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0:04Today on Great Chat, we talk about the biggest IPO in history, the wealth to follow, and what people from prior liquidity events in our industry have learned about money, identity, identity, identity, and happiness.

0:30Try it for yourself. Visit mercury.com to learn more and apply online in minutes. Hello. Nice background flex, Helen. Thank you. Sorry about the lawnmower and the chickens. It's kind of morning-ish here. Those are our guest hosts for this podcast. Oh, that one was really close. There they go. Wow. That's all timed. They know. They know how to jump into a group chat. I'm impressed. Yes. So things that have happened this week, or I guess Friday. What hasn't happened? I know. This was a lot. It was a very eventful weekend. But we have our first trillionaire. So exciting. What should we call him? It's funny.

1:15It's such a novelty. And now I'm like, okay, well, who's going to be the next? Because usually, whether it's in sports and someone breaking a record, like the four-minute mile, or if I remember the first trillion dollar market cap company was not that long ago, but then it suddenly like things tip and suddenly where there were zero, there are now three. So maybe trillionaires are going to become more commonplace soon and no one will benefit more than the poor persecuted billionaires because we can all turn our rage and attention to the next tier of wealth. So scrap the billionaire tax, California, focus on the trillionaires, keep your eye on the prize.

1:58I know we're joking here, but I feel like the next wealthiest person behind Elon Musk is like... Far back. Yeah. Yeah, yeah, yeah. I mean, if they put everything like on black and it's possible. Yeah. I think Ryan Peterson from Flexport was commenting on, I think there was like a big swing in the SpaceX stock yesterday, the first full day of trading. It was like 20 % at one point. I don't know where it ended. And he said that with that like 20 % pop, Elon made more money in one day than Warren Buffett made in his entire career. Oh, I saw that. You know, I refuse to find that amusing because I already was just sort of going on like a old man shaking his fist at the sky like rant last week about like, I think that we are in this strange period where people are really, really short term thinking.

2:58I think one of the things that has made venture and startups different than any other asset class is just like the long term thinking. And we've talked about this before about being mission-driven and it being a very long journey to get there. And obviously having very long periods of companies staying private before they are ready for the public markets. And now it's just this focus on how do you do what Anthropic did in just a couple of years. Everything is like this... I don't want to reduce it to get-rich-quick scheme, But I think when there was that kind of like comparing Warren Buffett, who's like, you know, this oracle of investing and very, very, very long term.

3:47Yeah, like sort of the poster boy of long term. Exactly. I worry. Not that Elon Musk is, you know, associating him with like quick pump and dump schemes at all. I'm just saying like, I don't love that comparison because we just have different heroes now, I guess is what I'm saying. It reminds me of the sort of crypto NFT era where like everything was, you know, oh, buy a bored ape and then it's worth a million. And like this is how – and I'm like, oh my gosh, like for younger people growing up in this era who see that this is the path to wealth, like what does that incentivize? I did have one funny thought.

4:26Do you remember when Michael Bloomberg was running for president? It came out that he had spent half a billion dollars on ads. And I think it was Brian Williams that saw this tweet and then talked about it on air without fact-checking it. And it was something like, with the amount that Michael Bloomberg has spent on ads, he gives every American a million dollars and still have money left over. which like obviously that math does not check out. It became like a meme. So I did the calculation for Elon. And Elon, if his net worth were liquid, which, you know, it is very much not, he could give every American over$3 ,000.

5:11So just think about that. Totally. Well, it's been exciting to watch the SpaceX stock do its thing. I feel like people had so many hot takes on what would happen and it's climbing. I know. but I feel like if Angela were here, she would remind us that it's like a 5 % float. I saw a chart today. So little of the stock is actually in circulating. I can just create a feeling of false demand and scarcity. This is one that has an interesting unlock schedule. It's not your typical, everyone's locked up for six months. I think we'll have more data soon, But I think it's like too early to say what the midterm price of the stock is.

6:01And there's actually one company that matters for quite a bit, which is Cursor. We're recording this on Tuesday. And it was just announced this morning that SpaceX is, in fact, acquiring Cursor for$60 billion all stock. And so there's lots of commentary about Elon Musk's brilliant financial engineering and how the success of this IPO has made that purchase so much more palatable. Yeah. I mean, I think we talked about this in an earlier pod when that was first announced in April, and it was$60 billion in cash by the end of the year. And one reason for that was if they were to do it before the IPO, they would also have to underwrite cursor.

6:48And I would just delay things. It's already a turducken. We'll stay in your head. Exactly. And so this was a surprise. And then I think with the other change, the timeline is a change. And then the other is that it was cash before and now it's all stock. And the way these acquisitions work is the price is locked. So that even if the stock price changes, it doesn't matter. It's like you get delivered of how much stock equates to the cash equivalent on the day of the transfer, the day that things get finalized, which sounds like it's going to happen sometime in Q3. And so I'm just like, well, I wonder what the stock looks like whenever that happens.

7:30Also, it's like, it makes me wonder, does Elon think the stock is going to go down? And so now is the time to lock in this price. Because otherwise, wouldn't you just do it with cash? Although, you know,$60 billion is a lot of money. It's a lot of money. Not for them, arguably. But I'm sure a lot of it's locked up. Yeah, I mean, I guess the worst case scenario would be if SpaceX stock was in a free fall, right? So even if that day that it converts, it is the cash equivalent, but then it starts rapidly falling from that point on. That'd be really bad. But hopefully, it doesn't do that. Yeah. I hope for all the Cursor employees and people on their cap table.

8:15I think Cursor is the largest private company. Acquisition of all time. We just keep breaking records and I'm almost bored by it. I'm like, yeah, we have our first trillionaire. We have our first trillion dollar market cap IPO. So we have our largest... I mean, I'm not bored by it, but I also just... When there are so many things clustered, it just doesn't hit the same. If you just took one of these things in isolation and they weren't also surrounded by... It feels like a record, a new record is made every week or every day. And so we're just... It makes the intercom sale to Salesforce that also happened yesterday, I guess, seem paltry in comparison.

9:01And it was$3.6 billion. Salesforce is acquiring Intercom that rebranded itself to FIN as a fully agentic solution. And I think people are saying, or they're attributing it to like Owen going founder mode and then completely changing their product and business model to meet the moment. And it being like a playbook for like, you know, Web 2.0 companies or like prior era SaaS companies. SaaS companies, totally. It's a apocalypse. They're a survivor. I don't know if it's so much of a playbook, but I do agree that the ethos of everything is changing around you, it would be insane for you to not make dramatic changes or meet the moment.

9:45And so I think that is a great story. In some ways, it's more exciting to me than the cursor acquisition actually happening, just because there's a lot of good drama. So I know the Intercom team because Social Capital had led the Series A before I joined, but they were a hot company in like 2015, 2016, and then kind of disappeared a little bit from like the, not from a product standpoint, but they weren't a darling. Owen left the company. He was the founder and CEO. I believe there are four founders, so an abundance of founders, and then came back like two or three years ago to revitalize Intercom.

10:32And I saw an exchange where someone was like, oh, this is such a great turnaround story. Intercom was probably valued at around a billion when Owen came back. And now you have this like sub 4 billion exit. And Owen was like, actually, it was 200 million. So just like a lot of value created in a short period of time. And they really did lean in hard after the generative AI boom. Like Intercom was one of the early existing leaders, not an AI native company, but like an existing SaaS player that just like moved really fast. And then the other thing that makes this fun, because we love a good story, is Brett Taylor was supposed to be Benioff's like heir apparent and became the co-CEO and was being groomed to take over that role.

11:25And then, of course, he ultimately left and co-founded Sierra, which is in the same space as Finn is, sort of agentic customer support. And so now, I guess, Benioff couldn't or wouldn't acquire Sierra. Sierra's probably far more expensive at this point, but he did acquire probably the most worthy competitor. And so that's kind of fun, too. Not that I think he's going to make one of the Intercom founders his successor, but maybe there's a little bit of drama there as well. Well, I mean, even if it's at minimum, like what Slack did for Salesforce, which I thought was good. Good for Salesforce, not good for Slack.

12:07But yeah. I think that is what's going to happen here as well. I don't know. Like I thought Intercom was a very hot company around the same era that you did. And because I've always been on the marketing side, like I've been at three companies where we implemented Intercom, right? So it's like, it's a big deal to have chat. And that is just such a natural thing or the first area, frankly, that I think agents have taken over. So it all seems like it makes sense. You know, there are no surprises here. What was funny was when the Intercom acquisition was announced, I think in that same time frame, the Roku acquisition.

12:48Oh, yeah. Took us all by surprise. For$22 billion by Fox, right? And so one, it was a reminder for me, just God, how large media is. Media is huge. And Sally gets the last laugh. But also, I don't know. There are some things where I'm just like, this is why I'm not a great consumer investor. but it's like, I don't understand a whoop, like a little wrist thing. I'm like, it's an Oura Ring or it's an Apple Watch. Like, why is there this cult of whoop? And they are so successful and they're continuing to grow. I don't get it. And then Roku is my other one where I'm like, I just truly, I don't understand what this thing does.

13:33I mean, I - I'm a Roku customer and I don't really know what - I've seen an Airbnb. I've used Roku. My parents might have one, but 22 billion okay from an advertising standpoint I get that you can do very granular advertisements right because you know exactly he's on the other side of that I'm gonna I'm gonna start looking at my Roku differently I'm with more respect after this acquisition so Anthropic the ball from grace for our AI lab darling yes honestly I don't even know if I could do like the play-by-play for what has happened over the past, like, I feel like getting steam on like Friday and then over the weekend.

14:20And even if you don't have the exact play-by-play, which involves like the US government and, you know, now maybe like coming up at Amazon, one of their largest clients, like might have snitched on them for violating their own policies or terms. But I think that the best framing for this, at least the one that has been helpful for me is like when you make your brand the I'm the good guy or we're the good guys that is such a hard thing to uphold I think when um Google's thing what was it like do no harm no don't be evil Helen come on don't be evil don't be evil I forgot don't be evil they had this like don't be evil no that's what I tell my dog all the time like that's her mantra they got rid of it yeah Yeah, yeah.

15:05Well, it's inconvenient. It's impossible. Yeah. And like, I think when Anthropic has positioned themselves as like, we're the good guys. We're going to be responsible for ethical AI, right? Nobody else can be trusted but us. Like, now you are making the standards different for you. In the short term, it might attract people who are called to that mission. And that is a good position to be in. You don't want to go work for the bad guys, right? But in the longer term, it's really hard historically to just continue to uphold that bar, especially as you are focusing on commercialization as they are.

15:42And, you know, starting to get into some really complex things with the government and policy and, you know, frankly, all the things that like are involved with going public. Like, this just feels like a trap of their own making and some hubris. But I am surprised that, because I think there are skilled comms people over at Athropic, that there hasn't been, like, a reigning in or, like, it's sort of, like, falling off the rails and we're, like, watching it happen and there's not really, like, a correction. Yeah. I think this is one where like business was driving the narrative versus narrative driving like business decision.

16:24I think Anthropic tried to have its cake and eat it too by releasing Mythos and Fable, but with some guardrails that people did not like and felt predatory. And they have pulled back from that. But then, of course, that set off the alarm bells with the White House and I guess the drama of Amazon maybe being the one to report some safety issues. And so I think things are like – this is a company and a comms team that's very good at narrative. I think things are just happening too quickly. and there are so many stakeholders that sometimes it's kind of impossible to control the narrative. And sometimes actually the best thing to do is let the dust settle a little bit and see where things land.

17:20Because when there are so many moving pieces, sometimes the worst thing you can do is jump in too quickly and try to do damage control, let it play out a couple cycles. If I were to guess how this ends or how this particular chapter concludes, Anthropic will announce some absolutely bonkers revenue number. Yeah, everyone will be on board again. Yes. And so because they've done it every time. And so my comment about that I'm surprised they're letting it fall off, yes, maybe that is super intentional and they're just like, ah, we'll win them back when we show that we are so clearly dominating here.

18:03And right now we are in the trillionaire era where we're just rooting for the winner. And we're learning that that is the only thing that matters. And it's like deal's answer to the rippling drama was a billionaire. And it was like case closed. I think that's right. I also think that, you know, you never know what's happening behind the scenes, you know, new pieces of this story keep coming out and like the anthropic team could be nudging some of those. I also think that the, I so agree with your take of like, if you are the good guy, you're going to be held to a higher bar. I actually literally tweeted that and it was like surprisingly controversial where all the anthropic haters who've been like waiting to show their disdain are like loving this moment.

18:53And they were like, they've never been the good guys. They've always been evil. So there is that contingent. But I think another challenge, because I don't want the answer to be company shouldn't strive to be good. But I think another challenge is, and we've talked about this, like, Anthropics' definition of good does not meet the average person's definition. They have, like, a very nuanced and specific definition of what it means to be a good actor in this, like, moment and race that they're in. And that is not necessarily going to align with, like, how people feel about the ways in which they are deploying.

19:31But like, you know, their guardrails that they think are for safety to other people look like, why are you trying to prevent my business from being able to do things or stealing my idea? Like, like anthropic just has this very, like, I feel like Dario lives on a completely different plane than most people. And so the other problem is their filter for like, good and bad behavior is not necessarily going to align with the Twitter mobs. that's going to compound things. And so they're going to fall from their pedestal, even when they believe they're doing the right thing, because it's just like they are, they're living in this like super high stakes universe where their job is just to get to AGI first so that they will be good sort of custodians of it.

20:17And, and most people aren't looking at day-to-day business decisions that way. So. Yeah. I mean, but it's also a good reminder that like everything changes so fast now. Thank gosh, do we have this weekly podcast to sort of timestamp? It's going to be daily soon. I also think that OpenAI has played this well by like not trying to insert itself. Like sometimes you just let your competitor have center stage when they're having a bad moment and like you don't need to do anything. And so OpenAI has been relatively quiet, except, you know, for some shit posters who work there. In the, let's see, I guess, successful for now, SpaceX IPO, people are talking about, there's always these like feel good stories of like this janitor who worked at SpaceX for 10 years, you know, who took equity is now retiring and, you know, able to retire all of his family members and all of these really great human stories of how, you know, this tech IPO is not just an Elon Musk story, but one of all of the builders and people involved with growing the company to what it is today over a very long period of time.

21:31But there was some discussion about how many newly minted millionaires and billionaires that this IPO created. And I think this topic comes up every time there's a big IPO. This one's an extremely big IPO, so maybe more than we're used to. Julie Zhao, who did product design at Facebook very early, and I think now she's a founder, she wrote a blog post on X. And it was like, to all the people who are about to be rich, I forgot what the title of it was. But I thought it was excellent. We talked about it in the group chat, and I think it started to make the rounds. And so that brought us to some other themes or some other things that happened that were reminiscent of this.

22:22And Ashley, you reminded us of the Loom co-founder who said that after he exited the company that he was miserable. And so he ended up walking away from$60 million, I believe. He didn't fulfill the obligations of his contract to get the full payout or something. And to be clear, he had already made an extreme amount of money. But you're right. We hear these stories about ordinary people who become wealthy, people who are becoming extraordinary wealthy, but we don't really talk about what that does to people that much. I actually think Julie's post really struck a nerve, as did Vinay, the Loom Code founder, because it sort of like peeled back the curtain.

23:11If you are not part of these huge wealth creation moments, you might just imagine that it's like all sunshine and rainbows and like only good things. And I think the reality is people react very differently to like sudden and significant wealth accumulation. And they react to a lot of different levels in terms of like how they spend it, where they find purpose and identity, you know, how it makes them feel about daily life. And so I loved that Julie took the moment to address this openly because for all of the talk of money at like a company level and a fund level and a market level, we don't really talk about it at an individual level because it's kind of uncomfortable.

23:56And so it was fun to hear from someone who was part of what was once like the biggest IPO in deck. Right. I think that's true, right? Wasn't Facebook a record setter back in the day? Mm-hmm. And minted a lot of millionaires, probably fewer billionaires. Very young millionaires, yeah. It's very smart for us to have these conversations. Yeah, especially because it's been a while, right? So Facebook went public in 2012. And so it's been like enough time, like a whole tech generation to reflect back on, you know, where are they today? How are these people doing today? And I think the thing that she ended, so she cited a study about lottery winners, I think.

24:42Yeah, from the 70s. Yeah, so about what is the time period for them to basically go back to their pre-lottery winning happiness, right? And it was not very long. There were a couple of other studies that she cited, but the thing that was sort of like the chilling, the cliffhanger that she left us with was that there is this group of Facebookers that were early. I happen to know this. They call themselves NR250. It's like a little Facebook group of the first 250 employees. And there was a poll, who is happier? Or if you're thinking about your happiness today versus back then, are you happier now?

25:25Roughly the same. um, or less happy. And, uh, I think the, the thing that she left us with was that 20 % of people said that they were less happy. So it's one in five people said that they were less happy than they were before they had, uh, accumulated all this wealth. And that is something to think about. And I think, you know, for as much as we talk about the culture in Silicon Valley today being that of like, okay, I got to secure my bag and there are all these opportunities to obtain generational wealth. I don't want to be left behind in the permanent underclass, et cetera, et cetera. Like an emphasis on money and wealth that I have not seen in San Francisco in the 20 years that I've lived there as much as I am seeing it right now.

26:17It was sort of like this good stuff in your tracks on like the, okay, well, you know, what is important in life? And so it's been a while since we've had a moment like that. So I thought it was a good one. Even what wealth means varies person to person. Like some people thought that, you know, a couple hundred thousand dollars was like life-changing money and other people didn't feel wealthy until they hit a hundred million. And I think we're very much in this, in this era, like is a hundred million even in LA, if you just look at the discourse on Twitter, we're in a very different moment than when Facebook went public or, you know, I was at box during its IPO.

26:58And that was obviously a much smaller, I was, you know, boxes market cap around then was like around 2 billion or something. Right. And so there were not too many millionaires minted from that. And in fact, I remember a lot of the conversation was around how little the founders owned because there were four of them and they had raised a lot of money and they had been diluted. But it's funny because I'm like, I wonder if there's like a Goldilocks number, especially when you're young where if I had made some healthy six figures from the box IPO. So not like a crazy amount of money, but like in my mind at the time, like life changing in the sense that I could make different decisions for myself about like my career going forward and like play a longer game.

27:47No one talked about it though. Like there was no, there was no like here's, you know, here are some tools or, you know, Julie even talks about like you should get a financial advisor. It's just sort of this thing that happens. and a lot of us at that time were like kind of shocked that you know you you take I'd been a box for six years and you know when I got my offer I barely knew what equity was let alone that this was a possible totally if you didn't come from this world right like and this is where like I think that when I looked at my peers I joined Facebook in 2008 a lot of them grew up in the Valley who were at Facebook at the time.

28:28You know, a really common story was they graduated from college, they moved back home. And as they were trying to figure out, should they go to grad school? Should they do something else? They like got a job in user operations at Facebook. And it was those folks who made out like bandits, of course, but also that like, you know, their parents had been witness to this sort of event in their lifetimes and like knew how to provide them with good counsel. And I always, I'm like very open about like my story of how I joined Facebook and I like truly, you know, when you don't come from that world, you, you make mistakes in hindsight, but at the time, like, you still really have the resources to do anything different.

29:06But I remember I got my offer letter and it was like more cash than I'd ever seen ever. Cause I worked in advertising. You literally make like minimum wage. Oh, same. I was coming from a PR agency. Yeah, exactly. So you're like, oh my gosh, this is more cash than I can ever imagine. And you get so bold and you're like, I'm going to negotiate for$5 ,000 more. And I think my recruiter was like, okay, sure. Here's$5 ,000 more of your annual cash compensation. And I remember high-fiving myself and feeling like the most clever, incredible person in the world. And it's like, had I negotiated for one share?

29:47Like one share more than my package. Because the stocks did a five-to-one split and a two-for-one split in the five years that I was there. So it was serious. But you just have no idea. And frankly, that thinking has saved me sometimes, too, in my career. because I'm one of those people that just doesn't think of equity as real until it hits your share works or whatever. Yeah. And so I just don't even... It's not something you can pay rent with. It's not anything like that. But yes. Although apparently you can buy a home with Anthropic or OpenAI shares. Yes. And some very tech forward progressive banks allow you to borrow against equity of certain companies.