OpenAI–Microsoft Restructure, Winning Formula for AI Founders, 𝕏 Timeline Reactions

29:31It's like cost-based pricing is like, you know, the most instinctual economic force in the world that like a child can understand. And yet we justify all these different things. And sometimes it makes sense. Sometimes it does make sense to lose money on SaaS for a little bit. If you're building a, you know, some sort of network, some sort of locked in thing, some sort of high margin opportunity down the road. Anyway, if you're growing your business, you need to analyze some data, get on Julius, What analysis do you want to run, chat with your data, and get expert-level insights in seconds? They're loved by 2 million users and trusted individuals at Princeton, BCG, and Zapier.

30:10Equally important, we need to talk about Profound in the context of ChatGPT traffic. I would not be surprised if the company that Isaac is talking about here that's getting all their traffic from ChatGPT is using Profound. Probably Profound.com. It's in the back. There you go. I put it up on the… Reach millions of consumers who are using AI to discover your products and brands. Get your brand mentioned in ChatGPT. Yeah, whether it's consumer product that you're selling or enterprise software, you need to get on. We kind of took the conversation in an almost negative situation, talking about the long-term durability of these businesses.

30:47But I mean, really, this is crazy because it's organic. Yeah, exactly. It's like SEO is sort of like faded in terms of importance and relevancy. If you can be the first brand to go and find the correct strategy on Instagram and dominate, that's such a huge advantage. And it's the same thing with how did Airbnb get to scale quickly? Old school SEO, right? They just had landing pages for every single rental homes in Tulsa, right? And when you Google it, you go, they're really good at SEO. There's a whole bunch of other, Drew Houston at Dropbox, he was like, we copy pasted the entire like web 2.0 growth handbook, which was like, give 10, get 10 PayPal model of like, you know, incentive-based viral growth.

31:40And with Dropbox, he'd be like, I give you five gigs of storage. I get five gigs of storage. We add it all up and it just went super viral. And he said something like all of the, uh, all of the viral, like the viral growth, it's like, you can go way deeper with that metaphor, uh, which is basically like as an internet SAS company, you need to be sneezing on as many people as possible, which I think is hilarious. So he's like, he's like, you know, to get the viral coefficient up, you need to be sneezing a lot and not washing your hands. What does that mean in the Dropbox context? Well, it means when any, whenever someone clicks a Dropbox link, there's a little prompt.

32:22Hey, do you want to sign up? Hey, put your email, let's just grab your email before you view this PDF. Oh, oh, hello sign. Yeah, we acquired them. Let's bring them in. And oh, if you want to sign a document, like set up a Dropbox account, right? It's like, these are sneezing all over the internet is what he'd like referred to it as. I thought it was brilliant. Yeah. Yeah. AngelList has done this well with the roll-up vehicle product, right? Every time, you know, somebody gets invited to a roll-up vehicle, they create an AngelList account. they may maybe make their first investment and angelus can say like hey do you want to invest in this fund do you want to do this do that yeah um do we want to read through this journal article at all do you think we covered it i think we covered most of this um basically the the journal is asking uh about open ai's funding challenges we ran through this um yesterday and basically my conclusion was uh 300 billion dollars to oracle is a staggering amount of money but it does it is in line with what it takes to build all the data center capacity for an amazon.com, a Facebook, an Instagram, like meta platforms, a google.com, not the cloud businesses.

33:29And so I can see, I can imagine the spreadsheet that they used to develop the model. The question is, will the growth continue? I think they're on a fantastic growth curve. It feels like this will, that they will wind up paying a lot of this. And that's certainly what the market's pricing in based on the pop in the Oracle stock. It's not like Wall Street looked at the Oracle backlog and was like, oh, that's fake. This is bearish. We need to sell the stock. No, they were like, yeah, that money's coming in. 300 billion's coming in over the next half decade or something. So let's send it. I think you can think that it may not.

34:14materialized but still think it's a good investment in the short term sure but i mean they missed like purely yeah yeah but purely momentum maybe that's uh i think that's kind of odd it's kind of like a circular logic um because i mean then you get into like you could say that about like anything like like yeah well like they yeah i would say like a bunch of people a bunch of people are like wow yeah oracle is going to generate hundreds of billions of revenue from ai i want to own this stock. And then I'm just saying there's a category of people that are going to say like, okay, this stock's going to run at least in the short term, but maybe it's 1999 and we're going to see some type of correction here.

34:59We will find out. We'll see. I mean, we'll probably have more data on, I mean, as soon as Oracle's next quarter prints, we'll see exactly how much they're pulling down exactly how much they're building. OpenAI in the last nine months has committed to spend around$60 billion a year for computing from Oracle. And this will really, I mean, if this pencils out, this will drive a radical transformation in Oracle's business. We saw the chart in the journal where their core business, everything that they've built up so far is basically expected to decline over the next five years as they switch to pure cloud computing.

35:36They want to be a hyper killer. Eric Newcomer this morning said, being a 48 year old database company suddenly grow by more than the size of Salesforce over the course of a trading day is one of those occurrences that makes you wonder about the moment we're in. It's at once incredible and uncanny and terrifying, like your grandfather during a family reunion, gathering everyone around, tossing off his walker and doing parkour. Good. Very, very funny bit. But Eric Newcomer also was bearish on OpenAI at around 30, or at least very skeptical. Yeah, maybe a year or two ago, he wrote kind of the bear case.

36:19But I think this is a very fair...

36:23Yeah. OpenAI loses billions of dollars a year and has told investors it is on pace to make$13 billion in revenue this year, according to a person familiar with the matter. less than three years since the launch of ChatGPT, OpenAI is tying its fate to a belief that companies and consumers will increase their spending on artificial intelligence at explosive rates for years to come. And I do wonder, like, you have to believe in the agent of commerce story to really see another, like, 10x in revenue. How do they get to a high, I mean, the projection that people are underwriting open ad, I believe is 200 billion in revenue in like 2030.

37:05And, and it's hard to imagine, like, am I going to pay$2 ,000 a month? It's hard to exist. Is everyone going to pay$2 ,000? My soundboard. Would I pay? Yeah. I want to, I want to hit the air horn so bad. Yeah. Uh, yeah, I, I think. You got to monetize the free users. Yeah. You got to monetize the free users. You can't get them all on$20 and$200 a month plans. Maybe the$2 ,000. The example that I always give is like the average American, if they don't have a show they like on your streaming platform, they will just cancel it. Yeah. Yeah. Like, I mean. Like they're like, sorry, I don't care. People just haven't upgraded.

37:38I mean, people are just starting to experience like the reasoning models. I don't know. Like if the paid plans stick around, like it could be, they could get a lot more people. Especially if it goes through your business, if you're expensing it. um if like you know how much how much how much money is spent on like email subscriptions across yeah it'll be interesting an interesting pomp is like do you think that netflix or uh open ai will have more subscription revenue in 2030 let's say open ai by mile yeah and you think that's because people will pay to have this like all-powerful assistant that can yeah I mean, I guess the only question is just like, is there a better way to monetize?

38:26Like, can you get$20 or$200 of value out of someone by just handling their purchases and just doing the agent of commerce thing? Yeah. And OpenAI is completely aware that they're driving a ton of economic activity. You just saw it. It's a supplement company. They're like, I'm so happy that you're making millions of dollars from our product. Yeah. How exactly did you? Yeah. Yeah. Like, I'd like, you want to keep this relationship going? Let's get a cut. And that's super valuable. That's how Meta generates so much money. And Google too. The scale of like internet commerce and taking a cut of all of internet commerce is extremely, extremely, it's just an extremely huge pool of capital to draw from.

39:09It's a huge, it's a massive Thanksgiving plate to eat off of. Right. And so OpenAI deals that came to light in the past week have added more than$400 billion to the market value of two companies, chip designer Broadcom and cloud provider Oracle. They also put Oracle chairman Larry Ellison in striking distance of becoming the world's richest person. Oracle's stock market value jumped over$240 billion on Wednesday after the company revealed a giant backlog of computing orders. Most of that is derived from a roughly 300 billion five-year computing deal with openai well if you are generating media you got to go to fall.ai generative media platform for developers the world's first the world's best generative image video and audio models all in one place develop and fine-tune models with serverless gpus and on-demand clusters don't get caught writing a $300 billion check to Larry Ellison just going to fall down.

40:09Adobe, Shopify, Canva, Quora, and many more are on. You should be there too. Did we want to tap through this? Didi was highlighting Apple's story. It's so crazy to look back at these incredibly strategic acquisitions from two decades. 2008. So in 2008, Apple acquired Palo Alto Semi, fantastic name, really ahead of the curve. If anything, they created the trend. Let me conduct a company at Palo Alto. Really, yeah. The Silicon Company of Palo Alto. What's funny is there's also Palo Alto networks. And so I wonder if Palo Alto Semi was directly inspired. They're like, oh, well, we're in Palo Alto and we're doing something similar.

40:55Anyway, you want to wonder? I actually like this formatting of just Palo Alto Semi, Palo Alto Network more than the blank of blank. So you'd just be New York browsers? The New York browsers. It sounds like a sports team. The Palo Alto Semiconductors. The Palo Alto Networks. Yeah, the Palo Alto Networks. We should just rename our C Corp to Hollywood Content, Inc. But anyway, what did they pay? Didi says, few people know about Apple's acquisition of Palo Alto Semi in 2008, arguably the highest RY acquisition in tech history. The$270 million price Price for 150 engineers laid the foundation for all the Apple silicon chips you see today that have generated over$500 billion in value to Apple.

41:42And anyways, he's highlighting an article from 2008. An Apple spokesman said Apple has agreed to buy boutique microprocessor design company called PA Semi. The company, which is known for its design of sophisticated low-power chips, could spell a new feature for Apple's flagship iPhone and possibly iPod products as well. That is crazy. These kind of acquisitions have created this set of circumstances that allow CEOs to justify these absolutely insane. Because when you get an acquisition, right? Totally. The return can be as good as a seed to unicorn venture investment. Yep. But when you think about the Instagram acquisition, the YouTube acquisition, Palo Alto Semi, right?

42:28These were different. I just feel like there is an alternative scenario where they don't buy PA Semi. Instead, they're just poaching and hiring 150 people and it takes them three years to get there, but they eventually wind up doing it. But maybe there's important IP. I don't know. I wonder, what do you think$278 million is in today's startup economy? like if you go back to 2008 278 million dollars feels like a blockbuster acquisition to me this is totally that's what i'm saying yeah but but is that is that a 10 million 10 billion dollar acquisition two billion dollar acquisition like yeah it's funny that like mna has like actually outstripped like inflation well 100 when you look at scale ai right it's a 20 almost 20 billion dollar deal.

43:22Um, for half the company. Yeah. And so I, so I wonder like, have we really had a hundred X increase in, in valuations basically? Um, this makes me want to go dig into Apple's recent acquisitions because remember on the earnings call, Tim Cook said, Hey, yeah, we're actually acquiring a company like every few weeks. Like we've done basically one a month this entire year. Yeah. And everyone's been like, Oh, it's boring. Like who cares? Like, like these, they're not doing, they're not buying Anthropic or they're not buying Perplexity for 10 billion. But if they have a net PA semi in the portfolio right now, and we just have a net clock yet, like that's going to be amazing.

44:03So biggest M &A, I'm on Gemini, biggest M &A of the... Of 2008? 2008 was HP acquires electronic data systems. Okay. It was the biggest$13 billion deal. Like a huge merger of Mac and companies. Oracle acquires BEA Systems, which was a business software company I'm not familiar with. Love it. I love business software. Me too. $6.7 billion. Google acquired DoubleClick for$3.1 billion. That was a huge acquisition. Yeah. That's amazing. Which in hindsight, like, you know. It became a background of. Incredible acquisition. Yeah. And Business Objects was acquired by SAP. I like Business Objects. That's a good name.

44:48No, make. Yeah. It's like, we don't know how to name companies like this anymore. Business objects. That's so good. The business company. There was, yeah, a ton of like multi-billion dollar M &A that year. Okay. But it does feel like if Apple were to acquire, make a super strategic acquisition today. I mean, they were, who knows how real like the perplexity rumors were, right? They were, you know, Apple was under pressure to make an AI acquisition, but it didn't feel like apple would ever get to the point where they would buy perplexity for 18 billion or whatever they wanted out of this odd for it was like when you look at an application layer company they really don't buy a lot of applications i mean they bought shazam i believe but uh a lot of times they're what they're buying are these underlying hardcore teams that are going to create the foundation of the next hardware wave for them um like in the lead up to the vision pro they acquired I mean, you know someone who sold a company to them that went into their VR portfolio, correct?

45:50That is the Apple playbook is we have a vision. We're going to do VR or augmented reality in a decade, or we're going to do car, or we're going to do custom silicon. And so let's start hiring, acquiring little investments here and there, here and there, and here and there. They're not just going to go out and be like, we're trying to buy Waymo or like we're trying to buy the best asset. they're kind of the opposite. Yeah, they bought Beats, when they bought Beats for $3 billion, Beats was doing like$1.4 billion of revenue. Sure, sure. Trailing 12 months. Yeah, yeah, exactly. Again, it was a very, you know, fairly reasonable.

46:27So running through the PDA semi-acquisition, DD has the story, PDA semi-specialized in power-efficient chips with power PC chips that delivered 300 % more performance per watt than Intel Xeon at the time, which I believe was their server chip. Founded by the late Dan Doberple, DEC Alpha and strong arm legend, in 2003, the team had expertise in low power architecture that Intel couldn't match. The acquisition gave Apple the dream team that would create the A4 chip in 2010, launching Apple Silicon dominance. Key engineers like Jim Keller, G. Williams III, and Johnny Suruji architected the A-Series that powers two plus billion devices today, crushing Qualcomm's monopoly.

47:12This philosophy evolved into the M1's 20 plus hour battery life that's powering this laptop right here. Are you getting 20 hours out of that bad boy? I'm plugged in right now. I'm not risking it while we're on the stream, but I think we could maybe get 20 hours if I was low dim screen brightness and maybe not connected to the Wi-Fi and maybe just in a text editor. with a dark background the whole time. And it also had a 3.5x faster performance than Intel. One-third the power. The M line of chips today powers Macs, iPads, and Vision Pro. Without PA Semi, there may never have been an iPhone processor independence.

47:50iPad dominance, no Apple Silicon Macs. The small investment, a Series B round today has generated$500-plus billion in value. of strategic acquisitions like this can make or break the future of a business. And if you, what else? Turbo Puffer. It's on the schizo. We puffin'. We're puffin'. Search every byte, serverless vector and full text search built from first principles on object storage, fast, 10x cheaper, and extremely scalable. Pretty much used by every being, company we've been able to find. There's a bunch of logos that they have that are absolutely crazy that they're not even listing on the website.

48:32So a lot more to come from Turbo Puffer in the near future. But for now, get on it. Did you want to go through this post by Ajni Midhad and Jason? Yeah, I thought this was a couple things you could read into this. So many, he says, many VC firms are being asked by their LPs how they so utterly missed the entire 20 to 25 cohort of frontier AI startups that are now category winners. Worse, they're being asked the same by next-gen founders. I've never seen so many traditional investors become obsolete so fast. it was like if you think about if you think back like the 20 uh 2020 through 2025 you had zerp where just every category was going crazy and then you had like like fintech was super hot crypto was super hot it was easy to get kind of like if you were if you were a generalist vc a lot of generalists like decided i'm gonna go just be a crypto investor yep uh or or i'm gonna focus really heavily on fintech and then you also had the the sort of american dynamism boom which people were were drawn to in different ways and and but when you look back at um um when you look back at when some of these leading ai companies were started yep uh it really was like 2022 during like a time where a lot of vcs were like trying to you know do like basically damage control on the on their portfolios, right.

49:59They had funded a bunch of companies like at, at insane multiples, we started seeing, um, you know, a real kind of like correction in, in, um, uh, in venture. And, and, uh, if, if you just like, weren't really didn't have your eye on the ball and weren't like seeing kind of the future, you missed a lot of. Yeah. And when I see, when I think about the cohort of frontier AI startups, who do you put in that bucket, in that cohort, 2020 to 2025? Like if you're a traditional investor that doesn't want to become obsolete, what logos do you want on your portfolio page that signal to the next generation of founders and LPs that you did not utterly miss the entire 2020 to 2025 cohort of frontier AI startups?

50:50uh first example that came to mind was like listen labs right six billion dollar company now uh started in 2022 uh seems like it you know seems very obvious in hindsight but if in 2022 you had like funded you know 15 fintech companies and we're trying to figure out what was going to happen to them as interest rates were spike you know spiking uh and and you were distracted by crypto you just like didn't you know you weren't there were people that were locked in on ai right the people that i the people that i that come to mind is like people like a lot gill who are in a lot of these companies right um the a lot of the platform funds like i mean obviously uh uh on jane at uh at andreessen is is they're in a lot of these companies but they're multi-stage right So it didn't matter.

51:45You didn't have to catch them at, at a series A or seed, although they, they caught plenty. Um, and so, and then the other thing is like, if you're not in, if you're a platform VC and you weren't in any of the winning foundation models, like what, what were you doing? So Postla has a fantastic story around early open AI. Thrive has a fantastic story around early open AI. Then there was that first, right around the moment ChatGPT happened, I remember there was a big round and a lot of investors got in there. And it was in the tens of billions. And it was a crazy valuation to kind of come out of the gate with.

52:32There was already this Microsoft deal. It was a complex thing. You had to take a ton of risk on the nonprofit, for-profit conversion. but yeah there was there would be clear there was plenty of reasons not to do percent open ai like whether it was pricing the structure there was a meme about uh the model the foundation model layer will commoditize right yeah and so if you fell for that meme you are not in and then there was like the application layer it's there's no value there was a period where people fell for both of them and then you're sitting here you got no foundation model bets no application layer bets.

53:11And you're like, well, even the new foundation models are too expensive. I can't do those. And then this company is just like trying to fast follow that company that already broke out. So, I mean, when I think about the 2020 to 2025 cohort of frontier AI startups, yeah, I think 11 labs fits in there. I think mid-journey, no one got into. I think I would put DeepMind, you couldn't invest because that was at Google, but it's got to be OpenAI, Anthropic, or a few of the other major application layer companies that have done very well. And if you're in those, even if it was a growth round and you got in later, if you at least built a position and have something going on there, it seems like you kind of check this box.

53:58But it is an interesting question to phrase. you gotta you gotta buy fifth ave sometimes that's right linear linear is a purpose-built tool for planning and building products meet the system for modern software development streamline issues projects and product roadmaps i think linear.com i think all the breakout ai companies are already running on linear and you should too well we have some news from dylan patel uh over at semi-analysis another giant leap nvidia rubin cpx specialized accelerator and rack Inference Pre-Fill Specialized GPU. Dylan says, NVIDIA has widened the gap for inference rack scale architecture yet again.

54:39Pre-Fill Specialized Inference chips massively lower total cost to own per million input tokens on long context transformers. As usual, other AI chip upstarts will follow this with Pre-Fill Specialized chips, but later. And so yet another bullish take for NVIDIA. Everyone's competing. Following the AMD story has been interesting. Dylan's been pushing AMD to fix some of the bugs, get more serious about AI, really talk to the developer community, engage with the developer community. AMD was doing that, was seeing some positive early signs of being taken more seriously. George Hots was on the team a little bit, but has since pulled back I can, you know, Jensen sees semi-analysis too and can see, oh, AMD is coming for my lunch.

55:32I'm going to step on the gas. And it seems like, yes. So congrats to everyone over at NVIDIA for putting on an absolute clinic. Jack Fields says, while he's quoting Sam, there's not a single person in the world who needs a two terabyte iPhone 17 Pro Max. Jack Fields says, slaps car roof. this baby can fit so much other in it is that a thing like yeah if you look out if you look at like storage there's like a category called other and is it big is that just usually i wear it usually is uh it's a bad sign if i have other going on i have a one terabyte iphone and i don't have any other i have no other my my my phone is applications and then a little bit other i think I'm looking now.

56:24I don't have it anymore, but it used to be a much bigger. Well, they've done a lot better exposing where the data is actually stored. I think the two terabyte phone, that feels like it's for someone who - Mr. Beast filming his entire - Yeah. And specifically the new phones, 48 megapixel cameras, Genlock so you can run them for a long time. Better heat management so you can probably record for 10 hours if it's plugged in, no problem. And then you're saving all that footage. And you can record in raw video now. Raw, so those are huge files. So there is a world where if you're using this as a production tool.

57:08I saw another take that was like the iPhone 17 Pro gets you ready for the$2 ,000 iPhone. Mentally, that's a threshold. That's a Rubicon that everyone has to cross. and maxing it out and offering that level of performance and saying, hey, look, we put pro on it. You have to be using this in a professional context. You should be expensing this. And for someone like Mr. Beast who says, yeah, I want to find it. Every camera company just being like, where Apple's not a threat. They're really... He might be placing that with an iPhone soon. Watch out, Sony. Watch out, Sony. Tim Cook wants your lunch.

57:48He's cooking. He's cooking. Naveen Rao is leaving Databricks, a little bit of a trade deal, a$100 billion startup to build a next generation computer to shrink AI compute costs. And Databricks plans to invest. That's bullish. Databricks sits around$100 billion and just raised 1B. They're also at a$4 billion run rate. Congrats to Databricks. We had our gong. The core problem for the AI industry is that large models are limited by memory bandwidth, interconnect latency, and power. So every token produced can be too expensive. a purpose-built computer may tackle those costs by bringing memory closer to compute, wiring chips with faster links.

58:23Is this data center focused or something that would actually sit on your desktop? Is this a George Hott's tiny box competitor? I'm not exactly sure, but congrats to Naveen Rao on the new gig. We will be following the story and monitoring the situation. Big move. We'll try to get him on. When you build those computers, make sure you're on numeralhq.com, Naveen. Sales talks on autopilot. Spend less than five minutes per month on sales tax compliance. Otto von Tweetmark says, can you shorten an entire country? Referring to Albania. Albania is appointing an AI-generated government minister to govern the country's finances.

59:06Apparently, they've had so many issues with corruption and fraud. They're just like, let's just make an AI. yeah no one's gonna no one's gonna prompt inject the top comment is uh their their alternative is in albania i don't i've never really uh i i don't i don't think i know many albanians has some wild stories about going to albania i believe i don't want to dox too much but uh here's some here's some funny stories hopefully we can get him to share them on the show um um The idea of like, let's just use an AI to like clean this up. It's like, that's, who's prompting it? Like, are they reliable?

59:49Well, what if they're, I mean, Miramirati is Albanian. Yeah. Albanian Americans, so they could get thinking machines. It would be a pretty crazy story of, what's it called? Sovereign AI. It would be a sovereign AI story. I don't know. I don't know if they're claiming that it's their national champion. You actually, Albanian Americans. Yeah. Well, if someone in Albania needs to chat with someone about their tax return, maybe they could get on fin.ai, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake-offs, number one ranking on YouTube.

1:00:23John, I've been informed that back home in the studio, the whole team is clapping along with us during the interview. Hopefully we get the audio mix in and everyone goes for it. Gary Tan had a post. AI startup founders tout a winning formula. No booze, no sleep, no fun. But Gary Tan disagrees about the no fun, though. And this is from the Wall Street Journal. San Francisco. This is the vibe right now. Startup founding. And we talked to a few of these folks. One of these guys came on the show just at YC Demo Day, actually. So fascinating. And this was a second. This is clearly a story that was inspired by that previous story of that founder who said that the vibes 996, run hard, lift heavy, marry early, that whole viral quote.

1:01:13This is probably downstream coverage of that. But in San Francisco, startup founder Marty Kausis was at the office on Sunday. Where else would he be? Kaus is 28 years old, recently posted on LinkedIn that he put in three 92-hour weeks in a row. He went on vacation once, he said, but flew home early because he was too stressed about work. His goal is to build a$10 billion company in 10 years. The motive isn't purely financial. There are easier ways to make money. This, it isn't part of a social mission either. We built customer support software. It's not like this grand vision that we're saving the world somehow.

1:01:49He compared his pursuit to a board game, one he wants to win. I could be a programmer working at a big tech company, he said, but that doesn't sound cool. Instead, he raised$51 million for Pylon, an AI startup he co-founded. Congrats, Saizgong for that. Yeah, I was just reflecting on this whole vibe and the coverage of this vibe and thinking about when I got to Silicon Valley and what was similar and what was different. You didn't have a PR person working over coverage. That was your mistake, John. I know you only raised like 17 grand in your first round. Raised$17 ,000. And there was no concept of going to the office because the office was my bedroom.

1:02:31And my co-founder lived in the same bedroom as me. So we had two beds in the same room. And we would wake up and go sit at the same desk next to each other. That's like a real lock-in. Because you don't even have a private life, right? There's nothing. You have nothing. Nothing. It's purely like there was, there's one local bar that we went to once in Sunnyvale because there was nothing to do, but we would, we would go outside and we'd throw the football. Big skin. The pig skin. We would go outside and get some sun and throw the football back and forth and then go back inside and just program.

1:03:04And my, and my day was literally like wake up at noon and cause you're not having calls, wake up at noon, program until 4am, fall asleep, do the same thing the next day, seven days a week. and there was no, there was no alternative. And there's other, like we are also in this weird, I mean, also I wasn't 28. I was, I was 21 at the time. It's funny because the saying like, I put in like three, like obviously respect to Marty, but saying I put in three 92 hour weeks is another way you could say like for the last three weeks I've slept and ate and done normal human things for about 12 hours a day.

1:03:39Yeah. And the other 12 hours I spent working. Yeah. It doesn't hit the same as three, you know. Yeah, it is wild. But I don't know. I mean, in general, like if this is a, if this is, there was a time in Silicon Valley also that you could raise enough money that you could just immediately be on like a party circuit. And like, clearly this is a step in the right direction away from that. It's like actually taking business seriously. So hugely bullish overall. uh it's just funny like thinking about like like the money flowing like there were not that many companies that in 2012 that were raising uh like double digit millions but then there weren't that many companies making money like we certainly weren't we had no users so like who was going to fund us like 17 000 was the right amount of money to give us like and also like it's not like we were being recruited by big tech like if i tried to get a job there you're like no the capital markets were efficient they were they were like i didn't feel like i didn't they're about the 17k i wasn't that experienced like i was just trying to you know like do something build some build yeah it is a it is a you know it's very real that like a lot of founders would benefit from like having their first fundraise be like a hundred thousand dollars which is just enough for them to like hack for two years and not have to get a job but the current the current state of the capital markets means that if you're like talented and charismatic and compelling and you have an interesting idea you can get at least a million probably well beyond that yeah yeah yeah um you know at demo day like it was very obvious yeah for the most part when you could tell yeah i pretty much was guessing every time i was like let me guess your rounds closed yeah um i mean yeah in in in 2012 like i think there were probably like five or ten teams that like raised solid rounds coming out of like an 80 team batch like it was it was not it was not snap your fingers and the money shows up the i mean the hottest like most overheated round was done at like 60 and everyone was like this is a bubble this is insane there's one company what was a company was it was a company called virule and they were actually really good at viral videos and they they were great at video production and they built an ad network and we're doing sort of like some programmatic ads.

1:06:00So it was more like an ad business than like, I don't think they ever fully stuck the landing on like becoming like a major platform. Like I don't think that they IPO or anything. I know the founders done quite well and has, I think a number of businesses, but, uh, um, they, they launched a few like extremely great launch videos. They, I feel like they almost, you could almost go back and credit them with like creating the original launch video. You should look up V-I-R-O-O-L, like launch video on YouTube. V-I-R-O-O-L? Virule, yeah, V-I-R-O-O-L. And the whole idea was like they would get you to go viral, and so you would pay them, and then they didn't.

1:06:40It's still a company. It's still going. It's still cooking. Well, Alex Debalov, I believe, is the founder. Great guy. Still have 50. LinkedIn says, I don't know, this company looks pretty dead. Okay. Well, I mean. Oh, it's, it's now called, uh, I guess it was a, I mean, the founder, it was super young and, and I met him in college and it, you know, it was just like, he really was the type of person that you would want to fund at 60 because like he was making money in his dorm room, like hand over fist too, like had actually scaled the ad network and was like bringing in real revenue and real profits.

1:07:15It was just maybe like, it wasn't necessarily going to turn into like, you know, AdWords because he didn't have like a Google attached to the front of it. It's still like super impressive business, right? But they had worked with this video production company called Glass and Marker, which I wound up working with later, sort of like a precursor to sandwich video, a precursor to a Jason Carman production, and was particularly good at creating this like just super cinematic, like Hollywood level video production for like a launch video. And they put out a few that were really good. I remember that like SWAT team going in, pulling in like this like blue uh this like blue goo that was like radioactive and it was like you got to get the formula to go viral uh it was great are you throwing them on there you're throwing them on there viral v-i-r-o-o-l alex devil if you want to come on the show and tell us the full story uh hit me up uh the moon probably the moon well yeah they were they were going to the moon um Yeah.

1:08:16The other funny thing that I like is this, so like, you know, these teenagers that they interviewed, they said, the Brass Ring is a trillion dollar company with a global user base. To grab it, they rarely drink, scoff at work-life balance and are locked in a 24-7 competition to be or appear to be the most obsessed. Um, there's a framing, there's a one framing, which is like, I don't drink because like, it's like, I've done the research and it's a carcinogen and it's bad for my health. Um, there's another one, which is like, I don't drink because it's like sacrificing because like I care about work.

1:08:48Like for me, my friends is like, we would drink every drop of alcohol that we could afford. It was just not that much. So we had like three beers a month because like that was what we could afford. And we, and we did not, it was like, yeah, like if we're going to Costco and getting like a huge box of ramen, like it's going to be a consideration if you take the 30 rack in the bag, that's going to hurt your burn rate when you're on$17 ,000 for six months, like an extra 30 bucks in beer is like material. It's, it's a serious. Yeah. I was hacking Chipotle, you know, with the like double beans, double rice because it didn't add anything.

1:09:23And then, and then. You're not being like, yeah, throw a Corona in there with my, with my meal at Chipotle. No way. um but i used to go to i used to go to um this is will be funny to you now but i used to go to the the first like 20 trips i took to air one i didn't go in the building yeah i would just bring jugs of water to fill up in this thing outside and i'd pull up with my car that had like 200 ,000 miles on it and just like just be like you know carrying these huge jugs of water yeah uh, fond memories. Here's, here's the trade-off. Um, why would I go to drink at a bar if I can be building a company?

1:09:59Um, I mean, it is the right trade-off and it is the thing that you don't want to lose as the capital markets loosen, right? This is such a, this, uh, all the people that are, uh, screenshotting this article. Why would I go drink at a bar if I could be building a company? That is a really, yeah, it, it, there is a little bit of this. That's like, uh, that's like the, The whole question the Wall Street Journal is clearly asking here is like - I don't even like bars and I don't like drinking, but this is still a funny quote. Yeah, yeah. No, I understand what you're saying. I understand what people are screenshotting it about.

1:10:34But the interesting thing is like if the money starts flowing in Silicon Valley, like the thing that you would definitely not want to lose is like the time in the office, like the time actually working. Like that's the worst thing to lose. Um, and so, and even if you have to justify it in this, like, you know, psychological way, uh, it's, it's good not to lose that. Yeah. Uh, because as soon as you actually go to the bar every night, like definitely not building. Yeah. I was thinking, I was thinking like, like I've always felt I had, you know, somewhat of a balanced life, right? I've had, we, we, we realistically, we work like 60 hours a week and that like we leave home at yeah somewhere around five it's pretty balanced get home around 5 30 um and then obviously working randomly on on you know nights weekends etc but i was thinking you know people say like social life work like you know family like pick two yeah and i realized recently took me a while to realize like how much i sacrificed like my uh like social life right because i feel like i have a social life at work and and um i'm lucky that uh a lot of the people obviously consider every person on our team a friend and uh and the people that i invest with are friends and the people that i work with are friends but um yeah you do have to this this is just um this culture of like sacrifice everything but the company works really well when you're 20 when you're when you're in your early 20s mid-20s depending on when you i think we i think we found the ultimate killer in this article.

1:12:15Hassab Ullah. He works out of Founders Inc., a waterfront campus in Fort Mason that provides desks, a hardware lab, game room, stage area for hackathons. He lives on one that eats meal per day to save time and avoid cooking. Ullah pays$700 a month to live at a former office building that was converted to a living and workspace for about 20 residents the beds which are clustered in a common area are fully enclosed pods he literally lives in the pod um with a privacy curtain similar to a train sleeper car with the curtain shut his pod gets pitch black letting him sleep days after working all night this guy is a killer i'm betting on him i love it this is not a larp seven hours a month is so little to live on in san francisco i assume that's where this is founders inc fort mason he's living in the pod he's living in the pod he's locked in it is funny it is funny to do to do out out to this guy you would think he could maybe eat two meals if he didn't do uber eats and he just walked to to grab some food but maybe it's too locked in too locked in yeah i i think it's probably worth the trade-off um but yeah i mean this is still i gotta put i gotta i gotta say like getting delivery is still an extreme luxury it's still a luxury back and back i would not when when we used to when when i i would not i was like on a like once a week like treat yourself to to chipotle type of thing and otherwise it was like yeah there's we have like chicken breast and rice at home yeah no no no like you know i've been in my own head being like uh you know the quote the meme of like your your mom says you have you know xyz at home but that was like in my own head i'd be like I have food in the fridge.

1:14:00And I'd be guilty ordering delivery. I remember one night I was up really late working. I boiled some water in a pot to make ramen. And I got sucked into a coating problem. And I let the water boil and evaporate. And it destroyed the pan. And it was like, that's our CapEx out the window. It was devastating. devastating hit to depreciation. Like we were expecting to depreciate that asset over two years and now we have to buy another pan. Like, what are we going to do? We don't have a pan. Pans are expensive. Money doesn't grow on trees where, you know, we only have 17K. It's rough. Um, Kausis, the, the guy, uh, the, the original guy from Pylon, um, is on the Brian Johnson diet.

1:14:51Okay. So, well, he's raised$51 million. To be clear, I do think that like all of this is proportional. Like if your business has grown to the point where you can raise 10 million or 50 million, like you do not be, you do not need to be living in the pot. Like pay yourself a reasonable wage. As soon as we raised real money and we're making real revenue, like we were in like decent apartments with cleaning and like, with like, it's amazing to feel like you, you have like a relatively the lifestyle of like a corporate athlete or even just an entry level corporate athlete, but it still feels like a massive luxury.

1:15:25A hundred percent. Like my, 800 square feet in an apartment yourself? When I first moved to LA, I had a two-bedroom apartment that I had a roommate. So I felt lucky to have my own room, but I had no windows in the room because the window opened up to a common area at eye level. So if I didn't have like, I literally put cardboard up. If I didn't have cardboard up, people would just see into my bedroom. I was like, yeah, and then super dark, but this, this quote is hilarious. He said his ideal employee for a sales role at the startup is a quote unquote PhD, poor, hungry, and desperate. I like that.

1:16:07That's good. Grinders. You gotta get grinders. People that want to be on the, on the ups and take risks. Yeah. There should be a term for somebody who's fast until their next like steak sales dinner. It's like they only eat during their closing. I only eat when I'm closing. like a real hunter on the savannah. This is pretty crazy. Nico Lockwoff, 25 years old, wants to build a trillion dollar company with the goal of replacing traditional insurance companies. His father is a lawyer from the insurance company. So he only hires people willing to work seven days a week. Of his 40 plus employees, around 30 are ex-founders.

1:16:47That is a crazy stat just because like it really speaks to the amount of founders that exist in the Bay Area now. Like, you could not, I mean, this happened, like, are you familiar with the Y Scraper instead of the skyscraper? There was a, this is in maybe 2008, 2010, there was one building where all of the YC companies lived after they graduated from Mountain View and went to San Francisco. They called it the Y Scraper. And there was enough of, so you have stories about like Coinbase working right next to the Airbnb guys. I don't know if that's exactly right, but like you, you could imagine a few different big companies coming and it was like, if one company failed, it would just be like, okay, come over to this company, like join forces.

1:17:35Um, but, but you couldn't necessarily do that to the tune of 75 % of the workforce in the first 40. That's that, that, that feels new and it feels like a, uh, uh, an example of how, uh, how much more popular entrepreneurship is these days. He says, he lives at the office, Lockwa said, who considers himself the most hardcore of his peers. Employees share similar feelings. Though not a work requirement, Lockwa said, two-thirds of our early employees got Corgi tattoos. That is hardcore. Wow. That's great. I have no tattoos. I've never been big into that world, but that is certainly a commitment. it um hopefully you own the ip so interesting this company uh i'm on nico's linkedin and this is a stealth startup still well he's not you're not you're in the they're getting you're in the journal and you're tat you're tatted up i think you're safe to come out of stealth yeah hopefully you have the ip locked up uh i went through yc with a with a company called Pear that was a, I think it was like an app for you and your significant other.

1:18:50And so it was, imagine a social network, basically all the features of iMessage, you know how now in iMessage, you can like see all the photos that you've shared between you and one person. So I can pull up like our iMessage and I can go into that info panel and see like, here are all the links that Georgie sent. Here are all the images. I can send you little stickers and all sorts of different stuff. Pair was that for like a romantic couple. So you could like draw to each other, had all these like fun little games and stuff. Um, and pair wound up getting sued by pair networks. And they were like, Whoa, Whoa, Whoa.

1:19:20Like we are a consumer dating, like messaging app for like a husband and wife to share their life together. You're a networking company, pair networks. Like you sell into data centers. Like why are you suing us? And they were like, no, you're a technology company, we're a technology company, you have to change your name. And so they did and they became couple and it was like this huge, huge, difficult thing. So anyway, the importance of getting your name IP locked down before you get the tattoo. We have an important name to add. So Senra is in the YouTube chat and says, can we get Founders Podcast on the board?

1:19:58Oh, absolutely. We didn't add you because this was so schizo. earlier but you are really the godfather of podcasting created the cat i don't think i don't think we can see up there i don't know we'll have to we'll have to see we can't we can't see you up there uh you have a ton of space to your left though so get down and go keep going to the left past vibe coding and past discord to the left past larry ellison that whole area you got like three feet to work with over there. You can draw massive stuff. There we go. Here we go. Oh yeah, this is good. Going downwards. This is perfect. Okay. I'm seeing everything.

1:20:39We're good. Lockwell regrets getting his Columbia University degree, he said, because he wasn't solving societal problems in class. I always want to do the maximally ambitious thing I can think of and make the biggest impact possible. Yuan, the Corgi co-founder, said her life too centers around work, which across the startup scene is populated largely by men. From a personal perspective, I don't mind it as much, but it does suck to see not that many women in startups. Jared Friedman, partner at Y Combinator, said the work ethic and energy of San Francisco's young founders feels like a return to the early days of the internet.

1:21:10And I agree with this. This is a great take. When people slept under their desks at companies such as PayPal, I actually see it coming as a full circle moment. AI is probably 10x as big. Friedman said the tech yeah I mean it's very helpful if you have you know five to ten other heavily funded companies in your category and so capital is not really a constraint for anyone and it just comes down to raw execution do we just conference Senra in right now on this? Yeah we gotta ask him about you gotta call Senra and get him get him to tell us about the sleeping under your desk should I give him a call?

1:21:49Senra, let's see let's see if he's available i'm i'm calling him i'll put him up if he's available he's in the youtube chat so hopefully you can come on the show uh i totally emphasize hey how you doing you're live did you need to call me yeah yeah you're live we saw you in the we saw you in the chat we got nat elias we're doing uh we're happy friday we're doing a whole deep dive on this wall street journal article about the young founders in san francisco who are working 12 hours a day six days a week there's a bunch of examples yeah so we wanted to ask you is hard work important or is it overrated we'll go to an article about people working more time no no working hard really hard and and the article being focused on the article is framed as like is like are they working too hard a little bit or like is this a larp are they pretending and uh we wanted to go to the source and get the get the final answer they do with the other that's what jordy says i said it's like put differently they're they're spending eight hours a day sleeping four hours a day you know we're doing whatever they want Netflix I guess I'm like what would I what would my what would our lives look like if we didn't have five kids it's crazy like and wives that we I don't know yeah dearly sorry that's part time buddy 996 is part-time raking David Senra has called it working 996 is considered part-time in the founders podcast world it's good did you guys ever i know you're into like bodybuilding did you ever read the education of a bodybuilder by no i should sounds fantastic okay so um somebody posted like the great lock-in and it's just like nine episodes of founders yeah oh i saw that i think so one of them i think is arnold's so arnold wrote two autobiographies one we use a 70 which is fine yeah but the way more extreme one he wrote when he was 30.

1:23:43oh wow that's young so the first half of it is really like 110 10-page biography right and then the second half is like his workout routine which is like another 100 pages but uh basically he would you know people were just like yeah i worked 12 hours a he's like so what else did you do with all the time it's like you're not working well yeah that's awesome i i don't want to get kicked off stream but uh he tells us i'm going to do the pg version of this like this is before he made it to america right yeah so he would go to like him and his other bodybuilder friends they'd go to like this forest out in austria or maybe in germany and they would bring a bunch of women and they'd bring a bunch of like beer and food like schnitzel or whatever that is.

1:24:29Schnitzel, okay. Yeah. And they would essentially like go out there and they'd strip off their clothes and they'd like lift like tree trunks and they'd swim in the, and they'd swim in the, Lake or something. In the lake. And they would just, essentially just work out all day. I was like, this guy's on Gremlick Street. Work out all day. Who's the, who's the hardest working founder purely by hours working, hours spent working on a single company that you've ever studied? elon probably because if the the how elon thanks for um reading and covering that episode it's so good you guys did a good job on it it was awesome so they're actually had a really interesting conversation recently with uh somebody everybody knows who's been a founder for multiple decades and i and he came up in the technology industry and he's been there forever sure and i actually asked him that question i was just like who's the greatest like entrepreneur you ever dealt with or like you knew about and uh he's like listen you might not like him you might not like working with him but it was undoubtedly without hesitation a young bill gates that would be my other answer if it wasn't elon yeah just from the time they started microsoft in that little strip that little um strip mall in albuquerque new mexico yep the guy until he left the company like i don't think he did a single other thing.

1:25:52Do you think that Bill Gates' hardcore founder mode era was defined by his ruthlessness with regard to deal making or actually the amount of hours he spent in the office? Like, have you heard stories about early Microsoft being this 996 culture working 12, 13, 14 hours a day? Or was it strictly that when he went into every single negotiation, he was willing to do anything to win so like he's not working 12 hours a day he was not so i'll give you a preview um the next episode i'm working on right now is about a young bill gates the title has to be something with hardcore because sure it's favorite word yeah so he would work 36 hours straight until he couldn't literally stay awake and then he just crashed and sleep in his office for like a few hours and pop back up that's hardcore it's like that's i don't want to hear about oh i slept i got a good night's sleep i'm a grinder but i got a great night's sleep last night yeah so like let me get it but there's eight oh oh you're a grinder let me see your sleep score better be in the single digits better be in the single digits but let me tell you one of the funniest stories about bill gates so the best book written about him is it's called hard drive bill gates in the making of microsoft empire so the same guys that wrote that essentially it's about it's a biography the first 35 years was like then they it was so successful they wrote a follow-up the follow-up book is not good but there is a story in the follow-up book that is one of my favorite bill gates stories of all time and the the thing i the thing i would say about bill gates is like he has a ruthless competitive drive that would terrify people and so one of his main competitors is this french guy i can't remember his name uh they would like you know they were going to war over and over again and they would go they would the only time they would like interact they'd find themselves at the same like computer conferences and so he he sees bill gates sitting on a folding chair in the corner of this computer conference alone looking at something and remember this they're like head to head competitors you know now this guy's completely disappeared and so he goes over and he wants to say hi to bill and then he walks up to him and he realizes that bill's in the corner by himself staring at a picture of the guy Of his competitor.

1:28:16He's just obsessed. Like a picture of you. Yeah. Yeah, yeah. Next time I see you, I'm going to make my profile picture when I call you, your phone's background. It will remind you of me constantly. If you hard drive, the way I described him in the first episode I made about him episode like a long time ago is that bill gates is uh gangas khan in a mr rogers costume yeah that's wild there's a few ways to do that that is uh yeah that's hardcore that is that that is hardcore yeah well thank you so much for giving us more context on what it means to hardcore be hardcore and grind in an entrepreneurship context hope you have a fantastic rest of your day thanks for calling me and I'm just gonna say publicly what I said to you guys just should I have your same we did New York Stock Exchange I'm super proud of you guys thank you you're absolutely crushing it thank you I don't think you'd have any kind of lemon at all very curious where you take this for years thank you we'll catch up soon see you love you bye and always good back yes even when you thought we weren't gonna have a guest they said we couldn't do it I said it was possible possible when you just got two random mics in the conference room that you could have a guest on your show, but you can.

1:29:43Anyway, honestly, congrats to everyone who got mentioned in this article. I think there'll be some snarky takes. I think there'll be some supportive takes. Overall, it seems pretty high leverage to throw up a flag that says, hey, I'm working hard on my startup. Get mentioned in the Wall Street Journal. They probably had to take, what, half an hour off to do a little phone call for this and overall probably pretty high leverage effort. So congrats to all the young grinders in San Francisco working 80-hour weeks. Good luck to you all. And congrats on your first Wall Street Journal mention. First of many, hopefully.

1:30:21And if you want to help grow your startup, get on Adio, Customer Relationship Magic. Adio is the AI native CRM that builds, scales, and grows your company to the next level. you can get started for free um did you see that uh polymarket is getting offers set up to 10 billion whoa holy market is of course a sponsor um what uh is volume just going through the roof isn't aren't most of polymarket's metrics kind of public because you can just look at the chain right yeah check is that driving check the pain that is uh i mean you know they they're about to They're about to be launching their app in the U.S.

1:31:01Everything to date has been international. That is a big catalyst, yeah. A lot going on. They're obviously duking it out with Kelsey, but it's great to see Shane on an absolute run. Matt, the whole team. Put more cash in the coffers, more opportunity to build and scale the business. It's been a fantastic data source for us. Of course, Polymarket powers the ticker that you see on the show all three hours long every day. And it's been a source of insight for us through our entire partnership. So thank you to Polymarket for sponsoring us. Rehat has a funny screenshot. It says, design is not just what it – and you can't really see it.

1:31:48This is no way this is real. It has to be fake. I think he's memeing some liquid glass nonsense and some poor design mixing up the design. But he got 6K likes, potentially with the fake news. I don't know. If this is real. There's no way. There's no way this is real, right? Anyway, we'll leave it at the viewer to figure out. It's a good joke. Anyway, in other good news, Kaz over at Shopify, now open door, is replying to random posts on Twitter saying, email me, I'm still at Shopify until tomorrow. Here's my email. And Fodd says, bro, this guy. Absolute dog. Grinding to the last minute. Love this level of dedication.

1:32:32You know, open doors all over the place. The stock's way up. It's become this meme stock that is fascinating because I was talking to Brandon about this with, he was saying there's something interesting about the Open Door story that is this retail army driving a meme stock. The valuation is basically, I mean, Keith was actually steel manning it, saying that as a revenue multiple, it's not that crazy. It's in the same territory as some other big public companies. I think he cited Robin Hood at 31x revenue or something like that. Wait, what company? So Open Door. He was saying that Open Door is not disconnected from the financials.

1:33:12if we can deliver on the growth and we can deliver on a revitalization plan. That was his pitch.

1:33:23But he wanted to fixate on the revenue multiple? I think it was the revenue multiple. You can go and look at his reply. But basically, I don't think anyone disputes the fact that Opendoor is trading very differently than it was trading last year. Last year, he was trading like a company that was in manager mode with a new CEO and had gotten kind of hit in the post-ZERP era and had not done particularly well across a couple quarters. I mean, the stock was, you know, Jim Cramer would probably say the stock's in the dumps, but the stock is no longer in the dumps. It's been on absolute terror. People have been making fortunes off of it.

1:34:02And the question is, you know, what do they have to deliver? well, they clearly have to go, you know, they have to kick it into a completely different gear. And it's just exciting to see Kaz take the CEO role and be cut from a very different cloth. Like I've interacted with Kaz. He's been, I've actually emailed him at this email and he solved a problem for me on Shopify in like two seconds. He almost, he basically saved my business. So I mean, he is, he's a remarkable operator. Yeah. Very aligned comp structure as well. Totally. He's really, It'll only make money, making a salary at like a dollar.

1:34:41Yep, exactly. And so people will debate the valuation. It's clearly trading on the back of a completely different narrative with a completely set of investors that are setting the valuation. It's now valued. It was valued very low. Now it's valued very richly. But it is interesting to see some real, legit folks in Silicon Valley step in and say, hey, we're going to do the turnaround thing. You don't often see this. Most times when a VC incubates or backs a company and it gets out into the public markets and they're able to distribute the shares and they're able to sell their position down, if that company does not do well over the long term, they are looking for the next startup to go in and take a second run at that business.

1:35:29Right. So if I, I'm, I'm not going to be able to think of a perfect example, but I mean, even just think about like, like, uh, the story of square, like square was Keith Reboy as well. Right. He was in that it's like, he wasn't saying like, okay, I sold PayPal. I need to get back into PayPal to do more FinTech stuff. He was like, no, like I'm fine to do another startup. Um, and there's, and there's a variety of, of stories where, uh, someone's, Someone's taken a company, taken it to acquisition or taken it all the way to going public. And then the VCs and some of the entrepreneurs and some of the early employees say, hey, we still really like this.

1:36:10We like this industry. I mean, maybe the best example is Ramp and Paribas. Like Eric Lyman and Kareem Attia took a run at understanding the financial credit, how how people spend money, saving people time and money on the consumer side with Paribus, sold the company, and we're like, there's more opportunity here. Let's keep going. And so I feel like that's the default playbook in Silicon Valley is that once you've bet on an industry, you've bet on a category, and you've backed the right founders, you've gotten your return, you've returned capital to our LPs, either through an IPO or an M &A process, you're not saying, let's go back into that same structure.

1:36:56You're saying, let's start again. Let's start a new company. But this is an interesting twist in that you could imagine Kaz saying, hey, I've been at Shopify for a while. I want to start a real estate technology company. And so Keith is going to write me a check. Khosla's leading the Series A. I got a couple of people that I've worked with before. No, he's coming into Open Door. He's actually turning around. So it's a little bit different. Although the GameStop story was somewhat similar because the CEO of GameStop had founded Chewy, I believe, and was a very successful entrepreneur. And it was a similar example of like someone, there was still a lot of questions about GameStop, like can they turn that company around?

1:37:36But the stock performance was obviously crazy. But it was not a purely financial person stepping into the role. It was an experienced CEO who built a real company at real scale. Yeah. Anyway, I don't know if you have more of a take on Open Door or Shopify or anything like that. But I've been... Yeah, I'm excited to see what Kaz does. It'll be interesting. How did you sleep last night? Did you get to catch up? We need the soundboard because I got a 92. How did you pull that off? I got a 92. I guess you're way closer to the airport. I got to bed really early. how's your sleep experience I'm using an 8sleep by the way 8sleep.com 5 year warranty we got only 6 hours and 27 minutes I'll leave a 5 star review for 8sleep the app I love the app it is fantastic I am potentially you're going into a big weekend I'm currently ill I have the HRV of a dead person it's terrible Well, lock in this weekend, get some sleep.

1:38:45We will be fortunately home later this evening. This was fun. iPhone Air Bend Test on Tom's Guide. Icon says, an Apple exec casually throwing their product across the room and not flinching at all when the host misses and it clanks off of the wooden table is insane. Apple is extremely confident in the dirty little video. I looked this one up. I looked this one up because I was like, again, it's like a parody account. it looks like it's fake video, but it's a real video. No, it's real. They're confident. Do you remember Bendgate? Do you remember this with the iPhone? I think it was the iPhone 6.

1:39:20No. It was the thinnest iPhone ever, and it got truly thin, like way thinner than this back then. They were thin maxing, so they were width-minning. I don't know. Is that the right way? They went super thin, and the problem was that if you applied a little bit of pressure, you could actually bend it and break it pretty easily. Like you could do this and it would be titanium. And now it's titanium. It's thicker. There's more structural support inside. But the question with the iPhone air was obviously like, Hey, you're back to being super thin. Is this thing going to bend? And they just toss it across the conference room and the, and the host tries to bend it and he's unsuccessful.

1:39:57And I think they figured it out. Anyway, they probably designed it in a Avengers themed office. Did you see this article in the wall street journals mansion section today? Of course I did. $4.4 million renovation helped one Winnipeg couple turn their 12 ,000-square-foot home into an experience and a story. The Wall Street Journal says an Avengers office and a Frank Sinatra garage, they built their own Disneyland. I love this. I love when people go crazy with the renos and make the homes their own. Some Disney fanatics get their fix by visiting theme parks. Tech entrepreneur Jeff Fetz and his husband Chris Fetz wanted to live in their own Magic Kingdom.

1:40:36The setting for their dream home, a 12 ,000 square foot traditional style home built in 2009 in the tuxedo area of Winnipeg. What is that? I've got to ask you. I'm going to scare me right now. What's the tuxedo area of Winnipeg? And so here he is standing next to what looks like a very fancy luxury car with the biggest Cartier Santos on his wrist, I believe. He is an absolutely beast of a watch. If you want a Cartier Santos, head over to GetBezil.com. your business with concierge, available now to source you any watch on the planet. Seriously, any watch. Such a good transit. They bought the brick, stucco, and limestone house for around$4 million in 2029.

1:41:16Then they spent$4.4 million in a three-year renovation to actually upgrade the house. We wanted to elevate the design to the level of fantasy. Chris, who was a full-time cast member, dancer, and parade performer at Walt Disney World Result. Wait, is this like extremely lucrative? No, no, no, no. So his husband, so there's Chris, and then there's also Jeff. And Jeff has a startup, has a business that does actually customer service and has become very successful from that. He co-founded a customer service tech startup now and called in touch cx after uh seven years they moved to winnipeg to be closer to the family um they met in 1997 so they've been together almost what 20 years um they're both students at the university of south florida and uh yeah they figured it out um they have some crazy crazy stuff going on here uh let's read about the um this shot of the the cars in this entryway the hard inside i mean this art deco stuff is wild we wanted each room to be experiential who grew up going to disneyland and would regularly go to christian shows when they were first dating the garage mahal as they as the couple have dubbed it is a garage that was renovated to as a shrine to frank sinatra it houses a peacock blue rolls-royce silver shadow sedan that's that sinatra bought as a wedding present to his wife barbara which chris won in an auction the jazzy room with lacquered wood paneling, oversized backlit frame photos of Frank and Barbara, and a curved blue sofa is where Chris hangs out, listening only to Sinatra records and drinking cocktails with friends.

1:43:08It's way sexier than a man cave. It's crazy. Jeff's downstairs office is nicknamed Avengers Headquarters, and the windowless room has the feel of a spaceship. To enter, you touch a panel, and a pocket door swooshes open like in Star Trek. There's a long metal mission control station, AKA desk. The walls are clad with stainless steel and covered with television monitors and Avengers logos. And there's room to store much of Jeff's 40 ,000 comic books. On display is a full-size Iron Man costume. It makes me feel very in touch with my childhood. They call one of the bathrooms the spa. And the story goes on.

1:43:43You can read it in the journal, but what a wild house. You love when someone makes it big and just blows it all on a crazy right now i texted jeremy said studying for their dream a 12 000 square foot traditional style home built in 2009 in the tuxedo area of winnipeg i said tuxedo area question mark he said enforced by law do not go to the tuxedo area of winnipeg without wearing a tuxedo you will be you will be uh taken into custody anyway let's move back to the timeline uh nader khalil says friendly reminder that multiplying revenue by 12 is not ARR. It says a lot that this goes viral in the year 2025.

1:44:322.2 ,000 likes. What about, Harry's asking the important questions, what about multiplying daily revenue by 365? If you've got lumpy revenue. That you processed your biggest invoice and then multiply that by the number of hours in a year. I've multiplied by 24. Then you have your hourly. Actually, take a step further to find the exact minute that you got the largest payment ever and multiply that by 60 and then by 24 and then by 365. And that is the way to think about a minute. We just had our biggest minute ever. People talk about their quarterly earnings. We just had our biggest minute ever.

1:45:16It put us on a$20 trillion rate. Here's the proof. Here's the Stripe dashboard. Here's the exact minute. Well, if you want to bet on some companies that are subject to GAAP regulations and need to actually deliver. Really? They are. In quarterly reports that are SEC regulated, head over to public.com. Investing, for those that take it seriously, multi-asset investing, industry-leading yields. They're trusted by millions, folks. Public.com. Also, Emily Sundberg, breaking news. She has commissioned Donald Boat's work. Do you want to know? This is a crossover I was not expecting. Do you want to know the very first sensation I felt while attempting to eat this?

1:46:04Spasm. My jaw cramped, an inward violent shaking. I cried out in pain. Burgers shouldn't be this tall. That was instant divine comeuppance. I was punished from above for even trying to place it in my mouth, says Donald Boat. So I'm interested to see what Donald Boat does. Obviously, he's a very creative mind, very schizo. He's mastered, like we have this schizo red string diagram behind us, but Donald Boat takes it to a completely different level with his collages, which I have enjoyed. He's done some fantastic posting. Morning Brew has a story. Yesterday, Larry Ellison's fortune grew by$100 billion.

1:46:45And today, Larry Ellison's son, his media conglomerate, is getting ready to buy Warner Brothers, normal family things. This father-son duo is on a generational run. You'd love to see it. He is running around, acquiring companies, is becoming a media mogul. Pretty fun. Crazy. I actually have not dug into what's going on with Warner Brothers, what's going on with Discovery. I know that there's like a merger and the free press is involved somehow. I'm hoping we can get Barry Weiss on the show at some point to kind of break it all down for us because I... Well, Warner Bros. is up 53 % in the past five days.

1:47:26Yeah. I do think it's interesting that at least in the dot-com boom, the primary investment bank desk that would watch tech companies would also watch telecom companies and also media companies, tech media telecom. If you went to Goldman Sachs and you wanted to analyze what we think of as pure technology companies, you would be - TMT. TMT, tech media and technology. It's because they all have the same, they all have very similar zero marginal cost business models. So if you create Mickey Mouse, or you own a telephone line, or you have a website and you're selling SaaS, those are all financially modeled somewhat similarly.

1:48:11And so it made sense to put them all into the same coverage group. Of course, now there's a dedicated desk just for semiconductors and just for social apps and just for SaaS and just for enterprise. Yeah. Anyway. Imagine being able to run around buying companies knowing that you have the full backing of your father, but you're buying a company. I mean, Warner Bros. is worth$46 billion. That's a lot more than I would have guessed. Wow. Is preparing a majority cash bid, meaning that they're going to spend at least, put up at least. Ellison's into debt. I feel like he's not afraid to lever up. He's not afraid to.

1:48:51Maybe that'll happen at some point. But yeah. Put the cash together, get the company. I don't know. It'd be cool. I feel like I've never met Larry Ellison's son, but I feel like I would trust him to make the next Superman and Batman film. And Warner Brothers owns the DC universe, I believe. And I feel like he would have good instincts. I'm also excited about the Jeff Bezos, James Bond. I feel like it's going to be good. I don't know. I know you know nothing about movies. Who's going to be Mr. Bond? I have no idea. But I think a lot of people, a lot of the true James Bond fans are worried about this idea that now that Amazon owns the rights to James Bond, they're going to franchise it like they did with Star Wars.

1:49:41So it'll be like a James Bond show and a James Bond kids show. If you see Star Wars, it used to just be like there's three great movies and there's three prequels. and then Disney was like, let's do three sequels and then two extra movies and then a spinoff show. There's probably six or seven different shows for The Mandalorian and Boba Fett and all the different spinoffs and there's kids versions. I think that's kind of fine. I think Star Wars has been kind of like, yeah, there's some mediocre stuff in there but you can just not watch it. And overall there's enough to pull off the shelf so if you want to watch something with a four-year-old you can.

1:50:16If you want to watch something with an eight-year-old you can you can get into the original the original trilogy still exists there like you can still watch it so like i don't know i've been i've been happy with that i would be happy with more james bond content let let bezos cook on on on bond in my opinion the um it's so funny people being like oh they're gonna spend 200 million on the free press meanwhile there's like such a rounding air talk about like this totality of of deals that they're looking at doing they're looking at buying a 50 billion dollar public company majority cash yeah and you want to turn around these assets and improve them and uh you need great talent and if you need yeah if you got to spend a couple hundred million to get somebody to to you know i think i i i think it makes a ton of sense if you're just thinking about it through like this mark zuckerberg mindset of like who do i want around the table right now.

1:51:12I want a bunch of great people who are entrepreneurial, who are, you know, super connected live players who really care about this stuff. Uh, yeah, you gotta go spend some money to get them, but, uh, it's going to work out. Uh, anyway, apparently there's a company called math Inc and will Brown. Do you think they actually got math Inc? I don't know. Maybe like because these aren't mathematics Inc. There's, there's, there's a certain flex to getting I mean, you can get the domain. Christian says, excited to share that I'm starting a new company dedicated to the creation of verified superintelligence via auto formalization.

1:51:52So is this a competitor to Vlad's thing? Building on the amazing RL infrastructure that we developed at Morph Labs, Mathematics Inc. has already achieved a breakthrough result. And their hiring page says, we call a date a square if all its components day, month, year are perfect squares. I was born in the last millennium and my next birthday will be the last square date in my life. So there's a very hard math problem here and you just have to, in order to apply for their jobs, you have to solve a math problem. So I don't know, you want a job and you're good. Also, I feel like this is, this is an odd question because I feel like if you copy this and you, and you ask it like of a frontier model, like it's going to I imagine that's the whole point.

1:52:40I doubt it. do you think it can we should try if well if it would pretty i mean i i have yet to see like a like a hard math problem out there that that hasn't been pretty easily one shot by um most of the um like like this type of like concise question uh is typically handled by a frontier model with reasoning. Maybe not, but we'll see. More importantly, a video game entrepreneur has just paid$31.5 million for an oceanfront Hamptons home. You got Hamptons up on the board connected to Patek. The deal marks the latest in a string of luxury transactions at the busy East End market. So Karch, this is Matthew Karch.

1:53:29It's a circa 1970s home in East Hampton. He's the co-founder of Saber Interactive, a video game developer and publisher, and I dug into them, and they do a lot of porting and platforming. So a game will be put out by one publisher, and they'll say, like, we would love to get this Xbox game on Nintendo Switch, and Matthew Karch will pick up the phone and say, my team would love to do that. We will do the hard work of making sure your game works on the Nintendo hardware or over here, and they do a lot of other stuff. But he has some great video games in the portfolio. And obviously, it's provided for a wonderful life.

1:54:09And he is now in the position where he can buy a$31 million home. He's also, I believe he sold the company and the company changed hands again. So it's unclear exactly who owns what. But it's a cool story. And now he has a wonderful, stunning house. The house literally sits on top of the ocean. The property is so amazing that I wanted to buy it and figure out the details later, he said. So he's talking to the journal. He'd love to see it. If the journal calls you about your home, you got to pick up the phone. The seller, an entity linked to Norman and Helene Stark, bought the estate for$4.7 million in 1994.

1:54:43The property first hit the market in 2017 for$75 million. Wow, that's high. It had been off the market for years. The most recent asking price was$39 million. Property contains five bedrooms, roughly 7 ,000 square feet main house, as well as a guest house, tennis court, and pool. The Hamptons real estate market, like those in many vacation destinations soared during the pandemic, but the number of Hamptons sales hit a 14-year low in 2024 amid tight inventory and rising mortgage rates. There's an interesting dynamic where renting a house in the Hamptons is a massive multiple of what it costs to pay the mortgage on a house because people really only want to be there in the summer.

1:55:20They don't necessarily want to buy or live there, so there's an odd disconnect between the rental and purchase market where you might not see that in LA. Yeah. At the same time, I don't think it necessarily masks out to buy a Hamptons house right now and just rent it in the summer. Totally. Just given where rates are. Yeah. Makes sense. In the second quarter of 2025, there were 26 home sales in the Hamptons at or over$10 million compared with 22 in the second quarter of 2024 and six in the second quarter of 2023. 2023 was really slow. Karch also owns two properties in nearby Sag Harbor that he uses for vacations.

1:55:59He's considering selling one of them. Anyway. Keep a couple of homes nearby. There's a Series A financing for a new company that just came out of stealth, Brain Company. We saw Math Company. Now there's Brain Company. Brain Company emerges. New Meta. today. We're getting somewhere. We're seeing a trend. I like it. Brain Company emerges from stealth today and we are announcing our$30 million Series A led by Elad Gil and Jared Kushner's Affinity Partners. Brain Company provides an AI platform and applications for the world's largest and most important We were getting this company? What? Did we? Yeah.

1:56:35We were connected. I believe we'll hopefully have the founder on soon. Elad Gil is also coming on the show soon so we can talk to him about this. So go check it out if you're looking to get in early, go work there potentially. Meanwhile, the profound team is using out-of-home advertising to try to find an office in Union Square, driving around an advertising truck, a box truck, trying to find their office. I think they should scale this campaign. They should get on AdQuick. Out-of-home advertising made easy and measurable. Say goodbye to the headaches of out-of-home advertising. Only AdQuick combines technology, out-of-home expertise, and data to enable efficient, seamless ad buying across the globe.

1:57:16I mean, seriously, they should put some of their testimonials or case studies on billboards and airports. That makes a ton of sense. If you're just a general business and you're interested in getting your brand mentioned on Chachapiti, just flashing the profound name in front of people, that's pretty high value. Anyway, did you see the knockoff Bugatti? I did not. This is... But this is offensive to my... This is extremely offensive to... Bugatti is Italian. Bugatti is an interesting company, right? Because it's German, but then their manufacturing plant is on the border, and it's changed hands a few times or something.

1:57:54But anyway, most people know the Bugatti Veyron, Chiron. But Dream. There's German and then French. Yeah, that's right. It changed hands. But then it was acquired by an Italian. slash home cleaning robot maker. And it's showcasing the photo of its first car, a Bugatti-like luxury battery electric vehicle. So it's a - Is this a Chinese company? So TR Taxes says a vacuum cleaner robot company founded in 2017 - Wow, they're literally a Dyson knockoff. They're a Dyson knockoff. That's now knocking off. Valued at$3 billion is making a luxury EV now. Apple gave up after 10 years of trying - This is burning$10 billion.

1:58:36This is no offensive in my culture. I know. It's crazy how much it looks like. I mean, it wasn't even. It even has like a weird diffuser on the back. Well, yeah. So they're knocking off like the Veyron, but then also the new one, which I've. Turbillon? Yeah, the Turbillon is the latest one. Although, are you talking about some of the one-offs? Because they've done. There is a one-off that looks. They've done like convertibles, but there's only, I believe there's only three major platforms. There's the Veyron. It's the Volatair. the solitaire is there so they this knockoff is using the front end of the solitaire yep i mean it's basically they're on closer to it just like a solitaire knockoff yeah really really dark never do this uh if you're if you're running dream tech um contact your lawyer and uh you'll be work with them to wind down the company please um just shut it down close up shop you guys had a good run you're out of ideas and uh just just uh close it up how do you think this sells i mean china's knocked off the tycon successfully they've knocked off a few other cars successfully um i wonder what the yeah i do think it i the the the humor here um is that they will probably make a pretty solid car and it will cost like they can start selling bugattis for a couple hundred dollars probably yes you imagine no but like you could imagine they sell this for like it's probably a couple hundred grand 150 or something which is why and then if these i could see this making it into america where somebody's like wait i can drive and make it to america this will get caught at the ports for sure you mean you mean like yeah ip trade dress like it'll be easy to lock this up it's not making it to america um but people will be driving around in china i mean i've heard about fully fully counterfeit cars before like in china they they have the ability to set up like it's a g-wagon factory and it makes cars that look like g-wagons and that are bad badged everything is trying to be as perfect as possible a true knockoff and then they work their way to other countries you take it in the dealer and they're like we can't work on this engine this is not a mercedes engine well yeah and the reason that knockoff cars are not as big as knockoff watches is like there's no regulatory framework for watches right you're not going to hurt someone else by driving wearing a fake rolex or whatever yep yep yep um uh this was big this was big uh uh two of the clueley founding team have broken off pretty crazy yes they are doing uh running the same playbook yep uh gris says life update left clueley to start our own thing already at 1.2 million arr seven days in stealth had no idea making money was this easy announcement soon instinct inc uh this post is fascinating fascinating because doesn't say what the business is 1.2 million arr what is the subscriptions of some sort it's written to and then it's written to trigger yeah it had no idea money was this easy yes you did have an idea that making because you were saying that i said that it clearly you said making money was easy i I know how easy money is, but here we are talking about it.

2:01:57Anyway, good luck to them. You baited us. No, but yeah, wishing them luck. And I wonder if they will start beefing with their former employer to get. From a WWE perspective, that is going to be unmissable content. If they are constantly chirping at each other and fighting and going on podcasts and debating each other and taking shots and running adversarial billboard ads against each other. There is a world where that generates more views than anything they've done before. That might be the final state of startup media and marketing. The real question is, does this say something about whether or not clearly has hit product market fit?

2:02:42We demoed the product. We were not very sticky. Tyler, it seemed like he enjoyed the product and thought there were some glimmers of hope. But he was not, he did not become a daily user. Audience. Well, when we talked to Roy, it was, it was, it wasn't clear who the date, who the target audience was. It was maybe the college kid who wanted to cheat on an exam or you want to cheat on an interview, but then that was probably illegal and risky. So you don't want to do that. Then there was like maybe enterprise sales. Then Roy was talking about brain computer interfaces and VR. And so like, there, there were just like a bunch of different ideas.

2:03:16clearly throwing spaghetti against the wall, unclear what was sticking. And so I am interested to see what Instinct Inc. winds up building. And I'm wondering if they have done more work to make sure that they're building on top of a solid foundation. Because the big question that was looming around clearly was just masterful marketing, lots of clearly breaking through the noise, cutting through the noise, getting downloads, but was it a leaky bucket? And so has this team, now that they're on their own, have they built a less leaky bucket with this? Because what happens if you stop going viral?

2:03:58Does that$1.2 million in ARR turn into nothing over 14 days because everyone unsubscribes? Who knows? Yeah. Anyway. I would go out and guess that they're just starting a creative agency. Which would probably make a lot of money really fast. I think so. So that would make a lot of sense. Anyway, find your happy place. Book a wonder with insider views, hotel-grade amenities, dream beds, top-tier cleaning, and 24-7 concierge service. It's a vacation home, but better, folks. We will close out with this. 25 years ago, there was an article in the newspaper, in the Daily Mail, Tuesday, December 5, 2000.

2:04:40Internet, quote, may just be a passing fad as millions give up on it. And of course, recontextualized Max, the VC, is obviously drawing a comparison to the AI narrative. I don't know if anyone's gone out and actually said AI is a passing fad. People have kind of said like, maybe we're over our skis on CapEx, or maybe we're over our skis on enterprise value. Or maybe the promises are too grand. Yeah, maybe we're not getting ASI tomorrow. Yeah, 2027. But I don't think anyone is out there really saying, yeah, in 10 years, like we're not going to be chatting with LOLs on the phone. It's so funny to try to, I mean, it's very difficult to, like this article is especially funny because internet may just be a passing fad as millions give up on it.

2:05:35It's like, well, are those millions of people benefiting from other people using the internet? If so, then like it has enduring value. Crazy researchers found that millions were turning their back on the worldwide web, frustrated by its limitations and unwilling to pay high access charges. They say that email, far from replacing other forms of communication, is adding to an overload of information. Experts from the Virtual Society Project, which published the report, say predictions that the internet would revolutionize the way society works have proved wildly inaccurate. Many teenagers are using the internet less now than previously, they conclude.

2:06:20James Chapman, I would love to know where James Chapman is now. He was a science correspondent at the Daily Mail. And it's interesting. I mean, you can't really say like he got this wrong because he's just publishing the facts, which is like these researchers found this data point and kind of leaving it up to your interpretation. but um less yeah and that's like all these articles come out like ai adoption in the enterprise is dropping yeah or or uh what was the mit report like 95 percent of gen ai pilots are i mean that that that meter report was like the most bearish take on cursor possible because it was like cursor is slowing people down that was like the the and yet the basic and yet and yet demand.

2:07:06But you dug into it and there was a lot of different ways that it could actually speed you up in certain contexts. And then all the products are just getting better. If you just look at the demand for Cursor. Yeah, incredible. The apparently Cursor in the secondary market is trading closer to 30 billion than 20. That's up there, man. That's up there. It's great though. Incredible time to be alive. incredible time to be alive well thank you for tuning in to our remote live stream today we will see you we did it they said it was impossible so we proved them wrong um and uh next week got some travel in the middle of the week but we will be back in the ultra down monday uh and tuesday very excited and uh get out there this weekend and touch grass be with your loved ones uh log off i'm excited to log off i think charlie uh would uh was known for logging off from friday night to saturday and will be doing my best to do the same uh and uh thank you so much for tuning in thanks for tuning in this week we'll see you monday goodbye love you