Karri Saarinen, Sean Frank, Semil Shah, Dan Lorenc, Google's Earnings Power Holding Up Well, Intel Says Layoffs are in Store, The Relationship Between Netflix and The NFL, Elon's Friends Sell Access to Stakes in Private Companies

27:21Wow. So it's the 911, I guess it's the 911 RS every single year. So, wow. Unreal. Incredible. And such dedication. I mean, Steve Jobs had the same dedication where he would buy a new 911 every single year, right? but I mean I guess he would like rotate that I was in the Middle East once and got to see a private collection and the collector had basically around 10 full scale warehouses on his property and he would not just get you know a Range Rover every year he would get every color that they made it from the manufacturer in that year so it was literally like a rainbow collection where you'd walk into one of the warehouses and it's just every single color of car in that year.

28:08And then you would do it for the next year. You do it for Range Rover. You do it for Land Rover. You do it for Ferrari. So that's true wealth because the depreciation on a Range Rover is insane. Unlike some of these Porsches. Some of them do pop. So in the new house, he can slip away to a studio when he wants and Harris is able to keep more of his 50 prized vehicles in California where he likes to take them out for early morning jaunts. He said he drives every one of his Porsches. We'd love to see a car collector who puts miles on the cars, doesn't just keep them in the plastic. You've got to be dailying your Countach, your LM002.

28:45It is a fun dynamic. Daily your supercars. If you have 50 cars in your collection, it's actually hard to put a meaningful amount of miles. Oh, totally. Spreading the love. Of course. And I mean, it's not like he's taking them to LA. He's probably just driving them around the neighborhood. You basically need a full-time mechanic. Like having a collection once you get into that range and above. Yep. Jay Leno has like a whole team just for registration because there's new registrations like every year. Well, you have 50 cars that every single week you're doing registration stuff. It's crazy. So even just one of his Porsches, the 1984 911 SCRS, he's been offered more than$3 million for.

29:21He said, no. He said, I'm dating. Yep. So they have no plans to live in the Palm Springs area until they helped a couple. They had no plans to live there until they helped a couple of friends locate and renovate a house at a country club. And then in 2015, they heard about a house for sale and decided to buy it after admiring its mid-century modern forms on Google Earth. They later learned it was designed by the prominent Palm Springs architect, Donald Wexler. when they renovated the 1957 house, they returned it as closely as possible to the original appearance. A reverence for the classics. This guy seems like the man.

30:06The new house across the street is more than just luxury for the two men. It embodies everything Harris has learned in more than 40 years of designing gracious modern residences. Everything Reese Roberts has learned from furnishing them, almost always with a mix of important vintage pieces and items of his own design. The two men work together on about three quarters of their projects. Each also accepts separate commissions. I love that. It's like, we'll work together, but you're paying us both. It's not a package deal. And also our dog's gonna fly private forever. I love it. It's the best. I love the journal for profiling these people.

30:42You just, you know, where else would you find this story? From the outside, the house is deliberately unimposing. There's no fence. The pool doesn't require one because the whole country club is fenced. Harris explains, Breeze Roberts and his landscape design partner, David Kelly, added topography to the previously flat site to match that of the golf course. They even gave the pool the shape of one of the courses nearby water hazards. The result is that the adjoining fairway seems to continue right to their front door. The club thinks of it more as a golf course and we think we have more lawn.

31:14Interesting. The club thinks of it as more golf course. It's honestly a good trade. We think of it as we have more lawn. Just don't do a long, you know, sort of phone call pacing around the backyard. Yeah, you might get smacked in the head. I like this. He calls it visual borrowing. And so when you blend your backyard into the golf course, it just feels like your backyard extends endlessly. Very, very cool. Inside, the house is light-filled thanks to the oversized windows. to complete the landscaping. They splurged on over 100 palm, olive, and fruit trees at the cost of more than 300K. You'll love to see it.

31:52He's 72 years old, and he designed a lot of the furniture himself. Fantastic. Cool little backstory here. Harris says, I don't think of myself as rich. During his childhood in northeastern Florida, he says it was hard for his parents to scrape together his high school tuition of$700. Some nights were spent flounder gigging, a method of fishing that involves wading in deep water with a car battery in a wash tub.

32:18This is amazing. And you're building a chat GBT wrapper and you think you're scrappy. Yeah, this is a different level. From flounder gigging to every single Porsche 911. He says, I got to repeat this. A method of fishing that involves wading in knee-deep water with a car battery in a wash tub attached to a tractor headlight on a pole. Can we get the founder mode sound? Founder. Founder mode. That's so good. So he went to architecture school at Princeton on a full scholarship, and then 34 years, he lived in a rent-stabilized loft on Harrison Street in Tribeca, where the rent never went above$300.

33:02That's so insane to be pulling in like millions of dollars collecting. Like, oh yes, every single new Porsche 911 RS I buy, and my rent is$300 a month. 300 bucks. The landlord eventually asked him to leave but also hired him to convert the building into condos. Among other things, he created a brand new penthouse that sold for over 18 million. Wow. Reese Roberts grew up in England and spent summers in the Spanish artist colony where he was fascinated by the work of Peter Harnden, an American architect who was modernizing old fisherman cottages for expats. He had undergraduate and graduate degrees from University of Cambridge.

33:39The two men working together in 1985, they married in 2013 together. Stephen Harris Architects and Reese Roberts and partners have about 40 employees. What a small organization to create such a fantastic outcome. That's how many can fit in their Manhattan office buildings on Chamber Street, which is right across the street from their loft. So the men don't plan on letting their firms get any bigger. While pouring millions into the new Rancho Mirage house, Harris says, my biggest fear is that we would like the old house better. But according to both men, that hasn't happened. The new house owes a lot to the old one.

34:14But it works much better for us. You'll love to see it. Fantastic. And, you know, in that house, what type of bed should they be sleeping on? I think they should be sleeping on an 8sleep. Nights that fuel your best days. Every 8sleep guarantees an overnight success. They have an overnight success guarantee. So go to 8sleep.com. clinically backed sleep fitness. Let me guess, John. You don't even want to look at your sleep score. Oh, have you seen the new app, by the way? They shipped it. The new 8Sleep app is actually incredible. You should download it if you have an 8Sleep. Make sure you're updated.

34:49I think it's a way better design. I got a 91 last night. Not bad. I got a 96. 96, of course. And we were just texting with Brian Johnson. Brian Johnson. He's coming on the show in a little bit. And I sent him my sleep score from yesterday, and he said, great job. so uh do you uh brian johnson is that the liver king no that's the other that's the other brian johnson there's two brian johnson yes oh that's right that's right well we should have them both on the sleep i would love to have the i would love to have yeah you would you would love to have the liver king on um but telling uh having brian johnson when you posted that i was like this is the most dangerous post you've ever shared because he is normally so critical and i was like he's going to roast you for not being at 100 i mean i hit it for work was 100 it was 100 oh it's 100 but i i had a feeling that's like a normal thing for me yeah yeah that's like that's not like i thought i thought he would dig into one of the submetrics and be like secretly you're gonna die tomorrow unless you change everything because he's normally just like so on top of it just rip us to shreds but it'll be entertainment good yeah anyway uh let's move on to another uh story in the mansion section of the wall this is john's favorite section this is the highlight of my week um gene simmons of kiss lists his beverly hills house for 13.995 million dollars he's giving it away but this is why it's funny so he says he he listed the house but he's not gonna sell to just anyone he said well you have such wonderful times there you don't want some schmuck in the place you call home after you sell it.

36:26This is his quote, no drugs, no alcoholics. I don't want anybody coming in here who's going to destroy the place. I love he's selling it, but he's not letting go of control. Yes, yes, yes. And I think we should enforce the exact same rule. If you're an alcoholic, if you're on drugs, do not listen to TVPN. Unsubscribe. That's a little bit hard. If you are any of those things. as I chug Celsius get help and you're still welcome to listen to the show while you get on the right path yes yes yes we're rooting for you but don't try and bid on Gene Simmons' house because he wants you to clean it up before you spend $14 million it is hilarious because it could be an awesome arc if you are who is in who is how can you have $14 million to buy a house and also be a schmuck like it's very weird you'd have to be a very very high functioning I gotta push back there There's a lot of high-functioning drug abusers in the world, John.

37:26I suppose. I suppose. I hate to break your golden retriever mindset. It's been said I have the mind of a golden retriever. And maybe I got this one wrong. Anyway, the house is beautiful. Four bedrooms, roughly 7 ,740 square foot home. Sits on a hill with views of Coldwater Canyon, Century City, and the Pacific Ocean. and so if you're in the market and you're going to join us in Los Angeles we are super bullish on Los Angeles we think it's the future of media, we think it's potentially if things go right, the Silicon Valley of media, could be the home of entertainment when we're done and so check it out fantastic, Simmons says I'm the most blessed human being on the planet these hard times, you don't want to say I have too many houses, but we have too many properties said Simmons they have a house in whistler canada two homes in malibu two houses for their children and they will be spending more time at their additional properties this is in quote whatever wifey wants certainly certainly happy wife happy life gene simmons just sending it talking to a wall street to the journal just yeah you know dorsy uh amenities include an art gallery space where he hangs his own artwork and a soundproofed home theater where simmons said he screens movies for his production company, Simmons Hamilton Productions, which released the movie Deep Water in 2022.

38:46The home is outfitted with high-end smart home devices. It's like a 22nd century house, said Simmons. He's truly living in the future. I had to go out and buy a simple microwave so that I could press one button and heat things up because the coffee maker, the cappuccino maker, the time machine, all that stuff was built into the wall. Voice activated, I might add. It was so complex, I couldn't make it work. He was like, yeah, just get the nicest stuff. And it was too complicated for what i've been saying about smart homes yes we want to rip it out i would invest in a dumb home startup just a bunch of knobs all physical yeah yeah get uh teenage engineering in there yeah i want to be able to set the temperature in my home that would be super cool like an odometer style thing where you're just like yep uh outside the half acre lot it has a solar paneled 40 foot black lined infinity pool and 1800 square feet of patio space he said he likes sitting outside with his children and significant others they eat popcorn and hot dogs and play the adult card game, Cards Against Humanity.

39:42Of course we laugh our heads off, you said. It's amazing. I love this. They're describing his career. They say, the Kiss co-founder. He's the co-founder of Kiss. He's not just in the band. Also known as the demon. He's known for wearing black and white makeup, spitting blood on stage. In addition to his work as a musician, he has a restaurant chain, a record label, a reality show, and other ventures. In the fourth quarter, luxury single-family homes. He really beat the allegations that like, you know, a metal rock enthusiast, you know, become consumed by the devil. He's just like, no drugs, no alcohol.

40:18Yeah, I'm going to go wear some crazy makeup and spit some blood on stage and rock out. Yeah, they call me the demon. They call me the demon, but I really just want to play Cards Against Humanity with my kids and eat hot dogs. And laugh my freaking head off. It's amazing. Anyway, last, let's do one more ad and then we'll move on to another ad for a Mississippi home and it's selling for$14 million. So let's tell you about Numeral. We've called it before. We called it AGI, Sales Tax God, Magical Sales Tax Intelligence from the Heavens. Let's take a moment to say thank you to Numeral. Get on Numeral.

40:52And my company, Lucy, is officially a Numeral customer. I can't recommend it enough. We're dogfooding it here, Golden Retriever style. So anyway, the$14 million home in Mississippi that you probably have your eyes on, it's being listed by Brett Favre the legendary quarterback Green Bay Packers and if you're looking for acreage this is the spot they have 465 acres for only 14 million dollars yeah and you know there's a lot of hubbub about new cities new startup cities across the globe you don't have to go across the globe to build your 500 acre compound. You can just buy this one for$14 million.

41:39Yeah. Honestly, that's the strategy. Head to Silicon Valley. Head to Sand Hill Road. Hey, we need 20 mil. We're going to build a new city. And then buy this and then just go live in it and be like, mission accomplished. We did our job. We built the new town. Get residents to come in and pay you$5 ,000 a month to be part of the city as a sort of citizenship flat tax. So just like throw parties? No, basically get your ARR well into the seven figures. So it's not a complete fraud. Yeah, and then I imagine you could do a lot of other things. So Brett Favre is 55 years old now. He's the star quarterback.

42:19Played 16 seasons at the Green Bay Packers, followed by one with the New York Jets and two with the Minnesota Vikings. Wow, 19 seasons in the NFL. He was definitely sleeping on an eight sleep. Oh, yeah, for sure. Early prototype, I would imagine. He retired in 2010 with one Super Bowl ring, and he joined the Pro Football Hall of Fame in 2016, just shortly after retiring. Pretty great. He grew up in Mississippi, and they used this roughly 465-acre property called Black Creek Farm, another named house. We love named houses on this show. As a primary resident since the late 1990s, and there's a little bit of interesting history here about how they built this up over the last 20 years.

42:59And so the parcel was undeveloped when Favre bought it, said Callahan. Among the first things they built was a structure with horse stables. We've been seeing a lot of folks in the technology journalism industry get into building horse stables because of all the generational wealth. And then a lot of post-exit founders also now following in the footsteps of the technology journalists getting into equestrian dressage, et cetera. And so he built a structure with the horse stables on the first level and guest house on the second level. So smart. Yeah. I mean, this is top tier. This is the playbook.

43:34Exactly. He's run top tier plays for Green Bay. Now he's running top tier plays in the real estate market. And so they lived in the guest house while building the gated main home. That was 20 ,000 square feet, a very reasonable number. That was completed in 2002. And then they built another house, 5 ,000 square feet for the mother-in-law. You'll love to see it showing love to the rest of the family. Do you think this ends up getting a premium? I mean, to put the price$14 million for the 465-acre estate, that's only 329 Tesla Model 3s, which just feels very low to buy the home of a former Hall of Fame.

44:12Yeah, but for the same price, you could also get the Demon's house. You can get the Demon's house. Can we get the Ashton Hall sound? The Demon's house is available. But also this. I mean, these are really. But also, Brett Favre's house is up for sale as well. Somewhere out there, somebody's going to basically make a call. All right, I have$14 million to spend on a home. Yeah, which one are you going with? I'm either going to The Demon or going to Mississippi. Yeah. Brett Favre has a nickname, but Pat McAfee got in a lot of trouble for calling him this. Do you remember this story? I do. He called him the Sticky Finger Bandit.

44:51because of some legal trouble that Brett Favre got into, but Brett Favre denied any wrongdoing, and the case is ongoing, so we will not be calling Brett Favre the Sticky Finger Bandit, but I love these nicknames. I love that we can say the demon. I don't know if I want to call Brett Favre the Sticky Finger Bandit because I don't know anything about the case, and I don't know if he's guilty. You don't know anything about sports, John. I don't know anything about sports, honestly. You thought UFC took place in a circle. I did. I did. but I've learned a lot more and I love the United fisticuff championship.

45:23Now I'm a huge fan. I like the punching. I like the kicking. I like everything else that goes on in the hexagon. Anyway, moving on. The property has two pawns. Bo Nickel is going to be calling into the show early next week. He's got a big fight on May 3rd. I can't, I already have my questions ready. I'm going to be like, which one was better UFC three 75 or UFC five 24. You know, I've been doing the deep dives. I'm going to get the answer from him. I'm going to have him break down the greatest moments of the last thousand UFCs and tell us how it all works. So this house has two ponds, one spanning roughly 3.5 acres and the other spanning two acres.

46:05Those are pretty big ponds. Favre enjoys recreational hunting on the property. That's pretty cool. Has an array of wildlife, including white-tailed deer, wild turkey, and dove. It's so easy to tell when you get so into a story that you're like, okay, actually, we need to go back. Yeah, you can't just leave us hanging here. And not talk about the Pons. Anyway, speaking of Favre, let's do an ad, and then we'll tell you more about the NFL. We'll bring it back to Netflix. So Polymarket, get on Polymarket. We're going to be doing a Polymarket deep dive later in the show. Stay tuned for that. We're reviewing the top eight Polymarket markets that we are tracking in technology.

46:44Anyway, the information has a deep dive. When I think of the information, I think of sports. Sports. And so that's why we're going to be talking about this article today. Yeah. I'm very excited. Yeah, people often call the information like the tech crunch of sports, right? The NFL loves Netflix, but does Netflix want to love the NFL? The assumption has been that the streamers will need sports as much as the leagues need the streamers. The reality is more complicated. We talked about F1, U.S. trying to sell the U.S. television rights to Netflix. Netflix kind of balking at the price and saying not interested.

47:26Who knows? A deal could still happen. But it seems like there's a mismatch between the league's expectation from a pricing standpoint and what the streaming platforms are willing to pay, given, again, that they're sort of at peak market saturation. There's, you know, babies are being born that will someday sign up for Netflix. Yeah, we covered this on Netflix earnings. Like Netflix has great penetration, and sports are important, but sports historically have been the thing that keeps people from cutting the cord. And if you just include it in Netflix, it's not that additive. and so there's a big question of what is the true value of live sports for Netflix.

48:07Now, Hulu went really big into live sports. They have a whole campaign around that, of course, owned by Disney now, but Disney also owns ESPN, so there's a whole flywheel there. So there was a gathering at the Breakers Hotel in Palm Beach, Florida, where the NFL was hosting its annual owners meeting. The Conclave is a big deal for the league, an occasion for it to hash out its multibillion-dollar business deals and discuss what the future may hold. The latest gathering, which lasted over four days, had a notable first-time guest, Ted Sarandos, the co-CEO of Netflix. An absolute dog. Is there another tech company anywhere near the size of Netflix that has co-CEOs?

48:45It's very rare. Very rare. It's very, very rare. Public, but they're private. Yeah, exactly. But I would put them in the same league as Netflix in terms of just overall amazingness. Market dominance. Exactly. He came for a panel discussion about sports on streaming video services like Netflix. and the league revealed that Netflix would air two Christmas games, two Christmas Day games in 2025, just as it did in 2024. Everyone knew Netflix would do at least one Christmas game as part of a three-year deal that began with a pair of Christmas matches last year. The first NFL games ever broadcast on Netflix, but the deal requires Netflix to air one game per year.

49:25So now they're doing two. So they're going a little bit deeper. The media world saw the decision to have two games as Netflix's acknowledgement that it's interested in nurturing its nascent relationship with the league after decades of resisting live sports. For the league's part, it couldn't be happier. We're now in a world where there are some platforms that are doing one deal, you tap into global scale, the NFL's chief media and business officer said. Netflix is one of them. Amazon is certainly becoming that, and YouTube is certainly becoming that. Right now, the league is trying to find a marquee home for an opening week game on September 5th in Brazil.

50:02And while it might go to a TV network, a streamer like Netflix is probably more likely since those companies have greater interest in international audiences. We talked about this with Netflix adding users internationally and more money to spend. And that is a change in the sports world that is upon us. And for us, it comes at a good time as we think about global distribution. And so it'll be interesting to follow what happens with all of these different sports leagues and where they end up. I do think that eventually they have to each sports league has to find a home on a streamer just because I don't see young people ever going back and uncutting the cord and getting on cable.

50:42Signing up for traditional cable. It will either be the Gen Z kids never get into sports really or the league's figure out testosterone has been cut by yeah yeah cali means is really not mincing words of the younger generation he was coming for them not so alpha as it stands but yep anyway uh is there anything else you want to cover on the nfl and netflix no i'm interested to see how this plays out i mean right now it feels like a pretty bad uh fan experience if you're having a kind of like bounce around you know um but and netflix has a lot of really cool i mean netflix has a lot of really cool technology did you ever watch what was that called balder dash or something balder snatch or something they they had a choose your own adventure right video it was kind of black mirror i think it was uh directed by the black mirror team or something you're saying netflix should allow uh sort of create ai generated fan fiction of games where you can create a reality where your team wins every time is that what you're about to say yeah exactly exactly uh no i mean on a serious note there are just losing and it's like do you want to see the final five minutes where they win and then yes that would save a lot of households you know it would it would oh like yeah dad's gonna be in a bad mood unless unless the packers win let's just put on the good ending uh no i mean i i do think netflix has embraced uh technology in obviously a very you know unique way and there are interesting things that you can do over a streaming platform that you can't do over the air.

52:19And so that's things like letting the user choose the camera angle, letting the user choose even subtitles, dubbing, these different things. I made a YouTube video a couple years ago about how, with the advances in artificial intelligence and Wave to Lip, which is an AI model that remaps the lips to a waveform. I think this is what Tyler used to make Delian speak Chinese. Can we pull that video out? Yeah, can we pull up the Dalian speaking Chinese on TVPN? And yeah, drop it in the Banger's tab. But I was very bullish on Netflix in particular, being able to redub every single piece of content with matching lip movements because I'd watched a German show about time travel called Dark on Netflix.

53:11And I was just too golden retriever brained. I couldn't get into it because I didn't want to read the subtitles, but the dubs didn't match up with the lips, and so it was very jarring. And so there's always this big debate about dubs versus subs. Are you dubbing the words over, or are you using subtitles? Let's see, Dalian, I think... 山谷的历史是这样的。 一开始的意图是举办一个大约30到40人的蜿蜒, 但后来人数膨胀到了100人。 我想第一次蜿蜒, 大概有12到13万个人参加。 然后从那时期, 它就不断地几句石头。 我们就像是... 然后从那时期, 它就不断地几句石头。 我们就像是... The whan-ian is getting bigger and bigger. And finally, the whan-ian is becoming very big. They're thinking, wow, we have a lot of very talented people here.

53:51And we're doing a lot of the whan-ian. That's enough of this. I think the people will be doing this. It's really funny when he gets to the chat GPT thing, too, because it doesn't translate those words. All I have to say, Dalian, I really want to be a peijo. Let the audience figure out what that means. And so I was really bullish on Netflix basically doing exactly that, what Tyler was able to do probably in an hour. I doubt knowing how correct Tyler is. It's probably five minutes, honestly. But doing that for every Netflix show, and Mr. Beast has been doing this with localization of all of his content.

54:27Netflix is in a unique position to do that for all of their content and make it even more accessible internationally. That's obviously an incremental source of revenue for them. And then there's a whole bunch of other things that you could imagine Netflix offering unique experiences to NFL fans, whether that's the ability to switch between different games very quickly. Have you ever watched NFL Red Zone? There was a specific channel that would switch from one game to another. It's all the channels. So it would switch from any game that has an exciting moment. It would just cut over to that. And that's something that they were able to do.

55:03It's just a team managing all the streams. But you can imagine a whole bunch of different versions of that. Members of the community that are huge NFL fans are going to be like, oh, great. So John's explaining Red Zone. Yeah. This is great. Anyway, why don't we move on to an ad and then we'll move on to explaining how SPVs work. So after the SPVs happen, the companies go public. Oh, I hear the sound of F1. Oh, is that public.com, the latest sponsor of Aston Martin F1 team? Love to see it. go to public.com, go to the website, create an account, transfer some money in, get set up, and then start hunting for those Aston Martin cars.

55:46They're not easy to find, but if you dig around, you can definitely find them and you can enter to win. And so get on public.com. Anyway, before companies go public, they are private and they're doing a lot of SPVs. And the Wall Street Journal has a little piece about a side hustle for friends of Elon Musk selling access to stakes in his private companies. Lucrative stock deals have allowed SpaceX to avoid public scrutiny, even as it has grown into one of the largest companies in the United States. And we might have to put this in the truth zone, but let's break it down because there are some interesting things here.

56:20So Antonio Gracios and Elon Musk go way back, the Valor Equity Partners founder and family. And his family spend their Christmases with Musk and vacation with him in the Bahamas and Jackson Hole, Wyoming for Gracios. It has been a lucrative relationship. He has become a multi-billionaire, in part by investing in nearly all of Musk's companies over the years, according to public filings and court documents. Now, Gracias and his firm have found another way to cash in on his status in Musk's inner circle by selling wealthy outsiders access to tightly controlled shares in Musk's privately held company.

56:53Jordi, do you want to give us a little 101 on how SPV hustling goes down? I've heard it's very much like club promotion. Is that an apt analogy? Yeah, so the average SPV promoter is similar to a club promoter where they hit you up and they say, hey, coming around later? You want a bottle? You want a table? What's going on? No, I think that analogy is accurate for some SPV leads, but certainly for not all. not for all and yeah I just thought this the the attacks are you know continuing to rain down on Elon from all over the internet yes and I thought the idea that you know the the dynamic that's happening here is a very similar dynamic to what happens at pretty much every single private company in which management teams and CEOs prefer to fundraise from people that they have longstanding relationships with, oftentimes personal relationships with.

57:57And so, um, nothing about this article should be surprising. I mean, I think that, uh, again, uh, over time people have joked about the idea of, I'm an, I'm an investor in SpaceX and you're an investor and sort of like layers, layers, SPVs with high fees. And ultimately that SpaceX has performed so well that you're still up massively unless you were really, really layered. And so I think investors have done fine in this. And I think that in general, this is just a function of there being so much demand for SpaceX shares that these types of fee structures work. The only thing that stood out and that was interesting is that Valor was sort of bundling SpaceX and XAI shares in a single vehicle.

58:49offering, you know, basically doing a$1 billion raise, uh, 200, uh, about 25 % of that was, uh, XAI. So I think that could be more of a function of there just being outsized demand for SpaceX and less, and basically forcing people to say like, you know, you don't really have an option, like you're buying both. Um, that's at least the way I read it. Don't have any inside information. I think there's kind of, uh, two points on SPVs that are interesting. One is that, um, At the ultra growth stage, centicorn level, the fundraisers are the same size as large venture capital fundraisers. And so you might go raise a$2 billion growth fund, and that might be a huge size gong moment.

59:33And you deploy that over a number of years. It's a 10-year fund, and you're expected to have a diverse range of investments across the portfolio. but when you're talking about raising$2 billion, you're talking to LPs that are writing huge checks and those LPs might be fine making effectively a direct investment into a SPV and they treat it just like a growth fund and they're just saying, yes, I'm writing a billion dollar check, I'm writing a hundred million dollar check but instead of going into a growth fund, I'm just going into SpaceX with this. And so that makes sense. On the flip side, I think why SPVs get a bad rep sometimes is that they're assigned at the lower level.

1:00:13If you're doing a$1 million SPV into a$10 million raise, there's just a question about like, wait, there are so many venture capital firms that could just fill out this entire$10 million round. Like, why do we need an SPV? It makes sense why you need an SPV for SpaceX if they're raising$10 billion or something that you don't want to suck up an entire growth fund. And to be clear, Valor and some of the other firms that do this are providing a service in a way to SpaceX because SpaceX doesn't want to have tons of individual shareholders that are going to say, hey, what's the update? It's not just that.

1:00:47It's also legal. So one of the ways SpaceX has been able to maintain its private status is by limiting its investor base. Once there are 2 ,000 holders of record, not including employees who own shares through stock compensation packages, a company is legally required to disclose financial information similar to a public company. And so there was always a fear that if you raised money from a VC and then you ran your company for 10 years, they distribute the shares out and they have more than 2 ,000 LPs. I think this number might have been lower earlier too. But if they distribute LPs and you wind up with 2 ,000 holders of record because you've done so many different raises and so many different party rounds that you wind up with 2 ,000 holders of record, you could be running a small company that now has to disclose financial information similar to a public company.

1:01:36that could be very problematic. And so SPVs have always been a way to kind of tie a bow around a group of holders and then layer these structures. And I think that it's overall fine and doesn't seem like a big deal. But obviously, it's of interest and newsworthy because SpaceX is an interesting company. Elon Musk is an interesting founder. And these deals often don't get exposed. Yeah, what the journal doesn't mention is that even if these investors were just investing directly, spacex can't do general solicitation as a private company yep and nor nor um and the other factor is you still have to be an accredited investor even to invest in these spvs and in fact i think these spvs probably have much more firm uh accreditation checks than yep other spvs that might be investing into figure as an example yep right so uh yeah there's some little bit behind the scenes text from the Twitter deal.

1:02:34Venture capitalist David Sachs texted Musk in 2022 after Musk asked if he would invest in Twitter. I'm personally in and will raise an SPV too if that works for you. And so good communication there from the investor saying, hey, I'm open to doing an SPV. I would love to do that for you, but only if it's helpful. And then on the flip side of that, Musk accused Twitter investor Jason Calacanis of marketing an SPV to randos during the first Twitter fundraise. SPVs are how everyone is doing these deals now. Calacanis responded, but tensions were flaring at that moment, but it seems like they have resolved.

1:03:14And so the sale of these SPVs generates fees, of course, and UBS is also getting in on the action because UBS, Swiss Bank, marketed the deal through its wealth management division. if the article was UBS and Valor Equity offer shares in SpaceX to their client base. Yeah, it's not even tied to a new mark, which would be more interesting to hear about, oh, well, there's new revenue numbers or there's new, on the back of some change in the business, the company's worth more. It's more just like, hey, they're - SpaceX does these a couple times a year, right? Yeah, I mean, Elon's been a master of ensuring fair liquidity to early employees because we've talked to a lot of the early SpaceX employees and investors, and they've been in the company for 20 years now.

1:04:06It's a 2005 company. And so even if you're totally bought in on SpaceX and you worked there for a decade from 2005 to 2015, you took immense risk, you got comped for that in stock, at some point you're going to want to put your kids through college or buy a house. And so having some liquidity makes a ton of sense. Or start a 3D printing company. Yes, I love that. Let's recycle the capital and let all the SpaceX alumni go build fantastic companies. They're very, very interesting. Let's do it. They also profile Luke Nosek, SpaceX board member who worked with Musk at PayPal before joining Peter Thiel's Founders Fund in 2006.

1:04:44He and Musk remained close, sometimes attending game nights in Austin where they played werewolf, which pits villagers against monsters according to a person who knows them. Someone leaked to the journal that they're playing essentially board games. Very fun. Nosek founded Gigafund in 2017 and has purchased roughly$1 billion in secondary sales of SpaceX shares. Probably a great fund in that case. It's pretty good. Gigafund. Best name so far. Gigafund is a great name. It's a great name. This is interesting. MySpace co-founder Berman is getting in on the action. You don't hear about the MySpace mafia very often, but he frequently gets slugs of shares when SpaceX sells them on behalf of employees and earlier investors.

1:05:26His firm, Troy Capital, invested part of a$47 million fund in secondary sales in SpaceX stock in 2022 when the company was valued at roughly$127 billion. And so that investment is probably doing very well. Fishner Wolfson, an early investor in SpaceX and a friend of Founders Fund founder Peter Thiel, another close associate of Musk, also often gets SpaceX shares for his fund, 137 Ventures Management. And so fantastic to see the boys ripping some SPVs. You love to see it. And you love some capital flowing into important companies that are doing great things in space and beyond. Love it. Should we talk about some markets?

1:06:04Yes. Let's go to our polymarket analysis for the day and debate some of these. The first one is the largest company at the end of April. And Apple seems to be running away with it. It's April 25th. Only five more days if Microsoft wants to catch up. But it was a knockout, dragout fight. Mid-month, on April 10th, Microsoft was actually expected to be the number one biggest company. And what did Tim do? He cooked. He cooked. He cooked. And so everyone else is left behind. The options are Apple, Microsoft, NVIDIA, and Amazon. What would it take for Microsoft, NVIDIA, or Amazon to flip Apple next month?

1:06:50I think you've got to see crazy tariffs on Apple that actually stick and hurt iPhone prices and sales. And you need to see increased AI demand for NVIDIA to do it. Something with Amazon. I'm not exactly sure what would be the catalyst there. NVIDIA is the one that could pop, I feel like, Like if all of a sudden there's a news of a GPT-5, the whole rumor about the pre-training scaling wall and GPT-4.5 not being that great. It's like if all of a sudden the game's back on, scale's all you need, bitter lesson comes back in the meme, in the meta, and all of a sudden it says, no, you actually do need to build the$500 billion data center.

1:07:35You need to build a$5 trillion data center. And everyone is taking it seriously. everyone is scale pilled, AGI pilled. You could see NVIDIA maybe pop, but this is not financial advice. We're just debating the markets. I don't know. Anyway, the next market is what will Michael Saylor say during strategy Q1 2025 earnings call? And I like this because it's not just that he'll say Bitcoin, it's that he will say Bitcoin more than 100 times in a single earnings call. They know he's going to say Bitcoin, but will he say Bitcoin 100 times? And there's a 20 % chance, according to Pauline Market, that Michael Saylor will say Bitcoin 100 times or more.

1:08:20Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin. There is a 9 % chance that he will say a billion, 50 times or more. Crypto at seven plus. I've actually, have you ever listened to a Sailor call? Strategy earnings call? Oh, is it no longer micro strategy? Is it just strategy? Drop the micro. It's a giga strategy. China is at 50%. Inflation is at 56%. NVIDIA is at 34%. Lots of people getting on the action. Some of these are very low volume. Interest rate is just$374. I like if you go to strategy.com, by the way.

1:09:03yep it's just a bunch of basically uh it's basically a big ticker that shows their market cap their share price their six month or three as it should be um and uh yeah it is focused on stuck with it in the face of bitcoin etfs and wide bitcoin availability there there was a big discussion for a long time of like how do how do the public markets get access to bitcoin maybe MicroStrategy is just a wrapper around that. It's okay. But he's stuck with it. And so it'll be fun to see what happens with his earnings call. The next market is asked by us, actually, TBPN. Will ChatGPT reach 1 billion monthly active users in 2025?

1:09:51The volume started small. It's climbing. It's now at$76 ,000. You can go on Polymarket and express your view. Yeah. The numbers have been kind of all over the board. Sometimes they talk about weekly actives. A lot of people like to look at similar web and other data sources for information. But ultimately, I think this will be such a significant milestone that they will come out and announce it themselves. hope so and and i would like to hopefully this market gets uh it matures and then hopefully uh people who interview sam towards the end of the year will just ask him like hey are you over or under a billion mAUs in 2025 did you did you hit this this milestone uh and this does seem like a milestone that yeah and he said he said uh i think he said recently that somewhere around 10 percent of the world uses chat gpt on a monthly basis yep that's 800 million right there so we're in a hair's breadth and this is just such an impossible number almost yeah but you add another studio ghibli moment where it onboards a bunch of people you you just add more viral loops of sharing maybe they do the social network thing uh and we actually do have uh more open ai news that we're tracking here.

1:11:10Will OpenAI acquire Windsurf before August? It's at a 52 % chance now. Lower than I would have thought. But again, the headline that was initially reported was not a confirmed deal. That was a publication kind of like front running something. And this happens before. It's very common for media outlets to basically get word that a deal is in the works and then just announce it. And it's not necessarily a done deal. Sometimes a term sheet hasn't even been signed. And so it can actually put a lot of... We saw this with Wiz, where there was rumors of an acquisition that happened earlier and they denied it and it wound up not happening.

1:11:54And there's been other times when companies have... It feels like they've maybe deliberately leaked news to kick off a fundraising round. There's a bunch of different things that can go on. Staying in the AI model race, which company has the best AI model by the end of June 30th. Google is at 45%. OpenAI is at just 25%. And it's a little bit odd because the reviews of GPT-03, 4.5, have been remarkably good. Well, this is June 30th, to be clear, not April 30th. Yeah, yeah, sure. So we're two months out. And you get a little bit of like a yield curve when you compare these different time periods.

1:12:39And so a lot of it's driven by when developer conferences happen, when new releases are expected to happen. So if Google, for example, has Google I.O. in mid-June and you know that they're going to drop something then, well, it might be a new model. Well, they might just blow out the benchmarks. Meta is sitting at 2 % right now, and you know that Zuck is just absolutely fuming every single day without having the best model. Especially since this is based mostly on benchmarks. I don't think this is based on... Vibes. Vibes, of course. Certainly not based on Vibes. Although some of the benchmarks are kind of vibe-based, like LM Arena seems to be a measure of Vibes, kind of.

1:13:15But it's a big market, over almost$1.5 million in volume on the poly market for which company has the best AI model on G. Yeah, it's interesting to just watch the graph and just see like, okay, on a longer time horizon, it just becomes very unpredictable. You know, who's going to actually be in the best spot. Well, we have the CEO of Linear coming in. Let's bring him in. Who is our most recent partner. What's going on? How are you doing? I'm good. Thanks for having me on the show. Of course. Great to have you. It's great to have you a partner on the show as well. It's fantastic. Yeah, I've been like following you guys along from the very beginning.

1:13:54I think like you really have a kind of interesting concept. And like, I think like some people are going for that three hour podcast, but I think like, I like you guys are going for the more like shorter content as well. Three hours a day. There's something for everybody. Yeah. It's fantastic. Well, yeah, there's tons of stuff to talk about. I think we'll probably see you up in SF next week, potentially. The week after. The week after for Figma's event. But yeah, why don't you give a quick introduction for everybody that's not familiar, that maybe hasn't used Linear in the past like us, and then we'll go from there.

1:14:32Sure. So yeah, I'm Kari Sarnan. I'm the CEO of Linear. And Linear is basically this purpose-built tool for planning and building software or products. And we've been building this the last five years. And what we're really doing for the product organizations and companies is that we are helping them with the end-to-end workflow from going from customer discovery, collecting customer requests into planning roadmaps, planning projects, then executing on those projects and tasks. So we try to really understand the customer's workflow here, what it takes for these different people in the organization to do their job well, and how can we streamline it or make it easier for them.

1:15:14And today, we have about over 10 ,000 companies as customers. And these can be anything from ambitious startups to major enterprises. And I think if you think anyone building something cool today, they're probably building it with Linear. um so open ai the scale your sponsor ramp i think uh mercury probably a lot of logos that you see at the bottom of the screen there are customers as well um so i think like for me it's it or for us it's been really exciting like work from with this very forward-looking companies and like they're always like thinking like how they can do things better and i think like you probably talk about this a lot on the show that I think AI is the topic that like AI is changing the way we do work or how we like how people do it their personal work but also like how the organizations operate and I think like a lot of execs and CEOs and CTOs are now pushing it to their companies that hey we need to use more AI because we do believe that it can make us more productive and more efficient When did you know you wanted to start Linear?

1:16:22You were a founding designer at Coinbase and then you were over at Airbnb. I imagine you were pretty frustrated with the tools at the time and had a kind of concept for what you wanted to build. But I'm curious at what point it really clicked. um i mean in the end it clicked with my my co-founders i think we're all kind of frustrated but at the same time so i think we we had this like a time where we all worked on in our companies for like four years or so and we're like well what do we do next and i think like we're all so frustrated that each of the companies we ever worked at these tools never felt that good and especially it didn't feel good for builders like us like when we like maybe that the tools were okay for the management and and like the some of the other people in the company or but like for designers and engineers yeah it's very different if you're just kind of like looking at a dashboard as an exec and you're just kind of like monitoring the situation but when you're the person that has to sort of like use the tool constantly and sort of be generating uh the content in the tool uh it's just a dramatically different experience i i remember my last company uh when our um first employee joined this this guy brandon jacoby who had been at cash app and square and joined to lead design and product uh he literally set up a linear account on the first day because he was just like we're never we're not going to use anything else it would just be insane so uh i'm curious uh we talk a lot about venture markets broadly i think you guys have taken a pretty unique approach and and sort of like building you know being a sort of default tool and I'm sure over time getting an immense amount of pressure from investors to take on more and more and more capital yet I feel like you guys have had kind of like an efficiency ethos from day one.

1:18:11Can you talk about your kind of just like mindset when it came to when the right moments were to raise and what went into that? yeah um so so i think the ethos of the company is like what we really try to do is like we want to be the best tool for this purpose in this market and i think that's the way we win and that's kind of like the strategy we have and for me being a best tool means that you also need to be a quality tool like a high quality tool i don't think like you can be the best tool if it's like the quality is kind of low so to to do that i think like sometimes companies get themselves or startups get themselves into this stage where it's like, you just have to like work on the growth metrics because you need to raise the next round.

1:18:57Like we were fortunate that we didn't have to do that. Like we could hit the, we hit the market pretty well. And like we got like companies starting to use us like in the first year and we started getting revenue pretty quickly. And then given that we also had this quality mindset, like we always saw that we worked at the Airbnb and Uber and Coinbase that like, And the amount of people doesn't necessarily generate the quality. A lot of times when we were actually trying to build something new or something really good, it was a small team. And so we took that lesson that, hey, can we just build better with the smaller team?

1:19:32So that's great. So situations, our costs are lower. But then also we were able to start generating revenue so that we actually started, we became profitable the second year. And we've been profitable ever since. so than the last like um four years or so um and so what it what it creates is like we can have a little more control of our destiny of like we don't have to work for the round that that the round all the rounds have happened because we felt that like there's now like a good moment of bringing someone new in like we are in this new i think with the with the seed i think obviously there's some like well we should like let's say quite a light our seed so i think there's some like a brand aspect of that like hey we are like a real company now and we have like real backers and then some of the other like serious a and b has been about hey we are now like entering this new segment it's a little bit uncertain like what's going to happen we're getting this larger customers and maybe we need to invest more into sales so like i don't i don't the profitability is not the like the number one goal of the company like still the growth is but what it what it allows process is like, it gives us a little more like flexibility.

1:20:45How do we go after it versus like, well, I'm running out of money. Like in six months now I have to like go figure out how do we put the numbers up so I can like raise a good round. Uh, one unique part of your company, uh, in that it feels very core to the culture. You guys are, uh, remote, remote only. And then you simultaneously, I think probably one of the reasons that works so well you guys focus on hiring very very senior people uh do those two things go hand in hand or are they sort of separate and both have their own reasons yeah i would say like there's some some link there and i i think like it kind of like from the perspective we wanted to have more like kind of like a talent density so you have smaller team and like better talent um so i think that that talks about like that kind of goes into this more like senior people i think remote it is a type of mode of working where you have to trust the employees to like figure things out on their own and usually that develops a little bit later in the career um it doesn't mean that like junior people wouldn't couldn't have that but it's like just more um just happens more and like as as you get more experience um i think it's it today we are like hiring more more juniors and i think the the in the end like the remote to me is that there's a lot more focus on the actual work um like i think like when you're in a company and in an office there's all kinds of things going on and people have like crazy ideas all the time some of those ideas maybe are very good but sometimes people end up or startups might end up kind of tacking a lot like they're like constantly changing in the direction versus remote.

1:22:31It's a little bit, the management is a little harder. Like it's harder to like, it's almost like hurting people to the direction. So you have to do it more like this is the plan and this is the strategy. And then you need to let the people to execute on that. And so you're going to have to trust people's judgment. So that's what we try to hire for is like hire people in all positions that like, if we, if we get no instructions from us directly, then like, could you figure this out? And could you like make something good? About a decade ago, I was running an engineering organization. I think we were using Trello or Asana.

1:23:04I'd love to know kind of like, what is your battle card look like today? And what was the feature or pitch to get organizations that maybe already had some sort of product in place to switch over? Like, what was the killer go-to-market motion? I think part of it, not to jump in, is that if a designer or a product manager moves to a company that doesn't use linear, the first thing they do, they tell the hiring manager, I won't join unless you commit to switching to linear. But Kari, go for it. Yeah, I mean, that's, I think that in the end, that's kind of like it's the word of mouth. And I think obviously that doesn't happen just automatically.

1:23:48yeah so like it it's been like interesting that there hasn't been necessarily like just one thing but there's some some kind of these kind of tools are in some ways simple in some ways complex it's there's like a lot of things that people do different things people do in a product different roles use it so like a lot of things needs to go right and i think our lessons like using these tools for a long time is like one it's like speed it's like it's really annoying if things are slow Like if you're trying to like do a little task and it takes like every time it takes like a minute to do it or you're confused or even how to do it.

1:24:25That means like you probably won't use the tool that much. Like engineer will just, well, whatever. I'll go there once a week to update my status. That's the worst. Having like dead project management software, product management software that's like, hey, we paid for this. We have it. It's my dashboard into what's going on and no one's updating. And you got to go around and be like, everyone, you got to update. Yeah, bad. Jordi, you got a question? You guys had an agent-focused launch recently. I'm curious to, you guys are a company that historically is less fixated on sort of chasing trends, right?

1:25:01Like you know what you're building, the best platform to plan and build products. And so when a new trend pops up, you're not sort of automatically piling into it at the same time. So in that context, I think having this new focus on agents is probably a reaction to what you're seeing from customers, what you guys are doing internally. I'm curious how you kind of, to get your thoughts on where agents are today in a sort of workplace environment and kind of how you see them evolving over time, just because you guys are in a position again where you're not, you know, trying to raise a billion dollars selling, you know a dream around agents you're just trying to build great products and so i think it's more real grounded context yeah i think like we definitely have followed the like ai what's been happening and experimenting on things but we we like a lot of times we we do ask talk to the customers and that's kind of like what we're seeing now that there is a lot more interest and demand for this and and then also i think the in the last couple years the models have gotten better and we are now like starting to see like this like agent um like companies building agents and like agents i think people are fighting like what the actual definition is but i think to me what it means is that this kind of ai model or system can take some kind of form and or like a shape in these tools and or outside of the tools and they you can start delegating things to them And so like in our context, it could be like, obviously there's a bug being reported.

1:26:39Maybe the agent can see that this is a bug that they can solve pretty confidently. And they could just say like, hey, I can solve this. And then someone, some human like approves that. Or like as an engineer, like an IC individual contributor can just look at their task and say like, hey, I'm going to try to delegate some of this task to the agent. and then I go work on my own task, like whatever is the most complicated one. So, yeah. Oh, yeah. I was wondering if you could talk a little bit about the trends in management philosophy. I remember agile, Kanban, Toyota management, all these different terms.

1:27:21There's books written on these. What's the latest and greatest? And is there, I remember a lot of companies were kind of aligned with one strategy or the other. uh what are you long what are you short now in terms of like management philosophy um yeah i i think that i think a lot of this like systems are like agile or safe or some of this like other like frameworks i think i i generally short frameworks when it comes to any kind of management like systems so i'm more like i i'm long on like the first principles of like i don't think like in the end it's like what what any kind of organization is about is like how do you generate the output it's like doesn't really matter how do you get there and so with linear i think the idea always been like can we make it simpler and i do see like uh like if you like franchise can airbnb they have this founder mode idea and then i think prex had had like a similar shift that like hey let's try to simplify the system like the framework so i think like that But the simplification, I think why it helps is that it makes the real things more visible.

1:28:30It's easy to, if you have this very complicated framework or system, it's easy to hide in the corners of, yeah, we're moving things around, but nothing is actually happening. But I don't know. It's interesting questions. What does the agent system does? I think in some ways it's one thing I think like it's like interestingly, each individual contributor kind of like maybe becomes more like a manager because they have this like almost like bioregals working for them. Yeah, you have to imagine that there's more focus on like CI and less like waterfall monolithic monorepos in the age of AI. But I don't know what you think about that.

1:29:11Does that track? I think it could track in a way that it's, it's, if building things, implementing the code becomes a lot cheaper and faster, you can, I think like today we have this waterfall processes partly because the engineering is expensive. So you do the thinking and the design before you start building, because the building part is kind of like the bottleneck or, or expensive. but if that equation changes so now we can just start like what we see with a lot of this like like um yeah website builders or something it's like you can just try something out and see if that that's like actually like useful so i think that's it does flip the system but i think like you still probably need to go back to the planning a little bit like think why are you doing these things, but you can maybe like start experimenting more internally directly with code and, and not, not like try to have this like very waterfall process.

1:30:10How are you thinking about, uh, partnership partnerships in the context of your agent, you know, support, uh, I imagine you got, you guys have your own sort of agentic workflows. Uh, but then, uh, over time, I imagine some, you know, coding agent will come to you and and say, hey, can we get sort of plugged in so that instead of delegating a specific issue to an engineer, you just delegate it to us. But then that introduces kind of a vector where I feel like linear is about surgical precision and perfection with product. And so adding this sort of external agent who's now sort of becoming a part of the product, even though they're sort of in some way mirroring what an external engineer might look like.

1:30:57but I'm curious how you think about that. Yeah, I mean, our view is that there's going to be like hundreds of agents, maybe like thousands and I don't think we can hold it back and like, I don't think we should. So what we're doing is like, we're kind of fully leaning into that. Hey, Linear is a platform for agents. So this might be like third-party companies building agents. Maybe we build our own agents. Maybe our customers build their own internal agents and they want to bring them on. and our job there is to like figure out like what is the right way to like what is the kind of interaction layer like like how do you actually use these things like use these agents how do you delegate the work how do you monitor it how do you um review the work or how do you as an organization um kind of just generally monitor the security or the usage or the cost for example so we just think that like there will be a lot of at least in a short medium term there will be like a lot of different agents and we should just like support that um and so so that's that's like we already have two at least two um that people are using like devin and cogen that they that exist on a platform you can assign issues to them today and they will try to fix them um and we actually seen like a lot of devil like other developers and we are launching something in a couple weeks so So I think there will be more launch bar dreams there.

1:32:21That's awesome. Yeah, it actually, I mean, it just gets me really excited because historically using linear, there's just so many sort of issues that you create that are assigned to a junior engineer. They take a crack at it. Hopefully they get it right. Sometimes they don't. And then you bring in other people to actually get it resolved. And so it's just like such a natural workflow. But it's also exciting because even more junior engineers will learn sort of how to manage engineers is just by managing agents. I'm excited to run the show on linear. Project one, ticket, bigger gong. Bigger gong.

1:32:55Yeah, we're going to need a bigger gong. More tinfoil hats, more soundboard effects. Can we get a founder mode sound effect to kick it off? In talking with your team, I mean, everybody that watches the show knows this. We're trying to make the show 1 % better every single day. Sometimes it's in different ways. But we really do have so many projects, new studio, new lighting. Like I have 20 projects in my mind and, and like, they don't perfectly map to a different way. You know, a lot of people think of content as like, you know, it's a camera and a microphone, but if you're not improving it and you're editing, but it's more so like the, the show is an ever evolving product.

1:33:32Totally. Totally. So anyways, uh, excited to hang. Yeah, this is fantastic. Thanks for coming in. Always welcome. And, uh, yeah, we'll talk to you soon. Yeah. Thanks for having me. Bye. See ya. And next up we got Sean Frank Coming in the studio The wallet man himself But we're going to tell you about Ramp in the meantime Time is money, save both Get on Ramp.com Switch your business to Ramp.com Also find your happy place Go to Wander.com Book a wander with inspiring views Hotel great amenities What does Wander always say? Find your happy place Find your happy place thank you thank you thank you well we got we got sean frank in the studio the wallet salesman here uh here to break it down talks tariffs uh great to have you on the show sean how you doing dude i'm excited to be here you know i typically watch a 2x speed and i got like two or three screens going so you know i feel i feel uh a little bit ahead of the curve here i think i know what you guys are going to say next oh yeah that's that yeah what are we going to say next i mean you guys are going to compliment my suit i assume it's a fantastic suit he's got a he's got a suit he's got a suit let's go uh anyway great looking great i uh i went through a bunch of stuff yeah there's so much to cover uh how are you doing first of all how was the how was the private equity conference at uh jeffrey's i thought it was a liter a little derivative of the TBPN format.

1:35:08You said you spent the day talking to 14 different firms, 30-minute meetings, speed dating style. We do 30-minute segments on this show. What's going on? Are you copying us? What's happening? Dude, it wasn't me, but Vinay, the senior vice president of Jeffries, is a huge TBPN fan. He's like, dude, I'm a day one listener. I'm in chat. I stole this from them. Don't tell them about it. Okay. Well, maybe we can have a truce then. That's great. He can borrow from us, the official creator of the 30-minute segment over here. But yeah, how was it? What did you learn? Who did you talk to? Can you break it down for us?

1:35:48Yeah. So it was a mid-market consumer conference. So to break that down for the audience, I'm sure everyone here knows what that means. There are probably a lot of LPs and funds. But mid-market is like$100 million to like$500 million in revenue. they're typically deploying checks of like 25 to 100 million dollars um that's on that equity side right not obviously not the total round uh so so businesses are doing between 100 and 500 million is that right yeah typically that's the valuations that they target right and then their their equity checks in are you know 25 to 150 million something like that these are smaller private equity funds They're typically a billion dollars raised and deployed.

1:36:34And this is like the first professional layer for private equity, right? Like small market private equity is very scrappy. It is like guys who look like us, like out there grinding it out, trying to find deals where these people are professional bankers through and through. So they're going to go to good schools. They're going to have five to 10 years in the industry. And yeah, so like this is not your mega funds. These people are not deploying$5 billion checks, right? The fund size will be under$5 billion. And they're very targeted on consumer. So anything consumer discretionary, what we've seen is that that segment of the market has been destroyed probably since 2022.

1:37:15It got really, really hot in 2021. There was a bunch of SPACs in the space, right? Famously, you have like, you know, Warby Parker, but then you also have solo stuff that just got delisted on Monday. Yeah. So, I mean, there's a lot of great, smart people, and there's people who are on the SoloStove deal. So, Solo got taken public by Summit, but Summit's like a little bit bigger than a mid-market fund. The first check into Summit was Bertram. So, Bertram Capital, really great firm based in the Bay. So they found Solo when Solo was doing$60 million in top line, right? They put a check in at like$100 million valuation.

1:37:51They probably owned 40 % of the business, maybe more, and then they sell it to a different fund. So that's typically how mid-market works. You're going to be selling to a different fund to take them public. So Bertram made a ton of money. They sold all of their shares to Summit, right? Maybe they had a little bit more that they sold to the IPO. But then, you know, a larger cap fund is going to take a company public. So what's happened in this space? They are cold on consumer. And the only categories that are interesting for them are services. so like talk to a lot of funds who are buying like roofing roll-ups and uh you know they're trying to buy plumbers like that type of shit like because it's um non-discretionary spend if your roof fucks up like you're gonna get a new roof and they're really into the pet space like pet is still really hot i have a friend bill who just announced today he sold his company to morgan stanley in the pet space and it's on twitter you guys can engage with it so check out bill he he's crushing it yeah i saw that he's been grinding for a long time so that was great to see yeah um it's funny uh there's there's a guy uh who works in in mid-market uh pe who knew that i was friends uh and and and and associates associates with with sean and he basically would email me once a week for like three years asking asking for an intro i want to say i want to stay on solo stove you broke down um what happened is it a casualty of tariffs is it mismanagement We've talked about it a little bit before, but can you give us the full post-mortem, post-NYSE suspension, which we hate to see here.

1:39:26We want to see more IPOs, not more delistings. Yeah, yeah. It's a lot market activity in the wrong way. So what's happening with Solo? So there's like the bigger third thing. And actually, I mean, I'll break some news. I talked to the corporate dev buyer at Yeti who was at the conference yesterday. And I asked her, I'm like, oh, so are you going to buy solo? And she's like, even if you gave it to me for free, I don't know what I'd do with it. She's like, why is that? Isn't it making like 500 million? We looked in the numbers recently. It seemed like it was like, even if revenues are declining, even if there's tariffs, like there are people buying stoves.

1:40:01There must be a way to make some money out of that company. Right. Am I crazy? Yeah, there's a lot of that. Okay. And people, there's two main problems. One, it was like the biggest COVID trend of all time, right? There was a two-year period where all of us were stuck inside, couldn't travel. We all discovered the great outdoors. They sold a lot of stoves, and there's a negative flywheel for that business. If you sell one stove, you're never going to buy a second stove. It actually removes a buyer from the market, so now it's harder to sell the second stove. It's a horrible problem with that business.

1:40:34The second is massive tariff risk. They are 100 % sourced in China. They are very tight with the manufacturer there, and you just cannot get stoves right now. So you have a situation where their growth solution the past two years has been to go to mass market retail. They're in Costco. They're in Home Depot, whatever. And then those retailers won't let you raise prices. So you have a contract to sell it to whatever price. You're direct importing from China. You have stuff on the water. And now your inventory is essentially toxic, right? Like, they cost$75 to make. Are you going to give the government$125?

1:41:09Like, probably not. That's rough. Okay, so casualty of tariffs then or mismanagement or - Well, I mean, we talked about this months ago, remember? We were kind of looking and at first it was a debt issue and that issue was looming regardless of tariffs happening or not. It seemed like it was - So it seemed like this was predictable from day one, if you were really clear-eyed about that inverse flywheel you mentioned and then also like the COVID dynamic going away. How about Chubbies though? Chubbies has to have some broader - That has a positive flywheel. You buy one pair of shorts, you like them, you buy more, and then you're replacing those shorts every year, right?

1:41:46Yeah, look, and I love all these guys. So Kyle, the founder of Chubby's, is awesome. He's building a software product. Won't plug them. They got to pay for that. But really, really smart founder. And Chubby's is a good business. Chubby's does$100 million a year top line. They do$10 million in EBITDA. That business is worth something to somebody. but uh john marris was the ceo of solo and his idea to solve the negative flywheel was to bolt on acquisitions he's like i'm gonna you know i'll i'll fix my company-wide ltv by having solo customers buy chubby shorts and that just didn't happen right like they could never integrate it because somebody likes the outdoors doesn't make them more likely to be a chubby's customer right yeah it would make more sense if chubbies i don't know started selling beer pong equipment or something right like there could be some sort of like you know positive flywheel there but their solution was to broaden uh the overall product offering with just like very distinct businesses that have no cross-sellability so yeah can you talk about uh i i people have this idea that oh i'm gonna like i feel like everybody's in love with the idea of a consumer product holding company because people just like consumer goods, and they're like, oh, we're good at selling this.

1:43:07We'll be good at selling that. But then when I, understanding your focus and Connor's focus over the last coming up on a decade and not too long, the idea that somebody could compete in the wallet space with you guys while being part-time is just insane, right? Because you guys are best in the world at what you do, and you're just able to put more time into it than anyone else. Is the consumer product holding company model just generally flawed? Is it not something that people should be going after? Or is it just more about actually having distinct businesses and ultra-competent management in place in each of them?

1:43:54So it's just really fallen out of vogue, right? So very famously in the past two weeks, Hermes became the largest, most valuable company in the consumer space. There were 300-whatever billion. And they surpassed LVMH. So LVMH is the holdco model. And everyone wanted to be a holdco because LVMH was. And then Curing became a holdco. They have Gucci, they have a bunch of assets. Well, Gucci just put out their earnings. They're down 25 % year over year. That came out on Monday. right so like the whole co-model is just falling out of favor in favor of hermes single standalone band super valuable uh lululemon set the trend lululemon is worth more than honda so lululemon makes awesome leggings that we all love they trade more than with the best car company or one of the best car companies and then on running is also i broke this trend right so on running is worth $10 billion today, single brand, just making shoes.

1:44:50So right now the markets are valuing beautiful brand, super clean focus, owning a category that'll change again, right? Someone, there's really great hold codes out there. Um, you know, the people behind, uh, Crocs, Crocs owns, Hey dude, they're becoming a great whole hold co. Uh, Deckers is another shoe company. Um, they're crushing it in the hold co space. But isn't there something about even the way that LVMH has approached their hold co which is like we don't we never share kind of creative resources across brands like there's very distinct kind of like firewalls in place uh is there something to that is that what you think you know is does Decker sort of benefit from scale as just being like a massive shoe manufacturer and then it's like when it when it comes to the kind of individual brand level like let's just make sure that people are ultra are focused on the purity of the brand and scaling that?

1:45:48What I think LVMH does beautifully, LVMH calls them houses. So they're houses, but they're in the same neighborhood. And what they're able to do is they have L. Catterton, which is like, they're picking up, imagine this is like basketball. There's amazing high school players. L. Catterton is signing those high school players. L. Catterton is their private equity arm, very much owned and controlled by the Arno family. So, you know, Chrome Hearts is the greatest American accessory brand that's in the L-Catterton portfolio. At some point, they get called up to the major leagues and then they get integrated into LVMH and then LVMH has the spotlight light approach.

1:46:27So, of course, Louis Vuitton is always going to be the best branded in the spotlight. But when there's a challenger like Off-White, they can put that in the spotlight for a little bit and then that becomes their star player and they cycle out to somebody else. they just got caught flat-footed that they don't have a good star player right now so like that's the challenge is lvmh curing tried to do that right richmond is the other big uh holdco in the european fashion space richmond's crushing it because they own van cleef and they own cartier those brands are very very hot right now so lvmh is trying to take over richmond because they want to be in the spotlight so that is the inside baseball the inside basketball if you will of the luxury space you need to have recruits and you need to have a star player you can cycle out And LVMH just doesn't have a hot brand right now.

1:47:13I like this idea of the pure play. It aligns with the founder mode, the life's work entrepreneur, just not getting too scatterbrained and focusing on one thing. What is the post-mortem on some of the pure play companies in the fashion space that weren't able to reach escape velocity? I'm thinking of Allbirds and a few other brands in that space. Is it just doing too much too early? Or is it just like missing some fundamental insight? Or is it more of like a market segment? And this maybe works in the high-end luxury market, but it doesn't work when you're more in that$100 range competing directly with Nike.

1:47:54What's your take on that? Well, you can't be cool forever. So that's the biggest challenge. Allbirds was really cool, but San Francisco famously horribly dressed people, right? They have no sense of fashion. Why do we think they're going to tell us what's cool, right? And they were betting on a sustainability wave, right? So like Nike is able to, like they just benefited from people caring about athleticism, right? That took them from a billion dollar stock in the 80s to 180 billion today or whatever, right? They were caught flat-footed by wellness, right? in that effectively Nike was the brand for sports enthusiasts, everything from fans to athletes.

1:48:41But then wellness kind of came out of nowhere, took the Aloe crowd whenever they're on running in many ways. Lululemon, obviously. So it seems like Nike missed the wellness trend, and that was, again, probably the biggest miss. yeah what's your take well and their stock suffered for it right i mean like nike is down massively from all-time highs they're down from their five-year mark and it's because they missed that trend and and they didn't pivot in fast enough uh the other thing that's happening is that's happening in beauty right now so if you go to sephora you're either a celebrity brand or you're a wellness brand that's all the newness going into sephora so sephora and beauty in general is going through this wellness craze right now as well.

1:49:31Like skincare is taking over everything. So we're going to watch more of those waves happen. Consumer trends change over time. You can't be cool forever. So the whole thing, like, and this is the biggest problem with venture capital coming into the consumer space. Coca-Cola is the most popular drink in America, and it doesn't even have 20 % market share because people like different drinks, right? Now, Uber is a service that is just great for everybody they'll have 100 of like the the ride-hailing market right google it's just the best so i'm going to google everything there's no second player in consumer taste is just power law outcomes there's no monopoly outcomes they're just inherently oligopolistic markets interesting so uh if you if you go back to the founders who do they focus on the pure plays oh i have a good i have a good example of something you brought it before.

1:50:23I mean, Chrome Hearts needs to be studied. And one of the reasons why, you know, right now it's like they've never been, they've never been hotter, but they've gone through periods where they certainly weren't nearly as hot. And I'm curious what you think they've done right. I think to my knowledge, they've stayed mostly family owned or certainly majority family own and is that you think allowed them to kind of like ride different waves and and not uh if at any point they were overly fixated on just pure scale you know maybe they would have um not been able to kind of come back in the way that they have but i'm curious what your take is yeah i mean the creative minds behind chrome hearts they're artists they're gonna do what they're gonna do with or without you if you think it's cool if you don't think it's cool like share was wearing chrome hearts in the 90s bro like they're owned by the sinatra family like they're gonna do what they're gonna do and it'll come in and out of vogue but they don't care right so that that that's true authenticism like they've never chased revenue like they'll make pants that are like 112 000 because that's what they would that's what they choose to do that day and then you know who buys them drake it's like well i've heard they i've heard they they basically they'll mog drake too they'll be like drake like drake will be like i want some new pants and they'll be like cool like get in line like other people want the pants too and then drake has to like you know try to cozy up with the you know the essay uh but that's hilarious yeah so it's it's just like a commitment to the craft that like i mean this is the reason why the europeans are so good at fashion is because they will do it for 50 years making no fucking money right or goyard goyard's another like amazing brand.

1:52:10They just don't have a website. You can't buy on their website. Now it'd be awesome. They would make way more money. And if private equity owned them, they would open a website immediately. But then they're like, no, we want you to remember where you bought the bag. That's important to us. So like you have to go wait in line and you have to, you can only buy what we have that day. And it just creates like a very personal relationship with the products that is people are longing for in the internet age. So yeah, the Europeans are the best at this. I talk a lot of shit about Europe, but they do have this figured out.

1:52:42Yeah. I want to go to tariffs. I saw a viral thread yesterday by Ramon Van Mier. He says, everyone says they'd pay more for made in the USA. I tested it. We make a$129 filtered showerhead manufactured in China with tariffs surging to 170%. We explored reshoring. We found a U.S. supplier. Our costs nearly tripled. I ran a clean A-B test. You had two options. There were 25 ,000 users that did this, the exact same landing page. You can choose made in China for$129 or made in the USA for$239. And they had zero conversions on the US version. The add to cart rate for the US version was less than 1%.

1:53:27And over 3 ,500 people bought the Asia made version. How did you process that news? There's some community notes on it. I want to know what you think. Yeah, I think overall it was a flawed experiment, but it's a good story. But what do you got, Sean? It's a good viral post. Yeah, we've seen this play out with sustainability, right? So people had two options on their website, like sustainable packaging and we'll buy carbon credits versus not. And people won't pay more than 5 % for that. So it ends up being there's tons of cheap goods in the marketplace and there's tons of substitute goods in the marketplace.

1:54:03And you need value props to stand out. So Ridge has best materials. We have a great warranty. We have tons of reviews. We have social proof. These are just value props. Made in the USA can or cannot be a value prop, right? And if he ran that experiment with a Japanese audience, what you'd see is the Japanese audience is more willing to pay for made in America goods. And if you go to Japan, there's entire stores built around made in the USA, right? If you go to Dubai, it's the same thing. Let's hear it for the Japanese. Show some love for the Americans. Yeah. Yeah. And so, and so, uh, paint me a broader picture about how the tariffs are affecting e-commerce.

1:54:40Um, is it a bloodbath? Are people figuring out ways around it? Is it, or is it going to put companies out of business? Are people going to lose jobs? Uh, with that? So without a doubt, it's the most challenging self-imposed regulation we've ever seen, right? Like we went through COVID that was hard for a lot of reasons that that was external forces, right we went through ios 14 we're peons in that we have no idea we can't control that consumer demand has been up and down for fucking years at this point um i have a lot of friends who will go out of business because of the tariffs right and a lot of people on the internet you know are celebrating that they're like well fuck them for buying from for china but here's the thing a year ago it was encouraged it's like it's very hard to actually produce things in america i've tried for years.

1:55:28I put millions of dollars into it. So the government basically gave you a free pass to buy international goods and then import them. And then all of a sudden, it's became very, very difficult to get anything in from China. And I don't think small independent businesses should suffer for that. I've publicly appealed to J.D. Vance. I'm like, look, I totally get you want to incentivize made in the USA stuff. Don't just steal our money in a massive tax. I have shit on the water. You're just making me give you money. Like this is the government getting more revenue and getting bigger. Let's put it into a fund where if, if like, I owe you that money unless I invest in American business.

1:56:08Yeah. I thought this, I thought this was a really good take and a, and a really good kind of concept, especially to kind of basically extending out the timelines. Uh, the policy as it stands today is just like pure pain. Now, like you're, you're being like, you know, punished versus what you laid out. So maybe extrapolate on that a little bit. Yeah. Like, look, I mean, I understand the goals and this, this is hurting China more than America. Like, I think, I think people in America are wanting and complaining because like TN shipments or TN shipments are more expensive. I'm like, look, I do business in China.

1:56:43I talk to Chinese people, factories are shutting down and you have youth unemployment of 25 % in China. Like it's going to hurt them way harder, way faster. We'll feel it in 30, 60, 90 days when shit in Walmart gets more expensive. They're feeling it right now. Right. And there is there is ports that are just shut down. And it hasn't been good in China for like five years. Like it's been a very difficult economic situation over there. So it will hurt them way more. But the flip side is we don't want to also bankrupt a bunch of American businesses. Right. What we want to do is incentivize them to either nearshore or unsure production capacity.

1:57:20That takes three to five years. It takes millions of dollars. So look, charge me tariffs, but give me an out. If I take that money and I bring it to American manufacturing and I hire workers, I open factories, I don't have to give you the money. So it's like a one-to-one duty deferral to incentivize U.S. investment. I mean, do you guys want the government to get more money or do you guys want fucking more investment and factories built or whatever, right? So that's my pitch to everybody. Makes sense. I want to get your reaction to this Slate Auto launch. Have you seen this truck? TJ Parker was talking about it.

1:57:57Finally, someone built a simple, cheap, utilitarian truck, 20K, made in the USA. No touchscreen. Lots of people are talking about it. Did you see the launch? Did you watch the video? Hell yeah, man. That guy's been working on it for a long time. I think he's been documenting on YouTube. So hell yeah, brother. I love to see that. And I was in China a year ago and I was at a big electric vehicle, potentially sales summit. They have 50, 100 brands all competing to sell little tiny electric vehicles. And those actually can't pass US safety standards. So they're only sold to africa so it was me and a bunch of african buyers walking around and like you know they sell for five ten fifteen grand or whatever now if he can actually hit american safety standards and ship a twenty five thousand dollar truck i mean this guy's i mean he'll he'll he'll do ten billion dollars the first year maybe more right like it's a sales gong let's do it what do we got oh oh the sound effect board is down brutal brutal founder and founder mode brutal i i want to talk about the ad, people were very happy with that.

1:59:06Dynamic first second, clear initial framing in the first five seconds, curiosity gap in the first eight seconds, frunk, disarming anti-ad, humor, founder, CEO, curiosity gap. You obviously make a lot of ads, you buy a lot of ads. What did you think of the actual launch video? Look, people are saying inside that frunk, there's actually Ridge carry-ons. So I'm not going to confirm or deny, but there could be a cameo from Ridge carry-ons. I did see that. Yep. Those are rich trunks. I love to see it. I love to see it. Fantastic. Yeah. How do you, what would your complete guess on what their, what their margin profile could look like on a$20 ,000 made in America truck?

1:59:47I know the$20 ,000 is like allegedly due to some EV incentives. But, but ultimately what, how much are they actually going to make on, on something like that yeah so i think i think they said it's 27 000 and then you get a seven thousand dollar credit if you buy an ev from a new manufacturer i think they're going to lose about three grand for the first million of them they make and that's just how auto manufacturing works right like the cost to set them up you have all these fucking machines you have to depreciate them over time rivian still loses twenty thousand dollars on every rivian they sell so it's a different model to a higher price point right um they're going to lose three to ten grand for each one they sell.

2:00:30And if you guys ever sit at the auto market, the amazing thing about Tesla is every car manufacturer loses money on every car they sell. They only make money off of the parts and repairs. Tesla found out a way to not do that. Tesla found out a way to actually turn a profit on the actual purchase of vehicles. Ferrari makes$80 ,000 per car they sell. Tesla makes, I don't know, I think it's like five grand or whatever. Every other car manufacturer breaks even or loses money on the actual purchase of the vehicle it's all about financing it's all about parts it's all about service so i it'd be it'd be crazy to think they're making any money on these things but the demand shows that like they could make money over time i think they'll have trouble because if you have twenty thousand dollars burning your uh burning a hole in your pocket you can get 200 ridge wallets or something right that's true yeah so i mean it's like a trade-off 200 ridge wallets or a little truck yeah you could buy every product on the ridge website uh well yeah it's an interesting dynamic where it's like he has to show so much demand that he can justify you know potentially raising lots of money five to ten billion dollars over time in order to just like actually get these to scale but uh i think the thing looks awesome yeah and uh i might i'll reserve one this one he's also in rivian the bezos i'm surprised i'm actually surprised they didn't go with a slightly higher reservation price point just given the history of tesla charging a hundred what is the reservation it's 50 bucks 50 bucks um tesla charged 100 bucks you know had this big demand signal and then obviously people showed up for a lot of people didn't show up but it's expensive it's a much different price point yeah and i think this is a car that people would just buy as like I would just get one and park it outside of my house and maybe do coffee runs in it go surfing I would put the$20 ,000 deposit down today like if they if they made skip the line give us 20 grand today I would totally do it well I would do it if they put a naturally aspirated v8 in it I don't know about the electric stuff but um I would I would be very pro this vehicle if it had a really loud exhaust note it was kind of like a more affordable raptor that's what i'm looking for yeah man well you know today i'll publicly announce if you buy a slate i'll have a partnership with them free ridge wallets for every slate customer we can get one to one let's go thank you for coming on hey it's great to have you sean awesome we'll talk to you soon i love you you're looking great in the suit don't take it off after this call i'm gonna we're gonna we're gonna have our paparazzi you know outside your house confirming oh sean frank just puts on a suit to go on tbpn make it a part of your brand okay dude it's custom too so you guys didn't even ask this is custom all right see you guys later bye later thanks you That was fantastic.

2:03:24Always a great time having Sean on the show. Sean is the best favorite wallet salesman. He's one of my favorite wallet salesmen. He's up there with the best wallet salesman in the world. Next up, we got Semel Shah coming in from Haystack. Semel, welcome to the show. Good to have you here. How are you doing? Doing great. I'm really excited about this because I've had like 100 friends tell me that they love this podcast. That's amazing to hear. I'm so glad that we're breaking through. We've been spamming the timeline, spamming everything on X, we've learned that slop is the future and volume wins, pace wins, speed kills.

2:04:05And we've been trying to do all of the above. Also in a previous life, I used to work in the podcast industry and I love the medium. This is way before it really took off. And I love media and I love TV shows. And I always felt like there should be like a live tech VC segment. So I just thought to Crazy idea to do a live daily show for just for technology, but it's been a lot of fun. It's been working out. Did you ever look at Cheddar? Yeah, we actually talked to the CEO earlier this week. I was familiar with it. Where they took that business was much more. I mean, they actually wound up owning RateMyProfessor.com.

2:04:50That was interesting. They also owned TVs on college campuses. And I do think we have a bunch of college students in the audience, but definitely we have focused more on, you know, insider baseball in Silicon Valley and stuff that's not quite as general audience. But who knows where it goes? You know, this is still an early project. It's evolved a few times and, you know, we'll see. Anything's possible. I love it. Well, thank you again. Yeah, well, I actually would love to start with your experience in the podcasting industry and what you were doing and kind of what lessons you learned, just because I'm curious.

2:05:25Yeah, just real briefly, it was kind of in the 2012, 13, 14 timeframe. And the entrepreneur at the time who was a repeat entrepreneur, who's a technologist and a mentor of mine from Stanford and was on the faculty, had this idea of like a personalized audio. So if you, you know, I don't want to date myself here, but imagine you 10 years ago or so you open Pandora on your phone, and you're going in the car. What would what would the AM version of Pandora be that was kind of the vision and so we really spent a lot of time curating the initial set of things that would come on to the platform, you know, the big categories for commute were news, spirituality or philosophy, comedy was probably the biggest one on the nighttime drive.

2:06:12And then it was like giving the person the opportunity to skip. So now if you're in the Spotify playlist, for example, we just take for granted that we can just skip to the next song or in Instagram, we can flip to the next reel, but users didn't really have that amount of control back then. But ultimately the cost of acquisition at that time, you know, was really, really difficult and there wasn't as much podcast content. It was mostly kind of radio or TV content being ported over. You know, this is pre-Joe Rogan and all that kind of stuff. So eventually it was acquired by Apple primarily for the technology of streaming, the ability to stream from server across different telecom networks.

2:06:56Interesting. I'd love to know your kind of venture origin story. one fun question is like, what was the deal that you where you caught the venture bug? What were some of the early deals that stuck out to you as, hey, maybe I want to turn this into a real career? Well, it really started because I was working as a consultant for a lot of different firms, I was working in industry, and I was writing a lot online and doing lots of media stuff just for fun. And a lot of people who happen to be investors in LPs read it. And I thought, Oh, it'd be, I was helping a lot of friends raise capital. I thought, of course, one of these funds that is employing me as a consultant will give me a job.

2:07:35That did not work out. And so Haystock was born literally out of desperation of having nothing else to do. And so it started with a$1 million fund. And in the first eight months, wrote seed checks into InsoCart, Envoy, DoorDash, and HashiCorp. Wow. Banger after banger after banger after banger. We love to hear it. And I knew in the first, the first two funds, which took about three years, I knew that I would enjoy it because I had been around it a lot. And so it was a lot of fun. I did not realize how much I would love it. And then the other, the other component, I was called luck and love. Like Mike Maples has a great line, which is like, you got to get hit by the lucky truck, you know?

2:08:24and um i got hit by the lucky truck a bunch in the first three years so it was um it was very fortunate you know but it was um it was a different era like i could never raise as much as i wanted to for for funds and i would have to beg borrow and steal to make um sort of ends meet at home uh you know so yeah yeah imagine you're not eating uh foie gras on the one million dollar fee structure. Yeah, it's 200K over 10 years. Over 10 years. Pretty brutal. I didn't take any fees really in the first three funds. And yeah. That's great. Are you surprised today when you see managers without much of a track?

2:09:07I mean, you listed off a few of the companies that you invested in the first fund. Yeah. You would think that that kind of portfolio would get you a, you know, if you had that today, it would probably get you a$500 million, you know, fund two type of thing. Are you, uh, when you talk to me, you know, uh, uh, uh, upcoming managers today and they're, they're sort of complaining about sort of the challenges of, of raising money yet they're still raising, you know, 50 plus million dollar funds. Do you, I'm assuming you don't have a ton of, I mean, you have empathy, but you're also, well, it's a, it's a very astute question you're asking, especially since we don't really know each other, because that is a very astute question for two reasons.

2:09:49One is that the rational answer to your question is that it kind of makes sense because back when I started, people didn't really know how big Uber could be or Palantir could be. It was like, well, I'll just wait to see what happens. I mean, I mean, a lot of VCs just passed on Palantir for rounds and rounds and rounds and rounds. And Uber was like, you know, just kind of blew people's mind of how fast it grew. So now I think a lot of LPs and a lot of people around the world are like, hey, the tech startup ecosystem is a place where I need to have some money at play. Because, you know, people who come on your show, like, I mean, Kari, I have a great story about Kari, by the way.

2:10:32So we think we got to jam that in. Yeah, people like Kari are like coming here from Europe and like doing amazing things. And like you find one Kari in a career, you know, or in a portfolio, it's amazing. So I kind of understand that more LP dollars are coming here. America is more attractive. The American entrepreneurial ecosystem is an attractive place to park some money and put it in the ground. It totally makes sense. And when your choices are billion dollar plus funds charging you 30 % carry and they're going in a little bit later, it's kind of like, well, okay, which burning building do I want to fall off?

2:11:09you know now the the more micro answer and why i thought that was an astute question is that a lot of people come to me and ask for advice or help with lp and rose or how to like design their fund or do stuff and i've learned you know from like i had amazing access to people and that cannot be short-changed like i was very lucky to have access to like incredible incredible bc people you know VC creators and fund creators that you would all know by name. I had direct access to them and still do. So I try to pay it forward by helping with LP intros and doing all that stuff. But occasionally I do get that, oh, my God, like, you know, I need to raise a fund of this size to pay myself.

2:11:49And I always come back with who says you need, who owes you a salary to deploy the money? And that's really the line I always come back to, which is, it's a little bit unfair because you could have a really qualified person who doesn't have access to capital. And part of the game of a VC is to aggregate capital for the entrepreneur. That's part of the game. So if you have a unfair capital relationship or an asymmetric relationship where you can aggregate capital, all of a sudden you're in the game, but then you have to access the founder. So it's that you got to aggregate supply on both sides, high quality supply on both sides.

2:12:26But this idea that like the fund should start paying you is a luxury in my mind. and um of course if you have access but isn't willing to pay the fees like you can get paid yeah isn't today though i feel like l from from my understanding if you go to lps and you're trying to raise a small fund let's say 10 20 million bucks and you say i'm not going to have any any fees or maybe a very small admin fee to cover the cost isn't that given that they're just so used to paying fees everywhere? Is that even like a selling point or does that send the wrong message to? That's a fair, that's a fair question.

2:13:05I think that LPs are happy to have their GPs if they want to work with them, pay them in some fees. I think the point is that when you're starting and you're trying to hit a target or you're spending a year or two trying to fundraise the idea that like you're owed a salary philosophically to me is kind of bankrupt. and and that like you can you can say you're going to do that but at the same time um it is a market and lps vote with their feet and sometimes they make smart decisions and sometimes they don't yeah um but yeah i would say that somebody going into market with that 30 million dollar fund should have a budget for how they want to pay themselves but also like um sometimes you have to cut deals when you start.

2:13:51Like, you know, a lot of people who want to raise in$100 million fund, maybe the market only gives them six or eight. You know, and it's like, that's where you should start. But a lot of people don't want to start there. And it's a little bit unfortunate because AngelList, which kind of came up when I was coming up, created a whole new pathway for me too. Like that's available to you now, you know, and so a lot of people do use it. But I think a lot of people want to aggregate more and more capital before the market's ready for it what angel list products were you leveraging most aggressively on the come up oh yeah this could be its own this could be its own pod deep dive pod i mean i went uh i mean first of all of all genius uh you know and really was helpful to me um but essentially there were a couple of like public products and a couple of off book products.

2:14:44The public products were that you could do these kind of like software click and subscribe SPVs, you know, where if you could aggregate from your following or people who were following you and say, okay, I have over capacity in a deal. You know, I've got a 50k allocation in a series A that I did a seed in and I don't even have the money, right? You could do that and then set the carry. You could even do little things like portion out the carry based on you know people who are helping you on the deal or the people you want to uh give a little gravy to then it turned into like um these rolling funds or angelist funds which are very popular you know 18 19 20 21 and are kind of industry standard today and then the i hope nival doesn't mind but like the off book thing he he did me a solid for because i had known him for a long time and he he is just incredibly helpful and savvy but he had raised a private pool of capital and an sma from a i can't really disclose who but let's just say a large sovereign that wanted to basically pump a lot of money into the ecosystem and he picked four you know early managers uh to kind of whitelist and he chose me and told them just do whatever he bus.

2:16:00Uh, when you're, uh, I'm curious, how long should someone wait to get hit by the lucky bus before they should, you know, hang up the cleats? Cause I, I really do feel like in my personal experience, if you're in venture seriously and you don't get a true banger in the first five years, like this, the, your, your job just becomes infinitely more difficult in every conversation you have from LPs to entrepreneurs to other managers that you might be co-investing with. But I'm curious how, if you've seen examples where like, you know, year eight, they finally get the banger. This is a very, very good question.

2:16:42I mean, I should be back on this pod at some point because you guys are asking like the right awesome detailed questions. It kind of depends, I think, to answer your question based on what fund you're at and what stage you're investing in. um so let's say you're at a larger fund and you're doing kind of like a classic series a where you're joining a board or you're putting seven eight million plus in a deal maybe you're doing b's of 2025 um you you can only do in a high quality sense maybe two to four of those per year and everyone that's your partner or who's around you or the bigger heads in the in the fund And they'll ask you to report on your portfolio on a monthly, quarterly basis.

2:17:29And they'll have a sense of an underlying like what's happening there. Sort of like a few times a year. They're now obviously the boards are going to be using AI. Sorry, the funds are going to be using AI to like track the board. So it's not just about the relationship with that investor. But like sometimes the investor in the old days could say everything's going fine. But underneath the hood, it's on fire. They'll have more of a record of what's happening. And so generally, the people who are running the funds will watch and see, like, what are the underlying metrics? Who's going to follow your deals, right, as a proxy for quality?

2:18:03And so all those things are under a microscope. I think when you're a seed investor like myself, where you're in that early part of the ecosystem where you're not investing$7 million per deal, but it might be$200K,$500K,$1 million, you can take a lot more shots on gold. And people suspect that some of those things are not going to work. And you only need a couple to work, right? So you have more surface area to get hit by the lucky truck early. The tradeoff is that you don't own as much as you would if you did a rifle shot later. But yes, I think five years is actually too long. And there's a couple of heuristics here.

2:18:40Like it used to be in venture when you would join like a really good fund. They would hand you a later stage deal that already had a board in place and already had some momentum underneath it. So you could learn the ropes and have like a good kind of chip to put on the mantle to start. um but if you think back i don't know if you have come across matt kohler but matt kohler was a gp at at benchmark for 12 years and this guy's hit rate at series a was incredible um and even he doesn't even get credit for certain deals that he sourced but he just doesn't care you know but you know very few people are going to have that rifle shot selection yeah that matt did.

2:19:26Someone today who I would mention would be like Mamoon at KP. I mean, you look at the guy's track record, it's absolutely insane to pick off the money round. How common is it for you? Because I'm assuming you're LP in a ton of different funds at this point. How often do you see like a$50 million fund these days that's fully deployed in a lot of winners, but just not kind of a dud of a fund just because of concentration issues, pricing, et cetera? Well, I do lots of small investments and friends and like other people to support them when they're starting funds. So it's relatively small. The funds are relatively small.

2:20:10And when the funds are a little bit bigger, those managers have already had experience around portfolio construction. So you can get away with kind of shittier portfolio construction when it's a smaller fund because you're just really chasing the alpha in that. But I would say the broader point I would make here is that the idea of portfolio construction and the math around it, it's no more complicated than basic algebra. And I would say I probably spent a lot of time trying to learn it and around a lot of other investors to deeply understand it. And it was still probably the hardest topic for me to like grok, you know, years for me to grok.

2:20:56And I think that's why a lot of LPs like to fund people who come out of these bigger funds because you're served that every week when people are doing partner meetings and portfolio reviews and the people running these funds know it. So it's very hard to learn from scratch. Totally. I want to follow up on a talk we had with Sam Lesson yesterday. He was saying that the unicorn factory is broken. And it sounded a little bit like he was complaining that just like the big funds, you know, the crossovers have squeezed the growth investors, the growth investors mess up all the early stage markets because they're just like, oh,$10 million Series A doesn't really matter.

2:21:31And then the Series A investors mess up the seed markets and the seed markets mess up the angel investors. How real is that dynamic? Are you feeling pressure are you optimistic uh what's your takeaway on the broken unicorn factor i gotta watch the sam episode that guy's full of full of amazing yeah he's a hot takes man he is a hot takes man very artful um i think sam's exactly right uh you know everyone is on everyone else's long you know um and so yeah it's definitely a concern i still feel at the end of the day and maybe this sounds like Pollyanna, but like the game is, can you meet great entrepreneurs every week, every month, and you're not bogged down by other BS that your partners throw on you or that you go to stupid conferences.

2:22:18Like we all have like a ton of time every week and we should all be meeting awesome founders as much as we can. and like can you connect with them can you get to know them can you take a bet on them and i still think you can because a lot of investors have adhd and they go to stupid conferences and they go to stupid meetings and so that's my kind of view is that like you're not going to catch everybody there's no way to meet everybody but like there's plenty of people here that you can take a bet on um and you can get paid you know if you're only chasing hot deals and everything's priced at perfection, we all know where that goes.

2:22:59So the other thing I will say is I've been seed investing in this part of the market for 12 years now. And every single year, with the exception of like a few six-month periods of like COVID or dislocation or something, every year people complain there's too many smart people starting companies, there's too much money in the early stage market, and the round sizes and the valuations are too high. I hear that every single year. So I just don't know when that's going to stop. Like maybe a meteor will hit the earth. I don't know. No, I got to Silicon Valley in 2012 and I got a big sit down speech.

2:23:36We are in a bubble. And it was like, yeah, we were for another decade. Yeah. I mean, one of the things that makes me so bullish on America is just we spend every single day talking to bright entrepreneurs. And at a macro level, it's obvious that there's bubbles in different sectors and industries. People say, oh, manufacturing is an investable. And then you talk to an entrepreneur who's spent six years developing a proprietary method for manufacturing metal. And you're like, yeah, you're going to sell billions of dollars of this product. I want to ask you about two archetypes of new fund managers.

2:24:16And I want to get maybe the advice that you kind of like give them as they think about raising. So the first one is the angel investor who's sort of casually lucked into maybe investing in a bunch of winners while they weren't taking investing seriously. And I think this is fairly common. And somebody is like working at a great company or they're a founder and they just happen to invest in, let's say they invest in 15 companies. A couple of them end up being unicorns and they decide they want to become a fund manager. And then the second archetype is somebody who's at a big fund, gets hit by the lucky bus, maybe, but doesn't really realize the kind of dynamic in which enabled that investment, which might have been the fund's brand.

2:25:03brand or it might have just, you know, a variety of factors. So I'm, I'm curious how you talk to those types of managers, both, both of which believe that they deserve a$50 million seed fund and deserve, they should be, you know, able to kind of like win deals and they very possibly can. Um, but, uh, it's not necessarily a walk in the park. The, for the angel archetype, I mean, let's not forget like, uh, Eli Gill was like a super angel and then turned into like his own growth fund as a brand. I mean, it still amazes me to see like the entrepreneurs, you know, when they create their Coachella banners for their huge fundraisers.

2:25:41And they'll put Andreessen Horowitz, Elad Gill. Okay. That's pretty awesome. So, you know, he was born from that. I think that like the pattern going back to your question is, you know, Hey, you've been doing this as a founder or stuff. I would think about a couple of things. One is like, when you have a founder especially a founder who's like or operator who's like very very connected and just kind of angel investing for fun a sophisticated lp now he the the problem is here to do a 20 50 million dollar fund that person could just call his or her friends you know but let's say if you're going to like a sophisticated family office or institutional investor or fund to funds and all these managing emerging programs or managing manager programs are popping up.

2:26:28That LP knows that they're trading off access that this person may have that's unique for that portfolio construction and discipline of building the basket. And so that person I would advise to say like two things to watch out for is how are you going to get smart on the portfolio construction and build a model that works and kind of stick to it you can you can deviate from it a little bit but you want to show consistency right because as you build up your track record literally when we raise funds you know where we may or may not be in the middle of that right now um they take your whole bank ledger like every dollar that comes in from an lp and every dollar that's wired to a company it's just in an excel spreadsheet yeah and so everything is recorded and so you know you go too wild by a second or third fund when an lp is really looking at you they may say like love to see this smooth out a little bit you know the other thing is just what i say network atrophy which happens to everybody which is like if you're not constantly replenishing your networks yeah um not everybody are the Collison brothers.

2:27:36Um, I mean, the big, the big thing, the big thing, the big red flag for me on the angel side is, you know, as an angel, I've 50 plus companies that I've put various checks in, uh, both of my, uh, you know, true banger unicorns. I would not, I got 25 K into, if I tried to do 50 K, they would have said, sorry, like, you know, we have a bunch of people on the round. You had access, but not that much access. Yeah, yeah. I had access and I was intelligent enough to just give the founder money. And so if I were to go out and raise a fund, it wouldn't be authentic to say like, oh yeah, if I had a seed fund at that point, I would have been co-leading the round or whatever.

2:28:23You're talking about what happens with check size escalation. So I'll give you a couple of things to noodle on. So for me, I had no choice but to crawl, walk, run. So I was incrementally increasing my check sizes in the same kind of rounds. So the same rounds I was doing 12 years ago, we're doing today. Now, most people will just say, oh, I can go a little bit more. I tend to think if you talk to other seed investors, that kind of line is around somewhere between when you're asking for 250 to 500K, it starts to get tight. So you could have an aggressive, you know, one model is you could have an aggressive angel who gets that right away and starts firing the million dollars instead of 25 and they still have a hot hand they still have a good network they still have good judgment and nose like that can work um the problem is like you're gonna you're probably gonna light a lot of money on fire too because the deals are moving too fast and they don't have like that deal judgment going but the broader point you're making is a very good one which is around like what check size can you really write in the competition set yeah in the one in the companies that matter.

2:29:27This was fantastic. We definitely do have to have you back on. We can talk for another five hours. I got to ask one more question. How do you think X is today in comparison to the good old days of Twitter? I think you were one of the first people I ever followed on tech Twitter. I got on somewhat late. I was in college. I mean, five-letter username. It's no four letter username, like at TBPN, but it's pretty good. I'll see new people follow me. And like, usually it's just bots or people with like, you know, an animated. The anime profile pictures, there's alpha in those. Some of those folks are really great at AI engineers.

2:30:09But like recently, a bunch of people have like followed me and I'll look at like recent followers and they'll be like Barack Obama. That's awesome. What's so funny? Yeah. If Elon, if you're listening, I love X. I love Twitter. I've been on it for, I don't know, over 15 years. I just want TweetDeck back. Because I think TweetDeck being removed has disrupted my flow and I've never, I haven't been able to like find my footing again, but I think the content on there is great. It's just, it's harder to find. Yeah. Right now. And I tend to get the best tweets in my social chats, in my, in my group chats.

2:30:47Yeah. Yeah. And to me, that's a sign that like the interface is too much. Yeah. We talked about this with Eric Torenberg a little bit. A lot of the alpha has shifted to these big group chats and there is a little bit of that that's lost. I mean, Twitter originally was like the global group chat for the world and for tech. And you had NFL Twitter and all the different Twitters. There's still a little bit of that. And we're bringing it back with the show. I think Elon and them can make more money by going back to TweetDeck, redesigning it. And then in each stream, you can have different ads just at the top.

2:31:19It's like such low-hanging fruit. Yeah. Yeah. Well, this is awesome. Thank you for coming on. Let's see you again soon. Congrats to you guys. Yeah. Thank you. Great to meet you. Take care. Cheers. Let's bring in Dan from Chain Guard. Boom. Announcing a pretty medium-sized round. I think it's just a couple hundred million dollars. And by the way, did our 3 o 'clock meeting get moved to? Oh, did it get moved? To 2.30. So we got even less time. Wow. Okay. Well, we might have to reconfigure some of the agenda because a big meeting just got moved up. And it's all the way across town in LA traffic on a Friday.

2:31:58We are going to be in trouble. We will figure that out. But we will first have a chat with Dan from Chain Guard. Welcome to the stream. Thanks for having me on. Yeah. Thanks so much for joining. Congratulations on the hefty$356 million Series D. We'd love for you to introduce yourself, break it down, give us the news, tell us what's up. Oh, man. I was just on my roof 10 minutes ago trying to get my Starlink to work because my internet was down for two hours and it came back on five minutes before this. So I'm so happy to be here. There we go. It's a miracle. It's meant to be. Yeah. Perfect timing.

2:32:37Where are you right now? Yeah, yeah. Are you off-grid? I'm in my basement in Rhode Island. Oh, nice. nice yeah very cool um yeah we're an all remote company um yeah we're about three and a half years old at chain guard um we got started during the pandemic so there were no offices and we've kept it that way as we've grown uh but we're building a safe source for open source software um open source is this kind of like hippie software movement uh that's been around for like 30 or 40 years but it's like anyone writes code and puts it on the internet for free and people use it and everyone kind of gives back and trusts it.

2:33:11And it mostly works. It's awesome. It's like 90 % to 98 % of the code that people use when they're writing their own applications. But when you're using code that's written by anyone on the internet, it turns out not everyone on the internet is a nice or responsible person. And that leads to security issues. What was the single moment? I was about to say. What's the inciting story? Is it SolarWinds? What do you go back to as like the foundational story that we will be able to prevent in the future? Yeah. Solar Wings was like one of those eye-opening moments. It's something I've been paranoid about for a while, though.

2:33:47There's actually this paper that was like written in the 70s by Ken Thompson called Reflections on Trusting Trust. And it was like a Turing Award winning paper. Like it was his paper after he won an award. and he kind of proved by pranking all of his co-workers at bell labs that if like there's a backdoor in a compiler a compiler is a thing that turns source code into like you know the thing you're actually going to run then you can't really trust any of the programs that are ever built with that or any of the things that are built with those things and it's an awesome paper and then everyone just kind of blocked this out for like the next 40 or 50 years until solar winds happened basically where somebody actually spent the time and did something like that and then had dramatic consequences as a result to all of those kind of downstream customers.

2:34:28But my co-founders and I have been working on this stuff for a while at Google and SolarWinds was kind of the kickstart to actually get this company going. Got it. So talk to me about, I mean, the ramp on this company is crazy. What was the first customer? What was the go-to-market? How did you scale? I wanted to hear all that. Yeah, we spent a while in the beginning trying to figure out what we wanted to do from a product side, right? Software supply chain security, open source security. It's a whole bunch of problems. It's not just one problem. And it took a while to figure out which one people actually wanted to solve first.

2:34:57There was this topic everybody knew about after SolarWinds. There was an executive order from the Biden administration, that kind of thing. But nobody was really ready to take action yet. They were all just paying attention to and learning about the space. So we tried a bunch of different things. But this product that we have now, our Chain Guard Images product, we started on it pretty early. And it took a while to get going because there was a lot of software that we had to build to get to this point where people could come to us and get whatever they wanted to run from us. um we first started selling it like oh sorry go ahead oh yeah i i just wanted to hear uh just finish that story and then i'll ask the next question about you know yeah we really first started selling it about halfway through calendar year 2023 we got the first couple customers on board um we had a couple sales reps at the time they reported directly to me um after it really started selling though and we had a feeling it was repeatable we brought in a vp of sales really started to scale that but we've kind of been perpetually behind on you know growing our sales team as a result.

2:35:52The demand has been more than we can handle. You're doing great. Talk about, I want to ask you a more potentially just a fun question, not so serious. Talk about the brand. I think if you said 20 years ago that like a security software company would have such a fun, delightful brand, they would have kind of laughed at you. Is it just an extension of, of, you know, the team and your guys' internal culture or how did that come together? And, and what's been the customer response to that? Because I imagine you're like at this point, many of your customers are not just cool ex-native startups. They're, you know, really, you know, scaled enterprises.

2:36:38Yeah, I think, you know, it's a reflection of in some ways, our internal culture, right? Like security is really serious work. It's the type of security we do is really tedious work. It can be boring. It can be hard stuff nobody really wants to do. And we try to keep it fun. One of our core values is we do serious work, but we don't take ourselves too seriously. And we spend a lot of time on that one. We have fun in all hands. We do crazy stuff summits, that kind of thing. And it helps keep the culture light. When you're about to go spend eight hours trying to fix some tiny bugs somewhere in some piece of software you don't understand, it helps to laugh every once in a while.

2:37:11It keeps everybody engaged, keeps everybody having a good time, especially when things get tough. Um, and we try to, you know, reflect that in our social media and our branding and the events and all of that stuff we do. Um, I get cold called all the time. There's all these brands out there and like just some personality and authenticity really goes a long way in this. Totally. Uh, what, what, uh, what, what are the, the general risks in, in, in, you know, cybersecurity risks around software that, that kind of like keep you up at night that aren't related to chain guard directly and what you guys are doing so kind of like more at a macro level um i mean this one's sort of related to us but it really is the one that keeps me up at night but we don't have a perfect solution to it either so so i don't feel too unfair but it's the xz utils attack at the start of uh last year if you remember that one i think that's the one that probably should be keeping the entire industry up at night um it was this piece of open source software that had been around for like 30 years it's this compression library that's used everywhere across the internet you know as you upload download things it all gets compressed and decompressed just like from silicon valley um you know the middle app compression kind of thing um uh it's everywhere you don't even think about it and it was maintained by just one person like a lot of projects are for you know like a decade and uh somebody else just showed up and started helping and they were like fixing bugs doing good stuff cleaning up the old code nobody else got around to for like a year or two and then the original person was like you know what i've been doing this for a long time you're doing a good job why don't you just take over and the original person just kind of left uh and then three months later this malware gets slipped in it was incredibly sophisticated and it turned out it wasn't even a real person it was just like a made-up name on an email list uh the name was gia tan yeah gia tan that's not even a real person um like there are people with that name and they had a terrible week uh getting harassed but none of those were that gia tan um and uh it was luckily detected at the last minute and it was a really close call but that's not the first time that's happened i'm sure it's just the first time we've noticed and that's definitely not the last time that type of thing is going to happen yeah it's about trust in the end you have to trust the people that are doing this and you don't know if they're a nice person on the internet it's that what's that old meme you don't know if someone on the internet is a dog right yeah yeah a dog no one knows you're a dog yeah a dog uh russian or north korean hacker you know nobody on the internet knows these things so it's kind of related to what we do so but like it's a hard one it's impossible to solve unless you know the identity of every single person and all their entire life history.

2:39:38Yeah, this is somewhat related. I can imagine there's a world where this is handled by the government. And if there's critical software that's identified, it's like, we're going to find this person and verify who they are and basically do a background check. On the other side, the more futuristic Silicon Valley tech approach might be, hey, we have incredible software LLMs, we have AI agents, what if we just run an LLM over every piece of public code constantly, review every Git push or every pull request, right? How are AI agents effective? Is it just going to be like a cold war of both sides using AI to sneak ever more complex hacks in and catch them as a cat and mouse?

2:40:24How are you seeing AI and AI agents helping or hurting in the future? I'm scanning the internet right now while we're talking. Yeah, I'm vibe. I'm vibe scanning the internet. Yeah, no, it's an arms race, like everything in security. Attackers get better. They move around and find different ways in and defenders have to keep up. Right now, I think we're losing that war. We're getting a lot better at finding vulnerabilities in software and finding ways to exploit than we are at keeping up with that. I hope that changes. AI adoption in security has been pretty slow. And for a good reason. It's kind of scary.

2:40:59you don't want to just run these things with direct access to all of your systems but attackers aren't slowed down by that they're running this stuff every day and every week as it changes so it's going to be a kind of wake up call and catch up period as the defenders figure out how to use it as well as the attackers are what's the what's the vibe in the security community right now um just is it uh i remember i i like accidentally landed in vegas during DEF CON or Black Hat and was kind of out of my element one year. But what does it take for someone to break into the industry? Where are the key pipelines?

2:41:37Are people even like, are universities relevant here anymore? I know there's a lot of hackers that just kind of do CTFs and then become famous. But what are the typical pipelines into either career at your company or just the industry broadly? Yeah, security is both really easy to break into and hard at the same time, right? Like, like you mentioned, universities aren't terribly relevant. There's no, you know, college that you get a degree in cybersecurity from, even programming in general, right? You can learn this stuff on your own. I learned it on my own. I did mechanical engineering, I never took a programming class.

2:42:09But it's also hard because there's so much esoteric stuff, like there is no curriculum, you kind of just have to spend all that time on those forums and reading hacker news and reading all these different sources. because there's not a lot of credentialism, but there is still this kind of obscure, dark knowledge base that you do kind of have to pick up on on your own. But it is incredibly welcoming. Hopefully you had a good experience when you landed there in the desert at DEF CON. It's always a fun crowd. Yeah, totally. Yeah, it's way more fun than RSA. You never know where you're going to get in Vegas.

2:42:39It might be the Plumbers annual conference or an arms dealer conference. It's always different. Right. But yeah, I remember people were joking like, oh, like, don't even go near the DEF CON folks. Like they'll hack your phone in two seconds while you're not even looking. No one takes a shower. Yeah. Yeah. So what's next for the company? I mean, you have a new war chest. You mentioned hiring salespeople, scaling that up. What are the new challenges? What are the goals for the coming 12 to 18 months? Yeah, we're trying to be the safe source for all open source. Up until today, it's been pretty limited with just our container images.

2:43:17We're adding new products. We just announced a few a month or two ago. Virtual machines, language-level libraries. We're really just on the tip of the iceberg when it comes to open source. So we're scaling up our investments a lot in R &D, our automation, making this stuff easier for us to do as we continue to grow and scale the amount of open source that we have. It's moving even faster. You asked about this about AI. Open source is accelerating. You can crank out code even faster now. So today it's more people writing more code. All code has bugs. We haven't really made an improvement dramatically that way.

2:43:47And like, you know, the number of bugs per line of code written. In fact, it'll probably go up as more inexperienced people start writing more and more of this. So the security gap is getting wider and we have to get even faster at it. Yep, that makes sense. One more question on AI and we'll let you get out of here. Dario over at Anthropic just published a piece, The Urgency of Interpretability. uh jordy and i were talking a few months ago about uh deep seek and this idea that even if it's open source uh there could potentially it's a little sci-fi but there could potentially be a manchurian candidate buried in the weights of one of those models uh is that something you're thinking about is this pure sci-fi is this a year two five ten out how should we think about uh auditing the output of open source llms because that seems like a really valuable target if i'm a hacker yeah i've seen studies not even just recently you know within the last couple years where if you could taint a percentage of the training data going into a model you can control some of the output this stuff is not possible to reverse engineer code is hard enough to reverse engineer and this is that scaled up by like a thousand x yeah um open source models you know there is an open source definition for models and these ways but you know you can read source code it's hard but you can't read these ones and zeros and a you know a 40 gigabyte file um it would not shock me if it's in there and even not even just deep seek and any of these models intentionally or intentionally we like to think that we can review stuff line by line and catch these bugs but there's no possible way to do that with lms the whole explainability piece is scary totally um well thank you so much for stopping by we we have to cut it short because we have to run to a meeting.

2:45:26But this was fantastic. We'd love to have you back on the show. Hopefully there's never a big security incident, but if there is one, we'll be calling you. And we'll be playing the sound effect. You know where to find me. Thank you so much. Thanks for coming on. Good luck. Have a great weekend. Yeah, we'll talk to you later. Bye. See you, Dan. Fantastic. Well, we have to wrap up. We have one last ad linear. You heard from the CEO directly. It's the new standard for modern product development. Go check out Linear.app. Build with focus, ship with care, Linear.app. And thank you. We will wrap up there.

2:46:05We will be back Monday. Yeah, we're sorry we have to run. It's going to be a massive week next week. Massive week. We're going to be on the ground at Hill and Valley in DC. We have a lot more planned, a lot more timeline, a lot more top stories, a lot more real estate stories, hopefully. That's right. I'd love to break down some more mansions we'll see anyway thank you for watching you folks we'll see you soon have a fantastic weekend have a great weekend bye cheers