Dow Hits 50K, AI Agents (OpenClaw) & Investing in Texas

19:26Bryan Chambers:Thanks for having me.

19:27Austin Hankwitz:Definitely. Well, let's jump right in. You've been building Capital Factory for over a decade now. For listeners who may know the name but not the full story, how do you describe what Capital Factory actually is today?

19:38Bryan Chambers:It's something I have to explain a lot because, you know, Capital Factory is, we do a lot of different things and we've grown a lot over the years. Today, Capital Factory is really a totally unique community full of investors and founders working to build the next generation of crazy, amazing companies. And it's full of that. And that's really what it is. If you zoom out just a little bit, we do three different things at Capital Factory. We have a venture arm and a number of different funds. We invest into startups and we do everything we can within our power to just help them succeed. And that's our venture arm.

20:14Bryan Chambers:We have a government and corporate innovation arm where we advise and work with and consult two dozen Fortune 500 or government agencies. And that's all about getting a lens at the tip of the spear of what's happening at the seed stage, series A stages of technology and innovation. And then, of course, Austin, I know you've been to Capital Factory before. We've got a killer space in the middle of downtown Austin. then it's turned into a venue where the most important people in tech, whether they're starting companies already running large enterprises or VCs, are coming in every single day engaging the community.

20:52Bryan Chambers:So ventures, government, and corporate innovation events and venue, and we throw some really good ones.

20:57Robert Croak:I think you definitely throw some very awesome events. Shout out to you guys for allowing me to bop around at South By in 2025 last year. Capital Factory. You guys crushed it, had a blast, and are excited to partner here with the Rich Habits Retreat in 2026 for another event with you guys. So here's my perspective, though. Texas used to be seen as this flyover country for venture capital. That has clearly changed. So what do most people outside of the startup world misunderstand about why Texas has become such a powerful place to build companies?

21:30Bryan Chambers:Yeah, well, and I think it's slowly changing. A lot of people don't know that prior to me joining Capital Factory in 2017, I had a startup. Capital Factory was an investor in it. We got to sell that company and make some money for the investors. And that's when Josh, my partner, really looked at me and said, Brian, please join Capital Factory and let's go scale under this vision and this mission. We called it initially the Texas Startup Manifesto. I still think it's something a lot of people misunderstand today. Texas is a unique state and it operates a little bit differently than most other states.

22:03Bryan Chambers:We have very large cities and, you know, five of the top 11 are all in Texas, but they're a little bit apart. All of them do different things. You know, everybody was already making, putting those cities on lists in 2016. In 2017, Texas was the fastest growing state. But at the time, I think it was the 10th largest GDP in the country, but Texas got less than 2 % of national venture. And we looked at Texas and we said, if we can organize this better, Texas should really, we believe that there was asymmetry in the market and that Texas was going to disproportionately grow. You know, that was our really big bet.

22:40Bryan Chambers:And in 2016 and in 2017, that sounded really crazy to a lot of people. People were not, they were looking over Texas and it wasn't the place to come. And I think there's a couple of trends that are all converging. That was, you know, that was one and that was the start of something very meaningful. We restructured Capital Factory, scaled across the state, really connecting, you know, this megalopolis in Texas. We like to compete internally because of sports teams across our cities. But, you know, Texans really unite when we step across the border and, you know, people, you know, people kind of erase the boundaries.

23:13Bryan Chambers:And that was our vision, was to drive the collaboration between Austin, Houston, Dallas, you know, this mega region and kind of help the whole state. And so, you know, we did that. I think COVID really benefited Texas greatly. Maybe Texas grew, you know, at scale disproportionately the most. But a couple of other like trends happened around that same time that I'd have to point back to one under Trump one. I mean, he created a whole set of strategic priorities with government and defense and national security funding that launched under the under the first Trump era. Army Futures Command was created.

23:48Bryan Chambers:Space Force was created. You know, the Army chose to move to Austin. They chose to lean into Capital Factory. Capital Factory leaned back. This was 2018, 2019 timeframe. That was still pretty early for hardware and national security and defense. And, you know, now defense is surging. Texas has always built big, hard things. You know, Texas did not thrive in the internet, social, mobile, consumer era, the way that, you know, other pockets of venture did across the country. It's energy and energy infrastructure. It was semiconductors. Telecom back in the day was hardware. It's transportation and logistics.

24:21Bryan Chambers:And now we're back to these cycles again and where Texas really gets to flex some of its superpowers. We have a lot of land. We have government regulations that allow things like hot fire tests for, you know, innovative hypersonics or propulsion systems. And it's really hard to do those things in California or New York. And so Texas is kind of wide open with these new types of hardware companies that are really coming. And I think, you know, the other part of that is Texas really gets more money in these categories for infrastructure, national security and defense. Those budgets are up and to the right and more of it is going to come.

24:59Bryan Chambers:So Texas is going to continue to grow and, you know, eat into that pie. I think Austin alone is now over 5 % of the entire market, one of the top hardware markets in the entire country. You know, I think we recognize the momentum of Texas. What we didn't really know was how impactful the Army, the Air Force, DIU, DARPA, working with, you know, government agencies, federal agencies, how much that was really going to impact us. And so, you know, that was both lucky, but perhaps serendipitous for us.

25:27Robert Croak:I guess just like a really quick follow up. I mean, you talk about infrastructure, you're talking about hardware. I didn't think about that till right now. You're totally right. I mean, it's really hard to fly hypersonic in the state of New York or the state of California, right, which makes a lot of sense. They build software over there. They've got their fintechs. Like it's a very different space. Then you think about companies like Sironic that are in Austin, Texas, who are building really cool, like hardware, physical things. It makes a lot of sense. So is maybe hardware and infrastructure, you mentioned you're bullish on it, but like, you know, let's fast forward a couple of years, not to put you on the spot here, but I mean, is it something that you really think is going to continue to grow and thrive, not just in the state of Texas, but as like a secular growth trend?

26:07Bryan Chambers:Yeah, I think we're going to watch it grow for two or three venture cycles. This is a two-decade-long transition away from internet, social, mobile, consumer, especially deep in COVID. And I don't know about anyone else, but I am not trying to download more apps. I am not trying to sign up for more subscriptions. The sentiment in the markets have really changed. Everything's been appified and sassified, and that doesn't mean there won't be great software companies to come. But everything, through the transition of LLMs, I mean, everything has really changed. That company I mentioned that Josh and Capital Factory invested in back in the day, it's not a venture-backable company anymore because of the dynamics of how people write code, build and deploy apps.

26:50Bryan Chambers:You don't need what we needed back then. And so it's really changing the dynamics about where kind of outsized returns will come from, where are the really hard technical moats that exist. And hardware physics is really, really hard when we get into building, deploying large-scale infrastructure. I think it's going to continue. I think this is what, you know, where we see, you know, extraordinary value is going to be unlocked for humanity. It's the brain computer interfaces. It's high speed travel. These are such hard problems. They are different problems. So, you know, LLMs and, you know, the Gen AI movement have contributed to it greatly.

27:29Bryan Chambers:But I think what's happening now, and of course, we see it with Aptronic and Saronic is a great example, but AI meets the physical world. And this is a massive transformation creating lots of new opportunities across hardware. And so it's when AI meet the physical form of a humanoid robot, the potential for those things are now capable to be realized. It's ready for commercialization. And I think this is going to continue through nuclear, lunar landers, moon bases, big rockets, hypersonics, energy. It's a pretty exciting time. It's going to continue. It's definitely exciting. And to what your T-shirt says, the robots are coming.

28:08Bryan Chambers:The robots are indeed coming, yeah.

28:10Austin Hankwitz:Yeah, I want to click back in time a little bit. We've heard you talk about COVID a couple times now. And let's go back in time a little bit because venture capital really went euphoric in that 2021 years to very selective over the last few years. And from your seat, what has actually changed and what lessons should founders and more importantly for our audience investors take from that market cycle shift?

28:36Bryan Chambers:I'll, I'll, you know, there was a specific point in time. I was at Josh's house in Austin. We're sitting on the porch. Jim Breyer was with us. Tim Draper was with us. I think we, I think it was four-star general Mike Murray at the time was with us. A couple of us were out, you know, having, having dinner on the, on Josh's patio. And, um, and I remember Tim asked the question, so when are y 'all coming back to Silicon Valley? We used to do these roadshows where we'd organize all our startups, we've taken them to the Bay Area. And we looked at each other and we just said, why would we do that? And it was kind of the aha moment for all of us going, I think this is different.

29:13Bryan Chambers:I think it's really changed. More is kind of coming inbound. COVID was kind of the, it created these trends. And sometimes I like to say, Texas really went national with what it has to offer to this next generation of startups and corporations. And so now, of course, people are coming, it's inbound from every state, every country, tapping into the government opportunities and tapping into venture. And so I'll never forget that moment. And that was, you know, that was a moment in time. I think we recognized, you know, the markets had changed enough, you know, and we're continuing in Texas's favor.

29:46Bryan Chambers:So, you know, through that, I think, you know, back to the market shifts, LLMs, you know, new, these new tool sets allow anybody to build and deploy apps. As a result, everyone's doing it, right? And the resources required. So, I mean, you're just seeing a change in what used to be a venture-backed asset no longer requires these resources. And so it's just, you know, it's a really big change, you know, focused on kind of the scientific markets where deep scientific breakthroughs and tough commercialization really comes in is, you know, it's a pretty big transformation. So we're going through it right now.

30:20Bryan Chambers:You know, I'm sure there will be really great fintech companies and really great apps that come out, but there's just a flood of them. And it's hard at the end of the day to find transformative value opposed to incremental value. And real outsized returns come from transformational value for sure.

30:38Robert Croak:It's really interesting to think about. You're totally right. Because if we rewind, I mean, Robinhood's the best example ever, right? It's this company that needed to go raise a ton of money from venture capital firms. They needed to get a bunch of marketing dollars spent they need to go do all this stuff uh and they did that very well then they ipo'd at some like 80 billion dollar valuation and i don't know what this market cap is today but like if you that's like a great example of like you know before ai existed we went and hired a bunch of engineers we built this great app it was all software people loved it it was disruptive transformative a bunch of investors made a lot of money like cool and to your point now with the rise of ai and these agents and everything that is like so interesting with this new tech, you don't, to your point, need to go raise hundreds of millions to go hire a bunch of engineers.

31:25Robert Croak:We're seeing people, you know, use these agents and you got 15 agents that are building this app for you behind the scenes or whatever's going on now. And then you've got agents that do your marketing. And so the real lesson, it seems like, is like moving away from what is really defined as a venture investable asset, like what actually needs venture money and what doesn't. And it seems like to your point, you're really focused on the hardware because is that's not software, that's agents, right? You actually need venture money to go, you know, build these things physically and then deploy them and test them and the hypersonics and the rockets.

31:58Robert Croak:Like that is such a great takeaway. I never thought about that, but it's really cool that that's how you guys are now approaching your venture investing in this new market cycle. That's beautiful.

32:06Bryan Chambers:Yeah, and we were lucky enough because of the army that we did it early, right? And we didn't know all of, you know, the trends were going to converge the way that they are. And, you know, that set us up for a lot of success. We've got a pretty awesome portfolio. So, you know, they're growing and that's always very helpful and more is coming faster. And, you know, Texas is, you know, Texas is doing well.

32:26Robert Croak:So last question here for you, Brian, what separates founders who compound success over time from those who burn out or stall out or just, they don't make it right. What's the separation there for someone who's listening, that's excited to make an awesome angel investment, right. They're accredited. They're like, listen, I'm ready to rock and roll. How do they find the separation?

32:46Bryan Chambers:Yeah, you know, this is the million dollar question. But, you know, there's a couple of obvious answers. Repeat founders, they rock. Once you build a great company and maybe you sell it for$100 or$250 million, you don't do that again. It really shifts your perspective to think a lot bigger, to go for much bigger outcomes. Repeat founders kind of, you know, end up with that DNA and that perspective. And I think that's really helpful. Of course, you know, people that can sell a vision. This is a big part of fundraising. It's an important skill because great companies have to fundraise constantly all the time.

33:20Bryan Chambers:And so, you know, people that have the ability to transfer the enthusiasm of what it is they're working on, that comes in a vision, right, that inspires people, people that can do that well, you know, because they have to constantly do it. They have to build, you know, you have to build believers. They have to build a following. I think that's a gift. Not everybody does that well. It's a required skill, you know, on this journey. So, you know, it's always a nice skill, I think, that we look for. These are, you know, a little bit prerequisites. But, you know, it's that when it's combined with somebody's life work or their mission in life, I think these things kind of set themselves apart.

33:58Bryan Chambers:somebody's been working on a hard problem for decades of their career and you know now the market creates this opportunity to commercialize that business or launch that business you know it's their life right it's their life's work you know this because comes from a deep deep deep obsession and i think if you can find that and you can find those kind of outliers those people that work on such hard problems with such intensity for a long time because that you know they are they're deeply intersected or passionate or knowledgeable of the sector, that sets a company up for some really nice success.

34:32Bryan Chambers:And of course, you know, one of my favorite questions is always to ask founders, like, or it really is to identify if they don't make it obvious, but like, what are their real unfair competitive advantages? Like every great startup has a lot of unfair competitive advantages. Sometimes they're obvious, sometimes they're not, but I think that really will set a company, you know, differentiate a company and help set them up for success. You know, beyond that, you know, the burnout is real. Like when people, when founders take on these journeys, I mean, they are among the most difficult and the most grueling periods of life they'll ever go through.

35:04Bryan Chambers:The highs are high, the lows are even lower. And what allows and motivates a person to stay at it with that grit? Founders that win early, founders that can find success or success is contagious, Momentum is contagious. When it's working, you're full of inspiration and you're waking up and you're wanting to put in 15, 16, 18 hour days. And that's an outcome that I noticed that is connected to success. When founders can get that early momentum and rally their employee bases, their investors creates a contagious momentum that can turn into an unstoppable company. And so I think that's, you know, one thing is like, how do we get the early wins and build that momentum?

35:51Bryan Chambers:And that momentum, it really fuels a lot of inspiration enough that it can take people past some of those really, really tough times because they exist.

35:59Robert Croak:Certainly do exist. And, you know, you were alluding to people making it their life mission. They've been working on something for much longer than everyone else. And then finally, the market begins to play in their favor. I mean, Aptronic, in my opinion, is the best example that started in 2016. They've been working on these humanoid. What does a robot get out of your robot stuff? I don't care about that. Who cared about robots in 2018 or 2020? Nobody else.

36:22Bryan Chambers:And, you know, was. And that's right. I mean, like, look, you know, high conviction, but founders have to look far into the future and they have to know something about the future. They have to have to sit on a truth about the future that nobody else knows. And you have to, you know, have to one, do you align with that truth? And, you know, if there's a possibility, it changes everything. If that market becomes a market, right? Another sometimes a fun exercise, you know, my team and I will recognize we get on lots of pitches. We see so many deals. Sometimes when founders have a difficulty explaining what it is they're working on and what they're doing, it's not a negative outcome.

37:01Bryan Chambers:It's because the words don't exist. It's because the market doesn't exist. And it's the first time people are making up words and adjectives and it's biological compute and whatever it may be. Nobody knows what that is. Right. And so it's you know, these are brand new sectors and people are having to come up with words and phrases to try to describe what it is they're doing. That's a positive example of like going through the, you know, the confusion process of learning and understanding everything is new words and phrases and totally new radical approaches to things, you know, opposed to what sometimes it's, you know, falling into the comparison trap or kind of falling into something that's of incremental value.

37:39Bryan Chambers:the uber of right i mean this is just a comparison these are frequently buzz you know when buzzwords and comparisons are used you know it's kind of a signal of incremental value opposed to

37:50Robert Croak:transformation that reminds me of uh that meme right oh yeah man i got a startup oh cool what is it i'm building a tinder for dogs yeah okay man cool have fun right like yeah i love this

38:03Austin Hankwitz:conversation as being someone who's been both the founder and the investor for decades now Now, you know, it's always, I love that you touched on having obsession because so many of these founders, I remember Tony Hsieh and I invested in a guy, in an idea, and it was an app and it was in a great sector. And two different times I went to the office and one time he was riding his bike right after we had all the funding. And the other time the founder was gone and they said, oh, he was walking his dog. And I just waited for three hours and he didn't come back. And it was just like, it really made me realize that was going to be a dead investment because he just wasn't obsessed with the work.

38:43Austin Hankwitz:And so I really, really love that you touched that. And I could spend hours talking on just this, but we really appreciate it. So for everyone listening, if you're interested in startups, venture capital, or understanding how innovation actually gets funded before it shows up in public markets, Capital Factory is one of the most important names to follow. Hello, Brian, thank you so much for joining us on the Rich Habits Podcast. These episodes are so important for our audience, and we're so happy that you stopped by.

39:12Bryan Chambers:It's great to be here, y 'all. Look forward to seeing you in Texas soon.

39:15Robert Croak:Thanks, Brian. Man, shout out to Brian Chambers. What a guy. Shout out Capital Factory. We're so grateful to be partnering with them, and just love it when such innovative people join us on the show and can talk about things that I don't even think about. It's just, it's awesome. Well, speaking of things, though, that I do think about, Robert, we've got our segment of the show here to wrap things up. Our call-outs, our Rich Habits Radar call-outs. I've got three. You've got three. My first one is that McDonald's value menu is actually now working. It's working pretty well. The CEO of McDonald's said earlier this week that their effort to reduce prices through their value menu is what has caused their same-store sales to surge by mid-single digits year over year.

39:59Robert Croak:The company plans to invest in new menu items later in 2026. They're testing new burgers and beverages, and they expect to introduce a new line of, get this one, Robert, energy drinks. Energy drinks. How cool. So apparently they're collaborating with Red Bull. Stay tuned on that. Who knows? I don't drink Red Bull. I don't eat McDonald's. But for those of you that do, maybe you're into that stuff. Get excited. Next one is Uber rolling out their robo-taxis in downtown Abu Dhabi. So WeRide and Uber have officially launched their first commercial robotaxi service in downtown Abu Dhabi, marking the Emirates' first deployment of autonomous vehicles in its central area.

40:40Robert Croak:With this expansion, the WeRide Uber Robotaxi Service collaboration now covers about 70 % of Abu Dhabi's main areas, and the fleet has quadrupled in size since their operations began in December of 2024. Uber is certainly not asleep at the wheel. See what I did there? When it comes to the rise of robo taxis, good for them. I'm an Uber shareholder and I'm glad they're letting robo taxis propel their business higher. So my last point that I want to call out here, and I alluded to it earlier in the episode, 20 % of new car buyers have a monthly payment of$1 ,000 or more. This is according to new data from January, thanks to Edmunds.

41:22Robert Croak:You heard that right. 20 % of new car buyers committed to monthly payments of$1 ,000 or more on an average of 84 months. That is seven years of$1 ,000 a month of payments. That is unbelievable. The average amount financed also hit an all-time high of just under$44 ,000 for these new cars. These car payments are the biggest wealth destroyers in America. So if you are listening right now to this show and you are not yet filthy rich, please do not go out and finance a brand new car at$1 ,000 a month. That money can be used to build wealth and do much smarter things than putting it into a depreciating asset.

42:01Austin Hankwitz:Yeah, it really speaks volumes to how much people are gambling and we wish they were investing more. But also, I love your McDonald's call out because I read something that they're considering adding more protein to their markets to combat all of the GLP-1 usage because they said that people are eating less calories and more protein. So interesting kind of addition to your call out on McDonald's. So my three call-outs today, let's start first with mortgage rates dipped down to near three-year lows. Mortgage rates dipped slightly lower this week, weathering volatility in the bond markets, while bond yields sagged early in the week.

42:38Austin Hankwitz:Wednesday's surprising job report sent yields soaring. The news was digested quickly by the Treasury market, and a recovery to previously low levels took only a day to happen. And according to Freddie Mac, the average 30-year fixed rate this week was 6.09%, down from 6.11 % the previous week. And the 52-week low is 6.06%. Meanwhile, the 15-year fixed averaged 5.44%. My second radar call-out today is American households are piling up debt at historic levels. At the end of 2025, U.S. households ran up more debt than ever before, about$19 trillion with a T in the fourth quarter alone. This includes a miscellaneous random amounts for credit card debt, mortgage, student loans, auto loans, and lines of credit.

43:32Austin Hankwitz:So to put that number in perspective, that's up roughly$191 billion from Q3. So what happened? Well, the Federal Reserve Bank of New York released its quarterly household debt and credit report, and the numbers are definitely big and bleak. Mortgage debt rose by$98 billion to$13.17 trillion. Credit card balances, and this one is wild to me, increased by$44 billion, reaching$1.8 trillion in the markets in that quarter. and about 4.8 % of all household debt was delinquent, the highest overall delinquency rate in nearly a decade. And my third call out today is credit unions enter the stablecoin market because while the U.S.

44:19Austin Hankwitz:cryptocurrency market structure remains paralyzed by this congressional infighting, the National Credit Union Administration has opted to act regardless and get in the stablecoin game. On February 12th, the agency issued a proposed rule to license and regulate payment stablecoin issuers that operate as subsidiaries of federally insured credit unions. And this is massive for the stablecoin market because over 4 ,500 institutions holding over$2.4 trillion in assets operate within those credit unions that I'm talking about here. So a good step in the right direction while we sit here and wait to get this congressional approval of these crypto bills that have just been getting bounced around back and forth for months.

45:06Robert Croak:Yeah, Robert, fingers crossed that these mortgage rates continue to trend lower. I, as you know, I'm trying to build a house this year. So lower mortgage rates are always a good thing in my view. Everybody, thank you so much for joining us on this week's episode of The Rich Habits Radar. If you learn something, please consider sharing this episode with a friend, leaving us a five-star review on Spotify, voting in the poll below on Spotify, and leaving us a comment. We always get back to your comments here on Spotify, and we're super, super grateful. And of course, stay tuned about the Rich Habits Retreat taking place in Austin, Texas later this year.

45:42Robert Croak:If you wanted a little inside scoop or be invited, I guess, before we even mention on the show, be sure to join the Rich Habits Network where our biggest fans hang out. They're going to get first priority access to joining us in person for this retreat. Thanks, everyone. And we'll see you on Monday.

46:40Bryan Chambers:We'll see you next time. So put that fork down. Try the new wraps today in app or at order.sweetgreen.com. Available at participating locations only.