Is Something Big Happening?, Tai Lopez Charged in $122M Fraud, U.S. Adds 130K Jobs | Harley Finkelstein, Vlad Tenev, Matt Shumer, Jeff Lawson, Sam Blond, John Ferrara

13:12Harley Finkelstein:The question I have is like even five years ago, there was kind of a running joke where it felt like a lot of office jobs were just fake. And even when people kind of like started, that became part of the zeitgeist and people were talking about it. It didn't mean all the jobs went away. Some jobs have gone away. But again, headcounts, you know, even a lot of these companies have stayed relatively stable. We had a good jobs report, surprisingly.

13:40Vlad Tenev:Yeah, economists expected 65 ,000 jobs. The number came in at more than double, at 130 ,000 jobs. We'll see where it lands in terms of revenue.

13:48Harley Finkelstein:But yeah, the question is like, okay, the jobs have always been some email jobs. A lot of email jobs have been pretty fake. Yeah. And what happens if agents can do a lot of these jobs? Do the fake jobs remain? Yeah. And how fast? Overall, like I didn't, I was joking. I responded to the article and I said, TLDR, freak TF out and sell all your money immediately. People were asking, what do you sell your money for? That's the point. I was joking around. I thought Jeffrey said, it's depressing how widely shared and read this is. It's AI-generated word salad posted by someone with vested interest in spreading AI hype.

14:28Harley Finkelstein:AI is big, I guess, but its effect will be much more complicated than this essay, quote-unquote, essay implies. um so really really going really going hard yeah but again it felt like something like you know send this to 10 friends or you will be in the permanent underclass forever like kind of like

14:47Vlad Tenev:yeah it was a little bit of like a throwback to the the permanent underclass tyler what was your

14:51Jeff Lawson:interpretation of it yeah i think my main critique is like uh i think with covet it's like very destructive right yeah um you maybe you lose your job but like at the very least like you should you might get sick. Everything is bad. With AI, it's like, this article is like, yeah, people are going to lose their jobs. That's kind of what the gist is. You should be aware that your job might get automated. But AI is fundamentally a productive tool, right? So I imagine it's not going to cause a recession. GDP is not going to go down. It's going to go up. And so I think my base case is jobs actually get way more fake, generally.

15:28Jeff Lawson:Now it's like, I I mean, there's probably like hundreds of people on X in their entire job. Like their salary is just posting like basically fake AI news and they get paid by, it's not even like sponsored deals. It's like they're just getting paid by X directly. Like that's like completely fake job. But like that's going to go up. There's going to be more of this.

15:46Vlad Tenev:Yeah, yeah, yeah. I mean, the jobs have been getting faker ever since we stopped tilling the fields, correct? Isn't that the, I mean, that was the original Sam Altman formulation was like, if you explained to someone 200 years ago, a bunch of people will be sitting around talking about the news and they'll be filmed. It'll go over the internet. It's like, it makes no sense. And yet here we are running a business, doing ads for Okta. Okta helps you assign every AI agent a trusted identity so you get the power of AI without the risk. Secure every agent, secure any agent. Should we keep touring the takes, the various takes on this article?

16:25Harley Finkelstein:Stay sassy says, I'm exhausted by the OMG. This changes everything AI posts to this godforsaken site that I'm planning to take my doom-scrolling talents back to Instagram. I believe in AI. I use it every day for increasingly non-trivial tasks. My team spends a massive amount of money on it. Vendors, tokens, acquisition, and I have pitched AI products that we built on stage. I believe things are changing fast. I don't care to hear some sweaty, overly online dudes breathless panting over the latest model anymore. I don't need to know what's changed in the last 45 seconds in AI. I don't need some dork with a weird haircut writing condescending posts like he was the first person to get the last Harry Potter book and wants to drop edgy hints about how Dumbledore dies at the end.

17:06Harley Finkelstein:I'd rather miss the latest AI news than just be poor. Tell me when the singularity is done so I can pause Singles Inferno and I'll tune back into X then. Logging off. Apparently states he works at the NASDAQ.

17:19Vlad Tenev:Apparently. You see, Robert Scoble, I'm building an answer to exactly this problem. Come back in a couple weeks. And he says, you're building Ambien?

17:28Harley Finkelstein:Nelson says, okay, but this one really changes anything, everything. Please, I promise. Please.

17:33Vlad Tenev:Yeah, people are having fun. Let me tell you about MongoDB. Choose a database built for flexibility and scale with best-in-class embedding models and re-rankers. MongoDB has what you need to build what's next. Logan Bartlett was identifying the remarkable, crazy times we are in. Says, feels like an Anon can just tweet. Just vibe-coded Databricks with a screenshot, and the SaaS market will fall 5%.

18:01Harley Finkelstein:Cephalopod. Yeah, I mean, if your job is building a wraparound chat GPT like this guy, then it's not surprising that AI can automate that. Yeah, it's tricky.

18:12Vlad Tenev:What did Joe Weisenthal have to say?

18:13Harley Finkelstein:Joe, with a funny post, he says, seeing a lot of posts from software engineers that are like, AI is devouring my job, and soon it will happen to everyone. And it's like, maybe, but just because you have an easy job doesn't mean everyone else has. Such good bait. Incredible bait.

18:30Vlad Tenev:Master. Incredible. Solid bait, Joe.

18:33Harley Finkelstein:If anyone falls for this, you really deserve it.

18:36Vlad Tenev:Yes. and software engineering isn't an easy job. And Joe says, how hard can it be if it's the first thing a computer can do? That's so good. That's funny.

18:48Harley Finkelstein:Buko Capital quoted it and said a great comment from a friend who's coding with these AI tools around the clock. For the hype you read online, it's just really difficult to tell the difference between a genuine breakthrough propaganda to justify valuations and LLM psychosis. yeah matt schumer's article must go incredibly hard if you have llm psychosis i was thinking

19:10Vlad Tenev:more about uh claude with ads the vibe coded drop we launched on the super bowl that was an idea that we had friday morning and after the show on friday we sat down we talked about it with tyler and said like is this feasible can we get a functional website up it's a clone of the chat of the Claude app interface, same color, style guides, fonts, all this stuff. Coding that by hand feels like a week-long project. I don't know how long it would take normally, but it would be harder, and it was clearly accelerated. And I was thinking about if we didn't have coding agents, what would we have done?

19:55Vlad Tenev:We could have paid a dev shop 10k to build something like that, but we probably just wouldn't have done it at all right disagree okay what what do you think

20:05Harley Finkelstein:how would it have played out i was doing kind of drops yeah stunts like that before coding agents were a thing yeah and you could just work hard and do just grind like dylan and i you know we we did we did one back in the day with party round called helpful vcs this was during you know kind of this was i think like may or june yeah of 2021 so it was before the crazy nft boom had really started but crypto punks were popular and uh we made a collection of like 400 nfts of uh various vcs and we just put them on a website and said if you don't repost this site in the next four hours we're going to auction off your nft yeah and uh and so you had like 400 vcs reposted it very quickly.

20:54Harley Finkelstein:And that was an example of like a funny idea, like Claude with ads, where we just had the idea, we worked on it for a few days, shipped it, and that was it. So this kind of thing was... How long was it? A couple days? It was definitely no more than five business days.

21:10Vlad Tenev:We got this done in like one day. Friday to Sunday, Tyler was still shipping. Yeah, what do you think?

21:16Jeff Lawson:Obviously, I'm extremely bullish on these tools, and they're incredible. But it's still like, I was spent almost all my Saturday, like building now. It's not like, it's like, we get it. You took one for the team.

21:27Harley Finkelstein:You, you, you sacrifice your weekend. I feel like, like these tools are like accelerating super fast. Employee of the month. Employee of the month.

21:33Jeff Lawson:Get it. You deserve it. You know, they're not so incredible that like, it can't like literally one shot it in, in five minutes. You can't just tell Claude Code build exact replica. Yeah. And it's not, it can't actually like do that yet. Yeah.

21:44Vlad Tenev:Without you, it would not have happened because I was busy on Saturday with a bunch of different, you know, a friend's birthday party and stuff. And I wasn't able to lock in even if I understood the tools as well as Tyler does. And so it just feels like...

22:00Harley Finkelstein:Yeah, and I just like comparing it to the... It's an example of like NetNew. Yeah, comparing it to the helpful VCs drop, like we had to create original artwork for 400 VCs. Yeah. That you would have actually, that would have been much easier with Gen.AI. Totally. So that was a factor too. But you're talking about... Anyway.

22:19Vlad Tenev:Yeah, I'm just wondering like, you know, there's the Jevons paradox. We go back to Jevons paradox here. Is like, is this an example of intelligence getting cheaper to meter and then more ideas flourishing, more projects being built, more things happening versus something that we would have done anyway, and it's more just like a cost savings thing? I don't know. It goes back and forth. But people are debating and people are enjoying the AGI. Megan Fritz says, bro, you got to listen. AGI is here. It's smarter than me. It's smarter than Neil deGrasse Tyson, bro. There is literally no escaping it.

22:55Vlad Tenev:They're putting AI in your shoes. They're going to put AI in your cereal, bro. Bro, listen, the only way to survive this is to buy a premium AI subscription. Bro, I swear, I hardly make a commission. Please, bro, buy it.

23:06Harley Finkelstein:That was a funny thing. What is the call to action?

23:11Vlad Tenev:I actually missed that part. It's like buy a subscription to OpenAI or to his app. Because if this is content marketing, like genius.

23:20Harley Finkelstein:No, he just said sign up for the paid version of Claude or ChatGPT.

23:24Vlad Tenev:Okay, yeah. Yeah, and I mean, anyone who's saying that like this is like SpawnCon for the AI labs, like that's ridiculous. Like that's not what's going on here. This all feels very genuine. It's just how nuanced is it? So yeah, start using AI seriously. It's not just a search engine. Sign up for the paid version of Claude or ChatGPT. Like you don't post that if you're for economic gain. So I don't know. Anyway, Graphite, code review for the age of AI. Graphite helps teams on GitHub shift higher quality software faster. Delicious Tacos, favorite account, says moratorium on AI CEOs using AI to write long-winded articles on how scared they are of AI.

24:04Vlad Tenev:Very true. There's a lot. But I wonder, this didn't trigger my, this is AI writ slop, you know, vibes. Maybe there was AI involved somehow, but it felt like it was sort of just, I don't know, very readable. It didn't throw me off. Anything else you want to cover on this, or should we move on to a different story? Because there's a lot going on in the news today. We can move on. Okay. I want to talk about Tai Lopez. Tai Lopez, the retail investor, retail rival, retail revival vow burned investors. The Wall Street Journal has a deep dive on Tai Lopez. He pitched Radio Shack Pier 1 turnarounds. Now the SEC alleges a Ponzi scheme.

24:48Vlad Tenev:Tai Lopez was living proof of the American dream was still attainable for young men willing to bet on themselves. The entrepreneur hosted parties at a mansion in Beverly Hills and boasted about the black Lamborghini in his garage. The college dropout had made a name for himself on social media by offering get-rich-quick advice and self-help courses. He also had a book subscription company. You would pay$30 a month and he would send you just a box of books, which was like not that scammy, like kind of a funny, cool thing. I mean, the books were like very like. He was automating book buying.

25:23Harley Finkelstein:Basically. A lot of people are popping onto Amazon to buy books they don't read. He's like, why don't we just set this up on a subscription and save you the time?

25:30Vlad Tenev:Yeah, he had this whole thing about knowledge and how like the original pitch for here in my garage was like, look at all my supercars. That grabs your attention. He's like, but you know, what's more important turning around a bunch of airport nonfiction. And it was like, you know, a bunch of these like books behind him. And he was like, this book wall is more important than anything. Um, where, where is the actual article in the timeline? Here it is the wall street journal. Uh, so the college dropout had made a name for himself on social media by offering get rich, quick advice and self-help courses.

26:05Vlad Tenev:He was one of the first people to really understand the economics of YouTube ads, that when he went live with his YouTube ad campaign, he had the LTV to CAC so dialed that he was able to spin it up and just spend millions and millions of dollars on YouTube ads. And I don't know if he owned the Ferraris, rented them, but like it clearly worked. It was like the first real breakout, not influencer campaign, but direct YouTube ad network campaign. Very broad, didn't need to be super hyper-targeted or anything like that, but it clearly worked. So he urged his followers to invest in a new company he had started that was scooping up distressed retailers on the cheap Radio Shack, Pier One Imports, Dress Barn, Modell Sporting Goods, and Linens and Things, with a promise to turn them into e-commerce winners.

26:56Vlad Tenev:That was always a weird, weird, weird story.

27:00Harley Finkelstein:Crazy pitch.

27:01Vlad Tenev:It was a crazy pitch.

27:03Harley Finkelstein:And it's crazy how quickly the brand recognition drops off. RadioShack. All right, I know that one. Pier 1 Imports. I know that one. Dress Barn. Do not know that one. Modell Sporting Goods. Do not know that one. Linens and Things. Do not know that one.

27:18Vlad Tenev:At least Linens and Things, I can guess what they sell. I don't know what Pier 1 sells. Pier 1 Imports?

27:26Harley Finkelstein:And it's crazy because almost every single item that these retailers sell sells on Amazon and Walmart.com at extremely thin margins.

27:37Vlad Tenev:Yeah. I mean, it's really like a referendum on aggregation theory. And if you're not aggregating customers, you are just getting...

27:46Harley Finkelstein:Maybe that was a deeper level of the pitch. What was that? One customer database. Yeah. Leading retailer brand.

27:54Vlad Tenev:That was sort of it. Yeah, we have one unified e-commerce front end, but a little late to be going after. I mean, there were some successful come-from-behind stories. What was the company that sold to Walmart for a billion dollars or a couple billion dollars? That one did pretty well. I forget what that was called. But Walmart made an acquisition of an e-commerce infrastructure provider that did have an e-commerce front end, but it never reached escape velocity, but it was like the perfect plug-in add-on to Walmart's infrastructure. And now Walmart's a trillion dollar company, I think. It might be a little bit off today, but we'll see.

28:30Vlad Tenev:So Sean Murphy is an example of someone here. He saw Lopez's posts on his Facebook and Instagram feeds and was drawn in by the brand names and the promise of 20 % returns. Always odd to pitch a promised return, but I think - Yeah, and this is called first

28:47Harley Finkelstein:kind of major error, having a bad business idea, like buying old retailers and trying to revive them, is not illegal, but general solicitation is a no-no.

28:59Vlad Tenev:And we'll get into specifically what he was promising and then what he was delivered and the gap between that

29:05Harley Finkelstein:is the problem. And you see some startup founders try to get around this by generally signaling on X that they're amazing. But I feel like the industry does a pretty good job of not doing this.

29:18Vlad Tenev:Totally, totally. Really quickly, Phantom Cash, fund your wallet without exchanges or middlemen and spend with the Phantom Card. So he invested, Sean Murphy, invested$175 ,000 into the company called Retail Commerce Ventures, e-commerce ventures, REV, and related Lopez Ventures. All told, Lopez raised more than $230 million from hundreds of mostly small investors. You know, we talk about these big funding rounds and we're like, oh, how did this person get this much money? And we hear about the SPVs and the layered SPVs and all the bringing retail into the private markets, but he really did it.

29:56Vlad Tenev:The power, a lot of people have seen the Tai Lopez takedowns and sort of don't have a ton of respect for him in the business community, but he really does have a serious audience of people that have money that they need to invest. So one way or another, and if they get caught in the wrong place, they might write a check that they wind up going on to regret. So Murphy is another example. He's an Illinois grandfather. He got a$10 ,000 Pier 1 gift card and monthly checks of about$1 ,000 for two years. What he didn't know was that his payouts allegedly were funded mostly by other investors. Second mistake.

30:35Vlad Tenev:Second mistake. These guys lied, he said. They conspired. They led people on. Poor Murphy here, Sean Murphy. The payments stopped abruptly in late 2022, and the struggling retailers were then taken over by some of the company's creditors.

30:50Harley Finkelstein:So he had the$230 million of equity, and then he also levered up.

30:55Vlad Tenev:Had that, yeah. And so the creditors got control of the assets. Last September, the SEC filed a civil lawsuit against Lopez and his partners, accusing them of running a Ponzi scheme, misleading investors, and misappropriating$16.1 million. The FBI has been contacting investors as part of a criminal investigation into what happened. According to people familiar, no charges have been filed yet. So I'm still proven guilty here, but the Wall Street Journal has some good data here. Lopez and his lawyer, Marty Reddy, didn't respond to requests for comment. Court filings indicate that lawyers for Lopez and other defendants are in settlement talks.

31:29Vlad Tenev:So on his podcast, The Tai Lopez Show, and in his social media posts, Lopez, who's 48 years old now, hasn't addressed the company's collapse and the heavy losses incurred by his investors. The day the SEC filed suit, he posted on X, never doom. No matter how horrible the situation, don't ever think you're doomed unless you are dead. All defeat is psychological. Was he talking to himself there? I don't know.

31:51Harley Finkelstein:Yeah, I guess. Staying in character. I just can't believe how much the check size is for some of the people that he's bringing in. Nelson Rowe says, Lopez seemed credible. an 82-year-old retired real estate broker who invested$300 ,000. The story sounded so good. They had all these brands. Yeah, Matt, you can imagine somebody like this goes offline for 10 years and then just logs onto the internet and is like, wait, this guy has Radio Shack, Year One Imports, Linens and Goods. Yeah, Linens and Things. Linens and Things. I mean, this seems like a winner. So yeah, quick Google search could have helped to avoid this.

32:34I mean, I feel like it's under-discussed how Tai Lopez effectively drove an entire, seemingly a generation of young men to aspire to build a personal brand.

32:49Vlad Tenev:Sure.

32:49Harley Finkelstein:And he, Tai Lopez's greatest contribution, which I would say is not very great, is he inspired tens of thousands of young people to try to make their money in info products, which is like still perpetuating itself. because it's sort of like a, it's kind of like a virus because somebody starts doing it. They get people down their funnel. The people get down their funnel. They realize like, Hey, like this guy's actually making money with courses. I should learn from him how to do courses. And it just kind of creates this web of people selling, um, info products and, and, you know, flaunting, uh, uh, bunch of, uh, of their lifestyle.

33:31So yeah.

33:32Vlad Tenev:Yeah. Anyways, there's so many layers. The, you know the course that teaches you e-commerce or drop shipping and then the course that teaches you to sell courses on e-commerce and we need to do the final boss the course that teaches you how to sell courses about how to sell courses about how to sell courses about how to sell e-commerce or something like that anyway before we move on let me tell you about restream one live stream 30 plus destinations if you want to multi-stream go to restream.com so uh in podcast lopez has described growing up with his mother in a mobile home in California while his father was in prison for selling cocaine.

34:06Vlad Tenev:After high school, he said he spent several years working on farms, including with the Amish in Lancaster, Pennsylvania. He had about$47 in his bank account and was living in a mobile home in Raleigh, North Carolina. He said when on the advice of his uncle, he started looking for a sales job. He landed in an insurance company where he cold called clients. Lopez has said that his breakthrough came out when he figured out how to write snappy copy for Google Ads, which generated quality leads that produced substantial sales commissions for an insurance company and later at a financial services company.

34:37Vlad Tenev:He found it. He went viral in 2015 with a series of YouTube videos titled Here in My Garage.

34:44Harley Finkelstein:So crazy that that was 2015 in my head. This was like 2005. Completely agree.

34:50Vlad Tenev:I completely agree. I can't believe it's 2015. It feels much older. It feels the first ad I ever saw on YouTube. I don't know. Yeah, it is retro. In the first, Lopez, wearing a crew neck shirt, glasses, and a scruffy beard, stands in his garage in front of a black Lamborghini. What he likes a lot more than material things, he tells viewers, is knowledge. That was the famous line, knowledge. The camera swings to the other side of the garage. In fact, he says, I'm a lot more proud of these seven new bookshelves that I had to get installed to hold the 2 ,000 new books that I bought. That video spawned a slew of parodies.

35:30Vlad Tenev:Around the same time, wait, around the same time, 2015, Tai Lopez launches 67 Steps. Six, seven steps? He did this in 2015. He created the six, seven meme, apparently. This is crazy. 67 Steps, an online course designed to help people find what he calls the good life by focusing on health, wealth love and happiness lopez ran conferences where he shared what he said were the secrets for getting rich uh 67 steps is fascinating because it's this odd number we were talking to brandon about this how you know 19 details you missed in the super bowl halftime show like the odd number is like oh okay that's like feasible there's also a little bit of sticker thing if i say uh you know 99 cents that's different than a dollar right uh i was gonna say so so in that

36:20Jeff Lawson:video when he pans to the bookshelf. One of the books is called 1001 Books. So it really has, he has 3001 books.

36:26Vlad Tenev:There we go. There we go. Books inside of books, layered.

36:29Harley Finkelstein:I guess where Mosey took this to the next level where his new info product, isn't he selling like tens of thousands of books at the same time?

36:38Vlad Tenev:I believe there was a checkout purchase that I saw a screenshot of was that you could buy like a box of copies of the book or something. I think that's very good for ranking on the New York Times bestseller list. And I believe he, didn't he set a world record for most books sold or something like that? Wild. So, you know, all sorts of different book marketing strategies out there. Our biggest mistake is almost always thinking too small, he said in a social media post. He hosted influencer-fueled parties at a Beverly Hills mansion he rented with a pool and basketball court. In one 2015 video, billionaire Mark Cuban visited Lopez at the house.

37:14Vlad Tenev:The two shot hoops and talked life lessons for those who want to be an entrepreneur what's the best advice lopez asked find something you love to do be great at it and sell it cuban responded honestly good advice um icky guy there's been a bunch of different ways to say that from very high i should

37:32Harley Finkelstein:have turned that sentence into a course he should have put that sentence behind a paper this he's like this is such good advice i can't i can't just i gotta charge well that's the yeah that's

37:41Vlad Tenev:A lot of the courses, it is just like it's already been distilled into a 60 second reel. You pay for the course and you're just getting that 60 seconds repeated 25 times. Right. It's rough. So let's go into the shopping spree. Did you ever buy a course? Yes.

37:58Harley Finkelstein:That actually changed your life? Yes.

38:00Vlad Tenev:Yes. Yes, I did. I bought a course on Houdini, which is a motion graphics tool used in Hollywood. if you've watched Game of Thrones and you see all the horses galloping. But here's the thing.

38:13Harley Finkelstein:What was the course title? Was it like How to Get Rich Quick with Houdini?

38:16Vlad Tenev:No, it was like using Houdini in advanced VFX pipelines. So you weren't deep.

38:25Harley Finkelstein:The course creator was not driving a Lamborghini. No.

38:29Vlad Tenev:No, the course creator was like I worked on Westworld. You want to learn how they did Westworld graphics? And I'm like, absolutely. I would love to pay you a thousand dollars to teach me how to do that that's really cool and I want to learn that tool I I I paid for a number of uh of courses related to content creation cinema 4d after effects like any like skip you and you see me like edit something you know all of that is is I did I did needed to learn it I watched a lot of youtube videos for free I was also paying for stuff but

38:57Harley Finkelstein:none of them were about getting really quick you paid to learn how to fish yeah now you're feeding yourself for a lifetime exactly because i mean i mean courses are good if it's a narrow skill yeah yeah i definitely bought at least one workout course when i was probably like 18 or 19 yep and i doubt even though it was like effectively advertising a bro split yeah just learn from any arnold yeah video any quick google search certainly can get it from chat gbt it was opinionated and I just followed it and it was well worth the money, even though the information was like, there's something about if you pay for something, you're much more likely to take it seriously and actually try to follow it.

39:40Harley Finkelstein:And so I won't say, even though we're kind of poking fun here, I don't think all information products are bad. No, I completely agree.

39:49Vlad Tenev:P90X, that was the workout course that was going viral when I was in college.

39:54Harley Finkelstein:The ones I do think are really, really, really bad are when they advertise trading courses to younger audiences. Yeah. Because it's like, okay, you have$300 in your bank account. Yeah. I'm sorry. You're not going to change your life. You should learn anything else.

40:16Vlad Tenev:The crazy thing is that there is a reasonable trading course, which would be like buy ETFs, right? Like there is good financial advice that you could give someone to trade, right? And it would be basically like, don't trade, like buy and hold, right? Dollar cost average in, invest a little bit every month.

40:34Harley Finkelstein:Work at an investment firm.

40:35Vlad Tenev:Yeah, or go pro and go work at Jane Street or Citadel if you have the chops.

40:39Harley Finkelstein:Intern at a wealth management firm. Sure.

40:41Vlad Tenev:the flip side is like a lot of the courses, they weren't even, they weren't even teaching you how to, okay, well, there's this big AI trend. Maybe you want to increase exposure to Nvidia, Google, Apple, you know, the big companies like that would be maybe a little financial advice, but totally reasonable. They were like foreign exchange, like, like Forex courses. So you were trading, but it was like essentially on top of a random number generator. Like it's like the most complex, like understanding the trade flows for proper Forex trading is not something you can just like pick up on a weekend.

41:16Vlad Tenev:Like that is a life's work as opposed to just being like, oh, well, like I'm a kid. I'm using Uber all the time. Maybe I should buy some Uber shares. Like that's a much more reasonable philosophy around financial investing, in my opinion, than, okay, well, the candlestick went up and it's a camel pattern. So it's got to go up like chartology. Yeah. Yeah, chartology or something that's that called. Anyway, Vibe.co, where D2C brands, B2B startups, and AI companies advertise on streaming TV. Pick channels, target audiences, and measure sales just like on Meta.

41:45Harley Finkelstein:Lopez teamed up with Alex Mayer, a mechanical engineer who had co-founded an online dating app that sold for$255 million. Not bad. In 2019, they formed Miami-based retail e-commerce ventures to snap up distressed retail brands. Lopez was CEO and Mayer was president. Lopez's younger cousin was chief operating officer. According to the SEC complaint, she previously worked as a substitute preschool teacher, a radio station promoter, and as an assistant to the online educational company that Lopez had started. The spokesperson for Merit said he believed in Rev's business models, put over$5 million of his own money into the company, and suffered substantial losses when the business was hit with the so-called severe post-pandemic macroeconomic headwinds.

42:29Harley Finkelstein:Birken Road is represented by blah, blah, blah. Rev's first notable acquisition came in 2019 when it paid$5 million for the e-commerce rights to the Dress Barn name. Has anyone in this room heard of Dress Barn?

42:46Vlad Tenev:Crickets. Where's the crickets? Where's the crickets?

42:49Harley Finkelstein:That's a good one. Team crickets. Crickets sound effects. We've got to add it. After the COVID pandemic hit, Rev went on a shopping spree. In July 2020, it purchased home furnishing retailer Pier 1 Imports out of bankruptcy for about$31 million, followed later that year by two more bankrupt chains, sporting goods retailer Models for$3.6 million. Has anyone heard of Models? Yes? No? No. Oh, no. And discounter Steinmart. Has anyone heard of Steinmart for$6 million? And we got another no. I feel like this is hack. We got people from all over the country, so I think this is somewhat representative of the average American.

43:32Harley Finkelstein:And, of course, Radio Shack undisclosed. I wonder how much they got Radio Shack for. I have no idea. Okay.

43:41Vlad Tenev:There's an interesting tidbit here about Alex Mayer. I had to hunt it down. I'm sorry. I was distracted. First, I'm going to tell everyone about LabelBox. Reinforcement learning environments, voice robotics, evals, and expert human data. LabelBox is the data factory behind the world's leading AI team. Tell me. So Alex Mayer is controversially included in this Wall Street Journal article about this potentially disastrous deal. Jessica Livingston, founder of Y Combinator, is the author of Founders at Work, Stories of Startups Early Days. It's a fascinating book with interviews. It's basically a whole bunch of podcast type interviews combined.

44:20Vlad Tenev:So 37 Signals, Hotmail, Lotus, PayPal. There's the interviews in here are remarkable. Steve Wozniak, Katrina Fake from Flickr, Max Levchin at PayPal. This Founders at Work template, if you see, it has this like, we should pull it up, but it's like this very iconic book with just a bunch of names on it, and then in orange Founders at Work, and then Jessica Livingston wrote it. It turned into a series. There's coders at work about software engineers, and there's venture capitalists at work. And Venture Capitalists at Work is a different book, not written by Jessica Livingston, but Alex Mayer is in it because he founded Zeus, which was a dating site.

44:58Vlad Tenev:And it's just like a funny, like fun fact that he's in this like book that is sort of tangentially like extremely legit. Anyway, we can move on.

45:09Harley Finkelstein:During weekly Zoom calls for investors, Lopez and Mayer pitch new investment opportunities by touting the success of earlier rev deals, according to former employees. At his self-help conferences, Lopez would tell audiences they could share in his success by investing in rep brands. Joseph Bertau, a 44-year-old who works in construction sales, went to an investor meeting at a Los Angeles hotel. Bertau recalled the message, give us as much money as you can. These deals are popping off and we can't get them fast enough. He invested about$350 ,000.

45:40Vlad Tenev:So much money. I don't know. I mean, maybe people are -

45:43Harley Finkelstein:At the same time, when I look back at my first angel investments, which granted I was like 22, I thought that I was seeing good enough opportunities that I would happily invest half of my liquid network. Half?

46:03Vlad Tenev:You were going to say 10%. I mean, it wasn't that much at the time. I was building my first company.

46:07Harley Finkelstein:I was very young. I was down to take a lot of risk. I was like, hey, this is...

46:12Vlad Tenev:But it's got to be different for these folks because this is clearly like retirement money.

46:15Harley Finkelstein:Yeah, but part of it is when you start seeing... Yeah. When you start seeing private deals for the first time.

46:22Vlad Tenev:It feels special.

46:23Harley Finkelstein:It feels special. You look at the chart. Yeah. And, you know, and in hindsight, I'm like most of the worst, like there's certainly some people that have come on the show. Justin Maris is a good example. Like you look at the first like three deals Justin did and they were all like at least two were unicorns. Like he's, he's insane. But for me, I look at the worst investments I've ever made were probably in the first five. Yeah. And so - People just don't realize how many companies are out there,

46:52Vlad Tenev:how many private companies are out there. You see this one deal, you talk to this one founder, and you're like, this is everything. And some of the early angel investments that I made that didn't go well were like, okay, great team coming out of a great university on a super interesting category. And what I just didn't realize was that they were coming out of Waterloo, but there was a team at MIT that was six months ahead, and there was a team at Stanford that was nine months ahead. And Sequoia had already backed this one, but they hadn't announced. And then Andreessen had backed that one. And so I was in the one that didn't have any of the backing and was just going to be third in the category, which was just going to create this power law difference.

47:33Vlad Tenev:And if you don't have full coverage, you don't even know that those deals are happening. And so you wind up, even if you get the idea correct and the team is good, you can still wind up in a really rough day.

47:44Harley Finkelstein:And the other thing here is in one peer one pitch deck, investors were told they would receive 200 ,000 after their first year if they invested 1 million, which again is 20 % return, which is insane. If somebody tells you they're going to do something like that.

48:01Vlad Tenev:Any sort of guarantee return is usually a huge red flag. Anyways. Before we move on, let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds, online, in store, on mobile, on social, on marketplaces and now with AI agents.

48:16Harley Finkelstein:Anyways, I think we can move on. This story is still unfolding. It is very sad. And I hope that the investors that were duped can recoup as much of their investment as possible. Indeed. Getting into the jobs report. Jobs report.

48:35Vlad Tenev:Big beat. 130 ,000 jobs. Economists expected 65 ,000 jobs and a 4.4 % unemployment rate. Bloomberg has a live blog here breaking it all down. There's some interesting things. So traders pushed Fed rate cut expectations to July and revisions trimmed the U.S. 2025 payroll gain to 181 ,000. From Bloomberg.

49:00Harley Finkelstein:It's interesting. I think everyone, there were kind of delays with the report, right? Everyone who was expecting this to be absolutely abysmal.

49:09Vlad Tenev:Yeah.

49:10Harley Finkelstein:And now I think the reaction is, can we trust the data, right? Yeah. There's just been so much kind of like FUD thrown around the data and the job market in general that it's hard to believe your own eyes.

49:24Vlad Tenev:I was debating with a friend about, he was sending me some economic data and he was saying like, like AI is the only thing holding up the economy. And I was like, I don't know that that's the right phrase. I almost prefer AI is holding up the stock market, but healthcare is holding up the economy because that's where we're seeing job gains. And that's where like the real economy, like there's always this disconnect between what's happening in the markets. That's very forward looking. You're valuing things based on, you know, 2050 cashflow and being like, yeah, I'll pay for that right now because this company is gonna be around.

49:59Vlad Tenev:You're buying a Google bond that doesn't mature for a hundred years, right? And then there's like the on the ground, like, do people have jobs or not? And the question of like, do people have jobs or not is much more in the health care and services sector. And so Bloomberg has been breaking it down. U.S. payrolls rose in January by the most in more than a year. And the unemployment rate unexpectedly fell, suggesting the labor market continue to stabilize at the start of 2026. And now there's going to be some debate over, you know, how real is this? Will it be revised down? But there are other economic statistics that we can look at.

50:31Vlad Tenev:We're having Harley from Shopify on the show, and we'll ask him about the health of the consumer because he sees a lot of commerce data. And if people are even just worried about losing their jobs, usually they're pulling back on spending, discretionary spending.

50:44Harley Finkelstein:Yeah, and revisions came out today as well, showed job growth was almost$900 ,000 lower in the 12 months through March 2025 than it initially reported. So again, we announced these big numbers, and then we kind of move on and then revise them. Yeah.

51:01Vlad Tenev:This is pretty big, though. You'd be surprised if this flipped negative. Maybe it goes back to 65 or half as much, but it still seems like there is job growth broadly. This seems at least directionally correct. Employers added 130 ,000 jobs last month, and the unemployment rate declined to 4.3%, according to the BLS. That followed revisions to the prior year, which showed market slowdown in hiring. Jobs gains averaged 15 ,000 a month last year, down from the initially reported 49 ,000 pace.

51:37Harley Finkelstein:Just a bit off.

51:40Vlad Tenev:The report suggests the labor market is finding its footing after a year marked by rising unemployment and minimal hiring, while economists expected hiring to remain generally sluggish in 2026. More clarity around the impact of President Donald Trump's economic policies and lower borrowing costs could encourage some employers to boost headcount. The January data reinforces Federal Reserve's official inclination to keep interest rates on hold now. Yeah, I mean, there is this interesting tension, right, between even if the job numbers are inflated, that puts pressure on the Fed to not cut rates, which is another stated objective of the administration.

52:13Vlad Tenev:So you have these like two things. Like if you're pushing for, hey, let's count every possible job that could potentially fit in this category, then it's going to be harder to make the case that you should cut rates. In leaving rates unchanged last month, Chair Jerome Powell cited signs of steadying in the job market. So Jerome Powell saw this as well. Coming off a hiring recession in 2026, this is welcome news, said Heather Long, Chief Economist of the Navy Federal Credit Union. I think Fed Chair Powell was right. The labor market appears to be stabilizing. So Trump praised the numbers in a social media post Wednesday, said that the U.S.

52:52Vlad Tenev:should have the lowest interest rates globally, adding to previous calls for rate reductions. Great job numbers, far greater than expected, he wrote, in all caps. With the release of each January employment report, BLS benchmarks payrolls to a more accurate but slightly less timely series called the Quarterly Census of Employment and Wages, that data is based on state unemployment insurance tax records and covers most U.S. jobs. That adjustment showed job growth was nearly 900 ,000 lower in the 12 months through March than initially reported. The figure roughly aligned with that of the BLR.

53:26Harley Finkelstein:Overall, I think the team that had to revise last year down by almost a million now coming out and saying everything's great and we crushed it. It doesn't give you, I don't have any comp, like a smart person might think like, okay, a year from now, we're going to figure out that none of this was real.

53:48Vlad Tenev:Maybe, yeah. I mean, the market's not moving on it. The Dow Jones is down 0.1%. The S &P 500 is up 0.1%. The NASDAQ's completely flat, I guess, technically up 0.01%.

54:02Harley Finkelstein:Comments on Joe's post says, and you take these numbers at face value, question mark. Joe, I know you don't believe these numbers. Oh, well. Almost every single person responding. Anyways. Oh, well.

54:19Vlad Tenev:What did Kalshi have to say? Jobs numbers this month. This is for February. This is for February.

54:23Harley Finkelstein:Most people are expecting, you know, more than 60K.

54:27Vlad Tenev:The current forecast is 68 ,000, and it jumped in the last couple days on this.

54:36Harley Finkelstein:Well, you know what is real? What? ByteDance, C-Dance, 3.0. The model's very good.

54:42Vlad Tenev:According to Ethan Mollick.

54:44Harley Finkelstein:I wish we could have asked Chris from Runway about C-Dance yesterday and how he's thinking about competition from ByteDance, but we can next time. Let's play this video. This is a nature documentary about an otter flying an airplane, which, if you ask me, is worth the two trillion of CapEx.

55:05Vlad Tenev:It is photoreal.

55:06Sam Blond:In a world of marvels, some creatures defy all expectations. This is the incredible story of the pilot otter.

55:15Vlad Tenev:That's cute. I like that. 12 seconds. Longer than most, eight seconds. and someone in the replies shared a Grok version of this that it just has a little bit more, I don't even know how to describe it. It's a little bit more blurry maybe, this video. I don't know if you can see it up close, but it's close, but it's not as real. What model made this? This is Grok.

55:41Jeff Lawson:Okay. The audio is also much worse. I think I watched this. Yeah.

55:45Matt Shumer:In the skies above Alaska, a river otter pilots its plane.

55:49Harley Finkelstein:Yeah, you instantly clock the audio. Yeah, you don't on a Seadance.

55:54Vlad Tenev:On Seadance, it sounds for sure real.

55:57Harley Finkelstein:Ottermaxing. Lucas is firing shots at actors. Okay. But we can pull this up. Let's see. Let's get some audio.

56:07Sam Blond:You killed Jeffrey Epstein, you animal! Oh my god. He was a good man! He knew too much about our Russia operations.

56:16Harley Finkelstein:he had to die and now you die too insane insane audio but but the uh the video the video look i mean i can't you you've watched a handful of movies i have more than me does this look like

56:32Vlad Tenev:it could be in a film it's close it's pretty close what are you missing I mean just the length of the shot it it's not it it's not fully like modern in the sense of the way the way Hollywood shoots an action scene like this it's either like way more cuts and just way more like detail shots like cutting in and out or they'll try and turn it into more of like a cinematic set piece and have like a drone shot or sweeping shot. Like it's very rare that you're just sort of sitting there watching that in most of like the most modern movies.

57:12Harley Finkelstein:But if you were sitting there prompting and splicing it together from different angles, you could.

57:19Vlad Tenev:For sure. What do you think?

57:20Jeff Lawson:Yeah, I think I do want if there's like an interesting comparison to the kind of CloudBot stuff where like I think one of my main takeaways from the CloudBot thing was that it's going to be hard for big labs to kind of replicate that. just because of like, you can't get the WhatsApp integration, like stuff like this. Where I think with the Chinese models, the image models, the video models, they're very clearly like training on stuff they're not supposed to be training on. Like the Otter flying, like that's David Attenborough's voice. Like you're not supposed to be able to do that. Where like can Sora, can OpenAI release Sora with that exact voice?

57:54Jeff Lawson:Like probably not. Like maybe they can try to do it, but like they're clearly gonna face some legal repercussions where like, China can actually just kind of do it because they don't really have those.

58:04Vlad Tenev:Yeah, a lot of the American labs, it feels like they've been launching very aggressively and sort of making a fair use claim and probably engaging with lawyers from the big IP holders immediately and just sort of saying like, look, yes, like we know you can prompt Disney characters. We're happy to pull that out. But also, can you want to talk to our business development team?

58:29Jeff Lawson:yeah like with Open Eye you saw them actually do like a Disney deal where China is not like I'm pretty sure that you can go and see see dance and just prompt like Mickey Mouse you know doing a little dance

58:40Vlad Tenev:or whatever yeah let's look at this let's look at this other Sea Dance 2.0 post Will Smith fighting a spaghetti monster epic action film scene different cuts there you go John

58:52Harley Finkelstein:you wanted cuts all you had to do was ask this is pretty real

58:56Vlad Tenev:I like that Will Smith is just the benchmark forever

59:00Harley Finkelstein:And I have the old Will Smith spaghetti AI You do? Ready to go after this

59:05Vlad Tenev:Okay

59:06Harley Finkelstein:Alright, so this is February 2026

59:09Vlad Tenev:Yeah, this is Let's go back in time That is a great shot That's something you need to do in Houdini No longer Yeah, this is good This is very good

59:20Harley Finkelstein:Alright, pull up this next one we got going back to 2023

59:23Vlad Tenev:three we can see the progress china can one-shot ai crime wow this is the progression or was this i remember i remember people used to post this exact same

59:37Harley Finkelstein:thing and be like this is going to change everything and it did and they were right

59:41Vlad Tenev:yeah they were right but it's still funny and now it's just him sitting there enjoying spaghetti, I suppose. Yeah, wow. That looks cinematic. This is good for Will Smith, right? He'll license his likeness, and it's just more attention. I mean, this is like Jake Paul's strategy. He really wanted to be all over Sora, got a billion impressions or something like that.

1:00:10Harley Finkelstein:Daniel in the chat says, China can one-shot AI crime.

1:00:14Vlad Tenev:Who do you think launches the next turn of the video model? Do you think we get VO4, Sora 3, or the next meta model first?

1:00:29Vlad Tenev:And while you're thinking about that, let me tell you about Eleven Labs. Build intelligent, real-time conversational agents. Reimagine human technology interaction with Eleven Labs. What do you think, Tyler?

1:00:39Jeff Lawson:I'm hoping it's meta. I really want to see their model. I'm expecting it to be super, super good.

1:00:43Vlad Tenev:I think it'll be this quality. It has to be. This is the standard. You can't launch something that's behind the frontier.

1:00:49Jeff Lawson:Yeah, also with Sora content.

1:00:51Vlad Tenev:No shortage of content, for sure.

1:00:53Jeff Lawson:Yeah, I'm curious what they'll do with Soar, if they'll actually, like, keep working on the app, or if they're just going to kind of try to just keep, like, making the model better. And then, yeah, they put it in the app, but it's not as big of a push this time. I don't know.

1:01:06Vlad Tenev:I don't know.

1:01:09Harley Finkelstein:Well, yeah. In other news. Which one? We got to talk about Mistral. Mistral's cooking. They're cooking. And they're investing$1.4 billion to build out AI infrastructure in Sweden. Wow. Let's head over to Bloomberg. French AI startup Mistral is investing 1.4 billion US dollars to build AI infrastructure in Sweden as it pushes to become the go-to AI supplier for governments and enterprises in Europe. The data center will be located in a place that I can not pronounce, Boulange, in partnership with Echo Data Center AB, Mistral said in a statement. The facility will house the advanced computing power to train and run Mistral's AI models.

1:01:52Harley Finkelstein:and is scheduled to be operational from 2027. So at least a year out. This is Mistral's first data center investment outside of France, and the company is billing the build-out as a move to strengthen European tech sovereignty. As political ties with Washington fray, governments in the region are increasingly wary of relying on Amazon, Microsoft, and Alphabet, which dominate infrastructure, data storage, and cloud computing. Mistral, which develops AI models and hopes to be Europe's answer to open AI, says it can offer customers a fully European AI stack with data processed and stored locally.

1:02:27Harley Finkelstein:This investment is a concrete step toward building independent capabilities in Europe dedicated to AI, says Arthur Mensch.

1:02:35Vlad Tenev:Yeah. Their last round was led by ASML. $1.3 billion from the Dutch chip maker. That's a good deal.

1:02:42Harley Finkelstein:They're cooking. They're cooking. This is the kind of thing that Macron should be highlighting.

1:02:48Vlad Tenev:Yeah, for sure. I mean, I guess it's old news. You need to launch a new project. You can't just fully focus on that.

1:02:54Harley Finkelstein:And they're announcing in the Financial Times that their revenue is now similar to Grok. Mr. All's revenue soars to over$400 million.

1:03:04Vlad Tenev:Interesting. That's pretty high. $400 million as Europe seeks AI independence. Well, they've certainly carved out a nice niche. Let's go over to the Grok team and GROK and the XAI departures. First, I'll tell you about Fin.ai. the number one AI agent for customer service. If you want AI to handle your customer support, go to fin.ai. The chat says,

1:03:28Harley Finkelstein:Jordy discusses dissing Macron caused a domino effect. Mr. Allen, that's one. You manifested it. I did it. I inspired them to grind harder. No, of course, I was one of many who was having a little bit of fun last Friday. So Jimmy Ba said, buh-bye yesterday. He said, last day at XAI. Uh, and Tanish says with Jimmy Bob's departure, half of the XAI founding team has left. Uh, I, my, a lot of people have been trying to figure out like, why is this happening? Yes. And my current, uh, belief is that, uh, and this is based on some news that last week XAI executives were given the option, take cash as part of the SpaceX, uh, merger, take cash today and you can just move on or you can take equity in spacex and stay with us for the next leg and so i think a lot of the executives which are just the founding teams and the co-founders are just saying like hey i'm going to go work on something else and so we saw some other posts some of these people are teaming up to work on something new together i'm sure some of them you know will just join other labs.

1:04:42Harley Finkelstein:But yeah, the big question is like, what is, is XAI strategy going to change at all with the merger? Or is it going to be more of the same? I keep kind of wondering, you know, will they get into, you know, actually get into the NeoCloud business? I could see it, I could see it happening. But for now, I think this is maybe like people want it to be more dramatic than it actually is, I think.

1:05:10Vlad Tenev:Yeah, it is. I mean, when the SpaceX merger happened with XAI, a lot of people were like, you got pre-IPO shares in SpaceX. You should ride it out and then sell post-IPO because the stock will probably pop, et cetera. And yeah, this feels like a quick exodus of people, which is aggressive. and it feels like, sure, you're behind the frontier on a few different vectors, but it is a place where you're sort of GPU rich. Very intense environment, though. So if you want something that's a little bit more exploratory, a little bit more research-oriented, you know, having the CEO say, we're not doing research, we're doing engineering, that's not exactly a rallying cry if you're like, but I want to do research.

1:05:57Vlad Tenev:I don't want to do engineering. But I'm a researcher, sir.

1:06:00Harley Finkelstein:But I'm a researcher. You're an engineer.

1:06:02Vlad Tenev:You're an engineer now. And so, yeah, it'll be interesting to see where people land. Tyler, what's your take on all of the departures from XAI?

1:06:10Jeff Lawson:Yeah, I mean, it probably just seems like more evidence that X is going to be some sort of like GPU reseller or neocloud market. Like maybe it's like, okay, Elon is extremely bullish on space data centers because it can just allow you to put like so much like, you know, terawatts of compute in space. it's like okay if you're engineering versus research maybe he's just like so scaling pilled that you don't actually need to do that much research you can just build up massive data center and then you just use the same paradigm of models you just train the biggest model it's 10x bigger than everyone else you just have the best models you don't actually need like the insane like moonshot research projects maybe there's something like that going on a lot of the researchers they said they're leaving

1:06:56Harley Finkelstein:that's all folks

1:06:59Jeff Lawson:They said they're leaving because they're so excited about this kind of recursive self-improvement learning. Yeah, there was a whole recursive hype cycle. It's like a very moonshot research project. That feels like something you wouldn't want to leave.

1:07:10Vlad Tenev:That seems fun. That seems interesting.

1:07:12Jeff Lawson:Yeah, but if XAI's whole path is now just we're going to scale up the data center so much that we don't actually need to work on these things. Okay. Maybe it's something like directionally kind of in that lane. Yeah.

1:07:22Vlad Tenev:What was the original Elon Musk prediction about XAI's progress around solving something fundamental in physics or one of those major math challenges?

1:07:34Jeff Lawson:Yeah, I think he said that at the Grok 4 launch.

1:07:36Vlad Tenev:Yeah, was that Navier Strokes?

1:07:38Jeff Lawson:Yeah, it was something like that. It's going to develop some novel physics there.

1:07:42Harley Finkelstein:The most impressive product that I've seen from XAI is their voice mode integrated into Tesla. It seems to be wildly entertaining to a lot of people. To a lot of people. And I've been seeing posts this week that have like 200 ,000 likes, meaning that it's incredibly mainstream on Instagram. And testing out the product, it's like very quick, very low latency. It feels like pretty much as close to talking to somebody like in a Google Hangout or Zoom as you can get. And so I think maybe their voice mode is underrated.

1:08:17Vlad Tenev:I think so. I have a friend who has a Tesla with a long commute.

1:08:20Harley Finkelstein:The question is, is there value beyond comedy? Not saying there needs to be right now, but if Grok can actually get good at doing things for you gentically and you're driving in your Tesla and you can say, hey, book me a haircut for next week and I can do that. Or, hey, I need to get some groceries. Can you order some groceries to the house? And you're actually just getting that kind of ambient assistant experience. I think that they could get some traction there. They do have an insane amount of cars on the road. It's a big user base.

1:08:50Vlad Tenev:Yeah, I have a friend who has a Tesla with long commute, and he talks to Grok voice mode, not the crazy mode, just the normal mode about putting together to-do lists, planning out the day, researching things, answering questions, getting up to speed while he's commuting. I've done that a few times where I've just kind of sort of opened up not the voice mode specifically, but the record my voice and transcribe it. And I'll sort of talk about what's on the agenda for today and then try and put it into just a sort of, you know, annotated note format that I can work with?

1:09:22Harley Finkelstein:Breaking news from Elon. What's that? He shared, XAI was reorganized a few days ago to improve speed of execution. As a company grows, especially as quickly as XAI, the structure must evolve just like any living organism. This unfortunately required parting ways with some people, and we wish them well in future endeavors. We are hiring aggressively. Join XAI if the idea of mass drivers on the moon appeals to you.

1:09:46Vlad Tenev:that's funny

1:09:47Jeff Lawson:yeah but like mass drivers is like not an AI thing right so it's very clear that like if you want to work on these crazy like moonshot AI

1:09:54Vlad Tenev:like this weird machine learning concept

1:09:57Jeff Lawson:like maybe it's not actually that aligned with XAI anymore

1:10:00Vlad Tenev:sure well I mean yeah it's like what type of moonshot do you want to work on ASI that lives in a data center or the infrastructure that will power humanoids humanoids and the mass driver on the moon that's making endless satellites that, you know, build the Dyson sphere. It's like it's a different direction, maybe even longer term moonshot, but it is different.

1:10:23Jeff Lawson:Yeah. I mean, they still have like the macro hard project, which is like still I'm very excited to see what comes out of that. Yeah.

1:10:29Vlad Tenev:Yeah. I mean, do they do they have a CLI tool yet for Grok?

1:10:34Jeff Lawson:I want to say there's there is a Grok code.

1:10:36Harley Finkelstein:okay um yeah um anyways actually i posted a 45 minute all hands uh outlining their accomplishments and a bunch of other stuff so today we will watch that right now in silence yes no no we're not going to watch it but we'll tell you about public.com investing for those who

1:10:54Vlad Tenev:take it seriously stocks options bonds crypto treasuries and more with great customer service

1:11:00Harley Finkelstein:so um let's see a lot of people like a number of researchers have just been uh doom posting on the timeline uh hugh fam says today i finally feel the existential threat that ai is posing when ai becomes overly good and disrupts everything will be what will be left for humans to do yeah and it's when not if so this is somebody who's actively at open ai yeah and so So it's significant, but it's also great marketing for investing in OpenAI.

1:11:35Vlad Tenev:I think people are more skeptical when it comes from the CEOs who are actually out on the fundraising trail than from staff engineers who have less of an incentive. I don't know.

1:11:45Harley Finkelstein:Yeah, but this post has been up for 19 hours and it has 384 ,000 views. So you can assure, I would say, OpenAI comms has seen this post and has not asked them to take it down.

1:11:56Vlad Tenev:Yeah, well, they probably genuinely feel that way. The question is just like, how real is it? And how diffuse will this be? And how fast will it be? Is it February of 2020? Or is it, I don't know, some other time, 1995? There's someone on X who has figured out a massive viral hack to go viral with AI slop constantly. I thought it was very funny because I looked up the account and I already had them muted. But the formula is as such, Trunk Fan laid it out. Find a viral post. AI generates a take of 400 to 800 words as a quote. You do 10 plus quotes in quick in a row and hope a few hit. Between 10.30 and 10 p.m.

1:12:44Vlad Tenev:yesterday, cranked out 13 of them, 10 ,000 words total. All AI slop, every day, unreal. And so Trung spot checked them with Pangram and you'd see that it's fully AI generated, but apparently he blocked Pangram Labs. I was laughing because there's this interesting divergence in the performance. Some of the posts have tens of thousands of likes, and some of them will just sit there with one like, two likes, no likes. and so it's this odd case of 300 ,000 followers on LinkedIn, something like almost 200 ,000 followers on X, like it's working but there's no real audience because if you post something that's just, that only gets one like, it feels like there's no like real audience there, real fans, so I'm wondering like how this monetizes, is this a real business, where's this going, but certainly frustrating some people at the trough.

1:13:47Harley Finkelstein:Ackman makes$2 billion bet on Meta. Bill Ackman's Pershing Square revealed a major new stake in Meta, making up 10 % of its portfolio, or about$2 billion. The firm sees Meta as a top beneficiary of AI, boosting ads, content, and future products like wearables and digital assistants. I saw somebody had wired up, I don't think we got to it in the show, but they wired up OpenClaw with their Meta headset.

1:14:10Vlad Tenev:Okay.

1:14:11Harley Finkelstein:Which one? VR, AR, or? The AR one. The displays. But effectively saying like, hey, buy this product. And it would go to Amazon and buy the product. Wow. And that is the vision we've been talking about. That is the opportunity. Zuck wants you to be able to just be in the world shopping.

1:14:28Vlad Tenev:Yep. And for a lot of people that don't want to wire up an open source project, he will slowly do all the biz dev deals to drive traffic. Although, Meta has tried to get into commerce so many times. And we can talk to Harley about this as well. There's been a lot of back and forth about, you know, should you be able to just click and check out directly on Meta properties? It's never fully developed and you have to imagine that they have all the biz dev horsepower in the world to try and go and do that. But for some reason that has continued to live in the domain of brands, in Amazon, on Shopify sites, etc.

1:15:02Vlad Tenev:Quickly. Vanta. Automate compliance and security. Vanta is the leading AI trust management platform. And Scott Wu is sharing some news from Cognition. Your PR should fix themselves. With autofix, Devon now closes the loop on its own PRs. If Devon Review or GitHub bot flags bugs, Devon automatically fixes the PR. Devon also tackles CI, Lint issues until all checks pass. And so there's autofix and Scott just says one step closer to the recursive, ever improving AI coding system. So J.Bole on X says, cool.

1:15:42Harley Finkelstein:So now Meta is Enron being a little dramatic. But Meta Platform's auditor, Ernst & Young, raised a red flag over the financial engineering Meta used to keep a$27 billion data center project off its balance sheet. Meta moved the data center project into a new joint venture with Blue Owl Capital and said it isn't the primary beneficiary of this entity, so it didn't have to put the venture's assets and liabilities on its own balance sheet. Four Democratic senators asked the Financial Stability Oversight Council to investigate the risks that AI-related debt posed to the financial system. Citing Meta's joint venture with Blue Owl as an example of a convoluted and opaque financing.

1:16:21Vlad Tenev:This is sort of old news. We talked about the Blue Owl deal and how it was structured as its own entity. It's its own business. It just has Meta as a tenant.

1:16:31Harley Finkelstein:Yeah, I think for me, I would probably need to see them doing, like, copy and pasting this, like, you know, 10 more times to the point where I'd be like, you know, maybe Meta's not good for it, right?

1:16:45Vlad Tenev:I mean, it still shows up in the cash flow if they're paying for the data center. They need to monetize it properly.

1:16:52Harley Finkelstein:Nas on a roll says, apparently, Walter Bloomberg has no vocal cords left because of all the uppercase shouting on X. It's constantly. Walter. I bet a lot of people out there think he's just works for Bloomberg.

1:17:07Vlad Tenev:They probably do.

1:17:09Harley Finkelstein:Oh yeah. Walter Bloomberg, the founder of Bloomberg, Joe Weisenthal's boss. Definitely. We got Harley in the waiting room. Let's bring him to the TV.

1:17:20Matt Shumer:Harley, how are you doing? Gentlemen, great to be here as always. Love being here on earnings day. Yeah. Always good to have you. Great to have you back.

1:17:27Vlad Tenev:Yeah, give us the update on earnings. And then I want to dig into what you can tell us about the economy broadly, 2025, the jobs numbers, everything about what's happening in the world. Help us understand it.

1:17:41Matt Shumer:All right, let's go. All right, let's start with the headlines. Last time we were on together, I think it was Black Friday, Cyber Monday. I think I came to you live from the middle of the National Retail Federation. Maybe it was January, actually. January, yeah. National Retail Federation. And I told you that you asked about how things are on Shopify. I said, wait for the earnings. So here are the earnings we announced earlier this morning. GMB was up 29 % to$370 billion, which is incredible. Revenue was up 30 % to$11.5 billion, which is a decade of growth of over 20%. The number that actually has been on Shopify for almost half my life, and this number hits hard, which is that we now power more than 14 % of the entire U.S.

1:18:24Matt Shumer:e-commerce market, which is remarkable.

1:18:27Harley Finkelstein:You guys did the 1 % of the TAM meme, and then you 14X'd it.

1:18:32Matt Shumer:That's exactly right. And actually, one of the cool parts is that we also did it with, I think with incredible discipline, cash flow for the year was about$2 billion for 2025. Beyond that, one of the things that I think I'm certainly most proud of is that we really spent kind of 2025 building the rails for AI shopping. And we did things like announce the universal commerce protocol that we co-developed with Google, which effectively means that every single brand will be able to sell on every major AI platform with our Argentic storefronts. And we have partnerships with ChatGPT, Google Gemini, AI Mode, and Microsoft Co-Pilot.

1:19:09Matt Shumer:And so I think if you kind of think about 2025 as the year that we kind of laid the rails for Argentic, I think 2026 is the year that we scale what runs on them. And so that, I think, is really incredible. Back to what we were talking about at NRF, we were talking about some of the brands and how the velocity of growth. We can talk about consumer as well. But just in terms of the merchants and entrepreneurs we see, I'm beginning to think that 2026 is really going to be kind of year one for this next generation of these billion-dollar brands. I think there's going to be more billion-dollar brands created in the next 10 years than the last 100 years.

1:19:41Matt Shumer:And in terms of, you know, if you're looking for kind of a proxy for how the consumer is doing, I mean, we talked, you know, we talked during BFCM, of course. We did that, you know, I sort of became a new coach for a couple of hours, exactly. But look, GMV for the quarter was$124 billion. I mentioned, you know, for the year was almost$400 billion. And so if you think about that as a proxy for, you know, how consumers are doing, consumers are buying. They're buying from brands they love. They're being incredibly thoughtful about where they're spending their dollars. But for the brands that they care about, they're voting with their wallets to support them.

1:20:20Vlad Tenev:Talk about agentic commerce. Is there any activity that's happening yet? Is the ads launch from ChatGPT going to be an important moment in driving that? What are you looking forward to this quarter in terms of agentic?

1:20:34Matt Shumer:So we do have some merchants alive already. merchants like Glossier, Spanx, Viore, Stanley, Steve Madden are already live. Actually, if you just look from Jan 2025 to Jan 2026, we actually have seen approximately AI searches. So if you look at your Shopify admin in terms of sources, it's up like 15x. It's still very early, but it's certainly beginning to evolve. And one of the things that we're trying to do for the merchants on Shopify is that if you're with us, you can sell everywhere commerce is happening, whether that's online or offline or certainly on agentic. And I think, you know, you guys have discussed this many times, but I think there's going to be a bunch of like, there's going to be a bunch of different permutations of exactly how agentic commerce evolves.

1:21:18Matt Shumer:What we're doing is we're preparing for whichever path wins. Shopify is going to be well set up there. In terms of ads, I mean, that's not, you know, ads are not a new thing. I think ads have always been part of the commerce experience in some form, sort of natural evolution. I think consumers expect this. I think the key though is going to be, there has to be a clear distinction between kind of ads and organic content. Um, and so far that's what we're seeing as well, but generally, and, and, you know, I, I think, you know, we're in the early stage of 2026, but it does certainly feel like there is a massive, I know you were talking about earlier about, you know, how a bunch of young people became kind of drop shippers based on some influence in many ways.

1:21:58Matt Shumer:It does feel like there are more people starting businesses, but the velocity of those businesses is just insane right now. And, and like, because like they can access global markets, like right away, they have incredible resources. It feels like a really, really important time to be an entrepreneur right now and a very exciting time. Yeah.

1:22:15Vlad Tenev:What's the moat for D to C entrepreneurs? Is it changing? Is it brand? Is it distribution, marketing chops?

1:22:22Matt Shumer:I mean, look, I think, let me, I'll give you a quick example. We launched Shopify sidekick, about a year ago or so, which is our, we sort of call it your co-founder. It lives inside of Shopify. It knows everything about your business and everything about commerce and Shopify. We added to this thing called Shopify Pulse recently, which is this new feature that effectively, it proactively helps merchants grow their business. It works in the background. It surfaces like these tailored recommendations for things you can do to grow your business. And then if you agree to them, it actually goes and executes.

1:22:52Matt Shumer:I heard the story last week of a jewelry merchant who was actually, who got a recommendation from Pulse to, rather than having four separate SKUs, to actually bundle them into a stack and create a bundle. And immediately that particular merchant like immediately saw more sales happen. If you are meeting these great merchants with great ambition and great products and adding this like personalized data analysis with great intelligence, I don't know, it's bespoke, it's intuitive, but it really will allow more of these direct-to-consumer brands to access, I think, more customers. And this idea of, you know, like initially it was like online only for DTC.

1:23:30Matt Shumer:Then it was like, let's try offline as well. I have online and offline working simultaneously. It feels like we've evolved well past that. And this is kind of what we're doing at ShopBite, which is that regardless of where consumers are spending their time, make it really easy for merchants and entrepreneurs to access those markets. And something as simple as like the agentic storefronts where with a couple clicks, you can push products to ChatGBT and to Gemini. That's only going to increase the velocity even further.

1:23:59Harley Finkelstein:Sasspocalypse, how are you guys? I'm just going to say the word that's been on everybody's mind the last 10 days or so or 10 months for our corner of the internet. I look at Shopify. It's a system of record. It's payments. It's a consumer buying network. It's battle-tested infrastructure that needs to have insane uptime. I don't see the vibe coding risk at all. But how are you guys answering that kind of question with analysts? Yeah.

1:24:37Matt Shumer:Look, I did our call this morning at 8.30. And we've basically been with analysts and investors the entire day. The question does come up. I mean, first of all, let me just say this. people have been underestimating Shopify pretty much since day one. We've sort of made it a habit of proving them wrong, which is kind of fun. I think a couple of things. I think AI, on the agentic side, I think AI will change how people discover products and potentially even how they buy. That's what we're building for. We are building for these agentic storefront experiences and making sure tools like Sidekick make it so that if you're on Shopify, you're just better position.

1:25:12Matt Shumer:But the truth is, AI is going to rewrite interfaces. It will not rewrite the transaction contract. And one of the things that we've been building on Shopify, everyone talks about the online store, the e-commerce component of Shopify. The killer feature of Shopify for a very long time has actually been the back office, the retail operating system. That's where you go to do inventory and you do taxes and you do analytics and reporting, you launch marketing campaigns. and you create loyalty and you do payment authorizations and fraud prevention. Ultimately, I think the companies that are going to continue to do really well, notwithstanding some of this vibe coding, the ones that will do well will be the ones that are system of records, the ones that are actually operating like operating systems.

1:25:56Matt Shumer:And, you know, that's Shopify.

1:25:59Harley Finkelstein:Yeah, and I -

1:25:59Matt Shumer:I think for some other companies, yeah.

1:26:01Harley Finkelstein:Yeah, just jumping in, like, I do think that there, when throughout my history, you know, being a Shopify, you know, customer and user over the years, I would be, if I was operating like a tiny Shopify plugin that one engineer had built and they were charging$30 a month, I would be a little bit worried about vibe coding because I do remember throughout history using a plugin where I was like, okay, this is a nice little feature that I can bolt on and I'm happy to pay for this because it doesn't make sense for me to go hire an engineer to build some custom, you know, yeah, whatever that is. So I think, but again, that is a, that is a, uh, that's a tailwind for Shopify as a platform because you have the system of record and it's like, Hey, now we can allow you to add these kind of like Lego blocks on top of it.

1:26:50Matt Shumer:So, you know, one of the things we're noticing, actually, one of the questions I got on the earnings call this morning was, um, the growth of the app ecosystem, that there's now more people building apps for us. So one of the things we're seeing app developers, but also merchants themselves who historically would hire a third party to build a tool, do it themselves. And part of the reason that we're putting out all these new APIs and SDKs and these new tools to build on top of is because we actually think having more people build on top of Shopify benefits merchants. But back to that whole, if you were just a feature, I mean, you guys, if I had to word cloud your show, the word wrapper probably comes up as much as anything.

1:27:31Matt Shumer:I think you actually have to create something of real value. And if all you're really doing is wrapping something, you're going to struggle. But companies, if you look at the apps on, I mean, you know, take some of the larger apps on Shopify, like the Klaviyos of the world, you know, who are, who built this incredible in their own ways, their own rails around email marketing, that is very, very difficult to disrupt. So I think the idea of like, we want to invite more people to build incredible tools on top of Shopify and also give merchant tools to build it themselves. But I think that, you know, AI will rewrite interfaces, it will never rewrite real infrastructure.

1:28:04Harley Finkelstein:Yeah, Klaviyo is a great example because you could have, somebody could build something that can send an email, but then if your delivery is just terrible, it's just going to be, you might save a little bit using the five-coded solution, but then you're losing tens or hundreds of thousands of dollars because you're not actually getting through to your customers. So there's any e-commerce operator getting, you guys know this too, Like you've spent, like you guys have had a better solution in the market for how many years and you're still, you know how hard it is to convert a legacy brand to even trust a new platform because they're like our current system is not great, but we know, we know how critical this infrastructure is and what a big step it is.

1:28:47Matt Shumer:So it is interesting, you know, even on the enterprise side, one of the things that I've noticed coming out of NRF, which effectively is like all the major, the largest retailers are all there, is that even the largest retailers who feel like they have something that's good enough, they're getting pushed by their exec team or their board to think about like unified commerce. This idea that, you know, think about the metaphor of like a browser with 12 tabs open, online, offline, agentic, cross-sell on social media platforms, B2B. Even the most traditional of retailers and businesses we are finding now are coming to Shopify for simplicity, that they don't want to run this like, you know, this Rube Goldberg machine in commerce.

1:29:24Matt Shumer:They actually want to create this centralized back office that runs all of it. And that's been amazing for us. In fact, one of the biggest areas of growth for us has been the enterprise. and companies that traditionally did not come to shop, like General Motors, for example, or Estee Lauder, for example, are now migrating to us as well. So I think it's an exciting time to be a new entrepreneur getting started because the resources and the tools are insane. But even for some of the largest retailers, the next few years are going to be incredible for them because they're going to access these tools and be able to operate at a pace that, frankly, some of them have never been able to operate at.

1:29:56Vlad Tenev:Do you have a hard stop at 1230? I can keep going for a bit. Okay. I want to talk about evolution of UI, sort of tactical. When I had an e-commerce site that was not on Shopify, regrettably, launching a new product was like, how are we going to literally Django go in the backend? What's the database schema? Is it a Boolean? All these different things. Then you go to Shopify and it's very easy to -

1:30:23Matt Shumer:It was like Yahoo stores or something?

1:30:24Vlad Tenev:No, it was literally Django, like Python. It was hosted on Heroku, I think. And so, yeah, homegrown disaster. Huge, huge waste of resources. You go to Shopify, you get an HTML page with a bunch of fields that you can fill in when you have a new product, and it fills into the templates, right? Is the future I talk to Shopify natural language, is that actually better than defining my product variance in HTML UI? Do you think that Shopify will have an agent where I'm making changes within the Shopify ecosystem, but in natural language, or is HTML dropdowns, are those sort of more Lindy than we think?

1:31:11Matt Shumer:So I think the good news is you can do both, right? The idea is can we make the important things really easy and everything else possible? There are merchants right now that we have a product we just announced in December at our edition called SimGym. SimGym effectively simulates what any task might be. So you can say, if I change this particular design or I try this particular campaign, what does SimGym simulate will be the results of that. And we're seeing a lot of our merchants begin to adopt it now and try it out. I think the idea should be you can do both. If ultimately what you do best is you are an artisan.

1:31:46Matt Shumer:You make beautiful products. You make some sort of like children's toys and they're amazing. And you actually do not know anything about digital commerce, digital marketing. I think you can use Sidekick as really your CMO and your co-founder that helps you become a lot more internet native when it comes to commerce and retail. In other cases, the idea that, you know, some of our brands like Skims, for example, or Allo Yoga, for example, I mean, they want to do some really customizable stuff. They're very technical. They have an amazing engineering team. They want to go into the code and really make it.

1:32:20Matt Shumer:So, so their particular store is, is exactly what they want. That ability where, you know, at some point you had to either build your own stack if you wanted massive customization, or if you didn't know how to use anything when it came to e-commerce, you had to go and hire, you know, some sort of like company to go build everything on your behalf. I think all that's gone. I think the net result of that's going to be, you're going to have way more people starting businesses and way more companies getting larger at a much faster clip. And a sidekick is a really good example of that. And so is Simjim.

1:32:49Matt Shumer:I think beyond that, the other thing is like this idea that you start with one particular channel, I think will, will very quickly go away. We're already starting to see that where immediately, you know, you may start with your online store as your online hub, but very quickly you're going to activate an Instagram channel or a TikTok channel, or you may decide, Hey, I want to try this agentic thing. I think this idea that I am an X kind of merchant, I'm an online merchant, offline merchant. I think that's going to be something that like, it's going to be like talking about the color TV. It makes no sense in the future.

1:33:17Matt Shumer:But all that coming together is what we've been building in Shopify for two decades. And the end result of it is that, you know, we're seeing way more entrepreneurship than ever before. Yeah.

1:33:27Vlad Tenev:Makes a lot of sense. Jordy, anything else?

1:33:29Harley Finkelstein:How are you talking to, last question, how are you talking to friends, family outside of the tech bubble about AI on X? You were busy with earnings, but on X, there's an essay with like 50 million views, basically telling everyone to freak out. Uh, I'm curious how you're, I saw the essay before

1:33:49Matt Shumer:I, before I started my day, I actually sent the essay to my wife, um, just because I wanted to substantiate that I'm not an insane person talking about this stuff every single day. Um, I think that essay, I think you guys said, or someone said like that essay feels like it crossed the chasm. It did. Yeah. Like it, like what I mean is like containment. Exactly. It went kind of well beyond just like our kind of little, you know, world circle of the internet. I think ultimately the idea of being reflexive with AI, you know, Toby wrote this letter a couple months ago, you guys probably remember it, that got leaked.

1:34:25Matt Shumer:And it really, you know, the reason it got leaked was it talked about that if you want to hire someone at Shopify for your team, first you have to substantiate why AI can do it better. But if you actually looked at like the meta message in that email. Well, can't do it better, right? Definitely, cannot do it better, exactly. That AI cannot, so if you can't do it better, then you can hire, but if AI can do it better, the headcount doesn't get allocated, which what it really suggested was this idea of AI reflex, that rather than sort of use it as a tool, how do you kind of use it as part of your day-to-day life?

1:35:03Matt Shumer:When I'm preparing for an earnings call with Jeff, our CFO, we used to go around and meet a ton of different product leaders around the company to kind of glean and figure out and summarize like what are the most exciting things happening at Shopify? It was part of the process for, I don't know, like 10 quarters. Now effectively we go to Shopify's vault. We have like a dozen MCPs running. We're able to pull way more information we can. So when we do meet with those product leaders, the conversations are way richer. They're not spending a bunch of time explaining to us on a, you know, at a very abstract level or, you know, at a macro level, what they're working on.

1:35:36Matt Shumer:We can ask specific questions. I think companies that become more reflexive and individuals that become more reflexive, especially entrepreneurs, there's no doubt it's going to make you more, you know, it's going to make you more effective and more efficient. But I think articles like this, it invites the non-tech community into what we're seeing in a way that I think is important. I think the reason it's getting so much traction is because it felt like it was, it felt like it was written for my wife, as opposed to for me. And not to say that she is a laggard. She's not. But she needed someone who isn't me to say, hey, you should really take this stuff seriously.

1:36:11Matt Shumer:It's really cool.

1:36:11Harley Finkelstein:Yeah, for sure. But that's different than I think a lot of people are sharing it, saying you should take this seriously. It's really cool. I think a lot of people have been processing this as like, you should take this seriously. And it's like, get your financial house in order. Like, you know, this is like, you're going to get steamrolled. Yeah, I know.

1:36:29Matt Shumer:Look, I'm not like, I don't believe in the doom of them. I'm an eternal optimist. I think what it's done for Shopify, for our merchants, for our business has been incredible. I think what it's doing for individual entrepreneurs is incredible. My daughter, we recently moved to Montreal, which is a French city. My kids, we moved from an English city. My kids are learning French right now. There's homework that comes that I just cannot help them with. I would have had to hire a tutor. I still may have to at some point. But the fact that I'm able to do so much more on my own, even in my own dad role, makes my life better.

1:37:01Matt Shumer:Totally.

1:37:01Harley Finkelstein:And what's so cool about that is for you, you can go hire a tutor. You could hire 10 tutors. But there's a lot of families that just never would have been able to do that. How could you not be more optimistic about that?

1:37:14Vlad Tenev:I mean, sometimes my four-year-old will ask me just why, why, why, why, you know, the 10 whys of like, why is the sky blue? And I'll be like, I think I know why. But even with the money, I can't hire a tutor to come by the house at 9 p.m. on a Tuesday in two seconds. But I can go and look it up and then relay a story and I can tell that story however I want. So how can you not be optimistic when you have those tools available to you?

1:37:38Matt Shumer:I love it. The key, though, is looking at them as these incredible tools, looking at them as a way for you to create, like, some sort of exoskeleton for all of our lives. And there's going to be some laggards. I mean, it's going to be like – I think it was Jeffrey Moore crossing the chasm. Like, we will cross the chasm where in the mainstream we'll use it.

1:37:55Vlad Tenev:Yeah.

1:37:55Matt Shumer:My mom's using AI right now mostly for like things like recipes. But that's sort of like a gateway drug, I think, for her using it for things like questions about, I don't know, banking or whatever my mom does daily. So it's tough not to be optimistic. And certainly from a Shopify perspective, it's been incredibly valuable for us. Gentic shopping hasn't even started yet, but like we're prepared for it. And I think, I don't know, it sounds like. Yeah, even for entrepreneurship. I think we're still underselling the opportunity with AI.

1:38:23Harley Finkelstein:Yeah, when I look back in my early days of entrepreneurship, luckily I had people around that I could call and say, hey, how do you do this? Or what kind of contract do I need for this? How do I set this thing up? How do I, what, should I use a safe note? Should I use this or that? And now it's, you know, hopefully entrepreneurs can build a network quickly, but you don't need a network to get like customized advice on pretty much any situation. And yes, it could still be wrong sometimes, but it's usually directionally correct and helps you be more informed. And it's amazing.

1:38:53Matt Shumer:It feels also like we as humans, we don't often want to ask someone else the question that we deem as being like a silly question or a stupid question. That's one of my favorite parts of AI.

1:39:05Harley Finkelstein:You're right. Just like ask a dumb question.

1:39:06Matt Shumer:Yeah. Totally. Totally agree. I remember when we raised our first, our Series A, this is, I don't know, literally almost 20 years ago. I had to look up what a liquidation preference was. And I'd call around and I felt like, you know, like we were raising a series A and it was a$25 million round Bessemer led it. And I remember thinking like I was already a lawyer. Like I wasn't a very good lawyer, but I'd finished law school. I didn't – went to business school and I wasn't exactly sure what it meant. I just sort of think back of now, like the amount of information I could have taken – I could have got all these case studies.

1:39:37Matt Shumer:I could have understood it in a much deeper way. That is where I think – so it's not surprising that this article –

1:39:42Harley Finkelstein:I could have dropped the term sheet into NELM and instantly gotten pretty decent analysis. Why could I do it? Pull out all the main terms. Hey, here's what's marked. Here's what you can push back on. Anyway. It's amazing. No more doom. Sorry. Thank you for not.

1:39:56Matt Shumer:No more doom, guys. Come on. Let's go.

1:39:58Harley Finkelstein:I appreciate you taking the extra time. This is going to be great.

1:39:59Vlad Tenev:We kept you long. Always great to have a great rest of your day. Great to see you. We'll talk to you soon. Goodbye, Harley. Let me tell you about Gusto. The unified platform for payroll benefits and HR built to evolve with modern, small, and medium-sized businesses. And I'm also going to tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Nikita Beer has a prediction. I want your take on Nikita Beer's prediction. He says, in less than 90 days, all channels that we thought were safe from spam and automation will be so flooded that they will no longer be usable in any functional sense.

1:40:34Vlad Tenev:I message, phone calls, Gmail, and we will have no way to stop it.

1:40:40Harley Finkelstein:What I don't, yeah, I mean, he must be seeing something. I would assume he's seeing something at X.

1:40:46Vlad Tenev:He's been fighting this for a long time. He's been fighting the bots. He's in the trenches, for sure.

1:40:49Harley Finkelstein:Fighting the bots. Yes. I got a pretty good AI phone call yesterday that was somebody leaving me a voicemail that was just like, hey, just have a few questions. Give me a call back.

1:41:00Vlad Tenev:Ooh, that's one of the hook.

1:41:02Harley Finkelstein:Yeah, it was a good, you know.

1:41:03Vlad Tenev:Yeah, no, no, sometimes, like, the text message is like, yeah.

1:41:06Harley Finkelstein:But I listened to the voicemail. Yeah. And I could clock it as AI. But when I just got the kind of summary of it.

1:41:13Vlad Tenev:But if it's dated to Attenborough, you're going to be like, David, I would love to do a documentary about a flying beaver with you. Sign me up. So, hack that sort of solves this. On X, you go into the settings and you turn off notifications from anyone that you're not mutuals with, that's not verified, that doesn't have a phone number. You just make it really, you will miss some stuff, but you will see way less spam. on iMessage and the iPhone, I just don't accept calls from unknown numbers. And so like you have to be in my contacts book. And so how do I actually meet people? Well, I get mutually introduced.

1:41:48Vlad Tenev:I add their contact. We get into a group chat and it's just a game of chain, linking one chain to the next. So if you give me Tyler's number, there's already a pretty finite,

1:41:58Harley Finkelstein:there's a small number of people who are free to call me out of the blue whenever and I will pick up if I'm available. And then there's another big group of people that I'd be happy to have a phone call with, but I'm not just going to pick up out of nowhere because, you know, whatever. You should talk about it before.

1:42:12Vlad Tenev:The typical spam functionality for a long time has been deny lists or black lists where you have a list of spam accounts and you deny those. You block those numbers. Everything is shifting to allow lists or white lists where you have an approved list of people that can get through through your messaging apps. and basically cold messages, cold DMs are going to be a lot harder to break through. So the era of the reply guy who gets retweeted and ratios and gets surfaced, maybe that's the alpha these days.

1:42:45Harley Finkelstein:Where you just have to grind harder. I have a post that I want to read to you.

1:42:47Vlad Tenev:Let me tell you about Turbo Puffer first. Serverless Vector and Full Text Search. Build from first principles and object storage. Fast, 10x cheaper, and extremely scalable.

1:42:54Harley Finkelstein:Shopify alumni. I have a post I want your reaction. Okay, hit me. It's from Delicious Tacos. Yes. I'm the CEO of a hot dog company. I've worked on hot dogs for 10 years, and I wasn't prepared for what I've just seen. Your life is about to change. So what can you do? Buy as many hot dogs as you can. Buy stock in hot dog companies.

1:43:17Vlad Tenev:I think it's a little different, but it is funny. It is very funny.

1:43:22Harley Finkelstein:I mean, who knows? Hot dogs might change everything.

1:43:25Vlad Tenev:Okay, well, you got quote tweeted here. You said, Justin, horses say we may be in a car bubble, which is funny because that's a pro AI take, right?

1:43:34Harley Finkelstein:Yeah, I was confused by this. And then AI not kill everyone is a memes responded kind of saying horse says the real risk is what happens to the economy when the car bubble pops. So it's kind of it's it's this is a techno optimist account now.

1:43:50Vlad Tenev:No, I think it's a doomer account, right?

1:43:53Harley Finkelstein:No, no, I don't think so. Wait, really? They say techno optimist in their bio.

1:43:57Vlad Tenev:Okay. I thought they were always like pause AIs, pause the progress. But maybe the bubble is a bigger issue as well. Well, we can continue to dig into that quickly. Let me tell you about Plaid. Plaid powers the apps you use to spend, save, borrow, and invest, securely connecting accounts to move money, fight fraud, and improve lending now with AI.

1:44:17Harley Finkelstein:We got a Bugatti Tourbillon. The Luce. Post here. Yes. The Bugatti's mogging.

1:44:25Vlad Tenev:So the post says the Ferrari Luce makes the interior of the Bugatti Turbillon look like an absolute master class. Bravo, Ferrari. It's pure genius to be this bad. People are still going back and forth on this. The Turbillon, this is a driving machine.

1:44:43Harley Finkelstein:My takeaway from all the reactions this week and my personal view is I think the Johnny Ive Ferrari will be popular in specific bubbles on the West Coast. and generally not be very loved.

1:44:56Vlad Tenev:The only thing that really jumps out to me about the design is the rounded rectangle display in the center. It just is, it does feel iPad-ish. It feels like there's the tactile buttons, but just that block of like there's a screen.

1:45:14Harley Finkelstein:There's also like a leather kind of lunchbox looking thing that you can pull out. Cool. Which I think is weird.

1:45:21Vlad Tenev:It is so odd.

1:45:22Harley Finkelstein:I don't love it.

1:45:24Vlad Tenev:Take it on the go, I suppose.

1:45:27Harley Finkelstein:RatLimit on X says, people who back into parking spots cannot be truly present. You invisualized your departure the moment you arrived.

1:45:36Vlad Tenev:Invisualized isn't even a word. Isn't it envisioned? Invisualized. This is hilarious. I'm still doing numbers. Wow, 50K likes. I love it. You envisioned your departure the moment you arrived. You're not truly present. Do you back in ever? I back in every once in a while, but mostly I'm angling for the room for the doors. So if there's a pillar in the parking garage that will block the passenger door and I have a passenger. It's strategic.

1:46:06Harley Finkelstein:It's not default.

1:46:07Vlad Tenev:Exactly. So I'm extra present. I'm extremely present. I'm locked in trying to give my passenger the best possible vehicle exiting experience there could possibly be. Let me tell you about Figma. Figma Make isn't your average vibe coding tool. It lives in fake mass, so outputs look good, feel real, and stay connected to how teams build, create code-backed prototypes and apps fast.

1:46:26Harley Finkelstein:Toma Bravo executives fielded queries and held conversations with investors to discuss the impact of AI on their software portfolios. Vista Equity's chief executive sent an email to clients and plans to follow up with a webinar. Don't worry, I'm following up with a webinar to discuss the state of the firm's portfolio, saying that we believe that AI will enhance software, not replace it. leaders of several firms including kkr blackstone and aries reported that their exposure to the sector are limited and that the sell-off is overblown with some saying that ai will not significantly impact their well-established portfolio companies it's hard to say that it won't impact it at all you kind of gotta kind of gotta pick a side in most cases but yeah it's interesting you've got like you know like peep like pe firms that only own software and they're like, no big deal.

1:47:15Harley Finkelstein:We're excited about this. We're not worried at all. But they're having to do kind of like, you know, what kind of American are you meme?

1:47:24Vlad Tenev:It's what kind of software did you own?

1:47:26Harley Finkelstein:But then on the other side, you have firms that have some exposure saying, well, we don't have very much exposure. Yes, yes. And so these are, you know, the messaging is. And so this is what

1:47:34Vlad Tenev:we were talking about this morning. This, you know, I think there will need to be a, in many ways a reclassification of who the AI winners and who the AI losers are in the software world, because there truly are platforms where, yes, you could vibe code it, but the value in the asset is liquidity on that platform. Like you can vibe code an Airbnb marketplace competitor, but if there's no houses on there and they're all AI generated, you can't actually go to the beach house. Like you don't actually compete with Airbnb. And so there's a lot of software companies that fit in that world where there's liquidity or some other network effect or some scale economy, but purely just having, okay, we spent a bunch of money on R &D.

1:48:16Vlad Tenev:We have a bunch of lines of code written and it would cost you a billion dollars to write the same amount of code and compete with us. So you're not going to do that because you're going to take a billion dollars to raise all the money and then you're just going to be competing with us. Well, now that billion dollars is shrinking down. Maybe it's a hundred million dollars. Maybe it's 10 million dollars. Maybe it's less and less and less. And so there will be need, in many ways, just to return to form of like, where are the true moats? And then intellectual property, obviously, network effects, scale economies, there's a few others.

1:48:48Harley Finkelstein:Regulatory.

1:48:49Vlad Tenev:Regulatory. So yeah, there will be some software companies, some SaaS companies where you find out that it's like Duolingo with like, oh, it's actually a game and people love the brand. And so that's been much more resilient relative to a chegg that was basically just data that was scraped and put into chat GPT and the stock's down 90%.

1:49:08Harley Finkelstein:Well, Pythia Cap responded to the comments from Toma Bravo and Vista Equity saying, breaking 6x levered long software investors who can't exit think software is okay, actually.

1:49:19Vlad Tenev:So let me tell you about console. Console builds AI agents that automate 70 % of IT, HR and finance support, giving employees instant resolution for access requests and password resets. And let me He also, Pat Grady from Sequoia Capital has quote tweeted my article and he chimes in, sort of agrees. He says AI, the title of my article was AI is not COVID. And he says AI is not COVID in three key ways. And I wish I'd put this in the article because it's a pretty good analysis. He says it's bigger, much bigger. And I agree with that. COVID, you look at the numbers and it goes up. It was crazy, world changing.

1:49:53Vlad Tenev:But then now we've moved on and there's a whole different set of stories. It's durable. COVID was a wave. It came and went. AI will compound. And so you never go back to not using the internet. You never go back to not using a mobile device. You never go back to not having AI in the world. You do go back to a world where you can walk around and not feel sick if you don't wear a mask. That happened. And then third, he says, we have a choice. This is important. And the main reason to read the article. With COVID, everyone played defense. With AI, we can choose to play offense. Don't let AI wash over you.

1:50:23Vlad Tenev:Put it to work. And this is what Harley was saying as well. There's an opportunity. And Pat Grady says, the best time to make that choice is right now. And I agree. It's an optimistic message.

1:50:32Harley Finkelstein:Alex Su says, at this point, I can't tell if Harvey is in the business of selling technology to lawyers or equity to VCs. He, of course, is in...

1:50:43Vlad Tenev:What business is he in?

1:50:45Harley Finkelstein:He's in... Works for a company called Latitude. We specialize in providing high-end flexible legal talent to corporate legal departments. So he's in a lawyer staffing firm.

1:50:55Vlad Tenev:Oh, okay.

1:50:56Harley Finkelstein:So hard to take this post. Guess what?

1:51:03Vlad Tenev:Newsflash. If you're the CEO of a startup, you're in both businesses, buddy, always, no matter what. You've got to raise. You've got to out-raise your competitors. If you're in a competitive space, if you're in a high-growth industry, you have to be selling equity to VCs, and you've also got to be selling your product to customers. Get used to it. It's the game on the field, and you're going to be playing it. Let me tell you about app-loving. profitable advertising made easy with axon.ai get access to over 1 billion daily active users and

1:51:28Harley Finkelstein:grow your business today jira ticket says knew a dude who emailed the it guy directly instead of submitting a ticket and they blew his head smooth off i can't believe how mainstream this this is 5 million views 167 000 likes andrea console says should i use console does does solve that exact issue. Soph over on X says, going to name my son Garrett. Short for cigarette. I never put that together.

1:52:06Vlad Tenev:Garrett would be a beautiful name. I used to have this joke with Christian Garrett from 137 Ventures because his first initial is C. So if it's C-Garette, it's cigarette. It's like he has the name. Anyway. Anyway, BlackRock's getting into DeFi. Totally unimaginable five years ago, but they're doing it. We should talk to a lot about this. And they're buying Uniswap tokens. This will be interesting. Yes, they're buying Uniswap tokens. So Fortune has a story here. In the latest sign of the rapid convergence of Wall Street and crypto, the world's biggest asset manager is moving into decentralized finance, or DeFi.

1:52:43Vlad Tenev:BlackRock on Wednesday revealed it will be bringing its treasury-backed digital token called BUILD, with misspelled. that's very online for BlackRock, onto Uniswap, a leading DeFi platform, where it will be bought and sold by institutional traders. As part of the tie-up, BlackRock is also purchasing an undisclosed amount of Uniswap's own token, Uni. The new arrangement, which is being undertaken with tokenization firm Securitize, is a significant milestone for the DeFi sector, which many view as one of the most useful applications in crypto, unlike traditional trading, which relies on centralized intermediaries to record and settle trades.

1:53:18Vlad Tenev:Platforms like Uniswap rely on smart contracts to match buyers and sellers via liquidity pools and automated market makers. Currently, there are around$100 billion worth of capital sitting on DeFi platforms. I remember DeFi summer. Were you deep in the trenches during DeFi summer? It was a big, what was that, 2022, right? 2021? It was before the crash. It was the era of like Thor chain and like, and like, it was 2020, 2020 or 2021. Yeah.

1:53:49Harley Finkelstein:But I think that 2021 was the Solana summer.

1:53:53Vlad Tenev:Yeah. DeFi summer was, was, must've been major FOMO basically for anyone who didn't participate in major heartache for many people that did. It was a, it was a wild time. A lot of people having fun. and interesting from a, you know, it had some of the same feelings as the open claw thing. It was like you had to set up, you had to know the terminal a little bit, you had to be comfortable sort of, you know, installing these tools, understanding, oh, don't send your money to the wrong address. The address itself looks like a hash. And so it's like a little bit like slightly technical. You didn't have to write any software, but you had to be able to use different wallets that were very - People were getting nerd sniped.

1:54:34Vlad Tenev:It does feel like there was a little bit of nerd sniping. There was also a lot of real businesses built. And obviously, there's still$100 billion sitting in DeFi. And DeFi survived the DeFi winter that followed DeFi summer, of course. Sort of bad nominative determinism. The DeFi summer sort of implied that a winter was around the corner. And it was. But BlackRock's now going into DeFi. So they're listing their BUILD token, which launched in 2024 and boasts a total market value of around$1.8 billion. and it reflects a major vote of confidence in DeFi from one of the finance industry's most influential firms.

1:55:08Vlad Tenev:The practical impact of Uniswap adding Build to its platform is likely to be minor at first, though, since the arrangement involves Securitize creating a whitelist of eligible institutions that can participate in the DeFi trading. The firm is also whitelisting a handful of market makers, including longtime crypto liquidity provider Wintermute, to facilitate trading. Meanwhile, access to build is restricted to qualified purchasers, a legal designation for those assets of more than$5 million or more. So they're getting into DeFi, but they're just dipping their toes in the water. Let me tell you about Sentry.

1:55:43Vlad Tenev:Sentry shows developers what's broken helps them fix it fast. That's why 150 ,000 organizations use it to keep their apps working. So there are lots of essays. It's like essay week in AI. People are writing essays about, is AI like COVID? Do you need to talk to your family? Zoe resigned from OpenAI on Monday, the same day they started testing ads in ChatGPT. She quit in protest. She did?

1:56:12Harley Finkelstein:Yes. And she dropped a guest essay. Guest essay in the New York Times. In the New York Times.

1:56:18Vlad Tenev:That is a crazy thing to do.

1:56:19Harley Finkelstein:I feel like a company hasn't fully arrived until an employee quits and they have the opportunity just to go immediately write an opinion essay on said business.

1:56:29Vlad Tenev:Pretty soon you're going to quit and drop a whole Mr. Beast video. That's the future. You drop a 10-part hour-long miniseries. Just raise the stakes. Go with the biggest splash you can possibly make.

1:56:46Harley Finkelstein:So first, Zoe makes the bull case for ChatGPG as a business. OpenAI is the most detailed record of private human thought ever assembled. Can we trust them to resist the title forces pushing them to abuse it? Again, so far, the ads will effectively be display ads, not integrated into the content and not influencing the content. But again, she's arguing that you can sort of start by doing that and then there's an incentive, there's a business incentive to up the ante a little bit. Hope's Revenge says, I don't mean to be rude, but I feel like this article says very little. I think everyone will agree data privacy is good.

1:57:34Harley Finkelstein:Two, tech companies have a bad track record of resisting their incentives to misuse this data. You kind of vaguely gesture towards certain kinds of oversight, mostly niche and European. but I think we both suspect that that's probably not going to happen in this case. There really isn't a model here. I'm a lot more interested in why you joined OpenAI and stayed for two years and what you would slash wouldn't do in the AI space. I do think you're right to draw attention to what is special about the intersection of AI and advertising, which is that the data set being created and the product itself has a much higher potential for abuse than other familiar tech models of ad monetized platforms.

1:58:07Harley Finkelstein:This feels like a fairly obvious point that I don't see enough of. You're also right to draw attention to the fact that people don't necessarily have a problem with the fact that ChatGPT is doing ads now like this, but that they likely don't think it will actually stop their slippery slope. Thanks.

1:58:23Vlad Tenev:There's a very funny paragraph in Ben Thompson's Sir Techery piece on Google earnings that is basically the flip side of this that I thought was very funny. He says, this is probably the least important of the three benefits of LLMs for Google search business. He's covering Google earnings and what ads are doing for Google. Everything's going very well. And he says, what's notable about that ranking, however, is that this is basically OpenAI's entire proposed advertising business. Google has the luxury of not putting ads in Gemini, but that doesn't mean they aren't experimenting with ads in conversational AI.

1:59:03Vlad Tenev:They're just doing it in AI mode, and their initial offering sounds a lot like what OpenAI is going to do in ChatGPT. Put in ads based on the content of the current conversation. Meh. It's the meh that is scaring. Google's upside revenue potential from LLMs is so large that its side project, which is OpenAI's entire proposed business, hardly merits a mention in terms of justifying CapEx. So Google's saying, hey, we're going to spend so much money on CapEx, but analysts, shareholders, Don't worry because we have really great applications and the great applications that like they put ads in LLM responses really, really low.

1:59:45Vlad Tenev:And so Ben Thompson's like, it's this like, this thing is happening and everyone's very focused on this chat GPT ads thing. But Google's doing it and it's like, meh, like not an even big deal for them. They're like, of course, yeah, we just stuff some ads in the thing because we're doing AI search and we'll keep them out of Gemini. But we're, you know, display and search ads and YouTube ads are going to be way better. and we're making so much money over here that this thing that's causing so much drama and people are doing Super Bowl ads about, like, yeah, we just did it and it's minor to the financials.

2:00:11Vlad Tenev:And if you're an analyst or shareholder, don't even stress about it. And also no one's paying attention. So it was just very funny that there are plenty of justifications elsewhere while everyone else is gonna have to spend to keep up without nearly the obvious high margin benefit. So Google has a bunch of different places to put ads and so much surface area, so many users. and so little pushback. I don't think anyone at Google is going to be quitting over ads in AI mode because it's an advertising company and everyone's used to it. We have our next guest in the Restream Waiting Room. Let me tell you about CrowdStrike first.

2:00:46Vlad Tenev:Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. And without further ado, we have Matt Schumer in the Restream Waiting Room. Welcome to the show, Matt. The Schumerator. The man of the hour. Welcome to the show. Thank you so much for taking the time.

2:00:59Harley Finkelstein:The most viral essay ever, maybe? Has there ever been a more viral essay?

2:01:03Vlad Tenev:Would you have won the million dollars if you posted this a week ago?

2:01:06Harley Finkelstein:I think so. I don't know, but I do wish I posted this a week ago.

2:01:10Vlad Tenev:Well, fantastic response. What has the response been like to the essay from non-tech people? I imagine that you have family friends that have been texting you screenshots or something. Walk me through the experience of this.

2:01:25John Ferrara:It's been crazy. crazy uh i i wrote this with that in mind but still i didn't expect it to actually happen you know what i mean right i i originally wrote this for my parents i was trying to explain to them what was going on while i was actually home for super bowl sunday with them some family friends and frankly i couldn't find anything that was both clear and accurate but also understandable for them right i was looking at dario mode's essays and when you read them they're perfect They're amazing, but you have to be in tech to understand them. And I just wanted to find a way to communicate this in a way that allowed them to actually understand it without having to know all the jargon, industry dynamics, everything.

2:02:05John Ferrara:Because I think it's important for people to know this, but there's just not much out there for the person that's not in tech. So, yeah, it did take off. It's been surprising and exciting. Frankly, I've been getting texts from friends who I haven't heard from in years. And they're like, my boss is sending this around the office. It's surreal. I thought it would go a little viral. I didn't think it would go mega viral and certainly not this level. So I'm kind of taking it all in. I've slept like two whole hours since I posted this. I'm exhausted, but it's been crazy. And I'm glad that the message was received.

2:02:40John Ferrara:I think that's the most important part, right? People, it's better than I'm expecting, but it's good that people know that there's a chance.

2:02:46Harley Finkelstein:And the message is just something big is happening. You just want people to pay attention. Because I think people are going to debate how you presented different things. Is the COVID comparison really that accurate? But is that specifically you're just trying to wake people up?

2:03:03John Ferrara:Exactly. If I knew how viral this was going to go, I think I would have spent more time thinking through some of the parts and how I presented them.

2:03:11Harley Finkelstein:Is part of why you're maybe sort of worried or you want people to pay attention is your experience as an entrepreneur here? because it feels like in many ways HyperRight probably made more sense as a product two years ago. And as all the different LLMs have gotten better and the products have gotten better, I imagine it has been great and sounds like maybe you're moving on to focus on investing. But as part of this, it's been kind of a very personal experience of just kind of waking up to the power of the base models and the labs in general.

2:03:49John Ferrara:It has. And I'll share more on the company side soon. But I've been in this industry since 2019. I got in when I was in college working on a VR startup. And I realized that like, if I didn't drop everything to jump into AI, I'd regret it for the rest of my life. And I'm glad I did. But seeing the progression is kind of freaky. I mean, you know, it couldn't write a sentence accurately in 2019, much less a line of code. Now we're looking at models that can build autonomously for many hours. I had early access to GPT 5.3 codecs and that was a very eye-opening experience getting used to that. At first I was prompting and using it like I use any other model, little things at a time, iterating back and forth until I realized, wait, this isn't screwing up.

2:04:33John Ferrara:I started pushing it forward and pushing it further and just saying, hey, here's the big spec I want. Don't come back to me until it's perfect and get it deployed on a server. And it did. And I'm not saying every industry is going to go just like that. I don't think it's going to look like that in every industry, but if that's a sign of things to come, I think people should be paying attention.

2:04:54Vlad Tenev:Yeah. Yeah. I mean, the VR example is so interesting because like completely agree with you on just the power of the models. Like it's, it's so real. It's so legitimate and it does. And truly a lot of people are like, Oh, it's still hallucinates or six fingers in the images. It's like that, that, that is antiquated. Like you need to get up to speed. But at the same time, like if, if I was, you know, we see Mark Zuckerberg, like cutting back on, on virtual reality spending and plans there. Like, and it doesn't, and it feels like if AI is like going to advance everything, you'd be like, great. Like I can invest 10 times less in reality labs and the headsets are going to get 10 times better.

2:05:34Vlad Tenev:But there's a lot of these things in like the, they're not even, it's not even physical world. I'm not even talking about doctors. I'm talking about VR headsets, but even that doesn't feel like maybe AI doesn't really pull that forward. And I'm just wondering, when I go to my friends and family, how many of them will actually be like, yes, this is going to change my life in whatever I do versus like, yeah, software will get better, but software is a small piece of what I do. But how are you thinking about people where software is a more minor piece of their world?

2:06:10John Ferrara:Yeah, this is something that, again, hindsight is 20-20. I wish I had spent more time on knowing what was to call. I try to address it a little bit in the article, and I'll hopefully provide more color here. My dad's a lawyer, as an example. It's not going to stand in court anytime soon. It can help with writing. It can help with reviewing things that he's working on. It's essentially an associate, and it's getting better every year. But it's not going to stand in court. I think the ideal thing here is people read this and they kind of take it in their own unique way for their own unique needs for what they're doing.

2:06:43John Ferrara:Right. If you're somebody who's very, very exposed, I think there are a lot of people who are who kind of are denying it.

2:06:48Vlad Tenev:Yeah.

2:06:49John Ferrara:I think it's worth paying attention and saying, OK, what is the world going to look like in two, three years? How do I prepare myself? Because it's worth it just in case. There are industries where I think it will take longer, though, even in those industries, for example, let's say legal. those that are just getting started today might have a bit of a rough time whereas a partner might do quite well actually so i think it's very contextual for each person and that's what i wish i kind of got across a bit better um maybe i'll do a follow-up or something like that but yeah yeah i i think it's really tricky to give sort of like a silver bullet one size fits all answer for everybody totally the goal is to say hey look this is happening can you try to think about it about it a little bit for your industry because even if it's going to change an industry yeah and there's like the ability for it to happen.

2:07:32John Ferrara:It's not going to happen overnight even if the technology is there. Though I do think for a lot of these industries the technology will be there relatively soon. It's just a matter of how long it takes to proliferate through society.

2:07:43Harley Finkelstein:Lawyers don't tend to post as much as software engineers. But you can imagine lawyers out there thinking, I don't even write contracts anymore. I just review. Which is kind of what you're seeing most engineers saying. But at the same time, so part of the, I'll be interested to see what happens with like the general legal job market. But we've just been hearing examples from companies being like, I need to hire hundreds of interns that are just going to come at work in a new way and use the tools sort of natively. And you can imagine that happening. But again, there's just, I don't know.

2:08:20Vlad Tenev:Yeah. What advice or what recommendation would you make to a new grad? right now?

2:08:29John Ferrara:It's really tough. And it's one of those areas in the article that I don't think I had a clear answer on, but that's because there is no clear answer. I have a lot of people in my life that have asked me this. And part of my thinking on this article was like, can I answer some of these questions? And there are parts of this that got clear, parts that didn't. This is one of the parts I don't think I have full clarity on. I think knowing the tools is better than not knowing the tools. Focusing on industries that maybe will take a little bit longer to be disrupted so you can entrench yourself a bit first is valuable.

2:09:00John Ferrara:And there are people better than I at knowing which ones those might be. But really, I think it's just getting used to using this. This is the new world. It's like, you know, if a calculator is available, you should probably be learning how to use it. This is that times a thousand. So I think it's just learning to be adaptable. I think there probably is, we'll look back at 10 years and there will be clearly like, this is what you should have done. I don't think anybody knows today, but it's also been very contextual. It's going to depend on what your goals are as a person.

2:09:29Vlad Tenev:Yeah. I mean, obviously, like there's this post about like it's the last moment to join a lab before the takeoff and it'll be fun to join. And that makes a ton of sense. At the same time, I love the idea of being a young person, becoming a hacker, like lightly technical, but really fluid in the tools. And then going and working at like an oil and gas company and just being like the most cracked, most productive person at this company that has like assets. and you're going to be able to just do so much more across the organization and be that like, you know, 1 ,000x intern basically. Jordy, where do you want to go?

2:10:03Harley Finkelstein:A lot of comments from people asking if AI wrote the essay. Oh, yeah. What's your writing process actually like these days?

2:10:12Vlad Tenev:It didn't stick out to me as AI, but you tell me.

2:10:14Harley Finkelstein:You probably, if you did use AI, you pulled out a lot of the em dashes. Yeah. It did help a lot.

2:10:21John Ferrara:And I think that's kind of the point. A lot of people are dunking on me for saying that. And I posted that. I used that.

2:10:26Harley Finkelstein:Yeah, it's not really a gotcha if it did insane numbers. And it's not a lot. If you're upfront about it, it's fine.

2:10:36John Ferrara:It's like proving the point. It's like people are saying this thing sucks at X, Y, and Z, but look, it's 50 million views. There's a reason that I'm talking about this stuff. And I think there's little details I'll get wrong here because this has been a crazy couple of days. But the way that I approached it was, again, I wanted to write sort of like a Dario style essay, but for the average person. So what I started doing is I have like lists of like all the things that have like sort of made me think over the years that I agree with. And I've sort of points on what I agree with in each of those articles, what I disagree with, what I think has been wrong, what hasn't.

2:11:09John Ferrara:And I've kind of dumped this all in. And I used Claude for this, even though I think Codex is way better for engineering. Claude is better for this sort of stuff. I dumped all those articles in and I said, OK, here's what I agree with. Here's what I don't. Um, and then I basically spoke to it for like an hour with my own thoughts and my own feelings and how I wanted to present it and what I think actually makes sense. Cause a lot of these things past kind of are somewhat accurate, somewhat not. And I iterated with the AI for, for many, many hours going back and forth until I finally felt like, okay, it's time to write.

2:11:37John Ferrara:And I kind of had to put out a whole sheet on how to do this. And then I actually went and I, uh, took that and wrote the first draft myself. And then there were obviously parts I struggled with. I had the AI come and help. Um, I held it, I had to kind of like work on the wording with me. And then once I had a first draft, I brought it back and I had it critiqued. And that's kind of, there's obviously more details. Yeah.

2:11:56Vlad Tenev:But I mean, I think when people lob the, this is AI, they think that you, that your prompt was like, write an essay that will get 50 million views. And it just like one shots. It's like, no, this is a collab back and forth. Yeah, of course. Yeah. Yeah. We tried that on X.

2:12:14Harley Finkelstein:A lot of hashtags.

2:12:16Vlad Tenev:Yeah. Yeah. Oh, yeah. Yeah. It can be a little rough. Um, yeah. Yeah. Fascinating. Um, Jordi, anything else?

2:12:24Harley Finkelstein:Uh, no. What are you, what are you, what are you going to do next?

2:12:26Vlad Tenev:Yeah. Yeah. Well, I mean, I I've noticed from your portfolio that there's a lot of, uh, chip companies, hard tech investments. Like what are you most excited about just in the economy broadly?

2:12:37John Ferrara:I mean, in terms of what I'm investing in and I intentionally try to leave this out of the article because I wanted the article to be just purely my message sort of kind of like have to deal with the sort of interplay of that. But in terms of what I actually believe in. I think the chip companies are very interesting. I was, you know, I don't know if you saw a couple of years ago, I kind of helped Grok blow up and that worked out quite well. I mean, etched a few others like that. I also think the rails are going to be very important. I tend to invest in, you know, I just started my fund around this thesis that there are going to be sort of these things that AI needs to proliferate, right?

2:13:10John Ferrara:It's not just the model itself and the weights itself, but it's the, you know, the rails for them to communicate with each other. and I just invested in a new company, Agent Relay, that's about to come out that I think is going to be really exciting there. I also did the Agent Mail, so very, very similar. Daytona. SF Compute's a little different, but I think they're going to be, which Evan is a killer. I'm sort of interested in that sort of stuff. Like, how do you take the models and then bring them out of their boxes? Because this is obviously happening, and you just kind of want to put your money where it's going to grow, obviously.

2:13:42Vlad Tenev:Yeah, it feels like there's, whenever something crazy happens, There's a lot of like, it's almost like nerve wracking panic. But I do think we're in this moment right now where there's going to be a re-evaluation of how value accrues in tech. Because tech has become everything. Like, you know, car companies are tech companies now. Everything's a tech company. But the business models are wildly different. And, you know, the software agents are going to accelerate some companies. They're going to damage some companies. And we're going to be following it all right here. But we appreciate you taking the time to come chat with us.

2:14:15Harley Finkelstein:Yeah, get some sleep.

2:14:16Vlad Tenev:Congratulations on the massive article. I mean, I definitely agree with the point of like, we're not talking about the latest updates to AI broadly enough.

2:14:29Harley Finkelstein:I do think it's interesting. Some people will read this, let's say they're a firefighter or a school teacher, and be like, wait, I'm going to have to do less paperwork. Oh, yeah. There's actually a lot of people that should see this and be excited.

2:14:42Vlad Tenev:But that's a good thing. There are some beautiful white pills. There's obviously some quagmires and some quakesand you want to avoid, but this is how technology is rolled out and adopted. And so you want to skate where the puck is. But we appreciate you coming on the show and breaking it down for us. Thanks so much, Matt. We'll talk to you soon. Have a good one. Good to see you. Let me tell you about Gemini 3 Pro, Google's most intelligent model yet, state-of-the-art reasoning, next-level vibe coding, and deep multimodal understanding. And without further ado, we have Vlad Tenev from Robin Hood in the Restream Waiting Room.

2:15:14Vlad Tenev:Let's bring Vlad into the TVP and Ultradone. Vlad, how are you doing? Whoa, cactus. Cactus. How are you doing? I like that. Is the cactus symbolic of something?

2:15:24John Ferrara:Well, I love succulents. And I think we live in a dangerous world, gentlemen. You know, you turn around, you just got to be careful. So it's a constant reminder that you just have to watch your back.

2:15:36Vlad Tenev:With a physical cactus behind you. Yes, you need to physically watch your back. Don't back up during this interview. I love it. I have to really be careful here.

2:15:43Harley Finkelstein:I love cactuses, too. This is probably going to inspire us to get some cacti. Cacti. Sorry to be picked in. No, no, you're right. We'll get some cacti around this. I'm more of a Christmas tree guy. I like big Christmas trees. No, but I've been missing having some plants in the office.

2:15:57Vlad Tenev:Yes, anyway. Sorry, we're not here to talk about plants.

2:15:59John Ferrara:And you know what's the thing about this cactus is? Yes. You think that it's very dangerous, but you can train yourself to actually like.

2:16:06Vlad Tenev:No way. Whoa. Yeah, yeah. Alpha right here. Yeah, it's all about the angle. This is amazing. I had no idea that you could do that. Fearless CEO touches cactus. That's great. How's business? What's new in your world?

2:16:22John Ferrara:Well, we've got a lot of things going down. You know, I know it's the day after earnings, but we're always looking forward to the future. And what I did at earnings outlined our path for 2026. So a couple interesting things. Number one in active traders, we're pushing hard on prediction markets. We think that we're in the midst of a prediction market super cycle. And eventually, this asset class is going to go from tens of billions to trillions in annual volume. So we're in the thicks of that. We're also pushing on a bunch of initiatives that I care about super personally. Private markets and family finance.

2:17:03John Ferrara:So through this year, if you look at the end of the year, Robinhood should be better for you the more family members use it. We want to get your partners on Robinhood, your children, your parents, grandparents, the whole family. And we're building tools accordingly with that. And then private markets. I think access to private markets is one of the biggest inequities in financial services today. So we're just working really hard to solve that for people. very, very quickly and urgently.

2:17:35Harley Finkelstein:Yeah, more specifically, you guys have a fund set up. I imagine there's more going on. Where's private markets as a category going on the platform? Because fundamentally, the problem of a lot of people have been excited about these billion-dollar companies and watched them go from single-digit billion to hundreds of billions of dollars and having to just sit on the sidelines and hold SaaS has been rough for a lot of people over the last year.

2:18:07John Ferrara:And I think it's really a continuation of a trend that's been going on for decades, right? It's gotten harder and harder to go public. And at the same time, more and more attractive and easier to raise capital as a private company. And our efforts in the U.S. to stem the tide are Robinhood Ventures, which is currently on file with the SEC. We filed our N2, which you can think of as kind of S1 for funds. So we're in the strict quiet period for that, so I can't talk about the funds specifically. But in the U.S., we're very focused on solving this problem, and we think we have a path. and internationally we're going to push forward on tokenization last year we did our open ai and spacex stock token giveaways which showed us that there was just voracious demand for for access to these types of products so this year it'll be about hopefully getting from the giveaway stage to making those products real and tradable for customers and also getting the companies to engage in it willingly.

2:19:22John Ferrara:I think we experimented a little bit, but we realized where we'd like to be is making it clear to companies that this is something they should want and benefit from just as much as it is to the retail shareholder.

2:19:36Vlad Tenev:If you could rewind, how would you have let retail traders invest in Robinhood? Would you have done it at seed round if you could have? Series A, Series B? Would that have been a headache? Would it have been worth it? Walk me through if you could replay.

2:19:54John Ferrara:We absolutely would have done it at seed. Not a lot of people know this about Robinhood, but Robinhood was actually, we had kind of a hard time raising our seed round. And so we talked to probably over 100 investors. At one point, Robinhood was live on AngelList, if you remember that platform. And you could invest in Robinhood at seed at a$10 million valuation cap. So effectively think of it as a$10 million valuation. And we would take all comers. I mean, we would pitch, you know, middle-aged ex-retirees from Nebraska the same way that we would pitch like Andreessen Horowitz or Sequoia. And, you know, they would ask us questions.

2:20:43John Ferrara:And if they wanted to invest, we typically would just let them invest. So we have tons of shareholders that were just essentially retail. I mean, high net worth, maybe, but they were just normal people. And, you know, some of them even have messaged us. They held through IPO and over the years and have done quite well. So I absolutely understatement.

2:21:08Harley Finkelstein:Yeah, I want to I want to go back. Yeah, I want to go back to prediction markets. Prediction markets are bringing new people to the Robinhood platform. That's exciting for the business. The pushback and concern that people have is like people coming on. Maybe they want to trade the Super Bowl. are those people going to make great financial decisions on the Robinhood platform? Obviously, you guys are an open platform, people can do whatever they want. But what are you going to be looking for to make sure that, you know, over time, there's, you know, I think that the general concern is, you know, I'm not going to use the G word, but you know, bringing like trading, high risk trading to the platform.

2:21:54Harley Finkelstein:There's some very real kind of concerns around that. So how How are you making sure this kind of rollout as prediction markets as a category grow, still serve the overall user base?

2:22:04John Ferrara:Yeah, I think this is one of the things that we're actively working on. I think you have some customers that really love prediction markets. And for them, they want it to be easier to get to and more intuitive. And they don't like, they would probably say that our experience right now buries them too much and we make them too hard to get to. And then you have customers that don't want anything to do with it. They don't want to see it. And so we've been actively working on greater personalization so that we can let customers opt in or out if they'd like. And also, we can detect automatically when someone wants to see that content in different places.

2:22:45John Ferrara:So this is just, I mean, prediction markets are kind of a test case. It's where it's most acute. but we see it across the entire spectrum of products as we expand the breadth of our super app offering. For example, we have a credit card. We have banking now. Banking is a separate app, and you have some customers saying, well, I'm kind of annoyed having to go through two different apps to get access to banking. Can't we put it in the same one? Others want it to be separate it and prefer it. And so we're continuing to experiment with this stuff. But where it ends is just a really, really tightly personalized experience, depending on what each customer is looking for and expecting.

2:23:32John Ferrara:And I don't think, I think we're actually breaking new ground. I don't think financial services companies have done that. You see that a lot with consumer products, but we're investing a lot on the machine learning infrastructure on the AI side into, delivering that for customers across our entire product suite. And I'd say more generally, prediction markets, one of the unique things we have is we're not a monoline prediction markets player. So we have the suite of products. We can offer you a lot of things. And what we've been seeing increasingly is prediction markets have been great at attracting a new type of customer who previously may have not been as interested in Robinhood.

2:24:14John Ferrara:You know, they hear about us, they download the app, they onboard for prediction markets, and we're making that process easier and simpler. And then we can onboard them to all sorts of other stuff. So be it retirement accounts, our credit card, our banking product. And I think that's just something that's generally good for these customers. I see nothing wrong with someone coming in for prediction markets, but then discovering our retirement account.

2:24:42Harley Finkelstein:Yeah, I certainly hope that people come in, maybe they want to trade something that's happening in the news or a game or something like that, and they realize, hey, I actually just want to save a good amount of my paycheck every month, invest in stable assets, and invest in my retirement.

2:24:58John Ferrara:I think that's actually true because I think the media talks about these as two different types of people. You have your prediction markets users users and your people that are interested in stable retirement. But what we increasingly see is that actually it's the same people. And, you know, I might be interested, I'm obviously interested in a retirement account. I might have a small portfolio for my prediction markets or my options trading or my more speculative trades. But having both together in one roof makes it a more valuable service for me.

2:25:32Vlad Tenev:How do you think about the news generation from prediction markets? It's always been an interesting way. We pull up prediction markets all the time to understand what markets think about how many SpaceX launches there will be this year. Do you want to do more in content driven by prediction markets? Yeah.

2:25:57John Ferrara:And we've been doing that quite a bit already. We have a whole slew of prediction markets that are non-sports. And actually, one of the interesting things that we saw was the week after the NFL season ended, we had the government shutdown. And the prediction market contract on the government shutdown actually drove a ton of volume because it was on everyone's mind. And people wanted to see what the current status was, how likely it is. and, of course, some portion of those customers traded. So we think that'll be a bigger and bigger thing. And again, as we make it easier to surface things that are trending and things that we think you might be interested in, I think that'll strengthen the use case of looking at prediction markets as a source of news.

2:26:47Harley Finkelstein:How do you think the wealth management industry broadly will adapt to AI? I think there's a lot of conversation recently around, hey, do I need to pay somebody 1 % if I can ask an LLM, hey, what's a good strategy for somebody that makes X amount of money a year and wants to retire at this point and wants to take a little risk but not too much? And you can ask some questions about it. So it feels like that model could be threatened or at least margins could compress. But how are you thinking about it, both as an opportunity from Robinhood and then how the industry will have to evolve?

2:27:26John Ferrara:Yeah, I think there's going to be a lot of disruption by AI. I mean, we're starting to see it already. And we have Robinhood Cortex, which really has done well, sort of like helping customers think through their trading, their sort of self-directed activity. But we've already begun conversations with regulators about how to bring Cortex to advice, making recommendations and doing ongoing portfolio management. So obviously, we'll want to roll that out safely and in a trustworthy way, but it's coming. And I actually think on the human advisor side, a lot of people prefer a human advisor. They prefer the relationship.

2:28:10John Ferrara:They like to have someone that has the full picture and that they can talk to. So I don't think that's going away. And in fact, AI is going to be a really integral part in streamlining the workflow of those people. so that rather than serving 50 clients per advisor, you go to serving 500 or possibly more. So I think you're going to see both models continue, but costs and efficiency and capabilities continue to grow for each of them.

2:28:43Vlad Tenev:What's the status of copy trading? There's a lot of people that are excited about situational awareness, what Leopold's doing over there. How many clicks is it to copy his strategy? And how closely is it possible to copy these days the big funds that have generated a lot of excitement?

2:29:02John Ferrara:Yeah, well, we have a product coming out, Robinhood Social, which should commence rolling out in just like weeks to low single digit months. So we're kind of putting the finishing touches on internal testing. We just integrated prediction markets, which actually makes the feed much more dynamic. And when we announced it, one of the features that was particularly popular was whale tracking. So following Nancy Pelosi's trades and other things like that. So we're going to make it really easy to see what others are doing.

2:29:39Vlad Tenev:It is such a funny world we live in. It's the Nancy Pelosi stock ticker. ticker and yeah uh endlessly entertaining category always always new innovation but congrats on the progress uh that uh robin hood social feature uh how much of it was vibe coded how much of a speed up are you getting internally like what is the software engineering org look like these days in an era of coding agents yeah i mean we we've certainly been continuing to hire

2:30:10John Ferrara:software engineers. Perhaps not at the, definitely not at the rate we were hiring in 2021. But one of the reasons we've been able to deliver this high product velocity and keep costs relatively flat is because of the productivity improvements we've seen with AI. And there's two things that we sort of like talked about at earnings. When we look at internal operations, the two areas that move the needle are software engineering and customer support. And I think we are at or at the very least near best in class for both of those. So customer support side, 75 plus percent of all tickets are handled by AI, including licensed cases that would have previously required a licensed brokerage professional.

2:31:00John Ferrara:And we thought, I mean, frankly, we thought that would be further away we were able to to get there and deliver a great experience relatively quickly and on the software engineering side it's been tremendous i mean with every new generation of models you look at you know opus 4.6 now you've got codex uh you can essentially have it running autonomously overnight checking its own output debugging itself and have it do the work that probably would have taken an individual software engineer weeks to do while you sleep. And one year ago, that wasn't possible. So the acceleration from each new generation of models is tremendous.

2:31:46John Ferrara:And I think there's going to be lots and lots of disruption. You can kind of see the market starting to digest that. But I think the firms that adopt AI and our actual technology companies, this is the opportunity to dramatically accelerate relative to incumbents. And financial services, you know, a lot of our competitors aren't really even on cloud infrastructure anymore. They're still on mainframes. So I think it's going to become increasingly tough.

2:32:18Harley Finkelstein:Last question, then we'll let you go if you have another second. How are you thinking about M &A? You guys clearly have built the muscle to take new products from zero to one. I'm sure you have a lot of confidence around that. But what's interesting from an acquisition standpoint? What's your M &A team spending time on generally?

2:32:37John Ferrara:I mean, we're certainly always, always looking. Last year, we were quite active with a number of acquisitions. And I think we've really built the muscle to integrate them well. in particular, you have Bitstamp, which since we closed that acquisition has basically doubled in revenue. And typically when you go through an integration like this, it's tougher, right? Because things tend to slow down, but we've been able to actually accelerate as we've integrated. So that's good to see. And we're on the lookout. A lot of people are bearish on the crypto industry right now. We remain bullish on crypto.

2:33:14John Ferrara:And we think that now's the time for builders to build. And just like in the past, the cycle goes up and down, but long run, we think crypto is going to become the financial system and they're going to converge. And so I think we're still investing heavily there.

2:33:32Vlad Tenev:That's awesome. Very cool. Yeah. Yeah. Thank you so much for taking the time to come chat with us. Very, very interesting. Thanks, John. Thanks, Courtney. Yeah. Hope you have a good rest of your day.

2:33:41Harley Finkelstein:It's funny. So many other CEOs come on and they're dealing with the crazy volatility in the market and you're just like, you're like first time. Yeah. It's great. So good. Good to see you.

2:33:53Vlad Tenev:Grizzled.

2:33:53Harley Finkelstein:Congrats. We'll talk to you later. Have a good one. Cheers. Goodbye.

2:33:57Vlad Tenev:Let me tell you about Cisco. Unlock infrastructure for the AI era. Unlock seamless real-time experiences and new value with Cisco. And without further ado, we have Jeff Lawson.

2:34:07John Ferrara:And we are starting the lightning round.

2:34:09Vlad Tenev:We are starting the Lambda lightning round. Let's go. Let's activate the gong. Thank you, Ben. We have Jeff Lawson in the Restream waiting room. Actually, are we delayed here? Let's figure it out. We can go back to the timeline. I will tell you about Lambda because it's actually the next one in the stack. Lambda is the super intelligence cloud building AI supercomputers for training and inference that scale from one GPU to hundreds of thousands. We have Sam Blonde coming on the show in just a few minutes. And I believe we have.

2:34:42Harley Finkelstein:This kind of gets at what I was asking Vlad about. Buko says, unless you have 5 million, AI is already good enough to be your financial advisor. Even then it's probably good enough. Try it. Share net worth. Where, how you've allocated assets, what your goals are. Ask it to analyze and identify opportunities for improvement. Stress test, different scenarios. It gets basically everything right. So bullish on just out of the box LLMs for helping with this stuff. Very good.

2:35:08Vlad Tenev:Well, let's bring Jeff Lawson in to the TBP and Ultradome. How are you doing? What's happening? Very good. Thanks, guys. Thank you so much for taking the time to come chat with us. First time on the show, I mean, I feel like most people will be familiar with your career, but please give us a brief introduction.

2:35:24Matt Shumer:All right. So I'm Jeff. I've been an entrepreneur my whole career. I've been a software developer and started a bunch of companies on the internet. So very first company in the dot-com era, was the first CTO of StubHub, was one of the first product managers at AWS, but then founded the company that most people know me for, which is Twilio, back in 2008. So enabling software developers to build communications and all the apps that we use all day and grew that over 16 years to about$4 billion in revenue and took it public in 2016. And now I'm here in the Fusion Energy world with Inertia. Amazing.

2:35:59Vlad Tenev:I have to say thank you because Twilio sponsored a lot of hackathons when I was in college and it was like the go-to like fun tool to pull off the shelf and build something that was a little bit more interactive than just a normal website i built something that would text me every day with little updates and stuff it was like so much fun to be tinkering in that era so thank you for everything you did at twilio but it was a crowd pleaser yeah you know it just like delightful product experience uh so many interesting unlocks and then obviously like huge partnerships you see powering Uber and all the big companies that need to send a lot of text messages.

2:36:34Vlad Tenev:So obviously, fantastic business. But get us up to speed on Inertia Enterprises.

2:36:39Matt Shumer:Absolutely. Well, so Inertia is the commercial fusion energy company. And I know that sounds like saying we were selling unicorns or something, but that's because fusion energy has been the thing of myth for nearly 100 years since it was first hypothesized because fusion energy is the perfect form of energy for humanity. It is clean. It is safe. It is low cost. It is abundant. The only question has ever been, will it work? Well, that changed in 2022 when the scientists at Lawrence Livermore National Lab actually created the first experiment to create energy with fusion. And this was a huge breakthrough.

2:37:15Matt Shumer:And so Inertia is commercializing that experiment and taking it out of the lab and bringing it to the grid. And the way we do that is with a few things. Well, They hit this tiny little peppercorn-sized bit of fusion fuel with the world's largest laser. You get it just right, you compress it, and you create this reaction that releases a bunch of energy. And so for us, commercialization means, number one, we're starting with proven science. This is pretty important, right? You want to have science, basic science that works before you start commercializing. So that's step one. Step two, we're going to go build the world's most powerful laser.

2:37:50Matt Shumer:It is a million times more powerful than the laser they currently use. Whoa. Of the more national lab. That's crazy. It is. Big number. 20 times more efficient. It is one-tenth the size. So it's a really modern but the coolest laser the humanity will have ever built. The third thing we're going to go do is build the world's first fusion fuel factory. We are making these fuel targets in an automated, scaled way. And then last, we bring all that together and we build a grid scale gigawatt scale power plant that has enough energy to be able to power a medium to large size city, a million homes you can power with this facility.

2:38:27Matt Shumer:So that's our plan. That's actually, that's so crazy.

2:38:30Vlad Tenev:Talk to me about the capital intensivity of this. This is hard tech. This is energy. This is a big deal. How much did you raise?

2:38:37Harley Finkelstein:I love that you're doing the meme too, the like, you know, make it build software, you know, and then do the. The hardest thing possible, right? That's great.

2:38:47Matt Shumer:Well, you know, I feel like that's one of the things that is exciting to do. Like having done the software thing for most of my career, taking what I've learned in terms of building a company and scaling a company and now bringing it to this new domain is really exciting. So in terms of the capital intensity, you're right. Fusion is not a cheap endeavor. So today we announced our first capital raise,$450 million. It's a milestone-based approach.

2:39:15Harley Finkelstein:Nothing like 450 to kick things off. That's a fantastic round. It's a good way to get started.

2:39:22Matt Shumer:Thanks, thanks. So we've got a milestone-based approach. So basically we take this, and we've got a great group of investors who have come around and said, hey, look, you know, Fusion is something that we want to invest in, but we want to invest in a commercialization effort, not in basic science. And so that's what our investors have come to the table to do. And so we're really excited to be embarking on this. Now, we will raise more capital later, especially as we get to that last stage, which is to go build the first fusion power plant. That'll be capital intensive. But this funding is allowing us to take a lot of the design work that we're doing today and then start building these prototypes.

2:39:55Matt Shumer:So scaled down version of that laser, a scaled down version of that target assembly plant in order to prove that these technologies are ready for the scale up.

2:40:04Harley Finkelstein:Yeah. With a business like this, it feels like, you know, obviously the TAM is massive. It's no doubt that the world needs tons and tons of energy. We want as much of it as possible. How do you look at the risk to the business? You've got technical risk, execution risk, regulatory risk. What's your kind of personal framework, and how are you trying to, like, you know, chase each one of those down and to, you know, eliminate that risk?

2:40:31Matt Shumer:Yeah, absolutely. You know, it's interesting. It's the exact opposite of the world of software. The world of software, it was always, you know, you can build just about anything. The only question is, does the world want it? Is anyone going to pay you for it? This is the opposite. You know the world needs energy, especially if it is cheap, clean, abundant, and safe. The only question has always been, will it work?

2:40:50Harley Finkelstein:Can you do it?

2:40:51Matt Shumer:And so here we are with the physics of it now proven. It's a scale-up. And so what does that scale-up consist of? Well, it is essentially building supply chains, building vendor bases, and scaling up a number of fields to meet the demands that a first power plant would put on some new technologies. So, for example, we're working with a lot of companies in the laser diode field to scale up production of the particular kinds of laser diodes that we need to go build our plant. And in order to do that, we have to scale up production of these particular semiconductor diodes by about 1 ,000x what the global production is today.

2:41:29Matt Shumer:And so you look at something like that, and you're like, okay, that is doable. It's a lot of hard work. And so the milestones that we look at is like, okay, we're bringing the vendors along for the ride. We have to do some invention, some automation. But this looks a lot like bringing a consumer product to the market. I think about here's what Apple does every year. They dream up a new iPhone, and then they figure out how are we going to make a billion of them, and then they introduce it to the world. And every time they do that, there's a bunch of hard things they have to go figure out about how they're going to take a design and manufacture them at scale and with a certain yield and with a certain precision.

2:42:02Matt Shumer:And so those are the kinds of undertakings that we are going under for both the laser scale up as well as our target development scale up.

2:42:10Vlad Tenev:How important is it to find a dance partner with one of the hyperscalers now? I've seen a number of news articles about not just fusion, but also fission projects and just big energy projects. These things are measured in years, if not decades. And it feels like there's a lot of advantages to having at least an LOI that says, hey, if we can deliver this, AWS wants it or something like that. How are you thinking about spinning up the biz dev muscle of the business, maybe before you break ground?

2:42:44Matt Shumer:Well, you know, I think that if anybody is able to deliver on cheap, abundant, clean, safe energy, is there any question that you will have hires for it? You know, I don't think that's really the problem. I think really the problem is actually bringing those things to reality. Sure. But we are excited to be—

2:43:01Harley Finkelstein:And so when you say the people that are, like, you know, still have all this risk, technical risk to their business, can they scale it up, regulatory risk, all that, and they're focused on, like, finding their dance partner, it's like, is that just for hype? And do you think maybe that's like the wrong focus or is creating some amount of hype necessary to attract capital? I mean, you have the luxury of a track record that allows you to raise half a billion dollars out the gate. Whereas someone else might need to find that dance partner to get any type of excitement around what they're doing.

2:43:31Matt Shumer:Well, I think really it's about focusing on the core progress that needs to be made. Because no matter what your approach is, there's a lot of things that have to get proven. There's a lot of things that have to be done. And so I don't think that necessarily the validation of a buyer is the most important thing for the stage at which most fusion companies are at. That said, we were happy to have Google Ventures become a part of our round. So they are an investor in inertia. And obviously, we think that if we are able to deliver on the promise of clean, safe, cheap, abundant energy, that they and many others will be interested buyers.

2:44:07Matt Shumer:But really, our focus is heads down. Let's make it work. Let's do the engineering and the scale-up and the supply chain work that is needed in order to go build that first plant.

2:44:17Vlad Tenev:Why inertia? How did you pick the name? Well,

2:44:21Matt Shumer:there are two major types of fusion methods. One of them, which I think you may have heard about before, is magnetic confinement fusion. The other one is called inertial confinement fusion. And we are doing the inertial confinement fusion using lasers. And so given that, I thought the word inertia was a super interesting word. because it both can refer to the lack of change of direction, right? If you have inertia, you're like, well, you're not going to move. And I thought that actually spoke to humanity's dependence on carbon-based energy, interestingly enough. But inertia, the flip side of inertia is once you have momentum, once you are moving, it's hard to stop you.

2:45:04Matt Shumer:And, of course, that's our goal with building the company. And so I thought there was a number of interesting things about the name. But it all stems from the basic technology that we're pursuing, which is inertial confinement fusion.

2:45:13Vlad Tenev:That makes sense.

2:45:14Harley Finkelstein:Prior to this, you've kind of lived and built through a number of cycles. How have you been processing kind of everything else happening in venture outside of energy?

2:45:25Matt Shumer:Yeah, you know, it's interesting. We started StubHub. It was during the dot-com meltdown in 2000. Started Twilio during 2008, the financial crisis. You were born in the darkness.

2:45:37Harley Finkelstein:Yeah.

2:45:38Matt Shumer:You know, I think the thing is you've got to start companies irrespective of the macro environment that you're operating in because the macro environment is going to change. And so the business itself has to be built on the fundamentals of whatever is going to make that business successful. So for the case of, say, StubHub or Twilio, the fundamental was focus on customers. If customers need what we're doing, great. We'll eventually show the world and win and do all the things we need to do. If we're not serving customers, then we won't. It's as simple as that. For inertia, it's a little bit different because we're not going to have customers in the short term.

2:46:07Matt Shumer:But I like to say our biggest customer is the laws of science. So we always have to be serving the laws of physics. And if we focus on that, you've got to focus your time talking to your customers.

2:46:19Harley Finkelstein:Physics, laws of science.

2:46:21Matt Shumer:Our customer is the universe. But if we focus on that, of doing all the engineering, all the scale-up work we have to go do to go take the proven result and now build it bigger and into a power plant, that's the thing. By the time we're done with that and proving that out, whatever the current economic story of the day is or even the story of the year is, we'll be long gone and we'll be talking about something else. And that's how I've always looked at my startups.

2:46:47Harley Finkelstein:What's the hardest role to hire for right now?

2:46:52Matt Shumer:Well, you know what's interesting? One of the things I like and I'm really excited about with Inertia is that we are not fighting the talent war for AI engineers. Now, we have software engineers on staff, and we are hiring people versed in AI, but it's not the same kind of people that, you know, that Meta and Google and every startup down the street, and I'm here in San Francisco at the moment, is fighting for. And you see some pretty bonkers things going on in the talent market right now for those, you know, foundational AI engineers. And I'm, quite frankly, just happy that we're not in the market for that talent.

2:47:29Matt Shumer:And we're hiring for a lot of engineers, but not necessarily those. We're hiring for mechanical engineers and materials engineers and industrial engineers. We're hiring people from the likes of Apple, people who've figured out how to take these products every year and take them from a designer's desktop into a factory where they're making billions of them. We are hiring people from the likes of Waymo, where they had to figure out over the last decade, hey, how are we going to build this first-of-a-kind autonomous car and scale up things like LiDAR and make them better and cheaper? and faster and all these things in order to enable those amazing cars we see driving around autonomously here in San Francisco and elsewhere.

2:48:06Matt Shumer:And it's like those are the types of people who've done those scale-ups are the most, you know, a lot of the interesting talent that we're going after right now. And I think that's just a little bit different than the, you know, than the AI, let's just call it a hot mess right now in the industry.

2:48:24Vlad Tenev:Well, thank you so much for taking the time to come by and explain it all to us. This is such a cool project. We're excited.

2:48:31Harley Finkelstein:Come back on anytime.

2:48:32Vlad Tenev:Everyone's rooting for you in the chat. Big updates, small updates. You're going to be legendary. Thank you for all the hard work. It's going to be probably decades, but hopefully we'll have you back a bunch along the journey. This is a lot of fun.

2:48:43Matt Shumer:Hopefully a decade and then the next decade.

2:48:47Vlad Tenev:There we go.

2:48:48Matt Shumer:Thank you very much, guys. Appreciate it.

2:48:49Vlad Tenev:Have a great rest of your day. We'll talk to you soon. And without further ado, we have Sam Blonde coming in to the TBP and Ultradome. Sam, good to see you. How are you doing?

2:49:00Sam Blond:I'm awesome. Thank you for having me, guys. Here, let's start off with a little bit of fun. I think the squad is ready for a big show. Whoa! And we're going to gong it right back at you. Let's go! Let's go! Wow, look at that team.

2:49:12Vlad Tenev:Here we go.

2:49:17Harley Finkelstein:Amazing. Amazing. Hey, team.

2:49:20Vlad Tenev:Wow. So, coming out of stealth today, it seems like you hired half of San Francisco already. How big is the team? How long have you actually been working on this? Because we worked together, what, two years ago, and then you called me and you were ready to launch.

2:49:34Sam Blond:That's right. So we really started working on this September of 24. Okay. Coogan, awesome to see you again. Geordi, great to see you. Great to see you. Hopefully the first of many. And started September of 24. Squad's about going on 40. Wow. Yeah, going on 40, a lot of EPD, and we're starting to build out go-to-market, too. So we're having a lot of fun.

2:49:58Vlad Tenev:Introduce the full product, the company. Since no one's heard about it yet, but you're launching the deck. People have heard of Monaco.

2:50:03Harley Finkelstein:They've heard of Monaco. But now they've heard of the real Monaco.

2:50:06Vlad Tenev:Real Monaco.

2:50:08Sam Blond:There's a maybe fun story with Monaco. We've already been in a bit of a lawsuit, so we can go there. But it's entertaining for the viewers. Absolutely. Okay, so more importantly, we're an AI sales platform. Yes. And I think like, you know, two minute version or one minute version is on the tools side or a replacement for legacy CRM. Most commonly, this is going to be like your HubSpot, your Adio, your Salesforce. We also replace all of the point solutions that integrate to those tools. So this is going to be data provider like an Apollo or a Zoom Info. We provide all of your signals like a clay.

2:50:45Sam Blond:We do your call recording like a otter or fireflies. We do all your sequences like a number of different companies that do outbound in a deeply integrated platform. And for us, that's really a means to an end, which is we're replacing full sales workflows with agents. And so we have agents who identify the right company to target, the right person to target, the right message to send. We leverage signals to incorporate into that message. When you get a response, we schedule a meeting. We record that meeting. We update your pipeline. and really architected in a way that is not to be reactive to user input.

2:51:22Sam Blond:If you've ever worked in a sales tool, you sort of get a database that's largely empty that you need to tell it what to do. Day one, when you log into Monaco, everything is already done for you. You're just sort of a beneficiary and recipient of things like meetings, feedback on things you can be doing better and more.

2:51:41Harley Finkelstein:Yeah, is launching with a platform like this only possible because of AI and the advancements in coding agents and coding tools? Because it seems like you're sort of re-bundling. You listed off maybe like 10 different point solutions that are now coming together. And it's notable that you guys didn't come out of stealth like maybe six months ago when you maybe had five of those things operational. But you clearly decided to launch with a full suite.

2:52:10Sam Blond:I think a few things come to mind. One is we are able to build software faster because of the coding co-pilots that you just alluded to. And so I don't know that we would have been able to build a Monaco-like platform in the amount of time that we've been able to pre-AI. We're also building for a segment of the market. We're purpose-built for earlier stage startups. So this is series A seed stage companies. The needs of these businesses are relatively unsophisticated compared to much larger companies. And so because we're purpose built for a type of company that doesn't need super deep functionality, unlike the database side.

2:52:51Sam Blond:In fact, when you have super deep functionality, it makes it more difficult to interact with. And so you bundle all these tools together. If you're a series A startup, it actually works against you because the tools are so complicated to integrate, customize, work with. And again, we're purpose-built for that company. And then the last thing that comes to mind is, wouldn't it be possible to build Monaco without AI because we're AI native? So everything that we do is sort of oriented in the decisions that we make are around how can we program the platform to have an agent doing this rather than a user.

2:53:26Sam Blond:And so very different user experience than if you're used to logging into these sort of reactive databases. I listed a few of them. HubSpot, Adio, Salesforce. Totally different user experience. Yeah.

2:53:39Vlad Tenev:Talk about the domain. You got monaco.com. Talk about the lawsuit. Talk about how you picked Monaco to begin with. I want the full story.

2:53:49Sam Blond:Okay. So naming was hard. It took us a couple months and tried a bunch of different names. And you can't just pick a name that you like. We couldn't have just called ourselves sales.com because one, we wanted the.com to be available. And two, you can't name it if something already has that name. So I was trying to associate the brand with luxury premium, was thinking through what are some names that are typically associated with that. And I came up with Monaco. My older brother, who is a co-founder, when I told him I really liked the name Monaco, his response was, That's the stupidest name ever.

2:54:28Sam Blond:What are we going to just call it? Like New York? And so he wasn't a fan. But I think like over time, started socializing it with some other people and started picking up some traction. There are a few things that we really like about it. It's a cool sounding word. Like Monaco is just like a nice word itself. The place is associated with, I don't know, wealth and success. Yachts, Formula One. Yachts. a big one is Formula One a lot of really cool things that we can do there with the brand our logo is actually like a checkered flag that's going up and to the right and let's see so the domain dispute we ended up calling it Monaco really liked the domain

2:55:12Vlad Tenev:was the domain just available or did you have to go to a broker and get a domain like that doesn't just sit for

2:55:18Harley Finkelstein:$12 on GoDaddy

2:55:21Sam Blond:we had monaco.co and that was a couple thousand dollars. I think all is said and done, both the domain cost and the broker's fees, we spent like, I don't know, another eight or$900 ,000 to add the M. So we got monaco.co evolved to monaco.com. We did use a broker. Shout out to Loomis if they're watching. I love Loomis.

2:55:44Harley Finkelstein:I've worked with them on a bunch of domains.

2:55:46Sam Blond:That's awesome. Shout out Loomis.

2:55:47Harley Finkelstein:Cool. But then the dispute. Yeah, yeah, the dispute. What actually happened?

2:55:51Sam Blond:So shortly after we acquired the domain, I think it had sort of been parked for a little while. And we get this like hate mail from the escrow company that was holding the domain that the government of Monaco had filed what's called a UDRP dispute against us. We had never heard that this was a thing. I didn't know there was like a regulatory body for domains. Anyway, they made like all sorts of what turned out to be unsubstantiated like trademark claims. I tried to get legal representation. This was like a couple-month-long process that required all sorts of evidence and war. And we ended up winning the case.

2:56:29Sam Blond:So all's well that ends well. We are Monaco. It's official. Monaco.com.

2:56:35Harley Finkelstein:Just went to war with a country before you even launched. Not many. Wartime CEO. There we go. What are you learning? We've been covering the Sasspocalypse. You guys have the benefit of kind of understanding the world in its current form. and building from the ground up. But a lot of questions around seat-based pricing. Do companies need to evolve to more value-based pricing? What are you learning about kind of the broader concerns around enterprise software and how are you kind of applying it?

2:57:07Sam Blond:Well, I can tell you what we're doing right now. We're in public beta. So yesterday we were in private beta. Today we're in public beta. We'll eventually get to general availability. Right now, we're pricing around simplicity. So we charge a platform fee that includes all of the compute that you need. Relative to these other companies that I've referenced, we have very high compute costs because of all of the agents that are doing the work. We also have really high servicing costs. We pair what we call forward deployed AEs with every customer that signs up. So we charge a platform fee. Those things are included.

2:57:43Sam Blond:Right now, we're charging annual platform fee of$25 ,000. that's discounted to what it will be as we go into GA. And we will, I suspect, when somebody who is at the company that is much smarter than me on the finance side, I think we will be in this sort of like you pay a minimum amount for the initial compute and then it's pay as you go. It just makes far more sense with the value that we're adding to do this usage-based sort of compute-predicated pricing. But right now we're solving for simplicity and eliminating friction from onboarding customers. And this has been a price point that has been met with very little resistance.

2:58:23Harley Finkelstein:How do you think sales is evolving? If you compare any software engineer says, oh, I don't write any code. I just review code now. What's the equivalent experience in sales? Where do you think it goes?

2:58:37Sam Blond:Yeah, it's a thoughtful question. You know, look, my answer may change six to 12 months from now. So let me give you the like today answer. it doesn't seem that the sort of customer-facing relationship-building aspect of sales is going anywhere. In fact, that seems today to be the highest ROI activity that salespeople, in some of our customers' cases, founders are doing, trying to replace the founder for many of the startups that are selling our product with some sort of agent that is pretending to be a salesperson or whatever it might be. People want to talk to someone in sales oftentimes. And so what we're doing is we're actually optimizing around that.

2:59:22Sam Blond:It's the sort of non-customer facing activities that we believe agents are far better at. So I'll give some examples. Building and scoring your addressable market. So what we're effectively doing is we are telling you without being customer facing, who are the best companies for you to target and why? Here's your prioritized list. We've added buyers to that prioritized list. We've added sequences based off of signals to that prioritized list. We are going to automate those sequences with no human involvement. And you, as the beneficiary, whether you're a sales rep or a founder, you will spend your time customer-facing the way that I'm speaking with you guys right now.

3:00:03Sam Blond:And we're going to optimize everything in the platform around that experience, including the post-follow-up. So you get off the call. We have the call transcript. We've written an email for you to follow up with that person. It's very opinionated and trained on the way that we think about sales and go to market. You can review that email and click send. It's time for the next call. And so that's the sort of optimization that we believe AI is influencing the function of sales right now around. It's getting more qualified demos, helping you close more of those customers, and actually emphasizing the relationship building that happens, that is sort of customer facing.

3:00:43Vlad Tenev:What's the best way to get a job as a salesperson in 2026? Advice for young people, maybe mid-career people, somebody who wants to sort of be on, I mean, you worked in sales, had a great career. What does it take to be the next Sam Blond?

3:01:00Sam Blond:oh that's um uh my answer might come off as too arrogant why don't i just come why don't i come up with like uh what what what would i do if i wanted a uh job in monaco i i think um uh i think there are um a couple things that stand out right now we we've come out of this like and i think we're long out of the the sort of like covet time period we're five days a week at least in san Francisco. And so anybody that is sort of looking for this, like, I expect to be able to, you know, potentially work from home one or two days that like sort of COVID hangover, that's a thing of the past. So I think from a quality standpoint, people that are just looking to win understand that it's like hard work to work and win at a company like Monaco.

3:01:49Sam Blond:I do think that like track record of performance is an important thing. And so if you are, you know, a little bit later in your career or have several years of experience leveraging the relationships and the network that you've developed through that process, I think for us, it's going to be hard to hire someone that sort of comes to the website and fills out a, like, I want to be a senior AE at this company, like a job application without a close connection. They're going to send you a bottle of champagne, right?

3:02:22Vlad Tenev:That's the secret?

3:02:24Sam Blond:Look, I won't say I can't be bought.

3:02:30Vlad Tenev:You said it, though, not me. Yeah, if you're looking for a job, send a case of champagne. You'll get the interview, maybe. Who knows? You've got to have the resume, too, and the skills to back it up. Jordan, anything else?

3:02:41Harley Finkelstein:No, this was great. Congratulations on the whole team on all the progress. Yeah, I'm excited to watch more companies pick this up and start to grow their revenue faster, hopefully. Yeah, this is awesome. Thanks so much, guys. Great to have you on. Come back on soon.

3:02:55Sam Blond:Thank you for having me. Congrats on the success. We'll talk soon. Take care. Cheers. Have a good one.

3:02:59Vlad Tenev:Let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agent to deploy web apps, servers, databases, and more, while Railway automatically takes care of scaling, monitoring, and security. And without further ado, we have someone in person. Who is it? It's John. How are you doing, John? Hi. What's happening? Welcome. Thank you. Grab a seat. Even better in person.

3:03:26Jeff Lawson:Yes, even better in person. What brings you to L.A.? Well, a couple of other meetings, but I figured I had to stop by. Yeah. And you know, little known fact, I was actually in journalism school before, along with data science. I was also majoring in journalism in Northwestern. And if this had been an option when I was still in school, I might have not dropped out and just tried to get a job here.

3:03:45Vlad Tenev:Who are your heroes? Who's the goat journalist in your opinion?

3:03:48Jeff Lawson:Oh, man. Well, I dropped out for a reason. Didn't learn anyone's name.

3:03:54Vlad Tenev:That's funny. Well, reintroduce yourself. Tell everyone what you're working on, what you're building.

3:03:59Jeff Lawson:For sure. So I'm the founder and CEO of Juxta, which is a GPS alternative that can track anywhere on Earth, outdoors, indoors, underground, without relying on hardware, like satellite speakers or cameras. So that's a bunch of buzzwords to say.

3:04:12Vlad Tenev:Without external.

3:04:12Jeff Lawson:Without external hardware, right? We still need your hardware. We use IMUs that are already installed on devices like phones, robots, embedded devices, medical devices.

3:04:22Vlad Tenev:So no magnetic fields involved?

3:04:23Jeff Lawson:No, that's kind of a... Different tech, right? It's different tech, and the key differentiator in what we've built is something called synthetic fingerprinting, which is this idea of being able to simulate IMU measurements at scale for different people and objects. And the value behind that is essentially from this desk here, we could map out and simulate an environment anywhere in the world, an Amazon warehouse in Boston, and then have that up and running like in an hour.

3:04:49Vlad Tenev:Okay.

3:04:49Jeff Lawson:If you wanted to typically use like a magnetic approach, you actually, because it's hard to simulate magnetic movement because it's usually dependent on objects that are hard to predict being in the environment. Sure. You actually have to go to that warehouse, collect that data manually, and then train models on that. And so our idea is that the ultimate scalability with any positioning system is one that can be deployed fully remotely Because I can't possibly go to you know every corner of the earth and install beacons cameras or you know collect fingerprint data

3:05:16Vlad Tenev:So what's the what's the textbook device android phone iphone? Yes

3:05:21Jeff Lawson:So I mean every every mobile phone today has an imu inside of it So like the same thing that's powering your compass app, right?

3:05:27Vlad Tenev:Accelerometers gyroscopes are what we rely on are they getting better because I feel like the compass app came out I don't know, a decade ago, and it works as well as I can tell.

3:05:36Jeff Lawson:I mean, they've gotten better. So the traditional problem you'll see in the inertial measurement unit space, if that's a space that you find yourself in, is that drift is pretty prominent. So in theory, if we can do something that's faster, better, cheaper, and more accurate, everyone's like, why haven't this been done before, right? So the idea is typically because IMU's drift a lot. So if you want to actually track an object over a long period of time, Typically, they veer off course and then you end up losing.

3:06:03Vlad Tenev:So the example is the phones here You know the phones here to start then you raise it one foot the IMU knows you went up a foot You put it down a foot that I am out IMU knows you went down So you know where you are?

3:06:14Jeff Lawson:Yeah, that'd be probably like an accelerometer like a altitude sensor But we're talking about usually speed and orientation vectors So the simplest way to think about it is right if you know you're starting position and you're stacking vectors related to speed and direction That's called dead reckoning. That's the approach where you're not actually that's just like very drift prone right and so then what are what we do with our simulation and then our kind of the models that we've built is what mitigates drift by like 90 plus percent yeah and is able to track people and things over long periods of time so the value adds are places like in defense and military right because GPS gets jammed like instantly in any war zone yep in indoor environments like warehouses hospitals any sort of like logistics center so those are kind of where we target first obviously our long-term goals to sort of be like a like I said, a pretty wide scale GPS replacement.

3:07:01You can imagine like that way down the road,

3:07:04Jeff Lawson:eventually someone like FEMA being able to use this to find survivors of natural disasters under piles of rubble where a GPS signal might not be able to penetrate through. But in the near term, those commercial opportunities are pretty.

3:07:13Vlad Tenev:Do you have any customers yet or do you have pilots running and how big are these firms that you're working with?

3:07:19Jeff Lawson:Yeah. So we work with, like I said, kind of those three industries mostly right now, logistics, healthcare, in defense um we have three customers our acvs are in like the mid to low six figures so um those deployments the first deployments are actually going on in march um which is exciting for us and do they have to change anything on the hardware side no so we're we work kind of um out of the box by design again the whole goal is we want to eliminate as much uh especially compared to like rtls solutions like beacons or cameras um we want to eliminate as much friction as possible so we integrate directly onto device, and they don't require any setup.

3:07:54Vlad Tenev:Yeah. How did you get into this? Were you just annoyed by messy, noisy data, and you were like, I got to fix this?

3:08:01Harley Finkelstein:It kept going into GPS denied zone.

3:08:03Jeff Lawson:Yeah, you find yourself there all the time. Well, that's the same reason why if you're ever driving in a city and it tells you you're going the wrong way on your Maps app, and it's really annoying. That's why, for reference. Even outdoors, those tall buildings get in the way of the signals. But I got into it largely because both of my parents were in the U.S. military, in the Navy. And so for a cumulative set of years, they were deployed between Afghanistan, Asia, all over. And so I think I kind of was exposed early on to the idea of wanting to know where your parents were when you were a kid.

3:08:30Jeff Lawson:And it's funny how you develop these random hyperfixations, maybe at that age, that feel random. And then over time, an elementary explanation from my mom or dad kind of converted into a prolonged interest.

3:08:40Vlad Tenev:That's cool. What's the status of the company? How much have you raised?

3:08:43Jeff Lawson:Yeah, so we raised, out of YC, which we were in the summer 25 batch, we raised a little over$5 million. That's it. Nice.

3:08:49Vlad Tenev:You never hit the gong for this race.

3:08:54Jeff Lawson:Congratulations. It hits different in person, too. It is louder. No, it's better in person. But raised$5 million, led by CRV out of YC. Charles River Ventures, correct? Exactly. Well, yeah, I should have probably known what that stood for before I took the money. I learned that after the fact. You locked in. Yeah. So how big is the team? Right now it's seven. Okay. It's a pretty technically dense problem, and so essentially all of our talent are like the top. There's a very small community of hyper-talented engineers and researchers, mostly in academia, who focus on no hardware tracking, simulated data, all that stuff.

3:09:28Jeff Lawson:We've been fortunate enough to probably have what I feel comfortable in saying is probably the highest concentration of those people at a single company today. Maybe Waymo or maybe Tesla, who does a lot of LiDAR and SLAM stuff. But yeah, seven people, pretty much all engineers.

3:09:41Vlad Tenev:And the IMU manufacturers, they don't want to get into this side of the software problem for their clients providing API that is less noisy?

3:09:53Jeff Lawson:Yeah, it's like probably a business opportunity for them. But it's a pretty drastically different space than manufacturing sensors that are the size of your pinky nail into sort of building simulations and all these drift loss functions that are, again, pretty concentrated in the know-how among the 10 or so people that can actually build that across the world.

3:10:13Vlad Tenev:Yeah. Makes a lot of sense. What was the biggest thing you learned in YC?

3:10:17Jeff Lawson:Well, YC was interesting for us because we are, I think like 95 % of our batch was B2B SaaS or like agents, I think even maybe. I remember. Which was, yeah, yeah, you were there.

3:10:27Harley Finkelstein:You got agents for your agents.

3:10:29Jeff Lawson:I know.

3:10:29Vlad Tenev:Yeah, it was a lot of agent infrastructure companies. I think you were reflecting.

3:10:32Jeff Lawson:You know, we're actually in our office at Union Square is Browser Base's old office. Oh, no way. So hopefully we're summoning some of the good juju from them. Yeah, yeah. No, YC was good for us because they basically shove all of the non-agent companies into one group office hours. So like our eight companies in our weekly meetings was like a missile company. Oh, yeah. I think Perseus Defense, Knox Metals, if you're familiar with it. Oh, yeah, I love them. Us, Robotics, like a robotics company. Another couple guys building like magnesium alternatives. So it was a pretty eclectic group. Nobody was really focused on the same thing, but they were really good conversations.

3:11:09Jeff Lawson:So my favorite part about that was probably the group office hours. If you can like finagle your way into the eight or nine deep tech companies. Yeah. What are you trying to prove out before the A? Before well, I mean realistically like I think for us It's like a technical question more than there's like a market question, right? Because again if we're coming to right now 90 % of all human and object movement globally is in GPS denied areas Which makes sense if you think about it like right now we're in one anytime you're indoors underground in a combat zone There's no location data being tracked so you're missing tons of analytics So I think the appeal is pretty strong in terms of the need and we can do it If our technology works as we say it does at a fraction of the price and a fraction of the time with the same accuracy and reliability So essentially, it just comes down to proving out the tech.

3:11:51Jeff Lawson:And we also have a lot of pre-orders, aside from the customers we already have, that I think will propel us to all the revenue benchmarks that are important. For us at this point, it's essentially proving out that we're able to, again, mainly reduce drift meaningfully so that we can track people for hours or eventually days on end without it being a significant problem.

3:12:11Harley Finkelstein:I've got to ask how you're thinking about privacy, security, all those things. I'm sure the internet, if you're successful, you'll be one of the most hated people on the internet. No, I know. Just from the schizos in particular.

3:12:22Jeff Lawson:Well, I've been seeing all the hearings online of all the, yeah, the hearings get pretty tense now. Get ready.

3:12:26Vlad Tenev:Weather modification is what I'm thinking of.

3:12:28Jeff Lawson:Yeah, exactly. So I'm like, maybe next up. But no, I mean, privacy is essentially something that we're usually selling to vendors or companies who have end users on their side. Sure. So by and large, our direct interface is not with the people who are being tracked with their location. That doesn't mean it's not important for us. Obviously, we have our methods about it being encrypted. Working a lot with defense in those environments has to be very secure. But generally, when we work with health care, for instance, tracking staff is usually a matter of what does it fall within the union rights?

3:13:01Jeff Lawson:Is it something that if it's on a hospital-issued device, usually they're allowed to track them without it being a problem? If it's on a personal device, then it obviously comes down to the direct discretion of the employee.

3:13:11Vlad Tenev:And even the personal devices, like, you know, Apple can track you, but Apple has spent probably billions of dollars talking about how they treat privacy seriously. You sort of know that if you open up the Maps app, you're paying the GPS.

3:13:24Jeff Lawson:Yeah, and for what it's worth, like we're using also the standard infrastructure that Apple is also using in their devices. So like the actual things that we're going off of in terms of hardware have already been greenlit and approved by hopefully institutions that people trust. Again, though, it'll ultimately probably come down mostly to the interactions and the relationships between the customers that we sell to and their customers. You know, my long-term vision, though, is right now we're selling commercial. It'd be great over the course of, you know, 5, 10 years, you can see a use case where, you know, there's a consumer-facing version of Juxto.

3:13:54Jeff Lawson:Instead of Google Maps or Apple Maps, you get the added benefit of, again, a navigation tool that will never lose your direction when you're in a big city. You can route it from your house to your exact appointment room at a hospital. It'll give you routing on the road to the parking. Once you're in the hospital, it'll navigate you to the room. So there's those easy added benefits. But more than that, when I think about FEMA tracking, are people going to download a FEMA app to be tracked by FEMA in the event they're a natural disaster? Probably not. So I think about in terms of how we can ultimately eventually interface with people directly is we might partner with companies or agencies like FEMA or whoever else who want to track location in sparing moments.

3:14:30Jeff Lawson:and they basically, as a user on like juxtamaps, you can opt in to FEMA tracking you if you live in a natural disaster area and one strikes. And then that's sort of a consent process that we would deal with directly with the customer. But for now, that's probably much too ambitious and way down the road.

3:14:43Vlad Tenev:Yeah, also the phone OEMs would probably want something like this. Like, you know, Apple just like randomly rolled out, like, hey, if you don't have cell service, like you can send one text message via a very slow satellite. And everyone's like, awesome. If I'm ever lost hiking, I'll probably text someone. What does the data side of the business look like? Is this a big data problem where you need to actually source a ton of data, run a model on top?

3:15:05Jeff Lawson:So the big, again, the big breakthrough with us has been the synthetic fingerprinting process. So we're the first company publicly that I know of that's built an IMU simulator at scale that's as reliable as ours is. So essentially we can be given an input of an, we do a lot of asset tracking too. So we do a lot of like warehouses and different like shipments. given the dimensions, weight, height, whatever, of an object or person, we can then simulate it in our physics-based engine, have them moving around a 3D space. Because we basically take in a map or a satellite image of whatever the space is, we use computer vision to render it into this 3D model, then we simulate all these things moving around the space and create these basically anchor points, benchmarks of what IMU measurements are going to be at certain spots given how that person is moving and where they started and all that other stuff.

3:15:51Jeff Lawson:And that allows us to benchmark that data. So we're able to, that ability to synthetically generate it is what makes it so scalable. In terms of like, again, long-term, really long-term visions, like my anticipation is we'll be one of the largest holders of all labeled map and floor plan data in the world by a good margin, right? There's actually, it's a pretty untapped but important space to have labeled data as you can imagine, right? Yeah. And because the input, the only input that we get from users is the floor plan or the satellite image of the space they want to track.

3:16:21Vlad Tenev:Yeah.

3:16:21Jeff Lawson:So if we were to partner with, let's say, a major grocery store chain across the United States, we'll probably be the only company at the moment that has that much labeled data about aisles, shelves, checkout lines, everything like that. So that's more of like a monetization route down the road. In terms of data that we need as our input, the synthetic process kind of allows us to circumvent a lot of that.

3:16:42Vlad Tenev:Interesting. Yeah, that makes a ton of sense. Well, great to get the update. Congratulations.

3:16:47Harley Finkelstein:Hang out for a little bit. Yeah, we'll hang out after.

3:16:50Vlad Tenev:Thanks. We got to plant the bomb. We got to tell everyone thank you for watching the show. There's one more video I want you to watch.

3:16:58Harley Finkelstein:I don't think you've seen it yet. This one is for you.

3:17:01Vlad Tenev:Okay, I'm excited. Let's pull it up. Sharing it with the team. What else is going on? We got through a lot of stuff today. Oh, I think I know what you're pulling up. I think I know. You guys got it? Let's see. Blue Water Autonomy had an announcement. Okay, let's watch this. POV, nightly real scroll, but you're performatively into physical media. So they print them out. I could get into this. Commenting. Commenting, okay. Double tap a like, okay.

3:17:35Harley Finkelstein:This is how you're going to start consuming short form.

3:17:40Vlad Tenev:Yeah, people always lament the fact that we don't print out the tweets anymore. But a lot of the tweets have videos, and you can't print those out. But maybe you can. Maybe you actually can print out the videos. Anything else you want to talk about before we get out of here?

3:17:54Harley Finkelstein:No, fun show today. Thank you, guys.

3:17:56Vlad Tenev:You don't want to talk about the Hermes leather pool table in emerald green? Plant that bomb and we'll tell everyone about the leather pool table. It's emerald green. This would look great in the Ultradome. It's only$264 ,000. What a steal for an Hermes pool table. Absolutely stunning. Ooh, and they put the H on the cue ball. I like that little detail. I like it. Let everyone know you got the Hermes version.

3:18:22Harley Finkelstein:Could be passed down for generations.

3:18:23Vlad Tenev:Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter at tbpn.com, and we will see you tomorrow at 11 a.m. Pacific Sharp. Good bye.

3:18:33Jeff Lawson:Nice work, brothers. I'll see you on the next one.