Daniel P. Driscoll, General Randy A. George, Gary Vaynerchuk, Harley Finkelstein, Delian Asparouhov, Will Ahmed, Adam Porter-Price, Jack Altman, David Haber, Alex at Hallow

27:59Is there more that we could be doing? If so, what? I think what you should see is by General George and I coming on your show, we want you and need you we we are inviting you in we are inviting that community to come help us one of the things that we've seen with doge aside from just the cuts and the headlines and everything um that kind of people want to write about more often what's actually really valuable about having elon and his team here is they push us to think is that a first principle problem is that a problem of gravity or is that a human created problem and taking that lens to a lot of these which you realizes I, the secretary of the army, my pen stroke can fix a lot of things.

28:40Secretary of defense, he says pen stroke can fix a lot of things. We need the right mindset. And, um, and general George and his leadership team have been waiting for us to come in and give them the top cover to do what they know is right. And so I guess to grade Silicon Valley right now, I would say we can't give a score. Um, I think a lot of the Palantir's and the Andrew rolls had to take a, a beating over a number of years just to get in. we are trying to open the door up to get more in. And what I would say is what we need from Silicon Valley and the VC world and private equity, if it's already starting to scale, we need you to look at what we need in our future wars and we need you to help us build it.

29:19And it's gotta be cheap and it's gotta be scalable and it's gotta be not exquisite in nearly every instance. And despite our tendency, what we're gonna need is we're gonna need pushback every time we put another requirement in, we need that community to say, well, wait a second, why are you doing this? like it we created this rcv so it's a robotic combat vehicle it's awesome the thing is cool as can be but it's three million dollars per copy and an 800 drone to take it out we're one of the wealthiest nations in the history of the world the math doesn't work yeah how how much uh do you feel like uh you know the the west coast and you know in general the defense tech community broadly takes feedback well.

30:01A lot of people get fixated on a single solution or an idea to a problem. And, you know, maybe they'll go, they'll, they'll head over to Washington, start talking about it and get pushback. And, and sometimes founders can get so much conviction in an idea and they think they think exactly what they're doing is right. Have you found, have you found the, the, the defense tech community to be as receptive to kind of feedback as they should be? Or are some of us a little too hardheaded still? I think if you take the most hardheaded founder you've ever met and the person who's most entrenched in their belief set, and then you compare that person to the defense industrial complex and the primes, your vision of entrenchment wouldn't even get you into the game with how these primes have thought and acted in the systems that they've created.

30:53One of the things I say very often now is I will measure it as success if in the next two years one of the primes is no longer in business and the rest of them have all gotten stronger. We desperately need the thinking from middle America, small and medium businesses, innovators in garages, venture-backed businesses and not to come into the Pentagon with us and push us on everything. Because that's where American ingenuity thrives the best. And so, again, the reason we're here is we are welcoming you in. Yeah, that's fantastic. That's fantastic. I mean, I have one last question that we'll switch over.

31:31Are you seeing enough from the parts of the financial market outside of Silicon Valley for a long time? Certain large pension funds couldn't invest in defense technology. Obviously, we are very excited about the venture-backed defense tech ecosystem, but there are transformations that should happen maybe in the public markets. Maybe even though I'm rooting for the startups here, let's make our primes great also. Are you seeing movement there? Is there the same type of energy in the public markets with the really big companies that maybe you're seeing in Silicon Valley? I would say that they will be slower followers is my guess.

32:14I think that they have typically been able to withstand these little bursts of energy that happen at the transition of an administration. Their incentive structure, I think, has been in these moments when you have General George on. Yes. We just testified yesterday at the House, and we get yelled at by whomever the congressman or woman is about whatever the parochial interest is. I think that the primes have had the tendency to double down on lobbyists. They've had the tendency to pull down the hatches and basically say we're going to weather the storm. And so what I think they're misunderstanding about this moment in time is President Trump's and Secretary Hicks' tolerance for pain to do the right thing on behalf of the American soldier, I truly believe is different and unique.

32:58and my best guess is that they will start to realize in the coming days weeks and months that they are going to have to adapt and change or die and we are not going to come bail them out again as a nation and we want them to succeed those remaining ones that can sell to the army in a couple of years they're going to be incredible because we won't buy it unless they are and so I think what it is going to take to change them is the realization that the the ways that they have delivered value to their shareholders for the last couple of decades are no longer going to work in the new security environment with the leadership of the president.

33:36Well, Secretary Disgrill, thank you so much for joining. This was a fantastic conversation. I learned a ton. Really appreciate you hopping on. This was fantastic. Come back on. Yeah. Whenever you have more news, we'd love to have you. Love to have you. I appreciate it. Hey, thank you for having us. And thank you so much. Thank you so much. And General George should be joining in just a second. I'm excited to go deeper on this topic and then hopefully carry these conversations into some of the other folks we have on the show. Michael, I don't know if you want to pull up the guest list as well while we're bringing in General George, but we can give you the rundown of the show.

34:06We have General George coming in now, and then we're going to jump over to Adam Porter-Price at Anderle. Perfect segue. And then Delian at Varda can also give some context on what's happening in defense tech on the smaller side of things. But I still think the proof is in the speed of execution to go from a tweet that I posted that was, you know, almost half joking. Hey, TBPN. Hey, Army, do you want to come on TBPN? To actually making it happen in two days is just speed of execution. And you can tell that, I mean, there are some startups that can't get a CEO on our show in two days because they're like, oh, we got to talk about what they're going to talk about.

34:49Or a solo GP that needs to schedule a month out. Like how many are you going on four vacations in a row yeah that's crazy no but but just the the mindset the focus uh the sort of urgency uh the commitment uh is amazing to see yeah totally um anyway uh let's take a second to tell you about numeral sales tax on autopilot spend less than five minutes per month on sales tax compliance um it is agi for your sales tax sales tax on autopilot numeralhq.com Go check it out. We should also build some poly markets around army transformation. I wonder if there's a market for recruitment goals. Well, anyway, we have our next guest.

35:35Thank you so much for hopping on. General George, welcome to the show. Thank you. So we were just talking about modernization. I'd love to hear a little bit more about what that means for you, what your goals are and how would you describe the overall process to our audience, which is mostly folks in Silicon Valley, venture capital and technology companies? Yeah, I think we're seeing, we're watching what's changing around the world on the modern battlefield. I think a lot of people are seeing it and reading about it. And what you get with a lot of this dual use technology is changing drones, for example, autonomous systems.

36:14What we have been doing over the last year or so is actually transforming our units. We're going to have to change how we train and operate. The big thing, and I think our secretary was just talking about that, talk about how we buy things, how we get products that we know are going to work into our soldiers' hands and doing it quickly. I think the biggest change that we're trying to do is actually getting the engineers that you guys are familiar with out inside of our formations, talking, seeing the problems that we're trying to solve and help us solve those problems directly. So we're trying to get rid of all the middlemen that we have normally have had in our process.

36:53I was reading Mike Gallagher's Wall Street Journal op-ed, Bring Warriors Back to the U.S. Military. He advocated for something he called shifting tail to tooth, talking about urging the Pentagon to redirect money and manpower from headquarters, bureaucracy to actual combat units. Is that an important shift? And what does that actually look like, empowering the warfighter to make a decision to buy something that seems like antithetical to the way we've been operating? Yeah, well, you know, we always put things in terms of, you know, we have a budget, it's our job to get the biggest value out of that.

37:29Headquarters aren't going to win, you know, it's our soldiers that are out there, you know, fighting, and we need to put every resource that we can into those. So So we're cutting higher headquarters. We're cutting geo positions. We're closing some of that down so that we can really focus. And I know our secretary and I talk a lot about getting helmets back out inside of our formations. And that's what we're really focused on. So we're cutting our headquarters here in D.C. Whatever we can do to thicken our formations, make sure that we're growing the capability that we know we need. Can you talk about how you're thinking around planning and urgency is you guys have a sort of monumental task to modernize the force and you guys are making great progress against that.

38:17But at the same time, you know, this is a multi-year project. How do you think around kind of pacing and pushing your leadership as well as, you know, the force to move as quickly as possible? Yeah, well, the biggest, you know, our soldiers have no problem moving at speed. We've shown that. You get that out there. You know, they can adopt this technology. They can do it quickly. quickly. You know, the problem we have is the closer you get to DC, that's where the challenge is. And so again, I think cutting some of that out, you know, the secretary talked about, I'm sure, about being data-centric and what we're doing, you know, to understand, you know, what's happening inside of our formations, automating our business systems.

39:03There's just a lot of things we can do. We can go fast, and there's a lot of things that we can do to adopt commercial tech out there. We're buying things that are modular, open system architecture that work with us. We have bought drones for the most recent brigade that were updated from the very first unit that we fielded some of the drones. So I think we have to buy things differently, and I think we can go faster, and that's our focus. Can you talk a little bit more about that digital backbone? I'm sure there's incredibly advanced things that you can do with artificial intelligence once data's in one kind of centralized location.

39:43But are there still systems that we're moving off of paper? And just like, can you talk about the balance of working on the latest and greatest while still, you know, tackling the nuts and bolts of just a version one of a digital transformation? So one of the things for us is we're calling it next generation command and control. and you can envision we have a bunch of these disparate systems each of them have a vehicle there are several different radios and we're collapsing all of that to your you're basically you know leaders are going to be out there with a tablet and apps so you got an application that does airspace management you got an application that can help you with lethal targeting and that's that's where we're moving towards that's on the tactical side we're doing the same the same thing on our business side.

40:32And really, we need to collapse all that together. I mean, I don't ask for, you know, the days I think of asking for information papers and asking for information are over. I mean, I have a smart board in my office. I've every, you know, I just don't do that anymore. I can go click on anything that I need to know inside the Army and have that, you know, have that data at my fingertips. And we just got to train all of our leaders. Like I said, That has to be business from top to bottom. Our soldiers have no issue. That's how they've grown up. And they are very comfortable in that space. And we got to make sure the whole process from top to bottom is operating like that.

41:09Is this modernization effort, I imagine that it will have knock-on effects in recruitment. But what are the other messages that you're sending going forward around recruitment specifically? Well, we're doing great. I think we're closing in on like 95 % of our recruiting mission. We have some of our biggest months that are coming up. You know, what I enlisted in the Army right out of high school, you know, when people come into the Army, they want to come in and do their jobs. And again, that gets to, you know, cutting out the excess and, you know, folks at headquarters and doing those things. And so we're trying to eliminate anything that doesn't allow them to completely focus on their jobs.

41:53The other thing that I consistently hear from soldiers when I'm out there is that they know we need to transform. They want to transform faster. And so I think we owe them that. And that will make a difference, too. They want to come in to a modern, transformed army. And we can do that quickly. I'm confident of that. What kind of, you know, historically people, you know, on the West Coast and in San Francisco or working in the tech industry generally think about, you know, serving the country by maybe joining a defense tech company. And if they're an engineer, particularly, they want to oftentimes work on, you know, technology in the private markets.

42:35What kind of opportunities do you guys have in the force that you're really excited about recruiting for that maybe people within the tech community aren't thinking about as opportunities today? So we are reaching out. And I hope here next month we got a bunch of folks that we want to bring in. You know, there's so much talent out there, you know, that they have an opportunity to serve. We have some of them that on the Army birthday, we're going to swear them in that are engineers, technologists that can serve in the Army Reserve. They can help us and still be a part of their companies. On the other side, we want to be very open.

43:14I mentioned the transforming and contact. We're having engineers that are coming out with our units, seeing the problems that our soldiers are trying to solve in the conditions they're trying to solve it, whether that's the heat out in the Indo-Pacific. We had engineers with us over in Europe. And I just think we need to be more open and inviting and getting those folks in because we got a lot of innovation out there and we need to just make sure that we're tapping into all of it. Last question and we'll let you go. A lot of early stage defense tech companies, they don't always have the opportunity to go run a large scale pilot with the Department of Defense or the U.S.

43:56Army on day one. Some of them are getting experience in Ukraine, for example. Has that been, is that an effective path to pull some data from a Ukraine experience as a startup and then use that as a case study to make the case that the U.S. Army should at least demo what they're building? Yeah, I mean, that has. We've taken a lot of that. We're collecting a lot of that. And again, we are creating our own environments. If you go to any of our combat training centers, we have that out there. We have jamming. They're going to have to face the electromagnetic environment that we can replicate to do that.

44:36So we're doing that at our combat training centers. We're doing that at home station training. So again, just getting these companies, and that's what we want to do. We want to invite them in, and we're doing that. Next week, I'll be down at our joint readiness training center, And we got a whole bunch of new companies that are coming in there, showing us the systems that we have. And again, this gets back to being agile and our funding. And the secretary and I talk a lot about we want these small companies that are very innovative, involved in what we're doing and building products for our soldiers.

45:10That's fantastic. Anything else, Jordy? No, this was great. Thank you so much for taking the time. We really appreciate it. And thank you for what you do. Yep. Thanks for having us on. Appreciate it. rest of your day cheers bye talk soon um super helpful perspective yeah very interesting um honestly uh it's makes i mean it's always a bull signal to me when uh people in any type of leadership position are willing to go out and be uh on the media you know the front lines of the media telling their story um you know we've seen you know now i want to go ask every drone company we've talked to like hey have you actually taken the army up on their offer they have electronic warfare test sites are you there or are you just uh are you just building cgi renders what's going on are you actually out there on the test sites getting shot down by the u.s army because i imagine you build something you raise some money and the vcs are like yeah this sounds great and then you take it out there the army just destroys you it's like this is one percent of the world People are nervous to do demos.

46:15The Sequoia partner meeting. Yeah, no, no, no. People are nervous to go do a demo for VCs, but doing it for the one customer that you need to make your business a reality. Yeah. Well, we have Adam Porter Price from Anduril joining next, and I'm sure we can ask him about these demos because they've been on an absolute tear, launching different missions, different programmers record. They just made an acquisition that we'll ask them about. So welcome to the stream, Adam. Great to have you here. Great to have you. Very excited to be here. Thanks so much. Can you introduce yourself and then give us the breakdown of the news from this week?

46:51Yeah, so I'm Adam Porter-Price. I'm the head of M &A at Anderil. I also look after some of our strategic partnerships as well. And this week we announced that we acquired Class, which is a ruggedized computer company. They're based all over the world. They've got locations in the U.S. as well as Ireland. and they've been making sales to US and allied governments. So what's important about ruggedized computing in the modern warfare context? So every robot, every animal robot has a computer in it. And it turns out that like actually making a computer that can go into places that is hot, dirty, it's going to get dropped a lot, things like that is actually kind of hard.

47:32And we have tested other people's computers. Like we have taken computers out into the desert and like tried to make them work on the back of a JLTV and run Lattice, our operating system. And like basically nothing works, right? Like it is a difficult and very demanding environment. And the only computer that we've seen consistently work when you're out in that environment where a warfighter has to be able to do something when they're out in the field is the class computer. So we use a lot of their computers today, but we have visions for what we want to do with them in the future. And like the number one thing that is extremely likely to happen is that there are going to be more computers out in the world and they need to make decisions.

48:15Like our AI needs to be able to do stuff without being able to phone home and ask for permission. Like there's decisions that have to be made and literally can't happen fast enough over the Internet or over whatever networks. The speed of light is not fast enough. And so you actually have to make these decisions on the device. Yeah, I imagine the device gets hot. You want a fan to blow that up. Now water flows in. There's just like a constant trade-offs, right? I was thinking maybe another bidder in the process would have been Sonos because I can't even get my Sonos speakers to work. Don't get Jordy started on Sonos.

48:51I'm with you guys. I love my Sonos, and then they messed up the app. and like, yeah, it's, it's, it's, it's so, so bad. Uh, anyway, uh, quickly, can you benchmark, uh, what one of these computers feels like relative to, you know, uh, a phone, a laptop, a desktop versus like a server rack of H100s? Like how powerful does the system roughly need to be if that's not classified? So the reason why we, we, we acquired this company is because the team can actually make lots of different types of computers. Like when we buy a company, we're, we're really, they, they often have a product that we like a lot, but really what we're doing is we're getting an amazing team sure and what we love about this company is that already they were sprinting with us on building a new product that we did i think we announced this week menace t right yep um but like we have we have a lot of grand designs for different types of computers that we think need to exist in the world and so they have they have a very popular uh computer called voyager um and it's like it's about this big like it's it's probably the the size of a really thick hard cover book.

49:53But the team is extremely capable of building lots of different types of computers. And then the other thing that they do, which is for some people, like a little bit boring, but actually extremely valuable, is that they will build the chassis that's ruggedized. Like you can drop it off of a C-130 and like it's going to hit the ground and like it's going to be fine. It's still going to work, right? It has all of the cooling in it that you need. It can carry a lot of different radios, right? So you can plug in a Sylvus and a Persistent systems and a whatever radio into it. And so like you actually can go do the stuff you need to do out in the field.

50:24You can run Lattice. You can talk to lots of different people that are using lots of different radios. And this is just like an absolutely invaluable capability that we have to have. Okay. Talk to me about the anatomy of the deal. Is there like an investment banker involved? When did you guys meet? I've heard this story like, oh, if you're going to get acquired, you'll meet your acquirer a decade before the deal happens. You don't just cold call and say, hey, I'm ready to get out and take my stock off me. I mean, if you're a good acquirer, you are out in the market and you are talking to 200 to 300 companies a year, and you just like, you know everybody, right?

50:57Like there's not that many companies in the world, and there's not that many good companies. And so the chances are pretty good that, in fact, like every single company that we've bought, we've known them for a while, right? We've watched them, we've talked to them for years in advance. And like, we've been buying class computers for years. We knew that they were really, really talented. And we realized last year that not only is our demand for computers just insatiable, but the things that we would like to do, if we had this team working for us, we could go build products that as two separate companies, we would never be able to do, right?

51:32It would just be too hard to make the incentives work. And we never buy a company that's for sale. We always make them for sale. We go find them and we ask them, I'm like, we think that there's two paths, right? There's a path where we're separate companies and we do things arm's length, or there's a path where we are one company and we are able to move much faster together. And in every company we've bought, that's the route that they've chosen, right? And so we've been working on this since last July or August. And yeah, this is how long it takes. It takes nine to 12 months to buy a company like this.

52:08the the line that that stood out is that we don't buy companies that are for sale and i wanted to highlight that because i i believe there's a sentiment in the defense tech community that's you know it's i'll kind of butchered who cares about raise 200 million dollars and it will buy me no it's like yeah shoot to be a new prime and even if i miss someone will buy me i'll just run a process and i'm so talented or you know so i want to know what is the state of like the market at the M &A market broadly. And the thing I wanted to specifically highlight was a lot of teams look talented on paper, but if you've raised and been working on products, even if you don't care that much about the products they built in the past, you're still gonna be hypercritical because the real resume is like, well, what have you built with$10 million?

52:56What have you built with$50 million? What have you done? And because that says a lot more than who your investors were or anything else? We often, it's really hard to buy a company that has raised venture capital because the pref stack is, I mean, you guys know this, right? The pref stack is really, really high. And our expectations when we buy a company is that we can like five to 10 X revenue in three to four years, right? So you really have to have conviction that when you're paying what we would pay for a company and we pay in market multiples, like we can lean in on some things. we can be flexible in a way that I wasn't able to do when I was doing this in more traditional companies.

53:36But we still, we're not crazy, right? We pay what a fair value is for a good company. And so we can lean in a bit, but if somebody goes out and raises a couple hundred million dollars, like the outcome that they have to have in order for their investors to be happy and for the common to have a good outcome is really, really high. And I actually think that the ceiling on like a YOLO, like let's just do this and be legends acquisition. It's like three or$400 million. Like when Boeing acquired Liquid Robotics a couple of years ago, that was a company that they had invested in. They were a little bit bailing out the venture capital arm because the VC arm had invested in it.

54:13And so like big Boeing was like, all right, well, we're gonna, yeah, we wanna own this. And I'm certain that they, I think they paid about$300 million for it. I'm certain that that was 10X forward revenue. I don't believe that they ever hit that 10X forward revenue number, But like, I actually think that that is basically the ceiling that a traditional buyer can be like, yeah, let's just rip it, right? Above that, the board gets involved. There's actual valuation math. Like, people start to look pretty critical at it. And so for like a traditional buyer, I actually think that that's the ceiling.

54:43And like, we're not stupid, right? We don't make dumb decisions about acquisitions. We don't just like rip it because it would be cool. And we're helping somebody out, right? Like, we're pretty careful with how we value companies. Yeah. So you've talked to, you know, two or 300 companies in the defense tech space. I'm sure some of those every year. Every year. Every year. How are these companies being built without venture capital? That seems very counter to the narrative. Everyone says, oh, I need to raise so much money because everything's so expensive. I got to hire all the engineers and pay for all the drones I'm going to blow up.

55:13But yet companies are doing it. So something must be, you know, unspoken. It takes them longer time, right? But what you'll find is, though, that they just make decisions that you make when you have to be cheap and cheerful, right? You have to hustle, and you have to figure out a way to do it. And so a lot of times when we find companies, they've just found a really clever way of doing something that allows them to get their product out. And all of these guys are hustlers, too. All these men and women who run these companies, they move. They're hustlers. they are good at running their companies and that's why we want to own them.

55:50That's awesome. Do you expect more competition from Primes on the M &A side in, call it, two, three years? It seems like right now they're asleep at the wheel and to be honest, I don't think a lot of talent would be like, oh, I want to be the talented team to go join the non-talented team and then, you know, it's not that fun you know, to be like the best team at a company. Right. And, you know, in many ways, in some ways, that's what the money is for. Right. Like if, if, if you pay enough, right. That's what the money is for. But yeah, I'm with you. Well, yeah. And so that's what I'm, that's what I'm kind of getting at.

56:30Do you expect you guys come in three years from now and say, this is a, you know, we believe this is a fair price. And then, you know, some other prime comes over the top and it's like, we're going to pay double just because we're, we're getting killed over here and that happens i don't think they'll ever pay double i don't think they'll ever do that i often am in deals and like there are other people in this ecosystem that are smart like other more traditional but not super traditional but other other acquirers and the problem is that like they are just you have to do like a hundred things right to buy a company like this um and and to and to win right and if you do some of those things wrong and like a traditional incumbent is just, they have so many impediments in their way of keeping them from doing this.

57:13It's not just like finding a good company. It's not just showing up and saying like, we want to pay a lot for you. There's so many other things that you have to do right in terms of taking care of the team, committing to investing in additional products in the future. And so like, I think it's actually pretty hard for them to do. And I used to work in a more traditional acquisition environment, like M &A environment. I know what this is like. It's really hard for them to do. Yeah. Well, this is awesome. I know you have to get out of here. it's 11 29 we will talk to you soon i'd love to have you back we could go way deeper i'm sure there's tons of people that would learn a lot from what you have to say so thank you so much for joining thanks guys we'll talk soon bye uh in the meantime let me tell you about vanta automate compliance manage risk improve trust continuously vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation whether yet you don't get air horns and yeah no not in your average vanta Vanta Reid, you've probably heard them on other podcasts, but only our Vanta Reads have the air horn.

58:13That's right. Whether you're pursuing your first framework or managing a complex program, go to Vanta.com. Anyway, we got Delian coming into the studio. Delta V with Delian. He's not here yet, so let's do an ad for one of his companies in his portfolio, 8Sleep. What's new in Pod4Ultra? Pod4Ultra has all the signature features you love about the pod, plus new groundbreaking upgrades. How'd you sleep last night? jordy i put up an 89 only six hours did i beat you did i beat you the app the new app is so good that would be three 73 i got roasted six your new milestone john is how did i get so little sleep i know yeah i gotta do three nights we thought we were gonna have a real like battle back and forth and jordy just ran away with it in the first quarter i take it seriously anyway take it seriously Oh, and we're having Mateo from 8 Sleep on.

59:06Oh, fantastic. We're doing Sleep Day. We're going to get a bunch of sleep people, a bunch of performance. We should have the Whoop CEO back as well. Yeah, jump back on. Sleep tracking. Jump back on. Anyway, until Delian gets here, he's almost here. I'll tell you about AdQuick. Out-of-home advertising made easy and measurable. Say goodbye to the headaches of out-of-home advertising. Only AdQuick combines technology, out-of-home expertise, and data to enable efficient, seamless ad buying across the globe. and i'm excited to bring delian into the studio we have a yellow light which i think means like he's kind of here i don't actually know what that means he's green he's here welcome welcome to the stream delian how you doing yo what's up you guys you're uh getting real commercial i like it oh yeah yeah the ads never stop the ads never stop thank you to the sponsors you see the ticker down there best companies we just didn't need sleep read i know so you're welcome you should have by the way like you know come up on stage when i was uh you know interviewing senators last week at hill and valley forum you should have said senator we sell ads yeah you remember we ran it we ran it we did a talk at hereticon oh yeah ran a ramp ad during a ramp ad during the talk yeah wow yeah i think they paid us a couple hundred bucks which uh was the highest cpm ever paid for any ad ever I think, because there were like 50 people in the room.

1:00:25But it's like a$2 ,000,$10 ,000 CPM, but it's a lot of fun. Anyway, let's talk about modernization, army modernization. What are you reading into what's being put out from the army, from the DOD, from the government? And are there any companies that are taking advantage of this? It seems like they're very much welcoming Silicon Valley. I mean, they're on the stream two days after we tweeted. It's crazy. but what's your take? Yeah, I mean, huge cultural shift. If you look at the, you know, sort of various branches and how they're known for, you know, sort of adopting next generation technologies at like the tippiest, tippiest of the sphere is basically like the Space Force, you know, sort of subpart of the Air Force.

1:01:06Then next year, traditionally, you know, sort of thought of as the Air Force, then Navy, and then typically Army is more of a, you know, thought of, I guess, is like a, you know, sort of laggard in terms of, you know, really, you know, sort of pushing the fold on tech. And so, you know, sort of clearly they're starting to, you know, sort of shift that culture from within. And like, I do think it's like a very bullish signal that SEC army goes from, you know, you know, seeing that, you know, you guys, you know, are irrelevant to the tech ecosystem and the Catherine Boyle thing. And obviously the comms team there being like, sir, like you have to, you know, to go get on this.

1:01:34And like to do that in 48 hours is like very not trivial. Like I don't even know how they got my email. Like I tweeted us army come on TV VPN. And they just emailed me five minutes later. It was crazy. No way. Yeah. It was wild. They emailed me directly. Yeah. Yeah. I mean, look, I think there's, you know, sort of a lot of, you know, sort of changes in chaos from the new admin, you know, you know, like I've been seeing this at a very tactical level with like, you know, sort of portfolio companies where it's like, you know, they're going from, you know, we've talked about this plenty of times, but like continuing resolution, reduce budgets to, okay, there's now this reconciliation bill that's, you know, sort of coming in, but then like Congress has to go bought it.

1:02:10And there's already talk of like, well, maybe they're not going to be super pleased with that reconciliation package in Congress and pass it all. And there may be already talking about a fiscal year 26 continuing resolution. So to extend the current budgetary environment. You're seeing that volatility show up within individual program offices where there is a little bit of retreat to safety of the pre-existing programs, pre-existing contractors, etc. And so to have U.S. Army talking about, hey, even in this budgetary environment, even with all this volatility, that we're leaning in on net new players and net new technologies, I think is a real bull signal for the cultural shift that's happening within the Army.

1:02:54You're seeing that some amount within other branches, but there's sometimes pushback, too. I'll give an example that I thought was really interesting. yesterday um i'm forgetting the um exact official i think he was like a major general i want to say within the um you know sort of space force i'd have to you know sort of look up the headline uh but he basically you know sort of went on stage at um a space conference not space symposium but another one anyways this was like two days ago and basically was like look i have a lot of people that keep pitching me on like orbital refueling we've even funded some orbital refueling companies i don't think that this gives gives us any significant advantage anytime soon the time where this will be relevant to the warfighter is when there's probably a significantly larger number of you know sort of uh space force satellites up in orbit to justify this but that's not going to be anytime soon and it's probably a decade away um and so you know it's kind of interesting you know to see these like you know so in some ways like counter to what you'd expect you think space force like bleeding edge adopting the you know some new technologies and you have like a major general saying like we don't think refueling technologies are particular you know sort of relevant.

1:03:56And so indicating, Hey, maybe the tech ecosystem is like pushing too hard on next generation capabilities before it's relevant. And then you have the army, which is thought of as being a little sad, you're being like, we want next generation capabilities. People aren't pitching us enough on, you know, sort of this type of stuff. Um, so yeah, those are two, I feel like either sort of, you know, reversing seats. Yeah. I mean, at the same time, I feel like, uh, the, the story with the army was interesting because it wasn't just like IVAS, which is obviously this like debacle that took 30 years, never really got anywhere.

1:04:23Now it's in the hand of Anderil. You can imagine that when Anduril shows up and is like, hey, we're ready for you to buy this, it's going to be pretty good because it's in Palmer Luckey's DNA. And I think he's just like, you know, the ego of messing that up would not allow, he would never ship something that doesn't work. Right. But then we also heard that he was like, oh, yeah, one of the tech companies we visited was just Microsoft. Because, of course, we need databases. We need email. We need Excel sheets, probably, all these things. And I'm wondering if there will be a next, like a next generation.

1:04:50OpenAI was one that he called out as, hey, we get all this data, we can drop LLMs on top of it. And I wonder if there will be kind of a second wave of defense tech where enterprise SaaS companies, as much as we like to joke about, like, let's put the government on ramp, like it really might happen. And there's going to be all the... They were talking about using Salesforce for recruiting. Yeah, that was something I wanted to ask, but we didn't get a chance because we only had it like 10 minutes or so with each. But is there not enough founders in defense tech doing non-kinetic, non-sci-fi, sort of boring, you know, just like effectively, you know, the modern CRM for XYZ?

1:05:28Who was the founder we had on that was doing supply chain logistics management? Rune. Rune. Rune, yeah. Yeah, so Delian, what are you seeing in terms of non-defense tech startups start exploring working with the government in one way or another? I imagine that it's easy to slap that on. It's like, oh, yeah, we're cool. We have an American flag on the wall. At the same time, there is a real need, and it does seem like there's been some neglect here. I'm going to do the classic media thing where you ask me a question, and I'm going to answer what I want to answer. Please, just do whatever. All blend together.

1:05:59He's a pro. It's also a bit of a ramp ad. But today, Stripe and Ramp announced that they're going to be partnering together to issue stablecoin-backed in Latin America. Now, it's interesting to think about, okay, so why LatAm? Why aren't they launching this? It isn't necessarily US, Europe, et cetera. You can make the arguments on like, hey, we have more currency stability here, so it's not as relevant there. The value proposition is a lot stronger. But I think it's always interesting to study if you look at, let's say, next generation sort of payment systems. how much is done be like mobile qr codes tap to pay etc you actually see that uh some of the more modern infrastructure is actually in more of the laggard countries because they don't have this sort of pre-existing let's say ach wire systems etc that have been built up over the course of a century so it makes it harder to fully adopt and switch over whereas like in africa if you look at like mobile payments you know qr codes etc the like speed of transaction it's actually like faster and better and lower fee there, but it's because there was no sort of pre-existing, you know, sort of infrastructure or innovation there.

1:07:03They sort of leapfrogged us. You know, you can kind of make this greenfield, you know, sort of China too, is like, it was more of a greenfield. That's why they have the like super apps like WeChat. It's because like they didn't have all these individual apps that existed before. And so one can come onto the scene with a super app. And so to tie this, you know, sort of into DoD, it's interesting to think about perhaps the places that are going to in general gov let's say not dod alone perhaps the places that are going to be able to you know sort of leapfrog are going to be some of the places that have been the least innovative over the past 20 or 30 years because they don't have any pre-existing infrastructure or concepts for how do we adopt next generation technologies right within the air force there is the like air force research laboratory afworks which is meant to basically you know sort of um be one of the early funding mechanisms for these next generation technologies in the army you kind have like army futures command but it's much less built out of an infrastructure of like how do we adopt next generation user technologies there isn't like a pre-existing pattern and so maybe it can be a bit of a leapfrog in a greenfield and then the equivalent on the like omb smart card etc side of things like no i don't think there's been like an rfi for you know uh next generation payment systems for like the fed and like the corporate card system in the united states in like 30 years.

1:08:18And so in some ways, they don't have any like pre-existing by-season, they can be like, yeah, we're just going to like completely radically rethink, you know, the entire way that we do it and adopt the stuff from scratch. On like the VC side, am I seeing tons of people working on this? I don't think so. Like it still feels like it's a little bit of an underexplored trend. I think the biggest thing is more like some of these incumbent companies realizing that there is a real, you know, sort of gov opportunity. So I don't think that you're going to see like next gen corporate card companies start that are focused on the gov i think where your privacy is like ramping like oh i didn't even think about the idea totally the government could be an adopter of my technology because the whole point of commercial off the shelf is that it's commercial off the shelf like if you build it just for the government yeah you have one buyer and that's a problem but also it's not going to be as good of a solution as if like yeah also every fortune 500 company uses it and you're under immense pressure to deliver the best possible product.

1:09:11Anyway. Totally. Like, yeah, the reason that Ramp is most relevant for them is because it also has all these commercial customers where you can adopt the best-in-class, basically, like, you know, sort of patterns. And, like, you know, I think they talked about, you know, I forget if we talked about this when I went on TVPN during, you know, AHVF. I think it was before this panel. But just, like, you know, Senator Ernst and, you know, Eric's panel was phenomenal. Just from the perspective of Eric talking about the, like, cost savings and efficiencies they were able to improve with an andrel. It's like ATB, you know, it just was on the show, Brian Shipp, et cetera, all super, super brilliant people.

1:09:44These are like the best technologists that have like tackled this field. And even for them, Ramp was able to, you know, sort of create significant efficiencies. Imagine what that happens when you get it adopted into the government. Yeah, well, speaking of Adam Porter Price, he just came on the show. He was breaking down their acquisition of Class, gave us some interesting anecdotes about how the M &A markets work in defense tech. he's not buying a lot of companies that are for sale he's also not buying a lot of venture-backed companies uh what do you think uh what are you reading into andurl's m &a strategy uh as far as a venture capitalist perspective yeah i mean look i think you know abb is a very intelligent acquirer right when you know i was listening into the last year sort of five ten minutes of his you know sort of talk and it's like look he goes out and buys things where like there's a clear ability to like go five ten x their revenues there's a one plus one equals three and that like they can build products together within Anderle that the two companies weren't able to apart.

1:10:37And it's somebody that he's like known for years, not something that like when there's a fire sale because the VCs are starting to run out of money, like, you know, then he finally starts to take them seriously. And so, yeah, I don't know. I do think there's a subset of investors that are investing into these defense tech outcomes that think that there is a potential, you know, sort of acquisition M &A option at the end of it. And I don't think there is the equivalent of like, i you know there's definitely these like massive mergers that happen you know within you know sort of the primes but you don't see the equivalent of the like i don't know like adobe figma offer the google you know sort of wix you know is offer like there's not the equivalent of that yeah all of these yeah no like looking at it there was there was like roughly three billion of defense tech funding in 2024 like there has to be a bunch of other exit paths it's not like anduril is going to be like, oh yeah, you know, we know your funds coming to a close in 10 years.

1:11:33We're going to, we're going to acquire$9 billion with venture companies that are at the end of it. Just so we want you guys to get a nice three X. Yeah. Yeah. And I mean, the other thing is that like, I think that it's easy to look at a headline number on some sort of acquisition that happened and think like, oh, well, like they were acquired for three X revenue. So, you know, we could probably, that's probably our base case. But when he actually dug into it, he was like, oh, there was this deal, but it was because like Boeing Ventures had invested in this company and then Boeing bought it. And so there was like total like cyclicality of the deal and like all these special things going on.

1:12:06And it wasn't necessarily just like an open fair price, all financial investors really setting a price in the market. And so there seems to be a lot of distortions in the M &A markets. Yeah. I mean, I'll give an example that was just announced today in the like aerospace field that sort of matches the negative pattern that APB was suggesting. So it's this company, it's a Kapel space. It was one of the leaders in the synthetic aperture radar satellite. Think of this as basically like a different spectrum than like planet labs that, you know, largely focuses on like visual spectrum. This is more like radar based so you can see through clouds, et cetera.

1:12:37They raised like, you know,$320 million total. So right in that ballpark where APB was saying, once you've raised hundreds of millions, it's really hard to, you know, sort of, you know, go to an M &A outcome. The company was around for like 12, you know, sort of 13 years and 2022 or 23, suffered a handful of setbacks, both like they had propulsion issues that made some of their satellites end up deorbiting a little more quickly. They unfortunately went on a rocket lab rocket that ended up having a launch failure. And so that basically satellite went down, founding CEO ends up having to resign and company just sold for what looks like, you know, sort of 320 million, even though the basically, you know, sort of preferred stack was 315.

1:13:12And it sold to this, like, I forget the name of it, but it's like quantum fund or quant, it was like some quantum related hedge fund that is going to start using their data for, you know, sort of hedge fund trading and then try and develop some solutions on it. And so it's like, look, that it basically turns into effectively like a, you know, sort of 1x outcome for all the investors if you're selling for your, you know, sort of prep stack. And that's sort of like truly the best, best case outcome that you can, you know, sort of get when you're, you know, called seven years in, probably I assume flatlining and revenue still significant, you know, sort of burn.

1:13:42There aren't any obvious like large DOD programs that they were sort of scaling into. And then you have this like counter example that one of their competitors in the Los Angeles area, Umbra, that has sort of raised less, but I think has taken this much more, yeah, I don't know deeply the company's numbers, et cetera, but my just sense is like, they've just been way more sort of capital efficient, and they're taking a longer time to sort of build up, but they're doing it in the way that sort of gives them an outcome on the other side, where I do think if need be, they could get acquired. And if not, I think they can probably run it for a pretty long period of time just on revenues and cash flows.

1:14:16And so I look at the defense tech ecosystem. I'm like, man, people are raising large amounts of money. And they think like, oh, if I take the Silicon Valley approach of like burn fast, grow fast, et cetera, there will be like a whiz like outcome on the other side potentially. And it's like, no, like the M &A space here is like way, way, way, way, way more constrained. because unlike Google or like, let's say like, you know, Facebook acquiring Instagram back in the day, there's much less of this like competitive threat by next generation players that grow really, really fast. There's just like not that equivalent dynamic where like you're going to get, you know, sort of bought out even with like relatively limited progress.

1:14:48You're only going to get bought by like these very, very, you know, rational buyers. Not to say that like Facebook's, you know, sort of acquisition of Instagram was irrational in the long term, but in that moment, it looked very irrational, right? Like it was a deeply, deeply irrational purchase according to traditional purchasing frameworks. I don't think like APB said, there's going to be that in the defense tech ecosystem. They're only going to be very rational purchasers. Yeah. Staying on, I don't know, cameras in space. I was talking to Kevin Wheel from OpenAI, formerly Planet Labs, about observation in VLEO.

1:15:22And he was saying one of the challenges is that orbital refueling and maybe the fact that it's farther away than we think. What is your take? I mean, obviously, you're one of the new Leo, you know, beneficiaries. What's your take on timelines for doing interesting stuff in very low earth orbit? Yeah, I do think there's a, you know, sort of real challenge of, you know, if your business case is predicated on a certain mission timeline of like how long you're up there to take photos and generate, you know, sort of revenue. Yeah, there's definitely some interesting folks, you know, Albedo Space is trying to build these very like dense and somewhat aerodynamic, you know, sort of satellites where they're trying to, you know, sort of close this gap between like, Hey, if we're lower, we like have slightly better, you know, sort of imaging quality.

1:16:06And if we make this thing somewhat aerodynamic, then we don't, you know, have as bad out of like a, you know, sort of deorbit timeline. It just feels like it's used to so many technical risks and hurdles where you're trying to like, you know, you know, the way that I feel like trace sometimes talks about it as like, companies typically should only really rely on like one miracle to get to success. These like multi miracle companies are somewhat difficult. Now, I'm saying that maybe Varta is also a multi-miracle company. It's non-trivial. But maybe you're allowed to take a multi-miracle stab. Well, we have an American pope now.

1:16:39Yeah, exactly. Bless all of us. What's your thesis around Fury is super exciting. You can imagine they scale it up to be bigger, carry bigger payloads, faster, or more competitive with something like an F-35 or an F-47, but does Anduril advance so quickly from an autonomy standpoint that they never have to do a sort of human-rated, human-enabled platform? Is that just from your personal standpoint, does that feel like a possibility? They just make them for Tom Cruise and the next Top Gun. That's it. They make exactly one plane. it has the IMAX cameras already baked into it it feels like there's just a such a strong religion within you know sort of the air force around you know sort of human pilots and yes you know CCA was like a you know sort of significant step towards getting them comfortable with like autonomous wingman but like fully fully you know sort of decoupling for some of these like larger more capable more expensive platforms from having like a human operator that again I think what happens is like the ratio of autonomous jets to human jets just significantly, you know, sort of increases, I guess, over time where it's, you know, right now they talk about is like three to four to one.

1:17:58And then over time, I think that gets to like a hundred to one, but I think they're still going to want this like human orchestrator that literally just probably has like a literal ball of furies that are like, you know, operating around the like, you know, sort of fighter, you know, jet pilot. But I would probably bet on, you know, sort of five to one odds that it's more likely than not, And again, it's hard to gauge whether or not they win it. I think Trey and others have talked about how recently some of the feedback that they get from the department is like they're winning too much. And so maybe they're not able to win because they're such big winners.

1:18:27But I put like five to one odds that they definitely like sort of bid or architect some human rated fighter jet system in the next, you'll call it five years. This is a personal perspective. This is not internal information. Of course. Or speaking on behalf of founders. Well, while we're on FF Portfolio Companies, in the news today, Fiji Simo going to join OpenAI from Instacart, CEO of Applications. Now they have two CEOs and running different divisions. Do you have a take about that? Not co-CEOs. Not co-CEOs. Are you worried that Will Brewery is going to be poached at some point since Sam just seems to steal the CEOs from all over the market?

1:19:08Head of space. Head of space. I know. Yeah, CEO Planet, now CPO there. Yeah, exactly. I mean, underrated, right? That like the old OpenAI team was incredible and they all kind of scattered to the wind and started 25 different foundation model companies. But now he's putting together the Avengers again. It's great. You know, not to be rude to the prior V1 Avengers, but I think the V2 Avengers are a little more sane, commercially focused and a little more stable. You know, I think the V1 was probably right for like the research lab days. Totally. It's going to be a little crazy now that it's a commercial company, probably a little different.

1:19:44I don't know. I mean, there's so much news that I feel like has come out of OpenAI over the past week that I do think fundamentally changes how you should underwrite the company over the next five years where it seems like they're sort of abandoning the full for-profit conversion. It seems like Microsoft is not necessarily fully willing to give up their rev share and percent of the revenue they get at these larger scales that they originally promised. And so that negotiation is clearly not done. And then in Sam's announcement, you know, sort of tweet, he was like, by the way, I am staying on a CEO of OpenAI, even though this person is CEO of applications.

1:20:18It's like, well, nobody was asking that question. But like, given that you're clarifying, maybe we should be asking that, you know, sort of question. Well, it made me think is it, I mean, we had O3 explain ChatGPT's entity structure the other day. Yeah, OpenAI. And it could not. It was like explaining like M5. and it was extremely botched. You came away even more confused. So we don't have... We haven't passed that to our test yet. The real AGI is... You can explain the structure. Being able to explain your own corporate structure. Yeah. But I just read into that as like, maybe Sam is CEO of one entity in the stack and then OpenAI Global LLC has another...

1:20:59Yeah, yeah. Because they're not like co-CEOs. Sure, sure, sure. At no point did it say that, so... Yeah, I mean, you've been a little bit negative on wrappers, on companies building on top of foundation models. And yet another FF portfolio company, Winsurf, acquired by OpenAI,$3 billion outcome. It seems like... Winsurf is a portfolio company, by the way. Maybe it is. So it's publicly reported. It's publicly reported. I don't know how that would be the case. We missed that when we saw that. I found it on three different platforms. Maybe it's fake news. Who knows? But it could be fake news. But the big thing is, is it game on for application layer companies now, given that you can go and raise a very traditional venture path and the narrative of like, oh, you're just going to get steamrolled might not be there because$3 billion is$3 billion.

1:21:45It's a pretty good outcome, right? I mean, look, this is the perfect example of the delta between user defense tech companies and AI tech, you know, sort of companies. Like one, there is the like, hey, I'm the big company with lots of cash. I feel slightly threatened. The like exponential growth of these things can sometimes be inescapable. And so I need to buy this and have like a player in the race. and then on the defense side of things there is no such thing as like uncontrolled exponential you know sort of growth in some ways the government explicitly like meters your progress where they want you to see see you accomplish xyz thing on a smaller program is a lily pad to the larger program larger program etc so it's like yes you know uh andurl has done super well but if you compare them to the like exponential revenue growths of the like open ais the ramps etc of the world, I don't think it's that.

1:22:31It still is like super linear, but, you know, there is some like, you know, natural cap on like, you know, true, you know, sort of growth rate. And so I do think it then makes it more rational for investors to be piling into some of these AI application companies. Like, look, I still, you know, probably not a, you know, you know, bull on things like Harvey as an example, not to overly pick on them. But when I think about like a, you know, again, not to pick overly on another company, but if I were to think about like the irrationality of some of the like, you know, Harvey, you know, prices versus the Saronic prices, at least Harvey, you can rationalize, hey, there are these like multi-billion dollar acquisition outcomes that are almost certainly going to happen quite regularly.

1:23:09I don't know, like who buys Saronic, right? Like, I don't think that like, you know, Electric Boat, you know, the General Atomic subsidiary, et cetera, is buying, you know, Saronic for their shipyards for$3 billion. Yeah, yeah, yeah. It's totally possible that the windsurf thing causes this cascade of like, every hyperscaler needs an ide company and it's just like boom boom boom and they all have 10 billion dollars to spend so you know oh is 10 billion too much maybe two billion happens but like multi-billion dollar outcomes we could see a whole bunch of those same thing with uh you know image generation same thing with uh you know different agent models like there's there's a way that like a lot of these could be baked into things anyway i think the other question i'd be interested to get your point of view on so we were at config yesterday figma came out with uh make sites buzz like a bunch of like very you know things that could be by themselves their own kind of businesses right and i saw some commentary online that was uh basically saying that like every app is just like basically converging on the same feature set right now it feels like in some ways where it's just like make anything you know and and so like what hat like in your point of view, obviously you, you went, you very clearly took a, uh, uh, you shifted away from looking at a lot of software, pure software opportunities, but how do you think VCs will change in kind of underwriting some of these opportunities where it, for some businesses that have been started in the last year, they're moving towards a place where everyone is weirdly competing over the same kind of like core use case at the end and the day, make an app, make, you know, X, Y, Z, you know, thing.

1:24:48Yeah, I'll use a like example from more like back end, you know, sort of cloud infrastructure that was related to AI. There was all this hype in like 21 and 22 around. And I may butcher this because again, not my field, but I believe is, you know, the term was basically these vector, you know, sort of databases that were a way of basically storing a lot of the sort of model weights that you should pre-training, you know, sort of data that you were, you know, sort of working with. And, you know, you're fine tuned basically models on top of the base foundation models. There was a whole set of investors that plowed like hundreds of millions of dollars into these companies.

1:25:18They had crazy revenue growth. And then like within 12 months, AWS made it a feature. Google Cloud made it a feature. Azure made it a feature. And the company basically either dropped off to zero because it was like, yeah, this is just a natural cloud feature. Thanks so much for pointing it out. Thank you, VCs, for like funding hundreds of millions of dollars to like, you know, make our customers very aware that this was necessary. But it turns out like people just like having things in a single platform that they already have a relationship with. And so, yeah, I think like, you know, if I were sort of, you know, dealing with the CEO of Figma, I would just be like studying what all these VCs are funding and then being like, great, I don't even need to buy this.

1:25:51This is so easy for my internal team to build that I will just go build the best applications. And then it turns out the CFO is like, well, why would we have two design software contracts? You know, we already use Figma. It's already rolled out to everybody. Everybody knows how to do it. Let's just kill this AI thing and just like, you know, use the AI up within Figma. And so I think that like, you know, I don't know if you guys remember this term Sherlocking. um uh it was you know this is uh for the you know sort of viewers on the show that are you know uh below the age of 30 um uh back in the day there was this app on the mac app store called sherlock um that you know it was very popular some vcs funded it it was getting like millions of use of revenue um all that it did was if you hit command space it pulled up a little search bar and allowed you to search all your applications etc on your mac app uh and then one day And then one day at WWDC, Apple was like, hey, that's a cool idea.

1:26:39We're just making it like an OS feature. And so it was known as getting Sherlocked when a big tech company just is your entire company as a free feature in the software that they already have all the distribution on. yeah i mean i always i always looked at uh a lot of these generate an app companies and you know looking at their revenue ramps it's just it's always it's always it's it should be nerve-wracking if your revenue is ramping that quickly and there are founder mode incumbents that are in the same category because usually means you can build said thing very quickly but yeah anyways this is Fantastic.

1:27:16Thank you so much for hopping on. We'll talk to you soon. Delta V, Delon. That's the end of that. Next up, we have Harley coming in from Shopify. We need a bunch of size gong because it's earnings day. And we're pleased to report that Shopify delivered. Q1 2025 revenue rose 27 % year over year. 2.36 billion edging past the 2.33 billion consensus. They beat the analyst estimates. And we're excited to have Harley here in the studio. Welcome to the show, Harley. I'm so glad to be here. Can you guys hear me okay? Yeah. Oh yeah. You sound great. Loud and clear. So run us through it. Give us the breakdown.

1:27:54How are you processing today? How are things going? Things are going really well. I mean, I think Q1, I mean, remember, obviously Shopify is a bit of a seasonal business, meaning Q4 is always like, we're ultimately in retail. So Q4 is always a big quarter for us. But Q1 was amazing. Revenue was up 27%. We did 2.4 billion. free cash margin hit 15%, so about$363 million. And then it was our seventh consecutive quarter of GMB growth above 20%. It was about 70, almost 75 billion, which GMB is always important because it speaks to how well merchants are doing on the platform. So when Shopify does well, I'm obviously very proud.

1:28:33I'm especially proud now because I think this is, just to say the thing, This is a very unpredictable market, and I think Shopify's superpower of agility really comes into play here. I actually mentioned something on the call that didn't really get picked up, but because you guys are interesting people, I'll share with you. We've been public now for almost 10 years to the day. We had our IPO May 21st, 2015. And if you look back on the last 39 cohorts of merchants that have come on, 38 out of 39 cohorts of merchants on Shopify have outperformed the greater e-commerce market. So one of the things I'm very, very proud of is that merchants on Shopify seem to be doing really, really well.

1:29:21But I'm excited to be on your show. I mean, this is - Yeah, thank you. Thank you for joining us. Long time in the making. I canceled mainstream media to do this. There we go. We are the mainstream now. We are the corporate-funded media. That has some connotations. I think this is better than mainstream because it's a lot more thoughtful. We want to be mainstream. Yeah, yeah, no, no, we love it. So, yeah, I mean, you talked about the tumultuous market. There's a lot of headlines at the same time. Stock market went way down. Stock markets kind of back up. What should people be reading into new business formations, just broader entrepreneurship trends and the data from Shopify about the health of the American entrepreneur?

1:29:57Yeah. I mean, look, let me talk about macro a little bit first. We were around in 2008. We were a tiny little company, but I spent almost a third of my life. Was it a snowboard shop originally? Well, we were a snowboard shop in 2004. Okay, four. But yeah, we started a snowboard shop. And then actually, when I was in law school, I don't know if you guys know this story, but when I was in law school, I was born in Canada, grew up in South Florida, ended up in college in Montreal at McGill. And then I went to law school in Ottawa, and I became one of the first merchants to use Shopify. Oh, cool. That's when I met Toby.

1:30:28But 2008 happened. And actually, one of the things we saw during the great financial crisis was that a lot of people turned to entrepreneurship either as a way to replace their job, their income, or as a way to supplement their income if they had reduced hours, if they were working at a restaurant or a retail shop. During the pandemic as well, we sort of saw that during the pandemic, all these physical retailers that some of them were laggards that had not really moved online yet began to move online this amazing clip. So in many ways, this is sort of, you know, Shopify kind of does well in these periods of uncertainty.

1:31:04But from our merchant perspective, we're not, you know, we're not seeing any changes in our merchants so far. Our data actually through April, so beyond just the quarter, but through April does not suggest any slowdown. It's still obviously fairly early to assess some of these impacts. But But I think from a consumer perspective, one of the things that also happens is in times of disruption, it does feel like consumers and retailers, they kind of lean into brands that they know and they trust. And you think about your favorite brands. I don't know for me, it's like Viore and Aloe Yoga and James Purse.

1:31:35All those brands are all on Shopify. So things have been really good for us. And I think that will continue. uh talk about uh i want you to talk about for a second the power of shop shop pay just because as a consumer i'm i'm probably uh a dau at this point it's truly truly i mean it's truly life-changing i i i wanna i would love to get your sense of kind of the in like what what is making shopify so dominant today i mean we talked to a lot of entrepreneurs and obviously like the core platform, but can you talk about how kind of the sort of like flywheel that, you know, ShopPay is kind of creating in the ecosystem?

1:32:19Yeah. I mean, ShopPay is really interesting for two reasons. One is historically we've really been a merchant facing product, merchant facing brand. So people kind of knew Shopify if you were a merchant, an entrepreneur, but for most people, like we were the brand behind the brand, you didn't really know us. And both the Shop app and more specifically to your point, ShopPay is really the first time that I think people are seeing the Shopify brand in the wild. And actually for the quarter, ShopPay facilitated like$22 billion of GMV. That was a 57 % year on year. If you look at the entirety of cumulative GMV, we launched ShopPay in 2017 and we've done about$225 billion on ShopPay so far.

1:32:59Part of it is that I think companies, I mean, Amazon has done a really good job of this actually. They've sort of reset consumer expectations for how commerce is done and i think for a lot of consumers because of that they want you know they want their products either shipped fast or they want it you know shipped cheap to them um or they want to be able to do one click checkout and so this idea of you know we are not obviously a retailer we're a platform but if you were to pretend for a moment that shopify was a single retailer we would be the second largest online retailer in america after Amazon.

1:33:31We have millions of stores. We're about 12 % market share in terms of all e-com in the US. I think Amazon somewhere in the 40s or something like that. So one of the things that we're able to do is even though everyone on Shopify is an individual merchant with independent business and independent brand, we're able to give them economies of scale as if they were the second largest retailer in America. And one of those obviously is ShopPay, but ShopPay has done incredibly well. And not just that, but we're also seeing that brands are now coming to Shopify specifically for ShopPay. So we have something called ShopPay Commerce Components, which allows merchants just to use ShopPay.

1:34:09And the way we kind of think about it is that if you're a big, you know, a coach is actually a good example of this, Kate Spade as well. If you're these brands that have, you know, your own platform, maybe you're using a legacy platform or you have your own homegrown system, you can actually use that component. And we sort of look at that as our way of starting a relationship with these very, very large brands. But ShopPay has been incredible. In terms of the flywheel question, if you think historically about how Shopify started 20 years ago, really the focus for us was just e-commerce for SMBs.

1:34:42And then some of those SMBs got really, really big. I mean, Gymshark got big. Viore got big. Fashion Nova got big. Bombas, Allbirds. These stores that started their mom's kitchen table became billion-dollar companies. And so one of the first changes was we sort of moved from just focusing only on SMBs to focusing on larger merchants as well. And especially those that sort of grew up on us. And that allowed established brands, Hunter Douglas, Mattel, On Running, that had their own systems to come and migrate entirely to Shopify. But the second thing that also happened was we began to think about, like, what is the future retail?

1:35:21Where is this thing going? And it became really obvious that the future retail was not just going to be this like false dichotomy of online versus offline. It's going to be retail everywhere. And that if you are going to be the entrepreneurship company, the retail operating system for the most important brands, you have to make it easy to sell on every surface area. And so we began to choose things like point of sale and B2B and, you know, embedding our checkout into places like Instagram and, you know, X and, you know, every social media platform. Obviously, YouTube is another one. We have an integration to Roblox now.

1:35:56So if you have a toy company on Shopify or a company where your consumer is spending time in Roblox, now you can actually transact directly in Roblox powered by Shopify. it so the way that we kind of think about it is more of like a bunch of these different you know channels where commerce happens ai shopping on you know ai shopping will likely be one of the yeah so that's an area that i that's an area i wanted to to get to next is um basically llms i think you guys have made some early meaningful moves here uh how how excited did you get about the intersection of shopping and llms as you started you know using some of these products just as a consumer right i think a lot of people just early on start using it maybe as an alternative to a google search and it was more for information it wasn't purchase driven and then we've had we even had an employee from from open ai on the show and he was like oh every time i want to buy a product now i just get a deep research even if it's for something like bathroom towels or something like that because he's like why wouldn't i want you know the equivalent of three hours of research on the the right product to buy yeah it it feels a little bit like where um social commerce sort of started where it starts with discovery doing research finding new brands you get to serve some like i don't know uh i think actually it's one of my favorite stores on shop is ember you guys oh yeah yeah i actually know the founder great company um he's he's on shop like please tell the founder that I'm incredibly, I use it every single day here in Montreal, my office.

1:37:29But, you know, we start with Discover. I think I was, I think I saw an ad or I saw some sort of reel for Ember a couple of years ago. It was like my coffee or my tea can stay warm longer. That sounds really good. But I didn't necessarily go to complete the purchase on Instagram. I then went to, you know, I went to probably Google, typed in Ember, found the website, went on, shopped by store and bought it. So I think sort of the trajectory of these new commerce channels starts with discovery and research first and then eventually migrates into like full on checkout. So I think this idea that more people are going to discover and shop on these AI tools, whether it's a wrapper or it's something like open AI or perplexity, I think that is an amazing thing.

1:38:10The way that we kind of think about it is anywhere where commerce is taking place, Shopify has the greatest product catalog in the world because we have the best stores in the world. We want to power those as well. So I'm not going to front run product roadmap, but you should expect to see Shopify merchants selling wherever their customers are. And if their customers are spending time on places, on AI tools and LL modeling models, you should expect that we'll be there as well. But what's really interesting, I think, about that is that it means that all these, like, what's a good example? Let me use Spotify, for example.

1:38:46It's a weird thing to say out loud, but like shopify has an integration for spotify why do we have most merchants don't have spotify artist profiles but if you're beyonce and you who owns sacred which is a great uh cosmetic company on shopify you have a huge artist profile it makes so much sense for you to also have an embedded store inside your artist profile in the same way that if you're jim if you're mr beast and you have a huge shopify store with feastables you should also sell directly on your youtube channel like right there, embedded checkout. So that's kind of how we think about the future of retail, that like, where are these surface areas, new or old, that transactions should be taking place that they're not?

1:39:28And then what we do is we go to these companies and say, look, let us help power that both discovery of great products, but also checkout, in some cases, even shop pay. Yep, that makes sense. I want to do a little bit of a deep dive on AI. It's such a big topic. I'd like to break it up and understand how is Shopify thinking about using AI tools internally as a company. And then I'd like to go through some of the different technologies from diffusion to text generation to agents on how the merchants can benefit from those. But maybe let's start with just culturally, what is the average Shopify employee using in their day to day now?

1:40:06Yeah. So I don't know if you've seen, you saw Toby's now leaked email, which at the time having it leaked, I wasn't sure. I mean, I think now actually there's probably more benefits to downside to it because it does, it feel, I feel like it's getting referenced a lot. And I think it also, I don't know, from an employee brand, employer brand perspective, it's kind of nice to know that like, that's how we think about things. Totally. But this idea of like, I think every technology company has AI, you know, they'll say that it's being utilized inside their company. I think there's a big difference between utilization and it being reflexive.

1:40:38And part of the reason why this email was really important was we want to make this reflexive. We want to push the boundaries of how our team thinks about it. So this idea that even a simple friction point that before you go and ask, hey, I want to add some headcount to my team. Okay, well, like substantiate why AI cannot do that. That small friction point may seem annoying, but actually what it really provides for is a much more reflexive process of like, you're right, I actually don't need this person, I can go do it then. We also built roughly about a dozen MCP servers that make pretty much every corner of Shopify's work legible.

1:41:18So now everyone can now find out about kind of everything else happening in the company. I'll give you the best example because I'm in kind of an earnings mode right now. Our earnings day was today, as you guys know, which is why I'm here. I often will go to different teams and different product leaders or technology leaders and say, hey, I want to talk more about, you know, I don't know, B2B in Europe. And they'll be like, okay, well, here's what's going on. And they'll give me, you know, they'll give me the brief. Whereas I felt for this particular earning cycle relative to previous ones, again, we've had 40 now or 39, so we have 40 coming up.

1:41:49I didn't have to do the nearly as much. I was able to go into the vault, which is sort of our internal wiki. And I was able to pull far more information on my own, even to the extent that I can see at what stage different projects are at. So I think that is making company operations legible, I think is, I don't know, to me, that's like the gold standard. It means that I'm not bothering anyone. I also, you know, if I'm working at six o 'clock in the morning and like I need to get this one thing on B2B, I don't need to wait till someone is at their, on Slack to ask them. I can just figure it out on my own.

1:42:23And I think the other piece of it that I think is is on the developer side, which maybe is less, maybe it's more obvious, but we actually launch MCP server for what we call dev assistance. So effectively it allows developers to like use cursor chat, windsurf, uh, claw desktop in a very, in a very simple way. It's just part of their daily workflow. So that's part of it. The other part of it maybe is less sexy, but it's on the support side. Um, we think about like our support organization, how they deal with these millions of merchants, how they work with our merchants. In many cases, there's two types of conversations.

1:42:59One conversation is really more like, like more of a low quality conversation, things like configuration of a domain name, you know, like username and password, picking a theme, or how do I pick a theme? Then there's like high quality conversations, which almost looks like more like business coaching. And that's like, hey, I'm noticing that I'm getting traffic from Pinterest. What should I do next? Well, you should activate the Pinterest channel, or I'm not getting any sales at all. What should I do? Or this theme, I'm not able to configure it properly. Maybe I have the wrong theme. So one of the other things we're able to do is by giving our support organization a lot more of these tools, now they're able to just simply focus more on these high quality conversations versus low quality conversations.

1:43:40And it just means that when you're speaking to, if you're speaking to a human at Shopify, we're able to ensure that you're having high quality conversations and you're not taking up time from them because you're you know you need a pass password reset so what i'm hearing is like barely using ai at all it seems like you've stopped it ever yeah it's like we're using three different coding agents we have agents everywhere well i like that i like the i like how deep you guys are going because we've seen we've seen other kind of like leaks which is clearly just a ceo wanting to signal it's purely purely pr you should map that against again this This is why it's fun to go on this show.

1:44:18It's something I can't talk to. Okay, you should map that against technical founder-led companies. Because I bet you, you know, I bet you, you know, like a dinner somewhere that if you map that, you will see that generally technical founder-led companies at scale, so it's not that many of them. Yeah, yeah. You won't hear these sort of, you know, superficial kind of statements. You will see actual building. And, you know, I mean, Toby's our CEO and Mikhail from Microsoft is our CTO. There's no room for that superficiality at Shopify. It is like, this is the way to go. And there's a whole topic about this sort of era of founder-led companies at scale, which I think is like the best era ever.

1:44:59The other thing, it just means very different. If it's coming from a founder-led technical CEO, if they're saying we need to be AI native, that means we're going to leverage AI and actually use it to develop workflows and processes and all these things. and then the other side is we're going to be AI native means we're going to buy a hundred million dollars of AI tool pilots yeah six months it's like very different a lot of decks from McKinsey yeah you guys were at the uh Figma conference right yesterday yeah right so like I mean I've known Dylan for a while like like you know like there's a group of people like Dylan and Toby and Patrick and Zuck like they're just operating at a different level totally yeah and And the fact that we're in an era now where these incredible people, these incredible leaders can lead over a long period of time.

1:45:46Because that wasn't the case. Go back 20 years ago. You didn't see that. No, it was we need the gray hairs in. That's right. And even the fact that they called the gray hairs or adult supervision was almost pejorative. Yeah, totally. This is a better era with better run companies. And there's no better person on the planet to run Shopify than Toby. Just on the AI, just before we get off the AI, one thing I do want to say also on the merchant side. Yeah. One thing that I think people miss is like, yeah, like all these great tools that all of our companies are building. You know, I saw some of the stuff that Figma rolled out yesterday around, you know, like effectively, you know, you can fire your agency because Figma can, ironically, there's all these agencies in the room probably thinking like our like unique value proposition is now going to be somewhat disrupted by the stuff that I'm watching on at the keynote.

1:46:31But it's actually small businesses that I think actually will benefit far more from a lot of this tooling. Yeah, big business can as well. This is a bit of an aside, but I'm not a sports guy, but on weekends I have this small podcast called Big Shot. I'm creating an archive of the greatest Jewish entrepreneurs of the last 50 years. So people like Izzy Sharp who created the Four Seasons and Linda Resnick who created Fiji Water. I just did Bobby Kotick and Michael Milken. But I interviewed this guy, Mickey Drexler, a couple weeks ago. And Mickey Drexler is about as close as you get to retail royalty.

1:47:06He ran the Gap. He was CEO of The Gap for 20 years on the board of Apple. He created Old Navy. He quasi-created J.Crew, at least made J.Crew what it is, which was a household brand. But he talked about in the old days of The Gap, sort of the heyday of The Gap in San Francisco, they have hundreds of people doing merchandising, product photography, product descriptions, layouts. And as he's sort of saying this to me, I didn't want to obviously say this to him on the podcast, but I can say it here. I was like, Mickey, like today, like literally like the thing you get from Shopify for$39 for free with all Shopify magic can do a better job of your 300 people at the Gap.

1:47:46And I think actually like people talk about this term like democratization of entrepreneurship and love in the playing field. It's all just these like random platitudes. But actually what we're talking about here is that very thing, that 20 years ago, a team of 300 people were able to produce merchandising results that today for$39 a month on Shopify, you get for free. You get included in your subscription. And I think when you think about product descriptions and product, that's part of it. But even things like, you know, like we have something called Shopify Inbox or email marketing tool. like the idea of automatic like automatic responses to every customer you have with highly contextualized replies you used to have a team that would do that and if you were a big company you had a team if you were a small business you did not or even even downstream even downstream of that though right before somebody's signing up for shopify you know a lot of them need to get uh some type of entity right to like you know how's their business and before now that somebody that doesn't have any business expertise can go and even asking a simple question like, should I set up an LLC or a C Corp, right?

1:48:52Which is like a classic thing. A lot of people botch it. And it is insane for a lot of, if somebody is getting on their entrepreneurial journey and they're going and you should get advice on it. It's not even that complicated of advice, right? A lawyer is just going to regurgitate, well, like, here's the benefits of this and like here's the benefits of that and like given where you want to take the business maybe you should use this and the fact that you can now get that advice like contextualized for free from an llm and yeah in many ways you shouldn't get legal advice from an llm it might hallucinate but for a decision like that it's certainly better than just guessing and then the other stuff that i'm the other stuff i'm excited about is you know specifically i can imagine a world in the future where an entrepreneur makes a product and the product's like you know maybe it's a physical product and it's slow to change something like that maybe you're making it overseas you're making it here but it's a slow process but i can imagine a world in the future where shopify lets you generate an entirely new kind of brand web world around that product and you might see conversion rate go up by 15 for something like that for like a one-time action and in that world it's like the incremental benefit of like a change that could happen almost instantly is insane.

1:50:03So I think the implications of shopping in LLMs is exciting, but at the actual business level, the impact of Gen AI, I just think is really underpriced right now. I also think one of the things that is missing is a little bit like this, like we sort of think about our AI tools as very practical, like goal oriented, meaning like how they operate their business. Rather than simply just rolling at random sort of features, like what actually is this going to do? Is this particular tool going to help them pick a better theme? Well, great, but why? Like, what does that even matter? Well, a better theme may mean better navigation, maybe higher checkout rates, maybe more customers end up buying.

1:50:43And when you sort of think about that in contrast to, you know, the cost of failure in entrepreneurship now is about as low as it's ever been in the history of the world, truly. I mean, you think about like Ben Francis creating Gymshark, I think he's the youngest billionaire ever in UK history. The fact that he was able to create this thing from his college dorm room and turned this into a multi-billion dollar company, and he himself is now a billionaire, the prerequisite for that type of journey years ago would have been capital. It's not anymore. The other thing is if he failed, it didn't really matter because he wasn't leveraging his house and taking out loans and stuff.

1:51:18So when you layer on all these new pieces of technology plus this idea that the cost of failure is treading so close to zero, what you end up with is more people trying their hand in entrepreneurship. And that's obviously good for Shopify, but it's also just, it's a great, I mean, look what you guys have done, right? What you've built. You've built a modern media, you know, giants out of sheer will and hustle and incredible insights around what's wrong with traditional media. Having more of these things, I think actually makes everything better. Yeah. 100%. How do you think about messaging to the Shopify developer ecosystem.

1:51:57I can imagine LLMs could write new liquid templates. You can generate text. You can generate images. There's agentic workflows. There's so many things that could be the domain of plugins. You want to message that to create a really, really vibrant plugin ecosystem. But also there's certain things that you want to do internally because you have a unique position or advantage there. Is it just about communication? How do you think about that trade-off and keeping everyone happy while you know you're responsible to customers shareholders and the developer community well look um it's the uh i think it's called the bill gates line like a real platform is when you create more value for others and you capture for yourself and that obviously is the case for us for for our our merchants but also for for our developers and we there's currently 16 000 apps in the shopify app store in 2024 we paid it a billion dollars uh with a b uh in rev share so So a huge part of Shopify success is our developer ecosystem.

1:52:55So that's the first thing. The second thing, though, is that I think communication is part of it. Frankly, I think communication is often just a proxy for trust, a lack thereof, or the trust battery. When you say there's been a lack of communication issue, it's obviously a trust issue. We've been really clear with the developer community for the last 15 years or so that, okay, here's what you can expect. Shopify's core offering thing we build ourselves will be what for most people need most of the time on the platform and that that definition that philosophy is dynamic meaning it's going to change so years ago 2012 there were apps in the app store that would take your desktop Shopify store and make it mobile optimized it was like I don't know how many there's probably five of them maybe more at some point it was obvious that okay this is not like this is something that Shopify's core offering should do because this is what like most merchants most of the time need and will expect that they're paying us to do.

1:53:54Like, how would you, like, how are you even thinking about building a desktop store or a web-based browser store on a desktop that's not mobile optimized? So eventually we basically went to those developers and said, Hey, look, this is something we're going to do, but here's, here are sort of the bounds. Here are the limits of what we're doing. You can build everything beyond that. And you can look at companies, for example, like Klaviyo. We have Shopify email. Klaviyo has built you know andrew ab has built a multi a billion dollar company um on shopify which is now publicly traded doing email marketing because we're just clear about here's the bounds of what shopify email will do beyond that we're not going to touch same you can continue to roll that across pretty much every product category so one is to your point good communication but the other point is like we have you know we have 15 years of of reps of building with this community to the extent that now if you are building an app or a piece of a product for the commerce and retail space, Shopify's app store and our APIs are probably the best go-to-market way to get access to millions of businesses.

1:54:57And that trust relationship, that ecosystem of reciprocity is not something that we take. It's actually the first thing I did when I got to Shopify 16 years ago is help to build that ecosystem. And we cherish it. But we're also very clear of what's coming and what's not. 16 years. We love an overnight success on this show. Thank you so much for joining us. I have so many more questions. We can talk for another hour, but we'll have to have you back. We'll have you back next quarter. I'd like to come back. One day I'd like to be a co-host and we can bring some Shopify merchants. Absolutely. Let's do it.

1:55:29Let's do it. Let's do a Shopify day. We'll get Jim's show. 12-hour stream back to back. Let's do it. You know what? We can do something. We can do BFCM, like Black Friday, Cyber Monday. Here we go. Yeah, pull the data off. We did$11.5 billion in four days. We can actually stream and then bring different merchants on to say, that'd be fantastic. Tell us what's happening. QVC mode. Let's turn TBPN into QVC on. I'm excited for that. You guys are already going for the affiliate model. It always happens. Yeah, it's great. Well, thank you so much. Great talking, Harley. We'll talk to you soon. We're going to bring in Jack Altman.

1:55:59But first, let me tell you about GetBezel.com. Your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. I noticed Harley wasn't wearing a watch. We got to send him to bezel, get him a hitter. An absolute hitter. Or just send him one. Yeah, just send him one to commemorate 16 years in the game. He needs - 225 billion on shop. pay. I love the scale. You should always invest 1 % of your AUM or 0.1 % of your GMV into your watch for sure. Exactly. Let people know. It's only right. Anyway, we got Jack Altman coming in the studio. Welcome to the show, Jack. Welcome to the stream, Jack.

1:56:35How you doing? What's up, guys? Very happy to be here. Thanks so much for joining. Yeah, I hope you can hear the soundboard because George is having a lot of fun with it. Anyway, what's the latest with you? Would you mind introducing yourself a little bit for the stream? Yeah. I'm Jack. I'm a longtime listener of your show. You guys are doing amazing. Thank you. I've been waiting for somebody to do something like this and you guys are just crushing it. Fantastic. Thank you. Your chyron right now says rival podcaster squashes beef because yesterday you tweeted that you can either be collaborative or competitive.

1:57:11And just to be clear, we see this as direct competition. And so you're on. That's how I feel. This is not a collaboration. I'm super angry every time I see you guys. Exactly. Every time I see you pop up with another cinematic interview, I'm like, I love how strong you've come out specifically where it seems like the average net worth of an alternate guest is like$2 billion, something like that. Absolute hitters. No, it's great to have you on. So yeah, I mean, obviously the podcast is something that you're working on, but also you're running this fund. Tell me about the fund, how to come together.

1:57:45What are you excited to invest in? Do you have any bounds on it? Or is it just anything that interests you on the day-to-day basis? Yes. I've been doing the fund for like 15 months. I had been doing a lot of investing before I was running Lattice, which I started in 2015 up through the beginning of last year. And I did a bunch of angel investing. I did some institutional investing. I sort of fell in love with it, realized it was what I wanted to do, and then started this fund 15 months ago. It's like an early stage, pretty generalist fund. So it's$150 million fund. What you see in series A, we're like pretty concentrated and there's no technical bounds on it, but we've mostly been doing like B2B, a little bit of hard tech, just kind of trying to do stuff that we either know or think can be hugely impactful to the future.

1:58:28Are you worried about your brother poaching your best CEOs? I mean, he hired Fiji Simo. He hired Kevin Weil from Planet Labs. He seems to be hoovering up entrepreneurial talent. It's unbelievable. That was an incredible get. I mean, Fiji is - Incredible, right? I mean, it's amazing. Yeah, it's really, really good. So yeah, probably that'd be a good outcome. Amazing. Well, what else are you taking away from the current AI market? We've been talking to a lot of folks about this like don't build a wrapper meme. Now, Windsurf is going into OpenAI and it seems like it might be a best time, better time than ever to build in the application layer.

1:59:03Is it too late or what are you seeing that's exciting you on kind of the AI front since most of the, it seems like most of the foundation models have left the harbor, but there's still obviously a ton of opportunity. Yeah. I mean, first caveat is like, what do I know? But I've always thought that like the wrapper thing is like a bit of like, you know, it's a slightly cheaper market to me. I think like most companies are always built on the shoulders of technology that came before. There's a bunch of stuff to do with the underlying intelligence, just like there was stuff to do with like cloud infrastructure.

1:59:36So I don't think of it that way. I think there are probably cases where you're flying close to the sun in a way where like what you do is just going to be obviated by like the, you know, sort of big labs directly. But I think in a lot of these cases, like the difference between a thin wrapper and then something that becomes like a specialized workflow, I think, you know, there's a real gap there. And so I'm much more in the camp of like thousands of blooming flowers and the underlying intelligence is going to create a bunch of specialized things that like open ai is not going to go do everything and so i think you have to be thoughtful about it as a founder but i don't i've never thought the thin wrapper thing is you know it it's it's a concept that is worth knowing but it doesn't like discredit the whole idea of application software switching gears slightly how do you think about opportunities to build companies in categories that that are established but potentially stale and I want to bring up an example which is fill out I I we recently used fill out which is a portfolio company of yours yep and when I used the product I was so relieved to be using a form product that was beautiful easy to use and uh I looked back at their founding date which was in uh 2022 right not not very long ago right and I think that most of the time, I think a lot of VCs would sort of look at a category like that.

2:01:05Maybe they get a pitch and they're just thinking like, okay, forms, like we've had these for, you know, forever now. There's Typeform and Google Forms and all these different players. How did you kind of, how do you underwrite opportunities where it's clearly a big, you know, market, but it feels like, you know there's no obvious why now other than in my view typically it's like a super talented team that's just committed to like craft and just building this exceptional product yeah totally and so i guess maybe two answers to that first is you know i think you can always bet on giro like giro dreams of sushi style approaches where really great teams are building important products that a lot of people need, even without a why now, I always believe that you can bet on teams, particularly at the early stages.

2:01:55And like that, that can work out. But I actually think that there is for this particular example, and then I can share a couple others, I think there is potential for there to be a really important why now around AI, which is, and they just released this new product called Zite, which is like still in beta, but basically you can take all of this user data, and then you can build things around it. And so now they have also like an application builder. And so you can release these forms, you can like get all this data in a seamless way, but then that can become like the baseline for a bunch of internal applications or other things that you'd want to do with that, with that user data.

2:02:30And so to me, I think a lot of times, particularly when you're betting behind great teams, there's a lot of adjacencies that come up over time and great teams figure those out and like find the next thing. but to me you know it looked you know you it's a big enough market that for me betting on a great team always is is a is a good thing to do you should and has anyone else coined the the giro method because like super superhuman is like another example of like giro in many ways where it's like email everybody was like this is a finished market everybody has an email product most of them are free and then you just come in with sort of like craft and there's there's an entire list of you know really successful companies I mean yeah I mean yeah just speaking of like talented teams are where are you seeing new pockets of kind of young talent emerge there used to be like the Stanford industrial complex now it feels like you go to Stanford you just walk onto Sand Hill Road you get a term sheet then there was like the Waterloo we've talked to Sequoia partners who are pulling people from Talpio now in Israel where where are you seeing interesting groups of entrepreneurial talent emerge these days?

2:03:37I mean, there's a lot of good pockets. And also now as a bunch of these companies start to, I mean, there's obvious ones, like you could talk about like an open AI or something like that, or of course, like previously, yeah, stripe, of course. I mean, I think Palantir has some incredible talent. I think outside of AI, one of the most interesting to me areas is like hard tech defense. There's a lot more appetite for people to fund harder problems. Like I had Sean McGuire on our podcast and he's talking a ton about like why that matters so much. And I think people who have seen those kinds of companies, someone who's been at a Palantir or an Anduril or a SpaceX, I think those are really interesting pockets for that.

2:04:15So I think there's a lot of these companies now that have gotten to such scale so quickly that you have people who have seen what greatness looks like from the inside. And I think, like, I always think there's like more ways to fail than there are to really succeed. And so people who have seen a big success, I think those create obvious pockets. So there's a bunch. Yeah. Have you felt any of the squeeze from the mega funds and the crossover funds kind of pushing downwards? We talked to Sam Lesson at Slow about this, where you get the hedge funds cross over into growth and the growth funds cross over to venture.

2:04:47The venture guys are like, yeah, I can do a seed check. It doesn't really matter. And then the seed guys are doing the angel stuff and at each stage, they take the previous round less seriously because it's free money for them. And it, but it puts pressure on the people where that's my business. What's your experience been? So here's my perspective in 2021 in Zerp, the, the, the big funds at the latest stages, which I was a customer of were the crossovers. And it was dominated at that point by all of these crossover funds coming into venture with humongous amounts of money, but they were like always going to leave, you know, like that group was always going to come and go.

2:05:23That's just, they weren't designed for it. now you have really smart money doing really big funds there are like brilliant managers there's like josh at thrive there's obviously founders fund is exceptional like there's just like really good groups out there with large funds and this group is not going to go away and they do have different incentives at the early stage and they're you know extremely clever about how they're positioning themselves and you know they're they're they're making very intelligent moves And that does include in many cases coming down to seed. And like you said, they don't need to make the same economic decisions at a seed as a$50 million seed fund.

2:06:02Cause they don't have to make most of their money from the seeds. So the rules of the game do change. And I think it has a huge impact. Well, your reaction, your reaction to that I imagine is take much more concentrated positions, but, and use that as a lever. I imagine with the entrepreneur to be like, I'm going to put a meaningful amount of my fund into you. And I'm going to, you know, this is not like, doesn't in a$150 million fund, if you're participating in any seed or aid today, it's not a flyer for you with the kind of concentration that you have. How much has that resonated with entrepreneurs on their side, knowing that, yeah, Jack's not just kind of tossing a check in and maybe he'll respond to every third investor update.

2:06:46You're like going to do everything in your power to help the company win. The way I think about this is in order to do well in any competitive environment, you basically just have to have like an incredible amount of self-awareness and know what you are, what you're not, what things you can provide, what things you can't provide. There are a lot of shapes where I couldn't look somebody in the eye and say it makes more sense to do a deal that makes sense for me than a deal that's going to make sense for another firm. And by the way, there's like, you think about the things that a VC can provide to a founder, not all of them require blood, sweat, and tears.

2:07:21Having a great brand and then not doing anything else might be a lot more valuable to a founder than having no brand and doing a lot. It just like depends on the situation. And so I think, I don't think that there is like a tweet length answer to sort of figuring out where you can play and what situations you look at. You have to look at each of these differently. And then you have to find the situations where what you can offer and what you think can be meaningful to you as a fund manager matches what's going to be valuable to the founder. And like good deals happen when it's an actually correct transaction for both sides.

2:07:56So that's how I think about it, which is a bit of like a it depends kind of answer, but I think it's the truth. Can you talk about your personal AI stack? What are you daily driving? what has been helpful in your job, either with the show or with the fund, you know, deep research, there's all these different tools. And I think everyone's always interested to know, like how people are getting the most out of the tools that are available. I feel like everyone feels like, like I'm not doing enough with AI. Like I know it's powerful, but I just need to know that one secret prompt or something. But what do you use these days?

2:08:28I think I could use it more, but I mean, I've moved most of my searching to ChatGPT. And I like, instead of texting, like my group of friends, sometimes I'll just like say the same question to like chat GPT. And so I kind of am like, this is like an always on friend that I can like ask stuff to. Um, and I'm like, my usage just kind of goes up over time now. Um, I think I don't consume like that many software products for it. Um, so that's also, you know, the nature of what I'm doing. I think like the companies that I'm investing in are consuming a lot of AI, but I think it depends on the area.

2:09:04Like I will say that outside of maybe we can talk about companies specifically, but like outside of prompting, there are certain specific domains where it's proven to be incredibly valuable and there's some where it's not there yet. And so like I don't think it's working in every category yet. Yeah, totally. You invested in Rogo, which recently announced a pretty big up round. uh have you have have you seen any products like that in applied more specifically to venture i mean i'm sure you could potentially leverage what they're doing but venture is such a small you know market in comparison to potentially kind of rogo's core market maybe it's not and for reference rogo is uh analyst your ai for finance professionals so if you're working at a hedge fund or tiger global, you know?

2:09:58Yeah, this to me is a, I think there is a market, but, um, it's easy to forget in San Francisco, what little fish we are compared to like New York and like real finance and hedge funds and private equity and the big banks. And the numbers are like super different. Um, and you know, for all of the talk, which I think is accurate talk about how there's too many dollars in venture, it's like still kind of pales in comparison. So the total spend, you know, you look at things like, you know, a Bloomberg or something like that. Like there's not an equivalently big business to Bloomberg for venture. And I don't think that's because the products aren't useful.

2:10:34It's because like the market is a lot smaller, in my opinion. How do you think about the difference between going after these, like the Mag 7 companies that maybe have lost a step? We're seeing little cracks start to show, whether it's Apple Intelligence or the co-pilot rollout, versus taking AI into these niche markets that haven't even maybe seen the SaaS transformation yet. And maybe AI is the one that unlocks it. Is there one area that excites you more? How do you think about each one? Is there a certain type of founder that needs to kind of fit with a specific market? How do you think about those different areas?

2:11:15I think for the most part, it's a lot easier to take on the niches, which are still not so niche. Some of these niches that we're going after, what we're talking about in application companies, the leading company in the niche is$10 or$20 or$40 billion. It might not be$2 trillion, but they're big niches. But I think there's two reasons. One, I think it's much easier to just win a small market and expand from there. That's like a Peter Thiel point is monopolize something expand and that's much easier to do in small, less competitive markets than going up against Amazon or something like that. The other reason is what I've seen a lot of is companies are able to crack old industries with AI in a way that hasn't happened in the last software wave.

2:12:02And so you're seeing in education and healthcare and legal and accounting and like finance and all these places where they were kind of hesitant before are suddenly buying things without even knowing for sure what it is. They just know that they want to buy AI. And that's like a completely new paradigm. And it's not even, you know, that's professional services I just mentioned, but you could even go to restaurants or, you know, like home services companies or, you know, mom and pop accounting and you're like leapfrogging and you show them AI and it's much easier to use than last generation of software.

2:12:38And so the value that they're getting is actually much steeper relative to what stack they were on than a tech company. Yeah, the examples you gave, it seems like there's obviously huge opportunity to go after those small markets, whether it's mom and pop accounting firms or home services, any of those markets with essentially a SaaS product. There's also been a recent boom in folks in venture crossing over into kind of the private equity roll-up strategy. Have you looked at any of those deals? Are you cautiously optimistic? There's some people that have been saying like, every time venture steps into that, it can't go well.

2:13:16But what is your take? The fund's probably not really set up for that, but you could probably participate in some way. Yeah. I think all of that is right. Well, I'm directionally optimistic about it. And like you said, we're not an appropriate size for that to be the right strategy. But I think it's a very good idea. I mean, like the sort of, you know, one, one lens on this is at some point, it is too hard to sell, you know, a great product into an industry that doesn't want to receive it. And so just become that industry and then receive this great product. The other lens is if it's so valuable, why are you going to give that away?

2:13:54I think that's a point that like Keith Ravoy has made before is like, if you've got this thing that's transformative for an accounting firm or a law firm or whatever, why should you sell them some software for 200K that they're gonna go make$100 million off of? Like, is that the right part of this? Yeah, just get 100 times more customers. Yeah, exactly. No, that makes no sense. Do you think the jobs finished with the founder-friendly meme in venture? It was controversial 20 years ago, but now it feels like it's baked into most venture brands and it seems like it's more real than ever. I talked to founders that are set up from day one with super voting and seven board seats and stuff.

2:14:36Is that still an issue in VC or is it still a differentiator for venture brands as new managers build their firms? I think it is here to stay. I think it is basically, it is table stakes and at least positioning. And then I think it's maybe more than table stakes in actuality. And I think people can sort of like go through and do the real work to see who's positioning it versus who's really doing it. I think in most cases, it's the right thing to do, by the way. So I think the like industry converged to the right place where most of the time it's the right thing, but I guess a new thought. So I'm not positive if this is right, but it feels on some level, like, Like over time, it is becoming a better, like it's a better and better proposition to be a founder as like the decades go on.

2:15:31And sort of the margin in this whole ecosystem has kind of probably moved from LPs to GPs to founders, where like I think that is the directional flow of where like extra sort of leverage is moving. And so I think that's probably just going to continue rather than recede. Do you think any of that's due to the work of Y Combinator? I've often thought of YC almost as like a union for founders in the sense that like, if you're a VC and you screw over one YC founder, then it goes out to the entire network and you maybe lose access to the entire community potentially. Is that a reasonable narrative or is it more like just the writing and the memes of all the folks in tech broadly?

2:16:14No, I think it is reasonable. I think there's probably a constellation of inputs. And I think that's probably a big one. And I don't underweight how important YC's footprint is. And it's so founder friendly, and it's so dominant that going against that is hugely expensive. I also just think that there's, there's an extent to which everything about tech has become public. And like to a, to a crazy degree, we know all the, you know, we know all these stories and the ins and outs, and people have a good feel for how hard it is to be a founder. And I think even on that note, it's like, you know, all of the, you know, in the story, in the narrative of who do you want to win between the founder or the VC, it's like, obvious.

2:16:56And so, you know, I think even that kind of thing, it's just like, that's rightly the champion. And, you know, having gone through it, I'm like, it's like, in order, like part of what makes this whole industry work, is that there's so much respect and support for founders, because it is so hard. And so I actually think part of why Silicon Valley works is because the whole industry supports people in a way that otherwise, you don't sort of get that. And I think that is actually critical. Where do you go to get perspective and get out of the bubble? If you walk outside of your house, you see billboards for companies that you've invested in or competing portfolio companies, or you run into another, and then you go to Thanksgiving and that doesn't work either.

2:17:46I'm curious how you try to break out of the bubble and get perspective on our industry and the work that you do. It's a problem. I'm steeped in it. And like all my best friends are also in tech. And so I don't have a lot. But the obvious thing I have is like my family, like I have three kids, my wife's in medicine. And so I do have that in a huge way. And I think that that's, that's, that's the only reprieve, but it's enough, I think. Can you talk about lessons from lattice uh how did you kind of grow as an executive what and a founder what skills did you pick up and um what did you develop like kind of i don't know like top tier talents in well i think you know some of this point i was just making about how like it's good that the industry supports founders so much because it's so hard yeah which is true like the flip side of it is that i think like one of the things that is um that you just like can't believe till you do it is like how much you get to grow as a person being a founder and just getting constantly just like bashed every day for years by a million things.

2:18:56It's like the things from the early days that stress you out. It's like that you still are equally stressed the whole way through. It's just like the two by fours that hit you have like gotten stronger. And so the little stuff doesn't get you as much. And so I think there's a lot of that growth that happens. But I think, you know, one of the criticisms of consultants, which is the far other end of the spectrum from being a founder, is when you're a consultant, you are not actually, you're not tethered to the results of your recommendations. You are, you know, the criticism is you're fully dissociated.

2:19:33You make a recommendation, you get paid, you're out. Who cares what happens five years later, you're like long gone. versus as a founder, every decision you make, you're living with forever and you're just completely connected to it. And so I do think that that experience of everything I, everything I do is like making the bed for, you know, years to come. I think that creates a, that creates like a sense of autonomy, personal responsibility. Everything's my fault. Like all of those kinds of characteristics, I think are things that you build and then you never let go of. And I think this is a big part of why people like love hiring other founders.

2:20:08Like, you know, so many founders I talk to are constantly trying to recruit other founders to join their company because they have that DNA that gets built into them that just like doesn't go away. So I think that's, that's the biggest thing that's like, you know, an intangible. What do you have to say to a pro natalist in tech that don't have kids? You've got three, you're you've crossed the, the, the replacement rate. We always, we always joke the Palmer lucky number. He wants everyone to have 2.1 kids at least. It's the best. I love, I mean, honestly, it's like, you know, with all this stuff, with so much of tech stuff, it's so easy to get lost in like the sauce of, you know, deals and new markets and AI is going crazy.

2:20:51And it's all just, it's all, it's all awesome, but it is so far from the most important thing. And like, you know, the, you know, the, the, the most important things in life for relationships and like kids are the best relationship you ever get to have. And so it's like a really awesome, special thing. And so, yeah, I'm like, you know, there's, there's trade off to everything, but it's been the best. Yeah. I have one last question. We'll let you go. Um, I want to know, uh, yeah, I mean, you mentioned that idea of like founders hiring other founders and there's a bit of a debate in Silicon Valley, I think broadly about, you know, first job out of college.

2:21:28Should you try and go work for a, uh, a really successful scale up series B, product market fit company, go work with the best founders beyond that hyper growth trajectory, experience growth, feel it, and then go start your company versus, hey, you know, some people see YC now is like a summer internship almost like, oh yeah, I'll go, maybe I'll drop out, maybe I'll go raise a little bit of money, try something, have one startup under my belt, and then go do the next thing. How do you counsel kind of the next generation between not necessarily like there's a one size fits all answer, but how do they know which one's right for them?

2:22:06For me, I, so I, I worked at a startup before doing Lattice and I was there for a couple of years and it grew a ton. And that was really helpful to me because like, when you start a company, there's like 30 things you have to like be reasonably good at, which is ridiculous. And at least you learned like 14 of them by like working in a fast growing startup. So you only got to learn 16, you know, it's like, it's that kind of thing. And it does help a lot, but you know, there's a lot of great examples we could name of people who just went right from college to building iconic companies and in fact the very most iconic companies were built by people who dropped out of college or did it right out of college and so it's like you know your mileage may vary and i don't think that there's like one story and it's easy to over rotate i think yeah um for most people getting experience helps not hurts and it's not like by the time you're 26 instead of 21 you're too old to do it.

2:22:56But you know, there's a lot of great people who have not needed it. And so yeah, it's kind of like the that that quote, Mozart didn't go around asking people how to write symphonies, like the folks who are destined to go start power law companies and they're in their teens, you can't stop them. Right. But but if you're asking yourself the question, maybe, you know, you should go build up the skills first. Anyway, this has been fantastic. Thank you so much for stopping. Yeah, we'll talk to you soon. Bye. Cheers, Jack. Have a great rest of your day. And in the meantime, let's tell you about Wander.

2:23:29Go to wander.com. Find your happy place. Find your happy place. Book a Wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, and 24-7 concierge service. It's a vacation home, but better. It's better than a vacation home. Vacation homes are on notice. We are having John Andrew, the founder, CEO of Wander, on the show very soon. Finally, long overdue. It's been grinding. They've been putting up crazy numbers, as everyone knows, adding multiple homes a day, it seems, to the platform, which is just wild. But very excited for that. Congrats to Wander. They're growing super fast.

2:24:06Growing so fast that stuff's leaking. And surprise guest, by the way. We're adding a new American Pope. And we are going to be adding Alex from Hollow to 1.30. I've been meaning to invite him. I'm really glad we got him on. At 1.30, so the timing is good. I'd shout out to Catherine Boyle for suggesting that. That's fantastic. And right now we have David Haber from Andreessen Horowitz coming into the studio. I believe he was at Goldman Sachs previously. Where he was the head of firm wide strategy, which I always thought was an interesting description because it feels like the CEO would be the one to do the firm wide strategy.

2:24:49but I'm excited to talk to him about his career and then what he's doing at Andreessen. So welcome to the show, David. How are you doing? Boom. Great to be here. Big fan of the show. Thanks for having me. Thanks so much. Wonderful background. Look at that. Thank you. I was channeling the army earlier and, you know, Captain Boyle, you know, on the other day. So it's fantastic. That's fantastic. Yeah, it's awesome. Yeah. I mean, I'd love to start with just kind of like your background introduction and kind of how you, your path to Andreessen, because I've been following you for like over a decade on twitter and i think this is the first time we ever met in person or you had to be you had to be in one of my first hundred followers for sure back when i was in college for sure like this is this guy looks like a chat let's throw him a follow sell chat i guess um no yeah it's been it's been circuitous i um let's see i well i studied biochemistry as an undergrad so i actually thought i was going to be a doctor um uh worked for a super successful serial entrepreneur out of school, a guy named Rory Riggs, who had started a bunch of biotech companies, ran a railroad and started a giant private equity firm called Royalty Pharma, which we can get into.

2:25:56It's a fascinating business. And then I joined Spark actually back in 2011 up in Boston. Essentially, it's like the one non-GP at the firm. I was like a 23-year-old analyst associate. And it was an amazing experience. We were investing out of Fund 3 at the time. The firm had already been pretty successful at that point. They had seeded Tumblr and put a bunch of money into Twitter when there were 10 people. We wrote the first check in Oculus when I was there. Wow. So great pickers. It's kind of where I learned, I would say, the craft adventure. I ended up going deep into fintech at the time and in some ways getting lucky.

2:26:35I helped source and seed Plaid back in 2013 and a bunch of other companies when I was there. I always thought of myself more as a founder than an investor. And so I ended up leaving and starting a fintech company in 2013 called Bond Street with a good friend of mine named Peyton Sherwood, who had been running engineering at Venmo. They ended up getting acquired by Braintree and PayPal in 2013. I pulled him out to go start that business, which was in the small business lending space, which was challenging. But we built a great team, which is what I'm most proud of and ended up selling business to Goldman.

2:27:10And that's kind of how I ended up joining the firm. We came in kind of through the side door. Yeah. You know, and got merged ultimately to what became Marcus, which was their consumer business. Oh, that's right. You know, Peyton ended up inheriting, he had a real job. He had like 70 engineers to manage. I had a more amorphous. Off the org chart. Yeah. I remember when I was following you, it said firm-wide strategy. And that sounds like something that would normally be like the CEO's job. So can you actually explain like, that sounds extremely important for a strategy at Goldman. But yeah, I mean, what decisions were you making?

2:27:46What was the culture like at Goldman back then? It was fascinating. I thought I was going to go there candidly and get like suffocated and micromanaged because that's what my friends did, you know, 10 years before in banking. And, you know, fortunately, that wasn't my experience. I think in part because, you know, I had no fear. We need this DCF yesterday. We're not working on Sundays. That's good. And, you know, I, yeah, I just started firing off emails when I got there, honestly, to like, you know, Marty Chavez, who's the CFO and the heads of banking and asset management, just kind of running around and trying to be helpful to people and really just like mapping the place.

2:28:19You know, you realize that even people had been there for a decade or longer, didn't know kind of what all the different component parts of that firm did. Yeah. And it was fascinating because it's not a normal kind of operating business like, I don't know, an American Express that has a big consumer commercial business. It's really a confederation of a lot of little businesses who sort of fight for collective resources under these common kind of divisional umbrellas. But it's also really fascinating because if there's something interesting to do on the outside world, there's probably somewhere to put it.

2:28:47Meaning you could be an equity investor, a debt investor, an advisor, a customer, an acquirer. So it's fascinating to kind of bridge the world that I primarily lived in, like the tech ecosystem, and then try to help Goldman navigate that too. To be clear, I wasn't the head of Firmware Strategy. I worked for a woman named Stephanie Cohen who reported to David Solomon. But I was the weird kind of startup entrepreneur guy kind of running around and trying to help her, frankly, get connected in the tech world. And she's now at Cloudflare and doing a great job there. Yeah, it's still a really cool role.

2:29:17Well, how much of Goldman's structure is a function of either like legal firewalls between different teams or just the idea that if you have a specific desk, you need to be able to manage their own P &L and kind of account for their business independently and then align incentives towards how that team is doing? Or is it more just like sclerotic because it's an old company? I think it's a little bit of both. I mean, there's definitely some, you know, kind of regulatory bridge between like the public and private side and what can be shared legally. But I think the more interesting history, and there's a great book called The Partnership, which I think is a great kind of business history book, even if you didn't work at Goldman Sachs.

2:29:58I think for 140 years, it was one of the most entrepreneurial places in the world. It was a firm that had to scrap. It was started by Jewish immigrants, basically. It was not sort of J.P. Morgan or a lot of these other kind of white white shoe firms. And they started basically like the factoring business. And then, you know, entrepreneurial people would raise their hand. It was a partnership, they'd give them a little bit of money. And they'd say, I want to go build a new business. So somebody started the merchant bank, somebody started the wealth management division, somebody started, you know, Europe.

2:30:30And it was not a business built through M &A, it was a business really built organically brick by brick by enterprising people. And I think it's just such a fascinating history. And so part of that is the culture, right? It really was a partnership. And I think that confederation is kind of the evolution of that, which was like, you know, you want to feel like a CEO, right, of your own kind of individual business, even that it's like a trading business within, you know, a much larger, you know, division. I think the last like 10, 15 years has been, it has required an evolution from that in some ways, right?

2:31:04I think, you know, the firm went public. Then you had, you know, the tech bubble, the financial crisis, the financial crisis, I think was like a terrible experience for Goldman Sachs. If you remember the vampire squid and like the blood funnel, like that was the brand, unfortunately, for a long time. They actually did pretty well during the financial crisis. They like the best of the worst performers, which was like somehow terrible even more because then all the negative attention came on the firm. It did amazing. And part of that was they had really talented people. Part of that was actually technology.

2:31:39They built their own kind of unified core risk system. So they understood across every division kind of what their exposure was to the housing market. And they were able to hedge basically that exposure and they didn't lose money. And then they made a ton of money, you know, kind of coming out of that crisis, which again, didn't hurt the brand to your point or didn't help the perception of the market, unfortunately. But I think ultimately, like more recently, and, you know, we can, I just find their history fascinating. Yeah, it is. It's so fascinating. You know, I think they become more of a company than a partnership, right?

2:32:14And I think to do that, you kind of need operating leverage and therefore kind of, it's a bit tighter kind of at the top. And I think it's, my perception is that it's made it a less entrepreneurial place over time, right? And instead of sort of giving an individual person the agency to make their own individual decisions, especially from a technology perspective, you need more centrality, you need more leverage, you need more kind of command and control. And I think you've seen that actually benefit their share price. If you look at Goldman's market cap, even in the past few years, it's actually done really well.

2:32:47I think a lot of that is through that kind of centralization to some degree. But I think it does come at the expense to some degree of the entrepreneurial dynamism that existed, you know, for again, 140 years, it used to be one of the, you know, most lucrative places in the world to work. And nobody's crying for Goldman Sachs employees, to be clear. But I think it just it's a different culture. And it's going to look more, in my opinion, like a normal bank than it was previously, which was a broker dealer in a partnership. I mean, responsible when you catch up with old, you know, peers, colleagues, etc.

2:33:23How do you feel like Goldman and other firms of that caliber are reacting? How would you rate their kind of reaction to AI specifically? Are they just buying a lot of it so that they can kind of say like, look, we're doing AI? Or is it like, you know, truly organic sort of ground up movement or some of both? I think it's changing very quickly, you know, and I think, again, not to pick on that. But historically, like, and I think in a lot of banks, there was this culture of like, if it wasn't built here, we're not interested. And I think that was like the wrong decision for a very long period of time because the world, you know, kind of changed, you know, around them in a lot of ways.

2:34:08But I think actually, Marcus, you know, despite its challenges, was actually a good cultural kind of catalyst in this point. They leverage a lot of third party technology because the consumer business, you know, hadn't existed, you know, previously. And I think many CIOs and the CTOs at these firms are just understanding that there are some things that we should build internally. If it's core to our competitive advantage, fine. We should own it ourselves. But almost everything else we should outsource to third parties and leverage the best of what exists. And it's actually informed a lot of how I spend my time here, in part because as a founder, it was very challenging navigating these big institutions to understand who is the decision maker.

2:34:49And then you get inside these firms and you realize that if you're a division head running, you know, a 10 ,000 person, 20 ,000 person organization, it's not your job to know what's happening on the frontier. Right. You know, certainly not at the seed in Series A stage. And I think one of the things we've done explicitly and part of what's been useful to do from New York City, where I said, is be a bridge between those ecosystems and kind of convene the CEOs and the leadership teams of every kind of major financial institution in America and then curate a group of 20, 30 portfolio companies, non-portfolio companies that align with whatever their strategic priorities are.

2:35:30And it's kind of a win-win-win. you can accelerate the go-to-market for the seed stage business, you help this incumbent understand what's coming. And it's helped us come to conviction on investments and just feel like everybody's sort of winning in that dynamic. But the rate of adoption is happening very quickly, just to answer your question more specifically. And I think this is true in financial services, I think it's true broadly in enterprise, both because there's bottoms up adoption, like engineers are using, whether it's GitHub, Co-Pilot or Cursor, we're big investors, obviously.

2:36:03But then there's top-down pressure, right? I think any CEO, any board member can plug a prompt into any of these models and understand intuitively the impact that it's going to have on their business. And I think financial services in particular are so human capital intensive. You know, at Goldman, they call basically the back office, the federation. And it's largely, it's kind of a Star Wars reference, but, you know, it's still humans sitting in Excel, not even using enterprise software necessarily, right? And across legal compliance, risk, vendor onboarding, and so much of that should be AI.

2:36:39And I think they're recognizing that and beginning to adopt it a lot more aggressively than I've ever seen, which is exciting. Do you get a sense that there's been innovation happening in some of these more traditional financial firms or even hedge funds and things like that that is potentially groundbreaking but not being released as products right like jim simmons didn't you know discover an algorithm that could you know make 60 percent a year forever uh and then he he was like yeah we shouldn't just like productize this and let anyone use it jane street's had gpt6 for like a decade we should just use it so so yeah how do you um i'm curious if you have any kind of insight there uh because if you discover something like Like, you know, if you discover a machine that just makes money, you should just, you know.

2:37:29I mean, there was a rumor a while ago that Google's, just their treasury management system was so advanced. They were like, we could just become a hedge fund, but that wouldn't align with our mission. Totally. I mean, look, there are a bunch of like, you know, you know, quant hedge funds that I'm sure have. I mean, they have to have had, you know, great kind of proprietary technology that have given them an edge, whether it's Renaissance, as you mentioned, or, you know, Two Sigma or Jane Street. It's hard to know exactly what's in there. I think they purposely keep it out. So it's a secret. And I was listening to your conversation with Jack earlier.

2:38:04I forget if it was him or you guys who had said it. Like, if you found something that is actually money printing, like, don't go sell it to a bunch of other people. Just like raise a giant fund and do it yourself. Yeah. Well, can you talk about the transition to Andreessen? How did that happen? You know, you see people cross over from Goldman into venture every once in a while, but it does seem like you had a somewhat unconventional path. So how did that conversation starts first spin up? And then what's the experience been like over the last couple of years as the fund has scaled? Yeah, it's been it's been awesome.

2:38:34I mean, I I've known actually Alex Rampell. So he was the one who kind of recruited me to the firm back in 2021. But I've known him for over a decade. So I met him, I think, originally through through Plaid. You know, we've done the seed at Spark. He led it later around. And I pitched him Bond Street when he first joined the firm in like 2015, 2016. He passed. We stayed friends. Many such cases. And then when I was at Goldman, I, you know, ended up helping them put a bunch of money to Carta alongside Meritech and alongside Andreessen. And he and Mark had worked on that investment. And then in PPP, like during COVID, I was trying to figure out ways to help the firm plug our balance sheet into the economy, right?

2:39:16I'd run a small business lender and I was afraid that, you know, small businesses weren't going to be able to get the capital they needed to actually survive. And we could pledge unlimited assets to the Fed window. And yet I thought technology and fintech in particular was kind of the right distribution channel. So he and I were chatting a bunch in that moment as well. I actually left Goldman in October of 2020, went to go do this kind of weird thing with a hedge fund guy to buy a stake in Sotheby's. We can come back to. Very cool. That's amazing. I love that. Um,

2:39:49uh, he, um, he pinged me in March of 21. He's like, you know, how's, how's Goldman? I'm like, wouldn't know. Haven't been there for six months. He's like, what are you talking about? Like, yeah, I never updated my LinkedIn. Here's this kind of weird thing I'm doing, uh, with Sotheby's. Um, and he's like, can I put you in front of Mark? And I'm like, well, twist my arm. I've never met Mark Andreessen. And, and that sort of precipitated a bunch of conversations. And, you know, fortunately they wanted to open up a New York office. And it was just a, I mean, I had always admired, you know, Andreessen from a distance.

2:40:20It really is a firm kind of run by entrepreneurs. And yeah, it was a unique opportunity to kind of plant the flag here in New York City. And, you know, that was almost four years ago. We're 100 people full time in New York now. Wow. Yeah. Can you map Andreessen a little bit for us, maybe compared to Goldman? Obviously, a lot of entrepreneurial energy, but then, you know, there's specific funds, there's specific offices. It is a unique firm in so many ways. How has it changed? How would you describe it now? Eric Torenberg was on the show and said, it's very specialized. And I think a lot of people in the audience were like, what are you talking about?

2:40:53They do everything. And it's like, well, they're specialized within the firm and there are specialists at the firm. And so what's that been like? And how have you experienced the last couple of years as interesting as scale? Yeah, it's fun. I mean, I think actually, you know, before Goldman, you know, Bond Street had been the biggest business that ever worked at, which was, you know, several dozen people. Goldman was 40 ,000 people. So I think that scale has actually helped because Andreessen doesn't feel that big to me. I think in venture, it's still big, but it's not. Yeah, just to give you a sense for kind of how the firm is organized today.

2:41:27So, you know, we last year, we split the early stage venture business into three. We raised three separate funds. So there's an infrastructure fund, which, you know, my partner, Martin Casado leads with with Ange, Jennifer and Zane. We have American Dynamism, obviously, which David Ulovich, Catherine and Aaron help lead. We have an AI apps fund, which Rampell, myself and Anish help run, which is basically anything consumer, anything B2B. It didn't kind of being a horizontal cross either. And then there's a separate bio and health care business, a games business, obviously a large crypto business.

2:41:59Yeah. And then a growth fund that kind of sits across all of it and will invest in things that are kind of inflecting. And then, you know, uniquely, I think, you know, the firm of 600 people, the vast majority of our headcount is a large operating platform right across a bunch of functional different kind of areas, whether it's go to market or, you know, marketing or people practices, you know, an internal kind of capital network team. And these are resources that we, you know, help make available to our entrepreneurs and really to try to tilt the board in their favors, right, to help them build great businesses.

2:42:32And that was kind of the ethos of the firm from the very beginning. You know, I think Mark and Ben were sort of customers of the best venture firms as entrepreneurs. And it was like, you know, five people in the checkbook. And their view was like, we're going to take no salary. We're going to reinvest 100 % of our management fees back into building this operating platform. and that sort of benefited from economies of scale, you know, over time. That makes a lot of sense. Can you talk about how the kind of platform teams have evolved over the last, I mean, as long as you know, I was actually in the portfolio back in like 2012 and they did these like seminars for B2B sales and marketing and PR, but now you're seeing new value add pieces of the platform, whether it's introductions on Capitol Hill now, almost like a like a lobbying light version.

2:43:21But how has that evolved and how are you thinking about that going forward? Yeah, I think part of part of what has happened is kind of, yeah, it has further decentralized in some ways. So, you know, in some ways, it does kind of remind me of Goldman, where each fund is almost its own division that can kind of allocate, you know, management fees and talent at will, you know, to some degree. And as a result, ultimately, like we think about each fund almost as a product to serve the entrepreneur. And so, you know, I suspect that, you know, as David and Catherine are thinking about the American dynamism business, it's how do I leverage these management fees to build the right capabilities that are unique for that specific customer?

2:43:58Right. Which might be, you know, more of a presence in D.C., for example. Martine might think about it differently on the info side than on the app side. Same thing in the bio and health care business, like having a deep relationship with all the, you know, payers and the big hospital systems. you know, to help, again, accelerate the go-to-market of the bio and healthcare, you know, portfolio companies, super valuable. And so it has sort of further decentralized, further specialized over time. But I think the same ethos is the same. It's, you know, how do we, you know, come with capital, but also help, you know, help these businesses grow and scale and, you know, take what often was a first-time founder and give them all the kind of superpowers and capabilities of being like a scaled CEO.

2:44:36Like that was sort of the mental model, I think, that Mark and Ben started with. I wanted to switch gears for a second and ask you about something that I feel like is kind of potentially on the horizon. So I've been hearing various teams are working on putting secondaries on chain, which I think is going to be potentially hilarious and potentially a disaster. We'll see. We'll see. I'm cautiously optimistic. But on the on the topic of secondaries in, you know, just just just companies like liquidity and the private markets, it feels like this has been this like perpetual like promise, like the whole industry is very excited about it.

2:45:22And I don't feel like at any point, despite so much the sort of broad growth of the private market over the last 10 years, it doesn't feel like we've made that much sort of meaningful progress. Can Silicon Valley learn at all from, you know, Wall Street is notorious for creating new financial products that can actually be successful and scale and become big markets of themselves. Do you expect secondaries to get there at any point in venture? Do you spend time thinking about that at all? It feels somewhat inevitable, but then at the same time, we've all seen how illiquidity can be such a feature and not just a bug like some people would have us believe.

2:46:09And are you talking specifically about employee secondaries? Just broadly, just bringing... Well, there's a public fund right now. there's a public yeah and i was gonna that was gonna be my next owns a number of spvs and look through exposure into various yeah it's more so bringing bringing at the same time exposure uh liquidity i'm just i'm interested to see if you have any type of thesis here the other thing we saw recently was co2 coming out with a new fund that's a smaller fund with like a 50 000 minimum check size and i didn't fully understand that move outside of wanting to create a product for maybe the next generation of, you know, family offices and things like that.

2:46:51But I'm curious if you have kind of any type of vision on the next 10 years of. I don't, you know, it's interesting. Like, I think there's been, yeah, I think there's a couple of big secular trends that are sort of happening. Like one, certainly companies are staying private longer. And I think that's driven the scale of the venture business, right? You can put more dollars into your winners over over long periods of time. So it kind of makes sense to be able to capture the economics there. The other kind of secular trend has been bringing, and we're still early, I think, in that kind of way of bringing alternative investments to wealth, to the kind of mass affluent kind of wealth management channels, which historically have largely been funded by kind of institutional investors and their like.

2:47:37And I think the big private equity firms with REIT structures and credit products have done that much more aggressively. Venture is still relatively speaking of a small asset class in a small business and historically hasn't, I think, needed in large part to tap the kind of wealth ecosystem. And, you know, time will tell how, you know, how aggressively you can scale a venture business. I don't know that that's sort of the, that's not the goal necessarily. Right. But I think if you're Apollo or Blackstone, you know, trying to raise hundreds of billions of dollars, you know, in, you know, real estate funds, wrapping it in a product and distributing it through retail makes sense.

2:48:15And to do that, you need liquidity, right? Because an individual investor doesn't have the same sort of like time horizon, time horizon, they need access to cash for various reasons. So you need to give them outs. And so the KOTU fund, I think was a crossover kind of public and private fund with some liquidity gates, you know, more power to them. We haven't, you know, done something like that. Can you talk about the application layer in artificial intelligence? There was this meme for a while every wrapper is going to get steamrolled by the foundation models. I imagine you've been investing throughout that process, but has your thinking evolved and have any of the recent milestones that we've seen, you know, windsurf going into open AI that feels like, okay, maybe it opens the floodgates to every foundation model needs some dance partners here.

2:48:58And maybe that's an opportunity for liquidity at the early stage investing side. How are you, have you evolved your thinking on the application layer and the opportunity there, whether in B2B or consumer? Yeah, I know. I mean, I think you're right. Like, you know, I don't know, 18 months ago, I feel like the pejorative was everything's a GPT wrapper and the fear was every, you know, state of the art model company was going to eat every workflow. I think that hasn't been the case. And I think the, you know, like declining costs basically of like intelligence has benefited the application layer and not just in like text and reasoning, but across kind of every modality, whether it's voice or video or image.

2:49:34And so, you know, both, I think you're, the quality of entrepreneurs has kind of, you know, I would say increased dramatically a bit in the past year. I think people building specific products for, you know, with a deep understanding of the industry and the specific workflow that they're targeting, you know, has changed, you know, again, in the last, like, six months. And I think what you're seeing now is also not the sort of bottoms up, you're also seeing top down, you're seeing companies sort of own the end customer, own the end workflow, and then begin to build their own models, right? And I think the fear was sort of the inverse for a long period of time, but it's been easier to kind of route, you know, prompts to different models and maybe capture, you know, the highest margin, you know, queries in your own model, right?

2:50:19Or, you know, improve your own economics by owning some of that, you know, that workflow internally. And I guess like my hot take is that, you know, moats still matter. And a lot of them are largely the same, at least in my mind, right? I think AI is an incredible tool for differentiation. The idea that a voice agent can do the workflow, in some cases, a thousand times better than the human is amazing. But the technology, I think, is an ephemeral advantage. I think it's an amazing tool for differentiation, not necessarily the source of defensibility. And I think a lot of the defensibility in my mind resides in the things that have kind of always been true, right?

2:50:57Owning the workflow end-to-end, deeply embedding yourselves within your customers, right? Becoming a system of record, having a network effect, being a platform. And I think these were all the heuristics you would always kind of look for when evaluating software companies historically. I don't know that this time is that different. I think the impact and the idea that the software can actually do the work is radically different. And if you can capture labor budgets more than just IT spend, the TAM is radically different, you know, much larger. But that's at least been kind of my own, you know, mental model, you know, over the past, you know, several months.

2:51:30How are you thinking about open source? Mark's obviously been very outspoken about open source. I've always wondered, will there be a red hat of this generation with AI? Stable Diffusion was kind of thinking about that. And you could imagine that some company crops up that's like a for profit, very successful company, but built on top of open source. Are you looking at that? Are you optimistic about that? Or is it more just like philosophically open source is a good thing for the ecosystem more broadly? Yeah, and honestly, it's a better question for Martine because, you know, they spend more of their time on the infraside, you know, in that community.

2:52:06But, you know, we are big believers and investors behind open source. I mean, we're big investors in Metstral, for example. you know, in Europe, which is, you know, one of the leading open source players, Mark's obviously on the board of Facebook. And I think what they're doing with Llama is amazing. So I think there's opportunity for both. And, you know, I think in many ways, open source is a great kind of, you know, competitive force, which is also kind of drive down the cost of a lot of the, you know, intelligence, which, again, it can be great in its own business. And I think it's also benefiting the application layer.

2:52:39Jordy, last question. Last question. how much do you expect the adoption of AI to mirror what we've seen in fintech, right? It feels like fintech's been so transformative over the last decade plus, yet at the same time, every once in a while, I still need to write a check or use any number of different things. Does that provide any type of mental model for you on how to think about, you know, how people and companies and countries adopt AI? It's an interesting question. I haven't thought about kind of the through line there. I mean, I think AI, this may not be shocking, but I think it's going to, it sounds cliche, but it's going to change everything.

2:53:25It's going to be everywhere. And, you know, even the kind of intersection of fintech and AI is just, I think, incredibly interesting. Like I think my bias for the past several years has been to invest in fintech companies that lead with software, you know, as opposed to financial products. And it's part why we built that incumbent network. It's in part because of the culture of these firms are changing. But, you know, again, the ability to do the work within these organizations is so radically different. There's just massive labor budgets to be able to capture. And so, again, I think we're going to see the adoption of AI probably proliferate even faster than we did, you know, fintech products, although that happened quickly as well.

2:54:03Yeah, makes sense. well thank you so much for stopping by my pleasure having you we have to have you back and talk more that we could go on forever but yeah uh we'll let you get back to your day i'm sure you have a lot going on awesome thanks guys see ya fantastic um we are pretty much done with our ad reads we did a lot of them um but uh we still need to tell you we mentioned figma we failed everyone i know i know you want more ad reads um remember we are 100 corporate backed here at tbpn um that's right And we're also sponsored by Figma. Think faster. Think bigger. Build faster. Figma helps design and development teams build great products together.

2:54:41We were at Figma Config yesterday. The new products are so exciting. I mean, my favorite is Figma Sites. I've posted about this, but it's a product that I've wanted since the very first day I use Figma. Real quick. So we have Alex joining from Holo. to talk about the new American Pope. I'm very excited about that. That's amazing. So he's going to give some perspective. Catherine Boyle connected me. Also, did this happen while we were live? Yeah, it happened while we were live. Okay, because you keep referring to this and I'm like, I'm still seeing, I haven't gotten the update. So the Pope has been decided.

2:55:21So Hollow is based in Chicago. Okay. And the new American Pope is from Chicago. Wow, new Pope elected, yeah. So credit to Catherine for thinking about this. On May 8th, 2025, The Catholic Church announced the election of a new pope signaled by white smoke rising from the Sistine Chapel. This event, marking a significant transition in the church's leadership, was celebrated widely. The new elected pope was expected to address the public from the central window of the St. Peter's Basilica. Many people learned about this historic event through various online posts, with some humorously noting the unconventional ways they discovered the news.

2:55:54A lot of people posting memes. Very fun. Well, I'm excited to invite Alex to the show. I'm so glad he could hop on the same day. That's amazing. He's not here yet. So we can go through some other posts and talk about what else is going on. I like this post. Oh, I got it. Yeah, I got a post for you. Will Brown has joined Prime Intellect. Oh, wait, really? Yeah, that's amazing. That's really a huge pickup for Prime Intellect. That's some personnel news for you. That's some personnel news. If you're not familiar with Prime Intellect, fascinating, fascinating company. uh they do uh i mean it's technically a crypto company but they do decentralized training of ai models and yeah will's a great poster and obviously very sharp in ai so congratulations to will that's great excellent uh rollout of this announcement yeah he just was teasing it for days i was sitting on the edge of my chair yeah very excited anyway congrats to him and welcome to uh alex uh to the stream good to have you here thanks for having me thanks so much uh yeah that was fun how that came together.

2:56:56This is amazing. I'm so glad you could jump on the same day. We were on with Harley from Shopify and coordinating, but made it happen. Busy day, busy day for you, I imagine. Yeah, it's a pretty exciting day for us. I mean, it's like a one in a million chance that the Pope happened to be American and then that he happened to be from Chicago is crazy. That's where I am today. So yeah, it's been a fun day for us. It's been a fun day for us. That's amazing. Would you mind kicking us off with just a brief introduction on yourself and the company? It's just for so everyone knows. Yeah, I'm Alex, the CEO and co-founder of Hallow, which is a prayer and meditation app that we're Catholic, but we hope to be a resource for anybody interested in growing in Christian spirituality.

2:57:34We've been working on it for five or six years now. We're a Series C startup. Oh, wow. Very cool. Talk about what it was like kind of starting the company at that point in time it still felt like an era where people in sv didn't really talk about faith that was kind of a didn't feel like it wasn't a market that people interfaced with very frequently so they didn't think of it as a big market it was almost like silicon valley had gone so far towards atheism atheism effectively that it was that religion was like taboo yeah for a long time religion was seen is like anti-science and technology was science and therefore you couldn't be religious and build a tech company even though now that's been massively disproven and has been disproven forever.

2:58:22But anyway, what was your experience starting the company? Yeah, I mean, for me, it was my own. And we started, I started it for myself. I'd fallen away from my faith and discovered a relationship with Jesus, a relationship with God through prayer. And like really learning about what it meant, not just to talk to God, but to really listen to him, to really sit in silence and to spend time in contemplation and meditation. And I had no idea that those things were, that there was a Christian spirituality tradition of those things. I thought it was just, you know, hey, ask for stuff and repeat the things you heard as a kid or memorized as a kid.

2:58:54So it had changed my own life. But yeah, I was in Stanford and working on this thing in Silicon Valley and pitching Jesus, a Jesus startup. And it was certainly not what people are used to hearing. Honestly, it was fun for me because I got to go to all these VCs. And my story is just my own relationship with Jesus and how he's changed my life and how he's brought me this peace and this love and this joy. And I just get to go into these boardrooms and just pitch my own faith, which is fun. but it's certainly the vast majority of people thought it was a stupid idea. I mean, 99%. But that's true for any startup.

2:59:31But yeah, I mean, it's like people don't pray anymore. They meditate. Prayer is a dying thing. You know, it's been dying for a while. It's going to continue to die. And it's funny because Hallow is not, Hallow is a contrarian idea, really only in like Silicon Valley and New York. If you go to, you know, the middle of the country, even if you come out here to Chicago and you're like, hey, do you want a meditation app versus do you want something to help you grow in your faith? The latter is much more. It's like, no, 75 % of Americans are praying every week. It's a really important part of people's lives.

3:00:00And it's a huge, nobody's trying to do anything to help people. So in Silicon Valley, though, it's fun because it's a contrarian idea. So it was always fun to pitch. It's honestly the best of both worlds. You have contrarian here, which everybody's trying to be contrarian, and then non-contrarian in the market, which is where you're growing. Have you seen a big surge of downloads around the conclave? And I mean, like religion is the national, it's the global news story this week. Does that drive growth for the business? Yeah, we take it really seriously to try to help. You know, this is different than like, we talk about it often as like a political thing, but it's very different for Christians and for Catholics, especially than, you know, a presidential election in the US.

3:00:46and the most important part for us is, and this is true also for political elections, but certainly for this, the most important part is prayer. And so the thing for us is just to make sure that we're spending time praying for the church, praying for the, you know, repose of the soul of Pope Francis after he passed. And so we tried to create some content to help people journey through that. And then also to pray for the cardinals as they were choosing the pope, and then now to pray for the new pope and to get to know him a little bit and learn about his writings and his homilies and where he, you know, what he's trying to do for the church.

3:01:13And so, yeah, for us trying to help grow deeper in prayer and use this as an opportunity to let God work in our hearts was, we thought, a big opportunity. So certainly, certainly pretty busy for us. And we got like today was one of our biggest spikes and downloads of all time because, you know, you send out a little push notification that's like white, white smoke. There's a new pope. So let's pray for him, you know. But for us, we just try to use it as an invitation to, you know, let God in a little bit more. Yeah. How do you think about design of the app? I feel like the app store is so competitive and there's so many dark patterns when it comes to mobile games.

3:01:48I'm sure you're trying to use best practices, but you probably have a moral framework that you're following, the lines that you don't cross. Have you thought about actually building the app to be something that can grow and be a fantastic business while still satisfying the core mission of the company? I would certainly hope we have a moral framework. I care a lot more about getting into heaven than our retention rates. But retention's important, actually. It's funny because retention's a great example. We work a lot on retention. You want to drive great retention. And for us, what that means is we measure retention based off of whether you're starting a prayer or whether you're praying on the app.

3:02:23And so a retention rate is just, okay, if you downloaded the app, you're looking to grow deeper in your faith. You're looking to try prayer and meditation and growing in your spirituality. How successfully did we help you to build a daily habit of prayer? And that's the core of our mission. But it also, as a subscription business, which there's a free version of hallow and then a subscription version but as a subscription that's also all you care about is trying to get new subscribers in at locax and then try to keep retention which for us is just adding value to people you know for there's a lot of people who have a lot of very strong opinions on this but like christianity and the church especially has always had a very clear stance which is like business and economics and certainly entrepreneurship um can be forces for real good they can they can be used for evil and most of the time they are and And that's the same with technology.

3:03:08Like most of the stuff on the internet is bad. It's at least, if not bad, distracting and noise and awful for like your soul. But God can still use it. So just because we screw it up the vast majority of the time doesn't mean that God can't use it for his own good to try to bring joy and love into people's lives. And it's the same thing with, you know, startups, which is, and even Pope Francis was really clear on this, like startups and business can be a tremendous force for good as long as they are you're doing them with a spirit of service aligned with you know the right values treating your employees well trying to serve your customers not trying to do dark patterns or anything and doing it in a way where money is a tool and never the object if it's the object you're always going to leave unfulfilled it's always going to be sad it's you know it's it's never going to be the end all be all you're trying to make it your god but if you use it as a tool then it can be a great tool to um help you know serve your brothers and sisters around you can Can you share a little bit more around the news today and around Pope Leo?

3:04:04We were live when the news was announced, and we've had like eight guests so far today, so I certainly haven't been able to get into it. So for our own curiosity. Or even at a meta level, how can someone get to know the new Pope? What is the correct process to even digest that information? Yeah. Yeah, well, in a self-serving spirit, we have a challenge launching that is to get to know the new pope and to pray and to try to spend some time in silence, but also to get to understand the new pope. And most of the time it's through homilies. So these are cardinals that are chosen who were then priests and then bishops, and then they're cardinals.

3:04:42And so they've given a lot of homilies, they've given a lot of sermons, and you can tell a lot about where a person's heart is at, what they're trying to do in the world, and what they think the world needs, and what, you know, they've heard from folks in terms of what they need from their homilies. But, you know, at a super high level for the folks who haven't been following the news the a new pope was chosen pope francis passed away um this was the monday after easter sunday which is beautiful like his last day was easter sunday which is just such a such a beautiful time um but then there's a period of mourning and then the cardinals get together in this like super old school in the sistine chapel beautiful place and they vote on for a new pope and it's been it started yesterday so it's been two days so it's relatively quick but they go through these rounds of voting each day and you have to get to two-thirds, and then that's the new pope that's chosen.

3:05:26And today the new pope was chosen, and it's Pope Leo XIV, which is the name that you choose the name as a pope. And he is a cardinal from, he was a cardinal from Chicago who lived in Peru for about 20 years trying to serve especially the poor and act as a missionary. But then he worked in the Vatican for a while and got familiar with all the Vatican stuff and was a very good, worked very closely with Pope Francis. You know, it's crazy because he's the first American pope in the history of the papacy, which is insane. It's not that crazy because the church has been around for 2 ,000 years and America has only been around for a couple hundred, a few hundred.

3:06:03But it's the first American pope, which is huge, from Chicago, which I live in Chicago currently with my wife and kids, and Hala is based out of Chicago. So that's just insane. I mean, he was—like, people kind of thought maybe he was in some sort of list of frontrunners, I guess, but like certainly not top five. nobody would have thought he was, you know, the top three or four or five. You know, for me, it's, and then he comes out and he blesses the city of Rome and then the whole world. So it's this picture where he's out on the balcony blessing everybody. And he gave this really beautiful speech of, you know, just how God loves each of us.

3:06:37And he just wants to enter each of our hearts and that we shouldn't be afraid and we should go forward with faith and with hope and, and, you know, with the protection of Mary and the angels and all the fun Catholic stuff, but really just to let God into our hearts. And so he gave this beautiful speech. It'll be fun, but he's 69 years old, so he'll be the Pope for probably 20 years. He's a relatively young Pope, so it's a cool thing to get to witness. That's very cool. Are people already reading into the political implications of this? I know the Wall Street Journal was a little bit critical of Pope Francis for some environmental decisions he made.

3:07:13What are people expecting from the Pope in terms of political leadership or shifting the culture around the politics of the church. Yeah. You know, we always, especially as Christians, we run into this all the time. And honestly, it's what happens in the gospel. Like you read the gospels and you read the Bible. And what they tried to do to Jesus was they tried to bucket him into these political things. And they were like, oh, you say you're the Messiah. So aren't you supposed to overthrow Rome? That's the current operating power. And he's like, guys, guys, guys, I'm not focused on your right, left fights.

3:07:44I'm not focused on your little disagreements with your politics. I am trying to build a kingdom, but it's not this kingdom where it's, you know, I'm going to like fight a war. It's a kingdom, like it's your heart. I want your heart. That's what I want. I want your life. I want your soul. I want your heart. Like I want, I want you to live a life of love. And so what we tend to do is the same thing. We've done it for 2000 years, but what we tend to do as Christians is we like, we bucket these church leaders into these political categories. And oftentimes it's appropriate because they, you know, speak very politically, but especially as the Pope, it's such a funny role because American politics are such a small portion.

3:08:19I mean, you're the Pope of the world, but certainly the billion and a half Catholics, which are spread up, you know, there's a small minority are in the United States. And so even just thinking, you know, for me with HALA, we have a global population now, and thinking of politics in different countries, it's just like you can't really compute it. But, you know, what Francis was really focused on, I think, was this, was was trying to share the love and the mercy of Jesus with people, especially people who are the most marginalized, who are in the toughest places. Honestly, it's a lot of what we try to do at Hallow, and I think this is what Pope Leo will continue, Pope Leo XIV will continue to try to do it.

3:08:55He spoke a bunch of it about that in his first kind of blessing. He's spoken about it before. I mean, one of his quotes that I looked up that I loved was like, we spend so much time as Christians focused on teaching and on theology, which is important. It's a beautiful part of the faith, but we forget that the first thing that we're supposed to teach is just like, hey, there's this dude that I know that's awesome, that I love, and I want to share him with you. Now, he said it much more beautifully than that. He said, you know, the first thing we have to teach is that is to know and love Jesus Christ, but it's the person.

3:09:25It's not like this set of facts or ideologies or politics or whatever. It's like, no, I just have this guy I want to share with you, this relationship that I want to share with you. That's all. And I think that's what he'll try to continue. Politically, actually, on some of the more sensitive topics, he's been very reserved. So there's not a lot that you can tell on his stances, other than the things that the church has always stood very clear on. So he stands very clear for pro-life. I mean, he's got a very pro-life message, which is the same as Pope Francis, both for the unborn and for elderly.

3:09:53He's got a very clear stance on protecting the environment. God gave us the environment, and the church's job and our job as Christians is to inspire us to take care of what the gifts that God has given us. And so, you know, he pushes for a lot of the same things. But Leo actually is a really interesting name, because the Pope Leo XIII was the one who really fought against this socialism, like this rise of socialism, also unbridled capitalism. And he was like, look, you can't just, you know, exploit people for money. That's, you know, we shouldn't do that. But also there is private property, and he was really fighting against this rise in communism.

3:10:23And so choosing the name Pope Leo does actually say a lot of really interesting things about what he's hoping for, for the church. But we'll see. We've got 20 years to figure it out. so we got some time Alex thank you so much for joining this is fantastic super insightful thanks for having me guys we'll talk soon good luck today bye that's fascinating have a busy evening for sure for sure we got Gary in the waiting room let's bring him in we're excited to have him on board um yeah what what a great uh topical update I'm excited to dive more into the Pope and kind of understand where he lands on everything um uh Pope someone who's like kind of you know drops out of consciousness but then pops up for a moment in a while and back in a big banger homily did you got a new homily alert really shake up the tech industry yeah the banger homily hopefully anyway we got very Gary Vaynerchuk coming in to the studio to the show excited to talk about the creator economy what we're doing what he's doing how they intersect and I want to ask him about this Walt Disney corporate chart have you seen this the the famous chart yes of like how everything interconnects.

3:11:32And I have an interesting hot take I want to get his reaction to because this chart, everyone cites this as like, oh, it's okay to build this really complex business where everything interacts with each other. Disney created this chart 10 years before he died. He was 50 and had spent 30 years building the Disney empire. This was a reflection on his life and his career. And we got Gary in the studio. So welcome to the stream, Gary. How are you doing? Oh, welcome. There we go. Where are you? Where are you going? Wait, wait. How was Bloomberg? You were over on Bloomberg TV. I was on Bloomberg TV a few minutes ago, and now I'm upgrading to the most important business show in the world.

3:12:14Thank you. First of all, men, you guys look very sharp. Thank you. Thank you. Yeah, we try and dress up. We take it professionally. We are the media. You guys look good. I am in New York City headed back to the office. I'm like in the thick of this major launch. of my beat friends trading cards and uh but i'm really really humbled to be on this show and you guys i obviously we've spoken a couple times off screen but i'm gonna give the flowers while i'm on it so other people hear it i love what you guys are doing i'm proud of you guys thank you i cheer for you guys and i'm thrilled to be on the show thank you thank you so much for coming on tell us about tell us about the launch today to start uh i have to imagine this has been in the works for years now so tell us about what you're launching and the significance look i um hey knowing how high caliber the audience is here let me say it this way the the direct answer is we have a tops trading card launched nationally globally actually which is if you pay very close attention to the narrow sports card world is a big the only other ips that are on tops chrome are Disney, Disney itself, Star Wars, Marvel.

3:13:23So it's a big head nod to this tiny, young intellectual property that I'm building that has the ambition of Pokemon, Marvel, Disney. But I mean, year four, and back to, you know, you were just mentioning Walt Disney. He was doing that 110%. Travis from Uber and I used to invest a lot together. When he took over and was the day-to-day CEO of Uber, he's like, I would hit him up about random things. He's like, I can't. I'm 100 % focused on this. I'm four years into BeFriends, and I'm in the process of getting to a place where I can focus 100 % on it, but I'm not there yet. But yesterday was a great day, especially for me.

3:13:58I grew up a baseball card kid. Tops is the apex. But at a higher level, back to the audience that's here, I really think that intellectual property is going to be a very big topic of conversation over the next 20 years. I think as we go into this AI era, I think people will understand the value of IP more and more and more. And I'm grateful that, you know, my belief of what the blockchain means, which is what I started Be Friends on as an NFT project, and my understanding of storytelling and brand building around comic books and cards and cartoons and all that stuff. I'm pretty excited, man, to be honest.

3:14:38in so directly yesterday was a big day but it's a tiny tiny little pebble in this boulder i'd like to build over the next three or four decades yeah talk about uh you know one of the you know creating iconic ip takes time there's no there's no way to shortcut you can't there's no way to shortcut yet at the same time crypto is known for just being ruthless in terms of expecting things you know now yesterday things like that how have you found and obviously i don't think it's very few people in the world that work harder than you right so you're like working on uh on delivering that you know you know and growing the the the value of the ip day over day over day how have you found the the the pace pretty easy if you're willing to deal with with pushback meaning to your point you know if you if you go talk to hardcore nft collectors that small group right in the scheme of eight billion people in the world a lot of them will tell you that over the last 18 24 months i've not been the darling of the ball because i just refused to do things that were going to create short-term economics yeah and so i had to take my bumps and bruises on some of the DGENs and I was empathetic.

3:15:59Like when you are running a marathon, sprinters make fun of you. Yeah. So, you know, have I dealt with it? I'm grown, meaning I've been running businesses for 30 years of my life day to day. So I didn't, I've also been a public figure for almost two decades. It wasn't hard for me to deal with the cynical tweets. I have a fucking vision. I'm focused on what I'm building. And over the last 24 months, building the infrastructure of trading cards and comic books and cartoons, my moon bug collaboration, my tops collaboration, us becoming a leader in live social shopping on whatnot. These are the pieces that are being put in place.

3:16:41And when you look at the NFT values, because people are falling in love with patient Panda and fearless fairy, you know, I know why people buy Spider-Man comic books. I know why people buy Mickey Mantle rookie carts. I need the storytelling. While there was uncertainty in the market, especially with the prior regime's SEC, I'm just focused on building incredible community and collectability and infrastructure and building out my team. And so to answer your question, it was quite easy and quite hard. It was easy because I am who I am as a human and an operator. It was hard because Because even if you're a gangster and focused and I like to be all those things, I'm a human.

3:17:25And, you know, when you get that pushback and people like, where, what, what's the value, what, this, that. Or like, where did Gary Vee go? You know, you got to eat it. But the reality is I've been very clear about what I've been doing from day one. You can go look at my CNBC or podcast interviews in 2021. I said I'm building a 30, 40 year IP. 99 % of NFTs are going to go to zero. I see a path to not being part of that 99%. It is going to involve the real world, not just digital. I will stay on top of my Web 3 understanding, my Web 2 understanding. And, you know, I've spent six months on understanding that AI creation is going to matter for this IP, you know, because I'm required to.

3:18:06Or the updates on new blockchain or what Coinbase is doing with base as a layer two or what's going on with YouTube Kids Dynamics. And, I mean, I'm just in my traffic, bro. And so I've handled it easily. How do you think about value transfer for intellectual property going forward? I mean, we were in the dark ages for a while where you couldn't even use a song on social media without getting the thing taken down. Now it feels like most of the platforms have figured out how to funnel the ad revenue around to the correct creator. Imagine that gets better with AI. But it's going to get better with AI and a lot better with AI on top of blockchain.

3:18:47That makes sense. Where you can really, really layer it all together. So what do I think? I think people in the intellectual property business are big winners of the next half century. And I'm grateful that between Gary Vee, the personal brand, and Vee Friends, the intellectual property that has obnoxious ambitions, that I'm going to be in the game. What does the next one to two years look like? uh you've been laying out you know your your master plan giving us updates but uh what is yeah what is it what's the immediate future look like social media creative at scale believe it or not this is analog but the comic books are monstrous for me yeah we just put out but it's a modern twist we're selling comic books in packs so it has like a baseball card feel so different covers different variations and we're selling it on whatnot and TikTok shop.

3:19:40So we're doing commerce tainment, which is something I believe very deeply in. So right now I'm going into the chapter of, here's how I look at it. I don't know if you men know this, but Harry Potter's original book is a very sought after collectible and very valuable. But Pokemon and Star Wars first books are not that sought after. Spider-Man's rookie card in 1966 Donruss, I think an undervalued collectible, but it's not super sought at because when you're a comic book collector or more importantly, the first time Spider-Man appeared in the world, it came in comic book form. Harry Potter came in book form.

3:20:20Trading, you know, Pokemon came in trading card form. The form factor of the collectible, when it first appears, becomes the alpha, becomes the real central focus. and then the IPs expand into everything from pajamas to cereal to vitamins to movies to video games. What I'm focused on right now is getting people to fall in love with my characters. So animation, social media content, comic books, trading cards that have stories on the back. I'm very focused on that. What that's doing is it's leading people when they fall in love to get into the ecosystem and then that brings them back to wanting to own VFriends Series 1 NFT because that is the original origin of the IP.

3:21:06So next 24 months is keep my eye on macro technology, make sure I'm utilizing AI and everything that it brings to the table for me to expand the output of my creative, both in volume and quality, pay deep attention to the new blockchains and the layer twos and the innovations that are happening in NFT land because obviously, you know, this isn't, at the end of the day, a digital collectible first and everything else second. And then most of all, figuring out more ways for people to fall in love with Ambitious Angel and Balanced Beetle and the very lucky black cat. You said you're one of the most active sellers on whatnot.

3:21:45Are VCs still underrating live shopping? It feels like one of those things that took off in Asia, but there haven't been that many. And I would say it's taken off in certain subgroups and for certain product types here and certain demos. But I'm curious, as a seller, how do you view it today? I view the QVCification of social media as one of the most significant micro emerging trends in the community of venture capital, private equity, business opportunities for entrepreneurs and humans. I think it is incredibly real. I wouldn't call that VCs are underrating it. I think whatnot got an obnoxious valuation.

3:22:29But I think that's the macro infrastructure. To your point, DT, I think small businesses and entrepreneurs and startup founders are underestimating it. If you sell something physical, if you sell something and live social shopping is not part of your daily debate strategy and then ultimately execution, you're misplaying spring of 2025. If you sell vitamins, if you sell underwear, if you sell racquetball, if you sell something and this is not part of your repertoire, you're basically similar to someone who's not using social media at all in 2008-9, which means you're not going to go out of business.

3:23:17It's not like you're a doofus and you're dead. It means that you're leaving an obnoxious amount of opportunity on the table. Yeah, that's a good framework. Anyway, we'll get on there and we'll start selling 2026 ad slots right next to you. Yeah, I know. I know we got a hard stop. Anything else you want to share? You know what's funny? I want to say thank you. And I want to say commerce statement. You may not sell ad slots because that's a different form factor. But if you don't think that you guys could sell, and I don't think this is the right move for the tone and tenor what you're doing. However, there are general business items that this show could sell at scale, even passively, while people are watching with shop for a briefcase or these are the best travel shoes or fucking, I don't know, fountain pens.

3:24:04I don't give a shit. You guys could dominate. Love it. I love domination. I want to dominate in everything we do. We'll discuss offline. We'll put our master plan together soon. I want standing desks floating across the screen and what you're saying, buy now, buy now. Three left. great to see you gary fantastic safe travels we'll talk to you soon anyway uh let's do some timeline we got 15 minutes until will from whoop is coming on amazing thing about gv he's the same person always oh yeah totally every interaction talking with him here he's in the car just doing business yep i love it it's great fully authentic and uh i like the the the clear dedication of v friends i mean he is on an absolute trenches yeah i love to see it anyway let's go through some timeline uh first up from harsh he says windsurf sold for three billion cursors now valued at nine billion windsurf bought by open ai open ai is an existing investor of cursor both are vs code forks vs code is owned by microsoft microsoft owns 49 of open ai and it's the uh and it's the the big short photo hey there's a bubble uh and uh i mean a little silly but it makes sense that everyone's getting into this uh this one from leo gow if we can pull it up uh is one of my favorites uh from frog and toad said frog put the profits in a box there he said now we will not be motivated by profits above the cap but we can open the box said toad that is true have said frog.

3:25:36Just a timeless children's tale, obviously referencing the open AI profit cap. Nick Carter also had an interesting post about AI, the K-shaped reaction to artificial intelligence. For people who are naturally curious and love to learn, AI vastly improves their pace of information ingestion. For people who hate reading, writing, and see knowledge work as pointless busy work. AI will atrophy their cognitive functions. I couldn't agree more. If you're curious, you'll just be tinkering with ChatGPT all day long. I was trying to pull a list of the fastest companies. I mean, I'm sure everyone's seen that chart.

3:26:14The fastest companies to 100 million of ARR. I wanted to see the big boy version of that fastest to 1 billion in revenue. Obviously, Google, Facebook, all these companies have done it very, very quickly. and I was able to just do one deep research report then have, you know, turn it into a scikit learn or I forget exactly what, matplotlib chart all within one chat GPT chat interface and I was just going back and forth for probably like 30 minutes while Jordy was just watching me. You fully voice mode too. Yeah, it was great. Just talk to it and say, hey, yeah, change this title, make this bold, make this font bigger.

3:26:55Analyst in my pocket. That's great. I'm not going to say the name of this account, but I will say, I will read the post. It says, there is a phenomenon on TikTok where businesses will exploit their young female employees to do an informal ad for their establishment. You heard about this? I don't. Oh, we have like a junior employee. I don't call this exploitation. I call this - Shareholder value creation? Being on a team and being willing to do things that aren't necessarily directly listed on your - Yeah, but I mean, if it's not within your purview and you're like, you know, forcing your employees to post about your stupid business or something.

3:27:33Gun to your head. Make a TikTok ad, John. Yeah. I mean, I don't know. It seems kind of silly. But yeah, I mean, you got to negotiate that in your employment contract. Hey, this isn't part of my job if I don't want to be doing TikTok for you. Anyway. You can always say no to TikTok ads. There's this video that went out from Frothless. The money isn't real. i don't know if you saw this video but it has a very cool like retro vibe we i don't even know if we can play it but uh fun uh it is very cool like retro vhs vibe and it's making all these points about like you know crypto is the future money isn't real gold standard dropped and the whole time i was watching it i was just like this feels like an ad for buying gold like you can still just buy gold and yet it's it's it's funny that like all like 90 of this is just an ad for gold And then at the last second, it's just like, oh, actually buy Bitcoin or some.

3:28:26It's actually don't even buy Bitcoin. It's like buy dollar sign crypto on Solana or something like that. It was like a very odd pitch. You're getting a meme coin ad. Yeah, it was a meme coin ad. And I was like, I feel like a lot of the statements you're making are just, you know, gold bug talking points, basically. Anyway, Rohit says this image is unironically worth$100 billion in annual revenues. Did you see this? Gemini Advanced. You ask it, what are the best headphones in the world? It says, it's a classic question with a delightfully complex answer. There's no single best pair of headphones in the world.

3:29:02Let's dive into it. It gives you this big, long text response. And then on the other side, you go to Google and you click and you search world's best headphones and it just immediately shows you exactly what you can buy. And what was your interpretation of this post? What do you think Rohit's trying to say with this? Well, I mean, first, this just goes back to what I was saying earlier is like the google dilemma is just will be a a hbs case study within probably five years around disrupting yourself yeah but not in necessarily a great way right there's some businesses that like we're going to disrupt ourselves and they sort of launch an iteration of what they're doing but don't kill their golden goose i mean i mean i think this is you know the funny thing here is uh i think that a lot of consumers the right side just getting shown the pretty picture i completely agree i completely agree i i don't think the llm response is better here i don't want to see a wall of text with headphones headphones specifically are not necessarily the best example because it's emotional it's like a part of your outfit it's highly you know personality driven it's not necessarily like i want a visual response and also i want like the data can be presented in ui better than just a big long text block so you look at the bows over here and it has the price the brand which is important the star rating that's also important but i mean gemini could easily just add those sponsored yes you know modules yes but but in terms of like big block of text like you know 4 000 words on the best headphones like that's cool but i and i'm okay with the llm kind of noodling on the question but i do still think that a lot of people would prefer just to have a visual representation of like here are here's what we think are the best here's five others that are potentially in the running in the conversation um and here's images prices you know just just basically write an entire uh wire cutter report instead of just being so...

3:31:05This highlighted to me just like the gap between the current UI for some of these use cases and then text. Yes, text is the universal interface to quote Waroon, but there still is a lot of benefit that comes from just UI and imagery. Yeah, the interesting thing here is, I mean, very easy for Google to just like move the sponsored module into the LLM. Yeah. But then the bigger issue for them is, you know, ChatGPT being the preferred consumer LLM and growing astronomically. Yeah, and I mean, you imagine that, I mean, Google has a decent image generation. I think they have actually a great one, especially with VO, the new video module.

3:31:53But there really is integration challenge in putting all of these together. Like we've been joking about, like the PDF upload, like when will like all these different models that you have to choose from everything's buried in drop downs and menus um it really would be better like actually integrating all of the different ai models into one unified search box like that's what google has done over the past 20 years right like you search for a flight it knows hey let's go to the flight ui and it has different it instantiates a ui that's not developed on the fly it's not coded on the fly ai certainly has that promise of that, but there's still plenty of, uh, plenty of, you know, business logic routing that can happen in the LLM.

3:32:34Like, you know, every once in a while I'll ask it, like generate an image or, or make an image of this and it'll just describe the prompt. And then it'll say like, Hey, do you want me to actually generate this? I kind of got confused. Did you want text or image? Um, and so clearly within chat GPT, there are multiple routes that it can go down. Like, do you want me to write code? And then if you say yes, it writes some code. Do you just want text? Do you want me to go out to the web and search? Do you want me to generate an image? There's kind of like four or five like tool usages. Google, when you search, has like 10 or 50, I don't know, hundreds, because there's like the Wikipedia knowledge box.

3:33:07There's also the flights. There's images. There's videos. There's all these different things that it can search and turn up in the UI. And the gap between that and where the LLMs are today, especially for some of the less productized AI products really is it's clearly like a path that opening is marching down but it's gonna take a while yeah anyway speaking of AI Sonia Wang from Sequoia is coming on the show tomorrow but she was recapping the third annual Sequoia AI Ascent absolutely banger lineup Jensen Wong from from Nvidia talked about token generating AI factories is the new industrial infrastructure.

3:33:46We were talking to her partner yesterday, Andrew Reed, and I have this big question of like, when will we see the first data center build out for humanoid robotics? Because it seems like until that happens, we're not really on the scaling curve of that technology. We've seen that for LLMs. We're starting to see it with self-driving cars, but we are definitely, you know there's a lot of noise in humanoid robotics but we're not actually seeing like the satellite images of the thousand hundred thousand h100s all go into one facility jim jim fan from nvidia was actually at ascent talking on about why simulation is key to robots passing the physical turing test and you would so you would think you'd be simulating on a huge scale you'd be doing a massive data center build that and that's something that uh it can't just be a talking point for a humanoid robotics ceo it has to actually be it has to be the domain of dylan patel and the semi-analysis until i see the satellite photo of your build-out uh i'm not fully convinced that we're there um but brett taylor becoming cto at age facebook cto at age 29 was there jeff dean one of the most legendary programmers of all time uh is over at google sam altman was there chase lockmiller from crusoe really uh really insane lineup stacked well we'll have to get more of her takeaways from that.

3:35:09Yeah. There's this other poster for moving to Europe. Your student debt will not follow you here. And so Andre says, we can weaponize American AI against them. And Bern Hobart says, sending Europe a bunch of people who have credentials indicating that they're suitable for office work, none of whom understand compound interest should be considered an act of sabotage similar to the Nord Stream attack, just sending our most indebted college grads to Europe. Anyway, we have our next guest. Let's bring him into the studio. We're excited to talk about Whoop, break down fitness trackers and everything that's going on today.

3:35:50Welcome to the stream. How are you doing? What's going on? Hey, what's up guys? How we doing? We're good. Great. Big day, big day for you today. Yeah. Congratulations. Yeah. Bring it down for us. No, it's great to be on with you. It's a, it's an exciting day for whoop. Obviously we build a wearable technology designed to improve health and performance. I've been building this company for 13 years. And I think if you chart kind of the history of the company, it started really around, you know, high-end athletic performance. And I think for the past decade, you've slowly seen the company evolve from being focused on, you know, the world's best athletes to being focused on a much more general population.

3:36:33And in a lot of ways, our launch today, I think, crystallizes that. We came out with two new hardwares, the Whoop 5.0 and the Whoop MG, 14-day battery life, a whole set of new health sensing, a battery pack that, you know, gives the the sensor up to a month of charge without needing another charge. And then we've come out with a whole suite of new features. So we came out with HealthSpan with WhoopAge, which will tell you essentially how old you are. I think it's going to be a fairly addictive feature based on people's response to it already. We came out with a heart screener with ECG. So you'll be able to screen your heart with a medically cleared feature that's cleared by the FDA.

3:37:22So you can do ECG monitoring, see if you have AFib, which affects about one to 2 % of the population. We came out with a whole new suite of women's health features, which is pretty exciting. Menstrual cycle coaching and then, you know, of course, like all sorts of new bands and apparel. We announced that we're going to be doing blood testing soon. So, you know, what started as, wait, you skipped over that, but I'm curious to dive deeper. That's, is that blood testing in, you know, people can visit labs or have somebody come to them or, or how far away from, from my whoop being able to, just give me a little prick, uh, you know, the original, uh, every, yeah, the hardware itself won't be giving you the prick, but we are going to enable clinical lab blood tests, which will then be integrated into your WHOOP data.

3:38:20I think a challenge that everyone feels as a consumer who cares about their health is, I've got some data over here. I've got some data at a doctor's office. I've got my WHOOP. I've got wearable data. And none of that information is connected and we're trying to bring more of that under the same umbrella. So, you know, we went from having strain, sleep, recovery, health monitoring, stress monitoring. We've now added things like, you know, ECG metrics. We came out with blood pressure today, which is a huge deal. And then, you know, on top of that, we're now going to be introducing things like blood testing.

3:38:58So when you start putting all of this data under the same roof, and you can layer in coaching and analysis, different forms of artificial intelligence, it's pretty powerful what you're going to be able to tell people. That's amazing. How competitive are you and the team? And how much does that impact your kind of product development cycle? I mean, I have to imagine like you know obviously there's a variety of fitness and health trackers out there but you guys seem to be very clearly at the at the edge with this new launch uh and i imagine already working on you know the next iteration but what's what's the culture like internally you know i wouldn't say we spend a lot of time um thinking about or talking about the competition in part because the space for wearables went from actually being incredibly competitive to now having maybe the fewest players it's ever had.

3:39:57If we were to talk about competition 10 years ago, right, I started the company in 2012, but let's say like 2015, we'd be talking about Nike and Adidas and Under Armour and Fitbit and Jawbone and Intel and Microsoft and Samsung and Google. And here are all the other companies that are going to enter the space and Amazon's coming and Facebook's coming. And so and of course, Apple has been in the space. So today, you know, it's really only like three or four companies that I think are playing a big role in pushing health monitoring. And I think we got this far by having our own point of view on the space.

3:40:43We've done things a little differently. We built a device that doesn't have a screen. You know, it really just focuses on health monitoring. It doesn't do a bunch of other things. It's not, you know, it's not a tool that you can get emails with or call an Uber with. It's really focused on health monitoring. So, you know, I think competition's real. I think you want to be paying attention to the market. but I wouldn't say that we spend a lot of time talking about competition. Now, that doesn't exactly answer your question because you asked if we're competitive. And I would say we are competitive.

3:41:19We like to win. When Amazon knocked us off, and so Amazon met with us in like 2018 to invest in the company, never invested, came out with a copycat product in 2020 called the Amazon Halo. And we were so competitive then towards them that their forwards on every circuit board we manufactured, we wrote, don't bother copying us, we will win. And we literally, that message was actually directed directly at Amazon because we knew they were going to reverse engineer it, right? Yeah, we knew they were taking our product apart. And so there was sort of like an inside joke that, of course, they were going to have to see that message.

3:42:00that's so that's so demoralizing you know you're like you're one product manager of of 300 you know working on halo and you just like discover this you're like guys i have i have some bad news for being you know we're being sent messages uh can you talk about the the i'm particularly interested in the in the health span feature uh you know i i've tried a variety of different um uh various you know testing companies over the years i'm i'm an investor in and famously your biological age is like what five years old three years old yeah yeah yeah this is this is our joke like there's this kind of like competitive dynamic if you're doing anything related to biomarkers that like you just drive it down eventually like they're gonna tell me i'm you know actually negative one like i'm still in the womb biologically uh but how do you guys kind of What does that product actually look like in practice and what was important to get right there?

3:42:57Yeah, it's a feature we've worked on for a few years now. And it's called Healthspan with Whoop Age. And it really has two key numbers. The first is your Whoop Age, which is essentially what we define as your real biological age, which is obviously different than your chronological age. and then it's got your pace of aging, which ranges from negative 1x to 3x, and the lower, the better for that. And those two numbers kind of play off one another. The age itself is based on six months of data, and the pace of aging is looking at your last 30 days. So you kind of get a sense for, have my recent behaviors been positively affecting my overall health?

3:43:44And we developed this feature in partnership with the Buck Institute, which is one of the top institutes for longevity in the world. And in particular, we worked with an expert named Dr. Eric Verdon. And we looked at a universe of all the different variables that are related with all-cause mortality. And, you know, we looked at a pretty large universe of different metrics. But ultimately, we settled on nine that most closely correlated with all-cause mortality or were leading indicators of all-cause mortality. And those include the hours of sleep you get, your sleep consistency, exercise as measured as like the time you spend in heart rate zones, your steps throughout the day, your VO2 max, which is a huge one, the amount of time you spend strength training, and your resting heart rate, and so lean body mass.

3:44:48So we took each of these metrics. We actually show some of the research that is related to each one of them. And when you get the feature, you can go down every single of those nine metrics and see the degree to which it's adding or subtracting from your age. And in a lot of ways, it's probably one of the first times Whoop has been really explicit on how good you are at a specific metric relative to your age and your gender. And so people have found it very actionable because maybe you're great at these five things and these four things are making you older. And so now you know what you have to work on.

3:45:31Yeah, very cool. I have a question about Meta Ray-Bans partner with Luxottica Ray-Bans. Have you ever thought about partnering? Jordy was joking that you should partner with Patek Philippe or potentially Vacheron Constantin or maybe Audemars Piguet. But have you ever explored that? Do you see it in the future? What do you think on the partnership side? We're certainly open to different partnerships. We haven't done a lot of them today. I think there's a few different categories of partnerships. So, you know, one would be around just like the whole universe of accessories and apparel that Whoop has.

3:46:10Actually, one of the things that's quite unique to Whoop is it's the most customizable wearable on the market. So you can create 70 ,000 different types of bands and looks and feels for the product. I mean, for your audience that's watching this, that's not familiar with the product, like I'm just showing it right now. But, you know, these bands come off very easily. And you can swap in and out all sorts of different colors and looks and feels. We've got, you know, everything from leather to cashmere to, you know, an everyday silicone. And so we are looking at different partners in that category where maybe we'll do specific band developments with someone.

3:46:51The sensor can also be worn in different locations on your body, which is something that's unique to Woob. So you can wear it on your upper arm, you can wear it in your boxers, you can wear it in shorts, women's bra, underwear. And so today, Whoop makes all of our own apparel as well. But that's, as you can imagine, another area for potential partnership. another category i would say of partnerships is around data and so you know whoop obviously has a unique set of data and then look there's other products on the market that have unique sets of data a very simple example of this was we partnered with um with withings um you know about nine months ago and you know everyone who has a certain withing scale when they step on it it goes straight into the whoop app it updates their profile the the weight the lean body mass would feed into your health span.

3:47:42So things like that, that just feel really seamless. You know, you asked about like meta and Ray-Bans and those sorts of things. I think from like a data display standpoint, you know, we'll go where the eyeballs go, right? Obviously today, everyone's got a smartphone. So as a consequence, we have an iPhone app and an Android app, right? If one of those platforms emerges as being really popular uh you know one of these ar platforms i could certainly imagine uh whoop data appearing there i think at the end of the day we view ourselves as a tool for collecting this data and helping explain it but we are open-minded to like what the platform is that you analyze it on it makes a lot of sense jordy last question on my side uh and then i i need to go get uh one of the new ones yeah very curious now um uh how i'm assuming since i imagine the majority of your revenue it is really on the software side does that mean that the terror like and i imagine a lot of your manufacturing is in is in asia my my uninformed assumption is that you guys aren't terribly impacted by this given that um i imagine you know the real value that people are getting is from sort of the ongoing sort of membership.

3:49:02But talk about that and maybe how you're kind of planning around the tariffs. Look, I mean, we are impacted by it, no question. We manufacture some products in China. We also do some manufacturing in Mexico. We've got accessories and apparel that we source around the world. So yeah, look, the tariffs have impacted us. You know, I think for now we're taking it on the chin rather than passing it to consumers. And, you know, my expectation is that some of this will evolve. And look, our standpoint as well is, all right, we have to have a manufacturing policy that adapts to where the U.S. is and U.S.

3:49:49relations with China and all of these different things. So I would say we're looking at a few different options in that category, but we haven't done anything yet that directly affects the consumer in a negative way. And at least I'm happy with that. Yeah, that makes sense. Well, this is exciting. Yeah, congratulations. Where can people get it? Whoop.com. Whoop.com. Let's go. Whoop.com, baby. and uh and i just want to say congrats to you guys i think on creating a cool new category in this show i've enjoyed seeing snippets on uh on the internet and listening to you guys i i appreciate what you do thank you thank you well come back on whenever you have news yeah we'll see you soon yeah we might we might start we might have to start flashing our our health spans on the chyron so that uh it works well we we track our our eight sleep scores uh daily with the audience to sort of keep ourselves accountable but just we want to just because the audience wants that yeah yeah we're gonna add every single health metric because we want to we want to do this for decades you can't you can't stream for three hours a day without taking your health very seriously yeah i think like every 30 days just kind of a live update on your age your health yeah that's great that's what the people need yeah wait doing the show three hours a day aged you 10 years in three months what happened jordy yeah hopefully not awesome well congrats to you and the team on the launch and uh we'll talk more soon we'll talk more soon thanks so much bye cheers fantastic giga stream i think we're over four hours now getting close to four hours actually right on the dot so thank you if you watch the whole thing thank you if you watch some clips thank you if you bought from any of our sponsors we have another great show tomorrow yeah i'm looking forward to it it's gonna be friday and that means it's rough it's the worst day of the week it's our last day of podcasting for the week yeah but we got it we we got another week next and then another week monday always comes around yeah thanks folks thank you for watching we'll see you soon have a great day