Google I/O Reactions, Large IPOs Incoming, Figma's AI Assistant | Dylan Field, Brian Chesky, Feross Aboukhadijeh, Tae Kim, Immad Akhund, Marcus Milione

9:36Brian Chesky:You're working with a buzzsaw. I do know. Dust in your eyes.

9:38Tae Kim:But these look cool. These are sporty. I'm much more likely to just commit to the bit if I'm going to be wearing a face computer.

9:46Brian Chesky:Full cyberpunk. Full clank. Yeah, full clank. You'd clank out. Full cyberpunk. I think that might be the move. I don't know. For some company, a challenger company could potentially do that. Maybe friend or something. Anyway, what else? So Warby Parker traded down on the news, which Shiel Monaut was surprised by. Why is Warby Parker down 14 %? They announced a partnership at Google I.O. that's been in the works for a while. Is it because they aren't available yet? And our friend Rat King, Mike Isaac, says, OK, Google AI glasses with Warby Parker are officially coming for Meta Ray-Bans. Google also said it would bring Gemini to glasses this fall with Samsung Electronics and the eyewear companies Warby Parker and Gentle Monster.

10:26Brian Chesky:the glasses which work similarly to meta ray-ban smart glasses come with a camera microphone yeah

10:31Tae Kim:at what point at what point does google just buy warby parker right it's a three billion dollar company it's actually done quite well yeah over the last uh over the last six months it's up 43 in the last uh six months although it's been um almost flat uh this year uh i would say i expect that smart glasses are going to have product market fit among people that need to wear glasses first, right? If you already have to wear glasses all day long for your vision, why not throw some smart features in there? It's going to be harder to get someone that doesn't need glasses to add a new device to their rotation, right?

11:12Brian Chesky:Yeah.

11:12Tae Kim:And so Warby Parker's done quite well and has been surprisingly resilient. But they have incredible distribution. And I wouldn't be surprised if they get sniped at some point. I mean, deeper integration into a traditional, I don't know, like workflow.

11:33Brian Chesky:A lot of the Google I.O., we'll get into this, but it was talking about Spark, the personal AI assistant. And when I think about...

11:41Tae Kim:It's in any gravity. I know, I know. I know. Oh, just look in Omni.

11:45Brian Chesky:Yeah, there's a lot of names. It's Google. There's a lot of products. You're referring to, of course, Nathan Clark's post. It's in Gemini. Just created an AI studio. Oh, it's for your personal Google account. For Workspace, you need Gemini Business. No, not Gemini Advanced. That's AI Pro now. Unless you need AI Ultra. Oh, agents? You do that in Spark, actually. No, not Gemini API Managed. And it's the typical meme. But the interesting thing is that I do think meta Ray-Bans, like it was always like, okay, you have a deep integration with WhatsApp. You have a deep integration with Instagram, DMs, maybe Facebook Messenger.

12:21Brian Chesky:Some people are still using that. But in terms of like wiring into your life, there are way more people that see Google Docs, Gmail as like the central node in their personal life. like people think of like my, all the stuff I have saved on the desktop of my MacBook is like my core repository. A lot of people think, okay, for the important stuff, I'll put it in Google Docs or Google Drive. And then most things flow through Gmail. Most things flow through iMessage. There are some people that just are like, yeah, WhatsApp is the number one screen time for me. That's where I really organize things.

13:00Brian Chesky:but meta doesn't really have this knock-on effect of like, oh, yes, it's not necessarily an enterprise-level productivity suite, but there are people who are like, yeah, I'm using Apple Mail, iMessage. I save my files in Apple Files, the cloud storage I use, my camera roll is super important. So an AI agent running through the Apple ecosystem can be valuable, and an AI agent running through the Google ecosystem can be valuable. the meta smart glasses it's a little bit trickier to go and do anything that because you're just like sort of bumping up against the walled gardens right yeah but investor nick doesn't like them for aesthetic reasons he says these google x warby parker glasses are horrific looking compared to these meta ray-bans someone is probably going to lose their job over this i don't know that they look that much worse i don't know ray-bans are a very uh iconic silhouette and they do look good So we'll see.

13:58Brian Chesky:We'll see how the response goes. I think from a product perspective, there's obviously fertile ground on the flip side. The Wayfarer is just such an iconic. It's more iconic than anything Warby Parker has produced. And that's just sort of the reality of brand building over a decade versus a century or something like that. However long Ray-Ban's been around a long time. Right. Anyway, Genie 3. You can now simulate real places by grounding Genie 3 experiences with Street View imagery. Google is sitting on a mother load of real world data. I was always thinking YouTube was going to be so valuable for Omni and VO3, VO4 maybe in the future.

14:43Brian Chesky:I hadn't considered Street View as a trove of data. Demis seems very data pilled. He seems, a lot of the Mag7 CEOs seem very data-pilled. There's that story about Mark Zuckerberg screen recording or logging all the computer use from all the meta employees. These important troves of data are increasing in value, and Street View certainly seems like it's one of them. This is cool. I wonder how interactive this will be, how this actually instantiates into a game. It's a great demo. What does it take to go to Canada on this?

15:16Tae Kim:Yeah, or do they allow people to build games on top of this?

15:18Brian Chesky:Yeah, I just think about, I don't know. I mean, Demis has a background in games, and he was sort of alluding to the fact that he might go back into games at some point or at least be able to, like, scratch that itch again. Famously, he wrote a programmatic code to generate vomit in a roller coaster simulator. Very fun story. But, again, when I think about Roller Coaster Tycoon, which was not, I think, I don't think he was actually working on that game. It was a similar theme park simulator. but we are moving back into the simulator world. But the mechanic is what is so enticing to gamers often.

15:54Brian Chesky:When I think about the games that I've spent a long time with, some of them have incredible graphics, AAA graphics. Some of them have 2D graphics, but the mechanic is great. And so that is what gets me to keep coming back.

16:06Tae Kim:The legend Bobby Chipman in the X-Chats says can't wait for smart glasses to fully replace my monitors.

16:12Brian Chesky:Yeah, maybe you'll need augmented reality or something, Meta Ray-Ban display, certainly going that direction. The Orion. I've been surprised. Wasn't the first episode we ever did we were talking about Orion? And they still haven't shipped it, right? I mean, they shipped a smaller version, the Meta Ray-Ban displays, which have sort of the Call of Duty HUD. It's not full augmented reality. I was expecting, we've demoed the Orion headset. And it has a bit of a narrow field of view, but it really can put a screen right in front of you. And I assumed that everyone was saying, it's really expensive, it's clunky, it's not ready for prime time, but look at how fast things are going.

16:51Brian Chesky:In a year, maybe two, we'll get it. And maybe that's coming at the next MetaConnect. Maybe this summer we'll see it, but haven't been that many rumbles on it. And then obviously the massive pitch shift to AI CapEx might've taken a backseat. I don't know. I'm certainly hopeful. I like AR and VR. I think we're overdue for a new fun product. I'm still waiting for the next Apple Vision Pro. Apple Vision Air, something just lighter. That's all I want. Cheaper, maybe, but lighter and same screen. Screen was great. Anyway. We know, John. Gemini Flash 3.5 looks pretty neat, according to Tenebris, and extremely fast, but still largely the sort of incremental progress we've come to expect from Google, generally a pretty disappointing I.O.

17:38Brian Chesky:Now, what's interesting is that Gemini 3 felt like a new base pre-train, felt like it had some of that big model smell, felt like it was really delightful to talk to. And I think a lot of people were expecting Gemini 4 here. We're still waiting for the next iteration here. And also— Yeah, we're still waiting for Pro. Yeah, Pro isn't out. But people are speculating that 3.5 Pro won't necessarily be a new pre-train. And so it seems like there's a little bit of research being at odds with the product cadence. Like Google I.O. is scheduled probably like two years in advance. And whether or not the training run finishes on time is a little bit harder to package up and nail on a specific time.

18:23Brian Chesky:We see this with the independent labs or the OpenAI, Anthropic, the other labs, XAI. Like they're launching models very much like when they're done and then they will like instantiate like something that looks like a conference around it or maybe a video or a blog post, a model card. But if you're if you're grinding towards a specific date and the specific model isn't quite ready, you come out with something that looks a little bit more incremental. People were really, really honing in on the fact that the the cutoff date was January of 2025. Right. Was that the date? Or was it December of 2025?

19:01Brian Chesky:Either way, yeah, I don't know. I don't know how much cutoff dates matter because all these models can query the web and get updates for information.

19:11Tae Kim:Yeah, overall reactions from developers across the board were not good. Not good at all. Yeah, Prakash here has it. Underwhelming. Cursor ranked it on Cursor Bench. it is below composer two is that is that a fair thing i mean

19:33Brian Chesky:i'd like to see you rank another another live stream on tbpn bench it doesn't match up you know

19:39Tae Kim:it's like no i mean they have they have i guess it is a bench all the other they have all the

19:44Brian Chesky:other frontier and some of them are ahead of cursor's own models on there's just one it's

19:48Tae Kim:just one data point but yeah yeah yeah but here's the other thing it's four times it costs four times it underperforms composer too even though it's roughly four times more expensive interesting

19:59Brian Chesky:interesting uh yeah i feel like for a long time google's positioning was you know frontier or near frontier but best possible pricing and this marks sort of a shift in the strategy perhaps

20:11Tae Kim:yeah overall it's starting to make more and more and more sense why google has put so much capital and resources behind Anthropic. Yeah, Prakash says,

20:23Brian Chesky:seems to indicate that DeepMind is constrained by data rather than compute for what they intend to do, hence the TPU sales. Rest of Google now shipping their org chart. Ben Thompson talked about that a little bit. And there was some context on like, we were asking the question like, will there be AI fatigue from stuffing AI in every product surface area? Ali K. Miller shares one of the loudest applauses in the entire Google keynote. Nishtha put on the gentle monster plus Gemini glasses, tapped the side to summon Gemini, and all in one prompt said, take a photo and put a cartoon blimp in the sky that says Google I.O.

21:03Brian Chesky:2026. And within seconds, the preview of the edited photo from Nanobanana appeared on her watch. I want to spend less time on screens. AI is really coming everywhere. And so much is driven by voice AI as the interaction mode. Very cool demo. impressive technology but Greg's gadget says these companies truly have no idea what regular people want because yeah that is a little bit of a niche use case you need to be more creative with it for when you would actually use that because this is a very it's a perfect demo of the product and the functionality but it lacks that like creative spark of like yes I did want a picture of that on my wrist at that key moment in time like if you're not doing a demo I don't think His point is that regular people would not be excited about that particular feature.

21:49Anyway, you want to move on to something?

21:51Brian Chesky:Where do you want to go?

21:52Tae Kim:What next?

21:54Brian Chesky:IPOs. SpaceX IPO. We're getting more details by the day.

21:59Tae Kim:The other thing that was going pretty viral, the last thing on I.O. was that the Google anti-gravity team flashed a codex folder in their actual demo video. Gurgly says I had to do a double take in the second minute of the launch video for anti-gravity you can see people use codex on the anti-gravity team did no one double check the launch video at the very least not a huge surprise obviously anti-gravity looks a

22:28Brian Chesky:lot of people were saying looks quite quite like codex so clearly more than windsurf I feel like it would be like a way they would have just rebuilt windsurf I don't know we'll have to see no so but anyways this isn't

22:42Tae Kim:a huge surprise, right? Google's been using a bunch of anthropic models. Clearly, they're using a ton of different models and products internally.

22:53Brian Chesky:There was that drama with Steve Yege going back and forth with Demis about what teams are using, what models and stuff. There was a big back and forth, a big dust up on the timeline a month ago about whether or not Google's employees were deploying AI efficiently or broadly. Some of them aren't and some of them are and demis chimed in and said like this is just complete wrong and everyone's using ai i don't know it goes back and forth uh there's also people are benchmarking omni flash which looked amazing when we saw the videos there was a there were a few like little quirks some people in the chat were saying that the firing order of the v8 was not correct maybe it was only a v6 yeah it was missing two cylinders it was missing two cylinders uh but it looked good to me i don't know uh but now people are actually comping it to cdance 2.0 which obviously has much looser content restrictions because I guess just like Hollywood can't file a lawsuit in China.

23:49Brian Chesky:I'm not exactly sure how that works because C-Dance seems to be available in America. It seems like maybe.

23:55Tae Kim:Oh, I think Chinese businesses have been relatively immune to U.S. copyright law for a very, very, very long time.

24:03Brian Chesky:And it also might just take like years to file a lawsuit, do discovery, actually go through and litigate.

24:08Tae Kim:Yeah, you can just go, like there's malls in China where you can go to a Nike store. Yeah. And Nike has nothing to do with it. And yet all the products.

24:18Brian Chesky:They've been selling Swatch APs over there for decades.

24:21Tae Kim:Yeah, just ask Rolex and Patek how they're. Sure, sure.

24:26Brian Chesky:Yeah, I've heard fake cars too. Like you can get a full replica of like a G-Wagon that's just made in a factory. And then you could buy it, bring it over here and you take it to a Mercedes dealership. and they're just like, this is not a Mercedes. But it looks like one, like, you know, to the millimeter from the outside. Internally, it's just, it's just frotting. Anyway, C-Dance 2.0 looks great. OmniFlash looks great as well. These are both like super useful. We'll see how they actually play out and how they get implemented, how they get used. The interesting thing will be like, like at what point, like it still takes a long time to generate videos, very hard to get them right.

25:05Brian Chesky:the last 90 like we're at 99 % fidelity but when you click in you start noticing little details when will we be in a you know paradigm where you ask a question and you actually get an explainer video six minutes ten minutes like you would on YouTube very computationally expensive very difficult to maintain the logic like what is the deep research report of Omni flash these eight second ten second twenty second videos are impressive but not perfectly substitutable for a 20-minute YouTube video because of the time and the level of detail that you can go into. Some people that are looking for information about a V8 engine, they want a breakdown that lasts 20 minutes.

25:44Brian Chesky:And so that's the next benchmark. We've got to move the goalposts. Anyway, SpaceX IPO. The prospectus is incoming according to Zero Hedge as soon as May 20th. That's today. We will see Goldman lead left. This was a surprise. Michael Grimes has worked with Elon for a long time at Morgan Stanley. there was some back and forth he went back to morgan stanley there was a question about whether or not uh there would even be a lead left because there's such a big ipo maybe they all share equally obviously they're all going to make a ton of money off of this so good news from start to finish but it is interesting that goldman was selected do you have a soundboard cue you want to play i'm always ready john okay um katie roof has a scoop uh the scoop athlete of the century has a scoop on the biggest venture returns ever founders fund and valor are set to make more than 60 billion in gains on the spacex ipo sequoia more than 20 billion yeah was this was this

26:42Tae Kim:somewhat of a reaction to uh d1 getting a lot of credit earlier in the week right uh they they're they're set to generate roughly 20 billion in returns. And maybe some of these other funds thought to put their hand up and say.

27:00Brian Chesky:I think that at this scale, like there are so many LPs in these funds that are getting updates. And they've known the numbers for a long time. They've known the ownership, the holdings. And you do some back of the envelope and you get some pretty huge numbers. Will be very interesting. Huge for Sean McGuire, huge for Luke Nosek and a lot of other folks over at Founders Fund and Antonio Gracias at Valor and all the other Founders Fund folks. Yeah, Sequoia Founders Fund. They needed a win. They needed a win. I mean, you go back, like, you know, these investments were made like 2004, 2010. Like, it was not obvious.

27:39Brian Chesky:Certainly, there was no Starlink narrative when these were made. There was no space data center narrative. This was a rocket company that was blowing up rockets left and right and not quite getting to massive business. You really had to be a believer, and they were. Yeah.

27:56Tae Kim:Paki was having some fun on the timeline.

27:58Immad Akhund:He said, megaphons are too big to generate returns. They're basically just the collectors.

28:05Tae Kim:And, of course, they're printing.

28:08Brian Chesky:Yes, they are printing. Well, we have a very special guest joining us today, the CEO, the founder of Figma, Dylan Field, in the waiting room. Let's bring him into the TUP and up here. Dylan, great to see you. Hey, great to see you. Thanks for having me back.

28:24Tae Kim:Too long. Great to see you.

28:26Brian Chesky:First question. Are you alive or are you dead? Very alive. Very alive. Figma is in R2. Yes. It is such a white pillow. Well, why? Well, I mean, how have you processed all this? I guess we can go into the business and the product and the financials, but I'm more interested in just like the mindset, the emotional journey. Like, how do you stay sane? Is it an advantage to have been building this business for so long that you can draw on other experiences? Like, what has the process of going through all of this been like for you? I mean, what's the quote? When in the age of AI, those who stay sane win.

29:06I think that's pretty accurate and you should own that

29:12Brian Chesky:I'm going to attribute that to you we're going to attribute that to you but really I think it's super important you have to have an even mind about it and I know that you guys know this but social media not reality it is not reality we see this all the time all the time

29:32Tae Kim:uh but uh yeah and the the the thing that i've been thinking about this week is how ai generated design is seemingly becoming as easy to clock as the as ai text it's not this it's that this than that yeah uh i feel like people kind of like uh right now i mean the entire market is just going through like rolling stages of ai psychosis and everyone's having it in different ways, right? So like, if you do like equity research, you're obviously going to go through a period of AI psychosis because you can just like type in a few words and get like what, what looks like, you know, uh, days, weeks of, of, you know, really, really great work.

30:19Tae Kim:Uh, and sometimes it is great work. And if you're a designer, web designer, and you can do type in a few words and get what looks like a great website instantly, you're also going to go that period. And you can just see these sort of like pockets of, of AI psychosis all around the industry broadly. Uh, but it does sort of like fade at some point. And then, uh, if you're able to stay sane, you know, through those periods and not let yourself succumb to it, you can get excited about the potential and benefit from it, but not, uh, lose your mind in the process. And I think like we were seeing that with, you know, early on with ChatGPT and like writing right before it was super obvious to clock.

31:03Tae Kim:And then we were seeing that with design specifically where, yeah, when you can just go and just generate stuff, design that looks like good design. I'm not saying it is good design. And I think we're kind of coming out of that now where you can just instantly clock when something was generated. And sometimes for a specific type of asset or use case, it's totally the right move to just generate something quickly. But I think we're already in a period right now where if I go to a startup's website and it's clear that it was just like a one shot, you know, prompt, like that says something about the company.

31:43Tae Kim:Could be good, could be bad. We don't know. Jordy, I think you're absolutely right. But seriously, I mean, it's just the balance. Oh, thank you. I think it's the balance we had to strike with Figma's design agent launch today. And what we tried to do was make it so that we can really help you bring the context from your file into the agent's context window. And with that, two things that maybe are what will be most helpful for the designer in the moment spawn agents to do explorations variations uh do the sort of rote tasks that um are more boring so things like design system maintenance for example how do we make it so that you're able to do that way faster with figma's design agent than you would if you're just manually clicking on all these variable names uh or or manually change a bunch of components uh or text translation or any number of things.

32:49And so it's been really fun to kind of explore how does the design agent work and where can we make it better? Because there's so much more we can do to handle more of these tasks that designers are able to elevate themselves and work at a greater level to actually push aesthetic past AI slop, to actually push past the cliches and get to real innovation, solve real UX problems for users rather than making it so that you just have to go do these boring tasks to just get through and unblock people or unblock your team. And I think that the design agent will really help there and bring more of it into the canvas where then you can share and collaborate with your team or with other agents.

33:36So I'm excited for where it goes. And I think today is really big and kudos to the team because they've been working really hard making it so that we're able to take all the advances with models and LMs and apply them to design. Getting these models to speak design well has been non-trivial and very cool.

33:55Brian Chesky:That's awesome. I feel like a lot of software engineers who are interacting with coding agents are experiencing incredible amounts of bloat in the code. And there's questions about, are you laying really shoddy foundation that will come back to bite you later. And a lot of people say the answer to slop is just more slop. But in the design context, are you feeling pain from Figma users where design systems or are you at least designing the agentic design tool in a way that is aware of that potential pitfall in advance? because there is a world where, you know, oh, the drudgery is taking my website and, you know, doing design iterations for every single possible viewport or device.

34:53Brian Chesky:And if that gets out of sync, that can be very complex. At the same time, if you wind up, you know, instantiating all that and then it doesn't tie together, you could wind up with some sort of, you know, misalignment and it could be very difficult to manage in the long term and you could wind up with bloat. Yeah, I mean, look, I think that it's a different context for sure when you're in a sort of code base and you're using Cod and it's over-claiming and making stuff up or you're using OpenAI's ChatDBT models. 5.5 is amazing, but definitely it over-complexifies things. And these teams will deal with the sort of problems are being identified and they'll fix them and figure them out.

35:38But overall, I think it's a different sort of class of problem than like when you're in a design file and really part of your mode is exploration. If we can help you with that exploration, that can be useful for the user. And in terms of semantics, I mean, the way that you represent a component or, you know, the way you apply auto layout even, these are all examples of things that we've had to get more rigorous around how do we build evals for this to make sure that we're doing things in a way that is both clear and opinionated but also doesn't get in the way of the user. And I think the worthy year for us has been evals and probably for the industry.

36:21And so there's so much on the eval side that we have to always be improving on. And part of the feedback that we'll get from this beta will be towards where have we missed the mark and what do we need to do better? and I think there's lots of room to grow there. I'll also say that I think that when you look at products like Weave, there's so much potential to not have necessarily this pile-on effect but rather to explore more with AI. The outputs of the models are like clay you can mold. It's like how do you take stuff that might be a one-shot slop that's generated but then actually apply it across multiple models in a pipeline in order to actually figure out a way to make it into what you want.

37:08And sometimes the best way to do that is to get on a canvas and use your hands. Sometimes the best way to do that is through a workflow you define. Other times it's by going back and forth with an agent. I think you have to be very smart about what you do when. And it's our responsibility as a tool creator to give you all the options.

37:25Tae Kim:What are you excited about in terms of using AI to help augment the creative process? Because when I think of part of what I think is exciting about this moment is like I don't right now. Right now it's hard. Like a human still has to have like the fundamental kind of idea. right uh and and and you we know that because you have to like type it into a box right uh you need to you need to do the typing still so we we're still uh we're still necessary there um but when i think about like iconic like startup brands i think of uh linear i think of some of what like cursor has done over the last couple years i think of like figma's brand where there's so much work that went into just like coming up with that, coming up with like the concept and the look and feel of the brand.

38:21Tae Kim:And then like way, way, way more work in terms of like instantiating that brand across every possible surface area. And part of what I think is exciting about this moment is like we're potentially entering into a world where you can spend more time just doing that like heavy creative work, coming up with like a concept that can stand out. And then once you create a system, then you can like much more rapidly scale it across again, all these different surface areas, whether it's like digital products, web, you know, email ads, et cetera. How are you thinking about like augmenting and giving creative superpowers on that, on that like brand building process when you're kind of coming up with, coming up with like the idea?

39:05Yeah, I think there's so much we can explore and do there. And using design systems effectively is hard. We certainly have not perfectly nailed that. I think we've done much more on the maintenance side, and we have a lot more coming on the execution side of how do you put the design system you've created together so you can fully productionize that. And it's one of the things that we are looking at from so many angles, and it is critical context to be able to figure out across code, across design, how do you use this effectively. but brand I think is where on the weave side we see even more exploration with these workflows and people being able to define workflows that are more canonical and then branch out from them and I think we'll see the same with Assistant and with the famous design agent as well and I also think that this idea bank content bank can be established and added to over time and by more people and what we're seeing with the last quarter results that we announced is that more people are starting to use Pigma in the organization.

40:12Thank you.

40:14Brian Chesky:They're fantastic results. Thank you. But the breadth, I think, of the usage expanding is a huge part of that. And the more that you can get it to the point where people can come in with their ideas, contribute to the conversation on a canvas, collaborate with others to refine, doesn't mean that these non-designers who don't know all the conversations that are being had about the UX or the brand are going to be the ones that are bringing the idea that's the idea they're going to ship to the table right away. But I do think that bringing more voices into that conversation, more viewpoints only helps.

40:53Brian Chesky:How do you think about the concept of Gelman amnesia in the context of staying sane in the age of AI? Because there's probably non-designers who use a Gen.A.I. tool and are like, oh, wow, designers are cooked. And then there's real designers who use a Gen.A.I. tool and say, oh, yes, it's maybe 99 % of the way there, but the battle is to get to 99.999, maybe 100 % of what you can do. And it feels like in staying sane.

41:24Tae Kim:All outputs, right? If you ask AI to generate you something around a topic you know really, really well, it's a different feeling than a topic that you're just learning about. Yeah. Yeah. I mean, I think that basically folks are in a place where they learn by comparative cases. and the more that they see great examples next to sort of output that's not as good and they can learn why, that's ultimately where you see folks then push further. And, you know, they can then take it on to do more in area and evolve their skills and their judgment, their sort of taste or not. But I do think it's really important to have those conversational loops going and also get your arms around as a design leader.

42:12what is happening in your organization? Because what we're seeing is more people prototype things and then there's this latent fear of, oh no, what are we going to ship? And is it the thing that is sort of like a random exploration that someone thought was real? Or is it something that has gone through our cycle and is ready to go and is very well thought out? And in general, the other thing that I'd mention is it feels like there's a lot of tunnel vision right now. I think that there's certain models that kind of went, oh, let's learn from 4.0 and are sort of sycophantic. And doing that especially for engineers and get very latched onto an idea and then it's kind of like the AI psychosis sets in and you're like, this is the best idea ever and you're fully tunnel vision towards creating it.

43:08And you can show massive progress, but are you going the right direction? And I think it's really important to steer and to actually be building what you need to build and to think, not just wear a thinking cap. So that is something that I think is critical right now.

43:24Brian Chesky:Yeah, I completely agree. Yeah, there's been a bunch of great takes about that. Help me, if I meet someone and they have the next great app idea, and help me pitch them starting with Figma as the front door to the experience. If they're a non-designer, but they're also non-technical and they're hearing about Codex and Cloud Code and those like CodeGen tools versus starting with a design, starting and having the design be the place where the idea person sort of instantiates their app or their product. and then yes, there are agents and they might use different tools for spinning out back ends and doing other things.

44:09Brian Chesky:Why should Figma be the front door to building? Yeah, I think that as you're exploring an idea, part of it is thinking it through and actually understanding what is it that I want to build. And you should not just start in Figma, you should go talk to users. You should go think about like, what is it that I'm trying to build? what are my goals and the problems I'm trying to solve? So that might look like starting a sketchbook or a doc or in live conversation. I think there's a lot of people that have not asked that question to the LLMs and jumped straight to, wow, I spent seven nights staying up all night.

44:46Brian Chesky:I'm cutting this thing. It's addictive. It's fun. It's addictive. It's a box effect of like, will I get right this time or not? Variable reward. Yeah, variable reward. It's a nice beginner's box. Then I think going from there to being intentional about, okay, I know what problems I'm trying to solve. Let me think through the solution. Figma provides an excellent spot to do that with in conjunction with brainstorming tools like FigJam or document editing, spec editing. From there, I think when you've got your direction, you know what you want to build, it's a great time to use our MCP. Go bring it into code or go bring it into Make.

45:25You'll see a ton of evolution on surface ahead we've already had a lot that we've improved and you'll see even more in the weeks and months coming. And then I think that's a great spot where you can go back and forth because sometimes as you build it out you realize that actually there's more to explore and define on the design side. So use the best tool for the job but I think don't be tunnel vision about there's one direction and that's the only thing that can work that's where you'll fall into traps.

45:57Brian Chesky:Yeah. Last question for me, huge revenue growth, massive success on the financial side. I'm interested in going a click deeper and trying to understand what is working the most because it seems like there's great retention among big clients and customers that are using Figma at scale across a huge organization. there's also new uh entrepreneurs that are a team of one and they might be using figma there's uh yeah almost like consumer use cases the heaviest users of of coding agents are

46:33Tae Kim:heavily using figma yeah because they're making more software and they need to add stuff to it

46:38Brian Chesky:i mean i look at some of the stuff we've vibe coded and i'm like okay like it's time to level up and have figma in the flow if it's not already uh even because you don't want some even like the dashboards like these things need to be designed at some point they need as they grow and scale the the first like most basic thing it could just be a cli but as soon as we start building uis and multiple users like it gets more complicated uh but but what is driving the growth is it both is one more of an opportunity for you over the next few years like what are you most excited about i mean i think we're seeing growth kind of across the board right now and we're very thankful for that.

47:15But our eyes are always in the future. And, you know, the same things that I've said when I've been here in the past, and I think have become their own memes around design being the differentiator and design as the layer above code, as code commoditizes more and more. Design is, I think, increasingly the battleground. This is where everyone is going to really duke it out to figure out what the direction is that they should explore and what they should go build. And we need to build for that world, a world where design representations, code representations can live together and a world where, you know, you don't have to make these false trade-offs between direct manipulation and AI or, you know, being able to explore broadly or make fast progress.

48:05Like both is the answer. And so that's what we're really building for right now.

48:09Brian Chesky:Exciting. Well, thank you so much for taking the time to come on the show. Have a great rest of your week. Great to see you. Good to see you all. Thanks for having me again. Goodbye. See ya. Up next, we have Farras from Socket back on the show to discuss a Series C by none other than Thrive Capital. We'll bring in Farras from Socket from the waiting room to the TBP and Ultra Dome. Get that gone, ready. Welcome to the show. How are you doing? What's up? Good to see you guys. How's it going, guys? Thanks for having me back on. I think last time you were on, we'll see you soon. And here you are. Give us the news first.

48:42What happened? Yeah, so Socket announced its$60 million Series C at a billion dollar valuation. Did it again. Did it again. Yeah, led by Thrive Capital.

48:53Tae Kim:Congratulations. And it's a big day for us. Absolutely massive. Is what you do important right now? Yeah, you know, you couldn't have really asked for a better, you know, perfect storm. You have just the confluence of AI, cybersecurity, and all the different attacks we've been seeing. And we kind of built the perfect product for this moment. And it's been something that we've been building towards for, you know, it seems like it's okay. You know, we just, we had the right thing right now. But the reality is, you know, we've been building towards this for, you know, four years plus. And so, you know, it's an overnight success that took four years, right?

49:28Overnight success. There we go.

49:29Brian Chesky:I love it. Yeah. What was the key unlock for the new round? And growth needed the capital for specific expansion, just the broad tailwinds of the industry, people looking forward to more demand. What's changed in the business? So the business is just inflecting. Every year I feel like, okay, this is great. Certainly we're going to get a regression to the mean or something. But it just keeps accelerating. So over the last while, we've had 500 % plus ARR growth over the last 12-month period. And it's just, it keeps going. So I think it's kind of, we're seeing kind of three forces converging all at once here.

50:13We have this kind of like perfect storm between AI generating more code than ever before. You've got developers and increasingly non-developers too, that are pulling in open source dependencies and third-party code at like an unprecedented velocity. And you have more code being written than ever before, both by humans and AI agents. And the kind of maybe counterintuitive thing is it actually brings in a lot of third-party code. And that code is really vetted less than it's ever been before. And that's kind of like the first thing. The other thing is you got the frontier AI models like Mythos that are finding thousands of high severity vulnerabilities across every major operating system and open source library.

50:55And so the total volume of vulnerabilities in code is exploding right now. And it's going to keep going as we start to throw these models against this backlog of code that's been out there for a long time and has a lot of vulnerabilities. And then kind of the third piece is that the attackers have really started kind of realizing that they can exploit the software supply chain to get into companies. So they're not really like coming in through, you know, finding vulnerabilities, but they're actually kind of realizing if we go into an open source component, that's actually an easy way to get into an organization.

51:28And not just one, but usually thousands of organizations that all use that same component. So it's this like perfect storm of all these factors right now.

51:35Brian Chesky:So walk me through how your business model interacts with the open source community. Because when we see things like Mythos finding a bunch of bugs in open source repos, you know, we hope that everyone will just submit bug reports early for the good of the world. But I'm interested in like the economics of patching open source if there's a really important package out there that maybe doesn't have a Linux foundation behind it. Like how at some point, like at the very least, there's inference costs. Who's paying to patch all of the open source software that so many different companies rely on? If you go to a big company, they pay you.

52:18Brian Chesky:They might patch like their dependencies. But how does this all flow together into an actually safer Internet? Yeah, well, I've been in open source for, I think, over 15 years now, and I maintain a bunch of open source packages and have a real soft spot for the open source community. And so let me tell you, they were suffering under an enormous burden even before the current AI trends have kind of made it even worse. They don't get much support, whether financial or just in terms of the number of people working on this really critical infrastructure is super low for how critical it is. And so we started seeing a lot of AI tools being used to create these slop PRs, slop issues, and that was already kind of causing a burden.

53:07And then now you have the various frontier labs that are finding with their models, they're finding a lot of vulnerabilities that were always there, but the community didn't know about. And I will say they're doing a good job of providing a patch along with the bug that they've identified. So they're doing a lot of the work for the maintainer, but it's still, it still takes effort to review the PR. And the thing that people don't realize is when you, when you accept a pull request as a maintainer, you're not just kind of, it's not this one-time cost. You're actually accepting the burden kind of indefinitely into the future to maintain that code and make sure that that code is, is secure.

53:44And, you know, it's kept up to date with all the other changes. And so I think what we're going to see, and we're already starting to see is despite the kind of best efforts of the frontier labs and they are making good effort. maintainers are going to fail to actually accept these patches. And so we're going to see a lot of libraries that may have a vulnerability in them that literally have effectively code sitting on GitHub that anyone can look at and use to generate an exploit against that vulnerability. And there's not going to be an easy path for companies and for developer teams to go and actually patch their libraries because there's no version they can upgrade to because the maintainer is just sort of sitting there on that patch and hasn't accepted it.

54:25So it's creating this real risk where, you know, like there's more volumes than ever before and there's not really like easy paths. And so this is actually something we try to solve. So we built a solution to this called Certified Patches. And what this is is basically kind of a deterministic way to in kind of one click make your vulnerabilities and your open source code go away. So we use a whole bunch of AI and kind of produce these patches that make the vuln go away without any work on the part of the developer. There's no kind of burden of upgrading packages. You just sort of, in a click, the vuln is gone from your dependencies and you can kind of keep the rest of your code in your application the same.

55:07And so it's really kind of a quick fix to the problem that we hope is going to be part of the solution. And by the way, we're giving away all the critical patches to the community for free. So we can try to disseminate this widely to as many people as possible.

55:21Tae Kim:Are you finding any companies that are completely asleep at the wheel? Or is everyone giving this an essay?

55:28Brian Chesky:Who should I have today?

55:30Tae Kim:No, I imagine part of why the business is growing so quickly is this is like a hair on fire problem, concern. Every single day, right, you're seeing these vulnerabilities or issues pop up. And so I would have to imagine that every software company online where the technical leadership there uses the internet, which I would imagine is all software companies are pretty leaning into this problem. But do you ever, I'm curious, even from an outbound sales marketing standpoint, are there people that are like, oh, this is not that important for us right now? Or would a no be like, we have a solution, it's with someone else.

56:12we okay so we've met one company um that has literally no software they they produce toilet

56:19Brian Chesky:paper and they didn't have a business no yeah so i i think um yeah i think that it's it's become a universal problem when we started it was kind of this like maybe more niche problem where people said okay you know i got a lot of other problems that are more important than this um and we initially had a really good uptake of the product in the cryptocurrency community because they have a lot of software supply chain risk. And when these hacks happen, it's kind of an irreversible thing for them where they lose all their funds. And then I would say kind of the AI labs were the next to pick it up and sort of SF tech companies realized that the kind of people that are ahead of the curve.

57:02And now it's become, I mean, it's like a top, I'd say top one or top two concern at nearly every company we talk to. It's a board-level concern a lot of the times now, and CISOs and heads of engineering are being asked to figure out what is our solution to make sure the next time one of these things happens, we're protected. And the next time is probably going to be tomorrow. It's become so... Yeah, every day. Yeah, literally. Our end of quarter was the end of last month. We already were super busy, And then there were three major software supply chain attacks that happened that same day. It's wild.

57:41It's like more than we've ever seen, and it's totally unprecedented.

57:44Brian Chesky:Was the GitHub issue that I saw a supply chain attack, or was that something else? I saw like a couple posts, but I didn't get to dig into it. So I don't think they've released that information yet. Yeah, there's definitely been some speculation. I mean, the timing right now, every time a company gets popped or their source code leaks, it's the first question that people think of now. And the group, I believe, that claimed responsibility is this Team PCP group that has been responsible for a lot of the attacks. And so I wouldn't be surprised if that's what we learned, but I don't think that's something that we know right now, and I wouldn't want to speculate.

58:18Brian Chesky:Yeah, I wonder if there will be movements to find the compute infrastructure for Team PCP at some point, or the hackers. Because at a certain point, you would imagine that they're ready. Well, they don't.

58:29Tae Kim:I mean, a lot of this is still social engineering, right? So they don't necessarily need a country of geniuses data center.

58:37Brian Chesky:We've got a couple of dudes with phones. Who knows? Well, congratulations on the progress. Thank you so much for coming on the show.

58:44Tae Kim:Thanks for keeping us all safe.

58:46Brian Chesky:We'll talk to you soon.

58:47Tae Kim:Thanks, guys. Have a good one.

58:49Brian Chesky:Goodbye. Up next, we have Tay Kim from Key Context, the hottest substack on the Internet. We have Tay Kim in the waiting room. Let's bring him in to the TV again. I'm Tay. How are you doing? here we go kicking it off strong oh good good fit that you know what we need to do we need to figure out how to uh do a uh like real time real time recognition of the face face tracking and then land the glasses on the correct on the correct space next appearance for next yes uh Maybe before we get into AI and different companies, I'd love to just know how a key context is going, what it's been like since we last checked in.

59:37Brian Chesky:How is life? It's much better. It's going great. I think the last time we talked was March 30th, and the market was right at the bottom. Yeah, that's right. Everything was going terrible. Yeah. You never worried, though. I did not. It's a truster. Tripled, quadrupled down on here. And that's CPU shortage. Yeah, you did. Buy memory stock. Yeah. All those ideas are up 50 % to 150%. Oh, that's pretty good. I said, I think 13 out of our 14 ideas are solidly in the green. I joke that like Shohei Otani numbers with like three, four brands. It's not going to last, but it worked out. I mean, we trusted in the actual underline.

1:00:21Shohei would love memory stocks. Yeah. Right. I think he would. I'm sure his financial advisor is long HBM stocks, I'm sure.

1:00:30Brian Chesky:Yeah, I read some report that in South Korea, there's folks who are liquidating insurance plans to go long SK Hynix. It's a huge, huge moment over there in South Korea. And everyone's making fun of these Koreans for being long memory stocks. But I mean, we're talking single digit P multiples, probably going to lots, two to three more years, triple digit growth. I mean, I quoted this Michael Dell thing where he spoke to a Wall Street conference. He says 25-25. That's the thing you need to know about memory stocks. AI accelerators are going to have 25 times more, like AI GPUs from NVIDIA. Two years from now are going to have 25 times more memory per GPU.

1:01:11And there's going to be a need for 25 times more GPUs. So he said multiply 25 by 25, you get 625 more revenue, etc. and layer on to the fact that four years ago, all these memory companies saw their revenue get cut in half. So they didn't expand capacity. It takes three to four years to expand capacity. So we're going to see mega pricing power. We haven't seen anything yet. These stocks are going to keep going higher and their revenue rates are going to be astronomical. So everyone makes fun of these Koreans for piling into single-digit PE stocks, growing at triple digits and this cycle is different because there are only three companies that can make make the hbm memory yeah don't make fun of the koreans they're right don't uh is the

1:02:03Brian Chesky:the the pullback that you pushed to uh that you mentioned like the when they were beaten up was that the post uh crypto slump when uh semiconductor equipment and and gpus were being used to mine crypto and then there was a pullback there is that what you're referring to like what is the prehistory why were these stocks beaten up so in 2022 like we had a kind of a tech recession like everyone's all these tech companies were laying off people even in ellen nvidia had these 50 drawdowns yeah uh the whole you know everything was it's almost like the the post uh covid uh kind of overhang yeah where people bought too many digital computers electronics yeah and uh there was too much overcompensation.

1:02:43Brian Chesky:And so what was NVIDIA doing during that 50 % drawdown? Were they buying the stock back? Not really. They buy a little bit of stock back, but not really. And back then, this is a different NVIDIA where data center is 10 % of the revenue and gaming is 80-90%. Now it's split. Where data center is nearly everything. What happened with NVIDIA back then is everyone's mined their GPUs to mine Ethereum. And then Ethereum did the whole proof-of-stake proof-of-work thing. So demand for GPUs collapsed. NVIDIA had like a terrible quarter where they missed by like$2 billion, which was a big number back then.

1:03:24That's a rounding error. Back then it was 20 % of the revenue and the stock got hit hard.

1:03:29Brian Chesky:Yeah. So what are you looking forward to from NVIDIA this quarter, this year? What are you watching? So we had like two unbelievable quarters the last two quarters. And I expect another great, amazing quarter. I mean, Jensen is out there saying GPU consumption is through the roof. On Monday, he said AI demand is far exceeding supply and capacity. So I think the numbers are going to be great. And this is without even China. So, I mean, the absolute scale of these numbers are mind-blowing. We're talking like 80 % growth on an$80 billion number, 79 or 80 billion. Just think about it in three months, right?

1:04:06So the absolute scale and the stock is like almost as cheap as it's ever been. Like it's trading at 19 times forward below the S &P 500, which is growing at like 10%. NVIDIA is growing at 80%. So this dichotomy where NVIDIA is becoming more and more undervalued. And we could talk about why.

1:04:26Brian Chesky:Yeah, I'd love to know. Is that just because they're the largest company,$5 trillion? It's hard to wrap your mind around a$10 trillion company. So every year we go through this cycle, the last three years during this whole upswing up, everyone says peak is here, right? NVIDIA can't grow anymore. And NVIDIA keeps growing at some ridiculous growth rate. So the skepticism, the only reason why it's trading at below market multiple is that the AI skeptics believe that the peak year is near, right? There's going to be a no growth.

1:04:56Tae Kim:Is it AI skeptics or is it TPU and Tranium enjoyers? That too. They believe competition is coming and they're going to gain market share. I kind of laugh at that. And the numbers that people put out there for the competition, it's like a rounding error. It's like a small, low single-digit number compared to what NVIDIA is going to grow the next few years. And what people keep forgetting is, if you actually look at the numbers, I mean, NVIDIA has a trillion dollars in order. right? They're the ones that have locked down all the memory. Like I met someone, a guy at GTC. He's the optical startup and NVIDIA locked up all the capacity for lasers and optical, right?

1:05:39So NVIDIA has the supply components with memory, wafers, optical. So they're pretty much the only game in town if you want to actually buy AI GPU capacity. Like TPU gets headlines, but I mean, $5 billion is nothing when you're comparing it to$1 trillion. So they have the volume. They have the great power per watt numbers and metrics that basically, if you're doing inference, NVIDIA GPUs, even if they cost a lot more up front, when you actually do the inference, performance per watt is excellent when these are a RUBEN or$5 billion. going.

1:06:18Brian Chesky:Yeah. How did you grapple with the question of whether or not NVIDIA is a car? There are competitors. You said low single digit percentage of the market, but AMD is getting its act together. Intel's maybe back in the game in a few years. You have Tranium and TPU. Competition is rarely a good thing. Is NVIDIA a car or not? Okay. Obviously it's not a car.

1:06:45Tae Kim:I would have loved to be in the room with you while you saw that segment. You're just like taking your computer, smashing it. I think I was tweeting about it. I think I wrote a piece on it. I wrote like, you know, four or five hundred words about that podcast. I don't know if we want to go into that podcast. But, you know, they're going to be 80, 90 % of the market. Maybe they'll lose 10 % of the market share in two, three years. But 80, 90 % of a market that is growing, 50, 70 % a year. The hyperscale or CapEx numbers went up huge. There's like$780 billion going to a trillion dollars next year.

1:07:22The market believes with NVIDIA's valuation that NVIDIA's going to stop growing within the next year or two. But the overall market, I think, could keep growing at 50 % at least. If it grows 50 % in the next two or three years, NVIDIA's going to grow. Even if they maintain market, and I don't believe that's true, I think they're actually going to maintain or even increase market share. But even if market share goes down 10%, I mean, the numbers are just insane. And I don't think Nvidia's going to trade at like 10, 12 times earnings when they're growing at 50%. I mean, that doesn't make sense to me.

1:07:53So I think it's going to be very higher. And then the key thing here is the stock, stock buybacks. Because that's like, if you guys remember during the whole iPhone, like when the iPhone 5 and 6 came out, when they actually had the large screen iPhone, Apple was trading at PES7. Like Xcash. People thought Android was almost like the same thing. Like Androids come in and destroy the iPhone market share when iPhone went on this generational run with the large screen iPhones, right? But a big thing that Apple did was they started buying back stock and that's when their multiples started going from single digits to 15 to 20 to 30 times.

1:08:30And they already kind of hinted at it, But I think NVIDIA is going to start buying stock buyback in size. They said 50 % of their free cash flow in the next 12 months. They're a little bit cryptic on if that was after or before prepaid, the prepayments they have for the inventory and suppliers. But I think we're going to get some more clarity tonight. And if they actually put numbers, maybe it's this quarter or next quarter, if they actually put the actual, we're going to buy X hundreds of billions of stock in the next 12 months, I think the PE is going to re-rate much higher. So as soon as we get visibility that next year is going to keep growing at 40, 50 percent or higher, I think it's going to be higher.

1:09:11And the year after that, stock should go on top of the re-rating from the capital returns.

1:09:17Tae Kim:Gavin Baker was on our friend Patrick's show this morning. he was making the point that it's possible that TSMC could prevent a bubble just given that they are not investing in CapEx as aggressively as, let's say, Jensen might want them to. He basically said what you're saying, which is NVIDIA could sell a trillion dollars of GPUs pretty much immediately if they had the supply. What's your read on that? do you think that TSMC is? I think, well, so I think I've been, I mean, I've been following Chip the industry for, you know, 30, 40 years. So, yeah, I'm very good at reading. I'm very good at reading the tea leaves and I've noticed that Jensen and what TSMC, what the CEOs have been kind of hinting at, that their tone has changed in the last two, three months.

1:10:11So TSMC just reported their Q1 earnings. And, you know, if you read the transcript, it's pretty obvious that they're just going to raise capex on a different order of magnitude uh for the next year and the year after they said their capex is going to be much higher over the next three years than it was the last three years and basically and all the stuff they're saying you know they're saying and jensen's been going out there during these speeches and q a's he's confidently saying the supply issues in two three years are going to be on a different level like even with memory he's saying all these component issues that we have now in two, three years, I think he even said that on the Dworkesh podcast interview.

1:10:53Two, three years, this all will be less of an issue. So I'm confident that TSMC, memory might be a little problematic, but TSMC wafer-wise, it's going to be dramatically higher over the next two, three years.

1:11:05Brian Chesky:But even if they raise capbacks, it feels like there might be a speed bump, essentially, because if they triple capacity and that takes two years, but everyone's sort of pricing in or expecting 10x a year or half an oom a year. There's a mismatch there. What I'm saying is right now, the NVIDIA valuation is trading like it's growing at 10%. It's going to grow at 10 % the next year or two. They grow at 50 % the next two years. I mean, that's definitely, you know, like TSFC is going to raise our capex. So it's like the numbers are way off. Yeah, yeah. I'm more just thinking from a broader market perspective.

1:11:49The 10X is not going to happen. But, you know, 50 to 75 % the next three years, I think that can happen. And stocks will go much higher if that happens.

1:11:59Brian Chesky:Yeah, yeah, that makes sense. That 10X is, you know, it's not software. I mean, you have to actually move physical at levels. Yeah, that makes sense. How do you think NVIDIA will be positioning China exposure, China opportunity? That was an interesting point of debate on the door cache episode. Yeah, I mean, I've given up on China. I mean, at GTC, Jensen said he got approvals on both sides, and then weeks later that fell through again. Forget China. It probably isn't going to happen. There was also another report that gaming GPUs were incrementally banned in China. I just think you can't rely, temper your expectations.

1:12:42I don't think China's going to happen.

1:12:43Brian Chesky:Not relevant to the business case or the valuation, but potentially important to the geopolitical story? I think it's just going to be the status quo where NVIDIA is not going to be able to sell to China. And anything that happens is incremental upside, but it's not going to be a huge number anymore. Even the stuff that is allowed is a limited number. The way the U.S. has approved the licenses, China is the one that's saying, no, we're not going to let you sell right now. Like it's been going back and forth between China and the US, you know, who bans what and whatever. But even the incremental numbers, even if China starts approving, it's not a huge number the way it was in the past.

1:13:23So I would temper expectations on China. It's just it's been so back and forth and unreliable the last couple of years.

1:13:31Tae Kim:What was your reaction to Google I.O.? I'm actually pretty negative on Google right now. and they're basically non-existent in the whole coding agent stuff which is the one that's growing exponentially right now in terms of coding agents and everyone's paying tens of billions of dollars to Anthropic and now Codex for OpenAI, they're adding a million users every few weeks. Google anti-gravity is nowhere to be found. No one's talking about it on Twitter. Anyone that talks about it says they don't like it. So the hardest thing, which is coding agents that's going to automate things and do actual work for an enterprise is the biggest market that's taking off like a rocket.

1:14:18Google isn't there. So, I mean, Google Cloud is doing great. Yeah. Poking growth, et cetera.

1:14:24Tae Kim:Did seeing yesterday, did it start to make more sense to you why Google had been committing so many resources to Anthropic? Like, do you feel like that's... Yeah, so I think they see Anthropics. At the time, everyone was like, wow, I wonder how Demis feels about this. Of course, Demis is an angel in Anthropics and obviously thinks they're a great company and they have a good relationship. But at the time, it was like, wow, they have this new model incoming. They have this massive compute advantage. They have this massive distribution advantage. They have this massive data advantage. Like they have every single advantage.

1:15:06Tae Kim:They have this huge head start. Invented the transformer. And they can just vend it in everywhere on all these platforms from Google Workspace, which is like a massively underrated distribution point to the Google Docs and Sheets and basically everywhere. Like every single possible advantage and an incredibly talented team and exponential demand for tokens. and it was still somewhat surprising to see them invest that much in a competitive lab. And they're benefiting with Google Cloud and getting that business. But I think long-term strategically, I think Google has to be very careful and I think Microsoft's experienced this with OpenAI.

1:15:53It's once the value accrues to Anthropik and OpenAI, they're going to be the power players four or five years from now and be able to push people around. I mean, we saw that when Yahoo literally used Google as their search engine, right? Google was nobody. And Yahoo put it on their homepage and powered their search engine. And then Google became the power player in a few years. Same thing with Netscape and Yahoo. I mean, this is like history repeating itself. Netscape was, everyone used Netscape. I don't know if you guys were around then. But Netscape was the browser, right? And the reason Yahoo became powerful is because you clicked on that little thing on the right.

1:16:31on the homepage and it drove people to Yahoo, the portal. Then Google took off because they started using the Google search engine inside yahoo.com. So I think all these companies have to be careful. If you help OpenAI and Anthropic become super powerful and they have the best models, this thing is all a flywheel, right? The more people that use it, the more people that use Cloud Code, you know Anthropics can get smarter and make the better version of cloud code same thing with chat GTD and if you let Gemini kind of like lose the market right now

1:17:07Brian Chesky:like and Anthropics gets all the business and all the revenue like Google starts losing power in the whole tech ecosystem yeah it's almost like the whole industry

1:17:17Tae Kim:is on a merry-go-round but there you know it's like the Spiderman meme with like you know guns everyone's kind of just like going around yeah very what are your expectations

1:17:28Brian Chesky:for the SpaceX IPO. What does that do to the market? They sort of jump straight into the Mag-7 in terms of valuation. Are they going to suck up liquidity? First of all, it's really tough to tell without the S1. We'll see the person, you know, all we have is like these spot leaks and Starlink and now with the, you know, selling the AI compute across this to Anthropik. I mean, the valuation is extremely, extremely high. even uh the d1 capital guy who who's up you know yeah he he was interviewed on on oceanics show and you could tell if you just read his body language he's like wow this is a really high multiple i mean go back and listen to it even he even though he's going to benefit from it like he's like wow this is really high yeah so i mean a lot of a lot of spacex investors were happy with you know, investing at$60 billion, but it was doing$10 billion in revenue and had great margins.

1:18:30Brian Chesky:And it's a completely different business, both on the valuation side. And kudos to them. They saw stuff that, no, I mean, like, you know, the launch costs going down and Starlink coming out of nowhere and adding billions of, you know, unbelievable telecom business, total industrial market. It's great. But like 1.5, 1.75 trillion off the Starlink revenue number. Elon's earned the, what was this, from Gavin Baker, he was saying like, Elon has just always delivered for shareholders and that means that he can marshal unlimited capital at all times. I'm just hesitant like, you know, at those extreme valuations, that's less upside for a retail investor.

1:19:11Brian Chesky:Yeah, hard to imagine the Tesla scenario. Yeah, the passive indexes, if they go in at that price, that valuation, on the next downturn, it's just I just wish Anthropic went out first because the numbers are dramatically real I mean OpenAI probably is accelerating out of codex too and that will help things a lot better than than SpaceX oh sure sure sure

1:19:40Tae Kim:it's an interesting thing right now looking at the valuations of the Mag 7 and then you add SpaceX in there and then you add Anthropic and OpenAI and SpaceX will look potentially make Anthropic and OpenAI look cheap on just like a revenue multiple basis, but then it still looks very expensive versus, let's say, like a Meta, right? Sitting at one and a half trillion with one of the best businesses of all time. I did want to ask you about Meta, your kind of updated mental model. They obviously had a big, painful round of layoffs today to be able to afford their inference bill. I'm joking there, but it does seem like they're effectively, whatever they're saving on comp, they're just sort of reinvesting into AI, both CapEx, but also their inference bills.

1:20:37I think you asked me the same question six, seven weeks ago, and they reported an unbelievable quarter. I mean, they're growing at 33%, like crazy amounts of profits. It's like there's market skepticism that they could do well in AI models, but there's also the plan B. You could say the same thing about what happened with Elon and XAI. There's so much demand in this megatrend hypercycle that even if they falter a bit, they could sell compute capacity to the highest bidder that's out there. So I wouldn't count meta out. I actually think, like I said, their core advertising business is more durable than the Google search engine right now, which if you go, it's filled with ads everywhere.

1:21:26It's not a great experience. And a lot of that traffic is going to shift over to AI chatbots. So if you actually look at the numbers, Meta, their core business, is very durable, has competitive advantage. It's still growing like a weed. I just wouldn't count them out

1:21:46Tae Kim:yeah basically as soon as they either have an AI breakthrough or they pull back on AI the stock has to re-rate yes that's the same thing happened with the metaverse they start cutting back spending you re-rate higher because all those losses don't hit the income statement

1:22:10Brian Chesky:they look tiny now

1:22:11Tae Kim:Yeah, it'd be so wild to think about what Meta's stock would be doing right now if the Metaverse debacle had never happened. Because the Metaverse was like this high conviction bet on a category that was just way too early. And yet AI doesn't feel... I think you're right. And yet they feel like late on AI. I think Mark felt late or at least clearly felt behind enough to sort of 10x the seriousness. So I think investors thought, yeah, I think they're a little more skeptical because of what happened with the metaverse where they spent tens of billions of dollars.

1:22:47Brian Chesky:Yeah. That's pretty much gone. Yeah. Yeah. Becoming a neocloud is a weird outcome for a hyperscaler that could totally have a cloud platform but has not historically. And you would imagine that there's a whole bunch of hard-won lessons that Azure, GCP, AWS went through, organizational decisions, structures, just key people in place. It feels hard to spin up immediately. At the same time, there's neoclouds that are scaling revenue extremely quickly every day. So I agree with you that it is a possibility, but a whole set of new challenges if that's the direction it goes. That's the worst case scenario, right?

1:23:26Yeah. They want to use the AI compute capacity to make their internal businesses better with all the ad personalization and monetization and create this stuff. And actually, I've been playing around with OpenClaw for the first time a few weeks ago. And I've been using WhatsApp. And that's the future. Everyone's going to have a digital assistant. It's so amazing. I ask it to give me the top 20 stories. It's powered by the latest version of Codex. it goes out there searches every day for me and emails me the top 20 stories i should read and it's really smart um you guys should try it's actually amazing and and the thing i'm thinking is like why can't meta do this i mean they have this meta ai that's not powerful but you know having this little channel for my little taybot i call it t-bot um and and all you do is whatsapp it and say do this do this find this for me everyone's gonna have this yeah the basic thing yeah and i'm

1:24:23Brian Chesky:I mean, the big headline token number from Google was that a 7x token production across all of their services. That actually seemed a little low to me, given how broad the surfaces are and how crazy the models have gotten in the last year. But I would expect to start seeing that out of meta because now when you go to Instagram and you search, it gives you a little AI overview. And obviously they have the meta AI app. And I would imagine that there's more AI hydration happening across the ecosystem. And this digital assistant thing is going to be open-claw. I was skeptical until I tried it. I'm like, oh my gosh.

1:24:58So Meta should be all over this because it's on there.

1:25:00Brian Chesky:And probably with the Ray-Bans, they'll do it. Well, thank you so much for coming on the show. Always great hanging out.

1:25:05Tae Kim:Great to see you. Tay, what do you do for NVIDIA earnings? Do you just turn off all the lights in the room and just sit there?

1:25:15Brian Chesky:Case of beer, nachos, big screen TV.

1:25:18Tae Kim:Is it not a Super Bowl? Is it more like a Super Bowl? or like a job? No, I wish we should bring back those bar crawls. They did it once, and then it stopped. We should bring that back. Too much of a top signal. This is going to be the number one most valuable company for a long time. Sorry, Alphabet. It's not going to happen. So we should bring those bar earnings parties back. That sounds great.

1:25:42Brian Chesky:Well, we will talk to you soon. Have a great day. Great to see you. All right. Thanks, guys. Good to be again. Before we bring in our next guest, I want to actually pull up this Wall Street Journal article See how SpaceX is about to eclipse every other Blockbuster IPO. Scroll down on this because they have a beautiful visualization of IPOs over time. You can see the first graph. These are IPOs over the last seven years, ranging from$0 billion raised, probably$10 million,$100 million, all the way up to$2 billion. Continue to scroll down, and you'll see what happens as the Blockbuster IPO starts stacking up.

1:26:19Brian Chesky:You get Airbnb, who we're talking to the founder of just in a few minutes, Arm, Cerebris, Uber and Porsche. And then as you keep going, Saudi Ramco comes in at$25 billion if you keep scrolling down. And then eventually SpaceX comes in to dwarf them all at$80 billion to make everything else look like a flat line on the chart. Absolutely blockbuster IPO and should make for a ton of great takes and analysis. and it'll be a fun, fun day on the timeline when SpaceX goes public soon. We're getting the S1 any day now. Well, our next guest, Ahmad from Mercury, is here with a big funding announcement. So we'll bring him in from the waiting room into the TBP and Ultron.

1:27:02Brian Chesky:Ahmad, how are you doing? There he is.

1:27:04Immad Akhund:Yeah, great to be here. Am I not going to get the gong?

1:27:07Brian Chesky:Oh, you'll get the gong,

1:27:08Immad Akhund:but you've got to give us the news. Tell us what happened. You've got to be patient. You've got to give us the news. What happened today? All right, there we go. How much did you raise? Yeah, we just raised$200 million. 5.2 million TCP is leading so excited about the answer today.

1:27:26Brian Chesky:That's fantastic. What was the traction that unlocked this new fundraising round? What was the catalyst?

1:27:31Immad Akhund:You know, we've just been kind of grinding away for the last what is it, seven years since we launched The Night Success Seen a lot of growth in Q1 especially about 2.5x Q1 last year in terms of applications I don't know if you've seen the stats, but there's been a lot of new business formation, a lot of companies being built using AI. So obviously we hear about these big startups in AI, but there's also just normal businesses being built with AI being a big catalyst. And we saw a big increase, 2.5x over last year, which last year was a big year for us.

1:28:07Brian Chesky:How are you reaching those customers? What are the key funnels that draw in these new businesses? Because they don't exist. It's hard to reach out to them before. you have to be very aware.

1:28:16Immad Akhund:The other crazy thing for us is most of our growth is organic, but even the percentage organic has been growing for us. So even though we're growing, we're getting more and more organic, which is unexpected. And the other big channel for us is LLM recommendations. So if you go into your favorite LLM and you say, what bank should I use for my startup? Mercury is often the recommendation. So we try to deliver the best customer experience possible and because people really love Mercury, they tell their friends about it and that's a nice title for us.

1:28:49Tae Kim:What is like 90 % of the reason that you guys are recommended so highly by LLMs is just because people recommend Mercury so highly? Like I can't be, I'm just trying to get at, is it like your team was like, hey, we should really optimize this or it was just sort of like -

1:29:07Immad Akhund:Yeah, I think it's really hard. Like there's a whole thing called GEO, which is like all about optimizing for LLMs. But at the end of the day, If it's on Reddit, it's on X. If all the content is recommending Mercury, then that feeds into the algorithm.

1:29:18Brian Chesky:Yeah, it helps to have been doing press for years. There's a huge advantage to being in business seven years. Not so long that the articles are about the downfall or how you're a dinosaur. All the coverage is that it's new and interesting and valuable and worth checking out. And so that surfaces. How are you thinking about going deeper in those LLM recommendations and sort of like the agentic commerce of actually opening an account? Is that something that's on your horizon to integrate with LLM?

1:29:50Immad Akhund:It's kind of interesting thinking about like the LLMs using Mercury. So we actually launched Mercury CLI. That was a month or so ago and we launched an MCP actually in December. And our growth on those is like through the roof. So tons of people are using Cloud Code or Cowork or ChatGPT to connect to Mercury. And then I think, well, not for everyone, but for a lot of people, they're kind of running their whole business and their life in AI now. And if you can pull in creating an invoice or like approving a payment and it's all done within your existing workflows, that's really powerful. And I think there's a flywheel between like if you build great tools that AI can use, it actually recommends those tools even more.

1:30:31Immad Akhund:I mean, that's partly why people like Superbase and those kind of tools have done.

1:30:37Brian Chesky:Yeah, then how do you deal with the tension of like, you could build a dashboard visualizing payments that are made into a bank account over a period of time. You could also expose an API that allows me to suck out all the data and vibe code my own dashboard the way I like it. There's probably demand for both. Do you just have to do both? Do you pick a lane?

1:31:00Immad Akhund:I think for us it's like do both. So we're building both kind of the CLI and we have a whole team that's improving all the features available via the API and those services. But we also have another team that's working on, and we just launched Mercury Insights, which summarizes your transactions, gives you kind of AI insights on end, lets you talk to your transactions. And then later this year we're launching Mercury Command where you can do kind of complex workflows. Like, hey, I just hired someone, set them up in payroll and create a card and do all of that without me having to click around all of the Mercury surfaces.

1:31:35Immad Akhund:I think number one, I don't know exactly where the world's going to go. Maybe everyone's going to be using AI assistance to do everything or it's going to be a combination. We want to service both of it. B, if you think about the gap between us and these incumbent banks, even whether it's a mobile app or searching for all your transactions, whatever is, you know, Mercury has been far ahead. But if AI keeps changing the world and like, you know, the people's expectation of interfaces and things like that changes, we want to be at the forefront of that. And, you know, that's going to increase the spread between like what people get from Mercury versus like what they get from the incumbents.

1:32:12Brian Chesky:Yeah. I was reading an article in The Economist a couple of weeks ago about stable coins going through a boom last year and then going through a bit of a winter or like maybe just a, you know, stable volumes. through the earlier part of this year. What are you seeing in terms of demand or tickets or usage of stable coin-related features in fintech broadly?

1:32:38Immad Akhund:I think it's a lot more important on a global basis. I think if you're in the U.S. and you're sending money to a U.S. business or U.S. consumer, wires, ACH, all of the cards, all of that works pretty smoothly. If you're paying money internationally or you're not in the U.S. and you want to have a stable currency, that's where USDC and these other stable coins are doing really well. We don't currently support it natively, but lots of our customers use some of these kind of stable coin services. We'll probably have at least payment features that are based on stable coin, especially for those kind of international payments where it is particularly useful.

1:33:14Immad Akhund:I don't necessarily see it as a replacement for the US banking system in the US. I think it's more of this kind of global connectivity layer.

1:33:26Tae Kim:Why was this year the right time to get into payroll?

1:33:32Immad Akhund:We've been expanding our services. Obviously, we're known best for banking, but we've had a corporate credit card for three years and that's going really fast. We have a bill pay and invoicing solution. Over time, I really want Mercury to be the place that you do most of your business finances. It's kind of annoying. If the money's here and your users are here and your finance team is here, You want to have all of that in one place. We made an acquisition in payroll. We acquired a company called Central. We're continuing to run them and we're going to, over time, make it more like a fully integrated Mercury payroll solution.

1:34:09Immad Akhund:Payroll is a big category. It's kind of annoying right now when you're using a payroll provider. You have to send money. It sits around for four days before it shows up on your employees. and Central's done a really good job with kind of AI first like they have this whole interface where you can do a ton of things in Slack and we're kind of taking some of that learning and putting in our own kind of command launch.

1:34:32Brian Chesky:Yeah, is the AI boom helping you sort of rethink product roadmap expansion differently than a few years ago? Like when I think about neobanks, fintech, modern technology enabled banks I think you could eventually do auto loans, mortgages, consumer. You could do all sorts of insurance. There's so many different products in the financial technology world. I know that there's incredible value to focus. At the same time, there's this foundational unlock in being able to move very quickly into new markets. How are you wrestling with that tension?

1:35:13Immad Akhund:I think, number one, we want to talk to our customers and see what they really want. I don't want to invent things that they might want kind of thing. It's definitely accelerating. I think the two vectors are like, A, it accelerates software development. It doesn't necessarily make lending that much better, faster or whatever. Maybe you could underwrite a little better, but there's still limitations. But you can build software, especially new software, much quicker. So definitely thinking about that, and we're already seeing an acceleration in new software launches we're doing. I think the other thing that's kind of interesting is interfaces tend to get cluttered over time but AI has a decluttering effect like you can kind of personalize it to someone's need and like I really think the future is people are not trying to do a specific thing but they kind of just talk about a problem they're like hey I just need to make payroll help me think it through kind of thing so you can go like a level above solve the problem rather than be like a feature which I think like has a decluttering effect to interfaces.

1:36:17Tae Kim:That's good. Yeah. So it's so amazing. I just think back to, you know, 10 years ago at this point, like starting to, to build companies and just seeing how many things I expected to be intuitive. Like I expected my bank to be able to help me pay my employees. Cause like the function of a bank is to like hold money and let you do things with it. And yet obviously, you know, it took, took some time for you guys to enter payroll and And then all these other things, like just the concept of getting an invoice, wanting to pay it, you really should be as simple as dragging it somewhere. And then that's it, right?

1:36:54Tae Kim:And so there's all these things that right in this moment, there's going to be an entire generation of entrepreneurs that only knows this completely frictionless business finance. And I'm very happy for them. and I'm happy for all of us that had to go through do it the hard way for so long

1:37:13Immad Akhund:Yeah, when I started Mercury that's actually what got me excited that after you build a bank account there's so much more to do after that I really didn't want to this is my fourth company so I really didn't want to do this thing where you build a thing and then all you do is incrementally improve it over a decade I really wanted to do something where the start is just a start and it's kind of a platform to build a lot So I'm excited that we're finally getting to build that kind of multi-product strategy.

1:37:40Brian Chesky:Last question. Deployment pace for angel investing. Are you accelerating it? Are you decelerating? What are you doing on the angel investing side?

1:37:49Immad Akhund:Maybe I'm a little old school, but I think when the valuations are the highest and the hype is the highest, you should not accelerate. You should, you know, we saw 2021. I'm trying to keep a continuous pace. I think it's total. Don't you know this time is different? Yeah, I think that there's a reason for the hype and there's really exciting companies being built. But I think it's going to be even more fun when the valuations come down after the hype dies down and you can then deploy it. It was crazy. No one was deploying in 2022 and 2023 when it was the same companies at a massive discount.

1:38:23Brian Chesky:Yeah, yeah. No, I mean, the smart funds were. And a lot of great companies made it through, grew even bigger and are bigger than they've ever been, as you are. So congratulations on all the progress. Thank you for coming on the show. We will talk to you soon. Have a good rest of your day. Goodbye. There have been a number of AI images hitting the timeline. One was of Peter Thiel eating ice cream in Buenos Aires. He has been spotted at a chess match. I think that image was not AI. This one is AI generated by Kat McGee, but it still sparked a bunch of funny reactions. One of them, the question you need to be asking is, what delicious ice cream is almost nobody eating?

1:39:07Brian Chesky:Mint chip. Mint chip is a question.

1:39:10Tae Kim:Is mint chip properly rated or underrated?

1:39:14Brian Chesky:Mint chip might be underrated. I think it gets thrown in with the chocolate category. It's sort of a second fiddle to the vanilla strawberry chocolate.

1:39:22Tae Kim:I was always a mint chip kid.

1:39:22Brian Chesky:I like mint chip. I was always strawberry. I like strawberry ice cream. But I think as you zoom in on this AI image, you can tell that it's AI. It's just too crystal clear, too well lit for, you know, someone to snap a picture unnoticed in Buenos Aires at a at a at an ice cream parlor. This would be this would require professional lighting to get something like this out of a camera on the fly. If you saw someone zero to yum is what they say. Anyway,

1:39:54Tae Kim:a question. Yes, John, what I was asking you this morning.

1:39:58Brian Chesky:Yeah.

1:40:00Tae Kim:Do you think it's better to rest on your laurels or sleep at the wheel? I think I have my answer, but I can't hear yours.

1:40:10Brian Chesky:I think in the modern era, sleeping at the wheel is increasingly safe because of self-driving cars. You can be sleeping in a Waymo. You could be sitting in the front seat. I don't know. Do they let you sit in the front seat of a Waymo? I don't think so.

1:40:23Tae Kim:Maybe if there's a fourth. Yeah. Can you? Not behind the wheel.

1:40:27Brian Chesky:Not behind the wheel. But what if I'm in the back and I wiggle my body through the front two seats, sit in the front, it'll stop the car? They're going to come on the phone. They will. Stop. Okay. Well, then it seems like it's increasingly difficult to sleep at the wheel. And so perhaps resting on your laurels would be the better option.

1:40:45Tae Kim:I think so because it allows you to, one, it's obviously comfortable. Yes. Quite relaxing. Yes. But just because you're resting doesn't mean you can't get back in the game.

1:40:55Brian Chesky:Yeah, also resting on your laurels implies that you have laurels to begin with whereas sleeping at the wheel You just have a car. Yeah, it could be my not even your car It's also very Lindy right people have been doing this for thousands of years Sure, imagine a Roman Emperor resting on their laurels, but they weren't sleeping at the wheel They hadn't invented the wheel. They barely invented the wheel.

1:41:13Tae Kim:I think they had the wheel well

1:41:15Brian Chesky:They would ride on top of wheels

1:41:17Tae Kim:They had they were they were planning to reinvent the wheel.

1:41:20Brian Chesky:No one had a wet a wagon that had a wheel that would steer the wagon You had reins. They would take the horse by the reins. Isn't that the phrase? Take the bull by the horns? What's the reins idiom? There's some sort of reins idiom. Anyway.

1:41:37Tae Kim:Yeah, no, I think personally.

1:41:40Brian Chesky:Resting on your laurels implies that you have laurels to rest on. Sleeping on the wheel means that you just got behind the wheel of some car.

1:41:45Tae Kim:You could be in a sudden death situation.

1:41:47Brian Chesky:Yes, much riskier.

1:41:49Tae Kim:High risk, low reward. Almost very, very.

1:41:52Brian Chesky:plenty of people rest on their laurels and just fade into obscurity they aren't met with them with true downfall if they're resting on their laurels but sometimes you just rest recharge get back in the game ideally you avoid both ideally you avoid both sleeping at the wheel and resting on your laurels imagine just a bunch of laurels in your driver's seat and you're just

1:42:12Tae Kim:sitting you could be doing both at the same time well that is the riskiest possible scenario because you're going to be the most relaxed yeah highest likelihood of you know careening off the road you

1:42:21Brian Chesky:You want to avoid both. You want to avoid both. What do you think of this desk? Herman Miller launched a gaming desk. People are saying it's tasteful. A tasteful gaming setup for once. They thought it was impossible.

1:42:34Tae Kim:You personally find pretty much all gaming setups tasteful. Extremely tasteful. It's a big part of your culture.

1:42:39Brian Chesky:I love a gaming desk. I don't know. The thing is, I don't know. Watching this video of the Coil gaming desk, it doesn't scream that tasteful to me. It seems like a minor upgrade. Probably the best gaming desk out there. Seems very functional. I also, I don't know why there's a back panel there. I don't know what that's for. Is that for passing wires through perhaps? But how would you rate this gaming desk? Is it tasteful?

1:43:12Tae Kim:I like it. I like the red coil. I like a pop of color.

1:43:15Brian Chesky:Okay. A little color in there.

1:43:17Tae Kim:I love, that color red is great. It's one of my favorite colors.

1:43:20Brian Chesky:Maybe it's a, yeah. Yeah. I think it's a CD.

1:43:23Tae Kim:I have a, I have a.

1:43:25Brian Chesky:What is the coil for? Oh, it takes the cable down so you can plug it in because it's adjustable.

1:43:30Tae Kim:Almost certainly power.

1:43:32Brian Chesky:I feel like they could just thread that through the leg and it wouldn't even be there. But I guess it adds a pop of color. The chat is saying over-designed. Over-designed. We'll see. Herman Miller, Herman Miller has a whole gaming division, I suppose. Anyway, you got to remember, this is from Will DePue, you got to remember that there's some guy out there who's the Michael Jordan of steel processing. He's on a generational run right now. Everyone sees their niche as the center of the world. So many greats you'll never hear of. The Michael Jordan of steel processing. We got to find him, dig him up, get him on the show.

1:44:04Brian Chesky:We've had the Michael Jordan of acquiring rare parcels of land in Montana on the show. You got to have him back on.

1:44:11Tae Kim:He's got to be pretty excited for this upcoming round of data center build outs a lot of i don't know anyway a lot of those ipo we can come back to

1:44:21Brian Chesky:the land the land strategies uh because we have our next guest here brian chesky from airbnb back on the show only a few weeks since we talked to you last welcome back thank you so much for taking

1:44:31Tae Kim:the time how are you doing hey guys how you doing good to be here again great to see you we're not and i'd be better if we were in a blimp right it'd be better if we were in a blimp but we're

1:44:39Brian Chesky:coming soon closer to hanging out on a blimp together uh give us the update what's going on in an Airbnb world? So we announced a few things. The first thing we announced is a whole bunch of new services, probably starting with grocery delivery. A lot of people love that Airbnbs have kitchens. So now when you book an Airbnb, you can have groceries waiting for you in Airbnb. A number of people tell us that if you go to Rome, it's hard to get an Uber. So now there's going to be somebody that can welcome you at the airport and pick you up and take you to Airbnb. We also announced finally car rentals, a long time coming.

1:45:10And so now you can get a car rental on Airbnb. And we also announced that we have now boutique and independent hotels. If you book a boutique or independent hotel, we are creating a price match guarantee. So if you see a lower price anywhere else, we will give you the difference back in Airbnb credit, and we'll give you another 15 % towards the next booking of anything on Airbnb. So those are just a few of the things that we announced. Really, the basic idea is just continue to listen to customers, continue to listen to our guests, listen to our hosts, and just keep expanding and perfecting the service and trying to make it be a bit of an ecosystem of other developers and other apps.

1:45:46Brian Chesky:Yeah. This feels like the fruition coming to reality of a lot of the pitch that you gave last year. What was involved in actually getting to this point? How much of this is predicated on new software development, new product initiatives versus partnerships with existing areas? A lot of these feel like they touch the real world. So it's not just an extra line of code or an extra panel or button in the app. Yeah, I mean, it's a good question, guys. The app that most people see is maybe something like 20 % of Airbnb. There's also a host app. But again, most of the work about Airbnb is what happens in the real world.

1:46:25And I think I said last time that we spent a lot of time, imagine like you're living in a one-story house, and then suddenly a bunch of people want to move your house and you have to add like a second, third, fourth floor, but you didn't build the foundation for a four-story building. And so what we had to do over the last few years was kind of rebuild the foundation. It really was only built for homes. It was not built to do other things. Amazon had this problem in the late 90s. They were built on ISBNs for books and they had to basically take their website and turn into a bunch of primitives.

1:46:55So we basically already done that work. To give you an example, it took us 16 years to finally expand beyond homes. It took us two years of developed service experiences. It took us eight months to develop groceries, and it took us only two months to develop luggage storage, airport pickups, and car rentals. So basically, looking at the time to launch from conception to launch, we can now have an idea and put it into a market, sometimes within a couple weeks to a month. And what that should mean is instead of announcing one or two things a year, eventually we can announce dozens of things a year.

1:47:24Yeah.

1:47:25Tae Kim:Cars. Why? Obviously a hard thing to do, but I'm sure people have been asking this for a decade now. Why did you choose at some point not to maybe listen to your customers? Why are you making those? Why was now the right time? Because it just feels like such an obvious thing. I'm booking a trip somewhere. Give me one click to add a car. Obviously, there's more that needs to happen on the back end, but why? Yeah, another great question. And I asked myself that. Why didn't we do certain things sooner? And if I could, I would have. You know, I remember that one of my early investors said starting a company is like jumping off a cliff and assembling the airplane on the way down.

1:48:12I never realized when I started a company that – I never realized. I thought if you hire thousands of people, suddenly you'd have all these extra people to do all these extra things. But when we were in hyper growth, we basically just had most of the people just trying to keep the lights on. And we really struggled in the 2010s during our hottest moment to really expand beyond our core business. We tried in 2012, didn't really work. Tried in 2016, didn't really work. We finally thought we cracked it in 2019. And then suddenly the pandemic hit. We lost 80 % of our business in eight weeks. And we said, oh, man, we don't have time to do this right now.

1:48:44We got to go back to our core business. So we've kind of had three different starts. And we tried it before. we just never really were able to stick the landing. I think this time we finally can. So yeah, people have been asking for this for more than a decade. In fact, 15 years. 2011, we began thinking about it. And now I'm happy to say that hopefully going forward, we won't have to wait 15 years for another service. So they'll be coming really fast now.

1:49:09Tae Kim:Yeah. And how is it working under the hood? Are you partnering? Like, is this also kind of like sharing economy play? Are you partnering with car rental services or both? I imagine you want to offer people. Yeah, it's going to be a mix of things. There's not really a lot of global providers, so we're going to be working with a number of different partners that can fulfill this. Some of the services, like Bounce, like we don't do luggage storage. They have 15 ,000 locations, almost as many as there are Starbucks. So that's more like an app store integration. And then sometimes we have to build the services first party with our own host because they don't offer it.

1:49:44With car rentals, we're basically able to partner with a bunch of companies. No one company covers every geography in the world. We're in more countries than Coca-Cola. So you have to patch a bunch of things together. I think over time, we'll probably get a little more.

1:49:57Tae Kim:You guys are in more countries than Coca-Cola? I think that. We were, at least last time we checked. What is Coca-Cola doing? They're asleep at the wheel. I know. Come on, what are they doing? They need to go to founder mode. I think we're in every country but North Korea, Iran, Syria, Russia, Belarus. Maybe there's one other. So we're just about every other country. Yeah, the other thing with cars that, and as I was just like thinking about that, as kind of Turo came on the map, one of the, and I love cars. So as always, I thought very briefly of, well, maybe I should get a bunch of cars that I like and maybe turn it into a little business.

1:50:36Tae Kim:I quickly realized that like, it's like fundamentally a wildly different business. Because if I have a property and I put it on Airbnb, even if people are staying in it 365 days a year, if I buy at the right price and in a great market, I will continue to appreciate. Cars are the exact opposite. And it's just like a wildly different financial equation. And so it always made sense to me just from that lens where the supply side is like incurring some like heavy, heavy costs associated with actually like supplying, you know, providing that supply versus on the Airbnb side. You know, again, you can get a bunch of rental income and not occur any, you know, significant losses associated with the asset.

1:51:24Yeah, I mean, I think that's a really, really good point. and usually people's second biggest asset after their home is their car. And so I think now we have people's time, we have their homes, we have their cars. We would like to move to a lot of different other categories. Over time, I think you'll see a couple dozen other categories coming over the next year or two on Airbnb, essentially building this entire ecosystem of services. But you're right. I mean, I think maybe one way to think about Airbnb is just getting more capacity utilization out of assets. Anything that's empty could be further monetized.

1:51:55and the world could be a bit more efficient. It could be cheaper to own a car. It could be cheaper to own a house if you could defer the cost by sharing with other people. That was basically how it started. I couldn't afford to pay rent, but that doesn't limit itself to homes, as you mentioned. It could be anything, cars, it could be boats, it could be equipment you have laying around. It could be kind of anything.

1:52:14Brian Chesky:How do you think about the previous services that have tied into Airbnb? Was there ever a power law distribution in those, any few services? We've talked about, you know, fitness trainers when you're in a town or private chefs or anything that can add to an experience, a kayaking tour, a hiking tour. Was there a power law distribution in those? Are you seeing breakout successes in those? Like what's the shape of that side of the business these days? Yeah, so basically we learned two things with these services. I'll talk about service and experiences. There are three services. We launched a 10, three breakout hits.

1:52:53The three breakout hits are photography. A lot of people want photos on their vacation. And obviously, if you're a family of four, like one of you is not in the photo or you're giving your camera to someone else. And you want to remember these trips. So having a professional photographer take your photos for 30 minutes is a pretty reasonable cost. That's very popular. Chefs. Chefs are not as popular in very urban areas. But let's say you go to Lake Tahoe. You have a big kitchen. Maybe you have groceries. Maybe you don't want to cook. A chef could come over. There's not a lot of restaurants there.

1:53:21And then the third one's massage, especially, again, in vacation rental or villa destinations, massage is very popular. Other than that, it's really geography by geography. So we see, like, in Sal Yolita, it's a different kind of experience than, say, in, like, the Caribbean. So it really depends geography by geography. With regards to experiences, we're seeing a couple things. Number one, no surprise landmarks. People, the first time you go to a city, you want to see a landmark. But the thing we learned is the second time you go to a city, you don't want to see a landmark. You want to experience food.

1:53:52The third time you experience a city, now you want to get inside access. So a big thing we learned is, is this your first, second, or third time in the city, or do you live there? And depending upon the answer to the question depends on the type of experience we offer you. This is a nuance that we didn't really appreciate the first time around, and now we do. I think my prediction is the thing that will make service experiences really big is people will start booking them in their own city. That's when the TAM goes by a factor of 10. Not to say it'll be every day, but it just makes it a lot bigger, Tam.

1:54:21Tae Kim:Yeah. Yeah, just clicked for me that one of the challenges of all the marketplaces, like photography, chef marketplaces, massage, all of them, I can't even really think of their names, even though there was venture-funded companies in those categories. Because the second you hire a chef, they're literally preparing you food. You immediately develop trust and a relationship. And so if you find a chef in your hometown, you're going to have this massive disintermediation risk.

1:54:52Brian Chesky:And also, like, economies of scale, if you're just the private chef booking company, very hard to support the entire operation, the back office. But Airbnb is a big company. This can be one of many features. And the features that you build can be flexible.

1:55:07Tae Kim:It's like, yeah, I want a photographer here. I want a chef here. Yeah, yeah. You bring up two points. I'll bring up both points. So one thing is most services, there's not even one app in the world. So if you want to get a massage in the United States, you might use an app like Zeal. But if you want to get a massage in Korea, I don't even know the app. It's probably a Korean company. And if you want to go to Brazil, it's going to be a different company. So it's not even possible for most people to know which app to use in which country. And so being able to aggregate all that demand is great. And these apps, these developers love it because we basically are their international expansion strategy.

1:55:40Much of these companies, the hardest challenge they have is growing internationally. And we say, well, we can introduce your brand to a global audience. Well, now let's talk about locals. Yes, if you're going to do a repeat service, we don't want to charge 15%, 20%. We're going to have to decide a business model. And maybe there is no commission or it's a very, very low commission. And maybe the value there is just we make your life easier. And I think this brings up a larger point, which is we don't need to monetize every experience on Airbnb. be. The best thing is have a great relationship, add value, and know that there's enough high value assets we can make money on.

1:56:15And we don't need to try to get every last dollar. We just really want people to love our service. And as you know, we generate quite a bit of free cash flow. So we're one of the more profitable companies as a free cash flow standpoint. So we are able to pass a lot of value on to customers.

1:56:32Tae Kim:Yeah, I think that framing as a concierge for the world, where like if you're staying, if you're staying in a hotel, like the concierge is not always thinking like, okay, this person wants something to do today. How do I get the maximum amount of value out of them in this moment? Right. Cause then you'd always send them to, well, why don't you eat at this restaurant on the property? Or why don't you do this thing on the property? But just like actually taking a positive, some view and just know that like you want to be core to someone's experience wherever they are in the world, I think is. I like concierge for the world, by the way.

1:57:06That's like a very good slogan, actually.

1:57:08Brian Chesky:Coinage. I love it. It's all yours. It's all yours. Maybe this is a random pivot, but the total solar eclipse is happening August 12th, 2026. I want to know. It feels like it's driving a lot of travel broadly. And I want to know, like, do these special events?

1:57:26Tae Kim:I got to say, first of all, like, I feel like every time there's like one of these things, It's like, this will never happen again for 600 years. And then it happens in like two years.

1:57:36Brian Chesky:No, no, no, no, no. It's a very specific band.

1:57:37Tae Kim:There's something that happens every 600 years, but there's a lot of things. Yeah.

1:57:40Brian Chesky:So a couple of years ago, it happened in Texas. And this time it's happening in Greenland, Iceland, Portugal, and Spain. And so there is a lot of travel. And I've heard stats from other companies. And I'm just wondering about these big events. First, how much do they show up in the data? How much do you see them? And then second, like, what are you doing to like amplify and get the most out of these? Let your customers know because you frame this as like sometimes the best experience is like when you know it's the first time visiting a place, second time, third time. But at the same time, as a user, there's this tension between I love it when a company knows something about me before I have to fill out a form.

1:58:18Brian Chesky:But also it gets a little creepy if they know too much about me. and this weird tension where I want you to know, but I don't want you to tell me that you know, and I don't want to fill out the form, but I don't want you to spy on me, but I sort of do want you to spy on me. So walk me through all of that. Okay, so yeah, two parts. I'll do the solar eclipse, and then we'll talk about essentially personalization without being creepy, maybe is the point. Yeah. Okay, so on the solar eclipse, in 2024, I think it was the spring, or I don't know when it was in 2024, we were able to see a heat map. So yes, you saw in the data, and we were able to see a heat map of the exact path of the solar eclipse, And you can look at a heat map of all of our bookings, and anyone that was in that line of the eclipse, you saw a massive increase in bookings.

1:58:57When the Taylor Swift Eras Tour came out, you could literally follow the tour from the data on Airbnb. When the World Cup came in Paris, sorry, the Olympics came in Paris, 700 ,000 people stayed in Airbnb. That's like eight, nine Olympic stadiums were the people. In Milan, 200 ,000 people stayed in Milan and Cortino for the Olympics earlier this year. the World Cup's coming up in Mexico, US, Canada. We're expecting that to be the biggest event in Airbnb history. You're actually hitting on a really key point. Maybe the reason Airbnb exists is this weird phenomenon where people list their homes for an event.

1:59:35Most people have only intention of listing one time, but about 50 % of the people continue hosting. And so it's kind of a hook. And a lot of people are like, I don't want to host, but they do it once, they make a bunch of money, they realize it's not weird, and they keep doing it. If it wasn't for this phenomenon, there may not have been an Airbnb. We used events to grow. So that is basically a core part of our strategy, whether it's Coachella or Lollapalooza.

1:59:59Tae Kim:Airbnb futures. I should be able to go buy. I should be able to go see events that I know are going to happen, Olympics, World Cup, and basically buy and then resell. I'm kidding. And then I want to answer the second part of, I think, John's question, which is personalization without being creepy. So right now, I think most websites and most apps don't really ask you questions. They infer things, right? They think that if you ask somebody a question, that's friction. And so for 25 years, this is Amazon, this is Instagram, this is basically every app, including Airbnb, we're mostly just looking at what you click on, what you book, your prior behavior, and we try to infer based on that what you want in the future.

2:00:43I think going forward, we're going to go beyond that. We're going to do two things. The first thing we're going to do is we're going to ask you questions. That's what an agent does. An agent asks you questions. So your concierge for the world should ask you questions. You went to a travel concierge, but they didn't ask you a question. That would be pretty weird. So I think that's the social contract. The app is more conversational. We're going to get more information. But the other thing is designing preferences. We found that people are fine giving us their information if they know why, where it's going, that it's vaulted, and what we're going to do with it.

2:01:13So we're going to develop a preferences panel. Like we announced today that one of the things I'm most proud of is the design of a privacy page. Most people, they either don't care about the privacy page and like the people that it's like their entry level work. Or they make it, sometimes they make it purposely hard. But then ultimately that erodes trust. So we're making preferences. I want to basically build a preferences library where we show you, here's all the stuff we know about you. Do you want to edit anything? Do you want to add it? And here's what we're going to show to whom. And you can say, show this to the host.

2:01:46This is only available to an agent. This, no human can see. It's vaulted, but the app can see it, and eventually maybe it's encrypted. So that's kind of where we want to go.

2:01:56Brian Chesky:2034, total solar eclipse in Egypt. You can stand at the pyramids and watch it, book your Airbnb futures. I'm going to go and offer cash today. You should start buying property all over Egypt.

2:02:09Tae Kim:Last question. what's the last major fitness or health unlock that you've had and then we'll let you go Oh, very good question. Fitness or health unlock. Could be a habit, could be a supplement, could be anything. Great question. Sleep protocol. Actually, okay, if you're sleep - I've been taking creatine five grams since I was like 17, but I read that they did some studies that if you didn't get a good night's sleep, you can take up to 20 grams of creatine and you are nearly as alert as if you got a full night's sleep. and I don't know, it seems to work. And so if you don't get a good night's sleep, instead of taking a normal dose of creatine, take a much higher dose.

2:02:53The only other thing I'd say is, for those listening, I'm a big fan of compound movements. I think the most important exercise, if you only do one, is the squat. And I'm very focused on it.

2:03:05Tae Kim:Sorry, Brian. I don't mean to laugh at you. We have these sound effects. So John, talk.

2:03:08Brian Chesky:It makes a sound like this. Can you push? It makes my voice sound like this. and Jordy was doing it to you during that last step

2:03:17Immad Akhund:and it sounds ridiculous. Yeah, I really like compound lifts.

2:03:23Brian Chesky:Compound lifts. That's good. That's exactly how I'd want to be able to say it when I'm talking about the clock. By the way, before we go, I just want to tell you something. Please. Are you guys still interested in doing the Blimp experience? Absolutely. Yes, 100%. We're ready. We packed our bags already. So we've been talking to brands. We've been talking to people and I want you to know that we're going to make this happen. I'm very excited. We're going to make it happen. and the team is pumped up right now. Everyone's fired up.

2:03:46Tae Kim:We're fired up. Congrats to the whole team on all the new releases. Yeah, congratulations. Thank you very much, guys. Great progress. This is fantastic. Always fun. Have a great rest of your day. Congratulations.

2:03:56Brian Chesky:Goodbye.

2:03:58Tae Kim:First chat guest. Unfortunately, the first chat guest, very fitting. Yes. So, unfortunately, the chat effect, the guest cannot hear it. Only you can and the two of us, but we're going to keep using it. strategically. It's a really good effect. I was so skeptical when you lost these buttons. I was like, can we get the comedic timing to work? Will it hit?

2:04:25Brian Chesky:Turns out, we can. Yes, it's working beautifully. Well, our next guest, get that button ready because I think we're going to be using it again. It's Marcus Malone from Minted, New York. Did I say your last name correctly or did I mispronounce that? Botched. It's Millioni. Millioni, I'm sorry. Yeah, I've been getting Malone my whole life. So it's fine. I'm used to it. It was written sort of tiny on my sheet.

2:04:46Tae Kim:Dude, it's incredible. It's an honor. It's an honor on the show. Way, way overdue. I've been following your journey for a long time now. You've been absolutely on a tear. And yeah, we're excited to have you. Since it's your first time.

2:05:01Brian Chesky:Yeah, zoom out for us. Zoom out for us.

2:05:04Tae Kim:You know, all that stuff. All right. So I don't know how far back you want me to go. Let's go all the way to the lax days at least. All right. So I played lacrosse in college. I played at St. Joe's University in Philly. After I graduated, I was working at a smaller regional bank doing commercial real estate debt.

2:05:26Brian Chesky:Yeah. Until like a year or a few months into COVID. As COVID started, minted kind of spawned after I was posting on social media, Instagram, TikTok. Were you just doing your own accounts first or were you thinking like, I'm going to build something or was it experimental? Like what was the actual flow? Well, I was a little bored during COVID. I was at my parents' house. You didn't love regional banking?

2:05:59Tae Kim:We love regional banking here um yeah so i thought i was taking a long weekend at my parents house and covid would like blow over over a long weekend and then um so i just started posting about things i liked mainly around like fashion and fitness on on instagram and tiktok and then the brand kind

2:06:19Brian Chesky:of spawned out of that yeah what was the first format direct to camera like scripted unscripted Yeah, like yapping, get ready with me. Phone in front of my face, yapping. I guess that was mainly TikTok. And then Instagram was more just like outfit photos. Okay. Like I like putting outfits together. Yeah, yeah. And then what was growth like linear? Was there a key turning point? A lot of times, like with my YouTube, I started a YouTube channel during COVID, very similar story. And for the first year, it was like a thousand views. And then I cracked the code on one video, correct structure. and it started, it went, I think it got 60 ,000 views, which was like an insane takeoff by comparison to the thousand views that I was averaging.

2:07:02Brian Chesky:And I credit that a lot too. I had the editing dialed, I had the script out, but I really got like the structure and the title and the thumbnail all like packaged up so it like could fly. And I'm wondering like what the process was like for growing on TikTok and Instagram. I mean, I kind of viewed it as a reps game. I told myself, at least on like the short form video stuff, since I had no background in it. I was like, I'll just do three videos a day for 365 straight days. And by that point, you know, you start to see, you get feedback from like the analytics. And so after a certain point, you're like, okay, well, this did well here.

2:07:37Let me like, you know, try some variation of this next time. But really, yeah, it was just like a reps game. I would try any sort of video style, but a lot of it was just talking. And I think at that time, there was a lot of like it was still a dancing app right like people were just doing dances and i wasn't doing dances i was trying to just provide some form of value to the viewer um and you see it a lot more now but at that time it was kind of like not as prevalent so i think yeah i think of you i mean i

2:08:09Tae Kim:think of you as like the the a new generation of like founder led company which there was like you know great companies have almost always been uh well every company started by a founder but uh but uh you're like the first generation that was this like hyper online you're in public you're you're building your personal brand you're building your personal brand as well as like you know people are following along building the company also like your own uh journey as like an athlete and doing those things together and just having this like hyper presence where historically a founder, even if they were pretty online, they might pop up and do like an interview every few months and people would be able to tune in there.

2:08:53Tae Kim:Or they might post like post a little, you know, somewhat actively on Instagram, but that wasn't like three video, three like medium form videos a day for a year kind of thing. Um, and I just feel like that built so much momentum because there was like multiple things to latch on. People could latch on to like how are you how's your how's your actual running going like i i you know remember video after video where you're like pushing yourself super super hard and then there's also like some people can latch on to the business side which you're like giving people behind the scenes and really making people feel like a part of building that which has ultimately led to where you're at right now you had this uh drop this week that uh i hit you up yesterday must have been extremely uh chaotic You guys sold out so quickly that you were going back through trying to identify people that were botting it to resell.

2:09:47Tae Kim:Yeah. Take us through the launch. Take us through. But before we get there, kind of the key moments along the journey. You start out, you're just making videos. At what point were you like, oh, I can quit? When did you quit your job?

2:09:58Brian Chesky:I got to make some money off this. Yeah. So it was like month eight of kind of after we started. I started January of 2021. And then by month eight, we had kind of had four large releases under my belt. And it was starting to become too much to try to juggle between real work and not like letting anything like slack there because obviously that paid the bills. But I remember talking to my dad and trying to figure out, okay, what's a good exit plan? And so we came up with like a revenue number that we would hit over the next three months. And if we hit that, then you know what, we're going to take the jump and quit our job.

2:10:41And so then very next release, we hit it in like five minutes. And I remember being at home and being like, well, I guess we're just going to.

2:10:53Tae Kim:Well, that was part of what must have been nerve wracking quitting, right? Because it was a drops based approach. And so you have super spiky revenue. So it's, you know, you're thinking like, okay, well, if this drop goes well and this drop goes well and this drop goes well. It doesn't feel like a paycheck every two weeks. Yeah, it doesn't feel like it's streaming in. No, I mean, you're also, you're betting the farm like the entire time. Every single drop, I would just run the bank account to$0 on production and hope that it went well. I guess at any point, like, it could have blown up in my face and gone to zero.

2:11:23Yeah.

2:11:24Tae Kim:So that happens. uh what what when you when you're looking back what was the next like significant moment you're like okay this seems like a real business people like what we're doing i would say that that following christmas like that december so 12 months in um we had like the largest release of of the company's history it was like going into uh christmas season and holiday season and we released and i remember being like so blown away by the number on the screen but then also realizing like, okay, all this inventory is in my parents' garage and we have to ship all this out as fast as possible.

2:12:01Yeah. So I need all hands on deck. I've got like, I've got my brother, my sister, my mom, my dad, like everybody is there packing. And I'm like, this is going to take us two days. It's like, no problem. And it took us like six days of packing every day, like through Christmas might've ruined Christmas. I'm not even sure. Um, but it was so new. Everyone was so excited to like, I mean, obviously toward the end, we were definitely getting on each other, but there's so new and exciting for everybody that, um, yeah, kind of just, it was a blur.

2:12:34Tae Kim:And then, and then this whole time, uh, like running is blowing up running, got running, got cool. You, you, you clearly thought it was cool before you started the brand, but I think a lot of people realized that maybe it was cool. Uh, you know, around 2022, is that like when it, when you felt like it was really becoming part of popular culture and in a bigger way? It was, I mean, yeah, it was really becoming part of my life then too. I think I probably started in 21 and then really picked up and wanted to start racing. What were you running from? Honestly, a lot of different things. I probably now that I think about it, but, um, Yeah, I mean, like it started like everybody else.

2:13:16You sign up for half marathon. You're like, OK, I got to train and I'm going to give myself a time goal. And then like anything else, it's a sickness. And then it just gets worse and worse.

2:13:25Tae Kim:Did you start? Do you still feel pressured? Were you feeling pressure to be the best runner out of your customer base? I feel like you're kind of running two races. You're building a business. And then I can imagine it really gets in your head because you start sharing some times that you're running and then you're competitive and you want to improve. Walk us through that. Yeah, I mean, the beauty of posting on the Internet is that you get to hear commentary from everybody on the Internet. So I always approached it as if we're going to make a performance running apparel, I better have some half respectable times.

2:14:08I'll never be elite. I may never be sub elite, but I at least put in the time and effort and try to run fast. Yes.

2:14:21Tae Kim:And then at what point did you start getting approached to do, you know, big partnerships like this drop this week? Because these type of things are typically, you know, you brands need to like meet in the middle. The best partnership is a win for, it legitimizes the rising brand and then makes maybe the more legacy brand cooler and more relevant. But timing matters a lot for these things. Yeah, I think it was toward the end of 2022. too. So we, you know, coming to the end of our second year, I got an email from Jason over at Saucony who kind of heads their, it's called energy, but partnerships.

2:15:07And it was really cool. I mean, the email started out just lifestyle because at this point, the brand wasn't as heavily focused on the performance running piece. And it was a lot more menswear and jewelry and stuff like that. So he wanted us to work on a lifestyle shoe that kind of fit into that world. And then when they brought us up to Boston, I kind of pitched the idea of, well, we should do a running shoe, too, because we run and we're also making performance apparel. And so it was lifestyle first, then the running shoe came, and then now we've had two running shoes.

2:15:44Tae Kim:And then how are you thinking about beyond running? Are there other categories that you're particularly excited about or do you want it to be a brand that can exist anywhere that your kind of idealized customer goes? Yeah, I look at, I mean, an athlete spends a lot of time outside of sport. And so I think that being able to provide products like, as I call them, off court is important. But from like a performance sporting side of things, I think we're really focused on running right now. But I'm interested in a lot of the endurance sports. You know, cycling is very interesting. But for right now, just the running piece.

2:16:30How are you thinking about growing the business?

2:16:34Brian Chesky:It's such an interesting origin story because it's not, okay, I was in business school. I raised money. I went to a design firm and set up an EDTC website. That era existed. And there were a couple companies that made it through. A lot of companies that we've talked about that didn't quite make it or wound up selling off at a discount. And it feels like at some point, if you're not already there, there might be like a crossroads of like, are you going to take a run at being, you know, the next Nike, raise as much money as possible, retail footprint all over the world and like go crazy or, you know, more, you know, family business, compound slowly, grow, grow, grow, do things tastefully.

2:17:18Brian Chesky:And there's obviously like a whole, you know, a whole gradient of pathways in between. But what feels natural to you? It's hard to say. I mean, like we're bootstrapped now in year five. And obviously, like.

2:17:35Tae Kim:Take it all the way. Take it all the way. We're hitting the gong for that.

2:17:41Brian Chesky:The gong for the anti-fundraise. You love to see it. So obviously, it caps what you can do and how big you can do certain things. But in my mind, I want the brand to be as big as possible on a global scale. I don't think when you're trying to build something like that, going slow and building a really strong foundation is a bad thing. I don't think us being almost handicapped in the bootstrap way from a money standpoint is a bad thing.

2:18:10Tae Kim:Yeah, look at the last month. month. You had Airbnb pivot to being, or sorry, uh, Allbirds pivot to a Neo cloud. You have Everlane, you know, sell to Sheen, uh, examples of, uh, high growth. Uh, if you're doing anything like cool and apparel and you're executing well, you're going to go grow quickly, but high growth appears to be entirely at odds with like building a lasting, uh, consumer lifestyle brand? Yeah. I mean, I think that there's a playbook where you just turn on the meta ads faucet and just like throw money at it. Right. But I mean, we do very, very, very little advertising at all. I mean, we're really just, I would say 99.5 % organic.

2:19:02And that feels like a really nice strong foundation where if we want to turn on the paid advertising it it just makes our life a little bit easier because we're building a brand that people know and you're not just like getting fed ads all the time and then you end up buying it and you're not you have

2:19:19Brian Chesky:no real like affiliation with the brand yeah and the worst cpms you'll ever have are when you're you know there's no brand awareness like every year you delay that it gets uh the economics probably gets stronger and the TAM gets even bigger. How are you thinking about bots? What is a do not buy decoy listing? Explain to me like how all this fits together in the modern era. Yeah. So, I mean, when, when their shoe is anticipated in that way, like we saw it with the Speed 4, which was the first shoe we released, we got slammed with the bots. And, you know, it's people submitting orders for 30 pairs.

2:19:57They want to resell them. A lot of the time. And so this time I took to Twitter before the release and, and called upon people who either like bought it in the past or are current botters to try to get a little focus group together to figure out how I could jam up the bots. So I'll give you the sauce on what I did. I had those two decoy listings on there because I guess, you know, the bots don't look at the screen. They're just going right to checkout. And so I had those be the correct listing, naming structure, everything. And then the real listing, the one with the green border, had none of the real terminology associated with the shoe on the listing or in the kind of like the metadata.

2:20:44And it seemed to work. I would say like 99 % of the orders were manual. Some people did bought it, but it was very easy to catch and then go ahead and cancel those orders.

2:20:55Tae Kim:Wait, what was on the decoy pages though? You should have sold like sand for like$1 ,000, you know, like$200 a pound. We had it so that the shoes were like 10 ,000 pounds. You couldn't get a shipping rate because they were so heavy. So you would get to check out and then the whole thing would break.

2:21:15Brian Chesky:That is brilliant.

2:21:16Tae Kim:It's really clever.

2:21:17Brian Chesky:I feel like this cat and mouse game is going to go on forever.

2:21:19Tae Kim:Yeah, it's such a, it's such a, yeah, having, having like hype and, and way more demand than supply is like the, you know, it is, is a, is a blessing for, for a brand, but it is such a, it's such an interesting challenge because you want to get your product. You don't benefit at all from shoes selling it two, three times, whatever it is in the secondary market. And so like your entire focus has to be on like, how do you get the shoes to the actual people that are a part of building this brand with you. And it's, um, there's probably like a, has anybody built like software to help with this? It's a pretty niche problem because most brands are like, we'd be happy to sell out with bots immediately.

2:22:02Tae Kim:Um, but it feels like there's like a software product there. You can go the raffle route, um, where like, you know, you can collect entries and like pre-charge cards a dollar. And then if they win the raffle, I think like people like the idea of first come first serve and if you get in there you enter your card information you get past the age capture like you are rewarded with the the shoe and the rap the raffles i've i in talking to a bunch of people who buy sneakers and are a part of of that stuff they it just takes a lot of fun away from releases like that so try to keep it as pure as possible how are you thinking about nvidia earnings john john you you're you're laughing but marcus has a dedicated account

2:22:49Brian Chesky:where he just talks about mark yeah but he's been live with us while the earnings dropped does anyone have any numbers uh yes top line and bottom line eps of 187 revenue came at 81.6 billion double b in the stocks down 2.4 no it's popped back up maybe i don't know it's jumping around.

2:23:10Tae Kim:Just as Tay Kim predicted.

2:23:13Brian Chesky:Plan Truster over there. NVIDIA Earnings Live. Are there any IRL events that are small right now that you think have the seeds or are showing promise of becoming the next run club? We went through the Padel and Pickleball booms. I'm wondering if you're tracking anything that feels like could be a source of communities and cities, something outdoors, or I don't know, anything in that realm that's like run club shaped, that's really small right now, but shows like, oh, there's some deep interest there. That might go somewhere. I don't know where, but it's at least showing, popping up on your radar now.

2:23:57You know, I don't know if I'm like the best answer to answer that question. I, I'm not too sure I stick to running. Yeah. I see people go on group bike rides. Okay. Seem like a lot of fun. You know, you go on a 50 mile ride, you stop halfway, get a coffee and like a donut with your friends. And then you bike back and it's like, you know, you're exercising out in nature that I don't have a bike, so I can't participate. But if I were to do another group activity outside, it would probably be that.

2:24:25Brian Chesky:Jordy's been getting really into the LARPing, the live action role playing where you dress up in a full suit of armor and you just thrash on each other with swords and flails.

2:24:35Tae Kim:I haven't been getting into it personally, but I've been sending you videos. I just got to do it. I'll send you after this. There's a, yeah, John has a helmet. He's ready to LARP. There's this account where they have LARPing, pretty high skill LARPing going on where they're hitting each other. legitimately so hard i'm like you you're gonna give each other concussions but it seems like it's fair with this helmet on i think i've seen some of that stuff that might be a good maybe we get like a little tech version of that going how big's the team these days three people and then my sister's part time that's she uh she does the customer service and she's the goat but yeah three full-time that's amazing three full-time and uh all all in-house like in in office in new york uh how how like what is um how are you thinking about supply chain like you're making a lot you're making some stuff in new york from from what i recall but i imagine you're making it all over yeah a lot a lot of the performance stuff is made over in china um you know the shoes were indonesia that's a that's a sock new factory so that's not us jewelry italy i mean we're kind of spread out but um we have a lot of good manufacturing partners i would like to bring some more of those pieces here to the u.s i think it's just we're not super agile you know as a company so switching a factory overnight isn't really possible and there's a whole like resampling and and reproducing process that would need to go into that so we're focused on like catching up to the fashion calendar right now because right now we've been behind since day one.

2:26:24We've been behind and we kind of release when we can, but we're this year we will catch up to the calendar and be, you know, releasing products in the proper weather. Is that a double-edged sword? That'd be good.

2:26:38Tae Kim:It's like, hey, we have a winter coat in August. We've done it. I've done hoodies in the middle of August. Yeah.

2:26:45Brian Chesky:Wait, but is that a double-edged sword where like, if you're the only hoodie that's going on sale in, uh, in the summer, like at least it's like not a noisy time and you're not getting crowded out. And so maybe there's a benefit or silver lining. No, it feels bad. It feels bad. It feels bad. Yeah. Yeah. You don't want to do that. You don't want to do that. That's funny. Uh, when you say, uh, like the, the, the calendar, are you just talking about the seasons or are there specific moments where all the brands, you know, sort of coalesce around like this is the day or this is the week when like fall collections go on sale or like how precise are we being?

2:27:21Brian Chesky:Because I know that there's a whole fashion runway show circuit, but I'm not tapped in enough to know if there's a real cycle to it or a logic. Yeah. I don't think it's that crazy for like the performance stuff. I think you want to hit like spring, summer, fall, winter. And even that is a little more relaxed. Like you can kind of do it based off when people start training for certain things or how the weather is shifting. But, you know, there are times, uh, if you want to do stuff around the world marathon majors, then you kind of have to like prep for that. And a lot of those start, you know, November, October, November.

2:27:54Uh, so yeah, I mean, depending on what you want to hit from like an event standpoint, that kind of shifts, uh, shifts stuff. Cause it does get cooler then, but you're still releasing, you know, obviously tanks and stuff that you're running in to stay cool. But yeah, I mean, spring, summer, fall, winter for the most part is good enough.

2:28:11Tae Kim:Are you a nominative determinism guy?

2:28:14Brian Chesky:The chat thinks you're basically a millionaire. Marcus millionaire. Yeah, I don't know. I guess on paper. Yeah, there we go. It would be worth worth. Yeah, that's fantastic. Well, congratulations on all the progress.

2:28:30Tae Kim:Yeah, great to finally have you on the show. And yeah, just congrats to your team of three on accomplishing what would be difficult for even a team of 300. It's super impressive. Yeah. Thank you. I appreciate both of you. Thanks for having me on. Yeah, great to see you. Thanks for hopping on. Talk soon, dude. Talk soon, congrats again. Yeah!

2:28:50Brian Chesky:Jensen Wong talked about the quarter that NVIDIA just had. He said, the build-out of AI factories. Boo. The largest infrastructure expansion in human history. Yay! Is accelerating at extraordinary speed. Yay! Not a fan of the AI factory terminology, but good that there is progress being made. Agentic AI has arrived. He says, doing productive work. True. Generating real value. True. And scaling rapidly across companies and industries. Also true. Lots of good stuff. Nvidia net income, it rose to$42.96 billion. They almost hit$43 billion. Not too bad. A year earlier, they were doing just$18.8 billion in net income.

2:29:42Brian Chesky:Huge, huge increase. Really wild.

2:29:44Tae Kim:Really wild. Printing. Definition of printing.

2:29:47Brian Chesky:All good news. The stock is sort of up and down, basically flat. But NVIDIA revenue jumped 85 % to$81.62 billion from$44 billion last year, the company said. Shocking. Yeah, great stuff. In the timeline, you know who? I mean, Steve Wozniak crushed his commencement speech. We have to debate this to see, was he actually a good communicator? Is he setting the tone correctly? But we should still play the clip of Steve Wozniak, the co-founder of Apple at Grand Valley State University, because he talked about AI. And unlike Eric Schmidt, he did not get booed off stage. He actually got cheered for his comments.

2:30:36Tae Kim:Wait, this was, who was it, Tyler? Steve Wozniak? No, no, no. Shots fired. I'm a big fan of Steve Wozniak.

2:30:44Brian Chesky:I love the Woz. Shots fired. Let's play the clip from Grand Valley State University on Instagram here. Can we play this from the beginning? It might loop back, but he's doing bits. He's getting laughs. You all have AI. You all have AI. Actual intelligence. Oh, mic drop. Knee slapper. Hey, playing to the crowd. He knows the audience. He knows the audience. We're trying to figure out how to make a brain, software, hardware, synapse chips. And I was at a company where the engineers figured out how to make a brain. Takes nine months.

2:31:29Brian Chesky:Yeah, knee slapper. But he knows the audience. He's delivering the right thing. Is he AGI pilled? Is he super intelligence pilled? Probably not. But it is regardless. I think it's potentially the right framing for the crowd. It's knowing the audience. And that is a way to bridge to a broader conversation about AI, a broader conversation about how humans fit into a post-AGI world. I don't know. We'll have to go watch the full clip eventually.

2:31:59Tae Kim:Let's close it out with this video from Tyler that we can pull up.

2:32:04Brian Chesky:Okay.

2:32:04Tae Kim:What is this? This is the video I was referencing with Marcus. I'm very concerned about these gentlemen and what they're doing. Pull it up. Pull it up.

2:32:14Brian Chesky:What's happening?

2:32:16Tae Kim:Let's get to that. Like, this is... This is insane contact. I mean, the helmet is getting dented. I think this is brain damage. Not an issue.

2:32:27Brian Chesky:Skill issue. They're really hitting that, aren't they?

2:32:32Tae Kim:Run it back one more time. One more time. This is just wrong. They're taking it too far.

2:32:48Tae Kim:I don't see how you leave this without a concussion. But we'll try it out after we do. We have the gong ballot. Yeah.

2:33:02Brian Chesky:That seems like it would do some damage.

2:33:05Tae Kim:Thank you for tuning in with us today, folks. It has been the honor of our lifetimes to podcast with you today. It's been great. We hope you have an incredible evening.

2:33:17Brian Chesky:Leave us five stars on Apple Podcasts and Spotify. Sign up for the newsletter, tbpn.com. We'll see you tomorrow. Goodbye.