Too Big To Fail? Too Small To Care? The New AI Landscape | Ft. Josh Mohrer

Summary

Trends with Friends: Episode Summary Episode Title: Too Big To Fail? Too Small To Care? The New AI Landscape | Ft. Josh Mohrer
Release Date: January 15, 2025
Hosts: Howard Lindzon, JC Parets, Phil Pearlman
Guest: Josh Mohrer

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Introduction

In this engaging episode of Trends with Friends, host Howard Lindzon is joined by regular co-hosts Phil Pearlman and JC Parets, along with special guest Josh Mohrer. The conversation navigates through a blend of light-hearted banter and deep dives into the evolving landscape of artificial intelligence (AI), startup funding, and the intersection of technology with politics.

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Lighthearted Beginnings: The Creatine Banter ([00:02] - [03:09])

The episode kicks off with a humorous exchange about creatine supplementation among the hosts and Josh Mohrer. The playful discussion serves as an icebreaker, setting a relaxed tone before transitioning into more substantial topics.

Notable Quote:

Howard: "This situation where both 'too big to fail' and 'too small to fail' can be true at the same time." ([30:26])

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Josh Mohrer's Journey and Uber Experience ([03:09] - [07:06])

Josh Mohrer shares his extensive background in early fintech ventures, notably his pivotal role at Uber. He recounts his tenure as the General Manager for Uber in New York, highlighting the rapid growth from zero to $3 billion in annual bookings over five and a half years. Josh also touches upon the challenges of scaling operations and navigating regulatory landscapes.

Notable Quote:

Josh Mohrer: "They were looking for a GM for New York. It was like, run your own business here, basically." ([05:14])

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The New AI Landscape and Wave App ([07:08] - [22:49])

The discussion shifts to the burgeoning field of AI, with a focus on Josh's latest venture, Wave, a note-taking application augmented by AI. Josh elaborates on how AI tools like ChatGPT have democratized the ability to build and manage startups without extensive engineering backgrounds. He details the development process of Wave, emphasizing the iterative problem-solving approach and direct user engagement without relying on a large team.

Notable Quotes:

Josh Mohrer: "It's not learning how to code, it's learning how to implement, it's learning how to use the different services." ([17:01])

Michael Perek: "Sam Altman at OpenAI has consistently said over the last year that AI is going to basically lead to a world of many businesses that will be 1, 2, 3 people and worth billions of dollars." ([16:05])

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Funding Dynamics: Venture Capital and Private Equity ([22:49] - [44:44])

Phil Pearlman introduces a critical analysis of the current funding environment, referring to the "Nifty Nine" — the nine largest tech giants whose massive investments in AI are reshaping the market. The hosts discuss how these companies are investing between 60% to 160% of their free cash flow into AI, leveraging political ties to scale their operations globally.

Josh emphasizes his preference for organic growth without diluting ownership through venture capital (VC) funding. He likens his business model to running a digital store, sourcing AI capabilities directly from providers like OpenAI and focusing on sustainable, lean operations.

Notable Quotes:

Phil Pearlman: "AI can benefit both the very large and the very small." ([12:40])

Josh Mohrer: "I just want to do what I'm doing. ... Modify cap tables, do different games, is problematic." ([23:53])

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TikTok's Legislative Battle and AI's Consumer Impact ([44:44] - [35:26])

Michael Perek delves into the ongoing legislative challenges facing TikTok, set against the backdrop of broader AI advancements. He outlines the deadline for TikTok to spin off its US operations and the potential involvement of high-profile investors like Elon Musk and political figures such as Trump.

The conversation underscores TikTok as a prime example of AI-driven consumer applications, highlighting its algorithmically curated "For You Page" and its influence on competitors like YouTube Shorts and Instagram Reels. The hosts predict that TikTok will likely remain operational despite political pressures, given its massive user base and economic significance.

Notable Quotes:

Michael Perek: "AI is being fundamentally used to leverage our data to figure out what we want." ([30:57])

Phil Pearlman: "This is the greatest time to invest and it's the greatest time to build." ([30:26])

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The Intersection of AI, Politics, and Capital ([35:26] - [55:55])

Howard and Phil explore the intricate relationship between AI advancements, political maneuvers, and capital flow. They discuss how AI is not just a technological trend but also a political tool, especially with impending changes in the US administration. The conversation emphasizes the transformative power of AI in creating both large-scale infrastructure and empowering small, agile startups.

Phil urges listeners to dismiss the prevalent negativity surrounding AI and politics, advocating instead for capitalizing on the present opportunities to innovate and invest. The hosts reflect on the evolving nature of venture capital, the rise of private equity, and the strategic importance of aligning with influential financial institutions like Goldman Sachs.

Notable Quotes:

Howard Lindzon: "Two things can be true: too big to fail and too small to fail at the same time." ([30:26])

Phil Pearlman: "If you're small, if you're large, if you have a lot of money, if you don't have a lot of money, ... this is the greatest time ever." ([30:26])

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Closing Remarks and Future Directions ([55:42] - [55:55])

As the episode wraps up, Josh Mohrer discusses his future plans for Wave, including expanding its capabilities to support Zoom meetings and phone calls, and enhancing its AI to provide comprehensive summaries across multiple meetings. The hosts emphasize the importance of marketing in the current tech landscape and encourage listeners to focus on building and investing in innovative AI-driven solutions.

Notable Quotes:

Josh Mohrer: "I could use someone a little more clever [in marketing]. It's the most important job in the world." ([53:07])

Phil Pearlman: "AI is now moving into the background, just like when you pick up an iPhone." ([53:01])

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Conclusion

This episode of Trends with Friends provides a comprehensive exploration of the current AI landscape, the strategic maneuvering of tech giants, and the opportunities available for small startups like Josh Mohrer's Wave. The discussion underscores the symbiotic relationship between technology, politics, and capital, illustrating how AI is not only transforming industries but also reshaping the dynamics of power and investment. Listeners are left with actionable insights on leveraging AI for innovation and growth amidst a rapidly evolving market.

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Transcript

[Howard]

Are we live?

[Phil]

Yeah.

[Howard]

I'm not doing another creatine bit.

[Josh Moore]

So how about creatine? I just started taking creatine, dude.

[Phil]

I'm snorting it. I'm hurting it.

[Josh Moore]

I'm hurting.

[Howard]

On your Uber app.

[Josh Moore]

No, this time alternative to put it.

[Howard]

On your Uber app.

[Josh Moore]

It improves mitochondrial function.

[Phil]

I thought it right off my own titty.

[Howard]

I put it on this nipple five episodes ago, and now this nipple is abnormally large. Oh, my God.

[Josh Moore]

I started lifting weights for the new year and I took some creatine. And this is. This is totally true. I did a couple times, very light. Hurt my shoulder, have tons of pain in my arm now. So it, you know.

[Howard]

That'S just what we would call a Jewish weightlifting story.

[Josh Moore]

I should have stuck to, like, walking in the pool. You know, you get in the pool and you, like, walk around.

[Howard]

Let's just do a series of books called short stories. Jews weightlifting, Jews surfing. Jews horseback riding. These are all short stories. Jews in the military, swimming while standing.

[Phil]

Up with styrofoam on my arms.

[Michael Perek]

I felt so behind in this conversation. I didn't know what creatine was. I had to Google.

[Howard]

So creatine was supposedly illegal, but now everybody is using it.

[Phil]

It's actually been around forever. It's just gotten super popular. It's great. You want to get like a good brand like Thorn or Momentous. And it's great. It's great for recovery. What did I say? What? Lean muscle, mass recovery, mitochondria, all the buzzwords. Brain functioning.

[Josh Moore]

And you can snort it.

[Phil]

And you just snort that.

[Josh Moore]

I'm just kidding.

[Phil]

You just dissolve it.

[Josh Moore]

It doesn't rely as hard the third time. Yeah. All right.

[Howard]

We're live. I don't believe you. I don't believe that I've caught. Prove it. That we're live. Well, sorry, you caught me mid snort of crack. Creatine. I. Listen, since this isn't going to be live, let me talk to you. Let me talk to you about my creatine dealer. I got the best creatine dealer. Look at this. Let me just tell you. Oh, it just. It's just unbelievable. Creatine. Is it good for you? Phil, what is the. What is the latest on creatine?

[Phil]

It's great. It's great, man. Nobody's having nobody. There's no, like, studies coming out with cautionary. It's like, great for recovery. Great as you age, Great for your lean muscle mass, great for your. Your mitochondria.

[Josh Moore]

Let's start again because I'm sure.

[Howard]

We'Ve.

[Phil]

Been having technical difficulties today, and evidently we've been all.

[Howard]

Are we really live right now? Because right now I'm. Right now I'm on Only Fans Making Friends. Okay? So we are live. Welcome, Josh Moore.

[Phil]

That's the correct pronunciation.

[Howard]

Hang on. So hang on. Phil Pearlman, welcome. We dress the same today. It's. The odds are very low. Welcome. Welcome, Phil. JC's on layaway and as always, joining us, the AI whisperer. 20 years with Goldman Sack and he's joined the good team. You know, he's joined the world of AI and, uh, investing personally. Very fired up about AI. People that tune in here. Love them. Michael Perek, welcome. And from the world of New York, we got everything covered. Everything covered today. Josh Moore. Old, old friend. Josh, you're only like 40, maybe 42, but thank you. Yeah, you look great. That's what it looks like when you have no employees and run a very successful business.

[Josh Moore]

This is no one to stress me out but my kids.

[Howard]

This is what it looks like when you have 50 employees. And, Phil, that's what it looks like when you just have bad genes. So welcome, everybody, to Trends with Friends. Our special guest, like I said, Josh Moore. We're gonna get right into it. We'll get to the market. But we just, we just had this fun conversation when we were fake live because Josh came on to talk about his AI business and what AI has done for the world. But we can't deny his history. Early fintech, a covestor, which was just ahead of the curve. Big investors. I was a tiny investor as well. Fred Wilson, I think, led that round. You were ahead of the curve. Don't want to talk about that, but let's talk about uber. Underemploy, number 30 at Uber, in charge of the biggest city and the most important city in the world, New York, which was not the first city that they did. I think San Diego was one of the first cities. And Coronado, I remember because I lived here. What, when, when did New York come online? Do you remember?

[Josh Moore]

Yeah. So they put New York online as the first expanded city actually, after San Francisco. This is probably middle of 2011.

[Howard]

Was there UberX yet? Was there UberX yet?

[Josh Moore]

No, this is still in the land of totally licensed black car service. Uber Black, which is now known as Uber Black. And I first made contact with Uber that December. They were looking for a GM for New York. It was like, run your own business here, basically. We'll provide the technology and. And you'll go do that. And so it was great. I was doing. I was doing operation roles at other startups, and this felt like a good one for me. It turned into a bit of a public relations and government affairs job, just because regulation is so sort of central to this sort of thing, especially here. But, yeah, after about five and a half years, we went from something like zero to $3 billion in annual bookings. The business expanded to places like New Jersey and Connecticut and the Hamptons and Westchester and all these places as we were starting to expand, you know, across the US and then eventually across the world. Yeah.

[Howard]

And. And who played you in the movie?

[Josh Moore]

In the tv. In the Made for Television Showtime show, they had a couple of sort of New York episodes that were collapsed into one storyline, which is around the launch there. I was not in the show, so, like, no one played me. There was a couple of.

[Howard]

Because I thought at one of the party scenes, there was a picture of a guy and we only saw his ass. And I always thought that was you. So that was.

[Josh Moore]

It was a nice ass. Yeah, it was. It was me.

[Howard]

It was. I don't know. Can't comment on that. Yeah, hang on. That show is more creatine. And answer that question. I don't know.

[Josh Moore]

That show was based on the Mike Isaac book, who wrote a lot of, like, really nasty stuff about us for the last couple years I was there. So, like, the show was entertaining. I liked it. I even maybe enjoyed it, but it wasn't totally accurate, as you can imagine.

[Howard]

Okay, we'll move on.

[Josh Moore]

It only went the way I said it went. Didn't go the way.

[Howard]

Quickly Uber Wayo. Just quickly Uber Wayo. Because, you know, just get it out of the way now.

[Josh Moore]

Uber Wayo Tesla, you know. Oh, Uber Wayo. Deal.

[Howard]

Uber Wayo Tesla. Who wins? Who wins?

[Michael Perek]

Robo Taxi. And Robo Taxi.

[Howard]

Yeah.

[Michael Perek]

You know, it's way more. And robotaxic, obviously.

[Josh Moore]

Yeah. So I. So I'll preface this by saying I don't know what I'm talking about. My understanding is that Waymo has to do a deep mapping.

[Phil]

I'm saying.

[Josh Moore]

I'm. Like, I did. I'll say my bit, but I'm just saying I'm saying it with force as.

[Howard]

If I've never been more confident in anything. That's the only thing.

[Josh Moore]

I'm super right about this. I'm super right about this. And you should trade on this advice. I think that Waymo has to do a very deep mapping of every city that they're in. And the cars that they use have very expensive lidar sets that sort of do a specific way of seeing. And Tesla does it differently with just a visual thing, so. And it's a more generalized solution. I have a Model 3. I've been totally blown away with it, particularly since July when they rolled a new version. And the versions get better and better. I'm consistently driving 50 miles with no interventions. It's crazy. It freaked my wife out at first, but now she's into it. Like, it's really, really amazing. And it could go anywhere, back roads, whatever. It can sort of figure out it's a more generalized solution to autonomy than a sort of. The map of the world looks like this and will be in that map. The problem with Waymo, I think, that they're going to find is similar to problems we had at Uber, which is that people are messy. And not only drunk people or, like, nefarious intent. We're talking like moms with a baby.

[Howard]

That same Phil, that was a slight at us. I think he could be irregular, the way he's insulting us. Keep going.

[Josh Moore]

I mean, like, you think, oh, drunk people. You'll just warn them once and then they'll stop being so messy. And that's part of it. But actually, the biggest issues with messy vehicle issues at Uber was the, like, child who vomits or the child eats some Cheerios and leaves a whole mess behind. People make a mess not only out of bad intention or because they're sloppy, just because that's how the world is. And so having a human who takes responsibility for that car has a purpose. And so I sort of wonder at scale how that works, where the cars live, where they go for downtime, how they charge. Like San Francisco things work in SF that don't work anywhere else. That's part of why San Francisco is awesome. But Waymo will never operate in New York City. Like, I would bet on that. Just never, ever gonna happen with Tesla, I have a more. I'm able to imagine that a little bit better.

[Howard]

All right, Mike, chime in and then we'll get to our schedule.

[Michael Perek]

It's. No, it's. This was not on the topic, but I just want to. Because we're talking about it. This is a deep interest topic for me. I have a post on my substack number 510 if anyone wants to look at it. There's a lot more detail on.

[Howard]

Quickly. Go ahead, Mike. Quickly. Do you agree with that?

[Michael Perek]

No, no, I agree. No, Josh's. Josh brings up the core point, which is human, that everyone just assumes robo taxis and all these things are automated and people go away and you need people more than ever. Because he said it pithily. You said it pithily. People are messy and, and you know, one of the, the former CFO of Goldman ended up being CEO of Hertz and they bought a huge amount of Ubers and they have to, they're now selling them for billions. One of the issues is this business of people really messing with these cars on the EV side a lot more. And this is a key point, so I just wanted to underline that.

[Howard]

Yeah, and in the real world too, in the physical world, think about comedians, which I talk about a lot now. People just shake their head, but I'm like, who's the most popular type of entertainment right now? It's comedians, both from news. It used to be Jon Stewart, now it's every type of comedian. Stand up, interaction with the crowd, live working all the time. You can't AI that type of creativity. And hence you're going to have this incredible, you know, you're seeing it with only fans to start, but now it's moving to only fans of every category, which I, you know, I haven't talked about enough. But this is incredible. And this goes to the whole topic of today, Phil, which is too small to fail and too big to fail. That two things can be true at the same time. But anyways, Phil, you start. Let's go through your schedule, what we were going to chat about. But thanks, Josh, for being here.

[Phil]

Yeah. So let's get into it. So, yeah, the theme of the day is AI and this idea that we sort of have this barbell theory playing out where you have these huge companies that are incredible technology companies like Google and Meta and Tesla and Amazon and Apple. And then you have these small, small companies that, that also are super supercharged by AI. So AI can benefit both the very large and the very small. And so Josh, we were talking about Josh at Uber and Josh at AIC and Covestor. But his, his startup now, his endeavor now is this company called Wave. He's doing it all himself. This is so freaking cool. Why don't you just tell us, Josh, what you're doing a little bit about the company. I have a few questions for you.

[Josh Moore]

Sure. So the quick and dirty is I had a bunch of these roles at startups and kind of always admired engineers as the people who were actually building the thing that I was operating or selling and dealing with engineers. And I got pretty like I was adjacent to it for so long that I kind of got the sense that I could maybe do it too. And ChatGPT came out two years ago last November. And right when it did, I just left my last operating role and I was like, this is the moment. Like I had, I now have someone I can ask any question to about anything, no matter how stupid. And it happens to be very good at like engineering work. So I was already sort of 60% of the way there and it got me the rest. And so I built a few different things and one of them, they always say we could always use more note taking apps, right? That's the expression, always do more note taking apps. It's something like that. And so I made a few different things and one of them was this note taking app that is basically, it's incredibly simple. It records audio, transcribes the audio summarizes that. And so the typical use case is recording a meeting that's, that's actually like happening in real life. My, my father though was sick at the time. He's okay now. He's a former doctor, but he'd go to these meetings with doctors and come back and not really be able to deliver a coherent take on what they said. It was complicated stuff. My mom was there too. They're not dumb people, but it's just hard. And I said, hey, here's like a toy. I made this just for fun. Try using it at your next, you know, thing. And it was, and the result was amazing. I mean it was like an aha moment. Like, okay, this is a thing. I was noticing AI apps were very web browser based, very opinionated people were building for themselves rather than for actual users. There's almost nothing in the app store. And so I made this, I put it out, it was live probably by the end of 2023. And I've done basically all the engineering front and back end. I have a design firm that does like the thing that you're looking at here. They put together and I implemented it and I've really. And I've like hired zero people, which is the way I want to do it right now. Because managing people, which I've, I've done. I hired about 100 people at Uber and at one time had like 70 of them on, you know, there with me. That becomes your full time job, like manage. I mean it is literally dealing with them becoming their therapist, you know, helping through issues. How do I get growth in my career? How do I solve this problem? I have a problem with this person, whatever. So I really wanted to take a turn of just me and the users. So I have a boss, it's the people who Download and buy this and the support interactions. So there's support in app and it's all me. I chat with them and I haven't made that AI yet. I do that because it's been incredibly useful to talk to every person who has a problem and I have hired finally an engineer whose code is not live yet. So so far I can honestly say everything out there was done by me. That's going to start to change but there won't be any full time employees and it'll still sort of be me in a, in a small room which has worked out super well for me so far.

[Michael Perek]

No, this, this is terrific story, Josh. I just wanted to pull out the one of the broad points. Sam Altman at OpenAI has consistently said over the last year that AI is going to basically lead to a world of many businesses that will be 1, 2, 3 people and worth billions of dollars. And it's amazing to see the initiative that you took to make this happen, especially as a non engineer. Can I ask you two questions? Number one, what was the little bit specifics of how you as a non engineer put this together through all the AI services? Just a little bit more on the tech. Number two, the biggest criticism people have around AI businesses right now on the consumer side in the six box of applications is that everything is a wrapper around GPT and so on. And that, that I think is a positive rather than negative. And you I think are a case in point. But I'd love to hear more.

[Josh Moore]

Yeah, I mean, so I'll do the second first everything is a wrapper. I mean everything is a wrapper around something. And so it's true. It is the very basic version. And now I'll sort of loop back to the first thing. My first thing was like chatgpt. I'd like to have an app that does the following. It records audio, it takes the audio, it transcribes it through this API endpoint. You send all the audio there, you'll receive text back. Then take that text and send it over to this place and get back summary and show it in the app and it returned that to me. I took that, I put it into the thing and it and it totally worked. Took that out into the world. I tried it and then it didn't work. It did the first time or the second time that didn't work. It's like why? Well, because I turned the app off, I slid over to a different app, it broke the connection and it didn't work. And so I sort of intuited the use of a server, like, oh well, you'll actually have, you'll upload the file and then all the good stuff will happen on the server and it'll do its thing and then it'll return. And so if the user closes the app instead of staring at it, it'll still work. And there were, that's like, that was the first step of kind of how do you do this for real? What I found is it's not learning how to code, it's learning how to implement, it's learning how to use the different services. How does this work? What is this? What is a serverless? What is a server? What's the purpose of that? And so I really took it. I had been, I'd been kind of like near it forever, but never really got to sort of do it. And so is like just grinding until like all the answers are there. All the answers were there on Google. Now they're just in an interface that kind of summarizes them and delivers them fast. And so it was sort of like every little thing like, how do I do this? And you know, I knew a little JavaScript just from being around. So React Native, which is a JavaScript based language that deploys to both Android and iOS, felt like the right, the right thing. It's like, okay, when I background the app, the audio stops recording. That's no good. How do I fix that? And I spent like a few weeks trying to fix that. And there's a way and you know, there's a whole ton of open source stuff out there. React Native is open source, you know, expo, all these great things. There's a lot of people out there working in these sort of tools. And so there's a lot of help to be found is what I found. And it's been basically just iterative finding the problem, dogfooding it, talking to people. I do, like I said earlier, I do all the support. I have not outsourced the easiest thing in the world that I could outsource. I refuse to because my user base tends to be a little bit older. They tend to maybe not be tech savvy, they're not on Twitter, they're not listening to this, they're just people. And, and I get a lot of complaints that way, but I also get a lot of positive feedback. And, and while I didn't make the models, I didn't create OpenAI or any of this stuff. There was a similar like holy moment with a lot of these users that reminded me of Uber, frankly. Like you Know what I mean? And in that case, we actually did like make the thing. But for these folks, they were not aware because this is kind of a new thing that your computer can record audio and then summarize the text. Like that's the killer app of AI right now. It's text understanding. It takes a bunch of text, makes it a little less.

[Howard]

Yeah.

[Josh Moore]

So that's crazy.

[Howard]

So, so the thing for me with AI guys is it's not about me. Like Uber blew my mind because I used to go to San Francisco a lot. So I was early there, Josh, and I was part of that whole early investing crew and Angellist and seeing all this like crazy battles. And then Web one didn't do much. It was all Web two for me, this Web three, not so much interesting to me, but fun. Degenerate economy AI hasn't been about me, it's been about people around me. Right? Like so drag me back to stock twits because there's so much more we can do with less people, right? And it's so much more about our creativity on top of the platform. Right. And you know, listen, why I told the storyboro. My son has these moments where he just. I just feel bad because Google did. Google kind of made him as a non learner, as a kid who struggles learning in a traditional way. Right. Just as smart as any other kid, but the school system does not work. Google was great, but it was not a good hack for his brain because it didn't analyze the text, it didn't make him read, it just gave him links that he wouldn't read. It gave him dumb. It just made him a little bit dumber. Right. And less curious because you had to truly click around and lead. And I think what you're saying, this text based layer where Max can type a question and get the answer pretty much could be wrong, could be right. But mostly right. Yeah, mostly right. Mostly right. For a kid who's never going to click, mostly right is better than not being curious. And that is the aha moment that I continue to have for me, not so much because I'm a creator and I don't like AI and I don't need to touch it. I prefer, I prefer, I prefer my team to hand me 95% finished work and I'll finish the last 3 to 5%. Don't hand me 80% work because then we're starting from scratch. So as a leader, I want my team to get it to me now. If my team uses AI, great, get it to me faster. I can proofread it. So I think that's still the aha moment for AI. Obviously, it's just the beginning, as Michael has been harping on. So congrats to you. I mean, the key thing is, I think Phil, as he stayed, there's two choices. You can go raise a lot of money in AI or you can do what Josh did. And I think he had been around the hoop enough. You've seen every type of cap raise and been a VC for a minute and so good on you. And you had. You obviously had the family moment with healthcare, so that changed things too. So.

[Phil]

Yeah, that's it. Go ahead. Go ahead.

[Josh Moore]

No, I'm sorry. Go ahead, Bill. I was just gonna say. Yeah, I mean, raising money definitely was way. I was lucky that I was able to do this for like a year and a half before I made the first dollar. Now it makes money and it's great. But I was, I was. I was lucky that I was able to sustain myself for that year or so. But I feel like raising money would make the success bar so much higher. And I wasn't really interested in that. I mean, if anything, I relate myself to, like, I run a store. I'm a shop. I run a store in the digital world, and my wholesaler is OpenAI. I buy the model from them in bulk, and I sell it to people on a retail basis a little bit at a time, and I make a profit on that. Like, that's a very. That's not a new idea. It's new in what I'm doing. But buying something in bulk and selling it essentially is not a new idea. And that's kind of what I do. And I don't need to raise a bunch of money and shoot for being a billion dollar valuation, because that's actually that. That involves a whole bunch of things that are unpleasant for me, and I don't want to do that.

[Howard]

Which brings me to the theme film and try and tie this all together. We live in a world, we used to say, too big to fail. I think when the banks failed in 08, it was like this thing, you know, the banks are too to fail because, you know, you'll bank a million bucks, and it's a lot different than owing them a trillion bucks. Okay. But really what's happened is we truly now have companies that are too big to fail. There's nine of them. The Nifty Nine, the. The Fangs, whatever you want to call them. Batman. And this, this leads us into the chart of the week. The most interesting chart of the week which is not Far Coin this week, although Far Coin continues to trade crazily above a billion bucks or so is I saw this on Girly and Gerstner's podcast, which are great podcasts, right? Like they truly are geeks for geek sakes and asset managers, Gerstner. So it's not as sexy a chart as Far Coin, but it's one to me it's the most important chart, most interesting chart in the world. And why is it? Because the, the Nifty nine, the Fangs are spending all, you know, other than, I guess, Google. Okay, so that's interesting. Are spending 60 to 160% of their free freaking cash flow. Investing it. Okay. And I just don't think people understood. There's a million ways to read this chart, Michael. You give us your read. I, I, we all will read it differently. But this, it's hard to, it's hard to see. This is the most bullish thing that I can see. And it's also scary bearish in many ways. Depends how you read it. So go ahead, Michael.

[Michael Perek]

Big debate on Wall street in terms of the scary part, right? We're talking about these companies going from investing 20, 30 billion dollars collectively to now 20, 30 billion dollars per company and more going into next year and beyond. The only company, if you notice, of the five on this chart, Apple is the one that has the declining chart because Apple is really tending to its core two plus billion users of phones and PC and Macs and so on. But the others are, as you said, they're collectively going to invest probably to north of 200 billion this year. Microsoft is at the top of that at 80 billion. You mentioned Google is not spending as aggressively. But Google, everyone here has turned 20, 30 billion plus. Big debate on Wall street, you know, when will we get this money back? And I've written a bunch of posts on this. The returns on these investments typically are two or three years, four years later in this case. I think we're going to see it little bit faster than, than investors think. And part of it is the early part of our discussion, things like what Josh is doing, what Josh's app for instance is doing is basically if he grows his users from tens of thousands to hundreds and millions. Let's say every time they're using his Wave app to do all of the note taking and recording and transcript thing, it's using the compute that these companies are building like crazy. It's inference is these buzzwords. And then we'll be creating synthetic data out of the data that Josh's company is transcribing. And it will. His next iteration might be. I'm using Josh, your example, because you're here. You know, the next version of your product would. Could be all my data converted in, not just into transcripts, but converted into learning about what I do in terms of the next questions I want to ask about my own work and life. And that is going to use more compute. So that's point number one I want to make on this. Number two, all of these companies have a tailwind with the upcoming political change in Washington in a week with Trump taking office and Congress changing, because we're going into the world of what I called real tech politic. All of these companies are using their relationships with Washington and Trump aggressively to make sure that their investments for data centers and so on are able to scale across the world because they're framing it against China and so on. So this is a political element of this technology wave that is very unusual relative to previous technology waves. And so the combination of hundreds of billions with politics is a very potent force going into the first quarter of this year. And it's a trend that continues, obviously, for the next two or three years. I just wanted to highlight that it's very different. It's a big force on the way we invest in these things.

[Howard]

Phil?

[Phil]

Yeah. So we're going to come back to this idea of everybody benefiting from what's happening in technology right now, that this AI wave, pun intended, is gargantuan and amazing. If you are one of these tech giants and then you have the political tailwind as well, they're all contributing to the inauguration. They know what they're doing. It's a play. You can't blame them. And at the other end, what Josh is doing, if you're out there, by the way, just a quick point, then we're going to move on. We're going to talk about TikTok. Just a quick point. If you're out there and you are lone wolf and you're using ChatGPT or Gemini or whatever, and you're learning all kinds of things and you're able to build without knowing how to code or you know how to code, and you're building things and augmenting your own skills with the skills of an agent, there's a lot of negativity out there. And I just want to just really say this really quickly and we're going to move on to TikTok. There's a ton of negativity out there. There's A ton of people saying, oh, everything's terrible. You know, politics is terrible, everybody's ill, blah, blah, blah, whatever. Just ignore all of those negative people because this is the greatest time to invest and it's the greatest time to build. If you're, if you're small, if you're large, if you have a lot of money, if you don't have a lot of money, if you're just scraping by, if you're doing something on the weekends, you have a job a 9 to 5, but you're building something on the weekend. This is the greatest time ever. So just ignore all that negativity. It's all, it's all noise. Okay, let's talk about TikTok.

[Howard]

Hang on, hang on. Phil, did we get Max? Do we get a good take for the most interesting chart in the world from me or do. Are we good? May not be. Listen. Okay, keep. Wrong. Okay, keep going, Phil.

[Phil]

Okay, so let's just talk about TikTok right now. There's Michael, why don't you just take the lead here? Just tell us what's going on, what the implications are and who's going to, you know, who's involved.

[Michael Perek]

It's a key topic and it's not just about TikTok. TikTok just happens to be the focus. And I've done the last. My two or three posts are about this. The politics, the real politics around TikTok, the real politics around the mag sevens and so on. But the core issue around TikTok is obviously January 19th is the legislative deadline when TikTok was legislated to either spin off US TikTok, which is about 200 million users, to investors in the US spin it out of its parent company ByteDance, which is one of the biggest success stories in China. And the government of China owns control of ByteDance through what's called a golden share. And it was rumored last night that they're getting involved potentially to cut a deal with Trump and Elon, etc. Who knows if it's true or not to potentially have Elon take a piece of the, of the US TikTok with other investors. A number of billionaire investors in ByteDance who are Trump supporters are involved as well. And Trump changed dramatically his view on, on the TikTok ban. He actually ironically initiated some of the stuff when he was president the first time around. Now he's a supporter of TikTok not being banned and he actually filed an appeal to the Supreme Court as it's deliberating. So there's a bunch of Legal things short term that are going to happen in the next three or four days, the Supreme Court will say, hey, the ban is effective, not effective, etc. Those are tactical things. There is a move in Congress to rechange the legislation to add another 270 days to the thing, so it'll give Trump an opportunity to cut some sort of a deal. And so that's going on at the micro level for TikTok. The broader impact of TikTok is that this was in my mind, the most successful AI driven application for consumers that we've seen in the last two or three, last five or 10 years. Why 20 years. We've had Facebook with the Facebook app, with Instagram with WhatsApp. All of the social media that we know, Howard, you Talk about Web 2.0 has been based on the social graph. All the people you and I know, and interacting. TikTok basically with ByteDance in the back with their technology, fundamentally changed it. They use machine learning and emerging AI technologies to create what's called the for you page. It's 100% algorithmically driven. You don't have to do anything. It just figures out what you like from the things you look at and so on. That was brilliant. Everyone copied it. In the U.S. youTube has something called YouTube Shorts, which has, you know, hundreds of millions of users, Facebook meta. Zuckerberg, who's laser focused, he's got, he's literally minting revenue of over $10 billion a year from his TikTok app like app called Reels, which is about the same revenue last year as TikTok itself. You know, so just to give you a sense, so if TikTok gets banned, it's actually a positive for short term for the US companies like YouTube, Google and Meta. But the broader issue is that AI is being fundamentally used to leverage our data to figure out what we want. And that is. And TikTok was one of the best examples of that. The political and geopolitical and security issues aside, the other aspect of this battle that's going on is that a majority of the US and worldwide 2 billion plus users of TikTok love the app. The businesses love make, the creators love making money off it. So this thing has a lot of mainstream support and that's one of the reasons why Trump changed his view. He actually found it very helpful in the election, in the campaign, where a lot of his support leveraged TikTok. And so for all of these reasons, this is a political tussle, I expect. TikTok will not get banned. There'll be all these political moves and economic moves, et cetera. But it's a very important thing to kind of watch and track for the whole industry, at least for the next couple of months. But through this whole year, yeah, the.

[Howard]

TikTok thing goes to too big to fail. Two things can be true, Phil. Too big to fail and too small to fail at the same time. The money middle is just. There's money to be made in the middle, but there's no joy, right? You've got to be playing and then you got to be trying to get into the planetary Nifty Nine world or you got to stay where Josh is. That's where I feel you need to be, you know, under a hundred people crushing it ego put aside, living under the umbrella of these, you know, Godzilla fighting, you know, King Kong, like, they're not going to notice you. With T Rex fighting, King Kong fighting. They're just not going to know. Fighting Godzilla, they're not going to notice you. The most obvious thing that I've been writing about for a week is that this is coming to Andreessen and, and Musk. Musk played, played. Everybody went to. Went to Joe Rogan early. Now Zuckerberg's kowtowing to Joe Rogan, right? It's like everybody goes, that's new. He's the new Pope. You got to go on. You got to go on. Joe Rogan say inter invermectin cured this. You got to go in and Mark Zuckerberg got a perm. He got himself all dolled out with the gold chain. He has a new hair dryer. And what, so you get to go talk and grunt on Joe Rogan is like a cleansing. It's the new juice cleansing, right? So it's all a fucking charade. These people are the new preachers. You got to live with them. These are our overlords. You either have to. You can't fight them, right? This, these guys make Goldman Sachs look like kitty cats, right? But, you know, we replace. We hated having Goldman Sachs in the White House. And like I said, now we have Silicon Valley in the White House. And those tentacles, they're not. The, the unicorn squid is a lot more, I wouldn't say dangerous or interesting or, or, you know, the, the wildest story, the, the weirdest thing is the true story, as they say. And this is the weirdest story to happen to the White House because the blacks, what did they call the vampire squid is nothing compared to the unicorn squid. That is, that is.

[Michael Perek]

No, the Goldman octopus is now cute and cuddly.

[Howard]

Yeah. It's like, oh, I hope Goldman does well. Like, I kind of like I'm long going. I'm like, oh, they're the underdog. Right? Like that, you know, Robin Hood's trading almost, you know, $40 billion. Like you're kind of rooting for Goldman. We need Goldman because, you know, without Goldman, we're going to be stuck with meme coins for the rest of our life. If Goldman can't take companies public and convince. Convince them. Convince companies that they're, you know, that they should pay a 10 pillaging tax to get them public, we're going to be left with fart coin and butthole coin and Josh coin and Perlman coin. So this is one of the most epic. You have to read the markets here. And then, Phil, if we could pull up this chart about venture capitalists now playing this game. And this is where Josh was very smart to get at the venture capital game. The venture capital game is over. Now you can play it as I do. You can. You can be one on tv. One more chart.

[Phil]

Not that one.

[Howard]

Yeah, well, one more. Keep going down.

[Josh Moore]

Number six. Yeah.

[Howard]

So this is an older chart, pitchbook, Right. This has now become the Nifty Nine. Right, The Nifty Nine. And BCR Andreessen, General Catalyst. You know, be careful who you take your money from. They're no different than Goldman Sachs. Thrive Capital. I don't know who flagship pioneering is. Tcv. I know them. Arch Venture. So Tiger Global, Kleiner ivp. Okay. You want to play ball and don't have these guys on your cap table, you're not going to enter the universe of the Nifty Nine ever, ever, ever. Okay? That's just the new game. They have the money. And if you're serious about being a big company, you have to go where the money is, okay? Which makes too small to fail. And chasing companies like Josh and finding. Finding more Josh's more important than ever. Right? Which is what we do at social leverage. Right. You have to change the game. And the game has been completely changed. Goldman Sachs is not the gatekeeper. The White House isn't even the gatekeeper. Silicon Valley is the gatekeeper. And while we were. While I was like, making fun of them going to Dubai and taking money directly out of the ground and putting it into taking the 2% to launder it through venture capital. It's all funny, but it's true. And now the game has been played. And you wake up today, Michael, and you see that private equity looks the same as venture Capital that looks the same as the Nifty nine. That's the world we live in.

[Michael Perek]

This is a great chart, great point. I just like to add one couple more points. Number one, you mentioned private equity. We will have a chart in a later show where we will have a similar chart on the private equity side. Those two private equity and venture are blending in the world of tech. Why? Because the Nifty five that you had on the most important chart of the week, those companies for the first time are now infrastructure companies. The 200 billionaire they're spending is on dirt, assets in the dirt. And that's why we need hundreds of billions. And they're coming from Blackstone, blackrock. These are companies that run trillions of dollars, not tens of billions. And you mentioned Dubai Middle east has 700 to a billion to a trillion dollars. They want to invest in US tech. So those are the new sources as well for capital. And then the last thing since we talked about Goldman Sachs, I'll bring them in and tie in with the bow. Goldman just this week reported that they've reorganized their top leadership to take their private asset business, which is a fancy word for non public stocks and they've created a behemoth which to basically draw money from their wealth management business which manages indirectly and directly over a trillion dollars of assets with the richest groups and family groups in the world and the biggest institutions in the world. They are going to make it easier for companies, whether they're small like Josh or super large like an aspiring Uber, to be able to not just wait for IPOs in the public market, but to raise tons of money both through equity and debt against, against both the venture industry who will fund this and the billions and trillions coming from the private equity and the sovereign wealth funds and family office groups around the world. There are almost 3,000 billionaires in the world and they all have family offices. That is all getting harnessed into, into all of this as well. So I just wanted to highlight the bigger picture.

[Howard]

Yeah, family office is good trend like that's our fintech and well tech. That's where we're focused. Like everybody's a family office. Josh, I mean when you look at these, how does it make you think about your business in the future?

[Josh Moore]

Well, I mean the firms at the top of that list. So I because of the Uber bit and probably only because of that I got VC inbound from the big guys for wave. And I think if assets under management are 7 billion, writing me a check for 5 or 10 million, I'm never gonna matter to you. And so we're just playing different games. So I don't want to get into business with someone who's playing a different game than me because then that's going to be problematic. So I just, you know, careful what.

[Howard]

You wish for in a world of wash of capital. And we're also scared. So we're also in a world of washer capital, if you look at. And a world scarce capital where rates are seven and a half percent. So. So this is really a very. One of the trickiest markets I've ever seen from both the trading investing. Even though people are saying they're doing great, fine, if you're in the indexes, you're doing great. But if you're not doing the indexing, this is a very tricky game because we're awash in capital and very scarce in capital at the exact same time. Much like. Go ahead.

[Michael Perek]

And just a key point Howard, you made and Josh is making about getting 5 or 10 million even from the big VCs, you got to matter to them. Brad Gerstner, who you talked about, had a great podcast with Bill Gurley a couple of pods ago where he talked about that you want to kind of focus on the VCs that are a billion, 2 billion, 3 billion in assets less than 10, 20. Because you want to matter as a founder, you want to matter to them because the bigger the VC that are in the fives and tens, they're increasingly running their businesses for the management fees, whereas the smaller VCs are really doing it the way VCs have always done it, which is work for the founders that, you know, if we give you 5 or 10 million, we're going to be working with you to help you. And that is Brad Gerstner's problem point that he makes with his fund, which is both public and private with altimeter, his approach versus let's say the and reasons and the TCVs who are literally merging big sets of funds and running it for management capital. You'll also likely see a trend in this year or next with some of these companies. Just like the PE companies went public, some of the VC companies will go public as well.

[Howard]

So to raise more money, they can't help themselves. They will. Yeah, totally a great point. Think it's going to happen. It'll be a disaster, but God bless them, I think, I think Andreessen just has run the table beautifully from, you know, they take huge risks. They're not, they're not shy. You can't shame them. I mean, if you want to be in this business, you have to have no shame. You have to fight all day. And you got to give them credit. Like they don't give a.

[Michael Perek]

And two of their senior partners and two of. At least two of their senior partners along with the whole bunch of others are literally going to be sitting in the White house or in D.C. with official jobs around the new administration. So the idea is that there's potentially they're going to be all focused on synergies together. That's the fun word.

[Howard]

Honestly, we have the most interesting chart in the world, Phil. This is the most interesting. Obviously everybody says this is the most interesting time to be alive. Because there's just so hard to be happy. So easy to be happy. So hard to raise money. So easy to raise money. So hard to start a company. So easy to start a company. You've got it.

[Phil]

So hard to invest. So easy to invest.

[Howard]

Yeah, the best. Never been easier to invest.

[Michael Perek]

Bring out Dickens.

[Phil]

So I just wanna. I just wanna end the program with.

[Howard]

Hang on. If you're talking Dickens, you know what I do when I.

[Josh Moore]

Easy to take the creatine, when I pull up, hard to get strong.

[Howard]

Nothing like a dip in the creatine.

[Phil]

So I just want to end the program. Josh, by the way, thank you so much for being here. This was great. And your example is perfect. And you know, Wave is the app you don't even notice. You don't have to mess with the AI layer. You just go use it like you would any other app. So this idea that AI is now moving into the background, just like when you pick up an iPhone, you don't have to worry about what chip is in there. You just use it and it's intuitive. That's where we're heading. And that's one thing that I just love about what you're doing and the fact that you're just building it even though you're not an engineer. I just want to say one thing though. The name of this program is Trends with Friends. And it's so easy to get caught up in the politics of this. And there's people out there who are going to be super partisan on one side or the other. They're going to be super pro everything that's coming out of the White House or they're going to be railing against it every step of the way and hate, you know, hate scrolling or doom scrolling on social media looking for all the bad. None of that matters. There's no emotion and there's no partisanship in this whole endeavor. Whether you are an investor or whether you are a builder, this is an incredible wave that we are seeing with artificial intelligence and with the what, what Michael calls the real politic of AI. And the key for you as an investor to find the trend is to get on board, is to find what things are growing like crazy. We had this capital expenditure charts that we, we gave you all the materials. Today you got, you see the largest, greatest companies in the world that figured out how to be flexible. You know, back in the day, Exxon was like this huge tanker. It could only turn this quickly. Today, Amazon is this gargantuan company. It could build something just like that while you're not even looking. And so your challenge is to just find the trend, jump on board. Don't pay any attention to the morality or the, you know, I mean, hey, listen, if you don't want to be a trend investor, don't be. And you could be concerned about the morality and the ethics of everything, but if you're not and you just want to invest and find the trends, this is an incredibly powerful trend.

[Howard]

Howie, just a couple other things here on this topic because we didn't mention money. So AI, you said, what was the second thing you mentioned? AI? Politics. Politics. The third thing that's, that's, that we, that's solving this abundance problem is harder to raise capital and easier to raise capital. And it ties into like, never been a better time to be a marketer, which. One more question for Josh is like, if you were going to make a hire, where would it be? But hang on, is money right? The SEC is out there. We're funding the SEC as a fintech investor. Yes. I mean, pay to play has always been the thing. When we put money in Robinhood, the reason there was no innovation in fintech is because you had to deal with the government. Right. And VCs hate dealing with the government. Josh knows this with Uber, right? Did. They didn't ask for permission, they just went and did it. You cannot do that in American fintech. Now you can, right? Like so in a world of money, which doesn't interest four of us so much because it's like you said, it's kind of boring just printing money and making up money and distributing money. But in a world of new money, in a world where FinTech has been funding the SEC, Robinhood just paid $45 million yesterday for who knows what the headline says, The SEC wins. But we all know what happens. It's a pay to play game. And the reason 45 million to Robinhood let's face it, as a public company now worth 40 billion. The stock's up on this news, right? Because everybody knows the fucking score. This is just a shakedown. Whether whatever Robinhood did right or wrong, these made up numbers in fintech and fines by the SEC is just a tax that the banks and the fintechs are still playing from 2008 and it's not going to stop. And the, and tech got so big that you can't even fucking tax them. And so the other thing is look for Snapchat to get bought once, once this deal goes down, look for Snapchat to get bought. He's got no way out, Evan. It's fun to be his own king, but the Sherlock that stock will keep going down once TikTok gets sold. Snapchat is a goner if it, if, if the way I see it, because the FTC is going to say just sell. Like in the, the old FTC would say you're not allowed to be bought by Facebook. In a world where TikTok gets bought by Elon and Trump and whatever. Snap is a fucking 20 billion. I don't know what the premium can be because I don't know how it's worth 20 billion. But that's gone. Evan, you had your chance to be a public company, you're gone. So there is a lot of cleanup that's going to happen as the upside of these companies are doing nothing for shareholders for years and years and years. And this is why kids have moved on to meme coin. Like even though they love Snapchat, the businesses and run well enough so you might as well own a non fundamental thing like tokens. So it's, it's really, we have to say that AI, politics and money are just creating so much change right now. It's just fascinating. So you know, those are the trends that we want to talk about with friends. And as much as I hate politics, luckily Silicon Valley makes it a little more fun to talk about politics because they seem a little more human than bankers even though they're flawed. Bankers just had self, you know. Yes, the overlords have self interest in mind but tech is actually creating shit like as Josh talks about with you know, visual Tesla versus Waymo, we're moving things forward versus just financing things. And so this is like a really more interesting era for people that really want to kind of do. Go ahead Bill.

[Phil]

Josh, last word.

[Howard]

Last word, Josh.

[Josh Moore]

Oh, this has been really fun. You asked what I would hire for if I hire for anything, you know, it's never been a better time to be a marketer and I could really use one a little bit because I was one kind of back in the day and I really quite enjoy the engineering and technical side of things. And we've had some good luck on Facebook ads. But I could use someone a little more clever.

[Howard]

It's the most important job in the world.

[Michael Perek]

As a guy who loves note taking apps forever and what you're doing, I love it. I'm a big user of transcription products and yours is great. What's the next big feature? If you wanted to scale it to the next level, what's the next thing you would like to add?

[Josh Moore]

So it originally started as just in person audio, but I have a feedback request form and the users upvoted things like zoom meetings, which is sort of obvious. But now we support that. You can also make phone calls in the app, so you can literally like dial out. It calls, you know, as you and records it. I think the next thing that I'm working on now, there is now a chat with an individual session. So at the end of a recording, you record for an hour. It gives you a summary and also a dozen suggestions of like chats. Like what were some of the things that Howard said during the call? And you tap that and it feeds that out. Each chat only knows the information about one meeting. But what's coming next is a chat that knows the information about every meeting you've ever had. And so it's like I met with Howard all these different times. Can you compare how his opinions have shifted over the year? And it does like a search for all the house quotes. And so to be a little sticky because right now retention is fine, but it could always be better. And so that's what I'm working on currently.

[Howard]

So. So think about what Josh said. Sorry to get the last word here. And Phil, you can have the last word, but we went from a banking phase leverage for financial leverage phase to a tech leverage phase. And now we go to a marketing leverage phase. Right, like where the smart people that can build lean businesses. No one wanted to hire a marketing person because everybody thought they could code their way out of growth for the last 15 years in a world of scarce capital for small companies, in a world where small. And it's tough for small companies because a marketing hire is very esoteric. But Josh is dead right. His next grade hire will be a killer. And it may be a kid out of school. It may be a senior person who's 60 who got put out to pastor and now wants to come back to work, they're going to have to have jujitsu. They're going to have to have personal skills. They're going to be able to use social media. Not just social media to go wide, but social media that actually has influence and engagement. And so it's a greatest time to be a jiu jitsu marketer. And for young people out there, learn how to network with intent. In this era, you can't just say, I have 100,000 followers. You got to say, how, how do I can I make people move? And so if you're young and thinking about college and thinking about what you're going to do, your life, invest in marketing. All right, Phil. Right on. I'm tired.

[Josh Moore]

Yeah.

[Phil]

So we're just going to continue with last words for the next 167 hours until next week's program starts, and then we'll do it all over, over again.

[Howard]

All right.

[Phil]

Adios, guys.

[Michael Perek]

Great to see everybody.

[Josh Moore]

Thanks, guys. Much appreciate it.

[Howard]

See you.