David Tisch, Mike Vernal, Edward Mehr, Will Brown, Stocks Mogged as Trade War Escalates, R.I.P. Pope Francis, How Prior Beliefs Distort Perceptions, Why Robots Still Can't Make Nikes, Robots Join Chinese Half-Marathon

26:03Of course, there were algorithms that would decide what content to serve you, but it wasn't, it was still heavily based on the social graph. Filter bubble is the term I'm looking for. Filter bubble. Filter bubble. And so you would search for like, you would start a search like, you know, what to do after college. How do I get a job? And then you would land on, you know, a Jordan Peterson video that was just, you know, about how to live your life, make your bed, right? But then Jordan Peterson also had conservative views. And so you would go from the general life advice into his conservative views.

26:36But, and then he's not really that extreme, but then there'd be someone else who was recommended who was like just political, less life advice and a little bit more extreme. And then a little bit more extreme. Make your bed with an American flag. Exactly. And so people would go down these filter bubbles, and then pretty soon everything they would be seeing was there. Zuck made the argument that we haven't seen political polarization in other countries where Facebook is very active. And so he was saying maybe this is more of a reflection on America than Facebook as a product, because the usage data is really high.

27:10I think his example was like Malaysia or Indonesia or something, and their society wasn't as polarized as America. but I think it's interesting that it's potentially merely the explosion of information that creates division and if you're just exposed to if you're literally living in a cave you're less partisan it's kind of interesting so yeah I mean I don't really know where all this goes like does it exonerate Facebook and the social media platforms entirely Clearly, there are some platforms that are extremely skewed and biased. That's kind of like by design almost. But it's interesting to dig into, at the very least, you as an individual need to understand if you're interpreting those A-B signals, those neutral evidence points, as adding to your side.

28:06I think it also applies to the last few weeks with the tariffs. People are like, oh, treasuries are selling off. Oh, gold is, gold is ripping. Bitcoin is ripping. And everybody's seeing sort of the same set of information, but applying different beliefs to it. Somebody might say, you know, gold is ripping. You know, people are, you know, basically shorting the dollar. They're short the dollar. They're short America. So they're buying gold. Yet every financial crisis, for the most part, people tend to buy gold because it's seen as, you know, more stable and predictable. and a true store of value.

28:45Same thing with treasury selling off. It's like, okay, if you're in a trade war and there's this complex geopolitical dynamic and T-bill yields are ripping because foreign governments are selling them, well, there could be a lot of other reasons other than purely just sell America, America's over, the dollar's done, that kind of thing. and so yeah it's it's hard to yeah it's hard to balance all the different signals but if you're looking to get in on the action with some gold why don't you buy a gold watch on Vessel go to getveessel.com download the app pick up a Rolex Day-Date a lot of people think oh I should buy gold yeah I'm gonna go get some gold bars yeah why not why not gold something you can protect Philippe instead that's right or gold yeah Buy a gold watch, go to Bezel.

29:40Your Bezel concierge is available and now to source any watch on the planet. Seriously, any watch. Not financial advice. Not financial advice. But speaking of things that are somewhat related to fashion, robots are having trouble making Nike sneakers. This is an interesting story in the context of re-industrialization. Trey Stevens had a piece on Pirate Wires all about the importance of robotics and automation in the reindustrialization story that we should go through or talk to him about. But I thought this was an interesting discussion of like, okay, if the tariffs are here to stay and we are trying to boost US manufacturing, what can we learn from Nike's move to Asia historically?

30:27And so Trump is betting that the threat of tariffs on low-cost countries in Asia will pressure American companies to bring back manufacturing and jobs to the United States. But high U.S. labor costs mean companies would have to find a way to replace human workers with machines. For some industries, that's proved surprisingly difficult. Indeed, a years-long effort by Nike to shift part of its manufacturing from China, Indonesia, and Vietnam to North America illustrates how tough it is for U.S. brands to wean themselves off of the flexible, low-cost contract manufacturers that use armies of laborers to churn out an array of products for consumers.

31:07Yeah, I mean, one of the interesting things about the push in Foxconn, where they bring in a million migrant workers, is that you can't really do that with robots. Like the CapEx, there's no fungible flow of robotics yet that you could say, hey, we just need to move. Yeah, you can imagine a world in the future where you bring in 100 ,000 on-demand robots for a sprint, a seasonal sprint. But that world also feels 10, 15 years away. It's hard to imagine it happening in three years or on the timeline that the tariffs are on, which is the most pressing issue. Yeah, yeah, yeah. It's not something that a company can think like, okay, these tariffs are going to affect our Q3 results.

31:53How do we automate everything? So this actually started a decade ago, and it feels like we're still a few decades out from the robotics automation of footwear manufacturing. But back in 2015, Nike poured millions of dollars into an ambitious effort to partly automate what has always been a highly labor-intensive industry that's making shoes. At the time, rising labor costs in China and advances in manufacturing techniques such as 3D printing opened the possibility of finding a new way to make shoes that would rely on fewer workers. Have you ever seen Zellerfeld? It's a 3D-printed shoe company.

32:27We should have the CEO on. I've met him at a party once. seemed like a good uh uh and i think the company is doing very well um but they've but they've been obviously like small because they're a startup um but it'll be interesting to see about where where he thinks that will go um yeah but this is interesting because even as far back as 2015 nike won it was trying to think about bringing production back to north america localizing it and uh it hasn't exactly panned out yeah yeah uh which puts them in a tough position right because they're like, hey, we're getting tariffed, and we've also made a good faith effort to do this, and it didn't pan out.

33:06Now here we are, kind of stuck between a rock and a hard place. Yeah, so Nike partnered with this company called Flex, an American manufacturer that helped Apple set up a complex factory in Texas to make Mac Pros. That's the one that there was that picture of Donald Trump cutting the ribbon. The goal was to make tens of millions of Nike sneakers at a new high-tech manufacturing site in Guadalajara, Mexico by 2023. The plant would still include thousands of workers, but far fewer than are needed in Asia to make the same number of sneakers. If successful, the project could be a model for production in the United States, according to some involved in the effort.

33:46Nike's competitors also sensed an opportunity to rethink manufacturing built around massive Asian factories where armies of cheap, skilled laborers stitch fabrics and glue soles to shoes on hand. It feels less modern, more like a Ford Model T production line combined with a middle ages cobbler's bench, said Kevin Haley, the executive vice president of innovation at clothing maker Under Armour in 2015. He pledged to use automation to make shoes in Baltimore in a project he called Project Glory. Love it. Good name. But, you know, it's rough. Adidas also got in the action. They launched speed factories in Atlanta and Germany with high-tech manufacturing that's quickly spit out shoes, heralding a new era in footwear creation.

34:30They want to move out of China and Vietnam. They have the technology to do that differently, said Mike Dennison, Flex's then president in 2016. Nike's effort was the boldest. The company aimed for large-scale automated production under a decade, which it said would save on labor costs and allow it to deliver new models of shoes to Americans faster. Tom Fletcher, who oversaw the project for Flex came into the effort feeling confident, having just built a highly complex Mac Pro factory for Apple in Austin, Texas. You would think that making shoes would be easier than making Mac Pros, and yet they ran into some trouble.

35:05At the time, Apple had been looking to bring some manufacturing home. Flex pushed to rejigger production lines and use automation, trying to find as many ways as possible to minimize human interaction. That experience came in handy. Corey? No, it's just interesting. I think Flex has not exactly performed despite the boost in interest in localized manufacturing. Are you looking at the stock? Yeah. How big is the company? They're a very large company already. $30 billion. $30 billion. I'm guessing one of –$30 billion of revenue. I'm guessing one of the reasons for this is I bet their supply chain – yep.

35:45But they've still got, despite making efforts to help onshore, they have quite a bit of exposure to Asia. Everyone does these days. If you dig deep enough, you're going to find some tariffed goods in your supply chain, no matter who you are. So the machines were supposed to build the upper part of the shoe, knit fabric, add logos, and glue the sole. I talked to somebody who was doing some outsourcing of the upper in China, went over there while the tariffs were there. Very chaotic. And yeah, just like a very rough go, big culture clash moment. And so these efforts ran into trouble. The robots struggled to handle the soft, squishy, and stretchy parts that are integral to shoemaking.

36:33Shoe fabrics also expand and contract depending on the temperature. While in shoemaking, no two soles are exactly alike. So, yeah, I mean, if you consider, like, the benefit of automation on a car production line is that, like, some of these parts are too heavy for people to lift. So you have to use a machine. And then it's the same stamped, you know, metal every single time. And it's dangerous. And it's also just the exact same way. And then there's also welding going on. And shoes are much smaller and more fine-grained and then, obviously, more malleable. Yeah. that everything about making electronics is about perfect precision, right?

37:14It's making sure that a component has a specific spot within a device, and you need to make sure that it goes there. You kind of don't want a human on that. Yeah, you can imagine that being harder for a human to do very consistently. Yeah, totally. But if it means like, hey, we need to put this string in this hole and then that hole and over here uh feels very difficult for a robot to do uh you know entirely reliably yeah uh all these things all these things always sound trivial yep hey we're gonna make a robot that makes shoes it sounds so easy honestly yeah it doesn't sound it doesn't sound as hard as it is in practice right that you have nike doing i think it's i i would imagine that crocs are fairly automated because it's kind of just like almost 3d printing Yeah, pour the polymer in a mold and you're good.

38:07Just kind of like melt it together. But for something as complex as a Nike shoe that has a sole, a logo sewn on, there's, I mean, even just lacing a shoe, like that is an incredibly difficult task for a robot, right? And they come laced. You have to poke those through. It's hard for me sometimes. Shoes don't lace themselves. No. You're trying to do something very precise, and then it gets a little colder or warmer, and the material changes on you. We did not anticipate that. As a result, factory production never became as automated as envisioned. As shoe production increased, the factory personnel swelled to 5 ,000, about twice as many as originally planned and costing more than a similar workforce in Vietnam.

38:50Task after task proved challenging to automate, like the delicate work of gluing soles to the upper part of the shoe. If you didn't lay it the right way, there would be a noticeable twist of the shoe, a misalignment that aesthetically means it would fail quality tests. A central product was also a huge variety of shoes Nike produces. For decades, American consumer companies have given designers nearly unlimited freedom to dream up the coolest products and relied on Asian manufacturers to deliver them. Unlike cars or iPhones, shoe models are changing all the time. Yeah, I mean, if you think about some of the, like the How It's Made episodes that clearly are heavily automated, it's very much stuff like, you know, even like food manufacturing.

39:30It's like every Cheeto is going to be the same. They're just going to go in like slightly different size bags. And you can just imagine, you know, all that going down a conveyor belt. A little bit trickier when you're assembling a shoe where, you know, they're all different sizes. Yeah. I mean, just the sizing thing is crazy, right? It's like it's a plastic bag. Yeah. And then something needs to go in it. Yep. Fill it up and it moves down. Yep. It's like far more easy than a shoe which has, I bet the average Nike shoe has. I mean, they sell a lot of them. How many individual components. but they sell a lot of them but when you think about the skew complexity i mean what are there like 20 different sizes of men's shoes just for a vanilla run if you just want to be able to reach everyone from like a size 4 to a size 14 or something like you're you're in a very custom typically 23 parts to a shoe 23 parts each one of those needs to be different for the color lining and the color needs to be different quarter quarter over later bam outsole tip laces swoosh Wow.

40:27It's like a miracle that these even exist. That's whole boxing. Yeah, and then the sizing thing you were talking about. It's like, great. You get it working for one size. Is it going to work when you need to do the triple XL? The next size. Size 15. Okay, it's fine. It's no big deal. So automating manufacturing means designing simple products that machines can undertake over and over. Electronics manufacturing uses hard, standardized materials, as you mentioned, allowing machines to replicate the same step millions of times. You'll have to make sacrifices from how to design to the complexity of the materials and models you work with, says the former Nike executive who oversaw the project.

41:05That goes against what the consumer wants. They want an incredible diversity of product. And we see this in cars, like the Tesla Model 3, Model S, they look very similar. Even the Y and the X look very similar. They often come in the same colors. There aren't that many. You don't really see that many with like, oh, this one has fender flares. This one has wings on it. Like all that stuff would be completely aftermarket. It doesn't come from the factory that way. Versus, you know, a more mature company like Mercedes sells like a wagon version of the E450, right? The E63. They also sell convertibles of the C-series.

41:43They sell long wheelbase versions. They sell SUV versions, electric versions. For example, the Q8 is the same as the Cayenne, is the same as the Urus. Yeah, yeah, yeah. Same powertrain, right? All Volkswagen. So it's like basically the same car with like a different exterior and a different exhaust. And consumers want that. Consumers want that. And so, I mean, Elon's found a way, and we'll go into the Tesla story later, but Elon's found a way to convince people in mass, at least during the height of the Tesla boom, to, you know, say, hey, yeah, it's going to look like every other Tesla 3 and you're going to get lost in the parking lot probably.

42:21But it has a summon feature. It has the best self-driving. it's electric it's super cheap found a new way to differentiate exactly so it's like this appliance car it's like it's moving it to the iphone nike if they really wanted to go all in on automation they should have found a way to make a product that is as ubiquitous as the iphone with as little standard as or as much standardization as possible is just getting hammered hammered down another no seven percent but they're suffering from the trade trade war tariffs tariffs, but then also the lack of a naturally aspirated V8. Also just a broader tech sell-off.

42:54Yeah. Yeah. And, yeah, I mean, still no news about a gated manual, right? That's right. And so that's got to hurt the stock. We're kind of waiting on that. We're waiting on that. Ferrari's coming back, by the way, with a manual. They're doing a manual V8. Did they name it yet? I don't know. But, no, all they said was that we are committing to a manual ICE, like no hybrid car. they heard the vibe shift well they saw what happened with porsche yeah because porsche launched thest which was really great and then the r i believe was was manual as well and so they said like there are certain collectors that just want manual like more analog cars and they're willing to pay for them and it makes sense for her yeah i was trying to think about it i was trying to think what is the desire a highly desirable car that is a hybrid or electric LaFerrari LaFerrari I don't think LaFerrari is a hybrid I'm almost positive it is Is it?

43:55Yeah You're right You're right Mogged Mogged 918 Spyder Hybrid Yeah the Spyder too 296 But Hybrid I guess I could have Made it more precise In the last few years Right In the last few years I mean there's a new 911 That has a hybrid I think it'll sell pretty well um what else who else uh it is the is the latest uh w1 from mclaren yeah i'm sure that is it's got to be hybrid right everything's hybrid now anyway let's get back to nike uh at one point it took the flex team eight months to figure out how to automate a way to put the nike swoosh on a shoe only for nike to move on to a new shoe line for which the method nike developed no longer worked and so there's just this cadence of like new shoes they have to have new new new styles uh they said it would have been easier to mass produce uncomplicated shoes such as ones with a machine knit upper part and matched with simple molded bottoms but nike was unwilling to put limits on its design and expected manufacturers to produce whatever new shoes their teams dreamed up manufacturing in a lot of ways did not have an equal seat at the table and that's interesting because obviously the manufacturing of the iPhone is deeply integrated into the company.

45:13And they drive the manufacturing optimization that happens at Foxconn. This is the whole debate about, are they transferring too much IP? But you know that the iPhone team is thinking about what is available on the camera side, how does that fit in, and then how can they build software on top of that? And that vertical integration has really led Apple to have this integrated approach that creates a fantastic product. But it feels like Nike was very much still in the mindset of like, let's separate. He said, how could we design the phone so that it would be insane to not get a case? Oh, what if we made it so the camera, like one of the primary use cases of the device, protrudes across the back so it doesn't sit flat?

45:53That is brilliant. So by 2017, Flex's investors were balking at rising costs at the company with some questioning why an outfit that makes electronics was involved in shoe production. Flex and Nike wound up the project. Which I actually think is smart. It's like, hey, who's done really advanced, scaled consumer product manufacturing? Okay, they've done it in electronics. Probably a better, generally a safe bet. Yep. But it wasn't safe enough. And so Flex and Nike wound up the project by early 2019. By then, Under Armour had stopped mentioning to its investors Project Glory to make shoes in the United States.

46:30That year, Adidas, which had also faced challenges producing complex shoes with robots, said it would close down production in Atlanta and Germany. It shipped its speed factory technology to suppliers in Asia. The three shoemakers stuck with their original offshore locations, Vietnam, China, and Indonesia. Even after pandemic era, factory shutdown showed the risk of having such a concentrated node of production. Adidas, Under Armour, and Nike, they are not talking to the journal about this. But now China, Vietnam, and Indonesia are in Trump's sights. They got huge tariffs on them. And there will be an army.

47:07Howard Lutnick said that the administration wants labor-intensive industries to return to the U.S. He actually said that there will be an army of millions and millions of people screwing in little, little screws to make iPhones. He says, we're going to make them here. That's a word-for-word quote. Word-for-word quote in a recent interview with CBS. All right. I threw my How to Make iPhones book in the trash. Nope. I need to go try to get it out. I need to go find a dump that they took it to. Yeah. You got to get it back. The threat of new tariffs is pushing some to ask whether Nike or others will ultimately have to reconsider efforts to automate manufacturing and bring shoe production back to the US.

47:46People think it could still be done, although it won't be easy. You need some deep pockets and some patience because it's not going to happen fast. But yeah, we'll see. You know what aren't patient? Who? Tariffs. They're hitting. They're hitting right now. Right now. But if you want to track the tariffs, head over to Polymarket. I'm sure there's a bunch of great markets on what's happening in the tariff world. And if you're looking to cut costs because of tariffs, head over to RAMP. Time is money. Save both. They've got easy-to-use corporate cards, bill payments, accounting, and a whole lot more all in one place.

48:17Let's move over to the next story. Man versus machine as China shows off humanoid robots in half marathon. It's pretty crazy. Somebody came up to us in the gym this morning and was like, you guys are talking about this, right? And we were like, oh, I actually hadn't heard this. But it is in the journal. China, the Beijing half marathon featured a road race between humans and 21 different robot models. And it showed how far robots are from mimicking people. Good example of why it's difficult to make shoes. It's also difficult for robots to run in shoes. Yeah. They're both having trouble. We've been saying, would like to see a humanoid robot drink 12 beers and play 18 and call it work.

49:02Exactly. It's not happening this year. Not happening this year. Not this year. So the Tian Kang Kong Ultra, a humanoid robot, runs across the finish line of a half marathon in Beijing. So let's run through this. Metal Asphalt. Metal met asphalt in a half marathon that featured thousands of human runners and 21 Chinese humanoid robot models. Saturday's road race involving human runners and a score of robots in Beijing has been billed as a showcase of China's cutting edge technology. I gotta say, this is extremely cool for the robotics industry and we should be doing this here. I mean, you saw this with like - No, I posted, you remember I posted we need a humanoid at X Games, right?

49:38I want to see humanoids doing - Yes, yes, surfing. I want them to see - Do the 360, do the 1080, 900. Any like athlete that Red Bull sponsors, humanoid robot companies should be saying, hey, we're gonna get our humanoid to go cliff jumping, to go bungee jumping, to do it. I want to see like - We really got to have the 1X founders on, the Neo and a bunch of the other humanoid robotic founders on to talk about all our crazy ideas and force them to do it. Big wave surfing. Big wave surfing. That seems like the Turing test for humanoid robotics because if you can be waterproof and also, I mean, I imagine these robots are pretty heavy.

50:16You got to sink. Yeah, that's the real test is a triathlon, right? You swim, yeah. You swim. Can you swim? Humanoid robot that swims? That's crazy. How's your battery going to hold up in an hour in salt water? Yeah. Yeah. Is a honey stinger going to take you across the finish line? I don't think so. You're going to have to be recharging for an hour, robot. So it's a 13-mile race, first of its kind. The interesting thing is the size difference. Everybody just assumes humanoids will be six foot. Yep. They had four-foot humanoids in there. Four-foot humanoids. Okay. Little guys running around. So China has said it wants the country to be a world leader in humanoid robots by 2027.

50:55They are well on their way based on what I've seen. Chinese authorities have lavish support such as subsidies, talent bonuses, and tax breaks on robotics companies. Really? You're telling me that for the first time. They know how to do some central planning over there. Yep. Say what you will about capitalism. 14 back-to-back five-year plans. to subsidize industries. There's another model that seems to be working pretty well. In reality, the race showed both how quickly and smoothly some robots are able to run, but also how far away humanoids are from being able to mimic human activity. Running is a very basic ability of human beings, says the chief technology officer of the Beijing Humanoid Robot Innovation Center, which developed one of the robots.

51:44China is making a major push to produce more and more sophisticated robots, in part to raise the automation level of its factories. Oh, they actually put the robot in sketchers. That's really cute. It's interesting, too. So these weren't autonomous, right? There was people following behind the robots, actually driving them with a joystick, like it's an RC car, but still a very incredible feat. Okay, so the first robot off the mark was the Tien Kung Ultra, 5 '9". Hey, got to put you in the truth zone. They're not 4 feet tall. No, they're 4 '2", 6 feet. Yeah, yeah, yeah. 5 '9", 115 pounds, humanoid.

52:29Ideal build. Featuring a pitch black head and sporting an orange tank top. Three people accompanied it to help control the robot. The race was the culmination of months of training. They had to navigate the course's flat and hilly roads and maneuver around six left turns and eight right turns, according to the organizers. Developers had to train the robots to keep their stability and balance to avoid falling over. The organizers initially planned to cut off the race at around three and a half hours, meaning that the minimum average speed was 3.7 miles per hour. Developers said that humanoid robots can typically operate for no more than two hours on a single charge of their batteries.

53:02The faster they run, the shorter the distance they can cover. Components and parts could easily break while running, so developers replaced plastic parts with metal and used extra strong but costly materials. One company trained their humanoids by connecting the robot to a fitness machine like metal stand to prevent it from falling. Tian Kung Ultra was developed by the Beijing Humanoid Robotic Innovation Center, a research institute also called Exhumanoid and formed by robotics firm UB Tech, electronics and electric vehicle maker Xiaomi and the local Beijing government. It could run an average of six miles an hour and could handle hills, stairs, grass, and sand, said a profile on a robot.

53:39Yeah, this makes you think we have a number of American humanoids, Boston Dynamics, One X, Figure, Tesla Optimus, there's a bunch, right? But we actually should have way, way more. If this is going to be very important technology, we should have 20 plus venture-backed companies sort of vying for this, right? They don't all need to raise hundreds of millions or billions of dollars, but it's an area that we should be probably investing more in. And so as they're running the race, Tien Kung Ultra falls down because the battery failed. The robots were allowed to swap batteries and they changed the battery three times on this particular robot.

54:18Wound up finishing the race. The human male champion completed the race in one hour, two minutes and 36 seconds. It's pretty fast. Followed by thousands of exhilarated human runners. Some were exhausted, resting nearby to catch their breath. After two hours, 40 minutes, and 42 seconds, Tian Kung Ultra was the first robot to reach the finish line. A large crowd of spectators, including government officials, were eagerly awaiting the robots. In the end, only Tian Kung Ultra and Little Rascal N2 were able to meet the original cutoff time. The organizers extended it to four hours and 10 minutes so that more robots could finish the race.

54:58So the humans still got it, But, I mean, you look at the trend line here, I think in a couple years they're going to be crushing this. I see no reason why. It feels like a lot of it's probably battery technology. Like maybe they keep swapping the battery and that's fine. But if they can really find some sort of battery breakthrough, that's going to enable more power. And like running in a straight line and some slight curves here and there, that doesn't seem like even as much of a challenge as like assembling a Nike shoe, right? It seems pretty simple. And so they should be able to win this pretty soon.

55:33Bell helicopter carrying a bunch of batteries with an extension cord. Oh, extension cord. That a humanoid is sprinting. Unstoppable for sure. 50 miles an hour. Unstoppable for sure. Anyway. Very impressive. Should we move on to some big funding news? Yeah. Grunz lands valuation around$500 million as supplement startups boom. You're familiar with this company. I was less familiar. I saw Austin Reef talking about it. I'm not super familiar. Yeah, follow them a little bit just because I had been aware that they had. I had heard about their first year numbers, and it was. kind of unbelievable. Yeah.

56:16Like it was a lot of companies have got to the, Their gross revenue, I think, in their first year is the run rate that best-in-class companies can sometimes get to at the end of their first year. But they actually did it in that year, wasn't it? So clearly the founder is an absolute dog. Yeah, was it Austin who was talking about this idea? He says, Grunz was the most obvious billion-dollar idea hiding in plain sight. AG1 is a$600 million revenue business. The founder of Grunz was like, what if I took AG1 and put it in a form factor that is easier to consume and doesn't taste like SHIT? Easiest billion dollars anyone will ever make.

57:00And I don't know enough about the company to agree with that. I can tell you probably exactly why it's working so little nominative determinism. The founder's name is Chad. Okay. So that probably has had something to do with the success. But yeah, the idea of taking - Is he the points guy or something? People are saying he was like a points guy. I don't know. He says he's founder of Gruns Daily, previous Stanford GSB. He was at Summit Partners. And he's on the board of Ruggable, Dr. Squatch, Brooklinen, Solo Stove, and seven more. So like really, really great scaled up consumer products companies.

57:39I've seen the, I had a friend who was applying to work at Ruggable and the, uh, the economics of that business were fantastic. Are you familiar with Ruggable? Ruggable, uh, is one. And then Dr. Squatch is also very under the radar. I think that's going to be a massive outcome. Yeah. I mean, we're seeing this with the Ridgewallet guys. Like there's, there's increasingly a divide between, uh, like, like good idea gets market traction, but the real killers come in and optimize the business and just actually get the full value out of the company or out of the market. So throw in Chad a follow. But let's read through some of the information article on this.

58:17So investors are on a health kick looking for new ways to tap into the fast-growing brands and the nutrition sector. This includes pouring money into startups selling supplements, particularly those that offer new ways for people to load up on vitamins, protein, and other ingredients. The latest example is a two-year-old gummy supplement startup Grunz, which raised fresh cash at an up to$500 million valuation in recent weeks, according to people briefed on the deal. Their monthly sales were roughly $10 million earlier this year. They recently added kids products as well as a sugar-free version of its adult gummies and a fresh influx of cash, nearly$10 million according to securities filings.

58:54Wow, really low dilution if that's$10 million on 500 posts. Not bad. They're making plenty of money themselves. One thing, the American consumer has always been undefeated, but is especially undefeated in the context of gummy vitamins. Everyone loves gummy anything. I've seen so many different... Dan with Create. I was initially... I talked to Dan right when he was starting Create, and I was a little bit skeptical around the market that he was going for. I'd taken creatine forever. Yep. But he was the first company that I'm aware of to put creatine in gummy format. Yep. And I talked to him like two months later.

59:42It was like so obvious that the business was just working phenomenally well. And he's been knocked off a bunch of times since then. But fortunately, there's an interesting thing in the gummy space where there's always been issues with quality in the supplement space. Yeah, yeah. Dan was talking about this. Specifically in gummies. In creatine. I watched a YouTube video about this separately, and then Dan posted about it, how some mass monster bodybuilding guy tested 20 of the top Amazon creatine gummies. A lot of them had zero creatine gummies. Yeah, 0.0001 % of the label claim is wild. Anyway, Chad, if you're a real Chad and you're serious about growing this business, get on Numeral.

1:00:22Go to Numeral HQ, sales tax on autopilot. You know you're going to have to be paying sales tax on this stuff all over America. You can spend less than five minutes per month on sales tax compliance. That's right. Anyway, I want to keep digging into this a little bit and then we'll move on to the next story. So they have other hot brands include Create Wellness. That's our boy, a line of creatine gummies which tapped into the muscle building supplements growing popularity on social media to raise$5 million in Series A funding last fall. The brand has launched in retailers and is on pace for around$25 million in annual revenue when it raised fresh cash.

1:00:53Let's hear it for Create Gummies. Damn, good job. The rise in popularity of weight loss drugs is also providing a marketing angle. Unilever, too. Unilever's in the game? Oh, it was in that deal. Yeah. Oh, that's awesome. With brands claiming they enhance weight loss or help with side effects of the drugs. Grunz, for instance, has run digital ads. I had to just look that up. I thought I was leaking. Yeah. He did announce it last year. Oh, yeah. I was like, wow, I just broke your fundraise, Dan. Sorry about that. No, no. It's in the information already. And so Grunz has run digital ads targeting people taking drugs like Ozempic who want to keep getting appropriate nutrients as their appetite fades.

1:01:31That makes sense. Whenever you're on a cut and you're in a caloric deficit, whether it's caused by Ozempic or just keeping yourself hungry because you're trying to get diced for summer, you want to maintain enough protein and enough creatine and enough hypertrophy training and hard training so that you don't lose muscle mass during that cut. Micronutrients too. Micronutrients too. Which is what Grunz is doing. Yeah. And so they sell a monthly supply of gummy vitamins for$79 or$59 for monthly subscribers. They say the products pack more than 60 vitamins, minerals, and other ingredients into one serving.

1:02:02And it markets its gummies as cheaper, more convenient version of popular greens powders, which are made of powdered vegetables and fruits mixed together into water or smoothies. Did you ever hear about this company, Goalie? Yeah. Goalie. Wasn't that for Gut Health? The apple cider vinegar gummies? Yeah. Aren't they really big? They are large. They do hundreds of millions of annual revenue. Wild. I think they've been somewhat unsuccessful in terms of like capturing kind of enterprise value around it. That said, just to give you a sense of the scale, they have 364 ,000 reviews on Amazon. So they sell.

1:02:38300 ,000 reviews. Yeah. Wow. So run the numbers on what percentage of their customers you think have left an Amazon review. Yeah. And then you can get a sense of their scale. But it's in the hundreds of millions of annual revenue. So again, Americans are buying billions and billions and billions of dollars of vitamins. You know what else has great reviews? Eight Sleep. I got an 81 last night. I'm getting up on the routine. Quality and time slap was a little bit lower. But go and get a Pod 4 Ultra, five-year warranty, 30-night risk-free trial, free returns, free shipping. Go to eightsleep.com slash tbpn.

1:03:15Last night, Autopilot made adjustments to boost my deep sleep by 42%. Fantastic. Thank you, Autopilot. I actually went to bed later than I would have liked because - I was watching last of us. Oh, you watched the Nathan for You. It's not Nathan for You, but it's the rehearsal. Yeah, I love it. Was it good? And honestly, I almost was texting the team because they basically recreated an entire airport in the episode just for one of these rehearsals. That's the bar. It's our new studio, which hopefully we're signing the lease on today. We've been in diligence for a while. But we're going to have to just recreate LAX if we want to reach Nathan Fielder levels.

1:04:03He's been on a fantastic run. I've enjoyed everything he's put out. The old Nathan for you episodes are iconic. Very rare to have business and comedy work so well together. The new season is about aircraft safety. Amazing. so can't wait i'm i'm enjoying last of us although uh it is terrifying it's essentially a horror film and it's not ideal for the deep sleep i think so i might try and push that to you know maybe saturday afternoon it's so funny because because white lotus ended yep hbo likes to keep the dread and my my wife was like i'm very i'm i'm happy that we're not going to like be having these crazy cliffhangers and like scary scenes right before bed and then nathan fielder's like sitting there like walking through like the history of like every terrible you know aircraft you know uh accident and it's just like extremely stressful yeah so um go check it out go check it out i mean uh in in the world of hollywood the name of the game is getting an emmy or a or an academy award it's emmy season coming up and uh breaking news we're going to be going for a daytime emmy and we're going to get a billboard.

1:05:11We're going to get a billboard. On AdQuick. A four-year consideration billboard. If you've ever been driving around Los Angeles around Emmy season, all the shows have all their accolades up on the billboard. We're going to go to adquick.com, out-of-home advertising made easy and measurable. Say goodbye to headaches at out-of-home advertising. Anyway, let's go to some timeline. We got our guests joining in 24 minutes. We got a great lineup. We're going to start showing you the lineup during the show. We're working on some new graphics packages, But we got David Tisch from Box Group, Mike Vernal from Conviction, Ed from Machina Labs, and then Will is coming on from Morgan Stanley.

1:05:49We'll be talking about what's going on in the venture market, what's going on at the early stage, mid stage, what's going on in AI investing, both at the foundation model layer and the application layer. I'm excited for the set of conversations. But let's run through some timeline posts in the meantime. We got a post from Josh. Actually, Lulu first. Oh, you want to do Lulu first? This is going to be a nice little surprise for you. Please. Michael and Ben and Scott, if you can pull it up. Let's see. No, it's just in the main chat. In the meantime, why don't I tell you about Wander? They just launched Wander Malibu Vista.

1:06:25It looks fantastic. You can see the ocean from that thing. 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. If you stay in that Wander, let me know. and go outside in the backyard and start yelling, I will be able to hear you. Wait, really? Is that close? Yeah. That's amazing. You'd have to yell pretty loud, but I think... I don't think our listeners will have a problem with that. Yeah. With all the creatine and... All the tea. Working out that's going on in our community, I think they'll be fine.

1:06:54They'll be able to belt it out. But man, what a beautiful little... What is that? Driveway, but it's circular. Looks really beautiful. I don't know. I'm excited. Here we go. Lulu says, if Coogan does the eyebrow while describing your business model, congratulations, you're going to have a deck of corn. She identified a specific, I guess, so founders, this is something you can read into now.

1:07:25If Coogan is talking about your business, just pay attention. Eyebrows are underrated when you're trying to express yourself. subtly signaling something. And in this case, it's very positive. Very fun. Yeah. What a journey. Five years ago, bored during COVID, saw a bunch of people. A lot of people already had podcasts. A lot of people had sub stacks. I was like, I want to do something different, but I think it's good to get, just be noisy on the internet because you're not really going to happy hours anymore during COVID, there's nothing going on. Why don't I start yapping on YouTube? And the first year was really, really slow.

1:08:02I think it took almost a full year to get more than 100 views on a video. Like 50 episodes in a row. And it was just like, it was cool. I mean, for me, I didn't understand any of the stats. I didn't have any benchmarks because I was kind of the only person in tech. Eventually, Gary Tan was doing stuff, but he was so big. I wasn't really comping to him. And so I'd just be like, oh man, I broke 100 views on this video. Like it's a banger. This is great. So many people would have. And I was just like fired up about that. But I enjoyed the process. And I was like, I did a lot of motion graphics, spent a lot of time in After Effects.

1:08:33I remember I did a video on breaking down Varda. And I built a 3D model of a satellite that was like wildly inaccurate based on like what they actually do. But they hadn't announced what they were actually going to do yet. So I was just like, it looks like this. And it was just wildly inaccurate. But it looked really cool. And that's what matters. It illustrated the idea of them launching a satellite. and then bringing it back down. And yeah, the first time I met Delian was in Miami at Hereticon. He was like, oh yeah, you made that video about Varda. We actually sent that to our real production team and said like, make this, but for us.

1:09:08Yeah, accurate, yeah. I was like, oh, that's great. I'm helping out. What a fun night. And then took you five years to realize you just wanted to do a news max. News max. Just be a news anchor. Always be news maxing. All right, we got a post here from Josh Pacini, who I did a call with a couple weeks ago. Early TVPN listener. His quote tweeting Annie. She says, name a better dopamine hit than running. I'll wait. And he says, getting a post read on TVPN. Well, congratulations, Josh. Today's your day. You got your post read on TVPN. Josh also has a very cool AI startup focused on automating drug development.

1:09:48Oh, that's cool. If you want to work in that space, go hit him up. You know what's funny? On one of the previous shows, we were talking about startup names. And we were saying that there's this new boom in the American manufacturing company of America or advanced manufacturing company of America, Allen Control Systems, the San Francisco Compute Company, the New York Compute Company, the New York Browser Company, whatever. And we said, all of those are done. There's no more alpha there. We got to go back to the.LYs. and Roy delivered on a Sunday afternoon. He drops his launch video at 2 p.m. on a Sunday.

1:10:26What a funny time to launch. On Easter Sunday. Clue Lee is out. It's the old school dot L-Y. We're getting back in the L-Y game. I love it. Clue Lee is out. Cheat on everything. And has a very formally produced, really refined cinematic launch video with some great motion graphics in there. We're going to have Roy join the show tomorrow to break it all down. But massive launch, 4.3 million views, 16 ,000 likes as of the time of the show. Just crushed it. And Chad Byers got in the deal, snuck a check in, and he breaks it down. The Cluelay Manifesto. We want to cheat on everything. And interesting that he's using we.

1:11:05I guess he's already deeply involved with this company. Normally think about it as an investor, but this is clearly something he's really excited about. Not sure the round was announced yet. No, no, it is. Yeah, yeah, 5 million. said that they raised. Maybe Delian leaked it, but that's not on me. But Chad says, we want to cheat on everything. Yes, you heard that right. Interviews, exams, sales calls, meetings. If there's a faster way to win, we'll take it. We built Cluelay, so you never have to think alone again. It sees your screen, hears your audio, feeds you answers in real time, while others guess you're already right.

1:11:41And yes, the world will call it cheating, but so was the calculator. So was spellcheck. So was Google. Every time technology makes us smarter, the world panics. Then it adapts. Then it forgets. And suddenly it's normal. Activate golden retriever mode. This is golden retriever mode. You don't need to know anything. You just sit there and it clearly answers every question for you. He says, but this is different. AI isn't just another tool. It will redefine how our world works. Why memorize facts, write code, research anything when the model can do it? In seconds. founder mode the best communicator the best analyst the best problem solver is now the one who knows how to ask the right question the future won't reward effort it will reward leverage and being a golden retriever so start cheating because when everyone does it no one is interesting amazing I'm pumped to have Roy on and very fun little fun fact yeah Ben made all of our sound effects with his own voice so That is true.

1:12:44If you like the voice, shout out to Ben, our producer. Could have been a voice actor. Speaking of the other Ben, let's go to Ben Stiller. That's right. Sinners, he's posting about Variety. Sinners has amassed - He's putting Variety in the true zone. Okay, we like to see that. A founder. He's going founder mode because he's a producer. He's the founder of many movies. Sinners has amassed$61 million in his global debut. It's a great result for an original R-rated horror film, yet the Warner Brothers release has got a$90 million price tag before global marketing expenses, so profitability remains a ways away.

1:13:22And he says, in what universe does a$60 million opening for an original studio movie warrant this headline? It's a good question. I don't know. It's not that crazy because, I mean, when big studios put hundreds of millions of dollars behind a film, like they're typically um hoping that they recoup all of that like on day one right so i mean it doesn't seem like variety is being like crazily negative here and they did kind of couch that in like you know they got a ways to go to get profitable which is like maybe factually accurate if the price tag really is 90 million um but it seems seems cool i haven't seen the movie but i don't know if i'll have a chance to go see an r-rated horror film that seems hard to rally the troops around but um have you watched the trailer or seen anything about sinners i don't watch uh horror films no too scary might throw off your sleep score and we're in a knockout knockout i can honestly say i've never watched a full one i just don't i don't get uh what about the classics what about scream or cabin in the woods i'm also not a movie person i've seen like three movies three movies wolf of wall street wall street wall street tale Those are the three movies you've seen.

1:14:39The only ones that matter. Scarface, Goodfellas, Godfather. No, you haven't even seen those, have you? Yeah, not quite. Have you seen Wall Street 2? No. Have you seen Wolf of Wall Street? Yes. Okay. And you've seen Wall Street? I've seen more than three movies. Wait, have you not seen Wall Street? No, I haven't. Oh, my God. American Psycho? I have seen that. Okay, good. But I read the book first. Okay, yeah, yeah. That's weird. The book is weird. The book is weird. The book is weird. Anyway, should we go to Jim Simons on the only rule he focused on in trading? trading goat. He says, we'll pull up the video, but he says something like, never doubt the computer.

1:15:14It's pretty great. Can we pull this video up? It was probably never trusted trading decision that was made before ripping a heater. Oh yeah, he's a big smoker. Yeah, Jim Simons, in case you're not familiar, he's the worth$31 billion, 55th richest person in the world. He's the founder of Renaissance Technologies, a quant fund. Famously, there was a market crash. Everyone asked them, what was going on at Renaissance? What was your team doing while the market was crashing? And they said, we were at a movie. Amazing. They're just like, what are we going to do? The machine will handle it. Anyway, we're ready to play the clip.

1:15:52The only rule is we never override the computer. No one ever comes in any day and says, the computer wants to do this. That's crazy. We shouldn't do it. You don't do it Because you can't simulate that. You can't study the past and wonder whether the boss was going to come in and change his mind about something. So you just stick with it. And it's worked. I love it. I mean, this is the story of, like, this is Lisa Dahl, Move 37. If the AlphaGo team had said, hey, we think this is an error. We're going to override what the computer is doing. they would have thought they were more likely to be at least at all because it was a novel move that had not been considered by humans before.

1:16:40And in fact, Move 37 was very important in that game. It's interesting too to think of it in the context of if you interject and insert human decision making, you're actually taking away from the program's potential success in the future, which could more than make up for a one-time mistake, right? Like there could be if, you know, the Renaissance team, if the computer does something that loses money effectively, but then the next time it does that thing, it makes it back 10x, right? Like, was it actually an error? Gambler mindset in the computer. You know, only one computer-aided trade away from, I mean, it literally worked.

1:17:19He made$33 billion. 99 % of computers quit right before they hit 100x. just imagine it has like a side internal thought and you're just like expand the reasoning on this one and it's just like i'm feeling hot i'm so do i got a hot hand i'm so do yeah it's great um i mean i wonder where else that philosophy has a potential impact like uh we saw this with the debate over social networking where there was there was a there was a question about you know The algorithmic social feeds feed people confirmation bias. They feed them content that they enjoy. They feed them brain rot sometimes. Maybe the steward of the network, Zuckerberg, who has essentially complete control over meta, should step in and say, you know what, I'm going to dial back the brain rot.

1:18:12Or I'm going to turn down the news, turn up the entertainment, turn up the educational content. There's a bunch of things that in theory could feel right, but maybe the end state is just step back and maximize for LTV. Who knows? I don't know. I have a hot take on this, which is like the LTV is just like if you actually think about the true LTV of a user of Facebook, it can actually drive a much stronger and more valuable outcome as opposed to optimizing for ARPU, which is a one-year metric. So if you're optimizing for a one-year metric, you're going to try and sell someone, you know, like gambling, mobile games, anything that just pulls money out of their pocket and potentially gets them distracted from creating value in the society.

1:19:05But if instead you focus on what is the true lifetime value of this potential Facebook user for five decades, for their entire life. Well, then it might actually be valuable to, instead of trying to get some kid to play Candy Crush and spend all their parents' money on Candy Crush tokens, instead send them a bunch of educational content. Get them really pilled on capitalism. They go build something really valuable. They make a bunch of money. And then you can run advertisements on them for Rolls Royce and Lamborghini. Or they'll just spend a billion dollars on meta ads. Maybe, maybe, maybe. And so there's an interesting theory where like what are we saying when we say the kids are suffering from brain rot?

1:19:50What we're really saying is like they will not contribute to society. They will not become economically valuable. But maybe they go and become slop farmers. Maybe. And if they pull themselves out of the slop by their own bootstraps, it's possible. Of course it's possible. It's possible. But I do think that there's something interesting where if you think about it from an ultra long time horizon, it can actually be economically efficient. I don't think our quarterly system will allow for that type of long term. But that's the beauty of Zuck. He doesn't need to think in quarters. He doesn't need to.

1:20:21And so I'm optimistic that someone like Zuck could take a really, really long view. Also, I mean, I think he has kids. I think he has a very good, strong moral framework. So I think he might just kind of optimize for that naturally. But I do think that there's an economic model to optimizing for long, long lifetime value education and human flourishing, economic flourishing, even in the face of declining ARPU in the short term. I would love to think that Zuck is thinking of themselves as, you know, of Meta as operating digital railroads. And it's like, you know what, we're going to, you know, we're just going to invest in delivering educational content to our children for the next five to 10 years.

1:21:05We're going to get them really excited about, you know, learning and science. Because we will make more money in the future. That's the key thing. It can't just be purely altruistic. It has to be, no, this is the right move for the shareholders. but it's gutsy and it would never fly if you're optimizing the next quarter's return anyway i had a post on saturday uh relevant to facebook i said someday you're going to look down and realize that the good old days are over x will be like facebook your group chats won't be popping and your phone will just feel different don't let this time slip away you need to increase your screen time now before it's too late and um funny enough that thought came to me on a saturday when my screen time is uh the lowest lowest and uh but it did um we i've had the sense over time that that twitter and x are just sort of lindy um and we'll kind of always be here but um it's very possible that x goes away at facebook at some point and we're just we're just the boomers on facebook just all you know yelling at each other and arguing we'll become like a tiktok reaction stream or whatever's next.

1:22:10You always got to move on. We're going to WeMe. We're going to WeMe. It's on the come up. We talked about it. WeMe. It's the future. Yeah, the FTC says that WeMe is Facebook's biggest competitor. Biggest competitor. Or one of the top two. Snap and then WeMe. Snap and WeMe. So we'll see you on WeMe, folks. We really got to chase that down. We got to get that CEO. I'm going to let you do this next one. Okay. So Wardall says, you need to be dad maxing. You need to be waking up at 5.45 on a Saturday to hit the gym and then coming back to wake up your wife and kids by blasting Creed while making breakfast.

1:22:44You need to be dethatching your lawn. I don't even know what that means. You need to clean your car and then stare at it in the driveway for half an hour. You need to be telling your kids that Jerusalem belongs to those who worship Christ. You need to be treating Easter Sunday like Super Bowl Sunday. You need to be absolutely mogging childless heathens with peak dad power moves, as God intended. Very funny Easter post. Obviously, there was a lot of like he is risen posts that went viral over the Easter Sunday, but I thought this one was very funny. It is something that happens naturally. You start waking up earlier and earlier in 5.45.

1:23:16That's five minutes later than I wake up, actually, if I look at my alarm. 5.40, on the Ashton Hall grind. Anyway, Sam D 'Amico, friend of the show. He's been on, he runs Impulse Stoves. He had a good take about aliens that I wanted to share. He says, I remain convinced that the best evidence that the US government has not recovered crashed alien spacecraft is that one, that would be the coolest thing ever, and two, someone would have to share it in a group chat with the boys. And he is, of course, sharing a screenshot of Secretary of Defense Pete Hegseth is said to have shared attack details in a second signal chat.

1:23:57The Defense Secretary sent sensitive information about strikes in Yemen to an encrypted chat that included his wife and brother, people familiar with the matter said. So send that headline to your wife and just say us. Us. Us. I was trying to do that earlier, but kept getting paywalled by it. The New York Times, the failing New York Times wouldn't let me screenshot the headline of an article. Yeah, just take the screenshot from this. It's great. We got a nice clean screenshot here from Sam. Yeah, very funny. I actually think this is a great take, but we should have Jesse Michaels on the show to give us the latest and greatest in the world of UAPs, UFOs, and alien aircraft and spacecraft because he has gone way deeper.

1:24:40And regardless of what you think about aliens, I think that Jesse's done a great job of finding interesting stories, interesting historical anecdotes, interesting anomalies. And even if you remain unconvinced after spending time with him, you will be entertained and you will feel like you are talking to an intellectual, not just a crazy conspiracy theorist. And so huge shout out to Jesse Michaels, one of the best to ever do it. We grew up on YouTube around the same time. Anyway, let's move on to Atlas Creatine Cycle. He says they should have a 420 for creatine monohydrate. So true. I love it. Will O 'Brien says 10.6 because 10 grams a day and six looks like a G.

1:25:22Oh, okay. 10G. I get it. So true, King. People are into creatine right now. A lot of debate over whether creatine. I have 15. You got 15 grams, not milligrams. Sorry, sorry. Your max. Those are big scoops. Yeah, yeah, yeah. Big scoops. Yeah, it's a little sandy, but you got to get it down. The creatine, it seems like, you know, maybe it's a fast-time bargain, but it's great. It's the best hair loss. It's the best hair loss supplement in the world. Yeah, a lot of people talk about hair loss supplements, thinking that they're supplements that encourage hair growth. I mean, Joe Rogan's bald. Yeah.

1:25:54He looks strong. Maybe it's the creatine. Who knows? Maybe it's genetics. Maybe it's a million other things, but yeah. You never know. You never know. It's worth it. Worth the risk. Anyway, we got four minutes. Let's do a couple more posts. This one by David Haber over at Andreessen was interesting. He says, in any fast-growing organization, one of the best feelings as manager or CEO is having someone who works for you that I call safe hands. It's this implicit sense that you can delegate a task, project, or line of business and trust that the person is going to execute with quality. We've talked about this before with the levels to different employee skill sets, the pyramid that Sean Puri outlined.

1:26:36Safe hands isn't just about competence. It's about proactively communicating when issues arrive, acting as an owner when problem solving, and operating independently without the need for micromanagement. Importantly, safe hands isn't tied to seniority. It's just remarkable how inconsistent it is across an organization. Whenever I find someone who is safe hands at my prior company, especially junior folks, I pour responsibility on them. Many of these individuals stretch far beyond their original roles and became leaders at the company with several now successful entrepreneurs. It's one of the most common conversations I have with founders I work with, especially in the Series B plus stage as they're beginning to bring on executive leadership for the first time.

1:27:18Do you know, do you feel like you have safe hands across every functional unit of your business? How much leverage do you feel you're getting from your team in those areas? Every CEO instinctively knows the answer to these questions, and finding your safe hands is a key step towards scaling yourself and the company. And Matt Grimm says, I call this, folks, you can turn your back on, and they're insanely valuable. In fairness, I didn't come up with that phrase. One of those types who reports to me told me, and I'm shamelessly stealing it. Got it. Jordy, what's your take? No, I think oftentimes, you know, in this case, David and Matt are founders.

1:27:54Oftentimes, founders end up getting credit for the things that these sort of safe hands roles end up doing. Oh, totally. And so Matt is - But that's the goal. You have to hire these people. Yeah. And then also train them and then take advantage of them, right? And then, you know, back them when they go out to do their own thing. Absolutely. Well, before we have David, we got to talk about Eric. Eric Tornberg. Oh, yeah. Speaking of Andreessen, Eric Torenberg has joined Andreessen Horowitz as a general partner. Fantastic news. He'll be on the show tomorrow to break it down for us. Very excited to talk to him.

1:28:26Been a good friend for years. Talked about media. He's been in the podcasting space for multiple years now. Built turpentine. Done tons of interviews. And one of the greatest networkers in human history, I think. Probably. He knows everyone. Child of the internet. He will just throw you in a group chat with the world's most important people randomly. And I'll be like, why am I in this? But thank you. This is interesting. Yeah. Yeah. Great guy. Anyways, very excited for him. For sure. And the firm. And very excited to talk with him tomorrow. Anyway, let's bring in our first guest, David Tisch from Box Group.

1:29:05How are you doing, David? Hi, guys. How are you? We're great. Chins on having a new job today. I do. Yes. Thank you. So yeah, I'm taking it from part-time 50 hours a week to full-time 100 hours a week, but it's only up from here. Are you hiring? We are. We are hiring. How do I pursue this? Yeah, the VC to full-time news anchor pipeline. Once you've done it all in venture, like you have that natural step issue. When you start in this industry, I feel like that's the ambition, a daily show that you can pontificate across the whole industry. Yes. Well, we're hoping to recruit you to be once a week, drop in.

1:29:47We will be your podcast. Yes. This is actually, jokes aside, the way that you work for us is that when news breaks, you bring it to us. When something happens that you have an opinion on, you come on the show and you talk to us. You are elevating the venture capitalist way too. We don't have news. We don't have things that happen. I feel like you are really playing to the audience. What about like the most complex and naughty geopolitical conflicts? I feel like you guys as a class are like the best in business. Overqualified to talk about it. Oh, okay. So you want to stay away from politics today.

1:30:23All right. So let's start with tariffs. Yeah. Let's start with tariffs, Iran, China, Russia. Let's just go down the list. Good day in the market. Everything's great here. Everything's great. Everything's great. Have you heard about the accordion effect to early stage? Because that's our famous early stage line of like whatever happens in the latest stage market, it's like an accordion all the way to early stage. So it reverberates over the course of, you know, three to five years. So we will not ever be impacted because the accordion basically never reaches early stage because something else will happen in the macro before then, which is a really nice, don't ask us any.

1:31:02There's no liquidity, so you can't panic sell. Even if you wanted to, you can't hit the sell. That's a third accordion ripple. Yeah. I mean, there's no better example of that than we have SVB crisis. Interest rates go up. It's the death of venture. We're hearing about, oh, GPs are going to be giving back LP capital. But then, well, well, well, would you hear about this AI trend? And all of a sudden, it's time to rip checks. Saved us all. Saved us all. yeah wait yeah what uh wasn't there this was sort of before my time but there was a whole chatbot era right wasn't there like chatbot yeah free ai was like it was supposed to be the thing it was sort of right it was just didn't have the the underlying tech trend is that right i feel like the tech wasn't there but also the branding of chatbot to uh chat gpt isn't that different, but magically different from a outcome and sort of adoption curve.

1:32:06If you look like the automated chatbots, I think is what they were called for that moment in time. They all fell on their face because they weren't interesting enough, good enough. They were like pre-programmed answers. And then OpenAI releases, in essence, just an advanced version of that in many ways from a consumer positioning. And here we are. And so you are like, the idea of chatbot was right in how you're interacting with the tech. The tech, to your point, just wasn't good enough. Yeah. 90 % of chatbot founders quit right before they strike a flag. Right before they sell the open AI. I mean, I don't know if I've actually, we should find some chatbot founder who stuck it out.

1:32:50So Hugging Face. Hugging Face is the one. Yeah, that's right. Hugging Face is the winner. They were in a boot camp for chatbots. No way. And pivoted from a chatbot into Hugging Face. So that's your answer. That's amazing. Yeah, we got to have, it's Clement on the show. Yes. Right. Yeah, we got to have him on. That'd be great. So yeah, I mean, to get a little bit more serious, like, how are you processing this year? What are you actually excited about? What is fatiguing you in venture these days? We have our annual meeting tomorrow. So I'm in the middle of practicing our script on the market. So I can just try it.

1:33:26Please. I love AGMs. Yeah. The, you know, the pre-liberation day, post-liberation day market speech is different in some way. But you really like, I don't know, you're investing at the earliest stage of a journey and trying to attach two people starting a company with big, long-term 10, 15-year ambition to some moment in time macro or what today feels like an incredibly volatile macro. where you actually can't even understand what stability looks like or a new framework. It's impossible. And so the day-to-day job here is we meet people, we get really excited about what they're working on, we give them money, and we wait 5, 10, 15 years to see how that all plays out.

1:34:18So the investment moment of investing in an early-stage company feels totally decoupled from the macro of what's going on. The macro does impact the companies you invested in years ago as they come to market for more money, as they figure out their revenue retention. But the sort of day-to-day volatility, I don't think has an impact on our day-to-day job of funding great people starting big ambitious visions. Do you think that there are going to be stories from this tariff cycle that are like what happened in COVID where everyone was like Airbnb was particularly hurting as a startup? I mean, they were public at the time, but they were I still think of them as like a YC company.

1:35:04Right. And it found it seemed like that the story of Airbnb was like COVID was a transformational moment for them and they emerged like a stronger company than ever. Do you expect that to happen to any startups, maybe in your portfolio or just out there in the market that are getting beat up but might emerge stronger than ever? So if you isolate tariffs, that has an impact on a subset of companies very outside of software in many ways. I think there's software companies that involve logistics and shipping that definitely are impacted. But I don't know that the like come out of the tariff is a predictable framework.

1:35:46Like, what does that actually mean? Do we get to free trade in reality? Do we get to some equilibrium? Is this China only that we're talking about? And I think within there lies a very hard to foresee, again, point of stability. Whereas at least in COVID, if you said we return to a normal world, that was a more predictable endpoint. If you assume, you know, early in COVID, it was wait two weeks and then the world will start again. And then it was some longer period. But I think there was an appreciation for what coming out of it could look like. Whereas I think right now you're in like the creation period, harder to guess.

1:36:27Yeah. Yeah. You know, the easy guess is like American manufacturing windfall, but that feels like a big stretch, like no one's building a factory overnight. I feel like that happens in other parts of the world, not here. It does feel like it could be a catalyst for the American dynamism companies, the re-industrialized companies that have been placing that bet and kind of hoping for just a little bit of a boost that you can see a lot of like, oh, that Series A company went to Series B like a little bit earlier because of this narrative. And then that was enough to get them over an awkward hump, build some real infrastructure out and kind of like realize the vision.

1:37:06Well, I think like cautiously optimistic. If you're a super early stage investor, which Box Group is, and then you're trying to time markets by being like, oh, there's tariffs. Let me make a bunch of supply chain related or manufacturing investments. But then the company is not going to mature for five to potentially 10 years. So it could be a totally different environment. And one example that was relevant, we had the CEO of Astronis on last week, which I imagine you invested in at least over five years ago. 13 years ago. 13 years ago. Overnight success. Overnight success. Oh, and that's like a good example of like you couldn't have, you thought that space was going to be important at the time and you liked it.

1:37:48Actually, we're early stage VCs. We knew. We didn't think. You knew Christobal. Christobal. Obviously. No, I mean, like if you think about AI, we're the earliest investor in a company called Clay. And Clay created a vision, had a product, and it was in need of AI for it to work. And it wasn't created yet. And so if you watch this seven year overnight success, it clicked when the underlying technology caught up with what the go to market product was. And I think you see that a lot of the times that the founders who are early in a space and can see it through and wait for the world to come to them while they're sort of pushing the world to get there.

1:38:30that's where a lot of that magic is and i think astranus or zipline again 14 years ago we funded zipline wow is a is another example um we are huge zipline shills now that we talked to the founder i mean what an incredible story we left we left that conversation we were basically like buy at any price yeah because i mean he he it's not just that he's been grinding it out for so long but i feel like if you watch the launch video like he paints the it's the opposite of the black mirror vision. It's a very positive vision of the future. And it's something that, yeah, job's not finished. He's going to be doing that for 20, 30 years easily.

1:39:07Like there's so much to do. And, and now it's just a matter of manufacturing, scale, economics, all the basic stuff, but like he's got the drive. We came to his office on a recent trip to San Francisco and I probably hadn't been in his office in a decade. And we walked in and it was just like this jaw dropping American built hardware software combo that you've like, you walked out of there and said, this is the beginning of a, another 15 year vision. Totally. Totally. Was there, was there, you know, looking back at, at these companies like Zipline, Astronus, was there ever a trend over the last, whatever, 15 years that you set that you were tempted to go all in on?

1:39:53Because I imagine there was a lot of investors of that era that said, oh, space is so cool. I'm going all in on it. Climate tech is so cool. I'm going to do this. Bio, crypto. Instant delivery. Just NFTs. Just NFTs. That was the one. Yeah. No, I mean, we're generalists. We are founder driven. We find people who have their own vision. I think us as a firm, we should never be in charge of coming up with ideas. We're not that's not our job. Our job is to give people who have dreams capital and support to help them. John, your company, I think, is the single most heavily debated internal decision we'd ever made at Box Group.

1:40:39From a moral standpoint, we had to like decide if it was good or bad. And so that was interesting. So we almost pivoted into drugs. That was an opportunity for us. But no, I like the world pivoted to AI, right? So I think two years ago, we were saying like 30 to 40 percent of the companies we see talk about AI or are oriented around AI. Last year was like 90 and this year it's 170%. You don't meet non-AI companies right now. And if they're not AI first, it's we're attacking an industry by bringing AI to it, which is slower and stale. And I think that is a forced all-in versus a sort of opted all-in.

1:41:30Does the different business models that seem to be emerging, does that change the way you're underwriting these investments? I'm thinking about highly capex-intensive businesses where you're just expecting a ton of dilution. Or we've seen some companies that are kind of just doing like private equity-style roll-ups, but they're raising from venture capital. And I imagine if you're not careful with pro rata or how you're sizing your bets, it could turn out to be like, oh, we really didn't get the full bite at the apple, but is that something that even matters to you? Or is it just like back the founder and we'll figure it out?

1:42:02Private equity roll-ups in venture always ends well. Definitely. Yeah. Yeah. I mean, we, we, we, we like to say private equity is not a mature business. And so there's lots of opportunity for tech people to come in and disrupt them. They don't take it seriously. Famously not, famously not cutthroat, famously not cutthroat. They're happy to leave all that money on the table. Yeah, exactly. Just dollars on the floor for VCs to come pick up, right? Jordy? No, no, no.

1:42:32It feels like over the last two years, call it, there's been more of these sort of roll-ups than ever before. Was there another kind of general market-wide crack, or was it just sort of like individual areas and opportunities versus broader trends? I like to think that the way to build companies is to replicate another company that's succeeding. In these moments, what you tend to have is one winner and a bunch of followers that don't win. And so can there be a single version of a roll-up? If you look at Andrel, they're great at acquisitions. That's a different phrasing of the word roll-up. Roll-up is either we're going to buy a bunch of things that are the same size or we're going to buy one big thing and then tuck in some other smaller things around it.

1:43:23So I think unpacking the nuance in these words is more important than assuming a general like success across a wide variety of companies. I think the like moment in time where you probably saw fast followers or fast movers win was in the on demand business. Right. When Uber trained the world that you could touch something on your phone and something in the real world would happen. It unlocked like a behavior across the world that was very different. Right. And that was this phone to real world connection that I think opened up a ton of other businesses. I don't think they all worked, but I do think that that was a horizontal opening versus a business model innovation that has been used in other industries or financial industries and then applied in venture.

1:44:16yeah the idea the the classic sort of like accounting firm roll-up when i look at that it's like when it's been two weeks and my like cpa is not like on it or like is not you know like clearly like you know he's busy with other clients i'm like it's not like it's not like i want to switch immediately but i'm pretty quickly and so the idea that you're just going to buy like 20 accounting firms and then slap ai on it and not have like 90 churn it's just um interesting That's rough. But have you tried AI? I mean, it's pretty good. Yeah, yeah. It's pretty, you know, it's only going to get it wrong 5 % of the time, and that's going to cost you millions.

1:44:58This is a topic that Jordi and I have been debating, and it's kind of related to Uber opening the mindset of, like, this delivery boom. Chat GPT wrappers, it's been derided as a term. We've now seen the VS Code fork wars. but it looks like there's a chance that open AI buys windsurf for 3 billion. And I've been going back and forth with Jordi about this. Like, is this game on for MNA in the wrapper market? Because if open AI who has, you know, great team, lots of money, can't like build it and they want to buy it, then do we see Anthropic? Do we see XAI buying stuff? Do we see Amazon? All of the mag seven buy stuff.

1:45:40And then maybe even, you know, you get into some of the just fortune 500 companies that want to buy startups. And so I'm in this weird scenario where I've been somewhat accepting of the idea that a rapper might not be a power law outcome, but everyone involved in windsurf, if this deal goes through, will do very well. And so what is your take on, on that market? And does this shift? My take was broadly that like, this is highly strategic for open AI, but that doesn't mean every rapper, even if they have a lot of traction revenue is like suddenly strategic to a wide range of buyers right sure i think i think in my in my 15 years doing this the thing i've under s or i overrated was the amount of m &a that would happen i think if you go back in the early growth of like this era if you look at you know anything from um you know facebook and and before that google yahoo twitter um on their way up, they bought tens, if not hundred plus companies.

1:46:39And a lot of that was for stock. And it was stock that appreciated post-acquisition, incredibly valuable for both the company and the founders who sold. And I think if you look at the next wave of startups, a dramatic decrease in M &A, because instead of buy, you build. And the acquihire didn't prove out to be the best use of equity, a lot of the decision of buy versus build became easier as you thought about where to innovate. I think in sort of getting at your question, I hope we're entering a period of M &A. I think the easy way to rationalize it is the valuations of some of these companies that you mentioned are so big that they can afford to buy companies for substantial amounts that might actually align with the founder of the acquired's expectations.

1:47:34And I think that's where one of the other mismatch was happening, is that the company that wanted to buy another company was just not able to hit the price, and so they didn't happen. And so I think one way to rationalize it is whether it's the big seven or the scaled AI companies have big enough valuations to go out and buy things for numbers that will hit a founder's expectation, which I think would unlock a lot of positive things in this ecosystem. One is liquidity, but two is there isn't really an answer to how do things end right now for a ton of companies. And M &A is the piece that's been missing to me the most.

1:48:15It gets less discussed. And I think Fortune 500 companies need to modernize, right? And we saw that pressure 10 years ago when you heard like all the non-tech companies are going to become tech companies. And then the public markets punish you on a quarter by quarter basis. And it's like, forget that. We're not going to do any of that. But I think today, AI might be such a dramatic forcing function that smart big companies need to move quickly to get ahead of the curve. So is that is that by verse you mentioned, you know, these super acquisitive companies maybe 15 years ago and then that changed.

1:48:52Do you think that was a factor? I mean, you guys basically plaid was built out of your guys's office. There's a lot of there's been so much infrastructure built during the plaid era. Do you think that that was part of the calculus for some of these bigger companies that would have been acquirers? but they said, hey, like we could buy this tech and then maybe try to integrate it or we could get this team and do it. Or, hey, this infrastructure exists and we can just build it. You have so many factors. Like the biggest one to me is that the government didn't want big tech to buy more companies. And so if they were going to buy companies, they had to be like the biggest ones, not like they were going to fight the regulatory fights on big companies, not on small ones.

1:49:36And that dried a lot of it up. And then I think the valuation expectations was the other friction. When a startup decided they were worth a half a billion dollars and the potential acquirers wanted to buy them for$100 million, that was no longer interesting. And so it just it decoupled rationality from playing out in the M &A world. Right. You have to have like a buyer and seller meet on price in order for the deal to even get going. And I think that's where the biggest gap was. Plaid sold, right? Plaid sold and the government stopped it. And I think that that was, you know, to me, a interesting moment in the government getting involved in something that was debatable.

1:50:20And I think it also tells big companies like, don't waste your time trying to get these things through. And that slows down a whole wave of potential M &A. Interesting. I don't know if the M &A market relates to what you're seeing on the LP side, but we've heard that there might be some fatigue from LPs on what's going on in venture. But at the same time, it feels like that David Goggins meme where, you know, venture just keeps on chugging no matter what. You're going to the AGM. What are you seeing broadly in terms of LP appetite for ever bigger venture funds? we're a small adorable seed fund based in new york city so i we are not we are not responsible to answer that question i think our like your job if you take lp capital is to give them back a lot of money one day and i think if you haven't um you you owe that to them and so at some point the patients should run out and i i appreciate that i think the challenge is the time for liquidity in early stage venture has gotten pushed significantly from where it was more predictable a decade or two decades ago.

1:51:33You could say seven to 10 years on an early stage fund didn't mean it. Today, I think you say seven to 10 years. And you're like, by that, I mean like 12 to 15. And that's a substantial difference. And I think you need to align with your investors on what that timeline is because it's an irrational timeline. Like the people we fund, if you go back 15 years, they were like pre-elementary school for the most part, right? Like if you look at the young founder that you're investing in today, a 15-year timeline is two thirds of a life. Like it's an irrational number. And so these like, the go in motion of making an investment to the return the fund to LP's timeline is so decoupled from, I think, a psychological standpoint that your stakeholders are just dramatically unrelatable.

1:52:25On that topic of young founders, how has the early stage market evolved? It feels like there's a lot more products, like YC is bigger than ever, but then there's also Z Fellows, there's different fellowships. There's people that are just giving away money to people to like, go try a startup and then maybe I'll invest later. Uh, and obviously the Teal fellowship's kind of like a scaled version of that, but there's a lot of other, you know, initiatives. Uh, how has that changed your strategy? Has it changed your strategy at all? Uh, and kind of like what, what does the early stage market look for you look like for you today?

1:53:02I think they're like, there's always been these splashes of noise. And very, very little, like, if you go back again, I'm old. And so I've been doing this through these microwaves of change in the early stage market. Very few products stay where they are. They move in different directions, either get later. So if you think about new entrances as funds into the early stage market, most of the ambition is to become a bigger fund. And in doing so, you become later by nature of scaling your business. And I think on a product side, you're only as good as the product you're offering. And so what has been amazing to me about YC is they've just continued to compound quality of the satisfaction to their customer.

1:53:55They are not free, right? You're giving YC equity. And yet, if you look at like the happiness factor, the MPS or whatever cheesy acronym you call reviews, but like people go to YC because other people who went to YC loved it and they think it was entirely worth it. And so I think the products that get invented need to live up to the cost. And if the cost is free, like nothing is really free. And so what comes with that freedom? Is that attaching to a brand? And if you attach your company to a brand, is that a good thing to have done or is there some negative externality that comes with that? And so I think and it's probably not the end point for the products that are offering free capital to be free forever.

1:54:40I would assume that's a hard thing to scale. And so I think you have to just like as a company, aligning yourself with the brand, the trusted brands have proven to be trusted for a reason. and the new ones need to earn that. And I think there are some that have been around long enough where you find good examples of quality coming from them. And those are the ones that I would tend to trust more. You've been in the game for a long time. Can you tell me the story of your first investment ever? Yeah. Our box group is named after our first investment. So it's like a combination. So the first investment is a company called Boxy.

1:55:23It was a Roku competitor. We were in their seed round as an adorable check. I didn't want to write my name as an angel investor, so I created an LLC called Box Group to invest in Boxee, which made me feel bigger. The Box was like a cool nightclub in the city at the time. It felt like a cool word. I've looked with Aaron Levy. He registered Box.net like two months before I did Box Group. Oh, wow. Which I'm bitter about. So at some point he'll sue me and it's all over. He's been on the shows too, so he can come on and debate you for it. Yeah, we're all collaborative in this world anyway. No competitors.

1:56:07So, you know, Boxy gets funded, follow on by Fred Wilson. I'm like, oh my God, I'm amazing at this. Yes, yes, yes. I got to read that guy's blog. This is so cool. And then General Catalyst came in and then Avner, the founder, went in front of Congress to like fight the cable companies. So it was like an amazing first investment to like see the narrative of a startup. They sold to Samsung and they were built into like the Samsung smart TV technology. But the idea was right and the timing was challenging. They had to fight every single battle on behalf of the people that came after them. And I think that that was a really good lesson.

1:56:48uh is is do you see you have a ton of portfolio companies um too many too many i'm sure to manage do you see uh And Case Text is one of them, which is an interesting example because that was a company that no one... Nine-year overnight success. Yeah, exactly. Exactly. I'll hit the overnight success. Overnight success. But are you seeing that across... Do we get a soundboard for our meet companies meetings? Oh, we definitely should. Yeah, yeah, yeah. You should. Handshake deal. Yeah. Handshake deal. Raise your forecasts. Yeah, yeah. There's an internal bingo that we run that every time they say buzzwords, we...

1:57:34We're preempting. But how do you think of AI in the context of the portfolio broadly? Are there a bunch of examples where it's kind of creating new momentum in the business or like tons of new opportunity? And I look at this like I have 50 odd personal investments. All of them will work. All of them will work. I'm sure they've all been marked up. So I'm sure it's real. That's what the employer website told me, which I was like, oh, that could be 98 % successful. 98 % hit rate. But how often are you seeing it sort of create momentum versus momentum just being something that once you lose it, it's really hard to kind of get it back if you're not getting sort of lucky?

1:58:19I mean, K's text is like the most amazing story. What a grinder into just being early in the right way. And I think to Jake's credit, he was always like the smartest person in the room and figured out how AI could come into what they were building in a differentiated way and like split a team off, built a product, got to market first in an industry that was ready for it. And so I think it's this and he landed like he landed an outcome that he changed his life and changed the team's life. And I think like a unique story. And we're now like three years past that you're early to the game. And so if you haven't figured out how to take your stale product or your product that's maxed out and begin to re-energize it, it feels like you're a little late.

1:59:14There are those stories. And I think Clay is the other side of it, where AI happened and Clay benefited from sort of the speed of it and now is running. running. But I think within the portfolio, there are companies that benefit from pieces of it. And whether that's on the cost saving side or the growth side, I think you can find examples of everything. But it's within the verticals that I find the most interesting momentum just being recreated, right? It's companies that are servicing customers. And in some way, if they can be the deliverer of AI to an industry that can't get it themselves, that's a really big opportunity.

1:59:57And I think K-Stex sort of represents that. Yeah, that makes sense. It's awesome. Thank you so much. This was a fantastic conversation. Wait, I came on here to promote something. Oh, yeah, yeah, yeah. Let's go. Yeah, give us a call to action. The Howard Stern of tech. And so when you go on Howard, you have to promote or like the late night shows, you have to promote. Please. We have a conference that we're putting on with Union Square and First Round and Lux in New York called Founders NYC and it's foundersnyc.co. It's free, which is different than most conferences. Uh, it's for people who want to start a company.

2:00:27We got the founders of Datadog and Mongo talking to each other on stage sort of to me, a collection of all of the, the big, great early companies that were built and scaled in New York coming on stage to just like sort of create the community effect of, of building here. Um, and so if you want to take a, do you want to take a victory lap on nyc just generally i feel like no no no i'm just saying when you when you started box group a lot of people like it maybe maybe no one had heard of we're like the the you know pioneers of new york city no one had heard of new york city before there was that there was that era but it's true about tech right the amount of the amount of the capital concentration in new york city right now is yeah incredible it feels like it's never been We're like the pioneers that discovered Miami in the COVID era.

2:01:15Yeah. No, no, no, no, no. Look, I think New York's a home for people that want to win. And I think whatever you do in New York, it's like an incredibly harsh environment. And in order to stand out and win in New York, you have to fight friction. No one cares. Right. And that's what's actually fascinating to me about tech in New York is like, if you went on a subway or to the restaurant nearby, nobody cares what you're doing. Like no one cares about your business. No one cares about tech. And I think that friction creates people to have to fight a bigger fight here. Um, because there's not momentum, like there's not somebody pulling you up and saying like, we're all in this together.

2:01:55And so I, uh, I think the community here, uh, is, is just like people put their head down and grind and, uh, it's produced some real success and we're excited to put it all on stage. That's amazing. Thank you guys very much for having me. I'll see you tomorrow. We'll see you back. We'll see you back here. Talk to you soon. Bye. That's fantastic. Humble giant. Yeah. Overnight success himself. Yeah. Well, next up, we got Mike Vernal coming in from Conviction. Very excited to talk to him. We'll bring him in from the waiting room now. Mike, are you there? Can you hear me? How are you doing? I'm good, thanks.

2:02:33How are you, too? We're fantastic. Great to have you. It's a wonderful Monday. I hope your Easter was well. If you celebrate, I hope your weekend was great. And I hope you're off to a great start of the week. Thanks. It was great. Yeah. Fantastic. Yeah. I mean, I'd love to kick it off with just a little bit of background on your career and then what you're excited about today. And then we can kind of go from there. Does that sound good? Yeah, that sounds great. So let's see, my career. I've been an investor for the past decade, kind of an accidental investor. I never aspired to this, but I spent 15 years operating.

2:03:17I was at Facebook for many years and decided to give it a try, and it's been great. So I've been an investor for the past decade. I am like, uh, I'm very motivated just by like individual founders and folks that I find compelling. And so like a pretty broad set of companies. Um, so like a mix of consumer and like SAS and hardware and infrastructure and some others, um, some of the larger companies are companies like Rippling and notion and Verkata and, uh, clay, uh, and a couple others. We just heard about. Yeah. What was the, what was, uh, yeah, we, we, we, we just heard about Clay. David Tisch from Box Group was on.

2:03:55He was saying about how Clay was this overnight success that took seven years, as they usually do. I'd love to know the story of the first investment that really made you catch the bug. Obviously, you were at Facebook for a long time, but then at some point, you were like, I got a knack for this, and I'm going to take it more seriously. I made a handful of angel investments before I formally became an investor. Sure. But they were I think in retrospect, they're actually like they're they're pretty reasonable. Like I only made a handful. I probably made like seven or eight. One of them was Notion, which is probably the best of the bunch.

2:04:39But like Wealthfront, it was like Notion and Wealthfront and this company called Human Interest, which is like a 401k provider and a couple others. Say again. I, I, I, I'm like randomly friends with Jeff Schneebly who runs the company now. It's a fascinating story because it was a YC company and then he came in as a, as like a founder mode CEO, but he had like, like his background. I mean, I love him, but it's like not super. He's, he didn't start the company. He has a MBA and I believe he has a PhD and he's almost like a manager mode type of guy, but he's been fantastically successful with the company.

2:05:13And I'm just the biggest fan anyway. Sorry. Yeah, exactly. Exactly. Um, But I think none of them really motivated me to do it. It was more I so I was lucky enough to join Facebook when it was relatively early, like a few hundred people. And I was there for eight or nine years. And I led a mix of sort of product and engineering at the company. And I was my wife and I had our first kid. And it was the first time that I took like six weeks off for paternity leave. And it was a little bit of a, it was like the first chance to catch my breath in eight or nine years. And I was trying to figure out like what I wanted to do next.

2:05:53And the obvious thing would have been to stay at Facebook. And Facebook is, was, and I think still is, just one of the most amazing companies out there. But I'd gotten to know a guy named Brian Schreier at Sequoia. And Brian was, Brian had actually backed two of my close friends at the Series A, a guy named Matt McGinnis, who's now the COO at Rippling. That's right. and Steve Garrity at a company called Hearsay. And Brian had kind of said, if at some point you decide to pop your head up and do something else, you should come talk to us. And so one thing led to another, and I ended up at Sequoia.

2:06:27And it was a little bit of an experiment to just see if investing would be fun and interesting. And as it turns out, it is both fun and interesting. How did you, you know, people talk about, quote unquote, operate, you know, investors love to say if they've spent two years at a company, they love to say they've had operating experience. You had some very real operating experience at Facebook. How did you feel, how did you feel, how durable were the learnings from the true operating experience versus finding sort of common truths about the way to do business and the way to build products and teams that, you know, because I've found, like, for example, like the influencer marketing that I maybe did in 2016, like no longer works, right?

2:07:17And yet there were things that I learned in that era that, you know, I still use today, right? So how do you kind of delineate, like, you know, sort of like a higher level of abstraction, higher level, sort of these sort of Lindy ways of doing things that are durable and valuable to communicate to entrepreneurs that you back? Yeah, it's a good question. I'll say one thing that I think I learned that still applies and one thing I had no clue about, which I didn't learn until like the investing side of things. I think one thing that's underrated, maybe it's not underrated, about Mark at Facebook is that he's incredibly patient.

2:07:54I mean, I guess you kind of see it. I think he's like spent$80 billion so far on like Reality Labs. But I think, you know, he is at the same time both like patient and impatient. I mean, everyone talks about like the move fast break things. And I think there is like a very strong bias towards action and just like getting getting stuff done. But he also like from a first principles perspective, kind of if something should work, like if something logically makes sense, he will just keep playing it out to try to to until there's like new data that suggests that it that it is wrong, which I think explains a lot of the reality labs investment.

2:08:32And I think like I think one thing that's underappreciated about like a lot of great companies, maybe it's appreciated. I don't know. But like they take a long time. Like, I mean, some companies are really fast enough to the races. But like, you know, Figma was like four or five years before it started to work. Notion was like four or five years before it started to work. Clay was four or five years before it started to work. I think Airtable was founded in 2010 and didn't really sort of break out until maybe 2017, 2018. I mean, all the sort of the PLG companies, you know, everyone says they want to be a PLG company, which to me is like, yes, I want to be a high growth company.

2:09:11That is a - I don't want to have to do sales. I want to grow quickly without doing sales too. Yeah, exactly. Exactly. It's like, I also want to be born rich and handsome, but, you know, what are you going to do? The it's it it takes I mean, these companies just take a lot of big time. And I think I think if you've operated for a while and you've seen how. Like, if you viscerally understand patients and like if you're if you're doing random stuff or if you're like literally there's no hope, then you should probably throw in the towel. But in a lot of cases, if you're doing the right thing and it just hasn't hit yet, you just kind of sort of you got to play out some more cards.

2:09:51And I do think I've observed a lot of financial investors having a like if it's not up into the right three months in, it's like, oh, man, we made a mistake. And like, what the hell are you doing? Or I was talking to a founder recently who has like a financial investor on the board now. and they were like, your competitor is, you know, at 5 million in ARR. Why aren't you at 5 million in ARR yet? Which is like, I get it on one level, but on another level, like you just got to, I think you got to make sure you're doing the right thing and sort of doing it in the right way. So I think that was one lesson that definitely carried over for operating, which I think you kind of don't have until I think is correlated with people who have done it and sort of understand the messiness of building something.

2:10:44I will say conversely, at both, I mean, I was at Microsoft before Facebook. And in both cases, you're pretty insulated from like the market you're operating in. Like, I think once you get to a certain scale, you're kind of just thinking about how to build new things for your existing customers as opposed to how to really, like, start in brand new markets. And so I had no real intuition for how to, like, evaluate a business and whether it was a good business or a bad business. And if it was how to think about the, like, I, there were obviously sales and marketing teams at both Microsoft and Facebook.

2:11:24but you don't really build an intuition for how to attack a new business category, I think, unless you've worked at a startup. So that was all new to me. I have a question. I've heard founders bring up the example of Figma as a company that took a long time to get a product out into the market and get traction. It was like four or five years until the first million of ARR. And I've heard founders use that as a reference point and be like, we're doing the figma thing like it's gonna take a while and i'm like no you're not they were doing something that was like fundamentally you know very technically difficult leveraging a new technology when there was no not of they were operating in a space that maybe wasn't hot for different reasons like you know sort of cloud design collaboration you know you you had i'm sure there was other players but they had sort of four years to be multiplayer wasn't a trend Multiplayer wasn't a thing.

2:12:21They sort of created that. So what would you say to founders that tell you, oh, yeah, we're doing this. But then you look at the market and you say, well, you have four or five other companies that have sort of more advanced feature sets maybe and are highly competitive. And I feel like having the opportunity to do the Figma thing is like a luxury of being very early. You've got to earn that. You've got to be Dylan to earn that. Yeah, I mean, I don't think, yeah, If anyone came in and said it was going to take like four or five years to build Figma, I don't want, I don't think anyone would build Figma too.

2:12:55I don't think anyone would fund Figma. I, I think there's an element of, um, like you, you have to, I think you have to be moving quickly in the short term. Like anyone, you know, sometimes founders will come in and say, I mean, what is it? It's April. And they will be like, oh yeah, we'll be ready to launch at the end of the year. and unless you're like taping out silicon or something that that scares the crap out of me because i don't know there's a lot of time between now and the end of the year um and so i i think you want someone that is just like iterating at an insane clock speed and like learning at every iteration and i think those iterations have to be pretty fast but like sometimes you just don't know when it's going to start to catch and so i know the figma story less well than than some of these others.

2:13:47But it's, you know, you're just talking to David and you guys are talking. Notion's a good example too, right? They were toiling away, you know, doing something, you know, in relative obscurity until they found the thing that really was magical. Yeah. One of my favorite set of videos, you can find it online, is there's like a Notion product demo from, I think, late 2013. And it's this, it's like this low code, no code environment. There's all these blocks. There's like a stripe block. So you can like drop payments in like it's a pretty it's a it's a pretty wild demo because you see like the through line from today to what it was back then.

2:14:26And it's clear like all the ideas are basically the same. It's like this canvas and it's got blocks and you can drop all this stuff in. But of course, the first iteration was wildly complex and no one really used it other than a handful of diehard folks that figured it out. And so of course, the rethinking of it was, okay, we'll make this an insanely great note taking app and then go from there and note taking to Riki and the like. And Notion is an interesting example because I think there's incredible stubbornness on the vision. And I think like what Ivan has been trying to build has like not changed in 12 or 13 years, but there was like a lot of flexibility on tactics and it was like, okay, this thing didn't work.

2:15:10Let's try it again. Let's try it again until something caught. And I think that's kind of the, like the, the, the art of it is like, have a really clear vision of where you're like, what you're trying to build over a five to 10 year window. And then, but just move insanely quickly and be willing to like constantly change tactics. I've been super excited about the idea of a email client built ground up around AI. Yeah. It seems like an obvious startup idea. We saw like the mailbox era where Dropbox bought mailbox and there was a new email client startup every few years. Now we're in this dangerous territory where you have a company like Notion where founder mode CEO at the helm, plenty of resources, clearly not asleep at the wheel, understands what AI is capable of.

2:15:56But as a product manager or just a user of email, how do you think about AI in the context of email? What are you hoping for? I have an idea in my head of what I want, but I think I might be wrong just because that's the nature of these things. So how would you break down that problem? How do you think about AI email? Yeah, I think actually this is one I've thought a decent amount about. Actually, in the beginning, So if I go back two years ago, two and a half years ago, my theory of the world of what would be interesting to invest in was there's kind of like three levels of the stack. There's kind of like the foundation models at the bottom.

2:16:34There's all at the bottom. There's like dev tools and infrastructure in the middle. And then there's like applications at the top. And I was generally pretty pessimistic on the dev tools and infrastructure space because I think it's just moving really quickly. The application layer seemed like the obvious place to invest. And you can kind of subdivide the application layer into like, I would say like head, torso and tail, or like horizontal and vertical, however you want to split it. And I was actually pretty skeptical at the time. Like it was clear to me, like I should not be writing my own emails in 2025 or to like a very small degree.

2:17:11Like there is a massive amount of corpus I've had in like a Gmail account for 21 years at this point. Like it should just be able to write every single email for me. But it's 2025 and I'm still writing my own emails. Like it maybe gives me like two word completions. And I think I have two conclusions from this. One is like the large tech companies are just, I think, way too risk averse to build anything good here. Like this Google app must be able to build this. Like it's just it seems like a very trivial problem. I assume like the risk of me accidentally saying something really offensive in email is just too high for them to launch anything here.

2:17:52And so I like and I think that's kind of true writ large. Like there is also like there is not a great assistant experience yet. Like Siri is still pretty bad. You can get like the meta AI assistant is actually pretty good if you're wearing like the meta glasses, but you have to wear the glasses to use it. And so I actually think the horizontal experiences are addressable by startups now because I think the big tech companies are just going to be too conservative. And then in terms of the experience that I want, I mean, I don't actually want, I don't really want, I'm pretty good at email. I'm a very diligent person.

2:18:33I go through all of my emails. I get a lot of them. Reading them is pretty fast. I don't need it to be summarized if someone sends me a really long email like I'm probably not gonna read it anyway Like I don't need it summarized like it is a negative signal if you send a very long email The the hard work is replying to them And if something could just give like read the thing and like write exactly what I was gonna write That would be an amazing experience, especially if I worked on mobile because like composing on mobile is a total pain in the ass So I'm amazed someone hasn't built that yet It doesn't seem like there seem like there are a lot of hard problems out there.

2:19:08That does not seem like the hardest problem. And so I'm surprised. Yeah, I mean, we're seeing a lot of like at bolt on AI narratives in the public markets. Are you seeing the AI narratives take hold in the fundraising around like scale ups, growth stage companies that aren't AI native companies, but they make so much sense in the context of of AI?

2:19:41I don't know. That's a good question. I think AI is very core to Notion, for instance. And so I think Notion has a very deep advantage here. And I think it's just the next evolution of notion, I think, I don't know if I have enough data points on this. I mean, the thing about AI, in my view, is like, it is not to, I never went to business school, so I may get the definitions of all this wrong. It's a lay person's understanding. But like in the sustaining versus disruptive innovation, I think AI is like pretty clearly a sustaining innovation in almost all cases. I think it like might be disruptive to Google.

2:20:23And so assuming like a scale up is still competent and can still build new product i think they can just kind of uh adopt this stuff as opposed to being disrupted by it so this is the uh sales force for mobile was just sales force yeah and so yeah you could imagine that sales force ai winds up working potentially or at least uh they'll they'll hold on to that for a while but uh it is a fun time because at least at the very least it's like a new battle for everyone to fight out like uh you know the gmail team needs to pay attention because notion's coming for them i love to see it uh do you recommend sabbaticals uh oh yeah um i most definitely too i had never so i had like worked continuously from when i was 14 years old um i like worked at a startup in high school and college and then i took off like a week between college and Microsoft and like three days between Microsoft and Facebook and a week between maybe it was 10 days between Facebook and Sequoia.

2:21:27I took off almost two years. I say took off because I kept like 15 boards. And so I was on like 30 hours of board meetings and one-on-ones a week. But it was still amazing. I got to like play baseball with my kids almost every day. Now they're pretty good at baseball. I knew nothing about baseball. And so now I know something. And I think I was terrified that I would just be irrelevant after taking some time off. But I don't know, maybe I am. Still got it. Still got it. Still got it. It was amazing. And I just like I would rather like getting to hang out with my kids is like the best thing in the world.

2:22:05I feel like saying that you're on a sabbatical allows you to release the FOMO, which like as an investor, there's probably no stronger force, right? It's like the founder wants to talk. Oh, I should probably take this call. Why conviction and why partner with Sarah? I have a bunch of guesses, but I'm assuming you could have basically gone anywhere, any firm raised$500 million out the gates on your own, you know, whatever. So I'm curious to hear. Well, I've known Sarah for a long time, almost a decade, though I recently discovered that she sent me like a LinkedIn message in like December 2016, which I did not see until like two weeks ago.

2:22:51But I thankfully ran into it in other contexts. And I think my theory on, I'd spent a bunch of time thinking about emerging managers and like, what is the right strategy for starting a new firm? And I think one thing that is underappreciated, or maybe I certainly underappreciated for a long time is the degree to which like venture firms you know there's this funny thing where like people who work in venture kind of get like a little bit ruffled when you call their thing a company instead of a firm because it's not a company it's a firm but you know what like firms and companies are like first cousins uh and they're they're all just organizations um and i think that uh you know if you're doing a startup um generally you don't say, I have an exception to this, but generally you don't say, I'm just going to go build the next Google.

2:23:46That seems like a kind of crazy thing to do. You start off with a market that seems kind of small. You dominate that market, then you expand to the next tier of market, and then the next tier of market, and suddenly you build something gigantic. And I think the same thing is true in venture. It's hard to just go out of the gate and be like, I'm going to be the next gigantic global multi-stage firm. I think you got to pick a market and go dominate that market and then sort of expand from there. And if you look at over the past, like 10, 15, 20 years, the folks that I think have done this well, it's like Matt at Paradigm with crypto.

2:24:23It's Mickey at Rivet with fintech. And so I, you know, AI was clearly going to be the most important thing over like the next 10 or 20 years. And so I think building a firm focused on AI and intelligence software and becoming the sort of preferred partner for founders in that category and then expanding from there seemed like the optimal strategy. And I think that's very much the founding thesis of conviction. And I think like Sarah and Pranav and the team here, we're off to an amazing start. So knowing them for a while, I think the thesis makes a ton of sense. and it's really fun. I think like one thing that is underappreciated in venture back to this like firms versus company thing is like venture is fundamentally predicated on the idea that there are things that like a two-year-old startup can do that like are hard for a 50-year-old company.

2:25:22But then when you like, but venture is like not always that introspective about itself. So I think there is a belief that there are things that like a two, three, four-year-old startup that is in founder mode can do that maybe a 30, 40, 50, 60, 70-year-old venture firm cannot. So when's the IPO? I know Andreessen's going out. General Catalyst, we're hearing rumors about. Conviction. Q4. I'd like to see them in Q4. How have you, what's your broad, I'd love to give you a few minutes to talk about enterprise adoption of AI. We talked last week about how Johnson & Johnson had basically piloted 30-plus different AI tools.

2:26:03Wasn't it like 600? It might have been like 300. I might have it off by an order of magnitude. It was like they basically tried hundreds of tools across different teams. It was called like the Thousand Flowers Program. And then they've just been basically culling a bunch of stuff that was cool but didn't quite work. What are you seeing as somebody who is, I'm sure, at times a big buyer on the other side at Facebook? Well, I mean, certainly there are things that are working. Like, obviously, Cursor is working in a gigantic way. I think Harvey's working in a gigantic way. Decagon and Sierra seem like they're doing really, really well.

2:26:40I caught some of the conversation you were having with David right before this, and you guys were talking about rappers a little bit. I don't love the term rappers. and to me there's like back to like the bottom middle top thing you can kind of like if you're going to build an interesting company I think you either have to attack it from uh you have the handful of researchers that can literally push the state-of-the-art forward which is like maybe eight organizations in the world or you know and understand and like love and can serve a type of customer better than anyone else in the world and just like build down from the customer.

2:27:23So you're either like building up from the technology or building down from the customer. And so I mean, I think that the companies that are working, I think, just like deep, just have really good taste and like deeply understand what their buyers, like what the customers need and are figuring out how to like adapt the technology to that. And then I think there's a bunch of folks that are like not or kind of like hypothesizing what people might need, but don't, don't like viscerally understand it either because they haven't worked in it or they're just like, they haven't figured it out yet. And I think that's the stuff that is probably churning.

2:27:59But I mean, I think it's kind of standard at this point in the cycle, like some things, some things are working, some things are not, I think more things will work. I think the defining characteristic will be like a deep focus on the customer, like the buyer and like building a great product for them. Do you expect big tech broadly to get more and more acquisitive? We were talking with David too around, you know, just this era, maybe 10, 15 years ago when you had companies buying, you know, a single big tech company, even a Twitter would buy many, many, many companies and it was probably healthy for the ecosystem broadly.

2:28:38And then, you know, now, you know, on the show last week, We spent a bunch of time talking about, you know, the FTCs, you know, what they're doing to meta around something that happened, you know, many, many, you know, over a decade ago. But I'm curious, you know, what's your outlook on M &A? I mean, I hope so. I mean, I think all the I think it all got shut down just due to government action. And I think like misplaced government action. I mean, I think there hasn't really been anything interesting on the consumer front in over a decade, like probably. I mean, if you ignore TikTok and TikTok has like a million asterisks next to it there.

2:29:22I mean, it's basically ChatGPT, I guess. And ChatGPT is obviously super interesting. But there haven't, you know, if you look at the 2008, 2009, 2010 era, there was Instagram, there was Snapchat, there was WhatsApp, there was Uber, there was Lyft, there was DoorDash, there was Instacart. And part of that is just like the mobile phone and obviously like all the change that that ushered in. But I think part of the problem is, especially starting around maybe it's probably 2016, 2017, there was just this crackdown on the ability to do acquisitions by big tech. And I mean, especially for consumer, consumer has this property that like very, very, very few things are going to work.

2:30:12But if it works, it works really big. But if it doesn't work, it's often like really talented entrepreneurial founders that can then either like take what they've built to a larger company and adapt it for that or work on something else at that larger company. And if you shut down the outs for those consumer companies, like eventually people just stop funding them. So like every year, some venture capitalist is like, this is the year that consumer is back. and I just I don't think consumer will fully be back until either there's like some massive platform shift or like those companies can get acquired speaking of speaking of consumer I'd be interested to get your thoughts on consumer agents I was talking with a founder last week that had an idea for a consumer agent in the insurance space and it was a great idea seemed like it'd be a very valuable product.

2:31:03And I basically explained my point of view is that even if OpenAI is not explicitly saying that they're going to do this specific use case, the sort of natural evolution is that at some point you will be able to use OpenAI to do a series of tasks like he was describing. How do you think of the, do you see opportunities in consumer agents broadly or given the foundation model's sort of emphasis on the application layer and building consumer products that it's sort of a dangerous path to be building on? Yeah, I thought for a while there seems like there's some intrinsic tension between being a great research lab and being a great product company.

2:31:49Like with the exception of OpenAI, like most of the other folks haven't shipped that much product. Anthroptik is starting to ship some product. And then OpenAI has had some complexity over the past couple of years. I think there may just be some intrinsic tension between being graded research and graded product. And I think that is good news for founders that are building horizontal products. And so I do think, I mean, this is kind of like the email thing. There's no great AI assistant yet for people. And it seems like it is a thing that is possible to build. I think the more general purpose you are, like if you're building something literally for multiple billions of people, I think the higher the likelihood that you are like in a really square dead conflict with the foundation model providers.

2:32:48But I think I mean, this goes back to the like building down from the customer. If there's some set of customers you can go build for that is even hundreds of millions of people. I think, I don't know, like a company, a lab like OpenAI has, like they have so many important things to work on. Like there has to be, I have incredible respect for OpenAI. But it's like, if you have some strict stack ranking of the teams within OpenAI, only 10 problems can have the top 10 teams on it. And so if you are doing anything after the top 10 problems that they have, then you're, by definition, don't have one of the top 10 teams working on it.

2:33:32And that seems like an opportunity for a startup. Good opportunity. Yeah. It's a great conversation. I have a lot more questions. Yeah, we'd love to have you back soon. Because, I mean, you can just talk about everything that's going on. It's amazing. We really appreciate you taking the time. thanks so much for having me we'll talk to you soon next up we got Edward Mayer from I'm going to mispronounce it I think it's Machina Labs I got it wrong the last time I tried to pronounce a word like that but we'll hear it from him he's got a bunch of interesting topics and he is going to talk to us about a bunch of stuff let's bring Ed in and then we will have him introduce the company so I don't mess anything up.

2:34:15And we'll go from there. Ed, how are you doing? Hey, guys. Good to see you. What's going on? Would you mind just kicking it off with a little background on the company, maybe how you pronounce it? It's Machina Labs, right? Yeah, you're right. Machina Labs. Fantastic. And yeah, just give us a brief overview for the listeners. Yeah, for sure. You know, I think Machina Labs is a response to something that maybe actually Peter Thiel said once, right? I don't want to butcher it, but it was along the lines of like, Like, you know, we wanted flying cars. We ended up getting, you know, 140 characters, right?

2:34:49Which kind of comes down to the cornerstone of like, okay, software develops really fast. Hardware doesn't. I think, you know, some people interpret that as something that says, oh, look, we don't have as much blasto in the hardware side. But reality is there's a lot of technological challenges in terms of building hardware, right? So what we're trying to do at Machina Labs is just making that much easier, right? You know, if you're a software developer, you know, two people can develop a program, you know, rent server from AWS, Amazon, deploy it. If you want to build a hardware, you pretty much have to go build a factory.

2:35:22Right. And that's why development timelines are like seven years, nine years. So what we're doing at Machina is we're using robotics and artificial intelligence to build a basically what we call a robotic craftsman. It's a robotic system that can do different types of manufacturing operations. and it's powered by AI. Basically, you can figure out how to pick up different tools, do different types of operations to make different types of parts, physical parts, without anybody having to program it or having to handhold it or build tools for it. And can you talk about the specific kind of like first instantiation of the thesis?

2:35:57I saw Justin Lopas over at Base Power posting and it looked like he used a picture of your warehouse. Is that you guys? Is that right? That is us. Okay, and so he breaks the new manufacturing space down into three categories. Manufacturing SaaS companies, make parts for other people companies, and change the way the part is made companies. And which one do you guys fit in? I think you're in the third, right? Change the way the part is made. Developed a way to make stampings, complex geometry form, sheet metal parts without dies. And so can you break us down like what is actually going on when this massive robotic arm is Like pushing into this metal explain why this is important how it works Yeah, so we wanted to build a system we call the robot craftsman, right?

2:36:46The idea is like where do we get started? And we started a sheet forming sheet forming as largest metal processing sector today I think it's like 280 billion dollar industry You know most of the metal parts you see day to day are she little parts like you're sitting in your car you're in a sea of sheet metal. Every other car body is sheet metal, four sheet metal parts, or aircrafts are basically sheet metal cans. But today it takes a very long time to get your first batch of parts in sheet metal work, right? You have to go make dyes, put them in giant stamping presses, like four story tall buildings, and then stamp your parts out.

2:37:21So our first kind of application of being sheet forming, we have two robots that form, you know, start from a flat sheet of metal between two robots. They have these giant fingers that are super strong, but they can basically push and pull on the metal that form it into a very complex shape without the need for any any dives or tooling. Basically, you know, you get your from idea to the first parting matter of hours. Right. It's similar to how a potter forms a clay ball with their fingers. They're coming into the sheet, deform it and shape it into different shapes. So, yes, it's a new paradigm, a new way of doing manufacturing.

2:37:59But it doesn't stop there. We're already doing like trimming. We're already doing slotting, hole making. So the robot can literally pick up another tool, figure out what it needs to do with it to do the next operation and does that. So today, the forming, it does a lot of subtractive work like trimming, hole making. It also does a lot of QC. Do you get worried? there's been a ton of there's been an explosion of new manufacturing startups over the last couple years um you know uh long since you guys started the company many of which promising to automate with robots the creation of various products um we covered earlier today on the show just how hard it is to like manu for nike to manufacture a shoe right which sounds somewhat trivial like you know humans have been make doing them for years you should be able to maybe we should be able to do it with machines but then in practice it's like there's so many different factors down to temperature out of all you know when you look at manufacturing broadly or i'm assuming you have some type of framework for evaluating whether something like can be automated to the degree that people would like to see out of manufacturing or areas that you know are basically shouldn't be touched, right?

2:39:10Like something like shoes, which have infinite sizes and a bunch of different factors. Yeah, I think it's like a combination of like three things, like the market size opportunity and how technology ready it is to be kind of disrupted, right? So, but also I think there's a lot of conversation around automation that is in the previous paradigm. I think for now, for the first time, we have this concept of element, this concept of we can actually reason very complex sequence of operations as long as we can train the robots on that sequence of operations. So it comes down to what data do we have available to train the robots?

2:39:51We already figured out, OK, you know, neural networks, LLMs, these transformers. If you give it enough data, it can actually learn a very complicated task. The real key was, OK, where do we generate enough data? Where do we have enough data to train it? So it means, and unfortunately for a lot of manufacturing tasks, the data is not out there, right? You cannot train a very complicated model on it. For, you know, for chat GPT, the internet had 12 of free data that you could use to create a very complex kind of chatbot. But for us, coming up with rice sequence to make car doors or shoes doesn't exist.

2:40:30So the key is, can you actually provide a solution that can scale with limited amount of data, with human intervention and limited amount of data? So you can deploy it in the field and get enough traction so we can have now enough data that comes from your machines to train your model. And that's why they went after Sheet for me. Can you talk a little bit about the NVIDIA announcement today? That's very exciting. seems like it might be a little bit of like a side quest or is this like in the critical path to, you know, mass production? Yeah, no, NVIDIA's today announcement was a kind of little fun thing we did.

2:41:07NVIDIA's an investor in us. So fundamentally, they are very interested in what we are trying to do, you know, being able to capture data from physical phenomenon and build models that can manipulate the physical world. But I think we work with their artists in residence. It's actually those OpenAI's artists in residence that we work with NVIDIA collaboratively. to really turn just the artist speaking to a system into a piece of art, right? So Alex, the artist that would work with us, basically spoke what he wanted to build, what sculpture he wanted to build, and the full stack of generating the code, running the robots, all were done autonomously.

2:41:41So from speech, from intent, all the way to the physical part, without anybody ever touching anything. I love that. I was, when the Studio Ghibli moment happened, I was taking some photos of my kids' playsets, studio gibbifying them, and then immediately I wanted to print them out because I wanted to have some sort of physical instantiation. Just showing the phone was not satisfactory. So the idea of speaking words and then getting a sculpture out, that sounds really awesome and futuristic. Yeah, yeah, go. How, there's a lot of investment in humanoid robots lately. Many of those promising to revolutionize manufacturing, replace human labor, automate the production of lots of things.

2:42:23As somebody who's been doing it with robots since 2019, how do you think of that form factor in the context of manufacturing? Yeah. Actually, Super Bowl is on here. That's right. I think the question is, to your point, is the first application going to be in manufacturing? I don't think so, right? I think the biggest problem, if you want to think of a startup as like, what do you need to do risk first? The first thing, you give an example of like Nike figuring out how to do the shoe manufacturing. The first thing is actually intelligence. We have kinematic frameworks for a long time. You know, we could do what humans does in terms of kinematic freedom with industrial robots.

2:43:07We can actually do it more precisely with higher force with industrial robots, which was what we need in manufacturing setting. So the missing piece really was intelligence. So we're kind of a little bit intelligence first, right? We don't need to solve the joints. We don't need to solve people walking around, like robots walking around and, you know, having the human form factor. If you solve the intelligence, you have enough kinematic frameworks, which is industrial robots, to do what you need to do. But that being said, I think, you know, humanoids is a huge opportunity, maybe not in manufacturing, but downstream and homes and all other places that we can use human.

2:43:40What is the, you know, I imagine you guys are a beneficiary from some of the tariff stuff in some way. But on the actual machine side, are, you know, you and the industry seeing challenges of, like, you know, how much of, like, the actual robots that you guys are leveraging are sourced outside of the country? Chris and Hadrian was saying, yeah, my CapEx goes up by 10%, but the demand has been way, way higher. So what's been your experience? I mean, that's true. I mean, what we do here, the challenge is for a lot of work that we do, and especially in the defense, aerospace defense, there is no industrial base.

2:44:24So we have to do it. So demand is always there. Now, 70 % of our bomb is off the shop. And we intentionally tried to do that so that we can actually finance it easily, right? use multi-pushers off-the-shelf equipment so they can easily finance the full hardware stack. That being said, a lot of the hardware that we use is either produced in America or it's in very allied countries. For example, robots were produced in Japan. So the tariffs are a little bit more digestible there. But that being said, we are one of the very few manufacturing companies that are doing almost software like merchants.

2:44:59So there is enough room for us to be able to absorb that cost and still have a very high value, high margin list. Interesting. On that note, we've seen some investors, strictly software investors, poke fun at VCs that are investing in manufacturing, expecting software -like margins. And there's sort of this sense that, well, manufacturing hasn't, for most things, hasn't historically had software-like margins. You're seeing it today. how do you think about the margin profile for advanced manufacturing over time even you know even in things that are like non-chips right yeah yeah so um so so it's it's interesting arbitrage i think there's a lot of people thinking about manufacturing solutions in different ways i think you can think of it as automating what traditionally has been done and i think that's usually end up being very low margin, right?

2:46:00But if you're creating something new that, you know, has some kind of arbitrage on either labor or has some kind of arbitrage on equipment, right? In our case, whereas you don't have to make dyes, right? And a dye, a single dye for, you know, a car door can be up to a million dollars, right? So for us, we're faster, but we get rid of that asset. So it allows us to have the, you know, at the same cost parity, have higher margin. But I think, yeah, down the road, the margins could erode and that's why we're thinking about it as a platform. It's a robotic system that can do forming today. Tomorrow it's going to do your next operation.

2:46:37It's going to do bending. It's going to do hemming. It's going to do forging. So you're constantly expanding the capabilities of the system, which allows you to sustain a very larger volume business as some of the margins of the older processes kind of erode. Yeah, last question. you mentioned that you might have a golden dome take. We did a little deep dive. There wasn't a lot to dig into. I'm curious. It doesn't seem like it would interface with your business too much, but maybe you just have studied the industry. So what do you think is going on with the golden dome? He's making an actual dome.

2:47:15Dome, yeah, make a physical dome. Out of gold to go over the United States. I would love that. If you like the blue, enjoy the blue above us while you can. It's going to just be all gold soon. Yeah, that's right. I mean, there was like people were talking about how it's like competing with a golden dome at Nordame, which is like actual thing in terms of the naming conflict. No. So why do we actually fit into this paradigm? We work a lot with missile manufacturers, right? And manufacturing components for the body of the missile for them. hypersonics is one of the main enablers of how we can actually have defense against some of these missile attacks so for hypersonics you need to start processing very complex materials materials that were traditionally very hard to to process things like high temperature alloys like nickel titanium and and because of our robotic process locally manipulates the material we have way more control to process the material without getting to failure.

2:48:14For example, we can form titanium sheets without tearing it in room temperature, which is traditionally not possible, right? So I think there's a lot of interesting opportunities there for us and we're exploring with our primes that we work with. But yeah, I mean, the whole concept of Golden Dome is going to be interesting. What I've heard last is it's going to be 7 % of the DoD budget in the next two, three years, right? Once it becomes programmatic. Yeah, so that's what I've been doing. Obviously, next year, we're looking at, I think,$20 billion on missile defense. But over long term, I think the plan is roughly 7 % of the defense budget.

2:48:49So it's going to be a huge opportunity. And obviously, I think something that's probably very necessary for that. But yeah, we can dive into details, but I don't know how much time we have. No, no, no. I mean, I think we'll have to have you back on when there's more details that emerge and we actually get a deeper dive into how the program record evolves, what the subcontractors might be looking at. Right now, all the names parties are no comments, so there's not too much to dig into for good reason. But it'll be super interesting to see how this pans out. Jordy, anything? No, this was great. Yeah, we got to have you back on soon.

2:49:24But congratulations on the success. And I'd love to come see the machines in action in person. Yeah, it'd be really amazing. We were half an hour away from downtown LA. Oh, awesome. Yeah, that'd be awesome. Let's do it. I want to do the show with a robot. I want a robot to make us a bigger gong. The biggest gong possible. We've got to make it happen. We've got to make it happen. That's something we actually do very easily. Yeah, I can imagine. It's a perfect match made to happen. Our people will talk to your people. Yeah, our people will talk to your people. This is fantastic. Thanks for coming on.

2:49:56Thanks so much, Ed. We'll talk to you soon. Bye. So next up, we got William Brown. The idea of like a 20-foot gong is very appealing. Very appealing. That you could have watched be made from the raw material. Yes. Be perfect. Be perfect. And I mean, you could actually etch different things into it. There's so many cool things you could do with that technology. It's very, very awesome. Anyway, welcome to the show, Will. How's it going? Good to have you on here. Thanks for having me. of your posts for a long time. Many people have said one of the top posts, poster of the year. I think potential poster of the year, for sure.

2:50:35He's been burning up the timeline. Jordy, where should we start? I mean, I have a bunch of stuff that we can go through. I mean, we can just dive right into it. Do you want to give a brief intro on yourself and who you are before we just start talking about the timeline? Sure, yeah, sounds good. I'm Will Brown. I'm a researcher at Morgan Stanley. By the way, nothing I say here as Morgan Stanley opinions. This is all me kind of just like sharing my thoughts. I'm a researcher. I work a lot on stuff related to LMS there. My background was in reinforcement learning theory. I did my PhD at Columbia.

2:51:08So I've been in New York City for a while. Big fan of New York City. Great things happening here all the time. And yeah, I also just like talking about the stuff on the internet and like participating in the open source community. There's lots of like cool either projects or code bases or papers or models always coming out. And like, I, a lot of my job is like, needing to know all that stuff and being a liaison, essentially, like from the internet to the company where like, people want to understand like, okay, what's the latest model for XYZ that I should be using? What's the right open source toolkit, especially because like, at a big regulated company, we need to understand the landscape, especially for things that are like, downloadable off the shelf without needing to like onboard a vendor, like some things you're on a vendor for, but it's also like a much heavier lift and so like we need to like map the landscape of like what's the right tool for the job for everything l unrelated and so that's a large part of what i do and it's also like my excuse for being on twitter all day that's great that's a great excuse where you want to start uh where uh aside from x like where where are you getting signal without giving away without giving away all the alpha because i imagine like you know by the time drarkash has like done a podcast on something like Like, you know, it's been the information is like, you know, disseminated.

2:52:23It's not necessarily alpha. There's a surprising lot of alpha still on X just from places where you don't. Like, so there's places I have not found much alpha on LinkedIn. The group chats, the Anons, the open source, like GitHub discussions. Lots of really good stuff is buried in like a GitHub issue or like a feature request where someone's like, hey, this thing would be cool. And these ideas are just all over the Internet, but you got to like know where to look for them. Yep. I want to talk about humor. You actually posted about this like a month ago or two months ago. You said it's interesting that 1.5 billion parameters is all you need to crush math competitions.

2:53:07But you need like 15 trillion to make the model be funny. Maybe humor is the right measure of true intelligence. And for a long time, my eval has been tell me a funny joke. And every time there's a new model, it's tearing up X. And I ask you to tell a funny joke. And it's always the worst joke I've ever heard. It's kind of an anti-joke. But is that just a lack of labeled data, essentially? Or do you think there's something more innately human to the idea of humor? I mean, I think humor is really hard. And it's also very hard to, it is very hard to label, but I think it's also really hard to like, okay, this is like a big debate topic is like, would it like, I think people kind of assume, oh, just like train it on funny data.

2:53:55but like the things that make things funny are really subtle and pretty varied um a friend of mine co-worker actually did this experiment where he like he tried to like have one model be a judge of like is this funny or not yeah and what they do is they like lean into things that feel funny and then the results were actually kind of funny but what it ended up just doing was swearing more so like if you swear a lot models think that's funny um and so there's all these like kind of like there's a lot of cheat codes sure and rl and training these models is like the path of these resistance is to find the cheat code um but like real humor like the people that to be really funny have to be really smart like think of like your favorite comedian like uh norm or lair david or like all these people are like really smart you can tell from the way that they compose jokes like there's like an attention like attention is in like transformer attention of like ideas that need to combine in a very sparse like precise way to make a good joke is like you can't just like shove things together you kind of got to thread the needle to make a joke land um it's not a very coarse mechanism and so i think like yeah uh gpt 4.5 is like ginormous model trillions of parameters most likely um and that like there's more room in the model to have these like little sparse connections materialize as you go through layers of the transformer um and i just haven't seen anything like that come from a smaller model how scale pilled are you based on the results from 4.5 are you off to the races scales all you need or like lesson pilled or what i'm very rl scaling pilled like uh i'm not big transformer pilled really like pre-training wall real bill.

2:55:46um i think we don't like is if there's another hundred trillion tokens of data sitting out there ready to train on go for it um i don't know like one i think is like people should do some nap and math about like how long until big gpus are readily available and it's it's gonna gonna be a while before people can really run like even deep seek r1 with like easy resources like you can you can kind of do it on one node but like the quality bump over things that are much smaller is just like like the we're hitting diminishing returns on capital investment is a lot of it like they're taking out of the api because like the they can sell other things with the same gpus and make more money is part of it like it's a lot of compute to keep a model up like that it's slow and the things that it's better on are like not that economically valuable and so the sweet spot appears to be in this like between like 30 billion active parameters and or parameters total and like a couple hundred maybe but like i don't know that like like when meta releases this behemoth model i don't think anyone's really going to run behemoth sure for like their day-to-day stuff yeah it's just probably not going to be worth it so i mean given that uh you know tyler cowan's calling 03 AGI, like the economic results of these like big, but not crazy big models seems to be pretty good running on a node.

2:57:15Should we be talking more about, hey, it's good enough. Let's bake it into an ASIC. Let's just bring down the inference cost to basically zero like we did with Bitcoin hashing and whatnot. Like, is that the conversation we should be having? I mean, I think that's been, that's kind of been how like Crocs or Rubus Avanova are like playing that game. Yeah. And I think like those businesses make a lot of sense. Like, they can kind of say, okay, this version of a transformer, we're going to be in this ballpark for a while, we can make that into our plans a little bit. I think what's the next way 2025, like, people have been saying you're the agents, but like, what I think that means is a gentler car out, like, we're realizing our all works, like, the reason O3 is good, is because it's trained to use tools, the way you training models to use the right tool for the job is reinforcement learning.

2:58:02And they've said as much like deep research, reinforcement learning. People have been throwing like random tools at models for two years and it only now works, even though the models are the same. Like GPT four was a bigger model than a lot of the models that we are using now. It had just as much training data, but it was not, or at least doesn't seem to have been RL in this specific way. And so that's kind of like my bet is like, people are going to really want to train models to be agents and i think you can get that to work well with a pretty small model does that mean like a flourishing of rl'd uh big transformers for different tasks or are we still searching for like the god model that can do everything all at once i mean so okay i think there's a a couple leaps we need to have models that can do everything all at once for like a super long amount of time um like my i tweeted something about this like my what i'm happy to call oh three ten minute agi and i think like framing agi in terms of like length of time it takes a human to do a task is like more reasonable than like a global framing like sure there's a bar of like drop and replace for a human that we are like definitely not at yet like for general jobs but most things a human can do in 10 minutes you can like get oh three to do that pretty well um Um, and so that's a very, like, I think there's even, even like a web, like make a website in 10 minutes.

2:59:28Okay. You have a good human designer is like, probably could whip something up pretty quickly. Yeah. But not like an entire design system that works together across all the different websites. Yeah. Makes a ton of sense. Um, so, uh, so, so, uh, seems like we're transformer maxing. We're RL maxing. Uh, is there a new paradigm that you're excited about, uh, program synthesis? Are we bringing back symbol manipulation at some point? Like what are we going to pull from the tool chest to make this thing go to the next level? I mean, I think it's just tool calls. Like I think when people say program synthesis, like we're already there.

3:00:01Like O3 is program synthesis, but the programs are like JSON and Python. Like you can do a lot with that. I did some tests on like RKGI problems where you give the screenshot to O3 and it can like basically figure it out in 10 minutes of like zooming in and looking at the thing and then writing some code to see if it like reproduces the thing. and like it doesn't nail it but i would they haven't released the benchmark but i would guess it'll do reasonably well um what uh as much what are you seeing around ai adoption and finance broadly i feel like we've been promised like you know somebody can just press a button and generate the deck and like generate you know uh 20 page investment memo and and uh are are are these types of deep research style tools being used extremely heavily already?

3:00:52Or is there just even a greater, now that they're being used, hey, let's go spend our time talking to three times as many experts so that we actually get proprietary insight into the business? Great question. And I think there's a couple of different answers I have. One is that on one hand, we at least have been pretty, I think, fast at certain things at adoption. Like the day GPT-4 launched, Morgan Stanley had integrations because we had been working on it. And these were like, we had press releases, but these are like, we are ready to go. And so there are certain things where like initiatives can happen where effort comes together to make a thing ready to use.

3:01:34But there's a long tail of smaller tasks that there's not a drop and replacement for. if there's a vendor it would take a long time to onboard them and it's not going to really solve the problem right away and you could build something from scratch if you put a few people on for a few months but like engineer hands are like few and far between um and so i think the deep research is an example of a product that i would say like works really well um for the thing it's built for it's doesn't quite like do other stuff super well like if you want it to give you a table of like 50, very precise things.

3:02:10It's going to make some mistakes there. Because the report format has a lot more room for like slop without it seem like seeming like noticeably bad. The PowerPoint, like Microsoft PowerPoint copilot is not great. It's not a thing that I have heard many people say saves them up time. What are you, have any takes on enterprise AI adoption broadly? We were talking, I think, late last week about how Johnson & Johnson had tried hundreds of different tools. They went through the effort to just try a bunch of stuff because there was a top-down mandate, and now they're just cutting probably 90 % of it.

3:02:53And so all the startups that were like, yeah, we have a... Pilot with J &J. It's going great. They won't churn. Well, 90 % of them just churn, maybe. i mean like most of these pilots are very much intended to be churned like they're not they're very much in a they're not being rolled out broadly they are coming through in a kind of walled off environment for people who are like going to be the beta testers and so like we have a crew of people who like and i'm involved with this as well like they're as new stuff comes like online we test it out we give it feedback um most of these do not convert um because like we're very willing to like try stuff um in terms of taking the call in terms of like look at a demo but actually making a thing be part of like the company-wide workflow is like a pretty heavy blip um think of like onboarding a cloud provider like a lot of the reason like maybe this is like one reason cloud providers have the margins that they do is because like moving clouds is really hard.

3:03:56Moving all your stuff from like AWS to Azure is a pain. I think especially in regulated industries, like a lot of software onboarding faces the same sort of hurdles where you can't just like bring it in and use it. You got to like go through a whole process. And some companies have kind of planned for that and some have not. So like one example is I think like a reason that Windsurf has been successful as a Cursor competitor is they lean way harder on enterprise than Cursor has. Like they have really designed for enterprise integration, whereas Cursor really has not. Do you, was the Windsurf news surprising to you at all or was that just obvious?

3:04:40OpenAI cares about coding and they should have a sort of dedicated enterprise coding. I mean, it makes sense. Yeah, I think, like, to me, it felt like a sign of there being some more friction with Microsoft because, like, originally it was like, oh, they already have that. It's co-pilot. Sure. And so this, to me, seems like them taking a step away from Microsoft. But, I mean, this is just speculation. Yeah. it does make sense that it's Cursor and that is Windsurf and not. I mean, they did try to buy Windsurf Cursor, supposedly.

3:05:22Like, I'm a Cursor user. I think it's great. I haven't seen anything that really sold me on, like, go move to Windsurf. I'm sure it's fine. It's just, like, the bar to, like, switch for me is, like, I need a thing to have a feature that's, like, killer that the other one doesn't have. And I have not, like, seen that yet. But I'm sure they have plenty of good stuff. Now that we're like a couple months out from the DeepSeq moment, what is your takeaway? Is it something around kind of the optimization of the inferencing these models? Or how have you processed that news now that we're a few months out?

3:05:59Yeah, I mean, they're like incredible at engineering. Like I think a lot of their open source releases have really like, like since R1, they've released a lot of code and details on their inference stack and training stack. Even see Sam Alden is posting like hey if you work for a high frequency trading firm like come work at open AI And I read that as like oh they want to optimize their models now Right, I think the some of the big players have realized they didn't have to that much like Deep seek is serving all of China on 2000 GPS. It's kind of silly that Anthropic can't like has to have the warning about oh we have high limits please try again later for like their paid users like that's whereas like the deep seek chat is literally free anywhere um and so i think some other people probably are working on upping their uh inference efficiency game but it's also like hard um because it's very model specific every model has its own quirks and you got to optimize around that um it's hard to like have things be reliable and fault tolerant um so you think you can't just port back like fp8 wasn't that one of the things or like the mixture of experts blocking, all those different things.

3:07:10Like it seemed like there was some stuff that where it was like week two, we were getting, you know, analyses. And I was like, this will probably be open sourced and ported to Llama and all the others like pretty quickly. But has it played out differently? I mean, to me, the surprising thing was not any individual one thing. It's that each of these is maybe like a 30%, 50 % gain, but they have like 10, 15 of them that all stack. And so getting all of these to stack nicely is what's hard. that that's interesting that's a great take yeah that's interesting what are you expecting out of uh alibaba and and quen yeah three oh i i mean i'm really excited like they make i think still the best model suites for like doing research so like i do almost all of my experiments on quen models just because they have a bunch of them there's like so many versions like for every different model size there's like seven different versions there's like a code one a math one a a multimodal one, audio one, a bass instruct, RL.

3:08:05Like they really are optimizing for user friendly, like open source model ecosystem in a way that Lama was doing last year. This current year, we'll see if they can get their act together. So are they are are they also like RL pilled at this point and moving? I'm sure they are. Yeah, like they have they have a reasoning model. the reason model is not as impressive like but it is a pretty small one it's like a 32 billion parameter model that like does well on math competitions um i don't know that anyone has really bitten the rl bullet in the way that deep seek did early and then opening eye has been doing lately where they're really kind of betting like opening eye seems to be essentially betting on scaling up RL as the path.

3:08:57And that it's not just longer reasoning, but it's reasoning integrated with system interaction. And I like that's kind of the drum I've been trying to beat for a while, like a lot of the open source work I've been doing is around multi turn tool calling RL. I think that we need better ecosystems for that. There's like very like there's starting to be more tools you can go use. But for a while, there's just nothing that supported this. Everyone was very rlhf pilled yeah for too long what do you think is going on with llama 4 did they just miss the memo about rl or uh is there something else at work i mean doing this stuff at a huge company where a lot is on the line is hard and it's way easier to do nothing than something sure um and meta also like doesn't have to print money off of their models like they don't uh like i think one analogy that i've been giving people is like why did amazon not win nlp they had like 10 000 people in the alexa team in the 2018 yeah and they have just now released like okay language models um and they're really betting on anthropic to drive their revenue there um how are you thinking about uh the trade war in the context of the data center supply chain and is that even do you pay much attention to that or is it kind of you're busy enough on on i do follow it yeah i mean um i tend i listen to dylan patel talk a lot of stuff um he's great um semi-analysis it's hard for me to like give a real take i don't think i think i think it's like important to keep an eye on there's a lot of pieces in the supply chain um that will get i mean it depends on what happens like yeah it's gonna get messy for sure probably um but i don't have like a hard stance you should become a vc and then you can just give it yeah yeah exactly yeah you should flip over no i just think it's funny like uh in a year we'll be like bro we You're worried about the wrong transformers.

3:11:05Yes, yes, yes. For sure, with the energy thing, for sure. I have one last question. How's the culture at Morgan Stanley? I mean, it seems like, talking to you, you sound like a Silicon Valley founder, but you're at a company that's over 100 years old. Are you part of a new guard, or has Morgan Stanley always been this way, and you're just the first to post about it? What's it like working there? I'm definitely like the first to like read a lot about it, but like the team I'm on has been around for maybe like, it's like a machine learning research team where we try to, we try to be like a version, a finance version of like an MSR or a Bell labs where we are like off, keeping up with the research.

3:11:47We write papers, we publish, we go to conferences. We tend to, we kind of hang around as like expert consultants and advise on a lot of efforts throughout the company. And so the company has definitely been like betting on machine learning for a while. I think we are like, probably ahead a lot of a lot of like the quant firms in terms of the how early we were on realizing deep learning was important. And I think we've done a pretty good job at like, keeping up with and following the like, Ellen craze, like we were, we partnered with open AI before chat GPT. Wow, wild. And yeah, that's amazing.

3:12:25Well, this was great. Let's make it a regular thing. Yeah, yeah. I I definitely want to have you back when there's a new model release or something or new paper that you publish. Yeah. If I can do a quick plug. In June, I will be at the A-Engineer World's Fair in SF giving a talk as a follow-up to my previous one. Very cool. I think we're going to that. We'll see you there. Oh, sweet. Awesome. See you there. Yeah. And then also, I am doing a course of some kind soon. Official announcement pending. But if you really want to like... It's how to get rich quickly? Agents and RL stuff. Okay. And so if you DM me your email, I'll put you on the list for more info.

3:13:05That sounds awesome. Awesome. Good luck with it. I'm excited. Yeah, this has been great. Yeah, thanks so much. Awesome. Thanks. Thanks for coming on. See you. We'll talk to you later. Bye. Should we go through some timeline and then get out of here? Yeah, you're a timeline addict. I mean, there's so many posts and we don't have enough time. There's so much in the – Monday is always a stacked day because you have a whole weekend of posts to catch up on. Of course. Adam Rankin says, you're coding at the bar. I'm drunk at the office. Respect to that. I love that. Aiden says, the people I intellectually respect the most have quite lopsided output input ratio.

3:13:42They write, build, create more than they read, study, or absorb. Geniuses are not sponges. They're volcanoes. I like that framing. That's interesting. I'm kind of going backwards. I like this one from Talmudic. The first time I heard of the GoMad gallon of milk a day diet, I laughed. my i laughed there's no way i'm having my milked intake for a diet go mad what are you cutting the idea that he's doing two gallons of milk a day hilarious to me i timeline and turmoil timeline and turmoil to uh this weekend uh paul graham taking shots of palantir saying you shouldn't work at palantir uh gary tan chimes in and says is now an awkward time to mention i helped come up with the very first Save the Shire t-shirt at Palantir.

3:14:29Very, very funny. That's great. We love Palantir. We love PG's writing, and he is a foundational member of the tech elite. But he gets spicy with the political takes. He has strong political opinions, and he brings them to the timeline. I like that Gary and PG can have a little bit of fun. Yeah, exactly. Love to see it. WebDevMason, always with some great takes. There's some people. The Blue Origin story has really grown since we first covered it. Now people are very upset that Katy Perry went, said it was an affront to real astronauts. They didn't go all the way to space. They only went to the Carmen line.

3:15:10I saw people saying that, you know, how could you go to space when there's problems on Earth? Yes. Then you could also kind of extend that out to how could you do anything when there's problems on Earth? I think that's so funny because like obviously it's like, why are you wasting money on space when there's people that are hungry? But we literally talked to a farmer who was like, Starlink is increasing farming yields. It's like, no, actually like going to space and spending on like the crazy thing actually help people eat, which is great. But WebDevMason says, this is so sad. Dead culture stuff.

3:15:43Eject me into the timeline where she yanks the microphones in and shouts. I flew over our home world and saw us, the pale blue dot, the blessed sprouting seed of the Virgo supercluster. And I must report to every living soul that it is dope. So she wants, because the story is that Katy Perry now regrets going and says that there's been too much backlash. She says that she shouldn't have gone. But Mason says, no, own it. Go and celebrate it because it is fantastic. Question about watches. We already talked about bezel. but is it appropriate to wear a Rolex GMT as an analyst? I love this answer.

3:16:20It says, it depends. Imagine your first all-nighter. There you are burning the midnight oil when you decide to take off your Rolex GMT and place it on your desk to allow your wrist better control over the almighty Excel shortcuts you are about to employ. You take a look around and what do you see? Every other analyst has placed their Patek Philippe Calatrava travel time in front of them for the exact same reason. Now, if you, sir, are capable of bearing the overwhelming feeling of shame that will inevitably conquer you, then, by all means, consider it absolutely appropriate. Hilarious. What a great post.

3:16:57Hilarious. It was hilarious. Anyway, we should cover the VCs, what's going on in higher ed at some point. But there was a good post by Connor. He says, VCs are attacking higher education. Trump squeezes higher ed funding. universities sell PE holdings to fund their operations. VC funding dries up. I don't think this is actually going to happen. Uh, the, the, the news is that Yale is like selling off a portion of their venture capital portfolio, but I doubt that that really hasn't affected the VC funding landscape. And I don't think, I don't think the university endowments are a major, major source.

3:17:32I think like pension funds are even bigger now and, and, uh, and like, uh, sovereign wealth funds are even bigger. Yeah. And also very likely, again, I doubt they're reacting to short-term pressure. It's probably, you know, Yale selling$6 billion of secondaries probably is part of a larger strategy to generate liquidity on long duration investments, right? So here are some posts that I want to follow up on. We'll highlight them today, but we'll either have these folks on the show or do deep dives on these topics. Person of Swag Adam says, vibe sheeting, is this anything? He's built cursor for Microsoft Excel going into the lion's den, competing directly with Microsoft Copilot.

3:18:19But we just heard it that some of the Microsoft Copilot products are falling behind a little bit. And so I thought it was fun that he was building a, like a plugin just into Excel. And I could imagine this becoming a great company. So excited to talk to him about that and dive in deeper. Also, there's a new planet. Delian mentioned this, K2-18b. I did a whole deep research report on K2-18b. Very, very fascinating. Interesting. I had ChatGPT tell me an entire speculative science fiction story about how we might get to K2-18b. Spoiler alert, it's going to be like 500 years to get there, even at like 0.1c or something like that which is the speed of light because it's so far away uh but a multi-generational ship could do it how many episodes we could do in 500 years we could do a lot quite a lot interestingly i had chat gpt i was like uh tell me a sci-fi story and like why don't you just make me the character in it and it was very weird uh and it was like now you're in cryo sleep for a hundred years uh it was like now you're an old man but because of uh life extension technologies you're 150 years old and like uh like all like your kids are now older than you because of this weird time thing it was very fun very weird all right not appropriate for the show anyway uh last one is uh uh notable cap this is a leak from arthur rock arthur rock uh series b uh to uh browser base right paul klein who's been on the show so uh i assume one last one last one from Near.

3:19:52I like this one very. Reminder of how far AGI goalposts have moved. It's from an old book or something. It says, an AGI could beat you at chess, tell you a story, bake you a cake, describe a sheep, and name three things larger than a lobster. It's also solidly the stuff of science fiction, and most experts agree that AGI is many decades away from becoming reality, if it will become reality at all. The last three models I use could describe a sheep. Couldn't bake me a cake, though. We need the human rights for that. But it can tell you how to bake a cake. And it really can do all of those things and more.

3:20:29So, yeah, AGI's here. Just get on with your life. Unevenly distributed. Yeah, to some extent. I was at the beach over the weekend, and I was thinking to myself, I was looking around, I was like, none of these people are AGI pills. And then everybody went back to enjoying the beach. Yeah, that's the nature of it. Anyway, thank you for watching today. We will see you tomorrow. We got a great show for you tomorrow. Bunch of news breaking and we'll talk to you then. Bye. Looking forward to it. Cheers.