Sam Vs. Elon Continues, Turning Soldiers Into Superheroes, Boomless Cruise, Market Map Drama

28:41So the army had recognized that technology was transforming battlefield intelligence as satellites and drones generated vast amounts of data that traditional communication tools like radio struggled to keep up with. So, you know, you can hear somebody in your headphones over a radio, but it's so much easier if you can just be like, let me actually pull up the map and see what you're talking about. It's really hard to describe, hey, over that hill, there's a bad guy. And you're like, which hill? And you're like, the one on your left. And it's like, I can't hear that, right? Yeah, I think people don't, people like, it truly is going to be so transformative where, you know, like oftentimes like a corporate office is chaotic, right?

29:18It's like, you don't know where like, like, oh, where's like, where's your coworker? Where's this person? Oh, can you try to get this person over there? imagine a battlefield where there's hundreds or thousands of vehicles that are all coordinating individuals different platoons teams that are working together and the enemy engaging with you and you know it's just like the most chaotic environment that you can possibly imagine i yes my great grandpa fought in world war ii and was like shot down like twice and he's like told me a bunch of stories about how like once you're in there it's just like all out chaos and uh and And that largely hasn't changed.

29:55Teams have gotten better, communication's gotten better, but it's still chaotic. And so the potential for this technology is it will become impossible to actually engage in a productive way on a battlefield if you're not in this VR experience and having full visibility of the battlefield and where your teammates are and stuff like that. And it really will transform the effectiveness of the reason this technology is important and the reason that the military said, we're going to spend 20,$22 billion to try to get this thing is that it's going to, you know, the potential is obviously there. Um, but, but technically it's an extremely difficult challenge.

30:33And so the first thing that the army does is they start this prototype project called the soldier's computer. And, but the results are really underwhelming. The heads up display use the same low resolution, uh, red only screen found in the Nintendo's virtual boy, which was a complete consumer flop. I don't know if you remember this thing, but you could play like Mario Tennis and it would have like, like basically just two planes of 3D. And it was really cool. I remember playing with it as a kid and being like, wow, for like two seconds and then being like, that's miserable. I'll just stick with the Game Boy.

31:04But it, but it makes sense. So the project was moved to the US Army's Natick Soldier Center in Massachusetts. The budget increases, expectations soar and now there's more money at stake and so in 1992 the soldier's computer entered field testing early impressions were promising uh soldiers praised how thermal imaging extended their sight range and how the system enabled them to fire around corners while staying in cover so they'd actually have a camera mounted to the gun and then they could see the what the gun saw in their heads-up display so they could put the gun around the corner shoot and basically, you know, stay in cover.

31:43It's pretty cool. That's so, it's such a funny product that I imagine the soldiers in practice absolutely hated because it's so like, it's so out of a James Bond like villain movie. Like I have my gun. You're putting your gun around. There's also an old Soviet gun that actually has a curved, yeah, a curved barrel. So you can aim around corners. and it completely destroys the ballistics. Like it's a disaster. And I think if you put more than like a couple hundred rounds through it, it just completely melts down and breaks. Anyway, so there's a ton of drawbacks. The head-mounted display was bulky.

32:23Data transfers lagged by up to 75 seconds. Over a full minute, you're waiting for it to refresh. The system crashes were frequent. A U.S. Army Research Institute report featured blunt soldier feedback. They call it junk. They say it sucks. and they all mention how painful it is to wear. One particularly damning quote encapsulated the frustration. I don't know whoever put it on the soldier's back in the original configuration and had them walk around with it. It appears to me to be designed in a vacuum as in, well, we need all these things to make the system run, but we don't really consider the reality of a soldier walking on a street, hopping a wall, going through a door, coming out of a hatch.

33:03The equipment added 40 pounds to a soldier's pack. By contrast, the meta Oculus Quest 2 weighs just over a pound. And so clearly the technology has advanced. Everything shrunk down. Like even like heavy headsets now, you know, you're talking about one pound, two pounds. You throw that on a ballistics helmet, it's not going to be that big of a deal. You throw a couple pounds of battery packs in the backpack, probably doable at this point. But despite these shortcomings, senior military officials believed in the program. And there's just this chain of like, hey, we got to keep going. this is my job.

33:37I've been working on this for a decade now. This is my career. And so in 1996, the DOD rebranded the effort as Land Warrior, and they approved a billion-dollar budget. Remember, they've spent all this money, and this has never made it to the field, really. This has never been a successful project. And so the DOD appointed a colonel to serve as an intermediary between engineers and soldiers. However, the project faced a fatal flaw. To leverage cutting-edge technology, the military began incorporating consumer hardware into the system's design. This is a smart move. But unfortunately, consumer-grade equipment wasn't built for the battlefield.

34:10And so it's a perfect example of why you need Palmer in here, because he's the consumer guy. He's built the Oculus. He's built the Chromatic. But then he's also built stuff that needs to sit on the battlefield, like all of the drones and sensor towers that Anderil has produced. And so the hardware failed in rain, couldn't withstand electromagnetic interference, and the effort to ruggedize it caused costs to skyrocket. By 1999, spending had increased 50%. A private company burning this much cash with little to show for it would likely face intense investor scrutiny, but too many military leaders had tied their reputations to land warrior, making failure unthinkable.

34:50And so I can go on here. One of the project's biggest champions was Navy Admiral William Owens, who served as vice chairman to the Joint Chiefs of Staff during the Clinton administration. Owens was a staunch advocate for what he called network-centric warfare, which is actually a really cool idea. In a rare candidate interview from the mid-90s, he declared, I genuinely believe, and this sounds like it could be said today, I genuinely believe in the next five years, there will be a revolution in the way this nation fights wars. It will come primarily from the smart front end of warfighting. That is the ability to use high technology surveillance of a very large battlefield.

35:25We have never in the history of warfare seen the battlefield that way. And so Owen's vision aligned with the army's post-Cold War shift towards a smaller, better equipped fighting force. And this was the story of the Gulf War. Iraq had a huge military, but it was really just America had way better technology. And so that war was supposed to go on for a long time. It ended in just a few days. In 2005, 229 infantry soldiers were equipped with the system nearly 20 years after the project had begun. Soldiers in Iraq used the gear to digitally mark safe regrouping points, but enthusiasm remained lukewarm.

36:03More refinements were necessary. It's interesting because this type of headset is competing with literally a radio that just can call out to someone else and be like, hey, here's the rough coordinates. Let's meet there. And then you're using this clunky headset and it's like not working. And if it's not working perfectly, you're on the battlefield. you're in the most intense situation, your life is at risk, your team's life is at risk, the mission objective is at risk. If it's not perfect, you're just going to pick up the radio or call up to air support and say, hey, can you get a visual on this?

36:38What do you see? Cool. And it just quickly becomes something that... So it's crazy to think that however many, 20 plus billion dollars after 20 years nets out as as a a mid product for 229 soldiers um not the best trade but again there's an argument to say like hey they were they were right they were just basically too early and to me the interesting thing here is like i i would love to the long term I think everybody has a sense that the battlefield long term will be a bunch of autonomous and tele-operated devices, right? In the same way that the people that fly UAVs in the Middle East for the United States are sitting in Nevada, right?

37:26Outside of Las Vegas, basically remotely flying these craft. And it does seem that you'll eventually have a range of different types of robots similar to that that will be tele-operated and and so i'd be interested to hear how palmer and trey and the rest of the andrel and matt and the rest of the andrel team are thinking about what is how does this new um you know sort of uh augmented reality vr i don't know whatever what this headset how does that fit into the tele-operated future is that you have one guy on the battlefield that can use the headset to basically drop into like some type of drone or you know robot that they can then carry out other activities because ultimately at the end of the day um it doesn't you know it seems like there's there's an obvious trend of just removing human life from the battlefield entirely because the the actual loaded cost of a human not to mention the the value that the the family and that person's family and that person themselves puts on their own life, but the full cost of a soldier annually is just so every, every lost life is a tragic because you're, you're, you know, we have an individual who's not going to go home to their family, but then there's also the economic burden of every individual soldier is always going to be worth an order, you know, orders of magnitude more than a robot that could just blow up and maybe it's unrecoverable, but it's replaceable.

38:54Right. Yeah. Yeah. The 22 billion sounds like so much, but I remember we were talking about the F-35 and I think I mentioned that it cost a trillion dollars and you were like, that's impossible. And someone followed up with me and was like, no, it was a trillion dollar project. Like, like Jordy, it is an unbelievable amount of money. It wasn't over one year. It was over decades, but still the total cost of that project was in the trillions. Um, but in 2010, they actually did de-scope it and move kind of halfway, you know, VR headsets, the future radios, the past under the Obama administration.

39:25what over over over 20 over 20 billion in the hole and you're like guys i think it's time to like let's de-scope this one yeah no they literally do and so uh in 2010 land warrior rebrands as net warrior this is like the fourth name for this project and the bulky pack and headgear are replaced by a respect android phone secured to the soldier's chest and so they basically flip it down and then they can see maps and all the information but it doesn't need any of the headset that not heavy on the face, kind of leaning into like what the technology was good at at the time. And so mobile technology had evolved to fulfill much of William Owen's vision, but the army was determined to extract more from its decades-long investment.

40:07In 2019, Microsoft engineers were invited to a military base to learn what soldiers needed from an augmented reality headset. That weekend birthed the mark of IVAS. Given the years of research behind the project and Microsoft's extensive experience with augmented reality, one might have expected a smooth rollout. Instead, IVAS encountered problems from the outset. Soldiers were blunt in their critiques. You've got to ask yourself the question, in warfare, where does this tech just become too much and not really worth having? It doesn't do any more to help the troops. It may actually hinder them because of the hassle factor.

40:41Another soldier warned, my worry is that if we give these to soldiers, they're going to rely on them too much. They need to know how to fight without them. They really do. Others were frustrated by the logistical burden. Perfect. All I heard was we have like five new pieces of sensitive items we have to worry about. Common sentiment was that the system was unwieldy. It doesn't look promising. I mean, this thing is just too, way too big. It looks uncomfortable. It's heavy. If you're sprinting, jumping, running, doing infantry stuff, you're going to be sweating. Despite these concerns, Microsoft and the army remain committed to making IVAS work.

41:15The project holds potential to improve soldier situational awareness. Moreover, the U.S. faces pressure to stay ahead of technological advancements from Russia and China, both of which are also pursuing augmented reality programs. The military is determined not to fall behind. Their current goal is to deploy working HoloLens-based headsets into the field. This was written in 2022. They wanted to deploy it by the end of 2023. It's always just a few years away. Hopefully that changes going forward because Anduril's on the job and they've been able to ship stuff like a tech company, which is great.

41:52And so we wish the entire Anduril team massive luck in this endeavor. Go get them, build some cool stuff, get it out in the field, help our soldiers. And I'm proud to be an American. Same, well said. Let's do it. We got a massive new story from Blake Scholl over at Boom Supersonic. boom supersonic no longer has booms they cracked it today we are introducing boomless crews supersonic flights up to 50 faster with no audible sonic boom we quietly har har demoed this on xb1's first supersonic flight three times actually uh how does it work it's actually a well-known physics uh called the mock cutoff when an aircraft breaks the sound barrier at a sufficiently high altitude the boom refracts in the atmosphere and curls upward without reaching the ground it makes a U-turn before anyone can hear it.

42:44Mock cutoff physics is a theoretical capability on some military supersonic aircraft. Now, XB-1 has proven it with airliner-ready technology. Just as a light ray bends as it goes through a glass of water, sound rays bend as they go through media with varying speeds of sound. This means the supersonic booms can make a U-turn in the atmosphere without ever touching the ground. Boomless cruise requires engines powerful enough to break the sound barrier at an altitude high enough that the boom has enough altitude to U-turn and real-time weather and powerful algorithms to predict the boom's propagations precisely.

43:20Now, I heard an interesting take on this that even though they cracked the science, and I think NASA and some government organizations were working on sonic boom reduction and the military's had some technology here. It's obviously, it's a huge thing to get this into a commercial craft. So congratulations to the boom team. But even though the technology might be here now, the law has not caught up. And I think it is in many places illegal to fly at supersonic speeds, even if you're not producing an audible supersonic boom on the ground, because we have a speed limit, not a sound limit. So obviously this needs some legal work to get in.

44:06And hopefully this will be a bipartisan issue. Hopefully this will be a thing that everyone supports. Don't give MKBHD a boom supersonic because he will just be ripping around school zones being like, if nobody can hear me, I can't get in trouble. uh but no i think i i i do ask myself did they know did they think that they were going to be able to achieve this when they named the company and they just thought hey this is still if we can pull this off it'll be ironic that the boom the supersonic plane company actually doesn't produce a supersonic boom it's just the boom jet so i think it works either way whether or not they were planning on it but um i just i just this is such a great story to me i'm you know it's still unfolding but to we've talked about this before but to go from this like horrible recap down round everybody kind of rallying to say hey this is an important american company we want to save it nobody else is is um you know we need teams working on this problem to now seeing a very real reality where a decade from now we could be getting on a boom jet and flying to, you know, across the country and, you know, I don't know how long they're actually predicting that it'll take, but a fraction of the time, uh, is just really exciting.

45:30So I look forward to doing a live, uh, a live show in the jet traveling at supersonic speeds. It's going to be. Congratulations to Blake and the boom team. It's incredible how long you've been at this and the results you're finally getting. Patience is a virtue and it paid off here. So congrats. Yeah. Well, let's move on to our next segment. Andreessen Horowitz has just released a new market map on text to web app. Market map time. Text to web app and website generation market map from Justine Moore at Venture Twins. New A16Z thesis, building websites, apps with AI. There's been explosion of products that help users vibe code a web app from text prompts.

46:13We dove deep on these tools, who's using them, how they work, and where they might be headed. Now, this got a little spicy. I quote tweeted this with a video of a Rainbow Six Seed streamer saying, incredible map knowledge, incredible map knowledge, holy map knowledge, just because I think it's like the funniest video ever. And I've been waiting for a market map to drop to post this clip. And I think she thought I was talking trash because she replied with a video saying, from girls, I believe saying something to the effect of like, Oh, you're, you're, you're coming after me just for trying, but I'm not.

46:47And I'm on record saying that there is massive alpha for the first VC firm to go back to simply talking about doing deals and making money. And so, uh, just talking trash. That was, that was a banger. Let's, let's, uh, let's get this over one K. Yeah, yeah, yeah. Go like this. We're 40 likes away. And so I am fully pro-market map. I love market maps. And I think that I understand why she thought I was talking trash because market maps have been derided as a little like, if there's a market map, you're too late. And I think that's true for people that are thinking about what company should I start, or maybe even what company should I seed invest in.

47:31But if I'm a customer, like I don't know about these products. This is genuinely helpful to me as a customer. Like we need to build websites for our company, for our podcast. We need to do all things. I want these. And as a growth stage investor, someone who later stage, even in the public markets being aware of this stuff, all of the work that went into this market map is actually valuable. And I think it's a little bit of an odd, it's a little bit of an odd take because everyone's been talking trash about market maps for so long, But I am pro market map. I am pro this this core venture content that stays away from deranged politics.

48:05I love market maps. I just it's a way for investors to basically, you know, open source their deal flow and insights. And I think it's it's people. Yeah, people joke about it, but it's genuinely interesting to cover. And I actually think we should do more segments on the show where we break down a specific market. Obviously, we're doing that now, courtesy of Justine. It's kind of funny. They left off Webflow on the website generation section, which feels like a big player. That was one of the first things that stood out to me. Felt like Webflow is very hot only a few years ago. But one thing that's kind of this interesting dynamic, it seems like website generation or website builders like Webflow, Framer, Squarespace, Wix, They seem to be good businesses overall because people set them up and generally forget about them.

49:02And they find ways to stack fees. So it starts at$20 a month. And next thing you know, you're paying$150 for you don't even know why. So they seem to be good businesses. But it seems like there's because they're these sort of single player one to many products, there's no moat in these businesses at all. Right. So they're able to get to a meaningful scale, but there's no reason. Like Framer came out and I was like, okay, this is just a better version of Webflow. It's like the billing is more clear. I like the user interface more. It's less clunky. And developers in my network quickly got comfortable with building on Framer when before everybody it seemed like was building on Webflow.

49:43So this is, and so the last thing that, uh, the last thing that these companies that are more of these legacy website generation and hosting companies needed was more competition because they were already facing like tons of competition from each other. And so now you have this new category that really, I think like the generative AI experience applied to websites makes a lot of sense, right? Because if I'm working with a designer, I'm like, Hey, here's two sites I like. This is my brand. This is what I want it to look like. These are the features. And then basically it's the same thing as like, I could just type that into a text box, add the, add the relevant links and then hit generate.

50:23And that's very similar to me just talking to a designer, explaining what I want and then coming back to it. And then even when you get a version one of the site, you can be like, change this, change that. And again, you can just still deliver that via the sort of LLM chat style interface. So I still wonder if it's one of those things like, you know, you sort of use this for like a quick V1 of a site and then you just still transition to working with a developer. But you can imagine the developers might just end up as these tools get better, just using the same tools in the same way that you use Framer Webflow.

50:55Yeah. So I think text is the universal interface. Even if these website builders make it easy to change the background color, that can often be hidden in some UI six levels deep in menus. And just saying it into an LLM is often more universal and more accessible. So that's obvious. Now, the question of why Webflow is left off, it's possible that they haven't launched a text to web product yet they might just be behind on that oh god i think this market map is specifically for it is a chat interface or a text interface that then builds a website or a web app but there are a lot of cool companies on here and uh it's interesting because during the super bowl there was an ad for a website generator and it had uh uh barry keoghan somebody some famous actor was like laptops i don't remember that's the thing it was either square space or wix but he's going around this Irish town and he's throwing laptops to let people know that they could design a beautiful website if you're like the local pub.

51:57And it was very cute. And he's riding this donkey and he's this famous guy. I think he dated Sabrina Carpenter. And yeah, it was Squarespace. Okay. It was Squarespace, but it could have been Wix because I don't think of them as like super differentiated products. And there's a big question about will the legacy generators be able to retool their brand fast enough to let the market know, hey, we have the best text to text to web development tools. Like we've, we've rolled these out. We're not behind versus a new company that comes in with that as their main, their main, like go to market hook and their main marketing messages.

52:32Hey, it's just text. Uh, that's a big differentiator. And it's always hard for the, for the legacy companies to kind of say, Hey, Hey, we, we also have the AI tools. Don't worry. Yeah. So, so go to add, he's a good example of this popular place to buy a domain, they absolutely jam their AI website generation tools in your face. It's actually really annoying to use it as just a pure play domain hosting registrar because they're so oriented around, okay, you've spent$12 on this domain. Now we're going to upsell you on this AI generated website. I think that I can easily see some of these registrars just buying these text-to-website generators if they actually start to really execute on the product side, because it has been sort of a funny experience where historically you register your domain and then you then go to some other site and you got to connect the two.

53:24And Squarespace was pretty aggressive. They acquired Google domains, if you remember that. And that transition, I think, is still happening. And so all these platforms know that the two things should be integrated. But it's a weird challenge too, because you don't know, am I developing that, you know, over time companies tend to want to just fully own their web, you know, experience and front end and they end up hosting on, you know, AWS or sort of other, other platforms outside the registrar. So you're kind of in this weird space to work building for prosumers and SMBs individuals. And then, you know, who knows where it goes from there, but.

54:06Well, let's read through some more of this thread and Justine's analysis. To start, why is there so much buzz? Thousands of users from consumers to experienced developers are sharing what they've made with these tools. The growth is impressive. Bolt is at 20 million ARR. Lovable is at 10 million in two months of monetization. Now, how do these products work? Most LLMs generate code based on the prompt and then run it through middleware logic for things like tracking files and API calls. The agents then push the code to a browser execution environment that streams the display to the user. But do they really work?

54:42Obviously, LLMs hallucinate a lot. There's a lot of risk. Justine says yes and no. They excel at simple builds. And if you can't code, otherwise they feel like magic. But there's a limit to what they can reliably generate. Integrations are difficult. Bugs persist and code can get too big quickly. Now, how do users pick a product. Justine says that A16Z interviewed dozens of customers and scoured thousands of posts and they created a flowchart. So where do you want to start? Code or text? Well, there's code generation and editing tools versus do you want to make a website or web app? If you want to make a web app, do you want fine-grained control over the design?

55:20Yes, if you're a designer, do you need to be able to export the design as code? Then you're going to need UI generation tools with code migration. So all of this depends on the level of sophistication and really what the developer is end goal. Is this just some fun side project that they're trying to build in an hour? Or is this the start of a real business that will eventually have software developers coding with Cursor and then eventually they'll get Devin involved and be pushing things through a traditional GitHub repo? Or is this just something where I want this website live today and I don't even want to get off my phone?

55:53So she goes and gives shout outs to a ton of different companies. And that's what's so great about these market maps is that they do a great job of showing a bunch of different companies and highlighting everyone together. It really brings the particular community together. And so there are a number of segments here. Obviously, consumers. You think about the long tail of personalized apps that cater to unique interests and needs. There's a guy here who built a bedtime story creator, probably for his son or daughter. there's a second user segment which is developers that people can code but they use text to web app tools to get a leg up on prototyping and shipping new things and then the last segment is consultants and agencies these people aren't typically engineers but they're hired to make websites for solopreneurs and smbs they previously used tools like squarespace and wix but now they are using these they're still tools they're still alpha and going to your local plumber and offering to build them a website for a thousand dollars and generating it in two in two seconds with with one of these uh apps there's you've probably got like 10 more years before people fully figure it out yeah it also just really speaks to the the importance of distribution like the instantiation of these ideas is getting easier and easier you can have an idea spin up a website have it live in a day even if you're non-technical but then yeah where are you going to share it are you to run ads against it?

57:23Is the monetization funnel good? Or is it just going to live out there? Maybe share it with some friends. Like I'd probably use that bedtime story creator, but I'm hearing of it for the first time now. Um, there used to be a web. Did you ever use stumble upon back in the day? Do you remember this? Yeah. Yeah. That was a Uber founders. Yeah. Yeah. Uh, Garrett, uh, Garrett built it a really, really cool tool. You would just click it and it would take you to a random website on the internet that was submitted and you would just find crazy websites and they open web, completely not a thing anymore.

57:51I actually built a version of, of stumble upon that would scrape my Twitter feed and export all the links there. And then I could stumble upon the tweets, the links in the tweets of my feed. And I could just look through all those. And it was really fun. It was really cool. Now it's impossible because no one shares links and links don't even work and stuff. So it would just be a, it would just be a feed of only fans, spam bots that are saying. Yeah, probably. Please look at the link in my... Awful, awful. Terrible. But yeah, great market map. Thanks for posting it, Justine. And hopefully there's no hard feelings about the Rainbow Six meme.

58:30I thought it was funny. Anyway, let's move on to our next top story. We got a way to invest in alien technology. I have been saying this for a long time. People say, oh, the aliens are here. The aliens are there. We got some evidence. And I've always said, look, call me when we're ready to commercialize the technology. It's not moving the market. I don't care. I don't care if there's a massive UFO parked outside in downtown LA. If I can't make money off of it, I'm not paying attention. But fortunately, now you can pay attention to it because Tuttle Capital has filed for an alien tech ETF, the new fund to invest in reverse engineered alien technology based on government disclosures about UFOs.

59:09Tuttle Capital has filed to invest in reversed engineered alien technology. This is exactly what I was asking for. This is not financial advice, by the way. But I'm sure this will be available on public.com when it goes live. With the Tuttle Capital UFO Disclosure AI-Powered Exchange Traded Fund, which is one of eight new products the manager has registered with the SEC. With the ticker UFOD, great ticker, and the actively managed UFO ETF will invest at least 80 % of its net assets in a basket of companies that Tuttle Capital believes to have potential exposure to advanced or reverse engineered alien technology.

59:46John, you're missing a big point here, which is that it's AI powered ETF. So not only will it be, you know, an ETF with a basket of assets that may have exposure to reverse engineered or alien technology, it will be managed by AI, which to me is like, as a guy who loves AI, I mean, you're making the perfect ETF for me here, right? You can't get any better, right? We need to have Jesse Michaels on to discuss this, to get the take. We got to have Paki on. I know Paki's been watching a lot of Jesse. I mean, this probably isn't, the SEC probably wouldn't allow you to advertise securities in this way.

1:00:28But, you know, the obvious play for Tuttle and their UFOD ETF is to just like create the New Jersey drone effect, but all over the country. So just like put drones everywhere, you know, that are doing light shows that say, you know, fly a swarm of drones over a small town that's been untouched by technology. do, you know, you know, make everybody think they're being invaded by aliens and then do a drone light show immediately after it says like, buy UFOD today. And I don't know if you can do that, but I know that you can advertise ETFs. I see ads for ETFs on Bloomberg and CNBC all the time. Yeah, it was really popular during the Bitcoin ETF launch.

1:01:12But also you just see iShares, QQQ ETFs, all sorts of tech ETFs that are out there, you know, downside risk mitigated ones, dat ones uh people advertise etfs all the time so okay so hopefully we'll be able to see some etfs so here's here's some alpha so uh adquick can help you execute uh drone swarm ads like light the light show ads and so what tuttle should do the second they launch this log on to adquick get uh get ready to uh you know do a drone swarm ad for their etf over the manhattan skyline but the key is make everybody think early on that it's an actual alien invasion. So people pull out their phones because we've talked about out of home strategy before.

1:01:58You want them to think that they're being invaded by aliens and boom, it's an ad for UFOD. Buy it on public.com. I love it. That's a great partnership there. So the companies in the ETF to start will include aerospace groups and defense contractors that may have research and development programs rumored to work with classified technology potentially leading to groundbreaking advancements. Matthew Tuttle, the chief executive of Tuttle Capital, said he has been interested in UFOs for years. While they are by definition an unknown quantity, Tuttle said he believed investing in UFOs and the technology they may use could take off once his product hits the market.

1:02:37I'm a trader. I look at UFOs and I say, if they're using a power source that is light years beyond anything we have, if our government has this technology and it's released, that will be a game changer. Each ETF will be traded on the CBOE BZX exchange. The forthcoming products do not have set launch dates or listed fees. The ETF will short companies that are threatened or could be made obsolete because of any alien level technology that is discovered. So you got to harden your business to alien technology. Yeah. If you're out there and you're saying, Hey, Hey, our business is going to be great.

1:03:16As long as aliens don't show up, well, get ready for a short position to get built in your company. Yeah. Uh, this is, this is a time every company that's privately held is, you know, feeling very grateful because you know, you might be wanting to IPO in a couple of years, but that gives you some time to build up the narrative around that you're using alien technology. Like I want to see Stripe. I want to see Stripe talking about their alien payment rails that they're using. I want to see ramp talking about their, their alien payment rails. You know, I want to see this. I've said this for a long time about Salesforce.

1:03:47Like if you think about, you know, if you're an alien, if you're an alien species and you're managing essentially a fleet of sales reps across the entire galaxy, you're going to have some really advanced CRM running that program. And all of a sudden, if one of these, if one of these alien SDRs crash lands, and we get a hold of this alien CRM, no one's going to be buying Salesforce anymore. And so that's a major risk to that stock. And so obviously not financial advice, but I'd watch out if you're a Salesforce shareholder and the alien ETF is taking a short position. Anything could happen. Well said, well said.

1:04:27And so UFOD's launch is not a sure thing. However, according to Tuttle, without sufficient information sourced from government disclosures on UFOs, the product might not go to market. but he's optimistic that there will be disclosures. The risky and opaque nature of alien investment is not lost on Tuttle and his firm. Can't believe that was printed in the Financial Times. Government confirmation or denial of advanced alien tech is uncertain and rumored breakthroughs might never materialize. This entire theme is highly speculative and subject to rumor cycles. The other seven, so they're launching seven others.

1:05:03The agentic AI ETF, AI in healthcare, AI power generation, drone industry, AI ETF, quantum computing, AI ETF, UFO technology may be out of reach for the average investor, but AI is one known advancement that Tuttle believes is reshaping the financial landscape. What AI can do is a game changer. And I don't think people have fully wrapped their heads around that, said Tuttle, who added that he used AI for 90 % of his investment process. And so we'll be following. I mean, I love, I love, uh, total capital is just absolutely hurling ETFs at the market. I mean, it is, uh, it is impressive. Uh, he has, you know, more, more ETFs than some people have, uh, positions.

1:05:51So, uh, an absolute dog. so stay tuned for more on ufod we'll be covering it here on the show uh let's move on to the gpu whisperer who's making software for data centers this is aaron ginn the co-founder and ceo of hydra host wait i hate to interrupt but we got a comment from calder in the chat he says sec securing extraterrestrial currency he said it was right in front of us this whole time so So yeah, it was programmed. Well said. It's dialed. Great. All right, well, let's move on to this article in the information, the GPU Whisperer, covering Aaron Ginn. Is going bare metal in data centers the future of cloud computing?

1:06:36If so, it could signal a shift away from big cloud firms toward a new group of AI computing startups. Bare metal isn't a subset of rock music, but an industry term for renting servers to cloud customers on terms that give them access to the hardware, allowing customers to control servers directly and run their own operating software. Customers going this route miss out on some bells and whistles offered by big cloud firms like Amazon Web Services and Microsoft Azure, but they might gain better performance for more demanding and complex tasks like training and running AI workloads. We certainly saw this with DeepSeek.

1:07:11They were not on AWS. They had none of the niceties of the Azure cloud. They were as bare metal as you get, optimizing small tweaks in memory bandwidth restrictions on their cluster of kind of random hodgepodge nvidia nerfed gpus um some of the industry such as aaron ginn ceo of software firm hydra host think this is the future ginn is known to some as the gpu whisperer this is a great moniker if you're trying to get through breakthrough yeah so the other side we've talked about we've talked about coinages there's a lot of alpha and coining coogan's law you know you already know the hayes paradox uh there's coin new coins uh right now there's more crypto coins emerging every day than there are coinages but we're hoping to flip those uh soon but you know the other side of this is monikers you want to be developing monikers all the time shipping new monikers testing you know testing the market with monikers and you know have your friends test them on you you know we we have been pushing this david center of the godfather of podcasting you know yep we we we throw these out all the time we need to come up with more because uh they really they really help tell the story of an individual and help them break through in the media and so uh he has an intricate knowledge of and connections to the firms that design make and install data center servers i won't explain the history of cloud computing but one thing to remember is that the big cloud firms, AWS, Google Cloud, and Microsoft Azure were originally designed to allow companies to rent virtual machines for traditional computing workloads like running applications or databases.

1:08:49Many believe the new wave of AI computing startups might be better positioned to provide customers with access to GPUs for AI workloads, which are fundamentally different from hosting a website, for instance. Ginn is in that camp. The GPU whisperer speaks. He wants to give operators of data centers, firms that typically own and operate facilities, cloud providers use the ability to rent GPU servers directly to customers. Data center operators have long operated like apartment landlords, allowing companies like AWS to rent space in their data centers. Ginn thinks the rise of AI computing puts data centers in a position to be a hotel and generate more revenue from their real estate.

1:09:29They can actually do five-day rentals, week-long rentals, long-term rentals, but they have no software to do it. Tooling in the data center space has been highly open to source because the main big money cow was the cloud. You either sold space to the cloud or you tried to get free software to kind of sell to an end customer. That's where Hydra Host comes in. Hydra sells automation software to data center operators so they can rent out GPUs to businesses or even cloud startups who want to rent out servers themselves. So they're going a layer deeper into the data center stack. We've been talking about data centers for a long time.

1:10:08Obviously a big narrative in the AI race right now. Got anything? I mean, my head immediately goes to why haven't we personally put money into Hydra? Because it seems like everybody you become friends with 10 years later, their companies go public. So you You got to learn from the mistakes of like 2012 John Coogan. You do. We got to give Aaron a call. Yeah, let's get him on the show. Well, big congrats to him. He already manages 15 ,000 GPUs with its software embedded in 30 data centers across 14 companies. He hopes to manage a million GPUs in the next two years. And massive breaking news. This has not been covered on TBPN yet.

1:10:52Therefore, it is breaking news. uh hydro host last month raised an eight million dollars in a round led by scott mcneely's flume ventures boom size gone baby bringing its total amount raised to 22 million dollars the latest round was a simple agreement for future equity safe at a 500 million dollar cap let's go that's the most boomer way to write out the latest round like if you write out that you clearly don't know it's the meme of like this so the germany from inglorious bastards right like oh it's simple agreement for future equity what's going on information guys yeah yeah i don't think jessica i don't think jessica oh who wrote this got you gotta go to yc demo day anisa guard dizzy yeah get your game up yeah uh but massive congrats to them 500 million dollar cap banger company, half unicorn.

1:11:51So Crusoe Cloud, CEO Chase Lockmiller, who we've covered on the show before, and a guy who just left Lambda Labs. They came in as angel investors. Trey Stevens from Founders Fund previously led Hydra's$8 million seed round, which included Palantir founder Joe Lonsdale. So all the boys are in this one. It's a great company. We're excited to highlight it on the show and congrats to Aaron the GPU whisperer let's leave it at that let's leave it at that and let's stay with uh with Trey Stevens and the defense boys because uh John Sindriou over at the Wall Street Journal has got an op-ed pouring some cold water on the defense tech boom let's see what he's got to say he says tech firms want to upend the Pentagon the old defense guard has some has some lessons for them upstart defense upstart defense contractors such as palantir upstart it's 20 year old company it's worth a quarter trillion it's a quarter trillion it's two decades old give them a little credit it's not 80 years old they couldn't possibly know what they're doing like you can only know what you're doing if everyone who started the company is dead i i was looking at one of palmer's uh rivals like the general dynamics founder or something and there's a picture of him uh using a cane literally on a civil war era submarine because the guy developed like the first submarine for general general dynamics which eventually spun out general atomics which is now going head to head with andrel in the uh in the cca fight and collaborative combat aircraft and so i was like trying to benchmark the founders and i traced it back and i was like i was like the founder of the of the company palmer is fighting with or duking it out for this contract died a hundred years before palmer was born something like that it was like insane i was like his birthday he's more than he's like 150 years older than palmer and like this is the this is the difference in culture like we're gonna see we're gonna put it to the test can the young bucks make it happen well let's find out yeah I have so little trust in mainstream media, especially, especially op-eds, which op-eds are just an opportunity to just like basically FUD whatever's going on.

1:14:11Like, it seems like every time you hear about an op-ed, it's, it's, uh, or pump or pump. I mean, that was an op-ed by Mark Andreessen. Sure. Teal's got some great banger op-eds out there floating. No, but I'm just saying when you hear about an op-ed from somebody in our world, it's usually to predict something about the future. When you hear about an op-ed that's not from our team, it's usually to FUD something that our team is doing. Our boys, they're coming for our boys. And everybody's deeply conflicted. If you're not deeply conflicted by the age of 30, you're not heavily invested enough. Exactly.

1:14:53uh so everybody's conflicted everybody's pumping their bags uh this guy writing the op-ed probably has has he's just mad because he's holding northrop grumman's lockheed mark yeah look at his side with the chart this chart pull up the chart yeah uh this is uh this is northrop grumman general dynamics and lockheed martin uh flat for the last year and palantir is like mooning up 300 percent So a lot of hot takes flying, given the spiciness in the market. Let's read through some of this. Maybe we've got to put it in the truth zone. We'll decide. Maybe there's some good points. Maybe John's on to something.

1:15:35Let's give him a shot. In defense business, Silicon Valley's motto of move fast and break things doesn't always ensure victory. There is a divergence across military contractors. The stock of Palantir, which is riding the artificial intelligence boom, is up 34 % from a week ago after the software and data analytics giant reported 75 % growth in earnings per share for 2024. At the same time, shares in Lockheed, Northrop, and General Dynamics have fallen over the past six months. What's going on, guys? Put together, their market value is now less than Palantir's. This is in part because Elon Musk's Doge has led investors to believe military procurement will be reshaped to cut waste, let in new entrants and give priority to software, drones and robotics.

1:16:18Palantir, as well as Musk's SpaceX, OpenAI and robotics and AI specialist Anderle Industries are cheering for change at the expense of legacy players. Quote, oh, from the absolute boy, Shamsankar, Palantir CTO. So he says, we sense a huge amount of fear among the traditional systems integrators and providers here. Some legacy software projects, he added, are sacred cows of the deep state. Shob, not pulling punches. I love it. Let's go. Wow. A lightning rod for criticism of the Pentagon, including Musk himself, has been using its use of cost plus agreements, which reimburse contractors for expenses incurred and add a fee for profit margin on top.

1:17:03Cost plus contracts were infamously used in Lockheed's F-35 Lightning II, not just for developing the fighter, as is almost always the case since R &D is uncertain, but also to buy several initial batches of it. Only later purchase of the aircraft, which has become the most expensive military program in history, have started placing the burden of cost overruns on the company rather than the public purse. This is why the Air Force is now buying the first limited production units of the B-21 bomber in developed with Northrop under fixed price contracts. The U.S. Space Force, created by President Trump in 2019, strongly favors them, too, as do the Silicon Valley challengers.

1:17:42Indeed, analysts believe that the shift away from cost plus will accelerate under Defense Secretary Pete Hegseth, who has pledged to make procurement nimbler. But the industry has been down this road many times before. In the 50s, officials made heavy use of cost-plus contracts to foster innovation. In response to huge expense overruns, Robert McNamara introduced total package procurement in the 60s, which involved fixed-price deals. After many firms bid too aggressively for projects and ended up bankrupt or close to it, Lockheed had to ask Washington for a bailout. The framework was abandoned, yet fixed-price contracting regained popularity in the 80s, and the private sector once again burned its fingers.

1:18:23The pendulum has kept swinging back and forth since. So saying, hey, you guys have it good right now. Your stock's riding high, but you're doing these fixed price contracts. You get one wrong, you might wind up bankrupt. But we know the people that run these companies, and they're really sharp, and I don't think they're going to make mistakes, but we'll see. Yeah, it's interesting because every business runs at risk, right? Right. And it creates a positive. It means that capital generally does not get incinerated to the degree that it does within defense. Right. That said, defense has two, you know, two factors out of many that drive this sort of overspending.

1:19:05One is projects become too important to national security to fail. And so sometimes startups, they have an ambitious product that, you know, project or idea, they try to build it and they're unsuccessful. and there's no nobody to bail them out, right? The investors say like, we don't want to put more money into this. Like it just didn't work. So it fails. The issue with technology that relates to national security is if our peer adversaries are developing the same technology and we want to maintain or exceed their capabilities, we just can't allow for specific technology to fail. And so there is some situations where things should be like they're too important to fail.

1:19:44That said, the other factor is that you have internal cheerleaders for technology in the DOD or various parts of the military that bet their career on a specific project or technology. And then suddenly they're the ones fixated on that thing working out because they've told everybody in their professional life, like, no, this is important and we need this and we just should keep spending and spending and spending. But what happens is one of the, I'm an advisor, I mentioned this company on the podcast before to a company called Aon, and they're like developing ground-based tactical missile systems.

1:20:21And already they're producing missile systems that cost 80 % less than what the primes are able to make that for, right? And so it's this sort of cost plus model. Once you have an established program and the technology is working and it's deployed, it's almost like the cost plus model works for like super high risk R &D to incentivize. But then at a certain point, once it's established, you don't want it to be cost plus because then the manufacturer says, well, we're just going to run up the price on this so that we can generate more margin for our shareholders. Yep. So I think that the cost plus thing really comes down to the iteration cycle here.

1:21:00And so when you think about all the R &D, even the best startup, the best people, the best technology, the hottest company, you're not going to be able to build a new aircraft carrier in a year. It's just not going to happen. And so when you look at something like the F35, it's just a massive project. And although there were major cost overruns, it took way too long. It's something that was going to take decades no matter who was at the helm, at least a few years. Like it was going to take a while. Whereas when you look at what Apple does, Apple's releasing a new iPhone every single year for better or worse.

1:21:35If the cost comes down, they can cut their cost that year. People buy new phones. Same thing if the cost goes up. They can raise the price a little bit. And so for these things that are tritable systems, you have more ability to iterate on the price as well because you're not locked into that same contract and you can actually, you don't need to do the cost plus thing as much. Now, this would be very bad if you think about Anduril going bigger and going into the aircraft carrier space or going after the next F-35 project. They really could wind up saying, hey, we're doing a fixed price contract and they could get bitten.

1:22:09but anduril's only playing and i think they will continue to play because of the way warfare is evolving in these attributable systems and so what's the future of warfare it's not an even bigger aircraft carrier it's a drone swarm how will drones be purchased a hundred thousand drones every single year and there'll be a new drone that comes out every year you're already seeing this with the ghost platform at anduril their helicopter drone they're on like ghost four or five i can't even keep i can't even keep track and when you think about the headset the ivass system Microsoft was going to produce 100 ,000 of those.

1:22:41Obviously, that was not going to be 100 ,000 all in one go. It was going to be 10 ,000 and then 20 ,000 a quarter. And if Andrel really nails the IVAS program, they're going to be iterating on that. There's going to be new headsets, new features coming out every single year. We see how fast the technology is advancing in the consumer space. There's no reason why the military would not want to integrate even better screens and better batteries and better CPUs and all this stuff. So it will look a lot more like an Apple product release, which gives them more flexibility to stay on that fixed price contract and not lock in a price that they have to deal with and they don't have to predict it out 10 years.

1:23:20They're saying, hey, we got a V2 here. This is what it cost us. This is what we think we should sell it for. This is what we can deliver it for. We're working against that and there's much less capital at risk. So I'm optimistic. Let's close out with the end of this article a little bit. It says, as much as upfront setting of prices is the standard in the private sector, defense procurement is different. Yes, today's highly consolidated defense industry gives contractors more leverage, but it also exposes a single customer with unrealistic and ever-changing goals. Big generational programs are scarce and firms must bid aggressively or risk losing a core business segment.

1:23:57This was the case with the B21, the Raider, which has now caused large write downs for Northrop. In its fourth quarter earnings report, Lockheed reported a 72 % drop in operating profit alongside a$1.7 billion charge on fixed price contracts, mostly related to missiles. In its own quarterly release, Boeing took a$1.7 billion hit related to fixed price contracts on its T7A jet. And so lots of companies are in trouble for these big, big, massive programs that they take on. I think the new direction is avoid those big projects, both from a financial perspective, but also from a nature of warfare perspective.

1:24:40The future systems and that's hard. That results in more flexibility on the financial side as well. I don't think I don't think it's anybody should feel bad for the Boeings and the and the Raytheons and the Lockheed Martins for taking a big risk for a huge payoff. right like they're they're making a calculated risk in the sense that hey would we risk you know uh 10 billion dollars to make 100 billion dollars yes right you know that's like a good bet to take and so when it doesn't work out they're going to complain and say that you know they should have been bailed out or or they should have been uh but but again there's a difference between the taxpayers and the shareholders they're not there's there's a Venn diagram, but they're, they're very different groups.

1:25:30And so it's not, uh, it shouldn't always be the responsibility of the, of the taxpayer. If a, uh, defense contractor blows way over budget or fails to execute, right? Like there needs to be consequences. Otherwise you get situations like the, the Microsoft program where they get$20 billion to deliver nothing. Right. Yeah. Uh, just doesn't make any sense. Yeah, completely agree. Well, overall, I think this was a pretty good article. It raises some interesting questions. It closes with a quote from Byron Callen at Capital Alpha Partners. He says, ultimately, I don't see how the smaller guys are immune to the same problems that have caught the traditional players.

1:26:11Obviously, I gave a counter argument to that already. None of this denies the market thesis that prime military contractors have gotten complacent and that the likes of Palantir and Anderl can reap large rewards from expanding their defense footholds, especially since their investors are laser focused on growth. In the case of software, which has shorter development cycles and a blurrier line between development and production, the recent pivot towards fixed cost contracts and tapping upstart bidders has a greater chance of being successful. Great strategists, however, must learn from the mistakes of the past.

1:26:44And I think that speaks to, you know, the real risk is one of the new defense companies. taking on too large of a project, basically betting the entire farm on something that might not even be that relevant if a smaller, more attributable system can make it irrelevant to begin with. Yeah. Take the risk, bet the farm. If you have the conviction in, in completely independent of a potential bailout, right? It seems like, yeah, these contractors were willing to take big risks if they felt like there was a good chance that they would also get a bailout if they weren't successful. But we want them to, you know, be comfortable with taking risks independently, because, you know, the reward of, you know, massive future contracts should be the incentive, not there should not be risk free innovation, right, as a privately held company with with shareholders and running as a for profit organization.

1:27:41I agree. Well, let's move on to our next story, the Hymns Super Bowl ad. There's an article in the Wall Street Journal here. Hymns Super Bowl ad spotlights weight loss drug copycats as clock ticks on their business. There's a full-blown war over copycat versions of blockbuster obesity drugs, but their days are likely numbered. During Sunday's Super Bowl, Hymns and Hers Health, ticker Hymns, a telehealth provider known for its provocative ads promoting erectile dysfunction and hair loss treatments, aired a commercial portraying America's obesity epidemic as a rigged game where people are denied affordable weight loss medications because of a greedy healthcare system.

1:28:22The ad positioned hims and hers, which sells a compounded version of semaglutide, a copy of the active ingredient in Novo Nordisk's Wegoovi and Ozempic, as a Robin Hood of healthcare. There are no, there are medications that work, but they're priced for profits, not patients, the narrator says, as Childish Gambino's social justice anthem, This Is America, plays in the background. Hims and Hers offers life-changing weight loss medications. They're affordable, doctor-trusted, and formulated in the United States. Predictably, the ad sparked backlash even before the big game. A pharmaceutical lobbying group called Pharma labeled it misleading, and Senators Dick Durbin and Roger Marshall, a Democrat and a Republican, sent a letter to the FDA calling it a deceptive advertisement that failed to disclose side effects or safety risks unlike traditional pharma ads.

1:29:15Spokeswoman for HIMSS said, the ad aims to raise awareness to a critical issue, the obesity public health crisis by showcasing the impact of obesity and realities of the lack of access to life-saving weight loss treatments. And so HIMSS stock is way up. The company is doing fantastically, but little bit of controversy about the compounding strategy. Did you see the ad, Jordi? What do you think about it? What do you think about the ad, just the overall strategy of, uh, advertising weight loss drugs at the Superbowl? Uh, so one, I think that TJ Parker had probably one of the better takes here. I don't know if you remember the post, maybe we could pull it up.

1:29:55He, he was hypercritical of it. So for those that don't know, uh, TJ, uh, is the founder of PillPack sold it to Amazon for a billion dollars, built a health tech company, the hard way, like being very, very, very diligent about following the rules and working well with the regulators. And that's part of the reason they had such a big outcome and were able to be acquired by, you know, a massive player like Amazon. He pushed back and he was basically like, you're completely disrespecting all, you know, patent law with this. You're selling at the same exact price as the people that actually own the IP.

1:30:33and you're playing very aggressively in a gray market that you're not even passing on those benefits to consumers. So his main takeaway was you're selling this for the same cost as the other players, yet you are trying to position them as taking advantage of consumers. And so he felt it was somewhat disingenuous. I mean, this is not the first time that HIMSS has been in hot water. The CEO, Andrew, and this, again, for context, HIMSS and HERS was one of the big success stories out of the DTC era. There was very few companies that made it public. At$10 billion, it might be literally the most successful DTC company other than maybe Chewy to come out.

1:31:24But even that's more of an e-commerce platform. Yeah. But in terms of, yeah, I mean, huge, huge success for everyone involved. And so, yeah, there was a very long period of time where people said this company was like basically zero and like shouldn't be public because they were losing a lot of money and they flipped. And then they were in a bunch of, they had a bunch of controversy. It must have been back in the middle of 2023. but they the CEO has you know family history in in Palestine and like came out very aggressively in against you know sort of Israel's action there and then the stock like you know dropped dramatically there was a ton of you know short selling pressure so he's no stranger to controversy um and so anyways i mean i i think they're just selling so much glp ones right now that the market is like basically what the market is saying to me is yeah they're they're um yes of course they're bending the rules around compounding and like but they seem to be okay with that risk appetite because they're printing so much cash off of this that they're like it's one of those situations where they're like, even if we get, you know, a few hundred million dollar fine down the road, like we'll just pay it and we'll be in a better position with a bigger customer base.

1:32:49And so I just think this is one of those things. Hims and hers was like very well positioned to take advantage of this new development of this new drug. And we've talked about, you know, when we talked about Novo Nordisk, Novo Nordisk had very few customers in the U.S., right? It's very possible that hims and hers is, is like acquiring more customers on a day-to-day basis, uh, even with heavy competition from row and individual doctors and things like that. So, yeah, so I believe row is a white labeling, uh, or reselling and really just a portal to the actual Novo product, which probably means lower margins.

1:33:31uh whereas uh because typically the the name brand drug uh is on patent for a number of years and then it eventually goes generic um but if there is a shortage uh the fda uh will allow essentially patent infringement for from like the patent rules don't apply if there's a shortage of a drug and the fda determines the drug is important and this kind of makes sense you know Obviously, if there was some sort of cancer drug and everyone was getting a certain type of cancer and there was some cancer shortage, we'd be like, let's make as much as possible in every possible lab. And so the fundamental rule makes sense.

1:34:13And so the FDA recently declared the shortage of Eli Lilly's Monjaro and Zep bound over. But Novo's Ozempic and Weguvi remain on the shortage list. And so this has allowed compounding to continue unabated. And there's been a big discussion over, you know, when will the shortage end? When will this compounding not be allowed to happen? Is the compounding higher quality, lower quality? There's been a lot of debate there. The company said it's increasing supply and is in talks with regulators as it seeks to get off the shortage list. So Novo does not want to be on the shortage list because it means HIMSS can compound.

1:34:51But, you know, it's unclear what HIMSS strategy will be post-shortage ending. They could wind up acting just as an e-commerce platform to get the real drug, the non-compounded version. There's a lot of different ways. And I think shareholders might be looking at, hey, they're acquiring all these customers. They'll still stick around and buy, you know, the quote unquote real thing. The lower margin. Yeah. Yeah. The lower margin version. Exactly. Because it is, you know, obviously like the whole dynamic of telemedicine is it is embarrassing to go into your doctor and say, I have a problem with erectile dysfunction or hair loss.

1:35:30And so you click a button. It's very sterile. You just go through their web flow and then boom, the medicine shows up at your doorstep. Great, great, like consumer user experience, essentially. And it's the same thing for being overweight. You might not want to talk to a doctor about that necessarily. And so a telehealth, telemedicine interaction might actually be higher conversion rate for selling these drugs. And if they can sell more of them through, even if they're at a lower margin, maybe there's a bull case here. I don't know. We'll see. Yeah, TJ, I pulled up TJ's post. He said this was on January 28th.

1:36:05So they released their ad early, clearly trying to front run the other campaigns. TJ didn't hold back. He said, imagine shamelessly stealing IP, compounding their drugs, which results in patient harm time and time again, selling your fraudulent product for roughly the same net price as the original inventor, and then painting them as the problem in an effing Super Bowl commercial. So, you know, very, you know, that's his point of view. Didn't mince words. Didn't mince words. um the thing about compounding pharmacies that's fascinating is you can go and just buy a compounding pharmacy for less than a million dollars and just start making drugs and and so anybody uh uh there was one in my yc batch uh and i think they didn't even buy one they just uh they just set up and got the licenses and i think they were doing uh retinol retinoid it's like a acne medication skincare basically so yeah i mean in general if you're trying to do something with health or FDA, you can usually go the nutraceutical, uh, you know, supplement route, which is basically unregulated and you can be like alpha giga brain enhancement.

1:37:13And you can say all the crazy things you want because you're not really making claims. You're only making like structure and function claims. Then as you move up, you go into compounding, uh, and then eventually you go into FDA drug. Typically then you're a biotech company. You go through phase one, phase two, phase three trials, you get a patent. You're, you are releasing like a real drug. And that's what novo and eli lily do startups in the silicon valley sense have never been able to really crack that uh it's been more of like the biotech path you go public really early it's a different path um but now we're in also all these blurry territory yeah so these weight loss drugs fall into the pet like broadly into the peptide category and so people are uh for a while it's been this sort of gray market of you can get peptides and the same you can get peptides for weight loss purposes but you can also get them for you know that that stimulate testosterone production because peptides end up being these sort of precursors to hormones in the body so it can be a precursor to hgh right it is one so um there's a there's a famous peptide called bpc157 that is referred to as the wolverine peptide and this is um uh this is what aaron i think aaron Rogers was taking where he tore his ACL and like basically was back on the field in like remarkable time.

1:38:29And so, uh, BPC one five seven allows you to heal from injuries, like just ridiculously quickly. There's there's, you can look up on forums, people that are like, I broke my leg and I was like fully healed in like six weeks, you know? So it's like really effective, really, but they're super complicated. You're dealing with complex processes in the body. They haven't been, And many of them haven't been studied well enough. So it's very much a wild, wild west. I do know there's some startups that are looking to take advantage of the sort of gray market right now. And but it's a difficult space to build in because there's so much demand.

1:39:04If you tell people like, I will help you lose weight or be stronger in the gym or recover from injuries, it's going to be a lot of demand for that. But then are you going to be able to build durable IP value without these big pharmaceutical companies coming in? And then TJ's point around, you know, patient harm related to compounding. It is a good, you know, there's a, you know, the pharma industry gets so much hate from so many different types of people because they have had numerous incidents where they've done, you know, sort of bad things or released drugs that they knew weren't effective or that had a bunch of harmful side effects.

1:39:39But one thing is if you're getting a drug that you know is effective, you actually really want it to be made in like the most you know professionalized uh commercial capacity with incredible testing and uh that's something that that the big pharma companies generally are going to do better than you could be ordering you know compounded with govi and it's just some dude in a random compounding pharmacy that could just be one room somewhere It's just a license, right? And he's just making this, putting it in a vial and chipping it off to you. And then you're just injecting this into your body. And so generally, I think we want patients and people that are using these drugs to have access to highly reliable, intensively tested.

1:40:24It's pretty clear that the compounding, like, I don't know, it's not even a loophole, but like the compounding pharmacy regulations were written for, hey, your town might have a local pharmacist. And in a shortage, you should be able to walk down to the pharmacy and they should be able to make you, you know, something that they can't otherwise buy. and then this was taken this law it's very similar to the de minimis loophole for timu where it's like no one thought that you could put five billion dollars of product through one company through the compounding uh like yeah regulations uh but the free market will always put it to the test yeah how about uh people are on hims and hers for mass monsters what about like chads and Stacy's something like that.

1:41:11I'll tell you, I'll tell you offline, but our friend of the show is making a peptide, uh, sort of like telemedicine type company. He's going to send us some and we're going to inject it. We're going to inject it on the show. I'll inject it. I think I want to, I think I want to maintain my natty, my natty status, but we'll see. Maybe if I get a terrible injury. I'll need to give that one a try. There's an interesting wrinkle in here. Once you have a large customer base, you essentially have a large voter base on your side and they could demand regulatory changes, which explores. And so while Uber disrupted the taxi industry, HIMS and HERS is up against Eli Lilly, Novo Nordisk, and the entire pharmaceutical and health insurance complex.

1:41:53And the law is pretty clear that when it comes to a shortage is, when a shortage is deemed over, mass compounding can't continue. That's why HIMS and HERS doesn't sell compounded versions of ZepBound. It may take a few more quarters, but Novo Nordisk will eventually produce enough supply to end the shortage of its drug. When that happens, despite their efforts to influence public opinion, compounded versions will likely be severely limited. So fascinating story. Very interesting use of a Super Bowl ad. Drove a lot of contentious debate on the timeline. But at the end of the day, we'll see what happens.

1:42:28Probably good for business. I mean, I, I, I knew some people starting, uh, you know, weight loss telemedicine companies and, uh, you know, roughly two years ago, and I was kind of short new entrance into telemedicine, but many of them, the demand is so significant. And there really is a shortage broadly of these drugs that almost anybody that launched and had any type of quality operating experience, you know, and capabilities like did pretty well. Um, so a number of companies that just rocketed in general, massive rounds in general, hims can hims, you know, the narrative for him to take the high road is to say, uh, being fat is so unhealthy that we are willing to play in a gray market.

1:43:14If it means helping more people lose weight and they, they, they do have, there is a narrative to be like, uh, you know, we are, you can hate what we're doing, but you know, judge just based on our customer on how our like you know customers feel after using the product because the person that takes a hymns and hers you know compounded version of one of these products and then loses 50 plus pounds i guarantee you they they have positive feelings towards hymns and so i don't think we'll know the sort of impact or if if hymns was good or bad yeah Until we can see like, you know, enough customer and patient outcome data.

1:43:55Yeah. I mean, just thinking about it, like from like a technologist, future of the internet thing, like having a doctor that's available on your phone or your laptop over a Zoom call or a text message, that feels like something that will be real. and we've thought very narrowly about these companies early on as like this one just does ed this one just does hair loss this one now they're doing two or three but eventually i mean you could see a lot of young people don't have primary care doctors they could effectively replace that and then hey we need some blood work go here do this oh we need we actually need you to go in and get a physical we need to like you know scan you or something go to this location but for the basics and just the prescriptions, it does seem like the future is some sort of online telemedicine.

1:44:46That's not going away. And so, you know, hopefully all the companies that are working on this can get through all the complicated regulations, play by the rules and win on product. And I saw somebody on X saying that, that HIMSS was a$1 trillion company. I've seen that too. That's very funny, but maybe there's something in there with like all of it's so care in one app or something i don't know yeah i mean i think uh it makes sense you can make an argument that generally the next that the next trillion dollar consumer company will be in health care yep is is it going to be um is it going to be him's no idea there's never been a medical aggregator in that way there are obviously massive hospital networks, there's massive drug companies, but there's never been anyone that's succeeded in really aggregating all the market power where it's like, you know, if you need paper towels, you're going to open up Amazon.

1:45:44And that has not been the case where it's like, if you need a refill on your medication, there's one place you go. Unclear how much of a winner-take-all market it is. Obviously, it would have to be extremely monopolistic for there to be a trillion-dollar outcome in the space. But, you know, exciting to watch it play out. I'm sure there'll be more drama in the future. We'll have to have TJ on. Maybe we'll have to have Andrew Dudam on the CEO of HIMSS. Hear it from him. We got to have, we got to have PVP debates on the show where we just take opposing views and let them, let them duke it out. You know, I'm ready.

1:46:15I'm ready. Well, speaking of PVP, we got a post about PVP meme coins from Arjun Balaji. He says, meme coins were once fun and pure, but the, but the industrialized trenches have turned a harmless PvP game into a predatory one, dominated by Insider Edge. Traditional casino games and meme coins share a core design idea, a high return to player that masks a built-in edge while delivering intermittent variable rewards to players. Traditional casino games like Slots and Blackjack offer high RTPs, 90 to 99%, meaning you might lose$1 in expectation of$100 of wagers. These games work because they leverage near-miss effects and the gambler's fallacy, ensuring that the lure of a big win keeps you in the game even as you're bleeding bankroll.

1:47:05As I see it, the main issue with meme coins is gambling to game today is that they have moved away from their purest form to a fully industrialized version of the trenches. Initially, they function more like PVP slot machines. Most bets evaporate, but there's a small chance to graduate with a five to 25 X multiplier or even hit a jackpot level payout of 100 to 1000 X when they temporarily become PVE. The thrill is from catching a runner or watching someone hit a massive win. Now only one to one and a half percent of pump fund launches graduate every day. I would guess nearly all of these are industrialized, operated by sophisticated influencers and insiders who launch them to their audiences with ever shortening half-lives.

1:47:49The death knell for these games is when RTP drops so low that uninformed players have no chance to profit. Gambler's fallacy in social media can temporarily keep the game alive by spotlighting winners. Over time, if nearly all profits are captured by the house edge, the player pool is liable to dry up and destroys the original harmless PvP thrills that made the memes fun in the first place. What do you think about meme coins, Jordy? So funny anecdote. out uh jason calacanis posted today like please ban these meme coins uh at sec gov and then uh which is funny because you can't actually ban meme coins like the the the nature of them being just like code that runs on a blockchain it just kind of means that that no matter what the government says they can make it harder to on-ramp funds but even then it's like there's enough like actual uses for crypto that it would be hard for the sec to be like coinbase you know you can't on-ramp funds anymore so cat's out of the bag you know it's not going back in uh but the funny reaction to that is somebody immediately launched a token called uh stupid effing meme coins and then that went to like a multi-million dollar market cap and like immediately had a bunch of volume so all it took was one post from jason and somebody used that as an opportunity to launch a token um so i told you this, you're going to say, you know, not financial advice, like never buy meme tokens.

1:49:19And someone's going to launch a meme coin called not financial advice or never launch. Like you can't even have fun with it. And that's what I really don't like about it. I follow the, what would your mother say rule? If you can't explain it to your mom and make her proud, you shouldn't be doing it. This applies to the language that you use, the vitriol that you bring to the timeline, as well as the projects that you launch. A lot of these meme coins are low class and vulgar and we don't support them here on the show. Yeah. We will never launch a token at technology brothers, but going back to the original piece, I think it makes a lot of sense.

1:49:52The, the whole, you know, people are doing meme coins for two kind of real reasons. It's like very much an entertainment thing, right? Like gambling is entertainment. There's like the social entertainment, uh, exhilarating element to it of, I might win a lot of money. Um, but as as more and more of these in the same, basically meme coins incentivize groups of people to coordinate against groups of other people. So it's PVP, it can be one-on-one, but then it ends up being small groups of, there's been a lot of pressure on a group called the LA Vape Cabal, which is a group loosely led by somebody named Faze Banks, who was like a famous, you know, uh, gaming, um, you know, part of the phase clan, which I think phase clan was like publicly traded or maybe still is.

1:50:50Um, I got to see if they're still at it. Um, but, um, yeah, let's see there. Oh, the brand still lives on even though the stock's down. Wait, no, they're, they, I think they're at, they're at a$14 million market cap and you can't, they were delisted. It looks like, uh, delisted, but they still do sponsorships and there's still different content creators that join their collective essentially yeah so anyways uh you uh solicited zero dollars on public um but uh but anyway so so there's been a lot of pressure on them uh they had the hawk to a girl they like went on their podcast and then people were saying that they were sort of doing insider trading against that so overall like it feels like they're again the president launched a meme coin so and and it's just sort of like code that's out there running it's not going back in the bag but i don't um it what what arjun is basically saying is like unless you let the average player make some money sometimes like people are going to stop playing the game right so it's possible that um it's possible that this thing becomes it feels more likely that like it needs to find some independent equilibrium versus like the government solution to me but who knows it's a wild wild space um yeah i don't know i mean we kind of went through this with the nft boom i'm surprised we're going through it again i thought we learned our lessons there but uh people keep going for this stuff yeah americans it is funny it is interesting to think you know open sea at one point was a 14 or 15 billion dollar company like i'm sure if they raise money now it'd be a tiny fraction of that uh it's very possible the same thing happens to to pump fun and uh they end up at a point where you know people you know people just say eventually get so burned like people got on nfts where they're sitting there they're like I have a picture in my wallet that I paid$20 ,000 for, and I don't want to play this game anymore because I'm not having fun.

1:53:00So we'll see what happens. But one thing's for sure, gambling always finds a way. Well, you know what else always finds a way? The consultants. Let's go to Rohit Mattal. He says, Accenture had$1.2 billion in new bookings related to generative AI, and it It has 69 ,000 people working in data and AI. Very funny number. 69 ,000 people who don't know anything about AI are helping the largest US companies with navigating the fast-changing AI world. One of the biggest grifts in the world. I don't know about that. I mean, you can get up to speed on some of this stuff. A lot of it's just like, hey, you're a massive company.

1:53:40Do you have a ChatGPT Enterprise subscription yet? Because maybe your people could benefit from using chat GPT more regularly. Like some of the transformation stuff's so basic and it can drive a lot of shareholder value if you're just improving everyone's like, just going in and saying, like the recommendation from some of these companies might be like, hey, go install Devin, go get Cognition. And like, hey, you know, okay, you just have an extra developer and the ROI on that contract is positive. And it's crazy to think because you think you would just go on X and figure it out yourself. But if you're a massive company and you need to pay Accenture to tell you this or put it together in a DAC or do all the implementation stuff on what's the legal implications, how does this fit in our organization?

1:54:26So I understand where he's coming from with the grift idea, but not fully convinced, actually. What do you think? Yeah, I mean, the. Yeah, totally. I mean, one, it feels absurd, but this has always been the business of consulting. there's a new technological trend and then they ride that trend in order to drive bookings and new demand for their services. I have talked with people in the past about there's totally a possibility to build the AI Accenture that helps people use AI. So basically agents as consultants that are internal at companies sort of helping employees better leverage AI tools in the business because if for example you had an employee with basically some screen capture all day long and it was just analyzing what you're doing all day and saying almost like clippy style like hey did you know that you can like you know use this automation or things like that so um i don't know i think companies wouldn't be spending the money if they didn't feel like there was some value sometimes the value of consulting services is so executives can just say hey we have an ai strategy that we're working on with Accenture and they're experts, right?

1:55:36They're paid to be experts. And the value is not necessarily the actual results they drive in the business. It's value to the management teams to be able to say that they have things under control if they're not. But again, I would look at this as like, you know, if I was like in college right now, I would be learning how to use these new AI tools and reaching out to legacy companies that maybe aren't in the target market of Accenture because they're smaller, but reaching out to$10 to$50 million a year businesses and saying, I will help you use AI better in this part of your business, or I will help your developers use AI tools to be more efficient, right?

1:56:16So if Accenture is booking 1.2 billion for their Gen AI work, a college student should be able to print 10, 20K a month just helping other similar businesses better leverage AI. So we've talked about this on the show before. That's the new version of I will help you to use Google AdWords, or I will help you to run meta ads, or I will help you do social media management. Like that is the opportunity on the ground. And so we had somebody in the audience ask. Um, we had somebody in the audience ask, uh, Green Gorilla says brothers, what advice do you have for new college grads? What industries companies do you see the most upside in joining?

1:56:59If you were 22 or 23 today, what would you do? And yeah, I mean, one is just like, whatever you're doing, don't wait to join a company to learn how to use these tools. Like just spend 18 hours a day learning how to use these products, sharing your work on X is a good start. And then go, you know, there's so many companies right now, more so than five years ago, where you can go and have that company go from$5 million of ARR to, you know, a hundred in a very short period of time. So, um, but again, there's still, there's also opportunities with these legacy businesses to go in and say, I'm going to, um, find, find, uh, uh, somebody with a$50 million annual business and show them how you can replace, you know, a hundred thousand dollars a month of, of payroll by like leveraging AI properly in the organization.

1:57:52So, yeah, I mean, that's a great take. Long Lake is doing that with HOAs. There's already companies doing that at larger scales with private equity buyouts. No reason that a young person couldn't start an amazing consulting business today. I love that take. I think that's a very good, very good advice for young people. Let's move on to a post from Impatient Ventures. This is an older post, but I wanted to highlight it just to give the audience a little bit more background on our friends over at bezel. Uh, they raised an$8 million seed round. Uh, of course we've talked about bezel before. It's a watch marketplace for buying luxury watches.

1:58:28We're huge fans of watches here. We're going to be doing a Valentine's day gift guide. Lots of good stuff on bezel that you could pick up for the loved one. Um, but, uh, the seed round was stacked. They got John legend, Kevin Hart, Steve Aoki, Michael Ovitz, Michael Rubin, uh, so many good, uh, celebrities in there. tons of great VC firms, liquidity capital, box group, shrug, abstract ventures, lots of, lots of great VCs in there. And just wanted to let the audience know bezel is here to stay. They're making money. They've raised money. It's a solid company and we love what they do. And I'm quickly becoming addicted to the app.

1:59:07Yeah. It's funny that you, uh, you pulled this post from impatient too because the gp of impatient uh jack was in the chat uh on the way he was in the chat amazing i don't use social media until now now i'm a brother lover and uh sent from the sauna at the standard miami so fantastic i'd love to see it rip a fun rip a fundraising announcement and then just go hit go hit the standard um that's great and uh yeah crazy crazy lineup they basically got all the most wash obsessed celebrities in the world into a single round and best part about it all those celebrities were marking me up i got in at the prior round i got it right around so thank you for the markup john legend uh that's brother behavior right there so uh that's great uh well here's a very random post bit of a bucket poll but i wanted to highlight on the show.

2:00:03It's from PF Young, a content creator on YouTube. He does mostly politics. I find him very entertaining. He has a series of videos describing online politics through the lens of League of Legends. And they're wildly entertaining. Even if you don't know that much about League of Legends, you can watch these and understand how all of the different groups and sub formations of how Jordan Peterson and Candace Owens work together and how Hassan Piker and Bernie Sanders worked together. Fascinating content creator. Love him. And he says, I am assembling a loyal cult following. And it's a screenshot of a comment on his YouTube channel.

2:00:41At this point, I only watch because it's kind of fascinating to see how far someone can get as a political commentator who refuses to read the news or learn anything about politics. I love that. That is the life of a political commentator. That's the life of every content creator. You just go out there and you rip the vibes and some people like it and some people hate it, but, uh, we love PF young and, uh, we got to have him on the show. If we ever get into politics, he'd be a great guest, but he's a very funny, fun guy. Somebody, somebody posted yesterday, uh, that they posted a meme responding to Luke Metro and it was, it was the, uh, it was a cycle meme i'm just oh i gotta you're fine hold it way up there but he says i look for tech podcast i find an interesting podcast downloads go up with politics it becomes all political slop and then i look for tech tech podcasts again so i'm going out uh to say uh to elias that uh who posted this that we're gonna hold the line uh for you strictly tech and business forever it's on record uh we never discussed politics and we're still covering tech earnings baby we're still going to be covering tech earnings uh i genuinely am not qualified to discuss politics and your views are just too extreme to to talk about without both of our views far too extreme for yeah it would piss off it would piss off everyone everyone everyone on both sides of the aisle actually we can't share we can't It'd be too rough.

2:02:18So we got to, we got to stay away from it. But yes, I mean, that meme is pointing out a real phenomenon, which is that the addressable market, the TAM of tech content just isn't that big. And I mean, even though acquired has not become a politics show, they have gone out of tech. Originally they were doing acquisitions in tech. They would tell you like the story of Google Maps getting bought or the story of Instagram getting bought. That's why it was called Acquired. Then it became the history of Facebook, the history of Google, the history of Microsoft. But then they went over and did LVMH and Porsche and Mercedes and all these just amazing firms.

2:02:59And they've graduated out of that and become a broader show. And now I think of them as just a great business show. They still haven't gone full politics. But at a certain point, you run out of tech content. And so you got to, you got to add in some other spice. Fortunately, we have discovered a hack, which is instead of talking about politics, we talk about luxury goods. So this might go down and we stopped talking about tech and we're just talking about sports cars, what happened in F1, the latest news and horse breeding. But we won't be talking about politics, that's for sure. We will be derailed.

2:03:34A little alpha for the listeners. So John and I, maybe we mentioned this on the show we're exploring getting our own racehorse so i don't think i even told you this yet john but tomorrow we have a call set up with a guy who specializes in in helping acquire racehorses so uh very you know this could just become a horse podcast and in that case it'd be cool because then we'd have just tech journalists come on the show exactly they could talk about tech and we would just be constantly trying to talk about horses and it'd be this dynamic where they're like what are you guys you're the technology brothers but you only want to talk about the, the, the, you know, prepping for the Derby, you know?

2:04:12Yeah, yeah, exactly. And everyone will be like, oh, I missed when it was a tech show. Now they just talk about horses. Oh no, it's all horse content. There's two horse pilled. Like they just want to go back to the old days. The old episodes are so good. Well, that's the way the cookie crumbles folks. You know, we might get derailed who knows, but not today because we're still talking about tech and we have an update breaking news from Mateo over at eight sleep. He says sleep fitness is taking over the world and the eight sleep pod is now available in Mexico. So if you're listening from Mexico, go buy an eight sleep pod by 10 right now.

2:04:46Code TBPN. I think that's our code, but we love eight sleep. I have been crushing it. Got a hundred sleep score. My first two nights ago, let's see what I did last night. It was a little rough. Oh, 100. Let's go. I got another 100 Sunday, 100 Monday, 97 Tuesday. 100 seven hours and 44 minutes of sleep i'm feeling great that's great here's the issue with the issue with sleep is most people overestimate how much they're actually sleeping yeah you think that you're you think you're getting you know your eight hours because you were in bed but it's like oh well maybe you didn't fall asleep for 40 minutes or you woke up at some point in the night so um i'm excited we we're gonna be announcing uh some some big news on pmf or die and the kickoff soon.

2:05:36But, uh, I got, um, uh, the players set up, uh, in the space yesterday and we're getting pods for them. Uh, so there'll be sleeping, sleeping, like, uh, sleeping like babies, uh, which I'm excited for. Um, and, uh, what else we got? I mean, let's just jump in. We got a post from Delian. Oh yeah. We got some breaking news from Delian. Delian broke the news on this uh google maps has updated uh that big body of water south of louisiana uh it's now called the gulf of america and honestly i've honestly forgotten what it was called before i i don't remember it as anything but the gulf of america i've been calling gulf of texas i guess but now we've expanded it to the gulf of america but i'm very happy to see it uh it's very cool that google hopped on the train they didn't fight it they said look if it's going to be the gulf of america that's what the people want it's the gulf of america a little bit of a mouthful i don't know how long it'll stick around it's going to be one of those things that goes back and forth we you know democrat wins in 2028 and boom it's back to something else it's funny because it it seems like a political issue but it should we should all be united around it it's like hey this is massive body of what like yeah i didn't know i didn't know that the u.s had the authority to write executive orders to get, you know, bodies of water renamed, but, uh, it's, it's a pretty, you know, one, if Mexico tries to make some, you know, international effort to rename it, the Gulf of Mexico, uh, I think Trump would basically say like 50 % tariffs on all goods coming in from Mexico until you tell you, you know, just accept the Gulf of America G of A, uh for those of us that that say it you know frequently uh but uh i mean i think this is the start of something great i i i think we got to take this renaming much further uh new england patriots we're dropping the new it's just the england patriots england you're old england now you're not you're not just england you're old england or we have england now yeah i don't want that i don't want that also greenland iceland it's always been confusing greenland's the icy one.

2:07:45Iceland's the green one. Let's flip those names around. Let's switch it. I want to rename those. Let's go around. We'll just clean up the whole taxonomy. Any weird names out there, you're on notice. If your country name doesn't make sense, we're renaming you. If your body of water doesn't make sense, we're going to rename you. It's going to happen. We got the keys to the kingdom here. Delian's going to make it happen over at Google and the Google Maps. You better take some screenshots now because it's going to look completely different in a couple months anyway let's move on to kyle over at wander we got a post from him his pin post a banger from 2019 uh just trying to give you some more color on who this guy is kyle he runs wander company we partnered with talked about them on the show before they have wonderful rental homes beautiful rental homes you got to go scroll the feed for wander and see what's available it's really amazing some of the greatest homes people are saying it's fantastic homes folks they're saying is fantastic.

2:08:40And so he says, underappreciated phenomenon, working at a high growth margin focused startup is a real life MBA, where you get paid six figures plus equity to learn how to build a business instead of paying six figures to go into debt and learning how to do how to build a theoretical one. Absolute banger 5k likes, I can see why he got so much love on this post. And that really just gives you a little insight into how they're building this business. They are high growth, but they're also margin focused. Every dollar matters in this business because when you pay a couple hundred bucks, a couple thousand bucks to rent a wander, they have to pass a lot of that cost on to the person, the renter, right?

2:09:23They only take a fee. They're a marketplace, remember? And they don't own a lot of their inventory or I think very much of any of their inventory at this point in the future. It will be a marketplace business. And so, you know, he's obviously learned as they've been assembling the plane as they're flying it and, you know, gotten the real life MBA and it shows because the business is ripping. Well said. Well said. Well said. Well, let's move on to some more geopolitics, geography news. We never talk about politics, but Germany is in shambles again. EU regulators think it's too dangerous to simply break a bottle across the bow of a new ship.

2:10:03Instead, they insist on the use of this contraption. This is why the European Union is failing. This is economy minister Habec flailing. And we can't show the video. We're still working on it, but the guy is absolutely hammering this champagne bottle, I guess, across the bow of this ship with this very awkward contraption. And Joe Lonsdale says, sad metaphor for over-regulated Europe in 2025. 5K banger. We love to see it. Very funny, very funny, very odd. I don't know why they're using this. Apologies, apologies follow up too from another angle. And he goes, you switched the screen, Ben, so I can't see it.

2:10:46He says, he eventually just does it the old way and it works, a metaphor there. I love it, yeah. So Germany, we put you on notice weeks ago when we talked about your crumbling economy. We told you, you got to stop reading out all of the documents during a financing close. That's unacceptable. That's un-American. Germany is a very un-American country and you're on notice. So start doing deals the old fashioned way on a napkin. We've been thinking about napkins. Yeah. Huge napkin with an Excel sheet printed on it. That's the way you deal on there. You can map out a full DCF, multiple sheets, but it's got to be done on a napkin and closed over a text message.

2:11:29Let's move on to John Arnold with a fantastic story about Enron, the real Enron. Not these Enron imposters who are selling scam cryptocurrency, but the old Enron energy traders from the Texas-based company that went bankrupt in around the turn of the millennium. He says, I can confirm this story from Byrne Hobart.

2:12:20to me that their intent was to reverse engineer the business and I wasn't going to help them. They knew that people looking for a job, particularly if they didn't have a fiduciary responsibility to a current employer, would be very free with info. Interview everyone and you get a 360 perspective of the industry, how the business makes money, its competitive edge, who the best employees are, etc. Citadel probably interviewed several hundred Enron employees. In the end, they maybe hired five. Much more importantly, they built the framework for how to enter the energy business, which as Ken notes has been an enormous success.

2:12:51I eventually did talk with Citadel on their third call to me. They asked if I would talk with Ken directly. I was at the airport heading to Aspen for a quick industry event, legendary. Um, I didn't know Ken personally, but had great respect for what he built. So I told this rep he could call me when I got back to Houston the following week. She said, great, but called back a few minutes later with a question. If Ken flew to Aspen to meet me in person the next day, would I out of respect? I said, of course. The next day, I had a great meeting with him, and later that week, he offered me a job as head gas trader.

2:13:21I wanted to fully run an operation and thought there was more upside if I could have my own fund, so I declined. I ended up building my own firm, starting with traders and hiring deep fundamentals expertise. Citadel started with the research, as is their DNA, and built up a trading operation around it. Both models worked fabulously well. I came away from the experience with an even deeper respect for both Ken and Citadel and remain friends with him to this day. I started with a niche gas trading, built a niche fund, and burnt out after 17 years. Ken started with a niche convert arb and built one of the most successful financial firms ever and has never tired.

2:13:58And the quote image here is, yeah, Jordi, what you got? No, I mean, just amazing, amazing story that gives insight into just how savage a firm like Citadel is. You don't get to be that impactful and that large by simply being a good investor or being smart or making some great trades. There's a level of professionalism and just execution in that industry where in venture capital, you can kind of sit on your hands. And if you're at a good firm, you'll meet most of the best founders. And if you do one good deal every couple of years, you can make a great career out of that. And that's just like not how it works in the hedge fund world.

2:14:48You will get absolutely lapped by a firm that, you know, many of these firms are playing PVP and they will send an army out, you know, in a situation situation like Enron and just use that as an opportunity to launch a new business line and basically just completely mine, mine Enron for all of their alpha in the sort of basically the dying days and the sort of, you know, during the funeral, basically. So absolutely, absolutely savage. And I'm glad that story had, you know, a happy ending. And that sounds like he, you know, was able to do well, uh, independently. And, um, yeah, it's, it's cool to see.

2:15:29Yeah. A couple, a couple of takeaways for me. I mean, first is that like a lot of people know Enron just as a fraud and they think about it like a Theranos fraud where there was never really a product that worked. And that's just not true. Enron had multiple business lines that were doing phenomenally their gas trading business, energy trading. A lot of that was going well. They just cooked the books and had this accounting scandal and we're doing this crazy mark to market thing. And there's like all this crazy accounting cycles. We'll have to do a whole deep dive on Enron. But there were some super talented people there that went on to do great things in other financial institutions.

2:16:05And Ken clearly was able to extract the signal from the noise and understand that certain pieces of the business, you wouldn't want to touch with a 10 foot pole, probably the accounting department. But there were plenty of pieces of the business that were running super tight ships and creating a ton of financial alpha and going and getting that alpha and those secrets was incredibly valuable. A lot of these firms, they trade on some secret strategy, some insight, some flow, nothing illegal, just a different pattern of pricing a commodity or stock. Maybe they have a different strategy. Maybe it's highly quantitative.

2:16:41Maybe it's highly qualitative. Maybe they're doing a ton of research. There's hedge funds that are buying satellite data, for example, to understand, oh, if there's this many cars in the Walmart parking lot, Walmart's going to beat earnings. Everyone has a different strategy. That's an obvious one, but there's a million that are subtle and those are hidden within firms. And if you can get the guy who knows that secret when his firm's collapsing, you're just going to be able to take all that alpha. What do you got? Yeah. I always love the example of using satellite data and like developing your own data sources to better price bets.

2:17:15And that's the kind of thing you just don't. VCs never do that, like general. There would be more stories about them being like, yeah, I went to the competitor. I sat outside the competitor's office or I paid somebody to sit outside the competitor's office and realized that XYZ company had a very flexible remote policy. And so I decided to go all in on their competitor who was like in person. Maybe they're looking at some of that same information, but it's not as much of a, it's more of like a positive sum game. And there's more risk, not necessarily more risk, but there's more just sort of luck and patience required that there's not maybe the same information arbitrage or it's just not as serious of an industry.

2:18:07Yeah, when I worked at Citadel, I remember this hilarious story where you know the weather reporter on the local news. They always say, let's go to the Doppler 5000. We got a Doppler radar system. We're gonna tell you, oh, there's a cold front coming in here. It's gonna rain on Tuesday, that type of stuff. And one of the weather traders who's essentially trying to determine how much rainfall there's gonna be and that will affect crop yields and then crop prices so you can trade the commodities based on the weather report is like, yeah, their weather system, their Doppler radar, that's like a Honda Civic.

2:18:40We have a Ferrari here. And they could predict the weather much better than local news. And you think about the weather report as like the most authoritative source because it is just a random consumer of weather news. But the hedge funds have it way more dialed, way more dialed. And there's a million little micro areas where they figure out one market edge and then exploit that 1 % margin all the way up to the full market size. This is the original story of Ken Griffin. I mean, he found that convertible debt was, there was this massive arbitrage that was available. He completely mined it, but then completely capped out on the size of the market because he basically brought convertible debt.

2:19:18He arbitraged all the value out. So it was correctly priced. He had to scale up into other strategies. And that's where the quant side came from. That's where the global macro side came from. And he eventually built a very insane, huge firm. And then that doesn't even take into account civil securities or the market maker and is such a bigger company now. And at one point he was doing an investment bank. I was thinking about going public. It was a crazy story. Um, but anyway, um, fascinating story and a good lesson there that even in chaos, uh, go get the good people because, uh, not everyone is a disaster when the ship is sinking.

2:19:49Yeah. I wonder if anybody did that when, when, when bolt was basically imploding, you know, I'm sure, I'm sure they were getting, um, I think striped in actually, yeah, stripe went and put some people out, but, but not as aggressive as like going and camping. out outside, you know, the office basically. Um, so well, it's different because the, the, the thing with like, I'm sure Bolt had some great engineers. You put those people to work on Stripe's core business. They're going to drive some value. It's very different when there's like one key insight at this hedge fund that's delivering, you know, a billion dollars of profit if it's run effectively or a hundred million dollars of profit or something like that.

2:20:27And it really goes to this, uh, this idea Ben Thompson was writing about in his, uh, I think it's Monday piece about how OpenAI's ChatGPT Deep Research is a fantastic product, but it is fundamentally flawed in some ways in that it only has access to the internet. And so if you run a report from Deep Research on an industry where there are secrets, there are firms that no one knows about, because maybe there's a big player in the industry that barely even has a website, but they're actually really important. And you know them by reputation if you actually operate in that industry, but there's just nothing about them online.

2:21:08Deep research just completely miss it. This was an example there around industry secrets. It's not even secrets. It's just like operating know-how. When the whole creator economy boom was happening in sort of 2020, 2021, I had been working with creators through Branded Native, my first company and and literally paying millions of dollars to creators and so i would get pitched these ideas and i'm like yeah that's a good idea and it totally makes sense if you've never worked with creators and and and so i i didn't end up investing in any of those companies because i just knew fundamentally that they weren't gonna they just weren't gonna work and so you have this this happens tech the the good thing about tech and a lot of great companies come out of this is you have people that are talented and smart, but without industry experience will come into a new industry and, you know, basically completely change it, upend it, disrupt it, um, by just having a fresh point of view and, and, and thinking, what if we just like did, you know, did this from first principles or whatever, whatever their approaches.

2:22:15And for as many like success stories as there are, there's a bunch of, you know, low profile failures that happens when, you know, people that, you know, apply that sort of startup mentality, like I'm going to come into this industry with no experience and disrupted. And in the situation with Ken, he was like, I'm going to come in and take over this market or compete in this market. But I'm going to do that by downloading as like hundreds, thousands, in this case, thousands of hours of interviews, where they're just grilling people on the exactly what they did, how do they win, where, you know, what, what aspects of the business were really making money, who was, who were the top performers and then just drilling them, you know, grilling them even more.

2:22:57So, um, anyways, a lot, a lot of learnings from that. Yeah. Fantastic story. We'll have to do deep dive on Ken Citadel and Enron and so many more things. So stay tuned. I'm sure there'll be tons more content. Uh, we will probably, we get some travel tomorrow, some board meetings tomorrow. So we might be on this week. And please leave us a five-star review, Apple podcasts, Spotify, please leave it on both. It really helps the show. And when you do leave an ad for your company, a company you like something funny, just write a bunch of stuff in the comment with your five-star review. We'll read it live on the show.

2:23:38We got one review. I'll just read right now. from C5183 on Apple Podcasts. He says, rare combination of funny and educational TB combines acquired caliber research with a solid amount of humor and self-awareness, which you don't get many places. It's poised to become Red Scares for guys who want to show you their deck. Couldn't have said it better. Couldn't have said it better. That was the exact idea I had. Yeah, that actually, yeah, you actually nailed it. That was, that was. I literally said that. Yeah, and I didn't even know what Red Scare was at the time and you were like, look at it. This is what we're doing.

2:24:14Uh, so format wise, uh, the only, the only critique of, uh, the only critique of, uh, that review is there's no ad in it. So I'm kind of feel a little bit much like red scare. They don't run ads and the business could be so much better. Anna and Dasha, get it together. You wouldn't need to launch a coin Dasha. If you just ran some ads. There you go. There you go. Anyway, thanks for watching. We appreciate you guys. Stay safe out there. We'll see you on the timeline. Have a great day.