value that an insurance company will pay for it or enough value that consumers will pay for it. And then you have to ask yourself, both of those things are hard, right? So if you're going to do these kind of healthcare things again, find an investor who understands working with this would be my counsel to them. And, you know, YC is filled with smart people. So I'm sure Gary Tan and his team said to them, like, the first question you're gonna get with investors, how does this scale and who's paying for it? And how profitable is what are the gross margins? And so it's gonna be challenging. But if you figure it out, what if it works? So I like it.

[Alex Wilhelm]

Another one that might have a hard time monetizing Jason, is Sunflower. But I like this idea. It's using an app to help people form new habits to break away from addiction.

[Jason Calacanis]

Have this many times, but you went through this kind of thing and did you use one? Or how appealing would this be to you as somebody who quit alcohol?

[Alex Wilhelm]

So what people don't know is that rehab is mostly just AA with a wrapper around it. And so I think that what we don't have is a variety of options for folks out there for whom the main, most popular method doesn't work. And so to me, as a person who also believes in harm reduction and helping people just live better lives, if Sunflower is effective, and it claims that it is, and if it can get into the hands of more people, then the amount of human misery that it could potentially take out of society is huge. So I'm just very optimistic about them taking this approach. I don't know if this is going to be the company that cracks it or if it's going to monetize super.

[Jason Calacanis]

Well, but you're exactly correct. And what I'm going to point out here is with what happens with venture capitalists, the very important lesson for founders, if you're doing something that is feel good. And on all these lists, like when I asked my team to put a list together, the press puts a list together. They will pick a couple of the feel good ones. And it was climate for a while. It could be dei, it could be women's health, it could be sobriety. All these things make you feel good, right? Oh, great. Helping society. You just said it like, if there's like multiple options, reduce suffering, please understand you're going to get 100% of your VC meetings and they're going to lie to you, venture capitalists are going to lie to you and they're going to say, I couldn't get my partners around the investment. However, I'm going to be as supportive as I can. Please let me know how I can help. And it's like, well, the way you can help is by making an investment. You're a venture capitalist. Like we don't, I don't need a high five from you, you know, like I need money, so be prepared. And I told my team internally because what was happening is we were accepting a lot of feel good startups because the team wants to make the world better. I said, I don't. We're not here to make the world feel better, we're here to get returns. And it's like venture capital is really hard right now. And that's what we're seeing. A lot of venture firms are going out of business. They're in like a stasis mode. They haven't been able to raise a new fund. So they're just living off of management fees and managing the existing portfolio while slowly getting rid of partners. That's like these, you know, you talk about zombie companies. There are zombie VC firms right now. So as the management fees taper off, you go from four partners to three to two to one and there's just somebody like, you know, wrapping up the fun, halftime. That's what happens if you make too many of these feel good bets. That's why it's really hard right now. So how do you counter that? You have to be a cutthroat capitalist. And the people who are attracted to these opportunities tend to be the feel good people who want a virtue signal or historically and who want the social credit for it. So when Molly was here and we were working on climate. Yeah. The big problem I had was the valuation expectation was really high. The majority of the entrepreneurs, I would say, were not cutthroat killers who were business builders who want to build profitable businesses. They kind of were kind of activist y and they wanted to save the world. They wanted to save the whales. I would put it in the save the whales category. So you had a high price and the wrong type of founders. And that's why climate became such a toxic space for returns for LPs. LPs know that they quietly have moved away from DEI, quietly moved away from that and these will have that same thing. So I'm not saying this because it's how I feel about it. I'm trying to explain the game on the field to, to those founders yeah, the game on the field is don't give yourself credit for any kind of high fives or getting included in the list here because we want to have like, oh, you know, when lists are built like this, oh, let's have some of the future tech, let's have some of the feel good, let's have some of the like obvious business things. People put lists together. You put list together at TechCrunch. We there. I put it together when I was at a gadget slow. Can I reporter. You have like a little diversity list. Don't give yourself credit for that. Give yourself credit for a customer being addicted to your product and being willing to pay for it and having a high gross margin. Because these founders get led astray.

[Alex Wilhelm]

Yes.

[Jason Calacanis]

The VCs are not helping them by saying oh great idea, oh great idea. So when I meet with them I say respectfully, love the mission, love that this exists in the world. What's the way you're going to print money and have a defensible monopoly here and be cutthroat and, and kill your competitors and, and, and, and a lot of times the founders, the virtual signaling founders, they're status seeking founders who want to be the CEO of the company that saves the wells and put them.

[Alex Wilhelm]

They want the personal glory for themselves. I see.

[Jason Calacanis]

Correct. And so VCs, this is the inside discussion that happens at the poker table at the, you know, post YC drinks, post tech Star drinks, you know, in the decision making room at YC or a 16Z speedrun. Oh, it's a feel good company. We're not here to feel good. How do we let them down easy? Take two meetings, give them some advice, introduce them to a friend, some university professor, whatever. Tell them your spouse is going to use the product, whatever, tweet for them, retweet them, but don't put our money in it. So just understand you have a ten times higher bar. That's reality. If you're in a feel good space, you're gonna win all the startup pitch competitions. And man, I've seen it over and over again. These founders, Alex, they start to believe that they're great, but not because they have a great business with great margins, with great virality, with great go to market strategies, with a great team with great technology. No, because they want a startup competition and they won because the person on stage is like, oh my God. Oh it's so precious. You're saving the fucking whales. So this is to save the whale trap. Don't get caught in the saving the whales Trap man.

[Alex Wilhelm]

The whales are doomed.

[Jason Calacanis]

I think the whales do pretty good, actually. I think since we started stop polluting the oceans and people stopped hunting them as much whales, the whale's doing better.

[Alex Wilhelm]

We're no longer using whale oil, which is, I think a really great thing for the whales.

[Jason Calacanis]

Isn't that just as a total aside, you know, as two guys from the Northeast, isn't it incredible that the Northeast and Nantucket and like that whole corridor was the Saudi Arabia, the qatar of the whatever, 17th, 18th century for blubber converted into oil to run lamps so people could read books at night.

[Alex Wilhelm]

They literally caught whales, cut them up into big pieces and then rendered the fat down on a boat, brought the oil back and then you put it in your lamps. Think about, like, think about the air quality in your house, Jason, if you're burning whale fat now, I will say my house in Providence, a historical old, you know, town, was initially owned by a sailing captain. So little fun, little fun bit of history there. Now, before we move on, Jason, we asked producer Claude to also take a look at the YC Fall 2025 list. And I want to highlight a company that both Lon, myself and producer Claude all liked at the same time. So right here we have the the top list from Claude.

[Jason Calacanis]

Claude, AI is exceptional. So we said here, rank the most promising companies from the Fall 2025 Y Combinator cohort. Shout out to my guy, Gary Tan, come back on the program anytime you haven't been on the program in 12 years based on which you think are most likely to pull through and get additional funding and growth in the future. Oh, I love the prompt. And he says, I'll search for the information about it gets all the results. Let me search for more specific information about the class. Great. Let me fetch more specific details about F25 companies from the own from the directory. And here it is, top tier most likely to break out multi factor security infrastructure.

[Alex Wilhelm]

So the one I wanted to highlight from this list that I just had on the screen is hyperspell. Because both Lon and myself also this company is very interesting. So I thought the three of us all together worth highlighting. Hyperspale creates essentially a separate memory layer that it caches that sits between the user and AI. So if you think about AI just as an engine or a brain and you as the person using it, you want to make sure that it has access to your stuff. But what you don't want to do is sit there and wait all the time for it to go read your email again. So hyperspell pulls in your email and your calendar and your context, all that and provides a contextual blob that then you can use as your own kind of like quick twitch information source for AI usage which I think makes AI both more personal and faster and therefore better twice over. Other people are working on memory Jason in LLMs, but I think this is a particularly cool idea and a good place for a startup to build great.

[Jason Calacanis]

Idea AI infrastructure, always a big winner and what I see here is it didn't say how it's making its decision here but it has founded by, you know for the Multifactor Company, ex CIA officer and NASA scientist with PhDs solving critical AI agent security with post quantum cryptography already has a strong investor backing so it knows some of the signals that we use here in Silicon Valley. So great job to our friends at Anthropic and producer Claude is amazing.

[Alex Wilhelm]

All right Jason, the New York Times is suing Perplexity because they're mad about copyright. Now the people mad at Perplexity include New York Times, Chicago Tribune, Amazon with a cease and desist, Reddit saying that they're scraping all their content Cloudflare a legend that they're going around all the robots txt norms. Forbes got mad at them, Dow Jones sued them. Question for you is really simple. Is Perplexity doing the smart thing here by trying to just go forward and ignore the legal threats? Or would you tell them that it's time to slow down and maybe make some friends?

[Jason Calacanis]

There is a legal framework that is going to emerge and I love the Comment browser and I use it and I'm trying to use some other ones. Nobody's got as good as one as Comment right now, but I love these agentic ones. Now if I'm looking at a webpage on my computer and I cut and paste it, I edit it, I can do whatever I want on my computer and Perplexity as a tool can do whatever it wants. Now there is a gray area here which is if a user looks at 100 LinkedIn pages, 100 pages of the Wall Street Journal, New York Times that are behind a paywall, does a large language model, etc. Have the ability to put that into their training or to use that or to scrape it in some way, the answer is obviously no because that would break the terms of service. But if a user uses it, yes. So we're in the middle of this dance specifically, I believe around this because it does feel fair to users that they should be able to if I pay for the New York Times summarize the New York Times with the assistant, you know, that I could have from chat, GPT, grok or anything, and I could certainly cut and paste a New York Times story and post it and say this, and say, summarize this. Now, am I breaking the law by doing that? No. When you're a user, you have the ability to remix and use content that you buy on your desktop, generally speaking, as long as it's not for commercial output and you use it. But are these things actually benefiting from it? And that's where there's going to be, need to be some rules of the road. And so perplexity is the first out there. And I think that they're probably on the margins being very aggressive about it. New York Times, as I said, is not going to be fooled this time around when they had Google scraping them and search engine scraping them, they made a mistake. Rupert Murdoch said somebody can go find the quote that, you know, Google was a parasite or something to that effect. And you know, if we all just blocked Google and made them pay, you know, the, the industry would do much better. Because Rupert Murdoch was right. Google would be nothing if they couldn't index all this stuff. But Google was fair for some period of time in the minds of publishers because they sent traffic and they didn't take too much content. Now that's all done. People are summarizing these stories. There needs to be a licensing deal for these.

[Alex Wilhelm]

Back in 2009, Murdoch said he might block Google searches entirely from his properties. And he said that they have kleptomania and is acting as a quote parasite for including newscule content inside of Google News pages.

[Jason Calacanis]

Right? And he had said stuff like this earlier. So they're not going to wait because remember, France, Canada and Australia all had rules around Google News and having to pay a license fee. And then Google said, well, we just won't have Google News in the country. It's no sweat of our back. We don't make any money off Google News. Long story short here, people need to sit down around a table and come up with a reasonable licensing fee. And there needs to be a tag on the New York Times that, you know, perplexity proposes and they should just say, hey, we will give you $1,000 per story. You produce 100 stories a day. So we're going to give you 100,000 a day. We're going to give you $3 million a month, $36 million a year to have the New York Times in perplexity and the New York times would say $36 million a year. We'll take it. Yep. Now if they said we want to give you $100 per story, we're going to give you $3.6 million. The New York Times can say F off. Like Logan Roy said to me, you know, my birthday a couple years ago, shout out to press for. Did you see that, Logan Roy?

[Alex Wilhelm]

I did not.

[Jason Calacanis]

We'll play it at the end of the show. F off is the right answer and the right thing for New York Times to stay to OpenAI and everybody else. Perplexity. And that's what's happening here. And I advise them on this very show, don't back down this time. Hold all the accountable equally. And just for the LLMs, you can't have a $500 billion company like ChatGPT or a $300 billion company like Claude, which we just mentioned, partner of the program.

[Alex Wilhelm]

You can't have a $20 billion company.

[Jason Calacanis]

Like Perplexity without paying for the content. That's going to make it great. So just make that decision to say 10%, I think minimum, 10% of the revenue of these should go to content perfect providers. A minimum. I might even say 50%. Like 55 is what YouTube gives providers. So they should just give a percentage of. It's a benefit to those programs to have those partnerships. And I showed on this with my notion Kanis, you know, ideas. Log in with your New York Times account to Perplexity. Authenticate, authenticate with ChatGPT to your Disney plus account. Just have an authentication process and if people have a subscription, you can then access New York Times data and have it represented there in a very proper way.

[Alex Wilhelm]

That would be so amazing.

[Jason Calacanis]

You would have a competitive advantage. People are paying Reddit now, right? They pay Reddit.

[Alex Wilhelm]

On that point, Meta just announced a number of deals with media properties for its own AI product. This includes cnn, Fox News, Le Mans, People, Daily Caller, Washington Examiner, USA Today. More coming and they're going to pay. When they cite those articles in their AI products. This is a great model. Microsoft also signed a deal with Business Insider recently. We're starting to see this kind of shake out. The worry though is if I want to put on the other hat, if you will, steel man this a little bit. It seems to be that the companies who are making these deals are the ones most able to afford them. Meta, Google, with Reddit, et cetera, Perplexity has less profitability to play with. But at the same time, that doesn't mean theft is okay. Now, Jason, I do have Your Logan Roy clip. Do you want to see that?

[Jason Calacanis]

Sure. Play it for fans.

[Alex Wilhelm]

Here it is. If you're a succession fan, you'll know who this is.

[Jason Calacanis]

Ah, hey, everybody, it's your boy Logan Roy today on the pod. Yes. I'm telling you all to fuck off. I'm not doing this. Jason, you wish you could be as rich as me, but you won't be because you don't fly in helicopters. But your team at Launch wants us to wish you a very, very happy birthday and a big fan off to you. I love it. That was great. Birthday gift from Fresh.

[Alex Wilhelm]

Shout out to my guy, Fresh, who.

[Jason Calacanis]

Works for me and now has a.

[Alex Wilhelm]

Great company, Micro One, reached a $100 million ARR threshold. I think you're an investor in this company, Jason.

[Jason Calacanis]

We did the seed round. We were the seed investors in this company.

[Alex Wilhelm]

I wrote this up and then remembered that. So it does pass editorial guidelines. The reason why this stood out to me, Jason, is that it's another company in the world of connecting experts to AI companies who want to have their knowledge, to help them train and tune their models, doing incredibly well. Micro started this year at a $7 million run rate. Now it's over 100. It was at 50 million when it raised a Series A in September. And it fits into a broader category. Merkor, which you've had on the show episode 2159, is reported to be about a 450, $500 million run rate. Same idea. We've also seen scale AI before meta. Half bought it, half decapitated it, grow incredibly quickly. They were on the show episode 1,500 and surge AI also in the space, profitable, growing very quickly. Over a billion in trillion revenue. My question here is, and not to be a Debbie Downer, because this is insanely impressive, but is this a long term business? Are they going to need these experts forever?

[Jason Calacanis]

Yeah, because the world changes over time and we're out of data to put into these LLMs. Everything that could have been scraped is scraped. We're now fighting over the scraping of it to, you know, per the last story. So what's left? Get some experts in here and say, hey, experts, there's a deal with Warner Brothers. Our first deal. You're a media expert, Lon, walk us through the deal. Oh, there's a 10Q. Interpret it for us, Alex. Oh, there's a startup here. Interpret it. And for experts, there is going to be a new job category. So we talk about job displacement, which I've talked about a bunch. There'll be new Jobs created. The new job that's going to be created IS experts training LLMs. And then there are these intermediary companies like Micro1 that do a great job of managing that process because you need to have these independent contractors accumulated, tested, paid, all this stuff. And it's going to, I would say it's the second inning of these businesses. This is the future of AI. The future of AI is not scraping data anymore. All been done. It's not synthetic data because synthetic data only works in certain areas, like making a simulation of roads. You can't make a simulation of like people analyzing M and A, like fake M and A deals. That doesn't make any sense. So what you need is to have experts who were maybe journalists, teachers, PhDs, developers, whatever it is, come in, give their expertise and then look at the searches that are occurring, look at where things are breaking down, where people give the thumbs down to a physics question. Oh, that was a bad response. Hey, now train the LM to fix it. There's a war going on for who can have the best LLM. When we talk about the ranking, switching on all these leaderboards, how do you think you move up the leaderboards? Expertise marker. One expert at this. Very proud to have seeded this company. They're doing great. I think they have a bright future. I think it's probably going to go 20x from here and I think it's a great category and there's going to be a half dozen important players in it. And we got lucky enough to bet on one of the top three. Well, here we go.

[Alex Wilhelm]

Very impressive. Curious to see where the revenue goes next year. If they keep growing at this pace, they're going to be doing about a trillion dollars in revenue in about, I don't know, six quarters.

[Jason Calacanis]

Okay, all right, well, from your words to God's ears. All right, everybody, another amazing episode of this week in startups. We'll see you next time. Bye bye.

[Alex Wilhelm]

Bye, everybody.